>> WASHINGTON PARLOR GAMES...?


The Faisal Gill Affair
By Frank J. Gaffney Jr.
FrontPageMagazine.com | July 19, 2004
http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=14267
Readers of this e-zine may recall a troubling warning issued on these pages last November by David Horowitz and me (an editorial entitled "Why We Are Publishing This Article" that accompanied a long essay entitled "A Troubling Influence"). What made the warning so troubling was not just that its subject -- a political influence operation being mounted during wartime by Islamist organizations against the Bush Administration and U.S. government. Of particular concern was the help it documented that such entities have received from a prominent and well-connected conservative activist, Grover Norquist.

It now appears that Mr. Norquist's help has extended beyond facilitating high-level access and influence for various Muslim-American and Arab-American entities with troubling ties to, or at least sympathy for, radical Islamofascists - and even terrorists. Reportedly, his association also helped someone affiliated with such a group to gain a political appointment to an exceedingly sensitive post: "policy director" of the Department of Homeland Security's Information Analysis and Infrastructure Protection division.

As the title of this position suggests, its occupant would have access to highly sensitive information about the vulnerability of, among other things, U.S. ports, transportation infrastructure, chemical plants, oil refineries and nuclear power plants to terrorist attack. The incumbent is a 32-year-old lawyer named Faisal Gill.

It is unclear what qualified Mr. Gill for such a post. In response to press inquiries, a DHS spokeswoman declined to describe his qualifications or background so it is not known whether he has any prior experience with intelligence or, for that matter, with security policy.

What is known is that Gill's political patrons include Grover Norquist, who was listed by Gill as a reference on employment documents. After all, Gill had been a spokesman for the Taxpayers Alliance of Prince William County, Virginia, which is affiliated with Norquist's group, Americans for Tax Reform. Gill had also worked in 2001 as director of government affairs for the Islamic Free Market Institute (also known as the Islamic Institute), whose founding president was Grover Norquist.

Interestingly, news articles published after September 11 described Gill in another capacity - as a spokesman for the controversial American Muslim Council (AMC). The AMC was founded and controlled by a prominent Islamist activist, Abdurahman Alamoudi. Alamoudi was indicted last October on terrorism-related money laundering charges. While in jail awaiting trial, he has reportedly engaged in plea-bargaining by confessing to participating in a Libyan plot to murder the Crown Prince of Saudi Arabia.

For some reason, Gill is reported to have failed to list his work with the AMC on his "Standard Form 86" national security questionnaire. This is a potential felony violation of the full and truthful disclosure required by law of all applying for clearances.

According to two recently published articles in Salon.com, the FBI raised concerns last March about Gill's non-disclosure of his ties to Alamoudi's AMC. At the time, he was reportedly briefly removed from his position at DHS.

Curiously, however, Gill is said to have been reinstated within days. According to a DHS spokesman, the Department had conducted a "thorough investigation" that found Gill "exceeded all requirements" for his job.

Fortunately, on 23 June, after news reports revealed Gill's omission, attendant suspension and subsequent reinstatement, the Homeland Security's Inspector General, Clark Kent Ervin, announced that he would be launching an inquiry into how Gill received a security clearance, despite the omission. For some reason, though, the IG's report is said to require as much as six-months to complete.


Several questions cry out for answers:
o Why does an intelligence office require a "policy director"?
o Given Gill's seeming lack of qualifications, how did Gill secure this sensitive position in the first place?
o If, as appears to be the case, he did so simply through political connections, did such connections subsequently trump security and legal concerns? Was he permitted to be swiftly reinstated and allowed to this day to have access to very sensitive information - even though he apparently failed to live up to his obligations to disclose a work history that might well have disqualified him?
o Will political connections also prevent the Inspector General from performing a rigorous and fullsome review of the Gill Affair?
o How on earth could it take as long as six-months to answer these and related questions? If there are, in fact, grounds for believing Gill should not continue to serve in the DHS intelligence organization, it is imprudent in the extreme to have this investigation drag on - especially if he is going to be permitted to remain in place during the interval.
Gven the sensitivity of Faisal Gill's position and the information to which it has access, this matter must be addressed and resolved at once. A failure truthfully to complete security clearance forms is a serious - and, normally, a disqualifying - offense, particularly if the information withheld is material to decisions about whether the applicant can be cleared.
At the very least, until such time as the Inspector General's report is completed, it would seem both responsible and consistent with standard operating procedures to suspend without prejudice and with pay the object of the investigation from his position. Who could possibly object to that?

Frank J. Gaffney, Jr. is President of the Center for Security Policy in Washington. He formerly held senior positions in the Reagan Defense Department.
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>> WASHINGTON PARLOR GAMES...?2

The Bear's Lair: Life after Greenspan
By Martin Hutchinson
Published 7/19/2004 2:20 PM


WASHINGTON, July 19 (UPI) -- Speculation has begun on the successor to Federal Reserve Chairman Alan Greenspan, due to leave office when his 14-year term as Federal Reserve Board member ends in January 2006. Whoever his successor, he won't have Greenspan's enormous credibility with the markets, so monetary policy will never be the same. This is probably a good thing.

The consumer price index for June, announced Friday, was up 0.3 percent, more than expected, and consumer prices have been rising at an annual rate of 4.9 percent in the last six months. Since wages have been rising at only 2.6 percent -- in other words falling in real terms -- it's not surprising that retail sales were weak in June, and it's very questionable how much longer the current economic "recovery" is going to last.

Contrary to much calming media and analyst speculation, the rise in inflation is not a one-time blip, but the beginning of a long-term trend, caused primarily by excessive money creation over almost a decade. Further, the May inflow of foreign funds into the U.S. economy was also announced Friday; at $54.8 billion, down from $81.2 billion in April, it dropped for the fourth-successive month. As Federal Reserve governor Susan Bies confirmed after the announcement, the growing reluctance of foreign central banks to invest their hard-earned money in U.S. Treasury bonds is going to weaken the dollar, if only to lessen a little the continuing trade deficit, now running at over $550 billion per annum.

Bies no doubt didn't want to add the corollary that if foreign central banks stop buying Treasuries, and the federal budget deficit continues at its current level, then long-term as well as short-term interest rates must rise. This is obvious at another level, too; if inflation is running at 4.9 percent per annum, or even at the 3.7 percent per annum of June's superficially-anodyne figure, then a Federal Funds rate of 1.25 percent is not the beginnings of restriction, it is still wildly inflationary, being minus 2.5 percent or more in real terms.

Now that inflation has stirred, to the 3.4 percent to 4 percent range, the neutral Federal Funds rate is not 4 percent but at least 6 percent. We are a very long way from that level, and as long as we delay getting there, inflation is likely to accelerate rather than slow. This in turn of course will make the equilibrium Federal Funds rate rise further, a vicious circle last seen in the 1970s, at the end of which the Federal Funds rate peaked at 20.06 percent in the first week of January 1981 (and then people wonder why president Ronald Reagan's policies "produced" recession in his first year of office!)

It is therefore likely that in January 2006, a new Fed chairman will be struggling with a renewed bout of price inflation, being forced to push short-term interest rates higher than the state of the economy would suggest, which in turn will produce a sluggish economy or even a recession, and an unpopular Fed. At that point, whoever is appointed may wonder whether Alan Greenspan's 18 1/2-year Fed chairmanship, with the Fed chairman acquiring unprecedented market credibility, has really been worth it. Indeed, the heretical thought may arise: is huge market credibility for an inevitably fallible Fed chairman a good thing?

Fed Chairmen always want market credibility. It helps them hang onto their job, and it gives them great power, as their lightest utterance is analyzed by the entire forces of Wall Street to divine what the future may bring. Administrations who appoint Fed chairmen also want them to have credibility for one very important reason: a Fed chairman with credibility is much more likely to be able to calm the markets in periods of difficulty, and is therefore likely to preside over a lower average level of interest rates than a Fed chairman with less credibility. The lower interest rates in turn are thought likely to produce higher economic growth.

The best example of a Fed chairman without credibility is the unlucky William Miller in 1979; a perfectly competent Jimmy Carter appointee, he was forced out when inflation refused to die down, and was replaced by the draconian but undoubtedly credible Paul Volcker. All in all, credibility in a Fed chairman is seen as a no-lose proposition, having benefits but no costs.

The benefits claimed for a credible Fed chairman are those claimed before 1931 for the gold standard: greater credibility of the currency and therefore lower average interest rates. However the gold standard, when things went wrong, imposed unpleasant costs on the economy, in terms of having to reduce government spending, raise interest rates, or suffer through a recession. "Fiat" money (i.e. money whose value and quantity is decided by the government, and doesn't depend on a particular commodity) and a credible Fed chairman, on the other hand, appear to pose no such downside costs; the combination seems to offer truly something for nothing, a gift from heaven.

Of course, there's no such thing as a free lunch. Giving Fed chairmen such credibility ought to raise the question of whether they deserve it. And, on balance, most of them don't. As exhaustively chronicled in Milton Friedman and Anna Schwarz' classic 1963 history of monetary policy, the Fed bore a large share of the responsibility for the Great Depression, and total responsibility for the unexpected second downturn in 1937-38, by keeping money supply too tight at a time of severe price deflation.

It is also unquestionably true that Fed chairman William McChesney Martin (1951-70), while having coined the immortal and very apt quote that the Fed chairman's job was to "take away the punchbowl just as the party gets going," was excessively jawboned by President Lyndon Johnson and didn't actually do so in 1966-69, leaving a ghastly legacy for his successor. That successor, Arthur Burns (1970-77) in turn allowed far too rapid a growth in the money supply in 1970-72, ensuring President Richard Nixon's re-election but that his successor, Miller, would fatally lack credibility when the going got rough. Only Volcker (1979-87), of the Fed chairmen who have served more than a couple of years, deserved the credibility that he had coming into the job, and by the middle of his eight year term, he had earned.

Greenspan gained credibility at the beginning of his term, by pumping money into the system after the October 1987 stock market crash, thus ensuring that the crash was remembered as a blip, not a recession. He then increased his credibility in 1991-92 by mistakenly keeping money supply tight, at a time when modest inflation had been caused by the bail-out of the savings and loan industry, thus prolonging the 1990-91 recession and causing President George H.W. Bush to lose the 1992 election. Since 1994, Greenspan has never seen an asset bubble he didn't like, and has prolonged first the stock market bubble of 1996-2000 and then the housing bubble of 2001-04 by an exceptionally loose monetary policy, with interest rates in 2002-04 at record low levels.

Had Greenspan lacked credibility, he would not have been able to achieve this dubious feat. His monetary laxity in the late 1990s would have been scrutinized much more carefully, his repeated statements that a "productivity feast" enabled him to expand money supply more rapidly than otherwise would have been mocked, and his failure to prevent a historic mis-allocation of America's scarce investment resources in 1998-2000 would have been derided. The result would have been a smaller bubble, much more rapidly corrected, a stock and housing market that by now would not be over-valued, and a current outlook that would be for further sound growth in the U.S. economy. By January 2006, as inflation rises and the economy sinks, the advantages of a non-credible Fed chairman will be even more apparent than they are today.

The pre-1931 gold standard, or any truly fixed-parity system, had the enormous advantage that monetary control is close to automatic. Whether politicians like it or not, the market in such a system rewards saving, both government and private, and punishes profligacy, particularly government profligacy, by causing after a relatively short period a financial crisis that forces a policy reversal. To politicians, a fiat money system with a credible Fed chairman seems to offer the best of both worlds: a low inflation, low-interest-rate environment, and only loose controls over public spending or private consumption.

But like all systems where government seeks to outwit the market, this one in the long run (and I quite grant you, it's had a good innings of almost a decade) simply doesn't work. Reducing the power of the fallibly human bureaucrat, by appointing a non-credible Fed chairman, will produce better results in the long run.

Alfred E. Neuman for Fed Chairman!

-0-

(The Bear's Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that, in the long '90s boom, the proportion of "sell" recommendations put out by Wall Street houses declined from 9 percent of all research reports to 1 percent and has only modestly rebounded since. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)

-0-

Martin Hutchinson is the author of "Great Conservatives" (Academica Press, June 2004) -- details can be found on the Web site greatconservatives.com.

Copyright ? 2001-2004 United Press International
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>> WASHINGTON PARLOR GAMES...?3



Wall Street Barbecue on Capitol Hill
July 13, 2004

Coming Attractions

This week promises to be an eventful one for Wall Street as the congressional banking committees get back to work after an extended recess -- a break that prepares them for an even longer recess next month. The three major hearings on tap are:

Tuesday, July 13th, Senate Banking Committee - Review of Gramm-Leach-Bliley Act

Tuesday, July 13th, House Financial Services Committee - Oversight of OFHEO and FHFB

Thursday, July 15th, Senate Banking Committee - SEC Proposal to Regulate Hedge Funds

1. Gramm-Leach-Bliley

The senior members of the Senate Banking Committee, Chairman Richard Shelby (R-AL) and Ranking Democrat Paul Sarbanes (D-MD), are very big on oversight, which is good, because there's a lot to oversee. Conducting a review of current programs has the benefit of slowing down the creation of costly new programs and entities that will one day likewise have to be overseen by Congress.

In 1999, the Committee acceded to the demands of two leading financial services companies, Citigroup (NYSE:C) and Merrill Lynch (NYSE:MER), and changed the rules that for decades kept banks out of selling and underwriting general insurance. Citi had been working on this objective for years before the April 1998 merger of Citicorp and Travelers Insurance, but the union with the large insurer accelerated the timetable. The result was the Gramm-Leach-Bliley Act, which updated the outdated regulatory regime for the financial services industry - but only just barely.

GLBA, as it is soon came to be known, met the immediate need of Citigroup but left a number of issues in the air for the industry. The merger, which was not legal when the deal was announced, was cleverly made contingent on Congress changing the law to enable bank holding companies to affiliate with insurance companies. From that point on, enactment of GLBA was inevitable and simply became a matter of delivering sufficient incentives to key members of Congress and calling in chits that had already been sown by Citi years before. A new ersatz vehicle, the "financial holding company" was created to accommodate banks that chose to affiliate with other financial companies. The ink was still drying when Treasury Secretary Robert Rubin, who shepherded the bill through Congress, left the Clinton cabinet to join the senior leadership of Citigroup.

The other leading advocate, Merrill Lynch, trumpeted the urgent need for GLBA in increasingly shrill newspaper ads as the bill crawled through Congress. Merrill was looking for a supervisory format that satisfied EU demands that it have a single regulator, a la Basel I, for its consolidated enterprise. Under the so-called "functional regulation" scheme of GLBA, the SEC would fill that need for Merrill, much as the Federal Reserve would regulate banking organizations that chose the financial holding company format.

Of note, five years since the GLBA deal was struck, the EU is supposedly on the verge of ratifying Merrill's arrangement from a compliance and regulatory standpoint. But this is not yet certain. A nightmare scenario: the EU could look at the recent spate of corporate scandals and conclude that the SEC can't seem to regulate much of anything, at least for the moment, and certainly can't deliver anything resembling proactive surveillance. Platoons of lawyers have been gainfully employed on both sides of the Atlantic to make sure the SEC deal doesn't fall through, but don't count this chicken until it's safely in the pot.

Fed rules future deregulation

When he opened the 1999 hearings on GLBA, then-Chairman Phil Gramm (R-TX) recited a list of elements that he would not allow to get into the bill, even at the risk of ending up with no bill at all. These were brave words, but by the end of the year, the bill had built a small, powerful constituency bolstered by the tacit support of the Fed and numerous interest groups that chose to sit out this battle.

It is important to appreciate that as a direct result of GLBA the pace of so-called "financial reform" is now to be determined arbitrarily by the Fed. Asked at a recent congressional hearing when banking and commerce would be allowed to be conducted in the same entity without regulatory constraint, Fed Chairman Alan Greenspan answered candidly that convergence of banking and commerce is inevitable, but that it should not proceed until the changes of GLBA have been "fully absorbed" - meaning not while I'm still breathing.

A classic July 15, 2003 colloquy on Industrial Loan Companies that parallels the bank insurance issue between former House Financial Services Committee Chairman Jim Leach (R-IA) and a characteristically vague Greenspan illustrates the point:

Leach: This committee has given a green light to expanding a little-known charter, the industrial loan charter, to become functionally equivalent to a bank charter and to allow expansion of this charter's use nationwide without Federal Reserve or OCC oversight. Is this sound public policy?

Greenspan: "The industrial loan company issue is really a major problem with respect to commerce and banking in this country. I have always been of the opinion that over the very long run we are going to find that it is going to be very difficult to distinguish between commerce and banking with individual firms, and the issue of the notion of the current policies will become moot."

"But, well prior to that, we have a very significant problem which I think we need to address, namely, having now made a major expansion in banking and finance through Gramm-Leach-Bliley and a number of earlier activities, we have opened up our financial system very aggressively and we need to take time to begin to evaluate how significant those changes are in the world economy and in our own, and what type of regulatory structures are required and what type of risks are we running by our new, very expansionary regulatory initiatives."

"It is much too soon at this stage, in my judgment, to make an evaluation of what the consequences of or recent, very expansionary regulatory policies have been. If there is going to be a major change in policy, which, as you know, Gramm-Leach-Bliley implied and indicated that commerce and banking were still to be separated, if we are going to make that very major change--and it is a major change in regulation, it is a decision which this committee and your counterparts in the Senate, as well, both bodies, need to make, and it is a crucial decision and should not be determined by, in effect, a relatively small, presumably, act which is currently under discussion. And, indeed it is merely an amendment to a specific act which this committee is evaluating."

"Without going into the substance, which would take a while, I merely state to you that if this issue is on the table, what really is being discussed is a very much broader question, which is the issue of commerce and banking, and I hope that this committee will not allow that decision to be made inadvertently through another discussion vehicle for which there have not been significant hearings, in my judgment."

As with monetary policy, the central bank's approach to financial regulation is cautious, conducted piecemeal, but always in its own bureaucratic self-interest. The upshot, fully predictable in 1999, is that as the financial services industry becomes more global, the pace at which the leading U.S. names can adapt to market opportunities will continue to be determined by the Federal Reserve System, an institution still firmly rooted in the Nineteenth Century agrarian society that spawned it.

No fools, during every political cycle the Fed mandarins put the opening of non-bank activities up for auction, binding the largest banks to its coattails even as it speaks against the interests of other regulators. GLBA was the latest is a series of incremental changes in banking law crafted by the Fed, each of which creates as many issues as its solves, but they create rich opportunities for members of both parties to collect gratuities from the nation's largest financial institutions.

2. OFHEO and the FHLB

The election-year oversight virus also has spread to the House side, and next week, it will take the Capital Markets and Oversight Subcommittees, led by the estimable Reps. Richard Baker (R-LA) and Sue Kelly (R-NY) into the murky, shadowy world of government-subsidized housing.

The last couple of years have brought unwanted attention to Freddie Mac (NYSE:FRE) and Fannie Mae (NYSE:FNM), the GSEs that operate the secondary market for mortgages under the Orwellian premise that they can borrow cheaply because the government "implicitly" guarantees their debt, but the taxpayer need not worry, because the government is not formally obligated to back the debt. Besides, these GSEs are "Too Big To Fail," meaning that the Fed will print money to keep them afloat.

First Freddie, then Fannie, were revealed not to be the steady, risk-free overachievers they seemed after bouncing back from near-insolvency after 1989. Last year, things started coming unglued again when Freddie Mac was forced to restate earnings upward after disclosures that it had improperly accounted for earnings on the combination of mortgages, mortgage-backed securities, and derivatives that make up the asset side of its balance sheet.

Freddie responded by firing senior staff and giving assurances that it couldn't have done anything wrong. After all, it lacked the systems and expertise to account properly for its business. Besides, earnings were being adjusted upward. Freddie confessed that it was an even more profitable company than it first admitted.

At the ensuing congressional hearings, Fannie said it couldn't imagine what the fuss was about, because it was unaffected by the problems at Freddie. Ironically, most observers considered Fannie to be the riskier company, an assessment that may yet be borne out as Fannie is now engaged in an argument with its regulator over the valuation of its bond portfolio.

For investors, the immediate fallout of this controversy is increased volatility in the stocks of these quasi-governmental entities. For Congress it meant a scramble for reassurance that the agency created to regulate Freddie and Fannie was up to the task. This spring the Senate Banking Committee approved a bill intended to create a "world class" regulator, but the bill languished in the face of opposition from the GSEs and their allies in the housing, real estate, and mortgage industries.

One stumbling block came when Fed Chairman Greenspan suggested that the bill include a provision for the "orderly liquidation" of GSEs if they became insolvent. Fannie Mae CEO Franklin Raines bristled at the very idea and warned it could make investors skittish and drive up the cost of mortgages. Interestingly, Chairman Greenspan has already testified before Congress that much of the benefit provided by Fannie and Freddie is siphoned-off to investors and does not benefit home owners.

While Congress fiddles, the administration gives assurances that the bill isn't totally dead, because there could still be an "event" - as yet undefined. This is the financial equivalent of saying that a terrorist attack is due before the election. One senator worried out loud that if something did go wrong at the GSEs, the national debt would roughly double.

During the last round of hearings, a reporter asked SEC Chairman William Donaldson whether the GSEs should register their securities with the SEC. A loose translation of his response: "That's not my table." When a similar question was put to Treasury Secretary John Snow, he responded that it would not be a good idea to require registration, because the scope of GSE financing is so large. What are we missing here? The exemption from registration for GSEs was premised on the fact that the paper they issued was a close facsimile for Treasury risk, but that is not the case today. If we really believe all of the barnyard debris in the Basel II proposal about managing risk, then today's far more risky GSE paper needs to bear the same registration and disclosure requirements as other corporate obligations. This would effectively put all managers of GSEs (and possibly their regulators) under Sarbanes-Oxley, a fascinating possibility.

Freddie's ugly in-laws

A close cousin of Freddie and Fannie is the Federal Home Loan Bank System, created during the Great Depression to provide liquidity for the nation's S&Ls. The FHLB System consists of twelve semi-autonomous regional banks that are jointly and severally liable for the debt of the entire system. Each is, in effect, a GSE in its own right, and each is run by its own CEO earning a million-ish annual salary.

When most of the S&L industry imploded at the end of the '80s, the FHLB System, in a classic case of "mission creep," expanded to encompass serving the banking industry and, in a shameless imitation of the World Bank, promoting "economic development" in the nation's small towns and rural areas. These activities, it was hoped, would generate income that could help to service some of the debt from the S&L mess.

In recent years the star of the System has been the FHLB of Chicago, which created a mortgage finance program designed to offer competition to Freddie and Fannie by financing the retention of mortgages by the institutions that originate them. The success of this program placed Chicago far ahead of the other FHLBs in apparent performance.

The Chicago FHLB's last CEO, Alex Pollack, abruptly left the job to join a Washington think tank. Next week's hearing may shed light on whether Chicago under Pollack (a) went a bridge too far, (b) is being persecuted for having outperformed its peers, or both. We hear that scenario (a) is the more likely explanation.

The obscure regulator of the FHLB System, the Federal Housing Finance Board, recently underwent a leadership change of its own after its chairman, John Korsmo, while seeking to convince Congress that the FHFB can be a "world class" regulator, assured a congressman that losses at a FHLB would not affect its capital because they would come out of retained earnings. The astonished legislator proceeded to enlighten the regulator that retained earnings is by definition one of the components of capital - a fact usually imparted in a standard high school accounting course. So much for the world-class regulator.

The new chair of the FHLB, former banker Alicia Castaneda, made an immediate impression on MCs by calling for FHLBs to register their securities with the SEC, a position that seems to be growing in support despite yowling from the GSEs. We hear that the Colombian-born financial pro is smart and not afraid to speak the truth, two attributes that usually result in career death in Washington. Castaneda is also the first FHLB chair to actually work as a banker.

In the unlikely event Congress ever figures out the shape of a new regulator for all three GSEs (and perhaps the moribund FHLBs as well), Ms. Castaneda could be tapped to head it. You heard it here first.

3. SEC and Hedge Funds

William Donaldson, the former banker in the rumpled suit who chairs the SEC, has proposed an extension of the agency's regulatory authority to encompass hedge funds. This proposal is part of its response to the regulatory failures that came to light last year with the disclosure of late trading and market timing abuses at mutual funds. In what may be yet another classic case of mission creep, Donaldson suggested that if only the SEC had authority over hedge funds, it might have discovered the abuses at Canary Capital. Thus, the answer to the failure of an agency to regulate effectively is to give it more authority, but with fewer resources.

Other witnesses will include a representative of the Commodity Futures Trading Commission, an agency the SEC has sought to either kill or swallow for a number of years. This campaign stalled during the Gramm years, in part because the chair of the CFTC was Wendy Gramm, and she enjoyed the full and unabashed backing of her loyal husband, then- SBC Chairman Gramm.

During hearings on the mutual fund scandals, Donaldson assured Sarbanes that the SEC was not only an able regulator, but that it would also go so far as to create a special unit to identify "emerging problems" that demanded the Commission's attention. Unimpressed, Sarbanes, referring to the mutual fund mess that the SEC has missed, responded in his most sarcastic tone, "I think we've identified one for you right here."

Speaking of operational risk, we note again that the SEC currently lacks the physical and human capability to screen large numbers of financial statements and identify possible bad actors, thus Donaldson's offer to Sarbanes was even more gratuitous than Sarbanes and his staff even know.

A thorny issue certain to come up at the hearing is the relationship between HFs and MFs. The fact that both types of funds are sometimes run by the same management companies is used by Donaldson as a somewhat plausible justification for bringing hedge funds under the SEC. This raises issues as to allocation of costs, including compensation. Some hedge funds have complained that they would not be able to attract mutual fund managers unless they could also manage hedge funds.

LTCM all over again

The specter of the Long Term Capital management rescue, when the Federal Reserve of New York orchestrated the rescue of a private investment pool with no formal relationship to any regulator, looms over the hedge fund hearing. Don't forget that when the five families met to work out their differences in the film "The Godfather," they met in the board room at the Federal Reserve Bank of New York - the same room used for the LTCM pass-the-hat gathering. Go figure.

Fed Chairman Greenspan considers the LTCM rescue an example of the system performing admirably under stress. He has warned that bringing hedge funds under the SEC could have a chilling effect on the willingness of investors to participate, with the unintended result that less liquidity would be supplied to markets, and the likelihood of crises would increase. Also, attempts by U.S. authorities to regulate hedge funds would encourage funds to place more of their activities offshore, which would reduce the importance of the U.S. as a financial center and make it more difficult for the authorities to monitor the funds. As long as hedge funds aren't marketed to retail investors, he insists, they should be left alone.

Donaldson will point out to the Fed and the industry's friends in Congress that increasingly hedge funds are being offered to retail investors. He will contend that in case another LTCM should occur, the least the regulators should be able to do is to gather rudimentary information to help gauge the exposure.

We will report on these and other developments next week.
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AP: Clinton Adviser Probed in Terror Memos
By JOHN SOLOMON

WASHINGTON - President Clinton (news - web sites)'s national security adviser, Sandy Berger, is the focus of a criminal investigation after admitting he removed highly classified terrorism documents from a secure reading room during preparations for the Sept. 11 commission hearings, The Associated Press has learned.
Berger's home and office were searched earlier this year by FBI (news - web sites) agents armed with warrants. Some drafts of a sensitive after-action report on the Clinton administration's handling of al-Qaida terror threats during the December 1999 millennium celebration are still missing.
Berger and his lawyer said Monday night he knowingly removed handwritten notes he had taken from classified anti-terror documents he reviewed at the National Archives by sticking them in his jacket and pants. He also inadvertently took copies of actual classified documents in a leather portfolio, they said.
"I deeply regret the sloppiness involved, but I had no intention of withholding documents from the commission, and to the contrary, to my knowledge, every document requested by the commission from the Clinton administration was produced," Berger said in a statement to the AP.
Berger served as Clinton's national security adviser for all of the president's second term and most recently has been informally advising Democratic presidential candidate John Kerry (news - web sites). Clinton asked Berger last year to review and select the administration documents that would be turned over to the commission.
The FBI searched Berger's home and office with warrants earlier this year after employees of the National Archives told agents they believed they witnessed Berger put documents into his clothing while reviewing sensitive Clinton administration papers, officials said.
When asked, Berger said he returned some of the classified documents, which he found in his office, and all of the handwritten notes he had taken from the secure room, but said he could not locate two or three copies of the highly classified millennium terror report.
"In the course of reviewing over several days thousands of pages of documents on behalf of the Clinton administration in connection with requests by the Sept. 11 commission, I inadvertently took a few documents from the Archives," Berger said.
"When I was informed by the Archives that there were documents missing, I immediately returned everything I had except for a few document that I apparently had accidentally discarded," he said.
Lanny Breuer, one of Berger's attorneys, said his client has offered to cooperate fully with the investigation but has not been interviewed by the FBI or prosecutors. Berger has been told he is the subject of the investigation, Breuer said.
Government and congressional officials familiar with the investigation, who spoke only on condition of anonymity because the probe involves classified materials, said the investigation remains active and that no decision has been made on whether Berger should face criminal charges.
The officials said the missing documents were highly classified, and included critical assessments about the Clinton administration's handling of the millennium terror threats as well as identification of America's terror vulnerabilities at airports to sea ports.

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>> VLAHOS PART 1...

Outside View: The war of Ideas -- Part 1
By Michael Vlahos
A UPI Outside View commentary
Published 7/19/2004 12:45 AM


WASHINGTON, July 19 (UPI) -- All conflicts are at some level "wars of ideas." Even archaic, almost forgotten ones, like the brief war between France and Austria in 1859 over Italian national emergence, convey some sense of a struggle for "hearts and minds."

That war was a short, glorious episode, in contrast to darker traditions of European bloodletting. In two neat engagements, Magenta and Solferino, the French defeated the Austrian army and thus insured the ultimate reunification of Italy.

Certainly there was no state strategic communications effort to rival our trinity of Public Affairs, Public Diplomacy and PSYOPS. But this hardly mattered to European opinion, and especially to Italians -- in spite of Louis Napoleon's cynical calculus to acquire large bits of alpine Piedmont as Italy's reward for French help.

That was because the French "idea" in that war of ideas had natural authority. Everyone knew the context for French intervention, and all about their legacy of revolutionary ideals and Napoleon Bonaparte's vision of heroic nationalism. Even as a faux emperor, Napoleon III was nonetheless the recognizable inheritor of a positive tradition that in propaganda terms he could play to the hilt -- which of course he did.

In this war the United States' ideas -- and the U.S. story of this war -- have no such authority. Indeed in the past year Muslim support that was fairly widespread in the wake of 9/11 has evaporated. Attitudes toward the United States across the world of Islam are highly negative and continue to harden. Furthermore, the various "ideas" and stories from the other side -- the enemy -- are sympathetically transmitted and disseminated, not merely by enemy "public affairs," but by the mainstream Muslim media itself.

We find ourselves in a particularly arduous strategic information environment. In our example, Napoleon III operated comfortably in the still received context of a glorious French ideological tradition, with an instantly recognized "idea brand." Frankly France was also up against a very weak, even a "loser" competitor in European civilization -- the Austrian Empire. In stark contrast the United States finds itself waging a war of ideas within an alien civilization that it has managed to further -- almost irreparably -- alienate.

The strategic information situation today represents a threefold challenge to the United States' info-warriors. Addressing this situation, let alone countering it, is arguably beyond the reach simply of honest self-appraisal -- going through a thorough checklist of things not done or done badly. In truth the U.S. propaganda campaign in this war has failed because:

-- It was too self-referent -- it's all about us, and what we want

-- Its vision of the situation and cultural context was just plain wrong

-- It permitted the enemy to turn our own work against us

The situation requires that the United States explicitly address the fundamental problem of "message authority" rather than continue to pretend that the normal (and initially expected) prescription for a "war of ideas" still applies. It doesn't.

Right now there is no "war of ideas" because U.S. ideas have no authority among Muslims. The U.S. strategic information enterprise must undertake an effort that is both unexampled in and orthogonal to its traditions. These traditions stressed argumentation and presentation, but assumed a shared context within which this war of ideas would be played out.

This means that the enemy and the larger cultural context in which they operated could understand and relate to U.S. ideas. In other words there was enough of a shared worldview and belief system that U.S. propaganda arguments would at least be received and treated.

In World War II, the European Theater of Operations offered a familiar and receptive landscape for the strategic information campaign, especially outside of Germany. But even Japan, which on the surface looked like a completely closed world, had been a member with serious standing in the orbit of Western civilization long enough so that channels for our message still existed, and these channels would open considerably, and play a considerably positive role, in the post war transformation of Japan.

Likewise in the Muslim world, many societies like Indonesia, Turkey and the Persian Gulf states seemed to have inclined decisively toward the West in recent decades. But this environment has three aspects that distinguish it from all World War II information venues:

-- It is not simply a question of Muslim attitudes turning sharply against the United States in the past year. More significantly, these attitudes have gelled into an Ummah-wide worldview whose very anti-Americanism is now a symbol of Muslim identity and the Muslim future. In other words a shared negative vision of the United States has become a passionate rallying point for collective Muslim purpose.

-- Furthermore, any locally targeted U.S. information effort is almost instantly shared across the Muslim world, and becomes yet another call to action in the face of urgent external threat. Radical Islamists moreover do not have to make this case. Muslims who share a collective vision of what is going on and what needs to be done -- and yet who may not be active supporters of the "terrorists" -- are the ones making the case.

-- Finally, the emerging center of gravity within Islam is not where the United States has invested its support -- rather it continues to invest in the old line Muslim establishment. But the dynamic center is among the New Islamists, who represent a growing movement across the Muslim world. Their vision is not distinctly understood by the U.S. information campaign, which tends to lump all Islamists together as "radicals." By not seriously parsing Islamism, and choosing which Islamists it can support, the United States is driving positive elements in the Muslim revival, if not directly into the arms of the jihadis, then to an ever-stronger vision of the United States as the enemy of Islam.

At this point in the conflict the U.S. strategic information effort is essentially supporting the narrative of the jihadis. If it is to have a hope of conveying its own message, it must first create the conditions where that message can be heard on its own terms. This means deconstructing the mental architecture that immediately turns the U.S. message into yet another daily motivational element in the narrative of Muslim struggle. And the only way to do this is to find a way to speak Muslims with authority -- which means the authority of their language and their ideas.

How to create this foundation for "message authority" -- meaning, how to get them to listen to us, rather than simply letting them plug what we say like unexamined artifacts into their story?

We must remember that entering a propaganda situation in which we lack message authority is something historically new to us. Mythic U.S. experiences like World War II (or even most of the Cold War) encourage us to assume, a priori, the existence of predominant authority in our message of human freedom and democracy: not unlike the example of France in the 19th century believing it naturally represented progressive nationalist ideas. The fact that we have no comparable message authority in this war means that before we attempt to gain authority we must try to understand why we have no authority in the first place. This means understanding the message that we are actually conveying, rather than the message we think we are conveying.

So the first order of business is to do a rigorous self-appraisal: Is our message too self-referent? By assuming message authority, are we simply reliving past triumphs, while in reality speaking only to ourselves? Has it in fact become all about us?

The second step is to unflinchingly approach the enemy and their social and cultural orbit. Part of the problem with being unconsciously self-referent is that we project some of what we want to see in the world of the enemy and call the desired result, reality. We need urgently to know their world as they know it, and that calls for an exercise in cultural empathy that is unfamiliar, even uncomfortable, for most people in the United States.

Third, once we truly take their measure, we must decide what constituency in the world of the enemy is its true center of gravity. With whom do we really need to establish message authority? Arguably we can do this only with a part of the spectrum of the broader belief system within which the enemy resides. Moreover, this choice needs to be our positive propaganda choice. We need to deliver our most encouraging and hopeful good news to the very center of gravity in the enemy's world.

Finally, the enemy himself must be addressed; not to try to sway him, or even to diminish him, but to limit the damage he does by turning our messages against us. We must acknowledge that this is exactly what enemy groups have managed to do so adroitly and unerringly up to now. Thus the message authority that we establish with the actual enemy must be all about stripping them of the enormous authority that they have acquired, in part by effectively turning our former authority against us.

--

(Michael Vlahos writes on war and strategy at The Johns Hopkins University Applied Physics Laboratory. He was commissioned to write this paper by a senior executive at the Department of Defense. This is Part One of a four-part series on the subject of exhuming the war of ideas.)

--

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)



Copyright ? 2001-2004 United Press International


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CONVERSATIONS ON JUSTICE...

Michael Ratner and Barbara Olshansky
http://www.wnyc.org/shows/lopate/episodes/current
Michael Ratner and Barbara Olshansky from the Center for Constitutional Rights on the threats to human and constitutional rights at Guant?namo Bay. Ratner's book is called Guant?namo: What the World Should Know.




Hamdi and the End of Habeas Corpus
The Death of the Great Writ of Liberty
By JENNIFER VAN BERGEN

Hamdi v. Rumsfeld, the unlawful enemy combatant case, is of greater importance to the future of this country than many realize. But the Supreme Court decision is full of contradictions and deceptions. On the one hand, the Court upheld the right to due process. On the other, the Court determined that an "appropriately authorized and properly constituted military tribunal" with truncated procedures might suffice.[1]

The Court cited the Geneva Conventions but only as the basis for its assertion that "detention may last no longer than active hostilities" and as support for its suggestion that a military tribunal will suffice.[2] It made no reference to the fact that for two years the United States has been violating Geneva and that such violation is a war crime.

While upholding due process, the Court ostensibly upheld the Writ of Habeas Corpus, also called the Great Writ of Liberty--the original use of which was to require the custodian of a person detained without charges to produce that person before a judge for a determination of the legitimacy of his detention. But the Court was speaking with a forked tongue. While saying Hamdi had the right to challenge his detention, the Court eviscerated that right by the applying a "balancing test" used in civil cases--a test that in fact originated in the context of the deprivation of welfare benefits. Rather than requiring the Government to supply probable cause of criminal activity in order to detain Hamdi, Hamdi has to somehow prove that he isn't what the Government says he is. The Court pointed out that the lower court "apparently believed that the appropriate process would approach the process that accompanies a criminal trial."[3] Well, yes, a person being held in custody has the right to be charged with a crime or released. But the Court rejected this approach, stating that Justice Scalia, who dissented, "can point to no case or other authority for the proposition that those captured on a foreign battlefield . . . cannot be detained outside the criminal process."[4]

Yet, considering that the "Great Writ" of habeas corpus arose out of unlawful detentions without probable cause,[5] it is hard to see why the Court would refused to apply criminal procedural protections to challenges to the detention of persons who have claimed innocence. Innocent until proven guilty is supposed to be our standard. And, otherwise, if a detained person is not charged as a criminals, he can only be detained if he is determined by a competent and independent tribunal to be POW.

The Great Writ of Liberty

Can it be that the Supreme Court justices do not know the law and history of the Great Writ of Liberty? Justice Scalia was the only justice who spoke honestly about it. He said: "The very core of liberty secured by our Anglo-Saxon system of separated powers has been freedom from indefinite imprisonment at the will of the Executive."[6]

He quoted from the famed Commentaries of the British jurist and legal scholar, Sir William Blackstone: [C]onfinement of the person, by secretly hurrying him to [jail], where his sufferings are unknown or forgotten, is a less public, a less striking, and therefore a more dangerous engine of arbitrary government.[7] He quoted from Alexander Hamilton: The writ of habeas corpus protects against "the practice of arbitrary imprisonments . . . in all ages, [one of] the favorite and most formidable instruments of tyranny."[8] And he added that "[i]t is unthinkable that the Executive could render otherwise criminal grounds for detention noncriminal merely by disclaiming an intent to prosecute, or by asserting that it was incapacitating dangerous offenders rather than punishing wrongdoing."[9]

Scalia even quotes from a 1997 Supreme Court opinion, that, "[a] finding of dangerousness, standing alone, is ordinarily not a sufficient ground upon which to justify indefinite involuntary commitment."[10] Then he notes that, of course, the allegations against Hamdi "are no ordinary accusations of criminal activity," but continues that "[c]itizens aiding the enemy have [traditionally] been treated as traitors subject to the criminal process."[11] He quotes from a 1762 treatise on treason that stated: The joining with Rebels in an Act of Rebellion, or with Enemies in Acts of hostility, will make a Man a Traitor: in the one Case within the Clause of Levying War, in the other within that of Adhering to the King's enemies.[12]

Although Scalia does not point it out, this language is reflected in our Constitution, which states that "[t]reason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort." The provision continues that "[n]o Person shall be convicted of Treason unless on the Testimony of two Witnesses to the same overt Act, or on Confession in open Court."[13] Finally, Justice Scalia points to our treason statute and other provisions that criminalize various acts of war-making and adherence to the enemy,[14] and notes that historically remedies for indefinite detention were "not a bobtailed judicial inquiry into whether there were reasonable grounds to believe the prisoner had taken up arms against the King[, but r]ather, if the prisoner was not indicted and tried within the prescribed time," he was discharged.[15] T

his is, in fact, exactly what the Court's remedy is--a bobtailed inquiry -- , but what is even more odious is that the Court pretends to uphold the very thing it undermines: the Great Writ of Liberty. Instead of Congress having the courage to suspend the writ, as it and only it is authorized to do, or the Justice Department having the courage to bring criminal charges against Hamdi, or the Defense Department providing him with a real Geneva "status determination" hearing, or the Court insisting that the real basis of habeas corpus be upheld by mandating criminal process be followed, we have gotten, instead, the Mathews v. Eldridge standard, meant for determinations of deprivations of welfare benefits.

The Mathews standard goes like this: the process due "in any given instance" is determined by weighing "the private interest that will be affected by the official action" against the Government's asserted interest, "including the function involved" and the burdens the Government would face in providing greater process, then an analysis of "the risk of an erroneous deprivation" of the private interest if the process were reduced and the "probable value, if any, of additional or substitute safeguards."[16] What happened to probable cause of criminal activity? What happened to the Fourth, Fifth, and Sixth Amendment protections? What happened to innocent until proven guilty?

Given that Hamdi may now be heard by a military tribunal with procedures that allow for acceptance of hearsay evidence (not usually admissible in regular federal courts), a presumption in favor of the Government's evidence, and the burden on the detainee to prove the Government wrong, the result will be what one conservative commentator recently wrote: "[A]s long as Hamdi is given a meaningful opportunity to convince his captors that he should be released, their denial of his claim will probably be accepted by the Court."[17]

In the meantime, Hamdi is not the only one who will lose. The Great Writ has been a core part of democratic processes for over four hundred years. The Supreme Court may go down in infamy as the one that destroyed the Great Writ of Liberty, and along with it, our freedom.

Jennifer Van Bergen, J.D., is the author of The Twilight of Democracy: The Bush Plan for America, coming out September 1, 2004, Common Courage Press. She is one of the foremost experts on the USA PATRIOT Act and has taught anti-terrorism law at the New School University.

[1] Hamdi v. Rumsfeld, No. 03-6696 (June 28, 2004) (J. O'Connor, plurality op.), Part III (D), para. 4.

[2] The plurality opinion states that "it is notable that military regulations already provide for such process in related instances, dictating that tribunals be made available to determine the status of enemy detainees who assert prisoner-of-war status under the Geneva Conventions." Hamdi (J. O'Connor, plurality op.), part III, D, para. 4.

[3] Hamdi (O'Connor), part III, C, para.2.

[4] Id., part II, para. 16.

[5] See Wayne R. LaFave & Jerold H. Israel, Criminal Procedure (Hornbook Series, 2d ed., West Publishing, 1992), ?28.2(b). ("The King's Bench apparently accepted counsels' contention that the writ could be used to enforce the Magna Charta's guarantee [of due process], but responded that it could not look beyond the crown's return [e.g., reply, mandate] , which stated on its face that the detention was lawfully authorized. Dissatisfaction with this ruling eventually led to a 1641 Act that removed the power of the Crown to arrest without probable cause and granted to any arrested person immediate access by writ of habeas corpus to a judicial determination of the legality of his detention.") (Emphasis added.)

[6] Hamdi (J. Scalia, dissent), part I, para. 1.

[7] Sir William Blackstone, Commentaries on the Laws of England, 1:132-133 (1765), quoted in Hamdi (J. Scalia, dissent), id., para. 2. (Spelling modernized.)

[8] Alexander Hamilton, Federalist No. 84 (G. Carey & J. McClellan eds. 2001) 444, quoted in id., para. 9. (Spelling modernized.)

[9] Hamdi (J. Scalia, dissent), Part I, para. 6.

[10] Id., quoting Kansas v. Hendricks, 521 U.S. 346, 358 (1997).

[11] Id., part II, para. 1 & (A), para. 1.

[12] Sir Michael Foster, Discourse on High Treason (1762), quoted in id., part II (A), para. 4.

[13] U.S. Constitution, Art. III, section 3. [14] Hamdi (J. Scalia, dissent), part II (A), para. 9.

[15] Id., part III, para. 2. (Emphasis in original.)

[16] Id. (J. O'Connor, plurality op.) part III (C), para. 3, quoting from Mathews v. Eldridge, 424 U.S. 319, 335 (1976).

[17] Andrew C. McCarthy, A Mixed Bag (June 30, 2004), www.nationalreview.com/mccarthy/mccarthy200406300915.asp.
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Judge in Yukos Countersuit Steps Down
By ALEX NICHOLSON
ASSOCIATED PRESS

MOSCOW (AP) - The judge who was to hear the Yukos oil company's countersuit on a multibillion-dollar back taxes bill asked to be removed from the case Monday, citing unspecified psychological pressure, the ITAR-Tass news agency reported.

The request by Arbitration Court Judge Olga Mikhailova was connected to "publications in the mass media that she considered as psychological pressure," the news agency reported. A new judge will be appointed by Tuesday, Yukos lawyer Sergei Pepelyayev said.

The date for new hearings would be decided within a month, said Mikhail Dolomanov, a lawyer also representing the interests of the beleaguered oil giant, the agency said.

The Tax Ministry said Monday it was planning to seek Mikhailova's removal, according to the report. Mikhailova has written articles on tax law for a magazine edited by Yukos lawyer Sergei Pepelyayev, suggesting she had an interest in the outcome of the case, the news agency Rosbiznesconsulting reported on its Web site. The agency cited a tax ministry representative.

Mikhailova's decision further complicates the web of legal actions involving Yukos and its jailed former CEO, Mikhail Khodorkovsky.

Yukos has been ordered to pay some $3.4 billion in back taxes for 2000, an amount the company says could drive it into bankruptcy. Another $3.3 billion is being sought for 2001, and bills for other years are expected to follow.

On Monday, Yukos filed a challenge to the 2001 bill.

An appeal of the Moscow Arbitration Court's decision upholding the 2000 bill will be heard Sept. 6, the Interfax news agency reported. The Federal Arbitration court for the Moscow district, which will hear the appeal, refused to stop enforcement of the claim.

Khodorkovsky and associate Platon Lebedev are being tried on charges including fraud and tax evasion. The trial will resume Tuesday.

Also Monday, another court postponed a hearing on a defense motion to release Khodorkovsky and Lebedev from custody, the Interfax news agency reported.

The Arbitration Court ruled last month that Yukos must pay its 2000 bill by early July.

However, before that ruling, Yukos in a separate action challenged the legality of the Tax Ministry's claim. The judge in that case was removed after a challenge by the Tax Ministry, meaning the case had to be reheard. That rehearing was to begin Monday before Mikhailova.

Pepelyayev, meanwhile, accused tax officials of pressuring lawyers defending Yukos, Rosbiznesconsulting reported. He said tax authorities were conducting an unplanned audit of his firm despite a check earlier this year which revealed no legal violations, the agency reported.

"I have never come across the kind of low, unethical methods of running an arbitration dispute that the tax authorities have demonstrated in its lawsuits with Yukos," the agency quoted Pepelyayev as saying.

Yukos, meanwhile, is struggling to find a compromise that would allow it to restructure its tax debts and keep the government from seizing its key assets.

There has been no government reaction to the company's proposal to pay $8 billion over two years or to an offer from Khodorkovsky - who stepped down as Yukos chief executive after his arrest - to help settle the tax claim by turning over shares held by him and his close associates.

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Iran: Tehran Abruptly Ends Trial Into Canadian Journalist's Death

Nobel Peace Prize winner Shirin Ebadi is heading Kazemi's legal team

Iran's hard-line judiciary has abruptly ended the trial of an intelligence agent accused of killing Zahra Kazemi, a Canadian journalist of Iranian origin. Nobel Peace Prize winner Shirin Ebadi, who is leading the team of lawyers representing Kazemi's family, has accused the judge of ignoring or covering up key testimony. RFE/RL reports that the case has turned an international spotlight on reports of Iranian human rights abuses.


19 July 2004 -- An Iranian court has abruptly ended the controversial trial of an intelligence agent accused of killing a Canadian journalist.

Zahra Kazemi, a photographer of Iranian origin, died in July 2003, two weeks after being detained for taking photographs outside a Tehran prison during student-led protests against Iran's ruling establishment.

Kazemi's case had drawn fresh international attention to reports of Iranian human rights abuses and conditions inside the country's prisons. It also prompted Canada last week to announce the withdrawal of its ambassador in Tehran."I'm saying this based on the law: They have no choice than to return the case to the primary court because of the many offenses that have been committed in this case."

The court's move yesterday to end the trial prompted outrage from Kazemi's legal team, headed by Nobel Peace Prize winner Shirin Ebadi.

Ebadi accused the judiciary of a cover-up by pinning blame on a single intelligence agent -- Mohammad Reza Ahmadi -- and disregarding evidence that judiciary officials may have been involved in the murder.

"I don't accept this court! We don't accept this court! This court is not acceptable! The proceedings were declared over. As a sign of protest, the mother of Zahra Kazemi and we, the lawyers, together have left the court," Ebadi said.

Ebadi's legal team claims the accused is innocent and is being used as a scapegoat.

The court met only three times in the trial of intelligence agent Ahmadi, who pleaded innocent on 17 July to charges of "semi-intentional murder." Reports say a verdict may be handed down within a week.

Iranian authorities initially claimed Kazemi died naturally of a stroke. Later, a committee appointed by President Mohammad Khatami found that Kazemi had died of a fractured skull and brain hemorrhage from a blow to the head.

Kazemi's mother tearfully accused Iranian officials of torturing her daughter to death.

Ezzat Kazemi told the court that there were burns on her daughter's chest and fingers and that her nose and toes were broken.

Ebadi's legal team accuses a prison official of inflicting the fatal blow. That official has been cleared of any wrongdoing. Ebadi's team accused the court of ignoring testimony that might have incriminated him.

In a news conference yesterday, Ebadi threatened to take the case to an international court if Iranian justice provides no further avenues to pursue it.

Mohammed Seyfzadeh, part of Ebadi's legal team, told RFE/RL that he believes Iranian officials will be compelled by law to return the case to a higher court.

"I'm saying this based on the law: They have no choice than to return the case to the primary court because of the many offenses that have been committed in this case," Seyfzadeh said.

The decision to end the trial was denounced by the Paris-based Reporters Without Borders as a "denial of justice."

The European Union also expressed concern over the trial and deplored the barring of EU diplomats from the trial's final session, which was closed to foreign journalists as well.

(RFE/RL's Radio Farda contributed to this report.)



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>> IRAQ WATCH




Analysts Question Logic of Staffing Plan for U.S. Embassy
Posted July 18, 2004
By Claude Salhani

John Negroponte, the first United States ambassador to be accredited to a post-Saddam Iraqi government will preside over the largest American legation in the world once his Baghdad embassy becomes fully staffed. With the exception of the U.S. Department of State on Washington's C Street, no other American diplomatic building will hold as many as Baghdad's expected 1,600 diplomats and assorted staff.

While the exact figures are not yet finalized, estimates place the number of Americans who will be working for 10 government agencies out of the Baghdad legation anywhere from 900 to 1,500, and maybe more, once security personnel are factored in. The rest will be made up of Iraqi support staff of around 600. The 2005 operating cost of the embassy is estimated to hover around the $1 billion mark, a figure that does not include initial construction costs.

Intelligence analysts speaking on condition of anonymity told United Press International that placing such large numbers of American government personnel in any one place in such a volatile area as Baghdad "is a silly and dangerous idea given the threat level in the country."

Indeed, regardless of what security precautions are taken, housing that many American diplomats in a high-profile location such as Baghdad presents a certain danger. An embassy of this size and significance almost would be a challenge to people trying to hurt the United States in Iraq.

Furthermore, the American diplomats assigned to Baghdad will live and work in the so-called "Green Zone," secured behind walls, razor wire and sandbags, and protected by a detachment of soldiers with tanks and armored personnel carriers. Their limited expeditions out into "the real Iraq" will be few and they will find themselves escorted by phalanxes of heavily armed security guards as they ride in armored cars to and from their appointments. Washington's diplomats in Iraq will be limited in their mixing with Iraqis, and those they do meet with will be carefully vetted.

A sure bet is that many of the diplomats assigned to the Baghdad mission will never set foot outside the Green Zone. They will remain secluded in the relative safety of the diplomatic compound and will hardly ever experience cultural or social exchanges with Iraqis. This is hardly the way to win over the hearts of the people, let alone conduct diplomacy.

Additionally, much of the information-gathering will be limited by the diplomats' lack of direct contact with the people of Iraq and their absence of language allowing them to communicate directly with Iraqis. As a result, the diplomats will have to rely more on Iraqi intermediaries, with all the drawbacks that represents.

Recent history has shown that placing large groups in unfriendly environments can lead to disaster. On April 18, 1983, an attack on the U.S. Embassy in Beirut left 63 people dead, including the CIA's Middle East director and the agency's entire Middle East contingent, all killed while attending a meeting inside the embassy at the time of the blast. Another 120 people were injured in the attack claimed by Islamic extremists.

Later that year, in October, another suicide bomber drove a van filled with 12,000 pounds of explosives into a building near Beirut International Airport that housed large elements of the Marine Battalion Team serving with the Multinational Force in Lebanon. Again, the positioning of large numbers under a single roof was the cause of 241 American servicemen -- mostly Marines -- losing their lives.

Sadly, the list is longer. In Iraq a number of government buildings and diplomatic missions have been targeted by insurgents/terrorists with disastrous consequences. With that in mind, State Department and intelligence analysts have questioned, off the record, the logic of placing that many diplomats in a pre-delineated space.

Others, however, speak of "confidence and optimism" to describe the mood in the Bureau of Diplomatic Security as more than 100 DS special agents, analysts and contractors prepare to deploy to the U.S. Embassy in Baghdad.

Additionally, all State Department personnel deploying to Iraq, including Ambassador Negroponte, have had to undergo the latest training in terrorist tactics. They have been required to take the diplomatic security antiterrorism course, which covers surveillance detection, emergency medical training, and other practical topics such as training in firearms.

But with today's technology -- cell phones, the Internet, highly secure video-conferencing capabilities -- one could ask why the State Department did not choose to base more diplomats in peripheral embassies, such as in Amman, Ankara, Damascus, Nicosia or Kuwait, instead of concentrating them all in one place where despite all the training in the world, they remain vulnerable.

Claude Salhani is an editor for UPI, a sister news organization of Insight.


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U.N. OIL $$ LINKED TO IRAQI TERRORISTS

By NILES LATHEM

July 19, 2004 -- WASHINGTON -- American officials believe that millions of dollars Saddam Hussein skimmed from the scandal-plagued U.N. oil-for-food program are now being used to help fund the bloody rebel campaign against U.S. forces and the new Iraqi government, The Post has learned.
U.S. intelligence officials and congressional investigators said last night that the "oil-for-insurgency link" has been recently unearthed in the numerous probes now under way into the giant U.N. humanitarian program, in which Saddam is believed to have pocketed $10.1 billion through oil smuggling and kickbacks from suppliers.

Congressional investigators have uncovered hundreds of documents in recent weeks that detail how top officials in Saddam's regime directed companies bidding on contracts for oil or humanitarian goods to pay "after-sales fees" -- or kickbacks -- of up to 10 percent of each contract.

The documents, which come from Iraqi government files and were handed over to the congressional committees in recent weeks, reveal that the companies were ordered to wire the kickback money into secret bank accounts the regime operated outside Iraq -- separate from the legitimate bank accounts being used by the oil-for-food program.

Investigators have traced some of these accounts to banks in Jordan, Syria, Lebanon and Belarus, where money was either laundered or converted into gold and routed back to Iraq or into other accounts.

The network of bankers, front companies, couriers and money-launderers involved in handling Saddam's oil-for-food kickback schemes still appears to be active, investigators say.

U.S. intelligence officials believe a portion of the funds in these hidden accounts -- possibly millions-- is now being used to fund the Ba'athist guerrillas responsible for much of the postwar violence against coalition troops, sources said.



"We are still in the early stages of investigating this. But from what we know so far, it's the same financial system, and we believe there is now some connection between what was left over from the illegal profiteering under the oil-for-food program and the funding of insurgency," said a U.S. official familiar with the recent intelligence information.

U.S. officials revealed earlier this month that a network of Saddam's cousins led by Fatiq Suleiman al-Majid, a former henchman in Saddam's murderous Special Security Organization, is involved in funding and arming the militants.

Investigators found a money trail connected to Saddam's clansmen that flowed through banks in Syria. Some of these same banks, congressional investigators said, also handled the kickback depos- its during the oil-for-food program.

Although the Treasury Department has recovered almost $2 billion in hidden assets since the fall of Saddam and has led the way in freezing many of Saddam's foreign bank accounts, the new Iraqi government and congressional investigators believe that hundreds of millions of dollars remain unaccounted for.


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Britain Says It Has Paid Compensation in Over 120 Incidents in Iraq
The Associated Press
Published: Jul 19, 2004
LONDON (AP) - Britain has paid compensation to Iraqis for more than 120 incidents involving death, injury or property damage in the British-occupied south of the country, the government said Monday.
In a House of Commons written answer, Defense Minister Adam Ingram said the compensation cases included one death in detention, six deaths in road accidents and 11 people with injuries sustained during arrest. Twenty-four compensation cases involved property damage and 57 were for damage to vehicles in road accidents.
Ingram did not give details of the financial settlements or a total payout figure.
In May, the government said it had paid compensation for three deaths, including $3,000 to the family of Baha Mousa, a Basra hotel receptionist who died after allegedly being beaten by British troops in September.

Mousa's family, and the families of 12 other people, are attempting to bring legal action against the British government over the deaths.

AP-ES-07-19-04 1334EDT



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The Crisis of Information in Baghdad
Four Missiles, 14 Deaths
By ROBERT FISK
The Independent

This is how they like it. An American helicopter fires four missiles at a house in Fallujah. Fourteen people are killed, including women and children. Or so say the hospital authorities.

But no Western journalist dares to go to Fallujah. Video footage taken by local civilians shows only a hole in the ground, body parts under a grey blanket and an unnamed man shouting that young children were killed.

The US authorities say they know nothing about the air strike; indeed, they tell journalists to talk to the Iraqi Ministry of Defence--whose spokesman admits that he has "no clue what is going on".

And by the time, in early afternoon yesterday, that the American-appointed Iraqi Prime Minister, Iyad Allawi, said that he had given permission for the attack--even though US rules of engagement give him no such right--there had been car bombs in Tikrit in which two policemen died, one of Saddam's former generals was captured, and Fallujah became just another statistic, albeit a deeply disturbing one: this is the sixth air strike on the insurgent-held city in less than five weeks.

None of the six was independently reported. The dead were "terrorists", according to Mr Allawi's office. So were the doctors lying?

As in Afghanistan, so in Iraq. US air strikes are becoming "uncoverable", as the growing insurgencies across the two countries make more and more highways too dangerous for foreign correspondents. Senior US journalists claim that Washington is happy with this situation; bombing wedding parties and claiming the victims were terrorists--as has happened three times in a year--doesn't make good headlines. Reporters can't be blamed for not travelling--but they ought to make it clear that a Baghdad dateline gives no authenticity to their work. Fallujah is only 25 miles from Baghdad but it might as well be 2,500 miles away. Reports of its suffering could be written in Hull for all the reliability they convey.

Here, then, is the central crisis of information in Iraq just now. With journalists confined to Baghdad--several have not left their hotels for more than two weeks--a bomb-free day in the capital becomes a bomb-free day in Iraq. An improvement. Things might be getting better. But since most journalists don't tell their viewers and readers that they cannot travel--they certainly don't reveal that armed "security advisers" act as their protectors--they do not see the reality of cities such as Fallujah, Ramadi and Samara, which are now outside all government control. Indeed, US Marines are no longer allowed into the centre of Fallujah, which is now run by the Fallujah Brigade, made up of former Baathists and current insurgents. The Independent does not use security advisers in Iraq, armed or otherwise.

So what happened in Fallujah? The US attack on the house at 2am yesterday turned the building into a pit of earth in which small bomb fragments and arms and legs were found. Locals described the building as the home of poor people. Angry crowds of men cried "God is Great" at the site. And then an official in Mr Allawi's office announced that "the multinational forces [ie the Americans] asked Prime Minister Allawi for permission to launch strikes on some specific places where terrorists were hiding and Allawi gave his permission."

Precisely the same formula was used by Iraqi authorities 84 years ago when RAF aircraft made "precise" attacks on Iraqi towns and villages supposedly sheltering insurgents opposed to British occupation. Ironically, one of the US bases near Fallujah currently under constant nightly attack by Iraqi gunmen is Habbaniya--the very air base from which British bi-planes had staged their air strikes.

On an Islamist website--and, in truth, no one knows who controls it--Abu Musab al-Zarqawi, one of Osama bin Laden's junior fighters, claimed that Saturday's suicide attacks on the Iraqi Justice Minister and a military recruitment centre in Mohammediya, which killed a total of eight Iraqis, were his work. The US military blamed the bombings on "people who want to stop the progress of democracy in this country"--which is an odd way of describing an organisation that allegedly wants to destroy not just the US-appointed government here but the United States itself.

The capture in Tikrit of General Sufian Maher Hassan of Saddam's Republican Guard was being portrayed as another success by the US army. However, since General Hassan was in charge of the defence of Baghdad in 2003 and is mockingly regarded as the man who turned a potential Stalingrad into one of the easiest American military victories of modern times--which is not exactly correct, but that is another story--his capture is not going to change the deteriorating security crisis in Iraq.

With ghoulish relish, meanwhile, Saudi Wahabists posted the execution of an American captive in Saudi Arabia on a website. The pictures showed a man in a white apron sawing at the neck and vertebrae of John Palmer before eventually placing his severed head on the back of his torso.

Given such gruesome proof of Western vulnerability, it's no surprise that journalists in Iraq--where similar videos have been made--want to avoid the same fate. But it's not just the killers who want to keep the reporters indoors.

Robert Fisk is a reporter for The Independent and author of Pity the Nation. He is also a contributor to CounterPunch's hot new book, The Politics of Anti-Semitism.

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>> HASTA ...


Oposici?n Mayoritaria
Gobernar con una piedra en el zapato
Gran parte de los gobiernos presidencialistas en Latinoam?rica no son mayor?a en sus respectivos parlamentos, lo cual les impide trabajar debidamente. Muchas veces la oposici?n est? en desacuerdo, sin mayor raz?n, a cualquier iniciativa gubernamental. Un analista teme que esta situaci?n lleve a un caos que aprovechen los militares para volver al poder.

Jos? Antonio Pastor
Tiempos del Mundo

La gobernabilidad puede ser entendida como la capacidad de dise?ar y ejecutar pol?ticas p?blicas con eficacia y eficiencia. Tambi?n puede verse como la capacidad estatal de reducir y resolver los problemas que plantea una sociedad compleja. Ambas facultades parten b?sicamente de ciertos modos y patrones de gobierno que implican una relaci?n complementaria y balanceada entre el Poder Ejecutivo y el Parlamento.

Salvo por los casos de Belice en Centroam?rica, de Canad? en Norteam?rica y de algunas naciones en el Caribe, los pa?ses de la regi?n se han inclinado hist?ricamente por el sistema presidencialista, cuyas principales caracter?sticas se pueden resumir en que el poder ejecutivo es unitario, el cual est? depositado en un presidente que es, al mismo tiempo jefe de Estado y jefe de gobierno.

El presidente es electo por el pueblo y no por el Poder Legislativo, lo que le da independencia frente a ?ste. Asimismo, el mandatario puede nombrar y remover libremente a sus ministros, puede estar afiliado a un partido pol?tico diferente al de la mayor?a del Congreso; pero no puede disolver el Congreso ni ?ste puede darle un voto de censura.

La gran mayor?a de los presidencialismos latinoamericanos tienen sistemas multipartidistas sujetos a alg?n grado de representaci?n proporcional para la distribuci?n de esca?os en los congresos.

Este tipo de representaci?n ha permitido que peque?os grupos tengan cierta influencia en el Poder Legislativo, pero tambi?n ha propiciado la fragmentaci?n parlamentaria, que a juicio de analistas de diferentes pa?ses de la regi?n, es peligrosa para la gobernabilidad si el oficialismo no alcanza una mayor?a importante.

Los presidentes sin mayor?as operativas en los congresos suelen tener muchos problemas. Basta con echar un vistazo a los diarios nacionales para leer de gobiernos divididos, par?lisis parlamentaria o ejecutiva, intentos presidenciales de `brincarse' al Congreso o inestabilidad del r?gimen.

Un sistema presidencial multipartidista inestable rara vez es capaz de proveer de pol?ticas acordes a las necesidades, atraer apoyo popular e inclusive sobrevivir. En ese sentido, cuantos m?s partidos pol?ticos existen, m?s dif?cil resulta encontrar mayor?as calificadas para gobernar.

El escenario ideal del sistema presidencialista es aquel en el que el presidente cuenta con la mayor?a en el Congreso y la minor?a cumple una funci?n controladora, cuestionando y pidiendo explicaciones acerca de la labor pol?tica. Los legisladores son representantes de los electores y por lo tanto, deber?an reflejar y reconocer las circunstancias que alteran a la sociedad, son los mediadores entre el gobierno y el pueblo, pero esto ocasionalmente es as?.

De moda en la regi?n

Son escasos los pa?ses donde el Ejecutivo tiene una representaci?n importante o mayoritaria en el Parlamento, en unos casos como resultado de los comicios, en otros, a alianzas sobre la marcha y en algunos, a la creaci?n coaliciones, muchas veces d?biles y sujetas a condicionamientos de cuotas de poder. As?, tenemos con sus diferentes matices los ejemplos de Panam?, Colombia, Venezuela, Argentina y Chile.

Para Rodolfo Cerdas, analista pol?tico y ex diputado de la Asamblea Legislativa de Costa Rica, el fen?meno de los gobiernos con minor?a parlamentaria se puso de moda en Latinoam?rica a ra?z del fraccionamiento electoral, por las crisis de los partidos y la incapacidad de las ?lites pol?ticas de responder a las demandas de la poblaci?n.

Todo esto ha hecho que se produzca un divorcio entre algunas formas de liderazgo, especialmente carism?tico, que emerge en las ?pocas de crisis y de la elecci?n que hace el electorado de los diputados que los representar?n. De alguna manera, la gente siente que debe balancear los poderes en caso de que el presidente no sea lo que esperaban.

"Como los partidos no tienen una estructura fuerte, los criterios que se aplican para integrar los parlamentos son distintos, esto hace que se produzca ese divorcio entre el Ejecutivo y una oposici?n cerrada en los parlamentos donde no se tiene una mayor?a", dijo el especialista.

A ello se une el problema de la cultura pol?tica, que consiste en que no hay la madurez pol?tica para que la oposici?n sepa poner l?mites a sus contradicciones con el Poder Ejecutivo, por lo que abusan de la autoridad que tienen en el Parlamento, ya no para controlar o frenar al Ejecutivo, sino para crear una situaci?n de ingobernabilidad.

"El Parlamento ya no funciona como un contrapeso natural del otro poder, sino que se produce una ruptura. La inmadurez de las clases pol?ticas dirigentes se manifiesta en los casos en los cuales los parlamentos tienen en su facultad el dar votos de censura contra los ministros y precipitar su ca?da. Donde eso se ha dado, se ha precipitado sistem?ticamente el gabinete gubernamental", a?adi?. Consultado sobre cu?l ser? el futuro de la regi?n si persisten estas condiciones, Cerdas coment? que en el mediano plazo puede llevar a involuciones en el sistema democr?tico, a que aparezcan diversas formas de autoritarismo porque la sociedad no resiste el caos y la ausencia de autoridad. "Esto puede generar, si no el retorno de acciones militares directas, s? a formas de poder pol?tico autoritario que disminuya las facultades de los parlamentos y que crean la figura todapoderosa del Poder Ejecutivo que puede, con vestiduras de tipo democr?tico, estar semiocultando una forma de dictadura pol?tica", sentenci?.

Metamorfosis cuestionada

Tambi?n de moda en varios pa?ses del hemisferio, la discusi?n sobre la posibilidad de cambiar del sistema presidencialista a otro semiparlamentario o semipresidencialista, es vista por Rodolfo Cerdas como un peligro que no se debe menospreciar. Seg?n explic?, los problemas van en otra direcci?n y es que "no tenemos un sistema operante de partidos pol?ticos modernos, que sean representativos, que est?n en capacidad de contribuir en la formulaci?n de pol?ticas p?blicas en concordancia con las demandas de la poblaci?n".

En cuanto a la idea de reformar el sistema pol?tico, sostiene que hay que tener cuidado con esos semiparlamentarios o semipresidencialistas, porque la experiencia muestra que cuando se avanza de esa manera, lo que sucede es que se deja lo peor del sistema presidencial y se adopta la inestabilidad y lo peor del parlamentario.

"Creo que lo que hay que hacer es dar el paso maduro. En el caso, por ejemplo, de una democracia consolidada, con una tradici?n pol?tica fuerte, a un sistema parlamentario que permita u obligue a la reconstituci?n y modernizaci?n de los partidos pol?ticos. Si usted me habla de esa soluci?n en sociedades como Paraguay, Bolivia o Nicaragua, s?lo para citar unos casos, yo le dir?a que no, porque no existen las condiciones para avanzar en esa l?nea", asever?. El reci?n electo secretario general de la Organizaci?n de Estados Americanos, OEA, el costarricense Miguel ?ngel Rodr?guez, lanz? el tema a la mesa de las discusiones en su ?ltimo mensaje al pa?s como Presidente de la Rep?blica en mayo de 2001. Sin embargo, ni el debate ni un posterior proyecto de ley tuvieron el respaldo necesario para llegar a buen puerto.

Un pa?s donde las circunstancias parecieran haber convertido el sistema presidencialista en una especie de sistema parlamentario, seg?n opini?n de analistas nacionales, es Nicaragua, donde la oposici?n reina por partida doble. Los diputados liberales rompieron pol?ticamente con el presidente Enrique Bola?os, despu?s de que el mandatario desatara una cruenta lucha anticorrupci?n que envi? a prisi?n al ex presidente Arnoldo Alem?n.

El Partido Liberal Constitucionalista, PLC, encabezando una alianza de partidos, se alz? con la victoria en las elecciones generales del 2002, cuando llev? al poder a Bola?os y obtuvo 52 diputados de un total de 93 que conforman la Asamblea Nacional.

El Frente Sandinista de Liberaci?n Nacional, FSLN, alcanz? 38 esca?os y el Partido Conservador de Nicaragua s?lo uno, lo que presagiaba que la administraci?n de Bola?os gobernar?a Nicaragua con relativa tranquilidad, apoy?ndose en los diputados de su partido.

Pero en pol?tica las cosas no resultan tan exactas como las matem?ticas. Alem?n intent? conservar una buena parte de su poder pol?tico, y una vez que transfiri? la banda presidencial a su correligionario Enrique Bola?os, apoyado por los diputados liberales, fue electo presidente de la Asamblea Nacional de Nicaragua. En su calidad de ex presidente, Alem?n ten?a derecho por ley a un esca?o dentro de la Asamblea.

El ex mandatario, que a?n goza de un fuerte liderazgo, se garantiz? antes de las elecciones generales del 2001, de que los candidatos a diputados y a alcaldes municipales fueran personas cercanas a su entorno.

Las divergencias entre el ex y el actual gobernante, por el liderazgo pol?tico, se ahondaron.

A tan s?lo seis meses de instalado el nuevo gobierno, Bola?os lanz? impactantes acusaciones de corrupci?n cometidas durante el mandato anterior. Como resultado de las acusaciones, Alem?n y funcionarios de su administraci?n fueron enjuiciados y enviados a la c?rcel.

Los diputados liberales no soportaron la afrenta a su l?der y se declararon en oposici?n al gobierno. Bola?os s?lo logr? un relativo apoyo de ocho diputados que, dependiendo de las circunstancias, votan a favor de las iniciativas del gobierno y otras veces no.

Este grupo, que no ofrece un total y franco respaldo al presidente, integra ahora una bancada denominada Azul y Blanco.
Los sandinistas explotan h?bilmente las contradicciones entre bola?istas y arnoldistas, negociando por separado y logrando concesiones que, en ocasiones les generan beneficios no s?lo pol?ticos sino econ?micos para sectores sociales o aliados a su partido.

Sin un franco apoyo entre los diputados de la Asamblea Nacional, el gobierno del presidente Bola?os se debilita paulatinamente.

Algunos analistas estiman que, en poco m?s de dos a?os que restan del per?odo presidencial, no lograr? hacer nada trascendental en beneficio de la poblaci?n que sufre en el desempleo y una dif?cil situaci?n econ?mica.

La popularidad del mandatario, que al inicio fue una de las m?s alta que presidente alguno haya tenido, se desplom? estrepitosamente. Pero las circunstancias pol?ticas no s?lo opacaron la imagen de Bola?os sino tambi?n la de los padres de la patria.

El forcejeo a tres bandas entre diputados sandinistas, liberales y los pocos leales al gobierno, dio como resultado la legislatura m?s est?ril de los ?ltimos a?os. Al concluir el primer semestre del 2004, exhib?an el pobre resultado de tan s?lo 14 leyes aprobadas, lo que les hace merecedores de cr?ticas de todos los sectores sociales.

Se censura que los "padres de la patria" del ala liberal han centrado su quehacer parlamentario en una desgastante t?ctica, sin resultados positivos, para liberar al presidente Alem?n, quien permanece en prisi?n por orden judicial desde el pasado mes de diciembre. Los liberales tan s?lo apoyaron al gobierno en iniciativas en las que, de votar en contra, les hubiese significado mayor deterioro a su propia imagen, frente a la comunidad internacional y de influyentes sectores sociales nicarag?enses.

Es obvio que, aparte de la aprobaci?n de leyes que el pa?s requiere para honrar compromisos macroecon?micos contra?dos con organismos internacionales, no se vislumbran mayores posibilidades para que los diputados aprueben otras iniciativas que el gobierno impulse para materializar su visi?n de pa?s.

A juzgar por los acontecimientos, los diputados se encaminan a restarle poder al presidente Bola?os, quien deber? entregar la banda presidencial en enero de 2007. Algunos observadores pol?ticos comentan que, de no solventarse las diferencias entre los liberales, lo que a todas luces parece dif?cil, en lo que resta del per?odo de Bola?os, Nicaragua se adentrar? a un sistema de gobierno parlamentario y no presidencial.

Las divisiones por ambiciones de liderazgo dentro del liberalismo, m?s la actitud del Frente Sandinista de capitalizarlas al m?ximo, hace aparecer a los diputados de las dos corrientes pol?ticas, m?s que de oposici?n, como obst?culos a las pol?ticas de desarrollo que intenta el gobierno.

Si hasta el presente la naci?n no ha ca?do en la ingobernabilidad es porque la oposici?n sandinista y los resentidos liberales, saben que el gobierno goza de un fuerte respaldo de Estados Unidos y de otros pa?ses, los cuales aplauden la cruzada contra la corrupci?n emprendida por Bola?os. Adem?s, el pa?s se encuentra en un fase de consolidaci?n de su proceso democr?tico, e intentar deponer al gobierno es un riesgo demasiado alto que nadie parece estar dispuesto a correr.u

(*) Colaboraron en este informe Ana Paula Valverde (Costa Rica) y R?ger Su?rez (Nicaragua).

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>> REASON...?


Ten Reasons to Fire George W. Bush

And nine reasons why Kerry won't be much better

Jesse Walker





If you're looking for reasons to be disgusted with George W. Bush, here are the top 10:

1. The war in Iraq. Over a thousand soldiers and counting have died to subdue a country that was never a threat to the United States. Now we're trapped in an open-ended conflict against a hydra-headed enemy, while terrorism around the world actually increases.

One of the silliest arguments for the invasion held that our presence in Iraq was a "flypaper" attracting the world's terrorists to one distant spot. At this point, it's pretty clear that if there's a flypaper in Baghdad, the biggest bug that's stuck to it is the U.S.A.

2. Abu Ghraib. And by "Abu Ghraib" I mean all the places where Americans have tortured detainees, not just the prison that gave the scandal its name. While there are still people who claim that this was merely a matter of seven poorly supervised soldiers "abusing" (not torturing!) some terrorists, it's clear now that the abuse was much more widespread; that it included rape, beatings, and killings; that the prison population consisted overwhelmingly of innocents and petty crooks, not terrorists; and that the torture very likely emerged not from the unsupervised behavior of some low-level soldiers, but from policies set at the top levels of the Bush administration. Along the way, we discovered that the administration's lawyers believe the president has the power to unilaterally suspend the nation's laws--a policy that, if taken seriously, would roll back the central principle of the Glorious Revolution.

Two years ago, when Kathleen Kennedy Townsend was running for governor of Maryland, I noted her poor oversight of a boot camp program for drug offenders where the juvenile charges had been beaten and abused. "It's bad enough," I wrote, "to let something like institutionalized torture slip by on your watch. It's worse still to put your political career ahead of your job, and to brag about the program that's employing the torturers instead of giving it the oversight that might have uncovered their crimes earlier. There are mistakes that should simply disqualify a politician from future positions of authority." Every word of that applies at least as strongly to Donald Rumsfeld and to the man who has not seen fit to rebuke him publicly for the torture scandal, George Bush.

3. Indefinite detentions. Since 9/11, the U.S. government has imprisoned over a thousand people for minor violations of immigration law and held them indefinitely, sometimes without allowing them to consult a lawyer, even after concluding that they have no connections to terrorist activities. (Sirak Gebremichael of Ethiopia, to give a recently infamous example, was arrested for overstaying his visa--and then jailed for three years while awaiting deportation.) It has also claimed the right to detain anyone designated an "enemy combatant" in a legal no-man's land for as long as it pleases. Last month the Supreme Court finally put some restrictions on the latter practice, but that shouldn't stop us from remembering that the administration argued strenuously for keeping it.

4. The culture of secrecy. The Bush administration has nearly doubled the number of classified documents. It has urged agencies, in effect, to refuse as many Freedom of Information Act requests as possible, has invoked executive privilege whenever it can, and has been very free with the redactor's black marker when it does release some information. Obviously, it's impossible to tell how often the data being concealed is genuinely relevant to national security and how often it has more to do with covering a bureaucrat's behind. But there's obviously a lot of ass-covering going on.

And even when security is a real issue, all this secrecy doesn't make sense. Earlier this year, the Transportation Security Administration tried to retroactively restrict two pages of public congressional testimony that had revealed how its undercover agents managed to smuggle some guns past screeners. Presumably they were afraid a terrorist would read about it and try the method himself--but it would have made a lot more sense to seek some outsiders' input on how to resolve the putative problem than to try to hide it from our prying eyes. Especially when the information had already been sitting in the public record.

The administration has been quick to enforce its code of silence, regularly retaliating against those within its ranks who try to offer an independent perspective on its policies. While the most infamous examples of this involve international affairs, the purest episode may be the case of chief Medicare actuary Richard Foster, who apparently was threatened with dismissal if he told Congress the real projected cost of Bush's Medicare bill. Even if the White House didn't know about the threat--and I strongly suspect that it did--it created the organizational culture that allows such bullying to thrive.

5. Patriot and its progeny. The Patriot Act sometimes serves as a stand-in for everything wrong with the administration's record on civil liberties, and at times is blamed for policies it didn't create--those detentions, for example. Nonetheless, there's plenty of reasons to despise a law that allows warrantless searches of phone and Internet records; that gives police the right to see what books you've bought or checked out of the library while prohibiting the library or bookstore from telling you about the inquiry; that requires retailers to report "suspicious" transactions and, again, prevents them from telling you that they've done so. And there are plenty of reasons to despise an administration that rammed this bill through at the eleventh hour--and still wants to extend its reach.

6. The war on speech. Not all of the White House's assaults on our freedoms are linked to the war on terror. In March 2002, Bush signed the McCain-Feingold "campaign finance reform" bill, whose restrictions on political speech in the months approaching an election--i.e., at the time when political speech is most important--are so broad that they've forced a filmmaker, David T. Hardy, to delay the release of his documentary The Rights of the People until after November because it mentions several candidates. Bush approved this bill fully aware that it was a First Amendment nightmare; it's generally believed that he did so assuming that the Supreme Court would strike down its unconstitutional elements. Surprise: The Court weeded out a few measures but left most of them in place.

That's not to say the government hasn't done anything to increase the amount of political speech. Its ham-handed crackdown on "indecent" broadcasts--an effort that is to the cultural realm what McCain-Feingold is to the political sector--has turned Howard Stern into Amy Goodman.

7. The drunken sailor factor. Fine, you say: We all expect a Republican president to molest our civil liberties. But this one has poached the Democrats' turf as well, increasing federal spending by over $400 billion--its fastest rate of growth in three decades. Even if you set aside the Pentagon budget, Washington is doling out dollars like crazy: Under Bush, domestic discretionary spending has already gone up 25 percent. (Clinton only increased it 10 percent, and it took him eight years to do that.) "In 2003," the conservative Heritage Foundation notes, "inflation-adjusted federal spending topped $20,000 per household for the first time since World War II."

Of all those spending projects, Bush's Medicare bill deserves special attention. It will cost at least $534 billion over the next decade, and probably more. And it doesn't even deliver on its liberal promises: It does much more to distribute new subsidies and tax breaks to doctors, HMOs, and the pharmaceutical industry than it does to help seniors. The Medicare bill is to Bush's domestic policy what the Iraq war is to its foreign policy: an enormous expense of dubious merit that's come under fire from both the left and the right.

8. Cozying up to the theocrats. There are those who believe the White House is being run by religious fanatics, and there are those who believe it's mostly paying lip service to Bush's Christian base. I lean toward the second view. But whether he's cynical or sincere, there's nothing good to be said for the president's willingness to demagogue the gay marriage issue (and throw federalism out the window in the process), or--worse yet--to restrict potentially life-saving research on therapeutic cloning because it offends that constituency's religious views.

9. Protectionism in all its flavors. Bush has repeatedly sacrificed the interests of consumers to help politically significant industries, giving us tariffs on products from steel to shrimp. This doesn't just make a mockery of his free-trade rhetoric--it's also bad policy.

10. He's making me root for John Kerry. I haven't voted for a major party's presidential candidate since 1988, and I have no plans to revert to the habit this year. The Democrats have nominated a senator who--just sticking to the points listed above--voted for the war in Iraq, the Patriot Act, McCain-Feingold, and the TSA; who endorses the assault on "indecency"; who thinks the government should be spending even more than it is now. I didn't have room in my top ten for the terrible No Child Left Behind Act, which further centralized control of the country's public schools--but for the record, Kerry voted for that one too. It's far from clear that he'd be any less protectionist than Bush is, and he's also got problems that Bush doesn't have, like his support for stricter gun controls. True, Kerry doesn't owe anything to the religious right, and you can't blame him for the torture at Abu Ghraib. Other than that, he's not much of an improvement.

Yet I find myself hoping the guy wins. Not because I'm sure he'll be better than the current executive, but because the incumbent so richly deserves to be punished at the polls. Making me root for a sanctimonious statist blowhard like Kerry isn't the worst thing Bush has done to the country. But it's the offense that I take most personally.



Managing Editor Jesse Walker is author of Rebels on the Air: An Alternative History of Radio in America (NYU Press).


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>> THEN AGAIN...

[Disavowal]

Negative Capability
Posted on Thursday, July 15, 2004. The following assertions were collected from public statements made by George W. Bush and his official spokesmen since 1997. Originally from Harper's Magazine, May 2004.
SourcesThe President of the United States is not a fact-checker.

I'm not a statistician.

I'm not a numbers-cruncher.

I'm not one of these bean counters.

I'm not very analytical.

I'm not a precision guy.

The President is not a micromanager.

I'm not a member of the legislative branch.

The President is not a rubber stamp for the Congress.

I'm not a censor-guy.

I'm not a lawyer.

I'm not a doctor.

The President is not an economist.

I'm not a stockbroker or a stock-picker.

I'm not a forecaster.

I'm not a predictor.

I'm not a pollster, a poll-reader guy.

I'm not a very good prognosticator of elections.

I'm not a committee chairman.

I'm not of the Washington scene.

I'm not a lonely person.

I'm not a poet.

I'm not a very good novelist.

I'm not a textbook player.

I'm not an emailer.

I'm not a very long-winded person.

I'm not a very formal guy.

I am not a revengeful person.

I'm not an Iraqi citizen.

I'm not a divider.

I am not a unilateralist.

I'm not a tree, I'm a Bush.

This is Negative Capability, a reading, originally from May 2004, published Thursday, July 15, 2004. It is part of Governance, which is part of Readings, which is part of Harpers.org.


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>> THEN AGAIN 2...HARPERS
http://harpers.org/MostRecentIndex.html

Estimated value of a painting that the Saudi ambassador has given George W. Bush for his future presidential library : $1,000,000 [National Archives & Records Administration (Washington) ]

Value of the solid-gold model of a Saudi fortress on display in his father's presidential library : $1,000,000 [George Bush Presidential Library and Museum (College Station, Tex.) ]

Amount by which total Social Security contributions since 1983 exceed total benefit payments since then : $999,059,000,000 [Social Security Administration (Baltimore)/Harper's research ]

Year in which the Medicare hospital trust fund will be "completely exhausted," according to the trustees : 2019 [Centers for Medicare & Medicaid Services (Baltimore) ]

Year in which trustees predicted in 1991 that the fund would be exhausted : 2005 [Centers for Medicare & Medicaid Services (Baltimore) ]

Minimum number of U.S. surgical patients sewn up each year with sponges, clamps, or other tools left inside them : 1,500 [The New England Journal of Medicine (Boston) ]

Number of Americans who died in 2002 from infections they contracted while hospitalized for other ailments : 90,000 [Centers for Disease Control and Prevention (Atlanta) ]

Number of accidents on Florida highways in 2002 caused by cars parked on the side of the road : 4,220 [Florida Highway Patrol (Jacksonville) ]

Estimated percentage of women in Pakistani prisons whose crime was fornication : 80 [National Commission on the Status of Women (Islamabad, Pakistan) ]

Average number of people who die every day in Bombay commuter-train accidents : 10 [Manavta Railway Accident Response Centre (Bombay, India) ]

Percentage of Palestinians in the West Bank and Gaza Strip who lack regular access to food : 40 [Food and Agriculture Organization of the United Nations (Rome) ]

...

Algerian police admitted that a June 21 explosion at a power plant was a terrorist attack by the Salafist Group for Preaching and Combat. Condom supplies in much of the world were falling short, and [New Scientist] Britain's Environment Agency said that male fish were being changed to females by hormone-laden sewage dumped into rivers. [New York Times] The EPA announced that it will fine DuPont for failing to report significant test results relating to a chemical used in making Teflon that was found in drinking water near factories and in the fetus of a pregnant employee. [New York Times] One hundred fifty million pieces of toy jewelry were recalled because of high lead content. [New York Times]

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>> LEVANT WATCH...


>> LET IT BE...LET IT BE...OH...WHISPERING...


Analysis: Is Arafat's rule ending?
By Claude Salhani
UPI International Editor
Published 7/19/2004 4:17 PM


WASHINGTON, July 19 (UPI) -- Is Yasser Arafat's long reign as the uncontested leader of the Palestinians coming to a close?

This past weekend's sudden turmoil that erupted in the Gaza Strip over growing lack of security is a clear sign that Arafat's authority as the unchallenged leader of the Palestinians is now being challenged, acknowledges a Palestinian official.

While the Gaza events have centered on the issue of a corrupt police chief, who was briefly kidnapped and later released, there are however, much deeper issues troubling the Palestinian territories. Not least among them, a number of observes say, is the belief that this may well herald the beginning of the end of the Arafat era.

The Palestinians are not alone in this belief. Israel's former Mossad chief, Ephraim Halevy, said Monday that Arafat is gradually losing power.

This recent development in Gaza is the first tangible evidence of what has been boiling under the surface for a long while, said a Palestinian official speaking on condition of anonymity.

What has happened in the Gaza Strip, in fact, comes as the result of a long list of complaints hurled at Arafat's administration by many Palestinians. Not least among their complaints is that Arafat's administration has been plagued with corruption and lack of freedom. The failure to reach a peace agreement with Israel, and the fact that Arafat has been largely ignored by both the United States and Israel, has not helped improve the situation.

Granted, the Israeli occupation of the Palestinian territories has not helped either, but in the words of one official, a lot more could have been done. Instead, Arafat and his prot?g?s have chosen to try and place the blame of their shortcomings on everyone except themselves.

Given the possibility of an Israeli pullout from Gaza (which by the way some Palestinians believe will never happen) and the void such a move would create, Gazans have made it known to Arafat that they demand a greater say in running the territory. Their demands were made known over the weekend, when they kidnapped the police chief, challenging Arafat.

And this time Arafat blinked.

Faced with an unprecedented popular rebuttal after naming his nephew, Moussa Arafat, as head of the General Security in the Gaza Strip to replace Abdul Razzaq al-Majayda, Arafat realized that he had no choice but to backtrack and reinstate al-Majayda.

What is happening behind the scenes is nothing short of a power-play for control of Gaza between the established authority -- Arafat's and his old guard brought to the territories from his Beirut and Tunis exiles -- and the younger generation, who now see an opportunity allowing them to have a greater say in the running of the territory. For the moment, at least, the fundamentalists, Hamas and Islamic Jihad, are staying out of the quarrel. But there is little doubt that they, too, would demand a say in running Gaza.

"What is happening is quite significant," said a Palestinian official speaking from Ramallah, explaining that he saw these recent moves as an attempt by the "rebels" to better position themselves in a way that would give them more power.

The bottom line is that barring the introduction of reform in the Palestinian territories, the overwhelming disillusion felt by the Palestinian "street" is unlikely to abate anytime soon and is likely to grow.

Arafat, report sources in the territories, has now gone into a "survival mode." The Palestinians badly want -- and need -- reforms. Living standards in the territories have suffered tremendous drawbacks, particularly since the outbreak of the second intifada, or uprising, that broke out in September 2000. And it's been downhill since.

"People in the Palestinian areas are frustrated," the official said. The standard of living has dropped, unemployment has risen and many in the PA leadership are seen as corrupt. Last year, a controversy arose over allegations that Arafat had funneled some $11 million to his wife Suha's bank account in Paris, where she lives with the couple's daughter.

Given the way things have been going in the territories, Arafat is now possibly living the final chapter of his political career. And he knows it. As a quick fix to the chaos reigning in the territories, and to prevent further mayhem, Arafat has ordered the restructuring of the PA's eight security services into three, placing them under the direction of the prime minister. But there is lack of clarity, even here.

In fact, what Arafat has done is to place what a Palestinian official called "national security services," under Prime Minister Ahmed Qureia's direction. But just what is considered "national services," as opposed to "other services," remains, as the official put it, "a matter of debate."

What also remains debatable is if Arafat can weather this storm, as he has so often done in the past. Many observers who have long followed the Palestinian leader's turbulent political career have often said that the man has more lives than a cat.

That may well be the case, but as the Palestinian official commented Monday on the past weekend's events, "Arafat may have just used up his last life." That, of course, has also been said of Arafat a number of times in the past.

-0-

(Comments may be sent to Claude@upi.com.)



Copyright ? 2001-2004 United Press International
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Republics of fearlessness?

On conjugating liberalism in Syria and Lebanon. An interview with journalist and author Samir Kassir

Michael Young



Every Friday, readers of Lebanon's most respected daily, Al-Nahar, can read a front-page column by Samir Kassir. On a bad day, Kassir (who also teaches history at Beirut's St. Joseph University) is merely annoying to those in power; on a good one, he is infuriating enough to earn newspapers irate telephone calls from the gentlemen at the security agencies, an open-ended ban from political talk shows, and, even, at one time, a detail of trailing intelligence agents seeking to make Kassir's life wretched. His story, then, is that of the liberal intellectual facing down a Middle East suffused with the futility of autocracy. Reason spoke to Kassir on Syria and Lebanon, the past and present of Beirut, and the limbo of free expression in Arab societies.

reason: You've just published two books, Syrian Democracy and Lebanon's Independence and A Soldier Against Whom?, both collections of weekly columns for Al-Nahar. Why republish the articles?

Samir Kassir: Let me admit, first, that almost every columnist has a secret dream that what he writes will stand the test of time. I am personally sensitive to this, maybe because my academic background leads me to seek coherence in my articles from week to week. Yet, publishing the books was not, or not only, a narcissistic decision. Both are intended to feed the political debate in Lebanon, especially as we are supposed to have a presidential election this year and that a great concern is that the current president, Emile Lahoud, will impose a renewal of his mandate--or that Syria might do so--despite the fact that the constitution mandates a single presidential term. The process implies that the security services, which are already pulling the strings, will go further in suppressing opposition to this scheme on behalf of the president, but also of a hegemonic Syria.

My book on Syria is a reminder that the problem we have with the Syrian regime is not merely that it has imposed itself against the free will of the Lebanese people, but also that of the Syrian people--a dimension many Lebanese choose to ignore. I want to remind everyone that the demands for reform in Syria came long before President George W. Bush chose to express them. Furthermore, both books are a signal, both to colleagues and to readers, that they don't have to buckle under pressure from those in positions of power--that they must persist in writing what they want, even if they are threatened.

reason: The book on Syria, which you've subtitled "In Search of the Damascus Spring," appears to be an admission that Syrian reform is an illusion. True?

Kassir: If you mean by Syrian reform a reform conducted by the regime, I've always been skeptical of this. In all that I've written since Bashar Assad inherited power from his father, I never succumbed to the illusion that he would willingly reform his regime. At the same time, I saw in the process of succession an opportunity for Bashar to gain real legitimacy by undoing what his father had done. That's why I've been asking for the release of political prisoners, the ending of the state of emergency, and political liberalization, including allowing freedom of expression, as prerequisites for this new legitimacy. I have refused to see the small steps Bashar has taken in this regard as gifts we should thank him for.

That doesn't mean things haven't changed in Syria. But they have changed thanks to the courage of intellectuals and political militants who decided to voice their demands publicly, through the press--the Lebanese press I should add--or through the so-called Manifesto of the 99 and other manifestos. If the "Damascus Spring" [the short-lived period of relative openness that followed Bashar's arrival to power in June 2000] means anything, it is embodied in the courage and the quest for freedom expressed by the Syrian opposition. The Syrian regime understood this and cracked down on dissidents. But that hasn't worked. Though the opposition in Syria is not in good shape, it has widened its margin of expression, though not enough to propose an alternative to the Ba'ath regime.

reason: You have written that the elephant in the living room of the Syrian opposition is its unwillingness to raise the matter of the Syrian presence in Lebanon. How is Syrian democracy related to Lebanese independence?

Kassir: I think things have evolved, especially since Riad Turk, the key figure in the Syrian opposition, addressed this issue in one of his interviews with Al-Mulhaq, the literary supplement of Al-Nahar, in early 2003. In the interview, he asked for a restoration of Lebanese independence and questioned the manipulation by the Syrian regime of the resistance, through Lebanon, against the Israeli occupation. When I meet my friends from the Syrian opposition, I feel the issue of Lebanese independence has imposed itself and that nobody questions the need to put an end to this hegemony. However, this doesn't mean they are willing to give top priority to the issue. As one Syrian dissident once told me: "We want to address the core issue, the Ba'ath regime's hegemony over Syria; once we've done that, its hegemony over Lebanon will fall apart." But I maintain the reverse is also true.

Here, I must add that my criticism was not a moral one; it was not intended to compel Syrian dissidents to feel they owed the Lebanese something because our press has been a platform for their ideas. My criticism was political: I meant that one couldn't understand Syrian politics if one didn't consider what Syria had done in Lebanon for over a quarter of a century. I feel the Syrian dissidents must be aware of this, as they know better than anyone else that their regime's raison d'?tre is to project itself across the Middle East, beginning with Lebanon. After all, if Syria is a regional power, it is because of its intervention in Lebanon.

reason: Is the Syrian-Lebanese relationship as it is shaped today sustainable?

Kassir: Let's try to characterize this Syrian-Lebanese relationship. It is not an occupation, nor is it a free association between two sovereign countries. Rather, Lebanon is a Syrian protectorate, similar to what we used to see in Eastern Europe under Soviet rule. I should add it is also a mafia-type protectorate, since Lebanon is not only a place of strategic importance for the Syrian regime, it is also a place where Syria's ruling elite, in association with Lebanese counterparts, exploits all kinds of, often illicit, economic and business opportunities.

Clearly, this situation is no longer sustainable--it never was, to my mind, given the resilience of Lebanese civil society. What has changed are two factors that helped shape this relationship: The first is the internal cohesion of the Syrian regime. It seems obvious that things are no longer as cohesive as they were under the late president, Hafez al-Assad. The second is the end of the conspiracy of silence that surrounded the Syrian takeover of Lebanon beginning in 1976, and which has continued during the post-war period, with the tacit backing of the US. Tremendous change has taken place and, although I don't agree with the principle of unilateral sanctions imposed by the Bush administration against Syria, I think the measures taken under the Syrian Accountability and Lebanese Sovereignty Restoration Act have opened a new page, one that is not to the benefit of the Ba'ath regime. I know that Syria can still provide "services" to the US. But in the changing Middle East, you no longer have to "reimburse" such services by "offering" a third country as reward.

reason: What of the reports from Damascus that Bashar Assad is essentially the weakest link in a Syrian system that he fails to control, thanks to the existence of more powerful networks--the intelligence services, the Ba'ath Party, even people in his family who are the real powers in Syria?

Kassir: "Qassiounology" [for Jabal Qassioun, the Damascus hill where the presidential palace is located] is even more uncertain than was Kremlinology. Because of the absence of transparency in Syrian politics, but also the confusion surrounding Bashar's succession, one cannot say who is in charge. Clearly, Bashar is not. But it doesn't seem that anyone else is either, except maybe for the shadow of Hafez al-Assad. Nobody has the strength to change anything. It seems there are rival centers of power inside the ruling elite--the heads of the security services, crony capitalists inside the "royal family" and Ba'ath apparatchiks. It is the shifting equilibrium among them that drives Syria today.

reason: Has the taboo of the omnipotence of the Syrian intelligence services been broken both in Lebanon and Syria? If so, where can this lead?

Kassir: In Lebanon, the taboo has been broken for years, at least from the point of view of those who want to see it broken. As I explained, that was one of the aims behind the publishing of my two recent books. Yet, among the Lebanese political elite and in the public administration the taboo is still there. In Syria, it is even more difficult to overcome, which is why we should appreciate the courage of the increasingly audacious Syrian dissidents, as was shown in two failed attempts to protest publicly in Damascus--on March 8 and two weeks ago on the occasion of the Day of the Syrian Political Prisoner. Syria has been ruled by fear. If the fear disappears, the regime will find it very difficult to hold on to power. The big question now is whether it will be able to revive this management by fear.

reason: Would a democratic Iraq precipitate grand transformation in Syria?

Kassir: Undoubtedly. Despite the quagmire in Iraq, things have already changed in Syria, although the Syrian regime has exploited the Iraqi mess to postpone domestic reform. This provides us with yet another reason to criticize American policy in Iraq. What a waste of opportunities!

reason: The title of your book on political behavior during the post-1998 period in the Lebanese state [after Emile Lahoud became president], A Soldier Against Whom?, was taken from the title of a controversial column of yours. It comes from an old student protest chant asking the military, effectively, whom were they beating upon, before answering: "Against the peasants, Oh soldier." This led the Lebanese General Security service to harass you for weeks. What happened?

Kassir: My passport was confiscated under false pretexts and intelligence agents tailed me for 40 days, around the clock. Sometimes, two or even three cars followed me, I don't know for what purpose. I have reason to think that they initially intended to harm me. However, I spotted my "followers" early on--before the passport confiscation--and I immediately contacted officials not directly linked with the military [which controls the security services] so they would intervene. After that, the agents' purpose was maybe to isolate me. It is disturbing to have people watching you wherever you go--at caf?s, restaurants, at your friends' or family's homes. But the solidarity that people displayed allowed me to stand up against this. I must add that I had the privilege of receiving the public support of Syrian dissidents in Damascus who signed a manifesto. It was the first time that such support went in this direction--from Damascus to Beirut, rather than the contrary. Finally, the mess was too big and the security services stepped back. Yet, I am still blacklisted on local television.

reason: The subtitle of your book is "The Disappeared Republic." If that's true, then of what value is Lebanon to anybody, including Syria? Why should anyone care for a republic that has, in some respects, erased itself?

Kassir: I didn't mean that Lebanon had disappeared as a state, but that the values and the procedures of the republic have been thrown off track. That does not diminish Lebanon's worth. After all, nobody forgot Poland or Czechoslovakia, despite the suppression of the opposition there. Not all values have disappeared in Lebanon. As I said, civil society has proved its resilience and intellectuals are still writing.

reason: Does Lebanon have a message to offer, in that case?

Kassir: I don't know, but I am sure the Lebanese deserve a better future. At least, they deserve to find their own way, in accordance with a rich history that cannot be reduced merely to violence. Yes, we were a laboratory for violence, but we were also, before that, a laboratory for modernity, and in some ways we still are. Lebanon has had a long-standing tradition of constitutional politics. It would not be such a bad thing for the Middle East if we could resume this history.

reason: Is there a risk that the security-oriented system you so deride will continue in Lebanon? How does the president, Emile Lahoud, fit into this?

Kassir: The security-oriented system preceded Lahoud. But it was under his mandate that Lebanon became a security-obsessed state. It is under his mandate that Lebanon has made great strides toward becoming a Ba'athist kind of regime, where security officials see citizens as enemies, or at best children who must be controlled. It is under this president's mandate that freedom of expression has been the most restrictive, although we have managed to counter this. I may be biased, but I don't see any gains under Lahoud. Even the liberation of the south from Israeli occupation was a result of the resistance, not Lahoud's actions. And even there, Lahoud and his associates, including Hizbollah, managed to squander this great success. So I don't see any reason why he should stay in power as he has been trying to do. On the contrary, the struggle against the renewal of his mandate may be the beginning of an awakening.

reason: You say freedom of expression has been restricted, yet that the Lebanese have managed to resist this. What are the forces at play here?

Kassir: Thanks to a handful of journalists, we have indeed reconquered our freedom of opinion and expression--if not yet fully our freedom of information. It is a paradox: One can write that mafias are ruling and ruining the country, and link that to Syrian hegemony; yet not a single newspaper or TV channel will try to investigate the mafias' behavior and the scandals arising from their control. You can criticize Bashar Assad by name, as you can Syria's proconsul in Lebanon, but no newspaper will investigate how a junior intelligence officer intervenes in the appointment of a bureaucrat or the winning of a contract.

reason: On a related topic, Lebanese liberalism is, in many respects, both a function and a reflection of its capital city. You've just completed a book, in French, on the history of Beirut. It provoked some debate. What was that about?

Kassir: I wouldn't quite call the two critical articles to which you're referring, among numerous others that were far more positive, a "debate." One of the articles said I had ignored the weight of [the predominantly Christian] Mount Lebanon district in shaping Beirut. This was criticism from the political right. The other, which represented criticism from the political left, accused me of focusing on the impact of the wealthy and middle classes in the development of Beirut. Yet the fact is that Beirut was a merchant city, a port, and, therefore, wealthy. It was commerce that made it what it is, and that allowed for its emerging vitality, and, ultimately, liberalism. I couldn't ignore this, even if I went to great efforts in my account to gauge the impact of modernization and Westernization on all social strata, while also highlighting Beirut's role as a cultural hub.

reason: Can we consider Beirut, through its openness, the future of the Arab city, or its contradiction?

Kassir: I hope it is the future. When you hear the crown prince of Dubai, Mohammad bin Rashed, who was central to the remarkable expansion of the Gulf emirate, it is clear that his model was initially Beirut. Now, Amman is also taking on characteristics of Beirut. Yet, Beirut also has something unique--human diversity and, thanks to its history, linguistic and political diversity. Let's hope it will keep it. If Beirut loses this diversity--and the city did not do so, despite its 15-year conflict between 1975 and 1990--it means it would have been seen as the contradiction of the Arab city, which would represent a triumph for regression

reason: If you had to define a running theme through your books, to which I must add a study in French on the first years of the Lebanese civil war, which was your doctoral thesis, as well a two-volume account of France and the Arab-Israeli conflict (authored with Farouk Mardam-Bey), what would it be?

Kassir: I find it difficult to add my two recent books to my personal bibliography. I have yet to come to terms with my duality as a scholar and a journalist, and when it comes to my books, I prefer the scholarly ones. But to answer your question, I can say I am obsessed with recent Arab history--even in my newspaper articles--and I essentially try to find out what went wrong, to quote Middle East scholar Bernard Lewis. But unlike Lewis, and though I never refrain from self-criticism, I think we Arabs are not the only ones responsible for what has happened to us. I am making this argument in an essay that will soon be published in Paris, titled "Considerations on the Arab Misfortune." The West not only brought us modernization, it also brought colonial domination as well as divisions, and it continues to do so. Just look at US support for Israel. The West should be aware that when we speak of our failures, we also mean our inability to confront its destructive hegemony.

reason: Is a liberal Middle East possible, and, if it is, does Lebanon have a role in bringing this about?

Kassir: If a liberal Middle East were not possible, things would be unbearable for secular people like us. I am convinced it is possible, but not under just any circumstances. For it to be possible, the liberal West must also be liberal in the Middle East: It must abandon its support for dictatorships, even those considered as moderates and allies. Look what happened with Libya: Once Muammar al-Qaddafi renounced his nuclear ambitions, Bush and Blair acclaimed him. What a message when you are calling for democracy in the Middle East! On the other hand, Yasser Arafat is denounced by American officials on a daily basis, despite being elected and considered by Palestinians as a leader and a national symbol. Most importantly, the West must accept that the strategic importance of the Middle East must not justify denying its peoples the right to self-determination, and that means, particularly, the Palestinians.

Under such conditions, Lebanon can once again prosper. But even now, Lebanon would show, if it were provided with the means, that political liberalism can be conjugated in Arabic, and that is the country's paramount contribution.

More Reason interviews

Reason contributing editor Michael Young is opinion editor at the Daily Star newspaper in Beirut.
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Iraqis bullish on stocks


By Tarek el-Tablawy
ASSOCIATED PRESS


BAGHDAD -- The miniature Liberty Bell clanged. Elbows flew. Sweat poured down foreheads. Sales tickets were passed and, with a flick of the wrist, 10,000 shares of the Middle East Bank had more than doubled in value.
The frantic pace yesterday of those first 10 minutes of trading typified the enthusiasm behind the Iraq Stock Exchange, an institution seen as a critical step in building a new Iraqi economy.

In five sessions, trading volume has nearly quadrupled, and the value of some stocks has surged more than 600 percent. Traders say the gains reflect the pent-up frustration of 15 months of closure.
"How can I not be excited by this?" asked Taha Ahmed Abdul-Salam, the exchange's chief executive officer, as he eyed the activity on the trading floor.
The ISX is housed temporarily in a converted restaurant. Looters had gutted the old exchange, so traders now jostle for position in a long room overlooking an old dining room. Where bartenders once chatted with patrons sidling up for drinks, a bank of secretaries logs orders.
With space limited, investors are not allowed in the exchange, let alone on the "floor." Instead, from a makeshift courtyard, they can look in through the same windows that once offered diners a garden view. Joining them are a posse of men armed with assault rifles who provide security.
Such scenes are standard in the tumultuous Iraqi capital, and the presence of security does little to dampen enthusiasm at the exchange.
The unofficial figures of the day's trade tell the story: More than $10 million in stocks changed hands, reflecting the movement of about 1.43 billion shares, though only 27 companies are listed on the exchange.
"Iraqis have always been business-savvy," said Mr. Abdul-Salam, the former research head at the old exchange. "But that we have this much activity with so few companies listed shows just how much pent-up frustration there was among investors under the previous regime."
For Iraqis, these days have been a long time coming. The ISX replaces the defunct Baghdad Stock Exchange, which was riddled with corruption. Saddam Hussein's extended family often muscled in by simply issuing new shares for companies they found attractive.
The new exchange has built-in safeguards against manipulation. It took about a year to set up, with 12 brokerage houses and banks that own it working alongside former occupation authorities to lay the legal and regulatory framework.
"This is much better than before," said Emad Shakir al-Baghdadi, a broker with the Okaz Co. firm. The removal of a 5 percent cap on price swings has added tremendous credibility and liquidity to the market, he added.
"Look at these prices," he said, glancing at the board showing offers for one industrial company at about 25 dinars, almost two-tenths of a cent. "These shares are ridiculously undervalued. That's why prices are surging as much as 600 percent from day to day."
The exchange was inaugurated last month and is open two days a week for two hours a day. Yesterday's session was the first open to the press.
Officials hope that in a month they will have all 120 companies previously listed on the old exchange on the ISX's "big board" -- actually 27 small white boards, where workers record trades with markers.
Thirty minutes after the ringing of the Liberty Bell replica -- a donation from the Philadelphia Stock Exchange -- Talib al-Tabatabie, the ISX's board chairman, hollered into the phone, struggling to be heard over the din from the trading floor, which lacks air conditioning.
"Sell? Do you want me to sell them now?" he screamed to a client over the phone, his shirt coming untucked as he waved his arms. "It's up again. We should sell."
Economists say the key to success is a strong regulatory framework, transparency and accountability. A shift to an electronic trading system is coming, officials say.
So are more regulations. Oversight here comes from the Iraq Securities Commission, headed by Luay al-Okali.
"Right now, we're all working together to build up the exchange. Later, when things are running smoother, then we'll give them a hard time," Mr. al-Okali said with a wink.
One bonus will be opening the door to foreign investment. The legal framework is in place, but the details have yet to be completed.
"My hope would be that they would quickly encourage foreign investment," said Gary Becker, Nobel laureate and University of Chicago economist. "Foreign investors often want to make sure they have majority ownership."
Brokers and ISX officials predict that the tourism and hospitality sector will be the market's new blue chips.
Yesterday, Baghdad Hotel's shares did not disappoint. In a market where many shares were trading at values equal to a fraction of a penny, the 25-cent offer for the hotel's stock was snapped up.
"Don't forget that Iraq is a tourist country. There's plenty to see here," said Muhammad Ismael, a broker with Qidwa Securities.
As the sound of gunfire reverberated in the distance, he shrugged.
"I guess it will take a little more time for them to come."

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Iraqi bourse quietly gains pace
By Deborah Haynes BAGHDAD

Iraq has a new stock exchange, launched without fanfare and staffed almost entirely by women, which aims to become the leading bourse in the Middle East.
Trading on the first morning in late June was higher than at anytime during the life span of the former Baghdad Stock Exchange, but the new bourse has yet to establish regular opening hours, its owners said.

"The plan at the moment is to open for business on Wednesday and Sunday from 10:00 am (0600 GMT) until midday, but right now the situation is very fluid so we might change," said Talib Al Tabatabaie, chairman of the board of governors.

A slim trickle of brokers entered the unmarked but well guarded stock exchange building - tucked away behind a large hotel in the center of Baghdad - early Sunday for THE BOURSE's second official day of trade.

"The old exchange used to be open three days a week for two hours at a time. We hope to match that but it will take time," Tabatabaie said.

Once trading is fully underway, the potential for growth is huge, said the exchange's chief executive Ahmed Taha.

"There is a lot of interest in this exchange. At the moment the Iraqi economy is weak but it has huge potential to grow," he said. "I don't want to be over optimistic but I think we will become larger than other exchanges in the region."

The product of more than a year's work by 12 brokerage firms and banks that jointly own it, the bourse only has 15 listed companies with about 100 more due to go public.

These firms have an automatic right to float as they were part of the former exchange, which was dissolved after the US-led invasion of Iraq last March, but there are also new companies clamoring for a piece of the action.

"Other firms want to list and we are considering them," said Tabatabaie, who owns a brokerage company with a major stake in the exchange.

In contrast to the grand plans, the new bourse has kept an extremely low profile for fear of being targeted in a wave of attacks against any perceived byproducts of the US-led occupation.

In reality, outside help was minimal to create the modest but modern trading house with its neatly arranged computer terminals, open floor for trade, and white boards to track the share price of different companies.

About 50 of the 55 staff who run the exchange are women - a rare ratio in the West but no big surprise in Iraq where women typically entered the finance industry under the previous Saddam regime because men were off fighting wars, the manager of the trading department, Jammy Afham, said.

"This stock exchange is going to help the Iraqi economy recover because it encourages people to invest money. I was surprised by the level of interest on our first day and hope this will continue," she said.

In its first morning of business on June 24, more than 500 million shares were traded - more than the Baghdad Stock Exchange ever achieved.

The old stock exchange only comprised Iraqi companies and traders using regular shares, but the new bourse will be accessible to foreigners and it plans to move from an old-fashioned paper system to a fully-automated trading floor.

"We want to open up to foreign companies and hopefully this will happen in the next couple of months," Taha said.

"We also plan to upgrade to an automated system in the next half-year."

In addition, the 38 brokerage firms and 12 banks that work the exchange are learning how to use trading units other than shares - the single instrument on the old exchange - such as bonds and swaps, Taha added.

For the time being, only brokers are allowed to make trades on behalf of clients because the owners felt a room full of traders would be too dangerous in the current security climate. But once the automated system is up and running, they noted, absolutely anyone will be able to participate.

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AT LAW

'Lawfare'
The International Court of Justice rules in favor of terrorism.

BY JEREMY RABKIN
Saturday, July 17, 2004 12:01 a.m. EDT

Maj. Michael Newton, a military lawyer who teaches at West Point, coined a new term earlier this year: "lawfare." It is the pursuit of strategic aims, the traditional domain of warfare, through aggressive legal maneuvers. Last Friday's decision by the International Court of Justice holding Israel's security fence in violation of international law is another milestone in the onward march of lawfare. The ICJ has now confirmed that lawfare and warfare can be pursued simultaneously.

The terror war against Israel, launched in the summer of 2000, has by now resulted in the deaths of nearly a thousand Israeli civilians. The security fence, by greatly impeding the movement of would-be terrorists into Israel, has helped to achieve a sharp decline in terror attacks over the past year. Nonetheless, the ICJ admonished that the nations of the world are obligated not to pressure Palestinians to abandon terrorism, but to pressure Israel to dismantle its security fence.

Most of the court's reasoning, based on arguments advanced by British barristers, is superficially plausible--so long as one ignores the actual political context of the dispute. Perhaps the Children's Rights Convention or the Fourth Geneva Convention do provide arguments against disrupting the free movement of innocent Palestinians. But the arguments are more plausible if one ignores the terror threat to Israeli lives, as the court essentially does. In concluding that the fence sits on "occupied territory," the court assumes that the armistice lines of 1949 are Israel's final borders, though never accepted as such by Israel's neighbors. In concluding that Israel cannot undertake intrusive measures to protect "illegal settlements," the court assumes that Jews had no claim to return to places, like the Old City of Jerusalem, from which they were forcibly expelled by Arab armies in 1949.

Who now has what rights in what territory is at the heart of the dispute. Stripped of its technicalities, the case here was Palestine v. Israel. And Israel lost by 14-1.





The statute of the ICJ provides that the court may only decide disputes submitted by states and then only with the consent of the states that are parties to the dispute. This provision follows the practice of the international court established under the League of Nations, of the international arbitration court established by the Hague Peace Conference in 1899, and of all previous international arbitrations. Serious diplomats have always doubted that international questions, involving the highest national interests, could be settled by mere legal reasoning.
The traditional approach to international arbitration would have barred the court from entering into this most intractable international conflict. Palestine, since it is not a recognized state, cannot sue before the ICJ in its own name. And since Israel assuredly did not consent to let the legality of the fence be decided by the ICJ.

The U.N. General Assembly, however, at the prompting of Arab states asked the court last December to provide an "advisory opinion" on the dispute over the fence. The U.N. Charter allows for this procedure, but only in regard to "legal issues" and only in conformity with the overall scheme of the charter. Here, the General Assembly was effectively asking the ICJ to endorse its own political conclusions, with its resolution describing the fence as a "wall" (most of it is, in fact, chain-link construction) on "occupied territory including East Jerusalem." The General Assembly was also seeking to have the ICJ do an end-run around the Security Council, which is supposed to have primary responsibility for resolving threats to peace (while at the same time circumventing the legal requirement that Israel consent to be judged in a case to which it was a party).

The council had exercised this responsibility only a few weeks earlier, by endorsing a "road map to peace" which stipulated that ultimate borders--and such questions as the ultimate status of Jerusalem--should be settled between the Palestinians and the Israelis in direct negotiations. The ICJ's ruling is likely to prove a genuine obstacle to the step-by-step bargaining process envisioned in the road map.

How can a Palestinian representative, for example, now embrace a peace plan that cedes less than full sovereign control of the Old City of Jerusalem, when the highest international court has declared that Palestinians should have the right to oust all Israeli claims to that place? How can Israel put any trust in international guarantees when even the ICJ seems so indifferent to its life-and-death concerns?

The court had many legal grounds for refusing to decide this case. And such arguments were pressed on the court not only by the Israeli government but by the U.S., by Russia, by the European Union and a majority of EU member states. All the sponsors of the "road map," in other words, urged the court to stay out of this heated political conflict. Many other governments around the world took the same view.

Given the membership of the court, where states hostile to Israel are plentifully represented, condemnation of the fence was to be expected. Most dismaying, however, was that all five judges from EU states (Britain, France, Germany, the Netherlands and Slovakia) went along with the majority. Only the dissent of the American judge, Thomas Buergenthal, argued against taking this leap into the heart of the Mideast conflict.





Israel has already announced that it will ignore the court's decision. American officials have vowed to veto any resolution at the Security Council aimed at enforcing it. But European governments, already so eager to distance themselves from Israel, may find it much harder to disclaim what the ICJ--and all its European judges--have pronounced to be the legal rights and wrongs of the Mideast conflict. For Yasser Arafat, the decision now looks like an unalloyed boon, tossed to him without extracting any serious effort to help suppress ongoing terrorist activities.
In effect, the ICJ now claims that countries beset by terrorism must ignore terror threats and focus on the court's priorities. It is a dangerous precedent for the U.S., which has often contended for interpretations of its rights, under international law, that a majority of U.N. members might dispute. To those who argue that the U.S. should join the new International Criminal Court, because that new court will be moderated in its rulings by the influence of European members, this ruling of an older U.N. court should be sobering.

The ruling raises still broader questions about the U.N.'s capacity to contribute to any serious international effort against terrorism. Even U.N. judges, we now see, have other priorities.

Mr. Rabkin is professor of government at Cornell. His new book, "The Case For Sovereignty," has just been published by AEI Press.

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Had Enough?
The U.N. handicaps Israel, along with the rest of us.

By Anne Bayefsky
The recent decision on Israel's security fence by the International Court of Justice (ICJ), the U.N.'s legal arm, is a classic example of how the vilification of Jews does not end with Jews.
United Nations mistreatment of the Jewish state takes many forms, from the refusal to admit Israel into the negotiating and electoral groups of many U.N. operations, to Israel's demonization by U.N. human-rights machinery applied to no other state. Though antithetical to the U.N.'s founding principle of the equality of nations large and small, many believe that the consequences of these facts of U.N.-life can be confined to Jewish self-determination. The ICJ has proved them wrong.
U.N. ASSAULT
The Court has declared four new rules about the meaning of the right of self-defense in the face of terrorism today.
(1) There is no right of self-defense under the U.N. Charter when the terrorists are not state actors.
(2) There is no right of self-defense against terrorists who operate from any territory whose status is not finalized, and who therefore attack across disputed borders.
(3) Where military action is perpetrated by "irregulars," self-defense does not apply if the "scale and effects" of the terrorism are insufficient to amount to "an armed attack...had it been carried out by regular armed forces." (The scale in this case is 860 Israeli civilians killed in the last three years -- the proportional equivalent of at least 14 9/11's.)
(4) Self-defense does not include nonviolent acts, or in the words of Judge Rosalyn Higgins: "I remain unconvinced that non-forcible measures (such as the building of a wall) fall within self-defence under Article 51 of the Charter."
These conclusions constitute a direct assault on the ability of every U.N. member to fight international terrorism. The U.N. Charter was not a suicide pact and Security Council resolutions in response to 9/11 were intended to strengthen the capacity to confront violent non-state actors, not defeat it.
Having couched their analysis in general terms, however, some of the judges were concerned that the go-ahead for Palestinian suicide bombers might not be obvious enough. So Judge Abdul Koroma of Sierra Leone wrote: "It is understandable that a prolonged occupation would engender resistance." Judge Nabil Elaraby of Egypt said, "Throughout the annals of history, occupation has always been met with armed resistance. Violence breeds violence." He "wholeheartedly subscribe[d] to the view" that there is "a right of resistance." Judge Hisashi Owada of Japan spoke of the "the so-called terrorist attacks by Palestinian suicide bombers against the Israeli civilian population."
The judges need not have worried. Within hours a joint statement from Hamas, Islamic Jihad, and Yasser Arafat's Fatah organization announced: "We salute the court's decision." Proclaimed a Hamas communiqu? "The racial wall represents the true image of the Zionist entity...The Islamic Resistance Movement, Hamas, welcomes the ICJ's decision and considers it a good step in the right direction.... We stress the need to continue our efforts and use all available means to stop the construction of the racial wall and remove its effects." The Popular Front for the Liberation of Palestine issued a statement hailing the ruling as "a step forward." This judgment clearly played very well to an audience from the State Department's list of foreign terrorist organizations.
There are other disturbing features of the majority judgment and its six concurring opinions. The Court expansively declared that an advisory opinion about one state gives rise to third-party obligations on every U.N. member state. General Assembly resolutions and the output of other U.N. political bodies -- produced in a numbers game which free countries cannot win -- are given considerable weight as sources of obligations. The General Assembly's 10th Emergency Session (which is dedicated to condemning Israel) can be reconvened in perpetuity, thereby seriously reducing U.N. capacity to deal with emergencies anywhere else.
At the same time, other aspects of the Court's decision were crafted to apply to a party of one. A barrier between terrorists and their targets is illegal, according to the Court, because it "severely impedes" or "prevents the realization" of a "right of the Palestinian people to self-determination." No mention was made of the fact that the barrier can and will be moved to accord with the recent Israeli Supreme Court decision, or that previous barriers in southern Lebanon and the Sinai Peninsula were also moved. Jewish self-determination, on the other hand, was not discussed. So the impediment to self-governance by way of Palestinian terrorists who murder Cabinet ministers, or open fire at polling stations, never made it onto the Court's radar screen.
The barrier was also said to violate other Palestinian rights: freedom of movement, the right to work, to health, to education, and to an adequate standard of living. Not once did the Court refer to the individual rights of Israelis, though the rights violated by terrorism start with the right to life and end with the freedom to move anywhere without fear of dying on the way to school or work. Finding a human-rights violation meant interpreting the international rule of proportionality. Undermining all efforts to combat terrorism, the Court balanced Palestinian rights against Israeli "military exigencies" and Communist-inspired concepts of "national security" or "public order." This tactic placed only faceless beneficiaries on the other side of the scale.
Furthermore, said the Court, the right of self-defense does not apply against Palestinian terrorism because it operates from Israeli-controlled territory and is therefore not international. The international borders between Iran, the departure point of the arms-laden ship Karine-A and its intended port in Gaza, or between Damascus, headquarters of The Front for the Liberation of Palestine's General Command, and suicide bombers in Haifa, apparently slipped the judges' minds.
LONG ROAD
These legal results did not materialize in a vacuum: They were the product of the Court's insidious historical revisionism and selectivity. The 1948 war was not an aggressive assault on the nascent Jewish state by combined Arab forces after their rejection of the U.N. Partition Plan. Instead, "On 14 May 1948 Israel proclaimed its independence...armed conflict then broke out between Israel and a number of Arab States and the Plan of Partition was not implemented." The 1967 war was not another of the five successive wars Israel has been forced to wage by successive Arab rejectionists. Instead, "the 1967 armed conflict broke out between Israel and Jordan." The pre-1967 status of the territories as either "disputed" or "occupied" is crucial to the legal issues. Occupied territory requires that the land previously have belonged to somebody else. But the Court said: "there [is] no need for any enquiry into the precise prior status of those territories."
Judge Elaraby apparently forgot he was no longer Egyptian Ambassador to the United Nations -- a post he held until 1999 -- and used his judicial robes to deliberately misrepresent the content of Security Council Resolution 242. In his words "Resolution 242...called for the withdrawal of Israeli armed forces from the territories occupied in the conflict." In fact, painstaking negotiations resulted in the omission of "the" before the word territories. 242 speaks of "Withdrawal of Israeli armed forces from territories occupied in the recent conflict..." precisely so as not to pre-judge the outcome of negotiations over ownership of the territories or future lines of withdrawal.
Having decided that the historical ownership of the territories prior to 1967 is irrelevant, the Court took it upon itself to determine that today all of the territories "which before the [1967] conflict lay to the east of the Green Line" "including East Jerusalem" are "Palestinian territories" It did not matter that the parties to the conflict have agreed that final borders and the status of Jerusalem will be determined by negotiation. Instead, Judge/Ambassador Elaraby used his judicial pulpit to advance a long-held U.N. strategy of imposing results. Having misstated Israel's obligation under 242, he claimed: "It is...politically unsound to...confin[e] it [242's obligations] to a negotiating process." Or as Jordanian Judge Awn Al-Khasawneh, a representative of Jordan at the U.N. General Assembly for 17 years until the mid-1990s, said: "The discharge of international obligations...cannot be made conditional upon negotiations" -- international obligations to negotiate notwithstanding.
Into this cumulative distortion of history and law was injected the biggest U.N. deception of all. The Court's operating premise (accurately described by Elaraby) was simply this: "Occupation, as an illegal and temporary situation, is at the heart of the whole problem." A 56-year Arab campaign to end the "Judaization" of the region -- as a U.N. Human Rights Commission resolution describes Jews on Arab land -- was totally ignored. Judge Higgins disparagingly describes the Court's behavior (though she refuses to dissent) in a concurring opinion: "the Court states that it 'is indeed aware that the question of the wall is part of a greater whole, and it would take this circumstance carefully into account in any opinion it might give.' In fact, it never does so."
Rather than accepting their responsibility to examine the facts for themselves, the Court relied heavily on prior biased U.N. reporting. They looked to the report of Secretary General Kofi Annan in December 2003 on the barrier. He detailed Palestinian human-rights grievances about the barrier without mentioning a single case of terrorism that preceded its construction. The Court looked to the submissions of the UN special rapporteur on Israel whose mandate is to report only "Israel's violations of...international law" and not human-rights violations by Palestinians in Israel. Substantial reliance on such skewed reporting drew the International Court of Justice into the U.N. vortex of hate and discrimination directed at Israel.
Therefore, it is no surprise that within a week the Court's decision has become the subject of another 10th General Assembly Emergency Session -- reconvened for the thirteenth time to condemn Israel and to call for a plethora of future activities intended to further demonize and isolate the Jewish state. Taking their cue from Annan, who immediately pounced on the decision to make demands of Israel, there will be no pause for a single emergency session of the General Assembly on the millions dead or dying in Sudan.
Before its written release, the judgment of the Court was read aloud by its president, Judge Shi Jiuyong of China -- a place where judicial training is still grappling with the inconveniences of the non-separation of legislative and judicial authority. I listened to the broadcast from a Jerusalem television studio. When it was over, I came out into the street and found it blocked off. A few meters away a bomb disposal unit was set up beside a package left at a bus stop. Eventually the soldiers gave the all-clear. Traffic resumed and children ran out of their homes as if nothing had happened. The next day, the people at a bus stop in Tel Aviv were not so lucky, as this time the package contained a real bomb, which left one dead and thirty scarred for life. Though the Court relished the fiction that it had been asked about the legal consequences of the fence, the real-life consequences of an incomplete fence marched on.
It was no accident that the only dissenting opinion on the merits of the case came from Tom Buergenthal, a child survivor of the concentration camps of Auschwitz and Sachsenhausen. He needed no lessons about the face of evil, its methodologies, and its consequences. How sad for the rule of law that he spoke alone.
The Arab drive to destroy the state of Israel has debased the U.N., sullied its charter, perverted the meaning of human rights, and ransacked international law and its highest Court. How many more of the universal ideals upon which our world depends must be desecrated before we say "enough"?

Anne Bayefsky is a senior fellow at the Hudson Institute.

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>> HEALTH CARE


The Health Care They Want to Give You Is A Right
Why shouldn't more money buy you better health care?
Ronald Bailey



Arthur Caplan at the University of Pennsylvania is America's most famous bioethicist. He's unusually reasonable for that notoriously risk-averse breed. But lately he's been reverting to the rigid presumption of egalitarianism that infests most bioethical musings. Caplan is deeply concerned that in the future the rich will get better medicine and the poor worse--that more resources will allow people to obtain better quality products, an apparently unbearable situation when it comes to health care.
Caplan begins by decrying the development of "concierge medicine," in which groups of doctors contract with patients to give them 24/7 access for a fee. Patients who choose concierge medicine are, in effect, paying "bounties" so that they can get better service than other people. Caplan doesn't like this. But why? In free markets most goods and services are differentiated by quality and customers get what they pay for. The more one pays, the better one expects to be treated. But many bioethicists think that medicine is different--that "health care is a right." But this mentality leads them to the position that we only have a right to the health care the state chooses to give us--and that we ought to be, or at least will be, denied anything better.
Caplan writes: "From my point of view, health care ought to be a right for two reasons. If we are going to guarantee equality of opportunity to every American, then health is a key part of that equal opportunity. You have to have it in order to function in a market-based capitalist society. The other reason is it's a sign of communal solidarity. We care about one another. We're not going to let our kids who are mentally ill or our elderly just flounder around even if they can't, so to speak, earn it." But Caplan does think that some differentiation in health care can be, in principle, ethically acceptable, and that society merely ought to guarantee "access to a minimal package of health care."
But what's an acceptable minimum? In his column Caplan decries recent reform proposals for Tennessee's state Medicaid program. The reforms, known as TennCare, were launched with much ballyhoo 10 years ago. They involve the state government taking its allocation of federal dollars for Medicaid and using it to cover not only those residents who met Medicaid poverty guidelines, but also other poor residents lacking health insurance. As with most any open-ended government entitlement, TennCare is heading for bankruptcy. So the Tennessee legislature passed a reform earlier this year under which medical necessity would be defined as the least costly "adequate care," instead of the traditional standard of "most effective" care.
Although a bit vague, the concept of "adequate care" encompasses such things as requiring doctors to prescribe generic drugs whenever possible; limiting the number of prescriptions to no more than six per month without special permission; requiring co-payments from patients in order to cut down on frivolous visits; and an annual limit on the number of doctor visits. Instead of prescription medicines, TennCare patients will have to buy over-the-counter medications like Prilosec for controlling stomach acid and Claritin for allergies.
Tennessee's governor Philip Bredesen claims the reforms will save $2.5 billion for the state over the next four years. However, if the reforms are not adopted, then Tennessee will have to revert to traditional Medicaid programs. That would eliminate health care coverage for 260,000 of the 1.3 million residents currently on TennCare. On the face of it, it seems that the reforms are offering a minimal package of health care as a safety net for Tennessee's poorer residents, which is surely better for them than dropping them from the program entirely.
But Caplan isn't satisfied. He especially objects to the notion of "adequate care." "If a bureaucrat in the Tennessee department of health thinks a low-cost drug or treatment, or even no treatment at all, is 'adequate,' then that is what TennCare will provide," he complains.
Caplan isn't being completely consistent with his own judgments in the past. For example, in the early 1990s, Oregon adopted a plan to control Medicaid costs and extend coverage to more of the state's poor residents by imposing explicit rationing on medical care. The Oregon Health Plan uses a list of about 700 medical conditions, and the state will pay to treat the top 550 of those. So bureaucrats are making decisions about what is medically necessary for the poor in Oregon. For example, in 2000, Oregon refused to pay for an experimental lung and liver transplant for an 18-year-old suffering from cystic fibrosis.
Contra his current stance on TennCare, Caplan saw no problem with this. In a 1996 interview with the American Political Network he declared, "It was incredibly courageous what they did there. They took on the issue (of rationing) in a public way that was unprecedented and hasn't been duplicated since."
Caplan did add that Oregon's Health Plan has "a fatal flaw: the effort to think about rationing was confined to the poor." His implication seems to be that it's OK for bureaucrats to make medical care decisions, just so long as they are made for rich and poor alike. As Caplan told the Chicago Tribune in 1995, "The danger is, politically in this day and age, threadbare [insurance] will be considered enough. The poor will be asked to make sacrifices, and the rest of us can do whatever we want."
But he still hasn't come up with a convincing answer to the question: What's ethically wrong with people with means doing "whatever they want" with regard to their health care? They can already do whatever they want with their educations, jobs, housing, food, and so forth. So eager is Caplan to play class warfare by contrasting concierge care with adequate care that he actually misses the main lesson to be learned from TennCare--that any government-run national single payer system would inevitably run up against fiscal limits and impose rationing on everybody. Bureaucrats would then be making health care decisions for us all. But then at least we could share the "solidarity" of all having the same equally inadequate health care.


Ronald Bailey is Reason's science correspondent. His new book, Liberation Biology: A Moral and Scientific Defense of the Biotech Revolution will be published in early 2005.

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>> OIL


Securing African oil


By Gilbert Da Costa
ASSOCIATED PRESS


ABUJA, Nigeria -- A top U.S. military commander proposed American help yesterday in monitoring West Africa's Gulf of Guinea to secure an unstable region that holds as much as 10 percent of the world's oil reserves.
Gen. Charles Wald, the deputy commander of the U.S. military's European Command for Europe and Africa, said he raised the offer in talks with West African and national officials in Nigeria -- Africa's biggest oil producer and most populous nation.

Britain's Jane's Weekly defense publication has said the United States was readying a proposed African Coastal Security Program to block pirates, smugglers and other criminals in the Gulf of Guinea and around Africa.
The issue is being studied in preliminary feasibility surveys, European Command officials have told the Associated Press.
In Abuja, Nigeria's capital, Gen. Wald said he and Nigerian officials, including Deputy Defense Minister Roland Oritsejafor, discussed finding "a way that we can cooperate together in monitoring the waters off the Gulf of Guinea."
Gen. Wald called it a "hugely important" issue to nations bordering the Gulf.
"It is up to the political leaders, if they decide it is in their common interests to protect the area, we will support that," he said.
He gave no immediate details of what assistance might be involved. Jane's has suggested U.S. help could include naval vessels, communications equipment and training, as well as a counterterrorism base in the Gulf of Guinea.
Earlier this year, the United States funded a feasibility study on the creation of a possible deep-water port at the island nation of Sao Tome and Principe, off Nigeria.
Nigeria, Africa's largest oil exporter, is the world's No. 7 oil exporter and the fifth-biggest source of U.S. oil imports.
Surrounding nations in the Gulf of Guinea likewise are increasing production amid a West Africa oil boom, as the United States, Europe and Asia look for alternatives to oil from the politically volatile Middle East.
Asked whether the United States was willing to help stem attacks against Nigeria's oil industry, Gen. Wald said, "Wherever there's evil, we want to get there and fight it."
Nigeria's oil industry has been beset by armed attacks from militants -- many seeking a share of the country's oil wealth -- that at times in the past year shut down 10 percent to 40 percent of Nigeria's daily production of 2.5 million barrels of crude.
"Where you have wealth, if you don't protect it, you are vulnerable to terrorists and illegal arms dealers and so you are not safe," he said.
The West and Central African regions produce 15 percent of U.S. oil imports, a figure that could rise to 20 percent in the next decade "if it remains attractive to investment," according to a U.S. Congress-commissioned report last week by the Washington-based Center for Strategic and International Studies.
The study urged Washington to increase intelligence and counter-terrorism efforts in Africa. It also should increase funding for training of African armies from $10 million to $100 million, with an equal amount devoted to African peace initiatives, the analysts said.
Gen. Wald said the United States was interested in expanding training and "potentially" helping equip regional peacekeepers to stem conflicts themselves.
Three African nations were singled out by the Congress-commissioned report as facing the most dire terrorism threats in Africa -- Sudan, Somalia and Nigeria. They each have large Muslim populations and the authors recommended "expanding engagement" with them.


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>> THE "GREENS" ?

Hotter-burning sun warming the planet


By Michael Leidig
LONDON SUNDAY TELEGRAPH


The sun is burning hotter than usual, offering a possible explanation for global warming that needs to be weighed when proceeding with expensive efforts to cut emissions of greenhouse gases, Swiss and German scientists say.
"The sun has been at its strongest over the past 60 years and may now be affecting global temperatures," said Sami Solanki, the director of the renowned Max Planck Institute for Solar System Research in Gottingen, Germany, who led the research.

"The sun is in a changed state. It is brighter than it was a few hundred years ago and this brightening started relatively recently -- in the last 100 to 150 years," Mr. Solanski said.
Average global temperatures have increased by about 0.2 degrees Celsius (0.36 degrees Fahrenheit) over the past 20 years and are widely believed to be responsible for new extremes in weather patterns.
Globally, 1997, 1998 and 2002 were the hottest years since worldwide weather records were first collated in 1860.
Bill Burrows, a climatologist and a member of the Royal Meteorological Society, welcomed Mr. Solanki's research.
"It shows that there is enough happening on the solar front to merit further research. Perhaps we are devoting too many resources to correcting human effects on the climate without being sure that we are the major contributor," he said.
Mr. Solanki said that the brighter sun and higher levels of so-called "greenhouse gases" both contributed to the change in the Earth's temperature, but it was impossible to say which had the greater impact.
Most scientists agree that greenhouse gases such as carbon dioxide from fossil fuels have contributed to the warming of the planet in the past few decades, but have questioned whether other factors beyond man's control are also to blame.
To determine the sun's role in global warming, Mr. Solanki's research team measured magnetic zones on the sun's surface known as sunspots, which are believed to intensify the sun's energy output.
The team studied sunspot data going back several hundred years. They found that a dearth of sunspots signaled a cold period -- which could last up to 50 years -- but that over the past century their numbers had increased as the Earth's climate grew steadily warmer.
Mr. Solanki does not know what is causing the sun to burn brighter now or how long this cycle would last.
He says that the increased solar brightness over the past 20 years has not been enough to cause the observed climate changes, but believes that the impact of intense sunshine on the ozone layer and cloud cover could be affecting the climate more than the sunlight itself.
David Viner, the senior research scientist at the University of East Anglia's climatic research unit, said the research showed that the sun did have an effect on global warming.
He added, however, that the study also showed that over the past 20 years, the number of sunspots had remained roughly constant, while the Earth's temperature had continued to increase.
This suggested that over the past 20 years, human activities such as the burning of fossil fuels and deforestation had begun to dominate "the natural factors involved in climate change," he said.

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