Thursday, March 6, 2008

Arms Dealer's Planes Flew U.S. Missions in Iraq

Arms Dealer's Planes Flew U.S. Missions in Iraq

Viktor Bout Was an International Fugitive at the Time His Planes Were Used by the U.S.

By Justin Rood and Maddy Sauer

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hen U.S. officials announce the arrest of a notorious arms dealer and drug-runner this afternoon, the fact that his planes flew U.S. supply missions in Iraq will likely go unmentioned.

In a January 2005 letter to Congress, then-Assistant Defense Secretary Paul Wolfowitz admitted the Defense Department "did conduct business with companies that, in turn, subcontracted work to second-tier providers who leased aircraft owned by companies associated with Mr. Bout."

At the time, Bout was already a wanted international fugitive. Intelligence officials had considered Bout one of the greatest threats to U.S. interests, in the same league as al Qaeda kingpin Osama bin Laden. Interpol had issued a warrant for his arrest; the United Nations Security Council had restricted his travel.

But that didn't stop U.S. government contractors from paying Bout-controlled firms roughly $60 million to fly supplies into Iraq in support of the U.S. war effort, according to a book released last year by two reporters who investigated Bout. And it didn't prevent the U.S. military from giving Bout's pilots millions of dollars in free airplane fuel while they were flying U.S. supply flights.

From 2003 through at least 2005, Pentagon contractors used air cargo companies known to be connected to Bout to fly an estimated 1,000 supply trips into and out of Iraq, according to "Merchant of Death: Money, Guns, Plans, and the Man Who Makes War Possible" by Douglas Farah and Stephen Braun. A Pentagon spokesman confirmed to the authors that the military gave 500,000 gallons of fuel to Bout's pilots.

In an interview Thursday, Farah said he understood Bout may have worked on behalf of the U.S. government as recently as last year.

Recent intelligence has indicated Bout supplied armor-piercing missiles to Hezbollah in the summer of 2006 and arms to Somalian warlords which fueled a conflagration that December, Farah said.

In a very rare public appearance, Bout was a guest on state-run Russian television last year where he vigorously defended himself against the criminal allegations.

"Even with all power of American administration, CIA, FBI and all means like satellites and this, they not even able to come back with a certain proof so that I could answer," he said in choppy English. "Is very easy to blame somebody without coming with the proper documents, without coming with a proof of what they're trying to say or trying to blame."

Bout also admitted he met with Mullah Omar in Afghanistan but denied that he ever did business with the Taliban.

"I had no any relation with this kind of people. That's completely untrue," he said. Bout said the meeting with Omar was in regards to negotiating the release of his plane crew members that had been kidnapped by Taliban members.

He referred to the allegations that he's involved in U.S. supply missions in Iraq as "very funny."

While he denied trading arms, he did say that his planes might have carried weapons without his knowledge.

"Let's then ask Moscow taxi drivers where they ever had transported criminals or somebody related to the criminal network," he said. "I'm transporter, what we did, we did."

Bout's work in Iraq first became public in a May 2004 article in the Financial Times newspaper. CIA officials in Washington secretly warned colleagues in Baghdad of the ties in fall 2003, the authors report. "It would appear...that it did not make its way to the correct folks," the two writers quote an unnamed CIA official as saying.

Bout didn't just walk away with millions of taxpayer dollars, Farah and Braun found. The military issued Bout's pilots supply cards allowing them to gas up their planes for free when landing in Iraq. A Defense Department spokesman confirmed to the authors that Bout's fleet were provided nearly 500,000 gallons of fuel from the Baghdad airport courtesy of the U.S. Air Force.

Bout made his fortune in the 1990s selling Soviet-era weaponry to Third World despots and insurgent groups. Using a "veiled, complex corporate structure," Bout dispatched fleets of Cold War-era Soviet cargo planes to some of the most inhospitable corners of the earth, running guns for dictators, including Liberia's Charles Taylor and Zaire's Mubuto Sese Seko, as well as rebel leaders in Angola, Sierra Leone and beyond. By 2000, U.S. government officials considered him one of the leading threats to the United States, on par with Osama bin Laden and global warming.

Bout was the inspiration for the 2005 film, "Lord of War," starring Nicolas Cage as an international arms dealer who will sell to all sides of any conflict. Bout reportedly rented his planes to the movie's producers for use in the film.

Bout's net worth is not known, but it is reportedly "in the tens of millions of dollars."

Don’t Blame The Inmates Of The Lunatic Asylum

Don't Blame The Inmates Of The Lunatic Asylum

By Alan Hart

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Some Israeli and other Jewish opponents of Zionism's colonial enterprise have described Israel as a "fascist" state. I think the more appropriate terminology is lunatic asylum. But I don't blame the inmates (the Jewish citizens of the state) for what's happening. They are as much the products of Zionist brainwashing as are the supporters of Israel right or wrong throughout the mainly Gentile Judeo-Christian world. I blame the wardens and management of the asylum (Israel's military and political leaders)

Israel's leaders still believe that by means of brute force and reducing them to abject poverty, they can break the will of the Palestinians to continue their struggle for their rights. The assumption being that, at a point, and out of total despair, the Palestinians will be prepared to accept crumbs from Zionism's table in the shape of two or three bantustans, or, better still, will abandon their homeland and seek a new life in other countries. In my view the conviction that Zionism will one day succeed in breaking the Palestinian will to continue the struggle for an acceptable minimum of justice is the product of minds which are deluded to the point of clinical madness.

There is, however, one solid piece of evidence that a majority of Israeli Jews are not as mad as their leaders. It's in the fact that 64% of them have said their government must hold direct talks with Hamas. Less than one-third, 28%, opposes such talks. (Those were the findings of a Ha'aretz-Dialog poll. It was was conducted, under the supervision of Professor Camil Fuchs of Tel Aviv University, before Israel's escalation of its confrontation with Hamas in Gaza; and it could be, because of the international condemnation of Israel's massively disproportionate action of the past few days, that even more than 64% now favour direct talks with Hamas).

That's on the one hand. On the other is the fact that Hamas has long been calling for a ceasefire or truce, which, it has indicated, could be extended indefinitely. The problem is that Hamas's leaders are insisting - they would be as mad as Israel's leaders if they were not - that a ceasefire must be a two-way street. And that means Israel would have to end its incursions of Gaza and abandon its policy of targeted assassinations.

Israel's leaders are not going to do that. Their present strategy for Gaza is to make life hell for all of its people in the hope that they will abandon Hamas. And when that doesn't happen? Israel will seek to annihiliate Hamas. I mean competely, not bit by bit.

Question: When is a war crime not a war crime?

Answer: When the perpetrator is the Zionist state of Israel.

It's still the OCCUPATION, stupid!

It's still the OCCUPATION, stupid!

By Eileen Fleming

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Award winning journalist David Rose, reporting in April's Vanity Fair, dropped "the Gaza Bombshell: Secretary of State Condoleezza Rice and President George W. Bush's secret Palestinian intervention backfired in a big way. After failing to anticipate Hamas’s victory over Fatah in the 2006 Palestinian election, the White House cooked up yet another scandalously covert and self-defeating Middle East debacle: part Iran-contra, part Bay of Pigs. With confidential documents, corroborated by outraged former and current U.S. officials, David Rose reveals how President Bush, Condoleezza Rice, and Deputy National-Security Adviser Elliott Abrams backed an armed force under Fatah strongman Muhammad Dahlan, touching off a bloody civil war in Gaza and leaving Hamas stronger than ever.

"There is no one more hated among Hamas members than Muhammad Dahlan, long Fatah’s resident strongman in Gaza. Dahlan, who most recently served as Abbas’s national-security adviser, has spent more than a decade battling Hamas. Dahlan insists that abu Dan was tortured without his knowledge, but the video is proof that his followers’ methods can be brutal. Bush has met Dahlan on at least three occasions. After talks at the White House in July 2003, Bush publicly praised Dahlan as “a good, solid leader.” In private, say multiple Israeli and American officials, the U.S. president described him as “our guy.”

"Vanity Fair has obtained confidential documents, since corroborated by sources in the U.S. and Palestine, which lay bare a covert initiative, approved by Bush and implemented by Secretary of State Condoleezza Rice and Deputy National Security Adviser Elliott Abrams, to provoke a Palestinian civil war. The plan was for forces led by Dahlan, and armed with new weapons supplied at America’s behest, to give Fatah the muscle it needed to remove the democratically elected Hamas-led government from power. The State Department declined to comment." [1]

On March 5th, this civilian journalist received an email from Jerusalem issued from Ramallah, Palestine on 3 March 2008: "In response to the Vanity Fair article (appearing in the April 2008 edition) authored by David Rose, Palestinian Legislative Council Member and former National Security Advisor Mohammed Dahlan states the following:

"1. During my tenure as the National Security Advisor, the US Administration failed to provide any support to the Palestinian Authority. Despite the claims of support, the US Administration failed to offer material or political support to the Palestinian Authority (“PA”). Rather, the US continued to support Israel’s occupation and colonization of Palestine while paying lip service to the Palestinians.

"2. Neither Fatah nor the PA received money from the United States in order to carry out a “coup” against Hamas.

"3. The only “plan” to which the US extended its support was a Palestinian plan to reform the Palestinian Authority’s security services in order to make these services responsive to the needs of all Palestinians in the West Bank and the Gaza Strip. Moreover, this Palestinian-created plan to reform the PA’s security forces was both presented to and approved by the Hamas leadership (in particular deposed PM Ismail Haniyeh). Accordingly there was (and remains) no secret plan to carry out a coup against Hamas. Although the US offered its financial support for the plan to reform the PA’s security forces (by offering assistance for non lethal equipment as requested by the PA), financial support was never received."

Every right thinking person comprehends that the PA is just another layer of The OCCUPATION and that every government lies and all politicians are FOXES, meaning they only care about gaining and keeping power and control.

In September 6, 2005, political analyst Dr. Mustafa Bargouthi, wrote for the Palestinian National Initiative regarding the aftermath of the Gaza

Dr. Mustafa Bargouthi, wrote, "Ninety percent of security violations in Palestine are committed by security forces and intelligence. These forces must be disciplined; the rule of law and an independent judiciary must be installed. [And] it is estimated that 30 percent of the 160,000 salaried government employees do not attend work of any kind. This kind of corruption and nepotism must be ended.’

On February 8, 2005 Bargouthi wrote: "seventy-five Palestinians, including seventeen innocent children, and fourteen Israelis, including two innocent children, were murdered. Two thousand Palestinians had been arrested and 2,306 checkpoints imposed. 8,700 acres of Palestinian land had been confiscated by the Israeli government and while the Palestinians honored the cease-fire, they were attacked 394 times. The so called disengagement from Gaza was just redeployment for the Israeli government maintained controls and all access to Gaza by land, sea, and air. Bargouthi documented that only 25 of the over 150 settlements would be dismantled, and only 8,475 of over 436,000 settlers [less than 2 percent of settlers] were evacuated and 12,800 new settlers moved into the West Bank — 50 percent more settlers than were evacuated." [2]

Reported by If Americans Knew by March 2008:

119 Israeli children have been killed by Palestinians and 982 Palestinian children have been killed by Israelis since September 29, 2000.

1,031 Israelis and at least 4,528 Palestinians have been killed since September 29, 2000.

6,845 Israelis and 31,815 Palestinians have been injured since September 29, 2000.

During Fiscal Year 2007, the U.S. gave more than $6.8 million per day to Israel and $0.3 million per day to the Palestinians.

Israel has been targeted by at least 65 UN resolutions and the Palestinians have been targeted by none.

1 Israeli is being held prisoner by Palestinians, while 10,756 Palestinians are currently imprisoned by Israel.

0 Israeli homes have been demolished by Palestinians and 18,147 Palestinian homes have been demolished by Israel since 1967

The Israeli unemployment rate is 9%, while the Palestinian unemployment is estimated at 40%.

Israel currently has 223 Jewish-only settlements and 'outposts' built on confiscated Palestinian land. Palestinians do not have any settlements on Israeli land. [3]

On June 20, 2007, the AP in Dublin reported on Ireland's eighth annual Forum on Human Rights where Nobel Peace Prize laureate President Jimmy Carter stated, "The Bush administration's refusal to accept the 2006 election victory of Hamas was "criminal" and that Hamas, besides winning a fair and democratic mandate should have been entitled to lead the Palestinian government.

When Hamas fighters routed Fatah in a violent takeover of the Gaza Strip that preceding week, the split prompted Abbas to dissolve the power-sharing government with his rivals in Hamasand set up a Fatah-led administration to govern the West Bank. Carter comprehended that the American-Israeli-European consensus to reopen direct aid to the new government in the West Bank, but to deny the same to the Hamas-controlled Gaza Strip, represented an "effort to divide Palestinians into two peoples."

Empires throughout history have always used the very same tactic.

Carter also observed the 2006 election in which Hamas won 42 percent of the popular vote and a majority of parliamentary seats and affirmed that the election was "orderly and fair" and that Hamas triumphed, because it was "shrewd in selecting candidates," whereas Fatah was divided and corrupt and ran multiple candidates for single seats.

Carter also said the US and Israel, with European Union acquiescence, sought to subvert the outcome by shunning Hamas in order to assist Abbas in keeping the reins of political and military power and, "That action was criminal. The United States and Israel decided to punish all the people in Palestine and did everything they could to deter a compromise between Hamas and Fatah."

Carter also said, that the United States and others supplied the Fatah-controlled security forces in Gaza with vastly superior weaponry in hopes they would "conquer Hamas in Gaza… [and that] this effort to divide Palestinians into two peoples was a step in the wrong direction. All efforts of the international community should be to reconcile the two, but there was no effort from the outside to bring the two together.

On June 20, 2007, Omar Barghouti wrote: "When I saw some of the images coming out of the infighting in Gaza last week, I suppressed my anguish and steaming anger, recalling the wise, almost prophetic, words of the great Brazilian educator, Paulo Freire, who wrote, 'The central problem is this: How can the oppressed, as divided, unauthentic beings, participate in developing the pedagogy of their liberation?...The pedagogy of the oppressed is an instrument for their critical discovery that both they and their oppressors are manifestations of dehumanization.'

"There is no doubt that a faction within Fatah -- overtly funded, trained and steered by the US and Israel -- is the primary suspect behind the flare-up of this bloody internecine strife, which many observers view as a thinly veiled attempt to destabilize Hamas's democratically-elected government, coercing it into accepting Israeli dictates that it had so far balked from.

"While the corruption, lawlessness, profiteering and even betrayal of sections of Fatah have been known and well documented for some time now, the brutal, reckless and in some cases criminal tactics used by armed groups within Hamas were fresh reminders to neutral bystanders who were willing to give the group the benefit of the doubt that it, too, contains a strong, power-hungry faction that is eager to sacrifice principles and human rights to reach its political objectives. Hamas cannot be exonerated from the accusation that, by participating in the legislative and municipal elections according to laws and parameters set by the Oslo agreements, it has already contributed to legitimizing the products of those agreements and forsaken its claim to being a resistance movement that is primarily dedicated to realizing the main tenets of the Palestinian national program of liberation and self-determination...

"In the short term, the political vacuum that will inevitably result from the growing rift between Ramallah and Gaza and the steady collapse of the PA structures and remaining authority on the ground is most likely to be filled by an all-out Israeli reoccupation of the entire West Bank and Gaza. This would announce the official death of the so-called OsloIsrael's incessantly expanding colonies, apartheid wall -- declared illegal by the International Court of Justice -- and intricate apparatus of oppression and humiliation of the Palestinians under its control." [4]

Whether Rose is guilty of any "bad bad journalism" [Bill O'Reilly] and Dahlan is just trying to cover his ass, Carter's and Barghouti's voice were not the only ones raised before the leaked "End of Mission Report" by UN Middle East envoy, Alvaro de Soto came out.

After 25 years at the UN, Alvaro de Soto, stepped down after he exposed American pressure that he argued damaged the impartiality of the UN's peace making efforts. In Mr de Soto's "End of Mission Report", he delivered a devastating criticism of both Israelis and Palestinians, as well as the international community.

"The Quartet of Middle East negotiators - the UN, the US, the EU and Russia - has often failed to hold Israel to its obligations under the Road Map, the current framework for peace talks, he argues. Over the past two years, the Quartet has gradually lost its impartiality. "The fact is that even-handedness has been pummeled into submission in an unprecedented way since the beginning of 2007," he writes. [5]

He blamed overwhelming influence exerted by the US and an "ensuing tendency toward self-censorship" within the UN when it came to criticism of Israel.

"At almost every juncture a premium is put on good relations with the US and improving the UN's relationship with Israel. I have no problem with either goal but I do have a problem with self-delusion," he writes. "Forgetting our ability to influence the Palestinian scene in the hope that it keeps open doors to Israel is to trade our Ace for a Joker."[IBID]

De Soto revealed that after Hamas was democratically elected in 2006, it sought to form a broad coalition government with moderate rivals, including Fatah. But the US discouraged this.

De Soto wrote, "We were told that the US was against any 'blurring' of the line dividing Hamas from those Palestinian political forces committed to the two-state solution…There is a seeming reflex, in any given situation where the UN is to take a position, to ask first how Israel or Washington will react rather than what is the right position to take."[IBID]

De Soto opposed the international boycott placed on the Palestinian government after Hamas was democratically elected and argued that it was wrong to use pressure and isolation alone, and proposed an open dialogue with Hamas as equals in the process towards peace which requires justice; equal human rights for all and that all states and nations would uphold international law.

But, what he came up against was a "heavy barrage" from US officials.

The boycott of Hamas and the siege and blockade of Gaza resulted in gravely serious damage to the Palestinian economy and has resulted in promoting militant radicalism, for hopeless people will vent their frustrations and violence is the way chosen by of the most hopeless.

Clear thinking people condemn all violence as they also comprehend that USA and Israeli policies have fueled the flames of Palestinian militancy. An eye for an eye, tooth for a tooth violent retaliation only begets more violence and the USA and Israeli politicians need to wake up and realize that, season after season, they are reaping what they indeed sow, for they are the ones arrogantly and systematically perpetuating the violence and repression cycle to the point of self-propel.

ONLY by seeing the other as a human being who desires what every human being has a RIGHT to; for it is self evident to right thinking people "That all men are created equal; that they are endowed by their creator with certain unalienable rights; that, among these, are life, liberty and the pursuit of happiness; and that, to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed; and, whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it." -July 4, 1776. The Declaration of Independence

Gaza is less than 6 percent of the occupied territories, and 94 percent of the Palestinian territories are under the boot of the Israeli Occupying Forces and the ethnocracy of Israel is aided and abetted by America's blind allegiance and tax dollars.

This civilian journalist wonders what's it going to take to wake up the international community to the facts on the ground that the corruption in the PA government and hot tempers from those under occupation are a powder keg that’s getting ready to blow up.

This civilian journalist wonders what it is going to take to wake the world up to the fact that most of our problems with radical Islamist fundamentalist militants lead us back to the conflict in Israel and Palestine and all Americans should be inflamed at the silence of the presidential candidates and corporate media on this topic!

All roads do indeed lead to Jerusalem and as a woman of hope [-but not in my USA elected officials-] I contend that the International Community [-if only they get their act together!] and insist in unity to the upholding of the gold standard of international law as the rule of law all we the people of the world honor and uphold; will we ever change the world as we now know it; into a world of sister and brotherhood.

The Universal Declaration of Human Rights, International Law [and the Sermon on the Mount!] are the way to lead our dysfunctional world to the reconciliation of all nations and states.

This civilian journalist hopes and prays that the misery inflicted upon our sisters and brothers in Israel and Palestine- the so called Holy Land- the cradle of civilization will indeed begat the birth pangs of a new Middle East; a new America, and a new world, and Common Sense tells us that "the world is [our] country, all mankind are [our] brethren, and to do good [should be our] religion."-Tom Paine

Blind allegiance to the Israeli government has allowed America's 'best friend' in the world to become a big bully and if we truly love our friend we will rise up and tell our friend they have crossed the line of common sense and the time is now to WAKE UP and reconcile with the 'enemy' for only then do we 'have it in our power to begin the world again."-Tom Paine

This civilian journalist reiterates and persists to contends in a slight paraphrase of Mahatma Gandhi, what difference does it make to the dead, the orphans, the refugees, the homeless, the voiceless the occupied and oppressed whether the mad violent destruction is wrought under the name of totalitarianism, Islam, Zionism, Christianity or the holy name of security and democracy?


2. Palestinian National initiative Report of September 6, 2005, pages 137-138, KEEP HOPE ALIVE, by Eileen Fleming



“disengagement,” and the facts on the ground and bottom line was that more illegal Jewish settlers, more apartheid walls, and more corruption in the PA ensued. peace process, which actually collapsed long ago under the weight of

Eileen Fleming, Reporter and Editor HOPE ALIVE and Memoirs of a Nice Irish American Girl's' Life in Occupied Territory, Producer "30 Minutes With Vanunu" and "13 Minutes with Vanunu" Author

As alliances shift, Iran wins. Again

As alliances shift, Iran wins. Again

By Pepe Escobar

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It's no secret that a great deal of the alleged success of the George W Bush adminstration's "surge" - or at least the way it's being spun in the US - is related to a diminished flow of Iranian-made weapons towards militias in Iraq. The weapons anyway were being sold by Iranian and or Gulf black market dealers - and not by the central establishment in Tehran.

At the same time, the publication of the 2007 National Intelligence Estimate (NIE) in the US virtually debunked the idea that Iran was conducting a secret nuclear program for military use.

These two overlapping developments have alarmed Israeli intelligence - which believes that Washington and Tehran have concluded a secret deal brokered by Saudi Arabia. That's what's
being spun, for instance, by the Debka website - which is basically an Israeli military intelligence outlet.

The Bush administration, according to this narrative, is developing a new multi-point strategy for the Middle East (it's useful to remember that no one even mentions Bush's spun-to-death "democratic" Greater Middle East anymore). And Saudi Arabia is the new strategic go-between.

Via the Saudis, the Bush administration will demand no more Iranian weapons in Iraq used against the US military (as if Tehran could order black market weapons' cartels how to conduct their business). It will demand no more Iranian weapons sent to Afghanistan (these weapons are not from Iran in the first place, but bought by the Taliban from Pakistani and Sunni Arab sources).

The Bush administration will also demand Iran to tell Hezbollah to allow the election of a new president in Lebanon; as a reward, Hezbollah will be allowed as a partner in government (a ludicrous proposition; as if Hassan Nasrallah, who has the numbers, the popular appeal and grassroots organization would be ordered to accept a Saudi-friendly and US-friendly puppet president).

Israel seems to be concerned of what it perceives as a Saudi Arabian "betrayal" - but in fact the Israeli right's problems lie elsewhere. The NIE denied any possibility of a Bush administration push towards regime change in Iran - not to mention an Israeli attack. To compound the problem, Tehran does not even bother with United Nations Security Council sanctions anymore, even if the leadership in Tehran does not expect the US's formidable firepower to vanish from the Persian Gulf.

Iran's Foreign Ministry has bluntly dismissed the Security Council's third round of sanctions against Iran as "based on political intentions and double standards" - especially because it ignored the February 22 report by International Atomic Energy Agency (IAEA) director general Mohammad ElBaradei, according to which the IAEA had found no diversion of Iran's nuclear program for military use. President Mahmud Ahmadinejad called the new resolution "a new mistake". He may have a point. The IAEA itself decided not to impose sanctions on Iran.

But for the Israeli troika - Prime Minister Ehud Olmert, Foreign Minister Tzipi Livni and Defense Minister Ehud Barak - that's never enough. They want more, and tougher, sanctions. As for Iran, it has demanded that the IAEA investigate "how Israel became a nuclear superpower".

Bush's love affair with civil war
According to a frightened Debka, Israel's "special relationship with the United States has collapsed amid its worst foreign policy debacle in decades. The Olmert government is paying the price for the military and diplomatic mismanagement of the war against Lebanon's Hezbollah of 2006".

This may go a long way to explain Israel's current bombing rampage which has killed more than 100 Gaza residents, more than 50% civilians and most of these women and children. Middle East diplomats confirmed to Asia Times Online Hamas was talking to the Saudis and the Syrians about the possibility of a truce with Israel. But Israel does not want anything that would legitimize Hamas - the Israeli troika is now even floating the idea of the reoccupation of Gaza.

The Israeli right clearly knows what Asia Times Online has revealed - that Bush approved a dirty Palestinian civil war, a lethal mix of the Bay of Pigs and Iran-Contra supposedly to be implemented by the State Deptartment to overthrow Hamas shortly after Hamas won the free and fair January 2006 parliamentary election in Palestine. (See
Document details 'US' plan to sink Hamas May 16, 2007 and No-goodniks and the Palestinian shootout January 9, 2007.)

According to this scenario, Mohammad Dahlan - Palestinian President Mahmoud Abbas' head of the National Security Council - awash with US weapons, was anointed leader of the "revolution", to the delight of the Israeli right.

It didn't work - of course; Hamas, as a popular resistance movement, would rather have all its supporters dead than surrender. The State Department has declined to comment, although Secretary of State Condoleezza Rice has just offered a spirited defense of US aid for Fatah, playing once again the same old scratchy tune: it is imperative to counteract Iran.

Ahmadinejad, the not-accidental tourist
Israel's concern also centers on a few key, recent developments such as Ahmadinejad's visit to Saudi Arabia a year ago, Iran-Egypt talks in Egypt (the countries had had no formal relations since the 1979 Iranian revolution) and the invitation for Ahmadinejad to sit at a key Gulf Cooperation Council meeting - a first for an Iranian leader. This year, at an Iran-Saudi parliamentary friendship meeting in Riyadh, Saudi Foreign Minister Saud al-Faisal stressed all sorts of efforts should be made to solidify Saudi-Iranian relations. And, more tellingly, both should "stand vigilantly against all conspiracies".

Abdel Monem Said, director of the al-Ahram Center for Political and Strategic Studies in Cairo, has interpreted the process in terms of "Saudi Arabia did what people have been asking the US to do for so long, which is to extend a hand out to the Iranians". The detente, of course, is a work in progress, but any Saudi realist will see that it certainly does not entail the end of Iran's nuclear program.

The Bush administration had been promoting a Turkey-Israel axis, then a Sunni Arab "axis of fear" (Saudi Arabia, Egypt, Jordan, Kuwait, the United Arab Emirates) and then a Saudi-Israeli axis, always trying to isolate Iran. None of these concoctions seems to have worked.

Hanif Ghaffari, writing in the Farsi-language, conservative Iranian daily Resalat, has pointed out how the recent, very successful Ahmadinejad trip to Iraq had to be considered in the context of "Iran after the Iraq war" and "Iraq after occupation by America". The message could not be more graphic. When Bush went to Iraq he saw an ultra-fortified military base, and that was it. Ahmadinejad went everywhere in broad daylight, welcomed like a brother. This is how Tehran sees itself - as the ultimate victor of the US war on Iraq. And no "surge" or spin - not to mention Israeli paranoia - can or will make it go away.

Pepe Escobar is the author of
Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007). He may be reached at

Who leaked the details of a CIA-Mossad plot against Iran?

Who leaked the details of a CIA-Mossad plot against Iran?

By Yossi Melman

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The Bush administration is prolonging the hunting season against journalists. The latest victim is James Risen, The New York Times reporter for national security and intelligence affairs. About three months ago, a federal grand jury issued a subpoena against him, ordering Risen to give evidence in court. A heavy blackout has been imposed on the affair, with the only hint being that it has to do with sensitive matters of "national security."

But conversations with several sources who are familiar with the affair indicate that Risen has been asked to testify as part of an investigation aimed at revealing who leaked apparently confidential information about the planning of secret Central Intelligence Agency and Mossad missions concerning Iran's nuclear program.

Risen included this information in his book, "State of War: The Secret History of the CIA and the Bush Administration," which was published in 2006. In the book, he discusses a number of ideas which he says were thought up jointly by CIA and Mossad operatives to sabotage Iran's nuclear capabilities.

One of these ideas was to build electromagnetic devices, smuggling them inside Iran to sabotage electricity lines leading to the country's central nuclear sites. According to the plan, the operation was supposed to cause a series of chain reactions which would damage extremely powerful short circuits in the electrical supply that would have led to failures of the super computers of Iran's nuclear sites.

According to the book, the Mossad planners proposed that they would be responsible for getting the electromagnetic facilities into Iran with the aid of their agents in Iran. However, a series of technical problems prevented the plan's execution.

Another of the book's important revelations, which made the administration's blood boil about James Risen, appeared in a chapter describing what was known as Operation Merlin, the code name for another CIA operation supposed to penetrate the heart of Iran's nuclear activity, collect information about it and eventually disrupt it.

Operation Merlin

The CIA counter proliferation department hired a Soviet nuclear engineer who had previously, in the 1990s, defected to the United States and revealed secrets from the Soviet Union's nuclear program. His speciality was in the field of what is called weaponization, the final stage of assembling a nuclear bomb.

The scientist was equipped with blueprints for assembling a nuclear bomb in which, without his knowledge, false drawings and information blueprints were planted about a nuclear warhead that was supposedly manufactured in the Soviet Union. The plan's details had been fabricated by CIA experts, and so while they appeared authentic, they had no engineering or technological value.

The intention was to fool the scientist and send him to make contact with the Iranians to whom he would offer his services and blueprints. The American plot was aimed at getting the Iranians to invest a great deal of effort in studying the plans and to attempt to assemble a faulty warhead. But when the time came, they would not have a nuclear bomb but rather a dud.

However, Operation Merlin, which was so creative and original, failed because of CIA bungled planning. The false information inserted into the blueprints were too obvious and too easily detected and the Russian engineer discovered them. As planned, he made contact with the Iranian delegation to the International Atomic Energy Agency in Vienna and handed over to them, also as planned, the blueprints.

But contrary to the CIA's intention, he added a letter to the blueprints in which he pointed out the mistakes. He did not do this with ill intent or out of a desire to disrupt the operation and harm his operators. On the contrary, he did so out of a deep sense of mission and in order to satisfy his American operators. He hoped that in this way he would simply increase the Iranians' trust in him and encourage them to make contact with him for the good, of course, of his American operators.

The result was disastrous. Not only did the CIA fail to prevent the Iranians in their efforts to enhance their nuclear program, this operation may also have made it possible for them to get their hands on a plan for assembling a nuclear warhead.

Freedom of the press

In Israel, military censorship would have prevented the publication of details such as these. But in the U.S., where the principle of freedom of the press is sacred and anchored in the constitution, there is no compulsory and binding censorship. There is, however, an expectation there that the press will show responsibility. This expectation has increased in recent years, particularly with the conservative Bush administration and in the wake of the events of September 11, 2001 and the wars in Afghanistan and Iraq.

Risen is not the first journalist to have been subpoenaed to give evidence before a grand jury and reveal his sources. According to the Reporters Committee for Freedom of the Press, some 65 journalists have been summoned for such investigations since 2001. Some agreed, cooperated and testified. Most refused, so that they would not have to reveal their sources. In this way, they exposed themselves to being charged with contempt of court.

There were some who even preferred to be jailed so long as they were not forced to reveal their source. The best-known case was that of Judith Miller, another New York Times writer. The background to her 85-day imprisonment was her refusal to reveal who had leaked the name of Valerie Plame, a CIA agent, to the media. (The man responsible for the leak was Lewis "Scooter" Libby, a senior aide to Vice President Dick Cheney. Libby was sentenced to 30 months imprisonment but was pardoned by President Bush.)

"It is true that there is tension between the Bush administration and the media," says Steve Aftergood, director of the Project on Government Secrecy on behalf of the Federation of American Scientists, an independent body which aims at analyzing the activities of government with a critical eye, "but I would not go so far as to say that the administration is waging war against the media."

In Aftergood's assessment, the danger to the freedom of the press comes rather from private citizens and organizations, those who feel themselves harmed by journalistic publications and commentators and who would therefore like to limit the press' freedom. The most conspicuous of these is Gabriel Schoenfeld, a senior editor at Commentary, who believes that liberal newspapers like The New York Times are not sufficiently patriotic. In his articles and in testimony before a Senate committee that discussed the issue, Schoenfeld claimed that

The New York Times reporters had revealed confidential material that weakened America's struggle against Al-Qaida. He calls for relinquishing the soft approach which he says the administration has taken against journalists in whose publications, in his opinion, America's security is harmed.

There are many others who take the opposite approach and believe that the right of journalists to keep their sources secret should be anchored in law. Two Congressmen, the Republican Mike Pence, and Rick Boucher, a Democrat, have proposed legislation to this effect - a law for the free flow of information. The House of Representatives has already approved their proposal but the legislation is being held up in the Senate, to the displeasure of the American Civil Liberties Union.

On the face of it, this is a sensitive issue that is intended to draw the lines between the freedom of information, freedom of the media, and the public's right to know, against the right of a democracy to defend itself against enemies that are not democratic. But James Risen has no doubt that the correct and just moral act on his part has to be to defend his sources, even if this means he will lose his freedom.

The next test case in the U.S. concerning the freedom of the press could be of even greater interest to Israel. It is connected to next month's trial of two former senior American Israel Public Affairs Committee (AIPAC) employees, Steve Rosen and Keith Weissman, who have been charged with crimes based on an old First World War anti-espionage law, which has hardly ever been put into practice since.

The indictment states that they obtained confidential information from officials at the Pentagon and transferred it, inter alia, to Israeli diplomats and journalists. A number of American journalists have already been investigated by the CIA in connection to this, and it is possible that they will be called to give evidence incriminating the two senior AIPAC officials.

NEXT: Money Panic?

NEXT: Money Panic?

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I'm deeply disturbed and concerned over the growing risk of a major market plummet another 1,000 to 3,000 points off the Dow Jones, and a South American type of currency crisis hitting the U.S. Dollar which would trigger a wave of Financial and Bank Bankruptcies.

Like many market analysts I've been hoping to see the Federal Reserves recent and prospect of new interest rate cuts that are coming -- ease the credit crisis and help U.S. equities recover their footing.

The problem comes down to the inability of Federal Reserve to stop housing prices from collapsing. The situation is so bad that the Federal Reserve just admitted that home equity has dipped below 50%. The first time in recorded history...

Homeowner Equity Is Lowest Since 1945
Thursday March 6, 12:50 pm ET

There's such chaos in the market place that companies like CitiGroup (C-NYSE) and American International Group, Inc. (AIG —NYSE) are being mentioned as out right bankruptcy candidates. Warnings that we're only half way through the needed write downs on sub-prime debt are now coming from several major players on Wall Street aren't easing my concerns.

Gold and platinum are down off their highs; oil seems to be holding close to an all time high of $105 even as the dollar tests new lows.

I'm bullish on both precious metals and energy in the long-term but wary of both a panic sell off (why I've recommend covered calls in recent days) and the very real chance of a dollar panic that triggers a mega gap up i.e. $2,500 gold and $150 oil over night. The danger of the debt crisis catapulting into a dollar panic cannot be ignored.

A few minutes ago I took a call from an associate who attended a "Debt Consolidation" convention in New Orleans. He confirmed what I've been hearing for several days...mortgages that are more than 12 weeks behind their payment schedules are now selling for 10 cents on the dollar.

Look when banks and financial institutions are selling distressed debt at 10 cents on the dollar you know — it's a serious crisis. If you're not holding precious metals and a dollar panic hits — don't come crying to me when Bread is $14 a loaf, gas is $18 a gallon and your credit cards are suspended. What I'm saying is two months ago the chances of this happening is increasing. Two months ago I would have put the risk at 10% - now I put the chances at a solid 20%. I hope I'm wrong. Even a 20% risk of this nightmare is more than I thought I would ever see in my lifetime.

Best Wishes,

James DiGeorgia

The Peak Oil Crisis: Polity on Trial

The Peak Oil Crisis: Polity on Trial

By Tom Whipple

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The coming storm will bring one of the most severe tests of the cohesiveness of governments and peoples that the world has known for a long time.

Over the last century, the industrial societies have built extremely complex and specialized civilizations. A simple example is that here in America only two percent of us now live on farms where they presumably are capable of readily producing their own food. Only 0.3 percent of Americans now claim to be farmers. The remaining 99+ percent of us are dependent on oil-based food processing, storage, and transport for our daily sustenance.

The fate of most of the world's peoples is going to depend on how well we, as societies - here and around the world,- get our collective acts together over the coming decades and organize to survive the transition to a post-oil world.

Currently the body politic in America is paralyzed by a rough political balance between those clinging to 20th or perhaps even 19th century concerns and those who, however vaguely, understand that things must change. So far the U.S. Congress has done little to prepare for the massive changes to our economy and lifestyles that are now only a few short years away.

Some government money has been spent researching for improved sources of renewable energy, but the centerpiece of recent energy bills - ethanol and higher mpg cars - are either absurd or too little too late. The current effort to reduce a billion or two in tax breaks during a era of $100 billion oil company profits likely will founder at the hands of lobbyists or a Presidential veto. Very few among the members of Congress and those that send them there as yet have a clue as to what is about to befall us - but this too will change.

Candidates in the current race for President are circumspect on real energy issues for obvious reasons - no one ever got elected by being a bearer of bad news. In Iowa the candidates praised ethanol with nary a nod towards what it is doing to food prices. In Ohio, they have bashed NAFTA to the point where Canada's trade minister started hinting about what could happen to the 2.5 million barrels of oil they are obliged to send us each day. No one, as yet, seems to be talking of the only possible short term solution: massive conservation.

Up on Capitol Hill, rapidly increasing gasoline prices are starting to register with a few members of Congress, but the situation is so poorly understood that the proposals are meaningless. One poor misguided fellow wants to stop the miniscule additions to the nation's Strategic Petroleum Reserves. Others want to release heating oil from the reserve stockpiles. Many still believe that lifting drilling restrictions, lowering gas taxes, or giving bigger tax breaks will have some appreciable affect on the current situation.

It is still eight months before the November elections. Already the voters are telling the pollsters that the economy and particularly high gas prices are their top concern. Iraq, al Qaeda, abortion, immigrants and healthcare may still be out there as issues, but if you don't have a job or can no longer afford the lifestyle you are accustomed to on the job that you have, there is going to be a political upheaval.

Will it happen this fall? Tough to say. Even though bad economic news is coming in deluges these days, the fundamental oil supply situation still seems to have a couple of years to go before obvious, irreversible declines set in. The unraveling of the financial system seems of more immediate concern.

What is a virtual certainty, however, is that the next U.S. President and governments at all levels and in all countries are going to face problems last seen during the 1930's or perhaps worse. No matter how much of an anathema it may be to many, it seems clear that government intervention, regulation and controls are going to have to grow. In an era when 99 percent of us have not the slightest idea how to grow food, nor have any place to do so, it will take organization and cooperation similar to what went on during World War II to avoid a societal calamity.

Some November within the next few years, the economic/oil situation will have become so bad that a real debate over real solutions will begin. Demagoguery - "cut taxes," "subsidize the oil companies," "invade somebody," will be recognized for what it is and will no longer help get people into office.

Some may fear for the country for at times of great crisis political institutions are endangered. While in America we voted for FDR and his New Deal to grapple with the great depression, in Germany they had Hitler, in Italy Mussolini, in Russia Stalin, and Japan wound up with the Greater East Asia Co-Prosperity Sphere. Getting through the trauma of oil depletion is going be a real test of political institutions.

Parliamentary democracies come with mechanisms to make sharp turns as soon as pressures reach a breaking point. A vote of "no confidence" dumps the Prime Minister and a few weeks later the voters work their wills. In the American form of government, policies are hard-wired to two and four year election cycles. The next American President may come into office with a mandate for change and with a Congress that will follow his leadership. The Congress, however, may be overwhelmingly of a different party or gridlocked with narrow majorities, in which case it may take another two or four years for the situation to right itself.

We are entering the most interesting time of our lives.

Troop Depression on Rise in Afghanistan

Troop Depression on Rise in Afghanistan

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Washington - U.S. troop morale improved in Iraq last year, but soldiers fighting in Afghanistan suffered more depression as violence there worsened, an Army mental health report says.

And in a recurring theme for a force strained by its seventh year at war, the annual battlefield study found once again that soldiers on their third and fourth tours of duty had sharply greater rates of mental health problems than those on their first or second deployments, according to several officials familiar with the report.

All spoke on condition of anonymity to describe the findings ahead of the study's release Thursday.

The report was drawn from the work of a team of mental health experts who traveled to the wars last fall and surveyed more than 2,200 soldiers in Iraq and nearly 900 in Afghanistan. In the fifth such effort, the team also gathered information from more than 400 medical professionals, chaplains, psychiatrists, psychologists and other mental health workers serving with the troops.

Officials said they found rates of mental health problems such as anxiety, depression and post-combat stress were similar to those found the previous year in Iraq, when nearly 30 percent of troops on repeat tours said they suffered a problem.

It was unclear how the new data might relate to a recent report showing that as many as 121 Army soldiers committed suicide in 2007, an increase of about 20 percent over the year before. The preliminary figures released in January said that there were 89 confirmed suicides last year and 32 deaths that were suspected suicides and still under investigation.

"Although we have had many successes, there are also areas of concern," Lt. Gen. Eric B. Schoomaker, the Army surgeon general, said in testimony prepared for a congressional committee hearing.

Soldiers in Afghanistan had rates of mental health problems similar to those in Iraq in 2007 with the exception of depression, officials said the new study showed. The percentage reporting depression in Afghanistan was higher than that in Iraq, and mental health problems in general were higher than they had previously been in Afghanistan. They gave no statistics, but a 2004 study conducted in the states with troops before and after they deployed to Afghanistan found that roughly one in 10 developed a mental health problem requiring treatment.

Though U.S. troops suffered their highest level of casualties in both campaigns last year, that came as violence was decreasing in the five-year-old Iraq conflict and increasing in Afghanistan, now in its seventh year.

Troops' mental health problems are linked directly to the amount of exposure they have to combat, and officials said that last year the level of violence was more pronounced in some places of Afghanistan than it was in Iraq. Some 83 percent of soldiers in Afghanistan reported being exposed to mortar fire and similar action as fighting heated up against Taliban and al-Qaida fighters, compared with 72 percent in Iraq, according to the study.

Having troops spread out and more isolated over the rugged terrain in a less developed Afghanistan made it necessary at times to bring soldiers in by helicopter when they needed mental health care, one official said. After the survey was taken, mental health professionals were dispersed more to put them nearer to the forces they serve, he said.

Officials said other findings included:

  • Soldiers who underwent special "Battlemind" training reported fewer problems than those who did not. The program teaches troops and families what to expect before soldiers leave for the wars and what common problems to look for when readjusting to home life after deployment.
  • Progress was made toward reducing the fear and embarrassment that keeps soldiers from asking for help with mental health problems. In 2007, 29 percent of those surveyed in Iraq said they feared seeking treatment would hurt their careers, down from 34 percent the previous year.
  • Eleven percent of those polled in Iraq said their unit's morale was high or very high, compared with 7 percent the previous year. Individual morale was reported high or very high among 20 percent, compared with 18 percent the previous year.

Sending mental health advisory teams to do extensive surveys and focus groups in the combat theater of operations was a groundbreaking effort when started in 2003, the year the U.S. invaded Iraq. The goal is to assess how troops are doing at the warfront and how well behavioral health services provided by the military are working for the force.

Extensive reports have been produced after each survey and they have led directly to changes in the way services are delivered in the combat theater.

Among changes considered this year is whether more mental health workers might be needed at the war front. Since all troops there over the past year have been serving extended 15-month tours instead of 12 - and a larger number were there for repeat tours - officials questioned whether the ratio of mental health workers-to-troops that was appropriate in 2003 and 2004 is appropriate now, Col. Elspeth Ritchie, psychiatry consultant to Schoomaker, told a recent news conference.

The number deployed to Iraq has been pretty much consistent throughout the war - averaging about 200 psychiatrists, psychologists, social workers, psychiatric nurses and technicians, Ritchie said.

West Bank Barriers Keep Rising Despite Promises of Relief

West Bank Barriers Keep Rising Despite Promises of Relief

By Griff Witte

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Commute becomes "daily humiliation."

Azun, West Bank - Karim Edwan's skepticism about the U.S.-backed Middle East peace process is rooted in his morning commute.

To travel from his home in this West Bank village to his job as an emergency room doctor, the 35-year-old must take at least two cabs, skirt a barbed-wire fence, climb a dirt mound, talk his way through multiple Israeli checkpoints and remove his shoes for a full-body security check.

Before the obstacles were imposed, the trip to his hospital in the West Bank city of Nablus took 30 minutes. Now it takes two hours.

"It's my daily humiliation," he said.

It's also part of the explanation for why there is little enthusiasm in the West Bank for negotiations with Israel, and why Palestinian Authority President Mahmoud Abbas is in a bind over how to proceed.

The hope of Abbas and other participants in the Annapolis peace talks last November was that the Israeli-occupied West Bank would become a model for what negotiations could bring.

They envisioned the residents of Gaza suffering under the radical Islamic group Hamas, which opposes Israel's right to exist and is not participating in the talks. Meanwhile, the West Bank, where Abbas holds sway, would be rewarded with a reduction of the internal barriers that Israel has imposed in the name of security. Checkpoints, barbed wire, roadblocks and trenches slice through the territory, cutting areas off from one another and causing economic hardship.

But in the more than three months since the Annapolis talks, more barriers have gone up than have come down.

"There has been no significant improvement in movement or access. And in fact, there's been an increase in the number of physical obstacles since Annapolis," said Allegra Pacheco, head of information and advocacy for the U.N. Office for the Coordination of Humanitarian Affairs in Jerusalem.

The organization's latest count of barriers in the West Bank is 580, up from 563 recorded in November and about 50 percent higher than it was 2 1/2 years ago.

To senior Palestinian negotiator Saeb Erekat, the barriers represent a breach of trust. He said he has been assured repeatedly by Israel that a significant number of the blockades would come down.

"It's ridiculous to talk about anything involving economic development when this system of suffocation continues," he said.

But Israel contends that the Palestinian Authority has not upheld its end of the bargain by improving its security services.

"The Palestinian Authority could help us move on this issue," said Mark Regev, spokesman for Israeli Prime Minister Ehud Olmert.

"The goal is to have a situation where a Palestinian can go from one part of the Palestinian Authority to another part of the Palestinian Authority without a roadblock," and reaching that goal is important for the peace process, he said.

But for now, the Israeli military says the barriers remain necessary. They are "designed to minimize inconvenience to the Palestinian population while preserving the safety and lives of Israelis," said Capt. Noa Meir, a military spokeswoman.

In Azun, for instance, the military said it installed new barriers after a recent surge of incidents in which Palestinians hurled rocks and molotov cocktails at cars traveling to and from a nearby Israeli settlement.

To Azun's residents, however, that's just an excuse for a policy of harassment designed to protect the settlers' interests and drive the Palestinians away.

This village of 10,000 is ringed by olive trees and is home to a couple of dozen small shops. For the past month, residents have had to contend with coils of barbed wire and a freshly deposited dirt mound in the center of what was once a busy street. Both obstacles are designed to keep cars and people from easily accessing a primary road along the edge of town that is used by the settlers.

"This crossing was the life of the town," said Khalid Hammed, 40, a laborer who spoke from behind the coils of wire. "Now our life has stopped."

The road closures are not the only problem. The army has frequently imposed curfews in recent weeks, residents say, effectively shutting down not just individual roads but the entire town. The curfews often extend throughout the day, making it impossible for the people of Azun to get to their jobs or buy food at the market.

If a curfew is imposed while Edwan is at work, the doctor has to return stealthily - creeping from house to house until he reaches his home, all the while on the lookout for patrolling Israeli troops.

"It's like a big jail," Edwan said. "Nothing is in our hands."

One day this week, all of the shops were locked tight at noon. The streets of Azun were empty of vehicle traffic, and children who occasionally peaked out from side streets ran for cover at the sound of a vehicle approaching down the desolate main road.

Three soldiers in an armored jeep were stationed in the center of town, stopping anyone in sight and asking for identification.

Residents were instructed to go home immediately. Outsiders were ordered to leave.

"The village," one of the soldiers said, "is closed."

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UK Rights Groups: Gaza in Severe Crisis
By Aron Heller
The Associated Press

Wednesday 05 March 2008

Jerusalem - A human rights coalition charged Thursday that the humanitarian situation in the Gaza Strip has reached its worst point since Israel captured the territory in 1967.

In a scathing report, eight British-based rights organizations said that more than 1.1 million people, about 80 percent of Gaza's residents, are now dependent on food aid, as opposed to 63 percent in 2006. It said that overall unemployment is close to 40 percent.

It also said that hospitals are suffering from power cuts of up to 12 hours a day, and the water and sewage systems were close to collapse.

The report follows strident international condemnation of Israel after it struck hard against Palestinian militants in Gaza, killing more than 120 in the past week, including many civilians, after Palestinians militants escalated their daily rocket fire at Israel.

The Palestinian rockets have killed 13 people, wounded dozens more, traumatized thousands and caused millions of dollars in damage.

Israel's Defense Ministry rejected the report, blaming the militant Hamas rulers of Gaza for the hardships.

"The main responsibility for events in Gaza - since the withdrawal of Israel from the territory and the uprooting of the settlements there - is the Hamas organization, to which all complaints should be addressed," read a statement by spokesman, Maj. Peter Lerner.

Amnesty International UK Director Kate Allen said Israel must protect its citizens, "but as the occupying power in Gaza it also has a legal duty to ensure that Gazans have access to food, clean water, electricity and medical care."

Israel removed all 21 settlements and withdrew its forces from Gaza in 2005. Israel maintains that ended its occupation, but rights groups say that since Israel still controls Gaza's land, sea and air access, it is still the occupier.

After Hamas militants seized control of Gaza in June, Israel closed its crossings, allowing only shipments of vital goods into Gaza.

The 16-page report - sponsored by Amnesty, along with CARE International UK, CAFOD, Christian Aid, Medecins du Monde UK, Oxfam, Save the Children UK and Trocaire - calls on the British government to exert greater pressure on Israel and to reverse its policy on not negotiating with Gaza's Hamas rulers.

Israel and the West shun Hamas and label it a terrorist organization. Hamas does not accept the presence of a Jewish state.

Replying to the report, Israel's Defense Ministry said it was misdirected.

The Israeli Defense Ministry also said medicines and medical equipment are shipped into Gaza with no limitation. On Wednesday, a typical day, the military said it allowed 69 truckloads of supplies into Gaza, including basic food and baby formula.

This week NGO Monitor, a Jerusalem-based watchdog, called on human rights groups to end what it called their political use of international law. It cited an Amnesty International press release that it said made unsubstantiated accusations that Israeli responses "are being carried out with reckless disregard for civilian life".


On the Net:

Top Iraq Contractor Skirts US Taxes Offshore

Top Iraq Contractor Skirts US Taxes Offshore

By Farah Stockman

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Shell companies in Cayman Islands allow KBR to avoid Medicare, Social Security deductions.

Cayman Islands - Kellogg Brown & Root, the nation's top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.

More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands.

The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.

But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. And the creation of shell companies in places such as the Cayman Islands to avoid taxes has long been attacked by members of Congress.

A Globe survey found that the practice is unusual enough that only one other ma jor contractor in Iraq said it does something similar.

"Failing to contribute to Social Security and Medicare thousands of times over isn't shielding the taxpayers they claim to protect, it's costing our citizens in the name of short-term corporate greed," said Senator John F. Kerry, a Massachusetts Democrat on the Senate Finance Committee who has introduced legislation to close loopholes for companies registering overseas.

With an estimated $16 billion in contracts, KBR is by far the largest contractor in Iraq, with eight times the work of its nearest competitor.

The no-bid contract it received in 2002 to rebuild Iraq's oil infrastructure and a multibillion-dollar contract to provide support services to troops have long drawn scrutiny because Vice President Dick Cheney was Halliburton's chief executive from 1995 until he joined the Republican ticket with President Bush in 2000.

The largest of the Cayman Islands shell companies - called Service Employers International Inc., which is now listed as having more than 20,000 workers in Iraq, according to KBR - was created two years before Cheney became Halliburton's chief executive. But a second Cayman Islands company called Overseas Administrative Services, which now is listed as the employer of 1,020 mostly managerial workers in Iraq, was established two months after Cheney's appointment.

Cheney's office at the White House referred questions to his personal lawyer, who did not return phone calls.

Heather Browne, a spokeswoman for KBR, acknowledged via e-mail that the two Cayman Islands companies were set up "in order to allow us to reduce certain tax obligations of the company and its employees."

Social Security and Medicare taxes amount to 15.3 percent of each employees' salary, split evenly between the worker and the employer. While KBR's use of the shell companies saves workers their half of the taxes, it deprives them of future retirement benefits.

In addition, the practice enables KBR to avoid paying unemployment taxes in Texas, where the company is registered, amounting to between $20 and $559 per American employee per year, depending on the company's rate of turnover.

As a result, workers hired through the Cayman Island companies cannot receive unemployment assistance should they lose their jobs.

In interviews with more than a dozen KBR workers registered through the Cayman Islands companies, most said they did not realize that they had been employed by a foreign firm until they arrived in Iraq and were told by their foremen, or until they returned home and applied for unemployment benefits.

"They never explained it to us," said Arthur Faust, 57, who got a job loading convoys in Iraq in 2004 after putting his resume on and going to orientation with KBR officials in Houston.

But there is one circumstance in which KBR does claim the workers as its own: when it comes to receiving the legal immunity extended to employers working in Iraq.

In one previously unreported case, a group of Service Employers International workers accused KBR of knowingly exposing them to cancer-causing chemicals at an Iraqi water treatment plant. Under the Defense Base Act of 1941, a federal workers compensation law, employers working with the military have immunity in most cases from such employee lawsuits.

So when KBR lawyers argued that the workers were KBR employees, lawyers for the men objected; the case remains in arbitration.

"When it benefits them, KBR takes the position that these men really are employees," said Michael Doyle, the lawyer for nine American men who were allegedly exposed to the dangerous chemicals. "You don't get to take both positions."

Founded by two brothers in Texas in 1919, the construction firm of Brown & Root quickly became associated with some of the largest public-works projects of the early 20th century, from oil platforms to warships to dams that provided electricity to rural areas.

Its political clout, particularly with fellow Texan Lyndon Johnson, was legendary, and it became a major overseas contractor, building roads and ports during the Vietnam war.

Halliburton, a Houston-based oil conglomerate, acquired Brown & Root in 1962. And after the Vietnam cease-fire agreement in 1973, it all but stopped doing overseas military work for two decades.

But in 1991, during the Gulf War, Halliburton decided to try to revive its military business. The next year, Brown & Root won a $3.9 million contract from the Defense Department under Secretary Dick Cheney to develop contingency plans to support, feed, house, and maintain the US military in 13 hot spots around the world.

That small contract soon grew into a massive logistical-support contract under which the company did everything from building military camps to cooking meals and providing transportation for troops. Under the contract, the military agreed to reimburse Brown & Root for all expenses, and to pay a profit of between 1 and 9 percent, depending on performance.

In Somalia, starting in December 1992, Brown & Root employees helped US soldiers and UN workers dig wells and collect garbage, among many other tasks. The company quickly became the largest civilian employer in the country, with about 2,500 people on its payroll. Its headquarters in Texas had a "war room," where executives would get daily updates about events in Mogadishu.

Later the company would play similar roles supporting US troops in Haiti, Rwanda, Bosnia, Uzbekistan, and Afghanistan.

As its military work increased, Brown & Root sent more American workers overseas. Americans working and living abroad receive significant breaks on their income tax, but still must pay Social Security and Medicare taxes if they work for an American company. The reasoning is that such workers are likely to return to the United States and collect benefits, so they and their employers ought to help pay for them.

But the taxes drive up costs. A former Halliburton executive who was in a senior position at the company in the early 1990s said construction companies that avoid taxes by setting up foreign subsidiaries have obvious advantages in bidding for military contracts.

Payroll taxes can be a significant cost, he said, speaking on the condition of anonymity. "If you are bidding against [rival construction firms] Fluor and Bechtel, it might give you a competitive advantage."

Service Employers International was set up in 1993, as Brown & Root was ramping up its roster of overseas workers. Two years later, the company set up Overseas Administrative Services, which serves more senior workers and provides a pension plan.

The parent company became Kellogg Brown & Root in 1998, when it joined with the oil-pipe manufacturer, M. W. Kellogg.

Around that time, KBR lost its exclusive contract to provide logistical support to the US military. But in 2001 it outbid DynCorp to win it back, by agreeing to a maximum profit of 3 percent of costs.

Then, in 2002, the firm received a secret contract to draw up plans to restore Iraq's oil production after the US-led invasion of Iraq. The Defense Department has said the firm was chosen mainly for its assets and expertise, not its ability to control costs.

Nonetheless, KBR's top competitors in Iraq do not appear to have gone to the same lengths to avoid taxes. Other top Iraq war contractors - including Bechtel, Parsons, Washington Group International, L-3 Communications, Perini, and Fluor - told the Globe that they pay Social Security and Medicare taxes for their American workers.

"It has been Fluor Corporation's policy to compensate our employees who are US citizens the same as if they worked in the geographic United States," said Keith Stephens, Fluor's director of global media relations. "With the exception of hardship and danger pay additives for work performed in Iraq, they receive the same benefits as their US-based colleagues, and Fluor pays or remits all required US taxes and payroll burdens, including FICA payments and unemployment insurance."

Only one other top contractor, the construction and logistics firm IAP Worldwide Services Inc., said it employs a "limited number" of Americans through an offshore subsidiary.

Officials at DynCorp, the company that KBR outbid for the logistics contract, did not return numerous calls.

KBR is now widely believed to be the largest private employer of foreigners in Iraq, and it hires twice as many workers through its Cayman Island subsidiaries as it does by direct hires. Service Employers International alone employs more than 20,000 truck drivers, electricians, accountants, and engineers, roughly half of whom are American, according to Browne, the KBR spokeswoman.

KBR declined to release salary information. But workers interviewed by the Globe who served in a range of jobs said they earned between $48,000 and $85,000 per year. If KBR's American workers averaged even as much as $63,000 per year, they and KBR would have owed more than $100 million per year in Social Security and Medicare taxes, split evenly between them. Over the course of the five-year war, their tax bill would have been more than $500 million.

In 2004, auditors with the Pentagon's Defense Contract Audit Agency questioned KBR about the two Cayman Island companies but ultimately made no complaint. The auditors told the Globe in an email exchange facilitated by Pentagon spokesman Lieutenant Colonel Brian Maka that any tax savings resulting from the offshore subsidiaries "are passed on" to the US military.

Browne, the KBR spokeswoman, said the loss to Social Security could eventually be offset by the fact that the workers will receive less money when they retire, since benefits are generally based on how much workers and their companies have paid into the system.

Medicare, however, does not reduce benefits for workers who don't contribute, and Browne acknowledged that KBR has not calculated the impact of its tax practices on the government as a whole.

She said KBR does not save money from the practice, since its contracts allow for its labor expenses to be reimbursed by the US military. But the practice gives KBR a competitive advantage over other contractors who pay their share of employment taxes.

And critics of tax loopholes note that the use of offshore shell companies to avoid payroll taxes places a greater burden on other taxpayers.

"The argument that by not paying taxes they are saving the government money is just absurd," said Robert McIntyre, director of Citizens for Tax Justice, a Washington advocacy group.

To the people listed as its workers, Service Employers International Inc. - known to them as SEII - remains something of a mystery.

"Does anybody know what or where in the Grand Cayman Islands SEII is located?" a recently returned worker wrote in a complaint about the company on, an employment website. He speculated that the office in the Cayman Islands must be "the size of a jail cell . . . with only a desk and chair."

In fact, the address on file at the Registry of Companies in the Cayman Islands leads to a nondescript building in the Grand Cayman business district that houses Trident Trust, one of the Caymans' largest offshore registered agents. Trident Trust collects $1,000 a year to forward mail and serve as KBR's representative on the island.

The real managers of Service Employers International work out of KBR's office in Dubai. KBR and Halliburton, which also moved to Dubai, severed ties last year.

Both KBR and the US military appear to regard Service Employers International and KBR interchangeably, except for tax purposes. According to the Defense Contract Auditing Agency, KBR bills the Service Employers workers as "direct labor costs," and charges almost the same amount for them as for direct hires.

The contract that workers sign in Houston before traveling to Iraq commits workers to abide by KBR's code of ethics and dispute-resolution mechanisms but states that the agreement is with Service Employers International.

Some workers said they were told that Service Employers International was just KBR's payroll company. Others mistook the name as a reference to the well-known, large union, Service Employees International.

Henry Bunting, a Houston man who served as a procurement officer for a KBR project in Iraq in 2003, said he first found out that he was working for a foreign subsidiary when he looked closely at his paycheck.

"Their whole mindset was deceit," Bunting said. He said that he wrote to KBR several times asking for a W-2 form so he could file his taxes, but that KBR never responded.

David Boiles, a truck driver in Iraq from 2004 to 2006, said that he realized he was working for Service Employers International when he arrived in Iraq and his foreman told him he was not a KBR employee, despite the fact that his military-issued identification card said "KBR."

"At first, I didn't believe him," Boiles said.

Danny Langford, a Texas pipe-fitter who was sent to work in a water treatment plant in southern Iraq in July 2003, said he, too, initially believed that he was an employee of KBR.

But when he allegedly got ill from chemicals at the plant and was terminated that fall, he said, his application for unemployment compensation was rejected because he worked for a foreign company.

"Now, I don't know who I was working for," he said in a telephone interview.

For decades Congress has sought to crack down on corporations that use offshore subsidiaries to lower their taxes, but most of the debates have focused on schemes that reduce corporate income taxes, not payroll taxes. Last year a Senate subcommittee estimated that US corporations avoid paying $30 and $60 billion annually in income taxes by using offshore tax havens.

Senators Carl Levin, a Michigan Democrat; Barack Obama, an Illinois Democrat; and Norm Coleman, a Minnesota Republican, are trying to pass the Stop Tax Haven Abuse Act, which would give the US Treasury Department the authority to take special measures against foreign jurisdictions that impede US tax enforcement.

American companies that evade payroll taxes face fines or other criminal penalties. The use of foreign subsidiaries to avoid payroll taxes, while allowed by the Defense Department, may still be subject to challenge by the Internal Revenue Service, according to Eric Toder, a former director of the office of research for the IRS.

Toder said the IRS could try to take action against a firm if the sole purpose of setting up an offshore subsidiary was to reduce tax liability. The practice could become a more costly problem in the future, Toder said, as an increasing number of American companies register subsidiaries overseas and bring American employees to work abroad.

"It obviously looks unseemly where you have a situation where, if you did it in a straightforward way, they would pay payroll taxes," Toder said. "If this becomes the norm, and other companies do that as well, it could further erode the tax base."

Peter Singer, a specialist in the outsourcing of military functions at the liberal-leaning Brookings Institution, said the practice will probably attract more scrutiny in the future, as the military expands its outsourcing and as workplaces become increasingly global.

"It is fascinating and troubling at the same time," Singer said. "If you are an executive in a company, you are thinking: 'Wow. Cash savings and a potential loophole from certain domestic laws, lawsuits, and taxes. It's win-win.' But if you are a US taxpayer, it is not a positive synergy."