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BULLETIN
Saturday, 21 February 2004

Good Fences Make Good Neighbors
From the March 1, 2004 issue: For once, Israelis agree about something.
by Peter Berkowitz
03/01/2004, Volume 009, Issue 24
Jerusalem
IN ISRAELI POLITICS, contentiousness is the norm and consensus is rare. This makes all the more striking the broad and deep consensus that has formed among Israelis around the conviction that the country, without delay, must complete the construction of the security fence separating it from the West Bank and the Palestinians who live there.
The cause of the consensus is terror. In the old days, before September 2000, it was a mark of the country's national security challenge that almost every adult Israeli had served in the military, and every Israeli had friends and loved ones in the army. These days, the distinguishing mark of the country's national security challenge is something grimmer: Almost every Israeli knows somebody who has been wounded, maimed, or blown to bits by a suicide bomber. For Israelis, the front line is now at home, and it is this transformation of their struggle with the Palestinians that has produced an overwhelming majority--perhaps two thirds of the citizenry--in favor of the security fence.
Predictably, the international community is up in arms. Last December, the United Nations General Assembly voted to refer the question of the legality of Israel's security fence to the International Court of Justice for an advisory opinion. Working on a greatly expedited schedule, the court set a deadline of January 30 for briefs, with oral arguments to begin on February 23. The Palestinians charge that the fence violates international law, infringes their human rights, and imposes on them grave social and economic hardship. The United States, along with many other nations, opposes the referral of the question to the court on the grounds that the court is, at this time, an inappropriate forum for the question. While the European Union is among the group that opposes involving the court, its representatives have made clear that the E.U. agrees with the Palestinians on many of their charges.
In fact, the case for Israel's security fence is clear and compelling and accounts for the dramatic convergence of Israeli opinion in support of it.
Yet as late as three years ago, almost nobody in Israel was thinking about a fence, in part because it contravenes both left-wing and right-wing views. Those who have embraced the fence from the left have been forced to relinquish their dream of Israelis and Palestinians integrating their economies, traveling daily across open borders, and living together in harmony. And those who have come to it from the right have had to abandon the ambition to maintain Israeli control over, and settlement in, all or most of the disputed territories without partition.
The catalyst for both camps has been the staggering scale of Palestinian terrorism since late September 2000. In the war launched by the Palestinians following Yasser Arafat's rejection of Prime Minister Ehud Barak's offer of a Palestinian state in all of Gaza, almost all of the West Bank, and a good portion of the Old City in Jerusalem, more than 900 Israelis have been killed and more than 6,000 have been wounded. In a country of about 6.4 million, that is the equivalent of almost 40,000 dead and a quarter of a million wounded in the United States.
RETIRED MAJOR GENERAL Uzi Dayan, former head of Israel's National Security Council, the fence's original architect in 2001, and its foremost defender today, calls the fence "a precondition to everything." By making Israel more secure, he argues, the fence--one third of which has been built and all of which is due to be completed by the end of 2005--will advance the peace process and thereby serve the interests of Palestinians as well as Israelis. But his first priority, he emphasizes, is Israel's security, which he smoothly translates into the language of human rights. "The basic human right is to live. So before talking about human rights and disturbing the daily routine of Palestinians, which is an issue we need to remember, we need to fight terrorism effectively."
Looking over a winding stretch of the security fence not far from his home in the village of Cochav Yair, where the coastal plain turns into rolling hills and where Israel is at its narrowest, with less than 10 miles from the sea to the Green Line, the pre-1967 border based on the 1949 armistice line, Dayan tells me that "the fence is the ultimate obstacle. The only way to fight terrorism effectively is to build a fence, because you can't fight terrorism just offensively. You need a defense. And the best defense is a fence."
What makes Dayan so confident that the fence will be effective? "We built it everywhere in every place when we wanted to prevent infiltration: all along the Jordan River; in the Golan Heights; on the border from Lebanon we built it in eight months from the Mediterranean Sea to Mount Hermon. And the ultimate example is Gaza. In the last three and a half years, not even one terrorist managed to infiltrate from Gaza and to commit a suicide bombing or a terrorist attack. And there were dozens of attempts. Very few even managed to cross the fence." In addition, Dayan points out, terrorist attacks have been dramatically reduced in those areas of the West Bank where the fence has been completed.
Although critics casually refer to it as a wall, in fact more than 95 percent of the barrier that Israel is building around the West Bank is made out of chain-link fence. Not ordinary chain-link fence, to be sure. It is electrified so that when an intruder touches it, Israeli forces are alerted. In addition, on the Palestinian or east side of the fence, the Israelis have dug an anti-vehicle trench. To the immediate west, they have placed a sandy path, which soldiers patrol looking for signs of footprints. Beyond that is a paved two-lane road for military use, and beyond the road is another fence, in some places chain link and in others barbed wire. Further back, cameras mounted on towers monitor the entire system, which is about 50 meters in width. Where there is danger of sniper fire from a Palestinian city that borders an Israeli highway, or where the space is lacking, the Israelis construct instead a concrete wall.
For Dayan, there is no question about the urgency of completing the fence. The problem, he concedes, is the route. The only serious question that divides the newly consolidated Israeli majority is how far the fence should extend into the West Bank in order to bring within its protection Israelis in the settlements.
Dayan--like much of the Israeli military establishment, a man of the left--favors a fence that sticks close to the Green Line. Although he does not regard the Green Line, which runs through villages and corresponds to no natural boundary, as sacrosanct, a security fence that roughly corresponds to it will be considerably shorter, require less time and cost to build, intrude less on Palestinian life, be easier to defend, and generate less international opprobrium than the route advocated by Prime Minister Ariel Sharon. While security was uppermost in his mind when he was designing the fence in 2001, Dayan sought to include as few Palestinians as possible on Israel's side, and to minimize hardships. He is pleased that in recent days the Sharon government has scaled back its plan for including Palestinian villages near Israel.
But Dayan stresses that all this is secondary for him: "I never buy the excuse of not building a fence because of conflict about the route of the fence. Which means I'm saying to my government: 'I'm sick and tired. I don't want to hear from you there is a problem, there is debate in the government. [Minister of Justice Yosef] Lapid thinks one way. [Minister of Defense Shaul] Mofaz says another approach. I say just build it. Decide about it. Talk to the Americans. Talk to the Palestinians. Talk among yourselves, for God's sake. But decide upon the route and build it.'"
There is harshness in Dayan's words. But there is also hope. By stopping terrorist attacks, he explains, the fence may strengthen the hand of Palestinian moderates who on their own are powerless to bring Hamas, Islamic Jihad, and the Al Aksa Martyrs Brigade under control.
MEANWHILE, the U.N. General Assembly, in the eyes of many thoughtful Israelis, has played into the hands of the extremists. When it placed the matter before the International Court of Justice, the General Assembly took the issue away from the Israeli and Palestinian negotiators charged with it under several U.N. Security Council Resolutions and agreements among the parties, including the U.S.-backed "road map." According to Daniel Taub, director of the General Legal Division at Israel's Ministry of Foreign Affairs, "there have been repeated attempts by Palestinians and the Arab group to refer issues in the conflict between us to international forums and specifically the International Court of Justice as part of a general campaign to internationalize the issues." In Taub's view, no good can come of this. In the first place, he argues, the court does not have jurisdiction: No dispute between states is supposed to come before the court without the consent of both parties. Moreover, the referral of the question of the legality of the fence shows bad faith, because the General Assembly had already passed a resolution condemning the fence as illegal.
Sitting across from Taub in his cramped office in Jerusalem, I ask him about a report of the U.N. secretary general summarizing the legal positions of the "Government of Israel" and the "Palestine Liberation Organization." Taub bristles. He tells me that the report badly misstates the Israeli legal position. Then, indignant, he reads me a passage indicating that there should be no tradeoffs between Israeli security and Palestinian freedom, that Israel must desist from any undertakings that infringe Palestinian rights or cause them hardships, even undertakings that Israel has concluded are necessary to defend itself from Palestinian acts of war.
More serious perhaps is the failure of the dossier put together by the United Nations to serve as the basis for the court's work to so much as mention Palestinian terror. A Ministry of Foreign Affairs statement that summarizes the legal position Israel adopted in its 130-page brief to the court (still confidential under court rules) minces no words:
Neither the question referred to the Court, nor the 20-paragraph General Assembly resolution referring it, makes any reference--not a single word--to the ongoing terrorism directed daily against Israel and its citizens. Similarly the extensive dossier of 88 documents on the question provided to the Court by the United Nations is, staggeringly, totally silent on the subject of Palestinian terrorist attacks. It is devoid of any of the United Nations resolutions condemning terrorism, as well as Israel's letters to the Secretary General detailing the terror attacks it has faced.
And this silence, Israel contends, is a fatal flaw:
It is inconceivable that the International Court of Justice should be requested to give an Advisory Opinion on the issue of Israel's security fence at the behest of the very terrorist organization which has been actively behind many of the murderous attacks which have made the fence necessary. It is even more inconceivable that the request should make no reference at all to the brutal reality of terrorism faced by Israel.
To the charge that Israel's fence is an effort to grab land by creating facts on the ground, Taub responds that a fence that was built right on top of the Green Line would be impractical, cutting through villages, running through valleys, and generally bearing no relation to security, topography, or the needs of daily life. Moreover, Taub emphasizes, the fence brings about no legal change in the status of the territories or the status of the residents, either Palestinians or Israelis who live in settlements. It is temporary, it can be moved and altogether dismantled. And it is not a border. It does not alter Israel's responsibility to protect settlements. And it does not alter ownership of the land on which it is built, which, when privately owned, becomes subject to a temporary requisition order. Israel pays compensation to the owners for use of the land and loss of profits. And Israel makes procedures available to Palestinians who wish to lodge protests against the fence's route. To date, 20 petitions have been submitted to Israel's High Court of Justice.
Further, argues Taub, it is not Israel that is trying to establish a political border but the Palestinians, who insist that, if there is to be a fence, it be built on the Green Line. The Green Line, Taub points out, was never intended to be a final legal border. U.N. resolutions, formal agreements between Israel and the Palestinians, and the road map are, he asserts, "absolutely clear" that the final determination of the border is a subject to be negotiated between the two sides. But won't the fence, whatever Israel's formal position, come to be thought of as a border by both sides to the conflict? Won't it, whatever Israel's intention, create facts on the ground? Taub is not moved. "You can't not fight terrorism--which is a precondition for entering into negotiations--and expect to receive your maximum demands from negotiations."
To the charge that the fence causes disproportional harm to the Palestinians, Taub insists that Israel recognizes genuine hardships and is taking great pains to minimize them. Planning for the route of the fence begins with the army, but before the government approves plans they must undergo an arduous process of adjustment, which involves several layers of consultation--with environmental experts, legal experts, and the local population. Alternative routes are explored, additional gates are considered, increased bus service is examined. The fence has already been moved twice in order to put Palestinian villages on the Palestinian side. And in Abu Dis, an Arab neighborhood most of which lies just beyond the Green Line, Israel is building a new kidney dialysis center for Palestinians cut off by the security fence from the old one.
Like Uzi Dayan, Taub insists that in the long run Palestinians too will benefit from the fence, for with the reduction in terrorism, Israel will need to take fewer intrusive measures in the West Bank. And to the extent that you take terrorism out of the equation, you weaken the militants and strengthen the moderates.
SHLOMO AVINERI, a distinguished political scientist at the Hebrew University of Jerusalem and former director-general of Israel's Ministry of Foreign Affairs, won't go as far as Dayan or Taub. He is a self-styled dove who was "rattled" by Camp David 2000. He considers Arafat's decision to go to war rather than accept Barak's offer a watershed moment in Israel's history, and he adamantly supports the fence. Typical of the left-leaning segment of the Israeli consensus, he wants it built as close as possible to the Green Line. But he dismisses the idea of Palestinian moderates. "What is important," says Avineri, "is that there hasn't been a clear statement on the part of any Palestinian leader that suicide bombers are murderers. Not one."
There are, Avineri observes, Palestinian leaders who will say they would recognize Israel if it were to abide by U.N. resolutions and international law. But, he stresses, no other state is spoken of in that way. We say Bosnia or China is in breach of international law, but we do not treat its compliance with international law as a precondition for recognition of its sovereignty. Given current attitudes, and an educational system that continues to instruct children with maps of the Middle East on which Israel does not appear, Israel may have to wait a generation or more, Avineri believes, to find negotiating partners on the Palestinian side.
Khaled Abu Toameh, a prominent Arab-Israeli journalist, takes a still harsher view of the Palestinian side. To be sure, he opposes the fence because of its impact on the Palestinian people, the damage to their livelihood, the restriction of their right to move about freely, the insult to their personal dignity. But to him, the fence is only a symptom of the real problem: the Palestinian leadership.
Of course, he says, Israelis are largely indifferent to Palestinian suffering. Of course Israelis do not really understand that the "ordinary, average Palestinian is a normal person who wants to wake up in the morning, send his children to school, care for his family, go to work, and just lead a normal life. He doesn't care about other things. The Palestinian Authority. Israel. They are not that important. What is important is not to disrupt normal life. And this fence disrupts normal life. It turns the life of many Palestinians into hell."
Nevertheless, the cause of the fence, Abu Toameh was sure, was not a desire on the part of Israeli majorities to rule over the Palestinians. If he were an Israeli Jew in these circumstances, he would favor a fence. Real responsibility for the construction of the fence, he is quite certain, lies with Yasser Arafat and the thoroughly cynical dictatorship he brought to the Palestinian people 10 years ago on the heels of the Oslo Accords.
But don't the Palestinians recognize Arafat as their legitimate leader? "Look," Abu Toameh says impatiently. "They want independence. They want their own state. But they don't want the corrupt and autocratic regime led by several hundred cronies of Arafat. They are stealing from the Palestinian people. I mean, what has the Palestinian Authority done for the Palestinian people over the last 10 years, since the signing of the Oslo accords? Basically, nothing." Nothing? "Yasser Arafat did not build one hospital. Or one school." Taken aback by his candor, I ask Abu Toameh whether he is speaking precisely. He responds sharply, "I am responsible for what I am saying. Arafat did not do anything. He did not rebuild one refugee camp. And the question is, one should ask, where did the money go? What happened? I mean, he got billions."
What is to be done? For Abu Toameh the critical first step is clear. "The Palestinian people's problem is their leadership. The Palestinian people's problem with the Israelis is a completely different issue. That could be solved in the long run. And it will be. But in order to solve that problem, and before we solve that problem with the Israelis, we need a proper Palestinian regime, we need proper government, proper institutions, democratic institutions, we need transparency. Basically the Palestinian Authority today is run as a private business by Yasser Arafat. And some of his aides. We need to liberate the Palestinian people, but from their leadership first, and then from the occupation."
YET IN THE SHORT TERM there is no avoiding the question of the security fence and the disputed territories. One afternoon, on the way back to my hotel on Mount Scopus, I ask the cabdriver to pass by Abu Dis, where the security fence is indeed a massive wall. When I ask him, as I do all Israeli cabdrivers, what his opinion of the fence is, he surprises me by responding in heavily Arabic-accented Hebrew. My Arab-Israeli cabdriver, a rarity, tells me that he is definitely opposed to it. En route through East Jerusalem, he says that the wall in Abu Dis has separated his family from his wife's parents, who live just on the other side. A visit that used to involve a few minutes' walk now takes a half hour to 45 minutes by car.
As we approach the wall, he points out shops on Israel's side that have been forced to close and tells me of many others on the Palestinian side that have gone out of business. We drive along the towering, menacing gray structure, 24 feet in height, that has been placed down the center of what used to be a main road, and he tells me that he doesn't know what the solution is, but it can't be this.
He knows there is blame to go around. He is disgusted by Arafat's weakness and ineffectiveness. I ask him whether he is ready for peace. "Ready?" he exclaims. "I live here. I work here. I work among the Arabs. I don't care who you are and what you are. I have children and a wife. I want to live. With dignity." I ask whether most Palestinians are like him. Without hesitation he says, "Yes." He pulls into a driveway not 10 yards from the fence. And then Abu Yosef, which he explains to me is what all his friends call him, invites me into his home, where I drink coffee with his wife and four shy, wide-eyed children.
I relate this encounter to Alex Yakobson, professor of classical history at the Hebrew University of Jerusalem and a prominent Israeli public intellectual, who over the last decade has migrated from the dovish left to the pragmatic center. He listens patiently. He neither smiles nor frowns. He replies resolutely: "The fence, it is true, is not nice. It is not aesthetic. It is not convenient. I do not underestimate the genuine hardship that it is causing. But it's also not nice when a bus full of passengers is blown up and their limbs and organs--hands and legs and heads--fly for tens of meters in all directions. From a purely moral point of view, nobody's freedom of movement is more precious than somebody else's life."
That indeed is the voice of the Israeli center today. It is a voice that understands that what is not nice may be necessary and proper. It is an increasingly dominant voice in Israel. It is a voice in which anger, sadness, hardness, and humanity blend. Under the circumstances, it is the voice of reason.

Peter Berkowitz teaches at George Mason University School of Law and is a fellow at Stanford's Hoover Institution.
? Copyright 2004, News Corporation, Weekly Standard, All Rights Reserved.

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Saddam's Ambassador to al Qaeda
From the March 1, 2004 issue: An Iraqi prisoner details Saddam's links to Osama bin Laden's terror network.
by Jonathan Schanzer
03/01/2004, Volume 009, Issue 24

A RECENTLY INTERCEPTED MESSAGE from Iraq-based terrorist Abu Musab al Zarqawi asking the al Qaeda leadership for reinforcements reignited the debate over al Qaeda ties with Saddam Hussein's fallen Baath regime. William Safire of the New York Times called the message a "smoking gun," while the University of Michigan's Juan Cole says that Safire "offers not even one document to prove" the Saddam-al Qaeda nexus. What you are about to read bears directly on that debate. It is based on a recent interview with Abdul Rahman al-Shamari, who served in Saddam's secret police, the Mukhabarat, from 1997 to 2002, and is currently sitting in a Kurdish prison. Al-Shamari says that he worked for a man who was Saddam's envoy to al Qaeda.
Before recounting details from my January 29 interview, some caution is necessary. Al-Shamari's account was compelling and filled with specific information that would either make him a skilled and detailed liar or a man with information that the U.S. public needs to hear. My Iraqi escort informed me that al-Shamari has been in prison since March 2002, that U.S. officials have visited him several times, and that his story has remained consistent. There was little language barrier; my Arabic skills allowed me to understand much of what al-Shamari said, even before translation. Finally, subsequent conversations with U.S. government officials in Washington and Baghdad, as well as several articles written well before this one, indicate that al-Shamari's claims have been echoed by other sources throughout Iraq.
When I walked into the tiny interrogation room, it was midmorning. I had just finished interviews with two other prisoners--both members of Ansar al Islam, the al Qaeda affiliate responsible for attacks against Kurdish and Western targets in northern Iraq. The group had been active in a small enclave near Halabja in the Kurdistan region from about September 2001 until the U.S. assault on Iraq last spring, when its Arab and Kurdish fighters fled over the Iranian border, only to return after the war. U.S. officials now suspect Ansar in some of the bloodier attacks against U.S. interests throughout Iraq.
My first question to al-Shamari was whether he was involved in the operations of Ansar al Islam. My translator asked him the question in Arabic, and al-Shamari nodded: "Yes." Al-Shamari, who appears to be in his late twenties, said that his division of the Mukhabarat provided weapons to Ansar, "mostly mortar rounds." This statement echoed an independent Kurdish report from July 2002 alleging that ordnance seized from Ansar al Islam was produced by Saddam's military and a Guardian article several weeks later alleging that truckloads of arms were shipped to Ansar from areas controlled by Saddam.
In addition to weapons, al-Shamari said, the Mukhabarat also helped finance Ansar al Islam. "On one occasion we gave them ten million Swiss dinars [$700,000]," al-Shamari said, referring to the pre-1990 Iraqi currency. On other occasions, the Mukhabarat provided more than that. The assistance, he added, was furnished "every month or two months."
I then picked up a picture of a man known as Abu Wael that I had acquired from Kurdish intelligence. In the course of my research, several sources had claimed that Abu Wael was on Saddam's payroll and was also an al Qaeda operative, but few had any facts to back up their claim. For example, one Arabic daily, al-Sharq al-Awsat, stated flatly before the Iraq war, "all information indicates [that Abu Wael] was the link between al Qaeda and the Iraqi regime" but neglected to provide any such information. Agence France-Presse after the war cited a Kurdish security chief's description of Abu Wael as a "key link to Saddam's former Baath regime" and an "intelligence agent for the ousted president originally from Baghdad." Again, nothing was provided to substantiate this claim.
In my own analysis of this group, I could do little but weakly assert that Wael was "reportedly an al Qaeda operative on Saddam's payroll." The best reporting on Wael came from a March 2002 New Yorker article by Jeffrey Goldberg, who had visited a Kurdish prison in northern Iraq and interviewed Ansar prisoners. He spoke with one Iraqi intelligence officer named Qassem Hussein Muhammed, whom Kurdish intelligence captured while he was on his way to the Ansar enclave. Muhammed told Goldberg that Abu Wael was "the actual decision-maker" for Ansar al Islam and "an employee of the Mukhabarat."
"Do you know this man?" I asked al-Shamari. His eyes widened and he smiled. He told me that he knew the man in the picture, but that his graying beard was now completely white. He said that the man was Abu Wael, whose full name is Colonel Saadan Mahmoud Abdul Latif al-Aani. The prisoner told me that he had worked for Abu Wael, who was the leader of a special intelligence directorate in the Mukhabarat. That directorate provided assistance to Ansar al Islam at the behest of Saddam Hussein, whom Abu Wael had met "four or five times." Al-Shamari added that "Abu Wael's wife is Izzat al-Douri's cousin," making him a part of Saddam's inner circle. Al-Douri, of course, was the deputy chairman of Saddam's Revolutionary Command Council, a high-ranking official in Iraq's armed forces, and Saddam's righthand man. Originally number six on the most wanted list, he is still believed to be at large in Iraq, and is suspected of coordinating aspects of insurgency against American troops, primarily in the Sunni triangle.
Why, I asked, would Saddam task one of his intelligence agents to work with the Kurds, an ethnic group that was an avowed enemy of the Baath regime, and had clashed with Iraqi forces on several occasions? Al-Shamari said that Saddam wanted to create chaos in the pro-American Kurdish region. In other words, he used Ansar al Islam as a tool against the Kurds. As an intelligence official for the Patriotic Union of Kurdistan (one of the two major parties in northern Iraq) explained to me, "Most of the Kurdish fighters in Ansar al Islam didn't know the link to Saddam." They believed they were fighting a local jihad. Only the high-level lieutenants were aware that Abu Wael was involved.
Al-Shamari also told me that the links between Saddam's regime and the al Qaeda network went beyond Ansar al Islam. He explained in considerable detail that Saddam actually ordered Abu Wael to organize foreign fighters from outside Iraq to join Ansar. Al-Shamari estimated that some 150 foreign fighters were imported from al Qaeda clusters in Jordan, Turkey, Syria, Yemen, Egypt, and Lebanon to fight with Ansar al Islam's Kurdish fighters.
I asked him who came from Lebanon. "I don't know the name of the group," he replied. "But the man we worked with was named Abu Aisha." Al-Shamari was likely referring to Bassam Kanj, alias Abu Aisha, who was a little-known militant of the Dinniyeh group, a faction of the Lebanese al Qaeda affiliate Asbat al Ansar. Kanj was killed in a January 2000 battle with Lebanese forces.
Al-Shamari said that there was also contact with the Egyptian "Gamaat al-Jihad," which is now seen as the core of al Qaeda's leadership, as well as with the Algerian Salafist Group for Preaching and Combat (GSPC), which bin Laden helped create in 1998 as an alternative to Algeria's Armed Islamic Group (GIA). Al-Shamari talked of Abu Wael's links with Turkey's "Jamaa al-Khilafa"--likely the group also known as the "Union of Islamic Communities" (UIC) or the "Organization of Caliphate State." This terror group, established in 1983 by Cemalettin Kaplan, reportedly met with bin Laden in Afghanistan in 1997, and later sent cadres there to train. Three years before 9/11, UIC plotted to crash a plane into Ankara's Ataturk Mausoleum on a day when hundreds of Turkish officials were present.
Al-Shamari stated that Abu Wael sometimes traveled to meet with these groups. All of them, he added, visited Wael in Iraq and were provided Iraqi visas. This corroborates an interview I had with a senior PUK official in April 2003, who stated that many of the Arab fighters captured or killed during the war held passports with Iraqi visas.
Al-Shamari said that importing foreign fighters to train in Iraq was part of his job in the Mukhabarat. The fighters trained in Salman Pak, a facility located some 20 miles southeast of Baghdad. He said that he had personal knowledge of 500 fighters that came through Salman Pak dating back to the late 1990s; they trained in "urban combat, explosives, and car bombs." This account agrees with a White House Background Paper on Iraq dated September 12, 2002, which cited the "highly secret terrorist training facility in Iraq known as Salman Pak, where both Iraqis and non-Iraqi Arabs receive training on hijacking planes and trains, planting explosives in cities, sabotage, and assassinations."
Abu Wael also sent money to the aforementioned al Qaeda affiliates, and to other groups that "worked against the United States." Abu Wael dispensed most of the funds himself, al-Shamari said, but there was also some cooperation with Abu Musab al Zarqawi.
Zarqawi, as the prisoner explained, was al Qaeda's link to Iraq in the same way that Abu Wael was the Iraqi link to al Qaeda. Indeed, Zarqawi (who received medical attention in Baghdad in 2002 for wounds that he suffered from U.S. forces in Afghanistan) and Abu Wael helped Ansar al Islam prepare for the U.S. assault on its small enclave last year. According to al-Shamari, Ansar was given the plan from the top Iraqi leadership: "If the U.S. was to hit [the Ansar base], the fighters were directed to go to Ramadi, Tikrit, Mosul . . . Faluja and other places." This statement agreed with a prior prisoner interview I had with the attempted murderer of Barham Salih, prime minister of the Patriotic Union of Kurdistan. This second prisoner told me that "Ansar had plans to go south if the U.S. would attack."
Al-Shamari said the new group was to be named Jund ash-Sham, and would deal mainly in explosives. He believed that Zarqawi and Abu Wael were responsible for some of the attacks against U.S. soldiers in central Iraq. "Their directives were to hit America and American interests," he said.
Al-Shamari claimed to have had prior information about al Qaeda attacks in the past. "I knew about the attack on the American in Jordan," he said, referring to the November 2002 assassination of USAID official Lawrence Foley. "Zarqawi," he said, "ordered that man to be killed."
These are some of the highlights from my interview, which lasted about 45 minutes.
I heard one other salient Abu Wael anecdote in an earlier interview during my eight-day trip to Iraq. That interview was with the former tenth-in-command for Ansar al Islam, a man known simply as Qods. In June 2003, just before he was arrested and put in the jail where I met him, Qods said that he saw Abu Wael. After the war, Abu Wael dispatched him from an Ansar safe house in Ravansar, Iran, to deliver a message to his son in Baghdad. The message: Ansar al Islam leaders needed help getting back into Iraq. It was only then, he said, when he met Abu Wael's son, that he learned of the link between the Baathists and al Qaeda.
Qods told me that he was angry with the leaders of Ansar for hiding its ties to Saddam. "Ansar had lots of secret ties between the Baath and Arab leaders," he said.
The challenge now is to document the claims of these witnesses about the secret ties between Saddam, al Qaeda, and Abu Wael. A number of U.S. officials have indicated to me that there are other Iraqis who have similar stories to tell. Perhaps they can corroborate Abdul Rahman al-Shamari's account. Meanwhile, the U.S. deck of cards representing Iraq's 55 most wanted appears to be one card short. Colonel Saadan Mahmoud Abdul Latif al-Aani, aka Abu Wael, should be number 56.
Jonathan Schanzer is a terrorism analyst for the Washington Institute for Near East Policy and author of the forthcoming book "Al-Qaeda's Armies: Middle East Affiliates and the Next Generation of Terror."



? Copyright 2004, News Corporation, Weekly Standard, All Rights Reserved.

Posted by maximpost at 12:52 AM EST
Permalink
Friday, 20 February 2004

>> HOT DOCUMENT?

http://www.rmp.gov.my/rmp03/040220scomi_eng.htm
PRESS RELEASE BY INSPECTOR GENERAL OF POLICE

IN RELATION TO INVESTIGATION ON THE ALLEGED PRODUCTION OF COMPONENTS

FOR LIBYA'S URANIUM ENRICHMENT PROGRAMME.





INTRODUCTION


On the evening of 10 Nov 2003, two intelligence representatives from the United States and Britain, i.e. the CIA and the MI6, met the Director of the Special Branch, Bukit Aman. The focus of their discussion was the ongoing investigation related to the international network that is suspected of being involved in the transfer of nuclear technology to third countries. Both the representatives asked for the co-operation of the Special Branch to prevent the spread of nuclear technology. They also provided information relevant for joint action.



INFORMATION


2. Among the informations passed are the following:



2.1 Involvement of a nuclear scientist in PAKISTAN



Alleged that a Pakistani nuclear arms expert was involved in the "onward proliferation of Pakistani nuclear technology to third countries, notably LIBYA."



2.2 BSA TAHIR



Alleged that BSA TAHIR, a SRI LANKAN businessman based in DUBAI was a trusted and close confidante of the arms expert and was actively involved in supplying centrifuge components for LIBYA's uranium-enrichment programme; and



2.3 SCOMI PRECISION ENGINEERING SDN BHD (SCOPE)



Alleged that BSA TAHIR, who was involved in the business of SCOPE had used the company to produce components for the centrifuge unit for the uranium enrichment programme. However, investigations have revealed that the components, on their own, cannot form a complete centrifuge unit. In this context, it has to be noted that SCOPE is a subsidiary of SCOMI GROUP BHD, i.e. a company involved in the petroleum services industry. As a subsidiary, SCOPE is also involved in precision engineering services which involves the production of components for a variety of equipments including parts for cars, petroleum and gas.



3. In relation to this, the Special Branch was also informed that on 4 Oct 2003, a ship named BBC China, owned by a GERMAN company, was examined in the port of Taranto, ITALY, where 5 containers bound for LIBYA were confiscated because they were believed to contain components related to the Libyan uranium enrichment programme. The components were said to have been packed in wooden boxes with the SCOPE logo on them. With this development a request was made to assist with the investigations related to the activities of BSA TAHIR and his connection with the Pakistani scientist in view of the "intense interest in this matter at the highest levels of the US/UK governments".



4. Following this development, the police launched an investigation to find out the real situation and it's implication to the interest and security of MALAYSIA.



BRIEFING


5. Pursuant to this investigation, the Prime Minister was briefed on 13 Nov 2003. He ordered a detailed and transparent investigation to be expedited. At the same time, the Inspector-General of Police was informed. He gave an order to continue with the investigation had been given.





POLICE INVESTIGATIONS


6. In conducting this investigation, the Special Branch, took into consideration the above-mentioned allegations and focused on the following aspects:-



6.1 The allegation that BSA TAHIR had played the role of a middle man in supplying certain centrifuge components from MALAYSIA for LIBYA's uranium-enrichment programme;



6.2 The allegation against SCOPE; and



6.3 Other related information.



7. As a responsible member state of the United Nations (UN), it is MALAYSIA's responsibility to investigate and inform on any activity which involves nuclear proliferation. In relation to this, MALAYSIA is cooperating with the International Atomic Energy Agency (IAEA), an agency under the UN, which is responsible for the enforcement of rules and regulations controlling nuclear weapons under the Non-Proliferation Treaty (NPT). This is to ensure that the investigations are thorough and free of doubt. In relation to this, two preliminary reports were given to the Department of Safeguards, IAEA in VIENNA through the cooperation and help of the Director-General of the Atomic Energy Licensing Board (AELB) MALAYSIA and an officer with Malaysia's Institute of Nuclear Technology Research (MINT). One complete report will also be handed to IAEA to assist the agency to carry out investigations on individuals or companies outside MALAYSIA suspected to be involved in related activities.







BACKGROUND OF BSA TAHIR


8. BSA TAHIR, whose full name is BUHARY SEYED ABU TAHIR, is 44 years old and a citizen of SRI LANKA and a businessman based in DUBAI. BSA TAHIR and his brother own a company i.e. SMB GROUP, DUBAI where he is the Group Managing Director. In 1998, BSA TAHIR married a MALAYSIAN woman and gained permanent residency in MALAYSIA. SMB GROUP started as a family company in 1980 and is now involved in the computer and IT fields. Generally, BSA TAHIR spends time overseeing his businesses in DUBAI and only returns to MALAYSIA, once in a while, to visit his wife's family or look for business opportunities.



9. Upon his father's death in 1985, BSA TAHIR took over the management of SMB and in the process visited PAKISTAN and succeeded in getting contracts to sell air conditioning equipment to Khan Research Laboratory (KRL). During this time, BSA TAHIR became acquainted with the Pakistani nuclear expert. At the same time, BSA TAHIR got to know middlemen from other countries, including EUROPE, who were involved in supplying uranium centrifuge components on behalf of the Pakistani nuclear expert.



MODUS OPERANDI


10. Investigation showed that the supply of components by middlemen was carried out in a discreet manner and involved suppliers from other countries to blur the sources of the components. Some of the suppliers were believed to be aware that these components could be for uranium enrichment centrifuges. Generally these suppliers mostly from Europe, were those who had had dealings with the nuclear expert since the 1980s, at a time when PAKISTAN was developing its nuclear technology. There were a number of individuals and companies which supplied the components but were unaware of the implications because some of the components were similar to components used in oil drilling, water treatment and equipment for several other general use.



EARLY INVOLVEMENT - SUPPLY OF CENTRIFUGE TO IRAN


11. During investigations, BSA TAHIR alleged that his involvement with the nuclear expert started sometime in 1994/1995. That year, the latter had asked BSA TAHIR to send two containers of used centrifuge units from PAKISTAN to IRAN. BSA TAHIR organized the transshipment of the two containers from DUBAI to IRAN using a merchant ship owned by a company in IRAN. BSA TAHIR said the payment for the two containers of centrifuge units, amounting to about USD$3 million was paid in UAE Dirham currency by the Iranian. The cash was brought in two briefcases and kept in an apartment that was used as a guesthouse by the Pakistani nuclear arms expert each time he visited DUBAI.





BACKGROUND TO THE INVOLVEMENT WITH LIBYA


12. From what BSA TAHIR could recall, LIBYA had contacted the nuclear arms expert in 1997 to obtain help and expertise in the field of uranium-enrichment centrifuge. Several meetings between the arms expert and representatives from LIBYA took place:-



12.1 Meeting in ISTANBUL sometime in 1997. During this meeting, the nuclear arms expert was accompanied by BSA TAHIR while LIBYA was represented by MOHAMAD MATUQ MOHAMAD and another person known only as KARIM. During this meeting, the Libyans asked the arms expert to supply centrifuge units for LIBYA's nuclear programme; and


12.2 About 1998 to 2002. During this time, several meetings were held between the arms expert, accompanied by BSA TAHIR and the Libyans headed by MOHAMAD MATUQ MOHAMAD. One discussion was held in Casablanca, MOROCCO and several discussions in DUBAI.


13. As a result of these meetings, the following progress were made:-



13.1 Around 2001, the nuclear arms expert informed BSA TAHIR that a certain amount of UF6 (enriched uranium) was sent by air from PAKISTAN to LIBYA. BSA TAHIR could not remember the name of the Pakistan Airlines which transported the uranium;



13.2 Year 2001/2002. The nuclear arms expert informed BSA TAHIR that a certain number of centrifuge units were sent to LIBYA directly from PAKISTAN by air. There is a possibility that the design of the centrifuge units that were sent were of the P1 model, i.e. a DUTCH designed model;



13.3 Project Machine Shop 1001. This was a project to set up a workshop in LIBYA to make centrifuge components which could not be obtained from outside LIBYA. The machines for the workshop were obtained from SPAIN and ITALY. BSA TAHIR said the middleman involved in this project was PETER GRIFFIN, a BRITISH citizen who is believed to have once owned Gulf Technical Industries (GTI) based in DUBAI. PETER GRIFFIN is said to be retired and living in FRANCE. The management of GTI has been taken over by his son PAUL GRIFFIN. BSA TAHIR also said that the plans for the Machine Shop 1001 was prepared by PETER GRIFFIN.





NETWORKING


14. BSA TAHIR said that PAKISTAN's need to produce nuclear weapons became urgent after INDIA tested its nuclear weapon on 18 May 1974. In view of this, the Kahuta Plant was set up and the nuclear arms expert was forced to get equipment discreetly from developed nations, especially Europe. In the process, he developed contacts to get the needed material from several countries. This had to be done discreetly because PAKISTAN had to develop a nuclear weapon for national defence after INDIA's nuclear test received opposition from many Western countries. Amid these difficulties, the nuclear expert successfully developed a network of middlemen that, not only involved BSA TAHIR, but also several people and companies from Europe seeking to make profits by selling certain materials and equipment. However, it was a loose network, without a rigid hierarchy, or a head and a deputy head as was alleged.



15. According to BSA TAHIR, some of the middlemen appeared to have known the nuclear expert for a long while and some amongst them knew him when he was in the NETHERLANDS. Among the middlemen alleged to have links with him are:-



15.1 GERMANY



Late HEINZ MEBUS, an engineer. He is alleged to have been involved in discussions between the nuclear arms expert and IRAN to supply centrifuge designs about 1984/85.



15.2 GOTTHARD LERCH, a German citizen residing in Switzerland. GOTTHARD LERCH once worked for LEYBOLD HERAEUS, a German company that is alleged to have produced vacuum technology equipment. GOTTHARD LERCH is alleged to have tried to obtain supplies of pipes for the Machine Shop 1001 Project by sourcing from SOUTH AFRICA but failed to obtain it even though payment had been made by LIBYA earlier.



15.3 TURKEY



GUNAS JIREH, a citizen of TURKEY who had once worked for the German company Siemens. GUNAS JIREH is alleged to have supplied aluminium casting and dynamo to LIBYA at the request of the nuclear arms expert;



15.4 SELIM ALGUADIS, a citizen of TURKEY. Also said to be an engineer. Alleged to have supplied electrical cabinets and power supplier-voltage regulator to LIBYA. Two weeks after action against the ship BBC China in Taranto, Italy on 4 Oct 2003, BSA TAHIR is alleged to have arranged the transshipment of electrical cabinets and power supplier-voltage regulator to LIBYA through DUBAI on behalf of SELIM ALGUADIS.





15.5 UNITED KINGDOM



PETER GRIFFIN, a citizen of UNITED KINGDOM who has business interests in DUBAI and currently residing in FRANCE. Alleged to have supplied the lay-out plan for the Machine Shop 1001 as a workshop to enable LIBYA to produce centrifuge;



15.6 About 2001/2002, PETER GRIFFIN is alleged to have supplied a lathe machine to LIBYA for the Machine Shop 1001 Project. After that PETER GRIFFIN arranged to send 7 to 8 LIBYAN technicians to SPAIN, twice, to attend courses on how to operate the machine. At the same time, PETER GRIFFIN is also said to have supplied an ITALIAN - made furnace to LIBYA for the workshop. Usually, lathe machines are used to make cylindrical objects, while the furnace is essential in the process of heating and refining during the manufacture of certain components;



15.7 SWITZERLAND



FRIEDRICH TINNER, mechanical engineer, alleged to have had dealings with the nuclear arms expert since 1980s. FRIEDRICH TINNER was reported to have prepared certain centrifuge components, including safety valves, and he sourced many of the materials that were made in several companies in Europe. FRIEDRICH TINNER did not keep the stock himself but arranged for the supply to reach DUBAI and then on to LIBYA. FRIEDRICH TINNER is also the President of CETEC, a company in SWITZERLAND; and



15.8 URS FRIEDRICH TINNER is the son of FRIEDRICH TINNER. URS TINNER is a consultant arranged by BSA TAHIR to set up the SCOPE factory in SHAH ALAM. He was actively involved in the manufacturing operations in the SCOPE factory. (See Passport | Work Permit)



16. Although the individuals above were alleged to have been involved, the governments of the countries concerned and some of the companies involved which supplied the components to the individuals above were unaware of the real use of the components.



ALLEGATIONS AGAINST SCOPE


17. The Special Branch also investigated the allegation that BSA TAHIR had used SCOPE and its business to manufacture certain parts of the centrifuge unit. A check on Malaysia's Security Commission records show that SCOPE or Scomi Precision Engineering Sdn. Bhd. was set up as a subsidiary to Scomi Group on 4 Dec 2001. Before SCOPE was set up as a subsidiary of Scomi, it was known as Prisma Wibawa Sdn. Bhd. (PWSB). At first, PWSB had no production facility but after SCOPE was set up, a production facility was set up in 2001.



18. SCOPE's business is precision engineering services. Generally, SCOPE gets orders from a number of companies to supply parts or components for vehicle parts and machining high precision components. The work involved machining parts such as cutting, turning and milling. The SCOPE factory is located in SHAH ALAM and has a permanent staff of about 30 people. As such, it is not a very big factory or a complex when compared with other factories.



19. Results of the investigation according to chronology is as follows:-



ROLE OF BSA TAHIR


19.1 Sometime in 2001, BSA TAHIR is alleged to have planned to manufacture components with GUNAS JIREH in TURKEY. However, BSA TAHIR later changed his mind and offered a new business plan said to be legitimate to produce components for petroleum and gas to SCOPE. The staff were under the impression that the production was for petroleum and gas intended for DUBAI.



ROLE OF URS FRIEDRICH TINNER


19.2 Following this development, BSA TAHIR sent URS FRIEDRICH TINNER as a consultant to the SCOPE factory with the aim of giving expert advice on how to manufacture components in a business that was deemed legitimate.



19.3 URS FRIEDRICH TINNER or URS TINNER, as he is better known, is 39 years old and is the son of FFRIEDRICH TINNER. URS TINNER was made a full-time technical consultant to SCOPE starting Apr 2002 on the recommendation of BSA TAHIR. According to BSA TAHIR, URS TINNER was recommended after PETER GRIFFIN was found unsuitable for the job. Before this, PETER GRIFFIN presented a feasibility study recommending, among others, the type of machinery needed. One of the machinery, a Cincinnati Hawk 150 Machining Centre, is the same as that purchased and installed by URS TINNER. This evidence was found in a document in the nature of a brief note allegedly signed by PETER GRIFFIN himself dated 10 Mar 2001.



19.4 As a consultant, URS TINNER was responsible in importing and setting up the machine that was bought through the services of his father, FRIEDRICH TINNER. There were also machines imported through Traco Company, SWITZERLAND, owned by MARCO TINNER, the brother of URS TINNER. Among the types of machines that were bought and fixed by URS TINNER are CNC Lathe Hawk (Cincinnati) from the UNITED KINGDOM, CNC Machining Center Arrow 500 (Cincinnati), also from the UNITED KINGDOM, CNC Lathe Mexica 590 (Cazeneuve) in FRANCE and Emco PC Turn 155 from UNITED KINGDOM. Two other machines made in TAIWAN i.e. Automated Bandshaw Cutting Machine (Averizing) and Universal Tool Grinder (Monaset) were bought from local agents.



20. Throughout the time he was in the SCOPE factory, URS TINNER was seen by SCOPE staff as carrying out his duties with care and would always take back his component drawings once a component was finished. URS TINNER is also alleged to have said that he was doing that to safeguard trade secrets. At that time, his explanation was accepted by the staff. No suspicions were aroused.



21. Many SCOPE staff also said that URS TINNER would erase all technical drawings that were kept in the computer at the SCOPE factory. In Oct 2003, URS TINNER ended his term of service at the SCOPE factory and just before this, is said to have taken the hard-disc of the company's computer that was designated for his use. URS TINNER is also said to have taken his personal file from the SCOPE factory's records. This gave the impression that URS TINNER did not wish to leave any trace of his presence there and wanted to ensure that the technical drawings did not fall into the hands of the SCOPE factory staff. However, URS TINNER left behind a machine, i.e. a manual turning machine. It was a 1948 model made in Schaublins, SWITZERLAND. This machine was never used .



22. The SCOPE staff did not know that on 4 Oct 2003, a ship, BBC China, was examined in the port of Taranto, ITALY where a total of 5 containers bound for LIBYA were confiscated because they were alleged to contain components for certain parts of a centrifuge unit. In fact, URS TINNER left his position as a consultant in SCOPE also in Oct 2003.



MATERIAL FOR MANUFACTURING COMPONENTS


23. The investigations show that the raw materials for making the components were obtained from a German subsidiary company i.e. Bikar Metal Pte Ltd in SINGAPORE. A total of 300 metric tons of aluminium grade 6061 and 6082 were bought and obtained from Bikar Metal in the form of round bars or round tubes. These materials are not controlled items. Therefore, URS TINNER recommended the purchase and this did not give rise to any concern or suspicion among the SCOPE staff.



MANUFACTURE AND EXPORT



24. The materials obtained from Bikar Metal i.e. aluminium round tube and aluminium round bar are semi-finished products that were sent to the SCOPE factory in SHAH ALAM for machining to be made into components for export. The order from BSA TAHIR was a one-off production estimated at about RM13 million and was sent in four stages to DUBAI. This was not a long-term contract on a continuing basis.



25. The SCOPE factory records show that a total of 14 types of components were manufactured. The components were sent in four stages i.e. in the month of Dec 2002 to Aug 2003. All four shipments were sent to DUBAI to Aryash Trading Company.



26. Though a document, delivery note/packing list, dated 1 Aug 2002 (Appendix "A") shows that SCOPE had sent a shipment addressed to Gulf Technical Industries LCC, P.O. Box 29576, Dubai, UNITED ARAB EMIRATES, the consignment was directed to Desert Electrical Equipment Factory, P.O.Box 51209, DUBAI on the instructions of URS TINNER. Documents related to the delivery to Desert Electrical Equipment Factory is as at Appendix "B".



27. From the document retrieved such as `delivery note and packing list', it has been found that SCOPE only shipped the components to DUBAI. No document was traced that proved SCOPE had delivered or exported the said components to LIBYA. Only BSA TAHIR and URS TINNER are said to know any preparation or arrangements to LIBYA.



SEARCH ON BBC CHINA VESSEL



28. As explained, on 4 October 2003, a vessel, BBC CHINA, was searched at the Taranto port, ITALY where a total of 5 containers to LIBYA was seized following allegations it contained certain components for `centrifuge.' The containers were sent by BSA TAHIR from DUBAI. Several items inside the container that is said to be components of a `centrifuge' are as follows :



Description Part Numbers Total

28.1 Casing 4 2,208

28.2 Molecular Pump 5 2,208

28.3 Top spacer 6 608

28.4 Positioner 8 10,549

28.5 Top end 9 1,680

28.6 Crash Ring 12 2,208

28.7 Stationary Tube 59 1,056

28.8 Clamp holder 73 400

28.9 Flange 77 4,525



29. All the above items, were made of `quality aluminium' and were in wooden boxes with the SCOPE logo. This was part of the `transshipment' delivered by SCOPE to Aryash Trading Company, DUBAI. The shipment of the items or components by BSA TAHIR to LIBYA via the vessel BBC CHINA was outside the knowledge of the management of SCOPE.



30. Photographs of the above items or components was shown to local experts at the Atomic Energy Licensing Board (AELB), which is responsible for the implementation of guidelines of the International Atomic Energy Agency (IAEA) connected with `IAEA safeguard system' in MALAYSIA, and also the Malaysian Institute of Nuclear Technology Research (MINT). They admitted that trained eyes like theirs found it difficult to positively confirm that the seized components were part of a `centrifuge' unit. This is because the said components could also be used by other industries besides Nuclear Technology. It was important and necessary to know the existence of a secret international network that planned to supply centrifuge components to LIBYA before making any assumptions on its use. In relation to this, it is appropriate to extract the AELB view on the seized components:



"The sets of graphic images presented, it may be parts of many possible mechanical device or devices. These parts could easily be fitted into many industrial or home components. Without knowing the full or a significant portion of the total of sub assembly no definitive use of assignment of the possible device may be made"



(Photographs of components seized from BBC CHINA is as at Appendix "C")



OTHER INFORMATION CONNECTED TO THE ACTION AGAINST THE VESSEL BBC CHINA



31. The action against vessel BBC CHINA should also be viewed with scepticism in the light of the following allegations made by BSA TAHIR:



31.1 BSA TAHIR claimed that' together with the seized components on board BBC CHINA on October 4, 2003, was a consignment sent by GUNAS JIREH, a Turkish national who supplied `aluminum casting and dynamo' to LIBYA for its `machine shop 1001' project. These items were delivered through DUBAI using the services of TUT Shipping (TS) via vessel BBC CHINA. It is surprising that the consignment from GUNAS JIREH direct to LIBYA was allowed without any action; and



31.2 Two weeks after action taken against BBC CHINA, BSA TAHIR claimed to have arranged a `transshipment of electrical cabinet and power supplier-voltage regulator' to LIBYA through DUBAI on behalf of SELIM ALGUADIS. These transshipment too arrived in LIBYA without any obstruction and this is unusual. SELIM ALGUADIS is said to have known AQK since the 1980s'.



SCOPE'S STATUS



32 In general, the investigations revealed the following :



32.1 That the management of SCOPE were unaware that the exported components were part of certain centrifuge unit for LIBYA. The management of SCOPE considered it a legitimate business deal. To untrained eyes, such components would not raise any concern as the components are similar to components that could be used by the `petrol -chemical industry' and `water treatment' and various other industries.



32.2 SCOPE obtained the semi-finished product to produce the said components from a German company Bikar Metal and this gives the impression that these items are not controlled items. In view of the foregoing, the work that was carried out on the semi-finished product is legitimate and does not give rise to suspicion.



32.3 BSA TAHIR and URS TINNER did not declare the use of the component or the true nature of the business. Moreover, the components that were confiscated cannot be used as one complete unit of centrifuge. Vital components such as rotor motor or in technical terms rotating components were not among the components seized. Besides, SCOPE does not have the ability or the technical know how to produce it. It must be stressed that rotating components are vital for a centrifuge unit for the process of uranium enrichment. To build one centrifuge unit, a number of sophisticated components are needed and SCOPE only prepared 12 types of components. In fact, SCOPE was misled into manufacturing the components for dual purposes for the petroleum and gas industry. As of now no factory in Malaysia is capable of manufacturing a complete centrifuge unit, what more, the construction of hundreds or thousands of centrifuges.



32.4 To SCOPE, the alleged manufacturing of components for centrifuges was a one-off production worth an estimated RM13 million. This means SCOPE did not receive any further orders and, as such, the manufacturing of such components is not its core business. As such, claims that the Malaysian authorities have shut down one of the network's largest plant has been exaggerated.



33. In this context it is worthy to note that Malaysia is a signatory to the Non Proliferation Treaty (NPT). NPT in general oversees control over nuclear materials like uranium, thorium and plutonium. Manufacturing, using or importing and exporting of uranium and plutonium and also other materials like thorium that can be converted into uranium are controlled by the NPT. All nations, including Malaysia, who are signatories to the NPT are required to report all inventories, and also the import and export of nuclear materials, to the International Atomic Energy Agency (IAEA) based in Vienna, Austria as the IAEA is the enforcement agency to the NPT. However, it has no control over nuclear equipments such as centrifuge components. As such SCOPE or Malaysia has not broken any of the NPT rules, as it is not among the listed items of the NPT. Besides, Malaysia has yet to sign the Additional Protocol to the IAEA's enforcement control agreement. In general, this Additional Protocol ensures control over specific nuclear equipment like single-use items that covers materials such as centrifuge for uranium enrichment. However, this Additional Protocol does not cover dual-use items like centrifuge for petrochemical, water treatment and the use in molecular biology for protein separation for health. Therefore, Malaysia, which is not a party to the Additional Protocol, has not violated any of the provision in the Additional Protocol because the seized components at the Port of Taranto in Italy were basic components and not complete centrifuge unit for uranium enrichment. Moreover, under Malaysian laws under the Atomic Energy Licensing Act (Act 304) there is no provision under the law for the control of such components that were seized.



34. From the explanation above, it is clear that SCOPE has not violated any law under the NPT, Additional Protocol and also the Malaysian law under the AEL (Act 304). What is clear is that most individuals involved in the networking are from Europe whose countries are signatories to the Additional Protocol and also members of the Nuclear Supplier Group (NSG). As such, these countries are governed by the rules and regulations that have been set including reporting any transaction of specific materials for the use of nuclear to the IAEA. Germany has signed the Additional Protocol on 22 September 1998 and also a member of the NSG. Therefore, it is the responsibility of Bikar Metal to report to the German Government and also to the IAEA if semi-finished products that was supplied to SCOPE had been listed as a controlled item.



CONCLUSION



35. The police, in handling the investigation took an open and transparent approach. In this context, a full and complete report in connection with the investigation will be submitted to the AELB Malaysia to be reported to IAEA, an agency under the United Nations. This is in line with Malaysia's policy in recognizing a multi-lateral approach under the aegis of the IAEA and rejecting a unilateral approach where investigations are monopolized by only certain countries. The Malaysian authorities are always ready to cooperate with the IAEA if there is a need for further investigation.


36. It is hoped that the IAEA will start investigations on several individuals from Europe allegedly involved in the proliferation of nuclear weapons. Investigations undertaken by the Malaysian authorities prove the country's commitment to supporting efforts to curb the illegal transfer and proliferation of nuclear technology.



Released : 20 February 2004 0700hrs

Posted by maximpost at 7:37 PM EST
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>> PERVEZ DETAILS FROM FINANCIAL TIMES...

Musharraf retains ties with N Korea
By Andrew Ward in Seoul
Published: February 19 2004 4:00 | Last Updated: February 19 2004 4:00
Pakistan has been embarrassed by revelations that one of its scientists leaked nuclear secrets to North Korea, but it appears that General Pervez Musharraf, the Pakistani president, has not severed ties with the communist country that was once among Islamabad's favourite arms-trading partners.
North Korea's state media revealed yesterday that Gen Musharraf sent a birthday greeting to Kim Jong-il, the North Korean leader, when he turned 62 on Monday, together with flowers from the Pakistani embassy in Pyongyang. Gen Musharraf's message expressed hope that friendship between the countries would "strengthen ceaselessly", the report said.
The greeting followed the confession by Abdul Qadeer Khan, the pioneer of Pakistan's nuclear programme, that he secretly sold nuclear knowhow to North Korea, Libya and Iran.
In an interview with the Financial Times this week, Gen Musharraf denied allegations that Pakistan had provided nuclear expertise to North Korea in return for missile technology.
However, the extent of Pakistan's relationship with North Korea will come under fresh scrutiny next week when the US, China, Japan, Russia and the two Koreas gather in Beijing for a second round of talks about Pyongyang's nuclear weapons programme.
A priority for discussion will be the highly enriched uranium (HEU) programme that North Korea allegedly set up with help from Mr Khan.
Diplomats in Seoul said the US was privately putting pressure on Pakistan to provide information about Mr Khan's dealings with North Korea, to strengthen its negotiating position in next week's talks. "The big question is how much information has the US got from Pakistan?" said a senior Asian official.
"Washington needs to present some evidence that proves the HEU programme beyond doubt. "I am worried that the talks could be derailed by a clash over HEU."
Pyongyang's denials that it possesses an HEU programme have emerged as a serious obstacle to the diplomatic process because the US will not accept any settlement to end the nuclear crisis unless it includes dismantlement of the uranium enrichment facilities.
North Korea admits operating a plutonium-based nuclear programme and has offered to freeze it in return for economic rewards from the US. But Pyongyang has refused to discuss the alleged HEU programme.
It was the US allegation in October 2002 that North Korea was developing a clandestine HEU programme that caused the collapse of a 1994 arms-control deal, under which the plutonium-based facilities had been frozen. Since then, North Korea has withdrawn from the nuclear non-proliferation treaty and resumed production and reprocessing of plutonium, with some estimates that Pyongyang could now possess enough nuclear material for up to eight bombs.


-----------------------------------------
Pakistani ring 'fed Libya nuclear parts'
By John Burton in Singapore, Stephen Fidler and Mark Huband in London and Farhan Bokhari in Islamabad
Published: February 20 2004 21:51 | Last Updated: February 20 2004 21:51
A Pakistani-led black-market network airlifted radioactive material to Libya in 2001 aboard a Pakistani airliner, a Malaysian police report said on Friday, as a new study from the international nuclear watchdog described a secret Libyan nuclear programme spanning two decades.
The International Energy Agency said Libya had successfully produced a small amount of plutonium and imported low- enriched uranium as part of its programme, diplomats who had seen the report said.
The IAEA's report, which will be considered by its board next week, discloses that Libya's nuclear abilities were further developed than UN inspectors had thought when its programme came to light last year. Libya agreed to give up its weapons of mass destruction programmes in December after negotiations with the US and Britain.
In the Malaysian report, the country's inspector-general of police said the airlifting to Libya of uranium hexafluoride, used as a feedstock for centrifuges that enrich uranium, took place in 2001.
The investigation into Malaysian involvement in the network, drawn largely from interviews from Bukhari Sayed Abu Tahir, a Sri Lankan-born businessmen at its heart, also says a number of centrifuge units - possibly Dutch-derived P-1 models - were sent direct by air to Libya from Pakistan in 2001-02.

In other disclosures, Mr Tahir said he had organised the shipment of two containers of used centrifuge units from Pakistan to Iran, via Dubai, in 1994-95. The cost was $3m.
The report says the shipment was made at the behest of a Pakistani scientist who also told Mr Tahir about the air shipments to Libya.
The scientist is not named, but is referred to on one occasion by the initials AQK. Abdul-Qadeer Khan, sometimes called the father of the Islamic atomic bomb, admitted this month he had given nuclear technology to other countries and was pardoned by General Pervez Musharraf, Pakistan's president.
According to senior western and Pakistani officials, George Tenet, director of CIA, secretly paid a one-day visit to Pakistan last week to discuss the investigations into the network. The visit has not been confirmed by either of the two governments.

The Malaysian investigation began in November after an approach to the director of the Malaysian Special Branch, Bukit Aman, from representatives of the US Central Intelligence Agency and Britain's MI6.
Components thought to be destined for Libya's uranium enrichment programme had been confiscated aboard a German ship in October. Five shipping containers carried components manufactured in Malaysia by Scope, a subsidiary of the Scomi Group.
The report absolved Scope, saying it had not violated Malaysian law. Scomi is owned by Kamaluddin Abdullah, the only son of Malaysia's prime minister, Abdullah Badawi.


Posted by maximpost at 5:49 PM EST
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Powell Says N. Korean Nuclear Work Invites `Calamity' (Update2)
Feb. 20 (Bloomberg) -- Secretary of State Colin Powell told a Princeton University audience that the U.S. will warn North Korea in talks next week that its failure to abandon its nuclear weapons program would be a ``sure way to calamity.''
Powell said the U.S. won't tolerate proliferation of nuclear weapons and will use ``a tough-minded diplomacy'' to persuade North Korea and other governments to give up such efforts.
``Nuclear weapons won't make North Korea more secure, proliferation of nuclear weapons won't make North Korea more prosperous,'' Powell said in the keynote address of a conference to mark the 100th birthday of former ambassador George Kennan, a shaper of U.S. containment policy toward the Soviet Union.
The U.S. will join delegations from South Korea, China, Japan and Russia in Beijing on Wednesday to revive discussions with North Korea aimed at dismantling dictator Kim Jong Il's nuclear weapons program.
North Korea says it wants a security guarantee in exchange for dismantling its arms program. The U.S. says North Korea first must begin dismantling the program in a way that can be verified before the U.S. and allies offer economic aid or the security guarantee.
At the root of the U.S. drive against regimes pursuing illicit nuclear work is preventing the ``fusion'' of such weapons with terrorist groups, Powell said.
``Terrorism is the preeminent danger of our age,'' he said. ``That is why defeating terrorism is our number one priority.''
Libya's Disclosure
Since the last round of North Korean talks ended without progress in August, Libya has revealed a more extensive nuclear ambition than was known to United Nations inspectors, and Pakistan said its top nuclear scientist, Abdul Qadeer Khan, had trafficked in nuclear-bomb materials.
Powell praised Libyan leader Muammar Qaddafi for pledging to halt his pursuit of a nuclear bomb and shift toward improving the lot of the Libyan people through closer relations with the U.S. He also pointed to Iran's disclosure of its nuclear work to international inspectors.
Powell defended the U.S.-led war on Iraq, saying the world had seen Saddam Hussein use weapons of mass destruction on his own people and his neighbors, and the U.S., as well as other governments, believed for years that Iraq had the capability and resources to develop and maintain those arms.
``America did the right thing,'' Powell said, adding Hussein defied 12 years of United Nations resolutions to disarm.
`X' Article
Powell's motorcade was met by several dozen protesters standing in front of the university in Princeton's central Palmer Square yelling in megaphones and standing behind banners critical of the U.S. occupation of Iraq.
Kennan, a 1925 Princeton graduate, in 1947 penned the famous ``X'' article -- so-named because that's how Kennan signed it -- in the journal Foreign Affairs that laid out the so-called containment policy that became the cornerstone of U.S. foreign policy during the Cold War.
Powell said he received a letter from Kennan when he took up the role of chief U.S. diplomat in 2001, and the two men have had a correspondence ever since. Kennan, who celebrated his centenary anniversary Monday, wasn't in the audience today.
To contact the reporter on this story:
Todd Zeranski in Princeton at Tzeranski@bloomberg.net.
To contact the editor of this story: Glen Hall at
1966 or ghall@bloomberg.net.
Last Updated: February 20, 2004 12:50 ES

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Moment of truth for China and the Pyongyang time bomb

By Sol Sanders
SPECIAL TO WORLD TRIBUNE.COM
February 20, 2004
As the U.S. prepares to enter new six-power talks on North Korea's nuclear weapons threat, a question hangs in the air:
Will Beijing with its overwhelming whip hand over Pyongyang do the necessary?
The necessary is, of course, to meet U.S., Japanese, South Korean, and Russian demands it give up pursuit of nuclear and other weapons of mass destruction [WMD] and submit to verifiable inspection.
Given North Korea's history of state-sponsored terrorism and traffic with international organized crime, Pyongyang now represents the most critical threat to world peace and stability. That threat could very well include WMD sales to non-state terrorists such as the perpetrators of the 9/11 attacks.
But this riddle is wrapped in an enigma, another equally poignant question: Will Washington force Beijing's hand?
The syllogism is not all that complicated: Beijing supplies some 80 percent of aid keeping bankrupt North Korea alive. China has old intimate ties to North Korea - most importantly to its military - going back to the Korean War. Beijing sourced much of Pyongyang's nuclear technology. China also has been complicit in the development and sale of Pyongyang's missiles to pariah states.
If the Beijing leaders chose, they could bring Pyongyang to heel. North Korea may be a rogue state, but it is a crippled, dependent rogue state.
It seems likely, in the diplomatic jargon, that the Chinese leadership is "conflicted" over the strategy it should pursue toward North Korea.
It does not want a collapsing regime disgorging a flood of refugees. It does not want a reunited Korea so long as South Korea is a growing source of development capital, technology rade. Nor would it want a strong united Korean state further complicating East Asian politics. And it might just want continuing harassment for the U.S. [and its Japanese ally - a trade-off in the continuing negotiations of a welter of issues between Washington and Beijing]. There is likely divided counsel between Beijing's new Fourth Generation ruling team and former Party leader Jiang Zemin, refusing to leave the stage, hanging on to his chairmanship of the all-powerful Central Military Commissions.
We are told, in an avalanche of propaganda and analysis, from Beijing but also from those in the U.S. who want to put the best face on Chinese motives, a new era of enlightened international collaboration emanates from Beijing. For example, now the second largest importer of oil, China, too, we are told, understands it has no interest in cutting its nose to spite its economic face.
Ignoring this kind of highly speculative geopolitical psychoanalysis which has often led to disaster, the reality is China must balance its interests as does every other power. At the moment, the U.S. relationship has paramountcy. Washington has enormous leverage. China's spectacular but fragile economic growth fragile because it encompasses less than 20 percent of its population, entirely based on exports, exports largely in the hands of American and other foreign corporations [selling to themselves for other markets], and dragging a bankrupt State Owned Enterprise sector and sieve-like financial structure. Its rising raw materials, components, and food import bill is largely paid by the enormous American trade surplus - probably totaling $135 billion last year - which pays deficits with South Korea, Japan, Taiwan, the Mideast and Southeast Asia. China is almost totally reliant on imported technology - most if from the U.S. China's nascent military modernization cannot yet give it sufficient thrust in its own backyard where it still faces the world's superpower.
The chips are, then, largely on the U.S. side of the table. But if the game is poker, the body language as well as the actual hand of the player is at issue.
In a recent Washington public airing, Assistant Sec. of State James Kelly laid out the argument of the U.S. for action - and sounded pretty tough. U.S. policy seemed emboldened by its recent success in the bolte face of Libya which for decades had flaunted U.S. and world opinion in pursuit of WMD. Tokyo - in spite of just making a huge oil deal with Iran against Washington's advice, justified because of Tehran's theoretical concessions to the International Atomic Energy Agency's inspection regime - has begun to crack down on North Korea's second most valuable economic ties to Japan's large ethnic Korean community. South Korea continues to diddle, arguing against all evidence that appeasement will bring Pyongyang around. Russia tut-tuts [but has partially slowed its huge nuclear power involvement in Iran].
President Bush, in the midst of a political campaign, under fire from his Democrat opposition for his strong line on Iraq yet to vouchsafed by his opponents, faces a grim decision: whether to exert maximum influence on China [after he generously publicly supported its campaign against any inferred moves by Taiwan toward "independence"]. But if Beijing's game isn't called, the North Korean bomb appears likely to continue to tick.

Sol W. Sanders, (solsanders@comcast.net), is an Asian specialist with more than 25 years in the region, and a former correspondent for Business Week, U.S. News & World Report and United Press International. He writes weekly for World Tribune.com.

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Chinese marines show their strength

By Christopher Bodeen
Associated Press
SHANGHAI, China -- Elite Chinese marines deployed tanks, speedboats and helicopters in a display of amphibious fighting skills observed by military attaches from 56 nations, newspapers reported Friday.
Shanghai's Liberation Daily newspaper said the drill involved several hundred men and women marines dressed in camouflage uniforms. It said troops "utilized a variety of amphibious weaponry" in an "actual troop drill of a tactical background."
Media reports gave few details, as is typical of China's secretive military. The Liberation Daily said the exercise was staged at a "comprehensive large-scale training ground," but didn't say where.
Although the marines are considered a key component of any Chinese assault, there was no direct indication that Thursday's drill was targeted at rival Taiwan.
China insists Taiwan is part of its territory and has threatened to attack the island if it doesn't agree to unify with the mainland. During Taiwan's 1996 presidential elections, China held war games and test-fired missiles in an ultimately fruitless attempt to intimidate voters into not supporting candidates China disapproved of.
Tensions have been simmering between the two sides since Taiwanese President Chen Shui-bian called for a referendum on whether Taiwan should increase its anti-missile defenses against China. The landmark vote will coincide with Taiwan's presidential election on March 20.
Photographs of the exercise showed troops with rifles running alongside amphibious tanks and speeding across the sea in open boats carrying about six people each. Another picture showed troops running down the rear loading ramps of a pair of Z-8 anti-submarine warfare helicopters.
The reports didn't say what countries the military attaches came from or why they had been invited to observe the drill. However, in recent years China has moved tentatively to boost military exchanges with other nations, and last year staged joint naval rescue exercises with India and Pakistan.
China's marines have been among the biggest beneficiaries of efforts to mold the country's sprawling 2.5 million-strong military into a modern fighting force equipped with high-technology weapons. They would be used to establish beachheads and perform commando operations in an attack on Taiwan or islands in the South China Sea that China claims as its own.
Observers of the Chinese military say the marines consist of 7,000-10,000 troops backed by amphibious tanks and armored personnel carriers, lightweight artillery, missiles, assault boats and hovercraft.
Copyright 2003 The Associated Press.
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Boeing slows work on tanker
By Dave Carpenter
Associated Press
CHICAGO -- Boeing Co. said Friday it is reducing efforts to convert its 767 planes for use as Air Force refueling tankers as a result of government reviews into the controversial program -- a move that will result in as many 150 job cuts at its plants in Wichita and Seattle.
CEO Harry Stonecipher said 600 Boeing employees at those locations will be shifted to other work as the company slows development on a delayed Air Force project that has been costing it about $1 million a day.
"Because important and detailed day-to-day dialogue with our customer is necessary to refine program requirements, we do not believe that continuing development work at the current level of effort is prudent for either the Air Force or Boeing," Stonecipher said in a written message to employees.
The cutback comes after the Pentagon ordered three additional reviews into Boeing's plan to lease and sell 100 jets to the Air Force for use as refueling tankers.
The Defense Department said earlier this month that the Air Force can't proceed with the contract -- already suspended since early December pending an investigation -- until reviews by the Pentagon general counsel, the Defense Science Board and the Industrial College of the Armed Forces are completed.
Those reviews are expected to take at least until May, according to the Defense Department.
The Pentagon's inspector general already had been looking into the case after questions arose last year about ethical issues surrounding the way Boeing pursued the multibillion-dollar contract.
Stonecipher said development efforts on the project will be slowed starting Monday, with key program elements kept intact while the federal reviews proceed. He cited the $270 million Boeing already spent on the tanker program through the end of 2003, not counting the million-dollar-a-day cost through 50 days of 2004.
About 100 contract employees in Wichita will be let go and up to 50 employees in Puget Sound will be laid off, he said.
"We deeply regret the difficulties that this slowdown will pose for our Boeing employees and those of our teammates," Stonecipher said.
Dick Ziegler, a spokesman for Boeing in Wichita, said the 100 contract engineers Boeing released come from various companies working on the tanker modification program.
In unrelated move, Boeing also issued 38 layoff notices Friday to Boeing employees in Wichita, Ziegler said. The 60-day notices are effective April 23. Friday was also the last day of work for 18 Boeing workers who had received earlier notices.
The tanker deal is considered crucial to keeping Boeing's slumping 767 production line alive. Merrill Lynch analyst Byron Callan said in a research report earlier Friday that if the tanker deal remains in limbo by early summer, Boeing likely will move to end production of the 767.
"This could be a close call," Callan said.
Boeing shares were down 9 cents at $44.43 in afternoon trading on the New York Stock Exchange.
Copyright 2003 The Associated Press. All rights reserved.
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New panel to review pollution case
Congress, families push for attention to ongoing questions
By C. Mark Brinkley
Times staff writer
JACKSONVILLE, N.C. -- Responding to pressure from Congress and former Marines, the Corps is stepping up its investigation into polluted drinking water discovered more than 20 years ago in wells serving some family housing and other areas of Camp Lejeune, N.C.
An independent panel, convened at the direction of Commandant Gen. Mike Hagee, will review events and decisions occurring between the discovery of the pollution in 1980 and the closing of the wells in 1985.
"The panel is being convened to gather facts for the purpose of informing our Marines and their families who could have been affected," Hagee said in a statement released Feb. 20. "Continued questions from interested families and other parties, prompted us to examine the chronology of events with more scrutiny. In the course of this deeper examination, we realized additional facts needed to be acquired and reviewed. We must leave no stone unturned on this important issue."
Routine sampling of the drinking water at Camp Lejeune in 1980 turned up chemicals used to clean machinery and weapons, and others used in dry cleaning, in the wells of some base housing units. Those wells were not closed until 1985 and cleanup of the base and a nearby dry cleaner were placed on the national priorities list in 1989.
In 1999, officials from the Agency for Toxic Substances and Disease Registry began searching for more than 14,000 children born to mothers who were pregnant at Camp Lejeune between 1968 and 1985. About 12,600 of those children were located, and surveys show that 103 of them may have suffered birth defects and childhood cancer linked to the polluted water.
Last year, after the preliminary findings were released, Marine officials said they would continue participating in the full ATSDR study through 2006. Under review are cases of childhood leukemia, non-Hodgkin's lymphoma, and such defects as spina bifida, anencephaly, cleft lip and cleft palate, according to the ATSDR report.
The full study will determine whether ingestion of these chemicals, known as volatile organic compounds, by pregnant women can cause these diseases and defects in their children. A 1997 public-health assessment by the agency concluded that such exposure was not likely to cause health problems in adults.
Critics long have countered that the Marine Corps should actively notify everyone who lived at the base -- a group that family advocates number in the hundreds of thousands -- during the years that the polluted wells were used. They also believe that some involved in the investigation actively covered up information for fear of potential lawsuits.
Of particular concern is the Corps' decision to wait until 1985 to close the wells.
The issues resurfaced in February media reports, prompting Sen. Jim Jeffords, I-Vt., to call on the Navy Department and the Department of Health and Human Services to notify anyone who might have been affected.
"I feel that it is entirely necessary to be as completely open, honest and candid with the Marines and their families who served in the Marine Corps at Camp Lejeune," Jeffords wrote in a Feb. 10 letter to Navy Secretary Gordon England. "As a retired Navy captain, I believe the men and women who serve our country in uniform deserve the truth."
A similar letter went out the same day to Health and Human Services Secretary Tommy Thompson.
"A full assessment of the health consequences of the drinking water contamination at Camp Lejeune is long overdue and should begin as soon as practicable," Jeffords wrote. "The prevalence of childhood cancers and birth defects found in the July 2003 ATSDR Progress Report -- and the potential savings in the health and lives of ex-Marines and their families -- is too high to justify any further delay of a more complete study."
Marine officials said the panel will consist of three private-sector professionals with expertise in environmental, engineering and military command issues. The group will review documentation and interview former and current base officials.
"This will be done to clarify the sequence of events that led to the decisions made during the five-year period in question," Marine officials said in the statement. "The panel will operate independently and will have free and open access to all relevant information. The panel will not impact the work of the ongoing ATSDR study."
A report of the panel's findings is to be submitted to Hagee by Sept. 1.
"After reviewing the report, I will make every effort to conclude this matter in a way that is satisfactory to our Marines, their families and the general public," Hagee said in the statement. "The report and any resultant actions will be provided to the families, Congress and the general public as soon as practical."
The increased pressure has been a welcome sight for many family members, who have been campaigning for years to get a deeper investigation. Many have been approached in recent days by national media outlets working on stories about the circumstances surrounding the pollution.
"It's a series of ongoing stonewalling, lies, all kinds of crap," said retired Maj. Tom Townsend, whose son died of a heart defect 37 years ago. "These people are lying through their teeth ... and they're trying to dodge the liability issues."
Hundreds of former family members have filed legal tort claims against the Corps for redress, but still are waiting for a resolution.
Townsend said the Corps should take responsibility for its actions and decisions.
"When you go to Korea and Vietnam for them, and when you come home and they poison your children, it leaves you ticked off." h



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>> QUOTE - "MY MONEY"

Arafat: "They`re after me and my money!"

DEBKAfile`s Special Report
February 18, 2004, 5:09 PM (GMT+02:00)
For Arafat, cash only
Palestinian prime minister Ahmed Qureia (Abu Ala) has been engaged in a last ditch attempt to rescue the European aid program to the Palestinians from total cutoff. Palestinian Authority's coffers, which depend on foreign handouts for 60 percent of their revenues, are depleted. American aid is already lost, since Washington vowed (as DEBKAfile reported exclusively last year) not to give the Palestinians a red cent until they hand over the killers of three CIA security men murdered in a roadside explosion in the Gaza Strip on October 15.
Now, the Americans are pushing hard for Europe to follow suit. The European Union is nonetheless continuing to pay the salaries of about 100,000 Palestinian Authority officials and security officers, but it has posed a key proviso: donations will no longer be handed over in cash to the PA - an invitation to the corrupt practices besetting Palestinian government - but transferred directly into the individual payees' banks accounts. Palestinian officials with no bank accounts will get no paychecks. Thus compete transparency will be assured. However, the Palestinian Authority shorn of its dollar and euro revenues cannot survive. Ironically, Israel continues to make its regular shekel remittances to the PA, a leftover from its undertakings under the defunct Oslo peace accords. This comes nowhere near covering the PA's budgetary shortfall.
Yasser Arafat and the heads of his Fatah faction and Tanzim militia predictably turned down the European proviso, and no wonder: a) To open an account and draw funds from the bank, Palestinian security men will have to show identification; b) they can no longer be forced by their commanders and Arafat to engage in terrorists activities in order to feed their families. As PA officers, they will receive their paychecks directly from the EU.
This Europeans' tough act, which puts the lid on many of Arafat's financial abuses, is intended to meet one of Washington's key demands and so test the chances of being let in on the Bush administration's coming moves in Iraq and the Middle East.
The Palestinian prime minister when he toured Europe last week announced the new arrangement was acceptable to his government. But on his return to Ramallah, he found Arafat had put a furious stop to his first and only autonomous action since assuming the premiership last November.
"They're gunning for me and they're after my money," Arafat spat out to his cronies. "And if we let them get away with it, they'll finish me off along with the entire Palestinian resistance movement!" he said referring to the Americans and Palestinian terrorism and their efforts to extinguish his suicide terror campaign.
According to DEBKAfile's Palestinian sources, since 400 Fatah members handed in their cards in protest against corruption in the Palestinian leadership, Arafat has come to believe that that the Americans are using the bank account stratagem as a tool to be rid of him.
Four developments fuel his suspicions:
1. Fatah and PA intelligence bodies did not pick up the slightest whiff of a protest move in the making. Signed by Fatah rank and file activists in total secrecy, the protest petition caught Arafat's spies by surprise. He therefore concluded it must have been the work of a foreign intelligence service.
2. The signers were sufficiently in the know about Arafat's affairs to correctly finger at least one of his close aides as responsible for the worse excesses in the PA. One was his former financial adviser, Mohammed Rashid - whom they describe as "the Kurd who controls the Palestinian national movement". The estranged Rashid has relocated his base from Ramallah to Cairo and London, where he is in business with another of Arafat's rivals, Mohammed Dahlan.
The fact that Rashid was named did not bother Arafat.
But the second name was a giveaway: Kharabi Sarsur, 64, Arafat's secret emissary, who holds the key to his personal cashbox. No ranking official in Palestinian-controlled territory dares mentioned this name aloud. The lowly Fatah operatives who mentioned Sarsur in their petition were hardly likely to know who he is. According to our sources, he is an important intelligence target - even more so than Arafat himself. Undercover agencies who want to find out what Arafat is up to keep an eye on Sarsur and, in particular, his disbursements of cash. Arafat is certain that only a major intelligence service had the inside knowledge necessary to "out" Sarsur.
3. French and EU authorities have started investigating his wife Suha's money-laundering activities in Paris, where she lives a life Palestinians in the West Bank and Gaza can only dream of. Six months ago, no European in authority would have dared touch Mrs. Arafat. Now, she is a liability making him vulnerable as never before.The money trail is bound to lead from Paris back to the "rais" and the secret Swiss account to which he smuggled PA funds - thence, for the last ten months, in monthly transfers of $1 million each into Suha Arafat's Paris accounts.
Washington knows that Suha is sitting on large sums belonging to her husband and the PA, rated by financiers in West Europe as being in the hundreds of millions of dollars. Arafat believes the Americans persuaded the Europeans to open the investigation, expecting Suha to open up on his hidden wealth rather than go to jail.
4. Arafat has heard that a number of Palestinian bankers, some working within the PA and others in Arab countries, have been intercepted on recent visits to the United States with invitations for "clarification talks" with the FBI. Arafat, his money and secret accounts are the main topics of these clarifications.
Because of these developments, Arafat has come to believe that his final showdown with the United States has begun. He certainly does not propose to let either the Europeans or Ahmed Qureia get in the way of his fight for survival.
--------------------------------------------------
Time Runs out for Sharon's Gaza and Disengagement Plans
DEBKAfile Political Analysis

February 8, 2004, 7:59 PM (GMT+02:00)
Israel finds itself pulled simultaneously in two opposite directions.
Its newly-appointed director of national security, Giora Eiland, warned the Munich security conference Sunday, February 8, that the Palestinians' failure to join Israel in the US-backed road map to peace would leave Jerusalem no alterative other than to initiate unilateral disengagement that would lead to a decision to begin a process of separation between the two peoples. Eiland has been assigned with fleshing out Israeli prime minister Ariel Sharon's plan for pulling the two peoples apart. But at the same forum, Jordan's king Abdullah called for a US-led international alliance to use "some heavy-handedness" to bring Israel and the Palestinians together at the negotiating table.
Both directions, DEBKAfile's political sources find, are equally unrealistic.
First , the Bush administration has more urgent business on its mind these days than a peace plan that goes on and on and never arrives. Its energies are fully engaged in fending off election-year assaults on US intelligence prior to the Iraq war and the al Qaeda's 9/11 attacks and on its global strategies, while seeking glittering achievements to upstage John Kerry's meteoric challenge.
Second , the Palestinian Authority is in a state of collapse. The corrosive weight of 41 months of Yasser Arafat's violent confrontation with Israel has left in its wake chaotic administration, corruption, infighting and disaffection. On Saturday, February 7, more than 300 members of Arafat's ruling Fatah organization collectively handed in their membership cards in protest against bad leadership and corruption. The Palestinians are stuck in the rut of their suicide bombing offensive - 10 such attacks were foiled in January, one got through killing eleven aboard a Jerusalem bus. Their crisis-ridden leadership is no shape to respond to calls for peacemaking or even to care for its people's pressing needs for jobs and aid.
Under heavy pressure from president Hosni Mubarak in Cairo Sunday, February 6, the Palestinian prime minister Ahmed Qureia finally agreed to get together with Sharon in ten days' time, but DEBKAfile's Palestinian sources warned that nothing would come of the meeting.
Third , Sharon's plans for disengagement and the evacuation of the Israeli civilian and military presence from the Gaza Strip - a go-it-alone strategy - could be popular if it were intelligently articulated and feasible. This is far from true at the moment. Many Israelis rubbed their eyes in distrust when they heard one of the great champions of Israeli settlement across the Green Line offering to evacuate the Gaza Strip against the advice of the military. Sharon qualified the offer; he would only go ahead with Washington's backing and only if the US-backed peace effort got nowhere. The first qualification foredooms the plan to failure, before he even climbs over the multiple hurdles of swinging his government, party and Knesset behind his plans and overcomes the controversy over if and how to conduct a referendum.
This is because the predecessors of Bush and Sharon - Bill Clinton and Ehud Barak - locked horns four years ago on the very subject of the dollars and cents cost of evacuating Israeli settlements from the Gaza Strip and West Bank. Clinton said not a cent would come from Washington. Someone then came up with a plan for the United States to buy entire settlements, lock, stock and barrel, and resell them at a nominal price to the Palestinians. No one bought into that real estate deal either.
The question of who will pay for the implementation of Sharon's Gaza evacuation plan, the resettling of settlers and redeployment of the military, remains unanswered.
Last week, deputy prime minister Ehud Olmert spent 24 hours in Washington, hard-selling the Gaza and disengagement programs to American leaders. He faced suspicions there, as at home, that the Gaza scheme is a stratagem to keep the West Bank communities in place and divert attention from the implications of bribe-taking hanging over the prime minister's head. All the same, the White House decided to send over two US officials for a closer look at the Sharon concept. Deputy national security adviser Stephen Hadley and the senior director of the national security council, Elliot Abrams, are due in Jerusalem this week and will report on their impressions to the White House.
As a gesture to soften the White House's disapproval of its security barrier, which is integral to the concept, the Sharon government decided to lop 100 km off the 700 km of its final route by straightening out the loops curving into the West Bank. Less publicly, work on the fence has more or less tapered off; only the undisputed segments in the north have been completed.
However, the likelihood is that, even if Sharon's blueprints are found worth developing, they will not warrant serious attention in Washington until early 2005 after the US presidential election. By that time, the Middle East will be a different place calling for different plans. Sharon may have reason to rue the fact that he missed the American train when it rode through. Today, Washington's overriding interests lie in Iraq, Libya and Sudan, its long and deep strategic relations with the Arab world beginning to be relegated to the past.
This process is not lost on the 22-member Arab League. After a ten-day visit to Baghdad in December, a fact-finding mission returned deeply concerned by the power-sharing set-up they found and what they consider the undue autonomy awarded the Kurdish and Shiite Muslims. The mission warned that the geographic and ethnic federalism taking shape in Iraq is the prelude to dividing the country up in a way that seriously undercuts the share of the national cake granted the Sunni Muslim Arab community that was the backbone of the Saddam regime. These findings will be submitted to the Arab League's foreign ministers' session next month and later to an Arab summit.
But the Israeli prime minister errs if he counts on merging his plan to separate Israel from the Palestinian Arabs into America's disengagement from the Arab world, for two reasons:
1. Washington will never admit it is distancing itself from Arab interests, although its calls for democracy, freedom and reforms are generating that distance.
2. The White House does not want to see Israel involved in this process. Bush believes the Israelis, the Palestinians and the Arabs at large had their chance to enlist the US for a Middle East peace push on and after June 1, 2003, when he attended the Sharm el-Sheikh and Aqaba summits for that very purpose. Since seven months have gone by without a single significant step in that direction, he regards the Palestinians and the Arabs as having rejected his proffered hand and has turned his attention elsewhere. Israel too is seen in Washington as having wasted those precious seven months before pulling an innovative plan of action out of its hat.

--------------------------------------------------------------------------------

US Chases Saddam's Money Trail to Guerrilla War
From DEBKA-Net-Weekly 144 Feb. 6, 2003
February 17, 2004, 10:46 PM (GMT+02:00)
Black hole in Iraq`s economy
Some revealing details are now emerging about the $1 billion Great Bank Heist which Saddam Hussein's henchmen staged at the Iraqi National Bank in Baghdad on March 19, hours before the US "shock and awe" air raids.
For instance, Saddam handwrote his cash demand on a plain sheet of paper and signed it in pencil. That sheet was among the documents US forces found in the deposed ruler's spider hole, when they captured him on December 12. The stack shed no light on the whereabouts of the ousted ruler's weapons of mass destruction but, once the simple codes were cracked, they held clues to some of the cash he had socked away and named power of attorney holders through whom he enjoys access to the loot.
Other documents in the pile, according to DEBKA-Net-Weekly's intelligence sources, lifted the lid off the clandestine workings of the deep-hush 14th Directorate - Office of Special Operations - of the Dawairat al Mukhabarat al-Amah, or Department of General Intelligence. This dread department, known also as N-14, was responsible for running agents on clandestine and sensitive special operations outside the country - particularly assassinations. Its main training facility was located at Salman Pak, 12 miles (19 km) southeast of Baghdad. N-14 orchestrated the failed assassination of former President George Bush during a visit to Kuwait in April 1993.
The long hours its agents invested in acquiring language and orientation skills for blending into the countries of their missions came in useful after the US invasion of Iraq, when they were reassigned new duties as guardians of the deposed dictator's fortune, trustees for his worldwide financial and business empire with responsibility for remitting profits as directed.
These professional killers pose "behind enemy lines" in smart suits as non-Iraqi businessmen living under the false identities registered in their Saudi, US, British, Syrian or Egyptian passports.
One such Syrian businessman recently turned up at the national bank of Syria with a power of attorney note for $1.1billion of Iraqi funds on deposit there. The note, passed on to the Americans, proved to have been written with the "Saddam pencil." But the "Syrian businessman", presumed until then to divide his time between Frankfurt, Munich, Geneva and Damascus, had disappeared.
When asked by the Americans to hand over the cash looted from Iraq, Syria balked, saying: "Saddam is in your custody. We are transferring to you a copy of the power of attorney he gave to the `Syrian businessman', whom we do not know. If you can show us a more recent power of attorney from Saddam Hussein, we can compare signatures and act on your prisoner's instructions. Without the right documentation, we cannot help you."
Before converting the old currency with Saddam's portrait to new dinar notes, Bremer and US calculated some four trillion dinars ($2.85 billion) would be needed for the conversion.
Their estimate was far too modest. The amount Iraqis rushed to trade in had soared to 6.3 trillion dinars, the equivalent of $4.5 billion, by the January 15 deadline for handing in old notes for new. It then turned out that around 40 percent of the cash in circulation in Iraq was in the hands of pro-Saddam elements, specifically N-14 operatives.
US and Iraqi economic planners had taken it for granted that the excess funds had come from dinars ordinary Iraqis had squirreled away. They were wrong. The money had been hoarded in foreign cash - euros, yens and Australian dollars for preference. It surfaced as post-war Iraqis went on spending sprees and began buying American and Japanese cars. Since early May, the keys of more than a million new vehicles, worth more than $5 billion, have been handed to eager customers in the main cities of Baghdad, Kirkuk, Mosul, Najaf and Karbala. Purchases are mostly made in foreign notes - no bank transactions.
Over the past two months, the dinar has strengthened sharply, gaining more than
30 percent against the dollar as the exchange rate has gone from more than 2,000 to around 1,400.
A senior Iraqi banking official explained the newfound affluence up and down Iraq to DEBKA-Net-Weekly: "The provisional government is committed for the time being to feeding 25 million Iraqis gratis. Saddam's system of food stamps and virtually free water and fuel goes on uninterrupted by the war. The only thing that has changed is the standard of services and the diversity of consumer products available. This situation clearly cannot go on much longer if the economy is to be rebuilt on a healthy footing."
According to DEBKA-Net-Weekly's sources, Bremer's team has concluded that a stable economy and realistic Iraqi exchange rate will remain elusive as long as Saddam's agents maintain their iron grip on the cash in circulation and the captured dictator continues to control vast investment capital overseas. At the same time, ordinary Iraqis continued to hoard black market foreign currency.
Even if a sovereign government is installed in Baghdad without hitch and a general election goes smoothly, the new regime will have little control over the economy.
DEBKA-Net-Weekly's intelligence sources have obtained more information expanding on Saddam Hussein's private currency printing enterprise.
It now appears that rather than running a private mint, Saddam, his sons and the commander of the 14th Directorate enjoyed free access to a sealed annex of the national mint and creamed off supplies for the slush funds of the presidential bureau and secret service chiefs. These sums were never officially recorded or counted in determining Iraq's gross domestic product. No one but Saddam knows exactly how much was run off in the sealed annex or its destinations. The result was the creation of two Iraqi economies - one official, the other black. Most is believed to have been invested overseas and an estimated 15 percent to 20 percent of the profits returning to Iraq to defray the costs of running a guerrilla war against the US-led coalition. The fighting groups loyal to the deposed dictator appear to command an almost unlimited war chest.
However, five key people are suspected by US investigators of holding short cuts to this information, according to DEBKA-Net-Weekly's intelligence sources - three in Syria and two in Lebanon. The members of this tight group handled money transfers on behalf of the fugitive Iraqi regime leaders and are the only people who know the identities of the 14th Directorate operatives overseeing Saddam's financial empire.
The flurry around Saddam's deposits in Syria and the discovery of the power of attorney in the hands of a "Syrian businessman" have prompted Saddam's eldest daughter Raghed Kamal to change her plans. On January 16, DEBKA-Net-Weekly 141 reported her request to relocate from Amman to Paris and re-establish the Iraqi Baath party. Now Saddam's daughter has applied for permission to move to Damascus instead of the French capital.

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Copyright 2000-2004 DEBKAfile. All Rights Reserved.

>> MORE TAHIR DETAILS...


Malaysian Inquiry Reveals Nuclear Path
By ROHAN SULLIVAN
ASSOCIATED PRESS
KUALA LUMPUR, Malaysia (AP) -
A Malaysian inquiry revealed that the father of Pakistan's nuclear program sold uranium enrichment equipment to Iran for $3 million and signed lucrative contracts for Libya, part of a thriving black market in nuclear arms, according to a police report released Friday.
The report - based on interviews with one of the operation's purported middlemen, Bukhary Syed Abu Tahir - reveals details about alleged deals between Pakistan, Iran and Libya. It lays out the extent of the black market, which appears to have included a company owned by the son of Malaysia's prime minister, as well as British and Swiss middlemen.
Tahir, a 44-year-old Sri Lankan, says he was one of several people who helped Abdul Qadeer Khan, the father of Pakistan's nuclear weapons program, sell nuclear technology to willing bidders. Khan confessed this month to leaking nuclear technology to Iran, Libya and North Korea.
Malaysia's investigation into Tahir began after a company controlled by Prime Minister Abdullah Ahmad Badawi's son was said to have unwittingly supplied the network.
Police said the 12-page report on the three-month investigation will be given to the International Atomic Energy Agency, the U.N. nonproliferation watchdog. The Malaysians urged the agency to investigate European individuals and firms.
President Bush singled out Tahir and Malaysia in a speech last week that urged tougher international regulations.
Among details supplied by Tahir and laid out in the report are deals between Khan's operatives to sell nuclear equipment to Iran for $3 million in cash and to supply a uranium compound used in the enrichment process to Libya.
According to Tahir's account, Libya approached Khan in 1997 for help building a uranium enrichment program. Negotiations began in Istanbul, Turkey, between the Pakistani scientist and a Libyan identified as Mohamad Matuq Mohamad.
Around 2001, Khan told Tahir that "a certain amount" of enriched uranium was flown from Pakistan to Libya, the report said. Subsequently, centrifuge units arrived in Libya from Pakistan.
What Khan's network couldn't get for Libya directly, it helped the country build, sending machines and technicians to set up centrifuge-making operations and calling it "Project Machine Shop 1001," according to Tahir's account.
Centrifuges are sophisticated machines that can be used to enrich uranium for nuclear weapons or nuclear power.
Late last year, Libya acknowledged trying to develop weapons of mass destruction and pledged to scrap them. Unlike Libya, Iran denies ever having had such ambitions.
Tahir told police he was recruited to Khan's network in 1994. That year, on Khan's instructions, Tahir arranged for two containers of used centrifuge units from Pakistan to be sent to Iran aboard an Iranian-owned merchant ship, the report says.
An unidentified Iranian paid for the units with about $3 million worth of dirhams, the United Arab Emirates currency.
"The cash was brought in two briefcases and kept in an apartment that was used as a guesthouse by the Pakistani nuclear arms expert each time he visited Dubai," the report said.
One operative named as working for Khan is Peter Griffin, a Briton whom Tahir alleged designed the Libyan workshop and sent eight Libyan technicians to Spain to learn how to use lathes for centrifuge parts.
According to the report, two others were Freidrich Tinner, a Swiss engineer whom Khan met in the 1980s, and his son, Urs Tinner, 39, who allegedly worked with Tahir in getting Malaysian company Scomi Precision Engineering, or SCOPE, to produce centrifuge parts.
SCOPE engineered more than 25,000 individual parts for a Dubai-based company owned by Griffin, Gulf Technical Industries, under a contract negotiated by Tahir, and shipped them between December 2002 and August 2003.
Swiss authorities have launched an investigation into Urs Tinner's alleged role, officials there said Friday. The Tinner family sent The Associated Press a statement saying Urs Tinner worked for SCOPE in Kuala Lumpur as a technical consultant for the last three years.
It said he controlled the manufacture of machinery parts, but that "information about the customer or the purpose of the goods was unavailable to him during the whole period."
The parts, in boxes marked with SCOPE's name, were seized in the Mediterranean last October en route from Dubai to Libya.
The family statement said Urs Tinner stopped working for SCOPE last October because he had not been paid his consultancy fees for several months.
"Other family members were not involved in this process at any time," the statement said.
SCOPE is a subsidiary of Scomi Group, an oil-and-gas firm whose biggest stakeholder is Kaspadu, an investment company owned by the Malaysian prime minister's son, Kamaluddin Abdullah.
Tahir joined Kaspadu as a director in December 2000, about the same time that Scomi established SCOPE and built its factory to make the parts ordered by Gulf Technical Industries, according to public documents. Tahir left the board in early 2003.
Scomi and its staff thought the parts were to be used in the oil and gas industry in Dubai, the report said. Only Tahir and Tinner, whom he brought in to oversee the work, knew the true purpose and ultimate destination.
A Malaysian official, speaking to AP on condition of anonymity Friday, said there are no immediate plans to detain Tahir because investigators had found no "compelling evidence" that he broke Malaysian or other laws.
But Tahir is under close surveillance, the official said.

------------------------------------------

>> DETAILS ON THE OTHER KHAN...

Pakistani Admits Ties to Nuclear Suspect
By PAUL HAVEN
ASSOCIATED PRESS
ISLAMABAD, Pakistan (AP) - A Pakistani man named in U.S. court documents as part of a nuclear proliferation scheme acknowledged he had business dealings with a main suspect in the case, but said in an interview Friday with The Associated Press that he did nothing wrong.
The man, Humayun Khan, was named in a U.S. federal court case against Asher Karni, an Israeli who was arrested in Denver on New Year's Day. U.S. authorities accuse Karni of using front companies and falsified documents to buy nuclear bomb triggers in the United States for shipment to Pakistan.
Khan acknowledged that his company was a supplier of high-tech devices for the Pakistani military, but said he imported military products only for use in armed forces repair shops. He said he also supplied civilian companies and Pakistan's Education Ministry.
Khan said it was unthinkable that he would have openly used the name of his family company, Pakland PME Corp., if he were involved in an illicit arms deal.
"There is a saying we have that robbers and thieves wear masks," Khan told AP in an interview at his office in a dilapidated building in the Pakistani capital. "Would I openly go and ask this man for something that I wanted to put in a nuclear system and use my own name? It is absurd."
The father of Pakistan's nuclear program, Abdul Qadeer Khan, acknowledged this month that he headed a clandestine group that supplied Pakistani nuclear technology to Iran, Libya and North Korea. Washington has accepted a decision by President Pervez Musharraf to pardon the scientist, but it is pressing Islamabad to clamp down on the weapons network
Humayun Khan showed an AP reporter documents that appeared to indicate he paid Karni's South Africa-based company, Top-Cape Technology, $4,580 in July 2002 for a specialized power supply box, but he said the device was for civilian use.
Khan said another deal to buy a magnetometer from Karni for use in an airport project in July 2003 fell through when he realized Karni had a dubious reputation and was an Israeli.
Pakistan and Israel have no diplomatic ties, and Pakistanis are banned from doing business with Israeli businesses. Khan said Karni had told him that he was a Palestinian.
Khan's claim to have cut off contact with Karni last summer seem undermined by e-mails from his account to Karni filed in court that date from August, September and October 2003.
Among the documents filed in court is a copy of an invoice for Karni's commission from Pakland PME for the originally attempted purchase of 200 devices called triggered spark gaps. The devices can be used in machines to break up kidney stones, but exports are restricted because they also are key to triggering nuclear detonations.
When Karni e-mailed Khan last summer that he couldn't get the spark gaps, Khan messaged back: "I know it is difficult but thats (sic) why we came to know each other, please help to re-negotiate this from any other source."
E-mails from Khan seeking infrared sensors for Sidewinder missiles refer to the part number from Lockheed Martin Naval Systems (619-A) and to the missile itself by its U.S. military designation, AIM-9L.
"Customer is anxious, please advise!" Khan wrote to Karni last summer about the infrared detectors. In an e-mail dated May 29, Khan wrote, "We urgently require the following detector," then listed the part number.
In the AP interview Friday, Khan denied he had ever requested the infrared sensors or a sophisticated oscilloscope, a measuring device that could be used in nuclear weapons programs.
Khan indicated it was possible, however, that a former employee may have used his name and e-mail address to contact Karni while he was out of the office because of his wife's illness. The man, Mohammed Ali Rafi, has fled to Dubai, Khan said.
"We're trying to track him down," he added.
The U.S. court documents indicate Karni had asked an oscilloscope manufacturer, Oregon-based Tektronix Inc., if he could buy one of the devices for shipment to Pakistan, but the company told him to seek a U.S. export license.
Khan said his company is a representative in Pakistan for Tektronix, and rejected any notion that he would have had Karni contact the company.
Khan said he could not prove his innocence because a computer virus destroyed all his company's records earlier this month.
"The timing is very unfortunate, I know," he said, adding later:
"When they find documents in Pakistan that prove that I was the one who did this, then they can come and take me away."
---
Associated Press reporter Matt Kelley in Washington contributed to this report.





Posted by maximpost at 5:44 PM EST
Permalink

IRAN: THE DEATH OF ILLUSION
By AMIR TAHERI
February 20, 2004 -- 'WE must turn a page and move on." So Ali Khamenei, the "Supreme Guide" of the Islamic Republic in Iran, advised his compatriots earlier this week. He was referring to the parliamentary elections held today and prearranged to ensure almost total victory for his own faction within the regime.
Even a month ago, not many would have predicted such an easy victory for the faction of which Khamenei is the figurehead. The rival faction, whose standard-bearer is supposed to be President Mohammad Khatami, was expected to put up a real fight. It did not, because, lacking a popular support base, it didn't have the stomach for a real fight.
The Iranian election experience puts an end to several illusions.
Illusion No. 1: That the mere holding of elections is a sign of democratization. Now we know that, although there can be no democracy without elections, it is possible to have elections without democracy.
The Khomeinist electoral recipe is simple and efficient.
It starts by making sure that all the candidates are handpicked for their total loyalty to the leader. Next, it makes sure that there is no real election campaign. The candidates are not allowed to criticize the leadership. Nor can they offer programs that differ with the essential options of the leadership.
The whole campaign lasts only one week, and no one is allowed to spend more than $10,000 on a campaign. Candidates are denied access to the heavy mass media such as radio and TV, and any material they put out must meet the authorities' approval.
Finally, winning a majority of votes is not enough. A victory must still be confirmed by no fewer than 11 different layers of authority, topped by the Council of the Guardians of the Revolution, which can nullify any or all of the results.
The purpose of such a system of elections is not to challenge the government of the day and to offer alternative policy choices. It is to pay allegiance to the rulers.
Illusion No. 2: That this regime can be reformed from within.
No system can be reformed unless it opens itself to new, especially rival, forces. And that means sharing power with groups and parties that, for one reason or another, have been excluded from decision-making.
Reform does not consist solely of new ways of doing things. It also requires that different people do at least some of those new things. We saw that fact illustrated in the Soviet Union of the late 1980s, when Mikhail Gorbachev wanted to change things while maintaining his Communist Party's monopoly on power.
Illusion No. 3: That Iran has a united domestic opposition force that has a coherent analysis of the nation's situation and a clear vision of its future.
Now we know that the so-called "reformist" camp did not exist except in the imagination of some Western commentators. This election has broken that "camp" into no fewer than 18 different groups, some of which have boycotted the elections while others, although denied the right to field candidates of their own, opposed the boycott in the name of revolutionary solidarity.
The "reformist" camp (which presented absolutely no major reform program in any field) consisted of a crowd as random as that of people at a bus stop who have nothing in common except a desire to get on the next bus.
A credible opposition cannot be made of occasional student riots, farcical sit-ins in the parliament, speeches about Schopenhauer and Hegel and Colgate smiles of the kind President Khatami excels in. Before anything else, it needs to show why the present system is bad and how and with what it should be replaced.
In the past decade or so, Iranian opposition has generated much heat but little light. It has shown a great deal of passion but little thought. Romantic preoccupation with vague generalities has been its wont, while the Khomeinist establishment has focused on the concrete issues of power and its practice.
In other words, the Iranian system is blocked not only because the establishment does not wish to share power (what establishment would?), but also because there is no credible opposition force on the scene.
It is not enough for a majority of the people to be unhappy with a regime for that regime to consent to change and reform. There can be no democratization without an opposition capable of offering clear alternatives to a government's analyses and policies.
WITH the death of these illusions, the Iranians, and others interested in Iran, must review some of their recent assumptions.
The key lesson to Iranians is that the alternative to this regime cannot emerge from within it. It is possible, and to some extent even happening now, that large segments of the establishment drift away from it. But, unless they are absorbed into an opposition, they will amount to nothing but flotsam and jetsam of a turbulent political life.
As the Prophet said: There is always something good in what happens. The Iranian election farce is no exception.
It shows that the present regime's legitimacy does not come from the ballot box but from its ability to impose its will by force if necessary. It obliges Iran's neighbors, and the major powers interested in the region, to abandon their illusions and to either accept the present regime on its own terms or designate it as a foe that must ultimately be brought down.
The death of illusions in Iran also means the death of the European policy of "constructive dialogue," first proposed by the Germans in the 1980s and now most actively pursued by the British. That policy was based on the assumption that the regime could reform itself, peacefully and speedily. It is now clear that it cannot.
Thus the Europeans face a stark choice:
* They can decide to hold their noses and continue dealing with the Iranian regime because they need its cooperation on a number of issues, notably nuclear nonproliferation, Iraq and Afghanistan.
* Or they can orchestrate a set of new diplomatic, economic and even military pressures on the regime as a means of encouraging the emergence of a genuinely democratic internal opposition.
For its part, the Bush administration needs to develop a coherent analysis of the Iranian situation. It must decide whether or not Iran is, in the words of the State Department's No. 2, Richard Armitage, a "sort of democracy," or a despotic regime using religion and violence to remain in power.
Short-term realpolitik may counsel an accommodation with the present regime in Tehran, much as it has determined Washington's China policy. But that would mean the premature death of President Bush's ambitious plan for "a new Middle East." It would also give the Islamic Republic time to assemble an arsenal of nuclear weapons, and other weapons of mass destruction, which the Tehran leadership regards as its best insurance policy.
Today a page is, indeed, turned in Iran's recent history. But it may not have been the same page that Khamenei had hoped for.

E-mail: amirtaheri@benadorassociates.com
NEW YORK POST is a registered trademark of NYP Holdings, Inc.
-------------------------------------------------------------------------------

'I would live in America, no problem'
(Filed: 20/02/2004)
David Blair talks to young Republican Guards in Teheran who defy the official view of the US
The old American embassy in Teheran might have been seared into the world's consciousness as the cradle of Iran's revolution, yet the talk among the young Revolutionary Guards stationed there does not match the murals shouting defiance from battered walls.
"I would live in America, no problem," said one 22-year-old, who added that he associated the country with "love and freedom".
Nearby, "Down with USA" was painted on the wall in garish red and yellow hues.
Another guard, also in his 20s, added: "Our government has one view of America but the people have another.
"Our government tries to show the US as an enemy of our country and of our people. All of the young believe the US is good. Most of the people believe this."
The opinions are in tune with a new generation. More than half of all Iranians were not born when a crowd of thousands, led by the nascent Revolutionary Guards, scaled the embassy walls in November 1979 and stormed the imposing, red-brick building.
Seven months after Ayatollah Khomeini had proclaimed the Islamic Republic, Iranians took revenge on America for having supported the ousted Shah. They occupied the embassy for more than a year and 66 diplomats were taken hostage. The diplomats stayed in captivity until Jimmy Carter's presidency ended in January 1981.
Iran's revolutionary regime sought to milk the coup for all it was worth. The old embassy was turned into a temple of anti-Americanism.
The building houses a museum dedicated to Washington's supposed crimes. A miniature Statue of Liberty planted on the embassy's lawn wears the grotesque face of a skull and bare ribs protrude from her shrunken chest. The bald eagle crest that once adorned the gates has disappeared, defaced by countless hammers and chisels.
But today the museum is virtually defunct. It opens only on selected anniversaries, chiefly for the benefit of foreign visitors.
Some of those who scaled the embassy walls in 1979 are now among the reformist politicians who have been disqualified from contesting today's parliamentary election. About 2,500 candidates have been barred from standing, including 80 sitting MPs.
An official survey suggests that turnout in the election will be about 30 per cent. This compares with the 67 per cent in the last one, in 2000, when reformers won 190 of parliament's 290 seats.
A low turnout would almost certainly allow opponents of reform to retake control of parliament.
Millions of Iranians are grappling with this dilemma. A text message circulating on mobile phones yesterday read: "The ballot boxes are the coffins of freedom. We will not take part in the funeral of freedom."

? Copyright of Telegraph Group Limited 2004
------------------------------------------------

Source Gives Details of Iran Nukes Deal
By ROHAN SULLIVAN
Associated Press Writer
KUALA LUMPUR, Malaysia (AP)--Rogue Pakistani scientist Abdul Qadeer Khan sold nuclear weapons-making equipment to Iran for $3 million and had enriched uranium shipped to Libya for its atomic program, police said Friday, citing the alleged financier of an international trafficking network.
In the first insider's account of the black-market nuclear program, Buhary Syed Abu Tahir told Malaysian police that Khan asked him to send two containers of used centrifuge parts from Pakistan to Iran in 1994 or 1995.
Tahir also said Libya received enriched uranium from Pakistan in 2001, police said.
President Bush has called Tahir the ``chief financial officer and money launderer'' of the network run by Khan, who gave the Islamic world its first atomic bomb.
Tahir is in Malaysia and has been questioned by authorities about his connections to Khan in this Southeast Asian country.
A report released by police Friday provides a detailed account of the network headed by Khan, the father of Pakistan's nuclear program, who confessed earlier this month to leaking nuclear technology to Iran, Libya and North Korea.
Police said the 12-page report on Tahir's Malaysian connections will be given to the International Atomic Energy Agency, the Vienna, Austria-based U.N. organization that oversees the international Nuclear Nonproliferation Treaty.
Malaysian authorities say they will cooperate if the IAEA seeks further action.
Tahir told Malaysian authorities he organized the shipment of two containers of centrifuge parts from Dubai to Iran aboard an Iranian merchant ship, the report says. Centrifuges are machines that can enrich uranium for weapons and other purposes.
``Payment for the two containers of centrifuge units, amounting to about $3 million,'' was paid by an unnamed Iranian, the report said.
``The cash was brought in two briefcases and kept in an apartment that was used as a guesthouse by the Pakistani nuclear arms expert each time he visited Dubai,'' the report says, identifying Khan as the arms expert.
Tahir said Khan told him ``a certain amount'' of enriched uranium was flown to Libya from Pakistan on a Pakistani airliner in 2001, and a ``certain number'' of centrifuges were flown to Libya direct from Pakistan in 2001-02, the report said.
Malaysian officials said earlier that Tahir broke no Malaysian laws, but they would keep him under surveillance.
Tahir, 44, is married to a Malaysian and has permanent residency status here.
Tahir vacated his apartment in one of Kuala Lumpur's most exclusive suburbs Wednesday after an Associated Press reporter sought him out for comment on allegations he was a key deputy in the smuggling network.
He is a former business associate of Kamaluddin Abdullah, the son of Malaysian Prime Minister Abdullah Ahmad Badawi, who promised the police investigation would be conducted ``without fear or favor.''
A Malaysian company controlled by Kamaluddin, Scomi Precision Engineering, has acknowledged making 14 ``semifinished components'' _ which may amount to thousands of parts--for a Dubai-based company, Gulf Technical Industries, under a contract negotiated by Tahir. They were seized in October while being shipped from Dubai to Libya.
Authorities say the parts were for centrifuges, but Scomi says it did not know what the parts were for.
The release of the police report comes as the international investigation into Tahir widened to Kazakhstan.
The Kazakh intelligence agency, the National Security Committee, is investigating allegations that an affiliate of a company linked to Tahir, SMB Computers, was dealing with highly enriched uranium, spokesman Kenzhebulat Beknazarov said.
SMB is a Dubai-based company established by Tahir and his brother that Bush alleged Tahir used as a front to organize the clandestine movement of parts for centrifuges.
Malaysian Foreign Minister Syed Hamid Albar complained Friday that his nation has been unfairly singled out by Bush in calling for a crackdown on the international nuclear black market.
``Malaysia should not be dragged into the debate of being a country that is involved in the supply of components or otherwise for weapons of mass destruction,'' Sayed Hamid said. ``We have no capability.''
He said most nuclear weapons came from Europe and the United States, ``but nothing has been talked about these people.''

AP-NY-02-20-04 0905EST

Copyright 2004, The Associated Press.
-----------------------------------------

>> TAHIR DOSSIER...
Multinational network aided Pakistan's nuclear help to Libya, report says
Ray Bonner NYT
ISTANBUL Black-market shipments to Libya of nuclear components, including enriched uranium, began with a meeting in Istanbul in 1997 between Libyan officials and the Pakistani nuclear scientist Abdul Qadeer Khan, according to the principal middlemen in the operation.
One Turkish company supplied aluminum casting and another contributed electrical cabinets and voltage regulators, the middleman, B.S.A. Tahir, has told the Malaysian police.
But the network included companies and citizens of Germany, Switzerland, Spain, Italy and Britain, as well as Dubai and Malaysia, according to a report by Malaysian investigators that was released on Friday in Kuala Lumpur.
"Some of the suppliers were believed to be aware that these components could be used for uranium enrichment centrifuges," the report says, and others were not.
The report was based on police interrogation of Tahir, 44, a businessman who was a key middleman in the network and who has been under close police scrutiny custody in Malaysia since American authorities alerted the Malaysian police last November to the network to supply Libya.
It wasn't just Libya. On one occasion, Tahir, acting for Khan, arranged for the shipment of two containers of centrifuge units from Pakistan to Iran, on a merchant ship owned by an Iranian company, according to the report. The equipment, which cost about $3 million, was paid for in cash taken in two suitcases to Dubai and kept in an apartment was has used as a guesthouse by Khan when he visited there, the Malaysian report says.
The 12-page report does not mention Khan by name but refers to him as the "Pakistani nuclear arms expert" and "akistani scientist."
After saying that Mr. Tahir visited Pakistan, obtained contracts to sell to "Khan Research Laboratory," which was when he met "the Pakistani nuclear expert," the next two lines of the Malaysian report were blacked out. Two lines are blacked out after the report's statement that visited tained contracts to sell to "Khan Research Laboratory," which was when he met "the Pakistani nuclear expert," the next two lines of the Malaysian report were blacked out.
After the 1997 meeting with Libyan officials in Istanbul, there were meetings in Casablance and Dubai, the report says.
In 2001, "a certain amount of UF 6 [enriched uranium] was sent by air from Pakistan to Libya," the report says. It was shipped on a Pakstiani airliner, but Mr. Tahir could not remember the name,according to the report.
In addition to supplying equipment to Libya, a major undertaking was "Project Machine Shop 1001." This was for the purpose of manufacturing centrifuge components in that could not be obtained outside Libya.
Machines for the workshop came from companies in Spain and Italy, the report says.
This project was supervised by Peter Griffin, Mr. Tahir told the Malaysian police. A British engineer, Mr. Griffin first began working with Mr. Khan in the early 1980s, according to British intelligence, which Mr. Griffin confirmed in a recent telephone interview.
He provided the plan for Machine Shop 1001 and a lathe, the report says. He also arranged for 7 or 8 Libyan technicians to go to the company in Spain, according to the report.
In a separate interview, a Western investigator said that the Spanish company had supplied sophisticated tools that were needed for the repair and maintenance of nuclear centrifuges.
In Dubai, Mr. Griffin set up a company called Gulf Technical Industries, which was partially owned by his son, Paul.
Neither of the Griffinscould be reached for comment Friday but in recent weeks, Paul Griffin has denied that he or his father had ever done anything illegal.
Sometime in 2001, Mr. Tahir, acting on behalf of Gulf Technical Industries, signed a contract with a Malaysian company, Scomi Precision Engineering, to supply centrifuge components.
Scomi officials have said that they did not know the parts were intended for Libya, but thought they were going to be used by an oil and gas company.
To oversee the production at Scomi, Mr. Tahir sent Urs Tinner, a 39-year old Swiss engineer, the Malaysian report says.
Mr. Tinner's father, a mechanical engineer, had dealings with Mr. Khan going back to the early 1980s, according to the report. He owns a Swiss company, PhiTec, which the Malaysian report spells "Cetec."
Mr. Tinner bought machines and services from his father, and brother, Marco, who owns another company, Traco, according to the report.
While working at Scomi, Urs Tinner took measures to protect the blueprints and hide any evidence of his presence, the report says.
Scomi finished making the centrifuge parts in late 2003, and after that Urs Tinner left, the company has said. When he left, he took the hard drive with him that had the drawings, as well as his personnel file, the Malaysian report says. "This gave the impression that Urs Tinner did not wish to leave any trace of his presence there," the Malaysian police concluded.
The Scomi components were on board the BBC China, when it was seized last Oct. That led to the unraveling of the Khan network.
The New York Times

Copyright ? 2003 The International Herald Tribune
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L'inqui?tant Dr Khan
LE MONDE | 20.02.04 | 14h01 * MIS A JOUR LE 20.02.04 | 16h57
Le p?re de la "bombe islamique" a reconnu sa responsabilit? dans la fuite de technologie nucl?aire. Pr?sent? comme un flambeur m?galomane, il conserve pourtant, au Pakistan, une aura de h?ros national.
Au pied des marches du mausol?e du sultan Mohammad Ghauri, fondateur de l'Empire musulman de Delhi, une r?plique (grandeur nature) du missile qui porte son nom est encadr?e de deux grands portraits peints : ? droite, le sultan, ? gauche, "le h?ros du Pakistan, le Dr Abdul Qadeer Khan". Comme l'indique une plaque, le mausol?e du Sultan, un des h?ros de la conqu?te musulmane de l'Inde, a ?t? "construit par le Dr Abdul Qadeer Khan, Hilal-i-Imtiaz -une d?coration pakistanaise-, en 1994-1995".

P?re de la "bombe nucl?aire islamique", directeur du programme de missiles Ghauri, le Dr Khan n'a jamais dout? de son importance, mais son association avec ce sultan v?n?r? est sans doute aussi une fa?on de r?gler ses comptes avec une Inde qu'il a d?finitivement reni?e en 1952. Depuis qu'il a accept? d'assumer seul, le 4 f?vrier, la responsabilit? des fuites de technologie nucl?aire au profit de l'Iran, de la Cor?e du Nord et de la Libye, pendant une quinzaine d'ann?es, Abdul Qadeer Khan a ?t? relev? de toutes ses fonctions et quasiment assign? ? r?sidence dans sa maison de fonction d'Islamabad.

N? le 27 avril 1936 ? Bhopal, aujourd'hui capitale de l'Etat indien du Madhya Pradesh, Abdul Qadeer Khan quitte sa terre natale ? l'?ge 16 ans, apr?s avoir v?cu de pr?s, ? en croire son biographe officiel, les affres de la sanglante partition du sous-continent en 1947. Bhopal a une large population musulmane et re?oit beaucoup de r?fugi?s cherchant ? ?chapper aux massacres g?n?ralis?s. "Je n'ai jamais oubli? comment, alors que je gagnais le Pakistan, un garde-fronti?re indien a arrach? de ma poche le stylo que m'avait donn? mon fr?re pour me r?compenser de mon succ?s aux examens", affirmera-t-il, plus de quarante ans apr?s les faits, sur yespakistan.com, un site de Pakistanais ?migr?s. Il conserve chez lui une grande peinture murale de ce qui se veut le dernier train ? avoir travers? la fronti?re, laissant derri?re lui un cort?ge sanglant.

C'est quatre mois apr?s la premi?re explosion nucl?aire indienne, en mai 1974, qu'il ?crit au premier ministre pakistanais Zulficar Ali Bhutto pour lui offrir ses services. Ce dernier n'a jamais cach? sa volont? de faire jeu ?gal avec l'Inde, et sa comparaison est rest?e c?l?bre : "Si l'Inde construit la bombe, nous mangerons de l'herbe ou des feuilles, nous aurons m?me faim, mais nous en aurons une. Nous n'avons pas d'alternative, bombe atomique contre bombe atomique."

En janvier 1972, quelques mois apr?s son ascension au pouvoir, M. Bhutto convoque, ? Multan, une conf?rence des scientifiques pakistanais avec pour agenda : construire la bombe. Il promet de leur fournir toutes les facilit?s et l'argent n?cessaires pour obtenir ce qu'il appelle d?j? "la bombe islamique". En plein boom p?trolier, les Etats arabes comme l'Arabie saoudite ou la Libye n'h?sitent pas ? mettre la main au porte-monnaie. Dans un discours flamboyant, bien ? son image, le bouillant colonel Mouammar Kadhafi affirme, enthousiaste, ? l'issue du sommet islamique de Lahore, en 1974 : "Nos ressources sont les v?tres."

Abdul Qadeer Khan observe les choses depuis les Pays-Bas. Il a fait du chemin depuis son arriv?e ? Karachi et sa licence de sciences ? l'universit? de la m?me ville. Apr?s avoir appris l'allemand dans le but de poursuivre des ?tudes ? l'?tranger, il est parti ? Berlin, puis a pass? une ma?trise d'ing?nierie ? l'universit? de technologie de Delft, en Hollande, et un doctorat d'ing?nierie en m?tallurgie physique ? l'universit? de Louvain, en Belgique. Il travaille, depuis 1972, avec le consortium anglo-germano-hollandais Urenco, qui g?re une usine d'enrichissement d'uranium ? Almelo, en Hollande.

Son offre tombe ? pic. Zulficar Ali Bhutto tient son homme. Il le fait rentrer et n'h?site pas ? lui donner, en juillet 1976, le contr?le total de l'Engineering Research Laboratory (ERL), laboratoire qui travaille sous la supervision de l'Agence pakistanaise de l'?nergie atomique (PAEC). Mais Abdul Qadeer Khan ne l'entend pas ainsi. Il veut son ind?pendance et n'h?site pas ? d?nigrer par ?crit ses coll?gues, qu'il fait ?carter pour avoir sa propre ?quipe. L'homme d?borde d'ambition, sait ce qu'il veut et comment y arriver. "Il a apport? avec lui une centrifugeuse d?saffect?e, des plans, les noms de compagnies qui fournissent le mat?riel ? Urenco, de la technologie", raconte Shahid-ur Rahman, auteur d'un livre sur le programme nucl?aire pakistanais.

Jusqu'? aujourd'hui, le scientifique refuse de reconna?tre ses "emprunts" ? Urenco, pour lesquels il a ?t? condamn? par contumace aux Pays-Bas, en 1983, ? quatre ann?es de prison, avant que le jugement soit annul? en appel deux ans plus tard pour vice de forme. "Tout juste reconna?t-il avoir apport? quelques composants", affirme M. Rahman. Cette exp?rience lui laisse un go?t amer et il accusera souvent l'Occident de vouloir monopoliser ? son seul profit la technologie nucl?aire. "Ses transferts ? l'Iran, ? la Cor?e du Nord, ? la Libye s'inscrivent sans doute aussi dans sa volont? et son orgueil de prouver ? l'Occident qu'il pouvait briser son monopole", affirme une de ses connaissances. Nationaliste intransigeant, il n'est pas, pour ses amis, un islamiste militant. "Il est mari? ? une ?trang?re, ses filles ne portent pas le voile, et il ne s'est jamais cach? d'appr?cier ? l'occasion un peu d'alcool", assure l'un d'eux.

En 1976, le Dr Khan veut aller vite et ne s'embarrasse pas de scrupules. "Il d?cide d'acheter tout ce qui est possible sur le march? et de ne fabriquer localement qu'en dernier ressort. Ses ?quipes sillonnent le monde pour faire leurs emplettes ; des compagnies ?crans sont cr??es au Proche-Orient, en Extr?me- Orient", raconte encore M. Rahman, qui ajoute : "Quand les ambassades occidentales arr?tent de d?livrer des visas aux scientifiques pakistanais, les directeurs des compagnies europ?ennes ou am?ricaines sont invit?s en Turquie, ? Duba?, ? Singapour ou ? Hongkong pour discuter de contrats lucratifs."

"J'ai pleinement profit? de la volont? des compagnies occidentales de faire des affaires", affirmera un jour le Dr Khan dans une interview. Personne, alors, ne cherche ? savoir comment il op?re. Il a les coud?es d'autant plus franches que son projet avance. En 1980, le laboratoire du Dr Khan a d?j? mille centrifugeuses. Impatient, il accuse une nouvelle fois ses coll?gues de l'Agence atomique (PAEC) de ne pas lui fournir le gaz n?cessaire ? l'enrichissement de l'uranium. "Tous les jours il se rendait chez le g?n?ral Zia ul-Haq pour d?noncer Munir Ahmad Khan -directeur de la PAEC-", raconte M. Rahman.

Le g?n?ral Zia, qui a renvers? Ali Bhutto, est aussi impatient que lui d'avoir la bombe. En 1981, Zia r?compense Abdul Qadeer Khan pour sa premi?re production d'uranium enrichi en donnant au laboratoire, install? ? Kahuta, ? 40 kilom?tres d'Islamabad, le nom de "Khan Research Laboratory" (KRL), qu'il a conserv?. En 1984, le Dr Khan teste ? froid sa premi?re bombe, quelques mois, semble-t-il, apr?s un test similaire op?r? par la PAEC, ? qui le g?n?ral Zia a aussi donn? l'ordre de d?velopper la bombe.

Le Dr Khan, qui jouit d?j? dans l'establishment pakistanais de la plus haute estime - il est le citoyen le plus d?cor? du pays -, continue son ascension avec la production du missile Ghauri. Alors que la PAEC se rend en Chine pour obtenir le missile M. 11, qui deviendra au Pakistan le "Shaheen", Abdul Qadeer Khan va en Cor?e du Nord, o? il obtient le "Nodong", qui devient le "Ghauri". C'est ? cette occasion qu'il aurait livr? des ?quipements et de la technologie nucl?aire ? Pyongyang. "La priorit? est d'avoir un missile, personne ne regarde ? quel prix", affirme un ex-g?n?ral. Le Ghauri, avec une port?e annonc?e de 1 500 km, est test? le 6 avril 1998. Nouvelle heure gloire pour le Dr Khan, quelque sept semaines avant les tests nucl?aires de mai. Depuis, des r?pliques du Ghauri, grandeur nature, fleurissent ? tous les carrefours des villes Pakistanaises.

C'est qu'Abdul Qadeer Khan sait se vendre et d?pense beaucoup pour construire son image. "Il m'a offert de l'argent, des voyages en Europe, une maison, juste pour me faire ?crire sur lui ce qu'il voulait", raconte un journaliste pakistanais qui a refus? l'offre. Certains n'ont pas eu les m?mes scrupules, et aujourd'hui beaucoup sont interrog?s sur les largesses re?ues. Selon un officiel pakistanais cit? par le quotidien The News, le Dr Khan aurait d?pens?, depuis 1988, environ 1 million d'euros pour financer des ?v?nements m?diatiques destin?s ? promouvoir son image de p?re de la "bombe islamique".

Au lendemain des six explosions nucl?aires de mai 1998 - dont cinq (les meilleures selon un sp?cialiste) provenaient de la PAEC et une seulement de KRL -, le professeur Samar Moubarakmand, de la PAEC, est accueilli comme un h?ros. Le Dr Khan, de son c?t?, d?ploie tous ses contacts m?diatiques pour faire revenir sur lui les feux de la rampe. Lors d'une conf?rence de presse mouvement?e, ses aides multiplient les offres d'anecdotes ? la gloire de leur patron. Le "bon Dr Khan" a aussi financ? sans compter des ?uvres charitables, des instituts ?ducatifs et, bien s?r, ses amis. "Sur une simple lettre d'appel ? l'aide, il m'a offert un local ? Islamabad pour abriter mon organisation", raconte un responsable d'une ONG (organisation non gouvernementale) qui n'a aucun lien avec le Dr Khan.

Ce dernier a sa propre ONG, Sachet (Soci?t? pour l'avancement de la sant?, l'?ducation, la formation des communaut?s), qu'il a financ?e largement, si l'on en juge par la taille de son si?ge ? Islamabad. Sachet ?tait, il est vrai, dirig?e par la deuxi?me femme du Dr Khan, Rakhshinda Perveen, dont il a divorc? en octobre 2003. Celle-ci, qui n'a pas pour l'instant r?apparu ? son domicile et qui serait interdite de sortie du Pakistan, avait pour habitude de se rendre tous les mois ? Duba?, raconte une source proche qui veut garder l'anonymat. "C'est l? qu'ils se rencontraient, car le Dr Khan ne venait jamais chez elle ? Islamabad." Le Dr Khan est mari?, depuis son s?jour aux Pays-Bas, ? Hendrina, une N?erlandaise de passeport britannique (parce que n?e en Zambie), dont il a deux filles, Dina et Aisha. Selon les enqu?teurs pakistanais, le Dr Khan se serait rendu quarante-quatre fois ? Duba? en quatre ans. Lors de son interrogatoire, il aurait reconnu poss?der dans l'?mirat un compte en banque sous l'identit? d'un pr?te-nom.

Connues des autorit?s pakistanaises au moins depuis 2000, ? la suite d'un audit effectu? au laboratoire KRL, les irr?gularit?s financi?res du Dr Khan se montent ? plusieurs millions de dollars. "Depuis vingt-cinq ans, le Dr Khan a mani? entre 5 et 10 milliards de dollars, et personne ne lui a demand? de comptes", affirme un connaisseur du programme nucl?aire. "Chacun sait qu'il payait parfois deux fois le prix des ?quipements dont il avait besoin, mais il affirmait que c'?tait la ran?on pour les obtenir, et personne ne disait rien."

Visiblement le Dr Khan ne faisait pas de diff?rence entre l'argent de KRL et son argent personnel. "Il a toujours agi pour le pouvoir, l'argent, la gloire", dit de lui le professeur A. H. Nayyar, physicien. Le pouvoir, il l'avait ? KRL et bien au-del?, tant il s'?tait rendu indispensable. M?galomane, il circulait depuis tr?s longtemps avec une escorte et un convoi plus impressionnant que celui du chef de l'Etat. Invit? d'honneur de multiples galas de charit? et de s?minaires divers, son arriv?e ne passait jamais inaper?ue et il cultivait sa haute silhouette aux cheveux grisonnants.

L'homme est entier, dans ses amiti?s comme dans ses haines. "Pour ses amis, rien n'?tait trop beau, raconte l'un d'eux, et il pouvait m?me vous donner une maison. Mais, de la m?me fa?on, son hostilit? ? l'?gard de ses ennemis ?tait extr?me, et il n'avait de cesse d'essayer de les d?truire", ajoute-t-il. Cette attitude explique pour une large part la duplication tr?s on?reuse du programme nucl?aire pakistanais entre KRL et la PAEC. G?n?reux, l'homme ne s'est toutefois pas oubli? et a su favoriser ses proches. Son ex-gendre, Noman Shah, est devenu par la gr?ce de son union avec Dina - dont il a rapidement divorc? - un tr?s riche associ? des fructueuses affaires de KRL, ce qui risque de lui valoir quelques ennuis.

Le Dr Khan lui-m?me, sur son seul nom, a obtenu des permis de construire pour des terrains normalement inconstructibles, sur les bords du lac Rawal, o? il s'est fait b?tir une villa qui ne manque pas de charme. Il en poss?derait une demi-douzaine d'autres ? Islamabad, bien qu'il soit difficile de d?nouer l'?cheveau de ce qui appartient ? KRL ou ? son fondateur. Le p?re de la bombe serait aussi associ? ? diverses affaires, comme un h?tel, un restaurant chinois, un bowling ? Islamabad. Selon l'enqu?te officielle, il a aussi un h?tel ? Tombouctou, au Mali, qui porte le nom de sa femme, le Hendrina Khan Hotel.

Derri?re les fen?tres de sa maison de fonction, sur les bords des collines de Margalla, ? Islamabad, l'homme m?dite sans doute sur l'ingratitude humaine. "Il souffre, confie une de ses connaissances, d'?tre enferm? comme un paria", lui qui reste, pour l'immense majorit? des Pakistanais - dont le pr?sident Pervez Moucharraf -, un h?ros national. Un h?ros national avec des secrets nationaux qui le prot?gent tout autant qu'ils le menacent.

Fran?oise Chipaux

* ARTICLE PARU DANS L'EDITION DU 21.02.04
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L'Iran cacherait l'ampleur de son programme nucl?aire
LE MONDE | 20.02.04 | 16h51
T?h?ran n'a pas notifi? l'acquisition des plans d'une centrifugeuse du type Pak-2 pour l'enrichissement de l'uranium. Washington reproche ? l'Agence internationale de l'?nergie atomique (AIEA) d'exercer un contr?le trop indulgent.
Vienne de notre correspondante

Le programme nucl?aire iranien est plus que jamais ? l'ordre du jour, deux semaines avant une r?union du Conseil des gouverneurs de l'Agence internationale pour l'?nergie atomique (AIEA), les 8 et 9 mars, qui devra appr?cier la "transparence" dont fait preuve le r?gime islamique de T?h?ran. Aux yeux des chancelleries occidentales, et surtout de Washington, l'Iran reste suspect de vouloir se doter de l'arme nucl?aire. M?me s'il n'est pas exact, selon les informations recueillies par Le Monde, que les experts onusiens auraient trouver les preuves mat?rielles de telles activit?s dans une base militaire iranienne.

Alors que la Libye - o? le directeur g?n?ral de l'AIEA Mohamed ElBaradei se rendra, lundi 23 f?vrier, pour la deuxi?me fois en deux mois - est cit?e en exemple pour sa coop?ration sans r?serve, les diplomates de l'Agence estiment que T?h?ran a fait "peu de progr?s" malgr? des d?buts prometteurs. Fin octobre, sous la pression conjugu?e de l'Union europ?enne et des Etats-Unis, l'Iran a remis une d?claration d?taill?e de son programme, que l'AIEA esp?rait "compl?te et d?finitive". Le 18 d?cembre, il a sign? en outre le protocole additionnel au Trait? de non-prolif?ration nucl?aire (TNP) qui autorise l'Agence a men? des inspections surprises dans tous les endroits o? elle le demande.

Mais ces derniers jours, confront?es ? des documents d?couverts par les experts onusiens, les autorit?s iraniennes ont d? avouer une omission de taille : elles avaient acquis les plans d'une centrifugeuse de type Pak-2 (un mod?le d'origine pakistanaise, calqu? sur un prototype occidental), qui permet d'obtenir plus facilement un uranium de qualit? militaire. Cet aspect inqui?tant du programme iranien sera ?voqu? dans le rapport que M. ElBaradei va remettre, ces jours-ci, aux 35 gouverneurs de l'AIEA. Fabriqu?e avec des aciers sp?ciaux extr?mement r?sistants, la Pak-2 est presque deux fois plus puissante que la Pak-1, avec laquelle l'Iran avait reconnu mener des activit?s d'enrichissement d'uranium. Dans son ?dition du 19 f?vrier, le quotidien USA Today va plus loin, en affirmant que les inspecteurs de l'ONU ont trouv? des composants d'une "machine sophistiqu?e pour enrichir l'uranium", dans la base militaire a?rienne de Doshen-Tappen, au sud-est de T?h?ran. Pareille d?couverte, a soulign?, jeudi, le porte-parole de la Maison Blanche pourrait ?tayer "notre conviction que l'Iran poursuit un programme nucl?aire militaire sous couvert d'un effort civil".

Officiellement, l'Agence s'est refus?e ? tout commentaire sur les r?v?lations de USA Today. En coulisses, on se dit surpris de cette r?f?rence ? une base militaire o? les experts onusiens n'ont "jamais mis les pieds". Exploit? par Washington, l'article du quotidien am?ricain n'apporterait en fait "aucune v?rit? nouvelle".

Du c?t? iranien, on nie farouchement : T?h?ran "n'a pas eu, et n'a pas, d'activit?s nucl?aires ? caract?re militaire". A en croire le ministre des affaires ?trang?res, Kamal Kharrazi, les plans de Pak-2 n'ont jamais servi qu'? un programme de recherche, l'Iran exp?rimentant "tous les nouveaux mod?les dans l'industrie". T?h?ran n'avait pas inclu cet ?l?ment dans sa d?claration, en octobre, "parce que nous n'?tions pas oblig?s de le faire" avant d'avoir sign? le protocole additionnel insiste un diplomate iranien, interrog? par Le Monde. "Nous n'avons jamais import? des pi?ces d?tach?es -de Pak-2-. Il s'agissait d'un plan, un simple dessin, que nous avons achet?, il y a plus de dix ans, et qui prenait la poussi?re au fond d'un tiroir". Des exp?riences ont bien ?t? tent?es "pendant quelques mois, il y a plusieurs ann?es" par un scientifique frais ?moulu de l'universit? mais elles ont rapidement "avort?" et non jamais ?t? reprises.

"POSITION DE FAIBLESSE"

Dans une premi?re version, les responsables iraniens ont essay? de d?montrer qu'ils avaient bel et bien inform? l'Agence sur le fait qu'ils poss?daient les plans d'une centrifugeuse plus perfectionn?e que ce que les limiers du nucl?aire avaient vu jusqu'alors sur les sites iraniens. Toujours selon ce diplomate de T?h?ran, les Etats-Unis montent en ?pingle "une affaire inexistante" dans l'espoir d'obtenir un rapport plus "muscl?" de M. ElBaradei, de la m?me mani?re qu'ils avaient essay?, ? l'automne dernier, d'arracher ? leurs alli?s europ?ens une condamnation de l'Iran, et son renvoi devant le Conseil de s?curit?, "pour nous conduire en position de faiblesse ? la table des n?gociations". De leur c?t? les Etats-Unis ne font pas myst?re de leur d?sapprobation, lorsque, s'agissant de l'Iran, "le ton des rapports de l'AIEA ne correspond pas aux faits d?crits par l'Agence" et que celle-ci arrondit les angles pour donner ? T?h?ran une chance de se rattraper. Cette fois encore, on attend ? Washington de voir "comment les donn?es techniques" r?colt?es ces derni?res semaines seront "?clair?es".

"La question est de savoir si les Iraniens sont pr?ts ? nous offrir "the Full Monty" -la nudit? totale- ou s'ils se livrent ? un strip-tease", r?sume Patrick Clawsen, directeur adjoint de l'Institut de Washington pour la politique au Proche-Orient, interrog? par USA Today. Pour l'agence onusienne, qui utilise un langage plus pudique, des points essentiels du dossier iranien sont loin d'?tre ?claircis : les machines "contamin?es" avec des particules d'uranium hautement enrichi que l'on a trouv?es en 2003 sur le site pilote de Natanz et dans l'usine de Kalaye, ? T?h?ran, l'ont-elles ?t? en dehors d'Iran, c'est-?-dire avant leur importation du Pakistan ? Ou en Iran - ce qui serait l'indice d'un enrichissement pouvant conduire ? l'arme atomique ? Selon une source iranienne, la confirmation de la premi?re version, la plus favorable ? T?h?ran, va "prendre encore du temps".

Jo?lle Stolz

* ARTICLE PARU DANS L'EDITION DU 21.02.04

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CIA chief 'removed for incompetence'
From correspondents in Washington
21feb04
The CIA has reportedly recalled its top officer in Baghdad over doubts about his leadership abilities and closed several offices in Afghanistan amid security concerns.
A Los Angeles Times report, citing US intelligence sources, says the top Central Intelligence Agency officer in Baghdad was replaced in December.
The move came in the face of stepped-up attacks targeting civilians and coalition forces, the daily says.
It is the second time that the CIA chief in Baghdad has been replaced since President George W. Bush declared an end to major combat operations in Iraq last May.
The Baghdad office has become the biggest in CIA history, even surpassing the size of its Saigon post at the height of the Vietnam War, the paper says.
There are nearly 500 CIA agents in Iraq.
A lack of Arabic-speaking agents and qualified officers willing to accept dangerous postings has forced the CIA to hire dozens or perhaps even hundreds of the agency's retirees, to rely heavily on translators and to enlist soldiers to fulfill CIA officers' tasks.
Meanwhile, the CIA is being taken to task in the United States, charged with providing the Bush administration with faulty intelligence on the existence of weapons of mass destruction in Iraq, which served as Washington's justification for launching its war.
? The Australian
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CIA reportedly removes top officer in Baghdad
Fri 20 February, 2004 08:57
WASHINGTON (Reuters) - The CIA has recently removed its top officer in Baghdad because of questions about his ability to lead the station there, the Los Angeles Times has reported.
U.S. intelligence sources also told the newspaper on Friday that the spy agency has also closed several satellite bases in Afghanistan because of security concerns.
Some current and former CIA officials, who requested anonymity, told the daily the agency was stretched thin as it searches for al Qaeda leader Osama bin Laden, confronts insurgency in Iraq and tries to cultivate ties to warlords in Afghanistan.
A CIA spokesman could not be immediately reached for a comment on the report.
A senior U.S. official told the Times the CIA station chief in Baghdad was removed in December after deadly attacks against U.S. forces and Iraqi civilian targets.
"There was just a belief that it was a huge operation and we needed a very senior, experienced person to run it," the official told the Times.
According to a U.S. official cited by the daily, the CIA's Baghdad station is now the largest in agency history.
The Times quoted sources as saying that the main problem confronting the Baghdad station was security constraints that affect operatives' mobility.
Other sources said they were concerned the agency has been too focused on troop protection in Iraq, to the detriment of spy recruiting efforts. Such spies were described as critical sources of information as the United States transfers power back to Iraqis later this year.
High turnover among CIA employees in Iraq makes recruiting spies in the country nearly impossible, former CIA case officers told the newspaper.
In Afghanistan, a number of remote CIA bases have been closed in recent month, the Times said, quoting current and former CIA officials.
One former senior CIA official said the bases were closed because of security concerns. But a senior U.S. official told the Times they were closed for several reasons, adding that the number of personnel in Afghanistan was not reduced.
The paper said the closures have alarmed some in the intelligence community because remnants of the deposed Taliban regime appear to be regrouping and preparing attacks ahead of elections scheduled for this summer.
Earlier this month, the U.S. military's top general in Afghanistan expressed optimism that al Qaeda leader bin Laden would be captured this year.
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U.S. Freezes Accounts Of Large Saudi Charity
By John Mintz
Washington Post Staff Writer
Friday, February 20, 2004; Page A02
The Treasury Department ordered banks yesterday to freeze the accounts of the Oregon and Missouri branches of a large Saudi charity that U.S. officials say has been used to finance the al Qaeda terrorist network around the world.
FBI and Internal Revenue Service agents searched a home in Ashland, Ore., that is the U.S. headquarters for the charity, the al-Haramain Islamic Foundation. The search is part of an investigation into allegations that the Oregon branch was involved in money laundering and income tax and currency-reporting violations, Treasury officials said.
Over the past two years, U.S. and Saudi authorities have intensified a joint crackdown on al-Haramain offices around the globe after concluding that they had funneled money, personnel and equipment to al Qaeda. Branches in Bosnia and Somalia were shuttered in 2002, and last December others were closed in Indonesia, Kenya, Tanzania and Pakistan.
U.S. officials continue to investigate the foundation's headquarters in Saudi Arabia. Several weeks ago al-Haramain's chief, Aqeel al-Aqeel, was fired by top Saudi clerical authorities amid growing suspicions about his role at the charity.
Lawrence Matasar, an attorney for the al-Haramain office in Oregon, said charity officials in that state are cooperating with the government in the investigation. "We believe no crimes have been committed," he said.
Al-Haramain's headquarters in Saudi Arabia launched its Oregon office in 1997 by funding the work of an Ashland landscaper, Pete Seda, who had been sending Korans to prison inmates. The two people now mainly under investigation are Seda and Soliman Albuthe, a Saudi citizen who also helped run the Oregon organization.
Officials are investigating numerous financial transactions involving Albuthe and Seda, also known as Pirouz Sedaghaty, including allegations of transporting large sums of undeclared traveler's checks across U.S. borders. Under U.S. law, anyone transporting $10,000 or more in or out of the country must declare it to customs agents.
Agents are looking into $131,000 that was wired by a man in London to the Oregon foundation, which then dispatched Albuthe to transport the funds by traveler's checks to Saudi Arabia. The transaction was not properly reported to U.S. authorities, according to an affidavit filed in court in Oregon. The funds were ultimately destined for Muslim fighters or refugees in Chechnya, it said.
The affidavit also disclosed that a federal grand jury has been investigating al-Haramain's U.S. operations.
The U.S. branch of the charity has mainly distributed Islamic books and videos to Americans, and also helped establish a mosque in Springfield, Mo., with more than $370,000 provided by the Saudi headquarters.
One of the top leaders of that mosque was Kamran Bokhari, a student at Southwest Missouri State University, who was also the U.S. representative of a radical London-based group called al-Mujahiroun, which supports al Qaeda, according to the Site Institute, a terrorism research group.
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>> SAUDI WATCH CONTINUED...

U.S. freezes assets of charity in Ashland

Authorities suspect Al-Haramain Islamic Foundation officials helped funnel money to Islamic rebels in Chechnya
02/20/04
LES ZAITZ

Federal officials froze the assets Thursday of an Ashland charity suspected of illegally funding jihad -- Islamic holy war -- in Chechnya.
Treasury Department officials barred Al-Haramain Islamic Foundation Inc. from transferring money or property as a federal terrorism investigation continues. Federal officials said their move against the Oregon charity was part of a global drive to stop financing for terrorists.
The order came a day after federal agents searched the charity's Ashland headquarters Wednesday. Authorities suspect that two of the charity's directors funneled $150,000 to Saudi Arabia, where it may have been transferred to Chechen rebels. Federal documents say the two men hid the transaction by saying the money was spent to buy a mosque in Missouri.
No one has been arrested, and Treasury and Justice Department officials were tight-lipped Thursday about the Al-Haramain investigation.
The Oregon operation is part of a global charity with a similar name based in Saudi Arabia. Six of the Saudi charity's foreign branches have been declared supporters of terrorist organizations. U.S. and Saudi governments allege that those branches for years have funded al-Qaida and other terrorist groups.
Treasury officials didn't designate the Oregon operation a terrorist organization, but instead used terror-related authority to issue a "blocking order," freezing Al-Haramain's assets and giving Treasury officials time to investigate whether the Ashland branch supported terrorists.
"Looking at the Al-Haramain organization is an effort to uncover and unearth terrorist financing," Deputy Assistant Treasury Secretary Juan Zarte said Thursday at a Washington, D.C., briefing.
Oregon branch under suspicion
Federal terrorism investigators have made the Saudi charity and its branches a priority because of the global reach of its operations, which once operated on as much as $50 million a year. Investigators suspect the Saudi charity diverted millions from legitimate charitable work to terrorists.
Oregon's branch has been under suspicion as well. The Oregonian reported in November that the foundation and two of its officers -- Pete Seda and Soliman Al-Buthe -- have been on an FBI "watch list" of people involved in transactions that might support terrorism. The Oregon-linked names have been on the list of 300 people and organizations since at least early 2002.
Officials with the Oregon charity said they had nothing to do with terrorism and hadn't engaged in criminal conduct.
"I am a man of peace and have consistently and actively opposed terrorism," said Seda, a former Ashland arborist who helped establish the Oregon charity. "I am certain that once all the facts come out, it will be clear that neither Al-Haramain Oregon nor I have engaged in any criminal activities."
Seda opened Al-Haramain in Oregon in 1997 with money and leadership provided by the parent Saudi charity. Al-Haramain used a rural home just outside Ashland as a prayer house for local Muslims and a distribution center for Islamic books. Some books went to American prisons.
Seda left Oregon for the Middle East last February and issued his statement through an attorney in Washington, D.C.
The Oregonian got no response to messages left Thursday with two American attorneys representing Al-Buthe, a Saudi who is the Ashland charity's treasurer.
Another attorney, Larry Matasar of Portland, said Al-Haramain and its officials have been cooperating with investigators. He said he responded Tuesday to a federal grand jury subpoena with eight boxes of records.
About a dozen agents from the IRS, FBI and Customs conducted Wednesday's search.
Tax fraud alleged
IRS Agent Colleen Anderson outlined allegations of tax fraud in a 33-page affidavit filed in Medford U.S. District Court to get the search warrant.
On several occasions from 1997 to 2001, Al-Buthe brought significant sums of traveler's checks into the United States, according to declarations he made when entering the country, the affidavit said. In 13 trips, he reported bringing in $777,845, of which $206,000 was used to buy the Ashland headquarters in 1997, the affidavit said. But there is no explanation for the balance, Anderson wrote.
In early 2000, an Egyptian doctor wired a $150,000 donation from his London bank account to Al-Haramain's Ashland bank, according to the affidavit. An e-mail from the doctor said the money was meant "to participate in your noble support to our Muslim brothers in Chechnya."
At the time, Russian forces were battling Chechen rebels for control of the region. The fight was considered a jihad, or holy war, by some Muslim factions.
The affidavit said that 11 days after the doctor's donation showed up in Oregon, Al-Buthe traveled to Ashland from Saudi Arabia. He joined Seda at an Ashland bank and the two took out $130,000 -- buying 130 traveler's checks in $1,000 denominations, the affidavit said. A bank clerk suggested it would be easier to issue a cashier's check, the affidavit said.
"Seda said he could not take a cashier's check because the money was to help people and a lot of times these people may not be able to negotiate a cashier's check," the affidavit said.
Seda took an additional $21,000 in a cashier's check, giving that to Al-Buthe, the affidavit said. The check had the notation: "Donations for Chichania Refugees," the affidavit said.
The affidavit said Seda -- using the name Abu Yunus -- signed an agreement with Al-Buthe saying he was relinquishing the money for "brothers and sisters in Chechnya."
Within days, Al-Buthe returned to Saudi Arabia, failing to declare to Customs, as required, that he was taking the traveler's checks out of the United States, the affidavit said. Once back in Saudi Arabia, Al-Buthe cashed the traveler's checks and put the cashier's check into his personal account. The affidavit doesn't say what happened to the money.
The affidavit said Al-Haramain disguised what happened to the Egyptian's donation. It said the foundation's 2000 tax return underreported income by $21,000, underreported grants by $150,000, and overstated the price of a second prayer house that Al-Haramain bought in Missouri.
The tax return shows that "Seda, or one of his associates, improperly listed the $131,300 disbursement to Al-Buthe as funds used to purchase the Springfield prayer house," the affidavit said.
Anderson wrote, "It appears that Seda and Al-Buthe have attempted to conceal the movement of funds to Chechnya." Her affidavit doesn't explain why the money would first come into the United States and then be taken to Saudi Arabia.
The main Al-Haramain charity in Saudi Arabia "strongly supported" the mujahedeen fighters in 1999 and 2000, according to the affidavit. An article on the Saudi charity's Web site included a prayer for the fighters, seeking Allah's help against the Russian soldiers.
"Cripple their limbs and blind their sight, and send upon them an epidemic and calamities," the article said, according to the affidavit.
The Russian Federal Security Service in 2000 wrote in an intelligence assessment on Chechnya that Al-Haramain in 1999 provided $1 million in funding to Chechen rebels. The Russians reported that in 2000 they intercepted an Al-Haramain communication that said the charity "has allocated $50 million specifically for the needs of the mujahedeen."

Jim Barnett of The Oregonian staff contributed to this report. Les Zaitz: 503-221-8181; leszaitz@news.oregonian.com
++++++++++++++++++++++++++++++++
Saudi charity in Ashland on terrorism 'watch list'
An international group kicked out of 10 countries after being suspected of financing terrorism runs its U.S. branch in Oregon
11/09/03
LES ZAITZ
A Saudi Arabian charity shut down in 10 countries for suspected ties to al-Qaida and other terror groups operates in the United States through a branch in Ashland.
Al-Haramain Islamic Foundation is among the leading Saudi charities suspected of funneling millions of dollars to terrorists and is under intense scrutiny by U.S. and Saudi authorities. The Bush administration twice has dispatched high-level delegations seeking Saudi cooperation to shut down Al-Haramain.
The Senate Banking Committee is investigating "all sources of funding" for terrorists, including charities. "The operations, both domestically and abroad, of the Islamic charity Al-Haramain will be included in this examination," Andrew Gray, spokesman for committee chairman Sen. Richard Shelby, R-Ala., told The Oregonian on Friday.
The Al Haramain Islamic Foundation Inc. in Ashland has not been accused of any crime, and federal officials are reluctant to publicly outline their concerns because it would disrupt ongoing investigations.
But the FBI has placed the Oregon foundation and two of its directors on a "watch list" of more than 300 individuals and organizations with financial transactions that might have supported terrorism. Federal law enforcement sources say investigators are tracking the flow of money through the Oregon charity, including thousands of dollars transferred to Saudi Arabia.
In addition, families of some victims of the Sept. 11 attacks have sued the Ashland foundation saying it funded terrorism and is "specifically linked" to al-Qaida. A second lawsuit filed by insurers claims all four directors of Al Haramain in Oregon also were involved in an international terrorism network. The Saudi charity was named in both suits as well.
The Ashland foundation says it condemns terrorism and is only "loosely affiliated" with the Saudi charity. The two organizations are separate entities but have shared common leadership and funding.
Three of the Ashland foundation's directors are high-ranking officials in the Saudi foundation, one of whom said all of the roughly 50 international offices were under the "tight control" of the main Saudi charity.
Day-to-day operations in Ashland were run by Pete Seda, a local tree trimmer known in Southern Oregon as a peace advocate on behalf of Islam. Acquaintances say he rejected terrorism and urged people to get along.
"We are not aware of any individual in our organization who is involved in terrorist activity and we invite law enforcement agencies to help us find and eliminate anyone who may be involved," Seda told the Associated Press last year after the Saudi foundation's branches in Somalia and Bosnia were designated as terrorist organizations.
Seda and other officials with the Oregon and Saudi foundations didn't respond to telephone and e-mail messages or written questions, and the Oregon foundation's attorneys also declined repeated requests for comment.
When Saudi officials cracked down on Al-Haramain to close some of its international offices, the Saudi foundation's director general was defiant.
"We are like heroes in the Islamic world because America is against us," said Aqeel Abdul Aziz Al-Aqeel.
"We still can do the work in Bosnia and Somalia even if our offices there were closed," Al-Aqeel told the Saudi news media. "We can run the work through preachers. They can close the offices, but they cannot arrest all the preachers."
Until this year, Al-Aqeel also was president of Al Haramain in Oregon.
Charities called link to terrorism Islamic charities such as Al-Haramain of Saudi Arabia are targets in the global hunt for terrorism supporters. U.S. intelligence and law enforcement agencies have compiled detailed but classified portraits of which charities have helped terrorists.
In recent congressional testimony, federal officials and other witnesses said Saudi charities, which raise an estimated $4 billion a year, are a key source of money for terrorist organizations to attract and train recruits, run day-to-day operations and fund terrorist attacks.
"Almost nothing is more important on the battlefield of the war on terror than diminishing the flow of money," David Aufhauser testified in September before recently leaving his post as Treasury Department general counsel.
Aufhauser told Congress that Saudi charities have funded al-Qaida. He estimated al-Qaida operated on $35 million a year before the Sept. 11 attacks and now spends $5 million to $10 million. Investigators estimate the Sept. 11 jetliner attacks cost al-Qaida $500,000.
Lee Wolosky, a former National Security Council executive, told a national commission investigating the Sept. 11 attacks that al-Qaida's finances have been disrupted but not destroyed.
"As long as al-Qaida retains access to a viable financial network, it remains a lethal threat to the United States," Wolosky testified.
In an interview with The Oregonian, Wolosky said al-Qaida finances were built "on a foundation of charitable giving that is both highly organized and grass roots." He said some Islamic charities knowingly divert money to support terrorists, while others are unwitting accomplices. Telling which is which is an investigative challenge, he said.
U.S. officials say they have pressed the Saudis to cooperate with investigations. The Saudis say they have.
Nail Al-Jubeir, spokesman for the Saudi embassy in Washington, D.C., told The Oregonian, "We are going after those who support terrorists, those who condone it and those who give them religious cover. We have been cracking down big time."
Saudi group's ties studied U.S. officials will say little about Al-Haramain operations in Saudi Arabia and elsewhere.
Saudi foundation executives have been fending off suspicions, saying no one -- including the U.S. government -- has presented evidence that the Saudi organization is a terrorist sympathizer. But expert witnesses testifying before two Senate committees have pointed to several connections.
For example, an admitted al-Qaida operative in Indonesia told CIA interrogators that a Southeast Asia militant group was funded by money from Al-Haramain's branch in Indonesia. The militant group was later blamed for bombings in Indonesia.
And German authorities tracking al-Qaida activists and connections to the Sept. 11 attacks are investigating al-Qaida ties to a German mosque funded by Al-Haramain. The property is co-owned by Al-Aqeel, the top Al-Haramain official and co-founder of Al Haramain of Oregon.
In March 2002, U.S. and Saudi officials designated Al-Haramain branches in Bosnia and Somalia as terrorist organizations for funding al-Qaida and other groups. The Saudis ordered Al-Haramain to close its offices in those countries.
"We submitted the names of the individuals who worked in those offices to the United Nations as being involved in terrorism," said Adel Al-Jubeir, a Saudi crown adviser speaking at a news conference last summer in Washington, D.C.
Al-Aqeel -- the foundation's leader in Saudi Arabia -- told the Arab news media that Al-Haramain kept "tight control" of its international affiliates.
"The offices' directors are employees who follow the directions of the main office with regards to hiring workers at the offices and making any decisions on cooperation with any party," he said.
In May, the Saudis ordered eight more branches of the Saudi charity closed because of concerns they were involved in terrorism: Albania, Croatia, Ethiopia, Indonesia, Kenya, Kosovo, Pakistan and Tanzania.
The Saudis acted after U.S. authorities "demonstrated that those offices were perverting the purposes of charity to do violence," Aufhauser told Congress.
"We looked at the other offices of Al-Haramain and we discovered that in many cases, the financial controls were not up to par," said Al-Jubeir, the Saudi adviser. "The individuals working in those offices, the vast majority of them were non-Saudis, about whose background the head organization knew very little."
Al-Aqeel told the Arab news media that Al-Haramain was harassed out of those countries.
"These countries cooperate with America," Al-Aqeel said. "They always accuse us, inspect us, raid us. It disturbed us."
Visible in Oregon after Sept. 11 Al Haramain was nearly invisible in Oregon before the Sept. 11 attacks. The foundation conducted business from a private mail box service. It also ran a prayer house that now sits behind padlocked gates and "No trespassing" signs along a rural highway just beyond the Ashland city limits.
Ashland seems an unlikely place for an international Islamic charity. Most major Islamic charities in the U.S. open in cities with large Muslim populations -- Detroit, Chicago, Houston.
But those cities didn't have Pete Seda, whose work on behalf of Islam apparently caught the attention of Saudi officials half a globe away.
Seda, 45, an Iranian immigrant also known as Perouz Seda Ghaty, came to the United States for an education in the 1970s. In Ashland, he became a skilled arborist known for saving local heritage trees. In a region with few Muslims, friends and acquaintances say Seda was always available to explain Islam at schools, churches and community forums.
In 1989, Seda set up a foundation to hand out Islamic books to prisoners in the United States and Canada, paying for the effort with profits from his tree business.
Raya Shokatfard, a longtime friend, said requests for books piled up. "He was getting 20, 30 letters a day from prisons," she said. "He was cutting trees, working his tail off to buy books."
Saudi representatives of Al-Haramain approached Seda in 1997, according to court records. They proposed setting up an American charity, funded with Saudi money, to hand out Islamic books.
Seda formed the Oregon branch of Al-Haramain with Soliman H. Al-Buthe of Riyadh, Saudi Arabia, who was also chairman of the Saudi charity's U.S. Committee. Al-Buthe put up the $187,126 cashier's check that bought the prayer house at Ashland's edge in late 1997, according to IRS records.
Area Muslims, including students recruited overseas for a local English language academy, attended Friday prayers at the property. Schoolchildren visited for what one person called "Islam 101" -- Seda's effort to share his religion. They sat on fat pillows on the floor and made friends with the foundation's camel.
Seda's Ashland attorney, David Berger, said that Seda had to regularly submit his budget and financial requests to the main Saudi foundation for approval.
In June 2000, the Oregon foundation bought a mosque in Springfield, Mo., for $461,542, which area residents proudly declared the first mosque "in the heart of the Bible Belt."
Springfield Muslims had approached Al-Haramain in Saudi Arabia to buy a building for a mosque in their community. But the Saudi charity sent the money to Ashland to buy and hold title to the building, according to Berger and the foundation's tax records.
Seda changed the legal structure of the Oregon foundation in 1999 and won tax-exempt status from the IRS. Medford attorney Doug Gard said Seda and Al-Buthe insisted he rewrite the incorporation papers to include a rejection of terrorism. Gard complied, adding the statement: "Al Haramain Islamic Foundation Inc. stands against terrorism, injustice, or subversive activities in any form, and shall oppose any statement or acts of terrorism."
Gard said the two men were troubled that Muslims were blamed for the 1998 bombing attacks on U.S. embassies in Kenya and Tanzania. They wanted to publicly oppose terrorism.
Yet the investigation of the bombings, instead of separating Al Haramain in Ashland from terrorism, yielded a connection.
A card, a connection
A simple business card belonging to one of the directors of Al-Haramain in Saudi Arabia was found among the possessions of Wadih El-Hage, an al-Qaida operative in Kenya.
That business card not only was used by prosecutors to help convict El-Hage, but it also prompted families of the Sept. 11 victims to tie the Oregon Al Haramain to al-Qaida.
The card belonged to Mansour Al-Kadi, a Saudi. The card listed Al-Kadi as deputy director general of the Saudi Al-Haramain and "head" of its Africa Committee. He also was the vice president of the Oregon Al Haramain Foundation.
The Saudi charity's Kenyan operation was under suspicion of being among active "terrorist groups" even before the embassy bombing, according to a State Department report. Authorities had tried to blunt terrorist threats before the 1998 attacks.
That included investigating El-Hage, one-time personal secretary to al-Qaida leader Osama bin Laden. In 1997, investigators searching El-Hage's home found Al-Kadi's card. El-Hage was arrested after the Kenyan bombing and convicted in 2001.
Prosecutors produced Al-Kadi's card along with others to show El-Hage's contacts with associates in Saudi Arabia, Sudan and Kenya. Prosecutors portrayed El-Hage as a global emissary for bin Laden.
Al-Kadi was also one of four founding directors of the Ashland Al Haramain, according to incorporation papers. When the IRS asked for proof that foundation leaders had religious training, Al Haramain of Oregon turned in papers for only one -- Al-Kadi.
Because his business card from Kenya was among El-Hage's possessions, attorneys on behalf of Sept. 11 families claimed in a lawsuit that the Oregon foundation was linked to al-Qaida.
The Oregon foundation responded in court filings that it had no connection to any terrorist group. Al Haramain of Oregon complained it had been "dragged" into the mammoth case with approximately 200 other defendants because it was an Islamic organization and it shared directors with the Saudi operation.
In a statement the day after that suit was filed, Seda and Al-Buthe said the foundation had cooperated with law enforcement agents and steadfastly condemned the Sept. 11 attacks.
"On that day, not only was our country attacked, but the Islamic faith as well," they said.
Ashland attorney Susan Saladoff in October 2002 tried to get the Oregon foundation out of the case. She offered to open the Oregon charity's records, and have Seda and Al-Buthe sit for depositions and help the families' lawyers in their case against other defendants.
In return, Saladoff wanted Al Haramain dropped from the lawsuit. The offer went nowhere, and Al Haramain asked a federal judge to dismiss the case because there wasn't "a single scintilla of evidence" connecting the Oregon foundation to the Sept. 11 attacks or any other terrorism.
Earlier this year, the judge dismissed racketeering and negligence claims against the foundation but let stand for trial allegations that Al Haramain was part of an international terrorist conspiracy.
Portland Seven tie The Ashland charity also has a link to Oregon's highest-profile federal investigation.
In January 2002, federal officials arrested Sofiane T. Benziadi, 31, in Seattle on an immigration charge. Benziadi had moved to Portland from Ashland, where he had used the Al Haramain prayer house as his home address on vehicle registration papers. He also used the foundation's private mail box service and was listed for a time as office manager of Seda's tree business.
When arrested, Benziadi told investigators he knew of a failed mission to send Portland-area men to Afghanistan to wage war against U.S. troops. The so-called Portland Seven plot wouldn't become public until nine months after Benziadi's arrest.
Benziadi also said that after the mission failed, he was called by Habis Abdulla al Saoub, the former mujahedeen accused of leading the group. Benziadi said al Saoub kept the conversation general because he feared the FBI was monitoring it.
Benziadi left the country soon after his arrest. And U.S. officials later posted a $5 million reward for al Saoub, who was killed recently in Pakistan as part of an alleged al-Qaida cell attacking U.S. troops in Afghanistan.
By early 2002, Seda, Al-Buthe and the Oregon foundation appeared on an FBI "watch list" related to financial transactions possibly linked to terrorism. Law enforcement agencies and financial institutions were asked to alert investigators if they had information on anyone appearing on the list.
Federal agents now are investigating the Ashland foundation's finances, including the transfer of thousands of dollars to Saudi Arabia.
One person familiar with the Oregon foundation's operations said a $40,000 check was dispatched to Saudi Arabia earlier this year just before Seda left the country. The source said the check went to Al-Buthe, the charity's treasurer who lives in Riyadh.
Law enforcement sources say more money flowed into the Oregon charity from Saudi Arabia than went back, but investigators also are examining donations that came to Ashland from around the United States.
Today, the Oregon foundation's status is uncertain. It maintains a mailbox service and telephone calls are handled by an answering service. The Web site it shared with Al-Haramain of Saudi Arabia is "closed for development."
Seda reportedly now lives in Dubai. He told friends he expects to return to Oregon by the end of the year, but his attorney isn't sure Seda will return.
Berger, Seda's attorney, said Seda told him he is seeking work overseas because his business suffered after the Sept. 11 attacks. He said Seda endured threats while in Oregon.
"He's been terrorized," Berger said. News researchers Kathleen Blythe and Margie Gultry contributed to this report. Les Zaitz: 503-221-8181; leszaitz@news.oregonian.com


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Plan for Caucuses In Iraq Is Dropped
U.S. to Seek New Transition Process
By Robin Wright and Colum Lynch
Washington Post Staff Writers
Friday, February 20, 2004; Page A01
The Bush administration is abandoning the core idea of its plan to hold regional caucuses for an Iraqi provisional government and will instead work with the United Nations and Iraqis to develop yet another plan for the transfer of political power by June 30, U.N. and U.S. officials said yesterday.
The decision, forced by rejection of the caucus system by a wide range of Iraqis, means that the Coalition Provisional Authority led by the U.S. administrator, L. Paul Bremer, will instead hand over authority to a caretaker government until direct elections can be held, officials said.
In a meeting at the United Nations yesterday, Secretary General Kofi Annan told a gathering of diplomats with interests in Iraq that the Iraqis themselves should determine the participants and form of a caretaker government that will be credible to Iraq's disparate society, according to U.N. officials who attended.
Annan is prepared to dispatch his special envoy, former Algerian foreign minister Lakhdar Brahimi, back to Baghdad in the coming weeks to help mediate a new formula if the Iraqis and the U.S.-led coalition do not come up with another plan, U.N. diplomats and U.S. officials said.
"We need to find a mechanism to create a caretaker government and . . . help prepare the elections later," Annan told reporters after briefing U.N. members who belong to the world body's 46-nation Friends of Iraq group.
As expected, Annan told the group the United Nations does not believe elections can be held before June 30, the date the U.S.-led coalition has said it will end the occupation. In a report to Annan, U.N. officials say, Brahimi cites broad agreement in Iraq that elections should be in late 2004 or early 2005.
The United States yesterday repeated its determination not to extend the June 30 deadline for ending the occupation.
"There are 133 days before sovereignty returns to an Iraqi government," Bremer said at a Baghdad news conference. "Changes in the mechanism for forming an interim government are possible, but the date holds. And hold it should."
With just more than four months remaining, the United States is effectively back at square one on how to create a provisional government to assume sovereignty. Because Iraqis have rejected other ideas, the challenge for the United States, the United Nations and Iraqi leaders will be to find a formula -- quickly -- that will provide political stability and be regarded as legitimate by the majority of Iraqis.
The Bush administration has essentially given up on the idea of further refining its troubled Iraq transition plan, already twice redesigned. The Nov. 15 plan, which the 25-member Iraqi Government Council initially accepted, called for a complex process culminating in 18 regional caucuses to pick members of a new national assembly, which in turn would pick a government and leadership.
"At the time we did this [plan] in November, it looked like a caucus system for finding a transitional assembly and a transitional government might have worked, but it does not appear that that caucus system has the support needed for it to work," Secretary of State Colin L. Powell said in an interview with ABC Radio. U.S. and U.N. officials say they have no preference on how to select a caretaker government. "We have absolutely no preferred options," Annan told reporters. "We need to have the Iraqis discuss it. They must take ownership, discuss it amongst themselves, and we will try and work with them to find a consensus."
But Annan told a private luncheon for the 15-nation Security Council he is considering a range of ideas, senior diplomats who attended said.
Among the new ideas was a suggestion that Iraq be administered by a government of "technocrats," rather than politicians, until direct national elections are held.
In other options, Annan outlined one proposal to expand the Governing Council and a second idea to appoint a national assembly -- possibly through a national conference -- like the loya jirga used in Afghanistan to select an interim government, U.N. diplomats said.
Expanding the council so that it is a cross section of Iraq's diverse ethnic and religious groups might be the easiest formula, U.S. officials say. But the Bush administration is not certain that transferring sovereignty to an expanded council would earn the approval of Iraq's top Shiite Muslim cleric, Grand Ayatollah Ali Sistani, whose initial objection to caucuses scuttled the administration's transition plan.
Annan plans to travel to Japan today and is expected to present U.S. and Iraqi leaders with recommendations after he returns on Feb. 25. Annan said the Security Council would probably have to adopt a new resolution in the months ahead to support his plans for political transition.
One issue still to be sorted out is the interim constitution, popularly known as the basic law. It is due to be concluded by Feb. 28 but has snagged on issues of religion and federalism. It was supposed to include provisions for a new provisional government.
To buy time for further negotiations, Annan said a new plan for the political transition did not have to be completed by Feb. 28.
In Baghdad, Bremer said the basic law must be based on secular, democratic principles and not draw on Islam as the sole source for legislation. "We have an obligation as the sovereign power that an appropriate democratic structure is put in place here while we are here so that we can deliver to the Iraqis what they want, which is a democratic, unified, stable country at peace with itself," Bremer said.
Violence continued Thursday as insurgents killed two American soldiers in a roadside bombing near Khaldiyah, 50 miles west of the capital, the U.S. command said.

Lynch reported from the United Nations. Correspondent Rajiv Chandrasekaran in Baghdad contributed to this report.
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>> NICE PICTURE?


SPIEGEL ONLINE - 20. Februar 2004, 16:11
URL: http://www.spiegel.de/netzwelt/politik/0,1518,287203,00.html
Image-Politur

"John Kerry rockt"

Von Frank Patalong

Der Mann sieht nicht nur kantig aus, er gilt auch als h?lzern: John Kerry mag Chancen auf die Pr?sidentschaft der USA haben, doch als Temperamentb?ndel gilt er nicht gerade. Vor vierzig Jahren jedoch tr?umte Kerry davon, ein Rockstar zu werden. Jetzt sucht er in sich den John von damals.
REUTERS
Yeah: Neuerdings spielt John Kerry sogar zwischen seinen Wahlkampfauftritten im Flieger zur Entspannung f?r die Fotografen
Aktuelle Umfragen zeigen John Kerry deutlich vor George W. Bush, und man muss sich Fragen, warum. Bushs Schuldenpolitik und seine Leistungen im Realit?ten-Verbiegen zur Rechtfertigung des Irak-Krieges konnten zwar nicht ewig unbemerkt bleiben und haben den noch amtierenden Pr?sidenten Punkte gekostet. Doch Kerry schien vor wenigen Wochen noch die denkbar schlechteste Wahl, den quirligen kleinen Pr?sidenten herauszufordern: Gro? und steif tapst er durch die Fernsehbilder, und wenn er zu einer Rede ausholt, dann aber gaaaaanz gr?ndlich und nicht zu schnell.
"Aaaaaaaai loooooove Neeeeeew Hampshire!" bejubelte Kerry den Sieg in seinem Heimatstaat in Zeitlupe und mit so tiefer wie unbewegter Stimme, dass man am liebsten die Geschwindigkeit heraufgedreht h?tte. Den Polit-Comedian Jon Stewart inspirierte das zu Vergleichen mit einem Frankenstein-Monster: "Braiiiiiin. Eeeeat braiiiiiin!"
Da wirkte das wohl gezielt gestreute Ger?cht, Kerry habe wie dereinst Clinton eine Aff?re mit einer Praktikantin gehabt, schon fast wie ein Weck-Signal, obwohl beide dies strikt leugnen: Sieh an, dachten sich da viele Kommentatoren, der Kerl lebt ja doch.
John Kerry: Nicht lustig?
Bis zu diesem Zeitpunkt hatten sich gerade die Satiriker und Comedians am marionettenhaften Kerry die Z?hne ausgebissen: W?hrend es seit Monaten eine Schwemme von Howard-Dean-Witzen gab, die John Liebermann-Ver?ppelungen ins Kraut schossen und auch John Edwards sein Fett abbekam, war es fast, als w?re Kerry gar nicht im Rennen.
Erst das Aff?ren-Ger?cht sorgte da f?r Munition: "Stimmt es", fragte sich Jay Leno, "dass John Kerry eine Aff?re mit einer Praktikantin hatte wie einst Clinton?"
"Ja!", beantwortete er die Frage selbst, "so ?hnlich. Nur ohne Zigarren!"
Mit einem Mal begann der ach so h?lzerne Kerry, einen Imagewandel zu vollziehen. Die Jungdynamiker unter den W?hlern h?tten sich vielleicht eher Howard Dean gew?nscht, w?hrend sich das linke Spektrum ausgerechnet auf den Vier-Sterne-General a.D. Wesley Clarke eingeschossen hatte. Bei beiden Gruppen k?nnte Kerry nun mit einer Entdeckung punkten, die so passend ans Licht der ?ffentlichkeit kommt, dass es schwer f?llt, an Zufall zu glauben: John Kerry, berichtete Anfang Februar die "Washington Post", tr?umte dereinst davon, ein Rockstar zu werden. Mehr noch: Als erster Pr?sidentschafts-Aspirant ?berhaupt hatte er vor mehr als 40 Jahren eine Platte aufgenommen.
Kerry spielte - da bleibt er seinem Image dann doch wieder treu - den Bass in einer Rockband namens "The Electras". Bassisten sind die netten Menschen, die gern ein wenig im Hintergrund stehen und - nicht selten mit gro?en H?nden - ihrem Instrument tiefe, sonore Einzelt?ne entlocken.
Die Botschaft: Ambition und Zuverl?ssigkeit
Dass kann Kerry bis heute, wie er am letzten Wochenende im gemeinsamen Gig mit dem Musiker Moby bewies. Der stresste den prominenten Politiker allerdings auch nicht und gab ein eing?ngiges Vier-Akkord-Liedchen von Bruce Springsteen zum Besten: So was wummert man auf dem Bass auch noch, wenn man vierzig Jahre nicht ge?bt hat. Doch darauf kommt es ja auch nicht an. Hauptsache, die Show macht Spa?.
Doch nicht so kultig: "Electras"-Scheibe, nach f?nf Tagen noch ohne Gebot
Einmal mehr scheinen sich die Demokraten also anzuschicken, einen Musiker in den Ring zu schicken.
Auf den Saxofonisten Clinton (da denkt man an Jazz, an Clubs, an edlen Schnappes und Zigarrenrauch) folgt der geradlinige Kerry: Der eine spielte ein Instrument, bei dem die Improvisation Pflicht ist, das auch qu?ken und kicksen und sich im Oberton ?berschlagen kann und soll. Der andere spielt Bass, ein Saiteninstrument, das eigentlich der Rhythmus-Sektion zuzurechnen ist: Verl?sslich muss stets der richtige Ton zum pr?zise richtigen Zeitpunkt kommen. Ist es nicht sch?n, was Kerrys Bandtr?ume nicht alles ?ber ihn aussagen?
F?r diesen vergleichsweise wilden Teil von Kerrys Vergangenheit interessieren sich nun viele in Amerika, und zum Gl?ck sind Kerrys ehemalige Band-Mitspieler alle auffindbar und redebereit. "Wir gr?ndeten die Band, um unsere Chancen zu erh?hen, dem anderen Geschlecht etwas n?her zu kommen!", verriet der Band-Pianist Jack Radcliffe der BBC.
Trickreich: Kerry, der Bass-spielende Norweger
Ein Ziel, dass die Jungs recht trickreich angingen: So ist dem Album-Cover zu entnehmen, dass der schlanke, hochgewachsene Bassist John ein waschechter Norweger sei. Das war zwar gelogen, zeigte aber Wirkung, wie Kerry zugibt: "Sie rissen uns nicht gerade die Kleider vom Leib, aber wir haben unseren Spa? gehabt!"
Die "Electras" spielten fast ausschlie?lich instrumental. H?fliche Kritiker bezeichnen die Musik als "rohen, geradlinigen Rock'n' Roll". Allein Jon Prouty, einst Gitarrist der Electras, bringt es ehrlicher auf den Punkt: "Die Platte war schrecklich."
Die BBC hat ein kleines Sound-Sample zu bieten, das der Sender irgendwo ausgegraben hat, und "Newsweek" schaffte es am Donnerstag gar, ein kleines Video zu entstauben: Schon verbl?ffend, wie die Zeugnisse aus dem Jahre 1961 so pl?tzlich wieder auftauchen.
Andererseits h?tte Kerry ja auch fast ein halbes Jahr Zeit gehabt, daf?r zu sorgen, denn bereits im letzten September konfrontierte ihn auf einer Wahlkampf-Veranstaltung ein findiger Plattenlabel-Eigner ?berraschend mit seiner Band-Vergangenheit. Schlagzeilen macht die erst jetzt, p?nktlich zum Endspurt im Bewerbungsrennen um die Pr?sidentschaftskandidatur der Demokraten: Ein Schelm, wer B?ses dabei denkt.
Knallerstory mit leichter Ladehemmung
Doch so richtig "Kult" will die Electras-Geschichte noch nicht werden. Bei eBay wechselt wom?glich an diesem Wochenende bereits die zweite Electras-Scheibe den Besitzer, wenn sich denn ein K?ufer findet. Nachdem ein erstes, vor wenigen Tagen versteigertes Album die Summe von 2500 Dollar brachte, offerierte jemand ein zweites Exemplar zum Startpreis von stolzen 2100 Dollar. Doch nach f?nf Tagen hatte sich noch kein Bieter gefunden - und dass, obwohl man in den wirklich publikumstr?chtigen eBay-Auktionen normalerweise sogar seinen eigenen Schatten verkaufen kann.
Ein Sammlerst?ck ist das Laien-Machwerk allemal: Nat?rlich erschien das erste und einzige Album dieser Electras im Eigenverlag (es gab noch mindestens zwei weitere Bands dieses Namens, die Platten ver?ffentlichten) und mit der Mikro-Auflage von nur 500 St?ck. Mehr konnten sich selbst die betuchten Jungs der Band, die als Sch?ler-Kapelle an der elit?ren St Paul's-Privatschule gegr?ndet worden war, nicht leisten. F?r einen richtigen Plattenvertrag hatte es nie gereicht.
Das allerdings k?nnte sich nun ?ndern: Schon wird ?ber eine Neuauflage der Scheibe gemunkelt, und John Kerry scherzte gegen?ber "Newsweek" jovial ?ber ein m?gliches Comeback der Band: "Wenn die Blues Brothers und Fleetwood Mac wieder vereinigt werden k?nnen, sollte das bei den Electras ein Klacks sein." Seine Vereidigungsfeier sei da ein m?glicher Termin.
Nicht alles Theater
Ob es dazu je kommt, h?ngt aber nicht nur von den amerikanischen W?hlern ab. Perkussionist Andy Gagarin etwa outet sich als "konservativer Republikaner", der "auf keinen Fall" Kerry seine Stimme geben werde. Auch Radcliff betonte, die Mehrheit der ehemaligen Band w?rde es vorziehen, "George Bush Bass-Stunden zu geben, als John Kerry einzusetzen".
Doch selbst so ehrliche Statements wird der scheinbar so h?lzerne Kerry zu seinem Vorteil zu nutzen wissen: Erst diese despektierlichen Unkenrufe machen die Fast-ein-Rockstar-Story glaubhaft.
Die versucht Kerrys Wahlkampf-Team nach Kr?ften zur Image-Politur zu nutzen: Mit einem Mal sieht man Kerry nun auf Fl?gen zwischen Wahlkampfauftritten klampfen, und seine Kampagnen-Website zitiert gen?sslich das Urteil des Plattenmanagers Erik Lindgren, der im September die erste Electras-Platte ausgegraben hatte: "John Kerry rockt!"
Ungl?cklich ?ber die ganze Geschichte d?rfte auch Radcliffe kaum sein: Als einziger der Electras war er vierzig Jahre bei der Musik geblieben und schlug sich als Pianist durch, der "alles von Tschaikowsky bis Jerry Lee Lewis" beherrsche. Zurzeit arbeitet er kr?ftig an seiner Website, verspricht, in K?rze Sound-Samples von den Electras bieten zu k?nnen und ist wohl auch an der Wiederauflage des Albums von 1961 nicht ganz unbeteiligt. Vorteilhaft entwickeln sich eben stets die M?rchen mit einer wahren Wurzel.

? SPIEGEL ONLINE 2004
Alle Rechte vorbehalten
Vervielf?ltigung nur mit Genehmigung der SPIEGELnet GmbH

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Romney rips bid to protect Kerry seat
By Frank Phillips and Yvonne Abraham, Globe Staff, 2/20/2004
NORTH ATTLEBOROUGH -- Governor Mitt Romney yesterday denounced a maneuver by Democrats on Beacon Hill to block him from naming an interim replacement if US Senator John F. Kerry wins the presidency and resigns his Senate seat.
"It is clearly partisan," Romney told reporters at a campaign stop for GOP state Senate candidate Scott Brown. "I don't think even the Democratic leadership will get behind that."
"If a Democrat were in the corner office, there would be no discussion about this issue," the governor said. "This is coming up because there is a Republican governor."
Romney, who under current law would fill the vacancy with a temporary appointment, also vowed he would not appoint himself. He said that he would run for reelection in 2006.
"I am planning to be in this position all four years, maybe eight if I am lucky enough to be reelected," Romney said. "I fought long and hard for this job, and I am not going to give it up."
The Globe reported yesterday that the House chairman of the Joint Committee on Election Law, Representative William Straus, is pushing legislation that would require a special election shortly after a vacancy occurred in a US Senate seat. The bill would not permit an interim appointment by Romney.
Straus's proposal is expected to be taken up when House Speaker Thomas M. Finneran and Senate President Robert E. Travaglini meet privately tomorrow to discuss a number of issues, including the battle for a constitutional amendment that would ban gay marriage. A spokesman for Finneran said the House leader had no comment on the issue. Travaglini could not be reached.
If Straus's proposal were to become law and Kerry were to become president, Romney would be blocked from naming an interim senator who would stand for election in 2006 to fill out the term, which expires in January 2009. The seat would instead remain vacant until a special election.
Democrats argue that the interim office holder would have all the advantages of an incumbent. They said it gives too much power to one person -- Romney -- to determine who the state's next US senator should be.
"The voters should have the right to elect US senators, and it should not be left to Governor Romney," said Philip W. Johnston, the state Democratic Party chairman. "As a public policy matter, it is hard to argue that it is not more democratic to allow the voters to chose who will be a US senator than leave it to one person to make this momentous decision."
But Romney scoffed at the notion, saying the law has been in place for 82 years and used by Democratic governors in the past.
"You really don't want to create a monopoly that has so much power it is going to change the law in such a blatantly partisan way and at a time when people are really looking to have fairness and equality on Beacon Hill," Romney said.

? Copyright 2004 Globe Newspaper Company.

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The Coming of Nemesis
Hubris and the law of unintended consequences.
Irony, paradox, hubris, and nemesis are all Greek words. They reflect an early Western fascination with natural, immutable laws of destiny, perhaps akin to something like the eastern idea of karma -- that excess and haughtiness can set off a chain of events that are neither predicable nor welcome.
Take the recent controversy about President Bush's military record. Heretofore, Mr. Kerry had wisely decided to let the sleeping dogs of Vietnam lie, perhaps cognizant of how the "bloody shirt" had once tainted and polluted 50 years of late-19th-century American presidential campaigns. Besides, the Republicans had not looked good in questioning the fine character of Max Cleland, whose service to his country deserved better. In the primaries, the genuinely war-heroic Mr. Kerry seemed to realize that it was not wise to question Howard Dean's skiing in Aspen under the aegis of a medical deferment. After all, most Americans were more interested in talking about winning the present war rather than crying over losing the past one -- and Vietnam was a morass that tarred everyone who lumbered in.
In 1992, Mr. Kerry had, quite soberly, called for an end to recriminations about Mr. Clinton's draft record. And that was wise. From time to time he had gone on record to emphasize how tumultuous the late 1960s and 1970s were -- and that what was said and done then was often a result of passion rather than reason. Kerry seemed to remember -- and for that reason he was rightly cautious -- that many Vietnam veterans against the war at the time had left a paper trail of greater respect for the resisters and draft-evaders who chose not to participate in an "immoral" war than for some of their fellow warriors who went over to serve and "kill." Indeed, up until about 1980, the popular mythology for millions was that a Vietnam veteran deserved less respect than a draft-resister. Of course, we forget that absurdity now in the days of the bloody shirt, but it was nevertheless true and explains the near inexplicable contortions and subsequent reinventions of that generation that we witness today.
So Mr. Kerry rightly sensed that, while his own combat record was beyond reproach, his subsequent strident antiwar activities surely were not -- ranging from confessionals about war crimes to throwing away someone else's medals before the cameras. And Kerry was even wiser in appreciating that while a sort of mytho-history had emerged, asserting that Vietnam-era protesters once attacked the government only, never the soldiers themselves, most Americans of the era remembered a very different reality: Veterans in fact routinely and unfairly were accused of atrocities, and were slandered. Returning GIs were sometimes divided between those who felt that their service was honorable, and those who sought exculpation or popular acceptance from the protest generation by maligning fellow soldiers as agents of immorality.
Thus it was prudent to let all this alone, and not take the bait of thinking a decorated veteran who opposed the war could score points against a supporter of it who did not serve. But the Democrats were not content.
Instead, they floated old accusations that a twenty-something George Bush, who strapped himself into something as dangerous as an obsolete, fire-belching, and occasionally explosive F-102, was somehow near treasonous. Young Bush may have been impetuous and he apparently missed some roll calls, but anyone who rides the stratosphere a few inches above a jet engine is neither a coward nor a man who shirks either danger or responsibility.
Now the Democrats who thought up this low hit on the president will reap what they have sown -- as Kerry's entire (and ever-expanding) record of ancient slips and slurs will unnecessarily go under full scrutiny, the sometimes shameful words of a rash and mixed-up youth unfairly gaining as much attention as once brave deeds. By August the American people will be sick to death of Kerry's pandering to veterans -- or perhaps as indifferent to his medals as they were to the equally stellar record of sometimes-failed candidates like Bob Dole, Bob Kerry, John McCain, or Gray Davis.
The WMD controversy is similar. It is legitimate to question the nature of American intelligence as long as the fate of Saddam's once-undeniable arsenal remains murky. And the Democrats can legitimately score points in alleging that the administration put too much emphasis on a single case for war when there were a dozen other reasons for regime change that were far more compelling.
But they were not content with that fair enough tactic. No, they had to press on with really offensive rhetoric -- Messrs. Gore and Kennedy alleging conspiracies, near treason, and the "worst" diplomatic decision in U.S. history. A sad cast of provocateurs and Vietnam War-era retreads like Noam Chomsky, Michael Moore, Al Franken, and Not in Our Name were more often to be the intellectual godheads of the Democratic response than the ghosts of Harry Truman, JFK, and Scoop Jackson. A Hubert Humphrey would not have let a creepy Abbie Hoffman in the same room with him; Wesley Clark smirks on stage alongside a buffoonish Michael Moore as the latter calls a war-time president a deserter.
Yet the problem with this additional slander is that the war, in fact, has turned out to have a lot to do with WMD -- and will bring dividends that are far more important even than disarming Saddam. Pakistan is now revealing the extent of its nuclear treachery; the developments in Libya are surreal, but inexplicable apart from the removal of Saddam; and a newly energized U.N. inspection team suddenly finds traction with Iran. Thus the more the Democrats allege American fantasies about WMD, the more quite dangerous regimes instead see reality -- and fear that their own arsenals might ensure them a rendezvous with something analogous to the fate of Saddam Hussein.
The same irony is true about the hysteria over the poor Europeans, "unilateralism," and "preemption." The Democrats, soberly and carefully, could have tried to argue that the administration and many of us sympathetic to it were unnecessarily blunt and in need of diplomatic niceties. A fair enough charge that would have received, in turn, a fair enough, unapologetic rebuttal. But the campaigning instead brought bizarre allegations by Clark, Kerry, and Dean that the Bush administration has ruined the trans-Atlantic relationship and that we were now de facto alone in the Western world. In fact, human nature being what it is in respecting strength, action, and military success, the United States finds itself in a position of unique power vis-?-vis both allies and enemies.
Europe, albeit kicking and screaming, is just beginning to appreciate its new enhanced role as "good cop" that warns the likes of Iran and Syria not to upset the "unpredictable" Americans when they should work within their own multilateral auspices. Europeans know better than the Democrats that only American threats of force ever cut any ice in the Middle East. Kofi Annan privately grasps that the belated U.N. effort to return their inspectors to Iraq was possible only because of George Bush's promise to use force -- a threat that had a credible shelf-life of only a few months. Even the U.N. is not so much furious at Mr. Bush as intrigued and scared: intrigued that they might regain credibility if a more harnessed and circumspect America can nevertheless repeat its resolve to enforce U.N. sanctions; and scared that after last autumn's U.N. machinations, hypocrisy, and anti-Americanism, we find them all an embarrassment if not irrelevant altogether.
Europe is also startled and embarrassed that Mr. Bush and Co. yelled out at the NATO parade that the emperor was, in fact, buck naked -- and that a continent with a larger population, economy, and territory than the United States was in no need of massive American military support when its own citizenry had whipped itself into a frenzy of smug and hypocritical ingratitude. Ditto the Koreans. Democrats yell about "imperialism," even as allies worry about our new "isolationism" -- go figure.
Thus just as we witness Democratic hysteria over purported estrangement, the Europeans are far more worried about the future of NATO and their own self-induced severance from the greatest military power in the history of civilization. Only now do they realize that if they don't commit more troops to Iraq and Afghanistan there are simply few reasons for the alliance to exist -- and none at all for tens of thousands of Americans to protect their soil at times of scary things like the Olympics, more terrorists flocking into Europe, and mounting Muslim anger against belated French efforts to stand up to Islamic fundamentalism.
What a strange spectacle then now awaits us in the summer presidential campaign to come. Democrats will plead for more sensitivity to European needs -- even as more neutral observers concede that for the first time in decades a new honesty and maturity is entering the trans-Atlantic relationship precisely because Mr. Bush pulled back the curtain and exposed the hypocrisy of an anti-Americanism so fashionable in the out-of-touch European shire.
No one wishes to occupy a country. But after the instability in Iraq and a cost nearing 400 combat deaths the Democrats are now not merely questioning the tactics of achieving democracy in Iraq, but the entire notion of occupation itself. But once they go down that road they will discover history is not on their side and will be hard put to offer better alternatives to the present course.
For the record, not occupying Germany in 1918 led to the myth that the Prussians were never beaten, but stabbed in the back while occupying foreign territory -- a terrible mistake not repeated with postwar Japan and Germany. It might have been neater and quicker to leave Afghanistan after the Soviets were expelled in the 1980s and to depart Haiti in a flash, but the wages of those exit strategies were the Taliban and September 11 as well as the current mess in the Caribbean. The first Bush administration left the present jumble in Iraq to the second, which to its everlasting credit is determined not to leave it to others. Had Mr. Clinton bombed and then just left the Balkans, rather than the present costly and bothersome peace we would have had the sectarian and tribal sort of ruin that surely will get worse if we run now from Iraq.
Since the Democrats viciously and clumsily have attacked one of the most courageous (and humane) policies of any administration in the last 30 years, the American people will soon come to ask what they in fact will propose instead ("put up or shut up"). Most of us are cognizant that bombing from 40,000 feet gives an "exit strategy," but, without soldiers on the ground, postpones the problem of tyrannical resurgence -- and thus will inevitably leave either another war for another generation or something far worse still on the horizon like September 11.
There were a number of legitimate areas of debate for the fall campaign -- deficits, unfunded security measures at home, moral scrutiny over postwar contracts, more help for Afghanistan, greater control of domestic entitlements, unworkable immigration proposals, and the like. But instead of statesmanship from the opposition, we got slander about Mr. Bush's National Guard service, misrepresentations about intelligence failures that had hampered both previous administrations and the present congress, preference for an unsupportable European position over our own, and stupidity about what to do in Iraq.
The Democrats may have seen some short-term gains from all the attention given to their bluster, but theirs still remain untenable issues. And so nemesis will bite them like they will not believe in the autumn -- and, of course, just when it matters most.

http://www.nationalreview.com/hanson/hanson200402200838.asp

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French paper: EU panel finds Arafat did not fund terrorism
Herb Keinon Feb. 19, 2004
A week after the German paper Die Weld reported suspicion is growing that money from Palestinian Authority Chairman Yasser Arafat's office was transferred to terrorist organizations, the French daily Liberation reported Wednesday that a report being prepared by the EU's anti-fraud unit (OLAF) will show no financial tie between Arafat and terrorism.
The paper reported that according to its sources the report will show that Arafat did not use financial assistance from the EU to "help in any way to fund terrorist organizations like the Aksa Brigades."
The OLAF report on whether hundreds of millions of euros to the PA was misused is slated to be released in March.
Following the Liberation report, a spokesman for the European Commission said, "We are waiting for OLAF to publish the report."
Following the Die Weld report, which also indicated OLAF investigators had authenticated documents Israel provided the EU linking Arafat to terrorist groups, OLAF released a statement saying it has "not finalized its investigation.
Therefore, any conclusions attributed to OLAF are premature and are not confirmed by evidence."
Ilka Schroeder, a German European Parliament member affiliated with the Green Party, who was among those who pushed for an investigation of how EU money to the PA was being spent, sent an open letter to the three presidents of a "working group" in the European Parliament dealing with the issue on Thursday, discounting the conclusions as reported in Liberation.
"It is known that the Aksa Brigades are closely linked with the Fatah movement of Palestinian President Arafat and that they have committed several suicide bombings against Israelis," she wrote. "It is known that not only school books, but also radio and TV stations, prayers paid by the state [sic], and official newspapers spread hate against Israel and anti-Semitic prejudice. If OLAF shouldn't know this or should not be capable to make the logical conclusions from these facts, then OLAF is simply the wrong institution to investigate this course of events."
Schroeder called on OLAF to immediately release a first "confidential" paper it reportedly wrote on the issue, and suggested "that the European Parliament apologize publicly and admit the fatal role of the European Union in the war against Israel [which will make it easier for victims and the surviving dependants to sue the EU]."
Nitsana Darshan-Leitner, head of Shurat Hadin-Israel Law Center, filed a NIS 100 million suit in the Tel Aviv District Court in May 2002 against the EU on behalf of an Israeli family decimated by a terrorist attack in August 2001.
The law suit alleges that the EU recklessly provided the PA with massive sums of financial aid, while knowing that the money was being diverted from its intended civilian purposes to Palestinian terrorist groups.


This article can also be read at http://www.jpost.com/servlet/Satellite?pagename=JPost/JPArticle/ShowFull&cid=1077164219985&p=1006688055060
---------------------------------------------
THEN VISIT...

www.humancost.org


Posted by maximpost at 3:51 PM EST
Updated: Friday, 20 February 2004 7:49 PM EST
Permalink


>> TAHIR DOSSIER...

Alleged Malaysian Nuclear Dealer Missing
By PATRICK McDOWELL
ASSOCIATED PRESS
KUALA LUMPUR, Malaysia (AP) - The middleman in an alleged deal to supply Libya with nuclear components has disappeared from his Kuala Lumpur residence, and U.S. officials Thursday said Washington wants Malaysia to stiffen export controls to prevent such proliferation.
Malaysia summoned the top U.S. diplomat to protest what the government views as unfair attention on it as President Bush calls for a global crackdown on the international nuclear black market.
The allegations that a Malaysian company produced centrifuge components for Libya's nuclear weapons program has produced the first bump in U.S.-Malaysian relations since Prime Minister Abdullah Ahmamd Badawi took office nearly four months ago.
Malaysia's protest declared the country supports nuclear non-proliferation and was "offended" that Bush unfairly named the nation as a source of parts to Libya's program without specifying other nations, the New Straits Times newspaper reported.
Malaysia thoroughly investigated the origin of the parts and determined that the company involved - which is majority-controlled by the prime minister's son - did not know they were for nuclear use or would end up in Libya, the newspaper reported.
Meanwhile, the former company executive who brokered the Libya deal - Sri Lankan Buhary Syed Abu Tahir - has left his Kuala Lumpur apartment with his family, guards at the building said.
Deputy Prime Minister Najib Razak said Thursday he did not know the specifics of the diplomatic protest, but "probably it is to express our concern that Malaysia is singled out unfairly and we have been totally vindicated by the facts."
U.S. officials indicated Thursday that the key challenge in Malaysia and other countries was to put export controls in place to keep unwitting companies from being used.
"In keeping with its commitment to non-proliferation, we are encouraging Malaysia to take the steps necessary to bring its export control system in line with international standards, in hopes of preventing future proliferation activities," Embassy spokesman Frank Whitaker said.
The parts, seized en route to Libya last October, were produced by Scomi Precision Engineering, a subsidiary of the oil-and-gas company Scomi Group that is majority-controlled by the prime minister's son, Kamaluddin Abdullah.
The deal to make the parts for a Dubai-based company, Gulf Technical Industries, was brokered by Tahir, whom Bush labeled the "chief financial officer and money launderer" of the network led by Abdul Qadeer Khan, father of Pakistan's nuclear bomb.
The Tahir family left their luxury apartment in an exclusive Kuala Lumpur neighborhood on Wednesday, security guards at the complex said, a day after The Associated Press tracked them down and tried to seek comment. Their current whereabouts are unclear, though they are believed to be under close surveillance by Malaysian authorities.
A senior police official, speaking on condition of anonymity, told AP on Thursday that as far as he knew, Tahir, who has Malaysian permanent residency, was still in the country.
Tahir's Malaysian wife, Nazimah Syed Majid, said Tuesday evening that her husband was "away." She did not say where.
But a building security guard told the AP that Tahir had come and gone several times from the building Tuesday. The couple left Wednesday morning with their two young children, sending a driver back later to pay outstanding bills.
The telephone was not answered at the apartment Thursday.
Malaysian officials have said Tahir was cooperating with a police investigation into the Khan network, but have given no details. He is free and Najib has said he would remain so unless police determine that he committed a crime.

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>> DR. STRANGELOVE CONTINUED...


Pakistani Linked to Illegal Exports Has Ties to Military
By DAVID ROHDE
http://www.nytimes.com/2004/02/20/international/asia/20STAN.html?hp
Published: February 20, 2004
ISLAMABAD, Pakistan, Feb. 19 -- A Pakistani businessman who has been linked to the illegal export from the United States to Pakistan of high-speed switches has longstanding ties to the country's powerful military, according to documents filed in an American court and interviews here. The switches can be used as triggers for nuclear weapons.
Humayun Khan, the Pakistani businessman whose office address was the final destination for the shipment last fall of 66 triggers, confirmed in interviews that he and his father had been suppliers of equipment and technology to the Pakistani military for the last 20 years.
Mr. Khan insisted that he had not been involved in the effort to smuggle the American-made triggers to Pakistan.
"I know it's my address, and everything is pointing to me and my company," Mr. Khan said as he sat in the offices here of his company, Pakland P.M.E. "Frankly speaking, if I want to deal in these things, I would never be so stupid as to use my own company."
But documents Mr. Khan presented to bolster his argument as well as court papers filed in Washington provide evidence that he did business supplying the Pakistani military with restricted technology.
The court documents are part of the case against Asher Karni, an Israeli businessman living in South Africa who was arrested on Jan. 1 by federal agents in Denver and charged with illegally exporting the sophisticated switches to Pakistan by way of South Africa. Mr. Karni is now in custody awaiting trial in Washington, D.C.
Mr. Karni told the American manufacturer of the switches, PerkinElmer Optoelectronics of Salem, Mass., that they would be sent to hospitals for use in treating kidney stones.
American law enforcement officials said "voluminous" e-mails to Mr. Karni detail Mr. Khan's repeated requests between June and September 2003 for the trigger switches.
Before the switches were sent out of the United States to Mr. Karni's company in South Africa, they were disabled at the request of federal law enforcement officials, and became part of a sting operation.
In other e-mail messages in the court records, Mr. Khan wrote repeatedly to Mr. Karni between May 29 and June 16 of last year to inquire whether he could purchase infrared target detectors for Pakistani Air Force fighter missiles. The United States bars the sale of such equipment to Pakistan without American government approval.
Mr. Khan himself produced letters showing that he tried to buy oscilloscopes, magnetometers, telemetry systems and airplane guidance systems from American companies in 2002 and 2003. He said all the devices were for civilian companies.
American nonproliferation experts said the items Mr. Khan sought to buy also had military applications.
President Pervez Musharraf of Pakistan has spent the last month trying to quell a nuclear proliferation scandal involving Abdul Qadeer Khan, a scientist who is called the founder of the country's nuclear weapons program. On Feb. 4, Dr. Khan, who is no relation to Humayun Khan, confessed to providing nuclear technology to Iran, Libya and North Korea for more than a decade.
A day later, General Musharraf granted a full pardon to the scientist. He said no other military or government official had been involved in the proliferation. He later declared that his government had stopped all Pakistani nuclear hardware smuggling when it removed Dr. Khan from his post in March 2001.
Pakistani officials declined to comment on the Karni case and the trigger devices. Syed Anwar Mahmood, the government's information secretary, said Thursday that Pakistan had received no official notification of the investigation of Mr. Karni.
"The concerned people say they can't comment on it because they have not been approached officially on it," Mr. Mahmood said.
In interviews Humayun Khan said his company supplied civilian companies and equips college and high school chemistry, physics and television repair laboratories. He said he purchased equipment for the Pakistani military only occasionally.
Mr. Khan produced a letter from an Islamabad construction company asking that he purchase a sophisticated oscilloscope made by Tektronix, a Beaverton, Ore., company.
The Pakistani construction company said it had never issued such a letter.
Mr. Khan also provided a letter from a television company that he said had requested another Tektronix oscilloscope. An official from the television company said he could not remember placing such an order, and did not respond to subsequent requests for comment.
Mr. Khan said that his company employed only four people and that military supplies made up only a small part of his business. At different points he suggested that a former employee, smugglers or his brother, a bitter business rival, might have framed him.
In a telephone interview, his brother, Faisal Khan, denied any role in the case.
Mr. Khan said he knew Mr. Karni as a supplier of electronic equipment, and had made contact with him to buy several pieces of American-made equipment that were not dual-use items -- that is, that could be used to make nuclear weapons.
American investigators have said the high-speed switches were ordered for a group called AJKMC Lithography Aid Society. Mr. Khan showed a letter from the group dated Dec. 27, 2003, saying the switches had gone to hospitals in Pakistan and Sri Lanka. But the group's letterhead listed its address as Humayun Khan's office in Islamabad.
Mr. Khan said he could not explain why the group had used his office address. He said did not know who they were, and had had contact with the group only by e-mail. He said his e-mail records had been destroyed the day before by a computer virus.
Alisha Goff, a spokesperson for Tektronix, said that Mr. Khan was an independent distributor in Pakistan for the company and that all shipments made to his company had been approved by the Department of Commerce. She said most of the company's customers in Pakistan were schools and telecommunications companies.
She said all shipments to Mr. Khan's company had been stopped, pending the criminal investigation into the trigger case.
Eric Lichtblau contributed reporting from Washington for this article.
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>> UPDATE A MONTH LATER...


Lebanon to Return More Than $15M to Iraq
ASSOCIATED PRESS
Lebanon to Return More Than $15M to Iraq BEIRUT, Lebanon (AP) - Lebanon will return to Baghdad more than $15 million in Iraqi money seized on a plane that landed in Beirut, Lebanon's top legal official said Thursday.
Lebanese authorities confiscated 19.5 billion new Iraqi dinars from a private, Lebanese-owned plane that flew from Baghdad on Jan. 14.
They also arrested two Lebanese businessmen on the plane and a third who met them at the airport. All have been released on bail.
Lebanon's Prosecutor General Adnan Addoum said he decided to return the money after the Iraqi Foreign Ministry had sent a letter Feb. 14 demanding the dinars.
The confiscation of the new money came as Iraq's old bank notes - bearing former Iraqi President Saddam Hussein's portrait - became obsolete following a three-month period to exchange them for the new currency.
One of the arrested businessmen reportedly told police that most of the money was to pay for armored cars to protect Iraqi officials.
The Iraqi Interior Ministry said in a letter published in Beirut last month that the money was intended to pay for Iraqi government purchases.
Iraqi Governing Council members have visited Beirut and asked Lebanese officials to release the money, plus other Iraqi dinars held in Lebanese banks.

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Qatar Holds Suspects in Yandarbiyev Death
ASSOCIATED PRESS
DOHA, Qatar (AP) - Qatar said Thursday it has arrested two suspects in the assassination of former Chechen President Zelimkhan Yandarbiyev.
Yandarbiyev, 51, was killed Feb. 13 when a bomb ripped through his car. His teenage son was wounded.
The Interior Ministry said two suspects are being questioned in his death. No further details were available in the ministry statement, carried by the Gulf state's national news agency, QNA.
Yandarbiyev, Chechnya's acting president in 1996-1997, had lived in Qatar since 2000 and was wanted by Russian authorities for suspected terrorism and links to al-Qaida. Moscow had been seeking his extradition.
His assassination occurred one week after a bombing in a Moscow subway killed 41 people and wounded more than 100. President Vladimir Putin blamed Chechen rebels for the bombing.
An aide to Yandarbiyev, Ibrahim Gabi, has blamed the Kremlin for Yandarbiyev's killing, a pro-rebel Web site reported.
Last year, the United Nations put Yandarbiyev on a list of people with alleged links to al-Qaida. Washington also put him on a list of international terrorists subject to financial sanctions.
Yandarbiyev became one of the most prominent proponents of radical Islam among the Chechen rebels. During the hard-line Islamic rule of the Taliban in Afghanistan, Yandarbiyev opened a Chechen Embassy in the Afghan capital, and a consulate in the southern city of Kandahar.
Qatar hosts a variety of Muslim politicians and militants, including Palestinian Hamas leaders, Algerian Muslim fundamentalists and officials of Saddam Hussein's regime. The Qataris say they are adhering to Arab traditions of providing hospitality to guests and of offering sanctuary to refugees.
The practice also serves to defuse anger at Qatar for allowing the United States to establish military bases in the Gulf sheikdom.

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Saudi authorities kill wanted suspect in clash south of Riyadh
A fugitive was shot dead in the course of an armed clash with ?Saudi ?security forces in the residential area of Al-Aziziah south of Riyadh Wednesday.?

In its Thursday edition, Okaz reported the wanted man opened fire in the direction of the security forces, that ?were rushed to the region after receiving a tip about his presence in the area.

They reportedly retaliated the shooting, killing the suspect on the spot.? (Albawaba.com)





Saudi FM stresses need to reform
Prince Saud Al-Faisal, the Saudi Foreign Minister, on Thursday stressed the need to reform. Lecturing in Belgium in response to an invitation from Brussels-based Center of European Political Studies, Prince Saud said efforts
should be exerted to facilitate the process of re-formulating the economic system and improving management, adding that Islam could play a crucial role as regards coherence of the society.

"We are in need of a comprehensive reform program characterized with political, legal, administrative, economic and educational components", Saudi Arabia's top diplomat said, adding "despite the need of the Arab world to a such reform, yet the reform can never be imposed from outside."

According to SPA, he pointed out that the settlement of the Arab-Israeli dispute on the base of establishment of two countries constitutes a practical and realistic solution.






The Rediff Special/ Swaran Singh

A dangerous place
As reports about the possible failure of some of Pakistan's nuclear devices begin to trickle in -- thereby confirming that Islamabad's nuclear adventure does not really obtain for it the benefits of having 'equalled' India -- previews of its forthcoming budget have already begun projecting the severe costs that Pakistan will have to bear in the months ahead.
Government officials have indicated that the 1998-99 budget -- to be announced on June 13 -- will contain as much as 50 per cent cut in all non-developmental expenditure and provide for other measures to promote industrial growth along with stricter financial discipline. As part of the austerity measures Prime Minister Nawaz Sharief is reported to have decided to shift from his present secretariat to a more modest building.

According to initial estimates, the current account deficit in the first nine months of fiscal 1997-98 was $ 1.13 billion. The budgetary deficit is likely to reach $ 3.4 billion by the end of this year. Pakistan's National Economic Council, the country's top economic planning body, has said it will also review the salaries and allowances of government servants.

The United States, which has already announced sanctions, can halt the rollover of an estimated $ 700 million to $ 1 billion in commercial loans and credit lines for items like food and oil imports which are provided for by American banks. Finance Minister Sartaj Aziz has announced plans to launch three major campaigns to counter the sanctions. These include increasing exports, raising revenue and expanding agricultural production. He hopes to recover an estimated Rs 140 million of bad or overdue debt and to recover taxes paid only by one per cent of 140 million Pakistanis. All these projections look fairly ambitious, to say the least.

More optimistic analysts believe that since over 90 per cent of foreign assistance flows into Pakistan from multilateral donors, the reduced inflow of US aid may not really result in a complete economic collapse. Although the US and Japan have considerable influence over these agencies, not always have their opinions resulted in suspension of grants by the World Bank or the International Monetary Fund. The World Bank funds some 40 ongoing projects in Pakistan and is committed to funding capital market and banking sector reforms.

However, can Pakistan keep on track of the targets and the reforms it had promised? As per mutually agreed norms for these loans, Pakistan is required to meet certain targets for budget deficit, revenue collection, growth rate of gross domestic product and inflation in order to qualify for the $ 1.1 billion left in the IMF's $ 1.56 billion structural adjustment programme signed last October.

Pakistan's foreign debt repayment is likely to emerge as one major crisis. Some commentators fear that Pakistan may default on its foreign debt obligations as it faces spiralling inflation and cuts in development spending, resulting in an economic slowdown. According to World Bank officials, Pakistan needs $ 5.3 billion annually to service and repay its estimated $ 32 billion foreign debt, of which as much as 20 per cent is short-term.

Already, fearing a run on foreign currency bank deposits of about $ 10 billion, against official cash reserves of only $ 1.3 billion, the State (central) Bank of Pakistan shut commercial banks the day after the first nuclear tests on May 28 and froze all foreign currency deposits and budgetary transactions. It partially lifted the freeze the next day and allowed people to draw their foreign currency in rupees at the rate of Rs 46 per dollar against the official rate of Rs 44.05. According to experts, all this has caused irreparable damage to investor confidence. There will be very few commercial lenders and investors interested in taking an exposure in Pakistan even at a higher rate of return.

But apart from these purely economic costs, the implications of these tests for regional geo-strategic equations also portend an equally difficult future. There are a variety of reasons why Pakistan's weaponisation has made Pakistan anathema not only for this region but for all other proponents of non-proliferation. This is especially so because of its inherent linkage with Chinese supplies about which the US remains very concerned.

Secondly, it has linkages with Islamic countries like Saudi Arabia, Iran and Syria, and this threatens to spill over into the extremely sensitive energy epicentre of West Asia. This region remains critical to Washington's foreign policy formulations. There is no dearth of evidence to prove that right from its inception, Pakistan's nuclear capabilities have been visualised in terms of technology and training from China while the funding allegedly came from its Islamic friends. Some of these friends might one day pressurise Pakistan to share this nuclear technology.

Looking at Pakistan's extensive involvement in hosting and sponsoring insurgencies in Afghanistan and India during the last 15 years these fundamentalist organisations have obtained tremendous access and influence over Pakistan's power elite. It cannot be ruled out that these nuclear weapons are now far more likely to be slipped into the hands of terrorists. Even if such a formal transfer does not take place, there is still great potential for other complications. This is because, unlike the other six nuclear weapons states where the final control on nuclear weapons remains in the hands of a popularly elected civilian leadership, in Pakistan's case it is the military that controls not only the nuclear button but the entire polity of Pakistan, thus making it far more an instrument of militaristic thinking and far less accountable to Pakistan's public.

These internal pressures are now going to become more and more assertive. Having tested these nuclear devices, the Pakistan government will now be expected to make further allocations for building its overall nuclear deterrent -- warheads and delivery systems. According to a former army chief, General Mirza Aslam Beg, Pakistan spent $ 250 million on its nuclear programme during 1979 to 1992. Considering that this was during the inception of its nuclear programme, the expenditure is sure to be multiplied by Pakistan's post-Chagai requirements.

Moreover, this has to be seen against the backdrop of the steep fall in the value of Pakistan's rupee which was devalued by as much as 50 per cent in 1993 and has continued to slide following the nuclear tests. It is a well known fact that beginning in the early 1980s, Pakistan had continued to allocate vast funds for military purposes at the cost of economic security. During the decade 1986 to 1995, Pakistan's defence expenditure stayed at about 7 per cent of GDP and at about 30 per cent of its annual budget.

Such consistently high allocations have had an adverse impact on Pakistan's economic development. This has to be seen along with Pakistan's unusually high rate of annual debt repayment which is generally over 60 per cent of the total estimated revenue. During 1995, for which figures are available, defence expenditure (Rs 115 billion) and debt repayment (Rs 157 billion) together exceeded Pakistan's total revenue of Rs 265 billion. This trend has more or less sustained itself all these years.

There has been some decline in Pakistan's defence allocations these last two or three years, but this is understandable in terms of its push to its nuclear and missile programmes.

Pakistan's nuclear tests have further complicated India's policies, both towards Pakistan and China. This is because Pakistan's nuclear programme has inherent linkages with China's actions and policies towards India. Though it was widely expected, the visit to Beijing by Pakistan Foreign Secretary Shamshad Ahmed, followed by the nuclear tests on May 28 and 30, added to India's suspicions about China's motives and contribution towards Pakistan's nuclear tests.

To make this Sino-Pak linkage obvious, in his address to the nation on May 28, Nawaz Sharief sounded grateful when describing Pakistan's 'time-tested' relations with Beijing, saying, "Our friendship has been further strengthened." In India this is bound to be interpreted in the context of China's alleged involvement in promoting Pakistan's nuclear and missiles programmes.

The wildest speculation making the rounds have described the Pakistani tests as actually conducted by China which, it is said, decided to please its ally and also circumvent the CTBT. However, the failure of some of these devices does not lend credence to such speculation.

At a more serious level, since the late 1980s, there has been a well established, sustained correlation in China's development projects on various missiles and their arrival and announcement by the Pakistani leadership which proves how Islamabad owes most of its nuclear and missile arsenals to Beijing.

Finally, what makes Pakistan's nuclear tests particularly dangerous is that the Chinese have continued to ignore all these signals and play soft vis-a-vis Pakistan. China is now trying to gang up with the United States in declaring India as the culprit and protectiing Pakistan from the consequences of its nuclear response to New Delhi.

What is worse is that these nuclear weapons may not have to be actually used to unleash death and destruction. From the Indian point of view, looking at the immediate reaction within Pakistan, where the tests were followed by a declaration of a state of emergency and all transactions in foreign exchange halted, the most dangerous prospect of economic sanctions may be one where it results in Pakistan's internal instability and political disorder. This may be the most dangerous threat to India's security and peace.

Dr Swaran Singh, author of Limited War, is a Research Fellow at the Institute for Defence Studies & Analyses, New Delhi, where he specialises on China's defence and foreign affairs.

The Rediff Specials








Posted by maximpost at 12:48 AM EST
Permalink
Thursday, 19 February 2004

>> MAPS...http://www.fas.org/spp/starwars/advocate/ifpa/report696_ch4_pak.htm

Pakistan: A Gateway to Westward Proliferation?
The term "Pakistan" is an acronym coined in 1933 in anticipation of the creation of a Muslim-dominated state separate from the political system that would govern Hindu-dominated India. The acronym represents P for Punjab, A for the Afghanistan border states, K for Kashmir, S for Sind, and TAN for Baluchistan. With independence in 1947, these diverse ethnic groups were infused with Muslim immigrants from India (called Mahajir). Unfortunately, the resulting state is one that is still very fragile, a state that is highly fragmented by ethnic differences.

Even religion has not proven to be a totally unifying factor for the Islamic Republic of Pakistan. Sectarian violence is common between Pakistan's Muslim Sunni majority and its 15 percent Shia minority. This conflict has created a Sunni-Shia situation that is reflective of Protestant-Catholic relations in Northern Ireland. Shootings, killings, and beatings are the hallmarks of this relationship.1 Yet, in spite of the strongly religious currents that influence Pakistani society, Pakistan's voters have made it clear that they want a secular government. For example, only 8 percent of the vote in the October 1993 election was won by religious-political parties.2 Yet, Islamic fundamentalists still exert a major influence on Pakistan's political process as they have the capability of making themselves felt on individual issues, turning large crowds into the streets to demonstrate for their positions.

Economic factors have also added to the divisiveness that marks the country. Prior to independence, the areas that make up the current state of Pakistan were primarily based on agrarian economies, with most of the wealth held by about 300 families that owned large tracts of land that operated under a feudalistic system. Since independence these elites have continued to hold the reins of political power and have enjoy disproportional benefits from this state of affairs. This feudal hierarchy is now beginning to crumble.

Large numbers of people are migrating to the cities with, for example, the port city of Karachi now accounting for at least 10.2 million people and 30 percent of the nation's revenue.3 Within the next 15 years, it is estimated that at least half of Pakistan's population may dwell in urban areas,4 resulting in an emerging middle class which is agitating for a more equitable distribution of political power, power which is currently monopolized by Pakistan's landed elites.5

Even so, Pakistan's central government exercises only limited political control; it is held in general contempt by the public; its political process is characterized by crude political ploys to hamper opposition parties; and it has been ineffective in dealing with the rampant ethnic and sectarian violence that has claimed thousands of lives during the last few years.6 In addition, even though Pakistan's military gave up direct rule of the country after General Zia was killed in a plane crash in August 1988, the military establishment and the related ISI (interservices intelligence) Directorate are only minimally responsive to the directions of the civilian controlled governments. Since 1988, the civilian governments in Pakistan have all been "guided" by the military with the prime minister's powers limited with regard to military matters.7 As a result, security decisions, foreign policy-related actions, and decisions regarding the disposition of WMD systems have sometimes been taken or acted upon without the knowledge or consent of Pakistan's elected officials.8

In formulating its foreign policy, Pakistan's primary concerns are a reflection of its history and domestic situation. Of utmost concern is the Indian threat and the status of Kashmir (the K in Pakistan's name). Secondly, Pakistan is looking for commercial development opportunities, but its major prospect for commercial growth lies in opening a trade route to Central Asia which can only be accessed via Afghanistan. In seeking to become Central Asia's conduit to the world, Pakistan is entering into direct competition with Iran, which is also seeking this role. At the same time, Pakistan has long hoped to develop closer relations with other Islamic states, to include Iran. As will be briefly described, much of Pakistan's security policies flow from these factors.

India. As was discussed earlier, Pakistan and India have fought three wars and conducted confrontational diplomacy for most of their 50-year history as separate nations in South Asia.9 However, in this match, Pakistan has only one-fourth of the land area and less than one-sixth of the population of India, putting Pakistan in the position of David facing the Indian Goliath. Based on its experience in the 1971 war over Bangladesh, Pakistani strategists believe that India could further dismember their country (perhaps by splitting the country through the restive province of Sind, separating the capital at Islamabad from the economic center at Karachi) and defeat Pakistan's conventional forces in about two weeks. Following the explosion of India's nuclear device in 1974, Pakistan became even more alarmed about India's military capabilities. At that time, Pakistan's then-Prime Minister, Zulifikar A. Bhutto, made his famous declaration that Pakistanis would "eat grass" rather than surrender their nuclear option. This idea that Pakistan's security rests on a nuclear capability has gained strength over the years.10

Iran. In the early 1990s, key Pakistani elements entertained hopes of establishing a strategic alliance with Iran and other regional Islamic states to offset an expected tilt of the United States toward India.11 As a further incentive, Pakistan is concerned about the growing level of Hindu nationalism in India. While in pursuit of a strategic alignment with other Islamic states, the Pakistani Chief of the Army Staff, General Beg, became a great admirer of Iran's implementation of Islamic rule and subsequently got well out in front of the political process in promoting a strategic-military alliance with Iran.12 As will be discussed later, this relationship probably included the transfer of sensitive information (and perhaps equipment) related to nuclear weapon development.

As the 90s unfolded, however, relations between Pakistan and Iran began to become somewhat strained:

Pakistani officials began to suspect that Iran (the only Islamic state with a Shiite majority) was involved in agitating Pakistan's Shia community, thus feeding the growing unrest among its Shiite population;13

Relations between Iran and India warmed, including formal cooperative arrangements between those two states to open trade routes through Iran to the Central Asian republics. This agreement put those states into direct competition with Pakistan for the role of providing the Central Asian outlet to the sea;

Iran has long been uncomfortable with Pakistan's pro-American orientation. The strain between Iran and Pakistan appears to be exacerbating Iran's unhappiness with Pakistani-American ties as Iranian commentators increasingly claim that Pakistan acts as a conduit into the region for American foreign policy; and

The development of events in Afghanistan placed Pakistan and Iran on opposite sides of the political fence. The Afghanistan situation included Indian, Iranian, and Russian cooperation with the Rabbani government of Afghanistan, raising the prospect that Pakistan was being surrounded by unfriendly states.

Afghanistan. Afghanistan is a key element in the relationships among Iran, Pakistan and, to some extent, India. The main elements of concern are trade with Central Asia and influence in those states. Pakistan is staking its commercial future in Central Asia on a Tashkent-Karachi transportation link and the enterprise of its businessmen.14 Although Pakistan undoubtedly would enjoy having access to Central Asia via Afghanistan's main road that runs north from Kabul, in 1994 it explored and proved the feasibility of using the alternative western Afghanistan route to the north through Herat to Turkmenistan.15 Pakistan hopes to repair and open this 550-mile road network. See Figure 4-8.

However, under Rabbani's administration of Afghanistan, Pakistan's aspiration of developing a trade route to Central Asia was being dashed. The key events that contributed to this situation included:

Pakistan, under General Zia, had supported Rabbani's rival, Hekmatyar. When Rabbani took power in Afghanistan, Pakistan declared the Rabbani government illegitimate;16

Pakistan's embassy in Kabul was subsequently sacked and closed by Rabbani supporters;17

Iran, India, and Russia established close relations with the Rabbani administration18 (Indian involvement with the Rabbani government was of particular concern);19 and

Pakistan found itself closed out of much of Afghanistan.

In 1994, Pakistan helped create the radically fundamentalist Taliban (literally means "Islamic students") faction, which was largely recruited from Afghan students attending Koranic schools in Pakistan.20 As the situation between Afghanistan and Pakistan deteriorated, Pakistan seems to have increased its assistance to this group. According to some reports, this assistance was either covertly or tacitly approved by the United States and supported by Saudi Arabia.21 Some believe that the $3 billion contract for Unocal and Delta Oil to build a gas pipeline from Turkmenistan, across Afghanistan to Pakistan helped influence U.S. support for a Taliban takeover in Afghanistan.22 At the same time, other press accounts claim that U.S.-Pakistani relations soured over Pakistan's support of the Taliban.23

In 1995, the Taliban was successful in securing the five southern and western provinces of Pakistan, to include the city of Herat. In 1996, in a series of attacks that incorporated the use of armor, aircraft, and perhaps Pakistani advisors, the estimated 40,000-50,000 strong Taliban was successful in expanding its control to encompass 70 percent of Afghanistan, to include securing Kabul on September 27, 1996.24 See Figure 4-9.

As of the end of 1996, the three main anti-Taliban groups (generally representing the Tajik-, Uzbek-, and Shiite-oriented factions) are holding northern Afghanistan under Rabbani,25 who still enjoys recognition by Iran, India, and Russia as head of the legitimate government of Afghanistan.26 It is questionable if the Pushtun-dominated Taliban will be able to subdue this northern sector (an ethnic/religious issue).

The successful results achieved by the Taliban hold some downstream risks. These include:

Iran is unhappy with the extreme Islamic radicalism of the Sunni Taliban;27 also, it is not in Iran's interest to have Afghanistan dominated by forces allied with Pakistan. Moreover, the Shiites, who are the predominant sect in the Persian-speaking area around Herat, are also upset with the Taliban's strict governance of that region and look to Iran for assistance.28 For its part, Iran has been training and equipping a force reportedly consisting of an 8,000-member Shia-dominated Afghan group in eastern Iran (a group that was driven out of Afghanistan in September 1995 when Herat fell to the Taliban). Iran apparently is assisting that group in its preparation to try to retake the Herat area.29 The accompanying tensions have caused some very discreet "saber-rattling" between Iran and Pakistan, while the two countries have maintained a public image of apparent friendly relations.30

Roughly 90 percent of all Muslims are of the Sunni sect. The only major Islamic country which is controlled by the Shia branch of Islam is Iran. As such, Iran and its Shia beliefs have only limited appeal to other Islamic countries, all of which are dominated by Sunnites. Unfortunately, the Sunni Taliban, according to one report, contains a powerful faction that would like to become the leader of a worldwide Jihad (holy struggle) movement.31 For Iran, this has to be a disturbing development. It sees the Taliban as hostile towards Iran and perhaps the Shia sect.32 If the Taliban should eventually lead a successful Jihad movement, it could have the potential of being more potent than Iran's efforts because it might better appeal to the dominant Sunni majority. A Sunni-led Jihad could also earn the Taliban and Pakistan the enmity of both Russia and China if the Islamic populations of Central Asia and western China should come under the influence of such a movement.

Reportedly, the Islamic movement in Kashmir has been encouraged by the success of the Taliban in Afghanistan.33 Perhaps more importantly, there is some worry that a Taliban victory may well inspire other Islamic movements that are fighting to oust secular pro-Western governments throughout the Middle East.34

Pakistan and the "Bomb"
Pakistan has been successful in collecting much of the foreign technology and equipment that it needed to support its nuclear program. Its nuclear support operations have included a combination of theft, smuggling, and deliberate foreign assistance.

The head of Pakistan's nuclear weapons program is Dr. Abdul Qadeer Khan, the German-educated metallurgist who is the director of Pakistan's nuclear-weapon laboratories at Kahuta.35 Previously, Dr. Khan was employed at the uranium enrichment facility, Urenco, in Almelo, Netherlands. It is suspected that he stole a copy of uranium centrifuge blueprints from this facility in 1975,36 one year after India exploded its "peaceful" nuclear device. Armed with these blueprints and a list of Urenco's key suppliers of components,37 he returned to Pakistan and shortly thereafter was appointed to his current position.

Pakistan established an extensive international network of suppliers in order to acquire the technology and specialized equipment needed in its nuclear program. Much of this material came from the West, to include Germany, Switzerland, Sweden, Canada, and the United States.38 In this effort, Pakistan successfully established a number of dummy companies, trans-shipped dual-use materials through multiple countries, or outright stole or smuggled needed components.39 Of interest, during the 1980s Pakistan is believed to have obtained some stocks of tritium gas.40 More importantly, in 1987, it successfully imported the technology needed for collecting and purifying indigenously the tritium needed for its nuclear program.41 (Tritium is a hydrogen atom with two added neutrons in the nucleus. It is used in a mix to boost the yield and lower the weight of fission devices by adding additional neutrons to the chain-reaction process of a nuclear detonation, thereby greatly increasing the number of U-235 or Pu-239 atoms that are split prior to the disintegration of the weapon's integrity.)

Similarly, Pakistan has harvested a significant amount of international nuclear knowledge. As alluded to in the preceding paragraph, Pakistan gained a significant amount of nuclear-related equipment from Germany. It is instructive to examine a case study of the outcome that occurred when a government cracked down on the exports of a company providing dual-use technology to a proliferator. In this case, a Germany company, Leybold, had been engaged in questionable sales to Pakistan. When this company showed up on the U.N.'s December 1991 list of 13 companies that had provided supplies to Iraq's nuclear program, the German government increased its scrutiny of Leybold's operations. Subsequently, Leybold's overseas nuclear-related sales dropped as much as 30 percent and the company was forced to layoff up to 1000 employees, including nuclear engineers. Many of the nuclear specialists gravitated to private consulting companies. U.S. intelligence sources are said to regard these consultants as a threat because many of them are still working with their former clients.42 Although the client countries are not named, it would be surprising if Pakistan were not included.

Likewise, nuclear and missile specialists in Russia are working with Pakistan via computer modem to solve problems associated with nuclear and missile development.43 When this picture is linked to the help Pakistan is receiving from Chinese technicians, some of whom have been present at Kahuta since the mid-1980s,44 it becomes clear that the international flow of nuclear and missile knowledge, in concert with the overall global flow of technology and equipment, is also contributing to Pakistan's development of an indigenous nuclear and missile capability.

In addition (as noted in the Indian section), in 1982 or 83, Pakistan's nuclear program received a big boost from China when it apparently provided Pakistan with the blueprints for a 1966 design of a U-235 nuclear-implosion device.45 Reportedly, U.S. intelligence was able to obtain a copy of this design when it clandestinely searched the briefcase of Dr. Abdul Qadeer Khan.46 According to one report, the design was for the warhead that China exploded during its fourth nuclear test on October 27, 1966,47 when a DF-2A missile was live-fired a distance of 894 kilometers to detonate its nuclear warhead at the Lop Nur test site.48 This particular missile warhead weighed 1290 kgs and produced a yield of about 12 kt (about the same yield as India's 1974

nuclear explosion).49 (The warhead's potential yield apparently was rated at 20-30 kt.)50 Using the technology and information gained, according to one U.S. official's reported comment, Pakistan has had the ability to make a nuclear bomb with a "few turns of a screwdriver" since 1990;51 Pakistani sources claim that status as of October 1991. Based on other evidence and comments made by former Chief of the Pakistani Army, General Beg, there is an unsubstantiated claim that Pakistan may have been capable of producing a nuclear weapon as early as 1987.52

To counter this proliferation problem, the United States expended a lot of effort trying to get Pakistan to cap and roll back its nuclear program. During the first half of the 1990s, Pakistani elites claimed that Pakistan had voluntarily capped its nuclear program. Although generally echoed by U.S. officials, this claim is now suspect. According to General Beg, while Pakistan cut back on its nuclear production in 1989, the program was never stopped.53 Beg's point seems substantiated by Dr. A.Q. Khan's claim that "no government has ever yielded to international pressure to close down the project or freeze the nuclear program."54

This program, as discussed earlier, has provided Pakistan with an air-deliverable nuclear weapon (a bomb). What has been more problematic is whether or not Pakistan has been able to configure the weapon for delivery by missile. As stated previously, when China tested the nuclear design believed to have been passed to Pakistan, it was missile-delivered, with the packaged warhead weighing 1290 kgs. However, Pakistan's missile ranges are all based on a throwweight of 500-800 kgs. Warheads above those weights would significantly shorten the missiles' effective ranges. On the other hand, based on Pakistan's efforts to obtain tritium during the 1980s (more yield for less weight) and considering that it has had 15 years in which to improve its nuclear design argues that Pakistan has had sufficient time in which to reduce the weight of its nuclear device and to package it for missile delivery. Based on the length of time Pakistan has been trying to develop a nuclear warhead capable of being delivered by ballistic missile, the U.S. intelligence community reportedly is now assessing that Pakistan has a nuclear missile delivery capability.55

As the next step in further developing its nuclear capability, Pakistan is working to increase its production capacity of fissile materials. (See Figure 4-10, a map of Pakistan's nuclear infrastructure.) One major step in this direction was taken in March 1996 when Pakistan, reportedly with Chinese assistance,56 completed the construction of a 40- to 50-MW heavy-water nuclear reactor near Khushab.57 Once in operation, this unsafeguarded reactor will provide Pakistan with its first source of plutonium. (All of Pakistan's current nuclear systems are based on uranium.) Apparently, U.S. intelligence agencies believe that Pakistan is having trouble increasing the range of its missiles. Plutonium would allow Pakistan to modernize its nuclear arsenal and produce smaller and lighter warheads, which would result in longer effective ranges for Pakistan's nuclear-armed missiles.58

As for its capability to produce U-235, Pakistan is in the process of increasing its production capacity for weapons-grade uranium. The famous 5000 ring-magnets that China transferred to Pakistan in 1995 apparently were intended to replace the magnets on Pakistan's current gas centrifuges with more powerful magnets, which would increase the productivity of the current enrichment program at the A.Q. Khan research labs in Kahuta.59 In addition, in 1987 U.S. intelligence sources reportedly claimed that satellite photography indicated that a uranium enrichment plant was being constructed at Golra. It is not clear from open source material if this facility was ever completed.60

As a parallel operation, it seem clear that Pakistan is trying to increase the level of sophistication of its nuclear and missile production. For example, in September 1996, Pakistan imported some diagnostic equipment and a specialized furnace (believed to be a vacuum furnace or "skull") from China. It is thought that the furnace is the type used to melt plutonium and uranium for nuclear weapon cores, titanium for missile nose cones, and other related critical parts.61 Similarly, in late 1995, a shipment of specialized laser equipment was intercepted in London's Heathrow airport as it was being transshipped between Sweden and Pakistan.62 The pursuit of these types of lasers, coupled with the purchase of diagnostic equipment and the specialized furnace, indicate that Pakistan is probably in the process of upgrading the precision and sophistication of its nuclear- and missile-manufacturing programs.

Clearly, unless some unforeseen event slows or stops the Pakistani nuclear program, Pakistan will increase its nuclear capacity considerably by 2010. Although the status of Pakistan's nuclear arsenal is a very well-kept secret, presumably the sophistication of its nuclear devices should also improve during the intervening time frame as Pakistan acquires more advanced manufacturing technologies for its strategic-weapons programs.

Looking at the Missile Issue
Pakistan is at a clear disadvantage to India in terms of strategic depth. Much of Pakistan's major economic and population centers lie in a band between 50 and 250 kms from the Indian border. Conversely, India has much greater strategic depth, with its key western cities of New Delhi and Bombay located over 350 kms and 600 kms respectively from Pakistan's nearest border. Although Pakistan can air-deliver its strategic weapon systems, it has a strategic need to be able to hold India in a position of vulnerability similar to itself, especially since India is now producing the Prithvi (i.e., issues of power and assured deterrence). In short, Pakistan requires longer-ranged missiles than India needs to hold India's key assets as vulnerable as Pakistan's.

There are indicators that Pakistan's indigenously developed Hatf I and Hatf II missiles, which were based on U.S. Honest John technology, are less capable than desired by Pakistan's military leadership. The Hatf I is fairly crudely machined, has a range of perhaps 80 kms carrying a payload of 500 kgs, and is very inaccurate. As a result of its limitations, the Hatf I may have been fitted to deliver a chemical warhead.63 Similarly, the Hatf II, reportedly tested in 1989, was apparently unable to achieve the 300 km range that Pakistan's military leadership expected. It is doubtful that Pakistan's indigenous Hatf II missile has been put into mass production. In fact, a number of reputable analysts believe that Pakistan's original model of the Hatf II may never be fielded.64 It is also likely that it was Pakistan's inability to field an effective Hatf II that led to the transfer of China's M-11 ballistic missile system to Islamabad.

The single-stage M-11 (CSS-7) was first test-fired by China in 1990; it entered service with the Chinese military in 1992.65 The missile was originally designed as a replacement for the Scud B and was aimed primarily at the export market. Since its advent, there has been an ongoing public dispute between China and the United States regarding the exportability of the M-11 under the guidelines of the MTCR. China claims it has a range of just under 300 kms when carrying a 500 kg warhead, which makes it MTCR compliant. Early reports of the M-11's capabilities listed it as having a throwweight of 800 kgs at 300 kms range, which would put it above the MTCR limits. Some U.S. analysts believe China artificially listed its throwweight at 500 kgs to avoid the MTCR issue.

Regardless of the disagreement over the M-11's ability to comply with MTCR guidelines, the M-11 has been exported to Pakistan; its packing boxes were first reported to have been seen there in 1991.66 Since then, several subsequent reports of M-11 shipments into the country have been reported. Most reports now claim that more than 30 M-11s are located at Sargodha Air Force Base,67 just west of Lahore;68 while Indian sources put the figure higher with at least one report claiming that a total of 84 M-11s have been delivered to Pakistan.69 Although the M-11s provide Pakistan with a limited capability against India, the single-stage system does not have the range needed to threaten India's high-value targets.

Consequently, as a national priority, Pakistan is pursuing the development of a medium-range missile system. Using blueprints and equipment supplied by China, Pakistan is building a medium-range missile factory in a Fatehgarh (just to the south of Islamabad).70 This complex, called the National Defense Complex, reportedly is being staffed by specialists from all of the related missile and nuclear developmental organizations in Pakistan, supplemented by at least 10 full-time Chinese technicians who work at the facility, six on missile guidance and control and four on solid-fuel production.71 It is believed that other Chinese specialists visit the plant as needed to provide technical assistance.72

There is a great deal of confusion regarding Pakistan's missile production plans. A number of the open source reports claim that Pakistan is planning on building a 600-1000 km range Hatf III missile that is based on M-11 technology.73 Other sources assess that the Hatf II is essentially an M-11 and that the Hatf III will be based on the Chinese M-9 (DF-15) missile.74 If the latter claim should prove correct, then the Pakistani missile factory might produce a couple of different models of M-family missiles. Based on what is known, and considering the fact that Pakistan is sensitive to perceived technological failures, it is likely that Pakistan will field a missile that it calls the Hatf II as well as a different system known as the Hatf III. While the situation is still confused, it seems likely that at least one of these missiles may have a range of 600 kms or greater.

It is also clear that Pakistan has aspirations of developing even longer-ranged systems in the future. It established, with U.S. assistance, a civilian space research organization (SUPARCO) in 1961.75 This organization "has developed two rockets: Shahpar, a seven-meter solid fuel two-stage rocket that can carry 55 kgs to an altitude of 450 kms, and the Rakhnum, which can lift 38 kgs to a distance of 100 kms. SUPARCO has also tried to develop a small satellite launcher, but the project has been stalled for want of technology."76 Clearly, Pakistan's civil program is far behind that of India's. However, there is an ongoing investigation in India that indicates that Pakistan may have been successful in penetrating the ISRO in 1994, obtaining documents and plans related to India's polar space launch vehicle (PSLV).77 If so, Pakistan could have the information needed to move its long-range missile program ahead fairly rapidly if it could obtain the technology base needed to apply the information gained.

Pakistan as a Proliferator
Pakistan is suspected of providing assistance to both the Iraqi and Iranian nuclear programs. In addition, it has long been rumored that Saudi Arabia and Libya have helped finance the Pakistani program. It so, the question becomes: what have these two countries received in return? Of similar concern, Pakistan has become a major terminal for illegally smuggled goods from the former Soviet Union. This trade reportedly includes arms and nuclear materials.

Iraq. In the case of Iraq, U.N. inspectors working to dismantle the Iraqi nuclear program after Desert Storm reportedly discovered diagrams of the Iraqi nuclear weapon that were very similar to the drawings Pakistan received from China.78 The link between Iraq and Pakistan appears to have been Dr. Khan, the director of Pakistan's nuclear weapons program. According to a German report, citing Western intelligence services as its source, Dr. A.Q. Khan is credited as being the mastermind behind the Iraqi bomb.79 Thus, the flow of sensitive technology from Pakistan west seems probable in the case of Iraq.80

Iran. A driving force behind the establishment of a Pakistani nuclear assistance program to Iran seems to have been General Beg (discussed earlier). Based on the special report that President Clinton provided to President Yeltsin in May 1995, Pakistan is believed to have provided Iran with the list of foreign companies which it used to obtain the infrastructure and weapon components necessary for a nuclear weapons program (Iran has approached the same suppliers as Pakistan used).81 This cooperation may have been further spurred by a reported December 1992 Iranian offer to pay Pakistan $3.5 billion if it would share its nuclear know-how. This offer was repeated to Prime Minister Bhutto in December 1995.82 Based on all of the indications of Pakistani nuclear assistance to Iran, Iran's December 1992 offer may have been accepted.

The U.S. briefing to Yeltsin in May 1995 made the claim that Pakistan was believed to have halted all nuclear cooperation with Iran once Bhutto became Prime Minister (December 1993).83 Curious, however, is the report that Prince Turki ibn Faycal, head of Saudi Arabia's secret services, visited Prime Minister Bhutto in March 1995 to try to persuade her to halt Pakistani contacts with Iran on nuclear activities.84 At this time, it is unclear if Pakistan and Iran are continuing to cooperate on nuclear development. However, in May 1995, General Beg claimed that Pakistan had canceled 11 production agreements with Iran under U.S. pressure.85 If true, this may help to explain the claim that Iran again offered Pakistan $3.5 billion in December 1995 to share nuclear know-how (cited above).

Considering the fragmented nature of Pakistan's society and the level of corruption that governs behavior in that country, it would not be surprising to learn that some cooperative efforts are still continuing regardless of the official position on the issue. However, with the growing competition between these two countries over Afghanistan and Central Asia, it seems likely that any cooperation now taking place is probably doing so at a reduced level from that of the early 1990s. This is not to say that the level of cooperation might not increase in the future as the underlying political situation changes.

FSU/Afghanistan Smuggling. The northern territories along Afghanistan's border are essentially ungoverned. Pakistani checkpoints have been established at points that separate the northern tribal territories from Pakistan proper.86 Consequently, the areas bordering Afghanistan have become a smuggler's paradise with the border town of Peshawar acting as the hub of the activity. Materials originating in the FSU and Afghanistan are transported to these territories. Included in this traffic are Stinger anti-aircraft missiles, opium, nuclear weapon components, missile parts, antiquities, strategic steel alloy, and radioactive materials purported to be weapons-grade fissile material. These constitute but a few examples of the types of items being offered for sale in this uncontrolled region.87 Much of the nuclear materials being offered is believed to be rubbish, but occasionally included in the rubbish are some high-quality materials and components that are of great value.

Shoppers are out in force. Iranian majors and colonels are said to be walking around Peshawar with Samsonite suitcases full of $100 bills buying selected nuclear-related materials.88 They are joined by Indians and Pakistanis who are also shopping for similar deals.89 Complicating this scene are dealers who have also moved into the region that may be acquiring items on consignment or for resale. In short, Peshawar and its neighboring towns are becoming major clearinghouses for the world's nuclear arms bazaar.90

In essence, Pakistan has been a significant source of proliferation. It likely provided assistance to both Iran's and Iraq's nuclear programs, and it may also be providing help to other would-be proliferators. In addition, with the smuggled items coming out of the FSU now being concentrated in northern Pakistan, a second source of proliferation potential is being established.

With regard to its missile capabilities, Pakistan is, with foreign assistance, gradually developing a missile technology base. Of equal concern, however, is the potential that Pakistan could use the extensive technology collection organization that it has established globally to garner advanced missile design secrets. The pending case in India with reference to the alleged spying scandal that may have led to the transfer of PSLV design information is a case in point. Based on Pakistan's apparent past record of transferring nuclear information, clearly there is a possibility that it could also pass on missile design information to other states that are currently in a better position to capitalize on that type of data. Iran, Iraq, China, and other similar states are all possible candidates.

In short, Pakistan is well on its way to becoming a nuclear power of some limited importance. How far it will be able to develop its missile capabilities by 2010 is highly dependent on the foreign assistance and technology flow it receives from abroad. It appears likely that Pakistan will have a significant regional missile capability by 2010, but it also seems doubtful that it would be able to field an ICBM by that date. What may be more worrisome is the possibility that Pakistan could provide ICBM-related information to other states that are more able to put that information into use by 2010 or shortly thereafter.

NOTES

1 Iftikhar H. Malik, "The State and Civil Society in Pakistan," Asian Survey, Vol. XXXVI, No. 7, July 1996, pp. 684-85.

2 Malik, "The State and Civil Society in Pakistan," op. cit., p. 677.

3 Saeed Shafqat, "Pakistan Under Benazir Bhutto," Asian Survey, Vol. XXXVI, No. 7, July 1996, p. 670.

4 Malik, "The State and Civil Society in Pakistan," op. cit., p. 679.

5 Pakistan has not conducted a census since 1981. The landed elites that hold political power do not want to determine a new official distribution of the population as they believe it would lead to a reapportionment that would erode their political power base. See Marcus W. Brauchli, "A Rising Middle Class Clamors for Changes in Troubled Pakistan," The Wall Street Journal, December 14, 1995, pp. A1, A6.

6 Ibid., pp. 670-72.

7 For example, see Malik, "The State and Civil Society in Pakistan," op. cit., pp. 676-78.

8 For more complete insights into Pakistan's internal situation, see the series of articles published in Asian Survey, Vol. XXXVI, No. 7, July 1996, pp. 639-90; and Hersh, op. cit., pp. 60-65.

9 It should be noted that India and Pakistan signed an agreement in 1988 not to attack each other's nuclear facilities. To this end, on the first of January of each year, they exchange lists of nuclear installations and facilities. See "New Delhi, Islamabad Nuclear Lists Exchanged," Delhi All India Radio Network, transcribed in FBIS-NES-96-001, January 1, 1996. There are also reports that India and Pakistan have become much more cautious in their actions toward each other since their confrontation in 1990, which was discussed in the section dealing with India.

10 For example, see the comments of Pakistan's former Foreign Minister in "Pakistan: Editorial Urges Continuation of Nuclear Program," Nawa-I-Waqt, translated in FBIS-NES-96-234, December 4, 1996.

11 Malik, op. cit. p. 79.

12 Robert B. Oakley, "Opportunities and Prospects for Cooperation on Asian Security Issues--Central and West Asia," The United States and India in the Post-Soviet World: Proceedings of the Third Indo-U.S. Strategic Symposium, Institute for National Strategic Studies, National Defense University, 1993, p. 153; and Hersh, op. cit., p. 62.

13 Private conversation with a South Asian expert, U.S. Department of State, under conditions of nonattribution, November 1996.

14 Oakley, op. cit., p. 149.

15 Alex Spillius, "Neighbours Seek Gains in Divided Afghanistan," The Daily Telegraph, October 16, 1996, p. 17.

16 "Editorial Views Tehran's Mediation of Islamabad-Kabul Talks," The Nation, transcribed in FBIS-NES-96-016, January 23, 1996.

17 Ibid.

18 Mariana Baabar, "Pakistan: Indian Delegations Hold Secret Meetings With Rabbani," The News, transcribed in FBIS-NES-96-078, April 21, 1996; and "India: Pakistan Seen as Conduit for U.S. Influence in Afghanistan, Indian Express, transcribed in FBIS-NES-96-207, October 21, 1996.

19 There are a number of unspecified reports of possible Indian assistance to the Rabbani government as, for example, "Afghanistan's Neighbours Carry On Playing the Great Game," Jane's Defence Weekly, December 9, 1995, p. 14; and Mariana Baabar, "Pakistan: Indian Delegations Hold Secret Meeting With Rabbani," Islamabad The News, transcribed in FBIS-NES-96-078, April 21, 1996. One interesting Pakistani press report, "Pakistan: Indian Efforts to Gain Influence in Afghanistan Reported," The Muslim, transcribed in FBIS-NES-96-059, March 23, 1996, cites specific details. It claims India provided selected military equipment assistance to the Rabbani government, positioned an assistance team of 60 Indians in Kabul, trained 28 Afghan pilots in India, assisted Afghanistan in making their Scud B missile systems operational, and detailed 9 Indian pilots to Kabul--pilots who reportedly took part in an air raid on December 9, 1995, in which 27 Talibans were killed.

20 See "Afghanistan: Taliban Official Claims India, Iran Supplying Alliance," Hong Kong AFP, transcribed in FBIS-NES-96-214, November 4, 1996; and K.K. Katyal, "India: Invitation to Tehran Conference on Afghanistan Viewed," The Hindu, transcribed in FBIS-NES-96-211, October 29, 1996.

21 For examples, see "U.S. Makes Bad Call On Afghanistan," Intelligence Digest, October 4, 1996; "India: Pakistan Seen As Conduit for U.S. Influence in Afghanistan, Indian Express, transcribed in FBIS-NES-96-207, October 21, 1996.

22 "Afghanistan: La Route du Gaz," Le Figaro, September 30, 1996. According to this French article, President Clinton wrote the President of Turkmenistan to request his support for this contract. The construction contract was signed on October 21, 1995, six weeks after the Taliban secured Herat on September 5, 1995. Other sources claim the U.S. supported the Taliban as part of its Iranian containment strategy.

23 "U.S. Accuses Pakistan of Supporting Afghan Taliban," Asian Defence Journal, March 1996, p. 88.

24 For examples, see Ibid.; Spillius, "Neighbours Seek Gains in Divided Afghanistan," op. cit.; "Afghanistan's Neighbours Carry On Playing the Great Game," op. cit.; and "Commentary Accuses Pakistan of Interfering in Afghanistan," Delhi All India Radio Network, transcribed in FBIS-NES-96-034, February 17, 1996. There is one unconfirmed report that Russian military sources claim that Taliban has 40,000 men, 200 tanks, and 20 combat aircraft. See "Big Dangers Ahead in Afghanistan," Intelligence Digest, October 11, 1996.

25 "Afghan Factions: Shifting Alliances in Continuing Civil War," The Washington Post, October 23, 1996, p. A29; and Anthony Davis, "Rabbani Drops National Army for Guerrilla War, Jane's Defence Weekly, November 27, 1996, p. 14.

26 "Afghanistan: Taliban Officials Accuses Russia, Iran, and India of Aggression," Hong Kong AFP, transcribed in FBIS-NES-96-207, October 24, 1996.

27 Ibid.

28 For example, see Spillius, op. cit.

29 "Afghanistan: Taliban Official Claims India, Iran Supplying Alliance," op. cit.; and "Big Dangers Ahead in Afghanistan," Intelligence Digest, October 11, 1996.

30 For example, see "Pakistani Envoy to Tehran Discusses Afghan Problems," Tehran Times, transcribed in FBIS-NES-96-013, January 10, 1996.

31 "The Taleban and the Arab Afghans," The Intelligence Digest, October 25, 1996.

32 For example, the Iranian-backed Afghan Shiite leader died while in Taliban custody. "South Asia: Nuclear Report Adds to South Asian Jitters," op. cit.

33 "U.S. Makes Bad Call On Afghanistan," op. cit.

34 Ibid.

35 Hersh, op. cit., p. 59.

36 "Early Warnings on Pakistan," Middle East Defense News, October 12, 1992.

37 Kathleen C. Bailey, Doomsday Weapons in the Hands of Many (Chicago: University of Illinois Press, 1991) p. 24.

38 For examples, see Ibid.; "Early Warnings on Pakistan," op. cit.; Hersh, op. cit., p. 57; and Marcus Warren, "Pakistan's Nuclear Program at a Screwdriver Level," The Washington Times, February 20, 1996, p. A1.

39 For examples, see Bailey, op. cit., p. 25; Rai Singh, "Indian Commentary Views Alleged Nuclear Smuggling by Pakistan," All India Radio General Overseas Service, transcribed in FBIS-TAC-96-003, February 6, 1996; and E.A. Wayne, "Bhutto Denies Pakistan Has Nuclear Weapons," The Christian Science Monitor, June 9, 1989, p. 7.

40 Wayne, "Bhutto Denies Pakistan Has Nuclear Weapons," op. cit., p. 7; and "Can the U.S. Rely On China's Export Promises," Risk, May 1996, p. 8. The first report claims the tritium came from Germany, the second states that China provided the tritium according to German officials.

41 Bailey, op. cit., p. 25; and Andrew Koch, "Nuclear Testing in South Asia and the CTBT," The Nonproliferation Review, Spring/Summer 1996, p. 102 (end note 5).

42 "Early Warnings on Pakistan," op. cit.

43 Alan Cooperman and Kyrill Belianinov, "Moonlighting by Modem in Russia," U.S. News and World Report, April 17, 1995, p. 45.

44 Presentation by a noted nonproliferation expert, February 29, 1996. The information was provided on a nonattribution basis.

45 Ali Abbas Rizvi, op, cit., p. 22; "Can the U.S. Rely On China's Export Promises," Risk, op. cit., p. 8; and private conversation with Leonard Spector, Carnegie Endowment for International Peace, February 29, 1996. The date that China transferred the nuclear design plans to Pakistan is usually cited as occurring during the early 1980s. Leonard Spector's research indicates the date was around 1982. The article in Risk claims that U.S. intelligence discovered in 1983 that China had transferred the design to Pakistan. The Risk article also states that "American agents even learned the catalog numbers of some of the weapon's parts and produced a model of the bomb to show Pakistani diplomats."

46 Ian Brodie, "Spies Proved China Helped Pakistan Get Nuclear Bomb," The Times, April 2, 1996, p. 14. According to this report, U.S. nuclear specialists constructed a model of the Pakistani bomb based on Khan's blueprints; the model was shown to Prime Minister Benazir Bhutto.

47 Pravin Sawhney, "Standing Alone: India's Nuclear Imperative," Jane's International Defense Review," November 1996, p. 27.

48 Nuclear Data Book, Vol. V, op. cit., p. 420.

49 Ibid.

50 Ibid., p. 333.

51 Hoagland, "Briefing Yeltsin on Iran," op. cit., p. A23. It has become common for U.S. diplomats to refer to clandestine nuclear weapon capabilities has being but "a few turns of a screwdriver" away from a nuclear weapon. In reality, that claim means nothing. For safety reasons, early generation nuclear weapons routinely are stored in two or three separate canisters that contain various components of the weapon. Nuclear assembly teams put the components together just before the weapon is to be mated with its delivery system. If having the weapon assembled is a criterion for being a nuclear-armed power, the United States spent a number of years after World War II being just "a few turns of a screwdriver" away from having a nuclear weapon.

52 Hersh, op. cit., p. 59; and Rehul Bedi, "U.S. Hesitancy Over Bomb Regarded as Confirmation," South China Morning Post, March 8, 1996, p. 15.

53 Bedi, op. cit.

54 "Pakistan: Renowned Nuclear Scientist Comments on Nuclear Program," Nawa-I-Waqt, translated in FBIS-NES-96-151, August 1, 1996..

55 R. Jeffrey Smith, " Pakistan Has A-Weapons For Missiles, U.S. Fears," The Washington Post, June 14, 1996, pp. A1, A12. Both India's and Pakistan's nuclear programs have the reputation for being very secretive. It seems doubtful that the details of these programs are completely known by U.S. intelligence agencies.

56 Bill Gertz, "China Aids Pakistani Plutonium Plant," The Washington Times, April 3, 1996, p. A4.

57 Ashraf Mumtaz, "Pakistan: First Indigenously Developed Nuclear Reactor Completed," Dawn, transcribed in FBIS-NES-96-048, March 7, 1996. It should be noted that many other sources claim the size of this reactor as being 40 MWs. A couple of sources cite higher figures--up to 100 MWs. For example, see Sawhney, "Standing Alone, India's Nuclear Imperative," op. cit. p. 27.

58 Gertz, "China Aids Pakistani Plutonium Plant," op. cit.

59 Sawhney, "Standing Alone, India's Nuclear Imperative," op. cit. p. 27; and Bill Gertz, "Beijing Flouts Nuke-Sales Ban," The Washington Times, October 9, 1996, pp. A1, A9. There is some uncertainty on the intended use of the magnets. Some articles asset that the magnets were intended to upgrade the current system, one alleges the new magnets were to replace worn-out magnets, another claims that the magnets could be used to increase the number of centrifuges in the cascade. Most assessments seem to lean in favor of an upgrade to the productivity of the system by using more powerful magnets.

60 Koch, "Nuclear Testing in South Asia and the CTBT," op. cit., p. 102 (end note 5).

61 Gertz, "Beijing Flouts Nuke-Sales Ban," p. A9.

62 Warren, "Pakistan's Nuclear Program at a Screwdriver Level," op. cit.

63 For an example, see Aabha Dixit, "India: Article Views Pakistan's Missile Program as Serious Threat," Calcutta The Telegraph, transcribed in FBIS-NES-96-173, September 2, 1996.

64 Pravin Sawhney, "India: Chinese Missile Technology Transfer Alleged," The Asian Age, transcribed in FBIS-NES-96-168, August 27, 1996.

65 Danny Lee, "Ideal Weapon for Surprise Attack," Singapore, The Straits Times, June 14, 1996, p. 19.

66 Presentation by a noted nonproliferation expert, February 29, 1996. The information was provided on a nonattribution basis.

67 "Missile Story Old Hat," Intelligence Newsletter, July 13, 1995; and Smith, Pakistan Has A-Weapons For Missiles, U.S. Fears," op. cit., p. 12.

68 R. Jeffrey Smith, "Pakistan Is Building Missile Plant, U.S. Says," The Washington Post, August 26, 1996, p. 23.

69 Ranjit Kumar, "India: Article Views Need for Russian Antimissile System," Navbharat Times, translated in FBIS-TAC-96-004, February 18, 1996. Many Indian articles make exaggerated claims regarding Pakistan's missile capabilities. On the other hand, the recurring reports of new shipments of M-11s into Pakistan would indicate that the number of systems now in country is probably above the 30 commonly mentioned in press reports. Based on a survey of estimates, it is likely that Pakistan now has 38-58 M-11s.

70 Smith, "Pakistan Is Building Missile Plant, U.S. Says," op. cit.

71 "China and Pakistan's Missiles," Foreign Report, Jane's Information Group, May 2, 1996, p. 2.

72 Ibid., p. 3.

73 For example, see Ibid.; and Smith, "Pakistan Is Building Missile Plant, U.S. Says," op. cit.

74 For example, see "Indian Claims on Pak Hi-Tech Missile Factory," Intelligence Digest, June 1996; Atul Aneja, "India: Sources Report China, Pakistan Working on New Missile, The Hindu, transcribed in FBIS-NES-96-180, September 13, 1996; Pravin Sawhney, "India: Chinese Missile Technology Transfer Alleged," Delhi, The Asian Age, transcribed in FBIS-NES-96-168, August 27, 1996; and Dixit, "India: Article Views Pakistan's Missile Program as Serious Threat," op. cit. The Nonproliferation Review has long shown the Half III to have almost the same weight and characteristics as the Chinese M-9. If Pakistan is building an M-9 missile, it will result in a diplomatic firestorm when it is unveiled. If U.S. intelligence agencies should suspect that a Pakistani version of an M-9 is in the works, they probably would not reveal that suspicion until they could prove the allegation. At the same time, it should be remembered that the M-11 was originally designed as a two stage missile with a 1000 km range. Logistically, it would make sense to build the Hatf II (M-11) as a single-stage system that can be stacked with a second-stage to form the Hatf III.

75 Dixit, "India: Article Views Pakistan's Missile Program as Serious Threat," op. cit.

76 Ibid.

77 "India With Pakistan, 6/19/96," The Nonproliferation Review, Fall 1996, p. 159.

78 Risk, op. cit., May 1996, p. 8.

79 Thomas Scheuer, "Pakistani Called Mastermind of Iraqi Nuclear Program," Focus, translated in FBIS-TAC-96-003, January 29, 1996.

80 According to Rizvi, "The Nuclear Bomb and Security of South Asia," op. cit., p. 22, the purported nuclear weapon blueprints discovered by U.N. inspectors in Iraq revealed a bomb design so unstable that the resulting weapon could have detonated on the workbench. First generation nuclear weapons are not noted for their safety devices.

81 Jim Hoagland, "Briefing Yeltsin on Iran," The Washington Post, May 17, 1995, p. A23.

82 "Iran with Pakistan, 12/21/95," The Nonproliferation Review, Fall 1996, p. 113.

83 Hoagland, "Briefing Yeltsin on Iran," op. cit.

84 "Pakistan with Iran and Saudi Arabia, 3/95," The Nonproliferation Review, Fall 1995, p. 116.

85 "Pakistan with Iran, 5/3/95," The Nonproliferation Review, Fall 1995, p. 168. It was not clear how many of the agreements included WMD or missile technologies.

86 Tim McGirk, "A Year of Looting Dangerously," London, The Independent on Sunday, March 24, 1996, pp. 4-8.

87 Ibid.

88 Ibid. Considering the fact that the United States adopted the new Franklin hundred dollar bill, partially due to Iranian high quality counterfeiting of standard $100 bills, it may be that Iran is buying nuclear material for the price of paper and printing ink.

89 Ibid.

90 "China, with Afghanistan, Iran, Kazakstan, Pakistan, Russia, and Turkmenistan, 1/96" The Nonproliferation Review, Fall 1996, p. 117.

Posted by maximpost at 3:34 PM EST
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>> MORE...OUR RUSSIAN FRIENDS

Russia trains 600 Iranian nuclear experts
MOSCOW: Russia has trained 600 Iranian experts to work on its first nuclear power station, which Washington fears is being used to develop atomic weapons, the ITAR-TASS news agency reported on Wednesday.
An Iranian nuclear official told the agency that the experts had undergone training at the Novovoronezh Centre in Russia, which is to prepare some 700 specialists for work in the Bushehr plant. Russia faced intense pressure from the United States over helping Iran in construction of the Bushehr reactor.
The US fears that Iran could use fuel from the reactor for a programme for developing nuclear weapons. Washington has, however, toned down its criticism in the past several months.
http://jang.com.pk/thenews/feb2004-daily/19-02-2004/main/main9.htm


>> OTHER SITES...

Nuclear machinery found in Iran
By Barbara Slavin and John Diamond, USA TODAY
United Nations inspectors have found sophisticated uranium-enrichment machinery at an air force base outside Iran's capital, Tehran, U.S. and foreign sources with knowledge of the discovery say.
The find at Doshen-Tappen air base appears to undermine Iran's claim it is not pursuing a nuclear bomb. The discovery may strengthen calls for action by the International Atomic Energy Agency, the U.N.'s nuclear watchdog.
The IAEA would not comment Wednesday, nor would the Bush administration. However, a source with knowledge of the find at the base said the Iranians had constructed and tested a gas-centrifuge system there. Such a system is used to refine uranium for nuclear reactors or bombs. There was no indication any uranium had been inserted or enriched.
Iran has long been suspected of seeking nuclear bombs and is building a reactor with the help of Russia. The United States has questioned why Iran needs nuclear power, since it has the world's fifth-largest oil reserves.
Under pressure last year to disclose its intentions, Iran agreed in a deal with France, Germany and Britain to suspend efforts to enrich uranium and to let inspectors into the country to prove it is not trying to build bombs.
Last week, U.N. inspectors looking through Iranian nuclear documents found drawings of a so-called P-2 gas centrifuge, twice as productive as a model Iran has acknowledged using to enrich uranium. Iranian Foreign Minister Kamal Kharrazi on Tuesday admitted Iran is doing research on the P-2, but for peaceful purposes.
Two U.S. sources briefed on the IAEA discovery said the Iranians admitted that they also possessed the actual machinery and tested it. The discovery appears to indicate that Iran is moving ahead with a nuclear-bomb program.
Before the latest revelations, U.S. intelligence believed Iran was 10 years from a nuclear weapon.
"The question is, did the Iranians actually give us the Full Monty or are they just doing a striptease?" asks Patrick Clawson, deputy director of The Washington Institute for Near East Policy.
Three sources with knowledge of the latest find say it will be mentioned in an IAEA report to be sent to the 35 governments on the organization's board this weekend.
One expert said Iran should be encouraged to keep cooperating with the IAEA and not be subjected to U.N. penalties.
"You want the Iranians to reveal more, and we know there is more to reveal," says David Albright, president of the Institute for Science and International Security in Washington.
Pressure on Iran has increased since Libya decided last year to reveal its nuclear activities and Pakistan admitted that its top nuclear scientist sold nuclear know-how to Libya, Iran and North Korea.


---------------------------------------------------------------

>> YR - Q"The P2 centrifuges are entirely a research project and have not been commissioned," he added.

Diplomats say uranium enrichment parts found in Iran
By Reuters
TEHRAN/VIENNA - Iran denied on Thursday reports it was conducting sensitive nuclear activities at a military base.
"Iran's nuclear activities are entirely peaceful and Iran has not had and nor does it have military nuclear activities," the Foreign Ministry said in a statement faxed to Reuters.
Diplomats told Reuters on Thursday the UN's nuclear watchdog had found undeclared components in Iran compatible with advanced uranium centrifuge designs, stoking Western concerns that Tehran may be developing nuclear weapons.
The USA Today newspaper reported on Thursday that parts for advanced "P2" uranium centrifuges - a Pakistani version of the advanced Western "G2" design - had been found at the Doshan Tapeh military base in Tehran.
It quoted an unnamed source saying a system at the base had been assembled and tested. Uranium centrifuges can be used to make fuel either for nuclear reactors or atomic bombs.
But the Foreign Ministry said: "In none of Iran's military centres is a nuclear programme being pursued and P2 centrifuges do not exist in such centres."
"The P2 centrifuges are entirely a research project and have not been commissioned," he added.
Iran insists that it made a full declaration of its nuclear technology to the International Atomic Energy Agency (IAEA) in October, and that its programs are purely peaceful.
A discovery of undeclared equipment might suggest it has something to hide, possibly a weapons program.
"This stuff should have been declared," one Western diplomat said. The IAEA declined to comment and Iranian officials could not immediately be contacted.
Iran said this week it had held blueprints for the G2 system, but denied allegations from Western diplomats that it had committed a serious offence by failing to declare them.
"[This] is not something the agency has discovered, Iran has informed the agency about it...It's a sheer lie that Iran is manufacturing G2 centrifuges," Hossein Mousavian, head of foreign relations at Iran's Supreme National Security Council, said in a newspaper published on Monday.
IAEA chief Mohamed ElBaradei is expected to circulate two reports next week on UN inspections, one on Iran and the other on Libya, which admitted in December to pursuing weapons of mass destruction and agreed to give them up voluntarily.
Iran agreed in October, in a deal brokered by Germany, France and Britain, to allow snap inspections of its atomic facilities by the IAEA and to suspend uranium enrichment.
The discovery of the G2 designs led some arms experts to speculate that Iran may have a secret enrichment facility apart from one at Natanz in the centre of the country, which is being built to accommodate older G1 centrifuges.
Several diplomats and arms experts have said they believe the Pakistani nuclear scientist Abdul Qadeer Khan, who has admitted leaking nuclear secrets to Iran, Libya and North Korea, offered Iran his centrifuge designs on the black market.
Gas centrifuges spin at supersonic speeds to separate fissile uranium-235 from the non-fissile uranium isotopes.
? Copyright 2004 Haaretz. All rights reserved

-----------------------------------------------------------

Shin Bet: Tennenbaum is still lying

By Yossi Melman
The Shin Bet security investigators interrogating Elhanan Tennenbaum believe he is not telling the truth about how he reached Beirut. They do not accept his version of being kidnapped from a Gulf city - Dubai apparently - where he had traveled from Belgium, Shin Bet head Avi Dichter told the Knesset sub-committee on intelligence and secret services on Tuesday.
Tennenbaum, a businessman and senior officer in the reserves, was returned to Israel in the recent prisoner exchange with Hezbollah. After Dichter's briefing on the interrogation, a committee member said Tennenbaum was sticking to his story.
He says he left Israel in September 2000 for a meeting which he hoped would make him some money personally and, he believed would, among other issues, provide information about missing Air Force navigator Ron Arad. This was the original version of his disappearance given by Tennenbaum during an interview with the Hezbollah TV station, on the eve of his release.
Dichter told the MKs Tennenbaum had failed a polygraph test. Members of the top-secret sub-committee yesterday took the unusual step of issuing a statement describing the Tennenbaum case as "one of the worst and most worrying affairs in the state's history."
The statement said the subcommittee members gave their backing to Shin Bet interrogators, Israel Defense Forces, and police involved in trying to get to the truth. It said it would not be satisfied until all circumstances of the Tennenbaum affair were clarified, the damage to state security established, and the necessary measures taken.
MK Haim Ramon (Labor) later said: "We would like the public to be aware of the serious nature of this affair, particularly the circumstances of how he arrived in Lebanon, and damage to state security." MKIlan Leibovitch (Shinui) said they were worried by Tennenbaum's lawyer, Eli Zohar, saying that he would probably not be put on trial.
Zohar, and Tennenbaum's other lawyer Ro'i Blecher, reacted to the sub-committee's statement: "It is not fitting that this important committee should take a stand during an ongoing investigation and turn itself into a judiciary that passes judgment on a person being interrogated."
Zohar said: "What we have been saying all along is that we hope the interrogation will end without an indictment, but we also said that if there are infringements they will be such as do not warrant a punishment of more than the three years of captivity that he underwent with Hezbollah."
The two lawyers added that the MKs had violated the gag order imposed on the Tennenbaum investigation by the Petah Tikva magistrate's court.
? Copyright 2004 Haaretz. All rights reserved

---------------------------------------------------------

>> AHEM...

Proper disengagement
On the eve of the prime minister's meeting with three senior American officials who have come to hear details of his unilateral disengagement plan, it has become increasingly evident that Ariel Sharon's idea has been neither worked out in detail, nor fully fleshed out.
At the end of a series of discussions with political and defense establishment leaders, disputes remain over key issues dealing with the extent of the withdrawal from Gaza and the West Bank, coordination with the Palestinian Authority, and the fate of the settlements to be evacuated.
Contacts with the Americans have exposed basic flaws in the decision making process in efforts to agree on ways to integrate the disengagement plan, the road map, and President George Bush's June 2002 vision. The Israeli government, which justifiably demands that the U.S. coordinate in advance any and all details of any political process - like the road map - surprised the administration with the disengagement plan. Contacts with the U.S. to clarify the details of the plan only began after it had been debated in public, and domestic disputes about it reverberated across the ocean.
The unusual procedure of formulating a far-reaching political plan while holding a dialogue with the U.S. obliges the government to be particularly attentive to the Bush administration's positions. An examination of them shows that they fit both Israel's short term considerations and its strategic goals.
The principle guiding the Americans is that any unilateral move must not include irreversible steps that would sabotage a chance to reach an agreement for a two-state solution on the basis of the 1967 borders accompanied by mutually agreed upon border corrections.
That principle should guide Israel away from "balancing" a unilateral withdrawal from Gaza with a de facto unilateral annexation of territories in the West Bank - using the invasive route of the separation fence. There are neither legal grounds nor international support for Sharon's instructions to strengthen settlements in areas "that will remain in Israeli hands in any agreement." A unilateral withdrawal does not require an agreement; deepening Israel's control over the territories cannot be done unilaterally.
The withdrawal from Gaza will not achieve its goals if Sharon adopts the idea of keeping three settlements in place in the northwest corner of the Strip, or leave military forces in various places in Gush Katif. Israel has no interest in providing excuses to Palestinian extremist groups to turn Gaza into a base from which to continue the violent struggle. Therefore Israel should take seriously the American recommendation that every effort be made to coordinate the unilateral withdrawal from Gaza with the Palestinian Authority.
Ending the occupation of the densely populated Gaza Strip and the evacuation of isolated settlements in the heart of the West Bank could become a first step on the road to rehabilitating the trust between the sides. Short term considerations and sloppy planning should not be allowed to spoil another chance to step out of the cycle of violence and onto a track for disengagement and dialogue.
? Copyright 2004 Haaretz. All rights reserved

----------------------------------------------------------------

>> "BRING IT ON?"

'North Korea ready for both dialogue, confrontation with US'
SEOUL: North Korea said on Wednesday it was "ready for both dialogue and confrontation" with the United States, as a top US envoy urged the communist state to stop brinkmanship in the nuclear standoff. Top communist party official Choe Thae-Bok said North Korea would "return artillery fire for enemy's rifle fire" unless the US gave up its hardline policy.
"The prevailing situation requires us to be ready for both dialogue and confrontation," Choe, secretary of the Central Committee of the Workers' Party of Korea, said in a speech to a rally in Pyongyang.
The official Korean Central News Agency quoted Choe as saying: "It is an unshakeable stand of (North Korea) to return artillery fire for enemy's rifle fire and react to its hard-line policy with the toughest stand."
The speech came as the US Undersecretary of State for Arms Control and International Security, John Bolton, denounced the North's trademark bargaining tactics of brinkmanship ahead of new six-nation nuclear crisis talks. The two Koreas, the US, China, Russia and Japan will meet in Beijing on February 25 in a bid to resolve the 16-month standoff on Pyongyang's nuclear ambitions.
"The spotlight next week is on North Korea. If they truly want to get rid of their nuclear weapons program, here is the opportunity to do it," Bolton said Wednesday in an interview with Japanese public broadcaster NHK. "We're not going to submit to blackmail or reward bad behaviour," he said. Bolton warned that the North's refusal to discuss its uranium enrichment program could derail the chances of finding a peaceful solution to the standoff.
The crisis began in October 2002 when the US said North Korea had admitted running a clandestine nuclear weapons program based on enriched uranium in violation of a 1994 nuclear freeze accord.
Pyongyang has denied the claims by Washington, while reactivating its once-frozen nuclear facilities producing weapons-grade plutonium. But the Stalinist state has offered to freeze its plutonium-producing facilities if it gets US concessions, including a resumption of energy aid to Pyongyang.
Washington has urged Pyongyang first to abandon all nuclear development activities in a verifiable and irreversible manner.
Meanwhile, a senior US envoy John Bolton on Wednesday said North Korea's refusal to discuss its illicit uranium enrichment program threatened the chances of finding a peaceful solution to the nuclear arms crisis.
"I think North Korea's unwillingness to discuss the uranium enrichment program could subvert President (George W.) Bush's determination for a peaceful, diplomatic resolution of the North Korean issue," Bolton said in an interview with public broadcaster NHK, without elaborating.
The comments by the Undersecretary of State for Arms Control and International Security came just a week before six-nation talks on the nuclear crisis involving the two Koreas, China, Russia, the United States and Japan.
Bolton, once branded "human scum" by Pyongyang for his hardline rhetoric, said North Korea should follow Libya's example in renouncing its weapons of mass destruction and that Washington would not bow to blackmail if it did not.
"I think the North Koreans could take a look at what recently happened in Libya," Bolton said. "The result of this, when we're finished with the dismantlement, will be a completely changed relationship between Libya and the United States. That same prospect is there for North Korea if the North Koreans take it."
"The spotlight next week is on North Korea. If they truly want to get rid of their nuclear weapons program, here is the opportunity to do it," Bolton said.
"We're not going to submit to blackmail or reward bad behaviour." The six-way talks set for Wednesday are the first in six months aimed at breaking the impasse to the 16-month nuclear crisis.
----------------------------------------------------------

>> SATELLITES MADE US DO IT?

Nukes-information leak occurring via satellite: Sheikh Rashid
(Updated at 1800 PST)
ISLAMABAD: Federal Minster for Information and Broadcasting, Sheikh Rashid, has said on Thursday that Pakistani government is not sharing any information linked to nuke technology with any country, but it is being had through satellite communication system, said a report.
Addressing a National Hassina Conference in Islamabad, he said: "Pakistan is still lagging behind in communication field, adding that at present there are around thirteen satellite communication systems in the space used for sharing information about arsenals." "Pakistanis are absolutely ignorant of such a horrendous leak", he said.
http://jang.com.pk/thenews/feb2004-daily/19-02-2004/main/update.shtml#29
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Musharraf defiant in face of N-secrets
By Edward Luce &
Farhan Bokhari
ISLAMABAD: General Pervez Musharraf has been under an intense diplomatic and media spotlight in the past two weeks after revelations that AQ Khan - father of Pakistan's nuclear bomb - was at the centre of an international nuclear proliferation network.
But Pakistan's military ruler on Tuesday gave few signs of pressure in an interview with the Financial Times. Wearing his military fatigues and medals, Gen Musharraf did admit he could not have imagined a more difficult situation.
He said that AQ Khan, who is under security watch at his plush home in Islamabad, was a personal hero and a hero to the nation for having provided Pakistan with its nuclear deterrent. Gen Musharraf pardoned the scientist after he confessed on national television. "I have been meeting Dr AQ Khan," he said. "I have had dinners with him and I held him in the highest esteem. Who in Pakistan did not hold him in high esteem?"
That was before the US and the Vienna-based International Atomic Energy Agency gave Gen Musharraf evidence of AQ Khan's proliferation activities. "How do you handle this situation?" the general asked. "Here is a person who is trying to destroy that very thing [Pakistan's nuclear independence] or giving excuses for others to destroy it and that person happens to be the person who has created it."
Gen Musharraf was at pains to explain that AQ Khan and his acolytes -- six of whom remain in detention and under interrogation -- had acted without official authorisation or knowledge and also to convey that Islamabad had closed off all future possibilities of nuclear proliferation.
The general disputed the suggestion that Pakistan's nuclear programme, which started in the mid-1970s under the civilian government of Zulfikar Ali Bhutto, was - or ever had been - under the control of Pakistan's army.
Many in Pakistan and elsewhere have been sceptical that AQ Khan's proliferation took place without the knowledge of senior military officers. "No sir, it [Pakistan's nuclear programme] is not under the aegis of the military. It never was and it is not now," Gen Musharraf said. "We have a [Nuclear] National Command Authority with the president as the boss and there are a number of ministers - all the stakeholders - and the military men also. This is not a military body, it is the highest body of the nation."
Gen Musharraf reiterated that he had heard nothing of AQ Khan's nuclear smuggling since he became Pakistan's military chief in 1998 and its ruler, after a bloodless coup, in 1999. AQ Khan was sidelined in 2001 after Gen Musharraf set up the nuclear authority with a clear chain of command and control over Mr Khan's development laboratory and other nuclear development bodies. "I believe in the army dictum that a commander is responsible for all that happens or does not happen in his command -- and to that extent any president is responsible for what happens in the country," he said. "But otherwise, if you are hinting at my direct responsibility, no not at all. I do read in some newspapers some aspersions being cast . . . it is all nonsense."
Gen Musharraf also explained in detail why it was quite plausible that AQ Khan and his accomplices had managed to smuggle nuclear designs past extensive security checks at the Khan Research Laboratories, near Islamabad, where Pakistan's uranium enrichment takes place.
Last week, relatives of the detained scientists alleged that it would have been impossible to do so without broader connivance. "It is an unfortunate reality when the boss of an institution himself [AQ Khan] is involved," said Gen Musharraf. "If there was a security problem here [at Gen Musharraf's office] and if I myself am involved in the breach, do you think anyone is going to check me? I am free to go anywhere, I can take anything in my car, I can take anything in my briefcase."
Gen Musharraf said the Pakistan investigators had not established that AQ Khan had smuggled anything other than designs for centrifuges. He said the investigation, which is not yet completed and which Pakistan plans to share with the US, had not so far found that AQ Khan had transferred designs for nuclear weapons or more bulky material. "What is in a design?" he said. "It is a piece of paper you put in your pocket, or it is on the computer. For that matter I would say it is in the mind of the man. You do not have to carry it if you know it yourself."
Gen Musharraf also revealed that AQ Khan had signed a written agreement two weeks ago in which he pledged not to resume any contacts with the "nuclear underworld" outside of Pakistan. Some critics in Pakistan allege that AQ Khan was pardoned in order to forestall any embarrassment to Islamabad that might arise from a trial.
Pakistan's president denied this. "He [AQ Khan] has written that he will never be involved in these activities again -- proliferation activities -- that he regrets all that he has done, that he's not going to get involved in anything of this sort. If he breaches that, certainly the pardon will be revoked." Gen Musharraf also said that AQ Khan would be permitted to keep his extensive financial assets, in spite of the fact they were evidently ill-gotten gains. "Yes, he has property and he has been buying and spending left, right and centre. But we haven't taken them [his personal assets] over. We are not planning to."
Musharraf says Pakistan will not compete with India on nukes Pakistan will not try to match India's nuclear weapons development, although it will soon test a long-range missile, President Pervez Musharraf has said. The Shaheen II missile, with a range of 2,000km, would be tested within the next few weeks, he said. "If they (India) want to reach 5,000km, or to have intercontinental ballistic missiles, we are not interested in those. We are only interested in our own defence," he said. India and Pakistan have often spoken with one voice during global nuclear policy discussions.
But President Musharraf reiterated that Pakistan would not allow the UN to inspect its nuclear programme. "We are not hiding anything...what is the need for any inspection?" he said. "This is a very sensitive issue. Would any other nuclear power allow its sensitive installations to be inspected? Why should Pakistan be expected to allow anybody to inspect?" Musharraf's commented.
Musharraf said he was confident no further proliferation would take place from Pakistan. "We are not hiding anything . . . what is the need of any inspection? What for?" he said. "We will cooperate with any organisation, the International Atomic Energy Agency, or anybody. But don't treat us as if we do not know what we are doing. We are doing everything according to international standards."
http://jang.com.pk/thenews/feb2004-daily/19-02-2004/main/main3.htm
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Bhutto steps up pressure on Pakistan's N-leak
By Farhan Bokhari and Edward Luce
Published: February 18 2004 23:50 | Last Updated: February 18 2004 23:50
Benazir Bhutto, Pakistan's exiled former prime minister, will hold a meeting in London on Thursday to exploit the embarrassment of General Pervez Musharraf, Pakistan's military ruler, over revelations of the country's central role in nuclear proliferation.
About 30 senior parliamentarians of Ms Bhutto's Pakistan People's party, one of the leading opposition groups in parliament, will join their leader in London for the strategy meeting.
Opposition parties in Pakistan were this week denied their request for a parliamentary debate over Gen Musharraf's handling of the scandal. Earlier this month Abdul Qadeer Khan, father of Pakistan's bomb, confessed to his activities and received a pardon.
"This is a meeting to decide how far the party can put pressure on Gen Musharraf on this issue," Farhatullah Babur, the PPP spokesman said yesterday. "Benazir Bhutto's basic point is that the Musharraf government needs to tell us more, no matter how embarrassing it is."
Opposition leaders are demanding an inquiry into what many think is the likely role of senior military and intelligence officers in facilitating Mr Khan's use of the "nuclear black market".
In an interview with the FT this week, Gen Musharraf denied that he or any of his predecessors had knowledge of Mr Khan's activities.
Senior Pakistan officials predict that Ms Bhutto, who would face a number of corruption cases if she returned to Pakistan, would find it difficult to ignite popular feeling within Pakistan.

"Her strategy will be to reach out to western capitals to build up pressure against the government," said a Pakistani official.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982644115&p=1045050946495
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Pakistan's banks break free of state chains
By Farhan Bokhari
Published: February 18 2004 20:58 | Last Updated: February 18 2004 20:58
When trade union officials suspected that a Pakistan bank was not going to hire their nominees to new positions, they threatened to throw the bank's president out of his eighth-floor office.
"Union leaders just walked into the president's office and threatened to hang him by his toes from his office window unless he complied with their demands," says a former manager of the bank.
That was 20 years ago. At the time, all of Pakistan's banks were in the hands - and often the palm - of the state. But now the completion of the bank privatisation programme, combined with falling interest rates, is launching Pakistan's banks into competition on the international stage.
Zakir Mehmood, the president of Habib Bank, the last public sector bank to be privatised, says that for the first time western businesses can deal with local banks on the same basis as banks in their own countries. Mr Mehmood's confidence will be tested in the coming months.
"For Pakistan, the pleasant anomaly may be that we are a third world country but interest rates for some of our borrowers are similar to first world rates," says Mr Mehmood. While individual consumers face interest rates of 8 to 10 per cent, many bigger companies are negotiating annual interest rates of 2 to 2.5 per cent, Mr Mehmood says.
"Rather than developing and selling a product under duress because that was official policy, you now have to do it because that's what the market demands," he says.
Last month a 51 per cent stake in Habib Bank was sold to the Geneva-based Aga Khan Fund for Economic Development (Akfed) for $400m (?312m, ?210m), completing the privatisation of Pakistan's public sector banks.
Foreign company executives are expected to exploit this opportunity to raise capital from local banks, marking an end to government- influenced borrowing policies. "The mechanics of the financial sector are rising to the expectations of foreign businesses," says a senior executive at a foreign company in Karachi. "Unlike the past, when the condition of Pakistan's banks was seen as an impediment, it has now become a facilitating factor."
According to Ishrat Hussain, the governor of the State Bank of Pakistan, the central bank, up to 80 per cent of capital in Pakistan is now in privately owned banks - in contrast to 1990, when all local banks were government-owned.
Habib Bank's privatisation follows the sale of United Bank, another former state bank, to an expatriate Pakistani businessman and investors from the Gulf. That leaves only National Bank of Pakistan (NBP) under majority government ownership. The government plans to keep the NBP for government-related functions such as paying the salaries of government officials.
The three banks were nationalised in the early 1970s under the semi-socialist policies of Zulfikar Ali Bhutto, the late prime minister, whose government opposed private ownership of large businesses and industry on the grounds that it exploited workers' rights. By the mid-1990s banks had become unprofitable and were saddled with bad debts.
Influential members of governments, as well as union leaders, forced banks to adopt a range of policies, from new hiring to lending. Political influence was won by granting loans to borrowers despite weak collateral.
Some bankers note that growing demand from consumers is likely to spur lending in the coming months. According to the latest government statistics, private borrowers borrowed Rps157bn ($2.8bn, ?2.2bn, ?1.5bn) from banks during the second half of last year, almost three times that in the same period a year before. Banking analysts note that the greatest demand from individual borrowers is for new car loans.
Pakistan's car manufacturers this financial year (July-June) are expected to sell more than 110,000 cars, or more than twice those sold in 2002.
"You can feel the difference," says Ali Raza, the president of the National Bank of Pakistan.
"Five or 10 years ago maybe no more than 5 per cent of new cars were sold to owners who had a loan from a bank. Now, more than two-thirds of new cars come through loans."
However, banks still need to tap a new class of consumers, Mr Raza adds. In a country of 145m, only about 22m have bank accounts - approximately one in every seven people.
"With such a large consumer base, you have about 700,000 credit card owners." Mr Raza says privatisation will promote competition among banks.
Unlike the long years in which public banks recorded losses year after year, private banks will have to be more savvy about pursuing their customer base. And hanging clients up by their toes will probably not work.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1075982648276
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Posted by maximpost at 12:22 PM EST
Permalink
Wednesday, 18 February 2004

Third World Quarterly, Vol 18, No 2, pp 249? 265, 1997
Syria: the politics of economic
liberalisation
RAYMOND A HINNEBUSCH
Economic liberalisation is on the agenda of every Middle Eastern state. However,
actual liberalisation typically lags behind global trends and nowhere more
so than in Syria. The dominant explanations of liberalisation or resistance to it
approach the issue from opposing sides. One sees economic crisis forcing
liberalisation on the state: although the exceptional availability of rent in the
Middle East may dilute the dictates of economic rationality they must, in the
long run, prevail. A rival political?cultural approach sees the Middle East' s
` neo-patrimonial' rentier states as intractable obstacles to liberalisation; they
sacri? ce economic rationality to the politics of patronage and foster dependent,
rent-seeking bourgeoisies unable to push liberalisation.1
Both approaches capture part of the picture but can, if exaggerated, fall into
economic or cultural determinism which either insists the Middle East must
inevitably join a uniformly liberalised global market or is disquali? ed, by reason
of culture, from membership in it. A combined approach which sees liberalisation
policy as an attempt to reconcile economic and political rationality has
greater explanatory power; thus, Steven Heydemann' s study of Syrian liberalisation
argues the compatibility of political rationality and limited economic
liberalisation.2
This paper will similarly argue that Syrian economic policy is determined by
the regime' s long-term need to balance political and economic rationality.
However, analysis of such ` systemic requisites' is only a starting point and the
particular balance arrived at by a regime can only be understood by an analysis
of two ` intervening variables' , class interests and the political process. To greatly
oversimplify, liberalisation policy is shaped by a con? ict of social forces? bourgeoisie,
bureaucracy? channelled through a political process in which a relatively
autonomous state elite has the last word. This paper provides an outline
of the con? icting social forces and a snapshot of the political process in the early
1990s.
Forces for and obstacles to economic liberalisation
State interests and autonomy: obstacles to liberalisation
Resistance to economic liberalisation seems naturally embedded in the logic of
Syria' s authoritarian?populist `minority' regime. The state' s emergence out of a
Raymond A Hinnebusch is at the Department of International Relations, University of St Andrews, St Andrews,
Fife KY16 9AL, UK.
0143-6597/97/020249-17 $7.00 ? 1997 Third World Quarterly 249
RAYMOND A HINNEBUSCH
revolution led by plebeian minorities, in which the formerly dominant classes
were levelled, new rising elements mobilised, and submissive elements of the
bourgeoisie later incorporated into the regime coalition, enabled the regime
to balance con? icting social forces in Bonapartist fashion, giving it relative
autonomy from society.
This Bonapartist state possesses a formidable machinery of power. Policymaking
power is concentrated in a presidential monarchy, resting on huge civil
and military bureaucracies, whose chains of command are reinforced by
patronage and kinship. A Leninist-like party incorporates a constituency, notably
in the village, while the regime' s control of a large public sector and its access
to rent (such as petroleum revenues and Arab aid) buttress its autonomy,
especially of the bourgeoisie. Rent has eased pressures on the regime to foster
private sector capital accumulation and gives it patronage resources to keep a
segment of the bourgeoisie state-dependent. The regime' s autonomy has enabled
it to shape its policies according to raison d' e?tat, putting its own interests over
those of a dominant class.
One of these interests is to defend its revenue base and the public sector
remains a crucial revenue source which cannot be replaced as long as the private
sector can evade taxes. The regime must also satisfy the interests of core
political elites. The fact that the elite is dominated by formerly propertyless
minorities, especially Alawites, who use the state as a ladder of advancement,
while the private economy is dominated by the majority Sunni community, gives
the regime an exceptional stake in a large state role in the economy. Elites who
have been enriched on smuggling or pay-offs from business to evade regulations
pro? t from state regulation of trade. Elite corruption, which fosters arbitrariness
and opportunities for riches from illicit activities, deters productive private
investment; but eradicating these parasitic activities would mean attacking the
regime' s own core. Finally, the regime cannot ignore its ` sub-elite' : the party
apparatchiki and bureaucrats who staff the very structures of the state have
ideological and material stakes in the state' s economic role.
The regime' s popular or mass base also constrains it. The product of a
populist movement against the bourgeoisie, it must protect its popular constituencies,
but these? unionised workers, public employees, and small peasants?
are the forces most likely to be threatened by economic liberalisation
while the regime' s historic rival, the bourgeoisie, is most likely to bene? t.
Thorough economic liberalisation, therefore, requires a new alliance between
state and bourgeoisie, an outcome delayed in Syria because of a certain mutual
reinforcement of state/private and Alawi/Sunni cleavages. Since coming to
power, Asad has used limited economic liberalisation to advance a modus
vivendi with the bourgeoisie. But this aimed to protect his autonomy by
balancing the bourgeoisie with his populist constituency rather than sharing
power with Syria' s business class.
Finally, the struggle with Israel funnels state revenues which might otherwise
stimulate development into the military, diverts private investment into shortterm
speculative ventures, and deters foreign private investment. Thus, the
potential ` triple alliance' of state, domestic and international capital, the engine
of capitalist development elsewhere, is stunted in Syria.3
250
ECONOMIC LIBERALISATION IN SYRIA
Economic crisis and pressures for liberalisation
While Asad sponsored some limited liberalisation in the early 1970s, renewed
and stronger pressures for economic liberalisation grew out of the economic
crisis of the mid-1980s. This crisis was rooted in the very nature of the regime' s
statist?populist strategy of state formation. This strategy peripheralised the
private sector, (pushing it largely into tertiary activities or into capital export),
while failing to make the public sector a dynamic engine of capital accumulation.
Public sector failure stemmed from bureaucratisation (which produced
inef? ciencies in planning and management) and from politicisation (which
subordinated the logic of capital accumulation to political objectives such as
patronage, job maximisation, and production of low priced consumer commodities).
This re? ected the regime' s original inclusionary strategy of bringing the
lower strata into politics on its side, a strategy which tends to foster mass
consumption over capital accumulation. Building a national power-base also
dictated import substitution industrialisation which, in Syria as elsewhere,
produced dependency on imported parts, machinery and raw materials before
development of the export capacity needed to earn foreign exchange, thereby
precipitating balance of payments dif? culties. However, access to plentiful oil
rent fuelled an economic expansion which sustained the regime' s political
strategy in the 1970s.4
When rent declined along with the fall of global oil prices in the 1980s, the
weakness of this strategy was revealed. Thus Syria' s trade imbalance deteriorated
from 2 5.5 billion Syrian pounds (LS) in 1977 to LS 2 12.2 billion in
1987, while Arab transfers fell from $1.8 billion in 1981 to $500 million
between 1986 and 1988. The resulting ? scal and foreign exchange crises forced
austerity? cutbacks in public spending? and a consequent declining ability of
the state to ? nance investment, jobs and contracts. In 1986 foreign exchange
dried up, factories dependent on imports closed, and shortages fuelled 100%
in? ation. Debt mounted while per capita income fell 4.5% from 1980 to 1988.5
The state could no longer sustain its excessive size and economic functions and
began to turn to the private sector to reverse the economic decline. In return,
business had to be given concessions: thus the door of economic liberalisation
began to open.
Reconstruction of a bourgeoisie: requisite of liberalisation
Liberalisation cannot go far without the reconstruction of an entrepreneurial
bourgeoisie which, being willing to invest, can provide a viable alternative to the
public sector and acquire the power to push for liberalisation against statist
vested interests. In the Syrian case, a bourgeoisie appears to be in the process
of reconstruction but this is incomplete.
The state helped give birth to a new bourgeoisie. The power elite was, itself,
embourgeoised through corrupt activities or business on the side. The development
expenditures of the expansive 1970s also fostered a state-dependent private
bourgeoisie of agents, importers and contractors. The Damascene wing of the old
merchant class accommodated itself to the regime and took advantage of similar
251
RAYMOND A HINNEBUSCH
opportunities, while the in? uence of the anti-Ba` th landed ` aristocracy' declined.
6
The emergence of a so-called `military?mercantile complex' of Alawi of? cers
and Damascene Sunni businessmen constituted the core of an alliance between
the ` new' state and ` old' private bourgeoisies. Seale suggests Asad deliberately
sought in this way to give his regime a class underpinning needed for stability,
but these groups have yet to amalgamate into a new dominant class.7 Certainly,
the former sharp antagonism between the state and the upper classes was bridged
as the political elite acquired a stake in new inequalities. There is a marriage of
convenience between the two. The Sunni bourgeoisie needs political connections
to evade regulations or get privileges and contracts. Alawis need the Sunnis for
their access to the Western market and Gulf investment money. The Alawis are
enriching themselves in business, not just politics, and they monopolise the oil
servicing sector and shipping. There are capital partnerships between Alawi
money and regime-allied Sunni tycoons. Sunni capitalists are con? dent that the
regime is inexorably committed to liberalisation and no longer fear nationalisations,
if only because so many sons of Alawi security barons have gone into
business. But there is also a perception that business success requires political
connections or pay-offs; the relation of less favoured and smaller business
elements to the Alawi barons still resembles the payment of ma? a-style protection
money. The cultural gap with the Sunnis is kept alive by continual migration
from the countryside of poor Alawis with harsh accents and rural ways who
attach themselves to Alawi patrons in power. The still limited incidence of
intermarriage between the Alawi political elite and the Sunni business elite
suggests a persistent lack of social trust. The regime is trying to legitimate itself
by co-opting members of old Sunni families into government but, while the
Alawis want to keep the upper hand, the Sunnis are looking for full partnership.
As such, it is better to speak of an uneasy alliance of rival bourgeois class
fragments than a new uni? ed bourgeoisie.
Moreover the private bourgeoisie is still politically weak and has by no means
` captured' the state. It is divided between the pro-regime new bourgeoisie and
elements of the older bourgeoisie still unreconciled with the regime. The private
bourgeoisie has not forged alliances with other classes beyond the urban petite
bourgeoisie, for much of the workers and peasants remain incorporated by the
regime and unavailable. Thus, the private bourgeoisie currently lacks the power
to push for more economic liberalisation than the regime wants.
Nor is the bourgeoisie necessarily united on economic policy or an unabashed
promoter of economic liberalisation. It largely accepts the regime' s strategy of
incremental liberalisation, being happy with the new opportunities to get rich and
with the current political and currency stability. Politically connected elements
want a continued role for the state as a source of contracts and monopolies.
While the Chamber of Commerce tends to favour free trade, the Chamber of
Industry values the opportunities for high pro? ts from local manufacture of the
large range of goods whose import is prohibited or which carry heavy tariffs.
Economic rationalisation is retarded by alliances between state and private sector
elements to exploit the public sector, such as by diverting publicly produced
yarn, hoarding it and selling it privately. The bourgeoisie is thus partly rent
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ECONOMIC LIBERALISATION IN SYRIA
seeking, although historically many bourgeoisies start this way and this does not
preclude a later participation in liberalised markets. The Syrian bourgeoisie does
welcome greater access to foreign partnerships and the opening of ? elds
formerly reserved for the state to private investment. More market-orientated
new industrialists from the ranks of the petite bourgeoisie have created medium
sized factories in ? elds such as clothing and plastics. Expatriate capital, accustomed
to operating on the market, is also showing serious interest in Syria.
Elites, the political process, and economic liberalisation
A relative stalemate in Syria between the social forces? bourgeoisie and
bureaucracy? which lean towards or against liberalisation (as well as their own
ambivalence), has allowed the political elite, balancing between them, the
autonomy to shape the extent of liberalisation according to its own ideology and
interests.
Elite strategies and selective economic liberalisation
Incremental liberalisation is designed to reduce the state' s economic burdens
without damaging its interests, but is, nevertheless, real. A contraction of state
intervention is widening room for the market: state monopolies in foreign trade
and production have been reduced in favour of the private sector, the exchange
rate liberalised and price controls relaxed. Austerity has cut state subsidies and
public investment while a major new investment law, No 10 of 1991, welcomes
private and foreign investment in industry, permits repatriation of pro? ts, waives
import duties and allows investors to import and bring in hard currency outside
state channels. New projects get tax holidays and income tax has been cut from
highly progressive rates to a range of 10%?45%.
An accumulation of incremental changes has produced this liberalisation of
economic strategy. Ideological obstructions to liberalisation, of no small importance
in a regime born of an ideological movement, have collapsed. As the
political elite went into business on the side in the 1970s, and embourgeoisement
altered its objective class situation, its commitments to socialism eroded. The
economic crisis of the 1980s demonstrated the limits of statism.8 As state
patronage dried up, regime constituents with capital had an interest in diversifying
their assets by going into private business. The collapse of communism in
the 1990s discredited remaining ideologically-rooted hostility to liberalisation.
Economic constraints forced certain liberalising initiatives. As long as the
state had abundant foreign exchange, it had little incentive to liberalise, but the
balance of payments crisis of the 1980s provided an opening wedge for the
private sector. For example, when the regime lost the foreign currency to pay for
certain public sector-imported commodities it had to allow the private sector to
import them. The inability of the state to import scrap metal to run the public
iron and aluminium factories forced it to allow private importers to do so, and
to process it for them, thus pressing state factories into the service of private
business. The foreign currency crisis also forced the regime to shift towards an
export-oriented strategy dependent on private sector participation. To ensure
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RAYMOND A HINNEBUSCH
repatriation of sorely needed remittances by Syrians working abroad, the regime
had to set the value of the Syrian pound at near-market rates. On the other hand
an incremental strategy of liberalisation has been facilitated by the greater
economic health of the early 1990s, resulting from a combination of previous
austerity measures and an increase in oil revenues, Arab aid and foreign
exchange.9 The possible end of high economic growth in the mid-1990s,
assuming these decline, will probably accelerate liberalisation measures. The
regime, in short, cannot avoid some response to economic pressures.
However, if liberalisation was motivated primarily by economics, measures to
increase capital accumulation, such as raising the interest rate and reforming the
banking system, as well as privatising the public sector, would arguably be
pursued more aggressively. Had liberalisation been merely a response to economic
crisis, it could have been reversed when the crisis passed after 1990, but
the most recent liberalisation initiatives, notably the private investment law,
post-date the crisis. It is true, of course, that the collapse of the Eastern bloc
showed Syria had to further integrate into the Western capitalist market; but
Syria has, nevertheless, resisted IMF attempts to impose the dominant neoliberal
version of economic rationality.
In fact, political motives? maximising regime autonomy and stability? have
dominated economic policy making. Speci? cally, Asad' s ? rst domestic priority
has been the internal stability needed to conduct a rational foreign policy, freely
adapting his strategy to external threats and opportunities in the struggle with
Israel. Asad' s ? rst (early 1970s) economic liberalisation measures were largely
designed to accommodate the bourgeoisie to his regime, thus broadening the
regime' s political and economic base for the struggle with Israel. This effort was
interrupted when the bourgeoisie' s association with the Islamic rebellion allowed
statists to argue that it was politically unreliable and it was resumed when the
Islamic threat passed. By the late 1980s economic stagnation, particularly the
inability to provide jobs for the growing educated middle class, had made it
more politically dangerous to maintain the status quo than to alter it.
Economic policy is also closely linked to strategic opportunities and needs:
statism was partly a function of bipolarity which facilitated the Soviet aid needed
to build the regime' s domestic base and buttress its autonomy of Western
economic constraints. Conversely, the disappearance of Soviet power radically
altered the conditions in which Syrian raison d` e?tat must operate; by the 1990s
Asad was convinced his foreign policy could no longer be pursued in opposition
to the USA, the only remaining superpower, and detente with the West required
some measure of internal liberalisation. Maintaining autonomy of domestic
opposition to this realignment required further broadening of his base beyond the
Ba' th party to the bourgeoisie; thus, the vulnerabilities of the statist economy
may have been seen by Asad, not just as a threat, but also as an opportunity to
diversify the regime' s political and economic bases.10
So far, political and economic rationality have been reconciled through a
strategy of selective economic liberalisation. Regime elites agree that long-term
stability requires liberalisation. But they also agree that a Soviet-type collapse of
the statist economy before a domestic market is fully in place must be avoided
by a gradual transition. Nor does the regime make full integration into and
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ECONOMIC LIBERALISATION IN SYRIA
competitiveness on the international market its ? rst priority; rather its strategy is
a division of labour in which the public sector continues to meet local needs and
serve the regime' s constituency while the private sector specialises in production
for export. This diversi? es the country' s economic bases as well as enhancing
the regime' s ability to balance between bureaucracy and bourgeoisie.
This is not to say that economic calculations are absent from Syrian decision
making. Nabil Sukkar, an independent Syrian economist who was enlisted in
designing the regime' s economic policy, argues that regime strategy is compatible
with economic rationality. A strong state is needed to manage liberalisation.
The proper sequencing of liberalisation is to expand the private sector before
tackling reform of the public sector so as to have a dynamic private economy
able to absorb the resultant unemployment. A second stage in encouraging the
private sector is needed before privatisation, namely tax reform, banking reform
and stabilising the balance of payments; the regime has only started on such
reforms.11
The regime' s cautious approach is partly shaped by its perception of the
economic consequences of other in? tah experiments, such as Egypt' s, which it
believes generated a worsening of trade and foreign exchange imbalances,
mounting debt and dependency, rather than local industrialists and signi? cant
foreign investment. The regime prefers to assess the results of its current
initiatives before moving to the next stage.
The policy process and economic liberalisation
President above the fray. President Asad ultimately approves policy and he has
made the strategic decision for economic liberalisation. Yet his cautious,
pragmatic nature, his disinclination to impose the speci? cs of economic policy
or to be too far in front of the elite consensus in economic (as opposed to
strategic) matters, has deterred a presidential intervention on behalf of a radical
lurch towards the market. Most elite opinion favours some liberalisation, but is
divided over its extent and pace and Asad is allowing this to be determined in
good part by bureaucratic politics: an intra-regime struggle between liberalising
` technos' and statist ` politicos' . Failures of the statist economy enhance the
political clout of the liberalisers, while better economic times increase the ability
of politicos to defend the statist status quo. Asad is most likely to intervene in
economic issues when the elite is stalemated or if an economic failure threatens
the regime' s political base? as in his recent dismissal of the electricity minister
for failing to alleviate the power interruptions which irritate a broad spectrum of
society.
Technocrats as liberalizers. Prime ministers and technocrat-ministers are most
directly responsible for framing economic policy. The replacement of the Rauf
al-Qasm government, which was committed to statist industrialisation, by that of
Mahmoud al-Zoubi in 1985 improved the climate for liberalisation in the
cabinet. But al-Zoubi is a conciliator, content to balance between factions. As
such, the main force for liberalisation has been the Minister of Economy and
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RAYMOND A HINNEBUSCH
Foreign Trade, Muhammed al-Imadi. Although not a Ba` thist and once viewed
in the party as a rightist, the support of the President has allowed Imadi to push
for reform against the resistance of statists. In fact, Imadi was lured by Asad to
return from his position with the Kuwait Gulf fund on the condition that he
would be given real power over economic policy. But he has not had a free hand
and has had to struggle for change. It is typical of such a personalised regime
that Imadi uses selections from the president' s speeches to justify innovations
and fend off leftist critics.
Imadi has worked patiently, in stages, to promote liberalisation. He ? rst
opened tourism and then agriculture to joint venture (private?state) enterprises in
the 1970s and 1980s. The foreign investment law is his latest initiative. Imadi' s
next project is a ? nancial market law which he has pushed against Marxist
parliamentary deputies who have attacked a stock market as little different from
a lottery. In alliance with the Ministry of Industry, he has also pushed to make
the public sector operate on the market for pro? t against the opposition of trade
unions fearful of bankruptcy.
Imadi has promoted the liberalisation of foreign trade on the assumption that
it can, as once before, be the engine of the economy.12 He has pushed for Syria' s
fuller integration into the world capitalist market by successfully getting debt
repayment exports to the former USSR suspended, steering exports westward
and by pushing for Syrian membership in GATT; the latter has been opposed by
the Central Bank, which fears the loss of tariff revenues, and by protectionist
interests.13
Imadi has also, however, tangled with private commercial interests over trade
and foreign exchange. Merchants and industrialists were content to export to the
USSR in the late 1980s, but he required them to export a portion to the West to
earn foreign currency. They wanted to ? nance imports through external credit
facilities or their holdings abroad (from capital ? ight which was detrimental to
the value of the Syrian pound), but he insisted they must pool foreign exchange
earned from exports to ? nance imports. He sponsored Decree 905 of 1990
which, in permitting free imports of industrial spare parts and raw materials,
abolished lucrative monopolies in this ? eld.14
Imadi is, however, no neoliberal ideologue. Third World countries, he argues,
need economic intervention by a strong state on behalf of more equal distribution
and to undertake investment in infrastructure and strategic industries.
Private economic interests should not be allowed to dominate economic policy.
But private property is a social good and the private sector should be given much
greater scope. His image of Syria' s future is a regulated market economy with
some state intervention and a slimmed down public sector run on the basis of
pro? t.15 Imadi' s middle position between vested interests suggests he can be seen
as an autonomous technocrat looking out for the state' s economically rational
best interest, rather than, as some suggest, a representative of the bourgeoisie,
who, in fact, do not see him as their man.
Statist interests: party and bureaucracy. Etatist policies are defended by
powerful interests such as party apparatchiki and trade unionists. This alliance is
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ECONOMIC LIBERALISATION IN SYRIA
incarnated in the person of Izz ed-Din Nasir, an Alawi member of the Ba` th
party Regional Command who heads the trade union confederation and is seen
as a major opponent by private business. As economic crisis gave liberals
ammunition to widen the scope for the private sector, he convened a 1989
conference of managers and labour leaders on reform of the public sector. The
private sector was no good alternative, he insisted, to developing the public
sector.16 Unreconstructed party ideologues, though subdued by the collapse of
communism, are still perceived by liberals as waiting to attack anyone associated
with reforms which inevitably have costs and are by no means guaranteed to
succeed.
But the Ba` th Party is not uniformly hostile to liberalisation. The party
apparatchik nominally responsible for supervising economic policy (rais almaktab-
al-iqtisad), Rashid al-Ikhterini, is viewed by liberalisers as pragmatic. A
senior party apparatchik with ties to the Damascene bourgeoisie, Ala ad-Din
Abdin, expresses the new party line. `We have to adapt to changes in the world' ,
he says, but Syria does not want a Gorbachev-type collapse; rather, beginning
with Asad' s 1970 ` corrective revolution' , the regime has been making incremental
changes. The party welcomes private sector growth to provide employment
since the state sector can no longer absorb job seekers. But because business,
driven by short-term pro? ts, neglects the public interest, the state must invest in
and control strategic sectors.17 The function of the public sector is as much
political as economic and pro? t is not the only criterion of performance: it must
provide cheap popular commodities and is a source of taxes which cannot be
expected from a private sector getting tax breaks to invest. This political
conception of the public sector constrains the possibility that public sector
managers will acquire the autonomy to run their ? rms on economically rational
grounds.
Resistance to liberalisation is strong in the bureaucracy, too, especially among
bureaucrats trained in Eastern Europe who are in charge of public agencies such
as Aftomachine, the state machinery import company, which under liberalisation
is threatened by private importers. That bureaucratic interests in protecting state
revenue are often allowed to jeopardise integration into the world market and
foreign investment is suggested by the tough stance of Syrian of? cials in recent
disputes with Western export insurance companies, and their requirement that
Western oil companies use the unrealistic of? cial exchange rate of LS11.2 to the
dollar. The State Planning Commission is a bastion of etatism. It has circulated
a memo denouncing the IMF and World Bank as instruments of foreign capitalism.
It rejects the IMF' s comprehensive shock reform and insists Syria' s own
austerity programme proved itself by stabilising the value of the pound. It
expects public investment will continue in the production of key popular
consumption commodities and in infrastructure, utilities and strategic industries
which either support the private sector or are too large for it to undertake. The
Minister of Planning sees no threat to the public sector from private competition,
believing that entrepreneurs will concentrate on light industries requiring little
capital. Indicative of the decline of socialism, however, is the minister' s view
that liberalisation will eventually produce a market economy in which the
planning commission may be dismantled.18
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RAYMOND A HINNEBUSCH
The public sector and liberalisation. The Ba' th' s insistence that the public
sector be the ` leading sector' (qita' qa' id), with the private sector a mere
auxiliary, has been quietly dropped from regime discourse. There is, however, no
move to privatise the public sector. The regime will, at a minimum, keep control
over strategic sectors which dominate the heights of the economy and provide
a revenue base. While this is sure to include sectors such as oil, cotton and
perhaps banking, one party of? cial included industries such as spinning and
weaving. Nevertheless, reform of the public sector is on the agenda because
many state enterprises are losing money and the government lacks the foreign
currency to modernise them. As far back as 1974, Legislative decree 18 was
supposed to give managers autonomy, free them from political pressures, and
allow market forces to set production and prices. It was, however, obstructed by
the bureaucracy: for example, the Ministry of Supply insisted that prices be set
through negotiations with ? rms in which it defended consumer interests in
keeping them low.
Many public sector managers have supported reform, complaining that
bureaucratisation sti? ed all initiative and tied them up in red tape: for example,
to get spare parts they had to issue tenders. Fixed prices for their products made
it impossible to self-? nance their ? rms, forcing them to work under capacity
because of lack of spare parts or worn out and dated machinery. The General
Organization of Food Industries (GOFI) recently threatened to export its output
because local prices were set too low. Managers also want the right to hire and
? re, free of pressures to employ job-seekers, and to provide ? nancial incentives
to improve labour performance. GOFI' s general manager has recently welcomed
private sector competition to absorb job seekers he does not want, but fears he
will be stuck with the leavings of a private sector which can pay higher wages.19
Cautious but seemingly serious public sector reform has started. The central
pricing system has been abandoned except for crucial necessities and public
? rms can, within certain pro? t margins, now set their own prices based on
free-market exchange rates. They are expected to export to earn foreign exchange
for the import of production requisites and are reimbursed at the near free
market exchange rate (around LS42 5 $1), rather than the of? cial rate which
long discouraged exports. Managers who can export support this change, but the
head of a public road construction ? rm fears it will bankrupt him, since his wage
costs and obsolete equipment prevent him from competing for reconstruction
contracts in Lebanon and Kuwait. The down side for the public sector is that it
must now use the near market exchange rate for imports, too, thereby quadrupling
its costs. Though costs are partly being passed on in price rises, this has
also spurred a more serious search by managers for local alternatives.20 The
Ministry of Finance is reputedly requiring pro? tability to advance loans to public
? rms. Private investment competing with public sector ? rms has been approved
and a businessman with high political connections says the policy is to reduce
subsidies to public sector ? rms and force them to compete with private ? rms;
those that cannot will be allowed to go out of business.
The public sector continues, however, to lobby for state investment. It
stagnated in the 1980s when there was little ? nancing available from the Soviets
or Arabs and many projects were left un? nished from the expansionary Kasm
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ECONOMIC LIBERALISATION IN SYRIA
era. Public sector bureaucrats, however, received a share of the Gulf war
windfall: the Deir ez-Zor paper plant is to be rehabilitated, steel plant investments
made at Hama, and new fertiliser plants are planned. Some state
companies are looking at joint ventures as the road to ? nancing; Kuwait is
funding new joint venture cement factories. Much new funding comes from
loans which will have to be repaid; unless the public sector' s reform makes it
pro? table, this expansion will, therefore, only increase Syria' s indebtedness.
Joint private?public ventures are a substitute for open privatisation. In these,
the state' s contribution is likely to be land or factories while the private sector
contributes capital and entreprenuership. The state retains some control and gets
a share of the economic rewards, but the ? rms are run by businessmen for pro? t.
According to a leading private businessman, this approach, avoiding the opposition
of the trade unions, is Syria' s special road to privatisation. Indeed, the
provision by the state of large tracts of state-owned land to agricultural
companies may amount to a de facto ` privatisation' of this land. Joint ventures
are an intermediary stage which encourages the alliances between state and
bourgeoisie on which further liberalisation depends. ` Privatisation by stealth' is
also proceeding in some sectors, notably transport, where private minibuses have
proliferated and the public bus network has been cut back and allowed to run
down.
Political opening to the bourgeoisie. The major change in the political process
since liberalisation is the bourgeoisie' s increasing access to decision makers and
hence in? uence in intra-bureaucratic politics. The Committee for the Guidance
of Imports, Exports and Consumption which meets regularly under Prime
Minister al-Zoubi, and on which the heads of the Chambers of Commerce and
of Industry are in? uential, gives business institutional access. The Chambers are
not mere government transmission belts but semi-of? cial NGOs: while committed
to the regime' s economic strategy, they are not only able to press for implementation
of liberalisation within that framework, but attempt to expand its parameters:
thus, the Chamber of Commerce lobbies for a mixed sector bank to
break the state monopoly and a legalised stock market, a symbolic blow at
socialism. On a day-to-day basis its role is to protect business from arbitrary
state interference.
Access to government is also personal: Badr ad-Din al-Shallah, head of the
Damascus Chamber of Commerce, who won Asad' s trust by keeping Damascus
quiet during the Islamic disturbances of the early 1980s, acquired personal
access to the president and his son, Ratib, has since taken over his role; as an
old merchant family, the Shallahs are, nevertheless, perceived by Sunni society
as ` clean' , allowing them to mediate between state and bourgeoisie. The
Shallahs' argue that, although state consultation with business is still irregular,
the Chamber of Commerce is promoting the legal institutionalisation of liberal
economic policy. They seek this through accommodation with statist interests;
for example, they view privatisation as unrealistic and seek, instead, widened
space for private business.
Greater bourgeois access does not confer real political power over the state;
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RAYMOND A HINNEBUSCH
indeed, state autonomy may be enhanced since it can balance competing
` popular' and ` bourgeois' interests. However, the regime' s increasing dependence
on private investment for foreign exchange, exports and job creation
requires it to respond to investor demands. This, and better access, allows the
bourgeoisie to exploit intra-regime cleavages by allying with the more liberal
factions in the power elite or making their case directly to the president. A major
recent victory was the bourgeoisie' s ability to reverse the original of? cial
intention of limiting the privileges of investment Law No 10 to external
investors.21
Obstacles to liberalisation: the politics of exchange rate and prices. Statist
obstacles to liberalisation can be seen in policy making on foreign currency and
the exchange rate. As foreign currency became scarce in the 1980s, the
government reserved its own holdings for the public sector and sought to control
a share of that in private hands. Yet it also needed to encourage exporters to earn
foreign currency for serving private sector needs. At ? rst, the state insisted all
foreign currency be sold to state banks; but as it became ever scarcer, the private
sector lost access to it. This stimulated the foreign currency black market and in
the mid-1980s Law 24 criminalised private foreign exchange transactions,
chilling the business climate. As this proved counterproductive, the regime
stepped back and, in the late 1980s, allowed businessmen to keep 75% of the
foreign currency they earned, provided they sold the rest to the state at near
free-market rates. Thereafter, the value of the pound for most private sector
transactions was pegged at the ` neighbouring country' near free-market rate.
However, the only legal way for private business to get foreign exchange
remains exporting or tourism and, as such, many businesses can only get it on
the black market.
Despite the government' s encouragement of private business, Law 24 remains
on the books, although it is not enforced. It is widely seen as a major deterrent
to investment and businessmen want a total freeing of currency transactions. But
the government fears this could drive down the value of the pound, lead to big
price increases and a loss of control over the economy. Some believe the law is
an opportunity for security barons to extort pay-offs from business. The regime' s
desire to maintain control of foreign exchange has also deterred it from allowing
private or even joint venture banks from opening; but since state banks cannot
adequately service investors, the banking transactions of local businessmen may
be diverted to Lebanon.22
Another major constraint on liberalisation is the populist ` social contract' , by
which government legitimacy depends on providing a minimum level of welfare,
notably affordable food.23 In 1991, as part of currency liberalisation, the Ministry
of Economy required customs on imported goods to be levied at the new LS42
to the dollar rate rather than the old LS11.2 to the dollar of? cial rate. The
government supposedly needed the increased customs revenue in order to raise
salaries of public employees. Importers insisted custom duties had to be reduced
or the price of imports would soar and in fact they withheld goods or raised
prices, `wiping out' the effect of public employee pay increases. Discontent
swept the salaried classes, who viewed the regime and merchants in a cynical
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ECONOMIC LIBERALISATION IN SYRIA
collaboration at their expense. Despite its effort to raise business con? dence, the
regime reverted to populist rhetoric, blaming ` exploiting merchants' and dispatching
Ministry of Supply price control squads against shops in poor income
neighbourhoods. Asad himself ordered the customs re-evaluation rescinded. The
Ministers of Economy, Finance and Supply held a press conference apologising
for their `mistake' and appealing to shopkeepers not to raise prices. The
ministers thought they were empowered to rationalise the economy but they
were made scapegoats for the political backlash of such policies. In 1993 the rate
of exchange for customs was increased to LS23 to the dollar, a compromise
which is a step back from a rational uni? cation of multiple exchange rates.
Despite this episode, the Ministry of Supply, which a few years ago strictly
enforced price controls, is being curbed. The Ministry used to put the fear of
social repercussions from price rises over economically rational decisions which
led to evasion by merchants, discouraged production, or, in the case of the public
sector, resulted in losses; it also continued to ? x prices for imported commodities
at the of? cial exchange rate long after it became unrealistically low. Now,
however, it must set prices according to the market rate. For example, prices of
medicines, which used to be ? xed on the basis of the of? cial exchange rate for
imported requisites, are now calculated on the basis of free-market rates, raising
them perhaps four-fold.
The populist policy of cheap bread for the urban poor and subsidised fertiliser
and support prices for the regime' s peasant constituency nevertheless remains
highly resistant to liberalisation. The state is committed to purchasing grain
at favourable support prices but to selling bread below these prices; to the
extent this has been ? nanced by domestic borrowing, it is in? ationary and
self-defeating as an income support measure. However, the head of the state
wheat trading and processing company, Huboob, rules out privatisation of the
grain trade or elimination of subsidies: ` control of grain procurement and the
production of cheap bread is the foundation of the state and no politician would
jettison this social responsibility' .24 Although bread prices have been raised,
subsidised bread is still widely available. Membership in GATT could, however,
require cutting farm support prices for the regime' s rural constituency. Political
populism and capitalist development are, in the long run, pulling policy in
opposite directions.
Outcome: revitalisation of a capitalist road to development?
Private investment has responded favourably to economic liberalisation, at least
as measured by the proliferation of private sector imports and exports, of new
small and medium businesses and of investment licences, and by the in? ow of
capital and increase in bank deposits. By 1994, $1.78 billion had been invested
in 474 ? rms under Investment Law No 10. For the ? rst time since the 1960s
nationalisations, private investment has exceeded the state investment budget.
The private sector, which had only accounted for about 35% of gross ? xed
capital formation from 1970?85, climbed to 52% of the total in 1989 and 66%
in 1992. In part because of this, the stagnation of the 1980s gave way to yearly
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RAYMOND A HINNEBUSCH
GNP growth rates exceeding 8% from 1990?93 and continuing at a somewhat
lower rate into the mid-decade.25
There is, however, reason to be sceptical of the ability of private investment
to move much beyond tertiary or small consumer industrial enterprises. The
agricultural investment companies which were supposed to be the cutting edge
of a new state?business partnership have either failed to raise much capital or are
simply covers for speculative ventures. Similarly, Law No 10 gave birth to a
multitude of bogus car rental agencies as covers for importing private cars. Most
private sector industrial growth has taken the form of a proliferation of small
enterprises to avoid? among other things? unionisation under a labour law that
gives workers in bigger ? rms extensive rights. Money is still exported instead of
accumulated internally because interest rates are too low and a stock market
lacking. All this deters the natural expansion of small industries into larger scale
? rms and channels capital into commerce where risks are lower and pro? ts
quicker. Nor is it clear whether private industry is internationally competitive:
private manufacturing exports have plummeted since the 1992 suspension of
export agreements with the former Soviet Union. Austerity has given way to an
import boom which is again driving up the balance of payments de? cit.26
It may be economic as well as political wisdom for the regime to proceed
cautiously with liberalisation for it is questionable? given the greater opportunities
and lesser risks outside Syria? how far private capital is prepared to make
big investments in long-term productive commodity-producing sectors. Nevertheless,
as safety values such as external aid and oil revenues reach their limits,
economic health will require that private investment pick up the slack. Arguably,
the investor con? dence this requires will remain limited as long as the state is
seen as arbitrary and unprepared to foster internationally accepted conditions of
capital accumulation. As such, more political liberalisation, putting greater
power over policy in the hands of the bourgeoisie, may be essential to the
success of economic liberalisation.
Conclusions
Syria' s economic liberalisation is rooted in an economic crisis, speci? cally a
` crisis of accumulation' aggravated by the ` overdevelopment' of the state. State
autonomy of the dominant classes was purchased in part through legitimacy
deriving from redistributive and nationalist policies which diverted resources
into consumption and the military, while patrimonial strategies subverted public
sector accumulation. The economic logic of accumulation was subordinated to
the political logic of state formation. This strategy eventually exhausted itself
and forced the regime to tolerate reconstruction of a capitalist class to replace the
state as the main engine of accumulation and to initiate economic liberalisation.
The easing of economic pressures in periods when rent has been plentiful, such
as the early 1990s, has facilitated a strategy of selective liberalisation, but in the
long run the demands of economic rationality are likely to intensify.
Nevertheless neither economics nor class interests have dictated a mechanical
transformation of economic policy any more than patrimonialism has wholly
obstructed such change. In a relatively autonomous regime like Asad' s, elites
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have some scope to decide the balance of liberalisation and statism. They have
incrementally liberalised as they perceived economic opportunities (to mobilise
hidden local or expatriate capital) or as economic pressures (eg foreign exchange
crises) narrowed their choices. They have not, however, decided exclusively
according to an economic logic. Nor does class interest dictate thorough
economic rationalisation for, while the elites' embourgeoisement was paralleled
by increased receptivity to liberalisation, their ability to extract rent through state
controls dilutes their interest in it.
The dominant consideration, in fact, has been regime political interests. These
require a middle way: while long-term durability requires fuller integration into
the world market, short-term stability requires that this be carefully managed,
and defending regime autonomy means preventing any one social force? bourgeoisie
or bureaucracy? from achieving dominance. Behind this defense of
autonomy and reinforcing the incrementalism of liberalisation is, arguably, the
long time-period it takes to overcome communal barriers to the amalgamation of
the old and new bourgeoisies needed to give the regime a stable dominant-class
social base.
Where political/security needs and economic rationality con? ict, the former
are put ? rst, but when there is debate over their compatibility, the extent, pace
and design of liberalisation is shaped by ` bureaucratic politics' . Liberalising
` technos' such as Imadi have championed economic rationality against statist
` politicos' wishing to subordinate it to the patronage interests of regime constituencies
and to restrain inegalitarian consequences of the market likely to fuel
mass discontent. Liberalisers were strengthened in intra-elite politics by the
economic crisis, and by the partial reconstruction and political incorporation of
a bourgeoisie able to offer an alternative to statism; politicos are strengthened in
periods of economic growth and expanded state revenues.
In conclusion, the Syrian case suggests that the state retains more autonomy,
even in a situation of economic crisis, than economic analyses often suggest.
Moreover, there is greater compatibility between state autonomy and economic
rationality than the neo-patrimonial view admits. The assumption that either
capital accumulation or power maximisation must dominate policy is not borne
out, because social forces with an interest in each logic have political access,
while balancing these competing logics is, for the regime, a higher rationality
than the pursuit of one to the total neglect of the other. The balance of political
forces will shape each country' s speci? c? by no means wholly liberal? adaptation
to the global market.
Notes
1 A sophisticated analysis which links economic crisis and policy changes is Huda Hawwa, ` Linkages and
constraints of the Syrian economy' , in Youssef Choueiri, State and Society in Syria and Lebanon, Exeter:
University of Exeter Press, 1993, pp 84?102. An excellent variant of the political approach is Jean Leca,
`Social structure and political stability: comparative evidence from the Algerian, Syrian, and Iraqi cases' , in
Adeed Dawisha & I William Zartman, (eds), Beyond Coercion: The Durability of the Arab State. London:
Croom Helm, 1988, pp 164?202.
263
RAYMOND A HINNEBUSCH
2 See Stephen Heydemann, `The political logic of economic rationality: selective stabilization in Syria' , in
H J Barkey (ed), The Politics of Economic Reform in the Middle East, New York: St Martin' s Press, 1992,
pp 11?37.
3 See the analysis of the state in Raymond A Hinnebusch, Authoritarian Power and State Formation in
Ba` thist Syria: Army, Party and Peasant, Boulder CO: Westview Press, 1990, pp 120?155. For a
complementary analysis of the regime, see Yahya Sadowski, Cadres, Guns and Money: The Eighth Regional
Congress of the Syrian Ba' th, MERIP Reports 134, July?August 1995.
4 Thus, GDP grew at an annual rate of 8.2% in 1970?75 and 6.8% in 1977?80. However, savings covered only
about one half of the investment fuelling this growth; the balance was ? nanced by external aid or borrowing
or de? cit ? nancing. This imbalance was re? ected in public ? nance. For example, in 1976 domestic resources
? nanced only about 62% of public expenditures on government and development, while de? cit ? nancing
(22.5%), external borrowing (8.9%) and Arab transfers (6.6%) covered the balance. Clawson estimates Syria
received $20 billion in civilian aid between 1977 and 1988. These data have been collated from World Bank,
Syrian Arab Republic Development Prospects and Policies, Washington DC, 1980, Vol 2, p 18, Vol 4,
p 48; and Patrick Clawson, Unaffordable Ambitions: Syria' s Military Buildup and Economic Crisis,
Washington, DC: The Washington Institute for Near East Policy, 1989, pp, 14?17, appendixes 4 and 5.
5 At the end of 1986 the mere $144 million in the treasury was enough for only two weeks of imports. GDP
yearly growth dropped to 1.5% from 1980 to 1986 and from 1983 to 1987 was at a negative 2.9% yearly.
Debt as a percentage of GNP rose from 10.8% in 1980 to 25% in 1988. Data on the economic crisis were
compiled from the following sources: World Bank, Syrian Arab Republic, Vol 1; ix; World Bank, World
Development Report 1990, pp 224?25; Clawson, Unaffordable Ambitions, ch 7?8, Table l; Syrian Arab
Republic Central Bureau of Statistics, Statistical Abstract, 1989, pp 490?491, 1991, pp 424, 485; The Middle
East, December 1988, p 27, January 1990, p 24. For data on Syria' s austerity programme, see Heydemann,
`The political logic of economic rationality' , pp 17, 25?31. For a comprehensive analysis of the economic
crisis, see Volker Perthes, ` The Syrian economy in the 1980s' , Middle East Journal, Vol 46, No 1, 1992,
pp 37?58.
6 Volker Perthes, ` The Syrian private industrial and commercial sectors and the state' , International Journal
of Middle East Studies, Vol 24, No 2, 1992, pp 207?230.
7 Patrick Seale, Asad: The Struggle for the Middle East, Berkeley: University of California Press, 1988, p 457.
For other analyses of the relation between state and class see Eberhard Kienle, Entre jama' a et classe: Le
pouvoir politique en Syrie, Ethnizita? t und Gesellschaft, Occasional Papers, Nr 31, Berlin: Verlag Das
Arabische Buch, 1992, and Syed Aziz al-Ahsan, ` Economic policy and class structure in Syria, 1958?80' ,
International Journal of Middle East Studies, 16, 1984. For an interpretation of the class base of the regime
which emphasises the increasing weight of the bourgeoisie in the regime coalition in the 1980s, see Fred
Lawson, `From neo-Ba' th to Ba' th nouveau: Ha? z al-Asad' s second decade' , Journal of South Asian and
Middle East Studies, Vol xiv, No 2, 1990, pp 1?21.
8 Nabil Sukkar, `The crisis of 1986 and Syria' s plan for reform' , in Eberhard Kienle (ed), Contemporary
Syria: Liberalization Between Cold War and Cold Peace, London: Academic Press, 1994, pp 26?43.
9 Austerity measures in the late 1980s produced a current account surplus of $1.222 million in 1988. Growth
rates of 7?8% GNP per year in 1990?93 were fuelled in part by an increase in oil revenues from $500 million
in 1988 to $2.15 billion in 1992 and by a resumption of aid? some $2 billion was promised? by Saudi
Arabia and the Gulf states as a reward for joining the Gulf coalition against Iraq. Economic Intelligence
Unit, Syria: Country Report, 2nd quarter, 1994.
10 The use of economic liberalisation to serve political autonomy is emphasised in Neil Quilliam, ` Syria:
adjusting to the new world order' ,Working Paper, University of Durham Centre for Middle East and Islamic
Studies, 1994; and Isabelle Daneels, ` Syrian foreign policy: between rational actor and regime legitimacy' ,
MA dissertation, University of Durham Centre for Middle East and Islamic Studies, 1994.
11 Discussions, Nabil Sukkar, Damascus, 1994.
12 Dr Mohammed al-Imady, Syria' s Experience in Trade Liberalization and Policies of Economic Reform,
Damascus: The Ministry of Economy and Foreign Trade, 1994, p 3.
13 Economist Intelligence Unit, Syria: Country Report, 1st quarter, 1994, pp 27?28.
14 Imadi, Syria' s Experience in Trade Liberalization, p 14.
15 Interviews, Dr Imadi, Damascus, January 1992, July 1994; also, Dr Muhammed al-Imadi, dawr al-qita`
al-kass wa al-mushtarak ? amaliya al-tanmiya (The roles of the private and joint sectors in the process of
development), Damascus: Ministry of Economy and Foreign Trade, 1986.
16 Tishrin, 4?5 December, 1989.
17 Interview, Ala ad-Din Abdin, Damascus party secretary, January 1992.
18 Interview, Sabah Baqjahji, Minister of State for Planning, January 1992.
19 Unpublished con? dential interviews with public sector managers, 1990.
20. Imadi, Syria' s Experience in Trade Liberalization, p 18.
21 Sylvia Polling, ` Investment Law #10: which future for the private sector?' , in Kienle, Contemporary Syria,
p 20.
264
Contemporary South Asia
EDITORS
Gowher Rizvi, New York, USA
Robert Cassen, Queen Elizabeth House, Oxford, UK
There is a growing realizat ion that South Asia has to be both treated and studied as a
region. Contemporary South Asia does just that. The purpose of the journal is to
cultivat e an awareness that South Asia is more than a sum of its parts: a fact of great
importanc e not only to the states and peoples of the region, but to the world as a
whole. It also address es the major issues facing South Asia from a regiona l and
inte rdiscipl inary perspe ctive.
Contemporary South Asia focuse s on issues concerning the region that are not
circumscribed by the nationa l borders of the states. While nationa l perspe ctives are
not ignored , the journal' s overrid ing purpose is to encour age schola rs within South
Asia and in the global community to search for means (both theoretic al and practica l)
by which our unders tandin g of the presen t problems of cooper ation and
confro ntation in the region can be enhanc ed.
Volume 6, 1997, 3 issues . ISSN 095 8-493 5.
Carfax Publishing Company
PO Box 25 ? Abingdon ? Oxfordshire OX14 3UE ? UK
Tel: +44 (0)1235 521154 ? Fax: +44 (0)1235 401550
E-mail: sales@carfax.co.uk ? WWW: http://www.carfax.co.uk
ECONOMIC LIBERALISATION IN SYRIA
22 Ibid., p 22.
23 The Middle East, September 1991, pp 20?22.
24 Unpublished con? dential interviews with public sector managers, 1990.
25 Economic Intelligence Unit, Syria: Country Report, 2nd quarter, 1994, p 3; Syrian Arab Republic Central
Bureau of Statistics, Statistical Abstract, 1993, p 503; Polling, ` Investment Law #10' , p 14; Eberhard Kienle,
`The return of politics? Scenarios for Syria' s second In? tah' , in Kienle, Contemporary Syria, pp 120?128;
unpublished economic analyses, US Embassy, Damascus, 1994; Belgian Embassy, Damascus, 1994; and
United Nations, World Economic and Social Survey 1996, New York, 1996.
26 The current account surplus of $1762 million in 1990 had become a de? cit of about $360 million in 1993
and was projected to double in 1994. Economic Intelligence Unit, Syria: Country Report, 2nd quarter, 1994,
pp 3, 6.
265

Posted by maximpost at 11:03 PM EST
Permalink


>> OUR FRIENDS FT.COM ON EU WATCH...

'Mess, what mess?' asks chummy troika
By Hugh Williamson in Berlin
Published: February 18 2004 19:37 | Last Updated: February 18 2004 19:37


To an innocent observer, the mood in Gerhard Schr?der's chancellery on Wednesday afternoon appeared more a cosy-fireside-chat than a European-summit.
Seated at a UN Security Council-style round table, Mr Schr?der opened the main session by greeting his guests simply as Tony and Jacques.
Tony also appeared in a relaxed mood, on first name terms with Gerhard and Jacques, while Jacques Chirac, perhaps significantly, switched between Gerd and Tony Blair (was this Jacques' sign of how far the new trilateral spirit really goes?).
So, the three leaders appeared determined to play up the informality of their gathering, and play down the threat it posed to anyone else.
"Fuss, what fuss?" was the motto (or, to paraphrase Silvio, their Italian friend, "mess, what mess?"). Gerd explained the aim was to exchange information in order to help Europe along on mundane things such as job schemes and pensions. "It's not more than that, just to make that clear," he stressed.
Tony argued that finding solutions to common problems between the three "would be a great solution for all other EU countries".
Jacques said it was "completely normal that countries that produce over 50 per cent of the EU's GDP should come together to find common ground".
But the leaders were their usual divergent selves when it came to highlighting the priorities. While Tony made his usual effort to square the circle between the need for both social justice and market liberalisation, Jacques was brimming over with grand EU-wide economic projects and greater European solidarity to beat off international competitors (who could he mean?).
One group of politicians appeared a little lost - the four cabinet ministers (or their deputies) that Tony, Gerd and Jacques had each brought along. This was the first time in five such three-way summits that they had been invited.
A spokeswoman for the German health ministry tried gallantly to explain that the big topics, such as the EU constitution and Iraq, were of course linked to the concerns of her minister, so of course it made sense for her minister to take part. "In Europe, everything is connected to everything else," she said. Tell that to Silvio.

--------------------------------------------
Europe's big three set out plans for reforms
By Bertrand Benoit, Ben Hall and Jo Johnson in Berlin
Published: February 18 2004 20:50 | Last Updated: February 18 2004 20:50
Germany, France and Britain have set out a joint programme calling for renewed economic reforms in Europe.
The proposals were drawn up on Wednesday at a summit in Berlin that sought to establish unprecedented co-operation among the European Union's biggest economies. In a letter to their European Union partners, Jacques Chirac, president of France, Gerhard Schr?der, German chancellor and Tony Blair, British prime minister outlined proposals on globalisation and demographic and technological change.
As well as stressing the need for more investment in research, higher education and training, the leaders called for the appointment of a vice-president of the European Commission to act as economics minister for Europe.
The three brushed aside criticism from Italy and other EU states that have claimed the three countries were seeking to establish a directoire that would attempt to impose its own agenda on EU affairs. "This is not about trying to dominate anyone, let alone Europe," Mr Schr?der said. "I will brief the Irish presidency of the EU to make it clear that our discussions have taken place in an open and transparent way."
But national interests were never far from the surface, despite claims that the summit could re-invigorate the Lisbon reform agenda agreed on in 2000 with the aim of making Europe the world's competitive economic area by 2010.
Mr Chirac trumpeted the fact that he had extracted a commitment from Mr Schr?der to support lowering the value added tax on sit-down restaurant meals in 2006, a French proposal that Germany had been blocking.
The impression of a fait accompli appeared to undermine the "big three's" insistence that they were acting solely in the common interest. With elections due in France next month, Mr Chirac can now claim to be honouring a key electoral pledge.
One British official said the VAT reduction had not been discussed in the plenary session that preceded the leaders' informal dinner, suggesting a bilateral agreement between the French and German leaders.
But despite the hugs, "lieber Tonys" and "cher Gerhards", deeper differences among the three countries' objectives emerged during the afternoon. Mr Chirac called on EU competition authorities to show more flexibility to allow Europe to create industrial champions, a term that disappeared from British political discourse in the 1970s.
One British participant described Mr Chirac's words as "a little reassurance for the domestic French audience" worried about market liberalisation.
Mr Blair said the three had "come together after a very difficult period in international relations" following differences over Iraq. They had worked for the benefit of the whole world to persuade Iran to open its nuclear research to scrutiny.
But Mr Chirac rejected as inappropriate suggestions that trilateral meetings could replace the special relationship between France and Germany. "It's an intense relationship", that was "deep and almost daily" and "not something you can export in the short term," he said.
-----------------------------------------------------
>> AHEM IN URDU...

Pakistan denies nuclear scientist had heart attack
ISLAMABAD - Government officials yesterday denied reports that Dr Abdul Qadeer Khan, the disgraced architect of Pakistan's nuclear programme, has had a heart attack.
A front-page report in the respected English daily, Dawn, quoted sources at the Khan Research Laboratories hospital as saying that a heart specialist and a cardiac machine were secretly sent to Dr Khan's house on Jan 8.
It claimed Dr Khan had been suffering from pain in his left hand since being questioned by an intelligence agency for his involvement in transferring nuclear technology to Iran, North Korea and Libya.
The report said Dr Khan had suffered a heart attack and his condition was 'stated to be critical' when he was treated.
However, Pakistan's Foreign Ministry denied the report and said Dr Khan was in good health.
'This is fabrication. He is in good health and the report that he suffered a heart attack is baseless,' Foreign Ministry spokesman Masood Khan said.
Dr Khan's personal physician, Dr Shafiqur Rehman, said he last visited the scientist at his residence at the end of January when he found him in 'poor health'.
'He has a history of hypertension and I had been visiting him regularly until I was stopped by the authorities on Feb 4 after the last visit,' the doctor said.
Dr Khan publicly confessed on Feb 4 to transferring nuclear technology abroad and begged for clemency.
President Pervez Musharraf had given him a conditional pardon. Since then, the authorities have imposed strict restrictions on his movement and tightened security around his residence in Islamabad.
Officials have said that investigations into the proliferation scandal were continuing. -- AFP
-----------------------------------------------------

Paper trail links 'arms dealer' to Abdullah's son
KUALA LUMPUR -- A Sri Lankan accused of being the chief financial officer for an international nuclear black market sat on the board of a company owned by the Malaysian Prime Minister's only son, according to documents obtained by The Associated Press.
The connection indicates that alleged senior members of the network established by Dr Abdul Qadeer Khan, the father of Pakistan's nuclear bomb, were able to woo partners in the highest levels of society.
In the Malaysian case, the partners said they had no idea deals were being made to fashion parts that could be used to make nuclear weapons.
The documents, obtained by AP via searches of publicly accessible files, reveal a paper trail through privately held and publicly listed companies that outlines ties between the Prime Minister's son, Mr Kamaluddin Abdullah, and the Sri Lankan, Mr Buhary Syed Abu Tahir, as well as his Malaysian wife.
The documents show that the men were top executives at Kaspadu Sdn Bhd when Mr Tahir negotiated a deal for a company linked to Kaspadu, Scomi Precision Engineering, to build components that Western intelligence agencies allege were for use in Libya's nuclear programme.
US President George W. Bush last week called Mr Tahir the 'chief financial officer and money launderer' of the black market network led by Dr Khan, who has admitted selling nuclear technology and know-how to Iran, North Korea and Libya.
Mr Kamaluddin's company, the Scomi Group, previously acknowledged that its subsidiary Scomi Precision Engineering fulfilled a contract for machine parts that was negotiated by Mr Tahir.
Non-proliferation authorities say the parts were for centrifuges - sophisticated machines that can be used to enrich uranium for weapons and other purposes - but Scomi says it did not know what the parts were to be used for.
Ms Rohaida Badaruddin, a Scomi spokesman, confirmed on Tuesday that Mr Tahir was a Kaspadu director until early last year, and said it was likely Mr Kamaluddin encountered Mr Tahir at business meetings.
She added that Mr Kamaluddin was 'shocked and surprised' to learn late last year of Mr Tahir's alleged role in the nuclear network and broke ties with the Sri Lankan -- including asking Mr Tahir's wife, Nazimah Syed Majid, to sell her shares in Kaspadu.
Mr Kamaluddin has not spoken publicly about the matter and was not available for comment on Tuesday. A security guard at the house listed on company documents as his residence told AP it was owned by Prime Minister Abdullah Ahmad Badawi, but that nobody lives there now.
Police say they have interviewed the Mr Tahir but he is not in custody because he has not committed any crime in Malaysia.
Mr Abdullah took office last October and was deputy prime minister at the time of the business dealings between his son and the Sri Lankan.
The revelations of deeper links between Mr Tahir and Mr Kamaluddin come as Malaysian officials complain that the country has been unfairly singled out by Washington for its role in the nuclear black market. -- AP
http://straitstimes.asia1.com.sg/latest/story/0,4390,235850,00.html?

---------------------------------------------------------------------

Malaysian minister in corruption probe resigns
KUALA LUMPUR - A Malaysian minister has resigned after being charged with an illegal share deal, falling victim to a major anti-corruption campaign launched by new Prime Minister Abdullah Ahmad Badawi.
Kasitah was charged with two counts of corruption involving the sale of shares valued up to RM40 million (US$10.5 million) in a plantation company.
Kasitah Gaddam, the land and cooperative development minister, handed in his resignation on Tuesday just before Mr Abdullah left on an official visit to Iran, the Premier told journalists travelling with him.
Kasitah is the highest-ranking official to fall under the anti-corruption drive Mr Abdullah launched after taking office on Oct 31 from the long-serving Dr Mahathir Mohamad, who was frequently accused of allowing corruption to spread during his 22-year rule.
Kasitah was charged last Thursday with two counts of corruption involving the sale of shares valued up to RM40 million (US$10.5 million) in a plantation company held by the Sabah Land Development Board, which he chairs.
Mr Abdullah told journalists that the disgraced minister, who is free on RM1 million (US$262,000) bail, left office to concentrate on the case. He has pleaded innocent and demanded his right to trial. -- AP
--------------------------------------------------------
>> WHY NOW?


Disarming the nuclear Brahmins
By SUNANDA K. DATTA-RAY
FOR THE STRAITS TIMES
THE commendable raft of anti-proliferation measures that United States President George W. Bush announced in the wake of the Pakistani scandal would be more effective if the five nuclear Brahmins in the global caste system also demonstrated respect for their legal and moral obligation to disarm under Article VI of the Nuclear Non-Proliferation Treaty (NPT).
The nuclear black market flourishes because rulers covet the bomb for political rather than military reasons. It looms large in their consciousness as a symbol of unity, determination and self-respect: the ultimate circus in lieu of bread.
Given the jungle values of our civilisation, a nation with the power of annihilation is regarded as more important than one without it. Tragically, realpolitik does nothing to correct such perverse thinking.
The very fact that the only permanent members of the United Nations Security Council are also the only acknowledged nuclear states, and that the US, with the deadliest arsenal of all, sets the global agenda, further identifies might with right in the eyes of many developing nations.
They suspect the nuclear haves of using institutions and systems like the UN, the International Atomic Energy Agency (IAEA), Nuclear Suppliers Group, Missile Technology Control Regime, dual-use technology restrictions, export controls and sophisticated monitoring to keep the have-nots in permanent deprivation. They also see India, Pakistan and Israel getting away with it. Scoldings and pleadings cannot wish away this evidence.
What The New York Times called the 'elaborate charade' of the televised confession and pardon of Dr Abdul Qadeer Khan, Pakistan's 'larger-than-life national hero', citing President Pervez Musharraf, strengthens scepticism.
Pakistan's nuclear programme has been no secret since 1972 when former prime minister Zulfiqar Ali Bhutto famously vowed to eat grass to build the bomb. It was his response to defeat in the Bangladesh war.
Addressing posterity from his death cell in 1979, Mr Bhutto made two significant points about his nuclear programme. He acknowledged Chinese assistance, claiming Pakistan's 1976 agreement with China as his 'greatest achievement and contribution to the survival of (his) people and nation'.
And he vigorously defended an 'Islamic bomb' - 'We know that Israel and South Africa have full nuclear capability. The Christian, Jewish and Hindu civilisations have this capability. The communist powers also possess it. Only the Islamic civilisation was without it, but that position was about to change'.
IAEA chief Mohamed El Baradei believes the controversy over Dr Khan is only the tip of the iceberg. Most of the facts were already well-known. There were early thefts of nuclear secrets from the Netherlands, Britain, Canada and the US. Iranian and Pakistani scientists (including Dr Khan) collaborated openly.
TEACH BY EXAMPLE
TRANSFERS of Chinese nuclear technology and equipment and Taiwanese interceptions of North Korean missile shipments have both been reported. So has Libyan leader Muammar Gaddafi's US$50 million (S$84 million) expenditure on the technology. The Carnegie Endowment for International Peace claims that Pakistan obtained its first atomic weapon in 1986.
But the Reagan and first Bush administrations suppressed the evidence collected by the US Central Intelligence Agency so long as Pakistan was needed to organise the Afghan mujahideen, including Osama bin Laden. It was only after the Soviets left Afghanistan that then president George Bush Senior refused in 1990 to certify that Pakistan did not possess a nuclear device, a condition for continued aid.
Rogue states and terrorists cannot have failed to note this subordination of proliferation requirements to US strategic imperatives. Supporting Mr George W. Bush's call for stricter vigilance, Mr El Baradei now seeks a more objective effort to prevent proliferation. He wants a strengthened NPT, resumed negotiations on a Fissile Materials Control Treaty, enforcement of the Comprehensive Nuclear Test Ban Treaty and a road map for disarmament.
Article VI of the NPT, which the International Court of Justice has upheld, already demands 'general and complete disarmament under strict and effective international control' and calls on signatories 'to make progressive efforts to reduce nuclear weapons globally with the ultimate aim of eliminating those weapons'. In 1996, the UN's Group of 21 (developing countries) voted for an ad hoc committee on nuclear disarmament in terms of the original Geneva conference. It was shot down.
It is time to revive that initiative. Example remains the best teacher. We need some salutary move by the Big Five to demonstrate that rogue states and terrorists alone are not expected to make the world a safer place for us all.
The writer is a senior research fellow at the Institute of South-east Asian Studies. The views expressed here are his own.
--------------------------------------------------------

>> THEN AGAIN...

Old ICBMs, Old Thinking
http://www.themoscowtimes.com/stories/2004/02/17/009.html
By Pavel Felgenhauer
The Russian military has begun a strategic exercise heralded as the biggest since Soviet times. Nuclear intercontinental ballistic missiles will be fired from land and from a nuclear submarine in the Barents Sea; strategic bombers will fly simulated combat missions and fire long-range cruise missiles; Army, Air Force, Navy and airborne conventional forces will also be involved.
is expected that President Vladimir Putin will travel the several hundred meters from the Kremlin to the General Staff and Defense Ministry building on Arbatskaya Ploshchad. There, from the crisis room of the armed forces' central command post, Putin will personally authorize the launch of one or more nuclear ICBMs at Russia's potential "enemies." The exercises will end in a resounding victory that will repel the "aggressors." Footage of Putin at the helm as commander-in-chief may well be used as electioneering fodder.
The war game is very Soviet in style and content, acting out a possible confrontation with the United States and its allies. Putin constantly states that Russia has chosen the path of democracy and market economic reforms, so why spend money preparing to fight a nuclear war with Western democracies and why suddenly this year? Does it reflect a sudden deterioration in relations with the West?
In fact, similar strategic exercises have been held year after year. The need to test-fire ICBMs is technical and does not in itself reflect anything.
The nuclear forces are armed with very old ICBMs: Some have been in service in underground silos for over 27 years. Russia officially has 728 land-based and 472 sea-based ICBMs. New land-based SS-27 (Topol-M) ICBMs are produced at a rate of approximately six per year. An undisclosed number of older-version SS-25 (Topol) and sea-based ICBMs has also been produced recently, but informed sources say no more than 10 to 20 per year.
The number of ICBM replacements is inadequate. Each year the ICBM inventory is getting older and older. The life span of most Russian ICBMs, as guaranteed by their producers, has long expired.
To ensure that the nuclear strategic deterrent is still credible, each year some of the oldest ICBMs need to be test-fired to show the world that they can still fly and hit their target. Last year, an 18-year-old land-mobile SS-25 was successfully launched from the Mirny launch pad in the north, near Plesetsk. The dummy warhead successfully hit its target at the Kamchatka missile-receiving facility.
A 27-year-old SS-18 and an SS-19 were extracted from silos, transported to Kazakhstan and launched in the direction of Kamchatka from silos at the Baikonur space center. (Russia does not launch liquid-fuel ICBMs from silos on its territory because debris containing highly poisonous "geptil" fuel may fall on populated areas.)
If a test firing of an aging ICBM is successful, the warranted life span of all the other ICBMs of the same class is extended by a year. Typically, one of the oldest ICBMs of a class is launched each year. If the launch fails or there are serious problems, it is repeated. Every year, the test should be repeated in any case.
The current test-firing routine began in the 1990s. In Soviet times, aging ICBMs were simply replaced by new ones, and the test pads at Mirny and Baikonur were busy testing new missiles. Sometime in 1994, a military chief told me that since they had to fire the ICBMs anyway and spend the money, they decided to organize a strategic exercise with a simulated nuclear war, in which they would test submarine ICBMs and cruise missiles.
That is how it has been now for a decade. In 1996, an election year, Boris Yeltsin used the occasion to pose as commander-in-chief in the crisis room at Arbatskaya Ploshchad. This year Putin may do the same thing. This year's exercise will also have the staffs of conventional forces simulating war activities, but not many real soldiers will be involved.
The main point of the exercise is to test aging ICBMs and bombers and the war-game scenario is also antiquated, involving the West (the United States) as the potential foe.
The military is caught in a time warp: Its hardware is old, its strategic ideas are outdated, it does not want to change nor does it seem able to -- irrespective of what happens politically in Russia or the world.
Now Putin has announced that some SS-19s will be in operation until 2030 and that they will be test-firing them each year. It's not a good omen.
Pavel Felgenhauer is an independent defense analyst.
-------------------------------------------------------------
http://www.themoscowtimes.com/stories/2004/02/17/012.html

President Takes a Submarine Ride
By Simon Saradzhyan
Staff Writer
Itar-Tass / Reuters
Putin, flanked by Ivanov and Navy commander Admiral Vladimir Kuroyedov, walking on a pier in Severomorsk on Monday evening.
President Vladimir Putin boarded a Northern Fleet submarine Monday to observe first-hand ongoing nuclear war games that are to culminate this week with the flights of strategic bombers and launches of ballistic missiles.
Putin arrived at the fleet's headquarters in Severomorsk on Monday evening and shortly afterward was shown on television boarding the Arkhangelsk ballistic missile nuclear-powered submarine. The president, wearing a heavy naval coat and cap, was accompanied by Defense Minister Sergei Ivanov, who is commanding the strategic exercises.
The Akula-class submarine, which is armed 20 RSM-52 ballistic missiles along with other armaments, was then towed away from the dock with Putin on board, Interfax reported.
Putin was to stay on board until Tuesday afternoon to observe the launches of missiles in the Barents Sea, Rossia television reported.
The launches are part of military exercises that have been under way since late January and entered what the Defense Ministry described as the active stage Monday evening.
In addition to Northern Fleet submarines, Russia's only aircraft carrier -- the Admiral Kuznetsov -- also put out to sea to participate in the exercises Monday, Interfax reported. The carrier had been docked at a Northern Fleet base for four years.
Virtually all branches of the country's armed forces are participating in the war games, including the Navy, Air Force, Strategic Missile Forces, Airborne Troops and Army, national news agencies reported.
This week, at least two ballistic missiles will be test-fired across the country, two satellites will be launched and more than a dozen long-range Tu-160 bombers will take part in sorties that include the firing of cruise missiles over the Atlantic Ocean, according to local media reports.
Among other maneuvers, units of the Siberian Military District and the Volga-Urals Military District are being deployed westward, while airborne units are being dispatched by air and rail to unspecified destinations.
In April 2000, Putin boarded a Northern Fleet submarine, the Delfin-class Karelia, to watch the launch of a ballistic missile. A month earlier, he flew in a two-seat Sukhoi jet over Chechnya in what some observers called a ploy to boost his popularity.
Putin, who is widely expected to win the presidential election next month, told a gathering of his campaign activists in Moscow on Thursday that war games are important as they allow the world "to conceive our military might as an element of strategic security."
A senior military commander told reporters last week that the exercises are not aimed against the United States. He conceded, however, that they were prompted in part by Russia's concern about the United States' development of low-yield nuclear weapons.
He also said the war games will help to develop defense systems "capable of providing an asymmetric answer to existing and prospective weapons systems, including missile defense."
-----------------------------------------------------------
>> THEN AGAIN...

Navy Again Fails to Launch Missile in Exercises
By Vladimir Isachenkov
The Associated Press
Mikhail Metzel / AP

>> VLAD WITH TOY...
http://www.themoscowtimes.com/stories/2004/02/19/011.html
Putin holding a model rocket after Wednesday's launch at the Plesetsk Cosmodrome.


In a new blow to military prestige, the Navy failed for the second consecutive day Wednesday to launch a ballistic missile from a Northern Fleet submarine during maneuvers attended by President Vladimir Putin.
But Putin pronounced the strategic nuclear exercises -- the largest in more than 20 years -- a success and said they would facilitate the deployment of a new generation of strategic weapons.
"The experiments conducted during these maneuvers, the experiments that were completed successfully, have proven that state-of-the art technical complexes will enter service with the Russian Strategic Missile Forces in the near future," Putin said after watching the launch of a military satellite from the Plesetsk Cosmodrome in northern Russia, which was part of the massive exercises.
The new weapons will be "capable of hitting targets continents away with hypersonic speed, high precision and the ability of wide maneuver," Putin said, adding that the new weapons -- unparalleled in the world -- would "reliably ensure Russia's strategic security for a long historical perspective."
Putin insisted that the designing of new weapons was not directed against the United States. "Modern Russia has no imperial ambitions or hegemonist strivings," he said.
Russia is continuing research in missile defense systems, and may build a new missile shield in the future, Putin said. Russia currently has a missile defense system protecting Moscow that was designed in the 1970s.
Despite the ambitious statement by Putin, the exercises he attended were tarnished by the Navy's failure on two consecutive days to launch missiles from nuclear submarines.
The Navy on Wednesday sent a Northern Fleet nuclear submarine to repeat Tuesday's unsuccessful launch -- only to fail again.
The missile launched from the Karelia submarine started erring from its designated flight path 98 seconds after the launch and was blown up by its self-liquidation system, Navy spokesman Captain Igor Dygalo said.
No one was hurt, he said in a telephone interview.
An official investigation has begun.
Some Russian media described the Navy's attempt on Wednesday as an effort to rehabilitate itself after the previous day's failure.
Putin went to the Barents Sea on board the giant Arkhangelsk nuclear submarine to observe that missile launch firsthand. But the launch from the Novomoskovsk submarine, which military officials had announced in advance, and which was described on the front page of Tuesday's official military daily, Krasnaya Zvezda or Red Star, did not take place.
Russian officials and media made conflicting statements about the reason for the failure. The naval chief, Admiral Vladimir Kuroyedov, ended up saying Tuesday that the Navy had never planned a real launch and successfully conducted what he described as a simulated one.
Many Russian newspapers, however, assailed what they described as a clumsy cover-up of Tuesday's failed launch, saying that Kuroyedov's statement resembled official lies about the August 2000 sinking of the Kursk nuclear submarine in the Barents Sea, which killed all 118 aboard and badly dented the Navy's prestige.
"Apparently they decided not to smear President Vladimir Putin's participation in the exercise with negative information," Kommersant said.
The exercises are widely seen as part of campaign efforts in the run-up to the March 14 presidential election aimed at playing up Putin's image as a leader bent on restoring Russia's military power and global clout.
Putin, who is expected to easily win the election, swapped the naval officer's garb he wore on the submarine for the green uniform of an officer of the Strategic Missile Forces on his visit Wednesday to the Plesetsk launch pad.
While there he watched the successful launch of the Molnia-M booster rocket, which carried a Kosmos military satellite into orbit. He also viewed the trouble-free liftoff of an RS-18 ballistic missile from the Baikonur Cosmodrome, which Russia leases from Kazakhstan, via video hookup.
State-run television channels, which are lavishly covering the daily activities of Putin, ran footage of the president watching the launches and congratulating officers in Plesetsk, but kept mum about the failed launches.


? Copyright 2002, The Moscow Times. All Rights Reserved.

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>> RUSSIA FILES CONTINUED...

Study Triples Oil's Share of GDP

By Alex Fak
Staff Writer The economy is nearly three times more dependent on oil and gas than official statistics indicate, making the country much more vulnerable to oil price swings than previously thought, the World Bank said Wednesday.
The State Statistics Committee doesn't properly account for the tax avoidance schemes used by oil and gas companies, the bank concluded in its annual report on the Russian economy. But if it did, the numbers would show that oil and gas accounts not for 9 percent of gross domestic product, but 25 percent, and that services account for just 35 percent of GDP, not 55 percent.
Russia's purported shift to a service-driven economy is "mythical," said Christof RЯhl, the World Bank's chief economist for Russia and the author of the report. "The government shouldn't expect services to take the lead in economic growth."
RЯhl said he recalculated official figures to negate the affect of transfer pricing -- when an oil or gas company sells to a trading affiliate at knock-down prices to minimize profit taxes.
The new figures show that the oil and gas sector, despite employing less than 1 percent of the workforce, makes up half of all industrial production. Transfer pricing also artificially inflates the services sector, a major component of which is trade. Oil and gas production is statistically disguised as trade when producers sell to affiliated traders who turn around and sell abroad at an enormous profit, with the difference considered "value added" in the services sector.
"Recent productivity gains in services remain very limited, compared to industrial productivity, and this holds in particular for the very low-productivity (but growing) non-market services," the report said.
This non-market, or public, services sector also depends on subsidies, which in turn depend on oil prices, he added.
The government has moved to close transfer-pricing loopholes, but that's no guarantee that the practice will not continue, he said.
That the economy is over-reliant on oil is not disputed -- oil and other natural resources account for 80 percent of all exports, and taxes on the oil and gas sector generates two-fifths of all government revenues. And a forthcoming study by Peter Westin, chief economist at investment bank Aton, found that the oil and gas sector accounts for up to 30 percent of GDP if measured by world prices. The State Statistics Committee uses domestic prices, which are much lower, in its calculations.
International debt rating agencies Standard and Poor's and Fitch consistently cite Russia's vulnerability to oil price swings among their reasons for not raising Russian debt to investment grade.
"This has always been the same [and] you cannot overcome this dependence in the short run," said Yevgeny Gavrilenkov, chief economist at Troika Dialog. When oil prices collapsed in the 1980s, the Soviet Union was forced to borrow massive sums abroad, which contributed to the collapse of the country, he said.
The World Bank report, however, highlights just how deep this dependency runs. Officially, the economy grew 7.2 percent last year, but if oil prices had not been unusually high, the growth would have been more like 4 percent, RЯhl said.
"Since 1991, the economy hasn't grown more than 5 percent without oil prices being high," he said.
Some economists took issue with the World Bank's findings.
Al Breach of Brunswick UBS, for example, said the 25 percent figure for the oil and gas sector's share of the economy "seems very high," even when export prices are taken into account.
Other economists, however, said the World Bank's number-crunching demonstrated with figures what many already believed.
Troika's Gavrilenkov said most economists ignore official GDP sector statistics in favor of other indicators, such as the balance of payment figures.
"Economic statistics are like a bikini: what they reveal is important, but what they conceal is vital," Gavrilenkov quipped.
Some economists also took issue with RЯhl's claim that it is a "myth" that a structural shift in the economy to the services sector is occurring.
Aton's Westin, for example, said many services that could not possibly be inflated by transfer pricing, such as telecoms, have grown as much as 400 percent in the last five years.
In addition, the comparatively small role that the services sector plays in the economy is more a sign of development than a drag on growth, said Natalya Orlova, senior economist at Alfa Bank.
Developed economies are generally two-third services and one-third industry, she said.
Orlova said services actually account for as much as 50 percent of the economy, not the 35 percent the World Bank claims. But either way, she said, any increase would indicate "a faster transition to the developed stage."


? Copyright 2002, The Moscow Times. All Rights Reserved.
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Gazprom Cuts Supplies to Europe

By Catherine Belton and Valeria Korchagina
Staff Writers Gazprom took the unprecedented step Wednesday of cutting all gas supplies to Belarus and via its territory to Germany and Poland, a hardball move in a conflict over prices and pipelines that is likely to seriously rock relations between Moscow and Minsk.
Gazprom said it was forced to block the Belarus transit route because Belarus had started siphoning off gas from its export pipeline into Europe. The alleged theft came after Minsk failed to clinch a new deal on gaining its own domestic supplies amid an escalating price dispute with Gazprom.
Gazprom supplies one quarter of all Europe's gas needs. About 17 percent of that amount, or 22 billion to 24 billion cubic meters, is supplied via Belarus. Poland has enough stored gas and alternative supply sources to keep going without any problems for several weeks, while Germany has enough for many months, analysts said.
Gazprom said it could compensate for the loss by using reserve capacity in its pipelines into Europe via Ukraine, but only partly. It would not specify how much.
"Belarus began siphoning off gas from transit pipelines. There is no longer any gas going into Belarus, or to Germany or Poland via Belarussian territory," Gazprom spokesman Sergei Kupriyanov said Wednesday evening.
He said the gas was cut off at 6 p.m. and could not say when it would be switched back on.
"We are in a very complicated situation that has been totally provoked by Belarus because it will not enter into normal, transparent relations for the transit of gas. The situation is very unpleasant. But it is just impossible to supply more gas via Belarus."
Gazprom released a statement a few minutes later blaming Belarus for having to break its contracts with its European partners. "Responsibility for Gazprom's breach of contract with its foreign consumers lies fully on the Belarussian side," it said.
Gazprom could face fines and penalties from its clients if it fails to deliver volumes promised in long-term contracts, but analysts said the buyers were not likely to take action against Gazprom for some time and were likely to side with Russia in blaming Belarus.
A spokesman for Ruhrgas, the German gas giant that is one of Gazprom's major clients and a shareholder in the company, said it was not affected yet by Wednesday's cutoff.
"At this point we are not concerned. We get over 90 percent of our Russian gas supplies through the route that goes through Ukraine," the spokesman, who spoke on condition of anonymity, said by telephone from Essen, Germany.
He added that he could not comment on Russia's relations with Belarus.
The Belarussian government held an urgent meeting to discuss the gas-supply interruption, Channel One television reported.
A spokeswoman for Belarussian President Alexander Lukashenko said by telephone from Minsk that the government had no immediate comment.
A representative of the Russia-Belarus Union, however, lashed out at the decision as blackmail.
"This is political and economic blackmail capable of dealing a serious blow to relations between Russia and Belarus and to the building of our union," said Alexei Vaganov, the deputy head of the Russian-Belarussian parliament's budget committee, Interfax reported.
Minsk residents on Wednesday night were not aware of Gazprom's decision and the threat of a looming gas shortage, Channel One said.
A Belarussian gas official insisted that households would not suffer. "People have absolutely nothing to worry about. ... We will match demand in full," Vitaly Khlopenyuk, the head the gas supplies department of Minskgaz, a local gas distribution company, told Channel One.
"But, yes, many industrial enterprises could get cut off," he added.
Belarus only has enough gas in storage to last 10 days without new supplies, and 15 to 20 days if it makes energy cutbacks -- leaving it no choice but to find a compromise with Gazprom, said Valery Nesterov, oil and gas analyst at Troika Dialog.
"I am sure this will be resolved in less than a week, because otherwise there will be a political scandal and Belarus' neighbors in Poland and Germany will start to put international pressure on Lukashenko as well, " Nesterov said.
"Gazprom also is not interested in this conflict going for a long time. It has promised stable supplies to its European partners," he said. "This is a measure to make sure Belarus understands the seriousness of [Gazprom's] intentions."
But Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies, said the standoff may have already provoked new doubts about the stability of Russian gas supplies.
"The really bad thing about the whole episode is that now there is huge doubt in the minds of everyone as to whether [Russia's] transit countries can be trusted," Stern said.
"Now that Belarus has been found to be up to the same as Ukraine, that's very serious. If there is no stability between Russia and the transit country, there is a question about the security of supplies. We had hoped relations had stabilized."
Most of Gazprom's shipments to Europe go via Ukraine. But Gazprom started shifting some supplies via Belarus by building the Yamal-Europe pipeline several years ago, a move that came as an attempt to ensure stable supplies at a time when Gazprom was accusing Ukraine of siphoning off gas.
Nesterov said Germany has enough underground storages and alternative suppliers in Denmark, Norway, the Netherlands and Britain. It receives 35 bcm of gas from Gazprom, almost 40 percent of its total gas supplies, and most of that is through Ukraine, he said.
Poland, however, could have more difficulties. Gazprom supplies 7.4 bcm per year -- nearly 80 percent of its annual needs -- and most of that amount goes through Belarus, Nesterov said. The alternative suppliers for Poland are Ukraine and Germany, and both of those countries currently supply only a small amount.
"Poland is probably the most serious case," Stern said. "If this lasts a few more weeks and the weather stays cold, then it could get serious."
Gazprom stopped shipping gas to Belarus in January after Minsk refused to agree to a price hike from $30 per thousand cubic meters last year to $50 per thousand cubic meters, an increase that would have drawn the tariff in line with domestic Russian prices.
In the meantime, independent suppliers Trans Nafta and Itera moved to fill the gap, agreeing to supply gas at $46.60 per thousand cubic meters. But neither supplier can fully meet Belarus' annual gas needs, and each signed a series of short-term contracts. Last year Belarus imported 18.5 bcm, 10.2 bcm of which came from Gazprom.
The gas standoff escalated Wednesday when Belarus' only remaining supply contract, with Trans Nafta, expired at 10 a.m. and the two sides were unable to reach agreement on the next contract. This left Belarus without any new source of supplies and Gazprom with an excuse to turn off the pipeline.
Kupriyanov, the Gazprom spokesman, said his company believes Minsk started to siphon off gas from its export pipeline in exact proportion to the amount it lost in the Trans Nafta contract.
The conflict also centers around the possible sale of Belarus' pipeline company, Beltransgaz, to Gazprom. In an intergovernment agreement signed last year, Russia and Belarus decided that Gazprom would set up a joint venture to run Beltransgaz in return for keeping Belarus' gas prices at the same level as domestic Russian prices.
That deal, however, stalled because the two sides failed to agree on a price. Belarus values Beltransgaz at $5 billion, while Gazprom values it at $600 million.

? Copyright 2002, The Moscow Times. All Rights Reserved.

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Ministry: Oil Exports to Asia to Rise Tenfold

Bloomberg Russia, the world's biggest oil supplier after Saudi Arabia, expects to raise crude exports to the Asian-Pacific region tenfold by 2020 as the country plans to tap oil and gas fields in eastern Siberia and the Far East.
The government will increase oil exports to the region so that they comprise a third of shipments abroad in 2020, when the country expects to supply as much as 310 million tons per year (6.2 million barrels per day) to world markets, the Natural Resources Ministry said in a statement e-mailed to news services Wednesday.
The country plans to explore new fields and produce 80 million tons of oil per year in 2020 in eastern Siberia, the ministry said.
Output from the Sakhalin Island shelf off the Pacific coast is expected to rise to as much as 26 million tons per year by 2010 and change little over the ensuing decade.
In August the government said it expects oil output will rise as much as 24 percent by 2020 to 520 million tons, compared with 2003.
Gazprom, the world's largest natural gas producer; Transneft, the country's oil pipeline monopoly; Rosneft, the largest state-owned oil producer; BP venture TNK-BP and Surgutneftegaz are discussing with the ministry plans to develop fields in eastern Russia that may hold at least 2.4 billion tons of oil and 9.4 trillion cubic meters of gas reserves.
Russia expects the Asian-Pacific region to receive 15 percent of its gas exports in 2020, when the country's total gas shipments abroad may reach as much as 280 billion cubic meters. The country does not ship gas to the region now.
The government plans to raise gas production by 13 percent to 700 billion cubic meters in 2020, up from 617 billion cubic meters extracted in 2003.
The Energy, Economic Development and Trade, and Natural Resources ministries regulate the development of oil and gas resources and review proposals to build new pipelines to export the fuels.
Asian refiners, especially in energy-starved China, are boosting purchases of Russian crude oil as declining demand in Europe makes the oil cheaper than competing grades from the Middle East.
Asian refiners have bought as much as 2 million barrels of Russia's Urals crude oil for loading in March, the first Russian cargoes to be shipped to the region in more than four months, according to a survey of six trading companies in Asia.
The price of Urals crude oil has fallen as demand for heating fuel drops toward the end of the European winter and supplies of Iraqi crude oil increase.
Higher Asian demand for Russian crude oil is helping to drive down prices of Oman and other Middle East grades.
Russia sells most of its output in the Mediterranean and northwest Europe, but it is becoming a cheaper alternative for Asian buyers, even though the journey from the Black Sea is twice as long as the route used to ship oil from the Middle East.
The region's refiners also buy Russian crude oil to help reduce their dependence on Middle East producers, which supply nine out of every 10 barrels of oil sold to Asia.
At current rates of growth, China is set to overtake the United States as the world's biggest energy consumer within a decade.

? Copyright 2002, The Moscow Times. All Rights Reserved.
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UBS Says Oil Boom Will Last at Least a Decade
Reuters Brunswick UBS, one of the leading Western investment banks in Russia, said Wednesday that it expected the world's second-largest oil exporter to maintain very strong production and exports growth for a least a decade.
The bank said it had raised the forecast it published last year, already considered bullish, and expected output to rise to 12 million barrels per day from 9 million bpd now, strengthening its position as the world's top crude producer.
The country's oil and refined product exports could rise close to 10 million bpd by 2010, outpacing its main rival Saudi Arabia.
"In contrast to some expectations that growth rates will decline precipitously this year, we continue to believe output and exports will see extraordinary growth before settling at a 'normalized' basis of 4 percent annual growth at the end of this decade," it said.
Low oil prices still represented the main risk, but even if the price falls below $20 per barrel, cash-rich Russian producers would have enough resources to maintain the growth.
A possible stand-off with OPEC, increasingly unhappy about losing its market share to Russia, could also be a problem.
"We believe growing demand far in excess of Russian production offers the most realistic and probable outcome that would alleviate OPEC of the need to confront Russia dramatically, although the risk is present."
Many analysts have said Russia's impressive output growth, which propelled production to 9 million bpd from 6 million in 1999, may slow down amid the lack of export capacities, reserves depletion and a judicial attack on oil major Yukos.
But Brunswick UBS, part of Swiss giant group UBS, the world's largest asset manager, played down these concerns.
"The export system is facilitating Russia's rapid ascent to becoming a 10 million bpd producer, and could even take it to an eye-popping 12 million bpd by the end of this decade," it said.
This year, output should grow by 8.7 percent to above 9 million bpd, will rise to slightly above 10 million bpd by 2006, above 11 million by 2008 and slightly above 12 million by 2010.
Russia's total export capacity stood at 6 million bpd in 2003, of which crude accounted for 4.41 million bpd and refined oil products for 1.59 million bpd.

? Copyright 2002, The Moscow Times. All Rights Reserved.
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>> PORTRAIT OF AN OLIGARCH BEHIND BARS...
http://www.themoscowtimes.com/stories/2004/02/19/041.html

Khodorkovsky Wants Public Trial
By Valeria Korchagina
Staff Writer
AP
Ex-Yukos CEO Mikhail Khodorkovsky
Mikhail Khodorkovsky, the imprisoned ex-CEO of Yukos, will not cut any deals with the state to secure his freedom and regards a public trial as the only way to clear his name, his lawyer Anton Drel said Wednesday.
Khodorkovsky's wishes came in response to an offer by his allies to exchange their stake in Yukos for his release from prison.
"The offer was not agreed with Khodorkovsky. All he wants is to have a public trial where he can defend his name. Clearing his name is more important for him than money, or property, or cutting some sort of deals," Drel said.
Drel visited Khodorkovsky on Tuesday at Moscow's Matrosskaya Tishina prison, where the billionaire has been held since his detention in October.
Khodorkovsky was arrested on a multitude of charges related to fraud and tax evasion.
As he awaits trial, he is getting acquainted with the 227 volumes - each containing between 300 and 500 pages - of the criminal case against him, Drel said.
The offer to swap chunks of the Yukos oil major for the release of Khodorkovsky and his imprisoned ally Platon Lebedev was voiced by core Yukos shareholder Leonid Nevzlin earlier this week.
Nevzlin said he and two other shareholders, Vladimir Dubov and Mikhail Brudno, were willing to trade stakes in Yukos for their partners' freedom.
The authorities ignored the offer, which has little, if any, legal basis.
In another development, it has emerged from recently published company financials that Yukos' debt to entities affiliated with its shareholders has increased.
In December, Yukos received a $1.25 billion loan from its affiliate Yukos Capital S.a.r.l.
Another loan, for $1.6 billion, was facilitated by Societe Generale in September. It came from Yukos parent company Group Menatep, which controls a stake of about 50 percent in the oil major.
Although the second loan was taken before Khodorkovsky was arrested and the Prosecutor General's Office froze a roughly 40 percent stake in Yukos, it could serve as an extra protection measure for shareholders should Yukos face bankruptcy, analysts said.
Such a threat could come either by way of authorities seizing a stake in Yukos as compensation for the alleged financial crimes of its owners, or if the company ends up having to pay the $3.4 billion tax bill produced by the Tax Ministry at the end of last year.
"It is largely speculation so far. But if it really comes to it, right now up to 70 percent of Yukos debt is held by structures affiliated with its shareholders," said Lev Snykov, oil and gas analyst with NIKoil investment bank.
"And if so, they will be first in line after the state gets its share in the bankruptcy."


Related Articles
Nevzlin Offers Shares for Freedom (Feb. 17, 2004)

Khodorkovsky No Longer a Menatep Owner (Feb. 12, 2004)

? Copyright 2002, The Moscow Times. All Rights Reserved.
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>> HHMM...

Transvaal Exposes Dark Side of Building Boom
By Denis Maternovsky
Staff Writer
AP
Relatives of those who died in the Transvaal collapse leading a funeral procession Wednesday at the Vostryakovskoye Cemetery.
In the aftermath of the Transvaal water park tragedy Saturday, Mayor Yury Luzhkov held construction companies and designers accountable for the building's collapse.
Yet if his claim turns out to be true, City Hall -- which lords over building permits and property rights -- will have nobody but itself to blame.
No large construction project can be completed without the city's approval. The high-profile Transvaal water park opened in Luzhkov's presence during City Day celebrations in September 2002, and was later dubbed "project of the year" by a city-appointed jury.
Whether or not shoddy construction was at fault for the disaster, the spectacular rise and fall of the Transvaal project illuminates the dark side of Moscow's building boom: labyrinthine bureaucratic procedures that often lead to corruption and the cutting of corners.
"Nine out of 10 bureaucrats involved in construction take bribes," one senior real estate consultant said.
On average it takes a year of consultations with various city bodies -- committees on land, architecture, utilities and ecology, among others -- before construction can even begin, builders said.
Not surprisingly, few companies are willing to wait that long in the cutthroat world of Moscow real estate.
"The faster you build, the higher the profitability," said Vladimir Pinayev, associate director at Jones Lang LaSalle.
It is an open secret that construction on most Moscow projects begins well before they are officially approved; the missing permits are obtained after the fact. It has become common for builders to construct higher than allowed and strike a deal with City Hall only later.
While obtaining all the necessary paperwork can take a similar amount of time in Western cities, it is the number of permits required and a lack of transparency that sets Moscow apart.
As many as 250 documents are needed to gain approval for a high-rise in Moscow, according to the representative of a large construction company. For Transvaal Park, roughly 200 approvals were required, media reported.
"In each country you need a lot of permits, but the procedures need to be clear," said Peter Partma, IKEA's expansion manager for Russia.
"But in Moscow there is no clear guideline how to proceed and there are no set deadlines -- a certain approval may take a day or a month."
Too much is controlled by "specific individuals," which, in the absence of a set approval procedure, makes "personal connections" in City Hall essential, Pinayev said.
Lack of connections in various approval bodies often leads to projects being delayed or rejected.
"All designs must go through Moskomarkhitektura [the Moscow Architectural Committee] ... You have the situation where an architect does a project and also sits on Moskomarkhitektura and approves the project," said a real estate lawyer with a Western law firm.
Not only are bureaucratic procedures time-consuming, they are very complicated and often impossible to follow, builders said.
Lack of coordination between different agencies and overlapping or contradictory regulations sometimes mean that developers "get to choose what rules they are going to follow," opening up a source of corruption, said Darrell Stanaford, senior director at Noble Gibbons in association with CB Richard Ellis.
"There is so much bureaucracy that things become disconnected. You don't know who is doing what," said one senior project manager with an international construction and engineering firm.
In the case of Transvaal Park, a lack of control was probably more to blame than excessive red tape.
One reason for the tragedy could be that certain inspections were conducted too fast, as the building was being raised with the city's blessing, the source added.
City Hall's involvement in construction is not limited to giving out licenses and permits -- it also gets to allocate land.
"Currently in Moscow there is a lack of empty land plots for construction," said Dmitry Rayev, a lawyer with Swiss Realty Group. "This means you either should win a tender to lease land, or you should sign an investment contract with the city to renovate old buildings."
Land in Moscow cannot be owned -- it can only be leased for a 49-year period from City Hall. Although the practice violates the 2001 Land Code, the city has resisted parting with this lucrative source of income.
When developers sign an investment contract with City Hall, the city receives an ownership share in the new building. Such deals usually stipulate that the investor cannot buy the city's share for several years, Rayev said.
City Hall's dominance over the construction sector does not always translate into building quality, however.
Many of the existing construction norms and regulations, known as SNIPs by their Russian acronym, have not been updated for decades.
But even these outdated standards, which do not take modern construction techniques into account, are not always followed.
"A system of endemic corruption is flourishing on virtually all construction sites in the city," said Alexei Klimenko, member of City Hall's architectural council, according to Izvestia.
Anything -- from construction permits to replacing quality cement with a cheaper brand -- can be done by way of bribes, he added.
Despite the wide range of construction quality in Moscow, the situation is "not catastrophic," Pinayev said.
In fact the quality of construction has been rising over the past decade, as "real tenders force builders to constantly improve quality and adopt new standards and technologies," said Ilya Shershnev, development director at Swiss Realty Group.
But Jack Keller, director of Noble Gibbons real estate consultants, said that Moscow's construction boom has outpaced safety considerations.
"From a broad perspective, over the last 10 years, some modern construction technology has entered the market which wasn't used in the Soviet Union," he said.
"From design and maintenance standpoints it has taken some time to be assimilated."
Staff Writer Alex Nicholson contributed to this report.


Related Articles
Shoigu Clears Transvaal's Foundation (Feb. 18, 2004)

Putin Promises Justice in Park Tragedy (Feb. 17, 2004)

Mayor: Up to 38 Dead at Water Park (Feb. 17, 2004)
? Copyright 2002, The Moscow Times. All Rights Reserved.

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>> HHMM...2

4 Years of Reforming the Federal System

By Nikolai Petrov To Our Readers
At the start of Vladimir Putin's first term as president, the question was: "Who is Mr. Putin?" As his first term comes to a close, the time has come to assess the results of his first and most important policy initiative: reform of the federal system.

Putin launched his program of essentially "anti-federal" reforms immediately after his inauguration in May 2000. The main points of this program were:

* The creation of seven federal districts headed by envoys appointed directly by the president;

* The weakening of the Federation Council as the focus of gubernatorial power in Moscow, achieved by moving the governors into the State Council, a consultative body that meets with the president four times per year;

* The creation of a mechanism allowing federal intervention in regional affairs, including the power to remove elected regional leaders from office and to dissolve regional legislatures.

Federal reform got underway quickly and with very little public debate. The newly-formed federal districts were designed to coincide with the Interior Ministry's troop districts. As his envoys, Putin chose five generals and two top-level (or former top-level) government officials. Their offices, like those of the chief federal inspectors who represent the president in each of Russia's 89 regions, were staffed largely with former agents of the security services. The seven envoys have enjoyed varying degrees of success, but only one district -- the Northwest District -- has seen leadership changes (twice in 2003).
The envoys are members of the Security Council, reporting to the president twice annually on their districts. The president meets biannually with all of his envoys and federal inspectors, and also meets regularly with the envoys on an individual basis. Once the envoys' offices were up and running, district-level branches of all security and law enforcement agencies were created with the exception of the FSB, which provided oversight of the federal reform process. And many other federal agencies have followed suit.
The aims of Putin's federal reform are not yet entirely clear, but policy statements made over the years have stressed five main points: bringing regional laws into line with federal legislation; coordinating operations of the regional branches of federal agencies; improving the investment climate and developing small and medium-sized businesses in the regions; clearly demarcating the powers and competencies of federal, regional and local authorities; stepping up the war on crime.
None of these goals necessarily requires the appointment of generals or the creation of a burgeoning district-level bureaucracy. And this suggests that the federal districts are destined to play a greater and perhaps a very different role in future than they do at present.
The seven federal districts are quickly emerging as a new level in Russia's state structure aimed at consolidating economic and cultural activity, and the flow of information within their boundaries. The proliferation of district-level branches has created not a single chain of command but a complex tangle of such chains within the various federal agencies. In order to extend this structure downward, a network of local "outreach" offices is being developed to cater to the public. Regional authorities have lost control over the regional field offices of federal agencies. Employees are now regularly rotated to disrupt local ties and promote loyalty to Moscow. The former links between regional authorities and law enforcement agencies, the courts and business have been broken.
The presidential envoys are the primary conduit between Moscow and the regions, pushing the implementation of federal programs and arranging nearly all contacts between governors and the president. Increasingly they control business contacts in their districts, even at the international level. Economic development plans for all seven districts have been drawn up.
The Kremlin has made good use of gubernatorial elections to strengthen its hand in the regions. Putin's envoys pushed successfully to install FSB bigwigs in the governor's mansion in the Voronezh and Smolensk regions and Ingushetia, although similar hardball tactics backfired in the Kursk and Tver regions. But even without a change of governor, Moscow has tightened its grip on the regions by beefing up the regional offices of federal agencies, sending its hand-picked candidates to the Federation Council and taking control of regional business.
All the same, it should be stressed that the envoys are intermediaries, not independent powerbrokers. For all their trying, they have never gotten direct control over financial flows in their districts.
The question of power lies at the heart of reform of the federal system. This does not mean declaring war on the governors, but establishing control over the so-called power agencies (the armed forces, security and law enforcement agencies) and the regions while bypassing the presidential administration, where the influence of Yeltsin-era officials has until recently remained strong.
Taking control of the power agencies at the regional level required more than just a change of leadership, their ties to the regional authorities had to be broken. The first step was a major shake-up within the regional power agencies. The second step, carried out between April 2001 and March 2003, involved wholesale leadership changes in these agencies and the reorganization of the power agencies as a whole. The reform effort was directed at first from the Security Council, drawing heavily on the human resources of the FSB. The federal districts were matched to the Interior Ministry's troop districts because these forces were not under Defense Ministry control and enjoyed significant autonomy within the Interior Ministry itself.
So why do the envoys wear epaulets? The siloviki have been behind the reform program from the beginning. Generals are needed to issue and carry out orders. And besides, who else could manage the siloviki in the regions and on the staff of the envoys and the federal inspectors?
We can say now that the envoys have accomplished the main tasks initially set before them. They are now thrown into all of the president's major initiatives, from the census to doubling GDP and reviving Russian culture -- although generals aren't needed for this kind of work. We have seen one general replaced by a former cabinet member in St. Petersburg. Rumor has it that Viktor Kazantsev will soon be replaced in the Southern Federal District.
But it seems to me that the districts will be around for a while yet. As the nexus of innumerable federal agencies, they have acquired enormous inertia. The districts are the key element in a new, centralized network consisting of three levels: envoys, inspectors and local "outreach" offices that are open to the public. Most importantly, the districts have become so ingrained in the political system that ripping them out could cause the entire structure to collapse.
But the presidential envoys' glory days are behind them. Federal reform is entering a new phase of more routine work on strengthening the vertical and horizontal structures of power, consolidating the regions, forming municipal districts and smoothing the functioning of "managed democracy" at all levels.
It's worth bearing in mind that the seven federal districts are not merely an extension of the power agencies -- they are the foundation of the Putin regime.
They are essential to his vision of a monolithic society organized along more or less military lines -- strict subordination, the clear division of responsibilities, chain of command and state control of business and the institutions of civil society. The point of Putin's federal reform policy is to divert all power to the federal center in order to bolster the power of the Kremlin and force regional law enforcement agencies to toe the line.
The success of this policy means that Putin is well on the way to achieving the primary goal of his first term: absolute power.

Nikolai Petrov, a scholar-in-residence at the Carnegie Moscow Center, contributed this comment to The Moscow Times.


? Copyright 2002, The Moscow Times. All Rights Reserved.

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>> KATRINA WATCH...
http://thenation.com/edcut/index.mhtml?bid=7

Tax Cheats

02/13/2004 @ 3:41pm [permalink]
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We all know that Halliburton is gouging taxpayers--according to the Pentagon, Vice President Cheney's old company overcharged the US government by as much as $61 million for fuel in Iraq. But now we learn that more than 27,000 military contractors, or about one in nine, are evading taxes and still continuing to win new government business.
According to the General Accounting Office, these tax cheats owed an estimated $3 billion at the end of 2002, mainly in Social Security and other payroll taxes, including Medicare, that were diverted for business or personal use instead of being sent to the government. (Lesser amounts were owed in income taxes).
In one 2002 case, the New York Times reports, a company providing dining, security and custodial services to military bases received $3.5 million in payments from the Defense Department despite owing almost $10 million to the government. (Shockingly, the GAO estimated that the Defense Department could have collected $100 million in 2002 by offsetting payments to delinquent companies still on its payroll.)
The Senate Permanent Subcommittee on Investigations has scheduled a hearing this Thursday to look into what committee chair Norm Coleman calls "an outrageous situation." At present, federal law does not bar contractors with unpaid federal taxes from obtaining new government contracts. (The GAO has recommended policy options for barring contracts to those who abuse the federal tax system.)
At a time when $200 million would purchase enough ceramic body armor--the kind that usually works, the kind the Pentagon wouldn't splurge for--to protect almost 150,000 GIs in Iraq, Republicans and Democrats should demand that these tax cheats pay up.

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>> LEFT WING WATCH...

This article can be found on the web at
http://www.thenation.com/doc.mhtml?i=20040301&s=schell

Letter From Ground Zero
by JONATHAN SCHELL
[from the March 1, 2004 issue]
John Kerry has been twice a hero. First, as a soldier in Vietnam, he displayed extraordinary physical courage, winning the Silver Star, the Bronze Star and three Purple Hearts. Once, injured and under heavy fire, he turned back his river boat to rescue a wounded comrade, who now credits Kerry with saving his life. Second, displaying civil courage at home equal to his physical courage in battle, he embarked on a campaign of protest against the war in which he had fought, becoming a spokesperson for Vietnam Veterans Against the War. In 1971, the VVAW camped out on the Mall in Washington. President Nixon's Justice Department then sought and obtained a court injunction forbidding the groups from using the Mall. Immediately and spontaneously, the veterans, as if re-enacting the American Revolution, assembled in caucuses by state to deliberate and vote--and so created, at the symbolic center of the Republic, a kind of instant, ideal mini-republic of their own. They decided to defy the injunction and appeal their case to the Supreme Court, which reversed the lower court decision and permitted the protest to continue.
Kerry's subsequent words in testimony before the Senate Foreign Relations Committee on April 23, 1971, still have the power to startle, in our time of general disorientation and muted speech, with their brave candor. He described the wrong done to the Vietnam veterans but did not fail also to discuss the wrongs they had committed. "I would like," he said, "to talk on behalf of all those veterans and say that several months ago in Detroit we had an investigation at which over 150 honorably discharged, and many very highly decorated, veterans testified to war crimes committed in Southeast Asia. These were not isolated incidents but crimes committed on a day-to-day basis with the full awareness of officers at all levels of command.... They told stories that at times they had personally raped, cut off ears, cut off heads, taped wires from portable telephones to human genitals and turned up the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in a fashion reminiscent of Genghis Khan, shot cattle and dogs for fun, poisoned food stocks and generally ravaged the countryside of South Vietnam in addition to the normal ravage of war and the normal and very particular ravaging which is done by the applied bombing power of this country." He added, "We call this investigation the Winter Soldier Investigation"--invoking Thomas Paine's description of the soldiers at Valley Forge. And he said, referring to the policy that had led to these crimes, "How do you ask a man to be the last man to die for a mistake?"
More than two decades later, Kerry made a decision that in the view of many observers failed to demonstrate the heroism of these earlier actions: On October 11, 2002, he voted, as did every other Democratic legislator with presidential ambitions but one--Representative Dennis Kucinich--to license George W. Bush to go to war against Iraq if he saw fit. Yet soon after the vote it turned out that the temper of the Democratic primary voters was antiwar, even angrily so, and Governor Howard Dean, who had opposed the war from the beginning, began his climb in the polls and became the generally acknowledged front-runner for the Democratic nomination. Kerry, previously considered the front-runner by many in the press, appeared to watch his longstanding presidential ambitions go down the drain. But then, in the Iowa caucuses and the New Hampshire primary, came the remarkable reversal of fortune in which Democratic voters, inspired by an almost palpable resolve to defeat Bush in the fall, switched their allegiance from the fiery Dean to the more phlegmatic and "electable" war hero Kerry, who soon won his long string of primary victories. In a peculiar act of political transplantation, the voters, energized by Dean, seemed by this switch to want to infuse the spirit of Dean into the body of Kerry, who then, Lazarus-like, came to life both as a person and as a candidate.
Left pending in all this maneuvering by ordinary citizens, however, was the question of Kerry's position on the war. Had our warrior-protester, now in pursuit of the presidency, sacrificed principle for ambition by voting for the Iraq war? Had the winter soldier abandoned his post? Had he by his vote asked American soldiers to die for a mistake? Only the Searcher of Hearts can know for sure. Kerry himself asserts that his vote to enable the war was a vote of conscience. What the rest of us can see, however, is that ever since his vote he has trapped himself in a morass--a little quagmire in its own right--of self-contradictory, equivocating, evasive, incomplete, unconvincing explanations of his stand.
Kerry has often said his position has been consistent, and this is true in the sense that he has said the same thing over and over. But it is in part precisely in this rigidity that the problem lies. Kerry voted for the war, he said at the time, because he believed that Saddam Hussein possessed weapons of mass destruction and must be disarmed. He favored "regime change" but did not regard it as a justification for war. He rejected the allegation of Iraqi ties with Al Qaeda as unproven. "Let me be clear," he said in his Senate speech announcing his vote for the war resolution. "The vote I will give the President is for one reason and one reason only: to disarm Iraq of weapons of mass destruction, if we cannot accomplish that objective through new, tough weapons inspections in joint concert with our allies." He lengthily detailed the intelligence findings he had seen, concluding, "These weapons represent an unacceptable threat." Disturbingly, he did not address the constitutional problem raised by the fact that, as his Massachusetts colleague Ted Kennedy said, "The most solemn responsibility any Congress has is the responsibility given the Congress by the Constitution to declare war." Therefore, "we would violate that responsibility if we delegate that responsibility to the President in advance before the President himself has decided the time has come for war."
The measure was the only substantive one that Kerry or any senator would pass before the war, yet Kerry claimed to believe that his vote was conditioned on fulfillment of "promises" that the Administration had made. The promises were to exhaust all diplomatic possibilities before going to war and thereby to assemble a large international coalition to fight the war and help run Iraq when the war was over. Indeed, so great was his faith in these promises that he would later claim of himself and his fellow Democrats, "Nobody on our side voted for the war." What did they vote for, then? "We needed the legitimate threat of [war] to get our inspectors into Iraq." Kerry voted, it seems, for inspectors, not war. He and all of us got war.
Kerry's entire argument against the Administration therefore is not that it waged a mistaken war but that it waged a necessary war in the wrong way. Several interviewers have pushed him hard to explain his position. In August Tim Russert, on Meet the Press, noted that he was accusing the President of having "misled" the country and commented that this did not sound like someone who supported the war. Kerry disagreed. "Wrong," he said. "I supported the notion that we must as a country hold Saddam Hussein accountable for what he was doing." Only the conduct of the war bothered him. "And so I'm running because I'm angry at the mismanagement of how we worked with our colleagues in the world and how we, in fact, have conducted the war."
Russert proceeded to the key question: "No regret over your vote?" To which Kerry, dodging the question, answered, "My regret is that the President of the United States didn't do what he had said he would do"--namely go to war only when diplomacy was exhausted and allies were on board.
"Were you misled by the intelligence agencies?" Russert asked shortly.
Kerry wavered: "No, we weren't--I don't know whether we were lied to. I don't know whether they had the most colossal intelligence failure in history."
Chris Matthews of Hardball tried again in October. "Were we right to go to Iraq?" he asked.
"Not the way the President did it," answered Kerry.
Matthews pushed: Some other way, then? Would Kerry have gone to war if France--the symbol of the recalcitrant international community--had agreed? Kerry retreated as usual into generalities: "I would do whatever is necessary to protect the security of the United States."
Missing in all these responses and others Kerry has given is the answer to a simple, fair, necessary question--the one Kerry answered so memorably in regard to the Vietnam War: Was the war in Iraq a mistake? Disarming Saddam had been Kerry's only reason for going to war. If Saddam had no weapons of mass destruction, then wasn't the war a mistake, and wasn't a vote to authorize it a mistake, and hadn't he made that mistake? And wouldn't American soldiers (now totaling more than 500) as well as Iraqis (in their uncounted thousands) be once again dying for a mistake?
But--I can hear some readers asking--why talk about the past? Why jeopardize the famous "electability" that Kerry (whether intending to or not) acquired by voting for the war and turn the likely Democratic candidate (now ahead of George Bush in certain polls) into an antiwar man, "another McGovern"? Those risks are real, but so is the gain. For one thing, the issue of the war will not disappear even if, as seems likely, Dean fails to win the nomination. On the contrary, it is likely to grow in importance as the absence of weapons of mass destruction sinks in with the public and disorder in Iraq mounts. The essence of democracy is accountability. Kerry knows it. Of the President, he has rightly said, "George Bush needs to take responsibility for his actions and set the record straight. That's the very least that Americans should be able to expect from the President of the United States. Either he believed Saddam Hussein had chemical weapons--or he didn't. Americans need to be able to trust their President--and they deserve the truth."
They deserve accountability and truth from opposition candidates as well. Someone who is ducking responsibility for his own actions is hardly in a strong position to call someone else to account. The Kay report can even be seen as an opportunity for Kerry. Kerry made a terrible error when, credulously trusting the dubious intelligence proffered by an Administration even then obviously hellbent on war, he voted to authorize that war, but his responsibility is nowhere near as great as that of the President. He might even discover a political dividend. If he were to state that had he known in October 2002 what he knows now about Iraq's weapons program he would not have voted for the resolution, he would immediately win the enthusiasm of the antiwar Democrats, whose passion and resolve, thanks in great measure to Howard Dean, has brought a fighting spirit to the Democratic Party. Nor should he entirely shift blame to the Administration for lying to him. He should hold himself accountable for his own mistake. We need the winter soldier, now more than ever, back at his post.

--------------------------------------

>> BARCODE FOR HUMANS?

This article can be found on the web at
http://www.thenation.com/doc.mhtml?i=20040216&s=garfinkel


The Trouble with RFID
by SIMSON L. GARFINKEL
[posted online on February 3, 2004]
On November 15, fifteen privacy and consumer organizations called for manufacturers to voluntarily hold off on their plans to equip consumer goods with wireless tracking devices. These devices, called Radio Frequency Identification tags, are based on the same technology that lets cars pay E-ZPASS tolls without stopping. The fear of these activists is simple: They're worried that instead of being used to track boots, bluejeans and books, these so-called RFID systems will be used to track us.
RFID isn't a household word today, but within the next few years manufacturers hope to put it into many household products. Last January Gillette announced plans to order 500 million RFID chips from a California manufacturing firm called Alien Technology; Gillette plans to put the tags into packages of its razors and blades so that the high-value consumer goods can be tracked as they move from the factory through distribution and eventually to the store shelf. Last March Benetton announced similar plans to weave RFID tags into its designer clothes; the company reversed itself after a grassroots consumer group launched a worldwide boycott of Benetton products.
As its name implies, RFID systems are based on radio waves. Each tag is equipped with a tiny radio transmitter: When it "hears" a special radio signal from a reader, the tag responds by sending its own unique serial number through the air.
This wireless technology could save American businesses billions of dollars. With RFID readers at the loading docks and on the store shelves, retailers could know precisely how many packages of, say, lipstick had been received and how many had been put on the shelves. And once every product in the store is equipped with an RFID tag, stores might even be able to have an automated checkout: Shoppers could just push their carts through a doorway and have all the items in the cart automatically totaled and charged to the RFID-enabled credit card in their pocket.
Both Wal-Mart and the US military have already told their hundred largest suppliers that cartons and pallets must be equipped with unique RFID tags by January 2005. Meanwhile, MasterCard and American Express have been testing RFID-enabled credit cards. Mobil has been pushing its RFID-based "Speedpass" since 1997. And most high-end cars now come with RFID "immobilizer" circuits that won't let the cars start unless the correct RFID-enabled car key is in the ignition.
So why did the American Civil Liberties Union, the Electronic Frontier Foundation, The World Privacy Forum and a dozen other organizations ask for a voluntary moratorium on RFID technology in consumer goods? Because this use of RFID could enable an omnipresent police surveillance state, it could erode further what's left of consumer privacy and it could make identity theft even easier than it has already become.
RFID is such a potentially dangerous technology because RFID chips can be embedded into products and clothing and covertly read without our knowledge. A small tag embedded into the heel of a shoe or the inseam of a leather jacket for inventory control could be activated every time the customer entered or left the store where the item was bought; that tag could also be read by any other business or government agency that has installed a compatible reader. Unlike today's antitheft tags, every RFID chip has a unique serial number. This means that stores could track each customer's comings and goings. Those readers could also register the RFID tags that we're already carrying in our car keys and the "prox cards" that some office buildings use instead of keys.
The problem here is that RFID tags can be read through your wallet, handbag, or clothing. It's not hard to build a system that automatically reads the proximity cards, the keychain RFID "immobilizer" chips, or other RFID-enabled devices of every person who enters a store. A store could build a list of every window shopper or person who walks through the front door by reading these tags and then looking up their owners' identities in a centralized database. No such database exists today, but one could easily be built.
Indeed, such warnings might once have been dismissed as mere fear-mongering. But in today's post-9/11 world, in which the US government has already announced its plans to fingerprint and photograph foreign visitors to our country, RFID sounds like a technology that could easily be seized upon by the Homeland Security Department in the so-called "war on terrorism." But such a system wouldn't just track suspected Al Qaeda terrorists: it would necessarily track everybody--at least potentially.
Despite these fears, the privacy activists aren't saying that RFID technology should be abandoned. As it is, the technology is already in broad use currently for the tracking of pharmaceuticals (and the elimination of dangerous drug counterfeits), for tracking shipments of meat (so that contaminated batches can be rapidly identified and destroyed) and even for tracking manufactured goods to deter theft and assist in inventory control.
But companies that are pushing RFID tags into our lives should adopt rules of conduct: There should be an absolute ban on hidden tags and covert readers. Tags should be "killed" when products are sold to consumers. And this technology should never be used to secretly unmask the identity of people who wish to remain anonymous.
I was proud to be one of the people endorsing the position statement on the use of RFID in consumer products. If companies do not voluntarily abide by these principles, we should push to have them incorporated into the laws that protect our privacy rights at the state and federal level.


Posted by maximpost at 10:26 PM EST
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