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How to Turn a Nightmare into a Fairy Tale

40 Years Later, Will the End Games in Iraq and Afghanistan Follow the Vietnam Playbook?

By Christian Appy | TomDispatch | April 26, 2015

If our wars in the Greater Middle East ever end, it’s a pretty safe bet that they will end badly — and it won’t be the first time. The “fall of Saigon” in 1975 was the quintessential bitter end to a war. Oddly enough, however, we’ve since found ways to re-imagine that denouement which miraculously transformed a failed and brutal war of American aggression into a tragic humanitarian rescue mission. Our most popular Vietnam end-stories bury the long, ghastly history that preceded the “fall,” while managing to absolve us of our primary responsibility for creating the disaster. Think of them as silver-lining tributes to good intentions and last-ditch heroism that may come in handy in the years ahead.

The trick, it turned out, was to separate the final act from the rest of the play. To be sure, the ending in Vietnam was not a happy one, at least not for many Americans and their South Vietnamese allies. This week we mark the 40th anniversary of those final days of the war. We will once again surely see the searing images of terrified refugees, desperate evacuations, and final defeat. But even that grim tale offers a lesson to those who will someday memorialize our present round of disastrous wars: toss out the historical background and you can recast any U.S. mission as a flawed but honorable, if not noble, effort by good-guy rescuers to save innocents from the rampaging forces of aggression. In the Vietnamese case, of course, the rescue was so incomplete and the defeat so total that many Americans concluded their country had “abandoned” its cause and “betrayed” its allies. By focusing on the gloomy conclusion, however, you could at least stop dwelling on the far more incriminating tale of the war’s origins and expansion, and the ruthless way the U.S. waged it.

Here’s another way to feel better about America’s role in starting and fighting bad wars: make sure U.S. troops leave the stage for a decent interval before the final debacle. That way, in the last act, they can swoop back in with a new and less objectionable mission. Instead of once again waging brutal counterinsurgencies on behalf of despised governments, American troops can concentrate on a humanitarian effort most war-weary citizens and soldiers would welcome: evacuation and escape.

Phony Endings and Actual Ones

An American president announces an honorable end to our longest war. The last U.S. troops are headed for home. Media executives shut down their war zone bureaus. The faraway country where the war took place, once a synonym for slaughter, disappears from TV screens and public consciousness. Attention shifts to home-front scandals and sensations. So it was in the United States in 1973 and 1974, years when most Americans mistakenly believed that the Vietnam War was over.

In many ways, eerily enough, this could be a story from our own time. After all, a few years ago, we had reason to hope that our seemingly endless wars — this time in distant Iraq and Afghanistan — were finally over or soon would be. In December 2011, in front of U.S. troops at Fort Bragg, North Carolina, President Obama proclaimed an end to the American war in Iraq. “We’re leaving behind a sovereign, stable, and self-reliant Iraq,” he said proudly. “This is an extraordinary achievement.” In a similar fashion, last December the president announced that in Afghanistan “the longest war in American history is coming to a responsible conclusion.”

If only. Instead, warfare, strife, and suffering of every kind continue in both countries, while spreading across ever more of the Greater Middle East. American troops are still dying in Afghanistan and in Iraq the U.S. military is back, once again bombing and advising, this time against the Islamic State (or Daesh), an extremist spin-off from its predecessor al-Qaeda in Iraq, an organization that only came to life well after (and in reaction to) the U.S. invasion and occupation of that country. It now seems likely that the nightmare of war in Iraq and Afghanistan, which began decades ago, will simply drag on with no end in sight.

The Vietnam War, long as it was, did finally come to a decisive conclusion. When Vietnam screamed back into the headlines in early 1975, 14 North Vietnamese divisions were racing toward Saigon, virtually unopposed. Tens of thousands of South Vietnamese troops (shades of the Iraqi army in 2014) were stripping off their military uniforms, abandoning their American equipment, and fleeing. With the massive U.S. military presence gone, what had once been a brutal stalemate was now a rout, stunning evidence that “nation-building” by the U.S. military in South Vietnam had utterly failed (as it would in the twenty-first century in Iraq and Afghanistan).

On April 30, 1975, a Communist tank crashed through the gates of Independence Palace in the southern capital of Saigon, a dramatic and triumphant conclusion to a 30-year-long Vietnamese struggle to achieve national independence and reunification. The blood-soaked American effort to construct a permanent non-Communist nation called South Vietnam ended in humiliating defeat.

It’s hard now to imagine such a climactic conclusion in Iraq and Afghanistan. Unlike Vietnam, where the Communists successfully tapped a deep vein of nationalist and revolutionary fervor throughout the country, in neither Iraq nor Afghanistan has any faction, party, or government had such success or the kind of appeal that might lead it to gain full and uncontested control of the country. Yet in Iraq, there have at least been a series of mass evacuations and displacements reminiscent of the final days in Vietnam. In fact, the region, including Syria, is now engulfed in a refugee crisis of staggering proportions with millions seeking sanctuary across national boundaries and millions more homeless and displaced internally.

Last August, U.S. forces returned to Iraq (as in Vietnam four decades earlier) on the basis of a “humanitarian” mission. Some 40,000 Iraqis of the Yazidi sect, threatened with slaughter, had been stranded on Mount Sinjar in northern Iraq surrounded by Islamic State militants. While most of the Yazidi were, in fact, successfully evacuated by Kurdish fighters via ground trails, small groups were flown out on helicopters by the Iraqi military with U.S. help. When one of those choppers went down wounding many of its passengers but killing only the pilot, General Majid Ahmed Saadi, New York Times reporter Alissa Rubin, injured in the crash, praised his heroism.  Before his death, he had told her that the evacuation missions were “the most important thing he had done in his life, the most significant thing he had done in his 35 years of flying.”

In this way, a tortured history inconceivable without the American invasion of 2003 and almost a decade of excesses, including the torture and abuse at Abu Ghraib, as well as counterinsurgency warfare, finally produced a heroic tale of American humanitarian intervention to rescue victims of murderous extremists. The model for that kind of story had been well established in 1975.

Stripping the Fall of Saigon of Historical Context

Defeat in Vietnam might have been the occasion for a full-scale reckoning on the entire horrific war, but we preferred stories that sought to salvage some faith in American virtue amid the wreckage. For the most riveting recent example, we need look no further than Rory Kennedy’s 2014 Academy Award-nominated documentary Last Days in Vietnam. The film focuses on a handful of Americans and a few Vietnamese who, in defiance of orders, helped expedite and expand a belated and inadequate evacuation of South Vietnamese who had hitched their lives to the American cause.

The film’s cast of humanitarian heroes felt obligated to carry out their ad hoc rescue missions because the U.S. ambassador in Saigon, Graham Martin, refused to believe that defeat was inevitable. Whenever aides begged him to initiate an evacuation, he responded with comments like, “It’s not so bleak. I won’t have this negative talk.” Only when North Vietnamese tanks reached the outskirts of Saigon did he order the grandiloquently titled Operation Frequent Wind — the helicopter evacuation of the city — to begin.

By that time, Army Captain Stuart Herrington and others like him had already led secret “black ops” missions to help South Vietnamese army officers and their families get aboard outgoing aircraft and ships. Prior to the official evacuation, the U.S. government explicitly forbade the evacuation of South Vietnamese military personnel who were under orders to remain in the country and continue fighting. But, as Herrington puts it in the film, “sometimes there’s an issue not of legal and illegal, but right and wrong.” Although the war itself failed to provide U.S. troops with a compelling moral cause, Last Days in Vietnam produces one. The film’s heroic rescuers are willing to risk their careers for the just cause of evacuating their allies.

The drama and danger are amped up by the film’s insistence that all Vietnamese linked to the Americans were in mortal peril. Several of the witnesses invoke the specter of a Communist “bloodbath,” a staple of pro-war propaganda since the 1960s. (President Richard Nixon, for instance, once warned that the Communists would massacre civilians “by the millions” if the U.S. pulled out.) Herrington refers to the South Vietnamese officers he helped evacuate as “dead men walking.” Another of the American rescuers, Paul Jacobs, used his Navy ship without authorization to escort dozens of South Vietnamese vessels, crammed with some 30,000 people, to the Philippines. Had he ordered the ships back to Vietnam, he claims in the film, the Communists “woulda killed ‘em all.”

The Communist victors were certainly not merciful. They imprisoned hundreds of thousands of people in “re-education camps” and subjected them to brutal treatment. The predicted bloodbath, however, was a figment of the American imagination. No program of systematic execution of significant numbers of people who had collaborated with the Americans ever happened.

Following another script that first emerged in U.S. wartime propaganda, the film implies that South Vietnam was vehemently anti-communist. To illustrate, we are shown a map in which North Vietnamese red ink floods ever downward over an all-white South — as if the war were a Communist invasion instead of a countrywide struggle that began in the South in opposition to an American-backed government.

Had the South been uniformly and fervently anti-Communist, the war might well have had a different outcome, but the Saigon regime was vulnerable primarily because many southern Vietnamese fought tooth and nail to defeat it and many others were unwilling to put their lives on the line to defend it. In truth, significant parts of the South had been “red” since the 1940s.  The U.S. blocked reunification elections in 1956 exactly because it feared that southerners might vote in Communist leader Ho Chi Minh as president. Put another way, the U.S. betrayed the people of Vietnam and their right to self-determination not by pulling out of the country, but by going in.

Last Days in Vietnam may be the best silver-lining story of the fall of Saigon ever told, but it is by no means the first. Well before the end of April 1975, when crowds of terrified Vietnamese surrounded the U.S. embassy in Saigon begging for admission or trying to scale its fences, the media was on the lookout for feel-good stories that might take some of the sting out of the unremitting tableaus of fear and failure.

They thought they found just the thing in Operation Babylift. A month before ordering the final evacuation of Vietnam, Ambassador Martin approved an airlift of thousands of South Vietnamese orphans to the United States where they were to be adopted by Americans. Although he stubbornly refused to accept that the end was near, he hoped the sight of all those children embraced by their new American parents might move Congress to allocate additional funds to support the crumbling South Vietnamese government.

Commenting on Operation Babylift, pro-war political scientist Lucien Pye said, “We want to know we’re still good, we’re still decent.” It did not go as planned. The first plane full of children and aid workers crashed and 138 of its passengers died. And while thousands of children did eventually make it to the U.S., a significant portion of them were not orphans. In war-ravaged South Vietnam some parents placed their children in orphanages for protection, fully intending to reclaim them in safer times. Critics claimed the operation was tantamount to kidnapping.

Nor did Operation Babylift move Congress to send additional aid, which was hardly surprising since virtually no one in the United States wanted to continue to fight the war. Indeed, the most prevalent emotion was stunned resignation. But there did remain a pervasive need to salvage some sense of national virtue as the house of cards collapsed and the story of those “babies,” no matter how tarnished, nonetheless proved helpful in the process.

Putting the Fall of Saigon Back in Context

For most Vietnamese — in the South as well as the North — the end was not a time of fear and flight, but joy and relief. Finally, the much-reviled, American-backed government in Saigon had been overthrown and the country reunited. After three decades of turmoil and war, peace had come at last. The South was not united in accepting the Communist victory as an unambiguous “liberation,” but there did remain broad and bitter revulsion over the wreckage the Americans had brought to their land.

Indeed, throughout the South and particularly in the countryside, most people viewed the Americans not as saviors but as destroyers. And with good reason. The U.S. military dropped four million tons of bombs on South Vietnam, the very land it claimed to be saving, making it by far the most bombed country in history. Much of that bombing was indiscriminate. Though policymakers blathered on about the necessity of “winning the hearts and minds” of the Vietnamese, the ruthlessness of their war-making drove many southerners into the arms of the Viet Cong, the local revolutionaries. It wasn’t Communist hordes from the North that such Vietnamese feared, but the Americans and their South Vietnamese military allies.

The many refugees who fled Vietnam at war’s end and after, ultimately a million or more of them, not only lost a war, they lost their home, and their traumatic experiences are not to be minimized. Yet we should also remember the suffering of the far greater number of South Vietnamese who were driven off their land by U.S. wartime policies. Because many southern peasants supported the Communist-led insurgency with food, shelter, intelligence, and recruits, the U.S. military decided that it had to deprive the Viet Cong of its rural base. What followed was a long series of forced relocations designed to remove peasants en masse from their lands and relocate them to places where they could more easily be controlled and indoctrinated.

The most conservative estimate of internal refugees created by such policies (with anodyne names like the “strategic hamlet program” or “Operation Cedar Falls”) is 5 million, but the real figure may have been 10 million or more in a country of less than 20 million. Keep in mind that, in these years, the U.S. military listed “refugees generated” — that is, Vietnamese purposely forced off their lands — as a metric of “progress,” a sign of declining support for the enemy.

Our vivid collective memories are of Vietnamese refugees fleeing their homeland at war’s end. Gone is any broad awareness of how the U.S. burned down, plowed under, or bombed into oblivion thousands of Vietnamese villages, and herded survivors into refugee camps. The destroyed villages were then declared “free fire zones” where Americans claimed the right to kill anything that moved.

In 1967, Jim Soular was a flight chief on a gigantic Chinook helicopter. One of his main missions was the forced relocation of Vietnamese peasants. Here’s the sort of memory that you won’t find in Miss Saigon, Last Days in Vietnam, or much of anything else that purports to let us know about the war that ended in 1975. This is not the sort of thing you’re likely to see much of this week in any 40th anniversary media musings.

“On one mission where we were depopulating a village we packed about sixty people into my Chinook. They’d never been near this kind of machine and were really scared but they had people forcing them in with M-16s. Even at that time I felt within myself that the forced dislocation of these people was a real tragedy. I never flew refugees back in. It was always out. Quite often they would find their own way back into those free-fire zones. We didn’t understand that their ancestors were buried there, that it was very important to their culture and religion to be with their ancestors. They had no say in what was happening. I could see the terror in their faces. They were defecating and urinating and completely freaked out. It was horrible. Everything I’d been raised to believe in was contrary to what I saw in Vietnam. We might have learned so much from them instead of learning nothing and doing so much damage.”

What Will We Forget If Baghdad “Falls”? 

The time may come, if it hasn’t already, when many of us will forget, Vietnam-style, that our leaders sent us to war in Iraq falsely claiming that Saddam Hussein possessed weapons of mass destruction he intended to use against us; that he had a “sinister nexus” with the al-Qaeda terrorists who attacked on 9/11; that the war would essentially pay for itself; that it would be over in “weeks rather than months”; that the Iraqis would greet us as liberators; or that we would build an Iraqi democracy that would be a model for the entire region. And will we also forget that in the process nearly 4,500 Americans were killed along with perhaps 500,000 Iraqis, that millions of Iraqis were displaced from their homes into internal exile or forced from the country itself, and that by almost every measure civil society has failed to return to pre-war levels of stability and security?

The picture is no less grim in Afghanistan. What silver linings can possibly emerge from our endless wars? If history is any guide, I’m sure we’ll think of something.

Christian Appy, professor of history at the University of Massachusetts, is the author of three books about the Vietnam War, including the just-published American Reckoning: The Vietnam War and Our National Identity (Viking).

Copyright 2015 Christian Appy

April 27, 2015 Posted by | Deception, Mainstream Media, Warmongering, Militarism, Timeless or most popular, War Crimes | , , , , , , | Leave a comment

Argentina: A Case Study of Israel’s Zionist-Wall Street Destabilization Campaign

By James Petras | April 27, 2015

A recent article by Jorge Elbaum, the former executive director of DAIA (Delegation for Argentine Jewish Associations), the principle Argentine Jewish umbrella groups, published in the Buenos Aires daily Pagina 12, provides a detailed account of the damaging links between the State of Israel, US Wall Street speculators, and local Argentine Zionists in government and out. Elbaum describes how their efforts have been specifically directed toward destabilizing the incumbent center-left government of President Cristina Fernandez, while securing exorbitant profits for a Zionist Wall Street speculator, Paul Singer of Elliott Management as well as undermining a joint Iranian-Argentine investigation of the 1994 terrorist bombing of the Jewish Community Center in Buenos Aires.

Elbaum’s article was written in response to the death of Alberto Nisman, a Zionist zealot and chief government prosecutor in the terrorist bombing investigation for over 20 years.

The serious issues raised by the political use and gross manipulation of the horrors of the bombing of the Argentine Jewish Community Center shows how Tel Aviv (and its political assets in Argentina and the US) further Israeli power in the Middle East, in particular, by isolating and demonizing Iran. This is important at two critical levels, which this article seeks to highlight.

First of all, Israel attempted to sidetrack the Argentine investigation, by involving some of its powerful Wall Street assets and influential pro-Israel lobbies (the Anti-Defamation League and AIPAC among others). Their purpose was to fabricate ‘evidence’ in order to implicate Iran in the crime and to manipulate their influential assets in Argentina, especially in this case, chief prosecutor Nisman and many of the leaders of DAIA, to accuse the Argentine government of complicity in an ‘Iranian cover-up’.

The second issue, raised by Israel’s intervention in Argentina’s investigation into the bombing, has wider and deeper implications: How Israel promotes its foreign policy objectives in various countries by grooming and manipulating local influential Jewish officials and community organizations. This furthers Tel Aviv’s goal of regional hegemony and territorial aggrandizement. In other words, Israeli political reach extends far beyond the Middle East and goes ‘global’, operating without any consideration of the dangers it inflicts on Jews in the ‘target countries’. To this end, Israel has been creating a worldwide network of Jews, which calls into question their loyalty to the polity of their home countries where they have resided for generations.

The nefarious impact, which Israel’s intervention has on the sovereignty of its ‘target countries’, presents a danger to innocent and loyal Jewish citizens who are not acting as agents of Tel Aviv.

For these reasons it is important to critically analyze the specific characteristics of Israel’s dangerous meddling in Argentina.

The Crisis of the Argentine Justice System: Unsolved Terrorist Crimes and Israeli Intervention

After the anti-Semitic bombing of the Jewish Community Center in Buenos Aires, the Argentine judicial and legal system seriously bungled the investigation, despite collaboration from the US FBI and Israel’s Mossad. Argentina’s then President Carlos Menem was an ardent neo-liberal, unconditional backer of US foreign policy and strong supporter of Israel. His regime was still heavily infested with high-ranking police, military, and intelligence officials deeply implicated in the seven-year bloody military dictatorship (1976-83) during which 30,000 Argentine citizens were murdered. Among the victims of this ‘dirty war’ were hundreds of Argentine Jews, activists, intellectuals and militants who were tortured and murdered to the anti-Semitic taunts of their military and police assassins. During this same horrific ‘pogrom’ of Argentina’s committed Jewish activists, the state of Israel managed to sell tens of millions of dollars in arms to the junta, breaking a US-EU boycott. Notoriously, the conservative leaders of the DAIA and AMIA (Argentine-Israel Mutual Association) failed to defend the lives of Jewish activists and militants. After attending meetings with the junta, many conservative Jewish leaders would dismiss the concerns of the families of the disappeared and tortured Argentine Jews, saying: ‘They must have done something…’

The bungled investigation into the 1994 bombing included the arrest of right-wing police officials who were later released and the mysterious loss of vital forensic evidence. Accusations against various foreign regimes and organizations shifted according to the political needs of the US and Israel: First, the Lebanese group, Hezbollah, Israel’s main military adversary during its bloody occupation of southern Lebanon in 1990’s was touted as the responsible party. A few years later, Iraqi President Saddam Hussein, prior to the Israeli-backed US invasion of Iraq; then the Palestinians were trotted out, followed by Syria’s Baathist intelligence forces. After the total destruction of Iraq by the US ‘coalition’ and the decline of influential Arab states in the Middle East, the Israelis have settled on Iran as the ‘prime suspect’, coinciding with Tehran’s rise of as a regional power – challenging Israeli and US hegemony.

With the 2001 collapse of Argentina’s version of a kleptocratic, neo-liberal, pro-US bootlicking regime, and in the midst of a dire economic depression, there was a popular upheaval and the subsequent election of President Kirchner bringing a new center-left government to power.

The new government, defaulting on its murderous foreign debt, oversaw Argentina’s economic recovery and a vast increase in social spending which stabilized capitalism. Kirchner also promoted greater independence in foreign policy and sought to enhance Buenos Aires relations with Israel by re-opening the investigation into the bombing and retaining Alberto Nisman, as chief prosecutor.

Nisman, the Mossad, and the US Embassy Connection

In his article, ‘Vultures, Nisman, DAIA: The Money Route’ (Pagina 12, 4/18/15), Jorge Elbaum, points out that chief prosecutor, Alberto Nisman, opened a secret bank account in New York. As Elbaum told prominent figures in Argentina’s Jewish community, Nisman’s campaign to discredit the government’s joint investigatory commission with Iran and demonize the Argentine government was financed, at least in part, by New York’s vulture fund head, Paul Singer, who stood to make hundreds of millions in profit. According to documents, cited by Elbaum, US embassy personnel and leading US Zionist organizations, including the Foundation for Defense of Democracies, led by Mark Dubowitz, as well as Abe Foxman of the Anti-Defamation League, fed Nisman fabricated ‘evidence’ and corrected numerous substantive and grammatical flaws in his report purporting to ‘demonstrate’ Argentine’s cover-up of the Iran’s role in the 1994 bombing. However, forensic and legal experts in Argentina have determined that Nisman’s claims lack any legal basis or credibility.

The entire ‘Operation Nisman’ appears to have been orchestrated by Israel with the goal of isolating Iran via fabricated evidence supposed to ‘prove’ its role in the 1994 bombing. The recruitment of Nisman, as a key Israeli operative, was central to Israel’s strategy of using the DAIA and other Argentine – Jewish organizations to attack the Argentine-Iran memo of understanding regarding the investigation of the bombing. Israel pushed US-Zionist organizations to intensify their intervention into Argentine politics via their networks with Argentine-Jewish organizations. The vulture-fund speculator, Paul Singer, who had bought defaulted Argentine debt for ‘pennies on the dollar’, was demanding full payment through sympathetic New York courts. He had funded a special speculators’ task force on Argentina joining forces with Israel, US Zionist organizations and Alberto Nisman in order to manipulate Argentina’s investigation and secure a bountiful return. Nisman thus became a ‘key tool’ to Israel’s regional military strategy toward Iran, to New York speculator Singer’s strategy to grab a billion dollar windfall and to the Argentine right wing’s campaign to destabilize the center-left government of Kirschner-Fernandez.

By acting mainly in the interest of Israel and US Zionists, Nisman sacrificed the Argentine-Jewish community’s desire for a serious, truthful investigation into the bombing leading to identification and conviction of the perpetrators. Moreover, Nisman compromised himself by being a tool for Israel’s foreign policy against the interest of the Argentine government, which he was sworn to serve, and endangered the status of the Argentine Jewish community among Argentines in general by raising questions about their loyalty to their home country.

Fortunately, Argentina has sophisticated, prominent Jewish leaders who see themselves as Argentine citizens first and foremost, including leaders like Foreign Secretary Hector Timmerman who proposed the joint investigation with Iran as well as the former DAIA Executive Director Jorge Elbaum who has played a major role in denouncing Israel’s intervention in Argentine politics. It is citizens, like Elbaum, who have exposed the Israeli government’s role in recruiting and manipulating local leading Argentine-Jews to serve Tel Aviv’s foreign policy interests.

This is in stark contrast to the United States where no major American-Jewish leader has dared to denounce the role of leading Zionist organizations as Israel’s conduit. Furthermore, unlike Argentina, where a sector of the liberal press (Pagina 12) has published critical accounts of Nisman’s fabrications and Israel’s destabilization campaign, newspapers in the US, like the New York Times, the Wall Street Journal, and the Washington Post, have continued to present Nisman’s discredited report as a serious investigation by a courageous, ‘martyred’ prosecutor. The US media continues to portray the entire Argentine judicial system as corrupt and argue that Nisman’s death must have been a state-orchestrated crime. The US public has never been presented with the fact that the leading critics of Nisman’s report and his own behavior were prominent Argentine Jews and that Argentina’s foreign minister, Hector Timmerman, organized the Argentine-Iran commission.

Conclusion

That Israel was willing to derail any serious the investigation into the 1994 bombing, which killed and maimed scores of Argentine Jews, in order to further its campaign against Iran, demonstrates the extent to which the self-styled ‘Jewish State’ is willing to sacrifice the interests and security of world Jewry to further its narrow military agenda.

Equally egregious is the way in which Tel Aviv recruits overseas Jews to serve Israel’s interests against that of their own countries, turning them into a ‘fifth column’, operating inside and outside of their governments. That Israeli intelligence has been exposed and denounced in the case of Nisman, has not forestalled nor prevented Israel from continuing this long-standing, practice of dangerous meddling. This is especially evident in the ‘Israel-first behavior’ of leading Jewish American organizations and political leaders who have pledged their total allegiance to Netanyahu’s war agenda against Iran an bought the US Congress to scuttle the peace accord.

It merits repetition: Israel’s widespread practice of recruiting Jewish citizens and officials of other countries to serve as vehicles of Israeli policies has the potential to foment a new and possibly violent backlash, once the greater population has been made aware of such treasonous activities. In this regard, Israel does not represent a bastion of security for world Jewry, but a cynical, manipulative and deadly threat. Perhaps that is Israel’s ultimate strategy – create a backlash of generalized anger against overseas Jews and precipitate massive flight to Israel from countries like Argentina, while the few who remain can be better manipulated to serve Tel Aviv.

Epilogue

A few days ago, on April 23, a crowd of several hundred Argentine Jews met to repudiate the arrogant claims of the established leaders of the DAIA and the AMIA that they represent ‘all Argentine Jews”. This overflow crowd in the auditorium of the telephone workers union proposed to create a ‘collective and democratic space, based on links of solidarity over and above commercial connections.’ The Jewish community in the US would be wise to pay close attention to Argentina’s example.

April 27, 2015 Posted by | Timeless or most popular | , , , , , , , , , , | 2 Comments

International Atomic Energy Agency Lacks Transparency, Observers and Researchers Say

Nuclear Inspection Agency Demands Transparency from Others, but Not Itself

Some Documents Accessible in U.S. and British Archives Are Locked up in Agency’s Vienna Headquarters

Never Before Published Document Describes IAEA 1996 Transparency Proposal (See Sidebar)

By Toby McIntosh and William Burr  – National Security Archive – April 24, 2015

Newly Obtained Document Describes IAEA 1996 Transparency Proposal

The veil has been lifted slightly on the secret 19-year-old transparency policy at International Atomic Energy Agency.

Since the drafting of the essay for this e-book, Freedominfo.org and the National Security Archive’s Nuclear Vault have obtained, from a non-Agency source, the proposal referred to in the essay that was made to the Board of Governors in 1996 for a more liberal disclosure policy.

leakedThe Board did adopt such a derestriction policy, but the policy has never been disclosed. (See the FreedomInfo.org/Nuclear Vault report on IAEA transparency.) Some observers said the policy has not been fully implemented.

The eight-page proposal from the IAEA Secretariat is dated February 15, 1996, and titled “Proposal for the Derestriction of Board Documents.” The language of the document is similar to a one-line description of the policy provided previously by an IAEA staffer – the disclosure of “most” Board documents after two years. However, the final policy may not be identical to the proposal.

The Secretariat’s proposal suggests a variety of motivating factors.

It points out that the classification categories being used at the time – “RESTRICTED Distr.” and “For official use only” – “have never been defined and are subject to differing interpretation.” It also notes that “the trend within the United Nations generally, as within the Agency, is towards greater transparency.” Further, the proposal says that Member States handle IAEA documents domestically in accordance with national criteria and thus “no doubt exercise different degrees of restrictiveness.”

The Secretariat’s proposed disclosure policy provides substantial grounds for withholding documents, including “any other documents specified by the Board.”

It states:

8. In the light of the foregoing, it is proposed that, with the exception of the annual Safeguards Implementation Report, documents relating to deliberations of the Board in closed session, documents to whose distribution there is a legal impediment and any other documents specified by the Board, documents of the Board and its Committee be derestricted two years after the year in which they were issued, all such documents issued in or before 1993 being derestricted with immediate effect, all such documents issued in 1994 being derestricted with effect from 1 January 1997, etc. It is further proposed that documents subject to the exception provided for earlier in this paragraph be derestricted by the Board at a later date if the Board decides, in light of information provided by the Secretariat, that the grounds for maintenance of the restriction no longer exists.”

The proposal further specifies six document series to be covered by the policy, such as “GOV/DEC/…”

Transparency Policy History Described

The document provides insights into Agency transparency history.

It recalls that there was a time when some Board and committee documents, marked “PARTICIPANTS only,” were not made available to all Member States.

A footnote describes a progressive change in the Board’s rules to permit more access and involvement by Member States not on the 35-member Board.

Another footnote indicates that the IAEA handled requests for access to documents by referring requesters to the competent authority in the Member State.

T.M. and W.B.

Washington, D.C. April 24, 2015 – The nuclear inspection agency that is central to the current Iran negotiations is flunking international transparency norms, according to a report posted today by Freedominfo.org and the National Security Archive’s Nuclear Vault. Key documents about International Atomic Energy Agency (IAEA) proceedings, found in various national archives and private collections but closed at Agency headquarters in Vienna, are included in today’s posting.

The investigation found that an important transparency policy document (see sidebar) is itself secret, since the IAEA Board of Governors has never officially announced or disclosed its 1996 decision to release its documents after two years – a decision honored more in the breach than in the observance.

In today’s posting, Toby McIntosh and William Burr of the National Security Archive discuss and analyze the IAEA’s failure to create an effective disclosure policy. Despite the Agency’s 1996 decision, essential records such as minutes of the Board of Governor’s meetings have remained closed even from the 1950s when the Agency was created. Moreover, critically important parts of the Agency’s historical archives in Vienna are out of bounds to researchers, creating major obstacles for historians and social scientists attempting to tell the story of this vital organization.

* * * * *

The IAEA’s Lack of Transparency

By Toby McIntosh and William Burr

Several facts serve as metaphors to describe the lack of transparency at the International Atomic Energy Agency.

One telling fact is that a key transparency policy document is itself a secret. The Board of Governors has never officially announced, or disclosed, its 1996 decision to release its documents after two years. Also symbolizing IAEA opacity, and greatly frustrating researchers, is an IAEA rule that limits visits to the Vienna headquarters archives room to only five days a month.

The secret disclosure policy and the unwelcome mat are just two indicators of this important agency’s failings in the area of transparency. But the most significant transparency gap is that the IAEA has no comprehensive policy on disclosing information. There is no formal system to request records, nor are there public procedures or standards for declassifying very old records.

FreedomInfo.org/Nuclear Vault in late November 2014 began asking the IAEA if it has a disclosure policy, and to describe it, but no answers have been provided. In late March 2015, an official said: “Your query has been passed on to a committee that deals with decisions regarding what past documents issued by the Board of Governors are to be made public. It also deals with the issue of document disclosure policy.”

Some thwarted researchers have learned to successfully circumvent the IAEA`s closed archives by going to the archives of IAEA member governments.

Transparency at the agency has declined in recent years, according to some.

“The IAEA has never been very transparent and it seems that in the last four years the transparency that existed has declined,” said Tariq Rauf, former Head of Verification and Security Policy Coordination at the IAEA and the Director of the Stockholm International Peace Research Institute’s Arms Control and Non-proliferation Programme.

One example was the 2014 closure of a major IAEA-sponsored conference. Another backward step was the disappearance of a list of Technical Cooperation projects from the website sometime around 2010.

Andreas Persbo, Director of Vertic, lamented declining transparency at a March 24, 2015, symposium in Washington on “The Politics of Safeguards,” sponsored by the Carnegie Endowment for International Peace. (Vertic is a London-based independent, not-for-profit non-governmental organization working on “building trust through verification.”) Persbo told the audience:

I’ve been going to general conferences now for 10 years, as a nongovernmental representative, and I’ve seen it go from an organisation with remarkable transparency to an organisation that is increasingly closing its doors. And it relates not only to access to documentation information but also access to meetings. Something that once was ingrained in the Vienna spirit, and it is today no longer there, sadly.

Since its creation in the mid-1950s, the IAEA has played an increasingly central role in nuclear energy policy around the world. While one of the Agency’s major purposes has been to promote the civilian use of nuclear power, it has received great prominence from its role in supporting the Nuclear Nonproliferation Treaty (NPT): by maintaining safeguards to ensure that member states do not use civilian facilities for military purposes and by using its investigative powers to determine whether member states have created facilities that are inconsistent with the NPT’s objectives. The IAEA’s major role in the Iraq crisis and the current controversy over Iran are well known, but the Agency’s safeguards monitoring activities had their start decades ago, in the 1960s and 1970s, when the construction of the nuclear nonproliferation system was underway.

“Transparency is an elusive commodity in international nuclear affairs,” wrote Mark Hibbs on June 9, 2014, in the blog Arms Control Wonk. “Routinely cited as a universal virtue and not without a certain sanctimoniousness, this aspiration is sacrificed time and time again on the altar of political expediency,” commented Hibbs, a Berlin-based senior associate in the Nuclear Policy Program of the Carnegie Endowment for International Peace.

Transparency Gaps Seen

The transparency gaps do more than irritate journalists and academics, according to former officials and close observers of the agency.

Oversight of IAEA performance is inhibited by a lack of information, say experts.

No one disputes that the nuclear subject matter at times requires confidentiality for sensitive materials. But by not disclosing less sensitive findings in agency reports and policymaking documents, the IAEA inhibits both informed debate and compliance, some critics said. By not telling its story, the agency undermines itself, argue some supporters of the agency. One former official said, for example, that it would be valuable if the Agency would disclose information about the successful Iraq verification undertaking.

The agency’s secrecy has deep historical roots. Observers and Agency officials say the limits on transparency stem from the sensitive subject matter involved. Deference is given to member nations’ concerns about the confidentiality of their nuclear installations and their own roles in policy discussions. “The members rule, and they don’t want a lot of information that you would think you’d want available, shared,” according to Henry Sokolski, executive director of the Washington-based Non-proliferation Policy Education Center.

“It would be helpful if there were a bit more candor,” he said, recalling being shown a nonpublic report that indicated how frequently observation cameras in one country were out of commission.

According to Anna M. Weichselbraun, a University of Chicago scholar, “I don’t want to say it [the records policy] is to hide the things they do poorly.” But, she continued, “I think they are very afraid of criticism.” She believes that “the agency does incredible work that is not recognized because of a lack of transparency.”

Weichselbraun sees a strong “public interest in having the records derestricted” and she recently argued for more openness in an article published by the Nuclear Proliferation International History Project at the Woodrow Wilson Center for International Scholars in Washington, D.C.

A PhD candidate at the Department of Anthropology at the University of Chicago, Weichselbraun was imbedded in the Agency as an intern in the Safeguards Division while she worked on her dissertation, “Regulating the Nuclear: The Semiotic Production of Technical Independence at the International Atomic Energy Agency,” using “rigorous linguistic anthropological analyses of the actors’ interactional, ritual, and documentary practices.”

The debate about improving safeguards has been marked by “the tone of suspicion and distrust directed at the secretariat, triggered by perceived lack of transparency,” Laura Rockwood, a former IAEA lawyer, wrote August 28, 2014, in Arms Control Today. She is a senior research fellow at the Belfer Center for Science and International Affairs at Harvard University’s John F. Kennedy School of Government.

She recommended “education and communication,” saying:

The biggest challenges to effective safeguards and their further evolution are not technical. They are a lack of knowledge about the history of safeguards and a misrepresentation of the history that capitalizes on that lack of knowledge. It is possible to correct the former and to limit the impact of the latter through education and communication by raising the level of knowledge about safeguards and the history of their evolution. It is incumbent on all parties to understand what has already been achieved in strengthening safeguards so that it is not necessary to reinvent those achievements.

VienaIAEA headquarters in Vienna, Austria.
Photo credit: photographer unknown, Wikimedia Commons

Another researcher who makes the case for more IAEA transparency is Cindy Vestergaard, a Senior Researcher at the Danish Institute for International Studies, who has been studying “the front end of the fuel cycle” — the steps of mining and milling, conversion, enrichment and fabrication of uranium.

Some of the IAEA’s requirements in this area are spelled out in a nonpublic series of Policy Papers, particularly papers numbered 18 and 21. These policy papers, prepared by IAEA staff, detail adjustments to verification requirements regarding uranium production and were made in response to technological changes. There may be Agency policy papers on other topics that could be of interest to outside experts and researchers.

Vestergaard is not alone among researchers who have obtained these papers unofficially and a top Canadian official has even quoted them in print. Although they do not contain information the disclosure of which would be harmful, they are not available on the IAEA website.

Not making these Policy Papers public impedes research and public discussion of policy, in this case about the chosen starting points for verification. As Vestergaard put it:

“It doesn’t make sense, if this is the starting point that is being clarified, why is it not being made available.”

Board Policy Not Followed

Efforts to follow the workings of the IAEA’s most important policy-making body, the Board of Governors, are inhibited by closed meetings and a dearth of documents.

The 61 foundational rules guiding the operations of the Board, which meets five times a year, discuss related topics — internal circulation of agendas and documents, and the preparation of meeting summaries — but there is no section on disclosure of such information.

In 1996, however, the 22-member Board decided that “most Board documents should be derestricted after two years and could then be made available upon request,” in the words of an agency official.

Inexplicably there is no publicly available record of the 1996 meeting, nor a written statement of the policy.

As a result there is no clarity about what Board documents should be released. The word “most” lacks definition.

Despite the secret decision, in the ensuing 19 years the Board has released very few documents.

One exception has been the release of reports about Iran’s compliance with so-called safeguard inspections. The most recent such report, released March 4, 2015, had been leaked to the media weeks earlier. It is called “Implementation of the NPT Safeguards Agreement and relevant provisions of Security Council resolutions in the Islamic Republic of Iran.” The February 19, 2015, report was later derestricted “at the request of a Member State during the Board meeting,” according to an IAEA official. Other such reports on Iran have been posted online.

IAEA observers believe more safeguards implementation reports [SIR] should be released. At the March Carnegie forum, former IAEA official Rockwood said, “The secretariat has, over the years, made numerous proposals to the Board that it release the SIR. I personally think it should be done.”

Even Board records more than 30 years old have yet to be derestricted, and so are unavailable to the public.

“As these records have all been digitized for internal use, they could easily be made accessible to the public on the IAEA’s website through a dedicated portal with search features,” recommended Weichselbraun.

Persons with experience at the IAEA attributed the Board’s lack of compliance with its own policy to several factors, including:

  • A tendency in the IAEA Secretariat to err on the side of caution,
  • Lack of staff resources,
  • Concerns that the technical nature of the Agency’s work will not be correctly understood, and
  • The ability of member states to ask the IAEA to keep confidential information about their country.

There are no publicly available minutes for Board meetings. At the outset of the latest meeting, which began March 2, 2015, the Director General’s statement was released and he held a press conference. At the conclusion of the meetings a press release summarizes the decisions. (See March 5, 2015, release.)

VienaCover page of record of IAEA Board of Governors meeting, 12 June 1969 (see Document 3). This and similar documents are off-limits to researchers at the IAEA archives in Vienna, yet are accessible at the U.S. National Archives, among other repositories.

Special Meeting Closed

In late 2014, the IAEA closed a major symposium that traditionally had been open.

The four-day Symposium on International Safeguards in Vienna in October was attended by more than 700 international experts, but was closed to the press and the public. The papers presented, on topics such as “Challenges in Spent Fuel Verification ,” were later made public.

Access was restricted so that participants would not be “inhibited” during discussion, spokeswoman Gill Tudor said in an e-mail to Bloomberg News. Only the opening and closing ceremonies were open.

Key Committee Sessions Closed

The annual IAEA policymaking gathering, the General Conference, which meets for a week, operates partially open and partially closed.

The Conference plenary sessions are public, but the real work is done in the closed session of the Committee of the Whole, which debates proposed resolutions at greater length, often making amendments.

Detailed summaries of the meetings of the Committee of the Whole are prepared. There were eight such summaries of the 2014 sessions.

The initial draft resolutions are not posted, however. Nor are the revised versions circulated during the Committee’s deliberations. Such modified documents were referenced in one 2014 summary:

69. The representative of AUSTRIA introduced a new version of the relevant draft resolution, GC(58)/COM.5/L.2/Rev.2, which had been prepared in the course of informal consultations.

The summaries are dry, but quite detailed. Compared to the minutes of meetings put out by most other international agencies they are exceptionally detailed. For example:

11. The representative of PAKISTAN reiterated his proposal to delete paragraph 7 (formerly paragraph 6). Failing that, his delegation supported the addition to paragraph 24 proposed by the representative of India. If paragraph 7 was retained, his delegation would be obliged to call for a vote thereon when the draft resolution was considered by the Plenary.

The plenary body, the General Conference (GC), considers the resolutions forwarded by the Committee of the Whole. Summaries (two in 2014) of the General Conference sessions are prepared.

The approved resolutions and other documents are found under the “records” tab of the GC website, sometimes with a time lag.

For example, the minutes of the 58th General Conference Plenary session on Sept. 26, 2014, indicated a discussion and a vote was held about paragraph 7 of GC(58)/COM.5/L.2/Rev.4. The resolution was not available to the public at the time, or in the weeks immediately following. This document and several others were requested by FreedomInfo.org/Nuclear Vault in mid-December 2014. In mid-January 2015, an IAEA official from the public information office located and transmitted them.

The Director General’s National Security Report 2014 is another example of apparently slow public release. It is now available, on the records page for the 2014 GC, held in September, but it is dated July 22. There is no indication on the IAEA website that it was made public in July when distributed to members.

Archives Access Limited

The IAEA’s historical archives consist of some 5,574 linear meters of records — in a variety of media formats. But the Agency has no policy governing how long sensitive records should stay closed or when restrictions should be dropped.

“There is no regular, systematic review and declassification procedure in place,” according to Weichselbraun. “Individual requests for declassification or derestriction in the past have shown that there is a lack of transparency on which records remain classified and for what reasons.”

Researchers can have access to historical records, those over 30 years old, as long as they are not classified. Access to records that are less than 30 years old requires the consent of the Agency’s Director and the consent of the government about which the report was written.

One researcher was given a stack of documents, but without being told that others in the same series had been exempted from release.

The absence of a procedure for the declassification of classified historical records means, for example, that the records of the Safeguards Department, which has administered Agency safeguards at nuclear facilities worldwide since the 1960s, are off limits to researchers. So are the internal records of Board of Governors meetings; as noted, they are closed in Vienna, but meeting records are available in other archives.

For historians of nuclear nonproliferation policy, the records of the Safeguards Department are especially important because the safeguards system has been central to the Agency’s role in supporting the Nuclear Nonproliferation Treaty since the 1970s. While safeguards records can include commercial secrets (e.g. relating to the design of nuclear reactors) which complicates opening up the archival records, it is an insufficient reason for keeping all of them closed.

Further inhibiting research is the lack of “finding aids,” commonly produced by archivists to orient and guide researchers, Weichselbraun pointed out. “In addition, researchers should be able to submit requests for ad hoc declassification reviews that can be tracked. An ad hoc review process should follow a systematic procedure with a timeline of expected outcome, as well as provide justification.” She also said the agency should move from a 30-year restriction period to the 20-year period used in many other international organizations.

And there is the lack of physical access for those who make it to the small records room in Vienna, which has four tables and room for about half a dozen researchers, but which is rarely visited. The Archives also has no virtual presence, not even being mentioned on the IAEA website.

The IAEA limits individual researcher visits to five consecutive days per month. “This is an unreasonably short period for serious scholarly inquiry,” wrote Weichselbraun.

Inadequate resources are provided to the IAEA Archives and staffing needs improvement, she said, commenting that “the persistent shortcomings in providing information about the Archives’ holdings and rules of access raise questions about the Agency’s commitment to transparency.”

VienaIAEA Board Of Governors
Photo credit: Dean Calma, via Wikimedia Commons

Frustrated Historians

The restrictive Archive practices have been a source of frustration to historians.

Jacob Hamblin, an Associate Professor of History at Oregon State University, is one such annoyed scholar, who described his views in a May 2014 article in which he tells of being approached by another historian jealous that he had found some IAEA documents from non-IAEA sources.

“[H]istory is key to making informed contemporary decisions,” Hamblin wrote. “Fortunately some of this documentation is available, scattered in national archives and private collections throughout the world,” he said. “But you won’t find it at the IAEA in Vienna.”

“The IAEA claims it is obliged to withhold documents until all of the countries mentioned in them agree to declassification. In practice, this guarantees permanent secrecy.” Reflecting on the agency’s role, he observed that it “is uncomfortable with historical facts about the quality of its workmanship.”

Working Around Restrictions

Investigators like Hamblin have learned that a good way to get IAEA records is by seeking them in the archives of member governments.

For example, records of Board of Governors meetings from 1958 can be found in the National Archives of both the United States and the United Kingdom, two of the Agency’s members.

The documents of the Board and its committees are distributed to all Member States, to the United Nations, to some of the specialized agencies within the UN system and to certain intergovernmental organizations. They are considered “restricted,” an IAEA official wrote, adding “(but the Agency is of course not in control of how the recipients treat the documents they receive).”

A sampling of the documents found in the records of the US National Archives shows a variety of available documents. (See more detail below.)

Roots of Information Sharing

Information sharing among IAEA members has its origins in the founding document of the Agency.

The exchange of information among members and from members to the IAEA is discussed in Article VIII of the 1957 Statute of the IAEA. The dissemination of that information appears to be encouraged: “The Agency shall assemble and make available in an accessible form the information made available to it….” This is interpreted, however, to mean sharing among the members.

That goal was acknowledged by an IAEA staff member who wrote to FreedomInfo.org/Nuclear Vault:

Article VIII of the statute refers to sharing information about peaceful uses of nuclear energy. One way this is applied is through the IAEA International Nuclear Information System, one of the most successful and comprehensive information systems on the peaceful uses of nuclear science and technology.

A hint of the sensitivity surrounding transparency can be seen in the minutes of a 2010 Committee of the Whole meeting about “Strengthening of the Agency’s technical cooperation activities.”

VienaLogo of the International Atomic Energy Agency.

A representative of the Czech Republic recommended adding the words “as well as the transparency,” so that a section of the policy would read “to continuously improve the effectiveness and efficiency as well as the transparency of the TC programme in accordance with the needs of Member States in all areas of concern.”

The next section of the minutes says:

12. The representative of the PHILIPPINES said that she had doubts about the suggested addition of the words “as well as the transparency”. A call for improved transparency of the TC programme might be taken to imply a lack of faith in the management of Agency technical cooperation projects.

The outcome of the discussion is unclear in the minutes, and a search to find the ultimate document (GC(54)/COM.5/L.11) on the IAEA website was unsuccessful.

When “transparency” appears in IAEA documents, which is fairly rare judging by a search of the IAEA site, it usually refers to communications among members, as it does in this paragraph of a 2010 document, titled “STRATEGY FOR THE TECHNICAL COOPERATION PROGRAMME IN THE EUROPE REGION.”

Transparency: Transparency between Member States and the IAEA and with partners in general in the management of the TCP will promote a sense of common purpose and trust, leading to smooth and effective delivery of the programme. A key element in transparency is good communication.

A LongTerm Strategic Plan (2012-2023) prepared by the Department of Safeguards, includes a section on Communication.

Communication Goal: To increase knowledge of, confidence in and support for IAEA verification among Member States, other stakeholders and the public. The openness and quality of the IAEA’s communications on safeguards and verification matters is of key importance to its Member States and other stakeholders. Their knowledge of safeguards and how they are implemented must be enhanced. It is also important to ensure that the public understands the IAEA’s verification mission. At the same time, the security of safeguards information is of paramount concern. To this end, the Department will:

  • Report safeguards conclusions and provide Member States with other information on safeguards and verification matters in a transparent and timely manner;
  • Keep Member States and other stakeholders informed of the objectives, processes and measures involved in safeguards implementation and how safeguards implementation is being further developed;
  • Keep stakeholders informed of changing proliferation challenges and their impact on safeguards;
  • Communicate the IAEA’s global nuclear verification mission to the public; and
  • Maintain an appropriate balance between the security and availability of information, further improve physical and information security and enhance the Department’s security culture.

Notwithstanding the references to “increasing knowledge” among the public of IAEA verification systems and keeping “stakeholders informed,” the Agency’s record in implementing these goals leans far too close to nondisclosure.

An Historical Coda

Forty years ago, officials with U.S. government agencies saw the IAEA’s lack of transparency as a problem, especially after India’s May 1974 “peaceful nuclear explosion,” which made many in the general public wonder about the effectiveness of the Agency’s safeguards (even though India’s CIRUS reactor was outside the system). A draft message prepared in September 1974 by staffers at the U.S. Atomic Energy Commission discussed the “need for the Agency to deal in a forth-right way with the concerns” about the lack of publicly available information on safeguards.

As an example, the AEC draft suggested that the Agency could “contribute to a sense of assurance” about the effectiveness of safeguards by “providing detailed data on what is actually done at specific facilities,” while still protecting the proprietary information and commercial secrets of the members.

A message from the U.S. Mission to the IAEA in December 1975 also addressed this problem: the Mission had been “actively pursuing with the IAEA Inspectorate the possibility of obtaining detailed information for the purpose of increasing public knowledge of actions and findings of the IAEA in implementing its safeguards.” The Mission reported that it would be working with the Inspectorate to “encourage the earliest and most effective results,” but it appears that those discussions made no headway.

 


THE DOCUMENTS

IAEA Documents Found in National Archives

The following examples illustrate two things: that IAEA documents that are not available in Vienna can sometimes be found in overseas archives and they can usefully shed light on how the Agency operates and how its officials have thought about its role over the years.

Document 1: Board of Governors, International Atomic Energy Agency, “Official Record of the Thirty-Ninth Meeting,” 17 January 1958

Source: The National Archives (United Kingdom), Records of Foreign and Commonwealth Office, FO 371 135484 (copy courtesy of Elisabeth R ö hrlich, University of Vienna)

This is an example of an early meeting record of the Agency’s Board of Governors. As the Agency was only months old, discussion focused on organizationalissues, specifically whether to establish a scientific advisory council, and the development of a fellowship and training program which became a core Agency activity over the years. This record is unavailable at the Agency’s Vienna archives because Board of Governors meeting records are closed.

Document 2: Inter-Office Memorandum, Ben Sanders to A.D. McKnight, Inspector General, “Safeguard Tasks Under Non-Proliferation,” 20 February 1967, Confidential

Source: National Archives (College Park, MD). Record Group 84, Records of Foreign Service Posts, Records of U.S. Mission to the International Atomic Energy Agency, Classified and Unclassified Subject Files, 1962-1972, box 5, Def 18-6 Nonproliferation (NPT) (January-March 1967)

Diverse agency information and documents show up in the U.S. National Archives. One such item is a report on safeguards for an NPT. In early 1967, when it was evident that some sort of treaty was in the works, Benjamin Sanders, a career official in the safeguards division, wanted the Agency to be ready. In a report to inspector general Alan McKnight, Sanders estimated what it would take to safeguard the known nuclear facilities of the prospective signatories to a Treaty. Using projections through 1969, he calculated the numbers of facilities in non-nuclear states that would require inspection and how many inspectors would be needed to monitor them. According to the calculations, by 1969, the non-weapons states, including Euratom members, would have 120 reactors along with 24 reprocessing and fuel fabrication plants. To inspect all nuclear facilities in the non-weapons states, including Euratom, the Agency would need 75 inspectors by 1969, some of whom would be resident, living in or near countries with more extensive safeguards requirements. Arguing that “early action” was essential, Sanders wanted the Agency to be ready by 1969; even if a treaty was finalized in 1967, agreements would have to be negotiated, and staff would have to be recruited. “By then the nuclear effort of the countries involved will have proliferated enormously and the urgency of applying [effective] safeguards will be immense.”

Access to documents like this would not be possible at the Agency archives in Vienna.

Document 3: Board of Governors, International Atomic Energy Agency, “Official Record of the Four Hundred and Thirteenth Meeting,” 12 June 1969

Source: National Archives (College Park, MD). Record Group 84, Records of Foreign Service Posts, Records of U.S. Mission to the International Atomic Energy Agency, Board of Governors Meetings, 1961-1972, box 3, IAEA 3 Board of Governors Meeting June 1969

This record of a Board of Governors Meeting recorded several substantive developments and decisions: the reappointment of Sigvard Eklund as Director General (he served the Agency from 1961 to 1981), the possible creation of a special Agency fund of enriched uranium to assist the power reactor programs of non-nuclear weapons states, and the potential role of the Agency in the use of nuclear explosions for peaceful purposes (PNE). The last topic produced some amusing banter; discussing the Agency’s report on the matter, the Italian delegate Carlo Salvetti took exception to the assumption that the Agency would necessarily play a central role in helping states “benefit” from PNEs. “The tone of paragraph 13(b) of the draft report was somewhat reminiscent of the fairy-tale in which the stepmother used to ask the mirror: “Mirror, mirror on the wall. Who is fairest one of all?” The Agency, however, was taking its fairness for granted without even consulting the mirror. The Agency might well become the prettiest girl in the world of peaceful nuclear explosions; it was somewhat early to say that it was already.” The U.S. Representative Henry D. Smyth, author of the Manhattan Project’s Smyth Report, “pointed out that the Agency only wished to enter the beauty contest.”

Document 4: U.S. Embassy Taiwan telegram 8253, “IAEA Inspection of ROC Nuclear Facilities,” 15 December 1976, Confidential

Source: National Archives (College Park), Record Group (RG) 59, Department of State Records, Access to Archival Databases, 1976 State Department telegrams.

The IAEA had expelled Taiwan from membership in 1971, in favor of the People’s Republic of China. The organization nevertheless had safeguards agreements with Taiwan, including a trilateral Taiwan-U.S.-IAEA agreement, which it continued to enforce. In 1972, the IAEA had begun to inspect nuclear facilities in Taiwan, with strong U.S. support because Washington had been concerned about Taiwan’s nuclear ambitions.

This document reproduces the text of the Agency’s interim report of its inspection in July 1975. The information in the document is complex and highly technical in nature but what comes across clearly is that the Agency deployed visual monitoring systems at the Taiwan Research Reactor to ensure that nothing untoward happened (e.g., removal of spent fuel for surreptitious reprocessing into plutonium). The monitoring system originally consisted of cameras, but technical problems led the Agency to replace them with a closed circuit TV system which, according to the inspection report, was “operating very successfully.” With the failure of the cameras the Agency needed to conduct “extensive” gamma radiation measurements of the spent or “irradiated” fuel to ensure that it had been used as the reactor operators claimed and not, for example, in a way that would maximize plutonium production. Other installations were inspected, such as a reprocessing laboratory which could be used to produce plutonium from spent fuel but which was too small “for serious production scale reprocessing.”

The next year IAEA inspectors would detect irregular activities at the Taiwan Research Reactor; led to questions about the 1976 inspection and eventually to the closing of the facility.

Toby McIntosh is Editor of FreedomInfo.org , published by the National Security Archive. William Burr is Senior Analyst at the National Security Archive, where he directs the Archive’s nuclear history documentation project. See the Archive’s Nuclear Vault resources page.

For more information, contact:

Toby McIntosh or William Burr at 202 / 994-7000 or nsarchiv@gwu.edu

These materials are reproduced from http://www.nsarchive.org with the permission of the National Security Archive

April 25, 2015 Posted by | Deception, Timeless or most popular | , | Leave a comment

The very strange saga of Adam Gadahn

Xymphora | July 12, 2006

From The Blotter (see also here):

“For the first time, a former Orange County, Calif. teenage rock music fan has revealed his role as a top al Qaeda leader.

Adam Gadahn, who disappeared from California seven years ago, appeared unmasked on an al Qaeda tape made public on the internet today.

As previously reported by ABC News, the FBI had concluded that the masked man was Gadahn based on voice analysis of previous al Qaeda tapes. On today’s tape, Gadahn is bearded, wearing a turban.

He denounces U.S. soldiers in Iraq and their alleged murder and rapes of Iraqi citizens.”

Whatreallyhappened writes (I’ve removed links that are in the original):

“The FBI lists Gadahn’s aliases as Abu Suhayb Al-Amriki, Abu Suhayb, Yihya Majadin Adams, Adam Pearlman, and Yayah.

But Adam Pearlmen is his REAL name! Adam is the grandson of the late Carl K. Pearlman; a prominent Jewish urologist in Orange County. Carl was also a member of the board of directors of the Anti-Defamation League, which was caught spying on Americans for Israel in 1993, much as AIPAC has been caught up in the more recent spy scandal.”

I think this information came originally from David Irving, so we should look into it in detail.  The man now known as ‘Azzam the American’, and definitely associated with top al Qaeda leaders, was born Adam Pearlman, the son of semi-prominent hippie musician Phil Pearlman. Pearlman had converted to Christianity and changed the family name to Gadahn. Phil Pearlman’s father was in fact prominent urologist Carl Kenneth Pearlman. From Carl Pearlman’s obituary (scroll down):

“He devoted much time to YMCA in Santa Ana. In an effort to aid the plight of world Jewry in the post-war years, he became the first chairman in Orange County of the Bonds for Israel and served as chairman for the United Jewish Welfare Fund.

He served with the Jewish Family Service and the Nursing Home Advisory Committee. He was a member of the board of directors of the Anti-Defamation League and was an honoree of the National Conference of Christians and Jews (now known as the National Conference for Community and Justice).”

The Los Angeles Times is characteristically coy (original story no longer available but it is reprinted here; coy word is in red):

“In 1995, at 17, Adam Gadahn moved out of the family’s Winchester home, his father said, because ‘he wanted out of the country and wanted to be in the city,’ where he lived with relatives in Garden Grove.”

Actually, the detail comes from the Washington Post:

“While living with his grandparents in suburban Santa Ana, he made his first trip to the nearby mosque in 1995. He introduced himself as Yahya – the Arabic name for John the Baptist, revered as a great prophet in Islam.”

It’s an old pattern. Teenaged son rebels from hippie parents, then flees the countryside – and the hippie lack of electricity or indoor plumbing – to live with grandparents.  Grandfather is on the board of directors of the Anti-Defamation League, so he almost immediately decides to join a mosque. He then assaults the director of the mosque, and is seen hanging out with ‘radical’ Muslims (and note this extremely odd parallel story, stemming out of the same Garden Grove mosque). He also becomes a bit famous for an internet essay “Becoming Muslim”, which is itself rather odd:

“On the left, conspiracy theorists – no less energized than their right-wing counterparts – got busy, too. They thought it strange, they said, as if the government stitched the story together from scratch. Some kid who never before posted to the Internet drops a deeply personal revelation onto a USC website, a diatribe that is chock full of anti-government, anti-Christian sentiments, and then pretty much disappears from cyberspace. A person doesn’t just post his entire life story on the Web and never post again, they say. You’d think someone like that would have been on the Web all the time; at least you could find him on Islamic faith newsgroups, chatting about the Qur’an.

But Gadahn’s online presence is scant. Since stuff tends to hang around in cyberspace forever, it does raise questions that, other than “Becoming Muslim,” and a few news articles he’s appeared to have edited about jihad, why is Gadahn nowhere to be found?

There are other odd occurrences about “Becoming Muslim,” such as Gadahn’s statements that the U.S. government considered Muslims to be “bloodthirsty, barbaric terrorists.” This is a mostly inaccurate conclusion to have drawn in 1995; though anti-Muslim sentiments in America rose after 9/11, the U.S. government had not previously taken such a hard-line position.”

Gadahn has become a cause célèbre for the American right, a made-to-order American traitor from central casting. What if he really was manufactured? His confused background, with a detour through heavy metal, his moving in with his grandparents (grandfather on the ADL board), his rare internet essay anachronistically written from a Zionist perspective and not the perspective of the American government in 1995 (as if the Zionists had already written the post-September 11 script), his immediate ‘conversion’ to Islam and association with ‘radical’ Muslims – it’s all just a bit too contrived. We have seen other examples of how Israel has infiltrated Islamist organizations (most recently in Lebanon). Have the Zionists infiltrated al Qaeda at its highest levels? Or is it more accurate to look at al Qaeda as a ‘false flag’ Zionist organization?

April 24, 2015 Posted by | Deception, False Flag Terrorism, Timeless or most popular | , | 3 Comments

No War Crimes Here

Sixteenth Anniversary of the Attack on Yugoslavia: Nish

By Gregory Elich | CounterPunch | April 22, 2015

As a member of a delegation documenting NATO war crimes in 1999, I visited Nish, the third largest city in Yugoslavia. NATO attacked this appealing old city on forty occasions, destroying approximately 120 buildings and damaging more than 3,400.

On the night of our second stop in Nish, we attended a meeting with university professor Jovan Zlatich. During the NATO war, Dr. Zlatich served as commander of the city’s Civil Defense Headquarters. In his discussion of the bombardment of Nish, he focused particular attention on the use of cluster bombs. Nish had the misfortune of being the target of several CBU-87/B cluster bombs, a weapon designed to open at a predetermined height and release 202 bomblets. These smaller bombs burst in a furious repeating series of explosions, spraying thousands of pieces of shrapnel over a wide area. Cluster bombs are anti-personnel weapons. While causing relatively minor damage to structures, they inflict frightful damage on human beings.

According to Dr. Miodrag Lazich of the surgical department at Nish University Hospital, “Cluster bombs cause enormous pain. A person standing a meter or two away from the cluster bomb gets the so-called air-blast injuries, coming from a powerful air wave. The body remains mostly intact while internal organs like liver, brains or lungs are imploded inside. Parts of the exploding bombs cause severe injuries to people standing 15 to 20 meters away, ripping apart their limbs or hitting them in the stomach or head.” The starting speed of the explosive charge in a cluster bomb is more than three times that of a bullet fired from an automatic rifle. Consequently, as shrapnel strikes its victim, the combined kinetic energy and explosive power is capable of causing a wound up to thirty times the size of the fragment itself. Because the bomblets are dispersed, they can cover an area as large as three football fields with their deadly rain.

Dr. Zlatich showed us photographs of his city’s cluster bomb victims. We viewed page after page of civilians lying in pools of blood, and then – much worse, pre-autopsy photographs. What cluster bombs do to soft human flesh is beyond anything that can be imagined, and an anguished silence fell over the room as Dr. Zlatich flipped through the photos. Viewing such scenes was unbearable. Finally, Dr. Zlatich looked up at us and softly said, “Western democracy.”

We had the opportunity to visit these sites. On three separate occasions, we walked down Anete Andrejevich Street and talked with residents. It was on this street at shortly after 11:30 AM on May 7 that cluster bombs fell. At one end of Anete Andrejevich Street is a marketplace, and on the day of the bombing the area was busy with shoppers. The street was narrow, lined with buildings that were old and charming. Evidence of the attack was unmistakable. Almost every house was pockmarked, and shrapnel had gouged hundreds of holes in the walls of the more heavily damaged homes. There was no place for pedestrians to hide on that day. One parked car had not moved since the day of the bombing. It was still there, riddled with punctures and resting on flattened tires, its windows covered with plastic. Memorials to the victims were posted at the spots where they had been killed.

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Home on Anete Andrejevich Street, pockmarked by cluster bomb fragments. Photo: Gregory Elich.

As cluster bombs descended on this neighborhood, a violent and rapidly repeating series of explosions sounded as the bomblets sprayed razor-sharp shrapnel by the thousands. Seventy-three-year-old Smilja Djurich was inside her home when the attack came. “It went blat-blat-blat,” she recalled. “I didn’t know where I was. I was completely stunned. If I had been in the street, I would have been dead. When it began, we rushed to the cellar. People were screaming afterwards.” She sobbed as she told a reporter, “I survived World War II, but I haven’t seen anything like this.”

A young man was killed near her doorstep, sliced to pieces and lying in a pool of blood. Nearby, an elderly woman, her forehead pierced by shrapnel, was stretched out in the street, a bag of carrots beside her. Zhivorad Ilich was selling onions and eggs on a cardboard box that served as a makeshift stall when flying metal killed him. Slavica Dinich explained how she managed to survive. “We ducked for cover under the bed. One bomb fell through the roof of the upper floor of our house.”

Bozidar Panich reported, “I was in my garden when I heard something crack.” He saw smoke rising from the street. “Then I looked at the sky above and saw a small parachute with a yellow grenade descending toward me. Instinctively, I threw myself to the ground and covered my head with my hands. The bomb landed and exploded beside me so that everything shook. I remember that I was all covered with soil. I ran out into the street to look for my son, who had gone out minutes earlier. On the street, it was chaos. The dead and wounded were lying all over the place… People were crying out for help, in shock, and the cars and roofs of houses were burning.”

At the corner of Jelene Dimitrijevich and Shumatovachka Streets, a memorial for Ljiljana Spasich was posted on a brick wall at the place where she was killed while walking home from the market. Only 26 years-old and seven months pregnant, she was just one month away from completing her fifth and final year at medical school. She had planned her life well, expecting to give birth shortly after graduation. But NATO had other plans for her, and an exploding cluster bomb canister killed both her and her unborn baby.

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Memorial to Ljiljana Spasich, posted at the spot where she was killed.  Photo: Gregory Elich.

Accompanying Spasich on that day was her mother-in-law, Simeunka Spasich, who recalled, “We were 300-400 meters from our apartment and some 100 meters from the market when we heard planes. Suddenly, bombs were falling all around us. It was terrible. Explosions, smoke, leaves, branches… I felt a blow on my head, and blood leaking. Then I fainted. Several times I regained consciousness. I looked around me and realized that I was lying in the street, my right leg was broken as well as my right arm. People around me were dead or injured. It was terrible. Right next to me I saw my daughter-in-law Ljiljana, who was lying motionless. She was dead. At that moment, I thought her to be alive, but later they told me she had been killed on the spot, and the child could not have been saved.”

When the ambulance picked up Spasich, she lapsed back into unconsciousness. “I finally gained consciousness at the Military Medical Academy in Belgrade. My left leg was amputated below the knee, and my right hand was seriously injured. I could not move it. I was told that I would have to endure several operations more… My son, who came to visit me, told me that they did not believe I would stay alive, since my intestines had spilled.”

Two memorials to Pordani Seklich were posted on the front door window of the restaurant where she was employed as a waitress. She was in the kitchen when whizzing shrapnel tore through the roof and killed her where she stood. Our hotel, located across the Nishava, overlooked the neighborhood around Anete Andrejevich Street, and we had walked extensively throughout the area. It was an entirely residential neighborhood, with nothing that could be construed as a military target.

Only ten minutes after the cluster bombing of the marketplace neighborhood, a NATO warplane dropped an incendiary cluster bomb on the parking lot of the Clinical Center. A ball of fire engulfed the parking lot, igniting cars and sending thick clouds of black smoke billowing into the sky. Several homes on the adjacent block were damaged. Shrapnel by the hundreds shot through the hospital, causing the roof over the classroom to collapse. It was the everyday routine for staff to meet in the classroom at noon to discuss the war while eating lunch. Had the attack come twenty minutes later, all would have perished. In one room alone, over ninety holes from bomb fragments were counted.

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Parking lot of Clinical Center, target of incendiary cluster bomb.  Photo: Gregory Elich.

The incendiary effect of the bomb brought to mind Djakovica, where NATO attacked a column of Albanian refugees who were returning to their homes in Kosovo. According to a wartime report in Jane’s Defence Weekly, the Pentagon was anxious to introduce the newly developed CBU-97 cluster bomb. This weapon was designed to spray shrapnel heated to an intense temperature and ignite everything within its blast radius. The charred remains of the automobiles in the parking lot indicated that this was probably the weapon used at the Clinical Center. Djakovica was another site that served as a testing ground for the CBU-97, where it proved a rousing success, killing 73 civilians and dismembering and incinerating most of them beyond recognition. Survivors of that attack scattered and sought cover in nearby homes. NATO pilots, spotting this, launched missiles on the houses, adding to the death toll.

The photographs I saw of the victims were horrifying. We were later to talk with Albanians in Belgrade who served in the Yugoslav government or held prominent positions in the society. One of them mentioned his anger over the slaughter at Djakovica, as well as other instances where NATO warplanes killed his fellow Albanians. “The man who could command NATO to bomb people is not human. He is an animal. After the bombing of Djakovica, I saw decapitated bodies. I have pictures of that. It is horrible, terrible. I saw people without arms, without feet.”

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Office building of So Produkt, a distributor of salt products.  Photo: Gregory Elich.

The state-owned DIN cigarette factory in Nish was one of Yugoslavia’s largest manufacturing facilities, employing 2,500 workers. It was bombed on four occasions. The factory’s deputy managing director, Milovoje Apostolovich, told us that cluster bombs were among the munitions dropped on DIN. Workers found two cluster bomb fragments with messages scrawled on them: “Do you still want to be Serbs?” and “Run faster.” Apostolovich estimated damage to his factory at $35 million. A cigarette factory clearly lacked military utility. The only reason DIN was attacked was because it was the largest employer in Nish. We strolled through the factory’s grounds. A cruise missile had completely flattened the tobacco storehouse. Two of the larger buildings were substantially demolished. Merely to clear away the rubble would be an imposing task. Many of the smaller buildings had also sustained substantial damage. Bricklayers were busily rebuilding the canteen. Across the lane, the façade of the large financial and computer center bore the marks of a cluster bomb, with hundreds of gouged holes spread across its face.

Reconstruction continued at the state-owned DIN until it was made fit for privatization by a new Western-friendly government, as 1,400 employees were thrown out of work. In October 2003, DIN was purchased by Philip Morris, which six years later eliminated a third of the remaining workforce, terming those it laid off as “technological surplus.”

Several requests were filed by various parties with the International Criminal Tribunal for the Former Yugoslavia (ICTY) to investigate NATO war crimes, including the cluster bombing of Nish. Established at the behest of the United States, from which it received the bulk of its funding, the ICTY was not an entirely disinterested party. Compelled to deflect persistent complaints about NATO actions, the ICTY Prosecutor’s Office formed a committee it authorized to conduct an “investigation” to determine if there was a basis for legal action against NATO.

Not surprisingly, the Prosecutor’s committee found no basis to charge NATO for any of its actions. In regard to the cluster bombing of Nish, it correctly pointed out that there is no treaty prohibiting or restricting the use of cluster bombs. The Prosecutor’s office added that it indicted Serbian Krajina leader Milan Martich for launching a cluster bomb missile at Zagreb because it “was not designed to hit military targets but to terrorize the civilians of Zagreb.” NATO cluster bombs, evidently by their inherent nature, cannot be so characterized. “There is no indication cluster bombs were used in such a fashion by NATO,” the Prosecutor’s report asserts. The Office “should not commence an investigation into the use of cluster bombs as such by NATO.”

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Bridge over the Nishava River.  Photo: Gregory Elich.

The report goes on to explain that military commanders are obliged to “do everything practicable to verify that the objectives to be attacked are military objectives,” and to refrain from striking purely civilian targets. Against all evidence, the Prosecutor’s Office claimed that most of NATO’s targets were “clearly military objectives,” and “military objectives are often located in densely populated areas.”

The evidence for arriving at that determination was clear, according to the Prosecutor’s Office. “It has tended to assume that the NATO and NATO countries’ press statements are generally reliable and that explanations have been honestly given,” despite the fact that when it asked NATO about specific incidents, replies were vague and “failed to address the specific incidents.” Only one conclusion was possible: “On the basis of the information reviewed, however, the committee is of the opinion that neither an in-depth investigation related to the bombing campaign as a whole nor investigations related to specific incidents are justified.”

Try telling Ljiljana Spasich’s widowed husband that his wife and unborn baby were legitimate military targets.

Gregory Elich is on the Board of Directors of the Jasenovac Research Institute and the Advisory Board of the Korea Policy Institute.

April 22, 2015 Posted by | Timeless or most popular, War Crimes | , | Leave a comment

Will the NPT face the facts?

By John Loretz | International Physicians for the Prevention of Nuclear War | April 22, 2015

When the 2015 Review Conference of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) opens in New York next week, the 190 member states will have to come to terms with some hard facts.

The NPT is 45 years old, and while most observers agree that it has worked reasonably well over that time to curtail the spread of nuclear weapons to countries that did not have them in 1970, it has not achieved its most important goal—a world in which no countries have nuclear weapons.

There are still more than 16,000 nuclear weapons in the arsenals of nine states, three of which have never joined the NPT. Despite reductions from Cold War levels, the US and Russia have more than 90% of that total between them, and the prospects for negotiating deeper bilateral reductions while NATO and Russia glare at each other from opposite sides of Ukraine look dim.

While giving lip service to the goal of nuclear disarmament, all nine nuclear-armed states—the US, Russia, the UK, France, China, India, Pakistan, Israel, and North Korea—are modernizing their warheads, delivery systems, and infrastructure. India and Pakistan, which are not NPT members, are engaged in a nuclear arms race reminiscent of the Cold War. In the always tense Middle East, a nuclear-armed Israel is making a precarious agreement with a not-yet-nuclear-armed Iran even more precarious.

With the risks increasing that nuclear weapons could be used in warfare for the first time since the US atomic bombings of Hiroshima and Nagasaki 70 years ago, nuclear disarmament takes on added urgency. The NPT is supposed to be the most effective tool the world has for producing a world without nuclear weapons. So how is it doing on the eve of another five-year review? Not so well.

At the last NPT Review Conference in 2010, the Member States adopted a 64-point action plan. The first 22 actions, pertaining to nuclear disarmament and Article VI of the treaty, were largely recycled priorities that have been on the table for a decade or two.

According to a report prepared by Reaching Critical Will, progress has been made on only five of the 22 disarmament actions. Four of the five relate to maintaining the existing nuclear testing moratorium and strengthening support for the Comprehensive Test Ban Treaty (CTBT) and its technical infrastructure, and were happening anyway. The US and Russia ratified New START, but have engaged in no further disarmament negotiations since then. Worse, they have undermined a modest set of reductions through provocative and expensive modernization of the weapon systems they have retained. If 60% is an “F,” then the grade for this part of the action plan is much further down the alphabet.

The NPT is stuck in quicksand. Elsewhere, however, there has been a seismic shift in the political and diplomatic landscape regarding nuclear weapons and nuclear disarmament. Scientific evidence about the humanitarian impact of nuclear weapons (HINW), presented at a series of three groundbreaking international conferences, has put the dangers into chilling context. The evidence was summed up this way at the third conference, held in Vienna in December 2014 and attended by 158 states, along with many international organizations and civil society groups:

“The impact of a nuclear weapon detonation, irrespective of the cause, would not be constrained by national borders and could have regional and even global consequences, causing destruction, death and displacement as well as profound and long-term damage to the environment, climate, human health and well-being, socioeconomic development, social order and could even threaten the survival of humankind.”

Put another way, a single nuclear weapon can destroy a city; as few as 100 Hiroshima-sized bombs, used in a limited, regional nuclear war, would disrupt the global climate so severely that at least two billion people—more than a quarter of the world’s population—would face starvation from a “nuclear famine”; a nuclear war between the US and Russia, each with thousands of warheads, would shut down the Earth’s life-sustaining ecosystems, bringing an end to humanity itself.

From this perspective, to use American slang, the NPT needs a real kick in the pants. That kick is about to be delivered at the 2015 Review Conference in the form of the Austrian Pledge. At the conclusion of the Vienna HINW conference, Austria pledged that it would “cooperate with all relevant stakeholders, States, international organisations, the International Red Cross and Red Crescent Movements, parliamentarians and civil society, in efforts to stigmatise, prohibit and eliminate nuclear weapons in light of their unacceptable humanitarian consequences and associated risks.”

The first step identified in the Pledge was to bring the evidence from the three HINW conferences into the NPT Review and to challenge the member states “to renew their commitment to the urgent and full implementation of existing obligations under Article VI, and to this end, to identify and pursue effective measures to fill the legal gap for the prohibition and elimination of nuclear weapons.”

The Pledge has been adopted by 69 states during the run-up to the NPT Review, and more endorsements are expected during and after the month-long conference.

The Austrian Pledge is a gift to the NPT member states—a way out of the malaise that has prevented the treaty from delivering on its promise of a nuclear-weapons-free world for 45 years. Should the NPT fail to make the most of this gift at the upcoming Review, the time will have arrived to look for a more effective means to close the legal gap and to prohibit and eliminate weapons that threaten each and every one of us with extinction.

April 22, 2015 Posted by | Militarism, Timeless or most popular, War Crimes | , , , , , | 1 Comment

Iran nuclear deal: Can the US be trusted?

By Yuram Abdullah Weiler | Press TV | April 22, 2015

“The Islamic Republic of Iran has never been and will never be a threat to the [Middle East] region and neighboring countries, but it will react with full strength against any aggression.” — Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei

Iran has not acted aggressively against its neighbors since Nader Shah invaded India in 1738. Yet US politicians, military leaders and the media persist in portraying Iran as an untrustworthy menace threatening the entire civilized world.

Given that the US military now appears to have a Zionist in charge as its new defense secretary and the relentless threatening rhetoric, we must ask, if a final nuclear deal with Iran is sealed, can the US be trusted to abide by its provisions? Iran’s Leader Ayatollah Seyyed Ali Khamenei has justifiable reservations.

In a speech on April 19, 2015 before a group of Iran’s high-level military commanders, Ayatollah Khamenei correctly observed, “Today, the biggest threats to the world and to the region are the US and the Zionist regime, which intervene in any spot they deem necessary and trigger killings, without any consideration and without conforming to religious and conscientious obligations and criteria.” The veracity of the Leader’s words are demonstrated by the US support for the despotic Saudi regime’s bombing campaign against Yemen, which has targeted refugee camps, hospitals, schools, urban neighborhoods and soccer stadiums, resulting in the slaughter of hundreds of innocent people. Similarly, the Israeli entity supports its newfound Saudi ally in its latest aggression in Yemen. Of course, the occupant of the Oval Office whose middle name is Hussein has assured the Custodian of the Two Holy Mosques of “US full commitment to sustain Saudi Arabia’s capabilities to defend itself,” in the same way that as he has reaffirmed “Israel’s right to defend itself” while the Zionist regime was systematically slaughtering innocent, unarmed civilians in Gaza with US-supplied weapons. How could the Leader of Iran trust a nation whose president had stood in Zionist leader Netanyahu’s residence in occupied Al-Quds just a year earlier and blatantly threatening the Islamic Republic avowed, “All options are on the table. We will do what is necessary to prevent Iran from getting the world’s worst weapons.”

The incessant barrage of US threats against Iran appears to be the byproduct of a thorough Israeli penetration into the highest levels of the American government, resulting in a convergence of neocon Iranophobic dogma and Zionist security paranoia. That Congress is an “Israeli-occupied territory” has been known for years, but now Tel Aviv’s tentacles extend to the US military. For verification, one need look no further than Obama’s new war chief, Ashton Carter, who during a 2013 visit to the Israeli entity remarked, “Protecting America means protecting Israel, and that’s why we’re here in the first place.” According to the Zionist organization United with Israel, Carter “is regarded by Israel as an honest and perceptive friend in the uppermost echelons of the Pentagon.”

Apparently, Carter not only believes that Iran has a nuclear weapons program, but also appears intent on conflating the two remaining independent members of George W. Bush’s infamous Axis of Evil. “With respect to the nuclear weapons situation in Iran … those negotiations that are being conducted by us and our P5-plus-1 partners with the Iranians have the objective of arresting the North Korean — I mean, not North Korean, excuse me, the Iranian nuclear program,” averred the US defense secretary during a recent Pentagon press conference. Perhaps the mistake reflects Carter’s long standing desire to bomb North Korea’s nuclear facilities, which in 2006 he viewed as “a prudent policy.”

While the slip of the tongue is somewhat amusing, Carter’s obsession with security is alarming but in perfect alignment with Zionist interests. In a 1998 paper coauthored with John Deutch and Philip Zelikow, Carter expounded his thesis that nations should be “obliged to reassure other states that are worried and to take reasonable measures to prove they are not secretly developing weapons of mass destruction. Failure to supply such proof or to prosecute the criminals living within their borders should entitle worried nations to take all necessary actions for their self-defense.” Hence Carter’s philosophy meshes perfectly with Netanyahu’s ceaseless cacophony of concerns over an imagined “Iranian nuclear threat.” Furthermore, any nuclear agreement with Iran would represent a concrete implementation of Carter’s view that the burden of proof of compliance rests on the suspect nation. From this it follows rather quickly that suspicion alone is sufficient to justify military threats. Of course that Carter would not apply his burden of proof on the suspect nation doctrine to the Israeli entity goes without saying.

During the same meeting with military commanders, Ayatollah Khamenei stated, “After a [short] period of silence by the opposite side, one of their officials recently spoke once more of options on the table.” The Leader was referring to US joint chiefs of staff chairman Martin Dempsey, who, in a press conference emphasized, “The military option that I owe the president to both encourage the diplomatic solution and, if the diplomacy fails, to ensure that Iran doesn’t achieve a nuclear weapon, is intact.” This same threat was voiced one day before the detailed nuclear outline was signed in Lausanne, Switzerland when Obama’s press secretary, Josh Earnest, after being asked by a reporter what if the negotiations fail, emphasized, “There is, of course, a military option that’s sitting on the table.”

And the military option is on a table that has an expensive nuclear centerpiece called the B61-12. A so-called LEP (life extension program) of earlier B61 designs, the B61-12 is a nuclear smart bomb specifically designed as an earth penetrator. According to Hans M. Kristensen, Director of the Nuclear Information Project of the Federation of American Scientists, the B61-12 is a new nuclear weapon with improved military capabilities, and is “the most expensive nuclear bomb project ever.” The development of this B61-12 smart nuke places the US squarely in violation not only of its own 2010 Nuclear Posture Review, but also Article 6 of the Nuclear Non-Proliferation Treaty, which commits the US to “pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control.”

And as if the B61-12 nuclear “device” were not enough, the Pentagon has unveiled the improved Massive Ordnance Penetrator (MOP) GBU-57A-B, a 30,000 lb. conventional-explosive bomb specifically designed to target Iran’s hardened nuclear facilities. Why spend obscene sums of money to develop bigger and better bunker buster bombs if indeed the Washington regime seeks peaceful relations? The answer seems obvious that Washington has no such peaceful intentions. By accusing Iran’s civil nuclear program of having a weapons dimension while simultaneously providing political cover for the Israeli entity’s very real nuclear weapons program, US leaders are obviously talking out of both sides of their imperial mouths.

As insane as this may sound, Andrew C. Weber, US assistant secretary of defense for nuclear, chemical and biological defense programs, insists that “maintaining a safe, secure and effective nuclear stockpile is critical to deterring potential adversaries and assuring US allies and partners.” Perhaps Ayatollah Khamenei had this in mind in addition to Dempsey’s recent threat when he commented, “On the one hand, they bluff this way and on the other, they say the Islamic Republic of Iran should stop its defense progress, which is an idiotic remark.” Undeniably it is idiotic, and in view of these stark realities, Iran would be foolish not to deploy the S-300 missile air defense systems against the American aggressor. The Leader wisely instructed all of Iran’s Defense Forces to “boost their military and defense preparedness as well as their combat readiness” in his April 19 speech before Iranian military leaders.

Nevertheless, the United States, Russia, the United Kingdom, France, China, India, North Korea, Pakistan, and the Israeli entity all cling tenaciously to their nuclear weapons. Despite hopes for disarmament, counting warheads in storage and awaiting dismantlement, there are some 15,700 nuclear weapons in the world. Evidently, the goal here is not the complete elimination of nuclear weapons or else why would the US create a new nuclear weapon with new capabilities? Moreover, by ignoring the Israeli entity’s nuclear arsenal, the US has undermined its own credibility in attempting to police the proliferation of nuclear weapons.

“Over the past 250 years, Iran has not waged a single war of aggression against its neighbors, nor has it initiated any hostilities,” political scientist and former advisor to Iran’s nuclear negotiating team Dr. Kaveh L. Afrasiabi reminds us. Without a single nuclear weapon and no intention of acquiring one, Iran is clearly not threatening world peace. It is the hypocritical US along with eight other nuclear-armed states, which still possess over 10,000 nuclear warheads, who are collectively threatening our planet. How can Iran trust such a nation?

April 22, 2015 Posted by | Ethnic Cleansing, Racism, Zionism, Wars for Israel, Militarism, Timeless or most popular | , , , | Leave a comment

The US Hand in Libya’s Tragedy

By Robert Parry | Consortium News | April 21, 2015

The mainstream U.S. news media is lambasting the Europeans for failing to stop the humanitarian crisis unfolding in the Mediterranean Sea as desperate Libyans flee their war-torn country in overloaded boats that are sinking as hundreds drown. But the MSM forgets how this Libyan crisis began, including its own key role along with that of “liberal interventionists” such as Hillary Clinton and Samantha Power.

In 2011, it was all the rage in Official Washington to boast about the noble “responsibility to protect” the people of eastern Libya who supposedly were threatened with extermination by the “mad man” Muammar Gaddafi. We also were told endlessly that, back in 1988, Gaddafi’s agents had blown Pan Am 103 out of the skies over Lockerbie, Scotland.

The R2Pers, led by then-National Security Council aide Power with the backing of Secretary of State Clinton, convinced President Barack Obama that a “humanitarian intervention” was needed to prevent Gaddafi from slaughtering people whom he claimed were Islamic terrorists.

As this U.S.-orchestrated bombing campaign was about to begin in late March 2011, Power told a New York City audience that the failure to act would have been “extremely chilling, deadly and indeed a stain on our collective conscience.” Power was credited with steeling Obama’s spine to press ahead with the military operation.

Under a United Nations resolution, the intervention was supposed to be limited to establishing no-fly zones to prevent the slaughter of civilians. But the operation quickly morphed into a “regime change” war with the NATO-led bombing devastating Gaddafi’s soldiers who were blown to bits when caught on desert roadways.

Yet, the biggest concern in Official Washington was a quote from an Obama aide that the President was “leading from behind” – with European warplanes out front in the air war – when America’s war hawks said the United States should be leading from the front.

At the time, there were a few of us who raised red flags about the Libyan war “group think.” Though no one felt much sympathy for Gaddafi, he wasn’t wrong when he warned that Islamic terrorists were transforming the Benghazi region into a stronghold. Yes, his rhetoric about exterminating rats was over the top, but there was a real danger from these extremists.

And, the Pan Am 103 case, which was repeatedly cited as the indisputable proof of Gaddafi’s depravity, likely was falsely pinned on Libya. Anyone who dispassionately examined the 2001 conviction of Libyan agent Ali al-Megrahi by a special Scottish court would realize that the case was based on highly dubious evidence and bought-and-paid-for testimony.

Megrahi was put away more as a political compromise (with a Libyan co-defendant acquitted) than because his guilt was proven beyond a reasonable doubt. Indeed, by 2009, the conviction was falling apart. Even a Scottish appeals court expressed concern about a grave miscarriage of justice. But Megrahi’s appeal was short-circuited by his release to Libya on compassionate grounds because he was suffering from terminal prostate cancer.

Yet the U.S. mainstream media routinely called him “the Lockerbie bomber” and noted that the Libyan government had taken “responsibility” for the bombing, which was true but only because it was the only way to get punitive sanctions lifted. The government, like Megrahi, continued to proclaim innocence.

A Smirking MSM

During those heady days of bombing Libya in 2011, it also was common for the MSM to smirk at the notion that Megrahi was truly suffering from advanced prostate cancer since he hadn’t died as quickly as some doctors thought he might. Then, in September 2011, after Gaddafi’s regime fell, Megrahi’s family invited the BBC and other news organizations to see Megrahi struggling to breathe in his sick bed.

His son, Khaled al-Megrahi, said, “I know my father is innocent and one day his innocence will come out.” Asked about the people who died in the Pan Am bombing, the son said: “We feel sorry about all the people who died. We want to know who did this bad thing. We want to know the truth as well.”

But it was only after Megrahi died on May 20, 2012, that some elements of the MSM acknowledged grudgingly that they were aware of the many doubts about his conviction all along. The New York Times’ obituary carried a detailed account of the evidentiary gaps that were ignored both during the trial in 2001 and during the bombing of Libya in 2011.

The Times noted that “even some world leaders” saw Megrahi “as a victim of injustice whose trial, 12 years after the bombing, had been riddled with political overtones, memory gaps and flawed evidence. … Investigators, while they had no direct proof, believed that the suitcase with the bomb had been fitted with routing tags for baggage handlers, put on a plane at Malta and flown to Frankfurt, where it was loaded onto a Boeing 727 feeder flight that connected to Flight 103 at London, then transferred to the doomed jetliner.”

Besides the lack of proof supporting that hypothesis was the sheer implausibility that a terrorist would assume that an unattended suitcase could make such an unlikely trip without being detected, especially when it would have been much easier to sneak the suitcase with the bomb onto Pan Am 103 through the lax security at Heathrow Airport outside London.

The Times’ obit also noted that during the 85-day trial, “None of the witnesses connected the suspects directly to the bomb. But one, Tony Gauci, the Maltese shopkeeper who sold the clothing that forensic experts had linked to the bomb, identified Mr. Megrahi as the buyer, although Mr. Gauci seemed doubtful and had picked others in photo displays. …

“The bomb’s timer was traced to a Zurich manufacturer, Mebo, whose owner, Edwin Bollier, testified that such devices had been sold to Libya. A fragment from the crash site was identified by a Mebo employee, Ulrich Lumpert. Neither defendant testified. But a turncoat Libyan agent testified that plastic explosives had been stored in [Megrahi’s co-defendant’s] desk in Malta, that Mr. Megrahi had brought a brown suitcase, and that both men were at the Malta airport on the day the bomb was sent on its way.”

In finding Megrahi guilty, the Scottish court admitted that the case was “circumstantial, the evidence incomplete and some witnesses unreliable,” but concluded that “there is nothing in the evidence which leaves us with any reasonable doubt as to the guilt” of Megrahi.

However, the evidence later came under increasing doubt. The Times wrote: “It emerged that Mr. Gauci had repeatedly failed to identify Mr. Megrahi before the trial and had selected him only after seeing his photograph in a magazine and being shown the same photo in court. The date of the clothing sale was also in doubt.” Scottish authorities learned, too, that the U.S. Justice Department paid Gauci $2 million for his testimony.

As for the bomb’s timer, the Times noted that the court called Bollier “untruthful and unreliable” and “In 2007, Mr. Lumpert admitted that he had lied at the trial, stolen a timer and given it to a Lockerbie investigator. Moreover, the fragment he identified was never tested for residue of explosives, although it was the only evidence of possible Libyan involvement.

“The court’s inference that the bomb had been transferred from the Frankfurt feeder flight was also cast into doubt when a Heathrow security guard revealed that Pan Am’s baggage area had been broken into 17 hours before the bombing, a circumstance never explored. Hans Köchler, a United Nations observer, called the trial ‘a spectacular miscarriage of justice,’ words echoed by [South African President Nelson] Mandela.”

In other words, Megrahi’s conviction looked to have been a case of gross prosecutorial misconduct, relying on testimony from perjurers and failing to pursue promising leads (like the possibility that the bomb was introduced at Heathrow, not transferred from plane to plane to plane). And those problems were known prior to Megrahi’s return to Libya in 2009 and prior to the U.S.-supported air war against Gaddafi in 2011.

Yet, Andrea Mitchell at MSNBC and pretty much everyone else in the MSM repeated endlessly that Megrahi was “the Lockerbie bomber” and that Libya was responsible for the atrocity, thus further justifying the “humanitarian intervention” that slaughtered Gaddafi’s soldiers and enabled rebel militias to capture Tripoli in summer 2011.

Al-Qaeda Hotbed

Similarly, there was scant U.S. media attention given to evidence that eastern Libya, the heart of the anti-Gaddafi rebellion, indeed was a hotbed for Islamic militancy, with that region supplying the most per-capita militants fighting U.S. troops in Iraq, often under the banner of Al-Qaeda.

Despite that evidence, Gaddafi’s claim that he was battling Islamic terrorists in the Benghazi region was mocked or ignored. It didn’t even matter that his claim was corroborated by a report from U.S. analysts Joseph Felter and Brian Fishman for West Point’s Combating Terrorism Center.

In their report, “Al-Qaeda’s Foreign Fighters in Iraq,” Felter and Fishman analyzed Al-Qaeda documents captured in 2007 showing personnel records of militants who flocked to Iraq for the war against the Americans. The documents showed eastern Libya providing a surprising number of suicide bombers who traveled to Iraq to kill American troops.

Felter and Fishman wrote that these so-called Sinjar Records disclosed that while Saudis comprised the largest number of foreign fighters in Iraq, Libyans represented the largest per-capita contingent by far. Those Libyans came overwhelmingly from towns and cities in the east.

“The vast majority of Libyan fighters that included their hometown in the Sinjar Records resided in the country’s Northeast, particularly the coastal cities of Darnah 60.2% (53) and Benghazi 23.9% (21),” Felter and Fishman wrote, adding that Abu Layth al‐Libi, Emir of Libyan Islamic Fighting Group (LIFG), “reinforced Benghazi and Darnah’s importance to Libyan jihadis in his announcement that LIFG had joined al‐Qa’ida.”

Some important Al-Qaeda leaders operating in Pakistan’s tribal regions also were believed to have come from Libya. For instance, “Atiyah,” who was guiding the anti-U.S. war strategy in Iraq, was identified as a Libyan named Atiyah Abd al-Rahman.

It was Atiyah who urged a strategy of creating a quagmire for U.S. forces in Iraq, buying time for Al-Qaeda Central to rebuild its strength in Pakistan. “Prolonging the war [in Iraq] is in our interest,” Atiyah said in a letter that upbraided Jordanian terrorist Abu Musab al-Zarqawi for his hasty and reckless actions in Iraq.

After U.S. Special Forces killed Al-Qaeda founder Osama bin Laden on May 2, 2011, in Pakistan, Atiyah became al-Qaeda’s second in command until he himself was reportedly killed in a U.S. drone strike in August 2011. [See Consortiumnews.comTime Finally Ran Out for Atiyah.”]

However, to most Americans who rely on the major U.S. news media, little of this was known, as the Washington Post itself acknowledged in an article on Sept. 12, 2011, after Gaddafi had been overthrown but before his murder. In an article on the rise of Islamists inside the new power structure in Libya, the Post wrote:

“Although it went largely unnoticed during the uprising that toppled Gaddafi last month, Islamists were at the heart of the fight, many as rebel commanders. Now some are clashing with secularists within the rebels’ Transitional National Council, prompting worries among some liberals that the Islamists — who still command the bulk of fighters and weapons — could use their strength to assert an even more dominant role.”

On Sept. 15, 2011, the New York Times published a similar article, entitled “Islamists’ Growing Sway Raises Questions for Libya.” It began: “In the emerging post-Qaddafi Libya, the most influential politician may well be Ali Sallabi, who has no formal title but commands broad respect as an Islamic scholar and populist orator who was instrumental in leading the mass uprising. The most powerful military leader is now Abdel Hakim Belhaj, the former leader of a hard-line group once believed to be aligned with Al Qaeda.”

Belhaj was previously the commander of the Libyan Islamic Fighting Group, which was associated with Al-Qaeda in the past, maintained training bases in Afghanistan before the 9/11 attacks, and was listed as a terrorist organization by the U.S. State Department.

Belhaj and the Libyan Islamic Fighting Group denied continued allegiance to Al-Qaeda, but Belhaj was captured during George W. Bush’s post-9/11 “war on terror” and was harshly interrogated by the CIA at a “black site” prison in Thailand before being handed over to Gaddafi’s government which imprisoned and – Belhaj claims – tortured him.

The Times reported that “Belhaj has become so much an insider lately that he is seeking to unseat Mahmoud Jabril, the American-trained economist who is the nominal prime minister of the interim government, after Mr. Jibril obliquely criticized the Islamists.”

The Times article by correspondents Rod Nordland and David D. Kirkpatrick also cited other signs of growing Islamist influence inside the Libyan rebel movement: “Islamist militias in Libya receive weapons and financing directly from foreign benefactors like Qatar; a Muslim Brotherhood figure, Abel al-Rajazk Abu Hajar, leads the Tripoli Municipal Governing Council, where Islamists are reportedly in the majority.”

It may be commendable that the Post and Times finally gave serious attention to this consequence of the NATO-backed “regime change” in Libya, but the fact that these premier American newspapers ignored the Islamist issue as well as doubts about Libya’s Lockerbie guilt – while the U.S. government was whipping up public support for another war in the Muslim world – raises questions about whether those news organizations primarily serve a propaganda function.

Gaddafi’s Brutal Demise

Even amid these warning signs that Libya was headed toward bloody anarchy, the excited MSM coverage of Libya remained mostly about the manhunt for “the madman” – Muammar Gaddafi. When rebels finally captured Gaddafi on Oct. 20, 2011, in the town of Sirte – and sodomized him with a knife before killing him – Secretary of State Clinton could barely contain her glee, joking in one interview: “We came, we saw, he died.”

The months of aerial slaughter of Gaddafi’s soldiers and Gaddafi’s own gruesome death seemed less amusing on Sept. 11, 2012, when Islamic terrorists overran the U.S. consulate in Benghazi, killing U.S. Ambassador Christopher Stevens and three other U.S. diplomatic personnel. In the two-plus years since, Libya has become a killing ground for rival militias, including some now affiliated with the Islamic State.

As the BBC reported on Feb. 24, 2015, the Islamic State “has gained a foothold in key towns and cities in the mostly lawless North African state [Libya], prompting Egypt – seeing itself as the bulwark against Islamists in region – to launch air strikes against the group. …

“IS has launched its most high-profile attacks in Libya, bombing an upmarket hotel in the capital, Tripoli, in January, and releasing a video earlier this month showing the beheading of 21 Egyptian Coptic Christians it had kidnapped. On 20 February, it killed at least 40 people in a suicide bombing in the eastern town of al-Qubbah.”

Now, the chaos that the U.S.-sponsored “regime change” unleashed has grown so horrific that it is causing desperate Libyans to climb into unseaworthy boats to escape the sharp edges of the Islamic State’s knives and other depredations resulting from the nationwide anarchy.

Thus, Libya should be a powerful lesson to Hillary Clinton, Samantha Power and the other R2Pers that often their schemes of armed “humanitarianism” can go badly awry and do much more harm than good. It should also be another reminder to the MSM to question the arguments presented by the U.S. government, rather than simply repeating those dubious claims and false narratives.

But neither seems to be happening. The “liberal interventionists” – like their neoconservative allies – remain unchastened, still pumping for more “regime change” wars, such as in Syria. Yet, many of these moral purists are silent about the slaughter of ethnic Russians in eastern Ukraine, Palestinians in Gaza, or now Houthis and other Yemenis dying under Saudi bombs in Yemen.

It appears the well-placed R2Pers in the Obama administration are selective in where that “responsibility to protect” applies.

Samantha Power, now serving as U.S. ambassador to the UN, remains the same self-righteous scold denouncing human rights abuses in places where there are American-designated “bad guys” while looking the other way in places where the killing is being done by U.S. “allies.” As for Hillary Clinton, she is already being touted as the presumptive Democratic nominee for President.

Meanwhile, the MSM has conveniently forgotten its own propaganda role in revving up the war on Libya in 2011. So, instead of self-reflection and self-criticism, the mainstream U.S. media is filled with condemnations of the Europeans for their failure to respond properly to the crisis of some 900 Libyans apparently drowning in a desperate attempt to flee their disintegrating country.

~

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

April 21, 2015 Posted by | Mainstream Media, Warmongering, Timeless or most popular | , , , , , , , , | Leave a comment

Monsanto knew of glyphosate / cancer link 35 years ago

GM-Free Cymru | April 8, 2015

According to evidence unearthed from the archives of the EPA (Environmental Protection Agency) in the United States, it has been established that Monsanto was fully aware of the potential of glyphosate to cause cancer in mammals as long ago as 1981.

Recently the WHO’s International Agency for Research on Cancer (IARC) issued a statement in which glyphosate (the main component of Roundup herbicide) was classified as “probably carcinogenic” to humans and as “sufficiently demonstrated” for genotoxicity in animals (1). This announcement of a change to toxicity class 2A was given vast coverage in the global media, causing Monsanto to move immediately into damage limitation mode. The corporation demanded the retraction of the report, although it has not yet been published! Predictably, there was more fury from the industry-led Glyphosate Task Force (2). This Task Force also sponsored a “rebuttal” review article (3) from a team of writers with strong links with the biotechnology industry; but because of the clear bias demonstrated in this paper (which suggests that glyphosate has no carcinogenic potential in humans) it is best ignored until it has been carefully scrutinized by independent researchers (4).

With Monsanto continuing to protest that glyphosate and Roundup are effectively harmless (5) if used according to instructions, in spite of accumulating evidence to the contrary, we undertook a search through Environmental Protection Agency (EPA) records with a view to finding out what was known about glyphosate at the time of its initial registration. This followed up earlier investigations by Sustainable Pulse which highlighted a sudden change in the EPA view on toxicity in 1991. What was discovered was very revealing. There were many animal experiments (using rats, mice and dogs) designed to test the acute and chronic toxicity of glyphosate in the period 1978-1986, conducted by laboratories such as Bio/dynamics Inc for Monsanto and submitted for EPA consideration. Two of these reports relate to a three-generation reproduction study in rats (6) (7), and another is called “A Lifetime Feeding Study Of Glyphosate In Rats” (8); but like all the other older studies they were and still are treated as Trade Secrets and cannot be freely accessed for independent scrutiny. That in itself is suggestive that the studies contain data which Monsanto still does not wish to be examined by experts in the toxicology field. It is also deeply worrying that EPA acceded to the routine Monsanto requests for secrecy on the flimsiest of pretexts.

However, archived and accessible EPA Memos from the early 1980’s do give some indications as to what the rat studies contain (9). Although the studies predate the adoption of international test guidelines and GLP standards they suggest that there was significant damage to the kidneys of the rats in the 3-generational study — the incidence of tubular dilation in the kidney was higher in every treated group of rats when compared to controls. Tubular dilation and nephrosis was also accompanied by interstitial fibrosis in all test groups and in some of the lumens the researchers found amorphous material and cellular debris. Less than a third of the control rats showed signs of tubular dilation. In the rat study results, the changes in the bladder mucosa are significant because metabolites, concentrated by the kidneys, have led to hyperplasia that could be considered as a very early and necessary step in tumour initiation. EPA was worried in 1981 that these indications were sinister, and at first declined to issue a NOEL (no observed adverse effect level) — it asked for further information and additional research. In its 1982 Addendum, Monsanto presented evidence that minimised the effects and confused the data — and on that basis EPA accepted that glyphosate was unlikely to be dangerous. But Monsanto knew that scrutiny of the data in the studies would potentially threaten its commercial ambitions, and so it asked for the research documents concerned to be withheld and treated as Trade Secrets. So there was no effective independent scrutiny. Monsanto and EPA connived in keeping these documents away from unbiased expert assessment, in spite of the evidence of harm. (It is clear that EPA was thinking about carcinogenic effects — it knew in 1981 that glyphosate caused tumorigenic growth and kidney disease but dismissed the finding as “a mystery” in order to set the NOEL for the chemical and bring it to market.)

In the rat studies, the glyphosate doses fed to the test groups were 1/100 of those used in a later mouse study (9). It is unclear why these very small doses were decided upon by Monsanto and accepted by EPA, since there must be a suspicion that the studies were manipulated or designed to avoid signs of organ damage. In its 1986 Memo, EPA remarked on the very low doses, and said that no dose tested was anywhere near the “maximally tolerated dose.” Then the Oncogenicity Peer Review Committee said: “At doses close to an MTD, tumours might have been induced.” A repeat rat study was asked for. However, BioDynamics (which conducted the research for Monsanto) used data from three unrelated studies, which they conducted in house, as historical controls to create “experimental noise” and to diminish the importance of the results obtained by experiment.

In a 1983 mouse study conducted by Bio/dynamics Inc for Monsanto (10), there was a slight increase in the incidence of renal tubular adenomas (benign tumours) in males at the highest dose tested. Malignant tumours were found in the higher dose group. However, “it was the judgment of two reviewing pathologists that the renal tumors were not treatment-related”. Other effects included centrilobular hypertrophy and necrosis of hepatocytes, chronic interstitial nephritis, and proximal tubule epithelial cell basophilia and hypertrophy in females. The EPA committee determined there was a “weak oncogenic response” — so evidence was suggestive of early malignancy. The EPA Science Advisory Panel was asked for advice, and they said the data were equivocal and called for further studies in mice and rats. A further report was delivered in 1985. Part of the reason for this dithering was the prevalent but false EPA belief that all physiological effects had to be dose-related: namely, the higher the dose, the greater the effect.

Even though pre-cancerous conditions were imperfectly understood 35 years ago, and cortical adenomas in kidney were not thought dangerous at the time, the evidence from the Memos is that Monsanto, BioDynamics Inc and the EPA Committees involved were fully aware, probably before 1981, of the carcinogenic potential of glyphosate when fed to mammals. In the Memos there are references to many more “secret” animal experiments and data reviews, which simply served to confuse the regulators with additional conflicting data. Thus EPA publicly accepted the safety assurances of the Monsanto Chief of Product Safety, Robert W. Street, and the status of the product was confirmed for use in the field (11). But behind the scenes, according to a later EPA memo (in 1991), its own experts knew before 1985 that glyphosate causes pancreatic, thyroid and kidney tumors.

On the EPA website (last updated 31.10.2014) reference is made to five Monsanto studies of 1980 – 1985, and it is noteworthy that these studies have not been made public in the light of current knowledge about malignant tumours and pre-cancerous conditions (12). Neither have they been revisited or reinterpreted by Monsanto and EPA, although one 1981 rat study and one 1983 mouse study are mentioned in the recent review by Greim et al (2015) (3). Following the conclusion that glyphosate was “not classifiable as to human carcinogenicity” nothing in the EPA advice about this chemical has changed since 1990. Given the recent assessment by the WHO Panel, and given the flood of scientific papers relating to health damage associated with glyphosate (13) the EPA attitude smacks of complacency and even incompetence.

Speaking for GM-Free Cymru, Dr Brian John says: “The evidence shows that by 1981 both Monsanto and the EPA were aware of malignant tumours and pre-cancerous conditions in the test animals which were fed small doses of glyphosate in the secret feeding experiments. Although concerns were expressed at the time by EPA committees, these concerns were later suppressed under the weight of conflicting evidence brought forward by Monsanto, some of it involving the inappropriate use of historical control data of dubious quality. None of these studies is available for independent examination (14). That is a scandal in itself. There has been a protracted and cynical cover-up in this matter (15). Glyphosate is a “probable human carcinogen”, as now confirmed by the WHO Working Group, and no matter what protestations may now come from Monsanto and the EPA, they have been fully aware of its potential to cause cancer for at least 35 years. If they had acted in a precautionary fashion back then, instead of turning a blind eye to scientific malpractice (16), glyphosate would never have been licensed, and thousands of lives might have been saved.”

Retired Academic Pathologist Dr Stanley Ewen says: “Glyphosate has been implicated in human carcinogenesis by IARC and it is remarkable that, as early as 1981, glyphosate was noted to be associated with pre neoplastic changes in experimental mice. This finding was never revealed by the regulatory process and one might therefore expect to see human malignancy increasing on the record in the ensuing years. John Little (personal communication) has demonstrated an unexpected and alarming 56% upsurge in malignancy in England in those under 65 in the past 10 years. Presumably British urinary excretion of glyphosate is similar to the documented urine levels in Germany, and therefore everyone is at risk. The effect of glyphosate on endocrine tissue such as breast and prostate, or even placenta, is disruptive at least and an increased incidence of endocrine neoplasia is likely to be seen in National Statistics. The Glyphosate Task Force denies the involvement of glyphosate in human malignancy despite their knowledge of many reports of lymphomas and pituitary adenomas in experimental animals dosed with glyphosate. On the other hand, Prof. Don Huber at a recent meeting in the Palace of Westminster, has warned of severe consequences if rampant glyphosate consumption is not reined in. I feel sure that the suppression of the experimental results of 1981 has enhanced the global risk of malignancy.”

Toxico-pathologist Professor Vyvyan Howard says: “”The drive towards transparency in the testing of pharmaceuticals is gathering pace with legislation in the EU, USA and Canada being developed. All trials for licensed drugs will likely have to become available in the public domain. In my opinion the case with agrochemicals should be no different. At least with pharmaceuticals exposure is voluntary and under informed consent. There are several biomonitoring studies which demonstrate that there is widespread exposure of human populations to glyphosate, presumably without informed consent. Given the clear level of mistrust over the licensing of this herbicide and the emerging epidemiological evidence of its negative effects there can, in my opinion, be no case whatsoever for keeping the toxicological studies, used to justify licencing, a secret. They should be put in the public domain.”

Research scientist Dr Anthony Samsel says: “Monsanto’s Trade Secret studies of glyphosate show significant incidence of cell tumors of the testes and tumorigenic growth in multiple organs and tissues. They also show significant interstitial fibrosis of the kidney including effects in particular to the Pituitary gland, mammary glands, liver, and skin. Glyphosate has significant effects to the lungs indicative of chronic respiratory disease. Glyphosate has an inverse dose response relationship, and it appears that its effects are highly pH dependent. Both Monsanto and the EPA knew of the deleterious effects of this chemical in 1980 at the conclusion of their multiple long-term assessments, but the EPA hid the results of their findings as “trade secrets.” Monsanto has been lying and covering up the truth about glyphosate’s harmful effects on public health and the environment for decades. The increases in multiple chronic diseases, seen since its introduction into the food supply, continue to rise in step with its use. Monsanto’s Roundup glyphosate based herbicides have a ubiquitous presence as residues in the food supply directly associated with its crop use. Nations must stand together against Monsanto and other chemical companies who continue to destroy the biosphere. We are all part of that biosphere and we are all connected. What affects one affects us all.”

NOTES

(1) Carcinogenicity of tetrachlorvinphos, parathion, malathion, diazinon, and glyphosate (2015)
Kathryn Z Guyton, Dana Loomis, Yann Grosse, Fatiha El Ghissassi, Lamia Benbrahim-Tallaa, Neela Guha, Chiara Scoccianti, Heidi Mattock, Kurt Straif, on behalf of the International Agency for Research on Cancer Monograph Working Group, IARC, Lyon, France
Lancet Oncol 2015. Published Online March 20, 2015 http://dx.doi.org/10.1016/ S1470-2045(15)70134-8
International Agency for Research on Cancer 16 Volume 112: Some organophosphate insecticides and herbicides: tetrachlorvinphos, parathion, malathion, diazinon and glyphosate. IARC Working Group. Lyon; 3–10 March 2015. IARC Monogr Eval Carcinog Risk Chem Hum (in press).

(2) Monsanto seeks retraction for report linking herbicide to cancer
By Carey Gillam, Reuters
http://www.reuters.com/article/2015/03/24/us-monsanto-herbicide-idUSKBN0MK2GF20150324
The response by the pesticide industry association, the Glyphosate Task Force, is here:
http://www.wmcactionnews5.com/story/28574811/statement-of-the-gtf-on-the-recent-iarc-decision-concerning-glyphosate

(3) Helmut Greim, David Saltmiras, Volker Mostert, and Christian Strupp (2015) REVIEW ARTICLE: Evaluation of carcinogenic potential of the herbicide glyphosate, drawing on tumor incidence data from fourteen chronic/carcinogenicity rodent studies. Crit Rev Toxicol, 2015; Early Online: 1–24 DOI: 10.3109/10408444.2014.1003423

(4) Not only is this paper written by authors who have strong industry links, but the 14 carcinogenicity studies assessed are carefully selected industry studies which have not been peer-reviewed and published in mainstream scientific journals. All of the studies were conducted for clients (like Monsanto) who would have experienced gigantic commercial repercussions if anything “inconvenient” had been reported upon, with glyphosate already in use across the world. Therefore the possibility of fraud and data manipulation cannot be ruled out. The 14 studies are all secret, and cannot be examined by independent toxicology experts. The fact that the review article in question reproduces (as online supplementary material) a series of tables and data sets is immaterial, since the data are useless in the absence of clear explanations of the laboratory protocols and practices of the research teams involved.

(5) http://www.monsanto.com/glyphosate/pages/is-glyphosate-safe.aspx

(6) “A Three-Generation Reproduction Study in Rats with Glyphosate” (Final Report; Bio/dynamics Project No. 77-2063; March 31, 1981) — submitted by Monsanto to EPA

(7) “Addendum to Pathology Report for a Three-Generation Reproduction Study in Rats with Glyphosate. R.D. #374; Special Report MSL-1724; July 6, 1982″ EPA Registration No 524-308, Action Code 401. Accession No 247793. CASWELL#661A” — submitted by Monsanto to EPA

(8) “A Lifetime Feeding Study Of Glyphosate In Rats” (Report by GR Lankas and GK Hogan from Bio/dynamics for Monsanto. Project #77-2062, 1981: MRID 00093879) — submitted by Monsanto to EPA
and Addendum Report #77-2063

(9) Archived EPA memos from 1982 and 1986:
http://www.epa.gov/pesticides/chemicalsearch/chemical/foia/cleared-reviews/reviews/103601/103601-135.pdf
http://www.epa.gov/pesticides/chemicalsearch/chemical/foia/cleared-reviews/reviews/103601/103601-210.pdf
The 1991 EPA Memo is accessible via:
http://sustainablepulse.com/2015/03/26/who-glyphosate-report-ends-thirty-year-cancer-cover-up/#.VSVPZ2Z3bJk

(10) Knezevich, AL and Hogan, GK (1983) “A Chronic Feeding study of Glyphosate (Roundup Technical) in Mice”. Project No 77-2061. Bio/dynamics Inc for Monsanto. Accession No #251007-251014 — document not available but cited in EPA 1986 Memo.
Follow-up study: McConnel, R. “A chronic feeding study of glyphosate (Roundup technical) in mice: pathology report on additional kidney sections”. Unpublished project no. 77-2061A, 1985, submitted to EPA by BioDynamics, Inc.

(11) Glyphosate was first registered for use by the United States Environmental Protection Agency (U.S. EPA) in 1974, and after various reviews reregistration was completed in 1993.
Glyphosate (CASRN 1071-83-6)
Classification — D (not classifiable as to human carcinogenicity)
Basis — Inadequate evidence for oncogenicity in animals. Glyphosate was originally classified as C, possible human carcinogen, on the basis of increased incidence of renal tumors in mice. Following independent review of the slides the classification was changed to D on the basis of a lack of statistical significance and uncertainty as to a treatment-related effect.
http://www.epa.gov/iris/subst/0057.htm
http://sustainablepulse.com/2015/03/26/who-glyphosate-report-ends-thirty-year-cancer-cover-up/
npic.orst.edu/factsheets/glyphotech.pdf

(12) Monsanto Company. 1981a. MRID No. 0081674, 00105995. Available from EPA. Write to FOI, EPA, Washington, DC 20460.
Monsanto Company. 1981b. MRID No. 00093879. Available from EPA. Write to FOI, EPA, Washington, DC 20460.
Monsanto Company. 1985. MRID No. 00153374. Available from EPA. Write to FOI, EPA, Washington, DC 20460.
Monsanto Company. 1980a. MRID No. 00046362. Available from EPA. Write to FOI, EPA, Washington, DC 20460.
Monsanto Company. 1980b. MRID No. 00046363. Available from EPA. Write to FOI, EPA, Washington, DC 20460.

(13) http://www.i-sis.org.uk/Scandal_of_Glyphosate_Reassessment_in_Europe.php
http://permaculturenews.org/2012/11/01/why-glyphosate-should-be-banned-a-review-of-its-hazards-to-health-and-the-environment/
Key studies showing toxic effects of glyphosate and Roundup. Ch 4 in GMO Myths and Truths
http://earthopensource.org/earth-open-source-reports/gmo-myths-and-truths-2nd-edition/
Antoniou, M. et al. Teratogenic Effects of Glyphosate-Based Herbicides: Divergence of Regulatory Decisions from Scientific Evidence J Environ Anal Toxicol 2012, S:4
http://dx.doi.org/10.4172/2161-0525.S4-006
http://www.earthopensource.org/files/pdfs/Roundup-and-birth-defects/RoundupandBirthDefectsv5.pdf

(14) That having been said, Monsanto has allowed access to selected later reports to selected researchers (Greim et al, 2015). It is still uncertain whether these selected reports are available in full, for detailed independent scrutiny — even though there can now be no possible justification for “trade secret” designation, following the lapse of the US glyphosate patent in 2000.

(15) http://sustainablepulse.com/2015/03/26/who-glyphosate-report-ends-thirty-year-cancer-cover-up/
In 1985 the carcinogenic potential of glyphosate was first considered by an EPA panel, called the Toxicology Branch Ad Hoc Committee. The Committee then classified glyphosate as a Class C Carcinogen on the basis of its carcinogenic potential. This classification was changed by the EPA in 1991 to a Class E category on the basis of “evidence of non-carcinogenicity for humans”. Mysteriously this change in glyphosate’s classification occurred during the same period that Monsanto was developing its first Roundup-Ready (glyphosate-resistant) GM Crops. Not for the first time, commercial considerations were allowed to trump public health concerns.
The EPA scale of cancer-forming potential of substances:
Group A: Carcinogenic to humans
Group B: Likely to be carcinogenic to humans
Group C: Suggestive evidence of carcinogenic potential
Group D: Inadequate information to assess carcinogenic potential
Group E: Not likely to be carcinogenic to humans

(16) Wikipedia 2012: Internal EPA Memos Document Fraud
1983 EPA Scientist on EPA’s public stance: “Our viewpoint is one of protecting the public health when we see suspicious data.” Unfortunately, EPA has not taken that conservative viewpoint in its assessment of glyphosate’s cancer causing potential.”
“There are no studies available to NCAP evaluating the carcinogenicity of Roundup or other glyphosate-containing products. Without such tests, the carcinogenicity of glyphosate-containing products is unknown.”
“Tests done on glyphosate to meet registration requirements have been associated with fraudulent practices.”
“Countless deaths of rats & mice are not reported.”
“Data tables have been fabricated”
“There is a routine falsification of data”

April 21, 2015 Posted by | Science and Pseudo-Science, Corruption, Deception, Timeless or most popular | , , , , , | Leave a comment

Hillary Remains Clueless About Regulation on the 28th Anniversary of the Keating Five Meeting

By William K. Black | New Economic Perspectives | April 9, 2015

The Clintons’ Unlearned Lessons of the Keating Five Meeting

On April 9, 1987, twenty-eight years ago today, my colleagues and I from the Federal Home Loan Bank of San Francisco (FHLBSF) met with five senators at the behest of the most notorious savings and loan (S&L) fraud – Charles Keating. Keating was looting Lincoln Savings through classic “accounting control fraud” techniques. Our examiners and enforcement investigation led by Anne Sobol (detailed from Litigation Division) had discovered and documented some of Keating’s worst frauds. Keating, desperate to prevent our recommendation that the federal agency place Lincoln Saving into conservators (removing Keating from power), used the five senators to try to pressure us into taking no enforcement action against Lincoln Savings and its officers for the largest violation of rules in the history of our agency.

The agency’s statutory authority to place a state-chartered S&L like Lincoln Savings into conservatorship had lapsed so Bank Board Chairman Edwin Gray could not act on our recommendation until Congress passed legislation restoring our power. The five Senators, of course, would have a great deal to say about whether and when that legislation was passed. Because we refused to give in to their intimidation, the Keating Five helped ensure that the power to remove Keating from power was not passed until after Gray’s term ended – and President Reagan’s cynical secret deal with Speaker of the House James Wright ensured that Reagan would not reappoint Gray.

Gray’s successor, M. Danny Wall, was a Republican political staffer whose boss, Senator Jake Gran, after a single meeting with Keating had his number and refused to ever meet with him again. But the lesson Wall took from seeing Gray reduced to roadkill at the hands of Speaker Wright and the Keating Five was to never block the road when powerful thieves and their political cronies are racing down that road and eager to run you over.

Wall first took the unprecedented step of removing our (the FHLBSF) jurisdiction over Lincoln Savings and gave Keating a sweetheart deal. Wall’s critical, Neville Chamberlain-like order to his senior staff to reach an “amicable resolution” with Keating (which, given Keating, meant “surrender”) occurred immediately after a meeting with Keating. Wall’s meeting with Keating, in turn, occurred immediately after Keating met with Senator Glenn and Speaker Wright. Keating and Wright used their after-lunch meeting to plot how to get me fired and sued. Keating hired private investigators twice that we know of to try to find dirt on me.  Fortunately, I live a very Midwestern personal life. Keating eventually sued me for $400 million.

Keating, being Keating, started his meeting with Wall by noting that he had just met with Speaker Wright and Senator Glenn. Keating was capable of being subtle, but he preferred smash mouth football, so his next line, referring to the Speaker, was that “There’s someone you would have much better relationships with if you took care of your red-headed lawyer in San Francisco.” I still had bright red hair (and beard) at that time.

After getting rid (he thought) of the accursed FHLBSF regulators, Wall proceeded to force Joe Selby, the Nation’s most respected financial regulator, to resign as our top supervisor for Texas.  Selby’s sin was being a vigorous regulator. The Texas frauds targeted him for removal and successfully enlisted Speaker Wright’s enthusiastic support through contributions and by telling Wright that Selby was gay. Bank Board Chairman Gray, who personally recruited Selby and Mike Patriarca because of their reputations as the Nation’s best financial regulators, had placed Selby and Patriarca in charge of the two states with the worst fraud problems (Texas and California). Wall, while still a congressional aide, had urged Gray to fire Selby to placate the Speaker. Gray refused. Wall now publicly took “credit” for forcing Selby to resign or be fired.  Within months, Wall had removed or sidelined the Nation’s best financial regulators.

Keating’s successful extortion of Wall to remove the FHLBSF’s jurisdiction over Lincoln Savings did not work out well for Wall and the Keating Five for Keating used the sweetheart deal to intensify his looting of Lincoln Savings and its customers which led it to become the most expensive financial institution failure in U.S. history (at what now seems a quaint $3.4 billion), to sell worthless (and uninsured) junk bonds of Lincoln Savings’ insolvent holding company, and to target tens of thousands of widows for those sales. My extensive notes of the Keating Five meeting led to a Senate ethics investigation of the Keating Five. The Democratic Party Senate Committee colleagues on that investigation spent most of their energy attacking us, the regulators, for the high crime of criticizing Senators for aiding the Nation’s most notorious fraud loot the S&L and rip off widows. (Senators Cranston, Riegle, Glenn, and DeConcini were Democrats. Senator McCain was the lone Republican.)

The type of violations we had documented were invariably fatal. Keating had recruited the Keating Five through political contributions and through hiring Alan Greenspan as a lobbyist. Greenspan also served Keating as his outside economist to attempt to prevent the agency from adopting effective regulations to restrain looting by the Keatings of the world. In that capacity Greenspan had famously claimed that Lincoln Savings posed no foreseeable risk of loss to the FSLIC insurance fund.  Greenspan was slightly (as in 180º) off as I just explained.

But here’s the thing – given their ages, the lessons of the S&L debacle should have been the formative experiences for everyone involved in the most recent crisis. Wall resigned in disgrace in December 1989 after months of House hearings. The Senate ethics committee hearings on the “Keating Five” took place in 1990 and 1991.

“These [Senate ethics committee] hearings would take place from November 15 through January 16, 1991.[31] They were held in the Hart Senate Office Building‘s largest hearing room.[51] They were broadcast live in their entirety by C-SPAN, with CNN and the network news programs showing segments of the testimonies.[51] At the opening of the hearings, as The Washington Post would later write, ‘the senators sat dourly alongside one another in a long row, a visual suggestive of co-defendants in a rogues’ docket.’[52] Overall, McCain would later write, ‘The hearings were a public humiliation.’[51]

The committee reported on the other four senators in February 1991, but delayed its final report on Cranston until November 1991.”

Greenspan’s role was discussed in both the House and Senate hearings.

“Progressives” tend to roll their eyes in disgust at the entire “Whitewater” investigation, but two points are worth noting in terms of what the scandal should have taught the Clintons and their appointees. First, James McDougall, the CEO, looted Madison Guaranty through classic accounting control fraud techniques. (He was acquitted by a jury of one series of alleged bank frauds and convicted subsequently of other band frauds.)

James Clark, the Bank Board examiner-in-charge (EIC) of the 1986 examination of Madison Guaranty, testified in front of Congress about McDougall’s domination of the S&L and his massive multiple frauds. Clark’s testimony is devastating.

Second, McDougall’s frauds were made possible by the criminogenic environment created by the three “de’s” – deregulation, desupervision, and de facto decriminalization – and McDougall was brought to book when the regulators and prosecutors learned their lessons and got rid of the three “de’s.” The FSLIC was appointed the conservator for Madison Guaranty in February 1989.

Then first lady Hillary Clinton received substantial adverse publicity about her role not simply as an investor with but also as an attorney for the S&L.  She and her husband were publicly humiliated by the sex aspects of the investigation. Both Clintons, therefore, would logically have come out of the experience with a strong appreciation of how dangerous accounting control frauds are, why bank CEOs pose by far the greatest risk of fraud and do so through accounting fraud techniques (the fraud “recipe” for a lender) that require the lender to intentionally make large numbers of bad loans. This, in turn, requires the CEO to suborn the underwriting and internal controls. The Clintons should have had an acute appreciation of how critical underwriting is to avoiding banking crises. They observed first hand that the S&L debacle was driven by an epidemic of accounting control fraud.

Bill Clinton announced his candidacy for the Democratic Party’s nomination for President on October 2, 1991 – while the Senate Ethics committee was still wrapping up its investigation of the Keating Five. The S&L debacle was the defining scandal of the Clinton’s era and it was fresh in their minds as they made the run for the nomination and the presidency. We were convicting several hundred banksters and their cronies annually as Clinton prepared to run and actually ran his first campaign for the nomination and the presidency.

The same logic applies to Greenspan. He had to read our examination report and my report on why Lincoln Savings would be a disaster. My report emphasized the key role of its deliberately pathetic underwriting. Similarly, our presentation to the Keating Five emphasized the non-existent nature of Lincoln Savings’ underwriting on multi-million dollar loans. This was reprised in our testimony before the House and the Senate about Keating’s looting of Lincoln Savings.

But we know what the Clintons, their appointees, and Greenspan (originally a Bush I appointee) learned from the S&L debacle – nothing, or worse than nothing. Greenspan told the sycophantic author of Maestro that he would have done, said, and wrote the same things for Keating now that he did then based on the “facts.” I discuss later Greenspan’s actual approach to the “facts.”

Clinton’s Goal: Destroy the “Culture of Regulation”

But the Clintons and their bankster allies learned something far worse – the need to push the three “de’s” to ensure that never again would banksters and their political cronies be prevented from looting “their” banks or be held accountable for their looting. Bill Clinton, in his first major meeting with financial regulators (from the Office of the Comptroller of the Currency (OCC)) as President, chose to make these revealing remarks. One part of government most upset Clinton – the examiners who checked for threats to the safety and soundness of banks and businesses.

“The federal government to many people is not the President of the United States, it’s the person who shows up on the doorstep to check out the bank records, or the safety in the factory, or the integrity of the workplace, or how the nursing home is being run. I believe that we have a serious obligation in this administration to work with the Congress to reduce the burden of regulation and to increase the protection to the public. And we have an obligation on our own to do what we can to change the destructive elements of the culture of regulation that has built up over time….”

The federal examiners that expose the banks, workplaces, and nursing homes that engage in fraud or abuse provide a vital and unique service not only to the public, but also to honest competitors by blocking the “Gresham’s” dynamic that “control fraud” produces (bad ethics drives good ethics out of the markets). Clinton, however, is unaware of this dynamic. This type of regulation does not (net) “burden” honest businesses – it makes it possible for them compete by relieving them of the impossible burden of competing with control frauds. Clinton sees regulation not as episodically failing, but as the inherently flawed product of a “destructive” “culture of regulation.”  He started the process that replaced a “culture of regulation” with what even the anti-regulators now concede is the “culture of corruption” that dominates Wall Street and the City of London.

Clinton then singled out the worst examiners – bank regulators.

“When I was out in New Hampshire in 1992, I heard more grief about the regulation of the private sector by the Comptroller of the Currency than any other single thing. And now every time I go to New England, they say, we’re making money, we’re making loans, and we can function, because we finally got somebody down there in Washington who understands how to have responsible and safe banking regulations, and still promote economic growth. I hear it every time I go up there, and I thank you, sir, for what you’ve done on that. (Applause.)”

Vice-President Gore had already praised the OCC head, Gene Ludwig, for embracing the three “de’s.” Gore was particularly impressed that the bankers’ lobbyists were praising Ludwig. Readers will vary on what they infer from that praise, but Gore thought the only possible inference was that Ludwig’s deregulatory policies were superb.  When the bank lobbyists are praising you as a financial regulator you know you are on a path to disaster for the industry and the public. Bank lobbyists do not represent the interests of “banks” or their shareholders. They represent the interests of the banks’ controlling officers and when those CEOs create a culture of corruption the lobbyists will push policies that will make it easy for the CEOs’ to loot “their” banks with impunity through the “sure thing” of accounting control fraud.

Clinton launched an unholy war against effective financial regulation. He began the process, and bragged about, the massive cuts in the FDIC staff that eventually (Bush made it worse) led to the FDIC losing over three-quarters of its total staff and the OTS over half of its staff. FBI agents were reassigned from prosecuting the S&L frauds and such prosecutions largely ended in 1993. Clinton’s “reinventers” ordered us to refer to the industry as our “customer” and to treat them as if they were our “customer.”  Clinton’s reinventers eliminated the most important rule – the underwriting rule. They replaced it with a deliberately unenforceable “guideline” that was exceptionally criminogenic and would greatly intensify the epidemic of liar’s loans. This rule change was actually far more damaging than the more infamous statutory acts of deregulation that Bill Clinton, Rubin, and Greenspan pushed in order to essentially repeal the Glass-Steagall Act and pass the Commodities Futures Modernization Act of 2000 to not only kill Brooksley Born’s effort to protect the Nation and the world from financial derivatives, but ensure that no regulator in America would have any ability to regulate effectively massive classes of derivatives.

Clinton’s key economic appointees, and Gore, were fervent proponents of the three “de’s.” They came from banking and represented the interests not of banks, but of the banksters. Robert Rubin, the former head of Goldman Sachs and Clinton’s Treasury Secretary exemplified the bankster representing the interests of his peers. In particular, they pushed the global regulatory “race to the bottom” – warning that any effective financial regulation would drive the bankers to relocate to the City of London.

While anyone open to reality would have learned the grave dangers of the three “de’s” and the enormous value of effective regulation, there were three excellent reasons for the Clinton/Gore administration to be closed to reality and to embrace the three “de’s” and the banksters. First, it is not pleasant to be the subject of a government investigation and a conservatorship for your friend, business partner, and legal client’s S&L. It is perfectly human to react by being enraged at regulators. It was effective banking examiners who stopped McDougall’s frauds, conducted the bulk of the investigations that led to McDougall being convicted, and led to the exposure of the “Whitewater” “scandal.” From the Clintons’ perspective, that represented “Strike One, Strike Two, Strike Three – You’re Out!”

Second, the Clintons and Gore were leaders of the Democratic Leadership Council (DLC). The DLC’s creed was that the three “de’s” were divinely inspired. It was revealing that Clinton chose Gore as his running mate. Gore provided neither geographic nor ideological diversity to the ticket. Clinton did not want ideological diversity. He wanted a loyal junior partner who shared his disdain for regulators. It would require unusual independence of thought for Clinton and Gore, in their moment of electoral triumph, to say: “we’ve been observing the S&L debacle and thinking hard about its implications for our anti-regulatory policies and we have been forced to conclude that the DLC dogmas we have long championed about the virtues of the three ‘de’s’ are not simply incorrect but dangerous to the Nation.” Humans are more likely to do what Clinton and Gore did – religiously ignore the lessons of the S&L debacle and surround themselves with zealous advocates of the three “de’s.”

Third, the DLC had a special place in its heart for big finance. Big finance had the big money to make contributions, but it also had CEOs who were often at least moderate on social issues. These big contributors had been there in the DLC’s corner since its founding in 1985. How likely was it that Clinton and Gore, its two greatest DLC beneficiaries, would turn on big finance in their moment of triumph?

Hillary Clinton Learned the Same Perverse Lessons as Bill about Financial Regulation

I thank Samantha Lachman for her April 9, 2015 column entitled “As Clinton Tries To Win Over Progressives, She Might Want To Distance Herself From This Economic Adviser.” I hope that my column will not seem too harsh, but I feel the need to point out the key ways in which my analysis differs from Lachman’s – each of which adds to her thesis.

Lachman’s column explains that Hillary Clinton chose Robert Hormats as one of her most prominent economic advisors. Lachman points out that Hormats is a rabid deficit (and war) hawk, wants to cut the safety net, supports the faux “free trade” agreements that the Rubin-wing of the Democratic Party constantly seeks to inflict on the Nation, and favors aggressive deregulation. Lachman warns that this will cause progressives to wonder whether they should support Hillary Clinton. Lachman’s sole substantive argument against Hormats’ support for deregulation is that if she were to adopt his policy recommendations it would inhibit efforts were H. Clinton to be elected to reduce inequality.

“Hormats, who was the undersecretary for economic, energy and environmental affairs from 2009 to 2013, has advocated for the deregulatory approach that was begun by the Reagan administration and continued by former President Bill Clinton. Progressives say this deregulatory strategy contributed to widening income inequality….”

Lachman is correct about the content of Hormats’ policy positions. But here are the key factors I would urge readers (and potential campaign supporters and voters) to consider that arise from these positions.

  1. The problem with Hormats is not that he will upset “progressives.” The problem is that he is incompetent, dishonest, and supports policies that have devastated and will continue to devastate our Nation and the people of the world. Hormats has been wrong on every important economic issue – for decades. That should upset everyone regardless of their politics.

The insoluble problem is that every time Hormats’ policies cause a disaster and his dogmas are falsified he doubles-down on his failures. He does so because he is so dogmatic and intellectually dishonest that he refuses to learn from even his most catastrophic mistakes – and because his policy disasters enrich him and his peers – the elite banksters.

The enormous problem with Hormats’ policies is not that his policies “contributed to widening income inequality” (though they did) – but that they blew up the financial system, our Nation’s economy, and the global economy. In the U.S. 9.3 million Americans lost their jobs and roughly six million jobs that would have been created absent the Great Recession were not created. The leading economic estimate is that the U.S. will lose $24 trillion in GDP as a result. The job and GDP losses are far larger in Europe due to the insanity of self-inflicted austerity. If Hormats had been able to secure his desire to inflict austerity on America our job and GDP losses would have at least doubled.

Worse, Hormats’ policies blew up the financial system because they made it so “criminogenic” that it produced the three great fraud epidemics by bankers (appraisal, “liar’s” loans, and secondary market fraud) that hyper-inflated the bubble and caused the catastrophic fraud losses that drove the financial crisis.

Worse still, while he had a front row seat to these frauds epidemics as Goldman Sach’s Vice Chairman, he not only failed to warn the Nation about them but encouraged ever more criminogenic heapings of the three “de’s” – deregulation, desupervision, and de facto decriminalization.

And, still worse, Hormats continues to push for those same policies because while they were a catastrophic failure for our Nation and the world, they make him and his peers (many of them criminals) immensely wealthy – and will do so in the future when his policies again crush our Nation in an orgy of fraud by the banksters. Hormats doubtless supports (formal) legal civil rights (as opposed to the reality), which makes him a member in good standing of the Rubin-wing of the Democratic Party, but his economic policies are to the right of the UK Tories’ policies that Paul Krugman correctly eviscerates for their economic illiteracy.

I will discuss only two examples of Hormats’ incompetence as an economist, neither of which Lachman explores. First, he championed and aided the “Scandalous Seven.”

  1. Hormats’ continuing support for the three “de’s” and his support for President Clinton’s reappointment of Alan Greenspan and President Obama’s reappointment of Ben Bernanke to head the Fed. There are seven U.S. public officials who embraced the three “de’s” and are most culpable for creating and refusing to stop the criminogenic environment that produced the three most destructive epidemics of financial fraud in history. Those fraud epidemics hyper-inflated the bubbles, drove the financial crisis, and caused the Great Recession.  Clinton, Gore, Rubin (with a dishonorable mention to his protégé Larry Summers), Greenspan, President George W. Bush, Bernanke, and Timothy Geithner are the U.S. officials who failed so spectacularly in the run-up to the crisis that they deserve their inclusion on my list of the Scandalous Seven. I am talking here about the public sector. The elite bankers who led the fraud schemes are even more culpable for they were made wealthy by their fraud schemes.  

The terrible thing about the seven officials is that none of them had to be bribed in any overt fashion that could ever lead to even an investigation much less a prosecution. (The finance industry, of course, finds ways to richly reward its political cronies.) The Scandalous Seven felt wonderful about their actions in creating and then ignoring the criminogenic environment. Like Hormats, their embrace of the three “de’s” was open, not furtive. Three of the officials were Republicans and four were from the Rubin-wing of the Democratic Party. Geithner is a special case who became a nominal Rubin-Democrat to get his position as Treasury Secretary in the Obama administration.

Lachman’s discussion of the Hormats’ support for Greenspan and deregulation emphasizes that Greenspan “is loathed by progressives.”

“Similarly, in a discussion of whether former Federal Reserve Chairman Alan Greenspan should be reappointed by then-President George W. Bush, Hormats said Greenspan, who is loathed by progressives, had done ‘a terrific job.’

‘He enjoys respect on both Main Street and Wall Street,’ Hormats said. ‘In short, he’s really been one of the great financial leaders in American history.’

In the same conversation, Hormats argued that while Greenspan had facilitated a positive economic climate, other factors, including deregulation, were also responsible for private sector growth.

‘[Greenspan] has power, but what’s really driving this economy is the dramatic change that’s taking place in the private sector in this country,’ he continued. ‘We’ve had government deregulation, which has held.’”

A technical note, Lachman is quoting from an NPR transcript and the audio is no longer available on the web site. I suspect that the last word, “held,” should read “helped.”  Lachman does not explain why “progressives” loath Greenspan – or why such loathing should be limited to “progressives.” If “progressives” loath Greenspan for bad reasons then this represents a defect on their part, not a failure by Greenspan or Hormats. In the same interview Lachman is quoting, Robert Reich issued a vibrant endorsement of Greenspan’s reappointment by Clinton that included one of the funniest (unintentional) descriptions of Greenspan: “Alan Greenspan is a pragmatist, an empiricist.” When it came to regulation to stop the fraud epidemics, I show below that Greenspan was still Ayn Rand’s faithful cultist. He was dogmatic and rather than an “empiricist” he religiously refused to allow real data to be presented.

Here are the primary reasons Greenspan (and Bernanke) make my list of the Scandalous Seven.

  • The Fed had the unique authority under HOEPA (enacted in 1994 under Clinton) to ban all “liar’s” loans – regardless of whether they were originated by federally insured lenders. As the name implies, such loans were known to be pervasively fraudulent and it was known that lenders and loan brokers overwhelmingly put the lies in liar’s loans. Greenspan, and then Bernanke, refused to use this authority to stop an obvious, massive epidemic of “accounting control fraud. The FBI’s senior agent in charge of dealing with mortgage fraud, Chris Swecker, warned in September 2004 that there was an “epidemic” of mortgage fraud developing and predicted that it would cause a financial “crisis” – and Greenspan refused to stop the fraud epidemic. Greenspan’s colleague, Governor Gramlich, warned Greenspan of the developing epidemic of bad loans and urged him to send the Fed examiners in to the sleazy bank holding company affiliates that were pumping out hundreds of thousands of fraudulent loans. Greenspan refused not only to stop the fraudulent loans – he refused to send the examiners in to find the facts. When Richard Spillenkothen, the Fed’s top supervisor, requested to brief the full Fed board on the fact that every major bank involved with Enron had eagerly aided and abetted Enron’s accounting fraud and tax evasion the senior leadership of the Fed was enraged – at its supervisors! While Spillenkothen does not name individual names, this could not have occurred without Greenspan’s active support.

When another Fed supervisor, Sabeth Siddique, several years later presented the Fed board and Regional Bank Presidents with data from the Nation’s largest banks showing that they were moving massively into making loans that were known to be pervasively fraudulent and exceptionally likely to default the Fed split into a civil war in which the supervisor was subjected to “personal” attacks – for providing data from the banks to the Fed!

“Some people on the board and regional presidents . . . just wanted to come to a different answer. So they did ignore it, or the full thrust of it,” [Federal Reserve Governor Bies] told the Commission.

Within the Fed, the debate grew heated and emotional, Siddique recalled. “It got very personal,” he told the Commission. The ideological turf war lasted more than a year, while the number of nontraditional loans kept growing….” (FCIC 2011: 20-21).

This is significantly insane. The Fed leadership, under Greenspan and Bernanke, was so dogmatic and passionate in its hatred for regulation, supervision, enforcement, and prosecution and so rabid in its faith in “markets” and the inherent sainthood of financial CEOs that it conducted an unholy war against its own supervisors and reality.  Simply providing data from the industry to the leaders of your agency became a CLG for Fed supervisors (“career limiting gesture”).

It is important to recall four other matters in this context. We (OTS-West Region) figured out liar’s loans in 1991 – and drove them out of the S&L industry, which was the limits of our statutory powers (unlike the Fed after the passage of HOEPA in 1994). We got it right because unlike Greenspan and Bernanke we were reality-based regulators eager to get the facts. So we listened to our examiners (as we had in 1984 about prior epidemics of accounting control fraud). The loans were not yet called “liar’s” loans by the industry and there was very limited experience with “low documentation” loans but our examiners realized that failing to underwrite the borrower’s income had to lead to “adverse selection” and produce severe losses. We realized that only fraudulent CEOs running accounting control frauds would make liar’s loans.  Greenspan and Bernanke had no need to reinvent the supervisory wheel and the disastrous loss data on the 1990-1993 experience with liar’s loans was available to them.  Banning liar’s loans was one of the easiest calls any regulatory could make. There was zero upside to liar’s loans – they harmed every honest borrower.

The second fact is that Greenspan was no virgin when it came to accounting control fraud. As I explained above, Charles Keating, the most notorious S&L fraud, used him as a lobbyist to recruit the five U.S. Senators who became known as the “Keating Five” when they met with us on April 9, 1987.

The third fact is that in addition to the FBI’s 2004 warning that the developing mortgage fraud “epidemic” would cause a financial “crisis” if it were not stopped the appraisers had created an extraordinary warning in the form of a public petition explaining that fraudulent lenders were deliberately creating a “Gresham’s” dynamic (in which bad ethics drives good ethics from the markets and professions) by extorting appraisers’ to inflate the value of homes pledged as collateral – something only a fraudulent bank or loan broker officer would do. The following astonishing fact is revealed (but also buried) well into the report of the Financial Crisis Inquiry Commission (FCIC): “Swecker, the former FBI official, told the Commission he had no contact with banking regulators during his tenure” (FCIC 2011: 164, emphasis added). As a former financial regulator I am almost reduced to tears every time I read that sentence.

  1. Put yourself in the position of Greenspan, Bernanke, Geithner, and Bush – all in office when Swecker made his very public warnings in the media and his Congressional testimony in 2004. There is no possible excuse for their total refusal to act against a crime wave led by elite banksters. Worse, their obscene attacks on supervisors to prevent them from presenting these senior officials with the reality of the three raging fraud epidemics demonstrates that they were not simply cowards unwilling to stop a wave of crime by their powerful cronies. These four officials’ war on the facts was so intense because they knew that if they ever let reality intrude it would falsify their ideological dogmas and render disgraceful their slavish lifetime devotion to the banksters.

The fourth fact is that within months of Bernanke’s ascendancy to running the Fed he knew from the MARI/MBA report that the available data showed that 90% of liar’s loans were fraudulent. He refused to use HOEPA to ban liar’s loans.

  1. Greenspan also makes the list for his dogmatic position expressed to CFTC Chair Brooksley Born that preventing fraud was never a legitimate basis for regulation.
  1. The real problem is the Clintons.

First, H. Clinton chose Hormats – in 2009 – to be her key economic adviser at State at a time when, for the reasons I just explained, it was inescapable that he three “de’s” (championed by Hormats) had produced the three most damaging financial fraud epidemics in world history, destroyed the global financial system (it was resurrected only by massive public bailouts by the Treasury and the Fed), and caused the Great Recession.

Hormats was still pushing the three “de’s” under H. Clinton. She knew this before she recruited him to be one of her top lieutenants at State. Hormats proceeded to continue to shill for the three “de’s” at State – with no known reprimands from H. Clinton. As I have often noted, economics has the very useful concept of “revealed preferences.” Lachman’s focus is on Hormats’ revealed preferences, but the key is that we are observing H. Clinton’s true preference. She picked a known, serial incompetent who was a disaster in his supposed area of expertise (finance) and so dogmatic, intellectually dishonest, and dedicated to the interests of his fellow 1% that he continues to double-down on his failures. Lachman warns H. Clinton that to curry favor with progressives “She Might Want To Distance Herself From This Economic Adviser.” But that is not what any progressive should want. Progressives (and everyone else) should be demanding that she repudiate, not merely “distance herself from” Hormats’ dogmas. It does nothing good for the world if H. Clinton is able to deceive people by making it appear that she has ditched disastrous deregulatory dogmas by keeping Hormats at a “distance” while she actually maintains those same dogmas.

What H. Clinton should be doing, in alliance with Senator Warren, is leading the charge demanding that the Obama Administration honor the whistleblowers who made public the massive frauds by Citi, JPM, and Bank of America’s senior managers and prosecute the banksters. That would be great substantively for America and smart politics. The Clintons have been conspicuously silent about the banksters and the fraud epidemics they led that drove our crises. She could fix that in 15 minutes – if she wished to.

Second, as I explained above, the Clinton administration enthusiastically embraced the three “de’s” through the “Reinventing Government” movement. Al Gore led the charge. I have written about this extensively. Reinventing government was expressly designed not to prosecute elite corporate criminals. Yes, the Bush administration that followed was even worse, but it was Clinton who began what Tom Frank aptly terms The Wrecking Crew. I got out as a regulator when the “Reinventers” ordered us to refer to the industry we were supposed to regulate as our “customer” – and to treat banks and bankers as if they were “customers.” I personally witnessed this directive, and the administration’s chief goon in charge of its oxymoronic “Reinvention” proudly cites that directive as one of his top accomplishments and prints praise of his supposed bravery in insisting on that directive.

Hormats was not a powerful adviser to the Clinton administration. Bob Rubin, Goldman Sachs’ CEO, was the paramount adviser on economic matters. Hormats is simply one of dozens of Rubinites that infested the Clinton and Obama administrations. But blaming the three “de’s” on Rubin is unfair, for B. Clinton and Gore were sincerely and zealously committed to deregulation, desupervision, and the de facto decriminalization of elite white-collar crime. Neither was seduced by Rubin. H. Clinton knows as much as any person alive about the Rubinites’ pathologies. She recruited Hormats because he was a Rubinite, not because he deceived her.

At one point, all six of Obama’s most senior economic advisers where Rubinites. (They are still overwhelmingly Rubinites.) Obama and H. Clinton have chosen Rubinites as their dominant economic advisers not through some sinister, secret infiltration engineered by Rubin, but because Obama and the Clinton represent the Rubin-wing of the Democratic Party.

Third, H. Clinton chose Hormats as a top adviser not because of his “expertise” – she knows he has been consistently, horrifically wrong about every important economic policy issue on which he has opined in the last 20 years – but as a signal to the donors, the elite bankers. The signal is that I have always been with you and will always be with you, regardless of the bleating of the Democratic-wing of the Democratic Party.

I have explained Hormats’ incompetence when it came to regulation. I will add briefly related displays of incompetence in what he purports to be his fields of expertise.  First, he wants to cut the already inadequate safety net for the purpose of reducing budget deficits. Consider his testimony before the House Budget Committee on June 26, 2007. The setting was a friendly one. The Democrats controlling the Committee held a hearing to embarrass the Bush administration. The Democratic meme was that unlike virtuous Clinton, Bush had taken us deep into deficit – and much of our national debt was owed to the Chinese (cue dramatic, pulsating minor key music foreshadowing disaster). I know that many “progressives” would think that such a hearing was fantastic – good politics plus hoisting the Republican’s fiscal conservatives on their own petard.

I’ll simply refer readers to my colleagues’ explanations of why the “Red Peril” fearmongering is nonsense. It is terrible economics and Democrats shouldn’t try to score political points by spreading economic lies – even if the Democrats are right that the Republicans do so routinely.

I think that the hearing and Hormats’ testimony demonstrated the idiocy and dishonesty of many Democrats. Recall the date of the hearing – the U.S. was racing into the Great Recession. It officially began in the Fourth Quarter of 2007. By the time Hormats testified roughly five nonprime lenders were failing every week and housing prices had been falling for over a year in many markets. The U.S. needed to be running far larger federal budget deficits to begin to counter the coming recession. Instead, we had Hormats testifying that July 26, 2007 would be a great time for the U.S. to simultaneously “boost savings at home,” cut safety net payments (Social Security, Medicare, and Medicaid), and return the federal budget to surplus. Each of these actions would have further reduced already inadequate demand and caused the Great Recession to come sooner, be deeper, and last far longer – because that is what austerity does when you add it to a recession.

Hormats:  Not Cutting Grandmother’s Social Security Will Get Her Nuked

Hormats was just getting started with his plan to ruin America. He claimed that we had to adopt these three self-destructive policies that would hurl us into an earlier, deeper, and longer recession (and therefore increase the budget deficit) to protect ourselves from a terrorist WMD attack.

“Because we know that one of the stated objectives of terrorists is to cause massive disruption in the U.S. economy, such financial vulnerabilities could lead potential perpetrators to feel that they can do a great deal of damage not simply by their initial act, but also because of the secondary and tertiary economic disruptions that would occur because of the subsequent turmoil in a more vulnerable financial environment. In finances as in military affairs, vulnerability frequently invites aggression.”

Hormats’ position was refuted by an earlier speaker that looked a whole lot like Hormats who only about 30 seconds earlier testified that “It is worth recalling that the country had recorded four years of budget surplus before 9/11….” Indeed, it would have been “worth recalling” by Hormats who only 30 seconds later claimed that we could greatly reduce the risk of terrorist attacks if we ran budget surpluses. Hormats displayed at this hearing that he is not simply incompetent, he is a shill willing to say anything, no matter how loony, to please the Democratic politicians who might again make the mistake of appointing him to office.

In the same testimony, Hormats also indicated that he is a “finance expert” who is clueless about the actual financial system of a nation with a sovereign currency, i.e., the U.S.

“Alexander Hamilton recognized from the very beginning that America’s financial strength was vital to its security. If the country did not manage its finances well, he reasoned, it would not have the resources needed to defend itself in time of war and it would lose credibility in the eyes of creditors, making borrowing in time of war or other national emergency all the more difficult.

Over two centuries have passed since Hamilton held office, but these principles are just as relevant today.”

Well, no, not even close. On a more technical detail, his “Red Peril” scenarios assume that the U.S. can only fund itself through issuing bonds. My colleagues have explained in loving detail in NEP why Hormats’ claims demonstrate that he does not understand even the most basic aspects of how money actually works. I do not demand that Hormats agree with MMT, but he does have to understand the actual operations by which money can be created to be minimally competent in his field. As I explained, one does not make a Rubinite an adviser because one is seeking competence.

April 20, 2015 Posted by | Corruption, Timeless or most popular | , , , , , , , , , , | Leave a comment

Everything you ever wanted to know about the OKC bombing in under 5 minutes

OKC – A Conspiracy Theory

Corbett Report | April 19, 2015

TRANSCRIPT AND SOURCES: https://www.corbettreport.com/?p=14347

April 20, 2015 Posted by | Deception, False Flag Terrorism, Timeless or most popular, Video | , , , | Leave a comment

Finance Capital and Debt Through the Ages

By Michael Hudson • Unz Review • April 19, 2015

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Karl: Welcome to the Renegade Economists with your host, Karl Fitzgerald. This week we’re stepping back in time, way back some 10,000 years BC into the world of archaeology, Egyptology and Assyriology. Yes, it’s time for another special with Professor Michael Hudson. That’s right, Michael Hudson back on the show, he’s got a new book called Labor in the Ancient World and I asked him to give us a bit of a précis on the background to his very interesting process. Hang on for another riveting conversation here on 3CR’s Renegade Economists.

Michael Hudson: It’s a symposium of a group put together at Harvard University of the leading Assyriologists and Egyptologists and Mycenaean Greek specialists as well as archaeologists on how early societies mobilised the labour force, especially for large public building projects such as temples, city walls and other infrastructure.

Karl: And this is published through whom?

Michael: It’ll be published by ISLET, the Institute for the Study of Long-term Economic Trends. We just finished the type setting actually today and we’re sending it to Amazon to be put on their list, it’ll probably be available in about two weeks.

Karl: “Labor in the Ancient World.”

Michael: Yes.

Karl: And does that have some sort of Harvard connection?

Michael: We founded this project over 20 years ago at the Peabody Museum, which is their archaeology and anthropology department. We wanted to do a series of books on how modern economies and practices began. Our first colloquium was in 1994 on Privatization in the Ancient Near East and Classical Antiquity; our second volume was on Urbanization and Landownership in the Ancient Near East, about how cities were created and how landownership and real estate patterns developed into a market for real estate. The third volume was on Economic Renewal in the Ancient Near East, about how debt cancellations restored the land to its citizen-cultivators to provide a means of self-support for the free citizenry.

These colloquia grew so popular that we added a fourth volume, Creating Economic Order: Record-Keeping, Standardization and the Development of Accounting in the Ancient Near East, on the origins of money and account keeping from Mesopotamia to Mycenaean Greece and Egypt. And then ten years ago we had our fifth colloquium on Labor in the Ancient World. There have been so many revolutions in archaeology and Assyriology and even Egyptology in the last ten years that we’re only publishing this volume now, to be completely up-to-date.

Karl: So the Ancient Near East, how many thousand years ago was it? Just put us in the picture.

Michael: We begin the volume in 10,000 BC in Göbekli Tepe in Turkey where you have very large city-like ceremonial sites, larger than Stonehenge, huge sites that took hundreds of years to build with huge stone megaliths, even in the pre-pottery Neolithic. They didn’t yet have metal to carve these stones. They didn’t even have pottery. But they had in Göbekli all sorts of huge carvings in a seasonal site where people would come together on ceremonial occasions, like midsummer. We researched from Turkey in 10,000 BC to Sumer in the third millennium BC, Babylonia in the second millennium BC, the building of the pyramids, and we have the actual bills and accounting statements for what’s paid to labour to build the pyramids.

We found they were not built by slaves. They were built by well-paid skilled labour. The problem in these early periods was how to get labour to work at hard tasks, if not willingly? For 10,000 years there was a labour shortage. If people didn’t want to work hard, they could just move somewhere else. The labour that built temples and big ceremonial sites had to be at least quasi-voluntary even in the Bronze Age c. 2000 BC. Otherwise, people wouldn’t have gone there.

Karl: Michael, how did you actually track this? What were you reading to get this information?

Michael: Everybody who comes to the colloquium is a specialist in their period. For instance, Carl Lamberg-Karlovsky is the archaeologist dealing with Göbekli Tepe in Turkey. My co-editor for this volume, Piotr Steinkeller, is Babylonian specialist in cuneiform. We have two Egyptian specialists in hieroglyphics, and two Mycenaean Greek specialists for Linear B. Each scholar throughout all of these five volumes was a specialist in each time period and each geographical area on which we’re concentrating.

Karl: Were you reading clay tablets, cuneiform?

Michael: They read the clay tablets if they’re from Mesopotamia. They read the notations and carvings in the Egyptian pyramids on the inside of the big rock blocks that made the pyramids. Teams would carve or write the home town they came from. We also have royal inscriptions.

We found that one reason why people were willing to do building work with hard manual labour was the beer parties. There were huge expenditures on beer. If you’re going to have a lot of people come voluntarily to do something like city building or constructing their own kind of national identity of a palace and walls you’ve got to have plenty of beer. You also need plenty of meat, many animals being sacrificed. Archaeologists have found their bones and reconstructed the diets with fair accuracy.

What they found is that the people doing the manual labour on the pyramids, the Mesopotamian temples and city walls and other sites were given a good high protein diet. There were plenty of festivals. The way of integrating these people was by public feasts. This was like creating a peer group to participate in a ceremonial creation of national identity.

Karl: Back in those times, how would they have realised when this festival was on, how was communication spread that this was the time to come together?

Michael: We discussed this in the second volume of our series, Urbanization & Land Use in the Ancient Near East. They did it by the solar and lunar calendar, by counting the moons leading up to solar solstices or equinoxes. The great ceremonial sites from Stonehenge to Turkey were based on the particular equinox or solstice. Chieftains usually would be the calendar keepers. Going all the way back to the Ice Age around 29,000 BC Alex Marshack, one of our members, published The Roots of Civilization reporting on the carved bones he found with notations for the phases of the moon. The job of the chieftain was to keep the lunar calendar, trace the waxing and waning of the moon to calculate how long the month would be, and to decide that, “Ah, in this month, six months after the equinox, here’s where we have to get together and have everybody come to the gathering and begin working on the big site”.

The pyramids and other ancient monuments were built by free labor, not by slaves

Karl: I’m still trying to grasp this Michael. Would all these labourers come together in a centralised place to build this giant statue or pyramid based on some sort of goodwill?

Michael: Well, to begin with, you would have a beer party to get everybody friendly. You would have big feasts, and also these were the major occasions for socialization. All over the world, communal feasts were the primordial way to integrate societies.

Obviously somebody was in charge of designing these monuments. We don’t know whom, but they would supervise the cutting and carving of the stones. These had to be brought over large distances, just like in Stonehenge. The groups would quarry them and cut them. Maybe the cutters and designers were the same people. And in Göbekli we’re dealing in a time before they’d invented steel or metal. Many of the stones had to be cut and designs carved just by chipping away with other stones. It obviously was a very laborious type of work.

Corvee labor was supplied on the basis of landholdings

Later, by about 2,000 BC, populations were growing more dense. There also was a shift from the temples, which originally organised most of these mega-projects, to the palaces that developed out of them around 2750 BC. Their scribes developed accounting practices to schematise and organise this labour coming together. To coordinate this in an equitable, almost schematic way, land tenure was allocated on the principle that whoever had such-and-such a plot size had to supply a given number of labourers to work on the public infrastructure. So what we found as a by-product of the labour volume is that the origins of land rights were defined by the tax payments – the corvée labor obligation.

To get the right to a given land of a given size, you had to promise on such-and-such dates to provide this much labour for the corvée project. It’s a French word, because a corvée tax in the form of labour instead of money payments lasted all the way down through the 18th Century in France. It was typical in mediaeval Europe before you had a money economy. Everybody who had their own subsistence land or their own land holdings of one form or another, or their grazing lands, would have to supply X number of labourers to the big building project.

Karl: That’s quite some discovery. So you’re saying that labour was provided as an in-kind payment for taxation based around calendars to build these giant monuments?

Michael: Yes. Each of our archaeologists, Assyriologists and Egyptologists has found this for every period of the Bronze Age and the Neolithic.

Karl: And so we’re still rather on a voluntary level, there was no quantifying –

Michael: There weren’t that many people in the world in 10,000 BC, 3000 BC or even 2000 BC. If a government got too oppressive, or when they would raise the contributions or taxes too high, people would just flee to another area. Or if they were too much indebted the debtors would flee, as they did from Babylonia around 1600 BC. We are talking about free labor, not slave labor.

Karl: So they built a social contract around these feasts, around this sense of belonging by being at this public works event. It sounds like a fascinating way to keep society on track and organise labour so that civilisation would develop on some level. Have you found any indication on that managerial class and how they developed through the chieftains?

Michael: First the priesthoods, then the accountants and scribes. The calendar keepers were usually the chiefs (there may have been “sky chiefs” and “war chiefs” separately, or perhaps their roles were combined as dynastic rulers developed). Most of the religions were cosmological. They wanted to create an integrated cosmology of nature and society (“On earth, as it is in heaven”). Administration was based on the astronomical rhythms of the calendar, lunar and solar cycles. For instance, you typically find a society divided into 12 tribes, as you had in Israel and also in Greece with its amphictyonies. In a division of 12 tribes, each could take turns administering the ceremonial centre for one month out of the year.

The physical design of cities also was based on the calendar. Big cities would have 12 gates. Most cities had maybe four gates, representing the four seasons or the four quarters of the Earth. The outline of the land and the Earth was based on a calendrical cosmology, much like a mandala.

Ceremonial sites such as Stonehenge also were calendars in miniature, designed so that the light would fall on the stones in a particular way on a solstice or equinox. We have this going back into the Ice Age around 30,000 BC. Alex Marshak’s article in our volume on urbanisation found that these sites already in the Ice Age were usually sited on waterways, so that everybody could get to them. They often were sited with mountains in the background and in between them the sun would shine in a particular way on the equinox or on the solstice in a particular alignment that occurred just at that calendrical time. They were recreating the cosmos on Earth.

Karl: You’re on 3CR’s Renegade Economists, this week with distinguished Research Professor Michael Hudson from Michael-Hudson.com and we’re discussing his new colloquium book “Labour in the Ancient World”. We’re tracking back some 10,000-odd years, hearing about how civilisation was developed. Michael, this is a fascinating discussion. I’m interested, of course, here on the Renegades, about this role of land tenure, and how that influenced citizens’ role in society. From what I’ve read out of your new book, it sounds like land holdings played a huge role in the status of a participant in one’s society.

Ancient citizenship, voting rights – and social obligations – were based on landholding

Michael: In America down to the time of the Revolution in the 18 th century, and in early Australia I assume also, in order to be a citizen and vote, you had to be a landowner. And all the way back in Rome and earlier times, Mesopotamia, Babylonia, Sumer, citizens had to have their own land. In Rome each citizen’s voting rights were defined by the land area he owned. I say “he” because only the males were citizens. It was a patriarchal society, with voting rights proportional to the size of one’s landholdings.

Much as today, debt was a major factor concentrating landholdings. Finance always has been the great lever to appropriate the land rent and interfere with widespread land ownership. If you owe money on a mortgage and you can’t pay, you can be evicted. That began to happen already around 2000 BC in Babylonia.

But the process was limited and reversed, because when creditors evicted land-tenured citizens, this caused a problem for rulers. The former landholder no longer was a citizen – and if he’s not a citizen, he can’t serve in the army.

One’s rank in the army down through Roman times was defined by how much land one had. If you had just a basic subsistence plot, you were in the infantry. If you had a lot of land, you were able to support yourself in leisure, have a horse and participate in the cavalry, practicing military training and buying your armour and weapons. You find much the same thing in Japan. All over the world, citizenship, landownership and one’s rank in the army were linked together.

Karl: Yes, the English military had the same arrangement. So you can see a point that if you own lots of land, you want to defend it, so these landowners need to be involved to defend their land. How times have changed.

Michael: They weren’t merely defending; they were also aggressive. There was continual warfare. Attacking and defending also had a financial dimension. In Greece a military manual in the 3 rd century BC was written by a man who took the pseudonym of Tacticus – not Tacitus as in Rome, but Tacticus for tactics. He wrote that if a general planned to attack a city, he should promise to cancel the debts and free the slaves, in order to get the debtors to come over to his side. And if you’re defending a city, you also promise to cancel everyone’s debts and free the slaves. That’s how you get people on your side.

Coriolanus did that in Rome, and Zedekiah in Judah. But both rulers went back on their word as soon as the fighting was over. However, in Babylonia we have more or less regular debt cancellations whenever a new ruler would take the throne. This is in our third volume, Debt & Economic Renewal in the Ancient Near East. Babylonian rulers would proclaim andurarum and misharum, their words for a Clean Slate. David Graeber picked up this historical analysis in Debt: The First 4000 Years, discussing it from an anthropological point of view.

These proclamations did three things – the same three things you find in the biblical jubilee year (which used a cognate word, deror): These acts liberated the debt servants and let them return to their family of origin; they canceled all the personal debts that were owed (but not commercial business debts); and they returned the land rights or crop rights to debtors who had pledged them to their creditors. These royal proclamations restored order by making things the way they were in an idealised past. It was a situation where everybody was supposed to own their own self-support land to provide their means of subsistence free of debt. That was their idea of economic balance.

This is the opposite of debt serfdom reducing more and more people to debt peonage, obliged to pay their income to creditors. If they finally lose their job, they lose their home and their house and the banks get to keep it. That practice would have depopulated the ancient world. If that would have happened, debtors would have just got up and left, or they’d go over to the enemy when other armies would attack. You’d have defections. So reversing personal debts preserved widespread landownership and liberty from debt.

Karl: Right, so reiterating, the Clean Slate would build that social contract with the ruler and help continue the goodwill that led to this massive public development that was voluntarily provided tax in-kind, usually in labor. It sounds fascinating that people would just defect and move to another country under another ruler if the debt stayed too high, even back in those times when we weren’t anywhere near as mobile as today.

Michael: We have all sorts of documents around the 14th and 13th centuries, especially about the hapiru, bands of debt fugitives and others, who some people translate as Hebrews. Rome was said to have been founded by exiles and runaways, mainly runaways from debt who created their own society there. Flight from debt goes way back.

Bronze Age “divine kingship” gives way to classical creditor oligarchies

Karl: Given the history of Clean Slates and the jubilee, how did agrarian debt develop? And how did the conflict of interest between creditors and rulers play out?

Michael: It played out differently everywhere. There was a constant tension from the Bronze Age through classical antiquity between rulers trying to maintain a society under their control, and local headmen trying to get power for themselves. The big question was who would run society and draw up its rules. Would it be the priesthood and military rulers at the top of the pyramid, or creditors and warlords grabbing peoples’ land and trying to create their own control? Strong rulers like Hammurabi were able to centralise rule. He proclaimed andurarum upon taking the throne, and numerous times thereafter, down to his 30th year of rule. When he was sick and dying, his son Samsuiluna also proclaimed misharum to restore order to start his own reign in balance. But then you’d have Intermediate Periods with a free-for-all in which local leaders gained autonomy. And they simply disobeyed royal Clean Slates.

From 1200 BC to about 750 BC in the Mediterranean you have a Dark Age. Apparently you had not only very bad weather around 1200 BC – maybe a small Ice Age and drought – but the weather and crop failures led to mass migrations and invasions. The palaces of Mycenaean Greece were burned and syllabic writing disappeared for nearly 500 years. Then, when you have alphabetic writing emerging, the person whose title originally meant “local branch manager” of the palace workshop suddenly appears as the basileus, the ruler. But mostly you have landholding aristocracies holding the population in debt serfdom (like the Athenian hektimoroi, “sixth parters” liberated by Solon in 594 BC). It was much like the post-Soviet kleptocrats when Red Managers gave themselves control of their companies. When central power falls apart, local headmen take over. The dissolution of royal power led to privatization – including the privatization of credit, taking it and its rules out of royal hands. So Clean Slates stopped.

Much the same thing occurred in England. After the Norman invasion you had the Magna Carta when the autocratic King John tried to grab all the economic surplus for himself. The landowning barons wanted to break free. The Magna Carta limited what kings could tax without landlord agreement. The barons said, in effect, “The rent that we formerly paid to support the royal army, we henceforth will keep for ourselves. Also, we won’t pay the debts we owe to the Jews, so that we can keep our land.” The founding constitution or legal documents of almost every nation have to do with the relationship between finance, land tenure and its tax liability, and the relationship between centralised power and local power.

You could say that the progress of civilisation for the last thousand years, since feudal times, has been a dissolution of autocratic feudal power toward more democratised power. The problem is that land has been democratised on credit. So instead of owing money to landlords, homeowners now owe money to their bankers.

Creditor stratagems to evade the law and religious sanctions

Karl: That is the challenge of the ages isn’t it? Looking through these writings of yours, it becomes clear that this battle between credit and the sovereignty of this democratic process has been an ongoing challenge. In antiquity, did the vocabulary distinguish interest from usury?

Michael: No. It was only in the 13th century that Thomas Aquinas and the Schoolmen distinguished between interest and usury. Any taking of interest was considered usury in antiquity. That’s why some people tried to ban it, mainly for consumer interest. When the distinction was made, usury was supposed to refer to consumer loans, and interest was for bona fide commercial loans. These usually involved shipping to foreign buyers or transferring payments from one country to another, for instance when barons left to fight in the Crusades. The Latin word for such foreign exchange fees was agio, a premium.

Bankers managed to get around Christian sanctions against usury by saying, “Okay, it’s not interest, it’s a fee. It’s a foreign exchange fee.” They would pretend to make a foreign exchange transaction, and pay for the currency convertibility. If you’re converting Australian pounds into dollars, you have to give a few percentage points to the banker. In medieval times, interest was concealed as a foreign exchange fee and as interest or, for real estate, as rent – much as in today’s Islamic finance. This was called “dry exchange,” because it occurred on dry land. No sea transport was involved.

Karl: So when we look over the history of this era and its battle between credit and the ruling elite, the challenge was to maintain land ownership within your community and keep your people there, making sure that they had some share in the benefits of working together. This sort of independence of people being able to live off their land seems to have become a battle between democratic principles and creditors.

Michael: That’s basically so. Early common law had blockages against the things that creditors could foreclose on – the widow’s ox, the blacksmith’s anvil and basic tools of one’s trade and self-support. If you were a creditor and wanted to get somebody else’s land, you needed a legal stratagem.

In Babylonia and neighbouring Indo-European speaking communities such as Hurrian-speaking Nuzi, customary land tenure rights were only transmissible within a family or clan. The aim was to enable kinship units to supply their basic needs. The creditor’s stratagem was to get himself adopted by the debtor as number one son, as his heir. When the debtor died, the number one son, the creditor, would inherit most of the land, as if he were part of the kinship-based community. A Babylonian proverb reflects this practice: “A creditor has many relatives.” These subterfuges that creditors used are much like the small print that bank lobbyists write into today’s bankruptcy laws to stack matters in their own favor. Creditors and Wall Street have always been subtle in finding end runs around laws, obeying the letter of the law but changing the spirit of the law.

The U.S. political outlook: the Democrats and Hillary Clinton’s 2016 run

Karl: Changing gears, let’s speed into the current American situation with Elizabeth Warren and the Democratic ticket. I saw this week that she’s come out fighting against banks and their threat to reduce donations to the Democratic Party if she doesn’t tone things down. Did your blood boil when you read that Michael?

Michael: Not at all. The Democratic Party in America is the party of Wall Street. A Republican administration could never get away with turning over power to Wall Street, because as long as they’re in power, the Democratic opposition will block them from doing it. Although the Republican Party is almost entirely funded by lobbyists, the Democratic Party is the one that has the power to unblock the giveaways to Wall Street. Most of this is done under former Clinton Treasury Secretary Robert Rubin who got rid of the Glass-Steagall Act, blocked regulation of bank derivative gambles, and inaugurated the wave of deregulation and outright criminalization of banking.

The Glass-Steagall Act was repealed in 1999, when the Clinton Administration also blocked regulation for bank speculation in derivatives. It took only eight years for the most criminal organisations, Citibank and Bank of America (which bought the junk mortgage writer, Countrywide Finance) to bring down the economy. The head of Citibank was Rubin, after having freed it from regulation. What the press called the Rubino Gang wrote fake mortgages – they’re called “liar’s loans” or “Alt-A,” based on false declarations of income and false property valuations (the liars were the banks and the mortgage brokers) and sold them to gullible investors like German Landesbanks that were naïve enough to believe that Wall Street wouldn’t try to cheat them. The junk mortgage bubble was one of the biggest ripoffs in history.

You can read what my UMKC colleague Bill Black has written recently on Naked Capitalism and the University of Missouri Kansas City site, New Economic Perspectives on the Citibank criminogenic organisation. The Democrats under Obama have blocked any prosecution of financial criminals. Not a single bank crook has been thrown in jail after over $4 trillion had been stolen and bailed out by the Federal Reserve’s wave of Quantitative Easing. The crime wave of Wall Street and real estate in the last decade has endowed an entire ruling class for the next century in America.

They’re as criminal as the Russian kleptocrats, because they’re in total control of the government. They’ve used their power to re-define the meaning of a “free market.” To them, a free market is one completely free of government regulations to control banking, and free of any criminal prosecution, because they have their factotums in the Justice Department. The head of the Justice Department is Eric Holder, whose job is to protect Wall Street. He resigned recently in favour of a successor, Loretta Lynch, who also is a non-prosecutor of Wall Street’s.

So essentially the real estate and mortgage system in America has been criminalised in the way that Bill Black has been describing in four wonderful articles that he’s published in the last week on Naked Capitalism. Hillary is fully on board with the Rubinomics gang.

Finance capitalism is dominating and stifling industrial capitalism with debt deflation

Karl:Excellent Michael, I’ll look forward to reading those. That’s the horror story of banking, but I like the fact that you’ve dug into the archives and found one of the bright spots for the finance industry, and that was the Saint-Simonian banking ethos. Can you remind our listeners what that was all about, and how we hope the finance sector might evolve?

Michael: In the 19th century the Industrial Revolution was really taking off. The great financial question was how to create a banking system that would help industrialise countries to bring them into the modern era. Before the 19th century – ever since antiquity – you don’t find banks lending to build factories or other means of production. Loans were made against property pledged as collateral, or were made largely to export goods once they were produced. But banking before the 19th century did not actually fund tangible capital investment. James Watt wasn’t able to get the money for his steam engine from a bank, except by mortgaging his property and borrowing from friends.

Saint-Simon founded a school of reformers in France that realized that in order to industrialise the nation, catch up with England and overtake it, it had to move banking beyond its medieval stage. Instead of making lending to businesses in exchange for interest payments – which can force them into bankruptcy when sales turn down, bank loans should really be made on the basis of profit sharing. This is how commercial loans were made back in Babylonian times. Saint-Simon’s idea was to make banks more like mutual funds. Their fortunes would rise or fall with those of their business clients.

The main country that adopted this industrial banking principle was Germany as well as other central European countries. Their banks invested in their customers as stock owners as well as acting as creditors. They acted basically as the forward planning arm of industry, working with governments to promote export sales abroad.

Until World War I most futurists, from Karl Marx to regular businessmen, expected banks to take the lead in planning society. But after Germany lost World War I, the world reverted to Anglo-American banking. This was basically short-term hit and run. Banks still don’t make loans for industrial development. They do lend for raiders and mergers to take over companies, and also to ship exports. But they’re not set up to actually fund industrial capital formation. So society has fallen back in the last hundred years to the opposite of what classical economists and what 19th-century futurists expected banking to become.

Although we do have a centrally planned society, it is centrally planned by Wall Street, the City of London, Frankfurt and other financial centres. This planning is extractive, not productive. It seeks to extract interest payments, to profiteer from takeovers and gambles, and to make capital gains on stocks and real estate speculation. But it’s not designed to industrialise economies. That’s why most of the world outside of China is in a period of economic shrinkage and de-industrialisation.

Karl: So to wrap things up Michael, what can we learn from the Ancient Near East? Perhaps you can tell us how you got interested in this historical topic going way back through these cuneiform readings of clay tablets.

Michael: For me, the advantage of studying the ancient Near East is to see how different economies through history have dealt with the phenomenon of debts that are too large to be paid. Right now you’re having in the Eurozone with its arguments against Greece saying that if its government can’t pay its debts to the IMF, European Central Bank and the rest of the troika, it has to submit to austerity, even if its population is forced to emigrate. That is what much of the Greek population is doing. Shrinkage and emigration is what has to be paid for not being able to cancel debts – in this case public debts. The ancient Near East couldn’t afford the Eurozone’s pro-creditor stance, because it would have been depopulated and been conquered by neighbouring countries that didn’t submit to such austerity.

The advantage of studying the ancient Near East is to see a contrast with today. I got into this originally when I was working with the United Nations Institute for Training & Research (UNITAR) in 1978 and ’79. We had a meeting in Mexico and I gave a lecture on what I’d found when I was Chase Manhattan banks’ balance-of-payments economist. The Third World couldn’t pay the foreign debts it had run up. This was a few years before Mexico declared it couldn’t pay in 1982. There was such a fuss and denials by the banks that countries couldn’t pay that I decided to write a history of how societies had dealt with situations where debts couldn’t be paid. I got all the way back to classical antiquity and the Jewish lands, and then found that there wasn’t any economic history of the early Near East. The economic and financial details were scattered through many journals.

In 1984, I went up to Harvard and a decade later we decided to put together a group to study the origins of economic organization, category by category, to trace how ancient economies developed the origins of modern economic civilisation. The five books you cited earlier were the result, as well as many articles you put in my website.

Karl: Well Michael Hudson, thank you very much for joining us here on the Renegade Economists’ radio show yet again, that must be about our fifteenth interview I reckon.

Michael: Good, thank you.

April 20, 2015 Posted by | Book Review, Economics, Timeless or most popular | , , , , , | Leave a comment

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