Conflicts Of Interest In Syria Reveal A Dark World Of War Profiteering

Syria's Assad sells weapons to rebels fighting his regime, and other bizarre facts about war profiteering.
By @FrederickReese |
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    Last week, a prominent Syria expert — cited and hailed by Sen. John McCain (R-Ariz.) and Secretary of State John Kerry for her compelling argument for American intervention in the Syrian civil war — was fired from her position at the Institute for the Study of War, a nonpartisan Washington-based think tank. Elizabeth O’Bagy was fired for stating that she received her Ph.D from Georgetown University, when, according to her own statement, she completed the degree requirements, but has yet to actually be conferred with the doctorate.

    In an op-ed in the Wall Street Journal, O’Bagy argued that the Syrian conflict is not being fought by extremists. “Contrary to many media accounts, the war in Syria is not being waged entirely, or even predominantly, by dangerous Islamists and al Qaeda die-hards,” O’Bagy argued. “The jihadists pouring into Syria from countries like Iraq and Lebanon are not flocking to the front lines. Instead they are concentrating their efforts on consolidating control in the northern, rebel-held areas of the country.”

    The problem, however, with O’Bagy’s argument is that it may have been a paid endorsement. A Sept. 5 article with the Daily Caller cited O’Bagy as being political director for the Syria Emergency Task Force, a Washington-based lobbying group that supports the rebels. O’Bagy told the Daily Caller that, while not a salaried employee, she did serve the group as a paid contractor.

    This possible conflict of interest was not disclosed until the Huffington Post questioned the Wall Street Journal about the bias of O’Bagy’s piece.

    While small conflicts of interest such as the O’Bagy situation merely threaten the reputation of a few, larger conflicts of interest threaten to color and distort entire political conversations. Allegations of possible war profiteering, or the supporting or intentional proliferating of armed conflict for the reason of profiting from it, have negatively affected possible public support for intervention in Syria.

    Revelations of how government contracts were doled out during the wars in Afghanistan and Iraq have forced many to ask cui bono — who does this benefit? — in regard to the nation’s defensive agenda. Particularly, that just ten contractors received 52 percent of the at least $138 billion in procurement funds, as reported in the Financial Times, with one contractor, KBR, Inc., a spin-off of Halliburton Co., receiving $39.5 billion, has raised the ire of many.


    Cui bono?

    Take, for example, Raytheon. As President Obama ratcheted up his speech on a “limited military response” to the Syrian regime’s alleged use of chemical weapons, a strange correlation was taking place on Wall Street — Raytheon’s stock price went up, reaching a 52-week high during the White House’s buildup for intervention.

    The reason for that is simple: Raytheon, a defense contractor, makes the Tomahawk cruise missile system, which likely would have been the backbone of an American bombardment campaign. Typically, the Defense Department maintains a “minimum sustaining rate” of 196 Tomahawk missiles per year. However, after the 2011 Libyan intervention, the Navy was required to order the production of additional Tomahawks to replenish the Defense Department’s reserves, with 252 missiles ordered for this fiscal year and 361 ordered last year. At about $1 million apiece, a Syrian intervention would have radically affected the government’s yearly procurement rate.

    “There’s a number that has to be available,” said one defense lobbyist. “If they fall below that number, they’ll replace them.”

    This situation is compounded by the fact that the cost per Tomahawk is increasing. As reported by Politico, for fiscal year 2013, the White House requested 196 Tomahawks at a total of $320 million. For 2014, the White House has requested the same number of missiles, at an increased price of $325 million. The price hike is cited to a shrinking supply chain.

    In a time of shrinking defense budgets, this need to maintain the nation’s offensive capability represents a challenge for lawmakers — and a lifeline to contractors who are forced to deal with fewer procurement contracts. “It’s not like there are huge stockpiles of Tomahawks lying around in a warehouse somewhere,” said a congressional defense source, who asked Politico not to be identified. “We have one hot production line that operates at a steady, but modest, capacity out in Arizona. When we use 50, 100, 150 of these it can create near-to-medium-term shortfalls that may cascade and affect our conventional strike capacity in other theaters.”

    Raytheon was not the only defense contractor who saw stock price rises during the buildup for a potential strike. Boeing, General Dynamics and Lockheed Martin — all missile system manufacturers — all saw sharp gains during the president’s posturing toward intervention.

    Once an apparent U.S.-Russian deal to pressure Syria into ceding its chemical weapons took root, however, Raytheon’s stock dropped. As tensions remain high and uncertainty remains the theme in Washington, Raytheon’s stock values are remaining at about 50 percent above where they were in March.


    A self-perpetuating war

    The true insidiousness of war profiteering, however, is seen in Syria itself. Under the weight of the European Union’s imposed sanctions on Syrian oil and gas sector, Syria has became a black market, with basic essentials, such as heating gas, selling at as much as 34 times its pre-war price. This is actually emboldening and strengthening the ruling class in Syria, as the middle and lower classes must pay ever-increasing markups to get the things they need to survive.

    In other words, the more the Western world sanctions Syria, the less money is actually entering Syria. As Syria refines very little of its own oil and gas products, this causes a scarcity in diesel and heating gas. As a result, the regime of Syrian President Bashar al-Assad hordes these items to support the army, while the masses must deal with Assad-collaborating black marketers. This is creating a class of the “super-rich” in Syrian society, as reported by Der Spiegel.

    One of the more fascinating examples of war profiteering, however, involves the question of prisoners of the rebel group the Free Syrian Army. “We have caught many army prisoners,” said Hamza Fatahallah, a Syrian Army defector who now serves in the FSA, to GlobalPost. “We send them back home for a small amount of money on the condition they do not return to the regime. We use the money to buy weapons.”

    Fatahallah estimates that 40 percent of his village’s weaponry comes from the Assad regime via prisoner exchanges. Another 50 percent is taken on the battlefield, with the final 10 percent being donated or smuggled from outside the country. Fatahallah indicated that he once traded a prisoner directly for two Kalashnikov rifles from the Assad regime.

    While the trading of hostages for weapons is nothing new — the Reagan administration infamously did this with Iran during the 1980s — the notion of two directly opposing sides involved in such a trade is unique. “These officers sell to us not because they love the revolution but because they love money,” said Ahmed al-Sheikh, the leader of the Syrian opposition in Jabal al-Zawiya, of his chain of suppliers. “Their loyalty is to their pockets only, not the regime.”

    While this is far from a smooth process — often, the traded weaponry is boobytrapped, and typically, the trade consists of stolen weapons — the notion of the regime offering weapons to the rebellion fuels the idea of a rebellion that is spurred, at least in part, by greed and corruption.


    Burning down the world

    As the war in Syria grinds on, the question of who benefits most from it becomes a real and prudent one. Saudi Arabia’s leadership would love nothing more than to draw Iran into a fight with the U.S. and Israel. Removal of the Iranian regime would give Saudi Arabia a freer hand in directing the course of the region, with Israel as the last remaining stumbling block. Qatar would like to see the Assad regime removed, as it has blocked a proposed pipeline that would go through Syria to Europe. To these ends, Qatar reportedly has funneled billions of dollars to the the rebels while Saudi Arabia has reportedly done the same with guns through Jordan.

    As Assad said to the Russian newspaper Izvestia,

    “Of course it is well known that countries, such as Saudi Arabia, who hold the purse strings can shape and manipulate them to suit their own interests. Ideologically, these countries mobilize them through direct or indirect means as extremist tools. If they declare that Muslims must pursue Jihad in Syria, thousands of fighters will respond. Financially, those who finance and arm such groups can instruct them to carry out acts of terrorism and spread anarchy. The influence over them is synergized when a country such as Saudi Arabia directs them through both the Wahhabi ideology and their financial means.”

    There are those who will always try to ‘game the system’ towards their own ends. While the morality of this is suspect, it is clear that in order for society to stay at peace, it must take a stand against those that would let the world burn for profit.


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    • Franny De

      What are they complaining about her records for..Obama doesn’t even have a shred of evidence to prove who he is. No birth certificate, no college records, no nothing. Except that he had many gay relationships in church, and smoked pot and did drugs..oh we have that evidence!

    • nofearorfavor

      Yes wars make the rich, richer and the poor bears the brunt. What as sick, sick degenerated world we live in. Assad is not corrupt however, he is waging a war against an insidious enemy who are paid to destroy Syria. So the headline, although it grabs the attention is not only misleading, but aims to damage Assad’s image even further, which is completely out of context. Journalism with integrity please!!! Yes, it is real that some of his army members could be selling weapons on the black market, but then they have families to support. Can’t understand though, why the Syrian woman in the pic, had not moved with her family to a safer place, as surely they must have been warned that the army would be initiating strikes in their area? War is just hideous, who mourns with this woman, who feels the loss of her loved ones as much as any of the filthy rich do. However, God is watching and will not be mocked… no matter by what name we refer to Him, he is the One God, who is pure LOVE… teaching us to “love thy neighbor, as thyself.”

    • popsiq

      O’Bagy has now admitted she wasn’t in the Georgetown doctorate program at all. She still however, “Stands behind her work on Syria.”

    • rws450

      Good article but the subtitle is misleading and not true. It’s not “Syria’s Assad” selling weapons to rebels; it is some corrupt officers, probably a small number. Even then, some of the weapons are booby-trapped.