Bush's OSHA: No Laws? No Crimes

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By Elizabeth de la Vega

Ninety-seven years ago this month, just eight days after the March 25, 1911, Triangle Shirtwaist Factory fire , in which nearly 150 young men and women suffered horrific deaths, Rose Schneiderman rocked the Metropolitan Opera House.

She was not singing. But her voice, pellucid and sharp, carried the house:

"I would be a traitor to these poor burned bodies if I came here to talk good fellowship. We have tried you good people of the public and we have found you wanting."

Who was Rose Schneiderman? She was, in the words of Frances Perkins (who later became Franklin D. Roosevelt’s labor secretary): "an unknown little girl." It was a realistic - not unkind - description of this factory worker, who earned a paltry $5.00 a week for grueling ten-hour days spent sewing linings into golf hats. To the indifferent eyes shaded by those natty caps, the Polish immigrant with a sixth-grade education was almost certainly invisible, or, at best, a curiosity to be observed on a Sunday afternoon East Side-slumming tour.

On Sunday, April 2, however, all eyes were riveted upon the 29-year-old labor organizer with "fiery red hair" who was commanding the Opera House stage.

The Triangle Shirtwaist Factory building, it had been said, was fireproof. And so it was: The structure survived unscathed. The people inside, however, did not. The owners had cut costs by packing seamstresses and chain-smoking fabric cutters into a cramped wood space, eschewing rudimentary procedures necessary to avoid the accumulation of flammable oily rags and littered fabric. Even worse, to avoid the theft of an odd scrap of lace or ribbon, they had locked all but one door to streamline the bosses’ daily inspection of pockets and handbags on the employees’ way out. So, when the inevitable conflagration began, the mostly teenaged workers - for some of whom the only identifiable remains were their engagement rings (14 in all) - had no way out. They were left to roast to death or hurtle themselves to the pavement.

Suddenly humanitarians after this tragedy, the same Gilded-Age revelers who had caroused through the East Side as if it were Disneyland were moved to donate to Red Cross victims’ funds.

Schneiderman was having none of it. It was much too late to offer "a couple of dollars for the sorrowing mothers, brothers and sisters by way of a charity gift." It was also, she reminded them:

"[n]ot the first time girls have been burned alive in the city. Every week I must learn of the untimely death of one of my sister workers. Every year thousands of us are maimed. The life of men and women is so cheap and property is so sacred."

Certainly, much has improved for factory workers since 1911. But, as workers at the Imperial Sugar Co. in Port Wentworth, Georgia, could attest, life is still cheap and property is still sacred. On February 8, 2008, 12 employees there were burned to death and dozens more critically injured because Republicans are committed to making sure no pesky regulations upset that perverse calculation - regardless of the human suffering it entails.

In the early 1900s, as a former New York City fire chief testified regarding factory conditions after the Triangle fire, there was "nobody responsible for anything." Now, of course, we have an office - the Occupational Safety and Health Agency (OSHA) - that is at least putatively responsible for workplace safety. Specifically, OSHA is legislatively mandated to (1) enact industrial standards for toxic substance exposure and site protection; and (2) conduct inspections to ensure those standards are followed.

Unfortunately, OSHA started becoming anemic during the 1990s, and now it is positively spectral. With fewer employees than it had 30 years ago, yet twice the number of workplaces in its charge, OSHA would need 133 years to inspect every business over which it has jurisdiction.

The far more serious problem with OSHA’s performance, however, is that, under the Bush administration, it has deliberately avoided setting any significant industrial standards. (To be precise, it has set one, regarding the permissible level of workplace exposure to the known carcinogen hexavalent chromium, but only after a court ordered it to do so.)

OSHA’s abdication of its duties is not a matter of incompetence. It is, as Rep. John Barrows (D-Georgia) pointed out in a March 12, 2008, Workforce Protections Subcommittee Hearing of the House, Education and Labor Committee, a purposeful unwillingness to act. Or, to put it more colorfully, as Barrows did:

"When you’ve got an agency that don’t know its job or don’t care about its job, or has all kinds of reasons for not doin’ its job, it’s a little bit like goin’ bird huntin’ and havin’ to tote the dog."

OSHA’s failure to enact mandatory standards has not only been fatal to its mission; it has been fatal to the workers.

The Imperial Sugar refinery disaster, for example, followed a long-known pattern of explosions involving finely powdered and, therefore, highly combustible materials, such as chemicals, flour, metals and, of course, sugar. As William Wright, interim executive of the US Chemical Safety Board (CSB), explained at the March 12 Workforce Protections Subcommittee hearing, witnesses familiar with the Port Wentworth facility described seeing snow-like piles of accumulated sugar dust on floor joists, pipes and equipment. When this highly combustible powder was dislodged by an as-yet-unknown event, it fueled the massive explosion and fire.

Like so many factory fires before it, the Imperial Sugar Co. catastrophe was both predictable and preventable. In 2006, the CSB, after identifying 281 combustible dust fires responsible for 119 deaths and numerous injuries, formally urged OSHA to immediately establish mandatory combustible dust hazard regulations.

This report was not a news flash to OSHA. The year before, OSHA itself had issued a bulletin entitled "Combustible Dust in Industry: Preventing and Mitigating the Effects of Fire and Explosions," which had detailed a gruesome history of catastrophic explosions resulting from combustible dust and suggested procedures for prevention of future similar disasters. OSHA emphasized, however, the procedures were not mandatory. Failure to follow them would not be a basis for any adverse action whatsoever:

"This Safety and Health Information Bulletin is not a standard or regulation, and it creates no new legal obligations. The Bulletin is advisory in nature, informational in content, and is intended to assist employers in providing a safe and healthful workplace."

After the CSB issued its report in 2006, did OSHA decide to put some teeth into its recommendations? No. It established a National Emphasis Program to further encourage voluntary employer action.

What about now, after yet another disaster caused by combustible dust? Well, according to Director Edwin Foulkes, OSHA is "saddened by the tragic loss of life that resulted from the Imperial Sugar explosion [and] will not rest until we ensure that all employees go home safely to their families and friends at the end of every work day." So concerned is Foulkes that he has, on behalf of OSHA, sent out a very large number of letters - 300,000 to be exact - reminding employers about dust hazards.

Foulkes has also promised to investigate the issue of mandatory combustible dust standards, but we should not expect those any time soon. Why? Because, as the Triangle Shirtwaist Factory owners discovered when they were acquitted of manslaughter charges after the fire, the best way to avoid criminal liability for even the most egregious workplace malfeasance is not to have any laws at all. Despite infuriating testimony about previous warnings and blocked egress, the jury was unable to find owners Isaac Harris and Max Blenck had violated or failed to comply with any legal requirements: There weren’t any.

It was a perfect void of government responsibility. And it is into this very same early-twentieth-century abyss the Bush administration has been dragging us for the past seven years. No regulations, ergo, no violations. No violations, ergo, no criminal culpability. Employers - unfettered by oversight or even laws - can live free and profit. Employees, on the other hand, can live free and die. Meanwhile, however, charitable donations continue to pour in for the families of the Imperial Sugar Co. victims who have been killed or maimed as the result of this unconscionable bargain.

A century has passed since Rose Schneiderman rebuked the citizens at the Metropolitan Opera House in the wake of the Triangle Shirtwaist Factory fire, but were she alive today, I have no doubt that we would again be found wanting.

Fed Officials Worried About Recession

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By Jeannine Aversa

Worries about a deep recession - not a shallow one - drove Federal Reserve policymakers to slash a key interest rate last month, meeting minutes show.

Even as the Fed battled in almost unprecedented fashion to stem a widening credit and housing slump, some members fretted over the possibility of a "prolonged and severe" economic downturn. It was in that environment that they voted - with two dissents - to cut its most important interest rate by three-quarters of a percentage point to 2.25 percent. That action capped the most aggressive Fed intervention in a quarter-century.

Some Fed policymakers thought that such a widening recession could not be ruled out given the "further restriction of credit availability and ongoing weakness in the housing market," according to the meeting minutes that were made public Tuesday.

Two Fed members - Charles Plosser, president of the Federal Reserve Bank of Philadelphia, and Richard Fisher, president of the Federal Reserve Bank of Dallas - opposed such a big rate reduction, however. They favored a smaller cut because of concerns about a potential inflation flare-up. It was a crack in the mostly unified front that the fed often has projected to the public.

The minutes of the closed-door March meeting underscored the economic cross-currents pulling at Fed policymakers.

"With the uncertainties in the outlook for both economic activity and inflation elevated, members noted that appropriately calibrating the stance of (interest-rate) policy was difficult," the minutes stated.

On the one hand, the Fed has been urgently moving to prevent the trio of economic woes - housing, credit and financial - from plunging the country into a deep recession. On the other hand, with soaring energy prices and high food costs, policymakers realize that they can't afford to let inflation get out of control, either.

Even with the big interest rate reduction in March, most Fed members saw overall inflation moderating in coming quarters, the minutes said. However, inflation pressures had picked up even as economic growth had weakened, the minutes added, suggesting that uncertainty clouded the inflation outlook.

Plosser and Fisher - the two who opposed the hefty three-quarter-point reduction in March - were "concerned that inflation expectations could potentially become unhinged," according to the minutes. If people, investors and businesses expect prices to rise sharply, they'll act in ways that will make inflation worse. Once inflation takes hold, it is hard to break."

Since last September, the Fed has been cutting rates to shore up the economy. One of the risks of lowering rates is that it can sow the seeds of inflation down the road. To battle inflation, the Fed usually boosts rates.

Against this backdrop, Bernanke, in a congressional appearance last week, didn't tip his hand about the Fed's next move on interest rates. Many economists, however, believe the Fed will lower rates again at its next regularly scheduled meeting on April 29-30, especially in light of the faltering employment market.

The government reported last week that the economy lost jobs for the third month in a row in March. All told, the nation has lost 232,000 jobs in just three months - stark evidence of just how much the employment market has buckled under the weight of the economy's woes.

For the first time, Bernanke last week acknowledged that a recession is possible.

According to the Fed minutes, many members thought "some contraction in economic activity in the first half of 2008 now appeared likely."

The Fed found itself fighting a vicious cycle, where credit problems hurt the economy's outlook which in turns worsens credit problems, the minutes suggested. There was "evidence that an adverse feedback loop was under way," the minutes said.

Besides cutting rates, the Fed has taken a number of unconventional steps recently to ease a dangerous credit crisis.

Under one new program, the Fed has been letting big investment firms borrow super-safe Treasury securities and put up more risky investments, including certain shunned mortgage-backed securities as collateral. The Fed said it would make as much as $200 billion worth of Treasuries available through weekly auctions.

The goal is to make investment houses more inclined to lend to each other. It also is aimed at providing relief to the distressed market for mortgage-linked securities. Questions about their value and dumping of these securities have driven up mortgage rates, aggravating the housing crisis.

Fed policymakers thought the program "could prove useful in preventing an escalation of an unhealthy dynamic" that has gripped credit markets, according to the minutes of a March 10 conference call that led to the creation of the new program.

Separately, in the broadest use of its lending authority since the 1930s, the Fed last month agreed to temporarily let investment firms obtain emergency financing from the Fed, a privilege that previously had been granted only to commercial banks.

Beyond the New Deal

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By Howard Zinn

We might wonder why no Democratic Party contender for the presidency has invoked the memory of the New Deal and its unprecedented series of laws aimed at helping people in need. The New Deal was tentative, cautious, bold enough to shake the pillars of the system but not to replace them. It created many jobs but left 9 million unemployed. It built public housing but not nearly enough. It helped large commercial farmers but not tenant farmers. Excluded from its programs were the poorest of the poor, especially blacks. As farm laborers, migrants or domestic workers, they didn't qualify for unemployment insurance, a minimum wage, Social Security or farm subsidies.

Still, in today's climate of endless war and uncontrolled greed, drawing upon the heritage of the 1930s would be a huge step forward. Perhaps the momentum of such a project could carry the nation past the limits of FDR's reforms, especially if there were a popular upsurge that demanded it. A candidate who points to the New Deal as a model for innovative legislation would be drawing on the huge reputation Franklin Roosevelt and his policies enjoy in this country, an admiration matched by no President since Lincoln. Imagine the response a Democratic candidate would get from the electorate if he or she spoke as follows:

"Our nation is in crisis, just as it was when Roosevelt took office. At that time, people desperately needed help, they needed jobs, decent housing, protection in old age. They needed to know that the government was for them and not just for the wealthy classes. This is what the American people need today.

"I will do what the New Deal did, to make up for the failure of the market system. It put millions of people to work through the Works Progress Administration, at all kinds of jobs, from building schools, hospitals, playgrounds, to repairing streets and bridges, to writing symphonies and painting murals and putting on plays. We can do that today for workers displaced by closed factories, for professionals downsized by a failed economy, for families needing two or three incomes to survive, for writers and musicians and other artists who struggle for security.

"The New Deal's Civilian Conservation Corps at its peak employed 500,000 young people. They lived in camps, planted millions of trees, reclaimed millions of acres of land, built 97,000 miles of fire roads, protected natural habitats, restocked fish and gave emergency help to people threatened by floods.

"We can do that today, by bringing our soldiers home from war and from the military bases we have in 130 countries. We will recruit young people not to fight but to clean up our lakes and rivers, build homes for people in need, make our cities beautiful, be ready to help with disasters like Katrina. The military is having a hard time recruiting young men and women for war, and with good reason. We will have no such problem enlisting the young to build rather than destroy.

"We can learn from the Social Security program and the GI Bill of Rights, which were efficient government programs, doing for older people and for veterans what private enterprise could not do. We can go beyond the New Deal, extending the principle of social security to health security with a totally free government-run health system. We can extend the GI Bill of Rights to a Civilian Bill of Rights, offering free higher education for all.

"We will have trillions of dollars to pay for these programs if we do two things: if we concentrate our taxes on the richest 1 percent of the population, not only their incomes but their accumulated wealth, and if we downsize our gigantic military machine, declaring ourselves a peaceful nation.

"We will not pay attention to those who complain that this is 'big government.' We have seen big government used for war and to give benefits to the wealthy. We will use big government for the people."

How refreshing it would be if a presidential candidate reminded us of the experience of the New Deal and defied the corporate elite as Roosevelt did, on the eve of his 1936 re-election. Referring to the determination of the wealthy classes to defeat him, he told a huge crowd at Madison Square Garden: "They are unanimous in their hatred for me--and I welcome their hatred." I believe that a candidate who showed such boldness would win a smashing victory at the polls.

The innovations of the New Deal were fueled by the militant demands for change that swept the country as FDR began his presidency: the tenants' groups; the Unemployed Councils; the millions on strike on the West Coast, in the Midwest and the South; the disruptive actions of desperate people seeking food, housing, jobs--the turmoil threatening the foundations of American capitalism. We will need a similar mobilization of citizens today, to unmoor from corporate control whoever becomes President. To match the New Deal, to go beyond it, is an idea whose time has come.

Ayatollahs Decline to Ban Militia

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By Juan Cole

Hundreds Flee Baghdad Clashes

I am always astounded at the combination of unrealistic optimism and foolish gullibility that marks political discourse on the Right in Washington. We were being told by Rich Lowry at the National Review that Sadr was on the ropes and on the verge of disbanding the Mahdi Army because the other political factions had turned on him, and that the others had had their militias join the regular security forces.

So let us get this straight. Sayyid Muqtada al-Sadr’s Mahdi Army fought off thousands of regular Iraqi army troops in Basra and Baghdad, and perhaps thousands of those troops deserted rather than fight. So the Mahdi Army won big and Prime Minister Nuri al-Maliki lost. Also the US military trainers of the Iraqi troops lost face.

So the next thing we hear is that al-Maliki is talking big and demanding that the Mahdi Army be dissolved. Usually you get to talk big if you win the military battle, not if you lose.

The Sadrists have no intention of dissolving the Mahdi Army, according to this Arabic source, quoting Sadrist spokesman Salah al-Ubaidi. They point out, pace that great Iraq expert Lowry, that there are 28 militias in Iraq. The Badr Corps of the Islamic Supreme Council of Iraq (ISCI) still exists as a stand alone organization. In fact it ran as a political party in the elections and holds both provincial and federal seats. It hasn’t been complete merged into the state security forces as Lowry alleged. And anyway, painting a sign on a militia saying ’this one is legitimate because its party won the last election’ is not going to convince any real Iraqis.

As it happens, the parliamentary representatives of Mosul demanded Monday that the Kurdish Peshmerga be dissolved. (Hint: Hell will freeze over first).

Then the US press went wild for this supposed report that Muqtada al-Sadr said he would dissolve his militia if Grand Ayatollah Ali Sistani ordered it. Folks, he always says that when there is a controversy. (He said the same thing in spring, 2004). He says it because he knows it makes him look reasonable to the Shiite public. He says it because he knows that the grand ayatollahs are not going to touch the matter with a ten foot pole. They are not so foolish as to take responsibility for dissolving a militia that they had nothing to do with creating. And that is probably the real meaning of this CNN report that they ’refused’ when asked. I doubt the grand ayatollahs in Najaf actively commanded Muqtada to keep his militia. They just declined to get drawn in.

So the idea that, having lost militarily, al-Maliki and his political allies (who are a minority in parliament now) could just a couple of days later jawbone Muqtada into giving up his paramilitary was always absurd.

As for the the threat that the Sadrists would not be allowed to run in the provincial elections in the fall unless the Mahdi Army was dissolved, it is either empty or very dangerous. First of all, not only Sadrists but also other observers have pointed out that excluding parties from running in elections is not the prerogative of the prime minister. It is a matter that would have to be passed by parliament. And since the parliamentarians who would be voting to dissolve all militias ahead of elections are all in parties that maintain militias, it would be political suicide for them to vote that way. Of course, they could just play the hypocrite card and declare, as Lowry did, that their militias are not militias, whereas the Mahdi Army is a militia.

But if the Sadrists are really excluded from civil politics, and they are the majority in the South, then you will have just pushed a majority of Iraqis out of the political process and potentially into civil violence. Isn’t that the opposite of the goal here?

As for the real Iraq, Monday was a difficult day.

Guerrillas killed 4 US troops in Iraq on Monday, bringing the 2-day total to 9.


Courtesy al-Zaman

Robert Reid of AP reports that hundreds of Iraqis fled the Shiite districts of Baghdad that are under siege by American and Iraqi government forces. The US and its Iraqi allies engaged in firefights on several fronts in the Shiite neighborhoods. US helicopter gunships and fighter bombers also fired missiles into the civilian neighborhoods. The attacksleft 14 dead in the Baghdad area. The US military denies that its bombing of civilian neighborhoods kills innocent civilians. While I know they try hard to minimize collateral damage, the blanket form of the assertion is not plausible.

The Baghdad fighting is the worst in about a year.


Courtesy Gulfnews.com.

A huge explosion in the southern port city of Basra destroyed a house and killed at least 8 persons. The origin of the blast remains controversial.

The disposition of the oil-rich province of Kirkuk remains a ticking time bomb in Iraq’s north. The Kurds intend to annex it to Kurdistan. Most Turkmen and Arabs are violently opposed to this step, as is neighboring Turkey. The referendum scheduled for last December was postponed six months, but seems unlikely to take place in June, either. Some Iraqis, including some Kurds, are talking about a negotiated settlement of the question rather than a referendum (which the Kurds would win since they have flooded Kirkuk province with Kurds).

Not every place in al-Anbar Province is yet "calm," the CSM points out.

With regard to the kidnapping of 42 students from a bus near Mosul, who were later released, I received this from a US military observer in the area:

’Mr. Cole,
You should check your sources closer before you report on the "impunity" of the insugents to operate in the Mosul area. My unit was involved in the location of the college students mentioned in your blog. They were not released by the insurgents at their leisure. They were found by coalition forces, engaged to disable the dump truck that the students were being transported and then freed by combined coalition, Iraqi Army and police forces. The four individuals that were driving the dump truck were all detained by Iraqi Army and police units after firing at U.S. helicopters and then hiding among women and children to avoid being fired upon. I know these items are facts as the operation occured a mere three hours after I completed my mission for the day and was briefed by the aircrews that were responsible for the capture. Please know that everyday we see dispicable acts that are perpetrated upon the Iraqi people in the name of the "insurgency". They dare not engage directly because they have learned of the swift and deadly consequences that will occur to them if they do. Also realize that I see the Iraqi security forces taking a larger role in every operation that we conduct here in Ninevah provence of which Mosul is a part. I know that the axiom "if it bleeds it leads" is more true now than ever, but yesterday was a win in the books for the Iraqis and the coalition. Yesterday yielded 42 students that are home with their families, 4 bad guys that are not on the streets, and not a single bystander hurt by coalition or Iraqi forces alike. That is a good news story, not a bullet to show how impotent we are to what is occurring on the ground. ’

It is great to have some background on the way the release was accomplished, information that was to my knowledge not reported in the wire services. And it was certainly good news that the students were released. But I didn’t say the US military was impotent; what I said was that if people can be kidnapped like that in broad daylight, security can’t be very good. And while it is welcome that security was restored for these victims, it still seems like a high crime area. . .

What I can’t understand is why I don’t get more letters like this one. I take eyewitness accounts seriously. I’m a classic political liberal and I think the maximization of information is intrinsically good for a republic.

McClatchy reports political violence in Iraq on Monday:

’ Baghdad

- Around 8 a.m. and 10 p.m. two roadside bombs targeted Iraqi police vehicles in Zayouna injuring 5 policemen and 5 civilians in both attacks.

- Around 9 a.m. a mortar shell hit the Green Zone.

- Around 2 p.m. a roadside bomb targeted a police vehicle in Al Mashtal injuring 5 policemen.

- Two mortar shells hit the air force soccer club in Palestine Street, causing no casualties.

- Clashes between Mahdi army militiamen and the Iraqi army in Sadr city took place today; Iraqi police said and gave no figures for the casualties.

- Around 3 p.m. three mortar shells targeted the Green Zone, one hit Karrada neighborhood injuring two civilians and two hit inside the Green Zone. - Around 4 p.m. two mortar shells hit the Green Zone.

- Around 5 p.m. a mortar shell hit the cars’ parking area in the ministry of foreign affairs causing damages to three parking cars with no casualties.

- Around 5:30 p.m. three mortar shells hit Al Rustamiyah military camp. Minutes later the sources of fire were targeted in Al Ameen neighborhood east of Baghdad, killing 9 civilians and injuring 31, Iraqi police said. No military reepsonse was available by the time of publication of this report.

- A fire in Al Eatiman bank building in Saadon started yesterday night.

- Police found four dead bodies throughout Baghdad, one in Baladiyat, one in Jisr Diyala, one in Amil and one in Dora.

Basra

- Seven men were killed in Al Asdiqa neighborhood (5 miles north of Basra) as an explosion took place in their house.

- A roadside bomb targeted the convoy of General Abdul Kareem Khalf, the spokesman of the ministry of interior, in Al Nashwa area (about 37 miles north of Basra) injuring four body guards.

Diyala

- A roadside bomb targeted an army vehicle in Al Bu Khamis area (about 8 miles south of Baquba) killing one soldier and injuring another.’

Cuba! Africa! Revolution!

Documentary telling the story of Cuba's interventions in Africa from the 1960s onwards and the USA's response, which captures the superpower rivalry, revolutionary idealism and the events that sowed the seeds of later wars. From Che Guevara's campaign in the Congo to the battle of Cuito Cuanavale in Angola and the fall of Apartheid South Africa, Jihan El Tahri shows how Cuba tried to carve out an alternative path for Third World nations, with unique archive stills and footage of Che and Fidel Castro.

Hans von Sponeck - Peace Plan for Iraq

Hans von Sponeck, former UN Humanitarian Coordinator for Iraq, talks about "A TransNational Proposal for Humanitarian Peace In and With Iraq" given April 3, 2008 in Seattle.

Mosaic News - 4/7/08: World News from the Middle East

Inside Story - Arab capital of culture

The Arab League's decision to make Jerusalem the Arab capital of culture for 2009 has already met with Israeli protests. Inside Story discusses the significance of giving this accolade to the world's most contested city.

Charlie Rose - Ted Turner

A conversation with Ted Turner, Former Vice Chairman, AOL Time Warner Incorporated. Turner discusses his $1 billion donation to United Nations programs.

The Clintons cash in: Wealth and American politics

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By Joe Kay

In tax filings released last week, Democratic Party presidential hopeful Sen. Hillary Clinton of New York and her husband, former President Bill Clinton, reported earnings of some $109 million in the years 2000 to 2007.

These figures put the Clintons, who have become something of a political dynasty, among the top .01 percent of taxpayers in the US, according to the Wall Street Journal, or among the 14,500 richest families, according to Britain’s Sunday Times. By either calculation, they are firmly entrenched in the wealthiest portion of the population.

The total income translates to about $13.6 million a year. Even after taxes, the Clintons pulled in $10 million a year, or about 200 times the median family income in the United States.

The Clinton duo’s income has risen astronomically over the past eight years and its meteoric rise began immediately after the end of the president’s term in office in 2001. Forbes magazine noted, “In 2000, Bill Clinton’s final year in office, the First Couple’s income was $350,000; the next year, it rose to $16 million. Their most lucrative years were 2004 and 2007, when they twice made $20 million.” In other words, in 2007 the Clintons made 57 times more than they did in 2000. These are remarkable figures.

Particularly significant is the utterly shameless manner in which Bill Clinton has leveraged his status as a former president and “celebrity” into a personal fortune.

A bit less than half of the couple’s income, approximately $52 million, came from speeches given by Bill Clinton, primarily to corporations and business groups, generally at the rate of $100,000 to $450,000 an appearance. These payments are rendered not so much for the content of the speeches themselves, which are negligible in every respect, but rather as something of a lubricant between the cogwheels of the corporate and political establishments.

The list of companies hosting the former president includes: Wall Street firms Goldman Sachs and Lehman Brothers; corporate giants General Motors, IBM and Cisco Systems; and business trade groups including the National Association of Realtors and the Mortgage Bankers Association. Many of the companies are major donors to Hillary Clinton’s current campaign for the Democratic presidential nomination.

In addition to speaking fees, the Clintons earned together about $40 million from royalties on their books, and another $15 million or so through investments, particularly in one investment fund run by a close Clinton supporter, supermarket magnate Ron Burkle. With a net worth of $3.5 billion, Burkle ranks 307th on a recent Fortune list of the world’s richest individuals.

For most of the period covered by the filings, Bill Clinton has served as a “financial advisor” for Burkle’s fund, Yucaipa Global Opportunities Fund. He has used his name and contacts to pull in investors for Burkle—he is a “rainmaker” in the lexicon of American business. Clinton is set to leave the fund soon, to avoid conflict of interest charges if his wife receives the Democratic presidential nod. A departure agreement is expected to net Clinton an additional $20 million.

Burkle is a major Democratic Party contributor and helped organize a $1 million fundraiser for Hillary Clinton last March at his Beverly Hills mansion. He has developed close ties with members of the Democratic establishment in California, including the Speaker of the House of Representatives, Nancy Pelosi, among others. He has also established links with the trade union bureaucracy in the state.

Burkle’s investment fund, Yucaipa, has come under criticism for some shady investment practices. In one deal, Bill Clinton was brought on board to persuade the Teamsters union to accept a 15 percent wage cut at Allied Holdings, a transportation services and logistics company, to bring it out of bankruptcy after it was bought up by Yucaipa.

Yucaipa was also invested in a Brazilian company that has been accused of keeping workers in near-slavery conditions. (See: “Why the Clintons’ profiting off near-slavery is not a campaign issue”)

The Clinton campaign has pointed to the family’s charitable contributions to distract attention from the enormous family income, but even here there are questions. The Wall Street Journal editorial page, which of course has its own reasons for criticizing the Clintons, pointed out Monday, “Intriguingly, nearly all the donations went to the Clinton Family Foundation, which has disbursed only half the money. The Clintons can thus use the foundation for, er, strategic giving, such as the $100,000 it donated last year to a local South Carolina library—the day after Mrs. Clinton debated in that key primary state.”

The Clinton Family Foundation began disbursing most of its funds only after Hillary Clinton announced her election campaign. The Journal continues, “Similar conflict-of-interest questions apply to the separate William Jefferson Clinton Foundation, for which the couple has so far refused to release a list of donors. Such a list could contain more of the likes of Canadian mining tycoon Frank Giustra, who took Mr. Clinton along on a trip to Kazakhstan as a character reference, won a Kazakh mining concession, and gave more than $30 million to the foundation.”

The Sunday Times, meanwhile, noted, “In 2006 the couple acquired an interest through a blind trust in a private investment fund based in the Cayman Islands, which is connected to Haim Saban. He is a billionaire Hollywood mogul and a big fundraiser for Hillary Clinton.” Such filthy connections abound.

Wealth in American politics is hardly something new, of course. Several political dynasties in the 20th century have been associated with vast family fortunes—the Roosevelts, the Kennedys and the Rockefellers, for example.

What is remarkable now is the ubiquity of vast wealth in the political process and the brazen fashion in which politicians of both parties use their access to public office as a means for personal enrichment. This has become an increasingly prominent aspect of American politics over the past several decades.

Without idealizing any US president in the modern era, trusted defenders of the existing social order to a man, the notion of “cashing in” on a term or two in the White House for personal gain was largely unknown until the Reagan-Bush-Clinton era. According to an anecdote that may or may not be apocryphal, when President Harry Truman was preparing to leave office, he reportedly asked Secretary of State Dean Acheson how he ought to conduct himself after his term was completed. Acheson, the story goes, responded, “As the American people would have you conduct yourself.”

What in an earlier period would have been recognized and characterized as corruption is now the norm, practiced openly and shamelessly. If not during office, then immediately afterward, politicians feel perfectly free to stick their noses in the trough.

In their personal evolution, the Clintons embody a certain transformations of the Democratic Party itself. They have become members of a social milieu that the policies of the Democrats helped create—a layer that became hugely wealthy during the 1990s, when inequality in the US soared to extraordinary levels, largely though stock market speculation.

The Clintons are hardly alone in their good fortune. While the Democratic Party has always represented a section of the ruling class, increasingly its leading figures are themselves fabulously wealthy, either coming directly from the corporate world, marrying into wealth, or leveraging their political ties to big business to open up doors and prepare for careers on corporate boards of directors

The Obamas are not yet at the level of the Clintons, but they have aspirations. In any case, Barack Obama and his wife are better off now than the Clintons were in 1992, the year of Bill Clinton’s first presidential run.

In 2005 and 2006, the Obamas reported an average income of $1.3 million, five times more than they made before Obama was elected to the US Senate. Election to the presidency would open doors for Obama to national and global corporations that, after a few years, would make this income seem like pocket change. As the Illinois senator recently told Business Week magazine, “I believe in entrepreneurship. I believe in capitalism, and I want to do what works.”

All three leading contenders for the Democratic nomination in 2008 were millionaires. John Edwards, the former North Carolina senator and candidate for the Democratic nomination, was estimated in 2003 to be worth anywhere from $13 to $60 million.

About half of US Senators and nearly a third of US Representatives are millionaires, many of them Democrats. Naturally, the Republican Party has no shortage of multi-millionaires. In terms of personal wealth, Clinton trailed only former Massachusetts governor Mitt Romney among major presidential candidates.

At the same time, access to personal wealth has become almost a prerequisite for achieving political office. An individual with a large personal fortune can very easily become a major contender in a presidential race; however, it is virtually impossible for parties or individuals without access to such funds to even obtain ballot status in the majority of American states.

The wealth of the leading Democrats makes a mockery of their occasional populist rhetoric. These people do not and cannot stand for the “little man” or “woman.” Last week, for example, Clinton met briefly with protesting independent truckers in Pennsylvania demanding that something be done about ruinous diesel fuel prices. Signs called for “fair fuel prices.” For the New York senator, this made for a useful photo opportunity.

However, Clinton’s 2008 presidential bid has received almost $900,000 in donations from the energy and natural resources sector as a whole, according to OpenSecrets.org, more than Republican Sen. John McCain of Arizona, and over $300,000 from oil and natural gas companies. Having paid the piper, these corporations call the tune.

The arguments by various left liberal forces, like the Nation magazine, that “progressives” should “exert pressure” on Clinton and Obama in order to move them to the left are empty and absurd. These figures in the Democratic Party are millionaire politicians, who have enriched themselves along with the rest of a crass, shortsighted nouveau riche. They have no intention of hindering in any serious manner the private accumulation of fortunes by their fellow millionaires.

The direct rule by the wealthy exposes the degeneration of what is supposed to be the democratic process in the United States.

Britain: Tax credit system plunges families into debt

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By Jean Shaoul

Prime Minister Gordon Brown’s Working Families Tax Credits (WFTC) system, launched in 2003 and which was supposed to lift families with children out of poverty, has caused untold stress and financial hardship for millions of families.

Designed to replace an earlier system of tax credits introduced by Brown when he was chancellor in 1999, a family of four with an annual income of £15,400 a year (half the male average earnings), would get an additional £4,200 in 2006, still less than two-thirds average male earnings, under WFTC.

But the new IT system was overly complex, dealt with three times the number of households and was riddled with design and implementation problems. Brown rejected warnings that the system would not be able to cope and pushed on regardless.

The system was designed so that claimants would notify Her Majesty’s Revenue and Customs (HMRC), which administers the system, of changes to family circumstances and income after the year end so that adjustments could be made the following year. But HMRC had underestimated the volatility in poor people’s income and the work after the year end this would give rise to, particularly as there is little information publicly available to show entitlements or how the credits are calculated.

While HMRC had anticipated 300,000-400,000 overpayments in the first year as the tax credit payment system bedded down, the volume was five times that number. It “overpaid” £2.3 billion to 1.9 million families in 2003-2004, £2 billion to 2 million families in 2004-2005, and £1.7 billion to 1.9 million families in 2005-2006. One third of payments to more than 6 million households were wrong. This is equivalent to an average overpayment of £1,000 a year or £20 a week, a large sum for a low-income family for whom this could represent more than 10 percent of their income.

HMRC then sought to claw back the overpayment automatically. Families were brusquely informed that deductions would be made in their tax credits for the subsequent year or recouped via increased taxes, arguing that families could “reasonably” have expected that their changed circumstances would result in HMRC seeking to recover the overpayment. Unless challenged, HMRC immediately begins recovery.

HMRC had made no provision to examine each family’s situation on a case-by-case basis before automatic recovery of overpayments. The transfer to HMRC, which had been used to dealing with taxes, usually where people are more prosperous, meant that it would be totally unused and unsuited to dealing with highly vulnerable people for whom £10 a week matters.

Claimants were faced with bills to repay £5,000, a massive sum for families earning an average wage, let alone the more vulnerable families on low and fluctuating incomes, and were plunged into debt. Unable to pay, many found themselves facing court orders for the repayment of thousands of pounds of tax credits.

Having commissioned a fully automated system, HMRC had few staff to handle the volume of complaints that poured in. In 2006-2007, 371,282 families disputed the recovery of overpayments. When challenged, HMRC has taken months to reply and provides no explanation of the so-called overpayment. So error-prone and arbitrary is the system that some families have had their “overpayments” reduced and a few have had them written off, but many families found they were increased, again with no explanation.

There is scarcely a family in the country that does not have a horror story to tell about their experiences with WFTC: from the extreme complexity of forms that have been known to defeat qualified accountants to the nightmare of challenging the alleged overpayments and attempts to claw them back, and coping with reduced income the following year.

Nearly 55,000 people filed an official complaint expressing their dissatisfaction with HMRC, mostly relating to the handling of disputed overpayments. The parliamentary ombudsman has stated that more than a quarter of the cases she handles relate to the WFTC system, higher than any other department. In 2006-2007, she received 393 complaints about tax credits, of which 74 percent were fully or partially upheld, higher than in any other department.

The ombudsman’s 2007 report, Tax credits: getting it wrong?, noted that a group of some of the poorest people in the country had said that this had led to them getting into debt where they had previously not been in debt—causing distress, anxiety and even family break-up.

Many families have refused to have anything to do with WFTC for fear of being caught up in the system’s maladministration. As a result, hundreds of thousands of families do not claim the money to which they are entitled.

While families can appeal to an independent tribunal about the amount of tax credits to which they are entitled, they do not have a similar right in relation to a decision by HMRC to recover an overpayment once the claimant has disputed it. They cannot appeal the way the HMRC has reached its decision or applied the “reasonableness” test, unlike the comparable right of appeal in the benefit regime.

The reform agenda

The state of play with WFTCs is not simply the result of bureaucratic error. WFTCs were part of the Tony Blair government’s broader agenda of getting families off welfare and into work by “making work pay.” When Blair took office as prime minister in 1997, he categorically rejected redistributive taxes and universal cash benefits to reduce the ever-growing social inequality that is the hallmark of Britain today.

Instead, he called in an array of big businessmen to review welfare and social policy issues and suggest how it should be reformed. Martin Taylor, then chief executive of Barclays Bank, was asked to set up a task force “to advise on the reform of the tax and benefits system.”

His task force concentrated on work incentives and converting the existing system of family credits to a tax-based system. It was a crucial step in the direction of a unified benefit system more directly linked to the tax system and workplace, and a tax-based credit system that would force people off benefits and into low-paid work.

As a unified benefits system, WFTC would—it was claimed—reduce fraud and “offer joined up government,” with a “more efficient service to customers.” But a unified benefits system would have to bring together the assessment of eligibility for benefits and their payment. It therefore depended upon highly integrated IT systems linking the various agencies and the transfer of responsibility from the then-Department of Social Security to the Inland Revenue, which has subsequently merged with the Customs and Excise Agency, under the direct control of the Treasury.

This resulted in yet another lucrative IT contract for EDS, but a financial disaster for claimants. While most of the responsibility for the faulty IT system and the £7 billion worth of wrong payments has been laid at EDS’s door, the contractor has been subject to a trifling £75 million penalty, and £25 million of this would only be payable if it won further government contracts. To date, less than £55 million has been repaid.

WFTC aligns benefits away from payments paid as a matter of right based on rules of eligibility to a means-tested tax credits system. In effect, it is determined by employers. Under the Labour government, welfare henceforth was to be linked to the responsibility to work. In the future, anyone refusing a job, however lowly paid, will have his or her benefits stopped. This is now being extended with attempts to force those with disabilities, long-term sick and health problems into work.

The “social safety net” of collective social insurance is being replaced by discretionary payments by the state. They can be withdrawn or changed as the state sees fit and are subject to tax regulations rather than those of the benefits system. Part at least of the benefits system has been brought under the direct control of the Treasury.

In this context, a little-reported measure in the Finance Bill going before parliament is significant. It will extend the right of Customs and Excise officials to turn up unannounced on taxpayers’ doorsteps, demanding to go through records, to tax inspectors, as part of the ongoing merger of Revenue and Customs. The proposals will specify and standardise the records taxpayers must keep, although it is as yet unclear what these requirements will be.

While Customs officials have long had strong search rights, tax inspectors require official warrants to make surprise visits. Now, HMRC is seeking to extend these rights across the two merged agencies. While these new powers are ostensibly aimed at corporations and businesses, they will be used against working people under the guise of combating fraud.

A recent report published by the Economic and Social Research Council, Tracking income: how working families’ incomes vary through the year, sheds light on the implications of the move to a tax credit system. It found that low-income households had much greater income volatility than had been expected. For example:

*Only 7 of the 93 families it tracked had incomes within 10 percent of the annual average.

* A quarter of the families had at least four periods with incomes outside the range of 85 to 115 percent of their annual average.

* The families with the highest volatility were generally those with the lowest incomes, and a higher proportion of lone parents and tenants had more variable income.

WFTC was aimed at creating a new pool of cheap labour by forcing people off benefits. That in turn would serve to drive down wages. By providing inducements to work in the form of tax credits, it was a barely disguised subvention to big business, enabling employers to pay poverty-level wages. The government admitted as much when it said that making savings was not the primary purpose of the scheme. Indeed, it would cost more, not less, as the evidence has confirmed.

WFTC is a £20-billion-a-year subsidy to the employers and has become key to making Britain a low-paid service centre, while the service companies are the Stock Market’s darlings. It is an essential mechanism for corporate welfare—for redistributing wealth from the mass of the population to the financial elite.

The latest official figures show that unclaimed means-tested benefits—pension credits, housing benefit, council tax benefit, jobseekers’ allowance and income support— amounted to about £9.37 billion in 2005-2006, the most recent year for which data is available. This is an increase of £1 billion on the previous year. It contrasts with the paltry £750 million for 2008-2009 and £950 million earmarked for tackling child poverty in the budget, which Save the Children believes means that the government will miss its own target for relieving child poverty by 450,000.

It is now deliberate government policy to increase the level of unclaimed benefits. According to official papers from the Department for Work and Pensions (DWP), ministers have decided not to try to meet the benefit take-up targets on the grounds that it would not represent “value for money to repeatedly press unwilling people to take up their entitlement.”

In the case of pensions, the government has introduced legislation making it compulsory for workers to pay into a second-tier personal and portable insurance for pensions, whose funds are to be invested on the Stock Market.

The new welfare system radically alters the relationship between the government and its citizens: the individual’s responsibility is to work, be independent, support family members, not just children, and save for retirement. The state’s role is to ensure that people do work and thus become “economically independent” so that the state supports only those unable to work, and then only on the most stringent conditions with meagre entitlement. Thus, the Labour government has gone a long way towards dismantling the system of state social insurance, introduced by the post-war Labour government exactly 60 years ago as a mechanism for eradicating poverty.

U.S. Lawmakers Invested in Iraq, Afghanistan Wars

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By Abid Aslam

U.S. lawmakers have a financial interest in military operations in Iraq and Afghanistan, a review of their accounts has revealed.

Members of Congress invested nearly 196 million dollars of their own money in companies that receive hundreds of millions of dollars a day from Pentagon contracts to provide goods and services to U.S. armed forces, say nonpartisan watchdog groups.

David Petraeus, the top U.S. general in Iraq, is to brief the Senate Foreign Relations and Armed Services committees on Tuesday and Wednesday. The latest findings are unlikely to have a significant impact on this week's proceedings but could stoke anti-incumbent sentiment in this year of presidential and legislative elections.

Lawmakers charged with overseeing Pentagon contractors hold stock in those very firms, as do vocal critics of the war in Iraq, says the Centre for Responsive Politics (CRP).

Senator John Kerry, the Democrat from Massachusetts who staked his 2004 presidential bid in part on his opposition to the war, tops the list of investors. His holdings in firms with Pentagon contracts of at least five million dollars stood at between 28.9 million dollars and 38.2 million dollars as of Dec. 31, 2006. Kerry sits on the Senate foreign relations panel.

Members of Congress are required to report their personal finances every year but only need to state their assets in broad ranges.

Other top investors include Representative Rodney Frelinghuysen, a New Jersey Republican with holdings of 12.1 million - 49.1 million dollars; Rep. Robin Hayes, a North Carolina Republican (9.2 million - 37.1 million dollars); Republican Rep. James Sensenbrenner Jr. of Wisconsin (5.2 million - 7.6 million dollars); and Rep. Jane Harman, a California Democrat (2.7 million - 6.3 million dollars).

Sen. Jay Rockefeller, the Democrat and former governor of West Virginia who chairs the Senate Select Intelligence Committee, invested some 2.0 million dollars in Pentagon contractors, CRP says.

Other panel chiefs who invested in defence firms include Sen. Joseph Lieberman, the Connecticut Independent who presides over the Senate Homeland Security and Governmental Affairs Committee, and Rep. Howard Berman, the California Democrat who heads the House Foreign Affairs Committee.

In all, 151 current members of Congress -- more than one-fourth of the total -- have invested between 78.7 million dollars and 195.5 million dollars in companies that received defence contracts of at least 5.0 million dollars, according to CRP.

These companies received more than 275.6 billion dollars from the government in 2006, or 755 million dollars per day, says budget watchdog group OMB Watch.

The investments yielded lawmakers 15.8 million - 62 million dollars in dividend income, capital gains, royalties, and interest from 2004 through 2006, says CRP.

Not all the firms deal in arms or military equipment. Some make soft drinks or medical supplies and military contracts represent a small fraction of their revenues. Many are leaders in their industries and, as such, feature in the investment portfolios of millions of ordinary people who invest at least a portion of their savings in mutual funds, which in turn hold stocks in up to hundreds of companies.

"Giant corporations outside of the defence sector, such as Pepsico, IBM, Microsoft and Johnson & Johnson, have received defence contracts and are all popular investments for both members of Congress and the general public," says CRP.

"So common are these companies, both as personal investments and as defence contractors, it would appear difficult to build a diverse blue-chip stock portfolio without at least some of them," the group acknowledges.

If some of the stocks appear innocent, aides say legislators also are. Some did not buy the stocks in question but inherited them. Many hold them in blind trusts, so called because the investments are handled by independent entities, at least theoretically without the politicians' knowledge of how their assets are being managed.

Even so, according to CRP, owning stock in companies under contract with the Pentagon could prove "problematic for members of Congress who sit on committees that oversee defence policy and budgeting."

Members of the Senate Foreign Relations and Armed Services committees held 3.0 million - 5.1 million dollars in companies specialising in weapons and other exclusively military goods and services, it added.

Critics have assailed President George W. Bush and Vice President Richard Cheney for their ties to companies seen as benefiting from the Iraq and Afghanistan wars. Bush was characterised as pushing conflict in the interest of the oil fraternity whence he hailed.

Before becoming vice president, Cheney headed Halliburton, a major player in the oil services industry and the object of controversies involving political connections, government contracts, and business ethics.

Halliburton's subsidiary, Kellogg Brown & Root, was given multi-billion-dollar contracts to provide construction, hospitality, and other services to the U.S. military following the 2003 invasion of Iraq. The contracts drew fire because of Cheney's history and then-ongoing financial relationship with the firm, and because the company did not have to compete for the Pentagon's business. The firm was renamed KBR Inc. after Halliburton spun it off last year.

UN expert stands by Nazi comments

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By Tim Franks

The next UN investigator into Israeli conduct in the occupied territories has stood by comments comparing Israeli actions in Gaza to those of the Nazis.

Speaking to the BBC, Professor Richard Falk said he believed that up to now Israel had been successful in avoiding the criticism that it was due.

Professor Falk is scheduled to take up his post for the UN Human Rights Council later in the year.

But Israel wants his mandate changed to probe Palestinian actions as well.

Professor Falk said he drew the comparison between the treatment of Palestinians with the Nazi record of collective atrocity, because of what he described as the massive Israeli punishment directed at the entire population of Gaza.

He said he understood that it was a provocative thing to say, but at the time, last summer, he had wanted to shake the American public from its torpor.

"If this kind of situation had existed for instance in the manner in which China was dealing with Tibet or the Sudanese government was dealing with Darfur, I think there would be no reluctance to make that comparison," he said.

That reluctance was, he argued, based on the particular historical sensitivity of the Jewish people, and Israel's ability to avoid having their policies held up to international law and morality.

These and other comments from Professor Falk comments are, if anything, even harsher than the current UN investigator, John Dugard, who himself has been withering about Israel's actions.

A spokesman for the Israeli Foreign Ministry said that Israel wanted the UN investigator's mandate changed, so that he could look into human rights violations by the Palestinians as well as Israel.

If that were not to happen, the Israeli government may consider barring entry to the new UN investigator.

John Yoo's Tortured Explanations

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By Michael Winship

"John Adams," that entertaining and instructive TV mini-series based on David McCullough's biography, is a reminder that, in some respects, nations are created as much from rancor and ego as they are from hope and goodwill.

In the television version of the irascible Mr. Adams's saga, democracy triumphs. Still, while watching it, I can't help but be a little depressed by the thought that while the Founding Fathers sought to build a government of laws rather than men and were crafting such worthy documents as the Declaration of Independence and the Constitution, the current administration's legacy to history will be a series of documents that chose to subvert the very Constitution that Adams, Jefferson, and the others battled so hard to create.

These documents reveal themselves slowly and reluctantly, as if to acknowledge that those who wrote them know deep in their souls what they have done is wrong and antithetical to the ways of a republic.

The latest to ooze its way to the surface, thanks to a Freedom of Information Act suit by the ACLU, is the March 14, 2003, memo written by John Yoo, former deputy in the Justice Department's Office of Legal Counsel (OLC), an acolyte of David Addington, Vice President Cheney's chief of staff and former Cheney legal counsel.

Contrary to claims the abuses at Abu Ghraib and other prisons were contrived by subordinates on the ground - i.e., "hicks with sticks" - Yoo's 81-page memo rationalizes motive and establishes the bar for virtually every human rights violation that has taken place in the name of fighting the global war on terrorism.

It is, in the words of Dan Froomkin, author of The Washington Post's irreplaceable "White House Briefing" blog, "a historic document ... the ultimate expression of Cheney's belief that anything the president or his designates do - no matter how illegal, barbaric or un-American - is justifiable in the name of national self-defense.

"It is also an example of how enabling zealots to disregard the rule of law and the customary boundaries of human conduct leads to madness."

Froomkin's description of the memo was echoed by The Post's Dan Eggen and Josh White, who added, "Nine months after it was issued, Justice Department officials told the Defense Department to stop relying on it. But its reasoning provided the legal foundation for the Defense Department's use of aggressive interrogation practices at a crucial time, as captives poured into military jails from Afghanistan and US forces prepared to invade Iraq.

"... The memo provides an expansive argument for nearly unfettered presidential power in a time of war. It contends that numerous laws and treaties forbidding torture or cruel treatment should not apply to US interrogations in foreign lands because of the president's inherent wartime powers."

It was this memo, among others, that was shown to Maj. Gen. Geoffrey Miller, who had been in charge of detainees at Guantanamo Bay, when he was reassigned to "GITMO-ize" detention operations in Iraq ("GITMO-ize" being the word he used to Brig. Gen. Janis Karpinski, then commander of military prisons in Iraq, including Abu Ghraib).

Perhaps not insignificantly, as noted by Georgetown law professor Marty Lederman, formerly with the OLC, "The vast majority of the criminal abuse in Iraq occurs between Miller's arrival and December 2003 (In December 2003, new OLC head Jack Goldsmith informed the Pentagon that it should no longer rely on John Yoo's legal analysis.)."

As if this weren't enough, a footnote in the March 2003 memo reveals a second John Yoo masterpiece that blithely undermines the Constitution, in this case, the Fourth Amendment right of the people to be secure against unreasonable searches and seizures.

Written on October 23, 2001, not even a month and a half after 9/11, this still-classified Justice Department memo, titled, "Authority for Use of Military Force to Combat Terrorist Activities Within the United States," held that the Fourth Amendment had no bearing on domestic military operations.

Although now disavowed by the White House, according to The Associated Press (AP), "For at least 16 months after the Sept. 11 terror attacks in 2001, the Bush administration believed that the Constitution's protection against unreasonable searches and seizures on US soil didn't apply to its efforts to protect against terrorism."

AP quoted Jameel Jaffer, director of the ACLU's National Security project: "The administration's lawyers believe the president should be permitted to violate statutory law, to violate international treaties and even to violate the Fourth Amendment inside the US They believe that the president should be above the law."

In 1977, most of us laughed in astonishment after a disgraced Richard Nixon said to David Frost, "When the president does it, that means that it is not illegal." Turns out that belief is standard operating procedure in the White House of George W. Bush, Dick Cheney, and their enablers, such as David Addington and Yoo, who now teaches at the University of California, Berkeley.

According to several sources, one of the "inspirations" for the techniques used against real-life detainees has been the Fox TV series, "24." In my own mental TiVo, the great John Adams is to John Yoo what the intelligent "John Adams" TV series is to a different program on Fox, that sordid reality game show, "The Moment of Truth," in which contestants are hooked up to lie detectors and interrogated about infidelities and other vices.

But on the game show, only the viewers are tortured.

Petraeus, Crocker Testify Before Impatient Lawmakers

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By Karen DeYoung

In a reprise of their testimony last September, Army Gen. David H. Petraeus and Ambassador Ryan C. Crocker came to Capitol Hill today to tell lawmakers that security has improved in Iraq and that the government of Prime Minister Nouri al-Maliki has taken steps toward political reconciliation and economic stability.

But unlike in September, when that news was fresh and the administration said a corner had been turned, even some of the war's strongest supporters in Congress have grown impatient and frustrated. Petraeus, the top U.S. military commander in Iraq, and Crocker are facing many lawmakers today and tomorrow who had expected more by now and who are wondering whether any real change will occur before the clock runs out on the Bush administration.

"I think all of us realize we're disappointed at where we are," Sen. Bob Corker (R-Tenn.) said at a hearing last week. Sen. Norm Coleman (R-Minn.) asked, "How do we get out of this mess?" While the cost in U.S. lives and money increases, said another senior GOP senator, who spoke on the condition of anonymity: "We cannot ... just say we're coasting through and waiting for the next president."

Among the questions these and other lawmakers said they plan to ask Petraeus and Crocker is why the United States is still paying for Iraqi domestic needs ranging from military training to garbage pickup when the Maliki government has $30 billion in reserves - held in the Federal Reserve Bank of New York and the Bank for International Settlements in Switzerland - as well as $10 billion in a development fund, significant budgetary surpluses from previous years and a projected 7 percent economic growth rate for 2008.

Sen. Carl M. Levin (D-Mich.), chairman of the Armed Services Committee, and Sen. John W. Warner (Va.), the panel's ranking Republican, who projected that Iraqi oil income would reach $56.4 billion this year, asked the Government Accountability Office last month to investigate how much money the Iraqi government has.

"I think it's a very significant issue that has not had sufficient exposure," Levin said in an interview. "They're perfectly content to watch us spend our money while they build up these huge cash reserves from oil windfalls. It's a real stick in our eye, as far as I'm concerned."

Charles P. Ries, Crocker's deputy for economic policy in Baghdad, said in an e-mail that both the Iraqi constitution and Iraq's arrangement with the International Monetary Fund prohibit spending the nation's reserves. The amount in Iraq's accounts, he said, is not "abnormally high to back up the dinar, given the size of the economy and their dependence on a single commodity for most of export revenues."

Although the United States has spent nearly all of the approximately $21 billion appropriated for Iraqi reconstruction since 2003, $500 million has been budgeted annually for the past three years for the Commander's Emergency Response Program, distributed by U.S. officers on the ground for local development efforts.

Despite considerable U.S. expenditures on oil and electricity infrastructure, oil exports and the supply of electricity and other services have not risen significantly since 2004. In early April, according to State Department statistics, the electricity supply met 58 percent of demand, compared with 66 percent a year earlier. The International Committee of the Red Cross reported last month that "millions of Iraqis have insufficient access to clean water, sanitation and health care."

Lawmakers said they want to question Petraeus about the performance of Iraqi security forces in last week's military engagement between government forces and the Mahdi Army militia of cleric Moqtada al-Sadr in Basra. The fighting, along with continued intra-Shiite fighting in Baghdad that killed at least four U.S. soldiers over the weekend, has complicated efforts to portray Iraq as moving toward stability.

Although the administration has put a positive face on the offensive - describing it as evidence that Maliki's government and the Iraqi military are capable of independent, decisive action - U.S. military and administration officials privately draw a more mixed picture. They judge Iraqi forces, despite five years of U.S. training, as ill prepared for the mission, which lacked cohesive planning and ultimately ended in a draw, at best, with the Sadrists. U.S. air power was called in to back flailing government forces three days into the operation.

A senior U.S. officer in Iraq described Maliki's action as "both bold and impulsive/hasty." While some Iraqi troops "fought well," he wrote in an e-mail, others were "largely ineffective." Up to 1,000 army and police personnel reportedly either deserted or refused to fight. In the National Police, which is known to be sympathetic to Sadr, "hundreds" of officers were fired, one administration official said.

The most "positive spin I can put on it," the official said, is that "the Iraqi Army didn't cut and run." The Mahdi Army, also known as Jaish al-Mahdi, or JAM, "did not prevail. Did the Iraqi Army rout JAM? No."

Rep. Duncan Hunter (Calif.), a leading backer of President Bush's strategy and the ranking Republican on the House Armed Services Committee, one of four panels for which Petraeus and Crocker will testify over two days, said "I want to see the specifics" of Iraqi military performance."

Petraeus is expected to cite Iranian assistance to Mahdi Army forces as another reason to carefully consider any further troop withdrawals. But U.S. intelligence officials have noted that Iran has also provided training and weapons to all Shiite militias, including those allied with Maliki. "One reality of Basra is that you have Iranian-influenced organizations fighting each other," said one intelligence official. "On multiple levels, Iran has its hooks" in all of them, the official added.

While Crocker is expected to point to Iraq's passage of militia amnesty and a reversal of de-Baathification laws, along with legislation to authorize provincial elections in October, the Maliki government remains gridlocked on electoral procedures that must be agreed upon as well as on new oil legislation. At least one-quarter of cabinet seats remain vacant or are only nominally filled.

At the same time, the government has not responded to U.S. demands that it speed up the process of incorporating members of the largely Sunni "Sons of Iraq" into the official security forces or establishing a comprehensive employment program for them. Nearly 90,000 members of the all-volunteer force, which the administration has touted as evidence that Sunnis have turned against the insurgency, remain on the U.S. payroll.

Crocker has frequently used the metaphor of a ticking timepiece to warn against unreasonable U.S. expectations for Iraqi political movement. Washington's clock, he says, moves far faster than Baghdad's. But lawmakers raised concerns that the administration has made too few demands on Iraq. With the possibility of a Democratic administration that may quickly withdraw troops, and as Bush negotiates a new strategic framework for the U.S. military in Iraq, they argued, the president's leverage with Maliki has never been higher.

"The debate over how much progress we have made in the last year may be less illuminating than determining whether the administration is finally defining a clear political-military strategy," said Sen. Richard G. Lugar (Ind.), the ranking Republican on the Foreign Relations Committee.

Stability gains garnered by an increase in U.S. troops last year "are very nice to have," said Sen. Sheldon Whitehouse (D-R.I.), "but essentially they're meaningless. We're going to try to get Petraeus to look at the broader sense of 'What does this all mean?' You've got this temporary gain in security, so where do you go? What is it that's going to make [the Iraqis] face up to the time when we leave?"

Warner said he wants to ask Petraeus for a better answer to the question the senator posed in September: Is the administration's strategy in Iraq "making America safer"? Petraeus, Warner recalled, replied "I don't know."

This time, Warner said, he wants "a full and complete answer which will justify the sacrifice and courage that our troops have shown since his last appearance."

Gazans' Latest Crisis: Fuel Cuts

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Jebaliya, Gaza Strip - Muin Abdul Ghani sleeps in his car, parked among dozens of other vehicles at a gas station, unwilling to give up his place in line in his desperate scramble for gasoline.

It's one way Gaza's embattled 1.4 million residents are adjusting to their newest crisis: a protest by gas station owners who have refused to sell the small amounts they have in stock or accept future shipments after months of restricted Israeli fuel supplies.

Gaza residents also wrestle with high black market prices and overstuffed taxis. They have turned to bicycles, liquid gas for their cars and homemade fuel recipes to try to deal with the shortage.

Israel has restricted fuel supplies since September to pressure Palestinian militants into halting rocket fire at neighboring Israeli communities, but with no apparent results.

"We are like street dogs looking for bones," said Abdul Ghani, a 44-year-old taxi driver, smoking by his car at a gas station in the northern Gazan town of Jebaliya. Around 200 cars, taxis, delivery trucks and farm machinery vehicles were parked there, waiting for the gas station to distribute rationed supplies. Some drivers abandoned their cars, while others sold their places in line.

Abdul Ghani expected to wait at least another day for a day's worth of fuel. Gaza's Hamas government rations out fuel, only allowing residents to take four gallons at a time.

Israel supplies around 19,000 gallons of gasoline a week, 8 percent of Gaza's needs, and 200,000 gallons of diesel fuel - 30 percent of Gaza's needs, Palestinians charge.

Israeli army Col. Nir Press, commander of the military liaison unit, countered that Israel is supplying Gaza with more than enough fuel for its basic needs, but the Islamic Hamas movement is using some of it for its own purposes, including fuel for vehicles that ferry rockets to be fired at Israel.

"I really don't think that this is a crisis," Press said. "They want to create an appearance of a crisis."

The Hamas government takes around half of Gaza's reduced supplies for hospitals, municipal services, water wells and sewage pumps, said Ziad Zaza, a senior Hamas government official.

Protesting the shortages, gas station owners rebelled on Monday, refusing to sell what they have in stock or accept future shipments.

Gaza residents are seeking their own solutions. Drivers pay black market prices for siphoned-off fuel. One taxi driver purchased four gallons for $33 from a sneaky gas station employee. Four gallons sells at the pump for $27.

"It was a good deal. We just want to keep our business running," said the driver, who asked not to be named because the Hamas government forbids black market fuel trading. Other black market traders offer four-gallon tanks for $55.

Reflecting the shortages, shared taxis that once fit seven people are now piling in 10, sometimes 15 people.

On a Gaza City road where shared cabs pick up university students, men and women stood in unhappy clumps waiting for rides.

Heba Mina, a 22-year-old student, was waiting for a ride to her central Gaza Strip home. It used to take seconds to get a cab. Now the wait is longer.

Mina, who wears a full face veil and long black robe, now squeezes into cabs filled with men, once forbidden by conservative Gaza Muslim etiquette.

"It's embarrassing, but I'm desperate," Mina said. This week, she missed two morning classes because she couldn't find transport on time.

A Hamas radio station encouraged listeners to call in with suggestions for transportation alternatives to dodge the fuel restrictions. "My friend and I hired a donkey for $5 and tied it next to the university because we couldn't find a taxi," boasted one caller.

The scarcity is good business for some.

Wael Awad, a 28-year-old car mechanic makes a $137 profit converting a cars to accept liquid gas rather than gasoline. Liquid gas is more plentiful in Gaza. Since fuel restrictions began, he's converted at least one car a day. Before the crisis, he said he converted two a week.

Other Gaza residents are mixing kerosene with used cooking oil to power their cars, though it's not clear whether they run.

Fawzi Hisi, 25, a Hamas policeman, dusted off his childhood bike two months ago. "I couldn't find a taxi to get to work," Hisi said. He's lucky. His colleagues can't afford new bicycles, but can't find secondhand bikes, which are now in short supply.

Hisi said the fuel shortage wouldn't shake his loyalty to the Hamas government. "I'll walk if I have to. We won't die from a fuel shortage," he said.

'Trillion Dollar Meltdown' paints scary economic picture

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By Kerry Hannon


Charles Morris, author of The Trillion Dollar Meltdown, isn't one for sugarcoating. His analysis is dour and grim, but certainly not dull. And when read against a backdrop of an ever-weaker economy, increasingly anxious economists and a stream of gloomy predictions, it can be downright scary.
Morris, a lawyer and former banker who has written 10 books, argues that the subprime mortgage crisis is only a taste of the mayhem that will play out across an array of financial assets.

He lays out the likely course of write-downs and defaults on a whole gamut of assets — residential mortgages, commercial mortgages, high-yield bonds, leveraged loans, credit cards and the complex bond structures that sit atop them. It comes to about $1 trillion, according to Morris. "The sad truth, however, is that subprime (losses he estimates as high as $500 billion) is just the first big boulder in an avalanche of asset write-downs that will rattle on through much of 2008," he predicts.

He doubts it will be an orderly deleveraging. "There will inevitably be margin calls, panicked selling, clamors from shareholders, and the flight from all risky assets that could double or triple the damage."

The subject is complex. But for the most part, Morris serves up a sharp, thought-provoking historical wrap-up of the U.S. economy and its markets, along with clear scrutiny of today's economic woes.

His account runs from the 1950s to the great inflation of the 1970s and traces the financial boom through three critical developments of the 1980s and 1990s — the birth of "structured finance," the expansion of derivatives markets and the mathematization of trading. All of them flowed together to create the great credit bubble that is now imploding around us, according to Morris.

How did we get to such a place? "The current conservative, free-market cycle that commenced with the Reagan presidency, with all its achievements, seems to have long since foundered in the oily seas of gross excess," he writes.

But a few years ago, it lurked beneath the surface. "The early 2000s were a nervous, quarrelsome time — terrorism, airport check-in lines, a discouraging war, energy disruption, nasty politics. But to be a banker, or a high-rolling investor was very heaven," he writes.

He compares the popping of the Japanese asset bubble of the 1980s to events in the USA today. "In proportional scale and market mechanics, it is quite similar to the crisis we are facing now. But the tight network of Japanese government and finance executives chose instead to deny and to conceal, and almost 20 years later Japan still has not recovered," Morris asserts.

To restore credibility, he declares, "American officials and financial leaders must forthrightly admit the scale of the problem and proceed to purge the absurd valuations, the phony triple-A ratings, the inflated balance sheets, and the hidden liabilities that are marbled through financial balance sheets."

The cost of not doing so? "The loss of faith in American markets will be far greater than a one-time trillion-dollar asset write-down."

The sad fact is there isn't much the Federal Reserve can do now, he contends. He lays blame on former Fed chairman Alan Greenspan. He describes the term "Greenspan put" as commonplace on Wall Street in the early 2000s. "A 'put' is an option that allows the owner to sell an asset to some third party at a fixed price, no matter what." In this case, "no matter what goes wrong, the Fed will rescue you by creating enough cheap money to buy you out of your troubles."

It's not a pretty picture. "The 'wall of money' that has kept American markets afloat also created a global dollar tsunami that has left a waterlogged world in its wake," Morris writes.

From his vantage point, those days are kaput. The Fed will have to keep interest rates higher than we would like to avert a currency rout. And with America heading into a recession and a continued collapse in the dollar, that will inevitably trigger price increases in imported goods, much as it is doing in oil, he writes. The credit crunch will have to march its way though the financial markets over the next year or so without "soothing fountains of new dollars coming out of Washington," he contends.

Morris believes that the 1980s change from a "government-centric style of economic management toward a more markets-driven one" was vital in the American economic upturn of the 1980s and 1990s. But the "breadth of the current financial crash suggests that we've reached the point where it is market dogmatism that has become the problem, rather than the solution. And after a quarter-century run, it's time for the pendulum to swing in the other direction."

His fundamental solution: After we've dug out of our financial markets debacle, "The very first priority will be to restore effective oversight over the finance industry." Bankers and high rollers take note.

Secret US Plan for Military Future in Iraq

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By Seumas Milne

Document outlines powers but sets no time limit on troop presence.

A confidential draft agreement covering the future of US forces in Iraq, passed to the Guardian, shows that provision is being made for an open-ended military presence in the country.

The draft strategic framework agreement between the US and Iraqi governments, dated March 7 and marked "secret" and "sensitive", is intended to replace the existing UN mandate and authorises the US to "conduct military operations in Iraq and to detain individuals when necessary for imperative reasons of security" without time limit.

The authorisation is described as "temporary" and the agreement says the US "does not desire permanent bases or a permanent military presence in Iraq". But the absence of a time limit or restrictions on the US and other coalition forces - including the British - in the country means it is likely to be strongly opposed in Iraq and the US.

Iraqi critics point out that the agreement contains no limits on numbers of US forces, the weapons they are able to deploy, their legal status or powers over Iraqi citizens, going far beyond long-term US security agreements with other countries. The agreement is intended to govern the status of the US military and other members of the multinational force.

Following recent clashes between Iraqi troops and Moqtada al-Sadr's Mahdi army in Basra, and threats by the Iraqi government to ban his supporters from regional elections in the autumn, anti-occupation Sadrists and Sunni parties are expected to mount strong opposition in parliament to the agreement, which the US wants to see finalised by the end of July. The UN mandate expires at the end of the year.

One well-placed Iraqi Sunni political source said yesterday: "The feeling in Baghdad is that this agreement is going to be rejected in its current form, particularly after the events of the last couple of weeks. The government is more or less happy with it as it is, but parliament is a different matter."

It is also likely to prove controversial in Washington, where it has been criticised by Democratic presidential candidate Hillary Clinton, who has accused the administration of seeking to tie the hands of the next president by committing to Iraq's protection by US forces.

The defence secretary, Robert Gates, argued in February that the planned agreement would be similar to dozens of "status of forces" pacts the US has around the world and would not commit it to defend Iraq. But Democratic Congress members, including Senator Edward Kennedy, a senior member of the armed services committee, have said it goes well beyond other such agreements and amounts to a treaty, which has to be ratified by the Senate under the constitution.

Administration officials have conceded that if the agreement were to include security guarantees to Iraq, it would have to go before Congress. But the leaked draft only states that it is "in the mutual interest of the United States and Iraq that Iraq maintain its sovereignty, territorial integrity and political independence and that external threats to Iraq be deterred. Accordingly, the US and Iraq are to consult immediately whenever the territorial integrity or political independence of Iraq is threatened."

Significantly - given the tension between the US and Iran, and the latter's close relations with the Iraqi administration's Shia parties - the draft agreement specifies that the "US does not seek to use Iraq territory as a platform for offensive operations against other states".

General David Petraeus, US commander in Iraq, is to face questioning from all three presidential candidates on Capitol Hill today when he reports to the Senate on his surge strategy, which increased US forces in Iraq by about 30,000 last year.

Both Clinton and Democratic rival Barack Obama are committed to beginning troop withdrawals from Iraq. Republican senator John McCain has pledged to maintain troop levels until the country is secure.

FBI Data Transfers Via Telecoms Questioned

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By Ellen Nakashima

When FBI investigators probing New York prostitution rings, Boston organized crime or potential terrorist plots anywhere want access to a suspect's telephone contacts, technicians at a telecommunications carrier served with a government order can, with the click of a mouse, instantly transfer key data along a computer circuit to an FBI technology office in Quantico.

The circuits - little-known electronic connections between telecom firms and FBI monitoring personnel around the country - are used to tell the government who is calling whom, along with the time and duration of a conversation and even the locations of those involved.

Recently, three Democrats on the House Energy and Commerce Committee, including Chairman John D. Dingell (Mich.), sent a letter to colleagues citing privacy concerns over one of the Quantico circuits and demanding more information about it. Anxieties about whether such electronic links are too intrusive form a backdrop to the continuing congressional debate over modifications to the Foreign Intelligence Surveillance Act, which governs federal surveillance.

Since a 1994 law required telecoms to build electronic interception capabilities into their systems, the FBI has created a network of links between the nation's largest telephone and Internet firms and about 40 FBI offices and Quantico, according to interviews and documents describing the agency's Digital Collection System. The documents were obtained under the Freedom of Information Act by the Electronic Frontier Foundation, a nonprofit advocacy group in San Francisco that specializes in digital-rights issues.

The bureau says its budget for the collection system increased from $30 million in 2007 to $40 million in 2008. Information lawfully collected by the FBI from telecom firms can be shared with law enforcement and intelligence-gathering partners, including the National Security Agency and the CIA. Likewise, under guidelines approved by the attorney general or a court, some intercept data gathered by intelligence agencies can be shared with law enforcement agencies.

"When you're building something like this deeply into the telecommunications infrastructure, when it becomes so technically easy to do, the only thing that stands between legitimate use and abuse is the complete honesty of the persons and agencies using it and the ability to have independent oversight over the system's use," said Lauren Weinstein, a communications systems engineer and co-founder of People for Internet Responsibility, a group that studies Web issues. "It's who watches the listeners."

Different versions of the system are used for criminal wiretaps and for foreign intelligence investigations inside the United States. But each allows authorized FBI agents and analysts, with point-and-click ease, to receive e-mails, instant messages, cellphone calls and other communications that tell them not only what a suspect is saying, but where he is and where he has been, depending on the wording of a court order or a government directive. Most of the wiretapping is done at field offices.

Wiretaps to obtain the content of a phone call or an e-mail must be authorized by a court upon a showing of probable cause. But "transactional data" about a communication - from whom, to whom, how long it lasted - can be obtained by simply showing that it is relevant to an official probe, including through an administrative subpoena known as a national security letter (NSL). According to the Justice Department's inspector general, the number of NSLs issued by the FBI soared from 8,500 in 2000 to 47,000 in 2005.

The administration has proposed expanding the types of data it can get from telecom carriers under the 1994 Communications Assistance for Law Enforcement Act, so FBI agents can gain faster and more detailed access to information sent by wireless devices that reveals where a person is in real time. The Federal Communications Commission is weighing the request.

"Court-authorized electronic surveillance is a critical tool in pursuing both criminal and terrorist subjects," FBI spokesman Richard Kolko said.

A Justice Department spokesman said the government is asking only for information at the beginning and end of a communication, and for information "reasonably available" in a carrier's network.

Al Gidari, a telecom industry lawyer at Perkins Coie in Seattle who handles wiretap orders for companies, said government officials now "have to rely on a human being at a telecom calling up every 15 minutes to send law enforcement the data."

He added: "What they want is an automatic feed, continuously. So you're checking the weather on your mobile device or making a call," and the device would transmit location data automatically. "It's full tracking capability. It's a scary proposition."

In an affidavit circulated on Capitol Hill, security consultant Babak Pasdar alleged that a telecom carrier he had worked for maintained a high-speed DS-3 digital line that co-workers referred to as "the Quantico Circuit." He said it allowed a third party "unfettered" access to the carrier's wireless network, including billing records and customer data transmitted wirelessly.

He was hired to upgrade network security for Verizon in 2003; sources other than Pasdar said the carrier in his affidavit is Verizon.

Dingell and his colleagues said House members should be given access to information to help them evaluate Pasdar's allegations.

FBI officials said a circuit of the type described by Pasdar does not exist. All telecom circuits at Quantico are one-way, from the carrier, said Anthony Di Clemente, section chief of the FBI operational technology division. He also said any transmissions of data to Quantico are strictly pursuant to court orders.

Records, including who sent and received communications, the duration and the time, are kept for evidentiary purposes and to support applications to extend wiretap orders, he said.

Verizon spokesman Peter Thonis said no government agency has open access to the company's networks through electronic circuits.