Friday, September 26, 2014

Gateway Policies: ISIS, Obama and US Financial Boots-on-the-Ground

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President Obama’s neo-Cold War is not about ideology or respect for borders. It is about money and global power. The current battle over control of gateway nations - strategic locations in which private firms can establish the equivalent of financial boots-on-the-ground - is being waged in the Middle East and Ukraine under the auspices of freedom and western capitalism (er, “democracy”). In these global gateways, private banks can infiltrate resource-rich locales fortified by political will, public aid and military support to garner lucrative market advantages. ISIS poses a threat to global gateway control that transcends any human casualties. That’s why Congress decided to authorize funds to fight ISIS despite the risk.
The common thread of today’s global gateway nations appears to be oil. But even more valuable are the multitude of financing deals that would accompany building new pipelines, arming allies, and reconstructing civil-war-torn countries. Indeed, hundreds of billions of dollars are at stake in America’s wars of  “principle.”
Middle-East Gateways: ISIS and Money
Obama’s recent public address on fighting ISIS  had a dash of economy sprinkled in. For him, US economic policy is foreign policy. It is also a product of an American political-financial expansionary land-and-resource grab that has been going on for decades. Obama’s execution may be far less authoritative than President Eisenhower’s. But his neo-financial Cold War has similar elements to those initiated by Eisenhower and the American banking elite in the 1950s when they collaborated to project American power into more countries, using the military and a combination of public and private capital, as tools.
The second World Bank President and 1950s Chairman of Chase Bank, John McCloy, and ascending and later Chase Chairman David Rockefeller both had aspirations to financially penetrate the Middle East. So did other major bankers. The US government and its banks first focused on Beirut as a gateway to the Middle East. Eisenhower dispatched military personnel to Beirut in 1958 not because he cared about the Lebanese, but because of the attractiveness of the country’s potential as a gateway to the region. By the 1970s, oil and money relationships between Chase and Saudi Arabia and Egypt grew, as they did with Iran and the Shah. Rockefeller's relationship with the Shah, who kept his family money with Chase, ignited the Iranian hostage crisis in 1979. Before that, the US government and its military contractors made billions of dollars from arms deals with Iran. 
Citigroup opened its first Iraq branch in September 2013, ten years after George W. Bush began his Iraq War while facing a recessed American economy. A decade ago, the Bush administration selected JPM Chase to manage billions of dollars of financing for Iraq imports and exports. JPM Chase also opened a branch in Iraq last year to compete with Citigroup for current gains. Billions of dollars in new pipeline funding and other projects are now up for grabs in Iraq. If the US supports the Iraqi government (against ISIS), these banks, as well as oil and infrastructure-building companies are poised to get more of a chunk of that money. Citigroup is already a forerunner for arranging a $2 billion loan for Boeing Jets to Iraq. As Iraq's Deputy Transport Minister Bangen Rekani said in April, “We need a lot of funds...we’re in a race to complete the maximum number of projects in a short time.” 
Regarding Syria, Obama’s plea for showing strength worked. Congress voted in rare bipartisan fashion to fund the moderate Syrian rebels or “free Syrian army rebels.” According to Defense Secretary Chuck Hagel, initial assistance would be “small arms, vehicles and basic equipment like communications, as well as tactical and strategic training.” That could just be the beginning. He also said, “as these forces prove their effectiveness on the battlefield, we would be prepared to provide increasingly sophisticated types of assistance."  We’ve been down this road before, positioning the military to gain financial access to an area relative to our competition. It’s lasted for years and killed thousands of people, while not accomplishing the stated goal of curtailing terrorist threats or activities.
It gets complicated from there. Moderate Syrian rebels have been fighting against Syrian President Bashar al-Assad, whom the US would support against ISIS. The US thinks these forces would cease fighting against al-Assad to fight ISIS instead, though the US claims it is not directly cooperating with  al-Assad. 
Despite this, the US financial hope is that once the dust clears from all these regime changes we support militarily, there will be demand for massive reconstruction and resource extraction projects that our private banks can take care of alongside the IMF and World Bank. At a press conference in Beirut in June, World Bank President Jim Yong Kim told the international community that the World Bank would help to rebuild Syria (at a cost of $150 billion after an “internationally recognized government” was put in place) as well as Jordan, Lebanon, Turkey and Iraq during their 'recovery' from years of war. Mega reconstruction profits are at stake for private firms in symbiotic partnerships  with these international entities. So too, are the requirements for austerity and loosely regulated financial markets as the Western “reform” bargains that accompany them. 
“Wars on terror” serve as a distraction in public and media discourse from a bipolar economy. The September releases of the US Census Report and the Federal Reserve Consumer Finance Survey revealed an ongoing trend toward greater income and wealth inequality. We remain 8 million jobs below pre-crisis levels, adjusted for population growth. Real wages have stagnated or declined. Employers have no incentive to provide well-paying jobs amidst ample desperation in the ranks of the unemployed. We are a mess at home.
Rather than deal with this, the US is trying to prevent terrorism from blocking private bank and corporate expansions and profit elsewhere. ISIS has already caused Iraq to delay its first mega project-finance deal. The $18 billion Basra-Aqaba oil pipeline would extend through Jordan to the Red Sea, pumping a million barrels of crude oil per day, as well as 258 million cubic feet of gas.  That’s a hefty financial incentive for which to use public funds.
Truth be told, the game of global gateway finance is a closed one. And there’s still Russia (and China) playing at the same table. In August 2014, Russia’s biggest oil company, Lukoil, estimated construction of the first branch of a pipeline to Iraq’s West Qurna-2 field at a cost of up to $1 billion. Lukoil holds a 75% stake in West Qurna-2 and has invested over $4 billion in the project, which is already producing more than 200,000 barrels of oil per day.
Cold-War Gateways: From Cuba to the Ukraine
The narrative of Russia's aggression vs. America’s fight for freedom dovetails with the turmoil going on in the Middle East. Both situations deflect attention from our country, which has greater inequality today than before Obama took office, despite a soaring stock market buoyed by the Fed's stimulus policy of pumping zero-interest rate money into banks providing them capital for all of these international adventures.
After Ukrainian President Poroshenko, a former banker and chocolate mogul, proclaimed the situation with Russia was much improved following his truce with Vladimir Putin, President Obama ratcheted up sanctions against Russia and corralled the rest of the Euro-squad to join him. This action was not about saving Kiev from pro-Russian rebels, but to reinforce the notion that the US is in financial control of the country. Poroshenko is no financial dummy, which is why he threw Putin and any potential Russian economic support under the bus, and high-tailed it to Washington for photo-ops and handouts.
These will come in the form of US government aid, more loans from the IMF and World Bank, plus complex transactions with US banks seeking more areas in which to funnel foreign capital, finance projects, and down the line, maybe securitize the resources of a new corner of the world and sell them to a fresh bunch of hungry speculators. The US has already provided $60 million in aid including food, body armor and communications equipment to the Ukraine to secure its place at this gateway table later.
Stepping back in time, my book, All the Presidents' Bankers illustrates how President Eisenhower's 1950s doctrine promoted a combination of US military and economic support to its non-communist allies. Aid from the then-new World Bank and IMF was provided in return for their commitment to provide open trade relationships and adapt policies advantageous to private western banks and corporations. The US government could thus achieve a dual military and financial stronghold. One such country was Cuba, which under Fulgencio Batista became a favorite spot from which to access Latin and South America. National City Bank (now Citigroup) established 11 branches in Havana alone, becoming Cuba’s principle US depository for American companies involved in the sugar industry and other businesses there. That changed with the Cuban revolution and Fidel Castro, who, in 1960, nationalized foreign bank assets. Bankers looked elsewhere to expand, as did the US government.
In Obama’s political-financial strategy, similar gateway strategies are in play. Obama, like all US presidents since Castro came into power, did the communist-bravado thing and extended sanctions. US bankers will reenter Cuba when US policy changes after Castro is truly gone, as they have during several periods before, notably when National City Bank sent an entourage of bankers led by Chairman Charles Mitchell in the 1920s to explore sugar, nickel, and other deals that eventually soured in the 1929 Crash.
The Ukraine is a modern Cuba with more lucrative resources. As with other US financial gateways, Obama supported the Ukraine faction amenable to financial relationships with the US and Europe relative to Russia. Ten years ago, the Bush administration supported Ukrainian leaders sympathizing with the US vs. Russia as well.  None of this was because of any purported interest in dispersing democracy, but because the right leadership offers more capital market, foreign investment and resource control opportunities to private US firms.
The Ukraine signed a $10 billion shale gas deal with US oil giant Chevron to explore its Olesky gas deposit around the time it expressed a desire for closer partnerships with the EU. Its ousted ex-President Viktor Yanukovych's decision to subsequently shun an EU trade agreement in favor of  Putin's offer of cheaper gas and a $15 billion aid package provoked internal unrest, as did its weak economy. The US denounced Russian-backed President Yanukovych, until he left his post, for he represented a potential loss of money, power and more financial access. Ukraine stands between Russian oil producers and European and Asian consumers, and is poised to profit from any growing energy demands from Western Europe, as could Western private firms.  It also serves as a potential financial out-post for US banks hunting for the next hot resource-saturated capital market.
Ironically, on September 17, 2014, the National Bank of Ukraine did a 180 spin on its economic forecasts and promised positive growth of 1% next year. The government said this economic expansion would come through more favorable corporate and income tax laws that would attract outside investors along the lines of what the US and IMF and World Bank has wanted. (More private relationships of bankers with these entities are inAll the Presidents’ Bankers.) The Ukraine received two parts of a $17 billion IMF bailout this year with the IMF saying it may need $19 billion more. This means a greater call on Ukraine’s future revenues in return for austerity measures and deregulated financial markets to private foreign interests.
The real battle between the US and Russia is over the gateway countries in political flux. The real winners will be the private banks and oil companies that will reap the strategic benefits from gateway control over related markets and resources, supported by military and political might, and augmented with speculative capital for years to come. American and global citizens, oblivious to all this, will be the losers in this global shell game.

How Former Treasury Officials and the UAE Are Manipulating American Journalists

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The tiny and very rich Persian Gulf emirate of Qatar has become a hostile target for two nations with significant influence in the U.S.: Israel and the United Arab Emirates. Israel is furious over Qatar’s support for Palestinians generally and (allegedly) Hamas specifically, while the UAE is upset that Qatar supports the Muslim Brotherhood in Egypt (UAE supports the leaders of the military coup) and that Qatar funds Islamist rebels in Libya (UAE supports forces aligned with Ghadaffi).

This animosity has resulted in a new campaign in the west to demonize the Qataris as the key supporter of terrorism. The Israelis have chosen the direct approach of publicly accusing their new enemy in Doha of being terrorist supporters, while the UAE has opted for a more covert strategy: paying millions of dollars to a U.S. lobbying firm – composed of former high-ranking Treasury officials from both parties – to plant anti-Qatar stories with American journalists. That more subtle tactic has been remarkably successful, and shines important light on how easily political narratives in U.S. media discourse can be literally purchased.

This murky anti-Qatar campaign was first referenced by New York Timesarticle two weeks ago by David Kirkpatrick, which reported that “an unlikely alignment of interests, including Saudi Arabia, the United Arab Emirates, Egypt and Israel” is seeking to depict Doha as “a godfather to terrorists everywhere” (Qatar vehemently denies the accusation). One critical component of that campaign was mentioned in passing:
The United Arab Emirates have retained an American consulting firm, Camstoll Group, staffed by several former United States Treasury Department officials. Its public disclosure forms, filed as a registered foreign agent, showed a pattern of conversations with journalists who subsequently wrote articles critical of Qatar’s role in terrorist fund-raising.
How that process worked is fascinating, and its efficacy demonstrates how American public perceptions and media reports are manipulated with little difficulty.

The Camstoll Group was formed on November 26, 2012. Its key figures are all former senior Treasury Department officials in both the Bush and Obama administrations whose responsibilities included managing the U.S. government’s relationships with Persian Gulf regimes and Israel, as well as managing policies relating to funding of designated terrorist groups. Most have backgrounds as neoconservative activists. Two of the Camstoll principals, prior to their Treasury jobs, worked with one of the country’s most extremist neoconanti-Muslim activists, Steve Emerson.

Camstoll’s founder, CEO and sole owner, Matthew Epstein, was a Treasury Department official from 2003 through 2010, a run that included a position as the department’s Financial Attaché to Saudi Arabia and the UAE. A 2007 diplomatic cable leaked by Chelsea Manning and published by WikiLeaks details Epstein’s meetings with high-level Abu Dhabi representatives as they plotted to cut off Iran’s financial and banking transactions. Those cables revealmultiple high-level meetings between Epstein in his capacity as a Treasury official and high-level officials of the Emirates, officials who are now paying his company millions of dollars to act as its agent inside the U.S.

Prior to his Treasury appointment by the Bush administration, Epstein was a neoconservative activist, writing articles for National Review and working withEmerson’s aggressively anti-Muslim Investigative Project (Epstein’s published resume omits his work with Emerson). His pre-Treasury work for Emerson’s group, obsessed with The Muslim Threat Within, presaged Peter King’s 2011 anti-Muslim witch hunts.

In 2003, for instance, Epstein told the U.S. Senate that “large sections of the institutional Islamic leadership in America do not support U.S. counterterrorism policy” and that “the radicalization of the Islamic political leadership in the United States has developed parallel to the radicalization of the Islamic leadership worldwide, sharing a conspiratorial view that Muslims in the United States are being persecuted on the basis of their religion and an acceptance that violence in the name of Islam is justified.” He declared: “the rise of militant Islamic leadership in the United States requires particular attention if we are to succeed in the War on Terror.”

Camstoll’s Managing Director, Howard Mendelsohn, was Acting Assistant Secretary of Treasury, where he also had ample policy responsibilities involving the Emirates; a 2010 WikiLeaks cable details how he “met with senior officials from the UAE’s State Security Department (SSD) and Dubai’s General Department of State Security (GDSS)” to coordinate disruption of Taliban financing. Another Managing Director, Benjamin Schmidt, worked with Epstein at Emerson’s Investigative Project before his own appointment to Treasury; a 2009 diplomatic cable shows him working with Israel on controlling financing to Palestinians. A Camstoll director, Benjamin Davis, was the Treasury Department’s Financial Attaché in Jerusalem.

On December 2, 2012 – less than a week after Camstoll was incorporated – it entered into a lucrative, open-ended consulting contract with an entity wholly owned by the Emirate of Abu Dhabi, Outlook Energy Investments, LLC (its Emir, the President of UAE, is pictured above). A week later, Camstollregistered as a foreign agent working on behalf of the Emirate. The consultancy agreement calls for Camstoll to be paid a monthly fee of $400,000, wired each month into a Camstoll account. Two weeks after it was formed, Camstoll was paid by the Emirates entity a retainer fee of $4.3 million, and then another $3.2 million in 2013.

In other words, a senior Treasury official responsible for U.S. policy toward the Emirates leaves the U.S. government and forms a new lobbying company, which is then instantly paid millions of dollars by the very same country for which he was responsible, all to use his influence, access and contacts for its advantage. The UAE spends more than any other country in the world to influence U.S. policy and shape domestic debate, and it pays former high-level government officials who worked with it – such as Epstein and his company – to carry out its agenda within the U.S.

What did Camstoll do for these millions of dollars? They spent enormous of amounts of time cajoling friendly reporters to plant anti-Qatar stories, and they largely succeeded. Their strategy was clear: target neocon/pro-Israel writers such as the Daily Beast‘s Eli Lake, Free Beacon‘s Alana Goodman, Iran-contra convict Elliott Abrams, The Washington Post‘s Jennifer Rubin, and American Enterprise Institute’s Michael Rubin – all eager to promote the Qatar-funds-terrorists line being pushed by Israel. They also targeted establishment media figures such as CNN’s Erin Burnett, Reuters’ Mark Hosenball, and The Washington Post‘s Joby Warrick.

In the latter half of 2013, Camstoll reported 15 separate contacts with Lake and 10 with Goodman in the month of December alone, all on behalf of UAE’s agenda. They also spoke multiple times with Warrick. At the same time, they were speaking on behalf of their Emirates client with their former colleagues who were still working as high-level Treasury officials, including Kate Bauer,the Treasury Department’s Emirates-based Financial Attaché, and Deputy Assistant Secretary Danny McGlynn.



In the first half of 2014, as the Emirates attack on Qatar intensified, Camstoll spoke multiple times with Lake, Hosenball, and Erin Burnett’s CNN show “Out Front,” and had conversations with Goodman and the NYT‘s David Kirkpatrick. They continued to meet with high-level Treasury officials as well, includingAssistant Secretary for Terrorist Financing Daniel Glaser (highlights added):
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This work paid dividends for the UAE. In June, when the Obama administration announced a plan to release Guantanamo detainees to Qatar, Lake published a widely cited Daily Beast article depicting Qatar as friends of the terrorists; it quoted anonymous officials as claiming that “many wealthy individuals in Qatar are raising money for jihadists in Syria every day” and “we also know that we have sent detainees to them before, and their security services have magically lost track of them.” Lake himself pronounced that “Qatar’s track record is troubling” and that “the emirate is a good place to raise money for terrorist organizations.”

He then went on Fox News and said that “there still is a major issue with just terrorist financing in Qatar” and that in Doha there are “individuals who are roaming free who have raised a lot of money for al Qaeda, Hamas and other groups like that.”



Meanwhile, CNN sent Burnett to Doha where she broadcast a “special report” entitled: “Is Qatar a haven for terror funding”? CNN touted it as “an in-depth look into the people funding Al Qaeda and Al Qaeda-linked groups, including ISIS.” She began her report by noting that “the terror group ISIS is committing atrocities in Iraq. The Iraqi prime minister Nouri al-Maliki blames Saudi Arabia and Qatar for providing ISIS militants with money and weapons.” She then put on a source, former Bush deputy national security adviser and Treasury official Juan Zarate, to say that “Qatar is at the center of this. Qatar has now taken its place in the lead of countries that are supporting al Qaeda and al Qaeda-related groups.”



On camera, Burnett asked her source: “So how high up in the government in Qatar does the support for Islamic extremism for these al Qaeda-linked groups go?” The answer: “Well, these are decisions made at the top. So Qatar operates as a monarchy. Its officials, its activities follow the orders of the government. And to the extent that there’s a policy of supporting extremists in the region, that’s a policy that comes from the top.” She then brought on the GOP Chairman of the House Homeland Security Committee, Michael McCaul, and asked whether he agrees that “money out of Qatar could end up being used to fuel the ambition, the dream, of attacks against the United States directly,” and he quickly said he did.

Camstoll’s work with the Post‘s Warrick also proved quite productive. Camstoll spoke with Warrick on December 17, 2013. The very next day, the Postreporter published an article stating that “private Qatar-based charities have taken a more prominent role in recent weeks in raising cash and supplies for Islamist extremists in Syria, according to current and former U.S. and Middle Eastern officials.”

Camstoll representatives spoke again with Warrick on December 20 and December 21. The day after, he published another more accusatory article citing “increasing U.S. concern about the role of Qatari individuals and charities in supporting extreme elements within Syria’s rebel alliance” and linking the Qatari royal family to a professor and U.S. foreign policy critic alleged by the U.S. government to be ”working secretly as a financier for al-Qaeda.”



As one of his sources, Warrick in the first of his articles cited “a former U.S. official who specialized in tracking Gulf-based jihadist movements and who spoke on the condition of anonymity because much of his work for the government was classified.” That perfectly describes several Camstoll Group members, though Warrick did not respond to questions from The Interceptabout whether this anonymous source was indeed a paid agent of the UAE working at Camstoll.

Also on Camstoll’s list of journalistic contacts was Kirkpatrick, who producedthe article in the NYT two weeks ago headlined “Qatar’s Support of Islamists Alienates Allies Near and Far.” It noted that Qatar “has tacitly consented to open fund-raising” for Al Qaeda affiliates.

But unlike all the other reports helpfully produced by Camstoll’s journalistic allies, Kirkpatrick expressly described, and cast skeptical light on, the concerted campaign to focus on Qatar, not only mentioning Camstoll’s behind-the-scenes work but also reporting that “Qatar is finding itself under withering attack by an unlikely alignment of interests, including Saudi Arabia, the United Arab Emirates, Egypt and Israel, which have all sought to portray it as a godfather to terrorists everywhere.” Kirkpatrick also noted that “some in Washington have accused it of directly supporting the Islamic State in Iraq and Syria,” a claim he called “implausible and unsubstantiated.”

In response to questions from The Intercept about Camstoll’s role in his reporting, Lake refused to answer any questions, stating: “I don’t talk about how I do my reporting. I meet with many representatives and officials of foreign governments in the course of my job.” (So many journalists pride themselves on demanding transparency and accountability from others while adopting a posture of absolute secrecy for their own work that would make even a Pentagon spokesperson blush: “I don’t talk about how I do my reporting”). Goodman similarly said: “as I’m sure you understand, I can’t discuss my private conversations with contacts.” Camstoll’s contacts with Goodman and Hosenball appear to have produced no identifiable reports. Camstoll, Warwick, and Hosenball all provided no response to questions from The Intercept.

The point here is not that Qatar is innocent of supporting extremists. Nor is it a reflection on any inappropriate conduct by the journalists, who are taking information from wherever they can get it (although one would certainly hope that, as Kirkpatrick did, they would make clear what the agenda and paid campaign behind this narrative is).

The point is that this coordinated media attack on Qatar – using highly paid former U.S. officials and their media allies – is simply a weapon used by the Emirates, Israel, the Saudis and others to advance their agendas. Kirkpatrick explained: ”propelling the barrage of accusations against Qatar is a regional contest for power in which competing Persian Gulf monarchies have backed opposing proxies in contested places like Gaza, Libya and especially Egypt.” As political science professor As’ad AbuKhalil wrote this week about conflicts in Syria and beyond, “the two Wahhabi regimes [Saudi Arabia and Qatar] are fighting over many issues but they both wish to speak on behalf of political Islam.”

What’s misleading isn’t the claim that Qatar funds extremists but that they do so more than other U.S. allies in the region (a narrative implanted at exactly the time Qatar has become a key target of Israel and the Emirates). Indeed, some of Qatar’s accusers here do the same to at least the same extent, and in the case of the Saudis, far more so. As Kirkpatrick noted: “Qatar is hardly the only gulf monarchy to allow open fund-raising by sheikhs that the United States government has linked to Al Qaeda’s Syrian franchise, the Nusra Front: Sheikh Ajmi and most of the others are based in Kuwait and readily tap donors in Saudi Arabia, sometimes even making their pitches on Saudi- and Kuwaiti-owned television networks.”

One U.S. government cable from 2009, also published by WikiLeaks, identified Saudi Arabia, not Qatar, as the greatest danger in this regard:

Donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide.
The writer of that cable complained that “it has been an ongoing challenge to persuade Saudi officials to treat terrorist financing emanating from Saudi Arabia as a strategic priority.”

Prior to his appointment as a Treasury official – and before he began working as a paid agent of the UAE to finger Qatar as the key threat – Camstoll’s founder and CEO, Epstein, himself fingered Saudis as the key financiers of Al Qaeda and anti-American terrorism. His 2003 Senate testimony included this statement: “the Saudi Wahhabists have bankrolled a series of Islamic institutions in the United States that actively seek to undermine U.S. counterterrorism policy at home and abroad”; he added: “in the United States, the Saudi Wahhabis regularly subsidize the organizations and individuals adhering to the militant ideology espoused by the Muslim Brotherhood and its murderous offshoots Hamas, Palestinian Islamic Jihad and al-Qaeda, all three of which are designated terrorist.”

While the 2009 cable claimed claimed that ”Qatar’s overall level of CT cooperation with the U.S. is considered the worst in the region,” it said this was “out of concern for appearing to be aligned with the U.S. and provoking reprisals.” But the cable also identified other U.S. allies in the region as key conduits for terrorist financing, stating, for instance, that “Al-Qa’ida and other groups continue to exploit Kuwait both as a source of funds and as a key transit point.” It also heavily implicated the Emirates themselves: ”UAE-based donors have provided financial support to a variety of terrorist groups, including al-Qa’ida, the Taliban, LeT and other terrorist groups, including Hamas.”

One of the most critical points illustrated by all of this tawdry influence-peddling is the alignment driving so much of US policy in that region. The key principals of Camstoll have hard-core neoconservative backgrounds. Here they are working hand in hand with neocon journalists to publicly trash a new enemy of Israel, in service of the agenda of Gulf dictators. This is the bizarre neocon/Israel/Gulf-dictator coalition now driving not only U.S. policy but, increasingly, U.S. discourse as well.