Monday, March 16, 2009

How the US is shifting the financial crisis onto the rest of the world

How The World Pimps America

By Pepe Escobar

How the US is shifting the financial crisis onto the rest of the world

The US Treasury will borrow no less than one trillion dollars from the developing world in 2009. It will need even more in 2010. Pepe Escobar argues the US is indeed in a privileged position: not only it unleashes a global financial crisis, it then sucks up money from all over the world, based on the fact that the US in fact remains the "manager" of choice of global capitalism. As if this was not hardship enough for the developing world, it now also has to cope with the resurgence of the discredited World Bank and IMF. A certain Tim Geithner has been through this before - during the Asian financial crisis in 1997/1998 - and then he got it all wrong.

The TALF - Bernanke's Witness Protection Program


Bernanke's Witness Protection Program

By Mike Whitney

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Fed chief Ben Bernanke's new funding facility is a real doozy. In fact, if the Term Asset-Backed Loan Facility or TALF, which is set to launch on Thursday, doesn't convince the American people that it's time to take a wrecking ball to the Central Bank and start over, than nothing will. Bernanke and his co-conspirator at Treasury, Timothy Geithner, are planning to revive the shadow banking system by dumping $2 trillion into the same over-leveraged, derivatives-based garbage that blew up the financial system in the first place. All the blabbering about a "good bank-bad bank" remedy appears to have been a diversion. This is how Bloomberg sums it up:

"Geithner’s program has three main elements: Injecting fresh government capital into some of the country’s biggest financial institutions; establishing a public-private partnership to handle as much as $1 trillion of banks’ bad assets; and starting a credit facility with the Federal Reserve of as much as $1 trillion to promote lending to consumers and businesses.

The Treasury hopes to unfreeze credit markets by providing new incentives to banks and investors to resume trading in mortgage securities and other troubled assets. U.S. regulators are conducting a new series of examinations to make sure banks have enough capital to accept losses when selling these assets, while also planning to provide government financing to the investors who might buy them." (Bloomberg News)

That's right; $1 trillion for Bernanke's TALF and another trillion for Geithner's so called "Public-Private Partnership". That's $2 trillion down a derivatives sinkhole just to preserve the illusion that the banks are still solvent. Bernanke has decided to shrug off the advice of nearly every reputable economist in the country, most of whom are pushing for a government takeover of the failing banks (nationalization), just to toss his shifty banking buddies a lifeline. It doesn't seem to bother him that the public till has already been looted and that his action will leave the next generation of Americans bobbing in a pool of red ink.

Last week, investors backed away from Bernanke's TALF, even though the Fed promised to provide up to 95 percent of the funding (through low interest loans) to investors willing to buy distressed assets backed by student loans, car loans and credit card debt. The potential investors "objected to the level of scrutiny that dealers would have over their books, arguing that the dealers' rules attached too many strings. Dealers were saying they take plenty of risk to facilitate the program and need to be protected in situations where the collateral or the client made mistakes or wound up ineligible." (Wall Street Journal")

This is how crazy it's gotten. Why shouldn't the Fed have the right to look at the books and see if these financial institutions are solvent or not? Should they just take their word for it?

But that's only half the story. When the WSJ says that dealers need to "be protected in situations where the collateral or the client made mistakes or wound up ineligible", what they mean to say is that they expect the Fed to make up for any losses on securities which are explicitly banned from the program. This is no small matter, since the Fed cannot legally buy any asset that is less than triple A, and yet, everyone knows the TALF will end up being a dumping ground for all kinds of toxic waste.

So who will pay when financial institutions sell double A or lower securities that they KNOW are ineligible for the program? As it stands now, the taxpayer, because the Fed caved in to industry pressure. In other words, the interests of the people who put up a measly 5 percent of the original investment will take precedent over those who put up 95 percent. This is the kind of sleazy dealmaking that is going on behind the scenes of this bailout fiasco. The Fed is so desperate to launch its facility and keep these Wall Street scamsters and bank extortionists in business, they're willing to underwrite the fraudulent sale of rotten securities. It's outrageous!

But there's even more to this swindle than that--much more. According to the Wall Street Journal:

"Wall Street dealers, including J P Morgan Chase & Co. and Barclays PLC's Barclays Capital, have created vehicles to participate in the TALF that would allow investors in the program to circumvent many of the restrictions laid out by the Fed. The vehicles resemble collateralized debt obligations, or CDOs, and use some of the financial engineering that was partially responsible for the collapse of the credit markets. The Fed, eager to get what it hopes will be a $1 trillion program up and running, has blessed the vehicles because they open the TALF up to a much larger group of investors." (TALF is reworked after investors balk, Liz Rappaport, Wall Street Journal)

Great. More CDOs. Just what we need.

Keep in mind that the Fed's funding is in the form of "non recourse loans" already, which means that if the dealers decide to walk away, the losses are transferred to the taxpayers balance sheet, no questions asked. But even that is not good enough for the Wall Street crooksters. They want to create a whole new security buffer-zone for themselves by dredging up the Frankenstein of structured debt-instruments--the notorious CDO--so they can "circumvent" the rules and plead innocent when B grade garbage is sold through the TALF. This isn't a financial rescue plan, it's a witness protection program for self acknowledged con artists and snake oil salesmen.

Again, the Wall Street Journal:

"Under the new proposal, a bank such as Barclays or J.P. Morgan would set up a trust to buy securities with money borrowed from the Fed. The trust would then sell investors securities in the trust. Those securities would give returns similar to the TALF loan, but without the strings attached....The dealers say they could create markets for these derivative securities to trade.

The Fed's culpability in this boondoggle is undeniable. Bernanke and his wily friend at Treasury have given their full support to a plan that does nothing but move trillions of dollars of toxic waste from one balance sheet to another while foisting the liability onto the American taxpayer. And don't be misled by the term "trust" in the Journal's report. In this instance, "trust" refers to an Enron-type, off-balance sheets Structured Investment Vehicle (SIV) which is designed to keep investors in the dark about the real condition of the financial institutions that run them. SIV's are the banks sausage-making units which hold hundreds of billions of dollars of undercapitalized complex securities, like mortgage-backed securities (MBS) and collateralized debt obligations (CDO). These are the same debt-instruments which greased the skids for the current downward death-spiral.

Wall Street Journal:

"The vehicles also would make it easier for investors that aren't eligible for TALF loans to buy into the program, like investors that are restricted by their investment guidelines from using borrowed money to buy securities. Smaller hedge funds that can't vie for large allocations of deals could also buy in through these vehicles."

"Sure, what the heck. Why worry about "eligibility" or "restrictions"? We don't need a financial rescue plan that isolates the toxic waste and writes down the losses. We don't need to protect the taxpayer or the depositor. We'll just keep asset prices in the stratoshpere for a while longer by adding a little more helium and pretending that private institutions really want this mortgage-backed sludge. That way, we can keep the public from knowing what's really going on." This seems to be the general line of reasoning at the Fed and Treasury.

Wall Street Journal:

"Some investors have raised concerns, however, noting that the structure puts these dealers at an advantage in bidding and influencing the price of new offerings. They also say the derivative securities present old and familiar problems, such as keeping the end holder of the risk of the TALF securities several steps away from the pricing of that risk."

The economy is sliding headlong into another Great Depression because of the mispricing of risk, the sale of complex and unregulated derivatives, the vast and unsustainable use of leverage, and shadowy and fraudulent off-balance sheets operations. When the TALF is launched on Thursday, all of these same activities will be reignited with the explicit blessing of the Central Bank. It is a reckless, wacky plan to keep the banks in private hands and to keep asset prices inflated beyond their true market value.

Bernanke and Geithner are moving ahead with their plan despite the clearly articulated guidelines set out by the world's finance ministers and central bankers who convened over the weekend in Sussex, England. Number 7 of the G-20's Communiqué reads:

"We have also agreed to: regulatory oversight, including registration, of all Credit Rating Agencies whose ratings are used for regulatory purposes, and compliance with the International Organization of Securities Commissions (IOSCO) code; full transparency of exposures to off-balance sheet vehicles; the need for improvements in accounting standards, including for provisioning and valuation uncertainty; greater standardization and resilience of credit derivatives markets; the FSF’s sound practice principles for compensation; and the relevant international bodies identify non-cooperative jurisdictions and to develop a tool box of effective counter measure."

It couldn't be much clearer than that. But don't expect "compliance" from Geithner or Bernanke. They have no intention of reworking their plans to meet the demands of the G-20. No way. Multilateralism and cooperation might sound great in speeches, but it's not what drives policy.

The TALF and the "Public-Private Partnership" are another slap in the face of the international community. They violate the spirit and the letter of the G-20 communique. It will be interesting to see if foreign holders of US Treasurys endure this latest insult in silence or if there's a sudden stampede for the exits. There's a sense that the world is getting fed up with the Fed's financial chicanery and would like to chart a different course. Enough is enough.

Obama administration: Guantanamo detainees have 'no constitutional rights'

Obama administration: Guantanamo detainees have 'no constitutional rights'

Joe Byrne

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Court documents filed Friday reveal that Obama's lawyers are arguing that Ex-Guantanamo detainees have no constitutional rights.

The Center for Constitutional Rights(CCR), a non-profit legal advocacy group, is supporting four British citizens - Shafiq Rasul, Asif Iqbal, Rhuhel Ahmed and Jamal al Harith – in their suit alleging religious mistreatment and torture at Guantanamo Bay. Defendants in the case include Donald Rumsfeld and Gen. Richard Myers, the retired chairman of the Joint Chiefs of Staff. The four men say that they were “beaten, shackled in painful stress positions, threatened by dogs and subjected to extreme medical care,” according to the Miami Herald. In addition, they reported being forced to shave their beards, being banned from prayer, being denied prayer mats, and watching a copy of the Koran get tossed in the toilet.

Last year, the U.S. Circuit Court of Appeal in D.C. voted unanimously against the 4 ex-detainees. The Appeals Court claimed that the men did not fit the definition of 'person' in the Religious Freedom Restoration Act, because they were foreigners being held outside the United States. Months later, the Supreme Court instructed the Appeals Court to reconsider their decision, based on a Supreme Court ruling that Guantanamo detainees have some rights under the constitution. On Friday, the CCR re-filed their brief in the D.C. Court of Appeal.

Obama's justice department is using an old strategy employed by the Bush administration. Their primary argument is that Ex-Guantanamo detainees don't have any constitutional rights. Even if they did, the brief continues, Rumsfeld and other officers should be immune from prosecution because detainees’ right not to be tortured and to practice their religion without abuse was “not clearly established” at the time of their detention. The Obama administration supports the earlier decision by the Appeals Court that the ex-detainees do not have constitutional person-hood. The case should be dismissed because of special factors “involving national security and foreign policy,” the government's brief concludes.

However, “it has long been established that there is an irreducible constitutional minimum that government officials owe to human beings under their control – whether citizen or alien – that necessarily includes the prohibition of torture,” the plaintiff's brief contends. CCR is disappointed the new administration “squandered this opportunity to separate themselves from the policies of the past and to speak with moral force about torture and religious freedom,” said Michael Ratner, president of the organization.

Obama has decided to close the Guantanamo Bay detention facility by 2010. On the same day as the ex-detainee's brief was filed, the White House dropped the term 'enemy combatant' from legal documents. The assertion that ex-detainees have no constitutional rights is a problem for non-citizens being detained outside of U.S. borders, who worry that this case will set precedent and enable the military to legally disobey the constitution.

Mint Suspends Gold Sales: China Warns on U.S. Dollar and Debt!: UBS Warns $10,000 Gold

Mint Suspends Gold Sales: China Warns on U.S. Dollar and Debt!: UBS Warns $10,000 Gold

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The demand for gold is so strong, and the supply so limited the United States Mint has temporarily suspended the production of both Mint American Eagle Gold Proof and Uncirculated Coins.

According to the US Mint they suspended production...

“...because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .”

The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.

I realize that the many investors are taking heart in the fact that the Dow Jones rallied last week and may be hopeful that the worst of the credit crises and recession may be over but its far from over. I’ve been warning that the worst is yet to come and continue to do so.

Rapidly rising food prices coupled with weakening currencies in Eastern Europesymptoms of a much bigger problem. East Europe is buried with trillions in bad debt that threatens to bring not only a new wave of bank failures but also the collapse of several countries. This is literally setting the stage for a monetary collapse that will make the credit and banking crisis look like a walk in the park. Increasing numbers of news reports are beginning to recognize the rising danger, including the New York Times that lead with this danger on its front page last Monday.

Gold possible heading to $6,948 even $10,000 an ounce?

The rising danger or a monetary collapse and a wicked round of inflation has prompted a new $2,500 target price for gold by at UBS Securities. According to analyst Daniel Brebner and others at UBS Securities, the firm’s analytical recently plotted out a number of scenarios using various levels of strength for inflation and the U.S. dollar, and predicted that gold will not fall below US$500 an ounce between now and 2015, and could rise all the way to US$2,500 an ounce.

To get there would require inflation at 1970s levels and a weak U.S. dollar, UBS said. The bottom end of the range would require static inflation and a strong dollar.

There is another possibility UBS raises: what if a new gold standard was adopted to support currencies, particularly the U.S. dollar?

Using the current value of the U.S. monetary base and the country's reported gold holdings, UBS calculated a value for gold of US$6,948 an ounce. In other words, that is the level gold would need to be at to support the value of the U.S. dollar, given the number of dollars in circulation. If China and Japan are included, UBS predicted that the price would be close to US$10,000 an ounce.

But is that really possible? The UBS team noted that a gold standard would theoretically bring some confidence back to currencies and stabilize them. But it would create all kinds of problems by removing flexible exchange rates, and they noted that not much headway has been made in this area.

Regardless there are no shortages of problems ahead. Many are being created by the printing of TENS OF TRILLIONS OF NEW DEBT.

China expresses genuine concern over the safety of the U.S. Dollar and Debt

The danger is so great that it promoted China’s premier to express concern this past Friday about China’s massive holdings of Treasuries and other U.S. debt, appealing to Washington to safeguard their value, and said Beijing is ready to expand its stimulus if the economy worsens.

Premier Wen Jiabao noted that Beijing is the biggest foreign creditor to the United States and called on Washington to see that its response to the global slowdown does not damage the value of Chinese holdings.

“We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried,” Wen said at a news conference following the closing of China’s annual legislative session. “I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.”

If you’ve been a subscriber to Gold & Energy Advisor for a little while you’ve no doubt remember the few issues I’ve done in the past entitled “The Death of the Dollar” and “China’s US $ Blackmail” which details how China's growing wealth and military power will help drive gold to $2,500 and platinum to $5,000 per ounce. The U.S. Dollar and our economy are absolutely at the mercy of China.

Premier Wen Jiabao statements should be seen as the first shot across the bow of the economic security of the United States and dollar.

There’s big trouble brewing: Right now the U.S. stock market and the value of the U.S. Dollar are giving many investors hope that the trouble is passing. It isn’t!

There’s a reason there’s a gold coin shortage and even a shortage of bullion that is so severe the U.S. Mint has had to suspend sales of U.S. Gold Eagles. Smart money all over the world is looking past the temporary rays of sunshine and hope and is focused on the bigger long term picture which are being summed up very well by Chinese Wen Jiabao in his warnings to the Obama Administration.

If you’re not holding at least 15% of your available investments in physical gold ( I am now recommending 50%), platinum and or rare numismatic coins as a proxy against a monetary collapse you’re playing with fire. The danger continues to grow.

Obedience to Authority in America

Obedience to Authority in America
A Different Kind of Revolution

By Mike Whitney

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My e mail exchange with Dr. Bede Vincent Curley

I have been beating the same dead horse for three or four years now and many people are getting tired of the endless iterations of collapsing markets, rising unemployment and growing pessimism. What's needed is a vision of the future and a concrete plan of action, but I don't have one. So, tell me, what is to be done?

Bede Vincent Curley: I do not know what is to be done in the US.... Thinking people can see that most Americans veer between manic-depression and paranoid-schizophrenia. While they know they are getting kicked around by the rich, there's such a strong tradition of obedience to authority in America that most people just take it in stride and just get on with their lives. This is a population with an severe "abuse" problem. I compare it to the compulsive behavior among women and children who've lived in abusive relationships. The sickness passes from one generation to the next without interruption. It is a condition that has to be treated, which means creating a process where the person can see that the violence being done to them is violence and not love. America is a nation badly in need of therapy.

The US is full of such abusive notions as "tough love" which only reinforces dependence on the violent parent or partner. There is absolutely no way to confront the situation constructively except by raising awareness to what is happening and pointing out as clearly as possible that this crisis was created by the rich and imposed on the rest of us. And, as soon as you say that, you risk being marginalized-- especially among the I-Generation.

There's almost no discussion about class in the US, even among the Left, and yet, the chasm between rich and poor has grown wider in America than anyplace in the industrial world. The rich get richer and the poor own nothing. The middle class--the class of illusion--is committed to defending the so called American dream and believing whatever the rich tell them in order to sustain their own very tenuous existence. Remember, George Carlin said that "They call it the American dream, because you have to be asleep to believe it." Just try to convince someone in the middle class, some working man or woman, that the US kills and exploits the rest of the planet to serve the narrow interests of 10% of the population, they just point to their college educations, their cars, and other trinkets and shrug it off as unimportant or plug their heads back into the sand. What do they care? They have their Starbucks and their I-Pods and their flat-screens.

That's the bad news. The good news is that the US is a very big country. If reactionaries (militias?) can seize territory (as they routinely do in the South and parts of the West) why not revolutionaries?

Americans should take the constant erosion of civil and economic liberties in their country over the past 30 years seriously. They need to ask themselves who has benefited from the enormous investment in more police, prisons and military, than in schools and hospitals or affordable housing? These developments were not inevitable or automatic. That means that other choices were and still are possible but they must be made consciously and they require action to implement them.

The banks aren't going to feed and house people or provide them with anything except shinier chains. The poor and black will get rusty chains, tent prisons, and brutality, like they always do (especially given the host of government incentives for the private prison-industrial complex). The next time someone brings up our "post racial" society, just remind them of Katrina and the thousands of poor black people who were herded into the Superdome at gunpoint. The evacuation and "reconstruction" of New Orleans bear an uncanny resemblance to forced removals imposed by apartheid South Africa under the infamous Group Areas Act. Apartheid's founders drew explicitly on US segregation practice. Don't think it can't happen here again.

What is needed is a different kind of civil disobedience aimed at regaining local control of ECONOMIC resources...a whole new model of social and human responsibility focused on localism and community.

The way the financial crisis is unfolding, we'll all have to focus on saving our own environment "close to home" without help from the government. We should remember what Malcolm X and others who were murdered in the struggle for justice in the US had to say about human dignity and self reliance; we'll need it.

People should organize to solve real material problems. Forget about overthrowing "the government". That's nonsense. They should focus on defending their homes, strengthening their role in the community, and staying alive. By any means necessary. There will be plenty to do just assuring that basic needs are met. For example, a person facing eviction has no chance to resist by himself, but if the community comes to his defense, then the sheriff's department will have to back off. This rule can be applied elsewhere, too. Small victories can inspire tenacity, too. The "strike" was never a privilege granted by Congress. It is a weapon of self-defense against abuse that involved the whole working community and not just union members. A factory closing is an opening for resistance. Crowds prepared to storm a WalMart for Christmas shopping sales should be able to storm the doors and occupy the buildings to protect jobs like they did in Chicago earlier this year. The same thing happened in Argentina after their meltdown.

Financial crisis is an opportunity for political mobilization, but people have to pull together and work for a common goal. If a supermarket chain threatens to shut down or lay off workers; it should be boycotted. At the same time however, local farmers should be organized to set up community-supported alternative stores to provide affordable food. These are all politically charged actions that have been tried in the past with some degree of success. Not everything will succeed, but what other choice is there? People are losing their homes and livelihoods. The system is breaking down. It's time for community politics to take precedence over "identity politics". As Benjamin Franklin was reputed to have said, "We must all hang together, or surely we will all hang separately".

You can't educate sedated and misinformed Americans overnight. But resistance is a process, and it's a process that improves one's chance for survival. Look at what happened in Gaza. The main cities were bombed mercilessly by the Israelis but they managed to keep the hospital open. If the Palestinians can accomplish that, then it ought to be possible to take over a local clinic and keep it running even if supplies are cut off.

Of course, this will require an alternative media to succeed. People will need to be updated regularly by reliable independent sources. There could be corporate and government manipulation and attacks on citizen access to the Internet and other alternative media to disrupt activism. In fact, the Pentagon already has plans for nearly every imaginable scenario. And, of course, the MSM will try to discredit the so-called "troublemakers". The government will do everything in its power to crush grassroots resistance, but history tells us, that when a system breaks down, the central authority gets weaker and weaker while local groups step in to fill the power vacuum.

The country is simply too big for a domestic force of a couple hundred thousand soldiers to manage. Just look at Iraq; there were only 25 million Iraqis and it still turned into chaos. There are over 300 million people living in America; it cannot be done. Besides, on the odd chance that rioting breaks out, there may be reluctance among some in the elite to deploy soldiers visibly to major cities, for fear that foreign capital will flee and further aggravate the capital markets. Still, groups should establish redundancies to stay connected and better endure disruptions.

I'll stop here, since there's enough to think about in this rather long and sermonizing message. I am an optimist though, because it isn't over until we die. As long as people have a will to live there is a reason to resist. There are things that can be done that don't require blind hope. People need to see that their communities are under attack and that their future is no longer certain. The economic problems of feeding the top 10% are not going away, in fact, they're getting worse.

The only standard by which an economy ought to be measured is whether all the people who live in it are fed, housed, clothed, educated, and receive care and rest-- if that cannot be done then the economy has failed and has to be rebuilt to meet that standard. We're at war, and the enemy is not the government per se, but the super-rich corporatists that run the government and who prevent the economy from serving human needs.

FBI cited for poor freedom of information work

FBI cited for poor freedom of information work


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The FBI tells two out of every three Freedom of Information Actfailure rate requesters that it can't find the records they asked for — a five times higher than other major federal agencies, a private study has found.

The FBI's performance results from an outdated and deliberately limited search process, according to the National Security Archive, a private group that publishes declassified government documents and files many FOIA requests.

The Archive awarded the FBI its Rosemary Award for the worst Freedom of Information Act performance by a federal agency. The award is named for former President Richard M. Nixon's secretary Rose Mary Woods, known for re-enacting her claim to have accidentally erased 18 1/2 minutes of a White House tape recording when she stretched to answer a phone. It's given annually around Sunshine Week, when journalism organizations promote open government and freedom of information.

"The FBI knowingly uses a search process that doesn't find relevant records," Archive director Tom Blanton said Thursday. "Not only does this woeful performance lead to unnecessary litigation, but the bureau apparently uses the same searches in its criminal investigations as well."

The Archive said FBI records show that over the past four years the bureau told 66 percent of requesters — 37,342 out of 56,530 requests — that it found no responsive records. The 33 large federal agencies which receive the bulk of all FOIA requests responded that way only 13 percent of the time on average, the archive calculated.

In 2008, only 89 requesters, 0.5 percent of the year's total, got everything they asked for from the FBI; 2,276, 13 percent, got part of what they sought.

David Hardy, chief of the FBI's FOIA section, has said the bureau checks FOIA requests against the names on an electronic index of its files.

The electronic index contains names of individuals, organizations, companies, publications, activities and counterintelligence programs. It includes the main name for each file and other names in the file — or cross-references — that case agents think might be useful in the future, but not all names in every file. The electronic index for searching only goes back to 1980s; earlier records have to be searched by hand on paper.

The FBI checks the main names on the index, Hardy has said. It does not check cross-reference names unless specifically asked to, and does not check the entire file. It won't look at paper or field office records unless specifically asked to.

Blanton said modern information systems use electronic search tools that scan the entire text of a document. "The FBI process, in contrast, is designed to send FOIA requesters away frustrated, and no doubt has the same effect on the FBI's own agents."

Hardy told The Associated Press on Thursday the indexing system is designed to support bureau investigations.

"The names our agents pick to put in the index mean something to our investigators," Hardy said. "We're not building a library. If you have something of meaning to the FBI, it's going to be there."

But Blanton responded: "No FBI agent is omniscient. They can't always know what names would be important to another field office or make or break an investigation in the future."

Two men who turned out to be Sept. 11, 2001, terrorist hijackers lived in San Diego and associated with an FBI informant before the attack, but if the agent only indexed the informant's name, they wouldn't find the two hijackers, Blanton said.

FBI spokesman Richard Kolko said "the reason for the huge number of no-records responses is that it's become a cult phenomenon to ask the FBI for records on yourself, and most people don't have FBI records."

But FBI searches frustrate other requesters. Salt Lake City lawyer Jesse Trentadue wanted to know whether bureau documents showed a link between his brother's death in custody and the 1995 bombing of the Oklahoma City federal building.

Trentadue asked for a Jan. 4, 1996, message from FBI Director Louis Freeh's office to the Oklahoma City and Omaha, Neb., offices that discussed the federal building bombers (the FBI's OKBOMB case). His request supplied the correct date for the memo, the names of the sender and two recipients and a newspaper story with direct quotes from it, but the FBI told him no records matched his request.

Trentadue later found the very memo he wanted had been released to another FOIA requester, so he sued the FBI for a better search. Hardy told the court the FBI had used the search term "OKBOMB" to try to find the January 1996 message; bureau officials couldn't say why that search failed to produce the Freeh message, in which the first listed subject was "OKBOMB."

Hardy told AP the law requires reasonable, not exhaustive, searches. "If we were to try to chase down every name with a full text search, the entire Russian army couldn't finish the work in a timely manner," Hardy said. "We think our system is reasonable."

Hardy said the FBI now has the shortest pending times for FOIA requests in its history, no backlogged requests older than three years and fewer than 1 percent older than two. But Blanton said the FBI's average response times of 109 days for an expedited request and 374 days for a complex request are still among the highest in government.

Blanton said the FBI has avoided processing requests by demanding privacy act waivers from any living individual referenced. He said the bureau stopped a student journalism project on the murder of Wall Street Journal reporter Daniel Pearl in Pakistan by requesting a privacy waiver from al-Qaida leader Khalid Sheikh Mohammed, a U.S. prisoner in Guantanamo Bay, Cuba.

"We are supposed to use common sense and waive that rule," Hardy said. "But we correct our errors. We're processing the Pearl documents now."


On the Net:

Archive study:

Foreclosures just keep on rising

Foreclosures just keep on rising

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Let's just hope President Obama's $275 billion plan to stabilize the housing market kicks in fast.

So far, the track record of these grand government interventions with eye-popping price tags has been spotty at best.

Just look at the latest RealtyTrac numbers, which point to a 30 percent, year-over-year increase in foreclosures across the country and a nearly 6 percent jump from just this January.

The increases come even amid a growing number of moratoriums on new foreclosures in various states, noted James J. Saccacio, chief executive officer of RealtyTrac, in a press statement.

Apparently Florida and New York, where moratoriums on foreclosures were recently lifted, saw a big surge in the number of homes put on the auction block.

That, alone, to me is enough to raise questions about the effectiveness of these moratoriums, which appear to be just delaying the day of reckoning while letting the politicians look like they are doing something.

There's one bright spot though. Foreclosure activity in Massachusetts fell more than 24 percent this February from the February 2008, and 12 percent from this January.

Of course, that drop-off appears related to a law that went into effect last year that forces lenders who want to foreclosure to give struggling homeowners a three-month shot at getting their finances back on track.

So don't be surprised if foreclosures here start rising again in a few months.

Cities Are Selling Stimulus Funds to Each Other

Cities Are Selling Stimulus Funds to Each Other

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In Los Angeles County, cities are buying federal stimulus funds from each other at deep discounts, turning what was supposed to be a targeted infusion of cash into a huge auction.

It all started when the county's Metropolitan Transportation Agency decided to hand out $44 million from the federal stimulus package in the form of $500,000 transportation grants to each of the county's 88 cities. But some cities didn't have any shovel-ready transportation projects. So with MTA's blessing, they're selling the grants to the highest bidder:

La Habra Heights, a city of 6,000, has sold its $500,000 in federal funds to the city of Westlake Village for $310,000 cash. Irwindale, population 1,500, also sold its $500,000 to Westlake Village, for $325,000 cash.
The city of Rolling Hills, population 1,900, sold its $500,000 share to the city of Rancho Palos Verdes for $305,000 cash. The city of Avalon has reached an agreement to swap its $500,000 with L.A. County.
This is Southern California that we're talking about--the land of eternal gridlock. MTA could have redirected the money to a nearly infinite list of other transportation projects. But chief planning officer Carol Inge told the Pasadena Star-News that the agency didn't want to do that because "our board wanted to give every city at least a chance to benefit from the stimulus package."

I'm sure many cities have higher priorities than transportation. And I would have liked to have seen more direct aid to ailing local governments in the stimulus bill. Still, MTA's approach strikes me as a bit too creative. What's next, stimuls money credit default swaps?

UPDATE: After this post appeared, MTA reversed course and invalidated these sales. It now says that the stimulus funds can only be swapped for other county money targeted for transit projects. But this probably won't end the controversy. MTA is still handing out a half million bucks to all 88 cities in the county, including the tiny Irwindale, population 1,446. That's $345 per Irwindalian, just for transportation. With that they could hire a worker to dig through the yellow pages and dial up free limos for everyone.

45 percent of world's wealth destroyed in less than 1 year: Blackstone CEO

45 percent of world's wealth destroyed: Blackstone CEO

By Megan Davies and Walden Siew

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Private equity company Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz) CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis.

"Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."

But the U.S. government is committed to the preservation of financial institutions, he said, and will do whatever it takes to restart the economy.

U.S. Treasury Secretary Timothy Geithner plans to unfreeze credit markets through a new program that will combine public and private capital in a fund that would buy bank toxic assets of up to $1 trillion.

"In all likelihood, that will have the private sector buy troubled assets to clean the banks out in terms of providing leverage ... so that we can get more money back into the banking system," Schwarzman said.

He expects the private sector to end up making "some good money doing that," but added there were complex issues on how to price toxic assets.

He put part of the blame for the financial crisis to credit rating agencies.

"What's pretty clear is that, if you were looking for one culprit out of the many, many, many culprits, you have to point your finger at the rating agencies," he said.

Rating companies have been the focus of intense criticism for their role in granting top "AAA" ratings for complex bonds that later plummeted in value, resulting in subsequent rating cuts, in many cases to junk status.

"Once you bought into ... the Triple A paper and it turned out to be paper that was in many situations going to end up defaulting, then you really had the makings of a global problem," he said.

Schwarzman said problems were then exacerbated by mark-to- market accounting rules. Those rules ask banks and other financial institutions to price assets at a value related to how they would be sold in the open market.

Blackstone reported a quarterly loss in February after writing down the value of its portfolio and eliminated its fourth-quarter dividend.

Asked where was a good place to invest, Schwarzman said it made sense to buy cyclical names, which are less exposed to the economic cycles.

He said investors also may find value in debt products, including "senior layers of certain securitizations," where investors can see 15 percent to 20 percent returns, he said.

Geographically, he said there were "pockets of strength" in China, which is committed to getting to an 8 percent growth level, and in India, where the economy is slowing but banks are in good shape.

Obama Extends Sanctions Against Iran

Obama Extends Sanctions Against Iran for Another Year

The United States fears that Iran's nuclear program is a cover to build atomic weapons although Tehran says it is enriching uranium to produce nuclear energy for civilian purposes.

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Citing a continued "unusual and extraordinary threat to U.S. national security," President Obama on Thursday extended sanctions against Iran for one year in a public notice.

It is unclear how Iran will respond to the move. The United States severed diplomatic ties with Iran during the hostage crisis nearly 30 years ago at the U.S. Embassy in Tehran, but Obama has signaled a willingness to pursue a dialogue with the country, particularly over its nuclear program.

At his inauguration in January, Obama said his administration would reach out to rival states, declaring "we will extend a hand if you are willing to unclench your fist."

The United States fears that Iran's nuclear program is a cover to build atomic weapons. But Tehran denies it, saying it is enriching uranium to produce nuclear energy for civilian purposes.

The policy affirmed by Obama on Thursday began with an executive order by President Clinton on March 15, 1995. Since then, it has been affirmed by the White House every year.

Focus on The Gaza Blockade

Focus on Gaza
The Blockade

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In this week's show we look at how the Israeli blockade continues to hinder life in Gaza.

We have an interview with George Galloway and feature a new campaign by an Israeli anti-blockade group.

Plus we follow one fishermen as he tries to provide food for his family.

Posted March 13, 2009

CIA Report: Israel Will Fall In 20 Years

CIA report: Israel will fall in 20 years

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A study conducted by the Central Intelligence Agency (CIA) has cast doubt over Israel's survival beyond the next 20 years.

The CIA report predicts "an inexorable movement away from a two-state to a one-state solution, as the most viable model based on democratic principles of full equality that sheds the looming specter of colonial Apartheid while allowing for the return of the 1947/1948 and 1967 refugees. The latter being the precondition for sustainable peace in the region."

The study, which has been made available only to a certain number of individuals, further forecasts the return of all Palestinian refugees to the occupied territories, and the exodus of two million Israeli - who would move to the US in the next fifteen years.

"There is over 500,000 Israelis with American passports and more than 300,000 living in the area of just California," International lawyer Franklin Lamb said in an interview with Press TV on Friday, adding that those who do not have American or western passport, have already applied for them.

"So I think the handwriting at least among the public in Israel is on the wall...[which] suggests history will reject the colonial enterprise sooner or later," Lamb stressed.

He said CIA, in its report, alludes to the unexpectedly quick fall of the apartheid government in South Africa and recalls the disintegration of the Soviet Union in the early 1990s, suggesting the end to the dream of an 'Israeli land' would happen 'way sooner' than later.

The study further predicts the return of over one and a half million Israelis to Russia and other parts of Europe, and denotes a decline in Israeli births whereas a rise in the Palestinian population.

Lamb said given the Israeli conduct toward the Palestinians and the Gaza strip in particular, the American public -- which has been voicing its protest against Tel Aviv's measures in the last 25 years -- may 'not take it anymore'.

Some members of the US Senate Intelligence Committee have been informed of the report.

Homeless Tent Cities Springing Up In US

Homeless Tent Cities Springing Up In US

NBC News Reports

In Sacramento, California, tent cities populated by the recently homeless have begun springing up in a scene reminiscent of the Hoover ear. This is yet another sign og bad economic times, and reflects the need for change, not based on ideology, but on the practical needs of the people.

Venezuela seizes rice plant from Cargill

Venezuela seizes rice plant from Cargill

By LeiLani Dowell

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The government of the Bolivarian Republic of Venezuela ordered the seizure of a rice processing plant owned by U.S agribusiness giant Cargill on March 4, after the company defied new price-control regulations on rice.

In the face of countrywide food shortages, Venezuelan President Hugo Chávez has instituted measures to help ensure that people get a fair price on basic food staples like white rice, sugar, milk and other products. He also imposed regulations so that food producers must devote 70 percent of their production to products that fall under the price controls.

An inspection found that Cargill’s Cristal rice plant, in the northwestern state of Portuguesa, was producing not white rice, but other varieties of rice that were not price-regulated. In addition, the inspection found that the company was circumventing the law by neglecting to print the regulated price on its rice packages.

National Guard troops also occupied a rice mill owned by Venezuela’s biggest food producer, Empresas Polar. Chávez warned the company’s owner, Lorenzo Mendoza, “If you want to take on the government, you’ll find out that this revolution is for real”—meaning the Bolivarian Revolution, Venezuela’s push towards socialism. (Irish Times, March 6) Chávez has previously nationalized the country’s largest telecommunications, electricity and steel companies.

Washington Post Is a Neocon Propaganda Sheet

Washington Post Is a Neocon Propaganda Sheet

By Robert Parry

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For Americans who hear the name Washington Post and still think of “All the President’s Men” – brave journalists facing down a corrupt President – today’s version of the newspaper would be a sad disappointment, a betrayal of a noble past.

Over the last three decades, the Post has evolved into a neoconservative propaganda sheet, especially its opinion section which fronted for George W. Bush’s false Iraq-WMD claims, led the long-term bashing of Iraq War critics, and defends whatever actions the Israeli government takes, including the recent war in Gaza and apparently its desire to preemptively bomb Iran.

Rather than a newspaper committed to the truth and favoring a broad debate about important issues, the Washington Post has become an enforcement mechanism for a neocon-dominated Establishment, setting the parameters for permissible points of view and twisting facts for that purpose.

A recent example of this enforcement role was its March 12 lead editorial trashing former U.S. Ambassador Charles “Chas” Freeman for issuing a two-page statement pointing out that his nomination to serve as a top intelligence analyst had been torpedoed by Washington’s powerful Israel Lobby.

To the Post’s editors, however, there apparently is no Israel Lobby; there has been no large-scale organized effort to bend U.S. foreign policy to the interests of Israeli governments over the years. Even the suggestion that such a body exists is a sign of delusion, bigotry and a conspiratorial mindset.

The Post editorial entitled “Blame the ‘Lobby’” declared that “Mr. Freeman issued a two-page screed … in which he described himself as the victim of a shadowy and sinister ‘Lobby’ whose ‘tactics plumb the depths of dishonor and indecency’ and which is ‘intent on enforcing adherence to the policies of a foreign government.’ Yes, Mr. Freeman was referring to Americans who support Israel – and his statement was a grotesque libel.”

The Post editors then raised the irrelevant fact that the American Israel Public Affairs Committee “says that it took no formal position on Mr. Freeman’s appointment and undertook no lobbying against him” as the choice to chair the National Intelligence Council, which oversees production of intelligence estimates about threats facing the United States.

The Post’s sleight of hand here was to pretend that only a formal AIPAC objection and direct actions by AIPAC personnel could represent the Israel Lobby. In reality, the Israel Lobby is far more expansive than simply AIPAC and includes a wide array of think tanks, contributors to political campaigns, and media commentators, including senior Post editors and columnists.

The Post’s View

In the editorial, the Post’s effort to deny the existence of an Israel Lobby moves on to assert that since U.S. governments have not done everything that some Israeli leaders have demanded – for instance, giving them help in bombing Iran – then, ipso facto, there is no Israel Lobby.

Left out of this sophistry are all the actions that Washington has taken in line with Israeli desires, such as overthrowing Saddam Hussein’s government in Iraq, turning a blind eye to Israel’s use of high-tech U.S. weapons against Palestinian and Lebanese targets, and fending off international condemnation for such acts as the recent war on Gaza.

The Post makes its case this way:

"Let's consider the ambassador's [Freeman’s] broader charge: He describes ‘an inability of the American public to discuss, or the government to consider, any option for U.S. policies in the Middle East opposed by the ruling faction in Israeli politics.’

“That will certainly be news to Israel's ‘ruling faction,’ which in the past few years alone has seen the U.S. government promote a Palestinian election that it opposed; refuse it weapons it might have used for an attack on Iran's nuclear facilities; and adopt a policy of direct negotiations with a regime that denies the Holocaust and that promises to wipe Israel off the map. …

“What's striking about the charges by Mr. Freeman and like-minded conspiracy theorists is their blatant disregard for such established facts. Mr. Freeman darkly claims that ‘it is not permitted for anyone in the United States’ to describe Israel's nefarious influence.

“But several of his allies have made themselves famous (and advanced their careers) by making such charges -- and no doubt Mr. Freeman himself will now win plenty of admiring attention. Crackpot tirades such as his have always had an eager audience here and around the world.”

Yet, what is striking about the Post’s up-is-down rant is that it was made in the context of a successful neoconservative campaign to blackball Freeman from a job in the U.S. government, where he had a long and distinguished career.

In other words, the Post’s editors pretend that the termination of Freeman’s government career (which they helped destroy) and the smearing of his reputation (which they contributed to) were, in some way, the advancement of his career and his fame.

They also left out that they commissioned one of the most influential attacks on Freeman, a Feb. 28 op-ed by Jon Chait, an editor at The New Republic, an important neoconservative journal whose publisher Martin Peretz has been a staunch supporter of Israeli government actions for decades. [See’s “Neocons Wage War on a ‘Realist.’”]

Piling On

Over the weekend, the Post’s opinion section delivered two more coup-de-grace shots to Freeman’s reputation by publishing columns by Rep. Frank Wolf, R-Virginia, and Post editorial writer Charles Lane – articles that alternatively linked Freeman to the Taliban and to the Darfur genocide – and blasted him for complaining about being subjected to “libelous” accusations.

“Freeman's charges of an elaborate conspiracy to derail his nomination are disingenuous,” Wolf wrote in his op-ed, picking up the theme of no formal AIPAC action. “The ‘Israel lobby’ never contacted me.”

However, Wolf made clear that he had read and absorbed much of the anti-Freeman propaganda that Washington’s neoconservatives were spreading.

Wolf links Freeman to the Taliban’s Mullah Omar (via Saudi financial support both for Islamic madrassas and for a Middle East think tank run by Freeman) and to the Darfur atrocities (via a Chinese-government-backed oil company which paid Freeman $10,000 a year for advice and which has invested in exploration for Sudanese oil).

While such Kevin-Bacon-style guilt by tenuous association might seem over the top in other circumstances, the Post’s editors appeared determined to go to any lengths to ensure that former Ambassador Freeman would face permanent scarring for having mentioned the Israel Lobby – or as they would put it, the “Israel Lobby.”

Using Wolf’s logic, one could accuse nearly every American of supporting the Taliban (because we use Saudi oil) and of complicity in the Darfur atrocities (because we as a nation buy billions of dollars in Chinese goods each year).


Despite the Post’s extraordinary devotion of editorial space to demonize a little known ex-diplomat who had been appointed to an obscure job, the Post’s piling on wasn’t over. The newspaper next published an op-ed by one of its own editorial writers, Charles Lane.

Lane’s chief point was that President Barack Obama must join in the destroy-Freeman campaign.

“The President needs to knock Freeman's insinuations down hard -- for two reasons,” Lane wrote. “The first is to stop them from gaining any more currency than they already have in the rest of the world, especially in Arab and Muslim regions. The second has to do with the United States itself and the quality of our political culture [which Obama has vowed to improve]. Letting Freeman's comments pass unchallenged would undercut it.”

In other words, Lane suggests that Freeman is the one responsible for the ugly personal attacks and that the poor neocons are the victims.

“To be sure, Freeman and his supporters feel ill used,” Lane acknowledged. “The criticism he faced was not 100 percent fair; some of it went over the top in labeling him a pawn of the Saudis, etc. But for the most part it wasn't ‘libelous,’ as Freeman claims. It was basically a strong policy reaction based on his own voluminous paper trail.”

Lane then cites what he terms a “strange” speech by Freeman in 2006 in which the former ambassador labeled the Republican and Democratic parties as "xenophobic, Islamophobic, Arabophobic, and anti-immigrant" and also observed that the United States had become "the planet's most despised nation, with its most hateful policies."

However, in the real world, Freeman’s observations in 2006 were largely correct. Both parties were scurrying to burnish their “anti-immigrant” credentials and were endorsing or acquiescing to President George W. Bush’s extreme rhetoric about the “long war” against Islamic militants.

As Pew and other opinion research organizations discovered, there was widespread global condemnation of Bush’s policies, including his invasion/occupation of Iraq and his use of torture and other barbaric practices in the “war on terror.”

Lane continues: “Even if Freeman had a perfectly legitimate grievance, even if he had been maligned, he wouldn't be entitled to respond in kind -- much less to brand large numbers of his fellow citizens as fifth columnists.”

Remember that just the previous day, the Washington Post had run Wolf’s op-ed linking Freeman to the Taliban protectors of Osama bin Laden and to the Darfur genocide. Some of the neocon attacks on Freeman also had painted him as “an agent of influence” for Saudi Arabia and China, but Lane says Freeman doesn’t have the right “to respond in kind.”

As totalitarian as the Post’s editorial mindset seems to have become – a citizen can be pulverized by powerful interests, including Washington’s dominant newspaper, but he mustn’t dare defend himself or he will invite a new round of punishments – the Post's behavior is part of a long-term pattern.

The Plame-gate Offense

The Post’s war against Freeman was not an aberration. Indeed, it parallels a similar campaign against another former U.S. ambassador, Joseph Wilson, who dared step forward in the spring-summer of 2003 to challenge President Bush’s “twisting” of intelligence to justify the invasion of Iraq.

While Wilson’s complaint was directed at the Bush administration, his criticism also reflected negatively on the Post’s editors whose coverage of the run-up to the Iraq invasion had all the diversity of opinion – and tolerance of dissent – that one might have expected from Izvestia and Pravda in the old Soviet Union.

The Post editors stacked their influential editorial section with notorious neocons like Charles Krauthammer and Robert Kagan, along with other Iraq War enthusiasts such as David Ignatius, Jim Hoagland, Michael Kelly and Richard Cohen.

So, in September 2002, when former Vice President Al Gore objected to the rush to war, the Post let loose their columnists to distort and mock what Gore had said.

Kelly called Gore’s speech “dishonest, cheap, low” before labeling it “wretched. It was vile. It was contemptible.” Krauthammer added that the speech was “a series of cheap shots strung together without logic or coherence.” There was no countervailing opinion published. [For details, see our book, Neck Deep.]

After Secretary of State Colin Powell made his now-infamous presentation of the Iraq evidence to the United Nations on Feb. 5, 2003, the Post judged Powell’s WMD case as “irrefutable” and added: “it is hard to imagine how anyone could doubt that Iraq possesses weapons of mass destruction.” That judgment was reinforced by a solid phalanx of Post columnists, all hailing Powell’s speech.

The Post’s own editorials treated the Bush administration’s false allegations about Iraq’s stockpiles of WMD as indisputable fact and trashed even long-time American allies who dared disagree.

“The [Post] editorials during December [2002] and January [2003] numbered nine, and all were hawkish,” wrote Columbia University journalism professor Todd Gitlin. “This editorial mood continued into February, culminating in a blast at the French and Germans headlined ‘Standing With Saddam.’ Apparently it’s not only George W. Bush who doesn’t nuance.” [American Prospect, April 1, 2003]

After the U.S. “preemptive” invasion of Iraq and the failure to discover the imaginary WMD stockpiles, Post editorial-page editor Fred Hiatt was forced to make a rare and grudging apology. Hiatt acknowledged that the Post should have been more skeptical.

“If you look at the editorials we write running up [to the war], we state as flat fact that he [Hussein] has weapons of mass destruction,” Hiatt said in an interview with the Columbia Journalism Review. “If that’s not true, it would have been better not to say it.” [CJR, March/April 2004]

No Accountability

Yet, at the Post and many other U.S. news organizations, there was no sense that accountability was in order when news organizations joined a neoconservative stampede, even one that contributed to the deaths of thousands of American soldiers and hundreds of thousands of Iraqis.

Instead, Hiatt and his opinion pages continued to punish anyone – a politician or a citizen – who disagreed with the wisdom of Bush’s Iraq War.

One of the Post’s most troubling smear campaigns was directed against former Ambassador Wilson, who stepped forward in the months after the invasion as the first Washington Establishment figure to decry Bush’s exaggeration of the threat from Iraq.

The history of what happened to Wilson -- a scandal known as “Plame-gate” -- is now well documented: In 2003, an arrogant administration sought to damage a critic, Wilson, who had offended Vice President Dick Cheney by accusing the White House of having "twisted" Iraq War intelligence.

The Cheney-led counterattack against Wilson sought to portray him as a boastful liar and involved leaking to reporters that Wilson’s wife, Valerie Plame, worked at the CIA. That disclosure was published (in the Washington Post) by right-wing columnist Robert Novak, destroying Plame’s career as a covert intelligence officer and endangering the lives of her network of foreign agents.

Then, as the White House recognized the potential criminality – not to mention the political dangers – of its actions, a cover-up was launched, with Bush insisting that he knew nothing about the anti-Wilson campaign and his top aides lying to or dissembling in front of investigators.

One might have thought a newspaper upholding the Watergate legacy of Woodward and Bernstein would have jumped all over this disgraceful abuse of power by an imperial President and his vengeful entourage. Instead, the Washington Post went after Joe Wilson.

Hiatt and his editorial page cohorts made trashing Wilson and mocking the seriousness of Plame’s exposure almost a regular feature, recycling false White House talking points, including an attempt to question whether Plame was in fact “covert.”

The Post’s editorial page, which had swallowed Bush’s WMD lies hook, line and sinker in 2002-03, apparently couldn’t countenance someone who was right while so many super-smart Post editors and executives were wrong.

Endless Wilson Bashing

Even after Cheney’s former chief of staff, Lewis Libby, was convicted of perjury and obstruction of justice for his Plame-gate role in March 2007, Hiatt and his team were still bashing Wilson, declaring in one editorial that the ex-ambassador “will be remembered as a blowhard.”

In haughty tones – like the deprecating commentaries deriding former Ambassador Freeman – the Post wrote:

“Mr. Wilson was embraced by many because he was early in publicly charging that the Bush administration had ‘twisted,’ if not invented, facts in making the case for war against Iraq. He claimed to have debunked evidence that Iraq was seeking uranium from Niger; suggested that he had been dispatched by Mr. Cheney to look into the matter; and alleged that his report had circulated at the highest levels of the administration.

“A bipartisan investigation by the Senate intelligence committee subsequently established that all of these claims were false – and that Mr. Wilson was recommended for the Niger trip by Ms. Plame, his wife. When this fact, along with Ms. Plame’s name, was disclosed in a column by Robert D. Novak, Mr. Wilson advanced yet another sensational charge: that his wife was a covert CIA operative and that senior White House officials had orchestrated the leak of her name to destroy her career and thus punish Mr. Wilson. …

“The [Libby] trial has provided convincing evidence that there was no conspiracy to punish Mr. Wilson by leaking Ms. Plame’s identity – and no evidence that she was, in fact, covert.” [Washington Post, March 7, 2007]

But everything in this Post attack on Wilson was either a gross distortion or a lie, often parroting long-discredited White House talking points.

Wilson did debunk suspicions that Iraq was seeking uranium from Niger. He was dispatched by the CIA because of questions asked by Cheney. (Wilson never said Cheney personally sent him.) His information did reach the highest levels of the administration, explaining why the CIA kept trying to delete references to the Niger claims from Bush’s speeches.

The full Senate Intelligence Committee did not conclude that “all [Wilson’s] claims were false.” That assertion was rejected by the full committee and then inserted into “additional views” of three right-wing Republicans – Sens. Pat Roberts, Orrin Hatch and Christopher Bond – who carried the White House’s water in claiming that Wilson’s statements “had no basis in fact.”

As for the CIA selection of Wilson for the Niger trip, the Post editorial-page editors knew that Wilson was chosen by senior CIA officials in the office of counter-proliferation, not by Valerie Plame, who played only a minor introductory role in the agency’s recruitment of her husband.

The Post also knew that Wilson was well qualified for the assignment since he had served as a diplomat in the U.S. embassies in Iraq and Niger. He also took on this task pro bono, with the CIA only paying for his expenses.

Plus, Wilson was right again when he alleged that the White House was punishing him for his Iraq War criticism. Indeed, the Washington Post’s own reporters had described this reality in the news pages.

On Sept. 28, 2003, a Post news article reported that a White House official disclosed that the administration had informed at least six reporters about Plame and did so “purely and simply out of revenge” against Wilson.

“Plame-gate” special prosecutor Patrick Fitzgerald made the same point in a court filing in the Libby case, stating that his investigation had uncovered a “concerted” effort by the White House to “discredit, punish or seek revenge against” Wilson because of his criticism of the administration.

Hiatt and his editorial team could have looked up that fact. It was on the Post's front page. [Washington Post, April 9, 2006]

The Post’s ‘Covert’ Lie

Regarding Plame’s covert status, the Post editors were lying there, too.

In the March 7 editorial, they apparently were still hanging their hats on false statements by right-wing lawyer Victoria Toensing, who had made a small cottage industry out of her assertion that Plame failed to meet the definition of “covert” in the Intelligence Identities Protection Act of 1982, which Toensing said she had helped draft.

Toensing insisted that Plame was not “covert” because she had not been “stationed” abroad in the past five years, which Toensing claimed was the law’s standard.

For instance, on Feb. 18, 2007, as jurors were about to begin deliberations in the Libby case, the Post editors gave Toensing space on the front page of the Post’s influential Outlook section for a long article in which she insisted that Plame was not “covert” and published “indictments” of other figures in the scandal, including Wilson and Fitzgerald.

Toensing’s claim about Plame’s covert status was legalistic at best, since it obscured the larger point that Plame was working undercover in a classified CIA position and was running agents abroad whose safety would be put at risk by an unauthorized disclosure of Plame’s identity.

But Toensing wasn’t even right about the law. It doesn’t require that a CIA officer be “stationed” abroad in the preceding five years; it simply refers to an officer who “has served within the last five years outside the United States.”

That would cover someone who – while based in the United States – went abroad on official CIA business, as Plame said she had done, according to her sworn testimony at a March 16, 2007, congressional hearing.

At that hearing of the House Oversight Committee, Chairman Henry Waxman also read a statement that had been approved by CIA Director Michael Hayden. The statement described Plame’s status at the CIA as “covert,” “undercover” and “classified.”

“Ms. Wilson worked on the most sensitive and highly secretive matters handled by the CIA,” Waxman’s statement said, adding that her work dealt with “prevention of development and use of WMD against the United States.”

Toensing appeared as a Republican witness at the hearing and was asked about her bald assertion that “Plame was not covert.”

“Not under the law,” Toensing responded. “I’m giving you the legal interpretation under the law and I helped draft the law. The person is supposed to reside outside the United States.”

But that’s not what the law says, either. It says “served” abroad, not “reside.”

When asked whether she had spoken to the CIA or to Plame about Plame’s covert status, Toensing said, “I didn’t talk to Ms. Plame or the CIA. I can just tell you what’s required under the law. They can call anybody anything they want to do in the halls” of the CIA.

In other words, Toensing had no idea about the facts of the matter; she didn’t know how often Plame might have traveled abroad in the five years before her exposure; Toensing didn’t even get the language of the statute correct.

Nevertheless, Toensing was accepted as an expert by the Washington Post’s editors to issue “indictments” of people – like former Ambassador Wilson and special prosecutor Fitzgerald – who had gotten in the way of Bush’s imperial presidency. [For more on this topic, see’s “Shame on the Post’s Editorial Page,” “Smearing Joe Wilson Again” and “Shame on the WPost, Again.”]

A Sad Truth

The sad truth appears to be that the Washington Post can no longer be counted on to be anything like an honest broker, especially when it comes to issues near and dear to the hearts of neocons. Rather the Post’s role is now to set the parameters for whatever debate the neocons find acceptable.

A recent example of how the Post played this role was its decision to publish only pro-Israeli op-eds and editorials – sometimes two a day – during the first 11 days of the Gaza War, which killed more than 1,000 Palestinians including many children and other non-combatants.

On Jan. 2, for instance, neocon ideologue Krauthammer wrote: “Some geopolitical conflicts are morally complicated. The Israel-Gaza war is not. It possesses a moral clarity not only rare but excruciating.”

On the same day, Bush’s former speechwriter (now Post columnist) Michael Gerson added, “There is no question – none – that Israel’s attack on Hamas in Gaza is justified.”

So, as much of the world recoiled in horror at the ferocity of the Israeli attacks, the Post’s neocon-dominated opinion section only heaped blame on Hamas for its firing of small rockets into southern Israeli territory.

It took 12 days into Israel’s punishing assault on Gaza for the Washington Post to permit the first op-ed suggesting that there might be two sides to the dispute, an article by former President Jimmy Carter who presented both Israeli and Palestinian concerns.

In a column entitled “An Unnecessary War,” Carter noted that Israel had failed to live up to the goals of last year’s truce agreement. He also described the near-starvation of many of Gaza’s 1.5 million inhabitants, cut off from the outside world by an Israeli blockade.

While Carter’s column fit well within the mainstream of international opinion, it represented an anomaly in the opinion circles of Washington, appearing almost like a fringe viewpoint after a steady diet of neocon propaganda, especially in the Post’s editorial section.

Looking back over the Post’s recent history, I’m also reminded of my experience at the Post-owned Newsweek magazine in the late 1980s. I had been hired because of my early work exposing what became known as the Iran-Contra Affair. Newsweek – like the Post – had bought into the earlier false denials of the Reagan administration.

I thought maybe Newsweek sincerely wanted to catch up on possibly the most important scandal story of the decade. But I soon encountered what I considered troubling neocon trends at the magazine, particularly an elitist view about the need to steer the public in a direction favored by the Establishment, rather than to trust in the people’s well-informed democratic judgment.

When I spoke once with Washington bureau chief Evan Thomas about what I considered the importance of giving unvarnished information to the American people so they could make up their own minds, he upbraided me with an admonition that at Newsweek our purpose was less to inform the readers than to guide them to the proper conclusions.

Over the ensuing two decades, that elitist attitude, a core feature of neoconservative ideology, appears to have spread throughout the Washington Post company. It influences the tone of the news pages [see, for instance, “WPost Admits Bungling Obama Quote” or “Obama’s War with the Right (& Media)”], but it pervades the editorial section.

Rather than encouraging as free and open debate as possible, the Post now sees its role as herding the American people to certain preordained conclusions – and casting out from acceptable society anyone who dares threaten the Washington consensus.