UN building on fire in Syria
From correspondents in Damascus
28apr04
A BUILDING which houses UN offices in the Syrian capital was on fire after three explosions were heard here late today, an AFP journalist said.
The explosions rocked the Mazzeh district of western Damascus that houses several embassies as well as the UN offices.
One of the blasts went off near a shopping mall, residents said.
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UN Building Burns After Damascus Explosions, Al-Arabiya Says
April 27 (Bloomberg) -- The United Nations building was on fire and a terrorist group started shooting following three explosions in a western Damascus neighborhood, Al-Arabiya news reported, citing the Syrian state news agency SANA.
The explosions occurred at about 8 p.m. local time near the British, Canadian and Iranian embassies, Dubai-based Al-Arabiya said. Another explosion was reported near a shopping mall in the same neighborhood, the station said.
(Al-Arabiya 4-27)
To contact the reporter on this story:
James Cordahi in Dubai on at cherifcord@bloomberg.net
To contact the editor of this story:
Glenn Holdcraft at gholdcraft@bloomberg.net
Last Updated: April 27, 2004 14:58 EDT
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Explosions Heard Near Embassies in Syrian Capital, AP Reports
April 27 (Bloomberg) -- Explosions and gunfire were heard today near the British ambassador's residence and the Saudi Arabian Embassy in Damascus, Syria, the Associated Press reported, citing two Arab television stations.
The explosions were in the western part of the city that is home to many foreign embassies, AP said, citing Al-Jazeera and Al- Arabiya television stations.
(The Associated Press 4-27 Online)
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Syrian security forces clash with a ``terrorist band'' in Damascus

ALBERT AJI, Associated Press Writer
Tuesday, April 27, 2004


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Damascus explosions rock embassy district
By Kim Ghattas in Beirut and Gareth Smyth in Tehran
Published: April 27 2004 19:53 | Last Updated: April 27 2004 20:39
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1079420650995

A series of explosions rocked the western sector of Damascus yesterday evening near the embassies of Iran and Canada and the residence of the British ambassador to Syria.
Witnesses in Damascus reported up to five explosions; others said they heard at least 15. Heavy gunfire took place for several hours afterwards.
Police cordoned off the area, on the Mezzeh highway, a road lined with residential buildings and office blocks, which links Damascus to Lebanon.
Syrian state television reported that police had clashed with a "terrorist group" and said that one attacker had been killed and at least one other arrested.
Security sources in Damascus said the explosions were caused by car bombs. But it is unclear what the intended target was.
In London, a Foreign Office spokesman said there were no injuries to UK embassy staff. "Our staff are in the process of assessing the situation."
Syria, which is ruled by the Ba'ath party, saw unprecedented unrest by its Kurdish minority in March, after Kurds in Iraq gained new rights in the post-war interim constitution.
Last year, sources in Syria reported the authorities were searching for cars packed with explosives. Syria has long had its own struggle against Islamist extremists.
Mohammad Aziz Shukri, professor of international law at Damascus university, was at home 200m from where the blasts occurred.
He told the FT by telephone that shooting and explosions began at 7.30pm and lasted for an hour.
"I heard from a driver that terrorists jumped out of a car and began shooting randomly and throwing grenades. It was between the residence of the British ambassador and the house of the Iranian ambassador. But now everything is under control."


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(04-27) 12:44 PDT DAMASCUS, Syria (AP) --

Syrian security forces clashed with a "terrorist band" late Tuesday in Damascus, Syrian media reported after explosions and gunfire were heard in a neighborhood where foreign diplomats live and work.
One attacker was reported killed and another captured, a source in Syria said.
Syrian television, in a brief statement, said security forces gave chase and were in control of the situation. It gave no other details. Syria's official news agency SANA, quoting a security source, said "a terrorist band shot this evening indiscriminately in the Mazza area."
It added that security forces "confronted it and were in full control of the situation."
Syria has not seen such violence in years.
Residents of the area had reported explosions and gunfire in Mazza, on the western edge of the city. Smoke was seen billowing from the area, which security forces sealed off, the residents said.
Al-Jazeera reported that car bombs were used in the attack and that heavy exchanges of gunfire were continuing late into the night.
Al-Arabiya quoted a witness saying more than 15 explosions were heard.
A Saudi consulate, the British ambassador's home, offices of the Iranian state news agency, the Iranian Embassy and the Canadian Embassy are in Mazza.
In London, British Foreign Office officials said an explosion and shooting was heard near the Iranian ambassador's residence and in the vicinity of the British ambassador's residence.
"At the moment, there are no injuries to U.K. Embassy staff. Our staff are in the process of assessing the situation," one official said on condition of anonymity.
Another official later said the attack did not appear to be aimed at the British ambassador's residence.
The United Nations Development Fund and its Children's Fund also are in Mazza, as well as building that housed U.N. offices in the past. In New York, Marie Okabe, a U.N. spokeswoman, said the world body could not confirm reports that U.N. offices were hit in Damascus. But she stressed reports were only preliminary.
An Iranian Embassy official in Damascus said that country's embassy was not involved in any attack. The official spoke to Lebanon's al-Manar television station, which is run by the pro-Iranian guerrilla group Hezbollah.
Syrian political analyst Imad Shuaibi told The Associated Press he had learned that two men "attacked with hand grenades and gunfire near the Iranian and Canadian embassies."
"One was killed and the other was captured," Shuaibi said.
Syria has been on the U.S. State Department's list of terror-sponsoring nations for its support of groups like Hamas and Hezbollah that attack Israel. Syria, though, says the anti-Israeli groups are not terrorist, and that it has an interest in fighting Islamic extremist groups like al-Qaida.
Syria has come under intense pressure, particularly from Washington, to crack down on militants based in the country who are opposed to Israel or purportedly entering neighboring Iraq to fight U.S. soldiers.
Neighboring Jordan said several suspected terrorists entered the country from Syria last month in a foiled plot to carry out attacks on targets including the U.S. Embassy in Amman, the prime minister's office and the secret service agency.
Damascus denied claims that suspected terrorists entered Jordan from Syria and has said it is trying to stop foreign fighters from cross from its territory into Iraq, but that the long, porous border is hard to police.
In December, President Bush approved the Syria Accountability and Lebanese Sovereignty Restoration Act, which accuses Syria of hosting militant Palestinian groups and of seeking biological and chemical weapons.
The act says Syria must withdraw its 20,000 troops from neighboring Lebanon and stop militants and weapons from crossing its border into Iraq, and adds that if Damascus does not comply, Washington can impose economic and diplomatic sanctions.
Syria denies pursuing weapons of mass destruction.
During the late 1970s and early 1980s, Syria's hard-line government fought a fierce war with Islamic fundamentalists of the Muslim Brotherhood, which was blamed for a 1980 assassination attempt on President Hafez Assad, the country's authoritarian leader who died from natural causes in 2000. Assad was succeeded by his son, Bashar Assad.
Assad suffered minor injuries after gunmen open fire with automatic weapons and grenades in the 1980 attack.
Syrian special forces troops massacred some 1,000 Muslim Brotherhood members in Tadmur Military Prison near Palmyra to avenge the assassination attempt.
In 1982, the Muslim Brotherhood staged a rebellion in the northern province of Hama. During the clashes, Syrian forces razed much of the city, killing as many as 10,000 people and finally crushing the Brotherhood after a five-year war.

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Saudis Reinforce Hunt for Militant Suspects Near Riyadh

By Adnan Malik Associated Press Writer
Published: Apr 27, 2004

RIYADH, Saudi Arabia (AP) - Convoys of police vehicles headed into a mountainous area northeast of Riyadh Tuesday to join a hunt for terror suspects, possibly including the chief of al-Qaida's Saudi network.
Abdulaziz Issa Abdul-Mohsin al-Moqrin, the kingdom's most wanted militant, is believed holed up with four to five other terror suspects near al-Hassayah, 30 miles northeast of Riyadh.
Police armed with automatic weapons stopped traffic at a checkpoint near al-Hassayah, and a helicopter flew overhead as police vehicles streamed past palm groves to the area.
A security official told The Associated Press that counterterrorism officers have surrounded the area since late Sunday.
U.S. and Saudi officials believe al-Moqrin is al-Qaida's top figure in Saudi Arabia and the mastermind of a Nov. 8 bombing at a Riyadh housing compound that killed 17 people, most of them Muslims working in Saudi Arabia.
On Tuesday, an audiotape of a man claiming to be al-Moqrin and vowing to launch more attacks on Americans in the kingdom surfaced on the Internet. The speaker on the tape denied responsibility for the April 21 suicide bombing of a government security building in Riyadh that killed five people and wounded 148.
On Friday, Saudi forces fought a gunbattle with militants in the Red Sea port city of Jiddah, killing five and capturing a sixth.
Al-Qaida, the Muslim extremist network blamed for the Sept. 11 attacks on the United States, is led by Saudi-born Osama bin Laden.
Bin Laden has targeted the rulers of his homeland, saying they are insufficiently Islamic and too close to the United States.

AP-ES-04-27-04 1526EDT

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U.S.: Several Countries in Addition to Iran and NKorea May Be Trying to Develop Nuke Weapons

By Edith M. Lederer Associated Press Writer
Published: Apr 27, 2004

UNITED NATIONS (AP) - Several countries in addition to Iran and North Korea may be trying to develop nuclear weapons, and Washington is pursuing the customers of an underground Pakistani network, U.S. Undersecretary of State John R. Bolton said Tuesday.
He said he wasn't prepared to name any of the other countries because U.S. officials are still seeking information.
"There are several others," Bolton said. "There's a lot of information that we don't necessarily have corroboration for, but we are pursuing our concerns where we do have information, trying to get additional information, learning from others, and trying to assess the exact magnitude of the threat."
"Certainly one of the things that we're very interested in is finding out if A.Q. Khan's network had other customers, and we're pursuing that in cooperation with a number of other states," he said.
Abdul Qadeer Khan, the father of Pakistan's nuclear program, set up an underground network that supplied nuclear technology to Iran, Libya and North Korea. In February, he admitted being the mastermind of the scheme and was pardoned by Pakistan's president, Gen. Pervez Musharraf.
"There's more out there than we can discuss publicly," Bolton said, "and it's one of the reasons why the depth of our concern about the international market black market in weapons of mass destruction and related materials is as substantial as it."
Bolton spoke to reporters after accusing "at least" four countries that have ratified the Nuclear Nonproliferation Treaty of using its provisions "as cover for the development of nuclear weapons," either currently or in the past.
"States like Iran are actively violating their treaty obligations, and have gained access to technologies and materials for their nuclear weapons programs. North Korea violated its NPT obligations while a party, and then proved its strategic decision to seek nuclear weapons by withdrawing from the treaty entirely," he said.
In the past, Iraq and Libya also violated the treaty, Bolton told a meeting of the committee preparing for next year's U.N. conference to review the 1968 pact, which is considered the cornerstone of international efforts to prevent the spread of nuclear weapons.
Declaring that "there is a crisis of NPT compliance," Bolton said President Bush "is determined to stop rogue states from gaining nuclear weapons under cover of supposed peaceful nuclear technology."
Under the treaty, countries that ratify and give up the pursuit of nuclear weapons are allowed to obtain fissile material and nuclear technology for peaceful uses such as power plants. But in February, Bush made a series of proposals to address what the United States sees as loopholes in the treaty.
Bolton said there was "very broad consensus" to limit nuclear enrichment and reprocessing plants to countries that now possess them, though "how exactly it's done is still the subject of discussion."
The United States wants to ban the Nuclear Suppliers Group - which provides fissile material under the treaty - from selling enrichment and reprocessing equipment and technology "to any state that does not already possess full-scale, functioning enrichment and reprocessing plants." The suppliers would have to ensure a regular supply of nuclear fuel at reasonable prices to countries in compliance with the treaty.
Nuclear experts say the U.S. proposal would keep Iran from building nuclear enrichment and reprocessing plants.
Bolton noted that Iran has expressed interest in buying up to six additional nuclear power plants and has informed the U.N. nuclear agency it is pursuing a heavy-water research reactor at Arak, "a type of reactor that might be well suited for plutonium production."
Stressing that Iran has oil and gas reserves that will last several hundred years, he claimed the only role of Iran's nuclear power program is provide material and technology for covert nuclear weapons development.
Tehran has repeatedly denied it is pursuing a nuclear weapons program.
Bolton said the United States has not decided whether it will seek to have the International Atomic Energy Agency's board cite Tehran for noncompliance at its June meeting.
The best thing Iran can do now is "come clean" and open its nuclear program "to transparent inspections," Bolton said.
As for North Korea, he said the United States hopes six-party talks will achieve "a peaceful, diplomatic end to North Korea's nuclear programs." But he cautioned that "simply continuing to talk ... is not progress."
Libya has said it has given up its weapons programs.
AP-ES-04-27-04 1527EDT
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Is Silver Scandal On the Horizon?
Posted March 16, 2004
By Kelly Patricia O Meara


Investors claim silver sellers are manipulating the market using fraudulent tactics.


One can only speculate, of course, about the outcome of the Enron debacle if investors and regulators had been clued by whistle-blowers into the enormity of the corporation's accounting shenanigans in the years before its implosion. Though it's too late for Enron employees and stockholders, thousands of investors believe a similar implosion is looming in the silver market with potentially catastrophic consequences. Rather than sit back and reap the financial benefits to be gained by what these investors believe will be a much higher price for the precious metal, this indignant army of investors and whistle-blowers has set out to alert federal regulators with the hope of averting another Enron-like disaster.

It's fair to say that when the price of any investment sold as a certainty fails to rise to anticipated levels, accusations of unfair practices and manipulation are likely to arise. Some accusations have merit and some do not. In this instance, there is no mincing of words. Not only do a growing number of investors believe that the silver market has been manipulated to hold down the price of silver, they accuse regulators of the commodities markets of allowing a handful of traders who are "short" silver (betting the price will go down) to commit a fraud by selling paper claims for delivery of silver that the whistle-blowing investors say does not exist.

For nearly two decades Ted Butler, an independent commodity analyst and investor in silver, has been a diligent critic and prolific letter writer to the regulators who oversee the commodities markets. It is respect for his remarkable understanding of the silver market that has encouraged thousands of small investors to barrage regulators and law enforcement with requests for an investigation of what they are convinced is a rigged market.

According to Butler: "The problem is that the silver market has not behaved according to the laws of supply and demand, which holds that if you have more consumption of a commodity than you have production - consuming more than you produce - the price has to rise, and has to rise sharply, to correct that condition. Based on the reports of all accepted statistical services which analyze silver, this condition has been present in the silver market for nearly 15 years, yet the price of silver hasn't risen accordingly."

As Butler puts it: "This causes a reasonable person to ask why the price hasn't risen. My answer is that this kind of action can only take place if the market is for some reason not free to re- spond to the iron law of supply and demand. You cannot have a free market in which consumption is more than production without the price increasing. That is the core principle of the marketplace. It is the essential law on which our capitalist economic system is based, the law of supply and demand, and it doesn't get any simpler than that. If the price of silver appears to be immune to the law of supply and demand, there is something wrong."

The situation in the silver market, Butler continues, "doesn't exist in any other commodity traded, and the bottom line is that we've used up 95 [percent] to 99 percent of a 5,000-year accumulation of silver and are about to hit the wall. The fact is, we no longer can depend upon inventory to supplement the market. The world known silver inventory now stands at about 150 million ounces, the majority of which is stored in the [New York Mercantile Exchange] COMEX warehouses in New York. The world annual production - that is, all the silver produced [mined] from the earth in any given year - now is around 600 million ounces per year. Silver supplied from recycling on a regular basis amounts to another 150 million to 200 million ounces. But current consumption of silver is around 900 million ounces, leaving a deficit of 100 million more ounces of silver being consumed than is produced."

The problem gets worse when you consider that the Commitments of Traders Report (COT) for Jan. 27 reveals that commercial traders have increased their net positions in COMEX silver futures and call options to 470 million ounces. And, according to the COT, just "eight or less" traders have sold 330 million ounces of silver - a total net "short" position "three times the size of total world known silver inventories."

Butler puts it simply: "The 'short' traders have sold silver that they do not have and cannot get unless these 'eight or less' traders have some way of obtaining for delivery all of the world's silver production for the next couple of years. That seems more than a little far-fetched. In 2003 the silver deficit was 87 million ounces, and there have been deficits for the last 15 years. To meet this obligation, silver has been taken from inventory, but now the inventory has dwindled to the point that the sales of silver far exceed even what is in known world inventory."

What will happen, asks Butler, "if the buyers of this silver ['longs' who expect the price to go up] decide to take delivery of their silver contracts, which they have every right to do? What if these buyers of silver say 'Hey, I think I'd like to have my silver?' The reason the seller 'shorts' haven't had to turn over the silver is because the buyer 'longs' haven't demanded delivery. But you know, there's an old saying, 'He who sells what isn't hisn, buys it back or goes to prison.' So the sellers can either scrape up the silver from who knows where or buy it back at extraordinary cost. But at that point the cat is out of the bag. Based on the official numbers of known silver, it just isn't possible to deliver the silver that has been sold. This situation inevitably has to end in default, which is the worst thing that can happen in a market, unless action is taken now. And that's why I, and many other silver investors, have been writing to regulators who oversee these markets, asking them to investigate."

In a September 2002 communication between Butler and former New York Mercantile Exchange (NYMEX) executive vice president Neal Wolkoff, Butler further simplified the matter, even agreeing to end the dialogue if the NYMEX official will verify that the "eight or less" traders can prove that they have the 330 million ounces of silver for which they had sold paper claims into the market separate from the COMEX warehouse inventories.

Citing data from well-known market services, including Gold Fields Mineral Services and the Silver Institute, Wolkoff concluded: "I have found no evidence to support a finding, or even a reasonable belief, that the silver market is being manipulated." But the NYMEX official did not respond to Butler's challenge to show that the "eight or less" traders had the physical silver for which they had sold claims on the market.

Beyond Butler's steady communications with the commodities regulators, increased pressure is being applied by investors who not only believe that Butler is correct but that the numbers speak for themselves. In fact, silver investors feel so strongly about what has been transpiring for more than a decade in the silver market that nearly 3,000 of them have signed a formal request to Eliot Spitzer, the hard-nosed attorney general of New York state, urging him to look into the matter and to "ask the COMEX what safeguards they have in place to ensure that big short position holders can fulfill their responsibility to deliver real silver." The investors say that if any COMEX contracts are broken for "insufficient silver" they hope and expect that Spitzer "will prosecute the silver 'short' check writers to the fullest criminal extent of the law."

Spitzer did not return Insight's calls requesting an interview to discuss these matters, but a source at the Commodities Futures Trading Commission (CFTC), the congressionally mandated commodities regulatory body, tells Insight that the commission is well aware of Butler, growing investor anger and the current letter-writing campaign. "Through the years," says the CFTC source, "we've considered the allegations and examined the merits of them as we are doing in this recent case. As of now, we don't think there is much merit. We take the letters seriously, but we just don't see that there is a manipulation on the 'short' side."

Asked if the CFTC can confirm that the shorts actually have the silver they have sold into the market, the source explained, "Well, obviously we can't say with certainty about every short having silver on every contract. The hypothetical [that longs would request their silver] has never happened, so the amount of deliveries are always a small number relative to the size of the amount of positions traded."

Has the CFTC gone to the "eight or less" and said, "Hey, you've sold 330 million ounces of silver. Do you have the silver to back it up?"

"I'm not going to get into specifically what we've done," the source says, "but we're comfortable that the shorts are not manipulating the market, and at some future date, if there is demand in the market that exceeds the amount of silver that's available for delivery or in the cash market, then prices will react as they do in any market." That is, there will be one enormous spike in the price of silver.

It appears that much of the CFTC's faith that the market is not being manipulated to keep down the price of silver comes from the fact that to date those who have wanted delivery of silver could get it. "I'm not saying that one man's writing [Ted Butler] isn't credible," the CFTC source claims. "I'm saying that the same accusation has been made over 15 years that there is a shortage that requires higher prices, but over that 15 years there has been enough silver to meet consumption demand for every single year. So presumably the claim did not have much behind it."

Chris Bowen, general counsel and chief administrative officer of NYMEX assures Insight there is no problem. "We have received some letters and e-mails on this matter, and we've received over the course of years, probably from the same individuals, claims about markets focused on silver. As we do whenever we receive complaints, we look at them, review them, and we've found that there has never been an issue. We always look at the market information and at the arguments that they make and see if they make any sense."

The following dialogue with the NYMEX counsel about whether the amount of silver sold into the market is supported by physical silver seems murky at best.

Insight: "Has anyone at the NYMEX gone to the 'eight or less' traders and said 'Hey, let's see the silver?'"

Bowen: "As part of our surveillance procedures, we have information about the positions of all large traders in the market. So in that circumstance we have the ability to monitor for any potential situation. In the past we've never found it to be an issue."

Insight: "In the past there was a much larger inventory. Are you looking into whether the 'eight or less' largest commercial traders have the silver to back up their short position?"

Bowen: "We have information for the positions of all the large traders in the market."

Insight: "Do you have information about the amount of silver that they have?"

Bowen: "Correct."

Correct that the commercial shorts have the appropriate amount of silver, or correct that the NYMEX has information about the amount of silver they have or do not have?

It is precisely this kind of ambiguity or evasion that has fueled the fire among the thousands of individual silver investors calling for an investigation.

Bill Murphy, chairman of the Gold Anti-Trust Action Committee (GATA), a nonprofit organization that researches and studies the gold market, long has held that the gold market has been manipulated by a few of the large banks and government entities. Now Murphy has thrown the full weight of his organization behind the accusations raised by Butler and other silver investors. "Look," says Murphy, "the GATA army mobilized to support this effort because of information that we're getting that large investors are going to the COMEX for silver supply because they can't locate it elsewhere in the world in any size. And that's why we're helping Butler expose this fraud. If we're right, they'll be hitting the wall in silver within the next couple of months because they don't have the silver to continue these games. Of course, all these big shorts have to do is buy back the contracts, but they aren't going to do it. Greed has a full-throttle hold on them. Greed and arrogance like that of the boys at Enron. You know, they just kept on with the game."

Murphy drives home his point: "What we're saying to the regulators is, don't wait until a disaster happens. Don't sit there and protect these big shorts because they seem incomparably rich and powerful. Don't let them keep selling silver contracts that they can't possibly fill. When you have a few people with huge positions and the basis of that position is the claim that they have the silver to deliver, they should be required to prove that they aren't selling hot air. Look, we're investors, and yes we have a vested interest, but we know what we're talking about and the numbers support what we're saying. If we're right, and we believe we are, I think we're going to see some real fireworks beginning in March. And even if it's just coincidence, since GATA got involved in asking these questions, silver has risen nearly 70 cents."

Despite murky assurances by the regulators, Butler concurs with Murphy that big changes in the silver market are coming. "There's no great conspiracy," he explains, "it's just pure greed. You don't have to be Albert Einstein to figure out that if you sell something that doesn't exist, there will be a problem when delivery is demanded. These shorts have raked in tens if not hundreds of billions of dollars by keeping the price at depressed levels. This is a big issue, and when silver goes up, it's going to be a huge scandal. As soon as the inventory is gone the price will spike. A sudden, shocking wake-up call is going to be thrust upon us. It's like we're on the Titanic. We've hit the iceberg and the regulators are yelling, 'Hey, there's no problem until this unsinkable ship goes down.'"

Although the numbers appear to support the dire warnings being made by these small investors, there's no telling what hidden information might exist to have convinced regulators that life jackets are not yet necessary. All that is certain, say critics, is that unlike the Enron debacle, the regulators won't be able to claim that they weren't warned about icebergs.

Kelly Patricia O'Meara is an investigative reporter for Insight.
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