Making War In Libya... For Goldman Sachs And J.P. Morgan?

An overwhelming majority of Americans don't like our involvement in the bombing campaign against Libya but whether you think that what looks like the congressional wrist slap goes far enough, the resolution Webb and Corker are proposing on that war, it certainly guarantees that there will be a debate on U.S. policies there and-- at least in theory-- if Obama can't make an argument on the merits (and so far he hasn't been able to), then Congress will be bound to restrain the executive branch over reach. That would be a first in many decades. This is the press release that went out with S.J.Res, 18 this week:

Senators Jim Webb (D-VA) and Bob Corker (R-TN) today introduced a joint resolution requiring the Administration to provide a detailed justification of U.S. operations in Libya and prohibiting the deployment of U.S. troops on the ground there. It further calls on the President to request authorization for the continuation of U.S. involvement in NATO activities and states that Congress should fully debate such a request expediently. Nearly 90 days after the initiation of force in Libya, such debate has not occurred.

The bipartisan resolution states, “The President has failed to provide Congress with a compelling rationale based upon United States national security interests for current United States military activities regarding Libya.” It calls for an unclassified report to provide essential information to Congress and the American public to evaluate U.S. involvement in Libya and appropriately debate it.

“When we examine the conditions under which the President ordered our military into action in Libya, we are faced with the prospect of a very troubling historical precedent that has the potential to haunt us for decades,” said Senator Webb. “The issue for us to consider is whether a President-- any President-- can unilaterally begin, and continue, a military campaign for reasons that he alone defines as meeting the demanding standards worthy of risking American lives and expending billions of dollars of our taxpayers’ money. It is important for Congress to step in and clearly define the boundaries of our involvement.”

“It has now been more than 80 days since the United States first launched military action in Libya in what was supposed to be only a very limited operation, but neither the Congress nor the American people have any clearer view of the administration’s stated mission or end game for our military involvement in Libya. Having been denied answers, repeatedly, to these fundamental questions or even a comprehensive debate to consider the merits of U.S. involvement in such an engagement, it’s long past time to set a final deadline to get the information every man and woman who puts on a uniform and every taxpayer who funds the operation deserves,” Senator Corker said.

The joint resolution, which would have the force of law, requires the Administration to publicly answer a detailed series of questions about the Libya operation within 14 days of enactment. Parts of the resolution mirror bills passed in the House of Representatives.

Someplace Webb and Corker don't have the imaginations or the will to go is to ask what the hell we're doing bombing the hell out of this small country in the first place. Why Libya instead of, say, Syria or Bahrain, each of which is doing far worse to its citizens, the ostensible "reason" we're involved with this massive attack on Libya? In a pair of powerful investigative articles that would do far more credit to the Senate than the toothless joint resolution, journalist Russ Baker posits that evidence makes it clear that Qaddafi has been set up and that the U.S. in part of a plan to create an “Arab Spring” for the Good Old Boys-- CIA, banks, oil companies. Hopefully, you've been following Matt Taibbi's exciting reporting on the relationship between Qaddafi and the bandits at Goldman Sachs.

Libya was eager to join the big leagues of finance, and its investors were “awed” by an Arabic-speaking Goldman executive who urged them into an options deal that bet on the fortunes of companies including Citigroup Inc. C +0.23% , Allianz DE:ALV -1.33% and Italy’s UniCredit IT:UCG +2.08%.

The LIA, Libya’s sovereign wealth fund, was charmed by the demonstration and decided to go all-in with a $1.5 billion bet. Goldman very quickly lost them 98 percent of that money.

I never knew it was even possible to lose 98 percent of an investment that quickly. If you sent a blind, three-legged donkey into Caesar’s palace with $1.5 billion in chips, it could probably stay solvent longer than this options package Goldman sold to Qaddafi.

How could the Libyans be enticed to take such a crappy deal? See if this sounds familiar: according to the Wall Street Journal, the Libyan fund manager felt that Goldman had "misrepresented" the fantastic investment opportunity Goldman sold to them, and also made trades "without proper authorization."

...Having managed to get their bankers out of Libya with their heads still attached to their shoulders, Goldman decided to make up for losing $1.5 billion of Qaddafi’s money by offering the international pariah a $3.7 billion equity stake that would have made him one of the largest single owners of the bank.

In con-man parlance, this is called the reload. You beat someone in a Ponzi scheme for his life’s savings, and when he shows up at your door with an axe, you get him to mortgage his house to buy a stake in the Brooklyn Bridge. After blowing $1.5 billion of Libya’s money almost instantaneously, Goldman’s solution to the problem was to immediately get Qaddafi reaching back into his pocket for a cash sum over twice the size of the original losses. It’s really hard not to admire the sheer balls of the whole deal.

Baker starts by asking if there is any actual evidence that the claims by Qaddafi’s defecting Justice Minister, Mustafa Mohamed Abud Al Jeleil, that Qaddafi was the culprit behind the bombing of Pan Am 103 are true. "This story," he points out, "made it into major news media throughout the world, without anyone stopping to raise questions about the propaganda benefit of the statement, or of the timing." And though no one has seen any of the promised "evidence," the original headlines did the trick-- anyone watching television or reading stories then would have been led to believe that Qaddafi was behind the Lockerbie tragedy. That's when Obama called on Qaddafi to step down and started down the road to the "humanitarian" attacks on Tripoli.

By December 2010, when a Tunisian man set himself on fire, the Arab Spring revolt was under way—in Egypt, Bahrain, and elsewhere. Pretty quickly, it was clear to everyone that the Western powers were in danger of losing crucial oil suppliers—and vital military bases.
It certainly was convenient that, right about that time, Libya showed signs of moving in the opposite direction-- into the US camp. Read our piece here about the CIA ties to the Libyan uprising.

Then consider the timing of February’s ramped-up claim by the defecting Libyan official, that Qaddafi himself had ordered the Lockerbie bombing.

If that wasn’t enough in the propaganda department to get the global public worked up, next came the Libya rape story. The average person doesn’t have the time or appetite to follow the kinds of complex corporate maneuverings that fascinate us here, but they do understandably get upset about bombs on civilian aircraft and rape.

...We noted the timing of the story, the alacrity with which the Western press grabbed it and spread it, and the simple fact that there’s no evidence tying Qaddafi in any way to any such act. Even the woman herself doesn’t claim that.  Yet it infuriated untold millions and postings all over the Web show that it moved a lot of public opinion into the column supporting military action to remove the Libyan leader.

That the corporate media cannot see what is going on here, or refuses to see, tells us how far we have not come since the Gulf of Tonkin Resolution.

Still, we can hear the other shoe dropping if we listen carefully enough. For example, the website Politico ran a little item the other day on a powwow between Hillary Clinton and corporate executives over business opportunities in Iraq.

FIRST LOOK: WALL STREET IN IRAQ? – Secretary of State Hillary Clinton and Deputy Secretary Tom Nides (formerly chief administrative officer at Morgan Stanley) will host a group of corporate executives at State this morning as part of the Iraq Business Roundtable. Corporate executives from approximately 30 major U.S. companies-- including financial firms Citigroup, JPMorganChase and Goldman Sachs-- will join U.S. and Iraqi officials to discuss economic opportunities in the new Iraq. Full list of corporate participants.

Give it a couple of years, and they’ll be having the same party celebrating a more sympathetic regime in Libya.