Monday, March 31, 2008

Alphonso Gets Evicted

Alphonso Gets Evicted

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This morning, Housing and Urban Development Secretary Alphonso Jackson announced he is stepping down effective April 18. While the White House has so far refused to give a reason for his departure, Jackson faces ongoing probes "by a federal grand jury, the Justice Department, the FBI and the HUD inspector general." Earlier this month, Sens. Patty Murray (D-WA) and Christopher Dodd (D-CT) sent a letter to President Bush "urging him to request Mr. Jackson’s resignation, arguing that accusations of wrongdoing had made him ineffective." Their calls joined similar onesparade of these loyalists -- including Karl Rove, Harriet Miers, and Dan Bartlett -- left the White House last year. Like so many of Bush’s Texas friends, Jackson’s legacy will be one of incompetence, corruption, and political cronyism. While he was busy awarding lucrative no-bid contracts to his golfing buddies and erecting giant photo homages to himself, the nation was spiraling into the worst housing crisis since the Great Depression.

A PHILADELPHIA STORY: One of the most recent scandals to come to light focuses on Jackson’s willingness to retaliate against employees unwilling to participate in his cronyism. In 2006, Jackson allegedly demanded that the Philadelphia Housing Authority (PHA) "transfer a $2 million public property" at a "substantial discount" to Kenny Gamble, a developer, former soul-music songwriter, and friend of Jackson’s. When PHA director Carl Greene refused, Jackson and his aides called Philadelphia’s mayor and "followed up with ’menacing’ threats about the property and other housing programs in at least a dozen letters and phone calls over an 11-month period." For example, Orlando Cabrera, then-assistant secretary at HUD, suggested in an e-mail that the agency "make his [Green’s] life less happy." Kim Kendrick, an assistant secretary who oversaw accessible housing, proposed that they "[t]ake away all of his Federal dollars." According to Green, Jackson’s politically motivated plan to remove federal funds from Philadelphia "could raise rents for most of its 84,000 low-income tenants and force the layoffs of 250 people." "This kind of stuff undermines public confidence in our officials," Sen. Bob Casey (D-PA) said to Jackson during a recent congressional hearing.

LOYAL BUSHIES ONLY: In May 2007, Jackson testified to Congress, "I don’t touch contracts." In retrospect, that statement appears to have been at best a gross inaccuracy, and at worst, an outright lie. In 2006, Jackson told a group of business leaders in Texas that he refuses to award contracts to people who disagree with the President. During this controversial speech on April 28, 2006, Jackson recounted a conversation he had with a prospective contractor who had a "heck of a proposal." This contractor, however, told Jackson, "I don’t like President Bush." Jackson said that he thought to himself, "Brother, you have a disconnect -- the president is elected, I was selected." Jackson subsequently refused to award the man the contract, despite the merits of the proposal. A former HUD assistant secretary also confirmed that Jackson told agency employees to "consider presidential supporters when you are considering the selected candidates for discretionary contracts." He also said that he "did not want contracts" awarded to certain "political groups," which included "Democrats." Jackson’s actions appeared to violate the Federal Aquisition Reguations (48 CFR 3.101-1), which states, "Government business shall be conducted in a manner above reproach and...with complete impartiality and with preferential treatment for none."

CRONYISM OVER COMPETENCE: In Oct. 2007, federal investigators looked into whether, after Hurricane Katrina, Jackson lined up an emergency "no-bid contract" at the HUD-controlled Housing Authority of New Orleans for "golfing buddy" and friend William Hairston. According to HUD, the emergency contract paid Hairston $392,000 over a year and a half; Hairston’s partner companiessignificant financial ties to Jackson." Jackson’s wife also had "ties to two companies that did business with the New Orleans authority." Atlanta lawyer Michael Hollis, another Jackson friend, "appears to have been paid approximately $1 million for managing the troubled Virgin Islands Housing Authority," despite having "no experience in running a public housing agency." A "top Jackson aide" reportedly made it clear to officials within HUD that "Jackson wanted Hollis" for the job. Curiously, Hollis received more than four times the salary of his predecessor.
from Sen. Frank Lautenberg (D-NJ), Rep. Henry Waxman (D-CA), and Rep. Barney Frank (D-MA) in 2006. Jackson was one of Bush’s few remaining holdovers from Texas, after a also received "direct contracts" with HUD. One of the companies which received a contract in New Orleans, Columbia Residential, had "

The Dilbert Strategy

The Dilbert Strategy

By Paul Krugman

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Anyone who has worked in a large organization - or, for that matter, reads the comic strip "Dilbert" - is familiar with the "org chart" strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom.

You now understand the principle behind the Bush administration's new proposal for financial reform, which will be formally announced today: it's all about creating the appearance of responding to the current crisis, without actually doing anything substantive.

The financial events of the last seven months, and especially the past few weeks, have convinced all but a few diehards that the U.S. financial system needs major reform. Otherwise, we'll lurch from crisis to crisis - and the crises will get bigger and bigger.

The rescue of Bear Stearns, in particular, was a paradigm-changing event.

Traditional, deposit-taking banks have been regulated since the 1930s, because the experience of the Great Depression showed how bank failures can threaten the whole economy. Supposedly, however, "non-depository" institutions like Bear didn't have to be regulated, because "market discipline" would ensure that they were run responsibly.

When push came to shove, however, the Federal Reserve didn't dare let market discipline run its course. Instead, it rushed to Bear's rescue, risking billions of taxpayer dollars, because it feared that the collapse of a major financial institution would endanger the financial system as a whole.

And if financial players like Bear are going to receive the kind of rescue previously limited to deposit-taking banks, the implication seems obvious: they should be regulated like banks, too.

The Bush administration, however, has spent the last seven years trying to do away with government oversight of the financial industry. In fact, the new plan was originally conceived of as "promoting a competitive financial services sector leading the world and supporting continued economic innovation." That's banker-speak for getting rid of regulations that annoy big financial operators.

To reverse course now, and seek expanded regulation, the administration would have to back down on its free-market ideology - and it would also have to face up to the fact that it was wrong. And this administration never, ever, admits that it made a mistake.

Thus, in a draft of a speech to be delivered on Monday, Henry Paulson, the Treasury secretary, declares, "I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil."

And sure enough, according to the executive summary of the new administration plan, regulation will be limited to institutions that receive explicit federal guarantees - that is, institutions that are already regulated, and have not been the source of today's problems. As for the rest, it blithely declares that "market discipline is the most effective tool to limit systemic risk."

The administration, then, has learned nothing from the current crisis. Yet it needs, as a political matter, to pretend to be doing something.

So the Treasury has, with great fanfare, announced - you know what's coming - its support for a rearrangement of the boxes on the org chart. OCC, OTS, and CFTC are out; PFRA and CBRA are in. Whatever.

Will rearranging these boxes make any difference? I've been disappointed to see some news outlets report as fact the administration's cover story - the claim that lack of coordination among regulatory agencies was an important factor in our current problems.

The truth is that that's not at all what happened. The various regulators actually did quite well at acting in a coordinated fashion. Unfortunately, they coordinated in the wrong direction.

For example, there was a 2003 photo-op in which officials from multiple agencies used pruning shears and chainsaws to chop up stacks of banking regulations. The occasion symbolized the shared determination of Bush appointees to suspend adult supervision just as the financial industry was starting to run wild.

Oh, and the Bush administration actively blocked state governments when they tried to protect families against predatory lending.

So, will the administration's plan succeed? I'm not asking whether it will succeed in preventing future financial crises - that's not its purpose. The question, instead, is whether it will succeed in confusing the issue sufficiently to stand in the way of real reform.

Let's hope not. As I said, America's financial crises have been getting bigger. A decade ago, the market disruption that followed the collapse of Long-Term Capital Management was considered a major, scary event; but compared with the current earthquake, the L.T.C.M. crisis was a minor tremor.

If we don't reform the system this time, the next crisis could well be even bigger. And I, for one, really don't want to live through a replay of the 1930s.

Trichet, King May Support Fed as Ammunition Runs Low

Trichet, King May Support Fed as Ammunition Runs Low

By Simon Kennedy and John Fraher

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Federal Reserve Chairman Ben S. Bernanke has so far shouldered most of the burden of saving the global economy and financial markets. He may be about to get more help.

With the credit crisis entering its ninth month, Bank of England Governor Mervyn King and European Central Bank President Jean-Claude Trichet are on the verge of new steps to spur lending and increase liquidity, say economists at Lloyds TSB Group Plc and Royal Bank of Scotland Group Plc. Interest-rate cuts may be next if the crisis persists.

``We're inching closer to the great global monetary easing,'' says Joachim Fels, co-chief economist at Morgan Stanley in London.

Lloyds predicts King's next step will be to accept more types of collateral for loans. Trichet will pump more money into banks, RBS forecasts. Such measures would take Europe's two biggest central banks further down the path laid out by Bernanke this month.

The Fed chairman needs all the help he can get. In addition to lowering interest rates at the fastest pace in two decades, Bernanke has committed as much as 60 percent of the $700 billion in Treasury securities on his balance sheet to expand lending. The Fed has also offered a $29 billion loan against illiquid securities to assist the buyout of failing securities firm Bear Stearns Cos.

Balance-Sheet Barrier

``There is a barrier in terms of the size of the Fed's balance sheet as to how much it can do'' short of printing more dollars, says Neil Mackinnon, chief economist at London-based hedge-fund ECU Group Plc, which manages about $1.5 billion. ``If the European central banks were to adopt more Fed-style measures, it would go a long way to helping the Fed tackle the crisis. This is not only a problem for the U.S. to resolve.''

The ECB and Bank of England have so far failed to restore order to money markets. The cost of borrowing in euros and pounds last week rose to highs for the year. The three-month London interbank offered rate for euros climbed 5 basis points to 4.73 percent, the highest level since Dec. 27. It fell today for the first time since March 3, according to the European Banking Federation.

Deutsche Bank AG, Germany's biggest bank, said last week that ``very challenging'' market conditions will make it harder to meet its profit goal. The Bank of England was forced on March 19 to deny speculation that HBOS Plc, the U.K.'s largest mortgage lender, faced a cash shortage as interest rates surged.

Illiquid Securities

By following the Fed's moves to take illiquid securities as collateral and ease credit terms, King and Trichet would confront the same concern Bernanke, 54, already faces: that they're exposing their balance sheets, and ultimately taxpayers, to potential losses on private-sector securities.

Accepting assets that are hard to sell ``raises the question of moral hazard and could be seen as a bailout for financial institutions that took excessive risk,'' says Christine Li, an economist at Moody's Economy.com in London. ``Putting illiquid mortgage-backed securities onto the central bank's balance sheet will transfer a lot of the risk associated with these instruments.''

At the moment, though, King and Trichet are being bashed for too much caution, not too little.

King, 60, has been slowest to act. Former Bank of England policy maker DeAnne Julius, now chairman of research organization Chatham House, faults him for not offering banks as much cash as the Fed or the ECB and for not acting sooner to accept a broader range of asset-backed securities at auctions.

Sitting on Cash

U.K. banks are sitting on cash and refusing to pass on the central bank's rate cuts to customers, pushing mortgage rates to the highest level in more than seven years and further weighing down a housing market that's already the worst in 18 years.

When King told Parliament on March 26 that he is discussing ``longer-term'' solutions to the credit crisis, lawmaker Jim Cousins told him: ``You're losing the battle. People can smell it.'' Speaking in Israel today, King said banks may be pushed to hold more liquid assets and capital in the future.

Kenneth Broux, an economist with Lloyds TSB in London, predicts the bank will start accepting assets backed by mortgages and might cut the penalty rate it charges banks that borrow outside its regular auctions.

``They've been very conservative, but they have to do more,'' Broux says.

Praise for ECB

Trichet's ECB won plaudits for acting quickly at the outset of the crisis last August, when it loaned 94.8 billion euros ($150 billion) to banks after credit markets seized up. The ECB's charter allows it to lend to a wider range of financial institutions than the Fed and to accept more diverse collateral than either the Fed or the Bank of England.

Now the Frankfurt-based bank is showing signs of stepping up its rescue efforts. Last week it allotted 216 billion euros in its regular weekly refinancing operation, 50 billion euros more than it estimated was required, and offered further cash over periods of three and six months. The bank today received bids from 25 banks in a one-day liquidity providing refinancing operation.

Jacques Cailloux, chief euro-area economist at Royal Bank of Scotland, says the ECB may need to become even bolder. Options include cutting the rate at which banks lend to each other overnight. Lena Komileva, head of research at Tullett Prebon Plc in London, predicts the ECB may soon inject bigger amounts into the banking system.

`Extremely Difficult'

``This is an extremely difficult environment for the ECB,'' she says. ``The current deterioration in liquidity conditions is based on fundamentals and likely to persist.''

Beyond new liquidity efforts lies the prospect of following the Fed's path toward deeper rate cuts -- a step King and Trichet, 65, have been loath to take because of price pressures. The inflation rate in the 15 nations that share the euro is the highest in almost 16 years; it's at a nine-month high in the U.K.

That has kept the ECB's key rate at 4 percent since June, while the Bank of England's, at 5.25 percent, remains the highest among the Group of Seven nations even after two cuts since December. Economists expect the ECB to cut its benchmark rate to 3.5 percent by the end of the year, according to the median of 24 estimates in a Bloomberg News survey. The Bank of England is forecast to cut its main rate to 4.5 percent, according to the median of 15 projections.

Rate Cuts

Meanwhile, the Fed has already lowered its target overnight rate by 3 percentage points, to 2.25 percent, since August. Unless the gap between the Fed and the European banks narrows, it risks fueling inflation in the U.S., slowing economies elsewhere and causing banks more pain, Deutsche Bank economists said in a March 24 report.

``Stresses in markets have reached new heights,'' the report said. ``The significant difference in the approach to managing what is now a truly global financial crisis could aggravate the problems and cause more severe damage to the world economy.''

That has some analysts predicting that Trichet and King will have to cut rates sooner rather than later: Morgan Stanley's Fels predicts the U.K. central bank will cut in the next quarter, and the ECB will follow later in the year.

``The ECB and BOE have stubbornly refused to cut rates, although extreme stress is visible in European financial and commercial real-estate markets,'' says Michael Shaoul, chief executive officer at New York investment-research firm Oscar Gruss & Son Inc. ``This intransigence is unlikely to last much longer.''

April Fools: The Fox To Guard The Banking Henhouse

April Fools: The Fox To Guard The Banking Henhouse

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The Federal Reserve, which has been credited with creating the current housing bubble and bust just as it created the credit bubble of the Roaring Twenties and the bust of 1929, is now to be given vast new powers to oversee regulation of the banking industry and promote "financial market stability." At least, that is the gist of a Treasury Department proposal to be presented to Congress on Monday, March 31, 2008. Adrian Douglas wrote on LeMetropoleCafe.com, "I would like to think that this is some sort of sick April Fools joke, but, alas, they are serious! What happened to free markets?"1

In fact, what happened to regulating the banks? The Treasury’s plan is not for the private Federal Reserve to increase regulation of the banking system it heads. Au contraire, regulation will actually be decreased. According to The Wall Street Journal:

"Many of the [Treasury’s] proposals, like those that would consolidate regulatory agencies, have nothing to do with the turmoil in financial markets. And some of the proposals could actually reduce regulation. According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms. . . . Parts of the plan could reduce the power of the Securities and Exchange Commission, which is charged with maintaining orderly stock and bond markets and protecting investors. . . . The blueprint also suggests several areas where the S.E.C. should take a lighter approach to its oversight. Among them are allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets."2

"securities products" include the mortgage-backed securities, collateralized debt obligations, credit default swaps, and other forms of the great Ponzi scheme known as "derivatives" that have been largely responsible for bringing the banking system to the brink of collapse. But these suspect products are not to be more heavily scrutinized; rather, their approval will actually be "streamlined" and may be automatic if they are being traded in "foreign markets." The Journal observes that the Treasury’s proposal was initiated last year by Secretary Henry Paulson not to "regulate" the banks but "to make American financial markets more competitive against overseas markets by modernizing a creaky regulatory system. His goal was to streamline the different and sometimes clashing rules for commercial banks, savings and loans and nonbank mortgage lenders." "streamlining" the rules evidently meant eliminating any that "clashed" with the Fed’s goal of allowing U.S. banks to be more "competitive" abroad. The Journal continues:

"While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation. The plan would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings. . . . And the plan does not recommend tighter rules over the vast and largely unregulated markets for risk sharing and hedging, like credit default swaps, which are supposed to insure lenders against loss but became a speculative instrument themselves and gave many institutions a false sense of security."

Regulating fraudulent, predatory and overly-speculative banking practices has been left to the States, not necessarily by law but by default. According to then-Governor Eliot Spitzer, writing in January of 2008, state regulators tried to regulate these shady practices but were hamstrung by federal authorities. In a February 14 Washington Post article titled "Predatory Lenders; Partner in Crime: How the Bush Administration Stopped the States from Stepping in to Help Consumers," Spitzer complained:

"several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive ’teaser; rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

"Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers. . . . [A]s New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices . . . .

"Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye. . . . The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). . . . In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules. But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation."

Less than a month after publishing this editorial, Spitzer was out of office, following a surprise exposé of his personal indiscretions by the Justice Department. Greg Palast observed that Spitzer was the single politician standing between a $200 billion windfall from the Federal Reserve guaranteeing the mortgage-backed junk bonds of the same banking predators that were responsible for the subprime debacle. While the Federal Reserve was trying to bail them out, Spitzer had been trying to regulate them, bringing suit on behalf of consumers.3 But Spitzer has now been silenced, and any other state attorneys general who might get similar ideas will be deterred by the federal oversight under which banking regulators are to be "consolidated."

The Federal Reserve under Alan Greenspan deliberately enabled and permitted the derivatives debacle to take down the dollar and America’s credibility. Greenspan is now lauded, feted and awarded at the White House and on network television, and takes a victory lap tour promoting and signing his book and celebrating his multimillion dollar book deal, enjoying his knighthood status in England and hero status on Wall Street. And as the falling debris of the American economy still piles up around us, the very agency that enabled disaster is now seeking to consolidate ultimate authority and accountability to itself, and through centralization and arrogation of power, eliminate all those pesky little Constitutional and State regulations and agencies, recalcitrant governors and the last few whistle blowers, so that the further abuse of power can be streamlined through one agency only. That agency is to consist of an alliance of the banking powers and the executive branch, a perfect formula for the institutionalization of continual abuse.

Perhaps Spitzer was lucky that he was the target only of a character assassination. When Louisiana Senator Huey Long challenged the Federal Reserve and fought for the State’s right to oversee its own financial affairs in the 1930s, he was assassinated with bullets. Long’s local assertion of decentralized State powers, as provided for in the Tenth Amendment to the Constitution, enabled the State of Louisiana to loosen the grip of the corporations on the State’s wealth and allowed the setting up of schools and public institutions that elevated the people of the State and placed its "common wealth" back into the hands of its citizens, while providing employment and education. The Constitution reserves to the States and the people all those powers not specifically delegated to the federal government, arguably including the creation of money itself, which is nowhere specifically mentioned in the Constitution beyond creating coins. (See E. Brown, "Another Way Around the Credit Crisis: Minnesota Bill Would Authorize State Banks to Monetize; Productivity," www.webofdebt.com/articles, March 23, 2008.) But in this latest attempt at expanding the Federal Reserve’s already over-expansive powers, we see clear evidence that the Wall Street and global banking powers have no intention of allowing their plans to be reined in by the Constitutional powers of the States and the people. Instead, they intend to fill up the moat and pull up the draw bridge on their feudal powers, and let the serfs shiver outside the gates for as long as they will put up with it.

NOTES

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and "the money trust." She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her eleven books include the bestselling Nature’s Pharmacy, co-authored with Dr. Lynne Walker, which has sold 285,000 copies. Her websites are www.webofdebt.com and www.ellenbrown.com.

1Adrian Douglas, "PPT to Come Out of the Closet," www.lemetropolecafe.com (March 29, 2008).

2Edmund Andrews, "Treasury’s Plan Would Give Fed Wide new Power," New York Times (March 29, 2008).

3Greg Palast, "Eliot’s Mess" www.gregpalast.com (March 14, 2008).

Paulson's Regulation Plan Won't Fix Current Economic Crisis

Paulson's Regulation Plan Won't Fix Current Economic Crisis

By Kevin G. Hall

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Washington - Treasury Secretary Henry Paulson makes public on Monday a new blueprint for regulation of the turbulent financial markets, one that has plenty to do with the future and little to fix what ails the economy right now.

The plan would merge some federal bank regulators, weaken the agency that regulates the stock market and broaden the shoulders of the Federal Reserve, which will become the chief regulator for the safety and soundness of financial markets.

It's the broadest reform of oversight in the financial markets since the aftermath of the Great Depression and is sure to touch off a frenzy by Gucci-shoed lobbyists in the months and years ahead.

The Paulson plan does not lack big ideas. It would allow insurance companies to opt out of state regulation in favor of a proposed federal insurance regulator. It would merge the regulation of the stock market and futures market. This is to better reflect how commodities like oil and soybeans have become a new investment vehicle that rivals stocks and bonds.

And for the first time, hedge funds, which are private pools of capital for the ultra wealthy, would come under federal regulation, albeit with a light touch.

The idea of modernizing the regulation of financial markets predated today's current turmoil, and it was one of the reasons Paulson left his post as CEO of investment bank Goldman Sachs & Co. to take what many two years ago saw as a dead-end job.

In a tacit admission that the federal government failed in overseeing the housing boom from 2001 to 2006, Paulson would set up a new federal Mortgage Origination Commission, comprised of several bank regulators, to oversee mortgage finance.

"The high levels of delinquencies, defaults and foreclosures among sub-prime borrowers in 2007 and 2008 have highlighted gaps in the U.S. oversight system for mortgage origination," said a draft executive summary to be included in Monday's report.

During the boom years, President Bush touted his vision of an "ownership society" with record levels of home ownership. Lending standards eroded, particularly for sub-prime loans, which are issued to the weakest borrowers.

These sub-prime loans are now at the heart of the nation's financial problems. Banks seldom hold a mortgage on their books but sell into a secondary market, where mortgages are pooled and sold to investors as mortgage bonds. But as lending standards weakened, and almost anyone with a pulse could get a loan, these loans were passed into the secondary mortgage market and on to unsuspecting investors.

As sub-prime loans began defaulting in record numbers - one in five adjustable-rate sub-prime mortgages is now delinquent - the mortgage bonds became toxic and in August spurred a crisis of confidence in credit markets. Because of the lack of transparency in the issuance of these mortgage bonds and in other similarly constructed products, banks stopped trusting each other or the people they do business with.

The collapse of confidence recalls market behavior during the Great Depression, and is the reason the Federal Reserve stepped on March 16 in to prevent the failure of a giant investment bank - Bear Stearns -and made available short-term loans worth an unimaginable half a trillion dollars.

Paulson's plan places particular emphasis on housing finance. The new Mortgage Origination Commission would be comprised of five federal banking regulators and an association of state banking supervisors. It would oversee the adoption by states of federal minimum standards for mortgage brokers - who originated about two-thirds of the sub-prime loans now going bust - and would establish licensing and qualification standards, records of personal conduct and standards under which a broker could loose a license.

But Paulson leaves it to states to enforce federal regulations on independent mortgage brokers - the same states that failed to rein them in during the housing boom.

Paulson's call for an super-regulator of financial markets mirrors ideas already presented in legislation by Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.

Frank welcomed Paulson's plan but said it gave insufficient attention to the non-bank lenders who issued the problem home loans. The largest of these companies - New Century Financial Corp. and Ameriquest Mortgage Co. - are now bankrupt. They fell through the cracks of federal legislation and state regulation.

Paulson's plan "goes too far in diminishing the role of the states, and not far enough in conferring needed new powers on the Federal Reserve over non-bank financial institutions for which they now have greater responsibility," Frank said.

President Bush has viewed financial markets as self-regulating, believing that investment banks, which aren't subject to the same kind of scrutiny as commercial banks, can be held to good behavior by the companies they do business with, called counterparties.

This process broke down when mortgages were being bundled and sold to investors. Investors relied on credit rating agencies like Moody's, Fitch and Standard & Poors, which gave the prestigious AAA rating to many of the mortgage bonds. But the rating agencies had a conflict of interest. One branch of their business worked with investment banks to pool and package the bonds while another arm rated them.

Only in mid-2007 did the Securities and Exchange Commission (SEC), which regulates the stock market, obtain the powers to regulate the rating agencies. Despite the shortfalls in regulation, Paulson's report recommends that the SEC streamline self-regulatory provisions and make it possible for even more self regulation to increase "product innovation and investor choice."

The last major effort to regulate financial markets followed the collapse of energy giant Enron, and resulted in new accounting standards that many experts warn have caused companies to list on foreign stock exchanges instead of on Wall Street.

That's why financial industry players greeted Paulson's report with an eye toward deregulation instead of regulation.

"The U.S. apparatus of financial supervision remains a patchwork of legal entity- and product-focused regulatory fiefdoms with overlapping jurisdictions and varying statutory responsibilities and powers," said Rob Nichols, president of the Financial Services Forum, an industry trade association.

Added David Hirschmann, president of the U.S. Chamber of Commerce's committee on financial markets, "Band-aid solutions such as simply layering on new regulation upon a duplicative, creaky old system won't do."

States Are Hit Hard by Economic Downturn

States Are Hit Hard by Economic Downturn

By Keith B. Richburg and Ashley Surdin

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Many cutbacks felt by most needy.

New York - In Illinois' Cook County, women in poor neighborhoods no longer have access to free mammograms from two mobile vans testing for breast cancer.

In Michigan, hikers will find about 20 campgrounds closed, and scientists are ending their studies of fish populations in the Great Lakes.

In New Jersey, state workers are being laid off, and at least one town is canceling its traditional Fourth of July fireworks.

And in California's San Fernando Valley, Everardo Orozco, 53, who has AIDS, exhausted his medical benefits and can no longer afford the drugs that are keeping him alive.

"I don't know which ones I can afford every month," Orozco said, explaining how his supply is dwindling and his share of the payments has skyrocketed from $400 to $3,200 per month. He now injects himself with some medications once a day instead of twice - not enough to keep his T-cell count from dropping or to prevent his body from becoming resistant to treatment. And he fears that there will be more cuts.

State budgets have been hit hard by a worsening national economy, including rising costs for energy and health care. In addition, fallout from the subprime mortgage crisis - declining home sales, deflated property values and mounting foreclosures - has caused a slide in states' anticipated tax receipts. Revenue from property taxes, sales taxes and real estate transfer taxes is affected.

At least half of the nation's states are facing budget shortfalls, some of them severe, and policymakers in most of the states affected are proposing and passing often-painful measures to trim costs and close the gaps. Spending on schools is being slashed, after-school programs are being curtailed and teachers are being notified of potential layoffs. Health-care assistance is being cut for the elderly, the disabled and the poor. Some government offices, such as motor vehicle department locations, will start closing on weekends, and some state workers are receiving pink slips.

Some analysts worry that the impact is being felt disproportionately by the most needy.

"It's disappointing, the extent they tend to focus their cuts on the most vulnerable," said Iris J. Lav, deputy director of the Washington-based Center on Budget and Policy Priorities, a liberal think tank that monitors state budget issues. "It does appear to disproportionately affect low-income people."

Unlike the federal government, which can run deficits, almost all states are required by their own laws and constitutions to balance their budgets. Many states are just now hammering out their budgets, so some targeted programs could still be saved in last-minute negotiations.

In most states, talk of raising taxes has become politically perilous, particularly with residents already hurting from falling housing values and a worsening economy.

Only half a dozen states have approved, or are considering, tax increases, including Maryland and Michigan, both of which raised taxes in 2007. In New Jersey, which has a $3 billion deficit, Gov. Jon S. Corzine (D) has proposed eliminating or reducing most property tax rebates. In New York, facing a $5 billion shortfall, an idea in the General Assembly for a new income tax for people making more than $1 million per year died last week after the Republican-controlled Senate, and Gov. David A. Paterson (D), strongly opposed it.

Instead of raising taxes, most states with shortfalls are curtailing services, and the effects are already being felt nationwide. Some of the most dramatic cuts are being made in California, Maine and Rhode Island, according to budget experts, with New Jersey not far behind.

California is facing the worst budget crisis, with a $16 billion shortfall, and Gov. Arnold Schwarzenegger (R) has proposed a $4.8 billion cut in education services. About 20,000 teachers, counselors, librarians, nurses and other support staff members have received notice of potential layoffs, according to the state's Education Department.

Los Angeles, which has the state's largest school district and a $6 billion budget, faces a $460 million cut for the next school year - the dollar equivalent of shutting down the entire district for two weeks.

In Thousand Oaks, Calif., the Conejo Valley Unified School District, home to 30 schools and 22,000 students, has already closed two elementary schools for next year. Superintendent Mario Contini said layoffs could be next. "School districts have been making cuts every year, and there isn't much left to cut," he said. "We've already cut the flesh to the bone, and now we're removing the skeletal parts. It's that severe."

Schwarzenegger has also proposed $650 million in cuts to the Healthy Families Program and Medi-Cal, which together provide health-care services to more than 7 million senior citizens, disabled people and children in the state. Adults under the Medi-Cal program would lose their dental benefits, as well as optometry and psychology services.

The California Department of Public Health is also facing an $11 million cut to AIDS services, with the bulk of that - $7 million - coming from a program that helps low-income Californians, such as Orozco, obtain lifesaving antiretroviral medicine.

Orozco had been paying $400 per month for the 15 daily medications he needs. But when his allotment under the program ran out, his share jumped to $3,200, and he could no longer afford five of the drugs.

"We want to continue to live, you know," he said. "We need to continue fighting what this is. I've been dealing with this since 1983. Every day, it's a fight. It's not easy. Either they help us do something to fight this, or we're going to die."

A recent 50-state survey by the Associated Press showed that hundreds of thousands of poor children, the disabled and the elderly stand to have their health coverage eliminated as a result of budget cuts, and more than 10 million people would lose access to dental care, specialists and name-brand prescription drugs.

Budget experts said they see a repeat of the pattern that happened during the recession of 2001: States generally cut health services and medical benefits first, because these costs are often rising more rapidly than others, and the savings tend to be immediate.

Subsidies to higher education are also a favored target for budget cuts - mainly because policymakers often believe that universities can find money from other sources, such as private donations or higher tuition.

Budgets for parks and recreation, and for natural resources and science, also stand to take a hit.

In cash-strapped Michigan, dealing with the struggles of the automobile industry, the Department of Natural Resources is closing 20 campgrounds, including the highly popular and rustic Pinney Bridge State Forest Campground, considered one of the most beautiful in the Lower Peninsula. The department also plans to end its studies of fish populations in the Great Lakes, and 14 conservation officials are being laid off.

Hunters in Michigan will also find their license fees increased.

In Illinois, Gov. Rod Blagojevich (D) has proposed ending a popular controlled pheasant-hunting program at state sites. Outraged hunters have said that among those affected will be the young and the handicapped, who have access to special hunts under the state program.

As Jobs Vanish, Food Stamp Use Is at Record Pace

As Jobs Vanish, Food Stamp Use Is at Record Pace

By Erik Eckholm

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Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.

The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 - to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

The percentage of Americans receiving food stamps was higher after a recession in the 1990s, but actual numbers are expected to be higher this year.

Federal benefit costs are projected to rise to $36 billion in the 2009 fiscal year from $34 billion this year.

"People sign up for food stamps when they lose their jobs, or their wages go down because their hours are cut," said Stacy Dean, director of food stamp policy at the Center on Budget and Policy Priorities in Washington, who noted that 14 states saw their rolls reach record numbers by last December.

One example is Michigan, where one in eight residents now receives food stamps. "Our caseload has more than doubled since 2000, and we're at an all-time record level," said Maureen Sorbet, spokeswoman for the Michigan Department of Human Services.

The climb in food stamp recipients there has been relentless, through economic upturns and downturns, reflecting a steady loss of industrial jobs that has pushed recipient levels to new highs in Ohio and Illinois as well.

"We've had poverty here for a good while," Ms. Sorbet said. Contributing to the rise, she added, Michigan, like many other states, has also worked to make more low-end workers aware of their eligibility, and a switch from coupons to electronic debit cards has reduced the stigma.

Some states have experienced more recent surges. From December 2006 to December 2007, more than 40 states saw recipient numbers rise, and in several - Arizona, Florida, Maryland, Nevada, North Dakota and Rhode Island - the one-year growth was 10 percent or more.

In Rhode Island, the number of recipients climbed by 18 percent over the last two years, to more than 84,000 as of February, or about 8.4 percent of the population. This is the highest total in the last dozen years or more, said Bob McDonough, the state's administrator of family and adult services, and reflects both a strong enlistment effort and an upward creep in unemployment.

In New York, a program to promote enrollment increased food stamp rolls earlier in the decade, but the current climb in applications appears in part to reflect economic hardship, said Michael Hayes, spokesman for the Office of Temporary and Disability Assistance. The additional 67,000 clients added from July 2007 to January of this year brought total recipients to 1.86 million, about one in 10 New Yorkers.

Nutrition and poverty experts praise food stamps as a vital safety net that helped eliminate the severe malnutrition seen in the country as recently as the 1960s. But they also express concern about what they called the gradual erosion of their value.

Food stamps are an entitlement program, with eligibility guidelines set by Congress and the federal government paying for benefits while states pay most administrative costs.

Eligibility is determined by a complex formula, but basically recipients must have few assets and incomes below 130 percent of the poverty line, or less than $27,560 for a family of four.

As a share of the national population, food stamp use was highest in 1994, after several years of poor economic growth, with an average of 27.5 million recipients per month from a lower total of residents. The numbers plummeted in the late 1990s as the economy grew and legal immigrants and certain others were excluded.

But access by legal immigrants has been partly restored and, in the current decade, the federal and state governments have used advertising and other measures to inform people of their eligibility and have often simplified application procedures.

Because they spend a higher share of their incomes on basic needs like food and fuel, low-income Americans have been hit hard by soaring gasoline and heating costs and jumps in the prices of staples like milk, eggs and bread.

At the same time, average family incomes among the bottom fifth of the population have been stagnant or have declined in recent years at levels around $15,500, said Jared Bernstein, an economist at the Economic Policy Institute in Washington.

The benefit levels, which can amount to many hundreds of dollars for families with several children, are adjusted each June according to the price of a bare-bones "thrifty food plan," as calculated by the Department of Agriculture. Because food prices have risen by about 5 percent this year, benefit levels will rise similarly in June - months after the increase in costs for consumers.

Advocates worry more about the small but steady decline in real benefits since 1996, when the "standard deduction" for living costs, which is subtracted from family income to determine eligibility and benefit levels, was frozen. If that deduction had continued to rise with inflation, the average mother with two children would be receiving an additional $37 a month, according to the private Center on Budget and Policy Priorities.

Both houses of Congress have passed bills that would index the deduction to the cost of living, but the measures are part of broader agriculture bills that appear unlikely to pass this year because of disagreements with the White House over farm policy.

Another important federal nutrition program known as WIC, for women, infants and children, is struggling with rising prices of milk and cheese, and growing enrollment.

The program, for households with incomes no higher than 185 percent of the federal poverty level, provides healthy food and nutrition counseling to 8.5 million pregnant women, and children through the age of 4. WIC is not an entitlement like food stamps, and for the fiscal year starting in October, Congress may have to approve a large increase over its current budget of $6 billion if states are to avoid waiting lists for needy mothers and babies.

Human Rights Violations in Israel and Palestine

Human Rights Violations in Israel and Palestine

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The Association for Civil Rights in Israel (ACRI) publishes annual reports on the state of human rights in Israel and occupied Palestine. This article is based on its latest year end 2007 one.

ACRI is Israel's leading human and civil rights organization and the only one addressing all rights and liberties issues. It was founded in 1972, is independent and nonpartisan, and leads the struggle for these issues in Israel and the Occupied Territories through litigation, legal advocacy, education, and public outreach. ACRI also believes that civil and human rights are universal. They must be "an integral part of democratic community building and....a unifying force in Israeli public life" for everyone, especially those most marginalized, disadvantaged and currently persecuted or neglected.

ACRI evaluates the state of human rights annually, and it's latest report coincided with the December 10, 2007 International Human Rights Day. Its purpose is to cite flagrant violations; note positive trends and developments, if any; and "trace significant human rights-related processes (affecting) Israeli citizens and residents." Reports rely on various information sources: government publications, NGO reports, newspaper and other published materials, parliamentary documents and court litigation.

Human rights violations directly result from government policies, actions and inactions, and ACRI's report is gloomy. It found the Israeli government derelict for having allowed the "blanket" of rights it's supposed to ensure for Arabs and Jews to erode. As a result, rights violations grow, more people are affected, and those harmed most are on society's fringes. ACRI's report is comprehensive and documents them in areas of:

-- health;

-- workers' rights;

-- the state of Arab Israelis;

-- education in Sderot;

-- migrant worker rights;

-- citizenship and residency status;

-- human rights in occupied Palestine, highlighting neglect and discrimination in Arab East Jerusalem, Hebron, and the "unrecognized" Negev Bedouins;

-- freedom of expression;

-- the right to privacy;

-- criminal justice; and

-- the overall destabilization and erosion of democracy in the country. Israel claims to be a democracy. Its record disproves it.

ACRI's evidence is disturbing and compelling, yet it's appalled by the Israeli public's indifference. It aims to change this by publicizing its findings so those in government, the media and general population know them and will react to reverse an ugly and damaging trend. Growing numbers of people worldwide know how Israel harms Palestinians. ACRI's report shows that Jews are also impacted.

Health Care in Israel

Israel's 1994 National Health Insurance Law has noble guarantees - quality health services for every Israeli resident in accordance with justice, equality and mutual support principles. Ever since, however, Israeli governments violated their obligation, and unequal access has increased. It's characterized by inadequate funding, privatized health services, a steady erosion in the extent and quality of services provided, and the crowding out of access for the poor and many in the middle class. Defunding public health means private insurance is as essential as it is in the US. The result is two health systems differing markedly in quality - one for the well-off and another for everyone else, including many in the middle class.

ACRI finds it disturbing. The trend undermines Israel's social contract with its citizens, violates basic rights, and reneges on the state's duty under the International Covenant of Economic, Social and Cultural Rights. ACRI focuses on the problem with special emphasis on a growing hospital crisis, the need for expensive supplemental insurance, and how various population groups cope inadequately under very limited and expensive health service access.

In recent years, budgets have been cut, and the trend continued in 2007. The Ministry of Health's per capita allocation is 14% lower than in 2001, and the Ministry's development budget is 43% lower. Public hospitals have been hardest hit, patient access to quality health care has eroded, and medical personnel are understaffed and aren't able to provide the best care possible.

The Israel Medical Association January 2007 data highlight the crisis:

-- the hospital beds/population ratio has declined; it was 3.27 per 1000 persons in 1970; a year ago it touched 1.94, the lowest figure among western countries;

-- the approved number of beds hasn't increased, the need for them has, and it's been met by adding "non-approved" beds that comprise up to 30% of the total in hospital internal medicine units (IMUs); the result is growing overcrowding and medical staff unable to cope;

-- on routine days, average hospital occupancy is 100% compared to 85% in the West; in IMUs it reached 130% and in pediatric units 112%; and

-- overcrowding and underfunding force early patient releases before they're ready to go; they also contribute to the spread of infections, viruses and diseases and require doctors and medical staff to be responsible for a growing number of patients, more than they can adequately handle.

Ever since the 1994 National Health Insurance Law passed, health services have eroded in violation of its guarantee. The Adva Center advocates for policy changes favoring disadvantaged Israelis. It tallied the damage through last year and found a 44% decline in health service funding with gaps made up for by supplemental insurance. Over 70% of the public have it while the rest rely solely on dwindling national health services that often fail to deliver.

Most disadvantaged Israelis lack supplemental insurance: one-third are age 65 or older; 53% are Israeli Arabs; 42% are Jews of Russian origin; while 11% are from the Hebrew-speaking community. A 2007 Physicians for Human Rights report describes how various population groups are disadvantaged. Those furthest removed from Israel's social center got poorest access. They include: low wage earners; "unrecognized" Negev Bedouins; East Jerusalem Palestinians; Israelis married to Occupied Territory Palestinians; prisoners; Palestinian spouses of Israeli Arabs; migrant workers; refugees and asylum-seekers; and victims of human trafficking. In total, these groups comprise about 1.25 million men and women.

Income alone is a hugely limiting factor, and two studies document it. A 2005 Brookdale Institute one showed that 15% of Israelis forego some medications. Among low wage earners, the figure was 23%. A 2006 Israel Medical Association survey of Israeli Jews found 23% of them abstain from some form of treatment or essential medication with income and family size the main limiting factors. The same survey reported that 56% of Israeli Jews fear they'll be unable to afford needed medication because of cost, and it estimated that the situation for Israeli Arabs is far worse.

The situation is most acute in peripheral areas, especially in southern Israel that's populated by Bedouin Arabs and new immigrants. Here, socioeconomic status is lowest and so is access to health services that are far below what's available in Central Israeli cities like Tel Aviv and Haifa: fewer hospital beds, inadequate specialized equipment, fewer specialists, and waiting periods for appointments can take weeks. In addition, for more complicated cases, patients are at risk. Hospitals can only provide preliminary exams, patients must incur time and expense to get to where proper treatment is available, and it can be touch and go in life-threatening cases.

ACRI believes that distributive justice demands that the state provide local health services where they're lacking so all Israelis get equal access to it. That will require funding boosts not now available or planned.

Worker Rights and the Unemployed

Subcontracted employment is a growing trend in Israel, the practice exploits workers, labor laws are violated, and human rights organizations are taking note. On average, subcontract wages are 60% of standard, few or no benefits are gotten, and worker rights are routinely violated. Most common abuses include: wages below minimum, illegal overtime without pay, firings without severance, social benefits withheld, leave time disallowed or no pay while on leave, lower pay because of illegal deductions and fines, and organizing efforts crushed.

The situation is deplorable, organizations like ACRI are addressing it, and the government tops their target list. It's the country's largest subcontract employer and the body responsible for making and enforcing the law. Progress for reforms show promise:

-- in March 2007, the Ministry of Finance's General Accountant, Yaron Zelekha, directed government ministries to assure that subcontract bidding includes all social benefits workers are entitled to under protective labor laws. ACRI called it a "significant breakthrough" provided they're enforced; earlier efforts failed because they weren't;

-- the same Ministry now requires subcontract companies to present confirmation they're complying with employment laws;

-- in June 2007, the Knesset produced a draft bill requiring organizations using subcontract labor to assure worker rights aren't violated; and

-- the General Accountant also established a minimum price for employing subcontract workers.

Earlier in 2005, the government established the "Mehalev" program that was known as the "Wisconsin Plan" where the idea originated. In principle, it was sound, but in practice it failed. The idea was this - reduce the number of guaranteed income recipients by integrating them into the job market and thus provide better opportunities for more pay and benefits. In fact, the format was unsuitable for many required to enroll, too little investment went into the program, and bureaucratic obstacles overwhelmed its administration.

A June 2007 inter-ministerial report assessed the plan, concluded it failed, and recommended a new one be established with a menu of proposed changes. As a result, revisions were made, and a new program called "Employment Lights" began in August 2007 with performance under it yet to be assessed.

The Rights of Israeli Arab Citizens

The Palestinian population (excluding refugees) is around 5.3 million. About 3.9 million live in occupied Gaza and the West Bank, and another 1.4 million are Israeli citizens comprising 20% of the population of 7,150,000. They live mainly in three heartlands - the Galillee in the north, along the "Little Triangle" in the center, and the Negev in the south. They get no rights afforded Jews even though Israeli Arabs are citizens, have passports and IDs and can vote in Knesset elections. Even so, they're nonpersons, are systematically abused, neglected, and are confined to 2% of the land plus another 1% for agricultural use.

ACRI assesses the damage that shows up in reports and surveys it reviews. They reveal a disturbing trend - increasing racism toward and discrimination against Israel's Arab citizens. For example:

-- the June 2007 Israel Democracy Institute's "Democracy Index" reported disturbing results explained below, and the data are the highest seen since pre-Oslo;

-- a March 2007 Center Against Racism report showed a 26% rise in racist incidents against Israeli Arabs in 2006. In addition, an overall negative trend toward Arabs is growing, including feelings of discomfort, fear and hatred. Most disturbing is the government's attitude and how the media portrays its Arab citizens - stereotypically negative, threatening and as state enemies. Fear and loathing is then sown that, in turn, is translated into actions - threats, assaults, forced separation of Jewish and Arab communities and racist Knesset legislation;

-- Knesset members (MKs) and public figures want to strengthen the Jewish character of the state and do it legislatively. For example:

(1) to make military or national service a prerequisite to vote and get National insurance benefits; Arabs aren't required to serve in the military, they're not encouraged to do it, few of them do, and Israel's Ministry of Defence has discretion under Article 36 of the 1986 National Defence Service Law to exempt all non-Jews;

(2) to require MKs and ministers to declare their allegiance to the State of Israel as a "Jewish and Democratic State;" and

(3) a 2007 draft bill declaring that Jewish National Fund (JNF) land (about 13% of state lands) should only be for Jews; the bill passed its "preliminary reading" by 64 to 16. In actuality, the government owns about 80% of Israeli land, the JNF another 13%, and Jews and Arabs the rest. The Israel Land Administration (ILA) administers all government and JNF land, controls who gets access to it, and pretty much assures that Arabs can't buy Israeli land.

These and other measures reveal a disturbing pattern - state-sponsored racism against Israeli Palestinians. They're routinely victimized, punished for being Arabs, and denied equality, dignity, privacy, freedom of movement and everything afforded Jews. Their freedom of expression was also challenged after four Arab documents were published with clearly stated aims - to legislatively mandate equal citizenship rights for all Israelis (Jews, Muslims, Christians and others). Outrage was the response because Jews believe these demands threaten state sovereignty. So do officials like head of General Security Service (GSS), Yuval Diskin. He called Israeli Arabs a "strategic threat," and got Attorney General Menachem Mazuz to agree.

Palestinian citizens have no say and are disadvantaged in many ways. They're routinely denied equal access to public resources in all areas of life, and ACRI highlights the northern rehabilitation program budget as an example. Arab villages there are sorely lacking because of government neglect. Budgeted funds are inadequate, they're improperly used, Arabs in the north are marginalized, their needs go unaddressed, and 2008 promises to be worse with planned budget cuts.

It's worse still in the south for the Negev Bedouins who comprise half the area's 160,000 population. They live in villages called "unrecognized" because their inhabitants had to flee their homes during Israel's War of Independence, couldn't return when it ended, and are considered internal refugees and "trespassers" on Jewish land.

These villages were delegitimized by Israel's 1965 Planning and Construction Law that established a regulatory framework and national future development plan. It zoned land for residential, agriculture and industrial use, forbade unlicensed construction, banned it on agricultural land, and stipulated where Israeli Jews and Palestinians could live.

Existing communities are circumscribed on a map with blue lines around them. Areas inside can be developed. Those outside cannot. Great latitude is shown Jewish communities, so new ones are added. In contrast, Palestinian areas are severely constricted with no allowed room for expansion. Their land was reclassified as agricultural meaning no new construction is allowed. It means entire communities are "unrecognized" and all homes and buildings there are illegal, even the 95% of them built before the 1965 law passed. They're subject to demolition and their inhabitants displaced at Israel's discretion. It's so new land for Jews can be provided with Arab owners helpless to stop it.

As a result, no new Palestinian communities are allowed, and existing "unrecognized villages" are denied essential services like clean drinking water, electricity, roads, transport, sanitation, education, healthcare, postal service, telephone connections, refuse removal and more because under the Planning and Construction Law they're illegal. The toll on people is devastating:

-- clean water is unavailable almost everywhere unless people have access to well water;

-- the few available health services are inadequate;

-- many homes have no bathrooms, and no permits are allowed to build them;

-- only villages with private generators have electricity that's barely enough for lighting;

-- no village is connected to the main road network,

-- some villages are fenced in prohibiting their residents from access to their traditional lands; and

-- education is limited, achievement levels are low, and dropout rates high.

It's worse still when home demolitions are ordered. It may stipulate Palestinians must do it themselves or be fined for contempt of court and face up to a year in prison. They may also have to cover the cost when Israelis do it under a system of convoluted justice penalizing Palestinians twice over for being an Arab in a Jewish state.

In 2007, around 200 Bedouin homes were demolished, compared to much lower numbers in previous years: 23 in 2002, 63 in 2003, 15 in 2005 and 96 in 2006. Most of the homeless are "invisible," the media hardly covers them, Jews are largely uninformed, and planned Negev Judaization assures things will get worse. It's to be a "A Miracle in the Desert" with a clearly defined aim - to populate the area with a half million Jews in the next decade. Plans are for 25 new communities and 100,000 homes on cleared Bedouin land. Unless efforts coalesce to stop them, the human toll will be horrific.

Various advocacy organizations are trying, and one is the UN Committee on the Elimination of all forms of Racial Discrimination. It published its recommendations in March 2007 that called on Israel to reconsider its development plans and recognize "the rights of the Bedouins to own, develop, control and use their communal lands, territories, and resources...." ACRI calls them a "national, religious, and cultural(ly) indigenous minority." Under international law, Israel is obligated to respect their right to preserve their culture and provide them adequate housing, education, livelihood and dignity. Israel, on the other hand, disdains international law, so hoping authorities will respect it looks impossible.

Education in Sderot, Israel

Sderot borders Gaza and has been struck by Palestinian Qassam rockets. ACRI's study focuses on protecting schools from them, rather than on the education they provide. It reported that despite the state's obligation to defend its citizens, it's done it poorly in Sderot, including for its schools. They were built in the 1970s, have shingled roofs and lack security rooms. In July 2006, the government adopted the Home Front Command's protection plan that called for reinforcing 24 of the city's schools. Then after a Parents Committee of Sderot petition to the High Court of Justice in October, it was announced that protected space construction would be provided for all preschools and first through third grade classrooms in the Gaza-border region.

In May 2007, the Court ruled that the government must provide "full protection" for all classrooms by the start of the 2007-2008 school year. By mid-October, the Sderot Municipality reported work was proceeding satisfactorily on seven schools with plans to build 13 news ones by 2010.

ACRI also reported on a shortage of educational psychologists to provide counseling services to students, parents and educators because of the trauma caused by rocket landings in residential areas. A better strategy would be for Israel to stop attacking Gazans, they wouldn't respond in self-defense, and that would ensure safety on both sides. Israel ignores that option, however, chooses conflict instead, so the Ministry of Education and Sderot Municipality need bigger counseling budgets for what they should never have to deal with in the first place.

Migrant Worker Rights

In October 2006, Israel enacted legislation prohibiting trafficking in persons for slavery, forced labor, prostitution, human organ sales, human reproduction, or immoral publications. Ignored were other types of trafficking, such as "binding" workers to employers and requiring onerous fees to brokers that are still common. More on that below. A victory was achieved in part, however, for 63% of those requesting it in 2007 - granting legal status to migrant workers' children who were born in Israel or have lived there since very young, use Hebrew as their primary language, and have adopted Israel as their culture.

The High Court granted another one as well on the way agricultural firms, nursing care services and other industries "bind" migrant workers to a single employer. It ruled this infringes on workers rights, must be discontinued, and gave the government six months to draft new a employment arrangement for its migrant workers. As of last October, nothing was implemented, 18 months after the Court ruling. Abuses still occur, and ACRI concludes that evidence about them paints a "bleak picture for future employment conditions for Israeli migrant workers."

Then there's the matter of brokers' fees that can be "astronomical" and a way to earn profits at workers' expense. Israel allows them even though the law forbids it. They're an oppressive burden, can cost several months wages, and they may require high interest rate loans to be able to pay them. A solution may be near, however, under an agreement between Thailand and the International Organization for Migration (IOM) regarding agricultural worker recruitment. Beginning this year, only migrant workers from countries with which Israel has bilateral brokerage fee agreements will be allowed into the country. It remains to be seen if this will work.

Citizenship and Residency Status

Sovereign states are entitled to decide who can immigrate and get permanent status. But they must consider human rights, issues of family, and not exclude refugees, asylum-seekers, stateless persons or those coming under duress. Israel fails on all counts and makes things worse. It has no immigration policy for non-Jews who aren't welcome, and family member status rules are changing and becoming hardened.

In 2005, the government appointed Professor Amnon Rubinstein to head a committee to assess the immigration issue, examine relevant legislation and regulations, and propose new policies and laws. In February 2006 a report was issued, but the committee wasn't reappointed, and bureaucratic guidelines replaced policy with Population Registry civil servants in charge. An administrative black hole is the result with policies governing non-Jews stiffened.

Since 2003, the Citizenship and Entry into Israel Law (Temporary Order) denies legal status to Palestinian spouses of Israeli citizens. Israeli Arabs suffer the most as they maintain marriage and family ties with their relatives in the Territories. In May 2006, the High Court rejected petitions opposing the law and determined that it serves an essential security purpose. As a result, although the law is temporary, it's been extended several times, most recently through July 2008.

In addition, the law's scope has been expanded and now prevents family member spouses from Iran, Lebanon, Syria, Iraq, and other government-designated "enemy states" from getting status. Tougher immigration rules for non-Jews were also in a government-proposed draft bill stipulating that illegal Israeli residents must leave for a multi-year "cooling off" period before being eligible to return. The law is far-reaching on issues of family life; equality for spouses of Israeli citizens and residents; parents of Israeli minors; elderly parents; minor children of Israeli citizens and residents; indigenous Negev Bedouins with no formalized status; asylum-seekers; women victimized by trafficking; and many others.

According to the UN High Commission for Refugees (UNHCR), the number of asylum-seekers in Israel rose sharply over the past year. Most arrive through Egypt under trying conditions, bear scars of physical and mental abuse, are impoverished and desperate, have no relatives or friends in the country, and are totally dependent on aid from their host.

For its part, Israel lacks clear policy directives for dealing with the situation. Mechanisms in place are based on Ministry of Interior unpublished procedures, and inter-ministerial committee asylum determinations are made on a case-by-case basis with all deliberations kept secret. The result is the lowest percent of requests granted in the West, just 1% in 2005. It was even lower in 2006 at under 0.5%. In 2007, 350 refugees got temporary protection, 805 others were denied, and 863 are under review.

Even persons recognized as refugees aren't granted permanent Israeli status. At best, they get temporary permits for limited stays. Provisions allow bi-annual renewals if hardship conditions remain in countries of origin, but at times refugees are summarily turned away and others (including women and children) imprisoned for extended periods under very difficult conditions and without having committed an offense.

Israel is morally and legally bound to assist asylum-seekers. And it has every right to establish laws and procedures for their admittance. Yet its record is shameless as the West's least hospitable country to individuals in greatest need.

Human Rights Violations in Occupied Palestine

June 2007 was a milestone for Palestinians. It marked 40 years under Israeli occupation, during which time their democratic rights have been denied and they've endured appalling human rights abuses - to life, liberty, security, privacy and personal safety, in or outside their homes. In addition, they have no property rights or freedom of movement, employment, or for health care and education. They're collectively punished and economically strangled. Their borders are blocked and routinely violated as are their waters and air space. They're also constricted by oppressive curfews, roadblocks, checkpoints, electric fences and separation walls, and their homes are being bulldozed and land taken for illegal settlement expansions. It gets worse.

Israeli security forces brutally harass, arrest, imprison, torture and extra-judicially assassinate anyone with impunity. Palestinians are helpless, redress is denied them, and when they resist, they're called terrorists. The toll has been horrific, it's too detailed to recount, so ACRI focused on three prominent issues: movement restrictions, conditions in Hebron that symbolize the overall situation, and life in occupied Gaza that's more repressive than ever. It then addressed conditions in Arab East Jerusalem.

Free movement is a basic human right that affects other rights: to employment, to live in dignity, to education, health, and the right to family life. Since the second Intifada began in September 2000, these freedoms have been constricted, and it's made life in the Territories impossible. They mainly affect the West Bank that's restricted by hundreds of checkpoints, roadblocks, barriers and the Separation Wall that's taken 10% of Palestinian territory through a shameless land grab on the pretext of security.

Movement restrictions have split the West Bank into six geographic units - North, Center, South, the Jordan Valley, the northern Dead Sea, and East Jerusalem. Movement is severely restricted within and between them, it's had a grave impact on normal economic life, and Palestinians are effectively prisoners in their own land.

Consider the checkpoints. They restrict movement and subject Palestinians to inordinate delays and abusive searches. They're supplemented by countless obstacles further impinging movement: concrete blocks, earth mounds, and trenches that deny direct vehicular or pedestrian passage and allow Israelis exclusive access to 311 kilometers of main West Bank roads connecting all of Israel and the Territories. Those most harmed are the elderly, sick, pregnant women and small children. So are selected population groups according to gender, age or place of residence. Males aged 16 to 30 or 35 are targeted as well as populations in cities under assault.

Then there's the "black lists" called "Police Refused" or "GSS Refused." Tens of thousands of Palestinians are on them for groundless and arbitrary reasons with no right of appeal. Their lives are disrupted, freedom denied and movements restricted inside the Territory or when attempting to leave. The Separation Wall makes things worse. It's 80% on Palestinian land, has nothing to do with security, separates Palestinians from each other, and violates their fundamental human rights:

-- it separates Palestinian cities, villages, communities and families from each other;

-- cuts off Palestinian farmers from their lands;

-- impedes access to health facilities, educational institutions and other essential services; and it

-- obstructs access to clean water sources and effectively steals them.

The planned route when completed will be immense - 780 kilometers. By October last year, 409 kilometers were completed and another 72 km were being built. As of last May, there are 65 gates but Palestinians can only pass through 38 of them and only for selected hours of the day and not at all on some days. Around Jerusalem, the planned route is 171 km; half was completed by last June and another 32 km were under construction. The Wall cuts off Palestinians in East Jerusalem neighborhoods from the remaining West Bank as well as villages around Jerusalem and some Palestinian East Jerusalemites from the center of their lives and livelihoods in the city.

When completed, the Wall will create two types of Palestinian enclaves:

-- villages and agricultural land on the Israeli side in what's called the "seam zone;" and

-- villages and land on the Palestinian side that are blocked on three or more sides by twists in the route or the intersection of the Wall with physical roadblocks or roads forbidden to Palestinians.

The UN Committee on the Elimination of all forms of Racial Discrimination published recommendations concerning Israel in March 2007. It expressed concern that Occupied Territory movement restrictions have been "highly detrimental" and have impacted essential elements of Palestinians' lives that "gravely infringe (their) human rights...." They have no justification for security or "military exigencies." Yet they're maintained, and who'll challenge Israel to change things.

The same situation exists in Hebron, ACRI and B'Tselem jointly documented it, and last year prepared a report called: "Ghost Town." It's a disturbing story of separation, forced displacement and terror. Israel is the oppressor, Palestinians the victims, and no one seems to care. The human toll is horrific - "protracted and severe harm to Palestinians (from) some of the gravest human rights violations" against them that go unaddressed, continue unabated, and worsen.

Hebron's City Center was once a thriving commercial and residential area. Today it's a "Ghost Town" because Israel destroyed its fabric of life through a state-imposed policy of land seizures, extended curfews, harsh free movement restrictions and unaddressed violence. Combined, they terrorize Palestinians and prohibit them from driving or even walking on the area's main streets. That, in turn, makes life impossible. The consequences have been devastating with peoples' lives uprooted.

Since Gaza and the West Bank were occupied in 1967, Israel expelled tens of thousands of Palestinians overall. In Hebron alone, thousands of residents and merchants were removed or had no option but to leave the City Center because of Israel's "principle of separation" policy.

Hebron is important as the West Bank's second largest city, the largest in the territory's south, and the only Palestinian city with an Israeli settlement in its center. It's concentrated in and around the Old City that once was the entire southern West Bank's commercial center. No longer.

For many years, Israel severely oppressed Palestinians in Hebron's center. It partitioned the city into northern and southern parts and created a long strip of land for Jewish vehicles only. In addition, in areas open to Palestinians, they're subjected to "repeated detention and humiliating inspections" any time, for any reason, and it worsened after the 1994 Baruch Goldstein massacre of Muslim worshipers in the Tomb of the Patriarchs. Israel's military commander ordered many Palestinian-owned shops closed that were the livelihoods for thousands of people. In addition, he condoned frequent settler violence as a way to remove Palestinians from their own land. It worked.

A combination of restrictions, prohibitions and deliberate harassment devastated Hebron's residents. They lost their homes, land, businesses and freedom. ACRI and B'Tselem documented it in the Old City and Casbah areas where most Israeli settlements are located and Palestinians face the harshest conditions and restrictions on their movements. As a result, they were removed or had to leave, and what was once "the vibrant heart of Hebron (is now) a ghost town."

A senior Israeli defense official explained the scheme that's pretty common knowledge today. He called it "a permanent process of dispossessing Arabs to increase Jewish territory." Distinguished Israeli historian, Ilan Pappe, calls it state-sponsored ethnic cleansing that's been ongoing since Israel became a state in 1948. B'Tselem-ACRI document the practice in Hebron's once viable City Center.

At least 1014 Palestinian housing units (41.9% of the total in the area) were vacated by their occupants. Another 659 apartments (65% of the total) were as well during the second Intifada. In addition, 1829 Palestinian businesses (76.6% of them all) were lost. Of the total, 1141 (62.4% of the total) closed after the year 2000, 440 or more by military order. ACRI and B'Tselem believe Palestinian apartment abandonments were even higher than reported because neighborhoods near settlements collapsed and housing and living costs declined dramatically there. Poor families took advantage. Unable to afford more costly housing, they left distant parts of Hebron for Old City neighborhoods where they occupied vacated houses.

Overall, the affects were devastating - job loss, poor nutrition, rising poverty, growing family tensions from prolonged confinement, severe harm to education, welfare and health systems, and a mass exodus away from areas near settlements resulting in lost homes and businesses. To this day, nothing has changed, there's no sign it will any time soon, and things, in fact, got worse.

Israeli security forces protect settlers who freely attack Palestinians with impunity. Offenses include physical assaults and beatings (at times with clubs), stone throwing, and hurling refuse, sand, water, chlorine, and empty bottles. Settlers freely loot Palestinian shops and commit acts of vandalism against them and other owner property. Killings also occur as well as attempts to run over people with vehicles, chop down fruit trees, poison water wells, break into homes, and pour hot liquids on Palestinian faces. IDF forces are positioned everywhere in the area. They witness everything and ignore it.

Soldiers also commit violence and use excessive force as do police. In addition, they engage in arbitrary house searches at all hours of the day and night, seize houses, harass, detain randomly and conduct humiliating searches and harsh treatment overall. These actions violate international and Israeli administrative and constitutional law. They persist nonetheless.

In Gaza it's even worse. Life there was never easy under occupation, but conditions worsened markedly after Hamas' surprise January 2006 electoral victory. Israel refused to recognize it. So did the US and the West. All outside aid was cut off, an economic embargo and sanctions were imposed, and the legitimate government was isolated. Stepped up repression followed along with repeated IDF incursions, attacks and arrests. Gazans have been imprisoned in their own land and traumatized for months. No one outside Palestine cares or offers much aid, and things continue to deteriorate.

Hamas is isolated, assaulted and called a "hostile entity." Then on September 19, 2007 sanctions were tightened, electricity and fuel was reduced and so were supplies of food, medicines and other essential items. Tighter border crossing restrictions were also imposed on an area already devastated by years of repression.

Its industrial production is down 90%, and its agricultural output is half its pre-2007 level. In addition, nearly all construction stopped, and unemployment and poverty exceed 80%. Shops then ran out of everything because Israel allows in only nine basic materials, their availability is spotty, and some essentials are banned, like certain medicines, and others restricted like fruit, milk and other dairy products. Before June 2007, 9000 commodities could be imported. Today, it's only 20, people don't get enough food, and the situation is desperate.

Then there's the matter of power without which Gaza shuts down. The Strip needs 230 - 250 daily megawatts of electricity. Its only power plant supplies around 30% of it, but people in central Gaza and Gaza city are totally dependent on what can't be supplied if industrial diesel fuel the plant depends on is cut off. The result is critically ill people are endangered, hospitals can't function, bread and other baked goods can't be produced without electricity to power ovens, food is already in short supply, so is fresh water, and sanitation conditions are disastrous.

The situation may now worsen following Israel's High Court January 30, 2008 decision in which it upheld government sanctions on Gaza and its right to restrict fuel and electricity. Here's what's planned on top of already imposed cuts. Starting February 7, further reductions will be made incrementally according to a plan submitted to the Court - 5% on three of ten lines supplying electricity to Gaza for a total of 1.5 megawatts through around February 21. An additional 25 megawatts have already been cut because of diesel fuel reductions to Gaza's sole power plant. The result is rolling blackouts, hospitals in crisis, and sewage treatment plants, water pumps and other vital services can't operate. Transportation is also disrupted. The situation is critical, Israel won't address it, these punitive measures violate international law, and the world community is dismissive.

Egypt, however, may provide belated relief. On March 21, the pro-government Al-Ahram newspaper reported that Cairo is expected to build a power line to supply about 150 megawatts of electricity to the Strip and become its main supplier. A senior Egyptian electricity ministry official apparently confirmed it by indicating the Islamic Development Bank agreed to finance the project that will link El-Arish in Sinai with Gaza.

In addition, an Egyptian oil minister issued "urgent" directives for his country to provide natural gas to the Territory and help develop offshore Palestinian gas fields that British Gas Group (BG) estimate hold 1.3 trillion cubic meters in proved reserves worth nearly $4 billion. For its part, Israel wants to cut all ties with Gaza and apparently finds the new arrangement acceptable or at least won't prevent it. However, it remains for it to be implemented, Gaza remains under siege, and conditions on the ground are at crisis levels.

East Jerusalem is also victimized by neglect and discrimination even though Israel granted its Palestinian population "permanent resident" status after its 1967 occupation. International law is clear, and Israeli law as well obligates the government to treat the population equitably and afford them all services and rights Israelis get, aside from the right to vote in national elections.

Israel refuses and for the past four decades has systematically neglected Palestinian Arabs as part of a discriminatory policy to drive them from the city and secure a Jewish majority in it. As a result, East Jerusalem residents suffer severe distress, conditions continue worsening, and life for them is an unending cycle of poverty, neglect, shortages and repression. In 2003, Central Bureau of Statistics data showed 64% of Palestinians in the city lived in poverty compared to 24% of Jewish families. It was even worse for children - 76% of Palestinians compared to 38% of Jews.

Other examples of abuse and neglect are also common:

-- Palestinians aren't allowed building permits for new construction; in rare instances when they're allowed, permit fees are too high to be affordable for nearly everyone;

-- their lands continue to be expropriated for new Jewish neighborhoods and settlements;

-- in contrast, Jewish areas get generous construction and infrastructure investment;

-- desperate Palestinians resort to their own devices, erect homes on their own land, yet live in fear of frequent demolitions that are patently illegal;

-- East Jerusalem sanitation facilities are sorely lacking; sewage and drainage infrastructure is grossly inadequate, antiquated and poorly maintained; the result is frequent sewer flooding and harmful sanitary conditions that are exacerbated during bad weather; in addition, trash goes uncollected and piles up in streets;

-- infrastructure is in disrepair, public parks and recreational facilities don't exist, the postal service barely functions, and most Arab neighborhoods get no fresh water;

-- educational facilities are lacking; a severe classroom shortage exists, and only half of the city's children are enrolled in municipal schools that are overcrowded, poorly equipped and unsafe;

-- the toll on Palestinians is horrific in many ways: family relationships are damaged; violence in them is common; school dropouts are high; jobs are scarce; crime and drug use rises; and health and nutritional problems are severe; in spite of overwhelming needs, welfare services are inadequate, near collapse and one consequence is thousands of children and youths are in acute distress and at high risk;

-- police and security force brutality exacerbates the hardships; harassment is common and so is unrestrained violence; Palestinians are terrorized, harmed, frequently killed, and no one outside the Territories seems to notice or care.

The Right to Privacy

Israel has no formal constitution. It relies instead on 11 Basic Laws. Section 7 (D) states that "there shall be no violation of the confidentiality of conversation." Authorities ignore it, and data show police wiretapping abuses are common, thus violating the right to privacy.

By law, police must formally request a court order to wiretap. Rarely are they refused, and in 2007 a Knesset committee investigated the issue. In November 2007, a new bill was drafted concerning the transfer of data from communications companies to the police for use in criminal investigations. It provides wide latitude, and ACRI calls the potential for privacy violations enormous and possibly unprecedented. Protests were lodged against the original bill, and they led to important changes toning down the initial language.

Privacy issues also affect job applicants and employees, can be abusive, and individuals get no choice - accept them, or else. They:

-- demand job applicants sign a complete waiver of medical confidentiality;

-- allow employer surveillance of telephone conversations and e-mail correspondence;

-- mandate compulsory polygraphs for applicants and employees; and

-- use video cameras for workplace monitoring.

Criminal Justice

The right to counsel is essential for anyone charged with a crime. Israel's Public Defender's Law (1995) stipulates that detainees and defendants unable to afford help are entitled to state-funded representation, but only for crimes with prison terms of five or more years. This was amended in December 2006 to prohibit prison sentences for unrepresented defendants.

Israel's legal system also establishes the right to a fair trial and other safeguards. Yet, erosion began in 2007 under a temporary Knesset January 2007 law infringing on detainees rights: they can be denied face-to-face contact with an attorney; prevented from meeting with family members; denied the right to be present at hearings on their charges; interrogated without counsel; and unreasonably cut off from the outside world that creates a feeling of isolation.

In June 2007, the Office of the Public Defender published a report on detention and incarceration conditions in Israeli police internment facilities. As in previous years, it was alarming and indicated basic human rights violations, some extreme. An Israeli Bar Association March 2007 report reached the same conclusions:

-- severe overcrowding and highly restrictive living space in two-thirds of detention facilities examined; some cells were only two square meters or less;

-- larger cells held up to 10 prisoners;

-- sanitary and hygiene conditions were poor as well as ventilation; some cells lacked windows;

-- wall peeling and crumbling from dampness and mold were common;

-- prisons had filthy and foul-smelling toilets and showers as well as infestations of cockroaches, rats and other vermin;

-- lighting was poor and prisoners often sat in dark, suffocating, fetid cells; the wings of one prison were described as unsuitable for human habitation; and

-- complaints were common about violence at the hands of guards and wardens; collective punishment was also inflicted and overall treatment was degrading, humiliating and invasive.

Police brutality is a major issue, just as it is in the US. The authorities have great power and too often abuse it with impunity. Complaints often are unaddressed. The problem is systemic, it's within the Police Service, and specifically in the Police Investigations Department of the Ministry of Justice (PID).

PID was established in 1992 and mandated to investigate complaints against police in cases of excessive force. However, investigations are rare, and seldom ever are there prosecutions, regardless of the complaint's severity and almost never against senior officers with authority. The lack of effort assures continued brutality because officers know they can get away with it.

The Destabilization of Democracy

The Israeli Democracy Institute (IDI) surveyed Israeli citizens, published its "Democracy Index" in June 2007, and included some disturbing findings in it. Its survey showed:

-- less than half of respondents believe public speakers have the right to criticize the government;

-- only 54% favor freedom of religion and a bare 50% feel Arabs and Jews should have equal rights;

-- 87% rate Jewish-Arab relations poor or very poor;

-- 78% oppose having Arab parties or ministers join Israel's government;

-- 43% believe Arabs aren't intelligent;

-- 55% feel the government should encourage Arab emigration; and

-- 75% think Arabs favor violence.

Overall, the results showed democratic values eroding since the IDI 2003 survey. It doesn't happen in a vacuum. It's part of the cultural environment: from the home, within families, at school, through the media and other social contexts from which attitudes develop. It's also gotten from the law, the way Israeli courts interpret it, particularly the High Court of Justice, and subsequent legislative efforts to bypass Court rulings and trample on human rights. The problem is pervasive and worsening as Israel becomes a very hostile place, much like America. And it doesn't just affect Israeli Arabs who get no justice.

ACRI cites the role of Daniel Friedman since he became Israel's Justice Minister in February 2007. He's since proposed a number of initiatives and "reforms" that threaten to undermine the legal system and High Court in particular. One proposal was to change how justices are chosen in a way that would curtail their independence and politicize the entire process. In August, he then prepared a draft bill to limit public petitioner rights to the High Court, especially for human rights organizations.

ACRI ends its lengthy and disturbing report as follows: History shows that "parliaments tend to violate human rights in times of crisis. It is precisely at these moments, however, that (it's vital) to preserve the judiciary's role in the system of checks and balances." Israel claims to be a democracy. It has an odd way of showing it, and when it comes to its Arab citizens, it's nowhere in sight.

Global Research Associate Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Mondays from 11AM to 1PM US Central time for cutting-edge discussions on world and national topics with distinguished guests.