Saddam's Global Payroll
It's time to take a serious look at the U.N.'s oil-for-food program.
BY THERSE RAPHAEL
Monday, February 9, 2004 8:00 a.m. EST
On Dec. 5, during a trip to Baghdad, Claude Hankes-Drielsma faxed an urgent letter to U.N. Secretary-General Kofi Annan. Mr. Drielsma, the U.K. Chairman of Roland Berger Strategy Consultants, had recently been appointed to advise the Iraqi Governing Council. What he saw in Baghdad left him shocked. "As a result of my findings here, combined with earlier information," he wrote, "I most strongly urge the U.N. to consider appointing an independent commission to review and investigate the 'Oil for Food Programme.' Failure to do so might bring into question the U.N.'s credibility and the public's perception of it. . . . My belief is that serious transgressions have taken place and may still be taking place."
Just how serious these transgressions were became clear late last month, when the Iraqi daily Al Mada published a partial list of names, compiled by Iraq's oil ministry, of those whom Saddam Hussein rewarded with allocations of Iraqi oil. Mr. Hankes-Drielsma, who says he was among the first to see the list in early December, says it is based on numerous contracts and other detailed documents and was compiled at the request of the Iraqi Governing Council.
The list, a copy of which has been seen by the Journal's editorial page, is in spreadsheet format and details (in Arabic) individuals, companies and organizations, grouped by country, who oil ministry and Governing Council officials believe received vouchers from the Iraqi regime for the purchase of oil under the oil-for-food program. Mr. Hankes-Drielsma said the recipients would have been given allocations at below-market prices and then been able to pocket the difference when a middleman sold the oil on to a refinery; 13 time periods are designated and with indications of how much crude, in millions of barrels, each recipient allegedly received.
The list reads like an official registry of Friends of Saddam across some 50 countries. It's clear where his best, best friends were. There are 11 entries under France (totaling 150.8 million barrels of crude), 14 names under Syria (totaling 116.9 million barrels) and four pages detailing Russian recipients, with voucher allocations of over one billion barrels. Many of the names, transliterated phonetically from Arabic, are not well-known or are difficult to identify from the information given. Others stand out. There's George Galloway, the Saddam-supporting British MP recently expelled from the Labour Party, who has always denied receiving any form of payment from Saddam. Other notables include Indonesian President Megawati Sukarnoputri (also listed separately as the "daughter of President Sukarno"), the PLO, the Popular Front for the Liberation of Palestine, the Russian Orthodox Church, the "director of the Russian President's office" and former French Interior Minister Charles Pasqua. Some--including Mr. Pasqua, the Russian Church and Ms. Megawati--have denied receiving anything from Saddam. Patrick Maugein, a close friend of Jacques Chirac and head of Soco International oil company, says his dealings were all within "the framework of the oil-for-food program and there was nothing illegal about it."
The list's breadth, and the difficulty in reading and interpreting it, has slowed its exposure. There's also the question of authentication. Mr. Hankes-Drielsma (who is not an Arabic speaker) is convinced it is authentic and will be followed by more detailed evidence as the Iraqi oil ministry and Governing Council conduct further investigations. "I've seen the documents that have satisfied me beyond any doubt that we're dealing with a genuine situation," he told me.
One of the most eye-catching names on the list is easy to miss as it's the sole entry under a country one would not normally associate with Iraq--Panama. The entry says: "Mr. Sevan." That's the same name as that of the U.N. Assistant Secretary-General Benon V. Sevan, a Cyprus-born, New York-educated career U.N. officer who was tapped by Kofi Annan in October 1997 to run the oil-for-food program.
When I tried Mr. Sevan for comment, a U.N. spokesman wouldn't put me through to him directly but offered to pass on e-mailed questions. In an e-mail reply to questions about Mr. Sevan's apparent inclusion on the list and interest in the Panama-based business that allegedly received the discounted oil, the spokesman quoted Kofi Annan's statement Friday: "As far as I know, nobody in the Secretariat has committed any wrongdoing. If there is evidence, we would investigate it very seriously, and I want those who are making the charges to give the material they have to me so that we can follow up to determine if there has been any wrongdoing and I would take necessary action. So far statements are being made but we need to get facts." The pro forma U.N. response certainly seems inadequate. Mr. Sevan should take the opportunity to defend himself against the inference that the presence of his name on this list could help explain how Saddam was able to get by with so much influence-buying around the world with little apparent objection from the U.N.
In the seven years that Oil-for-Food was operational, (it was shut down in November and its obligations are being wound up) Saddam was able to skim off funds for his personal use, while at the same time doing favors for those who supported the lifting of sanctions, supplied him with his vast arsenal of weapons, and opposed military action in Iraq. Indeed, it was clear from the outset that Saddam would be able to use the program to benefit his friends. The 1995 U.N. resolution setting out the program--Resolution 986--bends over backwards to reassure Iraq that Oil-for-Food would not "infringe the sovereignty or territorial integrity" of Iraq. And to that end it gave Saddam power to decide on trading partners. "A contract for the purchase of petroleum and petroleum products will only be considered for approval if it has been endorsed by the Government of Iraq," states the program's procedures. Predictably, Saddam exploited the program for influence-buying and kickbacks, and filled his coffers by smuggling oil through Syria and elsewhere. With Oil-for-Food and smuggling, he was able to sustain his domestic power base and maintain a lavish lifestyle for his inner circle.
The system was ripe for abuse, in part because a divided Security Council gave Saddam far too much flexibility within the program. Oil-for-Food not only gave Iraq the power to decide with whom to deal, but also freedom to determine the official price of Iraqi oil, revenues from which went legally into the U.N.'s Oil-for-Food account. U.N. rules did not allow it to order Iraq to deal directly with end-users and bypass all those lucky middlemen who got deals from Saddam. Nor was the U.N. allowed to view contracts other than those between the oil ministry and the first purchaser, so it had no way of verifying that surcharges were being imposed by the middlemen on end-users. That enabled him to add surcharges to finance his own schemes while still making the final price competitive.
U.N. rules were ostensibly devised to prevent pricing abuses, but in one of the many indications of administrative failure, those safeguards appear not to have been enforced. In response, the U.S. and Britain tried often from 2001 to impose stricter financial standards, but Russia blocked changes. Then the U.S. and Britain instituted a system of retroactive pricing--delaying approval of the Iraqi selling price so that they could take account of the market price when giving their approval. This too met with grumbling from Friends of Saddam and while it reduced oil exports, it didn't end the corruption.
Throughout most of the program's life, Mr. Sevan's office seemed to see no evil. When overwhelming evidence finally surfaced that Oil-for-Food had become a gravy-train for the Iraqi regime, U.N. officials acknowledged some of the abuses but refused any of the blame. Criticism is routinely portrayed as politically motivated. "The [program] has existed in a highly politicized environment from day one," explains the U.N. Web site. "The scale of these operations has also made it a rather large target." Its last line of defense was to punt to the Security Council, whose sanctions committee (authorized by the 1990 sanctions resolution and composed of Council members) was meant to oversee the program, receive reports and review audits.
The record of systemic abuse of the program lends credence to claims that the oil-ministry list is genuine and should be investigated. The Iraqi Governing Council says it's considering legal action against anyone found to have profited illegally from Oil-for-Food. The U.S. Treasury's Bureau of Immigration and Customs Enforcement is investigating possible violations of U.S. law. But the U.N. has resisted calls for an independent investigation into abuses. Says Mr. Hankes-Drielsma: "I would urge the U.N. to take the high moral ground and instigate a truly independent investigation."
To this end, he wrote a second letter to the U.N. secretariat on Feb. 1, this time addressed to Hans Correll, Under Secretary for Legal Affairs and Legal Counsel of the U.N., with a copy to British Foreign Secretary Jack Straw. He catalogs questions on areas "which need urgent investigation," e.g. "Why did the U.N. approve oil contracts to non-end users?" His letter alleges that "not less than 10% was added to the value of all invoices to provide cash to Saddam . . . why was this not identified and prevented?" The letter also asks "What controls were in place to monitor BNP [the French bank] who handled the bulk of the LCs, the total value of which may have [been] in the region of $47 billion?"
In a June 2000 statement on Oil-for-Food, Mr. Sevan said, "As [Mr. Annan] put it recently, we, as international civil servants, take our marching orders from the Security Council." It might have been more accurate to acknowledge the U.N. took its marching orders from Saddam.

Ms. Raphael is editorial page editor of The Wall Street Journal Europe.
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Bush: Hussein Eluded Containment Efforts
By Walter Pincus
Washington Post Staff Writer
Monday, February 9, 2004; Page A08
In defending his decision to go to war in Iraq, President Bush suggested yesterday a belief that U.N. inspections and sanctions were of limited utility in preventing Saddam Hussein from acquiring weapons of mass destruction.
"Containment doesn't work with a man who is a madman," Bush said during his interview on NBC's "Meet the Press," even as he acknowledged banned weapons have yet to be found.
Bush's assessment of the U.N. efforts, however, does not appear to be shared by his own former chief weapons inspector, David Kay. In testimony Jan. 28 before the Senate Armed Services Committee, Kay lauded the effectiveness of past U.N. efforts. "In holding the [Iraq arms] program down and keeping it from break out [building numbers of weapons], I think the [U.N.] record is better than we would have anticipated," Kay said.
Kay also said Iraqi scientists had told him recently that they were surprised the U.N. inspectors were so tough and reported some programs were ended in the mid-1990s because of the inspections, but without specific evidence the U.N. inspectors did not believe the Iraqis because they had lied before.
NBC's Tim Russert asked Bush about statements he had made during fall 2002 when the administration was building support for a congressional authorization for war. These included Bush saying, "The Iraqi regime is a threat of unique urgency," and "Saddam Hussein is a threat that we must deal with as quickly as possible." Bush did not acknowledge having made those statements and said, "In my language, I called it a 'grave and gathering threat,' " a phrase he used in a speech before the United Nations on Sept. 12, 2002.
White House aides have insisted, since no weapons have been found, that Bush never used the word "imminent" in describing the Iraq threat. Yesterday, Bush said, "I don't want to get into a word contest."
In describing the threat posed by Hussein, Bush said twice that the former Iraqi leader was a threat to the United States because he "was paying for suicide bombers" that went into Israel, implying that the Iraqi money generated the attacks. After suicide bombings, Hussein in recent years said that, as Saudi Arabia and several Gulf states had been doing for years, he would give $25,000 to support each of the perpetrators' families. But many experts agree those funds, no matter where their origin, were not the motivation for the attackers.
Bush also said Hussein was a threat because "he was funding terrorist groups." Iraq had granted asylum to terrorists such as Abu Nidal and supplied money and training to Palestinian groups that fought Israel. Authorities say there is no evidence that Hussein gave direct financial support to Osama bin Laden's al Qaeda network either before or after the attacks on the World Trade Center and Pentagon, although some al Qaeda operatives and associates passed through Baghdad.
? 2004 The Washington Post Company

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U.S. Criticized for Dimissing Iraqi Companies in Reconstruction
By Jackie Spinner
Washington Post Staff Writer
Monday, February 9, 2004; 11:00 AM
The Iraqi Governing Council's top diplomat in Washington today criticized the U.S. occupation authority for passing over Iraqi companies in favor of giving reconstruction contracts to foreign firms.
Rend Rahim Francke, the council's ambassador-designate to the United States, said she was "appalled" that U.S. companies initially imported laborers from Asia during the first critical months of reconstruction.
"Ultimately, American companies can come and build bridges and power plants. But these companies will be gone," she said during speech at a conference today in Washington on reconstruction in Iraq. "We need to build capacity in Iraq" for Iraqi firms, she said.
Francke said in an interview afterward that the Coalition Provisional Authority, the occupation administration headed by L. Paul Bremer, is "opaque to Iraqis. It's still not transparent."
Joe Benkert, the authority's chief of operations in Washington, said U.S. officials were committed to involving Iraqis in the rebuilding of their country. "It's very clear to us this is a job for the Iraqi people and the Iraqi people are up to the task," he told about 150 people attending the conference, which is sponsored by Equity International, a private firm.
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Republican Rot
Is Congress's GOP majority becoming as corrupt as the Democrats were?
Monday, February 9, 2004 12:01 a.m. EST
One way you can tell that Republicans have become the dominant political party in Washington is to watch them cash in.
Rep. Billy Tauzin of Louisiana has announced that next Monday he will step down as chairman of the powerful House Energy and Commerce Committee. Observers expect he will soon leave Congress to become the chief lobbyist for the pharmaceutical industry at an annual salary that's rumored to approach $2.5 million, a record for a trade association head. Mr. Tauzin isn't doing anything illegal, but what's good for him isn't good for the country or for the Republican Party. Their voters are already showing signs of concern that congressional Republicans are taking on the bad habits of the Democrats they ousted from power in 1994.
House Democrats finished their annual three-day retreat at the Homstead Resort in Virginia on Saturday. Among the topics they discussed was how to exploit the perception that Mr. Tauzin was being paid off for steering the Medicare prescription drug bill through Congress only two months ago, legislation Democrats say will be a big boon to drug companies. "If you want to know the price of selling seniors down the river," Minority Leader Nancy Pelosi told reporters, "it's approximately $2 million a year, if you want to hire the manager of the bill on the floor of the House." It doesn't help that Mr. Tauzin already has a wheeler-dealer image or that some House Democrats are still bitter with him for abandoning their caucus after more than 15 years to become a Republican in 1995.
Mr. Tauzin's office insists he is stepping down mainly for health reasons; he is 60 years old and was recently hospitalized for a bleeding ulcer. But his sudden interest in the top job at the Pharmaceutical Research and Manufacturers of America, known as Pharma, looks unseemly when the ink is barely dry on the massive prescription drug law. Only last month, he turned down an offer of more than $1 million a year from the Motion Picture Association of America, the film industry's lobbying arm. That would have been a much less controversial soft landing.
Some Republicans fear that Mr. Tauzin has sped up Washington's infamous "revolving door" between Congress and the K Street lobbying shops to a point that could hurt the public perception of Congress. Rep. Deborah Pryce of Ohio, head of the House Republican Conference, admitted to reporters last month that she is worried the Tauzin job offer will make it easier for Democrats to bash the GOP as a tool of pharmaceutical companies. While Mr. Tauzin would be barred from lobbying members of Congress for a year after he leaves office, nothing prevents him from sitting down with executive branch officials with suggestions on how they might draft the drug bill's regulations.
Rep. Mike Pence of Indiana, who was one of only 25 GOP House members to vote against the Medicare bill, says Democratic colleagues have told him that the two major reasons they lost control of the House to the GOP in 1994 were the reckless liberalism of the Clinton administration during its first two years and "the Jim Wright and House Bank scandals that convinced people that Democrats were looking out for themselves first. For our own good, I hope we don't fall into that trap."
He and other members say Mr. Tauzin's jackpot couldn't have come at a worse time. Last week, the House Ethics Committee revealed that for the past two months it has been investigating an allegation by Rep. Nick Smith, a Michigan Republican, that party leaders offered him a bribe in exchange for his vote on the Medicare bill. Mr. Smith voted against the bill and later said unnamed members of his party had said they'd contribute $100,000 to his son's congressional campaign if he had voted in favor. If not, Mr. Smith said, they told him they'd see that the younger Mr. Smith lost his race. Mr. Smith later recanted, saying his claim of bribery was "technically inaccurate" and has since refused to discuss the matter further.
But other GOP members stood by their stories of strong-arm tactics. South Carolina's Rep. Jim DeMint said contributors threatened to withhold donations for his upcoming Senate race unless he voted for the Medicare bill, while Rep. Todd Akin of Missouri said a state legislator threatened to run against him. Rep. Tom Feeney of Florida was told his path towards a party leadership position would be blocked if he voted against the bill.
Republicans should view such tactics and the bidding war for Mr. Tauzin on K Street as warning signs of ideological dry rot. No matter how well gerrymandered their districts, the GOP majority could be in jeopardy if it develops the same reputation for ruthlessness and selfishness that burdened the Democrats in the early 1990s.
If Republicans consolidate their control over Washington while failing to reduce the size of government, they will inevitably be caught up in the care and feeding of the state. Industries that want favors or protection from government will seek out and hire powerful people to move the levers of power. F.A. Hayek warned decades ago against the dangers of a creeping corporate welfare state: "As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of the directing power."
K Street is beginning to fill up with Republican lobbyists as companies realize the near-monopoly that Democrats had on lobbying jobs no longer makes sense. Lobbying is becoming a family affair. At least 17 current senators and 11 House members have had close relatives working in lobbying or government relations.
Some Republican lobbyists pride themselves on advocating free markets and deregulation, but too often they also take on questionable projects. Before he became chairman of the Republican National Committee last year, Ed Gillespie ran a lobbying practice with former Clinton White House counsel Jack Quinn. They successfully pushed for tariff protections for American steel makers, an economic and foreign-policy disaster President Bush had to pull the plug on last year. Former Rep. Vin Weber has successfully held up the deregulation agenda of FCC Chairman Michael Powell. GOP lobbyists respond that they are only following in the footsteps of Democrats such as Reps. John Dingell and Tony Coelho who in the 1980s perfected the cozy connections between Capitol Hill and K Street.
Naturally, liberal newspapers and ethics watchdog groups propose to deal with the Tauzin problem with new restrictions on lobbying. One sensible idea is to extend to departing members of Congress the yearlong ban on lobbying executive branch officials that already applies to congressional staffers. Other proposed rules are probably unworkable. The Los Angeles Times suggests that lawmakers be banned from direct lobbying for three years and also not be allowed to negotiate a new job while they're still in office. Bob Livingston, the former Appropriations Committee chairman who now operates one of Washington's most popular lobbying shops, says such rules are impractical and would prevent qualified people from seeking seats in Congress "because they won't be able to provide financial security for their families after leaving office."
The problem is that voters have never felt that Congress should be a stepping stone for lucrative postretirement careers. Every few years someone conspicuously crosses an unseen line and rubs the face of the American people in the seamy side of Washington influence peddling. In the 1980s, an infamous Time cover photo of former Reagan White House aide Mike Deaver making lobbying calls from his car led to public outrage and Mr. Deaver's indictment on charges that he lied to a grand jury, He was fined $100,000 and required to complete 1,500 hours of community service. In 2001, President Clinton's midnight pardons of disgraced financier Marc Rich and others confirmed the worst suspicions of many about his character.
Mr. Tauzin's transgression isn't in that league, but blogger Mickey Kaus nonetheless writes that it "provides a Washington scandal that virtually everyone in the press can feel righteous about playing up. Meanwhile, what pol is going to risk his or her neck to defend a once-powerful Congressman who has given up his power."
There is a strong chance that the Tauzin scandal--coupled with the Nick Smith bribery controversy--will only build in coming days. The fear of that may be why Pharma is taking a wait and see attitude towards formally signing up Mr. Tauzin. Rumors have it that internal memos from the pharmaceutical industry that refer to Mr. Tauzin as someone who will always do the industry's bidding may be leaked to the media by his jealous colleagues.
But this political firestorm may die out if Pharma executives realize that Mr. Tauzin is already damaged and thus would be less effective as a lobbyist. Mr. Tauzin ought to be in pictures; the MPAA's offer was quite generous. If he insists on pursuing the drug industry's even more lucrative deal he will only create headaches and embarrassment for all concerned.
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North Korea balks, then agrees to talk. Why now?
By Tom Tobback
BEIJING - "Time is not on the American side," said North Korea's vice foreign minister, Kim Gye-gwan, to Jack Pritchard, the former United States negotiator with North Korea, when he visited the Yongbyon nuclear facilities in North Korea last month. And, Kim added: "As time passes, our nuclear deterrent continues to grow in quantity and quality."
Indeed, time is not on the US side in this nuclear standoff. However, the Democratic Peoples Republic of Korea's (DPRK's) recent and rather surprising announcement that it has agreed to resume the six-party talks in Beijing on February 25 indicates that time is not entirely on North Korea's side either.
North Korea's leader Kim Jong-il agreed in principle to participate in a second round of six-party talks when China's Number 2 leader, chairman of the standing committee of the National People's Congress Wu Bangguo, visited him in Pyongyang last October. The DPRK had described the first round of talks that took place in Beijing last August as a waste of time.
So to ensure progress in the second round of talks, which involve North and South Korea, China, Japan, Russia and the US, Pyongyang demanded - and has been demanding - agreement on a joint statement before the talks. This proviso was supported by China after US President George W Bush stated he was willing to discuss a written multilateral security guarantee. However, in December Pyongyang announced additional conditions for its proposed first step, a re-freeze of the Yongbyon nuclear facilities that had been under inspection from 1994 to 2002 by the International Atomic Energy Agency (IAEA).
The US accused North Korea of setting preconditions for the talks, and the six-party process seemed to have hit a deadlock. Then suddenly last week the official (North) Korea Central News Agency announced, "The DPRK and the US, the major parties concerned to the six-way talks, and China, the host country, agreed to resume the next round of the six-way talks from February 25 after having a series of discussion."
Officials in Seoul said that the DPRK had not bothered to notify the US or South Korea before announcing this decision.
Pyongyang drops precondition, scope limited
Pyongyang has obviously dropped its demand for a pre-talks joint statement. At the talks, North Korea will expectedly elaborate on its known proposal for "simultaneous actions" and the other parties will then respond. Thus the scope is minimal, and that is probably why the duration of the talks has not yet been announced. Russian Deputy Foreign Minister Alexander Losyukov warned not to expect any breakthrough, given the disagreement over the proposed joint pre-talks statement.
North Korea has done its best to convince the US of its nuclear deterrent by showing the recent private US delegation reprocessed plutonium at Yongbyon, and DPRK officials reportedly were disappointed when US nuclear scientist Siegfried Hecker told them he had seen nothing that convinced him Pyongyang possesses a nuclear deterrent.
On the other hand, Pyongyang assured the delegation it does not have the uranium enrichment program US intelligence claims to know about. Possibly North Korea wants to capitalize on doubts about the Bush administration's use of intelligence. Last week KCNA stated: "Now the Bush administration finds itself in a tight corner as it provoked a war against Iraq after deceiving Americans and the world."
Other recent events might have also have convinced Pyongyang that a continuing crisis does not serve its interests. The US-led international consortium KEDO (Korea Energy Development Organization) responsible for building the two light-water reactors in exchange for the freeze of Yongbyon in 1994, halted work on the project on December 1.
After Libya vowed to dismantle its secret nuclear program on December 22, evidence is emerging of a nuclear black market run by the Pakistani nuclear scientist Abdul Qadeer Khan, who admitted last week to having passed nuclear secrets to various countries - including the DPRK.
Japan threatens economic sanctions
Other incentives to North Korea are the desperate state of the country's population and its economy. The Japanese parliament's decision last week to allow the government to impose economic sanctions and halt trade between the two neighboring countries could hurt the DPRK's economy severely.
According to the deputy director of the DPRK Finance Ministry, Yang Chang-yoon, Pyongyang does need outside assistance and loans to resuscitate its economy, despite the issuance of state bonds last year. One of North Korea's first demands is to be removed from the US list of terrorism-sponsoring nations and to be allowed to join international financial institutions such as the World Bank and the International Monetary Fund (IMF).
Today the UN World Food Program (WFP) in Beijing warned that its cereal stocks in North Korea are all but depleted, with little donations in the pipeline. "We are scraping the bottom of the barrel," Masood Hyder, the WFP's representative in Pyongyang, told a news conference here. "Over four million core beneficiaries - the most vulnerable children, women and elderly people - are now deprived of very vital rations. It's the middle of the harsh Korean winter and they need more food, not less."
Some observers argue that Pyongyang's decision to resume the six-party talks is the result of external political and economic pressure. On the other hand, having the talks take place during the current uproar over the uses of US intelligence about Iraq's weapons of mass destruction might enable Pyongyang to keep its alleged uranium-based nuclear program off the table - at least in this round. However, if Pyongyang is not prepared to make further major concessions at the talks, the six-party process is likely to derail.
After his latest visit to the DPRK's Yongbyon nuclear facilities, US negotiator Jack Pritchard brought up a scenario in which this could exactly be Pyongyang's intention, or at least a realistic option. Pritchard is concerned that the talks will fail and that Pyongyang will withdraw from the diplomatic process. If it then declares it has produced all the nuclear weapons it needs and does not intend to make more, China, South Korea, and Russia might accept this as a status quo, arguing the threat is minimal. This would dissolve the six-party process, and would leave the region a lot less secure.
Tom Tobback is the creator and editor of Pyongyang Square, a website dedicated to providing independent information on North Korea. He is based in Beijing.
(Copyright 2004 Asia Times Online Co, Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)
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Nordkorea: UNO ruft humanit?ren Notstand aus
Weltern?hrungs?programm hat keine Vorr?te mehr: "Wir kratzen Reste aus den Tonnen zusammen" - ?sterreich will helfen
Johnny Erling aus Peking
Link
Das Weltern?hrungsprogramm im Netz
Nordkoreas Regierung steht zwei Wochen vor dem Beginn der Pekinger Sechs-L?nder- Verhandlungen zur Beilegung ihres Atomstreits mit den USA vor einer neuen humanit?ren Katastrophe an der heimischen Front. Das UN-Weltern?hrungsprogramm WFP (World Food Programme) rief am Montag auf einer Pressekonferenz in Peking den Notstand f?r die Versorgung des Landes aus. Die Organisation hat ihre Vorr?te an Nahrungsmitteln aufgebraucht.
Sie hatte bereits im Vorjahr vor so einer Krise gewarnt, nachdem die internationale Spendenbereitschaft auf den tiefsten Stand seit Beginn der Hungerwinter 1995 gesunken war. Das WFP muss f?r mindestens zwei Monate mehr als sechs Millionen hungernde Nordkoreaner, vor allem Alte, Frauen und Kinder, in ihrer Notlage alleine lassen.
"Totale Einstellung"
"Das ist keine Einschr?nkung der Versorgungshilfe mehr. Wir reden von der totalen Einstellung", sagte der UNO-Gesandte f?r Nordkorea, Masood Hyder. "Wir kratzen buchst?blich Reste aus den Tonnen zusammen." Hyder appellierte an alle Nationen, "so schnell wie m?glich weitere Hilfe zu leisten".
Seit Anfang Februar sind die Rationen auf 250 Gramm Nahrungsmittel pro Tag und Person zusammengeschmolzen. Sie k?nnen nur noch an 83.000 Menschen, die sich in allergr??ter Not befinden, ausgegeben werden, darunter an 75.000 schwangere Frauen und 8000 Babys und Kleinkinder in Waisenheimen.
Nordkoreaner erhalten ?ber das staatliche Verteilungssystem nur noch 300 Gramm Reis und Mais pro Person und Tag. Rund 40 Prozent ihrer Kinder sind laut Untersuchungen des WFP bereits chronisch unterern?hrt.
Emp?rung ?ber das Regime von Kim Jong-il, das sich durch den angedrohten Einsatz von Atomwaffen mit atomarer Erpressung am Leben erh?lt, die in vielen Gebieten nicht m?gliche ?berwachung der Verteilung von Lebensmitteln und die seit 1995 ununterbrochen notwendige humanit?re Hilfe f?r Nordkorea sind einige der Gr?nde f?r den internationalen Spendenr?ckgang.
Das WFP h?lt dennoch unbeirrt an seiner Aufgabe fest: "Wir k?nnen Kinder, Kranke und Alte nicht Opfer einer Lage werden lassen, die sie nicht verschuldet haben."
Ferrero-Waldner k?ndigt Hilfe an
?sterreich hat inzwischen Hilfe f?r die Hunger leidende Bev?lkerung in Nordkorea angek?ndigt. "Wir k?nnen dem Hunger in Nordkorea nicht tatenlos zusehen", erkl?rte Au?enministerin Benita Ferrero-Waldner (V) in einer Presseerkl?rung vom Montag. ?sterreich werde 1.000 Tonnen Nahrungsmittelhilfe f?r Nordkorea in Form von Baby- und Kindernahrung ?ber das Weltern?hrungsprogramm (WFP) abwickeln. (red/APA/DER STANDARD, Printausgabe, 10.2.2004)

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North Korean Group Calls for Japan to Be Excluded From Talks
Feb. 10 (Bloomberg) -- A North Korean state agency called for Japan to be excluded from six-nation talks scheduled for the end of the month after Japan moved to impose economic sanctions on the communist nation.
The North Korea-Japan Friendship Association asked the government ``not to have any bilateral contact with Japan nor allow Japan to participate in the six-way talks'' after Japan's lower house passed a bill that would allow it to impose economic sanctions on other countries, the official Korea Central News Agency reported.
North Korea ``has explicitly stated more than once that it would consider any sanctions or blockade against it as a declaration of a war and take legitimate self-defense measures,'' the report cited the association as saying.
North Korea agreed to take part in the talks in Beijing, which will also include South Korea, the U.S., China and Russia, to try to resolve a 16-month impasse over its nuclear program.
Japan's Chief Cabinet Secretary Yasuo Fukuda said last month Japan would take ``appropriate'' steps in dealing with North Korea, including using the sanctions law.
To contact the reporter on this story:
Heejin Koo in Seoul at hjkoo@bloomberg.net.
To contact the editor of this story:
Paul Tighe in Sydney at ptighe@bloomberg.net.
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M. Perben pr?pare le terrain judiciaire de M. Jupp?
LE MONDE | 09.02.04 | 13h11 * MIS A JOUR LE 09.02.04 | 14h00
Le ministre de la justice, Dominique Perben, "d?ment formellement", dans un communiqu? publi? lundi en milieu de journ?e, les affirmations selon lesquelles une ?tude serait en cours ? la chancellerie sur le remboursement des sommes dues ? la Ville de Paris.
Dominique Perben a indiqu? au Monde, dimanche 8 f?vrier, en marge du congr?s de l'UMP, que la chancellerie analyse le jugement prononc? par le tribunal de Nanterre contre d'Alain Jupp? pour v?rifier si le remboursement des sommes dues ? la ville de Paris peut modifier la situation judiciaire du pr?sident de l'UMP. "Une ?tude est en cours", a affirm? le garde des sceaux, "pour voir quelles seraient les cons?quences judiciaires de ce remboursement". M. Perben a pr?cis? que l'arr?t de la cour d'appel de Versailles n'interviendra sans doute pas avant le d?but de l'ann?e prochaine.
La pol?mique sur les suites de cette affaire continue. M. Perben s'en est pris ? Roger-G?rard Schwartzenberg, d?put? (app. PS) du Val-de-Marne, l'accusant de "m?langer" justice et politique. Samedi 7 f?vrier, M. Schwartzenberg s'?tait adress? au ministre de la justice, lui demandant s'il comptait "ou non engager des poursuites devant les juridictions ordinaires contre les ministres qui ont enfreint l'article 434-25 du code p?nal" apr?s les propos tenus par certains d'entre eux au lendemain de la d?cision des juges de Nanterre. "Avant de faire des d?clarations, M. Schwartzenberg aurait d? relire la loi, car il aurait d?couvert tr?s clairement qu'aucune d?claration de ministre n'a jet? le discr?dit sur la justice", a r?pliqu? M. Perben.
Par ailleurs, le garde des sceaux a d?plor? "l'emballement incroyable" qu'a suscit? la mise en place de la mission d'enqu?te administrative, ? la demande du pr?sident de la R?publique. "Je trouve d?solante la contestation de la m?thode qui est la seule m?thode s?rieuse si on veut aller jusqu'au bout" de l'enqu?te, a indiqu? M. Perben.
AUTOMATICIT? DES PEINES
Justifiant la mise ? l'?cart du Conseil sup?rieur de la magistrature (CSM) dans le d?clenchement de cette proc?dure exceptionnelle, M. Perben a rappell? que "le CSM ne pouvait pas" ?tre saisi de cette enqu?te car "il n'est pas comp?tent pour contr?ler les services techniques comme les t?l?communications ou l'interception des ?coutes".
Jacques Barrot, pr?sident du groupe UMP de l'Assembl?e nationale, a comment? le jugement de Nanterre, dimanche, sur Europe 1 en estimant que "ses attendus sont tr?s durement r?dig?s", qualifiant ?galement de "contestable" l'automaticit? des peines.
Yves Bordenave

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M. Delors contre "le berlusconisme"
Interrog?, dimanche 8 f?vrier, par Radio J, sur la condamnation d'Alain Jupp?, Jacques Delors a critiqu? "le ch?ur des d?put?s UMP, -qui- ont des propos qui mettent en cause la justice et qui exercent une pression sur le tribunal d'appel". L'ancien pr?sident de la Commission europ?enne a souhait? que "la France ne fasse pas du berlusconisme sans le savoir", allusion au conflit ouvert entre le pr?sident du conseil italien et la justice.
La d?claration de M. Delors r?pond ?galement aux propos tenus, jeudi 5 f?vrier, par Silvio Berlusconi, en marge du congr?s organis? ? Bruxelles par le Parti populaire europ?en (PPE). Apr?s avoir adress? un "message de solidarit?" ? M. Jupp?, le pr?sident du conseil italien avait d?nonc? "une forme de communisme -consistant ?- ?liminer l'adversaire en faisant un usage politique de la justice".
* ARTICLE PARU DANS L'EDITION DU 10.02.04
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Perben, avocat de luxe pour Alain Jupp??
Le garde des Sceaux a d?menti les informations parues dans ?Le Monde? selon lesquelles ses services ?tudieraient les b?n?fices d'un changement de d?fense d'Alain Jupp? en vue de son proc?s en appel * Un incident ?scandaleux? pour les syndicats de magistrats *
Par Lib?ration.fr
lundi 09 f?vrier 2004 (Liberation.fr - 17:19)
Parole de ministre contre parole de journaliste. Selon ?Le Monde? dat? de mardi, le garde des Sceaux, Dominique Perben, aurait confi? ce week-end, en marge du congr?s de l'UMP, que la Chancellerie examinait quelles pourraient ?tre les cons?quences d'un remboursement des sommes dues ? la ville de Paris sur la situation judiciaire d'Alain Jupp?. ?Une ?tude est en cours pour voir quelles seraient les cons?quences judiciaires de ce remboursement?, aurait l?ch? le ministre de la Justice. Apr?s la publication lundi matin de cette information, Dominique Perben a d?menti cat?goriquement ces ?affirmations?.
Contact? par Reuters, le journaliste du ?Monde?, Yves Bordenave, a maintenu que le garde des Sceaux avait bien fait ces d?clarations en salle de presse du congr?s de l'UMP, lors d'un apart? avec plusieurs journalistes. ?Le Monde? a d'ailleurs indiqu? qu'il maintiendrait sa version des faits dans son ?dition dat?e de mercredi.
L'affaire des emplois fictifs ? la Mairie de Paris, qui a valu au patron de l'UMP une condamnation ? 18 mois de prison avec sursis et 10 ans d'in?ligibilit?, aurait caus?, selon l'actuel maire socialiste, Bertrand Delano?, un pr?judice de 1,2 million d'euros ? la ville. D?s l'annonce de la condamnation de Jupp?, Delano? avait souhait? que ?les sommes d?tourn?es du patrimoine municipal soient restitu?es ? la ville de Paris?.
Poursuivi ? la fois comme ancien secr?taire g?n?ral du RPR et adjoint aux Finances ? la mairie de Paris, Jupp?, qui a d?cid? de faire appel et de conserver ses fonctions et mandats, s'est vu reprocher d'avoir couvert la r?mun?ration par la Ville de sept personnes qui travaillaient en r?alit? pour son parti. S'il remboursait entre les deux proc?s, la cour d'appel de Versailles semblerait n?anmoins toujours tenue de le condamner, puisque le paiement serait une forme d'aveu.
R?agissant aux informations du ?Monde?, les Verts ont d?nonc? une ?grave confusion entre l'Etat? et un parti politique. Dans un communiqu?, Alain Riou, pr?sident du groupe ?cologiste au conseil de Paris, assure qu'en d?cidant la mise en place d'une ?tude sur un possible remboursement des sommes dues ? la municipalit?, Perben ?se livre ? une grave confusion, en mettant les services de l'Etat ? la disposition d'un justiciable, voire d'un parti politique?. ?Il ne s'agit pas d'emplois fictifs, mais d'emplois d?tourn?s?, ajoute-t-il.
Pour les magistrats, d?j? remont?s par ?l'affaire dans l'affaire?, qui a vu une mise ? l'?cart du Conseil sup?rieur de la magistrature (CSM) dans le d?clenchement de la mission d'enqu?te administrative charg?e de faire le point sur les pressions pr?sum?es dont les juges ont ?t? victimes, il s'agit d'un nouveau coup bas. L'Union syndicale des magistrats (USM, majoritaire et mod?r?e) a d?clar? lundi qu'il n'appartenait pas ? la Chancellerie ?de r?fl?chir ? la d?fense d'un pr?venu quel qu'il soit. Ce r?le appartient ? l'avocat de la d?fense?. Le Syndicat de la magistrature (SM, gauche et minoritaire) rench?rit: ?Si, effectivement, le garde des Sceaux a demand? ? ses services de diligenter une ?tude, c'est scandaleux?. Un ?nouvel incident? qui illustre, selon le syndicat, ?de mani?re plus g?n?rale la volont? du Garde des sceaux de s'ing?rer dans les affaires judiciaires et d'utiliser la justice ? des fins politiques?.
Les syndicats de magistrats craignent ?galement des man?uvres qui viseraient ? pr?parer un proc?s en appel plus favorable ? Alain Jupp? d'ici un an ? Versailles. Ils s'inqui?tent notamment de voir circuler le nom de Jean-Claude Marin, actuel directeur des affaires criminelles et proche collaborateur de Dominique Perben au minist?re, comme candidat au poste de procureur g?n?ral de la cour d'appel de Versailles en remplacement de Henri Desclaux, qui doit partir en retraite dans les prochains mois. Le poste est strat?gique puisque c'est le procureur g?n?ral qui sera charg? de fixer l'attitude de l'accusation lors des audiences ? venir.
? Lib?ration
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JUSTICE
Affaire Jupp? : pol?mique
autour de l'?tude de Perben
Selon le Monde, une ?tude est en cours ? la Chancellerie pour examiner les cons?quences judiciaires pour Alain Jupp? d'un remboursement des sommes dues ? la ville de Paris. Dominique Perben d?ment.
Dominique Perben (AP)
Alors que le quotidien Le Monde indique dans ses colonnes que le ministre de la Justice a lanc? une ?tude sur les cons?quences judiciaires de la condamnation d'Alain Jupp?, Dominique Perben d?ment formellment cette affrimation. Dominique Perben a d?clar? qu'une ?tude ?tait en cours ? la Chancellerie pour examiner les cons?quences judiciaires pour Alain Jupp? d'un remboursement des sommes dues ? la ville de Paris dans l'affaire des emplois fictifs du RPR, avance Le Monde dans son ?dition dat?e de mardi. Dominique Perben, "d?ment formellement" dans un communiqu? publi?e lundi les affirmations parues dans le journal.
Pour sa part, le Syndicat de la magistrature (SM, gauche et minoritaire) a jug? "scandaleux" l'?tude que m?nerait la Chancellerie. "Si, effectivement, le Garde des Sceaux a demand? ? ses services de diligenter une ?tude, c'est scandaleux", a d?clar? la pr?sidente du SM, A?da Chouk.
Ing?rence
Interrog? sur la r?alit? de ces propos, la Chancellerie n'avait pas r?agi en d?but d'apr?s-midi.
"La Chancellerie n'a pas ? ?tre le conseiller juridique de personnes qui ont ?t? condamn?es en premi?re instance par un tribunal", a soulign? A?da Chouk.
"Ce nouvel incident illustre de mani?re plus g?n?rale la volont? du Garde des sceaux de s'ing?rer dans les affaires judiciaires et d'utiliser la justice ? des fins politiques", a conclu la responsable syndicale.
Confusion
Dans un communiqu?, Alain Riou, pr?sident du groupe Vert au Conseil de Paris assure qu'avec ces propos sur les cons?quences du remboursement, "le Garde des Sceaux affirme une conviction : celle qu'Alain Jupp? est coupable et n'a aucune chance de ne pas ?tre condamn? en deuxi?me instance".
"Au moins, contrairement ? ses coll?gues, il n'attaque pas les juges", ajoute l'?lu parisien. "Mais il se livre ? une grave confusion, en mettant les services de l'Etat ? la disposition d'un justiciable, voire m?me d'un parti politique. Il ne s'agit pas d'emplois fictifs, mais d'emplois d?tourn?s", ajoute Alain Riou.
Le maire PS de Paris Bertrand Delano? avait ?voqu? plusieurs millions d'euros de pr?judice, mais il s'agit, pr?cise-t-on ? la mairie, de millions de francs, soit, pr?cis?ment, 1,2 million d'euros.

? Le Nouvel Observateur 1999/2000
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Perben et l'affaire Jupp?
Le ministre de la Justice "d?ment formellement" des d?clarations au "Monde"
"Une ?tude est en cours" pour "voir quelles seraient les cons?quences judiciaires" pour Alain Jupp? d'un remboursement des sommes dues ? la ville de Paris d?tourn?es pour r?mun?rer des permanents du RPR, aurait d?clar? au journal Dominique Perben.
"Le Monde" date de mardi affirme avoir interrog? le ministre ce week-end en marge du congr?s de l'UMP
?Le communiqu? du garde des Sceaux
"Dominique Perben, garde des Sceaux, ministre de la Justice d?ment formellement les affirmations selon lesquelles une ?tude serait en cours ? la Chancellerie concernant un remboursement des sommes dans le cadre de l'affaire ayant abouti ? la condamnation r?cente de Monsieur Alain Jupp?", a affirm? le ministre de la Justice dans un communiqu?.
Le pr?sident de l'UMP et d?put?-maire de Bordeaux, Alain Jupp?, a ?t? condamn? ? 18 mois de prison avec sursis et 10 ans d'in?ligibilit? dans le proc?s des emplois fictifs de la mairie de Paris au profit du RPR. Il a fait appel, ce qui lui permet de garder ses mandats jusqu'? un autre proc?s en appel.
Le maire de Paris Bertrand Delano? estime ? "plusieurs millions d'euros" le pr?judice subi par la ville dans l'affaire des emplois fictifs du RPR.
Les d?clarations de Dominique Perben "sont surprenantes", a d?clar? l'Union syndicale des magistrats, principal syndicat de magistrats. "Ce n'est pas le r?le de la direction des affaires criminelles et des gr?ces du minist?re de la Justice de r?fl?chir ? la d?fense d'un pr?venu quel qu'il soit. Ce r?le appartient ? l'avocat de la d?fense", ajoute l'USM.
"D'un point de vue juridique, il revient aux seuls magistrats d'appel d'appr?cier les efforts effectu?s par la personne condamn?e en premi?re instance pour indemniser la victime", rappelle le syndicat.
Au Syndicat de la magistrature (gauche), les propos du ministre ont ?galement suscit? l'?tonnement. "Il ne me semble pas normal que la chancellerie ?tudie la situation de justiciables. Le garde des Sceaux peut donner des instructions aux parquets mais pas des conseils aux justiciables. Cela souligne la dangerosit? d'un pouvoir d'action minist?riel sur la justice", a d?clar? ? A?da Chouk, pr?sidente du Syndicat de la magistrature.
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A Saudi Home
Al Qaeda in the kingdom.
By Evan Kohlmann
These days, there appears to be serious internal controversy in Saudi Arabia over the degree to which al Qaeda has managed to infiltrate the kingdom. In mid-January, an unnamed Saudi official admitted to the Associated Press that his country had discovered "a number" of al Qaeda terrorist training camps hidden in the desert of the Arabian Peninsula. This assertion was quickly downplayed by Saudi Interior Minister Prince Nayif, who countered that "there are no training or terror camps in the kingdom, not yesterday, not today... He who says the kingdom harbors terrorism should reconsider his words." Prince Nayif's denial is in inexplicable contrast to his own previous admission last July that at least a "small number" of al Qaeda militants active in the region had indeed been recently "trained on farms and the like" on Saudi soil. In fact, the interior minister has contradicted not only himself, but also compelling visual evidence distributed on the Internet confirming the presence of al Qaeda safehouses and training camps inside Saudi Arabia.
Until approximately November 2001, the vast majority of hardcore al Qaeda recruits were schooled in the arts of sabotage and terrorism at Osama bin Laden's main operational bases in southern and eastern Afghanistan -- including such notorious camps as Al-Sadda, Al-Farooq, Khalden, Jihad Wal, and Derunta. Video recordings of training at the Afghan camps depict an education in everything from basic physical fitness to the operation of advanced shoulder-fired surface-to-air missiles (such as the one that narrowly missed an Israeli civilian airliner in Kenya over a year ago). Ahmed Ressam, an al Qaeda-trained terrorist who sought to blow up Los Angeles International Airport on the eve of the Millennium, testified in federal court how he was taught advanced urban-warfare skills at these centers, varying from "how to blow up the infrastructure of a country... Electric plants, gas plants, airports, railroads, large corporations" to "how to mix poisons with other substances... designed to be used against intelligence officers and other VIPs."
Within only weeks of the 9/11 tragedy, U.S. military forces and their Northern Alliance partners were able to put the notorious Afghan jihad camps permanently out of operation. As the hardened mountain fortresses of bin Laden and his acolytes fell to coalition troops, the membership of al Qaeda fled across the Hindu Kush into Pakistan, seeking a safe haven among conservative local tribesmen and sympathetic Taliban-style fundamentalist groups located just across the border. Some of bin Laden's scattered cadres decided to remain in the relative safety of Pakistan -- yet others, particularly those from Saudi Arabia, Kuwait, and other regions of the Arabian Peninsula, were able to quietly return to their homelands.
Rather than assimilating back into Gulf society, these arriving extremists were quickly reorganized into new terrorist cells by a highly intricate and developed network of al Qaeda henchmen headquartered in the Arabian Peninsula. Before his death this past summer, Shaykh Yousef Al-Ayyiri (a.k.a. "the Cutting Edge") sat near the top of this network. Al-Ayyiri was a well-known and well-liked figure in al Qaeda who had reportedly first joined the anti-Soviet jihad in Afghanistan at the youthful age of 18. Impressed by his enthusiasm and skills as a combatant, al Qaeda gave Al-Ayyiri a position of high importance within the organization as the commander of a training camp in Afghanistan, and also as a personal bodyguard to Osama bin Laden. Knowledgeable sources say that Al-Ayyiri was handpicked in 1993 to travel to Somalia with al Qaeda's most senior military commander -- Abu Hafs Al-Masri -- in order to help instruct radical Islamic militias on how to shoot down U.S. helicopters with rocket-propelled grenades.
Al-Ayyiri returned to his home in Saudi Arabia, only to be allegedly imprisoned by Saudi authorities in connection with the 1995 bombing of a joint Saudi-U.S. military office in Riyadh. The bombing (which left five U.S. citizens dead) was later blamed on fanatic supporters of Osama bin Laden. Nevertheless, despite his close, personal connections to bin Laden, Al-Ayyiri was eventually freed by Saudi authorities. A harsh stint in prison apparently did nothing to temper Al-Ayyiri's gusto for violence and bloodshed. He remained in the Kingdom, raising money for the emerging Taliban movement in Afghanistan and offering strategic advice to various al Qaeda-linked military leaders around the world.
According to the reputed al Qaeda publication Sawt Al-Jihad (Voice of Jihad), Al-Ayyiri "was so joyous he nearly floated on air" when he learned of the "happy events" of September 11, 2001. As a firm proponent of the international jihad against America, he refocused his efforts primarily on two main causes: using the Internet as a vehicle to recruit and propagandize on behalf of al Qaeda, and setting up covert training camps for terror recruits inside Saudi Arabia, similar to the remote base that Ayyiri had once presided over in Afghanistan.
An authentic al Qaeda video released on the Internet in early December featured scenes of black-clad, hooded men carrying out indoor urban-warfare training exercises at a camp inside Saudi Arabia known as Al-Istirahat Al-Amana (the Guesthouse of Goodness). The footage was allegedly filmed during mid-2003, and at least one of the featured trainees was later killed during a confrontation with Saudi security forces. No matter how one chooses to characterize the Al-Istirahat facility, there can be no doubt as to the intentions of those who received terrorist "refresher" courses there. Following their recorded training exercises, the men gathered closely together, brandishing their automatic weapons and singing jihadist tunes. One of the men -- Abdallah Al-Utaibi -- goes on in the video to read a martyrdom will while sitting in the Al-Istirahat camp, begging God to "destroy" the United States.
The presence of these camps -- and Yousef Al-Ayyiri's key role in creating them -- was confirmed in an electronic communiqu? issued in late December by a group calling itself "al Qaeda's Military Committee in the Arabian Peninsula." The "Cutting Edge" manual was given its name "for the great efforts of Sheikh Yousef Al-Ayyiri... One of his last blessed deeds was to establish several training camps in [Saudi Arabia] which several of the hero mujahadeen have come from." The communiqu? contained articles from, among others, al Qaeda's reputed senior military commander Saif Al-Adel, lecturing to faithful supporters that "these are times of jihad and preparation for jihad." Finally, the manual suggests that those who are unable "travel to other lands" in order to "join the great camps" can instead covertly mimic their unique and demanding training regimen at home. The loyal soldiers of the late Al-Ayyiri continue to eagerly spread his message and teachings via the Internet, promising terrible revenge against the "crusaders" and the Saudi elite.
Undoubtedly, al Qaeda's assembly-line production of terrorist recruits has found a new headquarters in the heart of Arabia. Inside the Saudi capital, terrorist cells are regularly discovered plotting the assassinations of royal officials and the suicide bombings of foreign embassies and compounds. Others have targeted Western military and civilian aircraft in the Kingdom with mobile, surface-to-air missile launchers. Even the holiest city in Islam -- Mecca -- has come into the crosshairs of these merciless fanatics. Thus, it is highly discomforting that senior Saudi officials continue to deny the very existence of underground training camps like "The Guesthouse of Goodness." Al Qaeda has proven time and time again that it intends to overthrow the Saudi kingdom by means of violence and install a fundamentalist Islamic government in the Arabian Peninsula. The regime in Riyadh can pretend to ignore this potent threat only to our own shared peril.
-- Evan Kohlmann is a senior terrorism consultant for the Washington, D.C.-based Investigative Project and author of the upcoming book, Al Qaida's Jihad in Europe: the Afghan-Bosnian Network, to be released by Berg Publishers in June 2004.
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Report: Saudis, Yemen May Erect a Fence
Feb 9, 3:00 PM (ET)
CAIRO, Egypt (AP) - In a bid to stop arms smuggling and terror attacks, Saudi and Yemeni officials will meet soon to review plans to build a fence along their frontier, a pan-Arab newspaper reported Monday.
Lt. Gen. Talal Anqawi, head of the Saudi border police, told the London-based al-Sharq al-Awsat that the concrete fence would be effective in preventing smuggling and infiltration, especially by car.
The newspaper said the meeting was being held to avoid an escalation of Yemeni objections to the fence.
Anqawi refused to call it a barrier, and said the fence was well within Saudi territory and should not be viewed as encroaching on common border areas.
The paper added that there was a similar fence on some parts of the Saudi-Kuwaiti border.
Both Saudi Arabia and Yemen are U.S. allies in the war against terror and have been hit by terrorist attacks at home.
After suicide bombings in Riyadh, the Saudi capital, in May and November, the Saudis stepped up security along their southern border with Yemen, a traditional route for drug and arms smuggling. In June, both states signed an agreement to upgrade border surveillance.
Saudi officials believe most of the weapons used in militant operations in Saudi Arabia - including the May suicide attacks - are smuggled in from Yemen, an impoverished country at the southern tip of the Arabian peninsula that has long been awash in small arms - an estimated 60 million, or three for each of its 20 million people, authorities say.
In December, Saudi authorities announced they had arrested 4,047 people and seized large quantities of weapons and drugs in the south along the border with Yemen.
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Israeli Court Pledges Quick Ruling on Wall
Feb 9, 6:39 PM (ET)
By STEVE WEIZMAN
(AP) Israeli border police stand guard as workers put concrete pieces into place during the construction...
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JERUSALEM (AP) - Israel's Supreme Court promised a speedy ruling on a petition to halt construction of Israel's separation barrier in the West Bank, a landmark case seen as a dress rehearsal for a world court hearing over the contentious project.
The court heard arguments in the case Monday, a day after the government said it would change the route to minimize hardship for Palestinians and gain Washington's support against the legal challenges.
The rights group behind the petition said the partially built network of walls, razor wire and trenches infringes on human rights and violates international law. The Center for the Defense of the Individual said that if Israel wants a barrier, it should be built on territory it held before seizing the West Bank in the 1967 Mideast war.
State attorney Michael Blass told the court the 440-mile barrier is necessary to keep out Palestinian suicide bombers, who have killed hundreds in three years of violence.
(AP) Palestinians carry the body of Shadi Jaradat, an Al Aqsa Martyrs' Brigades member, during his...
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"It is not we who unleashed the demon of terror," Blass said.
The planned route cuts deep into the West Bank in several places and encircles Palestinian towns and villages, cutting off tens of thousands of people. Palestinians say it is a land grab aimed at preventing them from creating a state.
Chief Justice Aharon Barak said the three-judge panel would rule "as soon as possible."
Barak didn't say whether the decision would come before the International Court of Justice in the Netherlands takes up the question of the barrier's legality. Those hearings are set to begin Feb. 23 at The Hague.
Any Israeli court decision could affect Israel's case before the world court, which is to issue an advisory ruling at the request of the U.N. General Assembly.
Israel challenges the world court's right to rule on the barrier, arguing that the issue is being manipulated by its opponents for political ends.
"We don't think the Hague court needs to debate this," Blass told the court. "We think the issue should be resolved between the sides."
The barrier plan is one of several unilateral steps being considered by Israeli Prime Minister Ariel Sharon. On Monday, senior Palestinian official Yasser Abed Rabbo said the Palestinians are considering a unilateral step of their own - declaration of an independent state that would include the West Bank, Gaza and east Jerusalem.
Several other groups also filed objections about aspects of the barrier project. Human rights lawyer Avigdor Feldman, representing one of the petitioners, said the world court case should be an incentive for the Israeli court to make an exhaustive examination of the facts.
"The Hague hearing is in the background," he told Barak.
Other lawyers said that a full-scale Israeli judicial review, generating responses by expert witnesses and written legal opinions, could provide useful ammunition to Israeli advocates at the Hague, while demonstrating the Israeli court's own competence.
Joining the case on the government side, a pro-barrier group called "Fence for Life" said it would save not only Israelis from attacks; but it would also spare Palestinians the almost automatic Israeli military retaliation.
"If we have the fence as fast as possible, casualties on both sides will cease," group chairman Ilan Tzion told reporters outside the courtroom.
On Sunday, Sharon adviser Zalman Shoval said Israel will change the route the barrier to cause less hardship for the Palestinians and foster U.S. support. Washington agrees with Israel that the international court is not the proper venue for the case but objects to the route of the barrier because of the disruption it causes Palestinians.
Israel wants to "make things as easy as possible for Palestinians who need to get to their fields (and) to have fewer checkpoints," Shoval said.
In another development, Palestinian officials said Palestinian Prime Minister Ahmed Qureia and Sharon would hold their first meeting on Feb. 21 or 22. Aides to the two premiers have met on and off for weeks to set up the summit, which is seen as a key for restarting stalled peace talks.
Qureia was in Dublin, Ireland, where he met with Prime Minister Bertie Ahern on Monday and said Israel must not build on "one single inch" of the West Bank. Ireland holds the rotating presidency of the 15-nation European Union, a major financial sponsor of the Palestinian Authority.
Meanwhile, a new poll found that Palestinian support for violence and suicide bombings against Israel has dropped sharply in more than three years of fighting.
Only 35 percent of respondents support continuing the violence, down from 43 percent in November and 73 percent in November 2000. The poll by the Palestinian Center for Public Opinion surveyed 500 Palestinian adults and had a margin of error of 4 percentage points.
But violence continued Monday, with two Palestinians killed in Gaza and another killed in the West Bank, Palestinians said.
One of the Palestinians killed in Gaza was identified as a member of Hamas, but Israel's army said it had no part in the man's death. The second was a 17-year-old youth, the Palestinians said. The military had no comment.
In the West Bank, a member of the Al-Aqsa Martyrs' Brigades was killed in a shootout with Israeli soldiers near the town of Jenin. The military said he was shooting at construction workers near an Israeli settlement, wounding a soldier, and was hit by soldiers' return fire.
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Kuwait seeks probe of Halliburton fuel contract
KUWAIT CITY (APOnline) -- Kuwait's energy minister has asked the nation's top prosecutor to investigate allegations of profiteering in an Iraq fuel contract between the state-owned Kuwait Petroleum Corp. and the Kuwaiti supplier of a Halliburton (HAL) subsidiary.
"Press reports and talk on the street, some of which have cast suspicion on the honesty and integrity of others, have pushed me to refer this contract to the prosecutor-general for investigation," the minister, Sheik Ahmed Fahd Al Ahmed Al Sabah, told the official Kuwait News Agency.
He said the measure would give the judiciary the chance to "have the last word in the matter" because Kuwait wants to deal with the allegations "with full transparency" and put an end to rumors.
U.S. Department of Defense auditors have found that Kellogg Brown & Root, a Halliburton subsidiary, may have overcharged by $61 million for deliveries of gasoline from Kuwait to Iraq from May through September. Their investigation is in progress.
KBR's Kuwaiti supplier, Altanmia Marketing Co., was found to have charged more than twice what suppliers in Turkey did.
Both Halliburton, Vice President Dick Cheney's former company, and the Army Corp of Engineers, which oversaw the fuel contract, said the higher price was justified by the danger faced by fuel convoys in Iraq and the need to head off Iraqi anger over gasoline shortages.
Kuwait, a major U.S. ally in the Gulf, was the main staging ground for the war that ousted former Iraqi President Saddam Hussein in April.
Houston-based Halliburton has complained repeatedly that criticism of its work in Iraq is politically motivated, in part because of its past ties with the vice president, who was the company's chairman from 1995 to 2000.
Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Nigeria to Probe Halliburton Allegations
Feb 6, 5:14 PM (ET)
By GILBERT DA COSTA
(AP) U.S. Vice President Dick Cheney during a speech to American troops at Aviano Air Base in Italy...
Full Image
ABUJA, Nigeria (AP) - Nigeria ordered an investigation Friday into allegations that a Halliburton Co. subsidiary paid $180 million in bribes to land a natural gas project contract in this West African nation. Vice President Dick Cheney was head of Halliburton at the time.
The allegations already are under scrutiny in the United States and France. A French magistrate has been investigating the payments for months. Probes by the U.S. Justice Department and U.S. Securities and Exchange Commission were disclosed this week.
President Olusegun Obasanjo has ordered a "high-level investigation" into the allegations, presidential spokeswoman Remi Oyo said in Abuja, the capital.
Oyo said the investigation is being led by the Economic and Financial Crimes Commission, a body Obasanjo set up to fight rampant breaches of financial law.
The $4 billion Nigerian Liquefied Natural Gas Plant was built in the 1990s by a consortium that included Kellogg, Brown & Root, a unit of Houston-based Halliburton.
Cathy Gist, a Halliburton spokeswoman, said the Nigerian government had not notified the company of the probe and Halliburton didn't have reason to assume any of its employees or those employed by the joint venture had violated the Foreign Corrupt Practices Act. The act bars U.S. businesses and individuals from bribing foreign officials.
Gist said the company would cooperate with the U.S. officials' probe.
Justice Department officials disclosed Wednesday that the department was reviewing documents voluntarily provided by Halliburton to determine whether to launch a full investigation.
Halliburton, already under fire for its alleged overcharges in contracts related to the war in Iraq, revealed the Justice Department request in a Jan. 21 filing with the Securities and Exchange Commission.
"Management made the decision to include these statements because of the politically charged environment in which we now operate," Gist said. "We are trying to keep the investment community informed of the accurate facts about the company's business."
According to Halliburton's filing, the illegal payment allegations involve a joint venture of which KBR was a 25 percent owner. The other partners were Technip SA of France, ENI SpA of Italy and Japan Gasoline Corp.
The filing says the Justice Department and Securities and Exchange Commission are reviewing the allegations. The payments for the gas plant contract were allegedly made to Nigerian officials.
The French magistrate looking into the accusations, Renaud Van Ruymbeke, has reportedly said in a memo that embezzlement charges could be filed against Cheney in Paris.
Cheney was Halliburton's chairman for five of the seven years in which the secret payments were allegedly made.
Cheney spokesman Kevin Kellems said Thursday that the vice president's office had no information about the matter. "We have not been contacted about it by anyone," Kellems said.
Nigeria is regularly rated by Berlin-based Transparency International as one of the world's two most corrupt nations; the other is Bangladesh. Payoffs are a frequent part of doing business here, from landing lucrative deals to having phones installed or electricity restored.
On the Net:
Halliburton: http://www.halliburton.com
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Libya Hands Over Chemical Weapons Summary
Feb 5, 4:11 PM (ET)
THE HAGUE, Netherlands (AP) - Libyan officials handed over an initial summary of the country's chemicals weapons stockpiles and programs to a team of international inspectors Thursday, the world's chemical weapons watchdog said.
The Organization for the Prohibition of Chemical Weapons gave no details on what Libya reported in a round of initial meetings Thursday, the day Libya officially joined the treaty banning the weapons.
After months of secret talks with the United States and Britain, Libyan leader Moammar Gadhafi announced in December his country would give up its weapons of mass destruction programs, including chemical weapons.
The OPCW oversees the 1993 Chemical Weapons Convention, which prohibits the production, storage and use of chemical weapons.
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Pakistan May Prosecute Scientist If New Charges Emerge, AP Says
Feb. 10 (Bloomberg) -- Pakistan's government said it may prosecute its top nuclear scientist in the event he is found to have failed to provide full details about his involvement in selling atomic secrets, the Associated Press reported.
President Pervez Musharraf pardoned Abdul Qadeer Khan last week after he confessed to selling nuclear secrets to Iran, Libya and North Korea. The pardon was ``conditional'' on his admissions so far and the investigation into Khan and his associates continues, Foreign Ministry spokesman Masood Khan said at a news conference yesterday in Islamabad.
``The pardon is specific to the charges made so far, and about which Dr. A.Q. Khan has made a confessional statement,'' AP cited Masood Khan as saying. ``This is not a blanket pardon.''
Pakistani investigators questioned about a dozen scientists in the past two months after the International Atomic Energy Agency provided information about technology given to other nations. Khan acknowledged he transferred the technology and sought forgiveness from Musharraf, who maintained the government and the army weren't involved in the transfer at any level. Musharraf rejected international inspections of Pakistan's nuclear program while agreeing to share information from the investigation with the IAEA.
(Associated Press 2-10)
To contact the reporter on this story:
Nick Wells in Sydney
or nwells3@bloomberg.net
To contact the editor of this story:
Paul Tighe at
or ptighe@bloomberg.net
Last Updated: February 9, 2004 18:12 EST

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AP Enterprise: Rogue Hunt Goes Worldwide
Feb 5, 3:15 PM (ET)
By GEORGE JAHN
(AP) Abdul Qadeer Khan, founder of Pakistan's nuclear program, is seen in Islamabad in this July 2002...
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VIENNA, Austria (AP) - The hunt for middlemen who worked with the father of Pakistan's nuclear program to supply rogue regimes with weapons technology has widened to Japan and Africa, diplomats said Thursday.
Suspects in Germany and two other European countries are also being investigated in the growing probe of the clandestine black market apparently headed by Abdul Qadeer Khan of Pakistan, they said.
Also, Malaysia announced Thursday it would investigate a company controlled by the prime minister's son for its alleged role in supplying components to Libya's nuclear program. The company also has been linked to the international nuclear black market tied to Pakistan.
The chief U.N. nuclear inspector said Thursday that Khan was an "important part" of the clandestine supply chain, but he said long and painstaking investigations into who sold what and to whom lay ahead.
(AP) Mohamed ElBaradei, director general of the International Atomic Energy Agency arrives to an...
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"Dr. Khan was not working alone," said Mohamed ElBaradei, director general of the International Atomic Energy Agency. "There were items that were manufactured in other countries, items that were reassembled in different countries.
"Dr. Khan was the tip of an iceberg for us, but we still have a lot of work to do."
ElBaradei said middlemen in five countries supplied nuclear technology and expertise to Iran - which denies running a nuclear weapons program - and to Libya, which has owned up to having weapons of mass destruction or programs to make them. Pakistani officials have said Khan's network had supplied North Korea, too, but ElBaradei said he couldn't confirm that.
The five countries include Germany and Japan as well as two countries in Europe and one in Africa that the diplomats would not name.
In Washington, CIA Director George Tenet confirmed that Khan was at the center of the nuclear black market. He said U.S. and British intelligence had been tracking its movements for years.
"His network was shaving years off the nuclear weapons development timelines of several states, including Libya," Tenet said in a speech, adding that now "Khan and his network have been dealt a crushing blow."
Pakistan - and Khan - became the focus of international investigation on the basis of information Libya and Iran gave the IAEA about where they covertly bought nuclear technology that can be used to make weapons.
In Islamabad, President Pervez Musharraf said the IAEA was welcome to come and discuss the proliferation issue. "We are open and we will tell them everything," Musharraf said.
Still, Musharraf said Pakistan wouldn't submit to any U.N. supervision of its weapons program, and that no documents would be handed over to the IAEA. He also ruled out an independent investigation of the military's role in spreading nuclear technology.
Pakistan, which did not sign the Nuclear Nonproliferation Treaty, is not obliged to submit its nuclear weapons activity to outside scrutiny.
Musharraf also pardoned Khan, heading off any trial that could have uncovered revelations about government and military involvement.
In the nuclear procurement chain headed by Khan, hundreds of millions of dollars are thought to have changed hands over the past 15 years.
Among items bought by Libya were engineer's drawings of a nuclear weapon, now under IAEA seal in the United States.
One of the diplomats said that drawing appeared to be of Chinese design but cautioned against assuming it came directly from China.
"There are no fingerprints on the drawings which lead you to any specific country," he said.
China is widely assumed to have been Pakistan's key supplier of much of the clandestine nuclear technology that Khan used to publicly establish Pakistan as a nuclear power in 1998.
The revelations that nuclear know-how, and turnkey level equipment needed to enrich uranium to weapons grade was traded over the past two decades have escalated fears of similar clandestine programs elsewhere.
ElBaradei said he was not aware of covert weapons development in countries other than Libya, Iran and North Korea. But one diplomat said the success of the network - as measured by the nuclear weapons blueprint and high-tech enrichment equipment sold to Libya - were cause for alarm.
"Libya for the most part tried to buy its way into the nuclear club," he said. "It was on its way," to getting everything, he added.
In Malaysia, the company under investigation said it didn't know that some centrifuge components it made were headed for Libya.
The company, Scomi Precision Engineering, or SCOPE, accepted a contract from a Dubai-based company after negotiating with a middleman, identified as a Sri Lankan, B.S.A. Tahir, police said.
SCOPE's parent company, the Scomi group, confirmed it made "14 semifinished components" for Gulf Technical Industries and shipped them in four consignments between December 2002 and August 2003, under a deal negotiated by Tahir and worth $3.4 million.
U.S. and British intelligence said the deal between SCOPE and Tahir involved components that could be used for uranium enrichment.
Kamaluddin Abdullah, 35, the only son of Malaysian Prime Minister Abdullah Ahmad Badawi, is Scomi's largest shareholder, although he has no management role. He could not be reached for comment.
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"Did I expect George Bush to fuck it up as badly as he did?
Senator John Kerry attackiert Au?enpolitik des Pr?sidenten
Berlin - Dass US-Senator John Kerry bei seiner Kandidatur als Pr?sidentschaftsbewerber zun?chst Anlaufschwierigkeiten hatte, mag nicht zuletzt an seiner widerspr?chlichen Haltung zum Irak-Krieg gelegen haben: W?hrend der Demokrat im Oktober 2002 noch f?r die Kongressentschlie?ung stimmte, die der Regierung von Pr?sident George W. Bush gr?nes Licht f?r den Feldzug gab, ?bte er seither immer wieder massive Kritik an der Irak-Politik Washingtons.
Er habe damals geglaubt, die Entscheidung zum Krieg sei das Beste f?r sein Land, verteidigte Kerry sein Votum in einem Interview mit der US-Zeitschrift "Rolling Stone" im Dezember. Und dann wurde er drastisch: "Konnte ich damit rechnen, dass George Bush so eine Schei?e bauen w?rde, wie er es dann tat? Ich glaube, niemand hat das getan", sagte er in dem Gespr?ch. ("Did I expect George Bush to fuck it up as badly as he did? I don't think anybody did.") Das Wei?e Haus zeigte sich ?ber Kerrys ?u?erung schockiert und deutete an, dass daf?r eine Entschuldigung f?llig sei.
Diese blieb der Senator allerdings schuldig - vielmehr legte er noch einmal nach: Die Bush-Regierung betreibe "die r?cksichtsloseste, arroganteste, ungeschickteste und ideologischste Au?enpolitik in der modernen Geschichte", sagte er am Abend seines ersten Wahltriumphs im US-Bundesstaat Iowa. Bei anderen Gelegenheiten betonte Kerry mehrfach, Bush h?tte sich vor dem Krieg um eine breitere internationale Unterst?tzung bem?hen sollen. Er habe Bush gewarnt, dass sich nur mit einer breiten Koalition "der Frieden gewinnen" lasse. (APA)
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Palestinian Probe of U.S. Deaths Faulted
Feb 9, 5:46 PM (ET)
WASHINGTON (AP) - The State Department dismissed as inadequate Monday a Palestinian military inquiry into the deaths of three U.S. security officials killed in a roadside explosion last October in Gaza.
A department spokeswoman suggested the inquiry would not be the serious investigation needed to find and punish those responsible for the deaths.
Last Saturday, a Palestinian military court charged four suspects with planting explosives along a main road in Gaza. A prosecutor said the defendants targeted Israeli tanks, but one of their bombs may also have ripped apart a U.S. diplomatic vehicle Oct. 15 and killed three American security guards.
Rhonda Shore, spokeswoman for the State Department's Department of Near East Affairs, said the Palestinian proceedings would not meet the standards of justice sought by the United States.
Prosecutor Jamal Shamiyye said the four defendants admitted planting explosives on the main road in Gaza where the U.S. convoy was bombed, but they were targeting Israeli tanks.
That seemed to imply a defense contention that the Americans were not targeted.
However, Palestinian and U.S. investigators have found evidence that indicated the bomb was detonated by someone who watched from a hiding place as the clearly marked convoy passed.
U.S. officials have warned that U.S. aid programs to Palestinians could be reduced or canceled if there was no progress in the investigation.
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FBI: al-Qaida Suspect Fought for Taliban
Feb 9, 11:02 PM (ET)
By CHRIS WILLIAMS
MINNEAPOLIS (AP) - A man accused of providing support to al-Qaida trained in martial arts and with weapons, taught English to al-Qaida members and joined the Taliban front lines, according to an FBI affidavit.
Terror suspect Mohammed Warsame, 30, twice saw combat with front line units of the Taliban while in Afghanistan and once sat next to Osama bin Laden at a meal, said the affidavit, which investigators said was based on interviews with Warsame.
"The defendant stated that bin Laden was very inspirational," according to the affidavit.
Prosecutors argued Monday that Warsame, a Somali with Canadian citizenship, is a flight risk and should remain in jail while his court case proceeds. U.S. Magistrate Judge Franklin Noel ordered him without bail pending trial.
Warsame pleaded innocent Monday to a single charge of providing support to a terrorist organization, but otherwise did not speak.
Investigators say he has acknowledged traveling to Pakistan and Afghanistan in 2000 and 2001. In early 2001, they say, Warsame asked al-Qaida for money to move his family to Afghanistan.
According to the affidavit, an al-Qaida leader instead paid for Warsame's airplane ticket back to North America, and gave him $1,700 in travel money. Warsame admitted he later wired money to people he had met in the training camps, investigators said.
Dan Scott, Warsame's public defender, argued that his client should be freed because he has strong ties to Minnesota through his wife and 5-year-old daughter and was not a risk to leave the country. Scott also rejected the idea that Warsame is an active al-Qaida member.
"At no point has he shown himself to be persistently active with a terrorist organization," Scott said.
Warsame has been living in Minnesota since 2002.

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Whistleblower Slams EPA Sludge Data
Feb 4, 7:57 PM (ET)
By ERICA WERNER
WASHINGTON (AP) - A former government scientist accused the Environmental Protection Agency on Wednesday of knowingly using unreliable data when it denied a petition to halt the use of sewage sludge for fertilizer.
The microbiologist, David Lewis, testified at a House subcommittee hearing that the EPA used data about sludge quality at two Georgia dairy farms that had already been rejected by Georgia state officials as "completely unreliable, possibly even fraudulent."
He asked the House Resources Committee's subcommittee on energy and mineral resources to call on the EPA for an internal investigation of the moratorium and other matters.
Lewis, a former EPA employee who says he was fired in May after raising concerns about sludge standards, also said the panel should press the EPA for additional whistleblower protections.
"This whole process ... is nothing more than a scam," Lewis said in written testimony.
House Resources Committee spokeswoman Nicol Andrews said later that the committee's chairman, Rep. Richard Pombo, R-Calif., was open to Lewis' suggestions.
The EPA in December denied a petition from 73 labor, environment and farm groups for an immediate moratorium on land-based uses for sewage sludge. Such a moratorium would affect more than 3 million tons of sludge used each year as fertilizer.
In its decision, the EPA cited data showing levels of heavy metals in sludge at the dairy farms were within allowed limits.
In fact, Lewis said, studies by Georgia state agencies found the sludge was so corrosive that it dissolved fences and emitted toxic fumes that could sicken cows. Lewis said the faulty data was produced by local officials in Augusta, Ga., several years ago and knowingly used by the EPA in December, in spite of an audit by Georgia officials that found it unreliable.
"Mr. Lewis is entitled to his opinion. We stand by our December 2003 decision," said EPA spokeswoman Cynthia Bergman, noting the agency is in the process of revising its approach to sludge.
Lewis' departure from the EPA came after he worked 32 years there. It was protested by Republican Sens. Charles Grassley of Iowa and James Inhofe of Oklahoma. But the EPA said then that Lewis had signed an agreement specifying he was to step down.
Lewis is now an adjunct professor at the University of Georgia. His testimony came at a hearing on peer-review and "sound science" standards for writing federal regulations.
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El Jefe del Gobierno de la Ciudad de M?xico en Apuros
?No se r?a! Lleg? el "ch?fergate"
El chofer del alcalde del Distrito Federal gana unos 6 mil d?lares mensuales. El funcionario defiende a su empleado y dice que trabaja mucho. Argumentan que el empleado es, en realidad, su jefe de log?stica.
Roberto Cienfuegos
Tiempos del Mundo
Hace s?lo cuatro meses se declar? "pol?ticamente indestructible" y aunque la frase son? demasiado petulante a o?dos de muchos, todas las encuestas han se?alado al jefe del gobierno de la Ciudad de M?xico, Andr?s Manuel L?pez Obrador, como el presidenciable favorito para suceder a Vicente Fox en el 2006.
Pero eso podr?a entrar en un camino de curvas peligrosas gracias al "ch?fergate".
La dicha de estar en el candelero pol?tico mexicano le dur? poco a L?pez Obrador. La realidad, siempre m?s terca e implacable, acaba de asestar un duro golpe a este gobernante hasta ahora identificado con las causas populares y con el ejercicio honesto y sencillo del poder.
Con una imagen de pol?tico modesto, que habita un departamento de clase media al sur de la capital, L?pez Obrador viaja en un autom?vil viejo y austero. El alcalde comienza a trabajar a las cinco de la ma?ana, como la mayor parte de los capitalinos. L?pez Obrador se fragu? su propia popularidad hasta el punto de convertirse en el precandidato presidencial n?mero uno para las elecciones del 2006.
Pero "el ch?fergate", un esc?ndalo que reci?n estall? y que involucra a su chofer personal como beneficiario de ingresos considerados excesivamente altos y casi id?nticos al del propio jefe del gobierno de la ciudad, amenaza con consecuencias que por lo menos mellar?n su condici?n de figura "pol?ticamente indestructible".
A esto se a?adi? el reconocimiento de que otros dos parientes de Mollinedo Bastar, el chofer m?s famoso y mejor pagado de Am?rica Latina, tambi?n figuran en la n?mina capitalina con sueldos de dos mil a seis mil d?lares.
Mas el primer "pelo en la sopa" sobrevino al conocerse que el chofer de L?pez Obrador, identificado como Nicol?s Mollinedo Bastar, devenga un salario mensual de unos 63 mil pesos, unos 6 mil d?lares, un ingreso que contrasta agudamente con los cien d?lares que aproximadamente gana cada mes un obrero mexicano promedio y a?n con los mil d?lares que obtiene un m?dico al servicio del gobierno de la ciudad. De hecho, la renta del chofer de L?pez Obrador bastar?a para cubrir los sueldos de 18 enfermeras y los de 11 ingenieros en la Secretar?a de Obras. Esos emolumentos resultan cuatro veces m?s altos que los que cubren al jefe del Departamento de Bomberos.
Oriundo, al igual que L?pez Obrador, del sure?o estado mexicano de Tabasco y cuya familia es cercana al hoy jefe del gobierno capitalino, Mollinedo Bastar es considerado "la sombra" del alcalde, una sombra que amenaza con oscurecer la credibilidad popular al gobernante capitalino.
En un esfuerzo por contrarrestar el esc?ndalo y desencanto que gener? el caso Mollinedo Bastar, L?pez Obrador dijo que "le pago eso porque se levanta a las cuatro y se acuesta a las doce" de la noche. "No es cualquier funcionario", argument? y a?adi? que para ?l "no hay s?bados, no hay domingos, por eso se le tiene que pagar m?s". En auxilio de L?pez Obrador vino el secretario de Gobierno, Alejandro Encinas, quien explic? que Mollinedo Bastar es en realidad el coordinador de la Unidad de Apoyo Log?stico del gobierno de la ciudad y no meramente el chofer de L?pez Obrador, como ?ste mismo dijo antes. Encinas neg? que el gobierno protegiera a Mollinedo Bastar. "Estamos dando la informaci?n oficial sobre un hecho concreto. Aqu? estamos haciendo una correcci?n de un error administrativo", adujo, pero ratific? que se seguir? pagando el salario de unos 6 mil d?lares a Mollinedo Bastar.
Ahora s?lo resta saber el verdadero impacto del "ch?fergate" en su potencialidad presidencial.

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Gobierno Pide a Corte de La Haya que Rechace Objeciones Colombianas
Conflicto por territorio en el Mar Caribe
El Gobierno de Nicaragua espera que la Corte Internacional de Justicia de La Haya (CIJ) rechace las objeciones presentadas por Colombia a la demanda que present? el pa?s centroamericano sobre territorios mar?timos en el M ar Caribe.
Isidro L?pez
Tiempos del Mundo
MANAGUA. Nicaragua demand? en el 2001 a Colombia, despu?s de que este pa?s suramericano y Honduras ratificaran un tratado de delimitaci?n mar?tima que, seg?n los nicarag?enses, cercena unos 130 mil kil?metros cuadrados de su plataforma continental en el Mar Caribe. El juicio en La Haya entr? en una nueva etapa esta semana, despu?s de que Nicaragua respondiera a las objeciones preliminares presentadas en julio por Colombia. Colombia argumenta que La Haya no tiene jurisdicci?n para dictar una sentencia sobre la demanda nicarag?ense, cuyo objetivo central es la anulaci?n del tratado Ram?rez-L?pez, ratificado por los congresos colombiano y hondure?o en 1999.
En su demanda del 2001, Nicaragua solicit? al Tribunal Internacional declare su soberan?a y su derecho sobre la plataforma continental y zona econ?mica exclusiva que le corresponde en el Mar Caribe, as? como sobre el Archipi?lago San Andr?s y Providencia, adem?s de sobre los cayos Roncador, Quitasue?os, Serrana y otros. Los territorios que reclama Nicaragua est?n al Este del meridiano 82 en el Mar Caribe.
Los argumentos de Nicaragua para reclamar ese territorio en el Mar Caribe est?n sustentados en el an?lisis de documentos hist?ricos, en investigaciones y en la jurisprudencia acerca del tema, indic? el canciller Norman Caldera. Colombia ejerce posesi?n sobre el archipi?lago San Andr?s y Providencia, distante unas 200 millas de la costa caribe de Nicaragua, desde 1928, mediante un tratado firmado por los gobiernos de ambos pa?ses. Sin embargo, desde 1980 el Gobierno de Nicaragua declar? inv?lido el tratado B?rcenas-Meneses-Esguerra, alegando que al momento de su suscripci?n este pa?s estaba ocupado militarmente por los Estados Unidos.
Las autoridades nicarag?enses conf?an que La Haya se pronuncie sobre el caso y confirme su jurisdicci?n para conocer del diferendo lim?trofe. El experto Edmundo Castillo, que integra el equipo nicarag?ense para llevar el caso en La Haya, explic? que una vez quede resuelto el tema de la jurisprudencia, la Corte internacional deber? proceder al an?lisis de fondo de la causa.
Los nicarag?enses afirman tener los argumentos necesarios para demostrar en La Haya que el territorio en disputa pertenece a Nicaragua.
Castillo dijo que las excepciones procesales recurridas por Colombia buscan retrasar que la Corte internacional entre a la etapa del an?lisis de fondo de la demanda presentada por Nicaragua. Entretanto, el jurista Mauricio Herdocia record? que en 1937, Colombia acept? la jurisdicci?n de la Corte para mediar en los asuntos de l?mites. El territorio mar?timo en disputa y que reclama como suyo Nicaragua es considerado rico en yacimientos de petr?leo y como una reserva de mariscos muy importante en el Caribe centroamericano, principalmente de camar?n y langosta.

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Portillo Pone de Nuevo al Parlamento Centroamericano en el Ojo del Hurac?n
Parlacen: ?cueva de corruptos?
La sorpresiva juramentaci?n que el actual presidente del Parlamento Centroamericano, Parlacen, con sede en Guatemala, hiciera al ex presidente Alfonso Portillo y al ex vicepresidente Francisco Reyes L?pez, levanta ampollas.
Marco Julio Ochoa
Tiempos del Mundo
CIUDAD DE GUATEMALA. Portillo y Reyes, quienes recientemente entregaron la presidencia y vicepresidencia a sus sucesores Oscar Berger y Eduardo Stein, son se?alados de lavado de dinero y de poseer varias cuentas bancarias nutridas en el ejercicio del poder.
Aun cuando el otrora mandatario guatemalteco criticara duramente a la que ahora es su instituci?n guarida, su sonrisa ante las c?maras es evidente se?al de reto y de cinismo, visto del lado de los opositores y detractores del mandatario, principalmente de los econ?micamente poderosos.
"Voy a esperar el resultado de las investigaciones, las cuales giran en torno a acusaciones falsas. A m? me siguen criticando y atacando, pero de este gobierno los medios de comunicaci?n escritos oficialistas no dicen nada. No dicen que subi? abrumadoramente el pollo, las gasolinas, las medicinas. Todo eso no es malo para los medios, porque est?n con el gobierno," dijo el ahora diputado centroamericano Alfonso Portillo a los reporteros nacionales e internacionales que cubrieron su juramentaci?n.
Durante la accidentada juramentaci?n, la parlamentaria Tain? Jotr?, de Rep?blica Dominicana, vociferaba que no quer?a compartir el espacio con corruptos, y dijo sentirse ofendida por lo sucedido ese d?a, recordando el caso de Arnoldo Alem?n, ex presidente de Nicaragua, y ahora un simple reo que purga una condena producto del mal manejo de fondos que hubo durante su administraci?n.
Seg?n la parlamentaria, que m?s adelante mejor opt? por abandonar el hemiciclo, Alem?n busc? refugio en esa entidad, la misma que lo desafor? en aras de limpiar el prestigio tanto del parlamento como de los centroamericanos. A la postura abierta de Jotr? tambi?n se sum? la diputada Elsy Mackay, de Panam?.
El prestigio del Parlamento Centroamericano ha venido de mal en peor. Su presidente, el hondure?o Mario Facuse? Nadal, es se?alado de apropiaci?n ilegal de una gran cantidad de predios urbanos y rurales, por lo que el gobierno aboga por la suspensi?n de la inmunidad para procesarlo. Otros eslabones de la negra cadena que perjudic? tambi?n el prestigio parlac?nico fueron la captura del diputado hondure?o C?sar D?az en suelo nicarag?ense portando 7 kilos de hero?na. En diciembre, la polic?a hondure?a tambi?n captur? al funcionario del Parlacen Jorge Alberto C?ceres Gal?n acus?ndolo de tr?fico de coca?na.
Revocatoria del tratado
Aunque no fueron electos popularmente para formar parte del Parlacen, los ahora diputados Portillo y Reyes, se?alados de corrupci?n en Guatemala, gozar?n de los derechos que ese foro concede a todos sus miembros, incluyendo la anhelada inmunidad, que les otorga ventajas para eludir acusaciones judiciales.
La soluci?n, que los detractores de Portillo y Reyes L?pez consideran como un acto sucio y deleznable, es que los presidentes de los estados miembros (no as? de los estados amigos) firmen una modificaci?n al tratado constitutivo, lo cual es posible, a criterio del presidente guatemalteco Berger, dada la voluntad pol?tica que encuentra en el resto de sus hom?logos.
Seg?n el presidente guatemalteco, el punto ser? agregado a la agenda que tratar? con sus hom?logos centroamericanos en una reuni?n en febrero. Con esta reforma, el presidente Berger busca que los ex mandatarios no ingresen al parlamento como una forma de protecci?n por la mala forma de gobernar que ejercieron. Con ello, s?lo quedar?an representantes electos popularmente y no por designaci?n.
Para Francisco Flores, presidente de El Salvador, la coyuntura actual es propicia para realizar cambios en dicho foro, con el fin de que se redireccione y sea funcional para los estados que lo conforman. Al respecto, el presidente de Honduras, Ricardo Maduro, asegura que los pa?ses pobres deben recortar las operaciones de una instituci?n que no est? dando resultados positivos para los centroamericanos. Adem?s de los presidentes de El Salvador y Honduras, Mireya Moscoso de Panam? tambi?n asegura que el Parlacen es una p?rdida de tiempo, por lo que estar?a dispuesta a eliminarlo. "Por inoperante, ni siquiera deber?a de existir," exhorta.
Mientras, el presidente de Nicaragua, Enrique Bola?os, expresa que se debe trabajar sin precipitaci?n. Bola?os es m?s sigiloso en sus intenciones y asegura que todo el sistema de integraci?n centroamericana debe sufrir una revisi?n y si es posible, una sustancial reingenier?a.
Historia parlamentaria
El Parlamento Centroamericano, Parlacen, fue creado hace 17 a?os en el contexto de los acuerdos de Esquipulas II, en donde los presidentes del ?rea coincidieron en la necesidad de avanzar en la integraci?n pol?tica, econ?mica y cultural.
El 28 de octubre de 1991, el Parlacen inici? oficialmente sus labores, con ausencia de Costa Rica, cuyo gobierno no ha ratificado el tratado constitutivo y en repetidas ocasiones ha manifestado sentirse satisfecho de no estar inmiscuido en un ?rgano que, lejos de darle algo positivo al pa?s, simplemente lo desprestigiar?a.
Este foro regional ha sido criticado porque sus propuestas y resoluciones no son de cumplimiento legal ni tienen mayores incidencias en las sociedades representadas.
Guatemala, El Salvador, Honduras, Nicaragua, Panam? y Rep?blica Dominicana est?n representados en el Parlacen, mientras que M?xico, Puerto Rico y Taiw?n participan como estados observadores.
Costa Rica sigue negando ser parte de este foro y se niega a enviar a sus veinte representantes.
Representantes del Parlamento Europeo, con sede en Bruselas, B?lgica, se han declarado en apoyo al Parlacen por considerarlo s?mbolo de la unidad de los pa?ses del ?rea centroamericana. M.J.O.

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Aumenta Preocupaci?n con Ch?vez
Denuncian retraso de referendo revocatorio
Acusaci?n de irregularidades oficialistas provoca crisis en el Consejo Electoral. Exigen mayor supervisi?n internacional.
Carlos Coello
Tiempos del Mundo
CARACAS. La tormenta desatada por las acusaciones de irregularidades del Consejo Nacional Electoral (CNE) para retrasar el referendo de revocaci?n del mandato al presidente Hugo Ch?vez, amain? moment?neamente luego que el organismo acept? la participaci?n de observadores internacionales en todas las etapas del proceso. Con esta medida, Venezuela evitaba, adem?s, el riesgo de desembocar en la aplicaci?n de la Carta Interamericana Democr?tica. La indisimulada pugna entre el gobierno y la oposici?n para frenar o darle luz verde a la consulta plebiscitaria, se tranform? en esc?ndalo cuando Ezequiel Zamora, el ponderado vicepresidente del CNE, denunci? un "sabotaje" para favorecer al oficialismo. Zamora dijo que las maniobras est?n destinadas a impedir que los testigos de la oposici?n cumplan con sus funciones en el complejo proceso de verificaci?n de las firmas que solicitan el referendo.
Seg?n el matutino El Nacional, Zamora "puso el dedo en la llaga: el gobierno est? moviendo a sus partidarios para que, desde el interior del organismo comicial, procedan a sabotear la verificaci?n de las firmas que permitan autorizar la convocatoria del referendo revocatorio".
A fines del a?o pasado los adversarios de Ch?vez presentaron m?s de 3.4 millones de firmas solicitando la consulta, superando con creces los 2.4 millones de r?bricas que exige la ley. Representantes de los partidos de oposici?n han denunciado que el CNE, controlado por una mayor?a oficialista, ha retardado el proceso revocatorio en por lo menos tres meses e indicaron que los simpatizantes del gobierno controlan ?reas claves del ente comicial como inform?tica, transcripci?n y verificaci?n de firmas.
Seg?n los opositores, el gobierno busca impedir el revocatorio o retrasarlo de tal forma que no tendr?a sentido su realizaci?n. Se?alan que en el primer caso se persigue la anulaci?n de m?s del 40 por ciento de las firmas, con el argumento de que son "fraudulentas". Sin embargo, la Organizaci?n de Estados Americanos, el Centro Carter, la Uni?n Europea y el Grupo de Amigos de Venezuela (Brasil, Chile, Espa?a, Estados Unidos, M?xico y Portugal) han sostenido que la recolecci?n de firmas fue transparente.
El ex presidente Jimmy Carter reiter? que no hubo fraude con las r?bricas. La alternativa de retrasar el referendo consistir?a, seg?n los opositores, en que ?ste se efect?e despu?s del 19 de agosto, cuando ya no ser?a posible una elecci?n presidencial para sustituir a Ch?vez ya que, si es revocado, el resto del per?odo lo cumplir?a el vicepresidente y el revocado seguir?a gobernando tras bambalinas. Seg?n la ley, para que haya nuevas elecciones, el referendo debe efectuarse entre la mitad del per?odo (19 de agosto del 2002) y antes del cuarto a?o de mandato (18 de agosto pr?ximo). A pesar de que el presidente del CNE, Francisco Carrasquero, dijo que el proceso de verificaci?n de firmas concluir?a el 13 de febrero (y que 90 d?as despu?s se har?a el referendo) Carter estim? que ese anuncio se retrasar? "en unos d?as". Simult?neamente, la OEA y el Centro Carter presionaron por una participaci?n activa de sus observadores.
Oscar Battaglini, uno de los directores oficialistas del CNE, declar? que "los observadores internacionales tienen el derecho a participar, pero hay determinadas ?reas en las que, como poder aut?nomo y soberano, establecimos l?mites". El jefe parlamentario Nicol?s Maduro destac? que el poder electoral venezolano es soberano y no est? sometido a "tutelaje internacional". Sin embargo, al finalizar la visita de Carter, el CNE dio a conocer que los observadores de la OEA y el Centro Carter participar?n en todas las ?reas del proceso referendario.

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Ofensiva Contra la Evasi?n de Impuestos
Gobierno asume como `gran hermano'
A partir de junio, la Dian registrar? en una sola central de informaci?n todas las transacciones comerciales de los ciudadanos.
Alexandra Farf?n
Tiempos del Mundo
La propuesta fue recibida con asombro. No obstante, la mayor?a intent? ponerse en los zapatos del gobierno para entender qu? razones llevaron a la Direcci?n de Impuestos y Aduanas Nacionales (Dian) a invertir otra millonaria suma de dinero en una central de informaci?n que registrar? todas y cada una de las transacciones comerciales de 20 millones de colombianos: Compras, ventas, traspasos, exportaciones, aportes, pagos...
La Dian asegura que Muisca, nombre del sistema que empezar? a operar en junio, servir? para reducir la evasi?n de impuestos del 30 por ciento (nivel que ha tenido en los ?ltimos diez a?os) al 20 por ciento, pues en sus archivos quedar?n escritos todos los datos necesarios para saber cu?les de las personas all? registradas le deben a la Naci?n tributos por sus bienes y transacciones. La adquisici?n de finca ra?z, la venta de un autom?vil o el manejo de las tarjetas de cr?dito y d?bito estar?n a la mano de la entidad recaudadora en el Modelo ?nico de Ingresos, Servicio y Control Automatizado.
El director de la DIAN, Mario Aranguren, indic? que con este sistema se controlar?n los impuestos, las aduanas y los asuntos cambiarios que son competencia de su entidad. "Esto nos da mucha eficiencia y una garant?a de hacer exactamente todos los cruces sobre los consumos e ingresos que tienen las personas para ver su responsabilidad fiscal y adicionalmente, todas sus acciones y actuaciones en el comercio exterior, cuando sea una importaci?n, una exportaci?n", dijo el funcionario tras anunciar oficialmente la medida. Aranguren advirti? que con la nueva central de informaci?n todos los colombianos quedar?n bajo la lupa del gobierno. Aclar? adem?s que conocer toda la informaci?n comercial y financiera de los colombianos, "no implica que se est? violando la reserva bancaria, pues para efectos tributarios no existe tal reserva".
El Vicepresidente Francisco Santos Calder?n dijo que el gobierno garantizar? que la inversi?n hecha en el sistema tenga buenos resultados. "Hasta el a?o 2003 se hab?an pedido 700 mil millones de pesos en las distintas entidades del Estado para gastar en sistemas de informaci?n", dijo al explicar que es responsabilidad de la Comisi?n Intersectorial de Pol?ticas y Gesti?n de la Informaci?n vigilar que "no sigamos gastando plata en sistemas que no se hablan entre s?".
Muisca ya tiene sus primeros detractores. Algunos de ellos avizoran ya una avalancha de quejas como las que actualmente enfrentan las principales centrales financieras de riesgo, las cuales reportan, entre otras cosas, atrasos en los pagos de obligaciones contra?das por los usuarios de cr?ditos y otros productos bancarios.

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?C?mo Explicar el Potencial Nacional Minero Desaprovechado?
Con diamantes despierta fiebre mineral
A la espera de autorizaciones para hacer prospecciones que determinen el valor de los hallazgos mineros, buscadores de tesoros alientan la esperanza de encontrar fortuna.
Maria D?az de Vivar
Tiempos del Mundo
ASUNCI?N. "Los diamantes son para toda la vida," dice una frase popular. Lo que no se podr?a afirmar por estas latitudes es que la vida de los habitantes de las tierras supuestamente pre?adas de minerales valiosos sea igualmente preciada.
La tala indiscriminada de bosques sin una reforestaci?n adecuada sigue mermando las reservas vegetales. Sin embargo, las riquezas del suelo paraguayo han permanecido a salvo bajo el manto piadoso de la ignorancia o la falta de inter?s por explotarlas. A lo largo de la geograf?a de este pa?s mediterr?neo, ubicado en el coraz?n del Cono Sur, se han ido detectando canteras de yeso y piedra caliza, que bien podr?an suplir las importaciones de similares insumos que benefician s?lo a pa?ses vecinos que nos proveen. Hasta ahora es un misterio el hecho que a pocos kil?metros de las fronteras paraguayas con Bolivia y Argentina se hayan encontrado yacimientos rentables de gas natural y petr?leo, mientras que de Paraguay no sale ni una gota de hidrocarburos.
Hay quienes afirman que el m?rmol paraguayo es de una calidad superior, pero todos los intentos por desarrollar la industria han sido desalentados por las administraciones gubernamentales durante d?cadas. M?s grave a?n es que del recurso precioso, el Estado extrae apenas un producto a sabiendas de las diversas e interesante posibilidades que ofrece la materia prima contenida en los suelos norte?os.
"En Concepci?n hay yacimientos calc?reos para proveer cal agr?cola por los pr?ximos 500 a?os, aproximadamente, y es eso lo que nuestra econom?a, que es agr?cola y ganadera, necesita m?s. ?Por qu? nos vamos detr?s del oro o los diamantes en lugar de satisfacer necesidades actuales y reales?", cuestion? el doctor en Geolog?a, Fernando Wiens, al diario ?ltima Hora.
Actualmente se importa el total de la cal agr?cola utilizada en la Regi?n Oriental, por un valor total de 97 millones de d?lares. Tambi?n se?al? los casos del abundante yeso en Lagerenza y del gas natural en la regi?n denominada Chaco Paraguayo. Dijo que "son casos ya antiguos y 100% comprobados y nadie hace nada al respecto". Seg?n los datos, existe suficiente yeso para satisfacer la demanda interna e inclusive para exportar, pero actualmente la Industria Nacional del Cemento (INC) importa yeso de la Argentina por un valor anual de casi 3 millones de d?lares.
Expertos de todas las nacionalidades pululan desde hace meses por las zonas de inter?s investigando los recursos subterr?neos de Paraguay. Pero por ahora, la ?nica que cuenta con el permiso para la exploraci?n, prospecci?n y explotaci?n de minerales en la zona norte del pa?s es la Morrison Mining Company.
El Estado paraguayo garantiza la propiedad privada, si bien los recursos minerales son del fisco. De confirmarse un hallazgo, el que tiene la concesi?n para la explotaci?n debe negociar con el propietario, y si hay oposici?n debe solicitar una expropiaci?n al Congreso Nacional con fundadas razones.
El oro y los diamantes son los m?s llamativos hallazgos pero no los ?nicos minerales de gran valor encontrados en territorio paraguayo: plomo, hierro, n?quel y zinc podr?an hacer rentable la actividad minera a?n incipiente pero que ya ha atra?do la atenci?n de empresas multinacionales.
El viceministro de Minas y Energ?a, H?ctor Ru?z D?az, dijo a la prensa que hasta el momento no es oficial el hallazgo de diamantes en el norte, aunque confirm? la existencia de yacimientos de oro en el centro del pa?s.
Pero las expectativas levantadas entre ge?logos y medios de comunicaci?n tienen en vilo a los pobladores de un casi despoblado paraje de Concepci?n (a 580 kil?metros al norte de Asunci?n), una colonia denominada Sargento Jos? F?lix L?pez, que carece de los servicios m?s elementales, como la electricidad, el agua corriente, caminos, centros de salud o maestros de escuela.
Casi al borde del territorio brasile?o es donde se han hallado los m?s serios indicios de yacimientos de diamante, un recurso que puede transformar la actividad econ?mica de la zona, hasta ahora dedicada al cultivo de supervivencia y al desmonte indiscriminado.

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Centroam?rica Recuper? al `Hijo Pr?digo'
?Qu? es eso que llaman TLC?
La escasa informaci?n sobre los pormenores del tratado hace dudar a los costarricenses sobre los alcances de la iniciativa. Para unos se trata de un negocio de pocos y para otros representa una ocasi?n propicia para incorporarse al primer mundo.
Jos? Antonio Pastor
Tiempos del Mundo
SAN JOS?. Luis Jim?nez es un zapatero que se levanta de lunes a s?bados apenas sale el sol, pues tiene que cruzar toda la ciudad en autob?s para abrir un peque?o local que tiene en el oeste de esta desordenada y cada vez m?s abandonada capital costarricense.
Hace unos d?as, Luis se enter? de la aprobaci?n del Tratado de Libre Comercio, TLC, entre Costa Rica y los Estados Unidos. Lleg? a su negocio y encendi? una peque?a radio. "Algo estaban comentando, pero en verdad, a m? no me afecta eso de tratados y firmas. Los que se ver?n beneficiados ser?n los de siempre. Los pobres seguiremos siendo pobres".
Un par de horas m?s tarde, un empresario dedicado a la producci?n de hongos comestibles se frotaba las manos mientras hac?a n?meros sobre lo que puede costarle una m?quina deshidratadora. "Con esto del TLC hay que estar un paso adelante, porque se trata de una oportunidad ?nica y quienes se pongan vivos, llevar?n las de ganar. Por eso mismo, mientras mi esposa analiza los tipos de hongos que podemos sembrar, yo estoy viendo la posibilidad de deshidratarlos para exportarlos a los Estados Unidos".
Ya sea como negocio de unos cuantos o como una oportunidad de oro para muchos, el final de las negociaciones con los Estados Unidos tiene a este pa?s de poco m?s de cuatro millones de personas en la mayor de las incertidumbres. La escasa informaci?n gubernamental, as? como los rumores sobre los peligros que conlleva un tratado de este tipo, han despertado las dudas.
"Ni siquiera los que creemos estar bien informados sabemos qu? pasar?. El gobierno ha manejado las negociaciones con un secretismo preocupante," afirma el analista pol?tico Francisco Barahona. "S?lo sabemos lo que los negociadores han querido que sepamos porque ni siquiera los diputados que deben ratificarlo tienen copia de todos los documentos".
Despu?s de un a?o de arduas negociaciones que incluso estuvieron cerca de dejar a los ticos al margen del acuerdo que hace unos meses firmaron los representantes de Nicaragua, Honduras, El Salvador y Guatemala, los grupos negociadores de ambos pa?ses llegaron a un consenso en cinco temas que hab?an quedado pendientes en las rondas con los dem?s pa?ses centroamericanos.
"Lo que se conoce es muy general, lo que hace muy sospechosa la letra menuda. Es cierto que habr? grandes beneficios, pero ?por qu? no ponen las cartas sobre la mesa para ver qu? m?s hay? La gente de la calle tiene su posici?n, pero la verdad es que ?sta responde a los medios de comunicaci?n, que la informa o desinforma. Los negociadores hablan de que el balance ser? muy positivo, pero tambi?n uno podr?a decir que la l?gica hace pensar que un pa?s tan peque?o como el nuestro no est? en condiciones de competir", coment? Barahona. El analista record? que muchas de las empresas que en alg?n momento se instalaron en M?xico, hoy se han trasladado a China en procura de mano de obra m?s barata.
"El gobierno deber?a de estar orgulloso de los resultados y exponerlos en una fuerte campa?a publicitaria para que la gente tenga m?s informaci?n y pueda formarse un criterio m?s s?lido, pero hasta el momento no hay nada," a?adi?.
Consultado sobre las posibilidades que tiene el tratado de ser ratificado por el Congreso antes de un a?o, Barahona explic? que no existen razones para que su tramitaci?n en el plenario tenga problemas.
"Parece que existe el apoyo necesario, pero ?qu? pasar? si la ciudadan?a no se conforma con lo aprobado? Tenemos antecedentes de dos proyectos que, ya aprobados, tuvieron que ser echados atr?s porque la gente se lanz? a las calles a protestar. Espero que la Administraci?n Pacheco entienda que debe empezar una fuerte campa?a de informaci?n que haga transparente todo el proceso que se avecina," concluy? el analista.
Alrededor del 53 por ciento de las exportaciones que realiza Costa Rica tienen por destino el pa?s del norte. Esto significa que aproximadamente la cuarta parte del empleo est? ligado de manera directa o indirecta con ese mercado.
Seg?n ha manifestado la jefa negociadora de la delegaci?n tica, Anabel Gonz?lez, eventualmente el TLC facilitar? aumentar las exportaciones y las importaciones, incrementar la inversi?n productiva y, sobre todo, generar buenos empleos. Pero tambi?n existen motivaciones de tipo pol?tico, como la contribuci?n que tendr? en consolidar la democracia con procedimientos que fomenten la transparencia, la no discriminaci?n y la certidumbre.
Salto comercial tico
Costa Rica es una econom?a peque?a de cerca de 4,1 millones de habitantes con un territorio de 51.900 kil?metros cuadrados y un Producto Interno Bruto cercano a los 16.886 millones de d?lares. El comercio exterior ha constituido un factor fundamental para su crecimiento y generar nuevas y mejores oportunidades econ?micas. En la actualidad, mantiene acuerdos bilaterales con M?xico, Chile, Rep?blica Dominicana y Canad?, as? como con los pa?ses del Caribe. La pol?tica de comercio exterior ha dado como resultado un crecimiento sustancial de las exportaciones, las cuales han aumentado a un ritmo del 11 por ciento anual durante los ?ltimos doce a?os. Las exportaciones tambi?n se han diversificado, pasando de una circunstancia en la que dos productos representaban un 65 por ciento del total exportado en 1985 (caf? y banano), a otra en la que ning?n producto exportado representa m?s del 17 por ciento. El crecimiento exportador ha constituido, por dos d?cadas, el factor m?s din?mico de la producci?n y el empleo costarricenses.u
Fuente: Ministerio de Comercio Exterior de Costa Rica.
Par?metros del Acuerdo
En agricultura, Costa Rica alcanz? cuotas que mejorar?n el ingreso de az?car, etanol y carne al mercado estadounidense.
En textiles, tambi?n se facilitaron las condiciones para exportar y conseguir telas de lana en otros pa?ses.
En los campos m?s sensibles, se acord? la apertura de los mercados de telecomunicaciones y seguros, en la actualidad monopolios muy cuestionados por los usuarios.
Finalmente, se decidi? establecer un nuevo r?gimen en lo referente a la legislaci?n sobre representantes de casas extranjeras y sus distribuidores.JAP

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Ex Presidente Afirma ser V?ctima de Campa?a Difamatoria
Menem niega tener cuentas en Suiza
Especial para TDM
El ex presidente argentino Carlos Menem neg? tener cuentas bancarias fuera de su pa?s y anunci? que va a denunciar a los responsables de la "campa?a difamatoria" de la que dice ser v?ctima.
"No hay ninguna cuenta, no existe absolutamente nada y estoy esperando el informe de Suiza porque este culebr?n no puede continuar", dijo Menem.
El juez Norberto Oyarbide est? investigando el patrimonio de Menem en Suiza y le ha citado a declarar el 15 de marzo. El juez tambi?n ha enviado exhortos a otros pa?ses para pedir informaci?n sobre si el ex presidente posee activos all?. Menem, que reside en Santiago de Chile junto a su esposa Cecilia Bolocco y el hijo de ambos, M?ximo Sa?l, responsabiliz? al presidente N?stor Kirchner, al ex mandatario Eduardo Duhalde y al ministro de Justicia, Gustavo Beliz, de la "campa?a difamatoria" de la que dice ser v?ctima.
"Cuando yo regrese a Argentina voy a hacer una denuncia en contra de mis difamadores", se?al? a "La Naci?n" sin especificar cu?ndo tiene pensado viajar a su pa?s, que no ha pisado desde noviembre. El objetivo de la campa?a es "destruir la figura de uno de los presidentes que m?s hizo por la Rep?blica Argentina, al punto tal que este Gobierno (el de Kirchner) est? todav?a viviendo de lo que nosotros acumulamos durante diez a?os", agreg?.
El hombre que gobern? Argentina de 1989 a 1999 y que intent? volver a la presidencia en el 2003, se declara "un perseguido pol?tico" y cree que en la misma situaci?n est? el ex presidente Fernando de la R?a, quien se encuentra en la mira de la justicia por la represi?n de las manifestaciones que precedieron a su renuncia, a fines de 2001, y por un caso de soborno a senadores.
"Este gobierno, adem?s de ser autoritario, se ha dedicado a perseguir a muchos pol?ticos en Argentina. Por ejemplo, al ex presidente De la R?a", indic?. Adem?s de quejarse, Menem atac? a los actuales gobernantes y pidi? que se investiguen sus fondos y bienes, especialmente qu? fue del dinero de la provincia de Santa Cruz que Kirchner, entonces gobernador, llev? al extranjero para evitar que fuera afectado por las restricciones al movimiento de fondos conocidas como "corralito" y la conversi?n a pesos de los dep?sitos a comienzos de 2002. EFE

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Desprestigio Preocupante del Estamento Militar
Ej?rcito sufre bumer?n de `mu?equeos' pol?ticos
En 10 a?os, las cifras de confianza institucional bajaron en forma ins?lita de 71 puntos a 20. Afect? la insubordinaci?n de los coroneles en el 2000 y actualmente las denuncias por tr?fico de armas y los costos en el Congreso por limpiar su imagen.
Christian Espinosa B.
Tiempos del Mundo
UITO. La Fuerzas Armadas (FF.AA.) en Ecuador est?n tan d?biles que sus esfuerzos por limpiar su imagen se han ido en su propia contra.
Una de las instituciones de mayor prestigio en el pa?s paga as? el precio de contaminarse pol?ticamente. En este terreno, se demostr? que la mejor defensa no es el ataque. La instituci?n militar, con el apoyo del Gobierno, enfil? vanamente sus armas contra el diputado de la oposici?n Guillermo Haro para tratar de levantar la inmunidad del legislador por sus denuncias de tr?fico de armas y la explosi?n de un polvor?n.
El supuesto remedio de que el legislador responda ante la justicia por atentar contra el honor de las FF.AA. fue peor que la enfermedad. La ciudadan?a ha visto con estupor c?mo la instituci?n se ha visto envuelta en pr?cticas completamente inusuales a su naturaleza por conseguir una mayor?a en el Congreso para desarmar a Haro.
"Las FF.AA., que antes eran relativamente aut?nomas, ahora se han visto afectadas por el desprestigio de las pr?cticas del clientelismo o prebendas t?picas de los pol?ticos civiles", explica el analista pol?tico, Adri?n Bonilla.
Es a partir del golpe a Abdal? Bucaram y luego de Jamil Mahuad que las FF.AA. se ven involucradas en temas pol?ticos. Parad?jicamente, en aquel entonces la instituci?n no tuvo ninguna intenci?n de entrometerse. Era la misma sociedad la que casi le rog? que fuera dirimente en la ca?da de Bucaram. As? de grande era la confianza de la ciudadan?a, sin imaginar el futuro desprestigio que se avecinaba. Poco a poco, la falta de claridad en la misi?n de las FF.AA. se hizo evidente.
"Tras el fin de los conflictos territoriales con Per?, las FF.AA. no han logrado redefinir bien esa misi?n", precisa Bonilla. "Una muestra de ello es c?mo la instituci?n est? superponiendo roles con la Polic?a", en la frontera Norte y por los efectos del Plan Colombia. La erosi?n de la institucionalidad militar se torn? inevitable. Eso sin contar los momentos graves de insubordinaci?n de los coroneles, entre ellos el hoy presidente Lucio Guti?rrez.
El resultado ha sido cierto grado de politizaci?n de los mandos, que comienza por arriba y tarde o temprano afecta a toda la instituci?n. Estos tejidos pol?ticos afectaron las capacidades de las FF.AA., que hoy ya no pueden procesar eficientemente su defensa. "Es un problema de debilidad pol?tica que se expresa en esta incapacidad para procesar el disenso", dice Bonilla. La incursi?n del Gobierno en el tema, ayudando en los cabildeos, dio m?s elementos para las dudas. ?Ser? que el presidente mira a las FF.AA. como su verdadero partido pol?tico, en la misma l?nea que lo hizo Alberto Fujimori?, se pregunta el editorialista del diario El Comercio, C?sar Mont?far.
Lo cierto, seg?n el general Jos? Gallardo, ex jefe del Comando Conjunto de las Fuerzas Armadas, es que cuando la instituci?n se aleja de sus deberes, entonces empieza la ola de desprestigios. "Lo fundamental es trabajar por la reconstrucci?n de los valores y principios ?ticos y morales", afirma. "Trabajar en cambios a la justicia militar para que se vuelva ?gil y completamente transparente en la investigaci?n", es otro de los retos. "Un mejor favor al honor institucional hubiera sido una pol?tica clara de transparencia e informaci?n en estos casos", confirma C?sar Mont?far.
"Reprofesionalizarse, replegarse a los cuarteles y dedicarse a sus tareas militares espec?ficas y aislarse del poder de los civiles y de las luchas cotidianas de la pol?tica", es la visi?n final del catedr?tico Adri?n Bonilla.

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El Oficialismo en Desventaja
Alem?n, candidato de Moscoso
El ex canciller Jos? Miguel Alem?n no renuncia a su car?cter de candidato oficialista y se propone continuar la obra llevada a cabo por la presidenta Mireya Moscoso, que en agosto pr?ximo concluye su mandato de cinco a?os.
Rafael Candanedo
Tiempos del Mundo
C IUDAD DE PANAM?. Alem?n, de 47 a?os y con un doctorado otorgado por la Universidad de Tulane, EE.UU., presidi? una concentraci?n multitudinaria en la c?ntrica Plaza Porras, de la ciudad de Panam?. Seg?n los seguidores del ex canciller, se reunieron 150 mil simpatizantes. Antes de esa concentraci?n, los miembros de la Convenci?n Nacional del Partido Arnulfista (PA) en el poder, hab?an oficializado la n?mina presidencial que encabeza Alem?n y que integran, adem?s, Guillermo Ford, ex ministro y ex embajador en Washington, y el abogado An?bal Galindo.
Endilg? a su contrincante Mart?n Torrijos el mote de "privatista" y le acus? de tener en mente arrebatar de las manos del Estado el Idaan, a cargo de los servicios de alcantarillados y agua potable, y de la Caja de Seguro Social (CSS). Todos los candidatos niegan cualquier inter?s en privatizar esas dos entidades estatales.
La respuesta de Mart?n, de 40 a?os y que estudi? dos licenciaturas en la Universidad de Texas, no se hizo esperar. El candidato oficialista "se escuda detr?s de la falda" de Moscoso.
La presidenta Moscoso no hace nada para tomar distancia de Alem?n, sino todo lo contrario. "Voy a hacer campa?a" en favor de Alem?n y de los candidatos oficialistas para otros cargos, asegur? la gobernante.
Torrijos lidera las encuestas de intenci?n de voto con casi el 50 por ciento, mientras que Alem?n ronda el 12 por ciento. El candidato y ex presidente Guillermo Endara, de 66 a?os, supera el 30 por ciento.
Los analistas calculan que el candidato electo --ya sea Alem?n o Endara-- deber? mantener un duelo con Torrijos en la etapa final de la campa?a para las elecciones del 2 de mayo pr?ximo. Y Alem?n, por ser oficialista, est? en desventaja, pues debe cargar con el desgaste gubernamental.
Endara y Alem?n est?n enfrascados en esa disputa, al reclamar para sus campa?as la figura del ex presidente Arnulfo Arias, cuya segunda esposa fue Moscoso. La presidenta se aperson? ante el Tribunal Electoral para demandar el retiro de la figura de Arias de unos anuncios propagand?sticos de Endara.
"Endara debe utilizar en su publicidad la foto de su esposa, Ana Mae, y no la del doctor Arias," exhort? Moscoso.
Endara sali? en defensa de Ana Mae, y aunque se?al? que por respeto no le responder?a a la mandataria, s? record? la admiraci?n que le tuvo a la primera esposa de Arias, Ana Matilde Linares.
Derechos Reservados ? Noticias Panam?rica

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Venezuela, en la hora de la verdad
El pr?ximo 13 de febrero, el Consejo Nacional Electoral de Venezuela dir? si la oposici?n alcanz? o no el n?mero de firmas exigidas constitucionalmente para convocar un referendo en que se pida la revocaci?n del mandato del presidente Hugo Ch?vez. Se juegan las ?ltimas cartas. La estrategia presidencial ha consistido en robustecer su apoyo al pueblo, ofreciendo el oro y el moro a trav?s de diversos programas de gasto p?blico. La de la oposici?n, en acrecentar la campa?a de desprestigio contra el gobierno argumentando el mayor caos social y deterioro econ?mico de su historia.
M?s que la oposici?n y el propio partido presidencial, juegan un papel determinante el Consejo Electoral y la comunidad internacional. Los rectores del Consejo deben estar conscientes de que el futuro pol?tico de Venezuela recae sobre sus hombros, y deben garantizar que no habr? trucos ni violaciones a la Constituci?n por parte de la oposici?n o del gobierno.
La comunidad internacional debe vigilar con lupa el desenlace de este proceso. El ex presidente estadounidense Jimmy Carter ha expresado su confianza en que Venezuela sortear? su crisis democr?ticamente, aunque alert? de divisiones entre los opositores al gobierno de Hugo Ch?vez en cuanto a una decisi?n electoral. La Organizaci?n de Estados Americanos, tras solicitar acceso al proceso de revisi?n de firmas, hizo un llamado a las dos partes para que se comprometan a aceptar lo acordado. A?n as?, el proceso no tiene la claridad que suger?a al comienzo. Crecen de nuevo los rumores sobre la permanencia en el poder de Ch?vez, aun cuando haya un resultado adverso en el referendo. Tambi?n se habla p?blicamente del temor de que algunos opositores desconozcan un fallo favorable a Ch?vez y llamen a una insurrecci?n, hecho que sumir?a al pa?s en una crisis de violencia y confusi?n mayor a la actual.
El ambiente se ha tornado tenso las ?ltimas semanas en que ambos bandos --seguidores y opositores del mandatario nacional-- se han lanzado de nuevo a las calles con arengas y mutuos insultos. Unos hablan de fraude; los otros de legitimidad. Lo cierto es que ha llegado la hora de la verdad y ambas partes deben respetar lo pactado. Esto es, acatar las determinaciones del Consejo Nacional Electoral y ajustarse a las normas vigentes de la constituci?n venezolana.

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Venezuela, in the hour of truth
On February 13, the National Electoral Council of Venezuela will determine whether or not the opposition has obtained the number of signatures required by the constitution to convoke a referendum for the recall of president Hugo Ch?vez. The last trump is played. The presidential strategy has sought to strengthen people's support by promising the moon and the stars through various public-expenditure programs. The opponents' strategy, meanwhile, has been to intensify its discrediting campaign against the government because of the ongoing social chaos and the worst economic deterioration in its history.
More than the opposition and the president's party itself, both the Electoral Council and the international community have a decisive role to play in this process. The Council officials should keep in mind that Venezuela's political future rests on their shoulders and therefore must guarantee against any trickery or constitutional violation by either the opposition or the government.
To that end, the international community must watch the outcome of this process through a magnifying glass. Former U.S. president Jimmy Carter has upheld his belief that Venezuela will sort out its crisis democratically, but has alerted to the split existing among Ch?vez' opponents over the electoral outcome. Besides requesting access to the signature-monitoring review, the Organization of American States has called upon the two sides to commit themselves to accepting the results.
Even so, the process is not as clear as it seemed in the beginning. Rumors are escalating about Ch?vez' remaining in power even if the referendum is adverse to him. There is also talk about the fear that some opponents might choose to ignore a decision favoring Ch?vez and trigger an insurrection, a recourse that would plunge the country into a crisis of violence and engender even greater confusion.
The atmosphere has become tense over the past few weeks as both sides --president's supporters and opponents alike-- have come out on the streets again hurl-ing harangues and insults at each other. Some talk of fraud; others of legitimacy. What is certain is that the hour of the truth has come and both parties should respect what they have agreed upon. That is: to abide by the National Electoral Council's determination and stick to the stipulations of the Venezuelan constitution in force.
Translated by: Mar?a Isabel Camacho

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Venezuela Devalues Bolivar, Fines BellSouth on Taxes (Update5)
Feb. 9 (Bloomberg) -- Venezuelan President Hugo Chavez devalued the nation's currency 17 percent against the dollar and fined a BellSouth Corp. unit for failing to pay taxes, as he seeks to boost revenue to fund social spending.
The measures will assist Chavez in his bid to increase funds for farming, medicine and schools ahead of a recall vote that his opponents are demanding, said analysts such as George Grayson at the Center for Strategic and International Studies in Washington. Chavez's foes say the former lieutenant colonel should step down before his term expires in 2007 after driving the oil-exporting country into its deepest recession on record last year.
``It's political expediency and a demagogic act that is designed to get Chavez through a rough patch in his tenure,'' said Grayson, an adjunct fellow at the center.
The government set the bolivar's exchange rate at 1,918 against the dollar, a year after fixing it at 1,598 and limiting purchases of U.S. dollars to stem an outflow of foreign currency. By weakening the currency, the government will increase the amount of bolivars it raises from oil exports, which accounted for 48 percent of revenue last year. Venezuela is the world's fifth-largest supplier of crude.
In addition, the fine against TelCel CA, Venezuela's largest cellular telephone company, is a ``warning sign'' against other companies as Chavez pursues his so-called Zero Evasion Plan announced last year, said Irene Costa, an analyst at Banco Mercantil CA in Caracas.
Budget Gap
Chavez is trying to boost spending without swelling the budget deficit, which Costa expects will total 4.2 percent of gross domestic product this year after ending 2003 at 5.1 percent. That compares with a budgeted deficit in Mexico this year of 0.3 percent of GDP and 2.5 percent of GDP in neighboring Colombia.
A 25 percent surge in the international price of oil has also helped fund Chavez's spending. The 2004 budget calls for a 21 percent increase in spending to 49.9 trillion bolivars as Chavez seeks to quicken the recovery from recession.
The government announced the devaluation in the Official Gazette. Finance Minister Tobias Nobrega didn't return a phone call seeking comment on the decision.
The devaluation will enable the government to purchase more bolivars for every dollar. Street sellers are buying dollars at an even weaker exchange rate in Venezuela -- about 3,000 bolivars per dollar.
Faster Inflation
Venezuela's benchmark 9 1/4 percent bond due 2027 fell 0.85 cent on the dollar to 89.5, boosting the yield to 10.46 percent at 4:05 p.m. in New York, according to J.P. Morgan Chase & Co.
The devaluation may quicken inflation -- which was 26.6 percent in the 12 months through January -- by driving up the cost of imported products, said Christian Stracke, head of emerging-market research at New York-based CreditSights Inc. The effect may be limited as many companies already pay street exchange rates because they don't have access to dollars at the official exchange rate, Stracke said.
AES Corp. Chief Financial Officer Barry Sharp said in an interview last week that AES's local unit, CA La Electricidad de Caracas, which is Venezuela's largest publicly-traded power company, has bought dollars in the street market.
The government is allowing companies to buy dollars only through approval from the nation's foreign exchange commission. The government said last week it sold less than half the dollars authorized by the foreign exchange commission last year.
Bond Sale
The government had indicated last year it planned to devalue the currency, saying it based its 2004 budget on an average exchange rate of 1,920 bolivars per dollar.
``This improves their capacity to pay their domestic debt because it reduces the overall value of that debt'' in dollar- terms, said Juan Pablo Chavez, an analyst with BBVA Securities in New York. ``This also improves the revenue side of their budget.''
BBVA's Chavez said he expects the government will sell a dollar-denominated bond to local investors to help meet demand for dollar-based assets and prevent the bolivar from weakening further in the street market. The government sold $2.5 billion of dollar-denominated bonds to local investors last year.
The government last year unveiled a plan to boost tax collection and reduce evasion. Venezuela's tax agency in November closed 324 companies for as long as 72 days.
30 Days
TelCel has 30 days to pay a fine of 38 billion bolivars for failing to pay 20 billion bolivars or appeal the ruling, Conatel said in a statement.
In a statement, TelCel denied it's evading its tax obligations and said its legal department is weighing its options.
``This is because of a difference in criteria and has nothing to do with evasion,'' TelCel Vice President Haydee Cisneros said in the statement.
To contact the reporter on this story:
Alex Kennedy in Caracas, akennedy@bloomberg.net
To contact the editor of this story:
Laura Zelenko at lzelenko@bloomberg.net
Last Updated: February 9, 2004 16:04 EST
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Plaza? Louvre? Boca Accord Never Had a Chance: Caroline Baum
Feb. 9 (Bloomberg) -- We'll always have Paris. New York is one helluva town. But Boca?
Memorable moments in the history of the Group of Seven industrialized nations occurred at the Plaza Hotel in 1985, when the participants decided the dollar was too strong, and in the great halls of the Louvre Museum in 1987, when they decided the dollar was weak enough.
Can you imagine, 20 years from now, economic historians referencing the outcome at Boca Raton -- a city whose name translates literally from the Spanish as ``mouth mouse'' -- with the same degree of gravitas?
Finance ministers and central bankers from the G-7 descended on the Boca Town Resort and Club last weekend with different agendas. The slow-growth Europeans, unhappy about the impact of the euro on their export-dependent economies, were hoping for some help from the U.S. in stalling the rise in the euro.
The euro is up 18 percent against the dollar in the past 12 months and 46 percent in the past two years.
The Bush administration, faced with tepid job growth more than two years after the recession ended and less than nine months before voters go to the polls, is happy for any help it can get from a weaker dollar, via increased demand for exports. Real exports rose 19 percent in the fourth quarter following a 9.9 percent third-quarter gain.
Coordinated Mush
While there's always much ado about the choice of words in the G-7 communique -- almost as much as the fuss over the Federal Reserve's use of ``considerable period'' versus ``patience'' -- it's hard to infer any action from the statement released on Saturday.
After reaffirming that ``exchange rates should reflect economic fundamentals,'' surely a statement of the obvious, the G-7 said ``excess volatility and disorderly movements in exchange rates are undesirable for economic growth.''
Aha! This was interpreted in some quarters as some kind of major breakthrough instead of a bone to keep the Europeans happy so they don't have to address high structural unemployment and dismal growth through real policy changes.
In terms of the reinsertion of a warning against ``excess volatility,'' which has been MIA in the G-7 communique since April 1999, few traders and investors would describe the dollar's almost uninterrupted slide over the past two years that way.
They might call it a one-way trade, a long-overdue correction or the beginning of a multiyear currency adjustment. They would not call it volatile.
Option Pricing
And as for a disorderly decline, there's not much evidence of it reflected in the price investors are willing to pay for insurance, according to Daniel Katzive, a foreign-exchange strategist at UBS Warburg.
The price of options on the euro-U.S. dollar exchange rate ``has climbed, but it's nowhere near the extremes of 2000, when the European Central Bank was intervening to support the euro,'' Katzive said. ``The level of daily changes implied by the price of insurance is not consistent with a disorderly market.''
There are other ways to measure volatility, such as the effect currency movements have on other asset markets, Katzive said. Looking at the performance of U.S. stock and bond markets, ``it's just not happening,'' he said.
In other words, the statement was much ado about words and little to do about action. The ECB may choose to intervene if the euro breaks through $1.30, Katzive said, but it will probably be acting without the U.S.
Babble
To avoid any confusion created by the communique, finance ministers were available for instant analysis, interpretation and disclaimers following the meeting.
U.S. Treasury Secretary John Snow reaffirmed the U.S. strong- dollar policy. Japanese Finance Minister Sadakazu Tanigaki said the call for more flexibility wasn't aimed at Japan. German Finance Minister Hans Eichel said currency traders should note the G-7's ``unanimity.''
Unanimity? ``The word `agree' does not appear even once in the entire communique,'' said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York. ``You cannot have an agreement unless everyone agrees.''
To make his point, Weinberg resuscitated the language from the 1985 Plaza Accord, where the participating finance ministers and central bankers agreed to something -- to implement policy actions so that exchange rates ``better reflect fundamental economic conditions'' -- and agreed to do something to foster it.
Real Language
Instead of talking in meaningless code, the participants determined that ``some further orderly appreciation of the main non-dollar currencies against the dollar is desirable.'' And they stood ready ``to cooperate more closely to encourage this.''
``Where were the big words this time?'' Weinberg wondered. ``Where was the statement that the U.S. current-account deficit is a problem, that the dollar needs to weaken, and rates need to fall in Europe in order to achieve it?''
I'm never sure why everyone makes such a big deal over these G-7 gatherings. Countries act in their own self-interest. Often those interests are mutual, which creates the impression of coordinated decision-making and action.
Right now they're not. Nothing changed at Boca. The dollar will continue to fall. The Japanese will continue to intervene. The Europeans will continue to worry. And the U.S. will continue to quietly condone the dollar's slide.
If the G-7 wanted a serious outcome, they should have picked a serious city.
To contact the writer on this column:
Caroline Baum in New York at cabaum@bloomberg.net.
To contact the editor of this story:
Bill Ahearn at bahearn@bloomberg.net.
Last Updated: February 9, 2004 11:50 EST
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Eggs, Cars, Paintings -- The Rich Smell Inflation: Matthew Lynn
Feb. 9 (Bloomberg) -- It doesn't matter how bedecked in jewels they might be. Nor how much history is contained within their shells. A hundred million dollars would be a lot to pay for some eggs.
Unless, that is, you happen to be a Russian billionaire.
Last week, Viktor Vekselberg, one of Russia's richest men, bought the world's largest private collection of Faberge Imperial Easter Eggs from the family of Malcolm S. Forbes. The nine eggs were scheduled for auction at Sotheby's Holdings Inc. and were expected to fetch $70 million to $100 million. The actual sale price wasn't disclosed, but there were more likely to be nine, not eight, digits on the check. Even for buying in bulk, the Forbes family probably didn't want to give Vekselberg a discount.
An isolated individual with an exaggerated sense of national pride? That would be one plausible explanation. But it's also possible to see that purchase as part of a global trend that has been gathering force over the past 12 months.
Right around the world, luxury alternative investments are going through a boom.
Eggs are just one example. The art business is going crazy. Vintage-car prices are rising. Diamonds are getting more expensive. Football clubs -- a rougher, but equally precious, item -- are turning into playthings for men whose egos are even bigger than their wallets.
There are some clues there to what the rich are up to with their money. And there are some lessons as well about the state of the global economy.
Art Auctions
Art and antiquities are leading the way. For the last year, auction records have been set and broken. In November, Sotheby's sold a Willem de Kooning abstract painting owned by billionaire Mitchell Rales for $11.2 million, and a Gustav Klimt piece sold for $29.1 million, during a record-setting sales period.
Overall, an index of the most expensive contemporary artists including Robert Rauschenberg and Damien Hirst climbed 54 percent during the past four years, according to Art Market Research, a London-based data firm.
Music is in demand as well. In December, a handwritten manuscript of one of Ludwig van Beethoven's last string quartets fetched 1.18 million pounds ($2.19 million) at an auction in London, while earlier last year a working version of his Ninth Symphony sold for 2.13 million pounds.
Vintage Cars
Prices of vintage cars are picking up as well. In February last year, Christie's International Plc secured a price of 1.68 million euros ($2.14 million) for a 1932 Bugatti T55 sports car. The latest Barrett-Jackson Classic Car Auction in the U.S. broke all records, surpassing the previous best year, 1990. The sales included a 1938 Lincoln Zephyr V-12 Coupe, which cost its new owner a tidy $432,000.
True, car prices have a long way to go. According to Christie's Web site, the highest price ever paid for a car was for a 1931 Bugatti Type 41 Royale by Kellner, which sold for 5.5 million pounds in November 1987. But the trend is up.
Meanwhile, in London, another Russian billionaire, Roman Abramovich, has been creating a stir with his lavish spending on football. He paid almost 60 million pounds to get control of Chelsea football club, and has spent about 111 million pounds to sign up 11 players for the club, Bloomberg data shows.
And diamond prices rose 10 percent last year, according to De Beers, the world's biggest diamond company, with prices still going up. ZAO Alrosa, which produces a fifth of the world's uncut diamonds, said sales surged 22 percent in 2003.
Luxury Investments
What the rich are doing with their cash is always interesting, and not just for voyeurs of conspicuous consumption. The rich, pretty obviously, are smarter with money than most of us. Where they're investing now, the rest of the world may well be investing soon.
The boom in luxury investments tells us two things.
The first is that there is a lot of spare cash floating around. Interest rates are low around the world, the global economy is recovering, and stock markets have been rallying. The rich are on a roll.
But they may also be nervous about traditional, mainstream investments.
No doubt, a lot of their money is still going into stocks, bonds, hedge funds and private-equity deals. But a significant chunk of it is clearly being diverted to investments that are more entertaining, and may be more profitable as well.
A trend of investing in luxury collectibles is a sign of nervous, not optimistic, times.
Inflation Fears
It suggests a fear that inflation may make a sudden return. If prices start surging globally, an oil painting may well be the best place to keep your cash parked.
And it suggests that investors are worried that the returns from productive companies may turn out to be dismal. Luxury, trophy assets have a scarcity factor that make them valuable. The world is awash with mass-produced goods -- and the rich may be signaling that there isn't much money to be made from such products.
A Faberge egg may not hold its value more than any other asset you buy. But at least it looks nice when you put it in a glass case, and you'll know that you took home a national treasure.
And if the world heads for a period of high inflation and low growth -- which is what this boom in luxury assets implies -- it might turn out to be a good investment as well.
To contact the writer of this column:
Matthew Lynn in London, or matthewlynn@bloomberg.net
To contact the editor of this column:
William Ahearn, or
at bahearn@bloomberg.net
Last Updated: February 9, 2004 03:35 EST
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Pensions Bill on Hold As Dems Demand Say
Feb 6, 2:33 PM (ET)
By JIM ABRAMS
(AP) The Senate, acting with rare election-year concord, passed a bill Wednesday, Jan. 28, to reduce by...
Full Image
WASHINGTON (AP) - Legislation that promises companies billions of dollars in pension relief has sailed through both the House and Senate but is now caught up in a separate dispute - what Democrats say is an assault on their congressional minority rights.
The Senate last week passed a bill that would reduce by $80 billion the money that employers have to pay into their defined benefit pension plans this year and next. The Senate bill also would provide $16 billion in relief over the two years to airlines and others required to make catch-up payments to underfunded plans.
Since the House passed a somewhat different version last fall, commonly the next step would be a House-Senate conference to work out a compromise that both chambers would then approve and send to the president. But Senate Democrats have blocked Senate Majority Leader Bill Frist from naming conferees, protesting what they say is a pattern of being shut out of the negotiating process.
"I have no desire to hold the pension bill," Senate Democratic leader Tom Daschle said this week. "There is an urgency to this legislation, but we will not, on any legislation this year, tolerate the unacceptable experience we had on several occasions in the first session of this Congress."
Daschle was responding to GOP charges that he was obstructing legislation direly needed by companies facing financial ruin because of the high cost of pension plans.
"Senator Daschle's refusal to move forward on this bipartisan pension proposal raises serious concerns about his commitment to protecting the retirement security of American workers," said Rep. John Boehner, R-Ohio, chairman of the House Education and the Workforce Committee.
Democrats are particularly angered by two huge bills that House and Senate Republicans wrote last year with little or no input from Democrats.
Only two moderate Senate Democrats, and no House Democrats, took part in lengthy negotiations on the Medicare prescription drug bill that passed, and Democrats said they were completely locked out of talks on the energy bill that eventually failed in the Senate.
Rep. Steny Hoyer of Maryland, the House's second-ranked Democrat, has repeatedly pressed Republicans for what he says is the undermining of the democratic process. "I simply observe that that is shutting out the representatives of 130 million Americans on our side of the aisle to give their perspective."
But House Majority Leader Tom DeLay, R-Texas, in a floor exchange with Hoyer, said Republicans were equally frustrated when they were the minority. He said the process was open to those willing to work with the majority, but "you do not waste a lot of time with people that do not want a bill."
House-Senate conferences, a tradition since the 18th century, have often been a source of contention. During the New Deal, for example, liberal Democrats sought to exclude conservatives, including Democrats, from the list of conferees named by House and Senate leaders.
"It often backfires when either one side or the other perceives a conference as being held unfavorably to them," Senate historian Donald Ritchie said.
That happened last year when the House and Senate both passed an aviation bill that barred the privatization of air traffic controller jobs but Republican conferees, under pressure from the White House, rewrote it to include some shifts to the private sector.
Angry Democrats, joined by some Republicans, forced the bill back into conference and eventually the administration gave ground, agreeing to a one-year moratorium on privatization.
Daschle argued that the pensions bill could still go forward without a conference: The Senate could send its bill to the House, allowing it to either accept the Senate version or further amend it. Or there could be "pre-conferencing," informal talks among staff and members to iron out differences before a formal conference is held.
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How to Sink the Tech Comeback
By Lawrence B. Lindsey
Posted: Monday, February 9, 2004
ARTICLES
Wall Street Journal
Publication Date: February 9, 2004
Now that the Nasdaq has closed consistently back above 2000 it appears that much of the healing process from the collapse of the 1990s technology bubble is finally behind us. Sound macroeconomic policy prevented the resulting wealth destruction from producing a downward economic spiral like that of the '30s.
Going forward we must adhere to sound microeconomic policy as well if America is to retain its global leadership in technology. After the initial speculative frenzy and its collapse, the successful financing of new industries over the longer term requires a more stable environment. Clearly, competitive pressures are intense both within the existing market and from even newer technologies. But an equally important risk comes from public policy that is subject to a variety of political pressures to control the emerging market environment.
As a result, bad public-policy choices, especially in antitrust, can easily destabilize the new financial arrangements in the market. Today, there are four key factors that policy makers must take into consideration if we wish to preserve the newly found stability of our capital markets.
First, public policy should respect the underlying franchise value of the recently created firms and industries. Although the Nasdaq bubble would have burst in any event, the actual timing of its collapse coincided with two public policy events that cast doubt on these franchise values. First, the antitrust division of the Justice Department announced its Microsoft suit and suggested remedies that many felt threatened its business model. Although some of Microsoft's competitors would supposedly have benefited from the suit, they soon found that their stock values plummeted as well as the viability of the industry was questioned.
Several weeks later, President Clinton joined Prime Minister Blair in declaring the human genome to be the common heritage of mankind. The biotech sector soon saw its equity values collapse too. If the human genome belongs to all of mankind, what is the value of patents on products developed from human-genome research?
Today, regulators must show more forbearance regarding policies that would harm the market value of the technology industry. As the economy continues to strengthen, more mergers will take place as the natural process of creative destruction continues. We have seen consolidation occur in a number of technology fields, including computer hardware and media players, and there is more consolidation planned in fields like business application software. The prospect of buyouts, in fact, is part of the market value of all technology firms. But if this route for business development is closed, the market value of technology firms will drop.
Of course, regulators must vigorously enforce laws that prohibit anticompetitive conduct. But whether emerging market structures will allow anticompetitive conduct in the future based on established rules of market concentration is a purely hypothetical exercise. It is far more important to focus on the reality of performance than the theoretical possibilities of what might happen based on structure.
Second, market pricing is underpinned by the development of effective shareholder control. The regulatory environment should defer to shareholder decisions as much as possible regarding corporate control. The shareholders of an industry that has just seen its market value decimated are primarily focused on preserving what value is left and finding a way to rebuild. Both sustained economic growth and the long-term competitiveness of our high-tech industries requires that these shareholders succeed.
In the beginning, high-tech companies are owned chiefly by founders and a few key sponsors. As the market value rises, the shares are distributed more widely to a public that buys the shares because they like the concept the firm presents or the momentum of its stock price. These shareholders often back the founders in establishing poison pills that limit the possibility of a buyout because they believe they are betting on a winner and don't want to be part of some other organization.
After the market collapses and these shareholders liquidate, professional financial managers take over seeking value in stocks that have been knocked down too far. These value-oriented investors have no particular attachment to the original business model or its founders and are simply seeking to make a profit by acquiring undervalued assets and restructuring them in a way that will allow their resale to higher bidders. This process is key to rationalizing an industry and making it viable in the long term. Public-policy actions that inhibit this process--by blocking mergers and takeovers on allegedly competitive grounds or by overly protecting the poison pill arrangements of the initial founders--can do substantial damage to the long-term viability of the high-tech marketplace.
Third, public-policy must recognize that the competitive threats to the high-tech industry are numerous and by themselves sharply limit the scope for anticompetitive conduct. This is particularly true in our highly globalized market. A famous historical example from the late 1960s and early '70s was the antitrust position that General Motors could not exceed a 60 percent market share of U.S. auto production. This position was quickly made ridiculous by the invasion of Japanese cars. Similarly, the once dominant positions of IBM and Xerox quickly eroded. The reality is that the extreme amount of competition in the global market is the best check to anticompetitive business practices.
Finally, mergers can also be a way to increase competition. If two medium-size firms merge, they may end up better positioned to challenge the largest firm in the market. Leveraging new economies of scale is a way for smaller firms to reclaim market share lost to the largest firms.
It is somewhat ironic that, after all the high-tech equity market has been through, one of the greater threats to its overall valuation is not technological or even competitive, it is public policy. The months ahead will determine whether the recent rise in the Nasdaq reflects a new level of maturity for these emerging industries, or whether it will disappear because public-policy makers are unwilling to allow time for these industries to fully recover from the excesses of the '90s.

Lawrence B. Lindsey served as assistant to the president for economic policy under President George W. Bush and is a visiting scholar at AEI.
AEI Print Index No. 16326
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Enabling Institutional Investors to Play a More Effective Role in Corporate Governance Print Mail

Posted: Monday, February 9, 2004

PAPERS AND STUDIES
Shadow Financial Regulatory Committee briefing (Washington)
Publication Date: February 9, 2004
Statement No. 204
For Information Contact:
Charles W. Calomiris
(202) 862-7151
Randall S. Kroszner
(202) 862-5878
The SEC's recent proposals on "Shareholder Access" have generated an unusually large number of comments. As detailed in Statement No. 199, the Shadow Financial Regulatory Committee believes that the current SEC proposals would produce few, if any, benefits and have potential downside risks. Those proposals concern the ability of significant shareholders, under certain narrow circumstances, to include their candidates for directors in the proxy materials distributed to shareholders by a company. Rather than proposing a new set of complex regulations, the SEC, together with Congress and the Administration, should focus reform efforts on reducing barriers for the involvement of significant shareholders in the corporate governance of publicly traded firms.
The objective of any reforms of the corporate governance system should be to improve shareholder value. Re-examining the role that significant shareholders (institutional investors) can play in the governance process under current rules is important. In many cases, large institutional investors, such as index funds with large holdings in portfolio firms, do not have the option simply to "vote with their feet" by selling their holdings of firms that are underperforming. Particularly in these circumstances, it is valuable to investigate whether the current legal and regulatory system discourages useful involvement of institutional shareholders in monitoring and disciplining management.
When designing regulatory reforms to achieve meaningful and constructive engagement of institutional investors in the corporate governance of their portfolio firms, the SEC should begin by asking why institutions have not been more active in the past. If active involvement by blockholding institutions in corporate decision making is such a good idea, why haven't institutional investors pursued it more?
The Committee has identified several possible explanations, each of which points in a different direction for reformers seeking to increase institutional involvement in corporate governance.
First, it may be that regulatory limitations on the amount of stock in any one corporation that an institution is permitted to hold may reduce the incentive of an institutional investor to incur the costs of exercising a voice over corporate governance. These limitations apply to classes of institutional investors under various statutes, including state laws governing insurance companies, the Investment Company Act of 1940, banking laws, and financial holding company regulations.
Second, institutional investors may hesitate to play a role in corporate governance due to either regulatory limitations on their actions with respect to portfolio firms or legal risks that reduce their incentive to play an active role. Banks, for example, can face equitable subordination or lender liability when they are actively involved in corporate governance of debtor firms encountering distress. Also, any institution that places one of its own employees on the board of a company faces potential liability for insider trading or suits brought against that director. If these legal and regulatory impediments exert an important chilling effect on corporate governance by institutional investors, it might be appropriate to remove or reduce some of these limitations, or encourage market-oriented reductions of legal risks through mutual insurance of those risks by institutional investors.
Third, it may be that involvement by institutional investors in corporate governance has been hampered by difficulties in coordinating the behavior of several blockholding institutions holding shares in the same firm. A coordinated effort of many institutional investors, who together have a significant stake in a firm, might be much more effective as a means of exerting influence than the actions of one institution acting alone. Coordination, however, can be costly for two reasons: physical coordination costs and legal impediments or risks to coordination. It is possible that some beneficial coordination is avoided out of fear that this would result in potential legal problems for institutional investors (e.g., through antitrust laws or section 16(b) rules governing short swing trades).
Fourth, it may be that the Williams Act and anti-takeover devices have weakened the incentive for institutional investors to play an active role in corporate governance. After all, the primary roles of institutional investors in corporate governance are occasional interventions to support a hostile takeover or to replace a dysfunctional board of directors, rather than to play an ongoing role in supervising day-to-day management decisions. If anti-takeover devices insulate management from the threat of such discipline, then institutional investors may conclude that there is little point to taking an active role in corporate governance. Here, the policy solution would focus largely on changes in law and regulation that would facilitate market discipline through takeovers.
Finally, it is possible that the lack of involvement in corporate governance by institutional investors is the result of agency problems between ultimate stockholders and the institutional investors that manage their shares. If pension fund and mutual fund managers face weak incentives to maximize the value of the portfolios they manage, they may choose not to be as diligent as they should be in improving corporate governance in portfolio firms. To the extent that agency problems in money management are an important problem, policy makers should consider ways to improve money managers' incentives.
The Committee believes that rather than attempt to enhance shareholder democracy by tinkering with shareholder voting rules, policymakers should focus on enhancing the ability of institutional investors to affect corporate governance.
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Toward a Single Transatlantic Market in Financial Services
Posted: Monday, February 9, 2004
PAPERS AND STUDIES
Shadow Financial Regulatory Committee briefing (Washington)
Publication Date: February 9, 2004
Statement No. 203
For Information Contact:
Kenneth Dam
(773) 702-0216
Richard Herring
(215) 898-5613
Hal Scott
(617) 495-4590
For several years the U.S. government has carried on an Informal Financial Markets Dialogue with the European Commission in order to narrow the differences between the different financial regulatory systems. The Shadow Financial Regulatory Committee believes that the time has come to consider the issues in a broader context: what would be required for the development of a single Trans-Atlantic market in financial services. Further, it is time to consider whether the present regulatory approaches make sense in a 21st century economy.
On the U.S. side, the Treasury has taken the lead in cooperation with the Securities and Exchange Commission (SEC) and the Federal Reserve, even though some of the issues involve other regulators. On the European side, the Commission has carried on the Dialogue without participation by member country regulatory authorities. As the name implies, the Dialogue is informal, with public disclosure limited to occasional speeches and fact sheets. Similarly, consultation with and advice from the private financial sector have also been informal.
Although the individual issues are well known to the private firms directly involved, the public policy dialogue has necessarily been limited. The Committee believes that the issues being discussed in this Dialogue are of importance not just to the financial services industry, but also to the U.S. and European economies more broadly. Although the governmental institutions and individuals involved are well informed and well motivated, we believe that the visibility of the issues under discussion needs to be raised but also to the U.S. and European economies more broadly. Although the governmental institutions and individuals involved are well informed and well motivated, we believe that the visibility of the issues under discussion should be raised.
The present Dialogue takes the substance of the existing regulatory schemes as given without conducting any cost-benefit analysis to determine whether particular regulations, either on the U.S. or the EU side, make sense in a 21st century economy. We believe that higher goals and broader economic examination of the underlying issues would be desirable.
From the standpoint of goals, the vision of a single Trans-Atlantic market in financial services will help to raise our sights and thereby the quality of the results. The economic benefits of recent financial innovation and transformation have been limited by outmoded regulation. And the costs of complying with the divergences among jurisdictions have been borne by private firms with predictable consequences for economic efficiency. We believe that the goal of a single Trans-Atlantic market in financial services, as well as the adoption of principles to resolve differences, would provide a framework for faster progress and greater achievement.
What follows is a summary of some of the key regulatory issues that confront the Dialogue, as well as a consideration of some principles that might guide agreement, and questions of process.
Some Regulatory Issues
First is the 2002 Sarbanes-Oxley Act, which extended new rules of governance to foreign firms whose securities trade in public markets in the United States. While SEC implementation of these rules has accommodated the principal concerns of European issuers, particularly in the area of the need for independent directors on the audit committee, certain issues remain. There is the question as to how the registration and inspection standards of the Public Company Accounting Oversight Board (PCAOB) will be applied to foreign auditing firms. In addition, Europeans are concerned with the "no exit" feature of U.S. regulation that requires all companies with more than $10 million in assets and more than 300 shareholders to comply with Sarbanes-Oxley even if they were to drop their exchange listings and discourage trading of their securities in the U.S.
Second is the scheduled adoption of International Accounting Standards (IAS) by the EU in 2005, which may prohibit U.S. companies from continuing to issue securities in the EU under U.S. GAAP. It is not even clear whether countries currently trading under U.S. GAAP in Europe will be grandfathered. There is particular concern that the EU may not accommodate U.S. GAAP in the EU if the SEC fails to allow foreign firms to use IAS in issuing securities in the United States. While the Convergence Project undertaken by the Financial Accounting Standards Board and the International Accounting Standards Board is seeking to bring about convergence in the two sets of rules, it is far from certain that this effort will be complete by 2005. Complicating this exercise are important issues concerning which rules are adopted when they differ substantially and the balance between rules and principles.
Third is the divergence of views on the implementation of the Basel II Accord in 2007. The U.S. has indicated that it will apply only these standards to "internationally active" banks. The EU, on the other hand, envisions applying all of the standards to all banks and securities firms in the EU.
Fourth is the question of the effect of the EU's proposed Financial Conglomerates Directive on U.S. securities firms that are currently unregulated at the holding company level. The EU Directive would subject these firms to EU conglomerate regulation unless these firms are subject to "equivalent" U.S. regulation. The SEC has proposed a new form of holding company regulation, which it hopes will satisfy the equivalence test, but this has yet to be decided by the EU.
In addition, there are other areas of concern: different standards for data protection and privacy, the inability of EU stock exchanges to set up trading screens in the United States without being fully subject to U.S. regulation, differences in approaches to electronic trading systems, particularly those involving internalization, and differences in takeover rules.
Principles
If, contrary to our suggestions above, the Dialogue proceeds along its current narrower path, it would be useful to reach agreement on general principles to guide negotiations. Traditionally, the United States has followed the national treatment approach under which foreign firms operating in the United States are fully subject to U.S. rules, such as the requirement that foreign firms file reports using U.S. GAAP and comply with the CEO/CFO financial statement certification requirement of Sarbanes-Oxley. There have also been attempts to harmonize rules in formal ways, Basel II serving as a major example. To a great extent, the EU has adopted still another approach, mutual recognition, within its internal financial market. Mutual recognition requires the host state to recognize the validity of the home state's rules, assuming some minimum level of harmonization. The United States has generally been unwilling to accept mutual recognition principles in dealing with the EU, although it has adopted a mutual recognition system (with some important exceptions) with respect to Canadian firms issuing securities in the United States and to U.S. firms issuing securities in Canada. In addition, the United States has generally accepted home country regulation, albeit as a necessity, with respect to the regulation of foreign banks operating in the U.S. through branches.
Two other principles have been put forward more recently. First, the EU Commission has advocated an equivalence approach, whereby it would accept U.S. regulation that was equivalent to its own, even though the details might be quite different. Indeed, the Financial Conglomerates Directive adopts an equivalence approach. The United States has used the test as well in some areas. For example, foreign mutual funds registering in the United States are exempted from certain features of the Investment Company Act of 1940 if they are subject to equivalent rules abroad. Second, the SEC has advocated a convergence approach, indicating its willingness to accept EU regulation that has converged with but may not be identical to the U.S. rules. How these principles would actually be applied to the issues now under discussion has yet to be determined.
Process
As noted above, the Treasury, the SEC and the Federal Reserve represent the United States, while the European Commission represents the EU, even though other regulators may be consulted. At some stage there will need to be additional, more structured governmental participation on both sides, that would include the CFTC and state insurance commissioners on the U.S. side and key national regulators on the EU side, as well as self-regulatory organizations on both sides of the Atlantic. It will also be necessary to take into account non-EU countries in Europe, principally Switzerland. Discussions among government officials and regulators can result in more regulation as a "compromise". But less regulation should also be an option in many areas and thus the views of private sector observers as well as the financial community should weigh heavily in the ultimate conclusions of the Dialogue.
Conclusion
The Shadow Committee applauds the efforts of the U.S.-EU Informal Financial Markets Dialogue to narrow the differences between the two financial regulatory systems. At the same time, however, we urge the participants in the Dialogue to raise their sights to achieve the more ambitious goal of developing a single Trans-Atlantic market in financial services. This approach should involve not simply an ad hoc resolution of current regulatory differences, but should involve a careful cost-benefit analysis of each aspect of regulation to ensure that we achieve a financial system that serves the real economy in the most efficient way.