Laura Rozen has a great new investigative piece at Mother Jones about the very lucrative business and security activities undertaken in post-2003 Kurdistan by former Israeli Mossad head “Danny” Yatom and his Israeli-US dual-national associate Shlomi Michaels.
HT: Wired’s “Danger Room”.
Rozen describes Michaels thus,
- He was a former commando with Israel’s elite internal counterterrorism force, the Yamam; he had since become one of the middlemen who work the seams between the worlds of security, intelligence, and international business, along with a few more colorful sidelines including a private investigations/security business in Beverly Hills.. [H]is business partner was former Mossad head Danny Yatom. Before arriving in Washington, Michaels, a dual Israel-US citizen, ran a string of businesses in Beverly Hills… After 9/11 he left Los Angeles, alighting first in New York (where he taught counterterrorism for a semester at Columbia University) and then in DC, where he would soon launch a lucrative venture to cash in on the Iraq War and its aftermath.
Here were some of his activities:
- He helped introduce information in Washington that the United Nations’ Iraq oil-for-food scheme was riddled with corruption—a matter that became a key GOP talking point for promoting the war. Later Michaels helped the Kurds find Washington lobbyists (Rogers’ BGR) who would make the case that Kurdistan was owed some $4 billion in oil-for-food back payments. In June 2004, during his last days in Iraq, US Iraq proconsul Paul Bremer sent three US military helicopters loaded with $1.4 billion in 100-dollar bills to Kurdistan, according to the Los Angeles Times. The money helped finance Kurdish infrastructure and development contracts that Michaels and his business partners then contracted with the Kurdish government to build and secure…
One Michaels/Yatom joint venture, Kudo AG (short for Kurdish Development Organization), registered in Switzerland, won a major contract to serve as the Kurdish government’s general contractor for the $300 million project to rebuild Irbil’s Hawler International Airport. According to an associate familiar with Michaels’ Kurdish ventures, the deal was structured such that Kudo (a joint venture between Michaels and Yatom and their Kurdish associate representing one of Kurdistan’s two ruling parties) was to get paid 20 percent of every contract awarded in the airport project. Though it’s not clear how much Kudo was ultimately paid, that ratio would have made its contract worth roughly $60 million. (Michaels declined to comment for this story.)
Michaels also won a smaller contract with the Kurdish Minister of Interior to provide counterterrorism training and equipment; in 2004, Michaels brought several dozen Israeli ex-security officials as well as bomb-sniffing dogs, secure communications equipment, and other military gear into a camp in northern Iraq.
As Rozen tells it, Michaels and Yatom had some plans that didn’t work out. One was a 2004 offer to sell some alleged “evidence” about Saddam’s former WMD programs to the CIA for $1 million. The CIA, very sensibly, didn’t buy. Also, the two men’s plan to provide security services to the Kurdish Regional Government had to be curtailed after Turkey raised complaints– and the Israeli security services suddenly (a little late in the day?) ‘discovered’ laws that forbade Israeli nationals from entering Iraq Iraq without explicit permission or from dealing in defense equipment without the requisite license…
Rozen also has quite a lot of fascinating information about Yatom’s post-Mossad business activities, including partnerships with Arkadi Gaydamak, recently indicted in France for illegally selling weapons to the Angolan government back in the 1990s; with the ultra-hawkish (and very pro-Israeli) former head of the CIA Jim Woolsey; and former German intelligence chief Berndt Schmidbauer
She reported these details about this big, globe-girdling business plan, culled from an interview she conducted with Yatom in Israel in May:
- The idea was to create a discreet strategic consultancy called Interop, Yatom explained, with Michaels as the key operational front man. “Woolsey and Schmidbauer agreed. But it never happened,”—because, Yatom said, by 2003, he’d been elected to a seat in the Israeli parliament. Facing Israel’s conflict-of-interest rules, he put his business interests into a blind trust that Michaels ran.
Asked just how blind the trust really was, given his frequent dealings with Michaels, Yatom was adamant. “I don’t know what Michaels does,” he told me. “Schmidbauer did give us an introduction to the Kurds, [but] once the introductions were made, I joined the government, and could no longer be involved.” That restriction, however, was about to come to an end. Just a few weeks after we spoke in May, Yatom announced his resignation from his Knesset seat. He was, he told me, headed for a second turn in business—security, real estate, construction.
Fwiw, Woolsey denied involvement in the scheme.
- Despite Yatom’s insistence that he was no longer involved [in Interop] after he took his Knesset seat, incorporation and marketing documents for the company suggest it continued to exist somewhat longer. Delaware incorporation papers show an Interop Group, Ltd. registered in March 13, 2002; Swiss corporation registration documents show an Interop Group LTD registered February 3, 2003, with liquidation beginning in 2007. Swiss records also show that Yatom and Michaels’ Kurdish partnership, Kudo, began the process of official dissolution in May 2007.
The recent liquidation of the businesses may be a result of the pressures on Michaels to reduce the Israeli presence in Kurdistan, as well as what associates say are financial and other disputes with the Kurds. But they also reflect a new direction for both Michaels and Yatom. In the past two years, Michaels has pursued business opportunities in Africa, Morocco, Serbia, and, according to one American associate, post-US-sanctions Libya…
Rozen gives some (though to my taste not enough?) thought to the important question of what drives people to engage in such a long string of sleazy and often extremely destructive and lethal activities in countries far from their own?
(I would just note that just about all the principals in these kinds of international arms-trading and ‘security’ shakedown operations seem to belong to one gender. Hint: It’s not mine or Laura Rozen’s.)
Rozen provides no evidence regarding motivations that comes directly from any of her story’s leading characters. But she did explore the subject with someone described as “a close business associate of Michaels’.”
This person claimed, she wrote, that
- for all the trouble the [KRG] training deal caused when it was exposed, Michaels was desperate to get out of the security business. “Shlomi looks like a special forces guy,” the associate said. “That shit oozes from him. But he wanted to change his identity. If he could change himself to a college professor with glasses and a tweed jacket, he would do in three seconds.
“What he wanted was very, very simple,” the associate added. “He wanted to become a billionaire, and he wanted to do it in Kurdistan. That is the real Shlomi Michaels. That training thing—he threw that in just to get the other projects.”
“During all of the time I spent with Shlomi, he was extremely consistent in his desire to pursue infrastructure development projects, perhaps hold a position on the board of a bank and pursue other business of that nature,” Russell Wilson, a former senior staffer for the House international relations committee, who helped advise the Kurds on Washington representation and who has had a long business association with Michaels, told me. “People assume because he was former special forces that security was his thing. This was not the case.”