Tuesday, April 21, 2009

Chrysler Turned Down Government Loan Over Limits on Executive Pay

Pay Rule Led Chrysler to Spurn Loan, Agency Says

Firm Claims It Didn't Need The Government Infusion

By David Cho, Peter Whoriskey and Amit R. Paley

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Top officials at Chrysler Financial turned away a government loan because executives didn't want to abide by new federal limits on pay, according to new findings by a federal watchdog agency.

The government had offered a $750 million loan earlier this month as part of its efforts to prop up the ailing auto industry, including Chrysler, which is racing to avoid bankruptcy. Chrysler Financial is a major lender to Chrysler dealerships and customers.

In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burden on the already fragile automaker and its financing company.

Chrysler Financial officials denied in a statement that the company's executives had refused to accept new limits on their pay, adding that the firm turned down the loan because it no longer needed it. But their account conflicts with a report set to be released today by the Treasury's special inspector general for the federal bailout, saying the executives' refusal led Treasury to withdraw the loan offer.

"It was certainly a deal-breaker from Treasury's perspective," said Neil M. Barofsky, the special inspector general, who spoke to the bailout program's chief compliance officer about the situation last week.

The incident is the latest controversy to illustrate the hazards confronting the Obama administration as it sets out to assist private firms.

The uproar over the federal financial rescue, much of it focused on executive pay at bailed-out firms, has made companies skittish about taking government aid. Several big banks, such as J.P. Morgan ChaseGoldman Sachs, have said the bailout money now carries a stigma and have taken steps to pay it back. A program to aid small-business lenders has been stymied by the firms' reluctance to accept pay limits and other requirements of bailout loans. and

Government officials have said that unless financial firms have enough resources to lend liberally to consumers, the economy cannot be revived.

The Treasury Department previously lent Chrysler Financial $1.5 billion, when less stringent requirements on executive compensation were in place for recipients of federal bailout money. But since that first loan was announced on Jan. 16, the Obama administration and Congress have toughened the rules.

During March, when it seemed that the first loan would run out, the Obama administration began working on a deal to lend the company an additional $750 million.

It did not take long for most of the agreement to fall in place. But on April 7, the Treasury asked Chrysler Financial to have its top 25 executives sign waivers regarding their compensation, according to the special inspector general's report.

Those waivers would have barred the executives from suing the Treasury or Chrysler Financial over new pay restrictions. As part of the economic stimulus package, Congress approved compensation limits, and the Treasury is working on clarifying what the firms must do to comply with the rules.

In other words, the executives were asked to sign the waivers without knowing what specific limits the Treasury might set.

Within a week, Chrysler Financial responded that "it was unable to obtain waivers from all 25 executives," the report said. By last week, the report added, "the request for additional funding was denied."

Chrysler Financial denied that its executives balked at new pay limits and said the firm had met all the restrictions of its first loan from the government's Troubled Assets Relief Program, or TARP.

"Executives have not been presented with any new demands with regard to executive compensation," the company said in a statement. "As a TARP recipient we remain in full compliance with current executive compensation requirements."

A senior industry official with knowledge of the matter said Chrysler Financial passed up the new government loan because, with auto sales down in April, there has been even less need for financing. The official said that if sales pick up, Chrysler Financial may seek additional government aid, even if it means agreeing to executive-compensation limits.

"If Chrysler Financial needs the cash to support Chrysler, they [the executives] are not going to put the auto company at risk," said the senior industry official, who spoke on condition of anonymity because the negotiations were private. "These guys aren't going to blow up the car company for their personal reasons. . . . They've done everything they can to support the automotive company."

Chrysler Financial recently announced publicly that it no longer needs additional federal loans. Instead, the company said, it will rely on other sources of financing.

"Chrysler Financial has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such no additional TARP funding is necessary at this time," the company said in a statement.

But by forgoing the government loan, the company had to tap loans from a group of private banks, including J.P. Morgan and Citigroup, that charged more for the money than the government would have, sources said. That line of financing had been arranged in August, when the company was struggling to stay afloat, according to an industry official.

Chrysler and Chrysler Financial are separate companies. But both are owned largely by Cerberus, a private-equity firm. The German automaker Daimler owns a 20 percent stake in each.

Treasury officials declined to comment on the matter but released a statement that said the department's auto task force would "monitor closely the financing situations for both GM and Chrysler."

"This is an issue that Chrysler and its stakeholders will need to address as part of this process and any potential deal," the statement said.

Obama's Real Plan in Latin America

Obama's Real Plan in Latin America

by Shamus Cooke

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At first glance Obama seems to have softened U.S. policy toward Latin America, especially when compared to his predecessor. There has been no shortage of editorials praising Obama’s conciliatory approach while comparing it to FDR’s ”Good Neighbor” Latin American policy.

It’s important to remember, however, that FDR’s vision of being neighborly meant that the U.S. would merely stop direct military interventions in Latin America, while reserving the right to create and prop up dictators, arm and train unpopular regional militaries, promote economic dominance through free trade and bank loans, conspire with right-wing groups, etc…

And although Obama’s policy towards Latin America has a similar subversive feeling to it, many of FDR’s methods of dominance are closed to him. Decades of U.S. “good neighbor” policy in Latin America resulted in a continuous string of U.S. backed military coups, broken-debtor economies, and consequently, a hemisphere-wide revolt.

Many of the heads of states that Obama mingled with at the Summit of the Americas came to power because of social movements born out of opposition to U.S. foreign policy. The utter hatred of U.S. dominance in the region is so intense that any attempt by Obama to reassert U.S. authority would result in a backlash, and Obama knows it.

Bush had to learn this the hard way, when his pathetic attempt to tame the region led to a humiliation at the 2005 Summit, where for the first time Latin American countries defeated yet another U.S. attempt to use the Organization of American States (O.A.S.), as a tool for U.S. foreign policy.

But while Obama humbly discussed hemispheric issues on an “equal footing” with his Latin American counterparts at the recent Summit of Americas, he has subtly signaled that U.S. foreign policy will be business as usual.

The least subtle sign that Obama is toeing the line of previous U.S. governments — both Republican and Democrat — is his stance on Cuba. Obama has postured as being a progressive when it comes to Cuba by relaxing some travel and financial restrictions, while leaving the much more important issue, the economic embargo, firmly in place.

When it comes to the embargo, the U.S. is completely unpopular and isolated in the hemisphere. The U.S. two-party system, however, just can’t let the matter go.

The purpose of the embargo is not to pressure Cuba into being more democratic: this lie can be easily refuted by the numerous dictators the U.S. has supported in the hemisphere, not to mention dictators the U.S. is currently propping up all over the Middle East and elsewhere.

The real purpose behind the embargo is what Cuba represents. To the entire hemisphere, Cuba remains a solid source of pride. Defeating the U.S. Bay of Pigs invasion while remaining fiercely independent in a region dominated by U.S. corporations and past government interventions has made Cuba an inspiration to millions of Latin Americans. This profound break from U.S. dominance — in its “own backyard” no less — is not so easily forgiven.

There is also a deeper reason for not removing the embargo. The foundation of the Cuban economy is arranged in such a way that it threatens the most basic philosophic principle shared by the two-party system: the market economy (capitalism).

And although the “fight against communism” may seem like a dusty relic from the cold war era, the current crisis of world capitalism is again posing the question: is there another way to organize society?

Even with Cuba’s immense lack of resources and technology (further aggravated by the U.S. embargo), the achievements made in healthcare, education, and other fields are enough to convince many in the region that there are aspects of the Cuban economy — most notably the concept of producing to meet the needs of all Cubans and NOT for private profit — worth repeating.

Hugo Chavez has been the Latin American leader most inspired by the Cuban economy. Chavez has made important steps toward breaking from the capitalist economic model and has insisted that socialism is “the way forward” — and much of the hemisphere agrees.

This is the sole reason that Obama continues the Bush-era hostility towards Chavez. Obama, it is true, has been less blunt about his feelings towards Chavez, though he has publicly stated that Chavez “exports terrorism” and is an “obstacle to progress.” Both accusations are, at best, petty lies. Chavez drew the correct conclusion of the comments by saying:

“He [Obama] said I'm an obstacle for progress in Latin America; therefore, it must be removed, this obstacle, right?”

It’s important to point out that, while Obama was “listening and learning” at the Summit of Americas, the man he appointed to coordinate the summit, Jeffrey Davidow, was busily spewing anti-Venezuelan venom in the media.

This disinformation is necessary because of the “threat” that Chavez represents. The threat here is against U.S. corporations in Venezuela, who feel, correctly, that they are in danger of being taken over by the Venezuelan government, to be used for social needs in the country instead of private profit. Obama, like his predecessor, believes that such an act would be against “U.S. strategic interests,” thus linking the private profit of mega-corporations acting in a foreign country to the general interests of the United States.

In fact, this belief that the U.S. government must protect and promote U.S. corporations acting abroad is the cornerstone of U.S. foreign policy, not only in Latin America, but the world.

Prior to the revolutionary upsurges that shook off U.S. puppet governments in the region, Latin America was used exclusively by U.S. corporations to extract raw materials at rock bottom prices, using cheap labor to reap super profits, while the entire region was dominated by U.S. banks.

Things have since changed dramatically. Latin American countries have taken over industries that were privatized by U.S. corporations, while both Chinese and European companies have been given the green light to invest to an extent that U.S. corporations are being pushed aside.

To Obama and the rest of the two-party system, this is unacceptable. The need to reassert U.S. corporate control in the hemisphere is high on the list of Obama’s priorities, but he’s going about it in a strategic way, following the path paved by Bush.

After realizing that the U.S. was unable to control the region by more forceful methods (especially because of two losing wars in the Middle East), Bush wisely chose to fall back a distance and fortify his position. The lone footholds available to Bush in Latin America were, unsurprisingly, the only two far-right governments in the region: Colombia and Mexico.

Bush sought to strengthen U.S. influence in both governments by implementing Plan Colombia first, and the Meridia Initiative second (also known as Plan Mexico). Both programs allow for huge sums of U.S. taxpayer dollars to be funneled to these unpopular governments for the purpose of bolstering their military and police, organizations that in both countries have atrocious human rights records.

In effect, the diplomatic relationship with these strong U.S. “allies” — coupled with the financial and military aide, acts to prop up both governments, which possibly would have fallen otherwise (Bush was quick to recognize Mexico’s new President, Calderon, despite evidence of large-scale voter fraud). Both relationships were legitimized by the typical rhetoric: the U.S. was helping Colombia and Mexico fight against “narco-terrorists.”

The full implication of these relationships was revealed when, on March 1st 2008, the Colombian military bombed a FARC base in Ecuador without warning (the U.S. and Colombia view the FARC as a terrorist organization). The Latin American countries organized in the “Rio Group” denounced the raid, and the region became instantly destabilized (both Bush and Obama supported the bombing).

The conclusion that many in the region have drawn — most notably Chavez — is that the U.S. is using Colombia and Mexico as a counterbalance to the loss of influence in the region. By building powerful armies in both countries, the potential to intervene in the affairs of other countries in the region is greatly enhanced.

Obama has been quick to put his political weight firmly behind Colombia and Mexico. While singing the praises of Plan Colombia, Obama made a special trip to Mexico before the Summit of the Americas to strengthen his alliance with Felipe Calderon, promising more U.S. assistance in Mexico’s “drug war.”

What these actions make clear is that Obama is continuing the age old game of U.S. imperialism in Latin America, though less directly than previous administrations. Obama’s attempt at “good neighbor” politics in the region will inevitably be restricted by the nagging demands of “U.S. strategic interests,” i.e., the demands of U.S. corporations to dominate the markets, cheap labor, and raw materials of Latin America. And while it is one thing to smile for the camera and shake the hands of Latin American leaders at the Summit of the Americas, U.S. corporations will demand that Obama be pro-active in helping them reassert themselves in the region, requiring all the intrigue and maneuvering of the past.

General Motors accelerates job cuts as bankruptcy deadline approaches

General Motors accelerates job cuts as bankruptcy deadline approaches

By Jerry White

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General Motors has begun to implement its plans to slash tens of thousands of jobs before the June 1 deadline the Obama administration has imposed for the company to drastically reduce its size and labor costs or face bankruptcy. The job cuts took place as GM’s CEO Fritz Henderson told reporters that a government-supervised bankruptcy—which would lead to the abrogation of labor contracts and the carve-up of the century-old industrial giant—was now looking “more probable.”

Meanwhile, Chrysler LLC is continuing to demand sweeping wage and benefit concessions from auto workers in the US and Canada, facing an April 30 deadline from the White House to wrench such concessions and conclude a merger with Italian automaker Fiat. If this deal is not completed, the company will face the revoking of federal loans and a bankruptcy that would likely lead to liquidation.

In a letter to employees, Chrysler CEO Robert Nardelli said last week that more concessions from the United Auto Workers are needed. He added a threat to Canadian auto workers, saying, “Without labor concessions, Chrysler Canada’s manufacturing operations will not survive long-term. Thousands of good-paying jobs are in jeopardy, as well as the economic health of communities such as Windsor and Brampton.”

On Monday, GM told 1,600 salaried workers—mostly in southeastern Michigan—that they were losing their jobs. The cuts—centered at GM’s Renaissance Center headquarters in downtown Detroit, GM Tech Center in Warren, the Milford Proving Grounds, and offices in Pontiac and Grand Blanc, Michigan—are part of 3,400 white-collar jobs being cut in the US by the end of the year.

A GM spokesman told the Detroit News, “This is part of really restructuring the company to a smaller, leaner company, one that can, as the (Obama) administration requested, be profitable on an ongoing basis.” Last month, 7,631 hourly workers, including 4,100 in Michigan, accepted buyouts and left the company. Since 2006, GM has eliminated 60,500 hourly jobs through buyouts, or nearly half its hourly workforce.

In February, President Obama rejected as inadequate plans to close 14 of GM’s 47 plants in North America by 2012 and eliminate another 47,000 jobs worldwide, including 21,000 in the US, Canada and Mexico.

On Friday, Henderson said, “There will be further reductions in manpower ... that are going to affect communities and are going to affect plants and people—both on the hourly and the salaried side of the business.” The cuts would be implemented by June 1, he said.

The GM boss outlined a plan to eliminate several brands, including Hummer, Saturn and Swedish-based Saab and speed up shedding more than 1,700 dealers by 2012. In addition, Henderson said, GM was entertaining offers to spin off its Opel unit, which employs 55,000 workers in Germany and other European locations.

“We’re taking the watch apart and putting it back together. We’re looking at every aspect of our business,” he said, adding that GM was following the Obama administration’s dictates to “go faster and go deeper.” The company’s new restructuring plans, he said, would “allow us to be successful even in a tougher climate.”

In February, Obama’s auto task force—which is made up chiefly of private equity investors and other Wall Street insiders—said GM would only be considered “viable” if it guaranteed an “adequate return on capital” under all conditions, including a severe economic downturn. This could only be achieved by reducing the workforce to poverty wages.

It is widely reported that the auto task force favors a so-called “363 sale”—named after Section 363 of the Bankruptcy Code—which would allow a judge to set up a “new” GM, made up of the most profitable assets that could quickly be sold to private investors. The undesirable assets, including “underperforming” brands and factories, and tens of billions in health care and pension obligations owed to GM retirees, would be left to languish in the bankruptcy courts for years before finally being wound down.

The Detroit News reported that the auto task force was preparing to loan GM another $5 billion in short term aid to continue operations through this quarter. Meanwhile, intense negotiations are taking place behind the scenes with the White House pressing major bondholders and the United Auto Workers to accept sharply reduced debt payments from GM in exchange for equity shares in the current company, or a “new” GM.

Although bondholders are unable to unload their debt for anything more than 15-16 cents on the dollar on the market, they are steadfastly opposing demands by the White House for a two-thirds reduction in the $27 billion in unsecured debt GM owes them.

According to New York Times business columnist Andrew Ross Sorkin, “About 80 percent of the bonds are held by large investors and hedge funds, many of which play in distressed debt markets” and “would less politely be called ‘vultures.’” These included Capital Research & Management; Loomis, Sayles; and the Pacific Investment Management Company. “Indeed, GM bonds have been changing hands rapidly, suggesting that some hedge funds have been plowing into them, gambling that these investments soon will be worth even more,” Sorkin said.

The big investors are demanding even greater concessions from the UAW and have threatened to drive the company into bankruptcy, where they believe they could get a better deal from a judge, who would place the bulk of concessions on the workers. Moreover, given the record of the Obama administration in bailing out big bondholders, they no doubt believe they can hold out for more.

The UAW has already accepted further drastic reductions in the wages, benefits and working conditions of their members. This is in line with the union bureaucracy’s long record of betrayals, which culminated in the 2007 contracts that reduced the wages of newly hired auto workers to $14 an hour while freeing the auto companies of their obligations to pay health care benefits to more than a million retirees and their dependents. In exchange, the auto companies set up a multi-billion dollar retiree health care trust fund, from which the union bureaucracy believed it could derive a steady stream of investment income.

The White House is demanding that the UAW accept more than half of the $20 billion owed to its trust fund in virtually worthless shares. After remaining silent for more than three weeks, the UAW sent a public letter to Congress objecting to the bondholders’ demands.

“The UAW believes the retirees, surviving spouses and their dependents should not be required to make sacrifices beyond those called for” in the December loan agreements, the UAW wrote. The union also called on its members to write President Obama to “Tell him to insist that workers and retirees must be treated in a fair and equitable manner in any restructuring plans!”

The UAW bureaucracy has no concern over the fate of the members it supposedly represents. Faced with demands from the bondholders that it accept even greater reductions, however, the union officials—who are being advised by Wall Street investment firm Lazard—are battling to secure the best deal for themselves from the carve-up of the industry.

Last week, sources inside of the negotiations told the Detroit Free Press that the Obama administration was indicating that the UAW would be given a significant “ownership stake” in a “new” GM after bankruptcy, in exchange for concessions, including accepting a reduction in the payments to the trust fund.

The treachery of the UAW is generating increasing opposition from rank-and-file workers. A young worker at a GM plant in Pontiac, Michigan, told the WSWS, “The union has its own set of goals. No one is looking out for the workers.

“The UAW is a joke. They made us sign an agreement in which we lost our cost-of-living and new hires are forced to work for $14 an hour, next to a guy working for $28 an hour. The contract doesn’t mean a thing because in the fine print it says anything can be changed at the discretion of management.

“The union said we had to vote for this because they would shut our plant if we didn’t. Well, regardless, they are still shutting our plants. Then they have us sign a ‘house agreement’ that gives up even more concessions.

“There are guys here who were hired in 2004. They worked until they got the top rate of $28 an hour and then got laid off. They were rehired under the 2007 agreement that cut their wages in half. They top off at $18 an hour and have virtually no benefits. The company gave them a $600 debit card to pay for medical coverage and it takes five years before they get optical care and three for dental. One guy I know said his 401(k) lost 40 percent of its value.”

The worker added: “They want to hire nothing but temporary workers who have no job security and the union is going along with it. The workers here have no allegiance to the UAW.”

Obama reassures CIA no prosecutions planned

Obama reassures CIA no prosecutions planned

Revelations that two prisoners were waterboarded 266 times

By Tom Eley

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Yesterday President Barack Obama made his first trip to visit CIA headquarters in Langley, Virginia. The visit was described as an effort to “boost morale” at the top US spy agency in the wake of revelations that it has carried out brutal and systematic torture for years, opening up its agents to prosecution as war criminals.

But the trip was roundly interpreted as a means of mollifying anger in the intelligence apparatus over the release of Justice Department memos detailing the Bush administration’s torture program. Four former CIA heads had criticized the move, with one, Michael Hayden, suggesting on a Sunday news program that the revelations would hamper the US in “the war on terror.”

Before addressing agency employees, Obama held a private meeting with CIA Director Leon Panetta and about 50 agents, assuring them once again that there will be no prosecutions or investigations directed at CIA officials.

Obama later referred obliquely to conflict in this private meeting, noting, “some conversations that I’ve had with senior folks here at Langley in which I think people have expressed understandable anxiety and concern” over the memos’ release.

In his public address, Obama all but apologized to the assembled agents for releasing the memos. “I acted primarily because of the exceptional circumstances that surrounded these memos, particularly the fact that so much of the information was public,” he said, “The covert nature of the information had been compromised.”

Obama reiterated in strong terms that not only will his administration not investigate torture, it will protect the agents who carried it out. “We will protect your identities and your security as you vigorously pursue your missions,” he said.

“I understand that it’s hard when you are asked to protect the American people against people who have no scruples, and would willingly and gladly kill innocents,” Obama continued. “Al-Qaida’s not constrained by a constitution. Many of our adversaries are not constrained by a belief in freedom of speech or representation in court or rule of law.”

These comments would aptly fit the US military and spy apparatus, which has carried out grave violations of basic human rights that have led to the deaths of hundreds of thousands of civilians in Iraq, Afghanistan and Pakistan.

Indeed, by declaring that he will not investigate or prosecute those who have carried out torture, Obama is himself flaunting the “rule of law,” both domestic and international.

Bush White House, CIA, supervised torture of Abu Zubaydah

The hypocrisy and cowardice of Obama’s pandering before the CIA is underscored by further revelations from the recently released Justice Department torture memos and a New York Times article on the torture of one prisoner, Abu Zubaydah.

Central Intelligence Agency (CIA) agents used waterboarding scores of times on two men in the span of one month, according to the 2005 Office of Legal Counsel (OLC) memo released on Thursday. Zubaydah was waterboarded 83 times in August 2002. Khalid Shaikh Mohammed was waterboarded 183 times in March 2003.

The OLC memos leave no doubt that the torture of Zubaydah was coordinated at least from CIA headquarters in Langley, Virginia. This was corroborated by a New York Times article published on Saturday, based on interviews with anonymous former intelligence agents.

Both the memo and the anonymous agents’ testimony confirm that the torture of Zubaydah preceded the drafting of earliest of the recently released memos, which was signed in 2003.

The Times article also reveals that the CIA’s initial estimate of Zubaydah as a top “lieutenant” of Osama bin Laden was “based on a highly inflated assessment of his importance.”

According to the agents, Zubaydah’s treatment was closely overseen by “CIA headquarters,” which worked in close collaboration with the Justice Department lawyers John C. Yoo and Jay Bybee, both of whom participated in the drafting of the torture memos.

One of the Justice Department memos closely substantiates the agents’ testimony, pointing out that the waterboarding of Zubaydah was initiated “at the direction of CIA headquarters,” and top officials “watch[ed] the last waterboard session.”

The CIA’s application of waterboarding is little changed from its use during the Spanish Inquisition in the 15th and 16th centuries. It consists of immobilizing the victim on an inclined stretcher. CIA torturers then place a cloth over the victim’s mouth and nose, and proceed to pour water over the cloth. This induces suffocation and the sensation of drowning. In a modern twist, CIA medical personnel stand by to monitor the oxygen level in the victim’s blood, in order to keep the prisoner alive so that the waterboarding process can be repeated.

There is strong evidence that the torture was closely overseen from the White House by the National Security Principals Committee, which consisted of Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, National Security Advisor Condoleezza Rice, CIA Director George Tenet and Attorney General John Ashcroft.

The Principal’s Committee met in 2002 and 2003, approving the methods of torture enacted on Zubaydah, according to an ABC NewsABC News report from April 2008. Citing anonymous sources, reported, “The high-level discussions about these ‘enhanced interrogation techniques’ were so detailed...some of these interrogation sessions were almost choreographed—down to the number of times CIA agents could use a specific tactic.” Among the methods discussed and approved was waterboarding.

According to an Associated Press article, also published last April, “CIA officers would demonstrate some of the tactics, or at least detail how they worked, to make sure the small group of ‘principals’ fully understood what the al-Qaida detainees would undergo.” (See “Top Bush aides directed torture from the White House”).

In December 2007, the Bush administration admitted that the CIA had destroyed videotapes depicting the interrogation of Zubaydah. Later it was revealed that nearly 100 video recordings of taped interrogations—potential evidence in any future criminal prosecution—were destroyed.

According to Saturday’s Times article, CIA agents in the field—Zubaydah was tortured at a black site in Thailand—had informed the agency that they believed that Zubaydah’s usefulness had been exhausted, and that torture should cease. This was overruled by Washington.

The agent’s testimony to the Times on the superfluous nature of the torture is also confirmed by a footnote in the torture memos, which stated that the continued waterboarding of Zubaydah had been “unnecessary.” The memo states, “although the on-scene interrogation team judged Zubaydah to be compliant, elements within CIA headquarters still believed he was withholding information.”

In addition to the forms of torture outlined in the Justice Department memo, the agents told the Times that Zubaydah was “kept awake night and day with blasting rock music [and had] his clothes removed and...his cell cold.”

One agent said that though Zubaydah “pleaded for his life...he had no more information to give.” Another described the man’s torture as the “depths of human misery and degradation.”

Zubaydah’s and Shaikh Mohammed’s own testimony on their experiences has been revealed by a recently released International Committee of the Red Cross report on CIA treatment of “high value detainees.”

Zubaydah described his waterboarding in the following manner:

I was then dragged from the small box, unable to walk properly and put on what looked like a hospital bed, and strapped down very tightly with belts. A black cloth was then placed over my face and the interrogators used a mineral water bottle to pour water on the cloth so that I could not breathe. After a few minutes the cloth was removed and the bed was rotated into an upright position. The pressure of the straps on my wounds was very painful. I vomited. The bed was then again lowered to a horizontal position and the same torture carried out again with the black cloth over my face and water poured on from a bottle. On this occasion my head was in a more backward, downwards position and the water was poured on for a longer time. I struggled against the straps, trying to breathe, but it was hopeless. I thought I was going to die. I lost control of my urine. Since then I still lose control of my urine when under stress. I was then placed again in the tall box....

A central reason President Obama wishes to avoid investigations of the CIA perpetrators of torture is that this would quickly draw in for questioning and prosecution top-ranking Bush administration officials. Such an investigation would also expose top Democrats, including Nancy Pelosi, who was briefed and given a presentation of CIA interrogation methods as early as 2002.

In other words, further investigation of torture poses the threat of a full-blown crisis of the American state.

Far from launching prosecutions against torture—as he is obligated to do under US law and international treaties— Obama has redoubled his efforts to reassure intelligence operatives that he will protect them against investigation.

Obama’s adviser in Trinidad: the real face of ‘change’

Obama’s adviser in Trinidad: the real face of “change”

By Bill Van Auken

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One telling measure of the real nature of the “change” that Obama is bringing to US-Latin American relations is the selection of his chief adviser for the Trinidad summit, Jeffrey Davidow.

A career foreign service officer, Davidow was assigned in 1971 to the US embassy in Chile as a political officer, a post often occupied by covert CIA agents. He remained in the country until 1974. This covered the period of the preparation of the US-backed military coup against the elected government of President Salvador Allende in September 1973 and the consolidation of General Augusto Pinochet’s junta through bloody political repression.

US documents declassified when Pinochet faced the threat of a trial in Spain beginning in 1998, included memos from Davidow to the military regime warning against a “conspiracy on the part of the enemies of Chile to paint the junta in the worst possible terms.” The memo preceded a campaign by the junta to murder such “enemies,” including the 1976 Washington DC car-bombing that claimed the life of Orlando Letelier, a former senior minister in the Allende government.

Another memo assured the junta that “the government of the United States of course recognizes the internal security problems that are confronting Chile.” The document, apparently memorializing a meeting Davidow attended with junta leaders, was written as tens of thousands of Chileans were being killed and tortured in detention camps.

According to the magazine Milenio, published in Mexico where Davidow was the US ambassador in the late 1990s, he was intimately involved as the political officer in Chile in the US government’s handling of the “disappearance” of 31-year-old Charles Horman, an American journalist who was shot to death in the Santiago soccer stadium in the aftermath of the 1973 coup. This tragic episode was dramatized in the Costa Gavras film Missing.

A State Department document issued three years after this murder cited “circumstantial evidence” that US intelligence provided the Chilean military with information about Horman, who sympathized with the Allende government, assuring his summary execution.

From Chile, Davidow was sent to South Africa, filling the same post as “political officer” from 1974 to 1976. These were the years in which the CIA, in league with the apartheid regime, organized a covert operation against newly independent Angola, unleashing a civil war that claimed some half million lives.

Davidow went on to become the chief State Department official on the Americas under the Clinton administration, playing a major role in the development of the Plan Colombia, the US-funded counterinsurgency operation that has killed thousands of Colombia’s poor while driving an estimated 2.5 million people from their homes.

Obama, in his opening speech, proclaimed that the US and Latin America “can’t be trapped” by history, suggesting that the slate can be wiped clean. The presence of a figure like Davidow as his chief adviser, however, demonstrates that this history is very much alive, and that behind the public relations mask provided by Obama, Washington is preparing new crimes against the peoples of Latin America.

Americas Summit ends with no agreement on economic crisis

Americas Summit ends with no agreement on economic crisis

By Bill Van Auken

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The Americas Summit that concluded in Trinidad and Tobago on Sunday has been hailed by most of the media as another “success” for US President Barack Obama.

The New York Times was typical, breathlessly beginning its report on the summit, “Leaders from the Western Hemisphere, inspired by a new American president, closed a two-day summit meeting proclaiming a new dawn for relations in the region, which had been marked by bitter disagreements in recent years with the United States.”

Much of the reporting has been focused on the handshakes between Obama and his Venezuelan counterpart, Hugo Chavez, portrayed by some as a sign of the American president’s post-ideological pragmatism, while condemned by the Republican right as an irresponsible bowing to an enemy.

One would hardly guess from these accounts that the summit ended with only its host, Trinidad’s prime minister, Patrick Manning, signing the final statement, after several countries objected because it failed to mention Cuba and, having been drafted last September, did not even address the global economic meltdown. Without any consensus, the rest of the members of the Organization of American States followed suit, failing to sign the document.

This was not merely a question of an inadequate document. The summit ended with no substantive agreements or any real proposals for confronting the economic catastrophe that is sweeping through the Americas.

This is a stunning indictment of the summit as well as of the governments participating in it, first and foremost that of Obama. The Latin American nations are themselves deeply divided and unable to develop genuine economic integration as the crisis exacerbates conflicts between the continent’s various nation states.

The crisis in Latin America threatens to throw another 15 million people into poverty this year, as plunging commodity prices, shrinking markets and the credit crunch are projected by the United Nations to contract the region’s economies by 0.3 percent in 2009.

For his part, Obama came empty-handed. The sole new initiative he announced was a $100 million “micro finance” program to help small entrepreneurs—less than a drop in the bucket. He further pointed to measures announced at the G20 summit in London earlier this month, which for the most part were illusory, representing steps previously taken or proposals without funding.

There was no promise of significant US aid to the Latin American economies. Instead, Obama presented his economic stimulus policy in the US as a boon to the region because of the supposed prospect that it will spur consumer spending, allowing other countries to increase exports to the US market.

Obama also pointed to the decision to triple the International Monetary Fund’s overall lending capacity. In reality, the lion’s share of these funds are to go to the US and Europe, while IMF “aid” to Latin America will take the traditional form of punishing terms that result in the further impoverishment of working people.

While Obama claimed that Washington was urging the Inter-American Development Bank to increase loans to Latin America and the Caribbean, US Treasury Secretary Timothy Geithner refused to commit any new funding for the bank when he attended its annual meeting in Colombia last month.

The principal role played by the American president was to attempt a repackaging of US policy in the region, presenting his government as a radical departure from the confrontational posture of the Bush administration. He stressed that the United States was at the summit “to listen and not just talk” and to forge a new relationship between the US and the countries to its south based upon “mutual respect and equality.”

The reality is that in hemispheric relations, as with virtually all of the Obama administration’s policies, what is involved is an attempt by the US political establishment to put a new face on what are essentially the same right-wing policies pursued under Bush.

In his addresses to the summit, Obama stressed his skin color as the proof and embodiment of the supposed change in Washington. Given that his government has acted in its first three months as an unswerving instrument of Wall Street and the national security apparatus, bailing out banks while continuing the occupation of Iraq and escalating the war in Afghanistan, it was significant that some of the supposedly left leaders of Latin America embraced these claims.

Chavez’s “new era of reasoning”

None was more fawning than the advocate of Bolivarian Revolution and 21st Century Socialism, Venezuela’s Hugo Chavez.

“I want to be your friend,” Chavez told the American president before the summit’s first plenary session last Friday. Afterwards he told journalists that his handshake with Obama was “a good moment.” He added, “He is a very intelligent man, young and he is black. He is an experienced politician in spite of his young age.”

Chavez declared that the summit, which produced neither a document nor any new policies, was “the most successful” he had ever attended. It “has opened the gates to a new era of reasoning between our countries,” he said.

In perhaps the most ludicrous moment, Chavez handed Obama a copy of The Open Veins of Latin America, the book written in 1971by Uruguayan author Eduardo Galeano with a personal inscription, “For Obama with affection.” Did Chavez believe that if Obama read this historical account of the exploitative economic relations that the US developed with Latin America over centuries, the American president would “see the light” and cause Yankee imperialism to change its spots?

Whatever the illusions of left nationalist leaders like Chavez, there are undoubtedly more profound objective forces pushing them to embrace Obama. The world economic crisis has severely undermined their economies and threatens to unleash a new upsurge of class struggle that will challenge their regimes as well. While Chavez has attempted to secure new markets for Venezuelan oil in China and Japan, the US remains its principal customer, accounting for at least half of its oil exports.

Chavez took the decision on the spot to send a new ambassador to Washington—Roy Chaderton, Venezuela’s representative at the OAS—and to accept a US ambassador in Caracas. Diplomatic relations broke down last September when Venezuela expelled the US ambassador over American covert meddling in the country as well as in Bolivia.

Similarly, Nicaraguan President Daniel Ortega, after delivering a speech denouncing the history of US interventions in the region, told reporters that he thought Obama would be different. “I want to believe that he’s inclined, that he’s got the will,” he said.

Bolivia’s President Evo Morales took a somewhat more sober view of the Obama administration. “One hundred days have gone by and we in Bolivia have yet to feel any changes,” he said. “The policy of conspiracy continues.”

Responding to right-wing criticism at home, Obama made sure to condemn Chavez at the end of the summit for his “inflammatory rhetoric” and accused his government of having “interfered at times with some of the neighboring countries.”

While not on the agenda, one question that played a central role in the summit’s discussion was that of Cuba, which was expelled from the Organization of American States in 1962 on orders from Washington. Today, all heads of state present, save Obama, are in favor of its readmission and of the lifting of the economic blockade that the US has maintained against the island for 47 years.

On the eve of the summit, Obama announced an easing of certain elements of the economic embargo in an attempt to deflect opposition to the US policy towards Cuba. He lifted restrictions on Cuban-Americans traveling to Cuba and sending economic remittances to relatives on the island.

He also lifted the ban on US telecommunications companies establishing telephone service and satellite television and radio in Cuba.

These limited gestures received a remarkably positive response from the Cuban government. President Raul Castro said Friday that he was prepared to discuss “everything, everything, everything” with Washington. He specifically cited “democracy, freedom and human rights,” terms habitually used by the US government to promote regime change in Cuba.

This concession to Washington is indicative of the Cuban regime’s increasing economic crisis, resulting from the collapse of the price of nickel, its main export earner, increasing difficulty in obtaining credit and the impact of repeated hurricanes on the island. While Raul Castro had pledged after assuming the presidency from his ailing brother Fidel that he would initiate “material” progress for Cubans, recent months have seen cutbacks in social benefits and demands for increased productivity from Cuban workers.

Obama responded to Raul Castro’s remarks by demanding “further steps.” In particular, he called for the release of political prisoners in Cuba—many of them oppositionists sponsored and funded by Washington—and a reduction in government fees levied on remittances sent from the US.

The second demand is significant. Undoubtedly the decision to lift restrictions on remittances is not merely a humanitarian gesture, but rather part of a political strategy. The flow of dollars into the country will serve to widen social inequality and, the US hopes, create a new layer of small businessmen to serve as a social base for the re-imposition of US domination. To the extent that the government takes 20 percent of this money and redistributes it, US aims are undermined.

Obama stressed at a press conference in Trinidad that “the policy that we’ve had in place for 50 years hasn’t worked ... the Cuban people are not free.” The implication of this remark is that the influx of hundreds of millions of dollars of US capital, seeking to reap super profits off a workforce that earns on average less than $20 a month, and the flow of American commodities into Cuba will prove a far more efficient means of toppling the Castro regime than the economic embargo and CIA conspiracies.

Fortune 500: Exxon Mobil back on top

Fortune 500: Exxon Mobil back on top

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Displaced as Corporate Enemy No. 1 -- thank you, Wall Street bankers! -- Exxon Mobil regains the Fortune 500's No. 1 slot this year, despite the sharp fall in oil prices. Indeed, if the fourth quarter of 2008 demonstrates anything, it's that Exxon Mobil is perfectly capable of making billions of dollars even with oil at $50 a barrel or less.Two pressing questions for shareholders: Will Congress pass a cap-and-trade law that would crush oil profits? And should Exxon Mobil use its $31 billion cash pile to buy up smaller rivals with sunken stocks but attractive oil and gas reserves?

'Superweed' explosion threatens Monsanto heartlands

‘Superweed’ explosion threatens Monsanto heartlands

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“Superweeds” are plaguing high-tech Monsanto crops in southern US states, driving farmers to use more herbicides, return to conventional crops or even abandon their farms.

The gospel of high-tech genetically modified (GM) crops is not sounding quite so sweet in the land of the converted. A new pest, the evil pigweed, is hitting headlines and chomping its way across Sun Belt states, threatening to transform cotton and soybean plots into weed battlefields.

In late 2004, “superweeds” that resisted Monsanto’s iconic “Roundup” herbicide, popped up in GM crops in the county of Macon, Georgia. Monsanto, the US multinational biotech corporation, is the world’s leading producer of Roundup, as well as genetically engineered seeds. Company figures show that nine out of 10 US farmers produce Roundup Ready seeds for their soybean crops.

Superweeds have since alarmingly appeared in other parts of Georgia, as well as South Carolina, North Carolina, Arkansas, Tennessee, Kentucky and Missouri, according to media reports. Roundup contains the active ingredient glyphosate, which is the most used herbicide in the USA.

How has this happened? Farmers over-relied on Monsanto’s revolutionary and controversial combination of a single “round up” herbicide and a high-tech seed with a built-in resistance to glyphosate, scientists say.

Today, 100,000 acres in Georgia are severely infested with pigweed and 29 counties have now confirmed resistance to glyphosate, according to weed specialist Stanley Culpepper from the University of Georgia.

“Farmers are taking this threat very seriously. It took us two years to make them understand how serious it was. But once they understood, they started taking a very aggressive approach to the weed,” Culpepper told FRANCE 24.

“Just to illustrate how aggressive we are, last year we hand-weeded 45% of our severely infested fields,” said Culpepper, adding that the fight involved “spending a lot of money.”

In 2007, 10,000 acres of land were abandoned in Macon country, the epicentre of the superweed explosion, North Carolina State University’s Alan York told local media.

The perfect weed

Had Monsanto wanted to design a deadlier weed, they probably could not have done better. Resistant pigweed is the most feared superweed, alongside horseweed, ragweed and waterhemp.

“Palmer pigweed is the one pest you don’t want, it is so dominating,” says Culpepper. Pigweed can produce 10,000 seeds at a time, is drought-resistant, and has very diverse genetics. It can grow to three metres high and easily smother young cotton plants.

Today, farmers are struggling to find an effective herbicide they can safely use over cotton plants.

Controversial solutions

In an interview with FRANCE 24, Monsanto’s technical development manager, Rick Cole, said he believed superweeds were manageable. “The problem of weeds that have developed a resistance to Roundup crops is real and [Monsanto] doesn’t deny that, however the problem is manageable,” he said.

Cole encourages farmers to alternate crops and use different makes of herbicides.

Indeed, according to Monsanto press releases, company sales representatives are encouraging farmers to mix glyphosate and older herbicides such as 2,4-D, a herbicide which was banned in Sweden, Denmark and Norway over its links to cancer, reproductive harm and mental impairment. 2,4-D is also well-known for being a component of Agent Orange, a toxic herbicide which was used in chemical warfare in Vietnam in the 1960s.

FRANCE 24 report: French scientist Eric Seralini says research shows Roundup herbicide is highly toxic to human beings.

Questioned on the environmental impact and toxicity of such mixtures, Monsanto’s public affairs director, Janice Person, said that “they didn’t recommend any mixtures that were not approved by the EPA,” she said, referring to the US federal Environmental Protection Agency.

According to the UK-based Soil Association, which campaigns for and certifies organic food, Monsanto was well aware of the risk of superweeds as early as 2001 and took out a patent on mixtures of glyphosate and herbicide targeting glyphosate-resistant weeds.

“The patent will enable the company to profit from a problem that its products had created in the first place,” says a 2002 Soil Association report.

Returning to conventional crops

In the face of the weed explosion in cotton and soybean crops, some farmers are even considering moving back to non-GM seeds. “It’s good for us to go back, people have overdone the Roundup seeds,” Alan Rowland, a soybean seed producer based in Dudley, Missouri, told FRANCE 24. He used to sell 80% Monsanto “Roundup Ready” soybeans and now has gone back to traditional crops, in a market overwhelmingly dominated by Monsanto.

According to a number of agricultural specialists, farmers are considering moving back to conventional crops. But it’s all down to economics, they say. GM crops are becoming expensive, growers say.

While farmers and specialists are reluctant to blame Monsanto, Rowland says he’s started to “see people rebelling against the higher costs.”

Shortages of ammo and gun accessories cropping up nationwide

Brisk sales of ammo are leading to shortage in Texas, nationwide

By ANNA M. TINSLEY

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Most days are like Christmas for Glen Furtardo.

When he opens boxes sent to the Winchester Gallery gun store in east Fort Worth, he finds out what ammunition he’ll have to stock his shelves with that day as demand for weapons and ammo soars.

Reports of heavy sales at gun stores began around the time of Barack Obama’s election as president, and months later, dealers are facing ammo shortages nationwide.

"People are panicking and buying," said Furtardo, assistant manager. "The crime rate is high, and they are flat scared of what is going to happen in the next few years with the economy and the country. Manufacturers weren’t prepared for this."

Retailers and consumers say there may be several reasons gun stores are running out of ammunition — and the cost of what is available is rising.

There’s a widespread expectation that Obama’s administration will follow through on a campaign promise to reimpose an assault weapons ban. Some people fear that taxes on ammunition, guns and other firearms-related materials might drastically increase, as they have on cigarettes.

Administration officials and Democratic leaders in Congress began saying this month that while they hope to eventually change gun control policies, they will not push the assault weapons ban for now because they know how divisive that debate would be and they don’t want to distract from other goals.

The slumping economy — and the angst it brings — is also prompting many first-time buyers to purchase guns and stockpile ammunition. But the economy could also make it hard for manufacturers to get credit to buy supplies to make all that ammo.

Whatever the reason, gun stores nationwide face back-ordered ammunition requests and in some cases a wait of six to eight months for delivery.

As the demand grows, the cost of ammunition is rising — as is the cost of guns and supplies such as cleaning kits and eye and ear protection.

"This is the same thing the oil industry did to us, but now it’s with ammunition," said Tom Mullenix of Oklahoma, who recently shopped at Cheaper Than Dirt in Fort Worth.

Federal moves

Around the November 2008 elections, some gun store owners began seeing a sharp increase in gun and ammunition sales.

This year, U.S. Attorney General Eric Holder indicated that the Obama administration would consider pursuing a renewed ban, such as the one that prohibited the possession and sale of assault weapons from 1994 to 2004.

Pennsylvania Gov. Ed Rendell last week called on Congress to renew the ban to protect peace officers on the streets.

But some leaders say this may not be the right time for the ban.

Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi have indicated that they are reluctant to move forward, and U.S. Sen. Dianne Feinstein, D-Calif., recently echoed that on CBS’ 60 Minutes. But she said she hasn’t given up and will "pick the time and the place, no question about it," to seek a renewal of the ban.

U.S. Rep. Michael Burgess, R-Lewisville, said: "It’s a political firestorm. The closer to the election, the less enthusiasm there will be to take it up."

Rising cost

Chad Lane shoots competitively twice a month.

To save money on the 200 to 400 bullets he uses, he makes them himself. But even those costs are going up.

Last year, he could make 100 rounds for $123. Now, 100 rounds cost $165, he said.

"I’m trying to stock up," said Lane, a 20-year-old truck driver. He’s not the only one.

DeWayne Irwin, owner of Cheaper Than Dirt, is having a hard time keeping some ammunition on his shelves.

He has ordered millions of rounds but has been told that he may wait six to eight months for some of those deliveries.

Already, there’s a shortage of ammunition for the .25 ACP and .380 pistols.

And prices are rising on those and nearly all other types of ammunition. A box of 50 rounds for a 9 mm pistol, for instance, sold last year for $12.97. Today, it costs $29.97.

"It’s so bad," Irwin said. "It’s crazy.  . . . And for the foreseeable future, it’s not going to get any better.

"It’s going to get worse."

New users

Part of the reason for the increased demand is that a lot of new gun owners are buying ammo in bulk to use now and to stockpile, Irwin said.

"We have a shortage of cleaning kits and eye and ear protection in addition to the ammunition shortages," he said. "That tells me people are buying them and shooting them.

"People are scared they are going to have to take their gun and fight for that bucket of carrots or whatever."

Instead of buying two boxes of ammunition, a customer might buy 10.

"People are hoarding it," Irwin said. "They think it’s either going to run out or people will be taxed more and no one will be able to afford it."

Obama Urges C.I.A. Not to Be Discouraged by Torture Memos

Pressure Grows to Investigate Interrogations

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Pressure mounted on President Obama on Monday for more thorough investigation into harsh interrogations of terrorism suspects under the Bush administration, even as he tried to reassure the Central Intelligence Agency that it would not be blamed for following legal advice.

Mr. Obama said it was time to admit “mistakes” and “move forward.” But there were signs that he might not be able to avoid a protracted inquiry into the use of interrogation techniques that the president’s top aides and many critics say crossed the line into torture.

And while Mr. Obama vowed not to prosecute C.I.A. officers for acting on legal advice, on Monday aides did not rule out legal sanctions for the Bush lawyers who developed the legal basis for the use of the techniques.

The president’s decision last week to release secret memorandums detailing the harsh tactics employed by the C.I.A. under his predecessor provoked a furor that continued to grow on Monday as critics on various fronts assailed his position. Among other things, the memos revealed that two captured Qaeda operatives were subjected to a form of near-drowning known as waterboarding a total of 266 times.

Some Bush administration officials, including former Vice President Dick Cheney, accused the administration of endangering the country by disclosing national secrets. Mr. Cheney went on the Fox News Channel to announce that he had asked the C.I.A. to declassify reports documenting the intelligence gained from the interrogations. Gen. Michael V. Hayden, the former C.I.A. director, has also condemned the release of the memorandums and said the harsh questioning had value.

On the other side of the spectrum, human rights activists, Congressional Democrats and international officials pressed for a fuller accounting of what happened. Senator Dianne Feinstein, a California Democrat and chairwoman of the Intelligence Committee, wrote Mr. Obama asking him not to rule out prosecutions until her panel completed an investigation over the next six to eight months.

Mr. Obama tried to calm the situation with his first visit to C.I.A. headquarters since taking office. Concerned about alienating the agency, Mr. Obama went out of his way to lavish praise on intelligence officers, using words like “indispensable,” “courage” and “remarkable” and promising his “support and appreciation.”

“Don’t be discouraged by what’s happened in the last few weeks,” he told employees. “Don’t be discouraged that we have to acknowledge potentially we’ve made some mistakes. That’s how we learn. But the fact that we are willing to acknowledge them and then move forward, that is precisely why I am proud to be president of the United States and that’s why you should be proud to be members of the C.I.A.”

Aides said Mr. Obama struggled for four weeks about whether to release the memos in response to a lawsuit filed under the Freedom of Information Act, consulting with advisers, experts and intelligence professionals. It was on his mind so much, they said, that he talked about it with aides late at night in his hotel room during stops on his recent European trip.

In meetings, they said, he served as “the interrogator,” as one put it, challenging people to defend their views. Advisers diverged, with some like Attorney General Eric H. Holder Jr. favoring the release of more information and others like Leon E. Panetta, the new C.I.A. director, urging that more be withheld. Aides said Mr. Obama worried about damaging morale at the C.I.A. and his own relationship with the agency.

In the end, aides said, Mr. Obama opted to disclose the memos because his lawyers worried that they had a weak case for withholding them and because much of the information had already been made public in The New York Review of Books, in a memoir by George J. Tenet, the former C.I.A. director, and even in a 2006 speech by President George W. Bush.

The decision to promise no prosecution of those who followed the legal advice of the Bush administration lawyers was easier, aides said, because it would be hard to charge someone for doing something the administration had determined was legal. The lawyers, however, are another story.

On Sunday, Rahm Emanuel, the White House chief of staff, said on the ABC News program “This Week” that “those who devised policy” also “should not be prosecuted.” But administration officials said Monday that Mr. Emanuel had meant the officials who ordered the policies carried out, not the lawyers who provided the legal rationale.

Three Bush administration lawyers who signed memos, John C. Yoo, Jay S. Bybee and Steven G. Bradbury, are the subjects of a coming report by the Justice Department’s ethics office that officials say is sharply critical of their work. The ethics office has the power to recommend disbarment or other professional penalties or, less likely, to refer cases for criminal prosecution.

The administration has also not ruled out prosecuting anyone who exceeded the legal guidelines, and officials have discussed appointing a special prosecutor. One option might be giving the job to John H. Durham, a federal prosecutor who has spent 15 months investigating the C.I.A.’s destruction of videotapes of harsh interrogations.

As the debate escalated, Mr. Cheney weighed in, saying that if the country is to judge the methods used in the interrogations, it should have information about what was obtained from the tough tactics.

“I find it a little bit disturbing” that “they didn’t put out the memos that showed the success of the effort,” Mr. Cheney said on Fox News. “There are reports that show specifically what we gained as a result of this activity.”

Other investigations promise to keep the issue alive. The Senate Armed Services Committee plans to release its own report after two years of looking at the military’s use of harsh interrogation methods. And the Democratic chairmen of the Senate and House Judiciary Committees are pushing for a commission to look into the matter. At the same time, the administration faces pressure from abroad. Manfred Nowak, the United Nations’ chief official on torture, told an Austrian newspaper that as a party to the international Convention against Torture, the United States was required to investigate credible accusations of torture.

Others pushing for more investigation included Philip D. Zelikow, the former State Department counselor in the Bush administration. On his blog for Foreign Policy magazine and in an interview, Mr. Zelikow said it was not up to a president to rule out an inquiry into possible criminal activity. “If a Republican president tried to do this, people would be apoplectic,” he said.

Frederick A. O. Schwarz Jr., who was chief counsel to the Church Committee, the Senate panel that investigated C.I.A. abuses in the 1970s, said Mr. Obama was “courageous” to rule out prosecutions for those who followed legal advice. But he said “it’s absolutely necessary” to investigate further, “not for the purpose of setting blame but to understand how it happened.”

The economics, and politics, of auto workers' wages

The economics, and politics, of auto workers' wages

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The auto industry is in crisis around the world, due to an unprecedented collapse in sales. And governments around the world (from Europe to Asia to the Americas) have moved quickly to keep the industry in business.

Only in North America, however, has this restructuring been sidetracked by an ultimately phony confrontation over auto worker wages. Auto workers are well paid everywhere - after all, that's a key reason governments chase auto investments in the first place. But only in Canada and the United States have governments made auto assistance contingent on union concessions. That's not the case in Germany or Japan (where auto workers make more than they do in Canada), nor in Brazil or Korea (where they make less). Only here has the future of the industry been linked to a frontal attack on unions.

This union-bashing took a dangerous turn last week. Successive business and political leaders stepped up to point a gun at the head of the Canadian Auto Workers union. Fiat's chief executive Sergio Marchionne, Industry Minister Tony Clement and Chrysler chief executive Robert Nardelli all threatened to pull the plug on Chrysler without CAW concessions of up to $19 per hour.

Their argument is dressed up in the language of "competitiveness," "viability," and "realism." But ultimately it's about politics, not economics.

Economically, wage cuts are irrelevant to the future of Chrysler and any other auto maker. Whether these companies live or die depends on bondholders, on government, and - most importantly - on consumers. Direct labour accounts for 7 per cent of total auto costs: less than capital, less than materials, less than dealer margins. Cutting that to 6 per cent won't sell a single car or truck.

Indeed, the demand flies completely in the face of Fiat's own successful restructuring. Fiat went from basket case in 2004 to success story by 2007. Was that because of wage cuts? No ... because there weren't any. Rather, Fiat's turnaround reflected successful efforts to develop new products (like its trendy Cinquecento), to rebuild domestic market share, to boost foreign sales through exports and joint ventures and to implement leaner, dynamic management. That's what we need in North America - not wage cuts, which will only undermine auto sales as other employers follow the lead.

The true economic constraint on wages is that they be validated by productivity, and remain broadly competitive with competing locations. Canadian auto workers meet both tests: productivity (averaging $300,000 value-added per worker per year) is the world's best, far exceeding compensation, and labour costs are below-average among the various suppliers feeding the North American market.

So the attack on auto workers isn't about economics. It's about politics.

How else to explain the arbitrary hook on which Clement and Co. have hung their hats? They're demanding that CAW costs be cut to match non-union plants in Canada. (By the way, accounting for demographics and capacity utilization, the true difference between union and non-union auto plants in Canada is more like $5 per hour, not $19.)

Canadian non-union plants account for just 4 per cent of North American sales. What about the other 96 per cent of the competition? Why not demand that CAW costs be cut to the level of unionized auto workers in Korea, say, or unionized workers in Mexico - both of which pose greater competitive threats than non-union Canadian plants? Because the demand is not about being competitive. It is about challenging the legitimacy and survival of unions. It aims to exploit the wedge, in an anti-union political culture, between workers who've managed to win a little more - and those who have yet to do so.

Finance Minister Jim Flaherty tried a similar stunt last November, in his infamous economic update. He tried to capitalize on fears of recession to snatch away the legal right to strike from federal employees (who also enjoy good wages and pensions). It was an opportunistic, mean-spirited act, driven by politics, not economics. It was defeated by the united opposition parties.

The same government is now trying the same thing with auto workers: capitalizing on economic fear to challenge the fundamental right of unions to exist and to bargain.