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Foreign ties of nominee questioned

- The Washington Times - Thursday, March 5, 2009

An independent inspector general will look into the foreign financial ties of Chas W. Freeman Jr., the Obama administration's pick to serve as chairman of the group that prepares the U.S. intelligence community's most sensitive assessments, according to three congressional aides.

The director of national intelligence, Dennis C. Blair, last Thursday named Mr. Freeman, a veteran former diplomat, to the chairmanship of the National Intelligence Council, known inside the government as the NIC. In that job, Mr. Freeman will have access to some of America's most closely guarded secrets and be charged with overseeing the drafting of the consensus view of all 16 intelligence agencies.

His selection was praised by some who noted his articulateness and experience as U.S. ambassador to Saudi Arabia and a senior envoy to China and other nations. But it sparked concerns among some members of Congress from both parties, who asked the Office of the Director of National Intelligence's inspector general, Edward McGuire, to investigate Mr. Freeman's potential conflicts of interest.

Mr. Freeman has not submitted the financial disclosure forms required of all candidates for senior public positions, according to the general counsel's office of the Office of the Director of National Intelligence.

Nor did Mr. Blair seek the White House's approval before he announced the appointment of Mr. Freeman, said Mr. Blair's spokeswoman, Wendy Morigi.

"The director did not seek the White House's approval," Ms. Morigi said. "In addition to his formal background security investigation, we expect that the White House will undertake the typical vetting associated with senior administration assignments."

Among the areas likely to be scrutinized in the vetting process are Mr. Freeman's position on the international advisory board of the China National Offshore Oil Corp. (CNOOC). The Chinese government and other state-owned companies own a majority stake in the concern, which has invested in Sudan and other countries sometimes at odds with the United States, including Iran.

Mr. Freeman is also president of the nonprofit educational organization Middle East Policy Council (MEPC), which paid him $87,000 in 2006, and received at least $1 million from a Saudi prince. He also has chaired Projects International, a consulting firm that has worked with foreign companies and governments.

Lindsay Hamilton, a spokeswoman for Rep. Steve Israel, a Democrat from New York who sits on the House Appropriations Committee's select intelligence oversight panel that funds the classified budgets for the intelligence community, said her boss had been in touch with Mr. McGuire, who was appointed by the first director of national intelligence, John D. Negroponte.

"Congressman Israel spoke with DNI inspector McGuire. The inspector said he would look into the matter. And the congressman is pleased with his response." Two other congressional aides also said the inspector general would start his inquiries soon.

Ms. Morigi said only that Mr. McGuire was "reviewing the letter."

The ranking member of the House Permanent Select Committee on Intelligence, Rep. Peter Hoekstra, Michigan Republican, said the questions arising from Mr. Freeman's past associations and business relationships should disqualify him from the NIC post.

"What kind of vetting process did Blair go through on this?" he asked. He added that the disclosures about Mr. Freeman's relationships "may give Blair an out now. If he is on the board of these kinds of companies, it may provide a rather easy out to disqualify him."

Chinese connection

Topping the list of concerns will be Mr. Freeman's links to CNOOC. He joined the board of international advisers for the Chinese concern in March 2004, one year before the company made an unsuccessful bid to purchase the American energy company Unocal. Since then, CNOOC has been a source of worry for lawmakers from both parties as well as the Treasury Department as it looks to discourage oil field investment in Iran.

The State Department looked into whether CNOOC violated the Iran-Libya Sanctions Act at the end of 2007 when the company announced a deal to help develop the North Pars gas field.

President Obama has supported sanctions against businesses investing in Iran. In August, his campaign put out a press release titled: "What McCain Won't Tell You About Iran," highlighting the lobbying work for CNOOC by Charlie Black, a strategist for Republican presidential candidate John McCain.

"CNOOC is among those companies that appears to be capitalizing on the U.S.-led effort to isolate Iran economically, particularly in the energy sector," said Roger Robinson, the president and chief executive officer of Conflict Securities Advisory Group, a Washington-based risk management company that specializes in identifying and profiling public companies with business ties to states accused of sponsoring terrorism.

Mr. Freeman's connection to CNOOC could oblige him to recuse himself from some matters regarding China as well as Myanmar. In October 2007, CNOOC's chief financial officer publicly refused to divest from that country a month after army soldiers opened fire on a crowd protesting the ruling junta, suggesting instead that CNOOC would increase its investments.

The incident prompted the United States to toughen sanctions on the junta, according to statements at the time from the State Department.

Mideast money

Mr. Freeman's ties with Middle East Policy Council (MEPC) also have come under scrutiny. According to the 2006 tax returns for the organization - considered a nonprofit by the Internal Revenue Service - 11 donors contributed a total of more than $2.7 million that year.

MEPC's acting director, Jon Roth, said the organization would not disclose the names of the donors, but added, "If the government needs something, we will cooperate with them."

In 2007, Saudi Prince Alwaleed bin Talal bin Abdulaziz al-Saud announced that he had provided a gift of $1 million to the MEPC for its endowment. Prince Alwaleed's attempt to give New York money after the Sept. 11, 2001, attacks was refused by New York Mayor Rudolph W. Giuliani.

Buck Revell, the FBI's associate deputy director responsible for investigations and intelligence from 1980 to 1991, said the receipt of Saudi money alone is not a reason to disqualify Mr. Freeman.

"Saudi money is everywhere. It is in the George Bush library, it is in the Clinton library, it's everywhere. So that in and of itself is not disqualifying," Mr. Revell said. "But how that money was used - was it used for the correct purposes, was it diverted to other entities or other organizations - that would raise issues of security. If it is going to organizations that say Israel should be wiped from the face of the earth and other stuff, that would raise issues."

Another issue of concern is the client base for Projects International. On its Web site, the company lists among its clients Gulf Catering Co., a subsidiary of Agility Defense & Government Services, which prepares the meals for the dining facilities that serve U.S. troops in Iraq.

In 2005, Gulf Catering Co. was accused of offering a $50,000 bribe to an Army chief warrant officer in Iraq to win a bid to provide the U.S. military in Iraq with napkins and cutlery, according to an investigation by the Army Criminal Investigation Command first reported by USA Today in 2007.

Voice of experience

Three former NIC chairmen and one former vice chairman told The Washington Times that Mr. Freeman's business ties to China, Saudi Arabia and other nations should be vetted before Mr. Freeman takes his post.

Fritz W. Ermarth, who served as chairman of the NIC between 1988 and 1993, said, "Mr. Freeman's political and business associations will be or should be vetted and then reviewed in a polygraph examination for potential hazards to security."

He said the "political correctness" of Mr. Freeman's past associations "will not be and should not be at issue from a security point of view. But they are legitimate issues for argument and discussion from a political point of view, where the question is not just the orientation of Mr. Freeman, but the orientation of the administration."

Henry Rowen, who chaired the council from 1981 to 1983, said, "There are all kinds of perception issues here."

He added, "He is on the board of CNOOC. I don't think it should matter or that alone disqualifies him. Of course this is legitimate to look at, you have to look at the whole record. It has to be looked at, but I don't see anything to disqualify him."

Robert Hutchings, who headed the NIC from 2003 to 2005, said the same criteria that apply to other senior U.S. administration officials should apply to Mr. Freeman. "If he recuses himself [on issues where there might be a conflict of interest] or places his assets in a blind trust, so there is no question of him benefiting - so long as he can play by these rules, it should be a fine choice," Mr. Hutchings said.

Currently diplomat-in-residence at the Woodrow Wilson School of Public and International Affairs at Princeton University, Mr. Hutchings said Mr. Freeman's business expertise could be an asset in his new post. As NIC chairman, Mr. Hutchings said, he hired two national intelligence officers, dealing with international real estate and software, who had business backgrounds.

Talking points

Herb Meyer, a deputy chairman of the NIC during the Reagan administration, said business connections with China and Saudi Arabia were a concern, but he was more worried about Mr. Freeman's views.

"What concerns me more is what he has said and written. What matters here is his judgment and that seems to be the point that everyone is skating away from," Mr. Meyer said. "Can you imagine if I had stood up and explained away Tiananmen Square? He does not have the intellectual fire power to sort through the intelligence and reach a plausible conclusion."

Mr. Meyer was referring to a 2006 e-mail attributed to Mr. Freeman saying China was justified in cracking down on students protesting at Tiananmen Square in 1989 and should have acted sooner to suppress the civil disobedience.

The Washington Times could not corroborate that the e-mail that was reportedly sent by Mr. Freeman to members of the China Security Listserv, a private group of policy analysts. But it tracks with other public statements from Mr. Freeman, such as his characterization in an April 25 speech to the National War College Alumni Association that described Tibetan protests last year as a "race riot." Mr. Freeman did not respond to requests for comment.

Other China analysts praised Mr. Freeman, who is said to speak Mandarin Chinese better than almost anyone else in the Foreign Service and who interpreted for President Nixon on his groundbreaking trip to China in 1972.

David Lampton, director of the China Studies Program at the Paul H. Nitze School of Advanced International Studies of Johns Hopkins University, said, "We're lucky to have a person of this caliber. He's an excellent mind in general and has long experience in the area of the world I know best."

The Washington advocacy director of Human Rights Watch said, however, that Mr. Freeman's nomination sends the wrong message.

"A capacity to make moral distinctions may not be a prerequisite for being a good intelligence analyst," Tom Malinowski said. "But for such a high-profile appointment, it would still be wise for President Obama to weigh the message sent by choosing someone who has so consistently defended and worked for the clenched fists the president so eloquently challenged in his inaugural address."