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Gut Check in the Labyrinth


With fresh indictments last week, the UN oil-for-food scandal took an unexpected turn into the Labyrinth — the tangled skein of war profiteering and state terrorism that has seen the Bush Family’s lust for blood money emerge in three of the darkest criminal episodes in modern American history: Iran-Contra, Iraqgate and the BCCI affair.

Texas oil baron David Chalmers of Bayoil and his partners were hit with criminal charges for allegedly cutting deals with Saddam Hussein in the notorious skim operation that outflanked UN sanctions and diverted funds intended for humanitarian relief. Prosecutors were shocked — shocked! — to find such collusion and corruption in the oil business.

Of course, the fact that three U.S. presidents — the two George Bushes and their new best pal, Bill Clinton — actually brokered massive backroom oil deals for Saddam that dwarfed Bayoil’s petty chiseling, plus the fact that Saddam’s nation-strangling thievery has since been eclipsed by the epic rapine of Bush II’s Babylonian Conquest, in no way mitigates the seriousness of the Chalmers indictment. But somehow we doubt you’ll be seeing those august statesmen sharing leg irons with old Davy anytime soon.

Chalmers is a longtime denizen of the Labyrinth. In the mid-1980s, he joined up with Chilean gun-runner Carlos Cardoen, the Financial Times reported. Cardoen was a CIA frontman used by Presidents Ronald Reagan and Bush I to funnel cluster bombs and other weapons secretly to Saddam Hussein during the Iran-Iraq War. At Reagan’s direct order, Saddam received U.S. military intelligence, billions of dollars in credits and a steady supply of covert “third-country” arms to sustain his war effort, even though the White House was fully aware of Saddam’s “almost daily use” of illegal chemical weapons, The Washington Post reported. Later, Bush I, as president, would also mandate the sale of WMD material to Saddam, including anthrax — long after Saddam notoriously “gassed his own people” at Halabja.

As in the present UN scandal, Saddam paid for his covert cluster bombs with oil. Chalmers would move the actual black stuff and broker its sale for the CIA and Cardoen, taking a cut in the process. Since 1999, Chalmers has been doing the same thing on behalf of Italtech, owned by another crony in the old Cardoen gun-running scheme. The Texas baron must be aghast to find himself in hot water for an activity that was once blessed at the highest levels. Perhaps he neglected to cross the requisite Bushist palms with sufficient silver — or else, as with many a Bush minion, he’s just been tossed overboard as chum for the sharks when he’s no longer of any use.

But let’s be fair. Helping Saddam kill people with chemical gas was not the only reason why Reagan and Bush I aided their favorite dictator. They had bigger fish to fry — using the Constitution as kindling for the feast.

In 1986, George Bush I visited the Middle East with a secret message to be passed to Saddam via Egyptian President Hosni Mubarak: “Drop more bombs on Iran’s cities.” How do we know this? From the sworn testimony of Howard Teicher, the National Security Council official who accompanied Bush and wrote the official “talking points” for the trip. Ostensibly, Bush urged this mass killing of civilians as a strategy to halt Iran’s gains at the front. But as The New Yorker reported — 13 years ago — there was another layer to this covert plot.

A fierce aerial offensive by Saddam would force Iran to seek more spare parts for its U.S.-made planes and anti-aircraft weapons, inherited from the ousted Shah. Bush was already waist-deep in the Iran-Contra scam, which involved selling Tehran U.S. military goods through back channels, then funneling the secret profits to the Contras, the gang of right-wing insurgents and CIA-trained terrorists in Nicaragua. Congress had forbidden U.S. aid to the Contras, so Reagan and Bush used the mullahs (and Central American drug lords) to run their illegal terrorist war. More innocent deaths in Iran meant more backdoor cash for the Contras. A win-win situation!

When Bush I became president, he clasped Saddam even closer, sending him billions in U.S.-backed “agricultural credits” through BNL, an Italian bank tied up with BCCI — the international “financial consortium” that was actually “one of the largest criminal enterprises in history,” according to the U.S. Senate. BCCI laundered money and financed arms dealing, terrorism, smuggling and prostitution, while corrupting government officials worldwide with bribes and extortion.

As Bush well knew, Saddam was using the BNL cash for arms, not food; indeed, that was the point of the exercise. When some honest U.S. officials threatened to unravel the BNL gun-running scam, Bush appointed Cardoen’s own lawyer to a top Justice Department post — overseeing the investigation of his former boss. Under heavy White House pressure, the case was quickly whittled down to the usual “bad apple” underlings carrying out some minor fraud.

But perhaps Papa Bush was just being fatherly. Earlier, another BCCI offshoot bank had bailed out one of Bush Junior’s many business failures with $25 million in cash. That deal had been brokered by mysterious Arkansas tycoon Jackson Stephens, one of the Bush family’s biggest campaign contributors. Curiously enough, Stephens was also a top moneyman for another leading politician: Bill Clinton. When Clinton took office, he obligingly deep-sixed the continuing probes into BCCI, Iraqgate and Iran-Contra.

That’s how the system really works. All the guff about law, democracy and morality is just cornball for the yokels back home — and for the cannon fodder sent off to die in the elite’s commercial and dynastic wars. The Labyrinth — that knotted gut of blood and bile — has poisoned us all.

CHRIS FLOYD is a columnist for The Moscow Times and a regular contributor to CounterPunch. His book, Empire Burlesque: The Secret History of the Bush Regime, is available at He can be contacted at

Chris Floyd is a columnist for CounterPunch Magazine. His blog, Empire Burlesque, can be found at

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