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Tuesday, December 30, 2008

Unrest caused by Bad Economy may require Military Action

By Diana Washington Valdez
El Paso Times

EL PASO -- A U.S. Army War College report warns an economic crisis in the United States could lead to massive civil unrest and the need to call on the military to restore order.

Retired Army Lt. Col. Nathan Freir wrote the report "Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development," which the Army think tank in Carlisle, Pa., recently released.

"Widespread civil violence inside the United States would force the defense establishment to reorient priorities ... to defend basic domestic order and human security," the report said, in case of "unforeseen economic collapse," "pervasive public health emergencies," and "catastrophic natural and human disasters," among other possible crises.

The report also suggests the new (Barack Obama) administration could face a "strategic shock" within the first eight months in office.

Fort Bliss spokeswoman Jean Offutt said the Army post is not involved in any recent talks about a potential military response to civil unrest.

The report become a hot Internet item after Phoenix police told the Phoenix Business Journal they're prepared to deal with such an event, and the International Monetary Fund's managing director, Dominique Strauss-Khan, said social unrest could spread to advanced countries if the global economic crisis worsens.

Javier Sambrano, spokesman for the El Paso Police Department, said city police have trained for years so they can address any contingency, but not with the military.

"The police (department) trains on an ongoing basis as part of its Mobile Field Force Training," Sambrano said. "As a result, the police will be able to respond to emergency situations, such as looting or a big civil unrest. The police (department) does not train with soldiers."

Earlier this year, Pentagon officials said as many as 20,000 soldiers under the U.S. Northern Command (NORTHCOM) will be trained within the next three years to work with civilian law enforcement in homeland security.

Joint Task Force-North, a joint command at Biggs Army Airfield, which conducts surveillance and intelligence along the border, comes under NORTHCOM. No one was available at JTF-North to comment on the Army War College's report. NORTHCOM was created after the 9-11 attacks to coordinate homeland security efforts.

Soldiers under the former Joint Task Force-6 (now JTF-North) supported the Border Patrol in El Paso with its drug-interdiction operations.

In case civilian authorities request help or become overwhelmed, El Paso has several National Guard and military reserve units that can be called on. In 1992, National Guard and active Marine and Army units were deployed to help police control riots and looting in Los Angeles.

Charles Boehmer, political science professor at the University of Texas at El Paso, was skeptical about the Army War College report.

"The military was not called out during the Great Depression, and I don't think our economic problems are as bad as they were then," he said. "The military always has contingency plans. It's a think tank's job to come up with scenarios, but that doesn't mean it represents an active interest on the part of the (Pentagon)."

Diana Washington Valdez may be reached at; 546-6140.

Read the report:*



Thursday, December 25, 2008


The Greatest Story Ever Told

As far back as 10 thousand B.C.E., history is abundant with carvings [M] and writings reflecting people's respect and adoration for the Sun [S1]. And it is simple to understand why as every morning the sun would rise, bringing vision, warmth, and security, saving man from the cold, blind, predator-filled darkness of night. Without it, the cultures understood, the crops would not grow, and life on the planet would not survive. These realities made the sun the most adored object of all time.[M] Likewise, they were also very aware of the stars.[M] The tracking of the stars allowed them to recognize and anticipate events which occurred over long periods of time, such as eclipses and full moons.[M] They in turn catalogued celestial groups into what we know today as constellations.[S2]

The cross of the Zodiac, one of the oldest conceptual images in human history. [M] It reflects the sun as it figuratively passes through the 12 major constellations over the course of a year. It also reflects the 12 months of the year, the 4 seasons, and the solstices and equinoxes [S3] . The term Zodiac relates to the fact that constellations were anthropomorphized, or personified, as figures, or animals.[S4] [M]

In other words, the early civilizations did not just follow the sun and stars, they personified them with elaborate myths involving their movements and relationships. [S5] [M] The sun, with its life-giving and -saving qualities was personified as a representative of the unseen creator or god...[M]"God's Sun,"[M] the light of the world, the savior of human kind.[S6] Likewise, the 12 constellations represented places of travel for God's Sun and were identified by names, usually representing elements of nature that happened during that period of time. For example, Aquarius, the water bearer, who brings the Spring rains.[S7] [M] [D]

Horus.[M] He is the Sun God of Egypt of around 3000 BC [S8] [D]. He is the sun, anthropomorphized, and his life is a series of allegorical myths involving the sun's movement in the sky. [S9] [S10] [M] From the ancient hieroglyphics in Egypt, we know much about this solar messiah. For instance, Horus, being the sun, or the light, had an enemy known as Set and Set [D] was the personification of the darkness or night .[M] [S11] And, metaphorically speaking, every morning Horus would win the battle against Set - while in the evening, Set would conquer Horus and send him into the underworld. [S12] [S13] It is important to note that "dark vs. light" or "good vs. evil" is one of the most ubiquitous mythological dualities ever known and is still expressed on many levels to this day.

Broadly speaking, the story of Horus is as follows:
Horus was born on December 25th [S14] [S15] of the virgin Isis-Meri.[S16] [S17] [S18] [D] [M]

His birth was accompanied by a star in the east [S19], which in turn, three kings followed to locate and adorn the new-born savior [M] [S20] [S21]

At the age of 12, he was a prodigal child teacher, and at the age of 30 [S22] [S23] he was baptized by a figure known as Anup [M] and thus began his ministry[S24] [M].

Horus had 12 disciples[S25] he traveled about with, performing miracles[S26] [S27]such as healing the sick[S28] and walking on water[S29].

Horus was known by many gestural names such as The Truth, The Light, God's Annointed Son, The Good Shepherd, The Lamb of God, and many others[S30] [S31].

After being betrayed by Typhon[S32], Horus was crucified[S33] [S34], buried for 3 days[S35], and thus, resurrected.[S36] [S37] [M].

These attributes of Horus, whether original or not, seem to permeate in many cultures of the world, for many other gods are found to have the same general mythological structure.

- Attis, of Phyrigia, born of the virgin Nana on December 25th, crucified, placed in a tomb and after 3 days, was resurrected.[S38] [S39] [S40] [S41] [S42] [S43] [M] [D]

- Krishna, of India, born of the virgin Devaki with a star in the east signaling his coming, performed miracles with his disciples, and upon his death was resurrected.[S44] [S45] [S46] [S47] [S48] [M] [M2] [D]

- Dionysus of Greece, born of a virgin on December 25th, was a traveling teacher who performed miracles such as turning water into wine, he was referred to as the "King of Kings," "God's Only Begotten Son," "The Alpha and Omega," and many others, and upon his death, he was resurrected.[S49] [S50] [S51] [S52] [S53] [M]

- Mithra, of Persia, born of a virgin on December 25th, he had 12 disciples and performed miracles, and upon his death was buried for 3 days and thus resurrected, he was also referred to as "The Truth," "The Light," and many others. Interestingly, the sacred day of worship of Mithra was Sunday.[S54] [S55] [S56] [S57] [S58] [M]
The fact of the matter is there are numerous saviors, from different periods, from all over the world, which subscribe to these general characteristics.

The question remains: why these attributes, why the virgin birth on December 25th, why dead for three days and the inevitable resurrection, why 12 disciples or followers? [M] To find out, let's examine the most recent of the solar messiahs.

Jesus Christ was born of the virgin Mary on December 25th [D] in Bethlehem, his birth was announced by a star in the east, which three kings or magi followed to locate and adorn the new savior.[D] He was a child teacher at 12, at the age of 30 he was baptized by John the Baptist, and thus began his ministry. Jesus had 12 disciples which he traveled about with performing miracles such as healing the sick, walking on water, raising the dead, he was also known as the "King of Kings," the "Son of God," the "Light of the World," the "Alpha and Omega," the "Lamb of God," and many others. After being betrayed by his disciple Judas and sold for 30 pieces of silver, he was crucified, placed in a tomb and after 3 days was resurrected and ascended into Heaven.[S59]

First of all, the birth sequence is completely astrological. The star in the east is Sirius, the brightest star in the night sky, which, on December 24th, aligns with the 3 brightest stars in Orion's Belt. [S60] [M] These 3 bright stars are called today what they were called in ancient times: The Three Kings.[S61] [S62] The Three Kings and the brightest star, Sirius, all point to the place of the sunrise on December 25th.[S63] [M] This is why the Three Kings "follow" the star in the east, in order to locate the sunrise -- the birth of the sun.[S64] [M]

The Virgin Mary is the constellation Virgo, [S65] also known as Virgo the Virgin. Virgo in Latin means virgin. The ancient glyph for Virgo is the altered "m". This is why Mary along with other virgin mothers, such as Adonis's mother Myrrha [S66], or Buddha's mother Maya [S67] begin with an M.[S68] [M] Virgo is also referred to as the House of Bread [S69] [S70], and the representation of Virgo is a virgin holding a sheaf of wheat. This House of Bread and its symbol of wheat represents August and September, the time of harvest. [D] In turn, Bethlehem, in fact, literally translates to "house of bread". [M] [S71] Bethlehem is thus a reference to the constellation Virgo , a place in the sky, not on Earth.[M] [S72]

There is another very interesting phenomenon that occurs around December 25th, or the winter solstice. From the summer solstice to the winter solstice, the days become shorter and colder.

From the perspective of the northern hemisphere, the sun appears to move south and get smaller and more scarce. The shortening of the days and the expiration of the crops when approaching the winter solstice symbolized the process of death to the ancients. It was the death of the Sun. [S73] By December 22nd, the Sun's demise was fully realized, for the Sun, having moved south continually for 6 months, makes it to it's lowest point in the sky. Here a curious thing occurs: the Sun stops moving south, at least perceivably, for 3 days.[S74] [M] During this 3 day pause, the Sun resides in the vicinity of the Southern Cross, or Crux, constellation.[S75] [S76] [M] And after this time on December 25th, the Sun moves 1 degree, this time north, foreshadowing longer days, warmth, and Spring.[S77] And thus it was said: the Sun died on the cross, [D] was dead for 3 days, only to be resurrected or born again.[S78] [S79]This is why Jesus and numerous other Sun Gods share the crucifixion, 3-day death, and resurrection concept.
[S80] [M] It is the Sun's transition period before it shifts its direction back into the Northern Hemisphere, bringing Spring, and thus salvation.[S81] [S82] [M]

However, they did not celebrate the resurrection of the Sun until the spring equinox, or Easter.

This is because at the spring equinox, the Sun officially overpowers the evil darkness, as daytime thereafter becomes longer in duration than night, and the revitalizing conditions of spring emerge.[M] [S83]

Now, probably the most obvious of all the astrological symbolism around Jesus regards the 12 disciples. They are simply the 12 constellations of the Zodiac, which Jesus, being the Sun, travels about with. [S84] [S85] [S86] [S87] [M]

In fact, the number 12 is replete throughout the Bible. [M] This text has more to do with astrology than anything else.

Coming back to the cross of the Zodiac, the figurative life of the Sun, this was not just an artistic expression or tool to track the Sun's movements. It was also a Pagan spiritual symbol, [S88] the shorthand of which looked like this. [S89] This is not a symbol of Christianity. [M] It is a Pagan adaptation of the cross of the Zodiac. [S90] [S91] This is why Jesus in early occult art is always shown with his head on the cross, for Jesus is the Sun, the Sun of God, the Light of the World, [S92] the Risen Savior, [S93] who will "come again,"[S94] as it does every morning, the Glory of God [S95] who defends against the works of darkness,[S96] as he is "born again" [S97] every morning, and can be seen "coming in the clouds,"[S98] "up in Heaven,"[S99]with his "Crown of Thorns,"[S100] or, sun rays.

Now, of the many astrological-astronomical metaphors in the Bible, one of the most important has to do with the ages. Throughout the scripture there are numerous references to the "Age."

In order to understand this, we need to be familiar with the phenomenon known as the precession of the equinoxes. The ancient Egyptians along with cultures long before them recognized that approximately every 2150 [D] years the sunrise on the morning of the spring equinox would occur at a different sign of the Zodiac. [M] This has to do with a slow angular wobble that the Earth maintains as it rotates on it's axis.It is called a precession because the constellations go backwards, rather than through the normal yearly cycle. [S101] The amount of time that it takes for the precession to go through all 12 signs is roughly 25,765 years. [S102] This is also called the "Great Year," [S103] and ancient societies were very aware of this. They referred to each 2150 year period as an "age." From 4300 b.c. to 2150 b.c., it was the Age of Taurus, the Bull. From 2150 b.c. to 1 a.d., it was the Age of Aries, the Ram, and from 1 a.d. to 2150 a.d. it is the Age of Pisces, the age we are still in to this day, and in and around 2150, we will enter the new age: the Age of Aquarius. [S104] [S105]

Now, the Bible reflects, broadly speaking, a symbolic movement through 3 ages, while foreshadowing a 4th. In the Old Testament when Moses comes down Mount Sinai with the 10 Commandments, he is very upset to see his people worshiping a golden bull calf.[S106] In fact, he shattered the stone tablets and instructed his people to kill each other in order to purify themselves. [S107] Most Biblical scholars would attribute this anger to the fact that the Israelites were worshiping a false idol, [S108] or something to that effect. The reality is that the golden bull is Taurus the Bull, and Moses represents the new Age of Aries the Ram. [S109] [M] This is why Jews even today still blow the Ram's horn. [S110] [M] Moses represents the new Age of Aries, [S111] and upon the new age, everyone must shed the old age. Other deities mark these transitions as well, a pre-Christian god who kills the bull, in the same symbology. [S112] [S113] [M]

Now Jesus is the figure who ushers in the age following Aries, the Age of Pisces the Two Fish.[S114] [S115] [M] Fish symbolism is very abundant in the New Testament. Jesus feeds 5000 people with bread and "2 fish." [S116] When he begins his ministry walking along Galilei, he befriends 2 fisherman, who follow him. [S117] [M] And I think we've all seen the Jesus-fish on the backs of people's cars. Little do they know what it actually means. It is a Pagan astrological symbolism for the Sun's Kingdom during the Age of Pisces.[S118] [M] Also, Jesus' assumed birth date is essentially the start of this age.

At Luke 22:10 when Jesus is asked by his disciples where the next passover will be, Jesus replied: "Behold, when ye are entered into the city, there shall a man meet you bearing a pitcher of water... follow him into the house where he entereth in." This scripture is by far one of the most revealing of all the astrological references. The man bearing a pitcher of water is Aquarius, the water-bearer, who is always pictured as a man pouring out a pitcher of water. [S119] He represents the age after Pisces, and when the Sun (God's Sun) leaves the Age of Pisces (Jesus), it will go into the House of Aquarius, as Aquarius follows Pisces in the precession of the equinoxes. Also Jesus is saying is that after the Age of Pisces will come the Age of Aquarius. [S120] [M]

Now, we have all heard about the end times and the end of the world. Apart from the cartoonish depictions in the Book of Revelation, the main source of this idea comes from Matthew 28:20, where Jesus says "I will be with you even to the end of the world." [S121] However, in King James Version, "world" is a mistranslation, among many mistranslations. The actual word being used is "aeon", which means "age." "I will be with you even to the end of the age." Which is true, as Jesus' Solar Piscean personification will end when the Sun enters the Age of Aquarius. [S122]

The entire concept of end times and the end of the world is a misinterpreted astrological allegory.[S123] [S124] [S125] [S126] [S127] [M] Let's tell that to the approximately 100 million people in America who believe the end of the world is coming.

Furthermore, the character of Jesus, a literary and astrological hybrid, is most explicitly a plagiarization of the Egyptian Sun-god Horus.[S128] [S129] [S130] [S131]For example, inscribed about 3500 years, on the walls of the Temple of Luxor in Egypt are images of the enunciation, the immaculate conception, the birth, and the adoration of Horus. [S132] The images begin with Thaw announcing to the virgin Isis that she will conceive Horus, then Nef the holy ghost impregnating the virgin, and then the virgin birth and the adoration.[S133] [S134] [M] This is exactly the story of Jesus' miracle conception. In fact, the literary similarities between the Egyptian religion and the Christian religion are staggering. [M] [S135]

And the plagiarism is continuous. The story of Noah and Noah's Ark is taken directly from tradition. The concept of a Great Flood is ubiquitous throughout the ancient world, with over 200 different cited claims in different periods and times. [S136] [S137] [M] However, one need look no further for a pre-Christian source than the Epic of Gilgamesh,[S138] [S139] written in 2600 b.c. This story talks of a Great Flood commanded by God, an Ark with saved animals upon it, and even the release and return of a dove, all held in common with the biblical story, among many other similarities.[S140] [M]

And then there is the plagiarized story of Moses. Upon Moses' birth, it is said that he was placed in a reed basket and set adrift in a river in order to avoid infanticide. He was later rescued by a daughter of royalty and raised by her as a Prince.[S141] This baby in a basket story was lifted directly from the myth of Sargon of Akkad of around 2250 b.c. Sargon was born, placed in a reed basket in order to avoid infanticide, and set adrift in a river. He was in turn rescued and raised by Akki, a royal mid-wife.[S142] [S143] [M]

Furthermore, Moses is known as the Law Giver, the giver of the Ten Commandments,[S144] the Mosaic Law. However, the idea of a Law being passed from God to a prophet on a mountain is also a very old motif. Moses is just a law giver in a long line of law givers in mythological history. [S145] In India, Manou was the great law giver. [S146] In Crete, Minos ascended Mount Dicta, where Zeus gave him the sacred laws. [S147] While in Egypt there was Mises, [S148] who carried stone tablets and upon them the laws of god were written.

And as far as the Ten Commandments, they are taken outright from Spell 125 of the Egyptian Book of the Dead. [S149] What the Book of the Dead phrased "I have not stolen" became "Thou shall not steal," "I have not killed" became "Thou shall not kill," "I have not told lies" became "Thou shall not bear false witness" and so forth. [S150] In fact, the Egyptian religion is likely the primary foundational basis for the Judeo-Christian theology. [M] Baptism, [S151] afterlife,[S152] final judgment, [S153] virgin birth [S154] and resurrection, [S155] crucifixion, [S156] the ark of the covenant, [S157]circumcision, [S158] [S159] saviors,[S160] holy communion, [S161] the great flood, [S162] Easter, [S163] Christmas [S164] [S165] , Passover, [S166] and many many more, are all attributes of Egyptian ideas, long predating Christianity and Judaism.

Justin Martyr, one of the first Christian historians and defenders, wrote: "When we say that he, Jesus Christ, our teacher, was produced without sexual union, was crucified and died, and rose again, and ascended into Heaven, we propound nothing different from what you believe regarding those who you esteem Sons of Jupiter." [S167] In a different writing, Justin Martyr said "He was born of a virgin, accept this in common with what you believe of Perseus." [S168] It's obvious that Justin and other early Christians knew how similar Christianity was to the Pagan religions. However, Justin had a solution. As far as he was concerned, the Devil did it. The Devil had the foresight to come before Christ, and create these characteristics in the Pagan world. [S169]

The Bible is nothing more than an astro-theological literary fold hybrid, just like nearly all religious myths before it. [S170] [S171] [S172] [S173] [S174]In fact, the aspect of transference, of one character's attributes to a new character, can be found within the book itself. In the Old Testament there's the story of Joseph. Joseph was a prototype for Jesus. Joseph was born of a miracle birth, [S175] Jesus was born of a miracle birth. [S176] Joseph was of 12 brothers, [S177] Jesus had 12 disciples. [S178] Joseph was sold for 20 pieces of silver, [S179]Jesus was sold for 30 pieces of silver. [S180] Brother "Judah" suggests the sale of Joseph, [S181] disciple "Judas" suggests the sale of Jesus. [S182] Joseph began his work at the age of 30, [S183]Jesus began his work at the age of 30. [S184] The parallels go on and on.

Furthermore, is there any non-Biblical historical evidence of any person, living with the name Jesus, the Son of Mary, who traveled about with 12 followers, healing people and the like? There are numerous historians who lived in and around the Mediterranean either during or soon after the assumed life of Jesus.[S185] How many of these historians document this figure? Not one.

However, to be fair, that doesn't mean defenders of the Historical Jesus haven't claimed the contrary. Four historians are typically referenced to justify Jesus's existence. Pliny the younger, Suetonius, Tacitus and the first three. [M] [S187] Each one of their entries consists of only a few sentences at best and only refer to the Christus or the Christ, which in fact is not name but a title. It means the "Anointed one" [S188] The fourth source is Josephus and this source has been proven to be a forgery for hundreds of years.[S189] Sadly, it is still cited as truth.

You would think that a guy who rose from the dead and ascended into Heaven for all eyes to see and performed the wealth of miracles acclaimed to him would have made it into the historical record. It didn't because once the evidence is weighed, there are very high odds that the figure known as Jesus, did not even exist.[S190] [S191] [S192] [S193]

The reality is, Jesus was the Solar Deity of the Gnostic Christian sect, [S194] [S195] [S196] and like all other Pagan gods, he was a mythical figure. It was the political establishment that sought to historize the Jesus figure for social control. By 325 a.d. in Rome, emperor Constantine convened the Council of Nicea. [S197] It was during this meeting that the politically motivated Christian Doctrines were established and thus began a long history of Christian bloodshed and spiritual fraud. And for the next 1600 years, the Vatican maintained a political stranglehold on all of Europe, leading to such joyous periods as the Dark Ages, along with enlightening events such as the Crusades, and the Inquisition.

Christianity, along with all other theistic belief systems, is the fraud of the age. It serves to detach the species from the natural world, and likewise, each other. It supports blind submission to authority. It reduces human responsibility to the effect that "God" controls everything, and in turn awful crimes can be justified in the name of Divine Pursuit. And most importantly, it empowers those who know the truth but use the myth to manipulate and control societies. The religious myth is the most powerful device ever created, and serves as the psychological soil upon which other myths can flourish

Sources & References:

Wednesday, December 24, 2008

Russian arms suspect claims US set-up

A suspected Russian arms dealer claimed he had been framed by the US to damage Russia's relations with Thailand.

By Stephen Fidler in London
Financial Times of London
December 23 2008

Viktor Bout, 41, a former military officer, who faces charges of conspiring to sell weapons to terrorists, is fighting extradition to the US.

He was arrested in a Bangkok hotel in March after a "sting" operation mounted by the US Drug Enforcement Administration and including the Thai police.

According to Agence France-Presse, Mr Bout told the court: "I was framed."

He added: "I have done no crime, I have done no terrorist act. They have framed me because the US does not want relations between Thailand and Russia to develop more."

The US is seeking his extradition to face charges before a New York court, along with Andrew Smulian, an alleged accomplice. Among other things, it is alleged that they conspired to sell millions of dollars worth of weapons to the Revolutionary Armed Forces of Colombia (Farc), to be used to kill Americans in the South American state.

The weapons Mr Bout allegedly planned to sell included surface-to-air missile systems, armourpiercing rocket launchers, AK-47 automatic rifles, anti-personnel landmines, plastic explosives and unmanned aerial vehicles. He faces a maximum sentence of life imprisonment.

The US indictment claims he assembled a fleet of aircraft capable of transporting weapons and military equipment around the world, but used an international network of front companies that often delivered lawful goods.

According to AFP, when asked by his lawyer if he had sold arms to Farc, he denied involvement: "It's not true. I have never met anyone from Farc. I have never been to Colombia."

Mr Bout has been known as the "merchant of death" after he was so called by Peter Hain, who was UK minister for Africa, in 2000. He was placed in 2004 by the US Treasury's Office of Foreign Assets Control on the specially designated nationals list, which forbids transactions between him and US nationals.

Mr Smulian, his supposed associate, allegedly told a DEA informant that Mr Bout had $6bn (£4bn) in assets frozen around the world following claims about his alleged arms trafficking activities in United Nations reports.

Thailand has been sensitive to suggestions that it is too amenable to US pressure after human rights organisations suggested its government was complicit in the US programme of "extraordinary rendition" in which terrorist suspects were seized and transported to third countries for interrogation.

Copyright The Financial Times Limited 2008


The world according to Dick Cheney

International Herald Tribune
Dec. 23, 2008

Vice President Dick Cheney has a parting message for Americans: They should quit whining about all the things he and President Bush did to undermine the rule of law, erode the balance of powers between the White House and Congress, abuse prisoners and spy illegally on Americans. After all, he said, Franklin D. Roosevelt and Abraham Lincoln did worse than that.

So Cheney and Bush managed to stop short of repeating two of the most outrageous abuses of power in American history - Roosevelt's decision to force Japanese-Americans into camps and Lincoln's declaration of martial law to silence his critics? That's not exactly a lofty standard of behavior.

Then again, it must be exhausting to rewrite history as much as Cheney has done in a series of exit interviews where he has made those comments. It seems as if everything went just great in the Bush years.

The invasion of Iraq was exactly the right thing to do, not an unnecessary war that required misleading Americans. The post-invasion period was not bungled to the point where Americans got shot up by an insurgency that the Bush team failed to see building.

The horrors at Abu Ghraib were not the result of the Pentagon's decision to authorize abusive and illegal interrogation techniques, which Cheney endorsed. And only three men were subjected to waterboarding. (Future truth commissions take note.)

In Cheney's reality, the crippling budget deficit was caused mainly by fighting two wars and by essential programs like "enhancing the security of our shipping container business."

Well, no. The Bush team's program to scan cargo for nuclear materials at air, land and sea ports has been mired in delays, cost overruns and questions about effectiveness.

As for the deficit, the Congressional Budget Office has said the Bush-Cheney tax cuts for the wealthy were the biggest reason that the budget went into the red.

Some of Cheney's comments were self-serving spin (as when The Washington Times helpfully prodded him to reveal that even though the world might have seen Bush as insensitive to the casualties of war, Cheney himself made a "secret" mission to comfort the families of the dead.)

Cheney was simply dishonest about Bush's decision to authorize spying on Americans' international calls without a warrant. He claimed the White House kept the Democratic and Republican congressional leadership fully briefed on the program starting in late 2001. He said he personally ran a meeting at which "they were unanimous, Republican and Democrat alike" that the program was essential and did not require further congressional involvement.

But in a July 17, 2003, letter to Cheney, Senator Jay Rockefeller, then vice chairman of the Senate Intelligence Committee, said he wanted to "reiterate" the concerns he expressed in "the meeting today." He said "the activities we discussed raise profound oversight issues."

Cheney mocked Vice President-elect Joseph Biden for saying that he does not intend to have his own "shadow government" in the White House. Cheney said it was up to Biden to decide if he wants "to diminish the office of vice president."

Based on Cheney's record and his standards for measuring these things, we're certain a little diminishing of that office would be good for the country.


Monday, December 22, 2008

The Death of Deep Throat and the Crisis of Journalism

By George Friedman

Mark Felt died last week at the age of 95. For those who don't recognize that name, Felt was the “Deep Throat” of Watergate fame. It was Felt who provided Bob Woodward and Carl Bernstein of The Washington Post with a flow of leaks about what had happened, how it happened and where to look for further corroboration on the break-in, the cover-up, and the financing of wrongdoing in the Nixon administration.

Woodward and Bernstein's exposé of Watergate has been seen as a high point of journalism, and their unwillingness to reveal Felt's identity until he revealed it himself three years ago has been seen as symbolic of the moral rectitude demanded of journalists.

In reality, the revelation of who Felt was raised serious questions about the accomplishments of Woodward and Bernstein, the actual price we all pay for journalistic ethics, and how for many years we did not know a critical dimension of the Watergate crisis. At a time when newspapers are in financial crisis and journalism is facing serious existential issues, Watergate always has been held up as a symbol of what journalism means for a democracy, revealing truths that others were unwilling to uncover and grapple with.

There is truth to this vision of journalism, but there is also a deep ambiguity, all built around Felt's role. This is therefore not an excursion into ancient history, but a consideration of two things. The first is how journalists become tools of various factions in political disputes. The second is the relationship between security and intelligence organizations and governments in a Democratic society.

Watergate was about the break-in at the Democratic National Committee headquarters in Washington. The break-in was carried out by a group of former CIA operatives controlled by individuals leading back to the White House. It was never proven that then-U.S. President Richard Nixon knew of the break-in, but we find it difficult to imagine that he didn't. In any case, the issue went beyond the break-in.

It went to the cover-up of the break-in and, more importantly, to the uses of money that financed the break-in and other activities. Numerous aides, including the attorney general of the United States, went to prison. Woodward and Bernstein, and their newspaper, The Washington Post, aggressively pursued the story from the summer of 1972 until Nixon's resignation. The episode has been seen as one of journalism's finest moments. It may have been, but that cannot be concluded until we consider Deep Throat more carefully.

Deep Throat Reconsidered

Mark Felt was deputy associate director of the FBI (No. 3 in bureau hierarchy) in May 1972, when longtime FBI Director J. Edgar Hoover died. Upon Hoover's death, Felt was second to Clyde Tolson, the longtime deputy and close friend to Hoover who by then was in failing health himself. Days after Hoover's death, Tolson left the bureau.

Felt expected to be named Hoover's successor, but Nixon passed him over, appointing L. Patrick Gray instead. In selecting Gray, Nixon was reaching outside the FBI for the first time in the 48 years since Hoover had taken over. But while Gray was formally acting director, the Senate never confirmed him, and as an outsider, he never really took effective control of the FBI. In a practical sense, Felt was in operational control of the FBI from the break-in at the Watergate in August 1972 until June 1973.

Nixon's motives in appointing Gray certainly involved increasing his control of the FBI, but several presidents before him had wanted this, too, including John F. Kennedy and Lyndon Johnson. Both of these presidents wanted Hoover gone for the same reason they were afraid to remove him: He knew too much. In Washington, as in every capital, knowing the weaknesses of powerful people is itself power -- and Hoover made it a point to know the weaknesses of everyone. He also made it a point to be useful to the powerful, increasing his overall value and his knowledge of the vulnerabilities of the powerful.

Hoover's death achieved what Kennedy and Johnson couldn't do. Nixon had no intention of allowing the FBI to continue as a self-enclosed organization outside the control of the presidency and everyone else. Thus, the idea that Mark Felt, a man completely loyal to Hoover and his legacy, would be selected to succeed Hoover is in retrospect the most unlikely outcome imaginable.

Felt saw Gray's selection as an unwelcome politicization of the FBI (by placing it under direct presidential control), an assault on the traditions created by Hoover and an insult to his memory, and a massive personal disappointment. Felt was thus a disgruntled employee at the highest level. He was also a senior official in an organization that traditionally had protected its interests in predictable ways. (By then formally the No. 2 figure in FBI, Felt effectively controlled the agency given Gray's inexperience and outsider status.)

The FBI identified its enemies, then used its vast knowledge of its enemies' wrongdoings in press leaks designed to be as devastating as possible. While carefully hiding the source of the information, it then watched the victim -- who was usually guilty as sin -- crumble. Felt, who himself was later convicted and pardoned for illegal wiretaps and break-ins, was not nearly as appalled by Nixon's crimes as by Nixon's decision to pass him over as head of the FBI. He merely set Hoover's playbook in motion.

Woodward and Bernstein were on the city desk of The Washington Post at the time. They were young (29 and 28), inexperienced and hungry. We do not know why Felt decided to use them as his conduit for leaks, but we would guess he sought these three characteristics -- as well as a newspaper with sufficient gravitas to gain notice. Felt obviously knew the two had been assigned to a local burglary, and he decided to leak what he knew to lead them where he wanted them to go. He used his knowledge to guide, and therefore control, their investigation.

Systematic Spying on the President

And now we come to the major point. For Felt to have been able to guide and control the young reporters' investigation, he needed to know a great deal of what the White House had done, going back quite far. He could not possibly have known all this simply through his personal investigations. His knowledge covered too many people, too many operations, and too much money in too many places simply to have been the product of one of his side hobbies.

The only way Felt could have the knowledge he did was if the FBI had been systematically spying on the White House, on the Committee to Re-elect the President and on all of the other elements involved in Watergate. Felt was not simply feeding information to Woodward and Bernstein; he was using the intelligence product emanating from a section of the FBI to shape The Washington Post's coverage.

Instead of passing what he knew to professional prosecutors at the Justice Department -- or if he did not trust them, to the House Judiciary Committee charged with investigating presidential wrongdoing -- Felt chose to leak the information to The Washington Post. He bet, or knew, that Post editor Ben Bradlee would allow Woodward and Bernstein to play the role Felt had selected for them. Woodward, Bernstein and Bradlee all knew who Deep Throat was. They worked with the operational head of the FBI to destroy Nixon, and then protected Felt and the FBI until Felt came forward.

In our view, Nixon was as guilty as sin of more things than were ever proven. Nevertheless, there is another side to this story. The FBI was carrying out espionage against the president of the United States, not for any later prosecution of Nixon for a specific crime (the spying had to have been going on well before the break-in), but to increase the FBI's control over Nixon.

Woodward, Bernstein and above all, Bradlee, knew what was going on. Woodward and Bernstein might have been young and naive, but Bradlee was an old Washington hand who knew exactly who Felt was, knew the FBI playbook and understood that Felt could not have played the role he did without a focused FBI operation against the president. Bradlee knew perfectly well that Woodward and Bernstein were not breaking the story, but were having it spoon-fed to them by a master. He knew that the president of the United States, guilty or not, was being destroyed by Hoover's jilted heir.

This was enormously important news. The Washington Post decided not to report it. The story of Deep Throat was well-known, but what lurked behind the identity of Deep Throat was not.

This was not a lone whistle-blower being protected by a courageous news organization; rather, it was a news organization being used by the FBI against the president, and a news organization that knew perfectly well that it was being used against the president. Protecting Deep Throat concealed not only an individual, but also the story of the FBI's role in destroying Nixon.

Again, Nixon's guilt is not in question. And the argument can be made that given John Mitchell's control of the Justice Department, Felt thought that going through channels was impossible (although the FBI was more intimidating to Mitchell than the other way around). But the fact remains that Deep Throat was the heir apparent to Hoover -- a man not averse to breaking the law in covert operations -- and Deep Throat clearly was drawing on broader resources in the FBI, resources that had to have been in place before Hoover's death and continued operating afterward.

Burying a Story to Get a Story

Until Felt came forward in 2005, not only were these things unknown, but The Washington Post was protecting them. Admittedly, the Post was in a difficult position. Without Felt's help, it would not have gotten the story. But the terms Felt set required that a huge piece of the story not be told.

The Washington Post created a morality play about an out-of-control government brought to heel by two young, enterprising journalists and a courageous newspaper. That simply wasn't what happened. Instead, it was about the FBI using The Washington Post to leak information to destroy the president, and The Washington Post willingly serving as the conduit for that information while withholding an essential dimension of the story by concealing Deep Throat's identity.

Journalists have celebrated the Post's role in bringing down the president for a generation. Even after the revelation of Deep Throat's identity in 2005, there was no serious soul-searching on the omission from the historical record. Without understanding the role played by Felt and the FBI in bringing Nixon down, Watergate cannot be understood completely. Woodward, Bernstein and Bradlee were willingly used by Felt to destroy Nixon.

The three acknowledged a secret source, but they did not reveal that the secret source was in operational control of the FBI. They did not reveal that the FBI was passing on the fruits of surveillance of the White House. They did not reveal the genesis of the fall of Nixon. They accepted the accolades while withholding an extraordinarily important fact, elevating their own role in the episode while distorting the actual dynamic of Nixon's fall.

Absent any widespread reconsideration of the Post's actions during Watergate in the three years since Felt's identity became known, the press in Washington continues to serve as a conduit for leaks of secret information. They publish this information while protecting the leakers, and therefore the leakers' motives. Rather than being a venue for the neutral reporting of events, journalism thus becomes the arena in which political power plays are executed.

What appears to be enterprising journalism is in fact a symbiotic relationship between journalists and government factions. It may be the best path journalists have for acquiring secrets, but it creates a very partial record of events -- especially since the origin of a leak frequently is much more important to the public than the leak itself.

The Felt experience is part of an ongoing story in which journalists' guarantees of anonymity to sources allow leakers to control the news process. Protecting Deep Throat's identity kept us from understanding the full dynamic of Watergate.

We did not know that Deep Throat was running the FBI, we did not know the FBI was conducting surveillance on the White House, and we did not know that the Watergate scandal emerged not by dint of enterprising journalism, but because Felt had selected Woodward and Bernstein as his vehicle to bring Nixon down. And we did not know that the editor of The Washington Post allowed this to happen. We had a profoundly defective picture of the situation, as defective as the idea that Bob Woodward looks like Robert Redford.

Finding the truth of events containing secrets is always difficult, as we know all too well. There is no simple solution to this quandary. In intelligence, we dream of the well-placed source who will reveal important things to us. But we also are aware that the information provided is only the beginning of the story. The rest of the story involves the source's motivation, and frequently that motivation is more important than the information provided. Understanding a source's motivation is essential both to good intelligence and to journalism. In this case, keeping secret the source kept an entire -- and critical -- dimension of Watergate hidden for a generation.

Whatever crimes Nixon committed, the FBI had spied on the president and leaked what it knew to The Washington Post in order to destroy him. The editor of The Washington Post knew that, as did Woodward and Bernstein. We do not begrudge them their prizes and accolades, but it would have been useful to know who handed them the story. In many ways, that story is as interesting as the one about all the president's men.

This report may be forwarded or republished on your website with attribution to

Copyright 2008 Stratfor.

Sunday, December 21, 2008

Why Was Cheney So Quick to Admit He's a War Criminal?

By Marjorie Cohn
December 20, 2008

Dick Cheney has publicly confessed to ordering war crimes. Asked about waterboarding in an ABC News interview, Cheney replied, "I was aware of the program, certainly, and involved in helping get the process cleared."

He also said he still believes waterboarding was an appropriate method to use on terrorism suspects. CIA Director Michael Hayden confirmed that the agency waterboarded three al-Qaida suspects in 2002 and 2003.

U.S. courts have long held that waterboarding, where water is poured into someone's nose and mouth until he nearly drowns, constitutes torture. Our federal War Crimes Act defines torture as a war crime punishable by life imprisonment or even the death penalty if the victim dies.

Under the doctrine of command responsibility, enshrined in U.S. law, commanders all the way up the chain of command, to the commander in chief, can be held liable for war crimes, if they knew or should have known their subordinates would commit them and they did nothing to stop or prevent it.

Why is Cheney so sanguine about admitting he is a war criminal? Because he's confident that either President Bush will preemptively pardon him or President-elect Obama won't prosecute him.

Both of those courses of action would be illegal.

First, a president cannot immunize himself or his subordinates for committing crimes that he himself authorized.

On Feb. 7, 2002, Bush signed a memo erroneously stating that the Geneva Conventions, which require humane treatment, did not apply to al-Qaida and the Taliban. But the Supreme Court made clear that Geneva protects all prisoners. Bush also admitted that he approved of high-level meetings where waterboarding was authorized by Cheney, Condoleezza Rice, John Ashcroft, Colin Powell, Donald Rumsfeld and George Tenet.

Attorney General Michael Mukasey says there's no need for Bush to issue blanket pardons since there is no evidence that anyone developed the policies "for any reason other than to protect the security in the country and in the belief that he or she was doing something lawful." But noble motives are not defenses to the commission of crimes.

Lt. Gen. Antonio Taguba, who investigated the Abu Ghraib scandal, said, "There is no longer any doubt as to whether the current administration has committed war crimes. The only question that remains to be answered is whether those who ordered the use of torture will be held to account."

Second, the Constitution requires President Obama to faithfully execute the laws.

That means prosecuting lawbreakers. When the United States ratified the Geneva Conventions and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, thereby making them part of U.S. law, we agreed to prosecute those who violate their prohibitions.

The bipartisan Dec. 11 report of the Senate Armed Services Committee concluded that "senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality and authorized their use against detainees."

Lawyers who wrote the memos that purported to immunize government officials from war crimes liability include John Yoo, Jay Bybee, William Haynes, David Addington and Alberto Gonzales.

There is precedent in our law for holding lawyers criminally liable for participating in a common plan to violate the law.

Committee chairman Sen. Carl Levin, D-Mich., told Rachel Maddow that you cannot legalize what's illegal by having a lawyer write an opinion.

The committee's report also found that "Rumsfeld's authorization of aggressive interrogation techniques for use at Guantánamo Bay was a direct cause of detainee abuse there." Those techniques migrated to Iraq and Afghanistan, where prisoners in U.S. custody were also tortured.

Pardons or failures to prosecute the officials who planned and authorized torture would also be immoral. Former Navy General Counsel Alberto Mora testified to the Senate Armed Services Committee in June 2008 that "there are serving U.S. flag-rank officers who maintain that the first and second identifiable causes of U.S. combat deaths in Iraq -- as judged by their effectiveness in recruiting insurgent fighters into combat -- are, respectively the symbols of Abu Ghraib and Guantánamo."

During the campaign, Obama promised to promptly review actions by Bush officials to determine whether "genuine crimes" were committed. He said, "If crimes have been committed, they should be investigated," but "I would not want my first term consumed by what was perceived on the part of the Republicans as a partisan witch hunt, because I think we've got too many problems we've got to solve."

Two Obama advisers told the Associated Press that "there's little, if any, chance that the incoming president's Justice Department will go after anyone involved in authorizing or carrying out interrogations that provoked worldwide outrage."

When he takes office, Obama should order his new attorney general to appoint an independent prosecutor to investigate and prosecute those who ordered and authorized the commission of war crimes.

Obama has promised to bring real change. This must be legal and moral change, where those at the highest levels of government are held accountable for their heinous crimes. The new president should move swiftly to set an important precedent that you can't authorize war crimes and get away with it.

Marjorie Cohn is a professor at Thomas Jefferson School of Law and president of the National Lawyers Guild. She is the author of Cowboy Republic: Six Ways the Bush Gang Has Defied the Law and co-author of Rules of Disengagement: The Politics and Honor of Military Dissent (with Kathleen Gilberd), which will be published this winter by PoliPointPress. Her articles are archived at (The views expressed in this article are solely those of the writer; she is not acting on behalf of the National Lawyers Guild or Thomas Jefferson School of Law.)

© 2008 Independent Media Institute. All rights reserved.

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Monday, December 15, 2008

Premier/Diebold Tabulation Software Drops More Votes

This Time in Ohio

By Kim Zetter
Wired Blog
December 12, 2008

Officials in Montgomery County in Ohio discovered this week that tabulation software used with touch-screen voting machines in the presidential election failed to count five votes in the city of Trotwood. The voting system in question is made by Premier Election Solutions (formerly Diebold Election Systems).

Montgomery County officials discovered that although the five votes were recorded to a memory card inside the voting machine, the votes weren't counted by the tabulation software when the memory card was uploaded to the tabulation server. Premier's Global Election Management System (or GEMS) is the tabulation software that counts votes from memory cards.

The company's GEMS software is currently at the center of an investigation into dropped votes in a California county and was also the source of a previous problem found in Ohio in Montgomery and Butler counties during the May primary. Officials discovered then that the GEMS system dropped votes if officials tried to load too many memory cards at once. The problem turned out to be a sharing violation on the Premier election servers set up in eleven counties. No votes were lost during the primary as a result of this problem, since officials were aware the machine was rejecting votes when it occurred, but the state sued Premier in August over this and other issues.

Unlike the primary, officials had no indication in the November general election that the machine was dropping the five votes that were discovered missing this week.

The votes were not included in the official count that county officials certified to the state.

Montgomery officials discovered the missing votes only through a special hand audit they were conducting on order from Secretary of State Jennifer Brunner.

In an effort to restore public confidence in the voting machines the state uses, Brunner ordered all of Ohio's 88 counties to conduct a graduated audit by randomly selecting precincts and conducting a hand recount of the presidential race on 5 percent of the ballots cast in order to compare the votes against digital tallies and ensure that electronic voting machines are counting votes accurately. If the results of the 5 percent audit differ by more than two votes of the machine count, county officials are required to audit an additional 3 percent of ballots. If this sampling also differs by more than two votes, then officials are required to hand count all of the ballots cast in the county.

Montgomery County is the first county to have uncovered a specific problem with the voting machines as a result of the audit.

According to the Dayton Daily News, officials discovered the missing votes when they put the memory cards back into the voting machines to conduct the manual audit. The director of the county board of elections told the Daily News that there is no circumstance, under normal election conditions, that would cause officials to put the memory card back into a voting machine once it's been taken out. They put the memory card back into the machine this time only to conduct the mandatory partial audit required by Brunner.

It's unclear why they needed to put the memory card back into the machine to conduct the audit, however, since they already had paper trails of the votes (the Premier touchscreen machines print out a voter-verifiable paper audit trail as voters cast their ballots) and they already had the digital tallies from the machines as well.

Neither county nor state election officials were available to answer questions about the issue at press time.

The Premier touchscreen machines are used in 44 Ohio counties.

See also:
Serious Error in Diebold Voting Software Caused Lost Ballots in California County
Groups Warn Election Officials About Diebold Voting Machine Flaw


Saturday, December 13, 2008

Obama Can Restore Constitutional Democracy in Two Easy Steps

By David Fiderer
Huffington Post
December 11, 2008

Ask any computer guy. Five million emails don't disappear by accident, especially in the White House. It takes a lot of hard work, involving deliberate action from a team of seasoned professionals, to make the evidence unretrievable.

The missing emails, many of which were sent by Karl Rove, are a small part of the boundless evidence indicating a conspiracy to obstruct justice within the White House. Eric Holder, our next attorney general, could easily demonstrate sufficient probable cause to get a signed warrant to search documents held by the current president and vice president. Bush and Cheney would not be able to stop the government from moving forward.

A search warrant is not the same thing as a subpoena. So, while Bush and Cheney have tied up subpoenas in the courts with bogus claims of executive privilege, they face a far more daunting task if they attempt to stall the government from moving on a warrant. As the Supreme Court unanimously ruled 34 years ago in United States v. Nixon, executive privilege is overcome by the need for evidence in a criminal inquiry.

It's a safe bet that Bush intends to upend such an inquiry by repeating the stunt his father pulled 16 years earlier. George H.W. Bush pardoned Casper Weinberger and effectively shut down an investigation into criminal activities that implicated Bush Sr. in Iran-Contra. But things are different this time. There are so many more people who could be targets for Holder to investigate and prosecute.

Given all that went on during this administration, there had to have been a lot of people who looked the other way. Those people are subject to prosecution. Under the century-old doctrine of willful blindness, you can be prosecuted as an accessory if you had reason to believe that criminal acts were being committed under your nose.

Still, in spite of widespread evidence that Bush, Cheney, Rove et al. ran a criminal operation, Obama may be reluctant to use his political capital in pursuit of prior administration officials. (As usual, Barney Frank said it best. After the President-elect referred to himself as post-partisan, Rep Frank said he felt "post-partisan depression.")

But Obama can go a long way toward clearing the air by taking two quick and easy steps. He can simply disclose certain documents concerning the CIA leak and Katrina. Since those disclosures are responsive to bipartisan requests from Congress, they would not polarize Washington, nor would they would not tie up resources in a protracted investigation.

Step One: Disclose the transcript of Patrick Fitzgerald's joint interview with George Bush and Dick Cheney.

What did Bush and Cheney know, and when did they know it? That's what the House Committee On Oversight and Government Reform wants to know with regard to the CIA leak scandal. Did Cheney declassify Plame's status? If so, when did the declassification take place? Did Bush know about it? Did they have any awareness of how national security might be compromised? Did they answer the questions directly and openly, or were they evasive?

The committee sought the transcript of Patrick Fitzgerald's interview with Bush and Cheney pertaining to the criminal investigation over the CIA leak. Attorney General Michael Mukasey, in yet another demonstration of contempt for his oath of office, refused to comply with the request, because Bush asserted executive privilege. Last Friday, the committee issued its draft report, which stated:

"On a bipartisan basis, the Committee finds that the President's assertion of executive privilege over the report of the Vice President's interview was legally unprecedented and an inappropriate use of executive privilege. The assertion of executive privilege prevents the Committee from having access to a complete set of records and thus results in the Committee's inability to assess fully the actions of the Vice President."

Eric Holder can correct Mukasey's noncompliance in short order.

Step Two: Disclose the documents requested by Congress pursuant to investigations into Katrina.

What did Bush and Cheney - and for that matter, Chertoff, Rumsfeld, and many others - know and when did they know it? More than three years after Katrina killed a thousand Americans, we still have no idea. Back in March 2006, when Joe Lieberman made a pretense of believing in government oversight, he issued a strongly worded demand, as ranking member of the Senate Homeland Security Committee, that the White House comply with Congressional requests for documents and information pertaining to the disaster.

"[V]irtually everyone in the White House who had anything of operational significance to do with the preparation for and response to Katrina falls into the category put off limits to us. And, of course, we have been denied our requested interviews with even those lower level employees about whom the White House says it is willing to give us information. This has left us unable to obtain any real sense of what the White House did or didn't do to run or aid the federal response to Katrina. And it has kept us from obtaining key information from executive branch agencies about the government's response to Katrina.

Members of both of our staffs have repeatedly and for months asked White House staff for precedent for the White House's sweeping assertion of near immunity from inquiry. To date, we have been given none."

Obama's White House should respond to both Waxman's and Lieberman's respective committees by complying with their three-year-old requests for the following:

"[A]ll documents:
• produced, sent or received by the EOP or any of its employees or officials between August 26, 2005 and August 31, 2005 that refer or relate to (a) actual or potential breaching or overtopping of the levees in or around New Orleans or (b) flooding in or around New Orleans; and

• related to the 11:13 AM White House Homeland Security Council spot report stating that there was a report of a levee breach, including any and all documents stating or relating to the source of the report of a levee breach. If no such documents exist, please identify the source of that report."

Today, anyone who writes about the CIA leak case, or about Katrina, is extrapolating from the very small tip of a very large iceberg. If we want to move on as country, we need a cursory glimpse of what remains hidden below the surface. In terms of restoring accountability and transparency to the executive branch, these two steps provide some of the biggest bang for the buck.


DoJ blocking Obama team from docs on torture, wiretapping

by Andrew McLemore
Raw Story
December 12, 2008

The Justice Department has evaded a request from President-elect Barack Obama's transition team for documents about the secret programs of U.S. intelligence agencies.

The team asked to "review classified legal opinions related to secret CIA and National Security Agency programs," but the inquiry has been denied. Among the information requested are official documents about the "legal rationale" for the secret wiretapping and torture programs conducted by the two agencies.

Attorney General Michael Mukasey addressed the issue with reporters, saying that his department was reluctant to give up the documents without permission from the two agencies involved.

"And so what we try to do is determine whether, and to what extent, we can clear that information and try to do it as quickly as we can so as to get it to the transition team so that they're aware of all the things that they need when they take over on the 21st," Mukasey said, according to a transcript provided by the department.

An editorial demanded Friday that Obama fulfill his promise to end torture.

"He can begin to fulfill this pledge by signing an executive order that bans torture and inhuman treatment. In doing so, he would end the legal double-speak clouding U.S. policy and send a clear message to all Americans that torture and ill-treatment of detainees will not be tolerated."

A former interrogator wrote in a new book that the US military’s use of torture is responsible for the deaths of thousands of US soldiers by inspiring foreign fighters to kill Americans.


Sunday, December 07, 2008

Billions in U.S. Bank Rescue Funds are Fueling Buyouts Worldwide – Instead of Lending at Home

By William Patalon III
Executive Editor
Money Morning/The Money Map Report
Dec. 5, 2008

Bank of American Corp. (BAC), which is getting $15 billion from the U.S. government as part of the Treasury Department’s $250 billion “recapitalization” effort, is doubling its stake in state-owned China Construction Bank Corp., and will hold a 20% stake worth $24 billion in China’s second-largest lender when that deal is finalized.

PNC Financial Services Group Inc. (PNC), which will get $7.7 billion from Treasury’s Troubled Assets Relief Program (TARP), is using that cash infusion to help finance its $5.2 billion buyout of embattled National City Corp. (NCC).

And U.S. Bancorp (USB), which received a $6.6 billion capital infusion from that same rescue package, has acquired two California lenders – Downey Savings & Loan Association, F.A., a subsidiary of Downey Financial Corp. (DSL), and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc. (OTC: PFFB). U.S. Bank agreed to assume the first $1.6 billion in losses from the two, but says anything beyond that amount is subject to a loss-sharing deal it struck with the Federal Deposit Insurance Corp. (FDIC).

While the Treasury Department’s investment of more than $250 billion in U.S. financial institutions has been billed as a strategy that will bolster the health of the banking system and also jump-start lending, buyout deals such as these three show that the recapitalization plan has actually had a much different result – one that’s left whipsawed U.S. investors and lawmakers alike feeling burned, an ongoing Money Morning investigation continues to show.

Those billions have touched off a banking-sector version of “Let’s Make a Deal,” in which the biggest U.S. banks are using government money to get even bigger. While that’s admittedly removing the smaller, weaker banks from the market – a possible benefit to consumers and taxpayers alike – this trend is also having a detrimental effect: It’s reducing the competition that’s benefited consumers and kept the explosion in banking fees from being far worse than it already is.

This all happens without any of the economic benefits that an actual increase in lending would have had. And it does nothing to address the billions worth of illiquid securities that remain on (or off) banks’ balance sheets – as the recent Citigroup Inc. (C) imbroglio demonstrates.

In fact, Treasury’s TARP program has even managed to create a potentially illegal tax loophole that grants banks a tax-break windfall of as much as $140 billion. Lawmakers are furious – but possibly powerless, afraid that a full-scale assault on the tax change could cause already-done deals to unravel, in turn causing investor confidence to do the same.

One could even argue that since this first bailout (the $700 billion TARP initiative) has fueled takeovers – and not lending – the government had no choice but to roll out the more-recent $800 billion stimulus plan that was aimed at helping consumers and small businesses – a move that may spur lending and spending, but that still adds more debt to the already-sagging federal government balance sheet.

At the end of the day, these buyout deals are bad ones no matter how you evaluate them, says R. Shah Gilani, a retired hedge fund manager and expert on the U.S. credit crisis who is the editor of the Trigger Event Strategist, which identifies trading opportunities emanating from such financial-crisis “aftershocks” as this buyout binge.

Why in the name of capitalism are taxpayers being fleeced by banks that are being given our money to grow their businesses with the further backstop of more of our money having to be thrown to the FDIC when they fail?” Gilani asked. “Consolidation does not mean that bad loans and illiquid securities are somehow merged out of existence. It means that they are being acquired under the premise that a larger, more consolidated depositor base will better be able to bear the weight of those bad assets. What in heaven’s name prevents depositors from exiting when the merged banks continue to experience massive losses and write-downs? The answer to that question would be … nothing.”

Lining Up for Deal Money

In launching TARP, U.S. Treasury Secretary Henry M. “Hank” Paulson Jr. said the government’s goal was to restore public confidence in the U.S. financial services sector – especially banks – so private investors would be willing to advance money to banks and banks, in turn, would be willing to lend.

“Our purpose is to increase the confidence of our banks, so that they will deploy, not hoard, the capital,” Paulson said.

Whatever Treasury’s actual intent, the reality is that banks are already sniffing out buyout targets, while snuffing out lending – and the TARP money is the reason for both.

Fueled by this taxpayer-supplied capital, the wave of consolidation deals is “absolutely” going to accelerate, says Louis Basenese, a mergers-and-acquisitions expert who is also the editor of The Takeover Trader newsletter. “When it comes to M&A, there’s always a pronounced ‘domino effect.’ Consolidation breeds more consolidation as industry leaders conclude they have to keep acquiring in order to remain competitive.”

Indeed, banking executives have been quite open about their expansionist plans during media interviews, or during conference calls related to quarterly earnings.

Take BB&T Corp. (BBT). During a conference call that dealt with the bank’s third-quarter results, Chief Executive Officer John A. Allison IV said the Winston-Salem, N.C.-based bank “will probably participate” in the government program. Allison didn’t say whether the federal money would induce BB&T to boost its lending. But he did say the bank would likely accept the money in order to finance its expansion plans, The Wall Street Journal said.

“We think that there are going to be some acquisition opportunities – either now or in the near future – and this is a relatively inexpensive way to raise capital [to pay the buyout bill],” Allison said during the conference call.

And BB&T is hardly alone. Zions Bancorporation (ZION), a Salt Lake City-based bank that’s been squeezed by some bad real-estate loans, recently said it would be getting $1.4 billion in federal money. CEO Harris H. Simmons said the infusion would enable Zions to boost “prudent” lending and keep paying its dividend – albeit at a reduced rate.

Sounds good, right? Not so fast. During a conference call about earnings, Zions Chief Financial Officer Doyle L. Arnold said any lending increase wouldn’t be dramatic. Besides, Arnold said, Zions will also use the money “to take advantage of what we would expect will be some acquisition opportunities, including some very low risk FDIC-assisted transactions in the next several quarters.”

Buyouts Already Accelerating

With all the liquidity the world’s governments and central banks have injected into the global financial system, the pace of worldwide deal making is already accelerating. Global deal volume for the year has already passed the $3 trillion level – only the fifth time that’s happened, although it took about three months longer for that to happen this year than it did a year ago.

At a time when the global financial crisis – and the accompanying drop-off in available deal capital (either equity or credit) – has caused about $150 billion in already-announced deals to be yanked off the table since Sept. 1, liquidity from the U.S. and U.K. governments has ignited record levels of financial-sector deal making.

According to Dealogic, government investments in financial institutions has reached $76 billion this year – eight times as much as in all of 2007, which was the previous record year. And that total doesn’t include the $250 billion in TARP money, or other deals that Paulson & Co. are helping engineer – JPMorgan Chase & Co.’s (JPM) buyouts of The Bear Stearns Cos. and Washington Mutual Inc. (WAMUQ), for instance.

If You Can’t Beat ‘em… Buy ‘em?

When it comes to identifying possible buyout targets, M&A experts such as Basenese say there are some very clear frontrunners.

“I’d put regional banks with solid footprints in the Southeast high on the list, and for two reasons,” Basenese said. “First, demographics point to stronger growth [in this region] as retirees migrate to warmer climates – and bring their assets along for the trip. Plus, the Southeast is largely un-penetrated by large national banks. An acquisition of a regional bank like SunTrust Banks Inc. (STI) would provide a distinct competitive advantage.

There's a very good reason that smaller players may be next: Big banks and small banks have the easiest times – relatively speaking, of course – of raising capital. It’s toughest for the regional players. Big banks can tap into the global financial markets for cash, while the very small – and typically, highly local – banks can raise money from local investors.

The afore-mentioned stealthy shift in the U.S. Tax Code actually gives big U.S. banks a potential windfall of as much as $140 billion, says Gilani, the credit crisis expert and Trigger Event Strategist editor. What does this tax-change do? By acquiring a failed bank whose only real value is the losses on its books, the successful suitor would basically then be able to use the acquired bank’s losses to offset its own gains and thus avoid paying taxes.

“While everyone was panicking, the Treasury Department slipped through a ruling that allows banks who acquire other banks to fully write-off all the acquired bank’s bad debts,” Gilani says.

For 22 years, the law was such that if you were to buy a company that had losses, say, of $1 billion, you couldn’t just take that loss against your own $1 billion profit and tell Uncle Sam, ‘Gee, now my loss offsets my profit, so I don’t have any profit, and I don’t owe you any tax.’ It was a recipe for tax evasion that demanded an appropriate law that only allows limited write-offs over an extended period of years.”

Given these incentives, who will be doing the buying?

Clearly, the biggest U.S.-based banks will be the main hunters. But The Takeover Trader’s Basenese says that even foreign banks will be on the prowl for cheap U.S. banking assets.

Basenese also believes that Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) will be “big spenders.” Each will use TARP funds to help accelerate its transformation from an investment bank into a bank holding company. The changeover will require each company to build up a big base of deposits. And the best way to do that is to buy other banks, Basenese says.

One thing [the wave of deals] does is to restore confidence in the sector,” Basenese said. “It will go a long way in convincing CEOs that it’s safe to use excess capital to fund acquisitions, and to grow, instead of using it to defend against a proverbial run on the bank.”

Not everyone agrees with that assessment. Investors who play the merger game correctly will do well. But the game itself won’t necessarily whip the industry into championship form, Gilani says.

“While consolidation, instead of outright collapses, in the banking industry may serve to relieve the FDIC of its burden to make good on failed banks, it in no way guarantees fewer failures,” he said. “In fact, it may only serve to guarantee, in some cases, even larger failures.”