The Wall Street Connection (1992 to 2016)
[This piece has been adapted and updated by Nomi Prins from chapters 18 and 19 of her book All the Presidents’ Bankers: The Hidden Alliances that Drive American Power, just out in paperback (Nation Books).]
The past, especially the political past, doesn’t just provide clues to the present. In the realm of the presidency and Wall Street, it provides an ongoing pathway for political-financial relationships and policies that remain a threat to the American economy going forward.
When Hillary Clinton video-announced her bid for the Oval Office, she claimed she wanted to be a “champion” for the American people. Since then, she has attempted to recast herself as a populist and distance herself from some of the policies of her husband. But Bill Clinton did not become president without sharing the friendships, associations, and ideologies of the elite banking sect, nor will Hillary Clinton. Such relationships run too deep and are too longstanding.
To grasp the dangers that the Big Six banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) presently pose to the financial stability of our nation and the world, you need to understand their history in Washington, starting with the Clinton years of the 1990s. Alliances established then (not exclusively with Democrats, since bankers are bipartisan by nature) enabled these firms to become as politically powerful as they are today and to exert that power over an unprecedented amount of capital. Rest assured of one thing: their past and present CEOs will prove as critical in backing a Hillary Clinton presidency as they were in enabling her husband’s years in office.
In return, today’s titans of finance and their hordes of lobbyists, more than half of whom held prior positions in the government, exact certain requirements from Washington. They need to know that a safety net or bailout will always be available in times of emergency and that the regulatory road will be open to whatever practices they deem most profitable.
Whatever her populist pitch may be in the 2016 campaign — and she will have one — note that, in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader. Though she may, in the heat of that campaign, raise the bad-apples or bad-situation explanation for Wall Street’s role in the financial crisis of 2007-2008, rest assured that she will not point fingers at her friends. She will not chastise the people that pay her hundreds of thousands of dollars a pop to speak or the ones that have long shared the social circles in which she and her husband move. She is an undeniable component of the Clinton political-financial legacy that came to national fruition more than 23 years ago, which is why looking back at the history of the first Clinton presidency is likely to tell you so much about the shape and character of the possible second one.
The 1992 Election and the Rise of Bill Clinton
Challenging President George H.W. Bush, who was seeking a second term, Arkansas Governor Bill Clinton announced he would seek the 1992 Democratic nomination for the presidency on October 2, 1991. The upcoming presidential election would not, however, turn out to alter the path of mergers or White House support for deregulation that was already in play one iota.
First, though, Clinton needed money. A consummate fundraiser in his home state, he cleverly amassed backing and established early alliances with Wall Street. One of his key supporters would later change American banking forever. As Clinton put it, he received “invaluable early support” from Ken Brody, a Goldman Sachs executive seeking to delve into Democratic politics. Brody took Clinton “to a dinner with high-powered New York businesspeople, including Bob Rubin, whose tightly reasoned arguments for a new economic policy,” Clinton later wrote, “made a lasting impression on me.”
The battle for the White House kicked into high gear the following fall. William Schreyer, chairman and CEO of Merrill Lynch, showed his support for Bush by giving the maximum personal contribution to his campaign committee permitted by law: $1,000. But he wanted to do more. So when one of Bush’s fundraisers solicited him to contribute to the Republican National Committee’s nonfederal, or “soft money,” account, Schreyer made a $100,000 donation.
The bankers’ alliances remained divided among the candidates at first, as they considered which man would be best for their own power trajectories, but their donations were plentiful: mortgage and broker company contributions were $1.2 million; 46% to the GOP and 54% to the Democrats. Commercial banks poured in $14.8 million to the 1992 campaigns at a near 50-50 split.
Clinton, like every good Democrat, campaigned publicly against the bankers: “It’s time to end the greed that consumed Wall Street and ruined our S&Ls [Savings and Loans] in the last decade,” he said. But equally, he had no qualms about taking money from the financial sector. In the early months of his campaign, BusinessWeek estimated that he received $2 million of his initial $8.5 million in contributions from New York, under the care of Ken Brody.
“If I had a Ken Brody working for me in every state, I’d be like the Maytag man with nothing to do,” said Rahm Emanuel, who ran Clinton’s nationwide fundraising committee and later became Barack Obama’s chief of staff. Wealthy donors and prospective fundraisers were invited to a select series of intimate meetings with Clinton at the plush Manhattan office of the prestigious private equity firm Blackstone.
Robert Rubin Comes to Washington
Clinton knew that embracing the bankers would help him get things done in Washington, and what he wanted to get done dovetailed nicely with their desires anyway. To facilitate his policies and maintain ties to Wall Street, he selected a man who had been instrumental to his campaign, Robert Rubin, as his economic adviser.
In 1980, Rubin had landed on Goldman Sachs’ management committee alongside fellow Democrat Jon Corzine. A decade later, Rubin and Stephen Friedman were appointed cochairmen of Goldman Sachs. Rubin’s political aspirations met an appropriate opportunity when Clinton captured the White House.
On January 25, 1993, Clinton appointed him as assistant to the president for economic policy. Shortly thereafter, the president created a unique role for his comrade, head of the newly created National Economic Council. “I asked Bob Rubin to take on a new job,” Clinton later wrote, “coordinating economic policy in the White House as Chairman of the National Economic Council, which would operate in much the same way the National Security Council did, bringing all the relevant agencies together to formulate and implement policy… [I]f he could balance all of [Goldman Sachs’] egos and interests, he had a good chance to succeed with the job.” (Ten years later, President George W. Bush gave the same position to Rubin’s old partner, Friedman.)
Back at Goldman, Jon Corzine, co-head of fixed income, and Henry Paulson, co-head of investment banking, were ascending through the ranks. They became co-CEOs when Friedman retired at the end of 1994.
Those two men were the perfect bipartisan duo. Corzine was a staunch Democrat serving on the International Capital Markets Advisory Committee of the Federal Reserve Bank of New York (from 1989 to 1999). He would co-chair a presidential commission for Clinton on capital budgeting between 1997 and 1999, while serving in a key role on the Borrowing Advisory Committee of the Treasury Department. Paulson was a well connected Republican and Harvard graduate who had served on the White House Domestic Council as staff assistant to the president in the Nixon administration.
Bankers Forge Ahead
By May 1995, Rubin was impatiently warning Congress that the Glass-Steagall Act could “conceivably impede safety and soundness by limiting revenue diversification.” Banking deregulation was then inching through Congress. As they had during the previous Bush administration, both the House and Senate Banking Committees had approved separate versions of legislation to repeal Glass-Steagall, the 1933 Act passed by the administration of Franklin Delano Roosevelt that had separated deposit-taking and lending or “commercial” bank activities from speculative or “investment bank” activities, such as securities creation and trading. Conference negotiations had fallen apart, though, and the effort was stalled.
By 1996, however, other industries, representing core clients of the banking sector, were already being deregulated. On February 8, 1996, Clinton signed the Telecom Act, which killed many independent and smaller broadcasting companies by opening a national market for “cross-ownership.” The result was mass mergers in that sector advised by banks.
Deregulation of companies that could transport energy across state lines came next. Before such deregulation, state commissions had regulated companies that owned power plants and transmission lines, which worked together to distribute power. Afterward, these could be divided and effectively traded without uniform regulation or responsibility to regional customers. This would lead to blackouts in California and a slew of energy derivatives, as well as trades at firms such as Enron that used the energy business as a front for fraudulent deals.
The number of mergers and stock and debt issuances ballooned on the back of all the deregulation that eliminated barriers that had kept companies separated. As industries consolidated, they also ramped up their complex transactions and special purpose vehicles (off-balance-sheet, offshore constructions tailored by the banking community to hide the true nature of their debts and shield their profits from taxes). Bankers kicked into overdrive to generate fees and create related deals. Many of these blew up in the early 2000s in a spate of scandals and bankruptcies, causing an earlier millennium recession.
Meanwhile, though, bankers plowed ahead with their advisory services, speculative enterprises, and deregulation pursuits. President Clinton and his team would soon provide them an epic gift, all in the name of U.S. global power and competitiveness. Robert Rubin would steer the White House ship to that goal.
On February 12, 1999, Rubin found a fresh angle to argue on behalf of banking deregulation. He addressed the House Committee on Banking and Financial Services, claiming that, “the problem U.S. financial services firms face abroad is more one of access than lack of competitiveness.”
He was referring to the European banks’ increasing control of distribution channels into the European institutional and retail client base. Unlike U.S. commercial banks, European banks had no restrictions keeping them from buying and teaming up with U.S. or other securities firms and investment banks to create or distribute their products. He did not appear concerned about the destruction caused by sizeable financial bets throughout Europe. The international competitiveness argument allowed him to focus the committee on what needed to be done domestically in the banking sector to remain competitive.
Rubin stressed the necessity of HR 665, the Financial Services Modernization Act of 1999, or the Gramm-Leach-Bliley Act, that was officially introduced on February 10, 1999. He said it took “fundamental actions to modernize our financial system by repealing the Glass-Steagall Act prohibitions on banks affiliating with securities firms and repealing the Bank Holding Company Act prohibitions on insurance underwriting.”
The Gramm-Leach-Bliley Act Marches Forward
On February 24, 1999, in more testimony before the Senate Banking Committee, Rubin pushed for fewer prohibitions on bank affiliates that wanted to perform the same functions as their larger bank holding company, once the different types of financial firms could legally merge. That minor distinction would enable subsidiaries to place all sorts of bets and house all sorts of junk under the false premise that they had the same capital beneath them as their parent. The idea that a subsidiary’s problems can’t taint or destroy the host, or bank holding company, or create “catastrophic” risk, is a myth perpetuated by bankers and political enablers that continues to this day.
Rubin had no qualms with mega-consolidations across multiple service lines. His real problems were those of his banker friends, which lay with the financial modernization bill’s “prohibition on the use of subsidiaries by larger banks.” The bankers wanted the right to establish off-book subsidiaries where they could hide risks, and profits, as needed.
Again, Rubin decided to use the notion of remaining competitive with foreign banks to make his point. This technicality was “unacceptable to the administration,” he said, not least because “foreign banks underwrite and deal in securities through subsidiaries in the United States, and U.S. banks [already] conduct securities and merchant banking activities abroad through so-called Edge subsidiaries.” Rubin got his way. These off-book, risky, and barely regulated subsidiaries would be at the forefront of the 2008 financial crisis.
On March 1, 1999, Senator Phil Gramm released a final draft of the Financial Services Modernization Act of 1999 and scheduled committee consideration for March 4th. A bevy of excited financial titans who were close to Clinton, including Travelers CEO Sandy Weill, Bank of America CEO, Hugh McColl, and American Express CEO Harvey Golub, called for “swift congressional action.”
The Quintessential Revolving-Door Man
The stock market continued its meteoric rise in anticipation of a banker-friendly conclusion to the legislation that would deregulate their industry. Rising consumer confidence reflected the nation’s fondness for the markets and lack of empathy with the rest of the world’s economic plight. On March 29, 1999, the Dow Jones Industrial Average closed above 10,000 for the first time. Six weeks later, on May 6th, the Financial Services Modernization Act passed the Senate. It legalized, after the fact, the merger that created the nation’s biggest bank. Citigroup, the marriage of Citibank and Travelers, had been finalized the previous October.
It was not until that point that one of Glass-Steagall’s main assassins decided to leave Washington. Six days after the bill passed the Senate, on May 12, 1999, Robert Rubin abruptly announced his resignation. As Clinton wrote, “I believed he had been the best and most important treasury secretary since Alexander Hamilton… He had played a decisive role in our efforts to restore economic growth and spread its benefits to more Americans.”
Clinton named Larry Summers to succeed Rubin. Two weeks later, BusinessWeek reported signs of trouble in merger paradise — in the form of a growing rift between John Reed, the former Chairman of Citibank, and Sandy Weill at the new Citigroup. As Reed said, “Co-CEOs are hard.” Perhaps to patch their rift, or simply to take advantage of a political opportunity, the two men enlisted a third person to join their relationship — none other than Robert Rubin.
Rubin’s resignation from Treasury became effective on July 2nd. At that time, he announced, “This almost six and a half years has been all-consuming, and I think it is time for me to go home to New York and to do whatever I’m going to do next.” Rubin became chairman of Citigroup’s executive committee and a member of the newly created “office of the chairman.” His initial annual compensation package was worth around $40 million. It was more than worth the “hit” he took when he left Goldman for the Treasury post.
Three days after the conference committee endorsed the Gramm-Leach-Bliley bill, Rubin assumed his Citigroup position, joining the institution destined to dominate the financial industry. That very same day, Reed and Weill issued a joint statement praising Washington for “liberating our financial companies from an antiquated regulatory structure,” stating that “this legislation will unleash the creativity of our industry and ensure our global competitiveness.”
On November 4th, the Senate approved the Gramm-Leach-Bliley Act by a vote of 90 to 8. (The House voted 362–57 in favor.) Critics famously referred to it as the Citigroup Authorization Act.
Mirth abounded in Clinton’s White House. “Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the twenty-first century,” Summers said. “This historic legislation will better enable American companies to compete in the new economy.”
But the happiness was misguided. Deregulating the banking industry might have helped the titans of Wall Street but not people on Main Street. The Clinton era epitomized the vast difference between appearance and reality, spin and actuality. As the decade drew to a close, Clinton basked in the glow of a lofty stock market, a budget surplus, and the passage of this key banking “modernization.” It would be revealed in the 2000s that many corporate profits of the 1990s were based on inflated evaluations, manipulation, and fraud. When Clinton left office, the gap between rich and poor was greater than it had been in 1992, and yet the Democrats heralded him as some sort of prosperity hero.
When he resigned in 1997, Robert Reich, Clinton’s labor secretary, said, “America is prospering, but the prosperity is not being widely shared, certainly not as widely shared as it once was… We have made progress in growing the economy. But growing together again must be our central goal in the future.” Instead, the growth of wealth inequality in the United States accelerated, as the men yielding the most financial power wielded it with increasingly less culpability or restriction. By 2015, that wealth or prosperity gap would stand near historic highs.
The power of the bankers increased dramatically in the wake of the repeal of Glass-Steagall. The Clinton administration had rendered twenty-first-century banking practices similar to those of the pre-1929 crash. But worse. “Modernizing” meant utilizing government-backed depositors’ funds as collateral for the creation and distribution of all types of complex securities and derivatives whose proliferation would be increasingly quick and dangerous.
Eviscerating Glass-Steagall allowed big banks to compete against Europe and also enabled them to go on a rampage: more acquisitions, greater speculation, and more risky products. The big banks used their bloated balance sheets to engage in more complex activity, while counting on customer deposits and loans as capital chips on the global betting table. Bankers used hefty trading profits and wealth to increase lobbying funds and campaign donations, creating an endless circle of influence and mutual reinforcement of boundary-less speculation, endorsed by the White House.
Deposits could be used to garner larger windfalls, just as cheap labor and commodities in developing countries were used to formulate more expensive goods for profit in the upper echelons of the global financial hierarchy. Energy and telecoms proved especially fertile ground for the investment banking fee business (and later for fraud, extensive lawsuits, and bankruptcies). Deregulation greased the wheels of complex financial instruments such as collateralized debt obligations, junk bonds, toxic assets, and unregulated derivatives.
The Glass-Steagall repeal led to unfettered derivatives growth and unstable balance sheets at commercial banks that merged with investment banks and at investment banks that preferred to remain solo but engaged in dodgier practices to remain “competitive.” In conjunction with the tight political-financial alignment and associated collaboration that began with Bush and increased under Clinton, bankers channeled the 1920s, only with more power over an immense and growing pile of global financial assets and increasingly “open” markets. In the process, accountability would evaporate.
Every bank accelerated its hunt for acquisitions and deposits to amass global influence while creating, trading, and distributing increasingly convoluted securities and derivatives. These practices would foster the kind of shaky, interconnected, and opaque financial environment that provided the backdrop and conditions leading up to the financial meltdown of 2008.
The Realities of 2016
Hillary Clinton is, of course, not her husband. But her access to his past banker alliances, amplified by the ones that she has formed herself, makes her more of a friend than an adversary to the banking industry. In her brief 2008 candidacy, all four of the New York-based Big Six banks ranked among her top 10 corporate donors. They have also contributed to the Clinton Foundation. She needs them to win, just as both Barack Obama and Bill Clinton did.
No matter what spin is used for campaigning purposes, the idea that a critical distance can be maintained between the White House and Wall Street is naïve given the multiple channels of money and favors that flow between the two. It is even more improbable, given the history of connections that Hillary Clinton has established through her associations with key bank leaders in the early 1990s, during her time as a senator from New York, and given their contributions to the Clinton foundation while she was secretary of state. At some level, the situation couldn’t be less complicated: her path aligns with that of the country’s most powerful bankers. If she becomes president, that will remain the case.
Nomi Prins is the author of six books, a speaker, and a distinguished senior fellow at the non-partisan public policy institute Demos. Her most recent book, All the Presidents’ Bankers: The Hidden Alliances that Drive American Power (Nation Books) has just been released in paperback and this piece is adapted and updated from it. She is a former Wall Street executive.
Copyright 2015 Nomi Prins
For over two decades now, US planes have been dumping tons of pesticides over Colombian coca fields.
Originally the Colombian government wholeheartedly supported the ridiculous notion of mass killing all vegetation in attempt to cull the drug trade. However, it is no longer a secret that the health effects of long-term exposure to glyphosate are less than desirable.
Just last month, the World Health Organization was forced to admit that glyphosate is “probably carcinogenic to humans.”
The recent acceptance by the mainstream that Monsanto’s Roundup causes a slew of negative health effects has sparked fear and infighting among the Colombian government.
According to the AFP,
Health Minister Alejandro Gaviria said last week that Colombia should “immediately suspend” spraying — a move vehemently opposed by Defense Minister Juan Carlos Pinzon, who said it would “give criminals the upper hand.”
The row erupted just as US Deputy Secretary of State Antony Blinken paid a visit to Colombia, which the United States sees as one of its closest allies in the region.
The politicians who are fear-mongering about stopping the program are likely scared of losing the hundreds of millions in funds received annually from the US to combat the cultivation of this plant.
Daniel Mejia, the head of Colombia’s Center for Research on Security and Drugs explained why they are worried about the program. “We carried out a study that showed fumigating caused dermatological and respiratory problems and provoked miscarriages,” he said.
Even if dumping massive amount of carcinogenic pesticides from airplanes was a good idea, it’s not effective. According to the United Nations Office on Drugs and Crime, this program has aided Colombia in reducing its coca fields from more than 140,000 hectares (346,000 acres) in 2001 to 48,000 hectares in 2013. However, they conveniently left out the increase seen last year.
The amount of land under coca cultivation in Colombia jumped 39 percent in 2014 to 112,000 hectares (about 27,000 acres), according to the Office of National Drug Control Policy.
Cocaine trafficking in Latin American region has caused a slew violence and turmoil, including the Colombian civil war. However, this turmoil is a direct result of prohibition spearheaded by the United States.
Colombia never had a cocaine trafficking problem until the US-funded war on drugs began its destructive path across South America.
During the 1980s, Peru, Bolivia and Colombia were responsible for 65%, 25% and 10% of the world’s coca production respectively. By 2000, however, the US “war on drugs” in neighboring Andean countries had turned Colombia into the world’s largest cocaine producer by far, representing 90% of the total, according to a report from the from the Woodrow Wilson International Center for Scholars.
The coca plant is one of the most beneficial and astonishingly resilient plants in the world. Resistant to drought and disease, coca needs no irrigation and the alkaloids it contains provide a myriad of medicinal uses. From its analgesic effects to digestive aid, coca’s positive influence in medicine is vast.
The plant has played an important role in history dating back to the Pre-Inca period.
According to a study published by Harvard University in 1975, (Nutritional Value of Coca Leaf (Duke, Aulick, Plowman 1975)) chewing 100 grams of coca is enough to satisfy the nutritional needs of an adult for 24 hours. Thanks to the calcium, proteins, vitamins A and E, and other nutrients it contains, the plant offers even better possibilities to the field of human nutrition than it does to that of medicine, where it is commonly used today.
However, the state cares not about the benefit of such a plant, only that it can be turned into a white powdery substance and snorted to stimulate long and often nonsensical conversations. Instead of cultivating the plant for its benefits, the immoral war on drugs drops carcinogens from airplanes to stop its growth.
The president of Colombia, Juan Manuel Santos, is avoiding any stance on the aerial spraying program whatsoever. According to the AFP, his staff said the final authority on the matter is the National Narcotics Council, which falls under the Justice Ministry. In the meantime, however, the spraying continues.
The intelligence sharing relationship between German and American spy agencies is one of dominance and blackmail rather than cooperation, with Germany’s BND acting as a “colony” used to help gather information for US authorities, German activist and publicist Christoph Horstel said.
There has been much speculation regarding the seemingly close relationship between German and US intelligence agencies in recent times, following German media reports alleging that Berlin’s foreign intelligence agency — the BND — spied on various European targets on behalf of America’s National Security Agency (NSA).
According to the reports, the NSA had been given access to the e-mails of various European politicians, EU institutions and European member state ministries.
This led many to suggest Germany was complicit with the US in operating an illegal global spy network. Chancellor Angela Merkel denied Germany was involved in illegal activity, telling journalists that it was essential for the BND to keep working with the NSA in order to ensure the safety of citizens.
‘A Big Show, A Big Farce’
However, Christoph Horstel believes that while Berlin does act on behalf of Washington’s intelligence agencies, he told Sputnik that the relationship is very one-sided.
“Well this is a big show, a big farce. All of the political insiders know what the real question is. The real question is that this is not cooperation; Germany is [a] colony.”
Horstel points out that the former US Office of Strategic Services (OSS) — which later become the CIA — established the German BND, and he believes it has been set up to look after Washington’s European interests.
“What we do have here, in fact, is a written understanding that the BND has to give — free of charge — any of the fruits of its work to the CIA. That is quite normal,” he said.
“The Americans are the masters of the game in Europe, so we [Germany] have to deliver to them. It’s a kind of service; a service of Germany to the US and we have to do that — that’s fact.”
German Officials ‘Blackmailed’ by US
Despite German Chancellor Angela Merkel fronting the media to deny accusations that she was in any way complicit in allowing American authorities to illegally spy on European firms, Horstel believes the chancellor would be well aware of what practices are going on.
“If she [Merkel] was not very deeply cooperating with the Americans, she would not be chancellor. We have a double system to ensure that we do exactly as Washington wants.
“What we have here is a very clear-cut system of blackmail against anyone in a high position — that’s number one,” he said, suggesting that US access to German security files allows American authorities to hold German politicians to ransom.
Meanwhile, Horstel also believes an inherent American influence on German politics and media means that governments in favor of US policy are also elected, and the media consistently follows American rhetoric on international issues, such as the crisis in Ukraine.
“Number two is that when it comes to elections, you will get into a powerful enough position to win unless the Americans are nodding their head. This also applies to the army ranks and the media ranks.
“This is why it’s important to note why the German media is so hostile to Russia. The Americans say it, and we [Germans] do it.”
Austria filed a formal complaint over suspicions that German and American intelligence agencies have spied on its authorities and firms, the Austrian interior minister said on Tuesday.
“Austria demands clarification,” Interior Minister Johanna Mikl-Leitner told Reuters, following German media reports about such activities. She added that Austria’s security authorities were in contact with their German counterparts.
“Today we have filed a legal complaint with the prosecutor’s office,” she said, “against an unknown entity due to secret intelligence services to Austria’s disadvantage.”
German media reports said the BND, Germany’s intelligence agency, used its Bad Aibling listening post in Bavaria to spy on the French presidential palace, French foreign ministry and European Commission.
The snooping was done at the behest of US spy agency National Security Agency (NSA), which also asked the BND to monitor European firms to check if they were breaking trade embargos, according to reports.
Mikl-Leitner said that while there is not yet concrete evidence, “it’s not far-fetched to suspect that Austria was also spied on.”
She added that Austria will try to resolve the situation through its security, diplomatic and judicial bodies.
The NSA is believed to have passed a list of some 800,000 IP addresses, phone numbers and email addresses to the BND for monitoring, some of which belonged to European politicians and companies.
Citing an unnamed source from the German parliamentary committee on the US spying agency, German newspaper Bild said Berlin chose to remain silent and close its eyes to the information in order to avoid “endangering cooperation” with Washington and the NSA.
German Interior Minister Thomas de Maiziere has denied reports that he was aware of the spying since at least 2008.
During a press briefing Monday, German Chancellor Angela Merkel said Berlin is engaged in consultations with Washington on the NSA’s surveillance practices.
“I think what’s important here is that friends do not spy on each other. The answer is that it should not be so,” Merkel said.
She continued: “We are at the disposal of respective parliamentary bodies. The chancellor’s office is ready to provide all necessary information. This process is already under way. We are also consulting the United States.”
Secret documents leaked in 2013 by former NSA contractor Edward Snowden showed that the US spy agency monitored Merkel’s personal cell phone too.
A journalist learns that if you photograph Border Policemen committing a felony, you’ll probably end up paying for it.
Near the end of January 2015, Amin Hassan Raneh Alawiya left his home in East Jerusalem’s Al-Azariya neighborhood and made his way to a wedding. As he later described it in his police complaint, upon leaving the house, lawiya – a photojournalist by profession – noticed a demonstration taking place nearby. Naturally, he picked up his camera and went over to document it. A Border Policeman, whom Alawiya recognized, ordered him to move away. In fact, he gave Alawiya the choice of either moving away, getting arrested or getting shot. Alawiya went back home and photographed from there.
Two policemen then came to the house and called Alawiya to come out. When he did the two cops jumped him. They continued hitting him as he was led to their vehicle, and from what they said on the two-way radio, Alawiya understood that he was to blame for disregarding their instructions. Inside the vehicle, the policemen kept hitting him, one of them shouting “this is for our friend” and “our friend will shoot you,” using the name of a third policeman. One of them also used the opportunity to curse the founder of Islam, Muhammad, until the other one told him to stop.
Who is the third cop? Ah! This is the core of the story. In May 2014, as part of his job, Alawiya documented Border Policemen assaulting a hooded child in East Jerusalem, after he was suspected of throwing stones. The policemen also took photos of themselves with the wounded child. The “friend” is one of those documented in Alawiya’s video, which enjoyed widespread distribution on Al Jazeera and other networks. Ever since, he says, he became a target for the Border Police in East Jerusalem, which he claims prevent him from filming in the city and even broke one of his cameras.
Alawiya’s detention in January was part of the Border Police’s quest for vengeance. One of the problems with police forces, particularly forces that are not subject to serious oversight, is that they tend to become a kind of gang: the permeation of a culture of violence and lies becomes common. We have seen the violence, now let’s deal with the deceitfulness.
After his detention, Alawiya was held, handcuffed and blindfolded, in the Abu Dis Border Police base for some two hours. He was then transferred to the police station in the West Bank settlement of Ma’ale Edumim. There he requested to file a complaint of assault against the cops, but the officer present refused to receive the complaint, and told him he should turn to Israel’s Internal Affairs Division. As we will see, this was a hollow demand that reflected the police’s negligence. Alawiya was immediately informed that he was charged with assaulting and obstructing an officer. The police then demanded Alawiya sign a document saying he was not attacked by the police. He did so, but added in Arabic that it was he who was assaulted. Soon afterward, Alawiya was led to an interrogation room, where he was informed by the interrogator that he was suspected of obstructing an officer.
Did you get what, according to the complaint, just happened? Prior to signing a document saying he was not assaulted by the police, Alawiya was accused of assaulting an officer. After he signed the document, the charge of assaulting an officer simply evaporated. There is a method here, well-known to veterans of demonstrations in Israel and East Jerusalem: as soon as you complain about police brutality, you are automatically charged with assaulting an officer.
When a police force fabricates a complaint against a civilian, especially after he complains of being assaulted by a cop, there is, to put it mildly, a gross misunderstanding of the function of the police. Its duty is to maintain law and order, not to protect itself. When it distorts reality, it lies to itself, to the public that pays its salary and to the courts. When it pins false charges on a person, it is conspiring to damage his good name, his livelihood, and in the worst case scenario, deprives him of his liberty. It then ceases to be the servant of the public and becomes its enemy; it ceases being a vehicle for safeguarding human rights and becomes a tool for their denial.
Alawiya couldn’t file a complaint with the Internal Affairs Division, since he lives in East Jerusalem, specifically in a neighborhood that lies east of the separation wall. Despite the fact that Israeli Police (which includes the Border Police) have been active in East Jerusalem since it was occupied in 1967, there is no Internal Affairs Division station there. In order to lodge a complaint, Alawiya either needs a permit to enter Israel, or needs to use mediators such as human rights organizations. He says that ever since he documented the young boy being abused in May 2014, his permit has been denied.
And if you thought that was bad, the story doesn’t end there: a relative of Alawiya paid NIS 2,000 for his release on bail, since being assaulted by police and and then being wrongfully detained means you need to post bail. The relative, however, did not receive a receipt for the money. What happens to money given to a policeman when no receipt is given? Your guess is as good as mine.
In March 2014, Yesh Din Attorney Emily Schaeffer Omer-Man, sent a complaint to the Internal Affairs Division, demanding an immediate investigation on suspicion of, inter alia, false arrest, assault, abuse of the power of office and conduct unbecoming.
Given that in 93 percent of the complaints submitted in 2011-2014, the Internal Affairs Division closed the case without any investigation; that of the 11,282 complaints in the years 2011-2013, only 2.7 percent turned into indictments; and that the former chief of the division is on record saying that the police suffer from a “culture of lies” and that policemen cover for each other, one cannot hope too much that a journalist who exposed the face of the police will see justice. And these, we note, are the results for all complaints to the Internal Affairs Division, not just those by Palestinians. We’ll keep you posted.
Why don’t we look at the root causes of the Baltimore riots…?
European aviation consortium Airbus said it would file criminal charges over industrial espionage, following reports that US and German foreign intelligence spied on the industry giant.
“We are aware that as a large company in the sector, we are a target and subject of espionage,” the company said in a statement to AFP on Thursday. “However, in this case we are alarmed because there is concrete suspicion of industrial espionage.”
The move follows reports in Bild newspaper and Der Spiegel news magazine based on intelligence documents, claiming US spy agency, the NSA, deliberately targeted Airbus and Eurocopter – also run by the French-based company. The reports additionally revealed Berlin was aware of the espionage and kept quiet since 2008.
Following the allegations, Airbus “asked the German government for information.”
“We will now file a criminal complaint against persons unknown on suspicion of industrial espionage,” the company said.
It is alleged the German Foreign Intelligence service (BND) collaborated with the NSA in providing information about Airbus’ industrial secrets. The German media reports also alleged BND used the Bad Aibling monitoring station in Bavaria not only to spy on industrial business, but also to eavesdrop on the French president, the French foreign ministry, and the European Commission.
A French foreign ministry spokesman was quoted by DW as saying: “We are in close contact on this issue with our German partners.”
The German public and the political elite were furious following the 2013 disclosures by former NSA contractor Edward Snowden, into the NSA hack of Chancellor Angela Merkel’s cell phone. Yet while promising to respond, Germany has done nothing over the years.
One of the major barriers blocking U.S. President Barack Obama’s campaign for his mammoth international trade deals — the TTIP with Europe, and the TPP with Asia — is: other countries want the freedom to make up their own minds about the safety or dangerousness of the foods they allow to be sold within their borders.
The Obama Administration insists that no nation has that freedom. In fact, all participating nations would be removed from that responsibility and authority. The Obama trade deals propose to replace that national authority, and basic national sovereignty on these important matters, by decisions that would instead be made by international panels, whose members will be appointed by international corporations, which have their own profits at stake in these matters. Consumers and others will be ignored: they will not be represented in the proposed panels. Nor will any government be represented there. That soverignty will instead be transferred to the billionaire families who control and derive their income from these corporations.
On Friday, April 24th, Agence France Presse headlined “US Stresses Opposition to EU Opt-Out for GMO Imports,” and reported that, “The United States underscored Friday its opposition to a new European Union plan to allow member states to block genetically engineered imports after bilateral talks on a transatlantic free-trade pact.”
President Obama’s Trade Representative, Michael Froman, who is a Wall Street banker and a longtime close personal friend of the President, said on April 22nd that he was “very disappointed” that the EU wants to allow individual EU nations to “opt out” of automatic approval of Genetically Modified Organisms (GMOs) that the international panels will approve to be marketed everywhere. Furthermore, Froman’s assistant said that the U.S. rejects “a proposal to allow EU member states to ban products deemed safe by Europe’s own scientists.” He was referring there to the half of scientific papers that find GMO foods to be safe. However, those papers were produced by companies that manufacture and market GMOs. The other half of the scientific papers on GMOs, the half that were produced independently of the GMO industry, have not found GMO foods to be safe — to the exact contrary. The Office of the U.S. Trade Representative ignores those papers.
On 8 July 2009, Agence France Presse headlined “Scientists Warn of Hazards of GMOs,” and reported that an article in the International Journal of Biological Science co-authored by world-leading scientists, reported that, “Agricultural GM companies and evaluation committees systematically overlook the side effects of GMOs and pesticides.” An accompanying study, “How Subchronic and Chronic Health Effects Can Be Neglected for GMOs, Pesticides or Chemicals,” found “a significant underestimation of the initial signs of diseases like cancer and diseases of the hormonal, immune, nervous and reproductive systems.”
The United States does not regulate GMO foods, because the patents are owned mostly by U.S. companies, and the U.S. Government doesn’t want to get in the way of their selling their patented products. Consequently, the U.S. Food and Drug Administration takes any given GMO manufacturer’s word for the safety of its GMO products. U.S. President Obama wants to promote U.S. trade by convincing all other countries to sell GMO foods. His TTIP and TPP are supported by the GMO industry, which has approved their GMO foods and allowed their product-labels to not mention that some or all of the ingredients are genetically modified crops.
One of the major advantages of GMO crops is that they can survive the use of herbicides — weed-killers — that kill natural crops. (The GMO-seed manufacturer also markets the pesticide or herbicide; these are chemical companies, and GMOs are a complementary or synergistic product-line for them. For example, the leading herbicide “Roundup” is from Monsanto which produces the GMO seeds that tolerate it.) Another advantage is that the foods can stay longer as looking and smelling fresh, which also lowers the cost of production, and yet the consumer doesn’t even know that the food is actually stale — the food is competing against costlier-to-produce non-GMO foods and so driving them off the market by the lower price, which leaves more and more food-production dependent upon GMO makers such as Monsanto, DuPont, and Dow Chemical. The lower price is obvious; the lower quality is hidden. It’s race-to-the-bottom international ‘competition,’ in which the aristocracy reap all the winnings; the public get the losses.
A recent news report from independent food scientists was bannered “FDA Product Safety Declaration Misleads Nation—Again” and it contains references to many recent scientific papers that find GMO foods to be dangerous, and harmful to human health.
An international analysis, “A Comparative Evaluation of the Regulation of GM Crops” was published in 2013 in the scientific journal Environment International, and it concluded by saying that, “Regulatory bodies are not adequately assessing the risks of dsRNA-producing GM products. As a result, we recommend a process to properly assess the safety of dsRNA-producing GM organisms before they are released or commercialized.” The Obama Administration is trying to prevent that from happening; and their proposed TTIP and TPP international-trade treaties are crucial components of achieving this objective. In the United States, GMO-producers are granted the right to self-regulate, and this practice will become the standard worldwide practice if the TPP and TTIP become passed into law.
The U.S. Government is doing everything it can to spread to other nations the same deregulatory policies that American companies rely upon to market their products inside the United States. On Friday, April 25th, a key U.S. Senate Committee approved a “Trade Promotion Authority” bill to help rush through the U.S. Senate the approval of Mr. Froman’s TPP trade deal with Asian countries. For a summary of the regulatory practices around the world regarding GMO crops, see here. A discussion of the votes in the U.S. Senate on the measure that was proposed by Senator Bernie Sanders to allow individual states to establish their own regulations requiring the labeling or indication of whether or not particular food ingredients are GMOs (since the federal Government refuses to consider such a proposal), is here, and it shows that even some allegedly progressive U.S. Senators voted the GMO industry’s way on that bill to regulate it, which failed, on a vote of 71 to 27. One might call this the Monsanto Congress, because the U.S. House is even more conservative than the Senate. Of the 27 U.S. Senators who voted for the Sanders bill, 24 were Democrats, 2 were Independents, and 1 was Republican. 43 Republicans, and 28 Democrats voted against it. The Obama Administration had lobbied against the bill, in order to continue the GMO industry’s free reign over America’s food-supply.
When Barack Obama campaigned for the Presidency in 2008, he said, “Let folks know when their food is genetically modified, because Americans have a right to know what they’re buying.” But as soon as he won the Presidency “The new president filled key posts with Monsanto people, in federal agencies that wield tremendous force in food issues, the USDA and the FDA.” And whereas Republican news-organizations such as Fox ‘News’ criticized him as being a Muslim Marxist, he was actually implementing policies that continued those of the Republican George W. Bush Administration on this and on many other issues. Yet, no matter how far to the right Mr. Obama actually was, he was portrayed as a ‘leftist’ in Republican ’news’ media. And yet, still, even today, the vast majority of Democratic voters approve of his actions as President. They still believe his rhetoric, even though he has lied to them constantly and even filed a friend-of-the-court brief in the U.S. Supreme Court arguing that lying in politics must continue to remain unrestricted not only at the national level but also in each and every one of the states. Consequently, in the United States, there is no effective political opposition to the large international U.S. corporations. (And, under the Republican Supreme Court’s 2010 Citizens United decision, corporations now have virtually unlimited freedom to use stockholders’ money to purchase politicians.)
Hillary Clinton is a big supporter of the GMO industry, and the response of liberals to that is to ask her to give them rhetoric they like on the matter, just as Obama had done when he was running for President in 2008. In other words: they will campaign for her to become President if she will only lie to them as Obama did to them. What liberals are demanding is rhetoric; but if they get it from her, then the industries that are funding her Presidential campaign won’t be worried, because she has a solid record of doing what her financial backers want her to do. As long as Americans don’t care when a politician has lied to them, lying to them will continue to be the way to win public office — especially considering that America’s international corporations now have been granted by the Republican U.S. Supreme Court a ‘free speech’ right to purchase the U.S. Government. And now that the Supreme Court has also ruled that political lies are a Constitutionally protected form of speech, those ads don’t even need to be true. If the American people don’t care about honesty, then they won’t have an honest government, because America’s corporations can then buy any U.S. Government they want — they’ll have total impunity if the U.S. public don’t even care about honesty in their government. There are no legal penalties for political lying; so, if there are also no political penalties for it, then the U.S. can only be ruled by lies and their liars. Should that be called “fascism”?
According to the generally progressive Democratic U.S. Senator Sherrod Brown of Ohio (who, along with Elizabeth Warren and Bernie Sanders is one of the Senate’s three leading opponents of Mr. Obama’s proposed international-trade treaties), President Obama has been lobbying Senators more insistently and more intensely on getting them to grant him “Fast Track Trade Promotion Authority” to ram these treaties through, than on any other single issue since Obama first became President in 2009. No issue, not even Obamacare nor any other, has been as important to Obama as is his getting signed into law the TPP and TTIP. It would certainly be the culmination of his Presidency if he succeeds. It would be his crowning achievement. He and his heirs will be amply rewarded if he succeeds; and that’s apparently what he really cares about. He has shown it by his actions as President, not by his rhetoric to voters. After all: Americans, it seems, don’t really care about honesty. All they really care about is rhetoric that pleases them. They merely want to be told what they want to hear.
Perhaps this is the reason why no progressive has entered the Democratic Presidential contest against Hillary Clinton. If the only realistic possibilities to become the next President are her and her Republican opponent (whomever he will turn out to be), then America will continue to be a de facto one-party State, and this will be the U.S. international-corporate party, in both of its factions or nominal varieties, controlling the U.S. Government. The only comprehensive scientific study that has yet been done finds that the U.S. has, in fact, already been ruled in this way for some time. (The history of how it came to be this way, starting gradually after the end of World War II, is the subject of my latest book.) Obama is merely implementing it more; he didn’t start it. He is implementing it more than even Republicans were able to do.
Obama wouldn’t have been able to do this if he didn’t come bearing the label ‘Democrat.’ And Hillary Clinton’s husband Bill was the key person to subordinate that Party to Wall Street. Hillary and Obama are following in his footsteps. Obama’s “Change” occurred actually when Bill Clinton became President in 1993. It simply hasn’t been much recognized until now. Today’s Democratic Party started when Bill became President. That’s when the one-party State, with the national Democrats playing the role of the ‘Good Cop’ to the national and local Republicans’ role of the ‘Bad Cop,’ in the eyes of the Democratic Party’s electoral base of deceived liberals, actually began to take over the U.S. Government, for the benefit of, and service to, America’s aristocracy.
This is why both Obama and Clinton are big supporters of essentially unregulated GMOs. It’s sort of like unregulated Wall Street: the profits get privatized, while the losses (poor health etc.) get socialized.
The Department of Defense started, then discarded, four massive missile defense projects, wasting $10 billion on technology that wasn’t capable of protecting the United States from foreign attack.
An investigation by the Los Angeles Times identified four programs developed by the Missile Defense Agency (MDA) that did not work as advertised:
The Sea-Based X-Band Radar (SBX), an enormous floating radar ship, was supposed to be able to detect even tiny incoming objects into U.S. airspace from thousands of miles away. SBX, built by Boeing and Raytheon, was going to guide rocket interceptors to enemy ballistic missiles before they could reach U.S. soil. But after a $2.2 billion investment, MDA realized SBX couldn’t distinguish between missiles and decoys. The technology has been mothballed at Pearl Harbor in Hawaii.
The Airborne Laser was going to allow the U.S. to blast enemy missiles using lasers mounted on converted Boeing 747s. But it turned out the lasers couldn’t be fired from long distance, requiring the planes to fly so close to an enemy country that they would be vulnerable to being shot down. So the MDA shut down the project, which cost $5.3 billion, according to the Times’ David Willman.
The Kinetic Energy Interceptor was a rocket that was supposed to be fired from land or from a ship to intercept enemy missiles during their boost phase. However, the interceptor didn’t fit on ships and didn’t have the necessary range to be fired from land. After six years of development and $1.7 billion of investment, the program ended. “No matter how successful tests might one day have been, the system would have had negligible utility,” a National Academy of Sciences review panel said.
The Multiple Kill Vehicle, a cluster of small interceptors that could take out enemy warheads and decoys, never even got a test flight. It burned through nearly $700 million.
“You can spend an awful lot of money and end up with nothing,” Mike Corbett, a retired Air Force colonel who oversaw the agency’s contracting for weapons systems from 2006 to 2009, told the Times. “MDA spent billions and billions on these programs that didn’t lead anywhere.”
Another retired officer, Air Force Gen. Eugene E. Habiger, former head of the U.S. Strategic Command and a member of a National Academy panel that reviewed MDA’s missteps, said the agency failed to analyze alternatives or seek independent cost estimates. Or, as he put it: “They are totally off in la-la land.”
To Learn More:
The Pentagon’s $10-Billion Bet Gone Bad (by David Willman, Los Angeles Times )
Another Missile Defense Test, Another Failure (by Matt Bewig, AllGov )
Reagan’s Star Wars Program…More than $200 Billion Later (by Noel Brinkerhoff, AllGov )
What’s $300 million when a project could end up consuming more than $50 billion over its lifetime? That’s what Congress seems to have said about one of the greatest boondoggles by the Department of Energy (DOE): the Mixed Oxide Fuel Fabrication Facility (MOX).
MOX was conceived more than a decade ago, when the U.S. and Russia were working on converting plutonium into mixed oxide fuel that could be used in commercial nuclear power plants.
The DOE first said it would cost $1.6 billion to build the MOX at the Savannah River Site in South Carolina, which was supposed to open in 2007. It’s now 2015 and the plant is still only 65% complete. The final cost of just building the MOX is projected to be $7.7 billion, according to the Government Accountability Office. A study by The Aerospace Corporation also pointed out that the life-cycle cost of the facility will be $47.5 billion, according to the Project on Government Oversight (POGO).
That’s assuming there would be any reason to operate it because the deal with Russia is now over, and there are no other customers lined up to bring their unwanted plutonium to have it converted.
The project has its critics. Rep. Jim Cooper (D-Tenn.) called the continued funding of the MOX facility a “zombie earmark.” DOE officials are so fed up with the project that they were ready to put it on “cold-standby”—in other words, shut it down.
But backers in Congress, including Sen. Lindsay Graham (R-South Carolina), made sure there was $300 million in the 2014 year-end spending bill for MOX. They even prohibited the Energy Department from using the money to put MOX in cold standby.
Aerospace Corporation’s assessment was based on $500 million per year being appropriated to the project. With the lesser number, it ends up costing more: a life-cycle cost of $114 billion and a completion date of 2100, POGO reported.
What a thoughtful gift for our grandchildren!
To Learn More:
Cost Estimate on Useless Nuclear Facility Skyrockets (Project on Government Oversight)
Energy Dept. Gives up on Expensive Nuclear Waste Plant (by Noel Brinkerhoff, AllGov )
Cleanup of Radioactive Bomb Waste in South Carolina: The Endless Project (by Noel Brinkerhoff, AllGov )
The Government Project that is $6 Billion Over Budget and 10 Years Late (by Matt Bewig, AllGov )
What Happened to $1.3 Billion of Taxpayer Money Sent Directly to U.S. Military Officers in Afghanistan? Pentagon won’t Say
The Department of Defense (DOD) refuses to detail what it did with $1.3 billion that was supposed to be used on urgent humanitarian and reconstruction projects.
A report (pdf) from Special Inspector General for Afghan Reconstruction (SIGAR) John Sopko pointed out that $2.26 billion had been put into the Commander’s Emergency Response Program (CERP). That funding is meant to be used primarily for small projects estimated to cost less than $500,000 involving such issues as transportation, electricity and education. This year, most of the money will be used for condolence payments when civilians are killed or injured or property is damaged by U.S. forces and to increase security for communities that happen to be located near active U.S. military bases.
However, according to the SIGAR report, the Defense Department is given “broad authority to spend CERP funds notwithstanding other provisions of law. As a result, projects supported by CERP funds are not bound by procurement laws or the Federal Acquisition Regulation.”
The Army’s official guidance on CERP projects is “CERP is a quick and effective method that provides an immediate, positive impact on the local population while other larger reconstruction projects are still getting off the ground. The keys to project selection are: Execute quickly; Employ many people from the local population; Benefit the local population; Be highly visible.”
But the SIGAR report said “DOD could only provide financial information relating to the disbursement of funds for CERP projects totaling $890 million (40%) of the approximately $2.2 billion in obligated funds at that time.” The other $1.3 billion of the CERP money that has been sent to Afghanistan has been spent on projects classified as “unknown.”
What’s worse is that according to the Pentagon’s response to the report, some of the money went to war-fighting instead of helping Afghan civilians. “Although the report is technically accurate, it did not discuss the Counter Insurgency (COIN) strategies in relationship to CERP. In addition, the 20 users [sic] of CERP funds, it was also used as a tool for COIN. CERP funds were, and continue to be used to build goodwill between the people of Iraq and/or Afghanistan and the United States in an effort to gain their support in fighting the insurgency. In many cases CERP’s main effort was the COIN aspect verse the actual project being procured.”
So, from the part of that statement that makes any sense, it would appear that the money was siphoned off from approved uses and into counter insurgency, which is not among the 20 approved uses for CERP funds.
To Learn More:
Pentagon Can’t Account for $1 Billion in Afghan Reconstruction Aid (by James Rosen, McClatchy )
Department of Defense Commander’s Emergency Response Program (CERP): Priorities and Spending in Afghanistan for Fiscal Years 2004-2014 (Special Inspector General for Afghan Reconstruction) (pdf)
Commander’s Emergency Response Program (Center for Army Lessons Learned)
After 6 Years, Obama’s Pentagon Suddenly Declares Details of Afghanistan War “Classified” (by Noel Brinkerhoff, AllGov )
U.S. Wasted $7.6 Billion to Fight Poppy Cultivation in Afghanistan…Which is Now at an All-Time High (by Noel Brinkerhoff, AllGov )
U.S. Wasted $34 Million Pushing Soybeans on Afghanistan (by Noel Brinkerhoff, AllGov )
Pentagon Leads PR Campaign to Counter Critical Inspector General Reports on Afghanistan (by Noel Brinkerhoff and Danny Biederman, AllGov )
Harsh Inspector General Report Says 0 of 16 Afghan Agencies can be Trusted with U.S. Aid (by Noel Brinkerhoff and Danny Biederman, AllGov )