Consumers may not be able to avoid cloned food

Bernadette Tansey

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Less than a dozen years after Dolly the sheep became the world's first cloned mammal, grocers and restaurateurs are digesting the fact that milk and meat from cloned animals could soon filter into their supply chains.

The government took major steps toward easing cloned livestock and their offspring into the food supply in mid-January, when the Food and Drug Administration concluded they're safe to eat.

The question is, will consumers swallow the new technology? And how will food businesses cope if their customers balk?

Many food merchants are still framing their policies while they warily monitor public opinion. The historic commercial debut of cloning comes in an era when a significant segment of consumers have rejected other foods the FDA deemed safe, such as milk from hormone-treated cows and genetically modified corn.

Cloning is an attempt to create a new animal using the DNA from an existing adult animal. The FDA, while noting that livestock cloning produces many malformed or ill newborn animals, said cloned animals that survive for several months after birth can be healthy. They can reproduce normally and produce healthy young, the FDA said. The agency said it found no signs that food from healthy clones is harmful to humans, and predicted that sickly clones would be excluded from the food supply.

Consumer groups, however, have called FDA's positive safety assessment hasty and ill-founded. The Center for Food Safety said the FDA based many conclusions on small or limited studies, many of them financed by cloning companies. Clones that appear healthy can have infections, or abnormalities that could affect food quality such as unusual proteins or imbalances between protein and fats, the group said. Further studies should be done to evaluate clones and their offspring, the organization said.

Such groups are urging consumers to press their supermarkets and restaurants to refuse food from clones. And those businesses are being peppered with inquiries like "Will my hamburger meat come from a cloned cow?" and "Are clones kosher?"

Independent grocer Sam Mogannam said he didn't need any calls from his customers to know if they'd accept food from cloned lineages. He's sure they won't. And he has no intention of stocking any at Bi-Rite Market, which he bills as a mecca for organic, sustainable and non-artificial foods in San Francisco's Mission District.

"We believe in allowing nature to take its due course," he said. "I know our customers wouldn't support us if they knew we were knowingly accepting products from clones or their offspring."

But food merchants, from small shop owners to national supermarket chains, could face formidable challenges if they want to guarantee customers the option of avoiding all products linked to cloning.

No public system is in place to alert food sellers when products from animal lines that include clones could reach their shelves - whether in the form of a rib-eye steak, a quart of low-fat milk, a can of beef minestrone or a wedge of sharp cheddar.

Consumer groups such as the Center for Food Safety and Consumers Union support mandatory labeling of all products linked to cloning, from raw meat to meatball sandwiches. They're backing bills proposed in Congress and by a few state legislators, including state Sen. Carole Migden, D-San Francisco. Without labeling, they argue, any food safety problems that did arise from cloning would never be linked to the technology.

Some retailers, after hearing from customers, are also calling for some form of government action. Two supermarket chains with a significant presence in Northern California, Safeway and Whole Foods Market, say the government should oversee a system to track clones through the food supply. It should also consider other means, such as food labeling, to ensure that consumers can make informed choices about products of cloning, the companies said.

"The lack of effective governmental oversight and tracking could mean consumers will lose the ability to choose clone-free products," Whole Foods spokeswoman Margaret Wittenberg said.

The FDA maintains that no labeling or disclosure requirements are necessary to protect public health. The agency, after years of study, issued a lengthy report Jan. 15 concluding that milk and meat from cloned cattle, pigs and goats are safe for consumption. The FDA said it had too little information to assess cloned sheep, but it found no food safety problems connected with the progeny of clones.

The offspring of all cloned livestock were immediately cleared as food sources by the U.S. Department of Agriculture, based on the FDA's findings. Clones themselves - cattle, pigs and goats - will also enter the food supply. But when, and under what regulatory scheme, if any, has not yet been decided.

The USDA is inviting industry input as it develops a plan to usher cloned animals into the market. In the meantime, the agency is asking companies that have created or purchased clones to honor a voluntary ban on selling their meat or milk for food.

This means that Ditto, a cloned cow created by a UC Davis researcher, can't be a food source just yet because the university honors the temporary ban. But UC Davis is now free to sell milk or meat from Ditto's daughter, an unnamed Holstein cow conceived by sexual reproduction.

Even before the FDA's favorable report, a few clone owners admitted in various news reports that they had already sold milk or meat from the animals as food.

As the rules stand now, livestock breeders and milk or meat suppliers have no legal obligation to disclose to either food manufacturers or consumers that a product came from a cloned animal line. Some vendors plan to keep their products clear of cloned lineages, but the FDA may not permit packages to bear a voluntary label such as "clone free."

Safeway Inc. of Pleasanton, one of the nation's largest food retailers, said its customers are demanding more information. The company acknowledged that the government conducted important studies on food from clones. But to help shoppers make informed choices about products tied to cloning, Safeway supports additional studies "that would help ensure changes to federal policy are done in a manner that maintains consumer confidence and informed decision making."

The Pleasanton chain, which has 269 stores in Northern California, is asking its suppliers to deliver no products from cloned animals while the government mulls its options. "Meanwhile, the federal government should exercise its authority and expertise to determine an appropriate regulatory framework, including traceability and labeling," Safeway said in response to a Chronicle inquiry. Safeway declined to say whether it will accept foods from the offspring of clones.

Trader Joe's, a Monrovia (Los Angeles County) grocery chain that carries many organic product lines, did not respond to The Chronicle's query.

Bruce Knight, USDA undersecretary for marketing, said the agency is willing to help industry members create a tracking and certification program if they request it. The USDA already administers standards and certification of organic products. Knight said the USDA would work with companies that want to set up voluntary labeling of food from clones.

Few food businesses have actively sought to sell products from cloned animal lines, but all could be affected by the few U.S. cloning companies in business. Their customers are farmers who want replicas of valuable breeding animals - clones of a prize bull, for example, whose semen fetches high prices for artificial insemination. As breeders, cloned animals could quickly influence the gene pool of U.S. livestock. The preserved semen of one bull can be sent throughout the country to produce thousands of descendants.

One healthy cloned calf can cost as much as $20,000. But these expensive animals may enter the meat supply when their reproductive lives wane. Their milk will also be sold for dairy products.

At this point, retailers that want to avoid food from clones are relying on private agreements with their suppliers, who in turn have to trust their own sources. Meat packers may be able to exclude some clones by consulting an industry database of cloned animals whose owners volunteer to register them. The two major livestock cloning companies, ViaGen Inc. and Trans Ova Genetics, are developing the registry with the certification company AgInfoLink. Meatpackers would be able to scan or read an animal's ear tag to identify clones, said AgInfoLink executive Glenn Smith.

At this point, AgInfoLink doesn't plan to track the milk, semen or offspring of clones. But Smith said that could change if retailers request such services.

Most food outlets that have taken a stand on cloning have said they will exclude clones themselves, but not necessarily food from their progeny.

Natural foods retailer Whole Foods Market of Austin, Texas, which has 24 stores in Northern California, said its products will remain free of both clones and their descendants.

"We are working with our supplier community to develop a chain of custody records that trace product breeding stock through multiple generations," said Edmund LaMacchia, vice president of purchasing for perishables.

It's not clear, however, that all USDA-certified organic operations will be completely "clone free." Some organic producers say they're not sure yet how they can guarantee that their animals have no ties to cloning. That includes Albert Straus, president of Straus Family Creamery in Marin County, which supplies all the dairy products for Sam Mogannam's Mission District market and nearby ice cream store.

Like most dairy operators, Straus relies on artificial insemination to reproduce his herd. Straus wants the government to require semen suppliers to reveal whether their products come from a cloned bull or its young. Without such certainty, Straus said, dairies might lose their organic certification from the USDA.

USDA's organic standards do rule out clones, but the agency may permit the use of a clone's descendants, Knight said. Therefore, consumers who want to avoid food from both clones and their offspring may not be able to rely solely on the organic label.

Buying only kosher foods won't insulate consumers from products of cloning at all. Rabbi Menachem Genack of the Orthodox Union, which certifies food items as kosher, said cloned animals would qualify as long as they belong to a single kosher species, such as cattle, sheep and goats.

At this point, consumer choice rests on a patchwork chain of voluntary agreements among suppliers and retailers.

The first time many Americans take a bite of food from a cloned animal or its offspring, they may never know it.

Cloning's imperfections at center of debate

Twenty years from now, the eating public may blithely accept food from cloned animals. But at this point, consumer groups are aghast at government actions to usher cloned livestock and their offspring into the U.S. food supply. To a large extent, the resistance stems from the fact that livestock cloning is still an imperfect art.

The Food and Drug Administration found in January that food from healthy clones and their progeny is safe. But in the same lengthy report, the FDA also detailed snags in the current art of animal cloning that reduce its rate of producing healthy clones to less than 10 percent. Many cloned embryos die or develop into sickly newborns.

Among consumer groups, those technical snags have raised questions not only about food safety, but also about animal welfare and ethics. They contend that further study may reveal health dangers the FDA didn't discover, as new testing methods emerge. In the FDA's view, future research will not only confirm the safety of food from clones, but will also improve methods of creating them.

Clones are made by coaxing a single adult cell from the original animal - call it a bull named George - to form an embryo that will become George2. The nucleus containing George's DNA is swapped into an egg cell from a cow, after the egg's nucleus is removed. The hope is that the resulting embryo, implanted in a surrogate mother, will be an exact copy of George. But about 90 percent of the time, that doesn't happen.

Clones can be born grossly malformed, and many die within six months. The fetuses can grow too large, causing difficult, extended pregnancies ending with delivery by cesarean section, the FDA found in a review of scientific studies.

But the FDA said clones that survive past six months are often healthy and fertile. Their offspring have even fewer health problems, the agency said. No significant differences appeared in milk or meat from cloned animal lines and their non-cloned counterparts, FDA reported.

The FDA acknowledged that newborn clones are often sick or dying, but said those animals would never pass inspection for entry into the food supply.

Consumer groups aren't convinced that cloning raises no safety concerns. For example, they suspect that many young clones will survive only through treatment with antibiotics and other drugs. Such animals could enter the food supply and affect human health, they contend.

An ethics board advising the European Food Safety Authority concluded in January that cloning for food production cannot be justified at this point because of the suffering of both deformed clones and their surrogate mothers, or dams, in animal breeding terms.

On the question of food safety, however, the European Food Safety Authority agreed with the FDA. The FDA, whose purview is limited to food safety, did not evaluate the ethics of cloning.

Online resources

Read the FDA's risk

assessment of cloning: www.fda.gov/cvm/

cloning.htm

Read the Center for Food Safety's critique of FDA's report: www.centerforfood safety.org/Policy.cfm

US banks borrow $50bn via new Fed facility

By Gillian Tett in London

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US banks have been quietly borrowing massive amounts of money from the Federal Reserve in recent weeks by using a new measure the Fed introduced two months ago to help ease the credit crunch.

The use of the Fed’s Term Auction Facility, which allows banks to borrow at relatively attractive rates against a wider range of their assets than previously permitted, saw borrowing of nearly $50bn of one-month funds from the Fed by mid-February.

US officials say the trend shows that financial authorities have become far more adept at channelling liquidity into the banking system to alleviate financial stress, after failing to calm money markets last year.

However, the move has sparked unease among some analysts about the stress developing in opaque corners of the US banking system and the banks’ growing reliance on indirect forms of government support.

“The TAF ... allows the banks to borrow money against all sort of dodgy collateral,” says Christopher Wood, analyst at CLSA. “The banks are increasingly giving the Fed the garbage collateral nobody else wants to take ... [this] suggests a perilous condition for America’s banking system.”

The Fed announced the TAF tool on December 12 as part of a co-ordinated package of measures unveiled by leading western central banks to calm money markets.

The measure marks a distinct break from past US policy. Before its introduction, banks either had to raise money in the open market or use the so-called “discount window” for emergencies. However, last year many banks refused to use the discount window, even though they found it hard to raise funds in the market, because it was associated with the stigma of bank failure.

The Fed has not yet indicated how long the TAF will remain in place.

But the popularity of the scheme is prompting speculation the reform will stay in place as long as the financial stresses last.

“Some Fed officials have expressed an interest in keeping and possibly expanding the TAF,” says Michael Feroli, economist at JPMorgan.

Nevertheless, Mr Feroli said banks now appeared to be using the TAF instead of other funding routes, meaning that the overall level of reserves in the system was remaining constant. “The banking system certainly has its problems, however the notion that ... banks have trouble maintaining reserves stems from a superficial reading of the Fed’s statistical reports,” he said.

Does Balkanization Beckon Anew?

By Patrick J. Buchanan

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When the Great War comes, said old Bismarck, it will come out of "some damn fool thing in the Balkans."

On June 28, 1914, Gavrilo Princip shot the archduke and heir to the Austrian throne Franz Ferdinand in Sarajevo, setting in motion the train of events that led to the First World War.

In the spring of 1999, the United States bombed Serbia for 78 days to force its army out of that nation's cradle province of Kosovo. The Serbs were fighting Albanian separatists of the Kosovo Liberation Army (KLA). And we had no more right to bomb Belgrade than the Royal Navy would have had to bombard New York in our Civil War.

We bombed Serbia, we were told, to stop the genocide in Kosovo. But there was no genocide. This was propaganda. The United Nations' final casualty count of Serbs and Albanians in Slobodan Milosevic's war did not add up to 1 percent of the dead in Mr. Lincoln's war.

Albanians did flee in the tens of thousands during the war. But since that war's end, the Serbs of Kosovo have seen their churches and monasteries smashed and vandalized and have been ethnically cleansed in the scores of thousands from their ancestral province. In the exodus they have lost everything. The remaining Serb population of 120,000 is largely confined to enclaves guarded by NATO troops.

"At a Serb monastery in Pec," writes the Washington Post, "Italian troops protect the holy site, which is surrounded by a massive new wall to shield elderly nuns from stone-throwing and other abuse by passing ethnic Albanians."

On Sunday, Kosovo declared independence and was recognized by the European Union and President Bush. But this is not the end of the story. It is only the preface to a new history of the Balkans, a region that has known too much history.

By intervening in a civil war to aid the secession of an ancient province, to create a new nation that has never before existed and, to erect it along ethnic, religious and tribal lines, we have established a dangerous precedent. Muslim and Albanian extremists are already talking of a Greater Albania, consisting of Albania, Kosovo and the Albanian-Muslim sectors of Serbia, Montenegro and Macedonia.

If these Albanian minorities should demand the right to secede and join their kinsmen in Kosovo, on what grounds would we oppose them? The inviolability of borders? What if the Serb majority in the Mitrovica region of northern Kosovo, who reject Albanian rule, secede and call on their kinsmen in Serbia to protect them?

Would we go to war against Serbia, once again, to maintain the territorial integrity of Kosovo, after we played the lead role in destroying the territorial integrity of Serbia?

Inside the U.S.-sponsored Federation of Bosnia and Herzegovina, the autonomous Serb Republic of Srpska is already talking secession and unification with Serbia. On what grounds would we deny them?

The U.S. war on Serbia was unconstitutional, unjust and unwise. Congress never authorized it. Serbia, an ally in two world wars, had never attacked us. We made an enemy of the Serbs, and alienated Russia, to create a second Muslim state in the Balkans.

By intervening in a civil war where no vital interest was at risk, the United States, which is being denounced as loudly in Belgrade today as we are being cheered in Pristina, has acquired another dependency. And our new allies, the KLA, have been credibly charged with human trafficking, drug dealing, atrocities and terrorism.

And the clamor for ethnic self-rule has only begun to be heard.

Rumania has refused to recognize the new Republic of Kosovo, for the best of reasons.
Bucharest rules a large Hungarian minority in Transylvania, acquired at the same Paris Peace Conference of 1919 where Croatia, Slovenia and Bosnia-Herzegovina were detached from Vienna and united with Serbia.

Abkhazia and South Ossetia, two provinces that have broken away from Georgia, are invoking the Kosovo precedent to demand recognition as independent nations. As our NATO expansionists are anxious to bring Georgia into NATO, here is yet another occasion for a potential Washington-Moscow clash.

Spain, too, opposed the severing of Kosovo from Serbia, as Madrid faces similar demands from Basque and Catalan separatists.

The Muslim world will enthusiastically endorse the creation of a new Muslim state in Europe at the expense of Orthodox Christian Serbs. But Turkey is also likely to re-raise the issue as to why the EU and United States do not formally recognize the Turkish Republic of Northern Cyprus. Like Kosovo, it, too, is an ethnically homogeneous community that declared independence 25 years ago.

Breakaway Transneistria is seeking independence from Moldova, the nation wedged between Rumania and Ukraine, and President Putin of Russia has threatened to recognize it, Abkhazia and South Ossetia in retaliation for the West's recognition of Kosovo.

If Putin pauses, it will be because he recognizes that of all the nations of Europe, Russia is high among those most threatened by the serial Balkanization we may have just reignited in the Balkans.

Mr. Buchanan is a nationally syndicated columnist and author of "The Death of the West," "The Great Betrayal," "A Republic, Not an Empire" and "Where the Right Went Wrong."

Slouching Towards Petroeurostan

By Pepe Escobar

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It was a discreet, almost hush hush affair, but after almost three years of stalling and endless delays, it finally happened. Now more than ever, it may also signal a true geoeconomic earthquake – way beyond a potentially shattering blow to US dollar hegemony.

This Sunday, the Iranian Oil Bourse – the first-ever oil, gas and petrochemical exchange in the Islamic Republic, and the first within OPEC – was launched by Iran’s Oil Minister Gholam-Hossein Nozari, flanked by Minister of Economy and Financial Affairs Davoud Danesh Ja’fari, the man who will head the bourse.

The bourse’s official name is Iranian International Petroleum Exchange (IIPE), widely known in Iran and the Persian Gulf as the Kish bourse. Kish island is a free zone (declared by the Shah) in an ideal laissez faire setting: lots of condos and duty-free malls, no Khomeini mega-portraits and hordes of young honeymooners shopping for made-in-Europe home appliances.

There was frantic speculation all over the world that the bourse would start trading in euros. But according to Nozari transactions at this early stage will be in Iran’s currency, the rial. Anyway the Iranian ambassador to Moscow Gholam-Reza Ansari has already advanced that “in the future, we'll be able to use the ruble, Russia’s national currency, in our operations”. He added that “Russia and Iran, two major producers of the world’s energy, should encourage oil and gas transactions in various non-dollar currencies, releasing the world from being a slave of dollar”. Russia’s first deputy Prime Minister Dmitry Medvedev said last week that “the ruble will de facto become one of the regional reserve currencies.”

Slowly but surely

This is just what the Iranians are calling the first phase. Ultimately, the bourse is to directly compete against London’s International Petroleum Exchange (IPE) as well as the New York Mercantile Exchange (NYMEX), both owned by US corporations (since 2001 NYMEX is owned by a consortium which includes BP, Goldman Sachs and Morgan Stanley). What Iran plans to do in the long run is quite daring: to directly challenge Anglo-American energy/corporate banking domination of the international oil trade.

There’s a lot hanging on the balance to assure the success of the bourse already in this first phase. Other OPEC members, and especially Iran’s neighbors, the Persian Gulf petro-monarchies, must be supportive, or at least “catch the drift”.

It makes total sense for OPEC member countries to support an alternative to both NYMEX and the IPE, which exercise a de facto, unhealthy monopoly of the oil and gas market, are always very comfortable to exploit volatility for profit, and are always able to wreak havoc against the interests of producer countries. An avalanche of contracts related to Iranian or Saudi oil, for instance, are still indexed to the price of the UK’s North Sea Brent oil, whose production is terminally declining.

In the summer of 2005, at the Petroleum Ministry in central Tehran, this correspondent interviewed Mohammad Javed Asemipour, then the executive in charge of establishing the Kish bourse. Asemipour stressed the road map, which remains unchanged: the bourse would start dealing with petrochemical products, and then with what everybody really craves – light-sulfur Caspian Sea crude. This was not going to be an Iranian-style exchange, but “an international exchange, fully integrated in the world economy”. The ultimate goal is very ambitious: the creation of a new Persian Gulf benchmark oil price.

Today, Minister Nozari admits Iran’s share of global oil trade is still very low. Enter the bourse, which is the solution to eliminate the middlemen. Everyone in the oil business knows that high oil prices are not really due to OPEC – which supplies 40% of the world’s crude - or “al Qaeda threats”. The main profiteers are middlemen – “traders” to put it nicely, “speculators” to put it bluntly.

The Petroleum Ministry’s immediate priorities remain the same: to attract much needed foreign investment in the energy sector in Iran, and to expand its address book of oil buyers. Iran – like so many developing countries – does not want to depend on Western oil trading firms such as Philip Brothers (owned by Citicorp), Cargill or Taurus. Enron – until its debacle – used to be one of the most profitable. Some powerful oil companies – such as Total and Exxon – trade under their own names.

The empire will strike back

At the World Economic Forum in Davos last month, mega-speculator George Soros was adamant, stressing we are at the end of the dollar era and a “systemic failure” may be upon us.

On February 8 in Dubai OPEC Secretary-General Abdullah al-Badri told the London-based Middle East Economic Digest that OPEC may inevitably switch to the euro within a decade.
 Iran and Venezuela – supported by Ecuador - are actively campaigning inside OPEC for oil to be priced at least in a basket of currencies.
According to OPEC’s current president, Chakib Khelil, OPEC Finance ministers will soon meet to discuss the possibility in depth. According to Iraqi Oil Minister Hussein al-Shahristani, a committee will “submit to OPEC its recommendation on a basket of currencies that OPEC members will deal with.”

There’s no evidence – yet – that ultra-cautious iron clad US ally Saudi Arabia would incur Washington’s wrath by supporting such a move. As for Iran, it is OPEC's second largest exporter. According to minister Nozari Iran’s oil revenue will reach $63 billion by the end of the current Iranian year, which ends on March 20. Crude oil production is at 4,1million barrels a day, the highest level since the 1979 Islamic Revolution.


Iran does not trade a single barrel of oil in dollars anymore. Since December 2007 it converted all its oil export payments to other currencies. Iran now sells oil to Japan in yen. That makes sense: Japan is the top importer of Iranian oil, and Iran is Japan’s third-largest supplier. Worryingly for the dollar, Qatari Prime Minister Sheikh Hamad bin Jassim al-Thani has already announced that the tiny oil-rich emirate would abandon the dollar for the Qatari riyal before summer. There’s a strong possibility the United Arab Emirates (UAE) may also switch to their own currency.

As the Kish bourse picks up momentum, more and more oil and gas trading will happen in a basket of currencies – and more and more the US dollar will lose its paramount status. Quite a few Middle East analysts expect the Persian Gulf petro-monarchies to end their dollar peg sooner rather than later – some say as early as next summer, as their black gold will increasingly not be traded in dollars. Iranian economist Hamid Varzi stresses that the “psychological effect” of Iran’s move away from the US dollar is “encouraging others to follow suit.

Iranian officials have always maintained Washington has threatened to disrupt the oil bourse – via an online virus, attempting regime change or even the dreaded, unilateral pre-emptive nuclear strike. On the other hand, the possible success of the bourse may be crucial to signal the US’s waning power in a world evolving towards multi-polarity. The Saudis and the Persian Gulf petro-monarchies have already decided to reduce their US dollar holdings. It’s not far-fetched to imagine Washington, sooner or later, having to pay for its oil and gas imports in euros.

No wonder Venezuelan President Hugo Chavez is so demonized by Washington as he keeps repeating that the empire of the dollar is falling. But even ultra-cautious Prince Saudi al-Faisal, Saudi Arabia’s Foreign Minister, has admitted during the latest OPEC summit in Riyadh that the dollar would collapse if OPEC decided to switch to euros or a basket of currencies. During a crucial closed meeting – with the microphones on, by mistake – Prince Saudi said “My feeling is that the mere mention that OPEC countries are studying the issue of the dollar is itself going to have an impact that endangers the interests of the countries. There will be journalists who will seize on this point and we don't want the dollar to collapse instead of doing something good for OPEC."

The trillion-dollar question is if, and when, most European and Asian oil importers may stampede towards the Iranian oil bourse. OPEC members as well as oil producers from the Caspian may be inevitably seduced by the advantages of selling at Kish – with no dreaded middlemen. If they can buy oil with euros, yen or even yuan, Europeans, Chinese and Japanese won’t need US dollars – and the same applies for their central banks.

It would take only a few major oil exporters to switch from the dollar to the euro - or the yen - to fatally bomb the petrodollar mothership. Venezuela, Norway and Russia are all ready to say goodbye to the petrodollar. France officially supports a stronger role for the euro in international oil trade.

It may be a long way away, but ultimately the emergence of a new oil marker in euros in Kish will lead the way to the petroeuro global oil trade. It makes total sense. The European Union imports much more oil from OPEC than the US, and 45% of Middle East imports also come from the E.U.

The symbolism of the Iranian oil bourse is stark; it shows that the flight from the US dollar is irreversible – and so would, sooner rather than later, the capacity of Washington to launch wars on credit. But at this early stage in the game, only one thing is certain: the Empire will strike back.

Homeland Born and Bred

By Manuel Valenzuela

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Sojourn into the outer recesses of a nation bordering on madness, into a land deeply disturbed and emotionally bewildered, a world of anti-intellectualism and anti-rationalism, of fanaticism and fundamentalism, entering a case study into fantasyland and escapism, taking a pilgrimage into realms both of purposeful ignorance and blindness, , of electing lifelong incompetents based on wanting to have a beer with them, walking through the dark valley of indifference, climbing the monolithic mountain of hubris, finally reaching the hallowed halls of smoke and mirrors, a place where only the blind lead the blind and where the deafening roars of death and destruction are easily suppressed in delusion and denial. Journey, if you will, into a nation that lost its moral compass inside the dungeons of fear and hatred.

Enter what fascists call the Homeland, what patriots used to call the United States of America, now named, simply, and appropriately, Amerika, a place where corporations enjoy more rights and protections than the People, where corporations – through their products and policies – help kill hundreds of thousands of human beings every year in the name of profit over people, making them mass murderers on a scale reserved only for humanity’s worst; a land controlled by the military-energy-industrial complex, with war the engine for unimaginable profits; a nation now without a Constitution, nor a moral standing; a country that has developed a thirst for human blood and an appetite for destruction; a land of Manifest Destiny leaving death, suffering and destruction in its wake; a sadist entity that develops and refines its crimes against humanity it inflicts upon the people of the world by first practicing them on its own citizenry.

It is inside the bowels of the Homeland that the malignant cancer that afflicts the country can be seen. The inner tumor inflicting constant pain can be seen through the eyes of a people so psychologically damaged by the never-before seen pressures on the human mind caused by capitalism run amok— conditioned to live to work and not work to live, thinking that work will set them free – that no nation on Earth has more citizens taking anti-depression and mind-numbing drugs in order to bandage an otherwise perpetually open gash. It can be seen through a people so internally despondent that only escapism through hours of fantasy-television watching or ceaseless consumption of materialistic goods, a modern version of bread and circus, can alleviate the stress and the pressures and the fatigue and the frustration and the anger developed in the pursuit of empty promises, of fictional dreams, in a world of the unreal.

Crisscross the land of the free and the home of the brave to see those who serve and protect abuse the people they serve. Tour Taser Nation, a land where authorities routinely inflict electroshock torture on the People, pulling the trigger first, asking questions later, as always enjoying inflicting pain and suffering on both innocent and guilty. Students, suspects, the infirm, the handicapped, pregnant women, motorists, the elderly, those asking questions, those protecting their rights and yes, now even children, all can be electroshocked into submission in a legalized form of torture that seems to grow by the day.

Taser Nation has become Torture Nation, zapping one unsuspecting citizen at a time, conditioning the population towards the new normal of police brutality and state-sanctioned intimidation. Welcome to the Land of the Brownshirts, a place where respect for human rights and loving your neighbor as yourself is now frowned upon, a place where bullying, intimidation, harassment and a budding police state are the new normal.

Take an excursion into the vast hinterlands of the Empire’s prison system, a network of concentration camps holding over two million human beings, most imprisoned for petty drug violations, most black or Latino or working class white, many suffering serious mental health problems, many trapped in a vicious circle of indigence, unemployment, incarceration and oppression at the hands of the state. Ostensibly designed to rehabilitate, these jails do the opposite, exacerbating mental anguish, frustration and anger, easing the transformation of human beings into rotting manifestations of lives lost and altered. It is here where Guantanamo and Bagram and Abu Ghraib find their genesis.

These prisons, these cages of solitude and loneliness and madness and survival and violence, are where American society discards itself of the unwanted, the undesirable, those not comporting to the mores of Puritanical code. America’s vast prison system is where those fated from birth to the lower echelons of society’s caste system end up, those millions tattooed with the shackles of American society’s perpetual enslavement, destined to forever live in ghettos, inner city reservations and Bantustans, devoid of opportunity and a future, forced to dwell upon the realities of metaphysical imprisonment, desperate to survive either by illegality or escapism, oppressed and subjugated by authorities, marginalized by society, discriminated against by the state.

It is here, in these rotting machinations of rusted iron, metal bars and decrepit institutionalization, of fetid squalor and sadistic reality, where America’s brigade of automatons makes its problems disappear, creating an entire state and privatized prison-industrial complex dependent on crime, guilt, sentencing and prisoners. It is inside these penal institutions that America’s sadists and authoritarian personalities work, brutalizing and torturing inmates, oppressing and exploiting individuals, fomenting racism and hatred.

It is here where America trains her torturers and her malevolent warriors, her “bad apples” and her fascist enablers, exporting lessons learned abroad, infecting the innocent of occupied lands with the cruel and inhuman punishment that is as American as apple pie. It is here, in these creations of human hell, that crimes against humanity are perfected. It is inside the gates of hell that experimentation becomes indoctrination and where brutality becomes legalized torture.


Rise of a New Crusade


Enter the periphery of the Empire, where fear and hatred together form silent acquiescence to myriad crimes against humanity, where indifference and unconcern leads to war crimes going unpunished, where ignorance of the outside world leads to ignorance of forgotten occupations, where ballots cast help ease into power corruption and criminality and mass murder, where the two headed hydra of the Corporatist Party colludes to condemn millions in Muslim lands to premature death and wretched suffering, where critical thinking is shunned and backwardness embraced, and where progressive, humanist ideals find castration by the knives owned by those living inside the bubble of primitive and extinct days long since passed.

Traverse a nation conditioned to hate the Arab and Muslim world – a land of a billion strong – with its corresponding depravity of jingoism and xenophobia boiling beneath the surface, ready at a moment’s notice, or upon the happenstance of new Pearl Harbor events, to explode in searing anger, for a populace injected with the venom of fear and ignorance easily unleashes its wrath on the chosen dark-skinned scapegoats of the undeveloped world. Programmed fear and molded hatred born of inside jobs and false flag events have unlocked the flames of bigotry from the inner demons of the Empire, creating sub-human scapegoats whose only crime is inhabiting lands the vampire of hegemony needs in order to satiate its ceaseless craving for power and control. Thus, in the lands where black blood flows and the devil’s excrement spills you will find the Empire’s dripping, black stained fangs.

Enter, if you will, the land of Christian soldiers and born-again leaders, a terrain belonging to the army of Jesus and to the vengeful, disastrous deity of Old Testament belief, marching off to victory with a cross in one-hand and an M-16 in the other; a nation of bible camps, bible conventions, bible thumpers and Bible Belts; of mega-churches, mega- proselytizers and mega-hypocrisy; of fanaticism and fundamentalism; of illogical – and damaging – belief in the myth of creationism and the delusions of abstinence; of agents of intolerance, thirst for conversions and theocratic fantasy; of protection and respect of life only if life is that of a zygote, not an actual human being caught in war, terminal disease or endemic suffering; a place where belief in myth and fable and of the never seen is given prominence over reality and reason and modernity’s treatises; of blind faith trumping sound science; of a nation self-professing and monopolizing blessings by humankind’s archaic and historically grossly incompetent divinity; of extremist theism, evangelical psychosis and reactionary emotion; and of evangelical sheep being led to pasture by wolves dressed in shepherd’s clothing.

Indeed, enter the eye of the Middle East storm, the creator of hatred and blowback, the father and mother of the fictional war on terror, the epicenter of the crusade of surge and siege, the fulcrum of Christian extremism, the home of the American Taliban, the disseminator of the self-fulfilling prophesy of a so-called clash of civilizations. From the Cathedrals of Consumerism to the Enormous Edifices of Evangelism, from the Hubris of Imperialism to the Arrogance of Righteousness, it is the Empire itself, holding debauched neoliberal capitalism in one hand, the mutated, distorted principles of the Cross on the other, that has birthed this latest of Crusades into the lands of ancient history.

For it is America, through military might and the power of its weapons, though financial intimidation and market colonialism, that has proclaimed itself heir to the throne of Western imperialism, arrogantly declaring itself the next in line, of humankind’s great historical powers, to reach the apex of Empire. And so, as the maker of mankind’s new reality, as the molder of human destiny, the Pax Americana, through its legions of neoliberal capitalists, religious extremists, corporatist stooges and delusional neocons, has created a collision all its own making, a vicious cycle of hatred born and vengeance sought, of cause and effect, of boomeranging blowback, of making an enemy where none existed, of declaring war on an entire region of the planet.

Thus the fictional war on terror builds the momentum for it to invariably become real, for one billion Muslims – the vast majority peaceful and moderate – to see, and firmly believe, that a Crusade of Surge and Siege has thus been thrust upon them by Christian and uber-capitalist Amerika. By this method the fictional war on terror feeds itself, growing from an invention of fascist Amerika in search of enemies into a mature manifestation of anger and hatred, a true, and artificially engendered clash of civilizations gorging on the boiling animosity of East versus West.

Through momentum that has been building since September 2001, the architects of creative chaos, the designers of bogeymen, the fathers of shock capitalism, and the makers of artificial fear have coalesced into an amalgam of malevolence, planting the seed they hope will sprout a perpetual battle between Muslim and Christian, America and Middle Easterners. In the desert landscape of Muslim lands they have found an oasis from which to plant and grow a modern day crusade, not to reclaim the Holy Land, but to simply claim the vast fields of the Devil’s Excrement; not to rain freedom and democracy on uncivilized people, but to firmly plant permanence in strategic lands; not to bring Christianity to barbarians, but to violently force neoliberal capitalism down the throats of the Muslim world. Such is the method to the madness of the Crusade of Surge and Siege.


First they came for the Muslims…


Navigate from coast to coast, witnessing the persecution of Arab and Muslim groups, most set up by the same government that later concocts charges and smears against them in the usually unsuccessful attempt at maintaining the illusion of insecurity within the greater population. The state propagandists realize that in order to maintain the chimera of an enemy, that in order for the idea of terror to coagulate in the minds of the people, the illusion must be maintained that indeed an enemy exists. It must be made to look as though the enemy lives among us, that it is domestic as well as foreign, that it is planning to attack our way of life. This, of course, also creates the fantasy that the state is our protector, and that in order to protect us, we must sacrifice even more rights and freedoms for security.

The use of scapegoats, in this case the use of naïve, oftentimes incompetent, illiterate, indigent and sometimes even mentally deficient groups of Arab or Muslim men, usually with no political power and no financial resources, is part of a formula of fear designed inside the rubble of the Twin Towers that has been used to terrorize the American people into submitting to a fascist, despotic state. With every persecution of Arab and Muslim groups, charged with planning terrorist activity, usually with little or no proof, usually later found innocent by a court of law, the state further cements the fiction of fear and the illusion of perpetual insecurity in the citizenry. Propaganda makes bogeymen of scapegoats and scapegoats make obedient cowards of us all.

Of course every new persecution is met by a thunderous manifestation of corporate media coverage, bombarding the airwaves with the fictions and illusions of the charade that is the war on terror. There are enemies in our midst, we are told, dreaded bogeymen intent on killing us, trying to shoot up a mall, or blow up a building, or murder our children. Yet, as usually happens, when the alleged plot is discovered for the lie that it is, when the state is forced to drop charges, when a court of law throws out the case, when the innocent’s voice is validated and the condemned are once again free, there is not one camera or reporter or journalist ready or willing to bombard us with the truth. The blitzkrieg of guilt is suddenly replaced with the utter silence of innocence.

The damage, however, has already been done, for in the eyes of tens of millions the parade of fictions and the presumption of guilt that has so readily been beamed by the corporate media have already established the fear and insecurity that America is under siege by the barbarian horde and its evil religion. The illusion has thus been established, the excuse to erode yet more liberties has been successful, and the scapegoat has again been made the object of growing hatred. The people have again been manipulated, conditioned to hate the very idea of a Muslim or an Arab. The enemy has again been vilified, dehumanized and ostracized, the very term “Muslim” becoming denigrated, its practitioners and believers made to wear an invisible crescent moon on their breasts, becoming in many eyes unwelcome pariahs in the land of immigrants and the home of freedom.

Every new so-called uncovered plot, every new so-called uncovered threat, every new depiction of evil incarnate is, of course, used by the Ministry of Truth to validate the belief that the state is protecting us, that our sacrifice of freedoms and rights, that our submission to a police state has been of great service, that it is indeed working and must therefore continue, no matter how intrusive it becomes, no matter how much it destroys the Constitution and no matter how large Big Brother continues to grow. In the end, the formula of illusion, of imaginary enemies, of chosen scapegoats, works to create a harmonious narrative of terror abroad and terror at home, of a war on terror that must be perpetual and ceaseless, of a state working diligently to secure our freedom, our way of life, the American way.

The formula creates a submissive, compliant and acquiescent citizenry, one that does not blink at the mass murder of millions in the Middle East, at innumerable war crimes, at the use of torture and the creation of gulags. The scapegoating of Arab and Muslims by the state and the corporatist media has succeeded in fomenting a xenophobic hatred and anger against those people emanating from and residing in the Middle East. The mission has been accomplished, for the masses, thinking that the shredding of the Constitution has not affected them because they are not terrorists and have done nothing wrong, have voluntarily eviscerated their own rights and freedoms, for eventually, the crimes and horrors and human rights violations and erosion of liberties committed against the scapegoat class inevitably is imputed onto the majority. In a proto-fascist nation such as America, it is only a matter of time.

First the state comes for the chosen scapegoats, using them as the key to unlocking the rights and freedoms of the masses. The scapegoat is the excuse, the mirage to eviscerate the Constitution in the shadows, with the masses blinded to reality, and creating a new normal of fascism and tyranny. Thinking they are safe from the claws of the state, the masses eagerly give up more power and freedom and liberty in the belief that only the enemy is being targeted. Eventually, before the blink of a collective eye, the masses themselves are being eavesdropped, spied on, surveilled upon, interrogated, harassed, controlled, tortured and disappeared. Eventually, it is their rights and freedoms and liberties that no longer exist.

Told today’s eavesdropping and illegal wiretapping by the state is to spy on the few Muslim terrorists, and that immunity for state and corporations is needed for our vital security, we later learn that all Americans have been illegally spied on, that Big Brother is watching and listening and monitoring us all and that we have no recourse to halt or file suit or seek accountability against the same companies doing the spying. Thus yesterday’s malfeasance and criminality become the present’s new normal, and the closer we approach the precipice of despotism.

The formula works every time authoritarian entities are determined to destroy the fabric of a free and democratic people. It is written in humankind’s history books, yet it remains ignored and unlearned by those who refuse to know the history of man. It is in our history that our tendencies are deciphered. It is in our past that our patterns can be anticipated. In the end, compliant Americans become good Americans, freedom is replaced by tyranny, rights and liberties are usurped by a police and surveillance state and a constitutional past becomes a new normal of authoritarianism and corporatism.

This is what happens when the majority ignores the plight of a scapegoated minority that is powerless to fight the claws of a despotic state. This is what happens when the first signs of smoke over the horizon are seen and ignored, only later realizing, much too late to escape its wrath, that a raging inferno enveloping everything in its path has arrived. First they come for Muslims, then they come for us all.

Part Two of Three, "Cages of Conquest," will be posted on, 20th February, 2008

Manuel Valenzuela is a social critic, commentator, Internet essayist and author of Echoes in the Wind, a novel now published by Authorhouse.com . His essays appear regularly at various alternative news websites from around the globe. Mr. Valenzuela welcomes comments and can be reached at manuel@valenzuelas.net . He encourages readers to surf the collection of over 100 essays he has written which can be found visiting his archives and by searching the Internet. His next book, Beyond the Smoking Mirror: Reflections on America and Humanity, a collection of his essays, will be published in early 2007.

Paying Insurgents Not to Fight

By Paul Craig Roberts

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It is impossible to keep up with all the Bush regime’s lies. There are simply too many. Among the recent crop, one of the biggest is that the “surge” is working.

Launched last year, the "surge" was the extra 20,000-30,000 U.S. troops sent to Iraq. These few extra troops, Americans were told, would finally supply the necessary forces to pacify Iraq.

This claim never made any sense. The extra troops didn't raise the total number of U.S. soldiers to more than one-third the number every expert has said is necessary in order to successfully occupy Iraq.

The real purpose of the "surge" was to hide another deception. The Bush regime is paying Sunni insurgents $800,000 a day not to attack U.S. forces. That's right, 80,000 members of an "Awakening group," the "Sons of Iraq," a newly formed "U.S.-allied security force" consisting of Sunni insurgents, are being paid $10 a day each not to attack U.S. troops. Allegedly, the Sons of Iraq are now at work fighting al-Qaeda.

This is a much cheaper way to fight a war. We can only wonder why Bush didn't figure it out sooner.

The "surge" was also timed to take account of the near completion of neighborhood cleansing. Most of the violence in Iraq during the past five years has resulted from Sunnis and Shi'ites driving each other out of mixed neighborhoods. Had the two groups been capable of uniting against the U.S. troops, the U.S. would have been driven out of Iraq long ago. Instead, the Iraqis slaughtered each other and fought the Americans in their spare time.

In other words, the "surge" has had nothing to do with any decline in violence.

With the Sunni insurgents now on Uncle Sam's payroll, with neighborhoods segregated, and with Sadr's militia standing down, it is unclear who is still responsible for ongoing violence other than U.S. troops themselves. Somebody must still be fighting, however, because the U.S. is still conducting air strikes and is still unable to tell friend from foe.

On Feb. 16, the Los Angeles Times reported that a U.S. air strike managed to kill nine Iraqi civilians and three Sons of Iraq.

The Sunnis are abandoning their posts in protest, demanding an end to "errant" U.S. air strikes. Obviously, the Sunnis see an opportunity to increase their daily pay for not attacking Americans. Soon they will have consultants advising them how much they can demand in bribes before it pays the Americans to begin fighting the war under the old terms. If Sunnis are smart, they will split the gains. Currently, the Sunnis are getting shafted. They are only collecting $800,000 of the $275,000,000 it costs the U.S. to fight the war for one day. That's only about three-tenths of one percent, too much of a one-sided deal for the Americans.

If the Sunnis negotiate their cut to between one-quarter and one-half of the daily cost to the U.S. of the war, the Sunnis won’t need to share in the oil revenues, thus helping the three factions to get back together as a country. Even 20 percent of the daily cost of the war would be a good deal for the Sunnis. A long-term contract in this range would be expensive for Uncle Sam, but a great deal cheaper than John McCain’s commitment to a 100-year Iraqi war.

If Bush's war turns out to be as big a boon for the Sunnis as it has for Tony Blair, we might have a modern-day version of The Mouse That Roared – a movie about an impoverished country that attacked the U.S. in order to be defeated and receive foreign aid – only this time the money comes as a payoff for not fighting the occupiers.

As the world now knows, Blair's "dodgy dossier" about the threat allegedly posed by Iraq was a contrivance that allowed Blair to put British troops at the service of Bush's aggression in the Middle East. Now that Blair is out of his prime minister job, he has been rewarded with millions of dollars in sinecures from financial firms such as JP Morgan and millions more in speaking engagements. As part of the payoff, the Bush Republicans have even put Mrs. Blair on the lucrative lecture circuit.

Ask yourself, do you really think Blair knows enough high finance to be of any value as an adviser to JP Morgan, or enough about climate change to advise Zurich Financial on the subject? Do you really believe that after hearing all the vacuous speeches Blair has delivered in those many years in office anyone now wants to pay him huge fees to hear him give a speech? Even when it was free, people were sick of it.

Blair is simply collecting his payoff for selling out his country and sending British troops to die for American hegemony.

The Sunnis seem inclined to do the same thing if Bush will pay them enough.

Is the next phase of the Iraq war going to be a U.S.-Sunni alliance against the Shi'ites?

Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand.

CIA Attacks Inside Pakistan Without Approval

CIA Attacks Inside Pakistan Without Approval Unilateral Strike Called a Model For U.S. Operations in Pakistan

By Joby Warrick and Robin Wright

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In the predawn hours of Jan. 29, a CIA Predator aircraft flew in a slow arc above the Pakistani town of Mir Ali. The drone's operator, relying on information secretly passed to the CIA by local informants, clicked a computer mouse and sent the first of two Hellfire missiles hurtling toward a cluster of mud-brick buildings a few miles from the town center.

The missiles killed Abu Laith al-Libi, a senior al-Qaeda commander and a man who had repeatedly eluded the CIA's dragnet. It was the first successful strike against al-Qaeda's core leadership in two years, and it involved, U.S. officials say, an unusual degree of autonomy by the CIA inside Pakistan.

Having requested the Pakistani government's official permission for such strikes on previous occasions, only to be put off or turned down, this time the U.S. spy agency did not seek approval. The government of Pakistani President Pervez Musharraf was notified only as the operation was underway, according to the officials, who insisted on anonymity because of diplomatic sensitivities.

Officials say the incident was a model of how Washington often scores its rare victories these days in the fight against al-Qaeda inside Pakistan's national borders: It acts with assistance from well-paid sympathizers inside the country, but without getting the government's formal permission beforehand.

It is an approach that some U.S. officials say could be used more frequently this year, particularly if a power vacuum results from yesterday's election and associated political tumult. The administration also feels an increased sense of urgency about undermining al-Qaeda before President Bush leaves office, making it less hesitant, said one official familiar with the incident.

Independent actions by U.S. military forces on another country's sovereign territory are always controversial, and both U.S. and Pakistani officials have repeatedly sought to obscure operational details that would reveal that key decisions are sometimes made in the United States, not in Islamabad. Some Pentagon operations have been undertaken only after intense disputes with the State Department, which has worried that they might inflame Pakistani public resentment; the CIA itself has sometimes sought to put the brakes on because of anxieties about the consequences for its relationship with Pakistani intelligence officials.

U.S. military officials say, however, that the uneven performance of their Pakistani counterparts increasingly requires that Washington pursue the fight however it can, sometimes following an unorthodox path that leaves in the dark Pakistani military and intelligence officials who at best lack commitment and resolve and at worst lack sympathy for U.S. interests.

Top Bush administration policy officials -- who are increasingly worried about al-Qaeda's use of its sanctuary in remote, tribally ruled areas in northern Pakistan to dispatch trained terrorists to the West -- have quietly begun to accept the military's point of view, according to several sources familiar with the context of the Libi strike.

"In the past, it required getting approval from the highest levels," said one former intelligence official involved in planning for previous strikes. "You may have information that is valid for only 30 minutes. If you wait, the information is no longer valid."

But when the autonomous U.S. military operations in Pakistan succeed, support for them grows in Washington in probably the same proportion as Pakistani resentments increase. Even as U.S. officials ramp up the pressure on Musharraf to do more, Pakistan's embattled president has taken a harder line in public against cooperation in recent months, the sources said. "The posture that was evident two years ago is not evident," said a senior U.S. official who frequently visits the region.

A U.S. military official familiar with operations in the tribal areas, who spoke on the condition of anonymity because he was not authorized to talk about the operations, said: "We'll get these one-off flukes once every eight months or so, but that's still not a strategy -- it's not a plan. Every now and then something will come together. What that serves to do [is] it tamps down discussion about whether there is a better way to do it."

The Target Is Identified

During seven years of searching for Osama bin Laden and his followers, the U.S. government has deployed billions of dollars' worth of surveillance hardware to South Asia, from top-secret spy satellites to sophisticated eavesdropping gear for intercepting text messages and cellphone conversations.

Yet some of the initial clues that led to the Libi strike were decidedly low-tech, according to an account supplied by four officials briefed on the operation. The CIA declined to comment about the strike and neither confirmed nor denied its involvement.

Hours before the attack, multiple sources said, the CIA was alerted to a convoy of vehicles that bore all the signatures of al-Qaeda officers on the move. Local residents -- who two sources said were not connected to the Pakistani army or intelligence service -- began monitoring the cluster of vehicles as it passed through North Waziristan, a rugged, largely lawless province that borders Afghanistan.

Eventually the local sources determined that the convoy carried up to seven al-Qaeda operatives and one individual who appeared to be of high rank. Asked how the local support had been arranged, a U.S. official familiar with the episode said, "All it takes is bags of cash."

Kamran Bokhari, director of Middle East analysis for Strategic Forecasting, a private intelligence group, said the informants could have been recruits from the Afghanistan side of the border, where the U.S. military operates freely.

"People in this region don't recognize the border, which is very porous," Bokhari said. "It is very likely that our people were in contact with intelligence sources who frequent both sides and could provide some kind of targeting information."

Precisely what U.S. officials knew about the "high-value target" in the al-Qaeda convoy is unclear. Libi, a 41-year-old al-Qaeda commander who had slowly climbed to the No. 5 spot on the CIA's most wanted list, was a hulking figure who stood 6 feet 4 inches tall. He spoke Libyan-accented Arabic and learned to be cautious after narrowly escaping a previous CIA strike. U.S. intelligence officials say he directed several deadly attacks, including a bombing at a U.S. military base in Afghanistan last year that killed 23 people.

Alerted to the suspicious convoy, the CIA used a variety of surveillance techniques to follow its progression through Mir Ali, North Waziristan's second-largest town, and to a walled compound in a village on the town's outskirts.

The stopping place itself was an indication that these were important men: The compound was the home of Abdus Sattar, 45, a local TalibanBenazir Bhutto on Dec. 27. commander and an associate of Baitullah Mehsud, the man accused by both the CIA and Pakistan of plotting the assassination of

With all signs pointing to a unique target, CIA officials ordered the launch of a pilotless MQ-1B Predator aircraft, one of three kept at a secret base that the Pakistani government has allowed to be stationed inside the country. Launches from that base do not require government permission, officials said.

During the early hours of Jan. 29, the slow-moving, 27-foot-long plane circled the village before vectoring in to lock its camera sights on Sattar's compound. Watching intently were CIA and Air Force operators who controlled the aircraft's movements from an operations center at Creech Air Force Base in Nevada.

On orders from CIA officials in McLean, the operators in Nevada released the Predator's two AGM-114 Hellfire missiles -- 100-pound, rocket-propelled munitions tipped with a high-explosive warhead. The missiles tore into the compound's main building and an adjoining guesthouse where the al-Qaeda officers were believed to be staying.

Even when viewed from computer monitors thousands of miles away, the missiles' impact was stunning. The buildings were destroyed, and as many as 13 inhabitants were killed, U.S. officials said. The pictures captured after the attack were "not pretty," said one knowledgeable source.

Libi's death was confirmed by al-Qaeda, which announced his "martyrdom" on Feb. 1 in messages posted on the Web sites of sympathetic groups. One message hailed Libi as "the father of many lions who now own the land and mountains of jihadi Afghanistan" and said al-Qaeda's struggle "would not be defeated by the death of one person, no matter how important he may be."

A Temporary Impact

Publicly, reaction to the strike among U.S. and Pakistani leaders has been muted, with neither side appearing eager to call attention to an awkward, albeit successful, unilateral U.S. military operation. Some Pakistani government spokesmen have even questioned whether the terrorist leader was killed.

"It's not going to overwhelm their network or break anything up definitively," acknowledged a military official briefed on details of the Libi strike. He added: "We're now in a sit-and-wait mode until someone else pops up."

Richard A. Clarke, a former counterterrorism adviser to the Clinton and Bush administrations, said he has been told by those involved that the counterterror effort requires constant pressure on the Pakistani government.

"The United States has gotten into a pattern where it sends a high-level delegation over to beat Musharraf up, and then you find that within a week or two a high-value target has been identified. Then he ignores us for a while until we send over another high-level delegation," Clarke said.

Some officials also emphasized that such airstrikes have a marginal and temporary impact. And they do not yield the kind of intelligence dividends often associated with the live capture of terrorists -- documents, computers, equipment and diaries that could lead to further unraveling the network.

The officials stressed that despite the occasional tactical success against it, such as the Libi strike, the threat posed by al-Qaeda's presence in Pakistan has been growing. As a senior U.S. official briefed on the strike said: "Even a blind squirrel finds a nut now and then. But overall, we're in worse shape than we were 18 months ago."

Challenging Indian Land Trusts

By Michelle Chen

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Across Indian country, two things are never in short supply: rich natural resources and endemic poverty. That paradox is driving a longstanding battle between indigenous people and the government trust that holds money generated from their lands.

The class-action lawsuit, Cobell v. Kempthorne, targets a federal trust fund that handles revenues from activities like oil drilling and logging on land owned by individual Indians and tribes. The trust's financial operations-covering more than 56 million acres and dating back for more than a century-have left a spectacularly messy paper trail. Many beneficiaries say they are in the dark about how much has been paid out and what is still owed, and charge that the system has drained wealth from Indian communities.

"We know that the government collected our money, but it hasn't been paid to us as individual Indian beneficiaries," says Elouise Cobell, a Blackfeet Nation member who initiated the suit in 1996 on behalf of several hundred thousand account holders.

The battle is finally drawing to a close. On Jan. 30, U.S. District Judge James Robertson ruled that the trust's finances are beyond salvaging. Calling for a settlement, he denounced the Interior Department's "unrepaired, and irreparable, breach of its fiduciary duty over the last century."

The decision builds on a 1999 ruling that ordered a management overhaul and a complete accounting-to comply with the trust's orignal mandate and federal reforms enacted in 1994. As In These Times went to press, the Interior had not issued a formal legal response to the decision.

The department has spent years retooling its accounting systems, but various court reviews found the trust in chronic disarray. Not only are financial records inaccurate or missing, critics say, but many landowners have little information on their lands and lease activities, or even the value of their assets, aside from sporadic checks issued by the government.

The system disbursed about $300 million to individuals and $500 million to tribes last fiscal year, and holds hundreds of millions in individual-account funds.

Whatever the exact amount that has been unpaid, Cobell says, evidence of a swindle is strewn across Blackfeet territory. Though the earth is replete with oil, timber and other resources, she says, "there is poverty all over the place."

Around the turn of the 20th century, the government established the trust system to manage lands on behalf of Indians, based on the presumption that natives lacked the competency to control their resources. Today, the government says the trust functions primarily as an institutional conduit for land-based revenues, produced under agreements between landowners and business interests.

But the trust looks different from Jay Dusty Bull's spread, which spans about 8,500 acres near Browning, Mont. To the 23-year-old Blackfeet member, his family's grazing leases provide a financial boost but hardly compensate for the theft his ancestors suffered.

"A hundred years ago, were our Indians - who didn't speak English, who couldn't read or write - given that same opportunity?" he says. "No. 'Sign an X here. Here's $40.' Billions of dollars could have been taken off of our land a hundred years ago, and we don't know."

Defending its ongoing accounting work, the Interior argued that a "statistical sampling" of records for several thousand transactions had uncovered only a small percentage of errors, and that "additional work would neither produce a better result nor be cost effective."

But official probes haven't be so reassuring. In 2002, U.S. District Judge Royce Lamberth held then-Secretary Gale Norton in contempt for failing to initiate the historical accounting process years after Congress had mandated it. The Interior Department, he wrote, had "indisputably proven ... it is either unwilling or unable to administer [the trust] competently."

Court-appointed Special Master Alan Balaran reported similarly dismal findings. Inspecting a Dallas branch of the Minerals Management Office in 2003, he noted the "chaotic" disorganization of financial documents, along with the "unexplained presence of an industrial shredder" - before office staff forced him to leave.

Outside the courtroom, advocates have pressed Congress for legislation to completely overhaul the trust's management and accounting systems. For many landowners, balancing the government's books would be one small, overdue counterweight against a legacy of injustice.

"We need to have a much fairer process," Dusty Bull says. "[We need to] make sure that our children, our grandchildren, our generations to come, do not have to go through the same process."

A Rip-Off by Health Insurers?

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Have health insurers been systematically cheating patients and doctors of fair reimbursement for medical services? That is the disturbing possibility raised by an investigation of the industry's arcane procedures for calculating "reasonable and customary" rates.

The investigation, by the New York State attorney general, Andrew Cuomo, and his staff, suggests that these procedures - used by major insurance companies to determine what they will pay when patients visit a doctor who is not in the company's network - may be rigged to shortchange the beneficiaries.

When patients visit an out-of-network doctor, insurers typically agree to pay 80 percent of the reasonable and customary rate charged by doctors in the same geographic area. The patient is stuck with the rest, and as any patient knows, that rate always seems to fall short of what their own doctor is charging. If the attorney general's investigators are right, we can understand why.

The numbers are mainly compiled by an obscure company known as Ingenix, which - as it turns out - is owned by UnitedHealth Group, one of the nation's largest health insurers. Ingenix collects billing information from UnitedHealth and other health care payers to compile a database that is then used by the insurers to determine out-of-network reimbursement rates.

This system is an invitation for abuse. UnitedHealth owns the company whose database will affect its costs and profitability, so both have a strong financial interest in keeping reimbursement rates low. Even Ingenix seems unwilling to stand behind its numbers. In licensing its database to insurers, it stresses that the data is "for informational purposes only" and does not imply anything about "reasonable and customary" charges. Yet that is precisely what the health insurers use the data for, as Ingenix knows, according to investigators.

Mr. Cuomo and the American Medical Association, which has a long-standing suit filed against Ingenix and various UnitedHealth companies, claim that the data is manipulated. They claim that health insurers and Ingenix disproportionately eliminate high charges, thus skewing the numbers for customary charges downward.

Mr. Cuomo also says that Ingenix pools the charges for services performed by low-paid nurses and physician assistants with those performed by high-paid doctors. And he says the company fails to account for the patient's condition and type of facility where the service was provided - factors that can drive up costs. He also contends that Ingenix uses outdated information, which would guarantee that reimbursement rates will always lag behind medical inflation.

The A.M.A.'s more detailed legal complaint also charges that the database dilutes prices in high-cost locations by combining them with low-cost areas, and includes prices that reflect in-network discounts.

The attorney general's investigators did their own survey and concluded that $200 is the fair market rate in New York City and Nassau County for a 15-minute consultation with a doctor for an illness of low to moderate severity. Ingenix, the investigators said, calculated the rate as $77, of which United would pay $62, leaving the patient to pay $138. UnitedHealth disputes those numbers, so the attorney general will need to offer a fuller explanation of how they were derived.

Mr. Cuomo has announced his intention to sue UnitedHealth, Ingenix and three other subsidiaries, and has subpoenaed data from 16 other health insurers. Whatever that investigation unearths, it is already clear that the system for calculating "reasonable and customary" charges ought to be reformed by making it truly independent and objective. No consumer can reasonably trust numbers generated by a company whose loyalties and financial interests lie with the health insurers.

Low Unemployment Rate Hides Rise in Longterm Jobless

By Kevin G. Hall

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Washington - Bill Clinton's campaign famously defined the 1992 election with the phrase, "It's the economy, stupid." Today, "It's the jobs, stupid."

The latest employment figures, released in late January, showed a 52-month streak of job creation ending with a loss of 17,000 jobs in January. The Bush administration acknowledged the contraction, but pointed to the national unemployment rate of 4.9 percent to say that the labor market wasn't a harbinger of recession.

A closer look at unemployment data by McClatchy, however, found that jobless Americans are spending more time looking for work and that those who can't find work now make up a greater share of the unemployed.

Several measures of unemployment, in fact, show that the workforce is under the kind of stress not seen since March 2001, when the U.S. economy entered a nine-month recession, followed by a so-called jobless recovery.

Like much in economics, labor statistics are vexing because they can be seen as a glass half empty or half full.

The Bush administration points out that the percentage of workers unable to find work for 27 weeks or longer was only 0.9 percent of the overall workforce in January.

"So in terms of proportion of individuals who are facing long-term unemployment, it's about the same as it was in the mid-1990s and actually lower than throughout most of the past few years," said Edward Lazear, the chairman of the White House Council of Economic Advisers.

But when Americans unemployed for 27 weeks or longer are measured as a share of the total number of unemployed, the story is very different.

The long-term unemployed amounted to 18.3 percent of all the unemployed in January. That means that while overall unemployment is low, almost one in five unemployed workers has been jobless for six months or more.

"Long-term unemployment is really very interesting and in some ways a more telling indicator," said Jared Bernstein, a labor economist with the liberal Economic Policy Institute in Washington. "It basically says that given the particularly low level of unemployment, you'd expect a much lower share (of long-term unemployed) on the jobless rolls. Job creation has been anything but robust."

The institute published its estimates for chronic unemployment in 2007 by state, working from Labor Department data. It found that the long-term unemployed in nine states - including Wisconsin, which holds its presidential primary Tuesday - represented a full percent or more of the total state workforce. (The other states were Illinois, Michigan, Louisiana, Mississippi, Missouri, New York, Ohio and South Carolina.)

When the U.S. economy last went into recession, in March 2001, the unemployment rate was 5.7 percent and the long-term unemployed made up 11.1 percent of all unemployed. That number reached the 18 percent range 14 months later and peaked at 23.4 percent during a single month in both 2004 and 2005.

These statistics suggest that if the United States is in a recession - still a subject of debate among economists - the nation is entering an economic contraction with a much higher rate of chronically unemployed than it did during the nine-month recession in 2001.

"It's a critically important linchpin because, although we get excited about every bip and bop in the stock market, it's the labor market that matters most to most people. They're depending on their paycheck, not their stock portfolios," Bernstein said. "If the labor market is not producing enough jobs or hours of work, that's going to show up as diminished income growth and less consumption."

The Bureau of Labor Statistics is avoiding taking sides.

"We try very much to tell people to not just look at a couple of numbers because the story gets so much more complex," said Thomas Nardone, a veteran statistician and BLS assistant commissioner.

The Economic Report of the President, which the Bush administration released on Feb. 11, contains another warning flag, however. The report confirmed that the median, or midpoint, duration of the time it takes a worker to find a new job rose to 8.4 weeks in 2007 from 7.5 weeks in 2006.

But the Bush administration is quick to note that Americans still can get work.

More than "80 percent of the people looking for a job will find a job in 26 weeks. That is what all the statistics show," said Commerce Secretary Carlos Gutierrez in a recent interview.

That half-full view is shared by James Sherk, a labor economist at the Heritage Foundation, a conservative policy research group.

"It's kind of hard to point at that to say that this is a tremendously serious problem here," he said, suggesting that the long-term unemployment picture is skewed by unemployment in troubled states that have lost manufacturing jobs.

If there's disagreement over what measure of chronic unemployment tells the real story, other gauges developed by the Labor Department's Bureau of Labor Statistics show a strain on the quality of employment.

The gauges came into use in 1994 to measure things such as part-time workers who are unable to get full-time jobs, and Americans who aren't employed or aren't looking but said they'd take jobs if they became available.

Those groups of workers together accounted for 9 percent of the labor force in January. In March 2001, at the start of the last recession, they were 7.6 percent of the workforce.

In addition, in January, 4.7 million people were working part time in the United States, up sharply from about 3.3 million in March 2001. During the last slowdown, the number passed 4 million in the final months of that recession and fell below that only once since, in April 2006.

"If you did a survey of people just walking up the street (they'd say they could find work) ... it may not be what they want, but they probably could get a job," said Sharon Morgan, an area director of a state workforce center in Liberty, S.C., a region hit hard by the closure of textile mills.

The number of multiple jobholders nationwide exceeded 7.6 million in 2007, the highest number since 1999. As a percentage of the employed, they made up 5.2 percent of workforce, down from 5.8 percent in 1999.

Supreme Court Won't Review Bush Domestic Spying Case

By James Vicini

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Washington - The Supreme Court on Tuesday turned down a legal challenge to the warrantless domestic spying program President George W. Bush created after the September 11 attacks.

The American Civil Liberties Union had asked the justices to hear the case after a lower court ruled the ACLU, other groups and individuals that sued the government had no legal right to do so because they could not prove they had been affected by the program.

The civil liberties group also asked the nation's highest court to make clear that Bush does not have the power under the U.S. Constitution to engage in intelligence surveillance within the United States that Congress has expressly prohibited.

"The president is bound by the laws that Congress enacts. He may disagree with those laws, but he may not disobey them," Jameel Jaffer, director of the ACLU's National Security Project, said in the appeal.

Bush authorized the program to monitor international phone calls and e-mails of U.S. citizens without first obtaining a court warrant. The program's disclosure in December 2005 caused a political uproar among Democrats, some Republicans and civil liberties activists.

The administration abandoned the program about a year ago, putting it under the surveillance court that Congress created more than 30 years ago.

The high court's action means that Bush will be able to disregard whatever legislative eavesdropping restrictions Congress adopts as there will be no meaningful judicial review, the ACLU attorneys said.

The journalists, scholars, attorneys and national advocacy groups that filed the lawsuit said the illegal surveillance had disrupted their ability to communicate with sources and clients.

The appeals court based in Cincinnati dismissed the case because the plaintiffs could not state with certainty they had been wiretapped by the government's National Security Agency.

Administration lawyers opposed the appeal and said further review by the Supreme Court was unwarranted.

The Supreme Court sided with the administration and rejected the appeal without any comment.

Short Maternity Leaves, Long Deployments

By Ann Scott Tyson

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Schedule sends Army moms back to the field quickly.

"Little man, I love you! Mommy misses you," Spec. Amy Shaw spoke softly as she looked into the video camera in her Baghdad barracks, surrounded by photographs of tiny Connor James, the infant son she left behind in Wisconsin. "Mommy'll be home soon."

Connor was three months old when Shaw and her husband, Brad, a sergeant with the military police, began a 15-month deployment to Iraq, their second tour in the combat zone. Like thousands of other new military mothers, the 22-year-old Army medic faced a stark choice: Give birth and quickly leave the baby behind, or lose her job.

Many female soldiers hoping to start families face the prospect of missing most of their child's first year. The Army grants six weeks of maternity leave before a new mother must return to her job or training, and four months until she can be sent to a war zone. The Marine Corps and Navy allow from six months to a year before a new mother must deploy.

The wars in Iraq and Afghanistan have placed severe strains on the Army, including longer deployments in which soldiers serve 15 months in the war zone, followed by 12 months at home. Under that system, a woman who wishes to have a child and remain with her unit must conceive soon after returning home so she can give birth, recover and prepare for her next overseas tour.

Female soldiers interviewed over the past year say the tight schedule cuts short precious time for mother and infant to bond and breast-feed, forcing women to choose between their loyalty to their comrades - as well as their careers - and nurturing their families.

Shaw had spent less than four months with Connor when her medical company shipped out with the 4th Brigade of the 1st Infantry Division, one of the five brigades President Bush sent to Iraq last year during a troop buildup. Now an ocean apart from her firstborn child, she is doing everything she can to remain a presence in her son's life, hoping that if nothing else he will recognize her voice when she returns.

"I do phone calls. I do e-mails," she said, sitting on her bed holding a large photograph of Connor on her lap. "I use Web cam, letters, packages - things like that - the best I can."

The constraints on reproduction, child-rearing and family are a key factor leading many female soldiers to quit the Army, and have discouraged many civilian women from considering enlistment, according to Army officials. Surveys show that time away from families, because of long, frequent deployments, is the top reason for soldiers to leave the Army. The willingness of women to serve in the military has dropped faster than that of men in recent years, from a high of 10 percent among 16- to 21-year-olds in November 2003 to 4 percent last July, according to periodic youth surveys on "propensity to serve" conducted for the Army.

"With the operations tempo that we have right now, it makes it hard to work in family planning and being able to deploy with your units," said Army Capt. Stephanie Cediel, who served in Iraq while her son was a toddler and delayed having a hoped-for second child because of the stress of deployments.

Shaw works 12 hours a day, with half a day off each week, handling everything from sprained ankles to shrapnel wounds and amputations. "The months just run together," she said last week in an interview from Baghdad. "Once you hit that year mark, you are like, 'Last time I deployed I was already at home. Now I'm still here.'"

Husband Brad sends e-mails to Connor about life in Iraq, which Shaw's mother reads aloud to the baby. Shaw said she tries to call Connor three or four times a week, and her mother holds the phone to the boy's ear.

"I tell him how my day's gone," Shaw explains. But, she admits, "it's pretty much a one-sided conversation."

The challenges are exacerbated today because far more women and couples with children are serving. Nearly 40 percent of women on active duty have children.

Women make up about 15 percent of today's military, and about half of them have deployed for the anti-terrorism campaign at least once since 2001, and more than 25,000 are deployed in that fight now.

The men who serve miss out, too, but they have a chance, with careful timing, to deploy while their wives are pregnant and return for much of the child's first year.

Over a chow-hall meal at another Baghdad camp, Sgt. Georgette Oakley, 27, described how she had to leave behind five children and stepchildren from a blended family. Oakley said she and her husband, also an Army sergeant, want to have another baby, but they will not be able to until at least 2009. "Once we both get back, we'll have one together," she said.

About 10 percent of women in the military become pregnant each year, and an estimated 75,000 military offspring are younger than 1, according to the Government Accountability Office. Pregnant soldiers have the option of leaving the service, although some officers are required to first complete their remaining service obligation; all are prohibited from deploying until four months after delivery, unless granted a waiver.

"Without women we would not make our volunteer numbers, so if we destroy the interest of women to volunteer it puts us in a particularly bad place, because the nation does not want a draft," said Maj. Gen. Gale Pollock, deputy Army surgeon general for force management.

"We need to look at the fact that many women want to serve but they also want to be mothers," Pollock said. "It's a medical issue, it's a mental health issue. Your ability to bond with your children is ... very important."

Pollock said last summer that she had proposed that the Army double the time women are exempt from deployment from four to eight months, noting that she would prefer 12 months. "That addresses the need for breast-feeding that is important for health, and also allows for optimal bonding time," she said.

So far, Army policy remains unchanged, spokeswoman Cynthia Vaughan said this month. Senior Army officials declined requests to explain the reasoning behind the current policy.

Other services grant longer exemptions, and all have generally shorter deployments: The Navy exemption is 12 months, and the Marine Corps's is six months, and deployments average seven months for both. The Air Force has a four-month exemption, but its deployments average only four to six months.

When Shaw became pregnant and learned that her Army unit would deploy, she had the option of getting out altogether. But she took pride in her work and needed the income. "I'd like to be a stay-at-home mom, but financially it's hard," she said.

So Shaw made what she calls one of the hardest decisions of her life. Six weeks after delivery, on Oct. 13, 2006, she left Connor with a sitter so she could return to weapons training. Then, before her son could sit up, crawl or cut a tooth, Shaw and her husband left for Iraq in early February, leaving Connor with her parents in Wisconsin.

What is most heart-wrenching, Shaw said, is "not seeing all the firsts that moms get to see.... I have to see it on video or get it in pictures." At the same time, "I have a lot more worries because he's thousands of miles away," she said.

In late October, Shaw and her husband took a two-week leave to Appleton, Wis., where Connor's grandmother, Joan Baerenwald, is caring for the baby. Baerenwald is the one who kisses Connor's scrapes while her husband, Dan, works at the local paper mill. She is the one Connor calls "Mama."

"I told my daughter, 'Don't be surprised, don't get upset,'" Baerenwald said in a phone interview, explaining that Connor simply cannot say "Grandma" yet. "You're not taking away their motherhood," she said, but she admits that Shaw is "missing out on so much of Connor."

During the visit to Wisconsin, Shaw was relieved to find that Connor did not cry or fuss when she picked him up, but Baerenwald had to help her with "little quirks" in eating and sleeping, Shaw said.

The Shaws took Connor alone to visit Brad's parents in Maine, where they "learned he's a handful," Baerenwald said.

In a drab room back in Baghdad, Shaw is comforted somewhat by the thought that her son does not know he is without his parents. "I'd rather be here now than maybe when he's 4 or 5 and he's saying, 'Where's Mom? Where's Dad?'" she said.

As she packs a box of gifts - a teddy bear, a tiny Operation Iraqi Freedom hat and a T-shirt that says "My Mom is over there" - Shaw shares the hope of having another child someday. But of how she would do that, with an obligation to stay in the Army until 2010 and the prospect of more deployments, she said simply: "I have no clue."

Holes in the Wall: Homeland Security Won't Explain Why the Mexican Border Wall Bypasses the Rich and Connected

By Melissa del Bosque

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Texas resident Eloisa Tamez wants to know why her land is getting a border wall, while a nearby golf course and resort remain untouched.

As the U.S. Department of Homeland Security marches down the Texas border serving condemnation lawsuits to frightened landowners, Brownsville resident Eloisa Tamez, 72, has one simple question. She would like to know why her land is being targeted for destruction by a border wall, while a nearby golf course and resort remain untouched.

Tamez, a nursing director at the University of Texas at Brownsville, is one of the last of the Spanish land grant heirs in Cameron County. Her ancestors once owned 12,000 acres. In the 1930s, the federal government took more than half of her inherited land, without paying a cent, to build flood levees.

Now Homeland Security wants to put an 18-foot steel and concrete wall through what remains.

While the border wall will go through her backyard and effectively destroy her home, it will stop at the edge of the River Bend Resort and golf course, a popular Winter Texan retreat two miles down the road. The wall starts up again on the other side of the resort.

"It has a golf course and all of the amenities," Tamez says. "There are no plans to build a wall there. If the wall is so important for security, then why are we skipping parts?"

Along the border, preliminary plans for fencing seem to target landowners of modest means and cities and public institutions such as the University of Texas at Brownsville, which rely on the federal government to pay their bills.

A visit to the River Bend Resort in late January reveals row after row of RVs and trailers with license plates from chilly northern U.S. states and Canadian provinces. At the edge of a lush, green golf course, a Winter Texan from Canada enjoys the mild, South Texas winter and the landscaped ponds, where white egrets pause to contemplate golf carts whizzing past. The woman, who declines to give her name, recounts that illegal immigrants had crossed the golf course once while she was teeing off. They were promptly detained by Border Patrol agents, she says, adding that agents often park their SUVs at the edge of the golf course.

River Bend Resort is owned by John Allburg, who incorporated the business in 1983 as River Bend Resort, Inc. Allburg refused to comment for this article. A scan of the Federal Election Commission and Texas Ethics Commission databases did not find any political contributions linked to Allburg.

Just 69 miles north, Daniel Garza, 76, faces a similar situation with a neighbor who has political connections that reach the White House. In the small town of Granjeno, population 313, Garza points to a field across the street where a segment of the proposed 18-foot high border wall would abruptly end after passing through his brick home and a small, yellow house he gave his son. "All that land over there is owned by the Hunts," he says, waving a hand toward the horizon. "The wall doesn't go there."

In this area everyone knows the Hunts. Dallas billionaire Ray L. Hunt and his relatives are one of the wealthiest oil and gas dynasties in the world. Hunt, a close friend of President George W. Bush, recently donated $35 million to Southern Methodist University to help build Bush's presidential library. In 2001, Bush made him a member of the Foreign Intelligence Advisory Board, where Hunt received a security clearance and access to classified intelligence.

Over the years, Hunt has transformed his 6,000-acre property, called the Sharyland Plantation, from acres of onions and vegetables into swathes of exclusive, gated communities where houses sell from $650,000 to $1 million and residents enjoy golf courses, elementary schools, and a sports park. The plantation contains an 1,800-acre business park and Sharyland Utilities, run by Hunt's son Hunter, which delivers electricity to plantation residents and Mexican factories.

The development's Web site touts its proximity to the international border and the new Anzalduas International Bridge now under construction, built on land Hunt donated. Hunt has also formed Hunt Mexico with a wealthy Mexican business partner to develop both sides of the border into a lucrative trade corridor the size of Manhattan.

Jeanne Phillips, a spokesperson for Hunt Consolidated Inc., says that since the company is private, it doesn't have to identify the Mexican partner. Phillips says, however, that no one from the company has been directly involved in siting the fence. "We, like other citizens in the Valley, have waited for the federal government to designate the location of the wall," she says.

Garza stands in front of his modest brick home, which he built for his retirement after 50 years as a migrant farmworker. For the past five months, he has stayed awake nights trying to find a way to stop the gears of bureaucracy from grinding over his home.

A February 8 announcement by Homeland Security Secretary Michael Chertoff said the agency would settle for building the fence atop the levee behind Garza's house instead of through it, which has given Garza some hope. Like Tamez, he wonders why his home and small town were targeted by Homeland Security in the first place.

"I don't see why they have to destroy my home, my land, and let the wall end there." He points across the street to Hunt's land. "How will that stop illegal immigration?"

Most border residents couldn't believe the fence would ever be built through their homes and communities. They expected it to run along the banks of the Rio Grande, not north of the flood levees - in some cases like Tamez's, as far as a mile north of the river. So it came as a shock last summer when residents were approached by uniformed Border Patrol agents. They asked people to sign waivers allowing Homeland Security to survey their properties for construction of the wall. When they declined, Homeland Security filed condemnation suits.

In time, local landowners realized that the fence's location had everything to do with politics and private profit, and nothing to do with stopping illegal immigration.

In 2006, Congress passed the Secure Fence Act, authored by Republican Congressman Peter King from New York. The legislation mandated that 700 miles of double-fencing be built along the southern border from California to Texas. The bill detailed where the fencing, or, as many people along the border call it, "the wall," would be built. After a year of inflamed rhetoric about the plague of illegal immigration and Congress's failure to pass comprehensive immigration reform, the bill passed with overwhelming support from Republicans and a few Democrats. All the Texas border members of the U.S. House of Representatives, except San Antonio Republican Henry Bonilla, voted against it. Texas Sens. Kay Bailey Hutchison and John Cornyn voted for the bill.

On August 10, 2007, Chertoff announced his agency would scale back the initial 700 miles of fencing to 370 miles, to be built in segments across the southern border. Chertoff cited budget shortages and technological difficulties as justifications for not complying with the bill.

How did his agency decide where to build the segments? Chad Foster, the mayor of Eagle Pass, says he thought it was a simple enough question and that the answer would be based on data and facts. Foster chairs the Texas Border Coalition. TBC, as Foster calls it, is a group of border mayors and business leaders who have repeatedly traveled to Washington for the past 18 months to try to get federal officials to listen to them.

Foster says he has never received any logical answers from Homeland Security as to why certain areas in his city had been targeted for fencing over other areas. "I puzzled a while over why the fence would bypass the industrial park and go through the city park," he says.

Despite terse meetings with Chertoff, Foster and other coalition members say the conversation has been one-sided.

"I think we have a government within a government," Foster says. "[This is] a tremendous bureaucracy - DHS is just a monster."

The Observer called Homeland Security in Washington to find out how it had decided where to build the fence. The voice mail system sputtered through a dizzying array of acronyms: DOJ, USACE, CBP, and USCIS. On the second call a media spokesperson with a weary voice directed queries to Michael Friel, the fence spokesman for Customs and Border Protection. Six calls and two e-mails later, Friel responded with a curt e-mail: "Got your message. Working on answers…" it said. Days passed, and Friel's answers never came.

Since Homeland Security wasn't providing answers, perhaps Congress would. Phone conversations with congressional offices ranged from "but they aren't even building a wall" to "I don't know. That's a good question." At the sixth congressional office contacted, a GOP staffer who asked not to be identified, but who is familiar with the fence, says the fencing locations stemmed from statistics showing high apprehension and narcotic seizure rates. This seems questionable, since maps released by the U.S. Army Corps of Engineers showed the wall going through such properties as the University of Texas at Brownsville - hardly a hotbed for drug smugglers and immigrant trafficking.

Questioned more about where the data came from, the staffer said she would enquire further. The next day she called back. "The border fence is being handled by Greg Giddens at the Secure Border Initiative Office within the U.S. Customs and Border Protection office," she said.

Giddens is executive director of the SBI, as it is called, which is in charge of SBInet, a consortium of private contractors led by Boeing Co. The group received a multibillion dollar contract in 2006 to secure the northern and southern borders with a network of vehicle barriers, fencing, and surveillance systems. Companies Boeing chose to secure the southern border from terrorists include DRS Technologies Inc., Kollsman Inc., L-3 Communications Inc., Perot Systems Corp., and a unit of Unisys Corp.

A February 2007 audit by the U.S. Government Accountability Office cited Homeland Security and the SBInet project for poor fiscal oversight and a lack of demonstrable objectives. The GAO audit team recommended that Homeland Security place a spending limit on the Boeing contract for SBInet since the company had been awarded an "indefinite delivery/indefinite quantity contract for 3 years with three 1-year options."

The agency rejected the auditors' recommendation, saying 6,000 miles of border is limitation enough.

In a February 2007 hearing, Congressman Henry Waxman, a California Democrat and the chairman of the Oversight and Government Reform Committee, had more scathing remarks for Giddens and the SBInet project. "As of December, the Department of Homeland Security had hired a staff of 98 to oversee the new SBInet contract. This may seem like progress until you ask who these overseers are. More than half are private contractors. Some of these private contractors even work for companies that are business partners of Boeing, the company they are supposed to be overseeing. And from what we are now learning from the department, this may be just the tip of the iceberg."

Waxman said of SBInet that "virtually every detail is being outsourced from the government to private contractors. The government is relying on private contractors to design the programs, build them, and even conduct oversight over them."

A phone call to Giddens at SBI is referred to Loren Flossman, who's in charge of tactical infrastructure for the office. Flossman says all data regarding the placement of the fence is classified because "you don't want to tell the very people you're trying to keep from coming across the methodology used to deter them."

Flossman also calls the University of Texas at Brownsville campus a problem area for illegal immigration. "I wouldn't assume that these are folks that aren't intelligent enough that if they dress a certain way, they're gonna fit in," he says.

Chief John Cardoza, head of the UT-Brownsville police, says the Border Patrol would have to advise his police force of any immigrant smuggling or narcotic seizures that happen on campus. "If it's happening on my campus, I'm not being told about it," he says. Cardoza says he has never come across illegal immigrants dressed as students.

Flossman goes on to say that Boeing isn't building the fence, but is providing steel for it. Eric Mazzacone, a spokesman for Boeing, refers the Observer to Michael Friel at Customs and Border Protection, and intercedes to get him on the phone. Friel confirms that Boeing has just finished building a 30-mile stretch of fence in Arizona, but insists other questions be submitted in writing.

Boeing, a multibillion dollar aero-defense company, is the second-largest defense contractor in the nation. The company has powerful board members, such as William M. Daley, former U.S. secretary of commerce; retired Gen. James L. Jones, former supreme allied commander in Europe; and Kenneth M. Duberstein, a former White House chief of staff. The corporation is also one of the biggest political contributors in Washington, giving more than $9 million to Democratic and Republican members of Congress in the last decade. In 2006, the year the Secure Fence Act was passed, Boeing gave more than $1.4 million to Democrats and Republicans, according to the Center for Responsive Politics.

A majority of this money has gone to legislators such as Congressman Duncan Hunter, the California Republican who championed the Secure Fence Act. In 2006, Hunter received at least $10,000 from Boeing and more than $93,000 from defense companies bidding for the SBInet contract, according to the center. During his failed bid this year for the White House, Hunter made illegal immigration and building a border fence the major themes of his campaign.

In early February 2008, Chertoff asked Congress for $12 billion for border security. He included $775 million for the SBInet program, despite the fact that congressional leaders still can't get straight answers from Homeland Security about the program. As recently as January 31, Senate Homeland Security and Governmental Affairs Committee members sent a letter to Chertoff asking for "greater clarity on [the Customs and Border Protection office's] operational objectives for SBInet and the projected milestones and anticipated costs for the project." They have yet to receive a response.

Boeing continues to hire companies for the SBInet project. And the congressional districts of backers of the border fence continue to benefit. A recent Long Island Business News article trumpeted the success of Telephonics Corp., a local business, in Congressman King's congressional district that won a $14.5 million bid to provide a mobile surveillance system under SBInet to protect the southern border.

While Garza and Tamez wait for answers, they say they are being asked to sacrifice something that can't be replaced by money. They are giving up their land, their homes, their heritage, and the few remaining acres left to them that they hoped to pass on to their children and grandchildren.

"I am an old man. I have colon cancer, and I am 76 years old," Garza says, resting against a tree in front of his home. "All I do is worry about whether they will take my home. My wife keeps asking me, 'What are we going to do?'"

Besides these personal tragedies, Eagle Pass Mayor Foster says there is another tragedy in store for the American taxpayer. A 2007 congressional report estimates the cost of maintaining and building the fence could be as much as $49 billion over its expected 25-year life span.

"They are just going to push this problem on the next administration, and nobody is going to talk about immigration reform, and that's the illness," Foster says. "The wall is a Band-Aid on the problem. And to blow $49 billion and not walk away with a secure border - that's a travesty."

Corporate Lobbyists Have Turned Human Rights into a Tradeable Commodity

By Todd Tucker

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It's our unfortunate duty here at EOT to have to read some truly mind-numbing trade law analyses of domestic regulation. For instance, have you ever really thought about whether electricity is a good or a service? Yesterday, I had to read through a 1998 WTO document that goes through this metaphysical question in excruciating detail. Short answer: if your electricity comes from coal, well then the coal itself is a good. But once it becomes electricity, it's probably a service, because you can't plop a piece of electricity down on your dinner plate.

Since the Bush I and Clinton I administrations committed many energy-related services to the restrictive WTO service sectorClinton, McCain and Obama's proposals on energy could run afoul of WTO rules. So if the political reasons to talk fair trade weren't compelling enough, there's plenty of good policy reasons as well. agreements, there's a good chance that many of

You may ask yourself, how did we get to the point where lawyers sat around thinking of basic human rights to turn into "tradeable commodities/services"? To paraphrase Larry the Cable Guy, this 1992 intellectual history article by William Drake and Kalypso Nicolaidis shows how corporate lobbyists "got-r-done":

The very act of defining services transactions as 'trade' established normative presumptions that 'free' trade was the yardstick for good policy against which regulations, redefined as nontariff barriers (NTBs), should be measured and justified only exceptionally. Members believing there to be many justifiable exceptions thus had to defend what their counterparts label 'protectionism.'… [the services trade lobby's] body of work took on the attributes of a social science literature in which authors cited, critiqued, and built on each other's analyses. But unlike most academic debates, in which contending theories and assumptions remain contested, the services discussion produced broad and lasting consensus on core concepts and objectives. Community members were by now unanimous in their dedication to the common policy project of placing services on the GATT agenda, and this relevance test precluded meta-theoretical differences of the sort familiar to political scientists. Disagreements were confined to the issue of which GATT principles and processes were right for which transactions, rather than to the question of whether services should be treated as trade in the first place.

This gets back to my point about how savvy corporate interests are at incrementalism. You don't have to totally commoditize everything in a single day or single WTO round: just getting some definitions on the table can get the corporate animal spirits spirited up. Before you know it, public interest advocates are on the defensive, having to articulate why they thought regulation was necessary in the first place. And unfortunately, even many of our best politicians attempt to strike a "middle ground" between the previously unthinkable corporate takeover and the public interest, leading to a continual rightward drift.

Todd Tucker is research director with Public Citizen's Global Trade Watch.

East Timor: Official “assassination” claims collapse

By Mike Head

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After just one week, the official version of the February 11 events in East Timor—that army rebel Alfredo Reinado, attempted a “coup” and “double assassination” against President Jose Ramos-Horta and Prime Minister Xanana Gusmao—is in tatters. As Australian journalist Paul Toohey noted last Saturday, “virtually no one in East Timor believes it [the assassination plot]”.

While much remains unclear, one thing is certain. The alleged plot has been exploited to bolster the hand of two players: Gusmao and his unstable coalition government, and the Australian government of Prime Minister Kevin Rudd.

Rudd flew into East Timor last Friday and immediately declared that Australian troops would remain there indefinitely. The night before, Rudd told the Australian Broadcasting Corporation’s “Lateline” program that the events in East Timor were “murky” and his visit would help the Australian government ascertain the facts.

Rudd’s brief stopover was no fact-finding mission, however. It was a show of force. After a perfunctory meeting with Gusmao, Rudd convened a media conference and vowed to stand “shoulder-to-shoulder” with Gusmao’s government. Flanked by Australian Defence Force chief Angus Houston and Australian Federal Police chief Bill Keelty, he denounced “this brutal and violent assault on the democratically elected leaders of this wonderful country”.

Rudd spent most of his four-hour visit being photographed with Australian soldiers and police. He said they would stay for as long as the Timorese government requested, repeatedly claiming that this would be at the invitation of the “democratically elected” Dili government. It is clear, however, that the events have been used to prop up Gusmao government’s and reinforce its political and security dependence on Canberra.

Australian soldiers took control of sections of Dili and nearby towns, patrolling in armoured vehicles, setting up roadblocks, searching vehicles and enforcing a nighttime curfew. Gusmao then extended a declared state of emergency for another 10 days until February 23. Apart from imposing an 8 p.m. to 6 a.m. curfew, the declaration bans demonstrations and gatherings, and expands police powers.

In a particularly sinister move, about 80 SAS commandos were among the 340 Australian military and police personnel dispatched to East Timor last Tuesday (counting the crew of a naval warship, the HMAS Perth)—taking the total Australian security contingent to more than 1,100. The SAS units have been sent into East Timor’s mountains to hunt down Renaido’s surviving supporters, several of whom have alleged that Reinado was “set-up” and killed by East Timorese soldiers outside Horta’s house. According to media reports, the SAS has been authorised, at Gusmao’s request, to use lethal force.

Reinado killed after deal with Ramos-Horta

For all the official and media hype about “assassination” plots, the fact is that both men who were actually targeted—Reinado and Ramos-Horta—had struck a peace deal just four weeks earlier. It has been established that Reinado was killed at Ramos-Horta’s villa well before the president came under fire, and at least 90 minutes before Gusmao’s vehicle was allegedly shot at by unknown assailants, some 10 kilometres away.

An anonymous friend of Ramos-Horta’s told the Associated Press that a gun battle raged for around 30 minutes before Ramos-Horta returned from his customary morning walk. After being warned of gunfire, Ramos-Horta refused a ride from a passing vehicle and walked back to the house, escorted only by two bodyguards with pistols. This sequence of events was confirmed by unnamed military sources, who told the Age that, half an hour before Ramos-Horta’s arrival, Reinado was shot in the face by a member of a team of guards who had arrived to relieve the night guards and saw Reinado in the house.

An examination of Renaido’s body, which was released to his family for burial last Thursday, revealed that he had been shot three times, through the left eye, left breast and neck. His bodyguard, a former military policeman Leopoldino, was also killed. By contrast, Ramos-Horta, who remains hospitalised in a serious condition in the northern Australian city of Darwin, was shot in the back. Relatives, friends and associates of Reinado have alleged that he was shot by a waiting party of soldiers from the Timorese military, the F-FDTL.

According to the Australian’s Toohey, two of the men who were with Reinado on February 11 have told Reinado’s adoptive father, Victor Alves, that F-FDTL troops shot Ramos-Horta from behind while they were hiding inside the residence’s compound. Among those insisting that Reinado was lured to the house to be assassinated is Angelita Pires, a Timorese-born Australian woman, who was dramatically arrested yesterday in connection with the February 11 attacks.

It remains unclear how Reinado entered Ramos-Horta’s house, and why he was there. It is quite possible that he was at the residence, with Ramos-Horta’s explicit or tacit permission, to seek further talks with the president. Radio Timor Leste reported that Reinado was not an attacker but had been a guest in Ramos-Horta’s villa for up to a week, and had run out of the house to try to stop the attack.

A motive for the shootings became clearer when photographs were published in the Age and Sydney Morning Herald last Saturday of Reinado and Ramos-Horta standing smiling together with supporters after a clandestine meeting on January 13, where a deal had been struck to end the two-year rebellion by Reinado and some 600 “petitioners”—disgruntled former soldiers.

Ramos-Horta had gone unarmed and without security to the mountain village of Maubisse to discuss the plan, brokered by the Centre for Humanitarian Dialogue in Geneva. It was agreed that Reinado and his men would surrender to house arrest, and be tried on charges of murder and armed rebellion, but be pardoned by Ramos-Horta under an amnesty to be declared on May 20, the sixth anniversary of the formal independence of the former Portuguese and Indonesian colony.

East Timor’s Economics Minister Joao Goncalves told the Fairfax-owned newspapers that the rendezvous was relaxed and friendly, and a deal was essentially done. After a lunch of goat, lamb and chicken, washed down by wine, Reinado and Ramos-Horta parted with a handshake, agreeing to meet again within days.

In an apparent move to undercut the deal, however, Gusmao reportedly arranged a meeting with disaffected and sacked soldiers, some loyal to Renaido’s ally, Gastao Salsinha. The prime minister allegedly offered the rebels a compensation package of three years’ salary or reinstatement to the army, an offer that threatened to isolate Reinado.

Last December, Gusmao issued an ultimatum to Reinado, demanding his immediate surrender. Reinado responded in January by releasing a DVD statement, accusing Gusmao of being the puppet master and “author of the petition” behind the army rebellion and violence that led to the Australian military intervention in 2006 and ultimately forced the resignation of Fretilin Prime Minister Mari Alkatiri.

Renaido’s allegations were extensively reported in East Timor, but blacked out by the Australian media. Alkatiri asked Gusmao to answer the allegations in parliament, but Gusmao refused. When local reporters pressed Gusmao, he warned that if they pursued the story and interviewed Reinado, they could be arrested.

Renaido’s claims rang true. As the WSWS has documented, communications were held between Gusmao, Reinado and Vincente Railos, another principal figure in the 2006 rebellion. Railos, whose allegations against Alkatiri on the ABC’s Four Corners triggered Alkatiri’s resignation, subsequently became an organiser for CNRT, the party Gusmao formed to contest the 2007 parliamentary elections.

Renaido’s accusations had the potential to not only lead to criminal charges against Gusmao, who was president in 2006, and end his term as prime minister, but also raise questions about Australia’s involvement in the destabilisation and ousting of the Fretilin government.

During last year’s presidential and parliamentary elections in East Timor, Gusmao and Ramos-Horta sought to block Reinado’s arrest. They needed the support of the second largest political party at that time, the Democratic Party, to gain majorities and complete Fretilin’s ouster from power. Like Reinado, the Democratic Party drew its support from the western half of East Timor.

At the time he was killed, Reinado still held a written guarantee of protection. The Australian last week cited an October 18 letter written by the Australian commander of the International Stabilisation Force (ISF), to Reinado’s lawyer, Benny Benevides, assuring him of the rebel leader’s safety. "Your client is hereby assured that, subject to his complying with any pre-agreed arrangements during the dialogue period, your client’s movements will not be interfered with,” the letter stated.

Ramos-Horta was not the only political representative holding talks with Reinado. As recently as February 6, three government MPs met Reinado in Ermera, only to have the meeting disrupted by the arrival of Australian troops. Fretilin MP Domingos Sarmento last week demanded an explanation from the three MPs, asking which government leaders had told them to meet Reinado.

The official story that Gusmao was also an assassination target on February 11 has been called into question by reports that any shots fired at his vehicle were aimed only at its tyres. United Nations investigators then appeared to switch the official story, telling journalists that the plot was intended to kidnap, not assassinate, the two political leaders. This claim is no more credible than the initial one.

Gusmao and Australian strategic interests

Particularly since Alkatiri’s removal in 2006, Gusmao has been a linchpin of Australian policy, having shifted from the president’s post to the prime minister’s in 2007 with Canberra’s backing. Fretilin won the most votes of any party at the 2007 elections, but Ramos-Horta invited Gusmao’s newly-created CNRT to form an anti-Fretilin coalition.

Despite Rudd’s support, Gusmao’s government remains insecure, with Fretilin stepping up demands for new elections. Fretilin has condemned the government for failing to prevent the February 11 attacks, with Alkatiri saying that if he had still been in office, people would have been calling for him to resign. Political tensions have been fuelled by the circulation of a highly suspicious document that claims that Fretilin offered Reinado $US10 million to assassinate Ramos-Horta and Gusmao.

Popular disaffection with Gusmao has grown because his government has proven unwilling and incapable of doing anything to address the poverty and misery of ordinary people. Some 100,000, mostly Fretilin supporters, still live in squalid displaced persons’ camps, and about 80 percent of the workforce are unemployed or in subsistence agriculture. Six years after so-called independence, East Timor’s people remain among the poorest on earth, even though billions of dollars worth of oil and gas are being drilled beneath the Timor Sea.

On the back of its first military intervention into East Timor in 1999, the Howard government eventually bullied the Alkatiri government into accepting ongoing Australian control over the major share of the undersea fields, while the International Monetary Fund (IMF) and world banks insisted that Timor’s oil and gas revenues be placed in a petroleum escrow fund, to prevent so-called over-spending on social programs. The petroleum fund currently stands at more than $US2 billion, but even when it reaches its optimistically estimated peak, decades from now, the annual investment returns will only amount to $2,500 per person. Last year, the IMF predicted that poverty would continue to worsen in East Timor for several years.

Behind the scenes, sections of the Australian security establishment are calling for a deeper intervention into East Timor, along the lines of the Regional Assistance Mission to Solomon Islands (RAMSI), whereby the Howard government took effective control over key posts in the state apparatus, such as the police, courts, prisons and treasury. In a “strategic insight” paper issued last November, the government-funded Australian Strategic Policy Institute (ASPI) suggested: “Expatriates in critical posts like chief of police, prosecutor general, and senior court appointments could provide a circuit-breaker from political interference as well as promote professional development and an ethos of public service complementing the political and economic advice and audits provided by UN missions and the IMF.”

Australian foreign editor Greg Sheridan gave voice to these neo-colonial aspirations in a column last week, urging the Rudd government to take a longer-term view of its involvement in East Timor. “[I]f we are the new metropolitan power in the Melanesian world, guaranteeing security, dispensing vital and ongoing aid, keeping the international order benign, monitoring the spread of infectious disease and everything else, then we need to make a long-term investment in national skills in this area,” he wrote. None of these calculations has anything to do with assisting or uplifting the living conditions of the Timorese masses. While Rudd pledged an indefinite military presence last Friday, he offered only vague and unspecified economic assistance. Since 1999, according to ASPI estimates, Canberra has spent $4 billion on military and police operations in East Timor, but just $550 million on Official Development Assistance. In any case, the main purpose of “aid” is to bolster Australian interests, as well as the profits of locally-operating Australian companies.

The Australian corporate and political elite’s preoccupation is to strengthen its grip over the resources-rich and strategically-located neighbouring half-island and prevent rival powers, notably China, from gaining sway. The ASPI report referred to concerns that “China has a large embassy in Timor-Leste and is a major aid contributor”. Rudd’s exploitation of the February 11 events underscores his government’s underlying commitment to the course charted by the Howard government in 1999.

Washington Post criticizes populist rhetoric

A shot across the bow against Barack Obama

By Jerry White

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In an editorial Sunday the Washington Post, the major daily newspaper in the US capital, criticized the leading contender for the Democratic presidential nomination, Barack Obama, for stirring up “class warfare” in his recent campaign appearances.

The Post column begins approvingly, saying, “At his best, Sen. Barack Obama is a tribune of hope, an eloquent politician-prophet who unabashedly calls on Americans to remember that ‘we rise or fall as one nation.’ But then, it continues, citing a speech the Illinois senator gave to auto workers at a General Motors factory in Janesville, Wisconsin last week, “[T]here are moments like last Wednesday, when Mr. Obama struck some unusually sour notes in what was billed as a major economic policy address. Yes, there were the trademark invocations of ‘shared sacrifice and shared prosperity.’ But Mr. Obama’s remarks were also tinged with an angrier, and intellectually sloppier, message. We thought we’d heard the last of class warfare and populism when former North Carolina senator John Edwards bowed out of the race. In his speech, Mr. Obama quoted Mr. Edwards approvingly; he then echoed him in implying that he could pay for new domestic programs with an immediate U.S. withdrawal from Iraq and in exaggerating the “millions” of job losses attributable to trade agreements...”

The Post editorial followed an article in the Wall Street Journal’sJournal weekend edition, entitled, “Democrats’ Attacks on Business Heat Up,” which singled out the same speech for attack. In particular, the objected to Obama’s criticisms of trade deals with “plenty of protections for corporations and their profits, but none for our environment and our workers who’ve seen factories shut their doors and millions of jobs disappear.”

The Journal noted that “business groups are dismissive of the Democratic attacks,” quoting Randel Johnson, a vice president of the US Chamber of Commerce. “They should be talking about ways to grow the economy such as deregulation and lessening burdens on employers, rather than criticizing them with simplistic politically driven rhetoric,” said Johnson.

Obama, for his own political purposes, is seeking with considerable success to tap into the widespread and deep mood of social anger and political frustration among voters. In his Wisconsin speech he pointed to the widening gap between the wealthy and the rest of the American population, noting that many CEOs were making more in a day that the average worker makes in a year and that a typical family’s annual income had dropped by $1,000 over the last seven years.

Obama’s tepid proposals for reform in no way challenge the economic monopoly of America’s ruling elite. Far from calling for a radical redistribution of wealth, Obama proposed to provide families with a few hundred dollars worth of tax credits. He calls for a $6 billion a year infrastructure program—roughly what the Pentagon spends every three days—under conditions in which the American Society of Civil Engineers estimates $1.6 trillion is needed to bring the nation’s roads, bridges and public buildings into good condition.

To the extent, however, that he makes an appeal to social discontent, no matter how insincerely, he raises popular expectations that neither he nor any other bourgeois politician can meet. Within major business and political circles there are concerns that any appeal to class sentiment—given the level of social tensions in America after more than three decades in which the class struggle has been suppressed—could be the proverbial match being thrown into a powder keg.

Up until now Obama has been given wide latitude by the media to pursue the Democratic nomination. The Washington Post editorial and Wall Street Journal article are signs that the political and media establishment may well rein him in. If he fails to heed their advice to tone down the populist rhetoric, the media could turn on Obama like a dime.

There are, however, significant policy and tactical differences being fought out in the contest between Obama and Hillary Clinton. The day after the Post editorial, New York Times columnist Roger Cohen wrote an op-ed piece defending Obama against criticism and arguing he would be more effective than Clinton in refurbishing the international image of the United States and thereby defending the geopolitical interests of corporate America.

In a column headlined “A Realist Called Obama,” Cohen argues that the Bush administration has alienated US allies and squandered opportunities to expand US influence in the Middle East, Africa and Asia. At the same time, he says, Hillary Clinton is too sullied by “her husband’s coterie of the world’s rich and famous, with its dubious deal-making from Kazakhstan to Colombia,” to project the image of a “U.S. renewal.”

Therefore a “realistic view of Obama,” Cohen says, “would be that he is best placed to seize and shape a new world of such possibilities. He has the youth, the global background, the ability to move people, and the demonstrated talent for reaching across lines of division, even those etched in black and white.”

Cohen says Obama would help “rebrand” America. This, he says, is crucial to advance US interests worldwide. Such “rebranding,” Cohen says, was even used by the Papacy, in the late 1970s, with the elevation of a Polish pope, John Paul II, adding, “and Poles then precipitated the fall of the Soviet empire.”

Rejecting arguments about Obama’s inexperience, Cohen says his administration would have a “tough foreign policy team” to confront Iran and other potential adversaries. At the same time, Cohen reassures the foreign policy establishment, the Illinois senator “needs to recall what he once said: ‘No president should ever hesitate to use force—unilaterally if necessary—to protect ourselves and our vital interests when we are attacked or imminently threatened.’”

Cohen makes clear that those pushing Obama’s campaign see him as a useful tool to advance the interests of US imperialist policy.

The Obama campaign, however, seeks to conceal the contradiction between the interests of his supporters in the ruling elite and the concerns and hopes and expectations he is arousing within the electorate on the basis of vague calls for unity, renewal and change, and his identity as the first African-American with a serious chance to become president.

It is not possible to reconcile the domestic and international interests of America’s financial aristocracy with the needs of the masses of working people. The only means of ensuring a decent future for workers and young people is to break the economic and political stranglehold of the Wall Street banks and large corporations.

Should he win the nomination and be elected, there is no doubt whose hopes and expectations he will disappoint. In the face of the mounting crisis of American and world capitalism, the Democratic Party—the second party of American big business—will place the burden of the economic catastrophe squarely on the backs of working people.

Deep divisions in Europe over Kosovo independence

By Stefan Steinberg

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Deep divisions emerged at the European Union meeting in Brussels on Monday, with the assembled Foreign Ministers unable to arrive at a unified position with regard to the declaration of independence made by the Kosovan Prime Minister on Sunday.

Spain had already made clear prior to the declaration that it would not recognise an independent Kosovo, and on Monday Spanish Foreign Minister Miguel Angel Moratinos reaffirmed to the press: “The government of Spain will not recognize the unilateral act”.

Other EU countries publicly opposing independence for Kosovo include Greece, Cyprus, Slovakia, Portugal, Malta, Bulgaria and Romania. This means that nearly a third of the member states of the European Union have made clear they intend to refuse recognition to Kosovo.

On the other hand, the major European powers moved rapidly to express their solidarity with Pristina. The initiative in recognising Kosovo was taken by the French Foreign Minister Bernard Kouchner, who declared on Monday: “We intend to recognize Kosovo”. Kouchner went on say that the French President Nicolas Sarkozy had already written to the president of Kosovo informing him of the French decision.

French recognition of the new mini-state was followed by statements from British Foreign Secretary David Miliband and Germany’s Foreign Minister Frank-Walter Steinmeier, who told reporters that their respective governments would also recognize Kosovo. Italy has also made clear that it plans to recognize the new country.

In the debate on Kosovo independence, EU officials have facilitated agreement by member countries by sleight-of-hand. The declaration of independence made by the Kosovan parliament on Sunday is regarded by legal experts as a travesty of the resolution (1244) drawn up for the governance of the province of Kosovo by the United Nations Security Council in June 1999, following the extensive bombing of Serbia by NATO forces. Resolution 1244 called for the withdrawal of Yugoslav forces but made no mention of independence and referred instead to the “territorial integrity” of Yugoslavia.

In order to ease recognition of Kosovo by EU countries and overcome the palpably illegal nature of the declaration made Sunday, foreign ministers devised an escape clause on Monday which declared that the province’s history of “conflict, ethnic cleansing and humanitarian catastrophe” in the 1990s by Serbia exempted it from a rule which stipulates that international borders can only be changed with the agreement of all parties. This utterly undemocratic initiative now allows EU countries to recognize Kosovo’s independence as an exception to the rule of “territorial integrity” of nations under international law.

US intensifies tensions with Russia

According to international protocol, it was expected that the EU would be first in line to proclaim its policy on Kosovo, based on the argument that this is a “European issue”, but the first statement acknowledging independence came from the other side of the Atlantic. In an interview with NBC on Monday, US President George W. Bush rushed to recognize Kosovo’s declaration of independence. “The Kosovars are now independent,” he said adding “It’s something I’ve advocated with my government.”

Bush’s statement was quickly amended by White House spokeswoman Dana Perino who denied that Bush’s comments amounted to US recognition of independence. “He didn’t announce that,” she said. “What he meant by that is that the Kosovars have declared their independence.” Perino reminded the press that it is the job of the US State Department to officially declare recognition.

On Monday, US Secretary of State Condoleezza Rice announced that Washington had formally recognized Kosovo as “a sovereign and independent state.” In an official statement, Rice declared, “President Bush has responded affirmatively to a request from Kosovo to establish diplomatic relations between our two countries.”

Bush’s eagerness to unilaterally declare US support for Kosovo independence underscores the significance of this issue for the White House, which is seeking to use the conflict over Kosovo to increase the isolation of Russia and deepen divisions inside Europe.

Independence for Kosovo has been a major priority for Bush during the past year. Following his participation in the G8 summit in Germany last summer, Bush flew straight to Albania, where he promised Kosovo Albanians in Tirana that they would become citizens of an independent state. Bush called for an end to “endless dialogue” that was getting nowhere and predicted Kosovo independence by the end of the year. Now, just six weeks after the deadline announced by Bush, many of those in the crowds of independence supporters celebrated the declaration on Sunday in Kosovo by waving both the Albanian national flag and the Stars and Stripes.

The White House has taken an increasingly aggressive stance towards Russia in recent years, notably through US activity in the so-called “colour revolutions” in the Ukraine and Georgia. American support for Kosovo represents another major step towards the encirclement of Russia by the US and NATO powers and is in line with fresh propaganda from US think tanks aimed at reviving the Cold War - this time with Russia in the role formerly played by the Soviet Union.

The revival of hostilities with Russia was a central theme at the Munich Security Conference held just a week ago in Germany, and statements made in and around the conference make clear that the increasing demonisation of Russia is not only a central plank of White House policy, but is also supported by broader political circles.

One day before the conference, the Süddeutsche Zeitung printed a statement by Republican presidential candidate John McCain, in which he demanded that Russia be thrown out of the G-8, that support be given to the independence of Kosovo, and that a so-called “league of democracies” be set up under US leadership, as an alternative to the UN.

McCain’s plea for a harsher line against Russia was then taken up one day later by one of the most prominent US right-wing ideologues, Robert Kagan, who in the same newspaper declared: “Seen geographically, Russia and the European Union might be neighbours, but geopolitically they live in different centuries.”

Kagan then sketched out a scenario for a European-Russian war, enumerating the potential triggers for such a conflict “in diplomatic stand-offs over Kosovo, Ukraine, Georgia and Estonia; in conflicts over gas and oil pipelines; in nasty diplomatic exchanges between Russia and Britain; and in a return to Russian military exercises of a kind not seen since the Cold War.”

US support for Kosovan independence is based on a policy aimed at isolating Russia as a major player in trade and foreign policy in Asian countries and the Middle East, while undermining stability in one of Washington’s principal rivals — Europe.

While some European countries, such as Germany, have taken a cautious but increasingly critical approach to US military policy in Central Asia (Afghanistan) and the Middle East (Iran), the major EU powers are intent on ensuring that the US does not monopolise economic and political developments in former Yugoslavia. This is why Germany, which has developed close trade links with former Yugoslav states and has a long tradition of political involvement in the region, is now supporting the declaration of Kosovan independence alongside the US.

The Balkan powder keg

At the same time, a number of commentators have pointed out that the setting up of a new mini-state in the heart of Europe is fraught with enormous risks. The seventh state to be founded on the territory of former Yugoslavia since 1990, Kosovo is utterly unviable as an independent entity. It has an estimated unemployment rate of 50 percent and no reliable electricity grid for the provision of power. Although corruption is rife within the Kosovan regime, which is based on the former CIA-backed UCK (Kosovo Liberation Army), nothing has been done by the existing EU and NATO protectorate to curb the criminal practices of the country’s ruling elite.

According to the Spanish newspaper ABC: “The country is neither ready, nor viable. Kosovo needs international help on every level — economic, military, police and administrative — to survive and be transformed into a state worthy of its name. ... This independence is a European failure, no doubt not the last, for there still remain many problems to be resolved in this long and bloody dismembering of the former Yugoslavia...of which the separate parts, paradoxically, wish, in a future of interdependence, to unite in a European Union that is gradually being filled with small, ethnically homogenous states...So a new dependent state has been born in Europe. That’s nothing to be proud of.”

The German Frankfurter Rundschau comes to a similar assessment and declares there is no basis for jubilation over the declaration of independence: “The independence which has finally been achieved barely deserves the name. Constitution, flag and coat of arms, even the day of the proclamation were imposed on the Kosovans, irrespective of their nationality, under the supervision of leading western powers. What is now being feted as the birth of new state is hardly more than the setting up of another European semi-protectorate in the Balkans.”

The unstable political situation within Kosovo is also demonstrated by the fact that a total of 3,000 United Nations police and 3,000 NATO-led troops are currently engaged in defending the territory’s Serbian minority. Following the declaration of independence, it is now expected that these contingents will have to be reinforced dramatically.

Violent clashes have already begun. On Monday, thousands of Serbs demonstrated in northern Kosovo, chanting “This is Serbia,” and “Down with America!” Crowds marched towards the bridge in the divided town of Kosovska Mitrovica but were held back by NATO soldiers.

At the same time, the Serbian government stepped up its campaign of opposition to Kosovo’s independence. On Monday, Serbia’s Interior Ministry filed charges against three Kosovo-Albanian leaders, including Prime Minister Hacim Thaci, accusing them of committing a “serious criminal act against the constitutional order and security of Serbia,” by proclaiming a “false state.”

Meanwhile, the Belgrade government recalled its ambassador from Washington in retaliation for the US recognition of Kosovan independence. Serbian Prime Minister Vojislav Kostunica announed the withdrawal of the ambassador, calling it the “first urgent measure” to be taken against those countries recognizing Kosovo. “This statement by the US cannot make a false state true,” he said, “but before the entire world it has demonstrated the violent face of the US policy of brutal force.”

Speaking to the United Nations Security Council Monday Serbian President Boris Tadic denounced the unilateral declaration of independence as a violation of international law and a threat to stability internationally. “If you cast a blind eye to this illegal act, who guarantees to you that parts of your countries will not declare independence in the same illegal way?” he said. “Who can guarantee that a blind eye will not be cast to the violation of the charter of the United Nations, which guarantees the sovereignty and integrity of each state, when your country’s turn comes up?”

He asked the 15-member council, “Are we all aware of the precedent that is being set and are we aware of the catastrophic consequences that it may lead to?”

Russia’s ambassador to the UN, Vitaly Churkin, voiced strong support for the Serbian position, calling Kosovo’s declaration of independence “a blatant breach of the norms and principles of international law.” Meanwhile, China’s Ambassador Wang Guangya made a similar statement, saying the move posed a “serious challenge to the fundamental principals of international law.” These two veto-wielding members of the UN Security Council are blocking any formal UN recognition of the newly declared state.

Nearly a century after the outbreak of the First World War, the major European imperialist powers and America are once again lighting matches to the “Balkan powder keg” with their support for Kosovan independence, threatening a conflagration with consequences for the entire region and beyond.

The door to Iraq's oil opens

By M K Bhadrakumar

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The cynosure of Western eyes at the meeting of the Organization of Petroleum Exporting Countries, commonly known as OPEC, in Abu Dhabi, the United Arab Emirates, last December 5 was an unexpected personality - Iraqi Oil Minister Hussain al-Shahristani.
But that wasn't a chance occurrence. By the time OPEC gathered in Vienna six weeks later, it was beyond doubt that Shahristani was on the way to becoming a celebrity in the West.

Shahristani is "a rare thing" in politics, to quote Toby Lodge, the well-known scholar on Iraq at the International Institute of Strategic Studies in London - "not too religious, not too political, not too secular, not too pro-American Shi'ite who [Grand Ayatollah Ali] Sistani would talk to".

But for the ease with which Shahristani traversed in his later years the dividing line that separates religiosity and idealism from worldliness and pragmatism, Shahristani would have become a cult figure for human-rights activists, given his extraordinary background as a top nuclear scientist who turned a stubborn dissident, and then a reckless jail breaker from Saddam Hussein's Abu Ghraib prison where he was tortured and tucked away in solitary confinement for an impossibly long 10 years till 1991.

But in Abu Dhabi, if Shahristani became a rising star for the Western media, that was for an entirely different reason. It was hardly metaphysical. Plainly speaking, the media had good enough reason to flatter him and pamper his vanities.

Iraq's 'super giants'
Of course, the soft-spoken, English-speaking Iraqi Shi'ite dissident leader was a familiar face in Western capitals through the 1990s. But today, he is no longer a political fugitive. He is no longer an Iraqi dissident seeking patronage. On the contrary, Shahristani finds himself in an enviable position as a creator of wealth for the Western world. He holds the key to the door that opens out to the magical world of Iraqi oil.

Iraq's proven reserves of oil are only smaller than those of Saudi Arabia and Iran - and Iraq is only about 30% explored. Experts are generally of the view that Iraq's actual oil reserves could well turn out to be at least double the 115 billion barrels of proven reserves. Beyond that, it is anybody's guess as to the scale of Iraq's as-yet-untapped gas reserves.

And Shahristani is visibly getting ready to negotiate the contracts for Iraq's "super giants". In the idiom of Big Oil, "super giants" are fields with at least five billion barrels of oil in reserve. Iraq's super giants are Kirkuk (in Kurdistan), Majnoon (bordering Iran), Rumaila North and South (in the south), West Qurna (west of Basra) and Zubair (in the southeast) fields, and, possibly, the Nahr Umr and East Baghdad fields. In addition, Iraq is estimated to have 22 "giant" fields, each having more than 1 billion barrels of oil.

In fact, Iraq may host the largest untapped reserves in the world. There is a strong likelihood that Iraq's reserves may turn out to be exponentially higher than the current estimations, which are based on old-style seismic surveys. All said, unsurprisingly, the world oil market is in a tizzy when Shahristani says something, anything. He is about to sign the contracts for these and many other large Iraqi oil-producing fields.

That indeed makes Shahristani a very important statesman today - at a time when worldwide oil demands are rising and consumer countries have appeared in Asia with gargantuan appetites for energy, when the oil majors' booked reserves are in decline and the known global reserves happen to be primarily under nationalized systems.

The acuteness of the situation is apparent from the stark warning by the former chairman of the United States Foreign Relations Committee, Senator Richard Lugar, last year in a speech in New York that something like three quarters of the world's oil reserves are located in countries which are not under American influence.

To cap it all, "we're in a new oil policy ball game", as author Steve Yetiv and economist Lowell Feld recently wrote, which is that the US's capacity to ease oil prices is diminishing. On his recent visit to Saudi Arabia, US President George W Bush pushed the subject of high oil prices increasing the likelihood of an American, and therefore, a global recession. There was a time since the late 1970s until quite recently when the US's Saudi allies would have promptly pumped the market with additional oil for depressing the price. This time around, the Saudis heard out Bush, "noted that the weakening US economy is a valid concern, but they remain reluctant to increase oil supply".

The two writers pointed out, "Saudi Arabia's reluctance to address sustained high oil prices, even in the face of a potential recession, represents an important break with past Saudi oil policy ... Why? The answer may define oil in the 21st century - or at least underscore the reasons for the US to seek greater oil independence."

Urgency for Iraqi oil
Yetiv and Feld, with much hesitancy, proceed to make an absolutely unthinkable suggestion that the Saudi reluctance might be borne out of a possibility that Riyadh is "getting global markets ready for the possibility that they may not have enough oil to be a long-term fuel pump to the world".

After all, it merits attention that the US Energy Information Administration (EIA) significantly has revised its earlier 2000 prediction about how much oil Saudi Arabia would produce in 2010. The EIA scaled back the figure from 14.7 million barrels per day to just 11.4 million barrels per day. That is a major reduction. (Feld, incidentally, worked for 17 years for the US Department of Energy.)

In the current circumstances of the world energy scene, the above underscores why any plan to hasten the US effort to achieve greater oil independence translates in political terms as taking control of Iraq's oil reserves. There is simply no other viable alternative open to the US. Essentially, it boils down to the 20 words that the former US Federal Bank chief Alan Greenspan wrote towards the end of his memoir, The Age of Turbulence: Adventures in a New World, "I am saddened that it is politically inconvenient to acknowledge what everyone knows: The Iraq war is largely about oil."

According to the International Energy Agency, the world demand for oil is set to increase from the current level of 85 million barrels a day ( mn b/d) to 116 mn b/d in 2030. Three quarters of the world's oil reserves (1,200 billion barrels) are located in the OPEC countries, with the Persian Gulf countries accounting for 62%. But the Persian Gulf countries are disinclined to raise their oil production sharply enough to meet the increase in global demand. Saudi Arabia, which has the world's largest oil reserves, for instance, is only planning to increase its oil production by 1.5 mn b/d over the next several years.

Therefore, it becomes imperative that Iraq plays a major role in meeting the additional global demand of 30 mn b/d during the coming two decades. There is yet another side to it. Peak oil - when global oil production will reach a peak and then begin to fall - is a real possibility sooner or later. It has happened in the US; it is happening in Britain, the North Sea and Indonesia; it is expected to happen in Mexico and some other major oil producing countries during the coming five-year period.

In this scenario, the criticality of Iraqi oil production cannot but be overstated. Furthermore, Iraq is particularly blessed in certain other ways. Apart from its massive reserves of oil and gas, the cost of oil production in Iraq at US$1 to $2 per barrel is very low. Second, the oil fields are dispersed evenly across the country. Third, Iraq's location itself is a boon. Unlike, say, the Caspian, Siberia or the Arctic, it is easy to develop oil export routes out of Iraq heading in several directions simultaneously - the Persian Gulf, Saudi Arabia, Kuwait, Jordan, Syria and Turkey. All this means that rapid expansion of Iraq's oil production and the arrival of substantial amounts of Iraqi oil - exceeding 10 mn b/d - in the international market is an attainable objective.

US presses for Iraqi deals
A major impediment has been the dangerous security situation within Iraq. But a significant US achievement in recent months has been the end of much of the fighting inside Iraq. Clearly, the US has bought off large segments of the Iraqi insurgency. Thousands of Arab Sunni fighters in western Iraq and parts of Baghdad have converted themselves as "comprador" militia at the beck and call of the US military. Such US-financed "resistance fighters" could number over 80,000 former insurgents.

Today, they actively collaborate with the US military in destroying the residual forces of the Iraqi resistance in the east and north of Baghdad and in cities such as Baqubah, Tikrit and Mosul, which are the residual hotbeds of insurgency. They have virtually decapitated al-Qaeda in Iraq. The four-province region of the Multi-National Division-North (comprising Diyala, Salahuddin, Ninevah and Tamim provinces), which used to be the favorite haunt of al-Qaeda fighters, is all but completely pacified. The US forces' commander in the region, Major General Mark P Hertling, has been quoted as claiming, "So many of them [al-Qaeda fighters] are going to the desert regions to just get away from being ratted out by the citizens and being pointed out and captured.

"Some of them are saying it's not even safe in the desert because the night raids are coming to get them. And that's a good thing. We want them to keep thinking that they can't sleep well at night because we're coming after them, because, quite frankly, we are."
All indications are that the US has in the more recent period met with success in striking a similar deal with the troublesome Mahdi Army militia owing allegiance to Muqtada al-Sadr, which controls the Shi'ite districts of Baghdad.

This can be expected to have a positive impact on pipeline security. According to various estimates, there have been over 600 incidents of pipeline attacks since the US invasion of Iraq in March 2003; some 60 attacks on refineries; and over 500 attacks on tanker trucks. Close to 650 Iraqi oil workers might have been killed or wounded or kidnapped. Iraq's dual pipelines in the north heading toward Turkey were a major target of attack. The improving security situation has been a factor in increasing Iraq's oil production to nearly 2.4 mn bpd by end-2007, which is the highest level since the US invasion.

Oil production is now expected to cross the pre-war level of 2.6 million barrels by end-2008. Shahristani told The Times that he expected production to reach 6 million barrels per day within the next four years. The International Monetary Fund has predicted that Iraq's economy, boosted by the increase in oil revenues, is slated to grow by 7% this year as compared to 1.3% last year. The Times newspaper recently reported that the real estate market has been sharply picking up in parts of Baghdad city and there are visible signs of a construction boom

As can be expected, Washington is keen to exploit the vastly improved security situation in Iraq. The Bush administration is leaning on Shahristani not to wait for the fractious Iraqi Parliament to approve the Iraqi oil law that would have provided a legal framework for foreign investment in the oil industry. As the first step, the executives of some of the world's oil majors have been meeting with Iraqi Oil Ministry officials since January 24 in Amman, Jordan, for discussing the terms of technical support contracts, which are in the nature of shorter-term deals.

Shahristani told Argus Media recently that these service contracts will "help Iraq fast-track the purchase of necessary equipment and train the Iraqi people to install them". He said these companies would be favored in a bidding round for longer-term contracts on the Iraqi oil fields set for later this year. Another bidding round is expected to take place next year.

The Times of London reported that ExxonMobil, Chevron, ConocoPhillips and Shell have been targeted by the Iraqi Oil Ministry for awarding the service contracts (known as "technical support agreements" or TSAs). The report said that in exchange for the oil, these four oil companies would direct training of Iraqi workers and equipment to Iraq's largest oil and gas fields. The Middle East Economic Survey has quoted Shahristani as saying that the service contracts will be signed "within a few weeks". The general expectation is that the TSAs will be signed during the third round of discussions due in March.

Meanwhile, the Iraqi Oil Ministry's deadline for any interested oil firms to pre-register for the larger contracts to develop oil fields falls on February 18. Shahristani has promised an open bidding and transparent process but only in the event that he will be the decision-making authority. He suggested that competition would be intense. "Everybody in the world, more than 45 companies, have approached us [the Iraqi government] and shown a very keen interest in working with us - the Chinese, Russians, Indians, Brazilians," Shahristani said.

In sum, as Ben Lando, United Press International's energy editor put it, "Big Oil's big dreams are close to coming true ... According to insiders, Shell, which produced a technical study of Kirkuk in 2005, wants a deal for the field. BP wants one for Rumaila, which it studied last year. Shell and BHP Billiton are angling for the Missan field in the south. ExxonMobil is interested in the southern Zubair field while the Sabha and Luhais fields are being targeted by Dome and Anadarko Petroleum. ConocoPhillips is talking with the [Iraqi] ministry about the West Qurna oil field ... Chevron and Total have teamed up in a bid for the Majnoon field."

No doubt, it is pay-off time for the four majors who didn't make an issue of the US military occupation of Iraq or the ensuing mess-ups during Paul Bremer's rule or the ensuing acute security situation, but kept going with their nose on the ground and worked with the Iraqi ministry during the past four years in conducting reservoir surveys, assisting in the drawing up of work plans and in training personnel. These oil majors simply chose to be around in Baghdad even when much of the oil industry was idling. Lando adds, "While service contracts would be highly profitable for companies, Big Oil wants risk contracts. Such deals are usually long term, covering its exploration costs and guaranteeing a profit if oil is found, and allowing them to put the reserves it discovers on the books, a boon in Wall Street's eyes."

Iraqi public opposition
Of course, Shahristani is skating on thin ice. His moves, despite the robust backing by the Bush administration, are political and highly controversial. The point is, Shahristani is virtually in a position to hand out jackpots to the oil majors. Everyone knows that apart from the security factor, the risk in exploring for crude in Iraq is virtually nil. "Historically it [oil] has been easy to find, inexpensive to produce and top quality", Lando points out.

Washington counts on Shahristani to push the oil deals through despite the vehement opposition within Iraq. First, about 70% of Iraqis firmly oppose what Shahristani is attempting. The Iraqis see what is happening as a capitulation of their national sovereignty. Iraqis look back at the nationalization of their oil industry in 1972 as a source of pride and empowerment. Second, there is vehement opposition from the labor unions in the Iraqi oil industry. They say that Iraq could increase its oil production by investing its own money and there is no pressing need at this juncture to solicit foreign investment.

Indeed, in 2006, the Iraqi Oil Ministry could only utilize 3% of its $3.5 billion reconstruction budget. The US Defense Department in a December 2007 report acknowledged, "The lack of capacity in contracting, the lack of trained budget personnel, concern about corruption and numerous other systemic structural impediments hamper faster execution."

Iraq's oil exports in 2007 brought in $35.5 billion, according to the US State Department. But a study by the Washington Times newspaper in January concluded, "Increased oil revenues stemming from high prices and improved security are piling up in the Federal Reserve Bank of New York rather than being spent on needed reconstruction projects."

To be sure, the Iraqi labor unions have a point when they say that foreign investment is not the real need for the oil industry currently, but rather the ability to invest the surplus budget. Again, the labor unions are questioning the need of foreign expertise. They insist that national expertise is available within Iraq. The fact remains that in spite of Saddam's gross mismanagement of the oil industry, Iraq had built up over the years a significant reservoir of manpower with a range of technical expertise.

"If they [Oil Ministry] are prepared to allocate more funding and spend the resources that already exist, there would be improvement and we could recruit more workers," Hassan Jumaa Awad, president of the umbrella Iraqi Federation of Oil Unions recently told the United Press International news agency. Awad alleged that Shahristani is following a "deliberate" policy of shunning domestic investment with a view to make Iraqi oil workers look incapable.

The labor unions have now sought the help of the international labor community to their demands, which also question Shahristani's intentions in awarding to international oil firms concession or risk contracts such as production-sharing agreements. Awad calls for an Iraqi oil law, "but we need to gain our full sovereignty before such a law is enacted", and he insists that if a law is to be passed, it should be approved by Iraqi voters in a referendum.

Iraq's oil unions and civil society organizations have joined hands in alleging that Washington and the present authorities in Baghdad, especially the Oil Ministry, are conspiring to hand over control over Iraq's oil to oil majors. The news agencies reported that protesters who fear that Iraq's oil wealth might be squandered met at a Middle East oil conference on February 5 in London where Iraqi and British oil industry leaders attended.

Bush's Iraq legacy
But the Bush administration's priorities lie elsewhere. It is highly unlikely to pay heed to Iraqi public sentiments. There is precious little time left for the Bush administration in the White House. But it's not just pork-barrel politics, either. There is also the aspect of the legacy of the Bush administration. With the Iraqi "surge" having proved a success, Bush is undoubtedly gearing up for the epitaph to his Iraq odyssey.

Big Oil deals in Iraq form the core of Bush's strategy of creating a legacy for the US in the Middle East that may run for decades. Big Oil needs the assurance of a near-permanent US military presence in Iraq. And Bush is determined to provide that assurance. He is convinced that no serious American politician would defy the wishes of Big Oil. By logic, therefore, Bush is creating a historical legacy of an Iraq that will remain under American control for decades to come.

Therefore, the Op-Ed in The Washington Post on Wednesday jointly authored by Secretary of State Condoleezza Rice and Secretary of Defense Robert Gates is extraordinary for its thumb sketch of what Bush's Iraq legacy is going to look like. The two top officials have written that a "crucial phase" is about to begin with the US negotiating a basic framework agreement with the Iraqi government aimed at "normalized relations".

By the end of this year, the Bush administration proposes to altogether dispense with the fig leaf of the current requirement that the United Nations must authorize on an annual basis the presence and role of the US military in Iraq under the relevant UN resolutions. Rice and Gates argue that the Bush administration "would rather have an arrangement that is more in line with what typically governs the relationships between two sovereign nations". Period.

The US-Iraq work agreement to be negotiated seeks to establish "a strong relationship with Iraq, reflecting our [US] shared political, economic, cultural and security interests". In other words, Washington will have ensured that US policies in Iraq are sequestered from the purview of the UN once the US-Iraq work agreement is through by the end of the year. Concerned parties like Russia (or China) will simply be faced with the fait accompli of what the US chooses to do with Iraq.

Second, the US-Iraq bilateral framework will include what is known as a "status of forces" agreement, which is based on a recognition that "US forces will need to operate in Iraq beyond the end of this year for progress in stabilizing Iraq to continue. In these negotiations, we [US] seek to set the basic parameters for the US presence in Iraq." Third, the basic framework with Iraq will be negotiated with bipartisan support, fully involving the US Senate's treaty-ratification authority via the appropriate committees of the Congress with briefings for the lawmakers and congressional input so that 2008 will go down in history as "a year of critical transition in Iraq ... a foundation of success in Iraq - a foundation upon which future US administrations can build". Once the hurly-burly of the primaries is done in the presidential race, Bush proposes to invite the presidential candidates to contribute to the finessing of the US's Iraq strategy in the coming period.

What becomes evident is that the Bush administration neither intends to cut and run from Iraq nor is it in search of an exit strategy. On the contrary, it is ensuring that Iraq remains under American control for as long as it takes for the US to evacuate the oil and gas out of that country. Bush sees this as his historical legacy.

Bush is confident that his troop "surge" strategy in Iraq is working. According to US columnist and author David Ignatius, Bush favors keeping US force in Iraq close to the pre-"surge" level of 130,000 troops. Ignatius wrote, "Bush in effect is redoubling his bet on success in Iraq." It is a risky course insofar as Iraq is a polarizing issue in an election year. But there is logic in betting that with such high stakes for Big Oil in Iraq - thanks to Shahristani's deals - no serious US politician with presidential ambitions would undermine Bush's desire for continuity and his plans to leave behind a stable Iraq.

Russia stages comeback
Indeed, the rest of the world has already decided that it is time to take the Bush legacy in Iraq seriously. The alacrity with which Moscow is hurrying to get onto Shahristani's gravy train is the latest tell-tale sign. Moscow is highly unlikely to waste its time in rhetoric ridiculing the Bush administration by pointing out that the US needs assistance to save face and leave Iraq with dignity or that Russia could help stabilize the situation, and so on.

Shahristani visited Moscow last August, but at that time Moscow committed the folly of not taking him seriously. (Actually, Shahristani was a university student in Moscow in the 1960s.) A Moscow commentator wrote after his visit, "The oil minister may say whatever he wants about the operations of foreign companies in Iraq, but the Iraqi Parliament has not yet passed a law on oil and gas. Therefore, oil companies can only make assumptions about work in Iraq."

But Moscow didn't need much time to revise its opinion and to take Shahristani very seriously. In November, Shahristani, guided by American legal advisors, canceled Russian oil company Lukoil's contract with Saddam's regime for the vast oil field in Iraq's southern desert, West Qurna, with estimated reserves of 11 billion barrels of oil. Shahristani announced the field would be opened to new bidders as early as 2008. "We will defend our interests," a senior Kremlin official warned. Moscow threatened to revoke a 2004 deal with creditor nations to forgive $13 billion in Iraqi debt.

But Moscow learned that ConocoPhillips was seriously eyeing West Qurna. Moscow concluded that Iraq's oil scene was up for grabs, predators were around and there was no more time to lose. Thus, the formal signing of the agreement on Monday in Moscow writing off most of Baghdad's Soviet-era debt has not come a day too soon. The agreement stipulates that Russia will initially write off 65% of Iraq's $12.9 billion debt, accrued mostly from Saddam's arms purchases, and of the remaining $4.5 billion, 80% will be forgiven in two stages by 2009 if Iraq meets economic targets set by the International Monetary Fund, leaving Iraq to repay $900 million over a 17-year period from 2011.

The agreement opens the way for Russian oil companies' return to Iraq. Separately, Russia has agreed to invest $4 billion in Iraq, including the Iraqi oil industry. Close on the heels of the debt-relief agreement, Moscow has indicated that Lukoil and other companies including OAO Zarubezhneft, a state-owned oil producer, and OAO Mashinoimport, a supplier of machinery for energy industry, are "preparing" to return to Iraq. The Iraqi government has promised to pay "special attention" to previously signed contracts with Russian companies. But things may not be easy. The return of the Russian companies will be subject to US acquiescence, which in turn means Moscow will henceforth have to significantly roll back its earlier criticism of the Bush administration's Iraq policy.

Russian Foreign Minister Segei Lavrov has stressed Moscow's "utmost interest" in launching projects in the Iraqi gas, oil and electricity sectors, "but for the successful implementation of plans of economic development of Iraq it is necessary to solve two political problems: to achieve national reconciliation and settle the security issue". In essence, Lavrov underscored Russia's determination to seriously engage.

How the Russian "re-entry" plays out will be interesting to watch. Washington - and Shahristani - will have to work out the implications of the return of Russian oil companies to Iraq. A Middle East expert in Moscow pointed out, "If Russian companies are let in, somebody else will be kept out. It is not a matter of market competition."

EU reaches out to Iraq
But Iraq is likely to impact Russia's fortunes in a much more profound way on a second front where Moscow's ability to influence is virtually nil. Moscow will be watching with anxiety the progress of the energy dialogue that has commenced between the European Union and Iraq. Alarm bells would have rung in Moscow when Shahristani travelled to Brussels and met the EU officials on January 31.

EU officials have openly acknowledged that their desire to seek closer energy ties with Iraq is a critical component of their broader strategy to reduce Europe's dependence on Russian energy supplies. EU countries currently depend on Russia for roughly a quarter of their gas supplies. EU External Affairs Commissioner Benita Ferrero-Waldner told Shahristani, "Iraq is a natural energy partner for the EU, both as a producer of oil and gas and as a transit country for hydrocarbon resources from the Middle East and the Gulf to the EU."

She said the EU was keen to see Iraq link into the Arab Gas Pipeline project from Egypt to Jordan near the Syrian border, which is under construction and is expected to allow European customers to tap into supplies from Egypt and other countries along the line via Turkey. The EU's Arab Gas Pipeline project forms part of the 3,300-kilometer pipeline to transport gas from the Middle East and Central Asia to Europe while bypassing Russia.

The plan is to transport Iraqi natural gas from a gas field in southern Iraq to the EU through the Arab Gas Pipeline, which, when completed, will connect Syria, Jordan, Lebanon, Egypt and Turkey. Iraqi gas could then reach Europe through the planned Nabucco pipeline, which is to run from Turkey to Austria. Iraq has been invited to an upcoming ministerial meeting on the Arab Gas Pipeline project.

An interesting sideline is that access to Iraqi energy suddenly makes the Nabucco pipeline viable. Russia, through robust efforts in the recent past had gained the high ground as the key energy supplier for the southern European countries. The Russian efforts had dampened Nabucco's prospects despite Washington's vigorous backing for the project. Now, when it appeared that Moscow had all but finished off Nabucco, thanks to Iraqi energy, Nabucco is rising again as a major challenge to Russia's interests as the major energy supplier for Europe. The implications for Europe's relations with Russia and even for the trans-Atlantic relations are far-reaching.

Shahristani told his EU interlocutors in Brussels that Iraq planned to develop its gas fields this year and should be in a position to supply Europe with gas "in two or three years". Iraq is estimated to have 111 trillion cubic feet of natural gas reserves. Royal Dutch Shell, France's Total and Italy's Edison are seeking Shahristani's approval for a deal to develop one of Iraq's largest gas fields, Akkas, located near the Syrian border, which could be connected to the Arab Gas Pipeline.

On the oil front, Shahristani said in Brussels that Iraq is studying the possibility of new pipelines through Turkey. Oil from the Kirkuk fields in northern Iraq is currently exported through a pipeline that links up the Turkish Mediterranean port of Ceyhan.

India-Israel energy ties
EU-Iraq energy ties will be a worrisome development for not only Russia but also for Iran. Tehran has been nurturing the hope that the EU's strategy to diversify its energy imports would eventually give impetus to the European countries to normalize their relations with Iran and that in turn would prompt them to withstand the US pressure to isolate Iran. But Tehran is watching with dismay that Iraq is fast becoming a golden goose for the EU and the expansion of EU-Iraq energy ties may dampen any sense of urgency in the European capitals for building up an energy dialogue with Iran in the near term.

The virtual "loss" of the EU market - in the near term, at least - compels Iran to turn more toward the Asian region. But here too, US pressure is working on India, one of Asia's most significant energy markets, from linking up with Iran. Washington is instead encouraging Indian companies to become active in Iraq. Ideally, Washington would like to promote a Turkey-Israel-India energy grid that could tap into the Iraqi reserves. This approach also fits in with the US geostrategy of developing Turkey, Israel and India as three "pivotal" states that are Washington's natural allies in the regions surrounding the volatile Middle East.

In January, Turkey launched a feasibility study for a natural gas pipeline connecting northern Iraq's fields to its Mediterranean port of Yumurtalik, which will run parallel to the oil pipelines. Once the northern Iraq gas fields are developed, 353 billion cubic feet of natural gas will flow to Yumurtalik. Turkey hopes to export liquefied natural gas (LNG) by tankers to destinations such as Israel and India. There is strong US backing for the project.

To the extent that India is kept away from linking with Iran, Washington also hopes to scuttle the prospect of an Asian energy grid developing that might involve Iran, Pakistan, India and China alongside Russia and the Central Asian states. Significantly, serious discussions have begun for the first time between Turkey and India on energy cooperation.

Turkish Foreign Minister Ali Babacan, who visited Delhi recently, has reportedly proposed to his Indian counterpart the possibility of Turkey exporting oil from the Ceyhan port to Israel's Ashkelon-Eilat pipeline and Indian super tankers sourcing oil from the Israeli port of Eilat in the Gulf of Aquba. A visit by Turkish President Abdullah Gul to India, followed by a visit by Prime Minister Recep Tayyip Erdogan, is in the cards.

The Indian Oil Corporation is already building pipelines in Turkey. A major Indian company belonging to the powerful Reliance Group (which has collaboration with Chevron) is active in northern Iraq. (By a curious coincidence, the Kurdish leadership in northern Iraq and the Indian government have employed the same lobbying firm - run by Robert D Blackwill, a former deputy national security advisor and ambassador in New Delhi - to canvass for their interests in Washington.)

Indian companies have traditionally been active in the Iraqi oil sector. But what explains the US's interest at this juncture is that energy cooperation in Iraq could significantly cement the strategic ties between Israel and India and thereby ease Israel's regional isolation. On the face of it, it would have made eminent sense for India to connect Iraq via a pipeline through Iran. But Washington's entire strategy is to cut Iran out of the loop and to instead encourage Turkey, Israel and India to forge an energy grid.

However, a Turkey-Israel-India energy grid may face domestic opposition within India. The question of India partaking of the economic bonanza of US-occupied Iraq may militate sections of the Indian public opinion. The present Indian Parliament has adopted a resolution which seriously delimits Delhi's collaboration with US-occupied Iraq. How Indian public opinion reconciles its antipathy towards US "imperialism" with the tantalizing prospect of the country tapping into Iraq's vast energy reserves will offer an engrossing political and diplomatic spectacle. But, in the short term, the prospect of Iraq as a significant source of energy supply is surely working as yet another damper on India-Iran energy cooperation. In that respect, the US strategy is working.

Turkey major beneficiary
In sheer geopolitical terms, the single biggest beneficiary out of all Iraq's neighbors is going to be Turkey. Shahristani's projects will catapult Turkey into the status of a crucially important energy hub in the US's strategy. During his Washington visit last month, Turkish President Gul had meetings with Bush, Vice President Dick Cheney and the secretaries of State and Energy. The agenda of discussions related to the US and Turkey jointly working in Iraq to develop its energy sources.

US-Turkey energy cooperation in Iraq impacts on the geopolitics of the region in many directions. First, Washington will expect that Turkey go slowly on expanding and deepening its cooperative ties with Iran, a trend that the Bush administration had been viewing with disquiet in the recent past. Turkey can be expected to respond with pragmatism and calibrate its ties with Iran in accordance with the US sensitivity.

In turn, any recalibration of the dynamics of Turkish-Iranian ties will be a matter of utmost satisfaction for Israel. Correspondingly, therefore, we may expect a revival of warmth in Turkish-Israeli relations. Furthermore, Turkey is now poised to be a conduit for energy supplies from northern Iraq to Israel. Israel already enjoys strong influence in the Kurdistan region in northern Iraq. Thus, there is a tremendous convergence of interests between Turkey and Israel over issues of Israel's energy security.

The Israel-Turkey political axis is bound to consolidate in the coming period, thanks to Iraq's oil. But from Turkey's point of view, the most important outcome is the readiness on the part of Washington to disengage from its erstwhile Kurdish allies in northern Iraq. This is already giving Ankara a relatively free hand in militarily countering Kurdish militant activities. Washington is not only turning a blind eye to Turkish military incursions into northern Iraq but is even reportedly sharing vital intelligence with Turkey, which makes the Turkish military's "hot pursuit" of Kurdish militants inside northern Iraq more effective. Washington is definitely leaning on the Iraqi Kurdish leadership to rein in the activities of Turkish militants based in northern Iraq.

Equally, Turkey is able to exploit the vested interests of Iraqi Kurdish leaders in oil trade. There are signs that Iraqi Kurdish leaders are cooperating with the Turkish military operations in meaningful ways.

Turkey has certainly influenced the US decision to scuttle on technical grounds the holding of a referendum regarding the status of oil-rich Kirkuk region in December as provided under the provisional Iraqi constitution of 2005. Conceivably, growing US dependence on Turkey could even lead to an indefinite postponement of the referendum beyond June this year. Turkey is pressing for a UN-negotiated "special status" for Kirkuk, making it a region unto itself. Washington may well heed the Turkish suggestion. At a minimum, Ankara can heave a sigh of relief that the specter of an independent Kurdish national identity taking shape in northern Iraq has receded into the background. Without US backing, it is simply not possible for the Kurds in northern Iraq to assert their independence.

Turkey also finds common ground with the Iraqi Sunni and Shi'ite political blocs, who have made a pact against holding any referendum in Kirkuk until a new law is passed that would firmly establish Baghdad's control over the province's oil wealth. This enhances Turkey's leverage in Baghdad. The Iraqi political alliance challenging the Kurdish separatist aspirations includes as many as 145 legislators in the 275-member Iraqi Parliament.

Indeed, from the Turkish perspective, all this is far from offering a permanent solution to the Kurdish problem as such. As the prominent Turkish editor Ilnur Cevik pointed out recently, "It is a problem that has to be addressed with pragmatism and with the notion that there are citizens of Kurdish origin who still do not feel they are being treated as first class citizens of the Turkish republic." But the fact remains that Turkey gains valuable time to set its own house in order while Washington dotes on Ankara as a key ally in Iraq.

Turkey has played its cards brilliantly. With the correct mix of strategic defiance and realism, Ankara has persuaded the Bush administration to view the northern Iraqi situation through its prism. In fact, out of all Iraq's neighbors, it is Turkey that the US will have to count on in the coming period. The Turkish-US relationship, which went through a bad four-year period following Ankara's refusal to assist in the US invasion of Iraq, has certainly regained some of its traditional verve as a key alliance. This adds immensely to Turkey's regional status vis-a-vis its Arab neighbors, Russia, Iran, and even the European countries.

Turkey's influential role in Iraq, in fact, makes it a significant player in the Middle East. But, more important to medium-term Turkish national priorities would be that Europe would be more inclined as time passes to take note of Turkey's strategic importance. For the EU, Turkey is emerging as a vital energy bridge connecting the Middle East. At some point in the foreseeable future, this should turn to Turkey's advantage, if only Ankara relentlessly continues to pursue its EU membership.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for over 29 years, with postings including India's ambassador to Uzbekistan (1995-1998) and to Turkey (1998-2001).

Top Scientists Want Research Free From Politics

By Adrianne Appel

Go to Original

Boston - Leading U.S. scientists called on Congress Thursday to make sure the next president does not do what they say the George W. Bush Administration has done: censor, suppress and falsify important environmental and health research. "The next president and Congress must cultivate an environment where reliable scientific advice flows freely," said Susan Wood, a former director of women's research at the U.S. Food and Drug Administration (FDA). Wood resigned her post in 2005 in protest over the FDA's delay in getting emergency, over-the-counter birth control onto the market.

"Serious consequences can result when drug safety decisions are not based on the best available scientific advice from staff scientists and experts," she said.

Wood joined a panel of prominent scientists in Boston - convened by the Union of Concerned Scientists, an activist group - to announce a joint statement asking Congress to protect scientific integrity. Among the more than 15,000 government scientists signing onto the statement are Harold Varmus, president of Memorial Sloan-Kettering Cancer Centre and former director of the National Institutes of Health (NIH); and Anthony Robbins, professor of medicine at Tufts University and former director of the National Institute for Occupational Safety and Health.

"Although surely the worst, the Bush Administration is not the first, nor will it be the last administration to mistreat and misuse science and scientists," Robbins said. The White House itself has been directly involved in the suppression and falsification of science, Robbins stressed.

But interference from the White House is just part of the problem, said Francesca Grifo, a former government researcher and now a director at the Union of Concerned Scientists. Industry lobbyists are all over government agencies, trying to influence research that will impact their corporations, she said. "These special interest groups are being given access at the highest level."

"Government scientists have had their findings subjected to censorship and misrepresentation," said Kurt Gottfried, professor of physics at Cornell University and a member of the Union of Concerned Scientists. "The public and Congress have often been deprived of accurate and candid scientific information."

"The pursuit of science in an open society has had a long and fruitful tradition in America," Gottfried said. "Unfortunately, this tradition has been violated in recent years by the government itself."

The Union of Concerned Scientists has been tracking the Bush Administration's activities within the scientific community. No fewer than 1,191 scientists employed at nine federal agencies have reported to the group that they fear retaliation from their superiors because the results of their research are threatening to corporate or other interests, according to Grifo.

"What we've been seeing is that when certain programs produce research results that are considered inconvenient they are being penalized by having their funding cut," Grifo told IPS. One such program is an annual listing of pollutants released by private companies, called the Toxic Release Inventory.

"We have seen it undermined," Grifo said. The NASA satellite research program Mission to Planet Earth, which documents environmental degradation, also has been the target of severe budget cuts, Grifo said.

"When science is falsified, fabricated or censored Americans' health and safety suffer," Grifo said.

This interference has been directed at climate change research, new birth control drugs, species protection, consumer safety studies and agricultural research, the scientists said.

The suppression of health data by the federal Environmental Protection Agency (EPA) may cost many people who were at Ground Zero in New York City - or lived nearby on Sep. 11 - their health, the scientists said. Following the attacks of Sep. 11, then-EPA administrator Christine Todd Whitman went before the public and safety personnel on numerous occasions and said that the dust hovering over Ground Zero and settling over New York was not harmful. Many rescue workers and local residents have since become gravely ill due to the toxicity of the air they breathed.

The fate of the Greater Sage grouse is unknown since a top government official interfered with scientific studies showing that the bird and its habitat needed protection from development, the scientists said. Julie MacDonald stalled the release of studies on the grouse by questioning the methodology and conclusions. An expert panel never saw the studies and so recommended the bird not be protected.

Robin Ingle, a former statistician with the Consumer Product Safety Commission, said the commission refused to warn the public about gross problems with products like all-terrain vehicles even when research made clear how dangerous they were. "A political appointee at my agency prevented my research on all-terrain-vehicle safety from reaching the public, even when deaths and injuries occurred," she said.

"It's very important that scientific and mathematical research on consumer products be free of the push and pull of politics because you don't want it to be biased in favour of the industry," Ingle told IPS.

In another example, a microbiologist at the U.S. Department of Agriculture was prevented 11 times from publicizing his research about the dangers of bacteria in the air near massive pig farms in Iowa and Missouri - a big business that supplies America's pork. His research found that the bacteria are resistant to antibiotics. But his supervisor refused to allow him to discuss his results, saying in one memo to him: "politically sensitive and controversial issues require discretion."

Counting Iraqi Casualties - and a Media Controversy

By John Tirman

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The author commissioned the "Lancet" study recently attacked in a National Journal report and by the Wall Street Journal. He calls the criticism a "hatchet job," fraudulent or based on innuendo.

One puzzling aspect of the news media's coverage of the Iraq war is their squeamish treatment of Iraqi casualties. The scale of fatalities and wounded is a difficult number to calculate, but its importance should be obvious. Yet, apart from some rare and sporadic attention to mortality figures, the topic is virtually absent from the airwaves and news pages of America. This absence leaves the field to gross misunderstandings, ideological agendas, and political vendettas.

The upshot is that the American public - and U.S. policy makers, for that matter - are badly informed on a vital dimension of the war effort. As an academic interested in the war's violence, I commissioned a household survey in October 2005 to gauge mortality, and I naturally turned to the best professionals available - the Johns Hopkins University epidemiologists who had conducted such surveys before in Iraq, Congo, and elsewhere. Their survey of 1,850 households resulted in a shocking number: 600,000 dead by violence in the first 40 months of the war. The survey was extensively peer reviewed and published in the British medical journal, the Lancet, in October 2006.

The findings caused a ripple of interest (in part because President Bush, during a press conference, called the results "not credible") and stirred a very lively debate among the few people interested in the methods. By and large, however, the survey passed from public view fairly quickly, and the news media continued to cite the very low numbers produced by the Iraq Body Count, a U.K.-based NGO that counts civilian deaths through English-language newspaper reports.

Another survey, this one undertaken by a private U.K. firm, Opinion Business Research (ORB), found more than one million dead through August 2007. Yet another, a much larger house-to-house survey was conducted by the Iraq Ministry of Health (MoH). This also found a sizable mortality figure - 400,000 "excess deaths" (the number above the pre-war death rate), but estimated 151,000 killed by violence. The period covered was the same as the survey published in The Lancet, but was not released until January 2008.

The ORB results were almost totally ignored in the American press, and the MoH numbers, which did get one-day play, were covered incompletely. Virtually no newspaper report dug into the data tables of the Iraqi MoH report, published in the New England Journal of Medicine, for that total excess mortality figure, or to ask why the MoH report showed a flat rate for killing throughout the war when every other account shows sharp increases through 2005 and 2006. The logical explanation for this discrepancy is that people responding to interviewers from the government, and a ministry controlled by Moktada al Sadr, would not want to admit that their loved one died by violence. There were, instead, very large numbers of dead by road accidents and "unintentional injuries." The American press completely missed this.

What some in the news media did not miss, however, was a full-scale assault on the legitimacy of the Lancet article by the National Journal, the "insider" Capitol Hill weekly.

The attack, by reporters Carl Cannon and Neil Munro, which was largely built on persistent complaints of two critics and heaps of innuendo, was largely ignored - its circulation is only about 10,000 - until the Wall Street Journal picked up on one bit of their litany: that "George Soros" funded the survey. "The Lancet study was funded by anti-Bush partisans and conducted by antiwar activists posing as objective researchers," said the January 9, 2008, editorial (titled "The Lancet's Political Hit") and concluded: "the Lancet study could hardly be more unreliable." The editorial created sensation in the right-wing blogosphere and in several allied news outlets.

Let me convey what I thought was a simple and unremarkable fact I told Munro in an interview in November and one of the Lancet authors emailed Cannon the details of how the survey was funded. My center at MIT used internal funds to underwrite the survey. More than six months after the survey was commissioned, the Open Society Institute, the charitable foundation begun by Soros, provided a grant to support public education efforts of the issue. We used that to pay for some travel for lectures, a web site, and so on.

OSI, much less Soros himself (who likely was not even aware of this small grant), had nothing to do with the origination, conduct, or results of the survey. The researchers and authors did not know OSI, among other donors, had contributed. And we had hoped the survey's findings would appear earlier in the year but were impeded by the violence in Iraq. All of this was told repeatedly to Munro and Cannon, but they choose to falsify the story. Charges of political timing were especially ludicrous, because we started more than a year before the 2006 election and tried to do the survey as quickly as possible. It was published when the data were ready.

The New York Post and the Sunday Times of London, both owned by Rupert Murdoch, followed the WSJ editorial and trumpeted the Soros connection and the supposed "fraud" which Munro and Cannon hinted. "$OROS IRAQ DEATH STORY WAS A SHAM" was a headline in the Post, which was followed by a story in which scarcely anything stated was true.

The charges of "fraud" that were also central to the National Journal piece were based on distortions or ignorance of statistical method, such as random sampling and sample size, or speculations about Iraqi field researchers fabricating data. Nothing close to proof of misdeeds was ever offered.

The two principal authors, Gilbert Burnham and Les Roberts, parried the fraud charges effectively on their web site and in letters to the editors, but of course these are rarely noticed as much as the original charges. Those charges were wholly speculative and at times based on small irregularities in the collection of data, hardly a crime in the midst of the bloodiest period of the war. For example, some death certificates were not collected from respondents; about 80 percent of the time they were. (In the Iraqi MoH survey, death certificates were never collected, making their claims about violence v. nonviolent causes unconfirmable.)

In any case, the many peer reviews of The Lancet article, including one by a special committee of the World Health Organization, gave the survey methods and operations passing grades.

Munro then went on the Glenn Beck program and suggested the Iraqi researchers were unreliable ("without U.S. supervision") and that the Lancet authors "made it clear they wanted this study published before the election." Both of those assertions are untrue. Beck then repeated these allegations on his radio program, and added that there was no peer review of the fatality figures, another falsehood, and "we're getting it jammed down our throat by people who are undercover who are pulling purse strings, who are manipulating the news."

The charge, repeated in all these media, that the Iraqi research leader, Riyadh Lafta, M.D., operated "without U.S. supervision" and was therefore suspect is particularly interesting. Munro, in a note to National Review Online, asserted that Lafta "said Allah guided the prior 2004 Lancet/Johns Hopkins death-survey," which he also had noted in the National Journal piece. When he interviewed me he pestered me about two anonymous donors, demanding to know if either were Arab or Muslim. A pattern here is visible, one which reeks of religious prejudice.

Munro had also ignored the corroborating evidence I sent him, the 4.5 million displaced (suggesting hundreds of thousands of fatalities, drawing on the ratio of all other wars); estimates of new widows (500,000 from the war); and the other surveys done in Iraq suggesting enormous numbers of casualties (ABC/USA Today poll of March 2007, showing roughly 53% physically harmed by war). When I mentioned these things to him on the telephone, he literally screamed that such data didn't matter, that the Lancet probe was "a hoax." Lancet article authors also cite several cases where they were misquoted. The National Journal's editors have been informed of their reporters' misconduct and errors, and have not responded.

So the smear is complete - a "political hit" by the "anti-Bush billionaire," complicity by anti-war academics, fraud by Muslims devoted to Allah - and repeated over and over in the right-wing media. Little has of this has appeared in the legitimate news media, apart from right-wing columnists like Jeff Jacoby in the Boston Globe.

One might expect that such nonsense is obvious to neutral observers, but it constitutes a kind of harassment that scholars must fend off, diverting from more important work. Gilbert Burnham, the lead author on the Lancet article, runs health clinics in Afghanistan and East Africa, and is spending inordinate amounts of time responding to the attacks. Les Roberts, a coauthor, and I have both had colleagues at our universities called by Munro to ask if they would punish us for fraud. The OSI people have also been writing letters to set the record straight. Most important, Riyadh Lafta, who has been threatened before, may be in more danger due to these attacks.

As to the issue of the human cost of the war, even the legitimate press that has avoided this kerfuffle might be intimidated from taking on the issue in depth. The fact that the National Journal hatchet job and the MoH survey appeared within days of each other sent a message to editors around the United States - one survey is "discredited" and one is legitimate. The treatment of the MoH survey that week often noted its death-by-violence number was one-fourth of the Lancet figure - forgetting, again, that total war-related mortality were much closer in both, and congruent with other surveys. The New York Times did run an editorial in early February about the dead in Iraq - the 124 journalists killed in the war.

The topic of the war's exceptional human costs, now inflamed by these calumnies, appears to be too hot to handle. Even with all this fuss in January, no explorations of the Iraqi mortality from the war have appeared in the major dailies. No editorials, no examination of the methods (or the danger and difficulty of collecting data), no sense that the scale of killing might affect the American position, or might shed some light on U.S. war strategy, or might point to honorable exits and reconstruction obligations. Remarkably, no curiosity at all about the dead of Iraq, and what they can tell us.

That, in the end, may be the biggest injustice of all.

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Links:

All the surveys can be found here http://mit.edu/humancostiraq.

The National Journal article, "Data Bomb," is here http://news.nationaljournal.com/articles/databomb/index.htm.

My annotated copy of "Data Bomb" and much more is here http://www.johntirman.com/.

Poverty Is Poison

By Paul Krugman

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"Poverty in early childhood poisons the brain." That was the opening of an article in Saturday's Financial Times, summarizing research presented last week at the American Association for the Advancement of Science.

As the article explained, neuroscientists have found that "many children growing up in very poor families with low social status experience unhealthy levels of stress hormones, which impair their neural development." The effect is to impair language development and memory - and hence the ability to escape poverty - for the rest of the child's life. So now we have another, even more compelling reason to be ashamed about America's record of failing to fight poverty.

L. B. J. declared his "War on Poverty" 44 years ago. Contrary to cynical legend, there actually was a large reduction in poverty over the next few years, especially among children, who saw their poverty rate fall from 23 percent in 1963 to 14 percent in 1969.

But progress stalled thereafter: American politics shifted to the right, attention shifted from the suffering of the poor to the alleged abuses of welfare queens driving Cadillacs, and the fight against poverty was largely abandoned.

In 2006, 17.4 percent of children in America lived below the poverty line, substantially more than in 1969. And even this measure probably understates the true depth of many children's misery.

Living in or near poverty has always been a form of exile, of being cut off from the larger society. But the distance between the poor and the rest of us is much greater than it was 40 years ago, because most American incomes have risen in real terms while the official poverty line has not. To be poor in America today, even more than in the past, is to be an outcast in your own country. And that, the neuroscientists tell us, is what poisons a child's brain.

America's failure to make progress in reducing poverty, especially among children, should provoke a lot of soul-searching. Unfortunately, what it often seems to provoke instead is great creativity in making excuses.

Some of these excuses take the form of assertions that America's poor really aren't all that poor - a claim that always has me wondering whether those making it watched any TV during Hurricane Katrina, or for that matter have ever looked around them while visiting a major American city.

Mainly, however, excuses for poverty involve the assertion that the United States is a land of opportunity, a place where people can start out poor, work hard and become rich.

But the fact of the matter is that Horatio Alger stories are rare, and stories of people trapped by their parents' poverty are all too common. According to one recent estimate, American children born to parents in the bottom fourth of the income distribution have almost a 50 percent chance of staying there - and almost a two-thirds chance of remaining stuck if they're black.

That's not surprising. Growing up in poverty puts you at a disadvantage at every step.

I'd bracket those new studies on brain development in early childhood with a study from the National Center for Education Statistics, which tracked a group of students who were in eighth grade in 1988. The study found, roughly speaking, that in modern America parental status trumps ability: students who did very well on a standardized test but came from low-status families were slightly less likely to get through college than students who tested poorly but had well-off parents.

None of this is inevitable.

Poverty rates are much lower in most European countries than in the United States, mainly because of government programs that help the poor and unlucky.

And governments that set their minds to it can reduce poverty. In Britain, the Labor government that came into office in 1997 made reducing poverty a priority - and despite some setbacks, its program of income subsidies and other aid has achieved a great deal. Child poverty, in particular, has been cut in half by the measure that corresponds most closely to the U.S. definition.

At the moment it's hard to imagine anything comparable happening in this country. To their credit - and to the credit of John Edwards, who goaded them into it - both Hillary Clinton and Barack Obama are proposing new initiatives against poverty. But their proposals are modest in scope and far from central to their campaigns.

I'm not blaming them for that; if a progressive wins this election, it will be by promising to ease the anxiety of the middle class rather than aiding the poor. And for a variety of reasons, health care, not poverty, should be the first priority of a Democratic administration.

But ultimately, let's hope that the nation turns back to the task it abandoned - that of ending the poverty that still poisons so many American lives.

Does Ben Bernanke Have to Go?

By Dean Baker

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This is a question that members of Congress should be asking right now. It is becoming increasing clear that we are facing the worst financial meltdown since the Depression, and Mr. Bernanke was caught asleep at the wheel.

In testimonies before Congress and other statements he repeatedly assured the public that there was no bubble in the housing market, arguing that fundamental factors explained the unprecedented 70 percent increase in inflation-adjusted house prices from 1996 to 2006. Such reassurances undoubtedly helped sustain the bubble until it finally reached the bursting point last year.

Even after the bubble began to burst, Mr. Bernanke failed to recognize the seriousness of the problem. As recently as last July, he told Congress that, "for the most part, financial markets have remained supportive of economic growth," failing to see the financial tsunami that was about to engulf the economy and push it into a recession. As the successive waves have hit the economy, Bernanke has been consistently behind the curve. Even at this date, he still has not acknowledged the likely damage to financial markets and the economy from the loss of as much as $8 trillion in housing bubble wealth.

In fairness to Bernanke, most of the blame for the housing bubble rests on the shoulders of his predecessor, Alan Greenspan. However, Mr. Greenspan has fled the scene of the crime. (Actually he is still there, busily trying to rationalize his failures, but Greenspan is no longer accountable to Congress.)

There were failures by any number of federal and state regulatory agencies that should also be brought into the picture. It was impossible for anyone to look at the explosion of the subprime mortgage market from 2004 to 2007 and not realize that it was being driven by some very seriously irrational exuberance. There are hundreds of people in decision-making positions at regulatory agencies who should be getting pink slips right now.

But the reason that Congress should focus on Bernanke is to reestablish the principle of Fed accountability. The Federal Reserve Board was set up to be independent of Congress. The basic principle, that we don't want Congress setting interest rates, is a sound one. However, that doesn't mean that the Fed should not be answerable to Congress. In recent years, the Fed chairman has been treated as an oracle of knowledge whose wisdom would trickle down to members of Congress and the public at large in selected pronouncements. Alan Greenspan certainly sought to cultivate this attitude.

However, the reality is that the Fed chairs are mortals like the rest of us, and oftentimes mortals who actually do their job very poorly. Allowing the housing bubble to grow unchecked was a mistake of monumental proportions. It was inevitable that it would end badly. There is absolutely no excuse for a competent macro economist to have missed the growth of this bubble. The country had never seen this sort of run-up in house prices. Furthermore, there was no explanation for this run-up, based on the fundamentals of supply and demand in the housing market, that passed the laugh test.

Yet, the Fed chairmen either did not see the bubble or chose to ignore it. As Greenspan said repeatedly in reference to the stock bubble, he thought it was best just to let the bubble run its course and then pick up the pieces after it burst. Well, it is not easy to pick up the pieces after bubbles burst, and that is going to be even more true with the housing bubble than with the stock bubble.

In addition to having a recession, which is likely to be long and deep, tens of millions of homeowners are seeing much of their life savings disappear before their eyes. After all, the Fed chairman and other experts assured them that there was no bubble, so why should they think that the price of their home could fall 30 or 40 percent? Unlike former Fed chairmen, these homeowners will not have the opportunity to sign multimillion-dollar book contracts or give speeches at a quarter million dollars a shot.

We are just at the beginning of the housing crash recession. It will get much worse, as the economists who never saw it coming are now recognizing. There will be many more credit freeze-ups and debt write-downs that are an order of magnitude larger than what we have seen to date. There will be plenty of blame to go around in this story, but it is not too early to start holding people accountable. There was a colossal failure of economic policy, and its perpetrators should not be able to walk away unscathed.

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Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.

Vote in Pakistan May Not Yield Clear Winner

By Jane Perlez and Carlotta Gall

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Lahore, Pakistan - Fearful of violence and deterred by confusion at polling stations, Pakistanis voted Monday in parliamentary elections that may fail to produce a clear winner and could result in protracted post-election political skirmishing.

A number of clashes among polling officials and voters resulted in 10 people killed and 70 injured, according to Pakistani television channels.

Voter turnout was low; in the North West Frontier Province, which abuts the lawless tribal areas, turnout was only 20 percent, according to election officials. In Peshawar, the provincial capital, Islamic militants prevented many women from voting. Election official estimated that only 523 of 6,431 registered female voters at six polling stations cast ballots.

In Lahore, the political capital of Punjab province, lines were thin, and many voters complained they could not find their names on the voting lists.

But as the polls closed at 5 p.m. local time, election officials said that nationwide voting had been relatively calm compared to past elections.

"We had more violence in one by-election in Karachi last year than across the country today," said Staffan Darnolf, the country director for the International Foundation for Election Systems, a non-partisan group based in the United States that has been advising Pakistan for more than year on election procedures.

At stake in the election is the question of what kind of elected government will emerge in Pakistan after eight years of military rule under President Pervez Musharraf.

Mr. Musharraf, who stepped down as army chief last November after being re-elected to another five year term, has seen his popularity plummet as the country has faced a determined insurgency by the Taliban and Al Qaeda, and a deteriorating economy.

Analysts were uncertain whether the two opposition parties, the Pakistan Peoples Party of the assassinated former Prime Minister Benazir Bhutto, and the Pakistan Muslim League led by former Prime Minister Nawaz Sharif, would make a commanding showing Monday.

The two parties were handicapped during the election campaign by the death of Ms. Bhutto, restrictions on campaigning for security reasons, and the fact that their leadership had been in exile for the last eight years.

The party that has supported Mr. Musharraf, the Pakistan Muslim League-Q, was expected to fare more poorly than in the last parliamentary elections five years ago. But analysts said it would almost certainly have enough votes to form a coalition government, most probably with the Pakistan Peoples Party.

A low voter turnout would benefit Mr. Musharraf's party, they said.

Nervousness about suicide bombers was most palpable in Peshawar, the capital of the North West Frontier Province.

"We were thinking of not coming, people are afraid because of bombs and suicide bombers," said Huma Shaqwell, 22, a college student.

Heavily armed police were posted at many polling stations, and more than 80,000 soldiers were deployed by the army to keep law and order.

But hot tempers and deep suspicions about vote rigging created a tense election day, marked in some places by the temporary closure of polling stations to restore calm.

The voting got off to a poor start in Punjab, the most important province, with 148 of the 272 contested parliamentary seats. On election eve night, a Pakistan Muslim League-N candidate for the provincial assembly, Chaudhry Asif Ashraf, was shot to death, and three others injured when gunmen opened fire on his car.

In Lahore, Fasih Ahmed, a businessman, said that by noon he had still not found his name on any list at the polling station.

In the general atmosphere of insecurity in Pakistan, he was nervous, he said, standing in the open on the street as he waited to check voting lists.

Early in the day, voting in Rawalpindi, the sprawling city adjacent to the capital Islamabad, was sluggish.

"Of course people are scared," said Naheed Khan, a longtime assistant to Ms. Bhutto who was traveling with her in her car when she was killed.

"The government has failed to control the law and order situation," she said.

Nevertheless, Ms. Bhutto's party would prevail, she said. "If there is no government rigging, the Peoples Party will win because people want to come out in her memory," she said, wiping away tears as she listened to Ms. Bhutto's voice from a speech played over loud speakers in the street.

A number of those voting in Rawalpindi said they wanted change.

"We know who is going to win, "Q" is going to win, by cheating," said Ammar Khalid, 23, an economics student, referring to the Pakistan Muslim League-Q which backs Mr. Musharraf. "But we are still voting, for P.P.P.," he said. "We want that there should not be a dictator, he is illegal, and unconstitutional," he said of Mr. Musharraf.

"You will see the change," said Danish Sardar, 26, a businessman who voted for Mr Sharif's party. "The tiger will bring it," he said, referring to Mr. Sharif's party, which has the symbol of a tiger on the ballot paper.

In Gujrat, the stronghold of the Chaudhry clan who are the most powerful supporters of Mr. Musharraf, several polling stations were closed for periods of time because of arguments over voter lists.

In many places in Gujrat, basic election commission rules were flouted as police stood inside polling stations, and many polling stations looked like campaign headquarters for the incumbent candidate, Chaudhry Shujaat, who is also chairman of the Pakistan Muslim League-Q.

Numerous green flags of his party decorated the entrance to polling places. Men in civilian clothes with arm bands saying "special security" and carrying long sticks patrolled many of the schools that were serving as voting stations. The men said they had been hired to work by the local government which is controlled by a relative of Mr. Shujaat.

A worker for Ahmad Mukhtar, the Pakistan Peoples Party challenger to Mr. Shujaat, complained that the procedures at one of the biggest polling stations were so chaotic that voters had been turned away.

"By 11:30, only 70 votes have been cast, and 100 people have been turned away," the worker, Shahida Naeem, who is the sister of the candidate, said as she argued with female polling officials.

Groups of international observers, including three United States senators and a team of more than 100 observers from the European Union, watched the voting at various places across the country.

One of the senators, the chairman of the Senate Foreign Relations Committee, Senator Joseph R. Biden Jr., of Delaware, said that if the vote went smoothly, he would argue for increased funding for economic development in Pakistan. "If the vote is viewed as credible, there should be a democratic dividend," Mr. Biden said.

Mr. Biden said he was prepared to recommend that the $500 million that Pakistan now receives annually from the United States for development be tripled to $1.5 billion a year if it was a fair election.

But, he said, if the poll was deeply flawed, he would seek to curtail Washington's large military support of Pakistan, particularly expensive weapons.

In order for Washington and Pakistan to forge a successful strategy against the insurgency, it was critical, he said, that a democratically elected government emerge from the election that could rally popular support against the Taliban and Al Qaeda.

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Jane Perlez reported from Lahore, Pakistan, and Carlotta Gall from Islamabad, Pakistan. David Rohde contributed reporting from Peshawar, Pakistan, and Salman Masood from Rawalpindi, Pakistan.

Call for Musharraf to go after election

By ROBERT H. REID

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A top opposition leader called Tuesday on President Pervez Musharraf to step aside after his ruling party conceded defeat in parliamentary elections. The vote was also a slap to Islamist parties, which lost control of a province where al-Qaida and Taliban fighters have sought refuge.

With counting from Monday's election nearly complete, the two main opposition parties won a total of 154 of the 268 contested seats, according to the Election Commission.

The pro-Musharraf party trailed with 39 seats, and the group's leader acknowledged the loss.

"We accept the election results, and will sit on opposition benches," Chaudhry Shujaat Hussain, chairman of the Pakistan Muslim League-Q, told AP Television News. "We are accepting the results with grace and open heart."

Although final official results were not expected until Wednesday, opposition parties were confident of victory and began mapping plans for a new government and a possible showdown with Musharraf.

Nawaz Sharif, a former prime minister and leader of the opposition Pakistan Muslim League-N, recalled statements by Musharraf last year that he would step down only if he lost the support of the Pakistani people.

"He has closed his eyes. He has said before that he would go when the people want him to do so and now the people have given their verdict," Sharif told reporters in Lahore.

The Pakistan People's Party of assassinated ex-prime minister Benazir Bhutto was leading with 86 seats and was likely to spearhead the new government in partnership with other opposition groups.

Bhutto's husband, Asif Ali Zardari, told reporters Tuesday he would meet soon with Sharif and other opposition leaders "to form a government of national unity." Zardari made clear he would not include politicians who had been allied with Musharraf.

"We will seek support from democratic forces to form the government, but we are not interested in any of those people who are part and parcel of the previous government," Zardari said.

But Zardari carefully avoided an unequivocal statement about whether Musharraf should remain in power. The two main opposition parties were unlikely to finish with two-thirds of the seats required to impeach the president.

Musharraf's spokesman, Rashid Quereshi, rejected suggestions the Pakistani president step down. Sen. John Kerry, who met Tuesday with Musharraf along with other U.S. lawmakers, said the Pakistani leader expressed willingness to work with the new government.

But the former general is so unpopular among the Pakistani public that opposition parties are likely to find little reason to work with him — particularly since he no longer controls the powerful army.

At best, Musharraf faces the prospect of remaining in power with sharply diminished powers even if the opposition fails to muster the two-thirds support in parliament to impeach him. Constitutionally, the president is the head of state and nominally the commander in chief of the armed forces. He also has the power to dissolve parliament.

But the prime minister runs the government on a day-to-day basis. With a strong electoral mandate, the new prime minister would doubtless command greater authority than those who served under Musharraf's military rule.

The White House, which has backed Musharraf because of his support for the war against terror, declined to comment until the final results were announced. But a State Department spokeswoman, Nicole Thompson, called the election "an important step on the path towards an elected, civilian democracy."

Sen. Joseph Biden, a Democrat who chairs the Senate Foreign Relations Committee and one of several U.S. lawmakers who observed the election, said the results mean the United States can shift its Pakistan policy.

"This is an opportunity for us to move from a policy that has been focused on a personality to one based on an entire people," Biden said, adding that Washington should encourage more deeply rooted democracy in Pakistan.

Pakistani analysts said the results pointed to broad support for centrist, democratic parties at the expense of patronage politicians and Islamist movements.

The pro-Taliban Jamiat-e-Ulema party won only three seats in the national parliament. And a coalition of Islamist religious parties was poised to lose control of the regional administration in the North West Frontier Province, which it won in the 2002 elections.

Unofficial returns showed the secular Awami National Party had won 31 of the 96 contested seats in the provincial assembly, with the religious United Action Forum taking only nine seats.

Awami vice chairman Haji Ghulan Ahmad Balor said his group would form a governing coalition with other "like-minded" factions.

Residents of the province had complained the Islamist government failed to provide public services and was unable to prevent foreign fighters from crossing the border from Afghanistan.