Sunday, July 12, 2009

Obama claims right to imprison "combatants" acquitted at trial

Obama claims right to imprison “combatants” acquitted at trial

By Bill Van Auken

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In testimony before the US Senate Tuesday, legal representatives of the Obama administration not only defended the system of kangaroo military tribunals set up under Bush, but affirmed the government’s right to continue imprisoning detainees indefinitely, even if they are tried and acquitted on allegations of terror-related crimes.

This assertion of sweeping, extra-constitutional powers is only the latest in a long series of decisions by the Democratic administration demonstrating its essential continuity with the Bush White House on questions of militarism and attacks on democratic rights.

The testimony, given to the Senate Armed Services Committee by the top lawyer for the Pentagon and the head of the Justice Department’s National Security Division, came in the context of a congressional bid to reconfigure the military tribunal system set up under the Bush administration.

In 2006, Congress passed the Military Commissions Act in an attempt to lend legal cover to the system of drumhead courts set up to try so-called “enemy combatants,” which had been found unconstitutional by the US Supreme Court. The high court subsequently ruled against the congressionally revised system as well.

This latest effort, like the one carried out three years ago, is aimed at fending off successful court challenges to the system. The Senate Armed Services Committee introduced new military commission legislation last month as part of the 2010 military spending bill.

As the committee’s Democratic chairman, Carl Levin of Michigan, put it, the aim was to “substitute new procedures and language” that would “restore confidence in military commissions.”

As the administration’s lawyers made clear, however, any changes will amount to mere window dressing in an Orwellian system where the government decides who is entitled to trial, whether defendants are brought before military or civilian courts, and even whether or not to free those who are found not guilty.

The Justice Department attorney, David Kris, told the Senate panel that civilian and military prosecutors are still debating whether scores of detainees who have been marked for trial will be brought before a military tribunal or a civilian court.

“This is a fact-intensive judgment that requires a careful assessment of all the evidence,” Kris said. He acknowledged that some form of trial was preferable to simply continuing to hold the detainees as “unlawful combatants.”

What is clear, however, is that this “fact intensive” process is aimed at determining which detainees can be convicted in a civilian court, which of them must be sent to military tribunals because of the weakness of the evidence against them, and which will simply be held without trial because there is no evidence that would stand up in either venue. In such a system, all must be found guilty—the only question is by what means.

Undoubtedly another major concern is keeping out of open court cases which could make public the heinous crimes carried out by the US military and intelligence apparatus in the “war on terror,” including acts of “extraordinary rendition,” torture and murder.

The Obama White House has repeatedly demonstrated its determination to cover up these crimes, including by defying a court order to release Pentagon torture photos and the Justice Department’s attempts to quash legal challenges to the criminal practices of the Bush administration, including rendition, torture and illegal domestic spying.

Appearing with Kris was Jeh Johnson, the chief lawyer of the Defense Department, who made the case for the president’s supposed power to continue holding detainees without bringing them before any court and to throw men acquitted back into prison without new charges or trials.

“There will be at the end of this review a category of people that we in the administration believe must be retained for reasons of public safety and national security,” Johnson said. “And they’re not necessarily people that we’ll prosecute.”

He continued: “The question of what happens if there’s an acquittal is an interesting question—we talk about that often within the administration. If, for some reason, he’s not convicted for a lengthy prison sentence, then, as a matter of legal authority, I think it’s our view that we would have the ability to detain that person.”

Johnson indicated that such extraordinary powers—which continue the Bush administration’s repudiation of habeas corpus, the bedrock right to challenge unlawful imprisonment—stemmed from the 2001 Authorization for the Use of Military Force passed in the wake of the September 11 terrorist attacks. This is the same all-purpose legal pretext used by the Bush administration to justify unconstitutional measures.

One member of Congress accurately described as “show trials” a system in which prosecutions are carried out in civilian or military courts based on where they are assured convictions, and, in the unlikely event that a defendant manages to escape conviction, he can be sent back to jail anyway.

“What bothers me is that they seem to be saying, ‘Some people we have good enough evidence against, so we’ll give them a fair trial,’” Representative Jerrold Nadler (Democrat of New York) told the Wall Street Journal. He continued: “Some people the evidence is not so good, so we’ll give them a less fair trial. We’ll give them just enough due process to ensure a conviction because we know they’re guilty. That’s not a fair trial, that’s a show trial.” Nadler chairs a House Judiciary subcommittee which held a hearing Wednesday on military commissions.

In his testimony, Kris of the Justice Department acknowledged that there are “serious questions” about whether charges of “material support for terrorism” can be brought before a military tribunal, which, according to Obama, will exist solely to prosecute violations of the laws of war.

But Kris made it clear that the administration’s lawyers had determined that the “material support” charge could be brought before military commissions, and, in most cases, lumped together with conspiracy charges that would help convictions stand up on appeal.

The point was a significant one, as the great majority of those held at the US Navy prison in Guantanamo Bay, Cuba—as well as the thousands more who have been thrown into military prisons in Iraq and Afghanistan as well as CIA “black sites” around the world—have not been accused of any specific terrorist act. Rather, with little or no evidence, they are charged with support for or association with terrorists.

“Material support for terrorism” has also been the principal charge figuring in a succession of frame-up trials in the US itself, where dozens of individuals have been ensnared by government agent provocateurs in FBI “terror plot” sting operations.

The Pentagon and Justice Department lawyers claimed that both the administration and the Senate panel were on the same page in barring the use of confessions extracted under torture to convict those brought before military tribunals. However, differences emerged between the Justice Department lawyer Kris and a top uniformed legal official who also testified.

While Kris warned that the use of “involuntary” confessions could lead to convictions being overturned on appeal, Vice Admiral Bruce MacDonald, the navy’s judge advocate general, argued that a military judge should be able to evaluate the “reliability” of “coerced statements” in deciding whether they can be introduced as evidence.

The administration’s lawyers also backed the provision in the legislation passed by the Senate panel that allows the use of hearsay evidence, which would be excluded from a civilian court. As Kris put it, the use of such evidence is necessary “given the unique circumstances of military and intelligence operations.”

The testimony of the Pentagon lawyer, Jeh Johnson, also further called into question Obama’s pledge to close down the Guantanamo prison by January 22, 2010. He allowed that many of the cases would not be ready by next January and declined to state where the military tribunals would be held, saying the administration was considering “various options.” Earlier this year, Congress blocked funding for transferring detainees to the US.

Testifying before a House panel Wednesday, a former Guantanamo prosecutor delivered a scathing indictment of the military tribunal system, including in the revamped form proposed by the Obama administration.

Lt. Col. Darrel Vandeveld, appearing before a House Judiciary subcommittee, said that he was the seventh Guantanamo military prosecutor to resign because he could not “ethically or legally prosecute the defendant within the military commission system.”

The Senate legislation, he charged, left in place a system that is “illegal and unconstitutional,” serving to “undermine the fundamental values of justice and liberty.”

Describing himself as having gone to Guantanamo as a “true believer,” Vandeveld said his view was radically changed by the case of the young Afghan he was assigned to prosecute, Mohammed Jawad.

He described the basic elements of the case brought against Jawad, who may have been as young as 12 when captured by US troops in Afghanistan: “a confession obtained through torture, two suicide attempts by the accused, abusive interrogations, the withholding of exculpatory evidence from the defense, judicial incompetence, and ugly attempts to cover up the failures of an irretrievably broken system.”

The Obama administration continues to hold the youth, who has faced imprisonment, torture and abuse for nearly seven years, on the basis of the confession extracted under torture.

What becomes increasingly evident is that the current administration is maintaining and expanding the police-state infrastructure created by its predecessor, with the phony claims of revived “due process” serving only to give this extra-legal system a veneer of legitimacy.

This system will not only affect the 229 detainees held at Guantanamo—though this is no small question, given that innocent men have been imprisoned and tortured there for seven years. It will be in place to deal with future detainees abducted by the US military and the CIA around the world, as well as anyone whom the president of the United States—whether Obama or his successors—deems a threat to national security, including American citizens.

Should such an “enemy combatant” prove his innocence in court, no matter! The all-powerful president can simply ignore the verdict and continue imprisoning him anyway. This is a textbook definition of dictatorship.

Growing Numbers of Poor People Swamp Legal Aid Offices

Growing numbers of poor people swamp legal aid offices

Tony Pugh

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After years of funding shortfalls, legal aid societies across the country are being overwhelmed by growing numbers of poor and unemployed Americans who face eviction, foreclosure, bankruptcy and other legal problems tied to the recession.

The crush of new clients comes as the cash-strapped agencies cut staff and services.

The nonprofit Legal Services Corp., which funds more than 900 legal-aid offices nationwide, says that the number of people who qualify for assistance has jumped by about 11 million since 2007, because of the recession. Roughly 51 million people are now eligible for assistance — individuals and families who earn less than 125 percent of the federal poverty level, now set at $27,564 a year for a family of four.

The federal government budgeted an 11 percent increase in funding for legal aid this year. That increase, however, is more than offset by the growing demand for services and a recession-driven decline in state funding, charitable gifts and grants, which together traditionally make up half of legal service funding.

That means that legal-aid programs will turn away roughly 1 million valid cases this year, advocates say, about half the requests for assistance they'll receive.

"The impact of the recession on the delivery system for civil legal aid has been dramatic with respect to those nonfederal funds," said Don Saunders, the director of the Civil Legal Services division of the National Legal Aid & Defender Association.

In Cleveland, where unemployment is 10 percent, the Legal Aid Society of Cleveland has seen a 56 percent increase this year in employment cases, such as wage-and-hour disputes and the denial of unemployment insurance for laid-off workers.

The agency, which has 55 full-time lawyers and 1,400 volunteer lawyers, expects to handle more than 900 such cases this year and about 10,000 cases overall. However, it'll turn away some 14,000 other valid, income-eligible cases because it can't meet the demand.

"It's heartbreaking that we have to turn away so many clients," said Melanie Shakarian, the Cleveland agency's director of development. "We have a considerable amount of resources to help low-income people, but even with all that we have, we can't serve everyone who comes to us for help."

Middle-class people also have trouble affording legal help, but with fewer economic resources, the poor are more likely to find their money problems leading to court.

Legal aid offices typically handle cases involving divorces, child custody and a host of consumer issues that can include landlord-tenant disputes, foreclosures, evictions, applications for government benefits and battles with predatory lenders. They often represent battered women who need protection, women who are trying to obtain child support or families trying to secure insurance payments.

Each downward turn of the economy increases the need for services. During the first year of the recession in 2008, 93,000 people contacted the Cleveland agency for help. That was up 35 percent from the year before, Shakarian said. This year, the agency is on pace to get 100,000 calls for assistance. Of these, only about 10 percent will be served.

Nationally, experts estimate that 80 percent of low-income Americans who need legal help in civil cases don't receive any. That comprises "not only people who show up at the door and are turned away, which is a large number, but also those who don't even try because it's so hopeless," said Peter Edelman, who teaches poverty law at Georgetown University in Washington.

In southwest Texas, Texas RioGrande Legal Aid turned away a third of the people who requested help last year. The rate is even higher this year, communications director Cindy Martinez said.

One major reason is the decline in funding from the Interest on Lawyers Trust Accounts program. The program collects interest from lawyers' client trust accounts and distributes the money as grants to legal-service organizations nationwide. Nearly $112 million in such funds were distributed last year. That funding is expected to fall 21 percent this year, however, in part because the Federal Reserve slashed the benchmark interest rate to near zero to help fight the recession.

Some states have seen more precipitous declines. Connecticut went from $21 million in Interest on Lawyers Trust Accounts funds to $4 million in one year, Saunders said, while Texas funds declined from $30 million to $2 million.

"When those interest rates dropped, they took legal aid with them," Martinez said.

After providing $390 million for programs funded by the Legal Services Corp. this year — an 11 percent increase over 2008 — Congress is poised to up the ante again. The House of Representatives has requested $440 million for fiscal year 2010, President Barack Obama asked for $435 million and the Senate has called for $400 million.

House and Senate conferees will settle on a final amount, but it's unlikely to approach the previous inflation-adjusted peaks of $750 million in 1981 and $554 million in 1995, according to a new report by the Center for American Progress, a liberal research center. The report found that the Legal Services Corp.'s inflation-adjusted funding this fiscal year is the lowest in the program's 35-year history, an estimated $6.85 per person.

"We're at less than half of where we were when President Reagan was inaugurated," said Saunders, of the legal aid and defender association. He noted that federal Legal Services Corp. funding has followed a typical pattern since the 1980s, increasing when Democrats control Washington and declining when Republicans are in the majority.

Ted Frank, a resident fellow at the American Enterprise Institute, a conservative policy research center, expressed the conservative sentiment, saying, "There are better ways to help the poor than by sending in more lawyers."

He suggested changing the rules that make legal representation so costly, such as eliminating the third year of law school and bar examinations. Doing so, he said, would free more time for private lawyers to provide pro bono work for the poor. He also said there was little research to show that the legal needs of the poor couldn't be addressed at current funding levels. He suggested that legal aid offices already are taking just the strongest cases and turning away only weaker, less meritorious ones.

Marcia Cypen, the executive director of Legal Services of Greater Miami, disputes that contention. She said her agency turned away cases involving consumer issues not because they didn't have merit but because it had to focus its scarce resources on the most urgent and needy.

"It's not that they're weaker cases," Cypen said. "We have to select cases that go to core survival issues: food, shelter, income protection for vulnerable populations. It's not that the other cases aren't important. They're things that people need, but they just won't die if they don't get them."

Obama's Stealth Scheme to License Pollution and Fraud

Obama's Cap and Trade Carbon Emissions Bill - A Stealth Scheme to License Pollution and Fraud

by Stephen Lendman

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On May 15, HR 2454: American Clean Energy and Security Act of 2009 (ACESA) was introduced in the House purportedly "To create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy."

In fact, it's to let corporate polluters reap huge windfall profits by charging consumers more for energy and fuel as well as create a new bubble through carbon trading derivatives speculation. It does nothing to address environmental issues, yet on June 26 the House narrowly passed (229 - 212) and sent it to the Senate to be debated and voted on. More on that below.

On March 31, Energy and Commerce Committee Chairman Henry Waxman and Energy and Environment Subcommittee Chairman Edward Markey released a "discussion draft" of the proposed legislation and falsely claimed:

-- it's "a comprehensive approach to America's energy policy that charts a new course towards a clean energy economy;" it will

-- create millions of clean energy jobs....that can't be shipped overseas;

-- put America on the path to energy independence;

-- reduce our dependence on foreign oil;

-- save money by the billions;

-- unleash energy investment by the trillions;

-- cut global warming pollution;

-- strengthen our economy;" and

-- make "America the world leader in new clean energy and energy efficiency technologies."

Strong-arm pressure, threats and bribes got the bill through the House. Forty-four Democrats opposed it. Eight Republicans backed it. Over 1200 pages long, few if any lawmakers read it.

After passage, Chairman Markey said:

"It's been an incredible six months to go from a point where no one believed we could pass this legislation to a point now where we can begin to say that we are going to send President Obama to Copenhagen in December as the leader of the world on climate change."

Speaker Pelosi praised the bill as "transformational legislation which takes us into the future" and added that after passage she took congratulatory calls from Obama, Senate Majority Leader Harry Reid and Al Gore. The former vice-president has long-standing ties to Goldman Sachs (GS), and in 2004 he and David Blood, CEO of GS's asset management division until 2003, co-founded Generation Investment Management LLC, a firm likely to profit greatly from cap and trade schemes.

In a prepared June 25 statement ahead of the House vote, Obama said:

"Right now, the House of Representatives is moving toward a vote of historic proportions on a piece of legislation that will open the door to a new, clean energy economy."

After citing the same false claims as Waxman and Markey, he called the legislation "balanced and sensible" and "urge(d) every member of Congress - Democrats and Republicans - to come together and support" it.

Polluters love it. So does Wall Street and corporate-friendly environmental groups like the Environmental Defense Fund. The opposition, however, includes Greenpeace, Friends of the Earth and Public Citizen.

In a joint May 13 press release, they were "extremely troubled (about) compromises to the already flawed American Clean Energy & Security Act."

It contains enough loopholes to make its claimed performance standards worthless, one of which prohibits the EPA from using the Clean Air Act to regulate future greenhouse gas emissions. That alone means they'll proliferate beyond what new technology reduces on its own, and only then if it's profitable to do it.

On June 23, Friends of the Earth president Brent Blackwelder said:

"Corporate polluters including Shell and Duke Energy helped write this bill, and the result is that we're left with legislation that fails to come anywhere close to solving the climate crisis. Worse, the bill eliminates preexisting EPA authority to address global warming - that means it's actually a step backward."

A June 25 Greenpeace press release stated:

"As it comes to the floor, the Waxman-Markey bill sets emission reduction targets far lower than science demands, then undermines even those targets with massive offsets. The giveaways and preferences in the bill will actually spur a new generation of nuclear and coal-fired power plants to the detriment of real energy solutions."

On June 27, Public Citizen (PC) called the bill "a new legal right to pollute (that) gives away 85 percent of (its) credits to polluters. (It) will not solve our climate crisis but will enrich already powerful oil, coal and nuclear power companies." PC wants polluters to cut their emissions 80% below 1990 levels by 2050 and pay for credits, not get them free. It also cited the American Wind Energy Association saying that the renewable standard will deliver "effectively zero" new ones.

PC wants consumers protected, not charged a "carbon tax....The bill doesn't, but should, provide money to help homeowners pay for such things as weatherization or to receive rebates for rooftop solar." Its main "consumer protection provision distributes free pollution allowances to electric and natural gas utilities (on the assumption) that the 50 different state utility commissions will redirect all that money back to consumers." In fact, HR 2454 is a thinly-veiled scheme to let companies profit from polluted air, in part financed by a consumer "carbon tax."

Big Coal gets a waiver until 2025. Agribusiness is exempt altogether even though it's responsible for up to one-fourth of greenhouse gas emissions. The nuclear industry will benefit hugely from the free allowances provision. A leaked memo had Exelon, the nation's largest nuclear power company, bragging that it will reap a $1 - $1.5 billion annual windfall.

Overall, carbon trading is a scam, first promoted in the 1980s under Reagan. Clinton made it a key provision of the 1997 Kyoto Protocol. He signed it in 1998, but it was never ratified. As of February 2009, 183 nations did both, but independent scientists call it "miserable failure" needing to be scrapped and replaced by a meaningful alternative.

ACESA is about profits, not environmental remediation. Its emissions reduction targets are so weak, they effectively license pollution by creating a new profit center to do it.

The Next Bubble

Wall Street also will reap a huge bonanza through carbon trading derivatives speculation exploiting what Commodity Futures Trading commissioner Bart Chilton believes will be a $2 trillion market - "the biggest of any (commodities) derivatives product in the next five years." Others see a future annual market potential of up to $10 trillion based on these schemes:

-- government-issued cap and trading carbon allowance permits to let polluters emit a designated amount of greenhouse gases; those exceeding the limit can buy rights for more from companies below their limit;

-- carbon offsets that let companies emit excess greenhouse gases provided they invest in projects purportedly cutting them elsewhere, either domestically or abroad; they can also fulfill their obligation by stretching out investments for up to 40 years - far enough ahead to avoid them altogether; and

-- besides trading allowances and offsets, polluters and Wall Street can play the derivatives game, including with futures contracts for a designated number of allowances at an agreed on price for a specified date.

According to Robert Shapiro, former Undersecretary of Commerce in the Clinton administration: "We are on the verge of creating a new trillion dollar market (through) financial assets that will be securitized, derivatized, and speculated by Wall Street like the mortgage-backed securities market" and all others that inflated bubbles that burst. If cap and trade becomes law, this market will explode so Wall Street is pressuring senators to pass it.

According to the Center of Public Integrity (CPI), around "880 total businesses and groups....reported they were seeking to influence climate change policy" as addressed in HR 2454. Representing 770 of them are "an estimated 2340 lobbyists," a 300% increase in the past five years, or more than "four climate lobbyists for every member of Congress."

In 2003, Wall Street employed none on climate issues. CPI says it now has 130 representing the usual players like Goldman Sachs, JP Morgan Chase, Citigroup and others, and why so is simple - to create a huge new revenue stream to make up for ones lost with perhaps others in the wings, thus far not revealed. Waxman - Markey delivered splendidly, setting the stage for another bubble if HR 2454 becomes law with huge pressure now on senators to assure it.

Warning: Cap and Trade Bubble Ahead

On July 1, Catherine Austin Fitts' blog headlined "The Next Really Scary Bubble" in stating:

"If you think the housing and credit bubble diminished your financial security and your community, or the bailouts, or the rising gas prices did as well, hold on to your hat" for what's coming. "Carbon trading is gearing up to make the housing and derivative bubbles look like target practice."

She quoted Rep. Geoff Davis calling it "a scam," Rep. Devin Nunes saying it's a "massive transfer of wealth" from the public to polluters and Wall Street, Rep. James Sensenbrenner stating "Carbon markets can and will be manipulated using the same Wall Street sleights of hand that brought us the financial crisis," and Dennis Kuchinich citing "The best description to date (to) be found in Matt Taibbi's....'The Great American Bubble Machine: From tech stocks to high gas prices, Goldman Sachs (GS) has engineered every major market manipulation since the Great Depression - and they are about to do it again.' "

Taibbi calls GS the "world's most powerful investment bank....a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It operates by positioning itself "in the middle of (every) speculative bubble, selling investments they know are crap."

They control Washington and profit by extracting "vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that (lets it) rewrite the rules in exchange for the relative pennies (it)throws (back as) political patronage."

When inflated bubbles burst "leaving millions of ordinary (people) broke and starving, they begin the entire process over again (inflating new bubbles and) lending us back our own money at interest...." They've been at this since the 1920s and are "preparing to do it again (with) what may be the biggest and most audacious bubble yet" - a new cap and trade derivatives scam written into HR 2454 with GS positioned to profit most from it. Taibbi calls its market edge a position of "supreme privilege (and) explicit advantage" ahead of all others on the Street.

Contributing $4,452,585 to Democrats in 2008 (around $1 million to Obama) was mere pocket change for what it can reap from scams like cap and trade disguised as an environmental plan. The scheme was devised. GS helped write it. The House passed it and sent it to the Senate. Unless stopped, it will transfer more of our wealth to corporate polluters and Wall Street on top of all they've stolen so far from derivatives fraud and the imploded housing and other bubbles. And Goldman will lead the way finding new ways to do it until there's nothing left to extract.

100s of Thousands of Workers Will Lose Unemployment Benefits Soon

Hundreds of Thousands of Workers Will Lose Unemployment Benefits Soon

By Marie Cocco

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When a virulent disease is ravaging you like a cancer, you don't want a cacophony of voices promoting different or contradictory cures. Yet that is what we're starting to hear about the economic crisis, not only from a politically divided -- and pretty scared -- capital, but from within the Obama administration itself. In just the past few days, Vice President Joe Biden has said the young administration misread the depth of the recession -- an honest account, since most private economists did as well. Laura Tyson, an outside economic adviser to the White House, said it's wise to start preparing another stimulus package.

Then President Barack Obama made everything perfectly muddy when he said in an ABC News interview that the seriousness of the downturn and how to attack it is "something we wrestle with constantly." Yet in the next breath, he expressed concern about the burgeoning deficit. But if anyone's looking for some clear voices, there are 650,000 of them just waiting to be heard. That is roughly the number of long-term unemployed who will begin losing their jobless benefits in September, according to the National Employment Law Project. Remember, the recession didn't start last fall when the government bailed out AIG and the financial system froze. It began in December 2007 -- and 6.5 million jobs have been lost since then. Depending on which state and the sort of triggers that apply to benefits, hundreds of thousands of workers laid off early in the downturn are soon to be left without the basic sustenance of an unemployment check.

Meanwhile, the Labor Department says, the number of unemployed people out of work for 27 weeks or longer continues to grow, reaching 4.4 million last month. In June, three out of 10 jobless workers had been out of work for at least six months, according to the department's data. The stimulus package the president signed soon after taking office did provide extended benefits, and boosted weekly payments. But even that extension runs out on Dec. 26, and would not apply to all the unemployed. Does anyone really believe that a significant portion of the unemployed will have found new work by then? Hardly. Both private and government economists now predict that unemployment will continue to rise at least through the end of this year.

"We can't ignore this moment when all these folks are running out (of benefits)," says Maurice Emsellem of the National Employment Law Project.

"That needs to be a top priority, to help these workers." Let's stop kidding ourselves. In no contemporary economic crisis -- not even those that unfolded on the Republicans' watch -- has Congress left the unemployed completely in the lurch. So some sort of spending package -- call it stimulus, call it stopgap emergency aid, whatever works -- is going to have to be passed.

The unemployment emergency helps feed another crisis Congress is going to be forced to address: the state budget disasters unfolding around the country. So far, 42 states have cut budgets that already had been enacted for fiscal 2009, according to the National Governors Association. More and deeper cuts are expected next year.

Already states have laid off and furloughed workers -- including, in some states, the very workers who process unemployment claims. Generally speaking, states are required to balance their budgets each year, a mandate that forces them to pull money out of the economy through spending reductions and tax hikes, counteracting the federal government's efforts to juice things up. "That is what happened during the Great Depression, we had states working against what the federal government was doing," says Heidi Shierholz, an economist with the Economic Policy Institute. With red states and blue, Republican governors and Democrats, all struggling against the same relentless, recession-driven drops in tax revenue, an almost irresistible political coalition for more aid to states eventually will take shape. And with the fast-approaching September deadline for extending some unemployment benefits, there will likely emerge one of those must-pass measures that may or may not be called another stimulus bill.

Any hot air expended trying to stop it serves no purpose but to fuel political fires. Remember, that is the whole point of those now huffing and puffing most heartily. They don't want to figure a way out of this morass; they just want to figure out a way to unseat those now in office.

Big Bankers Mounting Sneak Attack on Consumers

Big Bankers Mounting Sneak Attack on Consumers

By Jim Hightower

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Have you received your thank-you note? I'm still waiting for mine.

More than a year into the Wall Street bailout, I've yet to get any sort of "thank you" from even a single one of the big banks that you and I propped up with $12 trillion in direct giveaways, indirect giveaways, government guarantees and sweetheart loans. You'd think their mommas would've taught them better. But I've begun to think that waiting on a simple gesture of banker gratitude is like waiting on Donald Trump to have a good hair day -- ain't gonna happen.

Far from showing appreciation, the largest banking chains are now going out of their way to stiff us. Instead of nice notes, they are quietly slipping new gotchas into our monthly credit card bills and bank statements. In June, for example, Bank of America abruptly raised its fee for a basic checking account by 50 percent. Citibank jacked up the interest rate on some of its cards to 29.99 percent. And JPMorgan Chase more than doubled the required minimum payment on its cards.

Across the board, fees have skyrocketed to their highest levels on record, including assessments for such common occurrences as overdrafts (as high as $39), stop-payment actions ($39 -- double what it was 10 years ago), balance transfers (up more than 50 percent in the past year) and ATM use (nearly doubled in 10 years).

To add insult to injury, the banks blame us for their rate increases. Because the economy is such a wreck (massive job losses, falling incomes, millions of home foreclosures and other unpleasantness), industry spokesmen say there is a greater risk that customers will bounce checks or fall behind on their credit-card payments. Thus, claim purse-lipped bankers, they must protect themselves from us by ratcheting up rates and fees. "There is an increased riskiness around repayment because of the recession," spaketh one lobbyist for the financial giants.

Glade doesn't make enough "Spring Lilac" to cover up the stench of this argument. Come on -- it was the greed and incompetence of Mr. Jolly Banker that wrecked our economy, caused the recession and forced the odious bailout on us. They want us to pay for that?

The truth is, they are socking it to their customers for two reasons: 1) they can, and 2) fee hikes are a shifty way to snatch enormous levels of new income for themselves without doing anything to earn it.

These are the geniuses who made an ugly mess of the core business of banking -- which is to make good loans. To make up for their huge losses in that business, bankers have essentially been reduced to flim-flam fee-scammers. Last year, assessment of consumer fees became the main business of banks, totaling 53 percent of the industry's income!

That was before the current outbreak of fee frenzy. In the first three months of this year, for example, Bank of America's fee income rose 50 percent above the same period of 2008 -- an extra $4 billion in revenue for the bank.

"Fees 'R' Us" is what big banks have become. This is why they are panicked by reforms presently coming out of Washington. Already, President Obama has signed a bill to restrict credit-card gouging, and Bank of America, Citigroup and JPMorgan (which control about 58 percent of the nation's credit-card market) are scrambling to jack up their rates and fees before the new law takes effect next February.

Now, the bankers are lobbying frantically to kill Obama's plan to create a Consumer Financial Protection Agency, which would have regulatory power to prohibit a wide range of finance-industry abuses. For the first time, we consumers would have our own seat at the regulatory table -- an agency with the independence and clout to counter the Federal Reserve and other agencies that primarily serve big banks.

From the bailout to the explosion in fees, we've seen that Wall Street's financial titans won't control their greed. For the sake of the economy, the well-being of America's majority and the advancement of our nation's democratic values, we must do it for them. For more information, contact Americans for Financial Reform:

To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at

Season of Travesties: Freedom and Democracy in mid-2009

Season of Travesties: Freedom and Democracy in mid-2009

June 2009 was marked by a number of significant events, including two elections in the Middle East: in Lebanon, then Iran. The events are significant, and the reactions to them, highly instructive.

The election in Lebanon was greeted with euphoria. New York Times columnist Thomas Friedman gushed that he is "a sucker for free and fair elections," so "it warms my heart to watch" what happened in Lebanon in an election that "was indeed free and fair — not like the pretend election you are about to see in Iran, where only candidates approved by the Supreme Leader can run. No, in Lebanon it was the real deal, and the results were fascinating: President Barack Obama defeated President Mahmoud Ahmadinejad of Iran." Crucially, "a solid majority of all Lebanese -- Muslims, Christians and Druse -- voted for the March 14 coalition led by Saad Hariri," the US-backed candidate and son of the murdered ex-Prime Minister Rafik Hariri, so that "to the extent that anyone came out of this election with the moral authority to lead the next government, it was the coalition that wants Lebanon to be run by and for the Lebanese -- not for Iran, not for Syria and not for fighting Israel." We must give credit where it is due for this triumph of free elections (and of Washington): "Without George Bush standing up to the Syrians in 2005 -- and forcing them to get out of Lebanon after the Hariri killing -- this free election would not have happened. Mr. Bush helped create the space. Power matters. Mr. Obama helped stir the hope. Words also matter."

Two days later Friedman's views were echoed by Eliott Abrams, a senior fellow at the Council on Foreign relations, formerly a high official of the Reagan and Bush I administrations. Under the heading "Lebanon's Triumph, Iran's Travesty," Abrams compared these "twin tests of [US] efforts to spread democracy to the Muslim world." The lesson is clear: "What the United States should be promoting is not elections, but free elections, and the voting in Lebanon passed any realistic test....the majority of Lebanese have rejected Hezbollah's claim that it is not a terrorist group but a `national resistance'...The Lebanese had a chance to vote against Hezbollah, and took the opportunity."

Reactions were similar throughout the mainstream. There are, however, a few flies in the ointment.

The most prominent of them, apparently unreported in the US, is the actual vote. The Hezbollah-based March 8 coalition won handily, by approximately the same figure as Obama vs. McCain in November 2008, about 54% of the popular vote, according to Ministry of Interior figures. Hence by the Friedman-Abrams argument, we should be lamenting Ahmadinejad's defeat of President Obama, and the "moral authority" won by Hezbollah, as "the majority of Lebanese...took the opportunity" to reject the charges Abrams repeats from Washington propaganda.

Like others, Friedman and Abrams are referring to representatives in Parliament. These numbers are skewed by the confessional voting system, which sharply reduces the seats granted to the largest of the sects, the Shi'ites, who overwhelmingly back Hezbollah and its Amal ally. But as serious analysts have pointed out, the confessional ground rules undermine "free and fair elections" in even more significant ways than this. Assaf Kfoury observes that they leave no space for non-sectarian parties and erect a barrier to introducing socioeconomic policies and other real issues into the electoral system. They also open the door to "massive external interference," low voter turnout, and "vote-rigging and vote-buying," all features of the June election, even more so than before. Thus in Beirut, home of more than half the population, less than a fourth of eligible voters could vote without returning to their usually remote districts of origin. The effect is that migrant workers and the poorer classes are effectively disenfranchised in "a form of extreme gerrymandering, Lebanese style," favoring the privileged and pro-Western classes.

In Iran, the electoral results issued by the Interior Ministry lacked credibility both by the manner in which they were released and by the figures themselves. An enormous popular protest followed, brutally suppressed by the armed forces of the ruling clerics. Perhaps Ahmadinejad might have won a majority if votes had been fairly counted, but it appears that the rulers were unwilling to take that chance. From the streets, correspondent Reese Erlich, who has had considerable experience with popular uprisings and bitter repression in US domains, writes that "It's a genuine Iranian mass movement made up of students, workers, women, and middle class folks" - and possibly much of the rural population. Eric Hooglund, a respected scholar who has studied rural Iran intensively, dismisses standard speculations about rural support for Ahmadinejad, describing "overwhelming" support for Mousavi in regions he has studied, and outrage over what the large majority there regard as a stolen election.

It is highly unlikely that the protest will damage the clerical-military regime in the short term, but as Erlich observes, it "is sowing the seeds for future struggles."

As in Lebanon, the electoral system itself violates basic rights. Candidates have to be approved by the ruling clerics, who can and do bar policies of which they disapprove. And though repression overall may not be as harsh as in the US-backed dictatorships of the region, it is ugly enough, and in June 2009, very visibly so.

One can argue that Iranian "guided democracy" has structural analogues in the US, where elections are largely bought, and candidates and programs are effectively "vetted" by concentrations of capital. A striking illustration is being played out right now. It is hardly controversial that the disastrous US health system is a high priority for the public, which, for a long time, has favored national health care, an option that has been kept off the agenda by private power. In a limited shift towards the public will, Congress is now debating whether to allow a public option to compete with insurers, a proposal with overwhelming popular support. The opposition, who regard themselves as free market advocates, charge that the proposal would be unfair to the private sector, which will be unable to compete with a more efficient public system. Though a bit odd, the argument is plausible. As economist Dean Baker points out, "We know that private insurers can't compete because we already had this experiment with the Medicare program. When private insurers had to compete on a level playing field with the traditional government-run plan they were almost driven from the market." Savings from a government program would be even greater if, as in other countries, the government were permitted to negotiate prices with pharmaceutical corporations, an option supported by 85% of the population but also not on the agenda. "Unless Congress creates a serious public plan," Baker writes, Americans "can expect to be hit with the largest tax increase in the history of the world -- all of it going into the pockets of the health care industry." That is a likely outcome, once again, in the American form of "guided democracy." And it is hardly the only example.

While our thoughts are turned to elections, we should not forget one recent authentically "free and fair" election in the Middle East region, in Palestine in January 2006, to which the US and its allies at once responded with harsh punishment for the population that voted "the wrong way." The pretexts offered were laughable, and the response caused scarcely a ripple on the flood of commentary on Washington's noble "efforts to spread democracy to the Muslim world," a feat that reveals impressive subordination to authority.

No less impressive is the readiness to agree that Israel is justified in imposing a harsh and destructive siege on Gaza, and attacking it with merciless violence using US equipment and diplomatic support, as it did last winter. There of course is a pretext: "the right to self-defense." The pretext has been almost universally accepted in the West, though Israeli actions are sometimes condemned as "disproportionate." The reaction is remarkable, because the pretext collapses on the most cursory inspection. The issue is the right TO USE FORCE in self-defense, and a state has that right only if it has exhausted peaceful means. In this case, Israel has simply refused to use the peaceful means that have been readily available. All of this has been amply discussed elsewhere, and it should be unnecessary to review the simple facts once again.

Once again relying on the impunity it receives as a US client, Israel brought the month of June 2009 to a close by enforcing the siege with a brazen act of hijacking. On June 30, the Israeli navy hijacked the Free Gaza movement boat "Spirit of Humanity" -- in international waters, according to those aboard -- and forced it to the Israeli port of Ashdod. The boat had left from Cyprus, where the cargo was inspected: it consisted of medicines, reconstruction supplies, and toys. The human rights workers aboard included Nobel Laureate Mairead Maguire and former congresswoman Cynthia McKinney, who was sent to Ramleh prison in Israel - apparently without a word from the Obama administration. The crime scarcely elicited a yawn - with some justice, one might argue, since Israel has been hijacking boats travelling between Cyprus and Lebanon for decades, kidnapping and sometimes killing passengers or sending them in Israeli prisons without charge where they join thousands of others, in some cases held for many years as hostages. So why even bother to report this latest outrage by a rogue state and its patron, for whom law is a theme for 4th of July speeches and a weapon against enemies?

Israel's hijacking is a far more extreme crime than anything carried out by Somalis driven to piracy by poverty and despair, and destruction of their fishing grounds by robbery and dumping of toxic wastes - not to speak of the destruction of their economy by a Bush counter-terror operation conceded to have been fraudulent, and a US-backed Ethiopian invasion. The Israeli hijacking is also in violation of a March 1988 international Convention on safety of maritime navigation to which the US is a party, hence required by the Convention to assist in enforcing it. Israel, however, is not a party - which, of course, in no way mitigates the crime or the obligation to enforce the Convention against violators. Israel's failure to join is particularly interesting, since the Convention was partially inspired by the hijacking of the Achille Lauro in 1985. That crime ranks high in Israel and the West among terrorist atrocities -- unlike Israel's US-backed bombing of Tunis a week earlier, killing 75 people, as usual with no credible pretext, but again tolerated under the grant of impunity for the US and its clients.

Possibly Israel chose not to join the Convention because of its regular practice of hijacking boats in international waters at that time. Also worth investigating in connection with the June 2009 hijacking is that since 2000, after the discovery of apparently substantial reserves of natural gas in Gaza's territorial waters by British Gas, Israel has been steadily forcing Gazan fishing boats towards shore, often violently, ruining an industry vital to Gaza's survival. At the same time, Israel has been entering into negotiations with BG to obtain gas from these sources, thus stealing the meager resources of the population it is mercilessly crushing.

The Western hemisphere also witnessed an election-related crime at the month's end. A military coup in Honduras ousted President Manuel Zelaya and expelled him to Costa Rica. As observed by economist Mark Weisbrot, an experienced analyst of Latin American affairs, the social structure of the coup is "a recurrent story in Latin America," pitting "a reform president who is supported by labor unions and social organizations against a mafia-like, drug-ridden, corrupt political elite who is accustomed to choosing not only the Supreme Court and the Congress, but also the president."

Mainstream commentary described the coup as an unfortunate return to the bad days of decades ago. But that is mistaken. This is the third military coup in the past decade, all conforming to the "recurrent story." The first, in Venezuela in 2002, was supported by the Bush administration, which, however, backed down after sharp Latin American condemnation and restoration of the elected government by a popular uprising. The second, in Haiti in 2004, was carried out by Haiti's traditional torturers, France and the US. The elected President, Jean-Bertrand Aristide, was spirited to Central Africa and kept at a safe distance from Haiti by the master of the hemisphere.

What is novel in the Honduras coup is that the US has not lent it support. Rather, the US joined with the Organization of American States in opposing the coup, though with a more reserved condemnation than others, and without any action, unlike the neighboring states and much of the rest of Latin America. Alone in the region, the US has not withdrawn its ambassador, as did France, Spain and Italy along with Latin American states.

It was reported that Washington had advance information about a possible coup, and tried to prevent it. It surpasses imagination that Washington did not have close knowledge of what was underway in Honduras, which is highly dependent on US aid, and whose military is armed, trained, and advised by Washington. Military relations have been particularly close since the 1980s, when Honduras was the base for Reagan's terrorist war against Nicaragua.

Whether this will play out as another chapter of the "recurrent story" remains to be seen, and will depend in no small measure on reactions within the United States.

Obama wants keep Bush policy on CIA briefings

Obama wants keep Bush policy on CIA briefings

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The Obama administration just lodged a strong objection to efforts by Democrats on Capitol Hill to remedy the problem of the CIA briefing too few members of Congress on top-secret subjects. Turns out Obama wants to keep Bush's policies.

Such secret briefings are what got House Speaker and San Francisco Rep. Nancy Pelosi in hot water just weeks ago, over what she was told when about torture. Typically, highly sensitive briefings are limited to the top Democratic and Republican leaders of Congress and the Intelligence Committees, known as the Gang of 8.

The problem as Democrats have described it is that the gang members are sworn to secrecy, making it impossible for any to mount legislative resistance to a White House policy or conduct effective oversight. That's the reason they said they were helpless when confronting former President Bush on torture, surveillance and the rest in the aftermath 9/11.

House Dems want to expand that briefing to more than 40 members. A bit unwieldy perhaps, but Obama's threatening a veto.

Here's what the White House says today in its "statement of administration policy" on the intelligence authorization bill, H.R. 2701, which the House will take up tomorrow. Such statements, known as SAP's, are always worded with great care:

"The Administration strongly objects to section 321, which would replace the current 'Gang of 8' notification procedures on covert activities. There is a long tradition spanning decades of comity between the branches regarding intelligence matters, and the Administration has emphasized the importance of providing timely and complete congressional notification, and using 'Gang of 8' limitations only to meet extraordinary circumstances affecting the vital interests of the United States.

"Unfortunately, section 321 undermines this fundamental compact between the Congress and the President as embodied in Title V of the National Security Act regarding the reporting of sensitive intelligence matters -- an arrangement that for decades has balanced congressional oversight responsibilities with the President's responsibility to protect sensitive national security information. Section 321 would run afoul of tradition by restricting an important established means by which the President protects the most sensitive intelligence activities that are carried out in the Nation's vital national security interests."

In other words, trust us.

U.S. Prepared to Spend Billions on Swine Flu Vaccine

Students 1st in Line For Flu Vaccine

Mass Campaign Against Pandemic May Begin in Fall

By David Brown and Spencer S. Hsu

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School-age children will be a key target population for a pandemic flu vaccine in the fall, and they may be vaccinated at school in a mass campaign not seen since the polio epidemics of the 1950s.

The federal government should get about 100 million doses of vaccine by mid-October, if the current production by five companies goes as planned. But enough vaccine for wide use by the 120 million people especially vulnerable to the newly emerged strain of H1N1 influenza virus will not be available until later in the fall.

Those were among the messages administration officials delivered to about 500 state, territorial, city and tribal health officials yesterday at a "flu summit" at the National Institutes of Health's Bethesda campus.

President Obama, speaking by audio link from the Group of Eight summit in L'Aquila, Italy, urged "complete ownership" of preparations for what he termed a "significant outbreak" of H1N1 flu in the next few months.

"We want to make sure that we are not promoting panic, but we are promoting vigilance and preparation," he said. He added that "the most important thing for us to do is to make sure that state and local officials prepare now to implement a vaccination program in the fall."

Children, pregnant women, adults with chronic illnesses, and health-care workers would probably be first in line for the vaccine, Health and Human Services Secretary Kathleen Sebelius told the gathering.

Education Secretary Arne Duncan said "we would absolutely welcome" the idea that the nation's schools be a principal venue for delivering the vaccine. He called them "natural sites" and said that "to open our doors and be part of the solution really makes sense."

In recent years, some public school systems have offered seasonal flu vaccine to students. But there have been no school-based mass campaigns since the late 1950s, when a generation of children lined up to get the Salk polio vaccine. How a 21st-century effort might be accomplished is an urgent priority of this summer's pandemic planning.

Vaccination campaigns, wherever they are held, would be mainly run by local governments.

To help them make specific plans, Sebelius said the federal government will provide an additional $350 million, to be disbursed by the end of this month. About $260 million will go to states and territories, with the remaining $90 million to hospitals to help preparations for a likely surge of flu patients in their emergency rooms and intensive care units.

The federal government has spent about $1 billion so far on pandemic flu vaccine, with about $7 billion available for further purchases and other pandemic countermeasures.

The new H1N1 virus, derived from two strains of influenza virus that circulates in pigs, emerged in late April in Mexico and Southern California. Still called "swine flu" by many people, it is now in every state. More than 1 million Americans have become ill from it, and 170 have died. Worldwide, it is on every inhabited continent and is responsible for at least 420 deaths.

Unlike seasonal flu, which typically strikes the elderly most severely, the new strain disproportionately attacks children and young adults. In New York City, of the 47 deaths that occurred through yesterday, 44 were people younger than 65. That trend, however, will pose unusual challenges to the American medical system, as many teenagers and young adults rarely visit doctors or clinics.

Patricia O'Neill, vice president of the Montgomery County Board of Education, said last night that she would have no objection to a school vaccination program if health officials deem that to be the best response.

As both a parent and as an official, she said, her chief concern is the health and safety of children. "No one wants their child sick and no one wants their child to die," she said.

Tanzi West, spokeswoman for Prince George's County schools, also supported the plan.

"Anything that protects students and families should be applauded," West said. She added that the school system already provides vaccinations for students through the county's health center.

A topic of much discussion at yesterday's summit was what circumstances should trigger the closing of schools.

Federal health officials in April gave conflicting guidance to schools with suspected cases, initially recommending that they close for 14 days before judging, based on additional information, that it was enough for infected persons to stay home.

New York had one of the earliest outbreaks this spring and closed 55 schools for as many as seven days, with none experiencing a resurgence of the illness when they reopened. Elsewhere, however, the benefit of closing schools was less apparent.

Meanwhile, the closures presented "tremendous hardships," O'Neill said, both in missed instruction and in added stress for affected families. One school in her district, Rockville High School, closed for three days in early May after one student contracted the flu. "You can't make up that time for students very easily," O'Neill said.

Moderating a panel yesterday that included the video appearances of the governors of Maine, Vermont, Connecticut, Wisconsin and Kansas, Maryland Gov. Martin O'Malley (D) said that he found less than helpful the federal guidance that governments "should consider" closing a school if flu becomes widespread. "We're all considering it," he said tartly.

It now seems clear that closing schools purely to limit the spread of the virus will not be recommended if the communicability becomes no more severe than it is now.

"One of the things I think we learned is that school closure as a means of decreasing transmission will only be effective if we have systems in place to support people doing the right thing," said Richard E. Besser, who was acting head of the Centers for Disease Control and Prevention for the first two months after the emergence of the new virus.

If parents are unable to stay at home with children and instead leave them in libraries, malls and community centers, where people tend to gather in large numbers, then "you're not really doing anything," he added.

Only if the virus became much more deadly would a strategy of closing schools to promote "social distancing" be strongly recommended, said Thomas R. Frieden, the new CDC director. He told the gathering that "our goals at the moment are fairly straightforward: reduce illness and minimize social disruption."

Why elderly people appear to be largely escaping this flu outbreak is unknown. There is some evidence that older adults may be at least partially immune to this H1N1 strain because of exposure to a distantly related strain earlier in life.

But Anne Schuchat, a CDC physician helping to lead its pandemic response, said that "we are not imagining we'll get 100 percent coverage of any one group" in a vaccination campaign.

Before any vaccine is given to the public, however, it must be proved safe and effective and the proper dose must be determined in tests this summer. People will probably need to get two doses at least several weeks apart to be protected.

The vaccine supply, which could ultimately total between 200 and 300 million doses, will be acquired by the federal government, which will then distribute it to states, territories, cities, tribal governments and federal agencies.

"We may recover some of the costs from private insurers," Sebelius said, but added, "This will be a public effort funded by the federal government."

State and local officials wanted the Obama administration to galvanize elected leaders around the country to prepare for the fall, and praised the participation yesterday of three Cabinet secretaries and five governors and the commitment of federal grants.

"It's one thing to say something. It was another thing to demonstrate it beyond words," said Paul E. Jarris, executive director of the Association of State and Territorial Health Officials, who expected many states now to hold their own summits.

AIG Is Preparing to Pay New Round of Bonuses

AIG Seeks Clearance For More Bonuses

$2.4 Million in Executive Payments Due Next Week

By Brady Dennis and David Cho

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American International Group is preparing to pay millions of dollars more in bonuses to several dozen top corporate executives after an earlier round of payments four months ago set off a national furor.

The troubled insurance giant has been pressing the federal government to bless the payments in hopes of shielding itself from renewed public outrage.

The request puts the administration's new compensation czar on the spot by seeking his opinion about bonuses that were promised long before he took his post.

AIG doesn't actually need the permission of Kenneth R. Feinberg, who President Obama appointed last month to oversee the compensation of top executives at seven firms that have received large federal bailouts. But officials at AIG, whose federal rescue package stands at $180 billion, have been reluctant to move forward without political cover from the government.

"Anytime we write a check to anybody" it is highly scrutinized, said an AIG official, who declined to speak on the record because the negotiations with Feinberg are ongoing. "We would want to feel comfortable that the government is comfortable with what we are doing."

The payments coming due next week include $2.4 million in bonuses for about 40 high-ranking executives at AIG, according to administration documents from earlier this year. Though the actual sum may have changed since then, the payments are much smaller than those that caused the upheaval in March.

Still, officials at AIG and within the government see them as a land mine.

Feinberg, who previously managed the government's efforts to compensate the families of those killed in the Sept. 11 attacks, has the power to determine salaries, bonuses and retirement packages for all executive officers and the 100 most highly paid employees at firms such as Citigroup, Bank of America, General Motors and AIG.

AIG's upcoming payments do not fall under Feinberg's official purview, as they involve bonuses delayed from 2008. Feinberg is charged with shaping only current and future compensation. As a result, some Treasury Department officials believe they are under no obligation to offer an advisory opinion in this case, which could leave AIG officials to decide the matter on their own, according to a person familiar with the talks.

In November, AIG's top seven executives, including Chairman Edward M. Liddy, agreed to forgo their bonuses through 2009. Then, in March, facing pressure from Treasury Secretary Timothy F. Geithner and other government officials, the company restructured its corporate bonus plans for the remaining top 50 executives. As part of this agreement, the senior executives were to receive half their 2008 bonuses -- which totaled $9.6 million -- in the spring, with another quarter disbursed on July 15 and the rest on Sept. 15. The last two payments would depend on whether the company made progress in revamping its business and paying back bailout money to taxpayers.

The exact range of the payments due this month to AIG executives was unclear in company disclosure filings.

AIG's proxy statement filed last month explains why AIG initially instituted the retention payments. The company stated that after the federal bailout began in September, "we needed to confront the fact that many of our employees, perhaps the majority, knew that their long-term future with us was limited, and our competitors knew that our key producers could perhaps be lured away. . . . Allowing departures to erode the strength of our businesses would have damaged our ability to repay taxpayers for their assistance."

The Treasury declined to comment specifically on the bonuses due this month. In a statement, a department spokesman said, "Companies will need to convince Mr. Feinberg that they have struck the right balance to discourage excessive risk taking and reward performance for their top executives. . . . We are not going to provide a running commentary on that process, but it's clear that Mr. Feinberg has broad authority to make sure that compensation at those firms strikes an appropriate balance."

Feinberg did not respond to an e-mail seeking comment.

The recent discussions between the company and Feinberg illustrate how politically sensitive the bonuses have become, both for AIG and for the Obama administration. No development in the government's bailout of financial firms has angered lawmakers and ordinary Americans more than the disclosure in mid-March that the global insurer was paying more than $165 million in retention bonuses. They were aimed at retaining 400 employees at AIG Financial Products, the troubled unit whose complex derivative contracts nearly wrecked the global insurance giant.

Ultimately, some of these employees vowed to return more than $50 million -- but not before the resulting firestorm threatened to undermine the government's effort to rescue the financial system. Lawmakers, including key allies of the administration, sponsored bills that would have levied harsh taxes on AIG and other bailout recipients offering bonuses to their executives.

Afraid of such congressional action, firms rushed to pay back federal aid, while others shied away from cooperating with the government in some of its bailout programs. Some initiatives had to be scaled down as a result.

The issue of bonuses, which had earlier been viewed by officials as minor relative to the larger problems in the financial system, began to consume the attention of top officials within the Treasury and Federal Reserve. Geithner attended long meetings to review payments, even those for low-ranking AIG executives.

Separately this week, a Citigroup analyst warned that AIG might be worthless to shareholders if or when it ever pays back the billions it owes the U.S. government.

"Our valuation includes a 70 percent chance that the equity at AIG is zero," Joshua Shanker of Citigroup wrote in a note to investors. He cites the continuing risks posed by the company's exotic derivative contracts, called credit-default swaps, and its sale of assets at low prices. AIG's stock plummeted by more than 25 percent yesterday.

Obama's Rollback Strategy and Boomerang Effect

Obama’s Rollback Strategy: Honduras, Iran, Pakistan, Afghanistan (and the Boomerang Effect)

by Prof James PetrasGo To Original

The recent events in Honduras and Iran, which pit democratically elected regimes against pro-US military and civilian actors intent on overthrowing them can best be understood as part of a larger White House strategy designed to rollback the gains achieved by opposition government and movements during the Bush years.

In a manner reminiscent of Ronald Reagan’s New Cold War policies, Obama has vastly increased the military budget, increased the number of combat troops, targeted new regions for military intervention and backed military coups in regions traditionally controlled by the US . However Obama’s rollback strategy occurs in a very different international and domestic context. Unlike Reagan, Obama faces a prolonged and profound recession/depression, massive fiscal and trade deficits, a declining role in the world economy and loss of political dominance in Latin America, the Middle East, East Asia and elsewhere. While Reagan faced off against a decaying Soviet Communist regime, Obama confronts surging world-wide opposition from a variety of independent secular, clerical, nationalist, liberal democratic and socialist electoral regimes and social movements anchored in local struggles.

Obama’s rollback strategy is evident from his very first pronouncements, promising to reassert US dominance (‘leadership’) in the Middle East, his projection of massive military power in Afghanistan and military expansion in Pakistan and the destabilization of regimes through deep intervention by proxies as in Iran and Honduras.

Obama’s pursuit of the rollback strategy operates a multi-track policy of overt military intervention, covert ‘civil society’ operations and soft-sell, seemingly benign diplomatic rhetoric, which relies heavily on mass media propaganda. Major ongoing events illustrate the rollback policies in action.

In Afghanistan, Obama has more than doubled the US military forces from 32,000 to 68,000. In the first week of July his military commanders launched the biggest single military offensive in decades in the southern Afghan province of Helmand to displace indigenous resistance and governance.

In Pakistan, the Obama-Clinton-Holbrooke regime successfully put maximum pressure on their newly installed client Zedari regime to launch a massive military offensive and rollback the long-standing influence of Islamic resistance forces in the Northwest frontier regions, while US drones and Special Forces commandoes routinely bomb and assault villages and local Pashtun leaders suspected of supporting the resistance.

In Iraq, the Obama regime engages in a farcical ploy, reconfiguring the urban map of Baghdad to include US military bases and operations and pass off the result as “retiring troops’ to their barracks”. Obama’s multi-billion-dollar investment in long-term, large-scale military infrastructure, including bases, airfields and compounds speaks to a ‘permanent’ imperial presence, not to his campaign promises of a programmed withdrawal. While ‘staging’ fixed election between US-certified client candidates is the norm in Iraq and Afghanistan where the presence of US troops guarantees a colonial victory, in Iran and Honduras, Washington resorts to covert operations to destabilize or overthrow incumbent Presidents who do not support Obama’s rollback policies.

The covert and not-so-invisible operation in Iran found expression in a failed electoral challenge followed by ‘mass street demonstrations’ centered on the claim that the electoral victory of the incumbent anti-imperialist President Mahmoud Ahmadinejad was a result of ‘electoral fraud’. Western mass media played a major role during the electoral campaign exclusively providing favorable coverage of the opposition and negative accounts of the incumbent regime. The mass media blanketed the ‘news’ with pro-demonstrator propaganda, selectively presenting coverage to de-legitimize the elections and elected officials, echoing the charges of ‘fraud’. The propaganda success of the US-orchestrated destabilization campaign even found an echo among broad sections of what passes for the US ‘left’ who ignored the massive, coordinated US financing of key Iranian groups and politicos engaged in the street protests. Neo-conservative, liberal and itinerant leftist ‘free-lance journalists’, like Reese Erlich, defended the destabilization effort from their own particular vantage point as ‘a popular democratic movement against electoral fraud.’

The right/left cheerleaders of US destabilization projects fail to address several key explanatory factors:

1. None, for example, discuss the fact that several weeks before the election a rigorous survey conducted by two US pollsters revealed an electoral outcome very near to the actual voting result, including in the ethnic provinces where the opposition claimed fraud.

2. None of the critics discussed the $400 million dollars allocated by the Bush Administration to finance regime change, domestic destabilization and cross border terror operations. Many of the students and ‘civil society’ NGO’s in the demonstrations received funding from overseas foundations and NGO’s – which in turn were funded by the US government.

3. The charge of electoral fraud was cooked up after the results of the vote count were announced. In the entire run-up to the election, especially when the opposition believed they would win the elections – neither the student protesters nor the Western mass media nor the freelance journalists claimed impending fraud. During the entire day of voting, with opposition party observers at each polling place, no claims of voter intimidation or fraud were noted by the media, international observers or left backers of the opposition. Opposition party observers were present to monitor the entire vote count and yet, with only rare exception, no claims of vote rigging were made at the time. In fact, with the exception of one dubious claim by free-lance journalist Reese Erlich, none of the world’s media claimed ballot box stuffing. And even Erlich’s claims were admittedly based on unsubstantiated ‘anecdotal accounts’ from anonymous sources among his contacts in the opposition.

4. During the first week of protests in Tehran, the US, EU and Israeli leaders did not question the validity of the election outcome. Instead, they condemned the regime’s repression of the protestors. Clearly their well-informed embassies and intelligence operative provided a more accurate and systematic assessment of the Iranian voter preferences than the propaganda spun by the Western mass media and the useful idiots among the Anglo-American left.

The US-backed electoral and street opposition in Iran was designed to push to the limits a destabilization campaign, with the intention of rolling back Iranian influence in the Middle East, undermining Tehran’s opposition to US military intervention in the Gulf, its occupation of Iraq and , above all, Iran’s challenge to Israel’s projection of military power in the region. Anti-Iran propaganda and policy making has been heavily influenced for years on a daily basis by the entire pro-Israel power configuration in the US. This includes the 51 Presidents of the Major America Jewish Organizations with over a million members and several thousand full-time functionaries, scores of editorial writers and commentators dominating the opinion pages of the influential Washington Post, the Wall Street Journal, the New York Times as well as the yellow tabloid press.

Obama’s policy of roll back of Iranian influence counted on a two-step process: Supporting a coalition of clerical dissidents, pro-Western liberals, dissident democrats and right-wing surrogates of the US. Once in office, Washington would push the dissident clerics toward alliances with their strategic allies among pro-Western liberals and rightists, who would then shift policy in accordance with US imperial and Israeli colonial interests by cutting off support for Syria, Hezbollah, Hamas, Venezuela, the Iraqi resistance and embrace the pro-US Saudi-Iraqi--Jordan-Egypt clients. In other words, Obama’s roll back policy is designed to relocate Iran to the pre-1979 political alignment.

Obama’s roll back of critical elected regimes to impose pliant clients found further expression in the recent military coup in Honduras. The use of the high command in the Honduras military and Washington’s long-standing ties with the local oligarchy, who control the Congress and Supreme Court, facilitated the process and obviated the need for direct US intervention—as was the case in other recent coup efforts. Unlike Haiti where the US marines intervened to oust democratically elected Bertrand Aristide, only a decade ago,and openly backed the failed coup against President Chavez in 2002, and more recently, funded the botched coup against the President-elect Evo Morales in September 2008, the circumstances of US involvement in Honduras were more discrete in order to allow for ‘credible denial’.

The ‘structural presence’ and motives of the US with regard to ousted President Zelaya are readily identifiable. Historically the US has trained and socialized almost the entire Honduran officer corps and maintained deep penetration at all senior levels through daily consultation and common strategic planning. Through its military base in Honduras, the Pentagon’s military intelligence operatives have intimate contacts to pursue policies as well as to keep track of all polical moves by all political actors. Because Honduras is so heavily colonized, it has served as an important base for US military intervention in the region: In 1954 the successful US-backed coup against the democratically elected Guatemalan President Jacobo Arbenz was launched from Honduras. In 1961 the US-orchestrated Cuban exile invasion of Cuba was launched from Honduras. From 1981-1989, the US financed and trained over 20,000 ‘Contra’ mercenaries in Honduras which comprised the army of death squads to attack the democratically elected Nicaraguan Sandinista government. During the first seven years of the Chavez government, Honduran regimes were staunchly allied with Washington against the populist Caracas regime.

Obviously no military coups ever occurred or could occur against any US puppet regime in Honduras. The key to the shift in US policy toward Honduras occurred in 2007-2008 when the Liberal President Zelaya decided to improved relations with Venezuela in order to secure generous petro-subsidies and foreign aid from Caracas. Subsequently Zelaya joined ‘Petro-Caribe’, a Venezuelan-organized Caribbean and Central American association to provide long-term, low-cost oil and gas to meet the energy needs of member countries. In more recent days, Zelaya joined ALBA, a regional integration organization sponsored by President Chavez to promote greater trade and investment among its member countries in opposition to the US-promoted regional free trade pact, known as ALCA.

Since Washington defined Venezuela as a threat and alternative to its hegemony in Latin America, Zelaya’s alignment with Chavez on economic issues and his criticism of US intervention turned him into a likely target for US coup planners eager to make Zelaya an example and concerned about their access to Honduran military bases as their traditional launching point for intervention in the region.

Washington wrongly assumed that a coup in a small Central American ‘banana republic’ (indeed the original banana republic) would not provoke any major outcry. They believed that Central American ‘roll-back’ would serve as a warning to other independent-minded regimes in the Caribbean and Central American region of what awaits them if they align with Venezuela.

The mechanics of the coup are well-known and public: The Honduran military seized President Zelaya and ‘exiled’ him to Costa Rica; the oligarchs appointed one of their own in Congress as the interim ‘President’ while their colleagues in the Supreme Court provided bogus legality.

Latin American governments from the left to the right condemned the coup and called for the re-instatement of the legally-elected President. President Obama and Secretary of State Clinton, not willing to disown their clients, condemned unspecified ‘violence’ and called for ‘negotiations’ between the powerful usurpers and the weakened exile President – a clear recognition of the legitimate role of the Honduran generals as interlocutors.

After the United Nations General Assembly condemned the coup and, along with the Organization of American States, demanded Zelay’s re-instatement, Obama and Secretary Clinton finally condemned the ousting of Zelaya but they refused to call it a ‘coup’, which according to US legislation would have automatically led to a complete suspension of their annual ($80 million) military and economic aid package to Honduras. While Zelaya met with all the Latin American heads of state, President Obama and Secretary Clinton turned him over to a lesser functionary in order not to weaken their allies in Honduran Junta. All the countries in the OAS withdrew their Ambassadors…except the US, whose embassy began to negotiate with the Junta to see how they might salvage the situation in which both were increasingly isolated – especially in the face of Honduras’ expulsion from the OAS.

Whether Zelaya eventually returns to office or whether the US-backed junta continues in office for an extended period of time, while Obama and Clinton sabotage his immediate return through prolonged negotiations, the key issue of the US-promoted ‘roll-back’ has been extremely costly diplomatically as well as politically.

The US backed coup in Honduras demonstrates that unlike the 1980’s when President Ronald Reagan invaded Grenada and President George Bush (Papa) invaded Panama, the situation and political profile of Latin America (and the rest of the world) has changed drastically. Back then the military and pro-US regimes in the region generally approved of US interventions and collaborated; a few protested mildly. Today the center-left and even rightist electoral regimes oppose military coups anywhere as a potential threat to their own futures.

Equally important, given the grave economic crisis and increasing social polarization, the last thing the incumbent regimes want is bloody domestic unrest, stimulated by crude US imperial interventions. Finally, the capitalist classes in Latin America’s center-left countries want stability because they can shift the balance of power via elections (as in the recent cases in Panama, Argentina) and pro-US military regimes can upset their growing trade ties with China, the Middle East and Venezuela/Bolivia.

Obama’s global roll-back strategy includes building offensive missile bases in Poland and the Czech Republic, not far from the Russian border. Concomitantly Obama is pushing hard to incorporate Ukraine and Georgia in NATO, which will increase US military pressure on Russia’s southern flank. Taking advantage of Russian President Dimitry Medvedev’s ‘malleability’ (in the footsteps of Mikail Gorbechev) Washington has secured free passage of US troops and arms through Russia to the Afghan front, Moscow’s approval for new sanction against Iran, and recognition and support for the US puppet regime in Baghdad. Russian defense officials will likely question Medvedev’s obsequious behavior as Obama moves ahead with his plans to station nuclear missiles 5 minutes from Moscow.

Roll-Back: Predictable Failures and the Boomerang Effect

Obama’s roll-back strategy is counting on a revival of right-wing mass politics to ‘legitimize’ the re-assertion of US dominance. In Argentina throughout 2008, hundreds of thousands of lower and upper-middle class demonstrators took to the streets in the interior of the country under the leadership of pro-US big landowners associations to destabilize the ‘center-left’ Fernandez regime. In Bolivia, hundreds of thousands of middle class students, business-people, landowners and NGO affiliates, centered in Santa Cruz and four other wealthy provinces and heavily funded by US Ambassador Goldberg, Agency for International Development and the National Endowment for Democracy took to the streets, wrecking havoc and murdering over 30 indigenous supporters of President Morales in an effort to oust him from power. Similar rightist mass demonstrations have taken place in Venezuela in the past and more recently in Honduras and Iran.

The notion that mass demonstrations of the well-to-do screaming ‘democracy’ gives legitimacy to US-backed destabilization efforts against its democratically-elected adversaries is an idea promulgated by cynical propagandists in the mass media and parroted by gullible ‘progressive’ free-lance journalists who have never understood the class basis of mass politics.

Obama’s Honduran coup and the US-funded destabilization effort in Iran have much in common. Both take place against electoral processes in which critics of US policies defeated pro-Washington social forces. Having lost the ‘electoral option’ Obama’s roll-back looks to extra-parliamentary ‘mass politics’ to legitimize elite effort to seize power: In Iran by dissident clerics and in Honduras by the generals and oligarchs.

In both Honduras and Iran, Washington’s foreign policy goals were the same: To roll-back regimes whose leaders rejected US tutelage. In Honduras, the coup serves as a ‘lesson’ to intimidate other Central American and Caribbean countries who exit from the US camp and join Venezuelan-led economic integration programs.Obama’s message is clear: such moves will result in US orchestrated sabotage and retaliation.

Through its backing of the military coup, Washington reminds all the countries of Latin America that the US still has the capability to implement its policies through the Latin American military elites, even as its own armed forces are tied down in wars and occupations in Asia and the Middle East and its economic presence is declining. Likewise in the Middle East, Obama’s destabilization of the Iranian regime is meant to intimidate Syria and other critics of US imperial policy and reassure Israel(and the Zionist power configuration in the US ) that Iran remains high on the US roll-back agenda.

Obama’s roll-back policies in many crucial ways follow in the steps of President Ronald Reagan (1981-89). Like Reagan, Obama’s presidency takes place in a time of US retreat, declining power and the advance of anti-imperialist politics. Reagan faced the aftermath of the US defeat in Indo-China, the successful spread of anti-colonial revolutions in Southern Africa (especially Angola and Mozambique), a successful democratic revolt in Afghanistan and a victorious social revolution in Nicaragua and major revolutionary movements in El Salvador and Guatemala. Like Obama today, Reagan set in motion a murderous military strategy of rolling-back these changes in order to undermine, destabilize and destroy the adversaries to US empire.

Obama faces a similar set of adversarial conditions in the current post-Bush period: - Democratic advances throughout Latin America with new regional integration projects excluding the US; defeats and stalemates in the Middle East and South Asia; a revived and strengthened Russia projecting power in the former Soviet republics; declining US influence over NATO military commitments , a loss of political, economic, military and diplomatic credibility as a result of the Wall Street-induced global economic depression and prolonged un-successful regional wars.

Contrary to Obama, Ronald Reagan’s roll-back took place under favorable circumstances. In Afghanistan Reagan secured the support of the entire conservative Muslim world and operated through the key Afghan feudal-tribal leaders against a Soviet-backed, urban-based reformist regime in Kabul. Obama is in the reverse position in Afghanistan. His military occupation is opposed by the vast majority of Afghans and most of the Muslim population in Asia.

Reagan’s roll-back in Central America, especially his Contra-mercenary invasion of Nicaragua, had the backing of Honduras and all the pro-US military dictatorships in Argentina, Chile, Bolivia and Brazil, as well as rightwing civilian government in the region. In contrast, Obama’s roll-back coup in Honduras and beyond face democratic electoral regimes throughout the region, an alliance of left nationalist regimes led by Venezuela and regional economic and diplomatic organizations staunchly opposed to any return to US domination and intervention. Obama’s roll-back strategy finds itself in total political isolation in the entire region.

Obama’s roll-back policies cannot wield the economic ‘Big Stick’ to force regimes in the Middle East and Asia to support his policies. Now there are alternative Asian markets, Chinese foreign investments, the deepening US depression and the disinvestment of overseas US banks and multi-nationals. Unlike Reagan, Obama cannot combine economic carrots with the military stick. Obama has to rely on the less effective and costly military option at a time when the rest of the world has no interest or will in projecting military power in regions of little economic significance or where they can attain market access via economic agreements.

Obama’s launch of the global roll-back strategy has boomeranged, even in its initial stage. In Afghanistan, the big troop build-up and the massive offensive into ‘Taliban’ strongholds has not led to any major military victories or even confrontations. The resistance has retired, blended in with the local population and will likely resort to prolonged decentralized, small-scale war of attrition designed to tie down several thousand troops in a sea of hostile Afghans, bleeding the US economy, increasing casualties, resolving nothing and eventually trying the patience of the US public now deeply immersed in job losses and rapidly declining living standards.

The coup, carried out by the US-backed Honduran military, has already re-affirmed US political and diplomatic isolation in the Hemisphere. The Obama regime is the only major country to retain an Ambassador in Honduras, the only country which refuses to regard the military take-over as a ‘coup’, and the only country to continue economic and military aid. Rather than establish an example of the US’ power to intimidate neighboring countries, the coup has strengthened the belief among all South and Central American countries that Washington is attempting to return to the ‘bad old days’ of pro-US military regimes, economic pillage and monopolized markets.

What Obama’s foreign policy advisers have failed to understand is that they can’t put their ‘Humpty Dumpty’ together again; they cannot return to the days of Reagan’s roll-back, Clinton’s unilateral bombing of Iraq,Yugoslavia ana Somalia and his pillage of Latin America.

No major region, alliance or country will follow the US in its armed colonial occupation in peripheral (Afghanistan/Pakistan) or even central (Iran) countries, even as they join the US in economic sanctions, propaganda wars and electoral destabilization efforts against Iran.

No Latin American country will tolerate another US military putsch against a democratically elected president, even national populist regimes which diverge from US economic and diplomatic policies. The great fear and loathing of the US-backed coup stems from the entire Latin American political class’ memory of the nightmare years of US backed military dictatorships.

Obama’s military offensive, his roll-back strategy to recover imperial power is accelerating the decline of the American Republic. His administration’s isolation is increasingly evidenced by his dependence on Israel-Firsters who occupy his Administration and the Congress as well as influential pro-Israel pundits in the mass media who identify roll-back with Israel’s own seizure of Palestinian land and military threats to Iran.

Roll-back has boomeranged: Instead of regaining the imperial presence, Obama has submerged the republic and, with it, the American people into greater misery and instability.