Unpublished Letter to San Francisco Chronicle concerning the Web, Euros and the Iraq War. (4/7/06)


On Tuesday, April 4, 2006, I sent the following letter to the San Francisco Chronicle, which the Chronicle declined to publish:


Editor – David Baker rightly dismisses the blog rumor that Iran will destroy America by selling oil for euros rather than dollars

( “A Web of oil intrigue,” – April 4). But he is wrong to ridicule the idea that “America invaded Iraq…because Saddam Hussein started trading oil in euros.”


There were of course many reasons for the Iraq invasion, but one cannot exclude this one. As Kevin Phillips notes in American Theocracy (p. 93), “in 2002 and 2003, dollar protection [from the euro] posed a serious problem.”[1] President Bush swiftly confirmed this by arranging, two months after the invasion, for oil sales in Iraq to be returned from euros to dollars.[2]


His Executive Order of May 2003, declaring a “national emergency,” directed oil earnings into a fund, controlled by the United States, for reconstruction projects in Iraq. One month later, the Financial Times, on June 5, 2003, confirmed that Iraqi oil sales were now switched back from euros to dollars.[3]


On November 14, 2002, Donald Rumsfeld told CBS News that U.S. policy on Iraq “has nothing to do with oil, literally nothing to do with oil." This was a flat-out lie. The Chronicle should not allow its pages to perpetuate it.






For the sake of your fact-checker I have included footnotes, which of course are not for publication.


[end of unpublished letter]


I am posting my unpublished letter here on my web site for two reasons. The first is that recent misguided predictions about the importance of Iran’s oil bourse should not be allowed to diminish the importance of euros as a factor affecting American oil policy. I shall reiterate in my forthcoming book, The Road to 9/11, some of what I had to say in 2002 about <a href= http://ist-socrates.berkeley.edu/~pdscott/iraq.html> “Bush's Deep Reasons for War on Iraq: Oil, Petrodollars, and the OPEC Euro Question.”</a>


The second reason is to keep the San Francisco Chronicle honest, on matters dealing with oil and, just as importantly, with the Web. The Chronicle is unquestionably one of the better U.S. newspapers, and (at least until recently) one of the more liberal as well. The paper has published excellent reports on Iraq from Anna Badkhen and Robert Collier, including a story from Collier on the devastating health effects from U.S. weaponry containing depleted uranium (DU) in the 1991 Gulf War (<a href= http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/01/13/MN233872.DTL> “Iraq links cancers to uranium weapons

U.S. likely to use arms again in war”</a>, San Francisco Chronicle, 1/13/03). Just as the New York Times has never in 40 years published any letters by me (not even one letter which was solicited by one of its staff), so this is the first time in 40 years that the Chronicle has not published a letter by me.


I suspect that the Chronicle’s motives for publishing Baker’s attack on the Web were not disinterested. As the

<a href= http://www.latimes.com/business/la-fi-chronicle11dec11,0,5115266.story?coll=la-home-business >Los Angeles Times </a>(12/11/05) has reported, the Internet has adversely affected both the Chronicle’s circulation figures and its advertising revenues.[4] More and more people, like myself, have already read the best of the Chronicle’s morning news on the Web the day before. Our numbers are increasing rapidly, even though many people like myself continue to subscribe to newspapers for other reasons (in my case, the Sudoku puzzle and the TV sheet). One reason our numbers are increasing is that important stories – such as the interdependence of America’s oil, Iraq, and euro policies – are found on the Web first, long before they reach the mainstream press and books like American Theocracy.[5]


The dilemma facing the Chronicle is that facing the Democratic Party. If they reach out towards the political culture of the Web, they distance themselves from the power structure of the status quo. If they do not reach out towards this culture, they will probably contribute to, and even hasten, their demise.


It is partly from my respect for the past achievements of the Chronicle that I hope they choose the former path. At the very least, they should cease from ridiculing the Web on those occasions when the Web is telling the truth. And they should hear from their readers when they do engage in such ridicule.


I invite readers to respond to these thoughts, both to myself at pdscottweb@hotmail.com, and to the Chronicle at letters@sfchronicle.com.







[1] Prior to this statement, Phillips lists five countries that had announced their plans to shift away from dollar payments for their oil: Venezuela, Indonesia, Malaysia, Iran, and Russia. He ends the paragraph with the statement that U.S. battleships “were not free to train their sixteen-inch guns on foreign central banks.” [A disclaimer: Phillips in his excellent book quotes earlier (p. 68) from my piece on this web site on

<a href= “http://ist-socrates.berkeley.edu/~pdscott/iraq.html”> “Bush's Deep Reasons for War on Iraq: Oil, Petrodollars, and the OPEC Euro Question.”</a>]

[2] Executive Order 13303 of 5/22/03, Federal Register, 31931, http://www.whitehouse.gov/news/releases/2003/05/20030522-15.html.

[3] Financial Times, 6/5/03. Cf. Krassimir Petrov, Ph.D., “The Proposed Iranian Oil Bourse,” Gold Eagle, 1/20/06, http://www.countercurrents.org/us-petrov200106.htm: “Two months after the United States invaded Iraq, the Oil for Food Program was terminated, the Iraqi Euro accounts were switched back to dollars, and oil was sold once again only for U.S. dollars.” Baker rightly ridicules Petrov’s apocalyptic predictions, but on this point Petrov is correct.

[4] See <a href= http://www.latimes.com/business/la-fi-chronicle11dec11,0,5115266.story?coll=la-home-business > “San Francisco Chronicle Struggles as Internet Siphons Readers, Ads,” Los Angeles Times, 12/11/05.

[5] The Chronicle’s distaste for the Web is probably increased by the political attacks they are subjected to there, both from the left at

<a href= /%3ehttp:/www.BeyondChron.org%3c/a">http://www.beyondchron.org/news/>http://www.BeyondChron.org</a>, and from the right at