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FRIDAY,ALY .15, '1988 .1
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INSIDE WASHINGTON
Israel Would Have Benefited
From Mideast Pipeline Deal
WOLF BLITZER
Special to The Jewish News
ashington — E. Ro-
bert Wallach, the
close friend and
associate of outgoing U.S.
Attorney-General Edwin
Meese, has confirmed that
Israel stood to receive be-
tween $70 to 100 million
worth of oil a year for a
decade as part of a politically
sensitive deal involving the
construction of an oil pipeline
between Iraq and the Jorda-
nian port of Aqaba. .
Wallach denied that
Foreign Minister Shimon
Peres or the Labor Party was
offered any "bribe" by
wealthy ex-Israeli business-
man Bruce ("Baruch") Rap-
paport whose huge Swiss
company had joined forces
with the San Fransisco-based
Bechtel engineering and con-
struction firm to build the
proposed $1 billion pipeline.
But Wallach, a San Fran-
sisco-based lawyer who was
paid $150,000 by Rappaport
to represent him in Washing-
ton, noted that Rapaport had
indeed informed him that he
was planning to make large-
scale campaign contributions
to both the Labor and Likud
Parties.
Wallach, who has been in-
dicted by a special U.S. pro-
secutor in connection with his
activities in the unrelated
Wedtech arms contract scan-
dal in New York, and Meese
are expected to be cleared of
any criminal wrongdoing in
the Iraqi pipeline affair when
another special U.S. prose-
cutor formally releases his
findings:
Meese announced his resig-
nation after being privately
informed that no criminal in-
dictments would be forthcom-
ing in the second special
prosecutor's report. Wallach,
who on the advice of his at-
torney had maintained a firm
silence on the pipeline allega-
tions until now, decided to go
public with the completion of
the governmental investiga-
tion.
Although both he and Rap-
paport stood to make large
amounts of money from the
Iraqi pipeline deal, Wallach
insisted that they also were
motivated to back the project
because it was in Israel's own
best interests.
The pipeline, which was
never built, would have quiet-
ly brought Israel, Jordan,
Iraq and the United States
together in a major coopera-
tive project, Wallach said. The
political ramifications were
well understood by Peres and
other Israeli officials, he add-
ed.
Shimon Peres:
No bribes.
In addition, Wallach said,
Rappaport had made a "side
deal" with Peres, who was
then prime minister, which
would have enabled Israel to
receive between $700 million
and $1 billion worth of oil
over a ten-year period. One of
Rappaport's companies had
been tapped to operate the
refinery facility in Aqaba.
The project had the strong
backing of the State Depart-
ment and the White House.
But it also required Israel's
cooperation since the Iraqis
were demanding strict assur-
ances-that Israel would never
bomb the pipeline — as it had
done to the Iraqi nuclear reac-
tor at Osirak in June 1981.
Peres, in a letter to Rap-
paport, offered those assur-
ances. But the Iraqis also
demanded heavy U.S. finan-
cial involvement as a further
guarantee. Wallach was sup-
posed to use his contact with
Meese to press the issue.
Although the project was
initially supported by U.S. of-
ficials, by early 1986, the new
national security adviser,
John Poindexter, had come
out against any U.S. financial
guarantees. The Iraqis, then
losing their war with Iran,
also began to lose interest.
They instead pursued a con-
tract with a Franco-Italian
consortium to build an alter-
native pipeline through Kur-
distan to Turkey.
But the pipeline story ex-
ploded when it was disclosed
that the special U.S. prose-
cutor, James McKay, was in-
vestigating Meese's role,
especially following allega-
tions that the attorney-
general had ignored a sugges-
tion to "bribe" a foreign of-
ficial — in this case Peres.
This would be a violation of
U.S. law.
In the recent interview,
Wallach maintained that he.
had been "sloppy" in dic-
tating the memo. He said he
had never intended to suggest
that Peres or the Labor Party
would receive a bribe in ex-
change for their cooperation
with the Iraqi pipeline deal.
Bookbinder, Breger
Debate Mideast Issues
Washington (JTA) —
Hyman Bookbinder, in his
political debut for Michael
Dukakis' campaign, and Mar-
shal Breger, a Jewish sup-
porter of Vice President
George Bush and former
White House liaison to the
Jewish community, debated
Mideast issues last week at
the monthly meeting of
Washington representatives
of U.S. Jewish groups.
Breger criticized Dukakis'
foreign policy views, saying
that his support for multina-
tionalism over unilateral U.S.
military action and opposi-
tion to a large defense build-
up could put Israel in jeopar-
dy. He added that the
presence of the Rev. Jesse
Jackson in the Democratic
Party could also affect
Mideast policy.
In a warning to Jackson,
Bookbinder, now special ad-
viser to Dukakis on the Mid-
dle East, human rights and
the underprivileged, said
Jackson's forces will be
"trounced again" if they try
to influence the party's posi-
tion on the Middle East.
Bookbinder also lashed out
at the National Jewish Coali-
tion, a Republican Jewish
group here, for trying to
"scare" Jews — in a June
direct mail membership drive
— by saying that this year
"won't be the first time that
the Democrats have sacrificed
Jewish interests."