How Would Democracy Change China?



Democratization and Greater China
How Would Democracy Change China?
by Arthur Waldron
Arthur Waldron (awaldron2@aol.com) is a Senior Fellow of FPRI and the Lauder Professor of
International Relations at the University of Pennsylvania. His books include From War to
Nationalism: China's turning Point, 1924-1925 (Cambridge University Press, 1995) and The
Great Wall of China: From History to Myth (Cambridge University Press, 1992).
Given the requirements of China's increasingly affluent and wellinformed
society and its dynamic economy, political change in the
People's Republic of China is probably coming sooner than many
would expect and may well take the form of steps toward democracy. Key
among the reasons for this is the situation in Hong Kong. Since the mass
demonstrations held there on July 1, 2003, a swelling chorus of voices has
been calling for democracy in the Special Administrative Region. Influential
businessmen such as Sir Gordon Wu, who has long been skeptical about
democracy, have now joined the human rights and democratic activists'
cause.1
Remarkably, until July 1 placed the issue of ``democracy, yes or no?''
squarely in Beijing's lap, many observers treated the possibility of genuine
change as remote.2 Hence Beijing's response, several months after the
demonstrations, that local leaders ``must reiterate their support for [chief
executive Tung Chee-hwa] in public because it is crucial to preserve stability
in Hong Kong,''3 despite the near universal disapproval being expressed for
him. (An October 2003 poll indicated that Tung enjoyed the support of only
25 percent of the public.)4
The inexplicable conviction that democratization for China proper
was not an issue, let alone a possibility, was remarkably durable: it survived
the end of communism in the West and the pluralization of the Soviet Union,
as well as the wave of political change in Asia that began in the Philippines in
2004 Published by Elsevier Limited on behalf of Foreign Policy Research Institute.
1 ``Start talking on direct polls, says Gordon Wu,'' South China Morning Post, Sept. 16, 2003.
2 BBC correspondent Fergal Keene, for example, recently estimated that China ``is perhaps
one generation away from a major upheaval,'' Independent, Sept. 6, 2003.
3 ``We're listening, say leaders, but stability is key,'' South China Morning Post, Sept. 22,
2003.
4 ``Trust in government hits low point,'' South China Morning Post, Oct. 15, 2003.
Spring 2004 | 247
the 1980s. Today, China is surrounded almost entirely by democratic states,
from India to Mongolia to South Korea and Japan to Taiwan and into
Southeast Asia. It is one of only five remaining communist dictatorships in the
world: the overwhelming majority of the world's nations are democratic or
democratizing. Some political scientists have taken to explaining how
autocracy has survived in China, by implication suggesting that it will
continue.5
Now the people of Hong Kong have made their preferences clear, not
only through the summer demonstrations but also, even more powerfully, in
the record voter turnout and crushing victory of the democrats in this past
autumn's district council elections. Beijing must decide whether to go with
the clear trend or somehow try to stop it. The decision point is 2007 for
whether or not to permit universal suffrage and genuine democracy, as the
Basic Law suggests is possible.
If democracy is permitted in the Hong Kong SAR, then pressure for
similar dispensations elsewhere in China will prove difficult to resist (as
happened with economic reform, which was initially limited to a few special
zones). Unlike economic reform, however, which in certain respects has
strengthened the Party's control over business and wealth, democracy will
certainly undermine Party control of politics--and for that reason is a most
unwelcome possibility for many Party members.
What if Beijing decides against democracy for Hong Kong? In that
case, Hong Kong voters may punish the current, partially democratic
government by electing enough opposition legislators to create a deadlock
that will prevent the Beijing-appointed chief executive from securing
approval for his programs even under the current, Beijing-designed system.
Beijing is trying to stop this disastrous, for it, outcome by means of
rationalization and manipulation. Thus it stresses that economic, and not
political, grievances are at the root of the present situation and professes to
believe that if somehow Hong Kong's economy can be gotten back on track,
democratization will fade away. Thus State Councilor Tang Jiaxuan was
quoted as saying in September 2003 that ``we should recognize that boosting
Hong Kong's economy is the key to addressing the problems facing the city
and helping ease the grievances of the middle class.''6 If this strategy fails, as
is likely, only a very hard option will remain: rewriting the Basic Law and
somehow imposing dictatorial rule. Xu Kuangdi, a vice chairman of the
Chinese People's Political Consultative Conference, condemned the summer
protest as ``a bad thing.''7 Leaders of the democratic movement such as
Bishop Zen and legislator Emily Lau Wai-hing have already been vilified in
5 Perhaps the best example is Andrew J. Nathan, ``China's Changing of the Guard:
Authoritarian Resilience,'' Journal of Democracy, Jan. 2003, pp. 6-17.
6 ``A revived economy will ease grievances, delegations told,'' South China Morning Post,
Sept. 16, 2003.
7 ``Beijing has never been so worried about HK,'' South China Morning Post, Sept. 11, 2003.
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the official media.8 No doubt Beijing is of two minds about what to do next,
but it must do something soon.
What happens in 2007 is not going to be clean or neat. Democratization
is a difficult process that can go terribly wrong. In country after country,
the interim period when the old system is breaking down but the new one
has not yet taken root has proved to be a time of suffering, violence, and
often political extremism. The Soviet Union took its strong medicine in 1989:
abolishing the communist system, freeing the press and media, legalizing
opposition parties, introducing parliamentary rule, making the ruble into a
convertible currency, and liberating the Soviet empire. At first, many
observers felt that the cure was worse than the disease.
Economic Consequences
In the first few years after the end of communismin Russia and the Cold
War, poverty seemed to rise, the ruble collapsed, pensioners were wiped out, a
coup was attempted, and many regretted the loss of empire and superpower
status. But Russia has in the last few years begun to reap some benefits. While
authoritarian tendencies continue in government, the police, and the media,
the gloom of the late 1990s has lifted. The economy is developing at a
respectable rate, foreign exchange reserves are growing, the Russian media is
incomparably freer than either its Soviet or Chinese counterparts, and elections
continue to be scheduled and held. Russia's still incomplete democratization
has generally been beneficial to all Russians, and Moscow is emerging from
seven decades of grime as one of the most beautiful cities in Europe.
Regime type and regime change made a huge difference in the Cold
War and its end. During the Cold War, Kremlin-watchers would often
maintain that Soviet foreign policy was in keeping with Russian traditions.
Indeed, some blurred the line between the ancien regime and the USSR. This
sense that Russia somehow had a set of national interests that both tsar and
commissar held in common was widespread, and it was supported by the
then-current political science theory, which paid little attention to regime
type. Such arguments are nearly impossible to make for Russia today, but we
still hear them for China: that what is important is not the fact that the
government in Beijing is communist but that it is a Chinese regime, a rather
stable one at that, and that China has a set of rationally defined national
interests that any regime can be expected to further.9
8 ``Bishop Zen willing to talk to Beijing,'' South China Morning Post, Sept. 21, 2003; ``Do not
show toleration of Emily Lau's offence,'' China Daily (Hong Kong edition), Sept. 2, 2003.
9 ``In all, the preponderance of evidence indicates that the Chinese regime is relatively
stable at present [and] that its foreign policy is primarily motivated by rational national
interests.'' Letter to the editor signed by Michael D. Swaine and eleven others, Commentary,
Oct. 2003, pp. 10-11.
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Spring 2004 | 249
If this were the case, then China would be an even more exceptional
country than has been imagined. For in every other country, regime type has
made an immense difference in both domestic and foreign policy. In France,
the Bourbons sought power, glory, and territorial aggrandizement, but
Napoleon was something altogether different. In Germany, the foreign policy
of the Prussian (later imperial) government supervised by Bismarck was very
different from that of the Weimar Republic or National Socialism. In Britain, a
single election that threw out the Tories and brought in Labour meant rapid
independence for India. The United States has no single set of foreign policy
goals that are equally supported by Democrats and Republicans. Likewise,
the regime type in China has made a difference in the past and will continue
to do so in the future. Furthermore, fully democratic countries with
entrenched constitutions and regular elections (not states in the midst of
transition) have a low proclivity to make war on one another.
Nevertheless, many people in both China and the West are explicitly
hostile to the idea of Chinese democracy, even though the PRC's current
constitution does provide (even if only on paper) for elections and the
associated constitutional structures and independent judicial institutions.
Who would benefit from such elections? First, farmers. Rural residents
constitute 70 to 80 percent of China's population. They will dominate any
fairly elected parliament and change policies. Thus they might allocate funds
for rural infrastructure, such as irrigation systems and secondary roads, and
for education, health care, and social insurance for rural populations. They
would demand equality of treatment with the residents of the urban areas,
which today boast far higher standards of living and account for some 80
percent of government expenditures. They would call for trade policies that
made it easier for them to specialize in high-value crops and protect them
against subsidized exports from the developed world.
Such an electoral result would be nothing short of a revolution.
China's current economic ruling class is an interlocking directorate of Party
members, Chinese who have acquired foreign citizenship and then returned
to China to work with them, and foreign investors. As Hugo Restall writes,
``the most productive sector of the economy is largely run by foreigners, for
the benefit of foreigners.''10
The current economic system favors cities, especially coastal cities,
over countryside; state-owned enterprises (SOEs), communist officials (who
comprise some 80 percent of private business owners, though a small fraction
of the population), and foreigners over ordinary Chinese; and high
technology over agricultural development. The rural majority of a democratic
China would probably force the government to give them greater economic
opportunity and a larger voice in major projects. They might disapprove
massive projects like the Three Gorges Dam.
10 Hugo Restall, ``Why China Is a Paper Tiger,'' Asian Wall Street Journal, Aug. 1, 2003.
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Providing money for rural areas would further strain China's budget,
which portends trouble ahead. Foreign Policy's Moises Naim notes that ``no
country has ever been able to go through the social, economic and political
change that China will undergo without accidents that derail even the best
laid plans.''11 Billions of dollars will be needed even to begin to address the
rural areas' problems. Where will the money come from?
The Chinese government currently runs a chronic fiscal deficit and
has rendered insolvent the banking system it controls by forcing it to make
massive loans to money-losing SOEs, which use the borrowed money to cover
current employment and other costs and to increase capacity. Most industrial
products are therefore oversupplied, which drives prices down and creates
chronic deflation.12 But the debt thus created--as well as the expansion of
the money supply as the government prints currency (RMB) with which to buy
dollars at a fixed rate and then issues bonds to soak up the excess liquidity--
plants the seeds for inflation. The only possible way to cover China's current
loan obligations is by means of the printing press. So here is the critical point:
new money for rural needs can only come from the redirection of current
resource flows.
It is estimated that the 2008 Beijing Olympics will cost more than $20
billion. The cost of launching the PRC's first manned space mission in October
2003 was comparable. China is also spending massively on missiles,
warships, and a new air force, much of which is imported.13 Democratization
would almost certainly change Chinese foreign policy.
Foreign Policy Consequences
China's current foreign policy is inconsistent and often self-defeating.
For instance, it is obviously in China's interest to have fewer, not more,
nuclear-armed neighbors. But China's military build-up and its nuclear
proliferation, especially to Pakistan, were the reason for India's decision to
become a declared and competent nuclear power. Perhaps Beijing imagined
that Washington would somehow squelch India and prevent it from
becoming a military rival to China. If so, it was mistaken. The result is
arguably the greatest setback to Chinese interests since 1949-50, when the
new government in Beijing failed to establish formal relations with the United
States and then entered the Korean War. If the infant PRC had dealt more
11 ``Only a Miracle Can Save China from Itself,'' Financial Times, Sept. 15, 2003.
12 At present China's central government is borrowing simply to keep the economy where it
is, grossly misallocating scarce resources and undermining its banks in the process. See
William Pesak, ``Commentary: Fragile Finances are the Real China Story,'' International Herald
Tribune, Aug. 27, 2003; ``Second Thoughts about Amazing China,'' Jane's Foreign Report no.
2755, Oct 2, 2003.
13 See ``China's Military Build-up,'' Jane's Intelligence Digest, Aug. 8, 2003.
Democratization
Spring 2004 | 251
deftly with Washington, or had it not humiliated Mr. Nehru in 1962 and
provided nuclear weapon technology to Pakistan, its current strategic
situation would be far better than it is.
The situation may be worsening. From Pakistan, nuclear technology
(mostly Chinese) has now spread to North Korea, where (along with Russian
missiles apparently obtained from the Middle East) they create an enormously
difficult and potentially dangerous situation. If the two Koreas are united, that
new state will surely also be nuclear. This development, like the Indian
decision for nuclear weapons, will be an enormous setback for Beijing: the
Korean peninsula controls access by sea to the ports of southern Liaoning
and northern Shandong, as well as Tianjin and the sea lanes to the Chinese
capital. Yet Beijing is accepting this with apparent nonchalance.
Above all, good relations with the United States are surely in Beijing's
interest. Whatever stability and wealth the Chinese government has achieved
to date ultimately rest on massive exports, of which the United States is by far
the largest buyer. Chinese involvement in any sort of hostilities in Asia would
certainly lead to the closing of the American market and the sequestration of
Chinese assets in the United States. Yet China not only keeps its distance from
Washington (seeking, for example, to create room for maneuver by aligning
itself with Germany, France, Russia, or even Serbia), it is also the only country
in the world today configuring its military to attack American forces--witness
its purchase of ex-Soviet supersonic missiles having as their sole target
American carrier battle groups.
These examples of China's foreign policy--towards India, North
Korea, and the United States--cannot be explained by rational calculations of
Chinese national interest. Each creates something new and bad for China: a
suspicious and militarily capable India; a nuclear-armed Korea in a position
to frustrate all sorts of possible Chinese actions; possibly a rearmed Japan that
would quickly outstrip China in military competence; and a United States
that, despite its desire for good relations with Beijing, has to devote more and
more time and money to countering Chinese threats to its friends and allies
and itself. Regime type is the explanation.
Chinese National Interest
How would a democratic Chinese parliament assess Chinese national
interests? First, it would be interested in improving the living standards of the
country's hundreds of millions of impoverished people. The only way to free
resources for this would be to change the foreign policy that demands, for
example, such vast military expenditures. This would entail shifting friendships
away from the few countries that seek to counter U.S. dominance in the
world and reorienting toward the countries that provide the most to China
economically. In other words, Beijing would have to become friendly with
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the United States, its biggest market; Japan, another major trading partner
and, to a lesser extent, investor; South Korea and Taiwan, both important
trading partners and major investors (China's info-tech industry is owned
roughly 70 percent by Taiwan and 15 percent by South Korea); Europe (a
major market and investor); and Australia (a major trading partner,
particularly in raw materials). And being rid of its empire, it could enter
into genuine friendship, or at least correct relations, with peoples who had
previously despised it for its colonial rule.
Hitherto, Beijing has placed disproportionate stress on supporting
other dictatorships. It is deeply involved in Myanmar (whose human rights
record, it must be admitted, is somewhat better than China's). It continues to
subsidize North Korea, providing Pyongyang with items of trade that can be
used for military programs. It has supported Pakistan's nuclear program. Its
support for Serbia as NATO attempted to dislodge Slobodan Milosevic in
1999 was massive. Beijing continues to undermine its relationship with
Washington through its rigid14 approach to Taiwan, which should be its
partner, and its interest in Cuba, in particular in the former Soviet signals
intelligence facilities there. China has been reported, at least in the past, to be
involved in supporting a range of unsavory regimes in the Middle East and to
maintain a close clandestine military relationship with Israel. This political
and military club is not one to which China should want to belong.
Under conditions of freedom and democracy, China would move to
non-belligerence toward the West, cooperation, and increasing openness.
This would of course greatly benefit China's neighbors and the United States,
ending the accelerating arms race that wastes so much money and creates so
much danger in Asia today. But for now China remains a dictatorship, and as
such it cannot welcome the prospect of other dictatorships' becoming free.
China is an odd fit: its culture, from the time of Confucius, has contained
plenty of liberal elements, and in the past century, democracy was the shared
demand of most of the intelligentsia, some of whom imagined that
communism would be democratic.15 Not only that, until 1949 China was,
politically, far freer than it is today. True, it was ruled autocratically, but ideas
could be published and discussed, universities harbored genuinely free
thought, and entrepreneurship was relatively untrammeled. So China's
current global policies, far from being a natural consequence of Chinese
tradition and national interest, are anomalous.
14 The term is from Douglas Paal, in effect the American ambassador. ``Washington's Taiwan
envoy Paal bemoans rigid China,'' China Post, Sept. 17, 2003.
15 May believed this based on the famous Mao interview with a Reuters correspondent on
Sept. 27, 1945. See ``Answers to Questions Raised by Reuters News Agency Correspondent
Gamble'' published in the Chongqing Xinhua ribao and on October 8 in the Jiefang ribao.
Translation in Stuart R. Schram, ed., Arthur Waldron, assistant editor, Mao's Road to Power:
Revolutionary Writings 1912-1949, vol. 9 (Armonk, N.Y.: M. E. Sharpe, forthcoming).
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Spring 2004 | 253
Greater China
This is even more evident when one looks at greater China--the
world of the huaren, or Chinese living outside China proper, from Hong
Kong, Taiwan, Singapore, and Malaysia to the United States. Hong Kong is
now part of the PRC, but no one there calls the SAR's inhabitants ``Chinese''
(Zhongguoren); they are Xiangangren (Hong Kong people), a usage that
recognizes the deep difference. Hong Kong people are proud of their
Chinese heritage, but they are southerners, speaking a distinct language and
instinctively distrustful of the crude and strident patriotic propaganda that
Beijing produces. They are also cosmopolitan, having their backs firmly to
China, as one longtime resident put it to me. Much the same is true for
Taiwan, though it has not until quite recently had anything like the degree of
contact with China that Hong Kong enjoyed from its cession to Britain until
1949, and then again since the 1980s. In Taiwan, even those having recent
mainland ancestry are lumped together in PRC-Chinese speech as Taiwanren
(Taiwan people). Taiwan is an amalgam of cultures and peoples: its pre-1945
population is exactly between Fujian and the Philippines, being an island
peopled by Chinese male immigrants who married local women related to
the Filipinos. Culturally, it bears the imprint of early Western colonization and
a very large dose of Japanese. Since 1949 it has followed its own course. It
now differs from China not only ethnically, but also politically (as a
democracy) and linguistically (using standard Chinese, not the simplified PRC
version). Still, it is Chinese enough that its rocky but so far steady progress
toward democratization demonstrates that such things could happen in China
as well.
Singapore, with a population that is more than 70 percent composed
of huaren, has lagged far behind Taiwan in political change.16 Its
political system is gerrymandered, its press anemic, and its economy
lagging. But its people are superbly educated and enterprising, and it is
difficult to imagine that the present Lee family dynasty is going to last much
longer--at which point Singapore will have to face democratic transition,
which will be agonizing notwithstanding that the country is well prepared
with institutions for this. In Malaysia, the huaren are enormously active
politically and, as the Malay-Islamic bloc begins to splinter, may come to
hold the decisive weight.
Paradoxically, those Asian states that are of Chinese heritage (Taiwan,
Singapore) and those where ethnic Chinese have real influence on national
security policy (Indonesia) tend to be far more distrusting of China than are
the states (Malaysia or Myanmar) where indigenous non-huaren run security
16 For an evocation of Singapore's once vigorous parliamentary life, see Chan Heng Chee, A
Sensation of Independence: A Political Biography of David Marshall (Singapore: Oxford
University Press, 1984).
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policy, even though those indigenous people may be powerfully hostile to
the local huaren. Some of China's most serious problems are with their
huaren rather than with genuine foreigners--not just those nearby but the
many of them in the West, some of whom pose a major threat to Beijing's
political control. Thus the Falungong overseas, which consists overwhelmingly
of huaren, has repeatedly managed to hijack the Sinosat, China's official
communications relay satellite, and substitute for the regular programming
films about meditation and their religion.
Other huaren take a different approach and, like e?migre?s since time
immemorial, identify strongly with their country of origin. The profits to be
made have intensified this trend. The strong American business lobby that
supports Beijing, various distinguished former members of U.S. governments,
and the U.S. diplomatic corps increasingly drive the United States to identify
its interests not with those of the Chinese people but with those of the present
Chinese government and the Sino-foreign oligarchy that controls much of
China's economy.
Indeed, foreign support is increasingly vital to the survival of the
Chinese regime: not only foreign investment and foreign markets, but foreign
acknowledgment of the legitimacy of regime leaders through state and
ceremonial visits. After all, if the president of the United States and the prime
minister of Japan agree that an individual is China's legitimate ruler, who are
local Chinese to disagree? This again is a long-standing pattern in Chinese
politics: foreign support as flying buttresses, keeping the political system
from collapsing.
Steady Change
For a decade or more after the indignation of 1989 had cooled,
American policy toward China was guided by the approach described above:
one that favored the status quo and saw China as an increasingly ``normal''
power, stable and, in the long run, vital to American interests. Over the same
years, the degree of U.S. concern about both its own security and that of its
friends and allies was rising steadily. But it was increasingly accepted that
somehow economics would trump freedom and that the Party was here to
stay. Even such remarkable events as Taiwan's democratization had little
impact on those who held to this view, who found that example irritating
rather than illuminating. That is all beginning to change, for reasons both
domestic and having to do with greater China.
Steady change is audible in China's political rhetoric. Political reform
has long been under discussion, but now there are actually small signs of
motion. President Hu has called for strengthening democracy within the Party.
This arguably is a tactical move, designed to move the locus of final power
from the nine-member Standing Committee of the Politburo (which former
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President Jiang Zemin packed with his followers before stepping down) to the
Central Committee (which numbers 356 members and alternates) and even to
the Party membership as a whole (66 million in 2002). Even a small step in the
direction of freer speech and political participation within the Party would
almost inevitably lead to arguments--at first hidden from the public--about
what policy should be. That would be a substantial step forward from what has
characterized intra-Party politics up to now: namely, argument over who
should rule rather than what they should do. As happened with the formation
of factions in the British parliament in the eighteenth century, issues would
start to replace personalities as the focus of discussion. Content would be
injected into what China-watcher Roger Uren has termed China's ``endless,
contentless politics.''17
More surprisingly, Hu has at least paid lip service to democracy for
the citizenry as well. On the eve of National Day, October 1, he made a
speech that asserted: ``We must enrich the forms of democracy, make
democratic procedures complete, expand citizens' orderly political participation
and ensure that the people can exercise democratic elections, democratic
decision making, democratic administration, and democratic scrutiny.''18 Why
is Hu saying this?
Other Chinese have been forthright in their demands that their
country adopt what journalists still often refer to as Western-style
democracy--even though Japan, India, South Korea, Taiwan, the Philippines,
and other Asian states have democratic lineages in many cases far longer than
many of the West's ``new democracies.'' Thus, on the eve of a Party meeting
called for mid-October to discuss amending the constitution, the respected
Beijing constitutional scholar and economist Cao Siyuan published China's
Constitution Revision--Protect Everyone's Legal Rights, which he sent to
every member of the Politburo. In it he advocates immediate steps to discard
Marxist rhetoric, give priority to citizens' rights, and enforce the presumption
of innocence in court proceedings. He urges holding direct elections at all
levels, empowering local and provincial legislatures, privatizing the media,
and guaranteeing freedom of speech, press, and religion.19 The immediate
official response to these suggestions was to place Cao under 24-hour
security police surveillance (now lifted). Almost simultaneously with Cao's
calls came news that an experimental, directly elected community council
may be envisaged for a Beijing neighborhood.20 Reporters did not expect a
dramatic democratic breakthrough, but was this a straw in the wind?
17 Personal communication to author.
18 ``Hu Invokes Democracy As a Shield,'' Far Eastern Economic Review, Oct. 16, 2003.
19 Points as summarized by Amy Gadsden in a manuscript shared with the author. Some of
Cao's views may be found in ``Five Recommendations for Chinese Constitutional Reform,''
Harvard Asia Quarterly, Mar. 22, 2001.
20 ``Beijing Community Council: Democratic model may be toothless tiger,'' Financial Times
(North American Edition) Oct. 14, 2003.
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This is not to suggest that the Communist Party has changed its colors
and is preparing to lead China through a transformation to democracy. But
evidently the issue is alive in China and the Party is attempting to deal with it.
Almost inevitably, that will lead to experiments in limited opening--and
those, as we saw in the late 1980s and early 1990s, usually lead to far greater
changes than their authors envisage. The reason that the Party is playing with
democratic fire is simple: popular pressure, at home and from the Chinese
diaspora, and the knowledge within the political class that whoever succeeds
in channeling into democratic institutions the aspirations and free-floating
resentments of today's China will emerge as a winner.
Taiwan and Hong Kong
As has been the pattern in China since the mid-nineteenth century,
overseas pressures, particularly from the huaren, have a disproportionate
impact in the country. Thus, although Taiwan's international profile is so low
as to approach invisibility, thanks to de-recognition by all but a handful of
states, it nevertheless enjoys substantive relations with countries ranging from
Russia to France and India to the United States that have large and wellinformed
(if well-concealed) diplomatic presences there. Furthermore,
leaving aside the difficult issue of international status, Taiwan also enjoys
the best of both worlds with respect to China. Politically, it is master in its
own house: electing its own parliament and president, having its own
military, and governing itself. Yet economically it is increasingly involved in
trade and investment with China, now owning great swaths of the most
advanced productive capacity there and selling far more to China than it
buys. Its political example is well known and admired in China, but because
it is politically independent of Beijing it cannot exert the sort of influence that
Hong Kong is now showing.
Hong Kong's status is, by contrast, internationally recognized. It is
sovereign Chinese territory, having a close economic relationship with China
and a government structure designed to appear to permit local self rule
(Gangren zhi Gan--Hong Kong people running Hong Kong, though the
chief executive is in fact from Shanghai via the United States) while in fact
allowing Beijing to run things behind the scenes. It is the sudden instability of
this arrangement, so clear in the November 2003 district council elections,
and the lack of any obvious way to muddle through, that may occasion
genuine democratization in Hong Kong and then in China. For while Beijing
may regularly scold Taiwan, no timetable, no current crisis in which it is
directly involved, forces it to do anything. The same is not true for Hong
Kong.
The Hong Kong SAR is part of China, and Beijing ultimately bears
responsibility for what happens there. Yet there is clearly no consensus in
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Beijing about how to deal with the problems in Hong Kong except through
exhortation, financial incentives, and a hope that the issue will somehow go
away. The stakes are very high. So Hong Kong can be an entering wedge,
potentially dividing the Beijing leadership in a way that Taiwan can never
match.
For Beijing, the path of least resistance is not to crack down--which
could begin an economic and financial panic that might unravel the whole
PRC economy--but rather to permit Hong Kong to democratize (even though
that process must ultimately threaten Communist rule in China itself).
At present it looks as if Beijing has decided that it has no alternative
but to play the democratic game, at least in Hong Kong. The man in charge of
policy in the SAR, Vice President Zeng Qinghong, has called for much closer
economic cooperation between Hong Kong and China, the hope being that if
the economy picks up, voters will support pro-Beijing candidates.21 The chief
secretary of Tung's administration, Donald Tsang Yam-kuen, has termed
universal suffrage a ``clear goal.''22 In Beijing, Premier Wen Jiabao has called
for ``gradual development of democracy'' in the SAR.23 But even while
enunciating pro-democratic sentiments, the governments in the SAR and in
Beijing appear to be scrambling to win the elections that, according to their
own rules, they must carry out.
Thus, in the run-up to the first test, district council elections last
November, the Electoral Affairs Commission in Hong Kong cut voting time by
three hours, a move intended to deny 200,000 people the opportunity to cast
a ballot.24 Meanwhile, in private, pro-Beijing groups attempted to cobble
together a coalition of local employees of Chinese enterprises, pro-Beijing
trade unionists, members of clan and civic associations, and staff and family
members of companies that have invested in China--or about 40 percent of
total registered voters.25 But as the result showed, all such efforts failed.
What next? When mainland Chinese poured out in the millions to
demand democracy in 1989, a handful of officials at the top of the Party made
the decision (not even following Party procedures) to order the People's
Liberation Army, in effect, to sack Beijing. That option simply does not exist
in Hong Kong--but as was true in China itself fifteen years ago, nothing
anything short of such brutal repression will conceivably halt the slide toward
democracy even temporarily. So the possibility cannot be excluded that the
Party will, for want of other options, grudgingly accept the outcome. In other
words, the Party will show that although it will not of itself promote
democracy, it will yield to pressure. If and when that is demonstrated,
pressure for democracy will only increase--inside China.
21 ``We Must Get Even Closer, Says Beijing,'' South China Morning Post, Sept. 18, 2003.
22 ``One Man, One Vote For HK Is `A Clear Goal','' South China Morning Post, Sept. 19, 2003.
23 ``Gradual Democracy Right for HK: Wen,'' South China Morning Post, Oct. 9, 2003.
24 ``Poll Hours Cut `To Stop 200,000 Voting,'' South China Morning Post, Sept. 26, 2003.
25 ``Beijing Expected To Intervene in HK Elections Next Year,'' Straits Times, Oct. 1, 2003.
WALDRON
258 | Orbis
Consequences
Should democratization be completed in China, everyone--Chinese
and foreigner alike--will benefit. But the path will be difficult and frightening
at times, and much as one would hope that the United States and other
foreign governments would shout encouragement, the high degree of official
identification of U.S. interests with ``stability'' in China may well muffle that
sound.
Since President Nixon fundamentally reversed U.S. policy toward
China in 1972, the United States has been working things in a way that is
intellectually inside-out. Washington's premise is that China is unified,
uniform, and reliably controlled by Beijing. Therefore it focuses on official
Beijing and judges its relations by examining that single linkage. It pays
relatively little attention to China outside of Beijing, and even less to the
world of the huaren outside of China and their potential linkages to and
influences on China proper. The U.S. consulate in Hong Kong was, until
recently, a cheering section for ``one country, two systems,'' devoting its
attention chiefly to gathering information and intelligence about China, not
about Hong Kong. The U.S. diplomatic presence in Taipei is disguised and far
smaller than it would be if the posting were judged by its importance. For the
United States, it is arguably one of the top ten places of greatest potential
importance; for Japan, one of the top five. In Singapore, Washington pays
scant attention to the large portion of the population that does not speak
English. It has taken as fact the PRC's self-presentation and acted on it, paying
considerable attention to the ostensible ``center'' and little or none to the
``periphery.'' (The United States is not alone; most other countries do the
same.)
Based on Chinese history over the last century and a half, this
approach is extremely ill-considered. Every major political change in China
since the late Qing (except the coup d'etat and short rule of Yuan Shikai
from 1912 to 1916) came from the periphery: from the south (the 1898
reformers, Sun Yat-sen, and the Nationalists) or the far northwest (the
Communists) and the corresponding diasporas (in Southeast Asia in the first
case, and in Moscow and the communist world in the second). The
democracy movement of 1989 started at the center in Beijing and spread
across the country. It was crushed. But in 2003, when people in the
marginal SAR of Hong Kong demanded change, they succeeded in getting
it--at least so far.
Of course, the center is not irrelevant to political change. The margins
can exert influence best when the center is divided. Time and again, political
disorder or change has begun in China when the succession was disputed (at
the end of the Qing) or when the rulers in Beijing split among themselves and
went to war (clearing the way for the Nationalists in 1924-25 and for
economic opening and social liberalization in the Cultural Revolution).
Democratization
Spring 2004 | 259
Beijing's Dilemmas
The same stars are coming into alignment today. In Beijing, among
the recognized leaders and Party members, there are several powerful
figures, some older, some younger, none of whom has complete authority,
and who disagree among themselves. Then there is a kind of ghost
population, embodied in former Prime Minister Zhao Ziyang, who favored
political reform and whose house arrest has recently been relaxed a bit. In
addition, there are the tens of thousands of Party members who supported
the democracy movement that brought about Zhao's ouster but who
managed to return to government. And among the post-1989 group, a clear
division exists between Jiang and his circle and that of the current official
authorities, Hu and Wen. No one of these leaders looks set to become even as
powerful as Jiang was over his long tenure, during which he stayed in place
by avoiding rather than indulging in the exercise of power. The last strong
man, Deng Xiaoping, is in his grave, and China will probably see no more.
The issues the Party faces today, moreover, are complex, interlocking,
and intractable. Take the current debate about the value of the RMB. The
reason China is under pressure to raise the value of the currency is that it has
run such an enormous trade surplus with the United States and other
countries that a political reaction has begun against it. In fact, the growing
U.S. trade deficit, combined with internal deficits, threatens a possible
collapse of the dollar. Were this to happen, it would be, in part, the result of
Chinese mercantalist trade policies--but it would hurt China by greatly
reducing the value of its foreign exchange holdings. So it is in China's interest
to avoid a dollar collapse. To help do that it will have to increase the
exchange value of the RMB, which will also reduce the value of its dollar
holdings, though probably by not as much. Why does it not do this? Because
even a small revaluation of the RMB might lead to a crisis in the insolvent
Chinese banking system. Why is the banking system insolvent? This has
nothing to do with trade. Rather, it is because the government has forced the
banks to turn over money, in the form of non-recoverable loans, to SOEs. And
why has the state thus corrupted its own banking system? Because it has
made a strategic decision to maintain the SOEs, rather than close or privatize
them, and since it lacks the ability to subsidize itself through taxes, it has
turned to loans. And why is it essential to maintain control of the SOEs?
Because a genuinely private economy in China would be a very difficult
environment for the Communist Party. So if we trace the chain of causes
back, it is the Communist Party's insistence on maintaining control that--
passed through several stages--is threatening the world financial order. It
would make much more sense for China to make the domestic adjustments
necessary to keep the world economy upon which it depends functioning,
rather than straining it to the breaking point for reasons having everything to
do with power and nothing to do with economics.
WALDRON
260 | Orbis
How does one fix this? Opinions are divided in Beijing. But the stakes
are high, so the arguments will be long and divisive. Consensus will prove
elusive, and muddling through impossible. Under such circumstances,
players around the edges begin to have weight, even decisive weight. And
if the center splits, as has happened before, outsiders can move in to change
things.
``Greater China'' and the Emergence of Chinese Democracy
``Greater China,'' which until lately usually referred largely to Taiwan,
has regularly in history exerted decisive influence on China proper, and its
importance on China's future cannot be overstated. But Hong Kong has
suddenly come to life. It seemingly had been becoming less important,
overshadowed by Shanghai, its economy doing badly, its people demoralized.
Now it is back at the center of things. Just how things will work out is difficult to
say. But one can be realistically optimistic and even identify Hong Kong as the
potential starting point for a process of change in China that many people have
long acknowledged would come, but who have been unable to pinpoint just
where and how. If the process unfolds in a way even remotely resembling what
I have described, the gain in security and living standards for the people of
China will be vast. But the process of getting there will be hair-raising at times.
One hopes that those who will play a role--the peoples and governments of
the huaren states outside of China, the international businesses upon which
Beijing now depends so much, and the ever-cautious China diplomats in the
world's foreign ministries--will recognize, as they did not when change began
in the USSR, that something is happening, and that the old ways no
longer apply. The time to start thinking about what new ways might
be appropriate is now.
---------------------------------------------------------------------------------------

Democratization in Greater China
Democracy and Federalism in Greater China
by Tahirih V. Lee
Tahirih V. Lee (tlee@law.fsu.ed) is associate professor of law at Florida State University
College of Law.
I n the past decade, federalism has become popular as a way to make
sense of the evolving relationship among the legal systems of the
People's Republic of China, Hong Kong, Macao, and Taiwan, and
even to describe the internal dynamics of the PRC's decentralization of
lawmaking authority since the early 1980s. What lurks behind almost all of
the various uses of the concept of federalism in this ``greater China'' region,
which for certain purposes includes Singapore (whose government is
largely comprised of ethnic Chinese, even though its population is not)
is one or another assumption about the relationship of democracy to
federalism.
The assumptions are not explicitly articulated, but they seem to
strike out in a variety of directions. In Taiwan, the two ideas, democracy
and federalism, have become opposed to one another; the one-country,
two-systems framework is viewed as a straightjacket that inhibits
Taiwan's autonomy. In a similar way, though perhaps less ubiquitously,
Hong Kong residents juxtapose one-country, two-systems with Hong
Kong's autonomy, and therefore portray federalism as diminishing Hong
Kong's ability to remain a democracy or to become more democratic. By
contrast, PRC scholars critical of the PRC's leadership depict democracy as
either not far behind the transition to, or a precondition for, a federal
structure.
Because these assumptions about the relationship between federalism
and democracy may be driving the very decision to adopt, reject, or
promote the concept of federalism in greater China, it is worth examining that
relationship more closely. It is a complex one, encompassing myriad local
variations. Here we will look, first, at the relationship between democracy
and greater China's legal, political, and economic structure, and then to the
concept of federalism, in order to make sense of the federalism/democracy
relationship.
2004 Published by Elsevier Limited on behalf of Foreign Policy Research Institute.
Spring 2004 | 275
Democracy and the Structure of Greater China
From the late nineteenth century to the mid-1980s, the states of
greater China were almost completely separate: legally, politically, and
economically. Since the mid-1980s, however, these states have felt pressures
toward interdependency. After nearly two decades of negotiations between
Great Britain and the PRC, Hong Kong became a Special Administrative
Region of the PRC on July 1, 1997. The document that enshrined this
extension of the PRC's sovereignty, the Basic Law of the Hong Kong SAR,
allowed Hong Kong certain freedoms not enjoyed by other parts of the PRC,
such as the freedom to maintain its own currency, flag, and most of the laws
that had evolved under British colonial rule there. Macao followed the same
path in 1999, and although its constitution gives the people of Macao the
same freedoms as those of Hong Kongers, in practice Macao enjoys less
autonomy from the PRC. For its part, Taiwan has remained officially
independent but has been subject to intensive diplomatic and even military
pressure to join the PRC as yet another SAR. While resisting these pressures
toward unification, Taiwan's residents have nonetheless invested huge sums
in mainland China and reaped some of the benefits of the mainland's
economic growth since the mid-1980s. Singapore escaped pressure from
the PRC to unify with it legally and politically, but has cooperated in several
economic initiatives to develop parts of the PRC in collaboration with the
PRC's leadership.
Democracy and Separation Among the Units. Both the goals and the
methods of democracy's proponents in Hong Kong and Taiwan have led
them to call for separation of the units of greater China. This can be seen in
the demonstrations in Hong Kong against a security law slated for enactment
last summer. Purportedly initiated by the PRC, the law would have augmented
coordination between Beijing and the local administration.1 A half million
residents of Hong Kong demonstrated to prevent its enactment. In seeking to
stop the PRC-Hong Kong rapprochement called for in the proposed law, the
protestors were pushing for greater separation between the two units. Their
exercising their right to speak out expanded the democratic component of
the lawmaking process in Hong Kong, thereby distancing it from the
lawmaking process in the PRC, which involves only a few thousand out of
1.3 billion people.
The demonstrations were a shock to the Hong Kong administration.
After all, the public had voiced little outcry when the administration laid the
1 See Joseph Kahn, ``2 Key Hong Kong Posts are Filled after Protests,'' New York Times, Aug.
5, 2003. The planned law was principally going to amend the Crimes Ordinance, the Official
Secrets Ordinance, and the Societies Ordinance.
LEE
276 | Orbis
legislative groundwork for this law in 1997.2 Just days before the 1997 round
of legislation, Martin Lee Chu-ming led his Democratic Party and others in a
theatrical protest against the legislative body, calling it a step backward for
democracy because a mere 400 or so elected it. Lee's critique thus
encompassed the notion that for democracy to survive or flourish in Hong
Kong, the PRC needed to recede as a legal and political presence there. But
this protest, like the few others that followed during the next several months,
exerted no visible effect on the legislative agenda of that body in 1997.
Lee's position became more popular six years later, however, when
the Democratic Alliance for the Betterment of Hong Kong, one of the local
political parties favoring coordination between the mainland and Hong
Kong, lost ground in the District Council elections held November 23, 2003.
This led to the resignation of its chair, Tsang Yok-sing. Analyzing why the
party fared poorly in the election, Hong Kong political commentator Christine
Loh pointed to its ``staunch support'' for the national security law that would
have strengthened the PRC's grip on Hong Kong. She suggested that the party
demote all of its leaders, particularly those who were more in league with
large corporations than with labor, because of their ``longstanding personal
and family associations with Beijing.'' Her recommendation supports the
view that Hong Kongers see big business as anathema to democracy.3
In a July 2000 interview, Lee stressed that Hong Kong's Chief Executive,
Tung Chee-hwa, and his cabinet had repeatedly attempted to undercut the
democratic process laid out in Hong Kong's Basic Law by seeking Beijing's
direct intervention in Hong Kong's affairs. One example of this was Tung's trip
to Beijing a few months after the Hong Kong Court of Final Appeal ruled that
Articles 22 and 24 of the Basic Law did not prevent children of mainland
Chinese parents from seeking permanent residency in Hong Kong.4 This trip
resulted in a ruling from the PRC's National People's Congress Standing
Committee reversing the Court of Final Appeal's interpretation of those Articles.
In Taiwan, too, democracy promoters emphasize the importance of
the country's remaining independent from mainland China. One of their
2 In spring 1997, the soon-to-be-instituted Provisional Legislature drafted two laws that
restricted public demonstrations and gatherings in the name of ``national security, public
safety, public order, and protection of rights and freedoms of others.'' The legislature then
enacted them into law on July 9, 1997 to take retroactive effect on July 1, 1997. See
amendments to Sections 2, 6, 9, 11, 13, and 15, Hong Kong SAR Public Order (Amendment)
Ordinance, July 1, 1997, Order No. 119 of 1997; amendments to Sections 5 and 8 of the
Societies (Amendment) Ordinance, July 1, 1997, Order No. 118 of 1997. The latter law required
all organizations to register the names and addresses of all members with the government of
Hong Kong as a quid pro quo for the right to meet and for the right of the organization to
legally exist. Provisions of the law singled out organizations with ties to Taiwan as particularly
susceptible to the reporting requirement. See amendments to Sections 2 and 5.
3 Enewsletter, Dec. 2, 2003, sponsored by the think tank Civic Exchange, www.civicexchange.
org.
4 Author interview, July 28, 2000, Hong Kong (``Lee Interview'').
Federalism
Spring 2004 | 277
strategies is to downplay of the idea of a ``Chinese'' ethnicity, because it
causes Taiwanese and mainlanders to identify with one another. Taiwan's
first democratically elected president, Lee Teng-hui (1988-2000), went to
great lengths to distinguish Taiwan's culture and ethnicity from those of the
PRC. In the late 1990s he organized Taiwan's youth into focus groups aimed at
instilling a sense of local ethnicity, using terminology for ethnic groups on
Taiwan that was not used in mainland China. Members of the Democratic
Progressive Party tried to heighten Taiwanese's sense of difference from
mainlanders, beginning a ``New Taiwan Independent-ism'' campaign5 and
sponsoring a variety of publications to support its platform of Taiwanese
independence by directly questioning the existence of a Chinese ethnicity.6
Democracy and Separation Within the Units. Taiwanese party leaders
pander to divisive tendencies within the country during presidential
campaigns in order to win votes. They aim to slice the population into
smaller interest groups than are normally formed absent a presidential
campaign. Edward I-hsin Chen has shown how ethnic mixing over the past
century in Taiwan led to a breakdown in the distinctiveness of the various
populations, which primarily consist of the Southern Fujianese Chinese,
Haaka Chinese, recent mainland Chinese e?migre?s, and the aboriginal
Taiwanese natives who predate China's conquest of the island early in the
Qing dynasty. Taiwanese are not only ethnically indistinct from one another,
argues Chen, but also they are politically unified around the desire to
maintain the status quo, namely the present independence of Taiwan
from mainland China without international statehood. In the 1996 presidential
election, Lee's winning strategy attempted to separate Taiwanese
from one another by emphasizing ethnic differences and slight differences of
opinion about the proper relationship between Taiwan and mainland China,
and then persuading about half of each of the artificial subgroups to vote
for him.7
Influential dissent is one measure of democracy, making the July 2003
demonstrations in Hong Kong particularly noteworthy. The demonstrations
succeeded in getting the security law withdrawn from consideration and
caused the resignation and replacement of two top government officials.8
5 Chen Shiyao, ``Taiwan `du' deqilai ma?'' [Will Taiwan's ``Independence'' Be Realized?]
Shijie zhoukan, Nov. 2-8, 1997; Jonathan Moore, ``Prosperity is a Double-edged Sword,''
BusinessWeek, Sept. 15, 1997.
6 E.g., Li Xiaofeng, ed., Taiwan, wode xuanze! Guojia rentong de juanzhe [Taiwan, My
Choice! The Complications of National Identity] (Taibei: Zhushan she chuban, 1995), pp. 148-
52.
7 Edward I-hsin Chen, ``The Impact of Democratic Politics on ROC's Crisis Decision-Making
Before Presidential Elections'' (Conference paper, Sept. 18-19, 2003, University of
Pennsylvania, Philadelphia), pp. 5-7 (``[I]f [Lee] did not divide the traditional provincial votes
into new categories and attract more votes from each of them and even from the Traditional
DPP supporters, he would have lost his re-election bid.'').
8 Kahn, ``2 Key Hong Kong Posts.''
LEE
278 | Orbis
Before that, the impact of protests in Hong Kong was less measurable, but the
size of the dissent registered gradually larger beginning in 1989. Smaller
groups had gathered in Victoria Park to commemorate anniversaries of the
violence in Tiananmen Square, implicitly criticizing the PRC government for
its handling of that demonstration. Other gatherings in 1997 and 1998
protested various changes in Hong Kong's government after the handover to
the PRC.9
Authoritarian Moves Emphasize Union Among and Within Units.
Democracy opponents within greater China similarly link potential moves
toward democracy, such as the freedom of assembly and exercise of religion,
with separation among local units. Beijing seems to see local variety in
worship as a threat to the unity of the realm, judging by its propaganda on
Tibet and Xinjiang and the religious populations native to those regions, as
well as by its handling of Falungong and Christian worship services held in
China. Similarly, local elections could cut the locality loose from the unified
communication and command network of the government and the Chinese
Communist Party.
Beijing portrays the separation of localities, both from one another
and from the central administration, negatively, as leading to ``chaos'' or
``rebellion.'' Conversely, it portrays the centralization of control over
mainland territories or greater China as ``unification'' and fostering ``stability''
and associates it with ``patriotism,'' ``loyalty,'' ``local economic prosperity,''
and even with sentiments like ``love.''10
Beijing has worked hard behind-the-scenes to centralize and stymie
budding democratic processes within greater China. It pressured British
diplomats in the 1980s to ignore, and even to circumvent and reshape, public
opinion in Hong Kong when working out the logistics of how Hong Kong
would be transferred to Chinese sovereignty. This pressure continued
unabated even when it shifted from British negotiators to Hong Kong
negotiators in the later stages of the transition toward 1997.11
The Winner-Take-All Principle
Yan Jiaqi and other PRC scholars portray federalism as concurrent or
compatible with democracy. They do not, however, spell out the precise
relationship between the two, because for them, federalism is virtually
9 Stella Lee, ``Complaint Lodged Over Blast of Beethoven,'' South China Morning Post, July
12, 1997; Stella Lee, ``Extended Bail for Protesters,'' South China Morning Post, Aug. 29, 1997.
10 See Tahirih V. Lee, ``The Media and the Legal Bureaucracy of the People's Republic of
China,'' in Chin-Chuan Lee, ed., Power, Money, and Media: Communication Patterns and
Bureaucratic Control in Cultural China (Evanston, Ill.: Northwestern University Press, 2000),
pp. 208, 224-28; Mark Roberti, The Fall of Hong Kong: China's Triumph and Britain's Betrayal
(New York: John Wiley & Sons, 1994, 1996), p. 192.
11 Mark Roberti, The Fall of Hong Kong.
Federalism
Spring 2004 | 279
synonymous with democracy. It is also a codeword for democracy. Scholars
in the PRC endanger themselves if they discuss proposals for democratizing
China, and so use proxy words.12
If federalism means unification, however, visions of federalism put
forward by Yan and others may not spell democracy. The type of federations
that join previously separate units unleash anti-democratic forces within
those areas. If, however, federalism means decentralization, then federalism
indeed has a direct relationship with democracy.
On the whole, these scholars' visions are of a federation that
decentralizes government within the PRC. Yan also includes Taiwan and Hong
Kong in his blueprint, which calls for centralizing the government of greater
China, but this portion of his plan is less important than the part that sets out
the relationship among the provincial governments of the PRC and between
them and the center. The federalist frameworks that are discussed in
mainland China promote a push toward the decentralization of law-making
authority and the full gamut of economic decisions, ranging from what loans
banks make to what goods factories will produce and to which countries
Chinese goods will be exported.13
Not all proposals for federal-type structures in greater China
emphasize decentralization, however. In Taiwan and Hong Kong, the
one-country, two-systems framework offered by the PRC and all the variations
thereon that are discussed unofficially--including those with the names
``federation'' or ``confederation''--provide a means to become part of a larger
centralizing structure.
Many citizens of Hong Kong and Taiwan view these centralizing
federal structures as jeopardizing democracy. Indeed, Beijing offers these
structures as a way of bringing Taiwan and Hong Kong into greater political
12 See e.g. Yan Jiaqi, Lianbang Zhongguo gouxiang [A conception of a federal China] (Hong
Kong: Mingbao chubanshe, 1992), esp. p. 123; Zheng Yongnian and Wu Guoguang, ``Tanpan
jizhi yu `xingweixing lianbang''' [Bargaining and the formation of ``behavioral federalism''],
Dangdai Zhongguo yanjiu, 1994, pp. 26, 32-37; Yongnian and Guoguang, `` `Chanquan difang
hua': Yilun zhongyang yu difang de jingji guanxi'' [Property rights localization: A discussion of
central and local economic relations], Dangdai Zhongguo yanjiu, 1994, pp. 39-51; Wang
Shaoguang, ``Fenquan de dixian,'' [The bottom line of the division of powers], Dangdai
Zhongguo yanjiu, nos. 1 and 2 (1995), pp. 39-68; Zhang Zin, ``Lunyi lianbangzhi xianfa zuowei
Zhongguo tongyi de falu tiaojian,'' [Discussing the legal provisions of a constitutional federal
system for a united China], Zhongguo xianzheng yanjiu tongxun, June 1994, p. 2; and Dali
Yang, ``The Politics of Fiscal Rationalization and Its Implications for Central Local Relations in
China'' (paper given at the ABA Section on International Law and Practice annual spring
meeting, Mar. 31, 1994), p. 17.
13 In addition to those cited above, other discussions of federalism as a way to decentralize
mainland China include Sen Lin, ``A New Pattern of Decentralization in China: The increase of
Provincial Powers in Economic Legislation,'' China Information, Winter 1992-93, pp. 27-33;
and Wang Xi, ``Cong Meiguo lianbangzhi de fazhan kan Zhongguo de fenquan wenti''
[Looking at the problem of division of powers in China from the development of the United
States federal system], Dangdai Zhongguo yanjiu, nos. 1 and 2 (1995), pp. 168-69, 191-93.
LEE
280 | Orbis
and legal alignment with the PRC. This necessarily calls for some degree of
harmonization of the legal systems. While all the participating entities may
exert some pull in the transformation, arriving at some meeting in the middle
of the great divide, Taiwanese consider it more likely that the PRC--with its
overwhelmingly larger population and political might and greater need of
wealth to shore up its sagging industrial sector and social welfare system--
would exert the greater pull. Just as it has been in the PRC before, where the
leadership argues that democracy is a luxury affordable only by wealthy
nations, democracy in the Taiwan SAR would be sacrificed in the name of the
economic needs of hundreds of millions of new compatriots.
Apart from a general pressure toward lopsided harmonization is the
fact that the moment Hong Kong became a part of the PRC, it became less
democratic. Hong Kong's new constitution, which came into effect at
midnight of June 30, 1997, cut back the franchise for legislative elections
from 2.7 million to about 400. The government of Hong Kong also
immediately set about curtailing the franchise in elections of district urban
councils, which were created in the early 1980s to involve Hong Kong
citizens in the improvement of their neighborhoods. Less than three years
later, the Hong Kong SAR administration circumvented Hong Kong's new
constitutional procedures. It sought to convince Beijing to overturn the
HKSAR Court of Final Appeal's 1999 decision in Ng Ka Ling, Ng Tan Tan v.
Director of Immigration and two other cases consolidated with it, a
decision that had opened the floodgates to citizens of mainland China to
emigrate to Hong Kong.14
Why should a decentralizing structure promote democracy and a
unifying structure inhibit it? It is because of what I call the winner-take-all
nature of unification. If an entity is unified, it is more likely to be taken over,
more acquirable, than if it is splintered. It is easier to negotiate with one entity
than with many. It is easier to persuade one mind than many. Thus, discord
leads to or preserves not centralized (in the form of a takeover by an outside
power) but decentralized authority.
Take, for example, the case of Hong Kong's reversion to mainland
China in 1997. In the few years leading up to that constitutional event, Hong
Kong's government centralized. Local government became more focused on
winning the support of the wealthiest. Business elites and government
officials cooperated as never before, even to the point of subverting
governmental formalities and bureaucratic practices. One week before the
reversion, reports surfaced that soon-to-be Chief Executive Tung's close
business associates from his career as a shipping magnate enjoyed more
access to him than did chief secretary Anson Chan. Newspaper reports
accused Tung and his new Secretary of Justice, Elsie Leung, of putting their
personal secretaries from their private sector firms directly into government
14 2 HKCFAR 141 (HKSAR Court of Final Appeal, Jan. 29, 1999); Lee Interview.
Federalism
Spring 2004 | 281
posts. In its first week the new government also moved to freeze pro-union
labor laws enacted on the eve of the reversion, and six weeks later it
scrapped the two of those laws that most threatened big business, namely
those that introduced collective bargaining and protected workers from
termination for union activities.15
Dissent among the professions and the ranks of large companies was
quelled by signals sent by their respective leaders. Shortly before and after
Hong Kong's reversion, the heads of several local universities and university
departments indicated in various ways to their faculties that criticism of the
PRC or the new government of the Hong Kong SAR would be frowned upon.
The new head of a local bar association used language reminiscent of the
Chinese Communist Party to emphasize to the members of the association the
importance of presenting a positive and unified face to the public. Principal
officers of Hong Kong's new government encouraged such self-censorship.16
Recent Taiwanese presidential elections are an example of the
converse of the winner-take-all nature of unification, namely the divide-andstay-
locally-autonomous nature of decentralization. What at first glance
looked like politicians attempting to rally their electorate around an anti-PRC
stance was, in fact, a concerted effort to divide public opinion. During
periods when there was no campaigning, 80 percent of the public preferred
the status quo, a return to internal unification.17
The interplay between the legislature and the president of Taiwan
illustrates how local disunity makes takeover by outsiders more difficult
because it slows change, including the changes necessary to reorient the
locality toward the outsider. Scholar Yuan-kang Wang has concluded that
freeing the legislature from the control of the Taiwan executive results in
``gridlock'' and ``deadlock.''18 Taiwan may yet join the PRC, but for the
moment, it is doing an effective job of staying outside of it, and its promotion
of democratic elections within it borders is helping with its effort to stay
independent.
A locality unifies with another territory either by negotiating with an
outside power or by willingly surrendering to an outside power that it
admires or views as advantageous. Local unity facilitates the process of
inviting in outsiders because this invitation is a local decision and such unity
15 See South China Morning Post, July 12-19, July 26, and Aug. 22, 1997.
16 The Provisional Legislature's president, Rita Fan condemned the counsel for the PRC
citizens seeking to emigrate to Hong Kong by saying that paying them out of public funds was
a ``waste of money.'' Other members of the legislature voiced their disapproval of any kind of
public criticism of the legislature. Michael Davis, ``Threat to Integrity,'' South China Morning
Post, July 20, 1997; May Sin-Mi Hon, ``HK Ruling on Children `Vital for Autonomy,''' South
China Morning Post, July 18, 1997.
17 See Chen, ``The Impact of Democratic Politics,'' p. 5.
18 Yuan-kang Wang, ``Taiwan's Democratization and Cross-Strait Security'' (paper presented
to the Sino-American Conference on Contemporary Chinese Affairs, Philadelphia, Sept. 18-19,
2003), p. 11.
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282 | Orbis
facilitates the local community's decision-making process. ``Divide and
conquer'' flies in the face of this idea, and it is mistaken to use it to explain
what is happening in greater China today, or even to describe any
process of unifying territories, whether or not in the guise of a
federation. In this case, division creates strength, not weakness.
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The Implications of Missile Defense for
Northeast Asia
by Amy L. Freedman and Robert C. Gray
Amy L. Freedman (amy.freedman@fandm.edu) is assistant professor of government and
Robert C. Gray (robert.gray@fandm.edu) is professor of government at Franklin and Marshall
College. They thank Michael DeGrande for his research assistance.
Congress and the Bush administration are committed to building a
defense against ballistic missiles. The current U.S. plan calls for
fielding ground-based interceptor missiles in Alaska and California,
with the first ten missiles scheduled to be operational in October 2004. These
will be used to conduct research and development testing, although the
administration maintains that they will have some capability to intercept
missiles launched from North Korea. Work will also continue on ship-based
interceptor missiles and other systems. With the planned fall deployment,
missile defense is certain to be an issue in this year's presidential election,
although the Democrats' candidate is more likely to criticize the specifics of
the Bush administration's plan than the wisdom of building some type of
defense.
This article assesses the implications of U.S. ballistic missile defense
for security relations in Northeast Asia. While relations among the great
powers in Europe have become more cooperative and institutionalized over
the last forty years, relations in Asia are still marked by territorial disputes
involving the Koreas, Taiwan, China, Vietnam, Brunei, the Philippines,
Malaysia, and Japan; an unclear distribution of power; and potentially
disruptive power ambitions by major actors. The United States is a significant
player in the region, but U.S. interests and commitments often seem difficult
for Asian countries to perceive accurately. This is especially true with
Washington's decision to move forward with missile defense.
The near-term missile defense programs announced by the Bush
administration in December 2002 are prudent, but they create the potential
for an inadvertent offensive-defensive arms race with China and/or a Chinese
perception of a window of opportunity in which to coerce Taiwan before
missile defense is operational. To reduce the probability of these outcomes,
2004 Published by Elsevier Limited on behalf of Foreign Policy Research Institute.
Spring 2004 | 335
we recommend that the United States incorporate the maximum possible
amount of transparency into its pursuit of missile defense.
The Evolution of American Missile Defense
Since the American search for a defense against ballistic missiles
began in the late 1940s, there have been three rounds of public debate. The
first, focused on the Sentinel-Safeguard system, ended with the Anti-Ballistic
Missile Treaty of 1972. Missile defense then disappeared as a political issue
until 1983, when President Ronald Reagan proposed the Strategic Defense
Initiative. The vigorous debate about SDI ended when the Soviet Union
collapsed, taking with it the rationale for the system.1
Research and development efforts on missile defense continued in
the Bush Sr. and Clinton administrations. Especially during the Clinton years,
U.S. programs were reoriented from defending the United States toward
theater missile defense (TMD)--defending U.S. troops overseas. Given the
Iraqi use of SCUD missiles against American forces during the 1991 Gulf War,
developing such a defense was uncontroversial, and the missile defense issue
again largely receded from public view.
This began to change in 1995, when the National Intelligence
Estimate concluded that it was unlikely the United States would face such a
threat in the next fifteen years. A skeptical Congress created the Commission
to Assess the Ballistic Missile Threat to the United States, chaired by Donald
Rumsfeld. Reporting in July 1998, the Commission concluded that the threat
was much greater than that forecast by the NIE. In July 1998, it reported that
North Korea and Iran ``would be able to inflict major destruction on the U.S.
within about five years of a decision to acquire such a capability.'' Moreover,
``during several of those years, the U.S. might not be aware that such a
decision had been made.'' That month, Iran tested its medium-range Shahab-
3 missile, and in August North Korea tested its Taepo Dong missile. Missile
defense was back on Washington's agenda.
The 1999 NIE projected that ``during the next 15 years the United
States most likely will face ICBM threats from Russia, China, North Korea,
probably from Iran, and possibly from Iraq.'' Reflecting the heightened sense
of a ballistic missile threat, Congress passed the Missile Defense Act of 1999,
calling on the United States ``to deploy as soon as is technologically possible
an effective National Missile Defense system capable of defending the
1 David N. Schwartz, ``Past and Present: The Historical Legacy,'' in Ashton B. Carter and
David N. Schwartz, eds., Ballistic Missile Defense (Washington, D.C.: Brookings Institution,
1984); John Newhouse, Cold Dawn: The Story of SALT (New York: Holt, Rinehart and Winston,
1973); Robert Joseph, ``The Changing Political-Military Environment,'' in James J. Wirtz and
Jeffrey A. Larsen, eds., Rocket's Red Glare: Missile Defenses and the Future of World Politics
(Boulder: Westview Press, 2001); Donald R. Baucom, ``Ballistic Missile Defense: A Brief
History'' (Ballistic Missile Defense Organization, May 2000).
FREEDMAN AND GRAY
336 | Orbis
territory of the United States against limited ballistic missile attack.'' Research
and development intensified over the remainder of the Clinton administration,
with the objective of deploying ground-based missiles to intercept a
small number of ICBMs. In September 2000, however, President Clinton
decided that the time was not right to make a decision to deploy.2
Candidate George W. Bush pledged in the 2000 presidential campaign
to pursue missile defense. In late 2001 President Bush's administration gave the
six months' notice required to abrogate the ABM Treaty, and in June 2002 the
constraints imposed by that treaty on the development and testing of missile
defense systems disappeared. The administration also changed the defense
acquisition process for missile defense in order to expedite the development,
testing, and deployment of missile defense.
The current controversy is similar to the missile defense debates of
the past in many respects.3 As in the past, believers and skeptics offer
contrasting assessments of the technical feasibility of missile defense. The
cost/benefit calculations for missile defense systems, which will consume
tens of billions of dollars while leaving the United States vulnerable to nuclear
or biological attack by other means, are also the subject of disagreement.
Many analysts are concerned about vertical proliferation. If the United States
deploys missile defense, other countries will undoubtedly respond, and one
option would be the deployment by other countries of additional missiles
and warheads. Finally, in this debate as in previous ones, the potential
diplomatic costs remain a concern.
Despite these similarities, the environment of this third missile
defense debate differs in important ways from that of previous rounds.
During the Cold War, missile defense opponents argued that active defenses
would undermine the strategic balance and might even provide incentives in
a crisis for one side to strike first. This was a powerful argument at a time
when uncontained crises might have led to the detonation of thousands of
warheads in the United States and the Soviet Union. Although it is still the
case that Russia is the only country that could annihilate the United States,
relations between the two are sufficiently improved that the crisis-stability
argument has little force in the U.S.-Russian context. Also, unlike the SDI,
current plans do not involve deploying a defense against the entire Russian
2 National Intelligence Council, ``Foreign Missile Developments and the Ballistic Missile Threat
to the United States Through 2015 (Sept. 1999)''; Public Law 106-38; ``National Missile Defense
Act of 1999,'' July 22, 1999; Joseph Cirincione, ``Assessing the Assessment: The 1999 National
Intelligence Estimate of the Ballistic Missile Threat,'' Nonproliferation Review, Spring 2000.
3 For arguments in favor of missile defense, see James M. Lindsay and Michael E. O'Hanlon,
Defending America: The Case for Limited National Missile Defense (Washington: Brookings
Institution Press, 2001), and Keith B. Payne, ``The Case for National Missile Defense,'' Orbis,
Spring 2000. For arguments against, see Steven E. Miller, ``The Flawed Case for Missile
Defense,'' Survival, Autumn 2001, and Craig Eisendrath, Melvin A. Goodman, and Gerald E.
Marsh, The Phantom Defense: America's Pursuit of the Star Wars Illusion (Westport, Conn.:
Praeger, 2001).
Missile Defense
Spring 2004 | 337
ICBM force. The main focus is on North Korea and Iran. Moreover, advances
in computers, micro-miniaturization, and related technologies make the
missile defense advocates' arguments seem more plausible than they did in
the 1960s and 1980s, especially against a limited threat.4
Iran has neither nuclear weapons nor missiles capable of striking the
United States. North Korea may have nuclear weapons and has tested a
missile that might eventually have sufficient range to attack targets in North
America. It is this possible threat from North Korea that has accelerated
American missile defense efforts.
In October 2002, Assistant Secretary of State James Kelly confronted
North Korea with knowledge that it had been covertly enriching uranium for
nuclear weapon production, thus violating the Agreed Framework signed in
1994. North Korea promised under the Framework to halt nuclear weapons
development in exchange for oil shipments and help in building light-water
reactors for power generation. In January 2003, North Korea withdrew from
the Nuclear Nonproliferation Treaty, and that summer North Korean officials
claimed that enough spent nuclear rods had been reprocessed to construct
six nuclear weapons and that they ``intended to move ahead quickly to turn
the material into weapons.''5
In addition to an active nuclear weapons program, North Korea has a
substantial capability to deliver WMD, including hundreds of No Dong and
SCUD missiles, to targets in the region. In 1998 North Korea flight tested the
Taepo Dong 1 over Japan. Some reports conclude that with an additional
stage, a Taepo Dong 2 could hit targets in the United States. In exchange for
increased food aid, North Korea agreed not to continue tests of the Taepo
Dong, but in March 2003 North Korea suggested that it might end its flight
moratorium. Consequently, North Korea is largely responsible for the revival
of serious American programs for missile defense.
Types of Missile Defense
Three important definitional categories are used in discussing ballistic
missiles and defenses against them. The first describes the range of the
missile: short-range (less than 1,000 km), medium-range (1,000 to 3,000 km),
4 National Intelligence Council, ``Foreign Missile Developments and the Ballistic Missile Threat
Through 2015,'' Dec. 2001. For a comprehensive review of possible missile defense systems, see
Steven A. Hildreth and Amy F. Woolf, ``Missile Defense: The Current Debate,'' Congressional
Research Service Report RL 31111, updated periodically. The Feb. 5, 2003 version is used here.
5 Seth Mydans, ``Threats and Responses: Nuclear Standoff North Korea Says it is Withdrawing
From Arms Treaty,'' New York Times, Jan. 10, 2003; Murray Hiebert, ``North Korea--Two Steps
Forward,'' Far Eastern Economic Review, Jan. 16, 2003, p. 20; and David E. Sanger, ``North Korea
Says It Has Made Fuel for Atom Bombs,'' New York Times, July 15, 2003. For a comprehensive
account of recent developments, see Jonathan D. Pollack, ``The United States, North Korea, and
the End of the Agreed Framework,'' Naval War College Review, Summer 2003.
FREEDMAN AND GRAY
338 | Orbis
intermediate-range (3,000 to 5,500 km), and intercontinental (ICBM), with a
range of more than 5,500 km.
The second marks the three distinct phases of a ballistic missile's flight
path. The boost phase refers to the first few minutes after a missile is
launched, during which it is powered by its engines. Once the missile is in a
ballistic trajectory, the engines stop and the midcourse phase begins. During
this phase, which can last as long as twenty minutes for an ICBM, the warhead
separates from the missile. The final phase is the shortest, lasting less than a
minute. In this terminal phase the warhead reenters the atmosphere and
streaks toward its target.6
Third, missiles are characterized according to the intent of those who
wish to intercept them. TMD programs, for example, are designed to protect
American forces and allies overseas. The goal of the Clinton administration's
national missile defense (NMD) program was to defend U.S. territory. Because
these terms depend on intent, they can be confusing. Some U.S. systems
being developed for the Middle East, for example, would provide TMD for
U.S. forces in the region but national missile defense for Israel. The Bush
administration has abandoned use of the TMD/NMD dichotomy, although
much of the literature still uses the distinction.
The Bush administration now presents the possible components of a
missile defense system simply as functions of the three phases of the ballistic
trajectory: terminal, midcourse, and boost.
Terminal Defense. The Patriot PAC-3, designed to intercept incoming
aircraft, cruise missiles, or short- and medium-range ballistic missiles, is a
ground-based terminal system that is considered lower-tier because it engages
an enemy missile within the atmosphere. As with all U.S. missile defense
systems currently under development, the interceptor collides with the enemy
missile rather than detonating an explosion in its path. This is called ``hit-to-kill''
or ``kinetic kill.''7 The PAC-3 is the only missile defense system that is currently
deployed. In the 2003 Gulf War, it was used to intercept Iraqi missiles, but a
complete analysis of its effectiveness is not yet available.
The second ground-based system, the Theater High-Altitude Area
Defense system (THAAD), was designed to intercept short-, medium-, and
intermediate-range missiles at a higher altitude than the PAC-3 and is
considered an upper-tier system. It engages the enemy missile as it reenters
the atmosphere (at the end of the midcourse phase) and so is capable of
defending a wider area than PAC-3.8 Flight testing of this truck-mounted,
mobile missile will resume at the end of 2004.
6 Arms Control Association, ``U.S. Missile Defense Programs At a Glance,'' www.armscontrol.
org
7 The Israeli Arrow-2 uses a blast fragmentation warhead. Although this was developed in a
joint program with the U.S., the United States is not using that approach.
8 CRS, ``Missile Defense,'' pp. 44-45. A description of missile defense programs can be
found at the Missile Defense Agency website, www.acq.osd.mil.
Missile Defense
Spring 2004 | 339
Ground-based Midcourse Defense. When the Bush administration
announced its missile defense plans for the immediate future in December
2002, the focus was on ground- and sea-based interceptors.9 The Ground-
Based Midcourse Defense system is designed to intercept long-range ballistic
missiles. The immediate objective is to intercept missiles launched from North
Korea at the United States. The administration plans to field 20 interceptor
missiles in 2004-05. Sixteen of them will be at Ft. Greeley, Alaska and four at
Vandenberg Air Force Base, California. These interceptors will obtain the
warning and tracking information necessary to guide the kill vehicle to the
incoming warhead from several types of sensors: existing Defense Support
Satellites, upgraded early-warning radars in Alaska and elsewhere, and a new
sea-based X-Band radar. The new systems will be part of the Pacific Missile
Defense Test Bed, although the administration plans to use the interceptor
missiles in both test and operational roles.10 In the latter, the interceptors are
supposed to provide an interim capability against ICBMs until more mature
systems are available.
Sea-based Midcourse Defense. The Bush administration plans to field
a sea-based system in 2004-06. To be placed on destroyers and cruisers with
the Aegis air-defense system, the interceptor missiles would be guided to
their targets by improved Aegis radars. The Aegis ballistic-missile defense
system is intended to intercept medium-range missiles as they are ascending,
initially using modified SPY-1 radars and the SM-3 missile. The components of
this program were originally designed to intercept short- and intermediaterange
missiles, but the administration hopes to adapt it for use against ICBMs
in the future.11
Boost-Phase Defense. Although there are preliminary programs for
space- and sea-based boost-phase systems, the only clearly defined one in
development at this time is the Air-Based Boost program, which places an
Airborne Laser on a Boeing 747. Originally designed to intercept theater
ballistic missiles in their first few minutes of flight, this system may be
adapted to target ICBMs as well.12 The Missile Defense Agency hopes to have
``an initial emergency capability'' as soon as 2005, but a recent report by the
9 ``Missile Defense Deployment Announcement Briefing,'' Dec. 17, 2002, available at
www.defenselink.mil.
10 As Undersecretary of Defense E. C. Aldridge described it, ``We are talking about the
construction of a test bed . . . which will be augmented with some limited operational
capability.'' Some senators expressed concern about the plan to deploy a system that has not
been fully tested. In fact, a booster rocket for the ground-based system has not yet been
chosen. See Senate Armed Services Committee Hearing, Mar. 18, 2003 (GPO). The Pentagon's
Director of Operational Test and Evaluation, Thomas P. Christie, has conceded that the
ground-based system ``has not yet demonstrated operational capability'' because ``many
essential components of the ground-based midcourse defense have not yet been built.'' Ibid.,
p. 9.
11 Ibid., p. 38.
12 Federation of American Scientists, ``Airborne Laser,'' at www.fas.org.
FREEDMAN AND GRAY
340 | Orbis
American Physical Society questions the feasibility of boost-phase
technologies.13
Sensors and System Integration. The successful operation of all the
above systems depends on the ability to detect the launch of a hostile missile,
to track its course, and to guide missiles to the point of interception.14 To
increase the probability of destroying an incoming warhead, more than one
interceptor may be fired. But a hostile country would do everything possible
to defeat U.S. missile defense.
One obvious countermeasure, for example, involves placing decoys
along with the warhead on the missile.15 The warheads and decoys separate
from the missile in the midcourse phase, so if the missile is not destroyed in
the boost phase it becomes necessary to track a larger number of objects in
space. Discriminating between warheads and decoys is important because
the defending side does not want to waste its finite number of interceptors on
decoys. This task requires sophisticated sensors, and programs have been
designed to provide them. The main one of interest here is the Space
Tracking and Surveillance System.16
The necessity to integrate sensors with the various interceptors for all
three phases of a ballistic missile's flight adds great complexity to the layered
missile defense system to which the Bush administration is committed. It leads
some observers to question the feasibility of missile defense. For our purposes,
we assume that at least some defensive systems will be deployed. It is
impossible, however, to describe what the eventual system will look like,
because the missile defense program has been removed from the normal
weapons acquisition process. The spiral process that has been adopted gives
the administration considerable flexibility to pursue research and development
on all of the missile defense options described above. The director of the
Missile Defense Agency, Gen. Ronald Kadish, has argued that it is not possible
to describe the precise system to be built. As he put it, ``Five years ago, nobody
could have written a requirement for today's Internet and gotten it exactly
right.''17 We therefore illustrate here the range of possibilities the administration
may deploy in the next decade by discussing three levels of defense.
13 The report concluded that although boost-phase technologies might be useful against
liquid-fuelled ICBMs, those technologies would not work against solid-propellant ones.
Because intelligence reports estimate that North Korea and Iran could have solid-fueled
missiles within the same timeframe that boost-phase defenses could be deployed, the latter
``risk being obsolete when deployed.'' American Physical Society, ``Boost-Phase Intercept
Systems for National Missile Defense'' (July 2003), p. xxxv, at www.aps.org.
14 For a summary of the current state of American efforts to design an integrated system, see
Glenn W. Goodman, Jr., ``Focus on the Boost Phase: U.S. Layered Ballistic Missile-Defense
Plans Now Emphasize Early Intercepts,'' Armed Forces Journal, June 2003.
15 An adversary could also put more warheads on each missile, but that requires more
advanced technology than North Korea or Iran is likely to have in the next decade.
16 CRS, ``Missile Defense,'' p. 52.
17 House Armed Services Committee Hearing, Feb. 27, 2002.
Missile Defense
Spring 2004 | 341
Lower-Tier Missile Defense. The United States could provide PAC-3 for
its forces abroad and allies (e.g., South Korea, Japan, and Taiwan) while
taking no action to defend the United States. In light of the bipartisan support
for some form of defense of U.S. territory, this option is likely to be chosen
only if the other systems are demonstrable failures. This is the most
technologically conservative option in that PAC-3 is the only system that
currently exists.
Limited Layered Missile Defense. This option parallels the Bush
administration plan announced in December 2002: PAC-3 for lower-tier
terminal defense; the Aegis sea-based system for short-, medium-, and
intermediate-range missiles; and ground-based midcourse interceptors for
ICBMs. This would be designed initially to defend against North Korean
missiles and to provide eventual protection against Iran as well.
Extensive Layered Missile Defense. This option would include
everything above and also a sea-based midcourse system upgraded to
engage ICBMs, THAAD forward deployed to intercept missiles of intermediate
range, and perhaps boost-phase systems. This would be designed to defend
against North Korea and Iran and would also provide defense against
Chinese missiles including ICBMs. Depending on its size and design, the
system might also have a capability against some level of Russian attack.
Implications for Northeast Asia
South Korea. The most important near-term justification for U.S.
missile defense is the North Korean effort to develop ballistic missiles and
nuclear weapons. A casual observer might therefore assume that South Korea
would be a fervent supporter of an active defense against a WMD missile
attack. In fact, South Korea has been less interested in missile defense than
the United States, Japan, or Taiwan.
In security terms, South Korea faces a large threat from North Korean
conventional forces near the demilitarized zone. Seoul's proximity to the DMZ
means that it could be largely destroyed by attacks from Pyongyang's 11,500
artillery systems. This vulnerability to attack by existing artillery may reduce
the salience in South Korea of a future nuclear threat delivered by ballistic
missile.18
In addition, South Korean threat perceptions differ from those in
Japan and the United States. An Atlantic Council report based on November
2002 interviews in South Korea concluded that South Koreans do not believe
that Pyongyang has any ``serious plans for aggression.'' They view the
18 Taeho Kim, ``East Asian Reactions to U.S. Missile Defense: Torn Between Tacit Support
and Overt Opposition,'' in Andrew Scobell and Larry M. Wortzel, eds., China's Growing
Military Power: Perspectives on Security, Ballistic Missiles, and Conventional Capabilities
(Carlisle, Pa.: Strategic Studies Institute, U.S. Army War College, 2002), pp. 209-10.
FREEDMAN AND GRAY
342 | Orbis
objective of North Korean WMD/missile programs as giving the North ``some
means to threaten Japan and ultimately the United States, but not as a serious
increase in the threat to South Korea itself.''19
Finally, political dynamics in South Korea emphasize conciliation
with the North rather than constructing elaborate defenses. Its ``sunshine,'' or
``peace and prosperity,'' policy has caused serious tensions with the Bush
administration, and if the policy survives North Korea's current campaign of
saber-rattling, it is likely to perpetuate a climate in which substantial missile
defenses will be avoided.20
While the South Koreans seem unlikely to move toward the limited or
extensive layered systems described earlier, the nuclear boasts of North
Korea may be forcing movement on lower-tier defenses. South Korea should
have no problem with the U.S. deployment of PAC-3 missiles to defend U.S.
bases. Moreover, there are reports that South Korea wants to acquire its own
PAC-3 missiles, presumably to defend high-value political or military targets.
The ROK Ministry of Defense has proposed buying PAC-3, and a report to the
National Assembly argued that ``South Korea needs to secure anti-air defense
capabilities of its own to defend against possible North Korean missile
attack.''21
In light of these South Korean attitudes, it seems unlikely that the ROK
would participate in the Aegis sea-based system. If the United States pursues
boost-phase defense, however, it might seek ROK help, because South Korea
is a logical place to base some of the Airborne Laser planes and support
equipment.22
Japan. Japan's missile defense deliberations are motivated by three
areas of concern. The most immediate threat is from North Korea, whose No
Dong missiles are capable of striking Japan. A longer-range Taepo Dong-1
missile was flight tested over Japan in 1998. North Korea's recent claims about
its nuclear weapons programs have further exacerbated concerns about that
country.
A second area of concern is China. Japanese-Chinese animosity
stretches far back in history. The presence of U.S. forces in Japan means that a
Chinese-Taiwanese conflict in which the United States intervened might
19 Walter B. Slocombe, et al., ``Missile Defense in Asia,'' Atlantic Council of the United States,
June 2003, pp. 16-17.
20 Seongji Woo, ``South Korea's Search for a Unification Strategy,'' Orbis, Summer 2003,
pp. 511-25.
21 ``Seoul to Review Missile Defense System,'' Korea Times, June 19, 2003. This is consistent
with a 2001 statement by ROK Defense Minister Cho Seong-Tae: ``Over the long term, given
the current North Korean missile threat and future battle environment, we are reviewing to
construct a missile defense system suitable to our own [security] environment.'' Quoted in Kim,
``Asian Reactions,'' p. 211.
22 Michael J. Green and Toby F. Dalton, ``Asian Reactions To U.S. Missile Defense,'' National
Bureau of Asian Research Analysis, vol. 11, no. 3 (1999), p. 9.
Missile Defense
Spring 2004 | 343
involve Japan as well. Finally, Japan remains mindful of the possibility of a
unified Korea in possession of nuclear weapons.23
Japan and the United States agreed to pursue joint research and
development of sea-based BMD technologies in 1999. This was intended to be
a lower-tier system, and Japan was comfortable participating because of the
limited utility and range of the program.24 Pointing to ``a spread of missiles
and a rise in weapons of mass destruction,'' the Japanese cabinet in
December 2003 decided to deploy missile defense using elements of the
Aegis sea-based system (including the SM-3 missile) along with PAC-3.25
As it goes forward with missile defense, Japan will confront several
political and constitutional issues. One of the members of the Liberal
Democratic Party-led coalition currently in power is New Komeito, a
Buddhist party with pacifist leanings. The government will need to maintain
support for missile defense among its coalition parties, including New
Komeito. It will also need to decide where to place missile defense systems
within Japan's defense apparatus and to devise decision rules for authorization
to launch the missiles.26 Lastly, Japan may have to revisit the
constitution's prohibition against defending anything other than the home
islands. This prohibition has precluded participation in ``collective defense.''
An integral part of an operational missile defense system, however, is
cueing--``a battle management function coordinating information between
sensors, control locations, and launchers.''27 The Japanese Aegis system
would be dependant on some U.S. assets in order to function. Would this
constitute ``collective defense''? Couldn't missile defense be used to shoot
down missiles headed for an allied nation? These questions are bound to stir
up conflict within the government.28
The most serious question for Japan, eventually, will be participation
in an Aegis system that has been upgraded to intercept ICBMs, for that system
would make the Japanese partners in a missile defense system that has the
capability to negate the Chinese ICBM force. As the United States works with
Japan on Aegis missile defense, it needs to be sensitive to Japanese concerns
about the future growth of the system.
The missile defense decisions facing Japan must be viewed against
the larger background of U.S.-Japanese relations. Princeton's Gilbert Rozman
has argued that Japan's desire for somewhat greater independence from the
23 Slocombe, ``Missile Defense,'' p. 10, note 13.
24 Patrick M. O'Donogue, Theater Missile Defense in Japan: Implications for the U.S.-China-
Japan Strategic Relationship, Letort Papers, U.S. Army War College, Carlisle, Pa., Sept. 2000;
and Report to Congress on Theater Missile Defense Architecture Options for the Asia-Pacific
Region, U.S. Dept. of Defense, May 1999, at www.dod.gov.
25 ``Japan Go-Ahead on Missile Defense,'' CNN.com, Dec. 19, 2003.
26 Slocombe, ``Missile Defense,'' p. 11.
27 Green and Dalton, ``Asian Reactions,'' p. 5.
28 ``A Joint Research Project Won't Stop An Incoming Missile,'' Asahi Shimbun, June 6, 2003.
FREEDMAN AND GRAY
344 | Orbis
United States is rooted in the Japanese ``quest for national identity.''29 Japan
has been cooperative with the United States since 9/11 and is clearly sobered
by developments in North Korea. Two and a half years after 9/11, if the North
Korean crisis is somehow resolved, it is not clear how committed Japan is to
the long-term deployment of missile defense.
Taiwan. Of all the countries discussed here, Taiwan faces the most
immediate and serious dilemma about what, if any, role it should play in U.S.
plans for missile defense. Taiwan might gain the most from the development
of a system that could protect it from Chinese missiles. But if China perceives
a prospective Taiwanese missile defense as providing sufficient protection to
permit it to move toward greater autonomy, missile defense might provoke a
military confrontation.
The Atlantic Council report suggests that there are two main
Taiwanese views about the feasibility and desirability of missile defense.
The first is that although the 400 Chinese missiles in Fujian, opposite Taiwan,
are a genuine threat, missile defense ``would not give a military security
benefit commensurate with the political costs of the confrontation with the
PRC that a decision to proceed . . . would entail.'' The advocates of this view
are also concerned that the cost of missile defense would prevent Taiwan
from investing in other military capabilities more urgently needed for the next
decade. The second view accepts much of the first but argues that the
``psychological and morale benefits'' of a defense justify having it. To avoid
the provocation of buying an American system, advocates of this view
suggest that Taiwan could instead accept American assistance in building an
indigenous system.30 Despite this debate, at the level of partisan politics
neither the Democratic Progressive Party nor the Kuomintang can afford to
ignore Chinese military threats.31 Thus, missile defense is likely to remain an
active political issue.
Taiwan already possesses upgraded PAC-2 missiles and is moving
toward buying PAC-3. It has expressed interest in buying Arleigh Burke-class
destroyers with the Aegis missile defense system, although the United States
has not yet agreed to the sale. If the United States did provide sea-based
defenses, the Chinese reaction might be severe. The presence of U.S.-
provided interceptor missiles in the waters around Taiwan would reduce the
punitive threat posed by the missiles in Fujian and, in the Chinese view,
might increase the Taiwanese willingness to assert its independence.32 In
addition, the web of electronic relationships required for the Aegis system to
29 Gilbert Rozman, ``Japan's North Korea Initiative and U.S.-Japanese Relations,'' Orbis,
Summer 2003.
30 Slocombe, ``Missile Defense,'' pp. 21-22.
31 Adam Segal, ``East Asian Responses to Theater Missile Defense,'' in Matthew Evangelista
and Judith Reppy, eds., The United States and Asian Security (Ithaca, N.Y.: Cornell University
Peace Studies Program, Occasional Paper #26, May 2002), pp. 119-20.
32 Kim, ``Asian Reactions,'' pp. 207-8.
Missile Defense
Spring 2004 | 345
work might raise in the mind of Chinese leaders the specter of a Taiwan-
Japan-U.S. alliance, thereby worsening diplomatic relations in the region or
even precipitating a crisis.33
Much of the U.S.-Taiwanese relationship rests on reciprocal issues of
credibility. Taiwan feels more secure by forging ties that demonstrate greater
American support for its defense. It wants to increase the credibility of the
American commitment in the minds of Chinese leaders. For the United States,
credibility matters too: in the event of an attack, a failure to aid Taiwan ``would
be seen all over Asia as a lack of American resolve and would damage, and
possibly destroy, the United States as a power in the Western Pacific.''34
China. The most important implications of the U.S. decision to deploy
missile defense relate to China, which is America's fourth largest trading
partner but is also viewed as a possible geopolitical rival in the decades
ahead. While Washington does not mention Chinese missiles as a justification
for missile defense, some private analysts do.35
Although the Bush administration no longer distinguishes between
defense of the United States (NMD) and of allies (TMD), the Chinese find the
distinction helpful. The attitude of Chinese officials toward the U.S. NMD
effort is ``one of studied indifference and even scorn.'' The project is
viewed as more of ``a waste of U.S. effort than it is a great problem for
China.''36 While diminishing the significance of NMD on the one hand,
some Chinese officials also believe that an NMD of 100 interceptors would
undermine the Chinese nuclear deterrent. One report characterizes the
majority view among Chinese officials as advocating a moderate, threepronged
response to missile defense: (1) increase the total number of
warheads deployed to a level just beyond the saturation point; (2) develop
MIRVs (multiple independently targetable reentry vehicles that can overwhelm
missile defense); and (3) pursue other effective countermeasures to
defeat the U.S. system. Perhaps the most interesting Chinese reaction to
U.S. plans is the idea that missile defense is ``a trick to convince China
to spend more money on defense, thereby causing the growing economy
to collapse.'' Those Chinese who believe this are determined to avoid the
``overreaction to [Star Wars] which contributed to the downfall of the
U.S.S.R.''37
33 See, e.g., Thomas J. Christensen's conclusion that ``Taiwan's potential inclusion in the
future upper-tier system could contribute to Beijing's sense that it is facing a closing window of
vulnerability or opportunity to settle the Taiwan problem before it becomes more intractable.''
``Posing Problems without Catching Up: China's Rise and Challenges for U.S. Security Policy,''
International Security, Spring 2001, p. 38.
34 Richard Halloran, ``Taiwan,'' Parameters, Spring 2003, p. 33.
35 Larry M. Wortzel, testimony before Senate Foreign Relations Committee, Mar. 19, 2003.
36 Slocombe, ``Missile Defense,'' p. 24.
37 Joanne Tomkins, ``How U.S. Strategic Policy Is Changing China's Nuclear Plans,'' Arms
Control Today, Jan./Feb. 2003, p. 3.
FREEDMAN AND GRAY
346 | Orbis
While Chinese views of U.S. efforts to defend its homeland are mixed
and even muted, those reactions are stronger and clearer on the prospect of
missile defenses in Northeast Asia. Not surprisingly, China vigorously
opposes extending missile defense to Taiwan and expresses grave concerns
about Japanese participation in missile defense.38
Chinese Concerns About Taiwan. Although Taiwan has already
received defense technology (e.g., PAC-2 and advanced radar equipment)
from the United States, China would like to prevent further missile defense
systems from including Taiwan. Beijing argues that its missiles in Fujian are
``only for deterrence of a Taiwan move toward autonomy, not for use as
weapons.''39 Thus the Chinese argue that missile defense for Taiwan is
unjustified.
The United States would risk China's anger if it sells PAC-3 to Taiwan
or brings Taiwan under the protection of the Aegis program now under
development. Some argue that Chinese military capabilities would be able to
overwhelm a lower-tier system on Taiwan, or one that includes Taiwan in the
footprint,40 while others deem Chinese forces to be so small that they would
be seriously impacted by any missile defense system that would intercept
even some of their missiles.41 Either way, China would certainly oppose a
U.S. decision to extend even lower-tiered systems to Taiwan, both because it
would signal increased military ties between the United States and Taiwan
and because Taiwan's government would ``reap political benefits from TMD
deployment.''42
Taiwan's possession of PAC-3 would not alter the current deterrence
equation. The United States would feel some hesitation to fully support
Taiwan should it ``provoke'' China into attacking and, in turn, China would be
dissuaded from attacking Taiwan both by Taiwan's own military capabilities
and by China's uncertainty as to how vigorously the United States would
defend Taiwan.
Chinese reactions might be much stronger if Taiwan acquires the
Aegis sea-based system, however. China might view this option as a serious
threat undermining its position toward Taiwan. If provocation by Taiwan
occurred between the decision to deploy such a program and its operability,
then China might see a window of opportunity to coerce Taiwan before the
38 ``China Slams Missile-Defense Plans,'' Japan Times, Sept. 4, 2003.
39 Eric A. McVadon, ``Chinese Reactions to New U.S. Initiatives on Missile Defense,'' in
Andrew Scobell and Larry M. Wortzel, eds., China's Growing Military Power: Perspectives on
Security, Ballistic Missiles, and Conventional Capabilities (Carlisle, Pa: Strategic Studies
Institute, U.S. Army War College, 2002), p. 186.
40 Stanley Foundation and Monterey Institute of International Studies, Ballistic Missile
Defense and Northeast Asia (2001), p. 6.
41 Alastair Iain Johnston, ``A Compendium of Potential Chinese Responses to U.S. Ballistic
Missile Defense,'' written transcript of prepared remarks for a conference on Chinese military
capability at Stanford University, Mar. 3, 2000.
42 Ballistic Missile Defense and Northeast Asia (2001), p. 6.
Missile Defense
Spring 2004 | 347
system was ready. China's temptations to coerce might be further enhanced if
the Taiwanese provocation occurred before U.S. deployment of ground- and
sea-based systems to protect the American homeland. Under this scenario,
the Chinese would hope that the United States would remain on the sidelines
of a conflict with Taiwan due to the deterrent power of China's small ICBM
force.
Chinese Concerns About Japan. Beijing is strongly opposed to Japan's
possession of the Aegis missile defense system, by which Japan ``would be
interlinked with the United States and Taiwan to form a regional ballistic
missile defense system, directed not at North Korea or other `rogue states', but
at China.''43 It is also concerned that U.S. assistance to Japan's missile defense
program will transfer knowledge that will expedite Japan's capability to build
its own ballistic missiles.44
Beijing's possible reactions to limited, layered missile defense could
also have serious consequences for regional security due to the triangular
relations between the United States, Japan, and China. While Japan has
cooperated with the United States in research and development on Aegis
missile defense, Japan is more concerned than the United States over Chinese
perceptions. If China believes that a sea-based system in which Japan is a
participant could be used to protect Taiwan, then relations between Japan
and China could worsen.
China's reactions to the various missile defense scenarios are difficult
to predict. It is moving toward solid-fueled, mobile systems and smaller, more
sophisticated payloads with multiple warheads. In light of the July 2003
American Physical Society report expressing doubt about the feasibility of
boost-phase intercept of solid-fueled missiles, the more likely extensive
layered missile defense may be an Aegis system upgraded to intercept ICBMs.
But China is also focusing on developing countermeasures that will make
interception of ICBMs by the Aegis system more difficult. China may also react
by moving part of its nuclear arsenal to sea, thereby complicating the design
of a U.S. defense. All of this raises the specter of an arms race between China
and the United States.
In addition to the almost certain vertical proliferation that China
would embark on as a result of BMD, it could also respond by retreating from
nonproliferation commitments and selling ballistic missiles to other countries.
Because this course of action would conflict with the Chinese goal of
economic growth through trade, however, it seems less likely than the
modernization of the Chinese ICBM force.
Since the days of Mao, China has believed strongly in the value and
effectiveness of nuclear deterrence. If effective ballistic missile defense
systems become operational, deterrence will become asymmetrical, forcing
43 Slocombe, ``Missile Defense,'' p. 25.
44 McVadon, ``Chinese Reactions,'' p. 18.
FREEDMAN AND GRAY
348 | Orbis
China to reexamine its nuclear and defense doctrine. An increase in Chinese
ICBMs could impact the arms race between China and India. Thus Pakistan too
would feel pressure to increase and improve its nuclear arsenal.
The current Beijing regime bases its legitimacy on economic growth
and renewed nationalism. In the wake of recent personnel changes, there is a
great deal of uncertainty surrounding the top leadership. While Jiang Zemin
has retired from the presidency and Party leadership, he remains chairman of
the military bureaucracy. It is not at all clear whether his handpicked
successor, Hu Jintao, has enough allies in positions of power to challenge
Jiang's behind-the-scenes influence. If U.S. missile defense is perceived as
being aimed at containing China, Hu may feel domestic pressure (both from
the military and from the public) to react strongly. Similarly, if Taiwan is
either included in the footprint of the system that evolves out of cooperation
with Japan or if Taiwan participates more directly in U.S. research and
deployment, then Hu might feel enormous pressure to act decisively before
missile defense is operational. This could mean simply greater military
spending or, in an extreme case, an attempt to coerce Taiwan. The
incomplete transfer of power further complicates predictions of how China
might react to different scenarios.
Conclusion
Given the North Korean threat, the muted international reaction to
American missile defense plans, and strong support within the United States,
we believe it is prudent to continue the missile defense plans outlined by the
Bush administration in December 2002: PAC-3, ground-based interceptors,
and development and testing of an Aegis sea-based system. But we remain
concerned about the ramifications of a future Aegis system that is upgraded
with faster interceptors and enhanced warning and tracking systems to
intercept ICBMs. It is the prospect of a substantial defense against Chinese
ICBMs that is most likely to provoke an arms race.
The United States should provide as much transparency as possible as
it proceeds with missile defense. The Atlantic Council report is optimistic that
such an approach can avert potential problems: ``The long lead times for
developing and deploying missile defenses, combined with the transparency
of programs and regular briefings abroad by U.S. officials, suggest that
deployment of missile defenses in East Asia need not be destabilizing.''45 But
it also warns about the possibility of ``erroneous assumptions about what
kinds of missile defenses may be deployed, where, and in what timeframe.''
A key American objective should be to avoid creating for the Chinese
a window of opportunity wherein they believe they must coerce Taiwan
before missile defenses of a certain magnitude are operational. A second
45 Slocombe, ``Missile Defense,'' p. 29.
Missile Defense
Spring 2004 | 349
objective should be to avoid a Chinese overreaction to a system that the
United States intends to be limited. Let us assume that the United States
deploys limited layered missile defense. Even if Chinese assessments of the
capabilities of that system indicate that it poses little threat to the Chinese
ICBM force, Chinese planners would have to consider the growth potential of
the system. Perhaps additional Aegis-equipped ships in the Pacific would
enable a limited system to become an extensive one that would negate the
Chinese ICBM force.
Problems such as a system's growth potential may test the limits of
transparency. This has led some analysts to recommend other approaches.
Adam Segal suggests that the United States and China ``may be able to
negotiate an informal `rules of the game' for missiles and defenses.''46 Michael
Sheehan proposes an Asian analogue of the Conference on Security and
Cooperation in Europe.47 The specific approach is less important than
Washington's paying careful attention to the implications for the wider web
of security relations.
Northeast Asia is but a small part of the total picture. The decision to
deploy--and the specific configuration of the systems that are deployed--
will, of course, be based on many factors: whether particular components can
be successfully tested, whether the integrated missile defense system is
affordable in light of other pressing national needs, how the threat
assessment evolves, and whether future leaders and the U.S. public continue
to support this project. Missile defense may have a brighter future
now than ever before, but there are still vital questions that must be
answered before making final deployment decisions.
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Rebuilding Aid Unspent, Tapped to Pay Expenses


By Jonathan Weisman and Ariana Eunjung Cha
Washington Post Staff Writers
Friday, April 30, 2004; Page A01
Seven months after Congress approved the largest foreign aid package in history to rebuild Iraq, less than 5 percent of the $18.4 billion has been spent and occupation officials have begun shifting more than $300 million earmarked for reconstruction projects to administrative and security expenses.
Recent reports from the Coalition Provisional Authority, the CPA's inspector general and the U.S. Agency for International Development attest to the growing difficulties of the U.S.-led reconstruction effort. And they have raised concerns in Congress and among international aid experts that the Bush administration's ambitious rebuilding campaign is adrift amid rising violence and unforeseen costs.
Rep. Jim Kolbe (R-Ariz.), chairman of the House Appropriations foreign operations subcommittee, cited "bureaucratic infighting" and a "loss of central command and control" at a hearing yesterday as he sharply questioned top administration officials: "I have very serious concerns about the pace of assistance in Iraq and the management of those funds."
Deputy Defense Secretary Paul D. Wolfowitz pointed to successes in rebuilding and blamed contracting snafus for some of the delays. But Richard L. Armitage, the deputy secretary at the State Department, which will take over from the CPA this summer, refused to make what he called "excuses."
"Of course we're not satisfied," he said. "We feel the same sense of urgency that Paul feels to get on with it."
Of the $18.4 billion in Iraqi aid approved by Congress in October, just $2.3 billion had been steered to projects through March 24, the CPA told Congress this month. Only $1 billion has actually been spent, the authority's inspector general told congressional aides Monday. In January, the CPA had said it had planned to spend nearly $8 billion during the first six months of this fiscal year.
The first round of rebuilding funds, about $4.5 billion, focused on rebuilding the electricity grid, restoring the flow of oil, Iraq's main source of revenue, and fixing schools and hospitals.
In a report this month, occupation officials warned Congress that security, project management and logistics expenses may "reduce slightly" the level of funding for reconstruction but said they were still working with the Office of Management and Budget to determine how much money would be moved.
So far, occupation officials have reassigned $184 million appropriated for drinking-water projects to fund the operations of the U.S. Embassy after the provisional authority is dissolved June 30. An additional $29 million from projects such as "democracy building" were reallocated to fund the U.S. development agency's administrative expenses.
And more diversions may be coming. Armitage said the State Department still faces a shortfall of $40 million to $60 million in embassy operating funds this year. And embassy construction and operations could consume as much as $2.5 billion in fiscal 2005, none of which has been requested by President Bush.
"The first time there' s talk of a supplemental [appropriations bill], we'll be up here early and often," Armitage told House members yesterday. Until then, he said, State will have to rely on its authority under last year's Iraqi aid law to divert as much as 10 percent of the aid -- $1.84 billion -- into overhead. In addition, the CPA, which was allocated $858 million for operating expenses, can spend up to additional 1 percent of the total funding on itself.
The shift of money has already raised objections from Capitol Hill and fueled worries that it could undermine the U.S. government's position with the Iraqi people.
Aides from both parties told CPA officials this week to find the embassy money somewhere else, said Tim Rieser, chief Democratic clerk for the Senate Appropriations foreign operations subcommittee.
"Cutting funds from water and sanitation makes no sense," Rieser said. "Potable water is desperately needed in that country."
Administration officials said the money was taken from drinking-water projects because such projects have been allocated $2.8 billion through 2005, of which only $14 million has been channeled to projects. They said they felt it would be easier to take the full $184 million they were allowed to shift to CPA expenses from one place, rather than siphoning off smaller amounts from various accounts.
"We worked with Congress to develop a package of options to ensure the embassy would have needed resources," said White House budget office spokesman Chad Kolton. "We are continuing to work with Capitol Hill as the process moves forward."
Attacks on foreign civilians have also made the CPA reassess its plan for rebuilding the Iraqi security forces. Some $93 million has been reallocated from facilities protection, border enforcement and the Iraqi Armed Forces to build a fortified police training facility in Baghdad, in addition to an $800 million training academy in Jordan. The reason is that international police trainers needed a secure place to work in the Iraqi capital, said Rep. Nita M. Lowey (D-N.Y.), the ranking Democrat on the House subcommittee responsible for aid funding.
Almost since the very beginning, the reconstruction of Iraq has been set back by problems including the widespread looting in the country and competition between various U.S. agencies. "At its worst," Kolbe said yesterday, the infighting "has led to different parts of the U.S. government pursuing different policies in a given country."
The first set of contracts was awarded before the war ended, and occupation authorities reported significant progress in rebuilding schools and power plants by last fall. But turning the new round of congressional funding into visible projects and jobs has been hampered by continuing administrative and security problems.
Shortly after Congress approved the funds in mid-November, senior government officials became embroiled in a debate over who would manage the money and whether proper financial controls were in place. The Pentagon had set up a new entity called the Program Management Office to coordinate between the various contracting agencies. Some officials argued that the idea of the new office was too experimental and that it might be better for USAID or another agency to take over. The result was that the first major group of contracts were awarded in March, instead of February.
The Program Management Office Web site now says $1.5 billion in work is "under way" on 42 projects, and its director, David J. Nash, a retired Navy rear admiral, said in Iraq last week that $5 billion of the funds "will be committed to construction" by July 1.
Meanwhile, the deteriorating security situation has forced CPA officials to change some spending priorities.
USAID spokesman Luke Zahner said the shift of funds from "democracy building," electricity, education and water to agency overhead was a technical adjustment. Limited funds were allocated for operations by Congress because it was unclear last fall which agency would oversee which projects in Iraq, he said.
Most of the reallocation is for security, said Lu'ay Eris, deputy president of Baghdad City Council, which he called a reasonable decision.
A spokesman for the Iraqi Oil Ministry, Asim Jihad, agreed: "Everything is linked to everything else. If there is no security, it will be impossible to do reconstruction projects."
But, Eris predicted, "taking this money will affect reconstruction. It will lengthen the period."
The CPA's recent report to Congress shows how little of Congress's latest rebuilding allocation has been spent since Oct 1.
Of the $279 million earmarked for irrigation projects, for instance, none has been spent. The same goes for $152 million allocated for dam repair and construction. The occupation government earmarked $240 million for road and bridge construction, of which $20 million has been "obligated" to projects so far. One bridge, at Al Mat, has been rebuilt, another at Khazir is partially reopened.
Some of the programs that generated objections as gratuitous and expensive when debated in Congress last fall also have yet to take hold. The administration's $75 million witness protection initiative got its first team of U.S. marshals on March 25 to begin designing the program.
Congress pared back Bush's $400 million request for two new prisons to $100 million; so far, only "the initial scope of work" has been approved. The Defense Department did shift $15 million from judicial security to prisons to fund 107 contractors "as trainers and mentors."
Special correspondent Omar Fekeiki in Baghdad contributed to this report.


? 2004 The Washington Post Company

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Rumsfeld's War, Powell's Occupation
Rumsfeld wanted Iraqis in on the action -- right from the beginning.

By Barbara Lerner

The latest post-hoc conventional wisdom on Iraq is that Defense Secretary Rumsfeld won the war but lost the occupation. There are two problems with this analysis (which comes, most forcefully, from The Weekly Standard). First, it's not Rumsfeld's occupation; it's Colin Powell's and George Tenet's. Second, although it's painfully obvious that much is wrong with this occupation, it's simple-minded to assume that more troops will fix it. More troops may be needed now, but more of the same will not do the job. Something different is needed -- and was, right from the start.




A Rumsfeld occupation would have been different, and still might be. Rumsfeld wanted to put an Iraqi face on everything at the outset -- not just on the occupation of Iraq, but on its liberation too. That would have made a world of difference.

Rumsfeld's plan was to train and equip -- and then transport to Iraq -- some 10,000 Shia and Sunni freedom fighters led by Shia exile leader Ahmed Chalabi and his cohorts in the INC, the multi-ethnic anti-Saddam coalition he created. There, they would have joined with thousands of experienced Kurdish freedom fighters, ably led, politically and militarily, by Jalal Talabani and Massoud Barzani. Working with our special forces, this trio would have sprung into action at the start of the war, striking from the north, helping to drive Baathist thugs from power, and joining Coalition forces in the liberation of Baghdad. That would have put a proud, victorious, multi-ethnic Iraqi face on the overthrow of Saddam Hussein, and it would have given enormous prestige to three stubbornly independent and unashamedly pro-American Iraqi freedom fighters: Chalabi, Talabani, and Barzani.

Jay Garner, the retired American general Rumsfeld chose to head the civilian administration of the new Iraq, planned to capitalize on that prestige immediately by appointing all three, along with six others, to head up Iraq's new transitional government. He planned to cede power to them in a matter of weeks -- not months or years -- and was confident that they would work with him, not against him, because two of them already had. General Garner, after all, is the man who headed the successful humanitarian rescue mission that saved the Kurds in the disastrous aftermath of Gulf War I, after the State Department-CIA crowd and like thinkers in the first Bush administration betrayed them. Kurds are not a small minority -- and they remember. The hero's welcome they gave General Garner when he returned to Iraq last April made that crystal clear.

Finally, Secretary Rumsfeld wanted to cut way down on the infiltration of Syrian and Iranian agents and their foreign terrorist recruits, not just by trying to catch them at the border -- a losing game, given the length of those borders -- but by pursuing them across the border into Syria to strike hard at both the terrorists and their Syrian sponsors, a move that would have forced Iran as well as Syria to reconsider the price of trying to sabotage the reconstruction of Iraq.

None of this happened, however, because State and CIA fought against Rumsfeld's plans every step of the way. Instead of bringing a liberating Shia and Sunni force of 10,000 to Iraq, the Pentagon was only allowed to fly in a few hundred INC men. General Garner was unceremoniously dumped after only three weeks on the job, and permission for our military to pursue infiltrators across the border into Syria was denied.

General Garner was replaced by L. Paul Bremer, a State Department man who kept most of the power in his own hands and diluted what little power Chalabi, Talabani, and Barzani had by appointing not six but 22 other Iraqis to share power with them. This resulted in a rapidly rotating 25-man queen-for-a-day-type leadership that turned the Iraqi Governing Council into a faceless mass, leaving Bremer's face as the only one most Iraqis saw.

By including fence-sitters and hostile elements as well as American friends in his big, unwieldy IGC and giving them all equal weight, Bremer hoped to display a kind of inclusive, above-it-all neutrality that would win over hostile segments of Iraqi society and convince them that a fully representative Iraqi democracy would emerge. But Iraqis didn't see it that way. Many saw a foreign occupation of potentially endless length, led by the sort of Americans who can't be trusted to back up their friends or punish their enemies. Iraqis saw, too, that Syria and Iran had no and were busily entrenching their agents and terrorist recruits into Iraqi society to organize, fund, and equip Sunni bitter-enders like those now terrorizing Fallujah and Shiite thugs like Moqtada al Sadr, the man who is holding hostage the holy city of Najaf.

Despite all the crippling disadvantages it labored under, Bremer's IGC managed to do some genuine good by writing a worthy constitution, but the inability of this group to govern-period, let alone in time for the promised June 30 handover -- finally became so clear that Bremer and his backers at State and the CIA were forced to recognize it. Their last minute "solution" is to dump the Governing Council altogether, and give U.N. Secretary General Kofi Annan's special envoy, Lakhdar Brahimi, the power to appoint a new interim government. The hope is that U.N. sponsorship will do two big things: 1) give the Brahimi government greater legitimacy in the eyes of the Iraqi people; and 2) convince former allies to join us and reinforce our troops in Iraq in some significant way. These are vain hopes.

Putting a U.N. stamp on an Iraqi government will delegitimize it in the eyes of most Iraqis and do great damage to those who are actively striving to create a freer, more progressive Middle East. Iraqis may distrust us, but they have good reason to despise the U.N., and they do. For 30 years, the U.N. ignored their torments and embraced their tormentor, focusing obsessively on a handful of Palestinians instead. Then, when Saddam's misrule reduced them to begging for food and medicine, they saw U.N. fat cats rip off the Oil-for-Food Program money that was supposed to save them.

The U.N. as a whole is bad; Lakhdar Brahimi is worse. A long-time Algerian and Arab League diplomat, he is the very embodiment of all the destructive old policies foisted on the U.N. by unreformed Arab tyrants, and he lost no time in making that plain. In his first press conferences, he emphasized three points: Chalabi, Talabani, and Barzani will have no place in a government he appoints; he will condemn American military action to restore order in Iraq; and he will be an energetic promoter of the old Arab excuses -- Israel's "poison in the region," he announced, is the reason it's so hard to create a viable Iraqi interim government.

Men like Chalabi, Talabani, and Barzani have nothing but contempt for Mr. Brahimi, the U.N., and old Europe. They know perfectly well who their real enemies are, and they understand that only decisive military action against them can create the kind of order that is a necessary precondition for freedom and democracy. They see, as our State Department Arabists do not, that we will never be loved, in Iraq or anywhere else in the Middle East, until we are respected, and that the month we have wasted negotiating with the butchers of Fallujah has earned us only contempt, frightening our friends and encouraging our mortal enemies.

The damage Brahimi will do to the hope of a new day in Iraq and in the Middle East is so profound that it would not be worth it even if empowering him would bring in a division of French troops to reinforce ours in Iraq. In fact, it will do no such thing. Behind all the bluster and moral preening, the plain truth is that the French have starved their military to feed their bloated, top-heavy welfare state for decades. They couldn't send a division like the one the Brits sent, even if they wanted to (they don't). Belgium doesn't want to help us either, nor Spain, nor Russia, because these countries are not interested in fighting to create a new Middle East. They're fighting to make the most advantageous deals they can with the old Middle East, seeking to gain advantages at our expense, and at the expense of the oppressed in Iraq, Iran, and every other Middle Eastern country where people are struggling to throw off the shackles of Islamofascist oppression.

It is not yet too late for us to recognize these facts and act on them by dismissing Brahimi, putting Secretary Rumsfeld and our Iraqi friends fully in charge at last, and unleashing our Marines to make an example of Fallujah. And when al Jazeera screams "massacre," instead of cringing and apologizing, we need to stand tall and proud and tell the world: Lynch mobs like the one that slaughtered four Americans will not be tolerated. Order will restored, and Iraqis who side with us will be protected and rewarded.

-- Barbara Lerner is a frequent contributor to NRO.


-----------------------------------------------
Profitless Profiteering
Why can't Halliburton make good money in Iraq?
By Daniel Gross
Posted Thursday, April 29, 2004, at 12:47 PM PT

Is it war profiteering if you barely make a profit on your war work?
In March 2003, the KBR unit of Halliburton, the oil-services company formerly run by Vice President Dick Cheney, controversially received huge no-bid contracts to provide a range of services in Iraq--everything from fixing oil fields to delivering fuel to feeding soldiers. For many administration critics, KBR's central role in the reconstruction of Iraq stands as evidence that the war in Iraq was a pretext for crony capitalists to grow fat on borrowed taxpayer dollars.
But here's the funny thing. So far, the Iraq war hasn't proved much of a boon for Halliburton's shareholders. Because of incompetence, the chaos of working in the war zone, and a contract that limits profits, KBR's margins on its hazardous work are pretty marginal.
The Wall Street Journal notes that the Iraq contracts call for KBR to be reimbursed for its costs plus 1 percent. The company can also bill the military for a portion of its administration and overhead and can earn performance bonuses. KBR spends a lot of effort funneling taxpayer money to subcontractors, who may themselves be getting rich off of Iraq-related work. Meanwhile, the Iraq work has required KBR to incur big expenses of its own--higher insurance costs for operating in a hazardous region, recruiting costs for hiring new employees for dangerous duty, and administrative costs for handling a huge amount of new business quickly.
An excellent front-page article in yesterday's Wall Street Journal by Russell Gold shows that, depending on how you look at it, KBR has either made the best of a horrible situation or has screwed up big time. At times, KBR seems to function more like a dot-com on its last legs than the ultra-efficient logistics unit of a Fortune 500 company. Suppliers don't get paid and invoices are routinely lost. As KBR rushed into Iraq, "Many of its systems, from procurement to billing, got overloaded, creating a breeding ground for potential corruption and more inflated prices--not to mention inefficiency on a huge scale," Gold writes.
When you're a logistics company--and one working on a 1 percent profit margin--inefficiency is a killer. That's why for service companies like Halliburton, landing huge contracts is less than half the battle. Improperly executed, a huge contract can become a gigantic liability. So while KBR may land deals because of its connections and experience, it hasn't shown much ability of late to carry them out profitably.
According to Halliburton's most recent quarterly results, released yesterday, its KBR unit lost $15 million in the first quarter, largely because of a $97 million loss on an ill-fated project in Brazil, even though revenues for the unit doubled to $3.7 billion. Iraq was a fairly dim bright light. "Halliburton's Iraq-related work contributed approximately $2.1 billion in revenues in the first quarter 2004 and $32 million in operating income," the company reported. That's a margin of 1.5 percent.
The previous quarter, KBR reported $2.2 billion in Iraq-related revenues and operating income of $44 million--a 2 percent margin. And in the third quarter of 2003, KBR had $900 million in Iraq revenues and operating income of $34 million--a 3.7 percent margin. As time goes on, in other words, KBR's profits in Iraq are shrinking in both real and proportional terms. Worse, for KBR, this may be as good as it gets. Even though it received a $1.2 billion contract from the U.S. Army Corps of Engineers to continue working on the Restore Iraqi Oil program in January, the unit's backlog of work has shrunk.
What's more, KBR may ultimately pay the price for its success in monopolizing Pentagon business in Iraq. Halliburton and the Pentagon have become dependent on each other, and that may be bad for both of them. It would be extremely difficult for the Pentagon to switch master contractors in the middle of a war. And for Halliburton, the Pentagon may prove to be a capricious, highly demanding, and unpredictable client.
KBR is now under criminal investigation by the Pentagon over claims it overcharged for fuel delivered from Kuwait. The Pentagon is also looking into dining-hall contracts allegedly awarded without competitive bids. And annoyed at repeated billing screw-ups, the Pentagon is withholding hundreds of millions of dollars in payments to KBR. Any of these conflicts could further erode KBR's margins.
KBR hasn't lost money on its sweetheart Iraq contracts--yet. It has made a small profit. But the amounts are nothing to write home about--and they're certainly not worth starting a war over.


Daniel Gross (www.danielgross.net) writes Slate's "Moneybox" column. You can e-mail him at moneybox@slate.com.

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>> YELLOWCAKE JOE?

Book Names Iraqi in Alleged '99 Bid to Buy Uranium

By Susan Schmidt
Washington Post Staff Writer
Friday, April 30, 2004; Page A16
It was Saddam Hussein's information minister, Mohammed Saeed Sahhaf, often referred to in the Western press as "Baghdad Bob," who approached an official of the African nation of Niger in 1999 to discuss trade -- an overture the official saw as a possible effort to buy uranium.
That's according to a new book Joseph C. Wilson IV, a former ambassador who was sent to Niger by the CIA in 2002 to investigate reports that Iraq had been trying to buy enriched "yellowcake" uranium. Wilson wrote that he did not learn the identity of the Iraqi official until this January, when he talked again with his Niger source.
That knowledge has not altered Wilson's much-expressed view that the Bush administration distorted intelligence on Iraq's weapons capabilities to help make the case for going to war. Wilson maintains that someone in the administration retaliated against him by disclosing to columnist Robert D. Novak that his wife was a CIA operative, a leak now the subject of a grand jury investigation. The revelation about Sahhaf, contained in "The Politics of Truth: Inside the Lies that Led to War and Betrayed My Wife's CIA Identity," adds an odd bit of detail to the uranium saga.
Sahhaf was dubbed "Baghdad Bob" and "Comical Ali" by the Western news media for his often farcical televised pronouncements about how Iraq was winning the war last April even as U.S. troops were rolling into Baghdad. "Those Iraqi fighters are slapping those gangsters on the face, and then when they flee, they will kick their backsides," he asserted at one point.
Sahhaf, now a broadcast correspondent in Abu Dhabi, could not be reached for comment yesterday. He was interviewed when the U.S. military took control if Iraq but was not held. "He wasn't wanted for anything. Unfortunately, being a bad spokesman is not a crime," a U.S. official said.
Sahhaf's role casts more light on an aspect of Wilson's report to the CIA that was publicly disclosed last summer. On the heels of Wilson's public criticism that intelligence was exaggerated and his statement that his trip to Niger had turned up no uranium sales to Iraq, agency Director George J. Tenet took the blame for allowing President Bush to make assertions about the Iraqi quest for nuclear material in his 2003 State of the Union address. Tenet said the intelligence had been too "fragmentary" to merit inclusion in the speech.
Tenet's statement noted that Wilson had reported back to the CIA that a former Niger official told him that "in June 1999 a businessman approached him and insisted that the former official meet with an Iraqi delegation to discuss 'expanding commercial relations' between Iraq and Niger. The former official interpreted the overture as an attempt to discuss uranium sales."
In his book, Wilson recounts his encounter with the unnamed Niger official in 2002, saying, he "hesitated and looked up to the sky as if plumbing the depths of his memory, then offered that perhaps the Iraqi might have wanted to talk about uranium." Wilson did not get the Iraqi's name in 2002, but he writes that he talked to his source again four months ago, and that the former official said he saw Sahhaf on television before the start of the war and recognized him as the person he talked to in 1999.
Much of Wilson's book recounts the events surrounding the disclosure that his wife, Valerie Plame, worked for the CIA. A grand jury investigating the disclosure has been highly active in the past seven weeks, suggesting that it may have reached a new stage, people familiar with the probe said. Plame was a covert operative. Under the Intelligence Identities Protection Act of 1982, it is illegal to knowingly disclose the name of a covert CIA employee.
FBI agents and prosecutors have interviewed some current and former White House officials repeatedly, people involved in the case said. Several administration officials testified before the grand jury in recent weeks.
Staff writer Linton Weeks contributed to this report.
? 2004 The Washington Post Company


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Saddam regime may have planned insurgency before it fell

By John J. Lumpkin
Associated Press
Anti-U.S. violence in Iraq comes from multiple directions and sources, but Pentagon intelligence officials believe they have divined the most sophisticated: a group of Iraqi intelligence and security officers who dispersed around Iraq, preparing for guerrilla war, even as Saddam Hussein's regime fell.
Figuring out the enemy in Iraq has been a key struggle for the U.S. military ever since Saddam was toppled. And it has come to a head as American officials try to deal with an entrenched insurgency in Fallujah.
The insurgents fighting in Fallujah are thought to be a mix of several groups, Marine Maj. Gen. John Sattler, director of operations for the U.S. Central Command, said this week.
"We believe that there's a combination of former Baathist, some foreign fighters, some extremists, a combination of some Iraqi Republican Guard elements that were out there in the vicinity of Fallujah, some terrorists who have moved in from outside the country," he said.
Other groups are capable of almost as much violence as the group of Iraqi intelligence and security officers that U.S. officials have identified. Those others include supporters of Jordanian extremist Abu Musab Zarqawi, the Ansar al-Islam extremist group, and various militias that have emerged since the fall of Saddam, American officials say.
Attributing particular acts to specific groups is often difficult without a full investigation or a cooperative prisoner. But some patterns in attacks have emerged.
The group of Iraqi intelligence officers come from the Directorate of Special Operations and Antiterrorism, known as M-14, according to defense officials at the Pentagon who spoke on the condition of anonymity.
That was a part of Iraq's intelligence service, the Mukhabarat -- the same organization the U.S. government says tried to assassinate former President Bush in Kuwait in 1993.
Officials said they think members of the organization are working independently and probably in little communication with one another. The officials cited a recent report by the Pentagon's Defense Intelligence Agency.
The nature and extent of their connection to other violent groups in Iraq is unclear, although officials said their specialty is to train, fund and plan operations by others willing to carry them out.
Interviews with prisoners provided some information on M-14. But defense officials said another clue to its operations comes from similarities in certain bomb designs found around the country.
They also suspect some of these security officers are agitating in Fallujah, where Marines face an estimated 1,500 to 2,000 insurgents. Military officials say they see the insurgents using Soviet-style defense-in-depth military tactics, instead of the hit-and-run ambushes favored by Islamic mujahideen who fought in Afghanistan.
That suggests leadership by former members of Saddam's Soviet-style military, instead of foreigners, officials said.
The DIA report also blames the group for an April 14, 2003, attack that killed three U.S. soldiers, the official said. It said the group probably is working with other anti-U.S. groups and individuals to conduct some of their attacks.
Some reports put Zarqawi, an associate of Osama bin Laden, in Fallujah, as well.
Beyond Fallujah, intelligence and military officials suspect, in particular, that he is behind attacks in other regions of Iraq that appeared aimed at causing violence between Shiite and Sunni Muslims, and others aimed at driving U.S. allies, such as Italy, out of Iraq.
Officials cite an intercepted letter of his as evidence of his goals.
However, Zarqawi is thought to be more interested in bombings than in firefights.
"To what extent, if any, he is involved in Fallujah fighting is unclear," one counterterrorism official said.
Another active group is Ansar al-Islam, which officials also associate with Zarqawi. Members of the group, formed in the Kurdish parts of Iraq, have served as fixers for other Sunni Muslim extremists entering Iraq, U.S. officials believe. They also have experimented with chemical weapons in the past, and defense officials worry they could try such an attack inside Iraq.
Defense officials say the threat of violence from various militias is on the rise. The best known is the al-Mahdi Army, made up of followers of Muqtada al-Sadr, the Shiite cleric holed up in Najaf.
Still another group is Mohammed's Army, which is believed to be composed of former security and military officials from Saddam's regime.
Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Syria's Assad backs Iraqi resistance
Admits in interview his belief in insurgents fighting U.S.
Posted: April 30, 2004
1:00 a.m. Eastern
? 2004 WorldNetDaily.com
Syrian President Bashar al-Assad called radical Islamic insurgents fighting coalition troops in Iraq a legitimate resistance.
"Certainly, what has happened on the popular level gives legitimacy to the resistance and shows that the major part of what is happening is resistance," Assad said in comments aired on the Qatar-based Arabic-language satellite channel al-Jazeera.
The interview will be broadcast in full Saturday on an "open dialogue" program.
It was the first time Assad publicly admitted his view of the Iraqi resistance, said the exiled opposition group Reform Party of Syria.
The party, based in Washington, D.C., said "Middle East experts" regard the president's remarks as a "declaration of war" because Damascus has sent Syrians to fight the U.S. in Fallujah.
Relations between Syria and the U.S. already are tense with Damascus on the State Department's list of terrorist-sponsoring nations and pressure from Washington to curb terrorism in the region.
The U.S.-led forces are battling threats from both Sunni Muslim guerrillas in Fallujah, near Baghdad, and Shiite fighters in the south.
"You are talking now about resistance which is against the occupation forces," Assad said in the interview.
Asked if the resistance was legitimate, he said: "Well, of course, it's understood that way."

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Some on Hill Seek to Punish Syria for Broken Promises on Iraq
By Robin Wright and Glenn Kessler
Washington Post Staff Writers
Friday, April 30, 2004; Page A24
Syria has failed to fulfill key promises to cooperate on Iraq, particularly to close down the traffic of foreign fighters, smugglers and others across its border, which is triggering new congressional efforts to impose tougher U.S. restrictions on Damascus, according to U.S. and congressional officials.
President Bashar Assad has also not returned to Iraq $3 billion from Saddam Hussein's government held in Syrian banks, or closed offices of Islamic extremists and Palestinian radicals in the Syrian capital, as he promised Secretary of State Colin L. Powell in talks a year ago, U.S. officials said.
At the time, Powell told Assad that if he wanted to avoid sanctions contained in a bill proposed in Congress, he needed to take action to satisfy U.S. concerns. But Syria often failed to live up to administration expectations. While Hussein's money was frozen, for instance, the Syrian government then used it to pay claims to Syrians who said they were owed money by Iraq, reducing the amount left, U.S. officials said.
The White House last fall lifted its objections to the bill, known as the Syrian Accountability Act, and now pressure is mounting on the Bush administration to finally impose the sanctions it outlines. The administration was expected to select from a list of possible sanctions more than six weeks ago, but has repeatedly deferred action.
Congressional sources said the administration intended to impose penalties in stages, to see if a gradual unrolling would prod the Syrian government to reverse course. The law requires the administration by June 12 to ban export to Syria of any dual-use goods that could be used to produce weapons of mass destruction -- though some exemptions will be made for products such as communications gear -- and then pick at least two of six punitive measures listed in the legislation.
But some House lawmakers said they were tired of waiting and intend to introduce a new Syria-Lebanon liberation act, modeled to some extent on the Iraq Liberation Act, that would mandate broader sanctions against Syria than are called for in the current law and, by implication, support government change.
"My patience has run out," said Rep. Eliot L. Engel (D-N.Y.), one of the co-sponsors.
U.S. officials said the Bush administration is also frustrated, in part because the Syrian government has been either unable or unwilling to stop the traffic across the 400-mile border that it originally encouraged or facilitated, despite repeated pledges of action.
"It's a mixed bag at best. On occasion they are cooperative when they're motivated to do so. They could do a lot more on the borders of Iraq and hint that they will, but we'd like to see more evidence of it," said a U.S. official familiar with the discussions. "There's not a lot of progress on stopping people going through or the money. They're reluctant to be excessively helpful, and there's no good explanation why -- maybe solidarity with neighbors or not wanting to be seen to collaborate with the Americans."
Because Syria does not require visas for Arabs, the Syrian border has been the main route into Iraq for foreign fighters, many of whom are now fighting in Fallujah, officials say. In the early days of the U.S.-led intervention, the Syrians helped arrange logistics and transportation for anyone interested in crossing into Iraq, U.S. officials say.
Under pressure from the United States, Syria has repeatedly promised to end its direct help, but has been unable or unwilling to cut off the infrastructure it put in place, the officials say.
Part of the problem is that the Syrian government does not totally control the border. In some cases, tribes along the border have facilitated cross-border travel because of bribes or disinterest in heeding the message from Damascus; in others, Syrian border guards have looked the other way for bribes, the officials say. Over the past year, traffic across the border has become good business. Many Syrians do not agree with government policy or any move that is seen to assist forces occupying an Arab country, U.S. officials say.
Many Syrians are among the fighters who have shown up in hospitals or in custody, another reason Washington has continued to pressure Damascus, U.S. officials say.
But the U.S. official called Syria's failure to comply over the past year "a missed opportunity," adding that the administration had not been surprised by the failure to follow through on its promises.
State Department officials said that the White House has not put into effect the provisions of the original sanctions law because it did not want to overshadow the scheduled Arab League summit last month or embarrass Egyptian and Jordanian leaders, who had just held talks with Assad, during their visits to Washington this month. But the Arab League summit and the visit of the Jordanian king have been postponed until May, further delaying White House actions, State Department officials add.
But congressional officials say the administration is divided on whether to sanction Syria when the United States needs cooperation. "There is obviously an internal debate going on pitting some inside the NSC [National Security Council] and Defense against State and [CIA director George J.] Tenet," said a senior congressional aide familiar with the conversations between Capitol Hill and the White House. "Tenet is the voice, saying, 'Slow down, slow down, no matter how big a trickle [of cooperation there] is, at least it is a trickle.'"
The State Department's annual report on terrorism, released yesterday, said Syria has cooperated in fighting al Qaeda and other terrorist groups and has discouraged signs of public support for al Qaeda within Syria. But it was faulted for continuing to provide "political and material support to Palestinian rejectionist groups." The report said that a number of groups continue to operate from Syria, "although they have lowered their public profiles since May, when Damascus announced that the groups had voluntarily closed their offices."


? 2004 The Washington Post Company
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Globalizing terror -- Khaddafy outsourced?

By John Metzler
SPECIAL TO WORLD TRIBUNE.COM

Friday, April 30, 2004
UNITED NATIONS -- The U.N. Security Council unanimously passed a terrorist weapons ban barring individuals, countries and states from trafficking in chemical, biological and nuclear arms. The resolution would punish "non-state actors" for possessing and selling weapons of mass destruction.
The resolution addresses the very real but growing role of non-State players in organized violence. The identifiable countries which long hosted terrorists -- Libya, Iraq, Islamic Iran -- are now fewer or under very close scrutiny. Thus while this unanimously backed resolution is a major victory for American diplomacy, somehow I don't feel the bad guys are running scared.
In parallel to economic globalization there's been a globalization of terrorism too -- the usual suspects have outsourced their grisly business to offshore entities from Yemen to the southern Philippines, Morocco and into the historic heart of Europe. Let us not forget that the German city of Hamburg hosted some key Al Qaida cells as much as did London and Paris.
In one sense business globalization -- easy communication, simple cross border movement and cash transfers -- indirectly abets the terrorists. Crossing European Union frontiers is quite easy with few exceptions. Beyond the positive benefits, naturally this facilitates illegal immigration, crime syndicates, and clandestine terrorist cells.
Beyond the horrific attacks on American September 11th and on Madrid March 11th, one finds that the grisly path has taken many curious turns from Istanbul to Jerusalem to Madrid.
Naturally those who instinctively know better will assure us that the problem remains for the most part -- somewhere else or somehow our fault. They refuse to acknowledge that America's once lax border controls and domestic surveillance in the 1990's allowed these militants to meticulously construct scores of sleeper cells in U.S. cities which were out of the reach of law enforcement. While our War on Terror has successfully rolled up many terrorist cells since September 11th, we must realistically assume many others have not been.
Now there's a nagging dimension which is also distinctly different. A recent upsurge in violence across the Middle East where Islamic fundamentalists have tried to create a spectacular chemical weapon attacks in the Jordanian capital but were thwarted, bombs in Saudi Arabia, and of course Iraqi militants continue to harasses coalition forces in Iraq. Moderate Arab governments from Morocco to Jordan feel the venomous hatred of fundamentalists. Even Syria, who hosts many militants, saw recent attacks. The violence in Damascus could be the fury from fundamentalists who were long suppressed by Assad's regime, or a provocation by the Syrians to crack down on rumbling dissent.
Interestingly Libya's leader Col. Khaddafy, longtime alleged patron saint of international terrorism, appears to have gone cold turkey. Given Khaddafy's genuine fear that his chemical weapons and nuclear research programs were putting him in the cross-hairs of the Bush Administration, the Libyan leader came clean. Not only has he surrendered some weapons nobody even knew he possessed, but he now has played an awkward political charm offensive with politicos from Tony Blair to the European Union's supremo Romano Prodi.
The images are surrealistic -- Blair posing with Khaddafy outside a Bedouin tent in the Libyan desert -- camels as the exotic backdrop. Khaddafy goes to Brussels and gets glad-handed by the Euroclass. Khaddafy's past terror has been outsourced. Maybe the mercurial Libyan Colonel is just too 1970's and 80's. Move over Moammar -- Osama Bin Laden is the new chief.
There are notable exceptions. Islamic Iran's President Mohammed Khatami stated recently, "Hizbullah are the pride of the Muslim and Arab world, the pride of Iran." Indeed this Teheran sponsored terrorist group has long been the bane of Lebanon and Israel.
Formal state sponsorship of terrorist groups, once a mainstay of militants from Tripoli to Teheran, is being outsourced to the shadowy Al Qaida network which lives among the target groups and countries. Realistically any regime who openly sponsors terrorists, knows it's on the Pentagon's short list for action. Such targets are too tempting in the post-September 11th world. America won't allow them.
Thus the terrorists are essentially outsourcing their operations and in many cases are now living among us.


John J. Metzler is a U.N. correspondent covering diplomatic and defense issues. He writes weekly for World Tribune.com.

--------------------------------------------------------------------------------
>> SAY WHAT?


Annan urges Arafat to crack down on terror
By JPOST.COM STAFF
UN Secretary-General Kofi Annan urged Yasser Arafat on Friday to give Israel's Gaza pullout plan a chance, saying Palestinians should crack down on terrorists to help revive a broader peace effort, Reuters news agency reported.
In unusually tough language, Annan - in a letter obtained by Reuters - also criticized the Palestinian Authority Chairman for failing to meet obligations under the road map plan including security reforms and putting an end to suicide bombings.
He said Israel must carry out its road map requirements to dismantle Jewish settler outposts and freeze construction in larger, established settlements.
"You are aware...that the Palestinian side too has obligations it has not fulfilled," Annan told Arafat. "The Palestinian Authority should immediately start taking effective measures to curb terrorism and violence."
"Decisive actions on your part would help the international community ensure that any withdrawal from Gaza is part of the implementation of the road map and not a substitute for it," he wrote.
Reuters reported that Annan's letter was a response to Arafat's written complaint on April 15 about Israeli Prime Minister Ariel Sharon's unilateral "disengagement" plan and President Bush's endorsement of it.

--------------------------------------------
Abu Mazen calls for PA reforms to counter Sharon
By JPOST.COM STAFF
The Palestinian leadership should begin reforms to counter Prime Minister Ariel Sharon and his unilateral disengagement plan, former Palestinian Authority Prime Minister Mahmoud Abbas (Abu Mazen) told Reuters on Friday.
Abbas, who resigned in September after his reform program, backed by Washington, was blocked by PA Chairman Yasser Arafat, said that the PA could take on Sharon and regain relevance in US eyes by tackling reforms.
Abbas called on the crumbling Authority to "unite the many security organs, control the armed and non-armed factions, make (democratic) reforms and then go to the Arabs and the world for backing.
"Israel and America will continue to have the upper hand if we don't work to activate the Palestinian Authority and prove we are partners, carrying out our duties, despite the occupation," Abbas said.

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MI5 goes online to detail UK terror threat
By Mark Huband, Security Correspondent
Published: April 30 2004 5:00 | Last Updated: April 30 2004 5:00
MI5, the security service, has emerged further into the public eye with a new website launched on Friday that outlines details of the threat of terrorsim and gives advice on how to prepare for attacks.
The website service, is directed mainly at businesses, signals a significant raising of MI5's public profile and comes partly in response to demands from companies that information from the security service be made more widely available.
Whitehall officials hope that by putting the MI5 stamp on the information, company boards will be more encouraged to implement the suggested security measures. The website will, for the first time, give the public access to MI5's assessment of the terrorist threat facing Britain.
"The most important part of the service will be the security advice," said a senior Whitehall official. "It will give more detail on the threat in the UK and the threat internationally. But it will also give advice on what to do about the threat, which will be intended to make people think about the measures they are taking. The emphasis will be on planning for staff security and business continuity."
MI5 has restricted its advisory role to utilities that form the critical national infrastructure. This was recently expanded to include food and chemicals companies, but is now seen as appropriate to all sectors. www.mi5.gov.uk
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DEPUTIES GIVE INITIAL APPROVAL TO BILL UNDERCUTTING GENERAL STAFF...
The Duma approved on 29 April a bill on the management of the military, Russian media reported. The bill amending the law on defense was approved in its first reading, with 424 votes in favor and one against, Interfax reported. If adopted, the bill will significantly reduce the role of the General Staff in managing the operations of the Russian armed forces. The draft stipulates that the defense minister, working through the Defense Ministry, exercises control over the Armed Forces. According to gazeta.ru, under Defense Minister Sergei Ivanov's plan for reforming military administration, the General Staff will become the "brain" of the army, an "intellectual center for the military-administration system." The website also reported that Ivanov has clashed repeatedly with General Staff chief General Anatolii Kvashnin since Ivanov took over the Defense Ministry. Kvashnin, who was a close associate of former President Boris Yeltsin, also had public conflicts with former Defense Minister Igor Sergeev. JAC

...OKAYS BILL EASING ADMINISTRATIVE REFORMS...
Also on 29 April, legislators approved in their first reading amendments to the law on government, Russian media reported. The bill, which was sponsored by the presidential administration, was supported by 425 legislators, with one vote against, RIA-Novosti reported. Presidential envoy to the State Duma Aleksandr Kosopkin explained that the bill gives the government the right to redistribute functions within executive bodies during reforms of government structure. It also updates legislation to reflect the new names of various federal agencies. The Duma's next plenary session will be on 12 May. JAC

...AND LAUNCH INTERNAL CORRUPTION COMMISSION
A 15-member commission to investigate corruption within the Duma will begin operating soon, "Rossiiskaya gazeta" reported on 29 April (see "RFE/RL Newsline," 22 April 2004). Among the issues the commission is expected to probe is lobbying by large corporations that have allegedly purchased influence by financing legislators' election campaigns. The case of former Duma Deputy Leonid Maevskii (Communist), who purchased a 25.1 percent stake in the mobile-phone company Megafon while he was chairman of the Duma Communications and Information Subcommittee, is one example of the activities the commission will examine, according to the daily. Unified Russia faction deputy head Mikhail Bugera recently sent an inquiry about Maevskii to the Prosecutor-General's Office, the daily reported. Maevskii was expelled from the Communist Party faction last year after charging that self-exiled tycoon Boris Berezovskii was financing the party in full (see "RFE/RL Newsline," 20 November 2003). JAC

CHUBAIS CALLED TO ACCOUNT FOR EES PR SPENDING
Unified Energy Systems (EES) CEO Anatolii Chubais will have to account to the EES board for the company's spending for "public relations" and "government relations," "Vedomosti" reported on 29 April. EES board member and Base Element holding company Vice President Devid Dzheovanis has asked EES board Chairman Aleksandr Voloshin to include Chubais's report in the agenda for the next board meeting. "We have read in the media that the company is paying journalists to write well of EES. We have also heard that the company financed a recent press campaign against Rusal," Dzheovanis told the daily. "We want to know if this is true. And if it is, we want this practice stopped." Another ESS board member, who asked not to be named, told the paper that "it is simply comic when Base Element accuses someone else of paying off journalists." Last year, the Yabloko party accused Chubais and EES of financing a public relations campaign aimed at discrediting the party and Yabloko leader Grigorii Yavlinskii (see "RFE/RL Newsline," 6 and 8 August and 16 September 2003). RC

COURT DENIES REQUEST TO COMBINE KHODORKOVSKII, LEBEDEV TRIALS
Moscow's Meshchanskii Raion Court on 29 April denied a defense motion to combine the trials of Menatep Chairman Platon Lebedev and of former Yukos CEO Mikhail Khodorkovskii, Russian media reported. The defense argued that since Lebedev and Khodorkovskii are charged in connection with identical alleged crimes, the cases should be tried together, "Nezavisimaya gazeta" reported on 30 April. Prosecutors countered that it was still uncertain when Khodorkovskii's case would be transferred to the courts, since the defendant is still reviewing the case materials (see "RFE/RL Newsline," 26 April 2004). Lebedev's lawyers said they will continue to seek the unification of the two trials and on 29 April they submitted an appeal to the court asking that Lebedev's trial be postponed until Khodorkovskii's case is submitted to the courts, the daily reported. RC

DID PROSECUTORS QUESTION POTANIN?
A spokeswoman for the Interros holding on 29 April denied media reports that Interros President Vladimir Potanin was questioned earlier that day by the Prosecutor-General's Office, ITAR-TASS reported. Ekho Moskvy, newsru.com, and "Russkii kurer," all citing unnamed Interros sources, reported the interrogation, adding that Potanin left Russia for Israel immediately after being questioned. The Prosecutor-General's Office refused to comment on the reports. Interros shares fell by 6.5 percent on 29 April on the strength of the rumors, strana.ru reported on 30 April. However, "Gazeta" reported, citing unnamed Interros sources, on 30 April that Potanin was indeed questioned, perhaps in connection with the 28 April murder of former Federal Bankruptcy Service Director Georgii Tal (see "RFE/RL Newsline," 29 April 2004). Tal headed the bankruptcy agency during a 1998-1999 conflict between Interros and the Tyumen Oil Company (TNK) over the firm Sidanko. In 1998, Interros was the major shareholder in Sidanko, but after a three-year battle in which TNK succeeded in having two Sidanko subsidiaries declared bankrupt, Interros sold its Sidanko stake to TNK in 2001. Less than a year later, TNK announced a major merger deal with British Petroleum (BP). RC

DRUG AGENCY WANTS TO CLEAN UP THE UNIVERSITIES?
The Federal Antinarcotics Agency has put forward a proposal under which all students at state institutions of higher learning would have to undergo drug testing or face expulsion, "Izvestiya" reported on 30 April. The initiative reportedly came from the agency's Primorskii Krai Directorate and has been approved by the agency at the federal level. "Institutions of higher education have the right to demand of their students -- no drugs," Federal Antinarcotics Agency Deputy Director Aleksandr Mikhailov told the daily. "Either you inject, or you study." Mikhailov, however, told newsru.com that the "Izvestiya" report is not true. "No such initiative from the agency has been put forward or could be put forward," Mikhailov was quoted by the website as saying. Moscow lawyer Mikhail Lyabakh told "Izvestiya" that it is illegal in Russia to divulge publicly the results of drug tests, meaning that it would not be possible to expel students who failed them. RC
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CHIEF JUSTICE SAYS IRAN HAS NO POLITICAL DETAINEES
Judiciary Chief Ayatollah Mahmud Hashemi-Shahrudi said in Tehran on 29 April that "we have no political prisoners in Iran" because Iranian law does not mention such offenses, IRNA reported that day. His statement contradicts President Hojatoleslam Mohammad Khatami's earlier admission that dissidents have been jailed (see "RFE/RL Newsline," 28 April 2004). "The world may consider certain cases, by their nature, political crimes, but because we do not have a law in this regard, these are considered ordinary offenses," IRNA reported. The judiciary, he said, has sent to parliament a bill governing political offenses, but it was rejected as "incomplete," IRNA reported. The judiciary believes a similar bill presented by parliament and the Interior Ministry "has a legal problem, because the law stipulates that it is the judiciary's duty to draft a [political offenses] bill." Shahrudi said the judiciary will soon propose a bill to downgrade financial offenses from criminal to civil offenses, and is drafting a bill on "electronic offenses" governing Internet use, IRNA reported. VS

IRANIAN PRESIDENT SAYS IRAN THE BEST ENERGY-TRANSIT ROUTE
President Khatami in Neka on 29 April stressed that Iran is the "cheapest, easiest and most secure" transfer route for Caspian Sea energy resources "to the world's free waterways...and there can be no doubt about that," IRNA reported that day. Speaking at the inauguration in northern Iran of the first phase of a project to pipe oil from Caspian littoral states to Iranian refineries, he criticized "inappropriate strictness and pressures" on Iran by the United States, which has opposed Iran as an energy transfer route. These "hostile policies have failed," he said. The project will allow an increase in swap deals, with Caspian oil flowing to Iranian refineries and Iran delivering Iranian oil to set clients from Persian Gulf terminals, the "Tehran Times" cited Reza Kazayizadeh, the head of a state oil-engineering firm as saying on 28 April. Oil Minister Bizhan Namdar-Zanganeh stated at the inaugural ceremony that Iran can now drill for oil in deeper waters of its section of the Caspian Sea, with the delivery of floating drilling platforms to support the drills, Farsnews.com reported on 29 April. VS

STATE DEPARTMENT NAMES IRAN AS TOP TERROR SPONSOR
The U.S. condemned Iran on 29 April as the leading "state sponsor of terrorism" in 2003, accusing it of fomenting terror attacks in the Mideast, AFP reported the same day. The State Department's annual report, "Patterns of Global Terrorism," stated that Iranian intelligence agents and Islamic Revolution Guards Corps have participated in the planning or supporting of terrorist acts, and that Iran has not honored pledges to confront the Al-Qaeda terrorist group or hand over Al-Qaeda suspects, AFP added. Iran, the report stated, has also had a "high-profile role in encouraging anti-Israeli activity" by such groups as Hamas or the Lebanese Hizbullah, which the U.S. has listed as terrorist groups but Iran considers legitimate resistance groups. The report also suggests that Iranian elements have stoked discontent among Iraqi Shi'ites and helped terrorists evade coalition forces, AFP added. Iranian officials habitually describe Iran as a victim of terrorism and have stated that the country supports global efforts to fight terrorism. VS

IRAN EXPORTS MORE FOOD PRODUCTS
Iran saw a 21.5 percent year-on-year rise in food exports in the year ending 20 March 2004, earning just over $210 million, Mehr News Agency reported on 29 April. Exports included chocolate, cookies, pasta, rose water, vinegar, mineral water, and soft drinks, the agency cited Ahmad Qasemi, head of exports at the Ministry of Mines and Industry as saying. The export of chemical products in the same period, worth some $147 million, jumped 48.1 percent year-on-year, and petrochemical exports, worth $434.3 million, rose 12.4 percent, Mehrnews.com cited Qasemi as saying. Separately, the EU has given Iran 40 days to act to resolve a fungal infection of pistachios, a key export that earned Iran $800 million in the year ending 20 March 2004, AFP reported on 29 April. The fungus can cause cancer, AFP added. VS
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THE NATIONAL PULSE


SPREADING THE MONEY AROUND
Changes to Campaign Financing Laws Boost Legal Profession as Biggest Donor
BY SUSAN KOSTAL
The Olympics and presidential elections have at least two things in common: They occur every four years, and they set new records.
But when it comes to contributions and spending, this year's campaign looks to be another gold-medal winner of all time.
George W. Bush has shattered fund-raising records, and is already sitting on more than $100 million. The John Kerry campaign expects to raise $80 million by the July convention, observers say. Other federal elections are also expected to garner huge sums.
And once again, lawyers as a group are not only the largest donors of any single profession tracked, they are also the most consistent, campaign watchers say. As of March 1, when the latest Federal Election Commission figures were available, the legal profession had contributed more than $65 million to federal campaigns since Jan. 1, 2003, according to the nonpartisan Center for Responsive Politics. The campaign cycle runs through Dec. 31, 2004.
That puts the profession well on its way to topping the 2000 presidential election year figure of $112 million, and keeps it in first place among industries, including health care, insurance and pharmaceuticals, according to the Washington, D.C.-based CRP.
"Lawyers are so much more civically engaged than most parts of society because of what they do," says Washington, D.C., attorney William Canfield, chair of the ABA's Standing Committee on Election Law. "It shouldn't come as any surprise to pick up a random FEC disclosure statement and see how many lawyers are contributing. Law is what they do."
This year, the legal profession is expected to play an even bigger role, especially with higher individual contribution levels and the loss of soft money--funds given to state organizations as a way of bypassing federal election regulations.
"It looks like lawyers are making a strong effort to make up for the lack of soft money," says CRP spokesman Steve Weiss.
Lawyers tend to be "well-to-do, aware and politically active," Weiss adds. And, he says, they are pragmatic. "Donations are an investment, and they want to spread [the money] around." Lawyers, he says, "are just trying to score as many points as they can."
There will likely be increasing political activism from individuals, partnerships and partnership political action committees, says Washington, D.C., attorney Trevor Potter, a former FEC chairman and current co-chair of the ABA Administrative Law Section's Elections Committee.
Potter and other experts also cite a closely divided electorate and the candidacy of former trial lawyer John Edwards as motivators for attorneys' contributing.
SMALL CONTRIBUTIONS MEAN MORE NOW
And then there's the bipartisan campaign reform Act, also known as the McCain-Feingold legislation, which last year was upheld almost in its entirety by the U.S. Supreme Court. The BCRA, which Potter helped to craft, prohibits soft money contributions and corporate and labor funding of issue ads that refer to federal candidates and run close to elections. The consequence is that donors feel it's a more level playing field and that their money will go further.
"Campaign finance reform democratized the process to a degree no one" anticipated, says John Merrigan, chairman of Piper Rudnick's federal affairs and legislative practice group in Washington. "There will be a lot more people contributing and participating in this process than ever before."
Merrigan should know. He is treasurer of the firm's PAC, the largest of any law firm and the second-most lucrative industry contributor, at more than $576,000, according to the CRP. Only the Association of Trial Lawyers of America PAC tops it, at $1.2 million.
All these changes in campaign finance law mean funds from individual donors are more valuable than in past cycles.
"For those who are active givers, who are known commodities to campaign committees, it's getting more expensive," says Canfield, a partner with Williams & Jensen.
"The system is so insatiable," says Joel Jankowsky, chairman of the public law and policy department with Akin Gump Strauss Hauer & Feld in Washington. "We barely have enough money to participate in the congressional process."
Akin Gump ranks No. 5 in campaign contributions thus far, according to the CRP. Like Piper Rudnick, the firm's PAC does not participate in presidential elections, leaving that to individual attorneys.
Nevertheless, PACs are the vehicles of choice for most large law firms, especially those with large Washington practices. Formed to raise and spend campaign money, most PACs are affiliated with business, labor or ideological interests. They must be registered with the FEC, and they are allowed to give up to $5,000 to a candidate's committee, and up to $15,000 to a national party.
"PAC funds are the cleanest political money out there," says Richard Gold, a partner at Holland & Knight's Washington office and treasurer of the firm's PAC, which ranks number nine on the list of law-profession donors. "It's all reported damned near instantaneously, and it's pretty clear who the money is going to."
Most Washington, D.C., firms with active legislative practices have active federal PACs, Gold says. "You have to have a PAC to have an active Capitol Hill practice," he says. "These folks are working really hard on client issues that are relevant to you. The only way to interact with them and be of help to them is on the fund-raising side. Until the public decides it wants to be taxed to run campaigns, this is how things work."
Adds Canfield: "More lawyers than you would suspect give money in Washington because so many of the law firms here have a lobbying component. Becoming friendly with various members of Congress is a method by which clients can achieve what they want."
At Piper Rudnick, the firm PAC requires lawyers to put up a 25 percent match. If Merrigan, for example, asks for $1,000 for his favorite senator, the PAC cuts a check for $750 and Merrigan writes a personal check for $250. "It's a way to gauge the seriousness of people's requests," Merrigan says.
While participation isn't universal within the firm, it is high. According to FEC records, Piper Rudnick donors gave 1,030 contributions of $200 or more to the firm PAC since January 2003. Some 30 attorneys--Merrigan is one--donated the maximum $5,000.
Not all firms have PACs--yet. Philadelphia's Blank Rome, the third-largest political contributor behind Piper Rudnick, does so completely outside a PAC. Chairman David Girard-diCarlo says his firm is considering forming both state and federal PACs. "Apparently there is a benefit to getting your name out there via a federal PAC. We may very well go down that path," Girard-diCarlo says.
Not that Girard-diCarlo has ever had trouble getting his fund-raising prowess noticed. He's a longtime friend of Homeland Security Secretary Tom Ridge, an early supporter of President Bush, and chairman of the president's fund-raising committee in Pennsylvania. He's also one of the president's coveted Rangers, fund-raisers who have pledged to raise $200,000 by soliciting donations from others, a process known as bundling.
According to the CRP figures, Blank Rome gives heavily to Republicans, who get 73 percent of the firm's contributions. Other firms follow different allocation standards. And ATLA swings toward the Democrats, who get 90 percent of the association's funds.
On the other hand, Piper Rudnick's PAC disbursements track the political makeup of the House and Senate: 52 percent of the money goes to Republicans, and 48 percent to Democrats. Merrigan predicts Piper Rudnick PAC giving to Republicans will increase as Republican power increases in both chambers.
For Merrigan, the firm's PAC helps balance the mixed marriage most firms find themselves in, with partners passionately active in both parties. Merrigan raises money for Kerry, while other partners are working for Bush. "You have to respect your partners' pursuits," he says.
But experts expect the change in campaign laws to keep the contests cleaner. "The absence of soft money in the national party fund-raising scheme is a big step forward," Potter says. "Corruption comes from huge contributions, not from a large war chest of small contributions."

?2004 ABA Journal
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Analysis: Medco Deal Lifts Secrecy Veil
Posted April 27, 2004
By Ellen Beck

A $29 million settlement outlined yesterday between the nation's largest pharmaceutical benefit-management (PBM) company and state and federal officials could begin to lift a veil of secrecy surrounding rebates and discounts paid to companies that will play a major role in the new Medicare prescription-drug benefit.
Medco Health Solutions of Franklin Lakes, N.J., agreed to settle allegations by a 20-state task force and partly resolve a federal whistle-blower lawsuit stemming from the common PBM practice of switching patients from one drug to a therapeutically equivalent, but different, medication. One example: A patient taking Celebrex for arthritis might be given Vioxx instead.
PBMs have argued such switches are necessary to help control drug costs, but state and federal officials claim a two-year investigation has shown such deals -- which resulted in higher rebates or discounts for the PBMs -- do not necessarily reduce prices for patients, health plans or employers.
David B. Snow Jr., Medco chairman and president, told reporters during a conference call the litigation had created an "unfair perception" of the company and the "business interests of our clients or investors of our company are best served through a settlement."
Medco, which provides drugs for some 62 million people, did not admit to any wrongdoing. It agreed to pay $20.2 million to the states, either in cash or through free prescription medications targeted for the low-income, elderly and disabled. It will pay another $6.6 million to the states to pay their investigation costs. And it will establish a $2.5 million fund to reimburse patients $25 for any additional testing costs or follow-up visits to their physician because of a medication switch.
The states included in the settlement are Arizona, California, Connecticut, Delaware, Florida, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Nevada, New York, North Carolina, Oregon, Pennsylvania, Texas, Vermont, Virginia and Washington. Ohio and West Virginia are in litigation with Medco, while Tennessee has expressed an interest in pursuing negotiations with the PBM.
The whistle-blower case, brought by the U.S. Attorney for the Eastern District of Pennsylvania, was settled from a business-operation perspective, with the same terms as the states' deal, but Medco and the feds still are negotiating monetary damages.
"Much of this industry's business practices are cloaked in secrecy," Maine Attorney General Steven Rowe told reporters in a separate teleconference. He called PBM drug switching an "intricate card trick" that the settlement "ends now, and all cards must be laid on the table."
PBM business practices are closely held secrets, as noted by General Accounting Office (GAO) investigations into how much savings PBMs provide to consumers and health plans. The GAO noted that although PBMs can save from 18 percent to more than 50 percent for consumers, depending on how a prescription is filled -- e.g., retail or mail-order pharmacy -- it is difficult to discern how much of the total rebates and discounts PBMs negotiate with pharmaceutical companies and others are passed along.
A January 2003 GAO report said therapeutic interchanges encouraged the "substitution of less expensive formulary brand-name medications considered safe and effective for more expensive nonformulary drugs within the same drug class." Two PBMs studied -- in an overall report that included Medco -- disclosed their savings ranged from 1 percent to 4.5 percent in addition to other rebates and discounts.
Medco is required by the settlement to inform physicians and patients the minimum or actual cost savings for health plans and the difference in copayments made by patients when switching medications. It must disclose its financial incentives for drug switches, advise physicians on differences in side effects between prescribed drugs and proposed drugs, reimburse patients for costs of drug switch-related health care, obtain permission from a doctor for all drug switches, tell patients they may decline drug switches and receive the initially prescribed medications, monitor the health effects of drug switches, and adopt a code of ethics and professional standards.
The settlement prohibits Medco from making drug switches when the net cost of the proposed drug exceeds the cost of the currently prescribed drug, when the prescribed drug has a generic equivalent and the proposed drug does not, when a change is made to avoid competition from generics, or if the change comes more than once in two years within a therapeutic class of drugs.
Snow said most of the operational changes stipulated in the agreement already are in practice and would help Medco become the "most transparent company in our industry." He said the deal would ensure a consistent standard of performance for Medco. He added that first-quarter 2004 earnings, which are to be announced today, would not be changed by the settlement.
Massachusetts Attorney General Tom Reilly said Medco has paid that state an additional $5.5 million to drop its plans to join the federal whistle-blower suit. "This is a vitally important case," he said, because Medco is expected to be one of the major players as a vendor of the upcoming Medicare prescription-drug discount card, which begins in June, as well as in the delivery of the formal prescription-drug coverage beginning for seniors in 2006.
"There is no framework for governing PBM practices," Reilly said. "We have begun to set standards to protect patients -- not just now but in two years when PBMs" begin to play a critical role in Medicare.
Iowa Attorney General Tom Miller said requiring the PBM to disclose total revenues and rebates on a macro level "opens up the ability to negotiate over those important issues that haven't been disclosed or have been negotiated" in the past. "We're very hopeful we've changed the course of an industry here," Miller said. "The potential for beneficial change here is high."
Snow called the settlement a "constructive approach to resolving issues raised by the attorneys general and the Justice Department" and said it "serves the interests of our company and our customers -- extending across our book of business elevated standards of practice that are designed to help our clients, and their employees or members, better understand and trust the value delivered through their pharmacy-benefit program."
Ellen Beck is the health-policy editor for UPI, a sister news organization of Insight magazine.
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U.S. confirms insurgents have SA-16 anti-aircraft missile

SPECIAL TO WORLD TRIBUNE.COM
Thursday, April 29, 2004
BAGHDAD -- U.S. military commanders said Sunni insurgents in Iraq have obtained the SA-16 surface-to-air missile. The SA-16 is a modified version of the older SA-7 and represents a greater threat to U.S. and coalition aircraft.
The SA-16 anti-aircraft missile.
U.S. Army Brig. Gen. Mark Kimmitt, deputy director of military operation, said a U.S. military raid netted a range of Soviet-origin anti-aircraft missiles. He said they included the SA-16 and SA-14 missiles.
"The operation resulted in the capture of one enemy personnel, and also confiscated were an SA-16 missile, an SA-14 missile, two 82-millimeter systems, 31 rocket-propelled-grenade rounds, and a large quantity of small arms and ammunition," Kimmitt said.
The SA-16 has a range of five kilometers and is guided by a infrared and optical seekers, Middle East Newsline reported.
The SA-16 is a man-portable air defense system and was believed to have been fired against U.S. aircraft in Iraq. About 16 U.S. helicopters have been downed in Iraq since May 2003 by such weapons as surface-to-air missiles and rocket-propelled grenades.
The Iraqi version has a red front end missile seeker, the first such a coalition was seen on an infrared missile, the London-based Jane's Defence Weekly said. The modification was believed to have been conducted by Russia or another republic of the former Soviet Union.

Copyright ? 2004 East West Services, Inc.
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South Korea: The weak link

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See the Sol Sanders Archive

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By Sol Sanders
SPECIAL TO WORLD TRIBUNE.COM
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April 29, 2004
Volatility is increasing on the Korean Peninsular whatever Vice President Cheney accomplished in his recent visit to the area. It requires more attention from the Bush Administration, mired down in defending its Iraq policies and amidst an increasingly bitter presidential election campaign.

Having chosen aligning North Korea's neighbors to halt a go-for-broke nuclear weapons race in East Asia, it now faces some uncomfortable realities. Not the least is the increasing alienation of South Korea from its U.S. alliance.

It has not been a sudden process. Despite close ties to the American media and the Clinton Administration, Washington views of former President Kim Dae Jung's "sunshine policy" had come a cropper long before he left office. Under the table payments to meet North Koreans, failed private and public sector economic schemes, Pyongyang's continued archetypical propaganda and infiltration provocations - all indicated how foolish were hopes the 50-year-old ultra-Stalinist regime could be "bought off". The failure of President Clinton's "framework" to end North Korea's weapons program [notwithstanding former Secretary of State Madeleine Albright's dance party with Dictator Kim Jong-il] was the culmination.

The Bush Administration [with its famous denunciation of "the axis of evil"] turned its back on this policy. When it looked for alternatives, given the vulnerability of Seoul's third of South Korea's population under the barrels of North Korean artillery, and its preoccupation with Islamic terrorism, Bush chose to try to build an alliance by those threatened. It was argued, logically, a nuclear-clad North Korea was not only a threat to Japan [threatened by a missile overflight in 1998], Russia [tenuously holding on to its Siberian territories], to China [which had to see, logic held, it had built a Frankenstein on its doorstep], as well as American interests in East Asia for peace and stability.

Most of all, logic would hold, it was North Korea's former victim, the South, that had most to lose. But not only did South Korea's Kim hang on his bankrupt clich?s, but he promoted a successor who believed even more fervently in a compromise with the North. Erratic, amateurish, churlish [he made a totem of the fact he had never visited the U.S.], Kim's successor, President Kim Roh Moo-huyn has compounded his predecessor's foibles.

In one of history's bad sociological jokes, Roh and his Taliban advisers [as one of the Korean government professionals called them] have just won a massive electoral victory based on appeals to the new youth culture in South Korea. He pushes even harder for accommodation with the North whatever the price. But unlike his more na?ve young followers [unemployed often because they refuse to dirty their hands], there is a cynical but fallacious calculation. Roh shares the view of his Chinese interlocutors, namely the greater threat is the implosion of the economic and intellectually bankrupt North Korea. For China, it would mean greater difficulties in its northeast "rust belt". Already the amazingly entrepreneurial three million ethnic Koreans there [with some quarter of a million refugees from across the border] have become restless. Beijing recently replaced its People's Armed Police [increasingly the dumping ground for demobilized People's Liberation Army "surplus"] there. PLA military had to police a breakdown in the "security organs" which saw North Korean refugees bound into diplomatic cantonments from Shenyang to Chieng Mai and shoot-outs between Chinese police and North Korean military black marketeers.

That's why the horrendous railway disaster on the North Korean-Chinese border takes on new meaning. If it were, indeed, only a stupid accident as Pyongyang, Seoul, and Washington publicly are insisting, then it is another indication Pyongyang's lifeline is shredding. None of the several explanations indicate anything less than a virtual collapse of rail traffic management on the most important lifeline bringing in the 80 percent of North Korea's fuel and food from China. If, on the other hand as there is considerable circumstantial evidence, it was a failed attempt to blow Kim Jong-il right out of his caviar and French sweets into the anonymity of history's tyrants, it is more evidence how fragile the situation is on the peninsular: Chaos in one of the surviving Communist states with primitive nuclear weapons?

Some of Roh's advisers have said they fear a North Korean implosion more than they fear a nuclear-armed neighbor. Certainly, they are traumatized by the possibility of inheriting what they fear would be an economic black hole [like the former reunited East Germany ]. They had rather fantasize Kim is moving toward liberalization [by permitting the starving to swap vegetables in local markets] - or that "the China boom" which has made Beijing its No. 1 trading partner is going to rescue their still unreformed economy.

Whatever these pipe dreams, as the U.S. tries to put together an alliance of like-minded to pressure Pyongyang - with the threat of UN sanctions, an embargo, even eventual military action - it now has as a principle obstacle the South Korean leadership.

Sol W. Sanders, (solsanders@comcast.net), is an Asian specialist with more than 25 years in the region, and a former correspondent for Business Week, U.S. News & World Report and United Press International. He writes weekly for World Tribune.com.

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>> SEE JIANG'S SMILE/GRIMACE? CAN YOU TELL? NO! ITS A SMILE...

http://story.news.yahoo.com/news?tmpl=story&cid=516&ncid=731&e=4&u=/ap/20040429/ap_on_re_as/koreas_nuclear


Nations to Hold Talks on N. Korean Nukes
Thu Apr 29, 4:16 AM ET

By SANG-HUN CHOE, Associated Press Writer

SEOUL, South Korea - The six nations negotiating the North Korean nuclear standoff will hold low-level meetings on May 12 in Beijing to lay the groundwork for the next round of talks, South Korea (news - web sites) and China said Thursday.
Reuters
Slideshow: North Korea
The apparent breakthrough comes as the United States reportedly prepares to upgrade its estimate of North Korea (news - web sites)'s nuclear arsenal to at least eight atomic weapons, from its long-standing estimate of "possibly two."
The report, disputed by Seoul, is being prepared by U.S. intelligence officials to account for strides North Korea has made since last year, when it restarted its nuclear reactor and plutonium reprocessing facility in Yongbyon, the Washington Post reported Wednesday, citing unnamed officials involved in the estimate overhaul.
The officials have also concluded that a separate uranium-based nuclear program will be operational by 2007, producing enough material for as many as six additional weapons a year, the report said.
An upgrade would be seen as upping pressure on other participants in the six-nation negotiations to back Washington at the table. U.S. State Department spokesman Adam Ereli called the report "speculative."
In Seoul, South Korean Deputy Foreign Minister Lee Soo-hyuck quoted U.S. authorities as saying that the Washington Post report was "groundless."
Lee said that an estimate of eight nuclear bombs is based on the assumption that the communist state has reprocessed all its 8,000 spent nuclear fuel rods.
The rods, if chemically treated, can yield enough plutonium for several bombs. North Korea says it has reprocessed all and is already increasing its "nuclear deterrent." Speaking at a news conference, Lee said: "There is no scientific proof that the North has reprocessed all the 8,000 rods."
South Korea believes the rival North has enough nuclear material to build one or two nuclear bombs.
Lee said that the six nations involved in resolving the dispute -- the United States, China, the two Koreas, Russia and Japan -- are scheduled to begin working level talks May 12 in the Chinese capital.
In Beijing, Chinese Foreign Ministry (news - web sites) spokesman Kong Quan said the "fundamental goal" of the so-called working-group meetings was to prepare for a third round of six-party talks to be held by the end of June.
Lee said South Korea, the United States and Japan would consider giving the North energy aid if it freezes all its nuclear facilities, including those for power generation, with the condition that it will eventually completely dismantle them.
"As we go into these talks, our principal position remains the same and unchanged, that North Korea should dismantle its nuclear facilities completely and that we cannot tolerate North Korea possessing nuclear weapons," Lee said.
The nuclear standoff began in October 2002, when U.S. officials said North Korea admitted having a secret nuclear program in violation of a 1994 pact.
North Korea says it will dismantle its nuclear weapons facilities only if the United States provides economic aid and makes a nonaggression pledge. The United States demands that North Korea first scrap all its nuclear facilities.
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South Korean Ship Brings Aid to N. Korea
Wed Apr 28, 3:29 PM ET

By HANS GREIMEL, Associated Press Writer

SEOUL, South Korea - A South Korean ship brimming with instant noodles, blankets and bottled water sailed Wednesday for North Korea (news - web sites) as an international effort intensified to help thousands injured or left homeless in last week's deadly train explosion.
AP Photo
AP Photo
Slideshow: DeadlyTrain Explosion in N. Korea
Seoul also moved closer to approving a controversial North Korean plea for millions of dollars in additional aid, including 50 color television sets. The request came a day after impoverished North Korea rejected Seoul's offer to send doctors, saying it already had enough medical help.
North Korea, meanwhile, lauded the "heroic deaths" of four people killed after running into collapsing or burning buildings after the explosion to retrieve portraits of leader Kim Jong Il and his late father, national founder Kim Il Sung.
"The Korean people's spirit of guarding the leader with their very lives was fully displayed," the North's official KCNA news agency said, adding that teacher Han Jong Suk, 56, "breathed her last with portraits in her bosom."
The leaders are objects of a pervasive personality cult in the communist North, with father-and-son portraits hanging in every home and building.
North Korea likened Thursday's train blast in Ryongchon, a town of 130,000 near the Chinese border, to "100 bombs, each weighing one ton" going off at the same time.
The death toll stood at 161, with 370 victims still hospitalized. About 250 of the hospitalized victims were children.
KCNA also said the explosion left many victims "deaf and blind" and destroyed at least 8,100 homes and more than 30 public buildings.
Many suffered severe burns and eye injuries from the blast's shock wave of glass, rubble and heat, and about 20,000 rescuers were on the scene, it said.
North Korea estimated the damage in Ryongchon at $356 million, and KCNA warned Tuesday that "the damage is unexpectedly gaining in scope."
International aid agencies have put no price tag on reconstruction. The North's damage estimate far outweighs what donors have promised, fueling speculation that Pyongyang is trying to gain as much aid as possible.
The North's rejection of Seoul's offer to truck supplies overland, across the heavily fortified no man's land separating the rivals, riled some south of the border. The refusal meant supplies that could have been sent in the same day would now arrive by ship late Thursday at the earliest, a week after the disaster.
Pyongyang's insistence that it already had enough doctors also generated an incredulous response.
"Given the reality in the North, who would believe that?" the JoongAng Ilbo daily said Wednesday in an editorial. "North Korea needs to learn how to accept a genuine offer of help for what it is."
Hospitals lack basic supplies, like intravenous drips needed to treat burn patients. The World Health Organization (news - web sites) listed antibiotics, eye drops and burn kits as the greatest needs.
Norbert Vollertsen, a German doctor who worked in the North before communist authorities expelled him in late 2000, said doctors there use ordinary razor blades for surgery and empty beer bottles for intravenous drips.
"North Korea blocks trucks with South Korean aid at the inner Korean border while desperate children die," he said.
Pyongyang "does not care about human lives, burned children are kept as hostages to ask for foreign money," he said.
During a Tuesday meeting with South Korean officials, North Korea reportedly asked for 50,000 tons of cement, 10 bulldozers, 10 steam shovels, 500 tons of diesel oil, 500 tons of gasoline, 1,000 tons of steel beams, 1,500 sets of school desks and chairs, 50 blackboards, 10,000 tons of foods and 50 television sets.
South Korean Foreign Minister Ban Ki-moon said Wednesday that Seoul was likely to provide the assistance, which could cost up to $29 million.
Thousands of people were living in tents without adequate sanitation or water, and a team of foreign aid workers visited Ryongchon on Wednesday to assess the situation.
Relief workers described people struggling to rebuild with their bare hands.
The United States, China, Australia, Japan and Singapore are among nations that have offered aid, and Germany said it would donate $119,000 to buy food and building materials. KCNA said Wednesday that a first installment of Russian relief aid valued at roughly $472,000 arrived -- including medicine, tents and blankets.
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China's rising power shortages cause anxiety
By Richard McGregor in Shanghai and Alexandra Harney in Beijing
Published: April 28 2004 12:03 | Last Updated: April 28 2004 12:03
China's growing power shortages are causing rising anxiety among foreign investors and prompting criticism that city and local governments are not providing clear and timely information about shutdowns to factories.
Power is already being rationed in and around Shanghai and Guangzhou, the heartland of foreign investment in China, and shutdowns are expected to increase when demand rises over the summer.
City officials in Shanghai have had a number of meetings with multinational executives, but have yet to provide them with any schedule for when factories will lose power.
"They are yet to come out with a plan that will make most people happy," said Sydney Chang, a Shanghai-based executive who convened the meetings.
The government has decided to increase tariffs during the daytime peak periods to encourage a change in usage and may also close down all schools and universities over summer to further reduce power consumption.
But Peter Borger, an executive vice-president in Shanghai for Siemens, one of China's largest foreign investors, said he did not think that the city could make up a shortfall of about 4m megawatts of power, which is equal to about 20 per cent of total consumption in the area.
"In our [12] factories, we need a lot of advance notice of when it is happening," he said.
Power supply in the southern province of Guangdong, home to the Pearl River Delta manufacturing hub, is tightening as well, raising the cost of doing business there.
In the capital city of Guangzhou, authorities are forcing 4,000 local companies to shut off their electricity two days a week to prevent an overload of the power grid.
Another 100-odd companies are being asked to lower power consumption by 10-20 per cent, according to official media.
One Guangzhou factory manager said the government had been shutting off its power supply for two days a week since February as part of a programme of rolling blackouts.
In industries such as technology, where even a few hours delay can mean the loss of a customer, single-factory generators are already essential.
In the garment industry, managers are shifting production out of cities where the shortages are most severe into factories in areas with relatively reliable supply, putting pressure on new parts of the power grid.
Many factories around Shanghai in Jiangsu province have been installing generators as well, which in turn has resulted in shortages of diesel fuel
"One of my factories has a person whose sole job is to look for diesel fuel," said Diane Long, a vice-president for Liz Claiborne, the US apparel company, in Shanghai.
Shanghai will be bringing extra power on line gradually over the next few years, and has pledged to double generating capacity by 2010.
But executives say they expect shortages to continue until at least 2006, a problem that may slow further foreign investment into China.

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Diesel Fouls Marsh Near San Francisco

Apr 29, 7:26 PM (ET)
By TERENCE CHEA
SAN FRANCISCO (AP) - A pipeline that pumps petroleum from refineries in the San Francisco Bay area ruptured, gushing diesel fuel into a marsh that serves as a key nesting ground for migratory birds and prompting an emergency cleanup effort Thursday.
The exact amount spilled into Suisun Marsh, about 25 miles northeast of San Francisco, won't be known until the pipe is fixed and refilled, officials said. A worst-case scenario put the damage at 1 million gallons, said Mark Merchant, a spokesman for the Environmental Protection Agency.
However, the spill may involve only a few hundred gallons, said Dana Michaels, a spokeswoman for the California Department of Fish and Game, and was limited to a diked area of roughly 600 acres, so that the fuel can't escape to the rest of the marsh.
About 50 workers from state and federal agencies were using containment booms and absorbent pads to clean up the spill, which left a sheen atop the water, said Jerry Englehardt, a spokesman for Kinder-Morgan Energy Partners, which owns the pipeline. He described the spill as "relatively small."
The pipeline, which carries fuel from San Francisco Bay area refineries to Reno, Nev., ruptured sometime Tuesday. Kinder-Morgan noticed a drop in pipeline pressure around 6 p.m. Tuesday night and shut down a section of the pipeline, Michaels said.
Environmental officials were told about it Wednesday, and the leak was expected to be repaired late Thursday.
The Suisun Marsh is considered the state's second-largest natural marsh, according to Greg Green, a biologist for Memphis, Tenn.-based Ducks Unlimited, a wetlands conservation group. But it's also a highly managed area, with large sections diked off to control the flow of water.
"It's an important area for biological purposes," Green said. The marsh covers 57,000 acres and is frequented by about 700,000 birds, including migratory shorebirds and raptors.
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>> UN COVER UP CONTINUED...



U.N. OIL PAPERS VANISH

By NILES LATHEM

April 29, 2004 -- WASHINGTON - The vast majority of the United Nations' oil-for-food contracts in Iraq have mysteriously vanished, crippling investigators trying to uncover fraud in the program, a government report charged yesterday.
The General Accounting Office report, presented at a congressional hearing into the scandal-plagued program, determined that 80 percent of U.N. records had not been turned over.
The world body claims it transferred all information it had - including 3,059 contracts worth about $6.2 billion for delivery of food and other civilian goods to the post-Saddam governing body, the Coalition Provisional Authority.
But the GAO report also found that a database the U.N. transferred to the authority was "unreliable because it contained mathematical and currency errors in calculation of contract costs," the report found.
The GAO findings, which were aired at a hearing of the House International Relations Committee, raise new questions about corruption and mismanagement in the biggest-ever U.N. aid program - and what has been called the biggest financial scandal in history. An earlier GAO report said Saddam ripped off over $10 billion.
Committee Chairman Henry Hyde said the report raised serious concerns - and could have "a potential impact on the reputation and credibility of the United Nations."
"If these charges prove true, some of the obvious victims are those Iraqis who failed to receive needed assistance," Hyde (R-Ill.) said.
"But the damage extends further. The massive windfall resulting from this organized theft allowed Saddam to maintain his grip on the country, line his pockets and make companies and countries dance to his tune, with consequences we are still trying to contain."
Investigators are interested in Benon Sevan, the U.N. official who managed the program. Sevan denied wrongdoing after his name appeared on an Iraqi newspaper's list of several officials, businessmen and others who profited from the program.
The oil-for-food program, which the U.N. ran from 1997 until the war, allowed Iraq to sell oil in order to buy food and other civilian goods - thereby easing the sanctions imposed after the 1991 Gulf War.
A former oil-for-food program coordinator testified at yesterday's hearing that in the early stages his U.N. superiors were openly hostile to U.S. efforts to contain Saddam.
"For reasons I have yet to fully understand, several U.N. leaders approached the implementation of the oil-for-food program with more distrust towards the United Kingdom and United States than towards the regime of Saddam Hussein," Michael Soussan said.
U.N. Secretary-General Kofi Annan fired back.
"If you read the reports, it looks as if the Saddam regime had nothing to do with it. They did nothing wrong - it was all the U.N.," Annan said.



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Annan says some Oil-for-Food charges 'outrageous,' probe will clarify issues

28 April 2004 - While reiterating his determination to "get to the bottom" of allegations surrounding the United Nations Oil-for-Food programme in Iraq, Secretary-General Kofi Annan today stressed that some of the issues have been blown out of proportion and the UN has been unfairly blamed for things that had been beyond its control.

"[S]ome of the comments that I have read have been constructive and thoughtful. Others have been rather outrageous and exaggerated," the Secretary-General said, responding to questions from reporters during a news conference at UN Headquarters in New York. "If you read the reports, it looks as if the Saddam regime had nothing to do with it - they did nothing wrong; it was all the UN."

Referring to the frequently cited issue of oil smuggling, for instance, Mr. Annan emphasized that the UN actually had no mandate to do it. "There was a maritime task force that was supposed to do that," he said. "They were driving the trucks through northern Iraq to Turkey. The US and the British had planes in the air. We were not there. Why is all this being dumped on the UN?"

On the general process for the approval of contracts, he noted that the Security Council's "661 Committee" was responsible for approving contracts or putting them on hold. "Of course the Member States are not coming out saying, 'We had a role,' or, 'We had an oversight responsibility,' so all is dumped on the Secretariat."

Mr. Annan, who last week named former United States Federal Reserve Board Chairman Paul Volcker to lead an independent probe of the alleged improprieties, voiced hope that the inquiry "will clarify the issues."

In response to other questions, the Secretary-General defended his son's involvement with a company that did business with the Oil-for-Food programme and said the allegations against him were groundless.

"Let me say that there is nothing in the accusations about my son. He joined the company even before I became Secretary-General, as a 22-year-old, as a trainee in Geneva, and then he was assigned to work for them in West Africa, mainly in Nigeria and Ghana. Neither he nor I had anything to do with contracts for Cotecna. That was done in strict accordance with UN rules and financial regulations," he said.

"Be as it may, these allegations are doing damage, and we need to face it sternly and do whatever we can to correct it," he added, expressing hope that "once the panel's report is out some of the issues of corruption will also be dealt with, because we want to get to the bottom of that too."

The Secretary-General also noted that the panel had the full backing of the Security Council, which adopted a resolution including language calling on countries' regulatory agencies to cooperate fully with its work. "The Council members have indicated they would [cooperate fully], and they are urging other Member States to do the same," he said.

"If at the end any UN staff members are found guilty of wrongdoing, we will deal with them," he emphasized. "In some situations we may even want to lift the immunity of the staff so that we do not impede the judicial process."

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Independent inquiry will yield facts on Iraq Oil-for-Food Programme - Annan


22 April 2004 - Secretary-General Kofi Annan today voiced confidence that an independent panel into allegations of corruption in the United Nations Oil-for-Food Programme will yield results, and voiced hope that its work would proceed apace.
"I'm very keen on Mr. [Paul] Volcker, Judge [Richard] Goldstone and Mr. [Mark] Pieth to really get to work and give us a report as soon as possible," the Secretary-General told the press this morning, referring to the members pursuing the inquiry.
Responding to a question about the former head of the Programme, Benon Sevan, who has been the subject of numerous allegations in the press, Mr. Annan said, "He should and will be available for the investigation, and we are discussing how to make sure that he will be available."
"He has indicated he will cooperate as I expect all other staff members to cooperate," the Secretary-General emphasized.
Mr. Annan also underscored the value of the relief effort for Iraq. "It is unfortunate that there have been so many allegations, and some of it is being handled as if they were facts, and this is why we need to have this investigation done," he said.
"In all this what has been lost is the fact that the Oil-for-Food Programme did provide relief to the Iraqi population; every household was touched," he said. "With the government, we set up one of the best distribution systems, to such an extent that even some suggested we should use the distribution cards for elections, to show you how pervasive [it was], so that should not be overlooked."
Begun in 1997, the Oil-for-Food Programme, over the course of six years, oversaw the delivery of some $39 billion worth of humanitarian assistance. Virtually all Iraqis benefited from the country-wide food network, and 60 per cent were totally dependent upon the food assistance. The nutritional value of their daily food basket nearly doubled between 1996 and 2002, to about 2,200 kilocalories per person per day. During the same period, malnutrition rates of children under five fell by half in the centre/south; and in the northern governorates, chronic malnutrition fell by 56 per cent, with a 44 per cent reduction in the incidence of underweight children.
"The fact that there may have been wrongdoing by a few should not destroy the work that many hard working UN staff did," Mr. Annan said.
He also pointed out the importance of distinguishing who was responsible for illegal activities. "If the Iraqi government has smuggled oil and done all sorts of things, I don't think it is fair to lump it all together and blame the UN and the Secretariat, because there are things that were definitely beyond our control, not only the Secretariat, but even the Member States."
"Once the issues have been looked at and separated, I hope people will put things in perspective and will be able to get the facts out," he said.
Mr. Annan also repeated his earlier pledge to act against those found to have committed any wrongdoing. "As I said, if UN staff are found to be guilty, we will deal with them very severely."
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GET TO ELECTIONS - FAST

By GEORGE F. WILL

April 29, 2004 -- WHEN a student said he had consulted the great philosophers without finding evidence of God, Benjamin Jowett, master of Oxford's Balliol College from 1870 to 1893, replied, "If you don't find a God by five o'clock this afternoon, you must leave the college." Deadlines can be useful spurs.
But they also can be foolish fixations. On June 30, the deadline for transferring "sovereignty" to something Iraqi, no such thing will happen. There will be nothing to receive real sovereignty, and the United States, whose writ does not run throughout Iraq, does not yet possess real sovereignty to give away.
The new faux government will lack two main attributes of sovereignty - a monopoly on the legitimate use of violence and the ability to make laws.
* U.S. responsibility for using violence to maintain - actually, to create - order will remain.
* And Lakhdar Brahimi, the U.N. envoy to whom President Bush has delegated the task of devising the interim government that will serve until January elections, says the interim government should not legislate.
We may call this a government, but as Lincoln said: If I call a dog's tail a leg, how many legs does the dog have? Five? No, four, because calling a tail a leg does not make it a leg.
Brahimi is a useful reminder of how limited are the U.N.'s uses. He says Israel is complicating his governmental carpentry in Iraq, and force is "never" the right answer to problems such as the seizure of Fallujah by armed insurgents. So, calm would come to Iraq if Israel returned to the 1949 armistice lines?
Brahimi is called the best the "international community" has to offer, which may be true.
U.S. forces in Iraq can never be at the disposition of such people. Which makes it especially urgent to get to elections, the only possible source of legitimacy for an Iraqi government. The one clear use for the U.N. in Iraq is to help conduct elections. This prophylactic dose of U.N. involvement should reduce the need for any more involvement of the likes of Brahimi.
Elections should assure the Shiite majority that they will rule, thereby concentrating their minds on the practicalities of governance. Elections will put the Sunnis on notice that they must come to terms with majority rule.
Might elections provoke a Shiite-Sunni civil war? Yes. The presidential election of 1860 catalyzed the American Civil War. But in Iraq, civil war might be preferable to today's combination of disintegration tempered by violent Sunni-Shiite collaboration against U.S. supervision.
There is no historical precedent for the position the United States is now in. The fate of an immensely important undertaking - the entire Iraqi project - rests on the good will, or at least the forbearance, of one reclusive, inaccessible man, the Grand Ayatollah Ali Sistani, who has never consented to meet with Paul Bremer, the president's man in Iraq. Sistani has it in his power to make the U.S. presence in Iraq untenable.
Democracy is not merely majority rule but it is essentially majority rule. Democracy should restrict the rights of a majority to work its will and should protect minority rights. Ideally, majorities should be unstable, shifting coalitions of minorities. This is why James Madison sought a geographically "extensive" and sociologically complex society that would generate a wholesome multiplicity of factions, which is the best guarantee against the tyranny to which democracies are prone, the tyranny of the majority.
But regardless of what democracy should do, broadly and over time it must mean majority rule. In Iraq, the Shiite majority needs to be assured now that it will rule soon.
Violent Sunnis must be crushed. Shiites need an incentive - protecting their capacity to rule after elections - to crush them and to discipline their own ranks. Iraq's third component, the Kurds, have representative institutions up and running, and an army to strengthen their hand in negotiating favorable parameters of federalism. They also seem amenable to a U.S. military presence in their midst.
The results of elections, including theocratic elements, may be markedly unlovely. That may break the big hearts of those in the U.S. government who hope for a luminously liberal democracy to shame the entire Middle East into emulation, thereby justifying the war originally justified primarily by the threat of Iraqi weapons of mass destruction. But pursuit of that ideal can impede achievement of something tolerable - a stable, perhaps illiberal, even authoritarian Iraq which cooperates in the war against terrorism.

Call this an exit strategy.

E-mail: georgewill@washpost.com


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GETTING IRAQ RIGHT

By RALPH PETERS
April 29, 2004 -- WHERE'S Rudy Giuliani when we really need him? Looking back on a year of mistakes in Iraq, it's clear he would have been a better choice to run our occupation than those we sent.
Hizzoner's great insight was a blinding flash of the obvious: Respect for the law in great things starts with respect for the law in small things. Want to reduce urban violence? Bust the juvie who jumps the subway turnstile. Before he kills somebody.
It's appalling how we've blustered on about building a civil society and a rule-of-law democracy in Iraq, while letting the streets degenerate into a wilderness. It began with the post-war orgy of looting. Our over-confident leaders looked away. Yes, some of the initial destruction after Saddam's fall was an inevitable blowing off of steam by a long-oppressed population. But gutting museums, libraries and hospitals didn't fall into the post-game-exuberance category.
We never made more than a half-hearted effort to enforce order on Iraq's streets thereafter. Often, we made no effort at all - in terror-cities such as Fallujah, Ramadi or Samarra. Even when street thugs danced atop damaged U.S. vehicles in Baghdad, we treated them as if they were respectable citizens expressing their rights of free speech.
The truth is that, after conquering a vast state and deposing a monstrous dictator, the Bush administration didn't really want to get involved.
News from the briar patch, guys: We're in it now.
If anything has encouraged insurgents, terrorists and opportunist thugs in Iraq, it's been our lack of resolve to enforce order. The effect has reached beyond the country's borders. We've never made a serious effort to view our actions (or inaction) through regional eyes - except to recite mistaken claims that we mustn't use too much force for fear of alienating those who are already our enemies.
Whether among the confused people of Iraq or in the squalor of the greater Arab world, those images, repeated almost daily, of Iraqi gangstas jumping up and down on our burned-out combat vehicles created, then reinforced, the impression that American troops not only could be defeated, but were being defeated.
The truth was irrelevant. In the age of the satellite dish, the image trumps all. The greatest recruiting tool for our enemies in Iraq and beyond its borders has been those clips of Iraqis plundering disabled Humvees with impunity.
It may be too late to recover the chips we've squandered at the strategic poker table. But we have to try our damnedest to come from behind.
In addition to the military reduction of the last breath of resistance in Fallujah and the arrest or killing of the renegade cleric Muqtada al-Sadr in Najaf, we need to change the rules on Iraq's streets.
If any adult touches a damaged or destroyed U.S. military vehicle, he must be shot. Start with a one-week warning period to get out the new rules. Then execute. The Iraqis playing trampoline on the hoods of our charred vehicles aren't the ones who will build a better future.
As for the juvies, send them to reformatory camps. No exceptions, even if daddy's the Sheik of Araby.
If we can't or won't bring order to that festering country's streets, we'll never see a lawful state emerge. I still believe that most Iraqis want democracy - in some adjusted form that gives them a voice in their country's affairs. But they want and need security even more. You can't build a legal economy or hold honest elections if you can't control the neighborhoods in broad daylight.
Law first, then democracy. Sorry, but it doesn't work the other way around.
The lack of resolution and common sense on the part of the Coalition Provisional Authority has plunged Iraq into crisis. You can't change history's direction on the cheap. From turning a corner six months ago - we were doing exactly that - our diplomats' taste for displays of weakness and empty "negotiations" dragged the country back from the brink of success.
So, as the hordes of punk terrorists are merrily ringing our doorbell, here are "three simple rules for dating Iraq":
Bring order to the streets, no matter what it takes: If you shoot plunderers and the Arab world wails, too bad. If we won't pay the price of unpopularity in the short-term, we'll fail and be despised for decades to come. Changing the direction of the Middle East is not about immediate popularity - it's about go-the-distance effectiveness.
Never interrupt an ongoing military operation for "negotiations": Finish the job, then talk. In the Middle East, strength, not chitchat, elicits respect.
Add the stick to the carrot: Stop this nonsense of trying to bribe terrorists and murderous Ba'athists to love us. Instead of pouring money into cities and town that kill American soldiers, expend development funds on the communities that behave. The present policy of rewarding those who assassinate our troops is as unacceptable as it is counterproductive.
This doesn't take a genius. Just the sort of common sense that Rudy Giuliani brought to the greatest city in the world. Baghdad doesn't need another "brilliant" diplomat. It needs a Wyatt Earp.

Ralph Peters is the author of "Beyond Baghdad: Postmodern War and Peace."
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Rejecting the All-or-Nothing Approach in the Moussaoui Case and the Guantanamo Detainees Oral Argument
By MICHAEL C. DORF
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Wednesday, Apr. 28, 2004

In two cases last week, the federal courts appeared to reject the Bush Administration's contentions that national security requires that civil liberties be entrusted to the Executive Branch during wartime.

The first case was Rasul v. Bush and Al Odah v. United States. Last week, during oral argument in the Supreme Court, most of the Justices seemed dubious that prisoners at Guantanamo Bay Naval Base could be completely denied access to civilian courts.

The second case was that of the alleged "twentieth hijacker," Zacarias Moussaoui. A federal district judge had held that Moussaoui's Sixth Amendment right to call witnesses entitles him to introduce some exculpatory evidence obtained by the United States from suspected foreign terrorists currently in U.S. custody. Last week, a three-judge panel of the Fourth Circuit Court of Appeals largely agreed.

If there was a common theme in the Supreme Court and the Fourth Circuit, it was an emphasis on pragmatic compromise--and rightly so. The striking of a balance between security and liberty may seem like the obvious role of the courts in troubled times. Yet much of the debate over civil liberties in wartime has, to this point, been framed in all-or-nothing terms. Against that backdrop, the courts' efforts to find a middle course are welcome.

The Guantanamo Bay Case: Justices Suggest a New Interpretation of Precedent

By treaty, the United States holds a permanent lease on Guantanamo Bay, while Cuba remains nominally sovereign. The issue in Rasul and Al Odah is whether, given these facts, the naval base at Guantanamo Bay is U.S. or foreign territory.

Prior to this week's oral argument, it was generally understood that if Guantanamo were held to be foreign territory, that would be the end of the matter. That was because most observers had interpreted a 1950 Supreme Court precedent, Johnson v. Eisentrager, to mean that a nonresident alien enemy who has not been held within U.S. territory has no right of access to U.S. civilian courts.

However, during last week's oral argument, several Justices hinted at a different reading of the case: They suggested that Eisentrager permitted the enemy aliens--there, Germans captured in China at the end of World War II--to bring suit, but rejected their claims on the merits. That interpretation would suggest, then, that the Guantanamo detainees have the right to court access even if Guantanamo is held to be foreign territory.


Is the Justices' Proposed Interpretation of Eisentrager Tenable?

The Justices' reading of Eisentrager is, in my view, plausible but strained .

The best evidence for the new view comes from the conclusion of Justice Jackson's opinion for the Court in Eisentrager: "We are unable to find that the petition alleges any fact showing lack of jurisdiction in the military authorities to accuse, try and condemn these prisoners or that they acted in excess of their lawful powers." That language suggests that, if the prisoners had alleged different facts, they might have been entitled to a writ of habeas corpus from a civilian court. And to that extent, it therefore supports the Justices' reading.

But most of the rest of the opinion speaks in categorical terms, denying that the prisoners had "standing" to sue in light of their location.

Of course, Eisentrager is one case from over a half century ago; the Supreme Court may well want to diverge from, modify, or even overrule it. In the end, the Court must decide what rule makes sense going forward. And in that respect, the questions posed at oral argument are encouraging.

The Problem with the Detainees' Argument

The basic problem with the argument on behalf of the detainees in Rasul and Al Odah is that it leads to perverse consequences.

To see why, suppose the petitioners prevail, and the Court rules that Guantanamo Bay should be deemed U.S. territory, so that the writ of habeas corpus is available for civilian courts to examine the lawfulness of persons held captive there.

Even given such a ruling, or government could still easily hold enemy combatants in custody without access to judicial review. To do so, it would simply dismantle the detention center at Guantanamo Bay and move it somewhere that is undoubtedly outside U.S. territory, such as a military base in Afghanistan, Iraq or South Korea.

What would be the point of a constitutional rule that encourages military authorities to hold prisoners in such relatively unsafe locations?

How the Justices Will Probably Avoid a Set of Perverse Consequences

Recognizing the perversity of such a rule, the Justices appear ready to say that at least for prisoners held outside a theater of active hostilities, location outside of U.S. territory does not strip the courts of the power to grant writs of habeas corpus. Under such a rule, even detentions at a military base in Iraq, Afghanistan or South Korea--as well as Guantanamo--would be reviewable in U.S. courts.

At the same time, however, the Justices also appear ready to say that as a matter of substantive law, the courts would grant great deference to the determination of military authorities that custody is lawful. If so, then the result might be that, while noncitizen prisoners held by the U.S. abroad would be able to seek court review, they would be unlikely to prevail on the merits of their cases.

The Moussaoui Case: Allowing The Defendant to Use Exculpatory Statements

Moussaoui faces terrorism charges in federal court. The government hopes to persuade a jury that Moussaoui--who was apprehended and imprisoned before September 11, 2001--was a conspirator in the evil plot of that fateful day. Moussaoui acknowledges membership in al Qaeda, but denies involvement in the September 11th plot.

Moussaoui claims a right under the Sixth Amendment to call as witnesses in his defense a number of other al Qaeda members currently in U.S. custody who, he says, would confirm his account. Last week's ruling by the Fourth Circuit held, among other things, that this right can be vindicated by introducing written accounts of the exculpatory statements the witnesses would provide if actually produced. (The ruling also resolves a number of complex issues and raises troubling questions addressed by Joanne Mariner in a column earlier this week.)

The government had argued that Moussaoui had no Sixth Amendment right to call witnesses outside of U.S. territory--relying, as in the Guantanamo case, on Eisentrager. But the Fourth Circuit rejected this categorical argument. It explained that while national security might be impaired by requiring the government to produce the witnesses in person, existing transcripts of their interrogations were fair game--at least when access was restricted to approved defense lawyers.

The Fourth Circuit staked out a middle ground. Not only did it reject the prosecution's contention that no right to call witnesses existed; it also rejected the defense's contention that if Moussaoui were denied access to the witnesses, his Sixth Amendment right could only be vindicated by dismissing the indictment. As long as statements--though not witnesses themselves--were provided, the court reasoned, the indictment against Moussaoui could still stand.

Accordingly, the court remanded to the trial judge with instructions on how to provide Moussaoui and the jury with access to the witnesses' statements, though not the witnesses themselves.

Avoiding Another Set of Perverse Consequences

As in the Guantanamo case, so too in the Moussaoui prosecution, fear of perverse consequences may have been at work.

Suppose that the court had granted the defense request, and had ordered the government either to produce the witnesses or dismiss the indictment. Surely the government would have dismissed the indictment. But Moussaoui's Sixth Amendment right would hardly be vindicated as a result. To the contrary, Moussaoui would end up with even fewer rights honored.

In a conventional prosecution, dismissal of the indictment means the defendant goes free. But Moussaoui's is not a conventional prosecution. It is a terrorism prosecution of a foreign national.

Thus, if the government were to drop the charges against Moussaoui, he would likely be remanded to military custody, probably at Guantanamo. There, he would either be held indefinitely or tried before a military tribunal with fewer procedural safeguards than are available in federal district court.


The Appeal of the All-or-Nothing Approach

If the balancing and compromises seemingly at work in last week's cases seem sensible, why has the discourse so far been dominated by an all-or-nothing approach?

It's easy to see why the government does not want conventional civil liberties to apply to cases arising out of its pursuit of terrorists. Emphasizing that the United States is currently waging actual wars in Afghanistan and Iraq as well as a metaphorical war on global terrorism, the Administration sees civil liberties as simply too costly. Tools like the presumption of innocence, the right to counsel, and the right to compulsory process for calling witnesses are, in the Administration's view, ill-suited to the battlefield--and in today's wars, that includes the home front.

Perhaps surprisingly, some civil libertarians share the Administration's view that sharp distinctions should be drawn between military and civilian procedures. These civil libertarians worry that when called upon to adjudicate cases involving terrorism, our civilian courts will be so obsessed with national security that they will suspend the ordinary protections of the civilian justice system--and that the compromises made in terrorism cases will gradually undermine the procedural protections of the civilian justice system in all cases. From the war on terrorism, they fear, our courts will fashion rules that are then transported to the "war" on drugs and crime more generally.

These civil libertarians are prepared to strike a kind of deal: Allow some cases to proceed with minimal judicial scrutiny outside of the civilian courts, but, if the Administration makes use of the civilian courts--as it did with John Walker Lindh and is doing with Moussaoui--then insist on the full panoply of procedural protections.

In this view, it would be better for Moussaoui simply to be held indefinitely in a military brig than to be tried in federal court with less than the full measure of access to exculpatory witnesses. At least if he's simply held in military custody, his case sets no precedent for the next alleged drug dealer or racketeer the government wants to prosecute based on evidence obtained from a confidential informant.

The Need for Compromise

The civil libertarians' urge to keep the civilian courts pure and uncorrupted by the messy compromises of military justice is understandable. Nevertheless, in sacrificing Moussaoui and perhaps American citizens such as Jose Padilla and Yaser Hamdi--whose cases the Supreme Court hears today--they risk striking a Faustian bargain.

Sadly, the war on terrorism is not likely to be a brief and passing phase of our national experience. We will face a terrorist threat for years to come, and as the numbers of people who are treated as outside the ordinary civilian justice system reaches into the thousands, it will become increasingly difficult to maintain that we are maintaining the "purity" of that system by anything other than an act of willful blindness.

Accordingly, if we care about the values that underlie our civilian justice system--especially the notion that people should not be imprisoned or executed except upon proof of their guilt after a fair opportunity for them to challenge the evidence against them--we will have to find a way for that system to face the challenges posed by the terrorism cases directly. Last week's oral argument in Washington and the Fourth Circuit's decision in Moussaoui suggest that our courts stand ready to accept that responsibility.

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Michael C. Dorf is Professor of Law at Columbia University. His new book, Constitutional Law Stories, is published by Foundation Press, and tells the stories behind fifteen leading constitutional cases.
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>> COURT AUDIO

High Court Hears 'Enemy Combatant' Cases
http://www.npr.org/rundowns/segment.php?wfId=1861582
?
from All Things Considered, Wednesday, April 28, 2004
Lawyers for Yaser Hamdi and Jose Padilla maintain the United States does not have the right to imprison American citizens indefinitely without holding a legal proceeding. Government lawyers argue that the Pentagon has determined the two men are being treated legitimately, saying the courts should not place impractical burdens on the military during a war. NPR's Nina Totenberg reports.




Can the President Imprison Anyone, Forever?
by Gene Healy
Gene Healy is senior editor at the Cato Institute.
Does the president have the power to order the military to seize an American citizen on American soil, declare him an outlaw to the Constitution, and lock him up for the duration of the war on terror -- in other words, forever? That's the stark question the Supreme Court will be examining today, April 28, when it hears oral argument in Padilla v. Rumsfeld.
Padilla, an American born in Chicago, was arrested by federal agents at O'Hare International Airport in May 2002, and held on a material witness warrant. Two days before a hearing in federal court on the validity of that warrant, the president declared Padilla an "enemy combatant" plotting a "dirty bomb" attack in the United States, and ordered him transferred to a naval brig in South Carolina, 700 miles away from his lawyer. Padilla has been held there for nearly two years without charges or meaningful access to counsel.
There's little in Padilla's background to suggest he's an innocent man wrongly accused -- he's a violent ex-con with apparent ties to Al Qaeda. But "the innocent have nothing to fear" is cold comfort and poor constitutional argument. The very principle that imprisons the guilty can be used to seize the innocent.
And the principle the government is advancing is broad indeed. It amounts to the assertion that the executive branch can serve as judge, jury, and jailer in cases involving terrorist suspects. Of all the powers claimed by the president since September 11, that power is the one most to be feared -- not least because, due to the nature of the war on terrorism, it's a power unlikely ever to be relinquished.
Moreover, it's a power that cannot be found in the Constitution. The Bill of Rights does not come with an asterisk reading "unenforceable during time of war." As the Supreme Court declared in Ex Parte Milligan (1866), rejecting the military trial of a civilian during the Civil War, "The Constitution of the United States is a law for rulers and people, equally in war and in peace, and covers with the shield of its protection all classes of men, at all times."
Congress can suspend the writ of habeas corpus under very narrow circumstances "when in Cases of Rebellion or Invasion the public Safety may require it." But Congress has made no such attempt here -- instead the president has unilaterally stripped Padilla of his rights, holding him without even a semblance of due process.
The government justifies its confinement of Padilla by citing a five-and-a-half-page "Declaration" by Michael Mobbs, an obscure Pentagon bureaucrat who has never been cross-examined by Padilla's attorneys. A look at the Mobbs Declaration reveals just how far down the rabbit hole we've traveled. Of the confidential informants who fingered Padilla, the declaration notes: "Some information provided by the sources remains uncorroborated and may be part of an effort to mislead or confuse U.S. officials.... In addition, at the time of being interviewed by U.S. officials, one of the sources was being treated with various types of drugs to treat medical conditions." Again, that's not to suggest that Padilla is innocent. It's to highlight the starkly extra-constitutional nature of these proceedings -- in which Padilla is not permitted to test the government's evidence in open court.
The government's brief relies heavily on the president's constitutional powers as "Commander-in-Chief" of the U.S. military. But as Justice Jackson put it in a 1952 case delineating the president's wartime authority, "the Constitution did not contemplate that the title Commander-in-Chief of the Army and Navy will constitute him also Commander-in-Chief of the country, its industries and its inhabitants." The Bush administration has repudiated that theory of limited executive power in favor of one that is essentially limitless.
Thus far, President Bush has wielded this vast power sparingly. But he will not be the last president to wield it. The proponents of this sweeping claim of executive power have no answer to that, save to urge us to elect good men. Our entire constitutional structure is based on a repudiation of that fond notion.
Arguing before the Supreme Court in the Milligan case, James Garfield, who would later serve as 20th president of the United States, declared that a decision to uphold the constitutional limits on executive power would show the world "that a republic can wield the vast enginery of war without breaking down the safeguards of liberty." A decision that denies Padilla his day in court will have the opposite effect. It will declare that the articles in the Bill of Rights are mere peace provisions in an era of permanent war. That's a terrifying concept indeed.

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Hamdi and Habeas Corpus
by Timothy Lynch

Timothy Lynch, director of the Cato Institute's Project on Criminal Justice, filed an amicus brief on the behalf of Yaser Hamdi.
The Supreme Court is poised to consider the most important constitutional controversy that has arisen in the aftermath of the September 11 terrorist attacks: Can a U.S. citizen be deprived of all access to a lawyer and family and imprisoned for as long as a president insists? Can the president, in effect, override the ancient writ of habeas corpus?
Today, April 28, the Court will hear the appeal of Yaser Hamdi, a U.S. citizen who is being held in a military brig in Charleston, South Carolina. For almost two years, Hamdi has been held incommunicado -- no contact with visitors, including his lawyer. The Bush administration has maintained that legal counsel is unnecessary because Hamdi has not been charged with a crime; he is instead being held as an "enemy combatant."
On the surface, the Hamdi case appears to be a no-brainer. Hamdi was apparently one of the Taliban fighters captured in a combat zone in Afghanistan. And his claim of U.S. citizenship is about as thin as it gets -- his parents were Saudi citizens who happened to be in the United States on a temporary work visa at the time of Hamdi's birth. Furthermore, the U.S. military has always captured and held enemy fighters in all of our previous wars. Thus, Hamdi's legal appeal seems to be devoid of merit.
A close examination of the Hamdi case, however, shows that the constitutional stakes could not be higher. That's because the Bush administration has been using the Hamdi case to advance a sweeping theory of executive branch power. According to this theory, the president can deprive anyone in the world of his liberty and hold that person incommunicado indefinitely. The president need only be careful to issue an "enemy combatant" order to his secretary of defense, not the attorney general. The president's legal advisers have made it clear that it does not matter if the prisoner is seized on a battlefield overseas or in some sleepy town in the American heartland. And it does not matter if the prisoner is a foreign national or an American citizen. It is because the courts are being asked to approve this broad claim of executive power that Hamdi's case is considered pivotal. This is not just about the imprisonment of one man.
To fully understand the implications of the administration's "enemy combatant" theory, one must first consider the constitutional procedure of habeas corpus. The Constitution provides that "The Privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it." The writ of habeas corpus is a venerable legal procedure that allows a prisoner to get a hearing before an impartial judge. If the jailor is able to supply a valid legal basis for the arrest and imprisonment, the prisoner will simply be returned to his prison cell. But if the judge discovers that the imprisonment is illegal, he has the power to set the prisoner free. For that reason, Joseph Story once described the habeas writ as a "great security" for individual liberty.
Speed up to today: Hamdi's father filed a petition on his son's behalf. The Bush administration responded to that petition by urging the district court to summarily dismiss the petition because the courts may not "second-guess" the president's "enemy combatant" determination. That assertion strikes at the heart of habeas corpus. If the judiciary could not "second-guess" the executive's initial decision to imprison a citizen, the writ never would have acquired its longstanding reputation in the law as the "Great Writ."
Once the Justice Department admits, as it must, that the writ of habeas corpus has not been suspended, the law is clear. Habeas proceedings are habeas proceedings. And that means the prisoner has to be able to meet with his attorney to adequately prepare for their "day in court," where they will have an opportunity to persuade a judge that a mistake or abuse has occurred. It is outlandish to suggest that habeas petitions can be filed, so long as the courts throw the petitions out.
The lower court dismissed Hamdi's habeas petition too casually simply because Hamdi himself has not been heard from. Thus, the Supreme Court should remand the case to the district court for further proceedings. On remand, Hamdi must be allowed to consult with his attorney in private. An evidentiary hearing should then be held and the prisoner should have an opportunity to address the Court and his counsel must have an opportunity to rebut the government's allegations at the hearing. The government must also be given an opportunity to defend the legality of its actions. If it can persuade an Article III judge that this detention is lawful and proper, Hamdi should be returned to the military brig.
The al Qaeda terrorist network is an evil organization that must be vanquished. But as we go about that task, we must not lose sight of what we are defending. Free societies do not "just happen." Freedom in America rests upon a framework of checks and balances that was designed by men who were steeped in history and political philosophy. If that framework is neglected, constitutional guarantees will become nothing more than hollow promises on pieces of paper.

This article was published in The Wall Street Journal, April 23, 2004. Reprinted from The Wall Street Journal ? Dow Jones & Company, Inc. All rights reserved.


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ACLU Reveals Secret Suit Over FBI Powers
Wed Apr 28, 6:23 PM ET Add U.S. National - Reuters to My Yahoo!


By Gail Appleson
NEW YORK (Reuters) - The American Civil Liberties Union (news - web sites) disclosed on Wednesday it had secretly sued the government over a provision of the Patriot Act that allows the FBI (news - web sites) to demand customer records from businesses without court approval.
The ACLU said it initially filed the civil lawsuit under seal on April 6 because it could have been prosecuted for violating a gag order contained within the Patriot Act. It said it chose to make the case public after the government agreed on Wednesday it would not seek a penalty against the ACLU.
But many details of the case, filed in Manhattan federal court, must remain secret.
The defendants include Attorney General John Ashcroft (news - web sites) and FBI Director Robert Mueller. A spokesman for the Manhattan U.S. attorney's office had no comment.
At issue is the power the FBI has to execute what is known as a "National Security Letter," a form of administrative subpoena used to demand confidential financial records from companies as part of terrorism investigations.
Legislation signed by President Bush (news - web sites) in December expands the definition of companies from which information can be obtained and allows FBI agents to send out the letters without first obtaining a judge's approval.
"The National Security Letter provision allows the FBI to demand the sensitive records of innocent people in complete secrecy, without ever appearing before a federal judge," said Jameel Jaffer, an ACLU staff attorney.
"Before the Patriot Act, the FBI could use this invasive authority only against suspected terrorists and spies," Jaffer said. "Now it can issue National Security Letters to obtain information about anyone at all. This should be disturbing to all of us."
The suit argues that the National Security Letter provision violates the constitution because it authorizes the FBI to force disclosure of sensitive information without adequate safeguards.
The FBI no longer has to show a judge there is a compelling need for the records and it does not have to specify any process that would allow a recipient to fight the demand for confidential information.
Prior to December, the letters could only be sent to certain financial institutions. However, the definition of "financial institution" in the new law is expanded to include such businesses as insurance companies, pawnbrokers, dealers in precious metals, the Postal Service, casinos, and travel agencies.
The law also bars subpoenaed businesses from revealing to anyone, including individuals who may be under investigation, that the FBI sought records of their transactions or that businesses have turned over their records. A company faces criminal penalties if it breaches the gag order.

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Why Japan went ballistic
By Tomohiko Taniguchi

TOKYO - It has gone largely unnoticed that Japan now occupies a premier seat within a unique American defense club, a club of two - Washington and Tokyo.
The reason for this is not because Japan is the second largest economy still committed to having its armed forces deployed in Iraq, but rather because Japan has decided to do what few other allies of the United States could. That is to follow the US in its controversial missile defense program. At present, practically no other nation is in a position to follow suit. It is only the US and Japan that constitute an exclusive club of ballistic missile defense (BMD).
On March 26, top military brass as well as civilian officials at Japan's Defense Agency (JDA) rejoiced to see the Diet (Japan's parliament) pass the budget for the fiscal year 2004 that starts in April. They were happy as the government-proposed budget went into effect unscathed and uncut. And therein was the plan for Japan to deliver its first round of BMD programs.
In fiscal 2004, the JDA will spend a gross total of 4.9 trillion yen (US$45 billion), which is, as usual, about a hundredth of the nation's economy. Out of the defense budget, 2 percent or 106.8 billion yen ($981 million) will cover the cost for BMD. Divided into three parts, 34 billion yen ($312 million) will go to Japan's Maritime Self Defense Force to be used to equip one Aegis-type destroyer with the "Standard" missile system SM-3; 58.2 billion yen ($534 million) to the Air Defense Force to procure a ground-to-air missile system known as Patriot Advanced Capability 3 (PAC-3); and 14.6 billion yen ($134 million) will be spent to upgrade the relevant BADGE (Base Air Defense Ground Environment) systems.
The Aegis system is a precious commodity for the US as it has kept its core technologies secret. It is also costly both in economic and political terms. True, Spain does have some Aegis capability, but it has only one Aegis-type destroyer, making it largely irrelevant, for in order to operate 24 hours a day, 365 days a year, three is the minimum number required. Israel, South Korea and Taiwan all aspire to have at least one Aegis-type destroyer, but currently have none. Japan's Maritime Self Defense Force by contrast currently has four, and will soon have six such vessels, all home-built with loaned Aegis technologies, enabling Japan to make the first entry into the BMD club by equipping itself with a sea-based mid-course defense (SMD) capability. It aims at hitting enemy missiles mid-course.
The entry fee, as it were, goes in large part to the US defense industry: Raytheon (Waltham, Massachusetts) doubtless being the clearest winner as it manufactures both SM-3 and PAC-3. Lockheed Martin (Bethesda, Maryland) will also benefit as the sole provider of radar and missile systems that make up the core of the Aegis system. While this could be a boon to the Bush campaign to secure votes from the military-industry complex, that is not the only reason why Howard Baker Jr, US ambassador to Japan, on March 1 boasted about the nation's move, saying that Japan's decision to go BMD along with the US was simply great, a sign that Japan has now "matured".
More to the point, Japan's action is hardly an isolated one. Saying that it goes hand-in-hand with the US will not even suffice. It is closely embedded into, and makes part of, the overall BMD that the US has just started this year.
On the US side, a program called Block 04 is being implemented. Designed as the first increment, or the first "block", of layered missile defenses, "Block 04" calls on the US in the years 2004 and 05 (hence the name "Block 04") to build up the following: a) Ground-based mid-course defense; b) Sea-based mid-course defense; c) Patriot Advanced Capability-3. Already, the US Seventh Fleet has put one SMD-capable Aegis-type destroyer on patrol in the Sea of Japan, with the obvious purpose of deterring North Korea.
Indeed, Japan is about to commence the sea-based and the Patriot defense, and the key weapon systems Japan is procuring from Raytheon et al are exactly the same as those that the US will adopt. In short, Japan is co-building Block 04 with America.
"Block 06" and "Block 08" are scheduled to follow, as the US is taking an evolutionary "spiral" approach, thereby upgrading its BMD capabilities step-by-step. It is also projected that Japan will follow suit, at a substantial cost - rumored to amount more than $8 billion in five years - to the taxpayer.
BMD for Japan primarily means a missile-shield against North Korea. Pyongyang gave a wake-up call to the Japanese on August 31, 1998, by test-launching one of its long-haul missiles TaepoDong across the Japanese archipelago into the Pacific Ocean. Since then, even the Democratic Party of Japan, the main opposition party, has come to acknowledge that BMD should at some point be introduced. The Japanese are still outraged by the communist regime not releasing Japanese abductees and their family members, which may have also helped pass the defense budget more smoothly than the government anticipated.
Yet the US-Japan joint BMD has another tacit target. That is China, which is rapidly developing its missile-strike capabilities: both submarine-based and ground-based. This is the reason why Beijing is furious at Japan going BMD. Also for this reason, the pro-China camp among Diet members, regardless of their party affiliations, remained extremely cautious about missile defense. Concerns toward Pyongyang overwhelmed all that, resulting in a surprisingly early implementation of the defense program. Seen from the government perspective, the timing seemed so ripe that they had to capture it. And it worked.
That the budget went into force without any amendment is another testimony to how far Japan has come since Junichiro Koizumi became prime minister on April 26, three years ago this week.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)

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Living with a nuclear North Korea
By Ehsan Ahrari
As evidence mounts that North Korea already possesses nuclear weapons, United States President George W Bush's entire machismo about disallowing the possession of weapons of mass destruction (WMD) by radical regimes faces a serious challenge.
The source of a key nuclear weapons report on North Korea's possession of nuclear weapons is Pakistan's top nuclear scientist, the father of its nuclear weapon, Dr Abdul Qadeer Khan, who has admitted selling his nation's secret nuclear weapons technology. North Korea, Libya and Iran are the nations he reportedly named as having received nuclear technology. He is also reported to have told his Pakistani interrogators that he had seen three nuclear devices during one of his visits to North Korea.
Strangely enough, no serious question about the credibility of that assertion was raised at a time when Dr Khan's claim was publicized early this year, nor was it questioned while US Vice President Dick Cheney was visiting East Asia recently. Perhaps the silence was due to the fact that Khan's claims were exactly what the US wanted to hear.
Through Cheney's visit to Asia, the US sought to convey to the world that it is serious about negotiating with North Korea. However, in the Asia-Pacific region in general, no one can forget that Bush, after raising the level of rhetoric during the past two years about his resolve to disallow possession of WMD radical regimes, has done nothing to restart the negotiations, even after the inconclusive end of six-party talks with North Korea. Aside from Pyongyang and Washington, the other four parties are China, South Korea, Japan and Russia.
What is especially disconcerting about possible possession of nuclear weapons by North Korea is the potential that Pyongyang would sell those devices to a terrorist group like al-Qaeda. As preposterous as this suggestion sounds in principle, no US president can sit around cavalierly and do nothing regarding such a potential threat. More to the point, if Japan and South Korea were to become fully convinced that North Korea is armed with nuclear weapons, they might start insisting on developing their own respective minimum credible deterrence, thereby initiating a nuclear arms race in East Asia.
The present situation, though, says nothing about Bush's extant policy options regarding North Korea. The fact that he has already insisted on the possibility of invoking preemptive military actions against a nuclear-armed "rogue" state is on everyone's minds. The question is when would that option become a live one for the US. The answer: it depends on what happens next when the US approaches North Korea's main interlocutor, China, on the issue. Washington remains hopeful that the leaders in Beijing might be able to use their influence on North Korea to persuade the leadership to be reasonable and begin dismantling its nuclear weapons programs, in return for energy, economic and other compensation.
Exit Dick, enter Jong-il
Just after Cheney left China on April 18, North Korean leader Kim Jong-il came calling, and China must have received the latest policy positions by both sides. The next round of Beijing-sponsored six-party talks is expected to take place some time before July, but a date has not been set. The only sure thing is that talks will continue.
In all likelihood, diplomacy will be given a chance between now and next January, when a new US president assumes office. However, considering that North Korea remains highly suspicious of Bush, the chances of any diplomatic breakthroughs are minimal.
Ironically, Bush would want Kim to believe him when he tells the Pyongyang regime and the world that he wants to resolve the nuclear conflict peacefully. However, Kim also knows that if he were to give up his nuclear option, his regime would become highly vulnerable to the preemption option in the next four years, especially if Bush remains in office.
So, from North Korea's perspective, only a change of regime in Washington - from Bush to John Kerry - would provide Kim with adequate, though not necessarily sufficient, guarantees to give up the nuclear program.
The trouble with the nature of the relationship between the US and North Korea is that one can envision a Kerry administration taking a hard look at the preemption option, possibly during his first term, as did president Bill Clinton in 1994. Kim also remembers that Clinton reality quite vividly. While Kerry and Bush differ in some regards on the approach to North Korea, Kerry might appear preferable, but certainly would not be a dream candidate for Pyongyang.
If Kim, indeed, has developed nuclear weapons, the likelihood of his totally abandoning his nuclear program - a la South Africa - are slim-to-none. Thus, the world had better get ready to live with a nuclear North Korea, unless the US decides to give nuclear brinkmanship a chance. The international community also remembers, or should, that in the last military conflict involving the Korean Peninsula, China was not a neutral party. And this time as well, China is fully engaged in the six-party talks.
In the final analysis, the international community might have to determine whether nuclear brinkmanship is a feasible option, the alternative being living with a nuclear North Korea.
Ehsan Ahrari, PhD, is an Alexandria, Virginia, US-based independent strategic analyst.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)
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Inside Bush's Indian Bureau
by Wayne Barrett with special reporting by Jennifer Suh
April 27th, 2004 12:20 PM


Wayne Smith: Acknowledging that it was a mistake to bring a friend to breakfast, he wound up becoming a feast for Stone.
(photo: Bill Burke/Page One)
When Wayne Smith began walking the huge corridors at the Department of Interior a few months after George Bush took office in 2001, he felt like he'd finally hit the big time. In the '90s, he'd been chief deputy to California's Republican attorney general. But now, at 52, he was assistant deputy secretary at Interior, managing the $3.5 billion budget of the Bureau of Indian Affairs (BIA) and overseeing the hotly politicized Indian casino industry. What he didn't know was that, within nine months, he would be gone--vanquished by the insider culture consuming Bush's Washington.
Smith's mother was raised on a destitute Lakota Sioux reservation in South Dakota, where his grandfather was chief. Memories of the "appalling poverty" he saw on family visits to the reservation inspired him in his new job--which he got on the recommendation of a colleague from his AG days, Sue Wooldridge, top aide to Secretary of the Interior Gale Norton. Neal McCaleb, who was Smith's immediate boss and ran BIA, put him in charge of gaming, a business where government decisions, not markets, turn molehills into jackpots--recognizing tribes, taking land in trust for new casinos, manufacturing designated millionaires.
Smith was no babe in the woods. He'd started a California lobbying firm himself in 1999, but he was unprepared for the incestuous intrigue at BIA. In the Clinton era, the Democrats dunned tribes for unrestricted amounts of campaign wampum, and the departed BIA chief was found in the parking lot signing backdated documents three days after the Bush inaugural. The Bush team immediately tossed the tardy decisions. But, as this Smith saga will make clear, BIA remained a bureaucratic land where the only chiefs are buttoned-down lobbyists, raking in millions from tribes whose casinos are virtually franchises to print influence-peddling largesse.
Smith was troubled early on when Republican lobbyist Scott Reed told him that the Democrats had long had free reign at the agency and that now it was "our turn"--a charge a Reed associate denies though his firm has attracted a dozen gaming clients since 2001. Smith felt uneasy when his office was lobbied on behalf of two tribes by Diane Allbaugh, the wife of Joe Allbaugh, head of the Federal Emergency Management Agency and the 2000 national campaign manager for Bush. Diane Allbaugh, who worked at a firm headed by former Republican National Committee chair Haley Barbour, appeared on behalf of a Louisiana casino developer under contract with the Jena Band of Choctaw Indians and the Paucatuck Eastern Pequots, a Connecticut tribe then tied to Donald Trump. McCaleb urged Smith to take her calls, explaining that he and Joe Allbaugh were old Oklahoma friends and that Allbaugh had "helped convince the White House" to install him at BIA.
The Washington Post would later do stories about the awesome influence of Jack Abramoff and Mike Scanlon, who combined to drain $45 million in reported lobbying fees from four tribes in the first three Bush years, prompting an ongoing investigation by Senator John McCain. Abramoff's top political allies were House Majority Leader Tom DeLay and former Christian Coalition head Ralph Reed.
But no one noticed that Bill Jarrell and Jennifer Calvert, two lobbyists who'd worked with Abramoff prior to 2001, left him within days of the election to form their own company, Washington Strategies, immediately attracting tribal clients. Jarrell, like Scanlon, was once a top DeLay staffer. Smith says Jennifer's husband, Chad Calvert, while he was Interior's deputy director of legislative affairs, introduced her to him, left documents from her in his office, and joined the two of them at lobbying lunches--recollections the Calverts only partially deny. When Chad Calvert was recently promoted, the Interior press release said he'd been "coordinating department legislative policy" for "the assistant secretary for Indian affairs" for three years. Jennifer Calvert's bio says her "lobbying expertise focuses on Native American issues," one of those marvelous coincidences of inside-the-beltway life.
The lobbyist who concerned Smith more than any other, however, was never even seen in Interior's crowded corridors. His was a name McCaleb whispered to Smith. Like Chad Calvert, he'd been on the transition working group for Interior, staffing the agency. The dark force of Indian gaming, retained as a hidden consultant by tribes and developers across the country, was Roger Stone, a veteran of eight Republican presidential campaigns and star of the Miami/Dade recount shutdown. Scott Reed is often his up-front lobbyist face.
So, too, are William Brack and Chris Changery, onetime lobbyists with Brownstein, Hyatt, the Denver-based firm that employed Norton. Changery had been a press spokesman for Senator Ben Nighthorse Campbell, the Colorado Republican who chairs the Indian Affairs committee. Brack is counsel to the Nighthorse Foundation, a recent invention of the retiring senator. Stone threw a fundraiser for the senator at his Miami estate. Though Brack and Changery left Brownstein in 2003, Stone still gets tribes to hire them "for the specific mission of inserting our language" in a Campbell bill, according to a Stone memo. Though the two recently orchestrated a Campbell-sponsored technical correction helpful to a Stone project, neither filed as lobbyists. The language, which deliberately omitted the tribe's name, was quietly withdrawn after Voice inquiries about it.
Smith did not realize, when he began to review the Sacramento-area office's decision in a factional fight involving the Buena Vista Rancheria of the Me-Wuks, that he was on a collision course with Stone and his usual coterie of sidekicks--Reed, Brack, and Changery. Remarkably, the Buena Vista faction that paid Stone a six-figure retainer and guaranteed him 7.5 percent of annual tribal revenue consisted entirely of DonnaMarie Potts and her two adult children. The opposing faction consisted of a single Me-Wuk. Deep-pocket developers on both sides were spending millions bankrolling a legal war that, in December 2001, suddenly turned against Potts.
The mostly Democratic insiders around Potts picked Stone as the Republican player who could, as Buena Vista attorney John Peebles put it, "reverse the area director's order" that dislodged Potts as tribal chair. The strategy was to try to get Smith to yank the Buena Vista issue out of the ordinary appeals track--where it faced delay and likely defeat--and resolve it himself.
So Reed began leaning on Smith in late January 2002. Smith even got a note supporting the Stone faction from the Republican leader of the California state senate, Jim Brulte. Stone had recommended the retention of a consulting firm owned by Brulte's former chief of staff, Tom Ross, and Ross wrote the memo summarizing the Buena Vista case that Brulte enclosed. Later in 2002, Stone would host a fundraiser for Brulte at his 40 Central Park South apartment and take Brulte to visit Stone's longtime client Donald Trump. The Brulte intervention sent a particularly strong message to Smith because he'd attended a 2001 Palm Springs meeting involving Karl Rove and a dozen tribes, where Brulte was introduced as "the administration's main man in California--especially for Indian matters."
Smith agreed to a February 19 breakfast in Sacramento with Reed partner John Fluharty, Potts, attorney Peebles, and Russ Pratt, president of the development company. Smith was staying at the home of his old friend and former business partner Phil Bersinger, who drove him to the restaurant and joined the breakfast. A memo Stone prepared at the time contends that Bersinger "participated fully in the discussion" of the tribe's "current policy issues"--a contention dismissed by Smith, Peebles, and Pratt, but key to the subsequent saga Stone spun.
While it's unclear who initiated the next contact, Bersinger wound up talking to both Peebles and Reed by phone. On March 23, Bersinger, Peebles, and Pratt had an "amiable" lunch and discussed retaining Bersinger as a Buena Vista consultant. Bersinger, who used Smith's name as his calling card, promised to call back with a price. Strangely enough, Smith's appointment diaries indicate he had a morning meeting with Reed on March 22, giving him a final no. Nonetheless, Bersinger came to Peebles's office on April 4 seeking a monthly retainer and percent of revenue, ostensibly to influence a decision Smith had already announced. Stone says he advised Peebles to ask Bersinger to put it in writing and Bersinger faxed a bland request without specifics.
Stone, who calls this "the most naked attempt at extortion I've ever seen," was already collecting other Bersinger solicitations. One was a February letter Bersinger had written another tribe celebrating his access to Smith and seeking a $1,000-a-month retainer. The other was sent after Stone advised a lawyer for the tribe, Phil Thompson, to ask Bersinger to turn his oral pitch into a written proposal. Stone had already put Thompson on the Buena Vista payroll. Then Stone, by his own account, assembled the letters in a press package for selected reporters, using an associate named Mike Copperthite as the pass-through to Time magazine.
By April 11, Time's reporter was on the phone with Smith citing, and then faxing, another ostensible Bersinger letter--one that demanded a $250,000 payment from a Louisiana tribe, the Coushattas. Everyone, including Stone, would eventually agree that the third letter was a fabrication, so instantly discredited that Time never mentioned it in the April 15 story. Not only does the addressee, Coushatta vice chair William Worfel, say it's a phony, but he says he met Stone for the first time two weeks before it was written. "We exchanged cards," Worfel recalls, adding that federal investigators who questioned him said they'd found his card in the offices of Buena Vista. Stone says he "has no memory of ever seeing the Louisiana letter." Copperthite, who was not involved in the Smith dispute, says "Stone handed me that package with that phony letter in it."
The other two letters raised damaging enough issues, as Stone points out, and within four days of Time's piece, New Jersey senator Bob Torricelli wrote Norton seeking a Smith investigation. Stone says he "probably" got his old friend Torricelli to do it. Several fake faxes about Smith started arriving at Interior--one from Brulte's office--and Stone allies at the Thompson tribe wrote letters deriding Smith. The Interior inspector general started an investigation, but the White House--where staff assistant Jennifer Farley had pressed Smith to side with Buena Vista--forced Smith out shortly after the probe began. The IG finished its report by August 2002, but has yet to release it though Smith, Peebles, and Pratt want it released.
While Stone believes Smith and Bersinger "were running a scam operation," McCaleb, Peebles, and Pratt say they are "unconvinced" that Smith knew what Bersinger was doing. Peebles says he thinks Smith is "a decent guy," adding that he doesn't believe Bersinger and Smith "had this grand, synchronized conspiracy" and that "a lot of things were spun that I don't think are accurate." Smith's successor, Aurene Martin, is a former aide to Senator Campbell recommended for BIA by Reed and Fluharty. On Smith's way out the door at BIA, he saw Buena Vista lobbyists Brack and Changery, the old Campbell duo, on their way in.

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Research assistance: Catrinel Bartolomeu, Molly Bloom, Andrew Burtless, Adam Hutton, Catherine Shu, Jessie Singer, and Andrea Toochin




>> OUR FRIENDS THE SAUDI ROYALS...


The Royal Treatment
Anti-Semitism, that is.

By Steven Stalinsky
The Saudi royal family has been on the forefront of espousing an extreme position of hatred toward Jews, influencing the kingdom's educational system, media, and mosques, as well as its foreign and domestic policy.
In its first attempt to attract tourists to the country, Saudi Arabia's tourist commission, under the control of Prince Sultan bin Abd Al-Aziz launched an official website in March 2004. The website listed those not allowed into the kingdom: "Israeli passport holders or those whose passport has an Israeli arrival/departure stamp; those who do not abide by the Saudi traditions concerning appearance and behavior; those under the influence [of alcohol]; and Jewish people."
The Saudi embassy's Washington, D.C. spokesman, Nail Al-Jubeir, said he was "stunned" when he saw the website; and the Saudi ambassador to the U.S., Prince Bandar bin Sultan, said he was "embarrassed." According to a press release by the Saudi embassy, "the information on the website was not correct and as a consequence the erroneous material was removed."
The ambassador's father, Prince Sultan, who serves as secretary general of the tourism commission, said in a statement that the controversy was "blown out of all proportions" by U.S. media seeking to portray the kingdom as anti-Semitic. He added, "...It is all part of a smear campaign meant to tarnish Saudi Arabia's image."
Prince Sultan -- who is also second deputy prime minister, defense and aviation minister, and inspector general of Saudi Arabia -- has been making statements against Jews for years. Following a ceremony at the Saudi Public Institution for Military Industries in June 2002, when asked about U.S. criticism of Saudi Arabia, Prince Sultan replied to the Saudi daily Al-Sharq Al-Awsat, "It is enough to see a number of congressmen wearing Jewish yarmulkes to explain the allegations against us." More recently, the Saudi royal family website 'Ain-Al-Yaqeen, quoted Prince Sultan as saying that the U.S. media, which is "under the Jewish influence," is using the U.S. reform initiative to widen the gap between Arab countries and the U.S.
Saudi Minister of the Interior Prince Naif bin Abd Al-Aziz, Sultan's brother, has also made accusations against the Jews. In what has since become an infamous interview reported in Ain-Al-Yaqeen a year after 9/11, Naif explained that Arabs were not involved in the attacks: "We put big question marks and ask who committed the events of September 11 and who benefited from them. Who benefited from events of 9/11? I think they [the Jews] are behind these events."
Saudi kings have also been known for holding extreme anti-Semitic views. Saudi Princess Fahda bint Saud ibn Abd Al-Aziz -- who's been described as "the daughter of King Saud and the historian of her father's reign" and who appears occasionally in the Saudi media -- has written that her father's views on the Jews and Israel still serve as inspiration for the Arab and Muslim world. In one article, she explained that King Saud called the Jewish state a deadly disease that would never be accepted by Arabs. "...King Saud made the right diagnosis: 'The Zionist threat is like cancer -- in dealing with it neither medicine nor surgery will do any good.' This royal statement was meant to emphasize that the Arabs do not, and will not, accept an Israeli state amidst them." The article added that under the leadership of King Saud, the Saudi Representative to the U.N. called for the establishment of a U.N. agency "to help resettle Jews [now in Israel] in their former European homes."
The late King Faisal was also notorious for his anti-Semitic statements. In 1972, he told the Egyptian magazine al-Musawwar, "While I was in Paris on a visit, the police discovered five murdered children. Their blood had been drained, and it turned out that some Jews had murdered them in order to take their blood and mix it with the bread they eat on that day." The following year, in an interview with the Lebanese Al-Sayyad Faisal said that in order to comprehend the crimes of Zionism it's necessary to understand the Jewish religious obligation to obtain non-Jewish blood.
The Saudi royal family's hatred of the Jews is now influencing its next generation. Saudi Prince Amr Muhammad Al-Faisal writes often in the Saudi press to warn American Jews that their compatriots will eventually turn against them. In one article he declared: "Dear cousins, if you hear a snap in two or three years, it will probably be the sound of the trap shutting on your collective necks. You have been warned."
Given that the Saudi royal family controls its country's media, mosques, and textbooks, there's no doubt they're responsible for the kingdom's reputation as a breeding ground for anti-Semitism.

-- Steven Stalinsky is executive director of the Middle East Media Research Institute.

http://www.nationalreview.com/comment/stalinsky200404280855.asp

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OSCE conference urges unity against rising anti-semitism
Reuters in Berlin
Thursday April 29, 2004
The Guardian
Anti-Semitism is on the rise and to defeat it will take coordinated action by many countries, speakers told an international conference on the subject on Wednesday.
"It is not good that a conference on this theme has to take place in 2004, and that it should deal with current problems, not historical questions," President Johannes Rau of Germany told the anti-semitism conference in Berlin of the Organisation for Security and Cooperation in Europe.
"Nobody should close their eyes to racism, xenophobia and anti-semitism," he urged around 500 delegates.
The two-day meeting of representatives from north America, Europe and central Asia aims to agree measures to counter anti-Jewish violence and propaganda.
The US secretary of state, Colin Powell, and the Israeli president, Moshe Katsav, were the highest-profile guests.
"We share the burden of fighting anti-semitism in our states. That is the most important message of this conference," the German foreign minister, Joschka Fischer, said.
Jewish groups have complained that European governments have been late to respond to a revival in anti-semitism in the past few years, which has coincided with rising Middle East violence.
A recent EU report showed that attacks on Jews increased in several member states in 2002, compared with 2001. The biggest rise was in France, where they increased six-fold.
Mr Rau told the conference that racists had seized on the Middle East conflict and the policies of Israel's government.
"Everyone knows that massive anti-semitism is behind some of the criticism of the Israeli government's politics in the last decades," he said.
However, Brian Cowen, the foreign minister of Ireland, which holds the EU's rotating presidency, warned that criticism of Israeli government policy should not automatically be labelled anti-semitic.
"The exploitation of race for political purposes by any government or any politician, be it an offensive weapon or as a shield to fend off criticism, is quite simply unacceptable."
An Anti-Defamation League report on Monday said anti-semitic views were on the wane in most EU states, but distrust of Israel was rising.


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>> US WMD WATCH...

GAO Questions U.S. Nuclear Security
Posted April 28, 2004
By Thom J. Rose
The Department of Energy (DOE) acknowledges that defending U.S. nuclear facilities is a vastly different project than it was before Sept. 11, 2001, but some observers say the department is changing its methods much too slowly.
The threat of organized suicide attackers has turned nuclear security on its ear, Robin Nazzaro, a director at the General Accounting Office (GAO), the investigative arm of Congress, told a Tuesday hearing of the House Committee on Government Reform.
"In the past we had determined that someone would have to get in and out [of a nuclear facility to do damage], and now we've determined that all they have to do is get in," Nazzaro said.
DOE weapons experts told a 2002 Senate hearing that if terrorists were able to breach a nuclear site containing the proper materials, they might be able to assemble and detonate a 1 kiloton bomb capable of killing thousands in several minutes.
That possibility has precipitated fundamental changes in the way nuclear sites are required to be protected.
A directive issued April 5 orders sites containing the most dangerous class of nuclear materials to assume a heightened "denial" level of defense designed not only to prevent terrorists from stealing material, but also to keep them from even entering the sites, Danielle Brian, executive director of the Project on Government Oversight told the committee.
That directive comes in addition to a new "Design Basis Threat" nuclear-security standard that DOE created after Sept. 11 in response to changing security concerns. That new standard has attracted controversy, however, and is strongly criticized in a GAO report released last Thursday.
The report begins by questioning the two years DOE took to create the standard after Sept. 11. "During this extended period, [the department's] sites were only being defended against what was widely recognized as an obsolete terrorist threat level," the GAO report says.
"We certainly said that two years is a long time to do this," Nazzaro added.
The report goes on to question the content of the new Design Basis Threat standard, which House subcommittee Chairman Christopher Shays (R-Conn.) said some observers think "might be more accurately called the 'Dollar Based Threat,'" since some believe it compromises security to save money.
The GAO report also says the new standard does not pay enough attention to the improvised nuclear bombs the department's weapons experts said terrorists might be able to put together in minutes. It says the new standard should put more emphasis on the potential for radiological, chemical and biological sabotage as well.
"We're really concerned that [DOE] is not treating nuclear materials in the way they are treating nuclear weapons," Nazzaro said.
Linton Brooks, the administrator of DOE's National Nuclear Security Administration disagreed, saying, "We believe that the highest level of defense should be reserved for nuclear weapons."
The GAO report goes on to say that some U.S. nuclear sites will not be able to meet the new standards for up to several years and should be required to put in place additional provisional measures in the meantime.
Both the existence of sites that won't be able to meet the news standards and the implementation of provisional security measures have attracted controversy.
Brian said some nuclear sites were built when security concerns were completely different and will have to be completely rebuilt or abandoned in response to current threats. "It's simply impossible for these facilities, as they exist, to implement these requirements," Brian said.
Shays said, "Faced with the new security imperative to deny access, not just contain or catch intruders, it should have been immediately obvious [the department] has too many facilities housing nuclear materials, and those facilities are old, above ground, scattered and cluttered World War II-era plant configurations not buffered by adequate setback space."
Consolidating U.S. nuclear materials in more secure sites is a stated DOE goal, but Shays said the department has so far made little progress in that direction.
The department's latest plans to improve nuclear security include moving nuclear material out of one Nevada test site and possibly from other sites, but the efforts have met with continued resistance.
Brian said some of that resistance comes from site operators who fear their importance will diminish when their most dangerous material is gone. "The people in charge of implementing [the Nevada move] seem to have a different agenda than" Secretary of Energy Spencer Abraham, who ordered the move, Brian said.
While consolidation and fortification efforts remain incomplete, sites are increasing their use of guards. That practice, which was widespread after Sept. 11 and continues at sites that are more difficult to protect, worries some observers, who say the additional guarding capacity comes mainly in the form of overtime worked by current employees. Too many hours of overtime, especially for guards expected to remain vigilant, can lead to substandard performance, Brian and others say.
Brooks said his department does face a range of challenges in protecting nuclear sites, but added that he believes all nuclear material in the United States is adequately protected. "The people looking for soft spots would be ill-advised to come to the facilities for which I am responsible," Brooks said.
Thom J. Rose is a correspondent for UPI, a sister news organization of Insight magazine.



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"Abort Bush"
The activists at the March for Women's Lives take partisan shots--and extol the joys of abortion.
by Erin Montgomery
04/27/2004 12:00:00 AM

"ABORT BUSH IN THE FIRST TERM." A group of women on the National Mall displayed a banner with these words during last Saturday's March for Women's Lives, while a throng of fellow abortion-rights demonstrators marched by, nodding their heads in approval. The banner's message couldn't have been more clear, or a more glaring example of sordid wordplay--unless you consider another sign displayed at the march: "KEEP BUSH OUT OF MY . . ."
Led by the ACLU, the Black Women's Health Imperative, the Feminist Majority, NARAL Pro-Choice America, the National Latina Institute for Reproductive Health, the National Organization for Women, and the Planned Parenthood Federation of America, the march featured a lengthy list of speakers. Senator Hillary Rodham Clinton, former secretary of state Madeleine Albright, Gloria Steinem, Whoopi Goldberg, and Ted Turner were just a few of the many proponents of abortion rights who urged the crowd to take back the country and elect John Kerry in November.
When actress Camryn Manheim took the stage during the afternoon portion of the rally, she joked, "CNN [is reporting that this] is the largest march in the history of the universe. Of course, Fox is saying there's no one here." News reports now say that the event drew about 500,000 people, making it one of the largest abortion-rights demonstrations ever held on the Mall. The March for Women's Lives website says the crowd numbered 1.15 million.
But unconfirmed numbers (the U.S. Park Police no longer provide estimates) don't tell the full story behind the marchers. In terms of age, race, and gender, the marchers were diverse, and some were scared. "I spend half my day in class, half doing activist work," Niva Kramek, a sophomore at the University of Pennsylvania and a member of the student group Penn for Choice, said. "I'm terrified of what's going to happen [if Bush is reelected]."
As I made my way through piles of hot pink Planned Parenthood signs and dodged the Texas Mamas for Choice, I stumbled into Brenda Beckett. A 52-year-old from Seattle, Beckett explained that in 1975 she had had an abortion as a 25-year-old married woman. "I haven't regretted it once," she said. What she does regret is the "eight hours of orientation"--doctor going over alternatives, such as adoption--she sat through beforehand. "I never had any children cause I never wanted any," she said. Her husband at the time supported her decision; they are no longer married.
"Even though Bush says he believes in non-intrusive government, he is being intrusive," protestor Priscilla Balch said. An abortion-rights activist since her teens, Balch, 60, is "very upset to see that we're going backwards." John McKenna, a senior at Ohio University, has been a part of other pro-choice marches, though this was his first in Washington. He was raised Catholic and attended an all-boys Catholic high school in Cleveland. He has been able to reconcile his religious upbringing with his pro-choice beliefs, stressing that the march is not just for women.
By and large, the marchers were gleeful and unapologetic, sometimes leading to contradictory acts of protest: parents placed pro-abortion stickers on their newborn babies' clothing, and women went topless as a way to get others to take the cause more seriously. Juxtapose them with the counter-protestors who marched in a dignified manner on Pennsylvania Avenue. Silent No More, a group of women who underwent abortions and regret their decision, almost didn't make it to the march when they were denied a permit to stand on the outer sidewalks of Madison and Jefferson streets, directly across the street from the rally on the Mall.
Leading a group of women carrying "I REGRET MY ABORTION" signs, Silent No More co-founder Georgette Forney said, "It's ironic that they are marching to protect women's right to choose and at the same time [are] working to deny us our right to talk about the pain abortion caused us. We are the faces of the choice they promote." After having their permit denied, the women gathered under a permit issued to the Christian Defense Coalition, 16 members of which were arrested when they moved out of their designated area on Pennsylvania Avenue and into the area intended for marchers at Fourth Street and Madison Drive.
Meanwhile, I listened to Forney, 43, tell me about the abortion she had at age 16. She went through a healing process in 1995 and shared her secret with her church in 1998. She also began to correspond with other suffering, post-abortive women over email. Forney says her healing process started with an epiphany. "I came across my old high school yearbook one day. I was holding my yearbook, and it felt like my baby. All of a sudden, I knew she [I just sensed she was a girl] was there. I could feel her spirit, and knew she was awesome."
Erin Montgomery is an editorial assistant at The Weekly Standard.

? Copyright 2004, News Corporation, Weekly Standard, All Rights Reserved.

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>> AUDIO ON KERRY
http://www.wnyc.org/shows/bl/episodes/04272004
The Other JFK

Nina J. Easton Reporter for the Boston Globe, co-author, John F. Kerry: The Complete Biography: By the Boston Globe Reporters Who Know Him Best (Public Affairs, 2004)
and
Brian C. Mooney Reporter for the Boston Globe, co-author, John F. Kerry: The Complete Biography: By the Boston Globe Reporters Who Know Him Best (Public Affairs, 2004)
and
Michael Kranish Reporter for the Boston Globe, co-author, John F. Kerry: The Complete Biography: By the Boston Globe Reporters Who Know Him Best (Public Affairs, 2004) detail the life of John Kerry


>> KERRY WATCH...

Kerry Gets a Pass?
The Democratic candidate for president keeps profiting from Enron and Halliburton.
By Sam Dealey
In late January, the Washington Post reported that Democratic presidential candidate John Kerry raised more money from special interests and lobbyists over the previous 15 years than any of his Senate colleagues. But of all money Kerry has raked in from these donors -- from oil and gas companies, HMOs, and the pharmaceutical industry, for example, and from his brother's Boston law firm and its related lobbying shop -- two of the most politically profitable have been Enron and Halliburton.
Of course, current and former executives at those companies might not see it that way. Both Enron and Halliburton have been reliable whipping boys for Kerry for much of his presidential campaign -- the former for obvious reasons, the latter for no apparent reason at all.
Last September, for example, Kerry told Iowans that "seniors have had their retirements stolen by Enron and WorldCom, by financial scandal and a marketplace where this president licenses a creed of greed."
Just before that state's caucuses in January, Kerry rallied the Des Moines faithful against Halliburton and its ties to Vice President Dick Cheney. "We need to end an administration that lets companies like Halliburton ship their old boss to the White House and get special treatment while they ship American jobs overseas." (Those off-shored jobs, incidentally, are Americans rebuilding Iraq.)
And he's often lumped them together. "George Bush and his crowd, they are the world champions in terms of special interest giveaways -- the drug companies, the oil companies, Halliburton, the Enron Scandal, the WorldCom scandal," Kerry claimed on CNN this February.
These kinds of lines play well with the liberal base, and Kerry gets considerable political mileage from them. But now it turns out that both Enron and Halliburton were financially profitable for Kerry, too.
Personal financial disclosure forms filed with the Senate show that on December 11, 1995, the marital trust held by Kerry and his wife purchased Enron stock valued anywhere from $250,001 to $500,000. (The Senate requires only rough valuations for assets and liabilities.) The stock returned between $5,000 and $15,000 in dividends in 1996, and another $5,001 to $15,000 in 1997. Capital gains realized from the sale of Enron stock that year totaled anywhere from $15,001 to $50,000. All in all, the Kerrys made between $25,003 and $80,000 off their Enron buy.
Likewise, financial forms on file with the Senate show the Kerrys made money off of Halliburton. On May 13, 1996, the marital trust purchased between $250,001 and $500,000 of stock in the company. Just seven weeks later, the stock was sold. The trust reported earning $1,001 and $2,500 in dividends and $5,001 and $15,000 in capital gains. Add it up and the gains were anywhere from $6,002 to $17,500.
Granted, these gains represent just a drop in the bucket relative to all of the Kerrys' assets. But like Barbra Streisand, who simultaneously bashed Halliburton while profiting from its success, Kerry seems to want to have it both ways.
Before Enron's corruption was exposed -- and of which there's no evidence that the Bush administration sought to mitigate the criminal responsibilities of its directors -- the senator and his wife, like many investors, turned a tidy profit from the company. Halliburton, meanwhile, receives the lion's share of reconstruction contracts in Iraq by dint of its expertise -- not Cheney's past stewardship. Indeed, it was both the company's and Cheney's expertise that Kerry and his wife banked on for seven weeks in 1996.

-- Sam Dealey is a writer in Washington, D.C.

http://www.nationalreview.com/comment/dealey200404280841.asp

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Terrorists Cheer Kerry's Rhetoric
Posted April 28, 2004
By J. Michael Waller


Sen. John Kerry?s increasingly shrill challenge of President Bush is grinding down the image of the United States abroad and playing directly into the hands of anti-U.S. extremists.
Exploiting the liberties of free societies, terrorists are using the mass media to sow divisions among and within the democracies, terrorism experts report. The March bombing of the Madrid subway proved that low-budget terrorist attacks could be used to influence democratic elections and, by virtue of Spain's sudden military withdrawal from Iraq, to drive wedges between the staunchest allies in the international antiterrorism coalition. Senior Spanish and U.S. officials now believe al-Qaeda will plan more attacks in the United States to try to force President George W. Bush from office.
Playing directly into the terrorists' hands is Bush's increasingly shrill challenger, Sen. John F. Kerry (D-Mass.). Democracies long have been vulnerable to manipulation by hostile foreign powers. President George Washington foresaw this in his Farewell Address of 1796. Though the popular notion is that the main point of the address was to warn against entangling alliances, the most persistent theme of Washington's speech was to warn against foreign subversion of America's democratic process. In his words, "It is easy to foresee that from different causes and from different quarters much pains will be taken, many artifices employed," to undermine the national identity and sense of purpose. Specifically, Washington feared that foreign adversaries would use the new democratic system to turn Americans against themselves.
Even now, external enemies are attacking the political fortress of the United States and its democratic allies through propaganda by word and deed. In his taped statement aired on the Wahhabi satellite TV network Al-Jazeera on April 15, Osama bin Laden not only sought to divide Europe from the United States by offering a "truce" with European countries that pull out of the coalition in Iraq, the al-Qaeda leader also explicitly feasted on the feeding frenzy among bickering American politicians about whether President Bush was to blame for the Sept. 11, 2001, terrorist attacks.
Good propagandists will turn their enemies' words against them, and the best will sow suspicion and division among them. This is happening now in the United States, where the terrorist enemy and its allies are using the rhetoric of the current presidential campaign in their jihad against the nation. Previous cautions against rash campaign words that provide aid and comfort to the enemy were thrown out the window long ago. Kerry steadily has become more and more shrill in his denunciations of the president as a leader, a man and a politician. Straying from legitimate policy differences with Bush or a healthy national debate about how best to fight the terrorist enemy, the Democratic nominee in waiting has yanked off the safety and fired full auto at the president.
Al-Jazeera and other anti-U.S. propaganda outlets have been quick to magnify whatever Kerry says in an attempt to show what a failure the United States has become under the Bush presidency. Kerry's increasingly strident and careless statements on the campaign trail reverberate abroad. His foul-mouthed interview with Rolling Stone became part of an Al-Jazeera feature on March 16. Although Kerry voted to let the Iraq war go forward, the Wahhabi-owned TV network noted, "He has suggested Bush's handling of the campaign is 'f-ed up.'"
"Bush misled Americans on the degree Iraq posed a threat," Kerry said in the Al-Jazeera broadcast, and the president is not "working closely enough with the international community." Bush's exclusion of France and Germany from competition for U.S. taxpayer-funded contracts to rebuild Iraq, Kerry said, was "dumb and insulting." Al-Jazeera rebroadcast, in Arabic, Kerry's allegation that in combating terrorist structures inside the United States, Bush and the Department of Justice have smeared "innocent Muslims and Arabs who pose no danger."
Such words, one of Kerry's former Senate colleagues says, grind down the image of the United States abroad and damage Washington's efforts to maintain allies and supporters in the Arabic-speaking world. With near-daily doses of extreme and careless quotations from the anti-Bush camp, Arab audiences are led to believe the worst about U.S. intentions and policies in the war on terrorism. Rather than helping the war effort with positive alternatives to counterterrorist policies they consider flawed, Kerry and other politicians are fanning the flames of hostility in the Islamic world.
The government-controlled press in Syria generally ignored President Bush's State of the Union address in January, "but on its front pages highlighted criticism that came in its wake, particularly Democratic presidential candidate John Kerry's calling Bush's [foreign] policy 'arrogant and inept,'" according to the Middle East Media Research Institute (MEMRI), which monitors Middle Eastern news and propaganda organizations and publishes translations and analyses in English. Even in Jordan, an Arab kingdom that has been an ally in the war against the terrorists, the editor of the Al-Arab Al-Yaum newspaper commented, "When President Bush gave his address, to hearty applause by his party in Congress, the Democrats shook their heads in condemnation."
The Kerry campaign, meanwhile, is reported to have e-mailed messages to foreign media outlets, pledging to "repair the damage" that President Bush allegedly has inflicted on the world. The Tehran Times, an English-language newspaper in the Iranian capital, reported Feb. 8 that unnamed Kerry staffers sent an e-mail to the Tehran-based Mehr News Agency apologizing for the conduct of the United States in the war on terrorism and saying that Kerry is the man to make things new again. "Disappointment with current U.S. leadership is widespread, extending not just to the corridors of power and politics but to the man and woman on the street as well," the message said. "We also remain convinced that John Kerry has the best chance of beating the incumbent in November and putting America on a new course that will lead to a safer, more secure and more stable world."
The Kerry campaign has claimed that all of this was the work of overseas Democrats and cannot be laid at the door of its candidate.
But recent statements from Sheik Moqtada al-Sadr, the extremist Iran-backed Shiite cleric whose guerrilla army has been killing U.S. soldiers and Marines, appear to echo this and some of Bush's other Democratic critics. Within 48 hours of Sen. Edward M. Kennedy's (D-Mass.) first major characterization of Iraq as "another Vietnam," al-Sadr picked up the theme.
Soon after Kerry denounced Halliburton, the oil company formerly headed by Vice President Dick Cheney, bin Laden singled out the firm. "I stopped briefly at a gas station," Kerry said on March 30. "If prices stay that high, Dick Cheney and President Bush are going to have to carpool to work. Those aren't Exxon prices, they are Halliburton prices." In his recording released two weeks later, according to a MEMRI translation, bin Laden denounced major corporations but named only Halliburton: "This war makes millions of dollars for big corporations, either weapons manufacturers or those working in the reconstruction [of Iraq], such as Halliburton and its sister companies."
Former Sen. Fred Thompson (R-Tenn.) observed in a recent Washington Post commentary: "Instead of trying to chart a path of progress, many of the president's critics have devoted themselves to fomenting public despair over a war, which they keep repeating, should never have been fought. At the same time critics of the Bush administration insist it should have done more to combat al-Qaeda in Afghanistan before Sept 11." Thompson added, "They miss the more profound lesson that national tragedy should have instilled: that the only deterrent to terrorism is strength and that weakness - real and perceived - is an incitement to further attacks."
The steady, daily attacks on the war and the motivations behind it, Thompson warns, risk undermining the strong international position of the United States and turning it into one of weakness.
"Weakness is when America's leaders compare Iraq to Vietnam, announcing to the world a faltering resolve to see our mission through." This signal, Thompson argues, causes wartime allies to lose heart. "To our allies in the Middle East and beyond, these predictions of defeat send a clear and chilling message to hedge their bets, because the United States cannot be counted on. And to our enemies, they can send an equally clear message: You can win."
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The Madrid Model

Al-Qaeda may be planning to influence the American presidential elections this November, replicating the "Madrid model" of staging bloody terrorist attacks to intimidate voters into ousting leaders who aggressively fight terrorism. Some observers believe that its March 11 subway bombings in Madrid, which created an electoral backlash against Spanish Prime Minister Jose Maria Aznar three days later, validated a model by which the terrorists could influence democratic societies to get rid of their tough-on-terrorism leaders.
Among the United States' staunchest European allies, Aznar was one of the original European supporters of ousting Saddam Hussein. All pre-electoral polls showed his party winning re-election against Socialist Party candidate Jose Luis Rodriguez Zapatero. But the subway bombings, which killed nearly 200 and injured more than 1,800, shook the confidence of the Spanish people and was the single largest factor in Zapatero's surprise victory.
"The terrorists won," according to Bob Brinker, a financial analyst and host of the syndicated radio program MoneyTalk. Watching how political events shape the markets, Brinker coined the term "Madrid model" in expectation of future attacks designed to manipulate the outcome of elections. In Brinker's view, under the Madrid model the terrorists attack a democratic society, change the government and gain a military victory in Iraq by helping democratic antiwar politicians come to power. Brinker calls Zapatero an "al-Qaeda-installed prime minister."
"Can you imagine the empowerment that al-Qaeda feels today?" Brinker said on his April 18 program. He predicted a repeat performance for the U.S. presidential election in November: "This is the last thing in the world you want to see happen."
Neither Kerry nor his ally Kennedy seems to have learned from his own Vietnam experiences, say critics, when both used extremist rhetoric to sow defeatism at home even though U.S. and South Vietnamese forces were destroying the communist enemy on the ground.
-------------------------------------
As in Vietnam, the Kerry camp seems not to care. The very day bin Laden's tape was broadcast, Kerry stood in East Rutherford, N.J., accusing the president of manipulating the war for personal political gain. "Everything he did in Iraq, he's going to try to persuade people it has to do with terror even though everybody here knows that it has nothing whatsoever to do with al-Qaeda and everything to do with an agenda that they had preset, determined," Kerry said.
Islamist forces are not alone in using Kerry's words against the United States. North Korean dictator Kim Jong-il, whose regime is on the State Department's list of state sponsors of terrorism, also favors a new American president. The regime's mouthpieces, including the Communist Party daily Rodong Sinmun, have been using Kerry's statements as propaganda to discredit the U.S. government.
"North Korea has been paying keen attention to the U.S. presidential election in recent weeks, reporting Democratic presidential primaries and various opinion polls through its state media," the English-language Korea Times, published in Seoul, reported in February. "Most of the reports are focusing on the criticism against Bush and Sen. John Kerry's surge as viable presidential candidate." Rebecca MacKinnon, former Beijing bureau chief for CNN and now a media fellow at Harvard University's John F. Kennedy School of Government, says that North Korea's state-controlled media have been portraying Kerry "in a positive light."
As the Financial Times reported in February, "In the past few weeks, speeches by the Massachusetts senator have been broadcast on Radio Pyongyang and reported in glowing terms by the Korea Central News Agency [KCNA], the official mouthpiece of Mr. Kim's communist regime. ... 'Senator Kerry, who is seeking the presidential candidacy of the Democratic Party, sharply criticized President Bush, saying it was an ill-considered act to deny direct dialogue with North Korea,' said the news agency. ... Pyongyang's friendly attitude toward Mr. Kerry contrasts with its strong anti-Bush rhetoric."
Like other wartime enemies of the United States, al-Qaeda is relying on presumably unwitting allies in the international peace movements. In his April 15 tape, bin Laden called the antiwar demonstrations a "positive interaction" and cited "opinion polls which indicate that most European people want peace." He appeared to view the Spanish public's ouster of conservative Prime Minister Jose Maria Aznar in favor of an anti-U.S. socialist, Jose Luis Rodriguez Zapatero, as a sign of weakness in the West.
That component of strategy is nothing new. The North Vietnamese regime relied heavily on American antiwar protesters to undermine the national will and defeat the U.S. military through political means, in ways that Hanoi could not win on the battlefield. The present North Korean regime is following suit, propaganda specialists say. Providing the ideological inspiration for a strong section of the antiwar movement through its loyal political allies in the United States and elsewhere, the regime of Kim Jong-il continues to use the old Soviet active-measures model of international political warfare. The Workers World Party (WWP), a small, numerically insignificant but organizationally superior group based in New York City, slavishly supports the policies of the North Korean government, and its leaders frequently visit Pyongyang. One of its front groups, International ANSWER, coordinates the largest peace protests in the United States [see "Marching for Saddam," March 4-17, 2003].
Pyongyang continually exhorts the peace movement around the world. On Feb. 4 the official North Korean Communist Party paper Rodong Sinmun said, "The antiwar struggle is the main form of the struggle for world peace at present and its principal target is the United States."
The paper continued, "It is impossible to avert a war and achieve the world peace without a struggle against the U.S. imperialists. ... The people of all countries of the world should lift their antiwar, anti-U.S. voices and bind Yankees hand and foot to keep them from starting a war." Later in February, in a more subdued tone, Rodong Sinmun cited Kerry as a more preferable leader than Bush. U.S. national-security leaders have long recognized how the terrorists exploit our democratic system, but have been slow to counter it effectively. Insight obtained a copy of a U.S. Army intelligence briefing titled Al-Qaeda's Use of the Mass Media in Infowar/Netwar. Referring to information warfare (IW) - the use of information and information systems as instruments of conflict - and the social or societal IW medium called netwar, the Army report is based on two years of assessments of more than 200 documents.
Little secret intelligence is needed to understand al-Qaeda's strategy. Open-source information can meet up to 85 percent of the terrorists' intelligence-information needs, according to the report. Public information "provides understanding of strategic plans and intentions [and is] especially useful in forecasting cultural turmoil and societal upheavals, and in planning/conducting IW operations," according to the Army briefing. "AQ [al-Qaeda] is familiar with the art of war, but U.S. military has ignored past lessons in favor of technology, and is ignorant of its current foe," the report says.
Part of al-Qaeda's "counterpropaganda strategy," according to the Army report, is to "turn people's eyes toward their leaders to put enemy [U.S. and coalition partners] on defensive, and take the initiative to affect public opinion."
That is nothing new to students of history and statecraft. George Washington devoted much of his Farewell Address to the need to defend the country against foreign subversion designed to corrupt the national identity. He recognized the difficult situation that "real patriots" who resist foreign intrigues "are liable to become suspected and odious," while those espousing "pretended patriotism" - what he called "tools and dupes" of foreign interests - "usurp[ed] the applause and confidence of the people to surrender their interests."

J. Michael Waller is a senior writer for Insight.


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Mystery surrounds timing of rail blast in N. Korea and Kim visit

Special to World Tribune.com
EAST-ASIA-INTEL.COM
Tuesday, April 27, 2004
[Click here to zoom.] A satellite photo of the North Korean city of Ryongchon taken May 13, 2003 shows the train line running from the top left of the image to the bottom center.
SEOUL - The devastating explosion involving railroad cars carrying chemical and fuel products has raised questions about the timing of the blast and that of the passage along the same tracks by the North Korean leader.
The explosion occurred in the rail junction town of Ryongchon, 12 miles south of the North's Yalu River border with China. Pyongyang's Korea Central News Agency attributed the blast to "carelessness during the shunting of wagons loaded with ammonium nitrate fertilizer and tank wagons." Electrical contact from overhead wires had triggered the blast, causing damage that KCNA acknowledged was "very serious."
Was the ammonium nitrate was for fertilizer, as claimed by North Korea, or for rockets and other weaponry manufactured in and around Ryongchon, an industrial community of more than 300,000, many of them in the armed forces or military industries or both.
Another question was whether Kim Jong-Il had passed through the town nine hours earlier, as had widely been reported by Western news agencies, or had been there closer to the blast.
Ruined houses in Ryongchon, North Korea, on April 26, following a huge train blast on April 22 in this photo released by the Korean Central News Agency.
Because at least 76 of the 161 people killed were children, speculation has arisen that they had been marshaled to wave at Kim and his 40-man entourage as they sped by in a special train enroute to Pyongyang. Kim's train had crossed the bridge over the Yalu River early that morning, taking him on the final homeward leg of a journey to Beijing that had begun the previous weekend.
"That's part of the mystery of the whole situation," said Norbert Vollertsen, the German physician who spent more than a year ministering to North Koreans until he was expelled three years ago for crusading for human rights. "Many military and government people were there as well as students."
The immediate explanation was that the schoolchildren were just pouring out of a nearby school, flattened in the blast along with an agricultural college and the railroad.
They were at the epicenter of an explosion that aid workers said destroyed almost everything within 500 meters, creating a number of craters, destroying 129 public buildings and nearly 2,000 homes and tearing down buildings as far away as 4 kilometers.
While the government said there was no sign of sabotage, the South Korean gossip mill was rife with rumors about an attempted plot against Kim. Many here found it difficult to believe the blast was not a botched attempt on the "Dear Leader's" life by discontented military officers.
The rumors intensified as the hours and days passed after the blast with Kim Jong Il failing to make any public appearances. "North Korean Leader Not Seen in Public Since Train Blast," said the headline over one report by Yonhap News Agency.

- Full Text, Subscribers

Copyright ? 2004 East West Services, Inc.
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U.S. to set up new Iraqi chain of command by June
SPECIAL TO WORLD TRIBUNE.COM
Tuesday, April 27, 2004
BAGHDAD - The U.S. military plans to establish an Iraqi military and security force chain of command over the next two months.
U.S. officials said the military and security chain of command will be the priority of the Iraqi Defense Ministry. They said such a command would ensure discipline within the new U.S.-trained Iraqi forces.
"In the coming months, we will steadily strengthen our security partnership, placing increasing responsibility in the hands of Iraqis," CPA administrator Paul Bremer said. "By June 30, Iraqi soldiers in the ranks will report up through an Iraqi chain of command to Iraqi generals."
Officials said the U.S.-led coaltion continues to train members of the Iraqi security forces despite the flight of about half of the Iraqi military security forces during the Shi'ite and Sunni revolt in early April. They said the forces would now include former members of the Ba'ath Party, the ruling party under the Saddam Hussein regime, after screening to ensure that they did not participate in atrocities.
Over the next few months, the United States plans to accelerate the training and equipping of the Iraqi police, the Iraqi Civil Defense Corps, the Border Police, the Infrastructure Protection Service and the new Iraqi army. Officials said the training would be integrated into a chain of command for Iraqi forces. They said the Iraqi units that fought best against Sunni and Shi'ite insurgents in April were those with what officials termed a good, clear Iraqi leadership.
On April 18, Defense Minister Ali Alawi announced his appointment of the top Iraqi generals in the new Iraqi army. They included a chief of staff and his deputy as well as the senior military adviser to the ministry.
Officials said that 70 percent of senior Iraqi military and security officers would come from the army under Saddam. They said this would include the return of senior officers under the Saddam regime who did not serve in the top three layers of the Ba'ath Party or the top four layers of any ministry.
"You cannot pull generals out of thin air; you cannot recruit and train generals in a matter of weeks or a couple of years," CPA senior adviser Dan Senor said. "These are people who have to have tremendous experience."

Copyright ? 2004 East West Services, Inc.

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SPIEGEL ONLINE - 28. April 2004, 17:43
URL: http://www.spiegel.de/politik/deutschland/0,1518,297484,00.html
Todesfahrt nach Bagdad

Union will Fischer vernehmen
Von Matthias Gebauer
Im Fall der beiden auf der Fahrt nach Bagdad get?teten GSG-9-Beamten w?chst die Kritik am Au?enminister. Die Opposition will wissen, warum die Sicherheitsm?nner nicht auf dem Luftweg reisen konnten. Nach SPIEGEL-ONLINE-Informationen waren erst drei Tage vor der Todesfahrt zwei andere GSG-9-Beamte per Flugzeug in die irakische Hauptstadt gelangt.

DPA
Get?tete GSG-9-Beamte: Leichen noch immer verschwunden
Berlin - Im Innenausschuss des Bundestags nahm am Mittwoch Minister Otto Schily zu der Todesfahrt der beiden deutschen Elitepolizisten Stellung. In einem ausf?hrlichen Vortrag schilderte der Politiker nach Angaben von Sitzungsteilnehmern die bisherigen Erkenntnisse. Demnach ist sich die Bundesregierung sicher, dass die beiden Beamten, die am 7. April auf der Strecke von Amman in Jordanien nach Bagdad unter Beschuss von Aufst?ndischen gekommen waren, nicht mehr am Leben sind.
Die Suche nach den beiden Leichen der Beamten blieb bisher erfolglos, berichtete der Minister. Die Botschaft in Bagdad habe sowohl den Roten Halbmond, die amerikanische Armee, die Zivilverwaltung und auch mehrere unabh?ngige Organisationen um Hilfe gebeten. Bisher aber sei die Lage rund um den Anschlagsort n?rdlich der Rebellenhochburg Falludscha zu unsicher f?r die Bergung der Leichen. Trotzdem will die Bundesregierung alles tun, um die Leichen zur?ck nach Deutschland zu holen.
Schily sprach erstmals ?ber Details des Anschlags. Demnach h?tten die drei GSG-9-Beamten, die Bagdad heil erreichten, von bis zu 70 Angreifern mit Feuerwaffen und Raketenwerfern berichtet. Die jordanischen Fahrer sprachen gar von bis zu 400 Heckensch?tzen, die ?ber eine Strecke von fast zwei Kilometern auf der Umleitung um den Ort Falludscha das Feuer auf den Konvoi aus mehreren gepanzerten Fahrzeugen und einigen jordanischen Lasttaxis er?ffnet h?tten.

T?dliche Verwechslung
Sicherheitsexperten gehen mittlerweile davon aus, dass der Angriff eigentlich einem amerikanischen Truppentransport galt. Der deutsche Konvoi sei von einem Sperrfeuer ins n?chste gekommen, sagte Schily. Wie allerdings der "Toyota Cruiser" der beiden get?teten Beamten getroffen worden sei, konnte bisher nicht genau gekl?rt werden. Ein britischer Reporter hatte nach dem ?berfall Fotos von einer Leiche und einem ausgebrannten Toyota ver?ffentlicht. Ob diese Bilder jedoch tats?chlich einen der beiden GSG-9-Leute oder deren Fahrzeug zeigen, ist bisher unklar.

DDP
Innenminister Schily: Dienstaufsicht beim Ausw?rtigen Amt
In ersten Berichten ?ber den Anschlag war von einem Bus die Rede, der quer auf der Fahrbahn stand. Beim Passieren dieser Sperre sollte der Wagen der beiden Beamten besch?digt worden sein. Nach den neuesten Erkenntnissen allerdings haben alle Wagen die Sperre erfolgreich durchbrochen. Wo der Jeep der beiden am Konvoi-Ende fahrenden Beamten schlie?lich h?ngen geblieben sei, ist noch unklar. Laut dem Bericht des Ministers sei ein Fahrer des Botschafters kurz nach dem ?berfall die Strecke noch einmal abgefahren, habe aber den wei?en Toyota nicht gesehen.
Trotz des ausf?hrlichen Berichts blieben im Ausschuss viele Fragen zu der T?tung der beiden Staatsdiener offen. Minister Schily soll den Mitgliedern des Gremiums erkl?rt haben, er untersuche zwar den Angriff des Transports, aber nicht die vorausgegangene Planung. Mehrmals verwies der Minister auf die Zust?ndigkeit des Ausw?rtigen Amts (AA), welches die GSG-9-Leute als Schutz angefordert habe. Der Vorlauf des Transports falle deshalb in die Verantwortlichkeit des Au?enamts. Trotz der dringlichen Bitte der Opposition war am Mittwoch kein Verantwortlicher des Ministeriums von Joschka Fischer erschienen.

Fragen an den Au?enminister

F?r die Opposition stellt das Schweigen des AA "einen Skandal" dar, sagte der Innenpolitiker Hartmut Koschyk nach der Sitzung am Mittwoch. Die Union forderte Joschka Fischer deshalb pers?nlich auf, in der kommenden Woche im Ausschuss zu erscheinen. "Wir haben noch viele Fragen zum Vorlauf des Transports", sagte Koschyk. Vor allem will die Union wissen, warum die GSG-9-Leute bei der bekannterma?en gef?hrlichen Lage rund um Falludscha nicht nach Bagdad fliegen konnten - entweder mit einer privaten Maschine oder der jordanischen Airline Royal Jordanian oder gleich direkt aus Deutschland mit der US-Armee.
Mittlerweile mehren sich die Zweifel an den Darstellungen des AA. So hatten Sprecher erkl?rt, bei den privaten Airlines h?tten die Elitepolizisten ihre Waffen nicht mitnehmen k?nnen. Diese Tatsache wurde allerdings von den Airlines dementiert. So transportiert Royal Jordanian immer wieder Sicherheitspersonal, das seine Waffen dann als Ladung aufgibt. Am Mittwoch wurde auch bekannt, dass am 4. April - drei Tage vor dem t?dlichen Landtransport - zwei GSG-9-Beamte zur Verst?rkung der f?nf regelm??ig in Bagdad stationierten Polizisten auf dem Luftweg nach Bagdad reisten.



AP
Bagdad-Botschafter Ellner: Gefahr untersch?tzt?
Das AA hatte auf Nachfrage stets betont, ein Transport der Elitepolizisten samt Waffen und Ausr?stung mit Maschinen der US-Luftwaffe von Deutschland aus in den Irak sei von den Amerikanern abgelehnt worden. Selbst Minister Schily ?u?erte am Mittwoch im Ausschuss daran Zweifel. So vermutete er vor den Abgeordneten, dass sich die Amerikaner bei einer Anfrage "vermutlich positiv" ge?u?ert h?tten. Ob es aber ?berhaupt eine solche gegeben habe, konnte Schily nicht sagen.
AA hatte nie bei den USA angefragt
Recherchen der ARD belegen nun, dass eine dementsprechende Anfrage vom Au?enamt an die Amerikaner nie stattfand. Ein Sprecher der US-Botschaft in Berlin best?tigte laut Angaben des Senders vom Mittwoch, dass die Deutschen niemals um einen Transport der Polizisten gebeten hatte. ?ber die Gr?nde f?r die nicht erfolgte Anfrage konnte die Opposition nur spekulieren. "Vielleicht hielt es Fischer f?r nicht opportun, bei den Amerikanern anzufragen und sich einen Korb zu holen", sagte Hartmut Koschyk, "doch f?r die Sicherheit der deutschen Beamten h?tte es tun m?ssen."
Auch zur Sicherheitslage bleiben f?r die Union einige Fragen offen. Schily best?tigte Recherchen des SPIEGEL, nach denen der Transport zuerst wegen einer Panne, dann wegen eines Sandsturms und dann erneut wegen einer Grenzsperrung um vier Tage verz?gert aufbrach. Zur Absch?tzung der Sicherheitslage berichtete er lediglich, das O.k. zur Fahrt sei zwischen dem deutschen Botschafter, dem get?teten GSG-9-Mann Thomas H. und seinem Vorgesetzten abgesprochen worden.

St?hler?cken um die Verantwortung

DDP
Au?enminister Fischer: Vorladung in den Ausschuss
Unklar blieb aber, ob auch Expertisen der deutschen Sicherheitsbeh?rden, des Geheimdienstes und auch der US-Truppen vor der Abfahrt eingeholt wurden. Die beteiligten jordanischen Fahrer hatten Tage nach dem ?berfall gegen?ber SPIEGEL TV gesagt, sie h?tten die Botschaft mehrmals vor und auch w?hrend der Fahrt ?ber die Gef?hrlichkeit der Route gewarnt. Trotzdem sei die Kolonne aber am 7. April gestartet.
In der kommenden Woche soll nun erneut ?ber den Vorgang beraten werden. Eins aber wurde aber bei der Sitzung am Mittwoch klar: Zwischen dem Innen- und dem Au?enministerium hat bei der Verantwortlichkeit f?r die beiden Todesf?lle ein heikles St?hler?cken begonnen. Keiner der beiden Ministerien will am Ende als Schuldiger dastehen. Das AA wird nun zusehen m?ssen, wie es die Widerspr?che bei den eigenen Darstellungen erkl?ren kann. Die Union jedenfalls wird nicht m?de werden, den Fall aufzukl?ren.
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? SPIEGEL ONLINE 2004
Alle Rechte vorbehalten
Vervielf?ltigung nur mit Genehmigung der SPIEGELnet GmbH

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>> SYRIA WATCH...


Chief of Staff: Syria may have hidden Iraqi WMD

SPECIAL TO WORLD TRIBUNE.COM
Tuesday, April 27, 2004
TEL AVIV - Israel's military leader has for the first time publicly asserted that Iraqi weapons of mass destruction might have been sent to neighboring Syria.
Israeli Chief of Staff Lt. Gen. Moshe Ya'alon explained the failure of the U.S.-led coalition to find WMD in Iraq by saying Saddam Hussein's biological and chemical weapons might have been transferred to Syria.
"Perhaps they were transferred to a neighboring country, such as Syria," Ya'alon told the Israeli daily Yediot Aharonot on Monday. "We very clearly saw that something crossed into Syria."
Ya'alon said another possibility was that Iraq buried its WMD arsenal, Middle East Newsline reported. He said he would have conducted the search for Iraqi WMD differently, but did not elaborate.
It was the first time a high-level Israeli military official asserted that Iraqi WMD could have been transferred to Syria. Last year, a similar assertion was issued by the head of the U.S. National System for Geospatial-Intelligence, Lt. Gen. James Clapper.
The Israeli chief of staff said the Saddam regime modified Iraqi aircraft for CW attacks against Israeli targets in 2002. He said the aircraft included Soviet-origin fighters as well as unmanned air vehicles.
"We identified them: UAVs, Tupolev-16s and Sukhoi," Ya'alon said. "They were specially fitted for these kinds of missions - dispersing chemical weapons. We are talking about dozens or no more than hundreds of kilograms of material."
Ya'alon said the U.S. military located the Iraqi modified aircraft by the second day of the war in March 2003. The chief of staff said Israel had relayed information critical to that mission.
Copyright ? 2004 East West Services, Inc.

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Terrorists killed in Syria attack
By Albert Aji
ASSOCIATED PRESS


DAMASCUS, Syria -- Gunmen attacked a former United Nations office in a diplomatic quarter of Damascus yesterday, setting off a battle with police that pelted nearby buildings with bullets and grenades.
The fighting killed two attackers, a policeman and a civilian, the government said. But witnesses said three attackers were killed and a fourth was captured.

The gunbattle follows closely on stepped-up terrorist activity in Jordan and Saudi Arabia, both U.S. allies, but comes as a surprise because of frosty U.S. relations toward Syria, which is suspected of allowing radical Islamists to enter Iraq to fight American forces.
Syria has not seen such violence since the 1980s, when the government put down an insurgency by Islamic militants.
The vacant building formerly was occupied by the U.N. Disengagement Observer Force, which oversees an agreement between Israeli and Syrian forces in the Golan Heights. It was extensively damaged by fire during the gunbattle.
"Unidentified terrorists attacked a U.N. office building in Damascus, and this office is surrounded by many embassies as well," Syria's ambassador to Washington, Imad Moustapha, said.
Mr. Moustapha said it was too early to know the motivation of the attackers or whether they were Islamist.
"There was a random exchange of fire, and probably every building in that area was hit by a grenade or a bullet" before security forces surrounded the area and returned fire, he said.
Syria's official news agency, SANA, quoting a security source, called the attackers "a terrorist band."
The Al Arabiya television network said there were four attackers. It said three were killed and one wounded. The report could not be confirmed.
After the gunbattle, large crowds gathered to catch a glimpse of the damaged building. Youths drove by honking car horns, waving pictures of Syrian President Bashar Assad and chanting pro-Syrian and pro-Assad slogans.
In New York, Marie Okabe, a U.N. spokeswoman, said all U.N. staff and facilities were safe and accounted for.
The U.N. headquarters in Baghdad, the capital of neighboring Iraq, was bombed twice after the U.S.-led war last year. The first, on Aug. 19, killed 22 persons, including top U.N. envoy Sergio Vieira de Mello.
Witnesses, who said the violence started at about 7:20 p.m. and lasted 70 minutes, gave different reports.
One witness said four gunmen came out of a white van on the main Mazza Boulevard in front of the Canadian Embassy and started shooting indiscriminately. A police car on patrol in the area rushed to the scene and came under fire. The police shot back, and other police and plainclothes security forces arrived, the witness said.
Three gunmen were killed and a fourth was taken into custody, the witness reported. Five cars were gutted, and there was a fire at the building where the United Nations used to have offices. Police explosives experts were brought to the scene to examine the bodies of the dead gunmen to make sure they were not booby-trapped.
Another witness said the attackers were riding in two cars. Two explosions were first heard, and a heavy exchange of fire ensued. More than 15 explosions followed, the witness said.
Syrian political analyst Imad Shuaibi said two men "attacked with hand grenades and gunfire near the Iranian and Canadian embassies."
Mazza, on the western edge of Damascus, is home to the British ambassador's home, offices of the Iranian state news agency, the Iranian Embassy and the Canadian Embassy.
British and Iranian diplomatic officials said their embassies were not targeted in the attack, which might fit into a wider pattern of violence in the region.
Jordanian state television on Monday aired a videotape of four men admitting they were part of an al Qaeda plot to attack the U.S. Embassy and other targets in Amman using a combination of conventional and chemical weapons.
A commentator on the tape said the suspects had prepared enough explosives to kill 80,000 people.
Jordan disclosed the plot earlier this month and said it had arrested several suspects. Four other terror suspects thought to be linked to the conspiracy died in a shootout with police in Amman last week.
In Saudi Arabia, a suicide car bomber destroyed a security-forces building in the capital, Riyadh, six days ago, killing four persons and wounding 148.
A Saudi official said authorities had foiled five other terrorist attacks within the previous week. Suspected Islamic militants also killed at least five Saudi policemen this month, and a manhunt is under way for gunmen who have fought police.
Syria has been on the U.S. State Department's list of terror-sponsoring nations for its support of groups such as Hamas and Hezbollah that attack Israel. Syria, though, says the anti-Israeli groups are not terrorist and that it has an interest in fighting Islamic extremist groups such as al Qaeda.

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EU vs. Hamas
Israel's doing what so many other nations signed on to do.

By Joshua Muravchik

Israel's assassination earlier this month of Hamas chief Abdel Aziz Rantisi stirred gusts of indignation from European governments. As in previous cases, the critics largely rested their case on international law, a refrain also heard often from the continent's critics of American counterterror measures and of the war in Iraq.
British Foreign Minister Jack Straw asserted that "targeted killings of this kind are unlawful [and] unjustified." The French foreign ministry issued a statement saying that Israel's right to self-defense "should not be exercised against international law." The foreign minister of Ireland, which currently holds the presidency of the European Union, declared that "extrajudicial killings are contrary to international laws." Swedish Prime Minister Goran Persson called Israel's action "illegal and disgusting." Spokesmen for the governments of Germany, Italy, Austria, Portugal, and Russia made similar comments.
If the law is what these Europeans say it is, then, as Dickens's Mr. Bumble put it, "the law is a ass" because the moral case for Israel's counterattacks on Hamas is overwhelming. But even in strictly legal terms, Israel's actions have sound justification. Ironically and shamefully, it is not Israel but these very critics of Israel who are in flagrant dereliction of their legal obligations.
Each of these European states is a party to the Convention on the Prevention and Punishment of Genocide. Unlike, say, the Universal Declaration of Human Rights, the genocide convention is a treaty, with the force of law. It is one of the oldest, and perhaps the most widely subscribed piece of international human-rights legislation, and arguably the one with the soundest legal foundation, codifying what the Nuremberg tribunal and the U.N. General Assembly in its very first session found to be existing customary law.
Article One of the convention obligates every party "to prevent and punish" genocide as "a crime under international law." The convention goes on to define genocide as, inter alia, "killing" intended "to destroy, in whole or in part, a national, ethnical, racial or religious group."
By this definition, it is clear that Hamas is an organization devoted to genocide and has been working busily at this mission for years. Hamas's goal is the complete destruction of the Jewish state. As the late Rantisi himself affirmed: "By God, we will not leave one Jew in Palestine." Nor did Rantisi leave doubt about what would become of these Jews. Asked by an interviewer "what do you see ultimately happening to the people [of] Israel?" Rantisi replied: "They killed thousands of Palestinians.... so I think it is just to do with them as they did with us."
Nor are Hamas's intended targets limited to Israeli Jews. Hamas's covenant boasts: "HAMAS regards itself the spearhead and the vanguard of the circle of struggle against World Zionism [and] the fight against the warmongering Jews." It makes clear that there is to be no end of killing: "The Day of Judgment will not come about until Muslims fight the Jews and kill them. Then, the Jews will hide behind rocks and trees, and the rocks and trees will cry out: 'O Muslim, there is a Jew hiding behind me, come and kill him.'"
In short, Hamas's and Rantisi's platform is as clearly formulated a project of genocide as we have had since Mein Kampf. And indeed, Hamas has expressed a solicitousness for Hitler's project. As Rantisi put it, to compare Zionism to Nazism is "an insult to Nazism."
Nor can this all be dismissed as mere rhetoric. Hamas sends a constant stream of bombers to blow up buses, restaurants, markets, any place, in short, where Jews can be slaughtered. For every one whose murderous deed is achieved, handfuls of others are stopped along the way by Israeli security.
What this means is that France, Sweden, and the rest are under a legal obligation to do what they can to destroy or cripple Hamas and to assist in the arrest and prosecution of its leaders and members. What have they done to fulfill this responsibility?
Until six months ago, the EU allowed Hamas to work freely in Europe, as if it were just another NGO. The rationale was a specious distinction between the organization's "political" and "military" wings, much like the distinction between Hitler's Nazi party and his storm troopers. (Indeed, this distinction was drawn, leading the Times of London to applaud the "night of long knives" on the grounds that Hitler was bringing the "radicals" in his movement to heel.)
Only late last year were French objections overcome in the face of a particularly deadly bombing, and Hamas was banned in the EU, its financial assets frozen. But under the genocide convention, Europe's legal obligations (and those of all the other parties to the treaty) go well beyond belatedly closing its own territory to Hamas operations. They include doing what can be done to bring a halt to the genocide and punish the perpetrators. By killing the likes of Rantisi and Yassin, Israel is doing what all the other nations ought by law to be doing, too. Since they are blithely indifferent to their own solemn undertakings, Israel is left alone to defend the law and itself.

-- Joshua Muravchik, a resident scholar at the American Enterprise Institute, is author of Heaven on Earth: The Rise and Fall of Socialism and, most recently of, The Intifada and the Media.

http://www.nationalreview.com/comment/muravchik200404270843.asp


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Russia gold-digging in Japan
By Sergei Blagov

MOSCOW - For decades, Russia and Japan have been divided by their territorial dispute over the Kuril Islands, and the still unsigned post-World War II peace treaty. Now, yet another contentious issue has been raised that could further complicate bilateral ties: a dispute over gold worth billions of dollars that belonged to Russia's last tsar.
Russia plans to initiate discussions with Japan on the return of the tsarist gold that allegedly ended up in Tokyo almost a century ago, the Foreign Ministry says. Russia has made "certain inquiries to the Japanese side" on the issue, ministry spokesman Alexander Yakovenko announced. The issue of the gold "is not a matter of diplomatic negotiations between our countries for now. But this does not mean the Russian Foreign Ministry is ignoring the issue," Yakovenko said.
The gold was shipped to Japan by anti-Bolshevik leader Admiral Alexander Kolchak in 1920. Russian researcher Vladlen Sirotkin, in his four books, argues that the gold was given to Japan in exchange for weapons, but Kolchak never received any military hardware. Sirotkin estimates that, coupled with interest for the time the gold has been in Japan, it would now be worth US$80 billion. He claims that the gold is now held at Japan's Bank of Tokyo Mitsubishi.
Sirotkin claims that Japan seized 200 tons of Kolchak's gold, as well as "stole" 5.5 tons from the private coffers of the last tsar, Nikolas II, while it was in transit to Britain in March 1917. Sirotkin now argues that a "package solution" is needed for both territorial claims and the gold dispute between the countries. Tokyo acquired the islands in dispute - the 10,360 square kilometers of Etorofu, Kunashiri, Shikotan and the Habomai islets (Kurils) - in a treaty with Russia in 1875. The Soviet Union took them back in the closing days of World War II, a move that Japan has protested ever since as illegal.
Further, Moscow and Tokyo never signed a peace treaty at the end of World War II in 1945 because of Japan's claim over the four Kuril Islands. Russia has suggested the signing of a treaty before solving the territorial dispute, but Japan objects.
In 1994, Russia unearthed documents testifying that Kolchak, who was executed by the Bolsheviks in 1920, had sent at least 22 boxes filled with gold ingots to Japan. However, a lack of solid evidence has prevented Russia from turning the matter into a big diplomatic row. Japan has not officially commented on the gold issue, although Russian media reports claim that Tokyo had allegedly acknowledged that $2.7 billion worth of the tsar's gold remained in Japan.
In April, Moscow's mayor, Yuri Luzhkov, traveled to Tokyo to discuss bilateral economic ties, where Prime Minister Junichiro Koizumi told him that bilateral relations would skyrocket in the event of a resolution of the territorial dispute. Luzhkov reportedly conceded that bilateral trade remained negligible, even after growing 30 percent year-on-year in 2003 to $6 billion.
Russian analysts and media outlets have speculated that the issue of the gold, also raised during Luzhkov's trip to Tokyo, could be intended as Moscow's new response to Japan's territorial claims.
Moscow previously hoped that despite the continuing territorial dispute, Japan could still play a role in tapping the vast natural resources of Russia's Far East. But Tokyo has been reluctant to develop economic ties with Moscow because of the territorial dispute.
However, in a dramatic policy change, Ryutaro Hashimoto in July 1997 proposed a plan to improve bilateral relations. At the Krasnoyarsk summit in Siberia in November 1997, both nations decided to conclude a peace treaty by 2000, effectively separating the treaty from the territorial issue.
Until Hashimoto's policy turnaround, successive Japanese governments had said that there would be no expansion of large-scale investment in Russia without a solution to the territorial dispute. However, hopes to solve differences and sign a peace treaty before the end of the century failed to materialize - and now look even less promising than in 1997.
One of the recent Russo-Japanese summit meetings, between President Vladimir Putin and former prime minister Yoshiro Mori, took place in March 2001, in the Siberian city of Irkutsk. They signed a joint statement confirming a 1956 bilateral declaration as a "basis-setting legal document". In the 1956 declaration, in Article 9, Moscow pledged to return two islands - Habomai and Shikotan - once a peace treaty was signed.
In early February 2002, Tokyo claimed that the foreign ministers of both nations had agreed to conduct "two-track" or "dual" talks by separating talks on conditions for the return to Japan of the Shikotan and Habomai group of islets from those of the Kunashiri and Etorofu islands.
The Russian Foreign Ministry rejected using the so-called "two-track" approach. Some Russian officials have described Japan's hardline stance on the territorial dispute over the four islands as detached from reality. Russian officials have lashed out at Koizumi's "radical position" and aggressive style.
Nonetheless, Russia has been trying to rebuild relations with Japan based on economic ties and cooperation in international issues, such as North Korea. The Russian stratagem arguably involved diluting the importance of the territorial issue in the overall framework of relations with Japan.
In January 2003, a summit meeting in Moscow between Putin and Koizumi was supposed to work out ways to increase their economic and international cooperation, along with the talks for a peace treaty.
The bilateral action plan involved further diplomatic cooperation, presumably including North Korean issues. Both Russia and Japan are part of the six-party forum comprising the two Koreas, Japan, Russia, China and the United States, to discuss North Korea.
But a possible official dispute over the gold in Japan would do little in encouraging cooperation between Russia and Japan on North Korea. Now Moscow and Tokyo may face more difficulties in addressing North Korean issues of mutual concern unless they first make some headway in tackling their own bilateral problems.
Meanwhile, after recent strong Russian economic growth, Moscow has become less interested in Japanese economic assistance. Therefore, Moscow seems not to be interested in any of Japan's would-be economic incentives. By referring to the fate of the tsarist gold, Moscow might want to indicate that Russia is not likely to offer Tokyo any major concessions.

(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)

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Captores Reciben 500 Millones de D?lares al A?o

Latinoamericanos no denuncian los secuestros
Am?rica Latina es la regi?n del mundo donde m?s secuestros se producen al a?o. S?lo en el 2003 se produjeron alrededor de 7.000. Dado que muchos secuestros no son reportados a las autoridades, la cifra se queda bastante corta. El pa?s que registra el mayor n?mero de secuestros es Colombia, que desde finales de la d?cada pasada experimenta un aumento considerable, con un promedio anual de 3.000 retenciones.
Juan Carlos Becerra
Especial para Tiempos del Mundo
"En el negocio en el que la mercader?a es el secuestrado y los plagiadores cuidan de ?l hasta concretar el intercambio, pocas son las v?ctimas que pueden contarlo. La mayor parte prefiere el herm?tico silencio antes que ocupar las primeras planas de los diarios", reflexionaba Samuel Doria Medina, pr?spero empresario boliviano del cemento y de las hamburguesas, secuestrado durante 45 d?as por miembros del Movimiento Revolucionario Tupac Amaru de Per? (Mrta), en 1995.
"No s? d?nde he estado. No s? si era en un primer piso, un segundo piso o un s?tano. Solo s? que era un cuartucho ac?sticamente protegido, donde me sent? enterrado vivo", dec?a una vez liberado por sus captores despu?s de haber pasado varios d?as en cautiverio. "Lo peor era no saber lo que me iba a pasar: si me iban a matar o se trataba de un secuestro. Durante ese tiempo reflexion? que lo importante era la libertad, descubr? el valor de la libertad, de la comunicaci?n y del calor de estar con la familia".
Jam?s imagin? que despu?s de celebrar el quinto cumplea?os de su tercer hijo, Fabi?n, el 1? de noviembre de 1995, vivir?a las horas m?s dram?ticas y desesperantes de su vida. Aquel d?a hab?a asistido a la licitaci?n de una f?brica de cemento en Per?, donde la oferta de su empresa, la Sociedad Boliviana de Cemento (Soboce) hab?a sido de 28 millones de d?lares. Eran las 11:30 horas de la noche cuando a dos kil?metros de su oficina, ubicada casi en pleno centro de la ciudad de La Paz, seis hombres con uniforme militar y armas de fuego de grueso calibre interceptaron su veh?culo y lo detuvieron, no sin antes emplear la violencia. De all? lo llevaron a la ciudad de El Alto, a unos 12 kil?metros de La Paz, donde fue introducido en un cuartucho completamente cerrado que no superaba un metro por dos, donde lo ?nico que hab?a era un catre con una frazada y una bacinilla.
A partir de ese momento, tendr?a que subsistir con apenas una raci?n diaria de arroz, unas veces con carne, otras con huevo o sardina enlatada. "Fueron instantes de tensi?n insoportable. Sent? un escalofr?o desde la cabeza hasta la punta de los pies, como si fuera condenado a muerte. Hab?a momentos en que quer?a dormir d?a y noche, para escapar de aquella realidad pat?tica que viv? durante 45 d?as", dice. Militantes del Mrta peruano, al adjudicarse el plagio, exigieron una recompensa de seis millones de d?lares por su libertad, a tiempo de prevenir a sus familiares a no involucrar a la Polic?a. Las gestiones entonces fueron encargadas a un grupo negociador. Entre los estira y afloje, los extremistas, dirigidos por Mart?n Serna Ponce, lograron alzarse la friolera de $ 1.600.000, pagados por familiares del industrial.
El dinero, seg?n confes? el guerrillero posteriormente, sirvi? para financiar la toma de la embajada del Jap?n en Lima, Per?, el 17 de diciembre de 1996. Hace poco sali? en libertad, despu?s de m?s de cinco a?os de reclusi?n en Chonchocoro, una de las prisiones de m?xima seguridad del pa?s.
"Despu?s de mi retiro de monje (que quiso ser), ahora acepto que hay cosas que no tienen explicaci?n l?gica. Pero que existen, existen. Hoy doy menos importancia al dinero, a pesar de que resuelve problemas, pero es menos importante que la libertad", comenta Doria Medina, asegurando que dedica m?s tiempo a su familia y tiene el compromiso de devolver, con su trabajo, la solidaridad que recibi? de la ciudadan?a, en esos momentos dif?ciles.
Una industria en crecimiento
El secuestro es unas de las actividades delictivas m?s frecuentes en Am?rica Latina en la actualidad. En algunos pa?ses, se cuentan por millares los secuestrados. Seg?n expone el libro El negocio del secuestro, publicado por el Centro de Pol?tica Exterior (CPE), con sede en Londres, Inglaterra, Am?rica Latina es la regi?n del mundo m?s afectada por esta industria, que depara a los captores alrededor de $ 500 millones al a?o.
El pa?s que registra el mayor n?mero de secuestros es Colombia, que desde finales de la d?cada pasada experimenta un aumento considerable, con un promedio anual de 3.000 retenciones. En ese sentido, el a?o pasado result? especialmente turbulento en relaci?n al secuestro de extranjeros en este pa?s.
Los casos m?s destacados por la prensa tuvieron que ver con ocho turistas secuestrados el 12 de septiembre por el Ej?rcito de Liberaci?n Nacional (ELN) y el de tres estadounidenses que fueron retenidos el 13 de febrero, luego de que su avi?n cayera a tierra en una zona de influencia de las Fuerzas Armadas Revolucionarias de Colombia (Farc). Los primeros fueron liberados poco despu?s, pero los norteamericanos continuaban retenidos al cierre de esta edici?n.
El miembro de la Fundaci?n Pa?s Libre, Juan Francisco Meza, aseguraba hace unos meses que en Colombia no se pod?a deslindar el secuestro del crecimiento del conflicto. "El n?mero de secuestros ha crecido tanto porque las Farc y el ELN, lo han definido como estrategia para su financiaci?n, validando as? una actividad que a todas luces es deleznable y condenable.
Entonces, en la medida en que ellos han crecido, los secuestros han aumentado y han logrado un enriquecimiento paulatino y sistem?tico". Mafias de narcotraficantes, guerrilleros y delincuentes comunes utilizan el plagio para conseguir recursos. El m?vil econ?mico ha reemplazado a la reivindicaci?n pol?tica de otros tiempos. Las sumas de dinero que se piden por un rescate van desde 1.000 hasta varios millones de d?lares.
En M?xico, el secuestro afecta en particular a las clases medias y altas, pero no existen cifras confiables. Existen datos de la Procuradur?a General de la Rep?blica, pero se quedan cortos ante la proliferaci?n del `secuestro express', que consiste en retener a la persona unas cuantas horas y pedir cantidades f?cilmente accesibles para los familiares o el tiempo que sea necesario para sacar todo el dinero posible de las tarjetas y cuentas bancarias de la v?ctima. Estos plagios rara vez son reportados por temor a represalias o desconfianza hacia las autoridades.
En Am?rica Central este fen?meno se intensific? durante los tres ?ltimos a?os, especialmente en Honduras, Guatemala y El Salvador. Son muchos los casos reportados, aunque se estima que ciertas familias prefieren tratar directamente con los captores en lugar de avisar a la polic?a.
Temor en el norte
El pasado 3 de marzo, la Oficina de Asuntos Consulares del Departamento de Estado de Estados Unidos public? una `Advertencia de Viaje' (`Travel Warn-ing'), para'recordarles' a los ciudadanos estadounidenses que tienen intenci?n de viajar a Colombia el "evitar" hacerlo, debido a la situaci?n de inseguridad y violencia que se vive en el pa?s suramericano, especialmente en lo relacionado a los altos ?ndices de secuestros.
"La violencia del narcoterrorismo y otros elementos criminales contin?a afectando todas la partes del pa?s, urbanas y rurales", advierten en su escrito las autoridades.
Una de las principales inquietudes del gobierno de Washington --como dice textualmente el documento-- es que "los ciudadanos de Estados Unidos y de otros pa?ses contin?an siendo v?ctimas de amenazas, secuestros y otros tipos de violencia".
El Departamento de Estado asegura que desde el a?o 2000, unos 28 ciudadanos estadounidenses fueron reportados como secuestrados en varias partes de ese pa?s. Entre las v?ctimas destacan periodistas, cient?ficos, misionarios, trabajadores de los derechos humanos, personas de negocios, empleados del gobierno, turistas y ni?os peque?os. En muchos casos, los raptados fueron liberados tras haberse pagado cuantiosas sumas de dinero por su rescate.
"Los secuestros por recompensas ocurren m?s frecuentemente en Colombia que en cualquier otra parte del mundo y afectan a todas las ?reas del pa?s, especialmente las zonas rurales", se?ala la Oficina de Asuntos Consulares.
El documento oficial especifica que la mayor?a de los secuestros de estadounidenses en Colombia han sido cometidos por las Farc, el ELN y las Autodefensas Unidas de Colombia (AUC), que han sido designadas como "Organizaciones Terroristas Extranjeras" por la secretaria de Estado. Tambi?n se advierte que "al ser pol?tica de Estados Unidos el no hacer concesiones o tratos con terroristas, la capacidad del gobierno estadounidense para asistir a sus ciudadanos secuestrados es limitada".
Se han dado casos en que los rehenes de los grupos subversivos terminan siendo v?ctimas de homicidios, como el de los tres estadounidenses secuestrados por las Farc que fueron asesinados en marzo de 1999.
Colombia es la ?nica naci?n latinoamericana que integra la lista de 26 pa?ses en torno a los cuales el gobierno estadounidense ha emitido un `Travel Warning' y "no recomienda" a sus ciudadanos viajar. La mayor?a de los pa?ses incluidos en dicha lista est?n ubicados en ?frica y Oriente Medio.
Pero este temor por los "peligros que conlleva Am?rica Latina" trasciende a las autoridades de Estados Unidos. No son pocas las empresas norteamericanas y europeas que dejan entrever una fuerte preocupaci?n cada vez que tienen que enviar personal a esta parte del mundo, en particular cuando se habla de Bogot?, S?o Paulo, Ciudad de M?xico y Caracas.
A veces la estrategia que utilizan estas empresas es emplear a profesionales locales y realizar las reuniones en lugares m?s seguros, caso de Miami, por ejemplo.
Expertos en seguridad sostienen que los trabajadores que est?n en una ciudad extranjera deben aprenderse sus rutas hacia y desde su trabajo, clubes, centros comerciales y otras paradas rutinarias, pero siempre evit?ndolas para evitar ser controlados. Tambi?n es importante conocer la ubicaci?n de las estaciones de polic?a, hospitales, edificios gubernamentales y otras instalaciones a lo largo de las rutas comunes que puedan brindarles un refugio seguro o ayuda en caso de una emergencia.
?Pagar o no pagar?
La forma m?s radical para combatir el secuestro es no pagando el rescate. Hay pa?ses que lo han puesto en pr?ctica y ciertamente el n?mero ha disminuido radicalmente. En unos lugares, aparte de congelar las cuentas bancarias de los familiares, incluso se contempla como delito pagar el rescate.
En Colombia, la industria del secuestro genera el 22 por ciento de los ingresos de la guerrilla --alrededor de $ 100 millones anuales-- gracias a los secuestros. Esto ha generado movimientos en otras partes del orbe que tienden a ver el no pago como una forma de frenar este problema.
El Banco Mundial asegura que las multinacionales han pagado alrededor de $ 1.000 millones por extorsiones y seguros contra secuestro. Esto, sin embargo, no ha garantizado de ninguna manera la liberaci?n de la v?ctima ni la seguridad de una empresa, pues persona y bienes quedan supeditados al capricho del victimario.
Es f?cil discutir el dilema entre pagar o no en un art?culo period?stico o en el calor del hogar, pero no suele resultar tan f?cil para aquellas personas a las que un plagiador amenaza con matar a uno de sus seres queridos. Algunos estudios sostienen que la solidaridad que se tiene con un secuestrado al pagar por su libertad, se convierte en falta de solidaridad con los dem?s miembros de la sociedad, pues lo ?nico que hace es aumentar la rentabilidad del negocio y, por consiguiente, el riesgo de secuestro para m?s gente.
El caso es que el secuestro no s?lo afecta a la v?ctima sino a la familia en general; ya que ?stos son sometidos a lo que los psic?logos, que trabajan el duelo, conocen como el proceso de la `muerte suspendida', que es la angustia que caracteriza al secuestro y que se suma a lo que los juristas llaman la `p?rdida de libertad'. Desorienta y tiende a provocar inacci?n y un sentimiento de impotencia en los afectados.
Lo que corresponde es conseguir un buen negociador que logre detectar qu? elemento traer? al reh?n a casa en la forma m?s r?pida y segura. Esto no significa que haya que pagar lo que piden. De hecho, si se paga r?pido hay una gran posibilidad de que la persona no regrese, porque dejar? una sensaci?n de que se tiene m?s dinero. Lo mejor es no entregar el dinero y trabajar con un verdadero experto en negociaciones que sepa cu?ndo hacer un movimiento de dinero, para evitar tragedias mayores.
En Paraguay, por ejemplo, los delincuentes ya est?n eliminando a la v?ctimas, tal como ocurri? en octubre del a?o pasado con Rodolfo Alliana Rodr?guez, de 24 a?os, quien fue ultimado de tres balazos.
Alliana era hijo de un conocido y acaudalado ganadero de la ciudad de Pilar, capital del departamento de ?eembuc?.
La ciudadan?a a?n est? incr?dula. La violencia se ha apoderado de las calles y la inseguridad va en r?pido aumento. Desde el primer secuestro que se hizo p?blico en este nuevo milenio, a fines del 2001, situaci?n de la que fue v?ctima Mar?a Edith Bord?n de Debernardi, se sucedieron muchos otros como los de Mari?ngela Mart?nez Houstin, Katia Mar?a Riquelme, Graciela D?valos viuda de Pereira, Mar?a Mercedes Elizeche, Oscar Arturo Barboza (asesinado) y el de Gilda Mar?a Estela Vargas, secuestrada el 22 de agosto del 2003 y a?n con paradero desconocido. Se estima que los actos delictivos en el pa?s aumentan en un promedio de 12 por ciento cada a?o. En el 2003 se registraron 11.252 hechos punibles, pero las autoridades se muestran especialmente preocupadas por el aumento de los secuestros.
El resurgimiento de esta industria comenz? con el sonado caso de Mar?a Edith Bord?n de Debernardi, quien estuvo secuestrada m?s de 60 d?as y fue liberada previo pago de un mill?n de d?lares. El hecho ocurri? en noviembre del 2001. De ah? en m?s siguieron los secuestros, incluso a gente conocida, como la ex modelo Mar??ngela Mart?nez, secuestrada en marzo del 2003 y liberada previo pago de $ 300.000; o Mar?a Mercedes Elizeche, en agosto del a?o pasado, quien pudo huir de sus captores.
En este momento, el caso de secuestro m?s importante para la administraci?n de Nicanor Duarte Frutos, presidente de la Rep?blica, es el de Gilda Mar?a Estela Vargas (59).
Por ella sus familiares pagaron m?s de $ 60.000, en dos entregas, pero los secuestradores no liberaron a la v?ctima.u
Colaboraron en esta investigaci?n Mart?n Brakenridge (Paraguay), Alexandra Farf?n (Colombia), Carlos Becerril (M?xico) y Pedro Frisneda (Estados Unidos).

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No hay pa?ses en calma
Isidro L?pez
Tiempos del Mundo

MANAGUA. Nicaragua podr?a considerarse como uno de los pa?ses del continente americano menos peligroso, donde cualquier ciudadano nacional o extranjero puede transitar por las calles y carreteras, inclusivas las m?s alejadas, sin riesgo de ser secuestrado por motivaciones econ?micas o de otra ?ndole.
Son espor?dicos los casos de secuestros que se han registrado en los ?ltimos a?os en el pa?s, seg?n los informes suministrados por las autoridades policiales.
Los pocos casos que reporta la polic?a y que ha divulgado la prensa local se han producido en zonas alejadas, principalmente de la parte norte de Nicaragua, y sus v?ctimas son peque?os finqueros dedicados al cultivo del caf?, la actividad ganadera o la producci?n de granos b?sicos.
Durante el a?o 2003 se registraron un total de 18 secuestros. La mayor?a de las v?ctimas fueron plagiadas cuando se encontraban en sus casas de habitaci?n. Solo cuatro casos ocurrieron cuando transitaban en la v?a p?blica, seg?n el informe policial del a?o pasado. La industria del secuestro tuvo su auge en Nicaragua entre 1990 y 1995 cuando en el pa?s, pese al proceso de pacificaci?n, surgieron grupos integrados por antiguos "contras" antisandinistas y por ex militares sandinistas.
Esas bandas de rearmados adem?s de combatir al ej?rcito, por diferencias de car?cter pol?tico tambi?n se dedicaron a asaltar y a asesinar a campesinos opuestos a su lucha, as? como a secuestrar a grandes y medianos productores agr?colas, a fin de exigir rescates para financiar sus actividades irregulares.
Las bandas de secuestradores operaron principalmente en zonas monta?osas de los departamentos de Jinotega y Matagalpa (norte del pa?s), Juigalpa y Boaco (centro) y en el tri?ngulo minero de Siuna, Bonanza y Rosita, en la Regi?n Aut?noma del Atl?ntico Norte (Raas).
"Pr?cticamente el auge de la industria del secuestro ya es asunto del pasado", afirm? un alto oficial de la polic?a en declaraciones a Tiempos del Mundo. Los secuestros por motivaciones pol?ticas de mayor relevancia o que recuerde la poblaci?n, ocurrieron a mediados de la d?cada de los noventa, cuando en Managua, un grupo de ex militares sandinistas alzados en armas, retuvo por varios d?as a una veintena de l?deres pol?ticos nicarag?enses, incluido el entonces vicepresidente de la rep?blica, Virgilio Godoy.
La acci?n de los ex militares sandinistas fue en respuesta al secuestro que d?as antes hab?an perpetrado ex "contras" rearmados contra una delegaci?n de diputados y funcionarios que visitaba la zona de Quilal? (norte de Nicaragua) para indagar la situaci?n b?lica que se viv?a entonces en esa regi?n.
Ambos secuestros masivos culminaron sin derramamiento de sangre despu?s de la oportuna mediaci?n del cardenal Miguel Obando y Bravo, principal jerarca de la iglesia cat?lica en Nicaragua.
Pese a que en Nicaragua los casos de secuestros son espor?dicos, las autoridades policiales y militares del pa?s unen esfuerzos con sus pares del resto de Centroam?rica para combatir a las bandas que se dedican a esa actividad il?cita.
La industria del secuestro no es tan alta como en Guatemala, El Salvador y Honduras. Seg?n datos de la polic?a, los secuestros en Nicaragua son pr?cticamente rurales.
El m?s reciente secuestro en una ciudad del pa?s se registr? el a?o pasado, cuando una banda internacional liderada por el guatemalteco Jorge Eli?cer Hern?ndez Gonz?lez, recientemente capturado en Managua con m?s de medio mill?n de d?lares, plagi? durante varios d?as a un ni?o, hijo de un ciudadano guatemalteco, cuando sal?a del colegio donde estudiaba.
Adem?s, la polic?a revel? que en Nicaragua ya comenz? tambi?n a practicarse la modalidad del `secuestro express'.
Otro tipo que tambi?n se ha registrado, aunque no con mucha frecuencia, es el autosecuestro, sobre todo entre empleados de empresas que comercializan productos en veh?culos, con el fin de quedarse con el dinero de la venta del d?a.

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Contra los secuestros masivos
BOGOT?. El presidente colombiano ?lvaro Uribe pidi? al Ej?rcito que capture a los guerrilleros de las Farc que viven en Neiva, en el sur del pa?s, y reiter? que el compromiso del Estado es derrotar al terrorismo.
As? lo asegur? Uribe a los periodistas durante un consejo de seguridad en dicha poblaci?n, capital del departamento del Huila, a 300 kil?metros de Bogot?. Seg?n el presidente colombiano, buena parte de los rebeldes de la columna m?vil `Te?filo Forero' de las Farc, "que tanto da?o hace en Colombia, residen aqu?, en Neiva." Uribe dijo que conf?a en que los organismos del Estado puedan "dar gratas noticias al Huila y al pa?s desarticulando esta organizaci?n", acusada de secuestros masivos. (EFE)

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Los secuestradores sufren metamorfosis

Julio Medina Murillo
Tiempos del Mundo
TEGUCIGALPA. El combate abierto que ha desarrollado el gobierno en contra de las bandas de secuestradores ha obligado a estos delincuentes a emprender una metamorfosis en su actividad y dejar a un lado la b?squeda de v?ctimas `grandes' en la c?pula empresarial del pa?s, para apostar por el `volumen' de varios golpes contra miembros de la poblaci?n com?n. Los `secuestros express' son ahora el dolor de cabeza para las autoridades nacionales. Luego de una exitosa reducci?n del 72 por ciento en el n?mero de plagios cometidos en los ?ltimos 12 meses, en comparaci?n con las cifras que se ven?an dando desde el a?o 2000, los funcionarios de Seguridad P?blica enfrentan ahora una amenaza mucho m?s dif?cil de combatir.
En este tipo de casos los delincuentes secuestran a una persona por unas horas o un par de d?as y la liberaci?n se produce luego de la entrega de una cantidad relativamente baja. Generalmente los pagos de dinero que se mueven en estas operaciones son de 10 mil y hasta 50 mil lempiras (de $ 560 a $ 2.800). "Esta es una cifra oscura que todav?a no se conoce, no se tiene un n?mero determinado de personas afectadas", afirm? el vocero de la Polic?a Preventiva, Leonel Sauceda, ya que las v?ctimas prefieren sufrir la pena en el anonimato para no ser v?ctimas de la venganza de los malhechores. Las bandas que realizan estas operaciones est?n integradas por hondure?os y extranjeros, sobre todo salvadore?os y guatemaltecos que, a pesar de la seguridad, han mudado sus actividades a la clase media y media baja.
Su modus operandi es casi el mismo. Interceptan a una familia saliendo de un centro comercial y obligan al patriarca a retirar dinero de los cajeros autom?ticos a cambio de la libertad de sus dependientes.
En otros casos se da en supermercados, donde ante un descuido de los padres, los delincuentes sustraen a sus hijos y piden, a cambio de su liberaci?n, el uso de su tarjeta de cr?dito para comprar alimentos o para obtener efectivo en los cajeros autom?ticos.
Tambi?n atacan a peque?os empresarios realizando `mini secuestros' en contra de alg?n miembro de su familia y pidiendo a cambio de su libertad cantidades que no sobrepasan los $ 3.000 ? $ 4.000.
El ministro de Seguridad, Oscar ?lvarez, consider? que los ?ltimos plagios ocurridos en Honduras fueron cometidos con la asesor?a de secuestradores salvadore?os y guatemaltecos. Cuerpos de Inteligencia, como la Polic?a Internacional (Interpol), han alertado que el secuestro se ha convertido en una "industria", especialmente luego de la "guerra fr?a" cuando se desmovilizaron muchos grupos guerrilleros, sobre todo en la regi?n centroamericana, y hoy d?a mueve cantidades millonarias. Para el caso, en Honduras en el a?o 2000, cuando se registraron 47 plagios --el mayor n?mero ocurrido en lo que va del presente siglo--, se report? que las familias de los plagiados pagaron alrededor de 43 millones de lempiras ($ 2,4 millones), por el rescate de sus parientes.
De acuerdo con la Direcci?n General de Investigaci?n Criminal (Dgic), los plagiarios ?ltimamente no respetan posiciones econ?micas, ya que se han pagado rescates de hasta tres millones de lempiras ($ 170.000), pero en otros casos se cancelaron 60 mil lempiras ($ 3.300).


Aumentan sanciones
Dentro de las reformas penales que se aprobaron para combatir el secuestro destacan las agravantes cuando el delito se cometa contra una persona mayor de 60 a?os, contra un menor de edad o cuando ya tienen al secuestrado y utilizan drogas o violencia para reducirlo o maltratarlo. Aunque tambi?n contienen atenuantes, que van desde el arrepentimiento de un secuestrador y proporcionar informaci?n a la polic?a hasta el buen trato al secuestrado. En esas circunstancias, el juez considerar?a rebajarle la pena. Adem?s, el gobierno cre? el Grupo Especial Antisecuestros (Geas), conformado por 53 integrantes, que se han apuntado varios ?xitos al liberar a personas secuestradas y capturar a los delincuentes.
Por ejemplo, de los tres secuestros reportados en lo que va del a?o, dos de las v?ctimas han sido rescatadas con vida y sus captores guardan prisi?n sin haber podido cobrar ni un centavo a sus familiares. Durante el per?odo 1995-2002, se registraron 195 secuestros de personas por diversos motivos y la mayor incidencia se tuvo en el a?o 2001, cuando se registraron 36.
Tomando como referencia los ?ltimos ocho a?os, el promedio de secuestros fue de 24 por a?o, es decir, un promedio de dos secuestros mensuales. Si bien en el 2002 se experiment? una reducci?n de secuestros en comparaci?n con el 2001, se mantuvo el promedio de dos plagios mensuales.
En el 2001 comenz? una reducci?n marcada en el n?mero de plagios, que desemboc? en una ca?da del 72 por ciento el a?o pasado, y en los primeros cuatro meses del 2004 s?lo se han reportado tres secuestros, dos de los cuales terminaron con la libertad de la v?ctima y la captura de los criminales.


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>> POLICY WATCH...

Social Security Time Bomb, and the Candidates Aren't Talking

Wednesday, April 28, 2004

By Michael Tanner
Washington recently went into one of its periodic spasms of shock and indignation because of Federal Reserve Chairman Alan Greenspan's (search) comments that Social Security cannot continue to pay its promised level of benefits with its currently projected levels of revenue.
Greenspan was not saying anything new. But politicians of every stripe reacted as if he had announced that the sun was about to stand still in the sky.
Now, the Social Security (search) system's trustees have released their latest report on the program's finances and once more reaffirmed the truth of Greenspan's statements. In doing so, the trustees offer us another opportunity for an honest debate about how to reform Social Security and ensure that our children and grandchildren will have the opportunity for a safe, secure retirement.
The Trustees confirm that Social Security will begin to run a deficit by 2018, just 14 years from now, and the same date as in last year's report. Thus, while politicians dithered and tried to pretend the issue would go away, we moved another year closer to disaster. But the truly frightening numbers are found further into the report, and make clear the magnitude of the fiscal train wreck awaiting us.
The figure most cited in the media is the "present value" of Social Security's unfounded liabilities, $3.7 trillion, which represents the amount needed to cover shortfalls after the Trust Fund is exhausted in 2042. An additional $1.5 trillion would be needed to redeem the bonds in the trust fund, for a total unfounded liability of $5.2 trillion, on a present value basis. Present value calculations are an important number for economists and actuaries--they show the amount the government would have to set aside today (assuming it earned standard interest rates) to pay all promised benefits in the future. But, of course, the government cannot set aside $5.2 trillion today. That would be nearly half of our Gross Domestic Product (search).
Therefore, a better measure of Social Security's financial crisis is its actual cash deficit: the total amount that its expenditures will exceed its revenue from 2018 on. Measured in constant 2004 dollars, that shortfall is an astounding $26 trillion--$26,000,000,000,000.00.
To put this in context, in 2018, the first year that Social Security will run a cash deficit, that shortfall will be approximately $16 billion, or roughly the equivalent of the current budgets for Head Start and the WIC nutritional program. In another two years, Social Security's shortfalls will nearly exceed those two programs, plus the Departments of Education, Commerce, Interior, and the Environmental Protection Agency. By 2030 or so, you can throw in the Departments of Energy, Housing and Urban Development, and Veterans Affairs. And the biggest deficits would be still to come.
Or, if you would rather look at it in terms of taxes, in the first year after Social Security starts running a deficit, the government must acquire revenues equivalent to nearly $200 per worker. By 2042, the additional tax burden increases to almost $2,000 per worker, and by 2078 it reaches a crushing $4,200 per worker (in constant dollars). And it continues to rise thereafter. Functionally, that would translate into either a huge increase in the payroll tax, from the current 12.4 percent to as much as 18.9 percent by 2078, or an equivalent increase in income or other taxes.
And all of this doesn't even begin to consider Social Security's other problems: a poor and declining rate-of-return for younger workers; issues of fairness for minorities and working women; the impact on wealth creation; and the lack of legal ownership and control over one's benefits.
The American people would be right to hope, therefore, for an open and honest debate over how Social Security should be reformed. So far, however, they would be disappointed.
President Bush has been willing to discuss Social Security reform, at least conceptually. He would allow younger workers to privately invest a portion of their Social Security taxes through individual accounts. But, so far he has been unwilling to put any political capital behind such proposals. And, he has been maddeningly short of details on issues such as how big private accounts should be, or how he would finance short-term cash shortfalls during the transition to individual accounts.
Bush's Democratic opponent, Sen. John Kerry, has so far defined his position primarily by what he is against. Campaigning in Florida, Kerry told a group of seniors, "I will never privatize Social Security. Never, never, never!" Kerry went on to say that he would never support any cuts in Social Security benefits either. "Not me. Not my party. Not ever." That's all very well--but then what is he for? As former President Bill Clinton pointed out, there are only three options for Social Security reform: raise taxes, cut benefits, or invest privately. Kerry seems to be taking benefit cuts and private investment off the table. Does that mean he supports tax increases? If so, he isn't saying.
At a time when politicians can expend so much time and energy on issues ranging from who gets married to the use of steroids in baseball, wouldn't it be nice for them to give us some straight forward answers about the ticking time bomb of Social Security?

Michael Tanner, director of the Project on Social Security Choice at the Cato Institute, is the editor of the new book, "Social Security and Its Discontents" (Cato Institute, 2004).

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Fixing the New Medicare Law #3: How to Build on the Drug Discount Card
by Grace-Marie Turner and Joseph R. Antos, Ph.D.
Backgrounder #1752

April 26, 2004 | |
http://www.heritage.org/

Starting this June, America's senior citizens will begin to see the first tangible benefits of the new Medicare law. Medicare beneficiaries will be able to start using new Medicare-approved prescription drug discount cards that are expected to produce discounts of up to 25 percent. Additionally, subsidies of $600 a year will be available to low-income seniors to help with their drug purchases.
This Medicare Prescription Drug Discount Card and Transitional Assistance Program already has sparked intense interest among companies seeking to participate. In January, the Centers for Medicare and Medicaid Services (CMS) received 104 applications from prospective card sponsors, and in March, it approved 71 of them. The CMS rejected 29 applications that did not meet its standards.
Medicare beneficiaries will be able to enroll beginning in May 2004 and can start using the cards and subsidies in June. The Administration expects more than 7 million seniors to participate.
This is a temporary program that is designed to provide interim help until the full drug benefit program begins in 2006. However, both the level of interest in this program and its rational structure suggest that it could provide the basis for a permanent program. Such an arrangement could feature privately negotiated drug discounts and fixed subsidies for the purchase of routine medications. It could also offer protection against catastrophic drug expenses.

Critics have raised four major concerns about the temporary drug card program:

A single drug card may not cover all the drugs a Medicare beneficiary uses.
After senior citizens have signed up for the card, card sponsors may drop particular drugs those seniors need.
Card plans can change drug prices weekly even though beneficiaries are locked into their plans for up to a year.
Rising drug prices may erode savings from the Medicare card.
To answer the first point, this is a discount program, not a drug benefit. By design, the cards cannot cover every drug and still provide meaningful savings. The card plans will obtain discounts from manufacturers by shifting consumer demand from one product in a particular drug class to another in order to concentrate purchasing power. If the drug cards were required to cover every drug in every category, discounts would be minimal, defeating the purpose of the program.

Second, the program offers beneficiaries protection against the loss of discounts on drugs they need. Drug card plans are required to cover at least one drug in all therapeutic categories to ensure that seniors will be able to get the drugs they need.

Third, price increases will be monitored and limited to ensure that any increases reflect prevailing market costs. Arbitrary price increases or formulary changes would be highly unpopular with beneficiaries and federal overseers alike, and there will be strong market pressures on the card plans both to keep prices as low as possible and to provide as many choices as feasible. Most sponsors are well-established firms with reputations to protect, and a majority of them plan to offer a Medicare Part D benefit. Consequently, those sponsors will try to make their cards as attractive as possible to seniors. While some card sponsors might find short-term gains from dropping drugs and/or raising prices, in the longer term, they would lose enrollment and could face expulsion from the program.
Finally, early reports indicate that pharmaceutical companies are offering very generous discounts on the drug card plans while still coupling their existing patient assistance programs with the cards. Health and Human Services (HHS) Secretary Tommy Thompson says card sponsors are vying with each other to negotiate the lowest prices on drugs in order to gain the largest numbers of enrollees. Seniors will be able to compare the individual drug prices offered by each card by visiting the new Web site at www.medicare.gov or by calling 1-800-Medicare.
A new study by researchers from Harvard University estimates that the drug discount cards will save seniors who do not have other drug coverage an average of 17.4 percent off current retail prices--for a total of as much as $1 billion a year in savings. The researchers predict that sicker beneficiaries will see slightly higher savings and poorer beneficiaries will save somewhat more than wealthier beneficiaries. They also say that low-income beneficiaries "will see the largest reductions in out-of-pocket drug spending relative to their income" and also will benefit from an annual $600 subsidy that is not included in the study's savings estimates.1

What the New Medicare Law Says
Title I of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), enacted on December 8, 2003, creates the new prescription discount drug card and transitional assistance program.

Drug Discount Cards
The law requires the Department of Health and Human Services to implement a new program of Medicare-approved prescription drug discount cards. Senior citizens who participate in this voluntary program will receive access to discounts negotiated by the private card sponsor they select. HHS anticipates that those who use the drug discount cards will see savings of 10 percent to 25 percent on their prescription drug purchases,2 although some drug-card sponsors believe they can offer even larger discounts, especially for direct-mail purchases and generics.
Congress specified that the discount card program would take effect no later than six months after the date of enactment of the legislation. On December 10, 2003--two days after the legislation was signed--HHS published an "interim final rule" for the Medicare Prescription Drug Discount Card Program to notify prospective sponsors about the rules of participation. Seniors will be able to start using the Medicare-endorsed drug discount cards on June 1, 2004.
The cards are intended primarily for beneficiaries, regardless of income, who currently do not have outpatient prescription drug insurance. Medicare beneficiaries are eligible for the drug discount card program if they are enrolled in Parts A or B and as long as they are not receiving outpatient drug benefits through Medicaid.

Transitional Cash Assistance
A key part of the program is a cash subsidy of $600 per year for eligible lower-income beneficiaries to use in purchasing prescription drugs. The funds will be provided through the particular drug discount card program selected by the beneficiary. The provision was designed to provide immediate help for certain seniors and disabled people on Medicare until the new Medicare drug benefit is implemented on January 1, 2006.
Individuals whose incomes are less than 135 percent of the poverty rate may qualify for the cash subsidy. For singles, this means those making less than $12,569 per year; for married couples, it means those making less than $16,862 per year.3 Medicare beneficiaries who are also eligible to receive assistance for prescription drugs through Medicaid, TRICARE for Life,4 or an employer group health plan may not receive the cash subsidy.
For those eligible for this transitional assistance, the federal government will pay the annual enrollment fee for the drug discount cards and also will provide a subsidy on the drug discount card of $600 each year in 2004 and 2005.
The new law establishes two categories of recipients for whom assistance will be offered:
Those with incomes below 100 percent of the poverty rate would be responsible for prescription drug co-payments of 5 percent.
Those with incomes of 100 percent to 135 percent of the poverty rate would have 10 percent co-payments.
Legislators decided that even low-income seniors should pay at least something for their drugs so that they would appreciate the value of the benefit. Therefore, after selecting the drug discount card program of their choice, seniors will pay 5 percent or 10 percent of the costs of their medicines, depending upon their income category. The balance, or the remaining 95 percent or 90 percent of the discounted drug costs, will be subtracted from their $600 allowance.
Medicare beneficiaries currently without prescription drug insurance would pay about $1,400, on average, to purchase their drugs in 2004, absent the prescription drug card program. HHS concludes that the $600 subsidy, coupled with the drug discounts, will be of substantial help to them.5
Those eligible for transitional assistance will receive the full $600 subsidy for 2004 even though the program does not begin until mid-year. Significantly, any balance left over from the $600 subsidy at the end of 2004 may be added to the 2005 allocation. However, the legislation stipulates that both the temporary discount card program and the $600 subsidies will end in 2006, to be replaced by the full Medicare Prescription Drug Benefit program. At that time, seniors can enroll either in one of the new subsidized Medicare Part D Prescription Drug Plans or in a Medicare Advantage plan to receive drug coverage.

Additional Assistance Through Private Programs
Most pharmaceutical companies plan to continue their existing discount programs, which provide drugs to low- and moderate-income seniors at lower prices, in conjunction with the transitional Medicare program. Many companies are working on initiatives that will enhance the value of the Medicare drug card to beneficiaries. For example:
Merck announced in February that it will provide its medicines free of charge for low-income Medicare beneficiaries who exhaust their $600 transitional assistance allowance (although there may be a fee to the pharmacist to dispense the drugs).6
Eli Lilly announced in January that it would make discounts available through its LillyAnswers program to lower- and moderate-income seniors using Medicare-endorsed drug cards. The Lilly program allows seniors with incomes below 200 percent of poverty without prescription drug coverage to pay a flat fee of $12 for a 30-day supply of any Lilly medication.7
Pfizer will continue its Share Card program, which charges $15 a month to fill any prescription for single Medicare beneficiaries who do not have drug insurance and who have incomes below $18,000, and for couples without drug insurance making less than $24,000. Pfizer will also partner with a Medicare drug card sponsor.
Other programs, such as the GlaxoSmithKline Orange Card and the Together Rx card offered by an affiliation of eight major drug companies, will continue to offer discounts of up to 40 percent on their medications to qualifying seniors.
Senior citizens may find that they can save money by enrolling in both the Medicare drug discount card program and one or more card programs offered by private vendors. While seniors can participate in only one Medicare-approved program at a time, there is no limit on their participation with other, non-Medicare-approved drug discount programs. Seniors who qualify for the $600 transitional assistance subsidy must sign up for a Medicare-approved drug discount card in order to receive this money.
Some of these private programs may provide savings superior to the Medicare-approved drug cards. For example, once their $600 subsidy is exhausted, seniors may decide to transfer back to those pharmaceutical company drug card programs that operate independently of the Medicare-approved drug cards. Getting a month's supply of Pfizer's Lipitor for $15, for example, is likely to be a better deal than the discounted price seniors would get through a Medicare-approved drug discount card. The $15 fee basically covers dispensing fees and program administration costs, with little or no payment for the drug itself. Therefore, charges from the private pharmaceutical company plans are likely to be lower than those from the Medicare discount card prices.

Enrollment
Beneficiaries will first select the discount card program of their choice when enrollment begins on May 3, 2004. Enrollment is voluntary. As mentioned earlier, the legislation specifies that beneficiaries may enroll in only one Medicare-approved drug discount card program at a time.
The legislation details the application processes for drug card programs, including a standard enrollment form for beneficiaries, and allows the sponsor to collect annual enrollment fees of up to $30. The beneficiary will fill out the enrollment form with basic information about his or her Medicare and Medicaid status.
If the beneficiary wants to participate in the $600 subsidy program, he or she will be required to submit information about income and other retirement and health benefits. HHS will verify information on beneficiary eligibility for the subsidy.
Medicare Administrator Mark McClellan says his agency is taking action to make it easier for low-income Americans to receive the $600 benefit. Some states will be able to automatically enroll low-income seniors in the Transitional Assistance Program, provided their laws allow state officials to sign enrollment forms on seniors' behalf. Medicare also will provide a standard enrollment form for the program on its Web site, eliminating the need for dozens of different low-income application forms for each drug plan.
Beneficiaries generally can switch to another approved plan only during the open enrollment period between November 15 and December 31, 2004.

Card Sponsors
Card sponsors can be pharmacy benefit management companies, wholesale and retail pharmacies, insurers, Medicare Advantage health plans, and partnerships of the above. In March, HHS approved 71 Medicare drug discount card applications. Of these, 28 were general card sponsors who will offer their discounts to beneficiaries enrolled in fee-for-service Medicare, either on a national or regional basis. Another 43 sponsors represent Medicare Advantage health plans that will offer the discount cards to their members.
The major pharmacy benefit managers (PBMs), such as Advance PCS Health, LP, Caremark Advantage, Inc., Express Scripts, Inc., WellPoint Pharmacy Management, and Medco Health Solutions, Inc., will participate, along with major health plans such as Aetna Health Management, LLC, Humana Insurance Company, and United Healthcare Insurance Company.
CMS rejected 29 applications, demonstrating its prudence in protecting Medicare beneficiaries. The applications were rejected primarily because the companies seeking approval did not have adequate financial resources, because they did not offer drug discounts in all 209 therapeutic categories, or because their networks did not meet CMS's criteria for operating in a sufficient number of pharmacies.
Discount card sponsors must have sufficient participation by bricks-and-mortar pharmacies in the regions where they are offering the cards, in addition to offering mail-order services to enrollees. Express Scripts said in February that it already had signed up more than 40,000 pharmacies nationwide to participate in its card program. Seniors in a given area must have a choice of at least two discount card programs, offered by different sponsors. With at least 17 drug cards approved nationally, that legislative criterion was easily met.
Other service area specifications stipulate that 90 percent of Medicare beneficiaries living in urban areas must have a participating pharmacy within two miles of their homes (five miles in suburban areas) and that 70 percent of those living in rural areas must have a participating pharmacy within 15 miles of where they live.
Drug card plans are required to cover at least one drug in each of 209 therapeutic categories. At least 55 percent of these categories must have a generic available, and pharmacists are required to notify beneficiaries if a lower-priced generic is available for the prescription they are seeking to fill. Card sponsors will be able to add or drop drugs from their formularies, and sponsors will be able to change the discounts available on individual pharmaceuticals. Price increases will be limited, however, ensuring that beneficiaries will face only those price increases prevailing in the market or that result from increases in the card plan's cost of operation.
Critics have charged that there will be mass confusion for seniors trying to sort through the offers, claims, and prices of so many discount cards. Indeed, it will be a challenge for companies to market their cards to customers and to distinguish their plans from their competitors' in such a short time frame once enrollment begins in May.
The CMS is planning to help by establishing a hotline (1-800-MEDICARE) and a Web site with information about the cards, including comparative pricing information on each drug for each card. The Web site will be updated weekly.
Impact of the Drug Card Provisions
Controversy continues to swirl around the new Medicare law, particularly with regard to the structure of the permanent prescription drug benefit, including the "doughnut hole,"8 whether government should "negotiate" drug prices, and questions about potential participation in 2006 both by seniors and by stand-alone prescription drug plans. This contrasts with the early acceptance and interest in the transitional drug discount card and the $600 subsidy.
Many companies that have applied to participate see the $600 subsidy as an attractive lure to enroll Medicare beneficiaries in their programs. These sponsors plan to market their cards actively and, in the process, educate seniors about this new assistance program.
The temporary discount card program may well turn out to be so popular that Congress could decide to extend it beyond 2005. As both the government and private sector gain more experience with the program, it could serve as a model for a larger Medicare drug benefit program. The $600 subsidy is essentially a defined contribution that gives seniors an incentive to get the best value for their money. Further, by participating in the discount card program, the money will go further than it would if seniors were paying the full retail price--as many without drug coverage currently do.
Reducing Prices and Maintaining Broad Access to Pharmaceuticals
The drug discount card program and the broader Part D benefit that becomes available in 2006 are designed to promote competition among private drug-only plans and comprehensive health plans (such as HMOs and PPOs) that offer a drug benefit to their members. The private plans will have an incentive to negotiate low prices from pharmaceutical manufacturers, which would be passed on to beneficiaries in the form of lower premiums and out-of-pocket costs. In addition to making their benefits financially attractive to potential enrollees, card sponsors and drug plans will offer customer conveniences, including a broad retail network of pharmacies, mail order service, telephone consultations, and the like.
The size of the discounts available to seniors who enroll in the Medicare drug discount card program depends on the ability of the plan sponsors to shift consumer demand from one product in a drug class to another. Pharmacy benefit managers have been successful in negotiating low drug prices for private insurance plans by using multi-tiered formularies that require lower copayments for preferred drugs and generics. A similar kind of financial incentive is possible for the Medicare discount card program, with sponsors of the discount cards offering larger discounts where they have negotiated better prices.
Using Private Competition to Deliver the Medicare Drug Benefit
The role of private competition has been a major point of contention in Congress. Critics of a competitive system argue that it could place beneficiaries at a disadvantage if plans change their formularies or discounts after the open enrollment period. Critics also assert that the government should exploit its market power and negotiate drug prices directly with manufacturers, and that drugs should be imported from Canada to keep prices low for everyone.

Bait and Switch
First, let us consider the concern that plans might bait and switch--advertising prices that are too good to be true and then raising prices after seniors are locked into the plan. HHS anticipated this possibility and built safeguards into the regulations. It will monitor price changes and allow them only within a limited range that reflects increases in a drug's average wholesale price or changes in the card sponsor's cost of operation.
Another requirement is that discounts, rebates, or other price concessions from pharmaceutical manufacturers or pharmacies must be accounted for in any proposed price increase to beneficiaries. In addition, HHS must be notified if the sponsor proposes to drop a drug from its formulary. HHS will then post the prices and formulary changes on its Web site.
Card sponsors clearly recognize that arbitrary price increases or formulary changes would be highly unpopular with beneficiaries and federal overseers alike. Card plans that do not meet reasonable consumer expectations will lose enrollment and could face expulsion from the program.
The risk of bait-and-switch tactics would be greater if drug card sponsors had only a short-term interest in the Medicare program, so that the loss of market share after the first year would be of little consequence. But most, if not all, prospective sponsors of the Medicare discount card are well-established firms with reputations to protect, and the majority of them are considering continued involvement with Medicare through the Part D benefit. For such sponsors, bait-and-switch practices would be bad business, placing them at a competitive disadvantage.
The Impact of Private Negotiations on Drug Prices
There is heated controversy over whether the government should be allowed to "negotiate" prices with pharmaceutical companies since, the argument goes, the government would be able to obtain lower drug prices than private firms. But government doesn't negotiate.9 It is a monopsony purchaser that dictates prices because it controls such a large customer base: Seniors consume about half of all prescription drugs sold in the United States.
Government would surely dictate prices that would shrink payments to pharmaceutical companies--payments that fund their investment in research and development, estimated to be more than $800 million for every new drug that comes to the market.10 The result would be less money, a less hospitable business climate for research, and fewer new drugs.
Further, Congressional Budget Office Director Douglas Holtz-Eakin wrote a letter on January 23, 2004, to Senate Majority Leader Bill Frist (R-TN) concerning the provision in the Medicare law that prohibits the government from negotiating prices with drug companies.11 The CBO concluded that:
striking that provision would have a negligible effect on federal spending ... because CBO estimates that substantial savings will be obtained by the private [drug] plans and that the [HHS] Secretary would not be able to negotiate prices that further reduced federal spending to a significant degree.
Drug Importation from Canada
Some critics of the new Medicare law argue that it would be better and cheaper simply to allow seniors to import drugs from Canada, where price controls prevail. The temporary drug card program provides a much safer and legal alternative for seniors than importing drugs from Canada or other countries. The Food and Drug Administration has found numerous safety problems involving prescription drugs sent to customers who order over the Internet from the United States.12
If wholesale importation were permitted, retail prices paid in the U.S. would decline only modestly because manufacturers would limit sales to Canadian wholesalers, and middlemen would eat up much of any price differences that arose. If importation occurred on a large scale, supply disruptions in other countries could threaten the worldwide distribution of pharmaceuticals. 13
Using the legal route of privately negotiated drug discounts from reputable, government-approved firms, with the added benefit of the $600 subsidy, is a much safer alternative for seniors.
How to Improve the Medicare Drug Card Provisions
Every Congress for years to come will be forced to address Medicare and, particularly, the prescription drug benefit. Senate Minority Leader Tom Daschle (D-SD) and others already have introduced legislation that would significantly amend the MMA. For example, they want to permit U.S. residents to purchase medications from Canada; to allow the federal government to "negotiate" lower drug prices; to fill the "doughnut hole" in the new Medicare drug benefit; and to restrict or eliminate the pilot test in which private health plans would compete against traditional, fee-for-service Medicare in six areas of the country beginning in 2010. Such proposals would be ineffective, costly, and damaging to health care innovation, and would shorten the time frame within which Medicare's financial crisis can be solved.
Conservatives will continue to be on the defensive against these and other initiatives unless they have ideas of their own to propose. They should start by calling for the temporary drug card program to be made permanent. They should also consider improving the benefit available in a permanent drug card program and allowing Medicare Advantage plans greater flexibility in offering a drug benefit to enrollees.

Proposal #1: Make the Drug Card Permanent for Beneficiaries Who Want It
The drug discount card program, and particularly its $600 subsidy for lower-income seniors, should not expire at the end of 2005 but should be allowed to continue. The funded drug card provides an excellent model for delivery of the drug benefit.14 Providing part of the benefit through a cash subsidy creates a defined contribution that gives government certainty over at least some of its program costs and rewards seniors for making prudent drug purchasing decisions.
Early experience with consumer-directed health benefit programs has demonstrated that consumers are more careful in their spending on health care needs when they are purchasing medical goods and services from a dollar-denominated account, particularly if they are allowed to roll over any savings to subsequent years.15 The rollover provision for the temporary drug card could be a particularly good incentive if the card program were to continue: Instead of the use-it-or-lose-it benefit structure under current Medicare, seniors could roll over unspent balances in their $600 account, giving them the opportunity to conserve resources for the future.
However, because the program is temporary, there is little incentive for seniors to save and every incentive to make sure they drain every dollar from the account. This occurs every December when workers, who have put pre-tax wages into a Section 125 flexible spending account, purchase designer prescription sunglasses or whatever other items they don't really need in order to make sure they don't just lose the money. Congress could avoid repeating this mistake by making the funded drug card a permanent program and allowing rollover of the balance in a senior's account from year to year.
One reason such a large number of companies applied to participate in the drug discount and transitional assistance program is that they want to establish a customer base for the full drug benefit in 2006. They will have made a significant investment in creating their temporary drug card programs and, if they find that the funded drug card is appealing to consumers, should have the option of continuing to offer the permanent benefit based upon a similar structure.

Proposal #2: Improve the Permanent Drug Card Option
The Medicare drug discount card program offers a limited benefit from which low-income seniors derive the greatest benefit and that was intended to serve only as a temporary bridge to a more generous benefit in 2006. If the drug discount program were to be made permanent, it would not be attractive compared to the more generous Part D benefit. But improvements could be made that would make a permanent funded discount drug card program a realistic option for more beneficiaries.
It is reasonable to give seniors the choice of a subsidized discount card account. The added resources available in 2006 could allow the account to be funded more generously and to be coupled with private catastrophic insurance.
The subsidy could be increased above the current $600 limit and could be extended to middle-income seniors who are not currently eligible for any subsidy in the discount card program. Seniors at higher income levels also could be allowed to participate, possibly with more modest subsidies to their card accounts than would be provided to low- and moderate-income seniors, but with the provision that they could make their own tax-deductible contributions to the accounts.
The funded drug card also could be coupled with private catastrophic drug insurance to make sure that seniors are protected against large drug expenses--something the temporary program lacks. To avoid attracting only the healthiest seniors into the permanent drug card program, subsidies could be adjusted for risk, and high risks could be pooled across all private plans (including Part D plans).
Seniors should be given the opportunity to continue to participate in this funded discount card program if they prefer it to the permanent Medicare drug benefit program.

Proposal #3: Integrate the Drug Card Into the Medicare Advantage Program
Beginning in 2006, the new Medicare Advantage health plans can incorporate the permanent prescription drug benefit created by the legislation into their benefit structures. The legislation gives the new plans limited leeway, however, in how they structure the drug benefit. Although they may want to build a benefit on the model of the temporary drug discount and assistance program, the legislation as currently drafted does not provide the needed flexibility. Congress could fix this. Seniors who prefer a funded drug card should be able to have it as an integral part of their overall health plan.
It is important to bring drug and medical benefits into the same plan. When health plans and drug plans are separate, there can be an incentive to push costs onto the other payer, potentially compromising patient care. An integrated plan can weigh the full costs and benefits of different treatment strategies rather than focusing on only part of the treatment. That reduces the chances that treatment decisions will be biased by the way benefits are financed.
Conclusion
Congress has provided a good start on a properly structured drug benefit through its transitional drug card program with funding for certain low-income beneficiaries. Drug discounts will be privately negotiated by competing drug plans, and seniors will have a wide range of plans from which to choose, each offering different menus of drugs.
Establishing a fixed contribution on the drug discount card enables government to know its costs while the prices--and savings--on drugs are visible to seniors. Experience with consumer-directed health plans shows that participants are likely to be more cost conscious when they are purchasing drugs from a cash account. Consumers also are more likely to consult with their doctors about how they can get the best value from their drug spending.
If the transitional drug discount program were improved and made permanent, seniors would have the power to save for future drug needs and would have more control over spending to get the drugs they need--whether generic or brand-name.
Involving consumers in their own health care spending decisions will be the next revolution in health care reform in the United States. By structuring the drug benefit so that consumers direct their own spending, Congress could, for once, keep Medicare abreast of the times and give seniors the power and resources to shape the pharmaceutical marketplace around their needs, both today and in the future.

Grace-Marie Turner is President of the Galen Institute, and Joseph R. Antos, Ph.D., is Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute.


-----
1. Juliette Cubanski, Richard G. Frank, and Arnold M. Epstein, "Savings from Drug Discount Cards: Relief for Medicare Beneficiaries?" Health Affairs Web Exclusive, April 14, 2004.
2. Centers for Medicare and Medicaid Services, "Overview: Medicare Prescription Drug Discount Card and Transitional Assistance Program," at www.cms.hhs.gov/discountdrugs/overview.asp.
3. U.S. Department of Health and Human Services, "The Facts About Upcoming New Benefits in Medicare," at www.medicare. gov/Publications/Pubs/pdf/11054.pdf.
4. TRICARE for Life is the health insurance program for military retirees and dependents.
5. Centers for Medicare and Medicaid Services, "Overview: Medicare Prescription Drug Discount Card and Transitional Assistance Program."
6. Merck Corporate News, "Merck to Provide Free Medicines to Low-Income Medicare Beneficiaries Who Exceed Discount Card Cap," February 12, 2004, at www.merck.com/newsroom/press_releases/corporate/2004_0212.html.
7. Eli Lilly and Company, "Lilly Unveils Participation in Medicare Prescription Drug Discount Program," January 21, 2004, at www.prnewswire. com/cgi-bin/micro_stories.pl?ACCT=916306&TICK=LLY&STORY=/www/story/01-21-2004/0002093050&EDATE=Jan+21,+2004.
8. Beneficiaries would have 75 percent of their drug spending covered by Part D for the first $2,250 after satisfying a $250 deductible. Those spending more than $2,250 would receive no additional reimbursement until they have spent $3,600 out of pocket. The gap in coverage is called the "doughnut hole."
9. Gail Wilensky, "How to Curb Spending on Drugs," The Washington Post, February 15, 2004, p. B7.
10. Tufts Center for the Study of Drug Development, " Tufts Center for the Study of Drug Development Pegs Cost of a New Prescription Medicine at $802 Million," November 2001.
11. Douglas Holtz-Eakin, Director, Congressional Budget Office, letter to the Honorable William H. Frist, M.D., Majority Leader, United States Senate, regarding the CBO's estimate of "the effect of striking the `noninterference' provision...as added by P.L. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003," January 23, 2004, at ftp://ftp.cbo.gov/49xx/doc4986/FristLetter.pdf.
12. Letter from Mark B. McClellan, Commissioner of Food and Drugs, to Diane C. Gorman, Assistant Deputy Minister, Health Products and Food Branch, Health Canada, February 12, 2004.
13. John E. Calfee, "The Grim Economics of Pharmaceutical Importation," American Enterprise Institute Health Policy Outlook, November 2003.
14. The funded drug discount card is part of an idea proposed by the authors in 2001, called the Prescription Drug Security Plan. For more information, see www.galen.org/pdrugs.asp?docID=608.
15. "Consumer Choice Health Care: Reports from the Field," a congressional briefing sponsored by the Galen Institute's Center for Consumer Driven Health Care, February 11, 2004, at www.galen.org/ccbdocs.asp?docID=601.

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? 1995 - 2004 The Heritage Foundation
All Rights Reserved.

>> POST CONFLICT DESIGNS FALL SHORT


Burning with anger: Iraqis infuriated by new flag that was designed in London
By Patrick Cockburn in Baghdad and David Usborne in Baghdad

28 April 2004
For many Iraqis it was the final insult. Again and again they expressed outrage yesterday that Iraq's United States-appointed and unelected leaders had, overnight, abolished the old Iraqi flag, seen by most Iraqis as the symbol of their nation, and chosen a new one.
"What gives these people the right to throw away our flag, to change the symbol of Iraq?" asked Salah, a building contractor of normally moderate political opinions. "It makes me very angry because these people were appointed by the Americans. I will not regard the new flag as representing me but only traitors and collaborators."
The outburst of fury over the flag highlights the extraordinary ability of US leaders and the Iraqi Governing Council to alienate ordinary Iraqis, already angered by the bloody sieges of Fallujah and Karbala. And yesterday, in the hotbed of Iraqi rebellion, the flag was burnt in public in a demonstration of public anger.
When, as expected, the controversial new flag is hoisted inside the security of the Green Zone in Baghdad today, there is little prospect that the flag will be fluttering over other Iraqi cities. When security officers at the United Nations undertake the daily ritual this morning of raising the standards of the 191 member countries up the white poles arrayed outside UN headquarters in New York's First Avenue, for Iraq it will be the familiar flag of Saddam Hussein's rule that is unfurled.
"So far, we haven't received anything about this from Baghdad," said Igor Novichenko, who is in charge of such matters in the UN's protocol unit. For now, he added, the old Iraqi flag of green and black, with "God is Great" in Arabic script across it, will retain its place outside UN headquarters.
That is not to say that the new version may not be fluttering on First Avenue one day. There are no great formalities involved in changing a country's flag. All that is required is for the mission of that country in New York - and the Iraqi mission is still open - to inform the UN of the new design.
But in Iraq greater problems loom where insurgents will be able to strengthen their patriotic credentials by sticking with the old and popular Iraqi flag and portraying the new one as a sign of subservience to foreign occupiers.
Already anti-US guerrillas are adopting the old red, white and black banner as their battle flag, tying it to their trucks and sticking it in the ground where they have their positions. This blend of nationalism and religion has proved highly successful in spreading resistance to the occupation.
It is increasingly unlikely that the Allies will have any legitimate Iraqi authority to whom they can transfer power on 30 June, as President George Bush has promised.
As the security situation deteriorates in Baghdad, Iraqis are more often refusing to reveal their family names when interviewed. Jassim, standing behind the counter in his grocery shop, said: "That flag is not Saddam's flag. It was there before Saddam and it represents Iraq as a country. The whole world knows Iraq by its flag."
A further reason for popular anger is that many Iraqis are convinced that their new flag is modelled on the Israeli flag. It is white with two parallel blue strips along the bottom representing the Tigris and Euphrates rivers with a yellow strip in between symbolising the Kurds. Above the stripes is a blue crescent to represent Islam. Iraqis say the blue stripes are suspiciously like those on the Israeli flag. They also ask why the Kurds have a stripe in the new flag but not the 80 per cent of Iraqis who are Arabs. Could it be because the Kurds are the only Iraqi community fully supporting the US?
The old Iraqi flag was modified but was otherwise unchanged by Saddam Hussein. It had red and black bands across the top and bottom and three green stars on the white stripe separating them. Just before the 1990-91 Gulf War the words "Allahu Akbar",God is Great, were added to boost the religious credentials of Saddam Hussein's secular regime.
The flag won the loyalty of many Iraqis who did not support the old regime. Dhurgham, a 23-year-old student, said: "We cheered Iraqi footballers under that flag for a long time. I feel it represents me as an Iraqi. I don't like this new flag. It does not look Iraqi. It is more like the Turkish or Israeli flags. The main reason I don't like it is that it comes from the Americans."
When the idea of getting a new flag was first talked about last year, it stirred up strong feelings against change. But the Iraqi Governing Council, made up of former opponents of Saddam Hussein and Iraqis in exile during his rule, has a well-established reputation for being wholly out of touch with Iraqi opinion. The council approved the new flag, only asking the artist to make the crescent a deeper blue.
"This is a new era," said Hamid al-Kafaei, the spokesman for the Iraqi Governing Council yesterday. "We cannot continue with Saddam's flag." The new flag is the work of an Iraqi artist resident in London called Rifat Chadirji whose design was the best of those considered. He is also the brother of Nassir al-Chaderchi, the chairman of the IGC committee charged with choosing a new flag for Iraq. "I had no idea about a competition to design the flag. My brother just called me and asked me to design a flag on behalf of the IGC. Nobody told me about a competition," Mr Chadirji told The Independent yesterday.
A cogent reason for changing the flag was that it was said to be unacceptable to Kurds who saw it as a symbol of oppression. But Mahmoud Othman, an independent Kurdish member of the governing council, said yesterday that the leadership should have waited until a parliament was elected before a decision on the flag was made.
* American aircraft and tanks attacked Fallujah last night, just hours after a US deadline expired for rebels to hand over their heavy weapons.
In the holy city of Najaf, 64 fighters loyal to the radical Shia cleric Moqtada Sadr were killed hours after Washington issued an ultimatum to him to clear his militia and their arms from mosques there, a US spokesman said.

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GAO Cites Cost Risks in Undefined Iraq Contracts

By Mary Pat Flaherty and Jackie Spinner
Washington Post Staff Writers
Wednesday, April 28, 2004; Page A15
The U.S. Army has yet to reach a final agreement on price or the exact work to be done under nearly $1.8 billion worth of contracts for Iraq reconstruction projects that are already underway, a situation that exposes the government to cost risks and reduces the chance for savings, according to a draft report by the General Accounting Office.
The work encompasses oil fields, the electrical grid, training for the Iraqi army and support for the occupying authority, the draft report states.
GAO auditors also found several instances in which Defense Department contracting officers "overstepped" their authority and ordered millions of dollars of no-bid reconstruction work that appears unrelated to the contracts, according to a copy of the draft obtained by The Washington Post.
The draft cites problems with oversight, including on work done as part of a $24 million contract in which some experts hired to advise occupying authority officials and Iraqi ministries failed to report for duty, did not do the work as expected or had stopped working.
The draft concludes that federal agencies "generally complied" with the laws and regulations governing no-bid or limited-bid contracts -- an issue that has drawn congressional attention. But the GAO reviewers do note shortcomings in the tasks ordered under various existing contracts.
The GAO review covers nearly $3.7 billion worth of private contracting work committed to as of last September -- a sliver of the $20 billion that Congress has appropriated for rebuilding since April 2003. The auditors attribute some failures to pressures to start reconstruction quickly in a hostile and shifting setting. The report says that both the military and contracting staff were short-handed and were working 15-hour shifts.
The report says that some challenges have been overcome, but that staffing and security remain "major concerns" that could ultimately affect reconstruction efforts.
GAO spokesman Jeff Nelligan said yesterday that his office will discuss only the final report, which is set to be released in May and could include changes after the various agencies have a chance to comment on the draft. Spokeswoman Lt. Col. Diane Battaglia said the Army does not usually comment on drafts, a position echoed by Lt. Col. Joseph M. Yoswa, a Pentagon spokesman for the occupying authority.
Among other shortcomings cited by the GAO is a $1.9 million no-bid deal with KBR made in November 2002 -- four months before the war in Iraq -- to develop a contingency plan to repair Iraq's oil pipelines. Work done by KBR -- formerly known as Kellogg Brown & Root -- has been a flashpoint on Capitol Hill during several hearings on the reconstruction efforts. KBR is a subsidiary of Halliburton Co., which Vice President Cheney headed between 1995 and 2000.
The contingency plan was ordered under a preexisting super-contract that KBR has to supply support services to the U.S. military worldwide. But the GAO auditors say that umbrella contract -- which was competitively bid -- would not have covered the no-bid contingency plan award.
KBR's work on the contingency plan, in turn, positioned it to win a subsequent no-bid contract from the Army Corps of Engineers in March 2003 to control oil fires and do emergency pipeline repairs in Iraq, the GAO report says. The company has been given $2.5 billion in work under that contract as of last month -- paid for mainly with Iraqi funds.
Wendy Hall, a spokeswoman for Halliburton, said fighting the oil fires is part of its expected work for the Pentagon in the event of war. "We were selected for this work because of our unique combination of business experience in defense contracting, engineering and construction and oilfield services," she said.
The draft GAO report does not address allegations now under criminal investigation that KBR overcharged the U.S. government for meals that were never served to troops and for fuel from Kuwait that was purchased at excessive cost.
The GAO criticizes two contracts awarded to Science Applications International Corp. (SAIC) of San Diego: The $24 million contract for expert advisers -- which has drawn criticism from the Pentagon's inspector general -- and an $82 million contract to establish a media network for Iraq.
Under the media contract, the draft states, SAIC bought about $7 million in unauthorized equipment and services, including an H-2 Hummer and a pickup truck. The work was done "in compliance with the direction of government officials," said Ron Zollars, an SAIC spokesman.
He added that previous criticisms of the contract were "baseless or taken out of context."
A spokeswoman for Rep. Henry A. Waxman (D-Calif.) -- a critic of no-bid Iraq contracts, particularly those awarded to Halliburton -- declined to comment yesterday.
David Marin, a spokesman for Rep. Thomas M. Davis III (R-Va.), who held the first hearing to review Iraq contracting, said Davis will not comment on the specifics of the draft, but he said it is his understanding "that GAO will paint a predictable good-news, bad-news picture. . . . At the end of the day, Davis anticipates this report supporting what he's been saying all along. That procurement in a war zone, where lives are literally at stake, is a tremendously complex matter prone to mistakes."
Marin added: "As things improve on the ground in Iraq, we'll see fewer and fewer sloppy acquisitions -- and less reliance on emergency procedures."

? 2004 The Washington Post Company

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More Armor Urged for U.S. Forces in Iraq
Wednesday, April 28, 2004; Page A22
As insurgents continue to use improvised bombs to attack U.S. military vehicles in Iraq, officials are growing increasingly concerned that the lack of heavy armored vehicles is putting U.S. forces at risk.
Defense officials said yesterday they are working to increase the number of armored Humvees for Operation Iraqi Freedom but said the 2,000 specially armored trucks there account for only half the Army's estimated requirements. Standard Humvees, considered utility vehicles similar to jeeps, are too vulnerable to attack, officials said.
Gen. Richard B. Myers, chairman of the Joint Chiefs of Staff, said yesterday that every armored Humvee in the inventory has been sent to Iraq and more are being built. In a Pentagon briefing, Myers said the enemy's changing tactics have highlighted the need to shore up transport vehicles.
Myers and Defense Secretary Donald H. Rumsfeld also responded to concerns raised by Gen. Larry R. Ellis at Army Forces Command. Ellis wrote the Pentagon that commanders in the field have found the armored Humvee "is not providing the solution the Army hoped to achieve" and that red tape could "fail our soldier and our nation." Ellis suggested the purchase of hundreds of eight-wheel Stryker combat vehicles instead.
Rep. Rob Simmons (R-Conn.), a member of the Armed Services Committee, said yesterday it is vital to the protection of soldiers to immediately increase the number of hardened vehicles in Iraq, whether that means more armored Humvees or Strykers. "Soldiers are dying because they're in a war zone," Simmons said, "but the risks they face increase when the equipment they have is inadequate for the threat."

-- Josh White

? 2004 The Washington Post Company

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>> OH CANADA
Canadians Allow Islamic Courts To Decide Disputes
Sharia Gains Foothold in Ontario

By DeNeen L. Brown
Washington Post Foreign Service
Wednesday, April 28, 2004; Page A14
TORONTO -- Suad Almad, her head wrapped in a blue silk scarf, was discussing her beliefs with a group of friends. She said fervently that she thought the lives of all Muslims should be governed by Islamic law, known as sharia.
"It's something nobody can change and we must follow," said Almad, who came to Canada from Somalia, then engulfed by war, more than 12 years ago. "We come to Canada and we become lost . . . We need our own court and we need our own law," she said, her voice strong and certain. "That's what I believe."
Almad and thousands of other Muslims, taking advantage of a provision of the law in the province of Ontario, can now decide some civil disputes under sharia, including family disagreements and inheritance, business and divorce issues, using tribunals that include imams, Muslim elders and lawyers. While it is less than full implementation of sharia, local leaders consider it a significant step.
Muslim promoters of sharia arbitration said that no cases had been decided but that the process is set. Islamic leaders created an Islamic Court of Civil Justice last fall and that organization, in turn, has chosen arbitrators, who have undergone training in sharia and Canadian civil law, according to organizers and participants.
Sharia is based on the Koran, which includes the teachings of Islam and revelations by the prophet Muhammad. According to Muslim beliefs, the Koran provides the divine rules for behavior, including rules about marriage, business and inheritance. Muslims must abstain from stealing, lying, killing, adultery and drinking alcohol.
Some Muslim leaders in Canada said that there should be no controversy about the new arbitration process, but some opponents expressed concern that people might feel coerced into accepting sharia-based arbitration. Government officials said that the decision to submit to such a process was subject to mutual consent.
A 1991 Ontario arbitration law permits such arbitration according to religious principles, just as rabbis in Jewish communities and priests in Christian communities help to resolve civil disputes, said Brendan Crawley, a spokesman for the Ontario attorney general.
"People can agree to resolve disputes any way acceptable," Crawley said in an interview. "If they decide to resolve disputes using principles of sharia and using an imam as an arbitrator, that is perfectly acceptable under the arbitration act."
Crawley said the arbitration act establishes a number of safeguards, including the requirement that parties enter into arbitration only on a voluntary basis. Any decisions by arbitrators are subject to court ratification.
Canadian officials said that no criminal matters would be considered by sharia arbitrators and no corporal punishment could be imposed. Crawley said that legal provisions in other provinces also permit such tribunals.
Jewish courts, using the same methods, have been operating in Ontario for years. Such a court, called a Beit Din, deals with monetary, business and family disputes, but no criminal matters. "Jewish courts have been operating in Toronto for as long as Jews have been here, hundreds of years," said Rabbi Reuven Tradburks, secretary of the Beit Din of Toronto. He said he had not heard of cases decided by arbitrators in Jewish courts that had been overturned.
"A court will not enforce a decision in violation of the Charter of Rights," Crawley said, referring to the Charter of Rights and Freedoms, part of the nation's constitution. He also said there were limits to arbitrators' powers. They cannot, for example, rule on matters regarding third parties. "The rights of children cannot be arbitrated," he said.
Supporters say the tribunals in Canada will make official a process that is already happening informally among Canada's estimated 600,000 Muslims. But critics said they feared that recognizing the tribunals could lead to discrimination, and particular concerns were raised about the rights of Muslim women.
Alia Hogben, a board member of the Canadian Council of Muslim Women, said she opposes the religious tribunals. "It is difficult to speak up because we don't want to feed into anti-Muslim, anti-Islamic stuff that is developing now," she said. "We are religious Muslim women. We don't want to come across as anti-Muslim. On the other hand, we cannot be quiet about something that worries us."
Although advocates of the sharia process stressed that participation in the tribunal process would be voluntary, some critics expressed concern that many Muslims would be labeled disobedient if they refused participation in such sharia-based arbitrations.
"If I am a woman of faith, and the community of people who see themselves as leaders say that if I do not follow the sharia court here, the Islamic Institute, then I will be tantamount to blasphemy and apostasy," Hogben said in a debate shown on Canadian television. "And you know that in some countries, apostasy means death sentence."
Homa Hoodfar, a professor of anthropology at Concordia University in Montreal, complained that there was little public discussion before the tribunals were created. "This vague idea of sharia court is what bugs me," Hoodfar said. "Because having worked on sharia law and family law in the Middle East, I know there is no one set [of laws]. Which country will they use as a basis? They don't answer. But also, the Canadian government does not question. They think sharia law is written in the Koran. But sharia is the interpretation of the law and practices."
Hoodfar said she was concerned that recent female immigrants could be forced into participating in tribunals and possibly victimized because they don't speak English or are not aware of their legal rights. "It won't affect my life or educated women who know their rights," Hoodfar said. "It will affect the rights of women who are new and need protection. They are much more subject to community pressure.
"I just feel this is completely 'black box' and nobody knows what is in it, and yet the government is giving the go-ahead for it. They didn't consult the Muslim community. They didn't put out a discussion. Nobody knows what it is."
Syed Mumtaz Ali , the president of the Canadian Society of Muslims, began circulating the idea for the court two years ago. In a statement on his organization's Web site, he said that the tribunals would allow Muslims to practice freedom of religion. "Muslim minorities living in non-Muslim countries like Canada are like wandering Bedouins," he wrote. "Although they are free to live according to the Divine Law to practice their faith unhindered in their homes" and mosques, he said, "they have practically no say in the making of the laws of the land and governmental institutions do not cater to their needs."
Ali said the creation of the Islamic Court of Civil Justice would allow this "without violating any Canadian Law." Ali told the Canadian Law Times that sharia tribunals were important for practicing Muslims in Canada. He said that Muslims would no longer have an excuse not to follow sharia because it would no longer be impractical in Canada.
"The concession given by sharia is no longer available to us because the impracticality has been removed," Ali said. He has written that Muslims who choose not to be governed by sharia "for reasons of convenience would be guilty of a far greater crime." Ali said in a telephone interview that no tribunal cases have been heard yet. He would not elaborate.
"There has been a lot of fear and skepticism about it with regards to women's rights," said Ayesha Adam, a mediator in Toronto. "Islamic belief does not allow women to be treated badly," she said. "Islamic law is based on equality, fairness and justice. I don't see how people just take out something from a particular part of the Koran and not look at it holistically. There are certain things that can't be dealt with here. Criminal code is one thing, so it doesn't apply."
Adam said that Muslim women are among those being trained as arbitrators, and their presence should ease the concern that women might not be treated fairly.
Almad and the other members of the Somalia Women's Organization in Toronto said they preferred to live by laws based on their religious beliefs. "No stealing, no drugs, no sex without marriage. No pork. This is our law," said Hamida Ainshe, another of the Somali women. "A man may take a second or third wife if he is able to support them financially. Yes, there is jealousy, but it is allowed under sharia."
The women said they did not know much about the tribunal and had not heard any information about how it would be run, but said they still welcomed it. "We are Somali and we are Muslim. When we go to court, the judge understands the secular system, but doesn't understand sharia law," she said. "If we have a court that understands our Islamic beliefs, it is good."
"This is what we believe," Almad said. "If you cannot do what you believe, you become a flower."

? 2004 The Washington Post Company
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Probe notes lapses in chemical arms disclosures


By Bill Gertz
THE WASHINGTON TIMES

Russia, China and Iran have failed to fully disclose details of their chemical weapons programs and arsenals that are to be destroyed under a 1997 treaty, raising proliferation risks, according to a congressional report.
Russia also is working on new chemical weapons that may circumvent the Chemical Weapons Convention (CWC), according to an investigation by Congress' General Accounting Office.

The report revealed that many of the 161 signatories to the convention, including Russia and the United States, will not meet a treaty deadline of 2012 for destroying all chemical weapons, such as nerve, blister and blood agents.
The report, to be made public this week and obtained by The Washington Times, was produced for Rep. Duncan Hunter, California Republican and chairman of the House Armed Services Committee.
Russia has failed to provide full details of its chemical agent and weapons inventory as required by the treaty, which mandates complete disclosures of production and development facilities and chemical agent and weapons stocks.
Without elaborating, the report added that Russia is thought to be working on "a new generation of agents that could circumvent the CWC and possibly defeat western detection and protection systems."
U.S. intelligence officials think that the threat of terrorists obtaining chemical weapons is growing.
"The lack of a credible Russian chemical weapons destruction plan has hindered and may further delay destruction efforts, leaving Russia's vast chemical weapons arsenal vulnerable to theft or diversion," the GAO stated.
The report said China "maintains an active chemical weapons research and development program, a possible undeclared chemical weapons stockpile, and weapons-related facilities that were not declared."
Iran also failed to provide accurate information on its chemical arms and "is seeking to retain and modernize key elements of its chemical weapons program," and Sudan has a program to develop chemical weapons indigenously, said the report, which credited the State Department with the information on the covert chemical arms activities.
The GAO noted that the Organization for the Prohibition of Chemical Weapons, which is in charge of monitoring the treaty implementation, has had problems in conducting inspections at military and civilian chemical facilities.
Mr. Hunter said Moscow is abusing assistance in eliminating chemical weapons.
"The facility we have built them is sufficient to destroy their entire nerve gas stockpile," he said. "Instead, they look at the plant and see the large number of jobs it created. Some Russians keep arguing that U.S. taxpayers should duplicate the plant in other locations around Russia."
Russia has been offered $585 million for chemical destruction from the United States, Germany and other nations, the reports said.
As of September, Russia had one operational destruction facility and had destroyed 1.1 percent of its 40,000 metric tons of chemical weapons. The United States has destroyed 25 percent of its chemical arms, said the report, noting that Russia and the United States hold more than 95 percent of the world's declared stocks.
Less than 40 percent of the signatories to the convention have passed laws that criminalize chemical weapons activities, the report said.
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N. Korea Nuclear Estimate To Rise
U.S. Report to Say Country Has At Least 8 Bombs

By Glenn Kessler
Washington Post Staff Writer
Wednesday, April 28, 2004; Page A01
The United States is preparing to significantly raise its estimate of the number of nuclear weapons held by North Korea, from "possibly two" to at least eight, according to U.S. officials involved in the preparation of the report.
The report, expected to be completed within a month, would reflect a new intelligence consensus on North Korea's nuclear capabilities after that country's decision last year to restart a nuclear reactor and plutonium-reprocessing facility that had been frozen under a 1994 agreement. Among the evidence used in making the assessment is a detailed analysis of plutonium byproducts found on clothing worn by members of an unofficial U.S. delegation that was allowed to visit North Korean nuclear facilities several months ago.
The increase in the estimate would underscore the strides North Korea has made in the past year as the Bush administration struggled to respond diplomatically while waging a war against Iraq in an unsuccessful effort to search for such weapons there.
Intelligence officials also have broadly concluded that a separate North Korean uranium-enrichment program will be operational by 2007, producing enough material for as many as six additional weapons a year, one U.S. official said.
With Democrat John F. Kerry's presidential campaign planning to highlight the dangers of nuclear proliferation, the leap in Pyongyang's nuclear capabilities during President Bush's tenure could leave the administration vulnerable to charges that it has mishandled the North Korea crisis. Experts said an arsenal of eight weapons means that North Korea could use its weapons to attack neighbors, instead of merely deterring a possible attack.
But some Bush administration officials believe the new estimate will help pressure North Korea's neighbors to back the U.S. position that Pyongyang's weapons programs must be dismantled without concessions. During a tour of Asia two weeks ago, Vice President Cheney warned that time is running out for diplomacy as an increasingly cash-strapped North Korea might seek to peddle its nuclear technology or fissile material -- including, Cheney said, to terrorist groups.
The estimates are guesswork based largely on circumstantial evidence, and administration officials in several agencies have yet to agree on specific numbers. The Energy Department has pressed for a higher estimate of North Korea's weapons and the Defense Intelligence Agency believes the uranium program will be operational at the end of this year, but the State Department's intelligence arm has been the most skeptical. The differences in the estimates depend in part on determinations about the power and efficiency of the North Korean design.
Work on the report began late last summer, after the first round of six-nation talks on the North Korea crisis, when various government agencies sought a unified position on the extent of Pyongyang's programs. Much of the report will not be made public, but its conclusions will guide official statements on North Korean capabilities.
In many ways, the official U.S. estimate of "possibly two" weapons lags significantly behind private-sector reports.
The International Institute for Strategic Studies in London concluded this year that North Korea's nuclear arsenal could reach four to eight bombs over the next year and increase by 13 bombs per year by the end of the decade. The Institute for Science and International Security in Washington recently estimated that North Korea has a maximum of eight or nine weapons.
"It's long overdue for them to do something," David Albright, president of the Institute for Science and International Security, said of the administration.
Albright said that the January visit of the unofficial delegation -- which included Siegfried S. Hecker, a former director of Los Alamos National Laboratory -- brought back evidence that North Korea has reprocessed all 8,000 spent fuel rods that had been held in a cooling pond under a 1994 agreement negotiated by the Clinton administration.
In late 2002, Pyongyang evicted international inspectors observing the pond after the United States suspended shipments of fuel oil because, officials said, North Korea had nullified the 1994 deal by having a clandestine uranium program.
In February, CIA Director George J. Tenet told Congress: "The intelligence community judged in the mid-1990s that North Korea had produced one, possibly two, nuclear weapons. The 8,000 [spent fuel] rods the North claims to have processed into plutonium metal would provide enough plutonium for several more." Tenet added that North Korea is "pursuing a production-scale uranium enrichment program" using technology provided by A.Q. Khan, a Pakistani metallurgist who recently admitted to making millions by providing nuclear equipment and know-how to other countries.
The delegation members provided samples of the clothing they wore during their tour of the Yongbyon facility, when the North Koreans showed Hecker a jar that they said contained recently reprocessed plutonium. Albright said traces of plutonium byproducts, such as americium, that collected on the clothing could be analyzed to indicate how recently the plutonium had been processed.
"I think it is generally accepted the North Koreans are probably telling the truth when they say some reprocessing activity took place," said Gary Samore, a weapons expert who was the principal author of the London institute's report.
The earlier estimate was based on calculations derived from the amount of plutonium North Korea was believed to possess -- about seven to 11 kilograms -- and the new estimate essentially reflects the number of additional weapons North Korea could produce from the plutonium derived from the 8,000 spent fuel rods. The calculation in part depends on determining how much plutonium is lost during reprocessing.
Albright said he reached his estimate of a maximum of nine weapons by calculating that North Korea possesses about 37 to 39 kilograms of plutonium and would need at least four kilograms per weapon.
U.S. officials have said Khan told interrogators that in the 1990s the North Koreans showed him three devices they identified as nuclear weapons. The report, which has not been confirmed, would suggest North Korea was more efficient in its use of plutonium than previously thought.
But Samore said he thought it was implausible that North Korea would show its weapons to an outsider, let alone keep them all in one place. He added that it was in Khan's interest to assert that North Korea already had nuclear weapons when he began supplying materials for the uranium-enrichment program.

? 2004 The Washington Post Company

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General Says Missile Defense Could Be Ready Soon

By Bradley Graham
Washington Post Staff Writer
Wednesday, April 28, 2004; Page A19
The general in charge of the Pentagon's missile defense programs said yesterday that upcoming flight tests are likely to have little bearing on plans to field a national antimissile system later this year.
Air Force Lt. Gen. Ronald T. Kadish, director of the Pentagon's Missile Defense Agency, said top administration and military officials have yet to decide when to declare the system on alert -- that is, ready to engage ballistic missiles fired at the United States. But he said such a move could come as early as this summer, when the first missile interceptors are installed in newly built silos in Alaska.
By September, five interceptors are to be in place at Fort Greely near Fairbanks, Kadish said. By the end of 2005, 16 interceptors are slated for Fort Greely and four are planned for Vandenberg Air Force Base in California.
The interceptors, along with several ground- and ship-based tracking radars and an extensive network of electronic links, are intended to give the United States the ability to destroy enemy warheads in space by ramming into them. But the system has come under fire from some lawmakers, scientists, military specialists and others for being largely unproven.
Although eight intercept tests have occurred since 1999, all have involved surrogates for the interceptor. The first flight test of the actual interceptor -- which consists of a small "kill vehicle" attached to a large booster rocket -- is due this summer. Then comes the first intercept attempt using the system's actual components. Both tests have been delayed several months this year as a result of problems with a redesign of the kill vehicle.
"If they both fail, we've got big problems," Kadish told a breakfast meeting of journalists. He went on to express confidence that both tests would succeed but made it clear that successful outcomes are not necessary for proceeding with deployment. "They're parallel paths," he said of the testing and fielding efforts.
Voicing frustration with the charges of insufficient testing, Kadish said the main reason for building the Alaskan site was to allow for flight trials under more realistic conditions. President Bush later decided to turn the site into an operational one, while keeping its initial purpose as a "test bed."
"The criticism we get is that we're not operationally testing the system before we put it in place," the general said. "My response to that -- which people don't seem to want to accept -- is, you can't operationally test the system until you put it in place."
Kadish, who is due to retire this summer, said a large amount of information has been gathered through ground tests and flight trials of individual components. This has led to extensive computer modeling and simulations of likely system performance.
Although the Pentagon's chief weapons evaluator has questioned the validity of these models in the absence of more real data, Kadish said they have proven very accurate in predicting test results.
The Bush administration has attached considerable urgency to erecting the antimissile system, citing a growing threat from hostile states trying to acquire long-range missiles. Although two states -- Iraq and Libya -- are no longer the concern that they were, Kadish said the two most worrisome threats remain -- North Korea and Iran. He declined to discuss recent information about missile developments in either country.
Initially, the limited availability of tracking radars will restrict the interceptors in Alaska and California to countering only North Korean missiles.
The planned addition to the system next year of a radar in Britain will enable interceptors to go after missiles launched from the Middle East as well, Kadish said.

? 2004 The Washington Post Company
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G.O.P. Protesters Plan to Infiltrate Convention as Volunteers
By MICHAEL SLACKMAN
It is accepted as an article of faith among protesters planning to demonstrate against the Republican National Convention this summer that agents seeking to undermine their efforts have infiltrated their ranks. But now the protesters are talking about infiltrating the convention to undermine the event itself.
"Really?" said Kevin Sheekey, president of the New York City Host Committee, when told that protesters were talking about flooding the ranks of volunteers to disrupt convention operations.
The city is obligated to find a total of 8,000 New Yorkers to volunteer to help things run smoothly, and would-be protesters are hoping that by signing up, they can work from the inside during the convention, scheduled Aug. 30 through Sept. 2.
"A lot of people are talking about it in general," said William Etundi Jr., a founder of counterconvention.org, a Web site that serves as a bulletin board for anti-convention activities. "The Republicans are coming to New York City, so maybe the real New York should come to them."
Until now, the host and the guest have been treating each other with kid gloves, each insisting that it is a relationship of choice that benefits everyone. As the convention preparations quicken and the organizers reach out beyond the city leadership with the volunteer drive, that sense of mutual advantage may be revealed as more wishful than actual.
It is hard to know exactly how much traction the idea of protesters posing as volunteers will have.
Still, there is evidence that the idea of volunteering, then not showing up, or showing up and using anti-Republican language has interested many people.
The biggest public proponent of the idea is a 37-year-old computer consultant from Philadelphia, David A. Lynn, who has created a Web site called shadowprotest.org. It is calling on protesters to volunteer at both the Republican convention and the Democratic National Convention, which will be held in Boston earlier in the summer. Mr. Lynn has issued press releases, and tried to sell his idea across the Internet, where it has picked up some momentum.
Boston appears largely immune to the tactic since the host committee there had signed up 12,000 volunteers by the end of March, the host committee said.
But New York, which has a long way to go to reach its target, has so far registered only about 1,400 potential volunteers. Marilyn Shaw, director of volunteer services for the host committee, said all volunteers would be vetted by law enforcement before they are signed up. She also said volunteers would be expected to attend many meetings before getting their volunteer shirts.
"I'll be honest with you," she said. "We meet and greet them so many times they become our best friends."
Some people are thinking more Trojan horse than friend.
"I think they don't understand either just how much of New York City is not prepared to welcome them," said Amanda Hickman, who described herself as a community gardener from Brooklyn. "I don't think that has clicked."
Hard feelings or not, the city host committee is going ahead with its recruiting efforts. Mayor Michael R. Bloomberg called last week on a predecessor, Edward I. Koch, to help recruit volunteers. But officials said they never considered the prospect that the effort might be co-opted by protesters.
"Those sort of things would harm the city," Mr. Sheekey said. "Those wouldn't be anti-R.N.C. protests. Those would be people protesting New York City."

Copyright 2004 The New York Times Company
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$1000 HAIRCUT? KERRY FLIES IN HAIRDRESSER FOR TOUCH-UP BEFORE 'MEET THE PRESS'
**Exclusive**
On the Friday before his MEET THE PRESS appearance, Dem presidential hopeful John Kerry flew his Washington, DC hairdresser to Pittsburgh for a touch-up, the DRUDGE REPORT has learned.
Cristophe stylist Isabelle Goetz, who handles Kerry's hair issues, made the trek to Pittsburgh, campaign sources reveal.
"Her entire schedule had to be rearranged," a top source explains.
A Kerry campaign spokesman refuses to clarify if Goetz flew by private jet on April 16 or on the official Kerry For President campaign plane.
The total expense for the hair touch-up is estimated to be more than $1000, insiders tell DRUDGE.
One source suggests the hairdresser was flown to Pittburgh on Teresa Heinz Kerry's 'Flying Squirrel', a Gulfstream V private jet.
[The 'Flying Squirrel' is worth about $35 million. A deluxe model; plasma TV, two bathrooms, fancy mahogany and burlwood paneling, gold-plated fixtures.]
"Senator Kerry thinks Isabelle does a superb job," a campaign source said.
Goetz grew up in a small town in eastern France. She also does Hillary Clinton's hair.
Developing...

-----------------------------------------------------------
Filed By Matt Drudge

The Bush Presidency and Power:
The Guantanamo Cases, the Cheney Case, and the 9/11 Hearings
By MARCI HAMILTON
hamilton02@aol.com
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Thursday, Apr. 22, 2004

There was a time--now ancient history--when the Republican party swept into power on a platform of limited federal government. But that was before they gained control in the White House and the Congress.

Over the past few years, the Bush Administration has aggressively pushed the limits of its executive authority. But that is a statement of fact, not a conclusion about the constitutionality of those actions.

Now, the Administration's forceful tactics are being challenged and reviewed on several fronts -- a sign that the U.S. Constitution is alive and well. In two high-profile Supreme Court cases, the Supreme Court will decide whether or not actions taken have been constitutional, and the Administration will doubtless abide by its decision.

Meanwhile, Administration actions are also being assessed by a different type of review board--the 9/11 Commission. There, the Administration is having to defend its decisions immediately preceding and following 9/11 -- with probing questions raised about its views of Saddam Hussein, and the necessity of going to war with Iraq.

The Guantanamo Bay Cases: How Broad Are Presidential War Powers?

This Tuesday, April 20, in oral argument at the Supreme Court, the Administration argued that it had the power to detain thousands of non-U.S. citizens indefinitely at its Guantanamo Bay facilities -- without recourse to judicial review of their detention. Detainees' family members had brought a lawsuit challenging this power.

The Guantanamo Bay cases--Rasul v. Bush and Al Odah v. U.S. -- implicate constitutional separation of powers issues. The question they raise is this: Just how broad is the President's power to take an emergency action in the context of waging war -- in this case, the war on terror?

The detainees' families seek judicial review of the reasons for their detention. Some detainees claim they are innocent of participating in the war of terror against the United States, and should be able to prove as much in a judicial proceeding through a habeas corpus petition. None has been charged with a crime or designated as a prisoner of war, and therefore all occupy a sort of no-man's land in the war on terror.

The Administration says that is permissible -- for this is war. It urges that the war on terror is a particularly difficult war to wage, and therefore, it argues, it must have the power to hold detainees at Guantanamo, and off American soil, without permitting them recourse to the courts, or the releases that might follow such access. (There is no debate that if the detainees were on U.S. soil, habeas corpus relief would be available.)

A prior Supreme Court case, Johnson v. Eisentrager -- which involved 21 German citizens who were held outside the United States and denied habeas corpus relief -- provides some precedent for the Administration's argument. But the parties to the case dispute whether and how it is applicable.

Oral Argument Revealed the Court Views The Guantanamo Case as Difficult


Which side will prevail?

Generally, war is an arena where the Constitution grants Presidents broad power to conduct operations, and the courts are inclined to defer to those decisions. It is a matter of institutional competence--on these issues, an Administration typically knows considerably more about national security needs than the courts.

Indeed, a number of the Justices expressed concern about what, exactly, the judiciary would, or could, do if it were to hear the detainees' habeas corpus requests. There is no precedent for the courts to do what the detainees' families request -- to review the reasons for which they were detained, to assess whether those reasons are based in fact, and then presumably to free the ones the courts find innocent.

Thus, the courts would have to build from the ground up a habeas corpus doctrine for the detainees in the context of a war on terror. In habeas corpus, federal courts typically review proceedings in a trial in a U.S. federal or state court -- not facts surrounding a detention that occurred abroad in the context of armed conflict.

Yet, the Court's questions showed that it will not reflexively defer to the Administration simply because a war is on. Thus, the oral argument made it clear that the Court believes this is no easy case.

Various members of the Court -- including Justices Ginsburg, Souter, and Breyer -- expressed concern about the extreme nature of the Administration's position -- suggesting that the Court may be uneasy about simply giving its blessing to the Administration's actions. The Administration has drawn a bright line -- broad power; no judicial review -- but Justice Scalia was the only Justice who plainly and wholeheartedly embraced that view

It is impossible to predict the outcome here with any certainty. Each side asks the Justices to make broad precedent in a legal no-man's land. The Court's been offered a rather unappetizing choice between unprecedented executive power, and unprecedented judicial review. Unsurprisingly, the oral argument showed a Court split on the issue. The Court's choice between deference and intervention will not be an easy one.

The Cheney Energy Task Force Case

Second, there is the Cheney case -- more famous now for Justice Scalia's decision not to recuse himself, than for its own facts. There, the Administration asserts that it need not hand over notes of meetings held by Vice President Cheney with energy industry higher-ups.


The Cheney case presents another separation of powers question: Can the courts force the Vice President to reveal with whom he met during meetings of his Energy Task Force?

Unlike in the Guantanamo Bay cases, however, the exercise of executive power is not being justified on national security grounds, but rather executive privilege -- the doctrine that the executive branch may shield at least some of its decisionmaking from prying eyes in order to ensure that the executive has the latitude to get the advice it needs.

Cheney was widely criticized for including only energy industry higher-ups in the meetings and excluding environmentalists. As a result, the Sierra Club and Judicial Watch sued to force Cheney to release the names and positions of those who attended the task force meetings.

In the proceedings below, U.S. District Judge Emmet Sullivan ordered Cheney to produce the notes from the task force. The appeals court affirmed that decision. But Cheney was granted Supreme Court review, and thus has yet to turn over the notes.

Now, the Supreme Court must decide whether the Vice President has an executive privilege covering the papers. The Administration has argued that, if he does not, then in the future, meetings including the Vice President will doubtless occur in a more guarded environment -- with the quality of the advice given watered down substantially due to the knowledge of later disclosure.

That is a potent argument, but not a slam-dunk. In Clinton v. Jones, the Clinton Administration argued that the President should be allowed to assert executive privilege against being hailed into state court on sexual misconduct charges. The argument was that the President should not have to be bothered with such a distraction.

But the Supreme Court, rightly in my view, held that a President is just as subject to the laws of the United States and the states as any other citizen. That is what distinguishes a President from a monarch, after all.

Some have read the opinion to eviscerate executive privileges, some have read it as a disaster for the operation of the Presidency, but it remains an open question whether it will have any affect on this case at all.

The 9/11 Hearings: Systemic Reform Will Not Be Enough

Of course, even as these momentous cases are pending at the Court, the 9/11 hearings have been scrutinizing the decisions of the Bush Administration leading up to that horrific day.

Some have argued that we should not waste our time second-guessing past decisions when so many other pressing issues exist right now. But these critics miss the fundamental need for these hearings: The need to make accountable all those who failed to deter the terrorists.

The Framers were fundamentally convinced that the key to the republican form of government they concocted was a ready supply of "virtuous" men to hold positions of power. We might today call them "heroes." But the hearings are showing that we had a dearth of heroes when it comes to 9/11.

The hearings have demonstrated, sadly, how no one saw beyond his or her bureaucratic or government window to the larger threat before the terrorists could attack. Congress did not perceive the need to fund the CIA and the FBI in ways that would make them battle-ready for the war being launched against us. The agencies did not cooperate with each other because of turf-guarding, and entrenched institutional forms. The Presidents -- both Clinton and Bush -- failed to see through the morass of information with which they are presented, to the terror forming within our own borders.

The only answer for such failures is to assign blame, reform the system, and move on. The problem with the Commission to date, though, is that it appears more focused on reforming the system, surely a good thing to do, than it is on pointing fingers and finding humans responsible for their actions.

For our Executive Branch to be trusted -- and trustworthy -- it must hold individuals personally accountable for the way they handle power. Power without accountability is tyranny. Thus, to the extent that the Commission takes a pass on naming names, it will not only disserve the U.S.'s national interests, it will also disserve our fundamental freedoms.

If this Administration carries on with the same roster after these hearings, it makes the mistake of elevating loyalty above the need for great persons to fill terribly difficult jobs. There is a crying need for this Administration to acknowledge that people run this government, and some of them were inadequate in the face of the growing terrorist threat. If the United States were a corporation, every head would have rolled after 9/11. Would that the market's discipline could be translated into the accountability necessary to make the government better than it already is.

Our Constitution so carefully balances, separates, cabins, and limits government power. In this system, it is an insult to the American People to refuse to hold those in government accountable for the carefully delimited power that it is their duty to exercise.

In the end -- though the Commission's recommendations may disappoint -- the system is working. An aggressive President is exercising what power he has in difficult times, and he is being challenged for the exercise of that power in multiple fora. The Supreme Court will draw limits, and the President will doubtless abide by them -- and those limits will be rooted in our Constitution.

Just after 9/11, in a previous column I wrote an open letter to Osama bin Laden from the United States Constitution, saying that he would have to take it on, to win the war he started. I'm happy to report that he is losing.

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Marci A. Hamilton is the Paul R. Verkuil Chair in Public Law, Benjamin N. Cardozo School of Law, Yeshiva University. Her email address is hamilton02@aol.com.


What the Asterisks Can't Hide:
Problems with the Fourth Circuit's Opinion in the Moussaoui Case
By JOANNE MARINER
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Monday, Apr. 26, 2004

Those who like word-guessing games might enjoy the opinion that the U.S. Court of Appeals for the Fourth Circuit handed down last week in the Moussaoui case. Its text is interrupted in several dozen places with sets of asterisks -- **** -- that substitute for classified information that has been excised.

The deletions add a certain atmospherics to the opinion, reminding the reader that the case is about terrorism and national security. Zacarias Moussaoui, the defendant, is an admitted member of Al Qaeda. He was arrested in August 2001, while enrolled in flight training, having raised his instructors' suspicions by his single-minded interest in training on 747 commercial jet simulators that were ill-suited to his limited flying abilities. He now faces capital charges of conspiring in the September 11 terrorist attacks.

What has slowed down the prosecution considerably is the fact that the U.S. has arrested a number of high-level Al Qaeda operatives who, it seems likely, would offer exculpatory testimony in Moussaoui's defense. Moussaoui argues that these men can attest to the fact that he had no knowledge of the September 11 conspiracy.

The question on appeal to the Fourth Circuit was whether the defendant's Sixth Amendment right to "compulsory process for obtaining witnesses in his favor" requires the government to allow Moussaoui to put these detainees' testimony before the jury that will hear his case.

Unmentioned yet lurking in the background of the Fourth Circuit's newly-issued opinion are a couple of essential considerations. One is that if the federal case against Moussaoui falls apart, there is little doubt but that the defendant will be brought to trial before a military commission. The second is that the detainees to whom Moussaoui seeks access are being held in an extraordinary, extra-legal limbo, and neither the district court nor the Fourth Circuit has any way of monitoring their treatment.

Solomonic Justice

The Fourth Circuit's newly-issued opinion is not a clear win for Moussaoui or for the government. Issued by a divided court, as part of a complex package that includes two partially dissenting and partially concurring opinions, the opinion affirms Moussaoui's right to the detainees' testimony but also defers markedly to the government's stated security concerns.

Rather than allowing Moussaoui's lawyers to depose the detained Al Qaeda operatives via remote video hookup -- or, as would normally be the case, to question them at trial before the jury -- the Fourth Circuit has ordered the crafting of written statements that set out the testimony that the witnesses would likely have given.

In other words, while purporting to uphold the constitutional principle of access to exculpatory witnesses, the court has, in practice, barred the defendant from actually exercising that right. The key pending question now is whether the parties will, under judicial pressure, manage to hammer out a negotiated substitute that protects the core interests behind the right.

In its call for written statements instead of depositions, the Fourth Circuit reiterated an idea that it first proposed a year ago. In an order issued in April 2003, the Fourth Circuit had told the district court, which had been requesting the government to permit a video deposition of the detainees, to give the government the opportunity to propose written substitutions. It had emphasized, in advising this alternative, that the district court should assess whether the substitutions would "provide the defendant with substantially the same ability to make his defense" as would the depositions.

What happened subsequently is that the written substitutions offered by the government did not satisfy this criterion. Indeed, as the district court ruled last year, the substitutions were unreliable, incomplete and inaccurate. They could not, in the court's considered view, serve as reasonable stand-ins for witness testimony.

Essentially, what the Fourth Circuit's opinion does now is tell the district court, the government, and Moussaoui to try harder to reach a compromise. To assist this process, its recent opinion goes a step further than its earlier order in describing how the substitutions should be drafted.

The court explains, specifically, that defense counsel should review classified summaries made from the interrogation of the detained Al Qaeda suspects and select excerpts from those summaries that they want to see admitted at trial. The government should, next, review those excerpts and suggest additional material, and the district court should, based on the parties' submissions, take charge of the production of the final written product.

The Military Option


Two factors, neither of which was mentioned by the Fourth Circuit, will continue to affect the progress of the case. The first is that the alternative to the current federal prosecution is a trial before a military commission. For various overlapping reasons, the possibility now seems less urgent than it once appeared (the planned commissions have yet to start functioning, and they now await the Supreme Court's ruling in the Guantanamo case, not to mention the pending federal suit over their rules).

But it remains clear that the option of Moussaoui's transfer to military custody will continue to affect the behavior of all of the actors in this case, from Moussaoui's legal counsel to the judges in charge of the proceedings. Faced with the possibility of being declared "enemy combatants," defendants in other federal terrorism prosecutions have accepted plea bargains. In the present case, the military alternative will most likely encourage defense counsel to agree to less-than-optimal written substitutes for witness testimony.

It will also encourage the courts, to the extent they believe that terrorism prosecutions belong in the civilian justice system, to continue to bend the rules in the government's favor. (Already, the district court implicitly acknowledged these considerations last year when it exercised its discretion not to dismiss the indictment against Moussaoui when the government flouted its deposition orders. Its call for the case to be resolved in "an open and public forum" made its views fairly clear.)

And, most of all, the military option will encourage the government to be intransigent in its demands in the case. As long as the government has no reason to fear the indictment's dismissal as a sanction -- as long as it believes that trial before a military commission would be an equally viable, or even preferable option -- it has no reason to compromise with defense counsel, or even to comply with the rulings of the district court.

The Hidden Detainees

The second important consideration involves the detainees to whom Moussaoui seeks access. These men, whom the government has deemed enemy combatants, are not detained in military installations on U.S. soil, like Jose Padilla and a couple of others, nor are they held on Guantanamo. Rather, they are held in undisclosed locations abroad -- on aircraft carriers, or perhaps on the British island of Diego Garcia -- outside of the law and beyond judicial scrutiny.

Next to nothing is known about the detainees -- not where they are held, nor how they are treated, nor what, in the long run, will become of them. Indeed, as the district court pointed out in an opinion last year, the government takes the position that "anything" that concerns the detainees is classified information. Even their names have been excised from the courts' opinions, though they are well known to the press: Ramzi bin al-Shibh, Khalid Sheikh Mohammed, and Mustafa Ahmed al-Hawsawi.

Excised, as well, from the Fourth Circuit's opinion is any mention of the word "interrogation" and its variants, although a quick read though the opinion reveals the word's frequent silhouette. The government warns, for example, against disrupting "its detention **** of the enemy combatant witnesses." (Replace the asterisks with "and interrogation ?") It states that any "interruption **** will have devastating effects" on its ability to gather information from them. (Substitute "of their interrogation ?") And so on.

Why is this word so important? Because it reveals a central and worrying problem that clouds the entirety of the Fourth Circuit's proposed approach. In its ruling, the Fourth Circuit ordered the district court to instruct the jury regarding the reliability of the written substitutes that will be provided in lieu of the detainees' testimony. The jury should be informed, the Fourth Circuit has specified, that the substitutes "are derived from statements obtained under conditions that provide circumstantial guarantees of reliability."

But in reality there are no such guarantees, as the district court may have pointed out when it ruled last year that the government's proposed substitutes were unreliable. (Unfortunately most of this portion of the district court's opinion was censored -- again, because it discussed classified information -- so one can only guess at the court's reasoning.)

Indeed, the little information that is known about the treatment of these hidden detainees suggests the Fourth Circuit's assertion is precisely wrong: that rather than guaranteeing the statements' reliability, the conditions of the men's detention render their statements suspect.

Based on interviews with unnamed U.S. officials, several newspapers have published credible descriptions of how the detainees have been abused. The sources detail physical and psychological "stress and duress" techniques to which the detainees have been subject, including being held blindfolded or hooded, bound in awkward painful positions, and deprived of sleep for prolonged periods.

Considering, in addition, that some of the detainees have been held by their interrogators in extra-legal limbo for more than two years, without a moment's access to any neutral arbiter, it is hard to understand how the Fourth Circuit could rule as it did.

A First Encounter with Legality

If Moussaoui's legal counsel was allowed to question the hidden detainees, it would go a long way toward securing the defendant's Sixth Amendment right to the testimony of exculpatory witnesses. Perhaps equally important, it would be the first encounter with lawyers, the law, and legal procedures that the detainees have had since they entered U.S. custody.

Unfortunately, the U.S. government will accept neither of these options. The only alternatives it seems willing to consider range from secrecy to more secrecy, and restricted rights to more restricted rights.

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Joanne Mariner is a FindLaw columnist and human rights attorney.

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THE TRILLION-DOLLAR BREACH OF CONTRACT: Social Security And The American Worker
By NEIL H. BUCHANAN
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Thursday, Aug. 30, 2001

George W. Bush managed to find seven Democrats who would support the partial privatization of Social Security. He placed them, along with seven Republicans, on a commission to evaluate the state of the Social Security system. The result? Unsurprisingly, the commission slanted its findings in favor of privatization.

What surprised virtually everyone, however, was the commission's frantic claim that the system would be in crisis not in the late 2030's, but two decades earlier, in 2016. Commentators across the board have been discussing whether the commission's new deadline for reform, and the criterion its members used to arrive at the deadline, make sense or simply serve Bush's political agenda.

The best way to understand what is at issue in the Social Security debate is to view the commission's proposal as an attempt to breach what is, in effect, a contract with the public. That contract was agreed to in the early 1980's and is still being honored today. Bush's commission, however, wants to violate it.

Opportunism and the Social Security Contract

Imagine that you have a wealthy friend, with whom you make a deal to share expenses in a fair manner. You agree to pay more than your share of the expenses for thirty years or so, because while you make a decent living now, you worry that the subsequent decades will be rather lean for you. You'd like to pay more now, and pay less later. For his part, he'll pay less now, but pay more later.

Your friend accepts the deal and, for the next twenty years, gladly accepts your overpayments. But then he tells you he wants to renegotiate. Under the current contract, his payments are about to rise, and he doesn't like that. You are (understandably) very upset. The whole reason you overpaid for so many years was precisely because you expected reciprocal treatment when the time came. "Of course you'll be paying more!" you tell him, "That was the deal!"

This describes the Social Security problem in a nutshell. For a few years in the late 70's, the Social Security system had started to run tiny deficits (less than 0.2% of the Gross Domestic Product). There was a sense that the system needed to be tweaked, so in the early 1980's President Reagan convened a bipartisan Social Security commission.

In the short and medium term, the commission knew there would be no problem at all. The final surge of the Baby Boom was just entering the labor force in the early 1980's, yet most of the boomers' parents were still working. Thus, both boomers and their parents were paying into Social Security, not taking from it.

For several decades, at least, the Social Security system would be in clover. Indeed, had Reagan's commission chosen to do so, it could have both cut payroll taxes and raised benefits, and still not run out of money for Social Security.

Looking ahead, though, the commission saw that the good times would not last. The first boomers would be eligible for full benefits in 2011. Since they had not produced nearly as many offspring per person as their parents had, a relatively small base of working people would be paying into the Social Security system to support them in their retirement years.

To many on the commission, this suggested that the system should run surpluses?a departure from the original design of the system, which was supposed to balance taxes paid in with Social Security payments sent out as closely as possible. Thus, just when the system was least in need of new funds, the payroll tax rates for Social Security were raised.

What should be done with the inevitable surpluses? One might think they should have been invested in the private financial markets. But remember that, in the Reagan years, the rest of the federal government was running deficits. And putting some government money (from Social Security) into the financial markets, yet still running a deficit, would have simply amounted to lending money with one hand, to the corporations in which investments were made, while borrowing it with the other, from the institutions that made loans to the government. In the aggregate, it was a wash.

As a result, rather than recommending that Social Security "invest" its excess funds in private securities, the commission recommended that Social Security turn them over to the Treasury. The long-term plan was this: For thirty or forty years, Social Security would run annual surpluses (which would be turned over to the rest of the federal government). Then, for the next thirty or forty years, Social Security would run deficits (financed by the rest of the federal government). The system would finally return to a rough balance between taxes in and payments out, when the boomers had all died off.

Who Pays the Taxes?

Even though the Social Security system is part of the government, the choice to finance deficits out of Social Security funds, as opposed to other funds, was not merely a technical matter. Instead, it made a real difference whether the deficit was funded out of Social Security or out of other government monies.

That is, in part, because Social Security taxes are among the most regressive taxes in the federal arsenal; they disproportionately affect poor and middle-income taxpayers. Social Security taxes are levied only on labor income (salaries and wages), not on capital income (capital gains, dividends, interest). But the highest income people in the country earn most of their money through investments (even structuring their executive compensation so that they receive stock or options, which result in lightly-taxed capital gains, in lieu of part of their salary). As a result, high-income people largely escape paying Social Security taxes.

Even if high-income people (such as professionals, for example) do pay Social Security taxes, there is a limit to how much they must pay. Currently, wage income above roughly $80,000 is not taxed. Thus, a person who earns $180,000 or $800,000 pays exactly the same number of dollars in social security tax (approximately $5000) as the $80,000 earner. For example, the law firm associate and partner pay only as much into the system as the senior secretary or computer systems person at the law firm.

And below the $80,000 cutoff, each dollar is taxed proportionately. Thus, to continue the example, a messenger or photocopy worker in a law firm, who makes very little, still pays proportionately the same in Social Security as the secretary or computer systems person.


Together, these features of the Social Security tax make it fall proportionately much more heavily on low and middle-income earners than on the rich. Income taxes, on the other hand, are among the most progressive taxes available. All income is potentially subject to tax, not just labor income, and the rates are graduated. (The estate tax, whose future is currently uncertain, is the most progressive tax in the fiscal system.)

For perspective, consider that nearly three-quarters of all Americans pay more in Social Security and federal excise taxes than they do in income taxes. The much-discussed income tax rebates that Democrats in Congress added to the Bush tax cut (for which Bush is now taking credit) were not paid at all to 34 million American adults, while another 17 million received only partial income tax refunds.

Therefore, collecting more money than necessary for Social Security in the 80's, in order to help finance the general budget, deliberately replaced a tax that falls mostly on the wealthy with a tax that falls mostly on middle-income and poor people.

The Contract between the Non-Rich and the Rich

In essence, therefore, the following deal was made in the early 1980's: the non-rich would pay too much in taxes for three or four decades. Then the rich would reciprocate by financing the inevitable shortfalls in the Social Security system by paying higher income taxes.

The famous Social Security Trust Funds are nothing more than an accounting of the terms of that contract. That is, when the trust funds go to zero, both sides to the deal will have paid and received equal amounts of money (after accounting for interest).

The argument that Social Security is going to go bankrupt typically relies on the idea that the trust funds will be depleted. The current best wild guesstimate is that that might happen in 2038. That calculation, however, depends entirely on low-ball estimates of economic growth over the next thirty-seven years. Less pessimistic (but still historically low) rates of economic growth would allow the system to remain solvent forever?meaning that working people (and their working children) who paid high amounts into Social Security in the 80's, 90's, 00's, and 10's will never quite be paid back for their sacrifices.

The current Bush Administration Social Security commission, though, wants to change the focus. They are saying that the system will be in crisis in 2016, which is the first year that the rich will need to start paying in. Rather than raising taxes on the rich ? which would solve the "crisis" and fulfill the Reagan Era agreement ? the commission is suggesting that the government should renege on the promise to working people that was made almost twenty years ago.

If the Agreement Is Breached, Does the Government Have A Defense?

Of course, even formal contracts among private parties are broken and renegotiated all the time. And sometimes breaches of contract are excused ? for reasons including a unilateral, or sometimes a mutual, mistake about the facts. If the commission's recommendation is taken, and the Social Security agreement broken, is there an excuse?

The answer is no. There was no mistake when the initial agreement was made, unilateral or otherwise. Nor has there been any unforeseeable change in circumstances. The only circumstance that has changed appreciably is the political power of those who have always wanted to kill Social Security. Now in power, they will gladly manufacture any excuse to have their way, including the false notion that the system is in crisis.

On the contrary, the agreement is working almost exactly the way it was supposed to. None of the facts noted above are news to anyone who was paying attention. And the rich are fully capable of making good on their part of the agreement.

From a fairness perspective, too, the rich owe the non-rich big time, since low and middle-income taxpayers suffered to fulfill their part of the agreement. Their wages and salaries fell (in real, cost-of-living adjusted terms) until 1998. During the same time period, they also lost the benefit of important budget items. Most of the changes in spending that moved the rest of the federal budget into surplus by the late 1990's were taken directly out of the hides of poor and middle-class people. Yet they were still forced to over fund the Social Security System.

Meanwhile, the incomes of the wealthy went through the roof over the last twenty years, while their taxes, over the same period, went down. Compared to the early 1980's, the wealthy pay lower income tax rates today. The maximum marginal income tax rate has moved around some, but it is now lower than when the Social Security agreement was forget. It has dropped from 50% to 39.6%, and thanks to Bush's tax cut, it is slated to fall further over the next few years.

Capital gains tax rates are lower still. And it is also worth bearing in mind that the direct beneficiaries of a Social Security privatization plan would be Wall Street investment banks, whose high-income owners would be able to charge billions of dollars in fees to manage the new accounts.

If short, the rich have only gotten richer in the period since the agreement on Social Security was made. After making the non-rich pay to create a surplus for years, the rich should now fulfill their part of the agreement by paying into Social Security at a higher rate. If they breach, at the behest of the Bush commission, there will be no excuse.

One still might worry that taxing the rich will shrink the economy. But even if that were so?as the proponents of trickle-down economics want us to believe?we have already given the rich a break. Supposedly, this is what has allowed us to build up the economy before the boomers start to retire.

Because of this buildup, we will be passing a large, productive capital stock on to the next generation, making it easier for the economy to produce the goods and services that we will need. A relatively smaller work force will be able to produce more than enough for everyone, because of the large capital stock that they will inherit. The boomers and their parents are paying for that now. They should receive the benefit of it when they retire.

Forcing Moynihan to Stay Consistent

One interesting sidelight to the Social Security debate is that one of Bush's favored Democrats, former Senator Daniel Patrick Moynihan (who is co-chair of the current commission), was involved in brokering this agreement in the early 1980's. He, of all people, should know how important it is to honor an agreement he had a part in crafting.

The legal maxim known as contra proferentem states that, when interpretation of a contract is at issue, the contract should be construed in the manner least favorable to the party that drafted the contract. Moynihan joined with others to draft the Social Security contract in the early eighties. Now he is trying to re-write that deal now. But he knew full well what he was doing twenty years ago. As a drafter of the agreement, he cannot be heard to claim its plain meaning does not control.

Social Security is the most successful ongoing social program in history. It can and should be financed in part out of general revenues until the boomers pass on. Having the rich finance Social Security's deficits is only asking that they fulfill their part of an agreement from which they have dramatically benefited for decades.


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Neil H. Buchanan, Ph. D., teaches economics at the University of Michigan, where he is also a J.D. candidate.



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IS YOUR VOTE A CONTRACT WITH THE GOVERNMENT?: Form Over Substance in the Supreme Court's Election Decision
By NEIL H. BUCHANAN
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Tuesday, Dec. 19, 2000

Critics of the decision in Bush v. Gore have faulted the five-justice majority for hypocrisy. Many have asked how these Justices' prior claims of allegiance to the principles of "judicial restraint" and "states' rights" can possibly be squared with the aggressive federal intervention that they used to determine the outcome of the 2000 presidential election.

These attacks are clearly warranted. However, there actually is a consistent (though misguided) legal principle behind the Justices' decision?or, at least, behind the concurring opinion by Chief Justice Rehnquist that was joined by the court's other two reactionaries, Justices Scalia and Thomas. That legal principle comes, surprisingly, not from the high-flown world of constitutional legal theory, but rather, from contract law, one of the most pedestrian of legal disciplines.

Are Voting Instructions A Contract?

Chief Justice Rehnquist's concurring opinion, having explained why this is the one and only case where deference to a state's highest court is inappropriate, turns to the question of the uncounted votes. The Chief Justice points out that there are explicit instructions in all voting booths that use punch card ballots, which read as follows: "After voting, check your ballot card to be sure your voting selections are clearly and evenly punched and there are no chips left hanging on the back of the card." He goes on to claim that "no reasonable person" could say that it is inappropriate to ignore ballots that are "not marked in the manner that these voting instructions explicitly and prominently specify."

For those of us who loved our first-year course in Contract Law, and who have therefore been quietly amused at the difficulty people have had with the seemingly nebulous concept of "intent," this was a delicious moment. The reactionary justices had finally revealed the consistent legal principle that guided them: Classical contract formalism.

Williston and Langdell ? the high priests of classical contract doctrine? couldn't have said it better! If the contract (here, the set of voting instructions) says that your vote will be counted only if you meet certain criteria, and you do not meet those criteria, then your vote will not be counted. Q.E.D. A deal is a deal.

Put another way, the contract said you were supposed to flick off the hanging chads and make sure you had not left any mere dimples; but you, careless voter, never bothered to do so. So too bad for you ? and for your candidate.

The Evolution of Law Away From Contract Formalism

Of course, it's not that simple. Indeed, the path of contract law over the past century has been largely a move away from such formalism.

This has resulted in a somewhat grudging (at least in some quarters) recognition that, in some circumstances, it is reasonable to enforce contracts that do not meet formal requirements. Why? Because, for example, it is often possible to determine the "intent of the parties" indirectly, rather than just from the formal language they used to describe their intent.

Another result has been a parallel recognition that, in other circumstances, it is unreasonable to enforce contracts that do meet formal requirements. Why? Because, for example, the court may have concerns about whether the terms were sufficiently clear to the party who did not draft the contract, or may feel that the exigencies of the situation required a party to act in understandable haste and sign a contract she should not later be held to, and so on, and so on.

Obviously, this path away from formal contract requirements, and towards more situation-specific analyses, has not been a smooth one. And people like Chief Justice Rehnquist and Justices Scalia and Thomas have always regretted the movement of modern contract doctrine away from simplistic formalisms (You signed the contract!) toward a recognition of situational ambiguities (I was not fully informed! I was compelled! I was confused! It was hidden in small print!). As Justice Scalia once put it in a related context, with typical bluntness: "Long live formalism!"

Treating the Voting Instructions as a Contract with the Voter

The evolution of the law away from the type of formalism that provides the backdrop to the three-Justice concurrence was driven by a simple fact: No contract can be as simple, clear, and unambiguous as the formalists claim. Interpretation and clarification are almost always necessary, simply because no written contract can account for all potential sources of disagreement and misunderstanding. Looking more carefully at the voting instructions cited by Chief Justice Rehnquist, it is therefore not at all surprising that these instructions are much more ambiguous than he believes.

What, after all, does "clearly and evenly punched" mean? Must there be not even a shred of paper hanging from the corners where the paper was torn? Will the machine count ballots that have slight irregularities in the shapes of their punched holes? Can a hole be too big, as well as too small, or should a risk-averse voter enlarge the holes to be absolutely sure that the holes are punched in a way that the machine cannot miss? Or will doing so automatically invalidate the vote?

What if a voter does not know what a "chip" is? And, after the card is pulled out of the holder, how is the voter even to tell whether there are holes punched in the right places on a card with no writing on it? Were the instructions really placed "explicitly and prominently," in a visible place in a typeface that could be read by all voters (even those with poor eyesight, who at last check were still eligible to vote)?

To all of these questions, classical contract doctrine had a simple answer: If you do not find out the answers on your own, it is your own fault that your vote was not counted. In other words, protect your own interests! And if you don't, beware.

Why Classical Contract Formalism Doesn't Work For Voting

According to this view, every voter must now become an expert on ballot procedures. But if enough people actually took the time and care necessary to effectuate the Rehnquist vision of responsible voting, the process would surely slow to a crawl. This would likely cause more people to "choose" not to vote (a choice that formalists, ironically, would view as dispositive evidence that the would-be voter's intent was never to vote in the first place ? rather than, say, evidence that many people fear being fired if they take too much time away from work to vote).

What if you ask the precinct worker whether your ballot meets the standards, but the precinct worker gives you incorrect information ? or simply refuses, or is too busy, to clarify? And how can you even ensure that the "contract" is enforced ? that is, that your vote is counted once you have met all the requirements? Surely after all the work Rehnquist would require, the voter ought to have some assurance that the government will uphold its side of the contract.

These are exactly the types of questions that led to the emergence of modern contract doctrine, which substantially modified (if not eviscerated) classical contract formalism. Recognition that rigid rules can easily be used to hurt the powerless motivated much of the movement away from formalism and towards more flexible rules. (The very same recognition, one might suggest, may motivate Rehnquist, Scalia, and Thomas to suggest a return to it).

Rigid rules are not likely to hurt the wealthy, well-educated, time-rich voter (or contract-signer). They are going to hurt the less-educated, hard-working voter who cares enough to vote, but cannot risk dallying forever at the polls or has trouble with instructions that require mastery of the previously obscure distinction between a chip and a chad (if, indeed, such a distinction exists). And when formal rules do hurt the powerful, they make up new rules?or install better voting technology in their own precincts.

Parallels Between Flexible, Modern Contract Doctrine and Florida's Election Code

Modern contract doctrine is admittedly fraught with ambiguities (indeed, some would say that it revels in those ambiguities). It requires "reasonable" actions in particular circumstances, thus applying an inherently variable, fact-specific standard. Moreover, it is tailored to the differing sophistication of the parties and the differing stakes involved: Contracts for commercial real estate rentals, for example, are subject to very different rules than, say, contracts for surrogate motherhood.

In our system of universal suffrage (or, at least, our aspiration toward such a system), voting rules, as well, must certainly take into account differing levels of sophistication of voters ? as well as other situation-specific features of voting such as time constraints, poorly trained precinct workers, etc.


Fortunately, the Florida election code already acknowledges the inherent impossibility of totally objective ballot counting. Therefore, it explicitly provides that votes cannot be thrown out (even if they were not readable by machines) if the intent of the voter can reasonably be determined. In other words, the Florida election laws parallel modern contract doctrine ? providing a variable, fact-specific "reasonableness" standard to encompass a wide variety of possible situations, from chad to chip, with every variety of shred of punch card and voter marking in between.

Now, if the three reactionary Justices who joined the Rehnquist concurrence were truly believers in judicial restraint, they would have admitted that they do not like modernism (in any of its forms, apparently), but they nonetheless would have affirmed that Florida's election code as written does not begin and end with the classical "caveat emptor" requirement that the voter protect herself. Restraint, in this situation, would have meant admitting that Florida's election law standard is a modern, flexible one ? not a rigid, classical one.

Notably, the situation is not symmetric. In other words, even a restrained judiciary might still feel compelled to relax the boundaries of a formal election law, in order to protect the fundamental right to vote that arises once a state has decided to hold an election. Thus, if the Florida election laws had been written as rigidly as Rehnquist, et al. would have liked them to be, and had essentially codified the voter instructions, then large groups of people would have been disenfranchised ? and the U.S. Supreme Court would have been justified in stepping in to correct the resulting inequality.

If the rigid standards of the Florida instructions really were the law, then the voting process would include an implicit literacy test ? and such tests have been illegal for a long time now. Indeed, on some ballots, basic literacy will not even suffice. Figuring out the spatial and diagrammatic arrangement of names (on butterfly ballots, most famously), and deciphering less-than-obvious placement of referenda questions on ballots (as had recently happened in New York State), require more than the minimal skills a literate person has. And we should not forget that illiterate citizens do have the very same right to vote as those more fortunate others who received a better education.

In some cases, therefore, applying classical formalism ? in the form of rigid voting instructions that discard votes as to which the intended candidate choice is clear ? actually would present an equal protection problem. The more voting resembles taking the LSAT (an experience even law students, who've chosen the profession, would hate to repeat), the more people will be disenfranchised.

Formalists can always fall back on the retort "What, they can't follow simple directions?" But the rest of us know that it is never that simple. If we really want "the people" to vote, we must take the people as we find them.

In some cases, we will never know what the voter meant to say; but when we can figure it out, Florida's election law tells us that we must count the vote. That is the real contract between the people and their would-be leaders.


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Neil H. Buchanan, Ph. D., is an economist at the University of Michigan. He is also a second year student at Michigan's law school.


GUANTANAMO AND THE RULE OF LAW:
Why We Should Not Use Guantanamo Bay To Avoid The Constitution
By ANUPAM CHANDER
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Thursday, Mar. 07, 2002

What are we fighting for? In the process of liberating Afghanistan from its lawless oppressors, we may be undermining our own position as the champions of the rule of law.

In a case last month here in California - Coalition of Clergy v. Bush - the Administration argued that the Constitution does not bind the United States in our actions against the Guantanamo detainees. The issue is also raised by another case--Rasul v. Bush--pending in federal court in the District of Columbia. The Administration's argument is a mistake, for both principled and practical reasons.

It is wrong for us to deny basic constitutional protections to those who are in our custody. Moreover, doing so will ensure that someday our citizens, when imprisoned abroad, will be denied similar protections by a foreign government, as well. The treatment of the Guantanamo prisoners could also provide a wedge for our own government to erode the civil liberties of citizens, permanent resident aliens, or visaholders - claiming that the Constitution applies in fewer and fewer circumstances, and to fewer and fewer persons.

If we are silent about our own treatment of the Guantanamo prisoners now, we will have little to say about these future abuses when they inevitably occur. As Thomas Paine wrote, "He that would make his own liberty secure must guard even his enemy from oppression; for if he violates this duty he establishes a precedent that will reach to himself."

The Administration's Claim: The Constitution Does Not Apply in Guantanamo

The plaintiffs in the California case are a group of clergypersons and lawyers - including a former Attorney General of the United States, Ramsey Clark. They challenge the constitutionality of the confinement of the Guantanamo detainees. Specifically, they claim that the detainees have been denied due process, the right to be informed of the charges against them, and the right to legal counsel.

The Bush Administration could have chosen to defend the case by arguing that the confinement is constitutional. The Constitution requires different amounts of process depending upon the circumstances, and various cases have held that a system of military justice can be appropriate under the laws of war. Here, the Administration could have argued that the detainees are being processed in accordance with the law applicable to enemy combatants; that the right to counsel was inapplicable at this time given the circumstances of the war against terrorism; and that a general regard for the Geneva Conventions on the treatment of captives in war satisfies American constitutional standards.

But the Bush Administration chose to make none of these arguments. Rather than arguing the merits of the claims, the Administration simply denied the right of the detainees to any constitutional protection whatsoever. It argued that the Constitution provides no protections at all to aliens in Guantanamo Bay, since, according to the Administration, they are not in the United States, but rather in Cuba.

The District Court's Decision: The Administration Is Right

The federal district court in Los Angeles agreed with the Government. In a decision last month, the court held that the detainees have never been within territory over which the United States is "sovereign," and that they therefore fall outside the protection of our Constitution.

In a 1950 decision, Johnson v. Eisentrager, the Supreme Court had declared that enemy aliens captured and imprisoned abroad could claim no rights under the Constitution. Relying on that decision, the district court dismissed the case.

Guantanamo as Law-Free Zone? U.S. Power Without "Sovereignty"

The Administration's argument, and the court's decision, might be reasonable if the detainees were held in a place other than Guantanamo. There is a strong argument to be made that, in general, the Constitution does not protect enemy aliens who are located in a foreign country. (There is also a strong, contrary argument, however, that the U.S. should always be obliged to follow the Constitution, wherever it acts around the world. Or, put another way, the Constitution should follow the flag.)

But Guantanamo is not the typical foreign land. It is more akin to a territory controlled by the United States.

The history of our control over this tip of the island dates back to the Spanish-American War of 1898, which sought to liberate Cuba from Spanish oppression. The war concluded with America acquiring significant parts of the Spanish colonial empire for itself - including Guam, the Philippines, and Guantanamo Bay.

Under the terms of a 1903 lease and a 1934 treaty, the United States was granted the power to "exercise complete jurisdiction and control" over Guantanamo Bay, while Cuba would retain "ultimate sovereignty." For the last century, the United States has exercised such control, despite the protestations of the Cuban government for the past few decades that the U.S. presence is illegitimate.

In Coalition of Clergy v. Bush, the court relied on the fact that the lease declared that "sovereignty" over Guantanamo remained with Cuba. With Cuba "sovereign" over Guantanamo, it made little sense, the court believed, to apply the U.S. Constitution to this land.

But this is a very superficial argument. The international order relies upon states exercising their powers to maintain order and certain minimal legal rights within their sovereign territories. Sovereignty without power is an empty concept.

Cuba has no method by which it might maintain order within Guantanamo, even were it inclined to do so. Guantanamo Bay is defended by the American Navy; no Cuban policeman would dare venture into this territory. While formal sovereignty may remain with Cuba, it is in name only. The practical aspects of sovereignty clearly reside with the U.S.

To excuse ourselves from the application of the U.S. Constitution on the basis of Cuba's empty, technical reservation of "sovereignty" is to undermine the international order. This position effectively renders Guantanamo a law-free zone - a place where there is no law, but only power.

The U.S. government argues that American law, and even the Constitution, does not bind it on Guantanamo, at least with respect to how we treat aliens. Yet it would never respect Cuban law either - consider how likely the U.S. government would be to follow a decision by Castro that the prisoners should be treated differently henceforth.

Finding the Right World War II Precedent: Not Eisentrager, But Yamashita

This analysis shows why the Supreme Court's holding in Johnson v. Eisentrager does not even remotely apply to Guantanamo. There, the Germans who challenged their confinement had been tried before a U.S. military tribunal in China with the explicit consent of the Chinese Government, which exercised genuine power over the land at issue.

In contrast, the Guantanamo detainees are being held without any regard for the wishes of the country that the U.S. says is "sovereign." Our lack of relations with Cuba serves our purposes well--we have ignored their objections regarding our actions in Guantanamo for many decades now.

The relevant precedent is not Eisentrager, but another World War II decision - the 1946 case of Application of Yamashita. There, the Supreme Court considered the petition of a Japanese general who had been tried by a U.S. military tribunal in the Philippines--like Guantanamo, a territory we gained as a result of the Spanish-American War.

The Court did not deny that the general had any rights under the U.S. Constitution. Instead, it considered his claim on the merits. By doing so, it implicitly established what the Government today is unwilling to concede--that an enemy alien in a foreign territory under the control of the United States is still within the bounds of the U.S. Constitution.

The general lost on the merits, and so might the Guantanamo detainees. But my point is not that the detainees should win their constitutional case. It is that they should have a right to make it. Instead, the Bush Administration has tried to avoid the constitution by claiming that Guantanamo is, in effect, a foreign country, even though it is entirely within our power.

U.S.-controlled Guantanamo is closer to the U.S.-controlled Philippines than it is to China. We should be disappointed that the Administration argued, and the court held, to the contrary, applying Eisentrager and not Yamashita.

Believing in the Rule of Law As A Requirement, Not A Matter of Grace

The Bush Administration has said recently that it will apply the rules of the Geneva Conventions to at least some of the detainees at Guantanamo, and that it will comply generally with humanitarian law in its treatment of all detainees. The result may be that at least some of the detainees benefit from the same rights that the U.S. Constitution would have afforded them. But this is cold comfort for the other detainees - and cold comfort as a precedent for the future.

As first year law students learn in the famous case of Marbury v. Madison, if there is no way to challenge an executive or legislative action in court, the executive and legislative branch is not truly bound by the rule of law. The Administration has made the decision to provide some of the detainees with some process - as a matter of grace, at its own whim, and without guarantees of fairness or equality. But that is no substitute for the detainees' ability to argue - successfully or not - that all of them deserve whatever process the Constitution says is due.

A Bad Precedent for Our Citizens Abroad

For over a century, we have had complete control over Guantanamo Bay. We should not now argue that - despite this longstanding and thoroughgoing control - we still do not have sovereignty, because Guantanamo is technically Cuban soil. The argument makes a mockery of our legal system and invites other countries to treat our own citizens unfairly in the future by employing similar means.

We should not forget that it was the Bush Administration who chose to bring the detainees to Guantanamo in the first place - perhaps because it could make this very argument. Indeed, one "advantage" of our maintaining a base in Guantanamo is to avoid being required to respect the Constitution there.

What if another country were to arrest U.S. citizens, take them to a location over which that country had control, but no technical sovereignty, and then argue that the country's own law did not apply in that territory - so that our citizens would not have a right to counsel, or even to know what the charges against them might be?

We would be distressed. We should be distressed, too, about our own country's similarly taking the position that Guantanamo detainees do not even have the most basic rights under our Constitution.

To be sure, if the Constitution were held to apply in Guantanamo - as it should be - a federal court might well conclude that the government's treatment of the detainees accords with the Constitution. But we should not seek to do an end run around the Constitution by claiming that it does not even apply.

We should show greater faith in the Constitution's wisdom than that. Let us hope that the federal courts considering this issue, on appeal or in the first instance, hold that the U.S. Constitution follows U.S. power to Guantanamo Bay.

What Do You Think? Message Boards


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Anupam Chander is an Acting Professor of Law at the University of California, Davis, School of Law. A graduate of Yale Law School, he specializes in cyberlaw and international law.

Revising the Laws of War to Account for Terrorism:
The Case Against Updating the Geneva Conventions, On the Ground That Changes Are Likely Only to Damage Human Rights
By ANTHONY DWORKIN
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Tuesday, Feb. 04, 2003

With respect to both al Qaeda and Iraq, the Bush Administration claims that U.S. forces have scrupulously observed the laws of war and will continue to do so. Indeed, according to Charles Allen, a senior Department of Defense lawyer I recently interviewed, "The United States has probably the strongest law-of-war program in the world." But assurances like this gloss over the fact that there is, to say the least, a good deal of controversy about how the laws of war (also called "international humanitarian law") apply to armed conflict in today's world.

Many have charged that in its campaign against terrorism, the Administration has not observed, but flouted, the laws of war. And even in more conventional wars, the U.S. military interprets the rules in a way that allows it to take actions - for example, in the kind of targets it chooses to attack - that others consider prohibited by the laws of war.

Whatever your views on the merits of U.S. military policy, there is no doubt that the existing body of international law has gaps and ambiguities that have been exposed - or highlighted - by changes in the nature of war. In turn, those ambiguities have allowed the Bush Administration to define legal terms in any way it sees fit, to its own maximum advantage - treating terrorists as warriors, while denying them the legal rights that enemy soldiers are supposed to enjoy.

The laws of war were codified in the Geneva Conventions of 1949, and the Additional Protocols of 1977. But of course, the world has changed dramatically since then. That leads to a crucial question: Should international humanitarian law be updated to take account of these developments and if so, how?

An Initiative to Re-Evaluate the Geneva Conventions

The question has been much discussed since September 11, and the government of Switzerland - which acts as custodian of the Geneva Conventions - recently launched a public initiative to look into the subject. Last week, this process got underway with an "informal high-level expert meeting" at Harvard University.

The meeting brought together representatives of several countries, the European Union, the International Committee of the Red Cross, and various prominent scholars. Its objective was to set an agenda for further research about the "reaffirmation and development of international humanitarian law."

It is appealing to think that the laws of war could be revised to give them greater precision in relation to contemporary armed conflict. However, there are good reasons for thinking that it will not be easy to frame new rules that can both address the most controversial aspects of modern warfare, and that will be able to gain broad international support. By their nature, the kinds of questions that will come up in any attempt to revise the Geneva Conventions will deeply divide the nations that will weigh in on them.

Moreover, there is a danger that reopening the debate will allow groups to push for other changes in the law, such as allowing the military to attack some civilian targets, that could set back humanitarian values. The question of when, if ever, civilians can legitimately be attacked, and the related question of how much care must be taken to avoid civilian casualties, are likely to be intensely controversial.

International Law Does Not Recognize "War" With an Entity Like Al Qaeda

Broadly speaking, the framework of existing international law envisages two kinds of war: international armed conflicts, between two or more countries, and civil wars, occurring within the territory of a single state.

Thus, the possibility of armed conflict between a state and a transnational organization without a recognized geographical base is never acknowledged - either in the Geneva Conventions, or in the Additional Protocols. (The Conventions do create the category of "unlawful combatants," but do not address the character of a conflict between a force composed entirely of such combatants, and a country or alliance of countries.)

Nevertheless the Bush Administration has unhesitatingly described its campaign against al-Qaeda as a "war." Thus, it claims the laws of war apply: not the provisions of the Geneva Conventions themselves (since they don't cover this kind of conflict) but the underlying principles that inform the Conventions, and are seen as customary law.

Claiming the Laws of War Apply to Al Qaeda Had Led To Bad Consequences

What does that mean, specifically? For one thing, the U.S. claims the right to shoot enemy combatants engaged in active hostilities. That right has in turn, be interpreted by the U.S. to amount to a license for U.S. forces to shoot anyone alleged to be a terrorist, anywhere in the world.

That's a particular problem because terrorists are far less easy to pick out than soldiers, who must (to qualify as such under the Geneva conventions) be recognizable as soldiers by their uniform, flag and so on.

Meanwhile, the U.S. also claims the right to detain enemy captives until the end of hostilities. The problem with this, of course, is that where the "war on terrorism" is concerned, there seems to be no end in sight. Moreover, the Administration has arrogated the definition of who counts as an enemy solely to itself - including many people picked up far from any battlefield, who are being held incommunicado with no chance to assert their innocence before an independent judge.

The U.S. also claims to have shouldered the obligation not to harm enemy fighters once they have been detained, or to punish them without due process. But it resists the argument that either Taliban or al Qaeda detainees qualify for the status of prisoners of war.

The strangeness of the U.S. position, under current international law, thus is plain. It claims that the United States is at war with al Qaeda, giving U.S. soldiers the freedom to attack al Qaeda fighters anywhere it finds them. Yet it claims that al Qaeda members are as a collective group and by definition "unlawful combatants," with no right to use force against members of the U.S. military.

Granted, al Qaeda is a horrific organization. But these legal positions still seem extreme and unconvincing.

Can These Problems With the Law of War Be Solved? Not Easily.

That leads to the key question: What, then, should be done?

One solution would be to reaffirm the traditional legal framework, restricting the notion of "armed conflict" to cases clearly acknowledged in the written law. That would mean that the U.S.'s campaign against al Qaeda is not a war, but the pursuit of a group of international criminals. Accordingly, the U.S. would be limited, in fighting al Qaeda, to the tools of its (and its allies') law-enforcement structure.

War could occur, and the laws of war would only be triggered, when the U.S. took military action against a state, such as Afghanistan under the Taliban, that was harbouring terrorists. This type of country-versus-country conflict would count as an international war, and the laws of war would thus apply.

Of course, the U.S. would never subscribe to these positions, believing that al-Qaeda presents too serious a threat to the United States to be treated this way. And this argument cannot be completely dismissed.

The scale and scope of the September 11 attacks, and the international nature of its organization, put al Qaeda on a different level from terrorist groups of the past. It is reasonable to think that if al Qaeda managed to obtain a biological or chemical weapon, or a radioactive "dirty bomb" it could launch an attack that would dwarf September 11 in the havoc and destruction it caused.

A Possible Revision of the Geneva Conventions

That may lead one to think that the law should be revised precisely to take account of organizations that, like al Qaeda, operate in a netherworld between crime and war. One option would be to go the whole hog, and categorize the campaign against al Qaeda as a new kind of armed conflict. That would have the advantage of setting clear standards that are now absent: rules governing when terrorists can be targeted, what counts as a battlefield in a war against terrorists, or when such a conflict should be said to end.

However, any new treaty to cover transnational wars against non-state organizations like al Qaeda would run up against a very tricky problem: whether terrorist fighters should be given the status of legitimate soldiers.

The U.S., and many other countries would certainly balk at the idea. Treating al Qaeda members as soldiers would give them soldiers' rights, and make their operation seem more legitimate. They could no longer be prosecuted for attacks directed at U.S. military targets, such as the Pentagon, though attacks on non-military targets would still count as war crimes. Al Qaeda fighters detained during the course of the war would be entitled to the full privileges of prisoner of war status.

That option seems unrealistic and unappealing. The alternative would be to formulate new rules for wars against terrorists that preserved the idea - now pushed by the United States - that they are "unlawful combatants." This would effectively put into formal law the unbalanced regime that the Bush administration has proclaimed. States would be able to target terrorists as enemy fighters (at least under certain specified circumstances), or detain them without the benefit of prisoner of war status until the end of the conflict. Terrorists would not have the right to use force - even against military targets - and could be prosecuted for shooting opposing soldiers.

As discussed before, such a legal framework seems lop-sided, even in the case of terrorists for whom few would feel sympathy. But a bigger objection to the idea of a new convention along these lines lies in the difficulty of defining the terrorists to whom it would apply.

As Joanne Mariner discussed in an earlier column for this site, the term "terrorist" is extraordinarily hard to define, for the cliche that one man's terrorist is another's freedom fighter has some truth in it. States could use such a convention as a charter for assassinating or detaining members of rebel groups with a genuine political grievance - or even opposition movements.

Why Revisions Could Be Extremely Harmful to Terrorist Suspects

Even if a solution could be found to this problem (for instance, by giving the United Nations Security Council the power to determine when a terrorist threat is genuine and rises to the level of a war) another huge problem remains. By their nature, terrorists are difficult to distinguish from civilians, and the effort to make this distinction would often take place in fraught or warlike circumstances.

Who is a terrorist fighter, and who is an ordinary civilian? This crucial question would often be hard to answer, and would be answered by fiat, or by a bullet. Look, for instances, at the U.S. government's insistence on protecting its ability to decide unilaterally that even U.S. citizens such as Yaser Hamdi and Jose Padilla are not civilians.

The result would be a massive increase in the vulnerability of civilians during fighting. That would cut against the bedrock principles of international humanitarian law, the protection of people who are not involved in hostilities. States have little incentive to defend that principle when the civilians at issue are a small set of individuals suspected of terrorism. Humanitarian law should not make it easier for them to ignore it.

The Case for Not Updating The Geneva Conventions

For all these reasons, it is not clear that there is anything to be gained in the idea of updating the Geneva Conventions for the age of terrorism. Indeed, such an update may actually be harmful.

So what constructive steps are available to remedy current abuses? Here are a few measures the international community should pressure the U.S. to take: It should clarify and limit its rules of engagement against suspected terrorists. It should either release those being detained, or present evidence to a judge to establish that they are active members of al-Qaeda. In addition, it should give a clearer definition of how it will determine that hostilities have ended.

The Question of Which Targets Are Legitimate

Finally, it is worth mentioning another area in which the Geneva Conventions are sometimes said to be ambiguous or outdated: the question of what targets can lawfully be attacked.

Under principles set out in the first Additional Protocol, it is only legitimate to attack targets that "make an effective contribution to military action" and whose destruction or capture "offers a definite military advantage". (The United States has not signed Additional Protocol I, but acknowledges this rule, and much of the rest of the protocol, as binding customary law.)

But what do these criteria mean in practice? It has been the subject of debate.

Consider wars such as NATO's 1999 attack on Serbia, or the prospective war in Iraq, which are directed overwhelmingly against an individual head of state or a particular regime. The aim of these conflicts is to undermine a political leader (as in the case of Saddam Hussein), or force a leader to comply with certain requirements (as with the Serbian President Slobodan Milosevic over Kosovo)? Traditional objectives of war have been very different: They have focused on repelling aggression or recovering land, for instance.

U.S. officials have argued that these new wars of "compellance" or "regime change" call for a more flexible understanding of what constitutes a military target. In the war against Serbia, NATO attacked objects like power grids, government ministries, and a television studio. Such targets might have a peripheral connection to military activity, but are more obviously part of the apparatus of domestic political and social order. Were they, or were they not, legitimate military targets?

Some military planners say they should be deemed just that, for attacking these objects may undermine a regime's hold over its subjects, or the popular support it enjoys. They would like to codify this new interpretation into any revised version of the laws of war. One conservative international lawyer who took this view recently asked me: "Why should we think it is more acceptable to wipe out a company of conscript soldiers than to destroy a monument to Saddam Hussein?"

But there are a couple of powerful objections to this argument. On a practical level, evidence from Serbia, Iraq and elsewhere suggests that attacks designed to demoralise the population most often have the effect of prompting it to rally around its government. More importantly, on the level of principle, it opens the door to military action that will increase civilian suffering. Bombing of civilian areas or infrastructure that serves civilian needs inevitably leads to civilian deaths.

Thus, in this area, too, the game of change may not be worth the candle. Instead, participants in the Swiss government's initiative should concentrate on reaffirming or strengthening existing protections in the law. Above all, they should avoid new formulations that could weaken them. This is one area where change is not always good.

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Anthony Dworkin is editor of the Crimes of War Project website, an online journal covering international law and armed conflict.


What Would Grotius Do?
The Founder of International Law Speaks Out on Iraq
By DEAN G. FALVY
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Thursday, Apr. 03, 2003

Are the U.S. and Britain waging an illegal war against Iraq? And if they were, how would we know?

For centuries, scholars and statesmen have dreamed of devising a system of international law that would provide precise answers to questions like these.

Unfortunately, international law has always been the Snuffleuphagus of jurisprudence. Like Big Bird's elusive mastodon-like pal on Sesame Street, it exists to the extent we believe in it. To some, international law is not only real--it's our best friend. But when they try to show it off to skeptics, it has a tendency to vanish into thin air.

Why? International law is based on universal consent, rather than majority rule. So nations can essentially "opt out" of rules they don't like. Even when the rules are clear, nations have guarded enough of their sovereign privileges to prevent any really effective international arbitrator from arising with the power to enforce them.

Because its jurisdiction is voluntary, the International Court of Justice (better known as the "World Court") is the international equivalent of Judge Judy. Countries may choose to plead their cases in The Hague, but no one can make them show up. If they ignore the Court's judgments, no wail of police sirens will ensue.

Although the U.N. Charter allows the Security Council to authorize the use of force, it also gives veto power to the Council's five permanent members (the U.S., Russia, China, France and Britain). When the interests of the big powers clash, deadlocks and toothless compromises are frequent, while true resolutions remain rare. Badly divided on the use of force against Iraq, the Council could neither authorize the U.S.-led action nor condemn it.

Fortunately, with the legality and legitimacy of the present conflict in Iraq very much in doubt, there is still one untarnished authority to whom we can turn. He has remained largely quiet during the crisis, offending none of the principal antagonists.

To the war's critics, especially in Europe, he is a symbol of balance and humanism, of respect for the rule of law over the law of the jungle. And to the Bush Administration, he represents an era for which they are openly nostalgic--a world of independent states looking out for themselves, their judgments unclouded by the illusory security afforded by ineffective international organizations.

He is the Dutch scholar Huig de Groot. Better known by his Latin pen name, Hugo Grotius, he is perhaps the world's leading authority on international law. According to most accounts, he virtually invented the field.

But you won't find Grotius pontificating about Iraq on CNN or Fox, or even on the Op-Ed page of The New York Times. He's been keeping a low profile--at least since his death in 1645.

Despite this not entirely self-imposed silence, Grotius is willing to share his views with those who patiently inquire. Curling up one evening with an copy of his 1625 bestseller De Jure Belli ac Pacis (On the Law of War and Peace), I was able to ask the old master for his opinions on the present crisis. The questions are mine, but Grotius's answers are quoted directly from the text.

Q: The Bush Administration has argued that it is waging war against Iraq now in order to protect the U.S. from possible attacks in the future. But how can this war be justified on the grounds of self-defense, if Iraq has not actually attacked the U.S.?

Grotius: A just cause of war is an injury, which though not actually committed, threatens our persons or property with danger.... The danger must be immediate, which is one necessary point. [But] when an assailant seizes any weapon with an apparent intention to kill me, I have a right to anticipate and prevent the danger.

Q: The Bush Administration says Iraq has made efforts to acquire chemical, biological and nuclear weapons with just such an intention. But the U.S. has tolerated such weapons in the hands of other countries and holds some of them in its own arsenal. Doesn't this inconsistency undermine its self-defense argument?

Grotius: [T]his kind of defense derives its origin from the principle of self-preservation, which nature has given to every living creature, and not from the injustice or misconduct of the aggressor.

Q: So it's not that the weapons themselves that are bad, it's that they're being developed by a potential adversary? That sounds a bit subjective. We're supposed to be talking about law. Isn't there a danger that leaders will claims fears of attack, and the consequent need for self-defense, as a pretext for conquest?

Grotius: Many wrongs proceed from fear... Xenophon says, "I have known some men, who partly through misrepresentation, and partly through suspicion, dreading one another, in order to prevent the supposed intentions of their adversaries, have committed the most enormous cruelties against those who neither designed, nor wished them any harm."

Q: That's exactly the problem--what if our fears have simply run amok? It's possible that Iraq would never have used its weapons against us. How certain do we have to be about a threat before we can act?

Grotius: Apprehensions from a neighboring power are not a sufficient ground for war. For to authorize hostilities as a defensive measure, they must arise from the necessity, which just apprehensions create; apprehensions not only of the power, but of the intentions of a formidable state, and such apprehensions as amount to a moral certainty.

Q: "Moral certainty" is a pretty high standard. At that point, isn't it already too late? Shouldn't we strike before the threat even arises--by waging what the Bush administration has called "preventative war"?

Grotius: Some writers have advanced a doctrine which can never be admitted, maintaining that the law of nations authorizes one power to commence hostilities against another, whose increasing greatness awakens her alarms. As a matter of expediency such a measure may be adopted, but the principles of justice can never be advanced in its favor.... [T]o maintain that the bare probability of some remote or future annoyance from a neighboring state affords a just ground of hostile aggression, is a doctrine repugnant to every principle of equity.

Q: So unless there's an immediate threat, "preventative" war can never be just. But even so, isn't it better to ensure our safety now and worry about justice later?

Grotius: In matters of moment, where the lives of men are at stake, the decision should incline to the safer side, according to the proverbial maxim, which pronounces it better to acquit the guilty than to condemn the innocent. War being an object of such weighty magnitude, in which the innocent must often be involved in the sufferings of the guilty, between wavering opinions the balance should incline in favor of peace.

Q: Easy for you to say. You're already dead. If we follow your advice and put justice and caution first, can we ever be sure that we are safe from attack?

Grotius: Such, however, is the condition of human life, that no full security can be enjoyed. The only protection against uncertain fears must be sought, not from violence, but from divine providence, and defensive precaution.

Q: "Defensive precaution" sounds like a containment strategy. Do you think there are measures that could have been taken to contain Iraq short of war?

Grotius: If any one intend no immediate violence, but is found to have formed a conspiracy to destroy me by assassination, or poison... I have no right to kill him. For my knowledge of the danger may prevent it. . . . [M]y knowing it will lead me to apply for the legal remedies of prevention.

Q: Many opponents of the war previously criticized "legal remedies of prevention" like sanctions and no-fly zones. If the threat from Iraq doesn't justify war, how can it serve as the basis for a containment regime, which also causes innocent suffering?

Grotius: Sovereign powers have a right not only to avert, but to punish wrongs. From whence they are authorized to prevent a remote as well as an immediate aggression. Though the suspicion of hostile intentions, on the part of another power, may not justify the commencement of actual war, yet it calls for measures of armed prevention, and will authorize indirect hostility.

Q: I take that as a vote for continued containment. But was it working? What about all those U.N. resolutions Saddam flouted? And what about evidence that despite the resolutions, he continued to develop weapons of mass destruction? Aren't they just cause for war?

Grotius: How honorable it is to be heedless of our own lives, where we can preserve the lives, and promote the lasting welfare of others. A duty that should operate with greater force upon Christians, who have before their eyes continually the example of Him who died to save us, while we were enemies and ungodly. An example which calls upon us, in the most affecting manner, not to insist upon the rigorous prosecution of our justest rights, where it cannot be done but by the calamities which war occasions.

Q: Turning the other cheek may sound good in Sunday school, but I doubt we can sell it to the American public after 9/11. Is there any point at which you'd give up on containment, and support the use of force?

Grotius: Now and then a cause of such imperious necessity occurs, as to demand the decision of the sword, and that is when, as Florus says, the desertion of a right will be followed by calamities far more cruel than the fiercest wars.

Q: I don't suppose you can tell me whether Iraq is a case of "imperious necessity" or not. But what about some of the other justifications offered by advocates of the war, such as protecting our oil supplies and enhancing the stability of the region?

Grotius: The advantage to be gained by a war can never pleaded as a motive of equal weight and justice with necessity.

Q: In its recent policy statement, "The National Security Strategy of the United States of America," the Bush administration announced that it will not allow any other country to challenge America's military superiority. It also stated that the U.S. will use its power to promote "freedom, democracy and free enterprise," which it identified as the world's "single sustainable model for national success." If this war allows us to impose our way of life on troubled countries like Iraq, is that such a bad thing?

Grotius: As to the argument in favor of universal dominion from its being so beneficial to mankind, it may be observed that all its advantages are counterbalanced by still greater disadvantages. For as a ship may be built too large to be conveniently managed, so an empire may be too extensive in population and territory to be directed and governed by one head. But even granting the expediency of universal empire, that expediency cannot give such a right...

Q: What about human rights? Saddam is a brutal dictator, guilty of all kinds of cruelties against his people. Isn't that cause enough to remove him?

Grotius: It is a rule established by the laws of nature and of social order, and a rule confirmed by all the records of history, that every sovereign is supreme judge in his own kingdom and over his own subjects, in whose disputes no foreign power can justly interfere.

Q: I expected you to say that. You wrote your book four hundred years ago, before the horrors of totalitarianism shook our belief in state sovereignty and gave birth to international human rights law. But can't you think of any instances where humanitarian intervention was justified?

Grotius: Where a Busiris, a Phalaris or a Thracian Diomede provoke their people to despair and resistance by unheard of cruelties, having themselves abandoned all the laws of nature, they lose the rights of independent sovereigns, and can no longer claim the privilege of the law of nations.

Q: OK, I'm relieved to hear you say that. But here's the problem. How do we know when to believe a leader who says he's waging war for another people's freedom, and when he's abusing our credulity to achieve other aims?

Grotius: Pretexts of that kind cannot always be allowed, [as] they may often be used as the cover of ambitious designs. But right does not necessarily lose its nature from being in the hands of wicked men. The sea still continues a channel of lawful intercourse, though sometimes navigated by pirates, and swords are still instruments of defense, though sometimes wielded by robbers or assassins.

Q: Nice metaphor. I suppose that if our leaders have tolerated Saddam's barbarity for the past twenty-five years, we should be skeptical when they cite it as a reason for going to war now. But you make a valid point--even if our leaders are insincere, they may inadvertently succeed in doing some good. At this point, we can only hope so. It will be sorely needed to counterbalance the unintended harm.

I'm still having some trouble figuring out exactly where you stand. You seem to doubt the justifications advanced for this war, but, like many of us, find it a difficult question. Meanwhile, the decisions are left to those who admit no uncertainty. Does it disturb you that international law could not prevent this war, or at least assure us that if waged, it would be a just one?

Grotius: There is no intermediate line between a straight line and a curve. But it is not so in morals, where the least circumstances vary the subject, and admit a latitude of interpretation, settling the points of truth and justice between two extremes. So that between what is right and what is unlawful there is a middle space, where it is easy to incline to the one side, or to the other. This occasions an ambiguity somewhat like the difficulty of deciding the precise moment where the twilight begins, and where it ends...

For where the power of law ceases, there war begins.

What Do You Think? Message Boards


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Dean G. Falvy, a graduate of Yale University and Harvard Law School, is an attorney focusing on corporate and international law. After due consideration, he thinks Gulf War II is a mistake.

Hugo Grotius (1583-1645), a graduate of the University of Leyden and the Universite de Orleans, served as Sweden's ambassador to France after being exiled from his native Holland. He is known to have had doubts about the Thirty Years' War.

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

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


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

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


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

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

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Saudis Reinforce Hunt for Militant Suspects Near Riyadh

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

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

AP-ES-04-27-04 1526EDT

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

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

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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Bowen: "Correct."

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

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

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

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

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

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

Kelly Patricia O'Meara is an investigative reporter for Insight.
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Investigative Report
Saddam's WMD Have Been Found
Post April 26, 2004
By Kenneth R. Timmerman




New evidence out of Iraq suggests that the U.S. effort to track down Saddam Hussein's missing weapons of mass destruction (WMD) is having better success than is being reported. Key assertions by the intelligence community that were widely judged in the media and by critics of President George W. Bush as having been false are turning out to have been true after all. But this stunning news has received little attention from the major media, and the president's critics continue to insist that "no weapons" have been found.

In virtually every case - chemical, biological, nuclear and ballistic missiles - the United States has found the weapons and the programs that the Iraqi dictator successfully concealed for 12 years from U.N. weapons inspectors.

The Iraq Survey Group (ISG), whose intelligence analysts are managed by Charles Duelfer, a former State Department official and deputy chief of the U.N.-led arms-inspection teams, has found "hundreds of cases of activities that were prohibited" under U.N. Security Council resolutions, a senior administration official tells Insight. "There is a long list of charges made by the U.S. that have been confirmed, but none of this seems to mean anything because the weapons that were unaccounted for by the United Nations remain unaccounted for."

Both Duelfer and his predecessor, David Kay, reported to Congress that the evidence they had found on the ground in Iraq showed Saddam's regime was in "material violation" of U.N. Security Council Resolution 1441, the last of 17 resolutions that promised "serious consequences" if Iraq did not make a complete disclosure of its weapons programs and dismantle them in a verifiable manner. The United States cited Iraq's refusal to comply with these demands as one justification for going to war.

Both Duelfer and Kay found that Iraq had "a clandestine network of laboratories and safe houses with equipment that was suitable to continuing its prohibited chemical- and biological-weapons [BW] programs," the official said. "They found a prison laboratory where we suspect they tested biological weapons on human subjects." They found equipment for "uranium-enrichment centrifuges" whose only plausible use was as part of a clandestine nuclear-weapons program. In all these cases, "Iraqi scientists had been told before the war not to declare their activities to the U.N. inspectors," the official said.

But while the president's critics and the media might plausibly hide behind ambiguity and a lack of sensational-

looking finds for not reporting some discoveries, in the case of Saddam's ballistic-missile programs they have no excuse for their silence. "Where were the missiles? We found them," another senior administration official told Insight.

"Saddam Hussein's prohibited missile programs are as close to a slam dunk as you will ever find for violating United Nations resolutions," the first official said. Both senior administration officials spoke to Insight on condition that neither their name nor their agency be identified, but their accounts of what the United States has found in Iraq coincided in every major area.

When former weapons inspector Kay reported to Congress in January that the United States had found "no stockpiles" of forbidden weapons in Iraq, his conclusions made front-page news. But when he detailed what the ISG had found in testimony before the House Permanent Select Committee on Intelligence last October, few took notice. Among Kay's revelations, which officials tell Insight have been amplified in subsequent inspections in recent weeks:


A prison laboratory complex that may have been used for human testing of BW agents and "that Iraqi officials working to prepare the U.N. inspections were explicitly ordered not to declare to the U.N." Why was Saddam interested in testing biological-warfare agents on humans if he didn't have a biological-weapons program?


"Reference strains" of a wide variety of biological-weapons agents were found beneath the sink in the home of a prominent Iraqi BW scientist. "We thought it was a big deal," a senior administration official said. "But it has been written off [by the press] as a sort of 'starter set.'"


New research on BW-applicable agents, brucella and Congo-Crimean hemorrhagic fever, and continuing work on ricin and aflatoxin that were not declared to the United Nations.


A line of unmanned aerial vehicles (UAVs), or drones, "not fully declared at an undeclared production facility and an admission that they had tested one of their declared UAVs out to a range of 500 kilometers [311 miles], 350 kilometers [217 miles] beyond the permissible limit."


"Continuing covert capability to manufacture fuel propellant useful only for prohibited Scud-variant missiles, a capability that was maintained at least until the end of 2001 and that cooperating Iraqi scientists have said they were told to conceal from the U.N."


"Plans and advanced design work for new long-range missiles with ranges up to at least 1,000 kilometers [621 miles] - well beyond the 150-kilometer-range limit [93 miles] imposed by the U.N. Missiles of a 1,000-kilometer range would have allowed Iraq to threaten targets throughout the Middle East, including Ankara [Turkey], Cairo [Egypt] and Abu Dhabi [United Arab Emirates]."


In addition, through interviews with Iraqi scientists, seized documents and other evidence, the ISG learned the Iraqi government had made "clandestine attempts between late 1999 and 2002 to obtain from North Korea technology related to 1,300-kilometer-range [807 miles] ballistic missiles - probably the No Dong - 300-kilometer-range [186 miles] antiship cruise missiles and other prohibited military equipment," Kay reported.

In testimony before Congress on March 30, Duelfer, revealed that the ISG had found evidence of a "crash program" to construct new plants capable of making chemical- and biological-warfare agents. The ISG also found a previously undeclared program to build a "high-speed rail gun," a device apparently designed for testing nuclear-weapons materials. That came in addition to 500 tons of natural uranium stockpiled at Iraq's main declared nuclear site south of Baghdad, which International Atomic Energy Agency spokesman Mark Gwozdecky acknowledged to Insight had been intended for "a clandestine nuclear-weapons program."

In taking apart Iraq's clandestine procurement network, Duelfer said his investigators had discovered that "the primary source of illicit financing for this system was oil smuggling conducted through government-to-government protocols negotiated with neighboring countries [and] from kickback payments made on contracts set up through the U.N. oil-for-food program" [see "Documents Prove U.N. Oil Corruption," April 27-May 10].

What the president's critics and the media widely have portrayed as the most dramatic failure of the U.S. case against Saddam has been the claimed failure to find "stockpiles" of chemical and biological weapons. But in a June 2003 Washington Post op-ed, former chief U.N. weapons inspector Rolf Ekeus called such criticism "a distortion and a trivialization of a major threat to international peace and security."


Lt. Gen. Amer Rashid al-Obeidi (left) and Lt. Gen. Amer Hamoodi al-Saddi (right) speak to an unidentified French intelligence officer at the Baghdad International Arms Fair in April 1989, and another French officer listens in (behind al-Saadi, facing camera)

The October 2002 National Intelligence Estimate on Iraqi Weapons of Mass Destruction concluded that Saddam "probably has stocked at least 100 metric tons (MT) and possibly as much as 500 MT of CW [chemical warfare] agents - much of it added in the last year." That assessment was based, in part, on conclusions contained in the final report from U.N. weapons inspectors in 1999, which highlighted discrepancies in what the Iraqis reported to the United Nations and the amount of precursor chemicals U.N. arms inspectors could document Iraq had imported but for which it no longer could account. Until now, Bush's critics say, no stockpiles of CW agents made with those precursors have been found. The snap conclusion they draw is that the administration "lied" to the American people to create a pretext for invading Iraq.

But what are "stockpiles" of CW agents supposed to look like? Was anyone seriously expecting Saddam to have left behind freshly painted warehouses packed with chemical munitions, all neatly laid out in serried rows, with labels written in English? Or did they think that a captured Saddam would guide U.S. troops to smoking vats full of nerve gas in an abandoned factory? In fact, as recent evidence made public by a former operations officer for the Coalition Provisional Authority's (CPA's) intelligence unit in Iraq shows, some of those stockpiles have been found - not all at once, and not all in nice working order - but found all the same.

Douglas Hanson was a U.S. Army cavalry reconnaissance officer for 20 years, and a veteran of Gulf War I. He was an atomic demolitions munitions security officer and a nuclear, biological and chemical defense officer. As a civilian analyst in Iraq last summer, he worked for an operations intelligence unit of the CPA in Iraq, and later, with the newly formed Ministry of Science and Technology, which was responsible for finding new, nonlethal employment for Iraqi WMD scientists.

In an interview with Insight and in an article he wrote for the online magazine AmericanThinker.com, Hanson examines reports from U.S. combat units and public information confirming that many of Iraq's CW stockpiles have indeed been found. Until now, however, journalists have devoted scant attention to this evidence, in part because it contradicts the story line they have been putting forward since the U.S.-led inspections began after the war.

But another reason for the media silence may stem from the seemingly undramatic nature of the "finds" Hanson and others have described. The materials that constitute Saddam's chemical-weapons "stockpiles" look an awful lot like pesticides, which they indeed resemble. "Pesticides are the key elements in the chemical-agent arena," Hanson says. "In fact, the general pesticide chemical formula (organophosphate) is the 'grandfather' of modern-day nerve agents."

The United Nations was fully aware that Saddam had established his chemical-weapons plants under the guise of a permitted civilian chemical-industry infrastructure. Plants inspected in the early 1990s as CW production facilities had been set up to appear as if they were producing pesticides - or in the case of a giant plant near Fallujah, chlorine, which is used to produce mustard gas.

When coalition forces entered Iraq, "huge warehouses and caches of 'commercial and agricultural' chemicals were seized and painstakingly tested by Army and Marine chemical specialists," Hanson writes. "What was surprising was how quickly the ISG refuted the findings of our ground forces and how silent they have been on the significance of these caches."

Caches of "commercial and agricultural" chemicals don't match the expectation of "stockpiles" of chemical weapons. But, in fact, that is precisely what they are. "At a very minimum," Hanson tells Insight, "they were storing the precursors to restart a chemical-warfare program very quickly." Kay and Duelfer came to a similar conclusion, telling Congress under oath that Saddam had built new facilities and stockpiled the materials to relaunch production of chemical and biological weapons at a moment's notice.

At Karbala, U.S. troops stumbled upon 55-gallon drums of pesticides at what appeared to be a very large "agricultural supply" area, Hanson says. Some of the drums were stored in a "camouflaged bunker complex" that was shown to reporters - with unpleasant results. "More than a dozen soldiers, a Knight-Ridder reporter, a CNN cameraman, and two Iraqi POWs came down with symptoms consistent with exposure to a nerve agent," Hanson says. "But later ISG tests resulted in a proclamation of negative, end of story, nothing to see here, etc., and the earlier findings and injuries dissolved into nonexistence. Left unexplained is the small matter of the obvious pains taken to disguise the cache of ostensibly legitimate pesticides. One wonders about the advantage an agricultural-commodities business gains by securing drums of pesticide in camouflaged bunkers 6 feet underground. The 'agricultural site' was also colocated with a military ammunition dump - evidently nothing more than a coincidence in the eyes of the ISG."

That wasn't the only significant find by coalition troops of probable CW stockpiles, Hanson believes. Near the northern Iraqi town of Bai'ji, where Saddam had built a chemical-weapons plant known to the United States from nearly 12 years of inspections, elements of the 4th Infantry Division found 55-gallon drums containing a substance identified through mass spectrometry analysis as cyclosarin - a nerve agent. Nearby were surface-to-surface and surface-to-air missiles, gas masks and a mobile laboratory that could have been used to mix chemicals at the site. "Of course, later tests by the experts revealed that these were only the ubiquitous pesticides that everybody was turning up," Hanson says. "It seems Iraqi soldiers were obsessed with keeping ammo dumps insect-free, according to the reading of the evidence now enshrined by the conventional wisdom that 'no WMD stockpiles have been discovered.'"

At Taji - an Iraqi weapons complex as large as the District of Columbia - U.S. combat units discovered more "pesticides" stockpiled in specially built containers, smaller in diameter but much longer than the standard 55-gallon drum. Hanson says he still recalls the military sending digital images of the canisters to his office, where his boss at the Ministry of Science and Technology translated the Arabic-language markings. "They were labeled as pesticides," he says. "Gee, you sure have got a lot of pesticides stored in ammo dumps."

Again, this January, Danish forces found 120-millimeter mortar shells filled with a mysterious liquid that initially tested positive for blister agents. But subsequent tests by the United States disputed that finding. "If it wasn't a chemical agent, what was it?" Hanson asks. "More pesticides? Dish-washing detergent? From this old soldier's perspective, I gain nothing from putting a liquid in my mortar rounds unless that stuff will do bad things to the enemy."

The discoveries Hanson describes are not dramatic. And that's the problem: Finding real stockpiles in grubby ammo dumps doesn't fit the image the media and the president's critics carefully have fed to the public of what Iraq's weapons ought to look like.

A senior administration official who has gone through the intelligence reporting from Iraq as well as the earlier reports from U.N. arms inspectors refers to another well-documented allegation. "The Iraqis admitted they had made 3.9 tons of VX," a powerful nerve gas, but claimed they had never weaponized it. The U.N. inspectors "felt they had more. But where did it go?" The Iraqis never provided any explanation of what had happened to their VX stockpiles.

What does 3.9 tons of VX look like? "It could fit in one large garage," the official says. Assuming, of course, that Saddam would assemble every bit of VX gas his scientists had produced at a single site, that still amounts to one large garage in an area the size of the state of California.

Senior administration officials stress that the investigation will continue as inspectors comb through millions of pages of documents in Iraq and attempt to interview Iraqi weapons scientists who have been trained all their professional lives to conceal their activities from the outside world.

"The conditions under which the ISG is working are not very conducive," one official said. "But this president wants the truth to come out. This is not an exercise in spinning or censoring."

For more on WMD, read "Iraqi Weapons in Syria"

Kenneth R. Timmerman is a senior writer for Insight.
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Iraqi Weapons in Syria
Post April 26, 2004
By Kenneth R. Timmerman

On Dec. 24, 2002, nearly three months before fighting in Iraq began, Israeli Prime Minister Ariel Sharon accused Saddam Hussein's regime of transferring key materials for his weapons of mass destruction (WMD) programs to Syria in convoys of 18-wheel trucks to hide them from U.N. weapons inspectors. "There is information we are verifying, but we are certain that Iraq has recently moved chemical or biological weapons into Syria," Sharon told Channel Two television in Israel.

Before talking about this on Israeli television, Sharon gave detailed information to the Bush White House on what Israel knew and what it suspected. Insight has learned, however, that once the information was handed over to the U.S. intelligence community, officials at the State Department's Bureau of Intelligence and Research (INR) swept it aside as lacking credibility.

In May 2003, just as major combat operations in Iraq were winding down, new reports surfaced in Israel, this time alleging that convoys of Iraqi water tankers carrying WMD components crossed the border into Syria repeatedly between Jan. 10 and March 10. The tankers reportedly were met by Syrian special forces and escorted to the heroin poppy fields of a Syrian-controlled area in Lebanon's Bek?a Valley, where their contents were dumped into specially prepared pits and buried. Again, INR discounted the reports, U.S. officials tell Insight.

Reports of Iraqi WMD winding up in Syria were not just coming from the Israelis. In October 2003, retired Air Force Lt. Gen. James Clapper, head of the National Imagery and Mapping Agency, revealed that vehicle traffic photographed by U.S. spy satellites indicated that material and documents related to Saddam's forbidden WMD programs had been shipped to Syria before the war. It was no surprise that the United States and its allies had not found stockpiles of forbidden weapons in Iraq, Clapper told a breakfast briefing given to reporters in Washington. "Those below the senior leadership saw what was coming, and I think they went to extraordinary lengths to dispose of the evidence," he said.

"We have had six or seven credible reports of Iraqi weapons being moved into Syria before the war," a senior administration official tells Insight. "In every case, the U.S. intelligence community sought to discount or discredit those reports."

This January, after he returned to Washington from Iraq, where for six months he had served as the CIA's top gun with the Iraq Survey Group hunting for Saddam's banned weapons, David Kay said he had uncovered evidence that weapons material had been moved to Syria shortly before the war. "We are not talking about a large stockpile of weapons," he told the Sunday Telegraph in London. "But we know from some of the interrogations of former Iraqi officials that a lot of material went to Syria before the war, including some components of Saddam's WMD program. Precisely what went to Syria, and what has happened to it, is a major issue that needs to be resolved."

Another piece of this puzzle was provided by a Syrian intelligence officer in letters smuggled to an antiregime activist living in Paris named Nizar Nayouf. In one letter the source identified three locations in Syria where WMD materials had been buried under an agreement between the Syrian and Iraqi leadership. Two of the sites were specially dug underground bunkers and tunnels. The third site was a factory operated by the Syrian air force in the village of Tal Sinan, located between the cities of Hama and Salimiyyah. In a follow-up letter dated Jan. 7, Nayouf's source provided more details on these locations, along with a map, and alleged that some of the weapons had been moved out of Iraq in ambulances.

So are Saddam's WMD stockpiles in Syria? When Insight asked the CIA if it was investigating these and other reports, a spokesman acknowledged there was "some evidence that way" and that the United States was "looking at all types of possibilities," but vigorously discouraged further inquiries. Administration officials tell Insight that the refusal to report on Syria's complicity with Saddam's regime stems from a "pro-Syria bias in the State Department and some elements of the intelligence community, whose threshold for evidence on Syria is suspiciously high."

Shoshana Bryen regularly escorts groups of retired U.S. military flag officers (admirals and generals) to Israel for meetings with senior Israeli political and military leaders, as well as intelligence officials. "We went to Israel just before the war and just after," she tells Insight. "Both times, Israeli intelligence officials told us, yes, WMD were definitely in Iraq, and that they had been sent to Syria." The Bush administration was trying to downplay these reports, she believes, "because if Iraqi weapons are in Syria, we're going to have to do something about it, and they don't want another war."

Return to "Saddam's WMD Have Been Found"

Kenneth R. Timmerman is a senior writer for Insight.
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>> OUR FRIENDS THE CHINESE
Chinese diplomats rush past lab guards


By Bill Gertz
THE WASHINGTON TIMES

Two Chinese diplomats, away from their Los Angeles consulate improperly, recently sped their vehicle past a Los Alamos National Laboratory guard post near classified facilities in what U.S. officials think was an intelligence mission, The Washington Times has learned.
The diplomats, identified as Hua Yu and Bo Lai, were on an intelligence-gathering mission that is raising new worries of Chinese nuclear spying against the United States, according to U.S. officials familiar with the incident.

According to an incident report, the diplomats sped a white Ford Escort past a guard post at the New Mexico facility at about 2:30 p.m. on Feb. 26.
Security guard Joseph Chavez was at the post at the time and reported that the car "ran his post at a high rate of speed," the report said.
The white Escort, rented in Colorado, was stopped a short distance from the post by three Los Alamos security police on Pajarito Road. The diplomats were questioned, and their car was searched.
Mr. Hua and Mr. Bo identified themselves as Chinese diplomats posted to the consulate in Los Angeles.
"At this point, we briefed the gentleman on the fact that Pajarito Road was closed to the general public, and [they] were escorted out of the area," the report states.
Kevin Roark, a spokesman for Los Alamos, confirmed that the incident took place and said no apparent compromise of security occurred.
Pajarito Road also is the site of two sensitive facilities, Mr. Roark said. One is the Critical Assembly Facility known as Technical Area-18, and the other is the Plutonium Research Facility, known as Technical Area-55.
Both facilities are used for classified nuclear-weapons activities at Los Alamos, part of the Energy Department's nuclear-weapons program.
"They were asked for identification. They were briefly questioned as to what they were up to. Their vehicle was searched, and after that, they were promptly escorted off the road," Mr. Roark said.
He declined to comment on whether the FBI was notified. An FBI spokesman could not be reached for comment.
A State Department official said the Chinese diplomats did not notify the department's Office of Foreign Missions before the visit to Los Alamos, a violation of U.S. rules.
Chinese diplomats are barred from traveling outside a 25-mile radius of their embassy or consulate and must obtain permission from the State Department before any other travel.
Xiao Mei, a spokeswoman for the Chinese Consulate in Los Angeles, said the two diplomats were visiting New Mexico in preparation for the visit to Santa Fe by a Chinese official.
Miss Xiao said she did not know whether the two men had gone to the Los Alamos laboratory, but they might have been trying to visit a museum at the facility.
"We all know this is a sensitive area," she said. "But the museum is public."
Los Alamos was the scene of a major U.S. nuclear-spying scandal in the late 1990s when Chinese-American nuclear scientist Wen Ho Lee, who worked at Los Alamos, was accused of supplying nuclear secrets to China.
Mr. Lee denied being a spy but was convicted of mishandling classified information, including top-secret computer tapes that were never found.
A CIA damage assessment later concluded that the Chinese had obtained secrets on every U.S. nuclear warhead, including the W-88, a small warhead that U.S. intelligence thinks has been copied for use on China's new short-range and long-range missiles.
U.S. officials said the incident involving the two diplomats was an intelligence-gathering mission, with the men probably testing Los Alamos security to see how guards react. Such information is useful for other intelligence-gathering activities, the officials said, speaking on condition of anonymity.
The diplomats also might have been trying to recover material left by an agent or planning to meet with an agent, the officials said.
Mr. Roark said the guard post was one of several recently added to the Los Alamos complex as part of post-September 11 security upgrades.
It was the second time in the past six months that Chinese diplomats based in Los Angeles ended up in legal trouble.
Late last year, a Chinese official posted to the Los Angeles consulate was charged with speeding as he drove more than 100 mph in San Bernardino County. The incident resulted in a diplomatic protest note being sent to the Chinese Embassy in Washington.
One U.S. official said Washington expelled neither that Chinese official nor the two diplomats in the Los Alamos incident because of concerns that doing so would trigger expulsions of U.S. intelligence personnel in China.
A classified U.S. intelligence report produced in 1998 stated that China was one of the most aggressive intelligence threats against U.S. nuclear facilities.
"China represents an acute intelligence threat" to the Department of Energy, the report said. "It conducts a 'full-court press' consisting of massive numbers of collectors of all kinds, in the United States, in China and elsewhere abroad."
The report noted that Chinese intelligence gathering at the nuclear-weapons laboratories usually involves exploiting "natural scientist-to-scientist relationships."
"Chinese scientists nurture relationships with national laboratory counterparts, issuing invitations for them to travel to laboratories and conferences in China," it said.
U.S. officials said there has been no change in the report on Chinese activities targeting nuclear facilities.


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10 U.S. Contractors in Iraq Penalized

By MATT KELLEY
Associated Press Writer

WASHINGTON (AP) -- Ten companies with billions of dollars in U.S. contracts for Iraq reconstruction have paid more than $300 million in penalties since 2000 to resolve allegations of bid rigging, fraud, delivery of faulty military parts and environmental damage.
The United States is paying more than $780 million to one British firm that was convicted of fraud on three federal construction projects and banned from U.S. government work during 2002, according to an Associated Press review of government documents.
A Virginia company convicted of rigging bids for American-funded projects in Egypt also has been awarded Iraq contracts worth hundreds of millions. And a third firm found guilty of environmental violations and bid rigging won U.S. Army approval for a subcontract to clean up an Iraqi harbor.
Seven other companies with Iraq reconstruction contracts have agreed to pay financial penalties without admitting wrongdoing. Together, the 10 companies have paid to resolve 30 alleged violations in the past four years. Six paid penalties more than once. But the companies have been awarded $7 billion in Iraq reconstruction contracts.
"We have not made firms pay the price when they screw up," said Peter W. Singer, a former Pentagon official who worked on a task force overseeing military and contract work in the Balkans.
"But it's not the company's fault if it has a dumb client. I'm not blaming the companies, I'm blaming the government," said Singer, now a fellow at the Brookings Institution, a Washington think tank.
The contracts are legal because the Bush administration repealed regulations put in place by the Clinton administration that would have allowed officials to bar new government work for companies convicted or penalized during the previous three years.
Spokesmen for the companies defended the contracts, saying the penalties often were for violations committed years ago or by subsidiaries unrelated to the ones working in Iraq. Spokeswoman Pamela Blossom said AMEC, the convicted British firm, wrote new company ethics rules after its punishment.
"None of the people involved are with the company any more," said Blossom, whose firm paid $1.2 million in fines for contract fraud on projects in California and Missouri. "We're a much better company now."
Federal regulations require government contractors to have a "satisfactory record of integrity and business ethics." The government can ban unethical companies from getting new contracts through a process called debarment.
Companies often avoid debarment by agreeing to settle misconduct cases and pay penalties without admitting guilt. AMEC was the only one of the 10 punished Iraq contractors ever debarred, and it was banned for just one year.
If a U.S. company is not on the list of banned firms, it can compete for Iraq work, said Army Maj. Gary Tallman, a spokesman for the Iraq contract management office.
"If they pay their fine or do what they have to do to get off a debarment list, they are back in good standing and eligible to compete," Tallman said.
The Clinton administration tightened contracting rules shortly before leaving office in 2001, instructing officials that repeated violations of federal laws would make a company ineligible for new contracts. Officials still would have been able to award contracts to punished companies for overriding reasons such as national security.
The Bush administration suspended the new rules during its first three months in office, and revoked them in December 2001. Business groups had objected to the Clinton changes, arguing it was unfair to deny contracts for reasons unrelated to how well a firm could do the work.
The two largest government contractors in Iraq, Bechtel Corp. and Halliburton Co., have paid several penalties in the past three years.
Halliburton paid $2 million in 2002 to settle charges it inflated costs on a maintenance contract at now-closed Fort Ord in California. Vice President Dick Cheney's former company did not admit wrongdoing.
Halliburton took in $3.6 billion last year from contracts to serve U.S. troops and rebuild the oil industry in Iraq. Halliburton executives say the company is getting about $1 billion a month for Iraq work this year.
Federal authorities also are investigating whether Halliburton broke the law by using a subsidiary to do business in Iran, whether the company overcharged for work done for the Pentagon in the Balkans and whether it was involved in an alleged $180 million bribery scheme in Nigeria. The company admitted in 2003 that it improperly paid $2.4 million to a Nigerian tax official.

Bechtel paid more than $110,000 to the Environmental Protection Agency and the Energy Department in 2000 and 2001 to settle alleged safety and environmental violations. Bechtel has prime construction contracts in Iraq worth more than $2 billion.
"We were chosen on ability and cost," Bechtel spokesman Howard Menaker said.
Bechtel also hired three subcontractors in Iraq that have been fined more than $86 million in the past four years, though none had been banned from getting new contracts. Bechtel spokesman Francis Canavan said the company would reject subcontractors that are on the no-contracts list.

Other punished contractors include:

-American International Contractors Inc., which paid $4.7 million in fines in 2000 after pleading guilty to bid rigging on a U.S.-funded water project in Egypt. AICI has part of a $325 million contract to rebuild Iraq's transportation systems, has a share of a $500 million contract for emergency construction needs in the Pentagon's Central Command region, which includes Iraq and Afghanistan, and is in a partnership that has a $70 million construction contract at Al-Udeid air base in Qatar, used to support troops in Iraq. An AICI official who spoke to the AP declined to comment or give his name.

-Fluor Corp., which paid $8.5 million to the Defense Department in 2001 to settle charges it improperly billed the government for work benefiting its commercial clients. The company did not admit guilt. Fluor and AMEC created a joint venture that has $1.7 billion in contracts to rebuild Iraq's electricity, water, sewer and trash removal infrastructure.

-Great Lakes Dredge & Dock Co., which paid a $969,000 fine in 2002 for environmental damage in the Florida Keys National Marine Sanctuary. Bechtel awarded the company a subcontract to clear the Iraqi port of Umm Qasr. Great Lakes Dredge & Dock also pleaded guilty to price fixing on Army Corps of Engineers contracts in 1988. A company spokesman did not return messages seeking comment. Bechtel's Canavan said Bechtel told the Corps of Engineers it planned to hire Great Lakes Dredge & Dock when it applied for the contract.

- Northrop Grumman Corp., whose Vinnell Corp. subsidiary was awarded a $48 million contract to train the new Iraqi Army last year. Northrop Grumman has been penalized $191.7 million in the past four years, including $750,000 paid to the Pentagon in 2000 in a case involving allegations of providing faulty replacement parts for the JSTARS airborne surveillance system. A Northrop Grumman spokesman referred questions to the U.S. Army Corps of Engineers, which said it excludes only companies banned by the federal government.

Copyright 2004 Associated Press. All rights reserved.


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Justice Department to Investigate Judiciary Memo Scandal

By Jesse J. Holland Associated Press Writer
Published: Apr 26, 2004

WASHINGTON (AP) - The Justice Department on Monday asked the new U.S. attorney in New York to investigate how Republicans got access to Democrats' computer memos in the Senate Judiciary Committee.
A report by the Senate sergeant-at-arms earlier this year faulted two of committee chairman Orrin Hatch's former employees for the intrusion into the Democrats' computer documents. It says 4,670 files were found on a GOP aide's computer, "the majority of which appeared to be from folders belonging to Democratic staff."
Democrats have called for an outside investigation, and the Justice Department on Monday sent the case to David Kelley, the acting U.S. attorney for the Southern District of New York.
Kelley, a Democrat, took James Comey's position as U.S. attorney after Comey left to become deputy attorney general, the No. 2 job at the Justice Department.
Kelley is "an experienced prosecutor of the highest integrity and independence," said Assistant Attorney General William Moschella in a letter to Sen. Patrick Leahy of Vermont, the top Democrat on the Judiciary Committee. "We are confident the investigation will be handled in a thorough, fair, impartial and professional manner."
The Justice Department would not comment beyond the letter to Leahy.
"This is a serious matter that deserves and requires careful investigation," said Leahy, who requested the investigation. "The Senate sergeant-at-arms made a good start with his investigation and report. With the powers available to a federal prosecutor, this matter can now be more thoroughly investigated, so that those who engaged in criminal conduct may be brought to justice."
Sen. Charles Schumer, D-N.Y., called the appointment "a very good first step" and said Kelley is "independent" and "without conflicts."
"The only thing missing is for (Attorney General) John Ashcroft to recuse himself to avoid any potential conflict of interests," Schumer said.
Added Sen. John Cornyn, R-Texas: "If there is to be an investigation, I'm encouraged to know that the decision will be made by professionals, not partisans. Now, perhaps, the Senate Judiciary Committee can get back to work."
The report by Senate Sergeant-at-Arms William Pickle's office blamed the intrusion on former GOP aides Manuel Miranda, who worked for Senate Majority Leader Bill Frist and Judiciary Committee Chairman Orrin Hatch, and Jason Lundell, a clerk who worked on nominations for Hatch. Miranda resigned during the dispute. Lundell left last year.
"The matter had to be referred to someone to review. I expect that any fair-minded, apolitical law enforcement professional will quickly conclude what legislators could not:...that no crime was committed," Miranda said. "I hope that this referral includes the charges of corruption filed against Democrat senators with the DOJ Office of Public Integrity."
Conservatives say the memos prove the Democrats colluded with liberal groups over which Bush nominees to block. One ethics complaint has been filed against Democrats Sen. Richard Durbin, of Illinois, and Sen. Edward Kennedy, of Massachusetts, based on the leaked information.

AP-ES-04-26-04 1904EDT
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N. Korea Won't Open Border for South Aid

By CHRISTOPHER BODEEN
Associated Press Writer

DANDONG, China (AP) -- North Korea balked Monday at opening its heavily armed border to relief trucks from rival South Korea, even as international aid groups sought more help for thousands injured or made homeless by a massive train explosion.
As a cold rain fell on the devastated community of Ryongchon, relief workers warned that more food, blankets and medicine were needed immediately in the impoverished nation.
Video released by the United Nations showed patients squeezed two to a bed in shabby hospitals, with compresses over their eyes and facial injuries from being struck by a wave of glass, rubble and heat in Thursday's blast.
Aid workers said North Korea was short of even basic equipment like sutures and intravenous drips, and that donated goods were being used up as quickly as they could be supplied.
The Red Cross distributed a three-month supply of antibiotics, anesthetics and bandages to North Korean hospitals over the weekend, but "according to the hospitals, they have already used these medical supplies and have requested more," said Niels Juel, an official for the agency who is based in Beijing.
The casuality toll stood at 161 dead and more than 1,300 injured by the explosion of oil and chemicals, aid agencies said.
"The overall health system ... is very strained," said Brendan McDonald, a U.N. aid coordinator in Pyongyang, the North Korean capital. Electrical power and water supplies are "all inadequate," he said.
The Red Cross launched an emergency appeal Monday for $1.25 million in aid for North Korea. "Some families have lost all their belongings," Juel said. "Also, the water and sanitation system in that area would need to be restored."
Days after the catastrophe, details were still only trickling out from the secretive, communist North. Aid workers who first arrived in Ryongchon on Saturday described seeing huge craters, twisted railroad tracks and scorched buildings.
Nearly half of the dead were children in a school torn apart by the blast, and the disaster left thousands of residents homeless, the aid workers said.
One worker who toured a hospital in the nearby city of Sinuiju said that injured children lay on filing cabinets because there weren't enough beds. The hospital was "short of just about everything," said Tony Banbury, Asia regional director for the U.N. World Food Program, after his visit Sunday.
U.S. Secretary of State Colin Powell said Monday the United States will give financial assistance to North Korea in response to the disaster but gave no further details.
The Bush administration is working with the United Nations and "we will be making an offer," Powell said.
Japan, Russia, Australia are among the countries that have already offered to send supplies. Neighboring China dispatched truckloads of tents, blankets and food across its border over the weekend.
But North Korea's border with South Korea remained sealed.
At a cargo depot near Seoul, Red Cross trucks loaded with medical supplies, bottled water, clothes and packages of instant noodles were awaiting the green light. But North Korea was hesitant Monday about allowing them across the Demilitarized Zone that has separated the two Koreas for over half a century.
The Pyongyang government also didn't respond to a South Korean offer to unload ships carrying relief goods at ports near Ryongchon.
Officials from North and South Korea planned to meet in the northern city of Kaesong on Tuesday to discuss relief operations.
"It is most important to have the relief goods arrive in the site of the explosion as quickly as possible," said South Korean Prime Minister Goh Kun. "By land or by sea, a quick means of transportation should be found."
The South Korean public has also mobilized, with civic groups and the news media launching donation campaigns.
The Koreas were divided at the end of World War II. Their border remains sealed after the 1950-53 Korean War, which ended without a peace treaty.
North Korea's Communist government relaxed its normally intense secrecy as it pleaded for international help. It has blamed the disaster on human error, saying the cargo of oil and chemicals ignited when workers knocked the train cars against power lines.

Copyright 2004 Associated Press. All rights reserved.
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>> WOULD YOU TRUST THEM?


North Korea Vows It Won't Transfer Nukes

By AUDRA ANG
Associated Press Writer
BEIJING (AP) -- North Korean officials angrily denied U.S. accusations that they might sell nuclear weapons to terrorists and offered to freeze a plutonium-based nuclear program in exchange for aid, an American researcher who visited the North said Saturday.
However, the officials wouldn't confirm whether Pyongyang has a second, uranium-based weapons program, a key sticking point in talks with the United States and other governments, said Selig S. Harrison of the Center for International Policy in Washington.
The comments, similar to previous North Korean offers, did not appear to represent any new concession that might revive progress in the six-nation talks aimed at persuading the North to eliminate its nuclear program.
North Korean leaders criticized U.S. Vice President Dick Cheney's suggestion during a visit to China this month that the North might sell weapons to Osama bin Laden's al-Qaida network or other terror groups, Harrison said.
Foreign Minister Paek Nam Sun said North Koreans "denounce al-Qaida," said Harrison, who returned from Pyongyang on Saturday and was en route to Washington.
"We are opposed to all types of terrorism and will never transfer our nuclear material to anyone else," he quoted Paek as saying. "Our nuclear program is solely for our own self-defense."
Harrison also met this week with Kim Yong Nam, the country's No. 2 leader; Vice Foreign Minister Kim Kye Gwan and Lt. Gen. Ri Chan Bok, chief military liaison officer at the Demilitarized Zone on the border with South Korea.
According to Harrison, Kim Yong Nam said North Korea trades in missiles, but would never allow a transfer of nuclear material to al-Qaida or anyone else.
Harrison, a specialist in North Korean affairs, has visited the North six times since the 1980s.

Copyright 2004 Associated Press. All rights reserved.

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Iraqis Want Sovereignty Restored but Welcome U.S. Security Assistance, Iraqi Minister Says

By Edith M. Lederer Associated Press Writer
Published: Apr 26, 2004

UNITED NATIONS (AP) - Iraqis want "complete sovereignty" restored on June 30 but will welcome U.S. assistance for security and will seek additional help through the United Nations, Iraqi Governing Council member Nesreen Berwari said Monday.
Berwari, the minister of public works who was the target of an assassination attempt last month, said Iraqis must take control and make decisions on "day-to-day life," including budgets and "how to move the country politically."
But they will need help with security, stabilization and building democratic institutions, and are seeking such assistance from the United Nations, she said.
"The situation so far doesn't look positive on the readiness of the world to support Iraqi security. The only country who is committed is the United States, and we're going to take that commitment and we welcome others. We need others to take part of it, too," Berwari said.
The shape of an Iraqi interim government expected to take power from the U.S.-led coalition on June 30 is still being formulated with help from U.N. special adviser Lakhdar Brahimi, who is scheduled to brief the Security Council Tuesday on his recent trip to Baghdad.
Brahimi has called for disbanding the 25-member U.S.-picked Governing Council on June 30 and replacing it with a government led by a prime minister, president and two vice presidents.
The council is expected to start debating a new U.N. resolution dealing with the interim government next month, and a number of potentially contentious issues already have emerged, including how much sovereignty that government will have.
Another issue is whether the Security Council will need to authorize the continued presence of the U.S.-led coalition force now in Iraq as well as a new, separate force whose sole job would be to protect returning U.N. staff. The United States recently started soliciting countries to contribute to this U.N. protection force.
"It's very important that the Iraqi people receive complete sovereignty," Berwari said. "What that means is decisions at local level should be done by Iraqi people. National decisions should be done by the national government. There are some issues that the Iraqi people will need support with, like security, like stabilization, and democratization."
But Chile's U.N. Ambassador Heraldo Munoz said that regardless of the name, "there will be limited sovereignty anyhow because this will be a government that will be chosen as part of a political agreement and not as a result of direct elections."
The government's main duty will be to oversee the election process "so Iraqis can vote freely in January," he said.
Berwari said she was "very happy and positive" about the way a caretaker government was being selected. But she added that Iraqis should not have too many expectations about the new government and should focus instead on electing a permanent government in January.
She said the temporary laws adopted by the Governing Council to guide the transition need more details and shouldn't be scrapped or changed as some have suggested, stressing that this would be "a mistake that will cause us time and energy."
The coalition made "mistakes" a year ago in the critical area of security, including delaying giving responsibilities to Iraqis to handle security and disbanding the Iraqi army, Berwari said.

AP-ES-04-26-04 2023EDT


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FBI Agent Says Plastic at Bombing Scene Matched Barrels Found at Terry Nichols Home

By Tim Talley Associated Press Writer
Published: Apr 26, 2004

McALESTER, Okla. (AP) - Charred bits of plastic that fell from the sky after the Oklahoma City bombing are chemically similar to plastic barrels found at the home of Terry Nichols, a federal investigator testified Monday at Nichols' murder trial.
Four of the 55-gallon barrels sat within arms' length of Nichols' jury as FBI agent Richard Buechele, who worked at the agency's crime lab in Washington when the bombing of the federal building occurred, testified about their chemical composition.
Buechele said the plastic shards and the barrels found at Nichols' Kansas home days afterward were both high-density polyethylene plastic.
FBI agent Gregory Carl said investigators found the small pieces of plastic in debris on top of the Journal Record Building, located across a parking lot from the federal building, four days after the bombing.
The April 19, 1995, bombing killed 168 people. The convicted mastermind, Timothy McVeigh, was executed in 2001.
During Monday's testimony, the jury got a close look at wreckage of the truck used in the bombing.
Jurors leaned forward in their chairs and stood to view the twisted and charred parts, including sections of the truck's frame, a 250-pound chunk of the rear axle and pieces of the vehicle's shattered engine.
Nichols, 49, was convicted in 1997 on federal charges in the bombing and was sentenced to life in prison. He is now on trial in Oklahoma state court on murder charges that could bring the death penalty.
Prosecutors have said they expect to rest their case on May 3 or 4.
Nichols' attorneys are expected to put the FBI crime lab itself on trial and argue that the forensic testimony in unreliable because of laboratory contamination and mishandling of evidence.

AP-ES-04-26-04 2033EDT

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>> PROGRESS REPORT?

State could save $150 million from Medicare discount card

HARRISBURG, Pa. (AP) -- The state's prescription-drug program for low-income elderly will save up to $150 million over the next two years from Medicare's new discount drug card program, officials said.
The Pharmaceutical Assistance Contract for the Elderly - or PACE - will automatically enroll about 150,000 recipients who qualify for a discount card sponsored by the program.
"We will save about $150 million between June 2004 and March 31, 2006, on spending of $1 billion," said Tom Snedden, the director of PACE. "That's not bad."
The cards provide percentage discounts on the price of some medications, but the additional feature that stands to benefit PACE is a $600 credit toward purchase of medications for low-income cardholders.
The savings will allow PACE to waive some $6 co-payments that the low-income recipients otherwise pay to the state program. Qualifying individuals make less than $12,569 per year, and couples less than $16,862.
Cards are free to low-income Medicare beneficiaries. While higher-income people can be charged up to $30 per year for a card, Snedden said the state will offer a drug card free to every Pennsylvanian on Medicare.
Gary Miller, a spokesman for the Department of Aging, said PACE officials were not ready to detail those plans, but would do so in the coming days.
Beginning Thursday, the Medicare Web site will provide drug price comparisons and tell Medicare recipients where they can use the various cards. The same information will be available from operators at 1-800-MEDICARE.
Enrollment begins May 3, and the discount cards can be used starting in June. Different pharmacies will accept different cards and companies can start marketing the drug cards in May.
The cards are intended as a temporary measure until prescription drug insurance under Medicare begins in 2006. The Bush administration says Medicare clients who use the cards should save 10 percent to 25 percent off their prescription drug costs. Critics say the percentages will be much lower.
In Pennsylvania, 17 companies plan to offer discount cards that will provide savings through the end of the year. In the last six weeks of the year, Medicare beneficiaries can choose to either renew their cards or select one from a different company for discounts during 2005.

Copyright 2004 Associated Press. All rights reserved.
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Israel Identifies New Hamas Leader

By MARK LAVIE
Associated Press Writer


JERUSALEM (AP) -- Mahmoud Zahar, a 53-year-old Egyptian-trained physician whose son was killed in an Israeli airstrike, was identified by Israel on Monday as the new Hamas leader in the Gaza Strip. Israeli officials signaled he won't be targeted for death if the militant group halts suicide attacks.
Hamas, however, refused to reveal the name of its leader for fear he will be assassinated like his two predecessors.
Late Monday, two Palestinians were killed in an incident near the Mughazi refugee camp in central Gaza. Palestinian security officials said there was an explosion followed by machine gun fire. First reports said the two were killed when a rocket they were setting up exploded prematurely. The Israeli military said it had no forces in the area.
Also Monday, Israeli troops killed a 14-year-old Palestinian boy and seriously wounded a 15-year-old girl near Israeli settlements in Gaza. The girl, described as mentally retarded, had wandered into a restricted area.
The Palestinian attorney general said he would speed up prosecution of dozens of suspected collaborators with Israel and search for those who helped Israel kill Hamas leader Abdel Aziz Rantisi on April 17. Fifty-three alleged informers are in Palestinian custody awaiting trial.
Rantisi, the successor of Hamas founder Sheik Ahmed Yassin, himself assassinated by Israel, had taken extreme precautions, but Israel spotted him when he made a rare visit home and killed him in with a missile attack.
Hamas declared after Rantisi's death that it would not disclose the name of his replacement. However, speculation centered on Zahar - Rantisi's deputy, Yassin's personal physician and for years one of the most visible and uncompromising Hamas spokesmen.
Three Israeli newspapers on Monday identified Zahar as the group's new leader. Several days ago, Zahar told reporters Hamas would not disclose the name of the new leader but did not deny he had the title.
Israel's military chief, Lt. Gen. Moshe Yaalon, told the Yediot Ahronot daily the new Hamas leader had inherited the post "automatically" and reluctantly accepted the position. Yaalon also signaled Israel would avoid attacking him as long as the group remains quiet.
"He doesn't want it, and he is apparently avoiding making decisions, and he is apparently avoiding terrorism," Yaalon said. "Anyone who doesn't use terrorism against us, we do not deal with."
Yaalon did not identify the Hamas leader, but military officials said he was referring to Zahar. The officials said it is impossible to identify the leader with certainty because of Hamas' fluid leadership structure.
Zahar has escaped two Israeli attempts on his life, most recently in September when his eldest son and a bodyguard were killed. Zahar rejects any settlement with Israel and compromise with the Palestinian Authority.
In Washington, the CIA declined to comment on whether Zahar is the new Hamas leader.
In the Gaza violence, a 14-year-old boy was shot in the back by Israeli army fire and died, Palestinian medical workers said. The boy was among several youths who had climbed sand dunes to watch soldiers deployed around the Israeli settlement of Nissanit in northern Gaza.
Witnesses and Palestinian security officials said the boys were about 700 yards from an Israeli watchtower when the teen was killed.
Military officials said soldiers used non-lethal means to disperse stone throwers near a settlement and did not know about a boy who was shot.
Medical workers also said a 15-year-old, mentally handicapped girl was seriously wounded after approaching the Israeli settlement of Morag near the Rafah refugee camp in southern Gaza.
Military officials said soldiers saw a woman running toward the settlement in an area off-limits to Palestinians, assumed she was attacking the settlement and opened fire after she ignored calls to stop and warning shots. They said the settlement has been a frequent target of Palestinian militants.
Morag and the other 20 Jewish settlements in Gaza and Israeli military installations would be removed under Israeli Prime Minister Ariel Sharon's "unilateral disengagement" plan. However, Palestinians suspect Sharon's real agenda is to trade the small settlements in Gaza for a permanent hold on most of the West Bank, where 90 percent of Israeli settlers live.
In an interview Monday on the Al-Arabiya satellite TV channel, former Palestinian Prime Minister Mahmoud Abbas said the Palestinians should not cooperate with the Israeli withdrawal.
He also harshly criticized President Bush, who gave backing to the main points of Sharon's plan.
"America has now no credibility at all," Abbas said.
On Sunday, members of Sharon's Likud Party vote in a referendum on the withdrawal plan. Polls indicate that the outcome will be close.
Interviewed on Israel TV during an independence day broadcast Monday evening, Sharon was confident that by this time next year, "we will be in the midst of disengagement from Gaza. This is good for Israel, good for Israel's security, good for the economy and good for peace, which I believe will come one day."
Copyright 2004 Associated Press. All rights reserved.
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Oily energy promises


By Milton R. Copulos

Burger King says, "Have it your way." But where energy and the environment are concerned, John Kerry goes them one better. He says, "Have it both ways."
Mr. Kerry's promises are certainly impressive. For example:

* Mr. Kerry says he will cut U.S. oil use by 2 million barrels per day by raising the CAFE standard -- the federal government's mandatory fleet fuel efficiency rule for cars and light trucks -- to 36 miles per gallon by 2015.
* He says he will provide $2 billion a year in new incentives for alternative fuels and advanced automotive technologies. He says he will spend $1 billion a year on new "clean coal" technologies and will have the U.S. generate 20 percent of its electricity from renewable sources by 2020.
*And that's not all. He will make "Big Oil" foot the bill.
It all seems too good to be true -- because it is.
Take for example, Mr. Kerry's claim he will eliminate 2 million barrels a day of oil use -- roughly equivalent, he is quick to note, to our Persian Gulf imports -- by improving automobile mileage. For several reasons, the numbers don't compute.
First, most cars on the road in 2015 will be incapable of achieving the 36 mpg Mr. Kerry wants. The median lifespan of automobiles in the U.S. is 16.9 years. This means, at best, only around 16 percent of the fleet would be affected.
Second, Americans have increasingly opted for larger vehicles like SUVs. To achieve Mr. Kerry's target, either enormous gains would be needed on SUV fuel efficiency, or the buying public must forgo the beloved behemoths.
Third, Mr. Kerry does account for growth of the automotive fleet -- the reason oil consumption for transportation has jumped 46.4 percent over the past three decades despite doubled fuel efficiency. Autos are nearly twice as efficient, but there are more than twice as many on the road.
So what's the bottom line?
Assuming Mr. Kerry's target is met, the best we could do is to reduce transportation-sector oil consumption by a little less than 890,000 barrels per day -- assuming no new automobiles or light trucks are added to the fleet.
The math on Mr. Kerry's incentives for new automotive technologies and clean coal is just as wrong. He says he will use oil and gas royalties to pay for his incentives. Unfortunately, they're already spoken for.
In 2003, $150 million in federal oil and gas royalties went to the Historic Preservation Fund. Almost $172 million went to the Indian Tribes. Another $899 million went to the Land and Water Conservation Fund and more than $753 million to the Reclamation Fund. More than $1 billion went to the states.
In some years, there was still enough left in the federal share of royalty income after such payments to underwrite Mr. Kerry's $3 billion in proposed incentives. But in many others, there was not. Moreover, if the federal share of royalty income is diverted from general treasury revenues to other purposes, it would have to be made up from somewhere.
Also, Mr. Kerry insists he will continue restrictions on drilling offshore, in Alaska and in other "environmentally sensitive" areas. He doesn't seem to understand that if you don't drill, there is no oil or gas production to generate royalties.
This contradictory approach to energy and the environment also extends to coal, which Mr. Kerry would promote with incentives while calling for restrictions on carbon emissions that would make burning the fuel difficult if not impossible.
In supporting his claims about shifting to renewable energy for electricity generation, Mr. Kerry proudly points to California, which, he notes, gets more than 13 percent of its electricity from renewable sources. While this is true, the reason is that California is one of the largest consumers of hydroelectric power from the huge federal dam system. Almost 90 percent of its "renewable" electric power generation comes from this source. With geothermal power included, they account for 99.9 percent of California's "renewable" electricity generation.
But geothermal sites are limited, and last I looked no one is building a new Hoover Dam. That leaves wind, solar and biomass. Electricity from these sources, however, is between 2 and 5 times more expensive than conventional technologies. Mr. Kerry doesn't mention that. Nor does he mention routine environmental opposition to wind power projects.
In the final analysis, Mr. Kerry's energy and environmental plan is long on promises, short on practical solutions. It brings to mind an old Wendy's burger slogan: "Where's the beef?"

Milton R. Copulos was a member for 12 years of the National Petroleum Council, the top-level advisory body on oil and gas, and has been an adviser to four energy secretaries.

Investigate the United Nations Oil-for-Food Fraud
by Nile Gardiner, Ph.D., and James Phillips
Backgrounder #1748

April 21, 2004 | |





There is mounting evidence that the United Nations Oil-for-Food program, originally conceived as a means of providing humanitarian aid to the Iraqi people, was subverted by Saddam Hussein's regime and manipulated to help prop up the Iraqi dictator. Saddam's dictatorship was able to siphon off an estimated $10 billion from the Oil-for-Food program through oil smuggling and systematic thievery, by demanding illegal payments from companies buying Iraqi oil, and through kickbacks from those selling goods to Iraq--all under the noses of U.N. bureaucrats. The members of the U.N. staff administering the program have been accused of gross incompetence, mismanagement, and possible complicity with the Iraqi regime in perpetrating the biggest scandal in U.N. history.

The Iraqi Governing Council (IGC) has already started its own investigation into the United Nations' handling of Oil-for-Food, headed by Claude Hankes-Drielsma, a British businessman and political adviser. Hankes-Drielsma has commissioned KPMG International, a private accounting firm, to sift through the mountains of evidence and report its findings. Ambassador L. Paul Bremer, Administrator of the Coalition Provisional Authority (CPA), has instructed all CPA offices to cooperate with the probe and preserve all Oil-for-Food paperwork.

The U.S. Congress has also begun to investigate the Oil-for-Food scam.1 The Senate Foreign Relations Committee held initial hearings on April 7. The House International Relations Committee and the House Subcommittee on National Security, Emerging Threats, and International Relations will also hold hearings.

The hearings, combined with the IGC probe, have prompted U.N. Secretary General Kofi Annan to call for an "independent" inquiry, appointed by Annan himself. He has appointed a three-man commission headed by former U.S. Federal Reserve Chairman Paul Volcker, with South African Judge Richard Goldstone and Swiss lawyer Mark Pieth as the other two members.

While this is a step in the right direction, however, there is no guarantee that this inquiry will be fully independent or impartial. Nor will the commission have the power to bring criminal charges or force U.N. member states to cooperate. It bears all the hallmarks of an elaborate paper tiger with no real teeth.

What is required is a Security Council-appointed investigation mandated by a U.N. resolution, with powers of criminal prosecution. In addition, the Bush Administration should launch its own investigation of the Oil-for-Food program and link it to a sustained U.S.-led campaign to reform the United Nations.

Specifically:

The Security Council should appoint an independent investigation into Oil-for-Food, completely separate from the U.N. bureaucracy and staffed by non-U.N. personnel. Kofi Annan's handpicked commission of inquiry, while led by distinguished figures, lacks real power and credibility. The U.N. Secretary General should not be in a position to select members of a commission investigating allegations against his own organization.
The United States and Great Britain should take the lead by putting forward a U.N. resolution calling for a Security Council-appointed investigation. France and Russia may initially try to block such a resolution, since French and Russian politicians and businessmen have been heavily implicated in the Oil-for-Food scandal. However, the U.S. is likely to gain majority support in the Security Council: France and Russia will find it politically difficult to exercise their veto power.
A leading international accounting firm with no previous ties to the U.N. should be hired to help conduct the investigation, alongside top criminal investigators. Investigators should be drawn from the Federal Bureau of Investigation (FBI), Interpol, Scotland Yard, and other leading criminal investigative units.
If the Security Council investigation recommends that criminal charges be brought against U.N. employees, those identified should be suspended pending resolution of the charges and have their diplomatic immunity waived to permit trial. U.N. officials and individuals implicated with criminal activity in the Oil-for-Food fraud should then be extradited to face trial in Iraq. Since the Iraqi people were the victims of the Oil-for-Food scam, it is appropriate that the Iraqi legal system try to sentence those responsible. If convicted, their U.N. employment should be terminated.
The Bush Administration, backed by Congress, should launch its own separate investigation into the United Nations' handling of the Oil-for-Food program. The United States should call for fundamental reform of the U.N. system, an annual external audit of the world body, and a Security Council-imposed code of conduct for all U.N. employees. Long-term U.S. funding of the United Nations should be made dependent upon widespread and satisfactory reform within the U.N.
History of the Oil-for-Food Program
The Security Council established the Oil-for-Food program in 1995 "as a temporary measure to provide for the humanitarian needs of the Iraqi people" while economic sanctions remained in place.2 Of Iraq's population of 24 million, 60 percent were dependent on food shipments administered through Oil-for-Food.

Oil-for-Food was the United Nations' biggest program anywhere in the world. As Claudia Rosett pointed out in The Wall Street Journal, the U.N. oversaw "a flow of funds averaging at least $15 billion a year, more than five times the U.N.'s core annual budget."3 Oil-for-Food was administered by 10 U.N. agencies employing over 1,000 staff internationally and in New York, as well as 3,000 Iraqi nationals. The U.N. collected a 2.2 percent commission on every barrel of oil sold, generating more than $1 billion in revenue.

Until 2001, all Iraqi oil revenues were held in an escrow account run solely by Banque Nationale de Paris. The money was later kept by several unnamed international banks, all approved by Saddam's regime.

The program was shrouded in secrecy, with little transparency or public accountability. There was no system of external auditing or publishing of accounts. The identity of the banks holding the Iraqi funds was kept secret. Oil-for-Food became a cash cow for the U.N. and a lucrative source of contracts for Russian and French companies. The Times of London calculated that from 1996 to 2003, Russian companies received $7.3 billion of business through Oil-for-Food, and French firms earned $3.7 billion.4

Oil for Corruption
In the 12 months since the fall of the Iraqi dictatorship, a clear picture has emerged of how Saddam Hussein abused the United Nations' Oil-for-Food program. The Iraqi Governing Council has begun to release critical information detailing how, in the words of The New York Times, "Saddam Hussein's government systematically extracted billions of dollars in kickbacks from companies doing business with Iraq, funneling most of the illicit funds through a network of foreign bank accounts in violation of United Nations sanctions." In effect the program was little more than "an open bazaar of payoffs, favoritism and kickbacks."5

Between 1997 and 2002, the Oil-for-Food program generated over $67 billion in revenues for the Iraqi regime. With little U.N. oversight, the Iraqi dictatorship was able to circumvent and exploit the program. It is suspected of selling Iraqi oil at bargain basement prices that benefited numerous middlemen while overpaying for various imports, which rewarded suppliers. The Iraqis then demanded kickbacks from both groups. The program was officially ended in November 2003.

The U.S. General Accounting Office (GAO) estimates that the Saddam Hussein regime generated $10.1 billion in illegal revenues by exploiting the Oil-for-Food program, including $5.7 billion from oil smuggling and $4.4 billion in "illicit surcharges on oil sales and after-sales charges on suppliers."6 The scale of the fraud was far more extensive than the GAO had previously estimated.

According to the GAO, the oil was smuggled by pipeline into Syria, by ship through the Persian Gulf, and by truck across the borders of Turkey and Jordan. Oil purchasers were charged a surcharge of up to 50 cents per oil barrel, with an added commission of 5 percent to 10 percent of the commodity contract. A U.S. Department of Defense study cited by the GAO evaluated 759 contracts administered through the Oil-for-Food program and found that nearly half had been overpriced by an average of 21 percent.7

An International Network of Beneficiaries
Emerging from the evidence is a mosaic of international corruption involving a patchwork of politicians and businesses across the world that benefited from the Oil-for-Food program and helped to keep Hussein in power. The Iraqi Oil Ministry recently released a partial list of beneficiaries: 270 names of individuals, political entities, and companies from across the world who received oil vouchers from Saddam Hussein's regime, allegedly at below-market prices.8

The list includes former French Interior Minister Charles Pasqua, the "director of the Russian President's office," the Russian Communist Party, the Ukraine Communist Party, the Palestine Liberation Organization, the Popular Front for the Liberation of Palestine, the son of Lebanese President Emile Lahud, the son of Syrian Defense Minister Mustafa Tlass, and George Galloway, a British Member of Parliament.

Ominously, the list also implicates U.N. Assistant Secretary General Benon V. Sevan, executive director of the Oil-for-Food program, who has stringently denied any wrongdoing. Sevan, a longtime U.N. bureaucrat with close ties to Kofi Annan, has taken an extended vacation, pending retirement later this month.

Kofi Annan's son Kojo may also be implicated in the mushrooming scandal. Kojo Annan had ties to Cotecna Inspection SA, a Swiss-based company that received a contract for inspecting goods shipped to Iraq under the Oil-for-Food program. The younger Annan worked for Cotecna in the mid-1990s and became a consultant to the company until shortly before it won the Oil-for-Food contract.9 Cotecna, reportedly implicated in earlier bribery scandals, did not disclose this potential conflict of interest, and neither did the United Nations.

France, Russia, and Saddam
No fewer than 46 Russian and 11 French names appear on the Iraqi Oil Ministry list.10 The Russian government is alleged to have received an astonishing $1.36 billion in oil vouchers from Saddam Hussein.

The close ties between French and Russian politicians and the Iraqi regime may have been an important factor in influencing their governments' decision to oppose Hussein's removal from power. They also highlight the close working relationships between Moscow and Baghdad and between Paris and Baghdad, and the huge French and Russian financial interests in pre-liberation Iraq.

Prior to the regime change in April 2003, French and Russian oil companies possessed oil contracts with the Saddam Hussein regime that covered roughly 40 percent of the country's oil wealth. French oil giant Total Fina Elf had won contracts to develop the Majnoon and Nahr Umar oil fields in southern Iraq, which contain an estimated 26 billion barrels of oil (25 percent of Iraq's oil reserves). Russian company Lukoil had won the contract to develop the West Qurna field, also in southern Iraq, which has an estimated 15 billion barrels of oil.11

Political and military ties between Moscow and Baghdad were extensive. Documents found in the bombed-out headquarters of the Mukhabarat (the Iraqi intelligence service under Hussein) reveal the full extent of intelligence cooperation between the Russian and Iraqi governments. According to reports in the London Sunday Telegraph:

Russia provided Saddam Hussein's regime with wide-ranging assistance in the months leading up to the war, including intelligence on private conversations between Tony Blair and other Western leaders. Moscow also provided Saddam with lists of assassins available for "hits" in the West and details of arms deals to neighbouring countries.12
The Russians are also believed to have sold arms to Iraq illegally right up until the outbreak of war with the United States in March 2003. The Bush Administration has accused Russian arms dealers of selling anti-tank guided missiles, electronic jamming equipment, and thousands of night vision goggles to the Iraqis in open violation of U.N. sanctions.13 During Hussein's dictatorship, Russia reportedly provided him with $14 billion worth of arms shipments.14

Evidence has also come to light of intimate political cooperation between Paris and Baghdad in the period leading up to the U.S.-led war against Saddam Hussein. Documents found in the wreckage of the Iraqi Foreign Ministry reveal that "Paris shared with Baghdad the contents of private transatlantic meetings and diplomatic traffic from Washington."15

Officials in the French Foreign Office reportedly shared information with their Iraqi counterparts on a sensitive meeting between former French Foreign Minister Hubert Vedrine and U.S. Secretary of State Colin Powell following the terrorist attacks on September 11. Details of talks between French President Jacques Chirac and President George W. Bush were also reportedly passed on to the Iraqi Foreign Ministry by the French ambassador in Baghdad.

A Security Council Investigation
As the most powerful member of the U.N. Security Council, the United States, together with its closest ally, the United Kingdom, should call for a wide-ranging and in-depth independent investigation into the way in which the U.N. handled the Oil-for-Food program.

The investigation should be appointed by the Security Council but should be completely independent of the United Nations and made up of non-U.N. employees. Great care should be exercised by the United States and Great Britain to prevent such an investigation from being unduly influenced by other Security Council members who may have a vested interest in protecting their own officials.

The Security Council should appoint an international team of special criminal investigators to head the inquiry. They should work alongside a specialist team of auditors drawn from a leading accounting firm without ties to the United Nations. The team of special investigators should be drawn from the FBI, the U.S. Department of Justice, the U.S. Securities and Exchange Commission, and international bodies such as Interpol. Nations that are heavily implicated in the Oil-for-Food scandal should be excluded from contributing investigators.

Prosecution of U.N. Officials in Iraqi Courts
After the handover of power in Iraq on June 30, the Iraqi courts would be the appropriate venue for trying and sentencing individuals found to have been implicated in criminal wrongdoing by a Security Council-appointed investigation. The United Nations should suspend--and, if they are convicted, terminate the employment of--U.N. officials who are alleged to have received kickbacks from the Saddam Hussein regime.

Those charged should be stripped of diplomatic immunity and subject to extradition to Iraq, upon request of the new Iraqi government. The Coalition Provisional Authority should work closely with the Iraqi Governing Council to prepare for possible trials. Anyone convicted should be stripped of all U.N. pension rights.

In addition, the United States should press other governments to extradite their citizens who are guilty of criminal activity related to the Oil-for-Food program so that they may face trial in Iraq.

Reform the United Nations
The Oil-for-Food scandal underlines the need for fundamental reform of the United Nations.16 The investigation into the Oil-for-Food fraud should prompt major reform in how the U.N. is managed and how the United States funds the U.N. A thorough external audit of the United Nations is needed. The U.N. must provide accountability, transparency, and value for money.

Since the creation of the United Nations in 1945, the United States has been the biggest contributor to the U.N. The U.S. currently contributes 22 percent of the U.N.'s regular budget. In contrast, France contributes 6.4 percent, Britain 5.54 percent, China 1.53 percent, and Russia 1.2 percent. Total U.S. contributions to the U.N. system in 2001 totaled $3.5 billion, including $612 million in assessed contributions to the U.N. regular budget, $712 million toward U.N. peacekeeping, and $2.2 billion in voluntary contributions.17

The United States should reconsider its level of U.N. funding and link it directly to the pace of U.N. reform. The Bush Administration should call upon other leading member states, such as France, Russia, and China, to bear a larger share of the financial burden.

What the U.S. Should Do
The U.S. should push for action in 10 areas:

A Security Council resolution. In order to be effective, an independent investigation should be appointed by the Security Council. The U.S. and the U.K. should put forward a joint resolution calling for an exhaustive independent investigation into the Oil-for-Food scandal. France and Russia should be shamed into supporting such a resolution. Washington and London should closely coordinate their strategy at the U.N.
No quid pro quo. The Bush Administration will be under heavy pressure from some Security Council members to back away from calling for a more in-depth investigation in return for a new U.N. resolution supporting U.S.-British plans for the handover of power in Iraq. The United States must stand firm on the Oil-for-Food issue and separate it from the debate on an Iraq resolution.
Opening of U.N. accounts. U.N. Oil-for-Food accounts should be opened to full public scrutiny by private-sector auditors in order to uncover possible financial and other irregularities. Individuals and businesses that profited illegally from the Oil-for-Food program should be held responsible.
Investigation of U.N. officials. Senior U.N. bureaucrats with responsibility for running the Oil-for-Food program should be investigated and held accountable for their actions. In particular, the role played by Benon V. Sevan, executive director of the Office of Iraq Programs, should be carefully scrutinized. All U.N. officials implicated in criminal activity by special investigators should be suspended, stripped of diplomatic immunity, subjected to extradition, and have their employment terminated without pension rights if they are convicted.
Extradition to Iraq. The United States should press the Security Council to recommend waiving diplomatic immunity for certain crimes involving the Oil-for-Food program. The U.S. should also encourage individual governments to extradite to Iraq those of their citizens who have committed crimes relating to the Oil-for-Food program, to the same extent they would extradite citizens for any other serious crime.
The role of Kofi Annan. A Security Council-appointed investigation into Oil-for-Food should examine the Secretary General's role in overseeing the program and his failure to halt the widespread abuse. Annan must bear ultimate responsibility for the program's massive failings. If he is found to have deliberately turned a blind eye to the corruption and criminal activity, the United States should call for his resignation.
U.N. reform. The congressional investigation into Oil-for-Food should act as a catalyst for long-overdue reform of the U.N. system. Future U.S. funding of the United Nations must be dependent on substantial, not cosmetic, reform of the organization. Failure to prosecute U.N. officials implicated in wrongdoing should also result in reduced U.S. funding.
Future sanctions regimes. The mismanagement of the Oil-for-Food program raises serious doubts about the U.N.'s ability to manage future programs of a similar scale. The United Nations should never again administer an international sanctions regime.
A code of conduct for U.N. officials. The Oil-for-Food scandal reinforces the need for the Security Council to impose a code of conduct on U.N. employees. The "anything goes" approach that is pervasive across the U.N. system is unacceptable and should no longer be tolerated.
Limit the role of the U.N. in Iraq. The huge scandal surrounding the U.N.'s handling of the Oil-for-Food program clearly demonstrates that the U.N. cannot be entrusted with a major management role in Iraq. The United States was right to exclude the U.N. from a key role in administering post-war Iraq--the U.N. was clearly incapable of performing such a function. Handing political and military power over to the U.N. in Iraq now would be a huge strategic error.
Conclusion
The abuse of the Oil-for-Food program was the result of a staggering management failure by the United Nations and has raised troubling questions about the U.N.'s credibility and competence. The Oil-for-Food debacle reinforces the need for sweeping reform of the U.N. bureaucracy and the need for an annual external audit of its accounts.

Overall responsibility for one of the biggest financial scandals of modern times should lie with U.N. Secretary General Kofi Annan. The U.N.'s inability to manage the Oil-for-Food program successfully is a spectacular failure of his leadership.

The links between Saddam Hussein's regime and leading European companies and politicians were extensive. The Pentagon was correct to bar companies from countries that had opposed regime change in Iraq, such as France and Russia, from bidding for U.S.-funded contracts for the rebuilding of Iraq. Russian and French companies, in particular, benefited from the exploitation of the Oil-for-Food program.

The Oil-for-Food fiasco reinforces President Bush's point that the U.N. is in danger of becoming an irrelevance on the world stage. The United Nations continues to decline as a credible international force and will go the way of the League of Nations unless it is radically reformed and restructured.

The U.N.'s reputation has been heavily scarred by its handling of the Oil-for-Food program and its failure to support Saddam Hussein's removal from power. The United Nations as an organization will have to work extremely hard in the coming years to mend its battered image and restore the faith of both the Iraqi and American peoples, as well as that of the wider international community.

Nile Gardiner, Ph.D., is Fellow in Anglo-American Security Policy and James Phillips is Research Fellow in Middle Eastern Studies in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. The authors are grateful to Heritage Research Fellow Brett Schaefer for his advice and recommendations.


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1. For background, see Nile Gardiner, Ph.D., and James Phillips, "The UN Oil for Food Scam: Time for Hearings," Heritage Foundation WebMemo No. 438, March 1, 2004, at www.heritage.org/Research/InternationalOrganizations/wm438.cfm.

2. U.N. Security Council Resolution 986, April 14, 1995, at daccess-ods.un.org/TMP/6252784.html.

3. Claudia Rosett, "Oil, Food and a Whole Lot of Questions," The New York Times, April 18, 2003, at www.defenddemocracy.org/in_the_media/in_the_media_show.htm?doc_id=218141.

4. James Bone, "Saddam's Billions from Oil for Food Corruption," The Times (London), April 23, 2003.

5. See Susan Sachs, "Hussein's Regime Skimmed Billions from Aid Program," The New York Times, February 29, 2004, at www.nytimes.com/2004/02/29/international/middleeast/29FOOD.html.

6. Joseph A. Christoff and Davi M. D'Agostino, "Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and Challenges," testimony before the Subcommittee on Oversight and Investigations, Committee on Financial Services, U.S. House of Representatives, March 18, 2004, at www.gao.gov/highlights/d04579thigh.pdf.

7. Ibid.

8. The names were published in January in the Arabic Iraqi newspaper Al Mada and subsequently reported on in Therese Raphael, "Saddam's Global Payroll," The Wall Street Journal, February 9, 2004.

9. Claudia Rosett, "Turtle Bay's Carnival of Corruption: Digging Deeper into the Scandalous Oil for Food Program," National Review, March 21, 2004, at www.nationalreview.com/comment/rosett200403212155.asp.

10. For a full list of names by nationality, see Dr. Nimrod Raphaeli, The Saddam Oil Vouchers Affair, Middle East Media Research Institute, February 20, 2004, at memri.org/bin/opener.cgi?Page=archives&ID=IA16404.

11. See Carrie Satterlee, "Facts on Who Benefits from Keeping Saddam Hussein in Power," Heritage Foundation WebMemo No. 217, February 28, 2003, at www.heritage.org/Research/MiddleEast/wm217.cfm.

12. David Harrison, "Revealed: Russia Spied on Blair for Saddam," The Sunday Telegraph (London), April 13, 2003, at www.telegraph. co.uk/news/main.jhtml?xml=/news/2003/04/13/wrus13.xml.

13. Peter Slevin, "3 Russian Firms' Deals Anger U.S.," The Washington Post, March 23, 2003, at www.washingtonpost.com/ac2/wp-dyn/ A13057-2003Mar23.

14. Harrison, "Revealed: Russia Spied."

15. Matthew Campbell, "Dossier Reveals France Briefed Iraq on U.S. Plans," The Sunday Times (London), April 27, 2003.

16. For information on the issue of U.N. reform, see Nile Gardiner and Baker Spring, "Reform the United Nations," Heritage Foundation Backgrounder No. 1700, October 27, 2003, at www.heritage.org/Research/InternationalOrganizations/BG-1700.cfm.

17. Figures cited in Vita Bite, UN System Funding: Congressional Issues, Congressional Research Service, September 10, 2003. Voluntary contributions go toward specialist U.N. programs such as the United Nations Children's Fund and the United Nations Development Program.



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The United Nations Oil for Food Fraud: How the U.S. Should Respond
by Nile Gardiner, Ph.D.
Testimony

April 21, 2004 | printer-friendly format |





Statement of Nile Gardiner, Ph.D.,[1]Fellow in Anglo-American Security Policy at The Heritage Foundation[2], to the House Committee on Government Reform, Subcommittee on National Security, Emerging Threats, and International Relations, on April 21, 2004



There is mounting evidence that the United Nations Oil for Food program, originally conceived as a means of providing humanitarian aid to the Iraqi people, was subverted by Saddam Hussein's regime and manipulated to help prop up the Iraqi dictator. Saddam's dictatorship was able to siphon off an estimated ten billion dollars from the Oil for Food program through oil smuggling and systematic thievery, by demanding illegal payments from companies buying Iraqi oil and through kickbacks from those selling goods to Iraq, all under the noses of UN bureaucrats. The UN staff administering the program are accused of gross incompetence, mismanagement, and possible complicity in allowing the Iraqi regime to perpetrate the biggest scandal in UN history.



The Iraqi Governing Council (IGC) has already appointed its own investigation into the United Nations' handling of Oil for Food, headed by Claude Hankes-Drielsma, a British businessman and political adviser. Hankes-Drielsma has commissioned the private accounting firm KPMG International to sift through mountains of evidence and write a report summarizing its findings. Ambassador L. Paul Bremer, the Administrator of the Coalition Provisional Authority (CPA), has instructed all offices of the occupying authority to cooperate with the probe and preserve all paperwork related to the Oil for Food program.



Congress has also begun to investigate the Oil for Food Scam[3], with initial hearings held by the Senate Foreign Relations Committee on April 7. Further hearings are being held by the House International Relations Committee and the House Subcommittee on National Security, Emerging Threats and International Relations.



The hearings, combined with the IGC probe, have prompted UN Secretary General Kofi Annan to call for an `independent' inquiry, appointed personally by Annan himself. The three-man commission is to be headed by former United States Federal Reserve Chairman Paul Volcker, who will be joined by South African Judge Richard Goldstone, and Swiss lawyer Mark Pieth. While this is a step in the right direction, there is no guarantee that this inquiry will be fully independent or impartial. Nor does it possess the power to press criminal charges or force the cooperation of UN member states. It bears all the hallmarks of an elaborate paper tiger with no real teeth.



What is required is a Security Council-appointed investigation mandated by a UN resolution, with powers of criminal prosecution. In addition, the Bush Administration should launch its own investigation into the Oil for Food program, and link it to a sustained U.S.-led campaign to reform the United Nations.

An independent investigation into Oil for Food must be appointed by the Security Council, and be completely independent of the UN bureaucracy, and staffed by non-UN personnel. Kofi Annan's hand-picked commission of inquiry, while led by distinguished figures, lacks real power and credibility. The UN Secretary General should not be in a position to select members of a commission investigating allegations against his own organization.
The United States and Great Britain should take the lead by putting forward a UN resolution calling for a Security Council-appointed investigation. France and Russia may initially try to block such a resolution, as politicians and businessmen from both nations are heavily implicated in the Oil for Food scandal. The U.S. is though likely to gain majority support in the Security Council, and Paris and Moscow will find it politically difficult to exercise their veto power.
A leading international accounting firm with no previous ties to the UN should be hired to help conduct the investigation, alongside top criminal investigators. Investigators should be drawn from the FBI, Interpol, Scotland Yard and other leading criminal investigative units.
If the Security Council investigation recommends that criminal charges be brought against UN employees, those identified should be suspended pending resolution of the charges and have their diplomatic immunity waived to permit trial. UN officials and individuals alleged by the investigation to have participated in criminal activity in relation to Oil for Food should then be extradited to face trial in Iraq. As the Iraqi people were the victims of the ruthless exploitation of the Oil for Food program, it is appropriate that the Iraqi legal system try and sentence those responsible. If convicted they should also have their UN employment terminated.
The Bush Administration, backed by Congress, should launch its own separate investigation into the United Nations' handling of the Oil for Food program. The United States should call for fundamental reform of the UN system, an annual external audit of the world body, and a Security Council-imposed code of conduct for all UN employees. Long-term U.S. funding of the United Nations should be made dependent upon widespread and satisfactory reform within the UN.
History of the Oil for Food Program

The Oil for Food program was established by the United Nations Security Council through Security Council Resolution 986 in 1995 "as a temporary measure to provide for the humanitarian needs of the Iraqi people" while economic sanctions remained in place. Of Iraq's population of 24 million, 60 percent were dependent on food shipments administered through Oil for Food.



Oil for Food was the United Nations' biggest program anywhere in the world. As Claudia Rosett pointed out in The Wall Street Journal, the UN oversaw "a flow of funds averaging at least $15 billion a year, more than five times the UN's core annual budget."[4] Oil for Food was administered by 10 UN agencies employing over 1,000 staff internationally and in New York, as well as 3,000 Iraqi nationals. The UN collected a 2.2 percent commission on every barrel of oil sold, generating more than $1 billion in revenue.



Until 2001, all Iraqi oil revenues were held in an escrow account run solely by Banque Nationale de Paris. The money was later kept by several unnamed international banks, all approved by Saddam's regime. The program was shrouded in a veil of secrecy, with little transparency or public accountability. There was no system of external auditing or publishing of accounts. The identity of the banks holding the Iraqi funds was kept secret. Oil for Food became a cash cow for the UN and a lucrative source of contracts for Russian and French companies. The Times of London has calculated that over the period 1996 to 2003, Russian companies received $7.3 billion of business through Oil for Food; French firms earned $3.7 billion.[5]



Oil for Corruption

In the twelve months since the downfall of the Iraqi dictatorship, a clearer picture has emerged of how Saddam Hussein abused the United Nations Oil for Food program. The Iraqi Governing Council has begun to release critical information detailing how, in the words of The New York Times, "Saddam Hussein's government systematically extracted billions of dollars in kickbacks from companies doing business with Iraq, funneling most of the illicit funds through a network of foreign bank accounts in violation of United Nations sanctions." In effect the program was little more than "an open bazaar of payoffs, favoritism and kickbacks."[6]



Between 1997 and 2002, the Oil for Food program generated over $67 billion in revenues for the Iraqi regime. With little oversight from the UN, the Iraqi dictatorship was able both to circumvent and to exploit the Oil for Food program. It is suspected of selling its oil at bargain basement prices that benefited numerous middlemen while overpaying for various imports, which allowed it to reward suppliers. The Iraqis then demanded kickbacks from both groups. The program was officially brought to an end in November 2003.



The General Accounting Office (GAO) estimates that the Saddam Hussein regime generated $10.1 billion in illegal revenues by exploiting the Oil for Food program. This figure includes $5.7 billion from oil smuggling, and $4.4 billion in "illicit surcharges on oil sales and after-sales charges on suppliers."[7] The scale of the fraud was far more extensive than the GAO had previously estimated.



According to the GAO, the oil was smuggled by pipeline into Syria, by ship through the Persian Gulf, and by truck across the borders of Turkey and Jordan. Oil purchasers were charged a surcharge of up to 50 cents per oil barrel, with an added commission of 5 to 10 per cent of the commodity contract. A Department of Defense study cited by the GAO evaluated 759 contracts administered through the Oil for Food program, and found that nearly half had been overpriced, by an average of 21 percent.[8]


An International Network of Beneficiaries
A mosaic of international corruption is emerging in the patchwork of politicians and businesses across the world that benefited from the Oil-for-Food program and helped keep Saddam Hussein in power. The Iraqi Oil Ministry recently released a partially complete list of 270 names of individuals, political entities and companies from across the world who received oil vouchers from Saddam Hussein's regime, allegedly at below-market prices. [9]

The list of beneficiaries includes former French Interior Minister Charles Pasqua, the "director of the Russian President's office", the Russian Communist Party, the Ukraine Communist Party, the Palestine Liberation Organization (PLO), the Popular Front for the Liberation of Palestine, the son of Lebanese President EmileLahud, the son of Syrian Defense Minister Mustafa Tlass, and George Galloway, a British Member of Parliament. Ominously, the list also implicates UN Assistant Secretary-General Benon V. Sevan, executive director of the Oil for Food program, who has stringently denied any wrongdoing. Sevan, a longtime UN bureaucrat with close ties to Kofi Annan, has taken an extended vacation, pending retirement later this month.

Kofi Annan's son Kojo also may be implicated in the mushrooming scandal. Kojo Annan had ties to Cotecna Inspection SA, a Swiss-based company that received a contract for inspecting goods shipped to Iraq under the Oil for Food program. The younger Annan worked for Cotecna in the mid 1990's and became a consultant to the company until shortly before it won the Oil for Food contract.[10] Cotecna, which reportedly had been implicated in earlier bribery scandals, did not disclose this potential conflict of interest, and nor did the United Nations.



Russia, France, and Saddam

No less than 46 Russian and 11 French names appear on the Iraqi Oil Ministry list.[11]The Russian State is alleged to have received an astonishing $1.36 billion in oil vouchers from Saddam Hussein.

The close ties between French and Russian politicians and the Iraqi regime may well have been an important factor in influencing their governments' decision to oppose the removal of Saddam Hussein from power. They also highlight the close working relationship between Moscow, Paris and Baghdad, and the huge financial interests which both France and Russia maintained in pre-liberation Iraq.

Prior to the regime change in Baghdad in April 2003, French and Russian oil companies possessed oil contracts with the Saddam Hussein regime which covered roughly 40 percent of the country's oil wealth. French oil giant Total Fina Elf had won contracts to develop southern Iraq's Majnoon and Nahr Umar oil fields, estimated to contain 26 billion barrels of oil, or 25 percent of Iraq's oil reserves. Russian company Lukoil had won the contract to develop the West Qurna field, also in southern Iraq, containing an estimated 15 billion barrels of oil.[12]

Political and military ties between Moscow and Baghdad were extensive. Documents found in the bombed-out headquarters of the former Iraqi intelligence service (Mukhabarat) in Baghdad reveal the full extent of intelligence co-operation between the Russian and Iraqi governments. According to reports in the London Sunday Telegraph, "Russia provided Saddam Hussein's regime with wide-ranging assistance in the months leading up to the war, including intelligence on private conversations between Tony Blair and other Western leaders. Moscow also provided Saddam with lists of assassins available for `hits' in the West and details of arms deals to neighbouring countries."[13]

The Russians are also believed to have illegally sold arms to Iraq right up until the outbreak of war with the United States in March 2003. The Bush Administration accused Russian arms dealers of selling thousands of night vision goggles, as well as anti-tank guided missiles and electronic jamming equipment to the Iraqis in open violation of UN sanctions.[14] During the course of his dictatorship, Russia reportedly provided Saddam with $14 billion worth of arms shipments.[15]

Evidence has also come to light of intimate political co-operation between Paris and Baghdad in the period leading up to the U.S.-led war against Saddam Hussein. Documents found in the wreckage of the Iraqi foreign ministry in the aftermath of the liberation of Iraq, and reported on by the London Sunday Times, reveal that "Paris shared with Baghdad the contents of private transatlantic meetings and diplomatic traffic from Washington." Officials in the French Foreign Office reportedly shared information with their Iraqi counterparts on a sensitive meeting between former French foreign minister Hubert Vedrine and U.S. Secretary of State Colin Powell following the terrorist attacks on September 11. Details of talks between French President Jacques Chirac and President George W. Bush were also reportedly passed on to the Iraqi foreign ministry by the French ambassador in Baghdad.[16]



A Security Council Investigation

As the most powerful member of the UN Security Council, the United States, together with its closest ally, the United Kingdom, should call for a wide-ranging and in-depth independent investigation into the way in which the UN handled the Oil for Food program.



The investigation should be appointed by the Security Council, but should be completely independent of the United Nations and made up of non-UN employees. Great care should be exercised by the United States and Great Britain to prevent such an investigation from being unduly influenced by other Security Council members who may have a vested interest in protecting their own officials.



The Security Council should appoint an international team of special criminal investigators to head the inquiry. They should work alongside a specialist team of auditors, drawn from a leading accounting firm without ties to the United Nations.



The team of special investigators should be drawn from the Federal Bureau of Investigation (FBI), the United States Department of Justice, and the U.S. Securities and Exchange Commission (SEC), as well as international bodies such as Interpol. Nations who are heavily implicated in the Oil for Food scandal should be excluded from contributing investigators.



Prosecution of UN Officials in Iraqi Courts

After the handover of power takes place in Iraq on June 30,the Iraqi courts should be the appropriate venue for trying and sentencing those individuals found guilty of criminal wrongdoing by a Security Council appointed investigation.



The United Nations should suspend (and if convicted, terminate) the employment of its officials who are alleged to have received kickbacks from the Saddam Hussein regime. Those charged should be stripped of diplomatic immunity and be subject to extradition to Iraq, should the new Iraqi government request it. The Coalition Provisional Authority should work closely with the Iraqi Governing Council to prepare for possible trials. Anyone convicted should be stripped of all pension rights



The United States should press other governments to extradite their citizens who are guilty of criminal activity related to the Oil for Food program, to face trial in Iraq.



Reform the United Nations

The Oil for Food scandal underlines the need for fundamental reform of the United Nations.[17] The investigation into the Oil for Food fraud should prompt major reform in terms of how the UN is managed, and how the United States funds the UN. A thorough external audit of the United Nations is needed. The UN must provide accountability, transparency and value for money.



No nation in the world contributes more to the work of the United Nations than the United States. Since its creation in 1945, the United States has been the world's biggest contributor to the United Nations. The U.S. currently contributes 22 percent of the UN's regular budget. In contrast, France contributes 6.4 percent, Britain 5.54 percent, China 1.53 percent, and Russia 1.2 percent. Total U.S. contributions to the UN system in 2001 totaled $3.5 billion, including $612 million in assessed contributions to the UN regular budget, $712 million towards UN peacekeeping, and $2.2 billion in voluntary contributions.[18]



The United States should reconsider its level of funding for the United Nations, and link it directly to the pace of UN reform. The Bush Administration should call upon other leading member states, such as France, Russia and China, to make a greater contribution to the UN budget, with a larger share of the financial burden.



Key Recommendations

A Security Council Resolution
In order to be effective, an independent investigation should be appointed by the Security Council. The U.S. and UK should put forward a joint resolution calling for an exhaustive investigation into the Oil for Food scandal. France and Russia should be shamed into supporting such a resolution. Washington and London should closely coordinate their strategy at the UN.
No Quid Pro Quo
The Bush Administration will be under heavy pressure from some Security Council Members to back away from calling for a more in-depth investigation in return for a new UN resolution supporting U.S.-British plans for the handover of power in Iraq. The United States must stand firm on the Oil for Food issue, and separate it from the debates over an Iraq resolution.
Opening of UN Accounts
UN Oil for Food accounts should be opened to full public scrutiny by private sector auditors in order to uncover possible financial and other irregularities. Measures should be taken against individuals and businesses that illegally profited from the Oil for Food program.
Investigation of UN Officials
Senior UN bureaucrats with responsibility for running the Oil for Food program should be investigated and held accountable for their actions. In particular, the role played by Benon V. Sevan, executive director of the Office of Iraq Programs, should be carefully scrutinized. All UN officials found to be involved in criminal activity by special investigators should be suspended from employment from the world body, stripped of diplomatic immunity, subject to extradition and, if convicted, have their employment terminated without pension rights.
Extradition to Iraq
The United States should press the Security Council to extradite UN officials found guilty of criminal wrongdoing to face trial in Iraq. The U.S. should also encourage individual governments to extradite to Iraq those of their citizens charged with crimes relating to the Oil for Food program.
The Role of Kofi Annan
A Security Council-appointed investigation into Oil for Food should examine the role played by the UN Secretary General in overseeing the program, and his failure to halt its widespread abuse. Mr. Annan must bear ultimate responsibility for the program's massive failings. The United States should call for Annan to step down from his post if he is found to have deliberately turned a blind eye to corruption and criminal activity.
UN Reform
The Congressional investigation into Oil for Food should act as a catalyst for long-overdue reform of the UN system. Future U.S. funding of the United Nations must be dependent upon substantial, not cosmetic, reform of the organization. Failure to prosecute UN officials found guilty of wrongdoing should also result in a potential reduction in U.S. funding.
Future Sanctions Regimes
The mismanagement of the Oil for Food program raises serious doubts about the UN's ability to manage future programs of a similar scale. The United Nations should never again be placed in charge of the administration of an international sanctions regime.
A Code of Conduct for UN Officials
The Oil for Food scandal reinforces the need for a Security Council imposed code of conduct for UN employees. The `anything goes' approach which is pervasive across the UN system is unacceptable and should no longer be tolerated.
Limit the Role of the UN in Iraq
The huge scandal surrounding the UN's handling of the Iraq Oil for Food program demonstrates clearly that the world body cannot be entrusted with a major management role in Iraq. The United States was right to exclude the UN from a key role in administering post-war Iraq - the UN was clearly incapable of performing such a function. A handover of political and military power to the United Nations would be a strategic disaster.
Conclusion

The abuse of the Oil-for-Food program was the result of a staggering management failure on the part of the United Nations and has raised troubling questions about the credibility and competence of the world organization. The Oil for Food debacle reinforces the need for sweeping reform of the United Nations bureaucracy and the need for an annual external audit of its accounts.



Overall responsibility for the program's failure should lie with UN Secretary General Kofi Annan, who allegedly turned a blind eye to one of the biggest financial scandals of modern times. The UN's inability to successfully manage the Oil for Food program represents a spectacular failure of leadership on the part of Mr. Annan.



The links between Saddam Hussein's regime and leading European companies and politicians were extensive. A huge part of Saddam's strategy for staying in power involved the bribing of European political and business entities. The Pentagon was correct in its decision to bar companies from nations who had opposed regime change in Iraq, such as France and Russia, from bidding for U.S.-funded contracts for the rebuilding of Iraq. Russian and French companies in particular benefited from the exploitation of the Oil for Food program.



The Oil for Food fiasco reinforces the point made by President Bush that the UN is in danger of becoming an irrelevance on the world stage. The United Nations continues to slowly decline as a credible international force, and will go the same way as the League of Nations unless it is radically reformed and restructured.



The UN's credibility as a global institution has been heavily scarred by both its handling of the Oil for Food program and by its failure to support the removal of Saddam Hussein from power. The United Nations as an organization will have to work extremely hard in the coming years to mend its battered image, and restore the faith of both the Iraqi and American people, as well as that of the wider `international community'.



Nile Gardiner, Ph.D., is Fellow in Anglo-American Security Policy at The Heritage Foundation.

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[1]The author is grateful to Heritage Foundation Research Fellows James Phillips, Paul Rosenzweig and Brett Schaefer for their advice and suggestions.



[2]The Heritage Foundation is a public policy, research, and educational organization operating under Section 501(C)(3). It is privately supported, and receives no funds from any government at any level, nor does it perform any government or other contract work. Members of The Heritage Foundation staff testify as individuals discussing their own independent research. The views expressed are their own, and do not reflect an institutional position for The Heritage Foundation or its board of trustees.



[3] For background, see Nile Gardiner, Ph.D., and James Phillips, The UN Oil for Food Scam: Time For Hearings, Heritage Foundation WebMemo No. 438, March 1, 2004. http://www.heritage.org/Research/InternationalOrganizations/ wm438.cfm



[4]Claudia Rosett, `Oil, Food and a Whole Lot of Questions', The New York Times, April 18, 2003.

http://www.defenddemocracy.org/in_the_media/ in_the_media_show.htm?doc_id=218141



[5] James Bone, `Saddam's Billions From Oil for Food Corruption', The Times of London, April 23, 2003.



[6]See Susan Sachs, `Hussein's Regime Skimmed Billions From Aid Program', The New York Times, February 29, 2004.http://www.nytimes.com/2004/02/29/international/ middleeast/29FOOD.html



[7]United States General Accounting Office, Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and Challenges, Testimony before the Subcommittee on Oversight and Investigations, Committee on Financial Services, House of Representatives, by Joseph A. Christoff and Davi M. D'Agostino, March 18, 2004. http://www.gao.gov/highlights/d04579thigh.pdf



[8] Ibid.



[9]The names were published in January in the Arabic Iraqi newspaper Al Mada.



[10] Claudia Rosett, `Turtle Bay's Carnival of Corruption: Digging Deeper Into the Scandalous Oil for Food Program,' National Review, March 21, 2004. http://www.nationalreview.com/comment/ rosett200403212155.asp



[11] For a full list of names by nationality, see Dr. Nimrod Raphaeli, The Saddam Oil Vouchers Affair, The Middle East Media Research Institute, February 20, 2004.

http://memri.org/bin/opener.cgi?Page=archives&ID=IA16404



[12] See Carrie Satterlee, Facts on Who Benefits From Keeping Saddam Hussein in Power, Heritage Foundation WebMemo No. 217, February 28, 2003. http://www.heritage.org/Research/MiddleEast/wm217.cfm



[13] David Harrison, `Revealed: Russia Spied on Blair for Saddam', The London Sunday Telegraph, April 13, 2003. http://www.telegraph.co.uk/news/main.jhtml?xml=/news /2003/04/13/wrus13.xml



[14] Peter Slevin, `3 Russian Firms' Deals Anger U.S.', The Washington Post, March 23, 2003.

http://www.washingtonpost.com/ac2/wp-dyn/A13057-2003Mar23



[15] Harrison, `Revealed: Russia Spied on Blair for Saddam'



[16] Matthew Campbell, `Dossier Reveals France Briefed Iraq on U.S. Plans', The London Sunday Times, April 27, 2003.



[17] For information on the issue of UN reform, see Nile Gardiner and Baker Spring, Reform the United Nations, Heritage Foundation Backgrounder No. 1700, October 27, 2003.

http://www.heritage.org/Research/InternationalOrganizations/ BG-1700.cfm



[18]Figures cited by Vita Bite in UN System Funding: Congressional Issues, Congressional Research Service, September 10, 2003. Voluntary contributions go towards specialist UN programs such as the United Nations Children's Fund (UNICEF) and the United Nations Development Program (UNDP)


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