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Context of 'May 2003: White House-Connected Lobbyists Form Company to Advise Companies on Doing Business in Iraq'

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President Bush appoints Joseph M. Allbaugh, a longtime Bush aide, to serve as the director of FEMA. In his new role, Allbaugh will coordinate “federal disaster relief activities on behalf of President Bush, including the Federal Response Plan that authorizes the response and recovery operations of 28 federal agencies and departments and the American Red Cross.” Additionally, he will oversee the National Flood Insurance Program and the US Fire Administration and initiate proactive mitigation activities to reduce loss of life and property from all types of hazards. Allbaugh will manage FEMA’s annual budget of about $3 billion, about 2,500 permanent federal employees, and 4,500 temporary disaster assistance employees. Allbaugh has served Bush in the past. He was “the governor’s point person for nine presidential disaster declarations and more than 20 state-level emergencies.” Allbaugh also served as Bush’s national campaign manager for the 2000 election and as the campaign manager for Bush’s first run for Texas governor in 1994. He also served as Governor Bush’s Chief of Staff. Along with Bush’s longtime aides, Karen Hughes and Karl Rove, Allbaugh is known as one of the three members of Bush’s so-called “iron triangle.” [Fire Chief Magazine, 3/1/2005; Federal Emergency Management Agency, 9/16/2005]

Entity Tags: Joseph M. Allbaugh, George W. Bush

Timeline Tags: Hurricane Katrina

In a memo to FEMA Director Joe M. Allbaugh, the agency’s inspector general relays concerns over the Bush administration’s proposal to merge FEMA, along with several other agencies, into the newly-constituted new Department of Homeland Security. “There are concerns of FEMA losing its identity as an agency that is quick to respond to all hazards and disasters,” the inspector general writes. [Independent Weekly, 9/22/2004]

Entity Tags: Joseph M. Allbaugh, Federal Emergency Management Agency, US Department of Homeland Security

Timeline Tags: Hurricane Katrina

An alliance of Republican lobbyists form the company New Bridge Strategies to seek rights for major US companies to distribute their products in Iraq. The website states the company has been “created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the US-led war in Iraq.” As one unnamed partner at New Bridge will explain to the Washington Post in the fall of 2003, “Getting the rights to distribute Procter & Gamble products would be a gold mine. One well-stocked 7-Eleven could knock out 30 Iraqi stores; a Wal-Mart could take over the country.” Another person involved in the company will note that an order signed by Paul Bremer in September (see September 19, 2003) allowing foreign companies to establish 100 percent ownership of firms in Iraq increases the attraction of doing business in Iraq. [Washington Post, 9/12/2003; New York Times, 9/30/2003; Washington Post, 10/2/2003] New Bridge has close connections to the Bush administration and highlights these ties on its website noting that its chairman, Joe Allbaugh, was “chief of staff to then-Gov. Bush of Texas and was the national campaign manager for the Bush-Cheney 2000 presidential campaign.” The site also says, “The opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq.” [New York Times, 9/30/2003] Allbaugh dismisses criticisms that he is using his connections to profit from the war. “The stories I’ve seen have been couched as if people are trying to game the system, and that’s not what we’re about,” Allbaugh tells the New York Times. “We are trying to help Iraq become a capitalist country, and a leader throughout the Middle East. Iraqis themselves are asking for help…. We fought a war, we displaced a horrible, horrible regime, and as a part of that we have an obligation to help Iraqis. We can’t just leave in the middle of the night.” [New York Times, 10/6/2003] Individuals involved in the company include:
bullet Joe M. Allbaugh, chairman. The majority of Allbaugh’s career was spent in Texas politics. He was chief of staff to Governor Bush; later became his 2000 presidential campaign manager, and then was appointed by Bush as director of the Federal Emergency Management Agency (FEMA). Allbaugh currently runs his own consulting firm, the Allbaugh Company. [Allbaugh Company, 3/17/2007]
bullet John Howland, president. He is currently a principal of Crest Investment in Houston and formerly headed the company American Rice, which was once a major exporter to Iraq. [New York Times, 9/30/2003]
bullet Edward M. Rogers, vice chairman. Rogers served as a deputy assistant to President Bush Sr. and as an executive assistant to the White House chief of staff. In addition to his involvement in New Bridge Strategies, he is also vice chairman of Barbour Griffith & Rogers, an extremely well-connected Republican lobbying firm. Rogers’s wife, Edwina, is an associate director of the White House National Economic Council. [New York Times, 9/30/2003]
bullet Lanny Griffith, a director. He is chief operating officer of Barbour Griffith & Rogers. He served under the first President Bush as special assistant for intergovernmental affairs and then worked under him again as an assistant secretary of education. [New York Times, 9/30/2003]
bullet Jamal Daniel, a principal. Daniel has been an associate of George Bush’s younger brother, Niel, for more than a decade. An investigation by the Financial Times will find that Daniel, along with John Howland, has “attempted to exploit their association with the president’s brother to help win business and investors” on several occasions. “Three people contacted by the FT have seen letters written by Neil Bush recommending business ventures promoted by Mr Howland, Mr Daniel and his family in the Middle East. Mr Daniel has also had his photograph taken with the elder Mr Bush. Such letters and photographs can be valuable props when doing business in the Middle East.” Daniel is also involved in the investment fund, Crest Investment Corporation, of which Howland is also a member. The firm, which employs Neil Bush as its co-chairman, helped fund Neil Bush’s educational software company, Ignite. And according to one Middle Eastern businessman, Daniel sometimes introduces himself to potential investors as a founding backer of the Ignite. [Financial Times, 12/11/2003] Daniel, from a Christian Syrian family, also has links to Saddam Hussein’s Baathist party. The Financial Times reports he “is said to have been involved in the founding of the Baath Party and sustained links with it in both Syria and Iraq even after being expelled from Syria in about 1966 after Hafez al-Assad came to power. Mr Daniel has told friends that when he was young Tariq Aziz, later foreign minister of Iraq, was a visitor to the family home.” [Financial Times, 12/12/2003]

Entity Tags: Lanny Griffith, New Bridge Strategies, Jamal Daniels, Edward M. Rogers, John Howland, Joseph M. Allbaugh

Timeline Tags: Iraq under US Occupation

The Republican-connected firm New Bridge Strategies partners up with Diligence-Iraq to provide security for companies wanting to do business in Iraq. Diligence vets local employees and partners, reviews potential investments, provides daily intelligence briefs, and supplies security for company personnel and assets. Its fees are based on the level of risk involved. Diligence was formed in 2000 by two former intelligence officers, Nick Day and Mike Baker. Day, an expert in Islamic militant groups, is a former MI5 agent, and Baker was a CIA covert field operations officer specializing in “counterterrorism, counternarcotics, and counterinsurgency operations.” The company employs about 200 people—mainly former members of the US Special Forces, New Zealand’s equivalent of the Green Berets, and the Iraqi military—and has offices in London, the US, Geneva, and the Middle East. Its annual gross revenue is around $10 million. The company works hand-in-hand with New Bridge Strategies, whose chairman, Joe M. Allbaugh, formerly served as director of FEMA under President Bush. In addition to being Diligence-Iraq’s chief executive officer, Baker also serves on New Bridge’s advisory board member. Diligence received its initial financial backing from the Republican-connected lobbying firm Barbour, Griffith & Rogers (BGR). Like New Bridge, Diligence shares office space at BGR’s office in Washington DC. BGR also provided Diligence with its well-connected chairman Richard Burt, former US ambassador to Berlin, as well as its impressive advisory board. One of the advisers is Ed Mathias of the Carlyle Group. [New York Times, 9/30/2003; Washington Post, 10/2/2003; New York Times, 10/6/2003; Financial Times, 12/12/2003; Independent, 2/8/2004]

Entity Tags: Richard Burt, Diligence-Iraq, Ed Mathias, Barbour Griffith & Rogers, Mike Baker, Nick Day

Timeline Tags: Iraq under US Occupation

US administrator for Iraq Paul Bremer signs CPA Order 39 setting terms for foreign investment that are far more favorable than those that existed under the previous government. The order eliminates Iraq’s longstanding restrictions on foreigners’ rights to own property and invest in Iraqi companies. It grants foreign investors the right to fully own Iraqi enterprises and transfer 100 percent of all profits outside of Iraq. Prior Iraqi law, which allowed citizens of Arab countries to invest in Iraq, required that a certain percentage of investment profits be reinvested in Iraq. Order 39 also prohibits the government from establishing any terms for investment that would favor Iraqi investors over foreign investors. The order also states that in cases “where an international agreement to which Iraq is a party provides for more favorable terms with respect to foreign investors undertaking investment activities in Iraq, the more favorable terms under the international agreement shall apply.” [Coalition Provisional Authority, 9/19/2003 pdf file]

Entity Tags: L. Paul Bremer, Coalition Provisional Authority

Timeline Tags: Iraq under US Occupation

At the annual World Bank/IMF meeting in Dubai, Iraq’s nominal finance minister Kamel al-Gailani announces Bremer’s shock therapy program of economic reforms. The announcement comes two days after Bremer signed a number of orders opening up Iraq’s economy to foreign investment (see September 19, 2003, September 19, 2003, and September 19, 2003). Collectively, the orders allow foreign investors to acquire 100 percent ownership of Iraqi assets in any sector except oil production and refining, give foreign investors equal legal standing with local firms, and allow them to repatriate all profits made in Iraq without any requirements for local re-investment. The laws also cap income and corporate taxes at 15 percent and slash tariffs down to 5 percent, with the exception of tariffs on food, drugs, books, and other humanitarian imports, which can be imported duty-free. Al-Gailani says these “measures will be implemented in the near future and represent important steps in advancing Iraq’s reconstruction effort.” As an article in Economist magazine will note, the changes, which “bear the signature of Paul Bremer… and the imprimatur of the American consultants it has hired to frame economic policies,” represent “a radical departure for Iraq.” The article—titled “Let’s all go to the yard sale”—calls these reforms “the kind of wish-list that foreign investors and donor agencies dream of for developing markets.” The caption of an image accompanying the article reads, “If it all works out, Iraq will be a capitalist’s dream.” But the magazine also acknowledges that there will be resistance to these reforms. “Given the shock and awe expressed by many Baghdad businessmen at the scale of the changes, it is not clear that such a future regime would be able to resist pressures to reimpose protectionism.” It also predicts that the rapid overlay of this legal framework over Iraq’s existing economic system will create disparities. “The instant discarding of 40 years of national-socialist commercial culture is likely to create serious distortions,” the magazine says. [New York Times, 9/21/2003; Daily Telegraph, 9/22/2003; Economist, 9/27/2003]

Entity Tags: Kamel al-Gailani

Timeline Tags: Iraq under US Occupation

An article in the Journal of Homeland Security and Emergency Management notes: “[Joseph M.] Allbaugh brought about several internal, though questionably effective, reorganizations of FEMA. The Bush-Allbaugh FEMA diminished the Clinton administration’s organizational emphasis on disaster mitigation.” [Sylves and Cumming, 2004; Independent Weekly, 9/22/2004]

Entity Tags: Bush administration (43), Joseph M. Allbaugh, Federal Emergency Management Agency

Timeline Tags: Hurricane Katrina

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