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.

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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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>> 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.

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>> 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."
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Associated Press reporter Matt Kelley in Washington contributed to this report.