Friday, December 5, 2014

“Dis-Accumulation” on a World Scale: Pillage, Plunder and Wealth

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Over the past 30 years, wealth has grown exponentially and has become increasingly concentrated foremost in the upper .01%, then the .1%, followed by the 1% and the upper 10% – 20%.

The large scale, long-term concentration of wealth has continued through booms and busts of the real economy, the financial and IT crises.  Wealth grew despite long-term economic recessions and stagnation, because the so-called recovery programs imposed austerity on  80% of the households while transferring public revenues to the rich.

The so-called ‘crises of capitalism’ has neither reversed nor prevented the emergence of an international class of billionaires who acquire, merge and invest in each other’s activities. The growth of wealth has been accompanied by the pillage of accumulated profits from productive sectors which are stored as wealth not investment capital.

The dispossession of capital and its conversion to private wealth subsequently led to the rapid expansion of the financial and real estate sector.  Capital accumulation of profits has been the source of private accumulation of wealth at the expense of wages, salaries, public welfare, and state revenues.

The growth of private wealth at the expense of productive investments is a world-wide phenomenon which has been facilitated by an international network of banks, political leaders and ‘regulators’ centered in the United States and England.

The single most important aspect of private wealth accumulation on a world-scale is criminal behavior by the elites in multiple locations and involves the violation of multiple laws and regulations.

The Chain of Illegality:  From Exploitation of Labor to the Pillage of the Nation

The original source of private wealth is the exploitation of labor by capital,of which a small percentage of the profits are reinvested in expanding production in the ‘home market’ or overseas.  The bulk of the profits are transferred into financial networks which in turn illicitly channel the funds into overseas accounts.

The movements of profits ‘overseas’ takes multiple forms (transfer pricing, phony invoices, etc.) and  they are primarily converted to private wealth.  These ‘international movements’ of profits are largely composed of mega-thievery or plunder by political and business leaders from ‘developing countries’. According to the Financial Times (17/11/14, p2).  “Up to $1 trillion (dollars) is being taken out of developing countries every year through a web of corrupt activities involving anonymous shell companies that typically hide the identity of their true owners”. (my emphasis)

The $1 trillion of stolen profits and revenues from the ‘developing countries’ (Africa, Asia, South America) are part of a “corruption chain” which is organized, managed and facilitated by the major financial institutions in the US and UK.  According to a World Bank report in 2011 “70 percent of the biggest corruption cases between 1980 and 2010 involved anonymous shell companies.  The US and UK were among the jurisdictions most frequently used to incorporate legal entities that held proceeds of corruption” (Financial Times, 17/11/14, p2.).

This process of “taking out” or pillage of developing countries feeds into rent seeking, conspicuous consumption and other non-productive activity in the ‘developed countries’ or more accurately the imperialist states.  The principle beneficiaries of the pillage of ‘developing countries’ by the local elites are their counterparts in the top 1% of the imperial countries, who control, direct and manage the financial, real estate and luxury sectors of their economies.

The very same financial institutions in the imperial countries (and their related accountancy, legal and consultancy arms) facilitate the pillage of trillions from the ‘developed’ countries to offshore sites, via massive tax evasion operations, hoarding wealth instead of investing profits or paying taxes to the public treasury.

Long-term, large scale pillage and tax evasion depends on the central role, at both ends of the world economy, of the financial sector. This results in the ‘imbalance of the economy’ – predominance of finance capital as the final arbiter on how ‘profits’ are disposed.

The extremely narrow membership in the dominant financial sectors means that its growth will result in greater inequalities between classes.  A disproportionate share of wealth will accrue to those whopillage the revenues and profits of the productive sector.  As a result so-called ‘productive capitalists’ hasten to join and lay claims to membership in the financial sector.

The links between ‘productive’ and ‘fictitious’ capital or financial swindle capital, defy any attempt to find a progressive sector within the dominant classes.  But the effort to enter the charmed circle of the dominant financial 1% is fraught with dangers and risks . . . because the financial sector has a very dynamic and super-active capacity for swindles.

The entire process of de-capitalizing the economy is underwritten in the US by the financial elite’s controls over the executive branch of government, especially the ‘regulatory’and enforcement agencies -Security Exchange Commission, the Treasury and Justice Departments.

Financial institutions facilitate the inflow of trillions of dollars from the kleptocrats in the developing countries as well as the outflow of trillions of dollars by multi-nationals to off-shore tax havens.  In both instances the banks are key instruments in the process of dis-accumulation of capital by dispossessing nations and treasuries of revenues and productive investments.

The ‘hoarding’ of MNC profits in offshore shell companies does not in any way prevent speculative activity and large scale swindles in the for-ex, equity and real estate markets.  On the contrary, the boom in high-end real estate in London, New York and Paris, and the high growth of luxury goods sales, reflects the concentration of wealth in the top .01%, .1% and 1%.  They are the beneficiaries of ‘no risk’pillage of wealth in developing countries, receiving lucrative commissions and fees in laundering the illicit inflows of wealth and outflows by tax dodging multi-nationals.

The Inverted Pyramid of Wealth

A small army of accountants, political fixers, corporate lawyers, publicists, financial scribblers, consultants and real estate promoters make-up the next 15% of the beneficiaries of the pillage economies.  Below them are the 30% upper and lower middle classes who experience tenuous affluence subject to the economic shocks, ‘market volatility and risks of downward mobility.  Below them, the majority of wage, salaried and small business classes experience declining incomes, downward mobility, rising risks of mortgage foreclosure,  job-loss and destitution among the bottom 30%.

Despite wide variations in the class structure between ‘developing’ neo-colonial and developed imperial states, the top 1% across national boundaries has forged economic, personal, educational, and social ties.  They attend the same elite schools, own multiple private residences in similar high end neighborhoods, and share private bankers, money launderers and financial advisors.  Each elite group has their own national police and military security systems, as well as political influentials who also co-operate and collaborate to ensure  impunity and to  defend the illegal financial flows for a cut of the wealth….

The investigatory authorities of each developed country tend to specialize in prosecuting rival financial institutions and banks, occasionally levying fines – never imprisonment – for the most egregious swindles that threatens the ‘confidence’ of the defrauded investors.

Yet the basic structure of the pillage economy, continues unaffected – in fact thrives – because the ‘show’ of ‘oversight’ and judicial ‘charges’ neutralizes public indignation and outrage.

The Decisive Role of Dis-Accumulation in the World Economy

While orthodox economists elaborate mathematical models that have no relationship to the operations, agencies and performance of the economy and ignore the real elite actors which operate the economy, Leftist economists similarly operate with theoretical premises about capital and labor, profits and capital accumulation, crises and stagnation, which ignore the centrality of pillage, dis-accumulation, and the dynamic growth of wealth by the international 1%.

The research center, the Capital Financial Integrity Group provides a vast array of data documenting the trillion dollar illicit financial flows which now dominate the world economy.

US MNCs have ‘hoarded’ over $1.5 trillion dollars in overseas shell companies, ‘dead capital’, to avoid taxes and to speculate in stocks, bonds and real estate.

Mexico’s ruling elite organizes massive illicit financial flows, mostly laundered by US banks, ranging from $91 billion in 2007 to $68.5 billion in 2010. The massive increase in illicit financial flows is greatly facilitated by the de-regulation of the economy resulting from the North American Free Trade Agreement (NAFTA).  Contrary to most leftist critics the main beneficiaries of NAFTA are not Canadian mine owners or US agro-business or auto manufacturers- it is the US and Canadian financial and real estate money launderers.

From 1960 to 2010 the Brazilian 1% pillaged over $400 billion dollars.  These illicit financial flows are laundered in New York, Miami, London, Switzerland and Montevideo. In recent years the rate of pillage has accelerate:  between 2000 -2012 illicit financial flows averaged $14.7 billion a year.  And under the self-styled ‘Worker’s Party” (PT) regime of Lula DaSilva and Dilma Rousseff, $33.7 billion in illicit outflows were laundered annually – 1.5% of the GDP.  Much of the pillage is carried out by private and public “entrepreneurs” in the so-called “dynamic” economic sectors of agro-minerals, energy and manufacturing via ‘trade mispricing’, import overpricing and export underpricing invoices.

According to a study published in the Wall Street Journal, (10/15/12), China’s elite’s illicit financial flows top $225 billion a year – 3% of national economic output.  China’s 1%, the business-political elite, finance their children’s overseas private education, providing them with half million dollar condos.  Illicit flows allow Chinese ‘investors’ to dominate the luxury real estate markets in Toronto, Vancouver, New York and London.  They hoard funds in overseas shell companies.  The Chinese corporate kleptocrats are the leaders in the drive to deregulate China’s financial markets – to legalize the outflows.

The scale and scope of China’s elite pillage has provoked popular outrage that threatens the entire capitalist structure – provoking a major anti-corruption campaign spearheaded by China’s President Xi Jinping.  Thousands of millionaire officials and business people have been jailed, causing a sharp decline in the sales of the world’s luxury manufacturers.

India’s capitalists- as kleptocrats – have long played a major role in de-capitalizing the economy.  According to the Financial Times (11/24/14, p3) the Indian elite’s illicit financial flows totaled $343 billion dollars from 2002 to 2011.  The Indian Finance Ministry immediately threw up a smoke screen on behalf of the 1%, claiming the Indian elite had only $1.46 billion in Swiss accounts.  Most of India’s wealthy have taken up with holing their illicit wealth to  Dubai, Singapore, the Cayman and Virgin Islands as well as London

India’s neo-liberal policies eased the illegal outflows.  Massive corruption accompanied the privatization of public firms and the allocation of multi-billion dollar assets such as mobile phones, coal fields and energy.

Indonesia, - percentage-wise is the leader in the outflow of illicit flows – fully 23% of annual output.  The 1% elite of foreign and domestic capitalists, plunders natural resources, timber, metals, agriculture and dis-accumulates.  Profits flow to foreign accounts in Tokyo, Hong Kong, Singapore, Sydney, Los Angeles, London and Amsterdam.

Ethiopia, with per-capita income of $365 dollars, is the site of vast pillage by its ruling elite.  From 2000 to 2009, over $11.7 billion dollars in illicit financial flow was laundered mostly by US banks.  These outflows enriched the Ethiopian and the US 1% and provoked famine for Ethiopia’s 90%.

Conclusion

The illicit financial flows surpass the capital invested in productive activity.  The process of dis-accumulation of capital through relocation is channeled to overseas shell corporations and private bank accounts and beyond into financial holdings and real estate.  The accumulation of private wealth exceeds the sums invested in productive activity generating investments and wages.  Massive perpetual tax evasion means higher regressive taxes on consumers (VAT) and wage and salaried workers, reductions in social services, and austerity budgets targeting food, family and fuel subsidies

The past thirty years of deregulated capitalism and financial liberalization, is a product of the financial takeover of state regulatory agencies.  The signing of free trade agreements has provided the framework for large scale long-term illicit financial flows.

While illicit financial flows have financed some productive activities, the bulk has vastly expanded the financial sector.  The absorption of illicit flows by the financial elite has led to greater inequalities of wealth between the 1% – 10% and the rest of the labor force.

Illicit earnings via mega swindles among the largest and most respected US and EU banks, has curtailed the amount of capital which is available for production, profits, wages and taxes.  The circuits of illicit capital flows militate against any form of long-term economic development – outside of the wealth absorbing elites which control both the financial and political centers of decision-making.

The growth and ascendancy of financial elites which pillage public treasuries, resources and productive activity, is the result of an eminently political process.  The origins of de-regulation, free trade and the promotion of illicit flows are all made possible by state authorities.

First and foremost, finance capital conquered state power – with the cooperation of “productive capital”.  The peaceful transition reflected the interlocking directorates between banks and industry, aided and abetted by public officials rotating between government and investment houses.

The entire African continent was pillaged by billionaire rulers, many former nationalist politicians (South Africa), ex-guerilla and ‘liberation leaders’ (Angola, Mozambique, Guinea Bissau), in collaboration with US, EU, Chinese, Russian and Israeli oligarchs.  Trillions of dollars were laundered by bankers in London, New York, Zurich, Tel Aviv and Paris.  Growth of the commodity sector bolstered Africa’s decade long expanding GDP – and the mega-outflows of illicit earnings.

World-wide, billionaires multiplied profits ‘received’, but wages, salaries, pensions and health coverage declined!  Swindles multiplied as outflows accelerated in both directions.  The higher the growth in China, India, Indonesia and South Korea the bigger and more pervasive the corruption and outflows of wealth-led by “Communist” neo-liberals in China, Indian “free marketers” and Russian “economic reformers”.

The World Bank’s and IMF’s proposed “economic reforms”  ‘freed’ the incipient political kleptocrats of controls and unleashed two-sided illicit financial flows – laundering funds from abroad and establishing trillion dollar offshore tax dodging citadels.

Illicit swindles dwarfed earnings from ‘capital accumulation’.  The relations between capital and labor were framed by the organization and policies dictated by the directors and operators of the trillion-dollar financial networks based on the pillage of treasuries and the wealth of nations.

The center of China’s growth is shifting from manufacturing and the exploitation of labor, to real estate and “financial services”, as worker’s demand and secure double-digit increases in wages. The exploiters of labor turned predators of the national treasury.  Under the pretext of “stimulating” the construction sector, real estate speculators in tow with Communist Party officials, absconded with over a trillion dollars from 2009 to 2014.  According to Jonathan Anderson of the Emerging Advisors Group “over a trillion dollars” has gone missing in China in the past five years (Financial Times, 28/11/14, p 1.).

Factories still produce, agro-business still exports, the paper value of high tech companies has risen into the high billions, but the ruling 1% of the system stands or falls with the illicit financial flows drawn from the pillage of treasuries.  To replenish pillaged treasuries, regimes insist on perpetual ‘austerity’ for the 90%:  greater pillage for the 1%, less public revenues for health care which results in more epidemics.  Less funds for pensions means later retirement– work til you die.

The plunder of the economy is accompanied by unending wars – because war contracts are a major source of illicit financial flows. Plunder oligarchs share with militarists a deep and abiding belief in pillage of countries and destruction of productive resources.  The one reinforces the other in an eternal embrace – defied only by insurgents who embrace a moral economy and who proclaim the need for a total change – a new civilization.

US Resorts to Illegality to Protect Failed Policies

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In a blatant and massive market intervention, the price of gold was smashed on Friday. Right after the Comex opened on Friday morning 7,008 paper gold contracts representing 20 tonnes of gold were dumped in the New York Comex futures market at 8:50 a.m. EST. At 12:35 a.m. EST 10,324 contracts representing 30 tonnes of gold were dropped on the Comex futures market:

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No relevant news or events occurred that would have triggered this sudden sell-off in gold. Furthermore, none of the other markets experienced any unusual movement (stocks, bonds, currencies).

The intervention in the gold market occurred on the Friday after the U.S. had observed its Thanksgiving Day holiday. It is one of the lowest volume trading days of the year on the Comex.

A rational person who wants to short gold because he believes the price will fall wants to obtain the highest price for the contracts he sells in order to maximize his profits when he settles the contracts. If his sale of contracts drives down the price of gold, he reduces the spread between the amount he receives for his contracts and the price at settlement, thus minimizing his profits, or if the price goes against him maximizing his losses. A bona fide seller speculating on the direction of the gold price would choose a more liquid market period and dribble out his contract sales so as not to cause a significant impact on the price.

As you can see from the price-action on the graph, massive sales concentrated within a few minutes minimize sales proceeds and are at odds with profit maximization. A rational seller would not behave in this way. What we are witnessing in the bullion futures market are short sales designed to drive down the price of bullion. This is price manipulation.

Here is the Security and Exchange Commission’s definition of manipulation:
Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security…[this includes] rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. Those who engage in manipulation are subject to various civil and criminal sanctions.

Why is manipulation of the price of gold in the futures market not investigated and prosecuted?
The manipulation has been blatant and repetitious since 2011.

The answer to the question is that suppressing the price of gold helps to protect the U.S. dollar’s value from the excessive debt and money creation of the past six years. The attacks on gold also enable the bullion banks to purchase large blocks of shares in the GLD gold trust that can be redeemed in gold with which to supply Asian purchasers. Whether or not the Federal Reserve and the U.S. Treasury are instigators of the price manipulation, government authorities tolerate it as it supports the dollar’s value in the face of an enormous creation of new dollars and new federal debt.

In other words, the illegal rigging of the price of gold in the futures market is deemed by the US government to be essential to the success of its economic policy, just as illegal torture, illegal military invasions and attacks on sovereign countries, unconstitutional violation of habeas corpus, unconstitutional spying on U.S. citizens, and illegal and unconstitutional murder of U.S. citizens by the executive branch are essential to the U.S. government’s “war on terror.”

The U.S. government resorts to massive illegality across the board in order to protect its failed policies. The rule of law and accountable government have been sacrificed to failed policies.

Oil Price Slide Rocks World Economy

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Shock waves from last Thursday’s decision by the Saudi-led oil cartel, OPEC, not to cut production in the face of an oversupply on world markets have reverberated throughout the global economy, hitting energy and mining companies as well as financial markets, and threatening whole economies with bankruptcy.

The most immediate impact of the decision was seen in Russia on Monday, where the ruble hit a record low against the US dollar since the ruble’s redenomination in 1998. That followed the Russian default, which occurred in the aftermath of the Asian financial crisis of 1997–98.

The Russian economy, which relies on oil for 60 percent of its export income and 50 percent of its budget revenues, has been hammered by the 40 percent slide in the price of oil since June. The impact of the decline in oil revenues has been exacerbated by the sanctions imposed by the US and the European Union, which have considerably restricted Russian access to global financial markets and led to the drying up of investment inflows.


Oil has now slumped in price from around $100 per barrel just five months ago to below $70, and is expected to fall further. On Monday, the deputy chairwoman of the Russian central bank, Ksenia Yudaeva, said the bank had been working on the assumption that the oil price could go to $60. But no one knows if the slide will stop there.


Among the other countries most immediately impacted are Venezuela, Iran and Nigeria, all of which are heavily dependent on oil revenues to fund government programs.

In another expression of the global consequences of the OPEC decision, more than $30 billion was wiped off of the Australian share market yesterday, as mining and energy stocks tumbled. The giant global mining company BHP Billiton recorded its lowest share price in five years.

While the trigger for the decline was provided by the Saudi decision, the plunge in the price of oil is indicative of deeper processes. The year 2014 has marked the exhaustion of the various stimulus measures—above all, the program of “quantitative easing” pursued by the US Fed and other major central banks—which have sent asset prices to record highs.


The tendency in the underlying real economy has been continuing economic stagnation and the emergence of outright recession. The movement of the financial markets as compared to the real economy is, to use an analogy once employed by Leon Trotsky, like the opening of the blades of a giant pair of scissors.

Some six years after the eruption of the global financial crisis in 2008, the euro zone economy has not even reached the level of economic output achieved in 2007, with investment levels down by as much as 25 percent, while the inflation rate continues to fall.


The Japanese economy, despite the massive financial stimulus provided by so-called Abenomics, has entered another recession, its fourth in the past six years, as concerns grow over the capacity of the government to repay the public debt, now estimated to be more than 250 percent of gross domestic product. On Monday, the rating agency Moody’s downgraded its credit rating for the country, the world’s third largest single economy, putting it below China and South Korea and on a par with Bermuda, Oman and Estonia.


Over the past six years, the global economy has been sustained to a significant extent by continuing Chinese growth, largely the result of the stimulus package initiated by the Chinese government and the massive expansion of credit, estimated to be equivalent in size to the entire American banking system. But throughout this year it has become increasingly apparent that the Chinese economy is in the grip of a deflationary vortex. So-called “producer prices,” which record the value of commodities as they leave the factory gate, have been falling for the past three years. Property prices have fallen significantly, ending the real estate boom.

This week, a report by official government researchers put a figure on wasteful spending. It said some $6.8 trillion had been laid out since 2009 on “ineffective investment,” including needless steel mills, ghost cites and empty stadiums, as well as other government efforts to insulate China from the impact of the global financial crisis.


While American financial markets appear thus far to have been only marginally affected by the OPEC decision, the falling oil price will have major long-term consequences. One of the motivating factors for the Saudi decision appears to have been its determination to squeeze relatively high-cost US shale oil producers out of the market by driving prices lower. This is a replication of the strategy in the iron ore market, which has experienced a price fall similar to that of oil this year. Major producers, in particular BHP Billiton and Rio, have responded by increasing, rather than cutting, production in an effort to send their higher-cost rivals to the wall.

A continued slide in the oil price will have major consequences for junk bond and leveraged loan markets in the US. With oil prices reaching around $100 per barrel in 2011, shale oil production became profitable, even at extraction costs of between $60 and $70 per barrel. As recently as the start of the year, it was expected that oil prices would remain at $100 per barrel and shale oil was increasingly held up as providing a new vista for American economic expansion.


Over the past five years, using ultra-cheap money provided by the Fed, banks and financial speculators poured money into companies involved in shale oil extraction, with the result that energy debt now accounts for 16 percent of the $1.3 trillion US junk bond market, compared to 4 percent a decade ago.

Unlike more traditional methods of oil production, where physical capital has a relatively long life, shale oil extraction requires the continuous acquisition of new capital equipment. This means the industry is highly dependent on the flow of funds from financial markets. If this begins to dry up, companies could go bankrupt, with major flow-on consequences for the financial system as a whole.

As the case of Russia so clearly demonstrates, the underlying recessionary tendencies have been exacerbated by the increase in geo-political tensions.

Now a negative feedback process could be set in motion as the deepening global slump heightens conflicts among the major powers. Korea and other countries in the Southeast Asian region, together with China, have already been adversely affected by Abenomics, which has led to a fall in the value of the yen, hitting their export markets.


This year has also seen the emergence of tensions between the US and Germany, with the political and foreign policy establishment emphasising the need for Germany to play a greater and more independent role on the global stage in the pursuit of its own interests. With the euro zone economy on the verge of another recession, not least because of a significant weakening of the Germany economy, and the prospect of further financial turbulence, those tensions are certain to deepen.


The oil price slide is another expression of the underlying driving forces of the world capitalist system—towards economic contraction, the rise of inter-imperialist conflicts and, ultimately, war.

UN Damns Washington As World’s Worst Violator Of Human Rights

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The United Nations Committee Against Torture issued a lengthy report today assessing the performance of the 156 countries whose governments have ratified the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, which took effect two decades ago.

The report subjected a major country to a wide-ranging critique, indicting it for a long list of human rights violations including:

  • Refusal to prosecute officials who engage in or sanction torture of prisoners
  • Detaining prisoners indefinitely without trial or other judicial proceeding, or any hope of release
  • Kidnapping individuals overseas and torturing them in secret prisons
  • Approving a manual for interrogation of prisoners that includes methods classified as torture under the Geneva Conventions
  • Imprisoning immigrants under degrading conditions and refusing to acknowledge their claims as refugees fleeing persecution
  • Imposing the death penalty on hundreds of prisoners, many of them from oppressed racial and ethnic minorities, many of them demonstrably innocent or unfairly tried
  • Widespread use of solitary confinement, considered a form of torture, at all levels of the prison system
  • Severe abuse of juveniles, pregnant women and other vulnerable groups both in police custody and in prisons
  • Maintaining a regime of police violence, particularly against young men from racial and ethnic minorities, and refusing to restrain or punish police who kill, wound or torture
It will not come as any surprise to readers of the WSWS that the country named is not China, or Russia, or Iran, or some other target of the American ruling class, but the US itself. The government that claims the right to bully, blockade, and attack any country in the world in the name of “human rights” and “democracy” is guilty of the most heinous crimes.

The language of the report is both cautious and bureaucratic, and there are strained efforts to congratulate the Obama administration on alleged improvements, compared to the Bush administration, on such practices as extraordinary rendition and waterboarding. But the overall impact of this indictment is damning.

There are some significant revelations. The committee notes that the US government had filed reservations to the Convention on Torture at the time of ratification, indicating that some practices condemned by the treaty would continue, and that the Obama administration has refused to alter this “restrictive interpretation” of the anti-torture treaty or introduce a prohibition of torture into federal law.

The Obama administration has revoked Bush administration legal opinions declaring that waterboarding and other forms of torture were permissible, but it has not done the same to Bush-era claims that the US is obliged to observe international norms only at facilities within US borders, not at detention facilities on the soil of other countries. In other words, the legal basis for torture at secret CIA and military prisons still remains fully in effect.
The report also notes that the US government is in violation of its commitment under the Convention on Torture to “Ensure that alleged perpetrators and accomplices are duly prosecuted, including persons in positions of command and those who provided legal cover to torture, and, if found guilty, handed down penalties commensurate with the grave nature of their acts.” Obama directly repudiated this legal obligation, in his directive to “look forward, not backward” on allegations of torture.
While this remains a closed book to the American political establishment, the report underscores the seamless connection between military violence overseas and militarized police violence at home—though its criticisms are couched largely in racial terms. It condemns “racial profiling by police and immigration offices and growing militarisation of policing activities.” A spokesman said the committee members “voiced deep concern at the frequent and recurring police shootings in fatal pursuit of unarmed black individuals.”

The document is the product of a three-week session in Geneva that included testimony from the parents of Michael Brown, the unarmed 18-year-old African-American who was shot to death by Ferguson, Missouri police officer Darren Wilson on August 9. The report was made public four days after a St. Louis County grand jury whitewashed the killing and dismissed all charges against the killer cop.

The timing of the report is also significant, coming at the culmination of the protracted effort by the White House and CIA to suppress a major US Senate report on torture at CIA secret prisons between 2002 and 2006. The 6,000-page report was completed two years ago, but release of even a censored version of its 500-page executive summary has been blocked by CIA demands that so much of the document be redacted that it is almost incomprehensible.

Two days before the report was made public, seven UN human rights experts issued an open letter to Obama that, while couched in friendly, even obsequious language, called for “the fullest possible release” of the CIA torture report and warned that Obama’s decision on the document would have “far-reaching consequences for victims of human rights violations everywhere and for the credibility of the United States.”

The White House, however, has worked closely with the CIA in suppressing the document. Or more exactly, the CIA made its demands, and the White House has followed suit obediently. After initially agreeing with Senate investigators to use pseudonyms to mask the names of CIA operatives, including the torturers, the agency is now demanding that even the pseudonyms should be blacked out of the document. Foreign Policy magazine reported last week that the White House was “fiercely resisting the release of an executive summary of a 6,300-page Senate report on the CIA’s detention and interrogation program.” One Senate aide told the magazine, “Ideally, we should be closing ground and finalizing the last stages right now so that we can release the report post-Thanksgiving. But, despite the fact that the committee has drastically reduced the number of pseudonyms in the report, the White House is still resisting and dragging this out.”

An additional factor is the impending takeover of the Senate by the Republican Party in January. Senator Richard Burr of North Carolina, who would become chairman of the Intelligence Committee once the Republicans take control, is on record as opposing any public release of any information on CIA activities, regardless of their criminal nature. If the wrangling over release of the report is prolonged another month, the new Republican majority may well vote to withdraw the report entirely, saving the Democrats from having to do the job themselves.

The Senate report is hardly a real indictment of the CIA. Lawyers for the Guantanamo Bay prisoners who were waterboarded dozens of times say that Senate investigators never took testimony from them. In other words, the only account of the torture comes those who participated in the torture, or sanctioned it, not from those who were its victims. It also reportedly does not level any accusations against the top executive, military and intelligence officials who drew up and sanctioned the criminal policy.
That even such a document, with thousands of lines blacked out and vital information withheld, cannot be made public, speaks volumes about the decay and collapse of American democracy. The US ruling elite is incapable of coming clean about the period when, as Obama admitted, “We tortured some folks.” That is because the entire state apparatus is preparing for the use of similar methods against a much-feared upheaval among workers and young people at home.