Bush team has 'right' credentials
    Conservative picks seen eclipsing even Reagan's
    3.25.01   Dana Milbank & Ellen Nakashima WashPost pA1
¢U L P R I T S
 
Joe Allbaugh   FEMA
  Shrub's TX enforcer

Walter Kansteiner   Scowcroft
resources rapist; FIPF

John Bolton State Dept
asst atty general for Contra cocaine   CIRF
nukes enthusiast; ¹   FPIF   CV

John Maisto   NSC
Nicaragua amb. for Contra cocaine

John Negroponte   UN
Honduras amb. for Contra cocaine

Otto Juan Reich   State Dept
Venezuela amb. for Contra cocaine
Off. Public Diplomacy for LatinAm
munitions pusher; FIPF

Bruce Chapman   WHouse
Special Sci&Tech asst to Pres.
Intelligence Design Theory creationist

Lorne Craner   State Dept
GOP spinchief worked Balkan hustings
Coup fixer for Contra cocaine

Richard L. Huber   NorteSur
uberNAFTA cheerleader

John P. Walters   Narc czar
another NatSec brat gets career payoff for Contra coke contrib.
NameBase

Pres. GWBush is quietly building the most conservative administration in modern times, surpassing even R.Reagan in ideological commitment of his appts, WHouse officials & prominent conservatives say. As Bush fills out sub-Cabinet & WHouse staff, he turned to large number of formidable intellectuals drawn from conservative think tanks, journals & law firms. The appts surprised even to conservative leaders, who expected Bush, particularly after disputed presidential election, to follow centrist path closer to his father's. "This administration is shaping up to be the best," said Paul Weyrich, prominent conservative. "When Reagan ran for office, even when Nixon ran, it was the campaign that was lovey-dovey. Then, when they got in, they didn't know who you were. Here, the Bush campaign didn't pay any attention to us, but as soon as they got in, they started taking notice. This is something that I've never experienced before." Michael Horowitz, Reagan WHouse vet now with conservative Hudson Institute, concurred. "In many respects, this is better than the Reagan administration," he said.

Bush's collection of "movement" conservatives, those identified with moral, religious or small-govt causes, is wide-ranging: Otto Reich, …; Christian activist Kay Coles James, … slated to be solicitor general is Theodore B. Olson, who served on Richard Mellon Scaife-funded American Spectator magazine's board & argued pivotal Supreme Court case against affirmative action. Bush admin officials say conservatives' appt should not be surprising because Bush is a conservative. They also say appts do not necessarily translate into right-wing agenda. They point out that Bush continues to make his campaign themes, incl education, tax cuts, and military & entitlement reform, top priorities. "The president is reaching out to experienced individuals of highest integrity who share his commitment to a conservative agenda with compassionate results," said Scott McClellan, Bush spokesman. Even moderate Republicans say they are pleased with the lineup. "I am struck by the depth of the Bush bench," said Rep. Phil English R-PA, noting that the appointments "don't run up any red flags."

Still, Bush's appts surprise those who interpreted Bush's soothing campaign rhetoric to mean he was, if not a moderate, then a "new kind of Republican," as the campaign often said. Liberals believe such appts explain why Bush admin has taken actions on controversial issues that did not surface much during the election: abandoning pledge to limit carbon dioxide emissions, restricting labor unions & abortion rights, revoking ergonomic & arsenic regulations, and tightening bankruptcy law. "What you're seeing is an administration that, believe it or not, is further to the right than either the first Bush or the Reagan's," said Ralph Neas, president of People for the American Way. "Across the board, it's obvious that the right wing is in control. And it's a right-wing agenda that's being implemented." At first, conservatives & other observers believed Bush's gestures to the right were simply "outreach," building up loyalty from his base of support in order to strike deals with Democrats later. After all, Bush's top 3 advisers, Karl Rove, Karen P. Hughes & Andrew H. Card Jr., ç were not regarded as movement conservatives, and his appts in Texas tended to be establishment Republicans.
But conservatives no longer suspect Bush is merely placating them so they don't abandon him as they did his father. "These folks are good, solid conservatives, which warms my heart," said Frank Donatelli, who served as Reagan WHouse political adviser.

Although conservatives in the first Bush WHouse tended to be outcasts or relegated to VP Dan Quayle's office, they dominate many crucial areas of the White House now, incl VP Cheney's office. One reason for the larger number of conservatives in the new Bush admin is the expanded talent pool.
"At the time Nixon became president, there just weren't many conservatives in America of a philosophical base," said David Boaz of libertarian Cato Institute, noting there were mostly country-club Republicans or segregationists. "By the time Reagan became president, people who had read [economist] Milton Friedman or who were kids during [Barry M. Goldwater's heyday] were ready to be sub-Cabinet or WHouse aides." Now these same people are seasoned and ready to govern, joined by clerks of conservative judges.

At the same time, American culture has grown more conservative, with support for the welfare state fading. For conservatives now, "their views are based much more on academic support than Reagan ever had," said Kevin Hassett of the American Enterprise Institute.
Growing up in Texas, becoming a businessman during the Reagan revolution, serving as a governor of a southern state, Bush is the product of the changing times. "He's modernized the Reagan model," said GOP strategist Scott Reed.

But perhaps the most significant reason the new Bush admin has eclipsed Reagan's in conservatism is the absence of moderate dissent. There is no equivalent to Richard Darman, Reagan's former budget chief, a New England moderate who had no patience for conservatives' ideas.
"The Reagan administration was wracked by quarrels between people who had strong ideological commitment to the president's campaign positions who generally lacked expertise, and people who had expertise who, by and large, didn't respect the president's campaign positions," said a philosophical conservative working for Bush.

Now, they're one and the same. There is a danger that the lack of competing views in the famously tight WHouse could cause Bush's advisers to become stale & insular, but there is no concern about that yet. "There isn't a lot of competition in the policy arena," a Bush official said with satisfaction.

Bush seems to care about hiring more than Reagan did, accepting the idea that "personnel is policy." The new president also seems determined to avoid the ways of his father, who preferred businesslike managers. "They tended to be the moderates, the people who had gone to the prestige prep schools and disproportionately tended to have Roman numerals behind their names," said conservative Morton C. Blackwell, first term Reagan adviser & longtime GOP National Committee member. Bush & aides appear to have concurred with the advice sent in November by Hudson's Horowitz in memos to the transition team. He wrote that Bush should "assign greater weight to intellectual capital & moral credibility than to management skills. … The close vote & contested election sharply increases the value of appointees able to finesse the 'no mandate' pressures that will be placed on the governor."

Ideological conservatives haven't won every influential position in the Bush admin. SecState Colin L. Powell & EPA Administrator Christine Todd Whitman have moderate credentials. And Transportation Sec Norman Y. Mineta is a Democrat. If there is one weak link in the administration for some movement conservatives, it is Treasury Sec Paul H. O'Neill, who has been advocating reductions in carbon dioxide emissions for years and supported the imposition of an energy tax in 1993. Another disappointment for conservatives is Tom Scully, chosen to head Health Care Finance Admin at Health & Human Services Dept. But social conservatives cheer Bush's pick of Claude A. Allen for deputy secretary. As Virginia's health secretary, Allen, former press secretary to Sen. Jesse Helms R-NC and a foe of right-to-die legislation, drew fire from health care advocates who charged he would cut services to women & children.
Movement conservatives are generally delighted as many of their own take positions of power. The recent hirings go far beyond the early naming of conservatives such as John D. Ashcroft to head Justice Dept and Gale A. Norton to lead Interior Dept. In virtually every instance where moderate candidates have vied with conservatives for key jobs, a conservative has won. Ashcroft, for example, was selected over former Montana governor Marc Racicot; & J. Steven Griles, a coal mining lobbyist, was selected over the more moderate John Turner as the No. 2 at Interior. Conservatives are particularly pleased with Office of Mgmnt & Budget. There, Jay Lefkowitz, former law partner of Kenneth W. Starr, is chief counsel, joined by strong conservatives Sean O'Keefe & Director Mitchell E. Daniels Jr. This gives conservatives sway over most regulatory decisions.

Justice Dept is another favorite location. Michael Chertoff, who advised Sen. Alfonse M. D'Amato R-NY during Whitewater investigation, was named criminal division head. Larry Thompson, Supreme Court Justice Clarence Thomas ally, is nominee for deputy atty general. In WHouse, Timothy Goeglein, former religious conservative Gary Bauer and Sen. Dan Coats R-IN aide, serves as liaison to conservative leaders. The speechwriting office features writers from the Weekly Standard & National Review, and former advisers to Wm Bennett, Jack Kemp & Quayle. WHouse counsel's office is staffed with former clerks to Justices William H. Rehnquist, Antonin Scalia, Anthony M. Kennedy & Thomas, and members of the conservative Federalist Society. The group has been successful beyond the counsel's office; it counts as members Olson, Norton, Energy Secretary Spencer Abraham and his counsel, Lee Liberman Otis, among others.
Several Bush nominees were endorsed by Heritage Foundation, leading conservative think tank that has full-time staffer devoted to helping the administration with its appts, and who is in contact with WHouse every day. Labor Sec Elaine L. Chao comes from Heritage, as does Cheney adviser Nina Rees. Paula Dobriansky, conservative causes champion recommended by Heritage, was nominated to undersecretary of state for global affairs. American Enterprise Institute, with which VP & wife Lynne V. Cheney have been affiliated, also claims John R. Bolton, nominated to be State Dept undersecretary for arms control & intl security. Bolton is foe of intl organizations and is a man with whom, Helms has said, "I would want to stand at Armageddon." The institute also can claim Lawrence B. Lindsey, Bush's top economic adviser, and Diana Furchgott-Roth, staff chief to Council of Economic Advisers.

Most of the sub-Cabinet & WHouse appointees are unknown to public and will remain unknown throughout their terms. But they have extraordinary influence, and in some cases foes fear them more than Cabinet officers. A case in point is John D. Graham, named to head little-known Office of Information & Regulatory Affairs, which vets all significant or controversial regulations. Graham is founder of Harvard Ctr for Risk Analysis, which is funded by more than 100 large corporations & trade groups, incl Dow, 3M, Dupont, Monsanto, Exxon & American Petroleum Institute.

He is leading proponent of "comparative risk analysis" to balance the need for regulation against risk of the event, and he was prominent in the 1995 regulatory reform battles. "John Graham has a long history of opposing even the most broadly accepted public health protection measures, incl the measure to reduce drinking water contamination," said Greg Wetstone, Natural Resources Defense Council spokesman. Graham's nomination, Wetstone said, "is arguably the single sharpest stick in the eye of the public interest community yet."

    J. Allbaugh
The crony who prospered
9.16.05   Mark Benjamin
Salon

Joe Allbaugh was GW. Bush's good ol' boy in Texas. He hired his good friend Mike Brown to run FEMA. Now Brownie's gone and Allbaugh is living large. George W. Bush relied most heavily on 3 trusted staffers in his bid for the White House in 2000: political strategist Karl Rove, communications czar Karen Hughes and national campaign manager Joe Allbaugh, who had been Bush's chief of staff in Texas, when Bush was governor. The three were dubbed the "iron triangle" of Bush's top staff.
Allbaugh was "the enforcer," says Texan Robert Bryce, auth. "Cronies," about Bush and the oil industry. "And he looked the part: crew-cut, cowboy boots, and just slightly smaller than a side-by-side refrigerator."

When Bush moved into the Oval Office, Hughes took a job as counselor in a spacious White House corner office with a view of the Truman balcony. Rove moved in as senior advisor. Allbaugh, on the other hand, went down the road to C Street in southwest Washington to take over the Federal Emergency Management Agency.
"Everybody thought [Allbaugh] was going to be White House chief of staff," Robert Novak said on CNN at the time. "And your initial reaction is, boy, what did he have against Allbaugh? But as I talked to politicians, they say this was a brilliant maneuver because FEMA is very important, politically, to any president dealing with disasters."

The FEMA director has turned out to have political consequences for the president all right, but not the kind that Bush supporters could have ever envisioned. Critics say Allbaugh hastened the decline of FEMA, even before he turned the agency over to his Oklahoma buddy Michael D. Brown, hapless captain when (Hurricane) Katrina struck (New Orleans 8/05), whose political career appears to have been shipwrecked for good.
As for the president, a recent Washington Post-ABC News poll found that 54 percent of Americans disapprove of his response to Katrina. Allbaugh, meanwhile, has risen above the morass. He and his wife, Diane, now work as Washington lobbyists and consultants for such companies as Halliburton and Northrop Grumman, companies involved in homeland security and disaster relief that do business with the federal govt.

When Allbaugh inherited FEMA Feb. 2001, the relief agency may have been in its best shape since its inception in 1979. It had been in the hands of James Lee Witt for the previous 7 years. Witt was an experienced disaster manager who had been Arkansas Office of Emergency Services dir. for 4 years before going to FEMA. Witt is credited with implementing sweeping reforms to speed disaster relief, and he was the first FEMA director to get Cabinet-level status, crucial access to the president.
"Access to the president, I think, is critical in an agency like this," Witt told reporters over lunch just as he was leaving FEMA. Bush, however, did not hand the FEMA reins to Allbaugh because of any long experience in emergency services.

"Look at Joe Allbaugh's qualifications," says the King County WA Office of Emergency Management dir. Eric Holdeman, who last month penned an editorial in the Washington Post, "Destroying FEMA." "He was campaign manager for Bush. He was a political strategist. He saw FEMA as a federal entitlement program for people. He had no interest in the mission and functions of the emergency management agency."
At FEMA, Allbaugh led federal rescue efforts at Ground Zero with apparently good results, though NYC officials, notably Mayor Rudolph Giuliani, got most of the attention. Allbaugh could also move fast. In Feb. 2001, the Nisqually earthquake in Washington state occurred at 11 a.m. By 11 p.m., Allbaugh was in the Puget Sound area, leading a $157 million response.

Following 9.11.01, Allbaugh backed plans to fold FEMA into the Homeland Security Dept. "I fully support FEMA's transfer into the new dept and commit myself to ensuring its success," Allbaugh told the Senate Environment and Public Works Committee in September 2002. "This is the right action, at the right time, for the good of the country."
In March 2003, FEMA was folded into DHS. FEMA critic Holdeman explains that the move stripped the FEMA director of Cabinet-level status, buried the agency in red tape, and caused key talent to flee. DHS employees now rate it as one of the worst places to work in the federal govt, according to a nonprofit agency's report, "Best Places to Work in the Federal Govt," released this week.
"FEMA first became ill with the appointment of Joe Allbaugh," Holdeman says. Not only is it on the back burner of DHS priorities, he says, "it is not even on the stove."

After FEMA's move to DHS, Allbaugh promptly left the agency. "I have been a longtime advocate for the Homeland Security Dept, and now that it is a reality and the president has a great team in place, I feel I can move on to my next challenge," he said in a statement. Before he drove off, he appointed the now infamous Brown as team leader, whom he had brought to FEMA in 2001 as general counsel.
Appearing before the Senate Governmental Affairs Committee in June 2002, Brown said: "My friend, Joe Allbaugh, whom I have known for some 25 years, has asked me to serve with him. Our friendship goes back many years."

Allbaugh graduated from Oklahoma State University in 1975, the same year Brown moved from Southeastern Oklahoma State University to the University of Central Oklahoma. (It has been incorrectly reported that Allbaugh and Brown were college roommates. They did not attend the same college and were never college roommates.) Both were active in Oklahoma municipal or state govt. Allbaugh was once the Oklahoma deputy secretary of transportation, and Brown was the staff director of the Oklahoma Senate Finance Committee from 1980 to 1982.

Patti Giglio, Allbaugh's spokeswoman, says Allbaugh is unavailable for interviews. She says that she is not sure exactly how Allbaugh and Brown met in Oklahoma, but that Allbaugh is "absolutely" responsible for first bringing Brown to FEMA. "He hired him because he was a solid attorney with a strong ethics background," she says.
Like Allbaugh himself, Brown was no veteran of emergency services. He worked as general counsel for Dillingham Insurance in Enid OK 1988 to 1991, and evaluated judges for the Intl Arabian Horse Association for the 10 years ending in 2001.

Brown's sole piece of emergency experience before FEMA came in the 1970s, working for the city of Edmond OK. Spring of 2002, Brown delivered written biographical materials to a Senate panel considering his nomination to FEMA as a political appointee. In those papers, Brown said he worked as "Asst City Manger, Police, Fire & Emergency Response," in Edmond 1975 to 1978. He signed an affidavit stating that his biographical material and written answers to that Senate panel were "current, accurate and complete."
However, Edmond city spokeswoman Claudia Deakins says city records list Brown as an "assistant to the city manager", as opposed to "assistant city manager", from Aug. 1977 through Sept. 1980. Randel Shadid was on the Edmond City Council from 1979 to 1991 and was mayor from 1991 through 1995. He says he remembers Brown and described the Edmond job as relatively low level. "My best I can recall he was an assistant to the city manager, which basically means he did certain tasks for the city manager," he says. "He would not have been in charge of the police and fire depts. We had a fire chief and a police chief."

Shadid says Brown may have assisted the city in preparing a response plan for a tornado or a freight train spill. "He was a nice guy, hard worker and pretty bright," he says. "But the scope of doing anything in the city of Edmond is nowhere near the scope of trying to handle what's going on in the gulf."
Today, with the disgraced Brown having quit FEMA, and President Bush's post-Katrina poll numbers sinking, Allbaugh continues to prosper. His stint at FEMA has proven to be lucrative for him and his wife Diane, who are lobbyists and consultants for the Allbaugh Co. Review by Salon of lobbying registration records shows that 7 months after Allbaugh left what was to become Homeland Security Dept, Diane Allbaugh registered as a lobbyist with 3 companies to work on homeland security or disaster relief issues. Prior to that, she focused almost exclusively on energy companies and electric utility clients.
Records also show that Diane Allbaugh contacted DHS for undisclosed reasons on behalf of 2 of those clients. She did less than $10,000 of work for each company and all 3 contracts were terminated in the summer of 2004.

Washington is full of folks in power with spouses who are lobbyists. Allbaugh spokeswoman Giglio, points out that Diane has her own substantial credentials as an attorney and a lobbyist. "Her work is much broader than 'electric utility lobbyist,' as you have described it," Giglio says in an e-mail. "She is an experienced govt affairs consultant across many industry sectors."
Federal ethics law bars sr employees from contacting their former employers on business matters for a period of one year. But not necessarily their spouses. Project on Government Oversight general counsel Scott Amey says it is unclear if Diane violated any of a complex web of ethics laws, but there are provisions intended to prevent the use of spouses to skirt restrictions.

It is not the first time Diane's lobbying could be perceived as cashing in on her husband's connections. Then-governor Bush in 1996 learned from a report in the Dallas Morning News that Diane had been hired by TX utility companies who had business before the state. Diane and Joe Allbaugh had moved to Texas from Oklahoma because Joe had become Bush's exec. asst.
The paper said Diane could get $250,000 from the companies, even though she "had no previous experience with Texas legislators." Diane later dropped the clients to avoid the "perception of a conflict," she wrote Bush's general counsel.
This year, the Allbaugh Co. registered to lobby for Halliburton Co. subsidiary Kellogg Brown & Root, Northrop Grumman Corp., and Shaw Group, according to lobbying registration forms. In all 3 cases, the Allbaughs said they would "educate Congress" on either homeland security or disaster relief issues on the companies' behalf.

The Washington Post reported last week that Allbaugh was in Baton Rouge LA helping his clients get business in the wake of Katrina. Allbaugh told the Post that he guides his clients toward "entities" that might need their services but, he said, "I don't do govt contracts."
Press reports show that Kellogg Brown & Root received a $30 million contract to rebuild Navy bases in Louisiana and Mississippi, and Shaw got a $100 million FEMA contract for housing construction and management. Giglio says Allbaugh had nothing to do with those contracts at all. "He is not in the govert contracting business," she says. "Everybody is trying to connect the dots. They just don't connect. He did not secure these contracts for either of these companies."

Watchdog Amey says Allbaugh clearly got the job at FEMA because he was a political operative and he appears to be cashing in on his FEMA post now. "Bush may have stacked the [FEMA] administration with people who may not have been the most qualified, and who then steer business their way afterward. Cronyism gets them into the White House. The revolving door gets them business".


Wash.D.C.   … Several conservative nominees. … Texas Supreme Court conservative justice Priscilla Owen for federal appeals court post. Justice Owen is an opponent of abortion rights for minors without their parents' permission. Senate Judiciary Committee Democrats banded together last month to defeat nomination of Charles W. Pickering Sr. of Mississippi to a seat on the federal appeals court based in New Orleans, provoking denunciations from Republicans. Some Democrats were blunt about what they hoped to accomplish. Sen. Charles E. Schumer D-NY said that in opposing the Pickering nomination they were sending a message to the White House that Mr. Bush should stop trying to stack the courts with conservatives. "The bottom line is that the administration has made ideology a major factor in their selection of judges," Senator Schumer said in an interview. "I think it's fine that ideology is being debated more openly now." But he added that the Judiciary Committee would not accept the administration's judicial nominees unless Mr. Bush broadened their ideological range.

Justice Owen was elected in 1994 with help of an $8,600 donation from Enron, later wrote a majority opinion that reversed a lower court order, saving the company about $225,000 in taxes. Judiciary Committee chair Sen. Patrick J. Leahy D-VT recently sent a series of questions to the White House asking for comment on the issue of any relationship between the donations & her rulings. Mr. Gonzales said that he had examined the issue and found nothing improper on Justice Owen's part. He said he would soon write to Mr. Leahy outlining his position. "Based on our review she's superbly qualified to serve on the Fifth Circuit," he said. "She's extremely bright, extraordinarily dedicated and very principled."
Chief lawyer in the White House, however, rejected the idea that Mr. Bush would change his approach to choosing judicial nominees. "The president has made very clear he has definite ideas about the kind of people he wants to fill the judiciary," Alberto R. Gonzales, the White House counsel, said in an interview this week. "The intention here is to keep sending up people like the ones we have sent up who we believe are qualified and in the mainstream."
Opponents of Justice Owen cite dispute that arose in 2000, when Mr. Gonzales was a fellow justice on the Texas court and Justice Owen was one of 3 court members who wrote dissents in a case involving a new Texas law regarding parental notification of abortions among minors. At the time, Mr. Gonzales suggested that the narrow reading of the law by the dissenters was "an unconscionable act of judicial activism." Anne Womack, a spokesman for Mr. Gonzales, minimized the significance of the disagreement. "Judge Gonzales's opinion and Justice Owen's dissent reflect an honest & legitimate difference of how to interpret a difficult & vague statute," Ms. Womack said.

Justice Owen's nomination is likely to bring the abortion debate into play. Kate Michelman, the president of the National Abortion Rights Action League, said that abortion rights groups would strongly oppose her. "We regard her as someone who exemplifies the most extreme hostility to reproductive rights of any of the nominees that President Bush has named," Ms. Michelman said.
On a recent campaign swing through the South, Pres.GWBush said he wanted a Republican-controlled Senate so he could put conservatives on the bench. Mr. Gonzales said the president was naming lawyers to the bench who are chosen for competence, character and a judicial philosophy that respects precedent and believes in judicial restraint. But Mr. Bush's use of the word conservatives in his campaign appearances was unusually direct.

Republicans have generally shown themselves willing to take casualties in their efforts to shape the federal bench to their liking. Even though Mr. Bush suffered a defeat with the Pickering nomination, the Republican Party is trying to extract some political advantage from the experience. Mr. Bush tried to use the issue against Senator Max Cleland GA, who is running for re-election, and a Republican strategist said he expected the Pickering issue to play a role in several races in the South. Sen. Lamar Alexander R-TN broadcast a television advertisement arguing that the treatment of Judge Pickering was unfair to the South. Democrats on the Judiciary Committee, which holds hearings on all judicial nominees, have also tried to send their message by arranging the order in which they will consider Mr. Bush's nominees, delaying votes on those they consider most conservative.
Democrats, who control the committee, are generally planning to schedule hearings and votes on those Bush nominees they consider more acceptable, such as James Howard of NH, who has been nominated for a seat on the U.S. Court of Appeals for the First Circuit, in Boston. Mr. Howard is considered moderate & relatively noncontroversial candidate, Democratic staff aides said. Others whom committee members consider less ideological, and who thus may get early consideration, include Julia Smith Gibbons and John M. Rogers, both nominated for seats on U.S. Court of Appeals for Sixth Circuit, in Cincinnati.
Other Bush nominees who could become the subject of sharp battles include Miguel Estrada, a strong conservative who has been nominated to U.S. Court of Appeals for the District of Columbia Circuit, and D. Brooks Smith, nominated for U.S. Court of Appeals for the Third Circuit, in Philadelphia. Mr. Leahy has promised hearings this year to Ms. Owen, Mr. Estrada and Prof. Michael W. McConnell of the Univ. of Utah, nominated to a seat on U.S. Court of Appeals for the 10th Circuit, in Denver. Professor McConnell is considered the least likely to engender opposition because of support for him among academics across the ideological spectrum.

There is a feel of something more creepy than just bad policies   8.11.03   M.Ivins op ed Salt Lake Tribune

Camden, ME   … mileposts on downward path to utter degradation of political discourse in this country. A recent newspaper advertising campaign by "independent" groups supporting Pres. GWBush shows a closed courtroom door with the sign, "Catholics Need Not Apply," hanging on it. The ad argues that Wm Pryor Jr, Alabama atty general and right-wing anti-abortion nominee to the federal appeals court, is under attack for his "deeply held" Catholic beliefs.

Actually, Pryor is under attack because he is a hopeless dipstick. That he also happens to be Catholic and anti- abortion has nothing to do with his unfitness for the federal bench. The only person I know who believes one's closely held religious & moral convictions should make one ineligible for the federal bench is Supreme Court Justice Antonin Scalia. Scalia argued last year that any judge who is opposed to the death penalty should resign, on account of it is the law.

By that reasoning, any judge who is opposed to abortion out of deep moral conviction should also resign. That would include Scalia's resignation … Pryor has said Roe vs. Wade "ripped the Constitution and ripped out the life of millions of unborn children." … His record on civil rights, states' rights and gay rights is equally ideological. He has a record of incendiary comments, which certainly bring into question his "judicial temperament." When the Supreme Court delayed an execution in Alabama, Pryor called them "nine octogenarian lawyers."
NY Times observed, "He has turned the Alabama atty general's office into a taxpayer-financed right-wing law firm." He has argued against a key part of the Voting Rights Act and was the only state atty general to argue against the Violence Against Women Act.

Who cares if he's Catholic? He'd be a disgrace on the bench if he were a Buddhist. … now House Judiciary Committee threatens to investigate sentencing records of every federal judge in the country for suspected "political" bias. This stems from Minnesota Fed. Dist. Court chief judge James Rosenbaum, who thinks sentencing guidelines for low-level drug dealers are too harsh.
Even Texas legislature decided we should provide treatment for first-time small drug offenders, rather than locking them up for years. Locking them up is getting to be a very expensive proposition in our very broke state, …
After Rosenbaum's testimony, Rep. James Sensenbrenner chaired Judiciary Committee prepared to subpoena Rosenbaum's records to see if he had imposed any "unlawfully lenient sentences." In fact he had, giving one guy 4 years (9 months below the guidelines) and another a month less that the minimum recommended.

Sentencing guidelines are consequent of 1984 crime law, passed at the height of the drug hysteria, that took effect in 1987. Rosenbaum's lawyer Victoria Toensing said: "I was present at the creation of those guidelines. May God forgive me for ever supporting them."
… TX Rep. Lamar Smith, … claims the 7 member Sentencing Commission is "systematically trying to lessen the drug penalties." … "Watch on the Rhine" quality of our public life these days deserves serious attention. Buried stories on major newspapers' back pages (show) a creepy advance of something more menacing than bad policies.
… Mussolini's definition of fascism: "Fascism should more properly be called corporatism,' since it is the marriage of govt & corporate power." …

Bush appointments avert Senate battles
1.5.06   Thomas B. Edsall Wash. Post

President Bush yesterday made a raft of controversial recess appointments, including Julie L. Myers to head the Immigration and Customs Enforcement bureau at the Dept of Homeland Security, in a maneuver circumventing the need for approval by the Senate. Myers, a niece of former Joint Chiefs of Staff chairman Richard B. Myers and the wife of the chief of staff to Homeland Security Secretary Michael Chertoff, had been criticized by GOP & Democrats who charged that she lacked experience in immigration matters.
Myers's nomination faced a bruising and potentially embarrassing fight on the Senate floor, where Democrats were prepared to argue that politics, not merit, drove her selection for an important job preventing terrorists and weapons from entering the country.

Bush appointed Tracy A. Henke as Office of State and Local Government Coordination and Preparedness exec. dir. She had been accused in her politically appointed post at the Justice Dept of demanding that information about racial disparities in police treatment of blacks in traffic cases be deleted from a news release.
The president avoided an abortion rights battle with the recess appointment of former Maryland GOP gubernatorial candidate Ellen R. Sauerbrey as assistant secretary of state for population, refugees and migration. Sauerbrey is an opponent of abortion rights.

For the Federal Election Commission, Bush picked Justice Dept employee and former Fulton County GA GOP chair Hans von Spakovsky for one of 3 openings. Von Spakovsky is widely viewed as a key player in two disputed Justice Dept decisions to overrule career staff in voting rights cases.
A Democratic vacancy will be filled by union lawyer Robert D. Lenhard. He has provoked opposition because of his participation as an attorney for the American Federation of State, Council and Municipal Employees in efforts to have the Supreme Court rule that the 2002 McCain-Feingold law is unconstitutional. Sen. John McCain R-AZ indicated that he would fight the Lenhard nomination when Democratic leaders first announced it in 2003.

McCain and Sen. Edward M. Kennedy D-MA issued statements critical of the appointments. Von Spakovsky may have undermined "enforcement of our civil rights laws," Kennedy said. "By appointing von Spakovsky, the White House missed an opportunity to fill this important position with a person clearly committed to these fundamental rights."
The other FEC appointment went to Nevada lawyer Steven T. Walther, who has close ties to Senate Minority Leader Harry M. Reid D-NV.
At the Pentagon, Bush granted recess appointments to Gordon R. England as deputy secretary of defense and Dorrance Smith, a former ABC producer, as assistant secretary for public affairs.
The recess appointments will end at the conclusion of the current congressional session in January 2007.

Karl Rove to leave White House
8.13.07   Terence Hunt
AP

Wash.D.C.   Karl Rove, President Bush's close friend and chief political strategist, announced Monday he will leave the White House at the end of August, joining a lengthening line of senior officials heading for the exits in the final year & a half of the administration.
On board with Bush since the beginning of his political career in Texas, Rove was nicknamed "the architect" and "boy genius" by the president for designing the strategy that twice won him the White House. Critics call Rove "Bush's brain".

"Karl Rove is moving on down the road," Bush said, appearing grim-faced on the White House's South Lawn with Rove at his side. "We've been friends for a long time and we're still going to be friends ... I'll be on the road behind you here in a bit," he said ruefully.
"I'm grateful to have been a witness to history. It has been the joy and the honor of a lifetime," said Rove, his voice quivering at times. "But now is the time. … At month's end," Rove said, "I will join those whom you meet in your travels, the ordinary Americans who tell you they are praying for you".

After a lengthy hug from Bush and then his wife, Laura, Rove joined them on the president's helicopter. Rove, his wife and their son were flying with Bush on Air Force One to Texas, where the president is vacationing.
A criminal investigation put Rove under scrutiny for months during the investigation into the leak of a CIA operative's name but he was never charged with any crime. In a more recent controversy, Rove, citing executive privilege, has refused to testify before Congress about the firing of U.S. attorneys.

Rove's departure reinforces Bush's lame-duck stature and declining influence, particularly with Democrats in control on Capitol hill.
"Obviously it's a big loss to us," White House deputy press secretary Dana Perino said. "He's a great colleague, a good friend, and a brilliant mind. He will be greatly missed, but we know he wouldn't be going if he wasn't sure this was the right time to be giving more to his family, his wife Darby and their son. He will continue to be one of the president's greatest friends".

Since Democrats won control of Congress in November, some top administration officials have announced their resignations. Among those who have left are White House counselor Dan Bartlett, budget director Rob Portman, chief White House attorney Harriet Miers, political director Sara Taylor, deputy national security adviser J.D. Crouch and Meghan O'Sullivan, another deputy national security adviser who worked on Iraq.
Defense Secretary Donald Rumsfeld was forced out immediately after the election as the unpopular war in Iraq dragged on. White House Chief of Staff Joshua Bolten told senior aides that if they stayed past Labor Day they would be obliged to remain through the end of the president's term in January 2009.

Rove became one of Washington's most influential figures during Bush's presidency. He is known as a ruthless political warrior who has an encyclopedic command of political minutiae and a wonkish love of policy. Rove met Bush in the early 1970s, when both men were in their 20s.
Once inside the White House, Rove grew into a right-hand man.

Rove is expected to write a book after he leaves. He disclosed his departure in an interview with The Wall Street Journal.
"I just think it's time," Rove said in an interview at his home on Saturday. He first floated the idea of leaving to Bush a year ago, the newspaper said, and friends confirmed he'd been talking about it even earlier. However, he said he didn't want to depart right after the Democrats regained control of Congress and then got drawn into policy battles over the Iraq war and immigration.
"There's always something that can keep you here, and as much as I'd like to be here, I've got to do this for the sake of my family," said Rove, who has been in the White House since Bush took office in 2001.

Rove's son attends college in San Antonio and he said he and his wife plan to spend much of their time at their nearby home in Ingram. Rove, currently the deputy White House chief of staff, has been the president's political guru for years and worked with Bush since he first ran for governor of Texas in 1993.
Even as he discussed his departure, Rove remained characteristically sunny. This quality of unrelenting optimism about the president, which matches Bush's own upbeat, never-admit-disappointment nature, has at times gotten Rove into trouble.

Up to the end of the 2006 midterm elections, the political guru predicted a Republican win. That of course was not to be, and there was grumbling that Rove wasn't on his game during those elections as much as he had been before.

In the interview, Rove predicted Bush will regain his popularity, which has sunk to record lows because of the war in Iraq. Rove also predicted conditions in Iraq would improve and that the Democrats would nominate Hillary Rodham Clinton for president, calling her "a tough, tenacious, fatally flawed candidate".
Rove does not intend to work for any candidate in the 2008 presidential election, White House press secretary Tony Snow said.

Rove testified before a federal grand jury in the investigation into the leak of the name of Valerie Plame, a CIA officer whose husband was a critic of the war in Iraq. That investigation led to the conviction of I. Lewis "Scooter" Libby on charges of lying and obstructing justice.
Plame contends the White House was trying to discredit her husband.

Attorneys for Libby told jurors at the onset of his trial that Libby was the victim of a conspiracy to protect Rove. Details of any save-Rove conspiracy were promised but never materialized.
The most explicit testimony on Rove came from columnist Robert Novak, who outed Plame in a July 2003 column. He testified that Rove, a frequent source, was one of two officials who told him about Plame. Libby, with whom he seldom spoke, was not a source.
¹

Rove, though, was not indicted after testifying 5 times before the grand jury, occasionally correcting misstatements he made in his earlier testimony. The jury in Libby's trial did not hear that testimony, nor did it hear that Rove is credited as an architect of Republican political victories and has been accused by opponents of playing dirty tricks.
All that jurors heard is that Rove leaked Plame's identity and, from the outset, got political cover from the White House. He was never charged with a crime.

    Adm. John Poindexter
Devil in the details
Seeking men of convictions
2.22.02  
American Prospect

The title sounds reassuring: Information Awareness Office. A new little bureaucracy recently created by Pentagon's Defense Advanced Research Projects Agency, this office is charged with focusing on new kinds of military threats, including terrorism. Who better to head it than a guy who himself was once a military threat to the rule of law here in America: Retired Adm. John Poindexter. Ollie North's erstwhile boss. Former Reagan national-security adviser who supervised the Iran-contra operation, selling guns to Iranians to fund an off-the-books war the contras were waging in Nicaragua, a war whose funding with federal dollars the Congress had specifically proscribed. Same John Poindexter convicted in 1990 on 5 felony counts of conspiracy, making false statements to Congress, and obstructing congressional inquiries into the affair. (Poindexter's convictions, along with North's, were later overturned by an appellate court on the grounds that he'd been granted immunity because of his forced testimony to Congress.)

War on terrorism is redemption & rehiring hall for a slew of questionable characters govt was compelled to cashier in earlier, more normal times. Poindexter's fellow contra boosters Elliott Abrams & Otto Reich already are back in the fold. North is probably making too much money in talk radio to be coaxed back into secret ops. But why not hand homeland security over to a guy who's already demonstrated his zeal (if not his expertise) for spying on Americans?

[ Iran-Contra, aka CIA fueled crack cocaine gang war, reborn by default; Bush² admin having no other contacts but those same bumbling villains to carry water for its agendas, hollow NatSec shadows. ]

Poindexter would have made a fine bookie   ¹
8.28.03   Patrick Daugherty SD Reader

San Diego, CA   In the blue corner is the disgraced, desk hugging admiral, who, not that long ago, was forced to resign as Reagan's National Security Advisor due to his part in the Iran-Contra affair. Thereafter, the flag officer was convicted of conspiracy, obstruction of justice, defrauding the govt, altering evidence, destroying evidence, lying to Congress, only escaping jail w/ the aid of luck, good lawyers and technicalities.

10 years later he's back with a new govt job, this time as director of the Pentagon's Information Awareness Office, whose mission is to "Imagine, develop, apply, integrate, demonstrate and transition information technologies, components and prototype closed loop information systems."
Which is govt blah-blah-blah for tracking every breathing human being residing in the U.S. by way of his bank account, credit cards, merchant receipts, brokerage statements, pay stubs, medical records, parking tickets, library cards, bar bills, school transcripts, e-mail, telephone calls, Net usage, utility bills, tax returns and drivers license. In other words, collect & warehouse every piece of paper or digital code that is or ever has been connected to you.

That was no problem. What got him busted (Poindexter leaves govt service 8.29.03) was his one good idea, his attempt to become a reputable bookie. The idea was to create a Policy Analysis Market. It was a market that would have "allowed trading of futures contracts based on possible political developments in several MidEastern countries".
This is govt talk for proposition bets. Poindexter's market would be an arena where one could legally buy or sell future contracts such as, "Will Yassar Arafat be assassinated before year's end? Will the Jordanian monarchy topple in the next 3 months? Will there be an attack on U.S. soil by year's end?"

If given a choice, and a choice was given, between being outraged at the Pentagon's plans for collecting every byte & lick of your private life or being outraged at the Pentagon's plans for running a sportsbook, national politicians and the American public came down hard on sportsbooks.
Using the model of a futures market as a predictor of future events has been around for a while. The template for this is the Iowa Election Markets, run by faculty at the University of Iowa. Since 1988, these academics have provided markets for 41 elections in 13 countries. You, me or anybody buys & sells future contracts on candidates, their vote share and so on. Right now, there are markets on the California (gubinatorial) recall, 2004 general election vote share and so on. Real money, real profits, real losses, real legal.

Here's the point: the Iowa Election Market has been more accurate than any professional pollster, and this is where Poindexter came in. Something about the market, as a whole, knowing more than the individual, the market being able to predict future events more astutely than anyone else.
It must have been one of those feet-on-the-desk moments when Poindexter conceived the following daydream. "We can start a futures market for less than one million bucks. We'll limit contracts to $100 in order to keep the action calm and see what happens. Maybe there's something to this random-pool-of-human-beings-motivated-by- profit stuff. What the hell? Maybe they'll know where Saddam is hiding."

The good admiral must have been surprised at the shitstorm his tiny futures market provoked. As I recall, "trading in death" was one of the favored charges leveled against him.
Of course, humans trade on death. Humans love to trade on death or anything else. They'll trade on commodities, currencies, whether the movie "Hulk" will rake in $202.45 million in its first 4 weeks of release. They'll trade on whether Kobe Bryant is guilty or not, whether Saddam will outlive bin Laden, or if bin Laden outlives Saddam. They'll trade on whether J-Lo & Ben Affleck will marry before Demi Moore does. They'll trade on if the Dow Jones closes above or below a certain number. They'll trade on which actor will win an Emmy for comedy.

One Internet pioneer for these kinds of markets is tradesports.com, a Dublin Ireland based futures market backed by the country's largest bank. Most of their contracts are made up using a 0 to 100 method. That is, suppose the trading price for the San Diego Chargers winning the Super Bowl is 12. If the Bolts pull that off, then every contract acquired for the price of $12 will return a profit of $88.
I was being optimistic. Actually, today's tradesports figures show the Chargers' last contract sold for $2. If Admiral Poindexter is right, Charger fans are in for another long season.

Secret talks w/ Iranian arms dealer
8.8.03   K.Royce, T.M.Phelps, C.Gordon Newsday

Wash.D.C.   Pentagon hardliners pressing for regime change in Iran held secret & unauthorized meetings in Paris with a controversial arms dealer who was a major figure in the Iran-contra scandal, according to administration officials, who said at least 2 Pentagon officials working for Undersecretary of Defense for Policy Douglas Feith have held "several" meetings with Manucher Ghorbanifar, Iranian middleman in U.S. arms-for-hostage shipments to Iran in the mid-1980s

The admin officials who disclosed the secret meetings to Newsday said the talks with Ghorbanifar were not authorized by the White House and appeared to be aimed at undercutting current sensitive back channel negotiations with the Iranian regime.
"They [the Pentagon officials] were talking to him about stuff which they weren't officially authorized to do,"said a sr admin official. "It was only accidentally that certain parts of our govt learned about it." The official would not identify those"parts "of the govt, but a former intelligence official confirmed they are the State Dept, the CIA and the White House itself.

The sr official and another admin source who confirmed that the meetings had taken places aid that the ultimate policy objective of Feith and a group of neo-conservatives civilians inside the Pentagon is regime change in Iran. This second official said, "United States policy officially is not regime change, overtly or covertly, "but to engage Iranian officials in dialogue over contentious issues, such as Iran's nuclear weapons program, and to press the regime to extradite al-Qaida operatives.

He said that the immediate objective of the Pentagon hardliners appears to be to "antagonize Iran so that they get frustrated and then by their reactions harden U.S. policy against them." He confirmed that Sec.State Powell complained directly to DefSec Rumsfeld several days ago about Feith's policy shop conducting missions that countered U.S. policy.
A spokesman for Feith's NearEast, SouthAsia and SpecialPlans office, controversial intelligence office that sources said played a key role in the Ghorbanifar contacts, did not respond Thursday to an e-mailed inquiry about those contacts. Newsday's inquiry was e-mailed at the spokesman's request.

The sr admin official identified 2 of the Defense officials who met with Ghorbanifar as Feith's top MidEast specialist Harold Rhode, and Defense Intelligence Agency analyst on loan to the undersecretary's office Larry Franklin. Rhode recently acted as a liaison between Feith's office, which drafted much of the admin post-Iraq planning, and Ahmed Chalabi, a former Iraqi exiled disdained by CIA & State Dept but groomed for leadership by the Pentagon.

Rhode is a protege of Michael Ledeen, neo-conservative who was National Security Council consultant in the mid- 1980s when he introduced Ghorbanifar to Oliver North, National Security Council aide, and others in the opening stages of the Iran-contra affair.
A former CIA officer who himself was involved in some aspects of the Iran-contra scandal said that current intelligence officers told him it was Ledeen who reopened the Ghorbanifar channel with Feith's staff. Ledeen, scholar at the American Enterprise Institute in Washington and ardent advocate for regime change in Iran, would neither confirm nor deny that he arranged for Ghorbanifar meetings. "I'm not going to comment on any private meetings with any private people," he said."It's nobody's business."

Ghorbanifar,said to live in Paris, could not be reached for comment Thursday. Ledeen once described him as "one of the most honest, educated, honorable men I have ever known." But CIA, noting he had failed 4 polygraph tests administered during the arms-for-hostages deals, warned its officers not to deal with him, asserting he "should be regarded as an intelligence fabricator and nuisance."
The sr admin official said he was puzzled by the resurfacing of Ghorbanifar after all these years. "It would be amazing if anybody in govt hadn't learned the lessons of last time around," hesaid."These guys [including Ledeen] should have learned it, 'cause they lived it."


Chavez calls Negroponte ‘professional killer’   Venezuelan leader also says enemies, including CIA, are plotting to kill him   3.4.07   AP

Caracas, Venezuela   President Hugo Chavez on Sunday said he believes enemies including the CIA are out to kill him, and called U.S. diplomat John Negroponte a “professional killer.” Chavez said Venezuelan officials have intelligence that associates of jailed Cuban anti-communist militant Luis Posada Carriles also are involved in plotting to assassinate him.
He said the death plot idea has “gained weight” due to various factors, including the recent appointment of former director of national intelligence Negroponte as deputy to Secretary of State Condoleezza Rice.

“Who did they swear in … there at the White House as deputy secretary of state? A professional killer: John Negroponte,” Chavez said.
Chavez did not elaborate, but his govt has previously accused Negroponte of playing a key role in the Contra war against the leftist Sandinista government of Nicaragua when he served as ambassador to Honduras, haven for clandestine Contra bases, from 1981 to 1985.

U.S. Embassy officials could not immediately be reached for comment, but they have denied Chavez’s repeated accusations that they are plotting to oust him. Chavez was asked about reports of assassination plots during a televised interview.
“They have assigned special units of the CIA, true assassins, who go around not only here in Venezuela, in Central America, in South America,” Chavez said, without elaborating.
He added that while former CIA operative Posada Carriles remains jailed in the U.S. on immigration charges, “Posada Carriles’ people are very active in Central America and searching for contacts in Venezuela … They are going around searching for explosives in large quantities, thinking about a sort of car bombing or searching for ground-to-air missiles, thinking about the presidential plane.”

Chavez did not give details. His govt has demanded that the U.S. extradite Posada Carriles, a naturalized Venezuelan, to stand trial for allegedly masterminding the 1976 bombing of a Cuban airliner that killed 73 people. Posada Carriles denies involvement in that incident.

Bush LatinAm advisers' IranContra roles
Colin Powell, Sec.State
Sec.Defense military asst (known as "filter"). Autobio: Pentagon's "point man" for U.S. Contra support. Key role funding Contras via illegal arms sales to Iran.

John Maisto, Natl Security Council Adviser Inter-American affairs, hence cohort of  Narc czar J.P. Walters
Nicaragua ambassador during U.S. backed guerrilla war against Sandinista govt.

John Negroponte, DNI, U.S. UN ambassador   FIPF
Honduras ambassador 1981-85   Oversaw military buildup of country into anti-Sandinista contras' refuge

  A carefully crafted deception
6.18.95   Ginger Thompson & G.C.Baltimore Sun pA1

Tegucigalpa, Honduras   A dangerous truth confronted John Dimitri Negroponte as he prepared to take over as U.S. ambassador to Honduras late in 1981. The military in Honduras, the country from which the Reagan administration had decided to run the battle for democracy in Central America, was kidnapping & murdering its own citizens. "GOH [Govt of Honduras] security forces have begun to resort to extralegal tactics, disappearances &, apparently, physical eliminations 'to control a perceived subversive threat','' Negroponte was told in a secret briefing book prepared by embassy staff. The assertion was true, and there was worse to come.

Time & again during his tour of duty in Honduras 1981 to 1985, Negroponte was confronted with evidence that a Honduran army intelligence unit, trained by the CIA, was stalking, kidnapping, torturing and killing suspected subversives.
  [ Subversive meaning able to read & write]

14-month investigation by The Sun, which included interviews with U.S. & Honduran officials who could not have spoken freely at the time, shows that Negroponte learned from numerous sources about the crimes of the unit called Battalion 316. The Honduran press was full of reports about military abuses, including hundreds of newspaper stories in 1982 alone. There were also direct pleas from Honduran officials to U.S. officials, including Negroponte. A disgruntled former Honduran intelligence chief publicly denounced Battalion 316. Relatives of the battalion's victims demonstrated in the streets and appealed to U.S. officials for intervention, including once in an open letter to President Reagan's presidential envoy to Central America.

Rick Chidester, then jr political officer in Tegucigalpa U.S. Embassy, told The Sun that he compiled substantial evidence of abuses by the Honduran military in 1982, but was ordered to delete most of it from the annual human rights report prepared for the State Dept to deliver to Congress. Those reports consistently misled Congress & the public. "There are no political prisoners in Honduras,'' the State Dept asserted falsely in its 1983 human rights report.
Reports to Congress were crafted to convey Honduran govt & military as committed to democratic ideals. It was important not to confront Congress with evidence that the military was trampling on civil liberties & murdering dissidents. The truth could have triggered congressional action under the Foreign Assistance Act, which generally prohibits military aid to any govt that "engages in a consistent pattern of gross violations of internationally recognized human rights.''

Fact vs. fiction
A comparison of the annual human rights reports prepared while Negroponte was ambassador with the facts as they were then known shows that Congress was deliberately misled.

Assertion   "Student, worker, peasant and other interest groups have full freedom to organize & hold frequent public demonstrations without interference. … Trade unions are not hindered by the govt.''
State Dept Country Reports on HRts 1982
Fact   Highly publicized abductions of students and union leaders that year included:
  • Saul Godinez, elementary school teacher & union activist, abducted 7.22.82;
  • Eduardo Lanza, medical student & general secretary of Honduran Federation of University Students, kidnapped 8.1.82;
  • German Perez Aleman, leader of an airport maintenance workers union, abducted 8.18.82;
  • Hector Hernandez, president of a textile workers union, abducted 12.24.82
All are still missing and presumed dead.

Assertion   "Legal guarantees exist against arbitrary arrest or imprisonment, and against torture or degrading treatment. Habeas corpus is guaranteed by the Constitution, and Honduran law provides for arraignment within 24 hours of arrest. This appears to be the standard practice.''
State Dept Country Reports on HRts 1982
Fact   "The court got so many petitions of habeas corpus. But whenever we sent them to the police, the police would say they did not have the prisoners,'' Rumaldo Iries Calix, a justice of the Supreme Court in 1982, said in an interview with The Sun. "They had moved the prisoners to some secret jail. It was like a game to them.'' The experience of Zenaida Velasquez was typical. Her brother, Manfredo, a 35-year-old graduate student, teacher and political activist, was abducted by Battalion 316 on 9.12.81, and has not been seen since. She filed habeas corpus petitions on her brother's behalf on 9.17.81, 2.6.82 and 7.4.83, asking that he be brought before a court and his detention justified. "It didn't do any good at all,'' she said.
Assertion   "There have been reports in the press & by local sources of the use of torture by local police forces during interrogation. Honduran officials assert that it is a common practice for persons held in connection with politically motivated crimes to allege that they were tortured during the investigation & interrogation process.''
"The Honduran armed forces chief, Gustavo Alvarez, recently issued a public statement denying that the govt used torture and specifically stated that torture was not to be used on prisoners.''
State Dept Country Reports on HRts 1982
Fact   "Alvarez had made it clear to Ambassador Negroponte's predecessor, Jack Binns, that he intended to use Argentine-style, "extra-legal'' means to eliminate suspected subversives. Battalion 316 was created largely for this purpose. According to Florencio Caballero, a former sergeant in Battalion 316, Alvarez demanded torture as "the quickest way to get information.'' In one highly publicized case of torture &aamp; intimidation, human rights atty Rene Velasquez (no relation to Manfredo) was arrested 6.1.82 in front of his law office in Tegucigalpa and taken to a secret jail where he was kept for 4 days. "They undressed me, they tied my hands and they put a rubber mask over my face,'' he said. "They put something on me to attract flies, because those were my companions for four days. I was beaten a lot; they hit me in the ribs & stomach. & I could barely endure the pain.''
Assertion   "Access to prisoners is generally not a problem for relatives, attorneys, consular officers or international humanitarian organizations.''
State Dept Country Reports on HRts 1982
Fact   Not only were they denied access, dozens of relatives of the "disappeared'' told The Sun, but police would not even tell them if or where their relatives were being held. Fidelina Perez & Natalia Mendez visited every police station in Tegucigalpa after finding out that their sons, who were student leaders, had been arrested on a bus as it crossed the border from Nicaragua 1.24.82. Their sons have not been seen since and are presumed dead. "[The police] all said they had no information. They had not seen them,'' Perez said. "The police told us to go and look for them in Cuba or Nicaragua.'' Said Mendez: "They told us, why did we keep looking for them when they were already dead?''
Assertion   "Sanctity of the home is guaranteed by the Constitution and generally observed.''
State Dept Country Reports on HRts 1982
Fact   Raids of homes without warrants were common in Honduras. The military stormed neighborhoods in search of Communist safe houses. "They would burst into homes of people who were completely innocent and search for evidence,'' said Honduran journalist Noe Leyva. "Sometimes if they found Marxist books or pamphlets, they would arrest the resident without any warrant. It was ridiculous.'' Leyva, now an editor at the Honduran newspaper El Tiempo, reported on human rights abuses for that newspaper in the early 1980s. In July 1982, Oscar Reyes, a prominent journalist, was seized from his home along with his wife in an illegal raid. Upon their release from prison, the Reyeses found their home ransacked.
Assertion   "In rare cases in which members of the security forces have been accused of murder, the govt has brought the perpetrators to justice.''
State Dept Country Reports on HRts 1983
Fact   "I don't recall one case of that,'' said Edmundo Orellana, Honduran atty general. Rumaldo Iries Calix, the former Honduran Supreme Court justice, said charges sometimes would be brought against low-level officers, but that the cases were always dismissed. "No judge dared to convict a military official,'' Iries said. "There was so much repression against anyone who opposed the military.''
Assertion   "There are no political prisoners in Honduras. Individuals are prosecuted not for their political beliefs but rather for criminal acts defined in the penal code.''
State Dept Country Reports on HRts 1983
Fact   Orellana, who is investigating the disappearances of Battalion 316's victims, shakes his head in amazement at that assertion. "This is totally untrue,'' he said. "There were political prisoners, and the disappeared are the proof. They followed, arrested & executed people who just thought differently.'' One senator serving at time as member of Senate intelligence committee describes what difference it might have made if the human rights reporting had been more truthful. "I think its extremely important that the State Department be right on human rights, said Sen. Patrick J. Leahy D-VT. "If we told the truth about Honduras and the whole Central American policy, … billions of American tax dollars would have been saved,
[ Grounds for class action suit for fraud against Negroponte ]
a large number of lives would have been saved, and the govts would have moved toward democracy quicker.''

Negroponte replies
Negroponte, now U.S. ambassador to the Philippines, has declined repeated phone requests & in writing since July for interviews about this report. However, on Thursday, after publication of 3 parts of The Sun's series, he issued a written statement:
"Under my leadership, the embassy worked to promote the restoration and consolidation of democracy in Honduras, including the advancement of human rights.'' He added, "At no time during my tenure in Honduras did the embassy condone or conceal human rights violations. To the contrary, the embassy & the State Dept cooperated with the Honduras govt to help remedy recognized deficiencies in the administration of justice.''

Negroponte's arrival in Honduras coincided with the Reagan administration's decision to reduce the emphasis that the Carter administration had put on rights issues in dealings with allies. The new policy had been made clear to Negroponte's predecessor, Ambassador Binns, a Carter appointee, after he repeatedly warned of human rights abuses by the Honduran military. In a June 1981 cable obtained by The Sun, Binns reported:
"I am deeply concerned at increasing evidence of officially sponsored/sanctioned assassinations of political and criminal targets, which clearly indicate [Govt of Honduras] repression has built up a head of steam much faster than we had anticipated.''

The reaction was swift & unexpected. Binns was summoned to Washington by Thomas O. Enders, new assistant secretary of state for inter-American affairs. "I was told to stop human rights reporting except in back channel. The fear was that if it came into the State Dept, it will leak,'' Binns recalled. "They wanted to keep assistance flowing. Increased violations by the Honduran military would prejudice that.'' "Back channel'' messages are unofficial or informal communications, often in code, sent outside the usual distribution system to restrict circulation of information. Enders confirmed the 1981 meeting with Binns. "I told him that whereas human rights violations had been the single most important focus of the previous administration's policy in Latin America, the Reagan administration had broader interests,'' Enders said. "It believed that the most effective way to overcome civil conflicts & human rights violations was to promote democratically elected govts and that should be his point of focus.''


Ample evidence of abuses
There was nothing rare or vague about the evidence of military abuses that confronted Negroponte from the time he took over as ambassador Nov. 1981. In 1982, his first full year in Honduras, more than 300 articles in the local press included: "There is no way U.S. officials in Honduras during the early 1980s can deny they knew about the disappearances,'' said Jaime Rosenthal, a former vice president of Honduras & owner of the daily newspaper El Tiempo. "There were stories about it in our newspaper & most other newspapers almost every day. [The U.S.] had an embassy staff here that was larger than most other embassies in Latin America,'' Rosenthal said. "`If they say they did not know, that is bad, because it would mean they were incompetent.''

Evidence came from other sources.
Efrain Diaz Arrivillaga, then a delegate in the Honduran Congress and a voice of dissent in the prevailing atmosphere of intimidation, said he spoke several times to Negroponte about the military's human rights abuses. Diaz said that in meetings at the U.S. Embassy and at social occasions, he rebuked Negroponte for the U.S. govt's refusal to take a stand against the repression. The Honduran legislator said Negroponte reproached him for refusing to take a strong stand against Communists who were trying to seize control of Honduras. "I remember Negroponte told me, 'You and others, what you are proposing is to let communism take over this country & over the region,' " Diaz said. "The most important thing to him was to win public support for the presence of the U.S. military in Honduras,'' Diaz said. "Their [the U.S.] attitude was one of tolerance and silence. They needed Honduras to loan its territory more than they were concerned about innocent people being killed.''
Accusations against the military also came from former insiders. Aug. 1982, Col. Leonidas Torres Arias, ousted chief of intelligence for the Honduran military, issued a public warning about Battalion 316. In a news conference in Mexico City, he told reporters about "a death squad operating in Honduras led by armed forces chief General Gustavo Alvarez.'' The story made headlines in Mexico and across Central America. A reporter from the Honduran newspaper El Tiempo asked Negroponte about the colonel's allegations. Said Negroponte in an article that appeared 10.16.82 "Democracy is being consolidated in this country. The armed forces have supported that process. It was the armed forces that turned over power to the civilian constitutional leaders of Honduras. So, I have a lot of difficulty taking those kinds of accusations seriously.''

The evidence was also to be found in the streets of Tegucigalpa. Each week, hundreds marched through the streets of the capital demanding the release of the disappeared. Sometimes they marched past the U.S. Embassy, a hulking concrete complex on La Paz Avenue. The Committee of the Relatives of the Disappeared in Honduras (COFADEH) turned to the U.S. govt for help. 6.13.83, COFADEH addressed an open letter to Richard Stone, President Reagan's special envoy to Central America, complaining that the Honduran military was holding dissidents in clandestine jails. "More than 40 people have been illegally arrested & tortured,'' the letter said. "Some have never been heard from since their arrest.'' The letter was published in El Tiempo, one of the largest newspapers in Honduras. The U.S. govt never responded to the committee's pleas. In an interview, Stone said that he did not recall the letter.

Spurned at the embassy
Oct. 1983, members of COFADEH visited the U.S. Embassy to ask for help. They said they met with Scott Thayer, a junior political officer assigned to monitor human rights. Among the relatives who attended was Bertha Oliva, whose husband, Tomas Nativi, had been missing for more than 2 years. Also there was Zenaida Velasquez, whose brother, Manfredo, had been missing for more than 2 years. The parents of Eduardo Lanza attended. Lanza, a medical student, had been a prominent student leader when he was kidnapped by Battalion 316 Aug. 1982. The group told Thayer that they had searched jails & hospitals across Honduras for their missing relatives, that military officials only laughed at them and that judges were too afraid to help. They begged the embassy to use its influence with Honduran officials to win their relatives' freedom.
Zenaida Velasquez remembers that Thayer listened politely, then dismissed their allegations. "He said he knew Honduras had a democratic govt and [that] those kinds of practices were not going on,'' Velasquez said. "They were such a bunch of liars it was disgusting.''
Thayer, now a political officer at the U.S. Embassy in Madrid, Spain, said that meeting with Hondurans about human rights abuses "was part of my job. I recall having meetings like that, but I can't recall that specific meeting.'' Oliva still fumes over the meeting. In an interview in Tegucigalpa, she said that the embassy official acted as if they were fabricating the disappearances of their relatives. "He was very cold, very cold,'' she said, pursing her lips. "Any kindness was gone. He did not even smile at us.'' Roberto Becerra, father of the student Eduardo Lanza, said he came away from the meeting with a hopeless feeling. "We felt like we were screaming in the desert. No one heard us. No one would help us.''

In at least one case, Negroponte was confronted with evidence of abuse that he could not ignore, arrest & torture in July 1982 of journalist Oscar Reyes and his wife, Gloria. Reyes, founder of the journalism school at the National Autonomous University of Honduras, was openly sympathetic to Marxist Sandinistas in Nicaragua and had written numerous newspaper columns criticizing the Honduran military. The abduction of the Reyeses sparked newspaper stories & raucous student protests. The Reyeses said they were locked in a secret cell for a week, and beaten & tortured with electric shocks. At the U.S. Embassy, there was fear that if the story got to the U.S. it might damage carefully assembled public support for the Central America program operating out of Honduras. Cresencio S. Arcos, then the embassy press spokesman, alerted Negroponte that the Honduran military had abducted the Reyeses.
"If they do this guy, then we're in trouble,'' Arcos warned. "We cannot let this guy get hurt. … It would be a disaster for our policy. "The ambassador did approach [General] Alvarez about this to manifest his concern,'' Arcos said. The case clearly shows that Negroponte knew of the Reyeses' abduction and that the ambassador acted in such cases when he felt compelled to do so. Reyes & his wife were released from the clandestine jail after a week. They were taken before a public court and sentenced to 6 months in prison. Two weeks before their sentences ended, they were allowed to leave for the U.S. on condition that they keep quiet about the torture they endured. That condition was laid down personally by Alvarez, said the Reyeses, who now live in Vienna, Va.
The U.S. Embassy also kept quiet publicly about the Reyes case. It was not mentioned in the human rights report for 1982, even though it was widely covered in the Honduran press and illustrated the Honduran military's violation of human rights on several counts: illegal abduction, secret incarceration, torture and suppression of press freedom. Instead, the 1982 report asserted: "No incident of official interference with the media has been recorded for several years.''

Inside the embassy
Negroponte's aides at the embassy told The Sun that they knew about serious human rights abuses by the Honduran military, and that the violence was a subject of constant discussion. One of those aides was a junior political officer, Rick Chidester, who was assigned in 1982 to gather information for the embassy's annual report on human rights, a task that usually fell to a junior officer. Chidester, now 43 & a private businessman, said that while in Honduras, he interviewed human rights advocates & journalists who provided him with information that the Honduran military was illegally detaining, torturing & executing people. "I had allegations about vans coming up to police cells and taking out people they [the Honduran military] didn't want … and shooting them,'' Chidester said. "`I had allegations that, as part of the interrogation techniques, torture was being used.'' He said he included the allegations in his draft of the 1982 report.
A supervisor, who Chidester will not name, demanded proof, sworn testimony or photographs of torture victims. Chidester said he was admonished for basing his report on rumors when he was unable to produce such evidence. Chidester said he argued that while he had not interviewed torture victims, the allegations came from too many credible sources to be ignored, and that the reports were not supposed to be limited to provable facts. "While the State Dept is not an investigative body, we're supposed to analyze political events & identify trends,'' Chidester said. "Our analysis is valuable, even if based on opinion and not admissible as proof in a court of law.'' His arguments failed.
By the time the report reached the U.S. Congress, the serious accusations against the Honduran military had been removed. Allegations that remained were described as unsubstantiated or as isolated abuses that had been dealt with swiftly by the Honduran government. Overall, the report portrayed Honduras as an emerging democracy where the civilian govt & military respected human rights. The report was such a misrepresentation of the facts that Chidester recalls joking with others in the embassy: "What is this, the human rights report for Norway?''

An official explanation
While Negroponte has refused to be interviewed by The Sun, his boss at the time of his appointment to Honduras described the priorities on human rights. Thomas Enders, the asst secretary of state who told Negroponte's predecessor to stop reporting rights violations through normal channels, said it was crucial to keep U.S. aid flowing to Honduras. "What we were attempting to do was, on the one hand, to maintain our ability to act in Central America. That is, our congressional authority to send economic & military aid, so we avoided direct public confrontations against the military in El Salvador & Honduras,'' he said. "And at the same time, privately we were spending an enormous amount of effort in order to change the way they looked at how they behaved. There was endless jawboning.''
Instead of telling Congress what was going on in Central America, the Reagan administration employed the State Dept human rights reports as instruments to advance policy objectives. Consequently, the human rights reports differed sharply in tone, depending on whether the govt was a friend or foe. The 1982 report on Nicaragua, where the U.S. was trying to topple the Marxist Sandinista regime, made strong charges against that govt.
[ That govt brought literacy & universal health care to majority of population for first time in national history while fighting for independence against U.S. mercenaries ]

A section titled "Respect for the Integrity of the Person, Including Freedom from Killing'' said: "There is credible evidence that security forces have been responsible for the death of a number of detained persons in 1982.'' In the same section of the Honduras report for 1982, the State Department said: "Allegations that death squads have made their appearance in Honduras have not been substantiated.'' Cresencio Arcos, press spokes-man in the U.S. Embassy in Tegucigalpa from June 1980 to July 1985 and U.S. ambassador from Dec. 1989 to July 1993, explained the difference:
"Invariably, the result in this process was to magnify your enemies' misdeeds and minimize your friends' misdeeds,'' he said. Amb. Negroponte also made numerous public statements praising Honduran military for supporting civilian govt and for respecting the rights of its people. In a letter to NYTimes, published 9.12.82, he wrote: "Honduras' increasingly professional armed forces are dedicated to defending the sovereignty and territorial integrity of the country, and they are publicly committed to civilian constitutional rule.'' In Oct. 1982, he wrote to The Economist: "Honduras' increasingly professional armed forces are fully supportive of this country's constitutional system.'' That was the same year journalist Oscar Reyes and his wife were abducted & tortured by the Honduran military for a week because of articles he had written.
8.12.83, the LATimes published a Negroponte column in which he acknowledged that there were "credible allegations of some disappearances.'' However, he added: "There is no indication that the infrequent human rights violations that do occur are part of deliberate govt policy."
[ CIA torture trainers instructed the military, not the civil govt. The torture was practice, not policy. ]
"Indeed, disciplinary action has been taken against members of the police & military (including officers) who have abused their authority.''

That year, in a case that gained notoriety, 24yr old leftist Ines Consuelo Murillo was held for more than 11 weeks naked, beaten, suffocated, shocked, fondled & threatened with rape. To this day, none of her torturers has been punished. Arcos said that Negroponte privately expressed concerns about abuses to Honduran officials. "The ambassador did pressure the Hondurans. Not publicly. Quietly,'' Arcos said. "We were concerned by the issue. Reports [of human rights abuses] were increasing.'' Even years after he left Honduras, Negroponte would not publicly acknowledge the crimes of kidnapping, torture and murder that were committed by the Honduran military.
During his Senate Foreign Relations Committee confirmation hearing as ambassador to Mexico in 1989, Negroponte was asked about Battalion 316 and its abuses. "I have never seen any convincing substantiation that they were involved in death squad-type activities,'' he said.


Otto Juan Reich, Asst Sec.State W.Hem.Affairs   FIPF
The Bush admin is engaging in damage control for their questionable involvement in the failed 2 day coup against democratically elected govt of Vz Pres. Chavez. Key player Otto Reich attempted to replace Chavez with an oligarchy of business, military and wealthy elites. Scrambling to distance themselves from botched overthrow of democratically elected govt, Bush admin admitted Reich called coup leader, Carmona, and asked him not to dissolve the National Assembly because it would be a "stupid thing to do". Next day the administration revised their story and said Reich only asked our ambassador to relay that message to Carmona. NYTimes noted that the disclosure raised questions as to whether Mr. Reich & other admin officials were stage-managing Carmona takeover . Although Bush admin admits their desire to replace the Chavez govt because of its opposition to U.S. policies and friendship with countries like Cuba & Iran, they now insist they were not involved in the armed coup but admit talking with various Vz officials prior to the coup incl military head Gen. Lucas Romero Rincon who met with Pentagon official Rogelio Pardo-Maurer, former close associate of the U. S. supported Contra forces in Nicaragua.

Per NYTimes, Reich told congressional aides the admin received reports "foreign paramilitary forces, suspected to be Cuban, were involved in the bloody suppression of anti-Chavez demonstrators, in which at least 14 Vz people were killed. Reich, former U.S. Amb. to Vz and lobbyist with Vz ties to Mobil Oil, further told Cong. staffers Chavez meddled with historically independent state oil co., provided haven to Colombian guerillas, and bailed out Cuba with preferential rates on oil. … Senate Foreign Relations Committee had examples of Reich's malfeasance to ask him about when he was the dir. of State Dept Office of Public Diplomacy (OPD). 9.30.87 Republican appointed U.S. comptroller general found Reich had done things as director of the OPD that were "prohibited, covert propaganda activities, "beyond the range of acceptable agency public information activities...". The same report said Mr. Reich's operation violated "restriction on State Dept's annual appropriations prohibiting use of federal funds for publicity or propaganda purposes not authorized by Congress." Reich used covert propaganda to demonize democratically elected Sandinista govt of Nicaragua and establish the Contras as fearless freedom fighters to make the U.S. public afraid enough of the Sandinistas to get Congress to fund the Contras directly. Boland Amendment passed by Congress in 1982 prohibited U.S. funds from being used to overthrow the Nicaraguan govt. Meanwhile, Contras were illegally armed by the Reagan admin via the Iran-Contra arms deal.

On night of Reagan's 1984 re-election, Reich's office put out news that "intelligence sources" revealed Soviet MIG fighter jets were arriving in Nicaragua. Andrea Mitchell interrupted election night coverage on NBC to give the phony report. This resembles Joseph Goebbel's fabrication that Polish troops had attacked German soldiers to give Third Reich an excuse to launch the Nazi blitzkrieg into Poland to begin World War II in 1939. Other Reich prevarications given to media sources incl Nicaragua had been given chemical weapons by the Soviets, per Miami Herald; and Sandinista leaders were involved in drug trafficking per Newsweek magazine.

First State Dept Office of Public Diplomacy for Latin America & Caribbean dir. 1983-86. Engaged in "prohibited, covert propaganda activities" to promote Reagan policies toward Nicaragua. Maintained private network of individuals & organizations coordinated with & sometimes directed by Col.Oliver North as well as other NSC officials that raised & spent funds for influencing congressional votes & U.S. domestic news media.
Right-wing Cuban American & former Venezuela ambassador. Dallas Morning News Bush depending heavily on Cuban-Americans for key foreign policy advice. §
Ideology Triumphs Ctr for Intl Policy GAO rpt
    Dems criticize apparent Bush choice
    3.9.01   Carolyn Skorneck AP
Wash.D.C.   Expected nomination of Cuban-born Otto J. Reich as State Dept's top Latin America official is drawing Democratic criticism based on his role in the 1980s Central American wars.
[ aka U.S. military intervention against democratic revolutions ]

Senators John Kerry D-MA & Christopher Dodd D-CT are trying to squelch nomination of the staunchly anti-Castro businessman & lobbyist by publicly criticizing Reich before he is named. "The issue is not his conservative politics", Kerry said Friday. It was his central part in "deeply divisive'' policies and domestic propaganda his office allegedly generated to support Reagan administration C.Am policies in 1980s. Kerry & Dodd are influential members of the evenly divided Senate Foreign Relations Committee which would handle the nomination if Pres. GWBush selects Reich as asst sec of state for Western Hemisphere affairs. Marc Thiessen, spokesman for committee chair Jesse Helms R-NC, dismissed the criticism, saying, "This is all about Cuba'' & Reich's adamant opposition to Castro. If Reich gets the job, Thiessen said, "he would probably be one of the most qualified people ever to hold the post.''
[ Qualified is no assurance of trustworthy. He aided violation of Boland Amendment & abetted South Central L.A. crack; Freeway Rick=O.Blandon=O.North=O.Reich ]

Support for the former ambassador to Venezuela is also strong among fellow Cuban-Americans in Congress. "Otto is a good fit with the president and is a good team player as well as a person who has forward-thinking, innovative ideas on how to revamp U.S.-Latin American policy,'' Rep. Ileana Ros-Lehtinen said Friday in phone interview from Miami. The Democrats' concerns over Reich focus on his leadership of the State Dept's one-time Office of Public Diplomacy for Latin America & Caribbean. The office, which Reich led from its inception in June 1983 until January 1986, was accused of illegal, covert domestic propaganda against Nicaragua's leftist Sandinista govt and in favor of Contra rebels. Reich denied any wrongdoing. The office "was one of the most open operations the State Dept had,'' he said in 1987. Reich did not respond Friday to calls to his RMA Intl office in suburban Alexandria VA
Kerry, who led early investigations in the 1980s into whether the U.S. govt was secretly arming the Contras, remains unconvinced. "Revelations that his office was the genesis of acts of propaganda not just prohibited in this country, but which reflect a kind of carelessness about the truth, ought to be of concern to any lawmaker,'' Kerry said.
[ Propaganda & carelessness with truth is a federal govt sine qua non. Indict them all. ]

Eric Olson of liberal Washington Office on Latin America said Reich's background makes him "hugely controversial in Latin America'' and "not a good choice'' given Bush's desire to establish closer relations there. When Reich arrived in Caracas in 1986, he encountered official hostility because he was thought to be a right-wing extremist. Before he left in 1989, however, the country had given him its highest decoration. Critics also questioned Reich's lobbying work. He has lobbied for Bacardi-Martini, whose competitors can be sued for doing business in Cuba under Helms-Burton Act, which Reich played a role in writing. And his firm has lobbied to sell Lockheed-made F-16 fighters to Chile.

Otto Reich is vice chairman of Worldwide Responsible Apparel Production or WRAP, a clothing- industry front founded about a year ago to undermine the growing antisweatshop movement. Reich joined WRAP at its inception, associating himself with an operation that connects some of the unsavory elements of the cold war with a new, PR-driven approach to sustaining nonunion sweatshop production. WRAP, the creation of the American Apparel and Footwear Association, purports to be a global network that monitors labor conditions in garment factories around the world. According to AAFA chairman William Compton, speaking at the International Apparel Federation Conference, "The best way to achieve [better working conditions in factories] is through our commitment to a comprehensive and independent factory certification program like WRAP." However, WRAP is widely viewed by antisweatshop groups as little more than a distracting public relations effort, neither comprehensive nor independent. According to Terry Collingsworth, attorney with the Washington-based International Labor Rights Fund, a major force behind child labor and sweatshop monitoring, WRAP was "set up as an industry-dominated project to avoid outside legitimate monitoring. In short, it's a dodge and is so regarded by everyone except the industry."
According to one garment union official, WRAP does not represent the entire industry. Its membership consists largely of low-cost US manufacturers with overseas manufacturing operations, including such industry giants as St. Louis-based Kellwood; Sara Lee; the Chicago- based owner of Hanes, L'eggs and other brands; and VF, formerly Vanity Fair, a North Carolina- headquartered multinational. According to an April 2000 report by the Toronto-based Maquila Solidarity Network, the WRAP program has a number of glaring deficiencies: In short, says the Network, "If WRAP certification becomes widespread, the possible appearance of [its] sweat-free labels on clothing could undermine any attempts to get other more stringent standards adopted." Exactly why Otto Reich is serving as WRAP's vice chairman isn't too clear. He has no background in either the apparel industry or promoting worker rights. What he does have, however, is a connection to WRAP's peculiar leadership. WRAP's chairman, Joaquin "Jack" Otero, former AFL-CIO executive council member, was a leading light in the 1990 Labor Committee for a Free Cuba, which received US government funding through the AFL's American Institute for Free Labor Development. AIFLD was one of the AFL-CIO's cold war overseas institutes, set up to fight communism by fighting communist-influenced unions around the world. It had close connections to the CIA and was funded by the US government--mostly through USAID-- and during the 1980s and 1990s it also received funds from the National Endowment for Democracy. AIFLD was headed by William Doherty Jr. His son, Lawrence, who also worked for AIFLD, is now the executive director of WRAP. Lawrence describes himself as a former "labor guy," although what labor work he did other than run AIFLD programs in Latin America is not on his bio.
According to a statement by the International Labor Rights Fund's Collingsworth, "Doherty oversaw AIFLD's operations and was best known for finding allies in the countries of the Americas and providing them with funds to create and sustain national trade union organizations aligned with the respective country's right-wing political party. The long-lasting effect of Doherty's reign at AIFLD was to force the labor movement in most countries of the Americas to divide along ideological lines, siding either with the leftist parties or the right-wing union created and sustained by AIFLD... To this day, the effects of this divisiveness are still apparent. Another Doherty legacy is that he placed many of his children and in-laws in positions at the various AFL-CIO institutes, and some of them remain there today."

AIFLD has been disbanded by the current AFL-CIO leadership, largely because of its compromised cold war mission. Otero, for instance, was identified by renegade CIA agent Philip Agee as a onetime CIA operative. And the Doherty family is also linked to the agency. William Doherty Sr., grandfather of WRAP director Lawrence, was a early labor leader associated with the CIA in the 1940s. And Bill worked with the CIA in Latin America. Reich, too, worked with the CIA on Central American during his tenure at OPD. But what can a professional anticommunist do these days other than denounce Cuba? Apparently, there's prosweatshop work, where the three adventurers now find themselves. If there's an any more precise explanation for Reich in the rag trade, he's keeping it to himself. Actually he's keeping everything to himself these days-he's not speaking to the press. Perhaps WRAP is no more than a corporate PR effort, but if that's so, why is it staffed with cold war relics like Otero, Doherty and Reich? And, if the former "labor guys" are running WRAP, why do they espouse an essentially unionbusting line? There may be as much ideology here as profiteering, but we don't yet know.
In any case, Otto Reich shows that he is indeed not merely focused on preserving the Cuba boycott. He is willing to link himself with other retrograde causes, including an implicitly antilabor, antienvironment, prosweatshop organization. Just the man we need to run US hemisphere policy.


If confirmed by Senate, Lorne W. Craner will step down as Intl Republican Institute president to serve as asst secretary of State for democracy, human rights & labor. During 5yrs at IRI helm, Craner has helped the "nonpartisan, democracy-building organization" grow in terms of "achievement, innovative programming & news coverage." Says Craner, 41: "We have programs in over 30 countries, ranging from instructions on running campaigns to workshops on the legislative process." He cites succesful election reform efforts in Central Europe as one of the organization's major accomplishments. Before joining the IRI, Craner worked under former National Security Advisor Brent Scowcroft as director of Asian affairs. 1989-92 State Dept dep.asst sec. for legislative affairs. Before that, foreign policy advisor to Sen. John McCain, R-AZ Craner's late father, USAF Col. Robert Craner, was VietNam prisoner of war with McCain.

§UPPLEMENT   including

    Marcellus
I care not what puppet
is placed upon the throne …
control (the) money supply,
control the Empire …
Baron Nathan Meyer
de Rothschild 1744-1812
& central banks
"Whoever controls the volume of
money in a country is master of all
its legislation & commerce".
U.S. Pres. Jas Garfield 1881
a Horatio   (1.1.70)  
Good now, sit down, and tell me, he that knows,
Why this same strict and most observant watch
So nightly toils the subject of the land,
And why such daily cast of brazen cannon,
And foreign mart for implements of war;
Why such impress of shipwrights, whose sore task
Does not divide the Sunday from the week;
What might be toward, that this sweaty haste
Doth make the night joint-labourer with the day:
Who is't that can inform me?
Arise & fall of Sir Alan
The Queen has a knighthood for Alan Greenspan but financiers may put his reputation to the sword
9.22.02   Faisal Islam The Observer
City economists are sober types, not known for falling off their chairs laughing. But this was the unlikely reaction of one when he heard that Alan Greenspan had been awarded a knighthood for his 'contribution to global economic stability'. Indeed, he claimed that his view was now the consensus in the City.
Federal Reserve chair will attend a lunch Wed. w/ finance ministers, media barons, and business leaders from across the world. He will preside over the opening of the refurbished Treasury building and then go to Buckingham Palace to receive his honorary knighthood from the Queen.

Another economist, Stephen Lewis of Monument Derivatives, did not fall off his chair but is only a little milder in his critique. 'The shine has come off the Greenspan story over the last 2 years. Back then there was a feeling that everything he touched turned to gold, but now the new economy is in fragments. He was seen at the heart of arguments that the economic rules had changed and that the US economy was capable of far more growth, but perhaps the Fed should have come more on its guard.'

Greenspan's famous speech on 'irrational exuberance' in 1996, and the criticisms of the 'infectious greed' allowed by US corporate governance in his testimonies to Congress last month, were entirely consistent. But his accusers charge that the period between these speeches was marked by a Damascene conversion to 'new era' thinking as he kept the Federal Funds 'base rate' low & accomodative of spectacular rates of growth.
However, it could be argued that the bare statistics of Greenspan's decade-and-a-half at the apex of world economic policymaking speak for themselves. After a shaky start, US GDP posted an uninterrupted decade of strong growth, before a mild recession. The dollar weakened in the first half of his tenure, but in mid-1994 began an upward march, in trade-weighted terms, and was strong until 4 months ago. Stock markets also seemed to move into a different gear in mid-1994.

Inflation, Greenspan's key policy target, has been under control, and unemployment, although it has been creeping up since 2000, is lower than the figure he inherited. The other side of the coin is the collapse in savings as Americans poured money into stock markets, and the gaping hole that is the US current account balance. The deficit stands at $130 billion. The US boom years were fuelled by debts and cheap financing, both personal and external. By Q1 2002, household debt was equivalent to 76% of GDP. Non-financial corporate debt was another 47%. Total debt in the US is about $20,000bn.

Received wisdom said he was the second most powerful man in the world. Some argued that he was effectively number one, laying down the law to incoming presidents. On trade protectionism over steel & agriculture, the 56% increase in the budget deficit, and the Treasury Secretary's suggestion that the current account deficit is a 'meaningless concept', Greenspan has publicly clashed with members of Bush's team.
Although he had his foot on the accelerator & brake of the US economy, he didn't have his hands on the wheel. The real story is that the markets wanted to believe he did. HSBC chief economist Stephen King says: 'He had warned investors with those comments about "irrational exuberance" in 1996, way before the peak of the bubble.'

The low interest rates that followed these comments were more a reaction to financial shocks than his buying-in to 'new era' thinking. 'With the hedge fund, Asia & Y2K crises, Greenspan was dealt a bad hand. In attempting to save the rest of the world, he exaggerated imbalances in the US economy itself. You can't really blame him. You can blame the falsely held belief in central bankers' infallibility,' says King. If you take this view, it is the realisation that Greenspan isn't in charge of the US economy that has contributed to the emergence of a 'new stagnation'.

For his part, Greenspan says that there is not much that a central banker can do about the emergence of a bubble. 'It was far from obvious that bubbles, even if identified early, could be pre-empted short of the central bank inducing a substantial contraction in economic activity, the very outcome we would be seeking to avoid,' he said. Bank of England governor Sir Edward George in a speech on Friday, said: '20-20 hindsight is very easy, as a lot of commentators have demonstrated just recently in their criticisms of US policymakers in the light of the economic & financial market bubble which built up in the late 1990s.'

As for Greenspan's legacy, he will leave the US economy with the same rising budget deficits, and volatile oil, stock and currency markets that typified the era of Reaganomics when he arrived. The meat in this sandwich was the Clinton boom years, and the resilience of the US financial system to 9.11.01. 'But the markets won't fall away precipitously when they find out he's retiring, which might have been the case 3 years ago,' says Stephen Lewis. Recognising Greenspan's fallibility is probably no bad thing.

Feverish excitement in Whitehall yesterday as Alan Greenspan opened the newly-refurbished Treasury building. Gathered to witness this momentous event were no fewer than 52 finance ministers as well as 6 prime ministers from economic powerhouses such as St Lucia & Antigua. Gordon Brown lavished praise on his esteemed guest, describing him as a "loyal friend" before paying tribute to the advice that the US Fed chair provided ahead of independence for the Bank of England.
The chancellor was so rationally exuberant that he repeatedly uttered the rarely-used title "Dr" Alan Greenspan and even attempted a joke. Lauding the open-plan offices, Brown said 60,000 tons of rubble were removed, "not all of it old budget drafts and discarded economic policies". How the watching businessmen wished that Brown had taken the chance to dump many of his petty regulations into the skip.

Greenspan duly heaped praise on Brown and Sir Edward George, the Bank of England governor, keeping a straight face as he called them "worthy custodians" of the financial legacy which Britain had left the world. Intriguingly, Greenspan had surfed the Treasury website to find out more about a past chancellor's decision, in 1711, to pay the government's debts with stock in the South Seas Company. When the "Bubble" burst in 1720, Greenspan noted, the chancellor ended up in the Tower for "dubious practices that appear eerily contemporary".

With Laura Spence unavailable, the Treasury's next-biggest US-based fan turned up yesterday to open the dept's PPP-financed renovations. "Sir" Alan Greenspan told the tale of a former chancellor who backed investing the govt's income in a South Sea bubble company, and was later sent to the Tower of London. But the grandness of the refurbished Great George St building, incl lavish water features and huge trees that had to be lifted in by helicopter, means Gordon Brown may have trouble next time he invites trade union leaders over to preach austerity.
It was a lovely event, despite the disruption of Tube strikes, and the delighted chancellor couldn't resist a joke. The make-over, even the permanent secretary is now out in the open, incl removal of 8 miles of office walls, "almost the distance from here to the Millennium Dome", Gordon noted, rather unkindly.

Greenspan praises London's success story
9.25.02   Financial Times
Ed Crooks econ ed. & Peronet Despeignes Wash.D.C.

… "London has stayed on top in the provision of financial services despite the emergence of the euro, which some expected would divert a significant share of foreign exchange trading to a single centre on the continent," he said. "Although financial sector activity in Frankfurt has increased substantially in the past few years, largely reflecting the growing importance of the euro, trading volumes there are still well below those of London & NY."
He cited as evidence of London's strength its world-leading positions in over-the-counter derivatives & foreign exchange trading. London conducts twice as much business as NY even though the dollar is by far the most heavily-traded currency.

The resilience of Britain's financial services industry to staying outside the euro has been widely recognised, but eurosceptics were heartened to hear the points made by such an eminent authority. Chancellor of the exchequer (finance minister) Gordon Brown, was unstinting in his praise for Mr Greenspan & the Fed, stressing the influence of the US model in shaping his plans to make the Bank of England independent. "You have been a great force for the advancement of the world economy and a great friend of the UK," said Mr Brown. "The world owes you a debt of gratitude for your stewardship of the world's greatest economy."

George Eustice of the anti-euro group, which will campaign for a "No" vote on any referendum on Britain joining the single currency, said London was thriving because of its favourable tax & regulatory framework. Locking into the euro would threaten some of those advantages.
But Robert Guy, chair of the City in Europe "Yes" campaign and NM Rothschild director, said joining the euro would strengthen London's position as Europe's pre-eminent financial centre and protect against threats such as the loss of exchange-traded derivatives business to Frankfurt. "Current success is no excuse for lack of concern for the future," he said.

The visit comes at a time of pronounced uncertainty for Mr Greenspan, the Federal Reserve and the US economy. The Fed decided on Tuesday to keep short-term interest rates unchanged for the sixth time this year, declaring credit conditions sufficiently stimulative to help the troubled economy along. But for the first time in a year, there was publicly declared internal dissent with its decision, highlighting growing disagreement within the Fed over the economy's prospects.
2 members of the Fed's policy-making Open Market Committee, Federal Reserve Bank of Dallas pres. Bob McTeer & Fed board of governors member Edward Gramlich, argued for a rate cut and publicly registered their disagreement. It was the first instance since May 1998 in which 2 FOMC members dissented.

Wash.D.C.   Pres.GWBush surprised the financial world today by signaling his willingness to appoint Fed chair Greenspan to a fifth term as leader of the nation's central bank when Greenspan's term expires next year. Observers thought that Greenspan had angered Bush earlier this year by offering only tepid support for the president's latest tax cut proposal. They assumed that the White House would seek to install its own choice for the position when Greenspan's term expired June 2004.

But asked during a session with reporters today whether the central banker deserved reappointment, Bush answered: "Yes, I think Alan Greenspan should get another term." The White House subsequently called attention to the remark by issuing a press release. Fed-watchers were caught flatfooted by the president's apparent decision.
"It's certainly a surprise to me because I'd have thought that a GOP president with a GOP Congress would want their own person in there," said Carnegie-Mellon economist Allan Meltzer, who is writing a multi-volume history of the Fed.

There may be something less than meets the eye to Bush's readiness to reappoint Greenspan. The chair must be a member of the Fed's governing board. Greenspan's 14-year appt as governor runs out in Jan. 2006, less than halfway through what would be his next chairmanship. The law allows for Fed governors to serve for only one full term.
Analysts suggested that the president's decision was at least partially a political holding action aimed at putting off a potentially sensitive appt until after the 2004 presidential election. "The last thing the administration wanted was the headache of looking for an acceptable successor to Greenspan," said longtime Fed-watcher David M. Jones. "There's nobody in the wings who's an obvious successor the way Greenspan was for [former Fed chair Paul] Volcker," he said.

Investors reacted to news of the likely reappointment, plus better-than-expected sales results from insurers & drugmakers, by pushing stock prices higher. S&P 500 Index climbed 19.36 points, or 2.2%, to close at 911.37, its highest level since mid-January. The Dow Jones industrial average rose 156.09, or 1.9%, and the Nasdaq Composite Index increased 26.99, or 1.9%.

    Greenspan to undergo prostate surgery
    4.22.03   L.A.Times
Fed chair Greenspan will undergo surgery for an enlarged prostate, the Fed said in an announcement that also said tests last week showed no cancer. The news of Greenspan's impending surgery today was made after Wall St markets closed for the day. Greenspan, 77, was in his office Monday and expects to be back at work this week.

  [ Given official & mortal term limits, Greenspan merits Wm Casey style self-induced black marble.

Unmitigated greed first yields wealth, which by necessity generates power, but ultimately only fame can satiate it. ]

Take it from Alan Greenspan: "There's a lot to learn about money." That's the slogan for a new Fed.Reserve financial literacy campaign designed to help people manage their money. "No matter who you are, making informed decisions about what to do with your money will help build a more stable financial future for you & your family," Greenspan says in a public service TV ad produced to promote the campaign.
  [ The lie is that individuals' informed decisions affect FRB's overwhelming financial destabilization via privatized central banking & co-opted currency manufacture. ]

Greenspan's appearance in a public service announcement, first for the central bank head, comes at a time when the struggling U.S. economy & rising job losses are increasingly squeezing the finances of many Americans. Personal bankruptcies reached a new high in 12 mo. ended 3.31.03
  [ Numerically or percentage per capita ? The former is invevitable w/ rising population, the latter needs more detail than mere citation to establish cause, effect & accuracy. ]
and percentage of U.S. home loans in foreclosure hit record high 2002 Q4.
  [ All the more reason for Supreme Court to proceed w/ GATA class action suit before the same embezzlers advance more such treachery. ]

The ad features Fed's new educational Web site & toll-free telephone number 800.411.5435 consumers can call for free brochure with tips on setting up monthly family budget and getting best loan deal.
  [ The discount window isn't open to retail borrowing. FRB marketing consumer lending counsel as public service is greater conflict of interest than military recruitment TV commercials. ]

Fed board member Edward Gramlich previewed the TV spot for reporters Monday and said the new Web site features consumer finance information aimed at helping people make the right decisions about such issues as savings & debt.
  [ Insultingly shallow greenwash. Savings are plundered by institutional lenders indemnified by govt in exchange for campaign funding and debt yields commissions for those same speculators. Corruption's puppets are clumsy because they steal w/ both hands. ]

"Credit is more widely available, particularly to young people, seniors and low moderate-income populations," Gramlich said. "With such changes come new opportunities but also risks, including the potential for fraud & abuse," he added. "Our hope is to encourage consumers to take advantage of the programs available in their communities, schools and on the Web," Gramlich said.
As part of the educational campaign, Greenspan & Richmond VA Fed bank pres. J. Alfred Broaddus Jr will address students at John Philip Sousa Middle School in Washington 6.5.03 on the importance of learning sound math & problem-solving skills.

Rothschild dreams The euro & the dollar have reached parity for the first time since Feb. 2000. The dollar has been falling sharply in recent weeks as investors shy away from US shares and investments due to fears over corporate credibility, and all the while the euro has been gaining strength since the launch of notes & coins at the start of the year. The euro remained firm on Tuesday, with one euro buying $1.0074 at 0507 GMT.
The increased pressure on the dollar means its status as a quality investment haven in times of global economic uncertainty, even when that uncertainty was centred on the US itself, now seems to have come under fire. The wave of accounting scandals that have engulfed firms incl energy giant Enron and telecomm firm WorldCom have led investors to put their money elsewhere.

The euro hit its all-time high shortly after its launch at the start of 1999. But it began to slide there after, falling to a record low of 82.3¢ U.S. Oct. 2000. Its newfound strength is thought to reflect investor fears over the dollar, rather than an endorsement of the single currency. The combination of corporate scandal, falling profits, sliding consumer confidence and a massive imbalance in the money flowing in & out of the US means the US is no longer automatically the best place for investors to bet on.
The US is so deeply in debt to the rest of the world that it needs huge financial inflows amounting to billions every day, and their slowing means more stress for the economy. On the other hand, the dollar's weakness will increase the competitivity of US manufacturing exporters. "The value of the dollar had gotten so high that many domestic based producers were unable to compete effectively," said Manufacturers Alliance/MAPI head Thomas Duesterberg.

But it makes exports from Europe more expensive. Holidays for Americans travelling in Europe will also get dearer, in a further blow to the tourism sector. Monday's weakness was exacerbated by fresh falls on stock markets worldwide. Wall St toppled in early trading, building on falls of more than 600 points last week. The blue-chip Dow Jones index was down almost 300 points or 3.4% to below 8,400, a level which, leaving aside sharp selloff following 9.11.01, it last visited in Oct. 1998.
London's FTSE 100 closed down 229.6 points or 5.4% at 3,994.5, the first time the index had closed below 4,000 since Dec. 1996 and the sixth worst one-day fall in its 19-year existence. The trouble for the US is that investor trust in corporate America, already evaporating in the face of Enron, Andersen, WorldCom, Qwest, Halliburton and other alleged irregularities, faces a key test this week, as Wall St firms begin to deliver their latest trading updates.

Shareholders continue to fear that more firms will be forced to admit that their reported profits have obscured their true financial position. In the UK, anti-euro campaigners think the rapidly changing exchange rates make the UK's dilemma over whether to adopt the single currency more difficult. "Rapid moves in the euro exchange rate are going to make it difficult for the government to claim the five tests are clearly & unambiguously met," said No campaign dir. George Eustice.
But pro-euro campaigners have taken the opposite stance. "The instability of all currencies in the modern world is why most countries are choosing to operate as part of, or linked to, larger currency zones," said Liberal Democrat treasury spokesman Matthew Taylor. UK PM Blair said the euro's rally would have no effect on the govt's assessment of whether it should join the single currency.
"You cannot judge this on the day to day. It has to be judged according to the economic tests & the convergence test," he said.

ECB recommends central banks sell U.S. agency debt   7.28.03   Bloomberg

European Central Bank is eliminating its holdings of debt issued by Freddie Mac & Fannie Mae, 2 biggest U.S. providers of mortgage financing, and recommended that its national central banks do the same, according to a person who has seen the ECB's recommendation. The Frankfurt-based central bank, which sets interest rates for the 12 countries sharing the euro, gave its opinion at 18-member governing council 7.10.03 meeting, said the person who declined to be named. ECB spokeswoman Regina Schueller declined to comment. Officials of the 12 central banks declined to comment.

Freddie Mac is under investigation by U.S. SEC &Amp; federal prosecutors after overstating earnings, leading to the ouster of its top 3 managers. Difference between yields on Freddie Mac notes and comparable U.S. govt debt has increased this year as investors perceive Freddie Mac debt to be more risky. "Some investors will ask themselves: Is this really as safe as I thought it was? And some will say: This is too risky for me," said Assn of German Mortgage Banks GM Louis Hagen in Berlin.

McLean VA based Freddie Mac said last month it understated profits by as much as $4.5 billion during the past 3 years as it made errors in applying generally accepted accounting principles in valuing derivatives contracts. Derivatives are financial obligations tied to the value of debt & equity securities, commodities and currencies.
ECB based its recommendation to the national central banks on credit risk, the person who declined to be identified said. Freddie Mac spokeswoman Heather Sieber declined to comment. "We do not comment about specific investors", Fannie Mae spokesman Jason Lobo said. "Our investors are broadly distributed around the world and those investors include central banks."

Fannie Mae & Freddie Mac own or guarantee about 42% of $7 trillion U.S. mortgage market. Fannie Mae's mortgage portfolio is worth about $816 billion, while Freddie Mac controls about $573 billion of mortgages. The 2 companies, regulated by Office of Federal Housing Enterprise Oversight, are known as govt-sponsored enterprises. While the U.S. govt doesn't guarantee any of their obligations, both Fannie Mae & Freddie Mac have Aaa ratings from Moody's Investors Service and Standard & Poor's.

Freddie Mac notes maturing Jan. 2013 traded 43.5 basis points more than 10-year Treasuries, widening from 26 basis points before the co. announced management changes, according to J.P. Morgan Securities. Since 6.6.03, the yield spread widened to as much as 44.5 basis points before rebounding back to 33 basis points.
ECB doesn't disclose breakdown of its reserves and spokeswoman Schueller declined to comment on how much U.S. agency debt either the ECB or the 12 national central banks of the nations sharing the euro hold. ECB's foreign currency reserves are managed by the euro region's 12 national central banks on the basis of ECB guidelines. ECB can order the other central banks what to do with its own reserves, while the national central banks have control over their own reserves.

ECB &Amp; national central banks had combined foreign currency assets of 221.2 billion euros at the end of last week, of which 205.4 billion were claims on residents outside the euro region. The region's central banks sold 3.075 billion euros in foreign currency reserves in the week ended 7.18.03 that were owed to them by residents outside the euro region, second- biggest sale in more than a year, according to Bloomberg calculations based on ECB data.
So-called agency debt held in custody for foreign central banks has declined in 6 of the past 7 weeks to $183.25 billion from a record $189.9 billion, according to Federal Reserve. Foreign central banks sold $585 million in the week ended 7.23.03, the Fed said. By comparison, foreign central banks' holdings of U.S. Treasury debt declined by $3.88 billion in the latest week to $753.74 billion. Those banks sold $3.27 billion Treasuries in the prior week.

Billionaire financier Geo. Soros warned the US dollar could lose one-third of its value over the next few years. On currency markets, meanwhile, allegations of yet another accounting scandal at Xerox made investors dump the US dollar and push it within a quarter of a cent of parity with the euro. Mr Soros also warned stock markets could fall "much lower" if consumer confidence and growth faltered in the U.S.

The financier made his fortune running a hedge fund which speculated against weak currencies, incl the British pound, reportedly making a Ģ1bn profit by forcing it to leave the European Exchange Rate Mechanism in 1992. Speaking to BBC business correspondent Rory Cellan-Jones, Soros warned the Bush administration against its "market fundamentalism", the belief that markets are self-correcting and best left alone.
Mr Soros said: "When markets are going down, then all the weaknesses come to the fore, and they need to be dealt with. There is basically an attitude of market fundamentalism: leave the markets alone and they will take care of themselves. That is a false idea. Markets do not tend to equilibrium, but tend to excesses, and you need intervention at the right time to stop these excesses going overboard."

In recent years, Mr Soros has been an increasingly vocal critic of global capitalism, calling for more regulation and warning that the greatest dangers now came from the U.S. In the last few weeks, the value of the dollar has weakened substantially on intl currency markets, by around 10% against the euro, nearly reaching parity of one euro to one dollar.
US Treasury Sec. O'Neill is generally believed to think it would be impossible to stabilise the currency markets. But Mr Soros says that further falls in the dollar could have "negative implications" for the whole world economy, making the recession deeper in Japan for example, or exacerbating a currency crisis in Brazil.

Fears about further acounting scandals and further falls in American stock markets have made intl investors wary of buying US shares or dollars. Mr Soros said that the "cult of success at any price" was partly to blame for the accounting problems in the US "where anything goes as long as you can get away with it".
He said the UK system, which held the professionals liable for giving a "fair & accurate" picture of a firm's financial position, was better than the US approach, which allowed accounting firms leeway to bend the rules. He welcomed moves by US SEC regulators to require directors to ensure their accounts give an accurate picture.
But he warned that markets were now exagerating the scale of the accounting problems at US firms. "Clearly you had an excess of optimism & overstatement, and now you are plunging into an excess of doom & gloom," he told the BBC.

    [ Doubtless Soros is correct, given the analytical resources at his command and regardless of his ulterior intentions when speaking truth.
    The curiousity is media placement as annual anniversary. Cf. similar dates of prev. & following articles w/ matching message. The potential & purpose of his press release have more interest consequent to repeat schedule; how is the pump or dump affected ?
    ]
Soros says he's selling the $
5.21.03   Reuters

NYC   Billionaire investor Geo. Soros, in an interview w/ cable TV ch. CNBC Tue., said he's selling the dollar against most major currencies. In wide-ranging interview, he assailed Bush admin policies, saying he's buying euro & currencies of Australia, Canada and NZ against the dollar, as well as gold. The euro briefly broke above $1.17 following his comments before retreating.

"I have to disclose that I now have a short position against the dollar because I listen to what Treasury Sec. tells me," Soros said in the interview. He referred to recent remarks made by U.S. Treasury Sec. John Snow that signaled a shift away from a strong dollar policy.
Soros was sharply critical of Snow's policy shift, branding it "mistake," and labeling it a wrongheaded attempt to stimulate the U.S. economy at the expense of other economies. "It's a beggar-thy-neighbor policy," he said. "I think (Snow) was somewhat irresponsible by talking down the dollar."

Soros dubbed "The Man who broke the Bank of England" for his 1992 role in amassing bets pound would fall , facilitating Britain's ejection from Europe's exchange rate mechanism that year. Though analysts say Soros' influence in markets has waned, many are reluctant to fight the trend that has seen the dollar fall sharply against major currencies.
With the dollar already under pressure, traders sent the euro above $1.17, fraction of a cent from Monday's 4 year high at $1.1738, hair below the single currency's launch price. Gold, meanwhile, set a 3 month high of $370 oz. Canadian $ held 6 year high against its US$, trading near C$1.3476 , or 74.21 US¢.

Intl speculator Geo. Soros, who now aims to reform global capitalism, arrives in Britain this week. He will be addressing the House of Commons Treasury Select Committee, and giving a number of press interviews, on the dangers of unregulated free markets. Soros operates one of the world's biggest private investment funds and is famous for having made $1bn by betting on the devaluation of the pound sterling in 1992.
His Quantum Investment Fund claims to be the world's most profitable. This year, an article he wrote for the Financial Times newspaper on the need for Russia to devalue its currency precipitated the fall of the Russian govt, a massive default on its debts, and widespread financial panic.

But Soros has aspirations to be more than a speculator. He has donated millions to charitable foundations, most notably to help Eastern Europe. Now he has surprised his critics by calling for more intl regulation of markets, a surprising admission perhaps from someone worth $5bn.
The 67-year-old financier was born in Hungary, but emigrated to England when he was 17, after the communists took power. He studied philosophy at the London School of Economics with Karl Popper, whose views on the need for open & tolerant societies as a precursor of economic growth, he adopted as his own.

After selling souvenirs in Wales, he joined London stockbrokers Singer & Friendlander before moving to Wall St in 1956. He set up the Quantum Fund in 1969 as one of the world's first hedge funds. Registered in Curacao in the Caribbean, but run from Manhattan, the fund took money from rich individuals and invested in risky, but potential highly profitable international deals.
The fund profited hugely from the collapse of fixed exchange rates in the l970s and the deregulation of global capital markets. By l980 Soros was worth $25m and his fund $100m.

In the l980s Soros moved into charitable giving, saying he already had enough money to live on. He began by setting up the Soros Foundation to give money to support democracy in Russia & Eastern Europe, calling his first initiative the Open Society Fund. By the l990s he was giving away over $300m a year, providing more aid for some countries than the US govt.
His interests recently turned to drug reform in the US, where he has supported efforts to legalise soft drugs, and help for immigrants affected by welfare reform.

Even the Quantum Fund, which has turned an investment of $1000 in 1969 into $3m today, is not infallible. Mr Soros lost $800m in the l987 stock market crash by betting that the Tokyo Stock Market would crash first, reasonable on economic grounds, but defeated by govt intervention.
He is also reported to have lost $600m this year betting the wrong way on the Japanese yen, which had to be rescued in June by US intervention. But he is part of a group of international private investors with an estimated $100bn in assets who can significantly affect global markets.

In September, another hedge fund, Long Term Capital Management, had to be rescued by the world's major banks for $3bn, at the behest of the US Federal Reserve, because of the risk to the whole world's financial system if that fund were to fail.
In Oct. Soros had to restructure his own investment companies. He closed the Quantum Emerging Growth Fund, which lost one-third of its value after taking a big loss on its Russian investments, and merged another, after disclosing losses of $2bn. It has perhaps been the experience of the past year, where global financial turmoil swept through the markets, that has led to his call for further international regulation of capitalism.

What Soros fears more than anything else is a protectionist backlash which would close markets and lead in his view to the strengthening of authoritarian regimes. He has clashed repeated with Malaysia PM Mahathir Mohamad, who has imposed capital controls on his country's currency. Dr Mahathir has criticised "immoral financial speculators" while Mr Soros has described Dr Mahathir as a "menace to his country."
Many of George Soros's prescriptions for reform, for more information about bank lending in developing countries, and for an IMF lending facility to prevent crises, are now being adopted by Western leaders. It would be ironic indeed if the king of speculators has become the saviour of global capitalism

    Capitalism 'falling apart'
    9.15.98   BBC
Intl investor George Soros warned the global capitalist system is "coming apart at the seams." Soros said the panic withdrawal of capital which had spread to Latin America could lead to financial collapse in Brazil then spread to Argentina. He warned that a "global credit crunch" was in the making and would probably lead the world into recession. He also slammed the West's response to the Russian crisis and called for greater intervention by leading nations if a full blown crisis was to be averted.
He described the leading industrial nations' response to the financial market meltdown in Russia as "woefully inadequate". Mr Soros was testifying before the US House of Representatives Banking Committee.

Soros said further turmoil could only be prevented "by the intervention of intl financial authorities but these prospects are dim." He said the global capitalist system involved not only free trade, but more importantly, the free movement of capital in "a gigantic circulatory system" in which capital was sucked up by markets & institutions at the centre and pumped out to the periphery.
Mr Soros said the Asian crisis had reversed the direction of the flow of capital. It had begun to flee the periphery, taking refuge in the centre. This was not good for either the periphery or the centre in the long term.

Mr Soros renewed a previous call for a new global credit insurance body to complement the efforts of the IMF & World Bank. Soros proposed the creation of special drawing rights whereby countries which could not repay their debts could restructure their loans to easier terms if their govts pursued policies approved by the IMF. He said countries should be rewarded for biting the bullet and confronting their problems, unlike Malaysia which has closed itself off to the world in a negative move that would hurt its neighbours.

"If there is no reward for good behaviour, meltdowns will multiply," he said. He said IMF loan programs had so far not worked but urged the US Congress to pass the IMF funding bill the agency needs to continue its work. "Unless Congress is willing to support the IMF the disintegration of the global capitalist system will hurt US financial markets because we are the centre of the system."


Treasury to hold debt auction today
5.20.03   AP

Treasury Dept announced it postponed until today its regular weekly auction of 3 & 6 month Treasury bills, normally held each Monday. The delay was caused by maneuvering the Treasury performed to make room for addtl debt sales given that Congress has not approved legislation to increase the current debt limit of $6.4 trillion.

Greenspan paints deflation scenario   Tells Cong. Fed can fight prices' spiral down even w/ limited knowledge
5.22.03   Peter G. Gosselin
L.A.Times

Wash.D.C.   Fed chair Greenspan said 5.21.03 the nation's central bank is capable of fighting deflation but acknowledged Fed policymakers have only scant knowledge of how a broad price decline would affect the U.S. economy. Greenspan made comments in cong. testimony that appeared designed to provide a slightly more upbeat economic assessment than the Fed has offered in recent weeks.
At one point, Greenspan told lawmakers that forecasts of a pickup in growth this year were "not unreasonable." At another, he said, "Readings on production and employment have been on the weak side, but the economic fundamentals augur well for the future."

Greenspan went out of his way in testimony before Congress' Joint Economic Committee to assert that the Fed had lost none of its power to manage the economy even with its signal-sending federal funds rate at 4 decade low 1.25%. Even if it is forced to jam the federal funds rate to near zero to spur growth, "that does not mean the Federal Reserve is out of business," he declared.
Fear that the Fed may be running out of policy options with the economy still weak is part of what's behind the seemingly inexorable drive for another, deficit-boosting tax cut, third in 3 years. House & Senate negotiators reached tentative agreement 5.20.03 on 10-year, $350-billion package of cuts.

Fed alarmed observers this month when it suggested deflation may be greater threat to the economy than generally recognized. announcement signaling end of central bank's half-century-long battle to control inflation and start of a new & uncertain period. In testimony, Greenspan essentially declared victory over inflation. "Inflation is now sufficiently low that it no longer appears to be much of a factor in economic calculations of householders & businesses," he told lawmakers.
He has previously said eliminating inflation from decision making was Fed's goal in the inflation fight. W/ prices now rising at only about a 1% annual rate, Fed officials have begun saying that inflation has slowed as much as they want to see it slow, and they have stepped up talk about its opposite, deflation. Greenspan cautioned deflation was not "an imminent danger", but portrayed damage it could do to economy as so great that the central bank must begin planning how to counter it. "The threat, though minor, is sufficiently large that it does require very close scrutiny and maybe action on the part of the central bank," he said.

In his testimony, Greenspan offered a candid assessment of the limits of the central bank's knowledge about deflation. "We recognize that deflation is a possibility," he said at one point, later adding: "We do have a problem [in] that we have not dealt with this before." He sounded almost nostalgic for his old nemesis inflation. "We know how to deal with inflation We know how to suppress it. We know the consequences of suppressing it We are familiar with the mechanism," he said.
Economists are divided about how real danger of deflation is. Many note prices cars & computers have been plummeting but those for houses to haircuts are still on the rise. But almost everybody was brought up short when Fed deflation warning was followed by news that consumer price index, nation's chief inflation gauge, fell last month. Even when sharply declining food & energy prices were removed, the index remained stuck at zero for a second straight month, lowest level since the mid-1960s.

Analysts warn that unless the economy begins growing faster than the 1.6% pace it posted in the first 3 months of the year, prices will be tugged downward by unemployment and huge unused business capacity. They say result could be slow, downward spiral of prices that eventually becomes self-reinforcing.
Greenspan told lawmakers despite recent mixed signals, it remains too early to tell whether the economy is emerging from funk before the Iraq war. He said discouraging signs like unexpected loss of more than half a million jobs in the last 3 months reflected decisions made before the war, and so were not influenced by pickup in consumer confidence & stock prices in the aftermath of the fighting.


Last fall's financial meltdown triggered a plunge in stock prices and home values and wiped out 11%, $6.6 trillion, of household wealth in six months. It also put an end to easy credit, which had fueled the consumption that powered the economy for most of the decade.

Ever-lower prices have risks. The more shoppers expect prices to fall, the less they shop until prices drop. It becomes a self-fulfilling prophecy that forces companies to keep cutting. That reduces profits, making it less likely companies will hire workers or raise wages.
Economists say the worst scenario would be a deflationary spiral, which Japan has been stuck in for the last two decades.

Recession fallout: America is on sale   excerpt
10.05.09   AP
    The world's banker
    1.30.06   editorial L.A. Times
Somewhat unfairly, critics like to say that Alan Greenspan's main legacies include a real estate bubble in this country and a loss of trillions in the dot-com crash. In truth, the sea of construction cranes in Shanghai, and spreading prosperity in India, may be the retiring Federal Reserve chairman's most lasting legacies. Greenspan, after all, has been as much the world's central banker as he has been America's.

When he became chairman in 1987, Cold War tensions were receding and a crop of small economic tigers had started to emerge in Southeast Asia. China and India were poor and stagnant. Today, the scale of global economic activity makes the world of 1987 look tiny. Trillions of dollars swirl efficiently through stock and bond markets each day, at a volume more than 10 times larger than in 1987. Global trade is booming, and Southeast Asia's spark became a prairie fire of economic growth in China and India, fueling an unprecedented level of integration with U.S. business.

The Federal Reserve remains a mysterious institution to many, although its primary job is to control the supply of money and credit in the economy, most visibly by setting short-term U.S. interest rates. The Fed also governs that slippery commodity known as confidence, which holds together a sprawling financial system essentially based on trust.
For the Fed, keeping the confidence of bond traders is one goal; earning the trust of U.S. consumers is another. In this day and age, however, inspiring belief in the U.S. financial system also supports global demand for the dollar and a supply of affordable consumer goods and services.
China now holds more than $800 billion in foreign reserves, effectively financing our low interest rates, which in turn finance the nation's seemingly perennial consumption binge. Over the last year, many economists have puzzled over why yawning U.S. trade deficits, we're buying more than we're selling, have failed to depress the value of the dollar.
The answer has to do with such intangibles as confidence in Greenspan's stewardship.
The chairman who left graduate school without finishing his doctoral dissertation has long prided himself on having an appreciation for real-world indicators. He understood early on how technology would contribute to productivity growth, and that the gradual integration of China and India into world markets is in the process of effectively doubling the overall supply of labor, holding down global inflation.

The conventional indicators of Greenspan's success are clear. He successfully kept inflation in check for nearly 2 decades. He presided over 2 of the longest economic expansions in U.S. history, and he helped keep recessions short. Greenspan also responded adroitly to financial crises, including the stock market crash 2 months into his tenure in 1987 and the Asian meltdown a decade later.
Greenspan always seemed to pride himself on being oblique in his testimony before Congress and in other speeches, with the notable exception of his "irrational exuberance" comment in 1996. More recently, the chairman deserves some criticism for failing to be more forthright in criticizing the wisdom of some of President Bush's tax cuts in his congressional testimony, even if the Fed has no direct role in setting fiscal policy.

Perhaps it was inevitable that Greenspan would eventually lose the God-like status he enjoyed during the bullish 1990s. Yet he leaves behind an impressive and global legacy.

Lawmakers would curb Federal Reserve's power, not expand it   Fed chief Bernanke, on Capitol Hill 10.1.09, faced skeptics as he backed Obama admin plan for oversight panel to enhance central bank's authority
10.2.09   Jim Puzzanghera
L.A. Times

Wash.DC   The Federal Reserve has dramatically expanded its role in the economy over the last 18 months, and the Obama administration has proposed enhancing that authority as part of an overhaul of financial regulations.
But many members of Congress, Democrats and Republicans, are seeking to curtail the central bank's authority instead of expand it. Worried about the increased power of the complex and mysterious Fed, and upset it did not do more to prevent the deep recession, Capitol Hill has focused its anger over the financial crisis and its aftermath on the central bank.

The Fed finds itself at the center of a collision of traditional political concerns, conservatives' fears of heavy-handed government intervention in free markets, and liberals' complaints of regulators who favor corporate executives over average Americans.
More than two-thirds of the House of Representatives has signed on to a bill that would subject the central bank to increased congressional oversight through expanded audits. A key senator wants to strip the Fed of its authority to regulate banks. The House Financial Services Committee chair wants to rein in the Fed's emergency lending power, which it used to help engineer the sale of Bear Stearns Cos. and bail out American International Group Inc.

Fed chair Ben S. Bernanke defended the central bank during a congressional hearing Thursday. He reiterated his belief that the Fed was best suited for taking on the major new role the administration had proposed for it, supervising large financial institutions that pose a risk to the entire economy.
Bernanke also acknowledged the criticism of the Fed's actions during the financial crisis, saying he shared congressional frustration. "There's nobody more sick and tired of bailouts than me," Bernanke said.
Still, he appears to be fighting an uphill battle for increased power as Congress works to finish the regulatory overhaul this year. "There just aren't a lot of cheerleaders here for expanding the authority of the Federal Reserve," said Senate Banking Committee spokeswoman Kirstin Brost.

The Obama administration wants to add to the Fed's portfolio by giving it the task of supervising large financial firms, such as investment banks, that currently fall outside govt banking regulation. That increased power would be offset somewhat by the administration's proposal to take away the Fed's authority to write and enforce consumer protection rules for financial products. That power would go to a new consumer agency.
Although the Fed still could end up securing new authority, Bernanke has his hands full just trying to keep his agency from losing power, said Concept Capital's Washington Research Group financial policy analyst Jaret Seiberg.
"The Fed is running into unprecedented opposition on Capitol Hill," he said. "In the Senate, there's open hostility toward any expansion of the Federal Reserve's authority. And in the House, you certainly have Republicans looking to focus the Fed solely on monetary policy and strip it of any larger role in financial regulation."

House Financial Services Committee chair told Bernanke on Thursday that the panel "will be putting some limitations" on the Fed's powers. Among those would be increasing congressional authority to audit the Fed and creating the Consumer Financial Protection Agency.
The Federal Reserve is largely known for its often cryptic pronouncements on the economy and its pivotal role in setting interest rates. But the central bank also is a sizable govt agency with about 2,100 employees that is a key player in regulating the financial sector. With 12 regional operations, the Fed is also responsible for supervising key parts of the banking system, including bank holding companies, and drafting consumer protection rules.

Critics have complained that the Fed faltered on all fronts leading up to the crisis. Years of low interest rates helped fuel the housing bubble, and lax oversight of financial institutions allowed consumers and banks to engage in increasingly risky behavior.
"If you look at the record here of the failure of the regulatory bodies . . . all roads seem to lead to the Federal Reserve," said Sen. Richard C. Shelby R-AL.
The Fed is being hit from both sides of the ideological spectrum. Liberals have sharply criticized it for taking 14 years, from 1994 to 2008, to adopt rules to protect consumers from unscrupulous mortgage lending. The Obama administration has hammered the Fed on that point as well, a major reason it has proposed shifting consumer protection powers from the Fed and other regulators to the new Consumer Financial Protection Agency.

Bernanke has acknowledged the Fed's failures on consumer protection, which took place largely before he became chairman in 2006, but opposes creation of the agency. Still, he realizes damage has been done to the Fed's reputation in that area.
"I think the issue is essentially the confidence that Congress has in our focus going forward," he said.
Rep. Melvin Watt D-NC didn't show much confidence, chiding Bernanke for devoting little of his opening remarks at Thursday's hearing to consumer protection and for later referring to "the minutiae of consumer law."

At the same time, conservatives have strongly opposed the Fed's interventions in the economy, which they said have put trillions of taxpayer dollars at risk by vastly expanding the central bank's lending authority to bail out companies and back other commercial transactions to keep credit flowing.
House Republicans want to scale back the Fed's power so the bank focuses on monetary policy. And many have opposed the administration's proposal to give the Fed the new role of supervising large financial institutions, such as AIG, that are not traditional banks but pose a risk to the economy if they fail.

"I'm not alone with my concerns about the Fed as a systemic regulator," said Rep. Scott Garrett (R-N.J.). Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) has similar concerns, as do others on his panel. In fact, Dodd has proposed stripping the Fed of all of its bank oversight functions as part of his plan for creating a single banking regulatory agency.
Former Fed Gov. Alice M. Rivlin also said it would be a mistake to increase the Fed's regulatory powers because it would distract from the central bank's monetary policy role.
"Do we want to augment the regulatory authority of the Fed? . . . My answer is no," said Rivlin, a senior fellow at the Brookings Institution. "My sense is many people would be nervous about that augmentation."

Bernanke tried to allay some congressional concerns Thursday. He endorsed the administration's proposed creation of an oversight council of regulators to monitor the entire economy for risks, such as that of too many banks overextending themselves with credit-default swaps. But he did not go as far as some wanted.
Some lawmakers have said the proposed Financial Services Oversight Council, not the Fed, should have the additional task of supervising large financial firms that are not banks. The council would be headed by the Treasury secretary and include the Fed chairman and other regulators.
Bernanke, however, was steadfast in saying the Fed should supervise those large firms.

Rep. Brad Sherman D-Sherman Oaks said the Fed was less revered on Capitol Hill after the crisis, but there still was a worry that failing to follow its advice could lead to more trouble for the struggling economy.
"The Fed is very powerful, and it comes chiefly from fear and awe," he said. "I think there's more fear and less awe than there used to be."


'Audit the Federal Reserve' bill gains steam   Congressional auditors would have broad power to examine the Fed's operations under the legislation first introduced 26 years ago by Rep. Ron Paul. Two-thirds of the House now backs it.
9.26.09   Jim Puzzanghera L.A. Times

Wash.DC   It started more than a quarter-century ago as just another far-out idea from decidedly outside-the-mainstream politician Rep. Ron Paul: allow detailed congressional audits of some of the most sensitive activities of the Federal Reserve.
For years, his proposal was as unlikely to become law as other longtime quests of the strongly libertarian Texas Republican, such as returning the nation to the gold standard and abolishing the Internal Revenue Service. But Paul's idea to hold the Fed more accountable has gained traction throughout the financial crisis.
On Friday, it moved a clear step closer to reality when the Democratic chairman of the House Financial Services Committee said he would push it forward.

The bill got exposure when Paul ran for the 2008 Republican presidential nomination. Then the Fed became a huge, controversial player in battling the financial crisis, invoking emergency powers to use hundreds of billions of dollars to help engineer the sale of Bear Stearns Cos. and bail out American International Group Inc.
Paul's legislation now has become a rallying point for Republicans and Democrats angry over the bailouts and the Fed's increased and mysterious role in the economy. More than two-thirds of the members of the House of Representatives have signed on as co-sponsors of Paul's "audit the Fed" bill.

The Fed strongly opposes the legislation, saying it would subject its decisions to political influence that could shake market confidence. The support of Rep. Barney Frank D-MA gives a major boost to Paul's 26-year push to allow the Government Accountability Office to conduct detailed audits of some of the Fed's crucial activities, such as setting monetary policy and short-term lending to banks through its discount window.
Both actions are couched in various amounts of secrecy: minutes of monetary policy meetings aren't publicly released for three weeks, transcripts are shielded for five years, and banks that borrow through the discount window are never revealed to avoid the perception that they might be in trouble.

Federal Reserve officials oppose the legislation, but Frank said he was committed to including it as part of a package of bills to revamp the financial regulatory system.
"We are serious about some legislation in this regard," Frank said during a hearing he held on the bill -- the first since Paul originally introduced it in 1983. Democrats and Republicans expressed strong support, reflecting anti-Fed sentiment in Congress, a hurdle to President Obama's plan to increase the Fed's power as part of his financial regulation overhaul.
"Nobody in my district thinks the Fed has done such a good job of running the economy that we should continue to cloak them in secrecy to protect them from second-guessing," said Rep. Brad Sherman D-Sherman Oaks.

Paul said the Fed's increased profile during the financial crisis has led to questions about its complex operations and anger over its ballooning balance sheet, which has taxpayers on the hook for trillions of dollars in lending related to the financial crisis.
Americans "are disgusted and they put pressure on Congress. . . . The people said that it's time you guys woke up and started the proper oversight," Paul said after the hearing.

The Obama administration wants to give the Fed authority to supervise and regulate large institutions whose failure would pose a risk to the economy. The proposal adds to worries about the limited information on Fed activities. Frank reflected that, saying he also wanted to rein in the Fed's emergency lending powers.
But he expressed concerns that information from GAO audits could disrupt financial markets, saying he would seek to mandate a delay in the release of some information.
"No one should be able to do business with the federal government in secret forever. But we do recognize that if it's instantly available, there can be a market impact that would not be a good idea," Frank said. Paul said a wait of three to six months seemed reasonable.

Fed general counsel Scott G. Alvarez said that when Congress allowed GAO audits of the Fed in 1978, it specifically exempted certain "highly sensitive areas," including monetary policy deliberations and actions, discount window operations, and transactions with foreign central banks and govts. Detailed information about those activities "would cause the markets and the public to lose confidence in the independence and judgment of the Federal Reserve," Alvarez told the committee.
He noted that a full, independent audit of the Fed's financial operations is conducted every year and chair Bernanke has taken steps to increase the amount of information the central bank releases. Alvarez said GAO audits were not like traditional accounting audits. The congressional watchdog has power to question Fed officials and to make policy judgments about the central bank's operations.
"The concern that we have is that monetary policy, to be effective . . ., has to be as free as possible from political considerations," Alvarez said.

Paul questioned what the Fed was hiding. "Fifteen or 20 years ago, nobody really cared," he said, noting that most people knew the Fed only for its interest-rate decisions. "Now they're wondering whether it isn't the Fed that stirred things up."

    SEC
Bush's SEC candidate accused in suit filed a year ago of misleading investors
12.11.02   Adam Geller
AP

New York   Pres.GWBush's nominee to lead the Securities & Exchange Commission remains a target of a class-action lawsuit by investors accusing him of fraud for failing to disclose financial problems at Aetna when he was the insurance company's top executive.
Wm H. Donaldson, chosen by Bush Tuesday to become the nation's top corporate regulator after more than a year of scandals at numerous companies, was named in the federal suit filed last year in New York.

Donaldson's tenure at the helm of Aetna also sparked criticism this year from several investors unhappy about his $7 million in cash & bonuses and about changes he made in rules governing the co. The suit, which also names Aetna & current chief executive John W. Rowe, accuses the co. leaders of falsely boasting of the insurance giant's internal financial controls in 2000 & 2001 despite knowing about serious problems.

Specifically, the suit says Donaldson & other Aetna executives knew about problems in how the co. was handling medical claims. Those problems undermined the insurer's ability to maintain the cash reserves needed to pay such claims, the suits says.
The suit also alleges that a co. vp resigned because of his discomfort with the problems in late 2000 and other executives urged Donaldson to disclose them to the public. Those requests were refused, the suit says. Repeated upbeat statements by Donaldson, Rowe and Aetna about the company's financial health represented "a material deception of the investing public," the suit says.

Spring 2001, the co. announced losses because of inadequate reserves and its stock price dropped sharply. The 3 lead lawyers representing investors in the lawsuit did not return calls for comment Wednesday. A spokesman for Aetna dismissed the suit's claims.
"Aetna believes the suit has no merit," David Carter said, adding that the co. has filed a motion to dismiss the suit and is awaiting a judge's decision. The White House also downplayed the allegations.
"It's important that information be fully disclosed so that shareholders have timely information on which to base their investments," spokeswoman Claire Buchan said. "On this particular matter, Aetna has said it made all relevant information available to shareholders as soon as it was possible to do so."

The criticism of changes Donaldson made in co. rules led Aetna earlier this year to eliminate a "poison pill" mechanism intended to deflect unfriendly takeovers. An executive at Providence Investors, which led the criticism of Aetna, did not return a call for comment.

Bush turns to Wall St statesman, family friend
12.10.02   Matthew Goldstein The Street.com

… ties to the Bush family. At Yale, Donaldson roomed with the younger brother of the elder Geo. Bush, Jonathan, and his first job out of college was working for a Bush great uncle, according to an autobiography by former partner Richard Jenrette. All 3, George Sr, GW & Donaldson, are members of semi-secret Yale society Skull & Bones. Donaldson also has experience working for the govt, serving as special counsel to former VP Nelson Rockefeller and as asst to former Sec. State Kissinger during Ford administration. The Bush administration is now populated with veterans of former President Gerald Ford's brief 2 year term.

The securities industry was quick to applaud the nomination. … Donaldson's selection comes at a critical time because the SEC & state securities regulators are in the final leg of negotiating a sweeping regulatory settlement with a dozen Wall St firms, incl Goldman Sachs, J.P. Morgan Chase, Citigroup, Credit Suisse First Boston and Morgan Stanley. A deal to resolve the many investigations into some of Wall Street's unsavory business practices could be announced as early as next week.
… most of the other candidates said to be on the short list were either securities lawyers or securities regulators. … The outgoing SEC chairman came to the job with a reputation as hard-nosed securities atty. But that reputation proved his undoing, as Pitt turned out to be politically tone deaf in understanding the ways of Washington and the full impact Enron & other corporate scandals have had on investor confidence.

Pitt's fate was sealed after his botched handling of Wm Webster's nomination to lead a new accounting industry oversight board. The debacle not only forced Pitt to resign, but resulted in Webster, a former director of the Federal Bureau of Investigation, also stepping down. One of Donaldson's first tasks, if he's confirmed by the Senate, will be to find a new chair of the accounting oversight board. The new board is the centerpiece of the Sarbanes-Oxley corporate reform bill, which was passed in the aftermath of the Enron scandal.

… Donaldson currently runs Donaldson Enterprise, New York money management firm. … Donaldson also recently served on the board of Easylink Services, small NJ based information services co. founded by former DLJ investment banker. Donaldson sat on co. audit committee. In mid-Nov., a few days after Pitt announced his Election Day resignation from the SEC, Donaldson announced he was leaving Easylink's board.


NY   Time is running out for William Donaldson's tenure at the Securities & Exchange Commission even before his appointment has been confirmed. Underscoring urgency of presenting a competent new economics team, GWBush this week nominated Wm Donaldson as next head of SEC a month after the luckless Harvey Pitt tendered his resignation. It is also possible that the commission will move imminently to announce a replacement for Wm Webster, Mr Pitt's controversial choice to be head of the new Public Company Accounting Oversight Board, agency created to bring credibility back to America's financial reports.

Congressional hearings to approve Donaldson's appt are unlikely to begin before the new year. In the offing is comprehensive settlement between Wall St investment banks and a gaggle of regulators, the firms' penance for bull market sins. The most important ruling in years for financial firms is being made as the SEC drifts, allowing the lead to zealous local NY atty general Eliot Spitzer.

There will be fines, perhaps $1 billion in all, and a ban on shares in initial public offerings being granted to executives of firms with which banks do business (seedy practice known as spinning).
Most striking, the biggest investment banks will have to pay money to fund the creation of independent research for their retail investors, so that they can compare and contrast it with the research the banks themselves are putting out. All told, it is a remarkable intervention by the state into the workings of the financial markets, and it will not certainly provide the kind of consumer protection desired. Yet the share prices of Morgan Stanley, Goldman Sachs and Citigroup have rallied strongly since the prospects of a settlement have improved.

Bush's choice of Donaldson may be making the best of a difficult hand. Several sounded for interest in the chairmanship were appalled at the prospect. The ideal candidate needed to be intimately familiar with Wall St, yet untainted by its recent excesses. In other words, he should not have had a significant job for years.
Here, Donaldson has advantage, having stepped down in 1973 from an active role at Donaldson, Lufkin & Jenrette, firm he founded with 2 friends in the 1950s. His most recent time on Wall St was as chairman of New York Stock Exchange (NYSE) between 1990 & 1995.

Donaldson's time at the NYSE is not thought of as memorable, but that may be reason to be optimistic about his future stewardship of the commission. For the NYSE he joined had its own crises. Seat prices had fallen from $1.2m in 1987 to $250,000. Sharp divisions had grown among member firms. An increasing number of rival markets threatened the NYSE's dominance, including ones promoted by some of the exchange's most powerful members.

Donaldson's early years at the exchange also coincided with the Gulf war and with recession. All the same, by the time he left, there was a sense of calm. Transaction prices, even for small investors, were among the lowest in the world. Seat prices had largely recovered. And the transition was smooth for his successor, who was then chief executive of the exchange, Richard Grasso. When Mr Donaldson walked out of the NYSE, he carried with him the goodwill of Wall St, and a certain respect on Capitol Hill.

For the chairman of the SEC , of course, friends are not always a blessing. He has to be everyone's critic; in Mr Donaldson's case, he needs, in particular, to be a critic of those who paid his salary at the NYSE. Arthur Levitt, former head of another exchange who was commission chair under Bill Clinton, played the part well, and suffered the anger of many on Wall St. Securities lawyer Pitt was never able to lay to rest the perception that he kept his loyalty to his former investment-banking clients. Mr Donaldson's success will hinge on how quickly he can establish that he is his own man.

U.S. Treasurer resigns to Calif. return   Annoucement fuels speculation she plans bid to be first Hispanic woman in Senate   5.22.03   AP

Wash.D.C.   U.S. Treasurer Rosario Marin announced her resignation today, fueling speculation that she plans to challenge Sen. Barbara Boxer D-CA next year in a bid to become the first Hispanic woman to serve in the Senate. Marin, highest-ranking Hispanic woman in Bush admin, plans to return to California with her family when she leaves her post 6.30.03. "After long & thoughtful consideration, my family & I have decided to go back home to California," Marin said in her resignation letter to Treasury Sec. Snow.

Marin was traveling and not available to discuss her plans. But several Republicans said they saw her resignation as a step toward a Senate campaign in 2004. "She is actively, actively out there trying to put a campaign together," said Calif. GOP consultant Allan Hoffenblum.
Her only experience in elective politics has been in Huntington Park, heavily Hispanic & Democratic city of 65,000 people, 12,000 registered voters, just east of Los Angeles. Marin, 44, won a non-partisan election to the City Council and later was appointed mayor by other council members.

Though her signature can be found on U.S. currency, she has no track record raising campaign dollars. Analysts estimate that the 2004 race could require $25 million to finance expensive TV ads in key regions. Thus far, only declared GOP Senat candidate is SanFran Bay area Toni Casey, former Los Altos Hill mayor. Last week, Rep. Doug Ose, R-Sacramento, surprised GOP when he announced he would not run.
Rep. George Radanovich R-Mariposa & former GOP insurance commissioner candidate Gary Mendoza also are considering running.

Recently, Santa Maria state assemblyman Abel Maldonado, has been mentioned as a possible candidate. Few analysts expect President Bush to carry California in 2004 or Boxer to lose her bid for a third term.

Despite Marin's political inexperience, some GOP still view her possible candidacy as a positive development, regardless of eventual election outcome. Mexican-born Marin has been a key player in the administration's efforts to reach out to Hispanic voters, fastest-growing bloc of the electorate. She also has a compelling story in her rise to treasurer after arriving in U.S. at 14, unable to speak English.
Campaigning with Bush, Marin could help draw Hispanic votes away from Democrats and pave the way for better showings in future elections, GOP says. "Who are the 2 voter groups deserting GOP? Women & latinos," Hoffenblum said.

Democrat Boxer said she welcomes Marin to the race and predicted a tough campaign, no matter who Republicans nominate. Boxer's campaign spokesman Roy Behr characterized Marin as former Gov. Pete Wilson's "liaison to the Hispanic community." Wilson alienated Hispanics with his support for Proposition 187, which denied a wide range of public services to illegal immigrants.
Marin, however, publicly opposed Prop. 187, even though she worked for Wilson, Hoffenblum said . Beginning in 1992, Marin held various posts in Wilson's administration for nearly 7 years. She met Bush when he was TX gov. and she was Huntington Park mayor. She worked as an unpaid volunteer for Bush's presidential campaign then came to Wash.D.C. as treasurer in 2001.

That post involves overseeing the makers of America's greenbacks & coins, Bureau of Engraving & Printing and U.S. Mint, respectively.
    AttyGen J.
Conyers says Ashcroft should have recused himself from Microsoft case   2.15.01   D. Ian Hopper
AP

WASHINGTON   AG John Ashcroft should have declined to participate in the Microsoft case as he did with the Enron investigation, the House Judiciary Committee's top Democrat said Thursday. In a letter to Ashcroft, Rep. John Conyers said Microsoft's contributions to Ashcroft's Senate campaign, $20,000 in Ashcroft's failed 2000 bid alone, "cast even further doubt on the administration's actions" in the antitrust case. Ashcroft disqualified himself from the Enron investigation because he received donations for his Senate bid in 2000 from the energy trading co.. Justice's entire Houston office also has bowed out. "I am disappointed you have failed to take similar action in the Microsoft case, a matter involving a party from whom you also received sizable contributions," wrote Conyers, the lead Democrat on the House Judiciary Committee.

Conyers also has benefited from Microsoft, receiving $6,000 in political action committee donations from the software giant in the last two elections, Federal Election Committee records show. Justice Dept spokeswoman Gina Talamona referred to the Dept's statement on Enron, citing "the totality of the circumstances" as reason for Ashcroft's decision. "There was no basis for a recusal in" the Microsoft case, Talamona said. Conyers & other members of Congress have questioned the settlement reached last year between Microsoft, the Justice Dept and 9 states. They say the settlement is too lenient on the co., which was found to have broken antitrust law.
The govt's settlement would prevent Microsoft from retaliating against partners for using non-Microsoft products, require the co. to disclose some of its software blueprints so software developers can make compatible products and make it easier to remove extra Windows features. In 2 letters last year, Conyers said he was concerned by reports that Justice Dept officials had improper contacts with Microsoft before the settlement announcement. Conyers asked Ashcroft to list those contacts, as well as those involving the White House. Ashcroft declined, saying the Dept has "substantial confidentiality interests."

"We have long been concerned that disclosure of those communications would be detrimental to the unfettered exchange of views that is essential to our decision-making process regarding such matters," Ashcroft wrote Conyers in November. The White House also has cited the confidentiality of private meetings in the Enron case. GAO, investigative arm of Congress, has been unsuccessful in trying to obtain records of White House energy task force meetings. The GAO has said it plans to sue for the records' release. In its twice-a-year reports to Congress on lobbying activities, Microsoft reported spending $300,000 on lobbying in the first half of 2001 related to the antitrust case. "It's ridiculous to suggest that Microsoft's small donations over a 4 to 5 year period had any bearing on the outcome of this case," Microsoft spokesman Jim Desler said. The Americans for Technology Leadership, an interest group that includes Microsoft, noted that Ashcroft also received contributions from Microsoft competitors, as did some of the attorneys general suing the co.. In an additional development Thursday, Microsoft withdrew its request to compel Oracle to produce documents related to the Microsoft case. The fierce competitors resolved their differences themselves, Microsoft said.

  O'Neill urges economic 'perspective' ¹
  7.8.01   AP ²

Rome   An upbeat U.S. Treasury Sec. Paul O'Neill insisted that the gloomy global economy is poised for a rebound, telling his counterparts from the world's richest countries Saturday that people must have "some perspective'' about growth. Gathering in a Renaissance villa on a hilltop overlooking Rome, the finance ministers hammered out broad plans to revive the economy and downplayed dismal economic data. "Higher is better, but this is not terrible,'' O'Neill assured his colleagues at the one-day G-7, meeting.¹ "There is some perspective required here as to where we are.'' The faltering U.S. economy should climb to growth rates above 2% in the fourth quarter of this year and above 3% next year, O'Neill predicted. The optimistic forecast contrasts with that of many economists who expect U.S. growth for the just-completed second quarter to come in below the first quarter's 1.2% rate. But O'Neill pointed to a list of recent economic figures that indicate the U.S. economy could be headed for a turnaround, including record car & truck sales, high levels of home buying and relatively low unemployment.

The U.S. economy, which is a major motor of global growth, will also get a boost from the Bush administration's $1.35 trillion tax cut and a series of interest rate reductions by the U.S. Federal Reserve. "The corrections that are taking place in the U.S. economy are putting us on a footing that will put us to higher rates of real growth fairly soon,'' O'Neill said. O'Neill declined to comment on whether Japan and Europe were doing enough to combat the global slowdown, saying: "We're not here to throw rocks at each other.'' At the gathering, the top finance officials from the U.S., Japan, Germany, France, Britain, Italy and Canada were preparing the economics agenda for a July 20-22 summit of G-8 leaders in the northern Italian city of Genoa.
Russian officials were also there for bilateral talks on the sidelines of the main event. ¹ The G-7 ministers generally agreed that the global economy had slowed down more than expected, but remained confident that sound economic fundamentals and strong international cooperation could fuel renewed expansion. Among measures recommended by the ministers to bolster growth was a plan for economists to go through their countries region by region, identifying structural obstacles to growth there.The ministers also recommended launching a new round of World Trade Organization negotiations to open more borders to free trade, another action that could boost growth. To further shore up the economy, the ministers agreed to strengthen the international financial system, liberalize access to capital markets and discuss restructuring debt relief.

Japan's economic reform plans won high marks from the assembled ministers, with O'Neill winning a commitment from Japanese Finance Minister Masajuro Shiokawa that they will be in motion by this autumn. The Japanese economy shrank at an annual rate of 0.8% in the first quarter. The Japanese govt has pledged to tackle a number of thorny issues, including measures to help banks write off huge sums of soured loans and steps to rein in wasteful public spending. The European Union was also optimistic, despite Germany & France, region's biggest economies, slashing growth forecasts in recent months. "The slowdown is sharper than we envisaged,'' EU Monetary Affairs Commissioner Pedro Solbes said. "But European growth figures are higher than those of the U.S. & Japan.'' EU economic growth is expected to come in between 2 and 2.5% this year, Solbes said, adding that various tax cut policies in some EU countries will help growth rates as well as stricter govt spending. Earlier in the day, however, German Finance Minister Hans Eichel, stressed the euro zone's dependence on a quick U.S. rebound.


Aetna's Ex-CEO to Work With Kissinger, McLarty
3.14.01   Bus.News Hartford Courant
… Richard L. Huber, ousted as
Aetna's chief executive just over a year ago, is joining an investment group focused on Latin America and will serve in a firm headed by former Sec.State Kissenger. Huber named chief executive, managing dir. & principal in Norte-Sur Partners headed by former WhiteHouse Chief of Staff Thos.F.McLarty III with Jerry Jones, Dallas Cowboys owner.
  [ NTFAA NAFTA expanison to entire W.Hemisphere]

•   After Bush's defeat in 1992, became partner in Scowcroft, intl business consulting firm headed by former Natl Sec.Adviser Brent Scowcroft, where specialized in Africa privatization programmes. Expertise: U.S. policy toward sub-Saharan Africa; U.S. foreign, economic & trade policy; developing & transitioning economies; privatization & capital market formation
1991 Dir. African affairs at National Security Council lifting S.Africa sanctions and Angolan & Somalia negotiations. Dep.PressSec. for Bush Sr. White House; primary spokesman for foreign affairs 4.22.92
5.89-6.91   Sec.State's Policy Planning Staff. dir. for Africa;
1991 State Dept Distinguished Honor Award for work in privatization.
Defense Dept strategic minerals task force.
Prior to govt service, Exec.VP W.H.Kansteiner Inc (Chicago) ag commodities firm brokering sugar, cocoa & tropical commodities.
Washington & Lee U. '77, MA intl economics American Univ. '81. MA theol.studies VA Theol.Seminary '85   [ Jesuits ?! ]
dob 11.11.55   Lincoln VA 2 kids; spouse is member of prominent Republican family from Alabama, which incl Winton M. (Red) Blount, Postmaster General in Nixon's Cabinet. Blount & brother Houston founded Blount Intl, large construction & manufacturing firm w/ Montgomery HQ, been large contributors to party along with other family members.
author
7.6.00 Zimbabwe's Election 2.22.00 Fresh Start For Zimbabwe?
5.6.98 Clinton's African Experience 3.16.98 Clinton Goes to Africa
12.2.97 Kenyan Elections 7.16.97 Kenya's Political Future
4.97 Zaire 11.15.96 Eastern Zaire
2.27.97 African Response Force 2.95 Angola and Peacekeeping
5.8.96 S.African Cabinet Takes Different Shape 1988 S.Africa: Revolution or Reconciliation theology student thesis subject
refs
FAS   F16 sales to Taiwan, WH deputy press sec for foreign affairs 1992
embassy bombings Fortune magazine is the latest … Its headline: "Death of a continent." Fortune's take has one novel twist: it ranks US states & African countries side by side in a league table of annual output of goods and services, to make the point "sick people, sick economies". The strongest African economy, SA, came in 25th, $10bn behind Louisiana, generally accounted a pretty backward state. It has oil, a big port, heavily subsidised agriculture and tourism going for it. In 1998, its 4,4-million inhabitants generated a gross product of $129bn; SA's 41million, $119bn.
"The world would hardly notice if Africa's entire economy disappeared overnight," Fortune observed, remarking reassuringly: "AIDS in Africa won't make a blip in your retirement portfolio." All that could help Africa now was compassion, the magazine told its executive-class readers. Experience suggested even that might not do much good. "The billions of dollars the wealthy nations have spent on roads and dams and malaria eradication haven't changed the lot of the average African." It is hard to know what the effect of such articles is on investment decisions. Fortune did not explore investor sentiment. For business attitudes, it relied mostly on survey data and anecdotes supplied by researchers who take the view that anyone who does not believe the sky is falling is in denial. …
Investment adviser Walter Kansteiner of Scowcroft Group says: "I have not been involved in an (African) acquisition or investment that has not gone through because of AIDS, but I do know of deals that never got off the ground because the board said let's go fish in a different pool'. That is where the real damage is done by these articles. "If you are on the ground and your labour supply is dwindling, or you have absenteeism, you are going to have productivity problems, but you deal with it. If you are looking at a direct investment that is reasonably labour intensive and requires skills, AIDS comes into play, and you adjust your valuation accordingly." At the moment, Zimbabwean Pres. Mugabe is chilling foreign investment in the region far more effectively than AIDS. Kansteiner points to planned acquisition & expansion of SA service co. he was involved in earlier this year. The acquirer's board was unnerved by events in Zimbabwe, the source of only 5% of the SA firm's revenue, and cancelled the deal.

… Helms made his reasons for kinship with Bolton explicit. He recalled saying at an American Enterprise Inst. event that "Bolton is the kind of man with whom I would want to stand at Armageddon, for what the Bible describes as the final battle between good & evil in this world." Helms's political action committee, the National Congressional Club, was represented by Bolton when that PAC was fined for evading campaign finance laws. In turn, Helms backed Bolton for previous positions in the State & Justice Depts.
When Bolton was an asst atty general in 1989 he refused to provide documents Sen. John Kerry requested on drug trafficking by Nicaraguan contras. Kerry, who was dubious at Thursday's Foreign Relations Committee hearing about Bolton's professed backing for the 1994 Framework Agreement freezing N.Korea's nuclear weapons program, asked the nominee if he might be exhibiting a "confirmation conversion."

… Bolton does not belong in the arms control job because, as Carnegie Non-Proliferation Project dir. Joseph Cirincione, says: "Bolton is philosophically opposed to most of intl treaties that comprise the nonproliferation regime." Characteristically, Helms left no room for ambiguity at Thursday's hearing when he said to Bolton: "John, I want you to take that ABM Treaty and dump it in the same place we dumped our ABM co-signer, the Soviet Union, on the ash heap of history."
The 1972 antiballistic missile treaty that Helms & Bolton zealously oppose has served as what Cirincione calls "cornerstone of strategic stability in the world because it reins in the nuclear forces of the nuclear powers." Not only the ABM Treaty, but also the Comprehensive Test Ban Treaty, the Conference on Disarmament, the verification protocol to the Biological Weapons Convention and any effort to prevent an arms race in outer space are all valuable instruments for arms control. They would all be imperiled were Bolton to be put in charge of arms control at the State Dept.


Dems to challenge conservative nominees
3.29.01   Bill Nichols USA TODAY p10A

Wash.D.C.   Except for AttyGen John Ashcroft, Pres. GWBush's nominees to administration posts have avoided Senate confirmation fights. That might change starting today. Democrats are gearing up to challenge a growing list of controversial conservatives chosen for key jobs. The critics say Bush's selections reflect his desire to placate GOP's right wing.
First up: Senate Foreign Relations Committee hearing today on John Bolton nomination, Reagan & Bush pere admin veteran, to be undersecretary of State for arms control & intl security affairs. Critics say he has shown disdain for the UN & many arms-control treaties. Democrats also question Bush's choice of Otto Reich as asst sec of State for LatinAm & John Negroponte as U.N. ambassador. Reich spearheaded Reagan administration pgm to build public support for anti-communist ''contras,'' or rebels, in Nicaragua. Negroponte has been accused of ignoring human rights abuses in Honduras when he served as U.S. ambassador there in the 1980s.

Democrats have been grumbling about other conservatives Bush has nominated or might tap:
•   Harvard prof. John Graham for regulations czar in Bush's budget office, has reputation as opponent of many environmental safeguards.
•   Kay Cole James to head Office of Personnel Mgmnt, former dean at Christian activist Pat Robertson's Regent Univ.
•   Michael McConnell, Univ. of Utah law professor who supports greater govt involvement with religious activities & Jeffrey Sutton, Columbus OH lawyer strong states' rights advocate, are top candidates for seats on U.S. appeals courts.

State Dept is focus of Dem. outrage for now. These nominations raise ''concerns about the real commitment of the Bush administration to a bipartisan foreign policy,'' says Sen. John Kerry D-MA. ''Never before have so many ideological choices been made to execute key elements of what a president argues will be a foreign policy beyond the ideological gridlock of the past.''

Although Kerry & other Democrats will raise a stink about Bush's nominees, they aren't showing any signs of trying to defeat the nominations, which Senate staffers privately say are virtually certain to win confirmation. Interest groups that oppose Bolton, Reich and Negroponte say many senators fear angering powerful Senate Foreign Relations chair Jesse Helms R-NC, avid supporter of all 3.
Senate Dem. staffers also say that their bosses believe the slim chance of winning a confirmation fight in an evenly divided Senate must be weighed carefully against the political risk of opposing a nomination & losing. In the 50-50 Senate, VP Cheney has a tie-breaking vote.
''No one is saying they won't oppose (Bolton),'' says arms control advocates Council for a Livable World pres. John Isaacs. ''Clearly, senators are uncomfortable with Bolton & his positions & his bkgd. The problem is that they're waiting for someone else to take the lead.''

Wh.House officials say Bush stands behind his choices and is confident that they will be confirmed. ''If people have questions about their abilities or their qualifications, each of these nominees will have ample opportunities to address those questions,'' NSC spokeswoman Mary Ellen Countryman says. Democrats clearly have questions. Among them:
•   Critics of Bolton, currently vp at American Enterprise Inst. home to right-wing luminaries such as Newt Gingrich, Richard Perle, Jeane Kirkpatrick & Lynne Cheney, say abundant writings & speeches make him unfit to be Undersecretary of State for Arms Control, Non-Proliferation & Intl Security, State Dept #3 & top arms-control official.
Among the arms-control accords he has opposed is the Comprehensive Test Ban Treaty, which President Clinton signed in 1996 but the Senate refused to ratify. Bolton also has argued that Washington should recognize Taiwan, a move that would reverse U.S. policy & infuriate China. ''It's like putting the wolf in the hen's house,'' says Don Kraus, Campaign for U.N. Reform head [ Carl Nyberg
''This is a guy who, as best I can tell, has never seen a multilateral agreement that he liked.''

Helms, whose conservative foreign-policy views often rile Democrats, has called Bolton ''the kind of man with whom I would want to stand at Armageddon.''
•   As 1984-89 asst atty general, Bolton crossed swords with both parties. He angered Senate Democrats when he refused to provide requested documents during confirmation hearings of 2 Supreme Court nominees. Reagan Wh.House slapped him down for criticizing independent counsels investigating Reagan admin. Bolton also was president of the tax-exempt National Policy Forum, GOP subsidiary, but left the post shortly before a 1997 cong. probe into whether the group illegally took foreign donations during the 1996 election. No charges were filed.

•   Reich, former U.S. Venezuela ambassador, headed covert Reagan admin pgm to build public support for the Nicaraguan contras. Cong. watchdog agency GAO comptroller general, concluded in 1987 that Reich's office ''engaged in prohibited, covert propaganda activities.'' Reich, however, was never charged with any wrongdoing. The Cuban native, who emigrated to the USA when he was 15, has strong backing in Florida among Cuban-American leaders, who were energetic supporters of Bush's presidential bid last year.

•   Critics of Negroponte, career diplomat & close friend of Sec.State Powell, contend he turned a blind eye to human rights abuses by Honduran military while he was ambassador. But Senate aides say Negroponte's confirmation is virtually assured because of his friendship with Powell and Senate's approval of his more recent stints as ambassador to Mexico & Philippines.


public service incl representing U.S.in the Law of the Sea Conference, the International Telecommunications Union, and in various arms control and exchange agreements with former Soviet Union.
served on President Bush's Gulf War Air Power Survey and President Reagan's Commission on Cost Control in the Federal Govt. Home is on the Severn River, maintains residences in Wash.D.C. & Aspen, CO
President Bush nominated Capital-Gazette Newspapers publisher Philip Merrill to serve as chair & president of U.S. Export-Import Bank. The appointment would put the Arnold resident at the head of an independent federal agency that provides loans, loan guarantees and insurance to help American companies finance their sales overseas and compete against often heavily subsidized foreign competitors.

If confirmed by the Senate, he would head the bank until 1.20.05, filling the remainder of the 4 year term left vacant with the death of John E. Robson in March. "I am honored and flattered and pleased to join this administration," Mr. Merrill said. "This bank performs a useful function, promoting exports and creating U.S. jobs."

A spokesman for Sen. Paul Sarbanes D-MD said he supports Mr. Merrill's nomination for the post. "The senator believes he is well qualified and supports him for the job," Mr. Sarbanes' spokesman, Jessie Jacobs, said. "We hope to have his confirmation hearing by the time Congress adjourns next week."
An entrepreneur & investor, Mr. Merrill has combined publishing & public service throughout his career. He has served in 6 past administrations.
Before buying Capital-Gazette Communications in 1968, Mr. Merrill had served as special asst to deputy secretary of state, and had worked in the White House on national security issues. He is a member of the Defense Policy Board, the Pentagon's Business Board, was formerly counselor to the Undersecretary of Defense for Policy, and was senior State Dept intelligence analyst for South Asia.   [ cf. Armitage ]

He also held the highest ranking American position at NATO from 1990 to 1992, serving as asst secretary-general.
Mr. Merrill is a trustee of the Aspen Institute, the Chesapeake Bay Foundation, Johns Hopkins Univ. and serves on the Univ. of Maryland's Board of Visitors. In 1988, the secretary of defense awarded him the Medal for Distinguished Service, the highest civilian honor given by the Defense Dept.

He is a graduate of Cornell University, the Harvard Business School's Program for Management Development, and is a former fellow of the Institute for International Affairs of the University of Chicago. Merrill said if confirmed, he would resign as chair & publisher of Capital-Gazette Communications and his wife Eleanor would assume his position. In addition to The Capital, the co. also owns and publishes the Maryland Gazette, West County News, the Bowie Blade-News, the Crofton News-Crier, South County Gazette and Washingtonian magazine.

Although an agency little known to the general public, Export-Import Bank is a key player in the Bush administration's economic & trade policy. "It's an important appointment," said Robert Henel, president of Annapolis Banking & Trust. "(Ex-Im Bank's) impact is on larger banks that utilize intl trade." Created in 1934 to support U.S. jobs by backing exports, it has a budget of nearly $10 billion a year, roughly half the size of the World Bank. It has $57 billion in outstanding loans, and the statutory capability to issue $100 billion in loan guarantees.
The Ex-Im Bank's loan default ratio is less than 5%, about the same as most commercial banks.

Kerik pleads guilty in corruption probe
6.30.06   Tom Hays AP

NYC   Former police commissioner Bernard Kerik, whose rise from beat cop to nominee for Homeland Security head was derailed by ethics questions, dodged prison Friday in a plea bargain by admitting he took $165,000 in gifts from a company attempting to do business with the city.
Kerik, at a 10-minute hearing in state Supreme Court in the Bronx, pleaded guilty to a pair of misdemeanors under a deal that allows him to continue without interruption his new career as a security consultant in the Middle East. Kerik acknowledged accepting $165,000 in renovations on his Bronx apartment from a company attempting to land city contracts, Interstate Industrial Corp., a business reputedly linked to organized crime. And he admitted failing to report a $28,000 loan from a real estate developer as required by city law.

The transgressions occurred while Kerik was head of the city Correction Dept. In entering his plea, Kerik admitted speaking to city officials about Interstate, but never acknowledged a link between the renovations and his support of the company. Outside court, Kerik showed no sign of remorse and offered no apology.
"The last year and a half has been a tremendous burden," said Kerik, who must pay $221,000 in fines. "But today it's over. Now I can get on with my business."
City officials defended the deal with Kerik, saying he received the same treatment as any other defendant.
"He was arrested and booked, plain and simple," said Dept of Investigation commissioner Rose Gill Hearn. "He was fingerprinted and photographed, just like every other perp who gets arrested and processed by the agency he used to lead."

Kerik's close friend and former business partner, ex-mayor Rudolph Giuliani, said the guilty pleas do not diminish the former police commissioner's accomplishments.
"Bernard Kerik has acknowledged his violations, but this should be evaluated in light of his service to the U.S.A. & City of New York," Giuliani said in a statement. Giuliani has said he was unaware of the Interstate links when he selected Kerik as police commissioner in 2000.
Kerik first drew national attention while leading the Police Dept's response to 9..11.01. By late 2004, President Bush wanted him for homeland security chief, but he withdrew after acknowledging he had not paid all taxes for a family nanny-housekeeper and that the woman may have been in the country illegally.

More problems surfaced last year when the New Jersey Division of Gaming Enforcement filed court papers seeking to revoke Interstate Industrial's license to work on casinos in Atlantic City. The papers cited testimony by mob turncoats that owners Frank & Peter DiTommaso were associates of the Gambino organized crime family.
The civil complaint also detailed Kerik's cozy relationship with an Interstate official. In 1999, he sent a series of e-mails to the official that "indicated his lack of sufficient funds to both purchase & renovate his new Bronx apartment" and "indicated he would provide information to Frank DiTommaso regarding New York City contracts," the papers said.
In recent months, a grand jury has heard conflicting testimony from the DiTommaso brothers, who denied paying for the renovations, and from a contractor who said they picked up most of the tab.

Wash.D.C.   President Bush has chosen aide Mark Everson to be IRS commissioner tapping a top manager from within the White House to head the nation's tax-collection agency. Everson is White House Office of Management & Budget deputy dir. During Reagan administration, Everson served in the Immigration & Naturalization Service, Justice Dept and U.S. Information Agency.
The IRS nomination requires Senate approval. Previous commissioner Charles Rossotti decided not to seek a second 5-year term and left his post in November.

Everson "has worked on govt-wide financial management & technology issues and is well-qualified to take over management of the IRS," White House spokesman Ari Fleischer said Monday. In addition to his govt jobs, Everson was an executive of in-flight catering firm LSG Sky Chefs, which has corporate offices in Arlington, Texas, and from 1988 to 1998 was with aluminum producer Pechiney Group.
He holds a master's degree in accounting from New York University. He & wife Nanette gave the maximum allowable donations to Bush in his 2000 presidential campaign, $4,000 between them. Nanette Everson is a White House lawyer.

Advocates for taxpayers Monday were trying to discern what Everson's nomination might mean for the IRS. Nonpartisan National Taxpayers Union spokesman Pete Sepp said, "In tax policy circles, we can't say we've heard anything about him."
Fleischer said, "The position of IRS commissioner is not a tax-policy position; it really is a management position." Everson, he said, has significant experience in 2 crucial areas for the IRS, financial management & technology issues. Bush tapped Clay Johnson, the White House personnel director, to replace Everson at the OMB.

Sepp said he was encouraged by Everson's management experience. Although IRS commissioners often come from within the agency, Sepp said that pattern was not necessarily healthy. "That has rarely worked out well for taxpayers," he said. Everson should focus on further advances in tax simplification & taxpayers' rights, Sepp said.
Rossotti, the last commissioner, came from the private sector. He was the founder of American Management Systems Inc., Fairfax VA computer services co. Rossotti oversaw the start of a restructuring at the IRS after Congress found that the agency's computer systems were inadequate.
Devotion of 'Reaganauts' undiminished   46 GOP members of Congress first elected in 1980s are still on Hill. For some, the ties are esp. close   6.7.04   Nick Anderson L.A. Times

Wash.D.C.   They have dwindled in number but grown in stature & seniority since their political hero left the White House 15 years ago. Their ranks include the House speaker and majority leader, the Senate majority whip and several powerful committee chairmen on Capitol Hill. They are the "Reaganauts," members of Congress first elected in the 1980s. Critics sometimes called them the "Reagan robots" because of their devotion to the president's principles. This week, they will pay their final respects to the 40th president as his body lies in state Wednesday evening and Thursday in the Capitol rotunda.

On Sunday, GOP lawmakers whose careers in Washington began under President Reagan reflected on his life a day after his death. "Ronald Reagan … gave America & Americans the belief that we could do great things and we could become relevant in the world," House Speaker J. Dennis Hastert R-IL told CNN's "Late Edition."
  [ Esp. relevant to Zion ]
The speaker, first elected to the House in 1986, said he addressed a Ronald Reagan Day dinner this year in Dixon IL where the late president was raised. "Ronald Reagan allowed millions of people to walk in freedom today because he had the ability to challenge," Hastert said. "When the rest of the world stepped back, he stepped forward and challenged the Soviet Union."   [ Challenge via record deficit leaving the nation in lasting penury because he failed to meet his declared domestic goals of a balanced budget on which avowal the electorate gave him mandate ]

Hastert's second in command, Majority Leader Tom DeLay R-TX, was first elected to the House in 1984, the year of Reagan's landslide reelection, as was Senate Majority Whip Mitch McConnell R-KY. 9 current GOP senators won their seats during the 1980s, when Reagan dominated his party and the American political landscape. 37 current GOP representatives first came to the House in that decade.
For some Californians, ties to the late president were especially close. Rep. Christopher Cox R-Newport Beach CA & Dana Rohrabacher R-Huntington Beach CA were elected in 1988 after working in the Reagan White House. "Reagan influenced a whole generation of people here," Rohrabacher said Sunday. "I'm 56, and my whole life has been influenced by the man." Rohrabacher worked as asst press secretary to Reagan during his 1976 & 1980 presidential runs. His job was to track the candidate's every public utterance. Rohrabacher recalled that what struck him about Reagan was his unchanging persona in public and private. "When the door shut, you didn't see a new personality emerge," Rohrabacher said. "Reagan was always very kind. What you saw on the stage was Ronald Reagan. I never heard him say nasty words about anybody. He was just a very benevolent soul. He showed me that you could be very principled and idealistic and philosophical while still being a pleasant person."
  [ Easy to be pleasant when a puppet ]

When Rohrabacher left his job as a White House speechwriter to run for Congress, he carried with him a glowing letter of praise from the president. He reprinted it for a mailed advertisement during a hard-fought 1988 Republican primary, and it helped Rohrabacher to victory. Rep. Duncan Hunter R-El Cajon CA, House Armed Services Committee chair, recalled what helped him win 1980 GOP primary: a photo with Reagan. Hunter said his politically connected father arranged a meeting with Reagan advisors and a photo with the presidential candidate in L.A. to boost the candidacy of the 32-year-old congressional hopeful.
Hunter won the primary then ousted a Democratic incumbent in San Diego as Reagan won the presidency. Like Reagan, an advocate for increased defense spending, Hunter said Reagan's long fight against communist tyranny had inspired his own career. "The great thing about Ronald Reagan's presidency was it proved that conservatism worked," Hunter said. "It was a validation of the principles of conservatism."
  [ Reagan was a corporate fascist promulgating record corporate welfare, not least of the munitions procurement on which Hunter fundamentally relies for campaign financing. The early resignation of David Stockman ended all pretense of Reagan fiscal conservatism. ]

Rep. David Dreier R-San Dimas CA, House Rules Committee chair, rode Reagan's coattails to victory over a Democratic incumbent in 1980. Dreier & Hunter were 2 of 53 Republicans first elected to the House that year, Dreier said, an astounding 33 of whom beat incumbent Democrats. It was one of the largest Republican gains in the last half of the 20th century. Dreier's first 2 bills, to abolish Depts of Energy and Education, were lifted from the Reagan platform, though they never were enacted.
Now just 6 members from the House Republican class of 1980 remain, plus 2 who moved over to the Senate. But Dreier said Reagan's legacy extended to almost all of GOP now in Congress, whether first elected before or after his presidency. That, he said, has been true of both the House, GOP led since 1995, and the Senate, in GOP control for most of that time. "When we won the majority, we all said we were standing on Ronald Reagan's shoulders," Dreier said. "I've always described myself as a Reagan Republican. I did then, and I'm happy 24 years later to do so today. It's an upbeat … glass-half-full view of the world."


Where are they now?   Figures from Pres. Reagan's 2 terms in office.   6.7.04   L.A. Times

  inner circle
James A. Baker III   Although Baker chaired George H.W. Bush's unsuccessful campaign for the 1980 GOP presidential nomination, Reagan named him White House chief of staff during the first term and Treasury secretary in the second term. When Bush was elected president in 1988, Baker became his secretary of State. A senior partner at Baker Botts LLP, TX based intl law firm, Baker undertook an Iraqi debt relief mission for Pres. GWBush last year.

Edwin Meese III   Meese served as Reagan's chief of staff in the governor's office in Sacramento, campaign advisor in 1980 and White House counselor in the first term. As atty general in 1986, Meese revealed that proceeds from arms sales to Iranian moderates had been diverted to Nicaraguan Contras, the rebels seeking to overthrow a leftist govt, in violation of a congressional funding ban. He resigned during a 1988 investigation of illegal lobbying by a defense contractor, although he was never charged with wrongdoing. Meese is now a public policy scholar with the Heritage Fdtn in Washington and the Hoover Institution at Stanford University.

Michael K. Deaver   Confidant of Nancy Reagan, he was communications strategist and deputy chief of staff in Reagan's first term. Deaver joined Reagan in the mid-1960s as liaison from the governor's office to Nancy Reagan; when the Reagans reached the White House, his job was to present the president in the best possible light, and many of his techniques are practiced today. In 1985, Deaver opened a communications firm but became involved in a 1988 lobbying scandal and was convicted of perjury. He now heads the Washington office of Edelman, a public relations firm, and has written several books about the Reagans.

Spokesman James S. Brady   Only two months after fulfilling his dream of becoming White House spokesman, Brady was shot in the head by John Hinckley in 3.30.81 assassination attempt on Reagan. Brady remained White House press secretary until the end of the administration, although the severity of his injuries made him unable to function as spokesman. In 1993, President Clinton signed the Brady bill, named in his honor, requiring background checks and a waiting period for handgun purchases. Hinckley was found not guilty by reason of insanity and has spent the last 2 decades at a Washington mental hospital.

  foreign policy & national security
Alexander M. Haig   Retired 4 star Army general served as Reagan's first secretary of State. His hopes of becoming the chief architect of foreign policy were thwarted by infighting and his own missteps. During an appearance in the White House press office the day Reagan was shot, Haig misstated his place in the line of succession, declaring, "I am in control here in the White House" pending return of Vice President Bush from a trip. Haig now heads his own intl corporate consulting firm.

George P. Shultz   Shultz replaced Haig as secretary of State in 1982 and served through the end of the administration, carrying out Reagan's nuclear arms control agenda in negotiations with the Soviet Union. An economist with a long career of govt service, he was a stabilizing force during the Iran-Contra scandal. Shultz is a sr scholar at the Hoover Institution and advised California Gov. Arnold Schwarzenegger during the recall campaign.

Oliver North   USMC Lt Col & NSC aide was operations chief of Iran-Contra scheme, devised as attempt to gain the release of U.S. hostages in Lebanon. He was convicted of misleading Congress and other violations, but the charges were overturned on appeal. North now works as a radio commentator and author, and was a war correspondent for Fox News in Iraq.

John M. Poindexter   As national security advisor, the Navy rear admiral was the highest ranking White House official to sign off on the financing scheme for the Contras. Like North, he was convicted of obstructing Congress and other charges; his conviction was overturned on appeal. Poindexter later became a civilian employee of DARPA, the Pentagon's advanced research agency and ran into controversy last year with a project, canceled shortly after it was publicized, that attempted to forecast terrorist activity by creating a futures market in which investors would effectively bet on the likelihood of attacks.

Caspar W. Weinberger   As secretary of Defense from 1981 to 1987, Weinberger presided over Reagan's defense buildup and the Strategic Defense Initiative, or "Star Wars," which embodied Reagan's dream of protecting the U.S. from nuclear missiles. Like Shultz, he opposed the administration's arms sales to Iran. But his career was tarnished when he became the highest-ranking figure indicted in the Iran-Contra investigation, on charges related to an alleged cover-up. President George H.W. Bush pardoned Weinberger before he stood trial, calling him a "patriot" and criticizing the investigation as excessive. Weinberger is now chairman of Forbes magazine.

Jeane J. Kirkpatrick   A political scientist specializing in foreign policy, Kirkpatrick was a Democrat when Reagan appointed her UN ambassador, where she was a steely advocate of Reagan's get-tough policies. Kirkpatrick, who later became GOP, is sr scholar at American Enterprise Institute, business-oriented think tank in Washington, and a faculty member at Georgetown University.

  economy & domestic policy
David A. Stockman   Antiwar activist in the 1960s, Stockman was a conservative Republican by the time he became White House budget director in Reagan's first term.

Stockman led the charge for Reagan's tax cuts, but hoped-for cuts in domestic spending never came and the deficit ballooned. After leaving the administration, Stockman became an investment banker.

James G. Watt   Reagan's first Interior secretary became a focus of criticism by environmentalists for his support of oil & gas exploration, mining and logging. Watt resigned in 1983 after he described members of a federal advisory panel as "a black … a woman, 2 Jews and a cripple." He returned to his native Wyoming, where he has worked as a lawyer, lecturer, college professor and businessman.

Anne Gorsuch Burford   She was Reagan's first EPA administrator and first woman named to that post. Her tenure was stormy; a lawyer with little experience in environmental issues, she was viewed by environmentalists as having a mandate to weaken regulations and limit enforcement activities. She resigned in 1983 amid allegations that EPA had mismanaged the Superfund program to clean up contaminated sites. Burford is a lawyer in Denver.

Elizabeth H. Dole   In 1983, Dole became the first woman to hold the post of Transportation secretary. She oversaw the rebuilding of the air traffic control system in the aftermath of the 1981 controllers' strike that resulted in mass firings, and her tenure in the job was relatively smooth. Dole went on to serve President George H.W. Bush as Labor secretary and as president of the American Red Cross. She was elected U.S. senator from North Carolina in 2002.

    Barnardo
Porter Goss 
¹
a Marcellus & Horatio   (1.1.110)
… "Well may it sort that this portentous figure
Comes armed through our watch; so like the king
That was and is the question of these wars."

Dark Victory   Ronald Reagan, MCA
  and the Mob
, Dan E. Moldea, 1986
The overall chair of Reagan's presidential campaign was William Casey, SEC head under Nixon.
An intelligence officer during WWII, Casey had been founder, general counsel and member of the board of directors of Multiponics, an agribusiness firm.
Originally called Ivanhoe Associates, Inc., the company was created for the purpose of industrializing scientific farming and owned 44,000 acres of farm land in Mississippi, Arkansas, Louisiana and Florida. By midsummer 1970, the company had suffered huge financial losses. Doing little more than changing the company's name to Multiponics, the corp. filed for bankruptcy in February 1971, owing $20.6 million to creditors, incl Bernard Cornfield, head of Investors Overseas Services and an associate of international swindler Robert Vesco.

During his tenure in the SEC, Casey had discussed a commission suit against Vesco with former attorney general John Mitchell, who was concerned about the political embarrassment of a $200,000 cash contribution Vesco had made to Nixon's reelection campaign. Casey made the admission during his testimony at Mitchell's Watergate trial.

One of Casey's partners in Multiponics was Carl Biehl, associate of underworld figures in the Carlos Marcello crime family in New Orleans who had been attempting to penetrate waterfront operations on the Gulf Coast. Information on Biehl was based on federal wiretaps in Washington and New Orleans which showed that Biehl had been working with the underworld since the early 1950s.
When revelations about Biehl and other Multiponics improprieties surfaced, Casey claimed that his relationship with the firm was from a distance. However, during the 9.15.75 Multiponics bankruptcy hearing in New Orleans, Casey testified, "I think the record will show that I had a great deal to say and a fair amount of influence in the basic decisions that the directors made."

Repeatedly accused of having questionable business ethics, Casey was particularly attacked by Senator Wm Proxmire in 1971. "Casey has cut corners when he considered it to be necessary to business profit. He has wheeled and dealed his way into a personal fortune, sometimes at the expense of his clients … and he has made less than a complete and accurate disclosure of his activities to Congress."
  [ empty rhetoric ]
In another case, in 1977 Casey represented NJ based waste disposal concern SCA Services in an unsuccessful effort to head off an SEC action against SCE and some of its top officers. Although SEC attorneys proceeded with the complaint, which alleged the diversion of some $4 million in co. funds for personal use by its officials, Casey negotiated a settlement of the case in which SCA neither admitted nor denied the charges.

Later, a govt informant told congressional investigators that SCA had "been involved with organized crime in the garbage business and now they're moving into hazardous waste." NJ State Police intelligence identified at least 3 recent SCA employees as having "strong, deep rooted connections to organized crime".
SCA president Thomas C. Viola was forced out of the co. by SEC because of his own links to the underworld. Crescent Roselle, manager of Waste Disposal Inc. which was taken over by SCA in 1973, had been personally involved with numerous Mafia figures and was later found murdered.

Casey's assistant during the Reagan campaign was Max Hughel, an executive vice president of the Centronics Data Computer Corporation of Hudson NH. A portion of Centronics was owned until 1974 by Caesar's World casino gambling co., then under federal investigation for alleged mob ownership, when Hughel's previous firm, Brother International Corporation, bouht Caesar's holdings in Centronics.
Centronics had a consultancy relationship with mobster Moe Dalitz and his Las Vegas casinos.
Hughel was involved in a pattern of improper or illegal stock market practices intended to boost stock of the NY wholesale firm he headed in the mid 1970s. He was alleged to have threatened to kill a former business associate and told another that he might be found "hanging by his balls."

Hughel said he knew Casey for 20 years, was in charge of organinzing "ethnic, nationalities occupational, religious and other voting groups" for Reagan.
Reagan's principal competion during the GOP caucuses and primaries in 1980 was former CIA dir. Geo. Bush.
…Appointed by Reagan as CIA dir., Casey appointed Hughel deputy dir. of operations, in charge of covert actions and clandestine intelligence gathering abroad..
… Reagan also announced appointment of NJ insurance executive & Casey friend William E. McCann as ambassador to Ireland, eventually withdrawn when ties to organized crime arose during confirmation hearings.


    The Sett   Ranulph Fiennes auth. 1996
"Reagan had no confidence in the body of the CIA but he trusted Casey at their helm. … Casey, who remained the powerful Director of the CIA from 1981 until his death in 1987, served in 2 quite separate roles.
Openly he was leader of the most powerful secret service in the world. In secret he maneuvered a group of his trusted chums, many of them millionaires with worldwide connections of their own, in covert operations unknown to the CIA professionals but approved of by Reagan when Casey saw fit to pass the President details of their activities.

A number of these Casey 'friends' were well known to and frowned upon by the CIA officials at Langley VA. They were called the Hardy Boys and they brazenly used the Director's private office lift at CIA HQ.
They included Swiss tycoon Bruce Rappaport, Brooklyn tough guy Max Hugel, who was briefly elevated to official CIA status, and ex-Eisenhower aide Bob Anderson.

Casey loved all things covert and remembered as the best years of his life his successful WWII career in the OSS, CIA precursor. Unbeknown to his wife, the CIA or even his Hardy Boy colleagues, he nursed a secret within a secret, a group of 'patriots', including OSS & Vietnam veterans, business entrepreneurs and top New York lawyers, whose activities were kept a jealously guarded internal secret.
They avoided nomenclature, committees and telephone conversations. Their success stood the test of time in that their existence remained unconfirmed despite numerous Congressional & Senate inquiries into potential international crises spawned directly by their machinations.

Only one if Casey's secret group, 'The Friends', was also a member of the Hardy Boys and visited Casey openly at Langley. John Shaheen, successful ex-OSS banker, as essentially Irish-Catholic in his moral ethics as Casey, was chief puppeteer of The Friends.
In the early summer of 1984, he and Casey gave themselves elaborate alibis and joined fellow Friend Albert Redden on board his private Boeing jet to fly to Chakala Air Base near Islamabad.

Casey had been there two months previously in his official CIA capacity; arriving in a giant black U.S. warplane, to energize his opposite number, General Yousef of Pakistan's ISS. Their joint aim was the defeat of Soviet forces in Afghanistan.
Casey, Shaheen and Redden were blown by military helicopter from Islamabad to a walled mansion on the plain of the river Ravi in the eastern Punjab. This house was owned by the Bank of Credit and Commerce Intl and run by the bank's Protocol Dept for the specific purpose of impressing foreign dignitaries and prospective BCCI clients.

Casey and his boss Reagan had long appreciated that BCCI was no normal bank. Privately they called it 'the bank of crooks and criminals incorporatec'. 7 long years before the Bank of England was to announce BCCI bankrupt and freeze its worldwide assets, the CIA Dir. knew BCCI as the evil brainchild of a financial magus from Pakistan.
BCCI banked for drug barons, terrorists, dictators, and spy services. With branches in 80 countries and masterminded from the City of London, (it) was run by Pakistanis under (by) BCCI founder Agha Hassan Abedi.

Abedi, a man of impressive charm and the features of a falcon, met Casey, Redden and Shaheen for a late breakfast once they had recovered from the ten thousand mile flight. He introduced a sleekly dressed Pakistani to Redden.
'This is Asaf Ali, a world authority on the sale of arms', he laughed. 'I should say the authority'.
Casey and Shaheen shook the man's hand. They had met previously. …

'This is Javed Abbas', Abedi next introduced a small, dark skinned Punjabi, 'from our Protocol Dept. In the absence of Sami Ahmed, Javed from Lahore is arranging a good time for us all once the business is over'.
… 'The president will arrive shortly. Quite how shortly I cannot say. He will not want to keep you waiting, Mr. Casey, but he too is a very busy man these days'.
President Zia ul-Haq ruled Pakistan with military discipline and Shia Muslim fervor. Hands were cut off robbers, adulterous women were stoned to death. Zia had many enemies and lived in a land of assassins. He controlled the drug trade that produced 70% of the world's heroin yet he spoke fine words to the USA about draconian measures to curtail output.

Zia's arch-enemy, India, was a nuclear power and Pakistan wished fervently to have its own atomic trigger. Abedi's BCCI was sworn to help the mother country buy nuclear secrets and materials through their contacts around the world.
This included a complete uranium conversion plant from West Germany. Officially, the USA were against Pakistan or anyone else joining the nukes club and they loudly proclaimed Reagan's war on drugs. But U.S. foreign diplomacy was focused above all else on containing the spread of communism. So long as Zia and BCCI continued to support this aim in Afghanistan, a blind eye would be turned on the lesser evil of the spread of atomic warheads and drugs.

… Redden's reason(s) for having offered his anonymous jet for the flight incl. needing to impress Abedi for his own ends. … Professionally, he was an international criminal with irons in many fires and influence in all the right places. Through the Friends, he had access to Casey, thence the CIA. Through Abedi's banks he laundered huge amounts of money around the globe and, in the early eighties, invested the filtered results in prime property and real estate.
Redden, a German Jew from Dresden, had fled to the USA in 1945, shortly before the Soviets closed in on his homeland. While all around him people died in Nazi extermination camps, unemotional realist Redden blamed them for being caught. … Fascism made economic sense to Redden.
… from his early days in wartime Bronx, Redden did all he could to fight the spread of Marxism.

The OSS took notice and sent Redden back into Germany during the last 2 years of the war, when Casey decided to position a generation of sleepers east of the Rhine. Into the early seventies, Redden worked for the FBI as well as the fledgling CIA, always as a freelance and usually unpaid.
One of his tasks was liaison with the Mafia families when their support was needed for difficult projects like 1962 Bay of Pigs operation. He learnt early on never to cross the Mob and never poach on their territory.

In May 1972 at age 42, Redden masterminded an ice-cool robbery at 4936 30th Place, the empty Wash. D.C. home of newly dead FBI Dir. Hoover. Stolen documents referring to Redden's own liaison activities with the Mafia in the 1950s & 1960s were destroyed. Others were kept against a rainy day. Their shelf life was likely to last well into the next century.
By the late 1970s, based in Los Angeles and his favored home the Bahamas, Redden had become one of the world's richest criminals. His watchword was anonymity and he avoided all excesses. Unmarried and bisexual, he used several identities and seldom made love twice to the same person.

Redden conducted business through his long time companion Korbi Richter. Their relationship stemmed from 1954 when Redden had infiltrated a left wing student group in Chicago.

… Thick spectacles clouded (Casey's) grey eyes. Stooping and all but bald, … his enunciation was poor at best of times; close concentration on his lips was imperative. Casey's boss Ronald Reagan … was too polite to constantly ask Casey to repeat himself. He would simply nod in agreement.
This made it easy for Casey to say "I have the President's agreement".

… There is now an office in the White House from where this U.S. Marines officer handles crooked arms dealers, likes of Adnan Khashoggi, in order to follow up Casey's foreign policy, already banned by Congress. …

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