Bioterrorism
Preventing a greater threat
OPINION
By Bob Graham
Thursday, December 18, 2008
In May 2002, I visited Pokrov, a largely abandoned Soviet-era agricultural research center east of Moscow. Originally established to produce vaccines for animals, Pokrov became a laboratory for biological weapons, especially anthrax, in the final years of the Cold War.
We entered the building, which stored samples of all the materials produced at Pokrov. The woven wire and electrified fence that at one time had secured the building was a fallen, rusting heap. The security alarm to the main entrance had been turned off and the door was ajar.
Up two flights of steel-grate stairs were the storage rooms, two tennis court-sized rooms filled with commercial refrigerators. Several refrigerators had two common features: note cards listing the materials inside and flimsy strings encircling them. Our hosts explained that a broken string would indicate that someone had possibly opened the refrigerator and stolen the materials inside.
I left Pokrov without much confidence in the security afforded the most lethal biological materials in the world.
Earlier this month, the Commission on Weapons of Mass Destruction Proliferation and Terrorism, which I chaired, presented its final report, "World At Risk," to President Bush, Vice President-elect Joe Biden and congressional leaders.
The report concluded that "unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013."
But the type of catastrophe may be a surprise to some. In fact: "Terrorists are more likely to be able to obtain and use a biological weapon than a nuclear weapon."
The closest the United States has come to a bioterrorist attack was in October 2001, when letters contaminated with anthrax bacterial spores were mailed to two senators, a television anchorman and an employee of the National Enquirer.
Seven letters were mailed, containing less than 15 teaspoons of anthrax. This miniscule quantity resulted in five deaths, placed 30,000 people at risk, closed government buildings for months and produced economic damage estimated at $6 billion.
It isn't hard to imagine the consequences in death, destruction, panic, and dollars of a large-scale biological attack using anthrax spores manufactured from a vial like those in the refrigerators at Pokrov.
Biological materials are more ubiquitous and less secure than nuclear.
Since the fall of the Soviet Union, the United States and its allies have wisely expended tens of billions of dollars to identify, capture, and secure nuclear materials.
The same cannot be said for lethal pathogens. The United States has cut back its biological threat reduction programs in Russia, and the Russians have refused greater transparency at their Ministry of Defense controlled biological weapons facilities. There is little reason to believe that the lethal pathogens of Pokrov are secure from falling into terrorist hands.
While the rugged and persistent anthrax spores remain the pathogen of first resort, the last two decades have seen an explosion of biological dangers.
Since 9/11, the federal government has poured billions into defensive research on pathogens that might be used for bioterrorism.
There are now 14,000 U.S. scientists authorized to work on these materials, increasing the risk of a few bad apples with access. Shockingly, there continues to be no comprehensive regulation within the United States or internationally of the sites where lethal pathogens are produced or of the scientists capable of their production.
Al Qaeda remains intent on securing lethal pathogens for use against the United States. Agents of Osama bin Laden have been intercepted attempting to procure biological capabilities and materials in Europe and Asia.
The laboratories we discovered in Kandahar after the October 2001 invasion of Afghanistan have been relocated to the tribal areas of Pakistan. As Richard Danzig, former secretary of the navy, has observed, "Only a thin wall of terrorists' ignorance and inexperience now protects us."
Nuclear terrorism has been described as the ultimate preventable catastrophe. We hope so, and we also hope and believe our commission report has created a roadmap for significantly reducing the risk that the worst bacteria and viruses will fall into the hands of the worst terrorists and nations.
Bob Graham, a former governor of Florida and U.S. senator, was chairman of the Commission on Weapons of Mass Destruction Proliferation and Terrorism.
Thursday, December 18, 2008
In May 2002, I visited Pokrov, a largely abandoned Soviet-era agricultural research center east of Moscow. Originally established to produce vaccines for animals, Pokrov became a laboratory for biological weapons, especially anthrax, in the final years of the Cold War.
We entered the building, which stored samples of all the materials produced at Pokrov. The woven wire and electrified fence that at one time had secured the building was a fallen, rusting heap. The security alarm to the main entrance had been turned off and the door was ajar.
Up two flights of steel-grate stairs were the storage rooms, two tennis court-sized rooms filled with commercial refrigerators. Several refrigerators had two common features: note cards listing the materials inside and flimsy strings encircling them. Our hosts explained that a broken string would indicate that someone had possibly opened the refrigerator and stolen the materials inside.
I left Pokrov without much confidence in the security afforded the most lethal biological materials in the world.
Earlier this month, the Commission on Weapons of Mass Destruction Proliferation and Terrorism, which I chaired, presented its final report, "World At Risk," to President Bush, Vice President-elect Joe Biden and congressional leaders.
The report concluded that "unless the world community acts decisively and with great urgency, it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013."
But the type of catastrophe may be a surprise to some. In fact: "Terrorists are more likely to be able to obtain and use a biological weapon than a nuclear weapon."
The closest the United States has come to a bioterrorist attack was in October 2001, when letters contaminated with anthrax bacterial spores were mailed to two senators, a television anchorman and an employee of the National Enquirer.
Seven letters were mailed, containing less than 15 teaspoons of anthrax. This miniscule quantity resulted in five deaths, placed 30,000 people at risk, closed government buildings for months and produced economic damage estimated at $6 billion.
It isn't hard to imagine the consequences in death, destruction, panic, and dollars of a large-scale biological attack using anthrax spores manufactured from a vial like those in the refrigerators at Pokrov.
Biological materials are more ubiquitous and less secure than nuclear.
Since the fall of the Soviet Union, the United States and its allies have wisely expended tens of billions of dollars to identify, capture, and secure nuclear materials.
The same cannot be said for lethal pathogens. The United States has cut back its biological threat reduction programs in Russia, and the Russians have refused greater transparency at their Ministry of Defense controlled biological weapons facilities. There is little reason to believe that the lethal pathogens of Pokrov are secure from falling into terrorist hands.
While the rugged and persistent anthrax spores remain the pathogen of first resort, the last two decades have seen an explosion of biological dangers.
Since 9/11, the federal government has poured billions into defensive research on pathogens that might be used for bioterrorism.
There are now 14,000 U.S. scientists authorized to work on these materials, increasing the risk of a few bad apples with access. Shockingly, there continues to be no comprehensive regulation within the United States or internationally of the sites where lethal pathogens are produced or of the scientists capable of their production.
Al Qaeda remains intent on securing lethal pathogens for use against the United States. Agents of Osama bin Laden have been intercepted attempting to procure biological capabilities and materials in Europe and Asia.
The laboratories we discovered in Kandahar after the October 2001 invasion of Afghanistan have been relocated to the tribal areas of Pakistan. As Richard Danzig, former secretary of the navy, has observed, "Only a thin wall of terrorists' ignorance and inexperience now protects us."
Nuclear terrorism has been described as the ultimate preventable catastrophe. We hope so, and we also hope and believe our commission report has created a roadmap for significantly reducing the risk that the worst bacteria and viruses will fall into the hands of the worst terrorists and nations.
Bob Graham, a former governor of Florida and U.S. senator, was chairman of the Commission on Weapons of Mass Destruction Proliferation and Terrorism.
Moroccan gets 20 yrs in jail for Madrid bomb links
Reuters
Thursday, December 18, 2008
RABAT: A Moroccan man was jailed for 20 years on Thursday for links to the 2004 Madrid train bombings that killed 191 people, the state news agency MAP reported.
Abdelilah Hriz, 29, was found guilty of forming a criminal gang and a series a terrorism-related offences including helping to destroy public property using explosives, MAP said, citing the judgement of the Sale criminal appeal court, near Rabat.
Prosecutors had requested life imprisonment based on the charges, which also included collecting funds for terrorism. Hriz denied any involvement in the attacks.
Hriz, from the northern Moroccan city of Kenitra, was arrested in Syria and transferred to Morocco where a court sentenced him to three years in prison. But he was acquitted in May 2007 for lack of evidence.
In February, Hriz was detained again after Spanish investigators produced new evidence which they said linked him to the attacks.
A Spanish judge travelled to Morocco and took DNA samples from Hriz that matched samples picked up in two places linked to the attacks, MAP said, quoting Spanish police laboratory tests.
Ten bombs, packed into sports bags and detonated with mobile phones, tore through packed commuter trains on the morning of March 11, 2004.
Three weeks later seven men, including two suspected ringleaders of the bombings, blew themselves up in an apartment after police closed in on them.
Following a lengthy trial, a Spanish court last year sentenced two Moroccans and a Spaniard to 42,924 years in jail for the attacks.
The high nominal sentences reflected convictions on multiple counts but under Spanish law nobody can serve more than 40 years in jail.
(Reporting by Tom Pfeiffer, editing by Nita Bhalla)
0404
South Korea trade fight gets ugly
By Martin Fackler
Thursday, December 18, 2008
TOKYO: The parliamentary battle over a contentious free trade deal in South Korea led to a confrontation on Thursday in which opposition lawmakers used a sledgehammer to knock down the doors of a blockaded room in which a committee was discussing the agreement.
Television footage showed fire extinguishers being sprayed at the opposition lawmakers trying to get into the room . At least one person was shown bleeding from the face.
The members of the opposition Democratic Party were trying to stop the trade agreement with the United States from advancing to the floor of parliament for a final vote. The governing party has been seeking to ratify the trade pact by year's end, saying it would improve South Korea's competitiveness and ties with the United States. Opponents say it will hurt South Korean farmers.
Violent clashes in the South Korean parliament, called the National Assembly, are not unheard of, reflecting the nation's feisty brand of democracy. The trade agreement with the United States has been a particularly thorny issue, after massive demonstrations in Seoul earlier this year against the import of American beef.
Thursday's assault came after the opposition party had threatened to block the deal by using physical force if necessary. Fearing an attack, members of the foreign affairs committee, under control of the governing Grand National Party, had barricaded themselves inside the room as they met.
Security guards and aides from the governing party stood outside the barricaded doors, where scuffles broke out when a dozen opposition lawmakers showed up. The opposition lawmakers then used at least one sledgehammer and crowbars to tear through the doors, only to be thwarted by piles of furniture thrown up as a second line of defense.
The mayhem failed to prevent the pact from being formally introduced to the committee, a step in the process of bringing it to a full parliamentary vote.
The deal to lower tariffs and other trade barriers was signed last year by negotiators from South Korea and the United States, but cannot take effect until ratified by lawmakers in both nations.
The pact faces stiff opposition in United States Congress, where many fear it could disadvantage struggling American automakers.
By Martin Fackler
Thursday, December 18, 2008
TOKYO: The parliamentary battle over a contentious free trade deal in South Korea led to a confrontation on Thursday in which opposition lawmakers used a sledgehammer to knock down the doors of a blockaded room in which a committee was discussing the agreement.
Television footage showed fire extinguishers being sprayed at the opposition lawmakers trying to get into the room . At least one person was shown bleeding from the face.
The members of the opposition Democratic Party were trying to stop the trade agreement with the United States from advancing to the floor of parliament for a final vote. The governing party has been seeking to ratify the trade pact by year's end, saying it would improve South Korea's competitiveness and ties with the United States. Opponents say it will hurt South Korean farmers.
Violent clashes in the South Korean parliament, called the National Assembly, are not unheard of, reflecting the nation's feisty brand of democracy. The trade agreement with the United States has been a particularly thorny issue, after massive demonstrations in Seoul earlier this year against the import of American beef.
Thursday's assault came after the opposition party had threatened to block the deal by using physical force if necessary. Fearing an attack, members of the foreign affairs committee, under control of the governing Grand National Party, had barricaded themselves inside the room as they met.
Security guards and aides from the governing party stood outside the barricaded doors, where scuffles broke out when a dozen opposition lawmakers showed up. The opposition lawmakers then used at least one sledgehammer and crowbars to tear through the doors, only to be thwarted by piles of furniture thrown up as a second line of defense.
The mayhem failed to prevent the pact from being formally introduced to the committee, a step in the process of bringing it to a full parliamentary vote.
The deal to lower tariffs and other trade barriers was signed last year by negotiators from South Korea and the United States, but cannot take effect until ratified by lawmakers in both nations.
The pact faces stiff opposition in United States Congress, where many fear it could disadvantage struggling American automakers.
*****************
Chinese author of book on famine braves risks to inform new generations
By Verna Yu
Thursday, December 18, 2008
BEIJING: For such a bold writer, Yang Jisheng comes across as a surprisingly quiet, almost shy, scholarly man. Yet this slightly built 68-year-old retiree has become something of a thorn in the side of the Chinese authorities in recent years.
After a 35-year stint as a journalist for Xinhua, the official Chinese news agency, Yang has made a name for himself writing about things the Chinese Communist Party would rather people forgot.
His latest book, "Mu Bei" ("Tombstone"), published this year in Hong Kong, has been hailed as the most comprehensive and authoritative account by a mainland Chinese writer of the Great Famine of late 1958 to 1962, which was precipitated by the calamitous economic policies of Mao's Great Leap Forward and cost the lives of tens of millions of Chinese.
The title, he writes in the opening passage, has several meanings: "It's a tombstone for my father who died of starvation in 1959, it's a tombstone for the 36 million Chinese who starved to death, it's a tombstone for the system that led to the Great Famine."
He adds: "There was also a great political risk involved in writing this book. If something happens to me because of this, at least I'm making a sacrifice for the sake of my ideals, so this would also be a tombstone for myself."
The two-volume, 1,100-page work is banned in China, as is his previous book, "Political Struggles in China's Age of Reform," which contains his account of the 1989 military crackdown on student-led pro-democracy demonstrations in Tiananmen Square and three interviews with former Prime Minister Zhao Ziyang. Zhao, who was purged for sympathizing with the students, met with Yang while under house arrest.
The authorities were so nervous about that first book - the interviews had been publicized in the overseas press - that they summoned him several times and ordered him to cancel its publication. He refused, and it was released in Hong Kong in 2004. After Zhao died in 2005, Yang was monitored by a plainclothes police officer to ensure he did not attend the funeral.
"My wife was really quite scared, but she couldn't stop me," he laughed in an interview in the office of the history journal Yanhuang Chunqiu, where he is deputy publisher. "She didn't want me to write, because that had led to a lot of trouble."
Why then does he feel compelled to write about such sensitive topics?
"There are too many lies in China in the past, even history can be fabricated," said Yang, in the earthy accent of his native Hubei Province.
"Deceiving children is a sin," he said. "But they have deceived two, three generations of people already, so this generation cannot lie to the next generation again."
He said for many young Chinese today, events like the famine, the Cultural Revolution and the Tiananmen crackdown hardly register. So he feels it imperative that he write down what he knows and has seen.
Yang says that he himself was among those deceived and, as a state journalist, propagated the lies he was told.
After he graduated from Tsinghua University in Beijing in 1966, the year the decade-long Cultural Revolution began, he was assigned to be a reporter at Xinhua. Like other journalists at the time, he followed Communist Party guidelines, writing nothing but praise of the leadership.
"When I looked through hundreds of stories I wrote during the Cultural Revolution, I realized that over 90 percent of them could not stand the test of history," he said. "You could say I'm not personally responsible, but I feel I owe it to history."
A fervent adherent of Communist ideals in his early years, Yang said he long believed that Mao's Great Leap Forward - an ambitious plan of rapid industrialization - was a success, even though his own father was among its victims. In 1959, he did not occur to him that his father's death was part of a larger man-made catastrophe.
"I didn't blame the government at all. I didn't know what was happening in faraway places. I thought what happened in my home village was an isolated phenomenon," said Yang, who at the time was working at a school elsewhere in the country.
It was not until nearly a decade later that he learned, from a Red Guard document, that the governor of Hubei had said that 300,000 had died in his province alone during the famine.
"Once I realized we had been deceived, a strong feeling grew within me," he said. "The more they wanted to hide the truth, the more I wanted to seek the truth."
To produce "Tombstone," Yang spent more than a decade conducting meticulous research and extensive interviews with witnesses and academics across China. As a Xinhua journalist, he had access to archival materials.
"It is clearly the most thorough historical description of the Great Leap Famine in any language," said Dali Yang, a political scientist at the University of Chicago, who has also written about the famine and its consequences.
Working from official population statistics and his own estimates of under-reported deaths based on his investigations, Yang Jisheng concluded that at least 36 million people died of starvation during the famine.
Yang's book describes horrendous scenes. Desperate people ate anything they could find: roots, bark, mud, bird droppings and, when these ran out, human flesh from corpses on the street or even of their own relatives.
In Tongwei County in the northwestern province of Gansu, one of the worst- affected regions, as much as a third of the population died, Yang writes. One witness told him that corpses lay everywhere, in ditches, by roads, in farm fields. Those still alive looked for bodies to eat. One young woman killed and ate her own daughter.
But this catastrophe has remained a taboo subject. The Chinese government still plays down the man-made disaster as "three years of natural disasters."
But Yang puts the blame squarely on Mao's policies. During the Great Leap, farmers had to leave their crops untended to work at steel production. While harvests fell, local officials exaggerated production figures to please Mao. Because provinces delivered crops to the state to supply cities and export quotas based on those inflated figures, farmers were left to starve. No one dared to speak out, fearful of questioning Mao.
Although there are already several books on the topic by overseas authors, Yang thought it was time that a mainland Chinese tackled this grim chapter of history. "If a country cannot face its past, it has no future," Yang said.
He came to this conclusion after the 1989 Tiananmen crackdown, in which hundreds of civilians were killed.
"That incident really shook me," Yang said. "After that, I felt that we should really be more critical of our political system and reflect more deeply upon those past lies."
Yang, a Communist Party member, said he wrote the book in the hope that the party could learn from past mistakes and pursue political reform. He thinks China should adopt a multi-party system and not be "an obstacle in history" standing in the way of the broader trend toward democracy.
Yang knew he could be censured for writing candid accounts. "I'm in my 60s," he said. "If I end up in jail for the sake of my book, it's nothing to be ashamed of. I'd see that as an honor."
But, while the book cannot be published here, he has been pleasantly surprised that no one from the government has summoned him for a reprimand.
"At least they are allowing me to talk about this, this is relatively open-minded of them," he said. "This would have never been possible, say, 10 or 20 years ago."
By Verna Yu
Thursday, December 18, 2008
BEIJING: For such a bold writer, Yang Jisheng comes across as a surprisingly quiet, almost shy, scholarly man. Yet this slightly built 68-year-old retiree has become something of a thorn in the side of the Chinese authorities in recent years.
After a 35-year stint as a journalist for Xinhua, the official Chinese news agency, Yang has made a name for himself writing about things the Chinese Communist Party would rather people forgot.
His latest book, "Mu Bei" ("Tombstone"), published this year in Hong Kong, has been hailed as the most comprehensive and authoritative account by a mainland Chinese writer of the Great Famine of late 1958 to 1962, which was precipitated by the calamitous economic policies of Mao's Great Leap Forward and cost the lives of tens of millions of Chinese.
The title, he writes in the opening passage, has several meanings: "It's a tombstone for my father who died of starvation in 1959, it's a tombstone for the 36 million Chinese who starved to death, it's a tombstone for the system that led to the Great Famine."
He adds: "There was also a great political risk involved in writing this book. If something happens to me because of this, at least I'm making a sacrifice for the sake of my ideals, so this would also be a tombstone for myself."
The two-volume, 1,100-page work is banned in China, as is his previous book, "Political Struggles in China's Age of Reform," which contains his account of the 1989 military crackdown on student-led pro-democracy demonstrations in Tiananmen Square and three interviews with former Prime Minister Zhao Ziyang. Zhao, who was purged for sympathizing with the students, met with Yang while under house arrest.
The authorities were so nervous about that first book - the interviews had been publicized in the overseas press - that they summoned him several times and ordered him to cancel its publication. He refused, and it was released in Hong Kong in 2004. After Zhao died in 2005, Yang was monitored by a plainclothes police officer to ensure he did not attend the funeral.
"My wife was really quite scared, but she couldn't stop me," he laughed in an interview in the office of the history journal Yanhuang Chunqiu, where he is deputy publisher. "She didn't want me to write, because that had led to a lot of trouble."
Why then does he feel compelled to write about such sensitive topics?
"There are too many lies in China in the past, even history can be fabricated," said Yang, in the earthy accent of his native Hubei Province.
"Deceiving children is a sin," he said. "But they have deceived two, three generations of people already, so this generation cannot lie to the next generation again."
He said for many young Chinese today, events like the famine, the Cultural Revolution and the Tiananmen crackdown hardly register. So he feels it imperative that he write down what he knows and has seen.
Yang says that he himself was among those deceived and, as a state journalist, propagated the lies he was told.
After he graduated from Tsinghua University in Beijing in 1966, the year the decade-long Cultural Revolution began, he was assigned to be a reporter at Xinhua. Like other journalists at the time, he followed Communist Party guidelines, writing nothing but praise of the leadership.
"When I looked through hundreds of stories I wrote during the Cultural Revolution, I realized that over 90 percent of them could not stand the test of history," he said. "You could say I'm not personally responsible, but I feel I owe it to history."
A fervent adherent of Communist ideals in his early years, Yang said he long believed that Mao's Great Leap Forward - an ambitious plan of rapid industrialization - was a success, even though his own father was among its victims. In 1959, he did not occur to him that his father's death was part of a larger man-made catastrophe.
"I didn't blame the government at all. I didn't know what was happening in faraway places. I thought what happened in my home village was an isolated phenomenon," said Yang, who at the time was working at a school elsewhere in the country.
It was not until nearly a decade later that he learned, from a Red Guard document, that the governor of Hubei had said that 300,000 had died in his province alone during the famine.
"Once I realized we had been deceived, a strong feeling grew within me," he said. "The more they wanted to hide the truth, the more I wanted to seek the truth."
To produce "Tombstone," Yang spent more than a decade conducting meticulous research and extensive interviews with witnesses and academics across China. As a Xinhua journalist, he had access to archival materials.
"It is clearly the most thorough historical description of the Great Leap Famine in any language," said Dali Yang, a political scientist at the University of Chicago, who has also written about the famine and its consequences.
Working from official population statistics and his own estimates of under-reported deaths based on his investigations, Yang Jisheng concluded that at least 36 million people died of starvation during the famine.
Yang's book describes horrendous scenes. Desperate people ate anything they could find: roots, bark, mud, bird droppings and, when these ran out, human flesh from corpses on the street or even of their own relatives.
In Tongwei County in the northwestern province of Gansu, one of the worst- affected regions, as much as a third of the population died, Yang writes. One witness told him that corpses lay everywhere, in ditches, by roads, in farm fields. Those still alive looked for bodies to eat. One young woman killed and ate her own daughter.
But this catastrophe has remained a taboo subject. The Chinese government still plays down the man-made disaster as "three years of natural disasters."
But Yang puts the blame squarely on Mao's policies. During the Great Leap, farmers had to leave their crops untended to work at steel production. While harvests fell, local officials exaggerated production figures to please Mao. Because provinces delivered crops to the state to supply cities and export quotas based on those inflated figures, farmers were left to starve. No one dared to speak out, fearful of questioning Mao.
Although there are already several books on the topic by overseas authors, Yang thought it was time that a mainland Chinese tackled this grim chapter of history. "If a country cannot face its past, it has no future," Yang said.
He came to this conclusion after the 1989 Tiananmen crackdown, in which hundreds of civilians were killed.
"That incident really shook me," Yang said. "After that, I felt that we should really be more critical of our political system and reflect more deeply upon those past lies."
Yang, a Communist Party member, said he wrote the book in the hope that the party could learn from past mistakes and pursue political reform. He thinks China should adopt a multi-party system and not be "an obstacle in history" standing in the way of the broader trend toward democracy.
Yang knew he could be censured for writing candid accounts. "I'm in my 60s," he said. "If I end up in jail for the sake of my book, it's nothing to be ashamed of. I'd see that as an honor."
But, while the book cannot be published here, he has been pleasantly surprised that no one from the government has summoned him for a reprimand.
"At least they are allowing me to talk about this, this is relatively open-minded of them," he said. "This would have never been possible, say, 10 or 20 years ago."
***************
Man pleads guilty to YouTube baby food threat
Reuters
Friday, December 19, 2008
NEW YORK: A New York man pleaded guilty on Thursday to posting videos on YouTube in which he claimed he had arranged to poison millions of containers of Gerber baby food with the intent to kill babies.
Anton Dunn, 43, who called himself "Trashman," pleaded guilty to one count of transmitting threats in interstate commerce and faces a maximum sentence of five years in prison, said acting U.S. attorney Lev Dassin.
Dunn posted his first video -- in which he wore a black mask -- on April 20, 2008, and followed up with a further two videos, posted on July 24 and July 27.
"In the video, entitled "gerbersbabyfoodalert," Dunn stated that Gerber employees acting at his direction had poisoned millions of bottles of Gerber baby food, to kill babies who ate it," Dassin said in a statement.
"Dunn further stated that it was "too late" to do anything about the poisoned baby food because it had already been shipped to consumers," he said.
Gerber, which is owned by Switzerland-based Nestle SA, found no evidence that anyone had tampered with its baby food.
Dunn will be sentenced on March 20.
(Reporting by Michelle Nichols, editing by Anthony Boadle)
Reuters
Friday, December 19, 2008
NEW YORK: A New York man pleaded guilty on Thursday to posting videos on YouTube in which he claimed he had arranged to poison millions of containers of Gerber baby food with the intent to kill babies.
Anton Dunn, 43, who called himself "Trashman," pleaded guilty to one count of transmitting threats in interstate commerce and faces a maximum sentence of five years in prison, said acting U.S. attorney Lev Dassin.
Dunn posted his first video -- in which he wore a black mask -- on April 20, 2008, and followed up with a further two videos, posted on July 24 and July 27.
"In the video, entitled "gerbersbabyfoodalert," Dunn stated that Gerber employees acting at his direction had poisoned millions of bottles of Gerber baby food, to kill babies who ate it," Dassin said in a statement.
"Dunn further stated that it was "too late" to do anything about the poisoned baby food because it had already been shipped to consumers," he said.
Gerber, which is owned by Switzerland-based Nestle SA, found no evidence that anyone had tampered with its baby food.
Dunn will be sentenced on March 20.
(Reporting by Michelle Nichols, editing by Anthony Boadle)
Assembly approves Sarkozy plan for French television
The Associated Press
Thursday, December 18, 2008
PARIS: Early in the New Year, advertising will begin to disappear from public television in France, the start of a major shakeup ordered by President Nicolas Ask that critics say will give him virtual control of the airwaves.
Sarkozy calls the change a "veritable cultural revolution" that will restore quality to public networks that have increasingly had to compete with the sometimes lower-brow programming of private channels.
The plan to pull ads from the country's four public channels, approved by the National Assembly on Wednesday night, also allows Sarkozy to select the chief of the French public broadcasting company, France Télévisions - alarming critics who say the project sends France back decades to the days when television was the tool of the presidency.
"The ultimate goal is nothing more than to put public television on a leash to prepare for the 2012 presidential elections," said Didier Mathus, a Socialist lawmaker who led a campaign against the legislation.
The plan will be enacted even though the Senate has not yet taken up the measure. It is expected to do so early next year. The plan calls for the gradual removal of all advertising from public broadcasting, beginning on Jan. 5 with prime time and overnight programming. The government will guarantee financing of €450 million, or $640 million, a year over the next three years to replace lost ad revenue.
Financing is to come mainly from two new taxes: a 0.9 percent tax on revenue of Internet service suppliers and telephone operators, foreign included, and a tax on advertising revenue of private TV channels - 1.5 percent to 3 percent depending on how well they fare from year to year.
Sarkozy has said the goal is to restore the networks' public service identity, lost in ratings wars with private channels, mainly TF1, the most widely watched station in France. The president's office has said the reform amounts to a lifeline as ad revenues are threatened by recession.
Detractors contend that the revamp is a thinly camouflaged boost for TF1, which is owned by Martin Bouygues, a close friend of Sarkozy's for 30 years. They say TF1 will win much of the advertising lost by public networks.
Sarkozy has been accused of being too close to media chiefs ever since he was elected in May last year.
"Even if Sarkozy has no such evil intentions," said Divina Frau-Meigs, a media sociology professor at the Sorbonne, "the suspicion is there."
The unions representing journalists said they feared that the plan would lead to cost cuts and job losses. They have called for a strike on Jan. 5 to protest.
Sarkozy's revisions have historical precedent: nearly all presidents of the Fifth Republic have reorganized the airwaves. In 1959, Charles de Gaulle created the public television monolith known as ORTF, a virtual propaganda tool. President François Mitterrand, a Socialist, ended state control over public broadcasting in 1982.
"This affair will boomerang on you," warned François Baroin, a former minister and member of Sarkozy's party.
With the growth of multimedia and youth-driven ratings, some experts said a streamlining was in order.
"If you are reforming France, as Sarkozy says he is, you reform broadcasting," said Michael Palmer, a media expert at the University of Paris. "The way it's been done gives credence to the idea that it has been inspired," he added, "by people who are close to the private-sector TV channels."
The Associated Press
Thursday, December 18, 2008
PARIS: Early in the New Year, advertising will begin to disappear from public television in France, the start of a major shakeup ordered by President Nicolas Ask that critics say will give him virtual control of the airwaves.
Sarkozy calls the change a "veritable cultural revolution" that will restore quality to public networks that have increasingly had to compete with the sometimes lower-brow programming of private channels.
The plan to pull ads from the country's four public channels, approved by the National Assembly on Wednesday night, also allows Sarkozy to select the chief of the French public broadcasting company, France Télévisions - alarming critics who say the project sends France back decades to the days when television was the tool of the presidency.
"The ultimate goal is nothing more than to put public television on a leash to prepare for the 2012 presidential elections," said Didier Mathus, a Socialist lawmaker who led a campaign against the legislation.
The plan will be enacted even though the Senate has not yet taken up the measure. It is expected to do so early next year. The plan calls for the gradual removal of all advertising from public broadcasting, beginning on Jan. 5 with prime time and overnight programming. The government will guarantee financing of €450 million, or $640 million, a year over the next three years to replace lost ad revenue.
Financing is to come mainly from two new taxes: a 0.9 percent tax on revenue of Internet service suppliers and telephone operators, foreign included, and a tax on advertising revenue of private TV channels - 1.5 percent to 3 percent depending on how well they fare from year to year.
Sarkozy has said the goal is to restore the networks' public service identity, lost in ratings wars with private channels, mainly TF1, the most widely watched station in France. The president's office has said the reform amounts to a lifeline as ad revenues are threatened by recession.
Detractors contend that the revamp is a thinly camouflaged boost for TF1, which is owned by Martin Bouygues, a close friend of Sarkozy's for 30 years. They say TF1 will win much of the advertising lost by public networks.
Sarkozy has been accused of being too close to media chiefs ever since he was elected in May last year.
"Even if Sarkozy has no such evil intentions," said Divina Frau-Meigs, a media sociology professor at the Sorbonne, "the suspicion is there."
The unions representing journalists said they feared that the plan would lead to cost cuts and job losses. They have called for a strike on Jan. 5 to protest.
Sarkozy's revisions have historical precedent: nearly all presidents of the Fifth Republic have reorganized the airwaves. In 1959, Charles de Gaulle created the public television monolith known as ORTF, a virtual propaganda tool. President François Mitterrand, a Socialist, ended state control over public broadcasting in 1982.
"This affair will boomerang on you," warned François Baroin, a former minister and member of Sarkozy's party.
With the growth of multimedia and youth-driven ratings, some experts said a streamlining was in order.
"If you are reforming France, as Sarkozy says he is, you reform broadcasting," said Michael Palmer, a media expert at the University of Paris. "The way it's been done gives credence to the idea that it has been inspired," he added, "by people who are close to the private-sector TV channels."
*********************
Fracas in Parliament delays French Sunday shopping bill
Reuters
Thursday, December 18, 2008
PARIS: Legislation that would make it easier for French shops to open on Sundays has been delayed until next year, Prime Minister François Fillon said Thursday after rowdy scenes in Parliament during the night.
The legislation is a pet project of President Nicolas Sarkozy, whose main election slogan was "work more to earn more," but it has built up over several weeks into a big political headache.
Sarkozy says the economic crisis has made it even more urgent to make the French labor market more flexible, encourage consumption and increase workers' purchasing power. He says more Sunday work would help achieve all those goals.
But critics of the legislation, many of whom are in his own party, the Union for a Popular Movement, say Sunday should be a day for people to spend time with their families. They also say that if consumers are reluctant to spend on weekdays, they are unlikely to spend on Sundays.
Sarkozy summoned rebel legislators from his party to the Élysée Palace several times to try and persuade them to support the bill. A compromise was found on Monday that substantially waters down the bill. It would extend authorized Sunday opening hours for food stores by one hour and allow all shops to open in designated tourist centers, rather than just some stores.
The legislation would allow mayors to choose eight Sundays per year when all shops in their towns can open, up from five Sundays now. But the bill got bogged down late Wednesday by amendments from the leftist opposition. Debate got so heated that two legislators came to blows while others yelled abuse.
"We will resume the debate calmly in January, when people have cooled off," Fillon said on Europe 1 radio.
They were very far from cooling off on Thursday morning.
"I solemnly tell the prime minister that if the government maintains this bill it will have to trample over our bodies," Arnaud Montebourg, a Socialist legislator, said on Europe 1 radio.
Reuters
Thursday, December 18, 2008
PARIS: Legislation that would make it easier for French shops to open on Sundays has been delayed until next year, Prime Minister François Fillon said Thursday after rowdy scenes in Parliament during the night.
The legislation is a pet project of President Nicolas Sarkozy, whose main election slogan was "work more to earn more," but it has built up over several weeks into a big political headache.
Sarkozy says the economic crisis has made it even more urgent to make the French labor market more flexible, encourage consumption and increase workers' purchasing power. He says more Sunday work would help achieve all those goals.
But critics of the legislation, many of whom are in his own party, the Union for a Popular Movement, say Sunday should be a day for people to spend time with their families. They also say that if consumers are reluctant to spend on weekdays, they are unlikely to spend on Sundays.
Sarkozy summoned rebel legislators from his party to the Élysée Palace several times to try and persuade them to support the bill. A compromise was found on Monday that substantially waters down the bill. It would extend authorized Sunday opening hours for food stores by one hour and allow all shops to open in designated tourist centers, rather than just some stores.
The legislation would allow mayors to choose eight Sundays per year when all shops in their towns can open, up from five Sundays now. But the bill got bogged down late Wednesday by amendments from the leftist opposition. Debate got so heated that two legislators came to blows while others yelled abuse.
"We will resume the debate calmly in January, when people have cooled off," Fillon said on Europe 1 radio.
They were very far from cooling off on Thursday morning.
"I solemnly tell the prime minister that if the government maintains this bill it will have to trample over our bodies," Arnaud Montebourg, a Socialist legislator, said on Europe 1 radio.
At a Mumbai hospital, the faces of trauma
By Thomas Fuller
Thursday, December 18, 2008
MUMBAI: Three weeks after the Mumbai terrorist attacks the public's attention here is slowly drifting back to the less weighty topics of cricket and Bollywood.
But the grief has hardly dissipated from the wards of Mumbai's largest public hospital. To travel down the spit-stained corridors of the immense facility is to witness physical wounds healing but mental ones that may linger for years.
The stitches have been removed from Harish Chandra's neck, and the 56-year-old civil servant has little trouble telling the story of how one of the terrorists held his forehead and slit his throat - and how he saved himself by kneeing the attacker in the groin.
But in a nearby ward, Malati Devi Gupta, a metal brace keeping her badly fractured left leg in place, cries out for her son - and doesn't believe he is not coming back. "If you can arrange it, I just want to meet Vinod," she tells a Western reporter. Vinod, relatives say, died in her lap from wounds inflicted by an exploding grenade at Mumbai's main train station on Nov. 26, blood gurgling from his mouth.
A social worker at the hospital says Gupta, who lay in a ward teeming with so many patients and family members it resembled a refugee camp, has been delirious with sorrow ever since being admitted and treated for her own bullet and shrapnel wounds.
Sir J.J. Hospital, named after the philanthropist in British colonial times who financed its construction, is 163 years old and feels like it. Patients and their families jostle past one another amid a confused sea of gurneys and medical staff. The red spit stains are from paan, the popular mild stimulant made from betel nuts.
Wealthier survivors of the attacks were able to convalesce in more plush surroundings and have better access to trauma counseling.
But Hemangee Dhavale, head of the psychiatry department at the K.J. Somaiya Medical College who has treated victims of previous attacks, says the poor are often more resilient.
"Their tolerance level may be higher," Dhavale said. "They undergo stress more frequently."
The families of the wealthier victims, many of whom were eating in the restaurants of the five-star hotels besieged in the attacks, do not have monetary concerns. But pain is pain.
Kanish Chhabria, 11, found out that his parents had been killed at the Oberoi Hotel when a friend sent him a condolence message on his Facebook page, said the boy's uncle, Ajay Chhabria.
Three weeks later, the boy remains "inconsolable," said Chhabria, who owns the Sea Palace Hotel, which overlooks the Arabian Sea. "We have lost something that you can't replace with money."
Better-educated victims are likely to be more traumatized, Dhavale said. "They think more," she said. But overall, the susceptibility to sustained psychological trauma "depends on the personality more than the economic status," Dhavale said.
Now that physical wounds have been treated, doctors expect that many more patients will seek treatment for flashbacks, nightmares and insomnia.
Chandra, whose throat was slit, was also shot three times in the back. The last bullet, lodged in the kidney, was to be extracted this week. But more than the pain from his injuries, he will have a hard time forgetting the words that the attacker yelled out as he was slitting his neck. The polite version is "Kill this bloody Indian." The more exact version contained unprintable expletives.
Chandra recounted this from a ward filled with a dozen patients, many of them afflicted with terminal cancer. With his son at his bedside, they were surrounded by patients with obvious tumors of various sizes jutting out from their bodies.
Several times in the past two decades doctors here have rushed to treat victims of terrorist bombings and communal riots.
As the attacks last month got under way, doctors heard an explosion and braced for an influx of patients, said Chitra Upsani, the head of the critical care unit, one of the few air-conditioned wards.
The hospital then took in what Upsani described as entire families of wounded people, most of them from the nearby Chhatrapati Shivaji train terminus, also known as the Victoria Terminus, where two attackers spent at least half an hour throwing grenades and shooting at travelers, shopkeepers, passers-by and the police.
During the terrorists' three-day siege of central Mumbai, dozens of bodies were sent to the Sir J.J. Hospital morgue. They were joined by the remains of the nine attackers killed by the police, which remain there.
Most of the victims' bodies have been reclaimed. Well over half of the 126 wounded victims brought here died or were discharged. As they returned home the grief of the attacks dispersed into the slums and mansions across this massive metropolitan area of 19 million people.
Kalpana Pawar, 24 and shy, was initially told that her husband, a police officer, sustained a foot injury in the attacks. Then the police showed up at her house with his body.
"My mother-in-law is very old, and they didn't want to alarm her," said Pawar, fidgeting nervously as she explained the police's initial explanation. Her husband, Ambadas, was off-duty and traveling through the train station when the attackers struck. A photographer saw him pick up an old rifle from a fellow officer and fire in vain at the two gunmen. The attackers were better armed. They tracked down and killed her husband, who was the family's only breadwinner.
Various government agencies have promised compensation, but Kalpana Pawar has yet to receive any checks. She is applying for a job at a bank to help support her 19-month-old son.
Also worried about her future is Betty Alphonso, 58, a homeless woman who was preparing to sleep in the train station at the time of the attacks. She says she will have nowhere to go after she is discharged from Sir J.J. Hospital. An orphan who once worked as a stenographer in a law firm, she can't get a job, she said, because "everywhere they are specifying young girls." Recently she has worked as an informal guide for foreign tourists she approached on the street. Now she has trouble walking from the bullet wound in her leg. "I have nobody," she said.
Menal Thakore, a social worker at Sir J.J. Hospital, has spent the past three weeks visiting Alphonso and other victims, gently stroking their foreheads and holding their hands. Some victims appear clear-eyed. Others have a far-off gaze.
Jayram Chouhan, a 28-year-old plumber, fits into the latter category. He suffered blast injuries and a bullet in his left leg. He was at the train station to see off a friend when the attacks began. "We didn't have any chance to escape," he said.
In the days immediately after the attacks, Thakore helped establish a list of the dead and wounded and sat behind an inquiry table in the hospital's bustling lobby.
When patients are stricken with terminal diseases, Thakore said, families have time to accept the inevitability of death. But the suddenness and the brutality of the attacks last month, she said, meant that "nobody was mentally prepared to accept it."
When family members of someone killed came forward she recited prepared phrases in Hindi. "He is no longer in this world," she told families. "This is God's wish."
By Thomas Fuller
Thursday, December 18, 2008
MUMBAI: Three weeks after the Mumbai terrorist attacks the public's attention here is slowly drifting back to the less weighty topics of cricket and Bollywood.
But the grief has hardly dissipated from the wards of Mumbai's largest public hospital. To travel down the spit-stained corridors of the immense facility is to witness physical wounds healing but mental ones that may linger for years.
The stitches have been removed from Harish Chandra's neck, and the 56-year-old civil servant has little trouble telling the story of how one of the terrorists held his forehead and slit his throat - and how he saved himself by kneeing the attacker in the groin.
But in a nearby ward, Malati Devi Gupta, a metal brace keeping her badly fractured left leg in place, cries out for her son - and doesn't believe he is not coming back. "If you can arrange it, I just want to meet Vinod," she tells a Western reporter. Vinod, relatives say, died in her lap from wounds inflicted by an exploding grenade at Mumbai's main train station on Nov. 26, blood gurgling from his mouth.
A social worker at the hospital says Gupta, who lay in a ward teeming with so many patients and family members it resembled a refugee camp, has been delirious with sorrow ever since being admitted and treated for her own bullet and shrapnel wounds.
Sir J.J. Hospital, named after the philanthropist in British colonial times who financed its construction, is 163 years old and feels like it. Patients and their families jostle past one another amid a confused sea of gurneys and medical staff. The red spit stains are from paan, the popular mild stimulant made from betel nuts.
Wealthier survivors of the attacks were able to convalesce in more plush surroundings and have better access to trauma counseling.
But Hemangee Dhavale, head of the psychiatry department at the K.J. Somaiya Medical College who has treated victims of previous attacks, says the poor are often more resilient.
"Their tolerance level may be higher," Dhavale said. "They undergo stress more frequently."
The families of the wealthier victims, many of whom were eating in the restaurants of the five-star hotels besieged in the attacks, do not have monetary concerns. But pain is pain.
Kanish Chhabria, 11, found out that his parents had been killed at the Oberoi Hotel when a friend sent him a condolence message on his Facebook page, said the boy's uncle, Ajay Chhabria.
Three weeks later, the boy remains "inconsolable," said Chhabria, who owns the Sea Palace Hotel, which overlooks the Arabian Sea. "We have lost something that you can't replace with money."
Better-educated victims are likely to be more traumatized, Dhavale said. "They think more," she said. But overall, the susceptibility to sustained psychological trauma "depends on the personality more than the economic status," Dhavale said.
Now that physical wounds have been treated, doctors expect that many more patients will seek treatment for flashbacks, nightmares and insomnia.
Chandra, whose throat was slit, was also shot three times in the back. The last bullet, lodged in the kidney, was to be extracted this week. But more than the pain from his injuries, he will have a hard time forgetting the words that the attacker yelled out as he was slitting his neck. The polite version is "Kill this bloody Indian." The more exact version contained unprintable expletives.
Chandra recounted this from a ward filled with a dozen patients, many of them afflicted with terminal cancer. With his son at his bedside, they were surrounded by patients with obvious tumors of various sizes jutting out from their bodies.
Several times in the past two decades doctors here have rushed to treat victims of terrorist bombings and communal riots.
As the attacks last month got under way, doctors heard an explosion and braced for an influx of patients, said Chitra Upsani, the head of the critical care unit, one of the few air-conditioned wards.
The hospital then took in what Upsani described as entire families of wounded people, most of them from the nearby Chhatrapati Shivaji train terminus, also known as the Victoria Terminus, where two attackers spent at least half an hour throwing grenades and shooting at travelers, shopkeepers, passers-by and the police.
During the terrorists' three-day siege of central Mumbai, dozens of bodies were sent to the Sir J.J. Hospital morgue. They were joined by the remains of the nine attackers killed by the police, which remain there.
Most of the victims' bodies have been reclaimed. Well over half of the 126 wounded victims brought here died or were discharged. As they returned home the grief of the attacks dispersed into the slums and mansions across this massive metropolitan area of 19 million people.
Kalpana Pawar, 24 and shy, was initially told that her husband, a police officer, sustained a foot injury in the attacks. Then the police showed up at her house with his body.
"My mother-in-law is very old, and they didn't want to alarm her," said Pawar, fidgeting nervously as she explained the police's initial explanation. Her husband, Ambadas, was off-duty and traveling through the train station when the attackers struck. A photographer saw him pick up an old rifle from a fellow officer and fire in vain at the two gunmen. The attackers were better armed. They tracked down and killed her husband, who was the family's only breadwinner.
Various government agencies have promised compensation, but Kalpana Pawar has yet to receive any checks. She is applying for a job at a bank to help support her 19-month-old son.
Also worried about her future is Betty Alphonso, 58, a homeless woman who was preparing to sleep in the train station at the time of the attacks. She says she will have nowhere to go after she is discharged from Sir J.J. Hospital. An orphan who once worked as a stenographer in a law firm, she can't get a job, she said, because "everywhere they are specifying young girls." Recently she has worked as an informal guide for foreign tourists she approached on the street. Now she has trouble walking from the bullet wound in her leg. "I have nobody," she said.
Menal Thakore, a social worker at Sir J.J. Hospital, has spent the past three weeks visiting Alphonso and other victims, gently stroking their foreheads and holding their hands. Some victims appear clear-eyed. Others have a far-off gaze.
Jayram Chouhan, a 28-year-old plumber, fits into the latter category. He suffered blast injuries and a bullet in his left leg. He was at the train station to see off a friend when the attacks began. "We didn't have any chance to escape," he said.
In the days immediately after the attacks, Thakore helped establish a list of the dead and wounded and sat behind an inquiry table in the hospital's bustling lobby.
When patients are stricken with terminal diseases, Thakore said, families have time to accept the inevitability of death. But the suddenness and the brutality of the attacks last month, she said, meant that "nobody was mentally prepared to accept it."
When family members of someone killed came forward she recited prepared phrases in Hindi. "He is no longer in this world," she told families. "This is God's wish."
******************
India seeks to soothe public with new terror law
Reuters
Thursday, December 18, 2008
By Bappa Majumdar
The Indian government will rush a new law through parliament on Thursday that will allow police to hold suspects for up to 180 days, a move legal officials said is an attempt to allay public anger over the Mumbai attacks.
But the Congress Party-led government, facing an election by May, could also be courting trouble by making the bill similar to an old law which it had repealed earlier.
The law was proposed amid barely contained public anger over last month's attacks in Mumbai which killed at least 179 people, exposing glaring holes in India's security and intelligence network and which led to the security minister's resignation.
India's lower house of parliament unanimously passed two bills on Wednesday, one allowing the police to hold suspects for 180 days without charge and the other to create a national police agency similar to the FBI in the United States.
The two laws need approval from members of India's upper house of parliament later on Thursday, but lawmakers said it appeared that vote would be a formality.
Experts say India's main political parties ignored concerns that the law could be misused in the absence of an independent supervisory body to monitor the new police force.
They said the Unlawful Activities (Prevention) Act, similar to an anti-terror law repealed by the Congress party-led government when it came to power in 2004, could cause serious human rights violations and could be abused by politicians.
"What we have is old wine in a new bottle, they brought back the old law without addressing the concerns of the people," prominent Indian lawyer Colin Gonsalves told Reuters.
"After the Mumbai attacks, people wanted the police to protect people not politicians, their demand was for professionalism of the police force, doing away with torture and corruption," he said.
India blames Pakistan-based Lashkar-e-Taiba for the Mumbai attack and wants Islamabad to do more to stamp out militants on its soil. But experts say that is not enough and that India needs to find ways to stop attacks rather than reacting after them.
"Basically the government is saying terrorism will continue and they have a law that deals with offenders after the event has taken place," said Claude Alvares, senior member of a Supreme Court of India committee which acts for minority communities.
But Home Minister Palaniappan Chidambaram told parliament late on Wednesday that the new laws would act as a deterrent.
"What these laws do is, one, give a sense of confidence to the people that criminals will be punished and two, give a sense of confidence to the police forces that they are armed with sufficient legal powers to take actions," Chidambaram said.
The Hindustan Times newspaper said in an editorial that, by incorporating a few safeguards and ensuring that the law is not abused, India could have a strong anti-terror capability.
"It will act as a deterrent, but how it is implemented will be more important," said Farhana Shah, a lawyer in an earlier bombing case in Mumbai in 1993.
(Editing by Paul Tait and Sugita Katyal)
Reuters
Thursday, December 18, 2008
By Bappa Majumdar
The Indian government will rush a new law through parliament on Thursday that will allow police to hold suspects for up to 180 days, a move legal officials said is an attempt to allay public anger over the Mumbai attacks.
But the Congress Party-led government, facing an election by May, could also be courting trouble by making the bill similar to an old law which it had repealed earlier.
The law was proposed amid barely contained public anger over last month's attacks in Mumbai which killed at least 179 people, exposing glaring holes in India's security and intelligence network and which led to the security minister's resignation.
India's lower house of parliament unanimously passed two bills on Wednesday, one allowing the police to hold suspects for 180 days without charge and the other to create a national police agency similar to the FBI in the United States.
The two laws need approval from members of India's upper house of parliament later on Thursday, but lawmakers said it appeared that vote would be a formality.
Experts say India's main political parties ignored concerns that the law could be misused in the absence of an independent supervisory body to monitor the new police force.
They said the Unlawful Activities (Prevention) Act, similar to an anti-terror law repealed by the Congress party-led government when it came to power in 2004, could cause serious human rights violations and could be abused by politicians.
"What we have is old wine in a new bottle, they brought back the old law without addressing the concerns of the people," prominent Indian lawyer Colin Gonsalves told Reuters.
"After the Mumbai attacks, people wanted the police to protect people not politicians, their demand was for professionalism of the police force, doing away with torture and corruption," he said.
India blames Pakistan-based Lashkar-e-Taiba for the Mumbai attack and wants Islamabad to do more to stamp out militants on its soil. But experts say that is not enough and that India needs to find ways to stop attacks rather than reacting after them.
"Basically the government is saying terrorism will continue and they have a law that deals with offenders after the event has taken place," said Claude Alvares, senior member of a Supreme Court of India committee which acts for minority communities.
But Home Minister Palaniappan Chidambaram told parliament late on Wednesday that the new laws would act as a deterrent.
"What these laws do is, one, give a sense of confidence to the people that criminals will be punished and two, give a sense of confidence to the police forces that they are armed with sufficient legal powers to take actions," Chidambaram said.
The Hindustan Times newspaper said in an editorial that, by incorporating a few safeguards and ensuring that the law is not abused, India could have a strong anti-terror capability.
"It will act as a deterrent, but how it is implemented will be more important," said Farhana Shah, a lawyer in an earlier bombing case in Mumbai in 1993.
(Editing by Paul Tait and Sugita Katyal)
******************
India calls off Pakistan cricket tour
The Associated Press
Thursday, December 18, 2008
NEW DELHI: Cricket is one of the few things India and Pakistan agree on. But with New Delhi accusing Islamabad of not curbing Pakistani-based terrorists blamed for the Mumbai attack, India on Thursday canceled a cricket tour to Pakistan — a clear sign of a freeze in relations.
In the decades since gaining independence from Britain in 1947, Pakistan and India have fought three wars and teetered on the brink several more times. Yet cricket is a national obsession for both countries and has helped thaw tensions.
India's national cricket team went to Pakistan in 2004 for the national teams' first full series of matches in 14 years, a trip hailed as an optimistic sign as the nuclear-armed rivals got a fledgling peace process going.
That has been undone by last month's Mumbai assault, which left 164 people and nine of the 10 attackers dead. Relations are strained again and the peace process is on ice.
India alleges a Pakistan-based Islamic group, Lashkar-e-Taiba, sponsored the attacks on hotels, a train station and markets in the country's financial capital and has demanded that Islamabad move against the militants.
Pakistan has arrested some suspects and clamped down on a charity, Jamaat-ud-Dawa, purportedly linked to the previously outlawed Lashkar. But officials say that to do more, they need evidence of the group's complicity — a demand India says it cannot fulfill until the investigation is over.
In another sign of worsening tensions, Pakistan summoned an Indian envoy Thursday to formally complain about violations of its airspace over the weekend — an abrupt about-face after earlier playing down the alleged breaches by Indian aircraft as not deliberate.
India's deputy ambassador, Manpreet Vohra, said he would pass along the complaint. But, Vohra told The Associated Press, "our government, after holding an inquiry, has already said that there was no airspace violation from our side, and I reiterated this stance today."
India, meanwhile, test-fired its Brahmos supersonic cruise missile, saying it wanted to check a new ship-borne launch system.
Amid the ill feelings, cricket became the first diplomatic casualty.
"This is the Indian government saying (to Pakistan) that 'We're severely displeased and you must to do something if you want to continue normal relations,'" said analyst Prem Shankar Jha. "It's showing displeasure in a manner that people really will notice."
He said India's leaders are under public pressure to get tough. "No one in India trusts Pakistan right now, and to send a cricket team would be seen as complete trust in the Pakistan government," he said.
The Board of Control for Cricket in India called the tour "not feasible in the prevailing circumstances."
India cricket player Anil Kumble called it a good decision. "We had known that we won't be traveling to Pakistan under the present situation," he told the Press Trust of India news agency.
Pakistan's cricket authority said it bore no ill will toward its Indian counterpart.
"We are still on normal terms with BCCI because it was a decision neither in their nor in our hands. They have also said that if the situation gets normal in the future, it would send its team to Pakistan," said Salim Altaf, head of the Pakistan Cricket Board.
But Pakistanis expressed disappointment.
"It's a big disappointment and a setback to Asian cricket," former player Sarfraz Nawaz told the AP in Islamabad. "The terrorism acts could happen anywhere in the world, but that does not mean that sports activities should come to a halt."
In the upper house of India's Parliament, lawmakers debated legislation to overhaul the country's legal and security apparatus in light of glaring gaps in security and intelligence revealed by the Mumbai attack.
One bill passed unanimously Wednesday by the lower house would give police sweeping powers to detain terrorism suspects and carry out searches, while a second measure would create an FBI-style national investigation agency.
"It will only have a modest impact," said C. Uday Bhaskar, former director of India's Institute of Defense Studies and Analyses. "India needs many structural changes. ... It is only after a terrorist activity occurs that these measures take effect."
In Mumbai, a judge ordered two Indian citizens suspected of aiding the attackers kept in police custody until Dec. 31.
Prosecutors say one man, Faheem Ansari, had maps of the sites attacked in Mumbai, and police say the other, Sabauddin Ahmed, guided gunmen across India's porous borders. They were jailed last February after an attack on a police station in northern India.
"How they helped, what kind of help they gave the terrorists — this is what we have to investigate," prosecutor Eknath Dhamal told the court. "Police need more time."
The alleged involvement of its own citizens has been a blow to India, which has tried to portray the attack as being entirely orchestrated from Pakistan.
___
Associated Press writers Muneeza Naqvi, Gavin Rabinowitz and Sandeep Nakai in New Delhi and Rizwan Ali in Islamabad, Pakistan, contributed to this report.
The Associated Press
Thursday, December 18, 2008
NEW DELHI: Cricket is one of the few things India and Pakistan agree on. But with New Delhi accusing Islamabad of not curbing Pakistani-based terrorists blamed for the Mumbai attack, India on Thursday canceled a cricket tour to Pakistan — a clear sign of a freeze in relations.
In the decades since gaining independence from Britain in 1947, Pakistan and India have fought three wars and teetered on the brink several more times. Yet cricket is a national obsession for both countries and has helped thaw tensions.
India's national cricket team went to Pakistan in 2004 for the national teams' first full series of matches in 14 years, a trip hailed as an optimistic sign as the nuclear-armed rivals got a fledgling peace process going.
That has been undone by last month's Mumbai assault, which left 164 people and nine of the 10 attackers dead. Relations are strained again and the peace process is on ice.
India alleges a Pakistan-based Islamic group, Lashkar-e-Taiba, sponsored the attacks on hotels, a train station and markets in the country's financial capital and has demanded that Islamabad move against the militants.
Pakistan has arrested some suspects and clamped down on a charity, Jamaat-ud-Dawa, purportedly linked to the previously outlawed Lashkar. But officials say that to do more, they need evidence of the group's complicity — a demand India says it cannot fulfill until the investigation is over.
In another sign of worsening tensions, Pakistan summoned an Indian envoy Thursday to formally complain about violations of its airspace over the weekend — an abrupt about-face after earlier playing down the alleged breaches by Indian aircraft as not deliberate.
India's deputy ambassador, Manpreet Vohra, said he would pass along the complaint. But, Vohra told The Associated Press, "our government, after holding an inquiry, has already said that there was no airspace violation from our side, and I reiterated this stance today."
India, meanwhile, test-fired its Brahmos supersonic cruise missile, saying it wanted to check a new ship-borne launch system.
Amid the ill feelings, cricket became the first diplomatic casualty.
"This is the Indian government saying (to Pakistan) that 'We're severely displeased and you must to do something if you want to continue normal relations,'" said analyst Prem Shankar Jha. "It's showing displeasure in a manner that people really will notice."
He said India's leaders are under public pressure to get tough. "No one in India trusts Pakistan right now, and to send a cricket team would be seen as complete trust in the Pakistan government," he said.
The Board of Control for Cricket in India called the tour "not feasible in the prevailing circumstances."
India cricket player Anil Kumble called it a good decision. "We had known that we won't be traveling to Pakistan under the present situation," he told the Press Trust of India news agency.
Pakistan's cricket authority said it bore no ill will toward its Indian counterpart.
"We are still on normal terms with BCCI because it was a decision neither in their nor in our hands. They have also said that if the situation gets normal in the future, it would send its team to Pakistan," said Salim Altaf, head of the Pakistan Cricket Board.
But Pakistanis expressed disappointment.
"It's a big disappointment and a setback to Asian cricket," former player Sarfraz Nawaz told the AP in Islamabad. "The terrorism acts could happen anywhere in the world, but that does not mean that sports activities should come to a halt."
In the upper house of India's Parliament, lawmakers debated legislation to overhaul the country's legal and security apparatus in light of glaring gaps in security and intelligence revealed by the Mumbai attack.
One bill passed unanimously Wednesday by the lower house would give police sweeping powers to detain terrorism suspects and carry out searches, while a second measure would create an FBI-style national investigation agency.
"It will only have a modest impact," said C. Uday Bhaskar, former director of India's Institute of Defense Studies and Analyses. "India needs many structural changes. ... It is only after a terrorist activity occurs that these measures take effect."
In Mumbai, a judge ordered two Indian citizens suspected of aiding the attackers kept in police custody until Dec. 31.
Prosecutors say one man, Faheem Ansari, had maps of the sites attacked in Mumbai, and police say the other, Sabauddin Ahmed, guided gunmen across India's porous borders. They were jailed last February after an attack on a police station in northern India.
"How they helped, what kind of help they gave the terrorists — this is what we have to investigate," prosecutor Eknath Dhamal told the court. "Police need more time."
The alleged involvement of its own citizens has been a blow to India, which has tried to portray the attack as being entirely orchestrated from Pakistan.
___
Associated Press writers Muneeza Naqvi, Gavin Rabinowitz and Sandeep Nakai in New Delhi and Rizwan Ali in Islamabad, Pakistan, contributed to this report.
******************
Pakistan protests over airspace intrusion by India
Reuters
Thursday, December 18, 2008
ISLAMABAD: Pakistan on Thursday summoned a senior Indian diplomat in Islamabad to protest against recent alleged airspace violations by Indian warplanes, a Foreign Ministry spokesman said.
The violations, denied by India, occurred at a time when relations between the two nuclear-armed rivals have been severely strained by last month's attacks on Mumbai by militants India says came from Pakistan.
The Indian fighter jets crossed into Pakistani airspace over Kashmir and Punjab province, the government said last Saturday.
Pakistan said its own fighter jets were scrambled to chase off the intruders, but it also played down the incident by describing the violations as "technical" and "inadvertent."
India's deputy high commissioner, Manpreet Vohra, was given a written protest against the intrusions, saying they contravened a 1991 agreement aimed at preventing such incidents, a Foreign Ministry spokesman said.
Indian air force spokesman insisted on Thursday that no Pakistani airspace violation had taken place.
"We stand by what we said earlier, that we have not violated their airspace. This is not true," said the spokesman, Wing Commander Mahesh Upasani.
Two Indian air force planes were shot down in a 1999 conflict in the Kargil region of divided Kashmir, after which there have been few reported violations.
(Reporting by Kamran Haider in Islamabad and Bappa Majumdar in New Dehli; Editing by Simon Cameron-Moore and Sugita Katyal)
Reuters
Thursday, December 18, 2008
ISLAMABAD: Pakistan on Thursday summoned a senior Indian diplomat in Islamabad to protest against recent alleged airspace violations by Indian warplanes, a Foreign Ministry spokesman said.
The violations, denied by India, occurred at a time when relations between the two nuclear-armed rivals have been severely strained by last month's attacks on Mumbai by militants India says came from Pakistan.
The Indian fighter jets crossed into Pakistani airspace over Kashmir and Punjab province, the government said last Saturday.
Pakistan said its own fighter jets were scrambled to chase off the intruders, but it also played down the incident by describing the violations as "technical" and "inadvertent."
India's deputy high commissioner, Manpreet Vohra, was given a written protest against the intrusions, saying they contravened a 1991 agreement aimed at preventing such incidents, a Foreign Ministry spokesman said.
Indian air force spokesman insisted on Thursday that no Pakistani airspace violation had taken place.
"We stand by what we said earlier, that we have not violated their airspace. This is not true," said the spokesman, Wing Commander Mahesh Upasani.
Two Indian air force planes were shot down in a 1999 conflict in the Kargil region of divided Kashmir, after which there have been few reported violations.
(Reporting by Kamran Haider in Islamabad and Bappa Majumdar in New Dehli; Editing by Simon Cameron-Moore and Sugita Katyal)
******************
Pakistani protesters demand closing of U.S. supply route
The Associated Press
Thursday, December 18, 2008
ISLAMABAD: Thousands of anti-government protesters on Thursday demanded that Pakistan shut the route along which supplies are trucked to U.S. and NATO forces in Afghanistan, adding to pressure on the new government in Islamabad.
The demonstration by more than 10,000 people in the northwestern city of Peshawar also focused on a recent series of U.S. missile strikes against suspected Qaeda and Taliban targets in Pakistan's lawless tribal areas along the Afghan border and Pakistani military offensives against Islamic insurgents in the area.
Leaders of the demonstration drew links between the missile attacks and the supply line, saying the equipment was being used for attacks on Pakistani soil and vowing to shut down the convoys.
"We will no longer let arms and ammunition pass through," Sirajul Haq, provincial chief of the hard-line Jamaat-e-Islami party, told the crowd. He added, "They are using the same against our innocent brothers, sisters and children."
The supply line, along which equipment passes from the Pakistani port city of Karachi through the Khyber Pass into Afghanistan, has increasingly come under assault, leading U.S. and NATO forces to scout possible alternative routes.
Hundreds of vehicles, including Humvees allocated for the Afghan Army, have been burned in recent weeks in arson attacks on Pakistani terminals, leaving several security guards dead. The convoys also are targets in Afghanistan, despite armed escorts.
The rally Thursday appeared to be the largest against Western use of the route since Pakistan's civilian government took office in March.
Protesters chanted, "Down with America!" and "Jihad is the only solution of America!" as they marched along a key road in Peshawar, led by Qazi Hussain Ahmed, the leader of Jamaat-e-Islami.
"If America continues atrocities against Muslims, it will also not be able to live in peace," Ahmed said on Express television.
The protest increased pressure on the new government at a time when it is also dealing with a declining economy and the fallout over the Mumbai terror attacks that killed more than 160 people.
India says the Pakistan-based Lashkar-e-Taiba militant group was behind the attacks. Pakistan has arrested some suspects and clamped down on a charity, Jamaat-ud-Dawa, allegedly linked to the outlawed group, but it insists it needs evidence from India. The crackdown on the charity also has stirred anti-government sentiment, with a series of recent demonstrations on behalf of Jamaat-ud-Dawa.
******************
Pakistan says militant leader Azhar not in custody
Reuters
Thursday, December 18, 2008
ISLAMABAD: A Pakistani militant leader who is one of the men most wanted by India is not in the custody of Pakistani authorities and is at large, Pakistan's foreign minister said on Thursday.
Maulana Masood Azhar is leader of the Jaish-e-Mohammad militant group that for years has battled Indian security forces in its part of the divided Kashmir region.
India blamed the group, along with another militant organisation, Lashkar-e-Taiba, for a 2001 attack on the Indian parliament.
A Pakistani intelligence official told Reuters this month that Azhar had been detained as part of a crackdown that Pakistani authorities launched after the militant attacks on the Indian city of Mumbai last month.
India has blamed "elements" in Pakistan and the Lashkar-e-Taiba for the attack.
But Pakistan's top diplomat in New Delhi was reported as saying Azhar was not being held in Pakistan. Foreign Minister Shah Mehmood Qureshi sowed confusion when he told Pakistan's Dawn Television late on Wednesday that Azhar was in custody.
However, Qureshi said on Thursday he had been mistaken when he had told Dawn Azhar was in custody.
"That's not right. Other people have been detained but Mr Masood Azhar is at large. We have no knowledge of his whereabouts," Qureshi told Reuters.
Tension has been simmering between nuclear-armed India and Pakistan since the Mumbai attacks, in which 179 people were killed, and India has imposed a "pause" on their nearly five-year-old peace process.
(Reporting by Kamran Haider; Writing by Augustine Anthony; Editing by Robert Birsel and Sugita Katyal)
Reuters
Thursday, December 18, 2008
ISLAMABAD: A Pakistani militant leader who is one of the men most wanted by India is not in the custody of Pakistani authorities and is at large, Pakistan's foreign minister said on Thursday.
Maulana Masood Azhar is leader of the Jaish-e-Mohammad militant group that for years has battled Indian security forces in its part of the divided Kashmir region.
India blamed the group, along with another militant organisation, Lashkar-e-Taiba, for a 2001 attack on the Indian parliament.
A Pakistani intelligence official told Reuters this month that Azhar had been detained as part of a crackdown that Pakistani authorities launched after the militant attacks on the Indian city of Mumbai last month.
India has blamed "elements" in Pakistan and the Lashkar-e-Taiba for the attack.
But Pakistan's top diplomat in New Delhi was reported as saying Azhar was not being held in Pakistan. Foreign Minister Shah Mehmood Qureshi sowed confusion when he told Pakistan's Dawn Television late on Wednesday that Azhar was in custody.
However, Qureshi said on Thursday he had been mistaken when he had told Dawn Azhar was in custody.
"That's not right. Other people have been detained but Mr Masood Azhar is at large. We have no knowledge of his whereabouts," Qureshi told Reuters.
Tension has been simmering between nuclear-armed India and Pakistan since the Mumbai attacks, in which 179 people were killed, and India has imposed a "pause" on their nearly five-year-old peace process.
(Reporting by Kamran Haider; Writing by Augustine Anthony; Editing by Robert Birsel and Sugita Katyal)
******************
Disputed U.S. house raid in Afghanistan elevates tension
By Adam B. Ellick
Thursday, December 18, 2008
KABUL, Afghanistan: A deadly United States military raid on a house near Afghanistan's border with Pakistan became a new source of tension on Thursday, with the Americans calling it a successful counterterrorism strike and the Afghans saying it left three innocent civilians dead and two wounded, including a 4-year-old boy bitten by an attack dog.
The raid took place on Wednesday in the village of Kundi in Khost Province. American military leaders and Afghan officials said they were investigating the conflicting accounts of what happened.
But President Hamid Karzai, who has grown increasingly impatient with the American-led war effort against the Taliban insurgency here, condemned the raid publicly in front of government leaders and foreign diplomats, saying that "entering by force to our people's houses is against the government of Afghanistan."
Karzai, who will face an election next year, is under enormous pressure from Afghans who say the 7-year-old war against the Taliban has devastated the country and led to many civilian casualties at the hands of American-led forces.
The raid took place on the same day that diplomats in Kabul called on foreign forces to increase their sensitivity in order to win the "hearts and minds" of Afghans.
In Khost, the raid occurred when American-led forces blasted the gate of a house early Wednesday, then fatally shot the family's father and mother and a male relative, according to Tahir Khan Sabry, deputy governor of the province. Their relationship with the wounded boy was unclear, but Sabry described all the victims as noncombatant civilians.
The American military said the raid led to the detention of an Al Qaeda operative, and that those killed were armed and showing "hostile intent." Multiple AK-47s, grenades, pistols and one shotgun were confiscated, American officials said.
The dispute over the Khost raid coincided with a visit to Afghanistan by Massachusetts Senator John Kerry, who said the United States needs to win over local support for the war.
In recent months, the governor of Khost, Arsala Jamal, has frequently complained about the actions of United States Special Forces that operate here. He said incidents that harm civilians undermine the progress of reconstruction efforts by permanently based American military forces and their Afghan allies in the provinces.
In Khost, public outrage over the house raid was visible at the funerals for the killed Afghans. The use of dogs in military actions is especially sensitive for Afghans after the release of images showing canine intimidation of detainees at the Bagram prison in Afghanistan and Abu Ghraib prison in Iraq.
"I saw the 4-year-old boy, and he had an injury under his knee that was definitely the mark of a dog bite," said Rasoul Adel, a local television reporter who arrived at the scene immediately after the incident.
By Adam B. Ellick
Thursday, December 18, 2008
KABUL, Afghanistan: A deadly United States military raid on a house near Afghanistan's border with Pakistan became a new source of tension on Thursday, with the Americans calling it a successful counterterrorism strike and the Afghans saying it left three innocent civilians dead and two wounded, including a 4-year-old boy bitten by an attack dog.
The raid took place on Wednesday in the village of Kundi in Khost Province. American military leaders and Afghan officials said they were investigating the conflicting accounts of what happened.
But President Hamid Karzai, who has grown increasingly impatient with the American-led war effort against the Taliban insurgency here, condemned the raid publicly in front of government leaders and foreign diplomats, saying that "entering by force to our people's houses is against the government of Afghanistan."
Karzai, who will face an election next year, is under enormous pressure from Afghans who say the 7-year-old war against the Taliban has devastated the country and led to many civilian casualties at the hands of American-led forces.
The raid took place on the same day that diplomats in Kabul called on foreign forces to increase their sensitivity in order to win the "hearts and minds" of Afghans.
In Khost, the raid occurred when American-led forces blasted the gate of a house early Wednesday, then fatally shot the family's father and mother and a male relative, according to Tahir Khan Sabry, deputy governor of the province. Their relationship with the wounded boy was unclear, but Sabry described all the victims as noncombatant civilians.
The American military said the raid led to the detention of an Al Qaeda operative, and that those killed were armed and showing "hostile intent." Multiple AK-47s, grenades, pistols and one shotgun were confiscated, American officials said.
The dispute over the Khost raid coincided with a visit to Afghanistan by Massachusetts Senator John Kerry, who said the United States needs to win over local support for the war.
In recent months, the governor of Khost, Arsala Jamal, has frequently complained about the actions of United States Special Forces that operate here. He said incidents that harm civilians undermine the progress of reconstruction efforts by permanently based American military forces and their Afghan allies in the provinces.
In Khost, public outrage over the house raid was visible at the funerals for the killed Afghans. The use of dogs in military actions is especially sensitive for Afghans after the release of images showing canine intimidation of detainees at the Bagram prison in Afghanistan and Abu Ghraib prison in Iraq.
"I saw the 4-year-old boy, and he had an injury under his knee that was definitely the mark of a dog bite," said Rasoul Adel, a local television reporter who arrived at the scene immediately after the incident.
*******************
Iraq arrests extend beyond key ministry
By Campbell Robertson and Tareq Maher
Thursday, December 18, 2008
BAGHDAD: Iraqi officials on Thursday confirmed a wave of arrests in what appeared to be a major internal crackdown inside the nation's security apparatus. But in an atmosphere of secrecy and political rivalry, the officials could agree on few other facts, from the number detained to the seriousness of the allegations.
At a news conference on Thursday, Major General Abdul-Karim Khalaf, the spokesman for the Interior Ministry, repeated some of the more serious allegations that had leaked out the night before. He told reporters that 23 officials from the Interior Ministry had been arrested in recent days, many for being affiliated with Al Awda, a descendant of Saddam Hussein's Baath Party, which is now banned.
In a possible indication of the breadth of the investigation, the Interior Ministry said that the investigation involved not only the ministry itself, as had been reported, but also the Defense and National Security Ministries. Others said that the investigation was not over and that more arrests could be expected.
But Khalaf sought to discredit the most serious of the allegations made earlier by Iraqi officials, saying there was no evidence that the suspects were in the early stages of planning a coup against Prime Minister Nuri Kamal al-Maliki.
The conflicting accounts of the operation prompted an urgent question from Maliki's critics: Were the arrests politically motivated, carried out as a way for Maliki to weaken his rivals before the nationwide provincial elections planned for next month?
Suspicions were fueled by reports that a counterterrorism force overseen directly by Maliki was part of the operation, though several officials denied it.
Mahmoud Othman, an independent Kurdish lawmaker, said questions had been raised by the shifting accusations he and other Iraqi political leaders had heard in the past several days: that the detainees were planning a coup; that they belonged to Al Awda; and that they planned to burn down the ministry.
Also, the officials arrested seem to have come disproportionately from the Interior Ministry, an agency dominated by members of Maliki's rival parties.
"These conflicting stories and the lack of transparency has led some people to think that this is all politically motivated and has to do with the election," Othman said.
The arrests came about as part of the work of a committee set up two weeks ago by Maliki, said General Ahmed Abu Raqeef, the director of internal affairs for the Interior Ministry.
Initial accounts provided by Iraqi security officials, and published by The New York Times on Thursday, said that Raqeef was among those arrested. But on Thursday he said that account was wrong. In fact, he said, he was part of the committee overseeing the investigation of Iraqi security officials on a number of charges.
The committee is made up of a judge and five senior security officials, Raqeef said, including representatives from the three security ministries — the Interior, Defense and National Security Ministries.
The group has been investigating officials suspected of making fake security badges, enabling terrorist activities or having inappropriate ties with foreign countries or political parties, including Al Awda.
Raqeef said that so far there was no solid proof implicating the security officials, at least the ones from the Interior Ministry. But he said that he had ordered the detention of 16 officials from the ministry as part of the investigation, which is continuing. He said he did not know how many were held from the other security ministries.
A senior adviser to Jawad al-Bulani, the interior minister, who did not want to give his name because he was not authorized to speak publicly, provided a list of names and ranks of 24 Interior Ministry officials he said were arrested, which includes lieutenants, captains, majors, lieutenant colonels and generals.
Abas al-Bayati, a member of the security and defense committee in the Parliament, said that more than 30 Interior Ministry officials had been detained.
It is just as uncertain how many were detained at other ministries. Brigadier General Qassim Atta, a military spokesman, said one official from the Defense Ministry had been arrested. Ayad al-Taei, the public relations director at the Interior Ministry, said seven Defense Ministry officials had been detained.
The minister of defense himself, Abdul Qadir al-Ubaidi, said he had not received information about any arrests.
A senior security official in Baghdad, who is not authorized to speak publicly about the operation, said there had been at least 39 arrests among all the ministries and that 4 had occurred on Thursday.
Many Iraqi officials reacted to the news of detentions and secret investigations with anger.
"This is not the first time and it will be not the last one that the Iraqi government carried out such an operation without the knowledge of the Council of Representatives, which is a legislative and monitoring entity on the government's activities," said Waleed Sherka, a Turkmen member of Parliament who is also on the security and defense committee. "We certainly didn't know about it."
The adviser to Bulani said that the prime minister had been privately pushing for the arrest of a number of Interior officials for two months, but that Bulani had pushed back, insisting that the officials were innocent.
Bulani's hand was forced, however, when the other ministries agreed to form the committee and so he gave his assent, the adviser said, attributing the episode to the political rivalry between Bulani, who is building his own Iraqi Constitutional Party, and Maliki.
However, both Raqeef and Taei, the public relations director for the Interior Ministry, said the interior minister fully supported the formation of the committee.
Bulani has been traveling but is expected to return to Iraq on Friday.
********************
EDITORIAL
The Pentagon and the torture report
Thursday, December 18, 2008
Most Americans have long known that the horrors of Abu Ghraib were not the work of a few low-ranking sociopaths. All but President George W. Bush's most unquestioning supporters recognized the chain of unprincipled decisions that led to the abuse, torture and death in prisons run by the American military and intelligence services.
Now, a bipartisan report by the Senate Armed Services Committee has made what amounts to a strong case for bringing criminal charges against former Defense Secretary Donald Rumsfeld; his legal counsel, William Haynes; and potentially other top officials, including the former White House counsel Alberto Gonzales and David Addington, Vice President Dick Cheney's former chief of staff.
The report shows how actions by these men "led directly" to what happened at Abu Ghraib, in Afghanistan, in Guantánamo Bay, Cuba, and in secret CIA prisons.
It said these top officials, charged with defending the Constitution and America's standing in the world, methodically introduced interrogation practices based on illegal tortures devised by Chinese agents during the Korean War. Until the Bush administration, their only use in the United States was to train soldiers to resist what might be done to them if they were captured by a lawless enemy.
The officials then issued legally and morally bankrupt documents to justify their actions, starting with a presidential order saying that the Geneva Conventions did not apply to prisoners of the "war on terror" - the first time any democratic nation had unilaterally reinterpreted the conventions.
That order set the stage for the infamous redefinition of torture at the Justice Department, and then Rumsfeld's authorization of "aggressive" interrogation methods. Some of those methods were torture by any rational definition and many of them violate laws against abusive and degrading treatment.
These top officials ignored warnings from lawyers in every branch of the armed forces that they were breaking the law, subjecting soldiers to possible criminal charges and authorizing abuses that were not only considered by experts to be ineffective, but were actually counterproductive.
One page of the report lists the repeated objections that President Bush and his aides so arrogantly ignored: The air force had "serious concerns regarding the legality of many of the proposed techniques"; the chief legal adviser to the military's criminal investigative task force said they were of dubious value and may subject soldiers to prosecution; one of the army's top lawyers said some techniques that stopped well short of waterboarding "may violate the torture statute." The Marines said they "arguably violate federal law." The navy pleaded for a real review.
The legal counsel to the chairman of the Joint Chiefs of Staff at the time started that review but told the Senate committee that her boss, General Richard Myers, ordered her to stop on the instructions of Rumsfeld's legal counsel, Haynes.
The report indicates that Haynes was an early proponent of the idea of using the agency that trains soldiers to withstand torture to devise plans for the interrogation of prisoners held by the American military. These trainers - who are not interrogators but experts only on how physical and mental pain is inflicted and may be endured - were sent to work with interrogators in Afghanistan, in Guantánamo and in Iraq.
On Dec. 2, 2002, Rumsfeld authorized interrogators at Guantánamo to use a range of abusive techniques that were already widespread in Afghanistan, enshrining them as official policy.
Rumsfeld rescinded his order a month later, and narrowed the number of "aggressive techniques" that could be used. But he did so only after the navy's chief lawyer threatened to formally protest the illegal treatment of prisoners.
The abuse and torture of prisoners continued at prisons run by the CIA and specialists from the torture-resistance program remained involved in the military detention system until 2004. Some of the practices Rumsfeld left in place seem illegal, like prolonged sleep deprivation.
A prosecutor should be appointed to consider criminal charges against top officials at the Pentagon and others involved in planning the abuse.
Given Barack Obama's other problems - and how far he has moved from the powerful stands he took on these issues early in the campaign - we do not hold out real hope that as president he will take such a politically fraught step.
At the least, Obama should order his attorney general to review more than two dozen prisoner-abuse cases that reportedly were referred to the Justice Department by the Pentagon and the CIA - and declined by Bush's lawyers.
Obama should consider proposals from groups like Human Rights Watch to appoint an independent panel to look into these egregious violations of the law. Unless America and its leaders know precisely what went wrong in the last seven years, it will be impossible to make sure those terrible mistakes are not repeated.
We expect Obama to keep the promise he made repeatedly in the campaign. He said one of his first acts as president would be to order a review of all of Bush's executive orders and reverse those that eroded civil liberties and the rule of law. That job will fall to Eric Holder, a veteran prosecutor who has been chosen as attorney general, and Gregory Craig, a lawyer with extensive national security experience who has been selected as Obama's White House counsel.
A good place for them to start would be to reverse Bush's disastrous order of Feb. 7, 2002, declaring that the United States was no longer legally committed to comply with the Geneva Conventions.
Thursday, December 18, 2008
Most Americans have long known that the horrors of Abu Ghraib were not the work of a few low-ranking sociopaths. All but President George W. Bush's most unquestioning supporters recognized the chain of unprincipled decisions that led to the abuse, torture and death in prisons run by the American military and intelligence services.
Now, a bipartisan report by the Senate Armed Services Committee has made what amounts to a strong case for bringing criminal charges against former Defense Secretary Donald Rumsfeld; his legal counsel, William Haynes; and potentially other top officials, including the former White House counsel Alberto Gonzales and David Addington, Vice President Dick Cheney's former chief of staff.
The report shows how actions by these men "led directly" to what happened at Abu Ghraib, in Afghanistan, in Guantánamo Bay, Cuba, and in secret CIA prisons.
It said these top officials, charged with defending the Constitution and America's standing in the world, methodically introduced interrogation practices based on illegal tortures devised by Chinese agents during the Korean War. Until the Bush administration, their only use in the United States was to train soldiers to resist what might be done to them if they were captured by a lawless enemy.
The officials then issued legally and morally bankrupt documents to justify their actions, starting with a presidential order saying that the Geneva Conventions did not apply to prisoners of the "war on terror" - the first time any democratic nation had unilaterally reinterpreted the conventions.
That order set the stage for the infamous redefinition of torture at the Justice Department, and then Rumsfeld's authorization of "aggressive" interrogation methods. Some of those methods were torture by any rational definition and many of them violate laws against abusive and degrading treatment.
These top officials ignored warnings from lawyers in every branch of the armed forces that they were breaking the law, subjecting soldiers to possible criminal charges and authorizing abuses that were not only considered by experts to be ineffective, but were actually counterproductive.
One page of the report lists the repeated objections that President Bush and his aides so arrogantly ignored: The air force had "serious concerns regarding the legality of many of the proposed techniques"; the chief legal adviser to the military's criminal investigative task force said they were of dubious value and may subject soldiers to prosecution; one of the army's top lawyers said some techniques that stopped well short of waterboarding "may violate the torture statute." The Marines said they "arguably violate federal law." The navy pleaded for a real review.
The legal counsel to the chairman of the Joint Chiefs of Staff at the time started that review but told the Senate committee that her boss, General Richard Myers, ordered her to stop on the instructions of Rumsfeld's legal counsel, Haynes.
The report indicates that Haynes was an early proponent of the idea of using the agency that trains soldiers to withstand torture to devise plans for the interrogation of prisoners held by the American military. These trainers - who are not interrogators but experts only on how physical and mental pain is inflicted and may be endured - were sent to work with interrogators in Afghanistan, in Guantánamo and in Iraq.
On Dec. 2, 2002, Rumsfeld authorized interrogators at Guantánamo to use a range of abusive techniques that were already widespread in Afghanistan, enshrining them as official policy.
Rumsfeld rescinded his order a month later, and narrowed the number of "aggressive techniques" that could be used. But he did so only after the navy's chief lawyer threatened to formally protest the illegal treatment of prisoners.
The abuse and torture of prisoners continued at prisons run by the CIA and specialists from the torture-resistance program remained involved in the military detention system until 2004. Some of the practices Rumsfeld left in place seem illegal, like prolonged sleep deprivation.
A prosecutor should be appointed to consider criminal charges against top officials at the Pentagon and others involved in planning the abuse.
Given Barack Obama's other problems - and how far he has moved from the powerful stands he took on these issues early in the campaign - we do not hold out real hope that as president he will take such a politically fraught step.
At the least, Obama should order his attorney general to review more than two dozen prisoner-abuse cases that reportedly were referred to the Justice Department by the Pentagon and the CIA - and declined by Bush's lawyers.
Obama should consider proposals from groups like Human Rights Watch to appoint an independent panel to look into these egregious violations of the law. Unless America and its leaders know precisely what went wrong in the last seven years, it will be impossible to make sure those terrible mistakes are not repeated.
We expect Obama to keep the promise he made repeatedly in the campaign. He said one of his first acts as president would be to order a review of all of Bush's executive orders and reverse those that eroded civil liberties and the rule of law. That job will fall to Eric Holder, a veteran prosecutor who has been chosen as attorney general, and Gregory Craig, a lawyer with extensive national security experience who has been selected as Obama's White House counsel.
A good place for them to start would be to reverse Bush's disastrous order of Feb. 7, 2002, declaring that the United States was no longer legally committed to comply with the Geneva Conventions.
*********************
Iraqi journalist who threw shoes at Bush said to ask for pardon
By Timothy Williams and Atheer Kakan
Thursday, December 18, 2008
BAGHDAD: The Iraqi television journalist who threw his shoes at President George W. Bush at a news conference this week has asked the prime minister for a pardon, an Iraqi government official said Thursday.
In a letter addressed to Prime Minister Nuri Kamal al-Maliki, the reporter, Muntader al-Zaidi, apologized for the incident, calling it an "ugly action," Maliki's spokesman said.
"He sent a letter to the prime minister, apologizing for his ugly action and he asked the prime minister to pardon him as a son asks his father for forgiveness," said the spokesman, Yassin Majid.
The tone of the comments by the prime minister's office suggested Maliki might be considering lenient treatment of the journalist, who is still in custody. But the reporter's lawyer and his family could not be reached immediately to confirm that he had even sent such a letter to Maliki.
At a news conference in Baghdad on Sunday held by Bush and Maliki, Zaidi rose abruptly as Bush was speaking, cocked his right arm and fired a shoe at the president's head while shouting in Arabic: "This is a gift from the Iraqis. This is the farewell kiss, you dog!"
Bush deftly ducked and the shoe narrowly missed him. Zaidi threw his other shoe, again with great force, this time shouting, "This is from the widows, the orphans and those who were killed in Iraq!" The second shoe also sailed over Bush's head.
Zaidi was subdued by a fellow journalist and then beaten by members of the prime minister's security detail.
By Timothy Williams and Atheer Kakan
Thursday, December 18, 2008
BAGHDAD: The Iraqi television journalist who threw his shoes at President George W. Bush at a news conference this week has asked the prime minister for a pardon, an Iraqi government official said Thursday.
In a letter addressed to Prime Minister Nuri Kamal al-Maliki, the reporter, Muntader al-Zaidi, apologized for the incident, calling it an "ugly action," Maliki's spokesman said.
"He sent a letter to the prime minister, apologizing for his ugly action and he asked the prime minister to pardon him as a son asks his father for forgiveness," said the spokesman, Yassin Majid.
The tone of the comments by the prime minister's office suggested Maliki might be considering lenient treatment of the journalist, who is still in custody. But the reporter's lawyer and his family could not be reached immediately to confirm that he had even sent such a letter to Maliki.
At a news conference in Baghdad on Sunday held by Bush and Maliki, Zaidi rose abruptly as Bush was speaking, cocked his right arm and fired a shoe at the president's head while shouting in Arabic: "This is a gift from the Iraqis. This is the farewell kiss, you dog!"
Bush deftly ducked and the shoe narrowly missed him. Zaidi threw his other shoe, again with great force, this time shouting, "This is from the widows, the orphans and those who were killed in Iraq!" The second shoe also sailed over Bush's head.
Zaidi was subdued by a fellow journalist and then beaten by members of the prime minister's security detail.
**************
Pentagon looks at plan for Guantanamo closure
Reuters
Thursday, December 18, 2008
By David Morgan
The Pentagon is working on a plan to shut the U.S. military prison at Guantanamo Bay, Cuba, that would be available to President-elect Barack Obama when he takes office on January 20, a defence official said on Thursday.
U.S. Defence Secretary Robert Gates has asked his staff to come up with an assessment of what it would take to shutter the prison camp that has become a blemish on the international reputation of the United States.
"If this is one of the president-elect's first orders of business, the secretary wants to be prepared to help him as soon as possible," Pentagon press secretary Geoff Morrell told reporters.
"(Gates) has asked his team for a proposal on how to shut it down -- what would be required specifically to close it, and move the detainees from that facility, while at the same time, of course, ensuring that we protect the American people from some dangerous characters."
Obama has pledged to close the prison located at the U.S. naval station in southeastern Cuba, which has come to symbolize aggressive detention practices that opened the United States to allegations of torture.
There was no immediate word on how soon Obama might address the Guantanamo question. But the president-elect, who has repeatedly called its closure a top foreign policy priority, said in the current issue of Time magazine that he hoped to have the jail shut during the first two years of his term.
Gates, who was appointed by Bush, but has agree to stay on under Obama, also wants Guantanamo shut.
The jail currently holds about 250 detainees apprehended as part of President George W. Bush's war on terrorism, including Khalid Sheikh Mohammed, accused of masterminding the September 11 attacks.
LENGTHY, COMPLEX PROCESS
Defence officials said the task of closing Guantanamo is likely to be a lengthy, complex process that would involve all three branches of the government.
"You look at this sort of thing early because that's when you have momentum for bringing about change. With a new administration coming in, you've got people who are willing to do what's necessary," said one defence official.
Officials said members of the Office of the Secretary of Defence and the Joint Chiefs of Staff will provide Obama with a set of options for tackling the complex issues raised by Guantanamo. It was not clear whether the Pentagon would recommend a specific course of action to the new president.
The Obama administration would need to decide where to hold current detainees, particularly about 110 prisoners who the Pentagon believes are too dangerous to be released from U.S. custody. Options might include military installations on U.S. soil and civilian federal prisons.
The United States would also need to decide what kind of court system should handle trials for roughly 80 detainees. There are now charges against 20.
"The request has been made, his team is working on it so that he can be prepared to assist the president-elect should he wish to address this very early in his tenure," the press secretary said.
Addressing these issues could require input from a number of other government entities including the Justice Department, judicial officers and Congress, officials said. In fact, Gates has said that Congress should pass legislation to protect the American public by preventing any former Guantanamo detainee from living in the United States.
The Guantanamo tribunals are scheduled to reconvene on January 19 for pretrial hearings for Canadian captive Omar Khadr, who is set for trial the following week on charges of murdering a U.S. soldier with a grenade during a firefight in Afghanistan.
(Additional reporting Caren Bohan in Chicago and Jane Sutton in Miami, Editing by Howard Goller)
Reuters
Thursday, December 18, 2008
By David Morgan
The Pentagon is working on a plan to shut the U.S. military prison at Guantanamo Bay, Cuba, that would be available to President-elect Barack Obama when he takes office on January 20, a defence official said on Thursday.
U.S. Defence Secretary Robert Gates has asked his staff to come up with an assessment of what it would take to shutter the prison camp that has become a blemish on the international reputation of the United States.
"If this is one of the president-elect's first orders of business, the secretary wants to be prepared to help him as soon as possible," Pentagon press secretary Geoff Morrell told reporters.
"(Gates) has asked his team for a proposal on how to shut it down -- what would be required specifically to close it, and move the detainees from that facility, while at the same time, of course, ensuring that we protect the American people from some dangerous characters."
Obama has pledged to close the prison located at the U.S. naval station in southeastern Cuba, which has come to symbolize aggressive detention practices that opened the United States to allegations of torture.
There was no immediate word on how soon Obama might address the Guantanamo question. But the president-elect, who has repeatedly called its closure a top foreign policy priority, said in the current issue of Time magazine that he hoped to have the jail shut during the first two years of his term.
Gates, who was appointed by Bush, but has agree to stay on under Obama, also wants Guantanamo shut.
The jail currently holds about 250 detainees apprehended as part of President George W. Bush's war on terrorism, including Khalid Sheikh Mohammed, accused of masterminding the September 11 attacks.
LENGTHY, COMPLEX PROCESS
Defence officials said the task of closing Guantanamo is likely to be a lengthy, complex process that would involve all three branches of the government.
"You look at this sort of thing early because that's when you have momentum for bringing about change. With a new administration coming in, you've got people who are willing to do what's necessary," said one defence official.
Officials said members of the Office of the Secretary of Defence and the Joint Chiefs of Staff will provide Obama with a set of options for tackling the complex issues raised by Guantanamo. It was not clear whether the Pentagon would recommend a specific course of action to the new president.
The Obama administration would need to decide where to hold current detainees, particularly about 110 prisoners who the Pentagon believes are too dangerous to be released from U.S. custody. Options might include military installations on U.S. soil and civilian federal prisons.
The United States would also need to decide what kind of court system should handle trials for roughly 80 detainees. There are now charges against 20.
"The request has been made, his team is working on it so that he can be prepared to assist the president-elect should he wish to address this very early in his tenure," the press secretary said.
Addressing these issues could require input from a number of other government entities including the Justice Department, judicial officers and Congress, officials said. In fact, Gates has said that Congress should pass legislation to protect the American public by preventing any former Guantanamo detainee from living in the United States.
The Guantanamo tribunals are scheduled to reconvene on January 19 for pretrial hearings for Canadian captive Omar Khadr, who is set for trial the following week on charges of murdering a U.S. soldier with a grenade during a firefight in Afghanistan.
(Additional reporting Caren Bohan in Chicago and Jane Sutton in Miami, Editing by Howard Goller)
**************
FBI assailed for overtime pay
FBI agents on temporary assignment in Iraq billed an average of $45,000 in overtime and extra pay for eating, watching movies and going to cocktail parties in some cases, the Justice Department said Thursday, The Associated Press reported from Washington.
The audit by the Justice Department inspector general, Glenn Fine, concluded that the FBI improperly paid overtime and other premium allowances to employees sent to war zones.
From 2003 to 2007, the FBI spent $63 million in overtime and extra pay for employees in Iraq, the report found. Of that, $7.8 million was improperly billed.
"Several FBI employees noted that they periodically spent time during the work day washing clothes," the report noted. "Questioned whether he should have been paid for the time spent in this activity, one employee defended the practice, saying, 'When you're in that environment, anything you do to survive is work for the FBI."'
Other agents defended being paid to go to a regular Saturday night cocktail party, calling it an important "liaison" meeting.
"We found that, on the whole, few if any employees worked exactly 16 hours a day, every day, for 90 days straight, within the meaning of the term 'work' as it is used in applicable regulations and policies," the report concludes.
The assistant director of the FBI, John Miller, said the overtime policy was no longer in use. He said it was only supposed to be a short-time pay solution in the early days of the war.
Similarly, FBI agents in Afghanistan also misused overtime and extra pay, but to a lesser extent, the report asserts.
Also misusing extra pay and attendance policies in Iraq and Afghanistan - but in a more limited way - were agents from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; The Drug Enforcement Administration and the U.S. Marshals Service.
******************
U.S. should be ready if Iraq bars Blackwater
Reuters
Thursday, December 18, 2008
WASHINGTON: A U.S. government report raises the possibility that private security firm Blackwater could lose its licence to protect U.S. diplomats in Iraq and advises making contingency plans, two sources familiar with the matter said on Wednesday.
Five Blackwater guards were charged on December 8 with killing 14 unarmed civilians and wounding 20 others in a 2007 Baghdad shooting that outraged Iraqis and raised questions about the firm's ability to keep working in Iraq.
The State Department relies heavily on North Carolina-based Blackwater and other private security companies, many of which are staffed by former U.S. soldiers, to protect its diplomats in Iraq, the West Bank and other dangerous places.
The two sources described the draft report prepared by the State Department Office of Inspector General (OIG) on condition that they not be named because it has yet to be made public.
"The department faces the real possibility that one of its primary worldwide personal protective services contractors in Iraq -- Blackwater USA -- will not receive a licence to continue operating in Iraq," said the report, referring to a licence issued by the Iraqi authorities, the sources said.
The OIG is a quasi-independent office whose mission includes preventing fraud, abuse and mismanagement as well identifying vulnerabilities and recommending solutions.
The sources stressed that the report did not recommend dropping Blackwater, the largest security contractor in Iraq. One source said that inspector general reports typically recommend that agencies prepare for "worst-case" scenarios.
A State Department spokesman said the department will not make a decision whether to retain the company's services in Iraq until a Federal Bureau of Investigation probe into the 2007 incident is completed.
The shooting occurred as Blackwater guards escorted a convoy of U.S. diplomats through Baghdad on September 16, 2007. The guards, U.S. military veterans, were responding to a car bombing when shooting erupted in a crowded intersection.
In a 35-count indictment, the U.S. Justice Department charged the guards with 14 counts of manslaughter, 20 counts of attempt to commit manslaughter and a weapons violation count.
When the charges were unveiled, Blackwater said it believed the guards acted "acted within the rules set forth for them by the government and that no criminal violations occurred."
Undersecretary of State Patrick Kennedy, who led the State Department's original investigation into the 2007 shooting, said the department is always ready to protect its diplomats.
"The State Department takes very seriously its obligation to provide security for its personnel around the world in an appropriate manner," he said. "We are always prepared to deal with changing circumstances."
(Editing by Eric Walsh)
Reuters
Thursday, December 18, 2008
WASHINGTON: A U.S. government report raises the possibility that private security firm Blackwater could lose its licence to protect U.S. diplomats in Iraq and advises making contingency plans, two sources familiar with the matter said on Wednesday.
Five Blackwater guards were charged on December 8 with killing 14 unarmed civilians and wounding 20 others in a 2007 Baghdad shooting that outraged Iraqis and raised questions about the firm's ability to keep working in Iraq.
The State Department relies heavily on North Carolina-based Blackwater and other private security companies, many of which are staffed by former U.S. soldiers, to protect its diplomats in Iraq, the West Bank and other dangerous places.
The two sources described the draft report prepared by the State Department Office of Inspector General (OIG) on condition that they not be named because it has yet to be made public.
"The department faces the real possibility that one of its primary worldwide personal protective services contractors in Iraq -- Blackwater USA -- will not receive a licence to continue operating in Iraq," said the report, referring to a licence issued by the Iraqi authorities, the sources said.
The OIG is a quasi-independent office whose mission includes preventing fraud, abuse and mismanagement as well identifying vulnerabilities and recommending solutions.
The sources stressed that the report did not recommend dropping Blackwater, the largest security contractor in Iraq. One source said that inspector general reports typically recommend that agencies prepare for "worst-case" scenarios.
A State Department spokesman said the department will not make a decision whether to retain the company's services in Iraq until a Federal Bureau of Investigation probe into the 2007 incident is completed.
The shooting occurred as Blackwater guards escorted a convoy of U.S. diplomats through Baghdad on September 16, 2007. The guards, U.S. military veterans, were responding to a car bombing when shooting erupted in a crowded intersection.
In a 35-count indictment, the U.S. Justice Department charged the guards with 14 counts of manslaughter, 20 counts of attempt to commit manslaughter and a weapons violation count.
When the charges were unveiled, Blackwater said it believed the guards acted "acted within the rules set forth for them by the government and that no criminal violations occurred."
Undersecretary of State Patrick Kennedy, who led the State Department's original investigation into the 2007 shooting, said the department is always ready to protect its diplomats.
"The State Department takes very seriously its obligation to provide security for its personnel around the world in an appropriate manner," he said. "We are always prepared to deal with changing circumstances."
(Editing by Eric Walsh)
******************
Obama briefed on Iraq withdrawal plans
By Elisabeth Bumiller and Thom Shanker
Thursday, December 18, 2008
WASHINGTON: A new military plan for troop withdrawals from Iraq that was described in broad terms this week to President-elect Barack Obama falls short of the 16-month timetable Obama outlined during his election campaign, U.S. military officials said.
The plan was proposed by the top American commanders responsible for Iraq, General David Petraeus and General Ray Odierno, and it represents their first recommendation on troop withdrawals under an Obama presidency. While Obama has said he will seek advice from his commanders, their resistance to a faster drawdown could present the new president with a tough political choice between overruling his generals or backing away from his goal.
The plan, completed last week, envisions withdrawing two more brigades, or some 7,000 to 8,000 troops, from Iraq in the first six months of 2009, the military officials said. But that would leave 12 combat brigades in Iraq by June 2009, and while declining to be more specific, the officials made clear that the withdrawal of all combat forces under the generals' recommendations would not come until some time after May 2010, Obama's target.
Transition officials said the plan was described in only general terms to Obama by Robert Gates, who is staying on as defense secretary, and Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, when Obama met for five and a half hours with his national security team Monday in Chicago. They said all participants had sidestepped the details of how to reconcile Obama's timetable for withdrawing combat forces with the more extended one recommended by the generals. A transition official said that in future meetings, "the military will get a chance to articulate their preferences."
In the campaign, Obama said he would not hesitate to overrule his commanders. By early December, however, he signaled some flexibility when he said that he still wanted combat troops out of Iraq in 16 months but that he would also listen to the recommendations of his generals. Gates has expressed confidence that he and Obama might reach common ground. But in discussing the new plan, senior military officials nonetheless made clear that they were not comfortable with the time frame Obama articulated in the campaign.
"Sixteen months is going to be tough," said one senior military officer who was briefed on the plan. "We are not quite there yet."
Those at the Chicago meeting included Hillary Rodham Clinton, Obama's choice for secretary of state; Vice President-elect Joseph Biden Jr.; General James Jones, who is to be Obama's national security adviser; Susan Rice, who is to be ambassador to the United Nations; Rahm Emanuel, who will be White House chief of staff; Gregory Craig, who will be White House counsel; James Steinberg, who is expected to be deputy secretary of state; Thomas Donilon, who is expected to be Jones's deputy; and Anthony Blinken, a senior foreign policy adviser to Biden.
Obama apparently did not ask Gates or Mullen for specifics on withdrawals, according to people briefed on the discussions. "There was not challenging or questioning of any particular timetable," a transition official said. "There wasn't a point on which there was any pushback from either side."
For his part, Geoff Morrell, the Pentagon press secretary, said that Gates had left the Chicago meeting feeling that "they had an excellent discussion, and excellent chemistry as well."
The plan drafted by Odierno and Petraeus was drawn up to meet the so-called status of forces agreement between the United States and Iraqi governments that calls for all American forces to be out of Iraq by the end of 2011 and all combat troops out of Iraqi cities by June. The agreement sets forth both a shorter and longer timetable than Obama's campaign pledge, with some combat forces out sooner but all forces out later.
One way commanders say they will try to meet that first deadline is by effectively reassigning combat troops to training and support of the Iraqis, even though the difference would be in some cases semantic because armed American troops would still go on combat patrols with their Iraqi counterparts.
The participants at the Chicago meeting did discuss the deadline for all American combat troops to be withdrawn from Iraqi cities by June, as outlined in the agreement with the Iraqi government. A person familiar with the talks said those at the meeting discussed whether the Iraqis would allow "re-missioned" combat forces to remain in Iraqi cities after June. Gates and Mullen did not rule out the idea that Iraqis might permit such troops, the person said.
In a briefing to reporters last week in Balad, Iraq, Odierno said that some American forces would remain in a support role in Iraqi cities beyond the June deadline. He said that the troops would be deployed at numerous security outposts in urban areas to help support and train Iraqi forces. "We'll maintain our very close partnership with the Iraqi security forces throughout Iraq even after the summer," he said.
Odierno said that it was particularly important for American troops to support Iraqis in 2009, when three elections, at the provincial, district and national levels, are scheduled. "It's important that we maintain enough presence here that we can help them through this year of transition," he said.
Odierno also said that he was planning for all American forces to be out of Iraq by 2011, as called for in the agreement with the Iraqi government, but he said the agreement could be renegotiated. "Three years is a long time," Odierno said.
The new military plan also calls for American troops in Iraq after 2011, but it does not put a number on that force, a person familiar with its details said.
Other topics discussed at the meeting in Chicago included Afghanistan, Pakistan, the Middle East, the detainees at Guantánamo Bay and how the national security policy-making process in the Obama administration would work.
Helene Cooper contributed reporting.
By Elisabeth Bumiller and Thom Shanker
Thursday, December 18, 2008
WASHINGTON: A new military plan for troop withdrawals from Iraq that was described in broad terms this week to President-elect Barack Obama falls short of the 16-month timetable Obama outlined during his election campaign, U.S. military officials said.
The plan was proposed by the top American commanders responsible for Iraq, General David Petraeus and General Ray Odierno, and it represents their first recommendation on troop withdrawals under an Obama presidency. While Obama has said he will seek advice from his commanders, their resistance to a faster drawdown could present the new president with a tough political choice between overruling his generals or backing away from his goal.
The plan, completed last week, envisions withdrawing two more brigades, or some 7,000 to 8,000 troops, from Iraq in the first six months of 2009, the military officials said. But that would leave 12 combat brigades in Iraq by June 2009, and while declining to be more specific, the officials made clear that the withdrawal of all combat forces under the generals' recommendations would not come until some time after May 2010, Obama's target.
Transition officials said the plan was described in only general terms to Obama by Robert Gates, who is staying on as defense secretary, and Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, when Obama met for five and a half hours with his national security team Monday in Chicago. They said all participants had sidestepped the details of how to reconcile Obama's timetable for withdrawing combat forces with the more extended one recommended by the generals. A transition official said that in future meetings, "the military will get a chance to articulate their preferences."
In the campaign, Obama said he would not hesitate to overrule his commanders. By early December, however, he signaled some flexibility when he said that he still wanted combat troops out of Iraq in 16 months but that he would also listen to the recommendations of his generals. Gates has expressed confidence that he and Obama might reach common ground. But in discussing the new plan, senior military officials nonetheless made clear that they were not comfortable with the time frame Obama articulated in the campaign.
"Sixteen months is going to be tough," said one senior military officer who was briefed on the plan. "We are not quite there yet."
Those at the Chicago meeting included Hillary Rodham Clinton, Obama's choice for secretary of state; Vice President-elect Joseph Biden Jr.; General James Jones, who is to be Obama's national security adviser; Susan Rice, who is to be ambassador to the United Nations; Rahm Emanuel, who will be White House chief of staff; Gregory Craig, who will be White House counsel; James Steinberg, who is expected to be deputy secretary of state; Thomas Donilon, who is expected to be Jones's deputy; and Anthony Blinken, a senior foreign policy adviser to Biden.
Obama apparently did not ask Gates or Mullen for specifics on withdrawals, according to people briefed on the discussions. "There was not challenging or questioning of any particular timetable," a transition official said. "There wasn't a point on which there was any pushback from either side."
For his part, Geoff Morrell, the Pentagon press secretary, said that Gates had left the Chicago meeting feeling that "they had an excellent discussion, and excellent chemistry as well."
The plan drafted by Odierno and Petraeus was drawn up to meet the so-called status of forces agreement between the United States and Iraqi governments that calls for all American forces to be out of Iraq by the end of 2011 and all combat troops out of Iraqi cities by June. The agreement sets forth both a shorter and longer timetable than Obama's campaign pledge, with some combat forces out sooner but all forces out later.
One way commanders say they will try to meet that first deadline is by effectively reassigning combat troops to training and support of the Iraqis, even though the difference would be in some cases semantic because armed American troops would still go on combat patrols with their Iraqi counterparts.
The participants at the Chicago meeting did discuss the deadline for all American combat troops to be withdrawn from Iraqi cities by June, as outlined in the agreement with the Iraqi government. A person familiar with the talks said those at the meeting discussed whether the Iraqis would allow "re-missioned" combat forces to remain in Iraqi cities after June. Gates and Mullen did not rule out the idea that Iraqis might permit such troops, the person said.
In a briefing to reporters last week in Balad, Iraq, Odierno said that some American forces would remain in a support role in Iraqi cities beyond the June deadline. He said that the troops would be deployed at numerous security outposts in urban areas to help support and train Iraqi forces. "We'll maintain our very close partnership with the Iraqi security forces throughout Iraq even after the summer," he said.
Odierno said that it was particularly important for American troops to support Iraqis in 2009, when three elections, at the provincial, district and national levels, are scheduled. "It's important that we maintain enough presence here that we can help them through this year of transition," he said.
Odierno also said that he was planning for all American forces to be out of Iraq by 2011, as called for in the agreement with the Iraqi government, but he said the agreement could be renegotiated. "Three years is a long time," Odierno said.
The new military plan also calls for American troops in Iraq after 2011, but it does not put a number on that force, a person familiar with its details said.
Other topics discussed at the meeting in Chicago included Afghanistan, Pakistan, the Middle East, the detainees at Guantánamo Bay and how the national security policy-making process in the Obama administration would work.
Helene Cooper contributed reporting.
*********************
Minister under fire for Germany's role in Iraq
By Judy Dempsey
Thursday, December 18, 2008
BERLIN: The credibility of Foreign Minister Frank-Walter Steinmeier, the Social Democrat who will challenge Chancellor Angela Merkel in national elections in the autumn, came under sharp attack Thursday over continuing allegations that - under his tutelage - Germany in fact aided the United States both in its "war on terror" and in the Iraq invasion that Berlin opposed.
In a foretaste of the national election campaign next year, conservatives aligned with Merkel and opposition deputies both sharply attacked Steinmeier's credibility when he appeared - for the fifth time in two years - before a parliamentary committee investigating allegations that German intelligence services were aware of CIA kidnappings, and of prisoner renditions to third countries where torture was permitted, and were involved in preparing the U.S. invasion of Iraq.
As chief of staff for the former Social Democrat chancellor, Gerhard Schröder, Steinmeier was politically responsible for intelligence services and their activities.
As in previous appearances, Steinmeier denied that German intelligence agents based in Baghdad had passed on information to the United States during the 2003 invasion of Iraq, or that he was aware of any renditions that involved the kidnapping of alleged terror suspects for U.S. interrogation.
"There is no reason for me to believe that the wishes of the government were either knowingly or unknowingly violated," Steinmeier said.
But the allegations continue to embarrass the Social Democrats. Schröder firmly opposed the Iraq invasion, joined France and Russia in a coalition against it and won re-election in 2002 on the strength of a strong campaign against U.S. policy.
Deputies who support Merkel sharpened their attacks Thursday, capitalizing on a furor stirred this week by a report in Der Spiegel magazine that the German BND intelligence agency played a role in planning some parts of the U.S. invasion of Iraq.
The magazine cited former U.S. military officers, including General Tommy Franks, who commanded the Iraq invasion. Franks was quoted as telling Der Spiegel: "It would be a huge mistake to underestimate the value of information provided by the Germans. These guys were invaluable," referring to two agents in Iraq.
The affair "hangs like a millstone around Steinmeier's neck," said Karl-Theodor zu Guttenberg, leader of the Christian Social Union, a Bavarian party that is allied with Merkel's Christian Democratic Union. Norbert Röttgen, a senior figure in Merkel's party, said Steinmeier's credibility was now at stake.
Previously, the conservatives - who now govern in awkward tandem with the Social Democrats - had spared Steinmeier such criticism. But the atmosphere is heating up ahead of the campaign next year.
Opposition members were also sharply critical. It was now increasingly clear that Germany under Schröder "played an active role in the Iraq war," said Max Stadler of the Free Democrats. A Green deputy on the committee, Hans-Christian Ströbele, dismissed Steinmeier's claim that the agents were on a humanitarian mission as "absolute nonsense."
Steinmeier insisted that the two German intelligence agents in Baghdad in spring 2003 did not provide "active support of combat operations."
He said they worked "to avoid an embassy or hospital from being bombed, which has nothing to do with double standards but with saving innocent people's lives."
The agents, based at the French Embassy, were gathering their own information and were not forced to rely on outside sources, he said.
Steinmeier has also denied knowing anything about the kidnapping of Khaled el-Masri, a German-Lebanese who has said that he was imprisoned by U.S. agents in December 2003 in Macedonia and then tortured in Afghanistan before being released five months later.
Masri has said that while he was in Afghanistan he was questioned by a man who spoke perfect German.
By Judy Dempsey
Thursday, December 18, 2008
BERLIN: The credibility of Foreign Minister Frank-Walter Steinmeier, the Social Democrat who will challenge Chancellor Angela Merkel in national elections in the autumn, came under sharp attack Thursday over continuing allegations that - under his tutelage - Germany in fact aided the United States both in its "war on terror" and in the Iraq invasion that Berlin opposed.
In a foretaste of the national election campaign next year, conservatives aligned with Merkel and opposition deputies both sharply attacked Steinmeier's credibility when he appeared - for the fifth time in two years - before a parliamentary committee investigating allegations that German intelligence services were aware of CIA kidnappings, and of prisoner renditions to third countries where torture was permitted, and were involved in preparing the U.S. invasion of Iraq.
As chief of staff for the former Social Democrat chancellor, Gerhard Schröder, Steinmeier was politically responsible for intelligence services and their activities.
As in previous appearances, Steinmeier denied that German intelligence agents based in Baghdad had passed on information to the United States during the 2003 invasion of Iraq, or that he was aware of any renditions that involved the kidnapping of alleged terror suspects for U.S. interrogation.
"There is no reason for me to believe that the wishes of the government were either knowingly or unknowingly violated," Steinmeier said.
But the allegations continue to embarrass the Social Democrats. Schröder firmly opposed the Iraq invasion, joined France and Russia in a coalition against it and won re-election in 2002 on the strength of a strong campaign against U.S. policy.
Deputies who support Merkel sharpened their attacks Thursday, capitalizing on a furor stirred this week by a report in Der Spiegel magazine that the German BND intelligence agency played a role in planning some parts of the U.S. invasion of Iraq.
The magazine cited former U.S. military officers, including General Tommy Franks, who commanded the Iraq invasion. Franks was quoted as telling Der Spiegel: "It would be a huge mistake to underestimate the value of information provided by the Germans. These guys were invaluable," referring to two agents in Iraq.
The affair "hangs like a millstone around Steinmeier's neck," said Karl-Theodor zu Guttenberg, leader of the Christian Social Union, a Bavarian party that is allied with Merkel's Christian Democratic Union. Norbert Röttgen, a senior figure in Merkel's party, said Steinmeier's credibility was now at stake.
Previously, the conservatives - who now govern in awkward tandem with the Social Democrats - had spared Steinmeier such criticism. But the atmosphere is heating up ahead of the campaign next year.
Opposition members were also sharply critical. It was now increasingly clear that Germany under Schröder "played an active role in the Iraq war," said Max Stadler of the Free Democrats. A Green deputy on the committee, Hans-Christian Ströbele, dismissed Steinmeier's claim that the agents were on a humanitarian mission as "absolute nonsense."
Steinmeier insisted that the two German intelligence agents in Baghdad in spring 2003 did not provide "active support of combat operations."
He said they worked "to avoid an embassy or hospital from being bombed, which has nothing to do with double standards but with saving innocent people's lives."
The agents, based at the French Embassy, were gathering their own information and were not forced to rely on outside sources, he said.
Steinmeier has also denied knowing anything about the kidnapping of Khaled el-Masri, a German-Lebanese who has said that he was imprisoned by U.S. agents in December 2003 in Macedonia and then tortured in Afghanistan before being released five months later.
Masri has said that while he was in Afghanistan he was questioned by a man who spoke perfect German.
******************
NEWS ANALYSIS
Uphill battle to repair Gaza truce
By Ethan Bronner
Thursday, December 18, 2008
JERUSALEM: Rockets are flying from Gaza into southern Israeli communities again. Israeli warplanes are firing missiles back, and Israel is shutting the crossings through which food and fuel are supplied. The United Nations agency that feeds Palestinian refugees in Gaza says its stocks of flour are exhausted.
In other words, the six-month truce that Israel and Hamas, the militant Palestinian rulers of Gaza, agreed on last June 19 is over, although it officially expires Friday. Officials and analysts on both sides say that things are likely to deteriorate further in the short term, but that since both sides need the truce they will probably grope their way back to it. The question is how soon and after how much suffering.
Both Israel and Hamas accuse the other of bad faith and of violations of the Egyptian-mediated accord, and each side has a point. Rockets from Gaza never stopped entirely during the truce, and Israel never allowed a major renewed flow of goods into Gaza, crippling its economy. This is at least partly because the agreement had no mutually agreed text or enforcement mechanism, since neither side wanted to grant the legitimacy to the other that such a document would imply.
"I think it is going to get a lot worse before it gets better," said Robert Pastor, who has been traveling in the region with former President Jimmy Carter, meeting with Hamas and other officials. "It did lead to a significant reduction in the number of rockets fired at Israel until November, but the truce had less impact on the goods going in. One hopes both sides learn lessons and agree on a text and publicize it."
There seems little likelihood of that happening soon. Hamas considers Israel an illegitimate state and is doctrinally committed to its destruction, while Israel views Hamas as a terrorist group that must be dismantled. Yet each needs the other to hold its fire. That is why negotiations over another truce have started, again through Egypt.
Hamas officials say it was their understanding at the time that two weeks after the June 19 accord went into effect, Israel would open the crossings and allow the transfer of goods that had been banned or restricted after June 2007, when Hamas waged a violent takeover of Gaza.
Its job, the Hamas officials said, was to stop the rockets going into Israel not only from its own armed groups but also from others based in Gaza, including Islamic Jihad and the Al Aksa Martyrs Brigades.
It took some days, but they were largely successful. Hamas imposed its will and even imprisoned some rocket shooters. Israeli and UN figures show that whereas in May 2008 there were more than 300 rockets fired into Israel, in July there were 10 to 20, depending on who is counting and whether mortars are included. In August there were 10 to 30; in September, 5 to 10.
But the goods shipments, while up some 25 percent to 30 percent and with a mix of more items, never began to approach what Hamas thought it was going to get - a return of the 500 to 600 truckloads daily from before the closure, including appliances, construction material and other goods vital to life beyond survival. Instead, the number of trucks went up to about 90 from about 70.
Israeli officials acknowledge that transferring previously banned goods had been the plan but said that there was no specific date for the increase and that it was to happen in steps. But the rockets never fully stopped.
"The Palestinians wanted to have one or two rockets a week to keep our people in tension and still tell people inside Gaza, 'See, we continue to fight and we continue to bring in goods,"' said Shlomo Dror, chief spokesman for the Israeli Defense Ministry. "The moment we fail to react to one rocket, we encourage them. Our only choice was to close the crossings when rockets came in."
In addition, Israeli forces continued to attack Hamas and other militants in the West Bank, prompting Palestinian militants in Gaza to fire rockets. The Israeli Army also found several dozen improvised explosive devices used against their vehicles on the Gaza border and about a dozen cases of sniper fire from Gaza directed at them.
While this back-and-forth did not topple the agreement, Israel's decision in early November to destroy a tunnel that Hamas was digging near the border drove the cycle of violence to a much higher level.
Israel says the tunnel could have been dug only for the purpose of trying to seize a soldier, like Corporal Gilad Shalit, the Israeli held by Hamas for the past two and a half years. The attack on the tunnel killed six Hamas militants, and each side has stepped up attacks since.
Israel had been hoping that the agreement would lead to progress on Shalit's release, or at least to increased information on his condition or negotiations over an exchange for him.
But Hamas said the Shalit case was entirely separate from the accord, just as Israel has rejected Hamas's request for an extension of the agreement to the West Bank. There, too, Hamas had hopes that the accord would create some changes that did not take place.
Taghreed el-Khodary contributed reporting from Gaza.
By Ethan Bronner
Thursday, December 18, 2008
JERUSALEM: Rockets are flying from Gaza into southern Israeli communities again. Israeli warplanes are firing missiles back, and Israel is shutting the crossings through which food and fuel are supplied. The United Nations agency that feeds Palestinian refugees in Gaza says its stocks of flour are exhausted.
In other words, the six-month truce that Israel and Hamas, the militant Palestinian rulers of Gaza, agreed on last June 19 is over, although it officially expires Friday. Officials and analysts on both sides say that things are likely to deteriorate further in the short term, but that since both sides need the truce they will probably grope their way back to it. The question is how soon and after how much suffering.
Both Israel and Hamas accuse the other of bad faith and of violations of the Egyptian-mediated accord, and each side has a point. Rockets from Gaza never stopped entirely during the truce, and Israel never allowed a major renewed flow of goods into Gaza, crippling its economy. This is at least partly because the agreement had no mutually agreed text or enforcement mechanism, since neither side wanted to grant the legitimacy to the other that such a document would imply.
"I think it is going to get a lot worse before it gets better," said Robert Pastor, who has been traveling in the region with former President Jimmy Carter, meeting with Hamas and other officials. "It did lead to a significant reduction in the number of rockets fired at Israel until November, but the truce had less impact on the goods going in. One hopes both sides learn lessons and agree on a text and publicize it."
There seems little likelihood of that happening soon. Hamas considers Israel an illegitimate state and is doctrinally committed to its destruction, while Israel views Hamas as a terrorist group that must be dismantled. Yet each needs the other to hold its fire. That is why negotiations over another truce have started, again through Egypt.
Hamas officials say it was their understanding at the time that two weeks after the June 19 accord went into effect, Israel would open the crossings and allow the transfer of goods that had been banned or restricted after June 2007, when Hamas waged a violent takeover of Gaza.
Its job, the Hamas officials said, was to stop the rockets going into Israel not only from its own armed groups but also from others based in Gaza, including Islamic Jihad and the Al Aksa Martyrs Brigades.
It took some days, but they were largely successful. Hamas imposed its will and even imprisoned some rocket shooters. Israeli and UN figures show that whereas in May 2008 there were more than 300 rockets fired into Israel, in July there were 10 to 20, depending on who is counting and whether mortars are included. In August there were 10 to 30; in September, 5 to 10.
But the goods shipments, while up some 25 percent to 30 percent and with a mix of more items, never began to approach what Hamas thought it was going to get - a return of the 500 to 600 truckloads daily from before the closure, including appliances, construction material and other goods vital to life beyond survival. Instead, the number of trucks went up to about 90 from about 70.
Israeli officials acknowledge that transferring previously banned goods had been the plan but said that there was no specific date for the increase and that it was to happen in steps. But the rockets never fully stopped.
"The Palestinians wanted to have one or two rockets a week to keep our people in tension and still tell people inside Gaza, 'See, we continue to fight and we continue to bring in goods,"' said Shlomo Dror, chief spokesman for the Israeli Defense Ministry. "The moment we fail to react to one rocket, we encourage them. Our only choice was to close the crossings when rockets came in."
In addition, Israeli forces continued to attack Hamas and other militants in the West Bank, prompting Palestinian militants in Gaza to fire rockets. The Israeli Army also found several dozen improvised explosive devices used against their vehicles on the Gaza border and about a dozen cases of sniper fire from Gaza directed at them.
While this back-and-forth did not topple the agreement, Israel's decision in early November to destroy a tunnel that Hamas was digging near the border drove the cycle of violence to a much higher level.
Israel says the tunnel could have been dug only for the purpose of trying to seize a soldier, like Corporal Gilad Shalit, the Israeli held by Hamas for the past two and a half years. The attack on the tunnel killed six Hamas militants, and each side has stepped up attacks since.
Israel had been hoping that the agreement would lead to progress on Shalit's release, or at least to increased information on his condition or negotiations over an exchange for him.
But Hamas said the Shalit case was entirely separate from the accord, just as Israel has rejected Hamas's request for an extension of the agreement to the West Bank. There, too, Hamas had hopes that the accord would create some changes that did not take place.
Taghreed el-Khodary contributed reporting from Gaza.
*********************
Taking the long view
By Rami G. Khouri
Thursday, December 18, 2008
BEIRUT: The coming days will reveal much about the mettle and intentions of the Palestinian group Hamas, which now effectively runs a mini-state in the Gaza Strip after defeating its rival Fatah in a few street skirmishes last year.
The six-month-old cease-fire with Israel ends this week and talks are going on now between Israeli and Egyptian officials about renewing it. Hamas leaders in Damascus and Gaza have given slightly different versions of their positions, some leaning toward a cease-fire extension and others toward a resumption of fighting.
Hamas has stated that it will extend the cease-fire - and indeed for many years has offered Israel a long-term truce - if the Israelis in turn meet their side of the deal, which is to stop killing and arresting Palestinians, colonizing their land and strangling them economically.
The fact that Hamas would consider letting the cease-fire lapse speaks much about its mind-set and the options that it is willing to pursue. This moment allows us to accurately gauge what Hamas is all about, rather than see it through the lens of exaggerated misperceptions.
Reasonable people would expect that Israelis and Palestinians alike prefer a cease-fire to warfare, especially since mutual attacks have never resolved the core conflict. Hamas' decision to extend the cease-fire is not going to be made on the basis of what makes its people more or less comfortable, or what entices Israelis into opening the gates a little bit wider to allow more consumer goods to enter Gaza.
The basis on which Hamas makes such decisions reflects its wider worldview of the character and aims of Israel, and the nature of its confrontation with Israel.
Like other Islamist groups, Hamas calculates on the basis of a longer time frame rather than the next election, shifting public opinion or whether or not it will get invited to tea in the White House. The most important factor in the mind of Islamist leaders who decide such things is whether the agreement to renew the cease-fire reflects mutual respect and an acceptance of the principle of equal rights for Israel and Hamas.
If the deal proposed is seen to have forced Israel to change its position and respect the terms of the agreement, Hamas will extend. If it merely comprises vague Israeli promises in return for Hamas and other militant groups stopping their rocket attacks against Israel, the deal will collapse. Hamas' view is that mutual needs, rather than Israeli security, must be assured for a cease-fire to happen.
The driving force for such a posture is the Islamist sense that the battle to defend and reclaim the land will be a long one, and it will require a heavy price in lives and suffering before Israel negotiates sincerely and sees the Palestinians as humans worthy of the same rights as Israelis.
Hamas showed its strength a few days ago, when some 200,000 supporters rallied in Gaza to mark the group's 21st anniversary. It has generated strong support as well as deep opposition among Palestinians and other Arabs, but more important for it is whether or not it has generated respect in Israel. If the Israelis feel Hamas can fight a long-term battle, then Hamas will feel it has achieved an important goal: the respect of its enemy.
Hamas is well entrenched in Gaza and is prepared for an Israeli military attack, if such an attack takes place. These Palestinian Islamists clearly have learned from their colleagues in Hezbollah and other such groups, who have shown themselves to be the most adept Arabs at fighting Israel militarily. They have obviously used the past year to prepare for an Israeli attack on their little statelet - making the cost to Israel likely to be similar to the price Israel paid when it went into south Lebanon years ago.
Israeli leaders have warned that they will have to take drastic measures if the rockets from Gaza do not stop falling on southern Israel. Hamas ignores such threats because it knows that Israel has reached the limit of what it can do with conventional military force. Israel directly occupied Gaza for decades and used brutal force in trying to pacify it, which only succeeded in giving birth to Hamas. More Israeli tanks in the streets of Gaza would only reflect Israeli renewed perplexity about how to deal with the group, rather than a coherent plan to resolve the conflict.
The main criteria for a renewal of the Hamas-Israel cease-fire are not fear of the other or the ability to inflict military pain, but respect for the other and the willingness to deal as equals.
Rami G. Khouri is editor-at-large of The Daily Star and director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut. Distributed by Agence Global.
By Rami G. Khouri
Thursday, December 18, 2008
BEIRUT: The coming days will reveal much about the mettle and intentions of the Palestinian group Hamas, which now effectively runs a mini-state in the Gaza Strip after defeating its rival Fatah in a few street skirmishes last year.
The six-month-old cease-fire with Israel ends this week and talks are going on now between Israeli and Egyptian officials about renewing it. Hamas leaders in Damascus and Gaza have given slightly different versions of their positions, some leaning toward a cease-fire extension and others toward a resumption of fighting.
Hamas has stated that it will extend the cease-fire - and indeed for many years has offered Israel a long-term truce - if the Israelis in turn meet their side of the deal, which is to stop killing and arresting Palestinians, colonizing their land and strangling them economically.
The fact that Hamas would consider letting the cease-fire lapse speaks much about its mind-set and the options that it is willing to pursue. This moment allows us to accurately gauge what Hamas is all about, rather than see it through the lens of exaggerated misperceptions.
Reasonable people would expect that Israelis and Palestinians alike prefer a cease-fire to warfare, especially since mutual attacks have never resolved the core conflict. Hamas' decision to extend the cease-fire is not going to be made on the basis of what makes its people more or less comfortable, or what entices Israelis into opening the gates a little bit wider to allow more consumer goods to enter Gaza.
The basis on which Hamas makes such decisions reflects its wider worldview of the character and aims of Israel, and the nature of its confrontation with Israel.
Like other Islamist groups, Hamas calculates on the basis of a longer time frame rather than the next election, shifting public opinion or whether or not it will get invited to tea in the White House. The most important factor in the mind of Islamist leaders who decide such things is whether the agreement to renew the cease-fire reflects mutual respect and an acceptance of the principle of equal rights for Israel and Hamas.
If the deal proposed is seen to have forced Israel to change its position and respect the terms of the agreement, Hamas will extend. If it merely comprises vague Israeli promises in return for Hamas and other militant groups stopping their rocket attacks against Israel, the deal will collapse. Hamas' view is that mutual needs, rather than Israeli security, must be assured for a cease-fire to happen.
The driving force for such a posture is the Islamist sense that the battle to defend and reclaim the land will be a long one, and it will require a heavy price in lives and suffering before Israel negotiates sincerely and sees the Palestinians as humans worthy of the same rights as Israelis.
Hamas showed its strength a few days ago, when some 200,000 supporters rallied in Gaza to mark the group's 21st anniversary. It has generated strong support as well as deep opposition among Palestinians and other Arabs, but more important for it is whether or not it has generated respect in Israel. If the Israelis feel Hamas can fight a long-term battle, then Hamas will feel it has achieved an important goal: the respect of its enemy.
Hamas is well entrenched in Gaza and is prepared for an Israeli military attack, if such an attack takes place. These Palestinian Islamists clearly have learned from their colleagues in Hezbollah and other such groups, who have shown themselves to be the most adept Arabs at fighting Israel militarily. They have obviously used the past year to prepare for an Israeli attack on their little statelet - making the cost to Israel likely to be similar to the price Israel paid when it went into south Lebanon years ago.
Israeli leaders have warned that they will have to take drastic measures if the rockets from Gaza do not stop falling on southern Israel. Hamas ignores such threats because it knows that Israel has reached the limit of what it can do with conventional military force. Israel directly occupied Gaza for decades and used brutal force in trying to pacify it, which only succeeded in giving birth to Hamas. More Israeli tanks in the streets of Gaza would only reflect Israeli renewed perplexity about how to deal with the group, rather than a coherent plan to resolve the conflict.
The main criteria for a renewal of the Hamas-Israel cease-fire are not fear of the other or the ability to inflict military pain, but respect for the other and the willingness to deal as equals.
Rami G. Khouri is editor-at-large of The Daily Star and director of the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut. Distributed by Agence Global.
*********************
OPINION - FAITH AND GLOBALIZATION
An alliance of values
By Tony Blair
Thursday, December 18, 2008
NEW HAVEN, Connecticut: The pressures of globalization are pushing people together, obliterating boundaries through trade, travel, telecommunications and mass migration. If religious faith in such an interdependent world acts to push people apart, it becomes a force for division and conflict.
That is bad for everybody. But for people of religious faith, that is a particularly bad outcome. It means that faith becomes synonymous not with reconciliation, compassion and justice - what true religious faith should stand for - but with hatred and sectarianism.
I am so convinced of the importance of this issue that, over the past few months, I undertook to conduct a seminar at Yale University to explore the subject. I did so not as an intellectual exercise, but because I believe this is a severely practical matter. Unless we find a way of reconciling faith and globalization, the world will be not only a dangerous place, but globalization itself will be far less successful in spreading prosperity.
There are 10 lessons I've learned from this undertaking:
- Religious faith matters. Whether one likes it or not, billions of people are motivated by religious faith.
- Faith is not in decline. It may be in decline in some places, but not worldwide. In some parts of the world, it is growing.
- Religious faith can operate positively in support, for example, of the UN Millennium Development Goals to reduce poverty and advance development. Wonderful work has been done on this by churches, mosques and Hindu and Jewish interfaith organizations. Or, religion can operate negatively, through fundamentalism or extremism.
- Globalization is forging multi-faith societies. The London my little boy is growing up in is completely different than the London he would have grown up in 30 years ago. The same is true across Europe and the United States as well.
- To work effectively, globalization needs values like trust, confidence, openness and justice.
- Faith is not the only means, but is an important means, of providing those values if faith is itself open and not closed; if it is based on compassion and help for others and not on the basis of exclusionary identity.
- For globalization to flourish, we need social capital - trust in one another, so we can have confidence in the future. Spiritual capital, so to speak, is an important part of social capital.
- In an era, however, of globalization and multi-faith societies, creating such spiritual capital requires not only tolerance of, but respect for, people of other faiths.
- The key to respect is understanding, and hence the need to learn and to educate ourselves about each other's faith and traditions.
- Organized religion should be supporting this process, and allowing through it the evolution of faith so that faith can be a positive, constructive and progressive force.
So, faith matters. Values matter. How those combine will critically define the prospects of success, prosperity and peaceful co-existence of the global society in which we live. The alternative is tension, conflict and violence.
What does this mean practically? I once thought that globalization was a value-free process. Certainly, I thought, one should seek justice in an era of globalization for its own sake, but not for the reasons of efficiency. I have now come to change my view. This current global economic crisis illustrates why.
The crisis is first and foremost a crisis brought about in part by behavior - irresponsibility - that we wish hadn't taken place. And it has been prolonged by the absence of confidence because people can't trust the system.
Values such as trust - being able to rely on the other person's word, or long-term perspective instead of short-term profit maximization - are exactly what will create the confidence required to put our economy back on a sound footing for the future. In other words, confidence and the stability that flows from it cannot be restored by technical, regulatory means alone, but by a restoration of values.
This is but one case that illustrates the idea that an interdependent world cannot function without values that create the bonds of trust. In foreign policy, this can be seen even more clearly. The violent attacks we saw in Mumbai are representative of the type of security threat we face in many places globally, from Iraq to Afghanistan, Iran to Pakistan to our own cities in the West.
Of course, we must be prepared for a military response as part of the answer to violence. But it is also true that it will be the force of ideas rather than the force of arms that will allow globalization to succeed and not break apart in strife.
Securing peace between Israel and Palestine would obviously be of enormous importance, a huge symbolic expression that would militate against the divisiveness and hatred that inspires people to commit acts of terrorism in the name of God.
If we were able to create a space where people of different faiths could live and work together peacefully, it would be a powerful demonstration of a different set of values at work than those which, for decades, have only generated never-ending violence.
To defeat the forces of exclusion and division that lead to terrorism, which now has an enormous reach across all areas of the world, we must turn to education as a major component - not a minor effort - of foreign policy. We need to become literate about other faiths and ways of life.
Therefore, in both economic policy and foreign policy, it is clear than we can't make the world safe for interdependence unless we have strong values that guide us. Peaceful co-existence cannot take root unless we have strong alliances not only across nations but across faiths, through values we hold in common.
Whether the issue is the global economic crisis, African poverty or global warming, faith communities can provide a solid foundation for values and allied endeavors based on those values. But this is only true if faith is not about our traditions or our identity, but about values - not just the values of democracy and freedom, but of the common good, compassion and justice.
Above all, we need an alliance of values that acknowledges - despite differences in creed or color - the equal dignity and equal worth of every individual before God.
This article is adapted from a talk by Tony Blair, the former British prime minister and founder of the Tony Blair Faith Foundation, given last week at Yale University. Distributed by Tribune Media Services.
By Tony Blair
Thursday, December 18, 2008
NEW HAVEN, Connecticut: The pressures of globalization are pushing people together, obliterating boundaries through trade, travel, telecommunications and mass migration. If religious faith in such an interdependent world acts to push people apart, it becomes a force for division and conflict.
That is bad for everybody. But for people of religious faith, that is a particularly bad outcome. It means that faith becomes synonymous not with reconciliation, compassion and justice - what true religious faith should stand for - but with hatred and sectarianism.
I am so convinced of the importance of this issue that, over the past few months, I undertook to conduct a seminar at Yale University to explore the subject. I did so not as an intellectual exercise, but because I believe this is a severely practical matter. Unless we find a way of reconciling faith and globalization, the world will be not only a dangerous place, but globalization itself will be far less successful in spreading prosperity.
There are 10 lessons I've learned from this undertaking:
- Religious faith matters. Whether one likes it or not, billions of people are motivated by religious faith.
- Faith is not in decline. It may be in decline in some places, but not worldwide. In some parts of the world, it is growing.
- Religious faith can operate positively in support, for example, of the UN Millennium Development Goals to reduce poverty and advance development. Wonderful work has been done on this by churches, mosques and Hindu and Jewish interfaith organizations. Or, religion can operate negatively, through fundamentalism or extremism.
- Globalization is forging multi-faith societies. The London my little boy is growing up in is completely different than the London he would have grown up in 30 years ago. The same is true across Europe and the United States as well.
- To work effectively, globalization needs values like trust, confidence, openness and justice.
- Faith is not the only means, but is an important means, of providing those values if faith is itself open and not closed; if it is based on compassion and help for others and not on the basis of exclusionary identity.
- For globalization to flourish, we need social capital - trust in one another, so we can have confidence in the future. Spiritual capital, so to speak, is an important part of social capital.
- In an era, however, of globalization and multi-faith societies, creating such spiritual capital requires not only tolerance of, but respect for, people of other faiths.
- The key to respect is understanding, and hence the need to learn and to educate ourselves about each other's faith and traditions.
- Organized religion should be supporting this process, and allowing through it the evolution of faith so that faith can be a positive, constructive and progressive force.
So, faith matters. Values matter. How those combine will critically define the prospects of success, prosperity and peaceful co-existence of the global society in which we live. The alternative is tension, conflict and violence.
What does this mean practically? I once thought that globalization was a value-free process. Certainly, I thought, one should seek justice in an era of globalization for its own sake, but not for the reasons of efficiency. I have now come to change my view. This current global economic crisis illustrates why.
The crisis is first and foremost a crisis brought about in part by behavior - irresponsibility - that we wish hadn't taken place. And it has been prolonged by the absence of confidence because people can't trust the system.
Values such as trust - being able to rely on the other person's word, or long-term perspective instead of short-term profit maximization - are exactly what will create the confidence required to put our economy back on a sound footing for the future. In other words, confidence and the stability that flows from it cannot be restored by technical, regulatory means alone, but by a restoration of values.
This is but one case that illustrates the idea that an interdependent world cannot function without values that create the bonds of trust. In foreign policy, this can be seen even more clearly. The violent attacks we saw in Mumbai are representative of the type of security threat we face in many places globally, from Iraq to Afghanistan, Iran to Pakistan to our own cities in the West.
Of course, we must be prepared for a military response as part of the answer to violence. But it is also true that it will be the force of ideas rather than the force of arms that will allow globalization to succeed and not break apart in strife.
Securing peace between Israel and Palestine would obviously be of enormous importance, a huge symbolic expression that would militate against the divisiveness and hatred that inspires people to commit acts of terrorism in the name of God.
If we were able to create a space where people of different faiths could live and work together peacefully, it would be a powerful demonstration of a different set of values at work than those which, for decades, have only generated never-ending violence.
To defeat the forces of exclusion and division that lead to terrorism, which now has an enormous reach across all areas of the world, we must turn to education as a major component - not a minor effort - of foreign policy. We need to become literate about other faiths and ways of life.
Therefore, in both economic policy and foreign policy, it is clear than we can't make the world safe for interdependence unless we have strong values that guide us. Peaceful co-existence cannot take root unless we have strong alliances not only across nations but across faiths, through values we hold in common.
Whether the issue is the global economic crisis, African poverty or global warming, faith communities can provide a solid foundation for values and allied endeavors based on those values. But this is only true if faith is not about our traditions or our identity, but about values - not just the values of democracy and freedom, but of the common good, compassion and justice.
Above all, we need an alliance of values that acknowledges - despite differences in creed or color - the equal dignity and equal worth of every individual before God.
This article is adapted from a talk by Tony Blair, the former British prime minister and founder of the Tony Blair Faith Foundation, given last week at Yale University. Distributed by Tribune Media Services.
*********************
Trapped maids face life of abuse in Lebanon
Reuters
Thursday, December 18, 2008
By Yara Bayoumy
An Ethiopian housemaid lies bandaged in a government hospital after falling from a 12th floor balcony. She says her Lebanese employer pushed her off.
"Madam asked me to hang the clothes. Then she came and pushed me from behind," the 25-year-old woman told Reuters. Too frightened to let her name be published, she said her employer had frequently threatened and abused her.
"Madam would tell me, 'I will spill hot oil on you', so I hid the oil. She would take a knife and threaten to kill me. She would beat me with shoes, pull my hair to the floor," the injured woman said, her face still bruised a month later.
According to the New York-based Human Rights Watch (HRW), nearly every week one of an estimated 200,000 migrant domestic workers in Lebanon dies. Suicide, falling while trying to escape their employer and untreated illness are the main causes of death. The employers are rarely prosecuted.
HRW says maids in Lebanon, as elsewhere in the Middle East and Asia, are vulnerable to beatings, rape and even murder for lack of national laws to protect them from abusive employers.
Live-in housemaids have been a fixture among well-off Lebanese families for years. They often do everything from heavy housework to nannying and helping with children's homework.
Many get no days off, work for up to 18 hours and are locked indoors. Others leave the house only to shop or walk a dog.
Employers, who routinely confiscate their passports to deter them from running away, promise to pay maids $150 (96 pounds) to $250 (161 pounds) a month depending on their nationalities. But many employers don't pay as agreed. Some verbally and physically abuse their workers.
They often deduct the first three month's wages to pay a fee to the agencies that import the maids.
"We've definitely seen a lot of cases where the employer would beat, slap (a worker) when she makes a "mistake" - that could be breaking a plate, badly ironing a shirt or burning some food on the stove," added HRW senior researcher Nadim Houry.
EMBASSIES OVERWHELMED
When domestic workers get into distress, they may ask their embassies to help, but staff are often overwhelmed. The Sri Lankan embassy, for example, has two people to handle some 80,000 Sri Lankan workers in Lebanon.
The issues are laid bare in a recent documentary, "Maid in Lebanon II: Voices from Home," directed by Carol Mansour in coordination with the International Labour Organisation (ILO).
The 40-minute film, narrated by a Lebanese woman awaiting the arrival of a maid from the Philippines, provides information about the rights and obligations of employers and workers, the full costs of hiring maids and how they should be treated.
"It's so obvious that there is a problem here," Mansour told Reuters at her office in Beirut's Hamra district.
"The concept of having somebody at home whose language you don't speak, whom you don't trust, you don't know, who comes from a different culture ... It's a bit weird."
The ILO and other groups have helped set up a committee at the Labour Ministry to try to improve conditions for domestic workers.
One proposal is to approve a standard contract stipulating the rights and obligations of employers and workers, and to add specific legal provisions to guarantee workers' rights.
Abdallah Razzouk, the head of the committee, told Reuters that he expected the contract to be approved and the draft law sent to parliament "in the immediate future," provisionally in early 2009.
Now workers have little recourse if they are not paid. They come to Lebanon under a sponsorship system that ties them to employers. They forfeit any legal status if they run away from abusive employers.
Maids often go unpaid because their employers miscalculate the true expense of employing them. They often think a maid will cost only her $150 monthly wage, but fail to factor in agency fees, food, clothes, medicine and return tickets.
"That's the biggest problem, people who cannot afford these workers are bringing them in," says Simel Esim, an ILO official specializing in gender equality and women workers.
NEW SLAVERY
Indrani, a 27-year-old Sri Lankan, lived for 18 months in a shelter run by the Christian charity group Caritas after running away from an abusive employer.
"I was paid the first year and a half. But then I wasn't paid for the next eight years. When I asked for money, Madam would swear at me, break glasses against the wall. She spoke to me like a donkey," she told Reuters recently at the shelter in Beirut.
"I was only given some bread and rice to eat. Fruit was forbidden. I woke up at 9 a.m. and slept at 4:30 or 5 a.m. I was not allowed to speak to my parents. They thought I had died," she said, tears welling up.
Indrani has since returned home. But every day countless other maids are physically and emotionally abused by employers across the Middle East and in Asia, where laws protecting their rights are flimsy and abusive employers are rarely punished for their crimes.
Even if rights groups persuade the Lebanese government to improve the legal framework for domestic workers, they face a tougher task in changing attitudes among many Lebanese who refer to their maids openly in conversation as "slaves" or "liars and thieves."
"The way a large number of Lebanese deal with them is like a new slavery," said HRW's Houry.
(Editing by Alistair Lyon and Megan Goldin)
Reuters
Thursday, December 18, 2008
By Yara Bayoumy
An Ethiopian housemaid lies bandaged in a government hospital after falling from a 12th floor balcony. She says her Lebanese employer pushed her off.
"Madam asked me to hang the clothes. Then she came and pushed me from behind," the 25-year-old woman told Reuters. Too frightened to let her name be published, she said her employer had frequently threatened and abused her.
"Madam would tell me, 'I will spill hot oil on you', so I hid the oil. She would take a knife and threaten to kill me. She would beat me with shoes, pull my hair to the floor," the injured woman said, her face still bruised a month later.
According to the New York-based Human Rights Watch (HRW), nearly every week one of an estimated 200,000 migrant domestic workers in Lebanon dies. Suicide, falling while trying to escape their employer and untreated illness are the main causes of death. The employers are rarely prosecuted.
HRW says maids in Lebanon, as elsewhere in the Middle East and Asia, are vulnerable to beatings, rape and even murder for lack of national laws to protect them from abusive employers.
Live-in housemaids have been a fixture among well-off Lebanese families for years. They often do everything from heavy housework to nannying and helping with children's homework.
Many get no days off, work for up to 18 hours and are locked indoors. Others leave the house only to shop or walk a dog.
Employers, who routinely confiscate their passports to deter them from running away, promise to pay maids $150 (96 pounds) to $250 (161 pounds) a month depending on their nationalities. But many employers don't pay as agreed. Some verbally and physically abuse their workers.
They often deduct the first three month's wages to pay a fee to the agencies that import the maids.
"We've definitely seen a lot of cases where the employer would beat, slap (a worker) when she makes a "mistake" - that could be breaking a plate, badly ironing a shirt or burning some food on the stove," added HRW senior researcher Nadim Houry.
EMBASSIES OVERWHELMED
When domestic workers get into distress, they may ask their embassies to help, but staff are often overwhelmed. The Sri Lankan embassy, for example, has two people to handle some 80,000 Sri Lankan workers in Lebanon.
The issues are laid bare in a recent documentary, "Maid in Lebanon II: Voices from Home," directed by Carol Mansour in coordination with the International Labour Organisation (ILO).
The 40-minute film, narrated by a Lebanese woman awaiting the arrival of a maid from the Philippines, provides information about the rights and obligations of employers and workers, the full costs of hiring maids and how they should be treated.
"It's so obvious that there is a problem here," Mansour told Reuters at her office in Beirut's Hamra district.
"The concept of having somebody at home whose language you don't speak, whom you don't trust, you don't know, who comes from a different culture ... It's a bit weird."
The ILO and other groups have helped set up a committee at the Labour Ministry to try to improve conditions for domestic workers.
One proposal is to approve a standard contract stipulating the rights and obligations of employers and workers, and to add specific legal provisions to guarantee workers' rights.
Abdallah Razzouk, the head of the committee, told Reuters that he expected the contract to be approved and the draft law sent to parliament "in the immediate future," provisionally in early 2009.
Now workers have little recourse if they are not paid. They come to Lebanon under a sponsorship system that ties them to employers. They forfeit any legal status if they run away from abusive employers.
Maids often go unpaid because their employers miscalculate the true expense of employing them. They often think a maid will cost only her $150 monthly wage, but fail to factor in agency fees, food, clothes, medicine and return tickets.
"That's the biggest problem, people who cannot afford these workers are bringing them in," says Simel Esim, an ILO official specializing in gender equality and women workers.
NEW SLAVERY
Indrani, a 27-year-old Sri Lankan, lived for 18 months in a shelter run by the Christian charity group Caritas after running away from an abusive employer.
"I was paid the first year and a half. But then I wasn't paid for the next eight years. When I asked for money, Madam would swear at me, break glasses against the wall. She spoke to me like a donkey," she told Reuters recently at the shelter in Beirut.
"I was only given some bread and rice to eat. Fruit was forbidden. I woke up at 9 a.m. and slept at 4:30 or 5 a.m. I was not allowed to speak to my parents. They thought I had died," she said, tears welling up.
Indrani has since returned home. But every day countless other maids are physically and emotionally abused by employers across the Middle East and in Asia, where laws protecting their rights are flimsy and abusive employers are rarely punished for their crimes.
Even if rights groups persuade the Lebanese government to improve the legal framework for domestic workers, they face a tougher task in changing attitudes among many Lebanese who refer to their maids openly in conversation as "slaves" or "liars and thieves."
"The way a large number of Lebanese deal with them is like a new slavery," said HRW's Houry.
(Editing by Alistair Lyon and Megan Goldin)
Software that opens worlds to the disabled
By James Flanigan
Thursday, December 18, 2008
One computer program would allow vision-impaired shoppers to point their cellphones at supermarket shelves and hear descriptions of products and prices. Another would allow a physically disabled person to guide a computer mouse using brain waves and eye movements.
The two programs were among those created by eight groups of volunteers at a two-day software-writing competition this fall. The goal of the competition, sponsored by a nonprofit corporation, is to encourage new computer programs that help disabled people expand their capabilities.
The corporation, set up by computer science students and graduates at the University of Southern California, is named Project:Possibility. It grew out of an idea two years ago by Christopher Leung, then a master's degree candidate in computer science and engineering at the university, who was working on a project at NASA's Jet Propulsion Laboratory in Pasadena.
As Leung explained in a recent interview, "The project manager came to me and said: 'Chris, we have several blind students coming to work with us this summer. If you can think of anything we can do for them, let me know.' "
At the time, Leung said, he was working on a solar system visualization program. "I came up with a project called 'touch the sky' where a blind person would use a forced feedback device to feel three-dimensional reconstructions of terrain on other planets," he said.
The experience inspired him to think beyond just one group of students and one project. "It was apparent that there was a need for a larger organized effort, a community of developers and disabled persons to conceptualize projects that can help people," Leung said. "So I gathered colleagues into a room at JPL, pitched the idea and asked for their help. Several of them and dozens of others since then have taken on the challenge and brought Project: Possibility to where it is today."
The effort is centered at the University of Southern California and led by volunteers, including Ely Lerner, an information systems developer at Amgen Inc.; Elias Sayfi, a senior software engineer at the Jet Propulsion Laboratory; and Stanley Lam, an undergraduate business student at the university.
In 2007, they organized a competition called "Code for a Cause" in which 25 students in five teams engaged in a weekend of intense computer code-writing. The event attracted assistance from executives at Google, Amgen and the propulsion laboratory. This year, in October, the competition expanded to 50 students in eight teams with mentors from Google, Amgen and the laboratory, as well as judges from Lockheed Martin and Amgen and encouraging words from a Microsoft executive.
The competition was won by Bar Code Reader, the program to help the visually impaired read information on grocery items. Second place went to Mind Control, which allows the physically disabled to guide a computer mouse by neural impulses. All the code, written in 12-hour sessions on a single weekend, made progress, but also left room for further development.
The Bar Code Reader team "didn't hook up a cellphone, so we used a Motorola simulator," said Michael Crowley, an associate professor of engineering practice who was the mentor for the team.
James Han, founder of ProsForPros, an Internet hosting and consulting firm for small businesses, was the mentor of the Mind Control team. "We were able to leverage open-source codes for mouse control and link to the neural actuator in the first 12 hours," Han said. "In the second 12, we created the user interface. I believe implementation of the program is currently in development with similar devices."
Project:Possibility directors have plans for more ambitious projects. First, there will be a competition in February with teams of computer science students at the University of California, Los Angeles, in hopes of multiplying the number of programs to help the disabled. The project also plans to create a worldwide open-source Web site on which disabled persons and software developers can collaborate on new ideas and add to existing programs.
"Imagine a specialist Facebook or MySpace-type social network in which users would be involved in designing the tools they want and need," said Stephen Lee, a British software developer who operates Fullmeasure.co.UK and is a director of Project:Possibility. "Students would talk to users and work on projects that meet needs as well as be exciting."
He estimated that "an active online community may well take six or more months to organize, as there is inertia and shyness to overcome." There will also be costs to create such an online community, he said, "for Web hosting, associated technology costs and set-up labor."
To date, Project:Possibility has operated without revenue and without pay for participants. Its programs belong to the nonprofit project and to the University of Southern California. Its sole source of financing was a $15,000 grant in early 2008 from the Mozilla Foundation, an organization that promotes the concept of the Internet as a public resource open to everyone.
Nor does Project:Possibility intend to be a commercial venture, Leung said. "We do not plan to earn revenue through a spread of our programs. In fact," he said, "we plan to be completely open-source — our programs can be downloaded, modified and used by anyone at no cost — in hopes that similar programs will spread to other universities and around the world with or without our involvement."
But, at a project meeting early this month, the directors decided to establish a paid position. "We are looking to grow and that will require people to dedicate even more of their time to this project," Leung said. So it will be necessary to "compensate for our core positions and perhaps one day to have a full-time staff."
Leung lives and works these days in Beijing. "I'm a Chinese-American who grew up in Northern California and never spoke Chinese," he said. "So I'm learning Chinese and working here, but keeping in touch online with Project:Possibility."
To pay for staff, the project will continue to depend on grants from companies and charitable groups. At some point, it hopes to establish regular fund-raising efforts for its nonprofit operations.
"What's great is that companies like Google and Mozilla support our projects," Leung said. The companies gain by getting ideas on technological breakthroughs and seeing ways to adapt them to everyday products. One Project:Possibility program, for example, called Community Captioner, integrates subtitles with YouTube "so the hearing-impaired can have sound with their videos."
By James Flanigan
Thursday, December 18, 2008
One computer program would allow vision-impaired shoppers to point their cellphones at supermarket shelves and hear descriptions of products and prices. Another would allow a physically disabled person to guide a computer mouse using brain waves and eye movements.
The two programs were among those created by eight groups of volunteers at a two-day software-writing competition this fall. The goal of the competition, sponsored by a nonprofit corporation, is to encourage new computer programs that help disabled people expand their capabilities.
The corporation, set up by computer science students and graduates at the University of Southern California, is named Project:Possibility. It grew out of an idea two years ago by Christopher Leung, then a master's degree candidate in computer science and engineering at the university, who was working on a project at NASA's Jet Propulsion Laboratory in Pasadena.
As Leung explained in a recent interview, "The project manager came to me and said: 'Chris, we have several blind students coming to work with us this summer. If you can think of anything we can do for them, let me know.' "
At the time, Leung said, he was working on a solar system visualization program. "I came up with a project called 'touch the sky' where a blind person would use a forced feedback device to feel three-dimensional reconstructions of terrain on other planets," he said.
The experience inspired him to think beyond just one group of students and one project. "It was apparent that there was a need for a larger organized effort, a community of developers and disabled persons to conceptualize projects that can help people," Leung said. "So I gathered colleagues into a room at JPL, pitched the idea and asked for their help. Several of them and dozens of others since then have taken on the challenge and brought Project: Possibility to where it is today."
The effort is centered at the University of Southern California and led by volunteers, including Ely Lerner, an information systems developer at Amgen Inc.; Elias Sayfi, a senior software engineer at the Jet Propulsion Laboratory; and Stanley Lam, an undergraduate business student at the university.
In 2007, they organized a competition called "Code for a Cause" in which 25 students in five teams engaged in a weekend of intense computer code-writing. The event attracted assistance from executives at Google, Amgen and the propulsion laboratory. This year, in October, the competition expanded to 50 students in eight teams with mentors from Google, Amgen and the laboratory, as well as judges from Lockheed Martin and Amgen and encouraging words from a Microsoft executive.
The competition was won by Bar Code Reader, the program to help the visually impaired read information on grocery items. Second place went to Mind Control, which allows the physically disabled to guide a computer mouse by neural impulses. All the code, written in 12-hour sessions on a single weekend, made progress, but also left room for further development.
The Bar Code Reader team "didn't hook up a cellphone, so we used a Motorola simulator," said Michael Crowley, an associate professor of engineering practice who was the mentor for the team.
James Han, founder of ProsForPros, an Internet hosting and consulting firm for small businesses, was the mentor of the Mind Control team. "We were able to leverage open-source codes for mouse control and link to the neural actuator in the first 12 hours," Han said. "In the second 12, we created the user interface. I believe implementation of the program is currently in development with similar devices."
Project:Possibility directors have plans for more ambitious projects. First, there will be a competition in February with teams of computer science students at the University of California, Los Angeles, in hopes of multiplying the number of programs to help the disabled. The project also plans to create a worldwide open-source Web site on which disabled persons and software developers can collaborate on new ideas and add to existing programs.
"Imagine a specialist Facebook or MySpace-type social network in which users would be involved in designing the tools they want and need," said Stephen Lee, a British software developer who operates Fullmeasure.co.UK and is a director of Project:Possibility. "Students would talk to users and work on projects that meet needs as well as be exciting."
He estimated that "an active online community may well take six or more months to organize, as there is inertia and shyness to overcome." There will also be costs to create such an online community, he said, "for Web hosting, associated technology costs and set-up labor."
To date, Project:Possibility has operated without revenue and without pay for participants. Its programs belong to the nonprofit project and to the University of Southern California. Its sole source of financing was a $15,000 grant in early 2008 from the Mozilla Foundation, an organization that promotes the concept of the Internet as a public resource open to everyone.
Nor does Project:Possibility intend to be a commercial venture, Leung said. "We do not plan to earn revenue through a spread of our programs. In fact," he said, "we plan to be completely open-source — our programs can be downloaded, modified and used by anyone at no cost — in hopes that similar programs will spread to other universities and around the world with or without our involvement."
But, at a project meeting early this month, the directors decided to establish a paid position. "We are looking to grow and that will require people to dedicate even more of their time to this project," Leung said. So it will be necessary to "compensate for our core positions and perhaps one day to have a full-time staff."
Leung lives and works these days in Beijing. "I'm a Chinese-American who grew up in Northern California and never spoke Chinese," he said. "So I'm learning Chinese and working here, but keeping in touch online with Project:Possibility."
To pay for staff, the project will continue to depend on grants from companies and charitable groups. At some point, it hopes to establish regular fund-raising efforts for its nonprofit operations.
"What's great is that companies like Google and Mozilla support our projects," Leung said. The companies gain by getting ideas on technological breakthroughs and seeing ways to adapt them to everyday products. One Project:Possibility program, for example, called Community Captioner, integrates subtitles with YouTube "so the hearing-impaired can have sound with their videos."
'Purpose Driven' pastor to give inaugural invocation
By Katharine Q. Seelye
Thursday, December 18, 2008
Barack Obama has selected the Reverend Rick Warren, the evangelical pastor and author of "The Purpose Driven Life," to deliver the invocation at his inauguration, a role that positions Warren to succeed Billy Graham as the nation's pre-eminent minister and reflects the generational changes in the evangelical Christian movement.
In a departure from past inaugurations, which usually featured operatic soloists, Aretha Franklin will perform. A quartet that includes Itzhak Perlman and Yo-Yo Ma will play a piece composed for the inauguration by John Williams, whose "Patriot" resounded during Obama's election-night celebration in Grant Park in Chicago.
The program for Obama's inauguration on Jan. 20 was announced Wednesday by the Joint Congressional Committee on Inaugural Celebrations.
Inauguration programs follow a traditional outline but also allow a president-elect to put his stamp on the proceedings and set the tone for his administration.
The choice of Warren, pastor of a megachurch in Orange County, California, is an olive branch to conservative Christian evangelicals. He is an outspoken opponent of abortion and same-sex marriage - litmus-test issues for Christian conservatives. In fact, his selection set off a round of criticism by gay rights groups angered by his support for California's ban on same-sex marriages.
But Warren has also been one of the most prominent evangelical leaders calling for Christians to expand their agenda and confront global problems like poverty, AIDS, climate change and genocide in Darfur. He has sometimes angered the older generation of conservative evangelical leaders aligned with the Republican Party, as when he invited Obama to speak about AIDS at an earlier event at his church.
Obama was asked at a news conference Thursday about the furious reaction from some gay-rights groups to his decision to ask Warren to play a prominent role in his Inauguration.
He defended the decision as part of his effort to involve a broad range of Americans in the nation's business and discourse without sacrificing civility. "I think that it is no secret that I am a fierce advocate for equality for gay and lesbian Americans," Obama said.
He noted that he had been invited by Warren to speak at his church a few years ago - despite their obvious differences - and added that "that dialogue, I think, is part of what my campaign's been all about; that we're not going to agree on every single issue, but what we have to do is to be able to create an atmosphere where we can disagree without being disagreeable."
"That's part of the magic of this country," said Obama, "is that we are diverse and noisy and opinionated."
Warren showed his clout this year when he managed to draw both John McCain and Barack Obama to his Saddleback Church for a forum in which he interviewed them on stage about faith issues.
Following Warren on the inaugural program will be Franklin, who grew up singing gospel music before turning to soul and pop. She sang at Bill Clinton's inauguration concert in 1993 but not at the inauguration ceremony itself.
Next, Vice President-elect Joseph Biden Jr. will be sworn in by Justice John Paul Stevens.
Then the new work by Williams will be played by a classical devotee's fantasy quartet: Perlman on violin, Ma on cello, Gabriela Montero on piano and Anthony McGill on clarinet.
Chief Justice John Roberts Jr. will administer the oath of office to Obama, who will then deliver his inaugural address.
A poetry reading will follow by Elizabeth Alexander, who teaches African-American studies at Yale and is only the fourth poet to read at an inauguration. (The others were Robert Frost in 1961, Maya Angelou in 1993, and Miller Williams in 1997.)
Obama has asked the Reverend Joseph Lowery, co-founder with the Reverend Martin Luther King Jr. of the Southern Christian Leadership Conference, to deliver the benediction.
The ceremony will close with the Sea Chanters of the U.S. Navy Band singing the national anthem.
Laurie Goodstein contributed reporting for this article.
By Katharine Q. Seelye
Thursday, December 18, 2008
Barack Obama has selected the Reverend Rick Warren, the evangelical pastor and author of "The Purpose Driven Life," to deliver the invocation at his inauguration, a role that positions Warren to succeed Billy Graham as the nation's pre-eminent minister and reflects the generational changes in the evangelical Christian movement.
In a departure from past inaugurations, which usually featured operatic soloists, Aretha Franklin will perform. A quartet that includes Itzhak Perlman and Yo-Yo Ma will play a piece composed for the inauguration by John Williams, whose "Patriot" resounded during Obama's election-night celebration in Grant Park in Chicago.
The program for Obama's inauguration on Jan. 20 was announced Wednesday by the Joint Congressional Committee on Inaugural Celebrations.
Inauguration programs follow a traditional outline but also allow a president-elect to put his stamp on the proceedings and set the tone for his administration.
The choice of Warren, pastor of a megachurch in Orange County, California, is an olive branch to conservative Christian evangelicals. He is an outspoken opponent of abortion and same-sex marriage - litmus-test issues for Christian conservatives. In fact, his selection set off a round of criticism by gay rights groups angered by his support for California's ban on same-sex marriages.
But Warren has also been one of the most prominent evangelical leaders calling for Christians to expand their agenda and confront global problems like poverty, AIDS, climate change and genocide in Darfur. He has sometimes angered the older generation of conservative evangelical leaders aligned with the Republican Party, as when he invited Obama to speak about AIDS at an earlier event at his church.
Obama was asked at a news conference Thursday about the furious reaction from some gay-rights groups to his decision to ask Warren to play a prominent role in his Inauguration.
He defended the decision as part of his effort to involve a broad range of Americans in the nation's business and discourse without sacrificing civility. "I think that it is no secret that I am a fierce advocate for equality for gay and lesbian Americans," Obama said.
He noted that he had been invited by Warren to speak at his church a few years ago - despite their obvious differences - and added that "that dialogue, I think, is part of what my campaign's been all about; that we're not going to agree on every single issue, but what we have to do is to be able to create an atmosphere where we can disagree without being disagreeable."
"That's part of the magic of this country," said Obama, "is that we are diverse and noisy and opinionated."
Warren showed his clout this year when he managed to draw both John McCain and Barack Obama to his Saddleback Church for a forum in which he interviewed them on stage about faith issues.
Following Warren on the inaugural program will be Franklin, who grew up singing gospel music before turning to soul and pop. She sang at Bill Clinton's inauguration concert in 1993 but not at the inauguration ceremony itself.
Next, Vice President-elect Joseph Biden Jr. will be sworn in by Justice John Paul Stevens.
Then the new work by Williams will be played by a classical devotee's fantasy quartet: Perlman on violin, Ma on cello, Gabriela Montero on piano and Anthony McGill on clarinet.
Chief Justice John Roberts Jr. will administer the oath of office to Obama, who will then deliver his inaugural address.
A poetry reading will follow by Elizabeth Alexander, who teaches African-American studies at Yale and is only the fourth poet to read at an inauguration. (The others were Robert Frost in 1961, Maya Angelou in 1993, and Miller Williams in 1997.)
Obama has asked the Reverend Joseph Lowery, co-founder with the Reverend Martin Luther King Jr. of the Southern Christian Leadership Conference, to deliver the benediction.
The ceremony will close with the Sea Chanters of the U.S. Navy Band singing the national anthem.
Laurie Goodstein contributed reporting for this article.
*****************
Bill Clinton lifts veil from foundation's donor list
By Peter Baker and Charlie Savage
Thursday, December 18, 2008
WASHINGTON: The governments of Saudi Arabia and Norway, the Dubai Foundation and the businessmen Bill Gates, Stephen Bing, Haim Saban and Robert Johnson are among the biggest financial backers of former President Bill Clinton's foundation over the last decade, according to a complete donor list published Thursday for the first time.
Lifting a longstanding cloak of secrecy, Clinton disclosed the names of more than 200,000 donors to his foundation as part of an agreement negotiated with President-elect Barack Obama to douse concerns about potential conflicts of interest if Senator Hillary Rodham Clinton is confirmed as secretary of state.
The donor list, posted on the Web site of the William J. Clinton Foundation, www.clintonfoundation.org, indicates that his organization accepted multimillion-dollar gifts from a variety of foreign governments, companies and individuals who might have an interest in U.S. foreign policy.
Many of these were known, and it was not immediately clear whether the disclosure of others might pose a diplomatic or political problem to any foreign donors.
The foundation raised $500 million over the last decade to pay for Clinton's presidential library and his philanthropic activities.
Federal law does not require a former president to reveal his foundation's financial benefactors and Clinton had previously declined to do so, arguing that many who gave expected confidentiality. But when Obama asked Hillary Clinton to join his cabinet, the former president agreed to release his list as part of an agreement intended to keep his multifaceted activities from compromising his wife's prospective work.
Bill Clinton's advocates said the publication of the list showed that he had nothing to hide. The foundation said that its median gift since its inception came to $45.
The list does not detail the precise amounts of the donations, nor the dates they were given, instead breaking down contributors by general dollar ranges. Clinton's aides said they have been laboring to track down and notify the 208,000 donors - people, companies and governments - that their identities would be made public.
The potential for foreign donors to create the appearance of conflicts of interest for Hillary Clinton as she handles foreign policy matters was illustrated by Amar Singh, listed as giving between $1 million and $5 million. The donor is apparently the prominent Indian politician of that name.
In September, Amar Singh visited Washington to lobby Congress to support a deal allowing India to obtain civilian nuclear fuel and technology from the United States. The deal was controversial because India has developed nuclear weapons but is not a party to the Nuclear Nonproliferation Treaty.
Singh met with Senator Clinton, afterward telling Indian reporters that she had assured him that Democrats would not block the deal. Congress approved the nuclear cooperation deal a few days later.
Several other donors have connections to India, a potential foreign policy flashpoint due to tensions with Pakistan.
One was Lakshmi Mittal, the businessman who made billions in the steel industry and is one of the richest men in the world. A London resident, Mittal, who donated between $1 million and $5 million, is a director of India's second largest bank. In 2002, Mittal was involved in a British scandal when, shortly after making a large donation to the Labour Party, he gained help from Tony Blair, who then was prime minister, in his attempt to convince Romania to sell him its state steel company.
The two largest contributors, listed as giving more than $25 million apiece, were the Children's Investment Fund Foundation, a grant-making charity that focuses on sub-Saharan Africa and India, and Unitaid, an international alliance formed two years ago to fight HIV/AIDS. An additional 11 donors gave from $10 million to $25 million, including Bing, Gates's foundation and the Saudi government.
Also in this category is Frank Giustra, the Canadian mining financier whose dealings with Clinton have drawn questions in the past. Clinton traveled with Giustra in 2005 to Kazakhstan, where Giustra was seeking uranium contracts. Clinton lavished praise on Kazakhstan's authoritarian leader, Nursultan Nazarbayev, and Giustra's company soon afterward signed preliminary agreements to buy into state-controlled uranium projects.
Months later, The New York Times reported earlier this year, Giustra donated $31.3 million to the Clinton foundation. On the list posted Thursday, Giustra is reported as having given from $10 million to $25 million personally and the Clinton Giustra Sustainable Growth Initiative-Canada is reported as having given from $1 million to $5 million.
Another donor listed as giving between $1 million and $5 million is Victor Pinchuk, a Ukrainian businessman who is the son-in-law of that nation's former authoritarian president, Leonid Kuchma, whose handpicked successor was prevented from taking power during the so-called Orange Revolution of 2004.
Among governments - or entities funded by them - that contributed, Saudi Arabia was the largest donor, giving between $10 million and $25 million. Norway gave between $5 million and $10 million. Kuwait, Qatar, the Dubai Foundation, Brunei Darussalam, and Oman donated between $1 million and $5 million each.
Irish Aid and China Overseas Real Estate Development Corp. donated several hundred thousand dollars each. Italy and Jamaica each donated between $50,000 and $100,000.
Some of the more notable donors were previously known. For example, Denise Rich, the former wife of onetime fugitive financier Marc Rich, to whom Bill Clinton gave a pardon in his final hours as president, is listed as giving between $250,001 and $500,000.
Other donations seemed noteworthy more for their celebrity value than anything else. Thus, one of the larger donors was Michael Schumacher, listed as giving $5 million to $10 million. The Formula One race car driver of that name has been associated with many charities over the years.
Since leaving the White House, Bill Clinton has traveled the world collecting six-figure fees for speeches and even larger checks for his charitable activities. He pulled in $10.1 million for 54 speeches last year alone and in recent weeks has spoken at a symposium sponsored by the National Bank of Kuwait and an event organized at the behest of a Malaysian businessman who has been under fire from his own investors.
At the same time, Clinton's foundation and its various offshoots have promoted programs to fight malaria, AIDS, malnutrition and other maladies around the world, sometimes in tandem with foreign governments. The foundation said it has provided medicine to 1.4 million people living with HIV/AIDS, helped dozens of cities reduce greenhouse gases and worked to spread economic opportunity.
With Hillary Clinton scheduled to take over the State Department, Obama's team wanted to find a way to prevent the former president's numerous business and philanthropic affiliations from creating awkward situations of apparent conflict with administration policy. But Obama's aides said they also wanted to find a balance that would allow the charitable programs to continue their work.
Bill Clinton accepted a variety of limitations on his personal business activities and involvement in his global philanthropic organizations that go beyond federal law. He agreed to submit future personal speeches and consulting contracts for review by State Department ethics officials and, if necessary, by the White House counsel's office.
If his wife is confirmed, Clinton also agreed to incorporate the Clinton Global Initiative, which promotes efforts to fight disease, poverty and climate change, separately from his foundation so that he will have less direct involvement.
By Peter Baker and Charlie Savage
Thursday, December 18, 2008
WASHINGTON: The governments of Saudi Arabia and Norway, the Dubai Foundation and the businessmen Bill Gates, Stephen Bing, Haim Saban and Robert Johnson are among the biggest financial backers of former President Bill Clinton's foundation over the last decade, according to a complete donor list published Thursday for the first time.
Lifting a longstanding cloak of secrecy, Clinton disclosed the names of more than 200,000 donors to his foundation as part of an agreement negotiated with President-elect Barack Obama to douse concerns about potential conflicts of interest if Senator Hillary Rodham Clinton is confirmed as secretary of state.
The donor list, posted on the Web site of the William J. Clinton Foundation, www.clintonfoundation.org, indicates that his organization accepted multimillion-dollar gifts from a variety of foreign governments, companies and individuals who might have an interest in U.S. foreign policy.
Many of these were known, and it was not immediately clear whether the disclosure of others might pose a diplomatic or political problem to any foreign donors.
The foundation raised $500 million over the last decade to pay for Clinton's presidential library and his philanthropic activities.
Federal law does not require a former president to reveal his foundation's financial benefactors and Clinton had previously declined to do so, arguing that many who gave expected confidentiality. But when Obama asked Hillary Clinton to join his cabinet, the former president agreed to release his list as part of an agreement intended to keep his multifaceted activities from compromising his wife's prospective work.
Bill Clinton's advocates said the publication of the list showed that he had nothing to hide. The foundation said that its median gift since its inception came to $45.
The list does not detail the precise amounts of the donations, nor the dates they were given, instead breaking down contributors by general dollar ranges. Clinton's aides said they have been laboring to track down and notify the 208,000 donors - people, companies and governments - that their identities would be made public.
The potential for foreign donors to create the appearance of conflicts of interest for Hillary Clinton as she handles foreign policy matters was illustrated by Amar Singh, listed as giving between $1 million and $5 million. The donor is apparently the prominent Indian politician of that name.
In September, Amar Singh visited Washington to lobby Congress to support a deal allowing India to obtain civilian nuclear fuel and technology from the United States. The deal was controversial because India has developed nuclear weapons but is not a party to the Nuclear Nonproliferation Treaty.
Singh met with Senator Clinton, afterward telling Indian reporters that she had assured him that Democrats would not block the deal. Congress approved the nuclear cooperation deal a few days later.
Several other donors have connections to India, a potential foreign policy flashpoint due to tensions with Pakistan.
One was Lakshmi Mittal, the businessman who made billions in the steel industry and is one of the richest men in the world. A London resident, Mittal, who donated between $1 million and $5 million, is a director of India's second largest bank. In 2002, Mittal was involved in a British scandal when, shortly after making a large donation to the Labour Party, he gained help from Tony Blair, who then was prime minister, in his attempt to convince Romania to sell him its state steel company.
The two largest contributors, listed as giving more than $25 million apiece, were the Children's Investment Fund Foundation, a grant-making charity that focuses on sub-Saharan Africa and India, and Unitaid, an international alliance formed two years ago to fight HIV/AIDS. An additional 11 donors gave from $10 million to $25 million, including Bing, Gates's foundation and the Saudi government.
Also in this category is Frank Giustra, the Canadian mining financier whose dealings with Clinton have drawn questions in the past. Clinton traveled with Giustra in 2005 to Kazakhstan, where Giustra was seeking uranium contracts. Clinton lavished praise on Kazakhstan's authoritarian leader, Nursultan Nazarbayev, and Giustra's company soon afterward signed preliminary agreements to buy into state-controlled uranium projects.
Months later, The New York Times reported earlier this year, Giustra donated $31.3 million to the Clinton foundation. On the list posted Thursday, Giustra is reported as having given from $10 million to $25 million personally and the Clinton Giustra Sustainable Growth Initiative-Canada is reported as having given from $1 million to $5 million.
Another donor listed as giving between $1 million and $5 million is Victor Pinchuk, a Ukrainian businessman who is the son-in-law of that nation's former authoritarian president, Leonid Kuchma, whose handpicked successor was prevented from taking power during the so-called Orange Revolution of 2004.
Among governments - or entities funded by them - that contributed, Saudi Arabia was the largest donor, giving between $10 million and $25 million. Norway gave between $5 million and $10 million. Kuwait, Qatar, the Dubai Foundation, Brunei Darussalam, and Oman donated between $1 million and $5 million each.
Irish Aid and China Overseas Real Estate Development Corp. donated several hundred thousand dollars each. Italy and Jamaica each donated between $50,000 and $100,000.
Some of the more notable donors were previously known. For example, Denise Rich, the former wife of onetime fugitive financier Marc Rich, to whom Bill Clinton gave a pardon in his final hours as president, is listed as giving between $250,001 and $500,000.
Other donations seemed noteworthy more for their celebrity value than anything else. Thus, one of the larger donors was Michael Schumacher, listed as giving $5 million to $10 million. The Formula One race car driver of that name has been associated with many charities over the years.
Since leaving the White House, Bill Clinton has traveled the world collecting six-figure fees for speeches and even larger checks for his charitable activities. He pulled in $10.1 million for 54 speeches last year alone and in recent weeks has spoken at a symposium sponsored by the National Bank of Kuwait and an event organized at the behest of a Malaysian businessman who has been under fire from his own investors.
At the same time, Clinton's foundation and its various offshoots have promoted programs to fight malaria, AIDS, malnutrition and other maladies around the world, sometimes in tandem with foreign governments. The foundation said it has provided medicine to 1.4 million people living with HIV/AIDS, helped dozens of cities reduce greenhouse gases and worked to spread economic opportunity.
With Hillary Clinton scheduled to take over the State Department, Obama's team wanted to find a way to prevent the former president's numerous business and philanthropic affiliations from creating awkward situations of apparent conflict with administration policy. But Obama's aides said they also wanted to find a balance that would allow the charitable programs to continue their work.
Bill Clinton accepted a variety of limitations on his personal business activities and involvement in his global philanthropic organizations that go beyond federal law. He agreed to submit future personal speeches and consulting contracts for review by State Department ethics officials and, if necessary, by the White House counsel's office.
If his wife is confirmed, Clinton also agreed to incorporate the Clinton Global Initiative, which promotes efforts to fight disease, poverty and climate change, separately from his foundation so that he will have less direct involvement.
*******************
COLUMNIST
Gail Collins: Send in the celebrities
Thursday, December 18, 2008
Caroline Kennedy wants Hillary Clinton's Senate seat. And New York is taking her seriously. We are talking about this matter a lot when we aren't otherwise engaged in attempting to string up rogue investment advisers.
A free U.S. Senate seat is a very fine thing, especially since Governor David Paterson does not seem to be expecting a holiday envelope from the lucky winner, unlike some governors we could mention.
However, Paterson does want someone who could come up with around $50 million for a statewide campaign in 2010, and Kennedy has been super-successful at raising money for New York City's public schools and other good causes. Although it's important to note that asking for money to buy books for poor children is not quite the same thing as asking for money to buy 60-second TV commercials about how great you are.
It is a tribute to the raging mediocrity of New York politics that while many people have expressed reservations about giving the Senate job to an untested, hitherto publicity-shy political novice, their protests often wind up with: "Why pick Caroline Kennedy when we could have - um ..."
In New York, two kinds of homegrown politicians tend to rise to the top of the heap. The smart, hard-working ones have sharp elbows and impossible egos. (I'm remembering Ed Koch on a long-ago visit to Berlin, waving at the East German guards at the checkpoint and yelling: "I'm here! It's me! It's me!") The charming, easy-going ones tend to have the IQ of a cucumber.
As Adam Nagourney and Nicholas Confessore wrote in The New York Times, Kennedy has a reputation for "quiet competence and dignity." If nothing else, that would be a novelty.
My biggest concern about the Kennedy-for-Senate boom is that the whole idea sounds as if it had been inspired by telephone conversations between Caroline and her Uncle Ted, followed by encouraging calls from her cousin Robert. We should always be leery of plans that develop during excited phone calls among family members. I remember a time when my sisters and I got extremely enthusiastic about renting a stretch limo at Christmastime and taking everybody on a tour of the holiday lights of Cincinnati. It turned out that unlike fireworks, Christmas lights work best in small doses, unless you have an unlimited appetite for viewing blowup replicas of the Nativity.
People keep asking if Kennedy has the stomach for long campaigns in upstate New York - if she is, in the words of Representative Gary Ackerman of Queens, prepared to "do Utica."
Really, that's the least of it. The people of Utica are lovely, as long as you don't have to come up with any specific ideas for resurrecting their city from its century-long swoon. And it's easy to imagine Kennedy doing a Hillary-like "listening tour," having roundtable discussions about the dairy compact or broadband access while the press corps gently naps in the rear row.
But how much of her life does she really want to spend at fund-raisers for people she suspects will be indicted before they have a chance to cash the checks? How does she feel about admiring butter sculptures at state fairs?
I remember watching Hillary tour the fair in Syracuse, New York, with her family in tow, stopping at a booth that featured a teeny table with teeny teacups and a sign: "Reserved for the Clintons." Bill and Hillary, instantly perceiving their duty, pulled up two teeny chairs and plopped right down. Chelsea, who was normally an absolute rock during these events, looked as if she wanted the earth to swallow her up.
It is admittedly not fair that a person with a famous name could get this Senate opportunity instead of some worthy if irritating member of Congress who's put in the time and paid the dues. But if there's anything we've learned over the last few months it's that waiting for life to be fair is a losing proposition. (By the way, we're approaching the one-month-to-go mark on the George W. Bush Out of Office Countdown calendar. The presidential quote of the week was: "Natural gas is hemispheric. I like to call it hemispheric in nature because it is a product that we can find in our neighborhoods.")
Hillary Clinton came out of First Ladyhood and Arkansas and scooped her job away from other more deserving New Yorkers. But she turned out to be terrific at it and a useful reminder that in America there are not only second chances, but thirds and fourths as well. Maybe this will become known as New York's Mid-Life Career Change Senate Seat.
If Kennedy wants to succeed Clinton, she's got every right to give it a shot. If she makes her case successfully, maybe she'll turn out to like spending her weekends at many variations on the theme of testimonial dinner, and sitting at teeny-tiny tables at the state fair. Or she might discover that she has signed up for one long limo tour of the Christmas lights. In which case, it's only a two-year ride.
Thursday, December 18, 2008
Caroline Kennedy wants Hillary Clinton's Senate seat. And New York is taking her seriously. We are talking about this matter a lot when we aren't otherwise engaged in attempting to string up rogue investment advisers.
A free U.S. Senate seat is a very fine thing, especially since Governor David Paterson does not seem to be expecting a holiday envelope from the lucky winner, unlike some governors we could mention.
However, Paterson does want someone who could come up with around $50 million for a statewide campaign in 2010, and Kennedy has been super-successful at raising money for New York City's public schools and other good causes. Although it's important to note that asking for money to buy books for poor children is not quite the same thing as asking for money to buy 60-second TV commercials about how great you are.
It is a tribute to the raging mediocrity of New York politics that while many people have expressed reservations about giving the Senate job to an untested, hitherto publicity-shy political novice, their protests often wind up with: "Why pick Caroline Kennedy when we could have - um ..."
In New York, two kinds of homegrown politicians tend to rise to the top of the heap. The smart, hard-working ones have sharp elbows and impossible egos. (I'm remembering Ed Koch on a long-ago visit to Berlin, waving at the East German guards at the checkpoint and yelling: "I'm here! It's me! It's me!") The charming, easy-going ones tend to have the IQ of a cucumber.
As Adam Nagourney and Nicholas Confessore wrote in The New York Times, Kennedy has a reputation for "quiet competence and dignity." If nothing else, that would be a novelty.
My biggest concern about the Kennedy-for-Senate boom is that the whole idea sounds as if it had been inspired by telephone conversations between Caroline and her Uncle Ted, followed by encouraging calls from her cousin Robert. We should always be leery of plans that develop during excited phone calls among family members. I remember a time when my sisters and I got extremely enthusiastic about renting a stretch limo at Christmastime and taking everybody on a tour of the holiday lights of Cincinnati. It turned out that unlike fireworks, Christmas lights work best in small doses, unless you have an unlimited appetite for viewing blowup replicas of the Nativity.
People keep asking if Kennedy has the stomach for long campaigns in upstate New York - if she is, in the words of Representative Gary Ackerman of Queens, prepared to "do Utica."
Really, that's the least of it. The people of Utica are lovely, as long as you don't have to come up with any specific ideas for resurrecting their city from its century-long swoon. And it's easy to imagine Kennedy doing a Hillary-like "listening tour," having roundtable discussions about the dairy compact or broadband access while the press corps gently naps in the rear row.
But how much of her life does she really want to spend at fund-raisers for people she suspects will be indicted before they have a chance to cash the checks? How does she feel about admiring butter sculptures at state fairs?
I remember watching Hillary tour the fair in Syracuse, New York, with her family in tow, stopping at a booth that featured a teeny table with teeny teacups and a sign: "Reserved for the Clintons." Bill and Hillary, instantly perceiving their duty, pulled up two teeny chairs and plopped right down. Chelsea, who was normally an absolute rock during these events, looked as if she wanted the earth to swallow her up.
It is admittedly not fair that a person with a famous name could get this Senate opportunity instead of some worthy if irritating member of Congress who's put in the time and paid the dues. But if there's anything we've learned over the last few months it's that waiting for life to be fair is a losing proposition. (By the way, we're approaching the one-month-to-go mark on the George W. Bush Out of Office Countdown calendar. The presidential quote of the week was: "Natural gas is hemispheric. I like to call it hemispheric in nature because it is a product that we can find in our neighborhoods.")
Hillary Clinton came out of First Ladyhood and Arkansas and scooped her job away from other more deserving New Yorkers. But she turned out to be terrific at it and a useful reminder that in America there are not only second chances, but thirds and fourths as well. Maybe this will become known as New York's Mid-Life Career Change Senate Seat.
If Kennedy wants to succeed Clinton, she's got every right to give it a shot. If she makes her case successfully, maybe she'll turn out to like spending her weekends at many variations on the theme of testimonial dinner, and sitting at teeny-tiny tables at the state fair. Or she might discover that she has signed up for one long limo tour of the Christmas lights. In which case, it's only a two-year ride.
*******************
Request to remove Blagojevich denied
By Monica Davey and Catrin Einhorn
Thursday, December 18, 2008
SPRINGFIELD, Illinois: Any prospect that the saga over Governor Rod Blagojevich's contested hold on power might end swiftly evaporated on Wednesday when the State Supreme Court refused to hear a request to remove him, and Blagojevich's lawyer made it clear at an impeachment inquiry here that the governor had no intention of going quietly.
Without comment, the court denied an emergency request from Lisa Madigan, the state's attorney general, to consider removing Blagojevich from office as well as a motion for a temporary restraining order that would have immediately stripped Blagojevich of many of his powers, including the authority to appoint someone to fill the United States Senate seat vacated by President-elect Barack Obama.
The ruling stirred consternation among some lawmakers here, many of whom had seen the request to the court as the fastest, straightest route to Blagojevich's departure, even if a bit of a long shot.
The court's decision drew new questions about how and when the Senate seat might now be filled, as Republican lawmakers called, once again, for a special election. It also increased pressure on the House committee here that is trying to conduct an impeachment investigation — with impeachment now apparently the only alternative left, short of Blagojevich stepping down.
Blagojevich, a two-term Democrat who was arrested last week on federal charges of conspiracy and soliciting bribes and accused, among other things, of trying to sell the Senate seat, did not appear before the impeachment inquiry committee.
But his team of lawyers, including Edward Genson, a fiery criminal defense lawyer well-known in Illinois after more than four decades in Chicago courtrooms, made its first appearance here, describing the lawmakers' efforts as a "real witch hunt" and offering a series of pointed objections about the state's vague standards for impeachment, the lawmakers' use of the federal criminal complaint against the governor as evidence in their inquiry, and at least three lawmakers he said could not be fair.
"This is Alice in Wonderland," Genson announced at one point, in a series of contentious, snippy exchanges in the public hearings at the Capitol. "I think it's unfair to put in hearsay," he said at another point, referring to the 78-page criminal complaint against Blagojevich, which lawmakers heard read aloud much of the day. "I think it's unfair to put in anonymous people. I think it's unfair to deprive him of confrontation. I think it's unfair to do all those things."
The day's events seemed to mark the first upbeat developments for Blagojevich in what has been an avalanche of accusations and criticisms against him for more than a week. It was enough, it seemed, that a lighthearted Blagojevich, who had until now been avoiding reporters and the public, invited a Chicago Tribune photographer to join him on his jog (offering his commentary on the head-clearing benefits of running), and suggested that he will soon tell his story — as early, Genson said, as Friday. Already, Genson provided one insight into Blagojevich's thinking: the governor will not now, he said, try to appoint someone to fill Obama's Senate seat. "Harry Reid said they're not going to accept anybody he picks," Genson said of Blagojevich. "Why would he do that?"
Lawmakers seemed unfazed by all of Genson's critiques of the impeachment process and said they would move forward.
"The governor's lawyer did a pretty good job of throwing up dust, but I don't know that he did a good enough job to make either the members of the committee, nor the people of Illinois watching him on their television screens, decide that the governor is as innocent as a newborn lamb," Representative Barbara Flynn Currie, the chairwoman of the impeachment committee, said after the hearing ended for the day. "The standards that govern what we are about are very different from those that govern in a criminal trial."
Genson, who is also serving as Blagojevich's lawyer in his criminal case, has asked the state to pay for his work on the impeachment case. Genson filed a request with Madigan, arguing that the attorney general would, under normal circumstances, represent him on official business.
Because Madigan, also seen as a political rival of Blagojevich, a fellow Democrat, sought to remove him in the State Supreme Court, Genson argued that she had a conflict and could not represent him before the impeachment committee. He said she was now obligated to appoint others — Genson and two other lawyers, Genson suggested — to carry out that duty.
Madigan, her office said, has yet to respond.
Last week, Madigan had argued in a complaint filed with the court that "the pervasive nature and severity" of the federal corruption case against Blagojevich had rendered him "incapable of legitimately exercising his ability as governor."
On Wednesday, she said she was disappointed that the court had rejected her argument, and said the state found itself in an "unsustainable situation." Like many here, Madigan said she was now hopeful that lawmakers would move "with deliberate speed" in the impeachment inquiry that began on Tuesday and is expected to run through weekends until it is done — days or weeks from now.
Lawmakers here acknowledged that they were still sorting through the parameters of such an inquiry, barely tested in Illinois and never completed in the case of a governor.
They have yet to work out potential conflicts with federal prosecutors in Chicago, though conversations were continuing, Currie told reporters. "I think they would be a little fearful if we had full access to their whole range of witnesses, that Genson would basically run this as his criminal trial before he gets to the real one," she said.
Genson said the evidence he had seen in the hearing in a single day — including the reading of snippets of prosecutors' recorded conversations in which Blagojevich, the prosecutors say, seems to demand a high-paying job, donations and a cabinet post in exchange for the Senate seat — was insufficient.
"The fact of the matter is, what we have seen so far isn't something that should be used as evidence in a courtroom, in a hearing, in a committee meeting," Genson said. "It's just not right."
By Monica Davey and Catrin Einhorn
Thursday, December 18, 2008
SPRINGFIELD, Illinois: Any prospect that the saga over Governor Rod Blagojevich's contested hold on power might end swiftly evaporated on Wednesday when the State Supreme Court refused to hear a request to remove him, and Blagojevich's lawyer made it clear at an impeachment inquiry here that the governor had no intention of going quietly.
Without comment, the court denied an emergency request from Lisa Madigan, the state's attorney general, to consider removing Blagojevich from office as well as a motion for a temporary restraining order that would have immediately stripped Blagojevich of many of his powers, including the authority to appoint someone to fill the United States Senate seat vacated by President-elect Barack Obama.
The ruling stirred consternation among some lawmakers here, many of whom had seen the request to the court as the fastest, straightest route to Blagojevich's departure, even if a bit of a long shot.
The court's decision drew new questions about how and when the Senate seat might now be filled, as Republican lawmakers called, once again, for a special election. It also increased pressure on the House committee here that is trying to conduct an impeachment investigation — with impeachment now apparently the only alternative left, short of Blagojevich stepping down.
Blagojevich, a two-term Democrat who was arrested last week on federal charges of conspiracy and soliciting bribes and accused, among other things, of trying to sell the Senate seat, did not appear before the impeachment inquiry committee.
But his team of lawyers, including Edward Genson, a fiery criminal defense lawyer well-known in Illinois after more than four decades in Chicago courtrooms, made its first appearance here, describing the lawmakers' efforts as a "real witch hunt" and offering a series of pointed objections about the state's vague standards for impeachment, the lawmakers' use of the federal criminal complaint against the governor as evidence in their inquiry, and at least three lawmakers he said could not be fair.
"This is Alice in Wonderland," Genson announced at one point, in a series of contentious, snippy exchanges in the public hearings at the Capitol. "I think it's unfair to put in hearsay," he said at another point, referring to the 78-page criminal complaint against Blagojevich, which lawmakers heard read aloud much of the day. "I think it's unfair to put in anonymous people. I think it's unfair to deprive him of confrontation. I think it's unfair to do all those things."
The day's events seemed to mark the first upbeat developments for Blagojevich in what has been an avalanche of accusations and criticisms against him for more than a week. It was enough, it seemed, that a lighthearted Blagojevich, who had until now been avoiding reporters and the public, invited a Chicago Tribune photographer to join him on his jog (offering his commentary on the head-clearing benefits of running), and suggested that he will soon tell his story — as early, Genson said, as Friday. Already, Genson provided one insight into Blagojevich's thinking: the governor will not now, he said, try to appoint someone to fill Obama's Senate seat. "Harry Reid said they're not going to accept anybody he picks," Genson said of Blagojevich. "Why would he do that?"
Lawmakers seemed unfazed by all of Genson's critiques of the impeachment process and said they would move forward.
"The governor's lawyer did a pretty good job of throwing up dust, but I don't know that he did a good enough job to make either the members of the committee, nor the people of Illinois watching him on their television screens, decide that the governor is as innocent as a newborn lamb," Representative Barbara Flynn Currie, the chairwoman of the impeachment committee, said after the hearing ended for the day. "The standards that govern what we are about are very different from those that govern in a criminal trial."
Genson, who is also serving as Blagojevich's lawyer in his criminal case, has asked the state to pay for his work on the impeachment case. Genson filed a request with Madigan, arguing that the attorney general would, under normal circumstances, represent him on official business.
Because Madigan, also seen as a political rival of Blagojevich, a fellow Democrat, sought to remove him in the State Supreme Court, Genson argued that she had a conflict and could not represent him before the impeachment committee. He said she was now obligated to appoint others — Genson and two other lawyers, Genson suggested — to carry out that duty.
Madigan, her office said, has yet to respond.
Last week, Madigan had argued in a complaint filed with the court that "the pervasive nature and severity" of the federal corruption case against Blagojevich had rendered him "incapable of legitimately exercising his ability as governor."
On Wednesday, she said she was disappointed that the court had rejected her argument, and said the state found itself in an "unsustainable situation." Like many here, Madigan said she was now hopeful that lawmakers would move "with deliberate speed" in the impeachment inquiry that began on Tuesday and is expected to run through weekends until it is done — days or weeks from now.
Lawmakers here acknowledged that they were still sorting through the parameters of such an inquiry, barely tested in Illinois and never completed in the case of a governor.
They have yet to work out potential conflicts with federal prosecutors in Chicago, though conversations were continuing, Currie told reporters. "I think they would be a little fearful if we had full access to their whole range of witnesses, that Genson would basically run this as his criminal trial before he gets to the real one," she said.
Genson said the evidence he had seen in the hearing in a single day — including the reading of snippets of prosecutors' recorded conversations in which Blagojevich, the prosecutors say, seems to demand a high-paying job, donations and a cabinet post in exchange for the Senate seat — was insufficient.
"The fact of the matter is, what we have seen so far isn't something that should be used as evidence in a courtroom, in a hearing, in a committee meeting," Genson said. "It's just not right."
*******************
Obama picks experienced hands for financial posts
By Sharon Otterman
Thursday, December 18, 2008
Pledging to create "a 21st century regulatory framework" to protect against future financial crises, President-elect Barack Obama on Thursday nominated three veteran financial regulators to top economic positions in his administration.
"We will crack down on this culture of greed and scheming that has led us to this day of reckoning," Obama said in announcing the appointments at a news conference in Chicago. "We have been asleep at the switch."
Obama named Mary Schapiro, 53, to head the Securities and Exchange Commission, which has come under sharp criticism for its failure to detect signs that major Wall Street banks were in trouble before the financial crisis, as well as lax oversight of the New York financier Bernard Madoff, who the authorities say has confessed to running a $50 billion Ponzi scheme.
The Madoff scandal, Obama said, "reminds us yet again how badly reform is needed when it comes to regulations that govern our markets."
Schapiro has headed the Financial Services Regulatory Authority, Wall Street's self-regulator, since 1996.
Schapiro has also served as a commissioner of the Securities and Exchange Commission in Republican and Democratic administrations alike.
Obama also announced the selection of two former Clinton administration economic officials, Gary Gensler and Daniel Tarullo, to leading economic posts. Gensler, who will head the Commodity Futures Trading Commission, was a Treasury official in the Clinton administration. He also worked as a senior adviser to former Senator Paul Sarbanes, a Maryland Democrat, who wrote the legislation to increase oversight of the accounting industry and reform corporate governance.
Tarullo, a law professor at Georgetown University and who was also an economic adviser to President Clinton, will fill an open seat on the Federal Reserve board in Washington. He is leading Obama's transition team at the Treasury Department, and is considered an expert in international economic regulation.
In announcing the appointments, Obama was harshly critical of the "disdain for regulation" shown by regulatory agencies in recent years and said the country needed "regulatory agencies ready and willing to enforce the law."
He pledged to remake the financial regulatory system to adapt to the challenges of a new century. "We will be releasing a very detailed plan on how that regulatory upgrade will take place," he said.
Obama also called for a shift in ethics on Wall Street. "We can have the best regulators in the world, but everyone is going to have to ask themselves, not only is this profitable, not only will it lead to a big bonus, but is it right?" he said. "Does it conform to higher standards in terms of how we operate?"
In addition to serving at the SEC, Schapiro was chairwoman of the Commodities Futures Trading Commission during the Clinton administration, an independent agency created by Congress to regulate trading in commodity futures and the option markets. Her service at both agencies could suggest that Obama is considering combining the two regulators, a structure long supported by many experts to streamline market oversight.
Shapiro, who would be the first woman nominated to head the SEC for a full term, said that the current crisis on Wall Street "requires an aggressive, systemic response" to restore trust and protect investors. She pledged forceful enforcement of current law and "thoughtful reform of our regulatory structures" would be her top priority.
The selection of Tarullo to fill one of two vacant seats on the Fed's board, which is also subject to approval by the Senate, will allow Obama to begin making his mark on the nation's bank.
By Sharon Otterman
Thursday, December 18, 2008
Pledging to create "a 21st century regulatory framework" to protect against future financial crises, President-elect Barack Obama on Thursday nominated three veteran financial regulators to top economic positions in his administration.
"We will crack down on this culture of greed and scheming that has led us to this day of reckoning," Obama said in announcing the appointments at a news conference in Chicago. "We have been asleep at the switch."
Obama named Mary Schapiro, 53, to head the Securities and Exchange Commission, which has come under sharp criticism for its failure to detect signs that major Wall Street banks were in trouble before the financial crisis, as well as lax oversight of the New York financier Bernard Madoff, who the authorities say has confessed to running a $50 billion Ponzi scheme.
The Madoff scandal, Obama said, "reminds us yet again how badly reform is needed when it comes to regulations that govern our markets."
Schapiro has headed the Financial Services Regulatory Authority, Wall Street's self-regulator, since 1996.
Schapiro has also served as a commissioner of the Securities and Exchange Commission in Republican and Democratic administrations alike.
Obama also announced the selection of two former Clinton administration economic officials, Gary Gensler and Daniel Tarullo, to leading economic posts. Gensler, who will head the Commodity Futures Trading Commission, was a Treasury official in the Clinton administration. He also worked as a senior adviser to former Senator Paul Sarbanes, a Maryland Democrat, who wrote the legislation to increase oversight of the accounting industry and reform corporate governance.
Tarullo, a law professor at Georgetown University and who was also an economic adviser to President Clinton, will fill an open seat on the Federal Reserve board in Washington. He is leading Obama's transition team at the Treasury Department, and is considered an expert in international economic regulation.
In announcing the appointments, Obama was harshly critical of the "disdain for regulation" shown by regulatory agencies in recent years and said the country needed "regulatory agencies ready and willing to enforce the law."
He pledged to remake the financial regulatory system to adapt to the challenges of a new century. "We will be releasing a very detailed plan on how that regulatory upgrade will take place," he said.
Obama also called for a shift in ethics on Wall Street. "We can have the best regulators in the world, but everyone is going to have to ask themselves, not only is this profitable, not only will it lead to a big bonus, but is it right?" he said. "Does it conform to higher standards in terms of how we operate?"
In addition to serving at the SEC, Schapiro was chairwoman of the Commodities Futures Trading Commission during the Clinton administration, an independent agency created by Congress to regulate trading in commodity futures and the option markets. Her service at both agencies could suggest that Obama is considering combining the two regulators, a structure long supported by many experts to streamline market oversight.
Shapiro, who would be the first woman nominated to head the SEC for a full term, said that the current crisis on Wall Street "requires an aggressive, systemic response" to restore trust and protect investors. She pledged forceful enforcement of current law and "thoughtful reform of our regulatory structures" would be her top priority.
The selection of Tarullo to fill one of two vacant seats on the Fed's board, which is also subject to approval by the Senate, will allow Obama to begin making his mark on the nation's bank.
********************
COLUMNIST: Flloyd Norris
The year the financial system stopped working
Thursday, December 18, 2008
NEW YORK: Long-term interest rates are at their lowest levels in half a century. Long-term interest rates are at their highest levels in nearly 20 years.
This is shaping up as the worst year in seven decades for the stock market. Of the 10 best days the stock market experienced during those 70 years, six came in 2008.
A Wall Street legend who became a hero for forcing Wall Street to treat investors better now admits to defrauding a later generation of investors of $50 billion. A prominent lawyer is said to have embezzled hundreds of millions by selling phony securities to hedge funds.
The economists are worried about deflation. They are also fearful of inflation.
The U.S. government is lending money to businesses that never could have borrowed from it before. People fear a wave of corporate bankruptcies as companies find they cannot borrow money to repay loans that are due.
This was the year the financial system stopped working. Nearly all the contradictory but accurate statements above can be traced to that fact.
In 2007, the people who ran Wall Street, and the ones who regulated it, did not understand how serious the financial crisis was becoming. They saw the primary problem as one of a housing slowdown caused by a subprime mortgage crisis, and assumed the securitization machine - which had come to finance everything from corporate loans to credit cards to student loans - would keep on ticking even if its mortgage factory could keep operating only with the government guaranteeing almost everything.
In 2008, Washington effectively nationalized Fannie Mae, Freddie Mac and American International Group, and it bailed out those who had lent to Bear Stearns. It let Lehman Brothers fail, briefly reassuring market ideologues but terrifying many market participants, and the rout was on.
The securitization machine ground to a halt, and the banking industry was in no position to assume its historical role as a lender that patiently waited for loans to be repaid. To the contrary, banks trusted neither their own balance sheets nor those of other banks. For a significant part of the economy, the government became the lender of first and only resort.
For most of 2008, the Federal Reserve and the U.S. Treasury failed to realize that the banking system faced a solvency crisis rather than a liquidity crisis. Efforts to provide liquidity proved ineffectual because no one had confidence in the values of enormous amounts of derivatives and securitizations that the banks owned.
"No financial market can function normally when basic information about the solvency of market participants is lacking," wrote Michael Bordo, an economist who teaches at Rutgers University.
A year ago, China and India were supposed to be the engines that kept the world economy moving forward even if the United States was applying the brakes. Now people worry that rising unemployment could lead to political instability in the Asian giants.
A year ago, most economists - including the people setting Fed policy - thought the U.S. economy could avoid a recession. Now they have concluded that one was already starting as 2007 ended, and the optimists think it will last for six more months.
With commodity prices collapsing, and consumers feeling poor and expecting jobs to vanish, the inflation rate went from alarming to negative and the Fed cut the short-term rate it controls almost to zero.
The rate on 10-year Treasury notes fell to a little over 2 percent, something not seen since Dwight Eisenhower was in the White House. An index of junk-bond yields soared to more than 17 percent, just a little below the record level set during 1990, the last time the banking system appeared to be ready to collapse. Money is cheap for the government and unavailable to those who need it most.
The multiple ways being used by the Fed and the Treasury to push out cash mean the government will end up with a lot of assets of questionable value. That amounts to printing money, and economists worry that if the Fed is unwilling or unable to tighten when things turn up, that could lead to rampant inflation.
There could be a significant political constituency for inflation by then; if the problem is that your house is not worth what you owe on it, a good dose of inflation could produce a solution by raising the nominal value while not changing the amount you owe.
In normal times, after a recession has ended and inflationary pressures are building, the Fed tightens by selling Treasury bills for cash, a process that sucks cash out of the economy.
After this recession, its balance sheet may be heavy with mortgage securities and perhaps even corporate debt, and the Fed may have to sell them, rather than nice, safe T-bills, to tighten credit. That could work out fine if economic recovery has by then made those mortgage securities appear to be safe and reliable. That is one bet the Fed is making by taking on assets it never would have considered in the past.
It is in booms that the seeds of busts are created, and the heroes of one era can be the villains of the next. The securitization machine that is so vilified today played a major role in greasing the boom that preceded it.
That can even be true of people. One reason for the development of the great bull markets of the 1980s and 1990s was the freeing of investors from high fixed trading costs. To many - a group that included some regulators - much of the credit for that went to a feisty trader who found ways to maneuver around the system and let investors and speculators trade for less. His name was Bernard Madoff.
Four decades after he started that fight, which made him rich as his firm became the largest player in the Nasdaq stock market, Madoff admitted that his later success as a money manager was all a fraud. He estimated the losses in his Ponzi scheme at $50 billion.
The disclosure of that fraud came on the heels of the arrest of Marc Dreier, a well-known New York corporate lawyer who had gotten hedge funds to lend many millions to real companies that they believed to be Dreier's clients. The cash actually went to him.
The falls of both men may be due in part to the sudden need for hedge funds to come up with cash to pay nervous investors. It is during bear markets that the follies of the previous bull markets become starkly apparent.
This is my last column of 2008, as I head off to vacation. Given how badly the forecasts for 2008 worked out, it would seem to be foolhardy to offer any for 2009. But one seems clear to me: One of the most important tasks for Barack Obama's new economic team is to put together a financial system that will be able to grant credit and pay for investments when the recession nears an end.
If the team fails to accomplish that, and is unable to couple it with a regulatory system that will neither smother innovation nor let it run wild, then the commentaries a year from now will be even more downcast than those appearing as this year draws to its sad conclusion.
Thursday, December 18, 2008
NEW YORK: Long-term interest rates are at their lowest levels in half a century. Long-term interest rates are at their highest levels in nearly 20 years.
This is shaping up as the worst year in seven decades for the stock market. Of the 10 best days the stock market experienced during those 70 years, six came in 2008.
A Wall Street legend who became a hero for forcing Wall Street to treat investors better now admits to defrauding a later generation of investors of $50 billion. A prominent lawyer is said to have embezzled hundreds of millions by selling phony securities to hedge funds.
The economists are worried about deflation. They are also fearful of inflation.
The U.S. government is lending money to businesses that never could have borrowed from it before. People fear a wave of corporate bankruptcies as companies find they cannot borrow money to repay loans that are due.
This was the year the financial system stopped working. Nearly all the contradictory but accurate statements above can be traced to that fact.
In 2007, the people who ran Wall Street, and the ones who regulated it, did not understand how serious the financial crisis was becoming. They saw the primary problem as one of a housing slowdown caused by a subprime mortgage crisis, and assumed the securitization machine - which had come to finance everything from corporate loans to credit cards to student loans - would keep on ticking even if its mortgage factory could keep operating only with the government guaranteeing almost everything.
In 2008, Washington effectively nationalized Fannie Mae, Freddie Mac and American International Group, and it bailed out those who had lent to Bear Stearns. It let Lehman Brothers fail, briefly reassuring market ideologues but terrifying many market participants, and the rout was on.
The securitization machine ground to a halt, and the banking industry was in no position to assume its historical role as a lender that patiently waited for loans to be repaid. To the contrary, banks trusted neither their own balance sheets nor those of other banks. For a significant part of the economy, the government became the lender of first and only resort.
For most of 2008, the Federal Reserve and the U.S. Treasury failed to realize that the banking system faced a solvency crisis rather than a liquidity crisis. Efforts to provide liquidity proved ineffectual because no one had confidence in the values of enormous amounts of derivatives and securitizations that the banks owned.
"No financial market can function normally when basic information about the solvency of market participants is lacking," wrote Michael Bordo, an economist who teaches at Rutgers University.
A year ago, China and India were supposed to be the engines that kept the world economy moving forward even if the United States was applying the brakes. Now people worry that rising unemployment could lead to political instability in the Asian giants.
A year ago, most economists - including the people setting Fed policy - thought the U.S. economy could avoid a recession. Now they have concluded that one was already starting as 2007 ended, and the optimists think it will last for six more months.
With commodity prices collapsing, and consumers feeling poor and expecting jobs to vanish, the inflation rate went from alarming to negative and the Fed cut the short-term rate it controls almost to zero.
The rate on 10-year Treasury notes fell to a little over 2 percent, something not seen since Dwight Eisenhower was in the White House. An index of junk-bond yields soared to more than 17 percent, just a little below the record level set during 1990, the last time the banking system appeared to be ready to collapse. Money is cheap for the government and unavailable to those who need it most.
The multiple ways being used by the Fed and the Treasury to push out cash mean the government will end up with a lot of assets of questionable value. That amounts to printing money, and economists worry that if the Fed is unwilling or unable to tighten when things turn up, that could lead to rampant inflation.
There could be a significant political constituency for inflation by then; if the problem is that your house is not worth what you owe on it, a good dose of inflation could produce a solution by raising the nominal value while not changing the amount you owe.
In normal times, after a recession has ended and inflationary pressures are building, the Fed tightens by selling Treasury bills for cash, a process that sucks cash out of the economy.
After this recession, its balance sheet may be heavy with mortgage securities and perhaps even corporate debt, and the Fed may have to sell them, rather than nice, safe T-bills, to tighten credit. That could work out fine if economic recovery has by then made those mortgage securities appear to be safe and reliable. That is one bet the Fed is making by taking on assets it never would have considered in the past.
It is in booms that the seeds of busts are created, and the heroes of one era can be the villains of the next. The securitization machine that is so vilified today played a major role in greasing the boom that preceded it.
That can even be true of people. One reason for the development of the great bull markets of the 1980s and 1990s was the freeing of investors from high fixed trading costs. To many - a group that included some regulators - much of the credit for that went to a feisty trader who found ways to maneuver around the system and let investors and speculators trade for less. His name was Bernard Madoff.
Four decades after he started that fight, which made him rich as his firm became the largest player in the Nasdaq stock market, Madoff admitted that his later success as a money manager was all a fraud. He estimated the losses in his Ponzi scheme at $50 billion.
The disclosure of that fraud came on the heels of the arrest of Marc Dreier, a well-known New York corporate lawyer who had gotten hedge funds to lend many millions to real companies that they believed to be Dreier's clients. The cash actually went to him.
The falls of both men may be due in part to the sudden need for hedge funds to come up with cash to pay nervous investors. It is during bear markets that the follies of the previous bull markets become starkly apparent.
This is my last column of 2008, as I head off to vacation. Given how badly the forecasts for 2008 worked out, it would seem to be foolhardy to offer any for 2009. But one seems clear to me: One of the most important tasks for Barack Obama's new economic team is to put together a financial system that will be able to grant credit and pay for investments when the recession nears an end.
If the team fails to accomplish that, and is unable to couple it with a regulatory system that will neither smother innovation nor let it run wild, then the commentaries a year from now will be even more downcast than those appearing as this year draws to its sad conclusion.
*********************
Parmalat founder sentenced to 10 years in prison
Reuters
Thursday, December 18, 2008
MILAN: Calisto Tanzi, the founder of the Italian dairy company Parmalat, was sentenced on Thursday to 10 years in prison, judges said.
Tanzi was convicted of market-rigging in a trial over the company's collapse in 2003, while all other defendants were acquitted, the judges said.
Tanzi, who was also the company's chief executive, was among eight former executives and bankers, including some former employees of Bank of America, on trial in Milan over charges of market-rigging or obstructing market oversight.
Italian prosecutors had sought a 13-year prison term for Tanzi. The trial, one of several seeking to assign blame in the collapse of the company, was the first to be concluded.
Parmalat's collapse was one of Europe's biggest financial scandals, and Tanzi was described by a prosecutor as the "hub, who covered up for everyone."
Prosecutors sought sentences ranging from three years and six months to six years for the other defendants.
Parmalat buckled under a debt of €14 billion, or $20 billion, about eight times what it had reported. The company's failure wiped out the savings of more than 100,000 small investors. More than 40,000 bondholders are seeking compensation.
Prosecutors have said the defendants misled markets by masking Parmalat's dire finances.
Eight others accused in the case settled out of court in September.
Parmalat was restructured and relisted on the Milan stock exchange in 2005.
It is the biggest publicly listed food company in Italy. It has recouped money from banks in settlements.
Reuters
Thursday, December 18, 2008
MILAN: Calisto Tanzi, the founder of the Italian dairy company Parmalat, was sentenced on Thursday to 10 years in prison, judges said.
Tanzi was convicted of market-rigging in a trial over the company's collapse in 2003, while all other defendants were acquitted, the judges said.
Tanzi, who was also the company's chief executive, was among eight former executives and bankers, including some former employees of Bank of America, on trial in Milan over charges of market-rigging or obstructing market oversight.
Italian prosecutors had sought a 13-year prison term for Tanzi. The trial, one of several seeking to assign blame in the collapse of the company, was the first to be concluded.
Parmalat's collapse was one of Europe's biggest financial scandals, and Tanzi was described by a prosecutor as the "hub, who covered up for everyone."
Prosecutors sought sentences ranging from three years and six months to six years for the other defendants.
Parmalat buckled under a debt of €14 billion, or $20 billion, about eight times what it had reported. The company's failure wiped out the savings of more than 100,000 small investors. More than 40,000 bondholders are seeking compensation.
Prosecutors have said the defendants misled markets by masking Parmalat's dire finances.
Eight others accused in the case settled out of court in September.
Parmalat was restructured and relisted on the Milan stock exchange in 2005.
It is the biggest publicly listed food company in Italy. It has recouped money from banks in settlements.
******************************
University of California begins Enron payments
Reuters
Thursday, December 18, 2008
NEW YORK: The University of California on Thursday said it has begun distributing almost $5 billion (3.3 billion pounds) of the $7 billion recovered from the record Enron class action settlement to about 200,000 investors, seven years after the fraudulent energy firm collapsed into bankruptcy.
The university -- lead plaintiff for Enron investors against the company's accountants, lawyers, bankers and senior executives -- said the largest settlement in securities class-action history will be distributed in stages.
The settlement covers numerous securities types and was calculated based on an allocation plan approved in September by U.S. District Court in Houston.
Payments will be made to eligible investors who bought Enron or Enron-related securities between September 9, 1997 and December 2, 2001, when the company filed for bankruptcy.
This initial distribution is a partial payment to most eligible claimants, though follow-on payments will be paid at a date still to be determined. Enron common-stock purchasers will receive reimbursement of about 20 percent of their allowed loss -- or $22 million to University of California (UC) pension and endowment funds.
The university also said litigation continues against several defendants in the federal class action lawsuit, including Barclays , Credit Suisse and Merrill Lynch .
Claims are also pending against three former Enron officers -- Chief Executive Jeff Skilling, chief accounting officer Richard Causey and Mark Koenig, head of investor relations -- the university said in a statement.
Cases against Royal Bank of Canada , Royal Bank of Scotland and Toronto Dominion Bank have not been set for trial, UC said.
(Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)
Reuters
Thursday, December 18, 2008
NEW YORK: The University of California on Thursday said it has begun distributing almost $5 billion (3.3 billion pounds) of the $7 billion recovered from the record Enron class action settlement to about 200,000 investors, seven years after the fraudulent energy firm collapsed into bankruptcy.
The university -- lead plaintiff for Enron investors against the company's accountants, lawyers, bankers and senior executives -- said the largest settlement in securities class-action history will be distributed in stages.
The settlement covers numerous securities types and was calculated based on an allocation plan approved in September by U.S. District Court in Houston.
Payments will be made to eligible investors who bought Enron or Enron-related securities between September 9, 1997 and December 2, 2001, when the company filed for bankruptcy.
This initial distribution is a partial payment to most eligible claimants, though follow-on payments will be paid at a date still to be determined. Enron common-stock purchasers will receive reimbursement of about 20 percent of their allowed loss -- or $22 million to University of California (UC) pension and endowment funds.
The university also said litigation continues against several defendants in the federal class action lawsuit, including Barclays , Credit Suisse and Merrill Lynch .
Claims are also pending against three former Enron officers -- Chief Executive Jeff Skilling, chief accounting officer Richard Causey and Mark Koenig, head of investor relations -- the university said in a statement.
Cases against Royal Bank of Canada , Royal Bank of Scotland and Toronto Dominion Bank have not been set for trial, UC said.
(Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)
*******************************
Barroso tells Bulgaria to speed up reform
Reuters
Thursday, December 18, 2008
BRUSSELS: The president of the European Commission called on Bulgaria on Thursday to speed up reforms, particularly in the area of the judiciary, after it was stripped of EU funds last month for failing to deal with fraud.
"The reform process must speed up rather than slow down," José Manuel Barroso said at a news conference with Prime Minister Sergei Stanishev of Bulgaria.
"We need a consensus in Bulgaria that treats the fight against high-level corruption and organized crime as issues of national importance."
Brussels stripped Sofia of €220 million, about $285 million, of EU financing and said it could lose an additional €340 million if it failed to curb corrupt practices and political interference in the budget process by the end of 2009.
Barroso said the commission would issue a technical report on Bulgaria's progress in February and a more comprehensive assessment in the summer, but added: "We don't see yet the level of results we would like to see."
Stanishev said the government would do all it could to address the deficiencies and argued that its efforts so far "should be assessed fairly."
Bulgaria has opened several investigations into government officials and businessmen who are suspected of fraud. But it has jailed only one crime boss and has failed to convict a single senior official of graft.
Analysts said Bulgaria may lose more EU cash because deeper reforms are unlikely under today's government, which has struggled to cut links between some officials and organized crime gangs.
Bulgaria's opposition has demanded early elections because of the government's failure to fight rampant graft and stop fraud with EU aid.
But that move is unlikely to topple the government, which has a large majority in Parliament.
It does, however, underline the challenges the coalition parties will face in an election next year.
Parliament, meanwhile, added to the glum Christmas spirit.
A decision by Bulgarian lawmakers to pay themselves a total of more than $500,000 in Christmas bonuses - during an economic slowdown and job losses - drew heavy criticism Thursday and even calls from a variety of groups to besiege Parliament.
Several environmental and nongovernment groups called for mass protests Friday to blockade the 240-seat Parliament building in central Sofia to demonstrate against graft, crime and the bonuses.
"We've had enough," the environmental group For the Nature said in a statement. "We want a state without corruption, lawlessness and damage of natural, human and intellectual resources.
"Meanwhile, the parliamentarians voted to receive Christmas bonuses at a time of a financial crisis."
Many companies and organizations in the country have decided to cut end-year bonuses and thousands in the mining and chemical sectors have lost their jobs due the global downturn.
The deputies voted Wednesday to receive 690,000 levs, more than $507,000, in bonuses.
The subject of parliamentary and ministerial salaries touches a raw nerve in Bulgaria - the poorest member of the European Union, where the average salary is 600 to 700 levs a month.
Student groups have also called for rallies on Friday, and police officers and farmers have threatened to hold nation-wide protests over low subsidies and pay.
Reuters
Thursday, December 18, 2008
BRUSSELS: The president of the European Commission called on Bulgaria on Thursday to speed up reforms, particularly in the area of the judiciary, after it was stripped of EU funds last month for failing to deal with fraud.
"The reform process must speed up rather than slow down," José Manuel Barroso said at a news conference with Prime Minister Sergei Stanishev of Bulgaria.
"We need a consensus in Bulgaria that treats the fight against high-level corruption and organized crime as issues of national importance."
Brussels stripped Sofia of €220 million, about $285 million, of EU financing and said it could lose an additional €340 million if it failed to curb corrupt practices and political interference in the budget process by the end of 2009.
Barroso said the commission would issue a technical report on Bulgaria's progress in February and a more comprehensive assessment in the summer, but added: "We don't see yet the level of results we would like to see."
Stanishev said the government would do all it could to address the deficiencies and argued that its efforts so far "should be assessed fairly."
Bulgaria has opened several investigations into government officials and businessmen who are suspected of fraud. But it has jailed only one crime boss and has failed to convict a single senior official of graft.
Analysts said Bulgaria may lose more EU cash because deeper reforms are unlikely under today's government, which has struggled to cut links between some officials and organized crime gangs.
Bulgaria's opposition has demanded early elections because of the government's failure to fight rampant graft and stop fraud with EU aid.
But that move is unlikely to topple the government, which has a large majority in Parliament.
It does, however, underline the challenges the coalition parties will face in an election next year.
Parliament, meanwhile, added to the glum Christmas spirit.
A decision by Bulgarian lawmakers to pay themselves a total of more than $500,000 in Christmas bonuses - during an economic slowdown and job losses - drew heavy criticism Thursday and even calls from a variety of groups to besiege Parliament.
Several environmental and nongovernment groups called for mass protests Friday to blockade the 240-seat Parliament building in central Sofia to demonstrate against graft, crime and the bonuses.
"We've had enough," the environmental group For the Nature said in a statement. "We want a state without corruption, lawlessness and damage of natural, human and intellectual resources.
"Meanwhile, the parliamentarians voted to receive Christmas bonuses at a time of a financial crisis."
Many companies and organizations in the country have decided to cut end-year bonuses and thousands in the mining and chemical sectors have lost their jobs due the global downturn.
The deputies voted Wednesday to receive 690,000 levs, more than $507,000, in bonuses.
The subject of parliamentary and ministerial salaries touches a raw nerve in Bulgaria - the poorest member of the European Union, where the average salary is 600 to 700 levs a month.
Student groups have also called for rallies on Friday, and police officers and farmers have threatened to hold nation-wide protests over low subsidies and pay.
*********************
On Wall Street, bonuses, not profits, were real
By Louise Story
Thursday, December 18, 2008
"As a result of the extraordinary growth at Merrill during my tenure as CEO, the board saw fit to increase my compensation each year."
— E. Stanley O'Neal, the former chief executive of Merrill Lynch, March 2008
For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million.
The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill's mortgage business.
Kim's colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.
But Merrill's record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value.
Unlike the earnings, however, the bonuses have not been reversed.
As regulators and shareholders sift through the rubble of the financial crisis, questions are being asked about what role lavish bonuses played in the debacle. Scrutiny over pay is intensifying as banks like Merrill prepare to dole out bonuses even after they have had to be propped up with billions of dollars of taxpayers' money. While bonuses are expected to be half of what they were a year ago, some bankers could still collect millions of dollars.
Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street's pay structure, in which bonuses are based on short-term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning.
"Compensation was flawed top to bottom," said Lucian Bebchuk, a professor at Harvard Law School and an expert on compensation. "The whole organization was responding to distorted incentives."
Even Wall Streeters concede they were dazzled by the money. To earn bigger bonuses, many traders ignored or played down the risks they took until their bonuses were paid. Their bosses often turned a blind eye because it was in their interest as well.
"That's a call that senior management or risk management should question, but of course their pay was tied to it too," said Brian Lin, a former mortgage trader at Merrill Lynch.
The highest-ranking executives at four firms have agreed under pressure to go without their bonuses, including John Thain, who initially wanted a bonus this year since he joined Merrill Lynch as chief executive after its ill-fated mortgage bets were made. And four former executives at one hard-hit bank, UBS of Switzerland, recently volunteered to return some of the bonuses they were paid before the financial crisis. But few think others on Wall Street will follow that lead.
For now, most banks are looking forward rather than backward. Morgan Stanley and UBS are attaching new strings to bonuses, allowing them to pull back part of workers' payouts if they turn out to have been based on illusory profits. Those policies, had they been in place in recent years, might have clawed back hundreds of millions of dollars of compensation paid out in 2006 to employees at all levels, including senior executives who are still at those banks.
A Bonus Bonanza
For Wall Street, much of this decade represented a new Gilded Age. Salaries were merely play money — a pittance compared to bonuses. Bonus season became an annual celebration of the riches to be had in the markets. That was especially so in the New York area, where nearly $1 out of every $4 that companies paid employees last year went to someone in the financial industry. Bankers celebrated with five-figure dinners, vied to outspend each other at charity auctions and spent their newfound fortunes on new homes, cars and art.
The bonanza redefined success for an entire generation. Graduates of top universities sought their fortunes in banking, rather than in careers like medicine, engineering or teaching. Wall Street worked its rookies hard, but it held out the promise of rich rewards. In college dorms, tales of 30-year-olds pulling down $5 million a year were legion.
While top executives received the biggest bonuses, what is striking is how many employees throughout the ranks took home large paychecks. On Wall Street, the first goal was to make "a buck" — a million dollars. More than 100 people in Merrill's bond unit alone broke the million-dollar mark in 2006. Goldman Sachs paid more than $20 million apiece to more than 50 people that year, according to a person familiar with the matter. Goldman declined to comment.
Pay was tied to profit, and profit to the easy, borrowed money that could be invested in markets like mortgage securities. As the financial industry's role in the economy grew, workers' pay ballooned, leaping sixfold since 1975, nearly twice as much as the increase in pay for the average American worker.
"The financial services industry was in a bubble," said Mark Zandi, chief economist at Moody's Economy.com. "The industry got a bigger share of the economic pie."
A Money Machine
Dow Kim stepped into this milieu in the mid-1980s, fresh from the Wharton School at the University of Pennsylvania. Born in Seoul and raised there and in Singapore, Kim moved to the United States at 16 to attend Phillips Academy in Andover, Massachusetts A quiet workaholic in an industry of workaholics, he seemed to rise through the ranks by sheer will. After a stint trading bonds in Tokyo, he moved to New York to oversee Merrill's fixed-income business in 2001. Two years later, he became co-president.
Even as tremors began to reverberate through the housing market and his own company, Kim exuded optimism.
After several of his key deputies left the firm in the summer of 2006, he appointed a former colleague from Asia, Osman Semerci, as his deputy, and beneath Semerci he installed Dale Lattanzio and Douglas Mallach. Lattanzio promptly purchased a $5 million home, as well as oceanfront property in Mantoloking, a wealthy enclave in New Jersey, according to county records.
Merrill and the executives in this article declined to comment or say whether they would return past bonuses. Mallach did not return telephone calls.
Semerci, Lattanzio and Mallach joined Kim as Merrill entered a new phase in its mortgage buildup. That September, the bank spent $1.3 billion to buy the First Franklin Financial Corporation, a mortgage lender in California, in part so it could bundle its mortgages into lucrative bonds.
Yet Kim was growing restless. That same month, he told E. Stanley O'Neal, Merrill's chief executive, that he was considering starting his own hedge fund. His traders were stunned. But O'Neal persuaded Kim to stay, assuring him that the future was bright for Merrill's mortgage business, and, by extension, for Kim.
Kim stepped to the lectern on the bond trading floor and told his anxious traders that he was not going anywhere, and that business was looking up, according to four former employees who were there. The traders erupted in applause.
"No one wanted to stop this thing," said a former mortgage analyst at Merrill. "It was a machine, and we all knew it was going to be a very, very good year."
Merrill Lynch celebrated its success even before the year was over. In November, the company hosted a three-day golf tournament at Pebble Beach, California
Kim, an avid golfer, played alongside William Gross, a founder of Pimco, the big bond house; and Ralph Cioffi, who oversaw two Bear Stearns hedge funds whose subsequent collapse in 2007 would send shock waves through the financial world.
"There didn't seem to be an end in sight," said a person who attended the tournament.
Back in New York, Kim's team was eagerly bundling risky home mortgages into bonds. One of the last deals they put together that year was called "Costa Bella," or beautiful coast — a name that recalls Pebble Beach. The $500 million bundle of loans, a type of investment known as a collateralized debt obligation, was managed by Gross's Pimco.
Merrill Lynch collected about $5 million in fees for concocting Costa Bella, which included mortgages originated by First Franklin.
But Costa Bella, like so many other CDO's, was filled with loans that borrowers could not repay. Initially part of it was rated AAA, but Costa Bella is now deeply troubled. The losses on the investment far exceed the money Merrill collected for putting the deal together.
So Much for So Few
By the time Costa Bella ran into trouble, the Merrill bankers who had devised it had collected their bonuses for 2006. Kim's fixed-income unit generated more than half of Merrill's revenue that year, according to people with direct knowledge of the matter. As a reward, O'Neal and Kim paid nearly a third of Merrill's $5 billion to $6 billion bonus pool to the 2,000 professionals in the division.
O'Neal himself was paid $46 million, according to Equilar, an executive compensation research firm and data provider in California. Kim received $35 million. About 57 percent of their pay was in stock, which would lose much of its value over the next two years, but even the cash portions of their bonus were generous: $18.5 million for O'Neal, and $14.5 million for Kim, according to Equilar.
Kim and his deputies were given wide discretion about how to dole out their pot of money. Semerci was among the highest earners in 2006, at more than $20 million. Below him, Mallach and Lattanzio each earned more than $10 million. They were among just over 100 people who accounted for some $500 million of the pool, according to people with direct knowledge of the matter.
After that blowout, Merrill pushed even deeper into the mortgage business, despite growing signs that the housing bubble was starting to burst. That decision proved disastrous. As the problems in the subprime mortgage market exploded into a full-blown crisis, the value of Merrill's investments plummeted. The firm has since written down its investments by more than $54 billion, selling some of them for pennies on the dollar.
Lin, the former Merrill trader, arrived late to the party. He was one of the last people hired onto Merrill's mortgage desk, in the summer of 2007. Even then, Merrill guaranteed Lin a bonus if he joined the firm. Lin would not disclose his bonus, but such payouts were often in the seven figures.
Lin said he quickly noticed that traders across Wall Street were reluctant to admit what now seems so obvious: Their mortgage investments were worth far less than they had thought.
"It's always human nature," said Lin, who lost his job at Merrill last summer and now works at RRMS Advisors, a consulting firm that advises investors in troubled mortgage investments. "You want to pull for the market to do well because you're vested."
But critics question why Wall Street embraced the risky deals even as the housing and mortgage markets began to weaken.
"What happened to their investments was of no interest to them, because they would already be paid," said Paul Hodgson, senior research associate at the Corporate Library, a shareholder activist group. Some Wall Street executives argue that paying a larger portion of bonuses in the form of stock, rather than in cash, might keep employees from making short-sighted decision. But Hodgson contended that would not go far enough, in part because the cash rewards alone were so high. Kim, for example, was paid a total of $116.6 million in cash and stock from 2001 to 2007. Of that, $55 million was in cash, according to Equilar.
Leaving the Scene
As the damage at Merrill became clear in 2007, Kim, his deputies and finally O'Neal left the firm. Kim opened a hedge fund, but it quickly closed. Semerci and Lattanzio landed at a hedge fund in London.
All three departed without collecting bonuses in 2007. O'Neal, however, got even richer by leaving Merrill Lynch. He was awarded an exit package worth $161 million.
Clawing back the 2006 bonuses at Merrill would not come close to making up for the company's losses, which exceed all the profits that the firm earned over the previous 20 years. This fall, the once-proud firm was sold to Bank of America, ending its 94-year history as an independent firm.
Bebchuk of Harvard Law School said investment banks like Merrill were brought to their knees because their employees chased after the rich rewards that executives promised them.
"They were trying to get as much of this or that paper, they were doing it with excitement and vigor, and that was because they knew they would be making huge amounts of money by the end of the year," he said.
By Louise Story
Thursday, December 18, 2008
"As a result of the extraordinary growth at Merrill during my tenure as CEO, the board saw fit to increase my compensation each year."
— E. Stanley O'Neal, the former chief executive of Merrill Lynch, March 2008
For Dow Kim, 2006 was a very good year. While his salary at Merrill Lynch was $350,000, his total compensation was 100 times that — $35 million.
The difference between the two amounts was his bonus, a rich reward for the robust earnings made by the traders he oversaw in Merrill's mortgage business.
Kim's colleagues, not only at his level, but far down the ranks, also pocketed large paychecks. In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million.
But Merrill's record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value.
Unlike the earnings, however, the bonuses have not been reversed.
As regulators and shareholders sift through the rubble of the financial crisis, questions are being asked about what role lavish bonuses played in the debacle. Scrutiny over pay is intensifying as banks like Merrill prepare to dole out bonuses even after they have had to be propped up with billions of dollars of taxpayers' money. While bonuses are expected to be half of what they were a year ago, some bankers could still collect millions of dollars.
Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street's pay structure, in which bonuses are based on short-term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning.
"Compensation was flawed top to bottom," said Lucian Bebchuk, a professor at Harvard Law School and an expert on compensation. "The whole organization was responding to distorted incentives."
Even Wall Streeters concede they were dazzled by the money. To earn bigger bonuses, many traders ignored or played down the risks they took until their bonuses were paid. Their bosses often turned a blind eye because it was in their interest as well.
"That's a call that senior management or risk management should question, but of course their pay was tied to it too," said Brian Lin, a former mortgage trader at Merrill Lynch.
The highest-ranking executives at four firms have agreed under pressure to go without their bonuses, including John Thain, who initially wanted a bonus this year since he joined Merrill Lynch as chief executive after its ill-fated mortgage bets were made. And four former executives at one hard-hit bank, UBS of Switzerland, recently volunteered to return some of the bonuses they were paid before the financial crisis. But few think others on Wall Street will follow that lead.
For now, most banks are looking forward rather than backward. Morgan Stanley and UBS are attaching new strings to bonuses, allowing them to pull back part of workers' payouts if they turn out to have been based on illusory profits. Those policies, had they been in place in recent years, might have clawed back hundreds of millions of dollars of compensation paid out in 2006 to employees at all levels, including senior executives who are still at those banks.
A Bonus Bonanza
For Wall Street, much of this decade represented a new Gilded Age. Salaries were merely play money — a pittance compared to bonuses. Bonus season became an annual celebration of the riches to be had in the markets. That was especially so in the New York area, where nearly $1 out of every $4 that companies paid employees last year went to someone in the financial industry. Bankers celebrated with five-figure dinners, vied to outspend each other at charity auctions and spent their newfound fortunes on new homes, cars and art.
The bonanza redefined success for an entire generation. Graduates of top universities sought their fortunes in banking, rather than in careers like medicine, engineering or teaching. Wall Street worked its rookies hard, but it held out the promise of rich rewards. In college dorms, tales of 30-year-olds pulling down $5 million a year were legion.
While top executives received the biggest bonuses, what is striking is how many employees throughout the ranks took home large paychecks. On Wall Street, the first goal was to make "a buck" — a million dollars. More than 100 people in Merrill's bond unit alone broke the million-dollar mark in 2006. Goldman Sachs paid more than $20 million apiece to more than 50 people that year, according to a person familiar with the matter. Goldman declined to comment.
Pay was tied to profit, and profit to the easy, borrowed money that could be invested in markets like mortgage securities. As the financial industry's role in the economy grew, workers' pay ballooned, leaping sixfold since 1975, nearly twice as much as the increase in pay for the average American worker.
"The financial services industry was in a bubble," said Mark Zandi, chief economist at Moody's Economy.com. "The industry got a bigger share of the economic pie."
A Money Machine
Dow Kim stepped into this milieu in the mid-1980s, fresh from the Wharton School at the University of Pennsylvania. Born in Seoul and raised there and in Singapore, Kim moved to the United States at 16 to attend Phillips Academy in Andover, Massachusetts A quiet workaholic in an industry of workaholics, he seemed to rise through the ranks by sheer will. After a stint trading bonds in Tokyo, he moved to New York to oversee Merrill's fixed-income business in 2001. Two years later, he became co-president.
Even as tremors began to reverberate through the housing market and his own company, Kim exuded optimism.
After several of his key deputies left the firm in the summer of 2006, he appointed a former colleague from Asia, Osman Semerci, as his deputy, and beneath Semerci he installed Dale Lattanzio and Douglas Mallach. Lattanzio promptly purchased a $5 million home, as well as oceanfront property in Mantoloking, a wealthy enclave in New Jersey, according to county records.
Merrill and the executives in this article declined to comment or say whether they would return past bonuses. Mallach did not return telephone calls.
Semerci, Lattanzio and Mallach joined Kim as Merrill entered a new phase in its mortgage buildup. That September, the bank spent $1.3 billion to buy the First Franklin Financial Corporation, a mortgage lender in California, in part so it could bundle its mortgages into lucrative bonds.
Yet Kim was growing restless. That same month, he told E. Stanley O'Neal, Merrill's chief executive, that he was considering starting his own hedge fund. His traders were stunned. But O'Neal persuaded Kim to stay, assuring him that the future was bright for Merrill's mortgage business, and, by extension, for Kim.
Kim stepped to the lectern on the bond trading floor and told his anxious traders that he was not going anywhere, and that business was looking up, according to four former employees who were there. The traders erupted in applause.
"No one wanted to stop this thing," said a former mortgage analyst at Merrill. "It was a machine, and we all knew it was going to be a very, very good year."
Merrill Lynch celebrated its success even before the year was over. In November, the company hosted a three-day golf tournament at Pebble Beach, California
Kim, an avid golfer, played alongside William Gross, a founder of Pimco, the big bond house; and Ralph Cioffi, who oversaw two Bear Stearns hedge funds whose subsequent collapse in 2007 would send shock waves through the financial world.
"There didn't seem to be an end in sight," said a person who attended the tournament.
Back in New York, Kim's team was eagerly bundling risky home mortgages into bonds. One of the last deals they put together that year was called "Costa Bella," or beautiful coast — a name that recalls Pebble Beach. The $500 million bundle of loans, a type of investment known as a collateralized debt obligation, was managed by Gross's Pimco.
Merrill Lynch collected about $5 million in fees for concocting Costa Bella, which included mortgages originated by First Franklin.
But Costa Bella, like so many other CDO's, was filled with loans that borrowers could not repay. Initially part of it was rated AAA, but Costa Bella is now deeply troubled. The losses on the investment far exceed the money Merrill collected for putting the deal together.
So Much for So Few
By the time Costa Bella ran into trouble, the Merrill bankers who had devised it had collected their bonuses for 2006. Kim's fixed-income unit generated more than half of Merrill's revenue that year, according to people with direct knowledge of the matter. As a reward, O'Neal and Kim paid nearly a third of Merrill's $5 billion to $6 billion bonus pool to the 2,000 professionals in the division.
O'Neal himself was paid $46 million, according to Equilar, an executive compensation research firm and data provider in California. Kim received $35 million. About 57 percent of their pay was in stock, which would lose much of its value over the next two years, but even the cash portions of their bonus were generous: $18.5 million for O'Neal, and $14.5 million for Kim, according to Equilar.
Kim and his deputies were given wide discretion about how to dole out their pot of money. Semerci was among the highest earners in 2006, at more than $20 million. Below him, Mallach and Lattanzio each earned more than $10 million. They were among just over 100 people who accounted for some $500 million of the pool, according to people with direct knowledge of the matter.
After that blowout, Merrill pushed even deeper into the mortgage business, despite growing signs that the housing bubble was starting to burst. That decision proved disastrous. As the problems in the subprime mortgage market exploded into a full-blown crisis, the value of Merrill's investments plummeted. The firm has since written down its investments by more than $54 billion, selling some of them for pennies on the dollar.
Lin, the former Merrill trader, arrived late to the party. He was one of the last people hired onto Merrill's mortgage desk, in the summer of 2007. Even then, Merrill guaranteed Lin a bonus if he joined the firm. Lin would not disclose his bonus, but such payouts were often in the seven figures.
Lin said he quickly noticed that traders across Wall Street were reluctant to admit what now seems so obvious: Their mortgage investments were worth far less than they had thought.
"It's always human nature," said Lin, who lost his job at Merrill last summer and now works at RRMS Advisors, a consulting firm that advises investors in troubled mortgage investments. "You want to pull for the market to do well because you're vested."
But critics question why Wall Street embraced the risky deals even as the housing and mortgage markets began to weaken.
"What happened to their investments was of no interest to them, because they would already be paid," said Paul Hodgson, senior research associate at the Corporate Library, a shareholder activist group. Some Wall Street executives argue that paying a larger portion of bonuses in the form of stock, rather than in cash, might keep employees from making short-sighted decision. But Hodgson contended that would not go far enough, in part because the cash rewards alone were so high. Kim, for example, was paid a total of $116.6 million in cash and stock from 2001 to 2007. Of that, $55 million was in cash, according to Equilar.
Leaving the Scene
As the damage at Merrill became clear in 2007, Kim, his deputies and finally O'Neal left the firm. Kim opened a hedge fund, but it quickly closed. Semerci and Lattanzio landed at a hedge fund in London.
All three departed without collecting bonuses in 2007. O'Neal, however, got even richer by leaving Merrill Lynch. He was awarded an exit package worth $161 million.
Clawing back the 2006 bonuses at Merrill would not come close to making up for the company's losses, which exceed all the profits that the firm earned over the previous 20 years. This fall, the once-proud firm was sold to Bank of America, ending its 94-year history as an independent firm.
Bebchuk of Harvard Law School said investment banks like Merrill were brought to their knees because their employees chased after the rich rewards that executives promised them.
"They were trying to get as much of this or that paper, they were doing it with excitement and vigor, and that was because they knew they would be making huge amounts of money by the end of the year," he said.
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Credit Suisse bankers are getting toxic bonuses
By Louise Story and Julia Werdigier
Thursday, December 18, 2008
NEW YORK: As Wall Street banks face public outrage over the large bonuses they plan to pay workers this year, Credit Suisse's investment banking unit told senior bankers on Thursday that they would have to eat their own cooking.
Credit Suisse will pay a portion of bonuses for thousands of its senior investment bankers using shares of troubled assets left over from before the financial crisis.
These assets - mostly leveraged loans and commercial mortgage bonds - are selling at distressed levels, if at all, and continue to cause devastating losses across Wall Street.
"In an industry where many competitors have gone out of business, people have lost their jobs, where regulators are ratcheting up their requirements, the public at large doesn't believe investment bankers should be paid much, if anything," Paul Calello, the head of the investment bank, said in a telephone call with senior bankers, according to two people who were on the call.
Banks like Goldman Sachs, Morgan Stanley and Merrill Lynch are completing their bonus pools and will begin announcing awards to their employees in coming weeks. Bank executives have said that bonuses will be lower this year, and that the top executives will not receive bonuses at all.
But even scaling back pay drastically would still add up to significant bonuses for rank-and-file traders and bankers. Banks say they need to pay these employees something above and beyond their salaries to keep them coming to work. But critics say bonuses should be reconsidered, given the billions of dollars of taxpayer money that has been injected into many of the banks.
"This should be a year of no bonuses for any firm that took bailout money," said Peter Singer, a philosophy professor at Princeton University and a pre-eminent ethicist. "The assumption of having to take public money is that your firm is in an emergency situation, and you put out your hand for public help."
Credit Suisse also said it would introduce "claw-back" provisions on the cash portion of bonuses, allowing it to take back part of workers' pay in the future if their bets turn out to have been flawed. That follows similar announcements by Morgan Stanley and UBS.
But Credit Suisse is the first bank to weight its bonuses this year with toxic assets left over from its past. The bank said that $5 billion of the assets it has had trouble selling would be put into a new investment vehicle that it was calling the Partner Asset Facility. Shares of the vehicle will be given to its managing directors and directors as part of their bonuses, replacing some of the cash and stock that would have been paid in bonus money.
Of course, the bank's shareholders already felt the pain from much of the assets that will be put in the vehicle. Credit Suisse has been among the most aggressive in its write-downs. The assets in the new vehicle are already marked at 65 cents on the dollar, on average. That means if the assets recover, the bank's employees - not shareholders - will be the ones to benefit.
The asset plan, however, allows the bank to save money on compensation this year, which benefits shareholders, according to a spokeswoman. And many banks have sold toxic assets to outsiders at steep discounts, passing on the opportunity to reap any future gains.
Credit Suisse's asset plan does not include provisions for troubled assets it might create in the future, and some experts on compensation said the industry should focus more on broader reforms of employee pay. Financial workers often play a role in valuing the investments they make, and they have incentives to be optimistic in the short-term.
"Wall Street disproportionally focuses on short-term results compared to other industries," said Richard Cellini, a senior vice president at Integrity Interactive, a consulting firm in Waltham, Massachusetts. "In the short run, we all look like geniuses. It's the middle run that counts in most businesses."
Credit Suisse said this month that it would cut 5,300 jobs, or 11 percent of its work force, and that its top executives would not receive any bonuses for this year. For the third quarter, the bank posted a loss of 1.26 billion Swiss francs, worth $1 billion at the time, with the securities unit reporting a pretax loss of 3.23 billion francs after 2.43 billion francs of write-downs
By Louise Story and Julia Werdigier
Thursday, December 18, 2008
NEW YORK: As Wall Street banks face public outrage over the large bonuses they plan to pay workers this year, Credit Suisse's investment banking unit told senior bankers on Thursday that they would have to eat their own cooking.
Credit Suisse will pay a portion of bonuses for thousands of its senior investment bankers using shares of troubled assets left over from before the financial crisis.
These assets - mostly leveraged loans and commercial mortgage bonds - are selling at distressed levels, if at all, and continue to cause devastating losses across Wall Street.
"In an industry where many competitors have gone out of business, people have lost their jobs, where regulators are ratcheting up their requirements, the public at large doesn't believe investment bankers should be paid much, if anything," Paul Calello, the head of the investment bank, said in a telephone call with senior bankers, according to two people who were on the call.
Banks like Goldman Sachs, Morgan Stanley and Merrill Lynch are completing their bonus pools and will begin announcing awards to their employees in coming weeks. Bank executives have said that bonuses will be lower this year, and that the top executives will not receive bonuses at all.
But even scaling back pay drastically would still add up to significant bonuses for rank-and-file traders and bankers. Banks say they need to pay these employees something above and beyond their salaries to keep them coming to work. But critics say bonuses should be reconsidered, given the billions of dollars of taxpayer money that has been injected into many of the banks.
"This should be a year of no bonuses for any firm that took bailout money," said Peter Singer, a philosophy professor at Princeton University and a pre-eminent ethicist. "The assumption of having to take public money is that your firm is in an emergency situation, and you put out your hand for public help."
Credit Suisse also said it would introduce "claw-back" provisions on the cash portion of bonuses, allowing it to take back part of workers' pay in the future if their bets turn out to have been flawed. That follows similar announcements by Morgan Stanley and UBS.
But Credit Suisse is the first bank to weight its bonuses this year with toxic assets left over from its past. The bank said that $5 billion of the assets it has had trouble selling would be put into a new investment vehicle that it was calling the Partner Asset Facility. Shares of the vehicle will be given to its managing directors and directors as part of their bonuses, replacing some of the cash and stock that would have been paid in bonus money.
Of course, the bank's shareholders already felt the pain from much of the assets that will be put in the vehicle. Credit Suisse has been among the most aggressive in its write-downs. The assets in the new vehicle are already marked at 65 cents on the dollar, on average. That means if the assets recover, the bank's employees - not shareholders - will be the ones to benefit.
The asset plan, however, allows the bank to save money on compensation this year, which benefits shareholders, according to a spokeswoman. And many banks have sold toxic assets to outsiders at steep discounts, passing on the opportunity to reap any future gains.
Credit Suisse's asset plan does not include provisions for troubled assets it might create in the future, and some experts on compensation said the industry should focus more on broader reforms of employee pay. Financial workers often play a role in valuing the investments they make, and they have incentives to be optimistic in the short-term.
"Wall Street disproportionally focuses on short-term results compared to other industries," said Richard Cellini, a senior vice president at Integrity Interactive, a consulting firm in Waltham, Massachusetts. "In the short run, we all look like geniuses. It's the middle run that counts in most businesses."
Credit Suisse said this month that it would cut 5,300 jobs, or 11 percent of its work force, and that its top executives would not receive any bonuses for this year. For the third quarter, the bank posted a loss of 1.26 billion Swiss francs, worth $1 billion at the time, with the securities unit reporting a pretax loss of 3.23 billion francs after 2.43 billion francs of write-downs
*********************
Signs of hope, at last, for ex-Lehman bankers in Asia
By Rafael NamReuters
Thursday, December 18, 2008
HONG KONG: For former bankers of Lehman Brothers, landing their first major role in an Asian bond deal under their new Nomura ownership was a welcome step toward establishing a global footprint, but progress will be tough amid the harshest market conditions in years.
After a few months of what some Lehman employees in Asia have privately called a tough and emotional transition, Nomura was picked as one of the advisers to the Indonesian government's fund-raising plan for 2009, which has a goal of up to $4 billion, according to two people familiar with the plan, who did not want to be identified because of the confidential nature of the appointments.
The position will not necessarily lead to an underwriting role in any bond sale. In fact, Indonesia appointed Barclays Capital and UBS for a global medium-term note sale plan, and Nomura will have to continue to compete against other advisers to win other underwriting roles for deals.
But at least it's a foot in the door for Nomura, the largest Japanese brokerage firm, which as early as a few months ago would probably not even have been considered.
Long dominant in its home market, Nomura had a limited presence in bond underwriting in the rest of Asia before its purchase in September of Lehman's operations outside the United States.
The goal now is to leverage its strong roots in Japan and combine them with Lehman's more established relationships in the region in the hope of creating a regional bond powerhouse, said Anthony Arnaudy, head of Asia-Pacific debt capital markets at Nomura.
"I don't think there are many firms that can attest to that kind of firepower and access to investor capital that we can now bring to bear," he said. "When you add what we can do in the Japanese market and look at the whole region, we should completely dominate finance for our clients in these parts of the world."
Arnaudy, who was previously at Lehman's fixed-income team, declined to comment on whether Lehman had been appointed as an adviser on Indonesia.
Still, the road ahead will be challenging. For starters, Nomura does not have the established presence in the U.S. market that some of its global rivals enjoy. That could be a handicap when selling Asian bonds to investors based in the United States.
Though it earned its global reputation as a bond house, Lehman in Asia had also been a midranked player, lagging larger banks like Deutsche Bank and HSBC in underwriting dollar- and euro-denominated bond sales.
What Lehman brings to the table is longstanding relationships with countries including Indonesia. Lehman underwrote both of Indonesia's sovereign bond deals, worth $4.2 billion, this year.
It had also made inroads in South Korea. The U.S. lender was appointed as one of the six underwriters for a highly anticipated South Korea sovereign bond sale in September that was postponed, ironically, just days before Lehman's own collapse.
Combining Nomura and Lehman deals in dollar- and euro-denominated bonds, the new entity would rank ninth this year, according to Thomson Reuters data. But throwing in yen-currency bond sales, the new Nomura jumps to third, a vast leap from its 19th ranking last year.
Nomura's ambition for a bigger imprint in Asian debt capital markets, unfortunately, comes just as the volume of G-3 currency deals, those in dollars, euros and yen, have been cut in half this year to $25.4 billion, the lowest level since 2001.
A recovery appears uncertain at the start of the new year. Credit default swaps in Asia, which measure the cost of protection for bonds and serve as a gauge for pricing new issuance, have surged this year even for higher-rated debt.
For example, the iTraxx investment-grade index for Asia excluding Japan, which serves as a benchmark index for certificates of deposit, has increased fivefold this year, signaling how costly it could be for issuers to sell new debt.
Japanese investors are also notoriously cautious in embracing offshore debt, preferring instead to buy into the waves of foreign issuers selling yen-denominated debt, also known as Samurai bonds.
Arnaudy acknowledges the challenges ahead, but is confident about the long-term potential.
"It's going to take a little bit of time to get our clients around," he said. "We recognize that. We are building on the Nomura Asia franchise to create a new organization."
By Rafael NamReuters
Thursday, December 18, 2008
HONG KONG: For former bankers of Lehman Brothers, landing their first major role in an Asian bond deal under their new Nomura ownership was a welcome step toward establishing a global footprint, but progress will be tough amid the harshest market conditions in years.
After a few months of what some Lehman employees in Asia have privately called a tough and emotional transition, Nomura was picked as one of the advisers to the Indonesian government's fund-raising plan for 2009, which has a goal of up to $4 billion, according to two people familiar with the plan, who did not want to be identified because of the confidential nature of the appointments.
The position will not necessarily lead to an underwriting role in any bond sale. In fact, Indonesia appointed Barclays Capital and UBS for a global medium-term note sale plan, and Nomura will have to continue to compete against other advisers to win other underwriting roles for deals.
But at least it's a foot in the door for Nomura, the largest Japanese brokerage firm, which as early as a few months ago would probably not even have been considered.
Long dominant in its home market, Nomura had a limited presence in bond underwriting in the rest of Asia before its purchase in September of Lehman's operations outside the United States.
The goal now is to leverage its strong roots in Japan and combine them with Lehman's more established relationships in the region in the hope of creating a regional bond powerhouse, said Anthony Arnaudy, head of Asia-Pacific debt capital markets at Nomura.
"I don't think there are many firms that can attest to that kind of firepower and access to investor capital that we can now bring to bear," he said. "When you add what we can do in the Japanese market and look at the whole region, we should completely dominate finance for our clients in these parts of the world."
Arnaudy, who was previously at Lehman's fixed-income team, declined to comment on whether Lehman had been appointed as an adviser on Indonesia.
Still, the road ahead will be challenging. For starters, Nomura does not have the established presence in the U.S. market that some of its global rivals enjoy. That could be a handicap when selling Asian bonds to investors based in the United States.
Though it earned its global reputation as a bond house, Lehman in Asia had also been a midranked player, lagging larger banks like Deutsche Bank and HSBC in underwriting dollar- and euro-denominated bond sales.
What Lehman brings to the table is longstanding relationships with countries including Indonesia. Lehman underwrote both of Indonesia's sovereign bond deals, worth $4.2 billion, this year.
It had also made inroads in South Korea. The U.S. lender was appointed as one of the six underwriters for a highly anticipated South Korea sovereign bond sale in September that was postponed, ironically, just days before Lehman's own collapse.
Combining Nomura and Lehman deals in dollar- and euro-denominated bonds, the new entity would rank ninth this year, according to Thomson Reuters data. But throwing in yen-currency bond sales, the new Nomura jumps to third, a vast leap from its 19th ranking last year.
Nomura's ambition for a bigger imprint in Asian debt capital markets, unfortunately, comes just as the volume of G-3 currency deals, those in dollars, euros and yen, have been cut in half this year to $25.4 billion, the lowest level since 2001.
A recovery appears uncertain at the start of the new year. Credit default swaps in Asia, which measure the cost of protection for bonds and serve as a gauge for pricing new issuance, have surged this year even for higher-rated debt.
For example, the iTraxx investment-grade index for Asia excluding Japan, which serves as a benchmark index for certificates of deposit, has increased fivefold this year, signaling how costly it could be for issuers to sell new debt.
Japanese investors are also notoriously cautious in embracing offshore debt, preferring instead to buy into the waves of foreign issuers selling yen-denominated debt, also known as Samurai bonds.
Arnaudy acknowledges the challenges ahead, but is confident about the long-term potential.
"It's going to take a little bit of time to get our clients around," he said. "We recognize that. We are building on the Nomura Asia franchise to create a new organization."
*********************
For tips on frugality, look to India
By Anand Giridharadas
Thursday, December 18, 2008
VERLA, India: Watching Americans try to make themselves frugal is like watching Mongolians try to make Bordeaux wine.
Thrift does not come naturally to a country that turned layaway, zero-interest home loans and pre-approved credit cards into a mode of living. And so as they trudge through a cruel holiday season, Americans are cutting back, but hesitatingly and maladroitly.
They are standing in line by the thousands at Wal-Mart and Sam's Club, pushing and pulling, and on one occasion trampling an obstructive employee to death with their frantic, frugal feet.
They are embracing the alien idea of sacrifice. Mothers are forgoing personal shopping to spend on the family, and, according to Consumer Reports, pet owners are depriving themselves before shortchanging their pets.
Fourteen percent of Americans are making gifts, not buying them, that magazine reported. Twelve percent are plotting to pass on to others the gifts others give them. Many plan to tip less, scale back charity and go shopping accompanied by that leafy commodity so foreign to Americans: cash.
And then it hit me. The jostling in line, the stampeding, the motherly sacrifice, the homemade presents, the regifting, the thick wads of rubber-banded cash: America is becoming India!
India is to frugality as Bethlehem is to Jesus. But in recent years, the megacorporations of the West, not content to foment irresponsibility at home, sent pinstriped missionaries here to nudge genetically predisposed savers to spend.
Citibank sprinkled a borrowing-wary nation with small loans for motorcycles: Live a little! Visa peddled plastic to lovers of gold: Let your hair down!
Millions of Indians converted, but millions of others ignored them - and, for the West, luckily so. As rich countries enter a new era of scarcity, the best practices of the gurus of frugality can serve as a textbook for frugality's new pupils.
The first tip of the Indian frugalist is to wear your money. One rarely misplaces funds when they are kept in gold and hooked through your nose or strung around your neck. Some Indian women wear saris woven with gold thread. The danger of nudity discourages whimsical spending.
The truly frugal segment friends and associates into two camps: those who merit their money and those who don't.
Cellphone calls may cost a cent a minute in India, but why call people who only rate a text? Why text when you can make a "missed call"? Millions of Indians dial and quickly hang up, hoping for the other person to call back and foot the bill.
Your upholstery is not for everyone. Sofas fray and stain; there is, in the final analysis, a cost per posterior. So cover your sofa with bed sheets and remove them for only the best behinds.
So, too, with crockery: Buy a set of expensive plates and keep it in a case where your friends can see them while they eat from the cheap plates you actually set before them.
When eating out, order soups fractionally: a certain number of soups split by a certain number of people. Start with "one into two," the realm of Indian beginners, then graduate in time to "three into five" and "six into seven."
For entrees, count the diners at the table, subtract one and order that many dishes - which, for a table of four, saves 25 percent over the one-person-one-dish norm.
Of course, if you can, avoid restaurants altogether. Weddings are big here, and Indians who keep an ear to the ground can eat free every night. Wedding crashers are not a movie in India; they are a way of life, and I'm told it takes three successful blend-ins before guests begin to take your presence for granted and invite you to their own weddings.
In India, nothing cannot be recycled. Wedding gifts, birthday gifts, anniversary gifts, gifts for Hindu festival of Diwali: forwardable are they all. Presents are opened carefully so that the wrapping paper can wrap again. Plastic shopping sacks are reincarnated as garbage bags. Used, licked stamps are enlisted for further tours when the post office fails to mark them.
And what cannot be reused whole can often be recycled for parts. In Dharavi, the Mumbai slum, workers in dingy rooms sort the jettisoned - plastic spoons, watches, mobile phones.
Every shard of every ware has a value. Each piece is disassembled, then the pieces are melted, reassembled and sold - all for a profit, not as a tax-guzzling government program.
Within the household, Indian frugalists think strategically, like MBA's. They do not let their children study art history. Children are equities, and good investors build a diverse portfolio by rearing one police officer, one software coder, one retail clerk. They sequence their educations such that the eventual profits from each child subsidize the schooling of the next one.
Every MBA graduate knows about "value investing." But only Indian homemakers apply the principle to peas. That's right: Buy peas in winter, when they are plentiful and cheap. Freeze. Defrost and cook in the summer, when prices spike.
Indian companies think like Indian consumers. On business trips, men must sometimes share beds with other men, and women with other women.
I know of a drug company whose managers could fly to meetings in another city but were mandated to take the cheaper, sputtering train back home.
With all their thrifty proclivities, it was inevitable that Indians would one day make the world's cheapest car. But Tata Motors, based in Mumbai, did not revolutionize the car so much as squeeze $10 savings hundreds of times over.
It took out one of the windshield wipers, used glue instead of nuts and bolts in places and stripped out air-conditioning despite the blazing 120-degree Fahrenheit (49 Celsius) summer heat.
And yet my favorite choice was the analog, rather than more accurate digital, speedometer. It was not a huge savings, and a speedometer's accuracy can determine life and death. So I put it to Ashok Taneja, a Tata supplier, some months ago: Why scrimp on something so vital?
"So what if I'm going at 65 or 75?" he said.
I assumed, and hoped, he was speaking of kilometers per hour, not of the duration of a frugally lived life.
By Anand Giridharadas
Thursday, December 18, 2008
VERLA, India: Watching Americans try to make themselves frugal is like watching Mongolians try to make Bordeaux wine.
Thrift does not come naturally to a country that turned layaway, zero-interest home loans and pre-approved credit cards into a mode of living. And so as they trudge through a cruel holiday season, Americans are cutting back, but hesitatingly and maladroitly.
They are standing in line by the thousands at Wal-Mart and Sam's Club, pushing and pulling, and on one occasion trampling an obstructive employee to death with their frantic, frugal feet.
They are embracing the alien idea of sacrifice. Mothers are forgoing personal shopping to spend on the family, and, according to Consumer Reports, pet owners are depriving themselves before shortchanging their pets.
Fourteen percent of Americans are making gifts, not buying them, that magazine reported. Twelve percent are plotting to pass on to others the gifts others give them. Many plan to tip less, scale back charity and go shopping accompanied by that leafy commodity so foreign to Americans: cash.
And then it hit me. The jostling in line, the stampeding, the motherly sacrifice, the homemade presents, the regifting, the thick wads of rubber-banded cash: America is becoming India!
India is to frugality as Bethlehem is to Jesus. But in recent years, the megacorporations of the West, not content to foment irresponsibility at home, sent pinstriped missionaries here to nudge genetically predisposed savers to spend.
Citibank sprinkled a borrowing-wary nation with small loans for motorcycles: Live a little! Visa peddled plastic to lovers of gold: Let your hair down!
Millions of Indians converted, but millions of others ignored them - and, for the West, luckily so. As rich countries enter a new era of scarcity, the best practices of the gurus of frugality can serve as a textbook for frugality's new pupils.
The first tip of the Indian frugalist is to wear your money. One rarely misplaces funds when they are kept in gold and hooked through your nose or strung around your neck. Some Indian women wear saris woven with gold thread. The danger of nudity discourages whimsical spending.
The truly frugal segment friends and associates into two camps: those who merit their money and those who don't.
Cellphone calls may cost a cent a minute in India, but why call people who only rate a text? Why text when you can make a "missed call"? Millions of Indians dial and quickly hang up, hoping for the other person to call back and foot the bill.
Your upholstery is not for everyone. Sofas fray and stain; there is, in the final analysis, a cost per posterior. So cover your sofa with bed sheets and remove them for only the best behinds.
So, too, with crockery: Buy a set of expensive plates and keep it in a case where your friends can see them while they eat from the cheap plates you actually set before them.
When eating out, order soups fractionally: a certain number of soups split by a certain number of people. Start with "one into two," the realm of Indian beginners, then graduate in time to "three into five" and "six into seven."
For entrees, count the diners at the table, subtract one and order that many dishes - which, for a table of four, saves 25 percent over the one-person-one-dish norm.
Of course, if you can, avoid restaurants altogether. Weddings are big here, and Indians who keep an ear to the ground can eat free every night. Wedding crashers are not a movie in India; they are a way of life, and I'm told it takes three successful blend-ins before guests begin to take your presence for granted and invite you to their own weddings.
In India, nothing cannot be recycled. Wedding gifts, birthday gifts, anniversary gifts, gifts for Hindu festival of Diwali: forwardable are they all. Presents are opened carefully so that the wrapping paper can wrap again. Plastic shopping sacks are reincarnated as garbage bags. Used, licked stamps are enlisted for further tours when the post office fails to mark them.
And what cannot be reused whole can often be recycled for parts. In Dharavi, the Mumbai slum, workers in dingy rooms sort the jettisoned - plastic spoons, watches, mobile phones.
Every shard of every ware has a value. Each piece is disassembled, then the pieces are melted, reassembled and sold - all for a profit, not as a tax-guzzling government program.
Within the household, Indian frugalists think strategically, like MBA's. They do not let their children study art history. Children are equities, and good investors build a diverse portfolio by rearing one police officer, one software coder, one retail clerk. They sequence their educations such that the eventual profits from each child subsidize the schooling of the next one.
Every MBA graduate knows about "value investing." But only Indian homemakers apply the principle to peas. That's right: Buy peas in winter, when they are plentiful and cheap. Freeze. Defrost and cook in the summer, when prices spike.
Indian companies think like Indian consumers. On business trips, men must sometimes share beds with other men, and women with other women.
I know of a drug company whose managers could fly to meetings in another city but were mandated to take the cheaper, sputtering train back home.
With all their thrifty proclivities, it was inevitable that Indians would one day make the world's cheapest car. But Tata Motors, based in Mumbai, did not revolutionize the car so much as squeeze $10 savings hundreds of times over.
It took out one of the windshield wipers, used glue instead of nuts and bolts in places and stripped out air-conditioning despite the blazing 120-degree Fahrenheit (49 Celsius) summer heat.
And yet my favorite choice was the analog, rather than more accurate digital, speedometer. It was not a huge savings, and a speedometer's accuracy can determine life and death. So I put it to Ashok Taneja, a Tata supplier, some months ago: Why scrimp on something so vital?
"So what if I'm going at 65 or 75?" he said.
I assumed, and hoped, he was speaking of kilometers per hour, not of the duration of a frugally lived life.
****************************
****************************
U.S. stimulus gets riskier from here
By James SaftReuters
Thursday, December 18, 2008
LONDON: The Federal Reserve faces two considerable risks now that quantitative easing is at hand: keeping the dollar from a disorderly decline and figuring out how to dismount from the tiger.
The Fed has cut interest rates to a range of zero to 0.25 percent and said it would use "all available tools" to get the U.S. economy growing again, including buying mortgage debt as well as exploring direct purchases of Treasury bonds.
While the central bank was at pains to distance its policy from Japan's during its extended downturn in the 1990s, there can be no doubt that the dollar printing presses are and have been running and will pump out as much currency as is needed to avoid deflation and make credit available at a stimulative rate.
There is no question of the Fed not being able to reignite inflation in the U.S. economy; if they print money fast enough, prices will go up. The issue is more about the collateral damage possible when a major debtor nation takes these steps, even if it is doing it for all the right reasons, in support of the best possible cause.
In the short term, the risk is that foreign holders of the dollar and Treasuries are spooked by the whirring of the presses, and, reasoning that the Fed cannot fail in its quest to reignite inflation, decide to hold something less, well, risky.
In the current circumstances, for better or worse, there may not be that much of a dollar alternative for global reserve managers and investors and, seeing as how a rapid decline for the dollar would hurt creditors, they may stick it out. But the risk is higher now than last week, and much higher than earlier this year.
The value of a dollar against a trade-weighted basket of currencies fell sharply after the Fed's announcement and is down about 10 percent in the past month.
Two factors that had been supporting the dollar through the recent months of the crisis, a tendency by U.S. investors to repatriate dollars during periods of stress, and the need to purchase dollars as part of the process of unwinding leveraged financial trades, will not continue forever.
"The risks for the dollar are pretty clear," said Michael Hart, a foreign exchange strategist at Citigroup in London. "It is going one way and the only question is how unidirectional it is going to be and how many starts and stops we are going to see."
U.S. policy appears to be aimed at helping to recapitalize banks and cutting the cost of finance to consumers by buying up assets and is distinct from that of the Bank of Japan, which increased bank reserves.
There are some stark differences between the United States and Japan, which didn't have the same need to attract external finance, and for that matter between the United States now and the United States during the Great Depression. When the Depression struck, the United States was the world's biggest creditor, rather than its principle debtor.
The U.S. economy is both distended and hollowed out; it needs to redirect itself more toward savings and producing goods and services that can be sold overseas. The problem is that doing that quickly will be both very painful and produce a lot of collateral damage. Fed policy can only succeed if it softens the very terrible effect of that reallocation but does not prevent it.
But what happens if, or rather once, the Fed and the U.S. government's combined stimulus succeeds? How exactly do you unwind a program of Treasury and mortgage asset purchases and near zero rates without bringing on too much inflation, perhaps much too much?
If foreign holders of the dollar stick with it during the next crucial months, there is little to prevent them from bailing out later, if they judge the Fed to have kicked the ball too far down field. There is no way of knowing how this can be undone or what to expect.
There is also another set of actors who can cause problems; foreign central banks and their government bosses. If the dollar weakens much during a time of global recession many will have a hard time resisting the urge to devalue their own currencies in an effort to capture a bigger share of what little demand remains.
The plan to buy assets to cut the knot of finance is sound but raises the question of how and when the banking system will be brought back to life. I'm not sure that buying time and hoping it can outlive its debts will work.
The new U.S. administration needs to quickly enunciate a clear and comprehensive policy on how recapitalizations will work, so that private capital and taxpayers can know where they stand.
By James SaftReuters
Thursday, December 18, 2008
LONDON: The Federal Reserve faces two considerable risks now that quantitative easing is at hand: keeping the dollar from a disorderly decline and figuring out how to dismount from the tiger.
The Fed has cut interest rates to a range of zero to 0.25 percent and said it would use "all available tools" to get the U.S. economy growing again, including buying mortgage debt as well as exploring direct purchases of Treasury bonds.
While the central bank was at pains to distance its policy from Japan's during its extended downturn in the 1990s, there can be no doubt that the dollar printing presses are and have been running and will pump out as much currency as is needed to avoid deflation and make credit available at a stimulative rate.
There is no question of the Fed not being able to reignite inflation in the U.S. economy; if they print money fast enough, prices will go up. The issue is more about the collateral damage possible when a major debtor nation takes these steps, even if it is doing it for all the right reasons, in support of the best possible cause.
In the short term, the risk is that foreign holders of the dollar and Treasuries are spooked by the whirring of the presses, and, reasoning that the Fed cannot fail in its quest to reignite inflation, decide to hold something less, well, risky.
In the current circumstances, for better or worse, there may not be that much of a dollar alternative for global reserve managers and investors and, seeing as how a rapid decline for the dollar would hurt creditors, they may stick it out. But the risk is higher now than last week, and much higher than earlier this year.
The value of a dollar against a trade-weighted basket of currencies fell sharply after the Fed's announcement and is down about 10 percent in the past month.
Two factors that had been supporting the dollar through the recent months of the crisis, a tendency by U.S. investors to repatriate dollars during periods of stress, and the need to purchase dollars as part of the process of unwinding leveraged financial trades, will not continue forever.
"The risks for the dollar are pretty clear," said Michael Hart, a foreign exchange strategist at Citigroup in London. "It is going one way and the only question is how unidirectional it is going to be and how many starts and stops we are going to see."
U.S. policy appears to be aimed at helping to recapitalize banks and cutting the cost of finance to consumers by buying up assets and is distinct from that of the Bank of Japan, which increased bank reserves.
There are some stark differences between the United States and Japan, which didn't have the same need to attract external finance, and for that matter between the United States now and the United States during the Great Depression. When the Depression struck, the United States was the world's biggest creditor, rather than its principle debtor.
The U.S. economy is both distended and hollowed out; it needs to redirect itself more toward savings and producing goods and services that can be sold overseas. The problem is that doing that quickly will be both very painful and produce a lot of collateral damage. Fed policy can only succeed if it softens the very terrible effect of that reallocation but does not prevent it.
But what happens if, or rather once, the Fed and the U.S. government's combined stimulus succeeds? How exactly do you unwind a program of Treasury and mortgage asset purchases and near zero rates without bringing on too much inflation, perhaps much too much?
If foreign holders of the dollar stick with it during the next crucial months, there is little to prevent them from bailing out later, if they judge the Fed to have kicked the ball too far down field. There is no way of knowing how this can be undone or what to expect.
There is also another set of actors who can cause problems; foreign central banks and their government bosses. If the dollar weakens much during a time of global recession many will have a hard time resisting the urge to devalue their own currencies in an effort to capture a bigger share of what little demand remains.
The plan to buy assets to cut the knot of finance is sound but raises the question of how and when the banking system will be brought back to life. I'm not sure that buying time and hoping it can outlive its debts will work.
The new U.S. administration needs to quickly enunciate a clear and comprehensive policy on how recapitalizations will work, so that private capital and taxpayers can know where they stand.
****************************
White House considers 'orderly' bankruptcy for GM and Chrysler
By David Stout and Micheline Maynard
Thursday, December 18, 2008
WASHINGTON: The White House said Thursday that an "orderly" bankruptcy was one option being considered to try to rescue General Motors and Chrysler, which are seeking billions of dollars to avoid a shutdown.
President George W. Bush's spokeswoman, Dana Perino, confirmed growing speculation within legal circles that the president and Treasury Secretary Henry Paulson Jr. were considering the step as part of a rescue package for the automobile industry.
The action would be unusual and would require concessions by the United Automobile Workers, suppliers, investment banks, the federal pension board, bondholders and other stakeholders in the two auto companies.
Ford Motor, which does not face an urgent need for capital, is not likely to be part of any rescue package.
Under one possibility that has been discussed, the government would give GM and Chrysler enough financing to operate for several months. Then a government-selected overseer would bring together company executives and other representatives to map out steps that would be taken once the two companies file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
"It's not going to be easy, it's not going to be pleasant, or palatable, but it's the only solution that makes the least bit of sense," said Hugh Ray, head of the bankruptcy practice at Andrews and Kurth, a Houston law firm, who has taken part in many major bankruptcy cases.
Major banks would provide debtor-in-possession financing for the companies to operate while under bankruptcy, with U.S. government funds as security.
"Disorderly collapse would be something very chaotic that is a shock to a system," Perino said Thursday at a news briefing. "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about. That would be one of the options."
Perino quickly added that no final decision had been made. She said she could not be definite about the timing of a White House announcement, but that administration officials wrestling with the crisis were "nearing conclusion" of their deliberations.
"Any scenario that comes forward after this decision-making process, all the stakeholders are going to have to make tough decisions," Perino said.
Bush said Thursday that he was "worried about a disorderly bankruptcy" and the psychological implications it would have for an economy already staggering under the weight of a severe recession.
He said he also felt an obligation not to saddle President-elect Barack Obama with "a major catastrophe" on his first day in office.
But Bush, at a question and answer session at the American Enterprise Institute, said he was concerned about "putting good money after bad."
Perino said Chrysler's announcement Wednesday that it would shut down production for at least a month was one factor driving the White House deliberations. The car companies typically close for a couple of weeks over the year-end holidays, but Chrysler's decision to close for a month or more because of plunging sales was seen as ominous.
Negotiations involving the White House, Treasury Department, General Motors and Chrysler on an emergency loan package of more than $14 billion have been going on for days. Legislation on a rescue plan for Detroit stalled last week in the Senate, essentially leaving it up to the administration to decide what to do.
Some analysts have warned that Americans might be leery of buying cars from any company that was operating in bankruptcy. But other studies have shown that consumers would be assured if the companies received federal assistance, even if they end up in bankruptcy protection.
Perino took issue with arguments advanced by some conservatives that the car companies, which have been widely criticized for poor management decisions over several decades, should be allowed to collapse.
"Just to step back for a minute, if you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option," Perino said.
"In a strong economy, we would probably come to that conclusion as well. But we don't have a strong economy today. We're in the middle of a recession, and we have continued credit and financial-market issues that we're trying to work through."
By David Stout and Micheline Maynard
Thursday, December 18, 2008
WASHINGTON: The White House said Thursday that an "orderly" bankruptcy was one option being considered to try to rescue General Motors and Chrysler, which are seeking billions of dollars to avoid a shutdown.
President George W. Bush's spokeswoman, Dana Perino, confirmed growing speculation within legal circles that the president and Treasury Secretary Henry Paulson Jr. were considering the step as part of a rescue package for the automobile industry.
The action would be unusual and would require concessions by the United Automobile Workers, suppliers, investment banks, the federal pension board, bondholders and other stakeholders in the two auto companies.
Ford Motor, which does not face an urgent need for capital, is not likely to be part of any rescue package.
Under one possibility that has been discussed, the government would give GM and Chrysler enough financing to operate for several months. Then a government-selected overseer would bring together company executives and other representatives to map out steps that would be taken once the two companies file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.
"It's not going to be easy, it's not going to be pleasant, or palatable, but it's the only solution that makes the least bit of sense," said Hugh Ray, head of the bankruptcy practice at Andrews and Kurth, a Houston law firm, who has taken part in many major bankruptcy cases.
Major banks would provide debtor-in-possession financing for the companies to operate while under bankruptcy, with U.S. government funds as security.
"Disorderly collapse would be something very chaotic that is a shock to a system," Perino said Thursday at a news briefing. "There's an orderly way to do bankruptcies that provides for more of a soft landing. I think that's what we would be talking about. That would be one of the options."
Perino quickly added that no final decision had been made. She said she could not be definite about the timing of a White House announcement, but that administration officials wrestling with the crisis were "nearing conclusion" of their deliberations.
"Any scenario that comes forward after this decision-making process, all the stakeholders are going to have to make tough decisions," Perino said.
Bush said Thursday that he was "worried about a disorderly bankruptcy" and the psychological implications it would have for an economy already staggering under the weight of a severe recession.
He said he also felt an obligation not to saddle President-elect Barack Obama with "a major catastrophe" on his first day in office.
But Bush, at a question and answer session at the American Enterprise Institute, said he was concerned about "putting good money after bad."
Perino said Chrysler's announcement Wednesday that it would shut down production for at least a month was one factor driving the White House deliberations. The car companies typically close for a couple of weeks over the year-end holidays, but Chrysler's decision to close for a month or more because of plunging sales was seen as ominous.
Negotiations involving the White House, Treasury Department, General Motors and Chrysler on an emergency loan package of more than $14 billion have been going on for days. Legislation on a rescue plan for Detroit stalled last week in the Senate, essentially leaving it up to the administration to decide what to do.
Some analysts have warned that Americans might be leery of buying cars from any company that was operating in bankruptcy. But other studies have shown that consumers would be assured if the companies received federal assistance, even if they end up in bankruptcy protection.
Perino took issue with arguments advanced by some conservatives that the car companies, which have been widely criticized for poor management decisions over several decades, should be allowed to collapse.
"Just to step back for a minute, if you thought that our economy today could handle the collapse of the American auto industry, then you might come to the conclusion that doing nothing was an option," Perino said.
"In a strong economy, we would probably come to that conclusion as well. But we don't have a strong economy today. We're in the middle of a recession, and we have continued credit and financial-market issues that we're trying to work through."
*********************
FedEx cutting expenses as economy worsens
ECB takes new step to free bank lending
South Korea earmarks $15 billion to encourage bank lending
In 2nd try, Australian bank raises $1.4 billion
ECB takes new step to free bank lending
South Korea earmarks $15 billion to encourage bank lending
In 2nd try, Australian bank raises $1.4 billion
*********************
Madoff scandal shaking real estate industry
By Christine Haughney
Thursday, December 18, 2008
Almost no segment of New York City's real estate industry was spared in the Madoff scandal, which may be history's largest Ponzi scheme: commercial brokers large and small, little-known developers and prominent families all lost money to Bernard Madoff, industry executives say.
The outsize impact on the industry may have resulted largely because Madoff (pronounced MAY-doff) managed his funds much the way that real estate leaders have operated successfully for decades: He provided little information and demanded a lot of trust.
"You have a lot of wealthy people who made a lot of money on handshakes," said Mark Weiss, a commercial real estate broker at Newmark Knight Frank, where several brokers had invested heavily with Madoff. There was "something about this person, pedigree and reputation that inspired trust," he said.
Across the city, industry executives said deals had been scuttled or jeopardized because of the scandal. Residential brokers are taking calls from Madoff investors who have had to put their apartments on the market. Many developers had pledged their investments with Madoff as collateral for projects, and are now worried that their banks will call in their loans.
"The level of devastation, both financial and on a human level, is astounding," said Robert Ivanhoe, a lawyer who is representing 10 developers and investors who lost $5 million to $50 million each with Madoff.
Indeed, at an industry fund-raiser at the Grand Hyatt hotel in Manhattan last weekend, much of the chatter over sushi and crudités was about money feared lost with Madoff, according to people who attended. And a Manhattan psychotherapist who counsels real estate leaders and bankers said most of the patients he has seen this week have close friends and relatives who lost money with Madoff.
The victims include executives at the global commercial brokerage CB Richard Ellis, most prominently Stephen Siegel, a major Bronx landlord who is chairman of worldwide operations at the brokerage and whose wife, Wendy, helped organize the fund-raising dinner on Saturday.
Brian Waterman, a principal at Newmark, also invested with Madoff. So did the Rechler family, which has been a major owner of office buildings in the region. Scott Rechler, the head of RexCorp, one of the family's largest firms, called the family's exposure "limited."
Jerry Reisman, a lawyer based in Garden City, New York, said he was representing six commercial real estate investors and developers in the area who lost a total of $150 million to Madoff. They met Madoff through contacts at country clubs in the tristate area, he said.
"They knew him from golfing in the Hamptons. They knew him from the locker rooms," Reisman said. "He was considered a wizard."
Reisman said his clients were especially concerned because they counted on Madoff investments to complete some of their real estate projects, pledging their investments as collateral for projects. Those developers fear that when their banks realize that their investments with Madoff have disappeared, they will demand new collateral from other sources, Reisman said.
Finding those alternative lenders will be difficult given the financial crisis — and given that many other real estate investors have been hurt by the Madoff case.
"Many of these developers, their resources are all with Madoff," Reisman said.
There are widespread concerns that some developers will have trouble completing projects currently under construction. Edward Blumenfeld, who runs Blumenfeld Development Group, had invested heavily with Madoff and considered him a friend. Gary Lewi, a spokesman for Blumenfeld, said he still planned to complete a shopping complex that is to include a Target and a Costco, as well as several other projects where construction is "in the ground."
Beyond that, though, Blumenfeld is uncertain of what his development plans hold. His friendship with Madoff is even more uncertain, Lewi said.
"Any long-term plans are being reviewed as we conduct a far larger analysis of this scandal and the impact it could have on us and the development community as a whole," Lewi said. "Mr. Blumenfeld was friend to a man who apparently didn't exist."
The Wilpon family, the major owners of the Mets, has acknowledged investing millions with Madoff. The family controls a real estate firm, Sterling Equities, whose Web site says it owns 3,000 residential units and 600,000 square feet of office space. It is unclear whether the firm's real estate holdings are affected by the Madoff investments.
"We are shocked by recent events and, like all investors, will continue to monitor the situation," said Richard Auletta, a spokesman for Sterling.
Other real estate developers are finding that their charitable giving has been wiped out by Madoff. Leonard Litwin, one of the city's largest apartment landlords and head of Glenwood Management, had nearly all of his charitable foundation's investments managed by Madoff.
Gary Jacob, executive vice president of Glenwood, said Litwin had never met Madoff but had invested with him on the advice of a friend. The Litwin Foundation had donated money to research for cancer and Alzheimer's disease and charities, many of them supported by the real estate industry.
"It would have no impact to us as a real estate company," Jacob said. "But it affects the charitable giving."
Some members of the real estate industry are receiving the news with a mix of schadenfreude and sadness for their peers. Jeffrey Gural, chairman of Newmark Knight Frank, the brokerage firm, said Madoff had turned his family down as investors about eight years ago because they would not invest at least $20 million. For years, he said, colleagues introduced to Madoff through relatives or country club friends had sung his praises.
"People used to brag how they were getting these great returns when everybody else was struggling," he said. "They thought Bernie Madoff was a genius, and anybody who didn't give them their money was a fool."
The impact is already spreading to the residential real estate business. Brad Friedman, a lawyer representing about 100 investors primarily in New York and Florida, said several clients have already said they plan to put their apartments on the market. They depended on their Madoff investments to pay their mortgages and co-op fees.
"With that source of money frozen, they've got no cash," Friedman said. "They can't pay the electric bill. They can't pay the mortgage."
Other buyers have already backed out of deals because they had invested with Madoff and can no longer finance their purchases. Michele Kleier, a prominent Upper East Side broker, had buyers pull out of purchases on two $2 million apartments because they had lost money to Madoff. The first buyer put in an offer at 3 p.m. last Thursday, the day of Madoff's arrest, only to withdraw it by 5:30 p.m.
The second set of buyers had visited an apartment three times, requested the financial information about the co-op and had the broker notify Kleier that they would be making an offer on Monday morning. On Monday, she learned that the buyers had backed out because their money was tied up with Madoff funds.
"It's now two deals in the last four days," Kleier said. "It's amazing."
Kenneth Mueller, a Manhattan psychotherapist who counsels many real estate and financial executives, said those who lost money to Madoff called his indictment "the nail in the coffin for the commercial real estate industry," which had already been hurt by the recession.
Mueller said many patients were re-evaluating whether they can trust their business partners after Madoff's betrayal.
"Madoff was considered a member of the family," he said.
By Christine Haughney
Thursday, December 18, 2008
Almost no segment of New York City's real estate industry was spared in the Madoff scandal, which may be history's largest Ponzi scheme: commercial brokers large and small, little-known developers and prominent families all lost money to Bernard Madoff, industry executives say.
The outsize impact on the industry may have resulted largely because Madoff (pronounced MAY-doff) managed his funds much the way that real estate leaders have operated successfully for decades: He provided little information and demanded a lot of trust.
"You have a lot of wealthy people who made a lot of money on handshakes," said Mark Weiss, a commercial real estate broker at Newmark Knight Frank, where several brokers had invested heavily with Madoff. There was "something about this person, pedigree and reputation that inspired trust," he said.
Across the city, industry executives said deals had been scuttled or jeopardized because of the scandal. Residential brokers are taking calls from Madoff investors who have had to put their apartments on the market. Many developers had pledged their investments with Madoff as collateral for projects, and are now worried that their banks will call in their loans.
"The level of devastation, both financial and on a human level, is astounding," said Robert Ivanhoe, a lawyer who is representing 10 developers and investors who lost $5 million to $50 million each with Madoff.
Indeed, at an industry fund-raiser at the Grand Hyatt hotel in Manhattan last weekend, much of the chatter over sushi and crudités was about money feared lost with Madoff, according to people who attended. And a Manhattan psychotherapist who counsels real estate leaders and bankers said most of the patients he has seen this week have close friends and relatives who lost money with Madoff.
The victims include executives at the global commercial brokerage CB Richard Ellis, most prominently Stephen Siegel, a major Bronx landlord who is chairman of worldwide operations at the brokerage and whose wife, Wendy, helped organize the fund-raising dinner on Saturday.
Brian Waterman, a principal at Newmark, also invested with Madoff. So did the Rechler family, which has been a major owner of office buildings in the region. Scott Rechler, the head of RexCorp, one of the family's largest firms, called the family's exposure "limited."
Jerry Reisman, a lawyer based in Garden City, New York, said he was representing six commercial real estate investors and developers in the area who lost a total of $150 million to Madoff. They met Madoff through contacts at country clubs in the tristate area, he said.
"They knew him from golfing in the Hamptons. They knew him from the locker rooms," Reisman said. "He was considered a wizard."
Reisman said his clients were especially concerned because they counted on Madoff investments to complete some of their real estate projects, pledging their investments as collateral for projects. Those developers fear that when their banks realize that their investments with Madoff have disappeared, they will demand new collateral from other sources, Reisman said.
Finding those alternative lenders will be difficult given the financial crisis — and given that many other real estate investors have been hurt by the Madoff case.
"Many of these developers, their resources are all with Madoff," Reisman said.
There are widespread concerns that some developers will have trouble completing projects currently under construction. Edward Blumenfeld, who runs Blumenfeld Development Group, had invested heavily with Madoff and considered him a friend. Gary Lewi, a spokesman for Blumenfeld, said he still planned to complete a shopping complex that is to include a Target and a Costco, as well as several other projects where construction is "in the ground."
Beyond that, though, Blumenfeld is uncertain of what his development plans hold. His friendship with Madoff is even more uncertain, Lewi said.
"Any long-term plans are being reviewed as we conduct a far larger analysis of this scandal and the impact it could have on us and the development community as a whole," Lewi said. "Mr. Blumenfeld was friend to a man who apparently didn't exist."
The Wilpon family, the major owners of the Mets, has acknowledged investing millions with Madoff. The family controls a real estate firm, Sterling Equities, whose Web site says it owns 3,000 residential units and 600,000 square feet of office space. It is unclear whether the firm's real estate holdings are affected by the Madoff investments.
"We are shocked by recent events and, like all investors, will continue to monitor the situation," said Richard Auletta, a spokesman for Sterling.
Other real estate developers are finding that their charitable giving has been wiped out by Madoff. Leonard Litwin, one of the city's largest apartment landlords and head of Glenwood Management, had nearly all of his charitable foundation's investments managed by Madoff.
Gary Jacob, executive vice president of Glenwood, said Litwin had never met Madoff but had invested with him on the advice of a friend. The Litwin Foundation had donated money to research for cancer and Alzheimer's disease and charities, many of them supported by the real estate industry.
"It would have no impact to us as a real estate company," Jacob said. "But it affects the charitable giving."
Some members of the real estate industry are receiving the news with a mix of schadenfreude and sadness for their peers. Jeffrey Gural, chairman of Newmark Knight Frank, the brokerage firm, said Madoff had turned his family down as investors about eight years ago because they would not invest at least $20 million. For years, he said, colleagues introduced to Madoff through relatives or country club friends had sung his praises.
"People used to brag how they were getting these great returns when everybody else was struggling," he said. "They thought Bernie Madoff was a genius, and anybody who didn't give them their money was a fool."
The impact is already spreading to the residential real estate business. Brad Friedman, a lawyer representing about 100 investors primarily in New York and Florida, said several clients have already said they plan to put their apartments on the market. They depended on their Madoff investments to pay their mortgages and co-op fees.
"With that source of money frozen, they've got no cash," Friedman said. "They can't pay the electric bill. They can't pay the mortgage."
Other buyers have already backed out of deals because they had invested with Madoff and can no longer finance their purchases. Michele Kleier, a prominent Upper East Side broker, had buyers pull out of purchases on two $2 million apartments because they had lost money to Madoff. The first buyer put in an offer at 3 p.m. last Thursday, the day of Madoff's arrest, only to withdraw it by 5:30 p.m.
The second set of buyers had visited an apartment three times, requested the financial information about the co-op and had the broker notify Kleier that they would be making an offer on Monday morning. On Monday, she learned that the buyers had backed out because their money was tied up with Madoff funds.
"It's now two deals in the last four days," Kleier said. "It's amazing."
Kenneth Mueller, a Manhattan psychotherapist who counsels many real estate and financial executives, said those who lost money to Madoff called his indictment "the nail in the coffin for the commercial real estate industry," which had already been hurt by the recession.
Mueller said many patients were re-evaluating whether they can trust their business partners after Madoff's betrayal.
"Madoff was considered a member of the family," he said.
********************
Madoff's bail conditions are eased
By Alex Berenson
Thursday, December 18, 2008
NEW YORK: Bernard Madoff, the New York financier who the authorities say has confessed to a $50 billion Ponzi scheme, will not be going to jail even though he failed to meet the original terms of his $10 million bail agreement.
U.S. government prosecutors said they had modified the terms of Madoff's agreement so that he would not need to find four people to co-sign his bond. Madoff was unable to meet that condition, prosecutors said. Even his sons, Andrew and Mark, were apparently unwilling to help. A lawyer for the sons said they were unaware of the scheme and were cooperating with the authorities.
Instead, Madoff has agreed to a nightly curfew, and his wife, Ruth, will surrender her passport, according to a filing in U.S. District Court on Wednesday. Madoff has already given up his passport. He must remain at his apartment in Manhattan from 7 p.m. to 9 a.m.
During the day, he will still be allowed to travel throughout Connecticut and southern New York. Previously, he had had no restrictions on his travel in those areas, allowing him to sleep at his oceanfront estate in Montauk, on Long Island, if he chose.
When he was arrested last week, Madoff estimated that investors had lost as much as $50 billion in the fraud. He has said the business was a Ponzi scheme, a type of fraud in which early investors are paid off with money from later victims, until no more money can be raised and the scheme collapses.
Even as Madoff's sphere of liberty shrank slightly, new details about his wealth emerged Wednesday. Besides a boat in Florida, he owned a yacht that he kept in the south of France and was a regular at the Hôtel du Cap-Eden-Roc in Antibes, near Nice, where suites rent for as much as €5,000, or more than $7,000, a night, according to a person who had invested with him and had seen him at the hotel; the person asked to remain anonymous because he had lost money.
BLM Air Charter, a company registered to the same address as Madoff's securities firm, owned a share of a Cessna business jet, according to U.S. Federal Aviation Administration records. The plane, a Citation X, is a high-performance business jet, capable of flying across the Atlantic at 700 miles, or 1,100 kilometers, an hour. BLM is also listed as the co-owner of a second, smaller jet, which regularly traveled to Florida, the Bahamas and the Caribbean.
Prosecutors have been criticized for allowing Madoff relatively lenient bail terms, given his lifestyle, the scope of his alleged fraud and the fact that some of his victims say they have lost everything and face destitution.
Charities, individual investors, universities, hedge funds and banks have already reported losses of more than $20 billion in the case.
Marc Litt, the assistant U.S. attorney who is overseeing the case, did not return a call for comment on the bail agreement. A spokeswoman for the U.S. attorney's office in Manhattan declined to comment.
Ira Lee Sorkin, a lawyer for Madoff, said he could not comment on the new agreement. He said Ruth Madoff's surrender of her passport was "standard operating procedure."
The authorities stepped up their search Wednesday for other assets belonging to Madoff. FBI agents and investigators from the U.S. Securities and Exchange Commission combed through the offices of his firm, Bernard L. Madoff Investment Securities.
Late in the day, officials were seen removing boxes of files from the offices. In a statement Tuesday, the SEC said Madoff had kept multiple sets of books, so reconstructing the flow of money might require substantial effort.
Experts on the brokerage industry and money management have said it would be nearly impossible for Madoff to have carried out the fraud, which encompassed thousands of clients and lasted for many years, without substantial help.
They have also questioned why auditors and regulators at the SEC and the Financial Industry Regulatory Authority did not notice that Madoff's firm had far fewer assets in 2007 than the $17 billion he claimed to be managing.
The authorities also would like to determine Madoff's motivation for the fraud, when it began and how much of the stolen money he had spent on himself. The case may spur the FBI's New York office to add more investigators and support staff to handle securities fraud and other white-collar crime.
Government authorities have served a subpoena on the small Rockland County, New York, accounting firm that served as the auditor for Madoff's company, according to a person briefed on the matter. Andrew Lankler, a lawyer for David Friehling, the principal of the firm Friehling & Horowitz, declined to discuss details of the case.
By Alex Berenson
Thursday, December 18, 2008
NEW YORK: Bernard Madoff, the New York financier who the authorities say has confessed to a $50 billion Ponzi scheme, will not be going to jail even though he failed to meet the original terms of his $10 million bail agreement.
U.S. government prosecutors said they had modified the terms of Madoff's agreement so that he would not need to find four people to co-sign his bond. Madoff was unable to meet that condition, prosecutors said. Even his sons, Andrew and Mark, were apparently unwilling to help. A lawyer for the sons said they were unaware of the scheme and were cooperating with the authorities.
Instead, Madoff has agreed to a nightly curfew, and his wife, Ruth, will surrender her passport, according to a filing in U.S. District Court on Wednesday. Madoff has already given up his passport. He must remain at his apartment in Manhattan from 7 p.m. to 9 a.m.
During the day, he will still be allowed to travel throughout Connecticut and southern New York. Previously, he had had no restrictions on his travel in those areas, allowing him to sleep at his oceanfront estate in Montauk, on Long Island, if he chose.
When he was arrested last week, Madoff estimated that investors had lost as much as $50 billion in the fraud. He has said the business was a Ponzi scheme, a type of fraud in which early investors are paid off with money from later victims, until no more money can be raised and the scheme collapses.
Even as Madoff's sphere of liberty shrank slightly, new details about his wealth emerged Wednesday. Besides a boat in Florida, he owned a yacht that he kept in the south of France and was a regular at the Hôtel du Cap-Eden-Roc in Antibes, near Nice, where suites rent for as much as €5,000, or more than $7,000, a night, according to a person who had invested with him and had seen him at the hotel; the person asked to remain anonymous because he had lost money.
BLM Air Charter, a company registered to the same address as Madoff's securities firm, owned a share of a Cessna business jet, according to U.S. Federal Aviation Administration records. The plane, a Citation X, is a high-performance business jet, capable of flying across the Atlantic at 700 miles, or 1,100 kilometers, an hour. BLM is also listed as the co-owner of a second, smaller jet, which regularly traveled to Florida, the Bahamas and the Caribbean.
Prosecutors have been criticized for allowing Madoff relatively lenient bail terms, given his lifestyle, the scope of his alleged fraud and the fact that some of his victims say they have lost everything and face destitution.
Charities, individual investors, universities, hedge funds and banks have already reported losses of more than $20 billion in the case.
Marc Litt, the assistant U.S. attorney who is overseeing the case, did not return a call for comment on the bail agreement. A spokeswoman for the U.S. attorney's office in Manhattan declined to comment.
Ira Lee Sorkin, a lawyer for Madoff, said he could not comment on the new agreement. He said Ruth Madoff's surrender of her passport was "standard operating procedure."
The authorities stepped up their search Wednesday for other assets belonging to Madoff. FBI agents and investigators from the U.S. Securities and Exchange Commission combed through the offices of his firm, Bernard L. Madoff Investment Securities.
Late in the day, officials were seen removing boxes of files from the offices. In a statement Tuesday, the SEC said Madoff had kept multiple sets of books, so reconstructing the flow of money might require substantial effort.
Experts on the brokerage industry and money management have said it would be nearly impossible for Madoff to have carried out the fraud, which encompassed thousands of clients and lasted for many years, without substantial help.
They have also questioned why auditors and regulators at the SEC and the Financial Industry Regulatory Authority did not notice that Madoff's firm had far fewer assets in 2007 than the $17 billion he claimed to be managing.
The authorities also would like to determine Madoff's motivation for the fraud, when it began and how much of the stolen money he had spent on himself. The case may spur the FBI's New York office to add more investigators and support staff to handle securities fraud and other white-collar crime.
Government authorities have served a subpoena on the small Rockland County, New York, accounting firm that served as the auditor for Madoff's company, according to a person briefed on the matter. Andrew Lankler, a lawyer for David Friehling, the principal of the firm Friehling & Horowitz, declined to discuss details of the case.
***************
Mafia suspect found hanged in prison
By Elisabetta Povoledo
Thursday, December 18, 2008
ROME: A suspect arrested in a series of high-profile raids on leading Mafia families was found hanged in Palermo's Pagliarelli prison hours after his arrest, Italian officials said Wednesday.
The raids in Palermo on Tuesday were staged in an attempt to stop the city's crime bosses from reorganizing after several years in which they appeared to lack leadership, according to the police.
Armed with nearly 100 arrest warrants, more than 1,200 military police officers fanned out through the city and surrounding areas, arresting 89 members of several Mafia families, officials said. The operation — called Perseus, after the mythological hero who beheaded Medusa — was one of the largest against the Mafia in recent years and included the use of helicopters and dog teams.
Dozens of handcuffed suspects were shown in televised news reports being escorted to prison. The police said some suspects remained at large.
Officials on Wednesday identified the dead suspect as Gaetano Lo Presti, 52, and said he hanged himself. Prosecutors had accused Lo Presti of controlling the Mafia families in a Palermo neighborhood, and a spokesman said he was "very important."
The arrests were the culmination of a nine-month investigation by anti-Mafia prosecutors in Palermo. The charges included association with the Mafia, extortion and arms and drug trafficking.
Pietro Grasso, Italy's chief anti-Mafia prosecutor, said evidence from wiretaps and leads from informers in recent months suggested that top organized crime figures from the Palermo area were planning to recreate a council of leaders from the city's crime families that would better coordinate their activities.
The operation on Tuesday "decapitated a ruling organization that wanted to give strategic direction to the Mafia," he said.
A previous council, known as the cupola, was led by Salvatore Riina, known as Toto, who was considered the "boss of bosses" until his arrest in 1993. The group, which covered all of Sicily, had adopted a strategy of attacking the authorities, the investigators said, leading to the killings, in quick succession, of the top anti-Mafia prosecutors Giovanni Falcone and Paolo Borsellino in 1992.
"We don't know what they were planning" this time around, Grasso said. But investigators suspected it would be big.
The crackdown was the most important anti-Mafia operation since 2006, when several top bosses, including Bernardo Provenzano, who took over from Riina, were arrested in Sicily over a period of several months. "If that operation brought the Mafia to its knees, Operation Perseus has ensured that it won't get up again," Grasso said.
The action was applauded by Giuseppe Lumia, an opposition senator who is a member of the parliamentary anti-Mafia commission. "For once, we acted before Cosa Nostra could put their devastating plans into effect," he said.
But Lumia said Italy still needed to do more to shut down businesses operated by the Mafia and to cut the criminals' ties with politicians who protect them.
"That's where the real battle is," he said.
By Elisabetta Povoledo
Thursday, December 18, 2008
ROME: A suspect arrested in a series of high-profile raids on leading Mafia families was found hanged in Palermo's Pagliarelli prison hours after his arrest, Italian officials said Wednesday.
The raids in Palermo on Tuesday were staged in an attempt to stop the city's crime bosses from reorganizing after several years in which they appeared to lack leadership, according to the police.
Armed with nearly 100 arrest warrants, more than 1,200 military police officers fanned out through the city and surrounding areas, arresting 89 members of several Mafia families, officials said. The operation — called Perseus, after the mythological hero who beheaded Medusa — was one of the largest against the Mafia in recent years and included the use of helicopters and dog teams.
Dozens of handcuffed suspects were shown in televised news reports being escorted to prison. The police said some suspects remained at large.
Officials on Wednesday identified the dead suspect as Gaetano Lo Presti, 52, and said he hanged himself. Prosecutors had accused Lo Presti of controlling the Mafia families in a Palermo neighborhood, and a spokesman said he was "very important."
The arrests were the culmination of a nine-month investigation by anti-Mafia prosecutors in Palermo. The charges included association with the Mafia, extortion and arms and drug trafficking.
Pietro Grasso, Italy's chief anti-Mafia prosecutor, said evidence from wiretaps and leads from informers in recent months suggested that top organized crime figures from the Palermo area were planning to recreate a council of leaders from the city's crime families that would better coordinate their activities.
The operation on Tuesday "decapitated a ruling organization that wanted to give strategic direction to the Mafia," he said.
A previous council, known as the cupola, was led by Salvatore Riina, known as Toto, who was considered the "boss of bosses" until his arrest in 1993. The group, which covered all of Sicily, had adopted a strategy of attacking the authorities, the investigators said, leading to the killings, in quick succession, of the top anti-Mafia prosecutors Giovanni Falcone and Paolo Borsellino in 1992.
"We don't know what they were planning" this time around, Grasso said. But investigators suspected it would be big.
The crackdown was the most important anti-Mafia operation since 2006, when several top bosses, including Bernardo Provenzano, who took over from Riina, were arrested in Sicily over a period of several months. "If that operation brought the Mafia to its knees, Operation Perseus has ensured that it won't get up again," Grasso said.
The action was applauded by Giuseppe Lumia, an opposition senator who is a member of the parliamentary anti-Mafia commission. "For once, we acted before Cosa Nostra could put their devastating plans into effect," he said.
But Lumia said Italy still needed to do more to shut down businesses operated by the Mafia and to cut the criminals' ties with politicians who protect them.
"That's where the real battle is," he said.
IW: In a year of following the news, I haven't posted one news picture. Until now. If you have read the above and looked at the face of Mr. Madoff - who's not in jail for stealing $50 BILLION - and can explain to me why the entire goddam world isn't rioting, please let me know.
********************
EU investigates Hitachi
Bloomberg News
Thursday, December 18, 2008
BRUSSELS: Hitachi, a Japanese maker of nuclear reactors, household appliances and hard-disk drives, said Thursday that it was being investigated by the European Union for possible price fixing of power transformers.
The company, based in Tokyo, has received notice of the charges, known as a statement of objection, a spokesman, Takeshi Kawakami, said by telephone. He declined to comment further.
European Union regulators this month accused ABB, Areva, Toshiba and other companies of possible price fixing in the market for power transformers. Under European Union law, companies can be fined as much as 10 percent of annual sales for breaking antitrust rules.
Hitachi gets about 32 percent of its revenue from the power and industrial systems business, which includes transformers, high-speed trains and construction equipment.
Transformers are important components in electricity transmission, reducing or increasing the voltage in an electrical circuit.
Bloomberg News
Thursday, December 18, 2008
BRUSSELS: Hitachi, a Japanese maker of nuclear reactors, household appliances and hard-disk drives, said Thursday that it was being investigated by the European Union for possible price fixing of power transformers.
The company, based in Tokyo, has received notice of the charges, known as a statement of objection, a spokesman, Takeshi Kawakami, said by telephone. He declined to comment further.
European Union regulators this month accused ABB, Areva, Toshiba and other companies of possible price fixing in the market for power transformers. Under European Union law, companies can be fined as much as 10 percent of annual sales for breaking antitrust rules.
Hitachi gets about 32 percent of its revenue from the power and industrial systems business, which includes transformers, high-speed trains and construction equipment.
Transformers are important components in electricity transmission, reducing or increasing the voltage in an electrical circuit.
**********************
Greek rioters go on holiday season spree in Athens
The Associated Press
Thursday, December 18, 2008
ATHENS: Riot police clashed with rock-throwing demonstrators Thursday in central Athens, sending Christmas shoppers and customers in cafés running for cover. Frightened parents scooped up their children from a Christmas carousel in the city's main square and fled.
Some protesters broke away from a peaceful rally and threw rocks and firebombs at police and buildings near Parliament, overturned a car and set fire to trash cans. They also splashed the police with red paint. The police responded with tear gas and flash grenades.
Firefighters and the police also rushed to stop protesters from burning down the city's main Christmas tree, which was replaced this week after the first was torched in riots. Families abandoned the carousel in central Syntagma Square after happily going on rides all morning.
The clashes Thursday were the latest outbreak of violence after the fatal shooting of 15-year-old Alexandros Grigoropoulos on Dec. 6. Protests over the boy's death at police hands and the increasing economic hardship in Greece have led to the worst rioting the country has seen in decades.
Hundreds of businesses have been smashed, burned or looted and gangs of youths fought running battles with riot police firing tear gas every night for a week. The riots have been fed by dissatisfaction with Greece's increasingly unpopular conservative government.
More than 200 youths took part in running battles with the police Thursday in Athens. They also set fire to a private security van and set up a burning barricade after smashing a café storefront, and dragging out and setting fire to its furniture. Downtown streets were littered with smashed paving stones and marble blocks.
Shop owners who saw their businesses smashed and looted during the riots last week now say they are having trouble making ends meet because many customers are staying away from the city center.
"Who's going to pay all these bills? I'm taking in €200 a day," asked Spyros Papaspyrou, the owner of a shoe shop in central Athens. "Do they want me to stand outside my shop with a shotgun? I can't understand why they can't arrest 80 people in the center of Athens."
The Greek prime minister, Costas Karamanlis, under fire for his hands off reaction to the riots, announced measures to save tourism, one of the main reasons for a slowing economy.
"We are determined to do everything possible so that all we have achieved through sacrifices is not wasted," he said, announcing tax breaks and incentives for the tourism sector.
Before the violence broke out, about 7,000 students and other protesters marched in a rally, chanting, "We are the law, we'll stay on the streets."
As they passed, fearful shop owners shuttered their store fronts. Some demonstrators painted white crime-scene-style body outlines on the streets.
Earlier Thursday, some 1,000 demonstrators joined a peaceful march, backed by the Communist Party, through the city. About 300 people also marched in Greece's second largest city, Thessaloniki.
While sporadic rallies have been held in Europe in support of the Greek protesters, none were reported Thursday.
Major labor union staged work stoppages Thursday to protest the teenager's shooting and the conservative government's economic policies.
Air traffic controllers walked off the job for three hours. State hospitals were operating with skeleton staff in a 24-hour strike.
The government appealed for calm after another teenager was shot in the hand late Wednesday near his school. It was unclear who shot him.
A police spokesman, Panayiotis Stathis, said no officers were in the area at the time of the attack, and Interior Minister Prokopis Pavlopoulos promised a thorough investigation. The boy underwent surgery Thursday.
The policeman who shot Grigoropoulos has been charged with murder and jailed pending trial, while his partner has been charged as an accomplice. The officer said he fired a warning shot in self-defense against a group of youths. A ballistic report said Thursday that the bullet ricocheted before killing the teenager but further investigation was needed to decide whether the policeman aimed or fired in the air.
The Associated Press
Thursday, December 18, 2008
ATHENS: Riot police clashed with rock-throwing demonstrators Thursday in central Athens, sending Christmas shoppers and customers in cafés running for cover. Frightened parents scooped up their children from a Christmas carousel in the city's main square and fled.
Some protesters broke away from a peaceful rally and threw rocks and firebombs at police and buildings near Parliament, overturned a car and set fire to trash cans. They also splashed the police with red paint. The police responded with tear gas and flash grenades.
Firefighters and the police also rushed to stop protesters from burning down the city's main Christmas tree, which was replaced this week after the first was torched in riots. Families abandoned the carousel in central Syntagma Square after happily going on rides all morning.
The clashes Thursday were the latest outbreak of violence after the fatal shooting of 15-year-old Alexandros Grigoropoulos on Dec. 6. Protests over the boy's death at police hands and the increasing economic hardship in Greece have led to the worst rioting the country has seen in decades.
Hundreds of businesses have been smashed, burned or looted and gangs of youths fought running battles with riot police firing tear gas every night for a week. The riots have been fed by dissatisfaction with Greece's increasingly unpopular conservative government.
More than 200 youths took part in running battles with the police Thursday in Athens. They also set fire to a private security van and set up a burning barricade after smashing a café storefront, and dragging out and setting fire to its furniture. Downtown streets were littered with smashed paving stones and marble blocks.
Shop owners who saw their businesses smashed and looted during the riots last week now say they are having trouble making ends meet because many customers are staying away from the city center.
"Who's going to pay all these bills? I'm taking in €200 a day," asked Spyros Papaspyrou, the owner of a shoe shop in central Athens. "Do they want me to stand outside my shop with a shotgun? I can't understand why they can't arrest 80 people in the center of Athens."
The Greek prime minister, Costas Karamanlis, under fire for his hands off reaction to the riots, announced measures to save tourism, one of the main reasons for a slowing economy.
"We are determined to do everything possible so that all we have achieved through sacrifices is not wasted," he said, announcing tax breaks and incentives for the tourism sector.
Before the violence broke out, about 7,000 students and other protesters marched in a rally, chanting, "We are the law, we'll stay on the streets."
As they passed, fearful shop owners shuttered their store fronts. Some demonstrators painted white crime-scene-style body outlines on the streets.
Earlier Thursday, some 1,000 demonstrators joined a peaceful march, backed by the Communist Party, through the city. About 300 people also marched in Greece's second largest city, Thessaloniki.
While sporadic rallies have been held in Europe in support of the Greek protesters, none were reported Thursday.
Major labor union staged work stoppages Thursday to protest the teenager's shooting and the conservative government's economic policies.
Air traffic controllers walked off the job for three hours. State hospitals were operating with skeleton staff in a 24-hour strike.
The government appealed for calm after another teenager was shot in the hand late Wednesday near his school. It was unclear who shot him.
A police spokesman, Panayiotis Stathis, said no officers were in the area at the time of the attack, and Interior Minister Prokopis Pavlopoulos promised a thorough investigation. The boy underwent surgery Thursday.
The policeman who shot Grigoropoulos has been charged with murder and jailed pending trial, while his partner has been charged as an accomplice. The officer said he fired a warning shot in self-defense against a group of youths. A ballistic report said Thursday that the bullet ricocheted before killing the teenager but further investigation was needed to decide whether the policeman aimed or fired in the air.
******************
Myanmar blames "extravagant" Americans for crisis
Reuters
Thursday, December 18, 2008
YANGON: Military-ruled Myanmar, one of the most isolated countries in the world, has largely escaped the global financial upheaval triggered by "extravagant" Americans, state media said on Thursday.
The former Burma relied on few imports and its main trading partners, India and China, were suffering less than others in the current economic downturn, a commentary in several state-owned newspapers said.
"I dare say that our country does not need to worry about the global financial crisis," the article said.
Newspapers are tightly controlled by the military, which has reduced a once-promising economy and country to an impoverished international pariah after more than four decades of rule.
Noting that the financial crisis had been spawned in the United States, the article said: "Americans are a people who are extravagant and do not hesitate to buy an elephant if it is available on credit."
Some independent observers were less optimistic about Myanmar's ability to sail through the crisis.
Despite abundant natural gas, minerals and timber coveted by China, India and other regional neighbours, Myanmar is among the world's poorest countries due mainly to the failed policies of a reclusive regime.
"Our economy is already in very bad shape. So it couldn't be worse," said a retired professor, noting that the main city, Yangon, experienced 20-hour blackouts each day.
Returning migrant workers had little hope of finding work after losing their jobs in neighbouring countries such as Thailand, where factories are closing or cutting production due to the global economic slowdown.
A member of the Federation of the Chambers of Commerce and Industry said export industries were already feeling the pain of slowing demand.
"There has been a steep drop in orders for some major export items such as garments and rubber," the businessman said.
The global economic downturn is a further blow to a tourism industry struggling to recover in the aftermath of cyclone Nargis in May, and the junta's bloody crackdown on pro-democracy protests in 2007.
In the ancient capital of Bagan, home to 1,000 year-old temples on the banks of the Irrawaddy River, the lack of tourists in the traditional peak season is threatening many with ruin.
"The lacquerware industry depends on tourists, but it is now facing a critical condition," one hotel operator said, adding that many artists were abandoning the centuries-old industry.
(Reporting by Aung Hla Tun; Writing by Alan Raybould; Editing by Darren Schuettler and Dean Yates)
Reuters
Thursday, December 18, 2008
YANGON: Military-ruled Myanmar, one of the most isolated countries in the world, has largely escaped the global financial upheaval triggered by "extravagant" Americans, state media said on Thursday.
The former Burma relied on few imports and its main trading partners, India and China, were suffering less than others in the current economic downturn, a commentary in several state-owned newspapers said.
"I dare say that our country does not need to worry about the global financial crisis," the article said.
Newspapers are tightly controlled by the military, which has reduced a once-promising economy and country to an impoverished international pariah after more than four decades of rule.
Noting that the financial crisis had been spawned in the United States, the article said: "Americans are a people who are extravagant and do not hesitate to buy an elephant if it is available on credit."
Some independent observers were less optimistic about Myanmar's ability to sail through the crisis.
Despite abundant natural gas, minerals and timber coveted by China, India and other regional neighbours, Myanmar is among the world's poorest countries due mainly to the failed policies of a reclusive regime.
"Our economy is already in very bad shape. So it couldn't be worse," said a retired professor, noting that the main city, Yangon, experienced 20-hour blackouts each day.
Returning migrant workers had little hope of finding work after losing their jobs in neighbouring countries such as Thailand, where factories are closing or cutting production due to the global economic slowdown.
A member of the Federation of the Chambers of Commerce and Industry said export industries were already feeling the pain of slowing demand.
"There has been a steep drop in orders for some major export items such as garments and rubber," the businessman said.
The global economic downturn is a further blow to a tourism industry struggling to recover in the aftermath of cyclone Nargis in May, and the junta's bloody crackdown on pro-democracy protests in 2007.
In the ancient capital of Bagan, home to 1,000 year-old temples on the banks of the Irrawaddy River, the lack of tourists in the traditional peak season is threatening many with ruin.
"The lacquerware industry depends on tourists, but it is now facing a critical condition," one hotel operator said, adding that many artists were abandoning the centuries-old industry.
(Reporting by Aung Hla Tun; Writing by Alan Raybould; Editing by Darren Schuettler and Dean Yates)
******************
Banker's spat with author reveals Russia's rifts
Reuters
Thursday, December 18, 2008
By Gleb Bryanski
A billionaire banker has locked horns with a poverty-stricken left-wing writer in a rare public debate over social division in crisis-hit Russia, revealing growing antagonism in its ostensibly well-controlled society.
The debate, which quickly spread over the internet but has not been reported on state-controlled mainstream television, has evoked memories of pre-1917 Russia where hatred between the ruling class and the poor sparked a Communist revolution.
The row started when Pyotr Aven, the wealthy and well connected CEO of the country's largest privately owned bank Alfa, wrote a damning review of "Sankya," a novel by Zakhar Prilepin, a member of a banned radical political party.
It tells how Sasha Tishin, a disillusioned young Russian from a provincial town, joins a radical party hoping to change the political system by force, and leads an attack on a local administration headquarters.
"Most of what one needs to hate in life, from my point of view, can be found in writer Prilepin's book," Aven wrote in the Russian Pioneer glossy magazine, which targets wealthy educated Russians and has a circulation of 20,000.
The revolutionary views of the book's protagonist, he added, made him "reach for a pistol."
Tishin takes part in violent protests, fights with police, plots killings of officials in neighbouring Latvia, and is subjected to brutal torture by security agents.
"Why, instead of bringing order -- planting a tree, building a house, washing socks or reading a fairytale to a child -- does one need to engage in doing nothing, then after a good booze, taking up a club and smashing everything?" Aven wrote.
After eight years of economic boom, Russia is plunging into economic crisis which is threatening to crush the fragile stability fostered by Vladimir Putin's government with the help of buoyant oil revenues, compliant state media and heavy-handed police.
Little-noticed when it was first published in paperback by niche publisher Ad Marginem two years ago, the book's sales jumped to 35,000 this year. Publication rights have been sold to Poland, France, Serbia, China and Turkey.
GHOST OF POVERTY
Prilepin opposes what he terms the "social Darwinism" which has split Russian society. Despite Russia's oil wealth, about 21 million Russians or 15 percent of the population live below the poverty line of $158 (101 pounds) income per month.
He responded to Aven's comments by saying he had been working hard, selling over 100,000 copies of his books, while raising three children and paying taxes.
"I do not understand what else I should do to be able to buy a flat because we do not fit in the one we have," Prolepin wrote in Ogonyok magazin, which has a circulation of 70,000 and a wider readership than Russian Pioneer.
He said he had been living with his family in a tiny two-room apartment in the industrial city of Nizhny Novgorod, which was the hometown of Maxim Gorky, an early 20th-century writer.
"The ghost of poverty is still lurking in front of me, it has not gone so far away that I cannot sense its sickening smell," wrote Prilepin. He said he and his family had sometimes been forced to eat fried cabbage for months to survive.
Some book reviewers have likened Prilepin to Gorky, who was often called "a thunderbird of the Revolution" for books like "The Mother," written in 1907, about a young factory worker who becomes a revolutionary.
Nizhny Novgorod on the Volga river was renamed after Gorky in Soviet times, but regained its original name after the collapse of the Soviet Union.
"Russia is on the brink of the social revolution and such a revolution is badly needed," a skinny, clean-shaven Prilepin told Reuters in a Moscow cafe. "Russia is now in a turbulent state, now it is all going to start."
LETTER "FROM AN UNKNOWN WORLD"
With Russia's rich-poor divide brought into sharp focus by the oil bonanza, there is widespread hatred of billionaires such as Roman Abramovich, the owner of Chelsea football club, or market reform ideologists like Aven.
Aven worked in Russia's first reformist government in 1991-92, which used "shock therapy" to reform the economy, wiping out the lifetime savings of millions of Russians. He was 29th in Forbes magazine's list of richest Russians this year.
Aven's former colleague in the government Anatoly Chubais, an architect of privatisation, survived an assassination attempt in 2005.
Prilepin served in police special forces, fought in Chechnya, and then worked as a crime reporter before becoming a writer.
"The difference between me and Aven is basic -- in case of a crisis, he and his family can leave this country and watch developments from the outside," Prilepin wrote in the Russian Life magazine, referring to Aven's properties abroad.
Aven, bespectacled and fast-talking, told Reuters the reaction to his book review took him by surprise, but he could understand the resentment.
"It was like a letter from a world which is totally unknown," he said by telephone. "I can understand that reaction perfectly well -- the outrageous behaviour of the rich showing off their wealth."
Putin, first president, then prime minister, and his hand-picked successor Dmitry Medvedev have portrayed Russia as a stable country where the authorities enjoy the full backing of the population. Prilepin's book evokes a different world, which is missing from the mainstream media.
In reality, Putin disbanded or marginalized opposition parties like the banned National Bolshevik Party, which counts Prilepin among its members, or their allies from chess grandmaster Garry Kasparov's Civil Front.
"Despite the financial crisis, there are people able to defend the future," said Aven, justifying his attack on the book. "Moreover, today's rich came from the same slums as Tishin and had to go through you know what," he added, recalling the often violent birth of Russian capitalism.
Political analyst Stanislav Belkovsky said Aven's views were "an ideological manifesto of Russia's ruling elite" and were in line with the general thinking in the Kremlin. "As long as Aven sits in his office, the regime will not change," he said.
(Editing by Michael Stott and Sara Ledwith)
Reuters
Thursday, December 18, 2008
By Gleb Bryanski
A billionaire banker has locked horns with a poverty-stricken left-wing writer in a rare public debate over social division in crisis-hit Russia, revealing growing antagonism in its ostensibly well-controlled society.
The debate, which quickly spread over the internet but has not been reported on state-controlled mainstream television, has evoked memories of pre-1917 Russia where hatred between the ruling class and the poor sparked a Communist revolution.
The row started when Pyotr Aven, the wealthy and well connected CEO of the country's largest privately owned bank Alfa, wrote a damning review of "Sankya," a novel by Zakhar Prilepin, a member of a banned radical political party.
It tells how Sasha Tishin, a disillusioned young Russian from a provincial town, joins a radical party hoping to change the political system by force, and leads an attack on a local administration headquarters.
"Most of what one needs to hate in life, from my point of view, can be found in writer Prilepin's book," Aven wrote in the Russian Pioneer glossy magazine, which targets wealthy educated Russians and has a circulation of 20,000.
The revolutionary views of the book's protagonist, he added, made him "reach for a pistol."
Tishin takes part in violent protests, fights with police, plots killings of officials in neighbouring Latvia, and is subjected to brutal torture by security agents.
"Why, instead of bringing order -- planting a tree, building a house, washing socks or reading a fairytale to a child -- does one need to engage in doing nothing, then after a good booze, taking up a club and smashing everything?" Aven wrote.
After eight years of economic boom, Russia is plunging into economic crisis which is threatening to crush the fragile stability fostered by Vladimir Putin's government with the help of buoyant oil revenues, compliant state media and heavy-handed police.
Little-noticed when it was first published in paperback by niche publisher Ad Marginem two years ago, the book's sales jumped to 35,000 this year. Publication rights have been sold to Poland, France, Serbia, China and Turkey.
GHOST OF POVERTY
Prilepin opposes what he terms the "social Darwinism" which has split Russian society. Despite Russia's oil wealth, about 21 million Russians or 15 percent of the population live below the poverty line of $158 (101 pounds) income per month.
He responded to Aven's comments by saying he had been working hard, selling over 100,000 copies of his books, while raising three children and paying taxes.
"I do not understand what else I should do to be able to buy a flat because we do not fit in the one we have," Prolepin wrote in Ogonyok magazin, which has a circulation of 70,000 and a wider readership than Russian Pioneer.
He said he had been living with his family in a tiny two-room apartment in the industrial city of Nizhny Novgorod, which was the hometown of Maxim Gorky, an early 20th-century writer.
"The ghost of poverty is still lurking in front of me, it has not gone so far away that I cannot sense its sickening smell," wrote Prilepin. He said he and his family had sometimes been forced to eat fried cabbage for months to survive.
Some book reviewers have likened Prilepin to Gorky, who was often called "a thunderbird of the Revolution" for books like "The Mother," written in 1907, about a young factory worker who becomes a revolutionary.
Nizhny Novgorod on the Volga river was renamed after Gorky in Soviet times, but regained its original name after the collapse of the Soviet Union.
"Russia is on the brink of the social revolution and such a revolution is badly needed," a skinny, clean-shaven Prilepin told Reuters in a Moscow cafe. "Russia is now in a turbulent state, now it is all going to start."
LETTER "FROM AN UNKNOWN WORLD"
With Russia's rich-poor divide brought into sharp focus by the oil bonanza, there is widespread hatred of billionaires such as Roman Abramovich, the owner of Chelsea football club, or market reform ideologists like Aven.
Aven worked in Russia's first reformist government in 1991-92, which used "shock therapy" to reform the economy, wiping out the lifetime savings of millions of Russians. He was 29th in Forbes magazine's list of richest Russians this year.
Aven's former colleague in the government Anatoly Chubais, an architect of privatisation, survived an assassination attempt in 2005.
Prilepin served in police special forces, fought in Chechnya, and then worked as a crime reporter before becoming a writer.
"The difference between me and Aven is basic -- in case of a crisis, he and his family can leave this country and watch developments from the outside," Prilepin wrote in the Russian Life magazine, referring to Aven's properties abroad.
Aven, bespectacled and fast-talking, told Reuters the reaction to his book review took him by surprise, but he could understand the resentment.
"It was like a letter from a world which is totally unknown," he said by telephone. "I can understand that reaction perfectly well -- the outrageous behaviour of the rich showing off their wealth."
Putin, first president, then prime minister, and his hand-picked successor Dmitry Medvedev have portrayed Russia as a stable country where the authorities enjoy the full backing of the population. Prilepin's book evokes a different world, which is missing from the mainstream media.
In reality, Putin disbanded or marginalized opposition parties like the banned National Bolshevik Party, which counts Prilepin among its members, or their allies from chess grandmaster Garry Kasparov's Civil Front.
"Despite the financial crisis, there are people able to defend the future," said Aven, justifying his attack on the book. "Moreover, today's rich came from the same slums as Tishin and had to go through you know what," he added, recalling the often violent birth of Russian capitalism.
Political analyst Stanislav Belkovsky said Aven's views were "an ideological manifesto of Russia's ruling elite" and were in line with the general thinking in the Kremlin. "As long as Aven sits in his office, the regime will not change," he said.
(Editing by Michael Stott and Sara Ledwith)
UN court convicts officers over Rwandan genocide
By Meg Bortin
Thursday, December 18, 2008
PARIS: A senior Rwandan military officer charged with being one of the masterminds of the 1994 genocide in Rwanda in which bands of Hutus massacred hundreds of thousands of Tutsis and moderate Hutus, was convicted Thursday by a United Nations court in Tanzania of genocide and sentenced to life in prison.
In a statement, the UN tribunal said that it had sentenced the officer, Colonel Théoneste Bagosora, and his accomplices, two other Rwandan military officers who were also on trial, Major Aloys Ntabakuze and Colonel Anatole Nsengiyumva, to life imprisonment for "genocide, crimes against humanity and war crimes." A fourth co-defendant, General Gratien Kabiligi, was acquitted of all charges against him and the court ordered his release.
Bagosora, 67, was the cabinet director for the Rwandan Defense Ministry at the start of the slaughter by Hutus of 800,000 Tutsis and Hutus in 1994. The three other senior army officers had been on trial with him since 2002 at the International Criminal Tribunal for Rwanda, which is based in Arusha, Tanzania.
The court said that Bagosora had been "the highest authority in the Rwandan Defense Ministry with authority over the military" in the days after the death of President Juvénal Habyarimana on April 6, 1994.
The president, a Hutu, died when his plane was shot down over the airport in Kigali, the Rwandan capital. The death sparked the three-month wave of grisly massacres.
The speed and violence of the genocide was evident in the court's findings.
On April 7, 1994 - the day after the plane attack - Bagosora was responsible for the killing of the Rwandan prime minister, Agathe Uwilingiyimana; the president of the Constitutional Court, Joseph Kavaruganda; and three top opposition figures: Frédéric Nzamurambaho, Landoald Ndasingwa and Faustin Rucogoza, the court ruled.
But the court cleared Bagosora and the others on trial of conspiring to commit genocide before April 7, 1994.
The court said that the prosecution had alleged that Kabiligi, who led the military operations bureau of the army general staff, "participated in the distribution of weapons, meetings to plan the genocide as well as a number of specific crimes, many of which were related to roadblocks in the Kigali area." But the charges were dismissed after he advanced a successful alibi, and "it was also not proven that he had operational authority or that he targeted civilians," the court said.
By Meg Bortin
Thursday, December 18, 2008
PARIS: A senior Rwandan military officer charged with being one of the masterminds of the 1994 genocide in Rwanda in which bands of Hutus massacred hundreds of thousands of Tutsis and moderate Hutus, was convicted Thursday by a United Nations court in Tanzania of genocide and sentenced to life in prison.
In a statement, the UN tribunal said that it had sentenced the officer, Colonel Théoneste Bagosora, and his accomplices, two other Rwandan military officers who were also on trial, Major Aloys Ntabakuze and Colonel Anatole Nsengiyumva, to life imprisonment for "genocide, crimes against humanity and war crimes." A fourth co-defendant, General Gratien Kabiligi, was acquitted of all charges against him and the court ordered his release.
Bagosora, 67, was the cabinet director for the Rwandan Defense Ministry at the start of the slaughter by Hutus of 800,000 Tutsis and Hutus in 1994. The three other senior army officers had been on trial with him since 2002 at the International Criminal Tribunal for Rwanda, which is based in Arusha, Tanzania.
The court said that Bagosora had been "the highest authority in the Rwandan Defense Ministry with authority over the military" in the days after the death of President Juvénal Habyarimana on April 6, 1994.
The president, a Hutu, died when his plane was shot down over the airport in Kigali, the Rwandan capital. The death sparked the three-month wave of grisly massacres.
The speed and violence of the genocide was evident in the court's findings.
On April 7, 1994 - the day after the plane attack - Bagosora was responsible for the killing of the Rwandan prime minister, Agathe Uwilingiyimana; the president of the Constitutional Court, Joseph Kavaruganda; and three top opposition figures: Frédéric Nzamurambaho, Landoald Ndasingwa and Faustin Rucogoza, the court ruled.
But the court cleared Bagosora and the others on trial of conspiring to commit genocide before April 7, 1994.
The court said that the prosecution had alleged that Kabiligi, who led the military operations bureau of the army general staff, "participated in the distribution of weapons, meetings to plan the genocide as well as a number of specific crimes, many of which were related to roadblocks in the Kigali area." But the charges were dismissed after he advanced a successful alibi, and "it was also not proven that he had operational authority or that he targeted civilians," the court said.
***************
Argentine court orders release of jailed officers
Reuters
Thursday, December 18, 2008
BUENOS AIRES: An Argentine court on Thursday ordered the release of 12 jailed former naval officers facing charges of murder, torture and other human rights abuses during Argentina's 1976-83 military dictatorship.
The decision came under an Argentine law that says accused people in custody for two years without being convicted and sentenced must be released pending trial, judicial sources told Reuters.
Among those ordered freed until trial was Alfredo Astiz, one of the most notorious figures of Argentina's military rule, who is charged with the murder of two French nuns in 1977.
Known as the "blond angel of death," Astiz is accused of infiltrating human rights groups during the dictatorship and identifying some victims to be kidnapped and murdered by kissing them during a church service.
He was convicted in France in absentia for the killing of the nuns.
"This is an insult, a slap in the face," said Taty Almeida, a leader of the human rights group, Mothers of the Plaza de Mayo.
A government report says more than 11,000 people died or disappeared during the "Dirty War," a crackdown on leftists and other opponents of the military government at the time. Human rights groups say the number is closer to 30,000.
In 2005, Argentina's Supreme Court, at the urging of then-President Nestor Kirchner, struck down two amnesty laws that shielded hundreds of former officers from charges of human rights abuses during the dictatorship.
Many of the junta's top leaders are under house arrest on charges of kidnapping babies born to mothers held in captivity during military rule.
(Reporting by Damian Wroclavsky; Writing by Kevin Gray; Editing by Peter Cooney)
Reuters
Thursday, December 18, 2008
BUENOS AIRES: An Argentine court on Thursday ordered the release of 12 jailed former naval officers facing charges of murder, torture and other human rights abuses during Argentina's 1976-83 military dictatorship.
The decision came under an Argentine law that says accused people in custody for two years without being convicted and sentenced must be released pending trial, judicial sources told Reuters.
Among those ordered freed until trial was Alfredo Astiz, one of the most notorious figures of Argentina's military rule, who is charged with the murder of two French nuns in 1977.
Known as the "blond angel of death," Astiz is accused of infiltrating human rights groups during the dictatorship and identifying some victims to be kidnapped and murdered by kissing them during a church service.
He was convicted in France in absentia for the killing of the nuns.
"This is an insult, a slap in the face," said Taty Almeida, a leader of the human rights group, Mothers of the Plaza de Mayo.
A government report says more than 11,000 people died or disappeared during the "Dirty War," a crackdown on leftists and other opponents of the military government at the time. Human rights groups say the number is closer to 30,000.
In 2005, Argentina's Supreme Court, at the urging of then-President Nestor Kirchner, struck down two amnesty laws that shielded hundreds of former officers from charges of human rights abuses during the dictatorship.
Many of the junta's top leaders are under house arrest on charges of kidnapping babies born to mothers held in captivity during military rule.
(Reporting by Damian Wroclavsky; Writing by Kevin Gray; Editing by Peter Cooney)
OPINION
A Narnia Christmas
By Laura Miller
Thursday, December 18, 2008
Every Christmas, I re-read C.S. Lewis' novel "The Lion, the Witch and the Wardrobe."
The holiday seems like the ideal time for an excursion into my imaginative past, so I return to the paperback boxed set of "The Chronicles of Narnia" that my parents gave me for Christmas when I was 10.
For me, Narnia is intimately linked with the season. I'm not alone. In Britain, stage productions of "The Lion, the Witch and the Wardrobe" are a holiday staple, for good reason. The book rests on a foundation of Christian imagery; its most famous scene is of a little girl standing under a lamppost in a snowy wood, and Father Christmas himself makes an appearance, after the lion god Aslan frees Narnia from an evil witch who decreed that it be "always winter, and never Christmas."
That I'm not a Christian doesn't much hinder my enjoyment of either the holiday or the book, but the presence of Father Christmas bothered many of Lewis's friends, including J.R.R. Tolkien. Tolkien, whose Middle-earth was free of the legends and religions of our world, objected to Narnia's hodgepodge of motifs: the fauns and dryads lifted from classic mythology, the Germanic dwarfs and contemporary schoolboy slang lumped in with the obvious Christian symbolism.
But Lewis embraced the Middle Ages' indiscriminate mixing of stories and motifs from seemingly incompatible sources. The medievals, he once wrote, enthusiastically adopted a habit from late antiquity of "gathering together and harmonizing views of very different origin: building a syncretistic model not only out of Platonic, Aristotelian and Stoical, but out of pagan and Christian elements."
Christmas as we now know it is much the same sort of conglomeration, and when people call for a return to its pure, authentic roots, they're missing an essential quality of the holiday. Narnia is a mongrel thing, and so is Christmas. As is often the case, this mongrelizing is the source of its strength.
Complaints about the corruption, dilution or fundamental impiety of Christmas have been made for centuries. The Puritans so mistrusted the holiday that its celebration was outlawed in 17th-century Boston. Around the same time, the German theologian Paul Ernst Jablonski asserted that Christmas amounted to a paganization of the authentic faith because the date, Dec. 25, had been appropriated from a festival for a Roman solar god. (Some Christian scholars, including the current pope, have actually argued that the appropriation went the other way around, and the solar festival was in fact a heathen bid to co-opt the feast day of an increasingly popular monotheistic cult.)
On the other side, non-Christians who relish the holiday like to point out that many Christmas icons - the decorated tree, the Yule log, mistletoe - were originally sacred to Celtic and Northern European pagans.
Yet even the Yuletide customs that are supposedly pagan holdovers must be taken with a grain of salt. We have no written records of the cultures from which they supposedly derive; everything we know about them comes second- and third-hand from Roman or Christian writers pursuing their own agendas and relying, for the most part, on oral sources.
For decades, historians and folklorists have understood that oral traditions are not very reliable when they refer to anything reputed to have happened more than 100 years ago. What's presented as hoary legend is in fact more likely a justification of present conditions than an accurate account of the past.
Druids, for example, have over the years been refashioned as the descendants of Noah, as bardic romantics, even as sexual egalitarians; in fact, much of what people think they know about the ancient beliefs and rites of Northern Europeans was concocted by early 20th-century occultist outfits like the Ancient Druid Order and Hermetic Order of the Golden Dawn.
The British historian Ronald Hutton describes this sort of thing as indicative of "the power of literary fiction over fact." We believe what we choose to believe, and Christmas is no exception.
In recent years, popular histories like "The Battle for Christmas" and "Inventing Christmas," have shown that many of the holiday's most hallowed rites, traditions we think of as extending back at least as far as C.S. Lewis's beloved Middle Ages, were invented less than 200 years ago by such 19th-century literary figures as Washington Irving, Clement Clarke Moore and, of course, Charles Dickens. More than Christian or pagan, Christmas is a Victorian fabrication.
Is this, though, such a bad thing? The unifying principle of Narnia, unlike the vast complex of invented history behind Middle-earth, isn't an illusion of authenticity or purity. Rather, what binds all the elements of Lewis's fantasy together is something more like love. Narnia consists of every story, legend, myth or image - pagan or Christian - that moved the author over the course of his life.
Our contemporary, semi-secular Christmas is similarly a collection of everything yearned for: warmth, plenty, peace, family, conviviality. Like Narnia, the holiday is a fantasy, but there are times when a fantasy is exactly what you need.
Laura Miller, a staff writer at Salon.com, is the author of "The Magician's Book: A Skeptic's Adventures in Narnia."
By Laura Miller
Thursday, December 18, 2008
Every Christmas, I re-read C.S. Lewis' novel "The Lion, the Witch and the Wardrobe."
The holiday seems like the ideal time for an excursion into my imaginative past, so I return to the paperback boxed set of "The Chronicles of Narnia" that my parents gave me for Christmas when I was 10.
For me, Narnia is intimately linked with the season. I'm not alone. In Britain, stage productions of "The Lion, the Witch and the Wardrobe" are a holiday staple, for good reason. The book rests on a foundation of Christian imagery; its most famous scene is of a little girl standing under a lamppost in a snowy wood, and Father Christmas himself makes an appearance, after the lion god Aslan frees Narnia from an evil witch who decreed that it be "always winter, and never Christmas."
That I'm not a Christian doesn't much hinder my enjoyment of either the holiday or the book, but the presence of Father Christmas bothered many of Lewis's friends, including J.R.R. Tolkien. Tolkien, whose Middle-earth was free of the legends and religions of our world, objected to Narnia's hodgepodge of motifs: the fauns and dryads lifted from classic mythology, the Germanic dwarfs and contemporary schoolboy slang lumped in with the obvious Christian symbolism.
But Lewis embraced the Middle Ages' indiscriminate mixing of stories and motifs from seemingly incompatible sources. The medievals, he once wrote, enthusiastically adopted a habit from late antiquity of "gathering together and harmonizing views of very different origin: building a syncretistic model not only out of Platonic, Aristotelian and Stoical, but out of pagan and Christian elements."
Christmas as we now know it is much the same sort of conglomeration, and when people call for a return to its pure, authentic roots, they're missing an essential quality of the holiday. Narnia is a mongrel thing, and so is Christmas. As is often the case, this mongrelizing is the source of its strength.
Complaints about the corruption, dilution or fundamental impiety of Christmas have been made for centuries. The Puritans so mistrusted the holiday that its celebration was outlawed in 17th-century Boston. Around the same time, the German theologian Paul Ernst Jablonski asserted that Christmas amounted to a paganization of the authentic faith because the date, Dec. 25, had been appropriated from a festival for a Roman solar god. (Some Christian scholars, including the current pope, have actually argued that the appropriation went the other way around, and the solar festival was in fact a heathen bid to co-opt the feast day of an increasingly popular monotheistic cult.)
On the other side, non-Christians who relish the holiday like to point out that many Christmas icons - the decorated tree, the Yule log, mistletoe - were originally sacred to Celtic and Northern European pagans.
Yet even the Yuletide customs that are supposedly pagan holdovers must be taken with a grain of salt. We have no written records of the cultures from which they supposedly derive; everything we know about them comes second- and third-hand from Roman or Christian writers pursuing their own agendas and relying, for the most part, on oral sources.
For decades, historians and folklorists have understood that oral traditions are not very reliable when they refer to anything reputed to have happened more than 100 years ago. What's presented as hoary legend is in fact more likely a justification of present conditions than an accurate account of the past.
Druids, for example, have over the years been refashioned as the descendants of Noah, as bardic romantics, even as sexual egalitarians; in fact, much of what people think they know about the ancient beliefs and rites of Northern Europeans was concocted by early 20th-century occultist outfits like the Ancient Druid Order and Hermetic Order of the Golden Dawn.
The British historian Ronald Hutton describes this sort of thing as indicative of "the power of literary fiction over fact." We believe what we choose to believe, and Christmas is no exception.
In recent years, popular histories like "The Battle for Christmas" and "Inventing Christmas," have shown that many of the holiday's most hallowed rites, traditions we think of as extending back at least as far as C.S. Lewis's beloved Middle Ages, were invented less than 200 years ago by such 19th-century literary figures as Washington Irving, Clement Clarke Moore and, of course, Charles Dickens. More than Christian or pagan, Christmas is a Victorian fabrication.
Is this, though, such a bad thing? The unifying principle of Narnia, unlike the vast complex of invented history behind Middle-earth, isn't an illusion of authenticity or purity. Rather, what binds all the elements of Lewis's fantasy together is something more like love. Narnia consists of every story, legend, myth or image - pagan or Christian - that moved the author over the course of his life.
Our contemporary, semi-secular Christmas is similarly a collection of everything yearned for: warmth, plenty, peace, family, conviviality. Like Narnia, the holiday is a fantasy, but there are times when a fantasy is exactly what you need.
Laura Miller, a staff writer at Salon.com, is the author of "The Magician's Book: A Skeptic's Adventures in Narnia."
U.S. official sees 'test' looming from Russia
The Associated Press
Thursday, December 18, 2008
WASHINGTON: The Russian government will probably "test the mettle" of Barack Obama when his administration assumes power by taking a tougher stance against the U.S. missile defense project in Europe, a senior State Department official says.
John Rood, the department's top arms control official, said Wednesday that he believed the Russians were waiting to size up the Obama administration before Moscow advanced its position on disputed weapons issues.
In discussing the state of Russian opposition to U.S. missile defense bases in Poland and the Czech Republic, Rood said it appeared that Moscow has "paused" in anticipation of a new national security approach in Washington.
"My assessment is that the Russians intend to test the mettle of the new administration and the new president," he said. "The future will show how the new administration chooses to answer that challenge."
Asked to elaborate, he said, "I think missile defense and other subjects will be among those that the Russians intend to determine what the new administration's posture will be."
In a related development, a NATO official said Thursday that the alliance and Russia will hold a conference Friday, the first high-level contact since NATO suspended such ties after Moscow's war with Georgia in August. The alliance's secretary general, Jaap de Hoop Scheffer, will meet Dmitri Rogozin, the Russian ambassador to NATO, in a move toward repairing disrupted ties, a NATO official said. "It will be an informal lunch in Brussels," the official said.
The 26-member NATO agreed this month to gradually resume contacts with Russia, with European allies arguing that the freeze in ties was counter to NATO's security interests.
Rood said he reached his conclusion on Russia during talks in Moscow on Monday, not from explicit Russian statements. He also said the Russians had been less flexible lately in talks on missile defense. He cited in particular their stance on U.S. proposals to give Moscow more assurance that a missile interceptor site in Poland and a missile-tracking radar in the Czech Republic would pose no security threat to Russia.
The United States, with the support of the Polish and Czech governments, has proposed that Russian officials be given regular access to the interceptor and radar sites and that they be allowed to monitor activity at both sites through undisclosed technical means. Rood did not elaborate on the details in dispute.
"I don't want to spell out all the details because I think this is a high-priority dialogue for us in the United States, and I don't think that putting all the details out will facilitate a resolution to it," he said.
Rood led a U.S. delegation in talks with senior Russian officials on a range of subjects, including efforts by both governments to negotiate a treaty to replace the 1991 strategic arms reduction treaty, Start, which expires next December. Rood said the talks were useful but did not achieve any breakthroughs.
In Moscow on Tuesday, Russian news agencies quoted Foreign Minister Sergey Lavrov as saying that Moscow hoped the Obama administration would agree that the weapons limitations under Start "should be preserved and strengthened, rather than weakened."
Rood said the Russians wanted to expand the scope of a follow-on to Start to include limitations on nonnuclear strategic weapons such as long-range conventional bombers and possibly submarines. The Bush administration has resisted that, saying the restrictions should be on nuclear warheads only.
Rood said he consulted with members of Obama's transition team before traveling to Moscow and will brief them on the substance of the talks.
He also said he expected there would be additional talks with the Russians on those subjects before President George W. Bush leaves office Jan. 20.
Brooke Anderson, the Obama transition office's chief spokeswoman on national security affairs, declined to comment on Rood's remark about the Russians seeking to test the new president.
The missile defense issue has been one of the most divisive between Washington and Moscow in the past few years.
The Bush administration has argued that extending its U.S.-based defense system to Europe is important in defending Europe and the United States from a possible long-range missile strike from Iran, while the Russians dispute the immediacy of an Iranian threat and worry about U.S. military expansion near Russian borders.
On Nov. 5, the day after Obama's election, President Dmitri Medvedev warned that Russia would move short-range missiles to NATO's borders to "neutralize" any U.S. missile system in Eastern Europe if necessary.
Medvedev has since backed off slightly. He stressed on Nov. 15 that Moscow would not act unless the United States took the first step and expressed hope that the new U.S. administration would be open to negotiations.
Obama has not been explicit, at least in public, about whether he would proceed with the missile plan in Poland and the Czech Republic. More broadly he has said he supports missile defense but wants to ensure that it is proved to be a reliable system that does not detract from other security priorities.
The Associated Press
Thursday, December 18, 2008
WASHINGTON: The Russian government will probably "test the mettle" of Barack Obama when his administration assumes power by taking a tougher stance against the U.S. missile defense project in Europe, a senior State Department official says.
John Rood, the department's top arms control official, said Wednesday that he believed the Russians were waiting to size up the Obama administration before Moscow advanced its position on disputed weapons issues.
In discussing the state of Russian opposition to U.S. missile defense bases in Poland and the Czech Republic, Rood said it appeared that Moscow has "paused" in anticipation of a new national security approach in Washington.
"My assessment is that the Russians intend to test the mettle of the new administration and the new president," he said. "The future will show how the new administration chooses to answer that challenge."
Asked to elaborate, he said, "I think missile defense and other subjects will be among those that the Russians intend to determine what the new administration's posture will be."
In a related development, a NATO official said Thursday that the alliance and Russia will hold a conference Friday, the first high-level contact since NATO suspended such ties after Moscow's war with Georgia in August. The alliance's secretary general, Jaap de Hoop Scheffer, will meet Dmitri Rogozin, the Russian ambassador to NATO, in a move toward repairing disrupted ties, a NATO official said. "It will be an informal lunch in Brussels," the official said.
The 26-member NATO agreed this month to gradually resume contacts with Russia, with European allies arguing that the freeze in ties was counter to NATO's security interests.
Rood said he reached his conclusion on Russia during talks in Moscow on Monday, not from explicit Russian statements. He also said the Russians had been less flexible lately in talks on missile defense. He cited in particular their stance on U.S. proposals to give Moscow more assurance that a missile interceptor site in Poland and a missile-tracking radar in the Czech Republic would pose no security threat to Russia.
The United States, with the support of the Polish and Czech governments, has proposed that Russian officials be given regular access to the interceptor and radar sites and that they be allowed to monitor activity at both sites through undisclosed technical means. Rood did not elaborate on the details in dispute.
"I don't want to spell out all the details because I think this is a high-priority dialogue for us in the United States, and I don't think that putting all the details out will facilitate a resolution to it," he said.
Rood led a U.S. delegation in talks with senior Russian officials on a range of subjects, including efforts by both governments to negotiate a treaty to replace the 1991 strategic arms reduction treaty, Start, which expires next December. Rood said the talks were useful but did not achieve any breakthroughs.
In Moscow on Tuesday, Russian news agencies quoted Foreign Minister Sergey Lavrov as saying that Moscow hoped the Obama administration would agree that the weapons limitations under Start "should be preserved and strengthened, rather than weakened."
Rood said the Russians wanted to expand the scope of a follow-on to Start to include limitations on nonnuclear strategic weapons such as long-range conventional bombers and possibly submarines. The Bush administration has resisted that, saying the restrictions should be on nuclear warheads only.
Rood said he consulted with members of Obama's transition team before traveling to Moscow and will brief them on the substance of the talks.
He also said he expected there would be additional talks with the Russians on those subjects before President George W. Bush leaves office Jan. 20.
Brooke Anderson, the Obama transition office's chief spokeswoman on national security affairs, declined to comment on Rood's remark about the Russians seeking to test the new president.
The missile defense issue has been one of the most divisive between Washington and Moscow in the past few years.
The Bush administration has argued that extending its U.S.-based defense system to Europe is important in defending Europe and the United States from a possible long-range missile strike from Iran, while the Russians dispute the immediacy of an Iranian threat and worry about U.S. military expansion near Russian borders.
On Nov. 5, the day after Obama's election, President Dmitri Medvedev warned that Russia would move short-range missiles to NATO's borders to "neutralize" any U.S. missile system in Eastern Europe if necessary.
Medvedev has since backed off slightly. He stressed on Nov. 15 that Moscow would not act unless the United States took the first step and expressed hope that the new U.S. administration would be open to negotiations.
Obama has not been explicit, at least in public, about whether he would proceed with the missile plan in Poland and the Czech Republic. More broadly he has said he supports missile defense but wants to ensure that it is proved to be a reliable system that does not detract from other security priorities.
**********************
Georgia lags in its bid to fix army
By Thom Shanker and C. J. Chivers
Thursday, December 18, 2008
WASHINGTON: The Georgian military, which was routed in August during a brief war with Russia, suffers from widespread mismanagement and unqualified leadership, and is in need of extensive reforms to become a modern fighting force, according to a classified Pentagon assessment conducted this fall.
The assessment, by a team of American military officers that worked quietly in Tbilisi, Georgia's capital, in October and November, offers a clinical view of a politicized military culture and substandard practices in a country lobbying to join NATO while embroiled in two bloody territorial disputes with Russia.
The assessment underscores the difficult choices to be faced by President-elect Barack Obama, whose foreign policy team will be balancing decisions on how to engage Georgia against concerns that commitments to assist its military will further inflame Russia.
The report, portions of which were shown to The New York Times by a person concerned about the poor readiness of Georgia's military, made implicitly clear that after more than a decade of American training and nearly five years of heavy investment by President Mikheil Saakashvili, Georgia's military remains immature and ill prepared.
Georgia's armed forces, the report said, are highly centralized, prone to impulsive rather than deliberative decision making, undermined by unclear lines of command and led by senior officials who were selected for personal relationships rather than professional qualifications.
Moreover, according to the report, Georgia's military lacks basic elements of a modern military bureaucracy, ranging from a sound national security doctrine to clear policies for handling classified material to a personnel-management system to guide soldiers through their careers.
In recent years, Georgia has presented itself as an eager if lightly qualified partner in NATO and American-led military missions abroad. Its soldiers have participated in deployments to Kosovo, Afghanistan and Iraq, where its troop contingent became the third largest national contribution.
This month in Brussels, the 26 member nations of NATO reaffirmed their intention of eventually allowing Georgia and its armed forces of about 30,000 troops to join. But they did not offer a detailed set of programs, known as a Membership Action Plan, for Georgia's accession — a sign regarded as a setback for swift membership.
The decision to decelerate Georgia's NATO ambitions was largely political. Several countries expressed worries that backing Georgia would harm relations with Russia, which has cast Saakashvili's government as erratic and has objected to further NATO expansion in the former Soviet sphere.
Many Western diplomats and military officers have also voiced misgivings about the behavior and judgment of the Georgian government. After years of provocations by Georgia and Russia alike, Georgia launched an attack in August against the separatist enclave of South Ossetia. The attack was stymied by a large-scale Russian invasion and the defeat of the Georgian Army on its home soil.
American and Georgian officials have said the postwar military assessment, which was conducted by the United States European Command, was not a factor in the NATO decision.
"We did not do our assessment with the guidance to determine if Georgia is ready for NATO membership," General John Craddock, the American officer who leads the European Command, said in an interview. "Our assessment was: As a result of the August conflict, give me the state of the Georgian armed forces."
The assessment showed, however, the degree to which Georgia's military would have to improve, in practical terms, to be ready for NATO membership should political objections recede.
It also served as a stark message that the readiness of Georgia's military was not as Georgia has portrayed it.
Georgia has framed its military revival since Saakashvili came to power in early 2004 as a grand achievement and an indicator of the country's progress.
The military Saakashvili inherited was a Red Army orphan: small, decrepit, badly trained and poorly equipped. In the early 1990s the Georgian Army lost two wars against Russian-backed separatists in Abkhazia and South Ossetia. Some of its troops were accused of committing war crimes. (Abkhaz and Ossetian forces have also been accused of ugly battlefield excesses.)
Saakashvili purchased new arms and vehicles, raised salaries, built new bases, increased the country's collaboration with the Pentagon and urged the armed forces to emulate Western practices, in part by encouraging volunteer soldiers.
The Georgian military appeared to be transforming. American officers praised a few of their Georgian counterparts in Iraq. And Eduard Kokoity, the president of South Ossetia, said the Georgian military was much more prepared and capable in its initial attack in August than it had been in the past.
But as the war drew into a second day and Russian forces flowed into South Ossetia, the Georgian military quickly broke down. Many commanders were reduced to communicating by cellphone. The army fired cluster munitions on its own villages. Many units fled, abandoning equipment, ammunition and their own dead.
According to the assessment's report, some of the problems should have been unsurprising. Georgia's armed forces, the assessment found, lack "the doctrine, institutional training and the experience needed to effectively command and control organizations throughout the chain of command."
In another section, the report added: "Collaborative planning and sharing of information does not take place due to culture and organizational stove-pipes. As a result, coordinated efforts are essentially non-existent."
An American officer who has worked alongside the Georgian military and was familiar with the assessment said that the American team also found Georgia had a poor grasp of military intelligence, and did not collect or share its intelligence in an organized fashion. This, in the officer's view, contributed to failures in August.
"One of the reasons they got into the war is that their command and control is a mess," the officer said. "They have no ability to process and analyze strategic information and provide it to decision makers in a systematic way." The officer spoke on condition of anonymity because he was not authorized to speak publicly about the assessment.
The report also took a dim view of Georgia's senior military leaders, noting that the process for choosing defense officials "is based on personal relationships and not tied to education, training or any system of performance evaluation."
Since the report was shared with Georgia, Saakashvili has shuffled the Defense Ministry's leadership, although it is not clear that military experience has been given primacy in the choices.
Early this month he dismissed an ally, Davit Kezerashvili, the 30-year-old defense minister who held the post during the war, and replaced him with Vasil Sikharulidze. The new minister is a trained psychiatrist and another Saakashvili ally who had served as the ambassador to the United States.
Both American and Georgian officials said the assessment was not complete. The United States military, along with NATO officials, plans to provide recommendations to the Defense Ministry intended to improve Georgia's readiness.
It was not immediately clear when the recommendations might be provided. Georgia has been reluctant to discuss the assessment or its findings.
In October, Batu Kutelia, Georgia's first deputy minister of defense, declined to comment on the assessment. This month, after The New York Times had read portions of the assessment, he spoke about it without addressing its main findings, saying they were classified.
Kutelia insisted, however, that NATO's assessment of Georgia's military for the past two or three years, including an assessment this fall, was "very positive and underlined significant achievement." The claim could not be confirmed because NATO's assessments have not been made public.
In an e-mail message Kutelia said that the Pentagon assessment had been performed at Georgia's request as part of a "very responsible" postwar review.
"We have asked our strategic partners, as it is usually the case after every war, to help us in identifying the shortfalls in our defense system and for that purpose to conduct the comprehensive diagnostics," he wrote.
A senior official in Washington said that the assessment had found significant shortcomings, and that Georgia and its Western supporters would have to decide how to proceed.
"We did an honest job," the officials said. "And we said to them, 'You should know you need to make some changes if you want to have a professional military force.' "
By Thom Shanker and C. J. Chivers
Thursday, December 18, 2008
WASHINGTON: The Georgian military, which was routed in August during a brief war with Russia, suffers from widespread mismanagement and unqualified leadership, and is in need of extensive reforms to become a modern fighting force, according to a classified Pentagon assessment conducted this fall.
The assessment, by a team of American military officers that worked quietly in Tbilisi, Georgia's capital, in October and November, offers a clinical view of a politicized military culture and substandard practices in a country lobbying to join NATO while embroiled in two bloody territorial disputes with Russia.
The assessment underscores the difficult choices to be faced by President-elect Barack Obama, whose foreign policy team will be balancing decisions on how to engage Georgia against concerns that commitments to assist its military will further inflame Russia.
The report, portions of which were shown to The New York Times by a person concerned about the poor readiness of Georgia's military, made implicitly clear that after more than a decade of American training and nearly five years of heavy investment by President Mikheil Saakashvili, Georgia's military remains immature and ill prepared.
Georgia's armed forces, the report said, are highly centralized, prone to impulsive rather than deliberative decision making, undermined by unclear lines of command and led by senior officials who were selected for personal relationships rather than professional qualifications.
Moreover, according to the report, Georgia's military lacks basic elements of a modern military bureaucracy, ranging from a sound national security doctrine to clear policies for handling classified material to a personnel-management system to guide soldiers through their careers.
In recent years, Georgia has presented itself as an eager if lightly qualified partner in NATO and American-led military missions abroad. Its soldiers have participated in deployments to Kosovo, Afghanistan and Iraq, where its troop contingent became the third largest national contribution.
This month in Brussels, the 26 member nations of NATO reaffirmed their intention of eventually allowing Georgia and its armed forces of about 30,000 troops to join. But they did not offer a detailed set of programs, known as a Membership Action Plan, for Georgia's accession — a sign regarded as a setback for swift membership.
The decision to decelerate Georgia's NATO ambitions was largely political. Several countries expressed worries that backing Georgia would harm relations with Russia, which has cast Saakashvili's government as erratic and has objected to further NATO expansion in the former Soviet sphere.
Many Western diplomats and military officers have also voiced misgivings about the behavior and judgment of the Georgian government. After years of provocations by Georgia and Russia alike, Georgia launched an attack in August against the separatist enclave of South Ossetia. The attack was stymied by a large-scale Russian invasion and the defeat of the Georgian Army on its home soil.
American and Georgian officials have said the postwar military assessment, which was conducted by the United States European Command, was not a factor in the NATO decision.
"We did not do our assessment with the guidance to determine if Georgia is ready for NATO membership," General John Craddock, the American officer who leads the European Command, said in an interview. "Our assessment was: As a result of the August conflict, give me the state of the Georgian armed forces."
The assessment showed, however, the degree to which Georgia's military would have to improve, in practical terms, to be ready for NATO membership should political objections recede.
It also served as a stark message that the readiness of Georgia's military was not as Georgia has portrayed it.
Georgia has framed its military revival since Saakashvili came to power in early 2004 as a grand achievement and an indicator of the country's progress.
The military Saakashvili inherited was a Red Army orphan: small, decrepit, badly trained and poorly equipped. In the early 1990s the Georgian Army lost two wars against Russian-backed separatists in Abkhazia and South Ossetia. Some of its troops were accused of committing war crimes. (Abkhaz and Ossetian forces have also been accused of ugly battlefield excesses.)
Saakashvili purchased new arms and vehicles, raised salaries, built new bases, increased the country's collaboration with the Pentagon and urged the armed forces to emulate Western practices, in part by encouraging volunteer soldiers.
The Georgian military appeared to be transforming. American officers praised a few of their Georgian counterparts in Iraq. And Eduard Kokoity, the president of South Ossetia, said the Georgian military was much more prepared and capable in its initial attack in August than it had been in the past.
But as the war drew into a second day and Russian forces flowed into South Ossetia, the Georgian military quickly broke down. Many commanders were reduced to communicating by cellphone. The army fired cluster munitions on its own villages. Many units fled, abandoning equipment, ammunition and their own dead.
According to the assessment's report, some of the problems should have been unsurprising. Georgia's armed forces, the assessment found, lack "the doctrine, institutional training and the experience needed to effectively command and control organizations throughout the chain of command."
In another section, the report added: "Collaborative planning and sharing of information does not take place due to culture and organizational stove-pipes. As a result, coordinated efforts are essentially non-existent."
An American officer who has worked alongside the Georgian military and was familiar with the assessment said that the American team also found Georgia had a poor grasp of military intelligence, and did not collect or share its intelligence in an organized fashion. This, in the officer's view, contributed to failures in August.
"One of the reasons they got into the war is that their command and control is a mess," the officer said. "They have no ability to process and analyze strategic information and provide it to decision makers in a systematic way." The officer spoke on condition of anonymity because he was not authorized to speak publicly about the assessment.
The report also took a dim view of Georgia's senior military leaders, noting that the process for choosing defense officials "is based on personal relationships and not tied to education, training or any system of performance evaluation."
Since the report was shared with Georgia, Saakashvili has shuffled the Defense Ministry's leadership, although it is not clear that military experience has been given primacy in the choices.
Early this month he dismissed an ally, Davit Kezerashvili, the 30-year-old defense minister who held the post during the war, and replaced him with Vasil Sikharulidze. The new minister is a trained psychiatrist and another Saakashvili ally who had served as the ambassador to the United States.
Both American and Georgian officials said the assessment was not complete. The United States military, along with NATO officials, plans to provide recommendations to the Defense Ministry intended to improve Georgia's readiness.
It was not immediately clear when the recommendations might be provided. Georgia has been reluctant to discuss the assessment or its findings.
In October, Batu Kutelia, Georgia's first deputy minister of defense, declined to comment on the assessment. This month, after The New York Times had read portions of the assessment, he spoke about it without addressing its main findings, saying they were classified.
Kutelia insisted, however, that NATO's assessment of Georgia's military for the past two or three years, including an assessment this fall, was "very positive and underlined significant achievement." The claim could not be confirmed because NATO's assessments have not been made public.
In an e-mail message Kutelia said that the Pentagon assessment had been performed at Georgia's request as part of a "very responsible" postwar review.
"We have asked our strategic partners, as it is usually the case after every war, to help us in identifying the shortfalls in our defense system and for that purpose to conduct the comprehensive diagnostics," he wrote.
A senior official in Washington said that the assessment had found significant shortcomings, and that Georgia and its Western supporters would have to decide how to proceed.
"We did an honest job," the officials said. "And we said to them, 'You should know you need to make some changes if you want to have a professional military force.' "
Italian cultural paradox: Love it, live in it, leave it to the creaky bureaucracy
By Michael Kimmelman
Thursday, December 18, 2008
ROME: "We are very, very, very old," said Antonio Paolucci, the director of the Vatican Museums, when asked one recent morning whether Italy, rather than moving around the deck chairs of its cultural policy, as it has done for ages, might someday actually consider real reform.
The question came up after a ruckus ensued when Prime Minister Silvio Berlusconi's culture minister, Sandro Bondi, floated the idea some days ago of putting much of the management of the country's 4,000 museums and their cultural heritage into the hands of one person. The person proposed to fill the post was Mario Resca, a businessman who used to run the McDonald's subsidiary in Italy, a pal, as everybody instantly remarked, of Berlusconi.
That plan was then drastically amended in light of fierce opposition from the Italian arts establishment, which includes Paolucci, who made clear he was a friend of Resca. It was nothing personal, he said. But when Pope Leo X, in 1515, wanted someone to look after collections at the Vatican he picked an artist, Raphael.
Paolucci gazed out the large, open picture window in his office, which perfectly framed the ancient dome of St. Peter's.
"É tutto," he said. (Roughly translated, "That says it all.")
Triumphant, as if there really were nothing more anyone could add, he fell silent.
This is Italy, after all. Everyone here believes change is necessary. But then sighs, because it's impossible too. Wholesale change anyway. It's Raphael or bust.
A half-dozen structural revamps of the culture ministry during the last decade haven't really done much except to shuffle around the burden of a creaky and defensive bureaucracy. The country is paralyzed by contradictions. Italians say they identify deeply with their cultural patrimony, but they actually don't visit their museums much. They talk about collective Italian artistic heritage but remain, at heart, profoundly divided by ancient regional differences never quite bridged by unification a century and a half ago, differences that fracture cultural policies.
And so the Berlusconi administration's proposal for a supermanager was ostensibly to cut through decades of red tape, inject an outsider's fresh views and, in straitened times, find new ways to earn more revenue from the country's unparalleled bounty of art and antiquities, especially considering that the ministry's budget is about to be slashed by more than 30 percent over the next three years.
But opponents, not altogether irrationally, stressed that culture demands expertise, not somebody who sold hamburgers, never mind if Resca is admired and successful. The ridiculous choice that presented itself between maintaining the status quo or enlisting the guy who ran McDonald's was somehow typically Italian. In a country where every bid for change is believed to hide some ulterior political motive, detractors suspected the supermanager idea was in fact merely a ploy to ransack national storerooms and grease the path for the prime minister's rich friends who want to hawk precious Italian art abroad
To Americanize the system, in other words. And perhaps in part it was. But Italians, whose cultural heritage policies have roots in the 1500s, still maintain a very different philosophy toward their belongings. They declare not just precious Roman artifacts and Caravaggios to be national patrimony but also every single Italian building, artwork and piece of furniture more than 50 years old.
That's right. Everything over 50 (with art, the artists at least have to be dead) is regulated by patrimony laws requiring Italians to declare what they own if they wish to export it. This means many people prefer to remain secretive about what they have, and if it's art, it therefore doesn't circulate. Whatever's buried in the ground automatically belongs to the state, even if the ground happens to be your backyard.
Beautiful concepts, in principle: collective values, shared heritage, cultural integrity over economy.
In practice, in a country where uncollected taxes are now estimated to top 280 billion euros (about $401 billion) — a reflection, among other things, of Italian doubts about, and lack of identification with, a centralized government — the system relies upon an increasingly aging and perennially underpaid ministry. It is practically unmanageable. It encourages dishonesty and illicit trade; it discourages innovation and outreach. It also stresses conservation — sometimes to a fault.
Only 15 years ago Italian museums agreed to keep their doors open past 2 p.m. A Roman friend was shocked last week to receive a flyer from the Palazzo Massimo, part of the National Museum of Rome, inviting her to "Discover the Massimo." American museums send out these sorts of promotions all the time. Not Italian ones.
In France or Britain, where people feel just as strongly about their cultural heritage, there are incentives for openly declaring one's art and property, including the right to sell outside the country, with the state preserving an option to buy what it deems national patrimony by matching the price at fair market value. At the same time the Louvre will soon start renting parts of its collection to Abu Dhabi, as the Museum of Fine Arts, Boston, has done to Japan. This is a dubious business that can easily lead to conflict, and has in the case of Boston, but also, if properly managed, a way to earn money and share a country's cultural riches. In turn it can be a boon to tourism and a diplomatic tool.
In America tax breaks encourage private contributions to public institutions. Italy is only just beginning to set up a limited system for tax breaks but under complicated circumstances that most Italians don't know about or find mysterious. Smuggling art and antiquities out of the country is a constant problem.
Italians seem almost to relish their own intransigence. Salvatore Settis heads the top advisory board at the culture ministry. "We walk on the streets of cities like Rome, and we may live and work in a palace with historical importance, so we interact with our cultural heritage all the time and therefore we may go into a museum or we may not," he said by way of explaining how it is that Italians prize their cultural past but don't bother to go to their museums to see it. "But another explanation," he added, "is that Italian museums are not attractive."
That's not altogether true. Some are glorious of course. But among the Top 10 most visited in the world, Italy has only the Vatican Museums, and the Vatican isn't even technically part of Italy. As Marisa Dalai Emiliani put it, "We don't think in those terms," meaning in terms of promotion and accessibility. She is president of the Ranuccio Bianchi Bandinelli Association, a cultural research institution.
"When Clement XII opened the Capitoline Museum in 1734, he had two aims," she said the other evening. "The goal was to teach scholars and artists on the one hand, and public enjoyment on the other. Over time even with all the changes we've had in recent years, there has been less of a sense of our museums as places for public enjoyment."
Michele Trimarchi, an economist here, shook his head in disgust. "We have a small but noisy cultural establishment, and there is a kind of religion of self-protection on its part," he said. "The large majority of Italians don't actually care about culture. Absolutely not.
"In the United States you have museums and opera companies that arrange for young people to come for free to encourage new audiences. Here that sort of promotion is blasphemous. Italian museums have no incentive to promote themselves. They are not centers of financial autonomy, because everything they make goes to the central government, so whatever they make will not be reflected in their own financial fortunes."
This is not altogether true either. But it is part of the problem. "And yes," Trimarchi added "we fail to realize that conservation and promotion are two sides of the same coin."
Which they are. In the end it's an odd failure in a country so dependent on culture for tourist dollars and, in commercial areas like design and fashion, so cutting-edge and adroit at salesmanship.
Back at the Vatican, Paolucci shrugged: "Culture is like our family. Every once in a while a politician comes along and suggests selling off what's in our storage rooms. But it's against our DNA to manage cultural patrimony from an economic perspective. Yes, Italy looks after its patrimony badly because we don't have the resources. So we wait for better times."
When asked whether he had any idea when they might come, he glanced at St. Peter's again and laughed. "I'm optimistic," he said. "Being here, it's my duty to be."
By Michael Kimmelman
Thursday, December 18, 2008
ROME: "We are very, very, very old," said Antonio Paolucci, the director of the Vatican Museums, when asked one recent morning whether Italy, rather than moving around the deck chairs of its cultural policy, as it has done for ages, might someday actually consider real reform.
The question came up after a ruckus ensued when Prime Minister Silvio Berlusconi's culture minister, Sandro Bondi, floated the idea some days ago of putting much of the management of the country's 4,000 museums and their cultural heritage into the hands of one person. The person proposed to fill the post was Mario Resca, a businessman who used to run the McDonald's subsidiary in Italy, a pal, as everybody instantly remarked, of Berlusconi.
That plan was then drastically amended in light of fierce opposition from the Italian arts establishment, which includes Paolucci, who made clear he was a friend of Resca. It was nothing personal, he said. But when Pope Leo X, in 1515, wanted someone to look after collections at the Vatican he picked an artist, Raphael.
Paolucci gazed out the large, open picture window in his office, which perfectly framed the ancient dome of St. Peter's.
"É tutto," he said. (Roughly translated, "That says it all.")
Triumphant, as if there really were nothing more anyone could add, he fell silent.
This is Italy, after all. Everyone here believes change is necessary. But then sighs, because it's impossible too. Wholesale change anyway. It's Raphael or bust.
A half-dozen structural revamps of the culture ministry during the last decade haven't really done much except to shuffle around the burden of a creaky and defensive bureaucracy. The country is paralyzed by contradictions. Italians say they identify deeply with their cultural patrimony, but they actually don't visit their museums much. They talk about collective Italian artistic heritage but remain, at heart, profoundly divided by ancient regional differences never quite bridged by unification a century and a half ago, differences that fracture cultural policies.
And so the Berlusconi administration's proposal for a supermanager was ostensibly to cut through decades of red tape, inject an outsider's fresh views and, in straitened times, find new ways to earn more revenue from the country's unparalleled bounty of art and antiquities, especially considering that the ministry's budget is about to be slashed by more than 30 percent over the next three years.
But opponents, not altogether irrationally, stressed that culture demands expertise, not somebody who sold hamburgers, never mind if Resca is admired and successful. The ridiculous choice that presented itself between maintaining the status quo or enlisting the guy who ran McDonald's was somehow typically Italian. In a country where every bid for change is believed to hide some ulterior political motive, detractors suspected the supermanager idea was in fact merely a ploy to ransack national storerooms and grease the path for the prime minister's rich friends who want to hawk precious Italian art abroad
To Americanize the system, in other words. And perhaps in part it was. But Italians, whose cultural heritage policies have roots in the 1500s, still maintain a very different philosophy toward their belongings. They declare not just precious Roman artifacts and Caravaggios to be national patrimony but also every single Italian building, artwork and piece of furniture more than 50 years old.
That's right. Everything over 50 (with art, the artists at least have to be dead) is regulated by patrimony laws requiring Italians to declare what they own if they wish to export it. This means many people prefer to remain secretive about what they have, and if it's art, it therefore doesn't circulate. Whatever's buried in the ground automatically belongs to the state, even if the ground happens to be your backyard.
Beautiful concepts, in principle: collective values, shared heritage, cultural integrity over economy.
In practice, in a country where uncollected taxes are now estimated to top 280 billion euros (about $401 billion) — a reflection, among other things, of Italian doubts about, and lack of identification with, a centralized government — the system relies upon an increasingly aging and perennially underpaid ministry. It is practically unmanageable. It encourages dishonesty and illicit trade; it discourages innovation and outreach. It also stresses conservation — sometimes to a fault.
Only 15 years ago Italian museums agreed to keep their doors open past 2 p.m. A Roman friend was shocked last week to receive a flyer from the Palazzo Massimo, part of the National Museum of Rome, inviting her to "Discover the Massimo." American museums send out these sorts of promotions all the time. Not Italian ones.
In France or Britain, where people feel just as strongly about their cultural heritage, there are incentives for openly declaring one's art and property, including the right to sell outside the country, with the state preserving an option to buy what it deems national patrimony by matching the price at fair market value. At the same time the Louvre will soon start renting parts of its collection to Abu Dhabi, as the Museum of Fine Arts, Boston, has done to Japan. This is a dubious business that can easily lead to conflict, and has in the case of Boston, but also, if properly managed, a way to earn money and share a country's cultural riches. In turn it can be a boon to tourism and a diplomatic tool.
In America tax breaks encourage private contributions to public institutions. Italy is only just beginning to set up a limited system for tax breaks but under complicated circumstances that most Italians don't know about or find mysterious. Smuggling art and antiquities out of the country is a constant problem.
Italians seem almost to relish their own intransigence. Salvatore Settis heads the top advisory board at the culture ministry. "We walk on the streets of cities like Rome, and we may live and work in a palace with historical importance, so we interact with our cultural heritage all the time and therefore we may go into a museum or we may not," he said by way of explaining how it is that Italians prize their cultural past but don't bother to go to their museums to see it. "But another explanation," he added, "is that Italian museums are not attractive."
That's not altogether true. Some are glorious of course. But among the Top 10 most visited in the world, Italy has only the Vatican Museums, and the Vatican isn't even technically part of Italy. As Marisa Dalai Emiliani put it, "We don't think in those terms," meaning in terms of promotion and accessibility. She is president of the Ranuccio Bianchi Bandinelli Association, a cultural research institution.
"When Clement XII opened the Capitoline Museum in 1734, he had two aims," she said the other evening. "The goal was to teach scholars and artists on the one hand, and public enjoyment on the other. Over time even with all the changes we've had in recent years, there has been less of a sense of our museums as places for public enjoyment."
Michele Trimarchi, an economist here, shook his head in disgust. "We have a small but noisy cultural establishment, and there is a kind of religion of self-protection on its part," he said. "The large majority of Italians don't actually care about culture. Absolutely not.
"In the United States you have museums and opera companies that arrange for young people to come for free to encourage new audiences. Here that sort of promotion is blasphemous. Italian museums have no incentive to promote themselves. They are not centers of financial autonomy, because everything they make goes to the central government, so whatever they make will not be reflected in their own financial fortunes."
This is not altogether true either. But it is part of the problem. "And yes," Trimarchi added "we fail to realize that conservation and promotion are two sides of the same coin."
Which they are. In the end it's an odd failure in a country so dependent on culture for tourist dollars and, in commercial areas like design and fashion, so cutting-edge and adroit at salesmanship.
Back at the Vatican, Paolucci shrugged: "Culture is like our family. Every once in a while a politician comes along and suggests selling off what's in our storage rooms. But it's against our DNA to manage cultural patrimony from an economic perspective. Yes, Italy looks after its patrimony badly because we don't have the resources. So we wait for better times."
When asked whether he had any idea when they might come, he glanced at St. Peter's again and laughed. "I'm optimistic," he said. "Being here, it's my duty to be."
*******************
Spain takes jackhammers to another Franco statue
The Associated Press
Thursday, December 18, 2008
SANTANDER, Spain: Crews using jackhammers and blowtorches took down one of Spain's last statues of the late Gen. Francisco Franco on Thursday, eliminating a symbol of decades of right-wing dictatorship.
Workers in the northern city of Santander spent five hours drilling at a concrete base under a 44-year-old copper statue of Franco riding a horse and waving a baton in his right hand, then cut metal pins that anchored the statue to its foundation.
Later, the statue was hoisted with heavy-duty harnesses onto a flatbed truck and hauled off to a city warehouse. Including the base, it had stood about 20 feet (7 meters) tall.
Several hundred people watched from behind barricades.
Many such symbols of Franco, who ruled from 1939 until his death in 1975, have been taken down over the years since democracy was formally restored in Spain in 1978.
With the removal of this Franco statue, now only one remains in public view — in Melilla, a Spanish city on the coast of North Africa. Officials there have said they will take it down as well, although there is no timetable.
Over the course of the Franco regime around 20 statues of him were erected, of the general either standing or on horseback.
A law passed by the Spanish Parliament last year obliges municipal officials to remove public symbols of the Franco era, such as statues or plaques, and to rename streets named after Franco or generals who fought with him in the 1936-1939 Spanish Civil War.
But in the case of Santander, city hall approved the statue's removal several years ago so the plaza could be refurbished.
The law last December pays symbolic tribute to victims of the Franco regime and of the Republican government side he defeated after staging a military uprising against it, the act that started the war.
But very little has been done to implement the order on removing Franco-era symbols, mainly because the government did not give cities a deadline or money to carry out the ruling, said Jesus de Andres Sanz, a political science professor at the National Open University.
"Not much has changed at all," he said.
The Associated Press
Thursday, December 18, 2008
SANTANDER, Spain: Crews using jackhammers and blowtorches took down one of Spain's last statues of the late Gen. Francisco Franco on Thursday, eliminating a symbol of decades of right-wing dictatorship.
Workers in the northern city of Santander spent five hours drilling at a concrete base under a 44-year-old copper statue of Franco riding a horse and waving a baton in his right hand, then cut metal pins that anchored the statue to its foundation.
Later, the statue was hoisted with heavy-duty harnesses onto a flatbed truck and hauled off to a city warehouse. Including the base, it had stood about 20 feet (7 meters) tall.
Several hundred people watched from behind barricades.
Many such symbols of Franco, who ruled from 1939 until his death in 1975, have been taken down over the years since democracy was formally restored in Spain in 1978.
With the removal of this Franco statue, now only one remains in public view — in Melilla, a Spanish city on the coast of North Africa. Officials there have said they will take it down as well, although there is no timetable.
Over the course of the Franco regime around 20 statues of him were erected, of the general either standing or on horseback.
A law passed by the Spanish Parliament last year obliges municipal officials to remove public symbols of the Franco era, such as statues or plaques, and to rename streets named after Franco or generals who fought with him in the 1936-1939 Spanish Civil War.
But in the case of Santander, city hall approved the statue's removal several years ago so the plaza could be refurbished.
The law last December pays symbolic tribute to victims of the Franco regime and of the Republican government side he defeated after staging a military uprising against it, the act that started the war.
But very little has been done to implement the order on removing Franco-era symbols, mainly because the government did not give cities a deadline or money to carry out the ruling, said Jesus de Andres Sanz, a political science professor at the National Open University.
"Not much has changed at all," he said.
Big news in Washington, but far fewer cover it
By Richard Pérez-Peña
Thursday, December 18, 2008
WASHINGTON: A new president arrived from a new party. The balance of power shifted in Congress. Legions of fresh new faces showed up in the nation's capital with new ideas, eager to upend the way the country does business.
The year was 2000, and Cox Newspapers had about 30 people in Washington to cover the new Bush administration.
Eight years later, a similar transformation is under way, the stakes heightened by two foreign wars and the worst economic collapse in decades, but Cox will not be there to cover it. Cox, the publisher of The Atlanta Journal-Constitution, The Austin American-Statesman and 15 other papers, announced this month that its Washington bureau would simply close its doors on April 1.
Cox is not alone. Another major chain, Advance Publications, owner of The Star-Ledger of Newark, The Plain Dealer of Cleveland and other papers, just closed a Washington bureau that had more than 20 people.
Like a number of smaller papers, The San Diego Union-Tribune recently shuttered its bureau, which had four people at the end. Three years ago, the parent company, Copley Press, had an 11-person bureau in Washington, but it has since sold most of its papers.
Those that remain have cut back drastically on Washington coverage, eliminating hundreds of journalists' jobs at a time when the U.S. government — and journalistic oversight of it — matters more than ever. Television and radio operations in Washington are shrinking, too, although not as sharply.
The times may be news-rich, but newspapers are cash-poor, facing their direst financial straits since the Depression. Racing to cut costs as they lose revenue, most have decided that their future lies in local news, not national or international events. That has put a bull's-eye on expensive Washington bureaus.
Albert Hunt, Washington executive editor at Bloomberg News, said he was taken aback by the mood Saturday night at a dinner of the Washington press corps' Gridiron Club. "It was like being at a wake," he said. "Every time you turned around, someone was talking about their bureau being closed or downsized."
A few years ago, after much debate, the club began to admit magazine and television reporters. Now, without them, "there couldn't be a Gridiron Club," Hunt said. "You couldn't get enough newspaper people."
The Tribune Company, which filed for bankruptcy protection last week, recently merged the once-formidable bureaus of The Los Angeles Times, The Chicago Tribune, The Baltimore Sun and other papers. The combined bureau has about 32 people, compared with the more than 70 the papers had there a year ago.
"I think the cop is leaving the beat here, and I think it's a terrible loss for citizens," said Andy Alexander, the Cox bureau chief, who is retiring. "But I can't argue with the business decision that Cox has made, at a time when papers can't even find the resources to cover the local zoning board."
Cox's decision was tied to its plan to sell most of its papers, but even without that impetus, the bureau would have become much smaller, said Sandy Schwartz, president of Cox Newspapers. "There are tremendous economic pressures," he said. "We are in a crisis situation. All newspapers are."
As large chains leave, some of their papers — including two of Cox's — dip into their own budgets to keep a few reporters in Washington, but they are the exceptions.
"From an informed public standpoint, it's alarming," said Representative Kevin Brady, a Republican from the Houston area, who has seen The Houston Chronicle's team in Washington drop to three people, from nine, in two years. "They're letting go those with the most institutional knowledge, which helps reporters hold elected officials accountable."
A few organizations have bucked the trend, including The Wall Street Journal, which has put more reporters in Washington in the last year, and The New York Times, whose bureau has not changed much in size for years. Each paper has almost 50 people in Washington.
To compensate somewhat for the retreat by its clients, The Associated Press bureau recently shuffled reporters to provide state-specific reports from Washington on all 50 states. The Bloomberg News bureau has expanded in recent years, and a few Internet sources, like Politico, are still expanding, but the number of journalists added is a fraction of the number lost.
The real growth has been among narrowly focused news organizations, especially those that report on finance, said Joe Keenan, superintendent of the Senate press gallery. "It seems like, for every newspaper that leaves, a niche publication comes in," he said.
Newspaper executives say it makes no economic sense to have hundreds of reporters writing about the same set of events each day. Even the affected journalists concede that on breaking news, news agency articles are often fine for their papers.
The much greater loss, the journalists say, is the decline of Washington reporting on local matters — the foibles of a hometown congressman or a public works project in the paper's backyard. One after another, they cited the example of the San Diego paper's Washington bureau for exposing the corruption of Representative Randall Cunningham, who is known as Duke.
In accepting a Pulitzer Prize for that work in 2006, "we were bold enough to hope that it would be the first of many, but it turned out to be the high point," said George E. Condon Jr., the last bureau chief. "No matter how much great journalism is done by national organizations, they're simply not geared to monitor closely a member of Congress from, say, San Diego, who's not a national leader."
Several newspapers are locked into leases for more Washington office space than they now need, and have become landlords to others. This year, the Hearst newspapers bureau became a tenant of the McClatchy bureau, and The Union-Tribune had been leasing space to several small papers that now must find new offices.
As bureaus shrink, they cut back on in-depth and investigative projects and from having reporters assigned to cover specific U.S. government agencies.
"We used to cover the Pentagon, combing through defense contracts, and we're covering some of that out of Dallas now, but basically we don't do it anymore," said Carl Leubsdorf, chief of The Dallas Morning News bureau, which had 11 people four years ago, and now has four. "We had someone at the Justice Department, but no longer. We can't free someone up for a long time to do a major project."
Few newspapers travel with the president now — only three or four on some trips — where a dozen would have been the bare minimum a few years ago. For those that still participate, the shared cost of travel and the rotating burden of providing pool reports has soared. The Senate press gallery was recently remodeled in a way that left room for fewer reporters' carrels, and no one complained.
There are no definitive figures on the number of newspaper reporters covering Washington, but the decline has been clear, and it runs counter to history, said Donald Ritchie, associate Senate historian and author of the book "Reporting From Washington: The History of the Washington Press Corps."
"In times of great change and crisis, usually the press corps grows," he said. Despite the strain of the Depression, he said, "When FDR took office, newspapers sent far more people to Washington."
Newspapers in recent years have cut every kind of worker, from drivers to press operators. But the newsroom expense they have deemed particularly expendable is reporting far from home — work that means office rents, heavy travel expenses and some of their biggest salaries. The few papers that had foreign bureaus have closed most of them, but in sheer numbers, the withdrawal from Washington has been much greater.
Industry consolidation, like Tribune absorbing the Times Mirror Company in 2000, has fueled the trend, but it goes far beyond just eliminating duplication.
Most papers, even those in big cities, have wagered their survival on local news, printing far fewer reports from Washington, Beijing or Baghdad, and relying more on news agencies for those articles. A survey of newspaper editors released in July by the Pew Research Center found that 57 percent said they published less national news than they did three years earlier, while 62 percent said they printed more community-level news.
"About four years ago, we became intensely local," said Alexander, the Cox bureau chief. "We provide a very high percentage of copy out of Washington that our papers can't get from other sources, because it's on local people and local issues. And the 17 Cox papers have used an average of 4,500 of our stories a year."
"Of course," he added, "it turns out that didn't mean we were protected."
By Richard Pérez-Peña
Thursday, December 18, 2008
WASHINGTON: A new president arrived from a new party. The balance of power shifted in Congress. Legions of fresh new faces showed up in the nation's capital with new ideas, eager to upend the way the country does business.
The year was 2000, and Cox Newspapers had about 30 people in Washington to cover the new Bush administration.
Eight years later, a similar transformation is under way, the stakes heightened by two foreign wars and the worst economic collapse in decades, but Cox will not be there to cover it. Cox, the publisher of The Atlanta Journal-Constitution, The Austin American-Statesman and 15 other papers, announced this month that its Washington bureau would simply close its doors on April 1.
Cox is not alone. Another major chain, Advance Publications, owner of The Star-Ledger of Newark, The Plain Dealer of Cleveland and other papers, just closed a Washington bureau that had more than 20 people.
Like a number of smaller papers, The San Diego Union-Tribune recently shuttered its bureau, which had four people at the end. Three years ago, the parent company, Copley Press, had an 11-person bureau in Washington, but it has since sold most of its papers.
Those that remain have cut back drastically on Washington coverage, eliminating hundreds of journalists' jobs at a time when the U.S. government — and journalistic oversight of it — matters more than ever. Television and radio operations in Washington are shrinking, too, although not as sharply.
The times may be news-rich, but newspapers are cash-poor, facing their direst financial straits since the Depression. Racing to cut costs as they lose revenue, most have decided that their future lies in local news, not national or international events. That has put a bull's-eye on expensive Washington bureaus.
Albert Hunt, Washington executive editor at Bloomberg News, said he was taken aback by the mood Saturday night at a dinner of the Washington press corps' Gridiron Club. "It was like being at a wake," he said. "Every time you turned around, someone was talking about their bureau being closed or downsized."
A few years ago, after much debate, the club began to admit magazine and television reporters. Now, without them, "there couldn't be a Gridiron Club," Hunt said. "You couldn't get enough newspaper people."
The Tribune Company, which filed for bankruptcy protection last week, recently merged the once-formidable bureaus of The Los Angeles Times, The Chicago Tribune, The Baltimore Sun and other papers. The combined bureau has about 32 people, compared with the more than 70 the papers had there a year ago.
"I think the cop is leaving the beat here, and I think it's a terrible loss for citizens," said Andy Alexander, the Cox bureau chief, who is retiring. "But I can't argue with the business decision that Cox has made, at a time when papers can't even find the resources to cover the local zoning board."
Cox's decision was tied to its plan to sell most of its papers, but even without that impetus, the bureau would have become much smaller, said Sandy Schwartz, president of Cox Newspapers. "There are tremendous economic pressures," he said. "We are in a crisis situation. All newspapers are."
As large chains leave, some of their papers — including two of Cox's — dip into their own budgets to keep a few reporters in Washington, but they are the exceptions.
"From an informed public standpoint, it's alarming," said Representative Kevin Brady, a Republican from the Houston area, who has seen The Houston Chronicle's team in Washington drop to three people, from nine, in two years. "They're letting go those with the most institutional knowledge, which helps reporters hold elected officials accountable."
A few organizations have bucked the trend, including The Wall Street Journal, which has put more reporters in Washington in the last year, and The New York Times, whose bureau has not changed much in size for years. Each paper has almost 50 people in Washington.
To compensate somewhat for the retreat by its clients, The Associated Press bureau recently shuffled reporters to provide state-specific reports from Washington on all 50 states. The Bloomberg News bureau has expanded in recent years, and a few Internet sources, like Politico, are still expanding, but the number of journalists added is a fraction of the number lost.
The real growth has been among narrowly focused news organizations, especially those that report on finance, said Joe Keenan, superintendent of the Senate press gallery. "It seems like, for every newspaper that leaves, a niche publication comes in," he said.
Newspaper executives say it makes no economic sense to have hundreds of reporters writing about the same set of events each day. Even the affected journalists concede that on breaking news, news agency articles are often fine for their papers.
The much greater loss, the journalists say, is the decline of Washington reporting on local matters — the foibles of a hometown congressman or a public works project in the paper's backyard. One after another, they cited the example of the San Diego paper's Washington bureau for exposing the corruption of Representative Randall Cunningham, who is known as Duke.
In accepting a Pulitzer Prize for that work in 2006, "we were bold enough to hope that it would be the first of many, but it turned out to be the high point," said George E. Condon Jr., the last bureau chief. "No matter how much great journalism is done by national organizations, they're simply not geared to monitor closely a member of Congress from, say, San Diego, who's not a national leader."
Several newspapers are locked into leases for more Washington office space than they now need, and have become landlords to others. This year, the Hearst newspapers bureau became a tenant of the McClatchy bureau, and The Union-Tribune had been leasing space to several small papers that now must find new offices.
As bureaus shrink, they cut back on in-depth and investigative projects and from having reporters assigned to cover specific U.S. government agencies.
"We used to cover the Pentagon, combing through defense contracts, and we're covering some of that out of Dallas now, but basically we don't do it anymore," said Carl Leubsdorf, chief of The Dallas Morning News bureau, which had 11 people four years ago, and now has four. "We had someone at the Justice Department, but no longer. We can't free someone up for a long time to do a major project."
Few newspapers travel with the president now — only three or four on some trips — where a dozen would have been the bare minimum a few years ago. For those that still participate, the shared cost of travel and the rotating burden of providing pool reports has soared. The Senate press gallery was recently remodeled in a way that left room for fewer reporters' carrels, and no one complained.
There are no definitive figures on the number of newspaper reporters covering Washington, but the decline has been clear, and it runs counter to history, said Donald Ritchie, associate Senate historian and author of the book "Reporting From Washington: The History of the Washington Press Corps."
"In times of great change and crisis, usually the press corps grows," he said. Despite the strain of the Depression, he said, "When FDR took office, newspapers sent far more people to Washington."
Newspapers in recent years have cut every kind of worker, from drivers to press operators. But the newsroom expense they have deemed particularly expendable is reporting far from home — work that means office rents, heavy travel expenses and some of their biggest salaries. The few papers that had foreign bureaus have closed most of them, but in sheer numbers, the withdrawal from Washington has been much greater.
Industry consolidation, like Tribune absorbing the Times Mirror Company in 2000, has fueled the trend, but it goes far beyond just eliminating duplication.
Most papers, even those in big cities, have wagered their survival on local news, printing far fewer reports from Washington, Beijing or Baghdad, and relying more on news agencies for those articles. A survey of newspaper editors released in July by the Pew Research Center found that 57 percent said they published less national news than they did three years earlier, while 62 percent said they printed more community-level news.
"About four years ago, we became intensely local," said Alexander, the Cox bureau chief. "We provide a very high percentage of copy out of Washington that our papers can't get from other sources, because it's on local people and local issues. And the 17 Cox papers have used an average of 4,500 of our stories a year."
"Of course," he added, "it turns out that didn't mean we were protected."
******************
Obama takes the direct approach to informing the public
By Helene Cooper
Thursday, December 18, 2008
WASHINGTON: President-elect Barack Obama says that he wants to make his administration more responsive to the American people. To that end, his aides are introducing a host of YouTube and other efforts aimed at bypassing the media and communicating directly with voters.
It remains to be seen whether this effort will yield satisfaction on either end of the spectrum — John Q. Public may have as difficult a time getting answers out of government officials as representatives of the mainstream media do. But to get a glimpse of how bypass-the-press might work, look no further than the Bush administration.
As it turns out, Sean McCormack, the State Department spokesman, is ahead of the game on the whole skip-the-press maneuver. McCormack started filing posts from far-flung regions more than a year ago during trips with his boss, Secretary of State Condoleezza Rice.
That was bad enough, as far as reporters covering the State Department were concerned. But reporters got even more ticked off when McCormack gave readers of the State Department blog, Dipnote, a firsthand account in September of the historic meeting between Rice and the Libyan leader Muammar Qaddafi in Tripoli even before he filled in reporters traveling with him on what had happened.
And finally, on Oct. 31, came the icing on the cake, when McCormack unveiled "Briefing 2.0" in the press briefing room of the State Department. Standing before flat screen television monitors and high-tech looking computer screens McCormack didn't take questions from the press, but — gasp! — from the public. And then he put it on YouTube.
It's not clear yet if Obama will ever take to YouTube to take questions on his timetable for withdrawal from Iraq. But that issue, interestingly, did come up on Tuesday when Obama met and held a sort-of press conference with a bunch of grade-school students at Dodge Renaissance Academy in Chicago. (Obama took more questions from the pint-sized group than he had done from reporters in a press conference just a few minutes earlier.)
One student asked Obama about Iraq, and Obama replied that he plans to have troops home in a year and a half. (Obama also was asked whether he was moving to the White House in 2009, to which he replied yes, and then volunteered that he's getting a dog for his daughters, and that they better clean up after it. "I want to make sure my daughters take care of this dog, and if they do their business, and you've got some poop, you don't just leave it there.")
Obama's aides do say that they intend to make full use of the millions of email address that they have collected over the course of the campaign. The Obama-Biden Web site, has an "open for questions" spot that was supposed to be a "two-way dialogue between the transition team and the change.gov community," according to the Web site.
Some of the questions on the "open for questions" site on Wednesday:
Q: "Will you lift the ban on Stem Cell research in your first 100 days in office?"--James M., Nashville, TN.
A: "President-elect Obama is a strong supporter of Federal funding for responsible stem cell research and he has pledged to reverse President Bush's restrictions.
Q: "What will you do to establish transparency and safeguards against waste with the rest of the Wall Street bailout money?" Diane, New Jersey.
Abbreviated answer: "President-elect Barack Obama does not believe an economic crisis is an excuse for wasteful and unnecessary spending. We will put in place reforms to ensure that your money is invested well. All appointees who lead the executive branch departments and rulemaking agencies will be required to conduct the significant business of the agency in public so that every citizen can see in person or watch on the Internet these debates."
YouTube, watch out. Your government is headed your way.
By Helene Cooper
Thursday, December 18, 2008
WASHINGTON: President-elect Barack Obama says that he wants to make his administration more responsive to the American people. To that end, his aides are introducing a host of YouTube and other efforts aimed at bypassing the media and communicating directly with voters.
It remains to be seen whether this effort will yield satisfaction on either end of the spectrum — John Q. Public may have as difficult a time getting answers out of government officials as representatives of the mainstream media do. But to get a glimpse of how bypass-the-press might work, look no further than the Bush administration.
As it turns out, Sean McCormack, the State Department spokesman, is ahead of the game on the whole skip-the-press maneuver. McCormack started filing posts from far-flung regions more than a year ago during trips with his boss, Secretary of State Condoleezza Rice.
That was bad enough, as far as reporters covering the State Department were concerned. But reporters got even more ticked off when McCormack gave readers of the State Department blog, Dipnote, a firsthand account in September of the historic meeting between Rice and the Libyan leader Muammar Qaddafi in Tripoli even before he filled in reporters traveling with him on what had happened.
And finally, on Oct. 31, came the icing on the cake, when McCormack unveiled "Briefing 2.0" in the press briefing room of the State Department. Standing before flat screen television monitors and high-tech looking computer screens McCormack didn't take questions from the press, but — gasp! — from the public. And then he put it on YouTube.
It's not clear yet if Obama will ever take to YouTube to take questions on his timetable for withdrawal from Iraq. But that issue, interestingly, did come up on Tuesday when Obama met and held a sort-of press conference with a bunch of grade-school students at Dodge Renaissance Academy in Chicago. (Obama took more questions from the pint-sized group than he had done from reporters in a press conference just a few minutes earlier.)
One student asked Obama about Iraq, and Obama replied that he plans to have troops home in a year and a half. (Obama also was asked whether he was moving to the White House in 2009, to which he replied yes, and then volunteered that he's getting a dog for his daughters, and that they better clean up after it. "I want to make sure my daughters take care of this dog, and if they do their business, and you've got some poop, you don't just leave it there.")
Obama's aides do say that they intend to make full use of the millions of email address that they have collected over the course of the campaign. The Obama-Biden Web site, has an "open for questions" spot that was supposed to be a "two-way dialogue between the transition team and the change.gov community," according to the Web site.
Some of the questions on the "open for questions" site on Wednesday:
Q: "Will you lift the ban on Stem Cell research in your first 100 days in office?"--James M., Nashville, TN.
A: "President-elect Obama is a strong supporter of Federal funding for responsible stem cell research and he has pledged to reverse President Bush's restrictions.
Q: "What will you do to establish transparency and safeguards against waste with the rest of the Wall Street bailout money?" Diane, New Jersey.
Abbreviated answer: "President-elect Barack Obama does not believe an economic crisis is an excuse for wasteful and unnecessary spending. We will put in place reforms to ensure that your money is invested well. All appointees who lead the executive branch departments and rulemaking agencies will be required to conduct the significant business of the agency in public so that every citizen can see in person or watch on the Internet these debates."
YouTube, watch out. Your government is headed your way.
A Northern Ireland town is a shoppers' paradise
By Eamon Quinn
Thursday, December 18, 2008
NEWRY, Northern Ireland: During the decades of the "Troubles" here, long lines of traffic at the Irish border usually were a sign that the British military was searching vehicles on the road ahead. But these days the lines of traffic leading off the main highway north to this city just inside Northern Ireland are not about guns as much as butter: shoppers from the south are heading north to spend their euros in the malls and supermarkets here.
Since the onset of the financial crisis, the euro has surged in value against the British pound, which circulates in Northern Ireland, making prices in northern stores so irresistible that southerners are flocking over the border in record numbers. So popular has this picturesque city 65 miles north of Dublin become that it has lent its name to the phenomenon, the Newry effect.
Newry has always been a commercial center, but since the Good Friday peace accords of 1998, which ended most of the violence, the city has cashed in on its location, building a bevy of shopping malls. And as sterling has slid, Newry has become the hottest shopping spot within the European Union's open borders, a place where consumers armed with euros enjoy a currency discount averaging 30 percent or more.
It seems the only ones complaining about the cross-border trade are senior political officials in the economically strapped south, who are bemoaning the loss of sales tax revenues and questioning the "patriotism" of the bargain hunters. Ireland's finance minister, Brian Lenihan, said in a recent interview on Irish television that by shopping in Northern Ireland, southerners were "paying Her Majesty's taxes" and not "paying the taxes to the state that you live in."
The paradox of questions of patriotism from senior Irish ministers from the main governing political party, Fianna Fail, which espouses Irish political and economic unity, has not been lost on many in the south or the north. On a recent busy Sunday, patriotism and shopping were hot political topics in the parking lots around Newry.
"It's still Ireland, that's the way I look at it," said Cerrie Byrne, 24, a teacher from north Dublin who was parking beside the crowded Newry malls. Political considerations aside, Byrne expected to save more than $140 on the $700 she and her mother had budgeted to spend in Newry.
Unpacking a shopping cart of liquor, cat food and a single bag of potatoes, Denis Connaughton, 59, a postman who lives near the Dublin airport, about an hour's drive away, dismissed the talk of patriotism, saying his major concern was the crowds. "They were saying there was a four-mile tail-back yesterday," he said, speaking of the traffic backup. He added, though, that the bargains were worth the irritation.
Some weekends the traffic jams stretch up the hill from the sprawling parking lots around Newry's malls southward onto the main Dublin-Belfast highway to the scenic border crossing at Ravensdale Glen. It was once marked by a huge British Army base, which has since been dismantled to allow for a widening of the highway.
Newry, like many border towns, fell on hard times during the Troubles. The small city lies at the end of the beautiful Carlingford Lough waterway, dominated on one side by the Mournes, mountains that in a famed ballad "sweep down to the sea." On the other side rise the Cooley Mountains, central to Celtic legends.
But scenery is not on the minds of drivers, who circle the two big malls searching for places to park. An overwhelming majority of the cars are from the south: the large four-wheel-drive vehicle from 30 miles away is parked alongside family cars from Dublin and the surrounding counties, while the big white van and the excursion bus registered in Monaghan, used by American tourists in the summer, had evidently found profitable work out of season.
In the main large supermarket this month, shelves were being emptied. The buckets of charity workers, who were collecting for an accordion marching band from a nearby town, were filling mostly with euros, not British pounds. Southern shoppers were doing pleasing calculations of the euro equivalents of prices marked in sterling.
A recent retail industry survey suggests that one in four households in counties as far west as Galway — on the Atlantic coastline, about four hours away — shop for groceries in Northern Ireland. Making the trip even more profitable for hundreds of thousands of southern shoppers, sales taxes on some goods have been cut in recent weeks in the north, while the government in Dublin has increased taxes on goods in the south.
Alan Trainor, 49, a Newry local who works in O'Neill's, a sporting goods store that sells merchandise of the Gaelic Athletic Association, said some of its best-selling jerseys were from counties like Kerry and Cork, far to the south, not those nearby, like Armagh or Tyrone.
"A lady was telling me last week that she bought a bottle of Bailey's Irish Cream that was 9.95 euros in Newry," the equivalent of $14.24, he said. "She showed me a bottle she had bought in Cork, and it was 35 euros. That speaks for itself. She would have a round trip of 400 to 500 miles. It must be worth her while."
By Eamon Quinn
Thursday, December 18, 2008
NEWRY, Northern Ireland: During the decades of the "Troubles" here, long lines of traffic at the Irish border usually were a sign that the British military was searching vehicles on the road ahead. But these days the lines of traffic leading off the main highway north to this city just inside Northern Ireland are not about guns as much as butter: shoppers from the south are heading north to spend their euros in the malls and supermarkets here.
Since the onset of the financial crisis, the euro has surged in value against the British pound, which circulates in Northern Ireland, making prices in northern stores so irresistible that southerners are flocking over the border in record numbers. So popular has this picturesque city 65 miles north of Dublin become that it has lent its name to the phenomenon, the Newry effect.
Newry has always been a commercial center, but since the Good Friday peace accords of 1998, which ended most of the violence, the city has cashed in on its location, building a bevy of shopping malls. And as sterling has slid, Newry has become the hottest shopping spot within the European Union's open borders, a place where consumers armed with euros enjoy a currency discount averaging 30 percent or more.
It seems the only ones complaining about the cross-border trade are senior political officials in the economically strapped south, who are bemoaning the loss of sales tax revenues and questioning the "patriotism" of the bargain hunters. Ireland's finance minister, Brian Lenihan, said in a recent interview on Irish television that by shopping in Northern Ireland, southerners were "paying Her Majesty's taxes" and not "paying the taxes to the state that you live in."
The paradox of questions of patriotism from senior Irish ministers from the main governing political party, Fianna Fail, which espouses Irish political and economic unity, has not been lost on many in the south or the north. On a recent busy Sunday, patriotism and shopping were hot political topics in the parking lots around Newry.
"It's still Ireland, that's the way I look at it," said Cerrie Byrne, 24, a teacher from north Dublin who was parking beside the crowded Newry malls. Political considerations aside, Byrne expected to save more than $140 on the $700 she and her mother had budgeted to spend in Newry.
Unpacking a shopping cart of liquor, cat food and a single bag of potatoes, Denis Connaughton, 59, a postman who lives near the Dublin airport, about an hour's drive away, dismissed the talk of patriotism, saying his major concern was the crowds. "They were saying there was a four-mile tail-back yesterday," he said, speaking of the traffic backup. He added, though, that the bargains were worth the irritation.
Some weekends the traffic jams stretch up the hill from the sprawling parking lots around Newry's malls southward onto the main Dublin-Belfast highway to the scenic border crossing at Ravensdale Glen. It was once marked by a huge British Army base, which has since been dismantled to allow for a widening of the highway.
Newry, like many border towns, fell on hard times during the Troubles. The small city lies at the end of the beautiful Carlingford Lough waterway, dominated on one side by the Mournes, mountains that in a famed ballad "sweep down to the sea." On the other side rise the Cooley Mountains, central to Celtic legends.
But scenery is not on the minds of drivers, who circle the two big malls searching for places to park. An overwhelming majority of the cars are from the south: the large four-wheel-drive vehicle from 30 miles away is parked alongside family cars from Dublin and the surrounding counties, while the big white van and the excursion bus registered in Monaghan, used by American tourists in the summer, had evidently found profitable work out of season.
In the main large supermarket this month, shelves were being emptied. The buckets of charity workers, who were collecting for an accordion marching band from a nearby town, were filling mostly with euros, not British pounds. Southern shoppers were doing pleasing calculations of the euro equivalents of prices marked in sterling.
A recent retail industry survey suggests that one in four households in counties as far west as Galway — on the Atlantic coastline, about four hours away — shop for groceries in Northern Ireland. Making the trip even more profitable for hundreds of thousands of southern shoppers, sales taxes on some goods have been cut in recent weeks in the north, while the government in Dublin has increased taxes on goods in the south.
Alan Trainor, 49, a Newry local who works in O'Neill's, a sporting goods store that sells merchandise of the Gaelic Athletic Association, said some of its best-selling jerseys were from counties like Kerry and Cork, far to the south, not those nearby, like Armagh or Tyrone.
"A lady was telling me last week that she bought a bottle of Bailey's Irish Cream that was 9.95 euros in Newry," the equivalent of $14.24, he said. "She showed me a bottle she had bought in Cork, and it was 35 euros. That speaks for itself. She would have a round trip of 400 to 500 miles. It must be worth her while."
****************
Parity for sterling vs euro in sight
Reuters
Thursday, December 18, 2008
By Jessica Mortimer
Sterling hit a record low against a basket of currencies on Thursday and closed in on parity versus the euro, as expectations for further hefty cuts in interest rates underlined the fragile state of the economy.
Heavy selling of the pound accelerated after Bank of England deputy governor Charles Bean said rates could fall "all the way to near zero" from 2 percent now and that further capital injections into banks may be required.
With the euro rallying broadly on the world's foreign exchanges on improving yield and rate spreads, Bean's comments helped push the single currency up over 2.5 percent at one point to a record high against sterling of 95.56 pence.
The sharp losses against the currency of its main trading partner also sent the pound tumbling to 76.6 on a trade-weighted basis, its lowest on daily records kept by the BoE going back to 1990.
"There may be some technical resistance to get to parity, but chasing yield is all the market is interested in," Bank of New York Mellon currency strategist Neil Mellor said.
"UK interest rates are going to the floor but euro zone rates are not going to be matching those kind of falls," he said.
Interest rates are currently half a percentage point lower than rates in the euro zone and with European Central Bank policymakers failing to give any hint of near-zero rates in the single currency bloc, the pound is seen hurtling towards parity.
By 3:12 p.m. British time, the euro was up 1.7 percent against the pound at 94.35 pence, while the pound lost 1.3 percent against the dollar to $1.5300.
The euro is heading for its strongest weekly and monthly performance against the pound since its introduction in 1999.
"The groundswell is for sterling to weaken," Citigroup currency strategist Michael Hart said.
Speaking in a regular parliamentary session, Chancellor Alistair Darling gave no suggestion that the government is concerned by sterling weakness, saying that a weaker pound could help exports.
UNCONVENTIONAL BOE MEASURES SEEN
The Bank of England has already slashed borrowing rates by 300 basis points, with further cuts widely expected in the new year.
As interest rates fall closer to zero, the BoE may have to look to unconventional ways of injecting monetary stimulus into the economy, possibly by buying up government debt.
The BoE's Charles Bean openly suggested in the FT interview that quantitative easing -- action to increase money supply by buying assets -- is already under discussion.
"The substantive questions in relation to so-called quantity easing relates to what assets you want to purchase," he said.
Meanwhile, better-than-expected retail sales data failed to lift sterling sentiment as they were offset by news of record high government borrowing and shrinking mortgage lending, underlining the scale of the country's economic downturn.
(Reporting by Jessica Mortimer; Editing by Victoria Main)
Reuters
Thursday, December 18, 2008
By Jessica Mortimer
Sterling hit a record low against a basket of currencies on Thursday and closed in on parity versus the euro, as expectations for further hefty cuts in interest rates underlined the fragile state of the economy.
Heavy selling of the pound accelerated after Bank of England deputy governor Charles Bean said rates could fall "all the way to near zero" from 2 percent now and that further capital injections into banks may be required.
With the euro rallying broadly on the world's foreign exchanges on improving yield and rate spreads, Bean's comments helped push the single currency up over 2.5 percent at one point to a record high against sterling of 95.56 pence.
The sharp losses against the currency of its main trading partner also sent the pound tumbling to 76.6 on a trade-weighted basis, its lowest on daily records kept by the BoE going back to 1990.
"There may be some technical resistance to get to parity, but chasing yield is all the market is interested in," Bank of New York Mellon currency strategist Neil Mellor said.
"UK interest rates are going to the floor but euro zone rates are not going to be matching those kind of falls," he said.
Interest rates are currently half a percentage point lower than rates in the euro zone and with European Central Bank policymakers failing to give any hint of near-zero rates in the single currency bloc, the pound is seen hurtling towards parity.
By 3:12 p.m. British time, the euro was up 1.7 percent against the pound at 94.35 pence, while the pound lost 1.3 percent against the dollar to $1.5300.
The euro is heading for its strongest weekly and monthly performance against the pound since its introduction in 1999.
"The groundswell is for sterling to weaken," Citigroup currency strategist Michael Hart said.
Speaking in a regular parliamentary session, Chancellor Alistair Darling gave no suggestion that the government is concerned by sterling weakness, saying that a weaker pound could help exports.
UNCONVENTIONAL BOE MEASURES SEEN
The Bank of England has already slashed borrowing rates by 300 basis points, with further cuts widely expected in the new year.
As interest rates fall closer to zero, the BoE may have to look to unconventional ways of injecting monetary stimulus into the economy, possibly by buying up government debt.
The BoE's Charles Bean openly suggested in the FT interview that quantitative easing -- action to increase money supply by buying assets -- is already under discussion.
"The substantive questions in relation to so-called quantity easing relates to what assets you want to purchase," he said.
Meanwhile, better-than-expected retail sales data failed to lift sterling sentiment as they were offset by news of record high government borrowing and shrinking mortgage lending, underlining the scale of the country's economic downturn.
(Reporting by Jessica Mortimer; Editing by Victoria Main)
******************
Mandelson says retailers must adapt to survive
Reuters
Thursday, December 18, 2008
LONDON: Well-established retail businesses will have to adapt to an increasingly competitive market and cannot rely on direct government aid in tough times, business minister Peter Mandelson said on Thursday.
The minister was speaking after Woolworths, a bastion of the high street for the past 99 years, was set to close by January 5 with the loss of 27,000 jobs unless a last-minute buyer can be found.
Mandelson said companies like Woolworths needed to change with the times to survive.
"Of course with the emergence of very many more, very productive, competitive retail outlets, older established names are going to come under pressure," he told SKY television.
"Now they have got to change, restructure, and keep up and match that competitive pressure if they are going to survive.
"And that is a tough lesson I am afraid for all of us in the economy.
"And the government's job is to help that restructuring, to help companies, outlets, change with the times, so they can maintain their viability.
"But if at the end of the day that's not possible then we have and we will do everything we can to find alternative jobs for those who are directly affected by any business failure."
Woolworths would be the first big-name retailer in the UK to collapse totally as a result of the economic downturn.
Several banks have suffered but those have been rescued by the government or been bought out by rivals.
Mandelson has said the government is looking at whether the struggling car industry should be given support but he ruled out sweeping bailouts across the economy.
In a speech on Wednesday the minister said the economy would emerge from the downturn with a smaller financial sector, weaker consumer spending and fewer public sector jobs.
(Reporting by Avril Ormsby; Editing by Chris Wickham)
Reuters
Thursday, December 18, 2008
LONDON: Well-established retail businesses will have to adapt to an increasingly competitive market and cannot rely on direct government aid in tough times, business minister Peter Mandelson said on Thursday.
The minister was speaking after Woolworths, a bastion of the high street for the past 99 years, was set to close by January 5 with the loss of 27,000 jobs unless a last-minute buyer can be found.
Mandelson said companies like Woolworths needed to change with the times to survive.
"Of course with the emergence of very many more, very productive, competitive retail outlets, older established names are going to come under pressure," he told SKY television.
"Now they have got to change, restructure, and keep up and match that competitive pressure if they are going to survive.
"And that is a tough lesson I am afraid for all of us in the economy.
"And the government's job is to help that restructuring, to help companies, outlets, change with the times, so they can maintain their viability.
"But if at the end of the day that's not possible then we have and we will do everything we can to find alternative jobs for those who are directly affected by any business failure."
Woolworths would be the first big-name retailer in the UK to collapse totally as a result of the economic downturn.
Several banks have suffered but those have been rescued by the government or been bought out by rivals.
Mandelson has said the government is looking at whether the struggling car industry should be given support but he ruled out sweeping bailouts across the economy.
In a speech on Wednesday the minister said the economy would emerge from the downturn with a smaller financial sector, weaker consumer spending and fewer public sector jobs.
(Reporting by Avril Ormsby; Editing by Chris Wickham)
*********************
Morgan Sindall sees "record" profit
Reuters
Thursday, December 18, 2008
LONDON: Builder Morgan Sindall said on Thursday it is in line to hit its targets of "record" profits this year, bolstered by government-funded projects.
The construction and regeneration group said its order book is robust at 3.8 billion pounds with a development pipeline of 1.3 billion pounds in its urban regeneration division.
"The group is financially robust and remains on track to achieve a record result in 2008 with each of our divisions performing in line with our expectations," said the company in a trading statement.
Morgan Sindall added that the decline in activity in the construction sector is being offset by its range of activities, with 70 percent of its work in the construction sector being generated from the public sector and the government promising a ramp-up in affordable housing projects.
Nonetheless, Morgan Sindall's share price has lost over half its value this year and it is forecasting a fall in demand for its design and furniture supply unit, Fit Out, in 2009.
It added it is closely monitoring cash management and cost savings in each division in the current economic climate.
(Reporting by Lorraine Turner; Editing by Victoria Bryan)
Reuters
Thursday, December 18, 2008
LONDON: Builder Morgan Sindall said on Thursday it is in line to hit its targets of "record" profits this year, bolstered by government-funded projects.
The construction and regeneration group said its order book is robust at 3.8 billion pounds with a development pipeline of 1.3 billion pounds in its urban regeneration division.
"The group is financially robust and remains on track to achieve a record result in 2008 with each of our divisions performing in line with our expectations," said the company in a trading statement.
Morgan Sindall added that the decline in activity in the construction sector is being offset by its range of activities, with 70 percent of its work in the construction sector being generated from the public sector and the government promising a ramp-up in affordable housing projects.
Nonetheless, Morgan Sindall's share price has lost over half its value this year and it is forecasting a fall in demand for its design and furniture supply unit, Fit Out, in 2009.
It added it is closely monitoring cash management and cost savings in each division in the current economic climate.
(Reporting by Lorraine Turner; Editing by Victoria Bryan)
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ARCHIVES 01/01/08 - 15/12/08
Due to a techinical problem with uploading photos onto the original blog A Place in the Auvergne I had to create A Place in the Auvergne (Part 2)
A Place in the Auvergne is - and was always conceived as - a one year project and it will end on December 31st, 2008.
For archives up to and including December 15th, 2008, please visit
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