Former private intelligence agent turned whistleblower, Marc Eichinger recently published a book where he exposes several cases of corruption between France and Iraq involving Turkish and Iraqi Kurdish politicians as well as French companies in the funding of terrorism as they engaged in oil trade with ISIS in the last decade. In an exclusive interview to The Red Line, he agreed to shed some light on some issues he exposed in his book.
TRL: You just published a book making a link between corruption, France and terrorism. Can you talk to us about this subject with an Iraqi perspective?
ME: What I realized through my investigation, is that ISIS would never have such power and capacities both in Iraq and Syria without a stable source of funding offering regular and massive cash flows. The only source that could provide such income was oil. In a war zone, there are generally two possible categories of massive income: drugs and oil. Oil provided sufficient and recurring incomes for ISIS. The issue with war economics is not to fund isolated actions, but to have constant income to pay the fighters salaries – and ISIS fighters were well paid – as well as to ensure weapons and ammunition supplies. Wars are extremely costly and they needed all of that. Oil was their unique source that had this potential. All the rest – antiquity smuggling, ransoms etc… – is insignificant compared to oil profits.
The Iraqi army collapsed in Sunni areas because there was a lack of motivation by the soldiers who were not paid regularly. The terrorists, on the other hand, were determined and trained (many were former baathist cadres). The rise of ISIS took years. It did not happen suddenly. Its chore was not made of foreigners, it was a local network. All this mess came out of the absurd decision by Paul Bremer to ban former Baathists for government jobs when he became governor of Iraq. The whole army and government fell at that point. Many of these men formed the chore of the ISIS organization. Since corruption could only fuel discontent, people found the impetus to start fighting for dubious principles. More than 40% of Mosul’s population collaborated with ISIS, because for them it was better than the suffering and injustice they endured previously. They didn’t realize what the outcome would be. The most radical aspects of ISIS’s ideology on the ground came from foreigners. This was not expected. But ISIS could not maintain itself without a string of actors that ensured the exportation of its oil production.
An Italian investigation made by two prosecutors exposed 52 illegal shipments that were approved amongst others that haven’t been certified due to lack of evidence. Among the actors involved in this trade is the French logistics company Rubis. These shipments have an estimated value of 1.2 billion euros. And this is just the tip of the iceberg; there is much more. This income funded ISIS’s operation. They managed to have a relatively stable production with little means as they were not oil experts. But they recruited engineers for that. They also benefited from pre existing infrastructures. They loaded their oil on trucks, which doesn’t have a huge capacity. Initially they sold the oil at 30% of its worth. Several intermediaries made a percentage on those transactions. Oil came both from Iraq (Nineveh plain mostly) and East Syria’s oil fields. I have confirmed with multiple sources that key members of the ruling families of Iraqi Kurdistan (KRG), the Talabanis and Barzanis were among those intermediaries. They have therefore betrayed their population, as they have always done. Cash is king.
TRL: There were also collaborators involved in the oil smuggling within the Arab communities in Iraq, weren’t there?
ME: According to the data I obtained from my source which is absolutely reliable, all the actors involved in the exportation business of ISIS’s oil through Turkey were Iraqi kurds. This network was established with Turkish and Kurdish authorities altogether. They have this habit of bypassing Baghdad in their transactions. It’s been their way of doing since Saddam’s downfall in 2003. The oil transited in Turkey’s southern parts all the way to Dörtyol, a shipping terminal in Hatay’s province. From Dörtyol, it was shipped to Sardinia in Italy and also a lot to Israel. France’s logistics company Ruby controlled one of the terminal in Dörtyol. Together with Berat Albayrak’s (Turkey’s president Recep Tayyip Erdogan’s son in law’s) business consortium, Ruby invested in the terminal in 2012 – with an involvement of the French bank BNP Paribas. All was perfectly planned. It is clear that every intelligence agency could see it, firstly because Mehmet Abbab, who was involved in Ruby’s installation in Turkey, was already collaborating with the CIA since Saddam’s downfall.
TRL: What about France in all of this?
ME: The French authorities and intelligence services were perfectly aware of the situation. France had also been warned by the EU ambassador to Iraq at that time that ISIS oil was transiting through that network. Clearly, no one could ignore it, just like the Mossad that has had a branch in Erbil for decades. I explain in my book the links between Israel and the Barzanis. That’s why the oil ended up in Israel after. No one could ignore it. In 2012, Israel had an energy deficit, it was important for them to acquire oil quickly to produce its electricity. And this opportunity was a bargain because it was sold at a ridiculous price. So they took it, without asking any questions.
TRL: Did the Turkish State benefit from this oil transit? Or was it only profitable for the few powerful businessmen close to Erdogan?
ME: In any case, Turkey’s State assets are blended with Erdogan’s family, so there’s no problem for them on this level.
TRL: Could we talk about the development of Iraq’s oil industry between 2003 and the rise of ISIS?
ME: What we have to keep in mind is that the real objective of the US intervention in Iraq was to make sure that oil service contracts became oil sharing contracts. There is a fundamental difference between them that is crucial to understand. A service contract delivered by a country is a deal allowing a company like Total, BP or Shell to conduct the oil extraction. They get paid per barrel production, but they do not own the oil reserves in the ground. It’s pure service. A sharing contract allows a company to share the value of the ground reserves; it includes in its balance sheet assets the proven reserves on the field they exploit. It adds much more value to the company: with the benefits of production and with the proven reserves in the ground.
So the idea was to oust Saddam and transform these contracts, just like they tried to do in Iran at Mossadegh’s time. But in Iraq, it didn’t work as planned because Iraq has a strong and old experience in oil economics. Paul Bremer first made an attempt to change this system and only succeeded with the Kurds (the Kurds had no petroleum engineering culture at all, they knew nothing about sharing and service contracts ; You would pay them and they would sign anything. There was a huge amount of corruption between the Bremer administration, local Kurdish chieftains and oil extraction companies. A company could just get listed in the stock market in London even if it was an empty shell, and it would come to KRG and sign highly profitable contracts. That’s how it happened. I personally saw the oil companies’ reports that were supposed to make seismic surveys, and they were all fake. We announced billions of barrels but it was all a scam. The reports announcing billions of oil reserves were made in Kurdistan even before trucks had arrived to make waves in the ground for their surveys. It made no sense. No one would double check on these fake companies. You could list anything anywhere (here is the magic of the British and Canadian in Toronto stock exchange markets: you can pretend anything you want, no one is going to ask questions.
TRL: In this context, many French companies came to Iraq; did they accomplish an honest job?
ME: There are two types of stories: those who went to work in the Federal parts of Iraq, and got embroiled in corruption (and it was the time when Boris Boillon was the French ambassador to Iraq, which didn’t help. Boillon would use exclusive information to help French companies navigate through Iraq’s economics), and others that tried to make business in the Kurdish parts and got embroiled in other affairs.
During Saddam times, Kurds were forbidden to engage in any oil-related business. But it was assumed that there were a few oil deposits in the North, around Duhok, among other places. There was also the oil field at the Iranian border that was known but not exploited. So the potential of KRG was known. A lot of ambitious and unscrupulous companies rushed to Kurdistan after the downfall of Saddam and started making exuberant promises. The dream turned into a nightmare throughout the years, but it still allowed for the KRG to become wealthier in a decade while it depended almost solely on agriculture and smuggling before that. Kurds have always been smugglers, they just changed commodities. Before Saddam, Erbil was a little town with no airport. Now it’s a vibrant city. Everything belongs to the Barzanis but at least it exists.
TRL: Regarding the oil management after the fall of Saddam, would you say that the reforms put in place have allowed the Iraqi authorities to keep a rather fair share of the benefits from the oil production in the country?
ME: in a sense, it’s true, but we have to keep in mind that after the fall of the baathist regime, the majority of Sunni government employees that were in charge of the oil sector fled the country, to Jordan. They actually left with the oil Ministry’s archives. It was then possible to buy the oil Ministry’s archives in some cafés of Amman. So suddenly in Iraq, the government was left with mostly pro-Iranian Shia employees. These employees were not interested at all to favor the Americans. They tolerated the US’s general Petraus’s Surge (the US escalation against pockets of resistance in Sunni parts of Iraq; the Surge was sanctioned by Iranian general Qassem Solemani at that time). After this, Americans lost power because Shias are majoritarian and Iraqis have experience with oil production and management. How could the Americans justify sending them consultants… Iraq is a founding member of the powerful Organization of the Petroleum Exporting Countries (OPEC), which was created in 1960 in Baghdad. Iraqis saw what was coming from miles away. There were indeed auctions for extraction licenses. I believe these auctions were fair. Most companies that inherited these licenses were competent. A way to know if auctions are scams is when the company that gets a contract has no expertise in oil exploration. It was not the case here. On the main oil fields, the companies were skilled. This was not the case in the Kurdish parts of Iraq where things were out of control.
The tragedy is that the income from oil production is embezzled by powerful families… The Al-Hakim family for example. They directly stole the funds from the government’s Central Bank. They don’t make any difference between their personal deposits and the State’s. They usually pump the cash out in dollar bills and export it out the country. In one of the operations I monitored, we tracked a convoy of 500 million dollars headed to Geneva. I had infiltrated the money laundering business. It was the Al Hakim family involved in this case. The money was supposed to be shipped out of Basrah, then go to Italy before getting to Geneva. They finally changed the destination to Beirut. For me it was impossible to go there because of the Hezbollah movement which I have issues with and that has a very efficient intelligence network. I had to give up the monitoring, but I know that the money went through the Turkish border in the KRG parts where there is so much smuggling going on. Once I saw coffins filled with cash passing through there.
It’s important to keep in mind the mass this money represents. Fifty million US dollars is 650 liters of hundred dollar bills for half a ton. There was ten times this amount in this operation. The plan for Al Hakim and its accomplices was to buy apartments from Christians in Beirut and to kick the Christians out from the city center. Their agents on the ground in Lebanon would go from door to door and force the owners to sell their houses. It was a plot to expand the real estate control of Shia actors in Lebanon. Ammar al Hakim was directly involved in this process.
The Al Hakims are one of the most powerful families in Iraq. They had a private army of several thousands. He was one of the pillars on which Iran was relying to serve its interests in Iraq.
TRL: Have things changed since then?
ME: What changed is that Qassem Solemani was killed. The relationship to Iran is not the same anymore. He was a brilliant mind, an excellent strategist, at an international level. But he had blood in his eyes, truly fanatic about the principles of the Islamic revolution. He had long term plans. He even got close to Palestinians to confront Israel. It’s thanks to him that some Palestinian movements were able to improve the rocket capacities. They used to make rockets from scratch but then, the Hezbollah upgraded their technologies and supplies. He started creating bridges with Sunni movements to combine forces against Iran’s enemies. His death was a big blow to this project. Now the iranian leadership isn’t as competent.
In Syria, the government has loosen its ties to Iran. Syria is providing electricity to Lebanon and flooding the Middle East with drugs. Iran finds itself relatively isolated in its fight against Israel because Tel Aviv signed the Abraham Accords with many countries in the region. Other States are tired of the perpetual war with Israel which they always lose. Normalization is the new trend. The Iranian nuclear deal has not been reached yet. The Ukrainian conflict is having an impact on negotiations as fears of a global conflict have never been so high and nuclear powers are reluctant to risk proliferation of mass destruction weapons at this stage.
TRL: On an economic level, is it in Iraq’s interest to maintain its rentier economy model where oil is the main source of income for the State?
ME: No. Oil is a curse. It’s like putting a bunch of grapes over someone’s mouth and letting the grapes fall down little by little. Money is wasted, very unproductive. It’s incredible. We spent trillions to rebuild Iraq. When I left the country, nothing was still standing from it. It’s deplorable to see that there still are no trains, no production infrastructures etc…
TRL: Seeing how corrupt and predatory the business is run in the country, is it possible to imagine that Iraq will be able to diversify its economy in the future?
ME: In order to reach a satisfactory market economy, you need to break the tribal system. You can’t do anything in Iraq without tribal approval, the government is not in charge of crucial decisions on the ground. Tribes are. Any businessman or scientist willing to build something in Iraq is bound to tribal leaders’ decisions. If every time you have to use a road, you need to pay the tribe of the area, it’s problematic. There’s no solution but to break this system. Mosul’s reconstruction is doomed because everyone wants to profit from the process . And when it’s time to rebuild, the plate is empty because every actor on the ground took a piece of the meal. The money isn’t being delivered to rebuild Mosul because it’s obvious it is not going to be used to reconstruct the city, but to enrich a few figures instead.
It’s important to keep in mind how difficult it is for an industrial businessman to work in Iraq. I remember this affair from 2011 or 2012: a foreign Turkish investor came to Iraq to propose the reconstruction of leisure facilities in the cities. He was introduced to someone he thought was the mayor of Baghdad. He got stamped documents, paid a backshish and all. But when the time came to start the project, he realized everything was fake. This is Iraq. Getting a fake passport is very easy. Even today, I can acquire fake documents for any administrative purpose for very little money.
TRL: Do you see that the Tishreen movement that stemmed from the 2019 uprisings will pave the way for a change in Iraq’s political nature?
ME: Let’s hope it does. But we have to keep in mind that Baghdad is not Iraq. The society remains highly tribal and outside of the capital the people don’t care what is going on. We see that there is more and more rejection of Iran in Iraq’s society. Ties with Tehran have loosened a bit, due in part to Iran’s weaknesses. Iraqis want to breathe more. But Iran won’t let go that easily. Strategically, the Islamic republic can’t let go. The Shia axis is too small for them to lose this bastion. It’s a survival issue. Shias are roughly 300 millions facing 1,3 billion Sunnis, if we look at it this way.
TRL: What is your take on the Oil v/s salary issue between the KRG and Baghdad?
ME: It should have been implemented since 2005. It still hasn’t been implemented. Barzanis, who are smugglers in nature, don’t accept the central government. They see it as weak and don’t make any concessions. They’ll continue to do this because they can, with the support of the Turkish government. Every time we ask the USA why they are still supporting these two families that do nothing but loot and empoverish their population at the expense of international investments in their region (which boosts insecurity because people get tired of this situation and terrorist groups know perfetly well how to exploit desperate people), they reply that they continue because they provide strategic services. Most operations against Iran are launched from the KRG. It would be very easy to put pressure on the Barzanis. they already have billions, why do they always need more? There are pictures of some of the Barzani heirs in prostitution houses in Geneva circulating… It’s sickening. These people don’t invest in their country unless it serves their personal interest. There’s no job creation. Poverty is widespread. There has been some improvement with what it was before, but the KRG should be as rich as Dubai or Switzerland today. I also believe that it’s a mistake for Israel to keep supporting the Barzanis. We often hear that Iraqi Kurdistan is “little Israel ”. But for Israel, it’s a highly strategic hub, at the crossroads between Iran, Turkey, Syria and the rest of Iraq. But it’s not a reliable ally. To be allied with the Barzanis is to be sure that one day you’ll be betrayed. I’ve never seen a partner, either political or economical, not get betrayed by the Barzanis at one point or another. Whenever an investor is in Erbil to make prospects, he can be sure that his translators are agents working for the Barzanis. You can’t invest and be sure you’ll make profits in these conditions. I saw people get ripped off in an instant there. There’s no independent judicial system in the KRG. When it’s time to invest you are received like a king. When the money’s there, it’s over.
TRL: Today, is the Ceyhan pipeline between KRG and Turkey controlled by the Kurdish rulers?
Yes, they are in charge. It exports the oil produced in the KRG. There’s a bit of oil going through it from the Kirkuk area, which is now a federal zone albeit disputed. I remember Kirkuk, where I worked. It was chaos. The hospital was empty. Everyone came to drop dying people. there wasn’t even any aspirin. For me it was insane that we couldn’t ask the parties involved in the violence to come to a ceasefire in order to dispatch medicine to it. Everything was hijacked by them.
In 2014, when ISIS got stronger in the disputed territories, the Krudish forces took advantage of it as the Central government’s army withdrew. The KRG leaders then took control of many oil fields and increased their income. This made all agreement between Baghdad and Erbil impossible. What incentive do the Kurdish rulers have to negotiate with the central government?
TRL: As you mention in your book, there is a case of a French company that funded terrorism by providing logistics to ship ISIS’s oil. What do you expect on a legal level regarding this?
ME: I wish we’d stop treating the victims of terrorist attacks like idiots and admit what really happened. This is a fundamental aspect of my book: showing the development steps between the conflicts in Libya, Syria etc…all the way to this case. The surge in terrorism these last years did not erupt as it was pretended. Truth must be said and those responsible in France, including Minister of Foreign Affair Jean-Yves le Drian, must be made accountable. I don’t believe he’ll ever face a judge; even if he goes in front of the French Republic’s court of justice, it won’t have any impact, but at least we’ll have shed some light on the lies that were told. Eventually, Rubis will have to pay for the damage that was caused. Will individuals go to prison for these actions? I don’t believe so. Unfortunately.