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Was Presidential Helicopter Deal a Pay Off for Italy's Pre-War Yellow-Cake Intel Role?

New America Media, Special Investigative Report, Jeffrey Klein and Paolo Pontoniere Posted: May 11, 2006

SAN FRANCISCO-Italian journalists and parliamentary investigators are hot on the trail of how pre-Iraq War Italian forged documents were delivered to the White House alleging that Saddam Hussein had obtained yellowcake uranium ore from Niger.

New links implicating Italian companies and individuals with then-Prime Minister Silvio Berlusconi now raise the question of whether Berlusconi received a payback as part of the deal -- namely, a Pentagon contract to build the U.S. president's special fleet of helicopters.

The yellowcake story in the United States has long been linked to the ongoing investigation into the outing of CIA agent Valerie Plame. Plame's diplomat husband Joe Wilson had probed the Niger connection and concluded that the Bush administration was twisting intelligence reports to fit its case for war.

Two people -- Carlo Rossella and Giovanni Castellaneta -- are at the center of Italian inquiries into the transfer of the yellowcake dossier from the SISMI, the Italian intelligence agency, to the White House.

According to the influential Rome-based La Repubblica, Carlo Rossella -- at the time editor-in-chief of Berlusconi's Panorama, one of Italy's largest weeklies -- delivered the dossier in the autumn of 2002 to the U.S. Embassy in Rome. Rossella's actions were puzzling because its top investigative reporter, Elisabetta Burba, was in the midst of discounting the file as a gross falsification.

Besides directing Panorama, Rossella -- once a foreign policy advisor to Berlusconi -- had been considered a candidate to direct RAI, Italy's state broadcasting system.

A more direct connection to Berlusconi is Giovanni Castellaneta, current Italian ambassador to the United States and Berlusconi's former national security adviser.

According to La Repubblica, Nicola Pollari, the head of SISMI, tried to dispel the CIA's misgivings about the authenticity of the yellowcake papers and failed. Castellaneta then arranged for Pollari to bypass the CIA and meet directly with then-National Security Advisor Condoleezza Rice and Stephen Hadley, Rice's chief deputy and currently national security advisor. The meeting took place on Sept. 9, 2002, in the White House, and has been confirmed by White House officials.

It was after this meeting that the story of the yellowcake uranium ore from Niger took off. In late September, CIA director George Tenet and Secretary of State Colin Powell cited the attempted yellowcake purchase from Niger in separate classified hearings before the Senate Foreign Relations Committee. In advance of President Bush's January 2003 State of the Union address, Hadley asked for the CIA's approval to include the Niger claim in the president's speech. Even though the CIA had explicitly excised the claim from a prior address given by the president and now repeated its misgivings to Hadley, Bush ended up saying in his speech that, "Saddam Hussein recently sought significant quantities of uranium from Africa." Bush attributed this intelligence to the British government. No mention was made of any connections between the Italian and American governments.

What did the Berlusconi government get in return for providing the Bush administration with a convenient "smoking gun" to attack Iraq? At the end of the yellowcake trail may be the prestigious contract an Italian firm won to manufacture Marine One -- the fleet of presidential helicopters. In January 2005, the U.S. Navy awarded the contract for the construction of 23 new Marine One helicopters to AgustaWestland. Marketing itself as an Anglo-Italian firm, AgustaWestland is wholly owned by Finmeccanica, Italy's largest defense conglomerate.

The choice of AgustaWestland for Marine One surprised most industry observers because U.S.-based Sikorsky Aircraft Corp. was the heavy favorite. Sikorsky patented the first helicopter design in 1939 and built virtually every president's helicopter since 1957. President Eisenhower regularly flew in a Sikorsky to his Gettysburg farm, and the Sikorsky that Nixon boarded when he resigned from the White House is now being restored for permanent display at the Nixon Library.

Not only did Sikorsky lose, but it lost to a foreign firm that has no problems selling its helicopters to the United States' adversaries. (See side bar, "Choppers for Sale, to Everyone")

As with the yellowcake dossier, the key figure in the Marine One contract is Gianni Castellaneta. When the Pentagon put the Marine One contract out for bid, Castellaneta was deputy chair of Finmeccanica and national security advisor to Prime Minister Berlusconi. By the time the contract was awarded, Castellaneta had been appointed Italy's ambassador to the United States.

Castellaneta proudly told U.S. Italia Weekly, "At noon President Bush received me for the official delivery of credentials. He didn't make me wait a single day. An exceptional courtesy."

Castellaneta's role in obtaining the Marine One contract has never been examined before, but according to Affari Italiani, Italy's first online daily, and disarmo.org, an Italian arms control advocacy group, Castellaneta has long managed the most sensitive dossiers in U.S.-Italian bilateral relations.

When Ambassador Castellaneta was asked about his role, the embassy press officer, Luca Ferrari said, "In his capacity as ambassador, representing all of Italy in the United States, the ambassador does not care to speak any more about Finmeccanica."

"Castellaneta's double role as ambassador and corporate businessman has come under scrutiny at various junctures," says Carlo Bonini, an Italian journalist who has extensively investigated the yellowcake affair. "His duality has inspired animated debate in the Italian Parliament, but due to the absolute majority of seats held by Berlusconi, the matter could never be fully discussed."

With center-left opposition leader Romano Prodi taking the helm of Italy's new government, the newly reconfigured Parliament is expected to open a probe into the "Yellowcake One" affair. For Italians, the main question is whether Berlusconi personally profited from the helicopter deal. For Americans, the question is whether the Bush administration paid the Italians back for providing the false intelligence that helped justify launching the war in Iraq.


SIDEBAR

choppersLong before the Dubai ports controversy raised security concerns about foreign management of U.S. ports, the Bush administration awarded a $1.6 billion contract to an Italian firm to build new Marine One helicopters -- the specialized fleet that carries the president. Ultimately, the contract will be worth $6.1 billion -- $3.6 billion for 23 Marine Ones and the rest for research and development. Though the deal has eluded serious media scrutiny, it could become more explosive since the Italian firm, Finmeccanica, subsequently sold helicopters to Libya and China, and has sought a deal with Iran.

In February of 2005, just a month after it was awarded the Marine One contract, Finmeccanica was pitching its helicopters in Iran, at Kish's annual international air show. (See http://www.iran-airshow.com/exhibitors.htm) When questioned about this by the Connecticut Post, a spokeswoman for AgustaWestland, Finmecannica's wholly owned subsidiary charged with building the new Marine One, said the company was not involved in the air show and had not sold anything to Iran in the last 20 years. But Steven Bryen, the president of Finmeccanica in the United States, conceded to NBC's Lisa Meyers that Finmeccanica does business with Iran. Why? "In Europe, they don't call it the enemy," Bryen said.

"Analyzing the defense industry for nearly 30 years, I try to stay calm and nonpartisan," says John Pike, head of GlobalSecurity.org, a nonprofit think tank based in Virginia near the Pentagon. "But the Finmeccanica deal raised every hair on my neck. Apparently no one else sees the irony in a foreign military contractor building Marine One and Ayatollah One."

In January of this year, Finemeccanica sold 10 helicopters for about $100 million to the Libyan military. AgustaWestland itself has formed a joint venture company with Chinese Jiangxi Changhe Aviation Industries Company to produce 10 to 15 helicopters a year.

Few industry observers expected the Rome-based company to win the contract, given the widespread expectation the White House would never allow a foreign-designed helicopter to serve as Marine One. In 2003, the Pentagon conducted its first open bidding to manufacture the Marine One since 1970. Sikorsky offered a military version of its new S-92, a helicopter that makes extensive use of lightweight composite materials and is designed to meet recent safety standards. These should have been competitive advantages since the current Marine Ones, both Sikorsky and Finmeccanica agree, are now so weighed down with security equipment that they are less safe when lifting off. Certainly the business stakes for Sikorsky couldn't have been clearer. George David, chief executive of United Technologies, the parent company of Sikorsky, told industry analysts that getting the contract for Marine One was "win or drop dead as far as we are concerned."

Before focusing on aerospace and defense, Finmeccanica was "an industrial basket case," according to the British publication Flight International. Its winning helicopter was marketed to the Pentagon as a proven warhorse. The Engineer, another British trade journal, described the chopper as "a re-branded version of the EH-101, already in use in the UK, Italy, Japan and Canada and firmly European in heritage." The Pentagon will pay Finmeccanica $2.6 billion to upgrade the EH-101s into Marine Ones, thus providing expensive and potentially sensitive knowledge that Finmeccanica can use for its sales to other countries.

Gino Colangelo, a public relations representative for Finmeccanica USA, told NAM the firm won the contract solely on the basis of the quality of the product.

While seeking the contract, Finmeccanica's helicopter subsidiary, AgustaWestland, positioned itself as an Anglo-Italian firm even after it had bought out Britain's remaining ownership in the firm. AgustaWestland also partnered with U.S. companies Bell Helicopter and Lockheed Martin; although Lockheed doesn't make helicopters, it acted as the lead partner on the bid.

As part of its marketing campaign, Finmeccanica ran an eight-page advertising section in Aviation Week and Space Technology that sported a smiling Bell Helicopter employee below the headline: "Built By Americans Like Robert Stockard." The ad claimed that Stockard, a former Air Force master sergeant now working in Amarillo, Texas, was "one of thousands of Americans across 41 states who will help make the helicopter."

When finally announcing the winner in January 2005, the Pentagon stressed that two-thirds of the work on Marine One would be performed in the United States. But today, with no press notice, Finmeccanica's first Marine Ones are primarily being constructed in Somerset, England on an accelerated schedule. Company officials told London's Evening Standard that President Bush has said to them, "I want to see one of those new machines on the White House lawn before I leave office."

Jeffrey Klein, a founding editor of Mother Jones, freelances for magazines, radio and television. Paolo Pontoniere is a New America Media European commentator.

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