Tuesday, February 19, 2008

Consumers may not be able to avoid cloned food

Consumers may not be able to avoid cloned food

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/


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

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?

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

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

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

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

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?

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

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

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.