Wednesday, October 1, 2008

Senate passes $700B rescue; House votes lured

Senate passes $700B rescue; House votes lured

By JULIE HIRSCHFELD DAVIS and CHARLES BABINGTON

Go To Original

After one spectacular failure, the $700 billion financial industry bailout found a second life Wednesday, winning lopsided passage in the Senate and gaining ground in the House, where Republicans opposition softened.

Senators loaded the economic rescue bill with tax breaks and other sweeteners before passing it by a wide margin, 74-25, a month before the presidential and congressional elections.

In the House, leaders were working feverishly to convert enough opponents of the bill to push it through by Friday, just days after lawmakers there stunningly rejected an earlier version and sent markets plunging around the globe.

The measure didn't cause the same uproar in the Senate, where both parties' presidential candidates, Republican John McCain and Democrat Barack Obama, made rare appearances to cast "aye" votes, as did Obama's running mate, Sen. Joe Biden of Delaware.

In the final vote, 39 Democrats, 34 Republicans and independent Sen. Joe Lieberman of Connecticut voted "yes." Nine Democrats, 15 Republicans and independent Sen. Bernie Sanders of Vermont voted "no."

President Bush issued a statement praising the Senate's move. With the revisions, Bush said, "I believe members of both parties in the House can support this legislation. The American people expect and our economy demands that the House pass this good bill this week and send it to my desk."

The rescue package lets the government spend billions of dollars to buy bad mortgage-related securities and other devalued assets held by troubled financial institutions. If successful, advocates say, that would allow frozen credit to begin flowing again and prevent a deep recession.

Even as the Senate voted, House leaders were hunting for the 12 votes they would need to turn around Monday's 228-205 defeat. They were especially targeting the 133 Republicans who voted "no."

Their opposition appeared to be easing after the Senate added $110 billion in tax breaks for businesses and the middle class, plus a provision to raise, from $100,000 to $250,000, the cap on federal deposit insurance.

They were also cheering a decision Tuesday by the Securities and Exchange Commission to ease rules that force companies to devalue assets on their balance sheets to reflect the price they can get on the market.

There were worries, though, that the tax breaks would cause some conservative-leaning "Blue Dog" Democrats who voted for the rescue Monday to abandon it. The bill doesn't designate a way to pay for many of the tax cuts, and Blue Dogs typically oppose any measure that swells the deficit.

"I'm concerned about that," said Rep. Steny Hoyer, D-Md., the majority leader.

Raising the deposit insurance limit — along with the SEC's accounting change — helped House Republicans claim credit for some substantive changes. And with constituent feedback changing dramatically since Monday's shocking House defeat and the corresponding market plunge, lawmakers' comfort level with the package increased markedly.

Rep. John Shadegg, R-Ariz., who voted "no" on Monday, said he was leaning toward switching, and Rep. Steve LaTourette,R-Ohio, said he was "getting there." Several others were weighing a flip, said Republican officials who spoke on condition of anonymity because the lawmakers had not yet announced how they would vote.

Leaders in both parties, as well as private economic chiefs everywhere, said Congress must quickly approve some version of the bailout measure to start loans flowing and stave off a potential national economic disaster.

"This is what we need to do right now to prevent the possibility of a crisis turning into a catastrophe," Obama said on the Senate floor. In Missouri, before flying to Washington to vote, McCain said, "If we fail to act, the gears of our economy will grind to a halt."

Critics on the right and left assailed the rescue plan, which has been panned by their constituents as a giveaway for Wall Street, and has little obvious direct benefit for ordinary Americans.

Sen. Jim DeMint, R-S.C., a leading conservative, said the step was "leading us into the pit of socialism."

Sanders, a self-described socialist, said the rescue was fundamentally unfair.

"The masters of the universe, those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse," Sanders said, and are demanding that the middle class "pick up the pieces that they broke."

Still, proponents argued that the financial sector's woes were already being felt by ordinary people in the form of unaffordable credit and underperforming retirement savings and without the bailout would soon translate into even more economic pain for working Americans, including more job losses.

"There will be no balloons or bunting or parades," when the rescue becomes law, said Sen. Chris Dodd, D-Conn., the Banking Committee chairman. But lawmakers will have "the knowledge that at one of our nation's moments of maximum economic peril, we acted — not for the benefit of a particular few, but for all Americans."

Sen. Judd Gregg, R-N.H., said the intense, at times contentious, 11-day round of bipartisan talks to craft the bailout — which followed dire warnings of impending economic meltdown from Bush's economic chiefs to congressional leaders — was an "extraordinary experience."

"This is the way government's supposed to work, folks, and it did," Gregg said.

The Senate specializes in high-stakes legislating by enticement, and the long list of sweeteners it added was designed to attract votes from various constituencies.

In addition to extending several tax breaks popular with businesses, the bill would keep the alternative minimum tax from hitting 20 million middle-income Americans and provide $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana.

Tax cuts new and old are favorites for most House Republicans. Help for rural schools was aimed mainly at lawmakers in the West, while disaster aid was a top priority for lawmakers from across the Midwest and South.

Another addition, to extend the deductibility of state and local taxes for people in states without income taxes, helps Florida and Texas, among others.

Increasing the deposit insurance cap was a bid to reassure individuals and small businesses that their money would be safe if their banks collapsed. It was particularly geared toward small banks that fear customers will pull their money and park it in larger institutions seen as less likely to fold.

The FDIC would be allowed to borrow unlimited money from the Treasury Department through the end of next year as a way to cover the increased insurance limit. If used, it would be the first time the agency has tapped Treasury for a loan since the early 1990s.

The rescue bill hitched a ride on a popular measure that gives people with mental illness better health insurance coverage. Before passing it, senators voted by an identical 74-25 margin to attach the massive bailout and the tax breaks.

Common Man News 10/2008


News for the common man because the elite already know!


10/31/2008

Broken Securities Industry Still Has $20 Billion to Pay Bonuses

GDP, consumer spending contract as US plunges into recession

Call This a Crisis? Just Wait

Message Of Massacre Lives On For Palestinians

Chevron profits hit new record of $7. 89 billion

Bailout funds being spent in ways Congress never foresaw

CIA officers could face trial in Britain over torture allegations

Undervotes: The Scary Canary

Election Protection By Amy Goodman

The Triumph of Ignorance: How Morons Succeed in U. S. Politics

"A Second 9/11": An Integral Part of US Military Doctrin

A win for purged Colorado voters

BPA Ruling Flawed, Panel Says FDA Ignored Scientific Evidence of Harm, Report Finds

Women Buying Health Policies Pay a Penalty

Sharpest Consumption Drop Since 1980 Pushes GDP Negative

Running Against the Republicans AND the Democrats: Why I’m Campaigning for Cindy Sheehan

The New Technology of Repression

Army Seeks Help With Rising Suicide Rate Among Soldiers

A Question for A. I. G.: Where Did the Cash Go?

Banks to Continue Paying Dividends With Bailout Money

Oil company bonanza continues with record profits for Shell and Exxon


10/30/2008

Exxon Mobil: Biggest profit in U. S. history

Expanding War, Contracting Meaning

US Federal Reserve cuts interest rates as recession deepens

US defense secretary expands pre-emptive war doctrine to include nuclear strikes

More than 3,000 registered Coloradans barred from voting

Stop GOP Vote Suppression

Meltdown in Paradise: Hawaiian Aspects of the Wall Street Disaster

Millions of Iraqis at risk from contaminated water, says Red Cross

Police fear riots if Barack Obama loses US election

Bio Lab in Galveston Raises Concerns

"They’re Ba-ack..."

10/29/2008

U. S. pulls the plug on the world

Tough times: Congress Grew 13 Percent Richer In 2007

Two Parties, One Imperial Mission The US Empire will Survive Bush

The “dirty little secret” of the US bank bailout

Beginning of Hyperinflation

Uses for $700 billion bailout money ever shifting

Gates Expands Bush Doctrine

The Ugly America

Where have all the water fountains gone?

California high-risk pool for medically uninsurable helps fewer residents

There’s a Huge Wave of Inflation Coming Toward Us

Beyond Privacy, Toward Equality

First-Ever Layoffs Loom at Postal Service

Europe’s secret plan to boost GM crop production

US Raids Ignore International Law


10/28/2008

Credit Cards: The Plastic Trap

Home prices fall by sharpest annual rate ever

With time short, Bush pushes EPA to relax power-plant rule

Uniting & fighting back is no longer a choice; it’s a matter of survival

US carries out fresh air strike in Pakistan

US military forces attack Syrian village, killing eight

Pentagon Panel: Biden Was Right, Prep for ’Crisis’

Cost of crash: $2,800,000,000,000

Alan Shrugged

Sen. Stevens guilty on seven counts of corruption

Wal-Mart has perfected the art of union-busting, researcher says


10/27/2008

Warnings of deep recession as US layoffs spread coast-to-coast

California Foreclosures Soar By 228%

Nouriel Roubini: I fear the worst is yet to come

Wall Street’s Trojan Horse

Alan Greenspan: Public Enemy Number One

Putting the Pentagon on the Auction Block

Federal judge slaps voters in face, energizes patriots

Bush Administration to Bypass Reporting Law

So When Will Banks Give Loans?

US forces kill eight in helicopter raid on Syria


10/26/2008

Down For The Count, "The whole system is contracting"

The Grand Merger!

Chinese Yuan the World’s New Reserve Currency

The Housing Bubble & Its Crash were Engineered by the US Government, the Fed & Wall Street

US federal appeals court stays Troy Davis execution

Signs of slowdown spiral around the world $16. 3 trillion in stock value lost since Sept. 1

How Banks Push Troubled Borrowers Deeper Into Debt

Are You Ready for the Worst the Economy Has to Offer?

Job Losses Accelerate, Signaling Deeper Distress

EPA weakens new lead rule after White House objects

Bush Intervenes in Ohio Voter Dispute

For Whom the Bailout Tolls

Iraq in Hell


10/24/2008

A Wasted Vote by Chuck Baldwin

Eastern European economies face bankruptcy

US layoffs mount, home foreclosures rise

Union Card or Master Card -- How a Nation of Workers Became a Nation of Debtors

Early Voting Sees Reports of Voter Intimidation, Machine Malfunctions

Credit Suisse reports £670m loss

Early voting trickle quickly becoming a torrent

Indiana judge rules against closing early voting sites

50 percent of all species could disappear within the lifetimes of people now living on Earth

Greenspan Concedes Error on Regulation

Redistributing To The Rich

Wealth gap creating a social time bomb

OPEC slashes production; crude continues to tumble


10/23/2008

US foreclosure filings up 71 percent in 3Q

Big Oil’s Last Stand

More bailout contracts contain blacked out portions

ACLU Demands Information On Military Deployment Within U. S. Borders

"Under water" mortgages are growing threat to U. S.

Fewer prescriptions filled as economy worsens

Monthly job losses cut across 41 states

Yahoo firing 1,500 workers; 3Q profit falls 64 pct

Wachovia has $23. 9 billion loss on writeoff, mortgages

Maybe the rich are the problem

An expense account to envy: taxpayers foot the tab

The Rules Are Set in Stone For the Rabble

Elections USA: Do They Matter? 100 million nonvoters send a stinging message of disenchantment

Arms for the Poor


10/22/2008

OECD report ranks US third worst in inequality and poverty

Police prepare for unrest

Sen. Warner Supports Domestic Use of Military

Bush Authorizes Record Defense Budget

Foreclosure crisis falls hard on veterans

Al-Qaeda Leaders Root for McCain

The Global War on Terror Report Card

No Child Left Behind Fails Us All

Fed injects $540bn into markets

Homeless numbers ’alarming’

Layoffs spreading across corporate America

The Idiots Who Rule America


10/21/2008

Bubbles Are Bursting Worldwide

Paulson panics as UK, Germany find own solution

U. S. willing to discuss international financial governance

Interpol Details Plans For Global Biometric Facial Scan Database

"We Have to Share This Pain"

Iceland’s Economic Meltdown Is a Big Flashing Warning Sign

Could the US election be stolen?

Machine Problems Plague 1st Day Of Early Voting


10/20/2008

World Peace is More Than Just the Silencing of the Guns

Pakistani offensive creates refugee crisis

Freddie Mac secretly paid Republican firm to kill regulation

US bank losses wipe out years of paper profits

US Supreme Court denies Mumia Abu-Jamal’s appeal for new trial

Hard Times

Block the Vote

The Rising Body Count on Main Street; The Human Fallout from the Financial Crisis

Food Stamp Challenge prompts belt tightening

Some early W. Va. voters angry over switched votes

Wall Street banks in $70bn staff payout

Thousands Face Mix-Ups In Voter Registrations

Financial Meltdown: The Greatest Transfer of Wealth in History

The torture time bomb

Attack on Iran Off the Table?

Nader: Tax Wall St. for bailout

Germany passes $675bn bailout

America’s Coup D’État in the Making

Mass Actions on the 6th Anniversary of the Iraq War -- March 21, 2009


10/17/2008

Single-Family Home Starts in U. S. Fall to 26-Year Low

How Paulson pressed banks to sign intervention deal

Asian markets plummet amid fears of global recession

NJ flu-shot mandate for preschoolers draws outcry

Birmingham on the brink of bankruptcy

Home Prices Seem Far From Bottom

Infant Deaths Drop in U. S. ranked 29th lowest in the world

Americans Unwilling to Face Reality

Capitalism Without Capital? By Ron Paul


10/16/2008

Nearly 30 percent of US families subsist on poverty wages

How the financial aristocracy laid down the law

Stock markets fall as global recession takes hold

Why the Bailout Won’t Do Anything for the Root of the Problem

Final looting of America by outlaws in D. C.

Report Details Bush Officials’ Partisan Trips

Mark Shapiro’s "Exposed": Deregulating Chemicals

Grim outlook on U. S. profits and jobs

Fed Opens Cash Spigot to Overseas Credit Markets

No Dog in this Fight

When the Federal Government Fails the People

The 56 Trillion Dollar Deficit

U. S. Could Guarantee $2 Trillion For Banks

Steering Committee To Seek Prosecution of Bush For War Crimes

The ’unitary executive’ question

Our Rights Are Under Attack

Blackwater assists Law enforcement in fugitive search

Bush Declares Exceptions to Sections of Two Bills He Signed Into Law

Crisis is the fruit of policies that encourage low wages


10/15/2008

The stock market’s false rallies—what history tells us

No sacrifice for the bankers

Hospitals in the American South 70% More Likely to Kill You

Federal deficit hits record $455 billion

Bush Exceeded Power by Withholding Cheney Comments, Report Says

The Supreme Court has declined to hear Troy Davis’ case.

Study: Many cancer patients forgoing care because of cost

Disappearing pensions make Americans’ lives less secure

US Journalists & War-Crime Guilt

Bush Doctrine Becomes DoD Dogma

Bush White House ’endorsed torture’ In Secret Memos

‘Collateral Damage’ Not Much Different From Targeted Killing

U. S., Iraq won’t reach accord on troops this year


10/14/2008

Naomi Wolf examines the Neocon orchestrated 10/1/2008 coup

The final shoe on American consumerism is about to fall

Big Banks Get $125 Billion Cash Going Away Gift

Michigan to combat claims of possible suppression of voters

U. S. Investing $250 Billion in Banks

Banks dictate conditions of US financial bailout

Bullion Shortage and Spot Prices Tell Two Different Stories

The Fallacy of the 401(k)

Ohio GOP plays voter fraud card


10/13/3008

A $516 trillion derivatives ’time-bomb’

The U. S. Federal Reserve to flood financial markets with dollars

The October Surprise: Global Panic

Anatomy of the American Financial Crisis: How It is Turning into a Worldwide Crisis

How to Wreck the Economy

How Participatory Budgeting Can Transform Politics

The Truth About ACORN’s Voter Registration Drive

White House Overhauling Rescue Plan

Insider’s Projects Drained Missile-Defense Millions

GM, Ford, Chrysler Face Bankruptcy Risk on Crisis, S&P Says

Berlusconi Says Leaders May Close World’s Markets

US controls bird flu vaccines over bioweapon fears

Anti-democratic nature of US capitalism is being exposed

Shelters and Soup Kitchens Hold Crisis Front Lines

GOP attacks on American voters turn desperate, ugly and dangerous

Pentagon Wants $450 Billion Increase Over Next Five Years

Justice Department scandal almost buried by financial crisis

U. S. Weighs Backing Bank Debt

Senator Leahy Concerned about NorthCom’s New Army Unit

General Motors' market cap plunges to 1929 level


10/10/2008

World financial crisis leads to auto industry layoffs across Europe

More than 300 workers arrested in immigration raid on South Carolina plant

Subprime Suspects

Inside Account of U. S. Eavesdropping on Americans

Mainstream Figures Endorse Paul’s Abolish Fed Bill

Bailout Futile As America Crumbles

Right To Healthy Foods Undercut By Nanny State

States’ Actions to Block Voters Appear Illegal

Is Colorado the next Florida?

Medicare drug options shrink for low-income members

New surveillance program will turn military satellites on US

Is the Federal Reserve Engaged in Acts of Economic Warfare Against America?

Wall Street seen adding to global rout


10/09/2008

US government may take part ownership in banks

Special prosecutor appointed to investigate US attorney firings

Continuing US air strikes in Pakistan’s tribal agencies

US election officials believe they have uncovered massive attempted voter fraud

Russian stock exchanges shut down until Friday as prices plummet

U. S. Security Firm Indicted for Fraud in Afghanistan

Is Posse Comitatus Dead?

Predatory Lenders’ Partner in Crime

AIG Gets More Government Bailout Cash

Surveillance’s Reach Revealed: Md. Police Put Activists’ Names On Terror Lists

Documents say American detainee near insanity in a U. S. military brig


10/08/2008

IMF Says World Economy Heading for ’Major Downturn’

Heating costs to jump 15 percent this winter: government

S&P 500, Dow Post Worst Retreats Since 1937

Pensions lose $2 trillion

Cindy Sheehan Reveals Plan for New National Party

Thousands of Troops Are Deployed on U. S. Streets Ready to Carry Out "Crowd Control"

"Secret" Executions Being Carried Out in Saddam’s Old Intelligence Headquarters

Barack Obama unveils 13-minute Keating Five ’documentary’

Our secret war in Pakistan

Florida Primary Recount Reveals Grave Voting Problems One Month Before Presidential Election

’Your company is bankrupt, you keep $480m. Is that fair?

Fed Considers Plan to Buy Companies’ Unsecured Debt

Fed to lend to companies in emergency move

The Dirty Details of Voter Purges

Sinking feeling as fall in jobs spreads wider

Pakistan facing bankruptcy

After Bailout, AIG Execs Head to California Resort

GOP Judges Aid White House Cover-up


10/07/2008

Largest single act of class warfare in the modern history of this country

Demonstrate at the Presidential Debate at Hofstra University in Hempstead, N. Y. On Oct. 15th

Full of Doubts, U. S. Shoppers Cut Spending

Credit doors are closing

Worst-case scenario is approaching rapidly

UK Stock market suffers its worst fall in history

The US Simply Doesn’t Get It

It’s a Worldwide Crash By Jim Cramer

Down the Road to Serfdom

We’re on "the edge of the abyss

Rumsfeld Updated Army’s Continuity of Operations Plan before 9/11

Iraq to Give 82% of Proven Oil Reserves to International Oil Companies

Corporations Have Big Plans to Profit from Global Warming

The Wall Street Mega Bailout: Bad News for the World’s Hungry

When you are denied health insurance Sometimes even healthy people can’t get a policy

Unions Demand Responses from the IMF and World Bank to Worsening Financial & Food Crisis

Voting goes to court Registration lawsuits could shape election

1 in 4 mammals faces extinction, scientists say

Leading Supreme Court docket: Immunity from lawsuits for drug companies


10/06/2008

When is a Holocaust Not a Holocaust? When the perpetrators call it a victory.

Haiti: In Solidarity with its Five Freedoms

Fed Doubles Cash Sales to $900 Billion, Plans More Steps to Unlock Markets

Money-Market Rates Climb as Banks Hoard Cash, Crisis Deepens

Global Stocks Retreat, Led by Banks, as Credit Crisis Widens

Bank on this: bank failures will rise in next year

The Problem Is Still Falling House Prices The bailout bill doesn’t get at the root of crunch

Banks are hoarding cash, raising borrowing costs and slowing economies

Iceland is on the brink of collapse

Former IMF economist warns of global recession

Europe calls for global summit on bank crisis

Food Stamp Participation Increases as Economy Lags

Prices for 16 basic food items shoot up in third quarter

Wall Street Financiers Cash in on Crisis

The Problems of Latin America and the Caribbean by Noam Chomsky

Voter Suppression Battle In Northwest Indiana

Foreclosures and the Right to Vote

Spying on the Future The U. S. Intelligence Community as Seers Without Sizzle


10/05/2008

Report blames U. S. trade gap for 5. 6 million lost jobs

Hidden unemployment rises to 11%, highest in 14 years

Financial companies borrow record amount from Fed

Get Your Dollars Out Now! FAST!!!

Fannie Mae forgives loan for woman who shot herself

FBI given new rules for investigations at a cost to constitutional protections

Officials Refuse to Provide Details on Secret Previous Bailout

U. S. Treasury to Hire Up to 10 Asset Management Firms

Bush Provokes Fear to Push for Bailout

Born-Again Democracy

Voter Purges Publications

Pentagon Hands Iraq Oil Deal to Shell

One Million Weapons to Iraq; Many Go Missing

U. S. to Fund Pro-American Publicity in Iraqi Media


10/03/2008

House passes $700B Wall Street bailout

The Bailout in Plain English

The Senate bailout bill: How the Democrats do the bidding of Wall Street

Amy Goodman on the Threat to Public Dissent

The New American Century: Cut Short By 92 Years

Bailout Focus On House as Crisis Spreads

France calls financial crisis summit

Will the Pentagon Be the Next U. S. Institution to Crash?

Republicans Challenge 6,000 Voter Registrations in Montana

Photographers Document Dissent & Repression In Denver & St. Paul

For Those on the Soup Line, No Rescue Plans

Red Flag On Purging Voter Rolls

600,000 jobs lost - and counting

Make the peace voter a powerful political force

Middle Americans unite against the great bank rescue


10/02/2008

Home Prices in 20 U. S. Cities Declined 16. 3% in July

Manufacturing shrinks to lowest level since 2001

U. S. dealership closures to increase into ’09: study

Ford sales were down 33. 8%-Ford, 22. 5%-Lincoln, 43. 2%-Mercury, 51. 8%-Volvo

McCain urges Bush to bypass Congress

Human costs of food crisis

No "Bailout" for The World’s Poorest

Capital Crisis Will Wreck Both Parties

Bailing Out The Oil Market

Wall Street and the Return of the Repressed

College Campuses Now a Hotbed for Developing Frightening New Weapons

Stocks decline on 7 year high unemployment, factory reports

Don’t Make Working People Bail Out Wall Street : Sen. Bernie Sanders

Amy Goodman First Journalist to Win “Alternative Nobel

Stock losses take heavy toll on retirement savings

FBI Prevents Agents from Telling ’Truth’ About 9/11 on PBS

Florida 2000 Redux? A New Law to Combat Voter Fraud Has Triggered a Spate of Lawsuits

As Profits Soar, Boeing Demands Concessions, Driving Machinists On Strike

British envoy says mission in Afghanistan is doomed, according to leaked memo

Senate passes $700B rescue; House votes lured


10/01/2008

Pro-War Group Offering Cash For Frats To Demonstrate At VP Debate

Taxation and the Printing Presses: Recipe for a Monetary Crisis and $5,000 gold

Americans Have Little To Be Proud Of

A Shattering Moment In America’s Fall From Power

Paulson will have no peer

The Bailout: Congress Endorses Conservative Nanny State

Counting Every Vote

Mussolini-Style Corporatism in Action: Treasury Conference Call on Bailout Bill to Analysts

Bailout’s Political Turmoil

Let Risk-Taking Financial Institutions Fail

The nation’s social bargain with the rich

You won’t believe where that $700-billion bailout figure came from

Congratulations, Corporate Crime Fighters! Coup Averted for Three Days

Banking Collapse Lands on America’s Schools

Early Voting in Ohio Begins

Bush Administration Adds $4 Trillion To National Debt

DOJ Report Implicates White House in US Attorney Firings

Department Of Defense Announces More Iraq Deployments

GOP Plans and Denials to Challenge Foreclosed Voters Examined

Violations Reported at 94% of Nursing Homes

Effort to Skirt Contracting Rules Unnerves Federal Workers

Senate To Vote On House Defeated Financial Rescue Plan

Prosecutor To Probe Firings Of U. S. Attorneys

GOP Consultant Subpoenaed in Case Alleging Tampering with 2004 Election

Bush Had No Plan to Catch Bin Laden after 9/11

The Anthrax Case Reopens: Why Did the FBI Let Fort Detrick Scientists Investigate Themselves?

U. S. ARMY TROOPS TO SERVE AS U. S. POLICEMEN?

Exercise readies first units for NORTHCOM assignment

Will Wall Street’s Meltdown Turn America Into a Police State?

Police Union Shirt Pokes Fun At DNC Protesters



Call the Senate Today Stop Bush's "No Banker Left Behind Act"

Call the Senate Today

Stop Bush's "No Banker Left Behind Act"

Having suffered a stunning defeat of their "Grand Theft Bailout" Bill on Monday, the Bush Administration, the banks and Wall Street are now coming back for their second try. They are used to directing the affairs of the country regardless of the will of the people. The U.S. Senate is expected to vote tonight, Wednesday evening, in favor of a nearly identical version. This is intended to force the House of Representatives to do the same when they return tomorrow, Thursday.

You can call the Capitol Switchboard at 800-473-6711 or 202-224-3121 to ask to be transferred to the offices of the Senators from your state.

Bush's "No Banker Left Behind Act" was defeated because of overwhelming public opposition. But now the politicians have come up with an easy answer. In an unprecedented step, Congress is virtually shutting down its incoming constituent email. They are installing the digital version of riot police, protecting the politicians from an enraged population that demands to be heard. Congress has acknowledged that it is receiving millions of emails from the people of the United States, all opposing this theft of $700 billion to be handed to the richest bankers. People who try to send emails are likely to receive error messages and their emails will not go through during "peak hours." Congress claims that this is a response to the overwhelming emails to keep their server from crashing; however, their server did not crash during the time they were receiving the most emails and they quietly instituted this program late Tuesday afternoon.

The U.S. Senate - this country's version of the House of Lords - is returning to do the work of the White House in league with the biggest bankers. Known as "millionaires club" because of the elite status of its members, the U.S. Senate is playing the same role that the King's House of Lords played in earlier times in British history, a political barrier created to protect the aristocracy from the wrath of the people.

The ANSWER Coalition is urging all of its members and supporters to call Congress, to email them at "off peak" hours, and to come directly to the U.S. Capitol on Thursday morning at 10 am so our voices can be heard at the People's Demonstration/Speakout. Congress can run but they can't hide from the wrath of the people. We won't let them.

Thursday's demonstration will take place at 10 am on the South side of the Capitol at Independence Ave. and New Jersey Avenues SE. For more information, see below or go to VoteNoBailout.org.

You can call the Capitol Switchboard at 800-473-6711 or 202-224-3121 to ask to be transferred to the offices of the Senators from your state.

Demonstration at
the Capitol Building


Thursday, October 2
at 10:00 am
Independence & New Jersey Ave. SE
South Side of the U.S. Capitol

Washington, D.C.

Initiated by VoteNoBailout.org, supported by the ANSWER Coalition and ImpeachBush

Click this link to join the endorsers' list.

Click this link to download a flyer for the protest

Your support is urgently needed to organize activities and distribute literature to make sure the people's victory not be overturned. Click this link to make a donation.

The VoteNoBailout.org website has attracted extensive support throughout the country. Over 170,000 letters were sent through the website to Congress within the last week. Click this link to send your letter to Congress.

We demand:

* An immediate moratorium on foreclosures, evictions and rent hikes.
* Extend unemployment benefits at full pay for everyone without a job.
* Open the books of the banks for public inspection
* Criminal prosecution of banking, finance, insurance and all other executives whose companies have benefited from the foreclosure crisis.
* An end to the wars on Iraq and Afghanistan, which cost $430 million per day.
* Hurricane and flood victims must receive full assistance and have the right to return to their homes.
* Creation and funding of jobs programs throughout the country to eliminate unemployment.

A.N.S.W.E.R. Coalition
http://www.answercoalition.org/
info@internationalanswer.org

National Office in Washington DC: 202-544-3389
New York City: 212-694-8720
Los Angeles: 213-251-1025
San Francisco: 415-821-6545
Chicago: 773-463-0311

..

Pro-War Group Offering Cash For Frats To Demonstrate At VP Debate

Pro-War Group Offering Cash For Frats To Demonstrate At VP Debate

Go To Original

In hopes of organizing a robust demonstration for the vice presidential debate this Thursday in St. Louis, the pro-Iraq War (and ostensibly pro-McCain) organization, Vets for Freedom, is resorting to offering local college fraternities hundreds of dollars if their members come and hold signs.

In an email obtained by the Huffington Post, Vets for Freedom field staffer Laura Meyer offered a fraternity at St. Louis University a "sizable donation" - plus free lunch - if it could use their pledges to demonstrate outside the VP debate.

"I was emailing you today," wrote Meyer, "because I am trying to find people who would be willing to hold up signs for a few hours in the afternoon this Thursday outside the VP debate site. It's only for a few hours and you can gain a lot from it.... first off, lunch for any guys who agree to volunteer will be on me. Secondly, they will get lots of media attention! My organization did a similar thing in Mississippi last week and a ton of them were on TV. Meaning, the guys could wear their [REDACTED] gear while holding up our signs and get attention for their frat. Also, they will get to hang out with a bunch of really cool Iraq and Afghanistan war veterans.

"Lastly, and here's the kicker.... if you guys can get us at least 20 volunteers for those few hours, my organization will make a sizable donation to your fraternity. If you use pledges you could look at it as 'free money and free publicity'. If this sounds like something you may be willing to help us out with, please let me know ASAP!"

Reached by phone, Meyer said the total amount of cash the frat could earn was between $200 and $250 for organizing 20-plus members. She also noted that the program was a success in generating publicity during last Friday's presidential debate.

Judy Mayka, a spokesperson for the national chapter, said that the practice of paying for demonstrators had been going on without their knowledge and would subsequently end.

"Obviously this was not a direction from national and we have contacted the Missouri staffers and volunteers and told them it is not appropriate in our policy," she said. "And those who choose to attend the vice presidential debate should not be compensated."

As for the payments made for volunteers during the Mississippi presidential debate, Mayka added: "We will be looking into that."

The practice of paying volunteers is perfectly legal, and having scores of rowdy pro-war supporters cheering on the backdrop of TV sets can be an effective way for Vets for Freedom to disseminate its message.

But keep in mind, some of the people demonstrating outside the VP debate had a choice to make: take the money from Vets for Freedom or subject themselves to a night of hazing and binge drinking. On Thursday, we will see how many chose the former.

Taxation and the Printing Presses: Recipe for a Monetary Crisis and $5,000 gold

Taxation and the Printing Presses: Recipe for a Monetary Crisis and $5,000 gold

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There's been much said about the fact Fed Chairman Ben Bernanke has been a devoted student of the Great Depression. In many ways, understanding the causes and dynamics of what caused the depression of the 1930s has been his life's work.

In 2002, Bernanke gave a speech titled, "Deflation: Making Sure ‘It’ Doesn’t Happen Here" (You can read the full text here.)

In that speech, you'll find some really amazing clues as to just how dangerous his approach to defending against deflation is, which is to just PRINT MONEY...

"Like gold, U.S. Dollars have value only to the extent that they are strictly limited in supply.

"But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. Dollars as it wishes at essentially no cost.

"By increasing the number of U.S. Dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a Dollar in terms of goods and services, which is equivalent to raising the prices in Dollars of those goods and services.

"We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation." (I've bolded for emphasis)

If this doesn't click for you please allow me to explain what he's really saying.

Bottom line: The U.S. government can tax the Dollars right out of your wallet. The government can do it at will... and there isn’t a thing you or I can do about it (other than convert those Dollars into something else before they get devalued, which is why I have been literally begging you and others to put physical gold in your IRA, 401K and in your investment portfolio with Finest Known 1-866-697-GOLD (4653) ext. 1406.

The thing you have to always keep in mind is that inflation is an insidious hidden tax. Whenever the U.S. government prints Dollars from thin air, it lessens the value of the Dollars in your bank account and that's what this entire $700 Billion Bail Out is all about. For that matter, that's what the Trillions of Dollars we're printing to subsidize foreign nations, the wars in Iraq and Afghanistan. It's all funny money with no backing just being printed.

Literally the value of the U.S. Dollar is being drained. The monetary growth rate is normally 3-4% a year. We're now growing money at a rate of 25% in a single year, not counting off the books spending like the war.

Imagine if you could print money and pay for your living expenses at will. This is why the value of the U.S. Dollar has been collapsing these past years. This $700 billion (really $1.3 Trillion) bail out will essentially devalue the Dollar by another 25% to 30% over the next 2 years -- if were lucky. The danger, of course, is that we need more than one bail out and investors worldwide would see the reckless printing of money and start dumping Dollars. The risk of this is a monetary collapse similar to what has occurred many times in South America, Africa and Eastern Europe and the Dollar literally collapses in a panic. In that kind of environment, $5,000 gold might well be a low target.

Americans Have Little To Be Proud Of

Americans Have Little To Be Proud Of

By Joel S. Hirschhorn

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Nations come and go, rise and fall as elites and the wealthy make victims of most citizens and plutocracies prevail. Current dogma is that we live in the greatest nation on Earth. Perhaps in terms of ideals there is some truth to that. But with another trillion dollars that we now must borrow at higher costs because of the meltdown of the financial sector, solidifying our position as the greatest debtor nation, Americans have little to be proud of. Our government and politicians as well as the corporate state have failed us. What do our young people and future generations have to look forward to?

Still more lies and deceptions will surely hit us as the fear-selling two-party plutocracy works hard to convince us prior to the coming election that things have turned better. In reality, there is no reason whatsoever for thinking that the nation is back on the right track. Of all the many narcotic delusions filling people’s heads the most dangerous and self-defeating is that we can vote our way out of this mess. Everyone needs to understand that Democrats in Congress have played a major role in delivering the nation into the abyss we now find ourselves in.

If Barack Obama had an ounce of honesty and courage he would have boldly told his first debate audience that he was going to modify his spending plans and focus on reducing the nation’s debt. And why did he not express deep sadness that the current bailout was repeating a long history of making a mockery of capitalism, with government refusing to let most large companies fail? When corporate fat cats know that they can continue to rape the country and walk away with tons of money, all we really have is corporate socialism. So why did we not hear Obama talk about his commitment to put corporate criminals in prison? Not dozens, but hundreds of Wall Street thieves and lying bank officials should be dragged publicly in handcuffs into the justice system. Why can’t Obama talk this way?

Don’t get me wrong. John McCain is even worse. Newsweek has reported that McCain, in his last mission before becoming a prisoner of war, ignored the warning that an enemy missile had locked onto his plane and instead of taking evasive action decided to keep flying straight ahead to complete his mission. Is it not clear that McCain will fly the nation straight into oblivion if he thinks his conception of our national mission should be adhered to, no matter what the costs are?

Back to my point: Americans cannot vote their way out of this mess. Their only real opportunity this year is to vote AGAINST the two-party plutocracy by voting for any of the four third-party presidential candidates. We need the world to see tens of millions of votes protesting the failures of both major parties. This electoral rebellion would keep faith with Thomas Jefferson’s correct view that America would need a revolution every generation or so. To keep voting for Democrats and Republicans just makes gullible and delusional citizens co-conspirators in the vast criminal conspiracy that is our political system.

A Shattering Moment In America's Fall From Power

A Shattering Moment In America's Fall From Power

The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over

By John Gray

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Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America's standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China's success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world. Throughout the years in which the US was punishing countries that departed from fiscal prudence, it was borrowing on a colossal scale to finance tax cuts and fund its over-stretched military commitments. Now, with federal finances critically dependent on continuing large inflows of foreign capital, it will be the countries that spurned the American model of capitalism that will shape America's economic future.

Which version of the bail out of American financial institutions cobbled up by Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke is finally adopted is less important than what the bail out means for America's position in the world. The populist rant about greedy banks that is being loudly ventilated in Congress is a distraction from the true causes of the crisis. The dire condition of America's financial markets is the result of American banks operating in a free-for-all environment that these same American legislators created. It is America's political class that, by embracing the dangerously simplistic ideology of deregulation, has responsibility for the present mess.

In present circumstances, an unprecedented expansion of government is the only means of averting a market catastrophe. The consequence, however, will be that America will be even more starkly dependent on the world's new rising powers. The federal government is racking up even larger borrowings, which its creditors may rightly fear will never be repaid. It may well be tempted to inflate these debts away in a surge of inflation that would leave foreign investors with hefty losses. In these circumstances, will the governments of countries that buy large quantities of American bonds, China, the Gulf States and Russia, for example, be ready to continue supporting the dollar's role as the world's reserve currency? Or will these countries see this as an opportunity to tilt the balance of economic power further in their favour? Either way, the control of events is no longer in American hands.

The fate of empires is very often sealed by the interaction of war and debt. That was true of the British Empire, whose finances deteriorated from the First World War onwards, and of the Soviet Union. Defeat in Afghanistan and the economic burden of trying to respond to Reagan's technically flawed but politically extremely effective Star Wars programme were vital factors in triggering the Soviet collapse. Despite its insistent exceptionalism, America is no different. The Iraq War and the credit bubble have fatally undermined America's economic primacy. The US will continue to be the world's largest economy for a while longer, but it will be the new rising powers that, once the crisis is over, buy up what remains intact in the wreckage of America's financial system.

There has been a good deal of talk in recent weeks about imminent economic armageddon. In fact, this is far from being the end of capitalism. The frantic scrambling that is going on in Washington marks the passing of only one type of capitalism - the peculiar and highly unstable variety that has existed in America over the last 20 years. This experiment in financial laissez-faire has imploded.While the impact of the collapse will be felt everywhere, the market economies that resisted American-style deregulation will best weather the storm. Britain, which has turned itself into a gigantic hedge fund, but of a kind that lacks the ability to profit from a downturn, is likely to be especially badly hit.

The irony of the post-Cold War period is that the fall of communism was followed by the rise of another utopian ideology. In American and Britain, and to a lesser extent other Western countries, a type of market fundamentalism became the guiding philosophy. The collapse of American power that is underway is the predictable upshot. Like the Soviet collapse, it will have large geopolitical repercussions. An enfeebled economy cannot support America's over-extended military commitments for much longer. Retrenchment is inevitable and it is unlikely to be gradual or well planned.

Meltdowns on the scale we are seeing are not slow-motion events. They are swift and chaotic, with rapidly spreading side-effects. Consider Iraq. The success of the surge, which has been achieved by bribing the Sunnis, while acquiescing in ongoing ethnic cleansing, has produced a condition of relative peace in parts of the country. How long will this last, given that America's current level of expenditure on the war can no longer be sustained?

An American retreat from Iraq will leave Iran the regional victor. How will Saudi Arabia respond? Will military action to forestall Iran acquiring nuclear weapons be less or more likely? China's rulers have so far been silent during the unfolding crisis. Will America's weakness embolden them to assert China's power or will China continue its cautious policy of 'peaceful rise'? At present, none of these questions can be answered with any confidence. What is evident is that power is leaking from the US at an accelerating rate. Georgia showed Russia redrawing the geopolitical map, with America an impotent spectator.

Outside the US, most people have long accepted that the development of new economies that goes with globalisation will undermine America's central position in the world. They imagined that this would be a change in America's comparative standing, taking place incrementally over several decades or generations. Today, that looks an increasingly unrealistic assumption.

Having created the conditions that produced history's biggest bubble, America's political leaders appear unable to grasp the magnitude of the dangers the country now faces. Mired in their rancorous culture wars and squabbling among themselves, they seem oblivious to the fact that American global leadership is fast ebbing away. A new world is coming into being almost unnoticed, where America is only one of several great powers, facing an uncertain future it can no longer shape.

Paulson will have no peer

Paulson will have no peer

The Treasury chief will gain sweeping, even unparalleled power under Congress' compromise plan.

By Peter G. Gosselin

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Despite all the constraints Congress supposedly wrapped around him, Treasury Secretary Henry M. Paulson is about to become the most powerful mortgage financier of the modern era -- most likely of any era.

Buried beneath the 100-plus pages of detail that Paulson's financial rescue plan has picked up during its 10-day journey from a Bush administration wish list to a bipartisan congressional compromise is the striking fact that the Treasury secretary got almost everything he sought -- an eventual $700 billion and the authority to spend it largely as he sees fit.

To be sure, congressional bargainers did make one huge change.

And in the process, they created a potential stumbling block as the Treasury tries to stabilize the deeply damaged financial system by acquiring toxic mortgage-backed securities.

Under terms of the compromise announced Sunday, any firm selling troubled assets to the government would have to give Washington the right to take an ownership stake in the firm -- a more sweeping requirement than had been expected. While the aim is to let taxpayers profit when the financial system eventually recovers, administration officials worry that generally healthy companies may be discouraged from getting involved -- thereby reducing the effectiveness of the rescue effort.

Whether that turns out to be a big problem remains to be seen, however, and for the rest, Paulson's new powers will be almost breathtaking in their scope.

He and his successor will have the right to buy not just mortgage-related securities at the heart of the crisis, according to the language of the bill, but under some conditions could buy any financial instrument "the purchase of which is necessary to promote financial market stability."

Moreover, the legislation encourages him -- in fact, requires him -- to combat the nationwide wave of home foreclosures by pushing mortgage service companies to rewrite some loans and to cut the interest rates or even the principal for financially strapped homeowners.

It even gives him the politically explosive power to cut deals with foreign, not just U.S., banks in some cases.

"This is unquestionably the biggest bailout in American history," said Wesleyan University economist Richard S. Grossman, a scholar of financial crises. "I'm as nervous as everybody else about Paulson having all this power, but who else are you going to give it to?

"This isn't something that can be done by committee," he said.

Congressional leaders sought to drive home the idea that they have added so many protections to the original 2-1/2-page blueprint Paulson sent to Capitol Hill on Sept. 20 that the final plan is no longer an undeserved sop to a mismanaged financial industry. Instead, proponents say, it now represents ordinary Americans' best bet for preserving their savings, jobs and economic well-being.

And indeed, the compromise language of what's now called the Emergency Economic Stabilization Act does include huge changes from Treasury's original proposal.

Among them: breaking the $700 billion into three installments, with only the first $350 billion quickly available; establishing no fewer than four oversight bodies to keep an eye on the Treasury secretary; and the addition of a limited right for people to sue over the program -- something Paulson initially sought to prohibit.

"This is not about a bailout of Wall Street," declared House Speaker Nancy Pelosi (D-San Francisco). "It's a 'buy-in' so we can turn our economy around."

"This is about Main Street. It's about America. It's really about the fabric of American life," echoed Sen. Judd Gregg (R-N.H.), the ranking GOP member of the Senate Budge Committee.

Despite all of the added protections, a late Sunday draft of the measure was replete with delegations of all sorts of powers to Paulson, even in areas where lawmakers said they had made their biggest mark.

For example, in setting up the measure's centerpiece -- its "troubled asset relief program" -- Paulson "is authorized to take such actions as the secretary deems necessary" to carry out the effort, including hiring, contracting and assigning companies to act as agents of the government, as well as buying, holding and selling assets.

Or again, in splitting up the $700 billion, the measure makes the first $250 billion immediately available and simply requires President Bush or his successor to declare that additional sums are needed in order to get the next $100 billion. When it comes to the final $350 billion, it doesn't require congressional approval, but instead gives lawmakers 15 days to vote their disapproval or the money starts flowing.

Still another example: House Republicans nearly derailed the whole effort late last week, claiming they had uncovered a cheaper alternative, a plan to have Washington offer companies a kind of insurance for their troubled mortgage-backed securities. By Sunday night, proponents of the scheme were saying that they had scored a major victory.

"My colleagues are much happier with this bill now," said Rep. James T. Walsh (R-N.Y.). "The insurance proposal is very popular."

But while the compromise requires Paulson to set up such an insurance program, it goes out of its way to avoid requiring him to use it, saying only that the Treasury secretary "may develop guarantees of troubled assets and the associated premiums."

Treasury officials and many independent analysts have expressed deep skepticism that the insurance program could save Washington any money unless it set a price for coverage that was so high no one could afford it. "Normally you buy insurance before something bad happens," said Brookings Institution economist Douglas Elmendorf. "You can't really buy afterward."

House and Senate Democrats will likely see some of their own most cherished provisions treated much like the insurance measure -- with Paulson deciding how to handle them.

For example, while Democratic lawmakers declared that the final bill would ban companies selling troubled assets to the government from giving their executives multimillion-dollar salaries and "golden parachute" severance packages, Treasury officials briefing reporters on background late Sunday said the actual provisions were extraordinarily narrow.

The ban would generally apply only to severance packages, not salaries, and then only to packages negotiated in the future, not ones already in place. In addition, the bans would only affect companies that sell large blocks of assets to Washington, and only when the executive is fired or the company had gone bust.

"We want to encourage all institutions, including healthy institutions, to participate" in the program, said one of the Treasury briefers. "We're not abrogating existing [compensation] contracts."

A similar fate almost certainly awaits Democrat-drafted provisions to have the Treasury help financially stretched homeowners by jawboning mortgage servicers into renegotiating their mortgages.

The measure requires Paulson to "maximize assistance for homeowners . . . and minimize foreclosures." But in the very same sentence, it says the Treasury has to make sure that taxpayers are not stuck with any additional costs, which makes any substantial additional aid to homeowners unlikely.

Even before unveiling the original plan, Paulson exercised sweeping influence over the nation's mortgage market, having orchestrated the government's Sept. 7 seizure of Fannie Mae and Freddie Mac, which between them owned or guaranteed nearly half of the mortgages in the U.S.

If the compromise measure is approved, the Treasury secretary will extend the government's reach into the one area of housing finance where it has thus far tread only lightly, the market for the kind of exotic financial instruments that Wall Street built atop the once-simple mortgage.

No company or other government agency would have anything close to so large a portfolio of mortgages and mortgage-related securities -- and none ever has in American history.

While House and Senate leaders of both parties confidently predicted swift approval of the compromise measure Sunday, rank-and-file lawmakers were not quite as sure of the final outcome.

"I think it's up in the air," said Rep. Christopher Shays (R-Conn.), who described himself as a "lean 'yes,' but not a committed 'yes.' "

He and many other lawmakers fear the political backlash if the plan doesn't work and financial markets continue to spiral downward.

"This is a legacy vote; these are the votes you have to live with for the rest of your life," Shays said.

The Bailout: Congress Endorses Conservative Nanny State

The Bailout: Congress Endorses Conservative Nanny State

Dean Baker

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Most authors of books on politics or economics are happy when they get one or two prominent members of Congress to endorse their work. It looks like I'm about to get majorities of both chambers to endorse my book, "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer" (free download available). There is no other way to describe Henry Paulson's $700 billion bailout deal.

The point of my book is that the battle between progressives and conservatives is not about a policy of government intervention as opposed to free market policies. Rather, it is a battle between those who want to use the government to benefit the middle and bottom of the income distribution and those who want to use the power of government to redistribute income upwards.

Congressional support for the bailout was a big victory for those who want to redistribute income upward. The bailout is about taking money from the schoolteachers and cab drivers and giving it to incredibly rich Wall Street bankers, who are so incompetent that they drove their banks into the ground.

This upward redistribution was done under the cover of crisis, just like the war in Iraq. But there is no serious crisis story. Yes, the economy is in a recession that is getting worse, but the bailout will not get us out of the recession, or even be much help in alleviating it.

The best argument that the bailout proponents had was that the failure to do the bailout could lead to a collapse of the financial system, leaving us unable to use credit cards or ATMs, or otherwise conduct normal financial transactions. This would indeed be scary, since it would imply a complete economic collapse. (I had actually accepted this line.)

However, on more careful thought, this is an idle threat. In the event the banking system really did freeze up, then the Fed would step in and take over the major banks. (It had contingency plans for such a takeover in the 80s, when the money center banks were saddled with billions of dollars of bad developing country debt.)

The banks would not be happy about a Fed takeover. The top executives would be out of a job, and the shareholders would likely lose their full investment. However, the rest of us would be able to carry on with our lives as we did before. After maybe a few hours of disruption, we would be able to cash checks and use credit cards and ATMs just as we did before the crisis.

In effect, the big banks had a gun pointed at their heads. The banks told Congress that if they didn't get $700 billion, then they would pull the trigger. Given this choice, Congress coughed up the cash.

While the final version is an improvement over the original request, there is little by way of hard commitments on the key points. Which executives will see their pay limited and by how much? How much equity does the government get for buying the banks' bad debts? How many mortgages will be renegotiated? If this were a serious bill, there would be specific wording on these points.

Henry Paulson did not sign a contract when he was CEO with Goldman Sachs that gave him "fair compensation." He signed a contract that specified that he would get tens of millions of dollars in salary and bonuses. Similarly, when Warren Buffet invested $5 billion in Goldman, he got a 10 percent stake in the bank, not a generic promise of "equity." That is the way business is usually done when people are serious.

The bill also does not change the bankruptcy rules to allow people to stay in their home. Nor does it provide for any real stimulus. Undoubtedly, the spending on the bailout will be used in future month as an argument against real stimulus.

Wall Street may have won this one, but this is the battle not the war. The whole country now knows that these millionaire and billionaire high-flyers are the biggest bunch of welfare cheats around. The folks with the yachts, private jets and personal servants lack the skills and diligence to make it on their own. They need the tax dollars from the rest of us to make ends meet.

Every progressive in the country should be working to ensure that this bailout is incredibly costly for the Wall Street crew. They should wish they never took our money.

Counting Every Vote

Counting Every Vote

California's Sec. of State Says Open-Source Software Is Needed to Safeguard Electronic Voting Systems

By ERICA NAONE

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California's secretary of state, Debra Bowen, believes that open-source software should be used in elections involving electronic voting machines, to protect against error and fraud.

Speaking in Cambridge, MA, [on Thursday] during a panel discussion at the EmTech organized by Technology Review, Bowen noted that individual counties are currently responsible for purchasing voting machines. Often the choice is left up to an IT professional who may lack detailed knowledge of cryptography and computer security. But the biggest concern, according to Bowen, is a lack of access to the machines' underlying code. "Many times, a person has no legal right to review the software, even if they could," she said.

Bowen has a history of pushing for greater transparency and accountability in election technology. After taking office in November 2006, she commissioned a top-to-bottom review of e-voting systems, including detailed analyses of source code, documentation, security, and usability. "All of the systems had security issues," Bowen said.

The study revealed a variety of problems, from software vulnerabilities that could let an attacker install malicious software that changes the outcome of a vote, to opportunities to tamper with the devices while they are held in storage.

E-voting companies are working to address these problems, but Bowen is still frustrated that the software running on voting machines is proprietary.

When asked about future elections, Bowen said the one technology she'd like to see integrated into voting systems tomorrow is open-source software for creating ballots and tabulating votes. Both tasks are horrendously complicated, she added, and so need to be very carefully monitored. For example, Los Angeles County alone may use 330 different ballots for a single election, because dozens of local races may be going on in different neighborhoods. And one common problem there with early deployments of touch-screen voting machines was that voters were presented with ballots that didn't show all the races that applied to them.

Tabulating votes is also problematic. Votes arrive through a variety of channels, via mail as well as polling stations, and must be tabulated quickly and accurately. But there is little regulation or oversight of the way existing software does this. "A lot of the concern comes out of the fact that no one can look at the software," Bowen says. She notes that voting-machine analysis often has to be performed under a nondisclosure agreement, meaning that the details of some flaws remain undisclosed.

MIT computer science professor Ron Rivest, who has studied the security and privacy of voting systems, says that these systems should be designed to work even if the software underneath is somehow flawed. "Do you have to trust the software in order to trust the election results?" he asks. The ideal situation, Rivest says, is one where the presence of bugs or malware cannot affect the outcome of an election.

There are other ways that technology can complicate the election system. One of Bowen's biggest worries about November's presidential election isn't the voting machines being used but the databases in which voter registration information is stored. A number of states recently introduced a requirement that names on drivers' licenses and voter registration records match exactly. Bowen says this could unfairly disqualify some voters, because the software used to compare records often cannot account for typos. For example, a computer may not recognize that "OM'alley" is a typo of "O'Malley." In 2006, Bowen says, exact match requirements prevented more than 20 percent of Los Angeles County voters from being properly placed on voter registration lists.

Under Bowen's stewardship, San Francisco will experiment with new software in November. It's one of the few cities already using instant-runoff voting, a system that lets voters rank candidates in order of preference instead of choosing just one. The rankings data can be used to determine a winner if no candidate receives a majority of the vote.

Treasury Conference Call on Bailout Bill to Analysts

Mussolini-Style Corporatism in Action: Treasury Conference Call on Bailout Bill to Analysts

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Various readers wrote us, and it was confirmed by a detailed report on the call at DealBreaker, that the Treasury Department held a conference call this evening for analysts on the bailout bill. A memo was evidently sent to SIFMA members; others may have been contacted by other means. But the report I got from one person who was on the call was the the questions came from financial services industry members. In other words, this was most assuredly not intended to be a call open to the public at large. If anyone from the media or other member of the great unwashed was listening in, it was by accident.

This is simply scandalous. To have a group of interested parties get a privileged briefing by government officials on a matter of keen public interest flies in the face of what a democracy is supposed to be about. The proper method would either be a published FAQ on the Treasury website or a briefing with the media included. But why should I be surprised? Favoritism has been a staple of the Bush Administration.

There is a live blogging recap at DealBreaker. Someone who was on the call is going over his notes and other recaps on the Web and sending me his version, which I hope will add some color. Check back for that update.

Update: Here are the notes promised. Calculated Risk had put up the conference call number. so some of this is the listener's notes, some are hoisted from CR. They are admittedly skeletal at points, but track and enhance the live blogging report at DealBreaker. You can download a torrent for the call here, which I intend to do post haste and will amend the post accordingly. I've included the long form notes below, but some items jump out:

1. The tranching is a mere formality, and the Treasury boys as much as said so. They could take the $700 billion max as soon as the bill has passed,

2. However, they do not plan any action immediately, will wait a couple of weeks. They want to focus their efforts on stronger companies but also made noise about protecting the financial system. This, by the way, is the Japanese convoy system all over.

3. There seemed to be a lot of tap dancing about what price they will pay for assets and no straight answer about their policy on warrants. They did say that if the amount sold was greater than $100 million, they would take warrants. FYI, the current draft allows them to pay up to the price at which the assets were initially booked (yikes) . I wonder if this is obfuscation, if they have an idea of what the plan to do but will not admit it in any public forum.

4. As the person who listened to the call stressed, DealBreaker wasn't clear on the bifurcated process. If you come to the Treasury and you are in trouble, you get reamed. Bear/AIG style treatment, execs probably fired. But if you participate on a voluntary basis, the intent is to make it very user friendly. That is consistent with Paulson's position during the negotiations.

5. The exec comp provisions sound like a joke, They DO NOT affect existing contracts, they affect only contracts entered into during the two years of the authority of this program and then affect only golden parachutes. More detail on that point, but I don't need more detail to get the drift of the gist.

Further below are the notes, admittedly somewhat cryptic at points, but hopefully helpful. But if you have time, listen to the download. Be warned I may revise and add to the post once I have done so.

Update 12:30 AM: Have queued up recording of conference call but not yet listened to it. But reader and sometime contributor Lune provides a useful take. Hoisted from comments:
1) If even the Treasury is saying tranching is a formality, then it really is nothing. Not sure why Dems fought so hard for a fig leaf.

2) Waiting a couple of weeks because no one has any idea when or where the next bomb will blow up. In other words, all their doomsday scenarios about Black Monday were B.S. They screamed the check had to be written by Monday, but now they're saying they actually have a few weeks before they need to cash it. Plus, this will allow them to "seek guidance" from GS, JPM, and other selfless public servants about where the money should be funneled.

3. The tap dancing is because they don't want it to get out that they'll be giving a sweetheart deal. The public won't be following each individual transaction to see exactly what price is being paid. So ridiculously overpriced asset sales can be hidden in the details, and by the time some reporter (or blogger :-) combs through and analyzes the transactions, the deed will have been done. But if Paulson makes a statement that assets will be bought at par before the bailout's even begun, that will be reported and might kill the deal.

4. In other words, we need to sweeten the pot to encourage banks to come "voluntarily". Pardon my ignorance, but why the hell should we be begging banks to borrow from us? I thought a bailout should be the absolute last option for a bank. I.e., it should be so unpalatable, so unprofitable for a bank and its executives that they exhaust every private means of survival before coming for their public "reaming". I wonder if foreclosed homeowners would rate their foreclosure process as "user friendly".

5. Of course the exec comp provisions are a joke. Who do you think is going to be hiring all those banking cmte staffers and newly retired congresspeople next year during the inevitable post-election turnover? Do you really think they're going to vote to limit their salaries? Remember that for lots of people on the Hill (including elected reps), govt work is merely time you spend accumulating credentials in preparation for your real life's work in the vastly richer private world.

Taxpayer losses: "golly, let's just pray to Jesus and hope he'll make sure that in a few years our country won't be bankrupt."

Oversight: "let's appoint a committee which will file toothless reports that no one will ever read".

I'm glad to see that while much time was spent in Exec comp. and tranching kabuki theater, the real points of protection of taxpayer losses and implementation of new regulation seem to be afterthoughts.

The notes on the call per our helpful anonymous reader (and former investment banker, it turns out):
"Draft bill is very positive for both markets and our companies"

Much explanation of Executive Comp

Residential and commercial mortgages. But very importantly, it can be any asset.

Excited about ability to guarantee assets in exchange for a guarantee fee.

Sought as much authority and as much flexibility as possible.

Eligibility: as broad participation by institutions as possible. The
more participation, the more effective it will be. Want banks of all
sizes or any financial institution that has a meaningful presence in
the US to be interested and enthusiastic.

Purpose is to help private sector clean up their balance sheets.

Highest priority: make sure it works, will attract companies to
participate. Warrants and exec comp. were very highly negotiated.

still listening ...
some1 | 09.28.08 - 9:14 pm | #


Warrants:

Direct purchases from failing institution e.g. Bear Stearns, AIG, F&F: will do the same thing, take maybe 79.9% equity.

Market mechanism: Congress wanted taxpayer benefit in upside. Sell
warrants for assets over $100M , but the amount of warrants is still
TBD. WE want healthy institutions to participate so it should not be
punitive.
some1 | 09.28.08 - 9:17 pm | #


Exec comp.

Most difficult part of negotiation.

Direct deal: fire the management, like AIG etc.

Market mechanism: if sell over $300M into fund, some exec comp limits
come with it. For 2 years, the firm could not enter into NEW contracts
including golden parachute, for involuntary departure. And lose some
deductibility.

We feel really good that we have encouraged healthy institutions to participate, not just bailouts of sick institutions.
some1 | 09.28.08 - 9:22 pm | #


Clawback of taxpayer losses:
1. it's a long way out, "a lot can happen in that time"
2. it's targeted at all financial institutions, not just participants! (that means it will never happen)
3. would need more congressional and presidential action to implement this.
some1 | 09.28.08 - 9:24 pm | #


Oversight (Bob Hoyt)

1. Financial Stability Oversight Board
2. General Accountability Office and Comptroller General managing purchase auctions
3. Special Inspector General
4. Congressional Oversight Panel
5. Reporting provisions
some1 | 09.28.08 - 9:27 pm | #


Tranching of $700B (I didn't know that was a limit)

Entire 700B is appropriated entirely by the act, no further appropriation necessary.

Tranching: first $250B
Then Secretary determines that more is needed and tells Congress, another $100B
Then Secretary determines that more is needed and Congress has 15 days to refuse, the remaining $350B

No time limits. Can request all the tranches at once, no need for delays.
some1 | 09.28.08 - 9:29 pm | #


More about tranching:

To block the last $350B, Congress has to say no. Then the President can
veto that. To override that veto, Congress needs 2/3 majority.

ALL of that must happen within 15 days, otherwise the money goes out.

Can't the President wait and veto it with one minute left in the 15 days?

RTC had to go back to Congress. Kudos for making this program much EASIER!
some1 | 09.28.08 - 9:32 pm | #

Price: not a fire-sale price, not an outrageous price, a "fair" price. Firms might get a price higher than their current mark.

(Congress will be voting on this, with this aspect totally undetermined.)
some1 | 09.28.08 - 9:35 pm | #

Not trying to maximize return to the taxpayer, but to provide liquidity to the system as a whole.
some1 | 09.28.08 - 9:39 pm | #


They will prefer to help healthy banks become even healthier, as
opposed to rescuing a failing bank, because the healthy bank is more
likely to relend into the system.

They expect that the exec. comp. limits won't constrain the healthy banks, since they are so light.
artichoke | 09.28.08 - 9:43 pm | #

xIt will take several weeks, before any assets can be bought, to hire asset managers and get systems up and running.

(They're going to let the weak banks fail, then help the rest.)
artichoke | 09.28.08 - 9:45 pm | #

No provision to mandate re-lending.

Stuff that is still to be determined, will be issued as "guidelines" therefore exempt from discussion and comment period.

About 800 people on the call.
some1 (oops;) | 09.28.08 - 9:47 pm | #

Bailout's Political Turmoil

Bailout's Political Turmoil

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All of the political leaders blessed the deal, but the House of Representatives spit it out anyway. The Wall Street bailout is so odious to public opinion, the "people's house" rejected it today, 228-205. The fever chart in Wall Street--better known as the stock market--swooned instantly, with the Dow falling 700 points. The political bedlam in Washington is as real as it gets.

The party leaders will probably try again. I doubt they have the energy or courage to renegotiate the terms in any serious way. A majority of Democrats voted for the measure, but most Republicans took a walk. They will be scolded--and pounded by captains of industry and finance--for being "irresponsible." But I doubt the public will agree.

In all of elected Washington, representatives are closest to the people and they know a vote for this outrageous measure is going to end the careers of some colleagues--maybe many of them. This time, the dissenters can claim principle and say they are voting with the folks, while also voting to save their own hides.

It adds another deep shock to the system, both in politics and economics, but what an invigorating moment for democracy.

The financial bloodbath will continue, but unless the deal on the table changes significantly, Henry Paulson gets to decide who lives and who dies. The former investment banker from Goldman Sachs would be empowered as treasury secretary to play savior or grim reaper, the liquidator who essentially pulls the plug on some banks and financial firms or the man who rescues them from ruin. Of course, Paulson would consult with other government officials. But you can be sure that, behind closed doors, he will ask former brethren in Wall Street to help decide which club members are worthy of saving. This power to pick winners and losers would remain in Paulson's hands until a new president arrives in January.

This the essence of "the deal" Congress worked out over the weekend and was stymied today. Some bells and whistles were added to make the transaction less obnoxious to public opinion, voters and taxpayers. They are not meaningless, but both parties lacked the nerve to tamper with Paulson's basic proposal. This is still a massive bailout of imploding Wall Street, financed with the public's money. And it is still a massive crap shoot for the American people.

If the billions from Washington somehow restore temporary calm and balance to global financial institutions and markets, then the usual cheerleaders will proclaim the "system" has worked. Most Americans, I predict, will not join the cheering. Too much destruction lies ahead, both in the financial system and in the real economy where people live and work. Too much bitterness and rage will be attached to the White Knight at Treasury when he dooms one pension fund or bank, but rescues others. Too much deceptive sleight-of-hand is already embedded in Paulson's approach for ordinary mortals to even recognize what Paulson intends to accomplish.

The essential political failure, in my view, is that Congress did not step up and assert the full emergency powers of government in this epic crisis, that is, take temporary control of the entire financial and banking system so regulators and policy makers can steer the US economy to safer ground, compelling the private institutions to follow their lead. This rescue plan remains essentially voluntary. Yes, the Treasury Secretary would be awarded gargantuan personal powers, but there is not much in writing to compel the banking behavior of private interests he chooses to rescue them. One assumes Paulson will demand some private deals and use his enormous leverage to squeeze anyone who resists. But there is nothing to guarantee this path is taken. The bailout will belong to the club and the club will manage it.

Democrats are the majority party and insisted on some qualifying terms in behalf of the populace--better than nothing, but weak half-steps. The government can claim warrants or equity ownership from firms in exchange for the public aid. It can put a lid on bloated executive salaries at the rescued banks or brokerages. It can demand more up-close oversight of how the Treasury Secretary performs. The language for all of these measures suggests to me--I need to read the text again more carefully--that these are essentially discretionary suggestions.

Paulson can do them if he chooses. Or, if he likes, he can wiggle around them in the fine print. The Dems do not want to assert real control over Paulson's decisions for fear they will then be blamed if and when everything fails.

Republicans, as usual, are playing their own political game--trying to evade the blame, now and later. Their proposal for an insurance program that financial firms must pay for is ludicrous. It's like trying to buy hurricane insurance on your house after the storm has already blown it away. But the GOP already is in ruin, so its members are thinking long-term survival and creating a predicate for revival. Blame the government, blame Wall Street, blame the go-along Democrats--maybe people will start liking Republicans again.

Democrats are still in recovery from twenty-five years of deferring impotently to the wise men of Wall Street and retreating tactically from conservative initiatives. I see this crisis as the Democrats' hesitant first step toward rediscovering their nerve and abandoned convictions. They are not there yet. But this crisis is not over. I predict they will get another opportunity to stand up for something and rather soon.

In the nature of this crisis, the next president will be compelled to clean up Paulson's irregular mess. He will be forced to act, not only because of the rising popular anger and enveloping recession but because the Paulson approach is founded on private deal-making and his deceptive statements of purpose.

By January, whoever wins the White House, it will be clear that Washington cannot cure the disease by relying on one smart guy from Wall Street. A new federal agency will be needed to supervise the bailout and restore defined public purposes and enforce them on the system. The government will have to assert its powers forcefully, because by then it will be obvious the "voluntary" approach helped some losers to become winners, but it neglected to save the country.

Let Risk-Taking Financial Institutions Fail

Let Risk-Taking Financial Institutions Fail

The Administration and Congress have felt compelled to do something about the "financial meltdown," so an inefficient and inequitable "bailout plan" has been rushed through the legislature despite harsh criticism from the right and left. That's unfortunate. Both presidential candidates were stalling by qualifying the plan. Whichever candidate had had the courage to reject outright this proposal would have had the better claim to be President.

Do not be fooled. The $700 billion (ultimately $1 trillion or more) bailout is not predominantly for mortgages and homeowners. Instead, the bailout is for mortgage-backed securities. In fact, some versions of these instruments are imaginary derivatives. These claims overlap on the same types of mortgages. Many financial institutions wrote claims over the same mortgages, and these are the majority of claims that have "gone bad."

At this point, such claims have no bearing on the mortgage or housing crisis; they have bearing only on the holders of these securities themselves. These are ridiculously risky claims with little value for society. It is as if many financial institutions sold "earthquake insurance" on the same house: when the quake hits, all these claims become close to worthless — but the claims are simply bets disconnected from reality.

Follow the money. Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history.

Rescuing financial institutions is not the best solution. Yes, banks are needed to provide capital to businesses. But it is not necessary to spend $1 trillion to maintain liquidity. If the government is to intervene, it should pick and choose which claims to purchase; claims that are directly tied to mortgages would be a good start.

Let financial institutions fail, merge or be bought out. The faltering institutions will see their shares devalued and will be likely to be taken over by stronger institutions — as has already started happening. This consolidation of the financial sector is both efficient and inevitable; government action can only delay the adjustment.

The government should not intervene. It should leave overleveraged financial institutions to default on their derivatives obligations and, if necessary, file for bankruptcy. Much of the crisis has arisen from miscalculating the risks involved in a large book of positions in these derivatives. It is only logical that these institutions pay for their poor management.

Rather than bailing out Wall Street, we propose that the government should buy up the actual mortgages in question and do nothing else. The government should not touch any derivatives; that is, claims that do not directly tie into the actual mortgages. If money becomes too tight, then the Fed can certainly increase its loans to financial institutions.

Let the poorly managed, overly risk-taking financial institutions fail! Always remember that Wall Street and the real economy are not the same thing.

The nation's social bargain with the rich

The nation's social bargain with the rich

By Derrick Z. Jackson

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CONGRESS has been rushing to save financial CEOs from themselves with a $700 billion bailout that amounts to a tax of $2,333 on every man, woman, and child in America. This is after three decades of the nation's leaders punishing struggling Americans for their lack of personal responsibility, from Ronald Reagan's assault on "welfare queens" to the bipartisan slashing and capping of welfare benefits by President Clinton and House Speaker Newt Gingrich.

More recently, presidential candidates John McCain and Barack Obama have said undocumented folks should pay fines to get in line for citizenship.

Then, of course, there were the 1.5 million home foreclosures last year and the 2.5 million foreclosures projected for this year by Treasury Secretary Henry Paulson. Many economists and politicians have washed their hands of them, saying, tsk, tsk, they were irresponsible for taking on too much responsibility!

If scapegoating struggling Americans on personal responsibility fails to work, we just ignore them, as sure as the Ninth Ward of New Orleans remains the American Dresden after Hurricane Katrina - while rebuilt Gulf Coast casinos break new revenue records.

All those millions of Americans, facing everything from slashed food stamps to swamped homes, live in a patronizing America where Clinton signs the 1996 welfare bill by saying, "We're going to take this historic chance to try to recreate the nation's social bargain with the poor. We're going to try to change the parameters of the debate. We're going to make it all new again and see if we can't create a system of incentives which reinforce work and family and independence. We can change what is wrong."

No broad parameters are being changed for greedy or incompetent Wall Street CEOs, as the financial sector assures itself a compliant Congress with $2 billion in campaign contributions since 1990 (Obama and McCain have respectively received $25 million and $22 million in campaign contributions from the financial sector in this campaign cycle, according to the Center for Responsive Politics).

Negotiators on the hill do say they will tax bailed-out companies for executive salaries over $500,000, but Wall Street found its way around similar rules in the past.

Yesterday, amid increasing outrage, the House failed to pass the bailout bill.

No bailout should happen without recreating the nation's social bargain with the rich. The nation can no longer afford the disparity where the average American CEO makes 344 times the pay of the average worker, according to the Institute for Policy Studies and United for a Fair Economy. The CEOs and their boards should pay toward the bailout before a penny of that possible $2,333 comes out of the pockets of Americans.

There is more than enough money among the financial elites to pay for the bailout. The Institute for Policy Studies last week calculated that a securities transaction tax of a penny for every $4 invested would add $100 billion a year to the treasury. Had such a tax been in place after the 2001 Enron scandal, it would have added up to the current cost of the bailout.

A wealth surcharge of no more than 3 percent on households worth more than $10 million would add another $300 billion. In response to the news this year that two-thirds of American corporations paid no income tax between 1998 and 2005, a corporate minimum income tax could add another $60 billion.

The institute said a 50 percent tax on salaries of $5 million or more and 70 percent on salaries of $10 million or more - until the bailout is over - would add another $105 billion. Killing overseas tax shelters, loopholes for excessive CEO pay and the sale of mansions, and creating a progressive inheritance tax would add another nearly $300 billion.

Institute senior scholar Chuck Collins said that would be a much more fair way to deal with the consequences, and discourage a worsening of "casino capitalism," than the rush to dump this on the taxpayer. "Many of these things have been examined, but not implemented," Collins said, "But Congress essentially punted on how to pay for the bailout."

If Congress is the punter, the people are the football being kicked once again far downfield as Congress and the CEOs high-five with relief from the skybox.

You won't believe where that $700-billion bailout figure came from

You won't believe where that $700-billion bailout figure came from

Andrew Malcolm

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Here's something that John McCain and Barack Obama and Sarah Palin and even longtime Washingtonian Joe Biden probably don't know. Not to mention Bob Barr, Ralph Nader and Ron Paul, who usually knows everything.

It's a fascinating footnote to the economic and political bailout debate that's kept so many people from more properly focusing on the pennant races and the Colts' problems in the last week. (Incidentally, do you think we'd have had this big fight if President Bush had called it a "rescue" plan instead?)

Our buddy from two lifetimes ago, Carl Lavin over at Forbes.com, points out a fascinating paragraph buried in a story on his website late last week by Brian Wingfield and Josh Zumbrun.

You know, this $700-billion figure that exploded into everyday political parlance almost as fast as Sarah?

The $700-billion "cost" of resolving the financial crisis and restoring confidence and liquidity in the credit markets starting this morning?

The $700-billion figure that Senate Democratic Majority Leader Harry Reid first said he could really use McCain's help with, but then the Arizonan took him up on it and Reid suddenly said the Republican would only get in the way and anyway, Reid said, he already had a done deal, except he didn't and the Nevadan ended up being the embarrassed one?

The $700-billion figure that dominated the first part of the first presidential debate of the 2008 general election season between McCain and Obama?

The $700-billion figure that won't really end up being anywhere near the actual cost because no one knows what all those mortgaged properties are really worth now anyway? Which is the whole problem in the first place because the institutions holding that paper don't know the value of what they're holding either, which is why everyone suddenly got so frightened?

That $700-billion figure that won't really last because eventually the feds will sell off what they're buying and might even make a profit in the end as they did with the Chrysler bailout warrants years ago?

You know where that very important $700-billion figure came from?

Here's a quote from that Forbes story:

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

They made it up to be sufficiently ginormous to frighten everyone into rapid action.

And it worked


Congratulations, Corporate Crime Fighters! Coup Averted for Three Days!

Congratulations, Corporate Crime Fighters! Coup Averted for Three Days!

By Michael Moore

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Friends,

Everyone said the bill would pass. The masters of the universe were already making celebratory dinner reservations at Manhattan's finest restaurants. Personal shoppers in Dallas and Atlanta were dispatched to do the early Christmas gifting. Mad Men of Chicago and Miami were popping corks and toasting each other long before the morning latte run.

But what they didn't know was that hundreds of thousands of Americans woke up yesterday morning and decided it was time for revolt. The politicians never saw it coming. Millions of phone calls and emails hit Congress so hard it was as if Marshall Dillon, Elliot Ness and Dog the Bounty Hunter had descended on D.C. to stop the looting and arrest the thieves.

The Corporate Crime of the Century was halted by a vote of 228 to 205. It was rare and historic; no one could remember a time when a bill supported by the president and the leadership of both parties went down in defeat. That just never happens.

A lot of people are wondering why the right wing of the Republican Party joined with the left wing of the Democratic Party in voting down the thievery. Forty percent of Democrats and two-thirds of Republicans voted against the bill.

Here's what happened:

The presidential race may still be close in the polls, but the Congressional races are pointing toward a landslide for the Democrats. Few dispute the prediction that the Republicans are in for a whoopin' on November 4th. Up to 30 Republican House seats could be lost in what would be a stunning repudiation of their agenda.

The Republican reps are so scared of losing their seats, when this "financial crisis" reared its head two weeks ago, they realized they had just been handed their one and only chance to separate themselves from Bush before the election, while doing something that would make them look like they were on the side of "the people."

Watching C-Span yesterday morning was one of the best comedy shows I'd seen in ages. There they were, one Republican after another who had backed the war and sunk the country into record debt, who had voted to kill every regulation that would have kept Wall Street in check -- there they were, now crying foul and standing up for the little guy! One after another, they stood at the microphone on the House floor and threw Bush under the bus, under the train (even though they had voted to kill off our nation's trains, too), heck, they would've thrown him under the rising waters of the Lower Ninth Ward if they could've conjured up another hurricane. You know how your dog acts when sprayed by a skunk? He howls and runs around trying to shake it off, rubbing and rolling himself on every piece of your carpet, trying to get rid of the stench. That's what it looked like on the Republican side of the aisle yesterday, and it was a sight to behold.

The 95 brave Dems who broke with Barney Frank and Chris Dodd were the real heroes, just like those few who stood up and voted against the war in October of 2002. Watch the remarks from yesterday of Reps. Marcy Kaptur, Sheila Jackson Lee, and Dennis Kucinich. They spoke the truth.

The Dems who voted for the giveaway did so mostly because they were scared by the threats of Wall Street, that if the rich didn't get their handout, the market would go nuts and then it's bye-bye stock-based pension and retirement funds.

And guess what? That's exactly what Wall Street did! The largest, single-day drop in the Dow in the history of the New York Stock exchange. The news anchors last night screamed it out: Americans just lost 1.2 trillion dollars in the stock market!! It's a financial Pearl Harbor! The sky is falling! Bird flu! Killer Bees!

Of course, sane people know that nobody "lost" anything yesterday, that stocks go up and down and this too shall pass because the rich will now buy low, hold, then sell off, then buy low again.

But for now, Wall Street and its propaganda arm (the networks and media it owns) will continue to try and scare the bejesus out of you. It will be harder to get a loan. Some people will lose their jobs. A weak nation of wimps won't last long under this torture. Or will we? Is this our line in the sand?

Here's my guess: The Democratic leadership in the House secretly hoped all along that this lousy bill would go down. With Bush's proposals shredded, the Dems knew they could then write their own bill that favors the average American, not the upper 10% who were hoping for another kegger of gold.

So the ball is in the Democrats' hands. The gun from Wall Street remains at their head. Before they make their next move, let me tell you what the media kept silent about while this bill was being debated:

1. The bailout bill had NO enforcement provisions for the so-called oversight group that was going to monitor Wall Street's spending of the $700 billion;

2. It had NO penalties, fines or imprisonment for any executive who might steal any of the people's money;

3. It did NOTHING to force banks and lenders to rewrite people's mortgages to avoid foreclosures -- this bill would not have stopped ONE foreclosure!;

4. It had NO teeth anywhere in the entire piece of legislation, using words like "suggested" when referring to the government being paid back for the bailout;

5. Over 200 economists wrote to Congress and said this bill might actually WORSEN the "financial crisis" and cause even MORE of a meltdown.

Put a fork in this slab of pork. It's over. Now it is time for our side to state very clearly the laws WE want passed. I will send you my proposals later today. We've bought ourselves less than 72 hours.

Yours,
Michael Moore
MMFlint@aol.com - MichaelMoore.com

Banking Collapse Lands on America’s Schools

Banking Collapse Lands on America’s Schools

Early Voting in Ohio Begins

Early Voting in Ohio Begins

By Steven Rosenfeld

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What a difference four years makes. In 2004 in Columbus, Ohio, thousands of inner city voters spent hours waiting in line in a cold rain to vote for president. On Tuesday, as the state began early voting for the 2008 presidential election, many of those same people – and new voters – walked into polling places or were driven there in van pools.

"I feel better this year about voting because I didn’t feel it would be stolen or misplaced again," said Scohbaka Washington, who was one of the first to vote as Ohio began its "in person absentee voting" for 2008 presidential election. In 2006, Ohio expanded its early voting options; previously people needed to give reasons for voting by absentee ballot.

Washington, who waited six hours to vote in 2004, marveled at the difference. "Look at all the workers here," he said. "They know the value of the vote. It will be protected."

Washington was not alone in praising the early voting option.

"It works for me. I got a ride here from Columbus State," said Routing Zhan, an English student who was ferried to the Veterans Memorial by Vote Today Ohio, an independent group seeking to bring 10,000 students from seven Ohio cities and college towns to the polls to register and to vote early -- before registration closes next Monday for 2008’s presidential election.

"There’s an amazing window of opportunity where people can register and vote early on the same day," said Cristina Moon, one of Vote Today Ohio’s organizers. "Instead of doing voter registration and then GOTV (get out the vote), you can do it all at once."

Vote Today Ohio was among a handful of groups -- most not affiliated with the Obama campaign or Democratic Party -- running van pools to ferry new voters and historically disenfranchised voters, such as minorities, poor people, students and the homeless to Franklin County’s early voting center. The group has 130 volunteers, 25 team leaders and rented a dozen vans to help students in Columbus, Cleveland, Dayton, Cincinnati, Toledo, Youngstown and Miami County.

"People are voting for the first time because they believe in a candidate for the first time," said Moon. "There is a movement. There is a feeling of people’s ability to affect change; of voting ourselves into power."

There were other independent efforts to bring voters to what these organizers call Ohio’s "golden week." Last week, the state’s Republican Party sued to stop likely Democratic voters from registering to vote and casting absentee ballots during this weeklong window. On Monday, the Ohio Supreme Court rejected their lawsuit. On Tuesday morning, the independent groups were all seeking to bring segments of society that have tended to vote Democratic in recent elections to Columbus' Veterans Memorial where dozens of Board of Election staffers and 54 voting booths awaited them.

P.G. Sittenfeld, co-founder of Vote From Home, a group founded by graduate students, was running several "early vote" taxis from inner city neighborhoods that he said "were affected by long lines in 2004."

Sittenfeld said his group had targeted 10,000 people who they were hoping to shepherd through the voting process in Columbus, Cincinnati and Dayton. "We will follow up to make sure they get absentee ballots," he said. "We will make sure their registrations are processed at the Board of Election."

Another activist-organizer was Bob Christ, who was wearing a "faith vote" tee shirt. He was bringing people from homeless shelters. Christ said he had made several trips to homeless shelters on Tuesday morning.

"Our job is just to bring them down," he said. "We don’t discuss politics. That is up to them. If they have question, we try to answer them. Most of them have their own ideas."

Matthew Damschroder, the Deputy Director of the Franklin County Board of Election, said he expected 500 people to vote on Tuesday. By the close of voting Tuesday, he said 808 people had voted, including 72 first-time voters and 98 people who needed to update their voter registration information with their current address.

According to volunteers stationed at the early voting location all day, none of the groups ferrying eligible voters appeared to be bringing supporters of Republican nominee John McCain, even though the GOP presidential candidate and his running mate, Sarah Palin, had a rally in the Columbus suburb of Bexley on Monday.

Damschroder said the county mailed 131,000 absentee ballots out on Tuesday, with another 11,000 yet to be sent out. He said that nearly 200,000 new voters had registered since January 2008, of which 5,000 voter registration forms had been rejected due to incorrectly entered information or unreadable handwriting. He said the county sent postcards to those voters, telling them to correct their voter applications before registration closes on Monday, Oct. 6th for the presidential election.

Damschroder said a 2.5 percent error rate among voter registration applications was normal.

During Tuesday’s early voting in Franklin County there appeared to be few problems. One exception was Routing Zhan, the Columbus State Community College student.

"They didn’t allow me to vote because I live in Delaware County and I have to vote near my area -- I am in a different county," she said, as she walked away from the voting center. "I would fell a lot better if I could do it here."

But Zhan said she would not be deterred from voting for president in 2008. "I'm going to go to Delaware County early voting and see if I can cast my vote," she said.

Bush Administration Adds $4 Trillion To National Debt

Bush Administration Adds $4 Trillion To National Debt

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With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush’s presidency.

It’s the biggest increase under any president in U.S history.

On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. That’s a 71.9 percent increase on Mr. Bush’s watch.

The bailout plan now pending in Congress could add hundreds of billions of dollars to the national debt – though President Bush said this morning he expects that over time, “much if not all” of the bailout money “will be paid back.”

But the government is taking no chances. Buried deep in the hundred pages of bailout legislation is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion. It’ll be the 7th time the debt limit has been raised during this administration. In fact it was just two months ago, on July 30, that President Bush signed the Housing and Economic Recovery Act, which contained a provision raising the debt ceiling to $10.615 trillion.

Deputy Press Secretary Tony Fratto declined an invitation to comment on the enormous jump in the national debt during Mr. Bush’s presidency. He referred me to OMB – the Office of Management and Budget, which tried to make the case that as a percentage of the economy, the national debt is not that big.

In its budget documents in February, OMB estimated that next year’s national debt would hit $10.4 trillion – which it said would amount to 69.3 percent of the gross domestic product – the standard measure of the size of the economy.

That’s high – but far from an all-time high. After World War II, the national debt soared to over $270 billion – a quaint figure by today’s standards. Numerically, it’s less than the amount of federal deficit we now run up in a single year. But back in 1946, the Debt amounted to 121.7 percent of the size of the total economy.

By the time Richard Nixon began his second term in 1973, the national debt had grown to $466 billion – though as percentage of GDP, it had fallen to 35.7 percent.

Today, OMB press secretary Corinne Hirsch, renewed the oft-made government argument that reporters should focus on just that part of the national debt that is held by the public – now about $5.6 trillion and not include that portion billed as “intra-governmental holdings” – money the government owes itself – especially the Social Security and Medicare trust funds.

Of course, the government doesn’t have that money either. It’s been spent.

President Bush made that point himself on April 5, 2005, when he paid a visit to the offices of the Bureau of the Public Debt in Parkersburg, W.Va.

He was shown a white file cabinet with keypad locks on each of its four drawers in which the Social Security Trust Fund is stored. On that day, there was no cash – as he noted in a speech later in the day.

“There is no 'trust fund,' just IOUs that I saw firsthand, that future generations will pay – will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs,” he told an audience at West Virginia University.

The government didn’t have the money it owed itself back then – and still doesn’t.

A couple of weeks after he took office, President Bush addressed the Republican Congressional Retreat in Williamsburg and declared that his budget “pays down the national debt.”

In recent years, President Bush almost never mentions the national debt.

DOJ Report Implicates White House in US Attorney Firings

Report Implicates White House

E-Mails Hint at Involvement in Prosecutor Firings, Officials Say

By Carrie Johnson

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In 18 months of searching, Justice Department Inspector General Glenn A. Fine and Office of Professional Responsibility chief H. Marshall Jarrett have uncovered new e-mail messages hinting at heightened involvement of White House lawyers and political aides in the firings of nine federal prosecutors two years ago.

But they could not probe much deeper because key officials declined to be interviewed and a critical timeline drafted by the White House was so heavily redacted that it was "virtually worthless as an investigative tool," the authorities said.

"We were unable to fully develop the facts regarding the removal of [David C.] Iglesias and several other U.S. Attorneys because of the refusal by certain key witnesses to be interviewed by us, as well as the White House's decision not to provide . . . internal documents to us," the investigators concluded in their report.

The standoff is a central reason that Attorney General Michael B. Mukasey on Monday named a veteran public-corruption prosecutor, Nora R. Dannehy, to continue the investigation, directing her to give him a preliminary report on the status of the case in 60 days.

But lawmakers who helped expose irregularities in the ouster of the prosecutors say they are concerned about more delays.

Yesterday, Sen. Sheldon Whitehouse (D-R.I.) wrote Mukasey a letter asking whether Dannehy would have the authority to compel documents from the White House and testimony from former presidential aide Karl Rove and former White House counsel Harriet E. Miers, who rejected invitations to meet voluntarily with the inspector general.

He also expressed concern that any information Dannehy may obtain would be kept under wraps because of grand jury secrecy rules, leaving members of the public in the dark. "There are a lot of questions that need to be answered," Whitehouse said.

Justice Department spokesman Peter Carr said that Dannehy will "have the same authority as any prosecutor to pursue this investigation wherever the facts and the law require."

Investigators urged Dannehy to focus on the dismissal of Iglesias in New Mexico. He was the subject of repeated complaints by Republican lawmakers to White House and Justice Department officials in 2005 and 2006 over not bringing voter-fraud and corruption charges against Democrats. Their report said the internal probe at Justice could not reach Miers and Rove, "both of whom appear to have significant first-hand knowledge regarding Iglesias's dismissal."

The report depicts a steady drumbeat of pressure leading up to the 2006 elections. Republican former state senator Mickey D. Barnett e-mailed Rove in October to complain about the pace of a federal bribery probe that Iglesias's office was conducting against a Democratic rival. Barnett wrote that he had already complained to Justice Department White House liaison Monica M. Goodling and Sen. Pete V. Domenici (R-N.M.).

That same month, President Bush and Rove both spoke to Attorney General Alberto R. Gonzales about rampant voter fraud in three cities, one in New Mexico, Gonzales told investigators.

In November, Domenici's chief of staff, Steven Bell, e-mailed Rove seething about voting issues in New Mexico and expressing "worry" about Iglesias. Rove advised Bell to have Domenici reach out to the attorney general. Around the same time, Deputy Attorney General Paul J. McNulty received a phone call from Miers, who passed along complaints about Iglesias that she had heard from Rep. Heather A. Wilson (R-N.M.)

At a White House breakfast in mid-November, Wilson approached Rove to tell him that the U.S. attorney was a "waste of breath," according to her interview with investigators. She said Rove told her: "That decision has already been made. He's gone."

Less than three hours later, a Justice Department official forwarded a firing list to the White House Counsel's Office on which Iglesias's name appeared, giving rise to questions about how Rove learned about its contents in advance, and whether the department ultimately fired Iglesias for improper political reasons.

Robert D. Luskin, an attorney for Rove, said: "We'll look forward to the opportunity if the circumstances are appropriate of Rove being able to cooperate voluntarily. Rove has nothing to fear from truthful testimony."

"If, in the course of her investigation, she needs information, we will certainly want to accommodate her," White House spokesman Tony Fratto said of Dannehy. A lawyer for Miers did not return calls seeking comment.

Department Of Defense Announces More Iraq Deployments

Department Of Defense Announces More Iraq Deployments

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The Department of Defense announced today additional major units scheduled to deploy in support of Operation Iraqi Freedom. The announcement involves one corps headquarters, one division headquarters, one Marine expeditionary force headquarters and seven brigade combat teams consisting of approximately 26,000 people. The deployment window for these units will begin in the winter and continue into Summer 2009.

Specific units receiving deployment orders include:

Headquarters units: I Corps Headquarters, Ft. Lewis, Wash. 1st Cavalry Division Headquarters, Ft. Hood, Texas II Marine Expeditionary Force Headquarters, Camp Lejeune, N.C.

Brigade combat teams: 4th Brigade Combat Team, 1st Armored Division, Ft. Bliss, Texas 4th Brigade Combat Team, 82nd Airborne Division, Ft. Bragg, N.C. 5th Stryker Brigade Combat Team, 2nd Infantry Division, Ft. Lewis, Wash. 1st Brigade Combat Team, 82nd Airborne Division, Ft. Bragg, N.C. 3rd Stryker Brigade Combat Team, 2nd Infantry Division, Ft. Lewis, Wash. 4th Brigade Combat Team, 1st Infantry Division, Ft. Riley, Kan.

Security force brigade: 115th Fires Brigade, Cheyenne, Wyo.

This announcement reflects the continued commitment of the United States to the security of the Iraqi people and provides replacement forces required to maintain the current level of effort in Iraq. Subsequent deployment orders will be issued based on force level decisions made in the future.

The deployed headquarters units will provide command and control, intelligence, surveillance and reconnaissance capabilities in support of security operations in the country. Six brigade combat teams will replace formations currently on the ground in Iraq. Those units will assume responsibility for a battlespace where they will conduct the full spectrum of operations.

The one security force brigade will be assigned tasks which will assure freedom of movement and continuity of operations in the country. Those tasks will include base defense and route security. DoD will continue to announce major unit deployments and adjustments as they are identified and those units are alerted. For more information on supporting units for this deployment contact Army Public Affairs at (703) 692-2000 or Marine Corps Public Affairs at (703) 614-4309.

GOP Plans and Denials to Challenge Foreclosed Voters Examined

GOP Plans and Denials to Challenge Foreclosed Voters Examined

By J. Gerald Hebert

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The "lose your house, lose your vote" stories out of two battleground states, Michigan and Ohio continue to occupy space in the media and various blogs. The story just won’t go away.

A federal lawsuit over the plan is pending in Michigan and the U.S. Department of Justice is reviewing the matter. As I reviewed the stories about this issue and have started to gather additional information about some questionable mailings to voters in other states, I was reminded of my days at the Justice Department when we would investigate claims of voter intimidation and voter suppression. Investigations of vote caging and vote suppression schemes usually started out with an admission of some specific practice, followed by a denial of any such plan, followed by a decision to retain legal counsel.

In both Michigan and Ohio, where the issue of challenging the right to vote of those who have received foreclosure notices has arisen, GOP officials did not initially deny there might be such a strategy. They either admitted it, or acknowledged that it might be part of a larger strategy aimed at preventing people from voting who may be ineligible. In other words, they didn’t rule it out. Once the story came out, and public uproar ensued, the GOP officials issued vehement denials.

Let’s look at some of how this story has developed -- it’s easy to see why the story is now in its third week. It’s also easy to see why those who mount legal challenges to plans to challenge voters must be prepared to engage in aggressive discovery if they are going to obtain the true facts.

To begin with, let’s examine the context in which these two stories arose. As I detailed earlier in my primer on the history of vote caging, the GOP has a long history of engaging in voter suppression efforts. The Party has persisted with the practice because it has proven effective. The GOP schemes have also led to injunctions being imposed by the courts barring specific voter suppression efforts. If the claims of possible vote challenges to those who have received foreclosure notices were against a clean historical slate, then such claims might be a little hard to believe. But they aren’t. They arise against a stain of GOP vote suppression extending over a number of decades. To be sure, claims have been made against Democratic Party operatives as well: allegations of paying voters (“walking around money”), voter impersonation, and non-citizen voting. The point of this piece is not to go through the accuracies or inaccuracies of these claims. Instead, this piece is about alleged efforts to suppress the rights of voters who have lost or are losing their homes in Michigan and Ohio, and the history of vote suppression by the GOP which is relevant to this story.

Michigan:

In Michigan, the original story by Eartha Melzer of the Michigan Messenger contained this passage:

"The chairman of the Republican Party in Macomb County, Michigan, a key swing county in a key swing state, is planning to use a list of foreclosed homes to block people from voting in the upcoming election as part of the state GOP’s effort to challenge some voters on Election Day.

"We will have a list of foreclosed homes and will make sure people aren’t voting from those addresses,’ party chairman James Carabelli told Michigan Messenger in a telephone interview earlier this week."

Following the release of the story, Mr. Carabelli "denied making the comment and called the report 'a non-story.'"

Note that he didn’t deny talking with Ms. Melzer about the issue and instead tried to downplay the issue: "We were just having a conversation," said Carabelli. Mr. Carabelli then went even further, making the dubious claim that "[w]e have no plans to do anything[.]"

Carabelli’s claim that the Michigan GOP had "no plans" to challenge voters at the polls was contradicted by a subsequent story in the Michigan Messenger: "Eric Doster, former counsel for the Michigan Republican Party and a lawyer who plans to represent GOP election challengers on Election Day" said that while he is "unfamiliar with plans to use foreclosure lists to challenge voters, he does expect party volunteers to challenge voters in other ways."

"When asked whether Michigan Republicans plan to create a challenge list based on returned direct mail, a practice known as "vote caging," Doster replied, 'I think so. I know this has been done in years past … both parties may be doing this.'"

One has to wonder why the Michigan GOP would retain its former counsel for the State Party to "represent GOP election challengers" if truly there were "no plans to do anything," as Mr. Carabelli had claimed.

The Michigan Messenger stood by Ms. Melzer’s account that the Michigan GOP did indeed talk with her about using a foreclosure list to challenge voters, although the online publication did issue a clarification to a different part of the original story (re: Ohio). [1]

I was interviewed by Ms. Melzer for the initial story and I found her to be better informed than most reporters who call me seeking comment. She was very well versed in the subject of vote caging and when she asked me about the comments made by the Michigan GOP official, she seemed to be reading me her interview notes from her conversation with him. She asked for my reaction to the statements she read to me.

I readily admit that I was not a party to her original conversation with the Michigan GOP official. But given my interview with her and what appears to be some inconsistent statements from GOP officials (along with the history of vote caging and vote suppression by the GOP), I would be surprised, to say the least, if the plan of GOP officials in Michigan to challenge foreclosed voters was entirely fictitious. This is especially true as I investigate questionable mailings and tactics by the GOP in several other states (e.g., lifelong Democratic voters, Democratic precinct chairs, and newly registered voters are being sent "Do Not Forward" letters from the RNC in which it is incorrectly claimed the voter is either a Republican or has no party affiliation). Such letters suggest that a massive, possibly nationwide vote caging effort is underway.

Ohio:

As for Ohio, the initial story there suggested that an Ohio GOP official would not rule out the possibility that the party would challenge voters at the polls stating. Quoting the Franklin County GOP chairman, the Columbus Dispatch reported that Priesse "didn't rule out challenges before Nov. 4."

The latest story this week on possible efforts to challenge foreclosed voters came from the NY Times, and contained this passage: "Asked whether his party planned to use foreclosure information to compile challenge lists, Robert Bennett, a spokesman for the Ohio Republican Party, said the party did not discuss its election strategies in public." While this is not an admission that a plan exists to use foreclosure lists to challenge voters, it sure isn’t a denial either.

Then, after the NY Times story was published, Mr. Bennett, like Mr. Carabelli in Michigan, issued a flat denial of any plan to challenge foreclosed voters: "Mr. Bennett sent an e-mail message adding that the Ohio Republican Party condemns 'any effort to challenge the eligibility of voters based on home foreclosures.'" Of course he did. The RNC, which as I noted above has used similar efforts to suppress voting rights in the past, wants to try and distance itself from any such despicable plan to challenge voters who either have lost their homes or may be on the verge of doing so.

If Mr. Bennett, during his initial contact with the NY Times, felt that any plan to compile a list of people whose homes had been foreclosed and then to challenge their right to vote was a practice to be condemned, why wouldn’t he say so then? One explanation, of course, is that at that time he gave his interview, he didn’t condemn the practice.

I’ve been wondering this: why would any political campaign or political party gather a list of names of those who have received a foreclosure notice. I can see gathering statistics on home foreclosure so that a candidate or political party can talk about the current housing and economic woes. But gathering the names and addresses of those who received a foreclosure notice? That can have but one purpose when done in the heat of a campaign: to challenge their right to vote.

One final thought on all this. Note Mr. Bennett’s denial says that he condemns "any effort to challenge the eligibility of voters based on home foreclosures" (emphasis added). So if the Ohio GOP gathers the names of those who have received foreclosure notices and then sends each person on that list a 'Do Not Forward' piece of mail, and then challenges the right to vote of each person whose mail is returned as undeliverable, will Mr. Bennett still claim that he is not challenging the right to vote "based on home foreclosures"? Or will he claim that they are being challenged based on some other reason, such as an address change (rather than based on their name on a foreclosure list)?

The reason this story won’t go away is that it is downright heartless and un-American for any political party to target people’s right to vote because they have lost or are about to lose their home. I hope that the GOP had no such plans. I am not about to accept denials at face value, especially given the long and extensive history of the RNC’s vote suppression efforts. I think we need to wait and see before we reach any final conclusions just yet.

[1] The Messenger put the clarification this way: Citing an article in the Columbus Dispatch, Melzer had reported in her story "Lose your house, lose your vote" that [Douglas] Priesse [chairman of the Franklin County Republican Party in Columbus, Ohio] had said he had not ruled out voter challenges due to "foreclosure related address issues." In his letter, Priesse said that he had not stated or implied any such thing.

While the ongoing dispute in Franklin County does concern voter challenges that are based, in part, on the eligibility of foreclosed homeowners, Priesse’s comments to the Dispatch did not specifically address the issue of foreclosed homeowners.

We have revised the article accordingly.

Violations Reported at 94% of Nursing Homes

Violations Reported at 94% of Nursing Homes

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More than 90 percent of nursing homes were cited for violations of federal health and safety standards last year, and for-profit homes were more likely to have problems than other types of nursing homes, federal investigators say in a report issued on Monday.

About 17 percent of nursing homes had deficiencies that caused “actual harm or immediate jeopardy” to patients, said the report, by Daniel R. Levinson, the inspector general of the Department of Health and Human Services.

Problems included infected bedsores, medication mix-ups, poor nutrition, and abuse and neglect of patients.

Inspectors received 37,150 complaints about conditions in nursing homes last year, and they substantiated 39 percent of them, the report said. About one-fifth of the complaints verified by federal and state authorities involved the abuse or neglect of patients.

About two-thirds of nursing homes are owned by for-profit companies, while 27 percent are owned by nonprofit organizations and 6 percent by government entities, the report said.

The inspector general said 94 percent of for-profit nursing homes were cited for deficiencies last year, compared with 88 percent of nonprofit homes and 91 percent of government homes.

“For-profit nursing homes had a higher average number of deficiencies than the other types of nursing homes,” Mr. Levinson said. “In 2007, for-profit nursing homes averaged 7.6 deficiencies per home, while not-for-profit and government homes averaged 5.7 and 6.3, respectively.”

On Monday, Mr. Levinson issued a compliance guide for nursing homes that says some homes “have systematically failed to provide staff in sufficient numbers and with appropriate clinical expertise to serve their residents.”

Researchers have found that people receive better care at homes with a higher ratio of nursing staff members to patients.

The inspector general said he had found some cases in which nursing homes billed Medicare and Medicaid for services that “were not provided, or were so wholly deficient that they amounted to no care at all.”

Bruce A. Yarwood, president of the American Health Care Association, a trade group, said: “We know we have to do a better job. We have been doing a better job, in treating pressure sores, managing pain and reducing the use of physical restraints.”

Mr. Yarwood said that the inspection system was broken. “It does not reliably measure quality,” he said. “It does not create any positive incentives.”

More than 1.5 million people live in the nation’s 15,000 nursing homes. The homes are typically inspected once a year and must meet federal standards as a condition of participating in Medicaid and Medicare, which cover more than two-thirds of their residents, at a cost of more than $75 billion a year.

Deficiency rates varied widely among states. The proportion of nursing homes cited for deficiencies ranged from 76 percent in Rhode Island to 100 percent in Alaska, Idaho, Wyoming and the District of Columbia.

The average number of deficiencies also varied, from 2.5 deficiencies per nursing home in Rhode Island to 13.3 per home in Delaware.

Mr. Yarwood said: “Inspectors are subjective and inconsistent. They interpret federal standards in different ways.”

In December, the Bush administration plans to begin using a five-star system to describe the overall quality of care. The best homes will get five stars. The rankings will be published on a federal Web site.

Medicare pays a fixed daily amount for each nursing home resident, with higher payments for patients who are more severely ill. Mr. Levinson said some nursing homes had improperly classified patients or overstated the severity of their illnesses so the homes could claim larger Medicare payments.

Effort to Skirt Contracting Rules Unnerves Federal Workers

Effort to Skirt Contracting Rules Unnerves Federal Workers

By Joe Davidson

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When -- maybe that should be if-- Congress passes legislation to bail out floundering financial institutions, the Treasury secretary likely will be granted unusually broad power to waive regulations covering the government's hiring of outside contractors.

But not as much power as he wanted.

While the nation's current economic situation gives everybody a headache, this provision, even though restrained when compared with the original, gives federal employees heartburn.

Treasury Secretary Henry M. Paulson Jr. wants the ability to move quickly to smooth the very rocky road that is now Wall Street. He proposed granting his office essentially unlimited authority to hire outside firms to help manage the assets of companies the government basically nationalizes.

He didn't get that. But under the legislation the House rejected yesterday, he still would have had extensive authority to ignore regulations on federal acquisitions. That provision, or a similar one, probably will be in whatever legislation finally passes.

That's anathema to federal workers who recoil at Bush administration efforts to give public business to private companies.

"We are not comfortable with Treasury being granted authority to waive contracting procedures," said Richard N. Brown, president of the National Federation of Federal Employees, with some bit of understatement. "It is an unnecessary power grab and we can envision this authority being abused."

The bailout bill says Paulson can disregard the regulations "upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest."

Federal acquisition regulations generally can be waived in other cases, but this authority is "much broader" than what officials normally have, according to Alan Chvotkin, executive vice president of the Professional Services Council, the trade association for companies with government contracts.

The government did not use such broad authority even after Hurricane Katrina or during the war in Iraq, he said.

But the power Paulson would get would not be unfettered. He would have to tell Congress what he is doing and why.

Federal regulations now require officials to follow certain procedures when paying contractors to do the government's business. That can be time consuming, by design, because officials must follow specific guidelines for soliciting contracts, seeking broad competition, reviewing proposals and ensuring participation by small, disadvantaged and minority businesses.

When Paulson tried to explain, at a Senate committee hearing last week, how the purchase of services related to the buyout would work, he left committee members wanting.

Consider this exchange with Sen. Daniel K. Akaka (D-Hawaii):

Akaka: Mr. Secretary, you mention about needing the right group of experts to help in this huge effort. Has there been any consideration, Mr. Secretary, given to specifically what parts of the Federal Acquisition Regulations would need to be waived to get contractors and consultants to establish this program?

Paulson: Yeah, we -- we've given a -- a lot of thought to that. We've got -- worked it through very carefully with our -- with our general counsel.

Akaka: Do you plan to have competitive bidding? And if not, why not?

Paulson: Well, we -- we -- we have procedures that are designed to -- to mitigate against conflicts, but we need to move very quickly here. And so we can't go through all of the -- the normal processes or it won't work for the markets.

He won't have to go through the normal processes, but he would have to reassure Congress that he won't flaunt them too much.

For example, if Paulson decided he was not going to follow established rules regarding minority participation in the hiring of outside contractors, the legislation says he still would have to "develop and implement standards and procedures to ensure, to the maximum extent practicable, the inclusion and utilization of minorities."

Chvotkin isn't worried about a lack of oversight on the contracts. What bothers him, is "the lack of resources . . . to do it right the first time."

He's concerned that the process to hire contractors, train them and provide technical support is not in place. Chvotkin also wants Treasury to develop a clear statement of the work to be done, a plan for awarding and administering the contracts, and a strategy to have sufficient government workers on the front end to monitor work being done by the financial experts.

But union boss Brown cites the Federal Retirement Thrift Investment Board that manages the Thrift Savings Plan for federal employees as an example of government workers doing a fine job of asset management.

"It's appalling that the proposal allows for the contracting out of asset management," he said. "We are going to reward the folks that got us into this mess with the biggest new client in history. Give me a break."

Senate To Vote On House Defeated Financial Rescue Plan

Senate To Vote On Financial Rescue Plan

Dow Mounts Huge Comeback After Record Drop

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In a surprise move to resurrect President George W. Bush's $700 billion Wall Street rescue plan, Senate leaders slated a vote on the measure for Wednesday -- but added a tax cut plan already rejected by the House.

Majority Leader Harry Reid, D-Nev., and GOP Leader Mitch McConnell of Kentucky unveiled the plan Tuesday. The Senate plan would also raise federal deposit insurance limits to $250,000 from $100,000, as called for by the two presidential nominees only hours earlier.

The move to add a tax legislation -- including a set of popular business tax breaks -- risked a backlash from House Democrats insisting they be paid for with tax increases elsewhere.

But by also adding legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax, the step could build momentum for the Wall St. bailout from House Republicans.

The surprise move capped a day in which supporters of the imperiled multibillion-dollar economic rescue fought to bring it back to life, courting reluctant lawmakers with a variety of other sweeteners including the plan to reassure Americans their bank deposits are safe.

Before Reid and McConnell's move, lawmakers, President Bush and the two rivals to succeed him all rummaged through ideas new and old, desperately seeking to change a dozen House members' votes and pass the $700 billion plan.

Monday's House vote was a stinging setback to leaders of both parties and to Bush. The administration's proposal, still the heart of the legislation under consideration, would allow the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believe, that would help lift a major weight off the already sputtering national economy.

But the proposal ignited furious responses from thousands of Americans, who flooded congressional telephones, and the deal went down. Some lawmakers reported a shift in constituent calls pouring into their offices Tuesday after the record stock market decline. Many callers, they said, want Congress to do something without "bailing out Wall Street."

Bush renewed his efforts, speaking with Sens. John McCain and Barack Obama and making another statement from the White House. "Congress must act," he declared.

Though stock prices rose, more attention was on credit markets. A key rate that banks charge each other shot higher, further evidence of a tightening of credit availability.

Bush was talking about everyday Americans on Tuesday, not banks or other financial institutions. And no supporters were using the word "bailout."

The president noted that the maximum $700 billion in the proposed bill was dwarfed by the $1 trillion in lost wealth that resulted from Monday's stock market decline.

"The dramatic drop in the stock market that we saw yesterday will have a direct impact on retirement accounts, pension funds and personal savings of millions of our citizens," Bush said. "And if our nation continues on this course, the economic damage will be painful and lasting."

Republicans said the FDIC proposal might attract lawmakers on the left and right who want to help small business owners and avert runs on banks by customers fearful of losing their savings.

Another possible change to the bill would call on regulators to modify "mark to market" accounting rules. Such rules require banks and other financial institutions to adjust the value of their assets to reflect current market prices, even if they plan to hold the assets for years.

Some House Republicans say current rules forced banks to report huge paper losses on mortgage-backed securities, which might have been avoided.

There was a note of irony in that proposal. One Republican familiar with the discussions conceded it amounted to step toward deregulation at a time when Obama, McCain and House members in both parties are clamoring for greater controls on the financial industry.

Liberal Democrats who opposed the bill were suggesting other changes. Their ideas include banning some forms of "short selling," in which investors bet that a stock's value will drop. Republicans showed little interest.

The rescue package was Topic A on the presidential campaign trail.

"The first thing I would do is say, 'Let's not call it a bailout. Let's call it a rescue,"' McCain told CNN. He said, "Americans are frightened right now" and political leaders must give them an immediate solution and a longer-term approach to the problem.

Obama issued a statement saying that significantly increasing federal deposit insurance would help small businesses and make the U.S. banking system more secure as well as restore public confidence.

The bill's defeat in the House came despite furious personal lobbying by Bush and support from House leaders of both parties. But ideological groups on the left and the right organized against it. Even pressure in favor of the bill from some of the biggest special interests in Washington, including the U.S. Chamber of Commerce and the National Association of Realtors, could not sway enough votes.

Prosecutor To Probe Firings Of U.S. Attorneys

Prosecutor To Probe Firings Of U.S. Attorneys

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Attorney General Michael Mukasey has appointed a federal prosecutor to follow up on a scathing investigation of the Bush administration's decision to fire nine U.S. attorneys in 2006. The Justice Department's inspector general and the Office of Professional Responsibility released the report jointly Monday morning. It is harsh, but incomplete, as key officials in the White House and Congress refused to cooperate with the inquiry.

The nearly 400-page report provides a road map to one of the most chaotic periods in the department's history. It has no praise for anyone who was in charge then. According to the report:

  • Attorney General Alberto Gonzales "failed to exercise appropriate leadership and supervision throughout this entire process."
  • Deputy Attorney General Paul McNulty made public statements that were "inconsistent, misleading or inaccurate."
  • Chief of staff Kyle Sampson, who oversaw the U.S. attorney firings, "mishandled the removal process from the outset."

All three of those men resigned over the controversy, as did more than a dozen others.

Investigators found no evidence that anyone at the Justice Department evaluated the reasons for firing each U.S. attorney. They also found that no one tried to keep improper political considerations out of the firing process. That means prosecutors may have been fired for refusing to indict Democrats or for prosecuting Republicans. Indeed, investigators "found substantial evidence that partisan political considerations played a part in the removal of several of the U.S. attorneys."

The most "troubling example," investigators concluded, "was the removal of David Iglesias, the U.S. attorney for New Mexico." Iglesias was fired after Sen. Pete V. Domenici (R-NM) complained to the White House and to Gonzales that Iglesias was not prosecuting Democrats before Election Day.

Iglesias said that when he read the report on Monday morning, he felt "a tremendous sense of relief and vindication."

"What I've been saying all along has now been substantiated," Iglesias said. "That these firings were wrongful, that there was no legal basis for them, and now it's going to the next level, which is they may have broken criminal laws."

Investigators cannot say for sure whether anyone broke a law in the Iglesias case or others, because neither Domenici nor the White House would cooperate with the investigation. Former White House Counsel Harriet Miers refused to testify, as did Karl Rove, former political adviser to President Bush.

At one point, the White House created a timeline of the U.S. attorney firings. They shared that timeline with the Justice Department's Office of Legal Counsel, but when investigators asked for the timeline, the White House told the Office of Legal Counsel not to share the document with the investigators.

Sen. Sheldon Whitehouse (D-RI) blamed Mukasey for tolerating Bush administration stonewalling.

"Why did the attorney general not direct the Office of Legal Counsel to provide the reports?" Whitehouse asked. "Why did he not go to the White House and say, 'If you're not cooperating, I'm not your attorney general any longer?'"

Federal prosecutor Nora Dannehy will now pursue the questions the inspector general was unable to answer. She is a 17-year veteran of the Justice Department who is currently in charge of the U.S. attorney's office in Connecticut.

Mukasey appointed Dannehy to lead the investigation and instructed her to report back within 60 days on the status of the investigation.

One issue she'll examine is whether Gonzales committed any crimes.

George Terwilliger, Gonzales' lawyer, says he is upset the investigation will continue.

"The bottom line is the report does not report any evidence of criminal wrongdoing," Terwilliger said. "And whether they were able to answer all the questions they wanted to ask or not is beside the point."

Former U.S. attorneys are a close-knit group, and on Monday, many of them were reading the report. Republican Matt Orwig of Dallas — who was not one of the nine attorneys fired in 2006 — says he found the report "literally sickening."

Orwig was once called a "loyal Bushie," a description he says he finds offensive. Orwig says the Justice Department has always had a wall of independence from political influence, and "that wall of independence was just completely torn down, burned and hauled off" during the U.S. attorney firings scandal. Orwig says it will take years to rebuild that wall.

GOP Consultant Subpoenaed in Case Alleging Tampering with 2004 Election

GOP Consultant Subpoenaed in Case Alleging Tampering with 2004 Election

By Larisa Alexandrovna and Muriel Kane

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A high-level Republican consultant has been subpoenaed in a case regarding alleged tampering with the 2004 election.

Michael S. Connell was served with a subpoena in Ohio on Sept. 22 in a case alleging that vote-tampering during the 2004 presidential election resulted in civil rights violations. Connell, president of GovTech Solutions and New Media Communications, is a website designer and IT professional who created a website for Ohio's secretary of state that presented the results of the 2004 election in real time as they were tabulated.

At the time, Ohio's Secretary of State, Kenneth J. Blackwell, was also chairman of Bush-Cheney 2004 reelection effort in Ohio.

Connell is refusing to testify or to produce documents relating to the system used in the 2004 and 2006 elections, lawyers say. His motion to quash the subpoena asserts that the request for documents is burdensome because the information sought should be "readily ascertainable through public records request" -- but also, paradoxically, because "it seeks confidential, trade secrets, and/or proprietary information" that "have independent economic value" and "are not known to the public, or even to non-designated personnel within or working for Mr. Connell's business."

According to sources close to the office of Clifford Arnebeck, one of the Ohio attorneys who brought the case, Arnebeck intends to ask the court to compel Connell to testify. An emergency conference with the judge, originally scheduled for Monday, is to be rescheduled.

King Lincoln Bronzeville Neighborhood Association v. Blackwell

The case, known as King Lincoln Bronzeville Neighborhood Association v. Blackwell, was filed against Kenneth J. Blackwell on Aug. 31, 2006 by Columbus attorneys Clifford Arnebeck, Robert Fitrakis and others. It initially charged Blackwell with racially discriminatory practices -- including the selective purging of voters from the election rolls and the unequal allocation of voting machines to various districts -- and asked for measures to be taken to prevent similar problems during the November 2006 election.

On Oct. 9, 2006, an amended complaint added charges of various forms of ballot-rigging as also having the effect of "depriving the Plaintiffs of their voting rights, including the right to have their votes successfully cast without intimidation, dilution, cancellation or reversal by voting machine or ballot tampering." A motion to dismiss the case as moot was filed following the November 2006 election, but it was instead stayed to allow for settlement discussions.

The case took on fresh momentum earlier this year when Arnebeck announced in July that he was filing to "lift the stay in the case [and] proceed with targeted discovery in order to help protect the integrity of the 2008 election." The new filing was inspired in part by the coming forward as a whistleblower of GOP IT security expert Stephen Spoonamore, who said he was prepared to testify to the plausibility of electronic vote-rigging having been carried out in 2004.

Arnebeck's hope was that in the course of the discovery procedure it would be possible to subpoena Michael Connell, former White House Deputy Chief of Staff Karl Rove, and others to obtain additional information and improve the focus of the case. The stay was lifted Sept. 19, 2008 by an order from Magistrate Judge Terrence P. Kemp of the United States District Court for the Southern District of Ohio, and a subpoena was served to Connell on the following Monday, Sept. 22.

Allegations Against Connell

The interest in Mike Connell stems from his association with a firm called GovTech, which he had spun off from his own New Media Communications under his wife Heather Connell's name. GovTech was hired by Ohio Secretary of State Kenneth Blackwell to set up an official election website at election.sos.state.oh.us to presented the 2004 presidential returns as they came in.

Connell is a long-time GOP operative, whose New Media Communications provided web services for the Bush-Cheney '04 campaign, the US Chamber of Commerce, the Republican National Committee and many Republican candidates. This in itself might have raised questions about his involvement in creating Ohio's official state election website.

However, the alternative media group ePlubibus Media further discovered in November 2006 that election.sos.state.oh.us was hosted on the servers of a company in Chattanooga, TN called SmarTech, which also provided hosting for a long list of Republican Internet domains.

"Since early this decade, top Internet 'gurus' in Ohio have been coordinating web services with their GOP counterparts in Chattanooga, wiring up a major hub that in 2004, first served as a conduit for Ohio's live election night results," researchers at ePluribus Media wrote.

A few months after this revelation, when a scandal erupted surrounding the firing of US Attorneys for reasons of White House policy, other researchers found that the gwb43 domain used by members of the White House staff to evade freedom of information laws by sending emails outside of official White House channels was hosted on those same SmarTech servers.

Given that the Bush White House used SmarTech servers to send and receive email, the use of one of those servers in tabulating Ohio's election returns has raised eyebrows. Ohio gave Bush the decisive margin in the Electoral College to secure his reelection in 2004.

IT expert Stephen Spoonamore says the SmartTech server could have functioned as a routing point for malicious activity and remains a weakness in electronic voting tabulation.

According to Spoonamore's Sept. 17 affidavit, the "computer placement, in the middle of the network, is a defined type of attack." Spoonamore describes this as a "Man in the Middle Attack" or MIM.

"It is a common problem in the banking settlement space," he writes. "A criminal gang will introduce a computer into the outgoing electronic systems of a major retail mall, or smaller branch office of a bank. They will capture the legitimate transactions and then add fraudulent charges to the system for their benefit."

"Any time all information is directed to a single computer for consolidation, it is possible, and in fact likely, that single computer will exploit the information for some purpose," he adds. "In the case of Ohio 2004, the only purpose I can conceive for sending all county vote tabulations to a GOP managed Man-in-the-Middle site in Chattanooga before sending the results onward to the Sec. of State, would be to hack the vote at the MIM."

Hold letters were sent out in July to parties in the case, informing them of their obligation not to destroy relevant documentation. One such letter went to Attorney General Michael Mukasey, asking him to advise the federal government of its responsibility to preserve emails from Rove.

Arnebeck explained, "We expressed concern about the reports that Mr. Rove destroyed his emails and suggested that we want the duplicates that should exist [be put] under the control of the Secret Service and be sure that those are retained, as well as those on the receiving end in the Justice Department and elsewhere, that those documents are retained for purposes of this litigation, in which we anticipate Mr. Rove will be identified as having engaged in a corrupt, ongoing pattern of corrupt activities specifically affecting the situation here in Ohio."

More recently, Newsweek's Michael Isikoff has revealed that John McCain's presidential campaign paid nearly a million dollars for web services to a firm called 3eDC, created and partly owned by McCain campaign manager Rick Davis. According to an archived version of a 3eDC webpage from 2007, that firm's five "strategic partners" included not only Connell's New Media Communications but also Campaign Solutions -- a firm run by Connell's sometimes-partner, Rebecca Donatelli -- and a component of SmarTech called AirNet.

The Origin of the Case

The roots of the King Lincoln Bronzeville case go back to the case of Moss v. Bush, which Arnebeck, Fitrakis and other attorneys filed immediately after the 2004 presidential election. In that filing, they challenged the results of the Ohio voting on the basis of numerous irregularities and allegations of fraud and sought to depose President George W. Bush, Vice President, Dick Cheney, and then-White House Deputy Chief of Staff, Karl Rove, as well as Secretary Blackwell.

That case was dropped by the plaintiffs in January 2005, after the US Senate accepted the casting of Ohio's electoral votes for George W. Bush. Two weeks later, Ohio's Republican Attorney General James Petro attempted to sanction and fine the attorneys for what he described as a "frivolous filing," but they were supported by Rep. John Conyers (D-MI) -- then the ranking member of the House Judiciary Committee -- who had already held a hearing at which Arnebeck and Jesse Jackson testified concerning the suppression of minority votes. Those same concerns are now at the heart of King Lincoln Bronzeville.

Bush Had No Plan to Catch Bin Laden after 9/11

Bush Had No Plan to Catch Bin Laden after 9/11

Gareth Porter

Go To Original

New evidence from former U.S. officials reveals that the George W. Bush administration failed to adopt any plan to block the retreat of Osama bin Laden and other al Qaeda leaders from Afghanistan to Pakistan in the first weeks after 9/11.

That failure was directly related to the fact that top administration officials gave priority to planning for war with Iraq over military action against al Qaeda in Afghanistan.

As a result, the United States had far too few troops and strategic airlift capacity in the theatre to cover the large number of possible exit routes through the border area when bin Laden escaped in late 2001.

Because it had not been directed to plan for that contingency, the U.S. military had to turn down an offer by Pakistani President Pervez Musharraf in late November 2001 to send 60,000 troops to the border passes to intercept them, according to accounts provided by former U.S. officials involved in the issue.

On Nov. 12, 2001, as Northern Alliance troops were marching on Kabul with little resistance, the CIA had intelligence that bin Laden was headed for a cave complex in the Tora Bora Mountains close to the Pakistani border.

The war had ended much more quickly than expected only days earlier. CENTCOM commander Tommy Franks, who was responsible for the war in Afghanistan, had no forces in position to block bin Laden's exit.

Franks asked Lt. Gen. Paul T. Mikolashek, commander of Army Central Command (ARCENT), whether his command could provide a blocking force between al Qaeda and the Pakistani border, according to David W. Lamm, who was then commander of ARCENT Kuwait.

Lamm, a retired Army colonel, recalled in an interview that there was no way to fulfill the CENTCOM commander's request, because ARCENT had neither the troops nor the strategic lift in Kuwait required to put such a force in place. "You looked at that request, and you just shook your head," recalled Lamm, now chief of staff of the Near East South Asia Centre for Strategic Studies at the National Defence University.

Franks apparently already realised that he would need Pakistani help in blocking the al Qaeda exit from Tora Bora. Secretary of Defence Donald Rumsfeld told a National Security Council meeting that Franks "wants the [Pakistanis] to close the transit points between Afghanistan and Pakistan to seal what's going in and out", according to the National Security Council meeting transcript in Bob Woodward's book "Bush at War".

Bush responded that they would need to "press Musharraf to do that".

A few days later, Franks made an unannounced trip to Islamabad to ask Musharraf to deploy troops along the Pakistan-Afghan border near Tora Bora.

A deputy to Franks, Lt. Gen. Mike DeLong, later claimed that Musharraf had refused Franks's request for regular Pakistani troops to be repositioned from the north to the border near the Tora Bora area. DeLong wrote in his 2004 book "Inside Centcom" that Musharraf had said he "couldn't do that", because it would spark a "civil war" with a hostile tribal population.

But U.S. Ambassador Wendy Chamberlin, who accompanied Franks to the meeting with Musharraf, provided an account of the meeting to this writer that contradicts DeLong's claim.

Chamberlin, now president of the Middle East Institute in Washington, recalled that the Pakistani president told Franks that CENTCOM had vastly underestimated what was required to block bin Laden exit from Afghanistan. Musharraf said, "Look you are missing the point: there are 150 valleys through which al Qaeda are going to stream into Pakistan," according to Chamberlin.

Although Musharraf admitted that the Pakistani government had never exercised control over the border area, the former diplomat recalled, he said this was "a good time to begin". The Pakistani president offered to redeploy 60,000 troops to the area from the border with India but said his army would need airlift assistance from the United States to carry out the redeployment.

But the Pakistani redeployment never happened, according to Lamm, because it wasn't logistically feasible. Lamm recalled that it would have required an entire aviation brigade, including hundreds of helicopters, and hundreds of support troops to deliver that many combat troops to the border region -- far more than was available.

Lamm said the ARCENT had so few strategic lift resources that it had to use commercial aircraft at one point to move U.S. supplies in and out of Afghanistan.

Even if the helicopters had been available, however, they could not have operated with high effectiveness in the mountainous Afghanistan-Pakistan border region near the Tora Bora caves, according to Lamm, because of the combination of high altitude and extreme weather.

Franks did manage to insert 1,200 Marines to Kandahar on Nov. 26 to establish control of the airbase there. They were carried to the base by helicopters from an aircraft carrier that had steamed into the Gulf from the Pacific, according to Lamm.

The marines patrolled roads in the Kandahar area hoping to intercept al Qaeda officials heading toward Pakistan. But DeLong, now retired from the Army, said in an interview that the Marines would not have been able to undertake the blocking mission at the border. "It wouldn't have worked -- even if we could have gotten them up there," he said. "There weren't enough to police 1,500 kilometres of border."

U.S. troops probably would also have faced armed resistance from the local tribal population in the border region, according to DeLong. The tribesmen in local villages near the border "liked bin Laden," he said "because he had given them millions of dollars."

Had the Bush administration's priority been to capture or kill the al Qaeda leadership, it would have deployed the necessary ground troops and airlift resources in the theatre over a period of months before the offensive in Afghanistan began.

"You could have moved American troops along the Pakistani border before you went into Afghanistan," said Lamm. But that would have meant waiting until spring 2002 to take the offensive against the Taliban, according to Lamm.

The views of Bush's key advisers, however, ruled out any such plan from the start. During the summer of 2001, Rumsfeld had refused to develop contingency plans for military action against al Qaeda in Afghanistan despite a National Security Presidential Directive adopted at the Deputies' Committee level in July and by the Principles on Sep. 4 that called for such planning, according to the 9/11 Commission report.

Rumsfeld and Deputy Defence Secretary Paul Wolfowitz resisted such planning for Afghanistan because they were hoping that the White House would move quickly on military intervention in Iraq. According to the 9/11 Commission, at four deputies' meetings on Iraq between May 31 and Jul. 26, 2001, Wolfowitz pushed his idea to have U.S. troops seize all the oil fields in southern Iraq.

Even after Sep. 11, Rumsfeld, Wolfowitz and Vice President Dick Cheney continued to resist any military engagement in Afghanistan, because they were hoping for war against Iraq instead.

Bush's top secret order of Sep. 17 for war with Afghanistan also directed the Pentagon to begin planning for an invasion of Iraq, according to journalist James Bamford's book "Pretext for War".

Cheney and Rumsfeld pushed for a quick victory in Afghanistan in NSC meetings in October, as recounted by both Woodward and Undersecretary of Defence Douglas Feith. Lost in the eagerness to wrap up the Taliban and get on with the Iraq War was any possibility of preventing bin Laden's escape to Pakistan.

*Gareth Porter is an investigative historian and journalist specialising in U.S. national security policy. The paperback edition of his latest book, "Perils of Dominance: Imbalance of Power and the Road to War in Vietnam", was published in 2006.

The Anthrax Case Reopens: Why Did the FBI Let the Fort Detrick Scientists Investigate Themselves?

The Anthrax Case Reopens: Why Did the FBI Let the Fort Detrick Scientists Investigate Themselves?

Bill Simpich

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The Congressional anthrax hearings of September 16-17 revealed that public pressure is keeping the doors open in the anthrax case. FBI Director Robert Mueller promised that the FBI will provide their evidence to a panel of experts for scientific evaluation. The battle will now turn to the independence of this panel, and whether "all evidence" or merely "scientific evidence" will be under review.

During the hearings, Mueller found himself under fire by Senator Patrick Leahy and Congressman John Conyers for not having answers to their questions. Republican Arlen Specter was furious at Mueller for his unwillingness to assure them that Congress would have a role in determining the panel's composition.

Meanwhile, new evidence shows just how deeply wrong ABC and Washington Post reporters have been over the years on their coverage of the anthrax attacks. They can't have it both ways: Either they made repeated "mistakes" by relying on their sources, or several people deliberately lied in order to advance war on Iraq.

In his recent book Taking Heat, former White House secretary Ari Fleischer wrote that Bush was more shook up by the anthrax attacks than by any other event. White House officials repeatedly pressed Mueller to prove it was a second-wave assault by al-Qaeda or Iraq. After days of provocative statements designed to scare the American people, Cheney himself believed that he had been exposed to anthrax. Although the test results were negative, October 18, 2001, was the moment when Cheney decided to withdraw to an "undisclosed location" and carry biodefense protection during all of his mysterious travels.

The True Story Is Emerging

Valuable light was shed on the case recently by the admission of acclaimed scientist Peter Jahrling that he had made an "honest mistake" when he told the White House on October 24, 2001, that he saw signs that silica had been added to the anthrax that had arrived at Senator Daschle's office the previous week. If silica or another anti-clumping substance had been artificially added or coated onto this anthrax, it would have made it more buoyant and easier to penetrate the lungs. Jahrling, a virologist, said that he had been "overly impressed" by what he thought he had seen, and added that "I should never have ventured into this area."

Jahrling's error was seized upon just two days later on October 26, 2001, when Gary Matsumoto, Brian Ross, and other members of ABC News issued a national story asserting that Iraqi-made bentonite was coating the anthrax. It took until the 29th for the head of Fort Detrick to state authoritatively that Matsumoto and ABC had gotten it wrong. Even then, Matsumoto continued to argue that either Fort Detrick was wrong about the bentonite or the story about the presence of silica provided an alternative theory for "state-sponsored terrorism."

During this same time period, Matsumoto was in the midst of conducting FOIA requests for the anthrax records (see page 15) maintained by Bruce Ivins. Matsumoto had been researching Ivins for some time, as he believed that Ivins' experimental anthrax vaccine was the cause of many injuries among veterans during and after the 1991 Gulf War. Years later, Matsumoto wound up writing a book on the subject, Vaccine A, accusing Ivins and his fellow inventors of being responsible for Gulf War Syndrome. This controversy caused the FDA to suspend further production of the anthrax vaccines for the market.

Matsumoto's theory that the attack anthrax contained "additives and coatings" was thoroughly rebutted in a Scientific American article printed last Friday, which detailed Sandia National Labs' investigation in early 2002. The Department of Justice had asked Sandia to see if Matsumoto and Jahrling's claims of an anti-clumping additive coating the anthrax were correct. It was already undisputed that this anthrax was ultra-pure, and the finding that they contained a trillion spores per gram was a sign that it was of US origin.

In February 2002, Sandia materials scientist Joe Michael and his team found that silicon was indeed present in the anthrax. Then the team stepped it up a notch with the use of highly sensitive microscopes not available to earlier researchers. Everyone was stunned by what they saw: The silicon was growing naturally within the anthrax spores - it was not artificially added, and there was no coating or residue of silicon anywhere outside the anthrax. The team could find no way for the silicon to enter the spores without leaving any residue.

By March of 2002, Michael was convinced that there was no additive or coating in the anthrax. However, Michael and his team were forced to keep silent until last month, when their promise to keep silent was lifted. Even when the Armed Forces Institute of Pathology mistakenly identified a finding of silicon and water in the anthrax as "silica" (silicon dioxide) in late 2002, and Matsumoto used this story as the centerpiece of his Washington Post article on the anniversary of the attacks, Michael had to maintain silence.

Why Observers Don't Trust the FBI

The irony of the current situation is that although the FBI appears to have correctly analyzed the contents of the anthrax, many observers simply don't believe the agency. It's understandable when one considers the FBI's track record in this case. Just last month, without revealing any supporting evidence, US Attorney Jeff Taylor and FBI official Joseph Persichini announced their conviction that not only was Bruce Ivins the anthrax attacker, but that "he acted alone." A Leahy aide said that law enforcement agencies make such statements "to make people feel better."

Senator Leahy told Director Mueller at the Wednesday hearing that "I believe there are others involved, either as accessories before or accessories after the fact ... I just want you to know how I feel about it, as one of the people who was aimed at in the attack." FBI investigator Thomas Dellafera has stated in his search warrant affidavit (See page 15) that he believes Leahy and Daschle were targeted by the anthrax attacker as revenge for their roles - while they served as judiciary committee chief and majority leader - in opposing swift passage of the PATRIOT Act.

As noted above, the immediate assumption during the initial days of the investigation was that Iraq was the anthrax source. However, on October 5, 2001, Dr. Paul Keim at Northern Arizona University told the Federal Centers for Disease Control that reporter Robert Stevens had been stricken by the Ames strain of anthrax (Philadelphia Inquirer, 9/1/2008); such a finding is very strong evidence of US origin. Five days later, the FBI allowed what was mistakenly believed to be the original batch of the Ames strain of anthrax to be destroyed by Iowa University officials who had it in their custody. The FBI claimed it never approved the destruction and merely failed to oppose it. (New York Times, 11/9/2001)

During this period, the FBI was relying on Fort Detrick for scientific advice. Bruce Ivins handled the anthrax shortly after it arrived at Democratic majority leader Tom Daschle's office on October 15. In 2002, Judith Miller wrote that "when Fort Detrick scientists attempted to place it on a scale, many of the spores drifted away, depriving investigators of critical evidence." (Germs, p. 325) Ivins' supervisor, Jeffrey Adamovicz, claims that the envelope was placed in a double-sealed bag before it was opened, but admits that Ivins was present and that the floating anthrax was "very scary." (New York Times, 8/7/2008).

Ivins then went to the Pentagon to discuss the results. "It puts us in a difficult position," one senior law enforcement official admitted in December 2001. "We're working with these people and looking at them as potential suspects."

In the aftermath of the anthrax scare, the FBI got together with a number of renowned scientists and made a plan for a battery of tests on the composition of the spores. By December, it was clear that the anthrax strain used in the attacks was identical with a strain originating from Dugway Proving Grounds in Utah, that Dugway and four other labs had material with the same genetic fingerprint, and that all five labs received their strain from Fort Detrick. (Rick Weiss & Susan Schmidt, Washington Post, 12/16/01) A BBC investigation concluded that Fort Detrick was the focus of the FBI's investigation (Newsnight, 3/14/02), while the Wall Street Journal's sources concluded the FBI was looking at Fort Detrick and Dugway.

Professor Barbara Hatch Rosenberg, a former bioterrorism consultant to President Clinton, said publicly during February 2002 that the FBI was focusing on a former Fort Detrick scientist who now worked for a Washington, DC-area military contractor for the CIA. Although she did not reveal the name at the time, she was referring to virologist Dr. Steven Hatfill. This marked a shift from her stated belief just two months earlier that the culprit was a microbiologist working at Fort Detrick. A few days later, other government sources affirmed to the Washington Times that Hatfill was the prime suspect.

During this time, the FBI made a very puzzling decision. Although the evidence was pointing to a scientist within Fort Detrick as the probable culprit, they continued to send anthrax investigation samples to that facility for testing. Forensic expert Henry C. Lee stated that unless the FBI was convinced that the Fort Detrick scientists were innocent, the agency wouldn't be sending them any samples.

"These last two months, [FBI agents] have probably interviewed everyone at Fort Detrick and didn't find a suspect ... They don't want to publicly rule anyone out, but their actions suggest that's what's going on. They don't think it's anybody who currently works at Detrick." (Anthrax Story: Detrick Cleared, Frederick News-Post, 3/6/02)

Between September 11 and March, Fort Detrick received 24,000 samples of potential bioterrorism evidence for Ivins and 90 other scientists to analyze. About a dozen members of Fort Detrick's bacteriological division ultimately testified before the grand jury.

The FBI admits that Ivins helped them to design the protocol for proceeding with future examinations of the anthrax during February 2002. Accordingly, within five days of the issuance of the subpoena that month, Ivins was the first scientist to provide a sample from his lab. However, it was not in full compliance with the protocol. "He didn't use the proper medium ... there was no guarantee that he prepared it in the way that the instructions directed."

For that reason, the FBI claims that they destroyed their February 2002 sample, and asked him to provide a second one in April 2002. The second sample was improper, as Ivins allegedly did not take it from the right flask. The FBI admits that the destruction of this first sample marks the only destruction of any anthrax material obtained during this investigation. In a stroke of good luck, the aforementioned Dr. Keim at Northern Arizona University kept a copy of this sample, and provided it to the FBI in 2006 when a new team of investigators re-examined the evidence.

In May 2002, it was reported that the FBI had previously conducted polygraphs of 10 Fort Detrick scientists. FBI affidavits reveal that Ivins was among that group. The agency then expanded the polygraphs to 200 employees of Fort Detrick and Dugway. The next month, the FBI's questioning of a former government microbiologist indicated their working theory: A Fort Detrick insider produced the spores at the lab, and then refined them into a powder at an unknown location. On June 25, the FBI conducted its first search of Hatfill's home and property, the first in a series of a four year investigation.

From that point on, the four-year wild goose chase of Steven Hatfill as a suspect began in earnest. During this time, Fort Detrick's former bacteriology chief Gerry Andrews stated that "for years ... Dr. Ivins himself worked directly with the evidence. The FBI asked Dr. Ivins to help them with the forensics in the case by analyzing the contents of suspicious letters."

FBI investigator Dellafera's affidavit (See page 15) states that by this time "the FDA had re-approved [Ivins'] vaccine for human use, production at Bioport resumed, and anthrax research at [Fort Detrick] continued without interruption ... Dr. Ivins thereafter received 'the highest honor given to Defense Department civilians at a Pentagon ceremony ... for his work in getting the anthrax vaccine back into production.'" A multi-billion dollar bioterrorism industry was jump-started, making anthrax readily accessible to thousands of new employees.

During late 2002, Ivins was on the scene at one of the searches at Hatfill's pond. During that search, a homemade glove box and a biological safety device with hand-holes to protect someone working with dangerous germs were found in the pond. The box yielded no forensic evidence. The pond was subsequently drained, to no avail. The discovery of the box is not proof that Ivins planted the box on Hatfill's property, or that Hatfill hid it there. It is, of course, highly provocative.

A break in the case came in 2003, when a handful of genetic mutations - distinguishing marks in the DNA - were noticed in cultures created from spores from the attack envelopes. Four mutations were turned into tests for the 1,070 samples. Seven samples tested positive for all four mutations. Notebooks revealed that all seven samples originated from two flasks in Ivins' lab, known as RMR-1029. The FBI moved in 2004 and seized the RMR-1029 flasks. Like the seven samples, these flasks tested positive for all four mutations.

By late 2005 or so, this positive finding was proven scientifically sound. The bureau then turned to a new phase: Who had access to these flasks and their seven descendents? The next three years were spent looking at Ivins and the "100 scientists" that the FBI estimates had such access. The FBI did not ask Dr. Keim for his copy of Ivins' original sample from February 2002 until late 2006, when a new team of FBI agents re-examined the evidence. In April 2007, the DOJ prosecutors mailed a letter to Ivins telling him that he was "not a target" in the investigation. (New York Times, 9/6/2008)

For the last year of his life, the FBI violated their guidelines by openly surveilling Ivins in their cars. (New York Times, 8/4/2008) FBI head investigator Robert Roth admitted in the Hatfill affair that this tactic violated agency guidelines. "Generally, it's supposed to be covert," Roth said. (Associated Press, 8/5/2008)

Ivins' security clearance at Fort Detrick was not taken away until November 2007, and he continued to work at Fort Detrick until three weeks before his death. (Herald-Mail, 8/8/2008)

A Curious Story

Look at this curious story, drawn from the public record. The Bush administration wanted to pin the blame for the anthrax attacks on Iraq. Gary Matsumoto and other members of ABC and the Washington Post helped strengthen that story - then and later - even though it was unsupported by the evidence. Matsumoto is a man obsessed with the belief that Ivins killed or injured thousands of Gulf War vets due to errors that were made in the production of his experimental anthrax vaccine.

During the first days of the case, one or more FBI agents permitted the destruction of an anthrax sample that made it more difficult to trace the identity of the culprit. The FBI turned to Fort Detrick to review the anthrax evidence in this case, even though the Fort Detrick scientists were central among the prime suspects. Ivins was with the first group to handle the anthrax evidence, may have destroyed some of the evidence under his care, and proceeded to report to the Pentagon.

The FBI continued to rely on Ivins for developing the protocol for the handling of the anthrax evidence, and to examine suspicious letters for a period of years. Of the two samples obtained from Ivins in 2002, one or more FBI agents caused the destruction of the one that pointed strongly to his guilt, and Ivins allegedly provided the second sample from the wrong flask. Two years later, in 2004, the FBI seized two key evidence flasks from Ivins' custody that proved to contain the ancestor of all seven samples that matched the attack anthrax. Although this analysis was proven to be scientifically sound by late 2005, Ivins did not lose his security clearance until November 2007, and even then was allowed access to Fort Detrick until three weeks before his death.

It is curious that Ivins maintained his security clearance for two years, and access to Fort Detrick for three years, while in the cross-hairs of this investigation.

It is curious that the FBI ever relied on Fort Detrick for evidence testing, since many of its scientists were also under suspicion from day one.

More must be learned about the stories of repeated destruction or fabrication of evidence:

  • The FBI's permission to destroy what was believed to be the original Ames strain;

  • Ivins' alleged loss of much of the Daschle anthrax;

  • Matsumoto's sources' claims of bentonite and other coated additives pointing to Iraqi origin;

  • The FBI agents who caused the destruction of Ivins' February 2002 sample;

  • Rosenberg being "tipped" away from a Fort Detrick microbiologist to a DC-area employee for a CIA contractor by February 2002 (Hatfill);

  • Ivins allegedly providing a phony April 2002 sample.
  • More must be learned about why the Department of Justice told Ivins that he was not a target in April 2007. Perhaps it was to lull Ivins into a false sense of security.

    More must be learned about why the FBI hounded Ivins and his family with overt surveillance for the last year of his life until he committed suicide. Hatfill received a settlement of 5.8 million dollars, in part for similar conduct in his case. Such overt surveillance was in defiance of the established agency guidelines. Such intense surveillance can cause a suspect to commit suicide.

    It's good that the scientific evidence will be reviewed, but that is not enough. A special prosecutor must be appointed in a neutral fashion who can review every aspect of the FBI's work in this case. Congressman Rush Holt is calling for a national commission that would assess the investigation and Ivins' culpability, but a prosecutor might have better horse-sense. There is no way to be certain of Ivins' guilt at this point. Based only on what has been publicly released, the claim that the perpetrator "acted alone" may prove to be an obstruction of justice.

    U.S. ARMY TROOPS TO SERVE AS U.S. POLICEMEN?

    U.S. ARMY TROOPS TO SERVE AS U.S. POLICEMEN?

    By Chuck Baldwin

    Go To Original

    According to the Army Times (dated Tuesday, September 30, 2008), "Beginning Oct. 1 for 12 months, the 1st BCT [Brigade Combat Team] will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks."

    The article continued by saying, "But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

    "After 1st BCT finishes its dwell-time mission, expectations are that another, as yet unnamed, active-duty brigade will take over and that the mission will be a permanent one."

    The Times column also reported that the Army brigade "may be called upon to help with civil unrest and crowd control . . ." It seems that the Army's new domestic duties also include "traffic control" as well as subduing "unruly or dangerous individuals."

    The brigade will be known for the next year as a Consequence Management Response Force, or CCMRF (pronounced "sea-smurf").

    I am assuming that the planners and promoters of this newfound function for the Army brigade envision the Army assisting local first responders in dealing with natural emergencies such as hurricanes, earthquakes, and the like. Good intentions notwithstanding, to assign domestic police duties to the U.S. military is extremely disturbing.

    To understand my concern for this new "homeland Army brigade," it is important that we rehearse the principles of liberty as they relate to standing armies.

    One of America's most sacred principles has always been that the U.S. military was never to be used for domestic law enforcement. The fear of standing armies ran very deep in the hearts and minds of America's founders. The tyranny and misery inflicted upon the colonies by British troops weighed heavily upon those who drafted our Constitution and Bill of Rights. In their minds, the American people would never again be subjected to the heavy weight of army boots. Furthermore, they insisted that America would have a civilian--not military--government.

    And after the fiasco of the abuse of federal troops in the South following the War Between the States, the doctrine of Posse Comitatus was enacted into law. The Wikipedia online encyclopedia says this about Posse Comitatus:

    "The Act prohibits most members of the federal uniformed services ... from exercising nominally state law enforcement police or peace officer powers that maintain 'law and order' on non-federal property. . . .

    "The statute generally prohibits federal military personnel and units of the United States National Guard under federal authority from acting in a law enforcement capacity within the United States, except where expressly authorized by the Constitution or Congress. . . .

    "The Posse Comitatus Act and the Insurrection Act substantially limit the powers of the federal government to use the military for law enforcement."

    The Posse Comitatus Act was passed in 1878 and was universally accepted as being a very just--and extremely important--law of the land.

    But in 2006, President George W. Bush pushed a Republican-controlled Congress to pass the John Warner National Defense Authorization Act for Fiscal Year 2007, which included a section titled "Use of the Armed Forces in major public emergencies." This section provided that "The President may employ the armed forces to restore public order in any State of the United States the President determines...." In effect, this bill obliterated Posse Comitatus.

    When the Democrat-controlled Congress passed the 2008 National Defense Authorization Act, however, the restrictions of Posse Comitatus were restored. But when President Bush signed the Act into law, he attached a signing statement (Executive Order) indicating that the Executive Branch did not feel bound by the changes enacted by the repeal. Translated: President Bush wiped out Posse Comitatus by Executive Order.

    Now, just a few months after expunging Posse Comitatus, President Bush has authorized an Army brigade to be assigned the new role of dealing exclusively with domestic law enforcement and related duties. This evokes serious questions.

    Who will give the order to send U.S. troops against American civilians, and under what circumstances? What will the rules of engagement be? How will "unruly" and "dangerous" be defined? How will soldiers be asked to deal with "crowd" or "traffic" control? And perhaps the biggest question is, Once we begin to go down this road, where will it lead?

    For several years, the federal government has been accumulating to itself more and more authority that was historically understood to reside within the states and local communities. More and more, our police departments have taken on the image and tactics of the armed forces. And to a greater and greater degree, the rights and liberties of the American people are being sacrificed on the altar of "national security." It seems to me that to now ascribe law enforcement duties to the U.S. Army only serves to augment the argument that America is fast approaching police state status.

    If Hurricane Katrina is the template that our federal government is using as a model for future events, Heaven help us! Do readers remember how National Guard troops were used to confiscate the personal firearms of isolated and vulnerable civilians shortly after that hurricane devastated the New Orleans area? Do you remember how representatives of the federal government were calling upon pastors and ministers to act as spokesmen for gun confiscation? Is this what the new Army brigade is preparing for? And do President Bush and his military planners envision an even broader role for military troops on American soil?

    Add to the above rumors of thousands of plastic caskets--along with thousands of portable prison cells--being shipped and stored across the country, and one is left to ask, Exactly what is it that our federal government is planning?

    I think there is an even bigger question, What exactly will members of our armed forces do if and when they are commanded to seize Americans' firearms, arrest them at gun point, or even fire upon them? How many soldiers and Marines love liberty and constitutional government enough to resist such orders, should they be given? And how many officers would resist issuing such orders?

    Remember, it is the job of the armed forces to kill people and blow up things, not to do police work. Then again, Presidential administrations from both major parties have been using the U.S. military as U.N. "peacekeepers" for decades now. So, was all of this preparation for what is yet to take place in the United States?

    God forbid that any of the above should actually take place in our beloved land, but I believe it would be naïve to not see that the actions and attitudes of the federal government over the past several years do nothing to assuage such fears.

    Exercise readies first units for NORTHCOM assignment

    Exercise readies first units for NORTHCOM assignment

    Go To Original

    The exercise scenario was a sobering one: a 10-kiloton nuclear device detonated in America's heartland, quickly overwhelming civilian responders.

    Military leaders who recently trained for this response say they are now thinking differently about how to move equipment, extract the injured and take care of people following this type of attack.

    Their insights came from "Vibrant Response," a week-long command post exercise designed to train the commanders and staff of the nation's dedicated force for responding to chemical, biological, radiological, nuclear and high-yield explosive incidents, or CBRNE incidents.

    The units completed the exercise Sept. 18 at Fort Stewart, Ga., just two weeks before their force, the CBRNE Consequence Management Response Force, or CCMRF, will be assigned to U.S. Northern Command to begin its mission.

    "Assigning them will allow Northern Command to directly influence the operational and training focus of the forces and ensure a trained and ready response force when needed," said Col. Lou Vogler, chief of future operations at U.S. Army North.

    U.S. Army North conducted the exercise while its subordinate, Joint Task Force Civil Support, provided command and control for the CCMRF.

    Joint Task Force Civil Support -- based at Fort Monroe, Va. -- plans, trains, develops policy and determines the way ahead for DOD CBRNE response, said the force's commander, Army Maj. Gen. Daniel "Chip" Long.

    Commanders and staff in the three task forces - Operations, Medical and Aviation - say that the academics and command post exercise offered valuable new perspectives for the Soldiers, Sailors, Airmen and Marines assuming this important mission.

    Task Force Operations

    Responding to a catastrophic chemical, nuclear or biological attack is challenging because there is no notice and it requires a fast response, Long said.

    Developing the capability to deploy rapidly was a priority for the infantry unit assigned to the force, according to Army Maj. Marc Cloutier, planner for the 1st Brigade Combat Team, 3rd Infantry Division. The unit forms the core of Task Force Operations, one of the three functional task forces within CCMRF.

    It's the first infantry brigade to be assigned to NORTHCOM for a year in order to respond quickly to civil-support missions.

    Cloutier said that one apparent challenge for the brigade will be turning an infantryman into a truck driver or a first responder. However, Cloutier said, the Soldiers and NCOs in the brigade are smart and adaptable and can easily learn to drive a truck or use a chain saw given a little instruction.

    "When I got to the unit in July, I looked at the mission and realized the biggest challenge was going to be organizing to become rapidly deployable," he said. "I knew we would have to preposition containers and equipment to deploy ourselves on very short notice."

    The brigade also began working with the division and the garrison at Fort Stewart to ensure there were mechanisms in place to support a short-notice deployment, Cloutier said.

    Once the exercise started, the brigade planners looked at how to reorganize their habitual formations from an infantry or armor battalion in order to accomplish the mission.

    "Do we want to take our internal assets and develop functional task forces like engineering, decontamination, heavy movement, and search and rescue, or do we want to develop multifaceted task forces and assign them by region?" he asked.

    Their conclusion? That configurations would likely change based on the type of catastrophe or the size of the geographical area.

    "We're developing something of a playbook from everything we do here," Cloutier said. "We'll capture everything and keep it on the shelf so if we see a similar situation down the road, we're starting that much further along."

    Technical Support

    Air Force Lt. Col. Kevin Martilla was especially impressed with the brigade's planning efforts, which structured the forces and established processes to efficiently execute any mission that comes down.

    As chief of the Air Force Radiation Assessment Team, Brooks City-Base, Texas, Martilla leads a unit responsible for supporting health-protection efforts for the force, to help commanders understand and manage radiation risks so they can complete their missions.

    The team has existed since 1968 to respond to Broken Arrow incidents, or those involving military nuclear weapons damaged during transport.

    "We've always been involved in planning to respond to Broken Arrow incidents, so it made sense that (the services) included us when developing CCMRF," Martilla said.

    The team provides technical advice and the capability to measure radiation levels, collect and analyze samples, and measure and track radiological exposure to the force.

    Being assigned to Task Force Operations allowed the team to work closely with the brigade planners and staff, Martilla said.

    "Our team gained an understanding we wouldn't get if exercising with units on paper," he said. "This exercise has been a great step forward toward accomplishing this mission in case it ever does happen."

    Also assigned to CCMRF within Task Force Operations is a Marine Corps technical support force called the Chemical, Biological Incident Response Force based at Indian Head, Md.

    The force, known as CBIRF, was created in the mid 1990s as a domestic response force following the sarin attacks on the Tokyo subway.

    The biggest misconception, said the unit's operations officer, is that the force is a nuclear, biological and chemical unit.

    "We are a life-saving organization," said Marine Corps Maj. Stan Bacon. "Although we can identify hazards and decontaminate personnel, those actions are all geared toward allowing our force to conduct search and extraction."

    Every one of the 500 Marines and Sailors in the battalion is trained to perform search and extraction, Bacon said. In addition, all members have received additional training to perform specialized technical rescues, including confined space, advanced rope, trench, collapsed structure, and vehicle and heavy machinery extraction.

    The battalion is able to "grab and drag" people from within the hazardous area. However, the force also developed procedures to stabilize casualties when moving them would cause more injury, Bacon said.

    "Very few military or civilian agencies plan to have medical personnel in the hot zone, in suits, treating and extracting casualties," he said.

    Bacon said the Marine Corps unit benefited from training with the forces that will provide its logistics, decontamination, aviation and command and control during a disaster.

    "We know we won't have to reach back to Indian Head for logistics support or work on mitigating the hazard," Bacon said. "We'll be able to focus our entire effort on saving lives."

    'The main effort'

    Civil support missions also are logistics intensive, as Army Lt. Col. Johnney Matthews found out.

    Matthews, a support battalion commander, knows what it takes to move the fuel, food and water for a brigade headquarters and four maneuver battalions for combat.

    However, the support battalion soon found they had gone from being the "unsung heroes" of the brigade to being the main effort, he said.

    As the exercise scenario unfolded, Matthews learned the importance of quickly building a supply base to keep their own forces sustained so he could focus on moving food and water to affected civilians.

    The battalion designed "speed balls," bundles of daily rations that feed up to 1,500 people and can be rapidly rolled on and off a military flatbed truck.

    "This exercise has been a good experience for us," Matthews said. "We've been able to shake out our staff and put some systems in place for future missions. And we've learned a lot about civil support - we've been given a picture of some of the things we might face."

    Task Force Medical

    The consequence management response force is able to deploy with robust medical capability, including patient treatment and evacuation, blood storage and distribution, environmental assessment, epidemiology, and even stress management.

    They were all coordinated by 1st Medical Brigade from Fort Hood, Texas.

    As with a number of units attending the week of academics before the exercise, the 1st Medical Brigade was on alert and planning for possible response to Hurricane Ike, which was barreling toward the coast of Texas.

    During every break, the medical brigade's executive officer was returning phone calls.

    "We knew that if Ike hit hard enough to trigger a federal response, we had to be ready to respond," Army Maj. Tim Walsh said. "We have a lot of ongoing requirements, but we know we have to be prepared to deal with the alligator that is in our room."

    Walsh said the exercise gave them an opportunity to look at mission requirements and the brigade's capabilities, then identify shortfalls and try to mitigate them.

    Although they may not be able to mitigate all the shortfalls, just knowing what they are is beneficial too, Walsh said.

    "States and local responders go through the same process," he said. "Our goal is to fill their shortfalls until they are able to handle the incident with just their capabilities, then we leave."

    As combat operations continue in Iraq and Afghanistan, military medical capability remains in high demand. Walsh said those deployments give the unit the credibility to do their mission within the United States.

    "We are proud and honored to do our mission anywhere, but to do it in the United States - that's extra motivation," he said. "We treat everyone with dignity and respect, whether it's a captured suicide attacker or one of our own Soldiers - we give them the same level of care we'd give our own parents."

    Task Force Aviation

    Speed is essential for this type of response, and rapidly moving people and equipment is nothing new for the 82nd Combat Aviation Brigade, according to Col. Paul Bricker.

    "We're not encumbered by roads or terrain, and we move vertically around obstacles that restrict vehicular movement," Bricker said. "If a bridge is out, we can move people or large equipment rapidly."

    The commander of the Fort Bragg, N.C., based aviation brigade said each of the unit's CH-47 Chinook heavy lift helicopters can move 30 people and large pieces of equipment - ideal for medical evacuation, patient transfer, logistical resupply and personnel movement.

    Each of the UH-60 Black Hawk utility helicopters can transport 11 people or 8,000 pounds of cargo - perfect for transporting search teams, dogs, high-priority equipment and radiological survey teams, Bricker said.

    The exercise allowed the brigade's staff to both come together as a team and to work with a joint task force headquarters.

    "Working with the joint task force and the civilian sector exposes our folks to a whole different set of coordination requirements," he said.

    'What if'

    Long, the Joint Task Force Civil Support commander, agreed that having a dedicated response force assigned to Northern Command can only improve DOD's ability to help save lives, prevent injury and provide temporary critical life support.

    "We've got to train like we've got to execute," he said. "There will be catastrophic deaths. Hospitals will be affected, first responders will be affected, and you've got to integrate all the response capabilities when citizens are trying to get away or trying to pull their lives together."

    Since the joint task force was created in 1999, the nation has made tremendous progress on 'what if,' Long said.

    "There are all sorts of deterrence capabilities, and this (force) is one of them," he said. "This exercise has been a great effort to prepare for a catastrophic CBRNE event. The nation needs to know we have this capability."

    Will Wall Street's Meltdown Turn America Into a Police State?

    Will Wall Street's Meltdown Turn America Into a Police State?

    By Scott Thill

    Go To Original

    "Raw capitalism is dead." -- Henry Paulson, U.S. Treasury secretary

    "Can't we just all go out and say things are OK?" -- President Bush, to congressional leaders during bailout negotiations

    I'm not much of an Army Times reader, but after reading that a brigade was shipping from Iraq in October to serve as "an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks" in the homeland right before the election, my antennae perked up. Same as they did when I read that an electoral college doomsday scenario exists in which Dick Cheney casts the deciding vote that gives McCain-Palin the White House.

    That is, if Cheney and Bush don't take it for themselves. That may sound like fantasy, but don't kill the messenger. They are all strands of the Gordian knot the Bush administration has tied around the neck of the American people for the last two presidential terms, best represented today by the failed bailout of banks, brokers and other complicit parties that have since jacked the American people out of trillions. And while the Army Times revelation or election doomsday may turn out to be paranoia rather than prescience, the evidence just isn't there.

    Like I said: antennae.

    They've come in handy as bullshit detectors since Bush stole the election from a flat-footed Al Gore and set about engineering the greatest transfer of public wealth into private hands in American history. If you factor in Monday's failed takeover, as well as the $5 trillion the American people now owe thanks to the "bailout" of Fannie Mae and Freddie Mac, not to mention the continuing hyper-expensive occupation of Iraq and so on, our citizenry is now so far in the hole that it's pointless griping about numbers. If you want one, use the figure put forth by Dennis Kucinich: half a quadrillion dollars. We have evolved past the point of economic or geopolitical reality and entered a phase of pure concept.

    And all vectors of that phase point toward the conclusion that the proverbial shit has totally hit the fan -- head on, and all over again.

    Meet the New Rome, Same as the Old Rome

    "Franklin Roosevelt had to save capitalism from itself," Los Angeles Times business editor Tom Petruno told me as Washington Mutual and Wachovia became the latest banking dominoes to fall. "Is history repeating?"

    Indeed, it is, as one could tell from the repetitive usage of loaded terms and phrases like "Great Depression," "meltdown," "apocalypse," "Armageddon" and more to describe the just-on-time cratering of the American economy. After the strange bedfellows in both parties torpedoed Bush, Bernanke and Paulson's so-called bailout, more than $1 trillion of market value in American equities disappeared in a single day. The Dow Jones average set a record for quickest suicide dive in a single day. Other indexes sunk to multiyear lows, wiping out years of value, and stocks across the board went negative like Ann Coulter. In fact, the only major stock that actually advanced on Monday was Campbell Soup.

    Can there be a more fitting metaphor for the American economy stuck beneath the Bush administration's thumb?

    But the reruns, and their loaded terminology, are merging: Bush himself is just another iteration of the infamous "New World Order" instituted by his father while trying to, what else, convince the American public that it needed to go to war against Saddam Hussein. The revisionism is transparent, befitting a government that cares nothing of what its people actually think. Jon Stewart of "The Daily Show" recently juxtaposed Bush's address on the financial cataclysm with his pre-invasion speech in 2003 and found -- surprise! -- they were exactly the same.

    This is a long way of saying that this particularly frightening crux of historical geopolitics, fascism and environmental calamity has been a long time coming. Failing banks? Deregulation. Endless war? Homeland security. Total information awareness? Transparent government. Bankrupt economy? The fundamentals are strong.

    "Here's my question," Petruno adds. "If this is remembered as Black September, will that end up being too gentle a reference to what actually happened to the American financial system this month? It is beyond comprehension for people who have been on Wall Street their entire lives. I can only imagine how absolutely stunned the American public must be. Stunned, and very afraid."

    It should be. From a military brigade armed for action in the homeland in blatant transgression of Posse Comitatus to what ex-hedge funder and financial personality Jim Cramer recently called "financial terrorism," the United States is pushing forward back.

    To start with, the bailout was obvious theft, but our situation is more precarious than you think. The hyperreal credit default swap market, which few understand although it is estimated to involve tens if not hundreds of global trillions, is faltering under the weight of its own Ponzi origins. The scenario significantly worsens once you factor in the given that countries like China and others who have denominated their loans in dollars are shouldering our exploding debt, along with oil-soaked sovereign wealth funds from nations whose civil liberties records suck ass. As I wrote last year on this clusterfuck, if the Chinese call in our debts and oil-producing countries decide to peg their petrodollars to the euro, you can more or less kiss the dollar goodbye. Which means the last thing you'll need to worry about is your stocks, retirement or credit cards. You will instead worry whether or not the cash you have on hand will be worth anything at all. That is the loaded gun that bankers, brokers and the White House is holding to the public's head, as I write. That trillion erased on Monday, as well as the trillions that have been lost and will be lost in the coming months, was nothing more than a hostage situation engineered by the Bush administration, the Federal Reserve and their partners in crime in finance, insurance and real estate business.

    They don't call that sector FIRE for nothing. Fire destroys everything and leaves little in its catastrophic wake. Which raises the question: What's left to burn?

    "I think our economic situation can get much worse," argues Danny Schechter, the veteran producer and author whose 2006 indie documentary "In Debt We Trust" covered this volatile territory long before CNN would. "Jobless claims are already at a seven-year high, but the government is worried about the reaction from Asia. We are living on other countries' money, and when that spigot gets cut off, we will be in deeper doo-doo. Part of the reason for the scale of the bailout is to show Asia and sovereign wealth funds that we will protect their interests."

    But for how long? The Bush administration and Congress' disdain for the American people has been painfully obvious, so it's hard to believe they will call from sky-high Dubai to see how we are doing after making off with almost all of our money.

    "It's a high-stakes gamble, which is why Paulson tried to do it quickly in a climate of shock and crisis," Shechter says. "He knew that the longer it takes, the more opposition it will attract. This plan, if eventually passed, will pre-empt the next president from doing anything about it, because there will be no money. They are wrecking the government by wrecking the economy first."

    That shock doctrine, as Naomi Klein explained in her brilliant book of the same name, has foisted this same kind of disaster capitalism on country after country over the last century. Klein's book is littered with democracies that slept their way through coups and takeovers, entranced by one simulation or another. The United States was plugged into a matrix that onetime White House press secretary Ari Fleischer described as "an American way of life," adding without deceit that "it should be the goal of policy makers to protect the American way of life."

    By destroying it? Mission accomplished.

    "This is the September of surprise," Schechter concluded, "not a war on Iran but on America."

    Civil War, the Rerun?

    So, what's the next step for the shoe yet to drop? Perhaps the Army Times has the clues:

    (The brigade) may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack. ... The 1st BCT's soldiers also will learn how to use "the first ever nonlethal package that the Army has fielded," 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

    Like every move the Bush administration has ever made, from the Patriot Act to the occupation of Iraq and down to bankrupting the American economy, this maneuver is a solution in search of a problem that it seems destined to create. Look around you. Housing is over. Stocks are nosediving. The banks are gone. War is ceaseless. Civil liberties are disappearing. Nerds at the Federal Reserve and the Treasury are taking hostages. It is madness.

    And mad people have a tendency to infect everyone around them. The difference is that when you go mad ... well, that's the question mark: What will happen?

    Ask the late Iman Morales, who went crazy in Brooklyn on a ledge 10 feet above ground and was illegally tasered by New York police officers, eventually falling to his death, immobilized. A perfect metaphor for our economy, sure, but it's also the type of literal shock we might be awaiting, as the November election creeps nearer and shit begins to hit the fan with ferocity. Many of us so-called alternative journos are not conspiracy nuts, but realists. We look at galvanizing leaders like Barack Obama, America's next president, and compare his impact to that of Lincoln, Kennedy or King -- without forgetting that all three were eventually assassinated. We are the type of realists who live through two Bush presidents, both of whom configured a New World Order, with and without the approval of the American people and the world at large. The type of realists that notice that after 9/11, we couldn't fly to Vegas, but Osama bin Laden's family was flown out of the country on government charter.

    And here is what we see today: Crowds protesting in the streets, the people's money wiped out thanks to the Bush administration's latest economic shock and awe. An army brigade matter-of-factly betraying Posse Comitatus for the purpose of crowd control. The public trust and wealth almost robbed cleanly with congressional approval.

    In other words, we see another unfolding coup, which is to say, a rerun. And there is no telling what the future may hold, or whether or not we are connecting vectors that should remain solitary. But our math has worked just fine in the past -- better than Ben Bernanke and Henry Paulson's math, that's for sure.

    And we'd love to be wrong about what's coming. But unfortunately that isn't up to us, and it never has been: It's up to the Bush administration. And it has never failed to let us down.

    Police Union Shirt Pokes Fun At DNC Protesters

    Police Union Shirt Pokes Fun At DNC Protesters

    Denver Officers Given T-Shirt To Commemorate Event

    Go To Original

    The Denver police union is selling T-shirts that poke fun at protesters at last month's Democratic National Convention, but the main target isn't laughing.

    The back of the shirts reads, "We get up early to beat the crowds" and "2008 DNC," and has a caricature of a police officer holding a baton.

    The front has the number 68 with a slash through it, a reference to the Recreate 68 Coalition, which organized several demonstrations during the convention.

    Recreate 68 organizer Glenn Spagnuolo called the shirt appalling and tasteless.

    Spagnuolo released a written statement Thursday saying members of the police union "clearly have no respect for the rights guaranteed by the U.S. Constitution."

    Detective Nick Rogers, a member of the Police Protective Association board, said police often issue T-shirts to commemorate big events.

    Rogers said each Denver officer was given one of the shirts free and others are on sale for $10 each at police union offices.

    He said the union expects to sell about 2,000 of them.

    Rogers said he hadn't received any previous complaints about the shirts.

    Police arrested 154 people before and during the Democratic convention. There were few reports of violence.

    In once incident, an officer was videotaped pushing a protester to the ground with his baton and telling her, "Back up, b----."

    The district attorney declined to prosecute the officer, saying the woman had disobeyed warnings to back away and had grabbed the officer's baton.