N. Korea's security minister disappears after train blast
Special to World Tribune.com
EAST-ASIA-INTEL.COM
Friday, July 16, 2004
Pyongyang has replaced its public security minister who has disappeared from public view after a train blast in April that

killed 161 people. There is lingering speculation the incident was linked to an assassination attempt on the North's leader

Kim Jong-Il.
Choe Ryong-Su had been dismissed from his post just one year after he assumed the important position that controls the

country's powerful secret police, a backbone of Kim's totalitarian rule.
South Korean officials said Choe's fate is unknown. Tokyo Radiopress reported that Choe has not been seen since the disaster

in Ryongchon, near the Chinese border.
The real question is whether Choe has been executed along with a number of others who may have been involved in a plot to

assassinate Kim. The train enroute from China passed through the station anywhere from 30 minutes to nine hours before the

blast.
Pyongyang watchers in Seoul had considered Choe to be one of the next generation of North Korean leaders because he replaced

Vice Marshal Park Hak-Rim, 86, one of the most influential figures in the North's military. He also replaced Park as the

member of the powerful National Defense Commission chaired by Kim Jong-Il.
The North's media gave no explanation for Choe's replacement. But South Korean intelligence officials said Choe was likely

fired due to the train blast.
According to diplomatic sources, North Korea's state security agency has concluded that the train explosion was a botched

attempt to harm Kim. A mobile phone was reportedly used to spark the explosion.
North Korea watchers said there is a possibility that Choe was punished or executed. Government officials in Seoul declined

to comment about Choe's fate, but said he has been absent from public appearances since the train explosion.
Ju Sang-Song, an army general, replaced Choe in a shakeup ordered by the North's legislature, the Supreme People's Assembly

on July 9, according to the North's official Korean Central News Agency.
Ju was promoted to the People's Army's full-star general in February 1997. He worked as a member of the North's legislature

in 1990 and 1998. His most recent post, as reported by the North's media, was as a front-line army corps commander.
Another source said the replacement was part of an effort to purge close aides to Jang Song-Taek, Kim's brother-in-law,

widely considered a candidate for the country's next leader.
Jang, husband of Kim Jong-Il's sister, Kim Gyong-Hi, has lived under house arrest following a bitter internal power struggle,

a South Korean intelligence official said.
Jang was recently arrested on charges of "creating a faction" and "peddling his power for benefits" and has led a tightly

guarded life at a guesthouse in a suburb of Pyongyang.
"Jang has been dismissed from the key post by those who support one of Kim's sons to be the next country," the source said.
Copyright ? 2004 East West Services, Inc.


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

More N. Korean Bombs Likely, U.S. Official Says

By Glenn Kessler
Washington Post Staff Writer
Friday, July 16, 2004; Page A18
North Korea is likely to be producing nuclear bombs even as it conducts negotiations with the United States and four other

countries on ending its weapons programs, the senior U.S. official responsible for those talks told Congress yesterday.
"Time is certainly a valid factor in this," said James A. Kelly, the assistant secretary of state for East Asian affairs,

during testimony before the Senate Foreign Relations Committee. "We don't know the details, but it's quite possible that

North Korea is proceeding along, developing additional fissionable material and possibly additional nuclear weapons."
Although North Korea has asserted that it has produced weapons-grade plutonium since the crisis over Pyongyang's nuclear

programs began 20 months ago -- and though U.S. intelligence analysts broadly believe that the number of nuclear weapons held

by North Korea has increased from two to at least eight during this period -- it is highly unusual for a senior

administration official to concede publicly that North Korea's stockpile may be growing.
After four negotiating sessions with North Korea and its neighbors since April 2003, Kelly said, it "is clear we are still

far from agreement." The first round included China and later expanded to involve South Korea, Japan and Russia.
Democrats on the committee scolded the administration for waiting too long to present North Korea with a detailed proposal

for ending the crisis. At the most recent six-nation talks, held in Beijing last month, the administration proposed that once

North Korea declares it would end its programs, U.S. allies such as South Korea could provide immediate energy assistance.
North Korea then would have three months to disclose its programs and have its claims verified by U.S. intelligence. After

that, the United States would join in providing Pyongyang with written security assurances and participate in a process that

might ultimately result in the normalization of relations.
"The bottom line is that we now confront a much more dangerous adversary than we did in 2001," said Sen. Joseph R. Biden Jr.

(Del.), the ranking Democrat on the panel. He accused the administration of adopting a policy of "benign neglect" even after

learning that Pyongyang had a clandestine nuclear effort, and then taking "more than two years to resolve its internal

divisions and settle on an approach for dealing with North Korea."
Under questioning, Kelly made it clear that improving relations with North Korea would take much more than the dismantling of

its nuclear programs. In particular, he said, North Korea would need to improve its human rights record.
"We're not looking to bribe North Korea to end its nuclear weapons state," Kelly said. "We see this as a very important

objective, but then we have made clear that normalization of our relations would have to follow these other important issues.

And human rights is co-equal in importance, perhaps even more important, than conventional forces, chemical weapons,

ballistic missiles, matters of that sort."
In response to the administration's proposal, North Korea has demanded immediate assistance from the United States once it

freezes its programs. Kelly said the administration is still studying the North Korean proposal, which he called vague.
He told lawmakers that the administration does not consider the security assurances a "reward" or a benefit that could be

claimed by North Korea as a U.S. concession.
? 2004 The Washington Post Company
--------------------------------------------------------------------
North Korea: U.S. Uncertain About Pyonyang's Nuclear Intentions
By Frank Csongos
Is North Korea ready to deal and give up its nuclear-weapons program for economic aid and some sort of security guarantee

from the United States? A top U.S. diplomat who participated in recent talks with North Korea says he cannot say that the

communist North has made a decision to do so.
Washington, 16 July 2004 (RFE/RL) -- A senior U.S. official says it remains unclear whether North Korea has made the

strategic decision to abandon its nuclear-weapons program.
Assistant Secretary of State James Kelly said yesterday that North Korea did acknowledge during recent six-party talks in

Beijing that the bulk of the country's nuclear program is weapons-related. The talks involved the United States, North Korea,

South Korea, China, Russia, and Japan.
Kelly told the Senate Foreign Relations Committee that North Korea says it wants to maintain a civil nuclear program. As for

its weapons program, Kelly told the senators, "I could not say at this point that the DPRK [Democratic People's Republic of

Korea] has indeed made the strategic calculation to give up its nuclear weapons in return for real peace and prosperity

through trade, aid, and economic development." Kelly also said the United States will not establish normal relations with

North Korea even if that country agrees to abandon its nuclear-weapons program.
Kelly said North Korea proposed at the Beijing meeting it would freeze its nuclear-weapons programs -- but not necessarily

dismantle them -- in exchange for rewards. Those rewards might include energy aid and a commitment by the United States not

to overthrow the regime.
Still, the U.S. diplomat said the United States is committed to resolve the nuclear dispute through diplomatic means. "I

believe that diplomacy is the best way to overcome North Korea's nuclear threat and that the six-party process is the most

appropriate approach," he said. "Our aim is to fully and finally resolve the nuclear program, not to implement half-measures

or sweep the problem under the rug for future policymakers to deal with."
Kelly also said the United States will not establish normal relations with North Korea even if that country agrees to abandon

its nuclear-weapons program. He said that step could only be taken after the communist North improves its human rights record

and ends what he called other objectionable activities such as arms sales and suspected drug-related activities.
Commenting on the talks, Kelly said it is clear that an agreement is still far away.
North Korea has a chronic economic problem and needs food and energy aid. An estimated 10 percent of North Korea's population

is believed to have starved to death over the past decade because of the communist government's policies.
The United States says North Korea first acknowledged two years ago that it was secretly developing nuclear weapons in

violation of an earlier accord with Washington. The U.S. Central Intelligence Agency has estimated that North Korea already

possesses at least two nuclear weapons along with medium-range missiles capable of delivering them.
----------------------------------------------------------------------------------
U.S. Moving Weapons Out of South Korea
NewsMax Wires
Saturday, July 17, 2004
SEOUL, South Korea -- Around-the-clock train and truck convoys are moving military hardware from the tense border with North

Korea as the U.S. Army prepares to redeploy 3,600 troops to Iraq.
The massive logistical feat began July 7 and is moving hundreds of Abrams tanks, Bradley fighting vehicles, Humvees and

artillery pieces to the southern port city of Busan to be shipped out under tight security.
About 3,600 troops from the U.S. Army's 2nd Infantry Division, dug into encampments between Seoul and the heavily fortified

border with North Korea, will follow their equipment to Iraq.
The division's entire 2nd Brigade would begin pulling out of South Korea next week, and the entire unit would be in Iraq by

the end of August, Gen. Richard Cody, the Army's vice chief of staff, said at the Pentagon on Friday. It is expected to

operate in western Iraq with Marine Corps units, Cody said.
The redeployment - one of the biggest realignments in a decade along the Cold War's last frontier - was announced in May and

signals the first significant change of U.S. troop levels in South Korea since the early 1990s.
It underscores how the U.S. military is stretched to provide enough forces to cope with spiraling violence in Iraq while also

meeting its other commitments.
The equipment is arriving around-the-clock at the Busan port, where soldiers are working two 12-hour shifts, U.S. Army

spokeswoman Maj. Kathleen Johnson said.
"This is a very intensive operation, involving a large amount of equipment," Johnson said. "The scale of this operation is

about five times that of what we ordinarily do."
The 2nd Infantry Division's 14,000 troops form the mainstay of the 37,000 U.S. troops in South Korea.
For decades, the U.S. troops have buttressed South Korea's 650,000-member military in guarding against the communist North's

1.1 million-member military, the world's fifth-largest.
Since announcing the redeployment of the 3,600 soldiers to Iraq, Washington also has said it plans to withdraw about a third

of the remaining troops by the end of 2005 as part of a global realignment.
Talk of reducing the U.S. military presence is sometimes unsettling in South Korea, which still has painful memories of the

North Korean invasion that triggered the 1950-53 Korean War.
Many South Koreans fear that a reduction in U.S. troops might shake the delicate military balance on the peninsula amid

tensions over the North's nuclear weapons program. It also has prompted President Roh Moo-hyun to say his country is ready to

play a bigger role in defending itself.
U.S. troops led U.N. forces during the Korean War, defending South Korea from North Korea, which was backed by China and the

former Soviet Union. The U.S. troops have since stayed on.
? 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

-----------------------------------------------------------------------------------
Beijing tells Moscow of long-range missile tests during Rice visit
The Chinese government has informed Russia that it plans to conduct flight tests of three long-range missiles in July.

In the past, China's military has used the tests to send political signals. Disclosure of the planned tests came during the

visit by White House National Security Adviser Condoleezza Rice to China.

--------------------------------------------------------------------------------
Infusion of Chinese spies reported in Hong Kong
--------------------------------------------------------------------------------
HEIMAT AHEM? WHAT? TY JAMES TARANTO ...WHERE IS RIDGE WHEN YOU NEED HIM? SYRIANS *&^%$#@!



http://www.womenswallstreet.com/WWS/article_landing.aspx?titleid=1&articleid=711
Terror in the Skies, Again?

By Annie Jacobsen

A WWS Exclusive Article


Note from the E-ditors: You are about to read an account of what happened during a domestic flight that one of our writers,

Annie Jacobsen, took from Detroit to Los Angeles. The WWS Editorial Team debated long and hard about how to handle this

information and ultimately we decided it was something that should be shared. What does it have to do with finances? Nothing,

and everything. Here is Annie's story.


On June 29, 2004, at 12:28 p.m., I flew on Northwest Airlines flight #327 from Detroit to Los Angeles with my husband and our

young son. Also on our flight were 14 Middle Eastern men between the ages of approximately 20 and 50 years old. What I

experienced during that flight has caused me to question whether the United States of America can realistically uphold the

civil liberties of every individual, even non-citizens, and protect its citizens from terrorist threats.

On that Tuesday, our journey began uneventfully. Starting out that morning in Providence, Rhode Island, we went through

security screening, flew to Detroit, and passed the time waiting for our connecting flight to Los Angeles by shopping at the

airport stores and eating lunch at an airport diner. With no second security check required in Detroit we headed to our gate

and waited for the pre-boarding announcement. Standing near us, also waiting to pre-board, was a group of six Middle Eastern

men. They were carrying blue passports with Arabic writing. Two men wore tracksuits with Arabic writing across the back. Two

carried musical instrument cases - thin, flat, 18 long. One wore a yellow T-shirt and held a McDonald's bag. And the sixth

man had a bad leg -- he wore an orthopedic shoe and limped. When the pre-boarding announcement was made, we handed our

tickets to the Northwest Airlines agent, and walked down the jetway with the group of men directly behind us.

My four-year-old son was determined to wheel his carry-on bag himself, so I turned to the men behind me and said, You go

ahead, this could be awhile. No, you go ahead, one of the men replied. He smiled pleasantly and extended his arm for me to

pass. He was young, maybe late 20's and had a goatee. I thanked him and we boarded the plan.

Once on the plane, we took our seats in coach (seats 17A, 17B and 17C). The man with the yellow shirt and the McDonald's bag

sat across the aisle from us (in seat 17E). The pleasant man with the goatee sat a few rows back and across the aisle from us

(in seat 21E). The rest of the men were seated throughout the plane, and several made their way to the back.


As we sat waiting for the plane to finish boarding, we noticed another large group of Middle Eastern men boarding. The first

man wore a dark suit and sunglasses. He sat in first class in seat 1A, the seat second-closet to the cockpit door. The other

seven men walked into the coach cabin. As aware Americans, my husband and I exchanged glances, and then continued to get

comfortable. I noticed some of the other passengers paying attention to the situation as well. As boarding continued, we

watched as, one by one, most of the Middle Eastern men made eye contact with each other. They continued to look at each

other and nod, as if they were all in agreement about something. I could tell that my husband was beginning to feel anxious.

The take-off was uneventful. But once we were in the air and the seatbelt sign was turned off, the unusual activity began.

The man in the yellow T-shirt got out of his seat and went to the lavatory at the front of coach -- taking his full

McDonald's bag with him. When he came out of the lavatory he still had the McDonald's bag, but it was now almost empty. He

walked down the aisle to the back of the plane, still holding the bag. When he passed two of the men sitting mid-cabin, he

gave a thumbs-up sign. When he returned to his seat, he no longer had the McDonald's bag.

Then another man from the group stood up and took something from his carry-on in the overhead bin. It was about a foot long

and was rolled in cloth. He headed toward the back of the cabin with the object. Five minutes later, several more of the

Middle Eastern men began using the forward lavatory consecutively. In the back, several of the men stood up and used the back

lavatory consecutively as well.

For the next hour, the men congregated in groups of two and three at the back of the plane for varying periods of time.

Meanwhile, in the first class cabin, just a foot or so from the cockpit door, the man with the dark suit - still wearing

sunglasses - was also standing. Not one of the flight crew members suggested that any of these men take their seats.

Watching all of this, my husband was now beyond anxious. I decided to try to reassure my husband (and maybe myself) by

walking to the back bathroom. I knew the goateed-man I had exchanged friendly words with as we boarded the plane was seated

only a few rows back, so I thought I would say hello to the man to get some reassurance that everything was fine. As I stood

up and turned around, I glanced in his direction and we made eye contact. I threw out my friendliest remember-me-we-had-a-

nice-exchange-just-a-short-time-ago smile. The man did not smile back. His face did not move. In fact, the cold, defiant

look he gave me sent shivers down my spine.


When I returned to my seat I was unable to assure my husband that all was well. My husband immediately walked to the first

class section to talk with the flight attendant. I might be overreacting, but I've been watching some really suspicious

things... Before he could finish his statement, the flight attendant pulled him into the galley. In a quiet voice she

explained that they were all concerned about what was going on. The captain was aware. The flight attendants were passing

notes to each other. She said that there were people on board higher up than you and me watching the men. My husband returned

to his seat and relayed this information to me. He was feeling slightly better. I was feeling much worse. We were now two

hours into a four-in-a-half hour flight.

Approximately 10 minutes later, that same flight attendant came by with the drinks cart. She leaned over and quietly told my

husband there were federal air marshals sitting all around us. She asked him not to tell anyone and explained that she could

be in trouble for giving out that information. She then continued serving drinks.

About 20 minutes later the same flight attendant returned. Leaning over and whispering, she asked my husband to write a

description of the yellow-shirted man sitting across from us. She explained it would look too suspicious if she wrote the

information. She asked my husband to slip the note to her when he was done.

After seeing 14 Middle Eastern men board separately (six together, eight individually) and then act as a group, watching

their unusual glances, observing their bizarre bathroom activities, watching them congregate in small groups, knowing that

the flight attendants and the pilots were seriously concerned, and now knowing that federal air marshals were on board, I was

officially terrified.. Before I'm labeled a racial profiler or -- worse yet -- a racist, let me add this. A month ago I

traveled to India to research a magazine article I was writing. My husband and I flew on a jumbo jet carrying more than 300

Hindu and Muslim men and women on board. We traveled throughout the country and stayed in a Muslim village 10 miles outside

Pakistan. I never once felt fearful. I never once felt unsafe. I never once had the feeling that anyone wanted to hurt me.

This time was different.

Finally, the captain announced that the plane was cleared for landing. It had been four hours since we left Detroit. The

fasten seat belt light came on and I could see downtown Los Angeles. The flight attendants made one final sweep of the cabin

and strapped themselves in for landing. I began to relax. Home was in sight.

When I returned to my seat I was unable to assure my husband that all was well. My husband immediately walked to the first

class section to talk with the flight attendant. I might be overreacting, but I've been watching some really suspicious

things... Before he could finish his statement, the flight attendant pulled him into the galley. In a quiet voice she

explained that they were all concerned about what was going on. The captain was aware. The flight attendants were passing

notes to each other. She said that there were people on board higher up than you and me watching the men. My husband returned

to his seat and relayed this information to me. He was feeling slightly better. I was feeling much worse. We were now two

hours into a four-in-a-half hour flight.

Approximately 10 minutes later, that same flight attendant came by with the drinks cart. She leaned over and quietly told my

husband there were federal air marshals sitting all around us. She asked him not to tell anyone and explained that she could

be in trouble for giving out that information. She then continued serving drinks.

About 20 minutes later the same flight attendant returned. Leaning over and whispering, she asked my husband to write a

description of the yellow-shirted man sitting across from us. She explained it would look too suspicious if she wrote the

information. She asked my husband to slip the note to her when he was done.

After seeing 14 Middle Eastern men board separately (six together, eight individually) and then act as a group, watching

their unusual glances, observing their bizarre bathroom activities, watching them congregate in small groups, knowing that

the flight attendants and the pilots were seriously concerned, and now knowing that federal air marshals were on board, I was

officially terrified.. Before I'm labeled a racial profiler or -- worse yet -- a racist, let me add this. A month ago I

traveled to India to research a magazine article I was writing. My husband and I flew on a jumbo jet carrying more than 300

Hindu and Muslim men and women on board. We traveled throughout the country and stayed in a Muslim village 10 miles outside

Pakistan. I never once felt fearful. I never once felt unsafe. I never once had the feeling that anyone wanted to hurt me.

This time was different.

Finally, the captain announced that the plane was cleared for landing. It had been four hours since we left Detroit. The

fasten seat belt light came on and I could see downtown Los Angeles. The flight attendants made one final sweep of the cabin

and strapped themselves in for landing. I began to relax. Home was in sight.

Suddenly, seven of the men stood up -- in unison -- and walked to the front and back lavatories. One by one, they went into

the two lavatories, each spending about four minutes inside. Right in front of us, two men stood up against the emergency

exit door, waiting for the lavatory to become available. The men spoke in Arabic among themselves and to the man in the

yellow shirt sitting nearby. One of the men took his camera into the lavatory. Another took his cell phone. Again, no one

approached the men. Not one of the flight attendants asked them to sit down. I watched as the man in the yellow shirt, still

in his seat, reached inside his shirt and pulled out a small red book. He read a few pages, then put the book back inside his

shirt. He pulled the book out again, read a page or two more, and put it back. He continued to do this several more times.

I looked around to see if any other passengers were watching. I immediately spotted a distraught couple seated two rows back.

The woman was crying into the man's shoulder. He was holding her hand. I heard him say to her, You've got to calm down.

Behind them sat the once pleasant-smiling, goatee-wearing man.

I grabbed my son, I held my husband's hand and, despite the fact that I am not a particularly religious person, I prayed. The

last man came out of the bathroom, and as he passed the man in the yellow shirt he ran his forefinger across his neck and

mouthed the word No.

The plane landed. My husband and I gathered our bags and quickly, very quickly, walked up the jetway. As we exited the jetway

and entered the airport, we saw many, many men in dark suits. A few yards further out into the terminal, LAPD agents ran

past us, heading for the gate. I have since learned that the representatives of the Federal Bureau of Investigation (FBI),

the Los Angeles Police Department (LAPD), the Federal Air Marshals (FAM), and the Transportation Security Association (TSA)

met our plane as it landed. Several men -- who I presume were the federal air marshals on board -- hurried off the plane and

directed the 14 men over to the side.

Knowing what we knew, and seeing what we'd seen, my husband and I decided to talk to the authorities. For several hours my

husband and I were interrogated by the FBI. We gave sworn statement after sworn statement. We wrote down every detail of our

account. The interrogators seemed especially interested in the McDonald's bag, so we repeated in detail what we knew about

the McDonald's bag. A law enforcement official stood near us, holding 14 Syrian passports in his hand. We answered more

questions. And finally we went home.


Home Sweet Home
The next day, I began searching online for news about the incident. There was nothing. I asked a friend who is a local news

correspondent if there were any arrests at LAX that day. There weren't. I called Northwest Airlines' customer service. They

said write a letter. I wrote a letter, then followed up with a call to their public relations department. They said they

were aware of the situation (sorry that happened!) but legally they have 30 days to reply.

I shared my story with a few colleagues. One mentioned she'd been on a flight with a group of foreign men who were acting

strangely -- they turned out to be diamond traders. Another had heard a story on National Public Radio (NPR) shortly after

9/11 about a group of Arab musicians who were having a hard time traveling on airplanes throughout the U.S. and couldn't get

seats together. I took note of these two stories and continued my research. Here are excerpts from an article written by

Jason Burke, Chief Reporter, and published in The Observer (a British newspaper based in London) on February 8, 2004:

Terrorist bid to build bombs in mid-flight: Intelligence reveals dry runs of new threat to blow up airliners

Islamic militants have conducted dry runs of a devastating new style of bombing on aircraft flying to Europe, intelligence

sources believe.

The tactics, which aim to evade aviation security systems by placing only components of explosive devices on passenger jets,

allowing militants to assemble them in the air, have been tried out on planes flying between the Middle East, North Africa

and Western Europe, security sources say.

...The... Transportation Security Administration issued an urgent memo detailing new threats to aviation and warning that

terrorists in teams of five might be planning suicide missions to hijack commercial airliners, possibly using common items

...such as cameras, modified as weapons.

...Components of IEDs [improvised explosive devices]can be smuggled on to an aircraft, concealed in either clothing or

personal carry-on items... and assembled on board. In many cases of suspicious passenger activity, incidents have taken place

in the aircraft's forward lavatory.

So here's my question: Since the FBI issued a warning to the airline industry to be wary of groups of five men on a plane who

might be trying to build bombs in the bathroom, shouldn't a group of 14 Middle Eastern men be screened before boarding a

flight?


Apparently not. Due to our rules against discrimination, it can't be done. During the 9/11 hearings last April, 9/11

Commissioner John Lehman stated that ...it was the policy (before 9/11) and I believe remains the policy today to fine

airlines if they have more than two young Arab males in secondary questioning because that's discriminatory.

So even if Northwest Airlines searched two of the men on board my Northwest flight, they couldn't search the other 12 because

they would have already filled a government-imposed quota.

I continued my research by reading an article entitled Arab Hijackers Now Eligible For Pre-Boarding from Ann Coulter (www.

anncoulter.com):

On September 21, as the remains of thousands of Americans lay smoldering at Ground Zero, [Secretary of Transportation Norman]

Mineta fired off a letter to all U.S. airlines forbidding them from implementing the one security measure that could have

prevented 9/11: subjecting Middle Eastern passengers to an added degree of pre-flight scrutiny. He sternly reminded the

airlines that it was illegal to discriminate against passengers based on their race, color, national or ethnic origin or

religion.

Coulter also writes that a few months later, at Mr. Mineta's behest, the Department of Transportation (DOT) filed complaints

against United Airlines and American Airlines (who, combined, had lost 8 pilots, 25 flight attendants and 213 passengers on

9/11 - not counting the 19 Arab hijackers). In November 2003, United Airlines settled their case with the DOT for $1.5

million. In March 2004, American Airlines settled their case with the DOT for $1.5 million. The DOT also charged Continental

Airlines with discriminating against passengers who appeared to be Arab, Middle Eastern or Muslim. Continental Airlines

settled their complaint with the DOT in April of 2004 for $.5 million.

From what I witnessed, Northwest Airlines doesn't have to worry about Norman Mineta filing a complaint against them for

discriminatory, secondary screening of Arab men. No one checked the passports of the Syrian men. No one inspected the

contents of the two instrument cases or the McDonald's bag. And no one checked the limping man's orthopedic shoe. In fact,

according to the TSA regulations, passengers wearing an orthopedic shoe won't be asked to take it off. As their site states,

Advise the screener if you're wearing orthopedic shoes...screeners should not be asking you to remove your orthopedic shoes

at any time during the screening process. (Click here to read the TSA website policy on orthopedic shoes and other medical

devices.)

I placed a call to the TSA and talked to Joe Dove, a Customer Service Supervisor. I told him how we'd eaten with metal

utensils moments in an airport diner before boarding the flight and how no one checked our luggage or the instrument cases

being carried by the Middle Eastern men. Dove's response was, Restaurants in secured areas -- that's an ongoing problem. We

get that complaint often. TSA gets that complaint all the time and they haven't worked that out with the FAA. They're aware

of it. You've got a good question. There may not be a reasonable answer at this time, I'm not going to BS you.

At the Detroit airport no one checked our IDs. No one checked the folds in my newspaper or the contents of my son's backpack.

No one asked us what we'd done during our layover, if we bought anything, or if anyone gave us anything while we were in the

airport. We were asked all of these questions (and many others ) three weeks earlier when we'd traveled in Europe -- where

passengers with airport layovers are rigorously questioned and screened before boarding any and every flight. In Detroit no

one checked who we were or what we carried on board a 757 jet liner bound for American's largest metropolis.

Two days after my experience on Northwest Airlines flight #327 came this notice from SBS TV, The World News, July 1, 2004:

The U.S. Transportation and Security Administration has issued a new directive which demands pilots make a pre-flight

announcement banning passengers from congregating in aisles and outside the plane's toilets. The directive also orders flight

attendants to check the toilets every two hours for suspicious packages.

Through a series of events, The Washington Post heard about my story. I talked briefly about my experience with a

representative from the newspaper. Within a few hours I received a call from Dave Adams, the Federal Air Marshal Services (

FAM) Head of Public Affairs. Adams told me what he knew:

There were 14 Syrians on NWA flight #327. They were questioned at length by FAM, the FBI and the TSA upon landing in Los

Angeles. The 14 Syrians had been hired as musicians to play at a casino in the desert. Adams said they were scrubbed. None

had arrest records (in America, I presume), none showed up on the FBI's no fly list or the FBI's Most Wanted Terrorists List.

The men checked out and they were let go. According to Adams, the 14 men traveled on Northwest Airlines flight #327 using

one-way tickets. Two days later they were scheduled to fly back on jetBlue from Long Beach, California to New York -- also

using one-way tickets.


I asked Adams why, based on the FBI's credible information that terrorists may try to assemble bombs on planes, the air

marshals or the flight attendants didn't do anything about the bizarre behavior and frequent trips to the lavatory. Our FAM

agents have to have an event to arrest somebody. Our agents aren't going to deploy until there is an actual event, Adams

explained. He said he could not speak for the policies of Northwest Airlines.

So the question is... Do I think these men were musicians? I'll let you decide. But I wonder, if 19 terrorists can learn to

fly airplanes into buildings, couldn't 14 terrorists learn to play instruments?

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Young guns conspire to get rid of Chirac
By Philip Delves Broughton in Paris
(Filed: 17/07/2004)
President Jacques Chirac's ambition to run for a third term as president, when he will be 74, has provoked a crisis at the

heart of his government and party which has now flared spectacularly into the open.
A younger generation, led by Nicolas Sarkozy, the finance minister, is flagrantly conspiring to end Mr Chirac's political

career on their timetable rather than his, ahead of the 2007 presidential election. Rebels say they are tired of his

moderation and cronyism and that France desperately needs more dynamic leadership.
In a once unthinkable display of lese-majeste, supporters of Mr Sarkozy booed the president during the Bastille Day garden

party at the ?lys?e Palace after Mr Chirac criticised his finance minister's ambition and manoeuvring in his annual televised

interview.
The machinations in the court of the president, the finance minister and their party, the Union pour un Mouvement Populaire,

were summed up yesterday on the front page of the newspaper Lib?ration, which showed Mr Sarkozy and Mr Chirac shaking hands

beside the headline: "How far will they go?"
The newspapers have been packed for several days with reports from meetings of loyalists on both sides. Mr Chirac's old guard

have been rallied for one last stand for their man, while Mr Sarkozy's gunslingers are taking every opportunity to paint the

president as well past his prime.
The latest twist came yesterday when Alain Jupp?, the former prime minister and Mr Chirac's chosen heir, resigned from the

presidency of the party. He had announced his resignation months ago, following his conviction for abusing public funds while

he served Mr Chirac when the president was mayor of Paris. His conviction bars him from public office for 10 years, ruling

him out of standing for the presidency at the next election.
It is up to Mr Sarkzoy, 49, who is wildly popular among his party's grassroots, whether he wants the party presidency. It

would give him control of a rich and powerful electoral machine as well as extensive powers of patronage.
Mr Chirac has said he will not allow any minister to hold a post outside government, despite the fact that he spent most of

his career doing that.
In his Bastille Day interview, he said that if any of his ministers won the UMP presidency, "they will resign immediately or

I will immediately sack them".
Mr Sarkozy has said he will decide by the end of the summer whether the finance ministry or the party means more to him.
Mr Chirac's determination to stop Mr Sarkozy's ascent, rather than take advantage of his popularity, has depressed many on

the French Right. "Nicolas Sarkozy carries many people's hope to be the next president of the republic and it would have been

much easier if Jacques Chirac calmly worked for his succession," Bernard Debr?, an MP representing the UMP, said yesterday.
During Thursday's cabinet meeting, Mr Chirac was reported to have ignored Mr Sarkozy, who for reasons of protocol always sits

next to president. Mr Sarkozy's allies said he would not respond in kind to the president's slap-down, but would concentrate

on the issues facing France.
He said on leaving the frosty meeting: "Now is not the time or place to comment, but the French people know very well what I

have tried to do for them over the past two and a half years."
Many business leaders, disenchanted by Mr Chirac's timid economic reforms, are backing Mr Sarkozy.
Last night, the minister addressed a UMP rally in La Baule on the Atlantic coast. His supporters say winning control of the

party created by Mr Chirac, then turning it against him, would be his greatest act of revenge.

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U.S. Allows Cuban Biotech Deal
NewsMax.com Wires
Friday, July 16, 2004
SAN FRANCISCO - In a rare exception to long-standing American foreign policy, U.S. officials have approved drug developer

CancerVax Corp.'s deal with the Cuban government to develop three experimental cancer drugs created in Havana.
It's the first such commercial deal approved by the U.S. government between a U.S. biotechnology company and Cuba, which has

spent $1 billion building a biotechnology program that is among the most advanced in the Third World. One of the three drugs

included in the deal attacks a cancer cell in a novel way.
The biotechnology company announced the deal Thursday.
Government approval comes as President Bush toughens the 41-year-old economic embargo of the communist nation. On June 30,

Bush implemented new rules that sharply reduce Cuba-bound dollar flows from the United States and curtail visits to Cuba by

cultural and academic groups as well as Cuban-Americans.
CancerVax will develop the drugs in its Carlsbad laboratories and share profits with the Cuban government if any of the drugs

are approved for sale in the United States. CancerVax is a small, money-losing company that doesn't have any drugs approved

for sale. It just recently began selling its stock publicly.
The deal calls for CancerVax to pay Cuba $2 million annually over the next three years.
CancerVax agreed to the U.S. government's demands to pay Cuba in food and medicine instead of cash. The State Department

recommended approval of the deal, which was ultimately granted by the Treasury Department.
Both departments said the U.S. government was open to considering similar drug deals, but that it will continue to restrict

the flow of U.S. currency to Cuba.
? 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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Russia Demands That Georgia Return Army Equipment
16 July 2004 -- The Russian military is demanding that Georgia return the army trucks its security forces seized last week in

the separatist republic of South Ossetia.
Speaking at the end of a two-day meeting of the Joint Control Commission on South Ossetia in Moscow, General Valerii

Yevnevich said he had conveyed his demand to the Georgian delegation.
"The vehicles with ammunition and personal belongings of the Russian military personnel must be returned without any

preconditions to the same location where they were seized," he said.
Georgia claims the Russian convoy was loaded with ammunition meant for South Ossetia's separatist regime. Russia in turn says

the consignment was destined for its peacekeeping force in the area.
The Moscow talks ended yesterday with all sides involved -- Russia, Georgia, South Ossetia, and Russia's republic of North

Ossetia -- agreeing to work together toward avert further escalation in the region.
A string of incidents involving skirmishes and the capture of Georgian peacekeepers by South Ossetian forces has kept tension

high in the area in the past two weeks.
South Ossetia seceded from Georgia in the early 1990s, but Georgia's new leaders have pledged to reassert Tbilisi's control

over the province.
(RTR/Novosti gruziya)

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New York ruckus brought to you courtesy of Teresa Heinz-Kerry
by Judi McLeod
She may sport fashionable togs rather than a face mask, but the chaos expected during the upcoming GOP convention, is partly

courtesy of the stylish Teresa Heinz-Kerry.
The Ketchup Queen financed the shadowy Tides Foundation to the tune of $4 million to date. The Tides Foundation funds the

Ruckus Society, a notorious group of anarchists who rioted and looted Seattle during the 1999 World Trade Organization riots.
This summer, the Ruckus Society has been training protesters for the GOP Convention. Included in their how-to Book for

Dummies are mass sit-ins, blockades and pie throwing at high-level officials enroute to Madison Square Gardens.
With the money of Mrs. John Kerry, Ruckus Society members live up to their name of being ready to create a ruckus anywhere,

but they're bound to be more careful in New York than they were in Seattle. And it's not because they are afraid of The

Terminator who's scheduled to give one of the GOP' keynote addresses. It's because they don't want their rioting, looting,

sit-ins and blockades to leave the impression that the Dems and their gaggle of Hollywood supporters are the bad guys. It's

the Johnny America shout mimicking Paul Revere: "The Republicans are coming! The Republicans are coming!" that they want to

stick in the public mind.
In Ruckus Society Director John Seller's own words: "The Republicans would love to have images coming out of New York City

that make them look like the reasonable ones like they're about responsibility and law and order and creating a safe society,

and that the left was unreasonable and violent."
Rhetoric aside, with tactics like dog decoys intended to deliberately miscue bomb sniffing dogs in their bag of dirty tricks,

tossing marbles under the hooves of police horses and using homemade slingshots to pelt the noble beasts, radical protesters

should be prepared to wear the unreasonable shoe that best fits them.
While some 600,000 passengers travel to Penn Station on regular working days, protesters are hoping that their handiwork will

see the necessity of having to evacuate Madison Square Garden.
All lessons being taught to willing protestors at the Ruckus knee are ones to make it less easy for the New York Police

Department to maintain public safety.
Philadelphia Police Commissioner John Timoney calls radical protesters what they are, "criminal conspirators".
"There's a cadre, if you will, of criminal conspirators who are about the business of planning conspiracies to go in and

cause mayhem and cause property damage and cause violence in major cities in America that have large conventions and large

numbers of people coming in for one reason or another."
Nothing, least of all commonsense will stop the radicals who are on a mission the equivalent of telling the not so long ago

besieged Big Apple to get out of town by sunset.
"We will draw our examples and inspiration from the brave shapers of history who came before us and those who put their

bodies on the line to gain independence," was one of the loftier protester warnings on the Internet.
Ruckus Society patron Teresa Heinz-Kerry was a flower child of the 60s when she worked as a United Nations interpreter in

Geneva. It was when she was hanging out for an Earth Day rally in 1990 that she first ran into the guy with the same initials

as JFK.
The socialite, who partly financed the coming ruckus in Madison Square Garden, is not likely to risk her public safety by

being in New York. Her protest days long over, for Teresa Heinz-Kerry the Aug. 31 Day of Civil Disobedience will be as tame

as the ketchup bottle on the kitchen table as she watches events from one of her half dozen mansions.

Canada Free Press founding editor Judi McLeod is an award-winning journalist with 30 years experience in the media. A former

Toronto Sun and Kingston Whig Standard columnist, she has also appeared on Newsmax.com, the Drudge Report, Foxnews.com, and

World Net Daily. Judi can be reached at: cfp@canadafreepress.com.


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Analysis: Draining The 'Cesspool': Internet Legislation In Russia
By Julie A. Corwin
Although only about 15 million Russians -- roughly 10 percent of the population -- regularly access the Internet, the reach

of news or information posted on the Internet could extend to as much as one-third of the population, according to Ivan

Zasurskii, deputy general director of Rambler. In an interview with "Novaya gazeta," No. 45, he noted that all urban

populations have access to information from the Internet via "horizontal channels" of communication. For example, radio talk

-show hosts and DJs regularly pick up "hot" themes from the Internet and immediately broadcast them. If Zasurskii is correct,

will the Internet's expanding reach attract increased attention from authorities?
After all, government restrictions on the media under President Vladimir Putin appear to be directly proportional to a

particular medium's influence. Television, the most popular media sector, is subject to the most controls, while newspapers

face considerably less scrutiny. Which path will the Internet, currently one of Russia's most vibrant information realms,

take in the future?
At present, at least two efforts are under way to draft legislation to regulate the Internet in Russia, and these efforts

could bear fruit as early as next year. Last month, State Duma Deputy Vladimir Tarachev (Unified Russia) told "Russkii

fokus," No. 21, that he has been working on a bill with an initiative group for the past three years, adding that it is 95

percent ready. After a group based in the Federation Council submits its version to the Duma, the members of Tarachev's group

will present their draft, which will serve as the Duma's alternative version.
Tarachev, who is a member of the Duma Banking Committee, said this is unlikely to happen before the end of this year. About

two weeks earlier, Dmitrii Mezentsev, chairman of the Federation Council's Information Policy Committee, told a press

conference in Moscow that he is part of a working group that is also preparing legislation to regulate the Internet, Interfax

reported on 3 June. Mezentsev said his group is still not sure whether a separate law on the Internet is needed or whether

the new version of the law on mass media currently being drafted should be augmented. He also said the shape of the new bill

will not be determined before next year.
Details of Tarachev's and Mezentsev's plans followed months of denials that a project to draft a new law on the Internet was

in the works. Duma Information Policy Committee Chairman Valerii Komissarov (Unified Russia) and committee Deputy Chairman

Boris Reznik (Unified Russia) stated categorically in March that their committee is not working on legislation to regulate

the Internet (see "RFE/RL Russian Political Weekly," 15 April 2004). However, Reznik noted that attempts to draft such

legislation have been repeatedly undertaken, and the last of these was an initiative by a deputy from the last Duma,

Aleksandr Shubin (Union of Rightist Forces). In 2000, Reznik, Komissarov, and Konstantin Vetrov, a Liberal Democratic Party

of Russia deputy who was then chairman of the Information Policy Committee, were part of a working group to develop a law on

the Internet. Their focus was drafting a law that would protect intellectual-property rights and regulate other economic-

related issues.
One difference between that attempt and the latest initiatives will likely be a new emphasis on regulating Internet content.

Mezentsev denied that he and his colleagues are even discussing the introduction of any censorship on the web. However, he

also said he would consider banning information that could pose a threat to people's lives or security. In addition, Lyudmila

Narusova, the Federation Council representative for the Tuva Republic's legislature and a member of Mezentsev's working

group, gave an interview with "Novye izvestiya" on 3 June in which she said she favors increasing state control over the

Internet because it has become "a cesspool." "On the Internet, one can find the most incredible rumors, including some that

denigrate people's reputations," Narusova said. "And while one can sue a newspaper, this is virtually impossible with the

Internet."
Some analysts linked the new legislative efforts with a broader trend of expanding state influence over civil society. In an

interview with Ekho Moskvy on 3 June, media-law expert Fedor Kravchenko commented that the purpose of the new bills most

likely is to increase state control over the Internet. "Just as now not one television company can escape the Kremlin's grip,

in the same way, most likely, they would like some instrument of control over information on the Internet," Kravchenko said.

"Today, this sphere is too uncontrolled."
Other analysts see commercial interests driving the process. Anton Nosik, editor of lenta.ru, told a press conference in

Moscow in May that Tarachev's Internet bill was developed in extreme secrecy and that the people behind it are not interested

in censorship per se, but in a "redistribution of property in the virtual market, which they have finally noticed and want to

get their hands on." Participating in a panel at RFE/RL on 10 June, Glasnost Defense Foundation head Aleksei Simonov said his

organization's priority is to preserve the law on mass media in its current form. He predicted that finishing a draft law on

the Internet could take many years, considering that the law on mass media has required almost a decade so far.
In an interview with "Novaya gazeta," No. 45, Zasurskii expressed doubt about what the government could really do to control

the Internet even if it wants to. "You have to be realistic," he said. "How many websites are there on the Internet? Imagine

that a chief commissar for regulation of the Internet in Russia has been appointed. He should present a plan for finally

regulating Internet news. He will need a budget of $5 billion. He will need around 200-300 specialists. Who will do this? Who

needs this? The Matrix will never try to control everything. Because when you try to control everything, you weaken yourself.

It is necessary to control [only] the most important." He also noted that is easy to make an electronic publication out of

the reach of authorities: "You simply relocate it to the United States and put it out in Russian. Such is the case with

newsru.com. Try and shut down newsru.com, please."
According to Zasurskii, the conflict is really a centuries-old one in Russia between conservative forces and a modernizing

elite that is using a new technology that is impossible to wipe out.


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Russia Demands That Georgia Return Army Equipment
16 July 2004 -- The Russian military is demanding that Georgia return the army trucks its security forces seized last week in

the separatist republic of South Ossetia.
Speaking at the end of a two-day meeting of the Joint Control Commission on South Ossetia in Moscow, General Valerii

Yevnevich said he had conveyed his demand to the Georgian delegation.
"The vehicles with ammunition and personal belongings of the Russian military personnel must be returned without any

preconditions to the same location where they were seized," he said.
Georgia claims the Russian convoy was loaded with ammunition meant for South Ossetia's separatist regime. Russia in turn says

the consignment was destined for its peacekeeping force in the area.
The Moscow talks ended yesterday with all sides involved -- Russia, Georgia, South Ossetia, and Russia's republic of North

Ossetia -- agreeing to work together toward avert further escalation in the region.
A string of incidents involving skirmishes and the capture of Georgian peacekeepers by South Ossetian forces has kept tension

high in the area in the past two weeks.
South Ossetia seceded from Georgia in the early 1990s, but Georgia's new leaders have pledged to reassert Tbilisi's control

over the province.
(RTR/Novosti gruziya)
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Interior Dept. Inquiry Faults Procurement
By Ellen McCarthy
Washington Post Staff Writer
Saturday, July 17, 2004; Page E03
The Department of Interior's inspector general found that lax procurement controls in one of the agency's contracting centers

allowed information technology contracts to be misused to hire prison interrogators.
CACI International Inc. of Arlington and Lockheed Martin Corp. of Bethesda were hired to provide interrogation support under

umbrella contracts designed to give government agencies quick access to the companies' technology products and services.
The inspector general's report, released last night, blamed a "fee-for-service operation, where procurement personnel in

their eagerness to enhance organization revenues have found shortcuts to federal procurement procedures."
Lockheed's employees were hired by the Navy for interrogation work at its base in Guantanamo Bay, Cuba. CACI provided

interrogators to the Army in Iraq, and one of its employees was implicated in an Army report on abuses at Abu Ghraib prison.
Both contracts were awarded by the General Services Administration and managed by the Interior Department's National Business

Center in Fort Huachuca, Ariz. The agency's inspector general, Earl E. Devaney, said a lack of oversight of procurement

officials at the center contributed to the improper contracting.
Devaney recommended that the agency end contracts with CACI and Lockheed Martin that fall outside the scope of their intended

purpose. He urged Interior to develop new policies and management controls.
Interior spokesman Frank Quimby said this week that Interior is going to "get out of the interrogation business." Calls to

Quimby were not returned last night.
A GSA investigation of CACI's contract found that it was awarded improperly but cleared the company to continue doing

business with the federal government.
? 2004 The Washington Post Company

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Nuclear Site Workers Exposed to Vapors
Associated Press
Saturday, July 17, 2004; Page A05
SPOKANE, Wash., July 16 -- Some workers at the Hanford nuclear reservation have been exposed to dangerous vapors from tanks

that store radioactive waste, a federal report said Friday.
The National Institute for Occupational Safety and Health investigated complaints from employees of CH2M Hill Hanford Group,

a private contractor that operates underground tanks of wastes from nuclear weapons production. The workers said their health

was at risk when working near the tanks.
NIOSH recommended that an air-purifying respirator be provided to any worker entering a tank farm, with higher-quality

equipment available for those entering known vapor-release areas.
? 2004 The Washington Post Company
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Sandia Labs Reports Classified Disk Missing
The Associated Press
Sandia National Laboratories reported Thursday it is missing a computer floppy disk marked classified.
However, lab officials said they don't believe it contains any weapons information or any other information that could

harm national security.
Lab spokesman Chris Miller said Thursday the disk was not used often, so it was difficult to determine how long it had

been missing before Sandia's Security Incident Management Program was notified June 30 that it was gone. He said he wasn't

sure whether the disk was part of a December inventory.
Sandia said the disk came from a military organization, but it did not identify the item further.
"We should have protected it much better," Sandia Laboratories Director C. Paul Robinson said. "As others are doing, we

are taking strong measures to improve the tracking of all our electronic materials."
The inventory of classified so-called removable electronic media did not find any other classified items were missing.

Removable electronic media include floppy disks and CDs.
The Security Incident Management Program notified the Department of Energy and the National Nuclear Security

Administration about the missing disk. Sandia officials said they are working with those organizations to investigate.
Sandia's revelation comes on the heels of another security breach at Los Alamos National Laboratory.
The Los Alamos breach prompted the northern New Mexico lab to halt all classified work Thursday while officials conduct a

wall-to-wall inventory of sensitive data.
Los Alamos last week reported that two items identified only as removable data storage devices containing classified

information turned up missing during a special inventory.

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Lab Director Orders Halt to Classified Work at LANL

By Leslie Hoffman
The Associated Press
Another security breach at Los Alamos National Laboratory prompted the lab to halt all classified work Thursday while

officials conduct a wall-to-wall inventory of sensitive data.
The stand-down began at noon, and the inventory of CDs, floppy disks and other electronic data storage devices is

expected to be completed within days, lab spokesman Kevin Roark said.
Last week, the lab reported that two items containing classified information turned up missing during a special inventory

for an upcoming experiment. The items were identified only as removable data storage devices.
The incident is the latest in a series of embarrassments that have prompted federal officials to put the Los Alamos

management contract up for bid for the first time in the 61-year history of the lab that built the atomic bomb.
Lab officials are searching for the items and investigating how they disappeared. Individuals with access to the missing

items can only enter their workplace under escort and work has been shut down in part of the unit involved, the Weapons

Physics Directorate, while the investigation continues, lab officials said.
The lab has had security stand-downs in the past, the last one several years ago, Roark said.
The National Nuclear Security Agency, the federal agency overseeing the labs, sent a team to Los Alamos this week to

investigate the loss.
The University of California, which has operated Los Alamos from its beginnings during the World War II race to build the

bomb, has not decided whether to compete for the contract when it expires next year.
But UC President warned on Thursday: "These types of incidents are unacceptable and they really do have to come to an

end."
Pete Nanos, director of the Los Alamos lab, briefed the UC Board of Regents on the incident, telling them: "It's time for

all the employees at Los Alamos to take a stand and ask themselves what do I believe in. The challenge before them is clear."
Nanos told employees Wednesday that because of the latest security lapse, there is talk on Capitol Hill of drafting

legislation that would forbid UC from bidding on the lab's contract, which expires in September 2005, according to the lab's

online employee newsletter.
"People in Washington just don't understand how any group of people that purports to be so intelligent can be so inept,"

Nanos was quoted as telling employees.
He called those who don't follow security rules "cowboys" and warned the work force "we're fighting for the very identity

of Los Alamos as a science laboratory," according to the newsletter.
"It's one of the last two science labs that does national security work in any major way, and I believe we're on the

verge of losing that," Nanos was quoted as telling workers.
Steven Aftergood, director of the Federation of American Scientists' project on government secrecy, applauded the stand-

down.
"It's been a long time coming, but now it's here. It's what they have to do to confront this recurring problem,"

Aftergood said.
Similarly classified material slated for destruction was reported missing in May. Lab officials later said they believe

it was, indeed, destroyed but the paperwork was faulty.
Los Alamos has been under intense scrutiny since November 2002 when allegations surfaced about purchasing fraud,

equipment theft and mismanagement. The ensuing scandal prompted an overhaul of lab business policies and a culling of top

managers.
-- -- --
Associated Press Reporter Michelle Locke in San Francisco contributed to this story.
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Pittsburgh Bank To Buy Riggs
PNC Financial to Pay $705.2 Million For Embattled Washington Institution
By Terence O'Hara
Washington Post Staff Writer
Saturday, July 17, 2004; Page A01
Riggs National Corp., reeling from multiple probes into money laundering within its once-elite embassy banking division,

yesterday agreed to sell out to a Pittsburgh banking company for a bargain price.
One of Washington's oldest commercial institutions, the 168-year-old bank will become part of PNC Financial Services Group

Inc., which will pay a combination of cash and stock worth $705.2 million. The deal is not expected to be made final,

however, for at least another six months, and PNC has reserved the right to cancel the purchase if regulators or prosecutors

charge Riggs with any further wrongdoing.
PNC officials said the purchase will give them a low-priced entry into one of the most profitable and fastest-growing banking

markets in the country. All of Riggs's 51 branches, about three-quarters of which are in the District, will be renamed PNC.
Joe L. Allbritton, the face of Riggs for more than 20 years after he bought it in 1981, and his son Robert, the current chief

executive, will cash in stock options worth millions in the deal. Joe Allbritton steadfastly refused to sell Riggs during an

era of bank consolidation when ordinary shareholders might have realized more of a premium and instead charted it on a course

that produced a long, slow decline in earnings and prestige. At the same time the bank was cultivating high-risk

relationships with foreign leaders including officials of the Saudi government, Chile's Augusto Pinochet and Equatorial

Guinea's Teodoro Obiang Nguema.
There was no showy news conference with both merger partners proclaiming the deal, which valued Riggs on the low end of

comparable purchases. In a written response to a list of questions, Joe Allbritton, who remains the company's biggest

shareholder, expressed regret that the bank will lose its independence. But he said, "Now it is time to move along and let

others manage Riggs into the future."
The money-laundering scandal permanently stained one of Riggs's few remaining assets -- its good name -- and ultimately

pushed the bank to put itself up for sale.
"In its heyday it was a world-class organization," said longtime area banker Bernard H. Clineburg. "It's sad to see them go

like this."
Riggs Bank President Lawrence I. Hebert said PNC will give Riggs customers access to a broader array of products. "We have

found the best solution for shareholders, customers, employees and our communities," Hebert said.
The bank has roots in the beginnings of Washington as a city. Riggs played a role in the financial life of the young republic

and its capital unmatched by any other institution, here or in New York. The bank financed the construction of the Washington

Monument, made sure the United States had enough gold on hand to purchase Alaska from imperial Russia, and counted dozens of

presidents and their families as customers.
But in recent years it was its relationship with the diplomatic community that distinguished Riggs in Washington. The

diplomatic business, which insiders say Joe Allbritton doted on and was personally involved in, accounted for the largest

chunk of Riggs's local deposits but was an expensive and -- ultimately unprofitable -- business to maintain. Three

relationships in the division -- Equatorial Guinea, Saudi Arabia and Augusto Pinochet -- are the focus of congressional,

regulatory and criminal investigations.
Things began to go bad for Riggs soon after Sept. 11, 2001, when news reports indirectly linked a Saudi Arabia embassy

account to one of the hijackers. This, and subsequent news reports about the bank's relationship with Equatorial Guinea,

sparked intense regulatory scrutiny of Riggs in 2002 and 2003. In May, Riggs was fined a record $25 million for its failure

to abide by regulation designed to prevent money laundering.
Riggs's problems deepened this week with the release of a Senate report that found the bank had helped Pinochet hide millions

from international prosecutors, that said it appeared to help Equatorial Guinea officials divert state oil revenue to their

personal accounts and that raised questions about the relationship between Riggs and its former top bank examiner who took an

executive position with the bank when he retired.
In the past year Riggs lost approximately 22 percent of its deposits, principally as a result of the end of its relationship

with Equatorial Guinea, its largest customer.
Sources with knowledge of the matter, speaking on condition of anonymity, said regulators continue to probe senior officials

at Riggs, including Allbritton, for their role in possible money laundering. A grand jury in the District is also

investigating Riggs's handling of the Equatorial Guinea accounts.
As a result of its regulatory problems and to prepare itself for sale, Riggs has hired teams of lawyers and experts to revamp

its compliance efforts and begun divesting itself of its international and embassy business. At the same time, the bank is in

its third year of an ambitious effort to improve its retail banking operations.
PNC plans to follow Riggs's existing retail banking strategy, however, which involves opening 30 branches in the suburbs in

the next three years and revamping existing branches. About 100 new customer service and branch employees will be hired by

PNC.
No senior executives are expected to remain after the merger, and PNC officials said no Riggs board members would join PNC's

board. Many executives, however, will profit from the deal.
The structure of the purchase is unusual in that it involves both a fixed number of PNC shares and a fixed amount of cash. If

Riggs insiders exercise options to acquire more shares, it will reduce the amount of money other shareholders receive. At

PNC's closing price Thursday, Riggs shareholders would receive about $23.59 per diluted share.
Joe Allbritton, who directly owns more than 7.4 million shares but together with his wife and son controls more than 13

million shares, could earn more than $3.4 million on options he was granted in 2001 alone. When he retired, he had options on

more than 3.8 million shares.
Robert Allbritton could realize nearly $10 million in profit from options he received in the past three years.
Hebert, a longtime Allbritton lieutenant who became chief executive of the bank in 2001, last year was granted options that

are worth more than $500,000 in the merger.
Shareholders who bought Riggs in recent years -- the stock briefly hit $30 a share in 1998 but for nearly all of the past 10

years has traded for less than $15 a share -- will probably make money. Riggs stock climbed to more than $40 a share in 1986

during a bank merger heyday. The Allbritton family together owns more than 40 percent of the stock, most of it acquired in

Joe Allbritton's hostile takeover of the bank in 1981. In 1992, the Allbrittons bought another large block -- for less than

$5 a share -- of stock when Riggs needed more capital after it was hammered by the region's commercial real estate crunch.
The price PNC is paying values Riggs at about twice its book value, or the difference between its assets and liabilities.

Most banks of this size sell for 2.5 times book value, analysts said, and many such deals have been higher than triple book

value.
"A fair offer was made for the bank," Joe Allbritton said. "The price was worked over at length and was agreed upon by all

parties. I think it is a fair price, yes."
The pending demise of the bank, after revelations of possible money laundering, left longtime customers rueful.
V. Jones, 39, of the District, a publication specialist for George Washington University, said she opened an account with

Riggs Bank a couple of weeks ago because it is in her neighborhood.
"I went with Riggs Bank because it's an old name," she said. "I even remembered it from my childhood. I was born and raised

in Washington, D.C., and now with this happening, it's going to make me go to another bank."
Riggs is the oldest publicly owned company in the metropolitan Washington area and one of the last of a long list of

disappearing local commercial icons, following companies such as Garfinckel's, Woodward & Lothrop, Hechinger, People's Drugs,

and Galt & Bro. jewelers into oblivion.
Jamel Schofield, 32, of the District, an office manager for a tour company, said she didn't like that the Riggs name will

disappear. "I think that's just sad, a sad day for D.C."
Staff writer Raymund Flandez contributed to this report.
? 2004 The Washington Post Company

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Riggs Bank Hid Assets Of Pinochet, Report Says
Senate Probe Cites Former U.S. Examiner
By Terence O'Hara and Kathleen Day
Washington Post Staff Writers
Thursday, July 15, 2004; Page A01
Riggs Bank courted business from former Chilean dictator Augusto Pinochet and helped him hide millions of dollars in assets

from international prosecutors while he was under house arrest in Britain, according to a report by Senate investigators.
The report also says the top federal bank examiner in charge of supervising the District's largest bank kept details about

Riggs's relationship with Pinochet out of the Riggs case file. That happened a few months before the examiner retired from

the government and joined Riggs as a senior executive. The examiner, R. Ashley Lee, denied the allegations to Senate

investigators.
The Senate report also said Lee recommended, while still working for the government, that the bank not be punished for

failing to take steps designed to prevent money laundering.
The report, which includes the first account of Riggs's dealings with Pinochet, is the latest blow to an institution that

once billed itself as "the most important bank in the most important city in the world." In May the bank agreed to pay $25

million in civil penalties for what federal regulators called "willful, systemic" violation of anti-money-laundering laws in

its dealings with the embassies of Saudi Arabia and Equatorial Guinea. Several other federal investigations continue into the

bank's activities, and Riggs has hired investment bankers to explore a sale of the company.
Senate investigators, who spent more than a year looking into Riggs, found that the bank attempted to use offshore and other

accounts that were misleadingly named to obscure their connection to Pinochet. In documents required by federal regulators,

for example, the bank referred to Pinochet not by name but as "a retired professional" who held a "high paying position in

public sector for many years."
Senior bank officials, including former chairman and chief executive Joseph L. Allbritton, were part of an effort to win

Pinochet's business and were familiar with the activities in his accounts, the former dictator's legal status and efforts to

seize his assets around the world, the Senate report says.
In addition to its account of Riggs's relationship with Pinochet, who was held in Britain after an indictment in Spain on

charges of "crimes against humanity," the Senate report provides new details about Riggs's dealings with Teodoro Obiang

Nguema, the dictator of Equatorial Guinea.
"It's a sordid story of a bank with a prestigious name that blatantly ignored its obligations under anti-money-laundering

laws," said Sen. Carl M. Levin (D-Mich.), the ranking minority member of the subcommittee whose staff oversaw the

investigation. "And it took our regulators five years to act in any substantive way. . . . They tolerated Riggs failures and

tolerated their dysfunctional AML [anti-money-laundering] program."
Riggs officials declined to discuss the Pinochet allegations. The bank said a written statement that it has taken steps to

improve its compliance with federal bank regulations. "It is clear that Riggs did not accomplish all that it needed to,"

Riggs said. "Specifically, with respect to the improvements that were outlined by our regulators, we regret that we did not

more swiftly and more thoroughly complete the work necessary to fully meet the expectations of our regulators. For this, the

Bank accepts full responsibility."
The report raised the possibility of further legal and regulatory problems for Riggs. But a former federal banking

enforcement lawyer, speaking on the condition of anonymity because he did not have access to the examination reports and

other source materials for the subcommittee's report, said such cases can be difficult for prosecutors because to be found

guilty of criminal wrongdoing, a bank has to have known that a customer was using an account for illicit activity.
The report by the Democratic minority staff of the permanent subcommittee on investigations provides new information about

Lee's role as a federal examiner, which is already under investigation by the Treasury Department's inspector general.
In interviews with subcommittee investigators, Lee denied that he prevented information about Riggs's relationship with

Pinochet from being included in bank examination reports. Lee did not respond to requests for comment that were made through

Riggs. Lee's lawyer, Gilbert Schwartz, who specializes in banking issues, declined through a spokesman to comment yesterday.
But based on interviews with others, the report concludes that the top federal bank examiner at Riggs might have become "too

close" to the bank to be an effective watchdog during his four years overseeing the bank, from 1998 to 2002, when Riggs was

repeatedly failing to take steps required by laws designed to prevent money laundering.
Yesterday a source with knowledge of the matter who spoke on the condition of anonymity said that the inspector general has

subpoenaed the bank's phone and meeting logs in an effort to determine, among other things, whether Lee attended meetings

with his former agency since he joined Riggs -- which could be a violation of government ethics rules.
The report found that Pinochet's deposits at Riggs varied from $4 million to $8 million, held in several personal and

corporate accounts. A "senior delegation" of bank officials traveled to South America in 1996 to solicit business, including

Pinochet's, the report said.
Pinochet has been linked to corruption, illegal arms and drug trafficking, and the disappearance or murder of thousands of

political opponents during his reign, which began with a 1973 coup and ended in 1990. Pinochet was found unfit to be

extradited to stand trial in Spain in 2000 and was allowed to return to Chile, where he still lives.
According to the report, in July 1996, about 18 months after opening a personal account at Riggs, Pinochet was indicted by

Spain on charges of genocide, terrorism and torture against Spanish citizens during his rule. A Riggs subsidiary in the

Bahamas then established two companies, Ashburton Co. Ltd. and Althorp Investment Co. Ltd., both putatively owned by trusts

set up by Riggs.
Nowhere on the trust or company documentation does Pinochet's name appear, though he and his family were the ultimate

beneficiaries, according to investigators. Ashburton held the most Pinochet money; it had a $4.5 million balance when it was

closed in 2002, the report said.
The report said Riggs concealed its relationship with Pinochet from regulators. In 2000, when the Office of the Comptroller

of the Currency asked for a list of clients' accounts controlled by foreign political figures, Pinochet's was not on the

list. In 2001, an OCC examiner happened upon a report about Althorp and asked about the beneficial owner. The examiner was

told, according to his notes from the time, that the account was for a "publicly known figure" and added that Riggs's

chairman, Allbritton, "knows" the customer. Pinochet's name was never offered. Not until spring 2002 did the OCC discover the

Pinochet accounts, when an examiner demanded an explanation for coded references to cashier's checks that had been mailed or

delivered to Pinochet.
The report states that Pinochet's account manager, Carol Thompson, sometimes spoke directly with Allbritton about Pinochet's

accounts. According to OCC documents cited in the report, a Riggs officer told OCC examiners that "Mr. Pinochet has a

relationship with the Chairman of Riggs."
According to the report, Lee recommended to his superiors at the OCC that it not take action against Riggs in 2001, despite

three successive examinations that detailed deficiencies in Riggs's adherence to rules designed to detect money laundering.

Lee said that Riggs officers had promised to remedy the problems, but the report concludes that he did little to ensure that

corrective actions were carried out.
Two other bank examiners told Senate investigators that in 2002, a month before Lee was approached by Riggs about a job, he

"specifically instructed" them not to include the Pinochet findings in the OCC's electronic database. Lee told the

investigators that the examiners under him may have been "confused" about his instruction to ensure the privacy of the

Pinochet matter. The examiners disputed that, saying Lee's instructions were "clear," the report says.
The subcommittee report also laid out new details of Riggs's relationship with Equatorial Guinea and of transfers into the

accounts controlled by the country's dictator of millions of dollars of deposits made by U.S. oil companies. The West African

country's government has been cited by the State Department and various nongovernmental and human rights groups as one of the

most corrupt in the world.
A spokesman for Sen. Norm Coleman (R-Minn.), chairman of the investigations subcommittee, said Coleman agrees with the

findings of the report but not a recommendation that oil companies be required to publicly disclose all payments to foreign

companies or individuals. The spokesman said Coleman wants to hear from oil companies before endorsing that suggestion and

therefore withheld his signature from the report.
Coleman spokesman Tom Steward said, "We agree with 99.9 percent of the report."
In addition to the Pinochet and Equatorial Guinea accounts, the subcommittee found others "equally troubling," including more

than 150 Saudia Arabian accounts. The full Senate Governmental Affairs Committee, as part of a larger look into terrorist

funding, is probing those accounts and has subpoenaed records from both the OCC and from Riggs.
? 2004 The Washington Post Company
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Our Broken Health Care System
By David S. Broder
Thursday, July 15, 2004; Page A21
When Bill Frist talks about health care, it pays to listen. Not only is he the majority leader of the Senate, but, as a

physician who specialized in heart transplants, he knows the medical system as well as he knows human anatomy.
What the Tennessee Republican said at the National Press Club earlier this week confirms what many in the health field, in

business and in both parties increasingly recognize: The American health care system is urgently in need of a basic overhaul.
The way Frist put it was this: "Old approaches are failing us today. They lead to costs that are growing too fast; we all

know that. They lead to access that is uneven. They lead to enormous quality chasms that exist today. And these old

approaches have no chance of addressing the new challenges of 2014."
"Indeed," he said, "I would argue that the status quo of health care delivery in this country is unacceptable today. It will

further deteriorate unless the care sector of 2004 is radically transformed, is re-created."
He spelled out some of the scary statistics behind those generalizations. Expense? The United States spends almost 15 percent

of its income on health care, far more than other advanced countries. That's about $5,540 a year for every man, woman and

child.
Costs are rising four times as fast as wages. One informed estimate places the cost of employer-sponsored health care

coverage for the average family at $14,500 in 2006, just two years from now.
The Census Bureau found last year that almost 44 million Americans had gone without health insurance for the previous year.

That number has been increasing by roughly 2 million a year. Families USA, a consumer group, says that almost 82 million

people, one out of three below age 65, were uninsured at some point during 2002-03, most of them for at least nine months.
Frist also talked about the "inefficiency" of the system, noting that "according to a recent Rand study, patients received

recommended care about only half the time for conditions such as my own specialty of heart disease, as well as diabetes."
But there is worse, he said: An estimated 98,000 people die each year from medical errors. Death rates for heart disease are

twice as high for African Americans as for whites.
It is a backward industry. Hospitals and doctors invest 50 percent less a year in information technology than retail

establishments or the travel industry. Your credit card goes with you, but your medical records -- on paper -- remain buried

in some physician's or hospital's files, inaccessible to any other provider if you get sick away from home.
If all of this suggests the need for a massive overhaul, that is exactly the impression Frist wants to leave. And he is far

from alone.
Next week the National Coalition on Health Care, a nonpartisan group billing itself as the largest and most broadly

representative alliance of organizations supporting health care reform, will outline what it thinks is needed -- changes that

it says "go far beyond any proposal now being considered."
Its president, Henry Simmons, a physician, testified to the Democratic platform committee last month and said exactly what

Frist said: "The main point I want to leave with you," Simmons said, "is that the crisis we face cannot be resolved by our

present strategies or with the patchwork efforts of the past. Neither can it be resolved by dealing with only one or several

of the problems we face. Resolution will require comprehensive health system reform."
That means dealing simultaneously with the problems of the uninsured, of cost controls, of uneven quality and of lagging

technology. It will require government action, in cooperation with business, the medical establishment and patients

themselves. It will be expensive, but private economists and government budget experts testify that without these needed

reforms, pension systems, corporate balance sheets and federal budgets all face near-certain disaster in coming decades.
Last month G. Richard Wagoner Jr., the chairman of General Motors, was quoted in the Detroit Free Press as telling a business

conference that rising health care costs are crippling the competitiveness of U.S. business and should be the top issue for

the winner of November's presidential election.
"It is well beyond time for all of us to put partisan politics behind us," Wagoner said, "and get together to address this

health care crisis."
The message is coming through -- loud and clear. Whoever is president will find the issue waiting for him.
davidbroder@washpost.com
? 2004 The Washington Post Company
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