February 17, 2010
By Ken Krayeske • 10:55 PM EST
It's political season - hide your babies. This is a still from a Foley for Senate ad. Times change, and so do candidates chasing office. h/t to Political ad guy
Ed’s Note: This is Part II of a four-part interview with Tom Foley, Republican candidate for Governor of Connecticut. After a short interlude next week in which I will write about Spring Awakenings, a musical coming to the Bushnell, I will print the third and fourth parts of the interview with Foley on March 3 and March 10, 2010.
Part I, published the week of February 1, 2010, featured some of Foley’s ideas about voter participation, being an ambassador to Ireland, and UConn’s tuition increase.
This week, Part II of the conversation heads into the other area of Foley’s past that many have expressed concern about: his participation as the Director of Private Sector Development for the Coalition Provisional Authority in Iraq from August 2003 through March 2004.
Much was written about Tom Foley and his task at the Coalition Provisional Authority in Iraq. In the fog of war, you can't always tell what is true.
The right-leaning press lauded Foley. "Characters are the backbone of any good story, and the Americans working in Iraq are the finest I have ever met," wrote Noah D. Oppenheim in "Flacks and Hacks in Baghdad: What it's like to Report from Iraq," printed in the December 15, 2003 issue of the Weekly Standard.
Oppenheim praised "People like Col. Nate Slate, a man trained his entire life to fire artillery, now doing a miraculous job rebuilding the town of Taji. People like Tom Foley, a multimillionaire financier, now walking the lines at Iraqi shoe factories, helping get an economy off the ground."
Obviously, the left-leaning press was harder on him. The socialist People's Weekly World suggested in a November 10, 2003 story that Foley invited "14 Eastern European finance officials to Baghdad to give advice about privatization."
In the story titled "As Iraq Death Toll Rises, So Do War Profits," writer Tim Wheeler, quoting the Moscow News, wrote that Foley met in Iraq with Yegor Gaidar, the acting Prime Minister of Russia for much of 1992.
Gaidar, a widely respected and criticized politician and economist, laid the foundation for the mass privatization of Russia’s planned Soviet economy. While Gaider averted a civil war, there was also much suffering during this transition to a "free market" system.
Foley has no recollection of the meeting with either Yegor Gaidar or the former Soviet Bloc officials.
"I think that is erroneous," Foley said, noting that sometimes his name is mistaken for Washington state Democrat Thomas S. Foley, the former Speaker of the House of Representatives in Congress during the first Bush administration.
"I don't remember meeting Yegor Gaidar," Foley said. "We had a lot of VIPs who came through from various places, and as a courtesy we would meet with them. That would not have been someone we would have looked to for advice.
"We wouldn't have been looking to the Russians to advise us on transition issues in a transition economy," Foley said. "It is possible, if I did meet with him, it didn't have anything to do with policy."
Foley disagreed with many of the characterizations about his job from the mainstream press. James R. Carroll of the Lousiville Courier-Journal, on February 9, 2004, wrote "Bremer: Violence to persist in Iraq: Analysts question democracy's chances."
The Bremer in the headline is L. Paul Bremer, the Kissinger apostle who George W. Bush appointed pro-consul of Iraq, and thus head of the Coalition Provisional Authority. Bremer was Foley’s boss in Iraq.
Carroll's story discussed the unemployment problem in Iraq, and how U.S. Labor Secretary Elaine Chao visit Iraq in January 2004 to "highlight her agency's efforts to aid the Iraqi Ministry of Labor and Social Affairs, which is trying to match the vast numbers of unemployed - estimates are as high as 70 percent - with thousands of new jobs."
Carroll wrote: "Among those she met was Tom Foley, who as part of Bremer's team is in charge of developing Iraq's private sector and is working with Iraqi businesses to show them how to compete for U.S. and international funds. He also is moving to help privatize Iraq's 192 state-owned enterprises."
Foley disagrees with the statement that he was there to privatize the state-owned businesses.
"The title that I had was director of private sector development. A lot of people confuse that with privatization," Foley said. "We were not in charge of privatizing state owned enterprises in Iraq."
Quoted in Carroll's story, though, Foley did not contest that characterization. Cut to Carroll: "The attraction of Iraq is 'economic opportunity,' Foley said. 'If Iraq can establish a stable government and modern economic institutions, most businessmen would want to be here and reach out to the rest of the region,' he said."
Today, six years later, Foley maintains that the mission of the CPA "was to do prepare a plan for privatization. The privatization was always going to be done by the sovereign government of Iraq."
Yet, Foley made clear that "privatization is an important part of transition from a centrally-owned state economy to a private sector." Furthermore, he said that the best model of transition economies were from "former Eastern bloc countries" in the Soviet sphere.
"A lot of criticism was there because people misunderstood what we did," Foley said. Privatization "was never our charge. We did those assessments, we did prepare a plan. We were recommending a plan, which ones should be done, how they should be done, and our mission was never to privatize."
Foley's strenuous objection to the privatization claim in February 2010 doesn't square with what New York Times reporter Steven R. Weisman wrote on January 5, 2004 in "THE STRUGGLE FOR IRAQ: NORTHERN REGION; Kurdish Region in Northern Iraq Will Get to Keep Special Status."
"Originally, for example, the United States had hoped to proceed with the privatization of state-owned businesses established by Saddam Hussein," Weisman wrote. "That hope is now gone as well, American officials concede, in part because of security dangers and possible future legal challenges to any sell-off carried out by an occupying power.
"Last summer, L. Paul Bremer III, the American administrator in Iraq, told an economic forum in Jordan that Iraq would soon start privatizing more than 40 government-owned companies making packaged foods, steel and other items. ‘Everybody knows we cannot wait until there is an elected government here to start economic reform,' he said."
But you can't believe everything you read, Foley said. For example, Irish press reported that Bono and the Edge of the rock supergroup U2 attended Foley's wedding. He said no, Bono and the Edge weren't there.
And just as those reports are wrong, so isn't this.
"I can only tell you what I know. Nobody ever told me that we were going to privatize companies, and if they had, they wouldn't have understood what that entails," Foley said.
The privatizing of state owned enterprises takes five years minimum, he said. "The Eastern Bloc countries were a good example. It takes 8 to 15 years. There was an anticipation that the state owned enterprises would be privatized, but not in the time the Coalition Provisional Authority was there. We were only there 18 months."
Much of Foley's job was merely laying foundation for a private sector economy in Iraq, he said.
"We were revising the commercial code, making strong enough contract law so that people could rely on contracts, so that we could permit foreign capital and foreign corporate ownership, which was essential," he said. "We set up a stock exchange, we would have liquidity, and you could facilitate domestic ownership."
Foley noted proudly that the stock exchange remains up and running, with ever increasing volume. "It served the purpose well that we had in mind. Just to start off. My group never had a charge or a mission to privatize state owned companies," Foley said.
Privatizing Iraq's public sector, if it was the mission, could possibly have run afoul of the Hague Convention of 1899, article 55, which holds that the occupying power operates under the principals of usufructuary and stewardship.
"The occupying State shall only be regarded as administrator and usufructuary of the public buildings, real property, forests and agricultural works belonging to the hostile State, and situated in the occupied country. It must protect the capital of these properties, and administer it according to the rules of usufruct," so sayeth the Hague Convention.
In Foley's view, none of the international law matters because it wasn't the CPA's job to privatize, despite what the New York Times or others wrote.
"It's making a mountain out of a molehill," Foley said. "It's not a big deal. The plans or intentions attributed to the CPA were erroneous."