By Richard Behar Research Associate Brenda Cherryhttp://money.cnn.com/magazines/fortune/fortune_archive/2003/05/12/342316/index.htm
May 12, 2003
(FORTUNE Magazine) – Defense Secretary Donald Rumsfeld rarely keeps his opinions to himself. He tends not to compromise with his enemies. And he clearly disdains the communist regime in North Korea. So it's surprising that there is no clear public record of his views on the controversial 1994 deal in which the U.S. agreed to provide North Korea with two light-water nuclear reactors in exchange for Pyongyang ending its nuclear weapons program. What's even more surprising about Rumsfeld's silence is that he sat on the board of the company that won a $200 million contract to provide the design and key components for the reactors.
The company is Zurich-based engineering giant ABB, which signed the contract in early 2000, well before Rumsfeld gave up his board seat and joined the Bush administration. Rumsfeld, the only American director on the ABB board from 1990 to early 2001, has never acknowledged that he knew the company was competing for the nuclear contract. Nor could FORTUNE find any public reference to what he thought about the project. In response to questions about his role in the reactor deal, the Defense Secretary's spokeswoman Victoria Clarke told Newsweek in February that "there was no vote on this" and that her boss "does not recall it being brought before the board at any time."
ABB, which was already building eight nuclear reactors in South Korea, had an inside track on the $4 billion U.S.-sponsored North Korea project. The firm was told "our participation is essential," recalls Frank Murray, project manager for the reactors. (He plays the same role now at Westinghouse, which was acquired by Britain's BNFL in 1999, a year before it also bought ABB's nuclear power business.) The North Korean reactors are being primarily funded by South Korean and Japanese export-import banks and supervised by KEDO, a consortium based in New York. "It was not a matter of favoritism," says Desaix Anderson, who ran KEDO from 1997 to 2001. "It was just a practical matter."
Even so, ABB tried to keep its involvement hush-hush. In a 1995 letter from ABB to the Department of Energy obtained by FORTUNE, the firm requested authorization to release technology to the North Koreans, then asked that the seemingly innocuous one-page letter be withheld from public disclosure. "Everything was held close to the vest for some reason," says Ronald Kurtz, ABB's U.S. spokesman. "It wasn't as public as contracts of this magnitude typically are."
However discreet ABB tried to be about the project, Kurtz and other company insiders say the board had to have known about it. Newman, the former ABB executive, says a written summary of the risk review would probably have gone to Barnevik. Barnevik didn't return FORTUNE's phone calls, but Newman's Zurich-based boss, Howard Pierce, says Rumsfeld "was on the board--so I can only assume he was aware of it."
In his final days in office, Clinton had been preparing a bold deal in which North Korea would give up its missile and nuclear programs in return for aid and normalized relations. But President Bush was skeptical of Pyongyang's intentions and called for a policy review in March 2001. Two months later the DOE, after consulting with Rumsfeld's Pentagon, renewed the authorization to send nuclear technology to North Korea. Groundbreaking ceremonies attended by Westinghouse and North Korean officials were held Sept. 14, 2001--three days after the worst terror attack on U.S. soil.
The Bush administration still hasn't abandoned the project. Representative Edward Markey and other Congressmen have been sending letters to Bush and Rumsfeld, asking them to pull the plug on the reactors, which Markey calls "nuclear bomb factories." Nevertheless, a concrete-pouring ceremony was held last August, and Westinghouse sponsored a training course for the North Koreans that concluded in October--shortly before Pyongyang confessed to having a secret uranium program, kicked inspectors out, and said it would start making plutonium. The Bush administration has suspended further transfers of nuclear technology, but in January it authorized $3.5 million to keep the project going.
Sooner or later, the outspoken Secretary of Defense will have to explain his silence.
The Bush administration has got 120,000 American troops locked down in Iraq, with additional thousands in support or operational roles contributing to the Iraqi conflict. They have an additional 20,000 troops in Afghanistan. As such, the situation in Iraq and Afghanistan is taking up so much manpower and resources that the United States does not possess a viable deterent military option against North Koreans. This is one of the key factors that has emboldened Kim Jong Il to play his little game of brinksmanship and leave the U.S with no alternative but to play the tacit game of diplomacy. One can argue that the Americans will never attack North Korea - that is a sound arguement which is probably true. However, if the Americans had not ben stucked in Iraq and Afghanistan, the stakes at the table would have been very different in this game with the Korean dictator.Originally posted by the Bear:what has one got to do with the other?
OIl is more impt remember!Originally posted by highway69:Think the Bush administration is feeling the heat now that N Korea just tested a WMD. Iraq war is now seen to be a big mistake and the US intentions are under scrutiny.
Tat doesn;t mean China and Russia will back any aggression against north korea.. remember, China is North Korea's closest ally and china cannot keep quiet tis time regarding bout tis nuclear test by the north korea and have to "make some noise" to show the international community tat its against it..but who knows? deep inside, they might even be congratulating their ally for the success?Originally posted by Lighty:i heard dat China is pissed off wif N.korea now
just wait till Iran tests a nuclear bombOriginally posted by highway69:Think the Bush administration is feeling the heat now that N Korea just tested a WMD. Iraq war is now seen to be a big mistake and the US intentions are under scrutiny.
That's what he always wanted, didn't he?Originally posted by ShutterBug:Kim Jong Il: Small man, with Small Mind....
.. digging up BIG trouble for himself.
Will we hear any of our dear and wise leaders say anything about the situation?Originally posted by countdracula:bush played his last card with iraq....the result of lobbyist power in american politics....the amount of money spent on iraq could have gone to the 30 mil poor in america....
north korea is a time bomb....literally. the circus clown has no reservation about releasing the nukes whenever wherever.....small country like sg should refrain from passing 'comment'.......
they have already said some things....this is like staring into the eyes of a bully, the clown with the weird hairdo may just 'test' the nuke here...Originally posted by Croaking_Toad:Will we hear any of our dear and wise leaders say anything about the situation?
no more u..no more me..no more everyone....Originally posted by ShutterBug:Yep....
One.... just one friggin nuke this way.... lands smack dead center (kranji area)
... no more Kiasuism, no more Kiasism....
..nada...
Any idea what the radius of a nuclear warhead explosion upon impact?
total and complete DECIMATION.
from Kranji to Woodlands Causdeway and into JB area, from Kranji southward to PSA ports, radiates sideways to the east Changi, to the west Tuas Second Link - COMPLETE DECIMATION.
No more ranting, no more High Costs of Living, no more misery from our gov...