>> ISRAEL


Loss of Ofek-6 Deprives Israel of Second Spy Satellite in Critical Period
DEBKAfile Special Report and Military Analysis
September 7, 2004, 12:07 AM (GMT+02:00)
Ofek-6 did not join Ofek-5 up above.
Israel's 6th Ofek (Horizon) plummeted to a watery death in the Mediterranean Sea when it was test-fired Monday, September 6, from Palmahim. Malfunction of the third stage of the Israeli-designed Shavit booster was blamed for the loss of the $50m Ofek-6, the latest in the series of spy satellites developed by a consortium led by Israel Aircraft Industries. The first was launched in 1988. Number 5 has been orbiting 300 to 700 kilometers above earth every 90 minutes for two years out of a life span of five.
Satellites are the first layer of Israel's shield against ballistic missiles, designed to spot incoming threats and alert defensive systems such as the Arrow II missile-killer. They are launched by the same Shavit rocket system as the Ofek. The latest malfunction occurred ten days after Arrow II failed to shoot down a dummy missile designed to perform similarly to the Iranian Shehab-3 intermediate missile in a test-firing off the California coast. The missile's 1300-km range covers all of Israel as well as Turkey and Saudi Arabia.
These two failures are a grave setback to Israel's deterrent ability at a dangerous juncture. In the next two-three years, Israel will need all its resources to face Iran's advancing nuclear threat and burgeoning terrorist offensive. Ofek-6 was intended to give Israel an edge in this contest in three fields:
1. The use of two advanced surveillance satellites instead of one to simultaneously track the two fronts, nuclear and terrorist, Tehran has opened against Israel. One is a nuclear threat, from sites scattered across the Islamic republic; the second derives from proliferating terrorist bases spread out from Iran, Iraq and Syria to Lebanon (app. 879,730 square miles).
Together, the two satellites would have doubled the chances of spotting hostile movements.
The inadequacy of a single satellite in orbit became manifest in the past year when Iran clandestinely fanned its 15 known nuclear installations out across the country, over an area of 636,000 square miles. DEBKAfile's military sources reveal some of their locations for the first time.
They are located in the south, at Fasa, Bushehr and Dakhovin, at the tip of the Shatt al-Arb waterway;
In central Iran, at Natanz, Saghand, Tabas, which is close to the Afghan border, Chalus and Neka on the southern shore of the Caspian Sea;
In the north, at Bonab and Tabriz.
The most remote sites have been sunk below ground in enormous bunkers, some of them decoys to deceive watchers in the sky.
Ofek-5, however efficient it may cannot alone cover this vast spread in time of war. On August 11, it joined the packs of American and Russian satellites tracking the Shehab-3 test firing. The Iranian missile's new navigating system, smaller fins and improved warhead for entry to the earth's atmosphere, designed for greater aerodynamic flexibility and longer range, was not an unmixed success. However, Ofek-5 without a partner was found to be incapable of gathering all the data Israeli intelligence needed to fully appreciate the intentions of Iran's military leaders. This lack of a second satellite will be felt even more acutely when the Shehab-5, whose range is believed to be 2,500 km, comes to be tested soon.
2. There are intelligence reports that as part of its nuclear weapons program, Iran is also building a range of military satellites for launching by Shehab-5. Israel cannot afford to have a lone satellite cruising in the sky in 2005 or 2006 once the Iranians have placed theirs in orbit. From the military standpoint, Israeli is bound to assert space and missile - as well as nuclear - superiority over its enemies.
And another factor to be considered is this. Not only does Israel keep track of Iran's weapons trials, Tehran is watching Israel just as closely.
Although their intelligence technology and access to US and Israeli testing sites are limited, the Iranians do not miss a single report on the deficiencies of the Arrow II and Ofek-6 and must have taken detailed stock of the holes in Israel's defensive and intelligence shields.
3. Israel is obliged to guarantee its intelligence gathering ability in real time independently of US intelligence. The intelligence ties between Washington and Israel are extremely close but neither party is under any illusion that sharing is or can be total. For instance, the United States made a point of keeping Israel in the dark during its March 2003 invasion of Iraq.
In his war book, American Soldier, the Iraq and Afghanistan war commander, General Tommy Franks, admits frankly that he always found ways of indicating to his Arab and Muslim hosts on whose side he stood in the Israel-Arab conflict.
Mutual trust between the Americans and Israelis is certainly not enhanced by the almost daily "revelations" in the American media of fresh aspects of the alleged Israeli mole case casting Israeli diplomats and members of the pro-Israel lobby AIPAC in a dubious light. Officials in Jerusalem are certain that someone in US intelligence, past or present, is deliberately pumping these "revelations" to the press to keep the affair and the atmosphere of mutual suspicion alive.
Israeli defense and aviation industry chiefs are doing their best to play down the consecutive failures of the Arrow II and the Ofek-6 as mere technical glitches that will soon be cleared up. But they cannot hide the fact that Iran is racing forward at top speed with its development of a nuclear weapon and the means to deliver, while Israel is held back with only one eye in the sky and concern about the Arrow's ability to intercept an incoming Iranian Shehab.
Both these deficiencies are within the power of Israel's defense and aviation establishment to correct if they pull their socks up.










European Marksmen-for-Hire in Gaza
DEBKAfile Exclusive Report
September 8, 2004, 12:04 PM (GMT+02:00)
The pair talked as they walked, indicating sandbanks until they reached a point 500 meters from his perch atop an IDF position. They then turned back and disappeared behind Palestinian houses.
M. decided this break in Palestinian routine was worth reporting to his superior officer, which he did and put the incident out of his mind.
Around 90 minutes later, he stood up to move to another part of the roof. His right shoulder had been visible over the parapet no more than three or four seconds when he was knocked over by a gunshot before he had time to fire. Another soldier on the roof shot back at once, but the sniper was gone.
In the hospital, M was shown the bullet extracted from his shoulder. It came from an M16 automatic rifle and had been fired from a distance of 500 meters, exactly the point where the pair had turned back from the sandbank opposite M.'s rooftop sights. His comrade told him he had caught a glimpse of the shooter he missed and was sure he was European. "A sniper fast enough to lock onto my shoulder, shoot and disappear - all in the space of a three or four seconds must be a top-line professional marksman," said M.
His account has been repeated by members of other units serving in the Rafah and Khan Younes sectors of the southern Gaza Strip. They swear they have come across snipers they are sure are not Palestinian but foreigners from northern parts of the world.
DEBKAfile's military sources report that in 2003, the IDF confirmed four instances of "foreign" snipers operating in Palestinian ranks. By September, 5 incidents had been registered this year. In one, an Israel soldier died of a direct shot to the head; four were injured in Operation Rainbow in Rafah earlier this year and two more recently. Soldiers serving in the southern sector claim the number of casualties from European snipers is much higher and are asking questions. Their officers reply that the matter is extremely sensitive but urge them to take precautions on the assumption that professional marksmen are in the vicinity.
Some troops say they have heard the special bang peculiar to the Russian-made SVD sharpshooter's rifle, of the type captured aboard the Karin-A Palestinian smugglers' ship and found during Operation Rainbow. The troops who have come up against these foreigners note their exceptional speed. They fire a single round and duck out of sight, leaving a Palestinian to take over their firing position.
This description, according to DEBKAfile's military sources, fits mercenary marksmen. By firing once and moving out, they save themselves from Israeli sniper reprisals. As one Israeli officer put it, "After all they're in it for the money, not to get killed." For that reason too, they never stay long in the Gaza Strip - a couple of days and they are gone back across the border into Egypt. Some are thought to enter through the Palestinian gunrunning tunnels from Sinai to Rafah and leave by the same route. Others may be smuggled in from Sinai to southern Israel in groups of illegal workers and prostitutes. The smugglers are said to receive extra-high pay, as much as $1,000, for bringing a foreign marksman in and out of the Gaza Strip.
Palestinian terrorist chiefs have been importing marksmen for hire to hit Israeli troops for two or more years. In March 2002, the London Daily Telegraph, known for its good British MoD and intelligence sources, reported a request from the Israeli Mossad to the British MI6 to find out if an IRA sharpshooter had not been responsible for the 7 Israeli troop deaths at the Wadi Harmiya checkpoint. Israeli tests had shown that the planning of the ambush, the type of weapons used, the way the firefight was managed and, even more tellingly, the fact that the weapons left behind were not the ones used, were typical of an assailant thoroughly conversant with IRA tactics.
One month later, when the Moshav Adura was stormed by Palestinian gunmen, Israeli civilians who had seen the terrorists at close quarters reported that among the Palestinians was a European.

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>> NORTH KOREA




43 Pro-N. Korean Websites on Internet
It has been revealed that there are 43 pro-North Korean websites on the Internet. Choi Ki-moon, the commissioner general of the National Police Agency (NPA), revealed this during an administrative committee meeting while responding to a question by GNP lawmaker Park Chan-sook, who asked, "How many pro-North Korean websites have the police detected on the Internet?"
According to the "Report on Overseas pro-North Korean Websites" separately submitted to Park by the NPA, there were 40 pro-North Korean internet sites as of the end of August, such as "Mt. Baekdu," "Minjok Tongsin," "Songun Politics Study Group," "Road to Patriotism," "The National Democratic Front South Korea (NDFSK)," "Juche (Self-Reliance) Ideology," and "Pyongyang Information Center." Park said, "According to the report, there were 40 sites at the end of August. Another three have recently been added, said Choi, so there were now 43 sites." The most number of these sites, 17, were opened in Japan, followed by the U.S. with 11, China with 10 and Singapore and Germany with one each.
In response to another question by Park, "Do the police have any measures against the North's Internet terrorism?" Choi said, "Most of those sites are based overseas, but we are fully investigating some of them." Also, when Park asked, "Are you carrying out an investigation into the incident in which the life stories of Kim Il-sung family were posted on the homepage of the People's Solidarity?" he answered, "We confirmed that three illegal documents were posted on the site, and they were emailed. So, we asked the Information Ministry to delete them and are investigating how they were posted."
The police said that they arrested two National Security Law offenders this year for using pro-North Korean sites. A 34-year-old man was arrested in March for posting 16 illegal documents on the Hanchongryon caf? operated by the internet portal company Daum, including, "Our Guiding Sun, General Kim Jong-il" posted on the homepage of NDFSK. In June, another 52-year-old man was arrested for posting 74 illegal materials on 10 private and group homepages, including "The General's World," posted on NDFSK.
(Yoon Jeong-ho, jhyoon@chosun.com )




Kim Jong-il's Sister-in-Law Defected to United States: Tokyo Shimbun
Japan's Tokyo Shimbun, quoting several sources, reported Wednesday that North Korean leader Kim Jong-il's sister-in-law, Ko Young-suk, defected to the U.S. in October 2001 and was currently receiving special protection.
Ko Young-suk is the younger sister of Ko Young-hee, Kim Jong-il's wife who is believed to have recently died. Ko Young-suk was arrested as she tried to enter the U.S. on a fake Japanese passport, and she applied for political asylum, the Japanese paper reported. The paper also reported that she is receiving special protection somewhere in the United States, and she appears to have provided intelligence to the U.S. concerning Kim Jong-il that she learned through her elder sister and about internal conditions in North Korea.
The Tokyo Shimbun said that according to the Monthly Chosun, the 46-year-old Ko looked after Kim's sons Kim Jong-chul and Kim Jong-woon when they were in Switzerland, and it's very likely that she knows about the characters of the two brothers and their property abroad.
This would not be the first time an in-law of Kim Jong-il has defected; the sister of Kim's first wife, Seong Hye-rim, also defected to a third country.
(englishnews@chosun.com )




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French connection armed Saddam
By Bill Gertz
THE WASHINGTON TIMES
The United States stood by for years as supposed allies helped its enemies obtain the world's most dangerous weapons, reveals Bill Gertz, defense and national security reporter for The Washington Times, in the new book "Treachery" (Crown Forum). In this excerpt, he details France's persistence in arming Saddam Hussein.
New intelligence revealing how long France continued to supply and arm Saddam Hussein's regime infuriated U.S. officials as the nation prepared for military action against Iraq.
The intelligence reports showing French assistance to Saddam ongoing in the late winter of 2002 helped explain why France refused to deal harshly with Iraq and blocked U.S. moves at the United Nations.
"No wonder the French are opposing us," one U.S. intelligence official remarked after illegal sales to Iraq of military and dual-use parts, originating in France, were discovered early last year before the war began.
That official was careful to stipulate that intelligence reports did not indicate whether the French government had sanctioned or knew about the parts transfers. The French company at the beginning of the pipeline remained unidentified in the reports.
France's government tightly controls its aerospace and defense firms, however, so it would be difficult to believe that the illegal transfers of equipment parts took place without the knowledge of at least some government officials.
Iraq's Mirage F-1 fighter jets were made by France's Dassault Aviation. Its Gazelle attack helicopters were made by Aerospatiale, which became part of a consortium of European defense companies.
"It is well-known that the Iraqis use front companies to try to obtain a number of prohibited items," a senior Bush administration official said before the war, refusing to discuss Iraq's purchase of French warplane and helicopter parts.
The State Department confirmed intelligence indicating the French had given support to Iraq's military.
"U.N. sanctions prohibit the transfer to Iraq of arms and materiel of all types, including military aircraft and spare parts," State Department spokeswoman Jo-Anne Prokopowicz said. "We take illicit transfers to Iraq very seriously and work closely with our allies to prevent Iraq from acquiring sensitive equipment."
Sen. Ted Stevens, Alaska Republican and chairman of the Senate Appropriations Committee, declared that France's selling of military equipment to Iraq was "international treason" as well as a violation of a U.N. resolution.
"As a pilot and a former war pilot, this disturbs me greatly that the French would allow in any way parts for the Mirage to be exported so the Iraqis could continue to use those planes," Stevens said.
"The French, unfortunately, are becoming less trustworthy than the Russians," said Rep. Curt Weldon, Pennsylvania Republican and vice chairman of the House Armed Services Committee. "It's outrageous they would allow technology to support the jets of Saddam Hussein to be transferred."
The U.S. military was about to go to war with Iraq, and thanks to the French, the Iraqi air force had become more dangerous.

The pipeline
French aid to Iraq goes back decades and includes transfers of advanced conventional arms and components for weapons of mass destruction.
The central figure in these weapons ties is French President Jacques Chirac. His relationship with Saddam dates to 1975, when, as prime minister, the French politician rolled out the red carpet when the Iraqi strongman visited Paris.
"I welcome you as my personal friend," Chirac told Saddam, then vice president of Iraq.
The French put Saddam up at the Hotel Marigny, an annex to the presidential palace, and gave him the trappings of a head of state. The French wanted Iraqi oil, and by establishing this friendship, Chirac would help France replace the Soviet Union as Iraq's leading supplier of weapons and military goods.
In fact, Chirac helped sell Saddam the two nuclear reactors that started Baghdad on the path to nuclear weapons capability.
France's corrupt dealings with Saddam flourished throughout the 1990s, despite the strict arms embargo against Iraq imposed by the United Nations after the Persian Gulf war.
By 2000, France had become Iraq's largest supplier of military and dual-use equipment, according to a senior member of Congress who declined to be identified.
Saddam developed networks for illegal supplies to get around the U.N. arms embargo and achieve a military buildup in the years before U.S. forces launched a second assault on Iraq.
One spare-parts pipeline flowed from a French company to Al Tamoor Trading Co. in the United Arab Emirates. Tamoor then sent the parts by truck through Turkey, and into Iraq. The Iraqis obtained spare parts for their French-made Mirage F-1 jets and Gazelle attack helicopters through this pipeline.

A huge debt
U.S. intelligence would not discover the pipeline until the eve of war last year; sensitive intelligence indicated that parts had been smuggled to Iraq as recently as that January.
"A thriving gray-arms market and porous borders have allowed Baghdad to acquire smaller arms and components for larger arms, such as spare parts for aircraft, air-defense systems and armored vehicles," the CIA said in a report to Congress made public that month.
U.S. intelligence agencies later came under fire over questions about prewar estimates of Iraq's stockpiles of weapons of mass destruction. But intelligence on Iraq's hidden procurement networks was confirmed.
An initial accounting by the Pentagon in the months after the fall of Baghdad revealed that Saddam covertly acquired between 650,000 and 1 million tons of conventional weapons from foreign sources. The main suppliers were Russia, China and France.
By contrast, the U.S. arsenal is between 1.6 million and 1.8 million tons.
As of last year, Iraq owed France an estimated $4 billion for arms and infrastructure projects, according to French government estimates. U.S. officials thought this massive debt was one reason France opposed a military operation to oust Saddam.
The fact that illegal deals continued even as war loomed indicated France viewed Saddam's regime as a future source of income.

Telltale chemical
Just days before U.S. and coalition forces launched their military campaign against Iraq, more evidence of French treachery emerged.
In mid-March 2003, U.S. intelligence and defense officials confirmed that exporters in France had conspired with China to provide Iraq with chemicals used in making solid fuel for long-range missiles. The sanctions-busting operation occurred in August 2002, the U.S. National Security Agency discovered through electronic intercepts.
The chemical transferred to Iraq was a transparent liquid rubber called hydroxy terminated polybutadiene, or HTPB, according to intelligence reports.
U.S. intelligence traced the sale to China's Qilu Chemicals, "the largest manufacturer of HTPB in China," one official says.
A French company, CIS Paris, helped broker the sale of 20 tons of HTPB, a controlled export that was shipped from China to the Syrian port of Tartus. The chemical solution was sent by truck from Syria into Iraq, to a missile-manufacturing plant. The Iraqi company that purchased the shipment was in charge of making solid fuel for long-range missiles.
HTPB technically is a dual-use chemical, because it also can be used for commercial purposes such as space launches. However, Iraq often disguised military purchases as commercial ones, as documents found later in Iraq would confirm.
In a report to Congress, the CIA said Iraq had constructed two "mixing" buildings for solid-propellant fuels at a plant known as al-Mamoun. The facility originally was built to produce the Badr-2000, a solid-propellant missile also known as the Condor.
The new buildings "appear especially suited to house large, U.N.-prohibited mixers of the type acquired for the Badr-2000 program," the CIA report stated.

French denials
Despite controversy over prewar intelligence on Iraq, the CIA said its estimates of Iraqi missiles were on target.
Representatives of the French and Chinese governments went on the attack when The Washington Times asked about the chemical sale.
Chinese Embassy spokesman Xie Feng did not address the specifics, but said "irresponsible accusations" about China's exports had been made in the past.
"These accusations are devoid of all foundation," French Foreign Ministry spokesman Francois Rivasseau declared. "In line with the rules currently in force, France has neither delivered, nor authorized, the delivery of such materials, either directly or indirectly."
By that point, many in the U.S. government were fed up with French denials.
Deputy Defense Secretary Paul Wolfowitz called in the French ambassador to the United States, Jean-David Levitte, to complain about France's covert and overt support for Saddam's regime.
"Twelve years of waiting was too costly in terms of the growing threat from Baghdad," Wolfowitz told the ambassador, according to a U.S. official who was present.

Made in France
The war in Iraq, which began March 19, 2003, provided disturbing evidence that France's treacherous dealings come at a steep cost to the United States.
On April 8 came the downing of Air Force Maj. Jim Ewald's A-10 Thunderbolt fighter over Baghdad and the discovery that it was a French-made Roland missile that brought down the American pilot and destroyed a $13 million aircraft. Ewald, one of the first U.S. pilots shot down in the war, was rescued by members of the Army's 54th Engineer Battalion who saw him parachute to earth not far from the wreckage.
Army intelligence concluded that the French had sold the missile to the Iraqis within the past year, despite French denials.
A week after Ewald's A-10 was downed, an Army team searching Iraqi weapons depots at the Baghdad airport discovered caches of French-made missiles. One anti-aircraft missile, among a cache of 51 Roland-2s from a French-German manufacturing partnership, bore a label indicating that the batch was produced just months earlier.
In May, Army intelligence found a stack of blank French passports in an Iraqi ministry, confirming what U.S. intelligence already had determined: The French had helped Iraqi war criminals escape from coalition forces -- and therefore justice.
Then, there were French-made trucks and radios and the deadly grenade launchers, known as RPGs, with French-made night sights. Saddam loyalists used them to kill American soldiers long after the toppling of the dictator's regime.
The intelligence team sent to find Iraqi weapons also discovered documents outlining covert Iraqi weapons procurement leading up to the war. The CIA, however, refused to make public the documents on assistance provided by France or by other so-called allies of the United States.
The clandestine arms-procurement network, disclosed late last year by the Los Angeles Times, put a Syrian trading company in a pivotal role. Documents showed the company, SES International Corp., was the conduit for millions of dollars' worth of weapons purchased internationally, including from France. Al Bashair Trading Co. in Baghdad was the major front used by Saddam to buy arms abroad.
A Defense Department-sponsored report produced in February identified France as one of the top three suppliers of Iraq's conventional arms, after Russia and China. The report revealed that France supplied 12 types of armaments and a total of 115,005 pieces.
A major reason Iraqi militants posed a threat to U.S. forces for so many months was that they had access to weapons that Saddam stockpiled in violation of U.N. resolutions.

A close call
One of the most frightening examples of how the militants put French weapons to use against the Americans came Oct. 26, 2003. That morning, at about 6 o'clock, they bombarded the Rashid Hotel in Baghdad with French missiles.
The French rockets nearly killed Wolfowitz, whom Defense Secretary Donald H. Rumsfeld has called "the brains" of the Pentagon.
The deputy defense secretary had just gotten dressed in his room that Sunday morning when a car stopped several hundred yards from the hotel. It dropped off what appeared to be one of the blue electrical generators that were common in the power-starved Iraqi capital. The driver stayed just long enough to open a panel on the end of the metal box that was pointing upward toward the hotel.
The car sped off. Minutes later, a pod of 40 artillery rockets set off by remote control began firing at the hotel, their trails leaving sparks as they flew. The rockets hit one floor below where Wolfowitz and about a dozen aides and reporters were staying.
One rocket slammed into the room of Army Lt. Col. Charles H. Buehring, a public-affairs officer. The explosion hit Buehring, 40, in the head. A reporter discovered him and tried to help, but the Fayetteville, N.C., resident died a short time later.
In all, between eight and 10 missiles hit the hotel. The casualties might have been higher, and included Wolfowitz, if the improvised rocket launcher had fired all the missiles.
Because of a malfunction, 11 failed to go off.

Playing defense
Half the missiles fired at Wolfowitz's hotel were French-made Matra SNEB 68-millimeter rockets, with a range of two to three miles. The others were Russian in origin.
The French missiles were "pristine," Navy SEAL commandos reported.
"They were either new or kept in very good condition," said one SEAL who inspected the rocket tubes.
The rockets were thought to have been taken from Iraq's French-made Alouette or Gazelle attack helicopters.
The fact that new French missiles were showing up in the hands of Saddam loyalists months after the fall of Baghdad made Wolfowitz and his close aides livid. Still, others in the U.S. government worked to defend the French.
The CIA, to avoid upsetting ties with French intelligence, played down the French role in helping Saddam. The agency had a weak human intelligence?gathering capability, and France, because of its history of ties to Iraq, was much better at penetrating Saddam's regime.
The State Department's response was not surprising. Asked about French support for Iraq while on a fence-mending mission to Paris in May 2003, Secretary of State Colin L. Powell had said: "We're not going to paper over it and pretend it didn't occur. It did occur. But we're going to work through that."
Powell, the retired four-star general and former chairman of the Joint Chiefs of Staff, was too inexperienced in the ways of diplomacy. As a result, he largely had turned over control of State Department policy-making to the Foreign Service.
The problem with the Foreign Service is its culture. It trains diplomats to "get along" with the foreign governments they are sent to work with. Not insignificantly, Paris is among the most coveted postings in the world.

Backing down
Pentagon hard-liners on France, led by Rumsfeld and Wolfowitz, carried the day early in the war, but accommodationists within the upper councils of the Bush administration took control as the conflict went on.
Among those who took a softer position on France was National Security Adviser Condoleezza Rice, the former Stanford provost who surrounded herself with State Department officials and Foreign Service officers.
Rumsfeld drew a great deal of attention on Jan. 22, 2003 -- and created a backlash within the State Department -- when he let fly a verbal salvo against France and Germany for not siding with the United States, describing them as "old Europe" during a meeting with foreign reporters.
Rumsfeld also criticized French and German political leaders for making policy based not on "their honest conviction as to what their country ought to do" but on opinion polls that reflected ever-shifting public sentiments.
As the accommodationists in the Bush administration gained the upper hand, Rumsfeld and others were ordered to tone down the anti-Europe rhetoric. By late last year, the defense secretary's critics within the Foreign Service were crowing that Rumsfeld had been "tamed."
Just a day after the Iraqi attack on Wolfowitz's hotel in Baghdad, in an interview with The Washington Times, Rumsfeld took an even softer approach toward the French.
"People tend to look at what's taking place today and opine that it is something distinctive," Rumsfeld said of the turbulence in Franco-American relations. "I don't find it distinctive. I find it an old record that gets replayed about every five or seven years."
The public soft-policy line was, in many ways, a great victory for France. Even as new evidence poured in that the French had betrayed the United States and cost the lives of American troops, the government backed down from a confrontation with its erstwhile ally.

Purchase this book Online at Barnes and Noble
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Iraq Shipped Banned Missile Engines Out of Country Shortly After War, UNMOVIC Says
The Iraqi Ministry of Trade began shipping scrap metal, including missile engines and equipment that could be used in WMD production, to Jordan and other countries less than three months after the United States and its allies overthrew former President Saddam Hussein, according to a report released yesterday by the U.N. Monitoring, Verification and Inspection Commission (see GSN, June 10).
The report, expected to be presented today to the U.N. Security Council, criticizes "the systematic removal" of items subject to U.N. monitoring from a number of Iraqi sites, the Associated Press reported.
Exported items include at least 42 engines from missiles with ranges that exceeded the 150-kilometer limit imposed by the United Nations following the 1991 Gulf War, according to AP.
Several Iraqi sites once used to manufacture missiles and precursors for chemical weapons have been destroyed or emptied, according to commercial satellite photographs.
Scrap yard managers estimated that 60,000 tons of scrap metal, stainless steel and other alloys passed through Jordan's largest free trade zone in 2003, followed by an additional 70,000 until June of this year, the report says. U.N. inspectors learned that was "only a small part of all scrap materials exported from Iraq to the other countries that border Iraq and further to Europe, North Africa and Asia," according to the report.
U.N. inspectors said Jordan and the Netherlands, another country where large quantities of the scrap were found, agreed to allow inspectors to observe the destruction of the engines and the other equipment.
Nevertheless, 18 SA-2 missile engines, seven high-tech machines that could be used to make missile parts, and other equipment essential to missile production remain missing, according to the report (Edith Lederer, Associated Press/Yahoo!News, Sept. 7).


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>> KERRY WATCH



Kerry's Iranian Connection Fights Democracy
By Robert Spencer
FrontPageMagazine.com | September 8, 2004
Frivolous lawsuits have long been used as weapons of the powerful against the weak; a particularly egregious example is now playing out in Texas, courtesy of one of John Kerry's most controversial supporters: the Iranian Hassan Nemazee. Nemazee is pursuing a ten-million-dollar damage claim against the Student Movement Coordination Committee for Democracy in Iran (SMCCDI) and its coordinator, Aryo B. Pirouznia. A Nemazee victory in this suit would almost certainly muzzle or destroy altogether the SMCCDI, one of the most energetic and courageous opponents of Iran's entrenched but uneasy mullahocracy. But now that Nemazee's lawsuit has been filed, it has become increasingly clear that it could embarrass the entire Democratic Party -- and severely damage the already flagging candidacy of John Kerry.
Nemazee is an influential figure with many friends in high places in groups such as the American-Iranian Council (AIC), the National Iranian American Council (NIAC), and the Iranian-American Bar Association (IABA). Nemazee's name is also well known in Democratic Party circles. He was a prominent contributor to Bob Torricelli's New Jersey Senate campaign. The multimillionaire entrepreneur also contributed $50,000 to his friend Al Gore's Recount Fund (and $250,000 to the Gore campaign), $60,000 to Bill Clinton's legal defense fund, and over $150,000 to the Democratic National Committee. Clinton attempted to reward him by naming him U.S. Ambassador to Argentina -- but the Senate declined to confirm him after Forbes magazine published, in May 1999, an extremely damaging expose of his shady financial dealings.
Undaunted, Nemazee continued efforts to establish fruitful contacts between Iranian groups advocating normalization of relations with Iran and high-level members of the Democratic Party. He joined the Board of Directors of the AIC, an organization whose president, Hooshang Amirahmadi, is identified on the SMCCDI website as a "well known lobbyist for the Iranian Mullahocracy." Nemazee was involved in a March 2002 fundraiser for Senate Foreign Affairs Committee heavyweight Joe Biden (D-DE). This event was hosted by Sadegh Namazikhah, another AIC member whom Aryo Pirouznia charges with trying to improve public perception of "one of the most despotic regimes in the world."
Three months later it was Kerry's turn: Nemazee invited the future Democratic standard bearer to speak at an AIC dinner. Nemazee himself also spoke, declaring that the AIC "does not attempt to explain or rationalize the position of the government of Iran, nor does it attempt to do so for the government of the United States. Its mission is to educate both sides and to attempt to establish the basis and the vehicle for a dialogue which will ultimately lead to a resumption of relations." If Kerry registered any protest against this assertion that the United States should normalize relations with one of the world's bloodiest dictatorships, it was not recorded. Nemazee, according to Iran experts Banafsheh Zand-Bonazzi and Elio Bonazzi, now seems to be denying that he ever made this speech at all -- although it is still posted on the AIC's website.
Outside San Francisco's Ritz-Carlton Hotel, where this grand event was held, the SMCCDI organized a large protest rally. Nemazee, evidently, would not forget this and other affronts. In his lawsuit, he charges that the SMCCDI knowingly and repeatedly made "false and defamatory statements" about his support for the Iranian regime. His complaint states categorically that "Nemazee does not `support ... the Islamic Republic and the Revolution.'"
But his friend Kerry, meanwhile, seems to have absorbed the very lessons that Nemazee now denies having tried to teach. Before the Council on Foreign Relations in December 2003, Kerry announced that he would be willing as President to pursue rapprochement with Iran: "As president, I will be prepared early on to explore areas of mutual interest with Iran, just as I was prepared to normalize relations with Vietnam a decade ago." And most notoriously, his staff sent out an email that somehow made its way to the government-controlled Mehr News Agency in Tehran, where it was trumpeted as evidence of his resolve to patch things up with the mullahs. "It is in the urgent interests of the people of the United States," the message read, "to restore our country's credibility in the eyes of the world. America needs the kind of leadership that will repair alliances with countries on every continent that have been so damaged in the past few years, as well as build new friendships and overcome tensions with others."
Kerry's camp professed puzzlement over how this email made it to Tehran. Initially, a Kerry aide dismissed the story as "just a hoax." But this pose proved impossible to maintain. Kerry's senior foreign affairs advisor, Rand Beers, later admitted that the message was genuine, saying: "I have no idea how they got hold of that letter, which was prepared for Democrats Abroad. I scratched my head when I saw that. The only way they could have gotten it was if someone in Iran was with Democrats Abroad." In light of the ties between the AIC and the Democratic Party, that possibility is at least open to question.
But Kerry's olive branches to the regime that carries on the legacy of the Ayatollah Khomeini now embarrass him: his Council on Foreign Relations remarks seem to have been removed from the Kerry-Edwards website. Hence also the Nemazee lawsuit: to silence the SMCCDI and its inconvenient protests. One way to do that is indirect, by using the suit to put the SMCCDI out of action. According to documents that Pirouznia/SMCCDI defense attorney Bob Jenevein made available to me, the prosecution has been playing several such games. On August 20, 2004, Jenevein wrote a letter to Rob Wiley of Locke Lidell & Sapp, the elite Texas law firm representing Nemazee. He proposed five stipulations -- points that both sides could agree to, so that they need not spend the court's time trying to establish or disprove them. These included: "1. The Islamic regime in Iran is sympathetic to terrorists. 2. The Islamic regime in Iran poses a threat to the security of the United States and/or its citizens at home or abroad. 3. For the United States to normalize its diplomatic relations with Iran at this time would lend credibility to the Islamic regime in Iran. 4. For the United States to ease trade sanctions against Iran at this time would lend credibility to the Islamic regime in Iran. 5. Anything that would lend credibility to the Islamic regime in Iran at this time would have value to that regime." Wiley answered on the same day that his team had taken the stipulations "under advisement"; but in the almost two weeks since then, gave no further answer. Thus Nemazee's attorneys effectively agreed to none of the stipulations, raising the prospect that Jenevein would have to spend hours upon hours in court establishing these points, thereby endangering the SMCCDI by straining its financial resources.
Other documents furnished by Jenevein suggest that the prosecution is trying to run up the costs of the litigation in other ways also -- attempting to find out who is paying Pirouznia's legal bills and to drive SMCCDI into destitution. One example was a fax that Wiley sent to Jenevein last Monday afternoon, informing him of a draft motion that the prosecution was planning to file on certain matters regarding the case unless the prosecution and defense reached an agreement by 5PM Tuesday. Jenevein immediately faxed a response, suggesting ways to agree, but the prosecution ignored it and filed the motion the next morning anyway. This multiplication of motions, of course, is a classic tactic to drive up court costs.
Related to all this is the curious fact that, according to an inside source close to the case, Nemazee has never made himself available for a deposition. Pirouznia's defense attorney contacted Nemazee's lawyers in early August, immediately after taking the case (five months after it was filed), to request dates for this deposition; Nemazee's team responded that he would only be available on two dates in November and two in December - all four after the election, and all over seven months after the case was filed. "He's saying we want his deposition for political reasons," the insider exclaimed incredulously, "but HE filed the lawsuit!" The Pirouznia/SMCCDI team has filed a motion ordering Nemazee to appear for a deposition on September 20; no ruling has been made on it yet.
Why file a lawsuit, and then play hide-and-seek with the defense? The lobbyist and his team seem to be trying to keep the case under wraps until after the presidential election. "Nemazee is worried that his candidate will be embarrassed if the facts of this litigation are made public," observes Jenevein. "I'm afraid that this case would appear typical of the frivolous lawsuits about which Republicans complain so loudly. To the extent that Hassan Nemazee constitutes a link between a presidential campaign and the Iranian regime, that link would be considered a grave political liability for the campaign.
The lawsuit is designed to silence those who speak about this."
The Nemazee camp appears to be growing increasingly anxious lest details of their suit leak out. That may be why, according to an informed source, the founder of a public relations firm and international speaker's bureau that specializes in foreign policy and terrorism-related issues recently contacted Pirouznia and invited him to lunch -- ultimately, two lunches on consecutive days, all to argue that he should drop the suit. Important figures of the Iranian democracy movement, the PR wizard intimated to Pirouznia, really wanted him to forget the whole thing. Dumbfounded, Pirouznia reminded the PR maven that it was he who was the target of the suit, and that he was only defending himself and his organization. Several other people who figures connected to the defense team wryly term "Nemazee's messengers" also contacted Pirouznia to make the same appeal.
The SMCCDI and Aryo Pirouznia are evidently not the only ones in Nemazee's sights. According to an informed source, Nemazee's lawyer asked in official documents used by the plaintiff to build the case about the relationship between Pirouznia and another pair of stalwart Iran democracy activists: Banafsheh Zand-Bonazzi and Elio Bonazzi. Said the source: "Aryo's lawyer objected that this is not relevant, but basically this means that even if Nemazee didn't sue the Bonazzis directly, they are among his targets." This despite the fact that the Bonazzis have never advanced any political agenda for Iran beyond promoting the idea of a genuine (not UN- or Jimmy Carter-led) internationally monitored referendum to decide on Iran's form of government after the complete ousting of any form of theocracy. Zand-Bonazzi's father, Siamak Pourzand, is a well-known Iranian journalist, intellectual, freedom fighter - and political prisoner of the Islamic regime.
Thus the mullahs fight on for their survival in the courtrooms of Texas.
Robert Spencer is the director of Jihad Watch and the author of Onward Muslim Soldiers: How Jihad Still Threatens America and the West (Regnery Publishing), and Islam Unveiled: Disturbing Questions About the World's Fastest Growing Faith (Encounter Books).

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>> ECONOMY


Creative Accounting Only Goes So Far
Unsound transactions are going to catch up with the government.
A new report from the Congressional Budget Office explains that the deficit is a virtually meaningless measure of the government's indebtedness. The main reason for this is that the federal government uses cash accounting rather than accrual accounting. What this means is that the government can acquire massive debts far into the future with virtual impunity. The government can also, in effect, cosign for loans and provide insurance that could potentially cost taxpayers hundreds of billion of dollars without it ever showing up in the budget until a check has to be written.
By the CBO's reckoning, the federal government's true debt last year was $8.5 trillion -- more than twice the debt held by the public, which we generally think of as the national debt. That figure came to $4 trillion, only slightly more than the $3.9 trillion in future benefits owed to government employees and veterans.
But even the $8.5 trillion figure is much too low because it excludes the really big debts that are owed for Social Security and Medicare. Since these obligations extend far into the future, the only way they can realistically be quantified is by using a statistical method called present value. This takes account of the fact that $1 fifty years from now is worth much less than $1 today. Future debts need to be discounted to put them into today's dollars.
Even with discounting, however, the figures are massive. The CBO estimates the unfunded liability for Social Security at $7.2 trillion. But this is virtually nothing next to the $37.6 trillion cost of Medicare. In short, we would need to have about $45 trillion in the bank today earning interest in order to pay all the promises that have been made for future Social Security and Medicare benefits -- over and above the future taxes and premiums that will be collected to fund these programs.
To put these numbers into a form that is comprehensible, the CBO has made a calculation of the future gross domestic product that will be produced over the same time period. These are the actual resources from which Social Security and Medicare benefits will be paid. The CBO estimates that we would have to raise taxes by 6.5 percent of GDP immediately and forever to maintain these programs in perpetuity. This year alone, that would mean a tax increase of $800 billion.
This is why I believe it was utter insanity for the White House and Congress to have enacted an expansion of Medicare for prescription drugs last year. This one unconscionable action increased the long-term liability of Medicare by 1 percent of GDP forever.
A key reason why they were able to get away with this idiotic action was that all the costs come well in the future -- the program doesn't even begin until 2006 and then phases-in for a few years before being fully effective. Thus, for a time, Republicans were able to promise something-for-nothing. It's only a matter of time before taxes are sharply increased so that the elderly can get for free what the rest of us have to pay for ourselves.
It goes without saying that if any private corporation had behaved the way the government has, it would soon find its executives being sentenced by a federal judge. It is illegal for businesses to keep their books the way the government does, hiding their long-term liabilities from shareholders the way the government disguises its indebtedness from voters.
Writing in the Nebraska Law Review last year, George Washington University law professor Cheryl Block compared bookkeeping by the federal government to bookkeeping by businesses involved in corporate scandals. She found little difference. Congress, she wrote, "has been guilty of using accounting devices remarkably similar to those used by Enron, WorldCom and others to `cook the books' and to mislead the public with regard to government finances."
At least when a corporation misbehaves, there is an ultimate market check in the form of bankruptcy. Creative accounting can only go so far in covering up transactions that are fundamentally unsound. But national governments never go bankrupt and don't have to worry about customers buying their goods and services for revenue. They just raise taxes or print money and keep on going. "As a result, temptations for the government to engage in creative accounting may be even greater than those in the private sector," Block suggested.
It's worth keeping this in mind the next time some congressional demagogue denounces corporate dishonesty.
-- Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.
http://www.nationalreview.com/nrof_bartlett/bartlett200409080940.asp

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$2.3 Trillion in New Debt Expected by 2014
Economic Growth Will Not Ease Strain on U.S., Budget Office Director Warns
By Jonathan Weisman
Washington Post Staff Writer
Wednesday, September 8, 2004; Page A02
This year's federal budget deficit will reach a record $422 billion, and the government is now expected to accumulate $2.3 trillion in new debt over the next 10 years, the Congressional Budget Office reported yesterday.
The expected deficit for the current fiscal year, which ends Sept. 30, is $56 billion less than the CBO predicted in March, as a recovering economy added to tax receipts. But it is $46 billion more than last year's record shortfall, with even more red ink possible, the nonpartisan agency reported: The expected total 10-year deficit would climb from $2.3 trillion to $3.6 trillion if President Bush is able to extend the tax cuts he enacted. They are currently set to expire in 2011.
"This is a fiscal situation in which we cannot rely on economic growth to cause deficits to disappear," warned CBO Director Douglas Holtz-Eakin, a former economist for the Bush White House. "The budgetary outlook will be dictated by policy choices."
About half of the projected 10-year deficit is based on an assumption that conflicts in Iraq and Afghanistan will continue. The CBO policy requires that deficit projections be based on current conditions.
The budget office expects that the total federal debt held by the public -- the amount borrowed through the sale of Treasury bonds to finance overspending -- will balloon 58 percent over the next decade, from $4.3 trillion this year to nearly $6.8 trillion in 2014.
The CBO's findings may refocus some political attention on the fiscal health of a federal government that, between recession, war and tax cuts, has swung from record surpluses to record deficits since Bush took office.
Both political parties seized on the CBO's findings, with Republicans stressing the $56 billion improvement over the CBO's March estimate, and Democrats focusing on the longer-term forecast.
The new estimate is "a sign of the economic growth that is a result of President Bush's leadership on tax relief," said Tim Adams, policy director for the Bush campaign.
Democratic presidential nominee John F. Kerry retorted, "Only George W. Bush could celebrate over a record budget deficit of $422 billion."
Budget analysts said the report should not be seen as good news to either side inasmuch as neither has a detailed plan to tackle the deficit.
"It's another one of those unwelcome reminders to the candidates that they've got some serious problems that they don't want to face," said Robert Bixby, executive director of the Concord Coalition, a budget watchdog group.
Bush has pledged to halve the deficit over the next five years. But absent sharp policy shifts, the CBO does not expect the president to meet that goal. The CBO estimated the annual deficit for 2009 to be $312 billion, short of the president's target. Compared with the size of the economy, the deficit in five years would fall to 2.1 percent of gross domestic product from its current 3.6 percent, a substantial improvement but not half of the 2004 level.
Chad Kolton, a spokesman for the White House Office of Management and Budget, said the CBO figures are deceptive because they include far too much money for continued fighting in Iraq and Afghanistan.
The CBO assumed both conflicts will continue for the next 10 years, at a cost of $1.1 trillion.
"The bottom line is, the president is committed to cutting the deficit in half in five years," he said.
The CBO report drew the policy choices facing the nation in sharp relief. The $2.3 trillion in projected deficits over the next decade assumes that all of Bush's 2001 tax cuts expire as scheduled in 2011 and rates rise to the levels that existed before. If the president and congressional Republicans are successful in extending the tax cuts, deficits would surge to $3.6 trillion through 2014, the CBO report said. In 2014 alone, a relatively modest annual deficit of $65 billion would leap to $440 billion if all the tax cuts are kept.
The alternative minimum tax, which was created to ensure the wealthy pay income taxes but which will increasingly ensnare the middle class, presents another fiscal strain. Reforming the law to exclude more middle-class taxpayers -- which both parties say is a priority -- would cost the government at least an additional $425 billion over the next 10 years, and possibly as much as $602 billion, the CBO said.
By then, the cost of the retiring baby-boom generation will have hit the government hard. Social Security and Medicare, currently $789 billion, or 34 percent of federal spending, will swell to $1.5 trillion, or 42 percent of the budget.
Neither Bush nor Kerry has detailed how he would tackle the deficit. Both candidates have made campaign pledges that probably would worsen the government's fiscal position, although the candidates have been careful to avoid a detailed accounting.
In Bush's acceptance speech in Madison Square Garden on Thursday night, he reiterated a call to allow younger workers to invest some of their Social Security payroll taxes in stocks and bonds through personal investment accounts. Because virtually all Social Security taxes are used to pay the benefits of current retirees, any diversion of those taxes would have to be made up through more government borrowing. Even a small diversion of, say, 2 percent of payroll taxes, could cost the government as much as $2 trillion in the first 10 years, according to the Social Security Administration's actuary.
Bush has also called for new Lifetime Savings Accounts, which would effectively end the taxation of capital gains, dividends and interest for all but the richest Americans. Individuals could shield from taxation the investment gains of as much as $7,500 of savings a year, and those savings could be withdrawn at any time for any reason. The cost of the proposal would be minimal in the first decade but could swell to $50 billion a year in later decades, according to the Congressional Research Service.
Kerry has pledged to roll back some of the tax cuts passed in 2001 and 2003, including income tax, capital gains and dividend cuts that have benefited households with incomes of more than $200,000. But the savings from those tax increases would be consumed by a $653 billion expansion of health care coverage, a $200 billion education program and other promises.
"Neither one of them is focused on deficit reduction, and neither one of them is focused on hard choices," Bixby said. "And the message of today's report is that tough choices are needed."
Staff writer Mike Allen contributed to this report.
? 2004 The Washington Post Company


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The Market State President
By Gregory Scoblete Published 09/08/2004
TCS
http://www.techcentralstation.com/090804C.html
One of the most intriguing aspects of President Bush's convention acceptance speech last week was his rhetorical embrace of the Market State, a concept fleshed out by Phillip Bobbitt, a former director of intelligence in the National Security Administration under President Clinton, in his opus The Shield of Achilles: War, Peace and the Course of History.
Through the course of 800-plus pages, Bobbitt sketches out the history of state evolution -- from Princely States to the Nation State -- arguing that both external threats and the domestic quest for legitimacy shape the relationship between government and the governed. He argues that with the passing of the Long War (defined as the period beginning with World War I and ending with the dissolution of the Soviet Union) we are now in a transitional period from the Nation States that dominated the 20th century to the Market State that looks to define the 21st.
The Nation State was defined and legitimated, in part, by its ability to ensure the material well being of its citizens. In contrast, the Market State earns its legitimacy by providing the opportunity to its citizens to advance their own well being. The Nation State is characterized by top-down, government centric solutions like the welfare state, that make absolute guarantees about the material outcome of its charges. The Market State simply says: we'll guarantee a set of basic tools and an open playing field, but after that, you're on your own to make of it what you will.
Bush embraced this transition to the Market State. In his domestic proposals, Bush explicitly acknowledged that the Nation State welfare-model needed to give ground:
The times in which we work and live are changing dramatically. The workers of our parents' generation typically had one job, one skill, one career, often with one company that provided health care and a pension. And most of those workers were men.
Today, workers change jobs, even careers, many times during their lives, and, in one of the most dramatic shifts our society has seen, two-thirds of all moms also work outside the home.
This changed world can be a time of great opportunity for all Americans to earn a better living, support your family and have a rewarding career.
Bush's domestic agenda, allowing younger workers to direct the investment (of their own money) in Social Security, of portable pensions to follow a mobile work force, and reforming a cumbersome tax code, is specifically aimed at devolving responsibility for individual welfare from the State to the individual. He touts it as an "ownership society" but it could just as easily be called an "opportunity society" - under Bush's vision, the government promises that all citizens will have the opportunity to advance themselves, regardless of station. That is a distinctly different promise than the traditional Nation State compact that guarantees your welfare by redirecting wealth from one population segment to another.
Even the President's proposed spending initiatives -- increased money to education, to child heath care, and to junior colleges - had one consistent, Market State theme: the State is responsible for laying the foundation for your well-being but ultimate success is up to you.
The unspoken corollary -- intolerable to Democrats -- is that if you fail, the State will have a very limited capacity to help you. Indeed, critics of Bush will decry this as a move designed to ultimately gut the welfare state. And they will be correct -- it is. And it is vital.
Why A Market State?
The answer, Bobbitt says, is simple: the threats we now face demand it. The government simply cannot fulfill its core function of protecting its citizens from modern dangers and fulfill the material promises of the Nation State. We see but a glimpse of this reality in our massive budget deficit. The necessary yet costly demands of the War on Islamic Terrorism - extended overseas troop deployments, the protection of critical homeland infrastructure and strengthening of the public health system to gird against a bio-terror attack - simply cannot coexist alongside a raft of social spending commitments. 21st century threats have collided with a 20th century government. And terrorism is just the beginning.
The globalization of the economy with its attendant global travel, the widespread adoption of advanced communication tools (the Internet, mobile phones, etc.) and the growing ubiquity of sophisticated weapons technology bring with it other threats, anticipated by Bobbitt, including global pandemics and crippling attacks on global infrastructure including cyber attacks that shut down critical banking and security systems. These new perils will require a massive, sustained, financial investment to safeguard against.
These threats are not passing dangers that will be vanquished quickly even with an enormous investment in blood and treasure such that defeated the fascist regimes of Nazi Germany and Imperial Japan - they are systemic to the world we live in and necessitate radical changes in the structure and promises of government if they are to be met successfully. A government that cannot defend against these new dangers will ultimately forsake its legitimacy.
In this sense, critics of Bush's failure to create a war-time economy of rationing or conscription are wrong: this is not a "crises" necessitating even a prolonged period of "sacrifice" and then a return to "normal." This is, as Vice President Cheney noted, the "new normal" - a reality for an indefinite period of time. Even if radical Islamism is utterly defeated and discredited, the U.S. will still be threatened by global plagues, still be vulnerable to crippling cyber-attacks, and still fall prey to small bands of highly motivated fanatics intent on using advanced weapons toward devastating ends.
The Nation State cannot simultaneously protect against these new threats while offering cradle-to-grave assurances of material well-being. For the fiscal solvency of our nation, one or the other has to give. And since the State's core, irreducible function is the physical security of its citizens from external harm (as opposed to their material security), the responsibility for the later must be shifted to the citizen. The Nation State must cede ground to the Market State.
Conservatives who grumble about "big government" are therefore off the mark. The absolute size of the government - what it reaps in tax receipts - will stay constant, and probably grow (indeed, Bobbitt argues that the power and reach of the executive branch must ultimately be expanded and empowered to act with even fewer restraints if it is to ward off new dangers). It is the priorities of said government - how the money is dispersed - that have to change and radically.
The Rubber Meets the Road
When viewed in this light, Bush's domestic proposals are essentially aimed at mid-wifing the Market State into existence. Bush is proposing to steer many of the welfare state's commitments (to retirement, to health care) back to the individual, freeing the government to concentrate on safeguarding the country from a myriad of new dangers. But will increasing the government's commitments to social welfare, as Bush is practically proposing, ultimately enable the government to curtail those same commitments down the road? Once fed, will government fast or become more rapacious? Is Bush even sincere in his desire to redirect government toward the Market State model, or is it all just a Rovian ploy to buy off core voting blocs, an act of fiscal recklessness of a peace with the expansion of Medicare - an act that ignores the long-term economic impact in favor of the short term electoral gain.
Only time, and a second Bush term, will tell. What won't change is the imperative driving the need for a Market State. President Bush or President Kerry and their 2008 successors will be starring down the same abyss: the threats of the 21st century cannot be met with the government of the 20th. To meet the challenge, the President will have to ensure that each citizen has the opportunity to achieve material prosperity and the financial means to safeguard their wealth, health and retirement, while the government directs its energies to warding off the dangers of a new world.
One thing is certain: it will take an act of supreme political cunning to deftly cut-loose the ballooning baby-boom generation from the money it has and continues to promise itself. Is Bush that cunning?
He's been misunderestimated before.
Gregory Scoblete is a senior editor at TWICE Magazine (This Week in Consumer Electronics) and a contributing writer to Digital Photographer and Camcorder & Computer Video magazines. He is the author of the forthcoming e-book Ten Quick Steps Guide to Great Digital Photography. He writes regularly about technology and politics at www.gscobe.blogspot.com.



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A Cancer in the Medicare System
By Doug Bandow Published 09/07/2004
TCS
Medicare faces trillions of dollars of unfunded liabilities, but legislators are constantly tempted to increase benefits and thus spending. They should resist their inner darkness as the Bush administration attempts to create a more rational reimbursement system for cancer drugs.
Although Medicare has never covered pharmaceuticals -- the benefit package passed last year won't kick in until 2006 -- it made an exception for cancer drugs administered by oncologists. The cost was $10.5 billion in 2003.
Yet rather than pay physicians a fair fee, Congress set drug reimbursements based on the industry's official Average Wholesale Price (AWP), rather like the sticker price of new automobiles. Observes Grace-Marie Turner of the Galen Institute, doctors used the resulting "spread" between cost and reimbursement "to cover Medicare's underpayments for their practice expenses."
A 1997 study by the Office of Inspector General of the Department of Human Resources figured that Medicare was paying as much as ten times actual drug costs. Occasionally the disparity
was even greater.
The AWP for the drug vancomycin ran 76 times the price to doctors. Physicians even charged for drugs, such as Lupron, used to treat prostate cancer, which they had received as free samples from manufacturers. All told, 70 percent of oncologists's Medicare revenue came from drug mark-ups.
The system unfairly penalized beneficiaries, responsible for a 20 percent copayment, as well as Uncle Sam. The system also biased treatment decisions, since price spreads varied by drug. Sometimes older, less effective medicines were more profitable than better treatments.
Medicare officials long noted the problem, but Congress, lobbied heavily by oncologists, would only make marginal cuts in pharmaceutical reimbursements.
Critics often blamed the drug companies -- state attorneys general and left-wing activists even sued some drugmakers on a variety of charges -- but the industry gained nothing from the scheme. The fault belonged to Congress.
Last year's Medicare bill amended Part B to bring reimbursements into line with costs. Medicare is supposed to use the Average Sales Price, what drugs actually sell for, including discounts and rebates. Medicare recently issued rules expected to save the government about $530 million and beneficiaries roughly $270 million.
In return, Congress doubled the average payment for administering drugs. There's also a transition bonus for 2004. The Centers for Medicare and Medicaid Services (CMS) acknowledges that overall cancer payments will fall, but indicates that it will consider future adjustments.
Few physicians defend the old system. Dr. David Johnson, head of the American Society of Clinical Oncology, says "We would agree with a premise that the way the system has operated for some years has been out of balance."
However, many oncologists nevertheless denounce the reform scheme as providing inadequate returns. Some are threatening to stop providing drugs in their offices, which would force patients to turn to hospitals. They are lobbying Congress to freeze payments.
Fixing reimbursement rates obviously isn't easy. As Grace-Marie Turner points out, "the overall problem of government setting prices -- and trying to get them right -- is endemic to a benefit-based entitlement program." Medicare has long created incentives towards overuse as a fee-for-service reimbursement system while generating the inefficiencies that naturally occur with price controls.
Getting it right, however, is critical. Frank Lichtenberg of Columbia University figures that more than half the increase in cancer survival rates over the last quarter century is due to new and improved drugs. Maintaining that progress is critical.
Thus, Congress shouldn't retreat from its reliance on sales rather than list prices. The old system never made sense. Uncle Sam should drive a stake through the heart of the beast.
At the same time, where necessary CMS should increase oncological reimbursements for administering drugs. The federal government needs to come as close as it can to a quasi-market price in a non-market environment.
In the longer-term, Congress should revamp Medicare to make it more friendly to both patients and physicians, while creating incentives for cost-saving. That means integrating the new drug benefit into Medicare's overall structure,
Moreover, Congress should transform the program from a system of defined-benefits -- for which it must set specific reimbursement rates -- to one in which a defined contribution is made to retirees for use to buy the health care plan which best meets their needs. This would get the government out of price-setting entirely.
Unfortunately, legislators have routinely proved to be irresponsible when they touch Medicare. With the budget wildly out of balance and taxpayers facing huge liabilities as the Baby Boom generation starts collecting Medicare and Social Security, Congress must learn to say "no." It should start when responding to oncologists who hope to return to last year's broken system for reimbursing cancer drugs.
Doug Bandow is a Senior Fellow at the Cato Institute.
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Is This Any Way to Grow an Economy?
By Christopher Lingle Published 09/03/2004
TCS
In a fruitless and pointless exercise, economic policy makers and businesses fret endlessly over the international value of currencies. This is because interventions to guide foreign exchange valuations tend to be costly and may have only temporary effect, at best.
The dollar's value measured by a trade-weighted index against a basket of currencies has been in decline for more than a year. Some economists, businessmen and politicians in America believe that a weaker dollar will be "good" for the US economy.
They apparently believe that a depreciating dollar will boost exports of US manufacturing production while increasing employment and creating economic growth. Meanwhile, central bankers and finance ministers in Japan and China have been accused of playing games to block the appreciation of their currencies from appreciating against the US dollar.
It turns out that the arguments used in these harangues reflect political expediencies rather than sound economic logic. The most obvious evidence of this is that the balance of trade is not the best measure of the overall welfare of a country.
Part of the problems comes from the dubious claims that a depreciating currency can increase the competitiveness of domestic producers. In fact, currency depreciation should never be a policy objective since it leads to economic immiseration.
It is chimerical to think when citizens of a country receive fewer real imports for a given amount of real exports is an improvement in competitiveness. The country with a depreciating currency may receive additional units of foreign currencies, but it will possess less real wealth in the form of goods and services.
In the adjustment to the declining foreign value of a currency, exports tend to rise while imports tend to fall. This means that consumption must decline for citizens of the country with the depreciating currency since they receive less for is sold to foreigners and more is paid for what is bought from foreigners. By any measure, this is a decline in overall living standards.
In all events, the supposed advantages created by depreciating currencies upon export sales or increased tourism are temporary. This is because domestic prices and wage rates eventually rise due to the new foreign exchange values. Obviously, a persistent rise in prices harms consumers while undermining long-term business investment, rising wages may also contribute to higher unemployment.
It turns out that most adherents of a weak dollar believe that economic growth depends upon aggregate demand for goods and services, both from both domestic and foreign sources. According to this logic, increases in demand for goods and services can push up economic growth rates by triggering the production of goods and services. The implication is that policies that focus upon overall demand can promote economic growth.
This notion is also behind the "export-led" growth policies of many developing countries. Since exports are seen as contributing to economic growth while imports are portrayed as a drag on economic growth, they seek a weak currency so that the prices of domestic output are more attractive to foreigners.
These notions are based upon a misguided belief that increases or decreases in production can be traced to rising or falling overall demand for goods and services. The suggestion that consumption can precede production is based upon both logical impossibility and economic infeasibility.
It might be helpful to trace the impact of monetary policy on foreign exchange markets to see how a currency might depreciate. If the central bank or finance ministry wishes to push down the international value of the domestic currency, they buy foreign currencies. Increased supply of the domestic currency in money markets combined with increased demand for the foreign currency pushes down the value of the former while raising the value of the latter.
At this point, producers are better able to sell more exports. But it is important to know the source of the funds used to intervene in the foreign exchange markets. If they are drawn from existing currency supply, there would be a reduction in liquidity in the financial system. It is likely that the central bank would purchase government bonds, causing more local currency to be available.
As producers seek to respond to increase demand for exports, they find that commercial banks can offer loans at lower interest rates due to the loose monetary policy. In turn, producers find it cheaper to borrow to acquire resources for expanding their output of goods. This newly-created credit allows these producers to divert resources from other productive activities. Initially, exporters experience increased profits, until domestic prices begin to rise under pressures of the bidding war to control access to inputs.
Ultimately, loose monetary and credit policy cause the domestic prices of goods and services to rise. And then there will be a decline in profits earned from exports as well as domestic sales. And so it is that rising prices ends the illusion that prosperity can be conjured out of thin air by pumping new pieces of paper money into an economy.
A supreme irony emerges from the above logic. It turns out that monetary policy responses arising out of obsessions with international currency values increase the volatility of foreign exchange markets.
So, what we are left with is that government interventions in markets at one level create a demand the government to intervene at another level. And this cycle continues; ad infinitum and ad nauseum.
Christopher Lingle is Visiting Professor of Economics at Universidad Francisco Marroqu?n in Guatemala and Global Strategist for eConoLytics.


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>> RUSSIA
Russia Test-Fires Ballistic Missiles
The Russian nuclear submarines Yekaterinburg and Borisoglebsk yesterday conducted ballistic missile test launches, Interfax reported (see GSN, Aug. 12).
"Both launches proceeded successfully. The missiles' warheads hit their training targets at the Kura testing ground on the Kamchatka (Peninsula) at their designated time," Russian Navy spokesman Capt. Igor Dygalo said.
Navy commander Adm. Vladimir Kuroyedov observed the launches from the cruiser Pyotr Veliky, Dygalo said (Interfax, Sept. 8).



Russia and the Terror War
By Stephen Schwartz Published 09/07/2004
TCS
In the wake of the latest tragedy in Russia, it is perhaps in bad taste to cite two clich?s, but both apply stunningly to the present situation in that tormented land. The first is, "the more things change, the more they remain the same." That is certainly reconfirmed by the Putin government's "handling" -- a term that, as we shall see, may have a sinister aspect -- of the hostage horror in North Ossetia.
The second clich? is a phrase on the lips of every policy wonk in the Western world these days: "lessons learned." All and sundry claim to possess the wisdom of "lessons learned" about everything, especially about the global war on terror. But if there is a major lesson that has seemingly remained unlearned, it is that Russian political leadership is unchanging in its improvised, haphazard violence, its secrecy, and the willingness to sacrifice the blood of its subjects -- they can barely be called citizens.
In 1855 the great Russian liberal Aleksandr Herzen published a book titled From the Other Shore, in which he observed the following about his native land: "The revolution of Peter the Great replaced the obsolete squirearchy of Russia -- with a European bureaucracy; everything that could be copied from the Swedish and German laws, everything that could be taken over from the free municipalities of Holland into our half-communal, half-absolutist country, was taken over. But the unwritten, the moral check on power, the instinctive recognition of the rights of man, of the rights of thought, of truth, could not be and were not imported."
Exactly the same may be said of Russia in the aftermath of Communism's fall. Everything that could be copied from the West, from flamboyant gangsterism to sensationalist journalism to an uncontrolled sex industry, has been adopted. But the essential checks and balances on state power have not been and probably cannot be imported.
It is to further trivialize the tragedy for a moment, but whence will come Putin's Michael Moore? The slobby documentary film-maker has managed to make quite a success out of a video clip showing President George W. Bush remaining silent for seven minutes after receiving news of the terrorist assault in Manhattan three years ago. But Putin was silent for two days during the crisis in Beslan!
And now, according to The Washington Post, the Russian authorities have admitted lying to the people about the Beslan atrocity, while the same rulers seek to turn the recognition of their prevarication into a virtue. A report by Susan B. Glasser and Peter Finn in Monday's Post states blithely, "In previous crises with mass fatalities, such as the sinking of the nuclear submarine Kursk in 2000 and the 2002 siege of a Moscow theater, officials covered up key facts as well, but afterward never acknowledged doing so."
This convoluted reality is not new. Did not the Russian government of Joseph Stalin lie about the artificial famine created in Ukraine in the early 1930s, in which several million died; about the brutal purge trials, in which the leaders of the Bolshevik Revolution were portrayed as Nazi spies; about the 1939-41 pact with Hitler, in which Germany was presented as a friend of the Russian people while it prepared for genocidal war against them; about the slaying of thousands of Polish officers in the Katyn forest; about, in the end, everything?
In 1956 it was admitted that Stalin was not a good man and that the victims of the purges were innocent, and at the end of the 1980s a certain Mikhail Gorbachev, a predecessor of Putin about whom nobody speaks today, averred that Soviet socialism had in some respects failed. Those were considered milestones of truth-telling in their time, just as the vague confessions of top state officials in the aftermath of Beslan are treated as a breakthrough. No irony is, however, perceived in the historical fact that the very conflict with the Muslim Chechens, always cited as the root of these terror incidents, derives from a sequence of characteristic lies by the Russian state.
During the Second World War Stalin deported entire Muslim nations from the Caucasus -- the Chechens were only the largest group -- on the charge of collaboration with the Nazis. At least 40 percent of the Chechens died during their forced transfer to Central Asia. In the 1960s the Soviet government admitted that the charge of collaboration was a lie, and that Chechens had actually fought valiantly in the Soviet forces. They were allowed to return to their ancestral homelands. But they did not forget or forgive, and after the breakup of the Soviet Union the "Chechen question" returned again.
So at least 350 children, parents, and teachers dead in Beslan, with more than 200 unaccounted for, is, finally, business as usual for the Russian state. It would seem to be high time for the West to recognize this. Russia and Putin are no more reliable partners in the global war on terror than the kingdom of Saudi Arabia, which also engages in lying on a cosmic scale.
Of course, Putin, as a veteran of the Soviet secret police, has adopted the Stalin method for dealing with responsibility in such events. When the Soviet state proved unable to satisfy the exaggerated promises it had made to its citizens in the 1930s, under the Five Year Plans, of plentiful consumption and prosperity, first the Bolshevik old guard and then the top leaders of the military were massacred to give the people a sense that "those to blame would be dealt with." Today, Russian TV, under Putin's control, accuses "generals and the military and civilians" for the terrible outcome in North Ossetia.
Some startling details of the Beslan massacre deserve further investigation, but since Russia, like Saudi Arabia, feels no need to account for its state actions to its people or to the world, it is doubtful they will be the subject of serious inquiry.
First, many Russians, experts on Russia, residents of the borderland states in Central Asia, and experts on Islamist extremism believe there is some kind of hidden link between the terrorists involved in attacks on schools and other such targets, and the Russian secret police. The logic is simple: Russian leaders always need an enemy, preferably one both inside and outside the country, to unite their discontented masses behind them. In the past the enemy was the Catholic Church, then the Jews. But stoking hatred of Catholicism causes problems with Poles, Lithuanians, and Ukrainians, who fight with much better weapons than suicide bombs, namely, financial power and access to Western media. And incitement against the Jews brings on an instant and negative response in the U.S. and Western Europe. In this context, the Russian and Caucasian Muslims are the obvious best choice as a chosen, cultivated threat with which to terrify the ordinary populace. Putin needs the terrorists as much as they need him; they are engaged in a dance of death, where each justifies the actions of the other.
Second, while news reports alleged that the terrorist attackers were not Arabs, as claimed (in a rare moment of probable accuracy) by the Russian authorities, surviving hostages described them as Wahhabis, adherents of the state cult in Saudi Arabia that stands behind al-Qaida, and identifiable by their distinctive beards and prayer caps. Since 1999, Saudi infiltrators have striven to take over and manipulate the Chechen national movement, pushing aside moderate Chechen leaders who seek peace.
Indeed, in a very strange item also appearing in The Washington Post, the terrorist assault squad leader was addressed as "colonel" and described as communicating by telephone throughout the siege. "Colonel" of what? Islamist terrorist movements do not use Western-style military ranks.
I predict that independent Russian opinion, which will be heard despite the control of media by Putin's government, will soon ask whether this was not yet another provocation by the secret police, intended to boost support for Putin and utilizing Wahhabis ready, in any event, to die -- but which went horribly wrong.
To Westerners, such an idea smacks of the most complex and unlikely conspiracy theories. But to Russians, and those who know Russia, it would come as no surprise. Putin has a great deal to answer for, but it is unlikely he will have to do so, any more than any of his predecessors in power had to. And, barely mentioned in this landscape of evil, Saudi Arabia and its Wahhabi cult also bear significant guilt.
In 1991, I wrote in the post-Soviet journal Arguments and Facts International, "The picture of Russia's future... increasingly resembles an 'India of the North:' a country that may achieve a partial or superficial democratization, but which is simply too handicapped by cultural factors to attain the stability and prosperity for which it hopes." After the passage of 13 years I would change nothing in these words.

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>> OSCE

This Is Security and Cooperation?
How the Organization for Security and Cooperation in Europe treated elections in the Balkans.
by Stephen Schwartz
09/08/2004 12:00:00 AM
Sarajevo
AT A TIME when the Organization for Security and Cooperation in Europe is preparing to send observers to monitor the U.S. elections in November, it is especially depressing to contemplate the OSCE's record in the Balkans. In both Bosnia-Hercegovina and Kosovo, the organization is a pillar of regimes run by the international community that have kept power in the hands of foreigners rather than preparing the way for any transition to local self-government. In both places, elections have been turned into ludicrous spectacles of political correctness and censorship.
In Bosnia, for example, the OSCE--a kind of mini-United Nations with 55 members, mostly from North America, Europe, and the former Soviet Union--has seen fit to require that 30 percent of candidates for public office be women. Unsurprisingly in a traditional East European society with a large Muslim population, this quota did not encourage people to vote for women candidates, appreciated though it was by foreign experts. In an even worse instance of mischief, the OSCE intervened in the 2000 Bosnian elections with a propaganda campaign urging voters to replace the ruling moderate Islamic party in Sarajevo with the former Communist party. The slogan that appeared all over Sarajevo was "Vote for Change." Sarajevans asked themselves, Why are these foreigners telling us how to vote?
No plan whatever exists for the transfer of political sovereignty to Bosnians themselves. Almost a decade after the Dayton Accords that created the international administration, Bosnia is still divided between a Croat-Muslim zone and the so-called "Republic of Serbs." Bosnian Muslims, who made up some 45 percent of the country's population before the onset of aggression by Slobodan Milosevic in 1992, today control only 28 percent of Bosnian territory. Thus, the OSCE in effect rewarded Milosevic and his minions through "facts on the ground," even as Milosevic himself sits on trial in The Hague.
In addition, the OSCE stands as a barrier against privatization and investment in Bosnia. Lacking economic opportunity, young Bosnian Muslims increasingly heed the call of Wahhabism, the extremist state cult in Saudi Arabia that continues to deluge Bosnia with missionaries and mosques. In the streets of Sarajevo one may purchase propaganda promoting Islamist suicide terrorism, although no such thing occurred during the Balkan war and is unlikely to occur there today.
But the area where OSCE policies have been worst is the media. In Bosnia-Hercegovina, OSCE censors, under the pretext of barring "hate speech," have made it impossible for Muslims, Serbs, and Croats to freely discuss their differences and grievances in a way that would make possible a reconciliation between them. Discussion of "genocide" is essentially banned; independent TV stations are discouraged. Instead, the OSCE plasters the walls of Bosnian cities with posters offering abstract appeals to friendship and cooperation.
In Kosovo, under international administration since 1999, the OSCE has been even more heavy handed in its licensing of broadcasters and monitoring of content. This has provoked great anger among local journalists. Much more than in Bosnia, "international community" rule in Kosovo has left the province, whose population is enterprising and hard-working, plagued by unemployment and other social problems, leading to strikes and assorted protests.
In March, Kosovar resentment boiled over into an insurrection in which some 30 people were killed. Violence was touched off by a report that three Albanian children had drowned after they were pursued into a rushing river by Serbs in the city of Mitrovica, in northern Kosovo, which is divided between the two ethnicities.
In April, the OSCE issued a report that blamed the March events on Kosovar journalists, who it claimed had sensationalized their reports. The Brussels-based International Federation of Journalists (IFJ) responded with a condemnation of the OSCE, stating that the report had failed "to establish any evidence of systematic attempts to distort the news coverage and incite violence." The IFJ accused the OSCE of laying responsibility on journalists for violence that had "its roots elsewhere"--truth to tell, in the incompetence of foreign rulers in the Balkans, in which OSCE is a prime culprit.
Perhaps when they come to the United States this fall, the election observers from the OSCE--an organization whose members include such models of representative government as Belarus, Turkmenistan, Moldova, and Ukraine--can learn a bit about how real democracies work and start to think about applying it in the Balkans.
Stephen Schwartz is the author of The Two Faces of Islam.
? Copyright 2004, News Corporation, Weekly Standard, All Rights Reserved.

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>> NUCLEAR

U.S. envoy Bolton to stop here on way to nuclear talks
By Aluf Benn
A senior U.S official will visit Israel for consultations prior to the International Atomic Energy Agency's board of governors meeting next week to discuss Iran's nuclear program. U.S. Undersecretary of State for Arms Control and International Security John Bolton will come to Jerusalem Sunday on his way to the IAEA meeting in Vienna. Bolton is scheduled to meet with Foreign Minister Silvan Shalom and senior Israeli officials, as part of efforts to transfer the "Iran case" to the United Nations Security Council.
Political sources in Jerusalem do not expect results from the upcoming board of governors meeting, and the diplomatic battle will likely be postponed until the board's November meeting. Iran hopes the suspicions against it will be removed from the IAEA agenda, and it will be able to continue with its uranium enrichment program.
The U.S. seeks to have Iran declared in violation of its international nuclear commitments, mandating transfer of the matter to the Security Council. The UK, Germany and France have made no progress in efforts to reach a compromise with Iran, but still prefer negotiations with Tehran.
Prior to the board of governors meeting, both sides are shoring up their positions with widespread diplomatic activity. IAEA Director-General Mohammed ElBaradei's last report on the Iranian program was lukewarm and generous to the Iranians, in Israel's opinion.
There is a dispute in the U.S. administration regarding the proper policy toward Iran. Bolton, a key hawk in the Bush administration, believes that diplomacy won't work with Tehran. Another approach calls for talks with Iran, in an attempt to dampen its ambitions to acquire nuclear arms.

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Nuclear Weapons Charges Against South African Man Dropped
By Craig Timberg
Washington Post Foreign Service
Wednesday, September 8, 2004; 2:54 PM
JOHANNESBURG, Sept. 8 -- South African authorities on Wednesday abruptly dropped criminal charges against a Pretoria man charged last week with possessing components for the construction of nuclear weapons.
Today's move was part of a deal in which the man, Johan Andries Muller Meyer, 53, will cooperate with prosecutors to pursue other targets of the investigation, said a source familiar with the probe who spoke on the condition of anonymity.
Police arrested Meyer Thursday in Vanderbiljpark, an industrial town south of here where Meyer is a director of Tradefin Engineering. He was charged with violating South Africa's strict laws against nuclear proliferation.
Eleven shipping containers of components for a gas centrifuge, used in the enrichment of uranium, were confiscated, as was related documentation and a machine that can be used to make other weapons components, officials here say.
The arrest was part of a wide-ranging international investigation into the nuclear black market that was established by Pakistan's top nuclear scientist, Abdul Qadeer Khan, and that helped Libya and other countries develop nuclear weapons programs.
Authorities were cautious in their public statements today. Sipho Ngwema, spokesman for the F.B.I.-style Scorpions, said only, "Charges have been dropped."
He declined to comment on whether Meyer remained under suspicion for wrongdoing. Meyer's defense attorney also has declined comment, according to wire service reports.
? 2004 The Washington Post Company
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North Korea Warns of 'Nuclear Arms Race'

By Sang-Hun Choe
Associated Press Writer
Wednesday, September 8, 2004; 4:27 PM
SEOUL, South Korea -- North Korea accused the United States of applying a double standard on the Korean Peninsula and warned Wednesday of a nuclear arms race in Northeast Asia following the revelation that South Korean scientists enriched a tiny amount of uranium in 2000.
The controversy over the South Korean experiment threatened to further disrupt troubled efforts to persuade North Korea to dismantle its suspected nuclear weapons programs.
North Korea's envoy to the United Nations, Han Sung Ryol, told South Korea's national news agency Yonhap that the communist state found the United States "worthless" as a dialogue partner because it was applying "double standards" to the two Koreas.
Han called South Korea's uranium enrichment experiment "a dangerous move that would accelerate a nuclear arms race in Northeast Asia," Yonhap said.
"We see South Korea's uranium enrichment experiment in the context of an arms race in Northeast Asia," Han was quoted as saying. "Because of the South Korean experiment, it has become difficult to control the acceleration of a nuclear arms race."
Han's comments were North Korea's first reaction to the South Korean admission this week that its scientists produced a small amount of enriched uranium in an experiment in 2000.
The reaction signaled that North Korea could use the South Korean experiment as leverage in any further talks on U.S.-led efforts to persuade North Korea to give up its nuclear development.
Earlier Wednesday, South Korea said it should have reported the uranium enrichment experiment to the U.N. nuclear watchdog agency.
South Korea admitted last week that its scientists produced 0.2 grams of enriched uranium during the experiment at its main government-affiliated nuclear research institute.
"We should have reported that uranium was used during this experiment," a senior official at the South Korean Foreign Ministry said on condition of anonymity. He spoke to reporters at a briefing.
South Korea has denied the experiment reflected an interest in developing nuclear weapons.
State Department spokesman Richard Boucher has criticized the secret experiment, saying it shouldn't have occurred. But he praised South Korea for working with the International Atomic Energy Agency to make sure the program has ended.
"We have confidence that the agency will pursue all these matters," Boucher said Wednesday.
Asked whether South Korea had experimented with plutonium, Boucher withheld comment, noting the United States is aware of what Seoul has reported to the IAEA about its past activities.
In the early 1970s, South Korea was developing a nuclear weapons program, but abandoned it under U.S. pressure and signed the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in April 1975 before producing any fissile material required to make a bomb. A senior Bush administration official said Wednesday that those secret experiments involved plutonium.
The IAEA has asked "plutonium-related" questions during the course of routine investigations over the years, but the plutonium issue was not mentioned in the recent IAEA report on the uranium enrichment case, the South Korean Foreign Ministry official said.
"Regarding plutonium, there is nothing that could be interpreted as a violation of NPT like the current uranium enrichment case," the official said. He declined to comment in detail.
Han, the North Korean diplomat, complained the Bush administration was being unfair.
"The United States is applying double standards," Hans was quoted as saying. "While saying it trusts South Korea, it is trying to force North Korea to accept nuclear inspections, concocting a story about a HEU (highly enriched uranium) program we don't even have."
The latest South Korean experiment took place two years before a nuclear crisis erupted on the divided Korean Peninsula, when the United States accused North Korea of running a secret uranium enrichment program.
North Korea denied the charge but withdrew from the Nuclear Nonproliferation Treaty in early 2003. It has also restarted plutonium facilities that were mothballed under a 1994 accord with Washington.
The impoverished North said its nuclear development was for peaceful purposes. But it also says it is increasing its "nuclear deterrent" against a U.S. plan to invade, and that it will abandon its atomic development only if Washington provides nonaggression guarantees and energy and economic aid.
Washington wants North Korea to allow immediate nuclear inspections and dismantle all nuclear facilities.
Accusing the United States of breaking an earlier promise to provide economic aid in return for nuclear inspections, Han called Washington "worthless" as a dialogue partner.
The United States, Russia, Japan, China and the two Koreas have held talks on North Korea's suspected nuclear weapons development, and they agreed to hold another round of negotiations in Beijing this month. However, no date has been set.
The South Korean Foreign Ministry official said the Vienna-based IAEA will decide next week whether the South Korean experiment was a violation of international nuclear safeguard agreements.
The official insisted the experiment itself was not, but said South Korea should have reported enriched uranium had been produced.
The Ministry of Science and Technology said it learned about the experiment in June, when the government made a report to the nuclear agency after signing an additional safeguards agreement earlier in the year.
On Thursday, a South Korean delegation will depart for the IAEA's headquarters to explain the experiment and pledge transparency in its nuclear operations.
South Korea says the enriched uranium produced during the experiment was far below the amount needed for a bomb. Besides, it was enriched to only 10 percent, much lower than the 90 percent enrichment needed for bomb-making, it says.
? 2004 The Associated Press

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North Korea Nuclear Plant Suspended Again-Report
Reuters
Monday, September 6, 2004; 12:38 AM
TOKYO (Reuters) - The United States, South Korea and Japan have agreed to suspend work on the construction of nuclear reactors in North Korea for a second year but stopped short of scrapping the project, a Japanese newspaper said on Monday.
The decision, which the Yomiuri Shimbun daily said was likely to be formalized at a meeting of the Korean Peninsula Energy Development Organization (KEDO) in New York on Oct. 13, comes as Washington and its allies try to get Pyongyang to hold another round of talks this month on its nuclear arms programs.
The three countries, along with the European Union, formed the power consortium KEDO as a reward for North Korea's pledge in 1994 to freeze its nuclear development programs. The United States had agreed to provide fuel oil as part of the deal.
Quoting unidentified Japanese government sources, the Yomiuri said the United States had wanted to scrap the project entirely, but gave in to persuasion from South Korea and Japan to leave room to resume construction.
South Korea and Japan have covered 90 percent of the $1.5 billion construction costs so far.
More than 100 workers are still maintaining the site of the two partially built reactors.
KEDO suspended construction work on the light-water reactors for an initial one year last December, after the United States said in October 2002 that North Korea had admitted working on a secret uranium-enrichment project.
An attempt by North Korea to have the project restarted was rejected by KEDO's board in May.
Six-way talks between North and South Korea, the United States, Japan, China and Russia aimed at solving the nuclear stand-off have so far failed to make significant progress.
Washington has called for Pyongyang to abandon its nuclear program in a complete, verifiable and irreversible manner.
? 2004 Reuters

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Official: S. Korea Test Used Plutonium
By BARRY SCHWEID AP Diplomatic Writer
WASHINGTON (AP) - South Korea more than 20 years ago secretly conducted an experiment with traces of plutonium, a key ingredient in making nuclear weapons, a senior Bush administration official disclosed Wednesday.
The revelation follows disclosure last week that the U.S. ally had conducted four secret uranium-enrichment experiments four years ago.
North Korea responded on Wednesday to the uranium-enrichment experiments by warning of a "nuclear arms race" in Northeast Asia.
The United States, with the support of South Korea, Japan, China and Russia, has been trying to negotiate an end to North Korea's nuclear weapons program. The talks are due to resume at the end of the month, but no date has been announced.
Plutonium and enriched-uranium are the two key ingredients of nuclear weapons.
South Korea is discussing its actions with the U.N. International Atomic Energy Agency in Vienna, said the senior official, who spoke on condition of anonymity.
The administration is aware generally of the content of South Korea's reporting to the IAEA on nuclear experimental activity conducted in past years, another U.S. official said. The administration is confident the agency will thoroughly pursue any inconsistencies or questions, said the official, speaking on condition of anonymity.
Meanwhile, North Korea's envoy to the United Nations, Han Sung Ryol, told the South Korean national news agency Yonhap that it found the United States "worthless" as a dialogue partner because it applied double standards to the two Koreas. This could be a tip-off that North Korea will resist or delay efforts to halt its weapons program.
The State Department last week criticized South Korea for its secret work on uranium-enrichment while praising South Korea for working with the IAEA to make sure the program had ended.
The uranium and plutonium disclosures came amid a strenuous effort by the Bush administration to stop Iran from beginning a uranium-enrichment program that U.S. officials say could produce four nuclear weapons.
"We are in touch with the South Korean government," State Department spokesman Richard Boucher said Wednesday when asked whether South Korea had experimented with plutonium.
"We are also aware generally of what the South Koreans reported to the International Atomic Energy Agency on nuclear experiments conducted in past years," he said.
"We have confidence that the agency will pursue all these matters," said Boucher, adding that he would withhold comment "as far as other possibilities" apart from the uranium-enrichment experiments.
South Korea is in the process of verifying to the U.N. agency that its uranium-enrichment activity "has been eliminated and will not be repeated," Boucher said last week.
"But what they had done in the past was activity that should not have occurred," he said. "It's activity that must be eliminated, and we are glad that South Korea is working in a transparent manner to do that."
The spokesman said the scale of South Korea's enrichment work was much smaller than that of North Korea and Iran. And he called on North Korea to disclose its activity to the U.N. agency.
Daryl G. Kimball, executive director of the Arms Control Association, said even after South Korea ratified the Nuclear Non-Proliferation treaty in 1975, pledging not to try to develop nuclear weapons, Seoul was suspected of trying to keep nuclear options open.
It had a nuclear weapons research program in the early 1970s but the conventional wisdom was that South Korea did not acquire technology for enriched uranium or plutonium, Kimball said.
The disclosure Wednesday indicates efforts to close down the program were not completely successful, the head of the private research group said in a telephone interview.
"The devil is in the detail here, but in terms of newness I think that this probably is a surprise but it is not particularly shocking, either," he said.
Still, Kimball contrasted what South Korea had done as not an immediate problem compared to North Korea's current, active pursuit of nuclear weapons.
2004-09-08 21:03:27 GMT
Copyright 2004
The Associated Press All Rights Reserved

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>> MILITARY

A Deepening Debate on Soldiers and Their Insurers
By DIANA B. HENRIQUES
In May 2002, a young, unmarried soldier named Michael R. Deuel, serving with the 82nd Airborne division at Fort Bragg, N.C., signed up to pay nearly $120 a month for life insurance that supplemented the much less expensive coverage he had through the military.
But before he shipped out for Iraq, Private Deuel called to cancel some of his coverage because an officer on base "told him he did not need it," according to an insurance agent who served the base. A year later, in June 2003, the 21-year-old soldier was shot and killed while guarding a propane distribution center in Baghdad.
The case of Private Deuel is one of five incidents that some life insurers and their agents have offered as proof that improper meddling by senior officers is preventing young soldiers from getting supplemental insurance coverage before they head for dangerous duty abroad. By their account, thousands of other people in the military - one insurance marketing executive puts the number as high as 6,000 - have had similar experiences and are at risk of sharing Private Deuel's fate. The complaints have led to an investigation by the Government Accountability Office.
But an examination of the five cases in which young soldiers said they were dropping their insurance on an officer's advice and were later killed on duty shows that the issue is not so simple. The insurance being sold to the soldiers included policies that provided little additional coverage at high prices.
Four of the cases illustrate a little-noticed sales technique used by many insurance agents - selling military people an expensive policy in tandem with a low-cost policy. Agents who complain that soldiers have been wrongly advised to cancel policies do not distinguish between the two types of insurance. In fact, Private Deuel canceled only a policy that would have cost him $100 a month for a death benefit of $32,500, while keeping a $250,000 policy that cost him $18.75 a month.
Financial experts say that in most cases young Iraq-bound soldiers would be well advised to avoid the more costly policies, which include a savings plan as well as a death benefit, and stay with the less expensive ones, especially if they have young families.
But the insurance industry says soldiers, not their officers, should have the final say. Officers who advise troops to cancel their supplemental insurance "are hypocritical 'insurance gods' who advise lower and younger service people, who statistically are the ones losing their lives in war and are in harm's way, not to buy additional life insurance," said Richard L. Worsham of Hopkinsville, Ky., a marketing director who oversees more than 150 insurance agents serving military bases in eight Southern states and who lobbied for the G.A.O. investigation.
Mr. Worsham defended the more expensive products his agents sell as a useful retirement savings tool.
The American Council of Life Insurers, the industry's trade group, has encouraged any member companies with similar complaints about officer interference to notify the G.A.O., a spokesman said yesterday. And the issue may be raised in questioning tomorrow at a House subcommittee hearing examining whether young recruits are being exposed to high-pressure or misleading sales pitches, he said.
All service members can buy up to $250,000 in low-cost life insurance through the military, and 96 percent of them buy the maximum coverage, currently $16.25 a month. Some soldiers - those with young families or siblings, for instance - may want additional coverage, especially if they expect to serve in dangerous places.
But among the five soldiers cited by Mr. Worsham as having bought and then dropped their supplemental insurance, four of them - including Private Deuel - had actually applied for two different types of insurance, sold by the same agents at the same time, according to the application forms and other documentation provided by Mr. Worsham.
One was a simple, low-cost insurance policy offered through the Military Benefit Association, a nonprofit organization in Chantilly, Va. That policy, which pays a very low commission to the agents who sell it, gave Private Deuel $250,000 in supplemental coverage for $18.75 a month, $2.50 more than the premiums on the same coverage under his military plan. Financial planners and insurance experts say this form of coverage, called term insurance, is a good bargain for young soldiers of limited means who are seeking more coverage than they can buy through the military.
The other policy for which Private Deuel signed up was a Flexible Dollar Builder policy from the Trans World Assurance Company in San Mateo, Calif. This complex product, a form of "cash value" insurance, combines a small, expensive death benefit with an "accumulation fund" feature that allows policyholders to build interest-earning savings over time. That second policy would have cost Private Deuel $100 a month for a death benefit of $32,500.
This policy pays a large front-end commission to the selling agent. But its financial benefits to the policyholder accrue more slowly. Indeed, in most cases, the surrender value is less than the total amount paid for the product for at least a decade, even if the policyholder never has to tap into the "savings fund" for financial emergencies. Insurance experts say any cash value policy would be a poor choice for soldiers trying to maximize the amount their families would receive in the event of their deaths.
"It might very well be good advice to let the low-benefit, high-premium so-called savings program go and stay with the lower-price term insurance," said Joseph M. Belth, emeritus professor of insurance at Indiana University and editor of The Insurance Forum, an independent periodical.
In fact, Private Deuel did keep the $250,000 Military Benefit Association policy he had purchased, according to the agents who sold it to him, and canceled the more expensive Trans World policy, a choice that most financial experts would have endorsed.
Mr. Worsham also cited the case of Pvt. Marlin T. Rockhold, 23, killed by a sniper in Baghdad in May 2003, leaving a wife and her 9-year-old daughter at Fort Stewart, in Hinesville, Ga. At his death, the young private had $250,000 in military insurance, shared equally by his wife and his mother.
But eight months earlier, he had applied to buy $272,000 in additional insurance from one of Mr. Worsham's agents in Hinesville. According to the local agent, Private Rockhold canceled his application three days later, saying a noncommissioned officer at the base had told him he did not need additional insurance.
Like Private Deuel, Private Rockhold had signed up for the two types of insurance - but unlike Private Deuel, he had canceled both policies, even the low-cost one through the Military Benefit Association that would have given him $250,000 in supplemental coverage for $18.75 a month, with the entire amount going to his widow.
The other policy he canceled was a Flexible Dollar Builder from the American Fidelity Life Insurance Company in Pensacola, Fla., a sister company to Trans World. That policy would have cost Private Rockhold $60 a month for a death benefit of $22,000. Under the terms of the policy, he would not have accumulated any savings in the first year to supplement the stated death benefit, according to the documentation supplied by Mr. Worsham.
Two other soldiers on Mr. Worsham's list had also applied for both types of insurance, sold in tandem, and had also subsequently canceled both policies.
One, Pvt. Kevin C. Ott, who died in Iraq last June, had applied for just $50,000 of term insurance from the Military Benefit Association at a cost of $3.75 a month. He had also signed up for $25,000 of Flexible Dollar Builder insurance from American Fidelity for $100 a month, but had arranged to contribute an additional amount each month to the policy's accumulation fund, for a total monthly deduction of more than $158 for the second policy. Thus, he would have spent almost $162 a month for death benefits of $75,000, plus the money he paid into the second policy's savings fund before his death.
The other soldier, Pvt. Joseph Favorito 3rd, who died in a training accident in Louisiana in late 2002, had also signed up for $50,000 in low-cost Military Benefit Association coverage for $3.75 a month. His American Fidelity policy would have given him $26,000 in additional coverage, but would have cost $60 a month, none of which would have been paid into his accumulation fund in the first year.
The fifth soldier cited by Mr. Worsham was Sgt. Troy D. Jenkins of the Army, who was mortally wounded in April 2003 when he threw himself on an unexploded cluster bomb that had been brought to a group of soldiers by an Iraqi child. Sergeant Jenkins left a wife and two young children, according to military news releases.
The insurance agency that dealt with Sergeant Jenkins at Fort Campbell, Ky., sells both the low-cost Military Benefit Association term insurance, which would have provided up to $250,000 in additional benefits for his young family, and the Flexible Dollar Builder product. But according to the documents provided by Mr. Worsham, Sergeant Jenkins had applied in October 2002 for only the more expensive policy from American Fidelity, which provided $27,500 in coverage for $100 a month - and listed a friend as the primary beneficiary.
Sergeant Jenkins later canceled that policy, saying he was acting on the advice of his "chain of command," according to a letter from the local agent.
The complexities in the five cases illustrate the challenges that confront the G.A.O. study team. Mr. Worsham said that he had shipped 6,000 unconsummated insurance applications to the G.A.O. for its review, and he estimated that half of them were applications that soldiers filled out but subsequently withdrew, saying they were acting on the advice of senior officers. The other half, he said, were applications for policies that had not gone into effect because military finance offices had not processed the paperwork that would allow the soldiers to have their premiums automatically deducted from their paychecks.
Among the cases are some submitted by R. Lee Brown, a retired command sergeant major who sells insurance near Fort Hood, Tex. Mr. Brown, in a telephone interview last week, said about 50 soldiers filled out applications to buy insurance from him in March, just before they shipped out to Iraq. But so far, he said, none of their payroll deduction paperwork has been processed, leaving them without the additional insurance coverage they wanted.
The delayed paperwork may be an administrative lapse, but Mr. Worsham said he and Mr. Brown suspect that the payroll-deduction paperwork was simply "trashed" by finance officers who thought that the insurance the soldiers wanted to purchase was unnecessary. Pentagon officials have said that any military personnel found to have improperly interfered with a soldier's well-informed decision to buy supplemental insurance will be punished.
Mr. Worsham rejected the idea that officers who may have advised their troops to cancel policies may not have understood that there are some supplemental policies worth keeping, even if others are far less suitable.
Instead, he argued that many in the military establishment are prejudiced against American Fidelity and Trans World, the two companies that sell the Flexible Dollar Builder. In the late 1990's both companies and some of their agents were temporarily barred from several military bases after investigations confirmed that they had violated Pentagon rules governing the sale of insurance on military bases. Both were also sued in the late 1990's over their business practices by the Justice Department and by Florida insurance regulators; they settled both cases without admitting any wrongdoing.
Copyright 2004 The New York Times Company

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>> OUR FRIENDS THE SAUDIS


Women Denied International Driving Licenses
Abeer Mishkhas & Somayya Jabarti
JEDDAH, 8 September 2004 -- The Traffic Department has issued a law forbidding the issue of international driving licenses to all women in the Kingdom, whether Saudis or expatriates, Al-Watan newspaper reported.
In the past, Saudi women, who are not allowed to drive in the Kingdom, obtained driving licenses from other countries and using those licenses were issued international driving licenses through travel agents in Saudi Arabia.
A Jeddah travel agent told Arab News that issuing international driving licenses to women is a violation of Saudi law, and that those who do so -- he said there are those who still do -- are violating the law. He said there is nothing in writing forbidding the issuing of drivers' licenses. In other words, nothing official from the government has come to them but that it is understood among travel agencies that it is illegal to issue women with international drivers' licenses.
An agent at Al-Tayar Travel Agency said that his agency would not issue the licenses since to do so would break Saudi law. But what do women think?
Samira Al-Ghamdi, a psychologist, said: "I think such a decision needs to be studied. There are Saudi women who live or study abroad and have driving licenses in those countries. It does not make sense that when they come to renew their licenses here, they are not allowed to do so. I have a relative who got a license in Kuwait and she drives there. Such decisions are haphazard and they are not going to stop Saudi women from driving abroad."
Heba Shaikh sarcastically said: "This is only needlessly complicating women's lives. Instead of allowing us to drive here, now we are not allowed to drive abroad either. For me this means that I must go to any other country, take the driving test there and get a license which I can then use wherever I want. Except my home country of course. Honestly there are more important issues in our lives that require time and effort."
Independent women who travel on their own prefer the option of driving their own cars and this decision is going to make things difficult for them. A Saudi woman professor at King Saud University said: "I've been driving outside the Kingdom for at least 17 years. And as a mother who usually travels on my own, I do my own driving when I'm outside the country. I've renewed my driving license repeatedly. Now this is an unnecessary inconvenience. Must I now apply for a local driver's license in whatever country I travel to?"
The ban affects also non-Saudis who are not banned from driving in their own countries. Sawsan Al-Tabi, a Palestinian who works in a public relations company, normally renews her international driving license before traveling abroad in the summer but this year, she was unable to do so. "This year the travel agency refused to renew my international license even though my first license was issued in another country and despite the fact that I'm not Saudi. I don't understand. Not only are Saudi laws being forcefully and illogically applied to non-Saudis, but they're stepping over the borders to apply them."
On the other hand, some Saudi men think differently. Abu Sara, a businessman who is the father of three daughters and three sons, said: "I don't see the harm in the law. I mean it's not like women, Saudi or non-Saudi, are driving here. Come to think of it, stricter laws about issuing driving licenses should be implemented for men as well. The state of driving is bad as it is. Why would any woman be upset by this new law?"
For some women this new law is just one more obstacle. As Nouf Ahmad said: "Honestly it's like even if we leave the country, we don't really leave, do we?"
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Saudi-Pak Ties Highlighted as Fahd, Abdullah Meet Aziz
Naushad Shamimul Haq, Arab News
JEDDAH, 8 September 2004 -- Custodian of the Two Holy Mosques King Fahd and Crown Prince Abdullah held talks here yesterday with visiting Pakistani Prime Minister Shaukat Aziz on major international issues including Palestine and Iraq.
During the meeting, King Fahd highlighted the "strong and distinguished relations" between Saudi Arabia and Pakistan and emphasized the need to strengthen these ties, the Saudi Press Agency said.
Aziz conveyed the greetings of President Pervez Musharraf to the king and the crown prince. "This is my first foreign visit after becoming prime minister," Aziz said, adding that Pakistan gives utmost importance to its relations with the Kingdom.
Aziz told King Fahd: "We in Pakistan consider you as the leader and supporter of the Islamic nation." He also commended the great achievements made by Saudi Arabia over the past years.
Aziz also noted King Fahd's efforts in the expansion of the two holy mosques and the Saudi government's services to Haj and Umrah pilgrims. He emphasized Islamabad's desire to promote Saudi-Pak relations.
Earlier, Prince Abdullah held a one-on-one meeting with Aziz before hosting a luncheon in his honor. The luncheon was attended by Prince Sultan, second deputy premier and minister of defense and aviation, senior princes and top officials. Aziz held a separate meeting with Prince Sultan.
Finance Minister Dr. Ibrahim Al-Assaf met with Aziz and discussed the private sector's role in strengthening economic cooperation between the two countries.
Addressing members of the Pakistani community at the Conference Palace, Aziz vowed to pursue transparent policies and make Pakistan prosperous and an economic giant.
He said the government had devised plans to enhance productivity and reduce poverty, particularly in rural areas. Special emphasis was being given to the improvement of infrastructure, health care facilities and education. Water shortage will be overcome with the building of big dams, he said.
Aziz said the government's prudent economic policies had yielded results and the growth rate had increased to 6.4 percent. An increase of 8 percent will be possible in near future, he added.
He urged Pakistanis living abroad to project the image of the country as a progressive and modern state.
About the problems of overseas Pakistanis, Aziz said Minister of State for Overseas Pakistanis Tariq Azeem has been assigned the task of resolving them on a priority basis.
Aziz said he has very good and cordial relations with Saudi leaders as he spent most of his life in the Kingdom. He said Saudi Arabia is second home for every Muslim.
He said the government was planning to launch an Islamic bond before the end of this year which he hoped would be well received in the Middle East.
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>> LIBYA


Save Fathi Eljahmi
A Libyan dissident languishes in Gadhafi's dungeon.
BY CLAUDIA ROSETT
Wednesday, September 8, 2004 12:01 a.m. EDT
Unless someone with influence acts soon, this column must serve as an obituary for the hopes held out earlier this year of political reform in Moammar Gadhafi's Libya. More concretely, we may soon be reading obituaries for one of Libya's top democratic dissidents, Fathi Eljahmi--who is reportedly ill and in danger of dying in the hands of Libya's security police.
For anyone wondering why we should care, apart from such vague considerations as sheer human decency, the latest answer lies in the charred schoolhouse ruins and children's graves of Beslan, Russia. The only real hope of ending this global war is to replace the tyrannies that spawn terror with free societies that engender love of life, not death. In that endeavor, such democrats as Mr. Eljahmi are allies we cannot afford either morally or politically to abandon. They are our own best hope.
Jailed two years ago in Libya's notorious Abu Salim prison for advocating political pluralism and free speech in Libya, Mr. Eljahmi was released this past March, in the first happy round of U.S.-Libyan rapprochement, after Gadhafi agreed last December to give up his nuclear weapons program. Mr. Eljahmi seized the chance to speak up again for liberty, saying that Libya needed the equivalent of the political roundtable debate that in Poland, in the 1980s, helped bring democratic reform.
Less than three weeks after Mr. Eljahmi's release, and just after the freshly rehabilitated Gadhafi had hosted visits to Tripoli by Tony Blair and Assistant Secretary of State William Burns, Libyan security squads detained Mr. Eljahmi once again, along with his wife and eldest son. Although "detained" is a perhaps too polite a word for a process in which Gadhafi's thugs assaulted Mr. Eljahmi at the door of his home, then dragged him away and have since held him incommunicado.
There has been no news of his wife and son, a silence alarming in itself. But last week, a message from sources inside Libya reached a group of Libyan-Americans in the U.S., who have been campaigning for democratic reform back in Libya--the American-Libyan Freedom Alliance. One of ALFA's leaders got word that Mr. Eljahmi has been transferred to Libyan security headquarters in Tripoli, a dread place known as Zawyet Al Dahmani, which is Libya's version of the old Soviet Lubyanka. With his health fast deteriorating, the 63-year-old Mr. Eljahmi, a diabetic with a heart condition, now in the un-tender care of Gadhafi's interrogators, is reportedly in danger of dying.
ALFA itself, according to several members, has been threatened in recent months by Gadhafi. Libyan agents in various sinister ways have sent them the message that the Libyan regime has long arms and can reach them anywhere in the world. That's a threat to take seriously, given Gadhafi's long record and wide reach of murder during the 35 years since he seized power--especially if the West now contents itself by accepting his blood money and applauding his "rehabilitation" while he does to death a man like Mr. Eljahmi. The blood on Gadhafi's hands belongs not only to the victims of his regime's terrorist acts abroad, but also to his many victims inside Libya, including the hundreds of prisoners shot to death in cold blood in 1996, during a protest over hideous conditions in the same Abu Salim prison where Mr. Eljahmi was jailed from 2002-03.
Despite Gadhafi's threats, ALFA members (including Mr. Eljahmi's younger brother, Mohamed Eljahmi, a naturalized U.S. citizen) have been seeking help in obtaining Fathi Eljahmi's release, or at the very least arranging to send him medical care in custody. ALFA has sent a letter to Secretary of State Colin Powell, reminding him that President Bush specifically mentioned Mr. Eljahmi this spring as one of the important democratic voices of the Islamic world. ALFA members have made the obligatory rounds of assorted other State Department officials and congressional offices--and come up dry.
That's worth thinking about, because in theory there are plenty of forces and resources arrayed to help and protect someone like Fathi Eljahmi.
First and foremost, at least in theory, there's the United Nations, with its cozy ties between the Libyan regime and the U.N. Human Rights Commission--chaired last year by none other than Libya's current ambassador to the U.N. in Geneva, Najat Al-Hajjaji. If Her Excellency Ms. Al-Hajjaji will not rush to Mr. Eljahmi's defense (and somehow no one seems to be seriously considering that she might), then perhaps Secretary-General Kofi Annan, who last year blessed Ms. Al-Hajjaji's presence in his human rights shop, could use his U.N. world stage to say a word or two on this matter of genuine human rights.
Then there's the Bush administration, which has made liberty abroad a pillar of foreign policy, and with its newly opened U.S. mission in Tripoli is well-placed to explain to Gadhafi that the U.S. means what it says. There is of course the election season consideration that the nuclear disarmament of Libya is one of the victories of the Bush administration--which it certainly is. But that came not of Gadhafi's goodness of heart, but of his fear upon witnessing the fall of Saddam Hussein. Toadying to Gadhafi is no way to keep him in line. If an American demand for the release of Mr. Eljahmi is enough to start Gadhafi ordering up more nuclear blueprints from China, then you can bet your sweet uranium Gadhafi was going to try it anyway--and we'd be smarter to keep him running scared, rather than fat, sassy and secure.
Of course there's also John Kerry, still struggling to define his post-Vietnam foreign policy. As it happens, Fathi Eljahmi's brother is one of Mr. Kerry's constituents. What better message than for Mr. Kerry to call Mr. Bush to account and demand that if Libya's regime wants to be welcomed into the modern world--and removed from the list of terror-breeding nations--it must make room for such democratic figures as Mr. Eljahmi.
And don't forget Congress. It was Sen. Joe Biden who during a visit to Gadhafi last March asked for Mr. Eljahmi's release from prison, and was mighty proud to publicize the achievement when Gadhafi said yes. How about some follow-up, at decibel levels the fabled "Arab street" can hear, that releasing a democrat from prison is not something to be reversed as soon as Joe Biden is safely back in Washington.
Then there are the enlightened governments of Europe, which hosted a visit from Gadhafi in April. Not that anyone expects anything at this point from France. But Italy's Prime Minister Silvio Berlusconi dropped in on Gadhafi last month, and Germany's Gerhard Schroeder is slated to visit this fall. Here is ample chance to explain to Gadhafi that it is not only Americans who understand the importance of democratization.
Laughable as it sounds, even the oilmen now rushing into Libya might want to pause for a moment and consider what kind of deals they are cutting with the dictator. Not that it is necessary or even wise for businessmen as a rule to start making policy. But as far as Western businessman serve as emissaries of the democratic world, it is in their collective interest, and ours, to spell out the democratic values that let them thrive in the first place. To expect that of any one businessman may be absurd, but where is the conscience, and voice, of such outfits as the U.S. Chamber of Commerce?
Finally, there is the press--the free-wheeling outspoken Western press, so properly shocked by Abu Ghraib. When it comes to Gadhafi's secret police and dungeons, to his regime's chronic practice of disappearances, torture and murder, where is the outrage?
Which brings us back to Mr. Eljahmi. Does anyone care to imagine how much courage and conviction it takes to be a citizen of Libya, living in Libya, fully aware of the beatings and killings that continue in Gadhafi's prisons--and yet defy Gadhafi to demand democratic rule? In an interview last March, during his brief spell between imprisonments, Mr. Eljahmi told the U.S.-based Al-Hurrah Arabic TV broadcasting service that in order to democratize Gadhafi's absolute rule "I am willing to sacrifice my life. If he wants to kill me, I am ready to die for the Libyan people."
That's his choice. Ours should be to do everything in our power to help him stay alive.
Ms. Rosett is a fellow at the Foundation for the Defense of Democracies and the Hudson Institute. Her column appears here and in The Wall Street Journal Europe on alternate Wednesdays.
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>> BRIEF
Shahab 3 Missile Ready for More Testing, Iran Says
Following a successful test last month, Iran is ready again to demonstrate the Shahab 3 medium-range missile, Iranian Defense Minister Ali Shamkhani said yesterday (see GSN, Aug. 11).
"The ministry is ready to organize a new test of the Shahab 3 missile in the presence of observers," Shamkhani said in a statement carried by the official Iranian news agency IRNA. "The recent test that was carried out was a success."
The updated Shahab reportedly has a range of up to 2,000 kilometers, while the earlier version could reach no more than 1,700 kilometers, according to Agence France-Presse (Agence France-Presse/The Australian, Sept. 7).
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China confiscates semi-official report critical of N. Korea

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Report: N. Korea sought sodium cyanide used for chemical weapons

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PLA colonel executed for selling missile secrets

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S. Korea's hit TV, films, music infiltrate N. Korean airwaves



>> IRAQ

London report foresees civil war in Iraq after U.S. pullout
SPECIAL TO WORLD TRIBUNE.COM
Wednesday, September 8, 2004
LONDON - Iraq's failure to quell the Shi'ite and Sunni insurgencies will lead to a civil war with Iran's and Turkey's potential involvement, a London institute projected.
A new report said the failure by the interim government in Iraq to impose order in the country could lead to a civil war. The report by the London-based Royal Institute of International Affairs said such a war would be likely if the United States withdraws its military from Iraq.
On Tuesday, the U.S. military reported 100 Iraqi casualties in fierce fighting with Sunni insurgents in Faluja. At the same time, the military said 34 people were killed in a battle with the Iranian-backed Mahdi Army in Baghdad, Middle East Newsline reported. The military has sustained more than a dozen casualties in both engagements, and senior U.S. officials acknowledged that Iraqi cities could remain in insurgency hands until Iraq's military and security forces were capable of retaking them. "Even if U.S. forces try to hold out and prop up the central authority, it may still lose control," the report by the institute said.
The report cited several scenarios over the next 18 months. The best-case scenario envisioned government participation by the majority Shi'ite community as well as the smaller Sunni and Kurdish sectors.
But another scenario envisioned a collapse of authority throughout the country. At that point, the report said, Iran would extend its control over Shi'ite communities in Iraq while Kurds in northern Iraq would separate from the rest of the country.
"If Iraq fragments, then the neighbors cannot but become involved," the report said. "This would presage the potential unraveling of the state system that has been in place since the 1920s, and the U.S. intervention in Iraq would indeed have triggered a transformation of the region - albeit not the one hoped for under the U.S. democratization agenda."
"The enemy is becoming more sophisticated in its efforts to destabilize the country," Gen. Richard Myers, chairman of the Joint Chiefs of Staff, said on Tuesday. "And recently, we've seen an increase in the number of suicide attacks."
The British report did not envision a dominant role for the U.S. military. It saw the military as providing increasing responsibility to the new Iraqi armed forces.
But the institute appeared to doubt the effectiveness of any interim Iraqi government or its security forces. Under the worst-case scenario, Iraq would become a haven for Al Qaida-inspired insurgents, including those fighting the royal family in neighboring Saudi Arabia.
At the same time, the mixed city of Kirkuk would descend into civil war, pitting Arabs against Kurds. The report said this could trigger Turkish intervention.
Copyright ? 2004 East West Services, Inc.

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09.08.04
http://www.tnr.com/blog/iraqd?pid=2041
"IRAQ WILL NOT BE A 'SUCCESS' FOR A LONG TIME": Passing the horrible milestone of the thousandth soldier killed in Iraq conveys a responsibility to reassess the policy that led to it. Right now, the occupation of Iraq is rudderless, defined more by drift than design. That drift is the result of the sheer confusion of President Bush. In his convention speech last week, the most specific the president got in describing the course he is endlessly asking the country to stay was this:
So our mission in Afghanistan and Iraq is clear: We will help new leaders to train their armies, and move toward elections, and get on the path of stability and democracy as quickly as possible.
Leave aside for a moment the numerous differences between Afghanistan and Iraq. What Bush offered in New York was a series of vague goals, not a strategy. Nor did he give any indication of how he understands "stability" and "democracy," the end state of the mission he blithely described as "clear." For example, will "democracy" mean simply the advent of elections--even elections extremely unlikely to be free or fair? Furthermore, does the president believe that current policy in Iraq, whatever that is, is succeeding? Are the casualty figures to be expected and endured because the policy is yielding results, as Donald Rumsfeld strangely suggested at his press conference yesterday--even as he and General Richard Myers conceded that the number of trained-and-equipped Iraqi security forces, the linchpin of the United States's plan for stability, stands at less than half of the 200,000-troop figure Rumsfeld has cited for months? (What's more, according to Myers, those forces won't truly be ready to take on security duties until the end of the year, calling into question what exactly the figure of 95,000 uniformed Iraqis really means.)
Given this strategic confusion, measuring progress or backsliding in Iraq policy is a difficult enterprise, filled with often-contradictory information. This morning, Rick Barton and Sheba Crocker of the Center for Strategic and International Studies (csis) released the long-awaited results of an ambitious research project aimed at synthesizing a trove of data on Iraq, titled "Progress Or Peril?: Measuring Iraq's Reconstruction." The csis researchers analyzed hundreds of media reports in four languages; over 300 data points from official U.S. documents; 16 public opinion polls stretching back to August 2003; and interviews with 700 Iraqis across 15 cities conducted June 12-27 of this year. The purpose of sifting through this extraordinary amount of information was to quantify on multiple levels whether Iraq had reached "tipping points" across five key areas of measurement: security; governance and participation; economic opportunity; access to basic services like electricity and water; and social well-being. These tipping points were not overly ambitious. In the governance sector, for example, it meant analyzing whether a typical Iraqi citizen could affirm, "I am free to vote"; in the security sphere, it meant whether he or she could say, "I travel throughout my community, avoiding only areas that are known to be dangerous."
The results are grim. "Iraq is not yet moving on a sustained positive trajectory toward the tipping point or end state in any sector," they write. When the survey's authors graph their findings from June 2003 to July 2004, the lines skew confusedly and double back to where they began: "In fact, in every sector we looked at, we saw backward movement in recent months." To paraphrase the president, csis has found that not only haven't we turned the corner, we are very likely going back.

Among csis's more interesting findings:

--Contrary to the endless bashing of Iraq press coverage by the administration, "the media has not been significantly more negative than other sources of information on the issues of security, governance and participation, and economic opportunity. The media has been regularly more negative than other sources about services and social well-being issues. But in those areas, the media is arguably more balanced than public sources, in that it tends to include descriptions of the impact of security and reports of the Iraqi perspective."

--As for the typical metric of success used by the administration--the number of schools or hospitals built by U.S. forces: "It is possible to recognize progress in certain areas (e.g., number of hospitals rebuilt) while also concluding that it is insufficient, overshadowed by massive remaining hurdles, or not making a quantified or qualified difference to Iraqis. The U.S. efforts thus far have been largely divorced from the Iraqi voice and undermined by security problems and the lack of jobs and they are not leading toward entrenched sustainability of Iraqi capacity."

--Csis's latest round of interviews in Iraq--among 700 Iraqis in 15 cities--occurred from June 12-27. As contemporaneous polls conducted for the CPA and Oxford Research International found, those waning days of the CPA produced a honeymoon period for the embryonic administration of Iyad Allawi. But even during the honeymoon, csis found, "Governance and Participation is a largely negative picture, despite a slight boost in optimism related to the June 28 transfer of sovereignty. ... Most are willing to give their government a chance, although they continue to question its credibility." While polling during this time typically confirmed the honeymoon, the interviews csis conducted did not: "On the basis of the interviews alone, however, Iraqis seem to feel they have marginal influence over a government that is somewhat credible. This was the only issue on which not one of the towns we interviewed passed the tipping point."

--The Sunni and Shia insurgencies have already overwhelmed the U.S. and the Allawi government. Now, csis warns, "U.S. and Iraqi officials ignore the undercurrent of disaffection in the north at their peril. ... As recent violence in Mosul shows, that city is a ticking time bomb ... Kirkuk is a similar worry." In Kurdistan, a population that once expressed high levels of confidence in the developing political situation is growing disillusioned with the PUK and KDP leadership, as well as with the U.S., largely due to the administration's refusal to secure United Nations approval for the federalism and autonomy guarantees in the interim constitution.

The study's authors bring a tremendous amount of credibility to this project. In July 2003, a csis delegation that studied conditions in Iraq at the behest of Rumsfeld and Paul Bremer issued a remarkably prescient report highlighting the pitfalls of the administration's dual strategy of unilateralism and Iraqification, the rapid deterioration of security conditions, and its dire implications for success in the political and economic dimensions of reconstruction. (Both Barton and Crocker were part of the csis team.) That early report, which warned of a three-month window of opportunity for the U.S. occupation, went essentially unheeded.
Now, csis issues a new set of recommendations, ranging from accelerating the training of Iraqi security forces to prioritizing development of the Iraqi justice system to renewing efforts at internationalizing the occupation. But the researchers candidly identify a crucial complicating factor: the very fact of the U.S. occupation: "[T]he United States should expect continuing resentment and disaffection even if the U.S.-led reconstruction efforts seem to be making positive, incremental improvements to the country according to quantifiable measures. In other words, the occupation will not be judged by the sum of its consequences, but rather qua occupation."
Csis has done something that President Bush has never done and probably will never do with the American people when it comes to Iraq. It gives them the tools to assess the policy, and then levels with them:
Iraq will not be a "success" for a long time. In fact, one thing this project highlights is the difficulty in defining success at all. It is better to focus on catalyzing Iraq's recovery by concentrating on a series of measurable benchmarks, like those laid out in the report, and setting Iraq on the right trajectory to meet those benchmarks. Setting our sights on realizable benchmarks instead of on defining a U.S. exit strategy will be more beneficial for Iraq, and suggest achievable goals for the United States.
If the administration had listened to csis in July--or to the numerous government officials who studied a potential occupation of Iraq in 2002--perhaps we wouldn't have come to this awful point. But here is where President Bush has taken us, and from the very beginning to last week, he has proven himself incapable of taking us forward.
posted 10:04 a.m.

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Bushmaster, Bull's Eye Settle for $2.5 Million in D.C. Sniper Shootings Lawsuit

By Rebecca Cook Associated Press Writer
Published: Sep 8, 2004
SEATTLE (AP) - The manufacturer and dealer of the rifle used in the Washington, D.C.-area sniper shootings agreed Wednesday to pay $2.5 million in a settlement with victims and victims' families.
The settlement with Bushmaster marks the first time a gun manufacturer has agreed to pay damages to settle claims of negligent distribution of weapons, said Jon Lowy, a lawyer with the Brady Center to Prevent Gun Violence. He helped argue the case. He said the settlement with Bull's Eye Shooter Supply is the largest against a gun dealer.
"These settlements send a loud and clear message that the gun industry cannot turn a blind eye to how criminals get their guns," Lowy said.
Bushmaster Firearms of Windham, Maine, agreed to pay $550,000 to eight plaintiffs. Bull's Eye Shooter Supply of Tacoma, where the snipers' Bushmaster rifle came from, agreed to pay $2 million.
Kelly Corr, the attorney representing Bushmaster, said the company made "no admission of liability whatsoever."
He said Bushmaster and its insurance company, which will pay the $550,000, decided to settle rather than continuing to run up legal fees in court. Corr said the settlement will not change the way Bushmaster conducts business.
"Bushmaster believes it is a responsible manufacturer," he said.
As part of the settlement, though, Bushmaster agreed to educate its dealers on gun safety.
A lawyer representing Bull's Eye did not immediately return calls for comment Wednesday night.
A judge will determine how to divide the settlement among two people who were injured in the shootings and the families of six people who were killed.
John Allen Muhammad, 43, was convicted and sentenced to death for murder in one of the 10 fatal shootings in October 2002 in the Washington, D.C.-area. His co-conspirator, 19-year-old Lee Boyd Malvo, was tried separately, convicted of murder in a different death and sentenced to life in prison without parole.
They used a .223-caliber Bushmaster rifle, a civilian version of the military M-16.
The civil lawsuit alleged that at least 238 guns, including the snipers' rifle, disappeared from the gun shop in the three years before the shooting rampage. Despite audits by the Bureau of Alcohol, Tobacco and Firearms showing that Bull's Eye had dozens of missing guns, Bushmaster continued to use the shop as a dealer and provided it with as many guns as the owners wanted, the lawsuit alleged.
"It appears that 17-year-old Malvo was able to stroll into this gun store and stroll out carrying a 3-foot-long, $1,000 Bushmaster assault rifle," Lowy said. "Bull's Eye should have taken reasonable care to prevent guns from being stolen. Bushmaster should have required Bull's Eye to implement simple, reasonable security measures."
Seattle attorney Paul Luvera represented the victims' families. He called the settlement "historic" and said it should change practices in the firearms industry.
"When a manufacturer makes a large settlement like this one, it is an example to other manufacturers," Luvera said.
The victims' lawsuit, filed in January 2003, also names Malvo and Muhammad as defendants. Those claims are technically still pending, though they are unlikely to be resolved.
A bill was proposed in Congress earlier this year that would have given the firearms industry immunity from lawsuits such as this one. Despite strong support from President Bush, it died in the Senate.
On the Net:
www.bushmaster.com
www.bradycenter.org
AP-ES-09-08-04 2302EDT
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Nov. 13, 2001 Air Crash over New York Was Work of Al Qaeda Suicide, Says Canadian Intelligence
DEBKAfile Special Report
August 30, 2004, 10:30 PM (GMT+02:00)
According to a top secret Canadian government report, the 9/11 terrorist attacks on New York, had a sequel two months later. On November 13, 2001, American Airlines flight 587 crashed over Queens, New York, shortly after takeoff from JFK killing all 265 people aboard. A captured al-Qaeda operative, Mohammed Mansour Jabarah, told Canadian intelligence investigators that a Montreal man who trained in Afghanistan alongside the 9/11 hijackers was responsible, using a small shoe bomb similar to the one used by convicted shoe bomber Richard Reid for his "suicide mission." He named Abderraouf Jdey, a Canadian citizen known also as "Farouk the Tunisian."
This is reported in Canada's National Post
Asked for a comment, US National Transportation Safety Board spokesman, Ted Lopatkiewicz, still insisted there was no evidence of anything other than an accident (in the plane crash over Queens.) It appears, at least the evidence we have, is that a vertical fin came off, not that there was any kind of event in the cabin."
The same kinds of claims were made officially three years ago too. Yet on November 15, 2001 DEBKAfile's counter-terror sources maintained that the downing of Flight 587 was the work of terrorists:
The Information accumulating opens up the possibilities of a bomb having been planted near the tail of the Airbus, or a suicide bomber blowing himself up in the rear of the aircraft. The plane came down shortly after taking off for the Dominican Republic from John F. Kennedy International airport. Another scenario under investigation is that a surface-to-air missile was fired from a boat in Jamaica Bay near the airport.
According to DEBKAfile's intelligence sources, a number of people linked to Al Qaeda in New York behaved suspiciously several hours before the crash; some, who were under surveillance following the September 11 attacks, managed to disappear, with the FBI unable to determine how they slipped away or trace their current whereabouts.
Those sources also noted that the US F-15 warplanes, on 24-hour patrol in the skies of New York and other major US cities, were ordered immediately after the crash to search for any boats or unusual activity in the Jamaica nature reserve.
The morning after, Wednesday, November 14, divers were seen scouring the marsh area for signs that missiles had been fired at the plane, such as a launcher or a scuttled boat, on the assumption that the terrorist who fired the missile escaped in a scuba suit.
Despite adamant denials by the US Federal Aviation Authority, it is now becoming clear that prior to the crash, US intelligence did indeed receive numerous warnings from intelligence sources outside the United States that a terrorist strike was likely on Tuesday, Veterans Day, to mark the two-month anniversary of the attacks on the World Trade Center and Pentagon. (End of quote)
According to the US 9/11 commission, Jdey, 39, came to Canada from Tunisia in 1991 and become a citizen in 1995. With his new passport, he left for Afghanistan and trained with some of the September 11 hijackers. He was dropped from the 9/11 mission after recording a "martyrdom" video. Khalid Sheikh Mohammed, planner of the World Trade Center attack, claims Jdey was recruited for a "second wave" of suicide attacks. In 2002, he was one of seven al Qaeda members sought in connection with possible terrorist threat in the United States.