Thursday, December 18, 2008

Obama looking at $850 billion jolt to the economy

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Anxious to jolt the economy back to life, President-elect Barack Obama appears to be zeroing in on a stimulus package of about $850 billion, dwarfing last spring's tax rebates and rivaling drastic government actions to fight the Great Depression.

Obama has not settled on a grand total, but after consulting with outside economists of all political stripes, his advisers have begun telling Congress the stimulus should be bigger than the $600 billion initially envisioned, congressional officials said Wednesday.

Obama is promoting a recovery plan that would feature spending on roads and other infrastructure projects, energy-efficient government buildings, new and renovated schools and environmentally friendly technologies.

There would also be some form of tax relief, according to the Obama team, which is well aware of the political difficulty of pushing such a large package through Congress, even in a time of recession. Any tax cuts would be aimed at middle- and lower-income taxpayers, and aides have said there would be no tax increases for wealthy Americans.

While some economists consulted by Obama's team recommended spending of up to $1 trillion over two years, a more likely figure seems to be $850 billion. There is concern that a package that looks too large could worry financial markets, and the incoming economic team also wants to signal fiscal restraint.

In addition to spending on roads, bridges and similar construction projects, Obama is expected to seek additional funds for numerous programs that experience increased demand when joblessness rises, one Democratic official said.

Among those programs are food stamps and other nutrition programs, health insurance, unemployment insurance and job training programs.

Obama advisers, including Christina Romer and Lawrence Summers, have been contacting economists from across the political spectrum in search of advice as they assemble a spending plan that would meet Obama's goal of preserving or creating 2.5 million jobs over two years.

Among those whose opinions Obama sought were Lawrence B. Lindsey, a top economic adviser to President George W. Bush during his first term, and Harvard professor Martin Feldstein, an informal John McCain adviser and the chairman of the Council of Economic Advisers under President Ronald Reagan.

Feldstein recommended a $400 billion investment in one year, Obama aides said, and Lindsey said the package should be in the range of $800 billion to $1 trillion. The aides revealed the discussions on condition of anonymity because no decisions had been reached.

"I do recommend $400 billion in year one and expect a similar amount in year two," Feldstein said in an e-mail message. "The right amount depends on how it is used."

Lindsey could not be reached.

Obama aides also pointed to recommendations by Mark Zandi, the lead economist at Moody's and an informal McCain adviser who has been proposing a $600 billion plan.

"I would err on the side of making it larger than making it smaller," Zandi said in an interview. "The size of the plan depends on the forecast — the economic outlook — and that is darkening by the day."

"Even a trillion is not inconceivable," he said.

Only one outside economist contacted by Obama aides, Harvard's Greg Mankiw, who served on President Bush's Council of Economic Advisers, voiced skepticism about the need for an economic stimulus, transition officials said.

The advisers say they agree with economic forecasts that predict that without a government infusion unemployment will rise above 9 percent and not begin to come down until 2011.

Senate Majority Leader Harry Reid, D-Nev., said Wednesday that Obama has indicated that Congress will get his recovery recommendations by the first of the year.

"He's going to get that to us very quickly and so we would hope within the first 10 days to two weeks that he's in office, that is after Jan. 20, that we could pass the stimulus plan," Reid said. "We want to do it very quickly."

In a letter to Peter Orszag, Obama's choice to be White House budget chief, Reid asked, among other things, that the stimulus package include tax relief for middle-class families, including a reduction in rates and an extension of the child tax credit.

Obama's aides have said they hope to work with Republicans in writing the bill, particularly in the Senate, where the GOP could slow action if it chooses. This week, House Speaker Nancy Pelosi said Democrats were preparing their own recovery bill in the range of $600 billion, blending immediate steps to counter the slumping economy with longer-term federal spending that encompasses Obama's plan.

A stimulus package that approaches $1 trillion could run into significant Republican opposition in Congress. It also could cause heartburn for moderate and conservative Democratic lawmakers, known as Blue Dogs, who oppose large budget deficits.

"Republicans want to work with the president-elect to help get our economy on the path to recovery, but we have grave reservations about taking $1 trillion from struggling taxpayers and spending it on government programs in the name of economic 'stimulus,'" House Republican leader John Boehner said in a statement.

In February, Congress passed an economic stimulus bill costing $168 billion and featuring $600 tax rebates for most individual taxpayers and tax breaks for businesses. Pelosi largely bowed to President Bush's insistence to keep the measure free of spending on federal projects.

The upcoming effort would dwarf that earlier measure as well as a $61 billion stimulus bill the House passed just before adjourning for the elections. That measure died after a Bush veto threat and GOP opposition in the Senate.

Chrysler Shutting Down for One Month

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By Peter Whoriskey

With Rescue Unresolved, Other U.S. Automakers Also Plan Production Cuts

Struggling U.S. automakers are launching a round of severe cutbacks as they wait for a government rescue, with Chrysler saying yesterday it will idle all 30 of its U.S. factories for one month.

Chrysler's plants will furlough 46,000 workers beginning Friday, as a planned two-week holiday shutdown is extended to a month and possibly longer. The company, which has told Congress it needed $7 billion to survive the month, also told dealers that it may suspend financing for new cars in a bid to conserve cash.

"No one will return to work any earlier than Jan. 19," Chrysler spokesperson Shawn Morgan said. "I don't want to get into speculating about what may happen after that. . . . We're going to continue to monitor the situation."

"If I were a Chrysler worker, I'd be worried that the plant won't reopen," said Brian Johnson, an industry analyst at Barclays Capital.

The moves come as other U.S. and foreign automakers are announcing steep production cuts that will idle tens of thousands of other U.S. workers as the industry copes with withered demand for new cars and trucks. Ford said yesterday that it would stop production for an extra week in January at all but two of its plants because of flagging consumer demand. General Motors said Friday that it will cut production and temporarily close 20 factories.

Honda and Toyota have also announced production cuts.

A plan to issue $14 billion in loans to the U.S. automakers died in the Senate last week, but the Bush administration has indicated it would consider using some of the $700 billion financial industry rescue program to help Detroit. "It's clear that the automakers are in a very fragile financial condition, and they're taking steps to deal with it," White House spokeswoman Dana Perino said yesterday. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way. As we've said, a disorderly collapse of the auto industry should be avoided."

The shutdowns offer a sense of the kind of economic damage the domestic auto industry's collapse could cause. The Big Three -- GM, Chrysler and Ford -- employed about 240,000 U.S. workers at the end of 2007. Foreign automakers employed about 113,000 people in the United States.

The U.S. auto industry's suppliers employ an additional 975,000 people, according to the Center for Automotive Research in Ann Arbor, Mich. The furloughs "are a harbinger of things to come if these loans are not secured," said Dennis Virag, president of the Automotive Consulting Group in Ann Arbor.

Auto plants normally shut down over the winter holiday, but the new reductions extend the usual closures. Chrysler's plants had been scheduled to stop production from Dec. 24 to Jan. 2, but now will close Friday and stay dark until at least Jan. 19.

Two factories in Toledo that make the Jeep Liberty, Jeep Wrangler and Dodge Nitro will be closed until Jan. 26, the company said. A minivan plant in Canada and a plant in Detroit that makes the Dodge Viper will remain shut until Feb. 2.

Most of the workers will receive unemployment coverage equivalent to nearly full pay during the furloughs, officials said. Asked whether the announcement might be viewed as a means of influencing politicians who are weighing a bailout, Chrysler spokeswoman Mary Beth Halprin said, "This is really a response to what we're seeing in the marketplace. . . . We run plants when we have orders. We don't run plants when we don't have orders."

While the U.S. automakers have drawn most scrutiny because of their request for government aid, the downturn has battered Detroit's foreign competitors as well.

Honda has cut its annual forecast and said it will trim global production by more than 300,000 vehicles. Toyota said earlier this week that it will halt construction of a plant to build the Prius in Mississippi as sales of the fuel-efficient gas-electric hybrids have sagged along with gas prices and the economy.

"This is not just the Big Three who are in trouble," Virag said. "This is the entire U.S. auto industry, including domestic and transplants."

The overall downturn has made consumers skittish about big purchases, and the global credit crisis has made it harder for consumers to get loans to buy cars. Chrysler said yesterday that its dealers have lost as much as 25 percent of potential sales in recent months because buyers have been unable to line up financing.

For the first 11 months of this year, Chrysler sales were down nearly 28 percent from the same period last year.

Now, Chrysler says, it is approaching the minimum level of cash it needs and will have trouble paying its bills after Jan. 1. Chrysler is owned by private-equity firm Cerberus Capital Management, which bought the automaker for $7.4 billion in 2007.

Chrysler and GM warned last month that they could run out of cash by the end of the year without aid from the federal government. Chrysler expects to have only about $2.5 billion on hand by Dec. 31, the minimum needed to pay employees and suppliers and keep the company running.

The furloughs are "a grim reminder of a grim situation," Johnson said.

Where Have the Bailout Billions Gone?

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By Adrianne Appel

A new U.S. investigative panel is demanding answers from the U.S. Treasury about how the agency has spent money from the 700-billion-dollar bailout fund.

The Congressional Oversight Panel, a four-person board authorised by Congress and led by consumer advocate Elizabeth Warren of Harvard Law School, is charged with finding out what Treasury has done with the billions it has already spent.

"We are here to ask the questions that we believe all Americans have a right to ask: who got the money, what have they done with it, how has it helped the country and how has it helped ordinary people?" the panel says in its first report, which lays out its work.

The panel has begun gathering documents from Treasury and also is holding a series of public meetings across the U.S., to hear the public's concerns about the bailout and the economy. The panel expects to have some answers for Congress and the public by Jan. 9, when it will issue a report on its website,

"We will be running very hard over the next 40 days," Warren told members of Congress recently. Also on the panel are Rep. Jeb Hensarling, a Republican from Texas; Richard Neiman, Superintendent of Banks in New York; and Damon Silvers, a lawyer with AFL-CIO.

"The recession has visited every household in the country. More than 100,000 families last month headed into bankruptcy courts. Americans are watching Washington's every move with great concern," Warren said.

In a desperate attempt to ease lending, the Federal Reserve Tuesday dropped the federal funds interest rate to between 0 and .25 percent, the lowest in decades.

The Warren panel lacks subpoena power but will work together with Special Inspector General Neil M. Barofsky, who will wield significant legal power, and the General Accounting Office, in auditing and overseeing the funds.

"The public has a right to know how financial institutions that have received public money are using that money," the panel says. "Treasury should be responsible for holding individual institutions accountable for how they use the public's money."

After considerable protests from the public, legislators approved on Oct. 3 700 billion dollars in special funding for the U.S. Treasury, which was requested by Treasury Secretary Henry Paulson who said the funds were needed to prevent a wholesale collapse of the U.S. financial sector.

Paulson has since doled out the equivalent of 1,900 dollars per U.S. family to banks and financial institutions, according to Warren's panel. None of the Treasury funds have been aimed at slowing foreclosures.

Paulson gave 40 billion dollars to insurance giant AIG, 165 billion dollars to 87 banks, including Citigroup and eight other of the largest financial institutions in the U.S., plus an additional 20 billion dollars to Citigroup. The nine large banks were required to give the U.S. a limited amount of stock and returns in exchange for the money.

The Treasury bailout programme, run by Assistant Secretary Neel Kashkari, did not require the banks to use the money in any particular way. Kashkari told Congress recently that Treasury has not audited the money to see how it is being spent.

"There is a casual impression that this money is being used to pay bonuses for top executives and dividends for shareholders," James Crotty, professor emeritus in economics at the University of Massachusetts, told IPS.

"There are ways to measure what's happening to the lending. This may be something to question Treasury vigorously about," Warren said. Great Britain has kept track of its bank bailout money, and required concessions, unlike the U.S., she said.

"The money was given to financial institutions in return for those institutions to lend to small and medium enterprises. There was an explicit quid pro quo," she said.

Paulson and Kashkari, both formerly of Goldman Sachs, have spent additional millions to hire private firms and some of the same institutions that received bailout money, to help administer the bailout programme.

Much secrecy surrounds the spending of the money, with the amount of money in some contracts blackened out and the work actually underway by the contractors not described or audited.

"We are disturbed that so much of [the bailout] activities are opaque. There is a lack of adequate oversight and a lack of transparency," Beverley Lumpkin, an investigator with the Programme on Government Oversight, a Washington non-profit, told IPS. POGO praises the panel's work so far.

"We like the questions they ask. We feel they are pretty much tracking the major questions that need to be looked at," Lumpkin said.

Despite the spending of these funds and more than two trillion by the U.S. Federal Reserve, the economy remains in turmoil, marked by job losses and climbing unemployment, business closings, more than 2 million home foreclosures in 2008 and a severe drop in the value of the stock market.

"The funds haven't done what they are supposed to do. They hoped interest rates would come down and that loans would take place. It doesn't appear that either of those things have happened," Crotty said.

The nation's largest banks are not loaning money to each other out of fear that they will lose it if a bank defaults, due to their heavy investment in risky, unregulated products based on mortgages with sky-high interest rates and unfair terms, many of which are now in foreclosure and without value. This in turn has crimped loans to businesses and brought the economy almost to a halt.

"Virtually all the things that indicate the health of the economy are deteriorating rapidly. Everything looks horrible at the moment," Crotty said.

Career Army Specialist sues Rumsfeld, Cheney, saying no evacuation order given on 9/11

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By Stephen C. Webster

A career Army specialist who survived the attacks of Sept. 11, 2001, claims that no evacuation was ordered inside the Pentagon, despite flight controllers calling in warnings of approaching hijacked aircraft nearly 20 minutes before the building was struck.

According to a time-line of the attacks, the Federal Aviation Administration notified NORAD that American Airlines Flight 77 had been hijacked at 9:24 a.m. The Pentagon was not struck until 9:43 a.m.

On behalf of Spc. April Gallop, who served in the Network Infrastructure Services Agency as an administrative specialist, California attorney William Veale has filed a civil suit against former Secretary of Defense Donald Rumsfeld, Vice President Dick Cheney and former US Air Force General Richard Myers, who was acting chairman of the joint chiefs on 9/11. It alleges they engaged in conspiracy to facilitate the terrorist attacks and purposefully failed to warn those inside the Pentagon, contributing to injuries she and her two-month-old son incurred.

"The ex-G.I. plaintiff alleges she has been denied government support since then, because she raised 'painful questions' about the inexplicable failure of military defenses at the Pentagon that day, and especially the failure of officials to warn and evacuate the occupants of the building when they knew the attack was imminent" said Veale in a media advisory.

Spc. Gallop also says she heard two loud explosions, and does not believe that a Boeing 757 hit the building. Her son sustained a serious brain injury, and Gallop herself was knocked unconscious after the roof collapsed onto her office.

The suit also named additional, unknown persons who had foreknowledge of the attacks.

"What they don't want is for this to go into discovery," said Gallop's attorney, Mr. Veale, speaking to RAW STORY. "If we can make it past their initial motion to dismiss these claims, and we get the power of subpoena, then we've got a real shot at getting to the bottom of this. We've got the law on our side."

The lawsuit's full text follows.

An earlier version of this story erroneously identified Spc. Gallop as an 'officer.'


APRIL GALLOP, for Herself and as Mother and Next Friend of ELISHA GALLOP, a Minor, No. _____________

Plaintiff, Jury Trial Demanded


DICK CHENEY, Vice President of the U.S.A., DONALD RUMSFELD, former U.S. Secretary of Defense, General RICHARD MYERS, U.S.A.F. (Ret.), and John Does Nos. 1– X, all in their individual capacities, Defendants.




1. This case arises from the infamous Attack on America of Sept 11, 2001, and especially on the Pentagon; and is premised on an allegation of broad complicity in the attack on the part of key U.S. Government officials, beginning with and led from the top by Vice President Dick Cheney, then-Secretary of Defense Donald Rumsfeld, and Richard Myers, then acting Chairman of the Joint Chiefs of Staff. The plaintiffs allege that these and other government officials, whose identities will be ascertained from their proven or evident relevant roles and activities, and who are named herein as 'John Doe' defendants, together with other known and unknown operatives and functionaries, official and otherwise, engaged in an unlawful conspiracy, or a set of related, ongoing conspiracies, in which the concrete objective was to facilitate and enable the hijacking of the airliners, and their use as living bombs to attack buildings containing thousands of innocent victims; and then to cover up the truth about what they had done.

2. The defendants' purpose in aiding and facilitating the attack, and the overall object of the conspirac(ies), was to bring about an unprecedented, horrifying and frightening catastrophe of terrorism inside the United States, which would give rise to a powerful reaction of fear and anger in the public, and in Washington. This would generate a political atmosphere of acceptance in which the new Administration could enact and implement radical changes in the policy and practice of constitutional government in our country. Much of their intention was spelled out prior to their coming into office, in publications of the so-called Project for the New American Century, of which defendants Cheney and Rumsfeld were major sponsors. There they set forth specific objectives regarding the projection of U.S. military power abroad, particularly in Iraq, the Persian Gulf, and other oil-producing areas. They observed, however, that the American people would not likely support the actions the sponsors believed were necessary, without being shocked into a new outlook by something cataclysmic: “a new Pearl Harbor”. By helping the attack succeed, defendants and their cohorts created a basis for the seizure of extraordinary power, and a pretext for launching the so-called Global War on Terror, in the guise of which they were free to pursue plans for military conquest, “full spectrum dominance” and “American primacy” around the world; as they have done.

3. In pursuit of the goals of the conspiracy, the named and unnamed defendants knowingly and by agreement committed a series of acts and omissions which were aimed at and did generally accomplish the following objectives:

+ To permit the men they later identified as the hijackers and any immediate accomplices to enter and remain in the country, and carry out the activities, movements and communications needed in their preparations for the hijacking, free from interference by police or counter-terrorist authorities; and then allow the groups of these men to book passage, all on the same day, and board the flights;

+ To cause normal operation of the regular off-course airline flight interception practice of the US Air Force, in cooperation with civil flight control authorities, to be altered, suspended or disrupted in such a way as to remove its protections, at least on that day, and thus permit three of the four apparently hijacked planes to reach their targets and crash into them (or appear to do so...);1

+ To cause the normal operation of ground and air defenses which guard the Pentagon from external attack to be altered, suspended or disrupted in such a way as to remove or negate the building's normal protections, and thus permit an airliner, believed to be hijacked by possible suicide bombers, and following a forbidden, descending flight path, to reach the Pentagon undeterred;

+ To cause and arrange for high explosive charges to be detonated inside the Pentagon, and/or a missile of some sort to be fired at the building, at or about the time the wayward airliner supposedly arrived there, to give the false impression that hijackers had crashed the plane into the building, as had apparently happened in New York;

+ To arrange, thereafter, and fabricate, propound and defend, as part of the conspiracy, an elaborate, highly complex and sophisticated cover-up, centering around the Report of the 9/11 Commission, and continuing to this day. To this end, defendants misappropriated the highest authority of government to block, misdirect and otherwise evade any fair, independent investigation of the evidence, and officially if implausibly explain away the evident wholesale failure of America's defenses with misinformation, omissions and distortions, withheld and destroyed evidence, and outright lies.

4. In the attack on the Pentagon, in particular, plaintiff avers that the official story, that a hijacked plane crashed into the Pentagon and exploded (causing the plaintiff’s injuries), is false. In fact, the bombing was accomplished another way, so as to limit the damage, protect the defendants, and only make it appear that a plane had been crashed into the building. This claim is supported by data from the plane’s supposed “black box”, released by the National Transportation Safety Board (NTSB), which indicate the plane passed over the building at very low altitude, just as an explosion and fireball were engineered by other means, a planted bomb or bombs and/or a missile. This is supported by the lack of any photographic evidence of a wrecked airliner at the Pentagon, compounded by the record of reported refusal by the U.S. Department of Justice to release some 85 video tapes from surveillance cameras in locations at or near the Pentagon, which it has declared exempt from Freedom of Information Act disclosure.

5. Whatever way the bombing of the Pentagon was accomplished, however, and whatever else may or may not have been done by defendants to facilitate the hijackings that day, it is clear the defendant top commanders would have had and did have, at a profound minimum, enough foreknowledge, on that day and in the intelligence information they received beforehand, to have sounded a warning in time for plaintiff and others to evacuate the building, and thereby avoid much if not all the death and injury which occurred. In the end, more than half an hour passed after flight controllers first sounded the alert on Flight 77, while all concerned were fully aware of the suicide crashes in New York; plenty of time for the Pentagon to be evacuated. ‘Top gun’ jet fighter-interceptors under defendants’ command, available with time to spare, were not summoned; and the people in the building, including plaintiff and her infant, were not

warned. This was the result of unlawful conspiracy among these highest-level commanders, and others, who acted knowingly and intentionally to have the Pentagon attacked or to allow it to be attacked, without warning, with deliberate indifference to and in reckless and callous disregard for the fundamental constitutional and human rights of plaintiff and her child, and many other people, dead, injured and bereaved.

6. Plaintiff April Gallop brings this action for herself and as next friend of her son Elisha Gallop now aged 7, who was a two-month-old baby in her arms on that day, her first back from maternity leave. She was a career member of the US Army, a ranking specialist with top secret clearance, who had served six years, two-and-a-half of them in Germany, before being assigned to the Pentagon in 2000. Her desk was roughly 40 feet from the point where the plane allegedly hit the outside wall. As she sat down to work there was an explosion, then another; walls collapsed and the ceiling fell in. Hit in the head, she was able to grab the baby and make her way towards the daylight showing through a blasted opening in the outside wall. There was no airplane wreckage and no burning airplane fuel anywhere; only rubble and dust.

7. Plaintiff and her baby both suffered substantial head and brain injuries, which seriously affect them still today. Plaintiff charges that, because of the conspiracy alleged herein, she and her child and others were injured by acts of terrorism participated in by defendants. Further, as more fully described within at Pars 57-59, she and her child were and subsequently have been denied fundamental rights — including by acts of retaliation against her for raising painful questions about what occurred — as the cover-up continues.


8. This Court has jurisdiction of this case, as follows:

a. Under the First, Fourth, Fifth and Ninth Amendments to the U.S. Constitution, as applied to federal officials under the rule of Bivens v Six Unknown Named Agents, 403 U.S. 388 (1971); and 28 USC 1331;

b. Under the federal Common Law — given that the most direct occurrences and mechanisms of plaintiffs’ injuries, no doubt including crucial agreements and other communications among various defendants, took place in the Pentagon, a federal enclave — giving plaintiff a right of action in this Court for conspiracy to commit and facilitate actions likely to cause wrongful death, great bodily injury, terror and other loss to plaintiff and others to whom defendants owed a special duty of care; where, instead, defendants acted with reckless and callous disregard for and deliberate indifference to the likelihood of great harm to plaintiff and others, and deprivation of their rights;

c. Under the Terrorism Acts, 18 U.S.Code 2333(a), for acts of terrorism brought about by actions wholly outside the scope of defendants’ duties, in perversion of their authority, and beyond the bounds or color of any law; and therefore not exempt or immune under the provisions of Sec. 2337, the application of which to exonerate these defendants would be unconstitutional.

9. Venue for the case is set by the special provisions of the Air Transportation Safety Act of September, 2001, 49 U.S.C. 40101, Subsection 408(b)(3), bringing all claims arising from events of 9/11 to this honorable Court .


10. Plaintiff APRIL GALLOP is an American citizen, resident of the State of Virginia, a member until this year of the U.S. Army, stationed at the Pentagon on 9/11, claiming for herself and for her minor child, ELISHA GALLOP, who was just two months old on 9/11/01, and was with her when the building was hit. Plaintiff respectfully petitions the Court to appoint her as guardian ad litem for the purposes of this action and related matters.

11. Defendants are DICK CHENEY, the Vice President of the United States; DONALD RUMSFELD, formerly and at relevant times Secretary of Defense of the U.S.; Gen. RICHARD MYERS, then acting chairman of the Joint Chiefs of Staff; all sued in their individual capacities. Additional named, unknown defendants are other persons who were and are co-actors and co-conspirators in sundry phases of the (terrorist) undertaking complained of herein, whose identities, and some of whose precise places or functions in the plot(s) alleged herein are not yet known or fully known, but who certainly include high-ranking members of the Defense Department, the Military, the C.I.A., the F.B.I. and other agencies. Such persons are named and alleged as co-defendants, designated as John Does Nos.1-X and hereby notified of this action, pro tanto, to be identified for the record and impleaded by plaintiffs as the particulars of both culpable and innocent acts and omissions by everyone involved in these events become known.

12. Existence of a Class. Plaintiff notes that a number of other persons suffered injury and loss in the Pentagon on September 11 as she did, and are similarly situated to her, plainly within the provisions of Rule 23, F.R.Civ P., so that she represents a Class, the members of which evidently are also entitled to recover judgment as sought herein. She does not now assert the Class interest; but, where it appears there could be action by the Court affecting this question, and a class could emerge, she wishes to and does hereby reserve the right, subject to the Court’s approval, to act as lead plaintiff.

13. Limitations. There is no time bar to the claims in this action. The Statute does not run against plaintiff’s child, as a minor, under Virginia law (Va. Code Ann., §8.01-229). As to the plaintiff herself, defendants and their cohorts and agents, by means of elaborate planned and other ad hoc cover stories, public lying, alteration of records, misappropriation of official authority and other nefarious activities, have concealed and continue to conceal, fraudulently, the truth about the attacks and the way they occurred — and their own participation and complicity in the range of acts and omissions needed, in furtherance of conspiracy, to bring them about. Likewise, the original conspiracy to act secretly in furtherance of terrorism, and lie and dissemble afterwards, in order to foment war and vengeance against the supposed perpetrators, has stayed alive and continued to harm the plaintiff, as she will show.


I. Background: Al Qaeda and the 9/11 Attack

14. As the world knows, four large commercial airliners filled with ordinary passengers were reported hijacked in the northeastern United States the morning of September 11, 2001. Two were evidently crashed into the World Trade Center towers in New York, which later collapsed; a third was said to have hit the Pentagon in Washington DC, and the fourth, supposedly aiming for the White House or the Capitol, was reported crashed in Pennsylvania by its passengers, fighting back against the hijackers.

15. The alleged hijackers were quickly identified by US authorities, supposedly from passenger lists, as 19 men of Middle Eastern descent, fifteen from Saudi Arabia, two from the United Arab Emirates, one Egyptian and one Lebanese. Their pictures, apparent police mug shots, were shown on TV around the world soon after the attack. It emerged that some if not all of these men were already known to police and intelligence authorities in the US and elsewhere as terrorist suspects. They were said to be associated with Al-Qaeda, a network of radical 'Islamic' militants, led by the renegade Saudi aristocrat Osama bin Laden, and pledged to unremitting ‘holy war’ against the United States and its people. Al Qaeda was blamed for several previous terrorist attacks, including suicide attacks in which hundreds died, in the Middle East and Africa, and against a U.S. Navy warship in the Persian Gulf. An earlier, precursor group of ‘Islamist’ terrorists, based in Brooklyn and New Jersey, carried out the first bombing of the World Trade Center, in 1993.

16. At the time the Clinton Administration was succeeded by that of George W. Bush and defendant Dick Cheney, in January, 2001, an extensive, complex U.S. counter-terrorism effort against Al Qaeda was in progress, involving personnel and resources from a number of government agencies, including the FBI, the CIA, the NSA, the U.S. Military, and others, requiring coordination between these agencies at the highest levels. The Chief of Counterterrorism under President Clinton, Richard Clarke, was retained by Bush, but later strongly criticized the Bush Administration for ignoring the Al Qaeda threat, allowing the effort begun under Clinton to lapse, to the point where he felt constrained to apologize to the families of those who died, for the failure he said led directly to the devastation of September 11th. At all events, it is clear from the accounts of Clarke and others that, once Mr. Bush and Defendant Cheney were in office, the effort to combat Al Qaeda was decisively blunted at the top, and at key points down the chain of command.

17. In particular, little or no attention was paid by defendants and others responsible to an increasingly explicit series of warnings, during 2001, that Al Qaeda was hoping and planning to strike inside the US; and that there were concrete plans — which cadres in U.S. agencies were aware of, and were in fact conducting exercises to prepare for, and defeat — which included attempting to crash planes into important buildings. U.S. investigators were well aware that the man they believed was the enemy network’s chief bomb-maker for the 1993 attack on the Trade Center, Ramzi Youssef, had hoped and attempted to bring a tower down in that attack; and that this remained a goal of the group.

18. Responsible intelligence officials were aware that Al Qaeda members were operating inside the U.S., and there were a number of critical investigative leads. Two of the hijackers-to-be lived with an FBI informant in San Diego. The CIA monitored a meeting in Malaysia in 1999, after which two of the participants came to the U.S., where authorities supposedly lost track of them. There were reports from FBI field offices in Arizona and elsewhere that figures on the suspect list were taking or seeking training as pilots — including one who reportedly said he only wanted to learn how to fly an airliner, not how to land or take off — but coordination and follow-up investigation on these and other leads was blocked by John Doe defendant CIA and FBI higher-ups and key players. Notwithstanding such malfeasance, the signs and portents of an imminent attack were very strong in the summer of 2001. As the then CIA chief George Tenet testified, “The system was blinking red.”

19. Despite the flow of ominous information to various sections of the US counterterrorism apparatus, however, and the danger to innocent people — and as a result of conspiracy among defendants Cheney and Rumsfeld, and other members of the Government in various positions — the many warnings of a coming attack by Al Qaeda forces (as many as forty messages in all, according to the Commission Report, from eleven different countries) were studiously ignored.

20. That is, defendants and others in the highest circles of the Government knew more than enough beforehand about the threat and gathering danger of an imminent possible attack by Al Qaeda in the U.S. to understand that they needed to take strong, thoroughgoing measures to increase the country's protections and alertness. Instead, led by defendants Cheney and Rumsfeld, and because defendants were callously indifferent to the rights and safety of innocents — including their own people in the Pentagon, plaintiff among them — the government did not respond. On information and belief, no special meetings of high officials and agency heads were called, to make sure protections systems were on high alert and functioning properly, and that all needed information was being shared. No special warnings were given to the Federal Aviation Administration, the Immigration Service, the Military and other affected agencies. No consultations were had about possible methods of attack, including specifics about possible hijackings, and the use of planes as missiles to hit buildings, despite operational planning and training which had already occurred at lower echelons. The FBI did not step up surveillance of suspected terrorist individuals or “cells”, or immigration checks, or let such people know they were being watched, in order to impede their activities; and it appears that no coordinated, high-level monitoring and analysis of the threats, and planning for counteraction, ever took place. Instead, the threat was dismissed, and ignored.

21. It should be noted that plaintiff cannot and does not know with certainty the outlines of the plot at its initiation. The attacks may have been conceived of as a false-flag operation from the beginning, with the defendants and their operatives as creators, planners, and executors, with the assistance of others as necessary. Or, defendants may have employed Muslim extremists to carry out suicide attacks; or they may have used Muslim extremists as dupes or patsies. The roles of the supposed “nineteen” could have been to hijack the airliners, or simply, unwittingly, to be on the planes when they were crashed into buildings by remote control. It is also possible that the defendants learned of a plot originated by Muslim extremists, and co-opted or overrode it with their own plan. Whatever lay in the minds of the defendant conspirators at the outset, it is clear that the nineteen men so quickly identified as the hijackers, some if not all of them known terrorist suspects, traveling under their own names, simply walked onto the four planes that morning, with their “box cutters”, without hindrance or incident.

II. Failure of the Air Defense System.

22. Accounts from the FAA and the National Military Command Center vary widely, suffer from internal contradictions, and are in conflict with each other; but credible reports show that FAA flight controllers were aware of a problem with the first plane as early as 8:14 or 8:15 a.m. the morning of September 11th, and evidently called the military for emergency assistance, pursuant to routine, by 8:21 a.m. or thereabouts. They learned the second plane was off course and not responding a short time later. According to reports, United Flight 11 hit the WTC North Tower at 8:46 a.m. and Flight 175 hit the South Tower at 9:03. The Pentagon was hit at or about 9:32 a.m. — although the official version says 9:38 — and the fourth plane crashed in Pennsylvania shortly after 10:00 a.m. High performance jet fighter planes stationed at various bases around the northeastern U.S. — tasked to intercept and deal with unidentified or straying aircraft entering or flying in U.S. airspace under NORAD district command, or otherwise at NORAD’s disposal — were available at a moment's notice. None were notified, however, or sent to the right place, until it was too late; at least for the first three planes.

23. No interceptor planes came to stop the supposed hijackers — shoot them down if necessary — even though the Air Force has for many years maintained a practice of immediate response in which the fighters have readily been “scrambled” when aircraft are seen to go too far off course, or lose radio contact with flight controllers. The interceptor program has been an elite assignment in the Air Force, even after the Cold War ended, in which pilots fly regularly, and wait in ‘ready rooms’ near the hangars, and planes are kept in top condition, with engines warm and ready for takeoff. The best jets are used, which can reach speeds of 1600-1800 miles per hour, and the personnel are so well trained and practiced that pilots routinely go from hearing the scramble order to 29,000 feet in less than three minutes. The scramble orders are normally made by local NORAD commanders in cooperation with the FAA. Both the FAA and the affected NORAD North East Air Defense Sector (NEADS) military command have radar tracking coverage of the entire airspace, and special telephone hotlines between them and with higher authority. Nor are these forays rare, reportedly occurring once or twice a week at various U.S. locales during the past several years. Published Federal Aviation Administration (FAA) records showed that, between September 1, 2000 and June 1, 2001, interceptor jets took to the air 67 times to check on “in-flight emergencies” involving wayward planes.

24. No interceptors came to defend the Pentagon, in particular, and plaintiff and the other occupants, because of actions and failures to act by defendant Rumsfeld, Defendant General Myers and John Doe others in concert with them, even though more than an hour passed between the time the first warning went out to the Military, at or about 8:21a.m., and the attack on the Pentagon at 9:32; even though the first tower was hit in a suicide crash in New York at least 46 minutes before the Pentagon was hit; and even though ‘combat air patrol’ jets from any of several bases in the region could have reached the Pentagon — or the path of Flight 77 — in a fraction of that time.

25. Having pre-arranged a coordinated failure of the Pentagon defenses, and its warning system, the defendants hid and distracted themselves, and otherwise failed to act, just at the time they were needed to ensure defense of the building; and they have dissembled ever since, as part of the conspiracy, in representing where they were and what they did during that time. As with the planes that hit the towers in New York, the Military and the 9/11 Commission, while failing to cast blame, explained away the failure to launch fighter interceptors at the Pentagon as the result of a failure by flight controllers — which FAA personnel deny — to notify the Air Force of the flight emergencies in a timely way. This was cover-up, in furtherance of the conspiracy.

26. Likewise, by the acts of one or more defendants in furtherance of the conspiracy, no defenses at the Pentagon responded either, no missile or anti-aircraft batteries opening from the ground around the building, or the roof; no sharpshooters deployed with hand-held missiles at stations close by; nothing. And, shockingly, when the towers in New York had already been hit, and Flight 77 (or a substitute, see below) was out of radio contact and headed back towards the capital; and even when the plane approached, and then doubled back and headed toward the building in a long dive, no alarm was sounded.

27. It is evident, particularly with respect to the attack on the Pentagon in which the plaintiff and her baby were injured, that, if the building was hit by a plane that morning, or if, as appears more likely, a plane flew low over the building at the time the bomb(s) went off inside and/or the missile hit, to give the (false) impression of a crash, some form of order or restriction was in force which suspended normal operation of the building's defenses. In particular, it is indisputable that the expected response of the fighter-interceptors failed completely; and plaintiff avers this resulted from orders or authorization from within the defendant circle of Rumsfeld and Myers and their helpers, restraining normal operation of the protections system and armaments at the Pentagon — including but not limited to jets available at various bases near the capital.

28. Plaintiff alleges further that such “standdown” orders, in whatever manner or form they had been prepared or issued, were maintained and affirmed by defendants up to and through that morning, and that defendant Cheney in particular, operating in the underground command bunker (Presidential Emergency Operations Center, or PEOC) beneath the White House, personally affirmed such an order. His word kept the order in force during the period between 9:20 a.m., when he was observed in the Bunker and the moment the Pentagon was hit.

29. In this connection, plaintiff refers the Court to the testimony of then-U.S. Secretary of Transportation Norman Mineta to the 9/11 Commission. Mineta testified that when he arrived at the White House, he was sent to the PEOC, and arrived at around 9:20 a.m., to find Cheney there, and in charge. He said he sat at a table with Cheney for the next period of time, during which a young man came in the room, three times, and informed the Vice President that an “unidentified plane” was approaching Washington, D.C., first at 50, then 30, and then 10 “miles out”; and that, when he reported the distance as 10 miles, the young man asked the vice president, “Do the orders still stand?” Secretary Mineta testified that defendant Cheney responded sharply, “Of course the orders still stand. Have you heard anything to the contrary?” Whereupon the young man left the room; and a few minutes later, the hit on the Pentagon was announced. This testimony by the Secretary has never been contested, discredited or explained away by any U.S. official.

30. Plaintiff alleges that the “orders” were orders not to intercept or shoot down the approaching plane. If the orders had been to attack the approaching plane, it would have been shot down before it reached the Pentagon — or at least some attempt to stop it would have been made; and the world would know of it. Based on some two hundred years of American military history, the failure would have led to a Board of Inquiry or other public official investigation, to determine how and why the defense apparatus had failed. Individuals would have been called to account, and disciplinary procedures followed resulting in findings of responsibility and demotions or formal charges against those found to have failed the Country. All of these bureaucratic events would have become part of the official record, and known to the public; none of which has happened. There has been no publicly recorded disciplinary action against any military or civilian officer of the United States government as a result of the attacks of September 11th. Such proceedings would have created a great risk that the truth would be exposed.

31. The public record also shows that no meaningful follow-up questioning of Sec. Mineta occurred before the 9/11 Commission; that defendant Cheney has never testified under oath or been reasonably questioned about these events; and that he has given contradictory accounts, one of which---the account he gave to Tim Russert on “Meet the Press” five days after 9/11--- conflicts with The 9/11 Commission Report. The 9/11 Commission Report adopts an unsworn statement by Cheney that he never reached the bunker until about 10:00 a.m.; and contains no reference to Mineta’s testimony, ignoring completely this contradiction between the two high government officials. The Commission also ignores the fact that Richard Clarke’s book “Against All Enemies” supports Mineta’s testimony and hence contradicts the 9/11 Commission’s account.

32. Plaintiff charges that, in point of fact, the “orders” referred to were orders not to shoot the plane down, but to let it proceed, and that such orders were given and/or approved by defendants Cheney, Rumsfeld, and Myers, pursuant to the root conspiracy alleged herein, and transmitted down a chain of command. The normal expected operation of Pentagon defense that day was thus prevented, allowing the attack to succeed, or to “succeed” in creating a false and deceptive scenario of a plane crash.

III. The Attack on the Pentagon.

33. At the Pentagon, the plaintiff was at her desk, with her baby, in her office on the first floor, when large explosions occurred, walls crumbled and the ceiling fell in. Although her desk is just some forty feet from the supposed impact point, and she went out through the blown-open front of the building afterwards, she never saw any sign that an airliner crashed through. If Flight 77, or a substitute, did swoop low over the building, to create the false impression of a suicide attack, it was then flown away by its pilot, or remote control, and apparently crashed someplace else. At the building, inside or outside of the wall the plane supposedly hit, there was no wreckage, no airplane fragments, no engines, no seats, no luggage, no fuselage sections with rows of windows, and especially, no blazing quantities of burning jet fuel. The interior walls and ceilings and contents in that area were destroyed, but there was no sign of a crashed airplane. A number of those present inside the building and out have attested to this fact in published reports.

34. Instead, just when plaintiff turned on her computer — for an urgent document-clearing job she was directed by her supervisor to rush and begin, as soon as she arrived at work, without dropping her baby off at child care until she was finished — a huge explosion occurred, and at least one more that she heard and felt, and flames shot out of the computer. Walls crumbled, the ceiling fell in, and she was knocked unconscious. When she came to, terrified and in pain, she found the baby close by, picked him up, and, with other survivors caught in the area, made her way through rubble, smoke and dust towards daylight, which was showing through an open space that now gaped in the outside wall. When she reached the outside she collapsed on the grass; only to wake up in a hospital some time later.

35. Plaintiff’s injuries could have been avoided, had an alarm been sounded. However, despite the undoubted knowledge of the defendant commanders and operators in the system that an unknown aircraft was headed towards Washington, possibly as part of the apparent terrorist suicide attack begun earlier in New York — and in spite of well-established Pentagon emergency evacuation procedures and training — there was no alarm. On the contrary, plaintiff was directed to go straight to her desk when she arrived at work, and when she got there, and turned her computer on, the place blew up. If an unauthorized non-military plane was headed towards the building, on a day when two apparently hijacked planes had hit the Twin Towers, why wasn’t she evacuated, with her baby, instead of hurried inside? Why weren’t alarms going off, and all the people in the building rushing to safety? Due to the conspiracy, and defendants’ actions and flagrant failures to act, in furtherance of it, one hundred and twenty-five people, members of the Military and civilian employees, died in the bombing; and many more including plaintiff and her child were seriously hurt.

36. Plaintiff alleges further that, pursuant to the conspiracy, the attack on the Pentagon was contrived to “succeed” in only a very limited way. Destruction, death and injuries, in comparison to what would have occurred if the building had been attacked straight on with a large plane, by enemies bent on causing the greatest possible devastation and loss of life, were kept to a minimum; and the conspirators themselves not put at risk. Certainly the official account of what occurred is full of gross anomalies,

which contradict the physical evidence, the scientific and aeronautical evidence, and the laws of physics and aerodynamics. The 9/11 Commission Report is exposed as an artifact of the conspiracy, aimed at covering up the fact that no airliner crashed into the Pentagon, and that it was bombed a different way.

37. The official account established in the 9/11 Commission hearings is that American Airlines Flight 77, a Boeing 757-200 jetliner, took off from Dulles International Airport at or about 8:20 a.m., and apparently was hijacked at about 8:55 a.m. some two or three hundred miles west of Washington. Radio contact was lost and the plane’s “transponder” was turned off. At that point, Flight 77 was traversing an apparent radar “dead zone”, located over the southeast Ohio-West Virginia borderland, where another similar plane, fitted with radio control reception equipment, may have been substituted, so as to ensure that the precise maneuvers required by the conspirators’ plan could be carried out. Whichever plane it was soon established a flight path leading back towards Washington at high speed, on a downward trajectory, until it was close to the Pentagon. There it began a two-and-a-half-to-three-minute spiral dive, from an altitude of about 8000 feet and in a 330-degree loop, which supposedly carried it into the northwest wall of the building. Experts agree this dive was an aeronautically fantastic maneuver, nearly impossible for a plane of that size, which would require the most skillful and experienced pilot — or remote control.

38. The returning plane, according to the official version, struck the Pentagon just above ground level. There it disintegrated — even maybe vaporized, according to some accounts, at least in part — but, paradoxically, also plowed inside. Had it simply flown straight into the top of the building rather than making its improbable spiral dive, there would have been far greater damage and loss of life. Had it turned only 150-180 degrees, it could have smashed into the East side of the building, where the office of defendant Rumsfeld was publicly known to be located on the third floor, looking out at the river, with the Joint Chiefs and other high officials all nearby. In contrast, the ground floor area that was blown up held offices like the one plaintiff worked in, many of them empty for a remodeling project, which was said to have included reinforcement to protect against attack. Another part of the destroyed space held financial records.

39. Also in the official version, the nose of the plane supposedly penetrated the distance of the three outer “rings” of the building, leaving a large, nine- or ten-foot-high round hole — shown in official photographs, without any sign of a plane — in the inner wall of the third (“C”) ring. The hole was located some 300 feet from the alleged impact point, through a maze of structural pillars and interior walls. It was also said that the wings of the plane knocked over five lampposts along a nearby road, as it approached the building, which meant the wings were a maximum of 50 feet off the ground as the plane flew past, roughly 300-350 yards away from the near face of the building.

40. This account is at odds with known evidence, and raises substantial questions about the absence of evidence — and official withholding of evidence — including the following:

a. There are no photos of a wrecked airplane at the place where the building was hit and set on fire; or of airplane wreckage at the hole in the inner ring where the nose of the plane was originally said by Rumsfeld to have come to rest, or elsewhere inside the building. Moreover, the nose of such a plane contains radar equipment, and the outer shell is made of a porous, composite material that allows the radar to function. Therefore, the nose was not capable of surviving an impact with the outer wall without being crushed, let alone penetrating all the way inside to the C-Ring wall, 300 feet away.

Although this story was later dropped, defendant Rumsfeld has never been publicly questioned about his statement that this is what occurred.

b. As noted, there is no footage from numerous video surveillance cameras — reportedly 85 different tapes are being withheld by the U.S. Justice Department — which are known or reliably assumed to have been operating at various nearby locations where some or all of the plane and the crash could be expected to have been caught on tape.

c. The official account says the plane knocked over several lampposts with its wings — two on one side of a nearby road, three on the other — which meant the wings were less than fifty feet off the ground as the plane approached, over uneven terrain, and the undercarriage even closer. The earliest photographs, taken before the upper floors fell in, about 30 minutes after the explosion(s), show the front blown off an expanse of the ground floor, no marks on the lawn in front of the impact zone; and several large cable reels standing in front of the building, unscathed.

d. The “black box” flight data recorder identified by the Government as coming from Flight 77, and reportedly recovered from the wreckage at the scene, bears data, according to pilots who have examined printouts provided by the National Transportation Safety Board (NTSB), which contradict various aspects of the official account, — and indeed the very notion that a plane struck the Pentagon — in crucial ways, viz:

1. It is a fundamental premise of airliner manufacture and operation that the black box only stops recording data when a flight is terminated — by the pilot turning off the engines at the gate, or by a crash. According to the pilots who studied the printouts, however, the record showing the path of Flight 77, etched with codes which connect it to that plane that day, cuts off, unaccountably, some 4-500 yards short of the building — a point reached after the pitched, diving loop described above — at an altitude of 273 feet. The Pentagon is roughly 75 feet high. Just as they will confirm the improbability of that dive, expert pilots will attest that for a plane that size to descend from 273 feet, going approximately 500 miles an hour, and then level off inside of a quarter mile without hitting the ground — let alone get down to 50 feet in time to catch the lampposts, 300 yards closer — is an aerodynamic and gravitational impossibility.

2. The Safety Board has released a computer simulation of the flight path of Flight 77, allegedly based on the data from the flight recorder, which contradicts a simulation adopted by the 9/11 Commission. The Commission simulation shows the flight path of the official story, at an angle reflected by the damage inside the building, consistent with the downed light poles, and to the south of two nearby buildings housing the Navy Annex and a Citgo gas station. The NTSB simulation shows the plane headed towards the building on a path north of the two buildings and the line of lampposts.

3. Similarly, in the one fragment of a surveillance tape the Pentagon has released, two of the five frames disclosed appear to show an object, not recognizable as an airliner and apparently trailing a plume of white smoke, moving parallel to and just above the ground towards the Pentagon wall, followed by a bright explosion and a fireball mounting from the front of the building. The NTSB’s black box data shows Flight 77 was roughly 200 feet above the top of the Pentagon as it reached its last known position some 400 to 500 yards (2-3 seconds) away. Thus, it could not have hit the building except by diving into it, and so could not have flown parallel to the ground between there and the point of impact. So it appears that, contrary to the defendants’ false cover story of an airliner suicide crash, there was a different, additional, flying object, which hit the Pentagon, and was part of the terrorist bombing that caused the plaintiffs’ injuries.

e. Additionally, the FBI identified the hijacker pilot of Flight 77 as “Hani Hanjour”, supposedly a known terrorist suspect, who was reported to have received flight training in various places in the months before the attack. His flight instructors, however, reported that Hanjour was such a poor flight student that he was barely able to fly a small Cessna; and then he was so erratic that instructors refused to go up with him, and, just a few months before 9/11, recommended he be washed out and his license taken away. Thus it seems quite impossible that he could have flown the 757 really at all, let alone in its great uncanny dive. There have also been repeated reports since 9/11 that several of the other men named and pictured by the FBI as the hijackers were still alive after 9/11, and living in various locations in the world — including one, Waleed Al-Shehri, who was said to be a working pilot for Moroccan Air Lines, correctly shown in the FBI photo, whose identity and location have been verified by at least one major press outlet, the BBC. This information has not been pursued by U.S. investigators, or media.

f. Several trained and experienced military personnel at the scene noted the distinctive odor of cordite, a high explosive used in gunpowder, in the aftermath of the attack at the Pentagon. This suggests explosives as the cause for the destruction rather than the impact and fire resulting from burning jet fuel.

g. One investigator has documented the fact that numerous clocks in the damaged area of the building stopped at 9:32 a.m., as the plaintiff’s watch did also, supporting the idea that electrically timed or detonated explosives were used to bring about the intended damage to the building — and that the attack occurred at 9:32, not 9:38.

41. All the matters alleged in paragraph #40 are known and demonstrable, and most would have been immediately evident to the defendants at the time. As Secretary of Defense, defendant Rumsfeld in particular was in a unique position to determine the truth and fix responsibility. He did neither. That he did not is confirmation of his complicity in the attack--and his indifference to and callous disregard for the injuries and loss of rights suffered by plaintiff and others.

42. Further, it should be noted that on September 10, 2001, the day before the attack, Defendant Rumsfeld conducted a press conference at the Pentagon in which he publicly announced that auditors had determined that some 2.3 trillion dollars in Defense Department funds —$2.300,000,000,000 — could not be accounted for. To plaintiff’s knowledge and belief, part of the area of the ground floor of the Pentagon that was destroyed in the bombing is a location where records were kept that would be used to trace those funds, and where people worked who knew about them. On information and belief, there has been to this day no public report concerning the fate of those records, or that money.

43. In any event, the plainly visible pattern of damage on the outside and in other photographic views makes it clear the building was not hit by a plane. There may have been a missile strike, perhaps penetrating through to the back wall, which helped collapse the section that fell in, possibly augmented by explosives placed inside. Photos taken before the collapse suggest this, showing a single blown-out window section, above the ground floor; and witnesses have reported seeing a helicopter above the building, and disappearing behind it, followed by a big explosion and bright fireball. As noted, a large roundish hole was found in the C-ring wall, some 300 feet inside the building; and there were credible accounts, ignored in the Commission Report, of serious bomb damage in the B-ring, second from the center, and even some reports of dead bodies in the central A-ring, also ignored. As shown on CNN television, a large military aircraft, identified as an E-4B — the so-called “Doomsday Plane”, which carries the most complete and sophisticated military command and control apparatus — was circling above Washington at the time the Pentagon was hit. It was in perfect position to coordinate the detonation and/or missile shot with a fly-over; and guide the airliner in its dive by remote control. It was also in perfect position to spot the oncoming plane on its radar and sound an alarm. Significantly, the Department of Defense has denied any knowledge of this airplane flying in that area on that day.

44. Whatever the cause of the bombing, and the traumatic injuries to plaintiff and others which resulted, the Government, of which the two main defendants were and have been the highest, most powerful officers, pursuant to the conspiracy they led and still lead as alleged herein, has been altogether deceptive in investigating, reporting and explaining the attack and its cause; and defendants, rather than righteously investigate and determine the derelictions which occurred, have done nothing but lie and cover up.

45. Defendant Rumsfeld in particular has been deceptive from the start, as where, on September 13, he reported on Good Morning, America that the plane “...went in through three rings (of the Pentagon). I’m told the nose is — is still in there, very close to the inner courtyard, about one ring away”; a palpably false statement, contradicted by numerous witnesses, a total lack of photographic evidence, and evident impossibility. Rumsfeld has also contradicted himself several times in describing his whereabouts and movements during the first hour or more of the attack. He does not acknowledge his presence in a teleconference which Richard Clarke said he, Rumsfeld, and others were part of, beginning shortly after 9:00 a.m. — after the Flight 77 emergency was reported, at or about the time the second tower was hit in New York, and more than half an hour before the Pentagon was hit — and he contradicts himself about whether and when he went to the Executive Support Center and/or the National Military Command Center, both within the Pentagon, as events transpired that morning. General Myers also (falsely) denied he was at the Pentagon in the early stages of the teleconference, as reported by Clarke. Tellingly, the tape of the videoconference, which obviously would have been part of any good faith investigation, has been kept secret.

46. Defendant Rumsfeld also made a striking prediction of the attack, as if speaking compulsively about his secret knowledge, that very morning, and several days later, he publicly referred to the “missile” that hit the Pentagon. In testifying before the 9/11 Commission, the defendant stonewalled and double-talked egregiously, responding to direct questions (some of them personally submitted by plaintiff herself during a hearing open only to survivors), especially about the Air Force fighter-interceptors not showing up, with irrelevant and sometimes incomprehensible ramblings. Consistent with their part in the cover-up, Commissioners failed to question him closely or confront his non-responsiveness.

IV. The Other Planes.

47. In spite of what the record shows was a regular, timely alert and request to NEADS commanders by FAA flight controllers at Boston for in-flight emergency response regarding United Airlines Flights 11 and 175 out of Boston, as described above in Pars. 22-24, the jets were not scrambled, or properly “vectored”, in time to intercept the planes that hit the Towers in New York — even though there was plenty of time for the interception.

48. With respect to Flight 93, which was thought to be intended for an attack on the White House or the Capitol, but crashed in Pennsylvania, there remains a great deal of mystery. Much of what supposedly happened was a made-in-Hollywood saga, where the passengers, learning of the earlier suicide crashes, gathered themselves and counter-attacked the hijackers, succeeding in heroic, self-sacrificing measure by crashing the plane (or causing the hijacker pilot to crash it) in a remote field, before it could approach its target. This story was supposedly recounted to persons on the ground by passengers with cell phones; but the science is clear that, at least in 2001, cell phones couldn't operate at the high altitude where the struggle supposedly took place. Also, the FBI, in presenting evidence at the Moussaoui trial in 2006, denied that any of the high-altitude calls that had been reported actually took place. The only cell phone calls confirmed by the FBI were two that reportedly occurred when the plane had descended to 5,000 feet. Thus, the mythic account is suspicious, to say the least.

49. Moreover, it appears fairly well established that one or more fighters ultimately did go aloft, and reached Flight 93, although this was also comprehensively denied in the Commission Report. There is also good evidence that supposed presidential authority to “engage”, meaning shoot down the plane, was given by defendant Cheney at or about 9:50 a.m. that morning, wherewith Flight 93 was indeed shot down with an air-to-air missile from a U.S.A.F. fighter jet.

50. Finally, there are multiple reports that debris from the plane was found a mile or more from the crash site, an obvious impossibility if the plane simply fell or dove into the ground. Likewise, there is no debris visible in photographs of the crash site, despite a long photographic history of airliner crashes showing plane parts and debris spread around the point of impact. Instead there was a crater, and no sign of the plane. Implausibly, however, the official report said that a visa, in the name of the alleged hijacker identified as the pilot, was recovered near the crater, along with a red headband of the type the hijackers supposedly wore. Again, available evidence shows the official account promulgated under the defendants’ illicit influence is, and plaintiffs allege that it is, false and fraudulent, in furtherance of the conspirac(ies) alleged herein.

V. The Cover-up.

51. As with the other branches or phases of the conspiracy, wherein a number of John Doe defendants working on different aspects of the organized enablement of the hijacking led by defendants Cheney and Rumsfeld may not have been aware or fully aware of each other's involvement; so too with the cover-up, a complicated operation which those involved have maintained for these seven years, and must continue to see to, indefinitely, on any number of fronts. That is, the skein of misrepresentations, distortions, omissions, contradictions, withheld evidence and outright lies which comprise the fraudulent “official” version, must be and plaintiffs allege that it has been and is assiduously, and fraudulently, maintained by the original perpetrators and various cohorts, who have kept the original conspiracy alive to this day.

52. In particular, the cover-up — beyond the fact that the simulated plane crash at the Pentagon was itself a cover-up — has been concentrated around the purported investigation and analysis of the attack and its supposed background by the 9/11 Commission, formally known as The National Commission on Terrorist Attacks Upon The United States, and the Report it issued in 2004. There, as extensively shown by a number of critics and commentators, this official organ put forth a supposedly comprehensive account of the attacks, the alleged attackers and their history, and various surrounding events and circumstances, in a version so full of omissions, distortions and outright falsehoods, as to clinch its purpose as a mainstay of the cover-up, in furtherance of the underlying conspiracy alleged herein, and its ongoing success.

53. Thus the Report gives a careful account and description of some of the many warnings the Government received during 2001 about Al Qaeda's intention to attack — in the United States, possibly with hijacked planes. The Report goes on to describe an interview with President Bush, which occurred only after intense negotiations in which the Commissioners acquiesced to White House conditions requiring that defendant Cheney be permitted to accompany the President, and that no record would be kept and no notes taken. There the President earnestly insisted to his Commission interlocutors that no warning of the attack had come. All contradictions were left unexplored, and ignored in the Report.

54. Similarly, defendant Rumsfeld — like the President himself, then-National Security Adviser Condoleezza Rice, Defendant Gen. Richard Myers and others — testified and said in public, repeatedly, that no one in the Government security apparatus ever imagined terrorists suicidally crashing planes into buildings. This claim was also absolutely false. In point of fact, the CIA, the NSA, the FAA and NORAD had planned and trained for just such a possibility. Indeed, the record shows training exercises involving such a potential attack had in fact been carried on at the Pentagon in October, 2000 and May, 2001, and that NORAD had begun planning in July, 2001, for a training exercise in which the premise would be that a hijacked airliner was crashed into the World Trade Center. The 9/11 Commission, however — with the same studied indifference it showed towards the Mineta testimony — failed even to mention these contradictions in its Report, let alone explain them away.

55. In any event, it is in the nature of the acts alleged that the participants would endeavor from the outset to keep their actions — and the meeting of the minds that unleashed them — the deepest and darkest of secrets, forever. Thus the cover-up, even as it continues today, and will be manifest in the litigation of this complaint, was inherently part of the original unlawful agreement, and thereby part of the cause of the injuries and deprivations plaintiffs suffered on 9/11, and continuing injury since that time.

56. As to the overall plot, with its roots in the command positions and unhinged political fantasies and intentions of the two main defendants, Cheney and Rumsfeld, plaintiff alleges that, necessarily, there were multiple meetings of the minds among the various necessary parties in various implicated locations, positions and phases of the action. Indeed, the narrative reflects an evident form of rolling conspiracy, or multiple successive, interlocking, sub-conspiracies, by which defendants and their cohorts maintain and have maintained the original agreement to cover up the original crime(s) of terrorism, and their part in it, to this day.

VII. Plaintiffs’ Injuries.

57. The injuries, loss and deprivation of rights suffered by Plaintiff April Gallop, her child and others in the bombing of the Pentagon, however it was accomplished, were the result of terrorism, and terrorist acts, and conspiracy to commit terrorism, and to violate constitutional rights, and they include serious head and brain injuries she and her child both sustained when the ceiling caved in on them, as well as the loss and deliberate denial of their rights involved in their being made innocent victims of the attack. Plaintiff’s son, Elisha, has had ongoing problems as he has grown older, associated with injury to his brain, and has required continuing medical care and other special help. Both mother and child have had continuing difficulty, pain and suffering as a result, and sustained need for medical care, and financial and other loss; and they evidently will continue to suffer and to need medical and other assistance for the future.

58. Further, clearly as a result of and in retaliation for her public statement that no airplane wreckage was present in the building after the explosion(s), and for raising other questions, John Doe Department of Defense (DOD) defendants, pursuant to the conspiracy, have wrongfully caused plaintiff to be denied medical care and other benefits she should have received since the attack, and have acted to discourage others from helping her, all to her consequent, actionable loss. Most recently, on being discharged from the Army earlier this year, plaintiff’s financial account was closed out with a zero balance. A short time later, however, she was refused service at the VA medical center, on grounds that she supposedly owed the Defense Department more than $14,000; for which no documentation has been provided.

59. The plaintiff and her child also will experience more general loss, pain and suffering, forever, from what was done to them by high officials of their own government, who, attacking the Country and the Constitution, were willing to see her killed, and did see many others, thousands, killed, simply to further crass political designs. They were and are themselves terrorists, in truth, without whose crucial complicity the Al Qaeda attacks would never have occurred.


One. Violation of Constitutional Rights – Bivens.

a. Conspiracy. The defendants engaged in an unlawful conspiracy or series of interlocking conspiracies whereby they and various co-conspirators and others took various concrete steps, pursuant to a meeting of the minds around the objective of facilitating and enabling the terrorist attacks, specifically by de-activating and defaulting various normal defense systems and measures, as described and to be shown, so that the Al Qaeda hijackings and bombings of September 11 could succeed. They thereby helped cause the attacks and the resulting injuries to plaintiff, denial of her fundamental rights under the Fourth, Fifth and Ninth Amendments to the U.S. Constitution, and death and injury loss to so many others; entitling plaintiff to judgment against the defendants under the rule of the Bivens case, for compensatory damages in such amount as the Jury may determine; and Punitive Damages.

b. Deliberate Indifference. The concerted actions of defendants in their efforts to facilitate and enable the terrorist attacks of September 11 in various ways as described hereinabove and to be shown, and the defendants’ deliberate indifference to the likelihood of serious injury and deprivation of rights arising therefrom, resulted in plaintiff and her child being made unknowing, defenseless victims of the attack, and thereby seriously injured and denied fundamental rights under the Fourth, Fifth and Ninth Amendments to the U.S. Constitution, entitling her to judgment against the defendants, under the rule of the Bivens case, for compensatory damages in such amount as the Jury may determine; and Punitive Damages.

c. Retaliation. The actions taken against plaintiff in retaliation for her speaking out with questions about the official explanations of what happened violated her rights under the First Amendment, entitling her to a further judgment against those responsible for compensatory damages in such amount as the Jury may determine; and Punitive Damages.

Two. Common Law Conspiracy to Cause Death and Great Bodily Harm. The plaintiff is further entitled to judgment against the defendants, jointly and severally, for the injuries she and her child received which were caused by the acts and omissions of defendants and others pursuant to the conspiracy(ies) alleged herein, and by breach of defendants’ duty of care towards the plaintiff, for compensatory and punitive damages in such amounts as the Jury may determine, and costs and attorneys fees.

Three. Acts of Terrorism Causing Injury – 18 U.S.Code 2333(a). The aforesaid acts and omissions of and by defendants were part and parcel of a terrorist attack on the United States, and the Pentagon in particular, resulting from a conspiracy or conspiracies to cause and help cause, facilitate and enable the hijacking and crashing of the planes and other elements of the attack; and these acts resulted in serious injuries to plaintiff and her child, entitling her to judgment against the defendants for compensatory damages as determined by the Jury, treble damages, and Attorneys Fees, under the Terrorism Acts — notwithstanding the provision of Sec.2337, purporting to exempt or immunize U.S. officers and employees acting “within… official capacity or under color of legal authority”; in that the agreements, acts and omissions alleged herein are outside and beyond the reach and compass of any conceivable official capacity or legal authority, actual or colorable, and therefore unconstitutional as applied in this case, as a deprivation of Due Process of Law, and of her right under the Seventh Amendment to have her claim tried by a Jury according to Law.

Goldman Sachs cuts taxes to one percent by moving profits offshore

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By John Byrne

Bank takes $10 billion bailout, then cuts tax rate 33 percent

Say you got a ten billion dollar loan to shore up your finances, and you paid your employees $10.9 billion, and you raked in $2.3 billion for the year.

What would you say you owed in taxes? One percent?

That's what you'd pay if you were Goldman Sachs, Inc. The high-flying brokerage -- and former home of Bush Treasury Secretary Henry Paulson -- has announced it's paying just $14 million in taxes this year.

Last year, their tax bill was $6 billion, or 34.1 percent. That represents a year-over-year drop of 33.1 percent.

Goldman attributed its lower tax rate to "more tax credits as a percentage of earnings" and "changes in geographic earnings mix."

Tax accounting advisor Robert Willens told Bloomberg News the rate drop seems "a little extreme."

"I was definitely taken aback," Willens told the business wire. "Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions."

Texas Democrat Rep. Lloyd Doggett, who serves on the House Ways and Means Committee, said Goldman, like other banks, shifted income to countries with lower taxes to reduce its tax burden.

"This problem is larger than Goldman Sachs," Doggett told Bloomberg. "With the right hand out begging for bailout money, the left is hiding it offshore."

Paulson was CEO of Goldman Sachs until mid-2006, and earned $35 million at the firm in 2005. He drew a $16.4 million salary in 2006 -- even though he served as chief executive for just half the year.

Indian GM Crops Battle Heats Up

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By Tinku Ray

Driving through Warangal in India's southern state of Andhra Pradesh, you pass row upon row of cotton fields.

Vandana Shiva by Nitin Rai for Asiaweek. "The more recent escalation of suicides has been in the region of Vidarbhah and if you look at the data of expansion of BT cotton the highest expansion has taken place there," she says. It is one of the region's traditional crops but these days almost all of it is genetically modified (GM).

Introduced in 2002, there are now over 17 million acres of bacillus thuringiensis (BT) cotton grown in India - making the country the second largest cotton grower and exporter after China.

Genetically modified cotton is the only commercially approved GM crop in the country today.

Allergy fears

Mr Virender has four acres of land, all planted with BT cotton.

"I used to grow non-BT cotton, but had to use much more pesticides so I'm very happy with this," he says.

"I still have to spray pesticides but only five or six times - a lot less than the 15-16 times I had to spray the non-BT variety."

However, he is disappointed with the new seeds he has been asked to try out.

"I'm not very happy with these new seeds. I prefer the old BT cotton seeds as I got a better yield from them," he says.

This year the crop has not been as good and Mr Virender says they have seen different problems - with new insects now attacking the leaves.

He blames the weather and not the seeds themselves, but his wife Rama Devi has a completely different problem with the new cotton.

"I'm allergic to BT cotton, a problem I never had with the non-BT variety. I get a cough and blocked nose as well as other respiratory problems," she says.

But she adds that she tolerates the allergy because of the good yield the crop produces.

About 80% of India's cotton farmers are growing BT cotton and the seeds are distributed through the US firm Monsanto's partner, Maharashtra Hybrid Seed Company (Mahyco).

While no scientific research has been done on the latest reports of allergies, the deputy managing director of Mahyco Monsanto Biotech, Raj Ketkar, says the technology has to go through rigorous allergy tests before getting approval.

"In India we've been growing this for seven years, millions of farmers are growing it. Around the world this technology has been grown for twelve years and we have not had any instances of animals or people having any type of allergic reaction."

The company also claims that the success of its seeds means cotton farmers in India have better lifestyles and can afford things they never dreamed of.

Suicide reports

But there are still many activists opposed to GM crops in India.

Some argue there is a direct link between the thousands of suicides among cotton farmers in Maharashtra and the introduction of BT cotton in the area.

A recent study by the International Food Policy Research Institute concluded there was no evidence of a direct link, but said the cost of BT cotton may have been a contributing factor in specific cases.

But environmental activist Vandana Shiva is still not convinced.

"The more recent escalation of suicides has been in the region of Vidarbhah and if you look at the data of expansion of BT cotton the highest expansion has taken place there," she says.

"In Vidharbah, one farmer is killing himself every six hours and the separation of suicides from BT cotton is the worst lie because if you do a suicide map of this country and you do a BT sales map of this country - you have a one-to-one co-relation in terms of the districts," she maintains.

Usha Barwale Zehr of Mahyco strongly denies the allegation and argues that farmers are doing extremely well with BT cotton.

"The first year the farmer may buy our seed, but the farmer does not come back if the product does not perform," he says.

It is mandatory in India for cotton farmers growing BT cotton to plant 20% of their land with the non-BT variety. This helps prevent the BT plants from losing resistance to bollworms - a pest that can be devastating to the plants.

Some farmers say it is getting increasingly difficult to buy non-BT cotton seeds on the market, although Usha Barwale Zehr denies her firm has a monopoly and says it is giving farmers more, not less choice.

"The opening up of the markets allowed many foreign companies to come into India and provide products, as a result of which even the Indian companies had to be more competitive and come up with products which were competing," she says.

Engineered aubergines

Options for farmers might be about to expand as Mahyco is on the verge of getting approval for a new BT brinjal, or aubergine seed.

Whilst some Indians consume BT cotton in the form of cottonseed oil, the approval of brinjal will directly introduce a genetically modified food to the Indian population for the first time.

So what do ordinary Indians think?

"From an average person's perspective how would you know the difference? You can't actually examine it. It's just based on what someone says," say sone man.

"I might even stop buying brinjals because I'm not sure," says one man, while a woman tells the BBC she does not think they will be very good for her health.

"I wouldn't want to buy a GM food or a vegetable for myself. They might play havoc with the body system. We just haven't done a long term research on GM food," she says.

Another man said he would accept the products depending on their components.

"If it's healthy then I can go for it, if it's a registered product then we can go for it."

That question of approval is one that many Indians are now asking, including the health minister Anbumani Ramadoss who is considering a ban on all GM seeds.

With biotech firms and some farmers arguing for approval, and activists and other farmers against the idea, the lines seem to be drawn for a prolonged battle.

Exxon Mobil Slapped With $6.1 Million Fine

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Exxon Mobil Corp. has agreed to pay an additional $6.1 million penalty after it reneged on a promise to cut air pollution from four refineries in California, Louisiana and Texas, the Justice Department said Wednesday.

Chairman and chief executive officer Rex W. Tillerson speaks at a news conference following the Exxon Mobil Corporation Shareholders Meeting in Dallas, Texas, May 28, 2008. (Mike Stone/Reuters)The payment stems from an agreement between the government and Exxon Mobil in 2005 - part of a broader push by the Environmental Protection Agency to reduce air pollution from refineries - in which the company agreed to pay $14.4 million in civil penalties and community-related environmental projects, while also installing new air pollution controls at the refineries.

But Justice and EPA officials said Wednesday that Exxon Mobil violated the agreement by not adequately reducing smokestack sulfur pollution at the refineries as it had promised to do.

Exxon Mobil said in a statement that the company identified the ongoing sulfur emission problem and brought the matter to the EPA's attention.

"Environmental impacts associated with this item were very minor," Prem Nair, a spokeswoman for Exxon Mobil's offices in Fairfax, Va., wrote in an e-mail. She said the emission problems have been corrected and the company now meets the required EPA standard at the refineries in Beaumont and Baytown, Texas, Torrance, and Baton Rouge, La.

But the Justice Department saw the matter as a bit more serious.

"The Department of Justice will not tolerate violation of our consent decrees," Assistant Attorney General Ronald Tenpas said in a statement.

"The significant penalty in this case shows that noncompliance with settlement requirements will have serious consequences."

Granta Y. Nakayama, assistant EPA administrator for enforcement and compliance, said the 2005 settlement "has resulted in major reductions in air emissions" from Exxon Mobil refineries "but we need full compliance to realize all the benefits of the settlement."

The 2005 agreement was one of a number of settlements that covered companies and refineries nationwide. To date, the EPA said, 95 refineries in 28 states, accounting for 86 percent of the country's refining capacity have installed additional emission controls as part of the 2005 settlement or agreements patterned on it.

At the time, Exxon Mobil denied it had violated any laws or clean air regulations but said the settlement was "in the best interest of the company and supports the continued trend of emission reductions" at its refineries.

As part of the settlement, Exxon Mobil originally paid a civil fine of $7.7 million, promised to spend another $6.7 million on community environmental improvements, and said it was installing additional pollution controls at six refineries. Its two refineries at Joliet, Ill., and Billings, Mont., while part of the original settlement, were not involved in the latest penalty.

In October, Exxon Mobil broke its own record for biggest U.S. quarterly profit, reporting earnings of $14.83 billion for the July-September period. The previous mark was Exxon Mobil's $11.68 billion profit in the second quarter of this year.

Billions later the same question: Will banks lend again?

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By Kevin G. Hall

By cutting its benchmark lending rate to historic lows Tuesday and promising to combat the U.S. recession head on and aggressively, the Federal Reserve served notice that more unconventional actions probably are ahead as it fights to reverse the nation's economic woes.

The Fed pushed its federal funds rate from an already low 1 percent to a target range of 0 to 0.25 percent. This marks the lowest point ever for this target rate that banks charge each other for overnight loans. The funds rate serves as a benchmark for a wide range of loans in the U.S. economy.

The Fed's rate cut was larger than expected, and highly unusual, for the Fed usually targets a specific rate instead of a range. The move highlighted the Fed's determination to act aggressively along with the reality that the U.S. recession is deepening rapidly.

Evidence of that came from the Commerce Department, which reported that housing starts fell 19 percent in November and 47 percent on a year-over-year basis. New residential construction has fallen to levels not seen in almost half a century.

On top of grim retail sales, mounting job losses and sagging exports, the U.S. economy is struggling on many fronts.

In theory, the Fed's action should reduce the cost of borrowing for consumers and businesses, since the prime rate — what banks charge their best customers — moves in tandem with the federal funds rate.

The prime rate typically influences rates for car loans, student loans, credit cards and other debt. With Tuesday's cut, the prime rate is expected to fall to 3.0 to 3.25 percent from 4 percent.

However, despite the attractive rates, banks aren't lending to most consumers and businesses. Weak financial institutions continue to hoard cash and build their balance sheets, with little appetite for risk in new loans. That's worsening the economic downturn, especially since it hurts consumers, who drive almost two-thirds of U.S. economic activity.

In a statement, the rate-setting Federal Open Market Committee said that "The outlook for economic activity has weakened further . . . the Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability."

The vow to deploy "all available tools" sparked a rally on Wall Street. The Dow Jones Industrial Average shot up 359.61 points to close at 8924.14, while the S&P 500 finished up 44.61 points to 913.18 and the Nasdaq added 81.55 points to end the day at 1589.89.

A senior Fed official, briefing reporters late Thursday on the condition of anonymity in order to speak freely, said that a rate range was chosen because the real federal funds rate — what banks actually charge — has been well below the Fed's target in recent months.

The Fed's statement said that "weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time."

The Fed has little room left to maneuver on interest-rate policy now and will use other tools.

"They are saying that they have unlimited arrows. As the central bank of the United States, it is the only entity that can write checks on itself without limit, and that's a very powerful weapon the Fed has against the downturn," said Marvin Goodfriend, a former research director at the Federal Reserve Bank of Richmond who's now an economics professor at Carnegie Mellon University in Pittsburgh. "It won't work immediately, but if it is used aggressively, it will work."

Chief among those other tools is to keep lending aggressively; the Fed's balance sheet already has gone from about $800 billion to $2.2 trillion as it pulls out all the stops to confront the worst financial crisis since the Great Depression.

Fed Chairman Ben Bernanke next can scale up existing Fed lending facilities or create new ones, Goodfriend said. The Fed statement said that the central bank was weighing the possibility of purchasing long-term Treasury bonds, which would drive down their yield and make other investments such as corporate and municipal bonds more attractive.

"The Fed did it before in the 1940s and it could do it again," said Vincent Reinhart, a former chief economist of the Fed's rate-setting body who's now a scholar at the American Enterprise Institute, a conservative policy institute in Washington.

The Fed's statement also said that it will extend credit to households and small businesses early next year. Other experts think that the Fed will increase its purchases of troubled assets to unclog credit markets.

"The Fed's next step is to ramp up its purchases of various financial securities to bring down borrowing costs to households and businesses," said Mark Zandi, the chief economist for forecaster Moody's in West Chester, Pa.

The Fed already has become the buyer of last resort for financial products that aren't moving in today's frozen credit markets. It's bypassed banks and is purchasing short-term promissory notes issued by big U.S. corporations, called commercial paper. It's also announced plans to buy pooled car loans, student loans and credit card debt, collectively called asset-backed securities.

In another creative step to boost the housing market, the central bank also has been purchasing pooled mortgages — called mortgage-backed securities — and debt issued by Fannie Mae and Freddie Mac, the mortgage finance giants that the government seized in September. The senior Fed official said that efforts to purchase mortgages backed by Fannie Mae and Freddie Mac were being ramped up.

The Fed will take additional aggressive steps along those lines in the weeks and months ahead, Zandi predicted.

"They will soon be buying long-term Treasury bonds and will then branch out to high-grade corporate bonds, private-label mortgage securities, asset-backed securities and, if conditions get particularly bad, corporate equity," he said. "The Fed has the ability to purchase just about anything, and they will do so if they think it will help unfreeze credit markets."

President-elect Barack Obama noted Tuesday during a Chicago news conference that the Fed has cut interest rates almost as low as possible. That makes it "critical that the other branches of government step up" and work to stimulate the economy as well, Obama said, underscoring his determination to push a massive stimulus program next month upon taking office.

"Look, we are going through the toughest time economically since the Great Depression, and it's going to be tough," Obama said. He reiterated that his program will save or create 2.5 million jobs and will work to spur an early rebound and long-term investments in a stronger economic foundation.

The Fed's statement didn't mention aid to Detroit's Big Three automakers, but Treasury Secretary Henry Paulson did in an interview on CNBC. He said that the Treasury was studying how best to provide the Big Three with a bridge loan that would sustain them in the short term and help them restructure toward long-term viability.

"We want to do it right," Paulson said, adding that no one wants to see the consequences of a Big Three failure in the current economic circumstances. Up to 3 million jobs could hang in the balance, analysts say.

The Fed got a bit of good news Tuesday, before its announcement, when the Bureau of Labor Statistics reported that inflation fell in November. The BLS said that consumer prices fell 1.7 percent, the second straight month with a record decline in inflation.

On a year-over-year basis, consumer inflation rose 1.1 percent from November 2007 to last month.