Wednesday, October 8, 2008

IMF Says World Economy Heading for `Major Downturn'

IMF Says World Economy Heading for ‘Major Downturn'

By Christopher Swann

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The global economy is headed for a recession next year, as U.S. gross domestic product grinds close to a halt, the International Monetary Fund said in reports ahead of a Group of Seven meeting this week.

‘‘The global economy is entering a major downturn,'' the fund said in a staff report, dated Oct. 4 and obtained by Bloomberg News. ‘‘Many advanced economies are now close to recession, while emerging economies are also slowing rapidly.''

Growth is slowing from China to Switzerland as policy makers struggle to contain the worst financial crisis since the Great Depression. The Dow Jones Industrial Average dropped below 10,000 for the first time in four years yesterday and Federal Reserve Chairman Ben S. Bernanke said today that ‘‘the downside risks'' for growth have increased.

The U.S. will expand 0.1 percent in 2009, after growth of 1.6 percent this year, the IMF said in a draft of its World Economic Outlook scheduled for release tomorrow and also obtained by Bloomberg. In the WEO released in April, the IMF said the U.S. economy would grow 0.5 percent this year and 0.6 percent in 2009.

The global economy will expand 3 percent next year, lower than the IMF's forecast in April of 3.7 percent and down from 3.9 percent this year, according to the latest WEO. In April, the IMF predicted a 25 percent chance of worldwide growth at or below 3 percent, which it said was ‘‘equivalent to a global recession.''

The IMF staff report suggested that the European Central Bank has scope to reduce borrowing costs to help limit economic damage from the financial market crisis.

‘Mild Recession'

‘‘All the advanced economies are stagnant or in mild recession now,'' John Lipsky, the IMF's first deputy managing director, in a Bloomberg Television interview. The slowdown is removing ‘‘inflationary dangers,'' making it appropriate for central banks in some countries to respond with lower interest rates, he said.

The Washington-based lender said in the staff note that the dollar is ‘‘in line'' with economic fundamentals, the euro is ‘‘on the strong side'' and the yen is ‘‘undervalued'' in the medium term.

IMF spokeswoman Conny Lotze declined to comment on the figures.

The IMF staff report said growth will be ‘‘particularly weak'' in the G-7 countries -- the U.S., Japan, Germany, France, the U.K., Canada and Italy.

‘Looming Recession'

A recession in the U.S. is ‘‘looming,'' growth in western Europe is ‘‘weakening markedly,'' activity in Japan is ‘‘cooling rapidly'' and emerging countries ‘‘have not decoupled from this downturn'' the staff report said.

Of advanced economies, the IMF made its steepest reduction in the growth prediction for U.K., which the fund predicted will contract by 0.1 percent next year, the WEO said. Six months ago, the IMF forecast U.K. growth 1.6 percent in 2009.

Italy's economy will contract 0.2 percent, the IMF predicted, a reduction from its April forecast for 0.3 percent, the report said.

The fastest-growing G-7 country will be Canada, where GDP is forecast to increase 1.2 percent, the IMF report said, after a 2 percent outlook in April.

The IMF report showed Germany's is expected to post zero growth next year, compared with a prediction in April of a 1 percent expansion. France's economy will register 0.2 percent growth, down from a 1.3 percent forecast six months ago, the report said.

Central Banks

In the U.S., the Fed's ‘‘monetary policy is already highly accommodative,'' the IMF staff report said. Bernanke said today the central bank ‘‘will need to consider whether the current stance of policy remains appropriate.''

The Bank of Japan's interest-rate policy stance ‘‘remains accommodative and should remain so given that the economy has weakened and that underlying price pressures are well contained,'' it said.

For the ECB, ‘‘monetary conditions are now quite tight,'' the report said. ‘‘In light of this, there is now scope to ease monetary policy.''

Heating costs to jump 15 percent this winter: government

Heating costs to jump 15 percent this winter: government

By Tom Doggett

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U.S. household heating fuel costs will rise 15 percent this winter from last year, the government's top energy forecasting agency said on Tuesday, citing more expensive fuel and the likelihood of much colder weather than last winter.

Heating oil and natural gas customers face the steepest price jumps, although double-digit percentage increases also are in store for users of propane and electricity, the Energy Information Administration (EIA) said in its latest winter forecast.

The cost to heat a U.S. home this winter will average $1,137, up $151 from last year, the EIA said. Heating oil bills for the October-through-March heating season will be up $449, or 23 percent, at $2,388. The retail price for heating oil should average $3.89 a gallon, up from $3.31 last winter.

"The projected increase is consistent with higher crude oil prices and projections of lower distillate inventories than last year going into the heating season," the Energy Department's forecasting arm said.

Officials said the winter heating cost estimate would have been much higher three months ago, when crude prices hit a record $147 a barrel. Oil now trades around $90 a barrel.

"I do think that as challenging as the times are, 15 percent is different than 40 percent, which is what we were looking at a short while ago. The reduction in the value of a barrel of oil is being directly translated into savings in heating oil," U.S. Energy Secretary Sam Bodman said.

Households using natural gas will see costs jump 18 percent, or $155, to $1,010, the agency said.

Natural gas prices have tumbled from earlier this year, but utilities must use gas inventories this winter to help meet demand that built up over the summer with very expensive gas, noted Howard Gruenspecht, the EIA's acting administrator.

Propane users will see their winter bills rise 11 percent, or about $188, to $1,861 and the nearly one-third of U.S. households that rely on electricity for heat will pay 10 percent more, or $89, at $947 for the season.

There also will be more government money this winter to help the needy pay utility bills. Congress doubled funding for the Low Income Home Energy Assistance Program, known as LIHEAP, to $5.1 billion to help poor families and senior citizens cover their heating costs.

As a result, the number of families that can get assistance under the federal program will rise from 5.8 million to 7.8 million. The level of heating costs that will be covered should average 50 percent this winter, up from 36 percent last year.

Gasoline costs, in comparison, are headed lower.

The national price for gasoline fell this week below $3.50 a gallon for the first time since mid April. The pump price could drop below $3 a gallon if crude oil costs stay around $90 a barrel for the next couple of months, Gruenspecht said.

S&P 500, Dow Post Worst Retreats Since 1937

U.S. Stocks Drop; S&P 500, Dow Post Worst Retreats Since 1937

By Elizabeth Stanton and Eric Martin

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U.S. stocks fell, sending the Standard & Poor's 500 Index below 1,000 for the first time since 2003, on speculation banks and real-estate companies are running short of money as the credit crisis worsens.

Bank of America Corp. tumbled 26 percent after cutting its dividend in half and saying it plans to sell $10 billion in common stock to brace for a recession. Morgan Stanley, KeyCorp and JPMorgan Chase & Co. slid more than 10 percent as investors shrugged off signs the Federal Reserve will reduce interest rates. General Growth Properties Inc., a mall owner, plunged 42 percent on concern it won't be able to repay debt.

The S&P 500 slid 60.66 points, or 5.7 percent, to 996.23, extending its 2008 tumble to 32 percent in the market's worst yearly slump since 1937. The Dow Jones Industrial Average dropped 508.39, or 5.1 percent, to 9,447.11, giving it a 29 percent retreat in 2008 that would also be the worst in 71 years. The Nasdaq Composite Index lost 5.8 percent to 1,754.88.

‘‘We've approached the edge of the cliff,'' Leon Cooperman, 65, who manages $6 billion at hedge fund Omega Advisors Inc., said at the Value Investing Congress in New York. ‘‘Do we go over the cliff or begin to recede? History says we recede, but there's no guarantee. This is the most difficult financial environment I've lived through.''

The S&P 500 Financials Index slumped 12 percent to below its lowest level since 1997 even after Fed Chairman Ben S. Bernanke signaled he is ready to cut interest rates. The S&P 500's 15 percent retreat since Sept. 30 is the third-steepest five-day drop on record, according to Bespoke Investment Group LLC, a Harrison, New York-based research firm. The bigger slumps occurred in 1932.

Levkovich Cuts Forecast

The slump that pushed the S&P 500 to an almost five-year low yesterday prompted Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., to lower his year-end forecast for the index by 19 percent to 1,200. His previous target of 1,475 had been the most bullish of nine forecasts in a Bloomberg survey.

Bank of America plunged $8.45 to $23.77 after the lender slashed its dividend to 32 cents and announced plans to raise at least $10 billion in common stock as it braces for an extended recession. Chief Executive Officer Kenneth Lewis said the U.S. economy slowed in the past 45 days with little prospect for immediate improvement.

The bank also released its third-quarter earnings two weeks early. Profit declined 68 percent to $1.18 billion, or 15 cents a share. Analysts predicted earnings of 61 cents a share for the quarter, according to the average of 20 estimates compiled by Bloomberg.

‘Credit Deterioration'

‘‘The market is responding to the fact that there was credit deterioration in their businesses,'' Erick Maronak, the New York- based chief investment officer at Victory Capital Management, said of Bank of America. Victory Capital oversees $66 billion.

Merrill Lynch & Co., which is being acquired by Bank of America, sank 26 percent to $18 for the steepest decline since October 1987. JPMorgan lost 11 percent to $39.32, and KeyCorp tumbled 10 percent to $10.61.

Morgan Stanley declined as much as 40 percent on concern its sale of a stake to Japan's Mitsubishi UFJ Financial Group Inc. would fall through. The stock pared that drop, falling 25 percent to $17.65 at the close, after Morgan Stanley spokesman Mark Lane said the deal is still ‘‘on track.''

Goldman Sachs Group Inc.'s index of stocks with high hedge fund ownership dropped 7.1 percent to the lowest level since August 2003. All 49 companies in the measure declined, giving the index a 38 percent loss for 2008.

Disney Declines

Walt Disney Co. retreated 6 percent to $26.57, the lowest price since February 2006, after Merrill Lynch downgraded the world's biggest theme-park operator to ‘‘underperform'' from ‘‘neutral,'' citing concern ‘‘about the risk to earnings estimates in the current economic climate.''

General Growth Properties Inc. led an index of real-estate investment trusts in the S&P 500 to a 8.9 percent drop, sending the group to a four-year low. The mall owner at risk of not being able to refinance debt coming due this year fell 42 percent to $4.50, extending its slide over the past year to 92 percent.

Apartment Investment & Management Co., a REIT specializing in apartments, fell 27 percent to $25.50.

Tomorrow is the last day of a Securities and Exchange Commission rule banning short sales in more than 980 financial companies. Since it was announced Sept. 18, companies covered by the rule are down an average of 16 percent, according to data compiled by Bloomberg. The S&P 500 lost 17 percent during the period, while commercial banks in the gauge are down 23 percent.

GM, Ford Slump

General Motors Corp. fell 11 percent to $7.56, the lowest price since the 1950s. The automaker's European unit plans to reduce production by about 40,000 vehicles by the end of the year as credit-market turmoil causes a drop in car sales.

Ford Motor Co., the second-largest U.S. automaker after GM, tumbled 21 percent to $2.92, the lowest price since April 1983.

Advanced Micro Devices Inc., the chipmaker struggling to compete with Intel Corp., jumped 8.5 percent to $4.59 after saying Abu Dhabi will pay $700 million for a stake in a new company that will own two plants in Germany and build another in New York. The new company, which will assume $1.2 billion of AMD's debt, will receive as much as $6 billion from Abu Dhabi to expand the factories and get $1.4 billion in operating capital. Abu Dhabi will also pay $314 million to double its stake in AMD to 19 percent.

Commercial Paper Fund

Stocks opened higher after the Federal Reserve invoked emergency powers to create a special fund to buy commercial paper, which is short-term debt issued by corporations to fund operations.

American Express Co., the largest U.S. credit-card company by purchases, dropped 6.1 percent to $28.25. It had surged as much as 8.1 percent after the Fed's announcement. General Electric Co., whose businesses include jet engines, health care and television programming, added as much as 5.9 percent before closing down 5.1 percent at $20.30.

Both American Express and GE are among the biggest U.S. direct issuers of commercial paper. In the three weeks ended Oct. 1, finance-company commercial paper outstanding fell 16 percent to $683.4 billion, Fed data show.

‘‘A connection is being made between the freeze-up in the credit markets and the drop-off in economic activity we've seen,'' said Robert Stimpson, a money manager at Oak Associates Inc. in Akron, Ohio. ‘‘A step to loosen credit practices and allow companies to borrow again might forestall the economic weakness we've seen flow through'' to employment.

Earnings Watch

Earnings at S&P 500 companies probably dropped on average of 5.6 percent in the third quarter, according to analysts' estimates compiled by Bloomberg.

Financial companies are forecast to lead the drop in profits with a 64 percent decrease, followed by an 11 percent slide in earnings at retailers, hoteliers, restaurant chains and other so- called consumer discretionary companies.

The S&P 500 has tumbled 36 percent from its record a year ago. Based on estimated profit, the S&P 500's price-to-earnings ratio is 11.9.

‘‘On very conservative earnings expectations for the next 12 months this market at minimum is starting to look reasonably valued,'' Leo Grohowski, chief investment officer for the wealth management unit of Bank of New York Mellon Corp., told Bloomberg Television. The unit manages $162 billion. ‘‘Times when it feels almost irresponsible to shore up equities, they tend to be good buying opportunities historically.''

Pensions lose $2 trillion

Pensions lose $2 trillion

Congressional budget analyst says many workers may need to delay retirement.

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Americans' retirement plans have lost as much as $2 trillion in the past 15 months, Congress' top budget analyst estimated Tuesday.

The upheaval that has engulfed the financial industry and sent the stock market plummeting is devastating workers' savings, forcing people to hold off on major purchases and consider delaying their retirement, said Peter Orszag, the head of the Congressional Budget Office.

As Congress investigates the causes and effects of the financial meltdown, the House Education and Labor Committee has heard from retirement savings and budget analysts on how the housing, credit and other financial troubles have battered pensions and other retirement funds, which are among the most common forms of savings in the United States.

"Unlike Wall Street executives, America's families don't have a golden parachute to fall back on," said Rep. George Miller, D-Calif., the panel chairman. "It's clear that their retirement security may be one of the greatest casualties of this financial crisis."

More than half the people surveyed in an Associated Press-GfK poll taken Sept. 27-30 said they worry they will have to work longer because the value of their retirement savings has declined.

Orszag indicated the fear is well-founded. Public and private pension funds and employees' private retirement savings accounts - like 401(k)'s - have lost some 20% overall since mid-2007, he estimated. Private retirement plans may have suffered slightly more because those holdings are more heavily skewed toward stocks, Orszag added.

"Some people will delay their retirement. In particular, those on the verge of retirement may decide they can no longer afford to retire and will continue working," Orszag said.

A new AARP study found that because of the economic downturn, one in five workers 45 and older has stopped putting money into a 401(k), IRA or other retirement savings account during the past year, and nearly one in four has increased the number of hours he works.

Cindy Sheehan Reveals Plan for New National Party

Cindy Sheehan Reveals Plan for New National Party


Cindy Sheehan (for the first time to press) reveals intentions in forming a new political party, and reflects on her chances in unseating Nancy Pelosi in her race for Congress.

By Stephen Dohnberg

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Anti War activist and challenger for House Speaker Nancy Pelosi's Congressional Seat (CD 8, California), Cindy Sheehan has indicated her intention to launch a National political party after the U.S. Election of Nov. 4

Inspired in part by Mark Twain's involvement in The American Anti Imperialist League in reaction to the annexation of the Philippines by the United States in the late 19th Century, Sheehan said that the party will have a progressive platform and that after Nov. 4, "no matter what happens, we need to consolidate the energy against Imperialism and work on building another party movement."

While discussing a potential third party unity movement, Sheehan indicated that her own candidacy against House Speaker Pelosi has seen a broad coalition of support from Greens, independents, disillusioned Democrats such as herself (Sheehan left the Democratic Party in May of 2007 in response to the Democratic Party led House support for a funding bill to continue Iraq War funding), and Republicans, many of whom made up the traditional base of the GOP represented by Ron Paul.

Sheehan revealed that name of the new party would be The First Party. She reasoned "We don't want to do third-party politics which has a stigma in the United States" The First Party, with a populist-progressive agenda, will be the first party that "cares about the people, will work for the people, and will actually be a viable party."

"I have spoken to Green Party Presidential Candidate Cynthia McKinney and the Nader Campaign" and as disillusionment with the two party system increases, "this is the time to build on that energy."

Reflecting on her own chances in unseating incumbent Pelosi, she is pragmatic and acknowledges it has been "upward momentum, the only way we could go" but believes the success of the recent $700 billion bailout proposal could turn the tide in her favor. "When we're out on the streets, we have overwhelming support , especially since this bailout." Sheehan indicates that she notices that "people have a new rage and a new fire in their belly because of the corporate bailout. People are just so angry"

More importantly, some public opinions of her ability to lead have changed, and could indicate a tipping point for the Sheehan Campaign. She notes that responses have been favorable pointing to an email she recently received, "Two weeks ago I thought you should be shot, but now I'm awake, I'm not going to be a slave anymore, and I support what you do."

Sheehan believes that Members of Congress voting in favor of the bill did so at the peril of their own House seats and they have underestimated the voters. "I was watching the debates on the House floor and the Congress people kept saying 'my constituents are overwhelmingly against this but I have to do it because it's for the good of the country', what a load of crap!"

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

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

By Naomi Wolf

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Background: the First Brigade of the Third Infantry Division, three to four thousand soldiers, has been deployed in the United States as of October 1. Their stated mission is the form of crowd control they practiced in Iraq, subduing "unruly individuals," and the management of a national emergency. I am in Seattle and heard from the brother of one of the soldiers that they are engaged in exercises now. Amy Goodman reported that an Army spokesperson confirmed that they will have access to lethal and non lethal crowd control technologies and tanks.

George Bush struck down Posse Comitatus, thus making it legal for military to patrol the U.S. He has also legally established that in the "War on Terror," the U.S. is at war around the globe and thus the whole world is a battlefield. Thus the U.S. is also a battlefield.

He also led change to the 1807 Insurrection Act to give him far broader powers in the event of a loosely defined "insurrection" or many other "conditions" he has the power to identify. The Constitution allows the suspension of habeas corpus -- habeas corpus prevents us from being seized by the state and held without trial -- in the event of an "insurrection." With his own army force now, his power to call a group of protesters or angry voters "insurgents" staging an "insurrection" is strengthened.

U.S. Rep. Brad Sherman of California said to Congress, captured on C-Span and viewable on YouTube, that individual members of the House were threatened with martial law within a week if they did not pass the bailout bill:

"The only way they can pass this bill is by creating and sustaining a panic atmosphere. … Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day and a couple of thousand on the second day, and a few members were even told that there would be martial law in America if we voted no."

If this is true and Rep. Sherman is not delusional, I ask you to consider that if they are willing to threaten martial law now, it is foolish to assume they will never use that threat again. It is also foolish to trust in an orderly election process to resolve this threat. And why deploy the First Brigade? One thing the deployment accomplishes is to put teeth into such a threat.

I interviewed Vietnam veteran, retired U.S. Air Force Colonel and patriot David Antoon for clarification:

"If the President directed the First Brigade to arrest Congress, what could stop him?"

"Nothing. Their only recourse is to cut off funding. The Congress would be at the mercy of military leaders to go to them and ask them not to obey illegal orders."

"But these orders are now legal?'"

"Correct."

"If the President directs the First Brigade to arrest a bunch of voters, what would stop him?"

"Nothing. It would end up in courts but the action would have been taken."

"If the President directs the First Brigade to kill civilians, what would stop him?"

"Nothing."

"What would prevent him from sending the First Brigade to arrest the editor of the Washington Post?"

"Nothing. He could do what he did in Iraq -- send a tank down a street in Washington and fire a shell into the Washington Post as they did into Al Jazeera, and claim they were firing at something else."

"What happens to members of the First Brigade who refuse to take up arms against U.S. citizens?"

"They'd probably be treated as deserters as in Iraq: arrested, detained and facing five years in prison. In Iraq a study by Ann Wright shows that deserters -- reservists who refused to go back to Iraq -- got longer sentences than war criminals."

"Does Congress have any military of their own?"

"No. Congress has no direct control of any military units. The Governors have the National Guard but they report to the President in an emergency that he declares."

"Who can arrest the President?"

"The Attorney General can arrest the President after he leaves or after impeachment."

[Note: Prosecutor Vincent Bugliosi has asserted it is possible for District Attorneys around the country to charge President Bush with murder if they represent districts where one or more military members who have been killed in Iraq formerly resided.]

"Given the danger do you advocate impeachment?"

"Yes. President Bush struck down Posse Comitatus -- which has prevented, with a penalty of two years in prison, U.S. leaders since after the Civil War from sending military forces into our streets -- with a 'signing statement.' He should be impeached immediately in a bipartisan process to prevent the use of military forces and mercenary forces against U.S. citizens"

"Should Americans call on senior leaders in the Military to break publicly with this action and call on their own men and women to disobey these orders?"

"Every senior military officer's loyalty should ultimately be to the Constitution. Every officer should publicly break with any illegal order, even from the President."

"But if these are now legal. If they say, 'Don't obey the Commander in Chief,' what happens to the military?"

"Perhaps they would be arrested and prosecuted as those who refuse to participate in the current illegal war. That's what would be considered a coup."

"But it's a coup already."

"Yes."

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

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

By Naomi Wolf

Go To Original

Background: the First Brigade of the Third Infantry Division, three to four thousand soldiers, has been deployed in the United States as of October 1. Their stated mission is the form of crowd control they practiced in Iraq, subduing "unruly individuals," and the management of a national emergency. I am in Seattle and heard from the brother of one of the soldiers that they are engaged in exercises now. Amy Goodman reported that an Army spokesperson confirmed that they will have access to lethal and non lethal crowd control technologies and tanks.

George Bush struck down Posse Comitatus, thus making it legal for military to patrol the U.S. He has also legally established that in the "War on Terror," the U.S. is at war around the globe and thus the whole world is a battlefield. Thus the U.S. is also a battlefield.

He also led change to the 1807 Insurrection Act to give him far broader powers in the event of a loosely defined "insurrection" or many other "conditions" he has the power to identify. The Constitution allows the suspension of habeas corpus -- habeas corpus prevents us from being seized by the state and held without trial -- in the event of an "insurrection." With his own army force now, his power to call a group of protesters or angry voters "insurgents" staging an "insurrection" is strengthened.

U.S. Rep. Brad Sherman of California said to Congress, captured on C-Span and viewable on YouTube, that individual members of the House were threatened with martial law within a week if they did not pass the bailout bill:

"The only way they can pass this bill is by creating and sustaining a panic atmosphere. … Many of us were told in private conversations that if we voted against this bill on Monday that the sky would fall, the market would drop two or three thousand points the first day and a couple of thousand on the second day, and a few members were even told that there would be martial law in America if we voted no."

If this is true and Rep. Sherman is not delusional, I ask you to consider that if they are willing to threaten martial law now, it is foolish to assume they will never use that threat again. It is also foolish to trust in an orderly election process to resolve this threat. And why deploy the First Brigade? One thing the deployment accomplishes is to put teeth into such a threat.

I interviewed Vietnam veteran, retired U.S. Air Force Colonel and patriot David Antoon for clarification:

"If the President directed the First Brigade to arrest Congress, what could stop him?"

"Nothing. Their only recourse is to cut off funding. The Congress would be at the mercy of military leaders to go to them and ask them not to obey illegal orders."

"But these orders are now legal?'"

"Correct."

"If the President directs the First Brigade to arrest a bunch of voters, what would stop him?"

"Nothing. It would end up in courts but the action would have been taken."

"If the President directs the First Brigade to kill civilians, what would stop him?"

"Nothing."

"What would prevent him from sending the First Brigade to arrest the editor of the Washington Post?"

"Nothing. He could do what he did in Iraq -- send a tank down a street in Washington and fire a shell into the Washington Post as they did into Al Jazeera, and claim they were firing at something else."

"What happens to members of the First Brigade who refuse to take up arms against U.S. citizens?"

"They'd probably be treated as deserters as in Iraq: arrested, detained and facing five years in prison. In Iraq a study by Ann Wright shows that deserters -- reservists who refused to go back to Iraq -- got longer sentences than war criminals."

"Does Congress have any military of their own?"

"No. Congress has no direct control of any military units. The Governors have the National Guard but they report to the President in an emergency that he declares."

"Who can arrest the President?"

"The Attorney General can arrest the President after he leaves or after impeachment."

[Note: Prosecutor Vincent Bugliosi has asserted it is possible for District Attorneys around the country to charge President Bush with murder if they represent districts where one or more military members who have been killed in Iraq formerly resided.]

"Given the danger do you advocate impeachment?"

"Yes. President Bush struck down Posse Comitatus -- which has prevented, with a penalty of two years in prison, U.S. leaders since after the Civil War from sending military forces into our streets -- with a 'signing statement.' He should be impeached immediately in a bipartisan process to prevent the use of military forces and mercenary forces against U.S. citizens"

"Should Americans call on senior leaders in the Military to break publicly with this action and call on their own men and women to disobey these orders?"

"Every senior military officer's loyalty should ultimately be to the Constitution. Every officer should publicly break with any illegal order, even from the President."

"But if these are now legal. If they say, 'Don't obey the Commander in Chief,' what happens to the military?"

"Perhaps they would be arrested and prosecuted as those who refuse to participate in the current illegal war. That's what would be considered a coup."

"But it's a coup already."

"Yes."

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

Secrets of Iraq's death chamber

Prisoners are being summarily executed in the government's high-security detention centre in Baghdad.

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Like all wars, the dark, untold stories of the Iraqi conflict drain from its shattered landscape like the filthy waters of the Tigris. And still the revelations come.

The Independent has learnt that secret executions are being carried out in the prisons run by Nouri al-Maliki's "democratic" government.

The hangings are carried out regularly – from a wooden gallows in a small, cramped cell – in Saddam Hussein's old intelligence headquarters at Kazimiyah. There is no public record of these killings in what is now called Baghdad's "high-security detention facility" but most of the victims – there have been hundreds since America introduced "democracy" to Iraq – are said to be insurgents, given the same summary justice they mete out to their own captives.

The secrets of Iraq's death chambers lie mostly hidden from foreign eyes but a few brave Western souls have come forward to tell of this prison horror. The accounts provide only a glimpse into the Iraqi story, at times tantalisingly cut short, at others gloomily predictable. Those who tell it are as depressed as they are filled with hopelessness.

"Most of the executions are of supposed insurgents of one kind or another," a Westerner who has seen the execution chamber at Kazimiyah told me. "But hanging isn't easy." As always, the devil is in the detail.

"There's a cell with a bar below the ceiling with a rope over it and a bench on which the victim stands with his hands tied," a former British official, told me last week. "I've been in the cell, though it was always empty. But not long before I visited, they'd taken this guy there to hang him. They made him stand on the bench, put the rope round his neck and pushed him off. But he jumped on to the floor. He could stand up. So they shortened the length of the rope and got him back on the bench and pushed him off again. It didn't work."

There's nothing new in savage executions in the Middle East – in the Lebanese city of Sidon 10 years ago, a policeman had to hang on to the legs of a condemned man to throttle him after he failed to die on the noose – but in Baghdad, cruel death seems a speciality.

"They started digging into the floor beneath the bench so that the guy would drop far enough to snap his neck," the official said. "They dug up the tiles and the cement underneath. But that didn't work. He could still stand up when they pushed him off the bench. So they just took him to a corner of the cell and shot him in the head."

The condemned prisoners in Kazimiyah, a Shia district of Baghdad, are said to include rapists and murderers as well as insurgents. One prisoner, a Chechen, managed to escape from the jail with another man after a gun was smuggled to them. They shot two guards dead. The authorities had to call in the Americans to help them recapture the two. The Americans killed one and shot the Chechen in the leg. He refused medical assistance so his wound went gangrenous. In the end, the Iraqis had to operate and took all the bones out of his leg. By the time he met one Western visitor to the prison, "he was walking around on crutches with his boneless right leg slung over his shoulder".

In many cases, it seems, the Iraqis neither keep nor release any record of the true names of their captives or of the hanged prisoners. For years the Americans – in charge of the notorious Abu Ghraib prison outside Baghdad – did not know the identity of their prisoners. Here, for example, is new testimony given to The Independent by a former Western official to the Anglo-US Iraq Survey Group, which searched for the infamous but mythical weapons of mass destruction: "We would go to the interrogation rooms at Abu Ghraib and ask for a particular prisoner. After about 40 minutes, the Americans brought in this hooded guy, shuffling along, shackled hands and feet.

"They sat him on a chair in front of us and took off his hood. He had a big beard. We asked where he received his education. He repeatedly said 'Mosul'. Then he said he'd left school at 14 – remember, this guy is supposed to be a missile scientist. We said: 'We know you've got a PhD and went to the Sorbonne – we'd like you to help us with information about Saddam's missile project'. But I said to myself : 'This guy doesn't know anything 'bout fucking missiles.' Then it turned out he had a different name from the man we'd asked for, he'd been picked up on the road by the Americans four months earlier, he didn't know why. So we said to the Americans: 'Wrong gentleman!' So they put the shackles on him and took him back to his cell and after 20 or 30 minutes, they'd bring someone else. We'd ask him where he went to school and he told us he had never been to school.

"Wrong person again. It was a complete farce. The incompetence of the US military was astounding, criminal. Eventually, of course, they found the right guy and brought him in and took his hood off. He was breathing heavily, overweight, pudgy, disoriented, a little bit scared."

On this occasion, the Americans had found the right man. The British and American investigators asked the guards to remove the man's shackles, which they did – but then they tied one of the man's legs to the floor. Yes, he had a PhD.

Again, the official's testimony: "We went through his history, what he'd worked on – he was obviously just a minor functionary in one of Saddam's missile programmes. Iraqi scientists didn't have the knowledge how to make nuclear missiles nor did they have the financial support necessary. It just remained in the dreams of Saddam."

The scientist-prisoner in Abu Ghraib miserably told his captors that he'd been arrested by the Americans after they'd knocked on his front door in Baghdad and found two Kalashnikov rifles a woman's hijab, verses from the Koran and, obviously of interest to his captors, "physics and missile textbooks on his bookshelves." But this supposedly valuable prisoner was never charged or previously interviewed even though he admitted he was a rocket scientist.

"I don't know what happened to him," the former official told me. "I tried to tell the UK and the US military that we've arrested this man but that he's got a wife, children, a family. I said that by locking up this one innocent person, you've got 50 men radicalised overnight. No, I don't know what happened to him."

For many of the investigators working for the Anglo-American authorities in Baghdad, the trial for the crime for which the Iraqi dictator was himself subsequently hanged was a fearful experience that ultimately ended in disgust. Through captured documents, they could see the dark, inner workings of Saddam's secret police. The idea of the Saddam trial was less to bring members of the former regime to justice than to show Iraqis how justice and the rule of law should operate.

"It was exhilarating to see Saddam being cross-examined," one of the court investigators said. "The low point was when he was executed. What drove me on was seeing how Saddam dealt with his victims – I was looking at a microcosm of all the deaths that had taken place in Iraq. But when he was executed, it was done in such a savage way."

Saddam Hussein was hanged in the same "secure" unit at Kazimiyah where Mr al-Maliki's people, in an echo of Saddamite Baathist terror, now hang their victims.

Iraq The death penalty

*The death penalty in Iraq was suspended after Saddam Hussein was deposed in 2003. It was reinstated by the interim government in August 2004.

*The United Nations, the European Union and international human rights organisations all spoke out against the reintroduction.

*At the time, the government claimed the death penalty was a necessary measure until the country had stabilised. Amnesty International claims that "the extent of violence in Iraq has increased rather than diminished, clearly indicating that the death penalty has not proved to be an effective deterrent."

*Saddam, left, his half-brother Barzan al-Tikriti and Iraq's former chief judge Awad Hamed al-Bandar were hanged at the end of 2006 for their part in the killings of 148 people in the mainly Shia town of Dujail in 1982. Illicit videos of all three executions later became public. Saddam's body could be seen on a hospital trolley, his head twisted at 90 degrees. Barzan – Iraq's former intelligence chief –was decapitated by the noose. Officials said it was an accident.

*According to Amnesty, there were at least 33 executions reported in Iraq last year. About 200 people were estimated to have been sentenced to death.

Barack Obama unveils 13-minute Keating Five 'documentary'

Barack Obama unveils 13-minute Keating Five 'documentary'

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Barack Obama's campaign unveiled its latest attack ad this morning -- a 13-minute "documentary" on John McCain's ties to Charles Keating, the chairman of the Lincoln Savings and Loan Assn. who was charged with fraud, racketeering and conspiracy in the savings-and-loan scandal of the late 1980s.

The ad was rolled out with the same kind of promotional fanfare that you'd expect for the latest indie flick.

Over the weekend, Obama campaign manager David Plouffe introduced a 30-second preview of the film ("Keating Economics: John McCain and the Making of a Financial Crisis") in an e-mail to the campaign's extensive list of supporters. Plouffe urged recipients to forward the e-mail "to everyone you know" and to stay tuned for the premiere of the full spot.

It debuted at noon EDT (9 a.m. PDT) today on a website specifically created for it.

Production-wise, the spot shows what a campaign awash with money can accomplish these days; it's heads and shoulders above the average political ad (as well as being far more ambitious in length).

Clearly, it was in the works for a while -- and comes now as McCain's campaign over the weekend launched a new effort, assaulting Obama for his ties to Bill Ayers, a founder of the notorious Weather Underground radical group almost 40 years ago.

Our secret war in Pakistan

Our secret war in Pakistan

By Richard Engel

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U.S. military officials don’t talk about our secret war in Pakistan.

Don’t even ask, I was told, on U.S. military bases in Afghanistan at Bagram and Jalalabad.

Don’t ask about the remotely-controlled American drones armed with missiles that are now hunting across the Pakistani border, searching through the mountain peaks, valleys and dusty villages inside Pakistan for the leaders of a few dozen networks of al-Qaida fighters, Taliban militants, warlords, weapons smugglers and opium traffickers.

And certainly don’t ask about the troops on bases here in Afghanistan who don’t wear uniforms, have long beards (so they can better blend in during covert operations), tattoos and don’t mingle with regular soldiers.

They eat in their own chow halls, plan their own missions and don’t talk much. They don’t talk at all to the media. They’re the men who have been called in to cross into Pakistan when the drones can’t get deep enough to find and kill their targets.

They are elite Special Operations Forces, the most-highly trained and covert of the U.S. military. They are America’s ghost warriors. According to Pakistani villagers who claim to have witnessed their operations, the "Special Ops" work in small teams, fast roping out of helicopters, air assaulting their objective before the enemy can re-group.

Their strengths are rapid violence, stealth, mobility and surprise. The Special Operations Forces don’t receive much attention or credit in the media, but they’re leading America’s secret war inside Pakistan, at least for now.

The Army Times, a military newspaper, recently reported that the U.S. will temporarily halt ground incursions into Pakistan. The newspaper quoted an unnamed Pentagon official as saying, "We are now working with the Pakistanis to make sure that those types of ground-type insertions do not happen, at least for a period of time to give them an opportunity to do what they claim they are desiring to do." The newspaper said the halt did not apply to the incursions by drones.

U.S. perspective
While details of American operations in Pakistan are sparse, several commanders have helped me understand the American motivation for the raids.

They say the cross-border incursions are necessary because the Pakistani government has failed to contain Taliban and al-Qaida fighters. Pakistan’s tribal region – 10,000 square miles along Pakistan’s border with Afghanistan – has become a no-man’s-land where radical militants train, equip, rest, regroup, refit, plan and launch attacks on American troops in Afghanistan and on the Pakistani government in Islamabad.

Pakistan has taken some action. In August, the Pakistani military launched an offensive in Bajaur, a militant stronghold near the border. The Pakistani army is also building alliances with tribal leaders who have turned on the Taliban and al-Qaida.

But Pakistan’s actions have yet to produce significant results, according to tribal elders, witnesses, and the U.S. military. The border region remains a lawless insurgent safe haven that the United States has decided it can no longer tolerate.

From the U.S. perspective, the military had to act in Pakistan, a U.S. ally, because the Pakistani government and military could not, or would not, crack down on Islamic radicals.

Pakistan’s perspective
Sipping
cups of green tea in a villa in Islamabad, I recently spoke for three hours with a Pakistani military official, who also worked for several years in his country’s intelligence service, to get the other side of the story. He argued passionately that both Pakistan and the United States share the same goal – to wipe out the dangerous radicals – but that the U.S. cross-border incursions are counter-productive.

The official, who spoke on condition of anonymity because of the sensitivity of the subject, said Pakistan has deployed 120,000 troops along its border with Afghanistan, stationed at 1,000 posts. He compared Pakistan’s force to just over 30,000 U.S. troops at about 100 posts on the Afghan side of the border.

"You see where the insufficiency of forces is?" he asked. "I don’t understand why [the Americans] don’t just kill the militants on their side of the border. They show us videos as proof of militants crossing into Pakistan. Why don’t they just sort them out there, in Afghanistan, instead of making videos?’"

I asked the Pakistani official about the U.S. cross-border raids. Do they help? Don’t they target the same people who plot attacks against Pakistan? Unlike the U.S. military, he had a lot to say.

The official claimed there have been about 50 drone incursions into Pakistan since this summer, along with roughly 10 "physical incursions." He claimed the raids had killed "several hundred" civilians and were causing panic in the tribal areas.

"The villagers hear the buzzing [of the drones] and are terrified. They are scared to have weddings, funerals or any social gatherings, afraid they will be blown up by the drones," he said.

The official also claimed the U.S. strikes undermine the Pakistani military’s ability to operate in the tribal areas. It’s a problem of logistics and terrain, he explained.

The few roads in the mountainous border area run through villages. Since the Pakistani military lacks aircraft, the roads are the army’s main supply line. The official argued that if the villagers, angered by American air strikes, turn on the Pakistani military – who are after all U.S. allies – they could cut off Pakistani troops.

"We may have to pull them out completely if [the American incursions] continue. We cannot leave the troops there, if we are cut off from supplies and can’t support them."

Human toll
While the United States and Pakistan argue over the incursions, conditions in border villages are rapidly deteriorating. The mountain town of Swat was once known as the Switzerland of Pakistan, a resort where Pakistanis vacationed to escape the bustle of Islamabad and Karachi. Today it is a battle zone.

According to a Pakistani military spokesman, in Swat Valley Taliban and al-Qaida fighters have burned down 111 girls schools, destroyed 37 government buildings, blown up 29 bridges, incapacitated the main power plant and cut the gas supply. Villagers are often completely without power. Schools that haven’t been burned down don’t operate.

Not surprisingly, more than a quarter million refugees have escaped areas like Swat and Bajour. At least 20,000 refugees have crossed into Afghanistan. Aid workers say tens of thousands more may be coming.

What can be done?
A senior U.S. military official told me he’d heard Pakistan’s argument – leave us alone, we’ll handle it, stay out – a thousand times, but had yet to see results.

But what can the U.S. actually do?

It’s difficult to fight a secret war, especially here. The Special Operations Forces must fight in the mountains, far away from their bases in Afghanistan, against a battle-hardened enemy funded by the opium trade.

Since U.S. troops must operate covertly, they also can’t afford to lose a single man, fearing the enemy would drag his body Somalia-style through the streets, exposing their presence. The Americans also can’t leave anything behind, no equipment, no bags of MREs, no tracks, no trace they were there fighting America’s newest, most secret war.

Both American and Pakistani officials seem to agree that the only long-term solution to combating the militants in the border region is through better coordination. For now, however, there’s little trust between the two sides, and suspicions are growing.

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

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

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A month of primary recounts in the election battleground of Palm Beach County, Florida, has twice flipped the winner in a local judicial race and revealed grave problems in the county's election infrastructure, including thousands of misplaced ballots and vote tabulation machines that are literally unable to produce the same results twice.

Experts say the brew of administrative bungling and mysterious technological failures raises new and troubling questions about the county that played a crucial role in the 2000 presidential election debacle, and is one of a handful of counties considered pivotal in the upcoming presidential election. Voting advocates are fearful that problems here -- and perhaps in other election hot spots -- could trigger a replay of the disputed 2000 election.

"It doesn't get any more swing than that swing state," said Pamela Smith, president of election-integrity group Verified Voting, "and that's a major county. This is going to be a very high-turnout election. In any election you should be able to have justifiable confidence in the outcome. If you're having different results every time you count the ballots, that's not going to create confidence."

At issue is an Aug. 26 primary election in which officials discovered, during a recount of a close judicial race, that more than 3,400 ballots had mysteriously disappeared after they were initially counted on election day. The recount a week later, minus the missing ballots, flipped the results of the race to a different winner.

The county eventually found the missing ballots after a prolonged hunt. But it also turned up an additional 200 or so ballots that officials never knew were missing and that were never counted in the original tabulation of the race. A recently completed recount -- with all of the ballots -- has restored victory to the original winner. But the month-long saga has left voters and state officials exasperated and distrustful of the ability of county officials to run a competent general election in November. More important, it's also uncovered perplexing problems in some of the county's high-speed optical-scan tabulation machines, made by Sequoia Voting Systems. The machines flunked reliability tests prompted by the recount -- producing different results for the same batch of ballots.

The probe began after Florida's August primary, which involved a variety of local races in different districts. In Palm Beach County, the one-page ballot included a race for a Circuit Court judge seat, which resulted in attorney William Abramson beating incumbent Judge Richard Wennet by just 17 votes.

Florida election law requires a recount when a margin of victory is one-half of 1 percent or less. But when officials conducted the recount a week after the primary, they discovered they had 3,478 fewer ballots than when they'd counted them on election day. Undeterred, they proceeded with the recount, which resulted in Abramson losing to Wennet this time, by 60 votes.

The county planned to certify the recount results, despite the absence of nearly 3,500 ballots and protests from Abramson, until state election officials stepped in and said they would not accept the results in that race until the county found the missing ballots.

A hunt for the ballots ensued, and was so successful that officials found an additional 227 ballots that were never counted on election day. All of the ballots were discovered in boxes in the county's tabulation center. Officials blamed the overlooked ballots on the disorderly way in which the recount was conducted, and the high number of ballots cast in the election.

On that last point, it's worth noting that about 100,000 primary ballots were cast in the county. The county is expecting more than half-a-million ballots to be cast Nov. 4. The ballot in November will also be two pages long, as opposed to the one-page ballot used in the primary, increasing concerns that the county could become ground zero for an election meltdown in the presidential race.

After the missing and new ballots were discovered, a court ordered a second machine recount of the judicial race. The second recount confirmed the initial election results, that Abramson was the winner. But this time his margin of victory was 115 votes, up from the 17 votes by which he'd originally beaten Wennet.

But even that wasn't the final score.

As mentioned above, Florida law requires a recount if the margin of victory in an election is one-half of 1 percent or less. That recount is only a machine recount, not a manual recount. However, if that recount results in a margin of victory that is one-quarter of 1 percent or less, then county officials must manually examine ballots that were spit out by the recount machines as being unreadable for having an undervote or overvote in the disputed race. They do this to determine if the machine missed legitimate votes that were marked correctly or if the voter's intent was clear enough that the ballot should be counted anyway even though the voter failed to mark the ballot correctly (for example, if a voter failed to follow directions on the ballot and circled a candidate's name instead of filling in a space next to the candidate's name as the ballot instructed).

So Palm Beach County proceeded to do a manual examination of some 12,000 ballots that the optical-scan machines had rejected. Officials found legitimate votes that were marked clearly and correctly and should have been read by the machines. They also found other ballots that were not marked correctly and therefore couldn't be read by the machines, but still indicated a clear choice by the voter.

In the wake of that count, Abramson was still the winner, but now his margin of victory had gone down from 115 votes to 58 votes. Then a new surprise emerged.

Election officials discovered that an additional 159 ballots from 54 precincts may have had valid votes on them that never made it into the tabulation.

They determined this by looking at reports that each voting precinct produced on election day. Those reports indicated the number of ballots that the precinct-based optical-scan machines had flagged for undervotes or overvotes. Officials discovered that the numbers of undervotes and overvotes didn't add up to the total numbers that county election officials had calculated after the ballots were run through the county-based high-speed optical-scan machines.

This raised questions about whether optical-scan machines were erroneously rejecting legitimate votes as undervotes, or whether election officials had simply misrecorded the numbers or mistakenly placed legitimate ballots into piles of undervote ballots.

So county officials decided to ask a judge to let them conduct a third machine recount of some 3,000 ballots to see if they could find the mysterious 159 ballots that were throwing off the numbers. Additional legitimate votes were found in this round; at the end, Abramson was still the winner, but his margin of victory was now 61 votes, nearly the identical margin by which Wennet had won in the first recount.

"I'm overwhelmed," Abramson told the South Florida Sun-Sentinel. "This is why we're the greatest country.... We were faced with adversity and we all rose to the challenge."

Wennet had a different view.

He said Florida law allowed for only one recount and that the additional recounts were invalid. He asked a court to throw out any results after the initial recount that had him winning by 60 votes, even though that initial recount was conducted without some 3,500 missing ballots.

Barring that, Wennet asked for a do-over election on Nov. 4.

As part of his complaint, Wennet cited the unreliability of the optical-scan machines that counted the ballots. He asked the court to order a test of the high-speed optical-scan machines that were used for the recount.

Palm Beach County was using new optical-scan machines that it recently purchased from Sequoia Voting Systems for $5.5 million. The machines replaced paperless touchscreen machines that the county had purchased in 2002, which were bought to replace punch card machines that were involved in the 2000 election debacle. Florida outlawed paperless voting machines last year, leaving Palm Beach and 14 other Florida counties to change their voting systems for the second time in eight years. (All Florida voting machines, including touchscreen machines, must now produce a paper trail). The county used one model of Sequoia's scanners at precincts on election day, but used different high-speed scanners in the election office headquarters to conduct the recount.

So on Wednesday last week, the county conducted a test on a random sampling of its eight high-speed machines. It scanned about 262 ballots that had previously been rejected by machines for having undervotes or overvotes, and that had then been examined by hand to determine if the machine's reading of the ballots was accurate.

Only two of the county's eight high-speed machines were tested. That's because last Thursday the county was scheduled to begin programming its optical-scan machines for the Nov. 4 election.

Officials expected the machines would reject the same ballots again. But that didn't happen. During a first test of 160 ballots, the machines accepted three of them. In a second test of 102 ballots, the machines accepted 13 of them, and rejected the others. When the same ballots were run through the machines again, 90 of the ballots were accepted. (All of these numbers come from the Sun-Sentinel story about the test. Election officials could not be reached to confirm the numbers.)

Wennet's attorney, Gerald Richman, who witnessed the tests firsthand, provided Wired.com with more details about the test, which, if accurate, clearly endorse his belief that the machines are highly unreliable.

Richman told Wired.com that four ballots that had previously been rejected by a high-speed machine were examined by a county canvassing board and deemed to have clearly marked legitimate votes that should have been read by the machines. When the four ballots were run through each of the two high-speed machines again, three of the ballots were accepted and read by both machines this time, but the fourth ballot was again rejected.

Richman said the county then re-scanned two batches of 51 ballots each that had initially been rejected for having no vote cast in the judicial race, but that were found in a manual examination to contain legitimate votes for one candidate or the other. The first batch of 51 ballots were found to have legitimate votes for Abramson. The second batch of 51 ballots were found to have legitimate votes for Wennet.

In the ballots containing votes for Abramson, 11 of the 51 ballots that had previously been rejected as undervotes were now accepted by one of the machines as having legitimate votes, and the remaining 40 ballots were rejected as having no vote. In the ballots containing votes for Wennet, the same machine accepted 2 ballots and rejected 49.

The same two batches of ballots were then run through the second high-speed optical-scan machine. This time, the machine accepted 41 of the Abramson ballots as having legitimate votes (up from 11 on the other machine) and rejected 10 others. In the batch of Wennet ballots, the machine accepted 49 and rejected 2 -- the exact opposite of the results from the first machine.

"We just sat there with our heads spinning," Richman said. "It was unbelievable. Nobody has been able to explain it."

Richman said some of the ballots that were correctly marked were rejected, while other ballots that the machines read in the test should have been rejected by the scanners. These ballots were marked with a check or "X" instead of the voter filling in the gap in a broken arrow next to the candidate's name, as the ballot instructed.

Because of the problems in these tests, a second round of testing was conducted last Friday on six precinct-based optical scan machines out of a thousand machines the state uses. (These were machines that counted votes at precincts on election day, not the eight high-speed machines that counted ballots in the recount.)

According to the Sun-Sentinel, the six machines functioned properly in that test. But Richman said the test only involved re-scanning 10 ballots from two precincts to see if the 10 votes that were initially recorded in the judicial race at those precincts remained the same in the test.

"We had no time to do more," Richman explained. "Those machines had to be serviced the following day and reset for the [November] election."

Neither Palm Beach County officials nor Florida's secretary of state have responded to several calls for comment. Sequoia Voting Systems also has not responded to a call to explain why some of its high-speed machines rejected legitimate ballots. Sequoia has likely been preoccupied with another issue involving its optical-scan machines in Washington, D.C., where hearings are being held to examine why a Sequoia system mysteriously added 1,500 phantom write-in votes to the Sept. 9 primary election totals in one precinct and calculated a total of 4,759 votes cast in the precinct where only 326 were actually cast. The company has blamed the issue on static discharge or mishandling of a memory cartridge by poll workers.

Back in Florida, Richman has compiled an affidavit (.pdf) describing the results of the tests conducted on Palm Beach County machines to submit in Wennet's suit. But Richman, who is on Sen. Barack Obama's legal team, says the problem isn't only how the machines malfunctioned in the recount and the tests, but how the problem might not have been uncovered at all if the judicial race hadn't been so close that it required a manual examination of the undervote ballots.

"[Ordinarily] nobody looks at ballots that have been counted by the machine," Richman said. "Normally there is a presumption that whatever the machine does is correct, and you only look at the overvotes and undervotes in a hand recount. Which is a problem, because if [the margin of victory] is not within a quarter of 1 percent, you never get to a hand count. If there were mistakes involving other races, we'll never know what the mistakes were."

Douglas Jones, a professor of computer science at the University of Iowa who has consulted with a number of states on voting machine issues, said the problem with the machines is likely inconsistent calibration among machines.

Jones blamed the federal voting system standards by which voting systems are tested and certified. He says the federal standards don't set a threshold for what should be an acceptable number of scanning mistakes and calibration decisions are thus left to the companies that make them.

"This is an area where our voting system standards are virtually silent," he said. "The voting-system standards only require perfect counting of perfectly marked ballots. They don't have anything to say about how the machine counts ballots marked by real people in real elections. The standards don't govern one of the most important things about the machines."

Jones also blamed election officials who fail to properly test machines before elections or who leave pre-election testing and setup of machines for vendors to do, rather than doing it themselves.

"That's the norm, that the vendor sets up the machines," Jones said. "And my experience is that counties that contract with the vendor to operate the voting system generally don't do anything to monitor the performance of that contract."

In 2004 in Napa County, California, an optical-scan machine made by Sequoia failed to count more than 6,000 votes, because the Sequoia employee who set up the machine failed to calibrate it to read certain kinds of pens that voters used to mark their ballots.

Florida is expected to be a fierce battleground in the presidential race. If Obama or Sen. John McCain wins with a large-enough margin, there will never be reason for a recount that might uncover the kinds of mistakes that were revealed in the primary aftermath.

If there is reason for a recount, the time frame to conduct it could be a problem, considering how long it took to complete multiple rounds of recounts in the judicial race. Florida state law gives counties only 12 days after a general election to certify election results (counties have only 7 days after a primary to certify results), which provides little time for a complicated or problematic recount to be resolved -- that is, unless the state canvassing board refuses to accept problematic recount results, as it did in the judicial race this year.

In the 2000 presidential race, state officials weren't as accommodating. At the time, Florida's law allowed counties only 7 days to certify results from a general election, and then-Secretary of State Katherine Harris refused to extend the deadline on Nov. 14 to allow counties to conduct a manual recount of the paper ballots that were cast in the disputed presidential race. The state Supreme Court overruled her and extended the deadline by to Nov. 26. But when Palm Beach County requested an additional extension to finish counting the last 1,000 ballots, Harris refused and certified George Bush the winner by fewer than 600 votes. Palm Beach County completed its hand recount two hours after the deadline passed.

Smith's Verified Voting group led the national charge to replace paperless touchscreen machines with optical-scan machines and other machines that produce voter-verified audit trails. She said it's not enough to have paper ballots: Palm Beach and other counties using optical-scan machines need to have robust pre-election and post-election testing of machines to make certain they're calibrated correctly and that they're reading a wide range of pencils and pens that voters use to mark their ballots. They also need robust manual audits to randomly compare a sample of cast ballots with the machine tabulation rather than waiting on a close race and a recount to catch problems with the machines.

It's unclear if Palm Beach County will be able to test its systems in the manner Smith describes for November. According to a news report, the county has asked Sequoia to examine all eight of its high-speed optical scanners next week.