War adviser hit by business ties

Richard Perle, a US architect of the war on Iraq, resigned yesterday as chairman of a Pentagon advisory panel after facing allegations of a conflict of interest over his work for the bankrupt telecommunications firm Global Crossing.

Perle said he would remain a member of the Defence Policy Board while stepping down as chairman, and quit his consulting job with Global Crossing.

"As I cannot quickly or easily quell criticism of me based on errors of fact concerning my activities, the least I can do under these circumstances is to ask you to accept my resignation as chairman of the Defence Policy Board," Perle wrote to Defence Secretary Donald Rumsfeld.

Rumsfeld accepted Perle's resignation as chairman but asked that he remain a member of the board, and Perle said that he agreed to stay on the board.

"He has been an excellent chairman and has led the Defence Policy Board during an important time in our history," Rumsfeld said. "I should add that I have known Richard Perle for many years and know him to be a man of integrity and honour."

In a letter to Chris Nash, a senior vice president at Global Crossing, Perle wrote: "In light of the recent controversy reported in the press, I think it best that I withdraw from performing any further services for the company. I believe most of my work on your behalf is complete."

Earlier this week, Representative John Conyers, a Michigan Democrat, asked the Pentagon's inspector general to probe Perle's work as a paid adviser to Global Crossing and his guidance on investment opportunities resulting from the Iraq war.

Conyers said yesterday Perle's continued membership on the Pentagon panel was problematic. "I have no plans to withdraw my request for a review of Mr Perle's conflicts of interest by the Defence Department inspector general," he said.

In his resignation letter, Perle said, "I am advising Global Crossing that I will not accept any compensation that might result from their pending acquisition and that any fee for past service would be donated to the families of American forces killed or injured in Iraq."

Perle said that the US$125,000 ($227,000) fee received for work he had already done for Global Crossing would be donated. He had said previously that he would have been paid another US$600,000 if the Government approved the deal.

Perle agreed to help Global Crossing, a bankrupt operator of an international fibre-optic network, to win US approval to sell a 61.5 per cent stake to Hutchison Whampoa and Singapore Technologies Telemedia.

The deal ran into problems with the Committee on Foreign Investment in the United States, which counts Rumsfeld and other top US national security advisers as members.

The committee can block mergers and acquisitions it feels could harm US interests, and it raised concerns that Global Crossing's network would be controlled by a company with strong ties to China. Hutchison is majority-owned by Hong Kong's richest man, Li Ka-shing.

Perle said he advised Global Crossing to establish a board of distinguished individuals to serve as a proxy to guide the company forward and that the company went further to provide assurances the deal would not harm US security.

"The work we have done provides for additional measures that go substantially beyond a standard proxy board and provides the utmost protection for national security," Perle said in a letter to Global Crossing dated Thursday.

As chairman of the Defence Policy Board, created in 2001 to advise the Pentagon, Perle had no official policymaking role and was not paid. He has been influential in developing the Bush Administration's plan to oust Iraqi President Saddam Hussein.

- REUTERS


Herald Feature: Iraq