MIC Front Companies The networks of these companies still exist through The MIC used front companies to accomplish those their former employees, even as the old offi ces now business transactions it could not conduct amid stand empty. The owners and employees of former UN scrutiny. Front companies handled the tasks front companies may be seeking to become a part of of smuggling oil, funneling UN OFF revenues, the post-Saddam Iraqi business community. and importing weapons and dual-use materials sanctioned by the UN. The MIC formed many of Bidding Process With MIC Committees. According these companies in 1991 to bypass UN sanctions and to a former civil engineer, the MIC bidding process spread the transfer of funds through a wider variety of began when a MIC facility generated a requirement, companies to avoid international attention (for a full called a tender. There were two kinds of tenders, list see Annex K: Suspected Front Companies Associ- regular or invitation. ated With Iraq). • Regular tenders were open and could be bid upon • The MIC operated three primary procurement front by any contractor or private company approved by companies that were critical to Iraq’s clandestine MIC security, including foreign contractors. import activities: Al-Basha’ir, Al-Mafakher, and ARMOS. • Invitation tenders were issued when specialty items were required that could only be supplied • These companies also had a close association with by specifi c companies. In addition to MIC secu- the IIS and used connections that the IIS had in rity approval, it is most likely the IIS and/or MFA foreign countries to procure goods. also vetted these companies. The invitation tenders were issued directly to company agents in Iraq and • The IIS was also heavily involved in the opera- Jordan, not to the foreign companies directly. tion of these companies by having IIS personnel in middle and upper management and in security • This approval process was a result of Iraqi offi cials’ operations. concerns over foreign companies with hidden con- nections to Israel. According to captured docu- The most important of these companies was Al- ments, the MIC blacklisted a Bulgarian company Basha’ir, which was formed by Husayn Kamil and because a Russian-Israeli businessman owned it. managed by Munir Mamduh Awad al-Qubaysi. The companies ARMOS and Al-Mafakher were created Interested foreign and domestic supply companies later by the head of MIC, Abd al-Tawab Mullah then offered bids for the tenders through the MIC Huwaysh, to help facilitate competition among MIC legal department. The MIC Procurement Commit- front companies in importing banned goods and to tee, an informal seven-member panel, selected the improve productivity. Apparently, Huwaysh deemed best bid based on the offered price and the preference these companies to be so important to MIC that rating of the particular supply company. After a tender around 1998 he moved responsibilities for the com- was awarded to a specifi c supplier, the MIC facil- panies from one of his deputies to the Commercial ity that originated the tender passed the contract to a Directorate. This allowed him to exert greater control MIC trading company such as Al-Basha’ir, ARMOS, over the operation of the companies, according to a or Al-Mafakher. These companies worked through the former Regime offi cial. approved supplier to conduct the actual procurement. • There was a large network of international compa- The Al-Basha’ir Trading Company. The MIC estab- nies and banks with which these front companies lished the Al-Basha’ir front company in 1991. The traded. Some were merely banks or holding compa- company’s names has been discovered on hundreds nies, primarily in Syria and Jordan that purchased of contracts for weapons and dual-use materials, as items from the manufacturer and acted as cutouts well as legitimate day-to-day goods and supplies. before sending the items to Iraq under false docu- The company traded in items such as construction ments. materials, foodstuffs, and power generators to cover 72 its real activity, which was coordinating with neigh- documents would show the actual items to be pro- boring countries to facilitate the purchase of illicit cured and then the Al-Basha’ir trustees would prepare military equipment. The company was headed by a second set of procurement documents with benign Munir Mamduh Awad al-Qubaysi, a former 15-year end-use items to conceal the true nature of the illicit employee of the IIS. Because of his connections, rela- activity. tions between Al-Basha’ir and the IIS were especially close from the time he became Director of the com- • For example, Al-Basha’ir described spare tank parts pany in the late 1990s. as air conditioning systems. Al-Basha’ir would then prepare the bank transfers for the seemingly • Contrary to some sources, Al-Basha’ir was owned innocuous items. and operated by the MIC. Al-Qubaysi’s history with the IIS and the fact that many other members • One set of papers for the actual items were either of the Al-Basha’ir staff were also IIS offi cers, led given to the SSO, or in some cases taken to the many to assume Al-Basha’ir was an IIS front com- homes of some of the Al-Basha’ir offi cials. Regime Finance pany. and Procurement • The company would offer small contracts to the • The last chairman of Al-Basha’ir’s board of direc- Iraqi companies, while large contracts would be tors was the head of the MIC’s Administration and based on a recommendation from the director of Finance Directorate, Raja Hasan Ali Al-Khazraji. the IIS, ‘Uday Husayn, Qusay, Vice President Taha Yasin Ramadan al-Jizrawi, or Saddam. ISG judges that several Regime members exerted varying degrees of infl uence over the Al-Basha’ir Al-Qubaysi was largely responsible for Al-Basha’ir’s procurement process. There is, however, confl ict- success, according to an Iraqi offi cial with direct ing reporting of who was in control of Al-Basha’ir access to the information. He ran the company well procurement. Several sources have stated that it was and maintained a close relationship with the IIS. the MIC Director, Abd al-Tawab Mullah Huwaysh. As a result of this relationship, Al-Basha’ir could use Reportedly, Qusay Saddam Husayn al-Tikriti and a its IIS liaison, Majid Ibrahim Sulayman, to facilitate committee comprised of senior offi cials of the SSO purchases with IIS fi eld stations around the world. met with Al-Basha’ir trustees to direct the procure- ment of prohibited materials and to authorize pay- Al-Qubaysi also had a close relationship to the Sha- ments. lish family and with other prominent personalities in Syria, and he opened the connection with the SES • Trustees included al-Qubaysi, Jasim Ahmad Hasan, International in Syria. Dr. Asif Shalish was head of and Muhammad Salih Abd al-Rahim. Qusay and the Syrian fi rm SES, while his uncle, Dhu Al-Himma his advisers would tell the Al-Basha’ir trustees what ‘Isa Shalish, owned the company and is the Chief of items they wanted purchased about twice a month. Presidential Security for his cousin, President Bashar al-Asad. Close relations with the Syrians allowed Al- • Qusay made all fi nal decisions on procurement and Basha’ir to garner the bulk of the trade through Syria, expenditures. which became the primary route for Iraq’s illicit imports over the last years before the war. • Prior to Qusay, Husayn Kamil, Saddam Husayn’s, son-in-law held this position. • The SES and Lama companies are two of the major holding companies for Al-Basha’ir goods in Syria. Al-Basha’ir participated in the bidding process for the MIC by splitting the company into foreign and • Fifty-four percent of all MIC purchases through the domestic sections. The split allowed Al-Basha’ir to Syrian Protocol were through Al-Basha’ir, accord- increase its ability to communicate within the com- ing to captured SOMO documents. pany and its offi ces abroad and for the import of military and security-related equipment. One set of 73 The IIS used the Al-Basha’ir front company to • Munir Mamduh Awad al-Qubaysi, manager of Al- facilitate a deal with the Bulgarian JEFF Company to Basha’ir, was also on the board of directors, along obtain T-72 tank parts and Igla MANPADS, accord- with a representative of the IIS M23 Directorate ing to a former MIC senior executive. The goods (MIC Security). (see the IIS procurement section of were either fl own to Baghdad under the guise of a this chapter and the RSI IIS annex.) humanitarian mission or they were delivered via Syria. If coming via Syria, illicit military goods typi- ARMOS had a much smaller staff than Al-Basha’ir. cally arrived via the Latakia Port and then were then But despite its size, the company achieved good trucked to Iraq in SES company vehicles. results, according to an Iraqi offi cial with direct access to the information. ARMOS conducted Information from contracts found and data derived approximately 5 percent of the amount of business of from the records of the SOMO indicates that the Al- Al-Basha’ir, but fi ve times more than Al-Mafakher. In Basha’ir Company was also a major broker in Iraqi comparison to al-Qubaysi, however, Hassan wielded oil smuggling (see Figure 43). relatively little power. • The Jordanian branch of Al-Basha’ir signed con- • ARMOS served as the conduit for many Russian tracts for the export of oil and oil products from contracts, including contracts for aircraft engines Iraq, according to SOMO records.