Thursday, July 29, 2010

FBI Continues Attack on Civil Rights, Demands Increased Powers

FBI Continues Attack on Civil Rights, Demands Increased Powers

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The week before last, The Washington Post concluded a two-year investigation of our government's domestic spying activities, revealing a lack of accountability pervading its far-flung and vast operations. Last week, FBI Director Robert S. Mueller testified before the Senate Judiciary Committee, confirming that the FBI is violating the constitutional rights of Americans en masse - as it has done before.

Adding insult to injury, the bureau now preposterously demands even further powers beyond those dramatically extended by the Patriot Act. At a minimum, Congress should emphatically reject demands for FBI access to "electronic communication transactional records," such as email meta-data and browsing history. However, Congress must also go further, by - as a coalition of nearly 50 peace, environmental, civil rights and civil liberties groups requested last week - shining light on the bureau's violations of constitutional rights and considering long overdue legislative limits to constrain the FBI.

President Eisenhower warned 50 years ago that national security could undermine democracy by subverting popular policy preferences. His warning was prescient. In the 1960s, the FBI pursued a concerted campaign to undermine the civil rights movement by criminalizing groups, like the NAACP, pursuing peaceful political activities protected by the First Amendment.

This is no conspiracy theory: Congress documented wanton FBI abuses in over 14,000 pages of testimony. According to the Church committee, the FBI's activities then would be intolerable in a democratic society even if all of the targets had been involved in violent activity, but Cointelpro (counterintelligence program) went far beyond that ... the bureau conducted a sophisticated vigilante operation aimed squarely at preventing the exercise of First Amendment rights....

Revelations of the FBI's Cointelpro prompted a national outrage that forced the Department of Justice to enact limits in 1976 curtailing the bureau's various abuses. Today, these problems are back.

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The attorney general's guidelines that once constrained the FBI have faced repeated erosion, culminating in revisions in 2008 - adopted over Congressional objections in the last full month of the Bush administration - that essentially invite racial and political profiling.

The 2008 Mukasey guidelines hold that race may serve as a factor justifying suspicion, and even grants individual agents discretion to use intrusive investigatory methods without any evidence suggesting that a crime has been committed. Last week, Mueller mistakenly claimed before the Senate that FBI agents must at least have a suspicion of wrongdoing before beginning surveillance - but later conceded that, in fact, FBI surveillance is not limited by even suspicion.

This bears repetition: the FBI currently conducts monitoring and surveillance operations based on neither evidence nor suspicion. Think about that for a moment.

The United States, Israel, and the Failure of the Western Way of War

Giving Up On Victory, Not War

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If you ever needed convincing that the world of American “national security” is well along the road to profligate lunacy, read the striking three-part “Top Secret America” series by Dana Priest and William Arkin that the Washington Post published last week. When it comes to the expansion of the U.S. Intelligence Community (IC), which claims 17 major agencies and organizations, the figures are staggering. Here’s just a taste: “Twenty-four [new intelligence] organizations were created by the end of 2001, including the Office of Homeland Security and the Foreign Terrorist Asset Tracking Task Force. In 2002, 37 more were created to track weapons of mass destruction, collect threat tips, and coordinate the new focus on counterterrorism. That was followed the next year by 36 new organizations; and 26 after that; and 31 more; and 32 more; and 20 or more each in 2007, 2008, and 2009. In all, at least 263 organizations have been created or reorganized as a response to 9/11.”

More striking yet, the articles make clear (admittedly a few years late) that no one has a complete picture of the extent of the American intelligence quagmire -- from its finances (announced at $75 billion but, the authors assure us, significantly higher) to its geography, its output (the 50,000 top-secret reports it churns out yearly that no one has time to read or track), its composition, or even its office space. (“In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001.”) And keep in mind that all of this and more was created not to keep track of or fight a series of covert wars with another major imperial power like the Soviet Union, but to track and hunt down a rag-tag terrorist outfit with a couple of thousand members, including modest-sized groups in countries like Yemen and small numbers of individual wannabe terrorists like the “underwear bomber.” In much of this, as anyone who bothers to scan front-page headlines knows, the IC has been remarkably unsuccessful. Such staggeringly out-of-control expansion should, of course, be a major scandal, but along with our constant wars, it’s already so much a part of the new national security norm that the publication of the Post series is unlikely to have any significant effect.

All this has, in turn, been driven by Fear Inc. To fuel its profitable if cancerous growth, it has vastly exaggerated the relatively minor and largely manageable danger of Islamic terrorism -- since 9/11, above shark attacks but way below drunken-driving accidents -- among the many far more serious dangers this country faces. If the IC actually worked as an effective intelligence delivery system, we would be a Mensa among states. But how could such a proliferation of overlapping agencies and outfits, aided and abetted by a burgeoning privatized, mercenary version of the same, provide “intelligence”? With more than two-thirds of all intelligence programs militarized and overseen by the Pentagon, itself driven to paroxysms of spending and expansion since 2001 (despite the fact that all major military challengers to the U.S. are long gone), labeling this morass “intelligence” should be considered a joke. However absurd, though, don’t expect any of those organizations or agencies to disappear any time soon. They’re ours for the duration.

It’s into such national security institutional madness that Andrew Bacevich, author of the bestselling The Limits of Power, strides in his latest work, to be published this week, Washington Rules: America’s Path to Permanent War. It is the single best source for understanding how Washington came to garrison the planet, intervene regularly in distant lands, and turn war-making -- and not even successful war-making at that -- into an American norm. It’s simply a must-read. Think of today’s TomDispatch post as a little introduction to just a few of that book’s themes. (And while you’re at it, catch Timothy MacBain’s latest TomCast audio interview in which Bacevich discusses his new book by clicking here, or to download it to your iPod, here).Tom

The End of (Military) History?
The United States, Israel, and the Failure of the Western Way of War
By Andrew J. Bacevich

“In watching the flow of events over the past decade or so, it is hard to avoid the feeling that something very fundamental has happened in world history.” This sentiment, introducing the essay that made Francis Fukuyama a household name, commands renewed attention today, albeit from a different perspective.

Developments during the 1980s, above all the winding down of the Cold War, had convinced Fukuyama that the “end of history” was at hand. “The triumph of the West, of the Western idea,” he wrote in 1989, “is evident… in the total exhaustion of viable systematic alternatives to Western liberalism.”

Today the West no longer looks quite so triumphant. Yet events during the first decade of the present century have delivered history to another endpoint of sorts. Although Western liberalism may retain considerable appeal, the Western way of war has run its course.

For Fukuyama, history implied ideological competition, a contest pitting democratic capitalism against fascism and communism. When he wrote his famous essay, that contest was reaching an apparently definitive conclusion.

Yet from start to finish, military might had determined that competition’s course as much as ideology. Throughout much of the twentieth century, great powers had vied with one another to create new, or more effective, instruments of coercion. Military innovation assumed many forms. Most obviously, there were the weapons: dreadnoughts and aircraft carriers, rockets and missiles, poison gas, and atomic bombs -- the list is a long one. In their effort to gain an edge, however, nations devoted equal attention to other factors: doctrine and organization, training systems and mobilization schemes, intelligence collection and war plans.

All of this furious activity, whether undertaken by France or Great Britain, Russia or Germany, Japan or the United States, derived from a common belief in the plausibility of victory. Expressed in simplest terms, the Western military tradition could be reduced to this proposition: war remains a viable instrument of statecraft, the accoutrements of modernity serving, if anything, to enhance its utility.

Grand Illusions

That was theory. Reality, above all the two world wars of the last century, told a decidedly different story. Armed conflict in the industrial age reached new heights of lethality and destructiveness. Once begun, wars devoured everything, inflicting staggering material, psychological, and moral damage. Pain vastly exceeded gain. In that regard, the war of 1914-1918 became emblematic: even the winners ended up losers. When fighting eventually stopped, the victors were left not to celebrate but to mourn. As a consequence, well before Fukuyama penned his essay, faith in war’s problem-solving capacity had begun to erode. As early as 1945, among several great powers -- thanks to war, now great in name only -- that faith disappeared altogether.

Among nations classified as liberal democracies, only two resisted this trend. One was the United States, the sole major belligerent to emerge from the Second World War stronger, richer, and more confident. The second was Israel, created as a direct consequence of the horrors unleashed by that cataclysm. By the 1950s, both countries subscribed to this common conviction: national security (and, arguably, national survival) demanded unambiguous military superiority. In the lexicon of American and Israeli politics, “peace” was a codeword. The essential prerequisite for peace was for any and all adversaries, real or potential, to accept a condition of permanent inferiority. In this regard, the two nations -- not yet intimate allies -- stood apart from the rest of the Western world.

So even as they professed their devotion to peace, civilian and military elites in the United States and Israel prepared obsessively for war. They saw no contradiction between rhetoric and reality.

Yet belief in the efficacy of military power almost inevitably breeds the temptation to put that power to work. “Peace through strength” easily enough becomes “peace through war.” Israel succumbed to this temptation in 1967. For Israelis, the Six Day War proved a turning point. Plucky David defeated, and then became, Goliath. Even as the United States was flailing about in Vietnam, Israel had evidently succeeded in definitively mastering war.

A quarter-century later, U.S. forces seemingly caught up. In 1991, Operation Desert Storm, George H.W. Bush’s war against Iraqi dictator Saddam Hussein, showed that American troops like Israeli soldiers knew how to win quickly, cheaply, and humanely. Generals like H. Norman Schwarzkopf persuaded themselves that their brief desert campaign against Iraq had replicated -- even eclipsed -- the battlefield exploits of such famous Israeli warriors as Moshe Dayan and Yitzhak Rabin. Vietnam faded into irrelevance.

For both Israel and the United States, however, appearances proved deceptive. Apart from fostering grand illusions, the splendid wars of 1967 and 1991 decided little. In both cases, victory turned out to be more apparent than real. Worse, triumphalism fostered massive future miscalculation.

On the Golan Heights, in Gaza, and throughout the West Bank, proponents of a Greater Israel -- disregarding Washington’s objections -- set out to assert permanent control over territory that Israel had seized. Yet “facts on the ground” created by successive waves of Jewish settlers did little to enhance Israeli security. They succeeded chiefly in shackling Israel to a rapidly growing and resentful Palestinian population that it could neither pacify nor assimilate.

In the Persian Gulf, the benefits reaped by the United States after 1991 likewise turned out to be ephemeral. Saddam Hussein survived and became in the eyes of successive American administrations an imminent threat to regional stability. This perception prompted (or provided a pretext for) a radical reorientation of strategy in Washington. No longer content to prevent an unfriendly outside power from controlling the oil-rich Persian Gulf, Washington now sought to dominate the entire Greater Middle East. Hegemony became the aim. Yet the United States proved no more successful than Israel in imposing its writ.

During the 1990s, the Pentagon embarked willy-nilly upon what became its own variant of a settlement policy. Yet U.S. bases dotting the Islamic world and U.S. forces operating in the region proved hardly more welcome than the Israeli settlements dotting the occupied territories and the soldiers of the Israeli Defense Forces (IDF) assigned to protect them. In both cases, presence provoked (or provided a pretext for) resistance. Just as Palestinians vented their anger at the Zionists in their midst, radical Islamists targeted Americans whom they regarded as neo-colonial infidels.


No one doubted that Israelis (regionally) and Americans (globally) enjoyed unquestioned military dominance. Throughout Israel’s near abroad, its tanks, fighter-bombers, and warships operated at will. So, too, did American tanks, fighter-bombers, and warships wherever they were sent.

So what? Events made it increasingly evident that military dominance did not translate into concrete political advantage. Rather than enhancing the prospects for peace, coercion produced ever more complications. No matter how badly battered and beaten, the “terrorists” (a catch-all term applied to anyone resisting Israeli or American authority) weren’t intimidated, remained unrepentant, and kept coming back for more.

Israel ran smack into this problem during Operation Peace for Galilee, its 1982 intervention in Lebanon. U.S. forces encountered it a decade later during Operation Restore Hope, the West’s gloriously titled foray into Somalia. Lebanon possessed a puny army; Somalia had none at all. Rather than producing peace or restoring hope, however, both operations ended in frustration, embarrassment, and failure.

And those operations proved but harbingers of worse to come. By the 1980s, the IDF’s glory days were past. Rather than lightning strikes deep into the enemy rear, the narrative of Israeli military history became a cheerless recital of dirty wars -- unconventional conflicts against irregular forces yielding problematic results. The First Intifada (1987-1993), the Second Intifada (2000-2005), a second Lebanon War (2006), and Operation Cast Lead, the notorious 2008-2009 incursion into Gaza, all conformed to this pattern.

Meanwhile, the differential between Palestinian and Jewish Israeli birth rates emerged as a looming threat -- a “demographic bomb,” Benjamin Netanyahu called it. Here were new facts on the ground that military forces, unless employed pursuant to a policy of ethnic cleansing, could do little to redress. Even as the IDF tried repeatedly and futilely to bludgeon Hamas and Hezbollah into submission, demographic trends continued to suggest that within a generation a majority of the population within Israel and the occupied territories would be Arab.

Trailing a decade or so behind Israel, the United States military nonetheless succeeded in duplicating the IDF’s experience. Moments of glory remained, but they would prove fleeting indeed. After 9/11, Washington’s efforts to transform (or “liberate”) the Greater Middle East kicked into high gear. In Afghanistan and Iraq, George W. Bush’s Global War on Terror began impressively enough, as U.S. forces operated with a speed and √©lan that had once been an Israeli trademark. Thanks to “shock and awe,” Kabul fell, followed less than a year and a half later by Baghdad. As one senior Army general explained to Congress in 2004, the Pentagon had war all figured out:

“We are now able to create decision superiority that is enabled by networked systems, new sensors and command and control capabilities that are producing unprecedented near real time situational awareness, increased information availability, and an ability to deliver precision munitions throughout the breadth and depth of the battlespace… Combined, these capabilities of the future networked force will leverage information dominance, speed and precision, and result in decision superiority.”

The key phrase in this mass of techno-blather was the one that occurred twice: “decision superiority.” At that moment, the officer corps, like the Bush administration, was still convinced that it knew how to win.

Such claims of success, however, proved obscenely premature. Campaigns advertised as being wrapped up in weeks dragged on for years, while American troops struggled with their own intifadas. When it came to achieving decisions that actually stuck, the Pentagon (like the IDF) remained clueless.


If any overarching conclusion emerges from the Afghan and Iraq Wars (and from their Israeli equivalents), it’s this: victory is a chimera. Counting on today’s enemy to yield in the face of superior force makes about as much sense as buying lottery tickets to pay the mortgage: you better be really lucky.

Meanwhile, as the U.S. economy went into a tailspin, Americans contemplated their equivalent of Israel’s “demographic bomb” -- a “fiscal bomb.” Ingrained habits of profligacy, both individual and collective, held out the prospect of long-term stagnation: no growth, no jobs, no fun. Out-of-control spending on endless wars exacerbated that threat.

By 2007, the American officer corps itself gave up on victory, although without giving up on war. First in Iraq, then in Afghanistan, priorities shifted. High-ranking generals shelved their expectations of winning -- at least as a Rabin or Schwarzkopf would have understood that term. They sought instead to not lose. In Washington as in U.S. military command posts, the avoidance of outright defeat emerged as the new gold standard of success.

As a consequence, U.S. troops today sally forth from their base camps not to defeat the enemy, but to “protect the people,” consistent with the latest doctrinal fashion. Meanwhile, tea-sipping U.S. commanders cut deals with warlords and tribal chieftains in hopes of persuading guerrillas to lay down their arms.

A new conventional wisdom has taken hold, endorsed by everyone from new Afghan War commander General David Petraeus, the most celebrated soldier of this American age, to Barack Obama, commander-in-chief and Nobel Peace Prize laureate. For the conflicts in which the United States finds itself enmeshed, “military solutions” do not exist. As Petraeus himself has emphasized, “we can’t kill our way out of" the fix we’re in. In this way, he also pronounced a eulogy on the Western conception of warfare of the last two centuries.

The Unasked Question

What then are the implications of arriving at the end of Western military history?

In his famous essay, Fukuyama cautioned against thinking that the end of ideological history heralded the arrival of global peace and harmony. Peoples and nations, he predicted, would still find plenty to squabble about.

With the end of military history, a similar expectation applies. Politically motivated violence will persist and may in specific instances even retain marginal utility. Yet the prospect of Big Wars solving Big Problems is probably gone for good. Certainly, no one in their right mind, Israeli or American, can believe that a continued resort to force will remedy whatever it is that fuels anti-Israeli or anti-American antagonism throughout much of the Islamic world. To expect persistence to produce something different or better is moonshine.

It remains to be seen whether Israel and the United States can come to terms with the end of military history. Other nations have long since done so, accommodating themselves to the changing rhythms of international politics. That they do so is evidence not of virtue, but of shrewdness. China, for example, shows little eagerness to disarm. Yet as Beijing expands its reach and influence, it emphasizes trade, investment, and development assistance. Meanwhile, the People’s Liberation Army stays home. China has stolen a page from an old American playbook, having become today the preeminent practitioner of “dollar diplomacy.”

The collapse of the Western military tradition confronts Israel with limited choices, none of them attractive. Given the history of Judaism and the history of Israel itself, a reluctance of Israeli Jews to entrust their safety and security to the good will of their neighbors or the warm regards of the international community is understandable. In a mere six decades, the Zionist project has produced a vibrant, flourishing state. Why put all that at risk? Although the demographic bomb may be ticking, no one really knows how much time remains on the clock. If Israelis are inclined to continue putting their trust in (American-supplied) Israeli arms while hoping for the best, who can blame them?

In theory, the United States, sharing none of Israel’s demographic or geographic constraints and, far more richly endowed, should enjoy far greater freedom of action. Unfortunately, Washington has a vested interest in preserving the status quo, no matter how much it costs or where it leads. For the military-industrial complex, there are contracts to win and buckets of money to be made. For those who dwell in the bowels of the national security state, there are prerogatives to protect. For elected officials, there are campaign contributors to satisfy. For appointed officials, civilian and military, there are ambitions to be pursued.

And always there is a chattering claque of militarists, calling for jihad and insisting on ever greater exertions, while remaining alert to any hint of backsliding. In Washington, members of this militarist camp, by no means coincidentally including many of the voices that most insistently defend Israeli bellicosity, tacitly collaborate in excluding or marginalizing views that they deem heretical. As a consequence, what passes for debate on matters relating to national security is a sham. Thus are we invited to believe, for example, that General Petraeus’s appointment as the umpteenth U.S. commander in Afghanistan constitutes a milestone on the way to ultimate success.

Nearly 20 years ago, a querulous Madeleine Albright demanded to know: “What's the point of having this superb military you're always talking about if we can't use it?” Today, an altogether different question deserves our attention: What’s the point of constantly using our superb military if doing so doesn’t actually work?

Washington’s refusal to pose that question provides a measure of the corruption and dishonesty permeating our politics.

Gulf oil spill: 100 days of disaster

Gulf oil spill: 100 days of disaster

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The first 100 days of the BP Gulf oil catastrophe have provided an object lesson in the destructiveness and irrationality of capitalism, which subordinates every consideration to the profit drive of the giant corporations and banks.

The April 20 blowout aboard the Deepwater Horizon was, in the fullest sense of the phrase, a disaster waiting to happen. There had been no systematic regulatory enforcement on the Deepwater Horizon or any other Gulf of Mexico oil rig under either president Obama or his predecessor, George W. Bush.

As for existing legal safety requirements, the order of the day was, and remains, “self-reporting.” This was in keeping with the decades-long promotion of deregulation, backed by both parties. Industry itself, the politicians proclaimed, was the only legitimate arbiter of what is safe and beneficial to workers, the environment, and the population.

The disastrous results of deregulation, which surfaced first in the collapse of the global financial markets in 2008, are obvious in the Gulf disaster. There is overwhelming evidence that the blowout was caused by the criminal negligence of BP, aided and abetted by bought-and-paid-for federal “regulators” who did little more than run interference for the oil industry.

Both Obama and Bush relentlessly promoted deep-sea oil drilling in spite of innumerable warnings from scientists and environmentalists that technology and regulations to prevent blowouts and respond to them when they occur were inadequate. Systems and equipment for deep-sea drilling, including the now notorious “blowout preventer,” were untested at such depths.

On top of this, it has been documented that the Department of the Interior under the Obama administration took special legal actions to speed the Macondo well along toward production, specifically exempting BP from submitting a legally-required environmental impact statement.

In the rig’s last days, BP’s requests for approval of clearly hazardous decisions were rubber-stamped in a matter of minutes by the Department of the Interior. Then, as the blowout spiraled out of control, the rig’s untested blowout preventer failed, the alarm system was partially disabled, and there proved to be no adequate plan in place to evacuate the rig and respond to a fire. Indeed, it is believed that the haphazard attempt to extinguish the fire by dumping massive quantities of water on it actually capsized the rig, likely exacerbating the blowout as the riser pipe crumpled beneath the sinking vessel.

This total regulatory breakdown before a series of profit-driven decisions by BP killed 11 rig workers, leaving behind widows, children, fathers and mothers. And yet not a single representative of BP has been fired or disciplined, much less charged with a crime. No significant official from the Obama administration has stepped down.

As disastrous as it was, the explosion turned out to be only the beginning. The very conditions that led to the blowout—the subordination of all concerns to profit—has dictated every decision in the response to the disaster.

In the initial 48 hours after the explosion, with the fate of the missing workers still unknown, survivors from the rig were quarantined—not for medical evaluation, but so that attorneys from rig-owner Transocean could “debrief” them and blackmail them into singing legal waivers.

For over a week the Obama administration disregarded the spill—besides emphasizing that the “incident,” as Obama first dubbed it, would in no way lessen its support for the lifting of a moratorium on offshore drilling up and down the Atlantic Coast. “In all honesty I doubt this is the first accident that has happened and I doubt it will be the last,” declared White House Press Secretary Robert Gibbs several days after the explosion.

After belatedly recognizing the dimensions of the disaster, Obama placed BP in charge of the response and the cleanup, converting the US Coast Guard into a private security force used to block the media and citizens from seeing what the gusher had wrought. The clear conflict of interest in placing the criminal in charge of its crime scene was disregarded; only BP, it was declared, had the expertise to handle the spill.

For months BP and the Obama administration sought to minimize the catastrophe. Lie after lie was exposed only under the scrutiny of independent scientists, who were able to calculate based on what little they were allowed to see that this disaster was far worse than the public was being told.

The subordination of the response and the cleanup to BP’s financial interests only served to intensify the disaster. With the rate of the spill intentionally underestimated—early on by a factor of 100—there was no way an adequate response could be mounted. At the same time, BP’s control over efforts to stop the gusher resulted in one debacle after another—recorded in the now-infamous words “containment dome,” “top hat,” “top kill,” and “junk shot.”

As the epic scale of the disaster became undeniable in late June, the Obama administration moved to defend BP from a feared avalanche of litigation. This is the role assigned to ruling class fixer Kenneth Feinberg and his Independent Claims Facility, a fact that the “claims czar” has not hid. “Investors in BP should know that there’s now an alternative to the litigation system in place,” he told CNBC last month. “I think that’s a really helpful sign if you’re an investor.”

BP’s $20 billion escrow will ostensibly cover all costs for response and cleanup, plus all damages. BP will be allowed to fund the escrow over four years—or maybe not; the Obama administration has insisted $20 billion is “neither a floor nor a ceiling.” BP will also write off $10 billion in taxes in the US and an undisclosed sum in the United Kingdom, it recently announced.

In a series of public statements since the founding of the fund, Feinberg has outlined policies that will prevent the vast majority of Gulf workers and residents from receiving any compensation for their losses.

Now, 100 days into the disaster, BP’s reported success in finally capping the Macondo well has, predictably, provided occasion for the Obama administration to “move on” and for the media to push the worst environmental catastrophe in North American history to the back pages.

Whether or not the oil has been stopped definitively is far from certain. There remain concerns that the well itself or even the surrounding seabed could be dangerously compromised.

The one certainty is that the American people are not being told the truth. Since the April 20 blowout the record of public statements from both BP and the White House reads like a catalog of lies and evasions.

Even if the gusher is at an end, the disaster has inflicted a devastating blow upon the Gulf. According to a range of official and scientific estimates, somewhere between 95 million and 327 million gallons of heavy crude have been dumped into the Gulf. BP’s own stated goal for on-surface ship receiving capacity—3.4 million gallons per day—would indicate that the total spill volume is in the neighborhood of 260 million gallons. On top of this, upwards of one million gallons of poisonous dispersants have been dumped.

Oil has fouled the coastline in Texas, Florida, Alabama, Mississippi, and Louisiana, where it threatens the Mississippi Delta—New Orleans’ main barrier to hurricanes—with irreparable damage. Massive underwater clouds of hydrocarbons are moving through the Gulf, depleting oxygen from layers of the water column. Entire species may vanish from the region.

The Gulf fishing industry has been shut down and is unlikely to recover for many years, if ever. The tourism industry has also been punished, bringing many proprietors to the brink of bankruptcy. Home values, already in sharp decline, especially in Florida, will be forced down further. Over 100,000 jobs are immediately threatened by the disaster, according to one estimate. Tax revenue in the Gulf States will further contract, resulting in more layoffs of state workers and deeper cuts to social spending and education. A number of doctors and scientists have warned of the likelihood for a public health disaster that will last for years, particularly among cleanup workers, whom BP has denied basic training and safety equipment such as respirators.

In the face of this disaster, $20 billion—even were it to be fully realized—is a pittance. This miserly sum ensures that the limited cleanup operations already underway will be largely scotched and the ecological and human health disaster left to fester. Fishermen and tens of thousands of tourism industry workers will be dumped into the greatest unemployment crisis since the Great Depression.

This cannot be allowed. All those who have suffered due to the spill must be made financially whole. Hundreds of billions must be made available for a massive cleanup campaign run by scientists, engineers, and public health experts, independent of BP and the government.

The "new normal": More than one in five Americans at risk of destitution

The “new normal”: More than one in five Americans at risk of destitution

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More than one in five Americans in 2009 suffered a household income loss of 25 percent or more over the previous year, according to a new report sponsored by the Rockefeller Foundation and entitled “Economic Security at Risk.” The report documents a steady increase in economic insecurity since the 1960s, and concludes that annual income losses of 25 percent or greater increased by 49.9 percent between 1985 and 2009.

“Putting this trend in terms of population,” the report states, “approximately 46 million Americans were counted as insecure in 2007, up from 28 million in 1985.” The head of the research team that prepared the report, Yale University Professor Jacob Hacker, told an interviewer, “What we’re seeing, basically, is what we’re calling ‘the new normal.’ We’re slowly ratcheting up this level of economic insecurity.”

The research group has devised what it calls the Economic Security Index (ESI), which measures the share of Americans in a given year who experience at least a 25 percent decline in their available household income and who lack a financial safety net to replace the lost income. Such a sudden income drop—usually due to the loss of employment, high medical expenses, or a combination of the two—often leaves people facing destitution.

The report does not include 2010, when long-term joblessness has become endemic. The ESI for this year will doubtless be considerably higher than for 2009.

The study notes that a staggering 60 percent of Americans experienced at least one income loss of 25 percent or more over the 1966-2006 period, and that losses of this size have become more common across most income sectors since the mid-1980s.

“Those with the most income and education have faced the least insecurity,” the report states. “The less affluent, those with limited education, African-Americans and Hispanics have faced the most. Virtually all groups, however, experienced significant increases in insecurity over the past 25 years.”

The study also found that the size of the typical income drop has grown, from 38.2 percent between 1985 and 1995 to 41.4 percent between 1997 and 2007. And the level of income insecurity relative to unemployment at any given point has risen over the past quarter century. In 1985, the unemployment rate was 7.2 percent and the ESI was 12 percent. In 2002, when the jobless rate was 5.8 percent, the ESI was 17 percent.

The report relates the protracted rise in economic insecurity to the explosive growth of both medical costs and household debt, and the decades-long increase in the concentration of wealth at the very top of the economic ladder. It notes the finding of the Congressional Budget Office that between 1979 and 2006 average after-tax income rose by 21 percent for the middle fifth of American households, but increased by 112 percent for the richest 10 percent of households and 256 percent for the top 1 percent.

The sharp rise in economic insecurity documented by the Rockefeller Foundation study is the outcome of a three-decade-long offensive by the American ruling class against the jobs, wages and living standards of the working class. This assault has only intensified since the eruption of the financial crisis in September 2008, which ushered in the worst recession since the 1930s. Under Obama, the drive to offload the crisis onto the working class has been stepped up, in the form of wage cuts, speedup and savage cuts in social spending at the state and local level.

The Obama administration extended the Wall Street bailout launched under Bush. It then signaled the intention of the ruling class to use mass unemployment to permanently lower the wages and conditions of American workers toward those of impoverished workers in Asia when its Auto Task Force drove General Motors and Chrysler into bankruptcy last year. This was done to impose new plant closures and layoffs and slash the wages of newly hired auto workers to half the previous level.

Next came the so-called health care “reform,” which will lower health costs for businesses and the government by rationing care and reducing benefits for tens of millions of workers and retirees. Since the passage of the health care overhaul, the administration has abandoned any economic stimulus measures in order to focus on slashing the budget deficit by attacking basic social programs upon which millions of working people rely.

The result of these policies is a record rise in corporate profits, based almost entirely on the reduction in labor costs through layoffs, wage and benefit cuts, and speedup. In many cases, companies have reported sharply higher profits, even though their sales and revenues have declined.

In an article headlined “Industries Find Surging Profits in Deeper Cuts,” the July 26 New York Times reported that US corporate profits jumped by 40 percent between late 2008 and the first quarter of 2010. It noted that by next year, analysts expect profit margins to reach 8.9 percent, a record high.

The Times wrote that among the S&P 500 companies that have reported their second-quarter results, 175 in all, more than one in ten had higher profits on lower sales, nearly twice the number in a typical quarter before the current recession. Among the firms that have reported earnings for the second quarter, revenues rose 6.9 percent on average while profits surged 42.3 percent.

The article cited the motorcycle producer Harley Davidson, which, despite falling sales, last week posted a $71 million profit, more than triple its profit a year ago. Last year the company cut 2,000 jobs, over a fifth of its work force, and plans to slash another 1,400 to 1,600 jobs by the end of next year. Harley stock surged 13 percent the day it released its quarterly results.

Other companies that have improved their bottom lines despite falling sales and revenues include General Electric, JPMorgan Chase, Hasbro and Ford. The latter’s North American operations are expected to earn more than $5 billion in 2010, despite a revenue plunge of $20 billion since 2005. Over the 2005-2010 period the company has slashed its North American workforce by nearly 50 percent.

The same day as the Times report, the Wall Street Journal ran an article noting that the financial markets are generally punishing companies that report expansion plans and rewarding those that plan either no new hiring or further layoffs.

This class-war policy is further enriching the financial aristocracy. The Wall Street Journal on Tuesday published its list of the past decade’s highest paid US corporate CEOs. At the top was Oracle chief executive Lawrence Ellison, who has pocketed $1.84 billion over the past ten years.

His average yearly take of $184 million helped Ellison compile his estimated fortune of $28 billion. Some idea of the lifestyle of Ellison and his fellow CEOs can be gleaned from the fact that the Oracle CEO owns several fighter jets, a $200 million estate in California complete with a man-made lake, and mansions in Malibu and Rhode Island.

The total income of the 25 CEOs on the Wall Street Journal list is $13.5 billion, an average of $540 million per executive over the decade.

Such avarice and obscene levels of wealth are the reverse side of growing economic insecurity, poverty, homelessness and hunger for millions of working people in America and billions more around the world.

Document Reveals Military Was Concerned About Gulf War Vets' Exposure to Depleted Uranium

Document Reveals Military Was Concerned About Gulf War Vets' Exposure to Depleted Uranium

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For years, the government has denied that depleted uranium (DU), a radioactive toxic waste left over from nuclear fission and added to munitions used in the Persian Gulf and Iraq wars, poisoned Iraqi civilians and veterans.

But a little-known 1993 Defense Department document written by then-Brigadier Gen. Eric Shinseki, now the secretary for the Department of Veterans Affairs (VA), shows that the Pentagon was concerned about DU contamination and the agency had ordered medical testing on all personnel that were exposed to the toxic substance.

Shinseki's memo, under the subject line, "Review of Draft to Congress - Health and Environmental Consequences of Depleted Uranium in the U.S. Army -- Action Memorandum," makes some small revisions to the details of these three orders from the DoD:

1. Provide adequate training for personnel who may come in contact with DU contaminated equipment.

2. Complete medical testing of all personnel exposed to DU in the Persian Gulf War.

3. Develop a plan for DU contaminated equipment recovery during future operations.

The VA, however, never conducted the medical tests, which may have deprived hundreds of thousands of veterans from receiving medical care to treat cancer and other diseases that result from exposure to DU.

The Armed Forces Health Surveillance Center recently reported that ten years of data confirm that service members tend to have higher rates of certain cancers compared to civilians, according to the Army Times. While researchers suspected that service members are diagnosed with cancer more often and at a younger age because they have guaranteed access to health care and mandatory exams, the data does not explain the disparities in diagnosis among branches of the military. For example, the rate of lung cancer among sailors is twice that of other branches, while Marines have much lower cancer rates across the board.

On Tuesday, the VA's ongoing failure to treat and diagnose Gulf War related illnesses came up during a House Veterans Affairs subcommittee hearing where a veterans advocacy group urged Shinseki to undertake comprehensive research on the correlation between chronic illness and exposure to DU in munitions during the Gulf War.

Armed with Shinseki's August 19, 1993 memo, Veterans for Common Sense (VCS), said the VA, and Shinseki in particular, have "a rare opportunity for a second chance."

"In military terms, VCS asks VA for a ceasefire," said Paul Sullivan, the executive director for VCS. "VCS urges VA leadership to stop and listen to our veterans before time runs out, as VA is killing veterans slowly with bureaucratic delays and mismanaged research that prevent us from receiving treatments or benefits in a timely manner."

Sullivan, himself a Gulf War veteran, told the subcommittee that the VA has refused to listen to scientists and veterans who are concerned about DU, leaving thousands of veterans suffering from chronic illnesses related to the conflict unsure if they will ever receive a solid diagnosis to justify the benefits and treatment they need.

Of the 697,000 men and woman who served in Gulf War operations Desert Storm and Desert Shield between 1990 and 1991, about 250,000 suffer from symptoms collectively known as "Gulf War Veterans' Illnesses." The symptoms include fatigue, weakness, gastrointestinal problems, cognitive dysfunction, sleep disturbances, persistent headaches, skin rashes, respiratory conditions and mood changes, according to the VA.

The VCS also petitioned Shinseki to investigate the 2009 termination of a $75 million research project on Gulf War illnesses at the University of Texas medical center. Last year the VCS filed a Freedom of Information Act (FOIA) request for records of the "internal sabotage" of Gulf War Veterans Illnesses research and the intentional delaying of research and treatment, according to Sullivan. The VA has yet to release any documents about the impeded research, and VCS filed a FOIA appeal on June 29.

Sullivan said the VCS simply wants the government to support independent testing on veterans exposed to DU, but the Department of Defense prefers a "don't look, don't find policy."

"As a Gulf War veteran, I have watched too many of my friends die without answers, without treatment, and without benefits," Sullivan said. "In a few cases, veterans completed suicide due to Gulf War illness and the frustration of dealing with VA."

Sullivan testified as disturbing reports have emerged in recent months from Fallujah, Iraq, about the skyrocketing rates of birth defects and cancer, which are being blamed on DU-laced bombs and munitions used by US and British forces during a brutal coalition assault on the city in 2004. Iraqi human rights officials are reportedly planning to file a lawsuit.

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DU is a dense metal added to munitions and bombs to pierce tanks and armor, and the military seems to chose unrestricted use of the radioactive substance over its soldiers' safety. Sullivan told Truthout that original medical tests ordered in a 1993 memo, which also called for personnel to be trained in dealing with contaminated equipment, were canceled after a training video scared soldiers.

"It was pulled after [the training video] was seen by some soldiers who became upset when they saw soldiers in moon suits holding Geiger counters, and the military realized that the training could present a problem in the battlefield where soldiers need to disregard exposure issues while trying to kill the enemy," Sullivan said.

Sullivan said that the DU "follow-up" program the VA consistently references was inadequate as it consisted of sporadic studies on only a small fraction of estimated 400,000 veterans exposed to the radioactive heavy metal.

"The VA does not listen to expert scientists. The VA does not even listen to Congress," Sullivan said in his testimony. "Two decades of inaction have already passed. Gulf War veterans urgently want to avoid the four decades of endless suffering endured by our Vietnam War veterans exposed to Agent Orange."

Sullivan said it took 40 years and an act of Congress to fund and sanction independent studies that proved the VA was responsible for providing benefits to soldier suffering from Agent Orange-related diseases.

The VA now recognizes that exposure to Agent Orange, an herbicide sprayed across Vietnam to kill foliage and expose guerrilla fighters, has plagued veterans with several deadly diseases and disorders.

VCS also advocated for the research on post-traumatic stress disorder (PTSD) that became the foundation of new PTSD rules, making it easier for veterans to receive benefits.

Last week, the VA announced $2.8 million worth of research on Gulf War Veterans' Illnesses, a sum Sullivan called "paltry." A VA press release announcing the research does not mention DU. The release references a recent Institute of Medicine report that identified the quarter million veterans affected by various symptoms associated with Gulf War illness, which "cannot be ascribed to any psychiatric disorder and likely result from genetic and environmental factors, although the data are not strong enough to draw conclusions about specific causes."

Popular medical science holds that kidney damage is the primary health problem associated with exposure to high amounts of DU. The heavy metal is 60 percent as radioactive as natural uranium, and is also linked to lung cancer in some cases and leukemia in even fewer cases, according to the World Health Organization (WHO).

Some critics have claimed that the WHO and governments have suppressed links between DU and cancer.

The debate over the use of DU in conventional warfare will rage on as the Fallujah fallout continues, but according to Sullivan, there is only one way for thousands of Gulf War veterans at home to know the truth and receive the relief they deserve.

"After 20 years of waiting, we refuse to wait on more empty promises from VA. The first step is for Secretary Shinseki and Chief of Staff Gingrich to immediately clean house of VA bureaucrats who have so utterly and miserably failed our veterans for too long," said Sullivan, vowing to petition Congress if the VA refuses to respond. "Our waiting must end now."

Leaks expose criminal war

Leaks expose criminal war

End U.S. occupation of Afghanistan

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The media explosion following the publication of reports of some 90,000 classified cables between U.S. officials may accelerate the struggle to end the imperialist occupation of Afghanistan.

Those thousands of people in the U.S. who have paid close attention to Afghanistan may have already known that the occupation was criminal, was based on a fraudulent argument and was collapsing. Now tens of millions of people share this knowledge. No longer can elected or appointed officials claim ignorance of U.S.-NATO war crimes or the war’s disastrous path.

The strategy debate within and outside the Barack Obama administration and the Pentagon had already hit the news. Gen. Stanley McChrystal’s firing and his replacement by Gen. David Petraeus made it public. This latest media blitz now brings it before the entire population of the U.S. and its reluctant NATO allies. It turns the generals’ crisis into a public debate.

Millions now also know that someone within the military machine, acting on a desire to stop U.S. war crimes, leaked these documents to the Wikileaks organization. There are undoubtedly others in the virtual belly of the militarist beast who understand their responsibility to humanity and will expose the truth and stop the crimes. The anti-war forces have a duty to defend these whistle-blowers and inspire others to follow suit.

Timing the publication

Wikileaks had arranged to release the 90,000 documents, covering the period from 2004 to 2009 in Afghanistan, to three powerful corporate media. The New York Times in the U.S., the Guardian in Britain and Der Spiegel in Germany, after analyzing and editing the documents over some months to remove some names, released them July 26. The Times had also informed the Obama administration on July 23 that it would publish them.

There followed secondary reports in thousands of newspaper and broadcast media stories, which are continuing on July 27. These stories have also evoked strong reactions from the U.S., Afghan and Pakistani governments.

The Obama administration attacked Wikileaks’ publication of the material, calling it “a crime” and claiming Wiki- leaks’ anti-war history makes it biased. The administration also claims that the documents put U.S. forces at risk, although no names are used and the cables involve no current operations.

The Times, which has supported the U.S. occupation of Afghanistan from October 2001 to the present day, put its own biased spin on the data. The Times’ coverage has minimized the importance of the information exposed in the cables and focused attention on the alleged role of Pakistan supporting the Taliban. This approach draws attention away from U.S.-NATO war crimes against Afghan civilians and the complete lack of a legitimate justification for the occupation.

The Guardian has a more nearly balanced coverage. This paper has published more articles critical of the occupation of Afghanistan. The Guardian has provided a type of indexing, making it possible to locate specific cables. If one were to read each cable in only three minutes, reading 12 hours a day, it would take over a year to read them all.

Pentagon Papers 2?

When Daniel Ellsberg released “the Pentagon Papers” in 1971 to a public that already opposed or had doubts about the U.S. war on Vietnam, their publication accelerated the anti-war movement. Ellsberg has likened the Wikileaks release to the scale of the earlier Pentagon Papers, although he points out that they don’t reveal top secret policy decisions.

The Pentagon Papers exposed the Lyndon Johnson administration’s lies about an alleged North Vietnamese patrol boat attack on U.S. destroyers in the Tonkin Gulf in August 1964. Johnson used this phony story as a pretext to bomb two major North Vietnamese cities, Hanoi and Haiphong, and to escalate the war.

Those active in the anti-war movement knew of this fraud long before the Pentagon Papers were released in 1971. Following the first bombing raids in 1964, Workers World editor-in-chief Deirdre Griswold and contributing editor Fred Goldstein stayed up all night to write a leaflet for Youth Against War and Fascism that nailed the alleged attack as a phony pretext for expanding the war. This writer distributed that leaflet at an all-day protest at the United Nations the next day.

But it took seven years of a failed criminal war and ever growing protests to make the Pentagon Papers happen. In turn, their publication exposed the fraud to the entire population, adding to the protests that helped to finally end the war. A small revolutionary group swimming against the tide then became the flood.

Perhaps the Wikileaks publication will inspire continued exposures of the criminal plans of the U.S. administrations to invade and occupy Afghanistan and Iraq at horrible costs to the local populations and to thousands of U.S. youths.

Defend the whistle-blowers

It is also important that anti-war forces defend those in the military and government who make the truth available to the public and expose the criminal war conspiracies of the various administrations. A GI who allegedly released these documents and an earlier video to Wikileaks, Spc. Bradley Manning, is currently being held in Kuwait by the Army. A petition supporting him can be signed at the International Action Center website (, among others.

W.House proposal would grant FBI access to Internet activity records without court order

White House proposal would ease FBI access to records of Internet activity

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The Obama administration is seeking to make it easier for the FBI to compel companies to turn over records of an individual's Internet activity without a court order if agents deem the information relevant to a terrorism or intelligence investigation.

The administration wants to add just four words -- "electronic communication transactional records" -- to a list of items that the law says the FBI may demand without a judge's approval. Government lawyers say this category of information includes the addresses to which an Internet user sends e-mail; the times and dates e-mail was sent and received; and possibly a user's browser history. It does not include, the lawyers hasten to point out, the "content" of e-mail or other Internet communication.

But what officials portray as a technical clarification designed to remedy a legal ambiguity strikes industry lawyers and privacy advocates as an expansion of the power the government wields through so-called national security letters. These missives, which can be issued by an FBI field office on its own authority, require the recipient to provide the requested information and to keep the request secret. They are the mechanism the government would use to obtain the electronic records.

Stewart A. Baker, a former senior Bush administration Homeland Security official, said the proposed change would broaden the bureau's authority. "It'll be faster and easier to get the data," said Baker, who practices national security and surveillance law. "And for some Internet providers, it'll mean giving a lot more information to the FBI in response to an NSL."

Many Internet service providers have resisted the government's demands to turn over electronic records, arguing that surveillance law as written does not allow them to do so, industry lawyers say. One senior administration government official, who would discuss the proposed change only on condition of anonymity, countered that "most" Internet or e-mail providers do turn over such data.

To critics, the move is another example of an administration retreating from campaign pledges to enhance civil liberties in relation to national security. The proposal is "incredibly bold, given the amount of electronic data the government is already getting," said Michelle Richardson, American Civil Liberties Union legislative counsel.

The critics say its effect would be to greatly expand the amount and type of personal data the government can obtain without a court order. "You're bringing a big category of data -- records reflecting who someone is communicating with in the digital world, Web browsing history and potentially location information -- outside of judicial review," said Michael Sussmann, a Justice Department lawyer under President Bill Clinton who now represents Internet and other firms.

Privacy concerns

The use of the national security letters to obtain personal data on Americans has prompted concern. The Justice Department issued 192,500 national security letters from 2003 to 2006, according to a 2008 inspector general report, which did not indicate how many were demands for Internet records. A 2007 IG report found numerous possible violations of FBI regulations, including the issuance of NSLs without having an approved investigation to justify the request. In two cases, the report found, agents used NSLs to request content information "not permitted by the [surveillance] statute."

One issue with both the proposal and the current law is that the phrase "electronic communication transactional records" is not defined anywhere in statute. "Our biggest concern is that an expanded NSL power might be used to obtain Internet search queries and Web histories detailing every Web site visited and every file downloaded," said Kevin Bankston, a senior staff attorney with the Electronic Frontier Foundation, which has sued AT&T for assisting the Bush administration's warrantless surveillance program.

He said he does not object to the government obtaining access to electronic records, provided it has a judge's approval.

Senior administration officials said the proposal was prompted by a desire to overcome concerns and resistance from Internet and other companies that the existing statute did not allow them to provide such data without a court-approved order. "The statute as written causes confusion and the potential for unnecessary litigation," Justice Department spokesman Dean Boyd said. "This clarification will not allow the government to obtain or collect new categories of information, but it seeks to clarify what Congress intended when the statute was amended in 1993."

The administration has asked Congress to amend the statute, the Electronic Communications Privacy Act, in the fiscal year that begins in October.

Administration officials noted that the act specifies in one clause that Internet and other companies have a duty to provide electronic communication transactional records to the FBI in response to a national security letter.

But the next clause specifies only four categories of basic subscriber data that the FBI may seek: name, address, length of service and toll billing records. There is no reference to electronic communication transactional records.

Same as phone records?

The officials said the transactional information at issue, which does not include Internet search queries, is the functional equivalent of telephone toll billing records, which the FBI can obtain without court authorization. Learning the e-mail addresses to which an Internet user sends messages, they said, is no different than obtaining a list of numbers called by a telephone user.

Obtaining such records with an NSL, as opposed to a court order, "allows us to intercede in plots earlier than we would if our hands were tied and we were unable to get this data in a way that was quick and efficient," the senior administration official said.

But the value of such data is the reason a court should approve its disclosure, said Greg Nojeim, senior counsel at the Center for Democracy and Technology. "It's much more sensitive than the other information, like name, address and telephone number, that the FBI gets with national security letters," he said. "It shows associational information protected by the First Amendment and is much less public than things like where you live."

A Nov. 5, 2008, opinion from the Justice Department's Office of Legal Counsel, whose opinions are binding on the executive branch, made clear that the four categories of basic subscriber information the FBI may obtain with an NSL were "exhaustive."

This opinion, said Sussmann, the former Clinton administration lawyer, caused many companies to reevaluate the scope of what could be provided in response to an NSL. "The OLC opinion removed the ambiguity," he said. "Providers now are limited to the four corners of what the opinion says they can give out. Those who give more do so at their own risk."

Marc Zwillinger, an attorney for Internet companies, said some providers are not giving the FBI more than the four categories specified. He added that with the rise of social networking, the government's move could open a significant amount of Internet activity to government surveillance without judicial authorization. "A Facebook friend request -- is that like a phone call or an e-mail? Is that something they would sweep in under an NSL? They certainly aren't getting that now."

Cameron calls Gaza 'prison camp'

Cameron calls Gaza 'prison camp'

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British Prime Minister David Cameron called Gaza a "prison camp" on Tuesday, a blunt description from a major Western leader about the besieged Palestinian territory.

Cameron made the remarks in the Turkish capital of Ankara, which he was visiting to forge a new relationship with Turkey and show his support for Turkish membership in the European Union.

"Let me also be clear that the situation in Gaza has to change. Humanitarian goods and people must flow in both directions. Gaza cannot and must not be allowed to remain a prison camp," Cameron said, according to a transcript of the speech provided by his office.

Residents of Gaza say they have suffered greatly under an Israeli goods blockade implemented since Hamas took control of the territory after elections in 2006. But Israel says its tough measures are necessary to stop weapons from reaching Hamas militants intent on destroying Israel.

Ron Prosor, Israel's ambassador to Britain, reacted quickly to the prime minister's remark, saying that Hamas is responsible for the misery in Gaza.

"The people of Gaza are the prisoners of the terrorist organization Hamas," Prosor said in a statement. "The situation in Gaza is the direct result of Hamas' rule and priorities."

The ambassador also raised the issue of Gilad Shalit, the Israeli soldier taken hostage four years ago who is being held in Gaza.

"We know that the prime minister would also share our grave concerns about our own prisoner in the Gaza Strip, Gilad Shalit, who has been held hostage there for over four years, without receiving a single Red Cross visit," Prosor said.

Cameron's comments came in a country that once had close relations with Israel, but ties between the two nations have been strained recently over the Jewish state's policies toward the Palestinian territory.

Turkey was incensed at the May 31 Israeli commando raid against an aid flotilla in the Mediterranean Sea. Violence broke out on one of the ships in the flotilla, the Turkish Mavi Marmara, leaving nine activists -- eight Turks and a Turkish-American dual national -- dead.

Cameron -- who touted Turkey's unique ability to make peace between Israel and the Arab world -- stressed that the Israeli action was "completely unacceptable." He said he told Israeli Prime Minister Benjamin Netanyahu that Britain expects Israel's inquiry into the raid to be "swift, transparent and rigorous."

He was also optimistic that the recently frayed alliance can continue to be friendly.

"Just as Turkey is playing a pivotal role in Afghanistan, it can also do so in the Middle East. Turkey's relationships in the region, both with Israel and the Arab world, are of incalculable value. No other country has the same potential to build understanding between Israel and the Arab world. I know that Gaza has led to real strains in Turkey's relationship with Israel, but Turkey is a friend of Israel, and I urge Turkey, and Israel, not to give up on that friendship," Cameron said.

He also believes Turkey can also help bring together Palestinians and Israelis as they work to meet in direct negotations.

"But as, hopefully, we move in the coming weeks to direct talks between Israel and the Palestinians, so it is Turkey that can make the case for peace and Turkey that can help press the parties to come together and point the way to a just and viable solution," the prime minister said.

Leaked files indicate U.S. pays Afghan media to run friendly stories

Leaked files indicate U.S. pays Afghan media to run friendly stories

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Buried among the 92,000 classified documents released Sunday by WikiLeaks is some intriguing evidence that the U.S. military in Afghanistan has adopted a PR strategy that got it into trouble in Iraq: paying local media outlets to run friendly stories.

Several reports from Army psychological operations units and provincial reconstruction teams (also known as PRTs, civilian-military hybrids tasked with rebuilding Afghanistan) show that local Afghan radio stations were under contract to air content produced by the United States. Other reports show U.S. military personnel apparently referring to Afghan reporters as "our journalists" and directing them in how to do their jobs.

Such close collaboration between local media and U.S. forces has been a headache for the Pentagon in the past: In 2005, Pentagon contractor the Lincoln Group was caught paying Iraqi newspapers to run stories written by American soldiers, causing the United States considerable embarrassment.

In one of the WikiLeaks documents, a PRT member reports delivering "12 hours of PSYOP Radio Content Programming" to two radio stations in the province of Ghazni in 2008, and paying one of them "$3,900 for Radio Content Programming air time for the month of October":

"The PRT provided 12 hours of PSYOP Radio Content Programming to Radio Ghaznwyan FM Station and Radio Ghazni AM/FM Station for week of 6-12 Nov. Topics included Afghanistan History, Law, and Human Rights in both Dari and Pashto, and a spreadsheet with the specific radio content programming for the week of 6-12 Nov will be forward sepcor to SPARTAN. Additionally, PRT paid Radio Ghaznwyan $3,900 for Radio Content Programming air time for the month of October."

Radio Ghaznawiyaan was established and funded by the Agency for International Development, but USAID has described it in the past as a success story for local independent journalism launched with American help. So its listeners may be surprised to learn that it is an outlet for paid U.S. "PSYOP radio content."

Another message, from 2008, records a meeting that members of the Bagram PRT held with Rahimullah Samander, the news director of the Wakht News Agency and president of the Afghan Independent Journalists Association. Samander, the memo says, "proposed a partnership with the PRT" and "offered to include PRT news articles and photos on his news service":

"Kapisa team met with a Kabul radio representative at the Kapisa TV and Radio Station. Met with Rahimullah Samander, news director for Wakht News Agency and president of the Afghan Independent Journalists Association. He provided information about his organizations and proposed a partnership with the PRT. He offered to include PRT news articles and photos on his news service. The PRT IO recommended a conference including Afghan and US military journalists to collaborate and share ideas. Samander hopes to increase the presence of his agency in Kapisa province."

Another 2008 memo records a similar meeting among psychological operations soldiers, Jalalabad PRT members, and representatives of Radio Television Afghanistan and the Shaiq Network. Both of these news organizations were directly contracted by psychological operations units to air friendly content:

"The TF has a new PSYOP contract with RTA and a continuing PSYOP contract with Shaiq Network; additionally, these are key IO mediums. The purpose of the meetings were to introduce new HQ PSYOP members to the RTA and Shaiq managers, provide initial payment for the RTA contract, receive a PRT Advertising Campaign contract bid proposal from Shaiq (for the pending garbage removal initiative in Jalalabad), and tour both facilities."

The report, written by an Army information operations officer, describes the Afghan journalists as "very pro-CF [coalition forces]" and surmises that "there is a lot they are willing to do for the CF."

Two other messages seem to show U.S. soldiers referring to local Afghan media as extensions of their own units rather than independent reporters. In 2007, after insurgents attacked an Afghan National Police convoy, a member of Task Force Rock wrote that "we ... had our journalist conduct an interview with the Afghan National Police District Chief who condemned the attacks on their fellow countrymen." In another 2007 message, a Task Force Diablo soldier reported that after Taliban gunmen assassinated a local businessman, leading village elders to question the Afghan police's ability to keep the peace, "we were able to send the journalist in with our cultural advisor to speak to the elders."

An inquiry after the Lincoln Group revelations found that paying foreign news outlets to run friendly stories did not violate Department of Defense policy or U.S. law, though the practice seems to have been discontinued in Iraq.

A Defense Department spokesperson did not immediately return an e-mail seeking comment.

Fallen Soldiers' Families Denied Cash as Insurers Profit

Fallen Soldiers' Families Denied Cash as Insurers Profit

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The package arrived at Cindy Lohman’s home in Great Mills, Maryland, just two weeks after she learned that her son, Ryan, a 24-year-old Army sergeant, had been killed by a bomb in Afghanistan. It was a thick, 9-inch-by- 12-inch envelope from Prudential Financial Inc., which handles life insurance for the Department of Veterans Affairs.

Inside was a letter from Prudential about Ryan’s $400,000 policy. And there was something else, which looked like a checkbook. The letter told Lohman that the full amount of her payout would be placed in a convenient interest-bearing account, allowing her time to decide how to use the benefit.

“You can hold the money in the account for safekeeping for as long as you like,” the letter said. In tiny print, in a disclaimer that Lohman says she didn’t notice, Prudential disclosed that what it called its Alliance Account was not guaranteed by the Federal Deposit Insurance Corp., Bloomberg Markets magazine reports in its September issue.

Lohman, 52, left the money untouched for six months after her son’s August 2008 death.

“It’s like you’re paying me off because my child was killed,” she says. “It was a consolation prize that I didn’t want.”

As time went on, she says, she tried to use one of the “checks” to buy a bed, and the salesman rejected it. That happened again this year, she says, when she went to a Target store to purchase a camera on Armed Forces Day, May 15.

‘I’m Shocked’

Lohman, a public health nurse who helps special-needs children, says she had always believed that her son’s life insurance funds were in a bank insured by the FDIC. That money -- like $28 billion in 1 million death-benefit accounts managed by insurers -- wasn’t actually sitting in a bank.

It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.

“I’m shocked,” says Lohman, breaking into tears as she learns how the Alliance Account works. “It’s a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier. Is there anything lower than that?”

Millions of bereaved Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing what they call “checkbooks” to survivors, instead of paying them lump sums, extends well beyond the military.

Touching Americans

In the past decade, these so-called retained-asset accounts have become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the U.S., and the industry holds $4.6 trillion in assets, according to the American Council of Life Insurers.

Insurance companies tell survivors that their money is put in a secure account. Neither Prudential nor MetLife Inc., the largest life insurer in the U.S., segregates death benefits into a separate fund.

Newark, New Jersey-based Prudential, the second-largest life insurer, holds payouts in its own general account, according to regulatory filings.

New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.”

No FDIC Insurance

The company’s letter omits that the money is in MetLife’s corporate investment account, isn’t in a bank and has no FDIC insurance.

“All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.

Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks with accounts insured by the FDIC up to $250,000.

Bank of New York Mellon Corp. handles the paperwork and monthly statements for customers with MetLife “checking accounts.” The insurance company, not the bank, most recently reported holding about $10 billion in death benefits, in 2008.

The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, who wrote ‘Stempel on Insurance Contracts’ (Aspen Publishers, 2009).

‘Bad Faith’

“It’s institutionalized bad faith,” he says. “In my view, this is a scheme to defraud by inducing the policyholder’s beneficiary to let the life insurance company retain assets they’re not entitled to. It’s turning death claims into a profit center.”

Prudential’s Alliance Account is helpful to families of soldiers, says company spokesman Bob DeFillippo.

“For some families, the account is the difference between earning interest on a large amount of money and letting it sit idle,” he says. Prudential follows the law, he says.

“We fully and regularly disclose the nature and terms of the account to account holders,” DeFillippo says. “We make it clear that the money can be withdrawn at any time by simply writing a draft.”

Metlife spokesman Joseph Madden says his company’s customers are very happy with the Total Control Account.

‘Overwhelmingly Positive’

“The feedback from TCA customers has been overwhelmingly positive,” he says. “The TCA affords beneficiaries security, peace of mind and time to make an informed decision -- while earning interest in the interim.”

Madden says the company was paying some survivors 0.5 percent in July while some others got 1.5 percent or 3 percent, depending on the age and origin of insurance accounts. The accounts don’t violate any laws, Madden says, and are authorized by New York state insurance law.

Insurers are holding onto at least $28 billion owed to survivors, according to three firms that handle retained-asset accounts for about 130 life insurance companies. There are no public records showing how much companies are holding in these accounts.

The “checks” that Cindy Lohman wrote, the ones rejected by retailers, were actually drafts, or IOUs, issued by Prudential. Even though the “checks” had the name of JPMorgan Chase & Co. on them, Lohman’s funds weren’t in that bank; they were held by Prudential.

Federal Bank Law

Before a check could clear, Prudential would have to send money to JPMorgan, bank spokesman John Murray says.

Insurance companies -- in addition to holding onto the money of survivors, paying them uncompetitive interest rates and giving them misleading guarantees -- may be violating a federal bank law. A 1933 statute makes it a felony for any company to accept deposits without state or federal authorization.

That means only banks or credit unions can accept deposits, says Arthur Wilmarth, a professor at George Washington University Law School in Washington who has testified before Congress about banking regulations.

If a prosecutor pressed an insurance company, retained- asset accounts could be outlawed because insurers say they deposit money into these accounts and don’t have bank charters or banking regulation, Wilmarth says. MetLife also offers its own version of certificates of deposit.

“If it swims, quacks and flies like a duck, the court could decide that it is indeed a duck,” he says. “You then potentially could have a criminal violation.”

Potential Bank Run

This unregulated quasi-banking system operated by insurers has none of the protections of the actual banking system. Lawrence Baxter, a professor at Duke University School of Law in Durham, North Carolina, says the potential exists for a catastrophe.

If one insurer is unable to meet its obligations on retained-asset accounts, people could lose faith in other companies and demand immediate payment, triggering a panic, says Baxter, who has consulted with federal agencies on financial regulation.

The government established the FDIC in 1933 after frantic depositors tried to pull their money from banks. The federal government has no such program for death-benefit accounts.

“There’s more than $25 billion out there in these accounts,” Baxter says. “A run could be triggered immediately by one insurance company not being able to honor its payout. The whole point of creating the FDIC was to put an end to bank runs.”

No Federal Regulation

The sweeping financial regulatory legislation signed by President Barack Obama on July 21 doesn’t address retained-asset accounts. It creates a new federal insurance office, which won’t be a regulator. It will collect information, monitor the industry for systemic risk and consult with state insurance regulators.

An industry with $19.1 trillion in potential liabilities will remain unregulated by the federal government. In 2008, insurers approved claims totaling $60 billion in death benefits, according to the life insurance council.

The federal government doesn’t even regulate the life insurance it supplies, via MetLife, to its own employees in a program called Federal Employees’ Group Life Insurance. As the VA does for soldiers, the U.S. Office of Personnel Management sends handbook to nonmilitary government workers -- some 4 million active employees and retirees.

The handbook says their life insurance policies automatically pay out death benefits in the form of a “money- market-account checkbook.” The 217-page handbook omits that the money isn’t FDIC insured and will stay with MetLife until someone writes a “check.”

‘Unfair Advantage’

This lack of disclosure is unconscionable, says Harvey Goldschmid, a commissioner of the U.S. Securities and Exchange Commission from 2002 to 2005.

“I can’t imagine why bank regulators haven’t been requiring a prominent ‘no FDIC insurance’ disclosure,” says Goldschmid, who’s now a law professor at Columbia University in New York. “This system works very badly for the bereaved. It takes unfair advantage of people at their time of weakness.”

The closest relative to retained-asset accounts may be money-market mutual funds, which are pools of cash invested in short-term debt securities.

Money Market Rules

The SEC requires fund companies to warn investors that money market funds don’t have FDIC insurance. It also mandates that fund managers provide a prospectus, that they invest in specific types of safe debt and that they post a detailed schedule of their investments monthly on their websites.

Insurers’ retained-asset accounts have none of those regulatory protections.

A June 2009 MetLife standard condolence letter to survivors leaves out that accounts aren’t in a bank and aren’t federally insured. In June 2010, 25 years after MetLife invented retained- asset accounts, the company released a customer agreement that does disclose that retained assets aren’t in a money market account nor in a bank and that they have no FDIC insurance.

“The assets backing the Total Control Accounts are maintained in MetLife’s general account and are subject to MetLife’s creditors,” the agreement says. That language contradicts the federal employee handbook, which says survivors get a money market account.

Gerry Goldsholle, the man who invented retained-asset accounts, says MetLife makes $100 million to $300 million a year from investment returns on the death benefits it holds. A former president of MetLife Marketing Corp., Goldsholle, 69, devised the accounts in 1984. He’s now a lawyer in private practice in Sausalito, California.

‘This Is Crazy’

Goldsholle says he pondered the billions of dollars of death-benefit proceeds the company paid out each year.

“I looked at this and said this is crazy,” says Goldsholle, who left the firm in 1991. “What are we doing to retain some of this money? It’s very expensive to bring money in the front door of an insurance company. You’re paying very large commissions and sales expenses.”

So he came up with a way for MetLife to hold onto death benefits.

“The company would win because we would make a nice spread on the money,” Goldsholle says, while customers would earn interest on their accounts. MetLife, he says, can earn 1 to 3 percentage points more from its investment income -- mostly from bonds -- than it pays out to survivors.


The accounts Goldsholle invented have spread much faster than the ability of state regulators to track them -- or even to understand how they work. Ted Hamby, North Carolina’s deputy insurance commissioner for life and health, says he believes retained-asset accounts have FDIC protection.

“Whatever money is on deposit in that checking account will be insured, up to the limits of the FDIC,” he says. He’s wrong. No retained-asset accounts have FDIC coverage.

In Connecticut, where 106 insurance companies are based, state insurance department manager for market conduct Kurt Swan also says that retained-asset accounts are kept in banks, with FDIC coverage.

“I think they’re just trying to offer some flexibility to the beneficiary,” he says. Swan and his colleague, William Arfanis, the department’s principal financial examiner, both say the insurers don’t profit from the retained-asset accounts. That too is wrong. The companies do earn investment gains on death benefits.

Some Rules

Just six states had any rules for retained-asset accounts as of July 2009, according to the National Association of Insurance Commissioners. Arkansas, Colorado, Kansas, Nevada, North Carolina and North Dakota require insurers to disclose fees and interest rates and to tell survivors they may withdraw all of the money by writing a single check.

Maryland, which isn’t on the NAIC list, also has rules.

Pennsylvania Insurance Commissioner Joel Ario, whose state has no rules for retained-asset accounts, says he has asked his staff to prepare a regulation forbidding insurance companies from using such accounts as the default method of paying a death claim.

“I haven’t heard a plausible argument about why these accounts are better for the consumer,” Ario says.

If state insurance regulators have paid scant attention to retained-asset accounts, state bank regulators have taken an even more hands-off approach.

‘Not Drawn Attention’

“Quite honestly, we deal with issues that our members want us to deal with,” says Michael Stevens, senior vice president for regulatory policy at the Washington-based Conference of State Bank Supervisors. “This is not one that has drawn their attention.”

Three companies have not only noticed but have also profited by handling retained-asset accounts for insurers. Open Solutions Inc., based in Glastonbury, Connecticut, oversees 400,000 accounts for 67 insurance companies.

Open Solutions sends out “checkbooks,” prints periodic statements and computes accrued interest for accounts with total deposits of $10 billion, says Jay Woldar, director of sales and account management at Open Solutions.

One of its competitors, Bank of New York Mellon, administers more than 500,000 retained-asset accounts holding a total of $14 billion, including MetLife’s retained assets. Chicago-based Northern Trust Corp. handles about $4 billion in 125,000 accounts, spokesman John O’Connell says.

Survivors generally don’t touch these accounts immediately.

Accounts Stay Opened

“About 40 percent of the money stays in for more than a year,” Woldar says. Insurers can have use of survivors’ money for years, even decades, says Randi Lichtenstein, a product line manager at Bank of New York.

“They can stick around for quite a while,” she says. “There are accounts that all insurance companies have on these platforms that go back 10, 15, 20 years.”

MetLife’s Madden says most of its customers’ retained-asset accounts are closed within one year. About 28 percent of survivors of soldiers and veterans keep their retained-asset accounts open for more than two years, the VA says.

During a routine audit completed in 2004, the New York State Insurance Department found that 1,476 retained-asset accounts, worth a total of $33.5 million, at Hartford, Connecticut-based Phoenix Life Insurance Co., had been dormant for more than three years.

In New York, funds in an account that remains dormant for more than three years may be turned over to the state. Phoenix spokeswoman Alice Ericson says the company now has a policy of sending letters to people whose accounts have been inactive for two years.

Inactive Accounts

Almost one-third of the 6,890 retained-asset accounts run by Mony Life Insurance Co. were inactive for more than three years, New York auditors found in 2002. Mony is now owned by Axa SA, Europe’s second-largest insurer by market value.

A few people have sued insurers over the use of retained- asset accounts. Prudential won a lawsuit in 2009 in which a survivor complained about the Alliance Account. MetLife has a case pending in which a survivor says that she was cheated by the retained-asset account. In court-filed papers, MetLife denies any wrongdoing.

There has been only one ruling by a federal appellate court on the substance of such accounts -- and it went against an insurance company.

After a federal judge in Boston dismissed a policyholder suit claiming that Chattanooga, Tennessee-based insurer Unum Group was stealing account earnings from survivors, the U.S. Court of Appeals for the First Circuit overruled the lower court in 2008. It reinstated the case.

‘Euphemistically Named’

“The euphemistically named ‘Security Account,’ accompanied with a checkbook, was no more than an IOU which did not transfer the funds to which the beneficiaries were entitled out of the plan assets,” the three-judge panel wrote.

Unum spokeswoman Mary Clarke Guenther says retained-asset accounts are a commonly accepted practice in the industry. The case is pending.

Absent regulatory or legal intervention, bereaved family members like Cindy Lohman will continue to find death benefits going into retained-asset accounts. Her son, Ryan, posthumously received a Purple Heart and Bronze Star Medal for sacrificing his life to save fellow soldiers in Afghanistan in August 2008.

He had ordered a Humvee to swerve to avoid an explosive device, exposing himself to its deadly blast.

‘Accept The Reality’

Three days after learning of her son’s death, Lohman says, an Army casualty assistance officer came to her home, explaining that Ryan had a life insurance policy and that her signature was needed to release the money.

“By signing that, it forced me to accept the reality that he was dead and not coming back,” she says.

Since 1999, the VA has allowed Prudential to send survivors “checkbooks” tied to its Alliance Account. In 2009 alone, the families of U.S. soldiers and veterans were supposed to be paid death benefits totaling $1 billion immediately, according to their insurance policies. They weren’t.

Prudential’s VA policies promise either a lump sum payout or 36 monthly payments. About 90 percent of survivors, including Lohman, choose to receive the full amount upfront. When they do, they don’t get a check; they get a “checkbook.”

Under a 2008 law, survivors covered by Prudential’s VA policy are allowed one year to put death benefits into a Roth IRA, allowing them to earn investment gains for the rest of their lives tax-free. Prudential never informed Lohman, she says.

‘If They Had Told Me’

“I definitely would have done that if they had told me,” Lohman says.

Even Stephen Wurtz, deputy assistant director for insurance at the VA, who has overseen the insurance program for 25 years, has been kept in the dark by Prudential.

“Prudential runs the program on a cost-reimbursement basis only,” he initially said, referring to the $4.2 million in fees the VA paid Prudential in 2009. “They’re really good guys. They do it patriotically. They don’t make any money from the Alliance Account.”

Wurtz, 62, said he had believed that the Alliance Account money went into a bank. After he learned that the payouts actually stayed in Prudential’s general fund, Wurtz says, he asked Prudential how much money the insurance company made from these accounts and how many dollars it held in retained assets.

Prudential declined to answer, saying that information was proprietary, Wurtz says.

‘Maybe I Didn’t’

Prudential, which has had the insurance contract with the VA since 1965, pitched the checkbook payout to the VA in 1999 as an added benefit to survivors, Wurtz says. The government agency accepted Prudential’s offer, he says.

“Maybe I didn’t ask enough questions,” he says.

Printed on each “check,” next to “Prudential’s Alliance Account” is the name of JPMorgan, the second-biggest U.S. bank by assets. JPMorgan spokesman Murray declined to say how much the bank is paid for its role with Prudential.

The way Prudential has set up the “checks” implies that JPMorgan stands behind the accounts and that they are thus backed by the FDIC, Duke’s Baxter says.

“That’s misleading the beneficiaries,” he says.

“We disclose the roles of all companies involved in administering these accounts,” Prudential’s DeFillippo says. JPMorgan’s Murray declined to comment.

Prudential’s general account earned 4.4 percent in 2009, mostly from bond investments, according to SEC filings. The company has paid survivors 0.5 percent in 2010.

‘It’s Shameful’

“It’s shameful that an insurance company is stealing money from the families of our fallen servicemen,” says Paul Sullivan, who served in the 1991 Gulf War as an Army cavalry scout and is now executive director of Veterans for Common Sense, a nonprofit advocacy group based in Washington. “I’m outraged.”

Sullivan, a project manager at the VA’s benefits unit from 2000 to 2006, says he was never told Prudential kept money and earned investment gains from soldiers’ insurance payouts instead of sending it to survivors.

“There shouldn’t be secret profits,” he says. “This should be transparent. The lack of oversight is appalling.”

It’s not much different for the 4 million nonmilitary U.S. government employees and retirees -- including staff of the FDIC -- covered by MetLife policies. That program, begun in 1965, averages more than $2 billion in death benefits claimed every year, the government says.

Payouts are handled by the Office of Federal Employees’ Group Life Insurance. That makes it look like the government is taking care of its employees’ insurance coverage. It isn’t. That “office” is a unit of MetLife.

MetLife Holds the Money

Edmund Byrnes, a spokesman for the Office of Personnel Management, which oversees MetLife’s federal employee contract, says MetLife segregates death benefits into beneficiary accounts after it approves death claims.

“Once MetLife transfers the funds to the Total Control Account, the monies are no longer under MetLife’s control,” Byrnes says.

MetLife spokesman Madden says something different.

“The assets that back the liabilities on all the TCAs are placed in MetLife’s general account,” he says.

Back at the Veterans Affairs office, Deputy Assistant Director Wurtz, who’s a civilian employee, says he now understands for the first time that since he’s covered by the federal insurance program, his own wife could receive a MetLife “checkbook” someday.

‘Ripping Off Their Own’

“Uncle Sam is ripping off their own,” Wurtz says. “My wife would get the money, and they would blood-suck some of it out of her.”

It took Wurtz, who’s been working with insurers for most of his career, more than a decade to understand how retained-asset accounts work. Companies like MetLife and Prudential have never told millions of Americans with insurance policies that when they die, the insurer plans to hold their family’s money in its own account to make investment gains from the death benefit.

“It’s outrageous that somebody’s profiting off other people’s grief,” says Mark Umbrell of Doylestown, Pennsylvania. His 26-year-old son, Colby, an Army Airborne Ranger who earned a Bronze Star and a Purple Heart, was killed in Iraq in May 2007. Umbrell was among those who got a “checkbook” account.

“I think we’re being taken,” he says.

The question for Umbrell, Lohman and a million others with these accounts is whether anything will change. State bank regulators say if there are to be any reforms, they should be made by insurance departments. Officials at those state agencies often say they don’t even understand what a retained-asset account is.

“It’s flown under the radar,” professor Stempel says. “Regulators have not done their job.”

Until public officials wake up, the bereaved will remain a secret profit center for the life insurance industry.