Sunday, June 20, 2010

How Halliburton is profiting from the Gulf oil spill

As oil firms grow, response may slow to crises like Gulf oil spill

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Shortly before the Deepwater Horizon blowout, Halliburton bought an oil spill prevention firm. The oil-services industry is consolidating, which is not necessarily good news for quality, experts say.

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Tim Probert (r.) of Halliburton is sworn in along with officials from BP and Transocean before May 11 Senate hearings on the Gulf oil spill.
(Tim Sloan/AFP/Newscom)

By Matt Rocheleau, Contributor
posted June 18, 2010 at 11:37 am EDT

Eleven days prior to the April 20 Deepwater Horizon blowout, Halliburton Co., the contractor in charge of cementing the rig's well, agreed to purchase a little-known company.

The firm, Boots and Coots, focuses on oil spill prevention and blowout response. Now, it is assisting with the relief well work – under contract to BP – to help stop the Gulf oil spill.

What appears to conspiracy theorists as more than a coincidence is nothing out of the ordinary, say oil-industry experts. Increasingly, oil-industry titans are buying up smaller companies that provide all manner of services.

IN PICTURES: The Gulf oil spill's impact on nature

But this trend is worrying in itself, the experts say. As companies grow and work both to drill wells and potentially clean up their own mistakes, the result can be unintentional but riskier decisionmaking over time due to a lack of focus – particularly in an industry that is poorly regulated.

Moreover, there is concern that – as the Gulf oil spill shows – big bureaucracies are not nimble enough in an emergency.

“Working on both sides of the fence” is not uncommon in the oil industry, says Robert Gramling, author of “Oil on the Edge: Offshore Development, Conflict, Gridlock."

But “it makes for a very complex decisionmaking environment that can become problematic,” he adds.

Creeping complacency

The concern is not so much about intentional negligence but creeping complacency.

“Nobody’s going to say, ‘Oh, don’t worry, we have a cleanup service, we’ll be all right if there’s a spill,’ ” says Hugh Gorman, author of “Redefining Efficiency: Pollution Control, Regulatory Mechanisms, and Technological Change in the US Petroleum Industry.”

But reassurance about how diversified the business’ services are can lead to relaxed decisionmaking over time, some suggest.

This can be exacerbated by the fact that the oil industry is “very politically powerful” and oil companies do not face the same strict regulatory and safety standards that, for example, airline companies do, says Mr. Gramling, a professor at the University of Louisiana, Lafayette. This can allow for big businesses within the industry and the industry as a whole to “become too cozy,” he adds.

Halliburton is among the most diversified oil-industry firms. In its $240 million purchase of Boots and Coots – which is still pending regulatory and shareholder approval – it sought to buy a company whose services are “designed to reduce the number and severity of critical events such as oil and gas well fires, blowouts, or other incidences due to loss of control at the well” through both preventive and emergency response services.

In recent years, “there’s a trend toward getting a broader set of offerings from larger companies,” says Douglas Sheridan, managing director of EnergyPoint Research, a market research firm in Houston that serves the oil and gas industry.

But his company’s own customer-satisfaction surveys suggest that bigger is not necessarily better. “There is a potential problem with companies becoming so large that they can’t provide the focus needed on specific services and on the execution of those services,” says Mr. Sheridan.

Smaller, more-focused service providers generally rate higher in satisfaction surveys, and a spill of this magnitude – which involved “major players” like BP, Transocean, and Halliburton – could lead customers to invest more in companies that have a narrower business approach, Sheridan adds.

Halliburton's reputation

For its part, Halliburton is known within the industry for maintaining its quality despite its growth. “Does Halliburton’s satisfaction suffer from it being a large and unwieldy company? Yes. But they’re doing a better job of providing quality service than some of their competitors,” Mr. Sheridan said.

Other experts worry more about the impact of size on a company’s ability to respond quickly and effectively to disaster.

“A company of [BP’s] size has to become a bureaucracy, and bureaucracies need stable environments. They’re like cement,” says Cathie Currie, a cognitive social psychologist at Adelphi University in Long Island, N.Y.

Though bureaucratically managed companies can work well in some industries where there is little chance of a major unexpected event, they can struggle in high-risk industries such as drilling for oil.

Says Ms. Currie: “[The business model] doesn’t work when you need to be innovative."

IN PICTURES: The Gulf oil spill's impact on nature

Napolitano: Internet Monitoring Needed to Fight Homegrown Terrorism

Napolitano: Internet Monitoring Needed to Fight Homegrown Terrorism

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WASHINGTON -- Fighting homegrown terrorism by monitoring Internet communications is a civil liberties trade-off the U.S. government must make to beef up national security, the nation's homeland security chief said Friday.

As terrorists increasingly recruit U.S. citizens, the government needs to constantly balance Americans' civil rights and privacy with the need to keep people safe, said Homeland Security Secretary Janet Napolitano.

But finding that balance has become more complex as homegrown terrorists have used the Internet to reach out to extremists abroad for inspiration and training. Those contacts have spurred a recent rash of U.S.-based terror plots and incidents.

"The First Amendment protects radical opinions, but we need the legal tools to do things like monitor the recruitment of terrorists via the Internet," Napolitano told a gathering of the American Constitution Society for Law and Policy.

Napolitano's comments suggest an effort by the Obama administration to reach out to its more liberal, Democratic constituencies to assuage fears that terrorist worries will lead to the erosion of civil rights.

The administration has faced a number of civil liberties and privacy challenges in recent months as it has tried to increase airport security by adding full-body scanners, or track suspected terrorists traveling into the United States from other countries.

"Her speech is sign of the maturing of the administration on this issue," said Stewart Baker, former undersecretary for policy with the Department of Homeland Security. "They now appreciate the risks and the trade-offs much more clearly than when they first arrived, and to their credit, they've adjusted their preconceptions."

Underscoring her comments are a number of recent terror attacks over the past year where legal U.S. residents such as Times Square bombing suspect Faisal Shahzad and accused Fort Hood, Texas, shooter Maj. Nidal Hasan, are believed to have been inspired by the Internet postings of violent Islamic extremists.

And the fact that these are U.S. citizens or legal residents raises many legal and constitutional questions.

Napolitano said it is wrong to believe that if security is embraced, liberty is sacrificed.

She added, "We can significantly advance security without having a deleterious impact on individual rights in most instances. At the same time, there are situations where trade-offs are inevitable."

As an example, she noted the struggle to use full-body scanners at airports caused worries that they would invade people's privacy.

The scanners are useful in identifying explosives or other nonmetal weapons that ordinary metal-detectors might miss -- such as the explosives that authorities said were successfully brought on board the Detroit-bound airliner on Christmas Day by Nigerian Umar Farouk Abdulmutallab. He is accused of trying to detonate a bomb hidden in his underwear, but the explosives failed, and only burned Abdulmutallab.

U.S. officials, said Napolitano, have worked to institute a number of restrictions on the scanners' use in order to minimize that. The scans cannot be saved or stored on the machines by the operator, and Transportation Security Agency workers can't have phones or cameras that could capture the scan when near the machine.

U.S., Israeli warships cross Suez Canal toward Red Sea

U.S., Israeli warships cross Suez Canal toward Red Sea

Egypt opposition angered at government for allowing the fleet of more than 12 ships to cross Egyptian manned waterway, Al-Quds Al-Arabi reports.

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More than twelve United States Naval warships and at least one Israeli ship crossed the Suez Canal towards the Red Sea on Friday, British Arabic Language newspaper Al-Quds Al-Arabi reported Saturday.

According to the report, thousands of Egyptian soldiers were deployed along the Suez Canal guarding the ships' passage, which included a U.S. aircraft carrier.

The Suez Canal is a strategic Egyptian waterway which connects between the Mediterranean Sea and the Red Sea.

According to eyewitnesses, the U.S. battleships were the largest to have crossed the Canal in many years, Al-Quds reported.

Egyptian opposition members have criticized the government for cooperating with the U.S. and Israeli forces and allowing the ships' passage through Egyptian territorial waters.

They said they viewed the event as Egyptian participation in an international scandal, and added that the opposition would not sit with its arms crossed while the country allowed a fleet of U.S. and Israeli military ships to cross.

Hyperinflation or Deflation? Dramatic Fiscal Austerity Measures: "Deficit Terrorists" Strike in the UK -- The USA is Next

Hyperinflation or Deflation? Dramatic Fiscal Austerity Measures: "Deficit Terrorists" Strike in the UK -- The USA is Next

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Last week, England’s new government said it would abandon the previous government’s stimulus program and introduce the austerity measures required to pay down its estimated $1 trillion in debts. That means cutting public spending, laying off workers, reducing consumption, and increasing unemployment and bankruptcies. It also means shrinking the money supply, since virtually all “money” today originates as loans or debt. Reducing the outstanding debt will reduce the amount of money available to pay workers and buy goods, precipitating depression and further economic pain.

The financial sector has sometimes been accused of shrinking the money supply intentionally, in order to increase the demand for its own products. Bankers are in the debt business, and if governments are allowed to create enough money to keep themselves and their constituents out of debt, lenders will be out of business. The central banks charged with maintaining the banking business therefore insist on a “stable currency” at all costs, even if it means slashing services, laying off workers, and soaring debt and interest burdens. For the financial business to continue to boom, governments must not be allowed to create money themselves, either by printing it outright or by borrowing it into existence from their own government-owned banks.

Today this financial goal has largely been achieved. In most countries, 95% or more of the money supply is created by banks as loans (or “credit”). The small portion issued by the government is usually created just to replace lost or worn out bills or coins, not to fund new government programs. Early in the twentieth century, about 30% of the British currency was issued by the government as pounds sterling or coins, versus only about 3% today. In the U.S., only coins are now issued by the government. Dollar bills (Federal Reserve Notes) are issued by the Federal Reserve, which is privately owned by a consortium of banks.

Banks advance the principal but not the interest necessary to pay off their loans; and since bank loans are now virtually the only source of new money in the economy, the interest can only come from additional debt. For the banks, that means business continues to boom; while for the rest of the economy, it means cutbacks, belt-tightening and austerity. Since more must always be paid back than was advanced as credit, however, the system is inherently unstable. When the debt bubble becomes too large to be sustained, a recession or depression is precipitated, wiping out a major portion of the debt and allowing the whole process to begin again. This is called the “business cycle,” and it causes markets to vacillate wildly, allowing the monied interests that triggered the cycle to pick up real estate and other assets very cheaply on the down-swing.

The financial sector, which controls the money supply and can easily capture the media, cajoles the populace into compliance by selling its agenda as a “balanced budget,” “fiscal responsibility,” and saving future generations from a massive debt burden by suffering austerity measures now. Bill Mitchell, Professor of Economics at the University of New Castle in Australia, calls this “deficit terrorism.” Bank-created debt becomes more important than schools, medical care or infrastructure. Rather than “providing for the general welfare,” the purpose of government becomes to maintain the value of the investments of the government’s creditors.

England Dons the Hair Shirt

England’s new coalition government has just bought into this agenda, imposing on itself the sort of fiscal austerity that the International Monetary Fund (IMF) has long imposed on Third World countries, and has more recently imposed on European countries, including Latvia, Iceland, Ireland and Greece. Where those countries were forced into compliance by their creditors, however, England has tightened the screws voluntarily, having succumbed to the argument that it must pay down its debts to maintain the market for its bonds.

Deficit hawks point ominously to Greece, which has been virtually squeezed out of the private bond market because nobody wants its bonds. Greece has been forced to borrow from the IMF and the European Monetary Union (EMU), which have imposed draconian austerity measures as conditions for the loans. Like a Third World country owing money in a foreign currency, Greece cannot print Euros or borrow them from its own central bank, since those alternatives are forbidden under EMU rules. In a desperate attempt to save the Euro, the European Central Bank recently bent the rules by buying Greek bonds on the secondary market rather than lending to the Greek government directly, but the ECB has said it would “sterilize” these purchases by withdrawing an equivalent amount of liquidity from the market, making the deal a wash. (More on that below.)

Greece is stuck in the debt trap, but the UK is not a member of the EMU. Although it belongs to the European Union, it still trades in its own national currency, which it has the power to issue directly or to borrow from its own central bank. Like all central banks, the Bank of England is a “lender of last resort,” which means it can create money on its books without borrowing first. The government owns the Bank of England, so loans from the bank to the government would effectively be interest-free; and as long as the Bank of England is available to buy the bonds that don’t get sold on the private market, there need be no fear of a collapse of the value of the UK’s bonds.

The “deficit terrorists,” however, will have none of this obvious solution, ostensibly because of the fear of “hyperinflation.” A June 9 guest post by “Cameroni” on Rick Ackerman’s financial website takes this position. Titled “Britain Becomes the First to Choose Deflation,” it begins:

“David Cameron’s new Government in England announced Tuesday that it will introduce austerity measures to begin paying down the estimated one trillion (U.S. value) in debts held by the British Government. . . . [T]hat being said, we have just received the signal to an end to global stimulus measures -- one that puts a nail in the coffin of the debate on whether or not Britain would ‘print’ her way out of the debt crisis. . . . This is actually a celebratory moment although it will not feel like it for most. . . . Debts will have to be paid. . . . [S]tandards of living will decline . . . [but] it is a better future than what a hyperinflation would bring us all.”

Hyperinflation or Deflation?

The dreaded threat of hyperinflation is invariably trotted out to defeat proposals to solve the budget crises of governments by simply issuing the necessary funds, whether as debt (bonds) or as currency. What the deficit terrorists generally fail to mention is that before an economy can be threatened with hyperinflation, it has to pass through simple inflation; and governments everywhere have failed to get to that stage today, although trying mightily. Cameroni observes:

“[G]overnments all over the globe have already tried stimulating their way out of the recent credit crisis and recession to little avail. They have attempted fruitlessly to generate even mild inflation despite huge stimulus efforts and pointless spending.”

In fact, the money supply has been shrinking at an alarming rate. In a May 26 article in The Financial Times titled “US Money Supply Plunges at 1930s Pace as Obama Eyes Fresh Stimulus,” Ambrose Evans-Pritchard writes:

“The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of institutional money market funds fell at a 37pc rate, the sharpest drop ever.

“’It’s frightening,’ said Professor Tim Congdon from International Monetary Research. ‘The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly,’ he said.”

Too much money can hardly have been pumped into an economy in which the money supply is shrinking. But Cameroni concludes that since the stimulus efforts have failed to put needed money back into the money supply, the stimulus program should be abandoned in favor of its diametrical opposite -- belt-tightening austerity. He admits that the result will be devastating:

“[I]t will mean a long, slow and deliberate winding down until solvency is within reach. It will mean cities, states and counties will go bankrupt and not be rescued. And it will be painful. Public spending will be cut. Consumption could decline precipitously. Unemployment numbers may skyrocket and bankruptcies will stun readers of daily blogs like this one. It will put the brakes on growth around the world. . . . The Dow will crash and there will be ripple effects across the European union and eventually the globe. . . . Aid programs to the Third world will be gutted, and I cannot yet imagine the consequences that will bring to the poorest people on earth.”

But it will be “worth it,” says Cameroni, because it beats the inevitable hyperinflationary alternative, which “is just too distressing to consider.”

Hyperinflation, however, is a bogus threat, and before we reject the stimulus idea, we might ask why these programs have failed. Perhaps because they have been stimulating the wrong sector of the economy, the non-producing financial middlemen who precipitated the crisis in the first place. Governments have tried to “reflate” their flagging economies by throwing budget-crippling sums at the banks, but the banks have not deigned to pass those funds on to businesses and consumers as loans. Instead, they have used the cheap funds to speculate, buy up smaller banks, or buy safe government bonds, collecting a tidy interest from the very taxpayers who provided them with this cheap bailout money. Indeed, banks are required by their business models to pursue those profits over risky loans. Like all private corporations, they are there not to serve the public interest but to make money for their shareholders.

Seeking Solutions

The alternative to throwing massive amounts of money at the banks is not to further starve and punish businesses and individuals but to feed some stimulus to them directly, with public projects that provide needed services while creating jobs. There are many successful precedents for this approach, including the public works programs of England, Canada, Australia and New Zealand in the 1930s, 1940s and 1950s, which were funded with government-issued money either borrowed from their central banks or printed directly. The Bank of England was nationalized in 1946 by a strong Labor government that funded the National Health Service, a national railway service, and many other cost-effective public programs that served the economy well for decades afterwards.

In Australia during the current crisis, a stimulus package in which a cash handout was given directly to the people has worked temporarily, with no negative growth (recession) for two quarters, and unemployment held at around 5%. The government, however, borrowed the extra money privately rather than issuing it publicly, out of a misguided fear of hyperinflation. Better would have been to give interest-free credit through its own government-owned central bank to individuals and businesses agreeing to invest the money productively.

The Chinese have done better, expanding their economy at over 9% throughout the crisis by creating extra money that was mainly invested in public infrastructure.

The EMU countries are trapped in a deadly pyramid scheme, because they have abandoned their sovereign currencies for a Euro controlled by the ECB. Their deficits can only be funded with more debt, which is interest-bearing, so more must always be paid back than was borrowed. The ECB could provide some relief by engaging in “quantitative easing” (creating new Euros), but it has insisted it would do so only with “sterilization” – taking as much money out of the system as it puts back in. The EMU model is mathematically unsustainable and doomed to fail unless it is modified in some way, either by returning economic sovereignty to its member countries, or by consolidating them into one country with one government.

A third possibility, suggested by Professor Randall Wray and Jan Kregel, would be to assign the ECB the role of “employer of last resort,” using “quantitative easing” to hire the unemployed at a basic wage.

A fourth possibility would be for member countries to set up publicly-owned “development banks” on the Chinese model. These banks could issue credit in Euros for public projects, creating jobs and expanding the money supply in the same way that private banks do every day when they make loans. Private banks today are limited in their loan-generating potential by the capital requirement, toxic assets cluttering their books, a lack of creditworthy borrowers, and a business model that puts shareholder profit over the public interest. Publicly-owned banks would have the assets of the state to draw on for capital, a clean set of books, a mandate to serve the public, and a creditworthy borrower in the form of the nation itself, backed by the power to tax.

Unlike the EMU countries, the governments of England, the United States, and other sovereign nations can still borrow from their own central banks, funding much-needed programs essentially interest-free. They can but they probably won’t, because they have been deceived into relinquishing that sovereign power to an overreaching financial sector bent on controlling the money systems of the world privately and autocratically. Professor Carroll Quigley, an insider groomed by the international bankers, revealed this plan in 1966, writing in Tragedy and Hope:

“[T]he powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.”

Just as the EMU appeared to be on the verge of achieving that goal, however, it has started to come apart at the seams. Sovereignty may yet prevail.

Owe Money? Be Careful, or You Might End Up in Jail

Owe Money? Be Careful, or You Might End Up in Jail

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Reports of mild-mannered Americans getting arrested for being in debt are starting to pop up in states across the country. All over the Net, we've been reading about these poor saps snatched off the street — right in front of their horrified children — by glowering cops and locked up just for missing a few credit card payments.

Right, but they're not. They can't. In this country, owing money is not a criminal offense. It is in Dubai, where nearly half of the prison population is behind bars for defaulting on bank loans. But in the United States, incarceration for debt was abolished in 1833, and now debt itself is a mere civil matter. Sure, collection agencies want you to think the FBI cares whether or not you pay that Nordstrom bill. But they risk losing their licenses for so much as implying this, thanks to the U.S. Fair Trade Commission's Fair Debt Collection Practices Act, in effect since 1966.

Read between the lines and you'll see that these debtors weren't arrested for being debtors but — in most cases — for missing court dates for negotiating their debts.

Incur debt and your creditor can call you, write you, hire a collection agency and finally sue you. At that point a subpoena, delivered via process server or registered mail, announces that you're now a defendant, your creditor a plaintiff. This subpoena lists a date and time at which you are ordered to appear before a judge in civil court "to disclose your assets and liabilities and determine how this defendant is going to pay this plaintiff," explains Will Lund, superintendent of Maine's Bureau of Consumer Credit Protection, which enforces the FDCA and licenses collection agencies.

"Attendance by the defendant is mandatory. To ensure that it's mandatory, a subpoena is involved. To not show up is not dissing the plaintiff. It's dissing the court," Lund says. "It's contempt of court, and that can lead to arrest."

Most debtors don't realize that ignoring the summons means crossing that line, exiting the stressful but safe realm of owing money and entering the stark realm of mugshots and body searches and jail-issued sandwiches eaten among robbers and arsonists. This transit happens when a judge signs a capias, a civil warrant for arrest on the basis of failure to appear in court.

"If you've got a capias against you for failure to appear, you could be arrested if you're stopped by the police," affirms Katherine Martell of Fairfax, Virginia-based K&M Law Group, which specializes in debt restructuring and debt recovery. "That's not the same as snatching people off the street for not paying debts."

The frequency of such arrests, and law-enforcement officers' eagerness to make them, vary from county to county and state to state, but given the severity of other crimes that cops have to deal with, this one is always low priority.

"It's not like a roundup where the police say, 'Hey, we're gonna go out and pick up all the debtors today," says attorney Marshall Meyers of Phoeniz, Arizona-based Weisberg & Meyers. "But if you get pulled over for a traffic ticket, say, and you've got a warrant for failure to appear in court, they can bring you in."

Such arrests shock arrestees and readers alike. Middle-aged patient-care advocate Joy Uhlmeyer's night in a Michigan holding cell was reported widely this week and spawned such headlines in the mainstream media as "A Return to Debtors' Prisons" and "In Jail for Being in Debt."

"The real story is that this is getting so much buzz while the coverage is so misleading," laments Maine's Lund, a lawyer himself. "These are unfortunate headlines because they blur the distinction in people's minds between civil and criminal matters." Lund admits that it's easy to jump to conclusions when the crucial missing link — that what started with a civil case led to a criminal act — is buried deep in stories and blog posts or omitted entirely.

Presenting an equivalent scenario, Lund imagines a speeding-ticket defendant "insulting the judge's ethnic background during a hearing. When that defendant gets arrested for contempt of court, would reporters write headlines saying that traffic violations land you in jail? You should not be afraid to go into court. No judge is going to make the consumer pay more than the consumer can afford to pay. Many debtors are on public assistance, and no judge wants to make impossible demands on them," Lund asserts. "It's quite common for judges to order installment payments of a certain amount every week, often a very small amount."

Filing for bankruptcy is another option.

That beats bunkbeds and barred windows. Nonetheless, ignoring a summons is seductively easy. It's made of paper, nearly weightless and so thin between the fingers that it wads quickly into a ball or folds into a little flat packet to be slipped behind a bookcase or stashed in a drawer. Oh, and it tears just like that. If no one's looking, it's as easy to discard as any junk mail.

This way, potentially, lies jail.

But by the time a subpoena arrives, the debtor has almost certainly already ignored the creditors' repeated previous attempts to make contact, much less to collect. Ducking these attempts becomes a lifestyle. Default itself becomes a default setting. We've all known at least one of these chronic avoiders: the wild-eyed, haunted creature whose creditors call several times a day, seven days a week, sometimes at 4am — but the phone is always off; those calls go directly to voicemail, where they stay.

That lifestyle — and those subpoenas — are growing ever more ubiquitous in a crashed economy, says Catherine Williams, vice president of financial literacy at the Chicago-based credit-counseling nonprofit Money Management International.

"Overuse of credit combines for a pretty toxic situation when other things start spinning out of control. Say three people at your workplace have been fired, so you're afraid of losing your job. Say an unexpected emergency comes up in which you need to use credit — but unfortunately you've already exhausted your resources.

"At the same time, you've been told ever since 9/11 that spending is patriotic, that you've got to travel and charge everything to support this economy, and that if you're not out there spending, you're not an American.

"There's a real lack of understanding of the credit system among the very consumers who use that system every day. These people aren't stupid or necessarily uneducated. They're creditworthy, which usually means that they have jobs," Williams says. "They just don't know about this subject."

Katherine Martell agrees.

"In this economy, the new debtor is a working person — usually one who earns way above the poverty level, sometimes as much as six figures. These are educated individuals. They aren't the sort of people you'd imagine as the stereotypical debtor. But the bills come and they say, 'I can't handle this,' so they ignore the calls and put aside whatever comes in the mail."

Fear is paralytic. And debt collectors are notoriously fearsome — which is why the FDCPA was created in the first place. One of Marshall Meyers' clients received a cell-phone message in which a debt collector warned her that if she didn't pay, he would cut off her ears and hang them around her neck. (In colonial America, bankruptcy laws allowed debtors to be nailed to pillories by their ears and to have those ears severed. Other punishments included branding and, of course, incarceration.)

"They say they're going to take away your disability payments. They'll say anything," Meyers sighs.

Martell agrees: "Those people are horrible. They're supposed to abide by the FDCPA, although these days I see more and more violations," as strapped creditors rely ever more on collection agencies, which lean ever harder on strapped debtors, who are struggling ever more futilely to make ends meet.

"People are getting these ridiculous harassing phone calls from collection agencies — calls that are full of lies and empty threats, and they don't know what their rights are. Fear does not improve the likelihood of debts actually getting collected, but it creates a lot of anxiety and potentially makes people avoid those calls and letters even more than they normally would."

Granted, outside the subpoena scenario, other debt-related situations can also lead to arrest. Nevada is unique in that failure to repay casino "markers" -- that is, zero-interest lines of credit offered to patrons -- is a felony that merits arrest and criminal prosecution. Even if you are not a Nevada resident and leave the state without having repaid your marker, you can be arrested elsewhere and extradited to Nevada to face prosecution. This law has led to numerous high-profile cases; for example, NFL player Ross Verba was arrested in Phoenix, Arizona last November after defaulting on debts owed to the Palms casino in Las Vegas. Former major-league pitcher Shawn Chacon was arrested in Greeley, Colorado last October after defaulting on debts incurred at Caesars Palace earlier that year.

Financial fraud, the deliberate use of funds not one's own, is a criminal offense, and you can be charged with financial fraud for bouncing checks or using someone's credit card — even a relative's, if they report you — without permission. A credit-card company can allege fraud when it has reason to believe that a cardholder has made charges which he or she never intended to repay. But because such acts are only crimes when committed with intent to defraud, charges in these cases are notoriously hard to prosecute, says Money Management International's Catherine Williams.

"It's very hard to prove that at the moment you wrote a bad check, you knew for certain that it was bad and that you didn't have the funds to cover it."

In China, conviction in such cases can carry a life sentence. Even what happened to Joy Uhlmeyer in Michigan is positively peachy compared to what befalls debtors in other countries to this day. A night in an American jail for keeping stuff you haven't paid for beats all the rest of your nights behind bars somewhere in remote Hunan Province, say, where prisoners are forced to weld toy cars in 10-hour shifts and aren't issued sweaters when it snows.

US Supreme Court refuses to hear Arar case

US Supreme Court refuses to hear Arar case

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On June 14, the US Supreme Court denied the request of Maher Arar to review the dismissal by a federal appellate court of his civil suit against former Attorney General John Ashcroft and other US government officials, who conspired in his “extraordinary rendition” from New York to Syria, in order that he could be systematically interrogated there by torture. The highest court in the land has thereby let stand as law the appellate court ruling that such conduct cannot be compensated or even litigated in US courts.

Arar, a telecommunications engineer, is a dual Canadian and Syrian citizen who emigrated to Canada as a teenager. In September 2002, Arar stopped at New York’s John F. Kennedy Airport to change planes on his return to Canada from a Tunisian vacation. US immigration officials detained Arar, acting on a false tip from Canadian police that he was an “Islamic extremist” suspected of being linked to Al Qaeda.

FBI agents interrogated Arar for two days at the airport, during which time Arar was chained and shackled, verbally abused and denied food. Arar emphatically denied any connection to terrorism generally or Al Qaeda specifically. He was then transferred to solitary confinement in a federal jail for three more days, where he was strip-searched, and denied repeated requests for a telephone call and legal representation.

The US Immigration and Naturalization Service then filed deportation proceedings against Arar, even though he had been merely en route to Ottawa. A family member contacted the Canadian consulate and arranged legal representation for Arar, who then briefly met with his lawyer once.

The deportation proceedings nevertheless went forward without Arar’s lawyer being present, because US officials lied to the lawyer about their time and location. The regional immigration director determined that Arar was a member of Al Qaeda. Despite Arar’s request to be sent to Canada when he feared he would be tortured, the immigration official signed an order authorizing Arar’s removal to Syria without any further inquiry before or review by an immigration judge.

Arar was in Syria for a year, imprisoned for the first 10 months in an underground cell located within Syrian Military Intelligence that Arar likened to a grave, measuring six feet long, seven feet high, and three feet wide.

The cell was damp and cold, contained little light, and was infested with rats. Cats urinated on Arar from above. He was allowed to bathe himself in cold water only once a week. The food provided was barely edible, so that Arar lost 40 pounds during his confinement.

During his first 12 days in Syrian detention, Arar was interrogated for 18 hours per day and was physically and psychologically tortured. He was beaten on his palms, hips and lower back with a two-inch-thick electric cable and on his stomach, face and the back of his neck by his captors’ fists.

Arar was placed in a room where he could hear the screams of other detainees being tortured and was told that he, too, would be placed in a spine-breaking “chair,” hung upside down in a “tire” for beatings, and subjected to electric shocks.

Arar was never charged with any crime and never received any judicial review of his detention. In October 2003, Syria released Arar to Canadian officials in Damascus. He returned to Ottawa the following day and was finally reunited with his family.

In January 2004, Arar filed a civil action for damages in federal court against former US Attorney General John Ashcroft, FBI Director Robert Mueller, the US secretary of homeland security, and senior immigration and FBI officials. Arar alleged that the conditions of his detention while in the United States, and his removal to Syria with defendants’ knowledge or intention that he would be detained and tortured there, violated his rights under the US Torture Victim Protection Act, as well as his right to substantive due process under the Fifth Amendment to the US Constitution.

Arar’s complaint expressly challenged the covert US policy of extraordinary rendition, the removal of “non-U.S. citizens detained in this country and elsewhere and suspected—reasonably or unreasonably—of terrorist activity to countries, including Syria, where interrogations under torture are routine…precisely because those countries can and do use methods of interrogation to obtain information from detainees that would not be morally acceptable or legal in the United States and other democracies.”

Such conduct, he alleged, violates the prohibition of Article 3 of the Convention Against Torture against “any state party to the Convention…expelling, returning or extraditing any person to another State where there are substantial grounds for believing that he would be in danger of being subjected to torture.”

In September 2006, a Canadian Government Commission of Inquiry issued three volumes of findings documenting Arar’s allegations and the complete absence of any link between him and Al Qaeda or terrorism. Canada’s prime minister formally apologized to Arar, who was paid just short of $10 million as compensation for his mistreatment.

In November 2009, an expanded 11-judge “en banc” panel of the US court of appeals in New York nevertheless dismissed Arar’s federal lawsuit on a divided 7-4 vote.

The appellate court ruled the Torture Victim Protection Act could not afford Arar a remedy because it covered only the actions of foreign, not US government officials. This ignores that the US officials conspired with their Syrian counterparts to interrogate and torture Arar, gave the Syrians the questions to ask and received all information extracted. As the dissenting judges wrote, US law has long recognized that conspiring with persons who violate a statute provides a basis for suit.

The appellate majority also refused to permit Arar to sue directly under the US Constitution, writing that “the judicial review of extraordinary rendition would offend the separation of powers and inhibit this country’s foreign policy,” in that “such a suit unavoidably influences government policy, probes government secrets, invades government interests, enmeshes government lawyers, and thereby elicits government funds for settlement.”

Moreover, in order for Arar’s claims to proceed, “he must probe deeply into the inner workings of the national security apparatus of at least three foreign countries, as well as that of the United States, in order to determine the basis for his alleged designation as an Al Qaeda affiliate and his removal to Syria.”

Of course the “inner workings” of these national security operations are hardly secret at all, having already been revealed in the 2006 Canadian Commission report. Their exposure would be a public service.

It is transparent that the court made these vague assertions of intrusive inquiry into government operations merely as a vehicle to cover up government misconduct in the “war on terror.” Suit for governmental violations of fundamental constitutional provisions concerning detention and physical mistreatment of prisoners always has the sort of effects identified by the appellate court, and, in theory, such suit has been permitted precisely in order to deter such egregious conduct in the future.

As the dissenting appellate judges correctly wrote, the ruling is tantamount to the judicial branch abdicating its constitutional role of reining in governmental intrusion upon such basic democratic rights. This, then, is the appellate decision that the US Supreme Court refused to take up and review on Monday.

At the time of the 2009 appellate court decision, Arar issued a statement that “this recent decision and decisions taken on other similar cases, prove that the court system in the United States has become more or less a tool that the executive branch can easily manipulate through unfounded allegations and fear mongering. If anything, this decision is a loss to all Americans and to the rule of law.”

Arar’s lead attorney, Georgetown law professor David Cole, then wrote, “This decision says that US officials can intentionally send a man to be tortured abroad, bar him from any access to the courts while doing so, and then avoid any legal accountability thereafter. It effectively places executive officials above the law, even when accused of a conscious conspiracy to torture.”

In response to the Supreme Court action this week, Arar said the decision “eliminates my last bit of hope in the judicial system of the United States. “When it comes to ‘national security’ matters the judicial system has willingly abandoned its sacred role of ensuring that no one is above the law.”

New York public schools under siege

New York public schools under siege

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New York City’s billionaire Mayor Michael Bloomberg recently reinstated his threat to lay off 4,400 teachers if Congress fails to rescind a $600 million cut in federal aid to the city. The layoffs would ax approximately 7 percent of the teaching staff in this, the largest school district in the country.

Bloomberg had previously stated that instead of layoffs he was willing to freeze teachers’ wages for two years. Now, in the face of reduced federal funding, he apparently is prepared to both cut jobs and freeze wages. The failure of the United Federation of Teachers (UFT) to fight for a new contract since the last one expired October 31 has already left teachers with no wage increase for two years.

Bloomberg’s Chancellor of schools, Joel Klein, still plans to spend $5 million for the New Teacher project to recruit teachers during a hiring freeze and with possible layoffs. He also added a half million dollars to the Department of Education (DOE) management payroll, with central staff having increased at the DOE by 30 percent from 2001 to 2010, to 2,267.

The attack on teachers’ jobs and wages is part of a multi-sided assault on public education that is being carried out in New York City and New York State as a whole, with the full collaboration of the Democratic Party and the teachers’ union.

New York City’s United Federation of Teachers (UFT) and the New York State United Teachers (NYSUT) recently came to an agreement with the State Education Department (SED) that will allow the evaluation of public school teachers to be based heavily on the test scores of their students.This agreement, along with acquiesence on the expansion of charter schools, is part of the union bureaucracy’s support for New York State’s application for $700 billion in the second wave of competition for the Obama administration’s “Race to the Top” funds.

The administration has demanded that in order to qualify for such funding states must remove limits on the number of privately managed charter schools they allow and use student test scores to evaluate teachers. Although these funds cannot solve the state budget crisis, the unions are willing to sacrifice the protections won for workers in the past.

Under current work rules, teachers can be dismissed during a three-year probationary period based on lesson observations by supervisors that evaluate them as satisfactory or unsatisfactory. After this period, tenure status protects teachers from arbitrary, personal and political firing by requiring formal charges for incompetence or serious misconduct and a hearing before an arbitrator.

Under the new agreement, 40 percent of teacher evaluation will be based on students’ annual progress test scores. Teachers have objected to the security of their jobs being based on such measurements because they cannot choose the student population they teach. Students from impoverished areas with a variety of special needs—those who are, for example, deficient in basic skills, who are new English language learners or have learning disabilities or are homeless—are at a disadvantage compared to students in higher income communities that have access to more resources.

Students from academically disadvantaged backgrounds will be likely to score in a range that would penalize their teachers. The current assault on education in the form of layoffs, the slashing of school programs, and increasing class size will further hinder the ability of already underfunded schools to aid these students.

Already in January 2007, Schools Chancellor Joel Klein announced his intention to use student test scores as part of the decision to grant tenure. Experienced teachers, who may earn as much as two new teachers, have become targeted as a financial liability as the city seeks to slash spending. In 2008, the UFT was forced to sue the city for age discrimination on behalf of 700 teachers whose positions were eliminated and could not find new permanent positions. The number of teachers suspended from classrooms on charges of alleged incompetence also rose.

In July 2009, the union’s newspaper stated, “The UFT believes that in its current state, value-added scores have no place in evaluations and we supported the state law that prohibits their use for awarding tenure.”

The UFT denies that the new agreement would put teachers of high-needs students at a disadvantage in their evaluations.

The UFT has also pitted younger teachers against older teachers by a campaign to keep “the best” teachers, even though studies show that it takes years for teachers to reach the peak of their skills.

The union-sanctioned turn in teacher evaluation comes at a time when the New York City public school system will make some of its deepest budget cuts ever.

New York State has a $9.2 billion deficit in its $136 billion budget. This deficit includes $1 billion in contributions to local schools. Since local districts do not yet know how much state aid they will receive, they are forced to cut programs and are preparing to eliminate up to 15,000 jobs statewide. Proposed cuts of $327 million to mental health and social services will impact the neediest students and their families.

While the use of testing to attack the legal job protections of teacher tenure and seniority will have a direct effect on teachers in public schools, the budget cuts are also being used as an excuse to extend the market-oriented schemes that will compel teachers to work more for less. In order to qualify for $700 million in federal Race to the Top funds, the New York State legislature raised the cap on the number of charter schools from 200 to 460, and from 100 to 214 in New York City.

The UFT itself defends the principle of privatization inherent in privately run charter schools and set up three of its own charter schools. With nearly 10 percent of New York’s schools now charters, a critical mass has been achieved that would make it difficult to reverse the trend.

While some charters are able to achieve higher test score results due to selective student admissions, studies have shown that most do no better, and may do worse, than traditional public schools. Nevertheless, there has been growing investment by wealthy hedge-fund managers in charter schools, often described as “philanthropy.” The unstated intention is to create a small layer of “achieving” schools for the needs of business while allowing the majority of public schools to become holding pens for youth fated to join a vast pool of low-wage workers and the unemployed.

While New York State’s new legislation prevents charters being run for profit, many non-profit organizations have been set up to siphon off funds or act as tax havens for parent profit-making corporations. Charter schools often pay large salaries to their upper middle-class executives. Former New York City Council member Eva Moskowitz, for example, earns $316,570 a year from her position as CEO of the Success Charter Network, according to the Daily News.

New York City real estate is expensive, and selling bonds to raise building funds is restricted for charters. As a result, Chancellor Klein has enraged many public school parents with his policy of locating better equipped charters inside already overcrowded public school buildings.

Recently JPMorgan Chase took out full-page newspaper advertisements to announce that it is dedicating $325 million to supporting charter school facility needs. In an article in Education Week, Alex Molnar, a professor of education policy at Arizona State University, explained that JPMorgan will make money from a government tax credit program established at the end of the Clinton administration.

War for Resources: From Slander to Clarion Call

War for Resources: From Slander to Clarion Call

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Reading this week’s New York Times headline—“U.S. Identifies Vast Riches of Minerals in Afghanistan”—many probably wondered how this information was being presented as “news” in 2010. After all, humanity has long been aware of the country’s vast natural resources. As Mother Jones magazine’s James Ridgeway said after recalling past public accounts of the ore deposits, “This ‘discovery’ in fact is ancient history tracing back to the times of Marco Polo.”

The intrigue in the Times dispatch, then, is not Afghanistan’s “huge veins of iron, copper, cobalt, gold and critical industrial metals” that the paper quotes Pentagon officials gushing about—it is the gushing itself. Indeed, the real question is: What would prompt the government to portray well-known geology as some sort of blockbuster revelation?

The Atlantic’s Marc Ambinder proffers a convincing answer. Noting the military’s coordinated quotes in the Times piece, he writes that the Pentagon is probably trying to bolster Americans’ support for the flagging Afghanistan campaign by “publicizing or re-publicizing valid but already public information about the region’s potential wealth.”

This assertion, mind you, is not coming from some anti-war ideologue in a “No War for Oil!” T-shirt. On the contrary, Ambinder is a quintessential buttoned-down establishmentarian far more interested in covering political process than in pushing a pet cause—which means his charge (later echoed by other Washington journalists) is a particularly powerful one. And if he’s correct, we may be witnessing the final spasm of a radical shift.

Remember, the idea that the U.S. invades countries to pilfer natural resources was once written off as an inflammatory insult and/or an unsubstantiated conspiracy theory, irrespective of corroborating facts (like, say, pre-9/11 Pentagon plans to divvy up Iraqi petroleum, State Department proposals to privatize Iraq’s oil fields and top government officials insisting Saddam Hussein’s overthrow was “essential” to protect oil supplies). The assumption, of course, was that the public opposes resource conflicts and that therefore labeling wars as such is nothing but disreputable slander designed only to harm a political opponent.

This manufactured construct, though, began eroding as soon as George W. Bush started turning the “war for oil” aspersion into a proud clarion call.

In 2005, The Associated Press reported that the president “answered growing antiwar protests with a fresh reason for US troops to continue fighting in Iraq: protection of the country’s vast oil fields.” During a press conference a year later, Bush three times pitched petroleum as a rationale for war, criticizing “extreme elements” who “want to control oil resources,” insisting that “we can’t tolerate a new terrorist state in the heart of the Middle East with large oil reserves” and warning that we must stop insurgents from gaining “the capacity to use oil as an economic weapon.”

Now, under President Barack Obama, we get leaked Pentagon memos cheerily promising that Afghanistan will become “the Saudi Arabia of lithium” and generals touting the minerals’ “stunning potential”—the implication being that America is morally obligated to exploit such potential through armed occupation.

The theater of battle is different but the paradigm is the same: Whereas it was previously considered uncouth for anyone to even suggest that economic hegemony might motivate U.S. military action, our leaders are now boldly selling wars as commendable instruments of such profit-focused imperialism.

Importantly, this revised message relies on the new assumption that the public now sees resource conflicts not as detestable—but as worthy and even admirable. And should that assumption prove true, it would mean that this latest exercise in martial propaganda represents more than mere marketing innovation. It would signal a disturbing change in what the population thinks is—and is not—a just reason for war.

How Taxpayers Are Subsidizing BP's Disaster Through the Pentagon

BP and the Pentagon's Dirty Little Secret

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[Note to TomDispatch Readers: Atop my last post I urged readers to pre-order my new book, The American Way of War: How Bush’s Wars Became Obama’s, due out in a few days, and I made an offer as well: anyone willing to contribute $75 or more to TomDispatch to keep this site chugging along would get a signed copy of the book with my deepest thanks. Let me admit to my amazement that so many were so generous! A deep bow to those of you who have already contributed, and a small warning -- be patient. A box of my books will soon be in the mail to me, but you may have to wait a couple of weeks to get your books. In the meantime, so many thanks! Tom]

It couldn’t be worse, could it? In the Gulf, BP now claims to be retrieving 15,000 barrels of oil a day from the busted pipe 5,000 feet down. That’s three times the total amount of oil it claimed, bare weeks ago, was coming out of that pipe. A government panel of experts now suggests that the real figure could be up to 60,000 barrels or 2.5 million gallons a day, the equivalent of an Exxon Valdez spill every four days -- and some independent experts think the figure could actually be closer to 100,000 barrels a day.

In the meantime, we just learned from the Los Angeles Times that -- go figure -- the “primary responsibility for safety and other inspections” on the oil rig that blew in the Gulf “rested not with the U.S. government but with the Republic of the Marshall Islands,” and that those impoverished islands had outsourced their responsibilities to private companies. Go BP! We also learned that the relief wells sure to staunch the flow of oil by “early August” could take far longer, fail, or even make matters significantly worse; that BP cut every corner in the book to save money when drilling its well; and, oh, that evidently even the heavens are angry at the oil giant, since on Tuesday a lightning strike put its sole drill/retrieval ship in the Gulf out of action for hours, leaving all that oil pouring into the water unimpeded. However bad the bad news is, each new dawn it only seems to get worse, as does the “collateral damage,” whether to pelicans or the Gulf's beaches and wetlands.

Meanwhile, in Afghanistan, that war equivalent of BP’s Gulf disaster, things are similarly trending downward at a startling pace as the news from there grows ever grimmer. The model American offensive in the southern town of Marja, declared a "success" in early May, has faltered badly and has been labeled by Afghan war commander General Stanley McChrystal a “bleeding ulcer”; the “government in a box” that he claimed the U.S. would merrily roll out after U.S. and Afghan troops decisively shoved the Taliban aside, is still in absentia, and the Taliban remain all too present; Afghan President Hamid Karzai now openly indicates that he thinks the Americans can’t win in his country and he’s planning accordingly; the much ballyhooed American “offensive” in Afghanistan’s second largest city, Kandahar, has once again been delayed; corruption increases; American and NATO death tolls grow worse by the month as support for the war in the U.S. sinks; the “collateral damage” only increases; and this week, in a piece in the New York Times, we were told things are so bad that a serious drawdown of forces in 2011 is considered unlikely. Go figure (again)!

And oh, the heavens are evidently not so happy with our Afghan operations either, since Centcom commander General David Petraeus fainted while under what one commentator called “withering” questioning about drawdown schedules for U.S. troops in a Senate hearing room Tuesday.

To make matters more complicated, as Nick Turse, TomDispatch regular and author of The Complex: How the Military Invades Our Everyday Lives, points out, America’s two distant disasters are not only out of control and seemingly unstaunchable, but more intimately connected than we might imagine. The American disaster in Afghanistan runs, in significant part, on BP-produced fuel, and government payments for that fuel are bolstering BP while it lives through its purgatory in the Gulf.

In addition, lest the American people learn the absolute worst, BP, evidently working hand-in-hand with the government, has put great effort into avoiding unnecessarily ugly photos, potentially negative stories, and unwanted information from the Gulf, by adopting methods of news control pioneered by the Pentagon in Iraq and Afghanistan. These include the “embedding” of reporters with government minders on public beaches, in the water, and in the air. It has even evidently become the norm in the Gulf now for officials to speak of reporters covering the scene as “media embeds.” In this way do our disparate disasters merge in corporate and government hands. Tom

Kick Ass or Buy Gas?
How Taxpayers Are Subsidizing BP’s Disaster Through the Pentagon
By Nick Turse

Residents of Louisiana, Mississippi, Alabama, and Florida are livid with BP in the wake of the massive, never-ending oil spill in the Gulf of Mexico -- and Barack Obama says they ought to be. But there’s one aspect of the BP story that most of those angry residents of the Gulf states aren’t aware of. And the president hasn’t had a thing to say about it.

Even as the tar balls hit Gulf beaches, their tax dollars are subsidizing BP and so far, President Obama has not shown the slightest indication that he plans to stop their flow into BP coffers, despite the recent call of Public Citizen, a watchdog group, to end the nation’s business dealings with company. In fact, the Department of Defense, which has a longstanding, multi-billion dollar business relationship with BP, tells TomDispatch that it has no plans to sever current business ties or curtail future contracts with the oil giant.

Talking Tough

In recent weeks, against a news backdrop of oil-soaked pelicans, President Obama has been talking tough. “We’ve ordered BP to pay economic injury claims, and we will make sure they deliver,” he announced on June 1st. Days later, he rebuked the oil giant for considering plans to pay out large dividends to shareholders and for spending tens of millions of dollars on an advertising campaign to repair the company’s tarnished image.

"My understanding is that BP had contracted for $50 million worth of TV advertising to manage their image in the course of this disaster," the president said. "Now, I don't have a problem with BP fulfilling its legal obligations. What I don't want to hear is that they're spending that kind of money on shareholders and spending that kind of money on TV advertising, [but] they're nickel-and-diming fishermen or small businesses here in the Gulf who are having a hard time."

As part of his ongoing attempt to deal with flak from critics who claim that his reaction to the disaster in the Gulf of Mexico has been far too measured and that his administration has mishandled its response to the disaster, Obama told NBC “Today Show” host Matt Lauer: "I don't sit around just talking to experts because this is a college seminar. We talk to these folks because they potentially have the best answers, so I know whose ass to kick.”

While the president has been on the verbal warpath, the U.S. military has -- with little notice -- continued to carry on a major business partnership with BP, despite the company’s disastrous environmental record.

Repeat Offenders

As an institution, the Pentagon runs on oil. Its jet fighters, bombers, tanks, Humvees, and other vehicles burn 75% of the fuel used by the Department of Defense. For example, B-52 bombers consume 47,000 gallons per mission, and when an F-16 fighter kicks in its afterburners, it burns through $300 worth of fuel a minute. In fact, according to an article in the April 2010 issue of Energy Source, the official newsletter of the Pentagon’s fuel-buying component, the DoD purchases three billion gallons of jet fuel per year.

Thanks to the wars in Iraq and Afghanistan, the Department of Defense has been consuming vast quantities of fuel. According to 2008 figures, for example, U.S. military bases in Iraq and Afghanistan used a staggering 90 million gallons per month. Given the base-building boom that preceded President Obama’s Afghan surge, the 2010 figures may be significantly higher.

In 2009, according to the Pentagon’s Defense Energy Support Center (DESC), the military spent $3.8 billion for 31.3 million barrels -- around 1.3 billion gallons -- of oil consumed at posts, camps, and bases overseas. Moreover, DESC’s bulk-fuels division, which purchases jet fuel and naval diesel fuel among other petroleum products, awarded $2.2 billion in contracts to support operations in Iraq and Afghanistan last year. Another $974 million was reportedly spent by the ground-fuels division, which awards contracts for diesel fuel, gasoline, and heating oil for ground operations, just for the war in Afghanistan in 2009.

The Pentagon’s foreign wars have left it particularly heavily dependent on oil services, energy, and petroleum companies. An analysis published at Foreign Policy in Focus found that, in 2005, 145 such companies had contracts with the Pentagon. That year, the Department of Defense paid out more than $1.5 billion to BP alone and a total of $8 billion taxpayer dollars, in total, to energy-related firms on what is a far-from-complete list of companies.

In 2009, according to the Defense Energy Support Center, the military awarded $22.5 billion in energy contracts. More than $16 billion of that went to purchasing bulk fuel. Some 10 top petroleum suppliers got the lion’s share, more than $11.5 billion, among them big names like Shell, Exxon Mobil and Valero. The largest contractor, however, was BP, which received more than $2.2 billion -- almost 12% of all petroleum-contract dollars awarded by the Pentagon for the year.

While one exceptionally powerful department of the federal government has been feeding money into BP (and other oil giants) with abandon, BP has consistently run afoul of U.S. government regulators from the Occupational Safety and Health Administration (OSHA). According to the Center for Public Integrity, “BP account[ed] for 97 percent of all flagrant violations found in the [oil] refining industry by government safety inspectors over the past three years.” Records obtained by the Center demonstrate that between June 2007 and February 2010, BP received a total of 862 citations, mostly for alleged violations of “OSHA’s process safety management standard, a sweeping rule governing everything from storage of flammable liquids to emergency shutdown systems.” Of these citations, 760 were considered “egregious willful,” which OSHA defines as a violation even more severe than those committed due to “plain indifference” or evidencing “intentional disregard for employee health and safety.” As a result, BP faces $90 million in penalties which the company is currently contesting.

Over those same years, BP received around $5.7 billion in federal contracts, according to official government data. In fact, the $2.2 billion the Pentagon paid to the oil giant in 2009 accounted for almost 16% of the company’s nearly $14 billion in annual profits.

This fiscal year, the U.S. military has already awarded the company more than $837 million, inking its latest deal with BP in March.

The Pentagon’s Green Revolution

In recent years, the gas-guzzling Pentagon has launched a major effort to invest in developing green technology -- or at least give the appearance of doing so -- with, at best, mixed results. As defense-tech writer Noah Shachtman has pointed out, the military is “now focusing on algal feedstock for biofuel and next-generation solar panels. One of the world's largest solar-power projects is planned for the Army's main training center, at Fort Irwin, Calif. Billions in stimulus money were spent to green military facilities.”

But efforts in the Bush years to develop "green" vehicles generally stalled, flopped, or barely got rolling. Under the Obama administration, more ambitious goals have been set, but tangible results are still lacking. Last year, the military’s contracts for renewable fuels derived from algae, according to DESC, added up to less than 22,000 gallons.

One major reason for this, Shachtman writes, is that “the current systems for delivering power and fuel to war zones are reliable, if inefficient and unsustainable. Military leaders,” he adds “don't want to jeopardize operations in Afghanistan or Iraq for something perceived as experimental or risky.” As a result, whatever solar panels it has installed or renewable jet fuel it has purchased, the Pentagon remains dependent on buying huge amounts of petroleum products from BP and other large energy corporations, and when it comes to war-making, any substantive reduction in oil dependence appears far off indeed.

Nonetheless, the Department of Defense has devoted significant resources to publicizing its green efforts. The commander-in-chief has even lent a hand. On March 31st, President Obama stood in front of a “green” F-18 Hornet fighter designed to run partly on bio-fuels and announced to the nation that he was proposing to open large new areas off the Atlantic coastline, the eastern Gulf of Mexico, and the north coast of Alaska to oil and natural gas drilling. Less than a month later, the Deepwater Horizon oil rig exploded in the Gulf of Mexico.

In the weeks since, despite Obama’s tough talk, his reported “anger and frustration,” and his efforts to identify the proper “ass to kick,” as well as the Pentagon’s much-touted green-energy initiative, the U.S. military continues, as Shachtman points out, to burn “22 gallons of diesel [fuel] per soldier per day in Afghanistan, at a cost of more than $100,000 a person annually.”

In other words, as a direct result of war-making in distant lands, taxpayer dollars, including those from Florida, Alabama, Mississippi, and Louisiana, will continue to flow into BP coffers, even as more wildlife dies, more beaches are fouled, and more livelihoods are lost in the Gulf of Mexico.

Tough Talk and No Action

In a June 5th email message to supporters, paid for by Organizing for America, a project of the Democratic National Committee, President Obama again acknowledged the severity of the BP disaster and validated the anger it has unleashed. “This spill,” he declared, “has not just damaged livelihoods. It has upended whole communities. And the fury people feel is not just about the money they have lost. It is about the wrenching recognition that this time their lives may never be the same.”

“We have,” he continued, “...ordered BP to pay economic injury claims, and this week, the federal government sent BP a preliminary bill for $69 million to pay back American taxpayers for some of the costs of the response so far.”

Two days later, Tyson Slocum, the director of the consumer advocacy group Public Citizen’s energy program, sent a letter to Obama and Secretary of Defense Robert Gates asking them to go further. He urged them to suspend, and ultimately debar, BP and its subsidiaries from serving as defense contractors, to terminate six current federal contracts with the company, and prohibit BP and its subsidiaries from winning federal contracts for the next three years. He wrote:

"Given the company's willful transgression of U.S. laws, it can no longer be presumed that BP will responsibly perform its contractor responsibilities. The demonstrated disregard for the law means that there is good reason to doubt that the company will abide by its obligations under its Department of Defense contracts. Moreover, the company's repeated violation of environmental laws suggests an unacceptably high likelihood that BP will violate such laws in carrying out its contractual obligations. BP's aggregate record of wrongdoing -- including but not limited to causing the ongoing gusher in the Gulf of Mexico -- evidences a lack of business honesty that seriously and directly affects its ability to perform its contractual duties."

Public Citizen has yet to receive a response or any indication that the president or the defense secretary has read the letter, Slocum informed TomDispatch this week.

“I am not aware at this moment of any plans to curtail or cancel any DoD contracts that may exist at this time,” Department of Defense spokesperson Cheryl Irwin told TomDispatch. Irwin also stated that she knew of no plans to restrict the awarding of future contracts to BP.

The president has remained silent on the issue. Repeated requests by TomDispatch for comment from the White House’s Council on Environmental Quality went unanswered. In a statement to TomDispatch this week, however, the Environmental Protection Agency (EPA) said it “is closely monitoring the investigations into the circumstances leading to the explosion and spill at the Deepwater Horizon facility. EPA will weigh its options under our debarment authority and take appropriate actions.” No time frame, however, has been set for any type of decision. “It is really premature to speculate on the Agency's actions,” an EPA official, who asked not to be named, told TomDispatch. “We're on hold pending the larger federal investigation.”

Yesterday, the White House and BP agreed that the oil giant would establish a $20 billion escrow account to compensate claims resulting from the Gulf Coast oil spill. "This should provide some assurance to small business owners that BP is going to meet its responsibilities," said President Obama following the announcement.

The message is clear. BP will be held accountable -- but only to a point, and not nearly in strong enough terms, says Public Citizen’s Slocum. The escrow account is “a no-brainer,” he told TomDispatch. “But that’s just related to the company’s obligations to pay for a mess it created,” he pointed out, likening the situation to an individual breaking the law. “If I commit a crime that causes damage, I don’t just pay restitution. I pay a punitive fine or I’m incarcerated. The question is: What is the version of incarceration for corporations?”

Slocum sees a 2007 guilty plea by BP Products North America for a felony violation of the Clean Air Act -- stemming from a 2005 explosion at a BP refinery in Texas that killed 15 workers -- as evidence that stronger sanctions are now warranted. The fine resulting from the Texas disaster was just a “blip on their balance sheet,” he says.

“You have to send a clear message to shareholders that committing felonies is not tolerated in the United States. And the way you do that is through some form of permanent sanctions.” Barring the company from government contracts, says Slocum, would be just such a step.

With anger boiling over in the Gulf, there seemingly could be no more egregious offender or more deserving “ass to kick” than BP’s. “I don’t know of any other oil companies operating in America that are currently on criminal probation,” says Slocum. “I don’t know any other oil companies that recently pled guilty to a felony. I don’t know any other oil companies that appear to have committed numerous acts of negligence that resulted in the largest industrial environmental disaster in American history. BP is an outlier, so it needs to be treated as an outlier.”

Somebody should tell the president. Again.

More Dirty Secrets From My BP Mole

More Dirty Details From My BP Mole

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You know the story: Boy calls girl, girl goes to pick up boy, boy and girl go sit on a beautiful beachside deck to enjoy the night breeze and listen to the waves crash as he tells her a bunch of terrible things that are going on at an oil-spill cleanup site. Yes, I had a date with Elmer, my mole inside BP's cleanup operation, and he painted a grim picture of the conditions for both workers and wildlife at Louisiana's Elmer's Island Wildlife Refuge.

First, the workers: The men on Elmer's Island don't wear respirators since BP and OSHA have thrown precaution to the wind and deemed them unnecessary. But the only type of air-monitoring equipment Elmer's ever seen on the island are little multigas meters that are not up to the job: They're designed for indoor use, clog easily, and only measure limited types of pollutants. And despite the known dangers of dispersants and the toxic chemicals in crude (I can attest that contact with the stuff washing up on the beach can burn), workers aren't even wearing protective Tyvek suits anymore. Of course, there are medics on hand to treat anyone who gets hurt or sick. Unfortunately, any worker who asks for a medic's help is automatically drug tested, which, for some, can be a powerful incentive to not report injuries. (Not that keeping a cleanup job necessarily equals getting paid: Elmer says the contractors continue to lose workers' paychecks, a problem he told me about the last time we talked and that has since been confirmed by the local papers.)

Cleanup workers on these South Louisiana beaches aren't the only ones who could use more protections. What Elmer told me echoed the reports that BP isn't exactly doing everything in its power to keep track of the toll the spill is taking on wildlife. In nearby Port Fourchon, where he has also worked, there are markers to denote wildlife nesting areas, but they aren't clearly labeled and no one knows what they mean, so workers drive and trample over sensitive habitats. One day last week, Elmer and his coworkers came upon eight oiled pelicans, but though they called the official number to report their findings, no one had come to collect the birds by the time his shift ended many hours later. (A representative from the Louisiana Department of Wildlife and Fisheries has yet to respond to my request for comment.) Workers on Elmer's have not been instructed to report dead animals for collection or autopsy. Elmer said he'd recently come upon a dead crab and, knowing no one was going to come to examine it, decided to slice it open himself. Black oil poured out.

I've seen some pathetic excuses for cleanup out here—were the workers on Elmer's at least making some progress? "They're not being effective out here," Elmer said. "Two days after your article, they bused in twice as many workers, so they're up to 120 guys on Elmer's now, but I can't see any considerable difference. They're only working five sites and it's eight miles of beach. No one seems concerned about cleaning it up. The contractors are getting their money; they don't care. They've got all these people out there, but they're not accomplishing anything."

Oh, wait. Not nothing: "They've brought in prostitutes." No one knows who the "they" that brought in the pack of hookers is, but the gals have definitely arrived, and you can buy time with one for $200. It only took someone a whole month even to figure out that it would be lucrative to sell sex to guys earning 44 hours of overtime a week and living in camps and converted 18-wheelers.

Death by Fire in the Gulf

Death by fire in the gulf

So-called burn boxes are torching oil from the water's surface at the sacrifice of turtles, crabs, sea slugs and other sea life.

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Here on the open ocean, 12 miles from ground zero of the Deepwater Horizon oil spill, the gulf is hovering between life and death.

The large strands of sargassum seaweed atop the ocean are normally noisy with birds and thick with crustaceans, small fish and sea turtles. But now this is a silent panorama, heavy with the smell of oil.

There are no birds. The seaweed is soaked in rust-colored crude and chemical dispersant. It is devoid of life except for the occasional juvenile sea turtle, speckled with oil and clinging to the only habitat it knows. Thick ribbons of oil spread out through the sea like the strips in egg flower soup, gorgeous and deadly.

A few dead fish float in the water, though dolphin-fish, tuna, flying fish and the occasional shark can still be seen swimming near the surface, threading their way through the wavy, sometimes iridescent gobs of crude.

"This is devastating. I mean literally, it's terrible. All this should be pretty much blue water, and — look at it. It just looks bad," said Kevin Aderhold, a longtime charter fishing captain who has been taking a team of researchers deep into the gulf every day to rescue oil-soaked sea turtles.

"When this first happened, a lot of us were like, they'll cap that thing and we'll be out fishing again. Now reality's set in. Look around you. This is long-term. This'll be here for-ev-er."

And then it gets worse. When the weather is calm and the sea is placid, ships trailing fireproof booms corral the black oil, the coated seaweed and whatever may be caught in it, and torch it into hundred-foot flames, sending plumes of smoke skyward in ebony mushrooms. This patch of unmarked ocean gets designated over the radio as "the burn box."

Wildlife researchers operating here, in the regions closest to the spill, are witnesses to a disquieting choice: Protecting shorebirds, delicate marshes and prime tourist beaches along the coast by stopping the oil before it moves ashore has meant the largely unseen sacrifice of some wildlife out at sea, poisoned with chemical dispersants and sometimes boiled by the burning of spilled oil on the water's surface.

"It reflects the conventional wisdom of oil spills: If they just keep the oil out at sea, the harm will be minimal. And I disagree with that completely," said Blair Witherington, a research scientist with the Florida Fish and Wildlife Conservation Commission who has been part of the sea turtle rescue mission.

By unhappy coincidence, the same convergences of ocean currents that create long mats of sargassum — nurturing countless crabs, slugs and surface fish that are crucial food for turtles, birds and larger fish — also coalesce the oil, creating islands of death sometimes 30 miles long.

"Most of the Gulf of Mexico is a desert. Nothing out there to live on. It's all concentrated in these oases," Witherington said.

"Ordinarily, the sargassum is a nice, golden color. You shake it, and all kinds of life comes out: shrimp, crabs, worms, sea slugs. The place is really just bursting with life. It's the base of the food chain. And these areas we're seeing here by comparison are quite dead," he said.

"It's amazing. We'll see flying fish, and they'll land in this stuff and just get stuck."

Hardest hit of all, it appears, are the sea jellies and snails that drift along the gulf's surface, some of the most important food sources for sea turtles.

"These animals drift into the oil lines and it's like flies on fly paper," Witherington said. "As far as I can tell, that whole fauna is just completely wiped out."

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The turtle rescue team sets out at 6 a.m. in the muggy warm stillness of the harbor at Venice, La. The researchers move into the open gulf about an hour later, past a line of shrimp boats deputized to lay boom along the coastal marshes.

Closer to the Deepwater Horizon site, the water takes on a foreboding gray pallor tinged with a rainbow-like sheen. Soon, the oil begins swirling around the boat and the seascape smells like an auto mechanic's garage.

Strewn among the oil and seaweed are human flotsam: an orange hardhat, a pie pan, a wire coat hanger, yellow margarine-tub lids, a black-and-green ashtray. The crew has found papers — long at sea on global currents — bearing inscriptions in Spanish, Arabic, Greek and Chinese.

The only sound that breaks the stillness is the deep thrum of the motors of the large charter boat and a small skiff carrying the turtle researchers. From dawn until nearly dusk, across sargassum islands that normally are alive with birds looking for crabs and snails — bridal terns, shearwaters, storm-petrels — only one bird is seen.

"What's amazing is there's so little bird life out here right now. Either they've moved on, or the oiling has had a tremendous impact," said Kate Sampson, a researcher with the National Oceanic and Atmospheric Administration who is part of the turtle rescue team.

"We saw a few yesterday. We saw a few laughing gulls fly by. They were oiled, but they could still fly. And we saw a northern gannet, a diving bird. It was oiled too," she said. "I can only imagine that the birds left because the dining hall is closed."

Soon, the rising towers of the Discoverer Enterprise drill ship, which is collecting oil and gas from the damaged well, and the tall rigs boring two relief wells miles into the seabed appear through the haze. A flare of burning natural gas is silhouetted against the gray hull of the ship.

The Premier Explorer, which is helping coordinate cleanup operations at the broken well, announces the day's burn box: A 500-square-mile field within which 16 controlled burns will be conducted.

In the days since the April 20 explosion on the Deepwater Horizon, more than 5 million gallons of oil have been consumed in more than 165 burns.

"The real issue is to stop this thing at the source, do maximum skimming, in-situ burning — deal with it as far off shore as possible, and do everything you can to keep it from getting to shore, because once it's into the marshes, quite frankly, I think we would all agree there's no good solution at that point," Coast Guard Adm. Thad Allen told reporters last week.

But the burn operations have proved particularly excruciating for the turtle researchers, who have been trolling the same lines of oil and seaweed as the boom boats, hoping to pull turtles out of the sargassum before they are burned alive.

Much of the wildlife here seems doomed in any case. "We've seen the oil covering the turtles so thick they could barely move, could hardly lift their heads," Witherington said. "I won't pretend to know which is the nastiest."

Yet in one case, the crew had to fall back and watch as skimmers gathered up a long line of sargassum that hadn't yet been searched — and which they believe was full of turtles that might have been saved.

"In a perfect world, they'd gather up the material and let us search it before they burned it," Witherington said. "But that connection hasn't been made. The lines of communication aren't there."

The smoke starts rising on the horizon at midday. The two boats carrying the researchers head in different directions, hoping to find and rescue a few more turtles before their mission wraps up. They find 11, all of them heavily speckled with oil.

Each day, the chances of rescues grow smaller. That there are still so many left stranded in the oil without food is a small miracle. Their long-term chances "are zero," Witherington said.

"Turtles just take a long time to die."