Wednesday, April 14, 2010

Fed Should Keep Emergency Lending Secret, Banks Vow to Tell Supreme Court

Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court

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The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.

Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.

The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”

Regardless of whether the Fed appeals, the Clearing House will take the next legal step by asking for a review by the full appellate court, Saltzman, 49, said at his office in New York. If the ruling is unfavorable, the bank group will petition the Supreme Court, he said.

Joined Lawsuit

The 157-year-old, New York-based Clearing House Payments Co., which processes transactions among banks, is owned by its 20 members. They include Citigroup Inc., Bank of New York Mellon Corp., Deutsche Bank AG, HSBC Holdings Plc, PNC Financial Services Group Inc., UBS AG, U.S. Bancorp and Wells Fargo & Co.

The Clearing House Association, a lobbying group with the same members, joined the lawsuit in September 2009, after an initial ruling against the central bank in federal court in Manhattan.

The Fed is “reviewing the decision and considering our options,” said Fed spokesman David Skidmore in Washington. He had no comment on Saltzman’s plans.

Attorneys face a May 3 deadline to file their appeals.

“We’ll wait to see the motion papers,” said Thomas Golden, attorney for Bloomberg who is a partner at New York- based Willkie Farr & Gallagher LLP. “The judges’ decision was well-reasoned, and we doubt further appeals will yield a different result.”

Bloomberg sued in November 2008 under the U.S. Freedom of Information Act, after the Fed denied access to records of four Fed lending programs and a loan the central bank made in connection with New York-based JPMorgan Chase’s acquisition of Bear Stearns Cos. in March 2008.

231 Pages

The central bank contends that 231 pages of daily reports summarizing lending activity, which were prepared by the Federal Reserve Bank of New York for the Fed Board of Governors in Washington, aren’t covered by the FOIA. The statute obliges federal agencies to make government documents available to the press and the public. The suit doesn’t seek money damages.

The Fed released lists on March 31 of assets it acquired in the 2008 bailout of Bear Stearns.

The New York Times Co., the Associated Press and Dow Jones & Co., publisher of the Wall Street Journal, are among media companies that have signed up as friends of the court in support of Bloomberg.

The Fed Board of Governors’ “refusal to disclose the names of borrowers renders public oversight of its actions impossible -- it prevents any assessment of the effectiveness of the Board’s actions and conceals any collusion, corruption, fraud or abuse that might have occurred,” the news organizations said in a letter to the appeals panel.

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).

Can the US Triumph in the Drug-Addicted War in Afghanistan?

Opium and the CIA: Can the US Triumph in the Drug-Addicted War in Afghanistan?

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Alfred McCoy’s important new article (TomDispatch, posted on Global Research, April 5, 2010) deserves to mobilize Congress for a serious revaluation of America’s ill-considered military venture in Afghanistan. The answer to the question he poses in his title – “Can Anyone Pacify the World's Number One Narco-State? – is amply shown by his impressive essay to be a resounding “No!” . . . not until there is fundamental change in the goals and strategies both of Washington and of Kabul.

He amply documents that

the Afghan state of Hamid Karzai is a corrupt narco-state, to which Afghans are forced to pay bribes each year $2.5 billion, a quarter of the nation’s economy;

the Afghan economy is a narco-economy: in 2007 Afghanistan produced 8,200 tons of opium, a remarkable 53% of the country's GDP and 93% of global heroin supply.



Map of Afghanistan showing major poppy fields and intensity of conflict 2007-08

military options for dealing with the problem are at best ineffective and at worst counterproductive: McCoy argues that the best hope lies in reconstructing the Afghan countryside until food crops become a viable alternative to opium, a process that could take ten or fifteen years, or longer. (I shall argue later for an interim solution: licensing Afghanistan with the International Narcotics Board to sell its opium legally.)

Perhaps McCoy’s most telling argument is that in Colombia cocaine at its peak represented only about 3 percent of the national economy, yet both the FARC guerillas and the right-wing death squads, both amply funded by drugs, still continue to flourish in that country. To simply eradicate drugs, without first preparing for a substitute Afghan agriculture, would impose intolerable strains on an already ravaged rural society whose only significant income flow at this time derives from opium. One has only to look at the collapse of the Taliban in 2001, after a draconian Taliban-led reduction in Afghan drug production (from 4600 tons to 185 tons) left the country a hollow shell.

On its face, McCoy’s arguments would appear to be incontrovertible, and should, in a rational society, lead to a serious debate followed by a major change in America’s current military policy. McCoy has presented his case with considerable tact and diplomacy, to facilitate such a result.

The CIA’s Historic Responsibility for Global Drug Trafficking

Unfortunately, there are important reasons why such a positive outcome is unlikely any time soon. There are many reasons for this, but among them are some unpleasant realities which McCoy has either avoided or downplayed in his otherwise brilliant essay, and which have to be confronted if we will ever begin to implement sensible strategies in Afghanistan.

The first reality is that the extent of CIA involvement in and responsibility for the global drug traffic is a topic off limits for serious questioning in policy circles, electoral campaigns, and the mainstream media. Those who have challenged this taboo, like the journalist Gary Webb, have often seen their careers destroyed in consequence.

Since Alfred McCoy has done more than anyone else to heighten public awareness of CIA responsibility for drug trafficking in American war zones, I feel awkward about suggesting that he downplays it in his recent essay. True, he acknowledges that “Opium first emerged as a key force in Afghan politics during the CIA covert war against the Soviets,” and he adds that “the CIA's covert war served as the catalyst that transformed the Afghan-Pakistan borderlands into the world's largest heroin producing region.”

But in a very strange sentence, McCoy suggests that the CIA was passively drawn into drug alliances in the course of combating Soviet forces in Afghanistan in the years 1979-88, whereas in fact the CIA clearly helped create them precisely to fight the Soviets:

In one of history's ironic accidents, the southern reach of communist China and the Soviet Union had coincided with Asia's opium zone along this same mountain rim, drawing the CIA into ambiguous alliances with the region's highland warlords.

There was no such “accident” in Afghanistan, where the first local drug lords on an international scale – Gulbuddin Hekmatyar and Abu Rasul Sayyaf – were in fact launched internationally as a result of massive and ill-advised assistance from the CIA, in conjunction with the governments of Pakistan and Saudi Arabia. While other local resistance forces were accorded second-class status, these two clients of Pakistan and Saudi Arabia, precisely because they lacked local support, pioneered the use of opium and heroin to build up their fighting power and financial resources.1 Both, moreover, became agents of salafist extremism, attacking the indigenous Sufi-influenced Islam of Afghanistan. And ultimately both became sponsors of al Qaeda.2

CIA involvement in the drug trade hardly began with its involvement in the Soviet-Afghan war. To a certain degree, the CIA’s responsibility for the present dominant role of Afghanistan in the global heroin traffic merely replicated what had happened earlier in Burma, Thailand, and Laos between the late 1940s and the 1970s. These countries also only became factors in the international drug traffic as a result of CIA assistance (after the French, in the case of Laos) to what would otherwise have been only local traffickers.

One cannot talk of “ironic accidents” here either. McCoy himself has shown how, in all of these countries, the CIA not only tolerated but assisted the growth of drug-financed anti-Communist assets, to offset the danger of Communist Chinese penetration into Southeast Asia. As in Afghanistan today CIA assistance helped turn the Golden Triangle, from the 1940s to the 1970s, into a leading source for the world’s opium.

In this same period the CIA recruited assets along the smuggling routes of the Asian opium traffic as well, in countries such as Turkey, Lebanon, Italy, France, Cuba, Honduras, and Mexico. These assets have included government officials like Manuel Noriega of Panama or Vladimiro Montesinos of Peru, often senior figures in CIA-assisted police and intelligence services. But they have also included insurrectionary movements, ranging from the Contras in Nicaragua in the 1980s to (according to Robert Baer and Seymour Hersh) the al Qaeda-linked Jundallah, operating today in Iran and Baluchistan.3


CIA map tracing opium traffic from Afghanistan to Europe, 1998. The CIA cite, updated in 2008 states “Most Southwest Asian heroin flows overland through Iran and Turkey to Europe via the Balkans.” But in fact drugs also flow through the states of the former Soviet Union, and through Pakistan and Dubai.

The Karzai Government, not the Taliban, Dominate the Afghan Dope Economy


Perhaps the best example of such CIA influence via drug traffickers today is in Afghanistan itself, where those accused of drug trafficking include President Karzai’s brother, Ahmed Wali Karzai (an active CIA asset), and Abdul Rashid Dostum (a former CIA asset).4 The drug corruption of the Afghan government must be attributed at least in part to the U.S. and CIA decision in 2001 to launch an invasion with the support of the Northern Alliance, a movement that Washington knew to be drug-corrupted.5

In this way the U.S. consciously recreated in Afghanistan the situation it had created earlier in Vietnam. There too (like Ahmed Wali Karzai a half century later) the president’s brother, Ngo dinh Nhu, used drugs to finance a private network that was used to rig an election for Ngo dinh Diem.6 Thomas H. Johnson, coordinator of anthropological research studies at the Naval Postgraduate School, has pointed out the unlikelihood of a counterinsurgency program succeeding when that program is in support of a local government that is flagrantly dysfunctional and corrupt.7

Thus I take issue with McCoy when he, echoing the mainstream U.S. media, depicts the Afghan drug economy as one dominated by the Taliban. (In McCoy’s words, “If the insurgents capture that illicit economy, as the Taliban have done, then the task becomes little short of insurmountable.”) The Taliban’s share of the Afghan opium economy is variously estimated from $90 to $400 million. But the U.N. Office on Drugs and Crime (UNODC) estimates that the total Afghan annual earnings from opium and heroin are in the order of from $2.8 to $3.4 billion.8

Clearly the Taliban have not “captured” this economy, of which the largest share by far is controlled by supporters of the Karzai government. In 2006 a report to the World Bank argued “that at the top level, around 25-30 key traffickers, the majority of them in southern Afghanistan, control major transactions and transfers, working closely with sponsors in top government and political positions.”9 In 2007 the London Daily Mail reported that "the four largest players in the heroin business are all senior members of the Afghan government."10

The American media have confronted neither this basic fact nor the way in which it has distorted America’s opium and war policies in Afghanistan. The Obama administration appears to have shifted away from the ill-advised eradication programs of the Bush era, which are certain to lose the hearts and minds of the peasantry. It has moved instead towards a policy of selective interdiction of the traffic, explicitly limited to attacks on drug traffickers who are supporting the insurgents.11

This policy may or may not be effective in weakening the Taliban. But to target what constitutes about a tenth of the total traffic will clearly never end Afghanistan’s current status as the world’s number one narco-state. Nor will it end the current world post-1980s heroin epidemic, which has created five million addicts in Pakistan, over two million addicts inside Russia, eight hundred thousand addicts in America, over fifteen million addicts in the world, and one million addicts inside Afghanistan itself. Nor will it end the current world post-1980s heroin epidemic, which has created five million addicts in Pakistan, over two million addicts inside Russia, eight hundred thousand addicts in America, over fifteen million addicts in the world, and one million addicts inside Afghanistan itself.

The Obama government’s policy of selective interdiction also helps explain its reluctance to consider the most reasonable and humane solution to the world’s Afghan heroin epidemic. This is the “poppy for medicine” initiative of the International Council on Security and Development (ICOS, formerly known as The Senlis Council): to establish a trial licensing scheme, allowing farmers to sell their opium for the production of much-needed essential medicines such as morphine and codeine.12

The proposal has received support from the European Parliament and in Canada; but it has come under heavy attack in the United States, chiefly on the grounds that it might well lead to an increase in opium production. It would however provide a short-term answer to the heroin epidemic that is devastating Europe and Russia – something not achieved by McCoy’s long-term alternative of crop substitution over ten or fifteen years, still less by the current Obama administration’s program of selective elimination of opium supplies.

An unspoken consequence of the “poppy for medicine” initiative would be to shrink the illicit drug proceeds that are helping to support the Karzai government. Whether for this reason, or simply because anything that smacks of legalizing drugs is a tabooed subject in Washington, the “poppy for medicine” initiative is unlikely to be endorsed by the Obama administration.

Afghan Heroin and the CIA’s Global Drug Connection

There is another important paragraph where McCoy, I think misleadingly, focuses attention on Afghanistan, rather than America itself, as the locus of the problem:

At a drug conference in Kabul this month, the head of Russia's Federal Narcotics Service estimated the value of Afghanistan's current opium crop at $65 billion. Only $500 million of that vast sum goes to Afghanistan's farmers, $300 million to the Taliban guerrillas, and the $64 billion balance "to the drug mafia," leaving ample funds to corrupt the Karzai government (emphasis added) in a nation whose total GDP is only $10 billion.

What this paragraph omits is the pertinent fact that, according to the U.N. Office on Drugs and Crime, only 5 or 6 percent of that $65 billion, or from $2.8 to $3.4 billion, stays inside Afghanistan itself.13 An estimated 80 percent of the earnings from the drug trade are derived from the countries of consumption – in this case, Russia, Europe, and America. Thus we should not think for a moment that the only government corrupted by the Afghan drug trade is the country of origin. Everywhere the traffic has become substantial, even if only in transit, it has survived through protection, which in other words means corruption.

There is no evidence to suggest that drug money from the CIA’s trafficker assets fattened the financial accounts of the CIA itself, or of its officers. But the CIA profited indirectly from the drug traffic, and developed over the years a close relationship with it. The CIA’s off-the-books war in Laos was one extreme case where it fought a war, using as its chief assets the Royal Laotian Army of General Ouane Rattikone and the Hmong Army of General Vang Pao, which were, in large part, drug-financed. The CIA’s massive Afghanistan operation in the 1980s was another example of a war that was in part drug-financed.



Video shows the CIA’s Hmong Army led by Gen. Vang Pao in action in Laos

Protection for Drug Trafficking in America

Thus it is not surprising that the U.S. Government, following the lead of the CIA, has over the years become a protector of drug traffickers against criminal prosecution in this country. For example both the FBI and CIA intervened in 1981 to block the indictment (on stolen car charges) of the drug-trafficking Mexican intelligence czar Miguel Nazar Haro, claiming that Nazar was “an essential repeat essential contact for CIA station in Mexico City,” on matters of “terrorism, intelligence, and counterintelligence.”14 When Associate Attorney General Lowell Jensen refused to proceed with Nazar’s indictment, the San Diego U.S. Attorney, William Kennedy, publicly exposed his intervention. For this he was promptly fired.15

A recent spectacular example of CIA drug involvement was the case of the CIA’s Venezuelan asset General Ramon Guillén Davila. As I write in my forthcoming book, Fueling America's War Machine,16

General Ramon Guillén Davila, chief of a CIA-created anti-drug unit in Venezuela, was indicted in Miami for smuggling a ton of cocaine into the United States. According to the New York Times, "The CIA, over the objections of the Drug Enforcement Administration, approved the shipment of at least one ton of pure cocaine to Miami International Airport as a way of gathering information about the Colombian drug cartels." Time magazine reported that a single shipment amounted to 998 pounds, following earlier ones “totaling nearly 2,000 pounds.”17 Mike Wallace confirmed that “the CIA-national guard undercover operation quickly accumulated this cocaine, over a ton and a half that was smuggled from Colombia into Venezuela.”18 According to the Wall Street Journal, the total amount of drugs smuggled by Gen. Guillén may have been more than 22 tons.19

But the United States never asked for Guillén’s extradition from Venezuela to stand trial; and in 2007, when he was arrested in Venezuela for plotting to assassinate President Hugo Chavez, his indictment was still sealed in Miami.20 Meanwhile, CIA officer Mark McFarlin, whom DEA Chief Bonner had also wished to indict, was never indicted at all; he merely resigned.21

Nothing in short happened to the principals in this case, which probably only surfaced in the media because of the social unrest generated in the same period by Gary Webb’s stories in the San Jose Mercury about the CIA, Contras, and cocaine.

Banks and Drug Money Laundering

Other institutions with a direct stake in the international drug traffic include major banks, which make loans to countries like Colombia and Mexico knowing full well that drug flows will help underwrite those loans’ repayment. A number of our biggest banks, including Citibank, Bank of New York, and Bank of Boston, have been identified as money laundering conduits, yet never have faced penalties serious enough to change their behavior.22 In short, United States involvement in the international drug traffic links the CIA, major financial interests, and criminal interests in this country and abroad.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, has said that “Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis.” According to the London Observer, Costa:

...said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result... Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said.23

A striking example of drug clout in Washington was the influence exercised in the 1980s by the drug money-laundering Bank of Credit and Commerce International (BCCI). As I report in my book, among the

highly-placed recipients of largesse from BCCI, its owners, and its affiliates, were Ronald Reagan’s Treasury Secretary James Baker, who declined to investigate BCCI;24 and Democratic Senator Joseph Biden and Republican Senator Orrin Hatch, the ranking members of the Senate Judiciary Committee, which declined to investigate BCCI.25

In the end it was not Washington that first moved to terminate the banking activities in America of BCCI and its illegal U.S. subsidiaries; it was the determined activity of two outsiders -- Washington lawyer Jack Blum and Manhattan District Attorney Robert Morgenthau.26

Conclusion: The Source of the Global Drug problem is not Kabul, but Washington

I understand why McCoy, in his desire to change an ill-fated policy, is more decorous than I am in acknowledging the extent to which powerful American institutions—government, intelligence and finance—and not just the Karzai government, have been corrupted by the pervasive international drug traffic. But I believe that his tactfulness will prove counter-productive. The biggest source of the global drug problem is not in Kabul, but in Washington. To change this scandal will require the airing of facts which McCoy, in this essay, is reluctant to address.

In his magisterial work, The Politics of Heroin, McCoy tells the story of Carter’s White House drug advisor David Musto. In 1980 Musto told the White House Strategy Council on Drug Abuse that “we were going into Afghanistan to support the opium growers in their rebellion against the Soviets. Shouldn’t we try to avoid what we had done in Laos?”27 Denied access by the CIA to data to which he was legally entitled, Musto took his concerns public in May 1980, noting in a New York Times op-ed that Golden Crescent heroin was already (and for the first time) causing a medical crisis in New York. And he warned, presciently, that “this crisis is bound to worsen.”28

Musto hoped that he could achieve a change of policy by going public with a sensible warning about a disastrous drug-assisted adventure in Afghanistan. But his wise words were powerless against the relentless determination of what I have called the U.S. war machine in our government and political economy. I fear that McCoy’s sensible message, by being decorous precisely where it is now necessary to be outspoken, will suffer the same fate.

Peter Dale Scott, a former Canadian diplomat and English Professor at the University of California, Berkeley, is the author of Drugs Oil and War, The Road to 9/11, and The War Conspiracy: JFK, 9/11, and the Deep Politics of War. His book, Fueling America's War Machine: Deep Politics and the CIA’s Global Drug Connection is in press, due Fall 2010 from Rowman & Littlefield.

He wrote this article for The Asia-Pacific Journal.

Recommended citation: Peter Dale Scott, "Can the US Triumph in the Drug-Addicted War in Afghanistan? Opium, the CIA and the Karzai Administration" The Asia-Pacific Journal, 14-5-10, April 5, 2010.

See the following articles on related subjects:

Alfred W. McCoy, "Can Anyone Pacify the World's Number One Narco-State? The Opium Wars in Afghanistan."

Peter Dale Scott, America’s Afghanistan: The National Security and a Heroin-Ravaged State

Peter Dale Scott, Martial Law, the Financial Bailout, and the Afghan and Iraq Wars

Jeremy Kuzmarov, American Police Training and Political Violence: From the Philippines Conquest to the Killing Fields of Afghanistan and Iraq

MK Bhadrakumar, Afghanistan, Iran and US-Russian Conflict

Peter Van Agtmael, All You Need is Heroin: U.S. Troops in Their Own Hand

Notes

1 Eventually the United States and its allies gave Hekmatyar, who for a time became arguably the world’s leading drug trafficker, more than $1 billion in armaments. This was more than any other CIA client has ever received, before or since.
2 Scott, The Road to 9/11, 74-75: “Khalid Shaikh Mohammed, said by the 911 Commission to have been the true author of the 9/11 plot, first conceived of it when he was with Abdul Sayyaf, a leader with whom bin Laden was still at odds [9/11 Commission Report, 145-50]. Meanwhile several of the men convicted of blowing up the World Trade Center in 1993, and the subsequent New York “day of terror” plot in 1995, had trained, fought with, or raised money for, Gulbuddin Hekmatyar. [Tim Weiner, “Blowback from the Afghan Battlefield,” New York Times, March 13, 1994].
3 Seymour Hersh, New Yorker, July 7, 2008
4 New York Times, October 27, 2009.
5 Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001 (New York: Penguin Press, 2004), 536. At the start of the U.S. offensive in 2001, according to Ahmed Rashid, “The Pentagon had a list of twenty-five or more drug labs and warehouses in Afghanistan but refused to bomb them because some belonged to the CIA's new NA [Northern Alliance] allies” (Ahmed Rashid, Descent into Chaos: The United States and the Failure of Nation Building in Pakistan, Afghanistan, and Central Asia [New York: Viking, 2008], 320).
6 Stanley Karnow, Vietnam: A History (New York: Penguin, 1997), 239. Cf. New York Times, October 28, 2009.
7 Thomas H. Johnson and M. Chris Mason, “Refighting the Last War: Afghanistan and the Vietnam Template,” Military Review, November-December 2009, 1.
8 The alert reader will notice that even $3.4 billion is less than 53 percent of the $10 billion attributed in the previous paragraph to the total Afghan GDP. These estimates from diverse sources are not precise, and cannot be expected to jibe perfectly.
9 “Afghanistan: Drug Industry and Counter-Narcotics Policy,” Report to the World Bank, November 28, 2006, emphasis added.
10 London Daily Mail. July 21, 2007. In December 2009 Harper’s published a detailed essay on Colonel Abdul Razik, “the master of Spin Boldak,” a drug trafficker and Karzai ally whose rise was “abetted by a ring of crooked officials in Kabul and Kandahar as well as by overstretched NATO commanders who found his control over a key border town useful in their war against the Taliban” (Matthieu Aikins, “The Master of Spin Boldak,” Harper’s Magazine, December 2009).
11 James Risen, “U.S. to Hunt Down Afghan Lords Tied to Taliban,” New York Times, August 10, 2009: ”United States military commanders have told Congress that... only those [drug traffickers] providing support to the insurgency would be made targets.”
12 Corey Flintoff, “Combating Afghanistan's Opium Problem Through Legalization,” NPR, December 22, 2005.
13 CBS News April 1, 2010, http://www.cbsnews.com/stories/2010/04/01/world/main6353224.shtml.
14 Cables from Mexico City FBI Legal Attaché Gordon McGinley to Justice Department, in Scott and Marshall, Cocaine Politics, 36.
15 Scott, Deep Politics, 105; quoting from San Diego Union, 3/26/82.
16 Fueling America's War Machine: Deep Politics and the CIA’s Global Drug Connection (in press, due Fall 2010 from Rowman & Littlefield).
17 Time, November 29, 1993: “The shipments continued, however, until Guillen tried to send in 3,373 lbs. of cocaine at once. The DEA, watching closely, stopped it and pounced.” Cf. New York Times, November 23, 1996 (“one ton”).
18 CBS News Transcripts, 60 MINUTES, November 21, 1993.
19 Wall Stree Journal, November 22, 1996. I suspect that the CIA approved the import of cocaine less "as a way of gathering information" than as a way of affecting market share of the cocaine trade in the country of origin, Colombia. In the 1990s CIA and JSOC were involved in the elimination of Colombian drug pingpin Pablo Escobar, a feat achieved with the assistance of Colombia's Cali Cartel and the AUC terrorist death squad of Carlos Castaño. Peter Dale Scott, Drugs, Oil, and War, 86-88.
20 Chris Carlson, “Is The CIA Trying to Kill Venezuela's Hugo Chávez?” Global Research, April 19, 2007.
21 Douglas Valentine, The Strength of the Pack: The People, Politics and Espionage Intrigues that Shaped the DEA (Springfield, OR: TrineDay, 2009), 400; Time, November 23, 1993. McFarlin had worked with anti-guerrilla forces in El Salvador in the 1980's. The CIA station chief in Venezuela, Jim Campbell, also retired.
22 The Bank of Boston laundered as much as $2 million from the trafficker Gennaro Angiulo, and eventually paid a fine of $500,000 (New York Times, February 22, 1985; Eduardo Varela-Cid, Hidden Fortunes: Drug Money, Cartels and the Elite Banks [Sunny Isles Beach, FL: El Cid Editor, 1999]). Cf. Asad Ismi, “The Canadian Connection: Drugs, Money Laundering and Canadian Banks,” Asadismi.ws: “Ninety-one percent of the $197 billion spent on cocaine in the U.S. stays there, and American banks launder $100 billion of drug money every year. Those identified as money laundering conduits include the Bank of Boston, Republic National Bank of New York, Landmark First National Bank, Great American Bank, People's Liberty Bank and Trust Co. of Kentucky, and Riggs National Bank of Washington. Citibank helped Raul Salinas (the brother of former Mexican president Carlos Salinas) move millions of dollars out of Mexico into secret Swiss bank accounts under false names.”
23 Rajeev Syal, “Drug money saved banks in global crisis, claims UN advisor,” Observer, December 13, 2009.
24 Jonathan Beaty and S.C. Gwynne, The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI (New York: Random House, 1993), 357.
25 Peter Truell and Larry Gurwin, False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire (Boston: Houghton Mifflin, 1992), 373-77.
26 Truell and Gurwin, False Profits, 449.
27 Alfred W. McCoy, The Politics of Heroin (Chicago: Lawrence Hill Books/ Chicago Review Press, 2003), 461; citing interview with Dr. David Musto.
28 David Musto, New York Times, May 22, 1980; quoted in McCoy, Politics of Heroin, 462.

Mossad operation threatened against whistleblowing reporter

Mossad operation threatened against reporter

Whistleblowing Israeli journalist treated as fugitive felon

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An Israeli journalist who went into hiding after writing a series of reports showing lawbreaking approved by Israeli army commanders faces a lengthy jail term for espionage if caught, as Israeli security services warned at the weekend they would “remove the gloves” to track him down.

The Shin Bet, Israel’s secret police, said it was treating Uri Blau, a reporter with the liberal Haaretz daily newspaper who has gone underground in London, as a “fugitive felon” and that a warrant for his arrest had been issued.

Options being considered are an extradition request to the British authorities or, if that fails, a secret operation by Mossad, Israel’s spy agency, to smuggle him back, according to Maariv, a right-wing newspaper.

It was revealed yesterday that Mr Blau’s informant, Anat Kamm, 23, a former conscript soldier who copied hundreds of classified documents during her military service, had confessed shortly after her arrest in December to doing so to expose “war crimes”.

The Shin Bet claims that Mr Blau is holding hundreds of classified documents, including some reported to relate to Operation Cast Lead, Israel’s attack on Gaza in winter 2008 in which the army is widely believed to have violated the rules of war.

Other documents, the basis of a Haaretz investigation published in 2008, concern a meeting between the head of the army, Gabi Ashkenazi, and the Shin Bet in which it was agreed to ignore a court ruling and continue carrying out executions of Palestinian leaders in the occupied territories.

Yuval Diskin, head of the Shin Bet, who has said his organisation was previously “too sensitive with the investigation”, is now demanding that Mr Blau reveal his entire document archive and take a lie-detector test on his return to identify his sources, according to Haaretz. The newspaper and its lawyers have recommended that he remain in hiding to protect his informants.

Haaretz has also revealed that, in a highly unusual move shortly before Israel’s attack on Gaza, it agreed to pull a printed edition after the army demanded at the last minute that one of Mr Blau’s stories not be published. His report had already passed the military censor, which checks that articles do not endanger national security.

Lawyers and human rights groups fear that the army and Shin Bet are trying to silence investigative journalists and send a warning to other correspondents not to follow in Mr Blau’s path.

“We have a dangerous precedent here, whereby the handing over of material to an Israeli newspaper … is seen by the prosecutor’s office as equivalent to contact with a foreign agent,” said Eitan Lehman, Ms Kamm’s lawyer. “The very notion of presenting information to the Israeli public alone is taken as an intention to hurt national security.”

The Shin Bet’s determination to arrest Mr Blau was revealed after a blanket gag order was lifted late last week on Ms Kamm’s case. She has been under house arrest since December. She has admitted copying hundreds of classified documents while serving in the office of Brig Gen Yair Naveh, in charge of operations in the West Bank, between 2005 and 2007.

Under an agreement with the Shin Bet last year, Haaretz and Mr Blau handed over 50 documents and agreed to the destruction of Mr Blau’s computer.

Both sides accuse the other of subsequently reneging on the deal: the Shin Bet says Mr Blau secretly kept other documents copied by Ms Kamm that could be useful to Israel’s enemies; while Mr Blau says the Shin Bet used the returned documents to track down Ms Kamm, his source, after assurances that they would not do so.

Haaretz said Mr Blau fears that they will try to identify his other informants if he hands over his archive.

Mr Blau learnt of his predicament in December, while out of the country on holiday. He said a friend called to warn that the Shin Bet had broken into his home and ransacked it. He later learnt they had been monitoring his telephone, e-mail and computer for many months.

In a move that has baffled many observers, the Shin Bet revealed last week that Mr Blau was hiding in London, despite the threat that it would make him an easier target for other countries’ intelligence agencies.

Amir Mizroch, an analyst with the right-wing Jerusalem Post newspaper, noted that it was as if Israel’s security services were “saying to Syrian, Lebanese, Palestinian, Hizbullah and Iranian intelligence agents in London: ‘Yalla, be our guests, go get Uri Blau’.” He added that the real goal might be to flush out Mr Blau so that he would seek sanctuary at the Israeli embassy.

Ms Kamm is charged with espionage with intent to harm national security, the harshest indictment possible and one that could land in her jail for 25 years. Yesterday another of her lawyers, Avigdor Feldman, appealed to Mr Blau to return to Israel and give back the documents to help “minimise the affair”.

“The real question is whether this exceptionally heavy-handed approach is designed only to get back Kamm’s documents or go after Blau and his other sources,” said Jeff Halper, an Israeli analyst. “It may be that Kamm is the excuse the security services need to identify Blau’s circle of informants.”

Mr Blau has already published several stories, apparently based on Ms Kamm’s documents, showing that the army command approved policies that not only broke international law but also violated the rulings of Israel’s courts.

His reports have included revelations that senior commanders approved extra-judicial assassinations in the occupied territories that were almost certain to kill Palestinian bystanders; that, in violation of a commitment to the high court, the army issued orders to execute wanted Palestinians even if they could be safely captured; and that the defence ministry compiled a secret report showing that the great majority of settlements in the West Bank were illegal even under Israeli law.

Although the original stories date to 2008, the army issued a statement belatedly this week that Mr Blau’s reports were “outrageous and misleading”. No senior commanders have been charged over the army’s lawbreaking activities.

B’Tselem, an Israeli human rights group, said its research had shown that “in many cases soldiers have been conducting themselves in the territories as if they were on a hit mission, as opposed to arrest operations”.

It added that the authorities had “rushed to investigate the leak and chose to ignore the severe suspicions of blatant wrongdoings depicted in those documents”.

A group of senior journalists established a petition this week calling for Mr Blau to be spared a trial: “So far, the authorities have not prosecuted journalists for holding secret information, which most of us have had in one form or another. This policy by the prosecution reflects, in our view, an imbalance between journalistic freedom, the freedom of expression and the need for security.”


However, media coverage of the case in Israel has been largely hostile. Yuval Elbashan, a lawyer, wrote in Haaretz yesterday that Mr Blau’s fellow military reporters and analysts had in the past few days abandoned their colleague and proven “their loyalty to the [security] system as the lowliest of its servants”.

One, Yossi Yehoshua, a military correspondent with the country’s largest-circulation newspaper, Yedioth Aharonoth, who is said to have been approached by Ms Kamm before she turned to Mr Blau, is due to testify against her in her trial due next month.

Chat forums and talkback columns also suggest little sympathy among the Israeli public for either Ms Kamm or Mr Blau. Several Hebrew websites show pictures of Ms Kamm behind bars or next to a hangman’s noose.

A report on Israel National News, a news service for settlers, alleged that Ms Kamm had been under the influence of “rabidly left-wing“ professors at Tel Aviv University when she handed over the documents to the Haaretz reporter.

Report cites staggering level of US maternal mortality

Report cites staggering level of US maternal mortality

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Women in the US have a greater chance of dying from complications of pregnancy and childbirth than women in 40 other countries. A report from Amnesty International (AI), “Deadly Delivery: The Maternal Health Care Crisis in the USA,” shows that US maternal mortality ratios have soared in recent years, rising from 6.6 deaths per 100,000 lives births in 1987, to 13.3 deaths per live births in 2006.

The AI report says that “half of these deaths could be prevented if maternal health care were available, accessible and of good quality for all women in the USA.” Poverty and discrimination play a key role in denying women access to decent care related to pregnancy, delivery and in the days following birth, the report notes. So-called near-misses—severe pregnancy-related complications that nearly cause death—have also risen by an alarming 25 percent since 1998.

Deaths from pregnancy and childbirth-related complications in the US are five times more likely than in Greece, four times more likely than in Germany, and three times more likely than in Spain. These differences are likely even more severe, because only six states—Florida, Illinois, Massachusetts, New York, Pennsylvania and Washington—are legally bound to record maternal deaths.

Every year, one-third of all pregnant women in America, or some 1.7 million women, suffer from some sort of pregnancy-related complications. Although women are at risk of death for a whole host of reasons during pregnancy and childbirth, according to the Centers for Disease Control half of all maternal deaths are preventable either by proper prenatal and postnatal care or by adequate responses to warning signs by health care professionals.

The four most seen causes of maternal death in the US are embolism, a blood clot that blocks a major blood vessel (20 percent); hemorrhaging, severe bleeding (17 percent), pre-eclampsia and eclampsia, disorders associated with high blood pressure (16 percent); infection (13 percent); and cardiomyopathy, heart muscle disease (8 percent).

Major discriminatory factors blocking women from access to quality care include poverty, ethnicity and immigration status. African-American women are four times more likely than white women to die of childbirth-related complications; in high-risk pregnancies, they are 5.6 times more like to die.

The report notes: “Native American and Alaska Native woman are 3.6 times, African-American women 2.6 times and Latina women 2.5 times as likely as white women to receive late or no prenatal care.”

An average of 45,000 people die each year in America because they do not have health insurance. Millions of others are burdened by enormous medical bills and a disturbingly large proportion of bankruptcies, about 62 percent, are caused by the inability to pay medical bills. These are contributing factors to the poor state of maternal health in the US.

Some 42 percent of low-income women are covered by Medicaid, the government-run health care program for the poor. Under Obama’s health care proposals, about 16 million people will be added to the Medicaid rolls, further burdening states that are struggling to fund the program in the face of budget crises.

While the White House touts this increase in Medicaid coverage as an improvement in medical care for ordinary Americans, in reality it will result in substandard, inferior care for a new section of the population. Increasing numbers of doctors turn Medicaid patients away because they are not being paid by the states. Pregnant women in the Medicaid program also face specific problems.

The Amnesty International report quotes Jennie Joseph, a certified professional midwife from Florida, who relates an example of the bureaucratic hurdles facing women on Medicaid: “If you go to apply to the Medicaid system, you need a ‘proof of pregnancy’ letter, with the due date, the date of your last period, and the gestational age of the baby. Where do you get that kind of a letter?—a doctor. If you have no Medicaid, how are you going to get to the doctor to get that letter?’

Women insured through their employer, or who purchase their own coverage, also face difficulties obtaining quality care. Though insurance does cover half of all births, policies that omit maternal care are not a rarity and women that are already pregnant have a harder time finding any policies that will cover them because a pregnancy is considered a “pre-existing condition.” While the new health care legislation has restrictions on barring coverage for pre-existing conditions, insurers can be expected to try to get around this by raising premiums or by other maneuvers.

Poor women and women without insurance are far more likely to receive little or no pre-natal care. Twenty-five percent of women do not receive any prenatal care, making them three to four times more likely to die of complications during and after births. For high-risk pregnancies the rate is 5.3 times more likely.

By law, women in active labor cannot be turned away, regardless of their ability to pay. But after the labor is over and the mother returns home she may be billed for thousands of dollars, especially if she had a cesarean section.

Cesarean deliveries have increased by 71 percent from 1996 to 2007, rising from 797,119 to 1.367 million. The use of cesareans in the US is driven by many factors, including their profitability for doctors and hospitals and because they reduce an obstetrician’s chance of being sued for malpractice.

The AI report also notes that many women are not given a say in decisions concerning their medical care, and are not properly informed about the risks of interventions such as inducing labor or cesareans.

Larry Cox, executive director of Amnesty International USA, commented on the release of the “Deadly Delivery” report: “Good maternal care should not be considered a luxury available only to those who can access the best hospitals and the best doctors. Women should not die in the richest country on earth from preventable complications and emergencies.” The reality is that rising social inequality in the US, compounded by the deepening recession, have been translated into what can only be termed skyrocketing rates of maternal mortality.

Rachel Ward, one of the authors of the Amnesty International report, also stressed that the new health care legislation would not address this crisis in maternal care.“Reform is primarily focused on health care coverage and reducing health care costs,” she said, “and even optimistic estimates predict that any proposal on the table will still leave millions without access to affordable care.” Ward also said the legislation “does not address discrimination, systemic failures and the lack of government accountability documented in Amnesty International’s report.”

Thai government shaky as mass protests continue

Thai government shaky as mass protests continue

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Following Saturday’s deadly street battles on the streets of Bangkok, the political crisis in Thailand has only deepened. The red-shirted protesters of the United Front for Democracy against Dictatorship (UDD) continue to occupy two sites in the capital. The troops have withdrawn to their barracks—for the time being—and desperate efforts are being made in ruling circles to find a way of ending the tense standoff.

UDD leaders have rejected talks and an offer yesterday by Deputy Prime Minister Suthep Thaugsuban to call elections within six months. The opposition is demanding that parliament be dissolved immediately and national elections held within 15 days. Calls have been made for Prime Minister Abhisit Vejjajiva to be tried over Saturday’s violent clashes that left 21 dead, including 4 soldiers, and more than 850 injured.

A further confrontation is possible today as anti-government protesters hold a rally outside the headquarters of the 11th Infantry Regiment where Abhisit is holed up and conducts his cabinet meetings. UDD leader Nattawawut Saikua described today’s march on the army camp as “an offensive mobilisation”. Opposition protesters are ignoring the state of emergency declared by Abhisit last Wednesday after protesters surrounded the national parliament and a group broke through a security cordon to enter the building.

Abhisit’s position was further eroded on Monday when army commander General Anupong Paochinda suggested that the government would have to agree to early elections. “The best solution to this is to dissolve the House. We must return to politics to solve the problem. It must be ended by political means,” he said, adding: “I just want to see peace restored.”

General Anupong’s comment underscores the depth of the political turmoil, which has begun to take on the character of a class rebellion against the country’s traditional elites. Sections of the rural poor loyal to former prime minister Thaksin Shinawatra have been joined by layers of Bangkok’s urban poor and working class. The loyalty of the army’s lower ranks, who are drawn from the same social strata, is being questioned openly in the national and international press.

Media speculation is also rife about divisions within the military hierarchy over whether to launch an all-out crackdown to clear the streets of protesters. A nervous editorial in yesterday’s London-based Financial Times urged calm and compromise, urging the army “to resist any temptation to do what it has done too many times before: [to] resolve democratic strife through military intervention”.

Also on Monday, the Election Commission recommended that Abhisit’s Democrat Party, the country’s oldest, be dissolved by the country’s Constitutional Court over allegations of electoral malpractice involving a large donation from cement manufacturer TPI Polene. In a country where wide-scale electoral infringements are routine, the case is a convenient device for putting pressure on Abhisit and potentially for bringing down his government.

In December 2008, after months of anti-Thaksin protests, including the occupation of Bangkok’s two major airports, a similar Constitutional Court ruling dissolving the pro-Thaksin People Power Party (PPP) was used to bring down the government of Prime Minister Somchai Wongasawat. General Anupong was reportedly involved in pressuring former PPP allies and factions to back the installation of Abhisit and join a Democrat-led government.

Monday’s announcements by Anupong and the Election Commission are clear signs that the country’s traditional elites are withdrawing their support for Abhisit. At the same time, it is far from clear who would replace Abhisit and what form a new government would take. If new elections were held, the most likely winner would be the pro-Thaksin Puea Thai party—the successor to the dissolved PPP—leading to a new round of political unrest.

Chulalongkorn University lecturer Prudhisan Jumbala told Bloomberg.com: “Abhisit may resign or dissolve parliament, but that doesn’t necessarily get us anywhere. Nobody can implement the rule of law without the cooperation of society, and neither side trusts the authority of the state.”

After four years of bitter factional infighting in the country’s ruling elites, the key institutions of the state have been deeply compromised. The military, the courts, the state bureaucracy and the monarchy are all regarded as partisan among broad layers of the rural poor who support Thaksin and the UDD. The traditional elites backed the 2006 military coup that ousted Thaksin, and then supported the removal of two pro-Thaksin governments following the 2007 election, before finally installing Abhisit.

It is significant that there have been few calls to date in Thailand or internationally for King Bhumibol Adulyadej to intervene in the crisis. The long reigning monarch has been a lynchpin holding the state apparatus together for decades. Following the army’s crushing of pro-democracy protests in 1992, the king was able to impose a compromise on the military and its largely middle class opposition. Anti-royalist sentiment has been growing, however, because of what was seen as the monarchy’s support for the 2006 coup and anti-Thaksin protests in 2008.

Despite signs of shifting support, Abhisit has given no hint that he is prepared to stand down. On Monday, he struck a strident new note, blaming Saturday’s violence on “terrorists” who had to be separated from the genuine protestors. Speaking in Washington, Foreign Minister Kasit Piromya echoed the uncompromising line, comparing Thaksin to Hitler, Mussolini and Stalin and denouncing him as “a bloody terrorist”. Kasit repeated the offer of talks, but said the government would not be forced by protests to dissolve parliament.

These accusations of “terrorism” serve an obvious political purpose: to justify a further, more brutal assault by the security forces on anti-government protesters. The New Politics Party—the political arm of the Peoples Alliance for Democracy (PAD) that led the anti-Thaksin protests in 2006 and again in 2008—has called for the imposition of martial law, accusing Thaksin of trying to foment civil war. Given that a state of emergency is already in force in Bangkok and surrounding areas, PAD’s call can only be interpreted as a demand for a military crackdown.

Compounding the political crisis, Thai share prices plunged by 3.64 percent on Monday in response to Saturday’s violent clashes, sharply reversing their gains for the year. Sales by foreign investors exceeded purchases by 2.1 billion baht ($US65 million). The stock market is closed for three days as part of the country’s New Year celebrations, but the potential for further falls only adds to the urgency in ruling circles for some resolution to the crisis.

The protracted wrangling between pro- and anti-Thaksin factions of the ruling elite is the product of sharp differences over economic policy and competing networks of political patronage. The ongoing global economic crisis that erupted in 2007-08 has not only exacerbated factional brawling but compounded the social crisis facing broad layers of working people. The anxious reaction to Saturday’s clashes reflects deep concerns in ruling circles in Thailand and internationally that the protests could spiral out of control of the UDD opposition.

The issue facing workers and the rural poor is the construction of a political movement independent of all factions of the ruling class. For all of his posturing for “democracy”, the populist billionaire Thaksin was just as autocratic in office as his opponents. The country’s deepening social divide underscored the limited character of his handouts to the rural poor.

Mine disaster exposes the brutal reality of American capitalism

Mine disaster exposes the brutal reality of American capitalism

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In the nine days since a massive explosion at the Upper Big Branch mine in Montcoal, West Virginia claimed the lives of 29 miners, evidence has continued to accumulate demonstrating the criminality of the mine’s operator, Massey Energy, and the complicity of the federal and state agencies that allowed the mine to continue operating despite ample warnings of an impending disaster.

Four years ago, the deaths of 12 West Virginia miners at the Sago Mine and two others at Massey’s Aracoma mine prompted congressional hearings and pledges to overhaul safety procedures and demand greater accountability from coal operators. The needless deaths of 29 miners in the April 5 explosion—the deadliest mine disaster in four decades—show that the transition to a Democratic-controlled White House and Congress has changed nothing. Miners’ lives continue to be wantonly sacrificed to profit.

Last Friday, President Obama announced that the Mine Safety and Health Administration (MSHA)—headed by former United Mine Workers safety director Joe Main—would provide him with a preliminary report “on what went wrong and why it went wrong so badly, so that we can take the steps necessary to prevent such accidents in the future.”

Such an investigation—conducted by officials who routinely collaborate with and run interference for the coal companies—will be nothing but a whitewash. Those responsible for the miners’ deaths—Massey CEO Don Blankenship and other top executives—will not be held accountable, and they will be allowed to continue their deadly policies.

In his remarks, Obama quoted from a letter written by one of the miners killed in the blast, 25-year-old Josh Napper. The miner left the letter for his girlfriend before he left for work Monday morning, April 5. Obama cited the sentence: “If anything happens to me, I’ll be looking down from heaven to you all.”

Obama did not comment on what this letter shows about the deadly conditions under which the Upper Big Branch miners were forced to work. If Napper felt the need to write such a letter to his loved ones, he—like the other miners—was well aware that he was walking into a tinderbox.

Far from citing Napper’s letter to expose the responsibility of Massey for the young man’s death, Obama used it to promulgate the cynical propaganda of the government and the media about long-suffering miners who accept death and injury as an unavoidable aspect of life in the coalfields. Mining, the president said, is “a profession that’s not without risks and danger, and the workers and their families know that.”

The explosion at the Upper Big Branch mine, however, was not some inexplicable and unforeseen “act of God.” It was the result of deliberate decisions and actions by Massey executives and government regulators who were more concerned with production and profit than the lives of miners.

In an effort to conceal this fact, Obama claimed, “Their government and their employers know that they owe it to these families to do everything possible to ensure their safety when they go to work each day.”

The facts show that the exact opposite is the case. Both the government and Massey permitted operations at the Upper Big Branch Mine to continue despite repeated indications that explosive methane gas and coal dust were accumulating to unlawful and dangerous levels.

Just three days before the disaster, Josh Napper called his mother to report that the entire work crew had been sent home early because of bad ventilation. “I just knew that Josh in his heart knew that something was going to happen,” sa id the mother, who lost a son, a brother and a nephew in the blast.

Since 2009, MSHA officials have ordered the mine or parts of the mine to temporarily cease operations 61 times, including seven times this year. Last month alone, the mine received at least 50 safety violation citations, including at least three for failing to properly ventilate methane gas. Safety officials found that airflow in the mine was half what was needed to prevent the buildup of methane and coal dust.

The blatant disregard for safety coincided with the tripling of production at the mine last year and a cost-cutting drive by Massey at all of its pits, which included the layoff of 700 miners, wage and benefit cuts, and regular 12-hour shifts.

Despite the imminent dangers, MSHA took no action to close the mine. Instead, federal regulators went through the motions of inspecting the mine and issuing safety violation citations and fines, knowing full well that the company would appeal them.

The news media and several coal state politicians have attempted to portray Massey as a bad apple in an otherwise safe and conscientious industry. Democratic Senator John D. Rockefeller, for example, characterized Massey Energy as a “rogue” operator.

Massey and its CEO Don Blankenship are not aberrations. They are true representatives—perhaps more open than others—of the business model of American capitalism. The relations that prevail in the mines are a concentrated expression of class relations under the profit system—relations of ruthless exploitation of the majority by a small and fabulously wealthy minority, who are backed by all of the institutions of the state and official society.

While funneling trillions to Wall Street, the Obama administration has embarked on an offensive against the working class even more sweeping than that conducted by Reagan in the 1980s.

That decade saw a violent union-busting campaign against the coal miners, aimed at breaking the back of the most militant and class-conscious section of the American working class. It was spearheaded by what was then called AT Massey Coal and by Blankenship, with the backing of the Reagan administration and state and local politicians of both parties.

The key to the defeat of the Massey miners was the treachery of the United Mine Workers leadership, headed by President Richard Trumka (now head of the AFL-CIO), who refused to mobilize the miners nationally and left the Massey strikers isolated, until the UMW finally called off the strike.

Today, conditions in the Appalachian coalfields resemble those of a century ago. Miners have no organization to defend themselves against brutal exploitation and a government that is in the pockets of the corporations and Wall Street. Under these conditions, coal companies are free to knowingly carry out, with impunity, policies that mean death and injury to workers.

All those responsible for the deaths at the Upper Big Branch mine, beginning with Blankenship, should face criminal prosecution. This is a necessary step in a fundamental restructuring of the mining industry to guarantee the health and safety of miners, provide jobs at good wages and benefits for all who wish to work in the coalfields, and organize the industry to meet social needs, not private profit.

None of the will be carried out by appealing to the powers-that-be. Miners and the working class as a whole can defend their interests only insofar as they are organized as a class to fight the corporations and their bought-and-paid-for representatives in both big business parties. The carnage in the mines can be ended only if workers take the industry out of private hands and put it under the democratic and collective control of the working people themselves.

Massey Disaster Not Just Tragic, but Criminal

Massey Disaster Not Just Tragic, but Criminal

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Massey Energy runs the Upper Big Branch (UBB) mine in Montcoal, W.Va., where 29 miners were killed last week. The loss of life is tragic, but the UBB explosion is more than tragic; it is criminal. When corporations are guilty of crimes, however, they don’t go to prison, they don’t forfeit their freedom—they just get fined, which often amounts to a slap on the wrist, the cost of doing business. No one makes this clearer than the CEO of Massey Energy, Don Blankenship. He has been the bane of climate-change activists and mine safety advocates for years. This latest mine disaster, if nothing else, will surely bring needed attention to this poster boy for malevolent big business trampling on communities, the environment and workers’ rights.

Days after the Massey explosion, Blankenship admitted in a radio interview: “Violations are, you know, unfortunately, a normal part of the mining process ... there are violations at every coal mine in America. And UBB was a mine that had violations.” The Charleston (W.Va.) Gazette has consistently reported critically on Massey Energy and Blankenship, prompting him to attack its editors in a November 2008 speech, saying: “It is as great a pleasure to me to be criticized by the communists and the atheists of the Gazette ... would we be upset if Osama bin Laden were to be critical of us? I don’t think so.”

Initial speculation on the cause of the explosion is methane in the mine. The Massey UBB mine has received thousands of citations for violations, including many for failing to remove the methane with ventilation. Another cause may be the mine’s proximity to Massey mountaintop removal operations. Mountaintop removal involves the massive blasting away of mountaintops, providing access to seams of coal, but causing widespread destruction of the environment. The Wall Street Journal reported Monday that a West Virginia state investigation into the explosion will include possible impact of nearby mountaintop mining operations. Environmental Protection Agency Administrator Lisa Jackson issued new rules restricting mountaintop removal on April 1, just days before the Massey explosion. Massey is the principal target of a growing grass-roots campaign against mountaintop removal. Among those arrested at protests have been renowned climate scientist James Hansen, director of the NASA Goddard Institute for Space Studies, and actress Daryl Hannah.

Sixteen miners died in Massey mines between the years 2000 and 2007. Elvis Hatfield, 46, and Don Bragg, 33, were killed in January 2006 in the Aracoma mine fire. Their widows sued Massey Energy and Blankenship. At the trial, their lawyers presented a memo written by Blankenship months before the fatal fire, instructing his deep-mine superintendents to focus on extracting coal over safety projects: “If any of you have been asked by your group presidents, your supervisors, engineers or anyone else to do anything other than run coal (i.e. build overcasts, do construction jobs, or whatever), you need to ignore them and run coal. This memo is necessary only because we seem not to understand that the coal pays the bills.”

Coal pays the bills. And pays Blankenship’s salary, which, estimated by The Associated Press at $19.7 million, is the highest in the coal industry. Massey, who is a board member of the U.S. Chamber of Commerce, is a fierce opponent of organized labor, a relentless denier of climate change and a staunch opponent of regulation. He said of government regulators, last Labor Day at an anti-union rally, “The very idea that they care more about coal-miner safety than we do is as silly as global warming.”

Blankenship poured $3 million into the election campaign of a candidate for the West Virginia Supreme Court, in order to replace a sitting judge who he feared would rule against Massey in an appeal against a $50 million judgment. The candidate he backed, Brent Benjamin, won the seat and voted to overturn the judgment. (The U.S. Supreme Court overturned that decision, citing Blankenship’s funding of the election, and the case served as the basis of John Grisham’s 2008 legal thriller, “The Appeal.”)

Pension funds and other large institutional investors are demanding that Massey fire Blankenship. The last of the 29 bodies of the miners killed in the Massey mine have been recovered. Their deaths should not be counted by Don Blankenship as the cost of doing business, but, rather, should top his criminal indictment.

The Whistleblower They Ignored

The Whistleblower They Ignored

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There aren’t too many genuine heroes to come out of the banking disaster, but Armando Falcon is one of them. You have probably never heard of him, but his testimony Friday before the Financial Crisis Inquiry Commission, available on the commission’s website, is must reading for anyone trying to figure out why U.S. taxpayers had to bail out companies to the tune of hundreds of billions of dollars.

Falcon was the chief regulator attempting to bring order to the houses of Fannie Mae and Freddie Mac during the first four years of this decade, and had he been listened to, a significant part of the housing crisis could have been mitigated. Instead his agency was denied serious regulatory power by Democrats in Congress including liberals such as Reps. Barney Frank and Maxine Waters, both of whom assumed he was undermining public support for more affordable housing.

He wasn’t, and instead was attempting to call attention to the reckless bundling of risky mortgages in which the government-chartered agencies acted like the other too-big-to-fail behemoths that together almost wrecked the entire economy. It was those on the lower end of the income scale who had put their life savings into risky mortgages that were most hurt when the bubble burst.

This is a guy whom Republican congressmen and the Wall Street Journal editorial writers have lionized, and for once they got it right. At least the part about Fannie and Freddie being out of control and their applauding Falcon’s past efforts to rein in the greed of their top executives. Where they go wrong is when they attribute the company’s misbehavior to the alleged liberal do-gooderism of the mostly Democratic Party hacks that ran the enterprises. The reality is that concern for affordable housing goals was simply a convenient mask for unfettered greed.

Conservatives make much of those goals, which both Bill Clinton and George W. Bush endorsed, but objectives of this sort had nothing to do with the sordid behavior of the executives who ran the companies. Asked by the commission to testify on the impact of those goals, Falcon responded:

“Your letter also asked me about the impact of affordable housing goals on the enterprises’ financial problems. In my opinion, the goals were not the cause of the enterprises’ demise. The firms would not engage in any activity, goal fulfilling or otherwise, unless there was a profit to be made. Fannie and Freddie invested in subprime and Alt A mortgages in order to increase profits and regain market share. Any impact on meeting affordable housing goals was a byproduct of the activity.”

The problem with the so-called government-sponsored but essentially private institutions that the conservatives are so happy to vilify and that liberals feel the need to defend is that they represented the worst of both worlds. Although originally chartered by the government, they had morphed into super for-profit monstrosities run by executives whose huge bonuses depended on the price of the company stock. As Falcon put it in his testimony:

“Ultimately the companies were not unwitting victims of an economic down cycle or flawed products and services of theirs. Their failure was deeply rooted in a culture of arrogance and greed.”

In short, they behaved like the other financial conglomerates, but the government-sponsored housing enterprises were protected by powerful members of Congress and what turned out to be a strong guarantee that their bad paper would be covered by the taxpayers.

They do deserve considerable blame for the banking disaster that ensued, and while it is hardly the whole story, it gave the free-market conservatives a convenient target. But it also presents them with a contradiction that they refuse to confront. The housing enterprises failed not because they were do-gooder pubic entities but because they weren’t. Their top executives were driven by the same desire for outlandish profit that their counterparts at AIG and Citigroup had. As Falcon put it referring to then Fannie Mae’s CEO Franklin Raines:

“While all of this political power satisfied the egos of Fannie and Freddie executives, it ultimately served one primary purpose: the speedy accumulation of personal wealth by any means. … In the case of CEO Franklin Raines, he collected over $90 million in total compensation from 1998 to 2003. Of that amount, $52 million was directly tied to achieving earnings-per-share goals. However, the earnings goal turned out to be unachievable without breaking rules and hiding risks.”

It only adds insult to injury to blame the unfettered greed of folks like Raines, and his congressional allies who were lavishly attended to by those agencies, on a concern for the low-income homebuyers who were their main victims.

FEC commissioner faces disbarment complaint in DC court after

FEC commissioner faces disbarment complaint after Raw Story report

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The progressive non-profit network Velvet Revolution has filed a disciplinary complaint against Federal Election Commissioner Caroline Hunter with the DC Court of Appeals, asking that she be debarred for providing "misleading statements" under oath.

Last month, Raw Story's Brad Jacobson reported that when Hunter was serving as deputy counsel to the Republican National Committee in 2004, she submitted an affidavit in a court case claiming that "the RNC is not initiating, controlling, directing, or funding any programs of 'voter challenges' ... The RNC has not initiated any challenges to the absentee ballots in Ohio or in any other state." The statement was later questioned by the judge, who said her affidavit "belied the evidence" in the case.

The Velvet Revolution complaint, a copy of which was provided to Raw Story, charges that Hunter's affidavit may have been designed to be deliberately misleading and that "the case for Ms. Hunter's disbarment is clear and simple."

"In the final days of the 2004 presidential election," Jacobson's report explains, "the Democratic National Committee [had filed] an injunction against the Republican National Committee in New Jersey federal court, alleging its involvement in using lists of returned mail to challenge 35,000 newly registered Ohio voters. This tactic, also known as voter caging, is historically employed to suppress votes from minority and low-income citizens who tend to vote Democratic."

The judge in the case, Dickinson R. Debevoise, ultimately rejected Hunter's sworn testimony and found the RNC in violation of an earlier consent decree forbidding it to use "ballot security measures" such as caging.

"In granting the injunction," Jacobson writes, "[Judge] Debevoise specifically addresses Hunter's statement denying that the Party was involved in vote caging activities. He finds her sworn testimony -- made as a witness -- unsupported by the facts in the case. ... 'Miss Hunter's information and belief,' he concludes, 'is belied by the evidence developed during the brief period of discovery.'"

Legal experts Jacobson interviewed suggested that Hunter's testimony appeared to have been deliberately designed to mislead the court, which would amount to a breach of legal ethics. Velvet Revolution's filing levels the same charge, relying heavily on Jacobson's research and reporting.

"Caroline Hunter breached her legal duty and violated the D.C. Rules of Professional Conduct by giving misleading sworn testimony, belied by the facts, in the U.S. Federal Court in Newark, New Jersey," the complaint reads.

It continues, "RNC e-mails submitted as evidence in the case suggest Ms. Hunter’s involvement in discussions related to the illegal caging of voters, which would constitute a violation of the D.C. Rules of Professional Conduct. Additionally, while the careful wording of the affidavit may legally shield Ms. Hunter from a criminal charge of perjury, qualified experts agree that the misleading nature of her statement, belied by the facts in the case as documented in the court, merits disciplinary action, including disbarment."

When Hunter was nominated by then-President George W. Bush in 2008 to serve on the Federal Election Commission, she was confirmed by the Senate without any scrutiny of her 2004 affidavit or a close examination of her time on the Election Assistance Commission, on which she served just prior to the FEC.

Since Hunter's appointment to the FEC, she has displayed a pattern of highly partisan ideological decisions, according to election watchdog groups.

The Federal Election Commission's spokesperson declined requests for comment on Hunter's behalf for previous Raw Story reports.

The Velvet Revolution bar complaint can be read here.

Watch: Three police beat student to the ground, unprovoked

Video catches Maryland police beating unarmed student, unprovoked

Officers caught beating student on video had blamed injuries on their horses

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Three Maryland police officers were caught beating an unarmed student following post-basketball game revelry in a videotape released Monday.

The incident, recorded in part by another student Mar. 3 following a Maryland basketball victory, shows several officers in riot gear beating the student with batons. The officers deliver roughly a dozen blows as the student crumples to the ground.

John McKenna, 21, was subsequently charged with "felonies on suspicion of assaulting officers on horseback and their mounts," but prosecutors dropped charges Monday as the video was released.

"The video shows the charging documents were nothing more than a cover, a fairy tale they made up to cover for the officers' misconduct," Christopher A. Griffiths, a lawyer for the student, told the Washington Post. "The video shows gratuitous violence against a defenseless individual."

The Post notes that the beating "occurred March 3 near the university's College Park campus after the Maryland men's basketball team defeated Duke. After the game, students took to the streets to celebrate. Twenty-eight people were arrested or cited, sparking a debate between police and students over how and when it is appropriate to break up a group of revelers."

The video shows McKenna on the sidewalk as he skips and throws his arms in the air. He stops about five feet from an officer on horseback, the video shows. In the video, McKenna's arms appear to be in front of him, but he does not appear to touch the officer or the horse. His hands are empty.

McKenna backs up, then two county police riot officers rush toward him from the street, the video shows. The officers slam McKenna against a wall and beat him with their batons. McKenna crumples to the ground.

As McKenna falls, a third county police riot officer strikes his legs and torso with his baton. The video shows the officers striking an unresisting McKenna about the head, torso and legs -- more than a dozen blows in all.

Other riot police officers on horseback who are captured on tape don't intervene as the student is beaten to the ground.

In charging the student, police initially said McKenna and another student "provoked the beating" by attacking the mounted officers. The Post reports that the charging documents asserted that the horses, rather than the officers, had injured McKenna -- a claim impossible to defend once the video of the incident went public.

An ABC News affiliate reported Tuesday that one of the officers has been suspended and several others could be fired.

"Some of these characters ought to go to jail," McKenna's family said in a statement to ABC. "Some ought to merely be booted off the force, and the remainder should be properly trained to discover that force is not always necessary, and brutality is always wrong."

The Post has more details here.

This video is from The Washington Post, broadcast April 12, 2010.



How Much Oil Is Really Off the Atlantic Coast?

You Can’t Always Get What You Want

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Obama's decision to open the Atlantic Ocean to drilling may not yield the results everyone imagines.

President Obama's March 30 decision to open up vast tracts of the Atlantic Ocean to oil and natural-gas exploration triggered the predictable range of responses: drilling advocates, including Republican lawmakers, offered tepid approval, while environmentalists complained. But lost amid the political debates—did Obama secure conservative Democrats' support for energy legislation? Could Republicans still run on "Drill, Baby, Drill?"—was a question with more practical impact: What's down there?

We really have no idea. The entire East Coast has been off limits from all drilling-related activity since 1981. That's the last time any data was collected on the area, using seismic equipment that's outdated compared to today's advanced methods. More accurate data is likely to lead to more accurate drilling and fewer "dry wells" that don't produce oil. But it could also revise downward how much we think is out there. The Interior Department's Minerals Management Service (MMS) estimates there could be as much as 10 billion barrels of oil and natural gas in the mid- and south Atlantic. But that's only at a 5 percent level of confidence. Ask them what they're 95 percent confident of, and the estimate drops to fewer than 2 billion barrels, or about 100 days of oil at our current rate. So, not much. "We really don't know a lot about what's down there," Interior Secretary Ken Salazar admits. "It may be nothing, it may be a lot."

What's sure is that it'll be decades before we ever find out. The general consensus is that the Atlantic Ocean is not nearly as geologically complex as the Gulf of Mexico, where a mile-thick layer of salt has trapped billions of barrels of oil and gas. Companies have only begun tapping into those resources in the last few years, thanks to advances in deepwater drilling technology. Those advances may come in handy over the next couple decades as companies plumb the depths of the Atlantic, but only if there's oil down there. The oil lobby and its congressional allies reluctantly applauded Obama's move while railing against his decision to keep off limits the entire Pacific Coast, where there's thought to be considerably more oil and gas, 22 billion barrels by the rosiest of estimates. But energy companies may never have access to Pacific coastal waters. The 1969 oil spill off the coast of Santa Barbara launched the modern American environmental movement, and in the eyes of many, the area remains "too special" (Salazar's words) to touch.

The first true test of the new Obama oil plan will take place 50 miles off the coast of Virginia, in a 2.9 million-acre triangle of water that the state is anxious to see drilled. Starting with former governor (now Democratic National Committee chairman) Tim Kaine's administration in 2006, Virginia has aggressively worked to open up its coast to exploration and now stands first in line to hold a lease sale, where oil companies submit sealed bids on tracts based on what they think is down there. Virginia initially pushed for that to happen in 2011, but it's been pushed to 2012 since the Interior Department first has to conduct an environmental impact study. That will likely take a year or more and result in a 1,000-page document for Salazar to sign. Lawsuits from environmental groups could follow if they deem the report insufficient, which would hold things up even further. Whenever the report does go through, the lease sale will follow shortly thereafter.

What's unclear is whether oil companies will have time to commission seismic testing before the lease sale is done. An Interior official, speaking on background, says that it's "not likely" they will. Salazar echoes this: "[Companies] may have to go with whatever information is out there right now." This could seriously reduce the amount of money the lease sale generates, as companies aren't likely to shell out big bucks based on 30-year-old data. Typically, lease sales generate hundreds of millions in revenue, which in the Gulf of Mexico gets split between the federal government and the coastal states Louisiana, Mississippi, Texas, and Alabama. For example, a combined 4.5 million acres of water split into three separate lease sales between August 2008 and March 2009 netted $1.3 billion, 37.5 percent of which ($480 million) went to state coffers.

Virginia wants half of whatever oil companies pay to lease the waters off its coast. Virginia Republican Rep. Bob Goodlatte has made that a key demand of the energy legislation he introduced a week before Obama made his announcement. As of now, though, there is no revenue-sharing agreement in place for East Coast states, and Salazar has made it clear that they shouldn't expect one, a point he says he emphasized in a recent meeting with Virginia Gov. Bob McDonnell. There's speculation that any revenue-sharing deal would be tucked into a national energy bill to curry support for addressing climate change from Southern coastal states. Goodlatte says that any attempt to bury a revenue-sharing deal in a cap-and-trade bill "would be a major dealbreaker" for Virginia's support of developing its offshore resources. This sets up an intriguing game of chicken between the Obama administration and pro-drilling advocates in Virginia, including the state's two Democratic senators, Mark Warner and Jim Webb, who both oppose the cap-and-trade language included in the energy bill passed by the House last year. Depending on which one blinks, we might not see oil come out of the Virginia coast after all.