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To: Les H who wrote (61380)	1/24/2001 6:31:16 PM
From: Box-By-The-Riviera™	Respond to of 436258

bush getting tested between a rock and a oil man's place Iraq's Oil Smuggling Into Syria Poses Quick Challenge for Bush By NEIL KING JR. Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- President Bush may have to decide sooner than he would like whether he wants to get tough with Saddam Hussein. Presenting a major challenge to the new president, the Iraqi leader is now pumping as much as $2 million a day in oil through a recently reopened pipeline to Syria in violation of United Nations sanctions. The smuggling, well known within the oil industry but denied publicly by the Clinton administration, deeply undermines the decade-old sanctions meant to keep Iraq from profiting from its vast oil reserves. The Syria pipeline opens a fourth smuggling route for Iraq, along with Turkey, Jordan and the Persian Gulf, and could boost the government's direct oil revenue to well over $2 billion a year, according to U.S. officials and U.N. diplomats involved in Iraqi issues. Despite ample evidence that the pipeline is back in use after being shut down for more than a decade, State Department spokesman Richard Boucher Tuesday said he couldn't confirm that. Mr. Boucher said Syrian officials have told the U.S. that they didn't intend to violate U.N. sanctions, and that they had yet to reach an import agreement with Baghdad. In a report released last week, the International Energy Agency said that Iraq began to pump oil through the Syria pipeline on Nov. 20 and that the flow averaged about 140,000 barrels a day in December. The IEA said the exports appeared to subside this month, but both U.N. and U.S. officials say the illicit pumping continues. "The pipeline is truly up and running," said one U.S. official, who insisted that the evidence of Iraqi-Syrian collusion had become convincing only in recent weeks. Secretary of State Colin Powell, who took office three days ago, has promised to re-energize the sanctions against Iraq, but how the new administration plans to deal with a resurgent Saddam Hussein remains far from clear. Bush administration officials said yesterday they were still assessing whether Iraq was indeed pumping oil to Syria, though others within the government confirmed a report in the Los Angeles Times that the exports now amounted to about 140,000 barrels a day. Experts said the new smuggling route is Iraq's most blatant slap at the sanctions regime to date. Attempts to tighten sanctions against Iraq won't be easy. Support at the U.N. for further punishing Saddam Hussein has largely crumbled, while Iraq's neighbors have begun to treat Baghdad with a friendliness unseen for more than a decade. Iraq signed a free-trade pact with Egypt last week and is expected to do the same with Syria in coming days. After a nearly a decade-long ban on international flights, countries around the world are allowing regular flights into Baghdad. Iraq sold more than two million barrels a day through the U.N. oil-for-food program for most of last year, with none of the revenue going directly to the Iraqi government. Since last month, the official volume in that program has plunged to less than half that, according to U.N. oil overseers. The swelling illicit trade presents Saddam Hussein and his inner circle with huge infusions of cash, which can then be used to rebuild Iraq's military. The smuggling trade also undercuts the longstanding U.S. argument that sanctions are strong as long as the government doesn't control the oil money.