Kuwaiti partnership is bust, not bonanza, for Md. businesses

February 22, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

Two years ago, with Kuwait in shambles and under the choking clouds of Iraqi-set oil-well fires, it was widely felt that the grateful Kuwaitis would provide huge contracts to U.S. firms for the enormous job of rebuilding their country. And because of special efforts by Gov. William Donald Schaefer, Marylanders were told their state's companies would be at the head of the line.

But there was no line, no business whatsoever for Maryland and no Kuwait bonanza.

And on Friday, having all but abandoned efforts to help rebuild Kuwait, Maryland agreed to a Baltimore Circuit Court order to release the secret document drawn up by the state and the Kuwaiti government laying out terms of their business relationship.

The eight-page understanding was signed in May 1991 by Governor Schaefer and Kuwaiti Ambassador Saud Nasir al-Sabah, two months after the Persian Gulf war had ended. It was designed to put Maryland and companies located in the state out in front of the race to win a big share of the estimated $100 billion in Kuwaiti reconstruction contracts.

Despite well-publicized trips by the governor and his staff members to Kuwait and a high-profile partnership that at one time had the participation of 900 Maryland companies, the state has not signed a single contract to do business there. No new private business by Maryland companies in Kuwait has ever been attributed to the effort either.

"It was an opportunity that never panned out," acknowledged Mark L. Wasserman, secretary of Maryland Department of Economic and Employment Development.

U.S. Rep. Helen Delich Bentley, R-Md., is particularly bitter over how things turned out.

Mrs. Bentley had introduced a resolution in Congress noting that because U.S. troops had done the bulk of the fighting to liberate Kuwait, U.S. companies deserved a big share of the contracts to rebuild the Persian Gulf nation.

Mrs. Bentley said she doesn't know of a single Maryland company that has profitted from the reconstruction. On the contrary, she said, her office is working to help one company that claims it was bilked out of $100,000 in its attempt to do business with Kuwait.

She declined to identify the company or give specifics of the business deal but said it involved someone in Kuwait "cashing a letter of credit and keeping the money."

"My opinion is that this whole Kuwaiti situation turned out bad," Mrs. Bentley said. "U.S. businesses got stung all around. The Kuwaiti people and the government just went their merry way once they got their country back. There was no special consideration given to U.S. or Maryland companies.

"As far as I'm concerned, we should not lift a finger to ever help Kuwait again," she said, stressing that this was her personal opinion.

Schaefer's controversial visit

Prospects for a business bonanza from Maryland's "special" relationship with Kuwait were bandied about even before Governor Schaefer signed the trade accord in May 1991.

At the time of his trip the previous March to see the war-torn nation, Mr. Schaefer had been sharply criticized by Maryland House of Representatives Speaker R. Clayton Mitchell Jr., D-Kent, and Senate President Thomas V. Mike Miller Jr., D-Prince George's. They questioned the value of the trip and said the governor should have stayed in Maryland during a crucial period of the state's annual legislative session.

Later in the spring of 1991, the Kuwait-Maryland Partnership said it was negotiating on business contracts with Kuwait worth more than $36 million. None was ever signed.

The partnership itself incurred some $200,000 in start-up costs that were paid by private companies. It could not be learned how much money the state spent directly on the Kuwait trade initiative or on related trips by the governor and staff members.

Hopes for an inside track in rebuilding Kuwait were kindled by a humanitarian medical effort launched in Maryland to aid the Kuwaitis, who were deprived of medical services during the Iraqi occupation of their country. A 40-member medical team headed by Dr. James A. D'Orta, a specialist in emergency medicine at Franklin Square Hospital, went to Kuwait in mid-May 1991.

Mr. Sabah, the Kuwaiti ambassador, said he "was really touched" by the offer of medical help. "We wish to give as much work as we can to companies in Maryland in rebuilding Kuwait," he said before signing the agreement.

Maryland was to be given preferential treatment in supplying goods and services to Kuwait, state and Kuwaiti officials indicated. It was to serve as a one-stop shop where Kuwait could cut through the red tape and quickly come up with what ever it needed to begin rebuilding.

"We're going to deliver, through the port of Baltimore and Baltimore-Washington International Airport, food, appliances, building materials, everything they need," the governor said then.

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