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It involves his dual roles as chairman of the State Department's International Security Advisory Board (ISAB) and chairman of the US-Taiwan Business Council. Among the latter's US members are military contractors who have been dying to get the George W Bush administration's approval to sell about US$11 billion worth of arms to the island to protect it against the threat of an attack by the mainland.
US Secretary of State Condoleezza Rice appointed Wolfowitz as chairman of the arms-control advisory panel - apparently as part of the campaign to secure the appointment of Eliot Cohen to become to her counselor at the State Department, to co-opt neo-conservatives - in January this year.
Like the Defense Policy Board, the ISAB became a stronghold for all manner of national security hawks under Bush, with former under secretary for Arms Control and International Security Affairs Robert Joseph, James Woolsey, former director of the Central Intelligence Agency, and former defense secretary James Schlesinger among its members.
It also is joined by missile-defense devotees associated with the Center for Security Policy, the National Institute for Public Policy and Southwest Missouri State University as well as executives from the arms industry - Lockheed, Boeing, and Science Applications International Corp (SAIC), to name a few.
Wolfowitz's appointment, coming after his disgrace at the bank - not to mention his performance as deputy to former defense secretary Donald Rumsfeld and superior of then-under secretary of defense Douglas Feith from 2001 to 2005 - was seen as a kind of token public redemption that would presumably have little consequence in actual policy terms.
That assessment may have been premature, because, judging by an article appearing in Wednesday's Washington Times by Bill Gertz, Wolfowitz's ISAB may be trying to gin up tensions with China, acting as a new "Team B" in persuading policymakers and the public at large that Beijing's military modernization, especially its missile program, is more threatening to the US than, in Gertz's words, "many current government and private-sector analyses" have depicted it.
At least, that is the message of the article, which is purportedly based on a draft of an ISAB report that Gertz says is due out in a few weeks.
According to Gertz's account, the report, which is the product of a task force headed by Joseph, recommends the US "undertake the development of new weapons, sensors, communications and other programs and tactics to convince China that it will not be able to overcome the US militarily".
It also specifically recommends that the US obtain, in Gertz's words, "New offensive space and cyber warfare capabilities and missile defenses as well as more robust sea- and space-based capabilities to deter any crisis over Taiwan."
As Gertz points out, Washington has until now repeatedly reassured Beijing that its missile defense efforts were directed solely against "rogue states" like North Korea and Iran.
The report also predicts that China will have more than 100 nuclear missiles, some with multiple warheads, capable of reaching the US by 2015, compared to only 20 missiles at the present time. "To avoid an 'emerging creep' by China toward strategic nuclear coercion, 'the United States will need to pursue new missile defense capabilities, including taking full advantage of space'," Gertz quotes the report as asserting.
The report, according to Gertz, also stresses - and this is where Wolfowitz's stewardship of the US-Taiwan Business Council raises questions - the pivotal importance of Taiwan in all this. Again quoting from the draft, Gertz writes:
In China's view, Taiwan is the key to breakout: If China is to become a global power, the first step must include control of this island. Taking over the island would allow China to control the seas near its coasts and to project power eastward ...
China views Taiwan ... as central to "the legitimacy of the regime and key to power projection", the report said. Taiwan is seen by China as a way to deny the United States a key ally in "a highly strategic location" of the western Pacific, it adds ... The advisory panel report also recommended that the US increase sales of advanced conventional forces to allies in Asia ...
Now, one has to be careful about anything that Gertz reports, particularly about China, as he is a charter member of the "Blue Team" - a group of hawkish policy specialists, congressional staff, and journalists which includes neo-con luminaries such as William Kristol and Robert Kagan and their Project for the New American Century (PNAC).
The Blue team insisted from the end of the Cold War until the September 11, 2001, attacks that Beijing represented the single greatest threat to US hegemony and global peace and security, while Gertz has been obsessed with ChiComs (Chinese communists) for years and has certainly been known to exaggerate and take things out of context in his zeal to alert the world to the looming peril that confronts it.
It is also important to stress that this report remains a draft, which could be substantially toned down before it reaches final form. It may not yet have even been seen by Wolfowitz, whose chapter on China policy in Present Dangers - the book published by PNAC before the 2000 elections, was almost certainly considered insufficiently alarmist by Blue Team stalwarts like Gertz.
That said, it is clear that someone associated with ISAB wanted to leak what - to China anyway - will be seen as a highly provocative document that will tend to confirm the worst fears of its military, which according to the draft, already suffers from "clear paranoia" about US intentions, particularly with respect to missile defense and the military use of space.
It is also clear that the leaker is also very concerned about the pivotal role Taiwan could play in thwarting what the task force sees as China's military ambitions and hence the importance not only of enhancing US capabilities, but, presumably, of selling advanced weapons to the island, as well.
Moreover, the leak comes at a critical moment in the administration's deliberations about the long-pending arms package for Taiwan, whose approval Wolfowitz and other advocates had hoped would have been forthcoming last week.
Taiwan is hoping to acquire seven weapons systems from the US as part of the package - anti-tank missiles, Apache helicopters, Patriot PAC-3 missile batteries, diesel-electric submarines, P3C Orion anti-submarine aircraft, sea-launched Harpoon anti-ship missiles and Black Eagle helicopters.
Wolfowitz in July virtually assured his friends at the Business Council in Taipei that Bush would go ahead with the package some time after the Beijing Summer Olympic Games in August. But according to Chris Nelson of the Nelson Report, a recent study by a Naval War College expert - which has gained considerable attention from administration policymakers - argues that much in the pending package will do very little, if anything, to improve Taiwan's ability to resist an attack by Beijing.
The study proposed an alternative "porcupine" strategy for defending the island which, it noted, would likely be strongly opposed by "the arms manufacturers who stand to benefit form the sale of aircraft, ships, and supporting systems to Taiwan" that are included in the current package.
Needless to say, some of those same arms manufacturers were behind Wolfowitz's selection as the (well-paid) chairman of the Business Council, and they would be sorely disappointed if his influence and connections with the administration did not yield the anticipated dividends (see Paul Wolfowitz: A man to keep a close eye on, March 21, 2001).
Nelson reported on Wednesday that the arms manufacturers have indeed won the day and that most, if not all of the package will be approved by the White House.
But the episode still raises important questions, particularly in light of the current election debate over the influence of lobbyists in Washington policy-making, about conflicts of interests.
Once again, Wolfowitz's actions suggest that his grasp of the concept is pretty shaky. On the other hand, the presence of senior executives from Lockheed (a huge beneficiary of the current package) and Boeing, among other arms contractors heavily invested in missile defense and space weapons, on the State Department's board indicate that Wolfowitz is not exactly alone in that respect. (Gertz reports that Allison Fortier, a Lockheed vice president, served on the task force that produced the draft.) "It's basically functioning like a lobbyist group," Nelson told me.
This article is taken from Jim Lobe's blog on US foreign policy, and particularly the neo-conservative influence in the Bush administration. Lobe is the Washington Bureau Chief of the international news agency Inter Press Service.