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The Bush family owes its political good fortune to Jim Baker. He ran Bush the Elder's campaign in 1980, lifting the congressman from the mud of liberal trilateralism to be Ronald Reagan's running mate. This was no easy job, because the Reagan right perceived the older Bush as a weakass liberal with Commie sympathies. Baker served as Reagan's chief of staff and then treasury secretary; in the elder Bush's administration, he was secretary of state. Most recently, he negotiated Bush Jr.'s election in Florida. Without Baker, the Bushes wouldn't amount to a hill of beans in national politics.
At 73, Baker is at the center of a wheeling-dealing whirlwind. Baker Botts is tight with Enron, having represented it in a major pipeline merger during Enron's halcyon days. And the judge who decided not to freeze assets of Enron executives had to recuse herself a few days later from the case because she was, among other things, a former employee of Baker Botts. Baker himself cautioned prudence when it came to dealing harshly with Enron: "The proper response to Enron," he told students at the University of Michigan in an April 2002 speech, "is not to 'do something' but, like the doctor, to 'do no harm.' "
Robert W. Jordan, also from Baker Botts, is Dubya's ambassador to Saudi Arabia, where the law firm has a powerful, permanent presenceits website boasts nine main offices: Austin, Dallas, and Houston, of course, plus New York, Washington, and London, naturally, and Moscow. The two others? Baku, capital of oil-rich Azerbaijan, and Riyadh, in oil-rich Saudi Arabia. Oil's not the only thing these power brokers handle. The firm boasts of expertise in "corporate crisis" and "white-collar criminal defense"; it's currently defending the CEO of Rite Aid, who has been indicted for conspiracy and fraud.
Baker Botts is slickest when it comes to oil, but Baker himself has even wider interests. As senior counsel to the Carlyle Group, the investment firm long associated with Bush interests, Baker helps to oversee the operations of the nation's 10th-largest defense contractor, United Defense. Red Herring magazine once referred to Carlyle as "the gatekeeper between private business interests and U.S. defense spending." Baker watched the 9-11 catastrophe unfold from the Ritz Carlton Hotel in D.C. with Carlyle Group pal Frank Carlucci (Reagan's former national security adviser and secretary of defense) and members of the bin Laden family; they were all there that day for Carlyle's annual investor conference. Baker has defended the Saudi government against a trillion-dollar lawsuit brought by 9-11 families.
Nominally appointed to sort out Iraq's debt, Baker will have to convince the international community that despite the Bush first-strike doctrine, the U.S. will abide by its treaties when it comes to international commerce. He'll have to sort out the oil deals awarded by Saddam to the French and others, and organize the reserves for future exploitation by Big Oil, which eventually means some sort of accommodation with OPEC. His appointment gives Baker Botts more clout than it ever dreamed of.
Key decisions will involve getting the pipelines from Iraq's oil fields to Turkish ports up and running and deciding whether to give Israel oil through yet another pipeline. None of this can happen without some sort of Iraqi government that has international legitimacy.
As for the debt itself, said to total anywhere from $128 billion to $200 billion (and sure to generate substantial fees for the companies he picks to handle the detail work), Baker ought to be pretty knowledgeable. As secretary of state under Papa Bush, he was a key factor in making Iraq's debt larger with a $5 billion loan from the U.S. Agriculture Department's Commodity Credit Corporation to help Saddam keep his weaponry up-to-date.
Additional reporting: Ashley Glacel