The case of the failure of Mexico’s Laguna Verde Nuclear Plant, nestled on the jagged Veracruz seacoast, reveals the need to nix nukes and fortify public right-to-know mechanisms.
With Latin American countries still turned off to nuclear power two years after Japan’s monumental Fukushima meltdowns dispersed radioactive fallout across the ocean to them, events inside a similar facility in Mexico have fueled mounting skepticism over the potential for developing the energy technology.
Fissures, leaks, shutdowns, government secrecy, a failed upgrade, alleged bid-rigging and contract fraud at Mexico’s lone atomic power station, the state-run Laguna Verde Nuclear Plant, were vetted during the 9th Regional Congress on Radiation Protection and Safety held in Rio de Janeiro in April.
The audience of Latin American experts eager to share the information at the professional association forum starred scientists from Argentina and Brazil, which also have nuclear power plants, as well as from Venezuela, Chile and Cuba, which had made tentative moves toward establishing atomic energy stations before the Fukushima catastrophe stymied aspirations.
The irregularities at Laguna Verde came to light thanks to a courageous group of anonymous high-level employees inside the power plant and to the public information requests by their spokesperson, Mexico’s National Autonomous University Physics Professor Bernardo Salas Mar, a former plant employee and valiant whistleblower.
Some of Salas Mar’s most recent research was accepted at the International Radiation Protection Association congress in Brazil, but his university did not provide him with travel expenses to attend in person.
Salas faces high-level attempts to have him fired as a result of his persistent efforts to make public his discoveries of dangerous faults and cover-ups at the Laguna Verde plant. But Salas’ achievements speak for themselves. Were it not for his ceaseless hammering on the doors of the 10-year-old Federal Information Access Institute (IFAI), perhaps no one ever would have known about the latest incidents at Laguna Verde until it was too late.
Based on his freedom-of-information requests to the institute, Salas and Laguna Verde’s own technicians revealed in an April 19 letter to President Enrique Peña Nieto that Mexico has been defrauded to the tune of more than a half-billion dollars by the international companies that won the bid for the federal contract to uprate the two reactors at the plant located near the Caribbean port of Veracruz.
“Uprating” is industry jargon for boosting the capacity of nuclear reactors so they can generate more electricity.
The letter to the President alleges the Federal Electricity Commission purposely botched the bid letting by omitting the usual requirement for a contractor to abide by the Review Standard for Extended Power Uprates. Apparently the CFD did this to favor the Spanish company Iberdrola Ingenería and the French company Alstom Mexico, which lacked the capability to carry out the changes to the nuclear steam supply system according to standard specifications.
Employees in key positions at Laguna Verde had alerted the two previous presidential administrations to the issue as far back as 2006, communicating their “worry over the capacity-boosting work contemplated for this nuclear plant, considering it to be unreliable, risky and overpriced,” according to the letter. Still Iberdrola and Alstom got the $605-million contract to increase the plant’s power output by 20 percent.
Iberdrola announced the successful conclusion of the five-year, $605-million modernization project in February, noting that it overhauled equipment dating back to 1990, in the project that created more than 2,000 jobs.
The president of Alstom in Mexico, Cintia Angulo, was arrested a week after the announcement of the upgrade conclusion on charges of giving false testimony in an unrelated French case of non-payment.
However, the more spectacular fraud for both firms will prove to be the Mexican uprate contract, which not only failed to accomplish the goal of boosting Laguna Verde’s power output, but also left the reactors in worse condition than before, Salas and employees charge.
The Federal Electricity Commission responded to Salas’ inquiries, saying that Reactor Unit 2 would be operating at 100 percent of planned output in April and Unit 1 would be at 100 percent in May.
Nonetheless, after further information requests, Salas revealed that the National Nuclear Safety Commission has denied both reactors the licenses to operate at higher output in the aftermath of the contract, due precisely to the fact that the guidelines for the nuclear steam supply system were not followed.
Employees say the failure to follow the guidelines during the uprate cracked the jet pumps that inject the water to the core of the General Electric boiling water reactors, the same kind that melted down due to a generator system crash at Fukushima.
“The situation of the reactors is not serious yet, but operating with fissures could cause a major problem to the extent that it could endanger national security. (Remember Fukushima and Chernobyl.)” the letter to President Peña Nieto says. The employees consider it “risky and unacceptable for both reactors to continue operating with the fissures that have been encountered.”
Simultaneous suspension of operations at both reactors in September 2012 and related confusing news releases, some blaming the pump fissures, caused alarm in the communities around the installation.
Authorities first said a diesel generator breakdown was at fault for the interruption in service of one reactor, while fuel-cell restocking was the reason for a stoppage at the other.
The next day they said a clogged seawater intake was part of the reason for removing both reactors from service. An escape of hydrogen gas from a condenser was posited. And finally, officials stated to the public that the fissures in both reactors’ water pumps were to blame.
Government secrecy about details surrounding the event accentuated longstanding worries in the population near the plant. The fear of accidents and serious concerns over the ongoing situation was highlighted by an NGO’s court appeal arguing that people should be exempted from paying their light bills due to the fact that their civil rights had been violated by the lack of safety measures and accountability at Laguna Verde.
In response to Salas’ information requests, the Energy Secretariat, in charge of the Federal Electricity Commission (CFE) and the National Nuclear Safety Commission (CNSNS), said it didn’t have the answers to his questions.
Its commissions presented incongruous replies. The vagueness of the answers provided by the Federal Electricity Commission prompted the researcher to appeal to the IFAI to require revised responses.
After his second round of questioning, he was able to deduce that the cooling water intake channel had indeed filled with sediment and it had been dredged, so it did not present a hazard and did not cause the reactor operations’ interruption.
He also then could determine that the hydrogen had been released from the ductwork into the cooling water of the main generator, during the month of August. While the amount of gas was unknown, the escape was not to the atmosphere, and neither presented a danger nor was cause for halting operations.
The CSNSNS responded that the diesel generator failed when a piston stuck due to lack of lubrication resulting from a bearing problem on Sept. 12. The event did not endanger life and limb, according to Salas.
Simultaneous reloading of fuel cells at both reactors was the most likely reason for the concurrent stalling, Salas concluded after the numerous freedom-of-information requests.
While the main present dangers appear to be the fractures in the cores’ water pumps, a Jan. 11, 2013 scram (emergency reactor shutdown) remains to be inspected under the looking glass of the IFAI.
The institute created by decree in 2002 has provided important tools for shedding light on the machinations of the nuclear plant, among other formerly opaque federal operations.
Yet, as this case underscores, IFAI should strengthen its own processes in order to avoid the kind of inconsistent and self-belying responses that ensnared this most recent of many investigations into the lack of security at Laguna Verde.
Even so, that won’t protect the population from the specter of accidents or deteriorating health and safety in the advent of air and water pollution from the facility, which is located on a part of the coast with only poorly maintained roads to offer escape routes.
If Peña Nieto and company are to be more responsive to community needs than their predecessors, one way to show good intentions would be to comply with demands for conducting an emergency public evacuation drill, something that never has been done in the history of the 17-year-old nuclear plant. Another would be to take the irresponsible parties to court to establish accountability.
May 11, 2013
Posted by aletho |
Corruption, Deception, Nuclear Power | Enrique Peña Nieto, Iberdrola, International Radiation Protection Association, Mexico, Nuclear power |
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Senate Foreign Relations Committee Chairman Robert Menendez (D-NJ) met with Honduran president Porfirio “Pepe” Lobo on Wednesday as part of a tour through Central America. According to press reports, Menendez characterized the trip, during which the Senator also visited El Salvador and Guatemala, as an opportunity to evaluate regional counter-narcotics and security initiatives that the U.S. is funding at increasing levels through the Central American Regional Security Initiative (CARSI). A Spanish-language press report on the trip quotes Menendez as having said that he intends to “explore the specific points of this funding proposal,” and that he wants to “see what works and what does not.”
The State Department’s 2014 budget proposal, submitted on April 10, requests $161.5 million in funding for CARSI, a $26 million increase from the previous year. The proposal requests $4.5 million in foreign military financing specifically for Honduras, an increase of 450% over the FY2012 total. And Just the Facts, a joint project of nonpartisan groups focused on U.S.-Latin American relations, notes that current budget proposals have total U.S. military and police funding for Honduras in FY2014 at $8.7 million, a 63% increase over 2013 projections. Furthermore, according to a Congressional Research Service report, as of last July the State Department and USAID had planned to allocate a combined $72 million to Honduras in FY2012.
These rising levels of funding for the police and military run counter to the concerns of many lawmakers in Washington around the lack of accountability for U.S. involvement in Honduran security and anti-narcotics operations. It also highlights the seriousness of recent reports that the State Department has been supporting units under the command of National Police Chief Juan Carlos “El Tigre” Bonilla, who allegedly ran death-squads a decade ago, and, more broadly, that the police have been accused of continuing to commit death-squad murders today. In December the National Autonomous University, citing the police’s own reports, announced that police had killed 149 civilians in the previous two years.
It is unclear whether or not Menendez raised these concerns while meeting with President Lobo. But Fox News Latino reports that Menendez praised the head of state for helping stabilize the country after the June 2009 coup. Readers who have followed CEPR’s work will remember that Lobo came to power through elections held by the coup regime under a cloud of political repression, which was why the European Union, the Organization of American States, and the Carter Center refused to send election observers. Since then, members of the opposition party and the LGBT community, land rights activists, lawyers and journalists have been murdered with nearly absolute impunity.
In Guatemala, Menendez met with President Otto Pérez Molina and Minister of Governance Mauricio López Bonilla. López Bonilla was part of the six-officer junta that ruled with Efraín Ríos Montt in 1982-3, while Pérez Molina was a commanding officer in the region where the government carried out a campaign of murder, rape and torture. Ríos Montt now faces charges of genocide and crimes against humanity in a Guatemalan court.
Menendez, meanwhile, is still on the hot seat for having accepted free trips to the Dominican Republic from a major financial backer, Dr. Salomon Melgen. (Menendez has since reimbursed Melgen.) Earlier this year, it was revealed that the senator discouraged U.S. officials from donating port security equipment to the Dominican Republic out of concern that doing so could undermine Melgen’s company’s lucrative contract, though Menendez did not mention the doctor or his company by name. According to federal investigators, Menendez also advocated on Melgen’s behalf to a senior Medicare official regarding the doctor’s reported $8.9 million debt, which he incurred by overbilling the government.
While the Senate Ethics Committee continues to investigate Menendez’s actions, the Washington Post reported on March 14 that a federal grand jury in Miami is also looking into Menendez’s role in advocating for his donor’s financial interests. In response to this news, the New Jersey Star-Ledger’s editorial board said the grand jury investigation undermines “the senator’s credibility and his effectiveness as chairman of the Committee on Foreign Relations” and urged him to step down from that post.
May 4, 2013
Posted by aletho |
Corruption, Militarism, Timeless or most popular, War Crimes | Bob Menendez, Efraín Ríos Montt, Honduras, Human rights, Latin America, Otto Pérez Molina, United States |
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An Interview with Tim Anderson on Obama’s Commerce Nominee, Penny Pritzker
President Barrack Obama has nominated his long time friend and top fundraiser, Chicago-based Multibillionaire, Penny Pritzker, to be the next Secretary of Commerce. According to the Chicago Tribune, “Pritzker’s nomination could prove controversial. She is on the board of Hyatt Hotels Corp., which was founded by her family and has had rocky relations with labor unions, and… She could also face scrutiny over the collapse of Superior Bank, which was co-owned by her family. The bank, based in Hinsdale, Ill., was involved in subprime mortgage lending, and its failure in 2001 stirred charges of fraud and mismanagement.”
Penny Pritzker, says Chicago-Based independent banking investigator Tim Andersen, played fast and loose with the American Dream. Anderson, who has been investigating for many years Pritzker’s pioneering sub-prime operations, says Superior Bank in Chicago, specifically targeted poor and working class people of color across the country. He asserts that her extreme wealth and privilege has not only made her virtually untouchable by law enforcement, but now her appointment to Sec of Commerce, will allow her to cleanse her sub-prime banking record by becoming the Secretary of Commerce.
D.B Let’s start with some deep background on Penny Pritzker and the family holdings…
TA: There are 11 senior Pritzkers, the descendants of A. M Pritzker, who is the 11th wealthiest person after Forbes. But they are different as far as their wealth goes. Before they broke up the family dynasty because of a suit between two of the junior siblings, they had about 15 billion dollars. Bloomberg thought it was more like 38 billion because so many of the assets are major companies that are privately owned, it’s hard to evaluate that.
DB: $38 billion, with a B.
TA: $38 billion. One publication listed eight casinos, another listed 13, with each license worth a half a million dollars. There is another $5-7 billion in casinos. When you own 13 casinos for 5-7 billion, you are a player in the casino business. That’s just the hotels and casinos. There are many other companies they own such as the second largest chewing tobacco company, which they sold for 3.5 billion dollars. They actually owned the second and third largest chewing tobacco company, but have since off-loaded those for billions of dollars. Many of their assets are not what society considers clean assets, but hey don’t care. As far as money goes, they want it. When it comes to casinos or chewing tobacco companies, they don’t care. Their wealth is almost incalculable, because according to Forbes magazine, they are the only family in America to have off shore tax-free trusts because they were grandfathered in. Their off shore trust can ship money back to their family tax-free. It was grandfathered in because their grandfather got it through Congress – he was smart to see the future and got it done. Congress closed the loophole and grandfathered him in. Forbesmagazine wrote about the Pritzker’s off shore trust, they emphasized that there are over 1000 separate trusts. Many families have two or three different savings accounts to keep track of what money belongs to who, but when you have over 1000 different trusts to handle the family estate it’s very hard to comprehend how much wealth there is and how many businesses they control. A few years ago, Penny sold TransUnion, the largest credit reporting agency in America, but there’s a question about whether she sold it to herself by selling it to various hedge funds which her family has a large interest in. Until she sold it, you could say that Penny Pritzker had more files on every citizen in America than the CIA and FBI combined, because everybody has a credit score and credit report. Penny Pritzker had the credit scores and report on every single citizen in America.
DB: That’s amazing because before she had TransUnion, she had Superior Bank, through which she destroyed the credit of tens of thousands, hundreds of thousands. You might say she helped destroy the credit of the United States of America.
TA: She had TransUnion while she had Superior Bank, so she controlled the credit scores of everybody who was getting a subprime loan. You pay a higher interest on your subprime loan based on your credit score. Whether or not it was ever brokered between the credit bureau and the bank, we don’t know, but we know the same people control both entities.
DB: What happened with Superior Bank when Barak Obama was an assemblyman in her district?
TA: Superior Bank was acquired back in 1989 as part of the original savings and loan giveaway by M, D and E Wall. As I wrote a in a paper for an economic conference in Denver, Superior Bank was sold to the Pritzkers for 42.5 million dollars. They changed the name from Lion Savings and Loan to Superior Bank after they acquired it. Lion Savings and Loan was sold to the Pritzkers just to put up money for the capital. But as government reports show, they only put up a million dollars cash and pledged their assets as the difference, the capital. That’s not supposed to be done, but they are privileged people so they get privileged deals. After they acquired this for $1 million they also got $640 million in tax credits.
DB: So they paid a million bucks and got $640 million in tax credits.
TA: The tax credits were designed so they could use it in any entity they wanted. They didn’t have to use it on what they bought. It could be sold on the open market for value, the credits could be used to file back taxes or warehouse them for future taxes. So for a million dollars, they got 640 million dollars for agreeing to take over Superior Bank, which they then looted for years then gave it back to the government with an enormous loss to the uninsured depositors and the whole subprime industry.
DB: And the US taxpayers.
TA: Oh yes. Taxpayers have lost very, very dearly. In 2007 and 2008, real estate dropped in value because of the subprime bubble bursting. Penny Pritzker, who ran Superior Bank, is going to claim she was just a silent investor and chairman. I gave the Chicago Sun Times a letter on Superior Bank letterhead that they ran, dated May 31, 2001. Addressed to the management and employees of Superior Bank, it said “with great pleasure…I am able to announce an agreement has been reached with the Office of Supervision for a $351 million plan to recapitalize Superior Bank. They reached the agreement, but they never paid it.
DB: So the Pritzkers never paid the $351 million?
TA: No. They reached the agreement so they could stay open. Then three months later they said that’s a bad deal – let’s just reneg on it. So they told the FDIC, “Here are the keys, you take it.” During that period of time, this letter, signed by Penny Pritzker, told her people – we are going to regain our prominence in the subprime industry. She was so proud of her prominence in the subprime industry. At that time, Wells Fargo, Countrywide and Washington Mutual hadn’t tooled up in the subprime lending as they did later on. One reason is they didn’t have a staff to do it. The FDIC closed down Superior Bank with its thousands and thousands and thousands of employees who made originated mortgages through their origination department. After they were laid off by the close of Superior Bank, they couldn’t work anywhere so they worked for Wells Fargo Countrywide. The whole tool up of Washington Mutual, Countywide and TransUnion are old Superior workers who were out of a job and knew how to make subprime mortgages.
DB: When you read the stories of the time, all the reports, including the Wall Street Journal, said the failure of the Superior Bank may have cost taxpayers between 1 and 2 billion dollars. It’s reported that between 1400 and 1700 savings accounts were gutted at Superior. How many people ended up losing their money at Penny Pritzker’s bank while she was busy working with her people to be sure that Wall Street got in real deep. She started with Meryl Lynch, which is also gone.
TA: These are smart people. Genius doesn’t have a connotation of ethics. Genius is genius unto itself. Let’s leave the ethics equation out of being a genius. The Pritzkers are absolute geniuses at understanding the tax system and investing and put it to their benefit. Warren Buffett is in awe of the Pritzkers. They gave Warren Buffett their Mermin group to manage for them and then he will buy them out as it performs over the years.
DB: So Warren Buffett is one of Penny’s managers?
TA: The Pritzkers, years ago, sold Buffett 40% of the Mermin group with the other 60% acquired by Buffett over a 10 year period based on how well the Mermin group performed. As Warren made the Mermin group more profitable, the Pritzkers got more money, as he had to keep buying it from them. That’s how they let him manage the asset for them. You cannot appreciate their sheer genius until you study all the stories about them. I have run across no family as bright, quick or well connected – with a White House pass. And any day, Penny Pritzker will probably be nominated as Secretary of Commerce by Congress.
DB: Some of those hundreds of people who lost their savings at Superior Bank lived in the same neighborhood as Obama. He knew. He got complaints from people about what Penny was doing, back in the day.
TA: Yes. But Penny and the Pritzkers are a special class of privilege – they are immune. Some major media are finally picking up on this story, but it got a pass four years ago because of the influence of the Pritzker family, which buys both sides of the isle. They are non-partisan, neither republican nor democrat. They will support whoever the incumbent is or is going to be. They invest in people, many of them being politicians, of course.
DB: Yes, they do. Now going back to the first Obama campaign, if the Clintons know they have a subprime bandit running their key opponent’s finances, why didn’t they go after Penny and her subprime operations? But the Clintons had a Pritzker too.
TA: Penny’s brother was co-chairman for Hilary’s campaign. I used to joke that it didn’t matter who won. If Hillary won, her brother would take her to the inaugural ball. If Barack Obama won, as he did, Hilary could take her brother to the inaugural ball. The Pritzkers bought both horses in a two-horse race. It was a no brainer. Society was fed up with George Bush, Dick Cheney, etc. Whoever won the democratic nomination was going to be the next president. The Pritzkers hedged their bet and bet on both horses in a two-horse race. They had one, and her brother had the other.
DB: How powerful are the Pritzkers in their hometown of Chicago?
TA: The Pritzkers have the Pritzker Foundation. The Pritzkers are large contributors to the museum, symphony, opera; anything that they can get their brass plaque above everyone else. They are golden in Chicago. They give away the Pritzker architect award, which is considered the Pulitzer of architecture. They have many others – as they curry favor with everybody. They invest in their own good name. They are very smart and savvy, disregarding what is good for society.
DB: Whatever the banks are doing now, they were doing 20 years ago. She was out of the subprime business by 2001 or 2003 and the FBI decided not to investigate anybody until 2004. How did that happen?
TA: That’s the privilege of the Pritzkers. They are immune to investigation. When the Pritzkers signed off on the deal on the Superior Bank with the FDIC to pay only some of the money, part of the agreement was that the FDIC, for this agreement, which is public record, would not cooperate with any other government agency without the Pritzkers. So the Justice Department couldn’t investigate the Pritzkers without the FDIC’s blessing, and the FDIC agreed they wouldn’t do it. What the Pritzkers did, and they negotiated beautifully, is they negotiated immunity from prosecution for all subprime crimes going back to 2004. In 2002, when the FDIC took over Superior Bank, they ran it for ten months under their management, using all the employees of Superior Bank and their mortgage originators. As the Wall Street Journal reported, for ten months the FDIC was the largest subprime lender in the country. They were taking the mortgages they were making, securitiizing and selling them off.
DB: Hence the Wall Street connection.
TA: Yes. The FDIC ended up working for the Pritzkers.
DB: Let’s talk about their predatory operations. There were many leads, examples, stories about what the Pritzker operation was doing to trap poor people, targeting specifically brown and black people for these predatory loans. They had a whole operation.
TA: I interviewed the only mortgage originator who went to jail out of the Superior Bank operation. The only reason he went to jail is that he pled guilty for the Pritzker’s signing the agreement with the FDIC. All his other cohorts who were going to be indicted were never indicted. I talked to the FBI, and they were ready to indict 14 people in this area. But the one guy, Jason Dune pled guilty and got it behind him. He explained to me that what you do is target a small couple and rip them off by moving the Pritzger subprime loans into their lives.
The subprime people would say they are just giving lower income people and middle America people a chance at the American dream. But these were not fresh mortgages; they were all refinanced mortgages. Superior was in the refinance business. If you had the American dream, the Pritzkers and Superior would push you into an American nightmare. That’s what they did across the country with lending offices under Alliance Funding. You can’t appreciate how large and profitable their operation was. They kept taking all the profits out in distribution dividends for the Pritzkers and then the OTS said, “You are taking so much money out, you are under capitalized.” But rather than give the money back, they said, ”OK, you take over the operation. The subprime business is over and we want out.” So they got out. But they got out without having to take any responsibility, and that is the real shame that has never been dealt with.
DB: So poor Jason Dune told the truth and went to jail for it. Penny stole zillions and she’s going to be the next Secretary of Commerce.
TA: That’s up to our Senate. Does our Senate, in a non-partisan manner, want to stand up and ask Penny a few questions, such as “What was your role in getting subprime mortgage bonds investment grade?” That’s how every pension fund, such as CalPers, the teachers pension fund in California that bought mortgage-backed securities because they were investment grade, lost money. How did they become investment grade? The Pritzker’s genius was that if there is a bond with a thousand mortgages in it, and they’re all subprime, it’s a junk bond by definition. The Pritzkers convinced the rating agencies that if any mortgage goes bad they would take it out of the bond portfolio and put a fresh mortgage in. So the raters said, “if that’s collateral substitution, the bond can’t default.” They forgot to ask the one question: what if you can’t make mortgages anymore? They couldn’t when they were taken over. That was the start of the collapse of subprime mortgages. There never should have been investment grade. But once it became investment grade, Merrill Lynch was doing it with the Pritzkers, then Countrywide, Wells Fargo and Washington Mutual had to do it because every major pension fund wanted these investment grade subprime mortgages. They paid a very high yield and knew they were quality because the rating agency said investment grade triple A. They never were triple A. We all have hindsight. The Pritzkers created the investment grade for the entire subprime mortgage industry. Once that collapsed, the worldwide economy collapsed. And this is the person they want to put as Secretary of Commerce.
DB: The Pritzkers were doing this beginning in the 40s. How could the first Obama campaign, when Obama was a newcomer and Penny was the chair of the finance committee, out fund-raise by two to three times what the well-connected Clintons raised?
TA: The Wall Street Journal wrote a cover story on the genius of what Penny set up. Besides being able to call all her friends to give money, they set up a system through public relations where people on the street pledged on their credit card to give $10 a month to the Obama campaign. The credit card was debited for a year and everybody wanted to be a piece of it. To see the momentum, look at the tapes of inauguration, the night in Chicago when he won the election. There was enormous euphoria in the country. There was euphoria because people were fed up with Bush. Nothing has made Bush look better than the last four years with Obama. Penny, four years later, as Secretary of Commerce, is not going to investigate herself. The circle closes. It’s up to the various editors of major newspapers, television and radio stations, to do their research. It’s all out there and easy to do. I was able to find information, find the documentation, reports. They need to do it and contact the various senators on the committee and make them ask Penny the questions. If Penny can answer the Senate’s questions, the Senate which represents us, then let them vote her in.
DB: Penny never relents – she’s always moving forward. There was an excellent picture of Penny as the President of the Pritzker Realty Group which owns the former navy base with David Pace, who is managing her development in Orlando with Orlando mayor Glenda Hood. She owns a lot of politicians. What has she been up to?
TA: Any politician who is for sale knows how to call Penny and ask for money. What the Pritzkers did in ’01 when the navy decided there would be one recruiting depot in Great Lakes, Chicago-land, the Orlando and San Diego naval bases for recruits were closed. The Pritzkers were able to acquire 1,093 acres for $6900, under $7,000 an acre. That was the price they were paying for it. They were supposed to include some low and moderate-income housing, but after the deal closed, they realized, what a waste, let’s just build million dollar condos and houses. They were also able to sell back to the government open-space land and never paid a penny. They used taxpayer money to buy it by selling back land they couldn’t use. They sold wetlands and swampland as parks. They either got tax credits, which for the Pritzkers was the same as money, or they actually got cash for selling it back. They got financed to buy it through the state and the city of Orlando, which is when the politicians came in. It was a 19 million deal, which became 130 million and they never even used their own money. You cannot duplicate the deals they pull off. They are more than wealth – they are privileged. They can do whatever they want and not be held accountable and the people suffer. There were 1400 uninsured depositors of Superior Bank – the hubris of Penny. It would have been peanuts to be sure that Fran Sweet, and the other known excess depositors of over $100,000 were paid back. They lost their money because they were told the Pritzkers would never let it fail. They put their money in there, though they were nervous putting $100,000 in. It would have been so easy for Penny to pay them off. About a year ago, to get rid of this last debt to the FDIC, the Pritzkers got a discount for paying off their debt to the FDIC early. So Fran Sweet and 1400 other uninsured depositors will never get all their money back. The Pritzkers do not pay their bills. They like to say they pay their debt, but they don’t. This is just contempt – absolute contempt for society.
DB: When Obama was elected the first time, one of the first things Penny did was represent all the major, highest end of the corporate interests in Congress to resist any attempt to make it easy for people to unionize.
TA: One of the largest hotel workers unions, UNITE HERE, is not going to fight this thing with Penny because it would embarrass the president, and since these union people are democrats and love unions and Barak says he loves unions too, they don’t want to jeopardize their relationship with the president. So UNITE HERE is selling out their own people in Chicago, and the whole Hyatt chain throughout the country, to protect the president. It’s disgraceful. They know the story. I’ve had their people interview me twice. The union gets abused by the Pritzkers but they take it because they don’t want to hurt their president. Penny is immune from both sides. The far right doesn’t touch her because they like the kind of money she makes for them, and the left doesn’t want to fight her because Barak is their candidate. They know how to play both horses in a race.
DB: How close is the relationship? Is it true that Michelle and Penny used to run together?
TA: I don’t know. There are stories in the Wall Street Journal and Chicago papers that before Obama was a senator, they used to vacation together in one of Penny’s homes in Michigan. I think it’s accepted that they are very, very close. And for the billion dollars that she raised in 2008, she’s even closer.
DB: Is it true that when Barak Obama was in the Illinois state legislature, he received written complaints from people who were being ripped off by Penny?
TA: That’s my understanding.
DB: When people who lost their money in Superior were hustled, such as by the companies selling off the debt to other companies, people didn’t know who they were paying or who owned their property.
TA: The Pritzkers would sell them into bonds, and they got all their money back, plus a profit when someone else owned the debt. You made the payments to Superior Bank, but the notes had been sold to other investors – Superior just serviced the debt. People’s lives were made miserable because they would make a payment, but it would be held until after a due date and then they’d get a penalty.
DB: They paid the interest for years but could never pay down the loan.
TA: There’s a whole show of how you run predatory lending. The Pritzkers are masters. This was known by the government on July 3, 2000. The NCRC, National Coalition of Reinvestment Act, wrote a letter to the OTS complaining that Superior Bank was the largest predatory lender in the land. They were complaining about it and talking about how they would book these mortgages and set them up so the people would fail – it was designed to fail so they could foreclose. The report shows how Superior Bank targeted minorities three and four times greater than any other subprime lender. Superior Bank in 98, 99 and 2000 targeted the minority community for their subprime mortgages – to refinance them and get them into trouble. No shame whatsoever.
DB: There were many suits that non-profits took on.
TA: There was one successful guy who represented the James and Irene Phillips family in West Virginia. They were mentally challenged.
DB: I read that lawsuit and spoke to their social policy attorney. They were mostly minors and were targeted by the zip codes. You could see whole zip codes of houses disappearing because Penny’s front man was saying meet me at McDonalds and people would sign over what their house was worth, 18, 20 30 thousand dollars. It didn’t matter because the Pritzkers took them all.
TA: Yes. It was a very sophisticated con game. They were the best in the business at hurting the poor people – they did a superb job. Look at what they’ve done to the middle class, to everyone’s retirement, every pension fund that lost money in ’08, ’09 and 2010. The Pritzkers destroyed the American economy, which destroyed the world economy. It’s time for the Senate to ask Penny, when she goes before them, to explain. Let the staffers do their research, talk to me, you, others who have done the research. Look at the documentation. Make Penny answer the questions.
DB: And she never has. On September 11, 2001, and this is in no way is to suggest a conspiracy, but she was supposed to testify on the day the twin towers were hit. She was already in Washington, and that investigation was cancelled. There was never even the beginning of a follow-up. Tell us about Bert Healy.
TA: Bert Healy is a well-renowned bank consultant who is quoted in every business publication when they talk about banks. He, and George Kaufman, professor at Loyola University, and Ellen Sideman, the head of the Office of Supervision, were all sworn in on 9/11, ready to give their testimony. Healy will tell you the story that they were all there, sworn in, in the cloak room waiting to go back in, when they were told the first building was hit. When the first building was hit, they didn’t know it was a terrorist attack because we thought one plane had gone off course. Healy says all of a sudden they are back in the room and staffers are whispering to the senators, then the senators all left, came back, and said “Maybe you people want to leave too.” That was 9/11. Then Ellen Salmon wrote their report after the fact, a report that is part of the public record. I’ve got copies of all their reports. Penny was on the list to appear, but this was Penny Pritzker. I don’t know if she was there. She hires lawyers. She’s a lawyer; they all are. The original business of Pritzker and Pritzker was a law firm. The Forbes magazine story shows that the whole Pritzker enterprise was a Chicago-based law firm.
DB: They are very secretive folks. It will be interesting to see her as Secretary of Commerce. She wants a bit of the high profile now. We know a lot more about her because her kids sued her.
TA: Lisa and Matthew, her half brother and sister, sued all the Pritzkers. That’s how we found out as much as we did, but that left us to uncover more and more and more. Four years ago she had to decline it ??? because the family hadn’t been divided. Now she can fill out a financial statement, which will show that she owns x amount of shares of Bushar-Hathaway, x amount of shares of the Hyatt. She may or may not disclose how much she owns of the casinos, other shipping companies, etc. It will all be a great deal of money in trust. It’s not her wealth but her power and influence – her ability not to be held accountable for the damage that Superior Bank did to our economy that is the real shame.
DB: Many of the people who lose their money in the casinos are poor and working class folks. But her first casinos were the banks, in the context of the subprime meltdown.
TA: All their businesses were casinos, and the house always wins, no matter what business they’re in. It’s up to the public to pay attention. Adlei Stevenson the first, the vice presidential candidate, grandfather of the senator and father of the governor, said by and large, the people get exactly what they ask for. Typically, at the time, they don’t realize that’s what they are asking for. If the public is upset with our Congress and Senate, they have nobody to blame but themselves. Now it’s up to them to tell their senators, “Before you approve her to be Secretary of Commerce, make her answer the questions about her role, not her wealth, but her role in the subprime securitization mess.” She needs to answer to her role in the mortgage meltdown which basically destroyed our whole economy. They need to be prepared to ask her the right questions. If they don’t, she’ll just walk right through it and get free pass like she’s always gotten. The burden is on the public.
DB: This is one of those stories that I refuse to let go of. I put this story in my book about Henry Hyde, who was part of this Chicago story. These are not just the 1%, this is privileged wealth, the 1% of the 1%.
TA: These are the people who are immune from prosecution or any form of accountability. They are above the Madoffs and the Corzines of the world. They can do whatever they want, and no one is willing to hold them accountable.
Dennis J. Bernstein can be contacted at dennisjberstein@gmail.com.
May 3, 2013
Posted by aletho |
"Hope and Change", Corruption, Timeless or most popular | Obama, Penny Pritzker, Pritzker, Superior Bank, TransUnion |
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Former BBC broadcaster Stuart Hall has admitted assaulting 13 girls as young as nine years old between 1967 and 1986.
The former It’s A Knockout presenter was branded as an “opportunistic predator” by prosecutors after admitting he had carried out a series of attacks on girls, from whom the youngest aged just nine.
The 83-year-old, however, had previously denied the allegations against him, saying the charges were “pernicious, callous” and “cruel”.
Hall entered the guilty pleas last month at Preston Crown Court but they can only be revealed now after reporting restrictions were lifted.
Nazir Afzal, the Chief Crown Prosecutor for the Crown Prosecution Service (CPS) in the North West said no explanations could be offered for Hall’s unlawful behavior.
Hall’s confession was another blow to the British state-run broadcaster BBC, which recently came under pressure over sexual abuse allegations involving former broadcaster Jimmy Savile.
The investigation into Savile scandal has been running since late October. Since that time, Scotland Yard has been contacted by more than 500 alleged victims.
May 3, 2013
Posted by aletho |
Corruption, Mainstream Media, Warmongering | BBC, Jimmy Savile, Press TV, Stuart Hall |
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Civil society groups have finally seen a leaked copy of the most recent version of the Master Plan for the ProSAVANA programme, which is dated March 2013. The copy makes clear the project’s intentions and confirms that the governments of Japan, Brazil and Mozambique are secretly paving the way for a massive land grab in Northern Mozambique. Several organisations from Mozambique and their international partners are now making this plan publicly available, along with some of their initial reflections. (Download the Master Plan here: part 1, part 2, part 3.)
ProSAVANA is a programme between Japan, Brazil and Mozambique to support agricultural development in Northern Mozambique. According to the copy of the Master Plan leaked to civil society, the programme will cover an area of over 10 million hectares in 19 districts within 3 provinces of Northern Mozambique– Nampula, Niassa, and Zambézia. Over 4 million people live and farm in this area, which has been dubbed the Nacala Corridor.
The entire process of developing the ProSavana programme and its Master Plan has been characterised by a complete lack of transparency, public consultation and public participation. While agribusiness corporations have been part of government delegations to investigate business opportunities in the Nacala Corridor, the 4 million farmers living in the affected area have received no information about the intentions shown in the Master Plan. Three governments have refused to make this version or earlier versions of the Master Plan available to the public.
The Master Plan was produced by a team of foreign consultants with close linkages to multinational agribusiness corporations, some of which are already acquiring land in the ProSavana area.1 There were no meaningful consultations with local communities and the plan does not consider their needs, their histories and knowledge, or their aspirations for the future. Nor is there any appreciation of their local farming and food systems.
ProSAVANA is presented as a development/ aid programme but the leaked version of the Master Plan makes it clear that it is simply a business plan for the corporate takeover of agriculture in Mozambique.
What does this Master Plan mean for small farmers?
The proponents of the ProSAVANA programme have said repeatedly that this is a programme to support small farmers. But the Master Plan only considers how small farmers can support agribusiness. This boils down to two main directives:
1. Push farmers out of traditional shifting cultivation and land management practices into intensive cultivation practices based on commercial seeds, chemical inputs and private land titles.
Although zero analysis was made of the effectiveness of traditional farming practices in the area, the Master Plan says the “transition from shifting cultivation to settled farming is an urgent need” and says this is “the key strategy proposed in the Master Plan”. It even calls for actions “combating the practice of shifting agriculture.”
The plan acknowledges that farmers are likely to resist giving up their traditional forms of agriculture, so it proposes several means to encourage them to do so, such as the formation of “leading farmers” who can demonstrate the advantages of intensive agriculture, “a pump-priming subsidy system for chemical fertilizers”, and, most importantly, private land titles (DUATs) for those farmers that make the switch.
It is clear to us that the real objective behind these efforts to push farmers into intensive cultivation is to privatise the land and make it more available to outside investors. Relegating farmers to a fixed parcel is a way to mark off lands more clearly for investors and to make it possible for provincial governments to establish the land banks (state land earmarked for commercial use by private investors) that the plan calls for. It also allows investors to bypass negotiations with communities to access lands. The Land Registration of the Small Scale and Medium Scale Farmers component of the Master Plan clearly states that its objective is to “facilitate the identification of areas for the promotion of agriculture by large farmers, private companies and medium scale farmers.” It is also described as a means to “create an environment of cooperation and integration between the small scale farm and new investors.”
2. Push farmers into contract farming arrangements with corporate farms and processors.
The Master Plan divides the Nacala Corridor into zones, and defines which crops should be grown in these zones, where and how they should be grown, and by whom they should be grown (small farmers, medium farmers or corporations). Within these zones, the plan lays out several projects for the production of commodities, some of them based exclusively on large corporate farms, others based on a mix of large or medium farms and contract production arrangements with small farmers.
Contract farming will not improve the lives of small farmers in the area. It will instead make them dependent on a single corporation for everything from their seeds to the sale of their crops. One of the proposed contract farming projects in the plan envisions a return on investment of 30% per year for the company while farmers in the project will be forced to devote 5 out of the 5.5 ha they will be allocated to the production of cassava under contract production with the investor.
A paradise for corporations
The plan lays out several business opportunities that companies can invest in and get huge projected returns of between 20%-30% per year. Companies that invest will be able to tap a $2 billion Nacala Fund that is being financed by governments and investors in Japan and Brazil. Although details of this fund are still missing from the leaked version of the Master Plan, other sources indicate that the fund will be registered in the fiscal paradise of Luxembourg and called the Africa Opportunity Fund 1: Nacala.2
Some of the projects within the plan will provide large areas of land to investors. The Integrated Grain Cluster, which is planned for Majune District, Niassa Province, will be managed by one vertically integrated company that will operate nine 5,000 ha farms, within a 60,000 ha zone, to produce a rotation of maize, soybeans and sunflower, mainly for export. According to the plan, “the project has a high profitability and the internal rate of return was calculated at 20.3% and the payback is 9 years.” The Master Plan calls for projects such as this one to be expanded and reproduced throughout the Corridor.
Corporations will also benefit from several Special Economic Zones (SEZs) that are proposed in the plan. In these zones, companies will be free from paying taxes and customs duties and will be able to benefit from offshore financial arrangements. These SEZs will be located at the main sites that the project is planning for processing and trading facilities, which will cut deeply into any revenues that could accrue to the government through the planned development of agro-export industries.
Since the planning for ProSAVANA began in 2009, many foreign investors and their local partners have already acquired large parcels of land in the programme area, leading to numerous conflicts over land with local communities. The intention of the Master Plan is to bring even more investors to the area, which will make land conflicts even worse.
The main solution that the Master Plan proposes to these growing conflicts are the “ProSAVANA Guidelines on RAI” (Responsible Agricultural Investment). These guidelines are essentially a checklist based on the seven RAI principles that were developed by the World Bank and have been widely denounced by peasant organisations and civil society groups. The “ProSAVANA Guideline on RAI” will be included as an annex in the “Data Book for Private Investors” that will be released by August 2013 as part of efforts to promote agribusiness investment in the Nacala Corridor.
The guidelines are weak and only voluntary and the plan does not call for any new laws or regulations that could really defend communities against land grabs. The plan only says that “private investors interested in agricultural development in the Nacala Corridor will be requested to comply with these principles, in addition to their internal codes of conduct and voluntary self-regulations.”
What’s the end result of this plan?
The Master Plan, in its current form, would destroy peasant agriculture by wiping out farmer seed systems, local knowledge, local food cultures and traditional systems of land management. It will displace peasants from their lands or force them on to fixed parcels of land where they will be obliged to produce under contract production for corporations and to go into debt to pay for the seeds, fertilisers and pesticides required. The peasants that do get private land titles will be left at extreme risk of quickly losing their lands to corporations and big farmers.
It is telling that only one of the seven clusters in the Master Plan is aimed at small scale farmers and family food production. And this cluster only proposes the same old failed green revolution model of development. The Master Plan puts no real thought and energy into the needs and capacities of peasants in the Nacala Corridor.
Corporations are the big beneficiaries of this Master Plan. They will get control over land and production and they will control the trade of the foods produced, which will be exported along the roads, rail lines and Nacala port that other foreign corporations will be paid to construct with public funds from Mozambique and Japan. Foreign seed, pesticide and fertiliser companies will also make a killing from this massive expansion of industrial agriculture into Africa.
Some Mozambicans will profit from this. For example, Portugal’s richest family has set up a joint venture to acquire lands and produce soybeans in Northern Mozambique with a national company controlled by the friends and family of Mozambique’s President and in partnership with one of Brazil’s largest corporate farmers. But these profits will be made at the expense of regular Mozambicans.
Seeing the Master Plan only confirms our determination to stop the ProSAVANA programme and to support Mozambican peasants and people in their struggle for food sovereignty.
Signed by:
Justiça Ambiental, JA!/ FoE Mozambique (Mozambique)
Forum Mulher (Mozambique)
Livaningo (Mozambique)
LPM – Landless Peoples Mouvement (Member of Via Campesina . South Africa)
Agrarian Reform for Food Sovereignty Campaign (Member os Via Campesina – South Africa)
AFRA – Association for Rural Advancement (South Africa)
GRAIN
Friends of the Earth International (FoEI) (*The world’s largest grassroots international environmental federation with 74 national member groups and more than two million individual members.)
National Association of Professional Environmentalists (NAPE) / Friends of the Earth (FoE) Uganda
FoE Swaziland
Amigos da Terra Brasil / FoE Brazil
Movimiento Madre Tierra, Honduras
NOAH Friends of the Earth Denmark
GroundWork (South Africa)
Amigos de la Tierra España / Friends of the Earth Spain
Environmental Rights Action / FoE Nigeria
Sahabat Alam Malaysia/ FOE Malaysia
SOBREVIVENCIA, Friends of the Earth Paraguay
CESTA, FOE El Salvador
Earth Harmony Innovators (South Africa)
Ukuvuna (South Africa)
FoE Africa
Kasisi Agricultural Training Centre (Zambia)
(As of 29 April 2013)
Contact: Anabela Lemos and Vanessa Cabanelas
JA!Justiça Ambiental/FOEMozambique
anabela.ja.mz@gmail.com and vanessacabanelas@gamil.com
+258 21 496668
1The Master Plan was drawn up by a group of consultants from the Getulio Vargas Foundation (FGV). These consultants are also directors with Vigna Brasil, also known as Vigna Projetos, which provides agribusiness consultancy services to corporations such as Galp Energia, Vale, Syngenta, Petrobras, and ADM. Galp, owned by the Amorim family of Portugal, is already invested in a large-scale soybean farming operation in the ProSAVANA project area through a joint venture called AgroMoz with Intelec, a holding company partly controlled by the family of the Mozambican President. Vigna Brasil has the same contact address as the company 4I.Green, which is described as the technical manager for the Nacala Fund– the main financing vehicle for the big agribusiness projects in the Nacala Corridor.
2See: http://www.g15.org/Renewable_Energies/J2-06-11-2012%5CPRESENTATION_DAKAR-06-11-2012.pptx
May 2, 2013
Posted by aletho |
Corruption, Economics | Agriculture in Mozambique, Brazil, Mozambique, Nacala, Nacala Corridor |
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At a speech celebrating May Day in Bolivia today, President Evo Morales announced the expulsion of the United States Agency for International Development (USAID) from the country. According to the AP, Morales stated:
“The United States does not lack institutions that continue to conspire, and that’s why I am using this gathering to announce that we have decided to expel USAID from Bolivia.”
The role of USAID in Bolivia has been a primary point of contention between the U.S. and Bolivia dating back to at least 2006. State Department spokesperson Patrick Ventrell characterized Morales’ statement as “baseless allegations.” While State Department spokespeople and many commentators will characterize USAID’s work with oppositional groups as appropriate, a look at the agency’s work over the past decade paints a very different picture.
Documents obtained by investigative journalist Jeremy Bigwood show that as early as 2002, USAID funded a “Political Party Reform Project,” which sought to “serve as a counterweight to the radical MAS [Morales’ political party] or its successors.” Later USAID began a program “to provide support to fledgling regional governments,” some of which were pushing for regional autonomy and were involved in the September 2008 destabilization campaign that left some 20 indigenous Bolivians dead. Meanwhile, the U.S. has continually refused to disclose the recipients of aid funds. As a recent CEPR report on USAID activities in Haiti concluded, U.S. aid often goes into a “black box” where it becomes impossible to determine who the ultimate recipients actually are.
Some of these USAID programs were implemented by the Office of Transition Initiatives (OTI) from the period 2004-2007. A document obtained by CEPR through a Freedom of Information Act request, reveals the role OTI plays in U.S. foreign policy. The document notes that OTI “seeks to focus its resources where they will have the greatest impact on U.S. diplomatic and security interests,” adding that “OTI cannot create a transition or impose democracy, but it can identify and support key individuals and groups who are committed to peaceful, participatory reform. In short, OTI acts as a catalyst for change where there is sufficient indigenous political will.” It was through OTI that USAID was funding regional governments prior to the September 2008 events.
While USAID has since closed the OTI office in Bolivia, and overall funding levels have been greatly reduced, USAID has still channeled at least $200 million into the country since 2009.
Wikileaks Revelations
Wikileaks cables reveal that the U.S. has long taken an adversarial approach to the Morales government, while even acknowledging the clandestine and oppositional nature of U.S. aid.
In one cable written by Ambassador Greenlee from January 2006, just months after Morales’ election, he notes that “U.S. assistance, the largest of any bilateral donor by a factor of three, is often hidden by our use of third parties to dispense aid with U.S. funds.” In the same cable, Greenlee acknowledges that “[m]any USAID-administered economic programs run counter to the direction the GOB [Government of Bolivia] wishes to move the country.”
The cable goes on to outline a “carrot and sticks” approach to the new Bolivian government, outlining possible actions to be taken to pressure the government to take “positive policy actions.” Three areas where the U.S. would focus were on coca policy, the nationalization of hydrocarbons (which “would have a negative impact on U.S. investors”) and the forming of the constituent assembly to write a new constitution. Possible sticks included; using veto authority within the Inter-American Development Bank to oppose loans to Bolivia, postponing debt cancellation and threatening to suspend trade benefits.
Another cable, also written by Greenlee, reporting on a meeting between U.S. officials and the Morales government notes that the Ambassador stated in the meeting, “When you think of the IDB, you should think of the U.S…. This is not blackmail, it is simple reality.”
Later cables, as reported by Green Left Weekly, show the U.S. role in fomenting dissent within indigenous groups and other social movements.
Not Why, But Why Not Sooner
The AP spoke with Kathryn Ledebur of the Andean Information Network, reporting that she “was not surprised by the expulsion itself but by the fact that Morales took so long to do it after repeated threats.” Given the amount of evidence in declassified documents that point to U.S. aid funds going to opposition groups and being used to bolster opposition to the Morales government, the expulsion indeed comes as little surprise. Further, as evidence continues to mount of the role of USAID in undermining governments, governments from across the region have become more openly critical of the U.S. aid agency.
As Brazilian investigative journalist Natalia Viana recently detailed in The Nation, USAID was funding groups in Paraguay that would eventually be involved in the ouster of President Lugo. Viana writes that through USAID’s largest program in Paraguay, they would end up supporting “some of the very institutions that would play a central role in impeaching Lugo six years later, including not just the police force but the Public Ministry and the Supreme Court.”
Additionally, the role of USAID in funding opposition groups in Venezuela has been well documented. A recently released Wikileaks cable reveals the U.S. government’s five point strategy for Venezuela, which the cable makes clear USAID worked to implement. The goals were; “1) Strengthening Democratic Institutions, 2) Penetrating Chavez’ Political Base, 3) Dividing Chavismo, 4) Protecting Vital US business, and 5) Isolating Chavez internationally.”
Last June, immediately following the Paraguay coup, the ALBA group of countries (of which Bolivia is a member) signed a declaration requesting that “the heads of state and the government of the states who are members of the Bolivarian Alliance for the Peoples of Our America, immediately expel USAID and its delegates or representatives from their countries, due to the fact that we consider their presence and actions to constitute an interference which threatens the sovereignty and stability of our nations.”
At the time, President Correa of Ecuador stated that he was writing up new rules for USAID engagement in the country and that “If they don’t want to follow them, then ‘So long.’” While Bolivia may be the first of these countries to actually expel USAID, the question may not be why Bolivia is doing this, but rather why didn’t Bolivia do this sooner?
May 2, 2013
Posted by aletho |
Corruption, Economics, Timeless or most popular | Andean Information Network, Bolivia, Evo Morales, Inter-American Development Bank, United States, United States Agency for International Development, USAID |
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The Canadian government has been unable to account for 3.1 billion Canadian dollars in anti-terrorism funding, the auditor general says.
Michael Ferguson on Tuesday presented his spring report, which did not include information on spending and what was achieved with the money spent.
“Overall, we found many areas where the government should improve on the results that it achieves with taxpayers’ dollars,” said Ferguson.
The outcome of his audit of the Public Security and Anti-Terrorism (PSAT) Initiative showed that 35 departments had spent 9.8 billion Canadian dollars of the 12.9 billion allocated for security and anti-terrorism measures between 2001 and 2009.
However, Ferguson was unable to determine where the remaining 3.1 billion had gone.
The Treasury Board has not given any clear answers to the auditor general regarding the unaccounted gap.
Shortly after the presentation, the National Democratic Party (NDP) accused the conservative government of mismanaging public funding.
“It is really scandalous that [the government] can’t account for the $3.1 billion,” said NDP Member of Parliament Malcolm Allen.
Prime Minister Stephen Harper defended against the accusation by saying Ferguson’s report had nothing to do with the improper use of money, but rather how the spent money is categorized.
Treasury Board President Tony Clement said he has accepted the auditor general’s recommendation for his department to present to the public a clear picture of spending and the achieved results for federal programs.
May 1, 2013
Posted by aletho |
Corruption | Canada, Counter-terrorism, Michael Ferguson |
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It is fitting that on the same day as this headline appeared, “Pro-Israeli US lawmakers urge bombing Syria air bases, arming militants, invasion” I delivered the following remarks to the United Nations International Meeting on the Question of Palestine:
From Cynthia McKinney: Remarks at the UN International Meeting on Palestine in Addis Ababa, Ethiopia
My name is Cynthia McKinney and I served as a Member of the U.S. Congress for 12 years. During my time in Congress, I strove to make respect for human rights a central feature in the formulation of U.S. foreign policy. Amid minor successes, I have to say that my efforts while, broadly appreciated by many, failed miserably. That failure stems in part from the peculiarities of U.S. politics that allow policy formulation to deviate from and in many cases become diametrically opposed to the values of the people of the U.S. Sadly, what we in the U.S. call “special interests” are able to buy public policy by way of campaign contributions and misleading media campaigns. These “special interests” are aided and abetted in the U.S. by a concentrated media that has no obligation according to U.S. court decisions to tell the public the truth. In other words, U.S. media have won in U.S. court the right to knowingly lie to the people they ostensibly serve. I will briefly delve into this unusual and anti-”democratic” state of affairs now controlling in the U.S. once again before I conclude my remarks.
After my tenure in Congress, I became involved in international human rights activism. During Israel’s Operation Cast Lead (which was its war against Hamas and others), I joined with a group of human rights activists who tried to deliver medical supplies to the people of Gaza; the Israeli Military stopped us. While in international waters, an Israeli Defense Forces warship rammed the pleasure boat that I was on with the other volunteers, and totally destroyed our boat. Neither the medical supplies nor us volunteers reached Gaza.
Approximately six months later, we, the volunteers from the first thwarted effort, reassembled in order to make another attempt to reach Gaza by sea, traveling through international waters, with the hopes of entering into Palestine by way of Gaza’s territorial waters. By this time, Operation Cast Lead had ended, President Barack Obama had been sworn in, and he had appealed publicly for an easing of the Israeli blockade of Gaza. Gazans had made an appeal for school supplies for the children still reeling from the trauma of three weeks of what the United Nations called “one of the most violent episodes in the recent history of the Palestinian territory.” So, some of us answered that call with school supplies for the children and building supplies for the adults so that Gaza could rebuild from the devastation after Operation Cast Lead. On this effort to answer a humanitarian call for help, I, along with 20 other volunteers, was kidnapped by the Israeli military while in international waters, our boat was seized, we were taken by an extremely circuitous route to Israel where we never intended to go, and I was incarcerated in an Israeli prison for 7 days. Sadly, what I witnessed while in Israeli prison pointed to Israel as an apartheid state and the gross mistreatment of, particularly, Ethiopian women who had been lured to the “Holy Land” for job opportunities that vaporized because they were not of the correct religion. In addition to that, my observation at the time was that Ethiopian Jews are used as an important pillar–even enforcer, ironically, of Israeli apartheid. I can expand on this aspect of my observations later if there are specific questions or requests for more information from this body or from individuals in attendance at this Conference.
Needless to say, for a second time, I was prevented from entering Gaza. Upon hearing of my ordeal, Member of Parliament George Galloway who was in Cairo leading “Viva Palestina USA,” contacted me and invited me to come to Cairo and enter Gaza by land, which I did. Upon entering Gaza, I was able to see the destruction inflicted on the people by Israel’s Operation Cast Lead. I scooped up a bit of the soil and put it in this container. Sadly, as noted in the Goldstone Report and admitted by the Israeli Defense Forces, this Gaza soil is probably contaminated with whatever remains of the chemicals that were used by the Israelis against the people of Gaza: chemicals ranging from white phosphorus to inert metals. And while I unsuccessfully tried to pass legislation in Congress to end the use of depleted uranium in U.S. munitions because of the health effects, the Goldstone Report mentions that allegations were made that Israel used depleted uranium during Operation Cast Lead, which also might be in this soil. The United Nations Division for Palestinian Rights is also aware that civilian targets were bombed and totally destroyed. I visited a few of those targets.
One stop on my private tour of the destruction in Gaza was the American International School and amid the rubble I spotted a bright yellow something that I couldn’t quite make out what it was. So, I climbed through the jutted shards of concrete and exposed rebar to retrieve the object. This is that object: an English language children’s art book stamped with the initials of the American International School in Gaza, “AISG.” I was standing in what was left of the School’s library.
Another stop on my tour of the effects of Israel’s Operation Cast Lead was a neighborhood school, not nearly as big and grand as the American School. There, I could see the path of one missile that blew a hole clear through several walls of the school. There were markings on the chalkboard, including the Star of David. I saw several cans of peanuts on the floor. This is one of them. It is written in Hebrew. The Israeli soldiers blew up the school and then sat down in its ruins and enjoyed peanuts and drew religious and political markings on the chalkboard.
Both boats that I was on were seized by the Israelis and destroyed by them. The humanitarian aid on the boats did not reach Gaza and only token aid was delivered by the land convoy to the Al Shifa Hospital in Gaza, the bulk of it stranded in Egypt, not allowed into Gaza by the Egyptians or the Israelis.
What is amazing is not only that this happens over and over again, but that Israeli leaders who commit war crimes and crimes against humanity, leave office, and are never held accountable for their policies, as was done by victims of Augusto Pinochet, and as is being done currently by the International Criminal Court. Another aspect of this impunity is that Israel continues to receive U.S. weapons and technology which it uses against civilians in contravention of U.S. law. As these weapons are used or become outdated, the U.S. replenishes Israel’s weapons stock every year.
One measure of this impunity is brought to bear by the pro-Israel Lobby that operates in the political sphere of the U.S. I am a former Member of Congress because pro-Israel sympathizers known as the “pro-Israel Lobby” ensured my ouster from Congress and that of many other Members of Congress who dared to try and draw attention to U.S. law, Israel’s human rights violations, Israel’s misuse of U.S. weapons, or any other inconvenient facts that were better buried and left unknown.
What many of you might not know, because these things just aren’t discussed as widely as they should be, is that many of those Members of Congress who were put out of office by the pro-Israel Lobby were the stolen children of Africa, descendants of Africans trafficked in the Trans-Atlantic Slave Trade. I will call the names of a few and tell you where you can find information about them as they tell their own stories:
· Gus Savage, Member of Congress from Chicago, Illinois was targeted for defeat by the pro-Israel Lobby because he dared to engage in foreign relations within the purview of a Member of Congress on the African Continent, in Egypt among other places. He recounted his ordeal on the Floor of the House of Representatives and revealed the secrets of the pro-Israel Lobby on the Congressional Record where students and others interested in this topic can find his words today.
· Earl Hilliard, Member of Congress from Birmingham, Alabama was the first Black Member of Congress to serve the people of Alabama since the U.S. Civil War’s Reconstruction Era. He was ejected from the Congress by the pro-Israel Lobby because he, like Gus Savage, traveled to Africa, and in particular to Libya. He also traveled to Lebanon and learned of new weapons for that time, that had been used there by Israel. For this transgression, Earl Hilliard had to go. He is interviewed in a Dutch documentary that is available on youtube where he describes the vicious campaign that was run against him by the pro-Israel Lobby.
· And then, there’s me. Just this month, I published a book entitled Ain’t Nothing Like Freedom, in which I describe just a few of the tactics that were used against me by the pro-Israel Lobby to destroy my career in Congress.
· These three political “take-downs” were very publicly done in order to send a message to others who might also be inclined to speak up out of moral conviction, as Savage, Hilliard, and I did.
· This weeding out also occurs on the local level with state and local elected officials like my father and others targeted for defeat because of the potential threat to the interests of the pro-Israel Lobby that they pose.
· In addition, on a public and private level, targeted individuals have to endure soft repression that makes life difficult. All of this needs to be put on the record if one is to fully understand the power of the pro-Israel Lobby and the pall that it casts on the political process in the U.S. and from what I have been told, also in Europe.
· Finally, the political landscape for Blacks in the U.S. is negatively affected by this weeding out process, because their strongest and most outspoken authentic leaders are vulnerable to the challenges from candidates that are well funded by outside “special interests.”
In light of this, I would like to put this thought to you: can you even imagine what U.S. policy would be like at the United Nations if the will of the people were carried out without the interference of the pro-Israel Lobby? The Durban World Conference Against Racism was a watershed that could be revisited time and time again with U.S. support and participation, except that powerful Lobbies want otherwise. I know, it’s hard to imagine things differently. But it is not hard for me and that is one vision that keeps me going: U.S. policy made in the image of the values of the people of the U.S. At a Conference whose theme is African solidarity with the Palestinian people, I thought it was important to mention not only how the pro-Israel Lobby skews politics in the U.S. against the Palestinians, but also against African-descendants inside the U.S.
I focus on this important aspect of policy-making by focusing on who gets to make the policy because I believe that this is one key reason why Palestinians are forced to suffer while, at best platitudes and delay, serve as the effective policies of the US and European countries.
The short version of this tragic story is that pro-Israel forces inside the U.S. are willing to use their money to buy political influence and protection for Israel across the political spectrum while the same cannot be said of pro-peace, pro-justice forces. I liken the situation to game day when one team shows up in beautiful new uniforms with all of the latest and best equipment, primed and ready to execute its strategy in the game of play, while the other team doesn’t even show up on the pitch. I believe that one remaining untested justice frontier is the political battleground in U.S. and European capitals. It is inside these essential capitals that pro-Israel Lobbies have become comfortable operating with very little opposition from the other side.
I am tired of losing when, I believe, we really do not have to lose. I fundamentally believe that the people of this world are good and want peace. I have spoken to Afghanis and Pakistanis, to Yemenis and to Somalis, Palestinians and Americans, and I find them to be peace-loving peoples.
So, how do we move from where we are to where we need to be? That is the fundamental question. I focus on the political because the political creates the legal. And the political creates impunity.
Just in my personal experiences, I have outlined breaches of international humanitarian law, international human rights law, international law, and U.S. law by the occupying power: Israel.
I served as a juror on the Bertrand Russell Tribunal on Palestine that recently concluded its Sessions with a finding that both the U.S. and Europe are guilty of contributing to the atmosphere of impunity with which apartheid Israel carries out its policies against Palestinians and anyone who stands in its way.
I also recently served as an Official Observer as the Kuala Lumpur War Crimes Commission received testimony from Palestinians on their treatment inside Israel as well as in the Occupied Territories.
Through my service with both of these organizations, I have met too many courageous Palestinians and Israelis who want to live peacefully with each other and who put their lives and their livelihoods on the line every day for peace and the rule of law. I do believe that much of the suffering could be alleviated if we would put sufficient energy and resources behind putting out in public view how the pro-Israel Lobby misdirects U.S. and European policies and prevents pro-peace and justice politicians from ever having the opportunity to put those values, along with our basic human dignity, permanently on the table for public debate.
Finally, I am not Palestinian. I am not Arab. I am not Muslim. But I am human. And that is enough for me to acknowledge the dignity of others who are oppressed and to epitomize what this Conference is all about: African Solidarity with the Palestinian People for the Achievement of its inalienable rights, including the sovereignty and independence of the State of Palestine.
Thank you.
April 30, 2013
Posted by aletho |
Ethnic Cleansing, Racism, Zionism, War Crimes, Corruption, Wars for Israel, Timeless or most popular | Israel, Palestine, Zionism, Gaza, Congress, Cynthia McKinney |
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Cops who testified against the New York City Police Department’s stop-and-frisk policy have faced retribution from higher-ups and officers who subscribe to the idea that the controversial tactic, deemed unconstitutional by major courts, is fair and legal.
NYPD officer Pedro Serrano told the Associated Press he’s faced harassment at work after testifying that stop-and-frisk, which was enacted in 2002, targets minorities and requires patrol officers to meet monthly quotas.
Serrano said that, along with finding a sticker of a rat pasted to his locker, he says he’s been micromanaged – including transferred to a different precinct to work an overnight shift. He also claimed that he was refused overtime hours amid an otherwise erratic schedule.
“A lot of people told me not to come forward because of what would happen – they said the department would come after me,” Serrano said. “But I’ve been thinking about it since 2007. I felt I couldn’t keep quiet.”
Serrano, along with fellow officers Adrian Schoolcraft and Adhyl Polcano, secretly recorded hours of patrol briefings and meetings with superior officers. The audio was played during the current federal trial meant to determine if black and Hispanic men are targeted by NYPD cops seeking to boost their numbers.
Polcano testified that he was told he needed to have 20 summonses, five street stops and one arrest each month.
“I was extremely bothered by what I was seeing out there,” he said on the stand. “The racial profiling, the arresting people for no reason, being called to scenes that I did not observe a violation and being forced to write a summons that I didn’t observe.”
Polcano was suspended from duty and charged with filing false arrest paperwork after he detailed a list of grievances to the police department’s internal affairs. He now works in a video review department. Schoolcraft, who remains suspended, did not testify at the trial because he has filed his own federal suit accusing superior officers of forcefully taking him to a psychiatric hospital in 2009.
Other officers who testified painted Serrano’s complaints as an unfortunate but necessary part of the job. Joseph Esposito, the former chief of the department, testified that most officers “leave their house every day to go to work to protect the city. They have the best intentions all the time, and they do it. There is a small percentage…we’re talking about in any profession, there is a group that will try to do the least amount and get paid the most.”
The alleged harassment would fit in the narrative of the NYPD. In the early 1970s plainclothes officer Frank Serpico accused the department of widespread corruption only to be shot in the face during a later investigation. Labeled a traitor by the police but a hero by others, Serpico was portrayed by Al Pacino in a popular eponymous movie chronicling his story two years later.
During an interview with the Associated Press Serpico said recent events prove NYPD groupthink hasn’t evolved past a “kill the messenger” mentality.
“I’ve become their grandfather,” he said. “They don’t want nothing. They just want somebody who knows what they’re going through. I give them moral support.”
The trial has been underway for more than a month, and recently included testimony from a parade of officers trying to discredit Polcano and Serrano as malcontents who often caused trouble. NYPD policy dictates that officers are required to report corruption without fear of retribution.
“It hasn’t been a picnic,” Serrano said. “They have their methods of dealing with someone like me.”
April 30, 2013
Posted by aletho |
Civil Liberties, Ethnic Cleansing, Racism, Zionism, Corruption, Subjugation - Torture | New York City Police Department, Pedro Serrano, Adrian Schoolcraft, Joseph Esposito |
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The Russian Justice Ministry has published an order for all NGOs that register as foreign agents, telling them to detail the spending of their funds every three months.
The ministry also instructs those groups with foreign agent status to prepare reports on their activities and management every six months and a full audit of their accounting books once a year.
So far, no organization has registered as a foreign agent in Russia even though the corresponding law came into force in November last year. This year the authorities launched a major inspection throughout the country and the prosecutors and the Justice Ministry now claim that 18 groups must receive the status.
The NGO audit is still underway.
This decision only led to protests from the groups who said that the inspection was ill-founded and any foreign sponsorship had taken place before the law came into force.
International organizations and rights groups, as well as foreign governments, have criticized the Russian Law on Foreign Agents as such, saying that it can be used as means of pressure and lead to underfunding of Russian rights organizations.
Russian sponsors of the law, including senior officials, replied that the law simply required the activists to clearly indicate the sources of their funding in order to better inform the public. The Russian side several times emphasized that no organization can be closed under the existing law.
President Vladimir Putin said in a recent interview with the German broadcaster ARD that the number of foreign-funded non-governmental organizations operating in Russia amounted to 654. He also said that these organizations received 28.3 billion rubles, or almost $1 billion, from their foreign sponsors in just four months that passed after the adoption of the Foreign Agents Law.
April 30, 2013
Posted by aletho |
Corruption | Foreign agent, NGO, Non-governmental organization, Russia |
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The private prison population in the US has rocketed 17-fold over the last two decades mostly on the shoulders of the deep-pocketed prison lobby, and the business continues to thrive.
Try confining yourself to a small room in your home, like a bathroom or a closet, and spend a few hours there. One only cringes to imagine the detrimental psychological effects that kind of solitude creates for individuals who are subjected to solitary confinement for years at a time, knowing only the walls of their cell and the shades of light that creep across them. The abhorrent state of affairs at the Guantanamo facility often makes international headlines and arguably overshadows the calamity that is the US domestic prison system – where over six million people are subject to some form of correctional supervision, an amount exceeding those who toiled in the Soviet gulags during Stalin’s reign. In the United States, some fifty thousand inmates pass their days in solitary confinement. While there is undoubtedly no shortage of violent criminals in America’s jails, millions are dolled out annually by privately owned prison lobbies directly to politicians in an effort to influence harsher ‘zero tolerance’ legislation and mandatory sentencing for many non-violent offenses.
While the US faces economic stagnation and unprecedented spending cuts to programs of social uplift, business is booming for the private prison industry. Like any other business, these institutions are run for the purpose of turning a profit. State and federal prisons are contracted out to private companies who are paid a fixed amount to house each inmate per day. Their profit depends on spending the minimum amount necessary on each inmate day-to-day, allowing private-hands to pocket the remaining money. For the corrections conglomerates of America, success depends on housing the maximum numbers of inmates for the longest potential time as inexpensively as possible. Consider that the United States has the highest incarceration rate in the world, far surpassing any other nation – for every 100,000 Americans, 743 citizens sit behind bars. The harsher sentences meted out to non-violent offenders in contrast to other industrialized nations speaks volumes of America’s enthusiastic embrace of a prison industrial complex.
The number of people imprisoned under state and federal custody increased 772% percent between 1970 and 2009, largely due to the incredible influence that private corrections corporations wield against the American legal system. The argument is that by subjecting correctional services to market pressures, efficiencies will be increased and prison facilities can be run at a lower cost due to market competition. What these privatizations produce in turn is a system that destroys families by incentivizing the mass long-term detention of non-violent criminals, a system that is increasingly difficult to deconstruct and reform due to millions paid out to state and federal policymakers. According to reports issued by advocacy group Public Campaign, the three major corrections firms –Corrections Corporation of America (CCA), the GEO Group, and Cornell, have spent over $22 million lobbying Congress since 2001.
As a means of influencing policy-making at the federal level, at least $3.3 million have been given to political parties, candidates, and their political action committees, while more than $7.3 million has been given to state candidates and political parties since 2001, including $1.9 million in 2010, the highest amount in the past decade. Senators like Lindsay Graham and John McCain have received significant sums from the private prison corporations while Chuck Schumer, Chair of the Rules Committee on Immigration and Border Enforcement, received at least $64,000 from lobbyists. The prison lobby thrives off of laws that criminalize migrants and submit them to mandatory detention prior to being deported, sometimes up to 10 months or more; private firms have consistently pushed for the classification of immigration violations as felonies to justify throwing more and more immigrants behind bars. The number of illegal immigrants being incarcerated inside the United States has risen exponentially under Immigration and Customs Enforcement, an agency responsible for annually overseeing the imprisonment of 400,000 foreign nationals at the cost of over $1.9 billion on custody-related operations.
The private prison industry has become increasingly dependent on immigration-detention contracts, and the huge contributions of the prison lobby towards drafting Arizona’s controversial immigration law SB 1070 are all but unexpected. Arizona’s SB 1070 requires police to determine the immigration status of someone arrested or detained when there is “reasonable suspicion” that they’ve illegally entered the US, which many view as an invitation for rampant racial profiling against non-whites. While the administration of Arizona’s Governor Jan Brewer is lined with former private prison lobbyists, its Department of Corrections budget has been raised by $10 million in 2012, while all other Arizona state agencies were subject to budget cuts during that fiscal year. The concept of privatizing prisons to reduce expenses comes at great cost to the inmates detained, who are subjected to living in increasingly squalid conditions in jail cells across America. In 2007, the Texas Youth Commission (TYC), a state agency that overseas juvenile corrections facilities, was sent to a West Texas juvenile prison run by GEO Group for the purpose of monitoring its quality standards.
The monitors sent by the TYC were subsequently fired for failing to report the sordid conditions they witnessed in the facility while they awarded the GEO Group with an overall compliance score of nearly 100% – it was later discovered that the TYC monitors were employed by the GEO Group. Independent auditors later visited the facility and discovered that inmates were forced to urinate or defecate in small containers due to a lack of toilets in some of the cells. The independent commission also noted in their list of reported findings that the facility racially segregated prisoners and denied inmates access to lawyers and medical treatment. The ACLU and Southern Poverty Law Center have also highlighted several cases where GEO Group facility administrators turned a blind eye to brutal cases of rape and torture within their facilities, in addition to cases of its staff engaging in violence against inmates. According to the Justice Department data, nearly 210,000 prisoners are abused annually (prison personnel are found responsible half the time), while 4.5 percent of all inmates reported sexual assaults and rape.
It’s not possible to conceive how such institutionalized repression can be rolled back when the Obama administration shows only complicity with the status quo – a staggering $18 billion was spent by his administration on immigration enforcement, including detention, more than all other federal law enforcement agencies combined. Under Obama’s watch, today’s private prison population is over 17 times larger than the figure two decades earlier. Accordingly, Obama’s drug czar, Gil Kerlikowske, has condemned the recently passed state laws in Colorado and Washington that legalize the possession of marijuana in small amounts. The Obama administration is bent on keeping in place the current federal legislation, where a first-time offender caught with marijuana can be thrown in prison for a year. It’s easy to see why common-sense decriminalization is stifled – an annual report released by the CCA in 2010 reiterates the importance of keeping in place harsh sentencing standards, “The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them.”
Such is the nature of a perverted brand of capitalism, and today’s model bares little difference to the first private prisons introduced following the abolition of slavery in the late 1800s, where expansive prison farms replaced slave plantations where predominately African-American inmates were made to pick cotton and construct railroads in states such as Alabama, Georgia and Mississippi. Today, African-Americans make up 40% of the prison population and are incarcerated seven times more often than whites, despite the fact that African-Americans make up only 12% of the population. Inmates are barred from voting in elections after their release and are denied educational and job opportunities. The disproportionate levels of black people in prisons is undeniably linked to law enforcement’s targeting of intercity black communities through anti-drug stipulations that command maximum sentencing for possession of minute amounts of rock cocaine, a substance that floods poor black neighborhoods.
Perhaps these social ills are byproducts of a system that places predatory profits before human dignity. Compounding the illogic is that state spending on prisons has risen at six times the rate of spending on higher education over the past two decades. Mumia Abu-Jamal, America’s most famous political prisoner, has spent over three decades on death row; he was convicted in 1981 for the murder of a white police officer, while forensic experts say critical evidence vindicating Jamal was withheld from the trial. In an interview with RT, Jamal relates his youth activism with the Black Panthers party against political imprisonment in contrast to the present day situation, “We could not perceive back then of what it would become… you can literally talk about millions of people incarcerated by the prisoner-industrial complex today: men, women and children. And that level of mass incarceration, really mass repression, has to have an immense impact in effect on the other communities, not just among families, but in a social and communal consciousness way, and in inculcation of fear among generations.” The fear and immortality the system perpetuates shows no sign of abating. Being one of the few growth industries the United States has left, one can only imagine how many people will be living in cages in the decades to come.
April 23, 2013
Posted by aletho |
Civil Liberties, Ethnic Cleansing, Racism, Zionism, Economics, Corruption, Timeless or most popular, Subjugation - Torture | United States, John McCain, Human rights, Corrections Corporation of America, Arizona, GEO Group, Texas Youth Commission, Jan Brewer, U.S. Immigration and Customs Enforcement, Chuck Schumer, Lindsay Graham |
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Karuturi Global Limited, a publicly registered holding company headquartered in Bangalore, India, may be under fire from the Kenya Revenue Authority (KRA) for tax evasion, but the complaints against it go further than that. The agribusiness firm, whose farm operations also straddle Ethiopia and India, has been dodging bullets about labour law violations, human rights abuses and environmental issues. Even the World Bank Group is no longer considering the company’s request for risk insurance for its investments in Ethiopia. This background note summarises the various problems that Karuturi has come to be known for among social justice movements around the world.
Tax evasion
Every year around US$ 1000 billion disappears without a trace from developing countries, ending up in tax havens or rich countries. The main part of this is driven by multinational companies seeking to evade tax where they operate.
The sum that leaves developing countries each year as unreported financial outflows, referred to as illicit capital flight, amounts to ten times the annual global aid flows, and twice the debt service developing countries pay each year. During 2000-2008 Africa was the region with the largest real growth of illicit capital flight, amounting to 21.9 % per year.
This money, if properly registered and taxed in the country of origin, could of course contribute to fulfilling human rights like the right to education and health care, and make a major difference in the fight to combat poverty. Due to just two forms of illicit capital flight used by corporations (‘mispricing’ and ‘false invoicing’), developing countries are losing three times the amount that is missing to achieve the UN millennium development goals (like universal education, stopping the spread of HIV, and halving extreme poverty) in tax revenues every year.
(For all facts on tax evasion above and more info on mispricing please see “Bringing the billions back: how Africa and Europe can end illicit capital flight” by Fröberg and Waris, 2011)
In 2012, the Kenya Revenue Authority developed a team of transfer pricing experts to audit accounts of companies in order to assess whether there was transfer mispricing and tax evasion taking place. Some transnational companies that export from Kenya are notoriously adept at it. However, the government has had difficulty tracing these firms’ operations due to lack of capacity and to date all audits and assessments, apart from one against Unilever, have been settled outside of public view.
On the 4th of April 2013 Karuturi filed a notice of appeal against the decision of the tax tribunal for taxes due to the Kenyan government and the Kenyan people. According to ICRA, an Indian credit rating research agency, in an October 2012 analysis commissioned by Karuturi as well as Karuturi’s 2012 annual report, Karuturi has been facing a number of potential threats to its financial viability, namely:
- An INR 57.8 crore (= KES 975 million / USD 10.7 million / EUR 8 million) dispute from the Kenya Revenue Authority over transfer pricing
- An INR 83.5 crore (= KES 1.4 billion / USD 15 million / EUR 11.5 million) claim on unpaid income taxes from the Indian authorities
- A risk of default on a USD 54.7 million (= KES 4.8 billion / EUR 40.3 million) foreign currency convertible bond due for redemption on 19 Oct 2012 which was since restructured
The overall tax claims come to USD 26 million, which is about one-quarter of the multinational’s global turnover in fiscal year 2012 (USD 106 million) while the amount for Kenya amounts to almost 1 per cent of Kenya’s total annual tax collection.
Money of this magnitude could be used as additional income for development or to replace some current taxes that target the poor like value added tax or even to delay the enactment of additional taxes like the one on maize flour due to be activated in Kenya in 2015.
Land grabs
Since 1996, Karuturi’s core business has been floriculture, producing 580 million roses per year from 289 hectares of land the company leases in Kenya (154 hectares), Ethiopia (125 hectares) and India (10 hectares). In 2012, the group commanded no less than 9% of the cut rose market in Europe. Since the 2007/2008 global food crisis, Karuturi began expanding from floriculture into food production. Its plan is to set up farming operations on over one million hectares, mainly in eastern and southern Africa, to produce primarily maize, rice, sugarcane and palm oil for international markets.
The hub of this expansion is Ethiopia. In 2009, Karuturi acquired 10,700 ha of land in Bako for maize, rice and vegetable production. In 2010, it got an additional 300,000 hectares for expansion in Gambela. The company aims to farm a total of 750,000 ha in Ethiopia. This land is leased from the government at bargain prices, but local communities consider it their own.
As a result, many conflicts have emerged around compensation, displacement and the relocation of villagers and herders who suddenly found themselves fenced off of their lands by the Indian company.
In 2011, Karuturi announced it was expanding further by pursuing a US$500 million investment for 370,000 ha in Tanzania, including an initial 1,000 ha in the country’s fertile Rufiji Basin. That same year, the company announced that it was in discussions with government officials in the Republic of Congo for a farm project in a special economic zone in Oyo-Ollombo, 400 km north of Brazzaville. In addition, it has been planning fruit and vegetable farms in Sudan, Mozambique and Ghana, and, says CEO Ramakrishna Karuturi, “in Senegal, we have made an exploratory probe and in Sierra Leone we have made initial contacts.” All of these countries are rife with land grabs right now.
Labour issues & disputes
According to a 2012 report published by the London Business School, 5% of Karuturi’s workforce in Ethiopia is composed of foreigners. Karuturi has been bringing in staff and consultants from abroad, including India, to run management, irrigation & drainage operations, and logistics because they said they could not find the experience locally. Same for manual labourers. Karuturi hires Ethiopians as unskilled labour but for skilled labour it says it faces problems. At the end of 2011, Karuturi got into a dispute with the Ethiopian government because they brought in several hundred Indian farmers to work on their farms in Gambela, which the Ethiopian authorities said contravened Ethiopian law and for which they would not give the permits. Karuturi reportedly also expects to rely on Indian farmers to handle its work on oil palm.
According to media and labour organisation organisation reports, workers on Karuturi farms in both Kenya and Ethiopia have been complaining about, and initiating labour actions against, various conditions, especially related to wages and safety.
In November 2012, Karuturi reportedly began laying off about 900 of its 3,500 seasonal workers in Naivasha, Kenya, due to financial problems. The number was later reduced to 600. In December 2012, 1,000 Karuturi workers went on strike to demand action from management on unpaid salaries and poor working conditions.
Earlier, in June 2010, Workers Rights Watch, a Kenyan association, carried out focus group discussions with Karuturi flower farm workers in Naivasha and registered a mixed scorecard of positive and negative opinions about the company.
Regarding Karuturi’s Ethiopian farms, various media and research reports have exposed complaints of poor wages. For example, a solid report commissioned by the International Land Coalition shows that Karuturi pays Ethiopian farm labourers at its Bako farm ETB 10 per day (US$ 0.50) which compares with about ETB 20 per day (US$ 1.00) for labourers on commercial sesame farms in the country. Night guards for the company are said to be paid ETB 300 per month (US$ 15) if they own a gun and ETB 200 (US$ 10) per month if they do not.
Human rights violations
According to a powerful 2012 report by Human Rights Watch, the Ethiopian government is forcibly relocating thousands of indigenous people in western Gambela to new villages lacking adequate food, farmland, healthcare, and educational facilities to make way for large scale agricultural projects of foreign investors, including Karuturi. The report said, based on interviews with community representatives, that crops of local Anuak communities were cleared without consent for the Karuturi operations and that residents of Ilea, a village of over 1,000 people within Karuturi’s lease area, were told by the Ethiopian government that they would be moved in 2012 as part of its “villagisation programme”. In response, CEO Sai Ramakrishna Karuturi denied any connection between his company’s activities and the government’s villagisation programme. In conversation with the Wall Street Journal’s unit in India, he described the Human Rights Watch report as “hogwash” and “a completely jaundiced western vision”, and even denied that the villagisation programme exists.
Loss of livelihoods
Karuturi’s 10,700 ha Bechera Agricultural Development Project in the Bako Plains of Ethiopia has deprived several local communities of their communal grazing areas and access to water for their livestock, thus severely affecting their livelihoods. This comes from a study commissioned by the International Land Coalition, based on detailed discussions with local communities, local authorities and Karuturi employees. The study documents how the lands were provided to Karuturi without the consent of the local communities and without compensation. It reveals that Karuturi is refusing to implement even the most minimal measures recommended by local authorities to address some of the impacts from its operations. For example building a livestock corridor through its fields so that locals could access water sources for their animals, or allowing them to graze their animals on crop residues.
Environmental & health concerns
Karuturi operates one of the largest flower farms in the Lake Naivasha Basin in Kenya, the country’s second largest freshwater lake. The flower farms are blamed for causing a drop in the lake’s water level, for polluting the lake with pesticides and chemical fertiliser runoff and for affecting the lake’s biodiversity. Workers at Karuturi’s flower farms in Naivasha who spoke with Muungano wa Wanavijiji, a local partner organisations of Forum Syd, in February 2013 said that the dilapidated condition of the Karuturi operations and poor protective clothing puts them at risk to exposure from chemicals. They say the company does not seem to care about their concerns.
For its farm in Gambela, Ethiopia, Karuturi has developed an irrigation system with 50km of canals, 50km of drainage, and 40km of dykes, to pump a reported 22,000 litres of water per second from the Baro River, a crucial source of water for people dependent on the White Nile. Karuturi’s smaller 10,700 ha farm in Bako also generates significant issues related to access to water and water quality for the local communities. Although environmental impact assessments are usually required for irrigation projects in Ethiopia, Karuturi reportedly did not undertake any such assessment prior to constructing its farming complex in Bako.
Investor confidence
Karuturi and its shareholders have been waiting since at least May 2011 for the World Bank’s Multilateral Investment Guarantee Agency (MIGA) to approve the company’s long pending bid for political risk insurance for its Ethiopian operations. According to Sai Karuturi, as of 2012 the application had still not been approved due to Karuturi’s plans to produce palm oil — a sensitive issue for which the Bank would require the Ethiopian government to put in place environmental protocols. Karuturi explained that he was therefore advised by MIGA to omit palm oil from the application for now and so he did. If MIGA protection fails to materialise, the company told investors that its fallback option would be to seek support from India’s Export Credit Guarantee Agency. On 29 January 2013, MIGA informed GRAIN, flatly, that Karuturi’s application “is no longer under consideration”.
In March 2013, Bloomberg reported that Karuturi was seeking “hundreds of millions” of fresh investment dollars from an unnamed sovereign wealth fund after yet another unnamed development bank refused it a loan.
In April 2013, the Indian paper Business Today reported that Karuturi was thinking of taking the company private.
April 23, 2013
Posted by aletho |
Corruption, Deception, Economics, Timeless or most popular | Africa, Ethiopia, India, Karuturi, Kenya, Kenya Revenue Authority |
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Silver Lining
