Monday, October 10, 2011

The Bill O’Reilly of Canada Ambushes Chris Hedges

Why the Elites Are in Trouble

Why the Elites Are in Trouble

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Ketchup, a petite 22-year-old from Chicago with wavy red hair and glasses with bright red frames, arrived in Zuccotti Park in New York on Sept. 17. She had a tent, a rolling suitcase, 40 dollars’ worth of food, the graphic version of Howard Zinn’s “A People’s History of the United States” and a sleeping bag. She had no return ticket, no idea what she was undertaking, and no acquaintances among the stragglers who joined her that afternoon to begin the Wall Street occupation. She decided to go to New York after reading the Canadian magazine Adbusters, which called for the occupation, although she noted that when she got to the park Adbusters had no discernable presence.

The lords of finance in the looming towers surrounding the park, who toy with money and lives, who make the political class, the press and the judiciary jump at their demands, who destroy the ecosystem for profit and drain the U.S. Treasury to gamble and speculate, took little notice of Ketchup or any of the other scruffy activists on the street below them. The elites consider everyone outside their sphere marginal or invisible. And what significance could an artist who paid her bills by working as a waitress have for the powerful? What could she and the others in Zuccotti Park do to them? What threat can the weak pose to the strong? Those who worship money believe their buckets of cash, like the $4.6 million JPMorgan Chase gave* to the New York City Police Foundation, can buy them perpetual power and security. Masters all, kneeling before the idols of the marketplace, blinded by their self-importance, impervious to human suffering, bloated from unchecked greed and privilege, they were about to be taught a lesson in the folly of hubris.

Even now, three weeks later, elites, and their mouthpieces in the press, continue to puzzle over what people like Ketchup want. Where is the list of demands? Why don’t they present us with specific goals? Why can’t they articulate an agenda?

The goal to people like Ketchup is very, very clear. It can be articulated in one word—REBELLION. These protesters have not come to work within the system. They are not pleading with Congress for electoral reform. They know electoral politics is a farce and have found another way to be heard and exercise power. They have no faith, nor should they, in the political system or the two major political parties. They know the press will not amplify their voices, and so they created a press of their own. They know the economy serves the oligarchs, so they formed their own communal system. This movement is an effort to take our country back.

This is a goal the power elite cannot comprehend. They cannot envision a day when they will not be in charge of our lives. The elites believe, and seek to make us believe, that globalization and unfettered capitalism are natural law, some kind of permanent and eternal dynamic that can never be altered. What the elites fail to realize is that rebellion will not stop until the corporate state is extinguished. It will not stop until there is an end to the corporate abuse of the poor, the working class, the elderly, the sick, children, those being slaughtered in our imperial wars and tortured in our black sites. It will not stop until foreclosures and bank repossessions stop. It will not stop until students no longer have to go into debt to be educated, and families no longer have to plunge into bankruptcy to pay medical bills. It will not stop until the corporate destruction of the ecosystem stops, and our relationships with each other and the planet are radically reconfigured. And that is why the elites, and the rotted and degenerate system of corporate power they sustain, are in trouble. That is why they keep asking what the demands are. They don’t understand what is happening. They are deaf, dumb and blind.

“The world can’t continue on its current path and survive,” Ketchup told me. “That idea is selfish and blind. It’s not sustainable. People all over the globe are suffering needlessly at our hands.”

The occupation of Wall Street has formed an alternative community that defies the profit-driven hierarchical structures of corporate capitalism. If the police shut down the encampment in New York tonight, the power elite will still lose, for this vision and structure have been imprinted into the thousands of people who have passed through park, renamed Liberty Plaza by the protesters. The greatest gift the occupation has given us is a blueprint for how to fight back. And this blueprint is being transferred to cities and parks across the country.

“We get to the park,” Ketchup says of the first day. “There’s madness for a little while. There were a lot of people. They were using megaphones at first. Nobody could hear. Then someone says we should get into circles and talk about what needed to happen, what we thought we could accomplish. And so that’s what we did. There was a note-taker in each circle. I don’t know what happened with those notes, probably nothing, but it was a good start. One person at a time, airing your ideas. There was one person saying that he wasn’t very hopeful about what we could accomplish here, that he wasn’t very optimistic. And then my response was that, well, we have to be optimistic, because if anybody’s going to get anything done, it’s going be us here. People said different things about what our priorities should be. People were talking about the one-demand idea. Someone called for AIG executives to be prosecuted. There was someone who had come from Spain to be there, saying that she was here to help us avoid the mistakes that were made in Spain. It was a wide spectrum. Some had come because of their own personal suffering or what they saw in the world.”

* Correction: An earlier version of this column said JPMorgan Chase gave a donation “a few days ago.” JPMorgan’s website says its gifts to the New York City Police Foundation, which together add up to “the largest [gift] in the history of the foundation,” began arriving last year.

“After the circles broke I felt disheartened because it was sort of chaotic,” she said. “I didn’t have anybody there, so it was a little depressing. I didn’t know what was going to happen.”

“Over the past few months, people had been meeting in New York City general assembly,” she said. “One of them is named Brooke. She’s a professor of social ecology. She did my facilitation training. There’s her and a lot of other people, students, school teachers, different people who were involved with that … so they organized a general assembly.”

“It’s funny that the cops won’t let us use megaphones, because it’s to make our lives harder, but we actually end up making a much louder sound [with the “people’s mic”] and I imagine it’s much more annoying to the people around us,” she said. “I had been in the back, unable to hear. I walked to different parts of the circle. I saw this man talking in short phrases and people were repeating them. I don’t know whose idea it was, but that started on the first night. The first general assembly was a little chaotic because people had no idea … a general assembly, what is this for? At first it was kind of grandstanding about what were our demands. Ending corporate personhood is one that has come up again and again as a favorite and. … What ended up happening was, they said, OK, we’re going to break into work groups.

“People were worried we were going to get kicked out of the park at 10 p.m. This was a major concern. There were tons of cops. I’ve heard that it’s costing the city a ton of money to have constant surveillance on a bunch of peaceful protesters who aren’t hurting anyone. With the people’s mic, everything we do is completely transparent. We know there are undercover cops in the crowd. I think I was talking to one last night, but it’s like, what are you trying to accomplish? We don’t have any secrets.”

“The undercover cops are the only ones who ask, ‘Who’s the leader?’ ” she said. “Presumably, if they know who our leaders are they can take them out. The fact is we have no leader. There’s no leader, so there’s nothing they can do.

“There was a woman [in the medics unit]. This guy was pretending to be a reporter. The first question he asks is, ‘Who’s the leader?’ She goes, ‘I’m the leader.’ And he says, ‘Oh yeah, what are you in charge of?’ She says, ‘I’m in a charge of everything.’ He says, ‘Oh yeah? What’s your title?’ She says ‘God.’ ”

“So it’s 9:30 p.m. and people are worried that they’re going to try and rush us out of the camp,” she said, referring back to the first day. “At 9:30 they break into work groups. I joined the group on contingency plans. The job of the bedding group was to find cardboard for people to sleep on. The contingency group had to decide what to do if they kick us out. The big decision we made was to announce to the group that if we were dispersed we were going to meet back at 10 a.m. the next day in the park. Another group was arts and culture. What was really cool was that we assumed we were going to be there more than one night. There was a food group. They were going dumpster diving. The direct action committee plans for direct, visible action like marches. There was a security team. It’s security against the cops. The cops are the only people we think that might hurt us. The security team keeps people awake in shifts. They always have people awake.”

The work groups make logistical decisions, and the general assembly makes large policy decisions.

“Work groups make their own decisions,” Ketchup said. “For example, someone donated a laptop. And because I’ve been taking minutes I keep running around and asking, ‘Does someone have a laptop I could borrow?’ The media team, upon receiving that laptop, designated it to me for my use on behalf of the Internet committee. The computer isn’t mine. When I go back to Chicago, I’m not going to take it. Right now I don’t even know where it is. Someone else is using it. But so, after hearing this, people thought it had been gifted to me personally. People were upset by that. So a member of the Internet work group went in front of the group and said, ‘This is a need of the committee. It’s been put into Ketchup’s care.’ They explained that to the group, but didn’t ask for consensus on it, because the committees are empowered. Some people might still think that choice was inappropriate. In the future, it might be handled differently.”

Working groups blossomed in the following days. The media working group was joined by a welcome working group for new arrivals, a sanitation working group (some members of which go around the park on skateboards as they carry brooms), a legal working group with lawyers, an events working group, an education working group, medics, a facilitation working group (which trains new facilitators for the general assembly meetings), a public relations working group, and an outreach working group for like-minded communities as well as the general public. There is an Internet working group and an open source technology working group. The nearby McDonald’s is the principal bathroom for the park after Burger King banned protesters from its facilities.

Caucuses also grew up in the encampment, including a “Speak Easy caucus.” “That’s a caucus I started,” Ketchup said. “It is for a broad spectrum of individuals from female-bodied people who identify as women to male-bodied people who are not traditionally masculine. That’s called the ‘Speak Easy’ caucus. I was just talking to a woman named Sharon who’s interested in starting a caucus for people of color.

“A caucus gives people a safe space to talk to each other without people from the culture of their oppressors present. It gives them greater power together, so that if the larger group is taking an action that the caucus felt was specifically against their interests, then the caucus can block that action. Consensus can potentially still be reached after a caucus blocks something, but a block, or a ‘paramount objection,’ is really serious. You’re saying that you are willing to walk out.”

“We’ve done a couple of things so far,” she said. “So, you know the live stream? The comments are moderated on the live stream. There are moderators who remove racist comments, comments that say ‘I hate cops’ or ‘Kill cops.’ They remove irrelevant comments that have nothing to do with the movement. There is this woman who is incredibly hardworking and intelligent. She has been the driving force of the finance committee. Her hair is half-blond and half-black. People were referring to her as “blond-black hottie.” These comments weren’t moderated, and at one point whoever was running the camera took the camera off her face and did a body scan. So, that was one of the first things the caucus talked about. We decided as a caucus that I would go to the moderators and tell them this is a serious problem. If you’re moderating other offensive comments then you need to moderate these kinds of offensive comments.”

The heart of the protest is the two daily meetings, held in the morning and the evening. The assemblies, which usually last about two hours, start with a review of process, which is open to change and improvement, so people are clear about how the assembly works. Those who would like to speak raise their hand and get on “stack.”

“There’s a stack keeper,” Ketchup said. “The stack keeper writes down your name or some signifier for you. A lot of white men are the people raising their hands. So, anyone who is not apparently a white man gets to jump stack. The stack keeper will make note of the fact that the person who put their hand up was not a white man and will arrange the list so that it’s not dominated by white men. People don’t get called up in the same order as they raise their hand.”

While someone is speaking, their words amplified by the people’s mic, the crowd responds through hand signals.

“Putting your fingers up like this,” she said, holding her hands up and wiggling her fingers, “means you like what you’re hearing, or you’re in agreement. Like this,” she said, holding her hands level and wiggling her fingers, “means you don’t like it so much. Fingers down, you don’t like it at all; you’re not in agreement. Then there’s this triangle you make with your hand that says ‘point of process.’ So, if you think that something is not being respected within the process that we’ve agreed to follow then you can bring that up.”

“You wait till you’re called,” she said. “These rules get abused all the time, but they are important. We start with agenda items, which are proposals or group discussions. Then working group report-backs, so you know what every working group is doing. Then we have general announcements. The agenda items have been brought to the facilitators by the working groups because you need the whole group to pay attention. Like last night, Legal brought up a discussion on bail: ‘Can we agree that the money from the general funds can be allotted if someone needs bail?’ And the group had to come to consensus on that. [It decided yes.] There’s two co-facilitators, a stack keeper, a timekeeper, a vibes-person making sure that people are feeling OK, that people’s voices aren’t getting stomped on, and then if someone’s being really disruptive, the vibes-person deals with them. There’s a note-taker—I end up doing that a lot because I type very, very quickly. We try to keep the facilitation team one man, one woman, or one female-bodied person, one male-bodied person. When you facilitate multiple times it’s rough on your brain. You end up having a lot of criticism thrown your way. You need to keep the facilitators rotating as much as possible. It needs to be a huge, huge priority to have a strong facilitation group.”

“People have been yelled out of the park,” she said. “Someone had a sign the other day that said ‘Kill the Jew Bankers.’ They got screamed out of the park. Someone else had a sign with the N-word on it. That person’s sign was ripped up, but that person is apparently still in the park.

“We’re trying to make this a space that everyone can join. This is something the caucuses are trying to really work on. We are having workshops to get people to understand their privilege.”

But perhaps the most important rule adopted by the protesters is nonviolence and nonaggression against the police, no matter how brutal the police become.

“The cops, I think, maced those women in the face and expected the men and women around them to start a riot,” Ketchup said. “They want a riot. They can deal with a riot. They cannot deal with nonviolent protesters with cameras.”

I tell Ketchup I will bring her my winter sleeping bag. It is getting cold. She will need it. I leave her in a light drizzle and walk down Broadway. I pass the barricades, uniformed officers on motorcycles, the rows of paddy wagons and lines of patrol cars that block the streets into the financial district and surround the park. These bankers, I think, have no idea what they are up against.

Panic of the Plutocrats

Panic of the Plutocrats

It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.

And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.

Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Nonetheless, Eric Cantor, the House majority leader, has denounced “mobs” and “the pitting of Americans against Americans.” The G.O.P. presidential candidates have weighed in, with Mitt Romney accusing the protesters of waging “class warfare,” while Herman Cain calls them “anti-American.” My favorite, however, is Senator Rand Paul, who for some reason worries that the protesters will start seizing iPads, because they believe rich people don’t deserve to have them.

Michael Bloomberg, New York’s mayor and a financial-industry titan in his own right, was a bit more moderate, but still accused the protesters of trying to “take the jobs away from people working in this city,” a statement that bears no resemblance to the movement’s actual goals.

And if you were listening to talking heads on CNBC, you learned that the protesters “let their freak flags fly,” and are “aligned with Lenin.”

The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.

Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.

And then there’s the campaign of character assassination against Elizabeth Warren, the financial reformer now running for the Senate in Massachusetts. Not long ago a YouTube video of Ms. Warren making an eloquent, down-to-earth case for taxes on the rich went viral. Nothing about what she said was radical — it was no more than a modern riff on Oliver Wendell Holmes’s famous dictum that “Taxes are what we pay for civilized society.”

But listening to the reliable defenders of the wealthy, you’d think that Ms. Warren was the second coming of Leon Trotsky. George Will declared that she has a “collectivist agenda,” that she believes that “individualism is a chimera.” And Rush Limbaugh called her “a parasite who hates her host. Willing to destroy the host while she sucks the life out of it.”

What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.

Yet they have paid no price. Their institutions were bailed out by taxpayers, with few strings attached. They continue to benefit from explicit and implicit federal guarantees — basically, they’re still in a game of heads they win, tails taxpayers lose. And they benefit from tax loopholes that in many cases have people with multimillion-dollar incomes paying lower rates than middle-class families.

This special treatment can’t bear close scrutiny — and therefore, as they see it, there must be no close scrutiny. Anyone who points out the obvious, no matter how calmly and moderately, must be demonized and driven from the stage. In fact, the more reasonable and moderate a critic sounds, the more urgently he or she must be demonized, hence the frantic sliming of Elizabeth Warren.

So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.

Protesters Granted 4-Month Extension to Stay on Freedom Plaza

Protesters Granted 4-Month Extension to Stay on Freedom Plaza

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Authorities granted protesters a four-month extension to continue occupying Freedom Plaza in D.C., News4's Chris Gordon reported.

A deadline for protesters with the October 2011/Stop the Machine demonstration to pack up and leave Freedom Plaza came and went Monday afternoon. The protesters were given until 2 p.m. to break down their stage and other equipment after their original four-day permit expired Sunday. While the protesters cleaned the space and took down the stage where they led rallies, made speeches and played music, they didn't leave.

At about 2 p.m. Monday, Park Police went to Freedom Plaza and requested a private meeting with protest organizers. They met at National Park Service headquarters about 4 p.m., Gordon reported. Before leaving Freedom Plaza, the organizers told the crowd they'd stay until they're ready to leave.

The organizers returned to a round of applause when they told demonstrators that authorities offered the four-month extension, Gordon police. Park Police realized it was not in their best interests to shut the demonstrators down or make arrests, organizers said, and asked if demonstrators needed to be arrested to make their point. The organizers replied that they don’t need to be arrested over a permit issue and want their issues addressed.

Earlier Monday, one of the protest's organizers, Maria Allwine, said the tents would remain there indefinitely. Demonstrators told News4 on Monday morning that the only way they would exit the plaza was in handcuffs.

"So far we haven't had any threats, so we don't think they are going to come in and storm trooper us out," October 2011 organizer Kevin Zeese said.

They were prepared, though. There is an area where demonstrators piled their backpacks and bedrolls for safekeeping in case of arrest and they wrote the phone number for legal representation on their arms.

Freedom Plaza has drawn a diverse group of disaffected and angry protesters. The demonstrations in D.C., now 10 days along, are being held in solidarity with the Occupy Wall Street protests in New York.

Organizers said the October 2011 Stop the Machine demonstration was scheduled to coincide with the 10th anniversary of the start of the war in Afghanistan and carries an anti-war and anti-corporate greed message.

On Monday, labor unions planned to join with those encamped blocks from the White House.

While mostly peaceful, the multi-day "occupation" was punctuated by arrests and pepper-spray on Saturday. A group of several hundred demonstrators carrying banners attempted to enter the Smithsonian Air and Space Museum. Museum guards confronted the crowd, a physical altercation ensued, and security deployed mace to turn the protesters back.

One person was arrested in the incident.

U.S. incomes ‘fell more after than during recession’

U.S. incomes ‘fell more after than during recession’

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dollar.istock

US household incomes fell more in the two years following the end of the recession than during the downturn itself, according to a New York Times report published on its website.

A study by two former Census Bureau officials said inflation-adjusted income fell 6.7 percent, to $49,909, between June 2009 — when the recession ended — and June 2011, the newspaper said.

During the recession — from December 2007 to June 2009 — household incomes fell less than half of that, 3.2 percent, according to the report.

The bigger drop in the two years after the recession suggests why Americans feel a growing sense of anxiety about the nation’s economic prospects even as the economy has been growing since the recession ended.

The data was compiled by former Census officials Gordon W. Green Jr and John F. Coder, who described the cumulative drop in income since the start of the recession to this June as “a significant reduction in the American standard of living.”

A stumbling economy is the biggest barrier to President Barack Obama winning a second term in office, with unemployment stuck at 9.1 percent and faltering growth and a debt crisis in the eurozone fueling fears of a second recession.

The report follows an official Census Bureau study last month that showed the US poverty rate rose sharply in 2010 to 15.1 percent, the highest since 1993, from 14.3 percent a year earlier.

It was the fourth consecutive rise in the number of people below the poverty line, to 46.2 million.

The US definition of poverty is an annual income of $22,314 for a family of four, and $11,139 for a single person in 2010.

GOP Rep: ‘We can’t allow’ more coverage of Occupy Wall Street

GOP Rep: ‘We can’t allow’ more coverage of Occupy Wall Street

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Add another Republican to the growing list that loathe the Occupy Wall Street protests.

Rep. Peter King (R-NY) is upset at the growing movement and the media’s coverage of it, hoping that a modern day version of protests from five decades ago isn’t being recaptured now.

“It’s really important for us not to give any legitimacy to these people in the streets,” said King on Laura Ingraham’s radio show Friday evening. “I remember what happened in the 1960s when the left-wing took to the streets and somehow the media glorified them and it ended up shaping policy. We can’t allow that to happen.”

Financial Polarization and Corruption: Obama's Politics of Deception

Financial Polarization and Corruption: Obama’s Politics of Deception

Don’t Let Him Get Away With It...

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The seeds for President Obama’s demagogic press conference on Thursday were planted last summer when he assigned his right-wing Committee of 13 the role of resolving the obvious and inevitable Congressional budget standoff by forging an anti-labor policy that cuts Social Security, Medicare and Medicaid, and uses the savings to bail out banks from even more loans that will go bad as a result of the IMF-style austerity program that Democrats and Republicans alike have agreed to back.

The problem facing Mr. Obama is obvious enough: How can he hold the support of moderates and independents (or as Fox News calls them, socialists and anti-capitalists), students and labor, minorities and others who campaigned so heavily for him in 2008? He has double-crossed them – smoothly, with a gentle smile and patronizing patter talk, but with an iron determination to hand federal monetary and tax policy over to his largest campaign contributors: Wall Street and assorted special interests – the Democratic Party’s Rubinomics and Clintonomics core operators, plus smooth Bush Administration holdovers such as Tim Geithner, not to mention quasi-Cheney factotums in the Justice Department.

President Obama’s solution has been to do what any political demagogue does: Come out with loud populist campaign speeches that have no chance of becoming the law of the land, while quietly giving his campaign contributors what they’ve paid him for: giveaways to Wall Street, tax cuts for the wealthy (euphemized as tax “exemptions” and mark-to-model accounting, plus an agreement to count their income as “capital gains” taxed at a much lower rate).

So here’s the deal the Democratic leadership has made with the Republicans. The Republicans will run someone from their present gamut of guaranteed losers, enabling Mr. Obama to run as the “voice of reason,” as if this somehow is Middle America. This will throw the 2012 election his way for a second term if he adopts their program – a set of rules paid for by the leading campaign contributors to both parties.

President Obama’s policies have not been the voice of reason. They are even further to the right than George W. Bush could have achieved. At least a Republican president would have confronted a Democratic Congress blocking the kind of program that Mr. Obama has rammed through. But the Democrats seem stymied when it comes to standing up to a president who ran as a Democrat rather than the Tea Partier he seems to be so close to in his ideology.

So here’s where the Committee of 13 comes into play. Given (1) the agreement that if the Republicans and Democrats do NOT agree on Mr. Obama’s dead-on-arrival “job-creation” ploy, and (2) Republican House Leader Boehner’s statement that his party will reject the populist rhetoric that President Obama is voicing these days, then (3) the Committee will get its chance to wield its ax and cut federal social spending in keeping with its professed ideology.

President Obama signaled this long in advance, at the outset of his administration when he appointed his Deficit Reduction Commission headed by former Republican Sen. Simpson and Rubinomics advisor to the Clinton administration Bowles to recommend how to cut federal social spending while giving even more money away to Wall Street. He confirmed suspicions of a sellout by reappointing bank lobbyist Tim Geithner to the Treasury, and tunnel-visioned Ben Bernanke as head of the Federal Reserve Board.

Yet on Wednesday, October 4, the president tried to represent the OccupyWallStreet movement as support for his efforts. He pretended to endorse a pro-consumer regulator to limit bank fraud, as if he had not dumped Elizabeth Warren on the advice of Mr. Geithner – who seems to be settling into the role of bagman for campaign contributors from Wall Street.

Can President Obama get away with it? Can he jump in front of the parade and represent himself as a friend of labor and consumers while his appointees support Wall Street and his Committee of 13 is waiting in the wings to perform its designated function of guillotining Social Security?

When I visited the OccupyWallStreet site on Wednesday, it was clear that the disgust with the political system went so deep that there is no single set of demands that can fix a system so fundamentally broken and dysfunctional. One can’t paste-up a regime that is impoverishing the economy, accelerating foreclosures, pushing state and city budgets further into deficit, and forcing cuts in social spending.

The situation is much like that from Iceland to Greece: Governments no longer represent the people. They represent predatory financial interests that are impoverishing the economy. This is not democracy. It is financial oligarchy. And oligarchies do not give their victims a voice.

So the great question is, where do we go from here? There’s no solvable path within the way that the economy and the political system is structured these days. Any attempt to come up with a neat “fix-it” plan can only suggest bandages for what looks like a fatal political-economic wound.

The Democrats are as much a part of the septic disease as the Republicans. Other countries face a similar problem. The Social Democratic regime in Iceland is acting as the party of bankers, and its government’s approval rating has fallen to 12 percent. But they refuse to step down. So earlier last week, voters brought steel oil drums to their own Occupation outside the Althing and banged when the Prime Minister started to speak, to drown out her advocacy of the bankers (and foreign vulture bankers at that!).

Likewise in Greece, the demonstrators are showing foreign bank interests that any agreement the European Central Bank makes to bail out French and German bondholders at the cost of increasing taxes on Greek labor (but not Greek property and wealth) cannot be viewed as democratically entered into. Hence, any debts that are claimed, and any real estate or public enterprises given sold off to the creditor powers under distress conditions, can be reversed once voters are given a democratic voice in whether to impose a decade of poverty on the country and force emigration.

That is the spirit of civil disobedience that is growing in this country. It is a quandary – that is, a problem with no solution. All that one can do under such conditions is to describe the disease and its symptoms. The cure will follow logically from the diagnosis. The role of OccupyWallStreet is to diagnose the financial polarization and corruption of the political process that extends right into the Supreme Court, the Presidency, and Mr. Obama’s soon-to-be notorious Committee of 13 once the happy-smoke settles from his present pretensions.

A virtual secret state: the military-industrial complex 2.0

A virtual secret state: the military-industrial complex 2.0

US reliance on private contractors is seeing a sinister focus on surveillance of citizens instead of defence against cyber attack

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Unmanned stealth drone
An unmanned stealth drone over a California air base: Wired reports that a virus has been 'keylogging' controllers of US military drones. Photograph: KeystoneUSA-Zuma/Rex Features

On Friday, Wired revealed that a virus of unknown origin has been consistently tracking the remote piloting of US military drones down to each keystroke, and that attempts to remove the intrusion have failed. Although the origin and intent of this virus remain unknown, with military analysts positing that it may be typical malware rather than a successful espionage bid, the incident provides the media with a practical opportunity to finally start examining the processes that determine our republic's ability to protect itself from foreign cyber threats. That examination needs to focus on a particular system of the sort that is most dangerous to any republic – a system that grows ever more consequential while remaining largely invisible even to those who are charged with overseeing it.

Even most members of Congress are unaware of the extent to which both the military and intelligence community have come to depend on private contractors to provide the software and ingenuity necessary for both conventional and information warfare in the 21st century. In 2005, experts estimated that 30% of the US intelligence budget was being outsourced, and this intelligence contracting industry has grown markedly since.

On the surface, this practice makes sense; the modern military tends not to attract sufficient technical talent for its needs, and in a few notable cases, the once-legendary hackers who run crucial firms have felony convictions that would prevent them from doing equivalent work from inside the state. Meanwhile, competition for projects promotes the incubation of new and more powerful capabilities from within the industry, and the bidding system ensures that the US gets the best of these for the least money – at least, in theory.

But as evidenced by the drone virus affair and other, more serious incidents, the overall contracting process is deeply flawed. The "free market" competition for contracts that would otherwise bring gains is corrupted by the industry's thorough overlap with its state customers. Former Department of Homeland Security head Michael Chertoff joined the board of directors of contractor BAE Systems ahead of that firm being awarded a $270m contract last week, followed by another US Army contract for $67m; before bringing on the well-connected ex-secretary, the firm was becoming notorious for losing such crucial business.

A glance at the boards and executive listings of similar firms, replete with former military officers and government officials, reveals the revolving door that connects potential clients with a state customer for which money is no object, such money being taxed from an electorate too distracted by other offenses to notice. Of course, America's penchant for overspending on defense would be more defensible if it received what it paid for. The revelations regarding the failure of Halliburton, Mantech and other state-intertwined contractors to provide invoiced services to troops have been so endless as almost to be discounted, rather than add to the popular outrage.

This familiar tendency on the part of the US government to spend money it doesn't have on things it doesn't get is now directed at developing procedures it shouldn't use. The intelligence contracting industry, which includes firms that provide security applications to the entire US government and military, has been encouraged lately to direct more of its collective time and capabilities to the task of monitoring, misinforming and sometimes outright attacking American citizens and others abroad – and benefit from the protection of the state and the incompetence of the media in order to make such attacks with impunity.

The Team Themis affair, which united three such firms to go after journalists, activists and WikiLeaks was revealed by Anonymous earlier this year thanks to the seizure of 70,000 emails from coordinating firm HBGary Federal. The little-known and sinister persona management capability – a state-sponsored "sockpuppet" propaganda program – has been found in widespread development; the National Security Agency-linked Endgame Systems has been revealed to offer comprehensive offensive cyber capabilities, with targets in place, to customers other than the US government; a few months ago, I released a report on a worrying surveillance apparatus known as Romas/COIN.

The shift from infrastructure defense to surveillance and offensive capability comes in the wake of the Chinese-orchestrated Aurora attacks against US state and corporate targets – an operation that continues to reveal itself as even more damaging than initially thought as additional targets admit theft of crucial data. The problem with the changing priorities of the US's cyber-contractor complex are two-fold: by neglecting government systems' vulnerabilities – and the drone virus provides a perfect instance – the state loses face with adversaries, real or potential, who respect only force; and by treating its own citizenry as the leading threat to its security, it loses the loyalty of those who respect truth and the rule of law.

11 Facts You Need To Know About The Nation’s Biggest Banks

11 Facts You Need To Know About The Nation’s Biggest Banks

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The Occupy Wall Street protests that began in New York City more than three weeks ago have now spread across the country. The choice of Wall Street as the focal point for the protests — as even Federal Reserve Chairman Ben Bernanke said — makes sense due to the big bank malfeasance that led to the Great Recession.

While the Dodd-Frank financial reform law did a lot to ensure that a repeat of the 2008 financial crisis won’t occur — through regulation of derivatives, a new consumer protection agency, and new powers for the government to dismantle failing banks — the biggest banks still have a firm grip on the financial system, even more so than before the 2008 financial crisis. Here are eleven facts that you need to know about the nation’s biggest banks:

Bank profits are highest since before the recession…: According to the Federal Deposit Insurance Corp., bank profits in the first quarter of this year were “the best for the industry since the $36.8 billion earned in the second quarter of 2007.” JP Morgan Chase is currently pulling in record profits.

…even as the banks plan thousands of layoffs: Banks, including Bank of America, Barclays, Goldman Sachs, and Credit Suisse, are planning to lay off tens of thousands of workers.

Banks make nearly one-third of total corporate profits: The financial sector accounts for about 30 percent of total corporate profits, which is actually down from before the financial crisis, when they made closer to 40 percent.

Since 2008, the biggest banks have gotten bigger: Due to the failure of small competitors and mergers facilitated during the 2008 crisis, the nation’s biggest banks — including Bank of America, JP Morgan Chase, and Wells Fargo — are now bigger than they were pre-recession. Pre-crisis, the four biggest banks held 32 percent of total deposits; now they hold nearly 40 percent.

The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards: Bank of America, JP Morgan Chase, Wells Fargo and Citigroup issue one out of every two mortgages and nearly two out of every three credit cards in America.

The 10 biggest banks hold 60 percent of bank assets: In the 1980s, the 10 biggest banks controlled 22 percent of total bank assets. Today, they control 60 percent.

The six biggest banks hold assets equal to 63 percent of the country’s GDP: In 1995, the six biggest banks in the country held assets equal to about 17 percent of the country’s Gross Domestic Product. Now their assets equal 63 percent of GDP.

The five biggest banks hold 95 percent of derivatives: Nearly the entire market in derivatives — the credit instruments that helped blow up some of the nation’s biggest banks as well as mega-insurer AIG — is dominated by just five firms: JP Morgan Chase, Goldman Sachs, Bank of America, Citibank, and Wells Fargo.

Banks cost households nearly $20 trillion in wealth: Almost $20 trillion in wealth was destroyed by the Great Recession, and total family wealth is still down “$12.8 trillion (in 2011 dollars) from June 2007 — its last peak.”

Big banks don’t lend to small businesses: The New Rules Project notes that the country’s 20 biggest banks “devote only 18 percent of their commercial loan portfolios to small business.”

Big banks paid 5,000 bonuses of at least $1 million in 2008: According to the New York Attorney General’s office, “nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008.”

In the last few decades, regulations on the biggest banks have been systematically eliminated, while those banks engineered more and more ways to both rip off customers and turn ever-more complex trading instruments into ever-higher profits. It makes perfect sense, then, that a movement calling for an economy that works for everyone would center its efforts on an industry that exemplifies the opposite.

How Unpaid Internships Perpetuate Rampant Inequality in the US

How Unpaid Internships Perpetuate Rampant Inequality in the US

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There is a job opening! It seems perfect—full time, in the non-profit sector, based in New York City. It's obviously a prestigious position—they're looking to hire someone with at least a masters’ degree, though in certain cases this can be interchangeable with five years of related work experience. There's only one small problem: it's unpaid.

According to statistics from the National Association for Colleges and Employers, the number of students at four-year colleges who took internships increased from nine percent to more than 80 percent between 1992 and 2008. Once the economy crashed, and a paying job became a luxury rather than a fact of life, many jobs were re-packaged as internships, promising experience and career connections in exchange for free labor.

Recent graduates, disturbed by the dearth of job opportunities, began to take internships as a last resort to stay competitive in the labor market. Although an internship used to be akin to an apprenticeship—a temporary stint of unpaid, hands-on labor resulting in an eventual job offer—the explosion of both college students and recent graduates taking internships no longer guarantees a paid position. Instead, as more and more young people demonstrated they were willing to supply an unpaid labor force so long as it was framed as an “internship,” internships have become a means for companies and non-profit organizations to re-package once paying jobs and cut corners in a tight economy.

Internships are the new entry-level job—the same duties and basic experience, only this time without compensation or benefits.

Statistics show that half of all internships are paid, but most of these positions are extraordinarily competitive, and unsurprisingly concentrated in the financial sector. Certain internships in other industries offer a small stipend, but hardly anything that is adequate to subsist on, especially in a major city. The worst offenders list positions as “paid” only to reveal that compensation is in the form of lunch or a monthly metrocard.

Even if they are paid, interns do not enjoy the benefits—health insurance, dental insurance, or even legal protection from sexual harassment—of a full-time employee. Organizations are not committed to interns; interns have learned to understand themselves as temporary hires, drifting through the labor market promising uncompensated labor in exchange for experience, connections and a “foot in the door” in their industry of choice—but no job.

It's becoming more and more expected for college students to have had at least one, if not several, internships by the time they graduate. Students that come from a privileged background, with parents who are willing and able to finance sometimes serial internships, are able to survive in internship culture financially unscathed. Eventually, they intern for long enough to make the connections necessary to break into the white-collar world. But students from lower- or even middle-income backgrounds feel financially stressed taking on unpaid work, but many do anyway to compete with their more privileged peers in the job market. As interning becomes more ubiquitous, and the possibility of an eventual job offer narrows, this becomes a greater and greater financial sacrifice.

Furthermore, relocating to another city, often with a much higher cost of living, is expensive, and doing this without a steady income is a huge financial burden. Many current students and recent graduates are already significantly in debt from student loans, and with the rising cost of college have to dig themselves even further in debt because of the social pressure to work for free as an “investment.”

“It’s like buying a lotto ticket, but for a lot more than a few dollars at a local gas station,” Josh Montes, a senior at Cornell University, tells me. During his college career, Montes has held four different internships, three of which were unpaid, mostly financed by odd jobs he worked while interning full time, as well as his savings from working while he was in high school.

“It adds up, and it’s completely defective if you want to succeed," says Montes. "Some families can afford to pay for their son or daughter to have an internship. However, if you are from a lower-income background, you need to provide for yourself through loans and grants--if you can get them-- or from generous family members who probably can’t afford it anyway. It is a financial burden that other students simply don’t have to face.”

As family incomes stagnate, and tuition rises at an average of five percent across the board for both public and private schools, many students are too busy trying to put themselves through college to consider the financial burden of an unpaid internship. Although these students are sometimes able to make the necessary money to make ends meet at two, and sometimes three jobs, many are anxious that internship culture is leaving them behind by systematically favoring students and graduates from wealthier backgrounds.

“I would like to intern—it seems like it would be interesting,” Matthew, another college senior who works multiple jobs in order to put himself through school, tells me. “Plus I feel like my friends who intern are ahead of me in the job market. Those of us who have to work are left behind.”

Matthew is not alone; thousands of students work multiple service industry jobs at every hour possible while their more privileged peers are able to work, albeit unpaid, from nine to five. Though they are earning money, the feeling of exclusion is palpable, both from their friends’ experiences, and the eventual white-collar opportunities they may never access, despite a college degree.

Internships have largely eradicated the possibility of breaking into the white-collar world through a salaried position, and internship culture has become a source of class division, favoring the privileged, pressuring others into financial sacrifices, and excluding others altogether. Pulling oneself up by the bootstraps is an increasingly rare phenomenon—and for this generation, is quickly becoming mythical. Now, it's understood that those who become the collective white collar of the world—the business managers, lawyers, investment bankers, television anchors, and politicians—are selected at a young age. That selection process, despite our supposed American values, is grounded in the privilege and pedigree of the elite.

How the FBI's Network of Informants Actually Created Most of the Terrorist Plots

How the FBI's Network of Informants Actually Created Most of the Terrorist Plots "Foiled" in the US Since 9/11

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UPDATE: On September 28, Rezwan Ferdaus, a 26-year-old graduate of Northeastern University, was arrested and charged with providing resources to a foreign terrorist organization and attempting to destroy national defense premises. Ferdaus, according to the FBI, planned to blow up both the Pentagon and Capitol Building with a "large remote controlled aircraft filled with C-4 plastic explosives."

The case was part of a nearly ten-month investigation led by the FBI. Not surprisingly, Ferdaus' case fits a pattern detailed by Trevor Aaronson in his article below: the FBI provided Ferdaus with the explosives and materials needed to pull off the plot. In this case, two undercover FBI employees, who Ferdaus believed were al Qaeda members, gave Ferdaus $7,500 to purchase an F-86 Sabre model airplane that Ferdaus hoped to fill with explosives. Right before his arrest, the FBI employees gave Ferdaus, who lived at home with his parents, the explosives he requested to pull off his attack. And just how did the FBI come to meet Ferdaus? An informant with a criminal record introduced Ferdaus to the supposed al Qaeda members.

To learn more about how the FBI uses informants to bust, and sometimes lead, terrorist plots, read Aaronson's article below.

James Cromitie [8] was a man of bluster and bigotry. He made up wild stories about his supposed exploits, like the one about firing gas bombs into police precincts using a flare gun, and he ranted about Jews. "The worst brother in the whole Islamic world is better than 10 billion Yahudi," he once said [9].

A 45-year-old Walmart stocker who'd adopted the name Abdul Rahman after converting to Islam during a prison stint for selling cocaine, Cromitie had lots of worries—convincing his wife he wasn't sleeping around, keeping up with the rent, finding a decent job despite his felony record. But he dreamed of making his mark. He confided as much in a middle-aged Pakistani he knew as Maqsood.

"I'm gonna run into something real big [10]," he'd say. "I just feel it, I'm telling you. I feel it."

Maqsood and Cromitie had met at a mosque in Newburgh, a struggling former Air Force town about an hour north of New York City. They struck up a friendship, talking for hours about the world's problems and how the Jews were to blame.

It was all talk until November 2008, when Maqsood pressed his new friend.

"Do you think you are a better recruiter or a better action man?" Maqsood asked [11].

"I'm both," Cromitie bragged.

"My people would be very happy to know that, brother. Honestly."

"Who's your people?" Cromitie asked.

"Jaish-e-Mohammad."

Maqsood said he was an agent for the Pakistani terror group, tasked with assembling a team to wage jihad in the United States. He asked Cromitie what he would attack if he had the means. A bridge, Cromitie said.

"But bridges are too hard to be hit," Maqsood pleaded, "because they're made of steel."

"Of course they're made of steel," Cromitie replied. "But the same way they can be put up, they can be brought down."

Maqsood coaxed Cromitie toward a more realistic plan. The Mumbai attacks were all over the news, and he pointed out how those gunmen targeted hotels, cafés, and a Jewish community center.

"With your intelligence, I know you can manipulate someone," Cromitie told his friend. "But not me, because I'm intelligent." The pair settled on a plot to bomb synagogues in the Bronx, and then fire Stinger missiles at airplanes taking off from Stewart International Airport in the southern Hudson Valley. Maqsood would provide all the explosives and weapons, even the vehicles. "We have two missiles, okay?" he offered [12]. "Two Stingers, rocket missiles."

Maqsood was an undercover operative; that much was true. But not for Jaish-e-Mohammad. His real name was Shahed Hussain [13], and he was a paid informant for the Federal Bureau of Investigation.

Ever since 9/11, counterterrorism has been the FBI's No. 1 priority, consuming the lion's share of its budget—$3.3 billion, compared to $2.6 billion for organized crime—and much of the attention of field agents and a massive, nationwide network of informants. After years of emphasizing informant recruiting as a key task for its agents, the bureau now maintains a roster of 15,000 spies—many of them tasked, as Hussain was, with infiltrating Muslim communities in the United States. In addition, for every informant officially listed in the bureau's records, there are as many as three unofficial ones, according to one former high-level FBI official, known in bureau parlance as "hip pockets."

The informants could be doctors, clerks, imams. Some might not even consider themselves informants. But the FBI regularly taps all of them as part of a domestic intelligence apparatus whose only historical peer might be COINTELPRO [14], the program the bureau ran from the '50s to the '70s to discredit and marginalize organizations ranging from the Ku Klux Klan to civil-rights and protest groups.

Throughout the FBI’s history, informant numbers have been closely guarded secrets. Periodically, however, the bureau has released those figures. A Senate oversight committee in 1975 found the FBI had 1,500 informant [15]s [15]. In 1980, officials disclosed there were 2,800 [16]. Six years later, following the FBI’s push into drugs and organized crime, the number of bureau informants ballooned to 6,000, the Los Angeles Times reported [16] in 1986. And according to the FBI, the number grew significantly after 9/11. In its fiscal year 2008 budget authorization request [17], the FBI disclosed that it it had been been working under a November 2004 presidential directive demanding an increase [18] in "human source development and management," and that it needed $12.7 million [19] for a program to keep tabs on its spy network and create software to track and manage informants.

The bureau's strategy has changed significantly from the days when officials feared another coordinated, internationally financed attack from an Al Qaeda sleeper cell. Today, counterterrorism experts believe groups like Al Qaeda, battered by the war in Afghanistan and the efforts of the global intelligence community, have shifted to a franchise model, using the internet to encourage sympathizers to carry out attacks in their name. The main domestic threat, as the FBI sees it, is a lone wolf.

The bureau's answer has been a strategy known variously as "preemption," "prevention," and "disruption"—identifying and neutralizing potential lone wolves before they move toward action. To that end, FBI agents and informants target not just active jihadists, but tens of thousands of law-abiding people, seeking to identify those disgruntled few who might participate in a plot given the means and the opportunity. And then, in case after case, the government provides the plot, the means, and the opportunity.

Here's how it works: Informants report to their handlers on people who have, say, made statements sympathizing with terrorists. Those names are then cross-referenced with existing intelligence data, such as immigration and criminal records. FBI agents may then assign an undercover operative to approach the target by posing as a radical. Sometimes the operative will propose a plot, provide explosives, even lead the target in a fake oath to Al Qaeda. Once enough incriminating information has been gathered, there's an arrest—and a press conference [20] announcing another foiled plot.

If this sounds vaguely familiar, it's because such sting operations are a fixture in the headlines. Remember the Washington Metro [21] bombing plot? The New York subway [22] plot? The guys who planned to blow up the Sears Tower [23]? The teenager seeking to bomb a Portland Christmas tree [24] lighting? Each of those plots, and dozens more across the nation, was led by an FBI asset.

Over the past year, Mother Jones and the Investigative Reporting Program at the University of California-Berkeley have examined prosecutions of 508 defendants in terrorism-related cases, as defined by the Department of Justice. Our investigation found:

  • Nearly half the prosecutions involved the use of informants, many of them incentivized by money (operatives can be paid as much as $100,000 per assignment) or the need to work off criminal or immigration violations. (For more on the details of those 508 cases, see our charts page [6] and searchable database [25].)
  • Sting operations resulted in prosecutions against 158 defendants. Of that total, 49 defendants participated in plots led by an agent provocateur—an FBI operative instigating terrorist action.
  • With three exceptions, all of the high-profile domestic terror plots of the last decade were actually FBI stings. (The exceptions are Najibullah Zazi, who came close to bombing [26] the New York City subway system in September 2009; Hesham Mohamed Hadayet [27], an Egyptian who opened fire on the El-Al ticket counter at the Los Angeles airport; and failed Times Square bomberFaisal Shahzad [28].)
  • In many sting cases, key encounters between the informant and the target were not recorded—making it hard for defendants claiming entrapment to prove their case.
  • Terrorism-related charges are so difficult to beat in court, even when the evidence is thin, that defendants often don't risk a trial.

"The problem with the cases we're talking about is that defendants would not have done anything if not kicked in the ass by government agents," says Martin Stolar, a lawyer who represented a man caught in a 2004 sting involving New York's Herald Square [22] subway station. "They're creating crimes to solve crimes so they can claim a victory in the war on terror." In the FBI's defense, supporters argue that the bureau will only pursue a case when the target clearly is willing to participate in violent action. "If you're doing a sting right, you're offering the target multiple chances to back out," says Peter Ahearn, a retired FBI special agent who directed the Western New York Joint Terrorism Task Force and oversaw the investigation of the Lackawanna Six [29], an alleged terror cell near Buffalo, New York. "Real people don't say, 'Yeah, let's go bomb that place.' Real people call the cops."

Even so, Ahearn concedes that the uptick in successful terrorism stings might not be evidence of a growing threat so much as a greater focus by the FBI. "If you concentrate more people on a problem," Ahearn says, "you'll find more problems." Today, the FBI follows up on literally every single call, email, or other terrorism-related tip it receives for fear of missing a clue.

And the emphasis is unlikely to shift anytime soon. Sting operations have "proven to be an essential law enforcement tool in uncovering and preventing potential terror attacks," said Attorney General Eric Holder in a December 2010 speech [45] to Muslim lawyers and civil rights activists. President Obama's Department of Justice has announced sting-related prosecutions at an even faster clip than the Bush administration, with 44 new cases since January 2009. With the war on terror an open-ended and nebulous conflict, the FBI doesn't have an exit strategy.

Located deep in a wooded area on a Marine Corps base west of Interstate 95—a setting familiar from Silence of the Lambs—is the sandstone fortress of the FBI Academy in Quantico, Virginia. This building, erected under J. Edgar Hoover, is where to this day every FBI special agent is trained.

J. Stephen Tidwell graduated from the academy in 1981 and over the years rose to executive assistant director, one of the 10 highest positions in the FBI; in 2008, he coauthored the Domestic Investigations and Operations Guide, or DIOG [46] (PDF), the manual for what agents and informants can and cannot do.

A former Texas cop, Tidwell is a barrel-chested man with close-cropped salt-and-pepper hair. He's led some of the FBI's highest-profile investigations, including the DC sniper case and the probe of the 9/11 attack on the Pentagon.

On a cloudy spring afternoon, Tidwell, dressed in khakis and a blue sweater, drove me in his black Ford F-350 through Hogan's Alley [47]—a 10-acre Potemkin village with houses, bars, stores, and a hotel. Agents learning the craft role-play stings, busts, and bank robberies here, and inside jokes and pop-culture references litter the place (which itself gets its name from a 19th-century comic strip). At one end of the town is the Biograph Theater, named for the Chicago movie house where FBI agents gunned down John Dillinger [48] in 1934. ("See," Tidwell says. "The FBI has a sense of humor.")

Inside the academy, a more somber tone prevails. Plaques everywhere honor agents who have been killed on the job. Tidwell takes me to one that commemorates John O'Neill, who became chief of the bureau's then-tiny counterterrorism section in 1995. For years before retiring from the FBI, O'Neill warned [49] of Al Qaeda's increasing threat, to no avail. In late August 2001, he left the bureau to take a job as head of security for the World Trade Center, where he died 19 days later at the hands of the enemy he'd told the FBI it should fear. The agents he had trained would end up reshaping the bureau's counterterrorism operations.

Before 9/11, FBI agents considered chasing terrorists an undesirable career path, and their training did not distinguish between Islamic terror tactics and those employed by groups like the Irish Republican Army. "A bombing case is a bombing case," Dale Watson, who was the FBI's counterterrorism chief on 9/11, said in a December 2004 deposition. The FBI also did not train agents in Arabic or require most of them to learn about radical Islam. "I don't necessarily think you have to know everything about the Ku Klux Klan to investigate a church bombing," Watson said. The FBI had only one Arabic speaker [50] in New York City and fewer than 10 nationwide.

But shortly after 9/11, President George W. Bush called FBI Director Robert Mueller to Camp David. His message: never again. And so Mueller committed to turn the FBI into a counterintelligence organization rivaling Britain's MI5 in its capacity for surveillance and clandestine activity. Federal law enforcement went from a focus on fighting crime to preventing crime; instead of accountants and lawyers cracking crime syndicates, the bureau would focus on Jack Bauer-style operators disrupting terror groups.

To help run the counterterrorism section, Mueller drafted Arthur Cummings, a former Navy SEAL who'd investigated the first World Trade Center bombing. Cummings pressed agents to focus not only on their immediate target, but also on the extended web of people linked to the target. "We're looking for the sympathizer who wants to become an operator, and we want to catch them when they step over that line to operator," Cummings says. "Sometimes, that step takes 10 years. Other times, it takes 10 minutes." The FBI's goal is to create a hostile environment for terrorist recruiters and operators—by raising the risk of even the smallest step toward violent action. It's a form of deterrence, an adaptation of the "broken windows" theory used to fight urban crime. Advocates insist it has been effective, noting that there hasn't been a successful large-scale attack against the United States since 9/11. But what can't be answered—as many former and current FBI agents acknowledge—is how many of the bureau's targets would have taken the step over the line at all, were it not for an informant.

So how did the FBI build its informant network? It began by asking where US Muslims lived. Four years after 9/11, the bureau brought in a CIA expert on intelligence-gathering methods named Phil Mudd [51]. His tool of choice was a data-mining system using commercially available information, as well as government data such as immigration records, to pinpoint the demographics of specific ethnic and religious communities—say, Iranians in Beverly Hills or Pakistanis in the DC suburbs.

The FBI officially denies that the program, known as Domain Management, works this way—its purpose, the bureau says, is simply to help allocate resources according to threats. But FBI agents told me that with counterterrorism as the bureau's top priority, agents often look for those threats in Muslim communities—and Domain Management allows them to quickly understand those communities' makeup. One high-ranking former FBI official jokingly referred to it as "Battlefield Management."

Some FBI veterans criticized the program as unproductive and intrusive—one told Mudd during a high-level meeting that he'd pushed the bureau to "the dark side." That tension has its roots in the stark difference between the FBI and the CIA: While the latter is free to operate internationally without regard to constitutional rights, the FBI must respect those rights in domestic investigations, and Mudd's critics saw the idea of targeting Americans based on their ethnicity and religion as a step too far.

Nonetheless, Domain Management quickly became the foundation for the FBI's counterterrorism dragnet. Using the demographic data, field agents were directed to target specific communities to recruit informants. Some agents were assigned to the task full time. And across the bureau, agents' annual performance evaluations are now based in part on their recruiting efforts.

People cooperate with law enforcement for fairly simple reasons: ego, patriotism, money, or coercion. The FBI's recruitment has relied heavily on the latter. One tried-and-true method is to flip someone facing criminal charges. But since 9/11 the FBI has also relied heavily on Immigration and Customs Enforcement [42], with which it has worked closely as part of increased interagency coordination. A typical scenario will play out like this: An FBI agent trying to get someone to cooperate will look for evidence that the person has immigration troubles. If they do, he can ask ICE to begin or expedite deportation proceedings. If the immigrant then chooses to cooperate, the FBI will tell the court that he is a valuable asset, averting deportation.

Sometimes, the target of this kind of push is the one person in a mosque who will know everyone's business—the imam. Two Islamic religious leaders, Foad Farahi[52] in Miami and Sheikh Tarek Saleh in New York City, are currently fighting deportation proceedings that, they claim, began after they refused to become FBI assets. The Muslim American Society Immigrant Justice Center has filed similar complaints on behalf of seven other Muslims with the Department of Homeland Security.

Once someone has signed on as an informant, the first assignment is often a fishing expedition. Informants have said in court testimony that FBI handlers have tasked them with infiltrating mosques without a specific target or "predicate"—the term of art for the reason why someone is investigated. They were, they say, directed to surveil law-abiding Americans with no indication of criminal intent.

"The FBI is now telling agents they can go into houses of worship without probable cause," says Farhana Khera, executive director of the San Francisco-based civil rights group Muslim Advocates. "That raises serious constitutional issues."

Tidwell himself will soon have to defend these practices in court—he's among those named in a class-action lawsuit [53] (PDF) over an informant's allegation that the FBI used him to spy on a number of mosques in Southern California.

That informant, Craig Monteilh, is a convicted felon who made his money ripping off cocaine dealers before becoming an asset for the Drug Enforcement Administration and later the FBI. A well-muscled 49-year-old with a shaved scalp, Monteilh has been a particularly versatile snitch: He's pretended to be a white supremacist, a Russian hit man, and a Sicilian drug trafficker. He says when the FBI sent him into mosques (posing as a French-Syrian Muslim), he was told to act as a decoy for any radicals who might seek to convert him—and to look for information to help flip congregants as informants, such as immigration status, extramarital relationships, criminal activities, and drug use. "Blackmail is the ultimate goal," Monteilh says.

Officially, the FBI denies it blackmails informants. "We are prohibited from using threats or coercion," says Kathleen Wright, an FBI spokeswoman. (She acknowledges that the bureau has prevented helpful informants from being deported.)

FBI veterans say reality is different from the official line. "We could go to a source and say, 'We know you're having an affair. If you work with us, we won't tell your wife,'" says a former top FBI counterterrorism official. "Would we actually call the wife if the source doesn't cooperate? Not always. You do get into ethics here—is this the right thing to do?—but legally this isn't a question. If you obtained the information legally, then you can use it however you want."

But eventually, Monteilh's operation imploded in spectacular fashion. In December 2007, police in Irvine, California, charged him with bilking two women out of $157,000 as part of an alleged human growth hormone scam. Monteilh has maintained it was actually part of an FBI investigation, and that agents instructed him to plead guilty to a grand-theft charge and serve eight months so as not to blow his cover. The FBI would "clean up" the charge later, Monteilh says he was told. That didn't happen, and Monteilh has alleged in court filings that the government put him in danger by letting fellow inmates know that he was an informant. (FBI agents told me the bureau wouldn't advise an informant to plead guilty to a state criminal charge; instead, agents would work with local prosecutors to delay or dismiss the charge.)

The class-action suit, filed by the ACLU, alleges that Tidwell, then the bureau's Los Angeles-based assistant director, signed off on Monteilh's operation. And Tidwell says he's eager to defend the bureau in court. "There is not the blanket suspicion of the Muslim community that they think there is," Tidwell says. "We're just looking for the bad guys. Anything the FBI does is going to be interpreted as monitoring Muslims. I would tell [critics]: 'Do you really think I have the time and money to monitor all the mosques and Arab American organizations? We don't. And I don't want to.'"

Shady informants, of course, are as old as the FBI; one saying in the bureau is, "To catch the devil, you have to go to hell." Another is, "The only problem worse than having an informant is not having an informant." Back in the '80s, the FBI made a cottage industry of drug stings—a source of countless Hollywood plots, often involving briefcases full of cocaine and Miami as the backdrop.

It's perhaps fitting, then, that one of the earliest known terrorism stings also unfolded in Miami, though it wasn't launched by the FBI. Instead the protagonist was a Canadian bodyguard and, as a Fort Lauderdale, Florida, newspaper put it in 2002 [54], "a 340-pound man with a fondness for firearms and strippers." He subscribed to Soldier of Fortune [55] and hung around a police supply store on a desolate stretch of Hollywood Boulevard, north of Miami.

Howard Gilbert aspired to be a CIA agent but lacked pertinent experience. So to pad his résumé, he hatched a plan to infiltrate a mosque in the suburb of Pembroke Pines by posing as a Muslim convert named Saif Allah [56]. He told congregants that he was a former Marine and a security expert, and one night in late 2000, he gave a speech about the plight of Palestinians.

"That was truly the night that launched me into the terrorist umbrella of South Florida," Gilbert would later brag [57] to the South Florida Sun-Sentinel.

Nineteen-year-old congregant Imran Mandhai, stirred by the oration, approached Gilbert and asked if he could provide him weapons and training. Gilbert, who had been providing information to the FBI, contacted his handlers and asked for more money to work on the case. (He later claimed that the bureau had paid him $6,000.) But he ultimately couldn't deliver—the target had sensed something fishy about his new friend.

The bureau also brought in Elie Assaad [58], a seasoned informant originally from Lebanon. He told Mandhai that he was an associate of Osama bin Laden tasked with establishing a training camp in the United States. Gilbert suggested attacking electrical substations in South Florida, and Assaad offered to provide a weapon. FBI agents then arrested Mandhai; he pleaded guilty in federal court and was sentenced to nearly 14 years in prison. It was a model of what would become the bureau's primary counterterrorism M.O.—identifying a target, offering a plot, and then pouncing.

Gilbert himself didn't get to bask in his glory; he never worked for the FBI again and died in 2004. Assaad, for his part, ran into some trouble when his pregnant wife called 911. She said Assaad had beaten and choked her to the point that she became afraid [59] for her unborn baby; he was arrested, but in the end his wife refused to press charges.

The jail stint didn't keep Assaad from working for the FBI on what would turn out to be perhaps the most high-profile terrorism bust of the post-9/11 era. In 2005, the bureau got a tip [60] from an informant about a group of alleged terrorists in Miami's Liberty City neighborhood. The targets wereseven men [61]—some African American, others Haitian—who called themselves the "Seas of David" [62] and ascribed to religious beliefs that blended Judaism, Christianity, and Islam. The men were martial-arts enthusiasts who operated out of a dilapidated warehouse, where they also taught classes for local kids. The Seas of David's leader was Narseal Batiste [63], the son of a Louisiana preacher, father of four, and a former Guardian Angel.

In response to the informant's tip, the FBI had him wear a wire during meetings with the men, but he wasn't able to engage them in conversations about terrorist plots. So he introduced the group to Assaad, now playing an Al Qaeda operative. At the informant's request, Batiste took photographs of the FBI office in North Miami Beach and was caught on tape discussing a notion to bomb the Sears Tower in Chicago. Assaad led Batiste, and later the other men, in swearing an oath to Al Qaeda, though the ceremony (recorded and entered into evidence at trial) bore a certain "Who's on First?" flavor:

"God's pledge is upon me, and so is his compact," Assaad said as he and Batiste sat in his car. "Repeat after me."

"Okay. Allah's pledge is upon you."

"No, you have to repeat exactly. God's pledge is upon me, and so is his compact. You have to repeat."

"Well, I can't say Allah?" Batiste asked.

"Yeah, but this is an English version because Allah, you can say whatever you want, but—"

"Okay. Of course."

"Okay."

"Allah's pledge is upon me. And so is his compact," Batiste said, adding: "That means his angels, right?"

"Uh, huh. To commit myself," Assaad continued.

"To commit myself."

"Brother."

"Brother," Batiste repeated.

"Uh. That's, uh, what's your, uh, what's your name, brother?"

"Ah, Brother Naz."

"Okay. To commit myself," the informant repeated.

"To commit myself."

"Brother."

"Brother."

"You're not—you have to say your name!" Assaad cried.

"Naz. Naz."

"Uh. To commit myself. I am Brother Naz. You can say, 'To commit myself.'"

"To commit myself, Brother Naz."

Things went smoothly until Assaad got to a reference to being "protective of the secrecy of the oath and to the directive of Al Qaeda."

Here Batiste stopped. "And to...what is the directive of?"

"Directive of Al Qaeda," the informant answered.

"So now let me ask you this part here. That means that Al Qaeda will be over us?"

"No, no, no, no, no," Assaad said. "It's an alliance."

"Oh. Well..." Batiste said, sounding resigned.

"It's an alliance, but it's like a commitment, by, uh, like, we respect your rules. You respect our rules," Assaad explained.

"Uh, huh," Batiste mumbled.

"And to the directive of Al Qaeda," Assaad said, waiting for Batiste to repeat.

"Okay, can I say an alliance?" Batiste asked. "And to the alliance of Al Qaeda?"

"Of the alliance, of the directive—" Assaad said, catching himself. "You know what you can say? And to the directive and the alliance of Al Qaeda."

"Okay, directive and alliance of Al Qaeda," Batiste said.

"Okay," the informant said. "Now officially you have commitment and we have alliance between each other. And welcome, Brother Naz, to Al Qaeda."

Or not. Ultimately, the undercover recordings made by Assaad suggest that Batiste, who had a failing drywall business and had trouble making the rent for the warehouse, was mostly trying to shake down his "terrorist" friend. After first asking the informant for $50,000, Batiste is recorded in conversation after conversation asking how soon he'll have the cash.

"Let me ask you a question," he says in one exchange. "Once I give you an account number, how long do you think it's gonna take to get me something in?"

"So you is scratching my back, [I'm] scratching your back—we're like this," Assaad dodged.

"Right," Batiste said.

The money never materialized. Neither did any specific terrorist plot. Nevertheless, federal prosecutors charged (PDF [64]) Batiste and his cohorts—whom the media dubbed the Liberty City Seven—with conspiracy to support terrorism, destroy buildings, and levy war against the US government. Perhaps the key piece of evidence was the video of Assaad's Al Qaeda "oath." Assaad was reportedly paid [65] $85,000 for his work on the case; the other informant got $21,000.

James J. Wedick, a former FBI agent, was hired to review the Liberty City case as a consultant for the defense. In his opinion, the informant simply picked low-hanging fruit. "These guys couldn't find their way down the end of the street," Wedick says. "They were homeless types. And, yes, we did show a picture where somebody was taking the oath to Al Qaeda. So what? They didn't care. They only cared about the money. When we put forth a case like that to suggest to the American public that we're protecting them, we're not protecting them. The agents back in the bullpen, they know it's not true."

Indeed, the Department of Justice had a difficult time winning convictions in the Liberty City case. In three separate trials, juries deadlocked [66] on most of the charges, eventually acquitting one of the defendants (charges against another were dropped) and convicting five of crimes that landed them in prison for between 7 to 13 years. When it was all over, Assaad told ABC News' Brian Ross [58] that he had a special sense for terrorists: "God gave me a certain gift."

But he didn't have a gift for sensing trouble. After the Liberty City case, Assaad moved on to Texas and founded a low-rent modeling agency [67]. In March, when police tried to pull him over, he led them in a chase through El Paso [68] (with his female passenger jumping out at one point), hit a cop with his car, and ended up rolling his SUV on the freeway. Reached by phone, Assaad declined to comment. He's saving his story, he says, for a book he's pitching to publishers.

Not all of the more than 500 terrorism prosecutions [25] reviewed in this investigation are so action-movie ready. But many do have an element of mystery. For example, though recorded conversations are often a key element of prosecutions, in many sting cases the FBI didn't record large portions of the investigation, particularly during initial encounters or at key junctures during the sting. When those conversations come up in court, the FBI and prosecutors will instead rely on the account of an informant with a performance bonus on the line.


One of the most egregious examples of a missing recording involves a convoluted tale that begins in the early morning hours of November 1, 2009, with a date-rape allegation on the campus of Oregon State University. Following a Halloween party, 18-year-old Mohamed Osman Mohamud [70], a Somali-born US citizen, went home with another student. The next morning, the woman reported to police that she believed she had been drugged.

Campus police brought Mohamud in for questioning and a polygraph test; FBI agents, who for reasons that have not been disclosed had been keeping an eye on the teen for about a month, were also there [71]. Mohamud claimed that the sex was consensual, and a drug test given to his accuser eventually came back negative.

During the interrogation, OSU police asked Mohamud if a search of his laptop would indicate that he'd researched date-rape drugs. He said it wouldn't and gave them permission to examine his hard drive. Police copied its entire contents and turned the data over to the FBI—which discovered, it later alleged in court documents, that Mohamud had emailed someone in northwest Pakistan talking about jihad.

Soon after his run-in with police, Mohamud began to receive emails from "Bill Smith," a self-described terrorist who encouraged him to "help the brothers." "Bill," an FBI agent, arranged for Mohamud to meet one of his associates in a Portland hotel room. There, Mohamud told the agents that he'd been thinking of jihad since age 15. When asked what he might want to attack, Mohamud suggested the city's Christmas tree lighting ceremony [72]. The agents set Mohamud up with a van that he thought was filled with explosives. On November 26, 2010, Mohamud and one of the agents drove the van to Portland's Pioneer Square, and Mohamud dialed [73] the phone to trigger the explosion. Nothing. He dialed again. Suddenly FBI agents appeared and dragged him away as he kicked and yelled, "Allahu akbar!" Prosecutors charged him with attempting to use a weapon of mass destruction; his trial is pending.

The Portland case has been held up as an example of how FBI stings can make a terrorist where there might have been only an angry loser. "This is a kid who, it can be reasonably inferred, barely had the capacity to put his shoes on in the morning," Wedick says.

But Tidwell, the retired FBI official, says Mohamud was exactly the kind of person the FBI needs to flush out. "That kid was pretty specific about what he wanted to do," he says. "What would you do in response? Wait for him to figure it out himself? If you'll notice, most of these folks [targeted in stings] plead guilty. They don't say, 'I've been entrapped,' or, 'I was immature.'" That's true—though it's also true that defendants and their attorneys know that the odds of succeeding at trial are vanishingly small. Nearly two-thirds of all terrorism prosecutions since 9/11 have ended in guilty pleas, and experts hypothesize that it's difficult for such defendants to get a fair trial. "The plots people are accused of being part of—attacking subway systems or trying to bomb a building—are so frightening that they can overwhelm a jury," notes David Cole, a Georgetown University law professor who has studied these types of cases.

But the Mohamud story wasn't quite over—it would end up changing the course of another case on the opposite side of the country. In Maryland, rookie FBI agent Keith Bender had been working a sting against 21-year-old Antonio Martinez [74], a recent convert to Islam who'd posted inflammatory comments on Facebook [75]("The sword is cummin the reign of oppression is about 2 cease inshallah"). An FBI informant had befriended Martinez and, in recorded conversations, they talked about attacking a military recruiting station.

Just as the sting was building to its climax, Martinez saw news reports about the Mohamud case, and how there was an undercover operative involved. He worried: Was he, too, being lured into a sting? He called his supposed terrorist contact: "I'm not falling for no BS," he told him [75].

Faced with the risk of losing the target, the informant—whose name is not revealed in court records—met with Martinez and pulled him back into the plot. But while the informant had recorded numerous previous meetings with Martinez, no recording [76] was made for this key conversation; in affidavits, the FBI blamed a technical glitch. Two weeks later, on December 8, 2010, Martinez parked what he thought was a car bomb in front of a recruitment center and was arrested when he tried to detonate [77] it.

Frances Townsend, who served as homeland security adviser to President George W. Bush, concedes that missing recordings in terrorism stings seem suspicious. But, she says, it's more common than you might think: "I can't tell you how many times I had FBI agents in front of me and I yelled, 'You have hundreds of hours of recordings, but you didn't record this meeting.' Sometimes, I admit, they might not record something intentionally"—for fear, she says, that the target will notice. "But more often than not, it's a technical issue."

Wedick, the former FBI agent, is less forgiving. "With the technology the FBI now has access to—these small devices that no one would ever suspect are recorders or transmitters—there's no excuse not to tape interactions between the informant and the target," he says. "So why in many of these terrorism stings are meetings not recorded? Because it's convenient for the FBI not to record."

So what really happens as an informant works his target, sometimes over a period of years, and eases him over the line? For the answer to that, consider once more the case of James Cromitie [8], the Walmart stocker with a hatred of Jews. Cromitie was the ringleader in the much-publicized Bronx synagogue bombing plot that went to trial last year [78]. But a closer look at the record reveals that while Cromitie was no one's idea of a nice guy, whatever leadership existed in the plot emanated from his sharply dressed, smooth-talking friend Maqsood, a.k.a. FBI informant Shahed Hussain.

A Pakistani refugee who claimed to be friends with Benazir Bhutto and had a soft spot for fancy cars, Hussain was by then one of the FBI's more successful counterterrorism informants. (See our timeline of Hussain's career as an informant [13].) He'd originally come to the bureau's attention when he was busted in a DMV scam [79] that charged test takers $300 to $500 for a license. Having "worked off" those charges, he'd transitioned from indentured informant to paid snitch, earning as much as $100,000 per assignment.

Hussain was assigned to visit a mosque in Newburgh, where he would start conversations with strangers about jihad [80]. "I was finding people who would be harmful, and radicals, and identify them for the FBI," Hussain said during Cromitie's trial. Most of the mosque's congregants were poor, and Hussain, who posed as a wealthy businessman and always arrived in one of his four luxury cars [81]—a Hummer, a Mercedes, two different BMWs—made plenty of friends. But after more than a year working the local Muslim community, he had not identified a single actual target [82].

Then, one day in June 2008, Cromitie approached Hussain in the parking lot outside the mosque. The two became friends, and Hussain clearly had Cromitie's number. "Allah didn't bring you here to work for Walmart," he told him [83] at one point.

Cromitie, who once claimed he could "con the corn from the cob," had a history of mental instability. He told a psychiatrist that he saw and heard things that weren't there and had twice tried to commit suicide [84]. He told tall tales, most of them entirely untrue—like the one about how his brother stole $126 million worth of stuff from Tiffany.

Exactly what Hussain and Cromitie talked about in the first four months of their relationship isn't known, because the FBI did not record [85] those conversations. Based on later conversations, it's clear that Hussain cultivated Cromitie assiduously. He took the target, all expenses paid [86] by the FBI, to an Islamic conference in Philadelphia to meet Imam Siraj Wahhaj, a prominent African-American Muslim leader. He helped pay Cromitie's rent [87]. He offered to buy him a barbershop [88]. Finally, he asked Cromitie to recruit others [89] and help him bomb synagogues.

On April 7, 2009, at 2:45 p.m., Cromitie and Hussain sat on a couch inside an FBI cover house on Shipp Street in Newburgh. A hidden camera [90] was trained on the living room.

"I don't want anyone to get hurt," Cromitie told the informant [91].

"Who? I—"

"Think about it before you speak," Cromitie interrupted.

"If there is American soldiers, I don't care," Hussain said, trying a fresh angle.

"Hold up," Cromitie agreed. "If it's American soldiers, I don't even care."

"If it's kids, I care," Hussain said. "If it's women, I care."

"I care. That's what I'm worried about. And I'm going to tell you, I don't care if it's a whole synagogue of men."

"Yep."

"I would take 'em down, I don't even care. 'Cause I know they are the ones."

"We have the equipment to do it."

"See, see, I'm not worried about nothing. Ya know? What I'm worried about is my safety," Cromitie said.

"Oh, yeah, safety comes first."

"I want to get in and I want to get out."

"Trust me," Hussain assured.

At Cromitie's trial, Hussain would admit that he created the—in his word—"impression" that Cromitie would make a lot of money by bombing synagogues.

"I can make you $250,000, but you don't want it, brother," he once told [92] Cromitie when the target seemed hesitant. "What can I tell you?" (Asked about the exchange in court, Hussain said that "$250,000" was simply a code word for the bombing plot—a code word, he admitted, that only he knew.)

But whether for ideology or money, Cromitie did recruit three others, and they did take photographs of Stewart International Airport in Newburgh as well as of synagogues in the Bronx. On May 20, 2009, Hussain drove Cromitie [93] to the Bronx, where Cromitie put what he believed were bombs [94] inside cars he thought had been parked by Hussain's coconspirators. Once all the dummy bombs were placed, Cromitie headed back to the getaway car [95]—Hussain was in the driver's seat—and then a SWAT team surrounded the car.

At trial, Cromitie told the judge [96]: "I am not a violent person. I've never been a terrorist, and I never will be. I got myself into this stupid mess. I know I said a lot of stupid stuff." He was sentenced to 25 years.

For his trouble, the FBI paid Hussain $96,000 [97]. Then he moved on to another case, another mosque, somewhere in the United States.