Syria earned billions in illegal profits as way station for Saddam
Geostrategy-Direct, www.geostrategy-direct.com, August 9, 2005

The regime of Syrian President Bashar Assad received $3 billion from
illegal oil and arms deals with the former Saddam Hussein regime in
Iraq.

The House International Relations Committee released documents
outlining the huge profits accumulated by Syria in serving as a way
station for illegal Iraqi oil exports and arms imports. The documents,
supplied by the Internal Revenue Service, pointed to revenues earned by
then-Syrian Defense Minister Moustapha Tlas for enabling weapons sales
to Iraq in the years that led up to the U.S.-led war against Baghdad in
2003.

At a House hearing on July 27, officials warned that the Bush
administration would impose additional sanctions on Damascus unless it
returned $262 million to Baghdad. Syria has so far refused to do this.

"Despite Syrian steps to improve its anti-money laundering and
terrorist finance controls, the Section 311 sanctions could be
triggered if Syria does not follow through with the transfer of this
remaining amount to the DFI [Development Fund for Iraq]," Deputy
Assistant Secretary of State Elizabeth Dibble said.

In all, the Iraqi-Syrian trade amounted to $3 billion between June 2000
and March 2003, officials said. The Commercial Bank of Syria, or CBS,
received funds via oil sales.

Officials said Syria was the most helpful of Iraq's neighbors with much
of the Iraqi funds transferred to banks in Beirut.

"It was in the Syrian regime that Saddam found perhaps his most favored
and profitable collaborator," said Rep. Ileana Ros-Lehtinen (R-Fla.),
chairwoman of the House subcommittee on the Middle East and Central
Asia.

In most cases, Iraq received payment for smuggled oil through Syrian
supplies of Soviet-origin weapons, including main battle tank and
aircraft components, anti-aircraft and night-vision systems and
anti-tank rockets. The IRS documents asserted that 60 percent of Syrian
payments to Iraq consisted of weapons deliveries. The rest was paid in
cash.

"Under the Syrian protocols, the former Hussein regime was required to
use the money in the trade account to purchase goods from vendors and
businesses in Syria," said Dwight Sparlin, operations director for the
IRS's Criminal Investigation Division.

"The Iraqi government would negotiate contracts with Syrian companies
to provide merchandise. Once the merchandise was received in Iraq and
verified, SOMO [the Iraqi State Oil Marketing Organization] would
direct the CBS by letter to pay a specific amount to a Syrian supplier
from the trade account."

The documents asserted that Tlas received payments for facilitating
weapons deals in violation of United Nations Security Council
sanctions.

Tlas's son, Firas, arranged weapons deals for Iraq from Europe.

Assad's cousin, Thualhima Shaleesh, was also said to have served as an
intermediary for Iraqi weapons imports. Shaleesh was chief of the
presidential guard corps.

The majority of Iraqi trade with Syria went through another cousin of
Assad, Asef Shaleesh. Shaleesh headed a company called SES, which
received $187 million in defense and security contracts from the Saddam
regime.

"While Syria acted as Iraq's banker, some of its highest officials
brokered military deals for Iraq and profited from them as well," said
Rep. Dana Rohrabacher (R-Calif.), chairman of the Joint Oversight and
Investigations subcommittee. "One source suggests that former Syrian
Defense Minister Moustapha Tlas received a regular 'tribute payment'
for his role in the deals between the two countries. Anything shipped
had to receive his approval in order to be allowed through Syrian
Customs."

. . . And continues to serve as primary way-station for insurgency in
Iraq . . .

Despite increased U.S. operations and diplomatic pressure, Syria
continues to serve as the main way station for insurgents and weaponry
destined for Iraq.

The U.S. military has determined that Syria continues to serve as the
preferred route for insurgents ordered to undermine the pro-U.S.
government in Baghdad. Sunni insurgents linked to Al Qaida smuggle
fighters, explosives as well as a range of equipment for attacks
against coalition and Iraqi troops.

Aleppo, officials said, has served as the launching point for Sunni
insurgents. Fighters from such North African countries as Algeria and
Sudan arrive in Syria and make their way to the northern city.

In Aleppo, the foreign fighters search the mosques of the old city
quarter for liaisons with the Sunni insurgency in Iraq, usually mosque
preachers or their aides.

"We still consider that Syria is probably the most porous border of
those that border Iraq," said Lt. Gen. James Conway, director of
operations at the Joint Chiefs of Staff.

The U.S. military has completed what officials termed the first
long-term base near the Syrian border close to Saudi Arabia. The base,
about 5 kilometers from Rawah, currently has 2,000 U.S. Marines and
Army personnel, and would facilitate regular operations to block the
flow of insurgents and weapons from Syria.

Syria has repeatedly pledged to enhance security along the border with
Iraq and Syrian border police and troops have captured some suspected
insurgents and blocked some shipments.

The regime of President Bashar Assad has also constructed a wall of
several kilometers along the border with Iraq to block infiltration.
Officials said the wall, construction of which began in March 2005, has
been completed in several sections along the Iraqi border.

Nevertheless, officials said the lion's share of insurgency equipment
still manages to enter Iraq. In some cases smugglers and infiltrators
have simply moved south along the Syrian border to where there are no
physical barriers.

In other cases, officials said, the wall has been breached and
smuggling has resumed. Syrian border authorities have turned a blind
eye as smugglers established lookout points along the wall, they said.

"They [Syria] have done some improvement on the physical berm that
exists between the two countries," Conway told a Defense Department
briefing on July 26. "So I would say we're encouraged but we would
still like to see more."

. . . And Hizbullah in Lebanon

Syria continues to facilitate the transfer of Iranian weapons to
Hizbullah in Lebanon.

U.S. officials said that within days of Syria's military withdrawal
from Lebanon in late April an Iranian shipment of munitions, mortars
and anti-tank rockets had reached Lebanon. The shipment was flown by
air to Damascus International Airport and taken by truck to Lebanon's
Bekaa Valley.

"Syria continues to be a foremost supporter and weapons supplier of
Hizbullah, a terrorist group active in Lebanon, and throughout the
world, that has been targeting and killing Americans and many others
since the early 1980s," said Rep. Ileana Ros-Lehtinen (R-Fla.),
chairwoman of the House subcommittee on the Middle East and Central
Asia.

Since May, several additional trucks believed laden with weapons were
tracked moving from Syria to the Bekaa Valley. In the Bekaa, the trucks
were unloaded by Hizbullah and taken to various bases in eastern and
southern Lebanon.

Officials said the arms deliveries violated United Nations Security
Council Resolution 1559, which calls for a Syrian withdrawal from
Lebanon as well as the disarming of Hizbullah.

"We know that Iran has been assisting Hizbullah and other organizations
and moving equipment and people down through Damascus into Beirut and
down into positions where they can attack Israel for years and years
and years and years," U.S. Defense Secretary Donald Rumsfeld said on
July 12.

So far, Lebanese forces, which have clashed with smugglers coming from
Syria, have not yet intercepted Hizbullah shipments from Damascus. On
July 26, in a move that angered the U.S. Congress, Lebanon's new
cabinet affirmed its friendship with Syria as well as the right to
attack Israel.

In a statement, the government of Prime Minister Fouad Siniora did not
refer to the UN demand for the disarmament of Hizbullah. Instead, it
appeared to support Hizbullah's military campaign against Israel.

"Armed resistance is a natural and national right of the Lebanese
people in liberating their land and defending themselves against
Israeli threats and ambitions," the Lebanese statement said.

Over the past few months, Hizbullah received advanced equipment for sea
and air attacks from Iran, officials said. They cited unmanned aerial
vehicles, scuba gear, speedboats and closed-circuit communications
systems. Some of this equipment was also obtained from Canada.

Israeli troops recovered some of the advanced equipment during a June
30 Hizbullah infiltration of the Israeli border near the Shebaa
Plateau.

Hizbullah also left behind advanced night-vision and communications
equipment.

Assistant Secretary of State David Welch said Iranian military advisers
continued to train Hizbullah after the Syrian withdrawal from Lebanon.

Welch said told the House International Relations Committee on July 28
that the regime of President Bashar Assad has enabled Iran to deliver
weapons through Syrian territory.

"Syria continues to destabilize Lebanon by facilitating Iranian
resupply of Hizbullah, and by support for armed Palestinian militias
inside of Lebanon," Welch said. "The Iranians maintain personnel in
association with Hizbullah inside of Lebanon."