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By Nick Carey
Cleveland - As hundreds of thousands of American home owners fall behind on their mortgage payments, more people are turning to short-term loans with sky-high interest rates just to get by.
While hard figures are hard to come by, evidence from nonprofit credit and mortgage counselors suggests that the number of people using these so-called "pay day loans" is growing as the U.S. housing crisis deepens, a negative sign for economic recovery.
"We're hearing from around the country that many folks are buried deep in pay day loan debts as well as struggling with their mortgage payments," said Uriah King, a policy associate at the Center for Responsible Lending (CRL).
A pay day loan is typically for a few hundred dollars, with a term of two weeks, and an interest rate as high as 800 percent. The average borrower ends up paying back $793 for a $325 loan, according to the Center.
The Center also estimates pay day lenders issued more than $28 billion in loans in 2005, the latest available figures.
In the Union Miles district of Cleveland, which has been hit hard by the housing crisis, all the conventional banks have been replaced by pay day lenders with brightly painted signs offering instant cash for a week or two to poor families.
"When distressed home owners come to us it usually takes a while before we find out if they have pay day loans because they don't mention it at first," said Lindsey Sacher, community relations coordinator at nonprofit East Side Organizing Project on a recent tour of the district. "But by the time they come to us for help, they have nothing left."
The loans on offer have an Annual Percentage Rate (APR) of up to 391 percent -- excluding fees and penalties. All you need for a loan like this is proof of regular income, even government benefits will do.
On top of the exorbitant cost, pay day loans have an even darker side, Sacher notes. "We also have to contend with the fact that pay day lenders are very aggressive when it comes to getting paid."
Ohio is on the front line of the U.S. housing crisis. According to the Mortgage Bankers Association, at the end of the fourth quarter Ohio had 3.88 percent of home loans in the process of foreclosure, the highest of all the 50 U.S. states. The "Rust Belt" state's woes have been further compounded by the loss of 235,900 manufacturing jobs between 2000 and 2007.
But while the state as a whole has not done well in recent years, pay day lenders have proliferated.
Bill Faith, executive director of COHHIO, an umbrella group representing some 600 nonprofit agencies in Ohio, said the state is home to some 1,650 pay day loan lenders -- more than all of Ohio's McDonald's, Burger Kings and Wendy's fast food franchises put together.
"That's saying something, as the people of Ohio really like their fast food," Faith said. "But pay day loans are insidious because people get trapped in a cycle of debt."
It takes the average borrower two years to get out of a pay day loan, he said.
Robert Frank, an economics professor at Cornell University, equates pay day loans with "handing a suicidal person a noose" because many people can't control their finances and end up mired in debt.
"These loans lead to more bankruptcies and wipe out people's savings, which is bad for the economy," he said. "This is a problem that has been caused by deregulation" of the U.S. financial sector in the 1990s.
Because of the astronomical interest rates there is a movement among more states to implement a cap of 36 percent APR that is currently in place in 13 states and the District of Columbia.
"Thirty-six percent is still very high," said Ozell Brooklin, director of Acorn Housing in Atlanta, Georgia where there is a cap in place. "But it's better than 400 percent."
Springing the Trap
But even in states like New York where pay day loan caps or bans exist, loopholes allow out-of-state lenders to provide loans over the Internet.
Janet Hudson, 40, ran into pay day loans when she and her fiance broke up, leaving her with a young son and a $1,000 monthly mortgage payment. Short on cash, she took out three small pay day loans online totaling $900 but fell behind with her payments. Soon her monthly interest and fees totaled $800.
"It almost equaled my mortgage and I wasn't even touching the principal of the loans," said Hudson, who works as an administrative assistant.
After falling behind on her mortgage, Hudson asked Rochester, New York-based nonprofit Empire Justice Center for help. A lawyer at Empire, Rebecca Case-Grammatico, advised her to stop paying off the pay day loans because the loans were unsecured debt.
"For months after that the pay day lenders left me voice mails threatening to have me thrown in jail, take everything I owned and destroy my credit rating," Hudson said. After several months, the pay day lenders offered to reach a settlement.
But Hudson was already so far behind on her mortgage that she had to sell her home April 2007 to avoid foreclosure.
"Thanks to the (New York state) ban on pay day loans we've been spared large scale problems, but Internet loans have still cost people their homes," Case-Grammatico said.
A national 36 percent cap on pay day loans to members of the military came into effect last October. The cap was proposed by Republican Senator Jim Talent and Democratic Senator Bill Nelson -- citing APR of up to 800 percent as harmful to the battle readiness and morale of the U.S. Armed Forces.
There are now proposals in other states -- including Ohio, Virginia, Arizona and Colorado -- to bring in a 36 percent cap.
And, in Arkansas, attorney general Dustin McDaniel sent a letter to payday lenders on March 18 asking them to shut down or face a lawsuit, saying they have made a "lot of money on the backs of Arkansas consumers, mostly the working poor."
Alan Fisher, executive director of the said up 2 million Californians have pay day loans. There is a proposed 36 percent cap awaiting debate in California's state assembly.
"We expect pay day loans will make the housing crisis worse," said Alan Fisher, executive director of the California Reinvestment Coalition, an umbrella group of housing counseling agencies. California, a state with an estimated 2 million pay day loans, the assembly is set to debate a bill on introducing a 36 percent cap.
"Thanks to the credit crunch and foreclosure crisis, state and federal policy makers are taking a hard look at the policy of credit at any cost," the CRL's King said. "But more needs to be done, fast."
Monday, March 24, 2008
Telecom Lobbyists Tied to McCain
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By Matt Kelley
Washington - Republican presidential candidate John McCain has condemned the influence of "special interest lobbyists," yet dozens of lobbyists have political and financial ties to his presidential campaign - particularly from telecommunications companies, an industry he helps oversee in the Senate.
Of the 66 current or former lobbyists working for the Arizona senator or raising money for his presidential campaign, 23 have lobbied for telecommunications companies in the past decade, Senate lobbying disclosures show.
McCain has netted about $765,000 in political donations from those telecom lobbyists, their spouses, colleagues at their firms and their telecom clients during the past decade, a USA TODAY analysis of campaign-finance records shows.
It's unclear how much more money those lobbyists have raised for McCain. Eighteen of them are listed by the campaign as "bundlers," which are major fundraisers. McCain doesn't disclose how much each bundler has raised - unlike Democratic presidential candidates Hillary Rodham Clinton and Barack Obama, who categorize their bundlers by the amount they raise. For example, Clinton's "Hillraisers" have brought in more than $100,000 each.
McCain is a senior member of the Senate Commerce Committee, which oversees the telecom industry and the Federal Communications Commission. He has repeatedly pushed industry-backed legislation since 2000, particularly during a second stint as committee chairman from 2003 through 2005. His efforts to eliminate taxes and regulations on telecommunications services won him praise from industry executives.
People who lobbied for telecom companies on those issues include McCain's campaign manager, his deputy manager, his finance chief, his top unpaid political adviser and his Senate chief of staff. Telecom companies have paid the lobbying firms that employed those top five McCain advisers more than $4.4 million since 1999, lobbying records show.
McCain "does not do favors for special interests or lobbyists. Period," spokeswoman Jill Hazelbaker said in an e-mail. McCain opposed Internet access taxes, she said, as part of his "consistent record of opposing new taxes."
McCain has repeatedly sought restrictions on lobbyists and campaign donations, saying they create the appearance of corruption. "It is no coincidence that the most influential lobbyists with the greatest access in the nation's Capitol are also the most prolific political fundraisers," McCain says on his campaign website.
Democratic National Committee spokesman Damien LaVera said McCain is taking a "'Do as I say, not as I do' approach to campaign finance, ethics and lobbying reform."
By Matt Kelley
Washington - Republican presidential candidate John McCain has condemned the influence of "special interest lobbyists," yet dozens of lobbyists have political and financial ties to his presidential campaign - particularly from telecommunications companies, an industry he helps oversee in the Senate.
Of the 66 current or former lobbyists working for the Arizona senator or raising money for his presidential campaign, 23 have lobbied for telecommunications companies in the past decade, Senate lobbying disclosures show.
McCain has netted about $765,000 in political donations from those telecom lobbyists, their spouses, colleagues at their firms and their telecom clients during the past decade, a USA TODAY analysis of campaign-finance records shows.
It's unclear how much more money those lobbyists have raised for McCain. Eighteen of them are listed by the campaign as "bundlers," which are major fundraisers. McCain doesn't disclose how much each bundler has raised - unlike Democratic presidential candidates Hillary Rodham Clinton and Barack Obama, who categorize their bundlers by the amount they raise. For example, Clinton's "Hillraisers" have brought in more than $100,000 each.
McCain is a senior member of the Senate Commerce Committee, which oversees the telecom industry and the Federal Communications Commission. He has repeatedly pushed industry-backed legislation since 2000, particularly during a second stint as committee chairman from 2003 through 2005. His efforts to eliminate taxes and regulations on telecommunications services won him praise from industry executives.
People who lobbied for telecom companies on those issues include McCain's campaign manager, his deputy manager, his finance chief, his top unpaid political adviser and his Senate chief of staff. Telecom companies have paid the lobbying firms that employed those top five McCain advisers more than $4.4 million since 1999, lobbying records show.
McCain "does not do favors for special interests or lobbyists. Period," spokeswoman Jill Hazelbaker said in an e-mail. McCain opposed Internet access taxes, she said, as part of his "consistent record of opposing new taxes."
McCain has repeatedly sought restrictions on lobbyists and campaign donations, saying they create the appearance of corruption. "It is no coincidence that the most influential lobbyists with the greatest access in the nation's Capitol are also the most prolific political fundraisers," McCain says on his campaign website.
Democratic National Committee spokesman Damien LaVera said McCain is taking a "'Do as I say, not as I do' approach to campaign finance, ethics and lobbying reform."
Financial Meltdown: Time for a Holiday From Progressive Politics?
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By Dean Baker
Progressives usually fight for the interests of those at the middle and bottom at the expense of those on top. However, during this period of unprecedented financial crisis, when the Wall Street rich are begging for the helping hand of the government, most progressives appear to be on the sidelines. Rather than taking advantage of this extraordinary opportunity to reduce inequality and educate the public about how the economy really works, progressive voices have been unusually quiet.
While the basic story on the economic crisis should be well known, it is nonetheless worth repeating. The Federal Reserve Board allowed the growth of an $8 trillion housing bubble ($110,000 of housing bubble wealth for every homeowner) in the years from 1996 to 2006. While this bubble was easily recognizable to competent economists, the entire political and financial establishments managed to ignore the housing bubble until it began to burst last year.
The collapse of the bubble is now pushing the economy into a recession. This is the result of both the direct effect of the collapse on the housing market and, more importantly, because of the indirect effect the loss of trillions of dollars of housing wealth has on consumption. Homeowners are rapidly scaling back their consumption after losing much of their life's savings in the last year.
The collapse of the housing bubble has inflicted enormous pain on tens of millions of people, but it is also inflicting pain on Wall Street and the financial sector. The honchos in this sector include many of the richest people in the country. With the collapse of the housing bubble, we are finding out they were far less financially sophisticated than any of us could have imagined. Many banks, brokerage houses and investment funds took highly leveraged bets that assumed the housing bubble would not burst. Now that it has burst, some of the richest people in the country face the risk of a middle-class lifestyle - unless the government comes to the rescue.
This is where things really get painful. Rather than taking this opportunity to tighten the screws, many progressives are standing by the sidelines or actually cheering on plans to bail out the ridiculously rich. The same people - who, on other days, are fighting to raise the income tax rate on the rich or for preserving the estate tax - are just watching as the Fed hands taxpayer dollars to Wall Street, and hoping Congress will come up with tens of billions for buying the bankers' bad mortgage debt.
There is, of course, a cover story - there always is. We have to let the Fed bail out the banks or the financial system would collapse. This would hurt everyone, especially ordinary workers. And the mortgage bailout is supposed to help low- and moderate-income homeowners.
But the cover stories don't hold water. We can keep the banks running without bailing out the incredibly rich people who drove them to ruin. England showed us the way earlier this year with its takeover of Northern Rock, a major bank that got itself in trouble with bad mortgage debt.
We can also help homeowners without bailing out the banks. The rescue proposals currently on the table would have the government buy or guarantee mortgages on homes that are still hugely overpriced. These proposals could give hundreds of billions of dollars to the banks, while providing little help to homeowners. Most would still be paying far more on their mortgage, property taxes and insurance than they would to rent a comparable home. Furthermore, the bailout conditions virtually guarantee they will never have a dime in equity.
As an alternative to bailing out the banks, we can temporarily change the rules on foreclosure to give homeowners the right to rent at the fair market rate. This would provide them with security in their home. More importantly, it would likely create a situation where most homeowners stay in their house as owners, since banks would rather renegotiate mortgage terms than end up as landlords.
The Wall Street boys got themselves in a huge mess through their own greed and stupidity. Now is the time to make sure they enjoy the fruits of their labor. These are the same people who don't think they should have to pay higher taxes so kids can get health care and childcare. There is no reason the rest of us should pay higher taxes so they can keep their mansions in the Hamptons, their private jets and retinue of personal services. Let's leave this one to the market.
By Dean Baker
Progressives usually fight for the interests of those at the middle and bottom at the expense of those on top. However, during this period of unprecedented financial crisis, when the Wall Street rich are begging for the helping hand of the government, most progressives appear to be on the sidelines. Rather than taking advantage of this extraordinary opportunity to reduce inequality and educate the public about how the economy really works, progressive voices have been unusually quiet.
While the basic story on the economic crisis should be well known, it is nonetheless worth repeating. The Federal Reserve Board allowed the growth of an $8 trillion housing bubble ($110,000 of housing bubble wealth for every homeowner) in the years from 1996 to 2006. While this bubble was easily recognizable to competent economists, the entire political and financial establishments managed to ignore the housing bubble until it began to burst last year.
The collapse of the bubble is now pushing the economy into a recession. This is the result of both the direct effect of the collapse on the housing market and, more importantly, because of the indirect effect the loss of trillions of dollars of housing wealth has on consumption. Homeowners are rapidly scaling back their consumption after losing much of their life's savings in the last year.
The collapse of the housing bubble has inflicted enormous pain on tens of millions of people, but it is also inflicting pain on Wall Street and the financial sector. The honchos in this sector include many of the richest people in the country. With the collapse of the housing bubble, we are finding out they were far less financially sophisticated than any of us could have imagined. Many banks, brokerage houses and investment funds took highly leveraged bets that assumed the housing bubble would not burst. Now that it has burst, some of the richest people in the country face the risk of a middle-class lifestyle - unless the government comes to the rescue.
This is where things really get painful. Rather than taking this opportunity to tighten the screws, many progressives are standing by the sidelines or actually cheering on plans to bail out the ridiculously rich. The same people - who, on other days, are fighting to raise the income tax rate on the rich or for preserving the estate tax - are just watching as the Fed hands taxpayer dollars to Wall Street, and hoping Congress will come up with tens of billions for buying the bankers' bad mortgage debt.
There is, of course, a cover story - there always is. We have to let the Fed bail out the banks or the financial system would collapse. This would hurt everyone, especially ordinary workers. And the mortgage bailout is supposed to help low- and moderate-income homeowners.
But the cover stories don't hold water. We can keep the banks running without bailing out the incredibly rich people who drove them to ruin. England showed us the way earlier this year with its takeover of Northern Rock, a major bank that got itself in trouble with bad mortgage debt.
We can also help homeowners without bailing out the banks. The rescue proposals currently on the table would have the government buy or guarantee mortgages on homes that are still hugely overpriced. These proposals could give hundreds of billions of dollars to the banks, while providing little help to homeowners. Most would still be paying far more on their mortgage, property taxes and insurance than they would to rent a comparable home. Furthermore, the bailout conditions virtually guarantee they will never have a dime in equity.
As an alternative to bailing out the banks, we can temporarily change the rules on foreclosure to give homeowners the right to rent at the fair market rate. This would provide them with security in their home. More importantly, it would likely create a situation where most homeowners stay in their house as owners, since banks would rather renegotiate mortgage terms than end up as landlords.
The Wall Street boys got themselves in a huge mess through their own greed and stupidity. Now is the time to make sure they enjoy the fruits of their labor. These are the same people who don't think they should have to pay higher taxes so kids can get health care and childcare. There is no reason the rest of us should pay higher taxes so they can keep their mansions in the Hamptons, their private jets and retinue of personal services. Let's leave this one to the market.
White House Balks at E-Mail Search
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By Jason Leopold
The White House’s chief information officer said the Bush administration should not be compelled to search for millions of e-mails on individual computers and hard drives that may have been lost between 2003 and 2005 because it would be too expensive and require hundreds of hours of work, according to a filing the White House made with a federal court.
The court filing late Friday came in response to an order issued by U.S. Magistrate Judge John Facciola demanding that the White House show cause why it should not be ordered to create and preserve a “forensic copy” of e-mails from individual hard drives.
Facciola entered the show cause order in part because the White House admitted that it did not preserve back-up tapes prior to October 2003, meaning that e-mails may have been lost relating to the administration’s invasion of Iraq in March 2003 and its role in blowing the cover of covert CIA officer Valerie Plame Wilson in July 2003.
Theresa Payton, the chief information officer at the White House Office of Administration, responded that the White House routinely destroyed its hard drives every three years “in order to run updated software, reduce ongoing maintenance, and enhance security assurance. So it’s unlikely that any lost e-mails would be retrieved anyway.
“When workstations are at the end of their lifecycle and retired... under the refresh program, the hard drives are generally sent offsite to another government entity for physical destruction in accordance with Department of Defense guidelines,” Payton said in a sworn affidavit.
“Even if computer workstations used during the relevant time period are identifiable and locatable, making ‘forensic copies’ (as that term is defined by the court) of the workstations that may or may not contain residual data of e-mails would impose a significant burden,” Payton said.
But even putting aside the hundreds of hours of work involved, Payton said, there is no evidence to support allegations made in a lawsuit filed by two watchdog groups that the White House has lost as many as 10 million e-mails, or that the extra searching would do any good.
“Even if some older computer workstations were in use, finding them and copying their hard drives with the hope that the residual data contains relevant e-mail information would create an ‘awfully expensive needle to justify searching a haystack,’” the White House said in a separate filing.
“Because the allegation of missing e-mail from archives is unconfirmed, because the allegation of missing e-mails from back-up tapes is conjectural, and because the computer workstations are unlikely to house significant, if any, relevant material the costs of a forensic copy process would far outweigh any speculative benefits,” the White House said.
The Citizens for Responsibility and Ethics in Washington and George Washington University’s National Security Archive sued the Bush administration last year alleging the White House violated the Presidential Records Act by not archiving e-mails from 2003 to 2005.
The lawsuit followed an internal investigation by officials in Payton’s office who said computer experts could not locate any e-mails from the office of Vice President Dick Cheney between Sept. 30, 2003, and Oct. 6, 2003.
That was the week when the Justice Department launched an investigation into the Plame Wilson leak and set a deadline for Bush administration officials to turn over documents and e-mails containing any reference to Plame Wilson or her husband, former Ambassador Joseph Wilson.
Additionally, Office of Administration staffers said there were at least 400 other days between March 2003 and October 2005 when e-mails could not be located in either Cheney’s office or the Executive Office of the President.
Payton admitted last January that the White House “recycled” its computer back-up tapes until October 2003, making it much more difficult to retrieve e-mails. However, Payton maintains that while e-mails may have been deleted or “recycled,” they can still be recovered.
At a February hearing before the House Oversight and Government Reform Committee, Payton said she felt "very comfortable" that her office would succeed in recovering lost e-mails from "disaster recovery backup tapes." But her office has so far not attempted to do so.
Documents obtained by Rep. Henry Waxman, committee chair, show that Payton’s office advised former White House counsel Harriet Miers in late 2003 or early 2004 about the administration’s failure to archive e-mails.
Miers is said to have immediately informed Special Prosecutor Patrick Fitzgerald, who was investigating the leak of Plame Wilson’s undercover CIA status. Fitzgerald had subpoenaed White House e-mails sent in 2003.
In January 2006, Fitzgerald informed the U.S. District Court in Washington that he "learned that not all e-mail of the Office of the Vice President and the Executive Office of the President for certain time periods in 2003 was preserved through the normal archiving process on the White House computer system."
That document was filed during the discovery phase of the perjury and obstruction of justice trial against former vice presidential staffer I. Lewis "Scooter" Libby.
On Feb. 6, 2006, the White House then turned over to Fitzgerald 250 pages of e-mails that it said it had “discovered.” The White House offered no official explanation concerning the circumstances regarding the sudden reappearance of the e-mails, nor comment on whether Fitzgerald's allegations that the e-mails had not been automatically archived were true.
At the time, a White House spokeswoman would only tell me that staffers had "discovered" the batch of documents during a search.
The belated delivery of documents calls into question the integrity of Fitzgerald’s probe, suggesting that he may not have obtained all the evidence related to White House officials’ role in the leak in a timely fashion.
Fitzgerald obtained Libby’s indictment on five counts of perjury and obstruction of justice in October 2005 and tried Libby in early 2007, winning a conviction on four counts. Libby was sentenced to 30 months in prison but President George W. Bush spared the former White House aide any jail time by issuing a commutation.
Testimony and documents implicated several other Bush administration officials in the leaking of Plame Wilson’s identity – including Bush’s chief political adviser Karl Rove and Vice President Dick Cheney – but Fitzgerald has brought no one else to trial and has refused to publicly discuss his prosecutorial judgments.
It is unclear if the possibility of missing e-mails impaired Fitzgerald’s inquiry. Anne Weismann, chief counsel for CREW, told me that she believes there “are unanswered questions about what the special counsel knew, particularly as to scope of e-mail problem.”
”We wrote Fitzgerald a letter last April … suggesting that he reopen the investigation,” Weismann said in an e-mail to me. “To date, we have heard nothing. We have also written to Attorney General Michael Mukasey requesting that he appoint a special prosecutor to investigate and likewise have heard nothing.”
CREW filed a federal court motion earlier this month asking that Payton be held in civil contempt for knowingly submitting false, misleading and incomplete testimony in an affidavit filed with a federal court on Jan. 15.
In that affidavit, Payton said one employee in the Office of Administration — Steve McDevitt, who worked with Payton from 2002 to 2006 — conducted the internal e-mail probe and that the findings are in dispute. She added that she was unaware whether e-mails were properly archived.
CREW said Payton’s responses in her affidavit are “false and appear designed to mislead the court into believing that both discovery and any additional interim relief are unnecessary.”
By Jason Leopold
The White House’s chief information officer said the Bush administration should not be compelled to search for millions of e-mails on individual computers and hard drives that may have been lost between 2003 and 2005 because it would be too expensive and require hundreds of hours of work, according to a filing the White House made with a federal court.
The court filing late Friday came in response to an order issued by U.S. Magistrate Judge John Facciola demanding that the White House show cause why it should not be ordered to create and preserve a “forensic copy” of e-mails from individual hard drives.
Facciola entered the show cause order in part because the White House admitted that it did not preserve back-up tapes prior to October 2003, meaning that e-mails may have been lost relating to the administration’s invasion of Iraq in March 2003 and its role in blowing the cover of covert CIA officer Valerie Plame Wilson in July 2003.
Theresa Payton, the chief information officer at the White House Office of Administration, responded that the White House routinely destroyed its hard drives every three years “in order to run updated software, reduce ongoing maintenance, and enhance security assurance. So it’s unlikely that any lost e-mails would be retrieved anyway.
“When workstations are at the end of their lifecycle and retired... under the refresh program, the hard drives are generally sent offsite to another government entity for physical destruction in accordance with Department of Defense guidelines,” Payton said in a sworn affidavit.
“Even if computer workstations used during the relevant time period are identifiable and locatable, making ‘forensic copies’ (as that term is defined by the court) of the workstations that may or may not contain residual data of e-mails would impose a significant burden,” Payton said.
But even putting aside the hundreds of hours of work involved, Payton said, there is no evidence to support allegations made in a lawsuit filed by two watchdog groups that the White House has lost as many as 10 million e-mails, or that the extra searching would do any good.
“Even if some older computer workstations were in use, finding them and copying their hard drives with the hope that the residual data contains relevant e-mail information would create an ‘awfully expensive needle to justify searching a haystack,’” the White House said in a separate filing.
“Because the allegation of missing e-mail from archives is unconfirmed, because the allegation of missing e-mails from back-up tapes is conjectural, and because the computer workstations are unlikely to house significant, if any, relevant material the costs of a forensic copy process would far outweigh any speculative benefits,” the White House said.
The Citizens for Responsibility and Ethics in Washington and George Washington University’s National Security Archive sued the Bush administration last year alleging the White House violated the Presidential Records Act by not archiving e-mails from 2003 to 2005.
The lawsuit followed an internal investigation by officials in Payton’s office who said computer experts could not locate any e-mails from the office of Vice President Dick Cheney between Sept. 30, 2003, and Oct. 6, 2003.
That was the week when the Justice Department launched an investigation into the Plame Wilson leak and set a deadline for Bush administration officials to turn over documents and e-mails containing any reference to Plame Wilson or her husband, former Ambassador Joseph Wilson.
Additionally, Office of Administration staffers said there were at least 400 other days between March 2003 and October 2005 when e-mails could not be located in either Cheney’s office or the Executive Office of the President.
Payton admitted last January that the White House “recycled” its computer back-up tapes until October 2003, making it much more difficult to retrieve e-mails. However, Payton maintains that while e-mails may have been deleted or “recycled,” they can still be recovered.
At a February hearing before the House Oversight and Government Reform Committee, Payton said she felt "very comfortable" that her office would succeed in recovering lost e-mails from "disaster recovery backup tapes." But her office has so far not attempted to do so.
Documents obtained by Rep. Henry Waxman, committee chair, show that Payton’s office advised former White House counsel Harriet Miers in late 2003 or early 2004 about the administration’s failure to archive e-mails.
Miers is said to have immediately informed Special Prosecutor Patrick Fitzgerald, who was investigating the leak of Plame Wilson’s undercover CIA status. Fitzgerald had subpoenaed White House e-mails sent in 2003.
In January 2006, Fitzgerald informed the U.S. District Court in Washington that he "learned that not all e-mail of the Office of the Vice President and the Executive Office of the President for certain time periods in 2003 was preserved through the normal archiving process on the White House computer system."
That document was filed during the discovery phase of the perjury and obstruction of justice trial against former vice presidential staffer I. Lewis "Scooter" Libby.
On Feb. 6, 2006, the White House then turned over to Fitzgerald 250 pages of e-mails that it said it had “discovered.” The White House offered no official explanation concerning the circumstances regarding the sudden reappearance of the e-mails, nor comment on whether Fitzgerald's allegations that the e-mails had not been automatically archived were true.
At the time, a White House spokeswoman would only tell me that staffers had "discovered" the batch of documents during a search.
The belated delivery of documents calls into question the integrity of Fitzgerald’s probe, suggesting that he may not have obtained all the evidence related to White House officials’ role in the leak in a timely fashion.
Fitzgerald obtained Libby’s indictment on five counts of perjury and obstruction of justice in October 2005 and tried Libby in early 2007, winning a conviction on four counts. Libby was sentenced to 30 months in prison but President George W. Bush spared the former White House aide any jail time by issuing a commutation.
Testimony and documents implicated several other Bush administration officials in the leaking of Plame Wilson’s identity – including Bush’s chief political adviser Karl Rove and Vice President Dick Cheney – but Fitzgerald has brought no one else to trial and has refused to publicly discuss his prosecutorial judgments.
It is unclear if the possibility of missing e-mails impaired Fitzgerald’s inquiry. Anne Weismann, chief counsel for CREW, told me that she believes there “are unanswered questions about what the special counsel knew, particularly as to scope of e-mail problem.”
”We wrote Fitzgerald a letter last April … suggesting that he reopen the investigation,” Weismann said in an e-mail to me. “To date, we have heard nothing. We have also written to Attorney General Michael Mukasey requesting that he appoint a special prosecutor to investigate and likewise have heard nothing.”
CREW filed a federal court motion earlier this month asking that Payton be held in civil contempt for knowingly submitting false, misleading and incomplete testimony in an affidavit filed with a federal court on Jan. 15.
In that affidavit, Payton said one employee in the Office of Administration — Steve McDevitt, who worked with Payton from 2002 to 2006 — conducted the internal e-mail probe and that the findings are in dispute. She added that she was unaware whether e-mails were properly archived.
CREW said Payton’s responses in her affidavit are “false and appear designed to mislead the court into believing that both discovery and any additional interim relief are unnecessary.”
Manta Air Base Tied to Colombian Raid on FARC Camp
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By Kintto Lucas
Military and diplomatic sources see a link between the Manta air base, operated by the United States in Ecuadorean territory, and this month’s bombing raid by Colombia on a FARC guerrilla camp in Ecuador.
The U.S. air force was granted a 10-year concession in 1999 to use the base, located in the port city of Manta on Ecuador’s northern Pacific coast, in its counter-drug trafficking activities in the region.
A high-level Ecuadorean military officer, who preferred to remain anonymous, told IPS that "a large proportion of senior officers" in Ecuador share "the conviction that the United States was an accomplice in the attack" launched Mar. 1 by the Colombian military on a FARC (Revolutionary Armed Forces of Colombia) camp in Ecuador, near the Colombian border.
FARC’s international spokesman Raúl Reyes and 24 other people were killed in the bombing raid, which prompted Quito to break off diplomatic relations with Colombia, although ties were restored several days later.
"Since Plan Colombia was launched in 2000, a strategic alliance between the United States and Colombia has taken shape, first to combat the insurgents and later to involve neighbouring countries in that war," said the officer. "What is happening today is a consequence of that."
Plan Colombia is a U.S.-financed and supported counterinsurgency and anti-drug strategy carried out by Bogotá.
The information gathered by IPS from military and diplomatic sources indicates that the Manta air base played a role in locating, and carrying out reconnaissance of, the FARC camp in Ecuador.
Ecuadorean Defence Minister Wellington Sandoval said there should be an investigation of whether the Manta air base was used for the attack on the rebel camp in Ecuador. According to the agreement signed by Washington and Quito, it is the Ecuadorean armed forces that should carry out such a probe.
The Manta air base lease clearly stipulates that the base can only be used for counter-narcotics operations.
Sandoval said he cannot provide any information until an investigation has been conducted.
The military source who spoke to IPS said that what should be verified "above all are the flights from the base in the 20 days prior to the bombing, who was on them, the routes they took, and what they were investigating. This data should be complemented by other inquiries and information."
On Mar. 13, Ecuadorean Foreign Minister María Isabel Salvador said she had had "a conversation with (U.S.) Ambassador Linda Jewell who ensured us that the planes (at the base) were not involved in any way" in the bombing of the FARC camp.
But the military source said that "the technology used, first to locate the target, in other words the camp, and later to attack it, was from the United States."
Sandoval declared that "equipment that the Latin American armed forces do not have" was used in the Mar. 1 bombing.
"They dropped around five 'smart bombs'," the kind used by the United States in the First Gulf War (1991), "with impressive precision and a margin of error of just one metre, at night, from planes travelling at high speeds," said the minister.
The military source said that "an attack with smart bombs requires pilots who have experience in such operations, which means U.S. pilots. That’s why I think they did the job and later told the Colombians ‘now go in and find the bodies’, which is when Colombian helicopters and troops showed up" at the site of the raid.
According to the official version of events that the Colombian government gave an Organisation of American States (OAS) fact-finding commission that visited both countries, 10 "conventional" bombs were dropped from five Brazilian-made Super Tucano aircraft and three U.S.-made A-37 planes.
The A-37s dropped bombs guided by GPS (Global Positioning System) and the five Super Tucanos have the technological means to launch bombs at targets with a five-metre margin of error, said the OAS delegation’s report.
But according to the sources who spoke to IPS, the U.S. role in the incident could have been even greater.
The military officer said the bombing raid in Ecuadorean air space was actually led by "U.S. pilots, possibly from DynCorp," a U.S.-based private military contractor that has contracts under Plan Colombia.
The aircraft took off from the Tres Esquinas air base in the southern Colombian department of Caquetá, said the source.
"The planes used to fumigate coca crops or to attack the guerrillas are piloted by serving members of the U.S. military or (former) military men at the service of companies like DynCorp," said the officer.
Ecuadorean President Rafael Correa said on Mar. 15 that his government would not allow "any foreign soldier, whether regular or irregular, to affect the soil of our fatherland. That is why there will be no more foreign bases after 2009."
U.S. usage rights for Manta expire on Nov. 12, 2009.
A committee in the Constituent Assembly that is rewriting the Ecuadorean constitution approved the chapter on territorial sovereignty on Mar. 17.
One of the articles states that "Ecuador is a territory of peace. The establishment of foreign military bases, or foreign installations for military purposes, is not permitted. National military bases cannot be leased to foreign security forces."
In its refusal to renew the air base lease, Ecuador can argue "many causes: direct or indirect participation (by U.S. forces from Manta) in the bombing; negligence for failure to detect the FARC camp with their technology, first of all, and the attack, in second place; and, in case they did detect the camp and the raid, for failing to inform authorities in the partner country, Ecuador," said a diplomatic source who spoke with IPS on condition of anonymity.
Another reason that could be set forth is the direct support that the U.S. Southern Command, under which the U.S. armed forces at the Manta air base operate, has provided the Colombian military.
Admiral James Stavridis, the commander of the Southern Command, told the U.S. Senate Armed Services Committee on Mar. 6 that he was monitoring the movement of Ecuadorean and Venezuelan troops to the Colombian border.
Stavridis said that with continuous U.S. support, Colombia has won "hard-fought successes" in the armed conflict. He added that "this key strategic ally" was making irreversible progress towards peace and against "terrorism."
He also told the Senate Committee that the FARC had been reduced from 17,500 guerrillas in 2002 to around 9,000 today.
In July 2001, retired colonel Fausto Cobo, former director of the Ecuadorean army’s Escuela de Guerra (war collage), had told IPS that "Manta, for the purposes of Plan Colombia," is a "U.S. aircraft carrier, on land."
By April 2001, when work began on the expansion of the Manta air strip, an average of 100 troops were taking part in up to three missions a day in F-3 reconnaissance planes.
A diplomatic source from the United States told Britain’s Financial Times at the time that by October the number would go up by 200, and by 200 more within the following few months.
After the expansion of the air strip, bigger, more sophisticated aircraft began to be used for reconnaissance missions.
Manta is one of the four "forward operating locations" (FOLs), along with Curaçao, Aruba and El Salvador, that make up the U.S. network of counter-narcotics bases in Latin America and the Caribbean.
In August 2006, the Expreso de Guayaquil newspaper reported that Colombian pilots were operating alongside Ecuadorean pilots on flights out of the Manta air base.
The commander of an Airborne Warning and Control System (AWACS) squadron based out of Manta, Rich Boyd, told the Guayaquil newspaper that one of the AWACS aircraft was operated by a Colombian air force officer.
But Boyd said that each country's sensitive and confidential information is protected, because the Colombian officer exits the cockpit when the plane is in Ecuadorean air space, and the Ecuadorean pilot leaves when the plane overflies Colombia.
According to Boyd, three of the U.S. military’s 27 AWACS were at the Manta base. Each one has a price tag of one billion dollars -- nearly double the entire 2005 budget of the Ecuadorean air force.
By Kintto Lucas
Military and diplomatic sources see a link between the Manta air base, operated by the United States in Ecuadorean territory, and this month’s bombing raid by Colombia on a FARC guerrilla camp in Ecuador.
The U.S. air force was granted a 10-year concession in 1999 to use the base, located in the port city of Manta on Ecuador’s northern Pacific coast, in its counter-drug trafficking activities in the region.
A high-level Ecuadorean military officer, who preferred to remain anonymous, told IPS that "a large proportion of senior officers" in Ecuador share "the conviction that the United States was an accomplice in the attack" launched Mar. 1 by the Colombian military on a FARC (Revolutionary Armed Forces of Colombia) camp in Ecuador, near the Colombian border.
FARC’s international spokesman Raúl Reyes and 24 other people were killed in the bombing raid, which prompted Quito to break off diplomatic relations with Colombia, although ties were restored several days later.
"Since Plan Colombia was launched in 2000, a strategic alliance between the United States and Colombia has taken shape, first to combat the insurgents and later to involve neighbouring countries in that war," said the officer. "What is happening today is a consequence of that."
Plan Colombia is a U.S.-financed and supported counterinsurgency and anti-drug strategy carried out by Bogotá.
The information gathered by IPS from military and diplomatic sources indicates that the Manta air base played a role in locating, and carrying out reconnaissance of, the FARC camp in Ecuador.
Ecuadorean Defence Minister Wellington Sandoval said there should be an investigation of whether the Manta air base was used for the attack on the rebel camp in Ecuador. According to the agreement signed by Washington and Quito, it is the Ecuadorean armed forces that should carry out such a probe.
The Manta air base lease clearly stipulates that the base can only be used for counter-narcotics operations.
Sandoval said he cannot provide any information until an investigation has been conducted.
The military source who spoke to IPS said that what should be verified "above all are the flights from the base in the 20 days prior to the bombing, who was on them, the routes they took, and what they were investigating. This data should be complemented by other inquiries and information."
On Mar. 13, Ecuadorean Foreign Minister María Isabel Salvador said she had had "a conversation with (U.S.) Ambassador Linda Jewell who ensured us that the planes (at the base) were not involved in any way" in the bombing of the FARC camp.
But the military source said that "the technology used, first to locate the target, in other words the camp, and later to attack it, was from the United States."
Sandoval declared that "equipment that the Latin American armed forces do not have" was used in the Mar. 1 bombing.
"They dropped around five 'smart bombs'," the kind used by the United States in the First Gulf War (1991), "with impressive precision and a margin of error of just one metre, at night, from planes travelling at high speeds," said the minister.
The military source said that "an attack with smart bombs requires pilots who have experience in such operations, which means U.S. pilots. That’s why I think they did the job and later told the Colombians ‘now go in and find the bodies’, which is when Colombian helicopters and troops showed up" at the site of the raid.
According to the official version of events that the Colombian government gave an Organisation of American States (OAS) fact-finding commission that visited both countries, 10 "conventional" bombs were dropped from five Brazilian-made Super Tucano aircraft and three U.S.-made A-37 planes.
The A-37s dropped bombs guided by GPS (Global Positioning System) and the five Super Tucanos have the technological means to launch bombs at targets with a five-metre margin of error, said the OAS delegation’s report.
But according to the sources who spoke to IPS, the U.S. role in the incident could have been even greater.
The military officer said the bombing raid in Ecuadorean air space was actually led by "U.S. pilots, possibly from DynCorp," a U.S.-based private military contractor that has contracts under Plan Colombia.
The aircraft took off from the Tres Esquinas air base in the southern Colombian department of Caquetá, said the source.
"The planes used to fumigate coca crops or to attack the guerrillas are piloted by serving members of the U.S. military or (former) military men at the service of companies like DynCorp," said the officer.
Ecuadorean President Rafael Correa said on Mar. 15 that his government would not allow "any foreign soldier, whether regular or irregular, to affect the soil of our fatherland. That is why there will be no more foreign bases after 2009."
U.S. usage rights for Manta expire on Nov. 12, 2009.
A committee in the Constituent Assembly that is rewriting the Ecuadorean constitution approved the chapter on territorial sovereignty on Mar. 17.
One of the articles states that "Ecuador is a territory of peace. The establishment of foreign military bases, or foreign installations for military purposes, is not permitted. National military bases cannot be leased to foreign security forces."
In its refusal to renew the air base lease, Ecuador can argue "many causes: direct or indirect participation (by U.S. forces from Manta) in the bombing; negligence for failure to detect the FARC camp with their technology, first of all, and the attack, in second place; and, in case they did detect the camp and the raid, for failing to inform authorities in the partner country, Ecuador," said a diplomatic source who spoke with IPS on condition of anonymity.
Another reason that could be set forth is the direct support that the U.S. Southern Command, under which the U.S. armed forces at the Manta air base operate, has provided the Colombian military.
Admiral James Stavridis, the commander of the Southern Command, told the U.S. Senate Armed Services Committee on Mar. 6 that he was monitoring the movement of Ecuadorean and Venezuelan troops to the Colombian border.
Stavridis said that with continuous U.S. support, Colombia has won "hard-fought successes" in the armed conflict. He added that "this key strategic ally" was making irreversible progress towards peace and against "terrorism."
He also told the Senate Committee that the FARC had been reduced from 17,500 guerrillas in 2002 to around 9,000 today.
In July 2001, retired colonel Fausto Cobo, former director of the Ecuadorean army’s Escuela de Guerra (war collage), had told IPS that "Manta, for the purposes of Plan Colombia," is a "U.S. aircraft carrier, on land."
By April 2001, when work began on the expansion of the Manta air strip, an average of 100 troops were taking part in up to three missions a day in F-3 reconnaissance planes.
A diplomatic source from the United States told Britain’s Financial Times at the time that by October the number would go up by 200, and by 200 more within the following few months.
After the expansion of the air strip, bigger, more sophisticated aircraft began to be used for reconnaissance missions.
Manta is one of the four "forward operating locations" (FOLs), along with Curaçao, Aruba and El Salvador, that make up the U.S. network of counter-narcotics bases in Latin America and the Caribbean.
In August 2006, the Expreso de Guayaquil newspaper reported that Colombian pilots were operating alongside Ecuadorean pilots on flights out of the Manta air base.
The commander of an Airborne Warning and Control System (AWACS) squadron based out of Manta, Rich Boyd, told the Guayaquil newspaper that one of the AWACS aircraft was operated by a Colombian air force officer.
But Boyd said that each country's sensitive and confidential information is protected, because the Colombian officer exits the cockpit when the plane is in Ecuadorean air space, and the Ecuadorean pilot leaves when the plane overflies Colombia.
According to Boyd, three of the U.S. military’s 27 AWACS were at the Manta base. Each one has a price tag of one billion dollars -- nearly double the entire 2005 budget of the Ecuadorean air force.
Torture in Our Own Backyards: the Fight Against Supermax Prisons
Go to Original
By Jessica Pupovac
In supermax prisons, 23 hours a day of solitary confinement is the norm. How did our prison system become so cruel?
Imagine living in an 8-by-12 prison cell, in solitary confinement, for eight years straight. Your entire world consists of a dank, cinder block room with a narrow window only three inches high, opening up to an outdoor cement cage, cynically dubbed, "the yard." If you're lucky, you spend one hour, five days a week in that outdoor cage, where you gaze up through a wire mesh roof and hope for a glimpse of the sun. If you talk back to the guards or act out in any way, you might only venture outside one precious hour per week.
You go eight years without shaking a hand or experiencing any physical human contact. The prison guards bark orders and touch you only while wearing leather gloves, and then it's only to put you in full cuffs and shackles before escorting you to the cold showers, where they watch your every move.
You cannot make phone calls to your friends or family and must "earn" two visits per month, which inevitably take place through a Plexiglass wall. You are kept in full shackles the entire time you visit with your wife and children, and have to strain to hear their voices through speakers that record your every word. With no religious or educational programs to break up the time or elevate your thoughts, it's a daily struggle to keep your mind from unraveling.
This is how Reginald Akeem Berry describes his time in Tamms Correctional Facility, a "Supermax" state prison in southern Illinois, where he was held from March 1998 until July 2006. He now works to draw attention to conditions inside Tamms, where 261 inmates continue to be held in extreme isolation.
Once exclusively employed as a short-term punishment for particularly violent jailhouse infractions, today, 44 states hold "supermax" facilities, or "control units," designed specifically to hold large numbers of inmates in long-term solitary confinement. A concept that spread like wildfire in the 1990s, today an estimated 20,000 prisoners live in these modern-day dungeons, judged to be "unmanageable" by prison officials and moved from other penitentiaries to the nearest supermax.
Life in supermax institutions is grueling. Inmates stay in their cells for at least 23 hours per day, and never so much as lay eyes on another prisoner. While many live under these conditions for five years, others continue, uncertain of how to earn their way out, for ten, 15, or even 20 years.
The effects of such extended periods of isolation on prisoners' physical and mental health, their chances of meaningful rehabilitation, and, ultimately, on the communities to which they will eventually return are coming under increasing fire, from lawyers, human rights advocates and the medical professionals who have treated them. Bolstered by growing concern over the U.S.' sanctioning of torture, and the effect that has on the country's international standing, their calls to action are gaining ground. In 2000, and again in 2006, the United Nations Committee Against Torture condemned the kind of isolation imposed by the U.S. government in federal, state and county-run supermax prisons, calling it "extremely harsh." "The Committee is concerned about the prolonged isolation periods detainees are subjected to," they stated, "the effect such treatment has on their mental health, and that its purpose may be retribution, in which case it would constitute cruel, inhuman or degrading treatment or punishment."
"Sending Someone to a Supermax Is Punishment"
Defense attorney Jean Maclean Snyder, who has represented several Tamms prisoners, says the U.N. declaration is dead-on. "It is suspected that many [Tamms] prisoners have been sent there in retaliation for filing lawsuits about prison policies; because serious mental illnesses cause them to be disruptive; or simply because wardens at other prisons do not like them," she wrote in 2000, shortly after the original declaration was issued. Allan Mills of the Uptown People's Law Office in Chicago, IL thinks that the ambiguity surrounding how and why inmates are sent to supermax facilities constitutes a violation of due process. "Sending someone to a supermax is punishment," Mills told AlterNet, "and before someone gets punished, they have a right to a fair hearing." "Just like if you were to get a traffic ticket, you have a right to say 'I didn't do it' and bring witnesses, and the police would have to come and testify against you," he said. "The same should go for prisoners who are being subjected to this horrendous long-term confinement." Mills claims he has "tracked a pattern of prisoners being sent to Tamms because of them filing grievances or lawsuits and being jailhouse lawyers."
Assistant Illinois Department of Corrections (IDOC) Director Sergio Molina told AlterNet that, "Their behavior is their input," and although he claims the decision to transfer an inmate to Tamms is made on a "case-by-case basis," he wasn't able to expand further on the process.
Reginald Berry says he believes he was sent there for being "influential," among the general prison population. A former five-star leader of Chicago's infamous Vice Lords gang, he says he had the opportunity to turn in the "pistol" in a murder case, in return for a five-year sentence. However, he says, cooperating with the police against a fellow Vice Lord would have been "against the code," - so instead he fought a first-degree murder charge in court and wound up with a 33-year jail sentence.
At first, life in Illinois state penitentiaries -- he was transferred to several over the years - was manageable, since, in his words, "the animals were running the zoo." Through what he describes as a vast web of corruption and incompetence, "the guys who was the beast of the place were being rewarded by the warden," and were granted preferential job placements and access to coveted programs. "Might made right."
Following a series of prison riots and attacks on staff in the early 1990s (neither of which Berry had ever witnessed or been involved in) the Illinois General Assembly decided to construct the Tamms Closed Maximum Security Facility, or "CMAX." With a price tag of $72 million, Tamms CMAX opened its doors on March 10, 1998. The prison is capable of housing up to 500 of the department's "most disruptive, violent and problematic inmates," according to an IDOC brochure. IDOC also claims it costs approximately $60,000 per inmate per year to keep the facility running, a figure over three times higher than the per-inmate annual cost at other IDOC facilities.
Berry says that although he heard supermax rumors swirling throughout the jailhouse, he never imagined that he would end up in one. As he tells it, he hadn't been involved in a violent altercation for years. Nonetheless, "they came back and punished all the guys they had given fringe benefits to, and I had been one of those brothers." Days after the Tamms facility opened, ten police officers in full riot gear came to his cell and escorted him out. One of those guards offered him what would be his last cigarette for the next eight years, before putting him on an IDOC van and sending him off to Tamms.
"Many of These Inmates Have Become Psychotic"
The moment he arrived at Tamms, Berry says, he knew "it was a different world." All his belongings were immediately confiscated, right down to his underwear. He was then cavity searched before being escorted, in full shackles and leg irons, to his cell. "Imagine if you've been smoking 20 years," he says. "Overnight you can't smoke no more, overnight you can't talk to your kids no more." The coffee was gone. Work and educational programs were gone. Human interaction was out of reach. Guards barked orders and harassed him.
After about a month of sitting in his cell, he began to hear other inmates' mental health slipping. "You get these guys and they don't know how to acclimate so they start cutting themselves up," he recalled, adding that some would go so far as "taking a pen and sticking it all the way up into their penis," or even worse, attempting suicide.
One expert on the effects of solitary confinement, Dr. Terry Kupers, who consults prison agencies on mental health services, says it is not uncommon for "psychiatric symptoms [to] emerge in previously healthy prisoners ... in this context of near-total isolation and idleness." Psychiatrist and Harvard Medical School professor Dr. Stuart Grassian concurs. In 2005 he told the Commission on Safety and Abuse in America's Prisons that he had evaluated of "scores of inmates" who "psychiatrically deteriorated during the course of their confinement in solitary." "Many of these inmates," he said. "have become psychotic, and many have engaged in self-injurious and self-mutilatory behavior."
Annibal Santiago, who has been incarcerated at Tamms since 1998, describes how it feels from the inside: "The mentally ill prisoners drive the normal prisoners crazy by screaming, crying, yelling into the pod at all hours of the day and night for days non-stop, by banging on toilets, doors, walls, and/or by shaking or kicking the doors so hard that it sounds like rumbling thunder, flooding the wing with toilet water, and by throwing feces at other prisoners or inserting feces into the air vents so that the whole wing receives a dose of the smell for months." "The constant bombardment of unrelenting stress takes its toll like a flurry of well-placed punches on a tired boxer's head," he wrote in a survey compiled by Tamms Year Ten Campaign, and activist group working to shut down the facility.
The Innocent Victims
Berry says that when he was first sentenced, he told his wife, Denise, that he would understand if he had to let her go. "I told her, you didn't commit this crime, you had no part of it and I love you enough not to punish you with the hardships that's to come," he recounted. But she didn't. When he was transferred to Tamms, six hours south of Chicago, she moved the family to nearby Springfield so that they could visit as often as possible. Since the Illinois General Assembly approved funding for Tamms with IDOC's claim that it would serve as nothing more than a temporary, one-year-long "shock treatment" for problem inmates, Mrs. Berry thought it would be temporary move. However, two years later, when it became clear that IDOC had no intention of transferring Berry in the foreseeable future, the family moved back to Chicago. Denise says she wasn't prepared for how difficult it would be to see her husband deteriorate so rapidly at Tamms, after having spent ten years in the general prison population. It was particularly hard for his teenage son, who watched as his father grew emaciated from a meager diet and lack of exercise and saw dark circles form under his eyes from lack of sunlight. "What I had a problem with, being an inmate's wife," Denise says, "was how they degraded the inmates." She described her husband being shackled and forced to sit on a small cement stool for the duration of their visits. When officers would deny him a trip to the restroom, encouraging him to instead prematurely end their visit, she says it made her feel like an accomplice to his suffering.
Berry says one thing that kept him going was keeping his family at the forefront of his mind. It bothered him that Tamms prisoners were only allowed to keep 15 pictures in their cells. "Every time my wife sent me pictures, she'd send me sets of 24, and I'd say, 'ok, I got to decide right here which ones I want,' because if you get caught with more than that they can give you a ticket and send you back down to seg [disciplinary segregation, a unit in which inmates have only one shower and one yard visit per week]." Inmates remain in 'seg' for a minimum of 90 days and are not allowed visits for the duration. Once, says Berry, in what would be a devastating error, he tried to mail a picture to his son rather than throw it away. Because in the photo his son's hat was tilted to one side, the officers gave Berry a disciplinary ticket, allegedly for participating in gang-related activity. "My heart dropped to my knees," he says, "I told them, 'ya'll let this picture in here!'"
The violation earned him a ticket to "seg" for six months -- months that were tacked onto his sentence, which had been reduced for "good time." The decision meant that Berry's sentence would effectively be extended, forcing him to miss his youngest son's college graduation. "I was thinking, 'You missed the eighth grade graduation, you missed the high school graduation, you've got to make this college graduation," Berry recalls. According to Denise, prison officials told her that if she could get proof that the people in the picture -- Berry's brother, Michael, his oldest son, Reggie Jr, and Willie Ware Jr., his nephew -- were not affiliated with gangs, they would reconsider his punishment. "I had to obtain their birth certificates," she says. Denise went to 28th Ward Representative Anazette Collins's office, as did the three men, with their IDs. Their efforts proved futile. In the end, she says, "all this was compiled and sent to Tamms and they did nothing."
Berry's son, Joe, graduated in May of 2006. Berry got home four months later. "I missed my son's graduation," he said, "and it crushed me."
Long-Term Effects
A 2007 Federal Bureau of Prisons (BoP) report lists family ties as integral to rehabilitation and successful re-entry into the general community. However, for many Tamms inmates, the lack of phone access, a prohibitive visitation process, and the distance from Chicago, where two-thirds of Tamms inmates are from, makes it nearly impossible to maintain those ties. The scheduling and approval process at Tamms requires weeks of planning and multiple rounds of paperwork. If a visitor arrives late for their appointment, they are forced to begin the process all over again. With no public transportation near the site, the process become more than some people can handle - or realistically afford.
The BoP also cites access to educational and vocational programs - especially for minority populations - as another key element in prisoner rehabilitation. Yet no such opportunities exist in supermax prisons, other than upper-level, self-guided study for the few inmates who have "earned" it.
According to a March 2008 study published in Prisons Journal, "the rapid expansion of the supermax has occurred despite no empirical evidence substantiating its effectiveness or value." Yet Tamms is just one portion of the billions of dollars that have been invested in supermax prisons. IDOC officials confirmed that they do not collect separate recidivism [or return] statistics for Tamms prisoners - an alarming admission for prisoners, their families, and the broader community that many critics say points to a massive cover-up surrounding the human cost of supermax facilities.
As Paul Beachamp, a Tamms prisoner since 2002, puts it, "What happens when you lock up a dog in a cage for years at a time and constantly harass the dog and treat it bad while it's in the cage? Do you actually think that dog will act right once you let it out?" Sen. Tom Coburn (R-OK), Chair of the Senate Judiciary Subcommittee on Corrections and Rehabilitation, issued a similar warning before a Senate hearing in 2006. "The experiences inmates have in prison - whether violent or redemptive - do not stay within prison walls, but spill over into the rest of society," he said. "Federal, state, and local governments must address the problems faced by their respective institutions and develop tangible and attainable solutions."
Meanwhile, a range of alternative responses have yet to be explored. A 2006 national survey of 601 prison wardens, funded by the U.S. Department of Justice and administered by the Urban League, showed 62.5% of wardens agreeing or strongly agreeing that "staff training" would be an "effective alternative to supermax prisons." It was the number one choice selected in the survey. Other popular alternatives, in order of preference, were to "use segregation cells in each prison facility," "provide targeted rehabilitative services," and "provide opportunities for spiritual development."
Prison activists across the country are working to shed light on this. Enlisting the support of lawmakers and lawyers who share their concern over the treatment of supermax prisoners - and the rationale behind it - they are fighting for legal precedents that would bring more services to supermax prisons, grant prisoners more mobility and opportunity and, ultimately, shut the facilities down. The Tamms Year Ten Campaign is one such coalition; it recently persuaded the Illinois House of Representatives to hold a hearing, scheduled for April 28th, to consider arguments for and against the effectiveness and legality of Tamms.
Reginald Berry is part of that movement in Chicago, organized under the banner of the Tamms Ten Year campaign, which works to draw attention to the 88 prisoners who have been at Tamms since the day it opened its doors. Today, in addition to raising awareness of conditions inside supermax prisons, he's also working to cut off the "school-to-prisons pipeline" in his community by sharing his experiences in Tamms with Chicago teenagers, through an organization he founded, "Saving Our Sons."
Berry's work is one of the reasons he counts himself among the lucky ones. After spending eight years in a facility where he was told he would have to "relinquish everything, even your personality," Berry has done more than survive; he has thrived, and he is fighting back. Within the current debate over state-sanctioned torture abroad, his voice is an important reminder of the cruel, unusual, and too-often ignored contradictions of our own criminal justice system.
By Jessica Pupovac
In supermax prisons, 23 hours a day of solitary confinement is the norm. How did our prison system become so cruel?
Imagine living in an 8-by-12 prison cell, in solitary confinement, for eight years straight. Your entire world consists of a dank, cinder block room with a narrow window only three inches high, opening up to an outdoor cement cage, cynically dubbed, "the yard." If you're lucky, you spend one hour, five days a week in that outdoor cage, where you gaze up through a wire mesh roof and hope for a glimpse of the sun. If you talk back to the guards or act out in any way, you might only venture outside one precious hour per week.
You go eight years without shaking a hand or experiencing any physical human contact. The prison guards bark orders and touch you only while wearing leather gloves, and then it's only to put you in full cuffs and shackles before escorting you to the cold showers, where they watch your every move.
You cannot make phone calls to your friends or family and must "earn" two visits per month, which inevitably take place through a Plexiglass wall. You are kept in full shackles the entire time you visit with your wife and children, and have to strain to hear their voices through speakers that record your every word. With no religious or educational programs to break up the time or elevate your thoughts, it's a daily struggle to keep your mind from unraveling.
This is how Reginald Akeem Berry describes his time in Tamms Correctional Facility, a "Supermax" state prison in southern Illinois, where he was held from March 1998 until July 2006. He now works to draw attention to conditions inside Tamms, where 261 inmates continue to be held in extreme isolation.
Once exclusively employed as a short-term punishment for particularly violent jailhouse infractions, today, 44 states hold "supermax" facilities, or "control units," designed specifically to hold large numbers of inmates in long-term solitary confinement. A concept that spread like wildfire in the 1990s, today an estimated 20,000 prisoners live in these modern-day dungeons, judged to be "unmanageable" by prison officials and moved from other penitentiaries to the nearest supermax.
Life in supermax institutions is grueling. Inmates stay in their cells for at least 23 hours per day, and never so much as lay eyes on another prisoner. While many live under these conditions for five years, others continue, uncertain of how to earn their way out, for ten, 15, or even 20 years.
The effects of such extended periods of isolation on prisoners' physical and mental health, their chances of meaningful rehabilitation, and, ultimately, on the communities to which they will eventually return are coming under increasing fire, from lawyers, human rights advocates and the medical professionals who have treated them. Bolstered by growing concern over the U.S.' sanctioning of torture, and the effect that has on the country's international standing, their calls to action are gaining ground. In 2000, and again in 2006, the United Nations Committee Against Torture condemned the kind of isolation imposed by the U.S. government in federal, state and county-run supermax prisons, calling it "extremely harsh." "The Committee is concerned about the prolonged isolation periods detainees are subjected to," they stated, "the effect such treatment has on their mental health, and that its purpose may be retribution, in which case it would constitute cruel, inhuman or degrading treatment or punishment."
"Sending Someone to a Supermax Is Punishment"
Defense attorney Jean Maclean Snyder, who has represented several Tamms prisoners, says the U.N. declaration is dead-on. "It is suspected that many [Tamms] prisoners have been sent there in retaliation for filing lawsuits about prison policies; because serious mental illnesses cause them to be disruptive; or simply because wardens at other prisons do not like them," she wrote in 2000, shortly after the original declaration was issued. Allan Mills of the Uptown People's Law Office in Chicago, IL thinks that the ambiguity surrounding how and why inmates are sent to supermax facilities constitutes a violation of due process. "Sending someone to a supermax is punishment," Mills told AlterNet, "and before someone gets punished, they have a right to a fair hearing." "Just like if you were to get a traffic ticket, you have a right to say 'I didn't do it' and bring witnesses, and the police would have to come and testify against you," he said. "The same should go for prisoners who are being subjected to this horrendous long-term confinement." Mills claims he has "tracked a pattern of prisoners being sent to Tamms because of them filing grievances or lawsuits and being jailhouse lawyers."
Assistant Illinois Department of Corrections (IDOC) Director Sergio Molina told AlterNet that, "Their behavior is their input," and although he claims the decision to transfer an inmate to Tamms is made on a "case-by-case basis," he wasn't able to expand further on the process.
Reginald Berry says he believes he was sent there for being "influential," among the general prison population. A former five-star leader of Chicago's infamous Vice Lords gang, he says he had the opportunity to turn in the "pistol" in a murder case, in return for a five-year sentence. However, he says, cooperating with the police against a fellow Vice Lord would have been "against the code," - so instead he fought a first-degree murder charge in court and wound up with a 33-year jail sentence.
At first, life in Illinois state penitentiaries -- he was transferred to several over the years - was manageable, since, in his words, "the animals were running the zoo." Through what he describes as a vast web of corruption and incompetence, "the guys who was the beast of the place were being rewarded by the warden," and were granted preferential job placements and access to coveted programs. "Might made right."
Following a series of prison riots and attacks on staff in the early 1990s (neither of which Berry had ever witnessed or been involved in) the Illinois General Assembly decided to construct the Tamms Closed Maximum Security Facility, or "CMAX." With a price tag of $72 million, Tamms CMAX opened its doors on March 10, 1998. The prison is capable of housing up to 500 of the department's "most disruptive, violent and problematic inmates," according to an IDOC brochure. IDOC also claims it costs approximately $60,000 per inmate per year to keep the facility running, a figure over three times higher than the per-inmate annual cost at other IDOC facilities.
Berry says that although he heard supermax rumors swirling throughout the jailhouse, he never imagined that he would end up in one. As he tells it, he hadn't been involved in a violent altercation for years. Nonetheless, "they came back and punished all the guys they had given fringe benefits to, and I had been one of those brothers." Days after the Tamms facility opened, ten police officers in full riot gear came to his cell and escorted him out. One of those guards offered him what would be his last cigarette for the next eight years, before putting him on an IDOC van and sending him off to Tamms.
"Many of These Inmates Have Become Psychotic"
The moment he arrived at Tamms, Berry says, he knew "it was a different world." All his belongings were immediately confiscated, right down to his underwear. He was then cavity searched before being escorted, in full shackles and leg irons, to his cell. "Imagine if you've been smoking 20 years," he says. "Overnight you can't smoke no more, overnight you can't talk to your kids no more." The coffee was gone. Work and educational programs were gone. Human interaction was out of reach. Guards barked orders and harassed him.
After about a month of sitting in his cell, he began to hear other inmates' mental health slipping. "You get these guys and they don't know how to acclimate so they start cutting themselves up," he recalled, adding that some would go so far as "taking a pen and sticking it all the way up into their penis," or even worse, attempting suicide.
One expert on the effects of solitary confinement, Dr. Terry Kupers, who consults prison agencies on mental health services, says it is not uncommon for "psychiatric symptoms [to] emerge in previously healthy prisoners ... in this context of near-total isolation and idleness." Psychiatrist and Harvard Medical School professor Dr. Stuart Grassian concurs. In 2005 he told the Commission on Safety and Abuse in America's Prisons that he had evaluated of "scores of inmates" who "psychiatrically deteriorated during the course of their confinement in solitary." "Many of these inmates," he said. "have become psychotic, and many have engaged in self-injurious and self-mutilatory behavior."
Annibal Santiago, who has been incarcerated at Tamms since 1998, describes how it feels from the inside: "The mentally ill prisoners drive the normal prisoners crazy by screaming, crying, yelling into the pod at all hours of the day and night for days non-stop, by banging on toilets, doors, walls, and/or by shaking or kicking the doors so hard that it sounds like rumbling thunder, flooding the wing with toilet water, and by throwing feces at other prisoners or inserting feces into the air vents so that the whole wing receives a dose of the smell for months." "The constant bombardment of unrelenting stress takes its toll like a flurry of well-placed punches on a tired boxer's head," he wrote in a survey compiled by Tamms Year Ten Campaign, and activist group working to shut down the facility.
The Innocent Victims
Berry says that when he was first sentenced, he told his wife, Denise, that he would understand if he had to let her go. "I told her, you didn't commit this crime, you had no part of it and I love you enough not to punish you with the hardships that's to come," he recounted. But she didn't. When he was transferred to Tamms, six hours south of Chicago, she moved the family to nearby Springfield so that they could visit as often as possible. Since the Illinois General Assembly approved funding for Tamms with IDOC's claim that it would serve as nothing more than a temporary, one-year-long "shock treatment" for problem inmates, Mrs. Berry thought it would be temporary move. However, two years later, when it became clear that IDOC had no intention of transferring Berry in the foreseeable future, the family moved back to Chicago. Denise says she wasn't prepared for how difficult it would be to see her husband deteriorate so rapidly at Tamms, after having spent ten years in the general prison population. It was particularly hard for his teenage son, who watched as his father grew emaciated from a meager diet and lack of exercise and saw dark circles form under his eyes from lack of sunlight. "What I had a problem with, being an inmate's wife," Denise says, "was how they degraded the inmates." She described her husband being shackled and forced to sit on a small cement stool for the duration of their visits. When officers would deny him a trip to the restroom, encouraging him to instead prematurely end their visit, she says it made her feel like an accomplice to his suffering.
Berry says one thing that kept him going was keeping his family at the forefront of his mind. It bothered him that Tamms prisoners were only allowed to keep 15 pictures in their cells. "Every time my wife sent me pictures, she'd send me sets of 24, and I'd say, 'ok, I got to decide right here which ones I want,' because if you get caught with more than that they can give you a ticket and send you back down to seg [disciplinary segregation, a unit in which inmates have only one shower and one yard visit per week]." Inmates remain in 'seg' for a minimum of 90 days and are not allowed visits for the duration. Once, says Berry, in what would be a devastating error, he tried to mail a picture to his son rather than throw it away. Because in the photo his son's hat was tilted to one side, the officers gave Berry a disciplinary ticket, allegedly for participating in gang-related activity. "My heart dropped to my knees," he says, "I told them, 'ya'll let this picture in here!'"
The violation earned him a ticket to "seg" for six months -- months that were tacked onto his sentence, which had been reduced for "good time." The decision meant that Berry's sentence would effectively be extended, forcing him to miss his youngest son's college graduation. "I was thinking, 'You missed the eighth grade graduation, you missed the high school graduation, you've got to make this college graduation," Berry recalls. According to Denise, prison officials told her that if she could get proof that the people in the picture -- Berry's brother, Michael, his oldest son, Reggie Jr, and Willie Ware Jr., his nephew -- were not affiliated with gangs, they would reconsider his punishment. "I had to obtain their birth certificates," she says. Denise went to 28th Ward Representative Anazette Collins's office, as did the three men, with their IDs. Their efforts proved futile. In the end, she says, "all this was compiled and sent to Tamms and they did nothing."
Berry's son, Joe, graduated in May of 2006. Berry got home four months later. "I missed my son's graduation," he said, "and it crushed me."
Long-Term Effects
A 2007 Federal Bureau of Prisons (BoP) report lists family ties as integral to rehabilitation and successful re-entry into the general community. However, for many Tamms inmates, the lack of phone access, a prohibitive visitation process, and the distance from Chicago, where two-thirds of Tamms inmates are from, makes it nearly impossible to maintain those ties. The scheduling and approval process at Tamms requires weeks of planning and multiple rounds of paperwork. If a visitor arrives late for their appointment, they are forced to begin the process all over again. With no public transportation near the site, the process become more than some people can handle - or realistically afford.
The BoP also cites access to educational and vocational programs - especially for minority populations - as another key element in prisoner rehabilitation. Yet no such opportunities exist in supermax prisons, other than upper-level, self-guided study for the few inmates who have "earned" it.
According to a March 2008 study published in Prisons Journal, "the rapid expansion of the supermax has occurred despite no empirical evidence substantiating its effectiveness or value." Yet Tamms is just one portion of the billions of dollars that have been invested in supermax prisons. IDOC officials confirmed that they do not collect separate recidivism [or return] statistics for Tamms prisoners - an alarming admission for prisoners, their families, and the broader community that many critics say points to a massive cover-up surrounding the human cost of supermax facilities.
As Paul Beachamp, a Tamms prisoner since 2002, puts it, "What happens when you lock up a dog in a cage for years at a time and constantly harass the dog and treat it bad while it's in the cage? Do you actually think that dog will act right once you let it out?" Sen. Tom Coburn (R-OK), Chair of the Senate Judiciary Subcommittee on Corrections and Rehabilitation, issued a similar warning before a Senate hearing in 2006. "The experiences inmates have in prison - whether violent or redemptive - do not stay within prison walls, but spill over into the rest of society," he said. "Federal, state, and local governments must address the problems faced by their respective institutions and develop tangible and attainable solutions."
Meanwhile, a range of alternative responses have yet to be explored. A 2006 national survey of 601 prison wardens, funded by the U.S. Department of Justice and administered by the Urban League, showed 62.5% of wardens agreeing or strongly agreeing that "staff training" would be an "effective alternative to supermax prisons." It was the number one choice selected in the survey. Other popular alternatives, in order of preference, were to "use segregation cells in each prison facility," "provide targeted rehabilitative services," and "provide opportunities for spiritual development."
Prison activists across the country are working to shed light on this. Enlisting the support of lawmakers and lawyers who share their concern over the treatment of supermax prisoners - and the rationale behind it - they are fighting for legal precedents that would bring more services to supermax prisons, grant prisoners more mobility and opportunity and, ultimately, shut the facilities down. The Tamms Year Ten Campaign is one such coalition; it recently persuaded the Illinois House of Representatives to hold a hearing, scheduled for April 28th, to consider arguments for and against the effectiveness and legality of Tamms.
Reginald Berry is part of that movement in Chicago, organized under the banner of the Tamms Ten Year campaign, which works to draw attention to the 88 prisoners who have been at Tamms since the day it opened its doors. Today, in addition to raising awareness of conditions inside supermax prisons, he's also working to cut off the "school-to-prisons pipeline" in his community by sharing his experiences in Tamms with Chicago teenagers, through an organization he founded, "Saving Our Sons."
Berry's work is one of the reasons he counts himself among the lucky ones. After spending eight years in a facility where he was told he would have to "relinquish everything, even your personality," Berry has done more than survive; he has thrived, and he is fighting back. Within the current debate over state-sanctioned torture abroad, his voice is an important reminder of the cruel, unusual, and too-often ignored contradictions of our own criminal justice system.
For Wounded Veterans and Their Families, a Journey Without Maps
Go to Original
By Lawrence Downes
How much more can this country keep demanding of Justin Bunce, Daniel Verbeke and Michael McMichael?
The men - a marine, a sailor and a National Guardsman - went to Iraq to fight as ordered, served honorably and suffered grave injuries. When they came home another struggle began, to find the care to make them whole again.
At a recent hearing in Washington before the Senate Veterans' Affairs Committee, the men's families told anguished tales of trips through bureaucratic hell in the transition between the Defense Department and the Department of Veterans Affairs. That terrain is notorious for its paperwork mountains and tripwires of red tape, but especially treacherous for those with traumatic brain injuries, the signature affliction of this five-year-old war.
Mr. Bunce lost an eye in a roadside bomb blast that also thrust shrapnel into his frontal lobe. His father, Peter, said his care was so "stovepiped," with nobody knowing what anyone else was doing, that doctors working on his head ignored his broken leg. Technicians nearly did an M.R.I. on his brain, not realizing - because scans had not been done - the danger from the metal in his skull. Nobody tried to coordinate his many medications.
Time and again his parents had to cross the country looking for the right therapies and treatment. Whatever expertise they found they stumbled on; there was no one but them to manage his case. The V.A. relied on the brain-damaged young corporal to evaluate his own mental state, and once sent him a letter threatening to cut off benefits because he could not manage his affairs.
Mr. Verbeke's injuries, in a shipboard accident, were catastrophic. He cannot speak or control his limbs, though he can laugh and smile. His father, Robert, told of years of battling with the V.A. over treatment, tests, prescriptions and plans for therapy and assistance at home. "They can't plan or execute," he said. "The only logical conclusion is that they just don't care."
The bomb blasts that crushed Mr. McMichael's vertebrae and damaged his brain did not take his life, at least not all at once. When he came home he seemed intact, but it soon became clear that his psyche was in shreds. His behavior put him in constant danger of losing his independence, his composure and dignity, his home, his family.
His wife, Jackie, has refused to let that happen. As a National Guard spouse not immersed in military life, she had to rely on doggedness and patience and large measures of self-tutoring. It took her a year and a half, on her own, to assemble a support network for her husband.
That forced self-reliance is the most difficult and baffling part of these veterans' struggles. Had they lost arms or legs, the process would have been much easier. But the quest for care for psychic injuries takes place on a landscape without maps. All three families said that doctors and therapists were constantly handing out business cards, friendly advice and vague offers of help, but that it was nearly impossible to find firm guidance and quick, flexible, responsive care.
At the hearing, representatives of the Pentagon and V.A. played to type, laying down a bewildering fog of acronyms and promises. Their central point was that things were moving now, that the two departments were "in the process of implementing more than 400 recommendations of five major studies."
One involved hiring eight "recovery coordinators" to oversee care for 46 people. That's a droplet of care in an ocean of need: about 3,000 veterans have sustained traumatic injuries, by some rough estimates, and untold thousands of others are afflicted by post-traumatic stress disorder.
The U.S. Naval Institute reported last month on the staggering immensity of paperwork that veterans confront. Defense Department records are on paper and often incomplete; the V.A.'s are electronic. Service members have to carry records between departments, never knowing what might be missing.
The three families in this article were unusually, perhaps stunningly, well equipped to overcome those hurdles. Robert Verbeke is a corporate executive. So is Peter Bunce, who worked at the Pentagon as the Air Force's liaison to the House of Representatives. His wife, Patty, is an occupational therapist. Jackie McMichael has a master's degree in counseling, and practically grew up at the V.A. hospital in Durham, N.C., where her mother worked.
As Ms. McMichael testified, Michael sat behind her, his back straight, hands gripping a cane and shaking so hard they looked as if they were plugged into something. Peace has not arrived for him, and may not come anytime soon.
He is lucky in many ways: he has two young children and a wife who loves him and has sacrificed so much to travel the bureaucratic labyrinth for him. It is more than anyone could ask, but far less than any wounded soldier deserves.
"I am educated, tenacious and resourceful," Ms. McMichael said of her work as a self-taught case manager. "And I was completely lost."
By Lawrence Downes
How much more can this country keep demanding of Justin Bunce, Daniel Verbeke and Michael McMichael?
The men - a marine, a sailor and a National Guardsman - went to Iraq to fight as ordered, served honorably and suffered grave injuries. When they came home another struggle began, to find the care to make them whole again.
At a recent hearing in Washington before the Senate Veterans' Affairs Committee, the men's families told anguished tales of trips through bureaucratic hell in the transition between the Defense Department and the Department of Veterans Affairs. That terrain is notorious for its paperwork mountains and tripwires of red tape, but especially treacherous for those with traumatic brain injuries, the signature affliction of this five-year-old war.
Mr. Bunce lost an eye in a roadside bomb blast that also thrust shrapnel into his frontal lobe. His father, Peter, said his care was so "stovepiped," with nobody knowing what anyone else was doing, that doctors working on his head ignored his broken leg. Technicians nearly did an M.R.I. on his brain, not realizing - because scans had not been done - the danger from the metal in his skull. Nobody tried to coordinate his many medications.
Time and again his parents had to cross the country looking for the right therapies and treatment. Whatever expertise they found they stumbled on; there was no one but them to manage his case. The V.A. relied on the brain-damaged young corporal to evaluate his own mental state, and once sent him a letter threatening to cut off benefits because he could not manage his affairs.
Mr. Verbeke's injuries, in a shipboard accident, were catastrophic. He cannot speak or control his limbs, though he can laugh and smile. His father, Robert, told of years of battling with the V.A. over treatment, tests, prescriptions and plans for therapy and assistance at home. "They can't plan or execute," he said. "The only logical conclusion is that they just don't care."
The bomb blasts that crushed Mr. McMichael's vertebrae and damaged his brain did not take his life, at least not all at once. When he came home he seemed intact, but it soon became clear that his psyche was in shreds. His behavior put him in constant danger of losing his independence, his composure and dignity, his home, his family.
His wife, Jackie, has refused to let that happen. As a National Guard spouse not immersed in military life, she had to rely on doggedness and patience and large measures of self-tutoring. It took her a year and a half, on her own, to assemble a support network for her husband.
That forced self-reliance is the most difficult and baffling part of these veterans' struggles. Had they lost arms or legs, the process would have been much easier. But the quest for care for psychic injuries takes place on a landscape without maps. All three families said that doctors and therapists were constantly handing out business cards, friendly advice and vague offers of help, but that it was nearly impossible to find firm guidance and quick, flexible, responsive care.
At the hearing, representatives of the Pentagon and V.A. played to type, laying down a bewildering fog of acronyms and promises. Their central point was that things were moving now, that the two departments were "in the process of implementing more than 400 recommendations of five major studies."
One involved hiring eight "recovery coordinators" to oversee care for 46 people. That's a droplet of care in an ocean of need: about 3,000 veterans have sustained traumatic injuries, by some rough estimates, and untold thousands of others are afflicted by post-traumatic stress disorder.
The U.S. Naval Institute reported last month on the staggering immensity of paperwork that veterans confront. Defense Department records are on paper and often incomplete; the V.A.'s are electronic. Service members have to carry records between departments, never knowing what might be missing.
The three families in this article were unusually, perhaps stunningly, well equipped to overcome those hurdles. Robert Verbeke is a corporate executive. So is Peter Bunce, who worked at the Pentagon as the Air Force's liaison to the House of Representatives. His wife, Patty, is an occupational therapist. Jackie McMichael has a master's degree in counseling, and practically grew up at the V.A. hospital in Durham, N.C., where her mother worked.
As Ms. McMichael testified, Michael sat behind her, his back straight, hands gripping a cane and shaking so hard they looked as if they were plugged into something. Peace has not arrived for him, and may not come anytime soon.
He is lucky in many ways: he has two young children and a wife who loves him and has sacrificed so much to travel the bureaucratic labyrinth for him. It is more than anyone could ask, but far less than any wounded soldier deserves.
"I am educated, tenacious and resourceful," Ms. McMichael said of her work as a self-taught case manager. "And I was completely lost."
Vermont Argues Iraq War Is "Mission Expired"
Go to Original
By Terry J. Allen
Vermont legislators are demanding that all of its National Guard troops be sent home from Iraq.
While Congress runs out the clock on President Bush's Iraq War, some Vermont legislators hope to spark a state-by-state movement to quickly withdraw National Guard troops and stanch the flow of blood and treasure.
On Jan. 30, state House members, soon followed by state senators, introduced legislation that called on Vermont's Republican Gov. Jim Douglas to take "all necessary steps" to bring home, as quickly as possible, all members of the Vermont National Guard serving in Iraq.
Rather than arguing whether launching the war was legal or even just, supporters of the bill tacitly concede that Congress' 2002 Authorization to Use Military Force gave Bush the authority to invade Iraq based on two-and only two-criteria: "(1) defend the national security of the United States against the continuing threat posed by Iraq; and (2) enforce all relevant United Nations Security Council resolutions regarding Iraq."
But today, Saddam Hussein and the specter of weapons of mass destruction are both dead; there is no national security threat; and the U.N. resolutions are no longer relevant, the bill's supporters say.
"That very specific mission does not exist today," says state Rep. Michael Fisher (D-Lincoln), who introduced the House bill. And when the mission expired, so too did any legal or constitutional basis for the war or the involvement of the Vermont National Guard, the bill states.
"The president no longer has the authorization to command our Vermont National Guard units," says Fisher.
"It's bait and switch," says constitutional legal scholar Peter Teachout, about the shifting mission rationales. "If they want troops there until the last suicide bomber has blown himself to kingdom come, they need to be specific."
If the Democratic-controlled Vermont legislature passes the bill, the governor would have to sign it. The legislation would then have to survive a court challenge. A veto seems likely as Gov. Douglas is a supporter of Sen. John McCain (R-Ariz.). As for a lawsuit, "there is no court in the country that would issue an order requiring withdrawal of troops mid-deployment," says Teachout.
But there are legal precedents, albeit unsuccessful ones, for governors resisting orders to deploy their state's Guard troops. In 1986, then-Gov. Madeleine Kunin joined a five-state effort to stop the Reagan administration from sending Vermont's Army National Guard to Honduras. In 1990, the U.S. Supreme Court ruled in Perpich v. Department of Defense that governors cannot block a call-up of the National Guard for service overseas. That precedent was limited because, unlike the current challenge, it did not rest on the illegality of the war, some Vermont Democrats argue.
Despite its slim prospects, Fisher insists the bill is more than symbolic: "It may cause a ripple that develops into a larger wave that helps clarify that states do have a role in controlling their National Guard troops, especially when a war effort is illegal."
"If other states join in, it might light a fire under Congress," says Teachout.
Already, legislators in Maine, Maryland, Minnesota, New Hampshire, Pennsylvania, Rhode Island and Wisconsin are exploring ways to stoke the flame.
While both sides talk mainly about lives and national security, money circles the Vermont debate. State Rep. Patricia O'Donnell (R-Vernon) points out that if Vermont withdrew the Guards, Washington might withdraw the $3 million it contributes to maintaining Vermont's units.
Democrats counter that states are already bearing much of the burden of budgets cuts necessitated by the pricey occupation. At a January press conference, House Speaker Gaye Symington (D-Jericho) said the war in Iraq has had a heavy impact on Vermont and has led to financial cuts in Medicaid and other areas.
The cost also comes in blood. Vermont has one of the highest per capita death rates in Iraq.
The state has tried various strategies to oppose the Iraq War. In February 2007, the legislature approved a non-binding resolution to bring home all the troops. And on March 4, citizens at a Brattleboro, Vt., town meeting passed a resolution calling for its local police to arrest and indict Bush and Vice President Dick Cheney for war crimes. The town of Marlboro, Vt., passed a similar measure.
With Vermont still the only state Bush has never visited, it is unlikely either town will see a presidential perp walk.
By Terry J. Allen
Vermont legislators are demanding that all of its National Guard troops be sent home from Iraq.
While Congress runs out the clock on President Bush's Iraq War, some Vermont legislators hope to spark a state-by-state movement to quickly withdraw National Guard troops and stanch the flow of blood and treasure.
On Jan. 30, state House members, soon followed by state senators, introduced legislation that called on Vermont's Republican Gov. Jim Douglas to take "all necessary steps" to bring home, as quickly as possible, all members of the Vermont National Guard serving in Iraq.
Rather than arguing whether launching the war was legal or even just, supporters of the bill tacitly concede that Congress' 2002 Authorization to Use Military Force gave Bush the authority to invade Iraq based on two-and only two-criteria: "(1) defend the national security of the United States against the continuing threat posed by Iraq; and (2) enforce all relevant United Nations Security Council resolutions regarding Iraq."
But today, Saddam Hussein and the specter of weapons of mass destruction are both dead; there is no national security threat; and the U.N. resolutions are no longer relevant, the bill's supporters say.
"That very specific mission does not exist today," says state Rep. Michael Fisher (D-Lincoln), who introduced the House bill. And when the mission expired, so too did any legal or constitutional basis for the war or the involvement of the Vermont National Guard, the bill states.
"The president no longer has the authorization to command our Vermont National Guard units," says Fisher.
"It's bait and switch," says constitutional legal scholar Peter Teachout, about the shifting mission rationales. "If they want troops there until the last suicide bomber has blown himself to kingdom come, they need to be specific."
If the Democratic-controlled Vermont legislature passes the bill, the governor would have to sign it. The legislation would then have to survive a court challenge. A veto seems likely as Gov. Douglas is a supporter of Sen. John McCain (R-Ariz.). As for a lawsuit, "there is no court in the country that would issue an order requiring withdrawal of troops mid-deployment," says Teachout.
But there are legal precedents, albeit unsuccessful ones, for governors resisting orders to deploy their state's Guard troops. In 1986, then-Gov. Madeleine Kunin joined a five-state effort to stop the Reagan administration from sending Vermont's Army National Guard to Honduras. In 1990, the U.S. Supreme Court ruled in Perpich v. Department of Defense that governors cannot block a call-up of the National Guard for service overseas. That precedent was limited because, unlike the current challenge, it did not rest on the illegality of the war, some Vermont Democrats argue.
Despite its slim prospects, Fisher insists the bill is more than symbolic: "It may cause a ripple that develops into a larger wave that helps clarify that states do have a role in controlling their National Guard troops, especially when a war effort is illegal."
"If other states join in, it might light a fire under Congress," says Teachout.
Already, legislators in Maine, Maryland, Minnesota, New Hampshire, Pennsylvania, Rhode Island and Wisconsin are exploring ways to stoke the flame.
While both sides talk mainly about lives and national security, money circles the Vermont debate. State Rep. Patricia O'Donnell (R-Vernon) points out that if Vermont withdrew the Guards, Washington might withdraw the $3 million it contributes to maintaining Vermont's units.
Democrats counter that states are already bearing much of the burden of budgets cuts necessitated by the pricey occupation. At a January press conference, House Speaker Gaye Symington (D-Jericho) said the war in Iraq has had a heavy impact on Vermont and has led to financial cuts in Medicaid and other areas.
The cost also comes in blood. Vermont has one of the highest per capita death rates in Iraq.
The state has tried various strategies to oppose the Iraq War. In February 2007, the legislature approved a non-binding resolution to bring home all the troops. And on March 4, citizens at a Brattleboro, Vt., town meeting passed a resolution calling for its local police to arrest and indict Bush and Vice President Dick Cheney for war crimes. The town of Marlboro, Vt., passed a similar measure.
With Vermont still the only state Bush has never visited, it is unlikely either town will see a presidential perp walk.
US steps in to prevent collapse of gas pipeline project
Nabucco pipeline bypasses Russia
Go to Original
By Keith Lee
The United States has stepped in to prevent the collapse of the first project to construct a natural gas pipeline that will bypass Russia. It is pressuring the European Union (EU) and Central Asian countries to complete plans for the construction of the Nabucco pipeline, which is intended to link up with the Baku-Tbilisi-Erzurum and planned TransCaspian networks. It will bring gas 3,300 kilometres from Central Asia under the Caspian Sea to Turkey, through Romania, Bulgaria and Hungary to Austria.
Since the beginning of the year, several European countries have abandoned the Nabucco project and defected to the rival South Stream project run by the Russian oil giant, Gazprom. The $10 billion South Stream pipeline is designed to run from Russia under the Black Sea to Bulgaria, where it divides into a southern branch via Greece to Italy and a northern branch via Serbia and Hungary to Austria.
The collapse of the project started on January 18, when Bulgaria announced it was joining Gazprom during Russian President Vladimir Putin´s visit to Sofia. This prompted a complaint from EU High Representative for Common Foreign and Security Policy Javier Solana about the lack of a “credible” European external energy policy, whereas “Big deals are being made every day in the Middle East, the Caucasus, the Balkans and Asia, from decisions on pipelines, to exploration deals to strategic partnerships among producers.”
“Our future options seem to be narrowing while others move in a determined manner,” Solana added.
The Bush administration has reacting with growing impatience to these developments, warning the EU that it must go ahead with building the $6 billion pipeline and reduce its growing dependence on Gazprom. US diplomats and officials have been touring European and Central Asian countries putting pressure on a number of states to complete plans on a project that was first proposed a decade ago, in 1998.
Nabucco has been dogged by long-running disputes between the states bordering the Caspian Sea—Russia, Iran, Turkmenistan, Azerbaijan and Kazakhstan—over ownership of the seabed, the route of the pipeline, and how much will be paid to allow transit of the gas through their territory.
Russia has sought to delay the project, since it owns the only major gas pipeline out of Central Asia and is the main customer of gas and oil from Turkmenistan, the main intended source of supply of gas to the Nabucco pipeline. The two other potential suppliers are Azerbaijan, which has large gas reserves but not sufficient to meet demand and Iran, whose involvement the US vehemently opposes.
US Principal Deputy Assistant Secretary of State Steven Mann flew into the Turkmen capital, Ashgabat, for the second time at the end of February to put pressure on President Gurbanguly Berdymuhammedov, a few days after he stopped off in the Azerbaijani capital, Baku. According to regional expert Mars Sariev, Mann was taking advantage of the “power paralysis” during the Russian presidential elections to “exert pressure on Ashgabat to resolve its disputes with Azerbaijan.”
“Berdymuhammedov and [Azerbaijani President Ilham] Aliyev may be able to reach a consensus under the aegis of the Americans and with [the promise of] massive western investment,” Sariev added. Inter-governmental talks between the two countries began in Baku on March 5 and observers say the settlement of an old gas debt dispute paves the way for better relations between the two countries and possible cooperation over the Nabucco pipeline.
There have also been calls for Romania and Ukraine, which have rights over the Black Sea seabed through which the South Stream pipeline will cross, to take out legal action to block or at least delay its construction in the way Baltic countries used their rights last year to delay and modify Gazprom’s North Stream project. There have also been criticisms of Italy’s ENI corporation for providing technology that Russia does not possess to work in deep water environments.
Virtually overnight, in the first week of March, Austria’s OMV, Hungary’s MOL, Turkey’s Botas, Bulgaria’s Bulgargaz and Germany’s RWE pulled out, leaving Rumania’s Transgaz to pick up the pieces. Lack of investment and gas resources and absence of a unified European energy policy were given as the reasons. In a complete about turn, OMV said it will now transfer the terminus and storage centre in Vienna designated for Nabucco to a Gazprom-OMV joint venture. OMV shares rose sharply at the news followed by rumours that Gazprom was backing a takeover by OMV of MOL, the privately-owned Hungarian partner in the consortium. The speed with which these countries changed their allegiances is a graphic reminder of the British statesman Lord Palmerston’s axiom: nations have no permanent allies, only permanent interests.
On February 28, Putin took part in a signing ceremony at the Kremlin with Hungarian Prime Minister Ferenc Gyurcsany, securing the final stage of the pipeline route. Putin mocked the Nabucco project saying, “You can build a pipeline or even two, three, or five. The question is what fuel you put through it and where do you get that fuel. If someone wants to dig into the ground and bury metal there in the form of a pipeline, please do so, we don’t object.”
To rub salt in US and EU’s wounds the Hungarian president declared, “It is with satisfaction and gratitude that I see Russia doing everything it has promised to us. Hungary has realized that it had no alternative to cooperation with Russia.”
In the days before the signing ceremony the US government warned Hungary about the South Stream project. Matthew Bryza, US deputy assistant secretary of state, gave several interviews that were broadcast in Hungary and Assistant Secretary of State Daniel Fried published an article in the country’s leading newspaper. In a visit to Hungary, Assistant Secretary of State for European Affairs Dan Browne said, “The US view is that we don’t want a gas pipeline war (in Europe). Only Nabucco will promote conditions needed for competition, protect Hungary and other EU states against supply disruptions and increase transparency in the energy sector.”
Gyurcsany’s junior coalition partners, the Alliance of Free Democrats, and the main opposition party Fidesz have also demanded the government push ahead with the Nabucco project.
Within days of the ceremony, Gazprom agreed with Kazakhstan, Uzbekistan and Turkmenistan to buy their gas at European prices starting in 2009, more than doubling current prices. It was another stab in the back for the Nabucco project and another step in Russia’s aim to form an association of former Soviet gas producers modeled on the OPEC oil cartel.
To this end Russia has exerted enormous pressure on countries from the former Soviet Union and Eastern Europe over the last few years. On March 5, at the last minute, Gazprom resumed gas exports to Ukraine after it cut supplies the previous week by 50 percent in a dispute over an alleged $600 million debt and a price hike. The Ukraine constitutes a vital energy transit route for the EU. For countries like Hungary, which receives around 80 percent of its gas from the Ukrainian pipeline, its only source of foreign gas, the latest dispute was a nightmare.
It also had a knock-on effect on the already tenuous coalition between Ukraine’s Prime Minister, Yulia Tymoshenko, and President Viktor Yushchenko, who both rose to power in the Western-backed 2005 Orange Revolution. The former allies have fallen out over the gas crisis, with claims that Tymoshenko sabotaged a deal on Ukraine’s debts that Yushchenko had reached with Putin. According to Federico Bordonaro, a Rome-based analyst, “Gazprom’s moves are not entirely due to business problems. I think Gazprom is striking back at Europe, firstly because Europe recognized Kosovo’s independence without listening to Russia’s concerns, and secondly because Ukraine is heading toward NATO integration.”
Bordonaro also believes the recent Russia-Ukraine stand-off, following the similar incident two years ago, will make Europe “try to push for new key agreements with Libya, Algeria, and it may also try to revive the Nabucco pipeline.” The Ukraine is also promoting its own pipeline, White Stream, as an alternative to South Stream and Nabucco.
Gazprom’s successes have wiped out Russia’s debt and accounts for 25 percent of its foreign earnings. The company has a market value of $245 billion and is growing rapidly through an aggressive campaign of buying up state energy companies across Europe. It currently provides all the gas needs of neighbouring countries like Latvia and almost half the needs of the rest of Europe, which will rise from 200 billion cubic metres today to around 600 billion cubic metres by 2020.
The economic basis for Russia’s new geopolitical ambitions rests on its huge external trade surplus, which has risen in the past few years to about $100 billion annually. Accumulation of the “oil money” has permitted the state to build up its gold reserves to about $300 billion and top up the so-called Stabilization Fund, which now holds over $100 billion.
There is also an important political reason for the relative strengthening of Russia’s economic and political role, which is related to the growth of inter-imperialist tensions. The occupations of Iraq and Afghanistan by US imperialism have led to a growing anxiety among the European ruling elites that a US stranglehold over the extraction and transport of the oil and natural gas resources of the Middle East and Central Asia will conflict with their own interests.
These fears and the growing role of China and India have been utilised by the Kremlin to further its interests in Europe. The European powers and Russia find themselves in the contradictory position of growing interdependence and rivalry. Lacking sufficient energy resources of its own and home to some of the world’s largest energy companies, Europe sees Russian oil and gas as a vital geopolitical asset and source of profits. For the Russian elite, expansion in Europe is necessary to secure and advance its political and economic interests in a situation where it is being encircled by a militaristic US.
While Secretary Browne has said that the US and Europe do not want a “pipeline war”, this is exactly what threatens. It could be sooner rather than later before the great powers send in their armies to protect their strategic interests in the region. Sections of the European ruling elite also recognise this. In a recent speech European Commissioner for Energy Andris Piebalgs made it clear that “The overall aim is to break down the divisions on the external borders of the European Union. Just because the external border of the Union has been reached, an electron just does not turn around and go back to its generator. Nor does a gas molecule have a passport. What I am saying is that the borders of the European Union are not the borders of the energy market. In an enlarged European Union of 25 [states], this is more obviously the case, as several Member States were integrated into other systems before they joined the EU. We cannot ignore this historical fact. So the Commission and the Council of the European Union have made it clear that we need to extend the borders of the internal energy market and extend the reach of the single regulatory framework of the European Union.”
Go to Original
By Keith Lee
The United States has stepped in to prevent the collapse of the first project to construct a natural gas pipeline that will bypass Russia. It is pressuring the European Union (EU) and Central Asian countries to complete plans for the construction of the Nabucco pipeline, which is intended to link up with the Baku-Tbilisi-Erzurum and planned TransCaspian networks. It will bring gas 3,300 kilometres from Central Asia under the Caspian Sea to Turkey, through Romania, Bulgaria and Hungary to Austria.
Since the beginning of the year, several European countries have abandoned the Nabucco project and defected to the rival South Stream project run by the Russian oil giant, Gazprom. The $10 billion South Stream pipeline is designed to run from Russia under the Black Sea to Bulgaria, where it divides into a southern branch via Greece to Italy and a northern branch via Serbia and Hungary to Austria.
The collapse of the project started on January 18, when Bulgaria announced it was joining Gazprom during Russian President Vladimir Putin´s visit to Sofia. This prompted a complaint from EU High Representative for Common Foreign and Security Policy Javier Solana about the lack of a “credible” European external energy policy, whereas “Big deals are being made every day in the Middle East, the Caucasus, the Balkans and Asia, from decisions on pipelines, to exploration deals to strategic partnerships among producers.”
“Our future options seem to be narrowing while others move in a determined manner,” Solana added.
The Bush administration has reacting with growing impatience to these developments, warning the EU that it must go ahead with building the $6 billion pipeline and reduce its growing dependence on Gazprom. US diplomats and officials have been touring European and Central Asian countries putting pressure on a number of states to complete plans on a project that was first proposed a decade ago, in 1998.
Nabucco has been dogged by long-running disputes between the states bordering the Caspian Sea—Russia, Iran, Turkmenistan, Azerbaijan and Kazakhstan—over ownership of the seabed, the route of the pipeline, and how much will be paid to allow transit of the gas through their territory.
Russia has sought to delay the project, since it owns the only major gas pipeline out of Central Asia and is the main customer of gas and oil from Turkmenistan, the main intended source of supply of gas to the Nabucco pipeline. The two other potential suppliers are Azerbaijan, which has large gas reserves but not sufficient to meet demand and Iran, whose involvement the US vehemently opposes.
US Principal Deputy Assistant Secretary of State Steven Mann flew into the Turkmen capital, Ashgabat, for the second time at the end of February to put pressure on President Gurbanguly Berdymuhammedov, a few days after he stopped off in the Azerbaijani capital, Baku. According to regional expert Mars Sariev, Mann was taking advantage of the “power paralysis” during the Russian presidential elections to “exert pressure on Ashgabat to resolve its disputes with Azerbaijan.”
“Berdymuhammedov and [Azerbaijani President Ilham] Aliyev may be able to reach a consensus under the aegis of the Americans and with [the promise of] massive western investment,” Sariev added. Inter-governmental talks between the two countries began in Baku on March 5 and observers say the settlement of an old gas debt dispute paves the way for better relations between the two countries and possible cooperation over the Nabucco pipeline.
There have also been calls for Romania and Ukraine, which have rights over the Black Sea seabed through which the South Stream pipeline will cross, to take out legal action to block or at least delay its construction in the way Baltic countries used their rights last year to delay and modify Gazprom’s North Stream project. There have also been criticisms of Italy’s ENI corporation for providing technology that Russia does not possess to work in deep water environments.
Virtually overnight, in the first week of March, Austria’s OMV, Hungary’s MOL, Turkey’s Botas, Bulgaria’s Bulgargaz and Germany’s RWE pulled out, leaving Rumania’s Transgaz to pick up the pieces. Lack of investment and gas resources and absence of a unified European energy policy were given as the reasons. In a complete about turn, OMV said it will now transfer the terminus and storage centre in Vienna designated for Nabucco to a Gazprom-OMV joint venture. OMV shares rose sharply at the news followed by rumours that Gazprom was backing a takeover by OMV of MOL, the privately-owned Hungarian partner in the consortium. The speed with which these countries changed their allegiances is a graphic reminder of the British statesman Lord Palmerston’s axiom: nations have no permanent allies, only permanent interests.
On February 28, Putin took part in a signing ceremony at the Kremlin with Hungarian Prime Minister Ferenc Gyurcsany, securing the final stage of the pipeline route. Putin mocked the Nabucco project saying, “You can build a pipeline or even two, three, or five. The question is what fuel you put through it and where do you get that fuel. If someone wants to dig into the ground and bury metal there in the form of a pipeline, please do so, we don’t object.”
To rub salt in US and EU’s wounds the Hungarian president declared, “It is with satisfaction and gratitude that I see Russia doing everything it has promised to us. Hungary has realized that it had no alternative to cooperation with Russia.”
In the days before the signing ceremony the US government warned Hungary about the South Stream project. Matthew Bryza, US deputy assistant secretary of state, gave several interviews that were broadcast in Hungary and Assistant Secretary of State Daniel Fried published an article in the country’s leading newspaper. In a visit to Hungary, Assistant Secretary of State for European Affairs Dan Browne said, “The US view is that we don’t want a gas pipeline war (in Europe). Only Nabucco will promote conditions needed for competition, protect Hungary and other EU states against supply disruptions and increase transparency in the energy sector.”
Gyurcsany’s junior coalition partners, the Alliance of Free Democrats, and the main opposition party Fidesz have also demanded the government push ahead with the Nabucco project.
Within days of the ceremony, Gazprom agreed with Kazakhstan, Uzbekistan and Turkmenistan to buy their gas at European prices starting in 2009, more than doubling current prices. It was another stab in the back for the Nabucco project and another step in Russia’s aim to form an association of former Soviet gas producers modeled on the OPEC oil cartel.
To this end Russia has exerted enormous pressure on countries from the former Soviet Union and Eastern Europe over the last few years. On March 5, at the last minute, Gazprom resumed gas exports to Ukraine after it cut supplies the previous week by 50 percent in a dispute over an alleged $600 million debt and a price hike. The Ukraine constitutes a vital energy transit route for the EU. For countries like Hungary, which receives around 80 percent of its gas from the Ukrainian pipeline, its only source of foreign gas, the latest dispute was a nightmare.
It also had a knock-on effect on the already tenuous coalition between Ukraine’s Prime Minister, Yulia Tymoshenko, and President Viktor Yushchenko, who both rose to power in the Western-backed 2005 Orange Revolution. The former allies have fallen out over the gas crisis, with claims that Tymoshenko sabotaged a deal on Ukraine’s debts that Yushchenko had reached with Putin. According to Federico Bordonaro, a Rome-based analyst, “Gazprom’s moves are not entirely due to business problems. I think Gazprom is striking back at Europe, firstly because Europe recognized Kosovo’s independence without listening to Russia’s concerns, and secondly because Ukraine is heading toward NATO integration.”
Bordonaro also believes the recent Russia-Ukraine stand-off, following the similar incident two years ago, will make Europe “try to push for new key agreements with Libya, Algeria, and it may also try to revive the Nabucco pipeline.” The Ukraine is also promoting its own pipeline, White Stream, as an alternative to South Stream and Nabucco.
Gazprom’s successes have wiped out Russia’s debt and accounts for 25 percent of its foreign earnings. The company has a market value of $245 billion and is growing rapidly through an aggressive campaign of buying up state energy companies across Europe. It currently provides all the gas needs of neighbouring countries like Latvia and almost half the needs of the rest of Europe, which will rise from 200 billion cubic metres today to around 600 billion cubic metres by 2020.
The economic basis for Russia’s new geopolitical ambitions rests on its huge external trade surplus, which has risen in the past few years to about $100 billion annually. Accumulation of the “oil money” has permitted the state to build up its gold reserves to about $300 billion and top up the so-called Stabilization Fund, which now holds over $100 billion.
There is also an important political reason for the relative strengthening of Russia’s economic and political role, which is related to the growth of inter-imperialist tensions. The occupations of Iraq and Afghanistan by US imperialism have led to a growing anxiety among the European ruling elites that a US stranglehold over the extraction and transport of the oil and natural gas resources of the Middle East and Central Asia will conflict with their own interests.
These fears and the growing role of China and India have been utilised by the Kremlin to further its interests in Europe. The European powers and Russia find themselves in the contradictory position of growing interdependence and rivalry. Lacking sufficient energy resources of its own and home to some of the world’s largest energy companies, Europe sees Russian oil and gas as a vital geopolitical asset and source of profits. For the Russian elite, expansion in Europe is necessary to secure and advance its political and economic interests in a situation where it is being encircled by a militaristic US.
While Secretary Browne has said that the US and Europe do not want a “pipeline war”, this is exactly what threatens. It could be sooner rather than later before the great powers send in their armies to protect their strategic interests in the region. Sections of the European ruling elite also recognise this. In a recent speech European Commissioner for Energy Andris Piebalgs made it clear that “The overall aim is to break down the divisions on the external borders of the European Union. Just because the external border of the Union has been reached, an electron just does not turn around and go back to its generator. Nor does a gas molecule have a passport. What I am saying is that the borders of the European Union are not the borders of the energy market. In an enlarged European Union of 25 [states], this is more obviously the case, as several Member States were integrated into other systems before they joined the EU. We cannot ignore this historical fact. So the Commission and the Council of the European Union have made it clear that we need to extend the borders of the internal energy market and extend the reach of the single regulatory framework of the European Union.”
New Zealand economy sliding into recession
Go to Original
By John Braddock
Bank of New Zealand (BNZ) economists warned last week that New Zealand was heading for a recession—and that it may already be there. One spokesman said the housing slump and global credit crunch had combined to form an almost “perfect storm”.
The drying up of available credit is continuing to put upward pressure on interest rates at a time when householders are already struggling with rising mortgage rates. At the same time, businesses are facing the prospect of rising debt servicing bills and the BNZ declared the impact of the credit crunch was only just beginning to be felt. The statement came the same day the share market dropped $850 million, or 2 percent, in value.
In a front-page article on March 7 headlined “Prepare for pain in the pocket”, the Dominion Post said that householders should “brace for prolonged pain as power and petrol prices rise, and with little relief in sight from punishingly high mortgage rates”.
Amid the catalogue of grim economic news, the Reserve Bank announced it would not consider a drop in interest rates until the second half of next year at the earliest, despite a housing slump and deteriorating economy. It warned that, due to world events, higher interest rates were “the new reality”. New Zealand already has the highest interest rates in the OECD; the current lending rate for house mortgages is running at 10.7 percent, up from 10.5 percent in February. In the past year alone, interest costs on a two-year mortgage have risen by more than 14 percent.
Last July, a visiting US economist predicted that the New Zealand economy was on a “death spiral”. The comments by Steve Hanke, fellow of the Cato Institute and professor at Baltimore’s Johns Hopkins University, came as the New Zealand dollar hit US80c, a record since it was first floated in 1985 and a rise of 27 percent in six months. It remains at the same level eight months later, crippling many exporters.
According to Hanke, to fight inflation the Reserve Bank hiked interest rates, but because New Zealand had higher interest rates than other developed countries and a small economy, it attracted a flood of capital from offshore where rates were lower, pushing up the exchange rate. He said this aggravated the inflation problem and the central bank then had to increase rates and start the whole cycle again. He concluded; “It’s obvious to everyone that this isn’t the paradise that everyone thought it was.” The Reserve Bank has hiked interest rates no less than six times since early last year.
The bank has now warned there is the potential for a severe downturn in house prices. According to figures released last week by the Real Estate Institute, prices, which are down as much as 10 percent this year, fell for the third month in a row in February. The institute claims prices are now at a “tipping point”—poised to go into reverse for the remainder of the year. The housing market has entered a slump, with sales volumes slipping to their lowest in seven years, while the time it takes to sell a house has risen rapidly to an average of 50 days. Deutsche Bank chief economist Darren Gibbs predicted that falling house prices were set to become a “significant drag” on the economy, and that the market was already sliding faster than the Reserve Bank expected.
Escalating financial pressures on working people
As the US-led international recession gathers pace, the economic shocks are impacting sharply on the daily lives of working people in New Zealand, like those of their counterparts around the world. No-one remains unaffected, with most households facing deepening concerns over their budgets, household expenses, mortgages and financial security. For ordinary people, the daily and weekly struggle to make ends meet has taken an ominous turn, with recent indicators revealing rising prices hitting basic household items.
According to figures released last week by Statistics New Zealand, food prices rose 5.2 percent in the year to February. Grocery foods were the worst hit—the cost of dairy products has soared, with butter costing twice as much as it did last year. In the past month alone, milk has risen by 4 percent and bread by 3.4 percent. Overall, meat poultry and fish prices went up 3.9 percent in the past year. Poultry rose by 10.4 percent. Costs for restaurant meals and ready-to-eat food rose 4.2 percent and non-alcoholic beverages by 4.8 percent.
With a three cents per litre hike last week, motorists are now paying record prices for petrol. All the major companies lifted their pump prices after oil hit the $US110 mark. It now costs $NZ1.78 a litre for 91 octane and $1.83 for 95 octane. The Automobile Association is predicting that petrol will cost over $2 per litre by the end of the year.
Signalling that working people are already being forced to reduce their spending, core retailers—excluding those in fuel and vehicles—are reporting their flattest sales period since the Asian economic crisis some 10 years ago. The retailer The Warehouse Group, the dominant discount homegoods supplier in working class areas, last week reported net profit for the year was down 5.1 per cent to $57.1 million, while its operating profit declined 10.8 per cent to $83.3 million.
After nine years of steady increase, core retailing figures have been flattening out since April last year. Statistics NZ figures for January showed that on a seasonally adjusted basis, total retail sales rose just 0.3 per cent. However, the biggest contribution to the rise came from a 2.1 per cent surge in supermarket sales, in large part a reflection of rising food prices. Fifteen of the 24 core retail industries reported drops in sales. The biggest falls came in takeaway food (down 6.1 percent), appliances (3.1 percent) and department stores (1.8 percent).
The Sunday Star Times noted this week that essential items such as petrol, household energy, local authority rates and vehicle running costs have all “spiked dramatically” since Labour came to power, by more than the official rate of inflation. In the past year alone, food price rises represented a quarter of the increase in the total consumer price index (CPI). That and necessities such as local council rates, rubbish disposal, water charges, telecommunications, electricity and gas and petrol were responsible for two-thirds of the total increase. The rise in essential items has hit those with the lowest disposable income hardest, as they are forced to spend the highest proportion of their income on basics.
Financial sector collapses
Accompanying the pressure on household living costs has been a series of business failures and job losses.
On March 7 the country’s principal carpet maker Feltex announced the closure of two of its plants. The decision will devastate the regional towns of Foxton and Feilding where Feltex is a long-term employer. The plant at Foxton made tufted carpet and the plant at Dannevirke produced yarn. Around 160 workers will be affected by the two closures.
A company spokesperson said there had been no investment in the plants for 15 years and they had become uneconomic. Although other jobs have been offered at the Dannevirke, Wiri and Lower Hutt plants, most of the laid off workers will be unable to transfer to the main centres because of the wide difference in housing costs. One worker bitterly joked that if he managed to sell his house in Foxton he could buy a letterbox in Auckland. A spokesman for the National Distribution Union (NDU) noted at least 15 cases where multiple family members will lose their jobs. Many of the workers are responsible for young families, while others who are just a few years away from retirement will find it difficult to get new jobs in the local area.
The Australian company Godfrey Hirst, previously Feltex’s main Australasian competitor, bought the NZ business from receivers in 2006. It almost immediately shut the Riccarton plant in Christchurch, with the loss of 134 jobs. The new round of closures came after the NDU had already delivered “efficiency gains” and reductions in take-home pay through an agreement on shift changes. Workers were earning a miserly $14-$16 an hour.
Union officials were on hand at the meetings where the closures were announced and promptly declared they would meet with the company to “discuss the restructuring plans” and to organise the sacked workers onto unemployment benefits. The union has only a “very modest” redundancy agreement with Godfrey Hirst, with significantly lesser conditions than those that applied under the previous owner.
In the finance sector, thousands of desperate small investors have become embroiled in a series of collapses and have lost millions of dollars of their life savings. The most recent involved Australian-owned Blue Chip Financial Solutions (BCFS). In February nineteen property management companies associated with BCFS were forced into liquidation, and reports indicate that as much as $58 million may be owed. The liquidator told a meeting of 200 investors—mainly retired couples—that it was one of the worst company collapses he has handled. He indicated that, at best, the more than 2000 investors around the country might recover 50 cents in the dollar after the web of Blue Chip companies was unravelled.
In less than two years, some fourteen finance companies have collapsed, with the rate accelerating since the onset of the US sub-prime crisis in the middle of last year. The extent of losses is now as bad as in the period of the 1987 share market crash. Recent collapses include; Five Star Consumer Finance (August 30, owing $50 million), Property Finance (August 29, debenture debts of more than $80 million and loans of more than $630 million), Nathans Finance (August 21, owing $166 million to 6,000 investors), Bridgecorp (July 2, owing nearly $500 million to 18,000 investors). The toll for tens of thousands of small investors has reached more than $NZ 1.2 billion.
Prime Minister Helen Clark, her Labour government—and their accomplices in the trade unions—have done nothing to address this deepening crisis. For most of its nine years in office, Labour has presided over a buoyant economy fuelled by high world prices for export commodities and a booming share market. The principal beneficiaries have not been working people but a thin layer of wealthy investors and the corporate elite.
The downturn in the economy has seen a significant shift among vast layers of the population against Labour. With no progressive alternative within the parliamentary setup, this is expressing itself in a rise in support for the conservative opposition National Party, which has run a populist campaign promising to boost household incomes with substantial tax cuts. Just six months out from the 2008 elections, National has opened up a consistent 20 point lead over Labour in the polls, and on current figures could govern alone without having to enter a coalition with any of the minor parties.
Neither Labor nor National represent a way forward for New Zealand workers. The only way the working class can defend its own independent interests in this new period of spiralling economic crisis, militarism and war is to turn to the building of a new political movement, in unity with workers in Australia, the Asia-Pacific region and throughout the world, grounded on the perspective and program of socialist internationalism. That is the perspective of the WSWS and the Socialist Equality Party.
By John Braddock
Bank of New Zealand (BNZ) economists warned last week that New Zealand was heading for a recession—and that it may already be there. One spokesman said the housing slump and global credit crunch had combined to form an almost “perfect storm”.
The drying up of available credit is continuing to put upward pressure on interest rates at a time when householders are already struggling with rising mortgage rates. At the same time, businesses are facing the prospect of rising debt servicing bills and the BNZ declared the impact of the credit crunch was only just beginning to be felt. The statement came the same day the share market dropped $850 million, or 2 percent, in value.
In a front-page article on March 7 headlined “Prepare for pain in the pocket”, the Dominion Post said that householders should “brace for prolonged pain as power and petrol prices rise, and with little relief in sight from punishingly high mortgage rates”.
Amid the catalogue of grim economic news, the Reserve Bank announced it would not consider a drop in interest rates until the second half of next year at the earliest, despite a housing slump and deteriorating economy. It warned that, due to world events, higher interest rates were “the new reality”. New Zealand already has the highest interest rates in the OECD; the current lending rate for house mortgages is running at 10.7 percent, up from 10.5 percent in February. In the past year alone, interest costs on a two-year mortgage have risen by more than 14 percent.
Last July, a visiting US economist predicted that the New Zealand economy was on a “death spiral”. The comments by Steve Hanke, fellow of the Cato Institute and professor at Baltimore’s Johns Hopkins University, came as the New Zealand dollar hit US80c, a record since it was first floated in 1985 and a rise of 27 percent in six months. It remains at the same level eight months later, crippling many exporters.
According to Hanke, to fight inflation the Reserve Bank hiked interest rates, but because New Zealand had higher interest rates than other developed countries and a small economy, it attracted a flood of capital from offshore where rates were lower, pushing up the exchange rate. He said this aggravated the inflation problem and the central bank then had to increase rates and start the whole cycle again. He concluded; “It’s obvious to everyone that this isn’t the paradise that everyone thought it was.” The Reserve Bank has hiked interest rates no less than six times since early last year.
The bank has now warned there is the potential for a severe downturn in house prices. According to figures released last week by the Real Estate Institute, prices, which are down as much as 10 percent this year, fell for the third month in a row in February. The institute claims prices are now at a “tipping point”—poised to go into reverse for the remainder of the year. The housing market has entered a slump, with sales volumes slipping to their lowest in seven years, while the time it takes to sell a house has risen rapidly to an average of 50 days. Deutsche Bank chief economist Darren Gibbs predicted that falling house prices were set to become a “significant drag” on the economy, and that the market was already sliding faster than the Reserve Bank expected.
Escalating financial pressures on working people
As the US-led international recession gathers pace, the economic shocks are impacting sharply on the daily lives of working people in New Zealand, like those of their counterparts around the world. No-one remains unaffected, with most households facing deepening concerns over their budgets, household expenses, mortgages and financial security. For ordinary people, the daily and weekly struggle to make ends meet has taken an ominous turn, with recent indicators revealing rising prices hitting basic household items.
According to figures released last week by Statistics New Zealand, food prices rose 5.2 percent in the year to February. Grocery foods were the worst hit—the cost of dairy products has soared, with butter costing twice as much as it did last year. In the past month alone, milk has risen by 4 percent and bread by 3.4 percent. Overall, meat poultry and fish prices went up 3.9 percent in the past year. Poultry rose by 10.4 percent. Costs for restaurant meals and ready-to-eat food rose 4.2 percent and non-alcoholic beverages by 4.8 percent.
With a three cents per litre hike last week, motorists are now paying record prices for petrol. All the major companies lifted their pump prices after oil hit the $US110 mark. It now costs $NZ1.78 a litre for 91 octane and $1.83 for 95 octane. The Automobile Association is predicting that petrol will cost over $2 per litre by the end of the year.
Signalling that working people are already being forced to reduce their spending, core retailers—excluding those in fuel and vehicles—are reporting their flattest sales period since the Asian economic crisis some 10 years ago. The retailer The Warehouse Group, the dominant discount homegoods supplier in working class areas, last week reported net profit for the year was down 5.1 per cent to $57.1 million, while its operating profit declined 10.8 per cent to $83.3 million.
After nine years of steady increase, core retailing figures have been flattening out since April last year. Statistics NZ figures for January showed that on a seasonally adjusted basis, total retail sales rose just 0.3 per cent. However, the biggest contribution to the rise came from a 2.1 per cent surge in supermarket sales, in large part a reflection of rising food prices. Fifteen of the 24 core retail industries reported drops in sales. The biggest falls came in takeaway food (down 6.1 percent), appliances (3.1 percent) and department stores (1.8 percent).
The Sunday Star Times noted this week that essential items such as petrol, household energy, local authority rates and vehicle running costs have all “spiked dramatically” since Labour came to power, by more than the official rate of inflation. In the past year alone, food price rises represented a quarter of the increase in the total consumer price index (CPI). That and necessities such as local council rates, rubbish disposal, water charges, telecommunications, electricity and gas and petrol were responsible for two-thirds of the total increase. The rise in essential items has hit those with the lowest disposable income hardest, as they are forced to spend the highest proportion of their income on basics.
Financial sector collapses
Accompanying the pressure on household living costs has been a series of business failures and job losses.
On March 7 the country’s principal carpet maker Feltex announced the closure of two of its plants. The decision will devastate the regional towns of Foxton and Feilding where Feltex is a long-term employer. The plant at Foxton made tufted carpet and the plant at Dannevirke produced yarn. Around 160 workers will be affected by the two closures.
A company spokesperson said there had been no investment in the plants for 15 years and they had become uneconomic. Although other jobs have been offered at the Dannevirke, Wiri and Lower Hutt plants, most of the laid off workers will be unable to transfer to the main centres because of the wide difference in housing costs. One worker bitterly joked that if he managed to sell his house in Foxton he could buy a letterbox in Auckland. A spokesman for the National Distribution Union (NDU) noted at least 15 cases where multiple family members will lose their jobs. Many of the workers are responsible for young families, while others who are just a few years away from retirement will find it difficult to get new jobs in the local area.
The Australian company Godfrey Hirst, previously Feltex’s main Australasian competitor, bought the NZ business from receivers in 2006. It almost immediately shut the Riccarton plant in Christchurch, with the loss of 134 jobs. The new round of closures came after the NDU had already delivered “efficiency gains” and reductions in take-home pay through an agreement on shift changes. Workers were earning a miserly $14-$16 an hour.
Union officials were on hand at the meetings where the closures were announced and promptly declared they would meet with the company to “discuss the restructuring plans” and to organise the sacked workers onto unemployment benefits. The union has only a “very modest” redundancy agreement with Godfrey Hirst, with significantly lesser conditions than those that applied under the previous owner.
In the finance sector, thousands of desperate small investors have become embroiled in a series of collapses and have lost millions of dollars of their life savings. The most recent involved Australian-owned Blue Chip Financial Solutions (BCFS). In February nineteen property management companies associated with BCFS were forced into liquidation, and reports indicate that as much as $58 million may be owed. The liquidator told a meeting of 200 investors—mainly retired couples—that it was one of the worst company collapses he has handled. He indicated that, at best, the more than 2000 investors around the country might recover 50 cents in the dollar after the web of Blue Chip companies was unravelled.
In less than two years, some fourteen finance companies have collapsed, with the rate accelerating since the onset of the US sub-prime crisis in the middle of last year. The extent of losses is now as bad as in the period of the 1987 share market crash. Recent collapses include; Five Star Consumer Finance (August 30, owing $50 million), Property Finance (August 29, debenture debts of more than $80 million and loans of more than $630 million), Nathans Finance (August 21, owing $166 million to 6,000 investors), Bridgecorp (July 2, owing nearly $500 million to 18,000 investors). The toll for tens of thousands of small investors has reached more than $NZ 1.2 billion.
Prime Minister Helen Clark, her Labour government—and their accomplices in the trade unions—have done nothing to address this deepening crisis. For most of its nine years in office, Labour has presided over a buoyant economy fuelled by high world prices for export commodities and a booming share market. The principal beneficiaries have not been working people but a thin layer of wealthy investors and the corporate elite.
The downturn in the economy has seen a significant shift among vast layers of the population against Labour. With no progressive alternative within the parliamentary setup, this is expressing itself in a rise in support for the conservative opposition National Party, which has run a populist campaign promising to boost household incomes with substantial tax cuts. Just six months out from the 2008 elections, National has opened up a consistent 20 point lead over Labour in the polls, and on current figures could govern alone without having to enter a coalition with any of the minor parties.
Neither Labor nor National represent a way forward for New Zealand workers. The only way the working class can defend its own independent interests in this new period of spiralling economic crisis, militarism and war is to turn to the building of a new political movement, in unity with workers in Australia, the Asia-Pacific region and throughout the world, grounded on the perspective and program of socialist internationalism. That is the perspective of the WSWS and the Socialist Equality Party.
Legacy of Depression at work now
The Federal Reserve's expanded lending, a salve for the financial markets' current crisis, was meant to aid the 'forgotten man.'
Go to Original
By Maura Reynolds
WASHINGTON -- — It was July 1932 when Speaker John Nance Garner rose to address the U.S. House of Representatives, complaining that the government was helping big business but not the little man.
In an emergency, the Texas Democrat declared, even ordinary citizens should be eligible for help.
"I plead with you to let all the people have some drippings," said Garner, recently chosen to be Franklin D. Roosevelt's running mate. "Do not keep it just for a few."
The Great Depression had gripped the country, and under Garner's prodding, the Federal Reserve Act was amended to permit a wide expansion of federal lending under "unusual and exigent circumstances." Last week, after more than 70 years of gathering dust, the measure was pulled out like a rabbit from a hat to rescue one of the biggest financial institutions in the country.
Garner may have rolled in his grave at what the Fed did with his largely forgotten bit of populist lawmaking, but most economists applauded.
"It was almost a miracle that it was there, and it was a miracle that someone in the Fed figured out how to use it," said David M. Jones, a former Fed official who is now chief economist at Investors Security Trust in Fort Myers, Fla.
The credit system may face more rough weather in the months ahead, and the key question seems to be how bad a recession the United States is in for, not whether it faces one at all. Fed Chairman Ben S. Bernanke's decision to rescue investment house Bear Stearns Cos. by extending central bank lending to major financial institutions other than traditional banks is widely credited with giving anxious markets a breather and possibly averting a 1930s-style crisis.
Normally, the Fed makes direct loans only to depository institutions. March 16, after hasty meetings and a vote by its senior decision-makers, the central bank announced that it would loan $30 billion to JPMorgan Chase & Co., effectively underwriting its fire-sale purchase of Bear Stearns.
Moreover, the Fed promised that for at least the next six months, it would permit about 20 other "primary lenders" to take out direct loans as well, using whatever collateral the central bank decided was appropriate, including troubled mortgage-backed bonds.
Bear Stearns, caught in the sub-prime mortgage debacle and the resulting credit freeze-up, had been thrust suddenly to the brink of collapse. The financial community was rife with rumors that other major firms might go under too.
Wall Street faced the prospect of a 21st century version of an old-fashioned run on the banks as investors lost confidence in the huge companies that had grown up outside traditional banking.
For months, Bernanke had been searching for new tools. The Fed's traditional crank for boosting the economy -- lowering bank interest rates -- was less effective than in the past.
The bold expansion of Fed lending appeared to provide an answer, at least temporarily. The stock market steadied and even gained ground last week, aided also by an aggressive Fed rate cut Tuesday. Commodity prices plunged, a sign of renewed confidence in the financial system. And Wall Street's other major investment houses held on.
As the drama unfolded, economists and other analysts repeatedly compared and contrasted the current crisis with the Depression.
David Moss, an economic historian at Harvard Business School, said a major difference was that during the Depression, the Fed was part of the problem.
It was largely in denial in the early years, stingy about lending to distressed banks and a virtual slave to the gold standard, which led it to raise interest rates right when they should have been lowered.
This time, the gold standard is long gone and the Fed is alert to the risks and moving aggressively to try to address them.
"As an academic, Ben Bernanke studied the Depression," Moss said. "Now, as Fed chairman, it's clear he's learned from the mistakes of the 1930s and is using those lessons on a daily basis."
Alice M. Rivlin, a former vice chairwoman of the Fed and Clinton administration budget director, praised Bernanke for using all the powers at his disposal.
She called it "very interesting but totally irrelevant" that the statute Bernanke used to authorize his rescue of Bear Stearns was intended for the opposite purpose.
"I think the Federal Reserve needs maximum flexibility at the moment to deal with the situation," she said. "If [the statute] weren't there, we would have to put it there. Luckily, it was there."
As it happens, Garner -- now best remembered for his assertion, in bowdlerized form, that the vice presidency wasn't "worth a bucket of warm spit" -- hadn't been thinking about the Federal Reserve at all. The target of his wrath was the Reconstruction Finance Corp., which then-President Herbert Hoover had set up to rescue big businesses such as banks, insurance companies and railways.
In particular, Garner pointed out that the Reconstruction Finance Corp. spent $90 million to bail out a big Chicago bank with strong ties to the GOP, while refusing the city money to pay its workers, including teachers and firefighters.
There were good economic reasons to save the Chicago bank. Its failure would probably have triggered the collapse of dozens of smaller banks. Because federal deposit insurance did not yet exist, that would probably have wiped out the savings of thousands of ordinary Americans.
Besides, the Reconstruction Finance Corp. was not allowed to lend to local governments, much less individuals.
That, Garner said, was exactly the problem. "How can you say that it is more important in this nation that the New York Central Railroad should meet the interest on its bonds . . . than it is to prevent the forced sale of 500,000 farms and homes?"
His motivations may not have been entirely altruistic. The presidential campaign was heating up as Hoover, seeking reelection, battled challenger Roosevelt. Garner saw a chance to burnish his populist credentials.
"Politically, the loan looked like cronyism of the worst order," said George Nash, the author of a three-volume biography of Hoover.
Garner decided to use a big Depression-relief bill then nearing completion to champion the cause of the "forgotten man."
In early July, Congress sent the bill to Hoover's desk, including the Garner-backed provision to let the Reconstruction Finance Corp. loan federal money to individuals, cities and smaller businesses.
Hoover complained that Garner's language would turn the Reconstruction Finance Corp. into the "most gigantic banking and pawn-broking business in all history."
Eventually, a behind-the-scenes compromise was negotiated, and Garner's idea became law as an amendment to the Federal Reserve Act.
The provision was invoked during the Depression, but sparingly. All together, just $1.5 million in loans were approved, the last one in 1936.
Now, it has found an entirely new purpose in an entirely new era.
"We were on the brink of a total financial collapse," said Fed watcher Jones. "This saved us."
Go to Original
By Maura Reynolds
WASHINGTON -- — It was July 1932 when Speaker John Nance Garner rose to address the U.S. House of Representatives, complaining that the government was helping big business but not the little man.
In an emergency, the Texas Democrat declared, even ordinary citizens should be eligible for help.
"I plead with you to let all the people have some drippings," said Garner, recently chosen to be Franklin D. Roosevelt's running mate. "Do not keep it just for a few."
The Great Depression had gripped the country, and under Garner's prodding, the Federal Reserve Act was amended to permit a wide expansion of federal lending under "unusual and exigent circumstances." Last week, after more than 70 years of gathering dust, the measure was pulled out like a rabbit from a hat to rescue one of the biggest financial institutions in the country.
Garner may have rolled in his grave at what the Fed did with his largely forgotten bit of populist lawmaking, but most economists applauded.
"It was almost a miracle that it was there, and it was a miracle that someone in the Fed figured out how to use it," said David M. Jones, a former Fed official who is now chief economist at Investors Security Trust in Fort Myers, Fla.
The credit system may face more rough weather in the months ahead, and the key question seems to be how bad a recession the United States is in for, not whether it faces one at all. Fed Chairman Ben S. Bernanke's decision to rescue investment house Bear Stearns Cos. by extending central bank lending to major financial institutions other than traditional banks is widely credited with giving anxious markets a breather and possibly averting a 1930s-style crisis.
Normally, the Fed makes direct loans only to depository institutions. March 16, after hasty meetings and a vote by its senior decision-makers, the central bank announced that it would loan $30 billion to JPMorgan Chase & Co., effectively underwriting its fire-sale purchase of Bear Stearns.
Moreover, the Fed promised that for at least the next six months, it would permit about 20 other "primary lenders" to take out direct loans as well, using whatever collateral the central bank decided was appropriate, including troubled mortgage-backed bonds.
Bear Stearns, caught in the sub-prime mortgage debacle and the resulting credit freeze-up, had been thrust suddenly to the brink of collapse. The financial community was rife with rumors that other major firms might go under too.
Wall Street faced the prospect of a 21st century version of an old-fashioned run on the banks as investors lost confidence in the huge companies that had grown up outside traditional banking.
For months, Bernanke had been searching for new tools. The Fed's traditional crank for boosting the economy -- lowering bank interest rates -- was less effective than in the past.
The bold expansion of Fed lending appeared to provide an answer, at least temporarily. The stock market steadied and even gained ground last week, aided also by an aggressive Fed rate cut Tuesday. Commodity prices plunged, a sign of renewed confidence in the financial system. And Wall Street's other major investment houses held on.
As the drama unfolded, economists and other analysts repeatedly compared and contrasted the current crisis with the Depression.
David Moss, an economic historian at Harvard Business School, said a major difference was that during the Depression, the Fed was part of the problem.
It was largely in denial in the early years, stingy about lending to distressed banks and a virtual slave to the gold standard, which led it to raise interest rates right when they should have been lowered.
This time, the gold standard is long gone and the Fed is alert to the risks and moving aggressively to try to address them.
"As an academic, Ben Bernanke studied the Depression," Moss said. "Now, as Fed chairman, it's clear he's learned from the mistakes of the 1930s and is using those lessons on a daily basis."
Alice M. Rivlin, a former vice chairwoman of the Fed and Clinton administration budget director, praised Bernanke for using all the powers at his disposal.
She called it "very interesting but totally irrelevant" that the statute Bernanke used to authorize his rescue of Bear Stearns was intended for the opposite purpose.
"I think the Federal Reserve needs maximum flexibility at the moment to deal with the situation," she said. "If [the statute] weren't there, we would have to put it there. Luckily, it was there."
As it happens, Garner -- now best remembered for his assertion, in bowdlerized form, that the vice presidency wasn't "worth a bucket of warm spit" -- hadn't been thinking about the Federal Reserve at all. The target of his wrath was the Reconstruction Finance Corp., which then-President Herbert Hoover had set up to rescue big businesses such as banks, insurance companies and railways.
In particular, Garner pointed out that the Reconstruction Finance Corp. spent $90 million to bail out a big Chicago bank with strong ties to the GOP, while refusing the city money to pay its workers, including teachers and firefighters.
There were good economic reasons to save the Chicago bank. Its failure would probably have triggered the collapse of dozens of smaller banks. Because federal deposit insurance did not yet exist, that would probably have wiped out the savings of thousands of ordinary Americans.
Besides, the Reconstruction Finance Corp. was not allowed to lend to local governments, much less individuals.
That, Garner said, was exactly the problem. "How can you say that it is more important in this nation that the New York Central Railroad should meet the interest on its bonds . . . than it is to prevent the forced sale of 500,000 farms and homes?"
His motivations may not have been entirely altruistic. The presidential campaign was heating up as Hoover, seeking reelection, battled challenger Roosevelt. Garner saw a chance to burnish his populist credentials.
"Politically, the loan looked like cronyism of the worst order," said George Nash, the author of a three-volume biography of Hoover.
Garner decided to use a big Depression-relief bill then nearing completion to champion the cause of the "forgotten man."
In early July, Congress sent the bill to Hoover's desk, including the Garner-backed provision to let the Reconstruction Finance Corp. loan federal money to individuals, cities and smaller businesses.
Hoover complained that Garner's language would turn the Reconstruction Finance Corp. into the "most gigantic banking and pawn-broking business in all history."
Eventually, a behind-the-scenes compromise was negotiated, and Garner's idea became law as an amendment to the Federal Reserve Act.
The provision was invoked during the Depression, but sparingly. All together, just $1.5 million in loans were approved, the last one in 1936.
Now, it has found an entirely new purpose in an entirely new era.
"We were on the brink of a total financial collapse," said Fed watcher Jones. "This saved us."
The Battle of Baghdad
Iraq's Most Fearsome Militia, the U.S. military, on the Offensive
Go to Original
By Michael Schwartz
In early April, General David Petraeus, the flavor of the year in American military officers, will return to Washington to report to President Bush and the Democratic Congress on the state of post-surge Iraq. His report will be upbeat, with cautious notes thrown in, and the reception will be warm. The Republicans will congratulate the President, hoping that Americans will stop complaining and finally learn to tolerate, if not love, his war; the Democrats will be quietly unhappy because they would like Iraq to remain a major election issue.
In the meantime, the Iraqis will continue to endure the results of the surge, yet another brutal chapter in the endless war that once promised them liberation.
Over the course of five years, Baghdad, the capital city of Iraq, has been transformed from a metropolis into an urban desert of half-destroyed buildings and next to no public services, dotted by partially deserted, mutually hostile mini-ghettos that used to be neighborhoods, surrounded by cement barriers reminiscent of medieval fortifications. The most prominent of these ghettos is the heavily fortified city-inside-a-city dubbed the Green Zone, where Iraq's most fearsome militia, the United States military, is headquartered. It is governed by the Americans and by the American-sponsored Iraqi government, headed by Prime Minister Nouri al Maliki.
The remaining ghettos, large and small, are governed by local militias, most of them sworn enemies of the United States and the Maliki regime. In the expanding Shia areas of the capital, the local guardians are often members of the Mahdi Army, the militia of cleric Moqtada al-Sadr that has opposed the American presence since the occupation began. In the shrinking Sunni-controlled parts of the city, the local guardians are usually members of the Sahwa forces (the "Awakening" or, in U.S. military jargon, "Concerned Local Citizens"). The Americans have ceded to them control of their cement-enclosed domains as long as they discontinue insurgent attacks elsewhere.
As Baghdadi citizens continue to flee the threat of violence, ethnic cleansing, and economic destitution, the city waits -- whether for a definitive military confrontation or some less violent change that will bring its long ordeal to an end.
How did this all come to be?
Ethnic Cleansing Arrives in Baghdad
When the American occupation of Baghdad began in April 2003, about half of the city's neighborhoods had no particular ethnic character. In late 2004, however, thousands of Sunnis, driven out of Falluja and other insurgent strongholds by American offensives, began arriving in Baghdad. In increasingly crowded neighborhoods, ethnic friction rose, as did Sunni anger at a Shia-dominated government that sent its troops into battle beside American ones.
Sunni militias, originally organized to deal with local crime (after the Americans dismantled the Iraqi police force) began to turn on Shia residents in some of the capital's 200 mixed neighborhoods. Eventually, scattered acts of harassment were transformed into systematic campaigns of expulsion, justified by the housing needs of a rapidly growing multitude of Sunni refugees, and as retaliation for government-supported assaults on Sunni cities. During 2005, the first stream of displaced Shia began arriving in Baghdad's vast, already overcrowded Shia slum of Sadr City and in the Shia cities of southern Iraq.
In January 2006, the bombing of the revered Shia shrine, the Golden Dome mosque in Samarra, triggered sweeping Shia reprisals against Sunni communities. In the capital, a struggle for the dominance of mixed neighborhoods began. Deadly battles between Shia and Sunni militias featured all weapons and methods of slaughter available, including car bombs and death squads. Whichever side expelled the other, minority groups including Christians, Kurds, and Palestinians found themselves unwelcome and began to flee (or die). Ethnic cleansing now lay at the center of the spiraling violence in Baghdad.
The Americans Enter the Battle
In May 2006, American forces first joined "the battle for Baghdad" in a significant way. With the initiation of Operation Together Forward, the U.S. military began transferring combat brigades to the capital in an attempt to take control of Sunni and Shia militia strongholds.
This strategy, however, quickly proved itself ineffective. In August 2006, the New York Times reported that sectarian violence was "spiraling out of control." By the fall, the number of insurgents attacks in Baghdad had increased by 26%, and violent deaths reported at the city morgue had quadrupled. The seeming paradox of an American pacification campaign generating more violence can be explained by looking at the mechanics of the offensive.
Despite their involvement in ethnic violence, the Sunni and Shia militias that the Americans sought to root out were also the forces of law and order in Baghdad's otherwise lawless neighborhoods. They directed traffic, arrested and/or punished common criminals, and mediated disputes. They also protected neighborhoods from outsiders, including American or Iraqi soldiers, suicide bombers, death squads, and criminal gangs.
Before the Americans entered the fray, the militia strongholds had been the least vulnerable to sectarian attack. After all, their streets were saturated with armed men on the lookout for their enemies. Ethnic violence was largely taking place in contested mixed neighborhoods.
In entering these strongholds, the U.S. military won tactical victories, chasing surviving militia members off the streets or even out of neighborhoods, which, without their local police and defense forces, were suddenly vulnerable to sectarian attack.
This vulnerability was all-too-vividly illustrated in Sadr City, the stronghold of the Sadrist movement. As the home base of the Mahdi Army, this city-within-a-city had not experienced a car bomb attack in two years until American troops sealed it off, set up check points at key entrance and exit points, and began patrols aimed at hunting down Mahdi Army leaders they suspected of participating in death squads and of kidnapping an American soldier. Local residents told New York Times reporter Sabrina Tavernise that the operation had "forced Mahdi Army members who were patrolling the streets to vanish." Soon after, the first car bombs were detonated.
The violence reached a crescendo in November 2006, when a coordinated set of five car bombs killed at least 215 and wounded 257. Qusai Abdul-Wahab, a Sadrist member of parliament, spoke for many residents of the community when he told the Associated Press that the "occupation forces are fully responsible for these acts."
Such events generated immense bitterness among Shia, who took them as proof that the Americans and the Iraqi government were concerned only with attacking the Mahdis, not suppressing jihadist attacks. This encouraged their support of the death squads, which sought to exact retribution on the Sunni communities they believed were harboring the bombers.
The Americans had also facilitated these retaliatory attacks. Sunni insurgents in the Baghdad suburbs of Balad and Duluiyah, for example, were suspected of slaughtering 17 Shia workers in a particularly well publicized instance of sectarian brutality. American troops and their Iraqi allies cordoned off the two districts and invaded the neighborhoods. The invading forces quickly silenced the insurgent militias, leaving the streets unpatrolled. Soon after, Shia death squads made their appearance. Some of them had apparently been organized inside (Shia) Iraqi military units that accompanied the Americans into the Sunni communities. According to the Washington Post, "A police officer in Duluiyah, Capt. Qaid al-Azawi, accused American forces of standing by in Balad while [Shia] militiamen in police cars and police uniforms slaughtered Sunnis." In the face of these attacks, large numbers of residents began to flee.
And so the cycle of slaughter escalated on all sides, while neighborhoods began to be emptied of the members of whichever sect was losing ground locally. As with many other developments in the war, this unmitigated disaster for Baghdad residents was only a partial one for the American occupation. For the Bush administration, the storm of violence in the Iraqi capital had at least one silver lining: the occupation's two main enemies were now at each other's throats. As an American intelligence official told investigative reporter Seymour Hersh, "The White House believes that if American troops stay in Iraq long enough -- with enough troops -- the bad guys will end up killing each other."
The Surge
As Operation Together Forward continued, intense violence spread across the city. American combat fatalities reached a two-year high of 113 in November 2006, not in itself surprising since American troops were entering militia strongholds. Other statistics, however, defied American expectations.
The number of insurgent attacks, which should have declined, increased dramatically. A little under 100 a day through the first half of 2006, they jolted up to 140 a day soon after the offensive started, and then hovered between 160 and 180 for the rest of the year. The number of lethal bombings, a main target of the offensive, also rose. According to U.S. military statistics published by the Brookings Institution, in late 2005 they rose from under 20 to over 40 per month, and then started upward again as the American offensive began in the late spring of 2006, reaching 69 in December of that year. Deaths associated with these bombings soared from under 500 per month in early 2006 to almost 1,000 in the second half of the year. Population displacement also reached new heights -- especially in communities where the Americans were most active.
In response, the Americans sought a new plan for pacifying Baghdad. It would become known as "the surge." Rather than altering the fundamental premises of Operation Together Forward, it diagnosed the ferocious response as evidence that insufficient force had been applied.
Now, tens of thousands of new American troops would be poured into Baghdad, and to Operaton Together Forward's strategy would be added tactics from the 2004 assault on the Sunni city of Falluja. Each target area would now first be surrounded to prevent insurgents from escaping. Then, once the battle was joined, overwhelming firepower would be brought to bear. As Captain Paul Fowler had explained to Boston Globe reporter Anne Barnard during the Falluja fighting, ''The only way to root out [the insurgents] is to destroy everything in your path."
As in Falluja, the new surge plan also called for the Americans to remain in the community to prevent the insurgents from returning and to supervise the Iraqi army units they had led into battle.
The Battle of Haifa Street
Even before the surge strategy was announced by President Bush, even before the new troops arrived, the first battle was launched. Before dawn on January 9, 2007, the Americans and Iraqis attacked a Sunni insurgent stronghold on Haifa Street just outside the Green Zone. Washington Post reporters Sudarsan Raghavan and Joshua Partlow described the kind of firepower brought to bear once the battle for the street began:
"From rooftops and doorways, the gunmen fired AK-47 assault rifles and machine guns. Snipers also were targeting the U.S. and Iraqi soldiers. U.S. soldiers started firing back with 50-caliber machine guns mounted on their Stryker armored vehicles. They used TOW missiles and Mark-19 grenade launchers. The F-15 fighter jets strafed rooftops with cannons, while the [Apache helicopters] fired Hellfire missiles."
After 11 hours of death and devastation, 1,000 American and Iraqi troops were able to begin house-to-house searches, arresting or killing suspected insurgents.
One week later, McClatchy News reporters Nancy Youssef and Zaineb Obeid visited Haifa Street. They found massive destruction, omnipresent U.S. military forces locking down virtually all activity, widespread suffering among residents, and ongoing fighting. Elements of the Shia-dominated Iraqi army had already begun a systematic campaign to push the Sunni majority from the neighborhood:
"A 44-year-old Haifa Street resident, who asked to be identified only as Abu Mohammed for security reasons, said that only three or four [Sunni] families of an estimated 60 families remained on his block. He said no vehicles were allowed to drive through the area and that there was no electricity, kerosene or running water. [U.S.] Snipers have taken positions on the rooftops."
To the fleeing Sunnis, it seemed the Americans were sponsoring ethnic cleansing. A resident commented: "The Americans are doing nothing, as if they are backing the militias. If this plan continues for one more week, I don't think you will find one family left on Haifa Street."
By the end of January, before the first surge reinforcements even arrived, the battle of Haifa Street was over. A large contingent of American soldiers would remain in the area, while a vast cement barrier with a handful of heavily armored gates would be put in place, effectively separating the community from the rest of the city. The dislodged insurgents retreated into intermittent guerrilla war, organizing some 20 attacks on the Americans each month -- a sharp reduction from the 74 much larger battles they had fought in January. U.S. forces would mount an average of 34 combat patrols each day aimed at capturing or suppressing them. In January 2008, plans for an American departure from Haifa Street were still tentative.
The Results of the Surge
Haifa Street would become typical of many Baghdad communities that soon felt the full impact of the surge offensive. A year later, the neighborhood would still bear all the marks of battle. There had been no effort to restore public services, including the electrical grid or the system that should have supplied potable water; there were no medical services, nor was there any public transportation.
The New York Post's Ralph Peters summarized the posture of the Maliki government inside the Green Zone bluntly: "Iraq's government isn't much help -- none, as far as Haifa Street's revival is concerned." The American military commander on Haifa Street told him that the U.S. was relying on "spontaneous economic development" -- local citizens were expected to develop the area through their own efforts, with the help of a limited number of "micro-loans" (a few hundred dollars each) from the military's meager non-combat funds. It was no surprise, then, that, aside from a few food markets, there was no economy to speak of.
In the meantime, tens of thousands of mainly Sunni residents had left, with large parts of the area transformed from Sunni to Shia, and smaller sections moving in the other direction.
In January 2008, Lieutenant Colonel Tony Aguto, the U.S. commander in Haifa Street, estimated that some 50,000 of the area's 150,000 residents had been displaced in the previous year. In Baghdad as a whole, the United Nations High Commissioner on Refugees would estimate that the heavy surge fighting in the first half of 2007 was producing 90,000 refugees a month, the bulk from Baghdad; the 2007 total reached 800,000.
As ethnic cleansing in Haifa Street and elsewhere was completed, the rate of refugee production began to drop, declining to 30,000 by December 2007. Displaced Baghdadis searching desperately for places to settle faced the overwhelming challenge of supporting families in a largely dormant economy with dwindling government support. This was not, commented Lt. Col. Aguto, a problem the Americans needed to address. "It is," he said, "the job of the Iraqi government to sort this out." The Iraqi government remained mute on the subject.
The Ebb of the Surge
As the battle of Haifa Street illustrated, the surge amplified violence in the capital significantly, as for six months the Americans moved in on one neighborhood after another, using all the firepower at their command. When the heavy fighting ended in an invaded neighborhood, the Americans sought to consolidate their military victory by erecting those now-ubiquitous concrete barriers, ensuring the ethnic segregation of each neighborhood or partial neighborhood. These became demarcation lines and no-go boundaries in the city's civil war, the borders of a dis-integrated city.
The walls insured that there would be little or no physical, social, or economic contact among ghettoized, ethnically cleansed neighborhoods, even ones that had previously depended upon such intercourse for daily sustenance. The city's already compromised economy thus suffered another body blow. Residents of these newly defined ghettos, unable to get to jobs, became increasingly desperate, and, searching for solutions, lent support to the local militias that spoke and acted on their behalf.
As displacement efforts continued, the Shia militias essentially moved east to west across Baghdad, creating ever more Shia areas from previously mixed and Sunni neighborhoods. Mainly in the western and southern parts of Baghdad, the Sunni militias persevered, consolidating their control in areas that the Americans did not invade.
The ghettoization of Baghdad, which had begun relatively modestly in early 2005, reached a crescendo in early 2007 with the American surge and was largely completed by the fall of 2007. By that time, what had once been a city split between Sunnis and Shia had been transformed into a 75% Shia capital. The American military made its presence felt at checkpoints, at many small bases established around the city, and by patrols into neighborhoods now demarcated by cement barriers. The localities, however, were still governed by the local militias in what was no longer a city, but a ghettoized collection of micro-city-states.
The End of the Surge
After a spring and summer of heavy fighting, however, the Americans were hardly close to pacifying the city. In a way, the surge had worsened the situation. Before it began, in many neighborhoods neither Sunni nor Shia militias were dominant; by the middle of 2007, virtually every community had its own mini-government, usually dominated by a militia that was hostile both to the occupation and the central government. To assert centralized authority over the city, each neighborhood would have had to be invaded again.
Without announcing a change in policy, the Americans functionally abandoned the surge in the late summer 2007 in favor of a "live and let live" program of cooptation. On the Sunni side of the street, the Americans adopted a version of the Sunni "Awakening" movement that had arisen without American encouragement in Anbar Province the previous year, negotiating armed truces with their insurgent adversaries on a community-by-community basis. The Americans conceded to the militias the right to police their own communities, discontinued American offensives aimed at dislodging them, and halted the hated home invasions aimed at arresting or killing suspected insurgents. In exchange, the insurgents were to rein in attacks on American troops and suppress jihadist activity in their neighborhoods, thus curtailing the planning and execution of car bomb and other terrorist attacks on nearby Shia communities.
On the Shia side, the Americans essentially negotiated a ceasefire with the Mahdi Army, announced publicly as a unilateral stand-down by its leader Moqtada Al Sadr. The Sadrists curtailed the planting of lethal roadside bombs against the Americans and no longer sought to ambush American and Iraqi army troops moving through their neighborhoods. The Americans curtailed their raids and offensives in Sadrist neighborhoods and spent far less effort hunting down and arresting Sadrist leaders, except when they specifically broke the ceasefire.
The result of this double détente was a dramatic reduction in violence in Baghdad. With the Americans keeping their side of the bargain, the huge running battles associated with American attacks on Sunni strongholds like Haifa Street disappeared, and even the smaller battles resulting from American attempts to capture specific insurgents subsided. In return, attacks against American forward bases and convoys in Baghdad dwindled, and the jihadists, largely expelled from Sunni insurgent communities, either demobilized or moved to northern Iraq where negotiations with the insurgents had not taken place.
This was, however, little more than an armed truce among enemies, a truce that actually strengthened the militias within their own communities. The Sunni insurgents, now validated as legitimate police and even paid and armed by the Americans, began making political demands for the restoration of services, as well as for infrastructure reconstruction and job-creation programs for their desperate constituents, all the while denouncing the Iraqi government as a creature of U.S. and Iranian policy.
The Mahdi Army militias, having extended their influence into previously mixed neighborhoods, used the truce to spread their own meager but meaningful social service programs and demand increased access to resources that might revive the economy of the city. Their national spokesmen continued to insist that the country could not begin genuine reconstruction until the Americans left, and that the barriers they had played such a role in erecting -- sectarian as well as cement -- were removed.
Though many Baghdad communities are now experiencing their lowest levels of violence in two years, their situations are neither viable, nor stable. The cement barriers, which help to reduce violence, also make social and economic life nearly impossible. Most Baghdadis are now locked into their individual ghettos, terrified of strangers, often afraid to send their children to schools across barriers and neighborhoods, and unable to reach previously held jobs. Employers, deprived of needed workers and customers, have shuttered their establishments. The economy has largely ground to a halt.
For most of Baghdad, the Iraqi government is simply irrelevant. It has no administrative apparatus in any of these communities or the capacity to restore needed services. Its only visible presence, the Iraqi army, is commanded or controlled by American officers; insofar as Iraqi soldiers do act independently, they follow the leadership of Shia militia commanders, not the central government. In neighborhoods even a few hundred feet from the Green Zone, the Iraqi government does not exist.
The Americans remain a major presence, but not a sovereign one. They maintain the most fearsome of the militias in Baghdad, capable of militarily overwhelming any adversary, but incapable of creating stable rule, even in cement-encircled ghost areas like Haifa Street. They cannot deliver electricity, or water, or jobs, or even, often enough, safe passage to the next neighborhood.
As early as May of 2006, Nir Rosen, one of the most informed and insightful journalists writing about Iraq, presciently described the American military's unenviable position in this way: "[T]he American Army is lost in Iraq, as it has been since it arrived. Striking at Sunnis, striking at Shias, striking at mostly innocent people. Unable to distinguish between anybody, certainly unable to wield any power, except on the immediate street corner where it's located… [T]he Americans are just one more militia lost in the anarchy." This description was never truer than today in Baghdad.
The residents of Baghdad are waiting. They are waiting for the walls around their neighborhood to come down, public transportation to be restored, and roads to be re-opened so they can begin to move around the city in something like a normal fashion. They wait for public services to be rebuilt so they can count on turning on the lights, having clean water come out of taps, and perhaps even being able to contribute to "spontaneous economic development." They wait for employers to begin rehiring, so they can begin to support their suffering families.
They wait for the Americans to leave.
In a few weeks, General David Petraeus will tell the President and Congress that violence is dramatically reduced in Baghdad, that there are signs of political progress inside the Green Zone, and that these gains will be lost if the United States does not "stay the course." He will not say that Baghdad is an urban desert of half-destroyed buildings and next to no public services, dotted by partially deserted, mutually hostile mini-ghettos that used to be neighborhoods, surrounded by cement barriers reminiscent of medieval fortifications.
Go to Original
By Michael Schwartz
In early April, General David Petraeus, the flavor of the year in American military officers, will return to Washington to report to President Bush and the Democratic Congress on the state of post-surge Iraq. His report will be upbeat, with cautious notes thrown in, and the reception will be warm. The Republicans will congratulate the President, hoping that Americans will stop complaining and finally learn to tolerate, if not love, his war; the Democrats will be quietly unhappy because they would like Iraq to remain a major election issue.
In the meantime, the Iraqis will continue to endure the results of the surge, yet another brutal chapter in the endless war that once promised them liberation.
Over the course of five years, Baghdad, the capital city of Iraq, has been transformed from a metropolis into an urban desert of half-destroyed buildings and next to no public services, dotted by partially deserted, mutually hostile mini-ghettos that used to be neighborhoods, surrounded by cement barriers reminiscent of medieval fortifications. The most prominent of these ghettos is the heavily fortified city-inside-a-city dubbed the Green Zone, where Iraq's most fearsome militia, the United States military, is headquartered. It is governed by the Americans and by the American-sponsored Iraqi government, headed by Prime Minister Nouri al Maliki.
The remaining ghettos, large and small, are governed by local militias, most of them sworn enemies of the United States and the Maliki regime. In the expanding Shia areas of the capital, the local guardians are often members of the Mahdi Army, the militia of cleric Moqtada al-Sadr that has opposed the American presence since the occupation began. In the shrinking Sunni-controlled parts of the city, the local guardians are usually members of the Sahwa forces (the "Awakening" or, in U.S. military jargon, "Concerned Local Citizens"). The Americans have ceded to them control of their cement-enclosed domains as long as they discontinue insurgent attacks elsewhere.
As Baghdadi citizens continue to flee the threat of violence, ethnic cleansing, and economic destitution, the city waits -- whether for a definitive military confrontation or some less violent change that will bring its long ordeal to an end.
How did this all come to be?
Ethnic Cleansing Arrives in Baghdad
When the American occupation of Baghdad began in April 2003, about half of the city's neighborhoods had no particular ethnic character. In late 2004, however, thousands of Sunnis, driven out of Falluja and other insurgent strongholds by American offensives, began arriving in Baghdad. In increasingly crowded neighborhoods, ethnic friction rose, as did Sunni anger at a Shia-dominated government that sent its troops into battle beside American ones.
Sunni militias, originally organized to deal with local crime (after the Americans dismantled the Iraqi police force) began to turn on Shia residents in some of the capital's 200 mixed neighborhoods. Eventually, scattered acts of harassment were transformed into systematic campaigns of expulsion, justified by the housing needs of a rapidly growing multitude of Sunni refugees, and as retaliation for government-supported assaults on Sunni cities. During 2005, the first stream of displaced Shia began arriving in Baghdad's vast, already overcrowded Shia slum of Sadr City and in the Shia cities of southern Iraq.
In January 2006, the bombing of the revered Shia shrine, the Golden Dome mosque in Samarra, triggered sweeping Shia reprisals against Sunni communities. In the capital, a struggle for the dominance of mixed neighborhoods began. Deadly battles between Shia and Sunni militias featured all weapons and methods of slaughter available, including car bombs and death squads. Whichever side expelled the other, minority groups including Christians, Kurds, and Palestinians found themselves unwelcome and began to flee (or die). Ethnic cleansing now lay at the center of the spiraling violence in Baghdad.
The Americans Enter the Battle
In May 2006, American forces first joined "the battle for Baghdad" in a significant way. With the initiation of Operation Together Forward, the U.S. military began transferring combat brigades to the capital in an attempt to take control of Sunni and Shia militia strongholds.
This strategy, however, quickly proved itself ineffective. In August 2006, the New York Times reported that sectarian violence was "spiraling out of control." By the fall, the number of insurgents attacks in Baghdad had increased by 26%, and violent deaths reported at the city morgue had quadrupled. The seeming paradox of an American pacification campaign generating more violence can be explained by looking at the mechanics of the offensive.
Despite their involvement in ethnic violence, the Sunni and Shia militias that the Americans sought to root out were also the forces of law and order in Baghdad's otherwise lawless neighborhoods. They directed traffic, arrested and/or punished common criminals, and mediated disputes. They also protected neighborhoods from outsiders, including American or Iraqi soldiers, suicide bombers, death squads, and criminal gangs.
Before the Americans entered the fray, the militia strongholds had been the least vulnerable to sectarian attack. After all, their streets were saturated with armed men on the lookout for their enemies. Ethnic violence was largely taking place in contested mixed neighborhoods.
In entering these strongholds, the U.S. military won tactical victories, chasing surviving militia members off the streets or even out of neighborhoods, which, without their local police and defense forces, were suddenly vulnerable to sectarian attack.
This vulnerability was all-too-vividly illustrated in Sadr City, the stronghold of the Sadrist movement. As the home base of the Mahdi Army, this city-within-a-city had not experienced a car bomb attack in two years until American troops sealed it off, set up check points at key entrance and exit points, and began patrols aimed at hunting down Mahdi Army leaders they suspected of participating in death squads and of kidnapping an American soldier. Local residents told New York Times reporter Sabrina Tavernise that the operation had "forced Mahdi Army members who were patrolling the streets to vanish." Soon after, the first car bombs were detonated.
The violence reached a crescendo in November 2006, when a coordinated set of five car bombs killed at least 215 and wounded 257. Qusai Abdul-Wahab, a Sadrist member of parliament, spoke for many residents of the community when he told the Associated Press that the "occupation forces are fully responsible for these acts."
Such events generated immense bitterness among Shia, who took them as proof that the Americans and the Iraqi government were concerned only with attacking the Mahdis, not suppressing jihadist attacks. This encouraged their support of the death squads, which sought to exact retribution on the Sunni communities they believed were harboring the bombers.
The Americans had also facilitated these retaliatory attacks. Sunni insurgents in the Baghdad suburbs of Balad and Duluiyah, for example, were suspected of slaughtering 17 Shia workers in a particularly well publicized instance of sectarian brutality. American troops and their Iraqi allies cordoned off the two districts and invaded the neighborhoods. The invading forces quickly silenced the insurgent militias, leaving the streets unpatrolled. Soon after, Shia death squads made their appearance. Some of them had apparently been organized inside (Shia) Iraqi military units that accompanied the Americans into the Sunni communities. According to the Washington Post, "A police officer in Duluiyah, Capt. Qaid al-Azawi, accused American forces of standing by in Balad while [Shia] militiamen in police cars and police uniforms slaughtered Sunnis." In the face of these attacks, large numbers of residents began to flee.
And so the cycle of slaughter escalated on all sides, while neighborhoods began to be emptied of the members of whichever sect was losing ground locally. As with many other developments in the war, this unmitigated disaster for Baghdad residents was only a partial one for the American occupation. For the Bush administration, the storm of violence in the Iraqi capital had at least one silver lining: the occupation's two main enemies were now at each other's throats. As an American intelligence official told investigative reporter Seymour Hersh, "The White House believes that if American troops stay in Iraq long enough -- with enough troops -- the bad guys will end up killing each other."
The Surge
As Operation Together Forward continued, intense violence spread across the city. American combat fatalities reached a two-year high of 113 in November 2006, not in itself surprising since American troops were entering militia strongholds. Other statistics, however, defied American expectations.
The number of insurgent attacks, which should have declined, increased dramatically. A little under 100 a day through the first half of 2006, they jolted up to 140 a day soon after the offensive started, and then hovered between 160 and 180 for the rest of the year. The number of lethal bombings, a main target of the offensive, also rose. According to U.S. military statistics published by the Brookings Institution, in late 2005 they rose from under 20 to over 40 per month, and then started upward again as the American offensive began in the late spring of 2006, reaching 69 in December of that year. Deaths associated with these bombings soared from under 500 per month in early 2006 to almost 1,000 in the second half of the year. Population displacement also reached new heights -- especially in communities where the Americans were most active.
In response, the Americans sought a new plan for pacifying Baghdad. It would become known as "the surge." Rather than altering the fundamental premises of Operation Together Forward, it diagnosed the ferocious response as evidence that insufficient force had been applied.
Now, tens of thousands of new American troops would be poured into Baghdad, and to Operaton Together Forward's strategy would be added tactics from the 2004 assault on the Sunni city of Falluja. Each target area would now first be surrounded to prevent insurgents from escaping. Then, once the battle was joined, overwhelming firepower would be brought to bear. As Captain Paul Fowler had explained to Boston Globe reporter Anne Barnard during the Falluja fighting, ''The only way to root out [the insurgents] is to destroy everything in your path."
As in Falluja, the new surge plan also called for the Americans to remain in the community to prevent the insurgents from returning and to supervise the Iraqi army units they had led into battle.
The Battle of Haifa Street
Even before the surge strategy was announced by President Bush, even before the new troops arrived, the first battle was launched. Before dawn on January 9, 2007, the Americans and Iraqis attacked a Sunni insurgent stronghold on Haifa Street just outside the Green Zone. Washington Post reporters Sudarsan Raghavan and Joshua Partlow described the kind of firepower brought to bear once the battle for the street began:
"From rooftops and doorways, the gunmen fired AK-47 assault rifles and machine guns. Snipers also were targeting the U.S. and Iraqi soldiers. U.S. soldiers started firing back with 50-caliber machine guns mounted on their Stryker armored vehicles. They used TOW missiles and Mark-19 grenade launchers. The F-15 fighter jets strafed rooftops with cannons, while the [Apache helicopters] fired Hellfire missiles."
After 11 hours of death and devastation, 1,000 American and Iraqi troops were able to begin house-to-house searches, arresting or killing suspected insurgents.
One week later, McClatchy News reporters Nancy Youssef and Zaineb Obeid visited Haifa Street. They found massive destruction, omnipresent U.S. military forces locking down virtually all activity, widespread suffering among residents, and ongoing fighting. Elements of the Shia-dominated Iraqi army had already begun a systematic campaign to push the Sunni majority from the neighborhood:
"A 44-year-old Haifa Street resident, who asked to be identified only as Abu Mohammed for security reasons, said that only three or four [Sunni] families of an estimated 60 families remained on his block. He said no vehicles were allowed to drive through the area and that there was no electricity, kerosene or running water. [U.S.] Snipers have taken positions on the rooftops."
To the fleeing Sunnis, it seemed the Americans were sponsoring ethnic cleansing. A resident commented: "The Americans are doing nothing, as if they are backing the militias. If this plan continues for one more week, I don't think you will find one family left on Haifa Street."
By the end of January, before the first surge reinforcements even arrived, the battle of Haifa Street was over. A large contingent of American soldiers would remain in the area, while a vast cement barrier with a handful of heavily armored gates would be put in place, effectively separating the community from the rest of the city. The dislodged insurgents retreated into intermittent guerrilla war, organizing some 20 attacks on the Americans each month -- a sharp reduction from the 74 much larger battles they had fought in January. U.S. forces would mount an average of 34 combat patrols each day aimed at capturing or suppressing them. In January 2008, plans for an American departure from Haifa Street were still tentative.
The Results of the Surge
Haifa Street would become typical of many Baghdad communities that soon felt the full impact of the surge offensive. A year later, the neighborhood would still bear all the marks of battle. There had been no effort to restore public services, including the electrical grid or the system that should have supplied potable water; there were no medical services, nor was there any public transportation.
The New York Post's Ralph Peters summarized the posture of the Maliki government inside the Green Zone bluntly: "Iraq's government isn't much help -- none, as far as Haifa Street's revival is concerned." The American military commander on Haifa Street told him that the U.S. was relying on "spontaneous economic development" -- local citizens were expected to develop the area through their own efforts, with the help of a limited number of "micro-loans" (a few hundred dollars each) from the military's meager non-combat funds. It was no surprise, then, that, aside from a few food markets, there was no economy to speak of.
In the meantime, tens of thousands of mainly Sunni residents had left, with large parts of the area transformed from Sunni to Shia, and smaller sections moving in the other direction.
In January 2008, Lieutenant Colonel Tony Aguto, the U.S. commander in Haifa Street, estimated that some 50,000 of the area's 150,000 residents had been displaced in the previous year. In Baghdad as a whole, the United Nations High Commissioner on Refugees would estimate that the heavy surge fighting in the first half of 2007 was producing 90,000 refugees a month, the bulk from Baghdad; the 2007 total reached 800,000.
As ethnic cleansing in Haifa Street and elsewhere was completed, the rate of refugee production began to drop, declining to 30,000 by December 2007. Displaced Baghdadis searching desperately for places to settle faced the overwhelming challenge of supporting families in a largely dormant economy with dwindling government support. This was not, commented Lt. Col. Aguto, a problem the Americans needed to address. "It is," he said, "the job of the Iraqi government to sort this out." The Iraqi government remained mute on the subject.
The Ebb of the Surge
As the battle of Haifa Street illustrated, the surge amplified violence in the capital significantly, as for six months the Americans moved in on one neighborhood after another, using all the firepower at their command. When the heavy fighting ended in an invaded neighborhood, the Americans sought to consolidate their military victory by erecting those now-ubiquitous concrete barriers, ensuring the ethnic segregation of each neighborhood or partial neighborhood. These became demarcation lines and no-go boundaries in the city's civil war, the borders of a dis-integrated city.
The walls insured that there would be little or no physical, social, or economic contact among ghettoized, ethnically cleansed neighborhoods, even ones that had previously depended upon such intercourse for daily sustenance. The city's already compromised economy thus suffered another body blow. Residents of these newly defined ghettos, unable to get to jobs, became increasingly desperate, and, searching for solutions, lent support to the local militias that spoke and acted on their behalf.
As displacement efforts continued, the Shia militias essentially moved east to west across Baghdad, creating ever more Shia areas from previously mixed and Sunni neighborhoods. Mainly in the western and southern parts of Baghdad, the Sunni militias persevered, consolidating their control in areas that the Americans did not invade.
The ghettoization of Baghdad, which had begun relatively modestly in early 2005, reached a crescendo in early 2007 with the American surge and was largely completed by the fall of 2007. By that time, what had once been a city split between Sunnis and Shia had been transformed into a 75% Shia capital. The American military made its presence felt at checkpoints, at many small bases established around the city, and by patrols into neighborhoods now demarcated by cement barriers. The localities, however, were still governed by the local militias in what was no longer a city, but a ghettoized collection of micro-city-states.
The End of the Surge
After a spring and summer of heavy fighting, however, the Americans were hardly close to pacifying the city. In a way, the surge had worsened the situation. Before it began, in many neighborhoods neither Sunni nor Shia militias were dominant; by the middle of 2007, virtually every community had its own mini-government, usually dominated by a militia that was hostile both to the occupation and the central government. To assert centralized authority over the city, each neighborhood would have had to be invaded again.
Without announcing a change in policy, the Americans functionally abandoned the surge in the late summer 2007 in favor of a "live and let live" program of cooptation. On the Sunni side of the street, the Americans adopted a version of the Sunni "Awakening" movement that had arisen without American encouragement in Anbar Province the previous year, negotiating armed truces with their insurgent adversaries on a community-by-community basis. The Americans conceded to the militias the right to police their own communities, discontinued American offensives aimed at dislodging them, and halted the hated home invasions aimed at arresting or killing suspected insurgents. In exchange, the insurgents were to rein in attacks on American troops and suppress jihadist activity in their neighborhoods, thus curtailing the planning and execution of car bomb and other terrorist attacks on nearby Shia communities.
On the Shia side, the Americans essentially negotiated a ceasefire with the Mahdi Army, announced publicly as a unilateral stand-down by its leader Moqtada Al Sadr. The Sadrists curtailed the planting of lethal roadside bombs against the Americans and no longer sought to ambush American and Iraqi army troops moving through their neighborhoods. The Americans curtailed their raids and offensives in Sadrist neighborhoods and spent far less effort hunting down and arresting Sadrist leaders, except when they specifically broke the ceasefire.
The result of this double détente was a dramatic reduction in violence in Baghdad. With the Americans keeping their side of the bargain, the huge running battles associated with American attacks on Sunni strongholds like Haifa Street disappeared, and even the smaller battles resulting from American attempts to capture specific insurgents subsided. In return, attacks against American forward bases and convoys in Baghdad dwindled, and the jihadists, largely expelled from Sunni insurgent communities, either demobilized or moved to northern Iraq where negotiations with the insurgents had not taken place.
This was, however, little more than an armed truce among enemies, a truce that actually strengthened the militias within their own communities. The Sunni insurgents, now validated as legitimate police and even paid and armed by the Americans, began making political demands for the restoration of services, as well as for infrastructure reconstruction and job-creation programs for their desperate constituents, all the while denouncing the Iraqi government as a creature of U.S. and Iranian policy.
The Mahdi Army militias, having extended their influence into previously mixed neighborhoods, used the truce to spread their own meager but meaningful social service programs and demand increased access to resources that might revive the economy of the city. Their national spokesmen continued to insist that the country could not begin genuine reconstruction until the Americans left, and that the barriers they had played such a role in erecting -- sectarian as well as cement -- were removed.
Though many Baghdad communities are now experiencing their lowest levels of violence in two years, their situations are neither viable, nor stable. The cement barriers, which help to reduce violence, also make social and economic life nearly impossible. Most Baghdadis are now locked into their individual ghettos, terrified of strangers, often afraid to send their children to schools across barriers and neighborhoods, and unable to reach previously held jobs. Employers, deprived of needed workers and customers, have shuttered their establishments. The economy has largely ground to a halt.
For most of Baghdad, the Iraqi government is simply irrelevant. It has no administrative apparatus in any of these communities or the capacity to restore needed services. Its only visible presence, the Iraqi army, is commanded or controlled by American officers; insofar as Iraqi soldiers do act independently, they follow the leadership of Shia militia commanders, not the central government. In neighborhoods even a few hundred feet from the Green Zone, the Iraqi government does not exist.
The Americans remain a major presence, but not a sovereign one. They maintain the most fearsome of the militias in Baghdad, capable of militarily overwhelming any adversary, but incapable of creating stable rule, even in cement-encircled ghost areas like Haifa Street. They cannot deliver electricity, or water, or jobs, or even, often enough, safe passage to the next neighborhood.
As early as May of 2006, Nir Rosen, one of the most informed and insightful journalists writing about Iraq, presciently described the American military's unenviable position in this way: "[T]he American Army is lost in Iraq, as it has been since it arrived. Striking at Sunnis, striking at Shias, striking at mostly innocent people. Unable to distinguish between anybody, certainly unable to wield any power, except on the immediate street corner where it's located… [T]he Americans are just one more militia lost in the anarchy." This description was never truer than today in Baghdad.
The residents of Baghdad are waiting. They are waiting for the walls around their neighborhood to come down, public transportation to be restored, and roads to be re-opened so they can begin to move around the city in something like a normal fashion. They wait for public services to be rebuilt so they can count on turning on the lights, having clean water come out of taps, and perhaps even being able to contribute to "spontaneous economic development." They wait for employers to begin rehiring, so they can begin to support their suffering families.
They wait for the Americans to leave.
In a few weeks, General David Petraeus will tell the President and Congress that violence is dramatically reduced in Baghdad, that there are signs of political progress inside the Green Zone, and that these gains will be lost if the United States does not "stay the course." He will not say that Baghdad is an urban desert of half-destroyed buildings and next to no public services, dotted by partially deserted, mutually hostile mini-ghettos that used to be neighborhoods, surrounded by cement barriers reminiscent of medieval fortifications.
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