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Russian Pipelines: Back to the Future?
Edward C Chow. Georgetown Journal of International Affairs. Washington: Winter 2004. Vol. 5, Iss. 1; pg. 27, 7 pgs
Abstract (Article Summary)
Chow argues that the path Russia takes in developing its pipelines will reflect its broader economic and political choices for the future. He describes that the country's long term economic significance lies in the integration of its population of 145 million into the world market and its potential as a progressive force in the in the economic integration of its neighbors from the former Soviet Union into the global system.

Full Text (3355 words)
Copyright Edmund A. Walsh School of Foreign Service Winter 2004



In Soviet mythology, the health of the country's economy, national power, and influence in the world are directly linked to the performance of its oil and gas industry. It is ironic, then, that peak oil and gas production in the U.S.S.R. was reached in the late 1980s just as economic collapse brought political disintegration. At the time, the Soviet Union was the biggest oil producer in the world, generating 12 million barrels per day, 11 million in Russia alone. Peak consumption at this time was over 8 million barrels per day in the Soviet Union and 5 million barrels per day in Russia. Considerable volumes of crude oil and petroleum products were exported by the Soviet Union, first to other countries in the Eastern Bloc, and then approximately 3 million barrels per day to those outside of the Comecon.1 Oil and gas were part of the important barter trade in the Communist block and provided economic leverage for Russia in maintaining cohesion of the sphere. Moreover, they served as principal sources of hard currency and geopolitical assets in the Soviet Union's relationship with the outside world.

Given the remote location of many Russian production fields, pipelines have always played a critical role in transporting oil and gas. The construction of a vast system of pipelines was often cited as a crowning achievement of the Soviet oil and gas industry. They were designed to move production primarily within the Soviet Union and Eastern Europe and secondarily for export to the West.

Today's Russia inherited from the U.S.S.R. 46,000 km of these crude oil pipelines, 15,000 km of petroleum product pipelines, and 152,000 km of natural gas pipelines, almost all of which are still owned and controlled by the state. By contrast, the United States, with only 55 percent of Russia's land mass, has over four times more oil pipelines and two times more natural gas pipelines, almost none of which are owned or controlled by the government.2

The Russian oil industry privatized and modernized throughout the mid-1990s. A more competitive cost structure after the ruble collapse of 1998, improved property rights protection leading to greater reinvestment, and the introduction of Western technology and business practice allowed Russian oil production to recover from a low of 6 million barrels per day to nearly 8 million barrels per day. This is still far below the level achieved in the peak production year of 1988. Nevertheless, domestic oil consumption has dropped to only about 21A million barrels per day with lower economic activity and better energy efficiency. As a result, much more oil is being exported today, and Russia has become the second largest oil exporter in the world after Saudi Arabia.3

Russian oil production is forecast to maintain this rapid growth while domestic consumption is expected to be relatively flat in spite of better economic performance. The existing pipeline system was, however, designed to move oil to now diminished domestic markets and less desirable markets in Eastern Europe. Thus, Russia is desperately in need of new export facilities-large-diameter pipelines and deep-water marine terminals-to transport increasing volumes of oil to higher-value world markets in the large ocean-going tankers favored in international trade. Otherwise, both the performance of its petroleum industry, which has been the growth engine for the Russian economy in recent years, and its ambitions of playing a larger role in world oil trade will suffer.

In order to harness the potential of its energy sector and capture new markets, three key projects on the drawing board are being discussed widely. These include new pipelines to Murmansk, to Daqing in northeast China, and to Nakhodka on Russia's Pacific Coast. The way in which Russia handles these pipelines and its petroleum resources will signal the likely direction in which its uncertain economic future will unfold.

Multiple Pipelines: The Answer?

November 2002 saw an unprecedented display of unity by usually-competitive oligarchs. The four heads of Russia's major private oil companies announced an agreement to build a pipeline from their booming oilfields in West Siberia (and high-potential fields elsewhere) to the arctic port of Murmansk on the Barents Sea. From Murmansk, crude oil (and perhaps one day oil products and liquefied natural gas) would go to markets primarily in the United States and Europe. Only a year old and still unproven by rigorous commercial evaluation, the Murmansk pipeline proposal has already come to represent a number of trends in Russia, including its economic and political transition, and integration with the world.

Fundamentally, Murmansk is a milestone that challenges Russia to make critical decisions that will permanently shape the relationship between the state and the economy. For example, it raises questions of whether it is better to maintain strong elements of central planning and control by expending public effort and scarce financial resources to manage the allocation of economic resources (such as pipeline capacity or upstream petroleum investment), when the private sector is perfectly capable of doing so efficiently. Or should Russia leapfrog these vestiges of the Soviet era and adopt the proven international market economic model? Indeed, the public can entrust the private sector to conduct business while "controlling" the private sector through taxes, fair regulation, and publicly enacted legislation rather than through state owner-ship and intrusive state planning. Another issue is whether expanding production to seize greater oil market share is sustainable in the face of weak world demand growth and a disciplined OPEC-a possible recipe for confrontation. And finally, it is not clear that Russia's own public institutions are capable of transforming fast enough to live by the international model. Can they capture only the economic rent necessary to provide for the public welfare and defense while celebrating "useful greed" rather than ostracizing businessmen that make a lot of money?

Yet, that unique moment of cooperation in November 2OO2, followed by the merger of TNK and BP in Russia and the news of a potential merger between YukosSibneft and a major U.S. oil company, marked the threshold of something new: the possible end of the post-Soviet scrap for assets, and a new era marked by business cooperation in which the whole is greater than sum of the parts, with a true and concrete partnership with the United States and Europe at the heart of Russia's key industry. From Murmansk to Nakhodka on the Pacific Coast, and Samara to Novorossiysk on the Black Sea, to the refineries of America, Europe, and Asia, and the hallways of decision-making in the Persian Gulf and OPEG headquarters in Vienna, people are waiting for President Putin's decisions on how to cross this threshold.

Central Planning: Last Throes or Retrenchment? In October, Minister of Energy Yusufov made some economically-bizarre statements about the Far Eastern pipelines and Murmansk in calling for a Nakhodka pipeline before any consideration of either a Daqing pipeline or even a Murmansk pipeline, which, he claimed, could at best be considered simultaneously with one in Nakhodka. In the same interview, he claimed that "Murmansk will definitely develop... [but] we should do it in stages." he noted that the uncertainty over which pipeline would obtain political approval was the result of a "need to assess the balance of our supplies to the international and the domestic markets." Moreover, he claimed that a Japanese offer to commit to one million barrels per day of oil imports from Nakhodka to help finance the line is actually unnecessary, given the wide array of potential customers in the Pacific Basin.4 Yet, the state-run oil pipeline monopoly Transneft excuses the delay of the Murmansk line by citing the need for the United States to commit to volume purchases from the pipeline even though any port serving the Atlantic basin would have an equally broad market at its disposal.

The Nakhodka proposal and the Murmansk initiative are two entirely different creatures-any state effort evaluating the merits of Nakhodka versus Daqing cannot provide a guide in comparing Nakhodka and Murmansk. For example, the private Russian companies have pledged publicly up to 3 million barrels per day of crude oil to the Murmansk line from their future growing production in West Siberia and the Timan Pechora region. No one has pledged any oil from anywhere to the Nakhodka line. Additionally, the private companies are now prepared to finance Murmansk, but everyone, even the government, agrees there are not enough resources in the eastern half of Russia to commercially guarantee throughput for the line to Nakhodka. And while five private sector companies are clamoring for Murmansk (with several more Russian and international ones in the wings), absolutely no private companies are yet backing Nakhodka.

This is all a rather sad reminder that Russia remains committed significantly to some degree of central planning. Indeed, these pronouncements come just as the Murmansk and Daqing pipelines were about to emerge as the first major post-Soviet examples of the state allowing the private energy companies to allocate their economic resources as the market dictates, while paying their dues through taxes and obedience to regulatory and legislative authority.

Japan Inc., the Manchurian Candidate, Eastern Supporters. Japan has offered to finance the Nakhodka line up to $5 billion, with another $2 billion for exploration of East Siberian resources to fill the line. As justification for a willingness to commit such huge sums from a beleaguered Japanese economy in such an undeveloped idea, Japanese officials claim that diversification of supplies is paramount for the future of the Japanese economy.

But this argument is highly suspect, for a number of reasons. First, since Japan has a huge economy concentrated on relatively small islands it has already ideal diversity of supply-they can buy from anyone in the world by tanker. If Japan thinks Russian supplies from Nakhodka will somehow be lower priced than competing supplies arriving by ship, it should rethink the numbers: A simple net present value calculation coupled with reasonable assumptions about demand growth in Japan indicates that $5 billion of Japanese money spent today on a pipeline would add about $2/barrel to every imported barrel the country consumes for the next 40 years. Put another way, if it does not invest $5 billion in Nakhodka, Japan could afford to pay a $2/barrel premium for every barrel to give it a competitive edge against every other oil consumer on the market, and still come out even.

In fact, their prices would arguably be lower because Middle Eastern crude oil, otherwise destined for China, would be seeking other Asian markets if some Chinese demand were absorbed by Russian supplies. Moreover, Japanese taxpayers and oil consumers may also question the legitimacy of basing the energy security of the future Japanese economy on untested results of preliminary estimates of unknown and unproven resources in an unfamiliar and remote part of the world.

Finally, this Japanese initiative is completely out of synch with the history of the oil industry. It is oil supplies, not demand, that push pipelines into existence. The opposite is usually true for gas, but there is nothing fundamental about the Nakhodka pipeline, even geographic distance, that makes it any different from the hundreds of other pipelines that have preceded it in the history of oil.

With the economic rationale for Japanese support absent, suspicion naturally turns to geopolitical motivations, which suggests that Japan is pursuing a strategy of denial. First, undermining the pipeline to Daqing denies supply diversification to China, which has the fastest growing energy markets in the world. This makes the Chinese arguably more concerned with diversity of supply than Japan, which has both longstanding supply relationships and stagnant energy demand. secondly, it would deny China a stronger economic and political relationship with Russia; a relationship the Japanese have watched warily as it has strengthened in recent years. Indeed, the Putin administration has marked considerably more state visits between Moscow and Beijing than between Moscow and Tokyo. Thirdly, it would deny Russian companies a nearterm outlet for proven crude oil reserves and force them to work instead with Japanese companies to develop resources in the Russian east until enough volume exists for the Nakhodka line. This arrangement would compel Japanese entry into the Russian upstream where so many other international investors have failed.

Nevertheless, the fact remains that a pipeline from Angarsk to Nakhodka would be roughly twice the distance of a pipeline from Angarsk to Daqing, cost twice as much to build as a consequence, and require double the throughput guarantee and proven oil reserves to be supported. If Japan chooses to subsidize a more expensive project and Russia accepts this offer, the Chinese strategic objective of diversifying its oil import sources can still be achieved if a pipeline is completed within a reasonable period of time since China can always buy Russian oil from Nakhodka. However, if Japan's objective were strategic denial, then prolonged delay from exploration in East Siberia and the arrangement of financing would suit its purposes just as well.

Ultimately, Russia's action should be driven by its own economic needs-not the motivations or machinations of foreign countries.

Reform in the Russian Oil and Gas Industry: Is it Over? AS of this writing at the end of November 2003, it is difficult to assess the arrest on 25 October of the former head of Yukos, Mikhail Khodorkovsky. It is unclear whether his arrest, along with the campaign against his business associates and company since early summer, is a temporary phenomenon connected to the December Duma elections and the March 2004 presidential election or if they represent a fundamental shift in Russia's decade-long economic transition. It should be noted, however, that Yukos was the Russian company sponsoring an early pipeline to China and a major proponent of a privately-financed pipeline to Murmansk.

What is definitely transitory is the high global price of oil, which is presently above $30 a barrel. High oil prices tend to cover up a multitude of economic sins in oil exporting countries, and Russia is no exception. The positive lessons of productivity gains through the privatization of the oil industry itself are easily forgotten, but the memory of the admittedly flawed process of privatization that enriched a politically-favored few is well-recalled and examined selectively.

Reform of the chief remaining barriers to growth and economic efficiency in the Russian oil and gas industry-the state owned monopolies in major oil pipelines, Transneft, and in the production, transportation, and export of natural gas, Gazprom-has either stalled for the foreseeable future or been abandoned permanently. Both oil and gas pipeline sectors suffer from enormous investment deficits and operating inefficiencies. Meanwhile, the state is missing an opportunity to pursue restructuring and liberalization at a time of high world energy prices. When oil prices inevitably return to a more sustainable level of around $20 per barrel, reform will be more difficult to execute and with lower asset value, be less beneficial to the state. As it stands, chronic under-investment in both sectors will persist to the detriment of oil and gas production and exports.

To compound matters, President Putin's statement to Chancellor Schroeder of Germany on the gas sector in their meeting on 9 October seems particularly ominous. Putin told Schroeder "We are not going to breakup Gazprom. The European Commission should have no illusion: they are going to be dealing with the state in the natural gas industry." And, "The gas pipeline system is a child of the Soviet Union, and only we are in a position to maintain it in working condition, even if you're talking about the sections that lie outside Russia."5

It is easy to understand the appeal to those who favor a centrally-planned command economy of government-controlled oil and gas pipelines. For one, it permits the government to control supply and direct investment flows not only in the pipeline sector, but also in the economy as a whole. It also maintains a system of differential pricing and preferential access to resources, allowing the government to hand out rewards and punishments for both economic and political reasons. Additionally, it is a more convenient tool of foreign policy than a pipeline system owned and operated by private owners governed by market competition and transparent regulations. Even the fact that non-transparent business operations often lead to rent seeking can be seen by some as beneficial to political institutions or well-positioned individuals.

It is. however, one thing to want to extract economic value for Russia from natural gas production in Central Asia and to better manage transit through countries like Ukraine; it is quite another to abandon the much larger economic benefits of capturing associated gas production from Russian oilfields and oil industry investment in the gas sector by not reforming the vertically integrated monopoly of Gazprom. At a minimum, natural gas transportation by pipeline could be separated from production and regulated as a monopoly with fair tariffs and access rules.

There are equally gradual reforms that could also be enacted in the oil pipeline sector in order to mobilize private capital in much needed infrastructure investment. Partnership between government and domestic and international oil companies to build new trunk oil pipelines, along the lines of the Caspian Pipeline Consortium, can be encouraged. Instead this new model for Russian pipeline investment is perceived currently as an obstacle to government control and its success and future expansion are being threatened by the Russian government.

Thus, a Russia that is profiting from rapidly growing oil exports as a result of oil industry privatization in the 1990s and enjoying temporarily-high world oil prices may not see the benefits of continual economic reform and reduced state control-policies that could enable the transition to a full market economy integrated with the international system. However, as proud successor to the Soviet Union, all Mr. Putin has to do is draw lessons from the Soviet economy of 1988, when Russian oil production was a third higher than it is now, when price distortions and false market signals led to wasteful consumption and nonproductive investment, and when the Soviet system soon fell under the weight of economic inefficiency and corruption.

Conclusion. Russia's long term economic significance lies in the integration of its population of 145 million into the world market and its potential as a progressive force in the economic integration of its neighbors from the former Soviet Union into the global system. With 5 to 6 percent of the world's proven oil reserves and a production/reserve ratio of about 20 years, Russia is not a substitute for the Persian Gulf when it comes to oil production, but enjoys better economic options than those countries thanks to its agricultural and industrial potential. Development of Russia's larger natural gas resources will require greater openness to foreign direct investment due to the high investment costs and assured market access necessary for the remote gas projects around the world with which it will be competing.

Other countries, especially the United States, Germany, Britain, China, and Japan, will have to decide for themselves the meaning and value of building an energy relationship with Russia. In doing so, there is no better touchstone than Russia's pipeline policy at home and abroad. The path it takes, be it a statist or market-oriented, will tell us much about the economic future Russia has chosen.

Author's Note: The author would like to acknowledge Geolfrey Lyon, of the United States Department of Energy in Moscow, who was a font of iniormation in the preparation of this article.

[Sidebar]
Russia has become the second largest oil exporter in the world after Saudi Arabia.

[Sidebar]
Russia is not a substitute for the Persian Gulf in oil production.

[Footnote]
NOTES
1 All production and consumption statistics for this piece can be accessed online through the online B.P. Energy Reserves and Energy Consumption Review at http://www.bp.com/centres/ energy/index, asp.
2 Central Intelligence Agency, The World Fadbook 2003 (New York: Brassey, 2003), accessed online at http://www.cia.gov/cia/publications/factbook.
3 B.P. Energy Reserves and Energy Consumption Review, 3003, online.
4. Transcript of Minister Yusufov, ITAR-TASS online; see also Bayan Rahman and Andrew Jack, "Japan Offers Russia $7 Billion to Build Oil Pipe," on Rusnet News (13 October 2003), available online at http.//www.rusnet.nl/news/2003/10/14./businesseconomics_02-3532.shtml.
5 ITAR-TASS online (9 October 2003), available at http://www.itar-tass.com.

[Author Affiliation]
Edward C. Chow is Visiting Scholar at the Carnegie Endowment for International Peace.

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Pipelines in the Caspian: Catalyst or Cure-all?
Fiona Hill. Georgetown Journal of International Affairs. Washington: Winter 2004. Vol. 5, Iss. 1; pg. 17, 9 pgs
Abstract (Article Summary)
Hill looks to the Caspian region and the new oil and gas pipelines from Baku, Azerbaijan to Ceyhan, Turkey to assess whether new infrastructure built by Western companies will be a springboard for the development of these nations or a magnet for internal rivalry over the allocation of hydrocarbon revenues. She warns against overly optimistic assessments of what happens pipelines can be deliver in the Caspian region.

Full Text (3853 words)
Copyright Edmund A. Walsh School of Foreign Service Winter 2004



With questions over future prospects for Iraqi oil-the world's second largest reserves after Saudi Arabia-at the forefront of attention, along with widespread instability in the Middle East, the Caspian Basin and its oil and natural gas resources are back on the agenda. The Caspian, along with Russia, West Africa, and Canada, where new discoveries in the tar sands have been made, are the great new potential sources of world energy. These regions are increasingly vital to addressing the need for new energy suppliers and bypassing OPEC members and Persian Gulf states. Although these regions pose significant difficulties in terms of production and export possibilities and would not necessarily be competitive with the Persian Gulf under a low oil price regime, current high crude oil prices combined with the fact that Iraq's production potential will not be restored any time soon make them major commercial contenders.

In the Caspian Basin, the difficulty has never been one of supply-the region contains 17 to 33 billion barrels of proven oil reserves and around 232 trillion cubic feet of natural gas.1 It has always been one of overcoming the fact that the Caspian is a landlocked sea and of transporting energy resources to world markets. With the collapse of the Soviet Union, the region's limited energy pipeline infrastructure extended only across Russia. The new independent states of the Caucasus and Central Asia were locked into a single set of transportation options to the Black Sea and Europe. Oil and gas exports from Azerbaijan, Kazakhstan, and Turkmenistan required building new pipelines. The Caspian region therefore became a focal point in the 1990s, when the first international oil contracts were signed. Because of the sheer size of Caspian energy reserves, and the evident importance of export revenues for the future development of faltering regional economies, Caspian governments transformed pipelines from merely transportation projects into means to achieve political and social objectives. In public debates about Caspian pipelines at both regional and international levels, the commercial interests of companies investing in the actual energy production were sidelined and often seemed strangely secondary or marginal to other considerations.

The Baku-Tbilisi-Ceyhan pipeline project (BTC) provides the best example of this transformation. The goal of this project is to transport crude oil from Azerbaijan's Caspian fields through Georgian territory to Turkey's port on the Mediterranean. The Azeri and Georgian governments have seen BTC as their lifeline to Turkey and Europe rather than simply a pipeline. Politicians from both countries have tried to enhance their positions through their involvement in energy and pipeline negotiations. Regional elites have enriched themselves through related business deals. Local populations have viewed BTC as a potential panacea for all the ills that ail the region. And international NGOs have pushed governments and international investors to address a host of issues including government responsibility and accountability for energy revenues, democratization, human rights, and environmental protection as part of the pipeline project.2 Since the conclusion of the final host government agreements for the pipeline's construction in 1999, many hopes and aspirations have been invested in BTC along with many millions of dollars from companies like British Petroleum (BP).

BTC is not the only regional pipeline project to have such high stakes beyond its commercial viability. Pipelines from Kazakhstan overland to China, from Turkmenistan across the Caspian Sea to Azerbaijan, and from Turkmenistan through Afghanistan and onward to Pakistan and India, have been seen as means for reorienting regional export routes toward new markets, or-even more loftily-for reconstructing Afghanistan and fostering peace between Pakistan and India. In its early stages of development, the Baku-Tbilisi-Ceyhan project itself was portrayed as a prospective "pipeline for peace," with initial plans to cut through Armenian territory and thereby improve relations between Armenia and Azerbaijan and Turkey, its two regional enemies.3 Although the Armenian option was quickly rejected for a longer route through Georgia, the idea that the pipeline can eventually promote peace and prosperity across the whole region has not quite been abandoned. And while other pipelines remain lines on the map, BTC is rapidly becoming a reality on the ground in the Caucasus.

The Geopolitics of Caspian Pipelines. That BTC has been endowed with so many purposes is not surprising. It began, in many respects, more as a geopolitical project than a commercial one. Due to their isolation during the Soviet period and their fear of forced reintegration with Russia, Caspian states like Azerbaijan and Georgia sought to reorient themselves strategically by creating new security and economic ties to the United States and Europe. Turkey was seen by both countries (although not by neighboring Armenia) as a window to the West by virtue of its geographic location, NATO membership, and strategic partnership with the United States. Contracts with international oil companies and the process of negotiating agreements for energy pipelines with the Turkish and U.S. governments immediately became ways to build new political and physical linkages with the West. Likewise, for the United States, the BTC project became a three-pronged tool in its regional policy. It was a means of creating an East-West-rather than a North-South-transportation corridor from the Caspian to the Black Sea that would avoid Iran to the south, cement the position of Turkey as the new bridge between the Caspian and Europe, and break dependence on Russia to the north.

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BTC addressed several policy imperatives for Washington in the 1990s. First, it would help to isolate Iran in the Caspian as well as in the Persian Gulf as punishment for its continued sponsorship of international terrorist groups perpetrating attacks against American and allied interests. This was especially important after the August 1996 adoption of the Iran Libya Sanctions Act (ILSA) by the U.S. Congress. ILSA imposed penalties on major international investors in Iran's oil and gas industry. Second, it would reward Turkey for its support of the United States during the first Gulf War and its willingness to forego transit revenues from Iraqi oil. Turkey's Mediterranean port of Ceyhan was the terminal for Iraqi oil and its economy was hard-hit by the loss of Iraqi crude. Ceyhan's infrastructure, relative proximity to the Caspian, and access to world seaways made it an ideal destination for a new pipeline from Azerbaijan. Third, BTC would increase export options beyond Russia and promote the development of multiple pipelines for oil and gas in the region. Although there was no specific policy to isolate or even avoid Russia as there was for Iran, relations between the United States and Russia soured in the late 1990s. Russia was increasingly viewed in Washington as a spoiler in international affairs and as something other than an honest broker in regional conflicts. And Russian state-run companies made life difficult for exporters forced to deal with Soviet-era pipelines, volatile tariff agreements, and precarious access during disputes. International oil companies became increasingly anxious about Russia's potential stranglehold over oil and gas exports.

As a corollary to these geopolitical considerations, BTC and other pipelines became the central part of a framework for economic development and conflict resolution in the Caucasus-the scene of violent ethnic conflicts and civil wars in the late 1980s and 1990s. BTC and peace were two important elements of a virtuous circle. Energy revenues and transit fees were essential in boosting the coffers and legitimacy of cash-starved and weak central governments in states like Azerbaijan and Georgia to help them entice back secessionist regions like Nagorno-Karabakh and Abkhazia. Trickle-down economic benefits for local communities from energy and related service sector jobs and overall foreign investment were presented as eventually outweighing factors for conflict. In turn, conflict resolution and political and economic stability in the Caucasus region were crucial for the long-term success of international investment in Caspian oil production.

Zero-Sum Games and Commercial Concerns. This range of geopolitical considerations and the U.S. policy of isolating Iran fed popular perceptions of a zero-sum game in Caspian energy development. In the late 1990s, the United States was depicted in discussions of energy politics as pitted against both Russia and Iran in the Caspian. Russian and Iranian analysts frequently criticized U.S. efforts to push the countries out of Caspian projects and both governments adopted tit-for-tat strategies in response to any U.S. policy innovation. When, for example, the Clinton Administration created a new position in the State Department to coordinate U.S. executive branch programs for Caspian oil and gas, Russia responded by appointing not one but two high-level officials with special responsibility for the Caspian. Russia and Iran also concluded agreements on strategic energy cooperation in the region, and together tried to block the exploitation of Caspian resources by demanding a new division of the Caspian Sea's resources. Russia later softened its stance on this issue after discovering substantial oil deposits in its own sector of the Caspian.

The geopolitical noise around Caspian energy development and talk of a new "Great Game" among the United States, Russia, Iran, and the other Caspian states were good media fodder in the 1990s, but they detracted attention from the overarching commercial issues. For international oil companies investing in Caspian energy projects, there was a great deal at stake in the machinations over pipelines. The costs of operating without them were high. Under a low oil price regime, overheads made Caspian energy less competitive on global markets when oil and gas had to be transported over thousands of kilometers across land and sea. When oil production began in the mid-1990s, it was transported by ship and rail across Russia or the Caucasus, first to the Black Sea, and then from there through Turkey's Bosphorous straits out to the Mediterranean. The cost of the rail transportation alone was around $34 per ton, or about $4.60 per barrel, which became a serious issue when oil prices dropped to around $10 per barrel in 1998.4 Companies were often forced to suspend oil production when overland transportation options were not available. Pipelines were essential to cutting costs and avoiding the inherent problems of having to constantly offload oil from tanker to rail and back again.

The Push for BTC. Commercial concerns drove feasibility studies and Caspian pipeline projects forward, but the BTC project was not always the preferred option in companies' calculations. For example, Chevron, which operated the onshore Tengiz oilfield in Kazakhstan, pushed for a pipeline from Kazakhstan overland around the northern tip of the Caspian and then across southern Russia to the port of Novorossiysk that could be constructed relatively quickly. This was a shorter route than other options proposed-including a project to build a pipeline from Kazakhstan across the Caspian to Azerbaijan. This pipeline started to function in October 2001. Trans-Caspian pipelines, on the other hand, were technically difficult to build and potentially expensive in the absence of high oil production volumes. Some international oil companies also considered Iranian transportation options in defiance of U.S. sanctions. With its highly developed energy sector and existing domestic network of pipelines, Iran was considered by many investors the cheapest and most secure export route. In 1998, for example, Total, a French company, conducted a feasibility study for a pipeline from the Caspian to Iran's ports on the Persian Gulf. Two American companies, Mobil (now subsumed under ExxonMobil) and Conoco, lobbied the U.S. government to ease ILSA restrictions and allow oil swaps with Iran. This would have allowed them to ship Caspian oil to northern Iranian refineries in exchange for an equivalent amount of Iranian crude that could be shipped from Persian Gulf ports to world markets. The U.S. government resisted these pipeline and oil swap projects.

Two other oil pipelines in the Caucasus were also used before BTC to transport the first batches of new oil production from Azerbaijan to the Black Sea-a Soviet-era pipeline from Azerbaijan to Russia's Black Sea port Novorossiysk, and a new pipeline from Azerbaijan to Supsa, a Georgian port on the Black Sea. These pipeline routes were fully operational by 1999, and both the Azeri government and the Azerbaijan International Operating Company (AIOC), an international consortium of ten major oil companies exploiting Azerbaijan's Caspian fields, considered expanding them to export main oil production. The U.S. government played the decisive role in modifying this plan, fearing that its sanctions regime would soon be breached and that Iran would become a viable option for Caspian oil exports.

While intense U.S. diplomacy succeeded in convincing the governments of Azerbaijan, Georgia, and Turkey to conclude the host government framework agreements necessary for the construction of BTC, the oil companies proved more difficult to persuade. The AIOC and its lead company, BP resisted 'geopoliticking' and remained focused on business considerations-whether BTC was commercially viable or not. Early cost estimates for the construction of the pipeline varied from $2.4 to $3.8 billion and, after oil prices hit a major low of around $10 per barrel in 1998, the AIOC was understandably cautious. Reports suggested that the consortium could lose as much as $3 billion in profits over thirty years by using BTC as its main export pipeline if oil prices were low.5 In March 1999, AIOC Chairman David Woodward also announced that the consortium did not anticipate sufficient volumes of oil production to warrant BTC's construction before 2005.6

The position of BP and the AIOC changed quite dramatically after BP's merger with Amoco, an American energy company. BP's chairman, Lord John Browne, took the strategic decision to make the Caspian one of the centerpieces of the company's global portfolio and endorsed BTC. Some analysts saw this decision as directly related to BP's merger and its desire to cooperate with the U.S. government now that it had new interests in the United States. But BP also had to factor other considerations into its decision-making. The Turkish government, international environmental groups, and even oil companies had pointed to the dangers of straining the already limited capacity of Turkey's narrow Bosphorous straits with increased tanker traffic from the Caspian. U.S.-Iranian relations showed little sign of improvement and it was clear that the United States would continue to block Iranian transportation options for the foreseeable future. The considerable financial considerations related to the construction of BTC were also somewhat eased by a dramatic rise in world oil prices (up to almost $40 a barrel and a ten-year high by 2000), and by Turkey's decision, under U.S. guidance, to offer a maximum cost or completion guarantee to the AIOC for pipeline construction. The U.S. government also offered financial assistance through its trade agencies.7 BP's decision to endorse BTC was crucial in pushing the project forward.

In November 1999, a new framework agreement was signed during the OSCE summit in Istanbul between BP, on behalf of the AIOC, and the Turkish, Azeri, and Georgian presidents. In this agreement, BP/AIOC pledged to secure the financing for the construction of the pipeline, and the Turkish government agreed to pay for cost overruns in excess of $1.4 billion on its portion of the pipeline.8 In addition, the three governments reached an agreement to build a gas pipeline from Shah Deniz, the newly discovered Azeri natural ras field, that would run parallel to BTC up to the Turkish border. It would then continue to the Turkish city of Ezerum, where it would connect with an existing gas pipeline network and supply Turkish consumers. On its way through the Caucasus, this new pipeline would also provide natural gas to Georgia to address the country's chronic energy shortage. The new parallel oil and gas pipelines added to the overall geopolitical and economic importance of the BTC project.

A Pipeline for Regional Prosperity?

The BTC pipeline project broke ground in September 2002 in Baku and was billed as the largest private sector construction and investment project in the Caucasus. When completed, it will extend 1,760 kilometers across three countries. At its maximum capacity in about 2010, it will carry a through-flow of one million barrels of oil a day, and will be the central element of a projected $20 billion investment package that includes up and down-stream projects.9 Most analysts inside and outside the region recognize that the scale and extent of BTC and its related projects will be unique. No other private sector projects of this magnitude are likely to materialize. The success of BTC and the overall profitability of Caspian oil production will also certainly determine the extent to which other foreign investment investments are made in other regional sectors in the future.

In many respects, the very prosperity of Azerbaijan and other Caucasus states is at stake in the construction of BTC. The collapse of the region's centrally planned economies after the dissolution of the USSR was compounded by the effects of the regional conflicts of the 1990s. Hundreds of thousands of people were displaced in the region and many more left for Russia. The loss of human resources through emigration, the contraction of domestic markets, and the few opportunities for international trade limit the Caspian states' potential for development outside the energy and related service sectors. Furthermore, even though there is an abundance of energy available for export, the Caspian region suffers from a domestic energy deficit. Regional consumers lack the ability to pay utility bills and the energy distribution infrastructure for households and industry is in extremely poor condition. All the states, including Azerbaijan, still depend on Russia for power and gas supplies.

These concerns preoccupy governments, local populations, and NGOs. Since 2000, international NGOs like Human Rights Watch, Friends of the Earth, Transparency International, and many others have launched a major public advocacy and outreach campaign to press BP, the AIOC, the BTC management company, the Azeri and Georgian governments, and international financial institutions involved in building the pipeline, to address myriad issues related to the pipeline's construction and other regional issues. Indeed, the allocation by governments of export revenues and transit fees is still to be determined. Other issues have been raised, including the environmental impact of the pipeline, the preservation of important cultural sites along the route, land purchases for the construction of the pipeline, employment for communities along the pipeline, community oversight of the construction process, and the central and local governments' response to public protest and the concerns of communities at different phases of the project. As of the end of September 2003, one year after the groundbreaking ceremony, 200 kilometers of pipeline had been laid along the BTC route and a 400-kilometer construction corridor had been prepared through Azerbaijan, Georgia, and Turkey. Of the 10,000-strong workforce on the project, 7,000 local nationals had been employed. The BTC operating company had also deployed teams of archaeologists to excavate and record data at ancient sites uncovered during construction in Georgia.10

Conclusion-Catalyst or Cure-all? Regardless of the geopolitical and other considerations behind the decision to build BTC, the pipeline is primarily a commercial venture to transport to oil from the Caspian to world markets. The companies involved in the project will move ahead regardless of the complexities if their negative impacts do not outweigh the commercial benefits. The pipeline's ultimate success also depends on issues detached from the Caspian region such as the long-term fluctuation of world oil prices. While BTC can link Azerbaijan, Georgia, and Turkey, the construction of one pipeline to the Mediterranean cannot overcome the otherwise disadvantageous location of the Caspian. The series of legal and political agreements that made BTC's construction possible have created a complex set of relations among the three countries, the United States, and international energy companies, but the pipeline cannot be substituted for other economic, political, and security relations with the West. Nor can it tie fractured countries like Azerbaijan and Georgia back together again or replace regional cooperation in the Caucasus-especially given the fact that it bypasses Armenia.

And there are few examples of pipelines promoting peace. Instead, there are plenty of examples of pipelines traversing areas of considerable instability in Latin America, West Africa, and elsewhere. The higher costs of operating in conflict zones, and of protecting and repairing pipelines, are factored into companies' calculations. Most existing and proposed energy pipelines in the Caspian region run through conflict zones. In 1999, oil exports were suspended when the pipeline from Baku to Novorossiysk was ruptured due to the war in Chechnya. Restoring service required building a route bypassing Chechnya through the neighboring republic of Dagestan. In the future, the Baku-Novorossiysk pipeline is unlikely to play any significant role in a peace settlement in Chechnya, just as BTC is not likely to be the deciding element in resolving the conflict between Armenia and Azerbaijan over Nagorno-Karabakh.

Although they cannot ensure peace, pipeline projects-especially on the scale of BTC-can provide an important economic boost through infusions of investment and creation of jobs at the national and local level. But pipeline projects cannot solve the overall under-development of regional economies. Large-scale economic development projects are the purview of international institutions like the World Bank, not of oil companies like BP. Pipelines are a catalyst for development but not a cure-all for the political, economic, and social problems of regions like the Caucasus and the broader Caspian Basin.

[Sidebar]
Caspian governments transformed pipelines from mere transportation projects into means to achieve political and social objectives.

[Sidebar]
BTC and other pipelines became the central part of a framework for economic development and conflict resolution.

[Sidebar]
In many respects, the very prosperity of Azerbaijan and other Caucasus states is at stake in the construction on BTC.

[Footnote]
NOTES
1 See figures provided by the U.S. Department of Energy's Energy Information Agency (EIA), August 2003, available online at: http://www.eia.doe.gov/ emeu/cabs/caspstats.html. These figures would put the Caspian's oil reserves on par, at the lower end, with Qatar and with the United States on the upper end; and its natural gas resources at the same level as Saudi Arabia.
2 See, for example, Svetlana Tsalik, Caspian Oil Windfalls: Who Will Benefit? (New York: Open Society Institute, Caspian Revenue Watch, 2003).
3 See Jack Maresca, "A 'Peace Pipeline' to End the Nagorno-Karabakh Conflict," Caspian Crossroads I (Winter 1995).
4 Cited from Russian pipeline company Transneft's figures in Nefl i Kapital (January 1999), 51.
5 Reported in "Pipelines: Azerbaijan," Caspian Investor (January 1999), 28. As outlined in the article, with estimated construction costs of $3-8 billion and low crude oil prices, Baku-Tbilisi-Ceyhan would generate $14.5 billion in profit, in contrast to an expanded version of the pipeline from Baku to Supsa, which would offer $17.5 billion in profit.
6 See "Turkey, AIOC Begin New Round of Discussions on Baku-Ceyhan," Newsbase, FSU Oil and Gas Monitor (30 March 1999), 5; and "AIOC Head Says MEP Will Only Be Profitable under Certain Conditions," Newsbase, FSU Oil and Gas Monitor (27 April 1999), 17.
7 Haitham Haddadin, "United States, Turkey Try to Speed Baku-Ceyhan Pipeline," Journal of Commerce (23 April 1999).
8 Jane Perlez, "Strategic Issues Aside, Focus on Oil Pipeline Turns to Money," New York Times (21 November 1999).
9 For this and other information see BTC, Co. "Regional Review: Economic, Social and Environmental Overview of the Southern Caspian oil and Gas Projects" (February 2003).
10 BTC, Co., "Construction gathers momentum, passes milestone," BTC Bulletin (25 September 2003), available online at: http://www.caspiandevelopmentandexport.com/ASP/LatestNews.asp?ArticleID=14.

[Author Affiliation]
Fiona Hill is Senior Fellow in the Foreign Policy Studies program at the Brookings Institution.

--------------------------------------------------------------------------------
Chad-Cameroon: A Model Pipeline?
Aude Delescluse. Georgetown Journal of International Affairs. Washington: Winter 2004. Vol. 5, Iss. 1; pg. 43, 10 pgs
Abstract (Article Summary)
Delescluse contends that, if the World Bank and others step up to the job, the widely-watched Chad-Cameroon pipeline could be a model for the future. He describes that since the onset of the Chad-Cameroon Petroleum and Pipeline Project, the environmental, social, and political safeguards that the World Bank and Chad established have gradually improved.

Full Text (4880 words)
Copyright Edmund A. Walsh School of Foreign Service Winter 2004



In early October, Chad joined the club of oil -exporting countries as a result of a unique agreement between its government, a consortium of oil companies, and the World Bank. This partnership, known as the Chad-Cameroon Petroleum Development and Pipeline Project, could change the destiny of Chad and its 7-5 million inhabitants. The project has generated debate regarding whether it could serve as a model for future projects: if successful, not only would it significantly reduce poverty in Chad, it could also encourage other mineral-rich developing countries, multinationals, and aid agencies to emulate it. Moreover, this unique pipeline could overcome the so-called "oil curse" that oil -exporting countries have traditionally suffered by ensuring that petroleum revenues are channeled towards national development. Perhaps due to the importance this project plays in an economy with few natural resource alternatives to oil, Chad has embarked on a path with the World Bank to minimize the risk to private investors. The country also committed to an ambitious program of reforms, including a broad-based consultative process to feed into project design, an oil revenue management plan, capacity building and structural reforms, and the creation of external controls. Nevertheless, the initiative is not without its challenges. Indeed, guaranteeing that oversight mechanisms and good governance standards are realized and enforced, as well as ensuring that political stability is maintained in a country with a history of political volatility are essential to the project's success. The future holds promise for the people of Chad and their government if, in partnership with the foreign entities, they prove able to reap the benefits of this lucrative opportunity. The lessons learned as a result may inform, and herald the onset of, a new generation of development projects.

Background. Given Chad's geography and economy, and the involvement of the World Bank as a broker, the ChadCameroon pipeline represents what is, for now, a unique confluence of circumstances. Chad is a landlocked country, generating high transportation costs and constraining trade. According to the UNDP, Chad remains the fifth poorest country in the world with an infant mortality rate of 54 per 1,000, a life expectancy of 46 years (1990), limited access to basic social services, a GNP per capita of $160, and 80 percent of the population living on less than one dollar a day. Nearly half its territory is unsuitable for human habitation, with 67 percent of the country's land being arid. Agricultural products, mostly cotton, have represented 90 percent of all exports and decades of ethnic and regional conflict until the early 1990s ruined the country's economy. Although petroleum was discovered in the 1960s, civil wars prevented the development of oil fields until the 1990s.1 Other than oil, Chad's natural resources are limited. Thus, exploiting petroleum is an indispensable opportunity for the Chad.

The program is itself the result of lengthy negotiations begun in 1988, when Chad and a consortium of oil companies signed an agreement that provides a 30-year concession to exploit oil resources in the Doba region of southern Chad. The original companies in the consortium were Exxon, Royal Dutch Shell and Elf Aquitaine (which was since replaced by Petronas and Chevron). The project involves an investment of $3-7 billion to develop three oilfields and export the oil through a 1,070 km pipeline across Cameroon. In addition, the potential hazards of Chad's isolation and history of conflict motivated the companies to seek the participation of the World Bank to help mitigate the risk. The World Bank agreed to support the project on the condition that environmental standards be enforced, transparency ensured, and guarantees given that would Chad adopt structural reforms (including an oil revenue management program) to manage oil receipts that could more than double state income. Chad's oil resources were undeveloped at the time the agreement was signed, due to its lack of expertise in the oil industry and limited financial capacity. As a result, Chad submitted to stringent conditions to receive technical assistance and international funds.

Although the World Bank's share of the total financing is small, its participation has been critical in attracting investment from other financiers, as well as ensuring environmental and social safeguards in project implementation; imposing strong conditionalities intended to minimize the risk of oil revenues misuse, which have resulted in the development of an oil Revenue Management Program; raising project visibility both locally and internationally. Moreover, this visibility has meant that NGOs and academics have actively informed the debate around the project's perceived weaknesses, in particular those related to its revenue management plan-and the pressure from these groups may have convinced involved parties to improve the plan.

These stipulations do much to further the aims of the international community, but the economic leverage applied on a nation with limited alternatives raises interesting questions regarding sovereignty and the use of financial power. Indeed, Chad has few alternatives to the pipeline for generating revenue and financing economic development and, as a result, it accepted numerous constraints in order to bring the project to fruition-not, however, without negotiating. As Ahmedou Ould-Abdallah, Executive Director of the Global Coalition for Africa, and others suggest, "the government has accepted something very difficult to endorse a few years ago by any African government. "2 Indeed, this is the first time a government has committed in advance to allocate its oil revenues expressly to priority sectors (the oil production region and to a fund for future generations) and to undertake reforms to prepare the oil economy. It is also the first time a government subjected itself to such an intense level of auditing and monitoring at the hands of domestic and foreign entities. Moreover, during the construction period, Chad submitted to several express World Bank demands to rectify malpractice such as its 1999 agreement to release a former congressman who had been arrested partly because of opposition to the pipeline and its 2OOI agreement to release six opposition candidates arrested following the presidential election. In addition, the country took corrective measures after it bought weapons with $4-5 million of a $25 million "signing bonus" that it obtained at the project's onset. The rest of the signing bonus was strictly allocated to priority sectors for poverty reduction. This potential "infringement on sovereignty" has required the weight of an international institution like the Bank-the principal source of international funds for Chad and the constant pressure brought about by inquiries by the media and NGOs. This degree of flexibility reflects the high priority that Chad attaches to this project, and highlights several of the complexities associated with this model of leveraging transparency, which has many potential benefits-and potential costs.

Innovations and Potential Benefits. The strengths of the Chad-Cameroon pipeline are two-fold: It has unique potential to improve the political and economic conditions of Chad; and its design, although unique, could be the foundation of project model that could be grafted onto other contexts-several of the pipeline project's elements can be replicated in natural resource extraction in other developing countries. One such feature is the consultation scheme undertaken during the project's planning and design phase, in which an extensive and broad-based consultation process took place that included approximately QOO village meetings, 145 meetings with international NGOs (project supporters and opponents), and discussions with scientists and environmental engineers. The scope of the consultation was unprecedented, particularly at the village level, and contributed to improvements in implementation plans. For example, results from the consultations led to the reevaluation of a Compensation and Resettlement Plan for Indigenous People and the rerouting of the pipeline in Cameroon.3

The project's major innovation, however, is a joint effort by the World Bank and Chad to build a new legal framework to create the conditions for sound oil revenue management. The keystone is the oil Revenue Management Program, a political compromise between Chad, the World Bank, and civil society (international and Chadian NGOs). Negotiated over five years, the program was adopted in 1991 and has two aims: to channel oil revenues towards priority sectors for poverty alleviation (health, social services, education, infrastructure, rural development, environment and water); and to strengthen oversight, and to ensure that oil revenues benefit national development and are not siphoned off. This initiative has resulted in the adoption of a legal framework that has as its foundation new national oil revenue management legislation. The Law; on oil Revenue Management allocates direct oil revenues (i.e. from royalties and dividends) to the priority sectors and the oil producing region and provides for the creation of a trust fund for future generations.1 This legislation, refined further, by a series of implementing decrees that created, in addition to the usual supervision institutions (the Supreme Court and the Auditor General's office), an ad hoc oversight committee in the College de Contole et de Surveillance des Revenus Petroliers (CCSRP), composed of civil society representatives, parliamentarians, officials from Treasury and the Central Bank of Central African States (BEAC), and a Supreme Court judge.5 The implementing decrees have also designed mechanisms for oil revenues sterilization and stabilization that give the BEAC a critical role in controlling the repatriation of oil revenues deposited in off-shore accounts as well as in the effort to avoid excess liquidity.6

Nevertheless, critics note that building a new institutional framework does not guarantee good management of oil resources: additional strategic capacity building initiatives and structural reforms must be undertaken. Therefore, in 2OOO, the World Bank approved $37-8 million in loans for the Petroleum sector Management Capacity Building Project and a Management of the Petroleum Economy Project that aim to provide the government with environmental, social and technical capabilities to develop and manage Chad's petroleum sector and to increase efficiency, transparency, and accountability of public financial management. These activities are part of a larger economic development strategy signed in 2OOO, which prescribes restructuring the national legal framework to improve efficiency in policy decisions, increase accountability, and reduce corruption.7 Thus, the prospect of new resources from the Petroleum Project has accelerated the implementation of structural reforms by making these reforms urgent and providing incentives to carry them out.

Beyond these domestic reforms, the promise here is that other innovations (for example, the creation of external control entities to oversee the development of the pipeline) could be replicated in other developing countries seeking to increase transparency and compliance with pre-set rules. In the case of Chad, the World Bank appointed an international supervisory organization, the International Advisory Group (IAG), in 2OOI to report its observations on the implementation of the project, such as revenue allocation, the participation of civil society, governance and human rights, environmental management, social impacts, and potential future issues in need of redress. In addition, an engineering consulting company, which formed the External Compliance Monitoring Group (EGMG), monitors compliance of the oil companies to the environmental management plan and performance of the capacity-building projects. Finally, virtually anyone can exercise control over compliance with the World Bank's policy by filing complaints before the World Bank's independent Inspection Panel. Thus, the World Bank's involvement in the Chad-Cameroon pipeline marks it as a unique endeavor; it remains to be seen whether this model will prove successful in a potentially turbulent climate and, if so, whether it can be exported.

New Dangers and Remaining Challenges. Although the world Bank-brokered scheme has the potential to barter economic development for good governance while mitigating investment risks attached to the project, it is still faced with appreciable challengesboth technical and geopolitical-to its overall success. Despite the controls established and progress achieved since 19981 limitations to good governance persist and signal the difficulty of sequencing political reforms, capacity-building, and infrastructure construction, which have differing time frames. Thus, soon after the start of the pipeline and oil field construction and the implementation of political and economic reforms, IAG reported major discrepancies in the speed of completion of commercial and institutional projects. In short, the construction is moving forward faster than planned and the capacity-building is lagging behind." Since then, the "two-speed problem" denounced by IAG has not been resolved, and Chad's ministries, Parliament, and the College still lack the capacity to fully carry out their missions.10 Dinanko Ngomibe, the budget director in Chad's Ministry of Finance, declared to journalists last june that "in terms of human capacity, we're not ready yet." he notes that "less than 25 percent of [his] colleagues in the civil service know how to use computers, even when the electricity works."11 This lack of human resources poses serious challenges to the efficiency of the allocation of oil revenues and weakens the capability of those acting as checks and balances.

In addition to a looming lack of capacity, the government's behavior, especially that of President Derby, presents another threat to the sound allocation of oil revenues. A slew of issues, including human rights abuses, political repression, government distrust of freedom of information, the use of a portion of the signing bonus to buy arms, and the interdiction of the local association EPOZOP, contradict the government's stated commitment to political reform and the revenue management plan.12 In the short run, the World Bank has been able to use its political leverage (by threatening to withdraw support from the petroleum project or to not provide debt relief to Chad) to correct the President's misbehavior; to a certain extent, international scrutiny has also maintained pressure on the Chadian authorities. But it is unclear what will happen when the World Bank's leverage and public scrutiny wind up as years pass and oil revenues increase. Also in questions is whether the College, the new Auditor General's Office, and the Supreme Court will be strong enough to counterbalance the political power of the executive and prevent oil revenue mismanagement. These questions are critical, as much rests on how the College's authority will be exercised in practice. Indeed, in the absence of a strong civil society that holds the government accountable and compels it to honor its commitments, oversight of gOvernment spending of oil revenue and ensuring compliance with the legal framework falls heavily on the College. Its ability to do so effectively will depend not only on financial and human resources to carry out its mission, but also on the effective cooperation of the ministries and the enforcement of the Supreme Court's decisions in the event of violations.

These challenges of good governance crystallize many of the criticisms of the Chad-Cameroon pipeline model. Thus, some development experts and NGOs have rejected the validity of the model a priori, accusing the World Bank of "corporate welfare" and suggesting that "the private sector risk [would be] comfortably cushioned by public funds intended to help the poor in a politically unstable area of Sub-Saharan Africa.'13 Nevertheless, many observers recognized the efforts pursued by the World Bank and Chad, but stressed that political and institutional capacity reforms cannot be developed alongside infrastructure construction and many argue that the former must precede the latter. In other words, the World Bank has emphasized the building of a legal framework and institutions, but has overlooked the importance of governance, human rights, and political capacity, as well as the time necessary to make improvements in these areas. A lack of human capacity and the persistent fragility of Chad's democracy corroborate this thesis. Indeed, the primary contributor to this lack of preparation is that the World Bank has not traditionally tackled corruption and governance malpractices, has little experience in strengthening civil society, and is arguably not equipped to do so. Consequently, the World Bank could have benefited from the involvement of other organizations more competent in dealing with those issues. Thus, any future application of this model would need to rely heavily on an array of agencies whose technical assistance in fighting bad governance and strengthening civil society could be brought into play.

In addition to the problems of implementation and logistics associated with the project, the case of the ChadCameroon pipeline demonstrates limitations to the model that could be dramatic in terms of both economic impact and political stability. Indeed, in the worst case scenario, if the weaknesses of the project prove to completely undermine the oil revenue management scheme, then the "oil curse" would strike Chad (as it surely would without the project's unique mechanisms), creating major economic distortions (atrophy of other productive sectors, expansion of the non-tradable sector, appreciation of the real exchange rate, waste, unsustainable public expenditure, rent-seeking behavior), and increasing corruption and theft. In a less pessimistic scenario, these weaknesses would only limit the potential benefits of the pipeline project for poverty alleviation. At best, with improvements in the oil revenue management scheme and in the areas of structural reforms, human resources, and governance would continue as they have throughout the preparation stage and improve the lives of the poor.

At stake in the pipeline project is not only Chad's economic development, but also the goal of achieving political stability through poverty reduction-a situation that could, in fact, be worsened as a result of the project's failure. As the neighboring countries of Sudan and Nigeria exemplify, the lure of gain from oil encourages the battle for power and civil unrest opposing oil producing regions and governments. Therefore, badly-managed and unfairly-distributed oil revenues are a major threat to stability and national development, a particularly pressing concern given Chad's long history of violent ethnic and regional rivalries. To mitigate this risk, 5 percent of the royalties are earmarked for use in the oil producing region, and an accompanying Regional Development Plan is being implemented. Nevertheless, many observers protest that both are inadequate. The 5 percent is supplementary to other expenditure, and the true question is of how much will be allocated to this region in the rest of the budget lines. The risk here is that funds allotted to different regions put the Doba region at disadvantage, thereby reigniting ancestral antagonisms between North and South, and even sparking claims for autonomy in the South.

This risk is all the more significant as, besides a provision calling for alternating membership of representatives of the Muslim and Christian communities in CCSRP, ethnic and religious considerations were arguably not properly taken into account in the project's design. The fact that most of those who received training from the World Bank before the project was approved belonged to the same northern ethnic group as President Derby also fuels fear that this group may attempt to hoard oil revenues to the detriment of the rest of the population.14 Therefore, if the project fails to guarantee concrete improvements in the lives of the whole population, domestic political stability will be threatened.

Should Chad confront domestic conflicts, not only could civil wars within Sudan and the Central African Republic (CAR) propagate, but tensions between Chad and its neighbors could also reemerge, further threatening Chad's stability. Indeed, Chad must currently cope with an influx of refugees in the South and increasing tensions along its border with the CAR, which is violently shaken by an internal conflict.15 Similarly, Chad is fighting an invading militia from Western Sudan and is facing the penetration of nearly 70000 Sudanese refugees fleeing attacks in Sudan's western region, where government forces and rebels are fighting.17 This situation threatens Chad's security and could encourage President Derby to use oil revenues to strengthen his army at the cost of economic development. The disastrous experiences of other African oil-producing countries should raise Ghadian officials' vigilance and persuade them to appropriately manage the country's oil resources in order to avoid sinking into civil unrest, a situation that its neighbors could exploit. Indeed, in a weakened Chad, Libya and Nigeria, which have territorial ambitions in Chad and supported Chadian armed groups during the three decades following its independence, could represent an additional threat.17 As far as Cameroon is concerned, the common interests around oil exports should maintain stability between the two countries. Therefore, while current border clashes are troublesome, it is not clear at this time how oil revenues will play in Chad's relations with its neighbors other than Cameroon.

Conclusion: A Viable Model? Since the onset of the Chad-Cameroon Petroleum and Pipeline Project, the environmental, social, and political safeguards that the World Bank and Chad established have gradually improved. Today, as Chad sends its first barrels of oil to market, the oil Revenue Management Program and accompanying structural reforms will soon be tested. Success will depend in large part on the performance of Chad's new legal framework and its enforcement, as well as on the continuing efforts at macroeconomic reform and strengthening state capacity and oversight. Positive signs are evident, as the World Bank's involvement, pressure from NGOs and the expectations surrounding the birth of the oil era in Chad have already led to the implementation of numerous reforms.

Although Chad's preparation for the oil economy is uncertain, the efforts to create the conditions for sound oil resources management could provide a model for other mineral-rich developing countries to "bring to fruition the potential positive impacts" of petroleum projects.' In particular, some countries could replicate Chad's legal commitments to distribute oil revenues according to a specific development strategy. Other countries-especially those in which different national authorities conflict-might mirror the oversight mechanisms and establish an independent ad hoc committee similar to the College, and even empower this authority to settle disagreement within the power structure.

To what extent other mineral-rich countries will follow the model proposed by this project will not only depend on the success of the project in terms of economic development and political stability, but also on the will of governments, companies, and international or bilateral aid agencies to make similar commitments to those made in this project. Even if the project fulfills the expectations it raised, it is not certain whether other gfovernments would agree to implement identical reforms to Chad's, though it may be in the long-term interest of their populations and leaders. Nonetheless, the model that the Chad-Cameroon pipeline project provides could encourage reluctant international institutions to pressure and accompany governments in adopting structural and political reforms in return for their support in bringing other investors to the table. Only time will reveal whether the Chad-Cameroon pipeline can achieve its economic and political goals, and if the innovations born of this unique arrangement can provide the blueprint for future geopolitical and developmental change.

[Sidebar]
Chad has few alternatives to the pipeline for financing economic development.

[Sidebar]
Unfairly-distributed oil revenues are a major threat to stability and national development.

[Footnote]
NOTES
1 Mario Azevedo and Emmanuel Nnadozie, Chad: A Notion in Search of its Future (Boulder: Westview Press, 1998). Also, The World Bank, World Development Indicators (Washington, D.C.: The World Bank, 2000), CD-ROM.
2 Statement of Excellency Ould-Abdallah, Ahmedou (Ret.). The Chad-Cameroon Pipeline :ANew Model for Natural Resource Development, Hearing before the Subcommittee on Africa of the Committee on International Relations, House of Representatives, 107-75 (18 April 2OO2), 22. By May 2OOO, Peter Rosenblum, Associate Director for Harvard Law School's Human Rights Program, commented that "at the core is a challenge to the sovereignty of undemocratic rulers... Previously, no one would have interfered in the relations between an oil company and an African state." see Peter Rosenblum "Pipelines Politics in Chad," Current History (May 1999), 195-199- Quoted in Benjamin C. Esty, "The Chad-Cameroon Petroleum Development and Pipeline Project (A)," Harvard Business School cases (17 January 2OO2), IO. The Wall Street Journal reports: "The bankers agreed to join the project but with two key provisos: Exxon would submit its plans to bank scrutiny, and Chad would agree to the unprecedented step of relinquishing its oil sovereignty." Roger Thurow and Susan Warren, "A Global Journal Report-Pump Priming: In War on Poverty, Chad's Pipeline Plays Unusual Role-To Unlock Buried Wealth, Nation Gives Up Control Over Spending Its Cash-A Sears Catalog' From Exxon," The Wall Street Journal (24 june 2003).
3 "EssoChad Documents," available online at: http://www.esso.com/eaff/essochad/documentation, and "Chad-Cameroon Petroleum Development and Pipeline Project," available at: http://www.worldbank.org/afr/ccproj/project/pro_over view.htm.
4 More precisely, the Law prescribes that IO percent of direct resources are to be held in trust for future generations in savings accounts in an international financial institution, 72 percent of royalties and 76.5 percent of dividends are earmarked for additional spending in priority sectors of development, 13-5 percent are set aside for operating and investment costs of the State until 31 December 2007, after which they will go to the priority sectors, and the remaining 4-5 percent oi royalties are tagged for the regional development plan in Doba in addition to other usual state spending. The legal prescriptions on oil revenues management are better known under the following form: IO percent of the direct revenues are allocated to a fund for future generations, the remaining 90 percent are divided with 8o percent of royalties and 85 percent of dividends to the priority sectors, 15 percent to operating expenses for 5 years from the production start, and 5 percent of royalties for the producing region. If we take the direct revenues as reference for the allocation of eveiy portion of those revenues and not the 90 percent, which is usually done, then we obtain the first numbers (15 percent of 90 percent of the direct revenues gives 13.5 percent of the total direct revenues). The first description of the law is more precise and the second one, which is the general way, is a little misleading.
5 In English, "Committee for the Control and Supervision of oil Resources."
6 Republic of Chad, Law Governing the Management of oil Revenues, Law OOI/PR/99 modified by the Law OI6/PR/2OOO N'Djamena, 1999; Decree Appointing the Members of the College de Controle et de Surveillance des Ressources Petrolieres (CCSRP), 579/PR/PM/2OOO, N'Djamena, 2OOO (ad hoc oversight committee); Decree Pursuant to the Organization, Functioning, and Conditions of the CCSRP's Control and Oversight, 24-O/PR/MEF/O3, N'Djamena, 2OO3 (abrogating the precedent decree of 2001); Decree Establishing the Sterilization Mechanism of the oil Revenues from the Three Fields Kome, Miandoum and Bolobo (in the Doba basin), 238/PR/MEF/O3, N'Djamena, 2OO3; Decree Establishing the Stabilisation Mechanism of the Expenses Financed by oil Revenues, 239/PR/MEF/O3, N'Djamena, 2003.
7 Defined in Chad's interim Poverty Reduction Strategy Paper (PRSP). The PRSP is a document prepared by poor countries that define their strategy to alleviate poverty and is endorsed by the World Bank and the International Monetary Fund.
8 A Member of Parliament and active opposition leader, Ngarlejy Yorongar, filed complaint to the Inspection Panel in March 2OO1, where it alleged violations of the World Bank's policies in several ways, including environment, resettlement, poverty reduction, economic evaluation, and monitoring. In September 2OO2, the Panel judged that non-compliance effectively occurred in 2O instances. Inspection Panel, Report on Chad-Cameroon Pipeline Project, September 2OO2. Quoted in Ian Gaiy and Terry Lynn Karl, Bottom of the Barrels: Africa's oil Boom and the Poor (Baltimore: Catholic Relief Services, 2003), 66.
9 International Advisory Group, Chad-Cameroon Petroleum Development and Pipeline Project: Report of Mission to Cameroon and Chad july IQ-August 3, 2OO1, 28 September 2OOI.
10 To make up for this lack of capacity, the College and the newly created ministries' administrative and financial offices hired technical staff (economists, experts in communication, public linance, procurement and management). Nearly thirty economists, public finance experts, and procurement specialists were thus hired, especially in the priority sectors. One of the goals of this technical assistance is to reduce delays in the spending cycle to prevent absorptive capacity problems while contributing to the training of local staff. However, World Bank's staff acknowledged that more work is needed, particularly in the areas of budget management and project identification. From an interview with Christine Richaud, World Bank Economist for Chad, on 2 September 2003.
11 Thurow and Warren, 2003.
12 see Amnesty International's 2003 Report on prisoners of conscience. Amnesty International, Chad Report 2OO3 (December 2OO2), available at: http://web.amnesty.org/report2OO3/tcd-summaiy-eg. As explained above, President Derby had some political opponents arrested in several occasions. The authority shut down Radio Liberty (Ghadian independent radio) for weeks before being reopened under popular pressure. Reported in the international media at the time and in The Chad-Cameroon Pipeline: A New Model for Natural Resource Development, Hearing before the Subcommittee on Africa of the Committee on International Relations, House of Representatives, 107-75, 18 April 2OO2. EPOZOP (Entente des Populations de la Zone Petroliere) has close ties with local communities in the Doba region.
13 Korinna Horta, Questions Concerning the World Bank and Chad/Cameroon oil and Pipeline Project, Environmental Defense Eund (March 1997).
14. Statement by P. Roscnblum, Hearing before the Subcommittee on Africa of the Committee on International Relations, House of Representatives, 107-75, 18 (April 2OO2), 21.
15 United Nations Integrated Regional Information Networks (IRIN), "Continued Militia Incursions Across Border With Chad," distributed by AllAfrica Global Media (30 September 2003), available at: http://allAfrica.com. see also "Clash on Chad-CAR Border," BBC (7 August 2OO2).
16 United Nations Agency, "Sudanese Refugees Hoeing Into Chad to Escape Air Attacks," distributed by AllAfrica Global Media (15 September 2003), available at http://allAfrica.com.
17 Libya occupied Northern Chad in the Aouzou for about ten years until forced out in 1987 and continued to claim the area until the International Court of justice ruled that Chad had sovereignty over the strip in 1994. In spite of trade relations between Nigeria and Chad, both countries entertain conflicting relations mainly due to border dispute around Lake Chad.
18 "Esso Chad Executive Summary," available at: http://www.esso.com/eaff/essochad/documentation/summary.

[Author Affiliation]
Aude Delescluse works for the Agence Francaise de Developpement in Lebanon. Previously, she was an energy consultant for the World Bank.



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Serious Thinking About Democratization
Thomas O Melia. Georgetown Journal of International Affairs. Washington: Winter 2004. Vol. 5, Iss. 1; pg. 131, 7 pgs
Abstract (Article Summary)
Melia reviews Democratic Institution Performance; Research and Policy Perspectives edited by Edward R. McMahon and Thomas A. P. Sinclair.

Full Text (2815 words)
Copyright Edmund A. Walsh School of Foreign Service Winter 2004



Serious Thinking About Democratization Edward R. McMahon and Thomas A.P. Sinclair, editors. Democratic Institution Performance; Research and Policy Perspectives. Westport, Connecticut: Praeger Publishers, 2002, 267 pp. $64.95

The promotion of democracy abroad has emerged as the conceptual lynchpin of U.S. foreign policy in the current Bush administration. Whenever the president and his senior officials cast "terror" as the principal threat to U.S. security todaywhether that terror is sponsored by states or by non-state actors, using weapons of mass destruction, suicide bombers, or small arms-democracy is generally presented as the solution. The remarkable address by President Bush on the occasion of the 2Oth anniversary of the National Endowment for Democracy, in which he declared a long-term national commitment to foster democracy throughout the Arab Middle East, and chided American allies in Egypt and Saudi Arabia to get with the program, may constitute the boldest expression of this ambitious strategy."The military prowess, economic and financial strength, and political capital of the American superpower are now to be harnessed to the promotion of democracy, not only because it is seen to be the right thing to do, but also as the way to guarantee the long-term safety and prosperity of the United States. Despite the considerable resources at the government's disposal, the results thus far have been decidedly mixed. The question remains whether adequate know-how exists in the United States to make democracy promotion a success.

Of course, democracy promotion is nothing new to U.S. foreign policy. It has been a slowly growing theme in U.S. foreign policy since Woodrow Wilson first spoke about the "rights of small nations" at Versailles. Sometimes, this interest has extended beyond the rhetorical. In the late ig7Os, for instance, Jimmy Garter made human rights a priority for U.S. foreign relations-even to the point of alienating traditional allies and client states. Garter was reluctant, however, to go beyond individual casework and address the larger, structural problems stemming from authoritarian rule. He did not contemplate the ouster or overthrow of the repressive governments that practiced the human rights abuses he condemned.

During Ronald Reagan's presidency, the launch of the National Endowment for Democracy (NED) and other initiatives substantially ratcheted up the U.S. rhetorical and operational devotion to democratization. The George H.W. Bush and Clinton administrations then institutionalized and routinized the U.S. program for promoting democracy. In post-conflict situations, or in lands where regimes had collapsed (as in much of the formerly Communist world), pressuring and/or helping governments to improve their electoral and judiciary systems became a regular part of the foreign policy "tool kit." During the nineties, it even became commonplace for aid agencies-in the United States and elsewhere in the Western world-to provide substantial financial and technical support to civil society organizations existing mainly to monitor the quality of democratic governance.

With the election of George W. Bush, however, it seemed that the growing U.S. enthusiasm for nation-building and democracy promotion would recede. Bush had campaigned in 2000 against what he saw as the over-extension of American military and political resources to faraway lands of no strategic consequence to the United States-places like Haiti, Kosovo, and Bosnia. His campaign's chief foreign policy advisor, Condoleezza Rice, cautioned against "attachment to largely symbolic agreements and...pursuit of, at best, illusory 'norms' of international behavior." Describing in Foreign Affairs how a Republican foreign policy would be different from its predecessor's, Rice insisted "American policy must...separate the important from the trivial." She made it clear that the Clinton administration's efforts at nation-building belonged to the latter category.2

9/11 changed all of that. President George W. Bush has stated clearly that there is no limit to the distance he will go or the measures he will use to change the nature of foreign governments to suit U.S. interests. he has demonstrated the United States's willingness to establish democratic governments in even the most formidable of places by forcefully effecting regime change in Afghanistan and Iraq. The dramatic new approach to foreign aid contained in the president's Millennium Challenge Account bolsters the case that democracy promotion is actually the motive behind these military operations. This promises to allocate a substantial portion of foreign aid to developing countries on the basis of demonstrated achievement of long-term institutional reform of economies and polities alike. The Middle East Partnership Initiative, a particular favorite of secretary of State Colin Powell, focuses the global democratization and reform strategy in this most challenging and important region-and seems to indicate that, while there are differences within the Cabinet on other aspects of policy, there is unanimity on the goal of promoting democracy.

Despite the varied language that George W. Bush and his advisers employ-the president himself seems to use "freedom" and "liberty" interchangeably with "democracy"-they mince no words when they commit the United States to this audacious mission.3 National security Advisor Condoleezza Rice has underscored the depth of the commitment by declaring that the United States and its allies "must make a generational commitment to helping the people of the Middle East transform their region."4

Yet, the hesitations and missteps to date in the political reconstruction of both Afghanistan and Iraq demonstrate that the United States has not developed fully or finely tuned its approach to fostering democracy abroad. One reason, perhaps, is that public investment in developing the country's international democracy-building capacity pales in comparison to the investment in its warfighting capacity. Nonetheless, a growing cadre of professionals exists at the State Department and the United States Agency for International Development (USAID) with practical experience in managing nation-building efforts, both in cooperative multinational contexts and in those cases in which the United States flies solo. An even larger pool of talented political development professionals has emerged in the employ of forprofit firms and non-profit enterprises. U.S. taxpayers provide most of the funds for these endeavors, but they are sometimes funded by the United Nations or other governments. Though these are mainly U.S. organizations, the personnel actually hail from dozens of countries and bring a wide range of experience to the table.

There is also a growing community of scholars and analysts-drawn from political science, law, anthropology, sociology, and elsewhere in the academy-pondering the nature of democracy and the process of democratization. Some former government officials have written very informative documents based on their particular experiences. These include Rick Barton, formerly at USAID and the UN, who now directs the Program on Conflict and Reconstruction at the Center for Strategic and International Studies (CSIS), and James Dobbins, a retired diplomat and veteran of Haiti, Kosovo and Somalia, who is now at the Rand Corporation.5 The Office of Democracy and Governance of the USAID has produced the most comprehensive collection of publications examining programs USAID itself has sponsored, as well as some that propose ways to think about new programs.

Nevertheless, there are simply not enough centers of research and policy analysis that enlist practitioners, investors, and analysts to sort through the nuts and bolts of democratization strategies. A few such venues exist, but they are still relatively few in number. Tom Carothers has been the most active convener of these sorts of discussions at the Carnegie Endowment for International Peace (CEIP). Mike McFaul and Larry Diamond weigh in from the Hoover Institution at Stanford University. The Journal of Democracy published by the NED has become the leading forum for thoughtful writing on these themes. Still, there is not nearly enough serious, original thinking and writing available to inform those who want to go abroad to promote democracy-whatever their motivations. Certainly, the first few months of political reconstruction in Iraq and Afghanistan confirm that there are questions to be answered, or at least examined, more thoughtfully.

The Center for Democratic Performance at the State University of New York at Binghamton, established in 1999, represents an important addition to the field. Directed by Edward R. McMahon, a former U.S. diplomat and senior official at the National Democratic Institute for International Affairs, the Center brings together practitioners and scholars in a focused and practical way in order to advance the collective understanding of these issues. Democratic Institution Performance: Research and Policy Perspectives is one of the valuable fruits of this endeavor. The volume begins with an excellent scene-setter on the "paradox of democracy," written by lead editor McMahon and researcher Brian Nussbaum. They aptly describe how, though "democracy has never been more widely practiced than in our present time...our understanding of how it is practiced and perpetuated remains quite limited."'' Moreover, they observe, an "inability to predict what choices are most appropriate for a particular nation at a given time continues to challenge democratic practitioners and scholars alike."8

Collecting chapters from fifteen different writers and assembling them into a coherent book poses a daunting task. McMahon has nevertheless managed to do just that in this work on a potentially unwieldy topic. The resulting collection of thoughtful essays takes the reader on an intellectual tour of key factors in democratic polities-particularly the challenges inherent in efforts to foster democracy elsewhere.

Written principally by scholars of democracy at home and abroad, the work is leavened with contributions from practitioners who have been on the front lines providing advice and information around the world. Democracy promoters-agencies and organizations trying to shape elections and political parties, direct civic education projects, and professionalize governing institutions-have too often shied away from rigorous intellectual scrutiny of their premises and their programs. Academic writers, for their part, frequently appear unconcerned with the very real problems of funding cycles, recruitment and deployment challenges, and the immense difficulty of trying to help real-life political leaders improve their performance without undermining their viability in unforgiving local political environments. Bringing the two perspectives together under one roof, or between book covers, brings out the best of each.

McMahon divides the book into two major sections. One addresses the domestic aspects of democratization-the internal dynamics and tensions that give rise to (or thwart) the democratic impulse of nations. The other section looks at the external facets of the democratization process. Specifically, these chapters analyze what various actors in the international community, from gov-ernments to privately managed non-governmental organizations, can do to facilitate democratization. Chapters discuss the interplay between political parties and civic associations; reconsider the centrality of civil society-and the individual citizen-to the functioning of democracies; review the limits to popular support for democracy in certain African countries; and assess "transitional justice" in post-conflict situations.

Perhaps the most provocative contribution in this section comes from the most famous of the distinguished authors, AIiA. Mazrui. Dr. Mazrui looks at the rise of "Shariacracy" in presentday, democratizing Nigeria. He views the enactment of strict Islamic laws in the northern states of Nigeria as a consequence of globalization-a kind of nationalist reply to this region's marginalization in the world's economy and culture. Like the other chapters in this section, Mazrui's essay offers a novel way to look at what might at first glance seem a familiar topic.

The external discussion begins with two solid chapters on the emergence of international actors-official and nongovernmental agencies-both as agents of change and as arbiters of the quality of political processes in other countries. Eric Bjornlund, the most widely experienced practitioner of democracy-promotion programs among these authors, offers sober reflections on the bureaucratic machinations that can impair donor efforts to help local actors. Bjornlund has advised election-monitoring organizations in places as diverse as Zambia, Palestine, and Indonesia, and what he has seen troubles him. The Indonesia experience, in particular, suggests that foreign donors and advisers can sometimes fail to appreciate the larger purpose of their activities: "using elections as a catalyst for the process of building democratic practices and institutions." The result, he writes, was that the international community "inadvertently hampered the new civic organizations and the momentum for reform"-a devastating indictment.9

Retired U.S. diplomat Elizabeth Spiro Clark discusses the evolution of international standards in determining the political processes necessary for countries to be considered democratic. She notes several trends that have emerged in recent years. One is the enhancement, or "hardening," of standards by such intergovernmental bodies such as the Organization for security and Cooperation in Europe (OSGE) and the Organization of American States (OAS), where concern about the quality of member states' elections has become part of the institutions' mission. Another important trend has been the broadening of the focus in democracy assistance to include not only elections, but also a range of institutions and behaviors that can indicate whether a country is democratizing or not. Further, she notes that each new transition offers the prospect of new innovations in sequencing, methods, and political architecture.

The final three chapters address the gap between theory and practice-the cultural divide between policy-makers and scholarly researchers-that drives the collection. Harry Blair, whom USAID has frequently engaged to assess the impact of its programs, offers a candid review of the USAID's efforts to demonstrate the actual impact its hundreds of millions of dollars in programs have had. Shaheen Mozaffar looks closely at the intellectual paradigms that compete for dominance among the functionaries who frame USAID's programs, and laments the limited pool of talent available to bridge the estranged communities of academia and policy-makers: "only a limited number of scholars who have developed skills combining substantive professional and area expertise, intellectual entrepreneurialism, and mastery of the bureaucratic maze are able to impact USAID democracy programs."

The powerful final chapter, by Edward Friedman of the University of Wisconsin-Madison, brings together the various intellectual and political factors in an essay entitled "The Art of Democratic Grafting and Its Limits." His sharpedged review of the experts' analytical errors over the years, combined with a practical-minded appreciation for the political world, leaves the reader nodding in agreement at the statement: "analysts of democratic Grafting should approach their topic with great humility and selfrestraint, cognizant of the limited value of general theory."11

While the book might seem limited in scope because it revolves largely around the work of Americans promoting democracy abroad-and also around the particular experience of USAID-it must be said that until very recently democratic development action in many parts of the world has been implemented mainly by Americans and funded by USAID. While the democracy movement is truly worldwide, and has increasingly been institutionalized as a feature of other nations' foreign policies-usually as a component of development assistancethe United States remains by far the most significant actor in this field. Other countries' aid programs have tended to follow where the Americans PO first, and private philanthropists, other than the remarkable George Soros, have simply not involved themselves in the process of democracy promotion to any significant extent.

Ned McMahon has recently moved to the University of Vermont at Burlington and launched another new center of inquiry into democratization strategies. One hopes this means another institutional contribution will be forthcoming before long, and that the policymakers will pay ever greater attention. Meanwhile, now that the Pentagon has suddenly emerged as a better-endowed, better-armed rival to USAID and the Department of State in the democracy promotion arena, one hopes those planning the political reconstruction of Iraq at the Coalition Provisional Authority in Baghdad brought along a few copies of Democratic Institution Performance to light the way forward.

[Sidebar]
There are Simply not enough centers of research to sort through the nuts and bolts of democratization strategies.

[Sidebar]
Indonesia, the international community "inadvertently hampered the new civic organizations and the momentum for reform."

[Footnote]
NOTES
1 George W. Rush, "Remarks at the 29th Anniversary of the National Endowment for Democracy, November 6, 2003," Internet, http://whitehouse.gov/news/releases/2003/11/print/2 0031106-2.html (Date Accessed: 12 November 2003).
2 Gondoleezza Rice, "Campaign 2000: Promoting the National Interest," Foreign Affairs 79, no. 1 (2000).
3 See, for instance, the President's televised address to the nation of 7 September 2003, Internet, http://www.whitehou.se.gov/news/releas- es/2003/09/20030907-1.html (Date Accessed: 27 October 2003).
4 Gondoleezza Rice, "Remarks to the 28th Annual Convention of the National Association of Black Journalists, Internet, http://www.whitehouse.gov/news/releases/2003/08/200308071.html (Date Accessed: 27 October 2003).
5 See, for instance, Frederick D. Barton & Bathsheba N. Grocker, "A Wiser Peace: An Action Strategy for a Post-Conflict Iraq," available online at http://csis.org/isp/wiserpeace.pdi and James Dobbins, et al., "America's Role in Nation-Building: From Germany to Iraq," available online at http://www.rand.org/publications/MR/MR1753/.
6 Available online at: http://www.usaid.gov/ democracy/techpubs.
7 Edward R. McMahon and Brian Nussbaum, "The Paradox of Democracy" in Democratic Institution Performance; Research and Policy Perspectives (Westport, CT: Praeger Publishers, 2003), 3-4.
8 Ibid, 4.
9 Eric Bjornlund, "Lessons from Domestic Election Monitoring," in Democratic Institution Performance: Research and Policy Perspectives (Westport, GT: Praeger Publishers, 2003), 105.
10 Shaheen Mozaffar, "The Research-Policy Nexus and U.S. Democracy Assistance," in Democratic Institution Performance; Research and Policy Perspectives (Westport, CT: Praeger Publishers, 2003), 200.
11 Edward Friedman, "The Art of Democratic Grafting and its Limits," in Democratic Institution Performance; Research and Policy Perspectives (Westport, CT: Praeger Publishers, 2003), 227.

[Author Affiliation]
Thomas O. Melia is Director of Research at the Institute for the Study of Diplomacy, at Georgetown University's School of Foreign Service.

>> IRAQ STORIES...

Iraq Contracts Give Halliburton Headaches
28 minutes ago
By MATT KELLEY, Associated Press Writer
WASHINGTON - Halliburton Co. has reaped as much as $6 billion in contracts from the U.S. invasion of Iraq (news - web sites), but improprieties in those military contracts have also given Vice President Dick Cheney (news - web sites)'s former company high-profile headaches.
Pentagon (news - web sites) auditors have criticized Halliburton's estimating, spending and subcontracting, and they plan to begin withholding up to $300 million in payments next month. The Justice Department (news - web sites) is investigating allegations of overcharges, bribes and kickbacks. Democrats have accused the company of war profiteering.
Even some Wall Street analysts are asking whether Halliburton would be better off jettisoning its Iraq contracts.
"From the shareholders' point of view, don't you have to consider whether it's worth it?" Jim Wicklund of Banc of America Securities asked Halliburton executives during a March 11 conference call with investment analysts.
Halliburton is fighting back, strongly denying wrongdoing and claiming to be the victim of a political smear campaign. The company set aside nearly $200 million to repay the Pentagon for any overcharges. Executives reassured analysts that Halliburton has enough cash on hand -- about $2 billion -- to weather any more repayments or penalties.
Having a clean contracting system in Iraq is essential because it's the first experience Iraqis will have with the American model of business-government partnerships, said Peter Singer, a former Defense Department official who wrote a book on military contracting.
"The success in the war in Iraq and the follow-up to it depends on not just how good a job our soldiers do but also on how good a job our contractors do," said Singer, a fellow at the Brookings Institution. "If we award contracts to firms that aren't performing to the utmost, it's not only a waste of taxpayer money but it also harms national security."
Halliburton also is spending millions on a nationwide television advertising campaign featuring images of Halliburton workers helping American troops.
The company's defenders say Halliburton had to perform a lot of costly and dangerous work very quickly, with minimal government oversight at the beginning.
"The root cause of a lot of these problems is that it's a huge, rapidly evolving enterprise," said Steven Schooner, a contracting expert and assistant law professor at George Washington University. "When the money was spent the government was not applying the same type of resources in terms of planning, thought and caution that we normally expect and demand in public contracting."
Halliburton's detractors are undeterred.
"The entire Halliburton affair represents the worst in government contracts with private companies: influence peddling, kickbacks, overcharging and no-bid deals," Sen. Frank Lautenberg, D-N.J., said this week.
Bush administration officials say Vice President Cheney -- a former defense secretary -- has nothing to do with awarding contracts to the company he led from 1995 to 2000.
Through subsidiary KBR, Halliburton's experience with military contracts dates back to World War II. The company did similar logistics work for troops in Vietnam, the first Gulf War (news - web sites), Bosnia and Kosovo.
Halliburton says 15 percent of its revenue last year came from work in Iraq. That money came mainly from two contracts with KBR, formerly known as Kellogg, Brown & Root.
The biggest contract is with the Army to provide logistical support for troops -- meal service, laundry, communications and housing. The second is a contract with the Army Corps of Engineers to fight oil well fires and rebuild Iraq's devastated oil industry.
Under criticism for awarding the oil contract outside of the usual competitive bidding process, the Army split the oil reconstruction work into two parts and held a bidding competition late last year. Halliburton got one of those contracts to reconstruct oil facilities in southern Iraq. The contract was worth more than $1 billion.
Problems already identified with Halliburton's business include:
_ Allegations it overcharged by $61 million for gasoline it delivered from Kuwait to civilians in Iraq. Pentagon auditors say Halliburton did not fully justify spending more than $1 extra per gallon for gasoline delivered from Kuwait than gas it bought from Turkish companies. Halliburton says the higher price reflected charges by the Kuwaiti subcontractor that was the lowest bidder. Halliburton also says it came up with the idea of tapping the Turkish market and saved the government more than $100 million.
_ A Pentagon audit that concluded Halliburton charged millions for meals never served to troops. Halliburton has repaid $36 million and set aside an additional $141 million to reimburse the military for possible overcharges. On April 1, the Defense Department plans to begin withholding 15 percent of payments to Halliburton -- up to $300 million -- because of the alleged overcharging. Halliburton officials say problems might have occurred because the number of troops in and near Iraq often changed quickly and drastically.
_ A Defense Department probe into allegations a Kuwaiti subcontractor paid kickbacks to two former Halliburton employees. The company says it repaid $6 million to the government after it discovered the scheme.
_ Widespread problems with estimating costs, justifying spending and following federal regulations. The Defense Contract Audit Agency found so many faults with KBR's practices that it warned the Defense Contract Management Agency the company's estimates were unreliable. Halliburton says any glitches were the result of working quickly to establish services in a war zone.
_Pentagon and Justice Department investigations into possible overcharging on KBR contracts to support troops in Bosnia and Kosovo.
Federal authorities also are investigating whether Halliburton violated U.S. laws prohibiting deals with Iran, and U.S. and French authorities are probing whether KBR was involved in paying $180 million in bribes to Nigerian officials to get favorable treatment for a natural gas project.
Halliburton reported making $3.6 billion in revenue from Iraq contracts last year. Executives say the company is taking in about $1 billion a month from its work in Iraq, bringing its total revenue to about $6 billion.

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CIA finds new data but no weapons in Iraq
By KATHERINE PFLEGER SHRADER
ASSOCIATED PRESS WRITER
U.S. trained Iraqi border police officers drive at the Muntheria Border Crossing in the Iraqi - Iranian border, northeastern Iraq, Monday, March 29, 2004. Top U.S. civil administrator in Iraq L. Paul Bremer visited the border Monday and met with civil and military officials at the border operation center. Muntheria is one of the three border entry points that remains open along the Iraqi-Iranian border. The other border entry points have been closed to control illegal entries. (AP Photo/Murad Sezer)
WASHINGTON -- U.S. weapons hunters in Iraq have found more evidence Saddam Hussein's regime had civilian factories able to quickly produce biological and chemical weapons, the CIA's top weapons inspector told senators Tuesday. But they still have not found any weapons.
The CIA's special adviser on the weapons hunt, Charles Duelfer, said he did not know how much longer the weapons hunt might take.
"The picture is much more complicated than I anticipated going in," Duelfer said at a Capitol Hill press conference, nine weeks after he took over the weapons search.
In a closed session with the Senate Armed Services Committee, Duelfer said the Iraq Survey Group has found new evidence that Iraqi scientists flight tested long-range ballistic missiles and unmanned aerial vehicles that "easily exceeded" U.N. limits of 93 miles.
And the survey group has new information indicating the regime engaged in ongoing research to produce chemical or biological weapons on short notice, using civilian - or "dual use" - facilities.
However, in declassified testimony shared with the media, Duelfer didn't break significant ground on the weapons hunt, saying he lacked sufficient information to draw conclusions about what Saddam had.
"Imagine yourself being asked to determine the secret, behind the scenes intentions of our own government with respect to its most secret weapons programs after talking to a few hundred folks who may or may not have been intimately involved, with only a small fraction of documents available, and with a leadership that is not broken and willing to discuss its inner secrets," Duelfer said in the declassified remarks.
"How much would you really understand?"
Duelfer took over the job of top civilian weapons inspector after his predecessor, David Kay, resigned in January and told Congress "we were almost all wrong" about Saddam's weapons programs. In a flurry of public statements questioning whether weapons would ever be found, Kay renewed the debate about the very weapons of mass destruction programs that the Bush administration used to justify last year's Iraq invasion.
On Tuesday, Senate Armed Services Chairman John Warner, R-Va., and Intelligence Chairman Pat Roberts, R-Kansas, both called for patience as the search continues. "It ain't over til it's over," Roberts said.
However, with the November elections looming, Democrats are questioning - some loudly - whether the administration overstated the threat Saddam posed and the evidence about his weapons of mass destruction.
Duelfer said he has tried to determine the Saddam regime's intentions for the activities investigators have uncovered: Were weapons hidden that were not readily available? Was there a plan for a stepped-up production capacity? Were WMD technologies being developed for the missile and UAV programs? When did the leadership want to see results?
Duelfer said the survey group continues to look for weapons of mass destruction and regularly receives reports - "some quite intriguing and credible" - about possible concealed stashes buried or hidden across Iraq.
He said the survey group also questions former regime officials. However, many are still reluctant to talk because they fear prosecution, as well as retribution from former regime supporters. For these and other reasons, he said, the survey group is struggling to get clear, truthful information.
"We do not know whether Saddam was concealing WMD in the final years or planning to resume production once sanctions were lifted," Duelfer said. "We do not know what he ordered his senior ministers to undertake. We do not know how the disparate activities we have identified link together."

Associated Press writer Pauline Jelinek contributed to this report.

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U.N. Envoy Sent to Shape Plan for Iraq
Key Players Still at Odds Over Transition Process
By Robin Wright and Anthony Shadid
Washington Post Staff Writers
Tuesday, March 30, 2004; Page A13
A U.N. special envoy heads to Baghdad this week to chart a course for forming a new Iraqi government in just six to eight weeks, amid growing signs that the pivotal players in Iraq's political drama are deeply divided over how to proceed.
With a new sense of urgency, the United Nations is dispatching envoy Lakhdar Brahimi to begin deliberations, while the Bush administration yesterday dispatched the National Security Council's Iraq troubleshooter, Robert Blackwill, to help set the stage for Brahimi's mission and pressure the Iraqi Governing Council to cooperate, U.S. officials said.
The key problem is that Iraqis are deeply split, with many on the council jockeying to hold on to power despite recent polls showing that its 25 members have limited popular backing, according to Iraqi and U.S. officials. But the United Nations and the U.S.-led coalition also differ on what can realistically be achieved by the end of May, the deadline to get an interim government in place so the occupation can end on June 30, according to U.S. and U.N. officials.
With two plans abandoned over the past eight months because of public opposition, the Bush administration publicly insists it is open to new ideas and has turned over the deliberations to Brahimi, State Department and White House officials said. But coalition officials are increasingly -- and reluctantly -- convinced that there is no viable alternative except to turn political authority over to an expanded version of the U.S.-appointed governing council, according to officials of coalition countries.
"We have no particular option, and time is running short. An expanded governing council is looking more likely than not, but it's not settled. The most important thing is for Iraqis to be comfortable with it," said a White House official who spoke on the condition of anonymity.
"It boils down to believing there is no other alternative left. We're not philosophically against any other ideas and we're willing to let Brahimi take a shot . . . and we'll support him in any way we can. But we've tried everything -- and what else is there?" added a State Department official.
Brahimi, set to arrive in Iraq at week's end, believes that "everything is open to discussion," said a U.N. official involved in the trip, "as long as we can reach a political consensus and the new provisional administration is acceptable as much as possible to all Iraqis."
Brahimi, a former Algerian foreign minister, particularly wants to explore two ideas -- holding either a "roundtable" of Iraqi leaders or a wider national convention -- both of which are similar to the loya jirga assembly that selected Afghanistan's postwar government after the U.S. invasion ousted the Taliban, officials from coalition countries said.
Coalition officials are concerned that time has already run out for both ideas. The central problem for any option that requires appointing a new group of Iraqis to help create a government is in figuring out who should choose that group and how many members it should have, coalition and U.N. officials said. Squabbling among Iraqis has been a complicating problem since the occupation began last year.
Coalition and U.N. officials said that, at this late date, they want to limit the number of Iraqis involved in picking a government -- or in the interim government itself -- to keep the process from becoming unwieldy. Given public posturing, they fear any attempt to name an additional 25 or 50 people to some newly formed group will lead to calls for 50 or 100 appointments.
Looming in the background of all discussions, however, is Grand Ayatollah Ali Sistani, Iraq's popular cleric whose opposition torpedoed two earlier U.S. plans. Officials from both the U.S.-led coalition and the United Nations say they recognize that Sistani's objections to any new proposal would almost certainly doom it, too -- and further complicate the handover of sovereignty from U.S. administrator L. Paul Bremer.
The majority of governing council members are pressing for either transforming the council, as is, into an interim government, or enlarging it modestly, said Iraqi officials. "We can't start July 1 with a brand-new government," said Adel Abdel-Mehdi, a leader of the Supreme Council for the Islamic Revolution in Iraq. "It will be more practical and much easier to expand the governing council, and they will assure this question of continuity."
But some council members recognize the danger of rejection if a new government is not viewed as properly representative. "We have to give other people the chance to participate, to have a say, to be part of the process so that they will support it," said Mahmoud Othman, a Kurdish member of the council.
U.N. officials are also signaling alarm over the limited time to organize elections by year's end. In Baghdad yesterday, chief U.N. elections director Carina Perelli said election plans must be made by the end of May if that timetable is to work.
"We need to make sure that between now and the 31st of January there is a modicum of security that will make the Iraqi people feel that they can go to the polls, that they can run as candidates without extreme fear and that they don't pull out of the process," she said.
Shadid reported from Baghdad. Staff writers Sewell Chan in Baghdad and Colum Lynch at the United Nations contributed to this report.
-----------------------------------------------------------------

>> WASHINGTON WATCH...


National security
The blame game
Mar 25th 2004 | WASHINGTON, DC
From The Economist print edition
Was Iraq a distraction from the war against America's real enemies? And could those enemies have been countered earlier?
GEORGE BUSH is running as a war president, a man willing to take the hard decisions needed to defend America from existential threat. As evidence, he claims he took the danger of global terrorism very seriously even before the attacks of September 11th 2001, and that since then he has prosecuted the war on terror with the utmost possible vigour, including the decision to overthrow Saddam Hussein.
Given the significance of his war leadership, a credible challenge to either of his claims would be a matter of the utmost consequence. This week, both came under fire from a variety of reputable sources in Washington. Their criticism could resonate far beyond the Beltway because Americans have consistently said that, on terrorism, they trust Mr Bush more than they do John Kerry, his Democratic rival.
On Tuesday March 23rd, the commission set up by Congress to investigate the al-Qaeda attacks released preliminary reports criticising both the Bush and Clinton administrations for their responses to repeated assaults by al-Qaeda on American targets in the 1990s. It argues that both governments focused too much on diplomatic efforts (for example, to try to get Afghanistan to expel Osama bin Laden) rather than military options. It claims intelligence reports to Mr Bush had given warning of a potentially catastrophic terrorist attack against American targets (warnings that were later acknowledged in testimony by Colin Powell, the secretary of state, and Donald Rumsfeld, the secretary of defence). And it added new details of four opportunities to capture Mr bin Laden himself between December 1998 and July 1999, which it claimed the Clinton administration failed to grasp for fear of killing innocent bystanders.
This was bad enough but, the day before, a new book by Richard Clarke ("Against All Enemies", Free Press) levelled accusations that could prove even more damaging. Mr Clarke, the counter-terrorism co-ordinator in both the Bush and Clinton administrations, argues that Mr Clinton took the threat of al-Qaeda somewhat more seriously than the Bush administration (and even had successes against it, such as foiling a plot to bomb Los Angeles airport and a hotel in Jordan during the millennium celebrations and disrupting its attempt to take over Bosnia during the Yugoslav wars). The Bush administration was weaker, Mr Clarke claims, because members of the president's inner circle were distracted by their obsession with Saddam Hussein. Before 9/11, they thought the danger from al-Qaeda important; they did not think it urgent.
Mr Clarke says he asked the new administration within a week of its inauguration to discuss the threat from al-Qaeda at the highest (cabinet) level. But such a meeting did not take place until nine months later--only a week before the attacks, and too late to make a difference. Instead, the issue was discussed at a lower level, that of the deputy secretaries. At the first meeting, in Mr Clarke's telling, Paul Wolfowitz, the deputy defence secretary, said "I just don't understand why we are beginning by talking about this one man bin Laden. There are others that do [pose an immediate and serious threat] as well, at least as much. Iraqi terrorism, for example."
The charge that the administration was slow to appreciate the full extent of al-Qaeda's threat may well be politically harmful. In testimony before the commission on March 24th, Mr Clarke dramatically apologised to the relatives of 9/11 victims sitting in the room: "Your government failed you...I failed you." And the charge that the Bush team was wrongly focused on Iraq instead corroborates the growing view that the president and his team are stubborn over matters of national security (a view that stems partly from the administration's insistence that weapons of mass destruction would be found in Iraq). John Kerry has been repeating the charge of stubbornness at every chance he gets.
The administration has responded to Mr Clarke's charges with a torrent of personal censure, impugning his motives by accusing him of everything from frustrated ambition to political disloyalty and to being "out of the loop" (Dick Cheney's term). Given Mr Clarke's background--he arguably knows as much about al-Qaeda as anyone in America--this attack may not work.
But Mr Clarke's central charge is probably unproven. Given what was known or believed about Saddam in early 2001, the administration had every cause to worry about Iraq when it came into office. The real question is whether it could have done more than it did against al-Qaeda, regardless of the reason.
Mr Clarke says it could. He argues that the administration could have strengthened the Northern Alliance, the armed opposition group fighting the Taliban for control of Afghanistan. It could also have pushed harder to deploy Predator drone aircraft over Afghanistan to kill Mr bin Laden before 9/11. It could have spent more money reducing its vulnerabilities at home (in fact, the Justice Department did not list fighting terrorism as one of its main goals before 9/11). It could have done more to encourage, say, educational alternatives to radical Islamism in Muslim countries threatened by al-Qaeda.
The report by the 9/11 commission provided some corroboration for these claims of negligence to act. So, this week, did internal administration documents which showed that, after 9/11, the Office of Management and Budget cut by two-thirds a request for $1.5 billion of additional counter-terrorism funding from the Federal Bureau of Investigation.
In reply, Condoleezza Rice, the national security adviser, argued (in an article published in the Washington Post, not coincidentally, on the day Mr Clarke's book appeared) that the administration did in fact increase funding for counter-terrorism before 9/11. It did consider deploying armed Predators, but military experts said the craft were not ready. It rejected sending help to the Northern Alliance on the ground that the group was then too weak to make significant advances anyway. As several of the officials giving testimony to the commission argued, it would have been politically impossible to have sent substantial commando forces into Afghanistan before 9/11: neither surrounding countries nor the American Congress would have countenanced such a move.
Most important, Miss Rice argued, even if the administration had done everything Mr Clarke wanted, that would probably not have been enough to deal with al-Qaeda or stop the terrorist attacks on the World Trade Centre. Mr Bush, she said, was tired of "swatting flies". Something more was needed, which the administration was working on throughout 2001. But it was too late.
And there, for the moment, the debate rests. The Bush administration was urged to do more before 9/11, and chose not to, for reasons that seemed right and reasonable at the time. It was working on a strategy to deal with al-Qaeda, but too slowly to do any good. Some of its members were more concerned about Saddam Hussein than Osama bin Laden. Nothing here can be called indefensible. Whether this is the record of someone who treated al-Qaeda with the utmost seriousness is another matter.
Copyright ? 2004 The Economist Newspaper and The Economist Group. All rights reserved.

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Emergency Plans Found Lacking
GAO: Essential Services at Risk
By Christopher Lee
Washington Post Staff Writer
Tuesday, March 30, 2004; Page A17
Federal agencies have not developed adequate plans to ensure the continuation of essential government services during emergencies such as terrorist attacks, bad weather or unexpected building closures, a new study has found.
The report released yesterday by the General Accounting Office found that none of 23 major departments and agencies studied had fully complied with a six-year-old presidential directive to develop emergency plans in accordance with guidelines from the Federal Emergency Management Agency.
Agencies often omitted vital programs in compiling their lists of essential functions for their "continuity of operations" plans (COOP), according to the 26-page report. For instance, agencies did not list 20 of the 38 federal programs that were identified as "high impact" during efforts to shore up computer systems before the year 2000, the report's authors found.
While the authors of the GAO report did not name the omitted programs, the high-impact list includes such efforts as food stamps, unemployment insurance, Social Security benefits and the National Weather Service.
Moreover, no agency fully met all FEMA guidelines for the emergency plans, such as requirements for tests and training exercises, preservation of vital records, provisions for alternate facilities, and coordination with partner agencies in providing some services, the report found.
It apparantly was not all the agencies' fault. The study found that FEMA, which is now a part of the Department of Homeland Security, fell short on oversight of the plans and that its guidance for agencies lacked detail.
"If FEMA does not address these shortcomings, agency . . . plans may not be effective in ensuring that the most vital government services can be maintained in an emergency," the report said.
Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said in a statement yesterday that he was concerned by the report and would hold a hearing after the April congressional recess.
"In the last few years in Washington, we have seen enough events, both big and small, interrupt government operations to know the importance of continuity-of-operations plans," said Davis, who requested the GAO study.
In written comments to the GAO, Michael D. Brown, the undersecretary for emergency preparedness and response at Homeland Security, argued that the government was poised to deliver services in an emergency. Nevertheless, he agreed that FEMA needed to do more.
He wrote that the agency has already taken a number of steps, including plans for a government-wide exercise to test emergency plans in May, more outreach to smaller agencies and a fiscal 2005 budget proposal that would increase by $27 million funding for continuity-of-government programs.
"All of these FEMA efforts and activities are specifically designed to improve planning and to further ensure the delivery of essential government services during an emergency," Brown wrote in a two-page memo dated Feb. 18.

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Probe Finds $10 Million In Payments To Lobbyist
Indian Tribes Unaware of Fees
By Susan Schmidt
Washington Post Staff Writer
Tuesday, March 30, 2004; Page A01
Washington lobbyist Jack Abramoff received $10 million in previously undisclosed payments from a public relations executive whom he recommended for work with wealthy Indian tribes that operate casinos, congressional investigators have determined.
Abramoff, one of Washington's best-connected Republican lobbyists, this month was forced out of his firm, Greenberg Traurig, after revelations that he and the executive -- Michael S. Scanlon, a former spokesman for House Majority Leader Tom DeLay (R-Tex.) -- had persuaded four newly wealthy tribes to pay them fees of more than $45 million over the past three years. That amount rivals spending on public policy by some of the nation's biggest corporate interests.
In a letter sent to Abramoff late yesterday, Sen. John McCain (R-Ariz.) said investigators on his staff "have recently learned that Michael Scanlon or organizations with which he was in some way associated . . . recently paid you approximately $10 million."
The financial arrangements between the two men were not previously known to the tribes or to Abramoff's firm, according to tribe members and a source close to the investigation. In an interview last month, Abramoff denied having any financial stake in Scanlon's businesses.
But days later, Abramoff was questioned by members of Greenberg Traurig's executive committee. On March 3, a member of that committee, Richard A. Rosenbaum, announced that Abramoff had resigned after he "disclosed to the firm for the first time personal transactions and related conduct which are unacceptable to the firm." Rosenbaum did not elaborate.
Abbe Lowell, an attorney for Abramoff, declined yesterday to comment on whether Scanlon paid Abramoff. "It's inappropriate for me or anyone else to discuss financial affairs," he said, adding that Abramoff resigned from Greenberg Traurig because of the "swirling controversy that was impacting his ability to serve his clients." Abramoff has since joined Cassidy & Associates, another lobbying firm, as a consultant.
McCain, a senior member of the Indian Affairs Committee who has called the lobbying and public relations fees "disgraceful," launched an investigation earlier this month after a story about the fees was published in The Washington Post.
He also is looking into millions of dollars in campaign contributions that Abramoff advised the tribes to make, as well as payments from the tribes to other organizations with no clear connection to Indian concerns, among them a Scanlon think tank in Rehoboth Beach, Del., run by a former lifeguard and a yoga instructor. That organization, American International Center, also paid Greenberg Traurig $1.5 million.
In his letter, obtained by The Post, McCain asked Abramoff for "a list of all Scanlon Companies from which you received anything of value from 1998 through the present." A letter seeking the same information was sent to Scanlon.
The Saginaw Chippewa tribe in Michigan, which paid Abramoff and Scanlon $13.9 million over two years for public affairs work and lobbying, questioned them separately on Dec. 22 about their financial arrangements, tribal officials said yesterday.
A tribal staff member who attended the session and insisted on anonymity said yesterday that "they answered they were not in business together." A new majority of the tribal council elected late last year has canceled contracts with both Scanlon and Abramoff.
While lobbying fees must be disclosed publicly in reports filed with Congress, there is no such disclosure requirement on fees charged by public relations firms. Scanlon, 33, a former communications aide to DeLay, was paid at least $30 million in the past three years by the Saginaw Chippewas, the Louisiana Coushattas and the Agua Caliente tribe of Palm Springs, Calif., according to interviews and documents provided to The Post by tribal members.
In their request to Abramoff yesterday, Senate investigators also asked for a list "organized by tribe, of all persons or organizations that Greenberg Traurig or you asked any tribal client (or any of its members) of the firm to make a payment of money to, from 1998 through the present."
Senate investigators learned of the payments from Scanlon to Abramoff in recent days, sources familiar with the investigation said. Greenberg Traurig has agreed to cooperate in the Senate investigation. It has hired the Williams & Connolly law firm to represent its interests and respond to Senate investigators.
Lawyers at both firms yesterday declined to comment. Scanlon did not respond to requests for comment made by telephone and e-mail.
In an interview last month with The Post, Abramoff distanced himself from knowledge about "outside vendors" hired by the tribes. Abramoff asserted that "we are not active with the third-party vendors of the tribes." He acknowledged that "we have recommended that different tribes hire different vendors for different needs that they might have," but he added that client confidentiality required him to "defer in terms of any discussion of Scanlon or his companies or any specific third-party vendor."
An undisclosed financial relationship between Abramoff and Scanlon could create further problems for Greenberg Traurig. On March 5, the firm wrote to the Saginaw Chippewa tribe offering to refund moneys if an internal financial review the firm is conducting finds that the tribe was shortchanged.
"Should we determine that the services provided or charges made on your account were inappropriate, you should know that we are prepared to make adjustments in those charges and take all appropriate action," the letter said.
McCain yesterday requested the internal investigation report from Greenberg Traurig. He asked three tribes for documents relating to their contracts with Abramoff and Scanlon, as well as the results of any internal investigations they have undertaken.
Newly elected members of the Saginaw Chippewa tribal council, including the tribal chairman, Audrey Falcon, have welcomed McCain's investigation. They have agreed to provide documents and to waive their attorney-client privilege, as has the Coushatta tribe of Louisiana.
But some tribe members who hired Scanlon and Abramoff are now trying to block the document release. Former Saginaw Chippewa tribal chief Maynard Kahgegab Jr. and two other tribal council members sent a letter to Greenberg Traurig on March 25 warning that the full council has not voted to waive the attorney-client privilege and stating they would view document production to the Senate as a serious ethical breach.
Some of those tribal members are seeking to recall the new council majority over the cancellation of the Scanlon and Abramoff contracts.

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John Kerry's 'Alter Ego'
By Laura Blumenfeld
Washington Post Staff Writer
Tuesday, March 30, 2004; Page A17
When a Massachusetts official attacked Sen. John F. Kerry in the media, Kerry's chief of staff called to rein him in. The conversation grew heated, and the official growled, "So I criticized your guy. What are you gonna do, spank me?"
Perhaps. As chief of staff for the Massachusetts senator and presumed Democratic presidential nominee, David McKean handles all stripes of assignments. Observers describe McKean as Kerry's "alter ego," and his "confidence man." McKean is so in tune with Kerry's instincts, aides say, he will play a "significant role" in choosing a vice presidential running mate. His own name has been floated as a potential White House chief of staff.
What's more, he's Kerry's distant cousin.
"He's the most intensely loyal person John Kerry has working with him who can deal with the nitty-gritty ugly realities of fierce partisan politics," said historian Douglas Brinkley, author of the Kerry biography "Tour of Duty." "If there's a problem that needs to be solved, John turns to David."
While Kerry runs for president, McKean is running his Senate office. He supervises 27 staffers in Washington, and 14 in Massachusetts. He is a behind-the-scenes guy, built slim as if to fit in the shadows.
Lately, though, he is stepping out, meeting with visitors who, in quieter times, would have seen the senator.
"I'm a substitute," McKean said, taking a seat in Kerry's cavernous office. He recently met here with Halliburton's vice president, who complained that Kerry had failed to portray the good work Halliburton was doing in Iraq, McKean said. Kerry has criticized the administration for awarding no-bid contracts to Halliburton in Iraq.
But basically, McKean said, his job is "being a traffic cop. You're at a big, busy intersection. So many things are coming at you at the same time."
Some of those things coming at him now involve the presidential campaign. For instance, dealing with Republican charges that Kerry is weak on national security. McKean said his office is compiling a "real record" of Kerry's Senate votes on defense. The 18-year record will prove that "John has a mainstream, thoughtful approach to defense," McKean said.
And when Kerry's campaign was in disarray last summer, he called McKean at midnight for advice .
Colleagues say McKean is a modern-day version of the influential advisers he has written books about. McKean recently published "Tommy the Cork: Washington's Ultimate Insider From Roosevelt to Reagan." (As advised by the Senate Ethics Committee, McKean did not include his boss's name on the book jacket, to avoid any appearance of using his government position for commercial purposes.) He also co-authored "Friends in High Places: The Rise and Fall of Clark Clifford."
"David is as good and as loyal as they come," said Kerry, who added jokingly: "As a friend, I'm thrilled for David that his books have done so well. As his employer, I keep worrying about where he finds all this time to write."
From 10 p.m. until midnight, McKean would retreat to his home office dubbed "the bunker," after putting his three children to bed.
"I think about how much time we've shared with 'Tommy the Cork,' " said McKean's wife, Kathleen Kaye. "He's been travel companion and dinner guest -- they do occupy your space."
These days the Kerry campaign occupies their space. "The kids have darkened every window of the house with 'John Kerry for President' posters," Kaye said.
Although they are fifth cousins -- their mothers are Winthrops -- McKean and Kerry did not meet until 1976. McKean's brother, who was running for commissioner in Essex County, Mass., held a fundraiser. Four people showed up. One was Kerry.
McKean has held a number of positions with Kerry, including legislative assistant on foreign policy and banking. He assisted Kerry with the investigation of the Bank of Credit and Commerce International (BCCI). McKean recalled Kerry's questioning of Clifford during the BCCI hearings:
"During a break I told John, 'Press him harder.' John said, 'I'm not going to humiliate him. He's an old man.' "
In 1999, while Kerry's staff was widely regarded as foundering, McKean took over as chief of staff . One of the first things McKean did was cut his own salary by about $30,000. He gathered the dispirited staff in the conference room.
"He said, 'This is not the David McKean ego show. I'm here to make sure things run smoothly,' " recalled former staffer David Kass.
McKean ended a long-running feud with the staff of senior Massachusetts Sen. Edward M. Kennedy (D). He made sure the right people were in the room when Kerry had a difficult decision to make. He scheduled an hour a day for Kerry's exercise, so his boss wouldn't get cranky.
Most important, he leveled with Kerry. "Every politician needs someone who can say, 'That's a bad idea,' " said Jack Blum, a former Senate Foreign Relations Committee counsel. "David can do that without upsetting Kerry."
He also gave Kerry perhaps the most valuable advice of his political career. After watching Kerry turn in a dour performance on "Meet the Press," McKean took him aside and said: "Smile."
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>> SUICIDE BOMBING DOWN SOUTH...


Man Blows Himself Up in Bolivia Congress
3 minutes ago
By ALVARO ZUAZO, Associated Press Writer
LA PAZ, Bolivia - A suicide bomber detonated his explosive vest in a hallway of the Bolivian congress Tuesday, killing himself and wounding two police, authorities said. State-run television said the two officers had died.
The disgruntled miner demanding early retirement benefits made his way to a first-floor section of the building, away from the congressional chambers, Police Chief Guido Arandia said.
The man set off the explosives after security agents cleared the area as police were negotiating with him, Arandia said. State-run television reported the two officers were fatally wounded by the blast.
Much earlier Tuesday, police evacuated Congress amid reports miners planned to force their way into the building. Only a handful of congressional employees, and security agents, were reported by police to be inside at the time of the blast.
Television footage from state-run Canal 7 showed shattered glass carpeting a side street leading to the ornate colonial legislative palace. Heavily armed police quickly cordoned off the complex in downtown La Paz and were seen dragging one body into a taxi that sped off.
Arandia said the two officers had tried to talk to the man before he set off the device. Local television reported the man's vest was laden with dynamite but authorities had no immediate confirmation on the type of device used.
Authorities had no report on whether the man was acting alone or with others.
In February, the government reported it had discovered an alleged plot by opponents to seize the Congress. That report came after deadly street protests in October 2003 forced the ouster of a former president, Gonzalo Sanchez de Losada.
Miners and indigenous leaders led those protests, which killed at least 58 people and underscored the fragile stability in South America's poorest country.


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Venezuela Workers who backed recall fired
By FABIOLA SANCHEZ
ASSOCIATED PRESS WRITER
CARACAS, Venezuela -- Computer engineer Ingrid Sanchez, 32, signed a December petition demanding a recall vote for Venezuelan President Hugo Chavez. In February, she was fired from the government water company.
Anayr Yepez, 44, and six other workers were recently fired from their jobs with the government-run Caracas subway system. They, too, had signed the petition. A worker for the state oil company withdrew her signature from the petition after co-workers publicly posted lists of signers.
All told, hundreds of civil servants have been fired over the past six weeks for signing the recall petition, violating their constitutional rights to vote, unionists charge. The number could be in the thousands if doctors at public hospitals and teachers are counted, they say.
Two of Venezuela's largest labor groups are preparing formal protests for the Organization of American States and the Geneva-based International Labor Organization.
Chavez, who presides over the world's fifth-biggest oil exporter, denies his leftist government is harassing civil servants. He says the complaints are another scare tactic by opponents who failed to collect the required 2.4 million signatures needed to call a referendum.
Critics charge they gathered that amount and more - but that the Chavez-controlled elections council indiscriminately disqualified hundreds of thousands of signatures.
Chavez was elected to a six-year term in 2000. Venezuela's opposition says the recession-mired, politically divided country cannot wait until 2006 presidential elections. The referendum petition, meanwhile, is tied up in the courts.
Sanchez worked eight years at the Hidrocapital water company until her boss called her in on Feb. 27 and told her she was fired for "reasons from the presidency that are confidential," she says.
"Since when is not belonging to your political party a reason for firing me?" she responded angrily.
Yepez had worked 14 years for the Caracas Metro before her March 16 firing.
"How strange that everyone (at Caracas Metro) who was fired had signed," she said. Her mother, she added, had begged her not to sign.
"I wasn't afraid, because it's my constitutional right. I know that the price I paid was losing my job, but if we don't do this, what awaits us? A military dictatorship," Yepez said.
The Venezuelan Workers Confederation, the country's largest labor group, and the National Public Workers Federation say the dismissals violate international labor rights.
Federation president Antonio Suarez said firings increased after a pro-Chavez lawmaker, Luis Tascon, placed a list of petition signers on his Web site in February (www.luistascon.com).
A link to Tascon's site appears on the Web site of the government's news agency, Venpres. It asks citizens who didn't sign to visit the site to withdraw their names and I.D. numbers from the petition.
Antonio Suarez said his union federation is compiling layoff lists from the state oil company, the ministries of education, interior, finance and agriculture, the Caracas Metro, the National Housing and Sports institutes and Hidrocapital.
Unionists also are verifying reported firings by public hospitals and municipal governments controlled by Chavez's Fifth Republic Movement party, he said.
Citing the layoffs, the Caracas newspaper Tal Cual editorialized that "if you are not in favor of the government, you will lose your most basic rights as a citizen. You begin living a sort of in-country exile."
Labor Minister Maria Cristina Iglesias has denied the charges - but notes her ministry is investigating complaints that private companies forced workers to sign the petition against their will.
Communications Minister Jesse Chacon says any proven case of a petition-related job action will be punished.

But Health Minister Roger Capella recently justified layoffs of government doctors, arguing that petitioners were engaged in "terrorism" against the state.
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Mexican President Submits Plan to Overhaul Justice System
By Kevin Sullivan
Washington Post Foreign Service
Tuesday, March 30, 2004; Page A20
MEXICO CITY, March 29 -- President Vicente Fox sent Congress legislation on Monday calling for a comprehensive overhaul of Mexico's criminal justice system, which has been widely criticized as corrupt and inefficient.
The plan would eliminate fundamental obstacles to justice in Mexico, where roughly 80 percent of all crime goes unreported largely because people have so little faith in the system. It would give police new authority to investigate crime, rein in the excessive power of federal prosecutors and reduce the system's notorious reliance on confessions obtained by torture or coercion.
"It is the moment to prove that together we can do away with corruption, with impunity, with inequality and with injustice," Fox said, announcing the proposal at a ceremony at which he was flanked by the president of the Supreme Court, the attorney general and other top officials.
Congressional approval of the plan would mark perhaps the most important reform of government by Fox, who took office in 2000 promising to eliminate the official corruption and inefficiency that thrived during the previous 71 years of one-party rule by the Institutional Revolutionary Party, or PRI.
The PRI-dominated Congress has repeatedly rejected Fox's proposed reforms in such key areas as energy and labor law. But officials in Fox's government said they were optimistic about passage of judicial reform because they believe there is consensus in Congress and the public that it is necessary.
"I think everybody knows that we need to modernize the judicial system," said Agustin Gutierrez Canet, a spokesman for Fox. "There might be some disagreements on the technicalities, but there is a consensus on the objectives."
Despite many reform efforts over the years, most Mexican police officers receive little training and investigate only the simplest crimes. Prosecutors investigate crime as well as prosecute, giving them what critics call excessive power; more than 90 percent of criminal cases end in convictions.
The Fox plan calls for creation of a single national police force, which would investigate crime and pass cases to a new federal prosecutor's office that would be strictly a prosecutorial agency. The plan would also establish trials in which a judge hears oral arguments in a public courtroom. In the current system, judges accept written arguments in their offices and issue written judgments; in nearly 90 percent of cases, the judge never meets the defendant, Fox officials said.
The new plan would also create the presumption of innocence, which technically exists in Mexico but is routinely ignored by judges who almost always accept the prosecutor's version of the facts, according to lawyers groups and human rights officials who have studied the system.
Under the plan, only confessions made before a judge would be admissible, which officials in Fox's government said would remove the incentive for police to extract confessions by torture. The proposal would also create a new system of juvenile justice and give judges more flexibility to order restitution or community service for minor offenders, who currently make up the vast majority of Mexico's prison population.
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Terrorism's eastward expansion: Uzbekistan
By Sergei Blagov
MOSCOW - Terrorist attacks in Uzbekistan contradict claims that the American-led offensive in Afghanistan has effectively destroyed the hotbed of Muslim radicalism in Central Asia.
Uzbek officials say that a series of attacks over the past few days - including suicide bombings and shootings - killed 19 people and injured at least 26 others. On Tuesday, a car bomb exploded at a police checkpoint on the outskirts of the capital Tashkent, injuring a number of people.
President Islam Karimov addressed the nation and said that the bombings had been plotted by "outside forces and foreign extremists". Uzbek prosecutor-general Rashid Kadyrov argued that
With internal repression [in Uzbekistan] still at its peak, sooner or later the peaceful jihadis [of the Hizb ut-Tahrir] may exchange the pamphlet for the bomb.
Peaceful jihad
(Nov 25, '04)
Asia Times Online
the attacks were carried out by Islamic extremists, notably the Hizb ut-Tahrir al-Islami (Party of Islamic Liberation). He said that suicide bombings were previously unknown to Uzbekistan, and indicated foreign involvement in the attacks.
Two suicide bombings in Tashkent and an explosion in the ancient town of Bukhara have rocked the nation. One of the Tashkent market blasts was reportedly set off by a female suicide bomber and targeted a group of policemen. So far, there have been no reports of high-profile suicide bombings in Uzbekistan - or elsewhere in Central Asia for that matter.
Authorities claim that the materials used in the explosives were similar to those used in a series of simultaneous bombings in Tashkent in February 1999, an alleged assassination attempt against Karimov, which was blamed on the Islamic Movement of Uzbekistan (IMU).
The IMU was once led by Juma (aka Jumaboi) Namangani, a former Soviet paratrooper and Afghan war veteran. IMU fighters crossed into Kyrgyzstan in 1999 and 2000, seeking to enter Uzbekistan from the north through that country. Subsequently, Namangani was reported to have been killed in the course of the Taliban demise in 2001, yet these reports are yet to be confirmed. Moreover, Tajikistan officials have claimed that Namangani is alive, regrouping and hoping to launch a strike into the Ferghana Valley.
IMU activity re-surfaced recently away from Central Asia, in Pakistan. The Pakistani military's offensive in the tribal areas in South Waziristan, near the Afghan border, indicated that government troops might have wounded Tahir Yuldashev, the IMU's leading commander.
Uzbekistan has taken notice of the developments in Pakistan. On March 23, Karimov called on Islamabad to hand over any Uzbek citizens taken prisoner in South Waziristan. The Uzbek leader also claimed that the IMU and Yuldashev were "almost dead, if not physically, then morally". It took just a week for Karimov's rhetoric to prove over-optimistic.
However, on March 29, Foreign Minister Sadyk Safayev reportedly declined to indicate whether the attacks could have been linked to Pakistan's crackdown.
In the past, many IMU militants, mostly Uzbeks, joined the Taliban and fought for years alongside Uighurs and Chechens against the Northern Alliance, which consists mostly of ethnic Tajiks. For them, Tashkent has become an obvious target because Uzbekistan has been a strong supporter of the United States-led campaign in Afghanistan, and American troops are using a former Soviet air base at the southern city of Khanabad to support operations against the resurgent Taliban in Afghanistan.
There have been media allegations of the IMU's complicity outside Central Asia. On March 1, a report in the Russian daily Nezavisimaya Gazeta alleged that IMU operatives were active in Kabul, as well as in Turkey, Iran and Pakistan. The daily quoted IMU defectors as alleging that in its recent inroads into Afghanistan and Kashmir, the IMU had been backed by anti-Western elements in Pakistan's security services.
Moreover, it has been claimed that an effort is under way to unify radical Islamic groups in Central Asia, including those among the Hizb ut-Tahrir al-Islami, Uighur separatists, the IMU, and possibly Chechen separatists.
On the other hand, if Uzbek allegations of the Hizb ut-Tahrir's involvement in the bombings are confirmed, it would mark the first time that the group has been implicated directly in a terrorist attack. The group claims to be nonviolent, but its ultimate goal is still jihad against kafr (non-believers), the overthrow of existing political regimes and their replacement with a caliphate (khilafah in Arabic), a theocratic dictatorship based on the Sharia (religious Islamic law).
Hizb ut-Tahrir now has an estimated 5,000 to 10,000 members, and many supporters in Uzbekistan, Kazakhstan, Kyrgyzstan and Tajikistan. At least 500 are already behind bars in Uzbekistan alone. Most of its members are believed to be ethnic Uzbeks. Moreover, Hizb ut-Tahrir has reportedly extended its influence into China's traditionally Muslim Xinjiang Uighur Autonomous Region.
The Hizb used to reject terrorism, believing the murder of innocent bystanders to be a violation of Islamic law. However, the use of "heavy-handed repression" by Central Asian governments, notably by Uzbek authorities, seems to have encouraged the Hizb ut-Tahrir to adopt more confrontational tactics.
However, according to a RFE/RL report, Imran Waheed, a spokesperson for the Hizb ut-Tahrir in London, denied his group's involvement. He said that Hizb ut-Tahrir was nonviolent and condemned the killing of innocent civilians: "Our understanding of the whole issue is that attacking innocent civilians is condemned by Islam. So it is unacceptable this attack in Tashkent and we know historically that in the past the government has orchestrated several such attacks itself in order to crack down on peaceful and nonviolent Islamic movements, such as Hizb ut-Tahrir, as we saw previously with the bombings in Tashkent a few years ago."
Uzbekistan is a member of the Shanghai Cooperation Organization, which groups together Russia, China, Tajikistan, Uzbekistan, Kazakhstan and Kyrgyzstan. The group has drafted "the Shanghai anti-terror convention" and decided that the organization would have a regional anti-terrorist force in the Kyrgyz capital, Bishkek. The force is to tackle jointly such threats as terrorism, separatism and extremism.
There have been no reports that Uzbekistan sought assistance from the anti-terrorist force. However, in the wake of bombings in Uzbekistan, Kazakhstan has increased border security and Kyrgyz border guards followed suit along the Uzbek frontier.
Two years ago, Kyrgyz security officials claimed that Muslim militants belonging to various groups had banded together to form the Islamic Movement of Central Asia (IMCA) to plot terrorist attacks and move towards the ultimate goal of creating an Islamic caliphate in the Ferghana Valley, a hub of Islamic radicalism. According to Kyrgyz officials, the IMCA has been headed by Yuldashev - the man believed to be active in Pakistan - and includes Kyrgyz, Tajik, Uzbek, Chechen and Xinjiang separatists with bases in Afghanistan's Badakhshan province.
Since late 2002, there have been warnings that al-Qaeda would support terrorist attacks in Central Asia. However, strikes were expected in Kyrgyzstan or Tajikistan, both of which lack the capabilities that Uzbek authorities possess to crack down on anti-government activity.
Now, as the US and the North Atlantic Treaty Organization are still preoccupied with democracy-building in Afghanistan, governments in Central Asia and beyond have reason to worry about potential threats from militants that fought alongside Afghanistan's Taliban militia.
For instance, Russia has been struggling to suppress Chechen rebels and other Muslim extremists. Moscow has banned the Hizb ut-Tahrir and extradited some suspects to their home countries in Central Asia. No big wonder that on Monday the Russian Foreign Ministry promptly denounced the Uzbek bombings. Foreign Minister Sergei Lavrov also urged to destroy "the nest of terrorism" in Afghanistan. Russian officials have previously complained that the international operation in Afghanistan merely dispersed - and failed to destroy - the Taliban and other Muslim radicals.
Beijing could have reasons for concern as well. There have been reports of cooperation between militant groups like IMU and IMCA and Uighur separatists, who, like Hizb ut-Tahrir, have never formally advocated violence.
(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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>> PAK CLIMBDOWN?

Dead al-Qaida man not intelligence chief

By PAUL HAVEN
ASSOCIATED PRESS WRITER
A Pakistani soldier mans a position along a road near Wana in South Warziristan Monday March 29, 2004 after days of fighting between the Pakistani army and suspected al Qaida and Taliban fighters in the area. An al-Qaida intelligence chief was killed in Pakistani's massive sweep through western tribal areas to root out members of Osama bin Laden's terror network and the Taliban, a military official said Monday. (AP Photo/M. Sajjad)
ISLAMABAD, Pakistan -- Pakistani officials on Tuesday again backed off claims that they killed or captured a major al-Qaida fugitive, saying a man they believed had been an intelligence chief for Osama bin Laden's organization was in fact a much less senior local figure.
On Monday, army spokesman Maj. Gen. Shaukat Sultan told a news conference that intelligence sources indicated that the al-Qaida intelligence chief, whom he named only as Abdullah, had been killed.
Another member of the Pakistani intelligence community said the military was showing photos of Abdullah Ahmed Abdullah - who is on the FBI's Most Wanted List - to captured militants, but none had identified the photo.
On Tuesday, Sultan said the man apparently killed in South Waziristan was far less senior.
"Now I can confirm that he was only the head of al-Qaida's intelligence in Wana," the main town in South Waziristan, said Sultan. He blamed the mistake on faulty initial intelligence.
Shortly after the siege began March 16, President Gen. Perez Musharraf claimed in a television interview that his men had cornered a "high-value" al-Qaida target, and several senior Pakistani officials said they believed it to be bin Laden's No. 2 man, Ayman al-Zawahri.
Authorities later backed off those claims, saying instead that they had wounded an Uzbek militant with al-Qaida links named Tahir Yuldash. They say they believe Yuldash escaped, possibly through a mile-long tunnel leading out of the battle zone.
There were conflicting accounts among Pakistani intelligence and government officials about whether Abdullah's body had been recovered. Sultan would give no details.
Meanwhile, authorities found the bodies of two Pakistani government officials dumped in a well after they were abducted two weeks ago at the start of the operation - the largest ever Pakistani sweep for al-Qaida fugitives - that wound up Sunday.
Tribesmen in the Kaloosha area of South Waziristan found the bodies of Mati Ullah and Ameer Nawaz late Monday, bringing the government and military death toll in the operation to at least 48.
The officials were captured by militants in a botched initial assault on March 16 when paramilitary forces raided homes in Kaloosha and met with stiff resistance.
A government official in Wana, the main town in South Waziristan, said the officials' bodies were found in a well. He spoke on condition of anonymity.
"Probably they were murdered several days ago," said Brig. Mahmood Shah, chief of security for Pakistan's tribal regions bordering Afghanistan.
The top government official in South Waziristan, Mohammed Azam Khan, warned Zalikhel tribesmen to surrender those involved in killing the two security officials.
He said the tribesmen have 10 days to hand in the suspects or face demolition of their homes or confiscation of their property. In an interview with Pakistan's Geo television, Khan said Zalikhel tribesmen had allegedly acknowledged kidnapping the officials.
Twelve abducted paramilitary soldiers were freed Sunday when the military pulled out thousands of forces after negotiations conducted by tribal elders.
The military declared the operation a success, claiming it had killed 63 foreign and local militants. Hundreds of militants remain at large.
Sultan and Interior Minister Faisal Saleh Hayyat briefed parliamentarians on the operation Tuesday, reiterating a government offer to grant amnesty to any terrorists who surrender. None have taken up the offer.
Pakistani forces arrested 167 people in the operation, including 73 foreigners. Security officials have said Uzbeks, Chechens and Arabs were among them.
The two-week operation was the largest since Musharraf, a key U.S. ally, sent 70,000 troops to the border with Afghanistan after the Sept. 11 attacks to prevent cross-border assaults.

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Musharraf left counting the cost
By Syed Saleem Shahzad
KARACHI - The 12-day Pakistani army operation in the South Waziristan tribal area near the Afghan frontier is winding down following the release on Sunday of 12 government officials and soldiers seized by alleged al-Qaeda fighters and tribal allies. Similarly, a number of tribal suspects held by the army have been set free or will be released soon.
Those released by the tribals were among 14 people captured at the start of a clash in which more than 100 people have been killed. After cordoning off the area around Wana in South Waziristan with over 5,000 troops and losing about 50 soldiers in the offensive, the military says that "we have almost achieved our set targets" in driving al-Qaeda fugitives and Afghan resistance fighters from the region.
Tension has been high after the execution of eight Pakistan soldiers, who had been taken hostage by the fighters during an ambush on an army convoy last Tuesday.
The end of open hostilities, however, is only the beginning, and far from achieving its targets, the army, and Pakistani President General Pervez Musharraf, are left with far bigger problems than when they first embarked on the mission into the tribal region nearly two weeks ago.
Call for help
Although the Pakistan army has put a brave face on its South Waziristan escapade, claiming that its job has been done, in reality it had to rely on outside help to extricate itself with a semblance of its "face" intact.
After all efforts to pacify the hostile tribals failed - the semi-autonomous regions are notoriously anti-central authority - the government persuaded leading clerics to bring pressure to bear on the tribals to negotiate a truce. The clerics, who belong to the six-party Muttahida Majlis-i-Amal (MMA) religious political party that is well represented in the National Assembly as well as the provincial governments of North West Frontier Province and Balochistan, are usually perceived as anti-US, but in fact, when the chips are down, they dance to Musharraf's tune.
The army sought help from the clerics on two fronts:
To use their influence among the tribes to get them to compromise;
To prevent the spread of a campaign started by some extreme religious leaders in Islamabad in which soldiers serving in the tribal regions were to be denied funeral rites.
Winners and losers
Despite heavy United States pressure for a sustained campaign in Pakistan to once and for all drive all insurgents (both foreign fighters and Afghan resistance) from their sanctuaries in the tribal areas, the operation has now ended.
In terms of the broader picture, the plan was for the Pakistan army on the one side and US troops across the border in Afghanistan to sandwich all resistance between a "hammer and an anvil" and drive them from the Shawal area - an inhospitable no man's land that straddles the border. This is nowhere near to being achieved.
And there has been a strong backlash against the Pakistan establishment, both in the tribal areas and in the country in general, the extent of which has severely rattled the country's leaders. Indeed, according to insiders who spoke to Asia Times Online, there is a perception that, given the failings of the South Waziristan operation, there is an "an intelligence within an intelligence" and "an army within an army" in Pakistan and that factions in these organizations backed the tribals "in the name of Islam". According to sources, more than 150 soldiers of the army and para-military forces refused to take part in the action, including at least one colonel and a major.
The release of a tape last week purported to have been made by Ayman al-Zawahiri, Osama bin Laden's No 2 in al-Qaeda, also shook the establishment. Al-Zawahiri was reported to be the "high profile target" of the South Wazaristan operation. In the tape, al-Zawahiri called Musharraf a "traitor" and urged people to overthrow his government. "Musharraf seeks to stab the Islamic resistance in Afghanistan in the back. Every Muslim in Pakistan should work hard to get rid of this client government, which will continue to submit to America until it destroys Pakistan," the speaker on the tape said.
As a result, for the first time ever, the Inter-Services Intelligence, Military Intelligence and the Intelligence Bureau on Friday conducted a survey in which they canvassed the opinions of professionals, including writers and lawyers, on the possible repercussions of the taped speech.
The political backlash of the South Waziristan operation has been so powerful that Musharraf has inducted former dictator General Zia ul-Haq's son, Ejazul Haq, into the federal cabinet as minister for religious affairs in order to use his good offices - as the son of the staunchly pro-Islam leader - with the religious segments of society.
Tribals take stock
Soon after the truce was announced on Sunday and the Pakistan army began returning to its camp, pamphlets in the Pashto language were widely distributed in Bannu, North Waziristan and South Waziristan. They claimed: "Do not ever make the mistake of chasing the mujahideen of the Taliban and al-Qaeda." The pamphlets clearly warned those tribals who had cooperated with Pakistan and spied on the fugitives.
In a public gathering on Monday in Wana in South Wazaristan, religious and tribal leaders gathered to take stock. "It was just like Jasn-e-Fatah [D-Day-like celebrations]," a contact who was present told Asia Times Online. "Wazir tribals presented turbans to more than 100 jirga [council] people as a gesture of thanks and confidence."
Members of the National Assembly in Islamabad and others gave speeches, the gist of which can be summarized as follows:
Congratulations to all the tribes for fighting as a united nation.
The tribes had once again proved their "glorious traditions" of fighting evil.
The Federally-Administered Tribal Areas will remain independent.
The Central administration is always hostile to the tribal people and has established new traditions of "cruelty and barbarism".
Musharraf was misguided about the alleged presence of bin Laden and al-Zawahiri and other al-Qaeda people.
The meeting concluded that the army had destroyed 84 houses in its search for fugitives, and that claims that the fugitives had used long tunnels to escape were nonsense. In fact, these are trenches that have been used for many years to carry water. Now the army has destroyed them - and with it the region's water system.
The meeting concluded by saying that those who died in the trouble were shaheed (martyrs), and apologized for the army personal who died, saying it was the fault of the "high ups".
(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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>> MYANMAR WATCH...

Drug trade booms on China-Myanmar border
By Naw Seng
RUILI, China - To make money by selling potentially lethal heroin is forbidden by their religion, yet desperately poor and persecuted Muslims from Myanmar have often turned to the drug trade. And with increased profits have come increased risks.
Kyaw Hein, a Myanmar national, is a former trafficker who now helps Chinese authorities crack down on the importation of heroin from his country into China via this border town. He says heroin comes from Muse, a Myanmar town opposite Ruili, and then goes on to Kunming, or goes from Ruili to Kunming via Dali. Further still, it can go from Panghsang, located in territory controlled by the United Wa State Army, to Kunming via Simao, also in Yunnan. But the Ruili route lately has shrunk due to a heavy crackdown by Chinese police.
Bushi, now a fruit vendor, is one former trafficker who has broken away from the trade despite its lucrative nature. At one time, Bushi had dozens of aides and spent more than 5,000 yuan (US$600) per day in drug earnings. "I understand heroin kills people," he says. But in those days he had no choice. Now he does. "I don't want that hell."
As China's western border with Myanmar is now the main transit point for heroin, several Myanmar Muslim traders have taken to the trade. Many Myanmar Muslims in Ruili - there are some 1,000 here in this busy border town - are economic migrants because of political and economic discrimination by Myanmar authorities.
That discrimination has roots in history, and at certain points resulted in riots between the Buddhist majority and the Muslim minority, instigated by military authorities (see Myanmar's Muslim sideshow, October 21, 2003). Eighty-nine percent of Myanmar's more than 50 million people are Buddhist, Muslims and Christians comprise 4 percent, and various others make up the rest.
The majority of Myanmar's Muslims live in the western part of Arakan state, on the border with Bangladesh, and come under restrictions in marriage and fertility. Many feel they do not have the same opportunities as other communities.
Bushi started out in Ruili as a small jade trader, then found selling drugs a better way to get rich quick. "I would be left behind if I rode a cart to follow cars," he explains. He reckons that almost half of the Myanmar Muslims in China are in the drug trading business.
Trafficking in heroin and using ill-gotten money of this sort are forbidden under Islam. "This is haram [forbidden] money," Bushi says. "We shouldn't" live on it.
But this has not stopped many jade traders from turning to the poppy in the past decade. Despite the fact that, "only a few people benefit from the drug business," Bushi says. "Many are in jail."
Bushi has never been arrested, but some of his men were jailed last year for heroin possession. The seizure made Bushi a poor man, but in general he had no problem smuggling heroin to Kunming, the capital of China's southwestern province of Yunnan. "I have many ways of getting [heroin] around," he says.
These include putting heroin inside dairy tins, human rectums and female reproductive organs. But Bushi knew his luck would eventually run out. "Even the big chief will get arrested some day," he adds.
A few traffickers can get and stay rich, but many serve long sentences in Chinese prisons or suffer the death penalty. Even so, the temptation is often irresistible. In any case, traders say, Chinese and Myanmar authorities are not above taking bribes to close their eyes.
Ruili residents call heroin traffickers kya kya kala - kya kya is slang for "heroin" in Ruili, and kala is a term Myanmar nationals use to refer to Westerners or Indians.
Some former kya kya kala or those in the heroin business collaborate with Chinese police to crack down on the trade. Kyaw Hein is one. His work is to investigate the Myanmar heroin mafia.
Kyaw Hein stopped trafficking after Chinese police caught his brother-in-law in possession of a large amount of heroin. But his experience as a trafficker immediately landed him a job. He continues to earn drug money, but this time in the form of payments made by his former friends to the police, who give him 20 percent of seized cash in return for his information.
Kyaw Hein gives detailed reports of trafficking activities to Chinese police, who have been trying to clamp down on a social ill that has resulted in worrisome drug-use rates along the border since it opened to the region in the 1980s.
On an average day, Kyaw Hein will hang around town, play cards and chat with friends. Only a few of them know that he is an informer, but everyone who works in Ruili's heroin trade is known to him.
Although he prefers this job over trafficking because it is "safer", he is aware of the threat from the traffickers themselves. "I know the death knell will sound for me one day," he says, "but I'm not afraid."
Interviews here showed that even active kya kya kala are stumped as to where the heroin goes from Kunming, but they believe that it enters the international market via several routes.
Last April, more than half a tonne of heroin en route to Kunming was seized by Chinese authorities outside Ruili.
According to Jane's Intelligence Review, heroin from Myanmar reaches eastern China and Hong Kong, to be eventually exported to Southeast Asia, Australia and North America.
Nearly 200 Myanmar Muslims are in Chinese jails, an estimate given by both Bushi and Kyaw Hein. According to Chinese law, the penalty for drug trafficking is execution. But the penalty is not imposed on Myanmar nationals, who serve a maximum of 15 years. Some traffickers who can afford to bribe police can reduce their jail terms to a few months, or avoid jail altogether, according to talk that goes around here.
Kyaw Hein says a group of Myanmar Muslims are moving to the area close to Panghsang for the coveted white powder. "All 'tigers' here move there [Panghsang]," he says.
Bushi has no interest in becoming a tiger again, preferring to live tranquilly with his family in Ruili. But he does want to spread the word about the damage heroin has done to his community and to the name of Allah. "I dare to die for the truth," Bushi says. "People may exit the trade, but it will continue to affect the world."

(Inter Press Service)
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Myanmar Seeks Constitutional Convention
Tue Mar 30, 1:26 PM ET
By AYE AYE WIN, Associated Press Writer
YANGON, Myanmar - Myanmar's military government said Tuesday it will take the first step on a self-proclaimed "road to democracy" by reconvening a constitutional convention that was suspended eight years ago.
Western nations have long shunned the ruling junta for failing to hand over power to a democratically elected government. Following intense international pressure, Prime Minister Khin Nyunt in August revealed Myanmar's seven-step democracy plan but did not provide a timetable for its implementation.
The plan is supposed to lead to a general election and a new government.
The junta first organized a National Convention in 1993, with the goal of drafting a constitution to be adopted by national referendum.
But it was suspended in March 1996 after members of the National League for Democracy party, led by Nobel laureate Aung San Suu Kyi, walked out, saying they were being forced to rubber-stamp decisions made by the junta.
On Tuesday, state radio and television broadcast a statement signed by Lt. Gen. Thein Sein of the National Convention Convening Commission calling the meeting May 17.
The announcement gave no details about how many delegates will be invited or whether Suu Kyi, who has been detained since May, will participate. The convention will be held in the capital Yangon.
Many Western critics consider NLD participation in the convention to be crucial for its success. Party officials could not immediately be reached for comment.
Suu Kyi's party won a 1990 general election, but the military -- which took power in 1988 after violently suppressing mass pro-democracy demonstrations -- refused to step down, instead jailing and harassing members of the pro-democracy movement.
Suu Kyi, who won the Nobel Peace Prize in 1991, remains detained after a May clash between her followers and government supporters, prompting even those Southeast Asian nations sympathetic to the junta to call for speedy democratic reform.
The state-run press said 16 of 17 ethnic rebel groups who have signed cease-fire pacts with the government will participate in the convention.
But the Karen National Union, which currently is negotiating a cease-fire, has said it will not.
Myanmar, also known as Burma, does not currently have a constitution. A 1974 constitution was dropped when the current military rulers took power.
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>> OH! REALLY?

'Al-Qaeda has got it wrong'
By Ritt Goldstein
A recently released Central Intelligence Agency (CIA) provided document affords some remarkably critical and militant Islamic perspectives on the "war on terror". Highlighting the unique nature of the document's perspective, it addresses an analysis of al-Qaeda's efforts by al-Jama'ah al-Islamiyah, a faction which is designated by the US State Department as a terrorist organization. The fact of the document's release by the CIA speaks volumes about its interest.
Providing an equally surprising parallel, in December the US Defense Department's Strategic Studies Institute released a report describing the objectives of the Bush administration's war efforts as "politically, fiscally and militarily unsustainable". Al-Jama'ah observed essentially the same of al-Qaeda. And according to the CIA translation, al-Jama'ah argues that al-Qaeda "entangled the Muslim nation in a conflict that was beyond its power to wage".
Al-Jama'ah is Egypt's largest Salafist group on the US terror list, allegedly complicit in the 1993 bombing of New York's World Trade Center, as well as numerous acts of violence within Egypt. Their goal has been stated as the removal of secular government and restoration of an Islamist state. The group's spiritual leader, Sheikh Omar Abdel Rahman, was convicted for his alleged Trade Center bombing role by a US court.
The militant Egyptian Salafist groups are reportedly Islam's oldest, tracing their roots to the formation of the Muslim Brotherhood in 1928, five years after the fall of the Ottoman Empire. The encroachment of Western secularism spawned the Brotherhood, but al-Jama'ah's activity dates from the 1970s.
Islamic Jihad, Egypt's other major Salafist group on the terror list, was reportedly responsible for the assassination of the late Egyptian president Anwar Sadat. Ayman al-Zawahiri, now allegedly Osama bin Laden's second in command, was reportedly one of Islamic Jihad's two leaders. Al-Qaeda itself is sometimes referred to as a militant Salafist group.
The CIA's original document appeared as an Arabic-language review of a book by al-Jama'ah's leadership, their work entitled: "The Strategy and Bombings of al-Qaeda". It was published by the influential and Saudi-owned London daily, al-Sharq al-Awsat.
Footnoting this, al-Sharq al-Awsat is known for publishing material that coincides with Saudi perspectives. And Salafist is a term which many of the Wahhabi denomination of Sunni Islam use to describe themselves, Wahhabism being the strict branch of Islam most often associated with Saudi Arabia.
But in 1997, al-Jama'ah's leadership reportedly began an initiative to end violence. Their present writings intimate that a policy of confrontation fed anti-Islamic currents within the US, shifting America away from a policy of Islamic accommodation when it suited US objectives.
"The official religion of the United States is its interests," note the authors. They also see the US pursuing an opportunity for "hegemony on the world, global sovereignty, and decisive victory over all rivals".
Their text is noteworthy for its illustration of perceptions within the militant segment of the Islamic community. Al-Jama'ah doesn't take exception to al-Qaeda's motivations, but does to their methods and strategy, al Qaeda's giving "preference to the logic of defiance over the principle of calculations".
The authors blame anti-US violence (including the Trade Center bombing) for casting Islam as "the green peril". They portray a shift in US perception as transpiring during the period when America was attempting to define its "new enemy" following the Cold War.
Particularly singled out as evidence of this American development are the works of Francis Fukuyama The End of History and Samuel Huntington (The Clash of Civilizations). However, the authors pointed out that even during this period, the US sought an accommodation with the Taliban, demonstrating "the supremacy of the US self-serving logic on US strategy". But concurrently the authors saw an al-Qaeda policy of confrontation lead to the foregoing of unique opportunities that may never recur.
According to the text, because of US geostrategic (oil and gas) interests, the Taliban were offered "US$3 billion as a free grant and $300 million annually in return for leasing the pipeline transporting natural gas from the Caspian" to Pakistan. This was in reference to the trans-Afghan pipeline the US had long desired.
Al-Jama'ah cites Islamic history to make the point that mutually advantageous accommodation is not sacrilegious.
The authors note that instead of the assets and stability the proposed pipeline revenue held for both Afghanistan and Pakistan, there have instead been substantive setbacks for the global Islamic community. The siege al-Qaeda is under, as well as the increased pressures on those who are fighting traditional struggles of liberation, were seen as but one part of a much broader fallout. Particular note is given to the extreme nature of September 11, and the West's reaction to it.
The texts describe al-Qaeda's perspective as a uniquely Afghan one. Notably, it was the US which had cultivated the philosophy of uncompromising jihad as a tool against the Soviets in Afghanistan during the Cold War. In those days the people who are today's al-Qaeda were then integral parts of America's anti-Soviet engine in Afghanistan.
Through US urging, even mosques throughout global Islam were encouraged to call for volunteers in the anti-Soviet, Afghan jihad. Egypt is reported to have provided facilities for their training. But while these jihadis may have switched enemies, their unbending methodology remained the same.
Al-Jama'ah intimated that while al-Qaeda's late 1990s creation of the Islamic World Front to Combat Christians, Jews and Americans may have been pure in ideology and motive, it represented an unrealistic overreach which succeeded only in "enraging and antagonizing the enemy". The authors see a key result of this in US National Security Advisor Condoleezza Rice's later promise to "liberate the Muslim world". The perceived threat this represents to the "values and traditions of the Muslim culture" is highlighted as very significant.
Alternately, strong concerns are raised that Islam must avoid the "trap of clash of civilizations", instead pursuing a policy of "interaction". Simultaneously advocated is "maintaining the Muslim identity and defending and struggling against any attack on the principles of Sharia [Islamic law] and the supreme interests of our faith, homelands, and nation".
The interpretation of Rice's remarks provides a reflection on the position voiced by Italian Prime Minister Silvio Berlusconi on September 26, 2001. At the time Berlusconi voiced that he foresaw the West as "bound to occidentalize and conquer new people". While al-Jama'ah argues that a Western religious crusade exists "only in the imagination of those who make such a claim", they condemn al-Qaeda's strategy for inciting "Christian currents that are hostile to Islam".
The authors see al-Qaeda's strategy as influencing concerns of the US fundamentalist Christian right, precipitating an alliance with elements of the Jewish right, culminating in Israel's advantage and what they perceive as a campaign couched as "backing persecuted minorities in the world". The reality they perceive though is a US strategy of intervention "under the pretext of defending democracy and the human rights ... and combating terrorism". They pointedly add that the thrust of this is to "impose US hegemony on the whole world".
As the idea of the Bush administration potentially seeking to enfranchise Sunni-dominated Saudi Arabia's minority Shi'ites has been recently floated, it's noteworthy to recall that Saudi Shi'ites are concentrated in the segment of the country where the oil fields are.
Evaluating the benefits al-Qaeda received via its widely spread front of hostilities, al-Jama'ah notes that while the Soviets were militarily and socially exhausted in Afghanistan, the breadth of America's global presence already provided sufficient, less provocative opportunities for this. They also argue that America's overriding interest is oil, and that unlike in Vietnam or Somalia, the US is prepared to accept substantive casualties to assure its "oil hegemony".
Translating out the thrust of the text's criticism, flexibility is much of its essence. Al-Jama'ah accuses al-Qaeda and others within the Islamic militant community of failing to go beyond a path "of force only", adding that "rigid reliance on one single strategy does not bring the flexibility that is needed to attain the aspired goals".
A failure in determining the requisite priorities for successful confrontation is subsequently emphasized. According to al-Jama'ah, "Al-Qaeda built its strategy without a sound arrangement of the priorities and without taking into consideration the limitations of its capabilities."
Providing more than a slight sense of paradox, the US Defense Department's Strategic Studies Institute report observed the same problem with the Bush administration.
Striking a tone similar to al-Jama'ah's criticism of al-Qaeda's World Front, a report entitled "Bounding The Global War On Terrorism" faulted the Bush administration for subordinating "strategic clarity to the moral clarity". In so doing, the administration is said to have placed the United States on a "course of open-ended and gratuitous conflict with states and nonstate entities that pose no serious threat".
Paralleling the faulting of al-Qaeda's goals, the Strategic Studies report found that the majority of the "war on terror's" "declared objectives", objectives repeatedly articulated by the administration as the basis for the war's prosecution, "are unrealistic and condemn the United States to a hopeless quest".
Notably, a 1999 Pentagon report prepared for the highest levels of the US defense community had warned: "The danger ahead lies not only in the adverse international trends that are unfolding, but also in the risk that the US government may not understand them."
Ritt Goldstein is an American investigative political journalist based in Stockholm. His work has appeared in broadsheets such as Australia's Sydney Morning Herald, Spain's El Mundo and Denmark's Politiken, as well as with the Inter Press Service (IPS), a global news agency.
(Copyright 2004 Asia Times Online Ltd. All rights reserved. Please contact content@atimes.com for information on our sales and syndication policies.)

Iran Approaches Danger Point on Uranium Enrichment for Bomb
DEBKAfile Exclusive Report
29 March:
Brushing aside all the international obstacles placed in its path, Tehran is clearly advancing full steam ahead in the race for a nuclear device. Sunday, March 28, the International Atomic Energy Agency learned that Iran's freeze on its uranium enrichment was at an end when the head of Iran's nuclear commission, Golmazeh Aghazadeh, announced production had started at the Isfahan facility and the process would be completed at the Natanz centrifuge plant.
On the state of the Isfahan plant, the Iranian official reported vaguely that the contractors had announced it was up and the facility functioning. He added: "In three weeks' time the Iranian people will hold a grand celebration to mark full operation at the Natanz plant."
DEBKAfile's sources interpret this as indicating that Iran's centrifuge industry is working at full capacity and in three weeks it will have attained for the first time the volume of enriched uranium output requisite for building a nuclear bomb.
Yet the next day, Monday, the same Aghazadeh announced piously that Iran had stopped building centrifuges "to win the world's trust over its nuclear program." DEBKAfile cites another Iranian official as flatly denying on March 13 Iran was engaged in uranium enrichment.
All these conflicting statements are transparent attempts by Iran to bewilder and throw off pressure as the Islamic republic advances on its objective.
Aghazadeh's first announcement, aired by state television as in interview Sunday, was timed for the one-day visit UN nuclear watchdog inspectors paid at Natanz. The second statement was delivered on Monday, March 29, when the inspectors moved on to Isfahan. UN inspectors were thus confronted with the accomplished fact that Iranian was producing enriched uranium in defiance of international censure.
US officials working on the Iranian nuclear issue fear that the UN inspectors will hold back on condemning Iran's nuclear breaches until chief inspector Dr. Mohammed ElBaradei visits Tehran next week. It will be left to him to find the words for a statement affirming that Iran has reached the point of no return in its production of the key ingredient for a nuclear bomb.
DEBKAfile sources add Iran is impervious to the anger of the European Union which has broken off all contacts with its officials on the issue. Contacts have also been interrupted with Moscow. President Vladimir Putin has honored his pledge to President George W. Bush to halt Russian assistance in the construction of Iran's Bushehr atomic center and to withhold the fuel rods for powering its reactor.
In Tehran, the hard-line rulers of the Islamic republic evidently trust that the storm clouds gathering over the White House in the wake of the 9/11 inquiry will tie Washington's hands for long enough to allow them to extort de facto acceptance of their continuing uranium enrichment without risk of harsh reprisals.

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Israeli Parliamentary Intelligence Probe Misses Focus
DEBKAfile Special Intelligence Report
March 28, 2004, 11:17 PM (GMT+02:00)
Under Israel`s intelligence eye until he packed in his WMD
The usual reason for setting up independent inquiry commissions on the functioning or malfunctioning of national intelligence services in times of crisis is to close the books on troublesome dossiers that won't fade out of the public limelight.
This rule applied to the Israeli Knesset Foreign Affairs Intelligence sub-committee probe that faulted Israel's security services performance on Iraq and Libya in the open part of its report published Sunday, March 28. After hearing closed-door testimony from 70 witnesses in eight months, the panel headed by Likud MK Yuval Steinitz found that Israeli intelligence warnings about Iraq's non-conventional weapons threat to the country were based on assessments and speculation, not fact.
The report stressed that the secret agencies did not deliberately mislead Israeli officials or attempt to distort the intelligence picture in order to emphasize the necessity of going to war. No one is therefore held to account personally. The government was judged to have acted reasonably in ordering the population to cover windows with plastic sheeting and open sealed gas mask kits - even at a replacement cost of millions of dollars.
But there is a second rule to keep in mind: such panels are of very limited usefulness, for two reasons:

1. Their conclusions and recommendations, directed primarily at calming the public, have little bearing on real intelligence work and are therefore rarely carried forward into practical steps.

2. No one seriously imagines that a counterintelligence agent or intelligence officer, whether retired or active, will ever level with any outside panel on all the secret information in his possession or even deliver a clear, unambiguous presentation.

Operating in a world portrayed aptly in genre literature as a "wilderness of mirrors" requires its analysts and department heads to assemble plausible mosaics for drawing the truth out of infinite sets of double and blurred images. That far from infallible skill is not required of politicians serving on inquiry panels.
It is not surprising that Israel's Mossad and military intelligence service - Aman - are furious. They have never faced open criticism before. But they also rebut some of the points as being made more for the sake of settling personal accounts than to seriously scrutinize where Israel's secret services got it wrong in the Iraq War.
A conflict of orientation and objectives stands out in some of the assertions appearing in the published section of the sub committee's report, such as: "The military and political echelons are responsible for an intelligence foul-up regarding Iraq and Libya." On Libya, the panel found Israeli intelligence wanting in failing to pick up on Muammar Qaddafi's race for a nuclear weapon.
That criticism, at least, is simply refuted. DEBKAfile's intelligence sources assert:

A. Israeli intelligence knew about Libya's nuclear program in fine detail. Prime Minister Ariel Sharon twice - in 2002 and 2003 - warned of the danger of Libya beating Iran to a nuclear bomb. He would hardly have plucked this information out of thin air.

B. Israeli intelligence, according to information received in the past from DEBKAfile's sources, knew quite a bit about the flow of Pakistani centrifuges for enriching uranium to Libya and Iran, and the transfer of Chinese and North Korean nuclear technology and scientific, engineering and technical manpower to Libya, including Iraqi nuclear scientists who were attached to the secret Libyan program.

C. So precise was the information reaching Israeli intelligence that when a newly- arrived nuclear scientist went shopping in Tripoli, Tel Aviv knew about it.

Where Israel's secret services fell down was in not tumbling to the secret negotiations between Tripoli, Washington and London for dismantling Qaddafi's WMD. It was a double slip-up because a number of Palestinians were involved in the transaction and their movements at least should have attracted notice.
This failure had a disastrous effect on Israeli policy-making. DEBKAfile's sources reveal that Sharon learned too late that the Bush administration, which had used Israeli assistance for the Iraqi war, pushed Jerusalem aside when it came to Libya. Instead, Washington used British good offices to take certain Palestinian individuals aboard the secret Libyan project. Sharon's moves might have been different had he known about this in time.
The Knesset subcommittee states: Israeli intelligence reacted too slowly to the 1998 exit of UN inspectors from Iraq and did not come up with fitting answers to this development.
This statement conceals more than it reveals. Israel, like most other countries, excepting Russia and China - each of which maintained a strong independent intelligence presence in Saddam Hussein's Iraq, relied on four intermediate sources to find out what was happening in the country:

1. UN inspectors who were willing to sell anything they picked up if the price was right. The fickleness of this source was exhibited by the former deputy UN chief inspector Scott Ritter when, just before the war, he suddenly went back on his previous determinations and declared Iraq innocent of ballistic missiles and weapons of mass destruction.

2. Arab and other Middle East businessmen who regularly visited Baghdad and other Iraqi cities.

3. Kurdish undercover bodies inside Iraq.

4. Clandestine Arab agencies operating in Iraq.

Israel may be presumed to have had access to all these four sources.
The Israel inquiry panel did not grasp that what they were dealing with was not a straight yes or no on whether or not Iraq possessed chemical and biological weapons or the up to 150 long-range missiles postulated by Israeli intelligence when the United States went to war. Nor was it the certitude of Israel's secret services conclusions. There was and remains a cloud of obfuscation yet to be pierced. It started with the trafficking in WMD intelligence for high stakes practiced by leading lights in Baghdad including Saddam himself and his two sons. There is no knowing up until the present day whose hand controlled Saddam's prohibited arsenal or whether it was deployable.
At least three enigmas viewed with hindsight could have misled the most competent secret service.
In the early days of the war, Iraqi forces fired 60 missiles at Kuwait from the Faw Peninsula. When that strip of land was captured, every last missile launcher had vanished. Before the war, UN chief inspector Hans Blix reported to the Security Council that Iraq possessed 14 mobile Scud missile launchers - 30 percent more than Saddam commanded in Gulf War One, when he fired them at Tel Aviv and Saudi Arabia. Those launchers have never been seen to this day.
In December 2002, US, Turkish and Israeli intelligence picked up signs that Saddam had brought his Tupolev-16 bombers and Sukhoi-24 bomber-fighters out of hiding. Instructions to the pilots were recorded to exercise bombing sorties at ranges of 1,000 km, meaning either Israel or Saudi Arabia.
That air fleet of which there are credible records has disappeared as though by magic.
All the various branches of Israeli intelligence were fully informed of the long convoys of trucks carrying tanker loads of Iraqi WMD into Syria from January 10 - or thereabouts, to March 10. Their information came from Israeli spy planes and its surveillance satellite. It did not specify who organized the transfer, who took delivery on the Syrian side of the border or whether Saddam or either of his sons were in control of the outflow that ultimately robbed his regime of its second-strike cross-border option and emasculated Iraq's military defensive capabilities.
What the Knesset panel did not ask is why the Israeli government, after coming into possession of this intelligence, did not secretly approach Washington and propose a joint clandestine operation to attack and destroy the convoys - even by means of an Israeli air strike.

There are two answers::

A. Sharon promised President George W. Bush that Israel would stay out of the military side of the Iraq War, unless specifically invited to take part by the US president.

B. Bush preferred to see all unconventional weapons removed from Iraq in order to keep US and British invasion troops out of harm's way.

In actual fact, Israel, whose policy makers and generals were not sure that the Bush administration's calculations were well-advised, pointed out to officials in Washington that even after its removal to Syria, there was no guarantee that the non-conventional arsenal would not be shipped back at a crucial point in the war. They recalled Israel's bad experience in the first Gulf War. Iraq rained Scud missiles on Saudi Arabia, Israel and Saudi-based US forces near the Jordanian frontier and overnight pulled the launchers into Jordan out of reach of air strikes, with the full assent of Jordan's late King Hussein.
Bush decided not to act on this advice. In the end, nothing relating to Saddam's arsenal turned out as expected. Things might have been different if Bush or the Israeli prime minister had heeded the veiled warning that came from the Russian minister in a telephone call to George Bush on March 6, two weeks before US drove into Iraq. What Putin said, as DEBKA-Net-Weekly revealed on March 14, was: "The same people who ambushed you (US) in Mogadishu and Srbrenica are now lying in wait for you again both in the Security Council and later in Iraq."
Maybe if Bush had watched his step as Putin advised him to do - or let Israel strike the convoys heading into Syria, he might have been saved his mock-search for WMD under tables at the last annual dinner for American newspaper editors.
Maybe if Sharon had not waited for a green light from Washington but in the higher interests of national security bombed the trucks heading into Syria, he might not have been faced in March 2004 with the need to send helicopters over Gaza City to eliminate the Hamas leader. In other circumstances, even Sharon's disengagement proposals, which no one wants to hear, might never have been born.
And at least two parliamentary inquiry commissions - in Washington and Jerusalem - might not have come into being and shown how counter-constructively politics and intelligence mix in the public domain.


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Hamas Plots Knockout Blow with 800 Suicide Bombers
DEBKAfile Special Report
March 27, 2004, 11:31 PM (GMT+02:00)
British Muslims Hanif and Sharif acted for al Qaeda from Hamas Gaza HQ.
No sooner had the tens of thousands of mourners dispersed after the ceremonies and demonstrations of strength marking the death of Sheikh Ahmed Yassin last Tuesday, March 22, in an Israeli missile attack, when a thousand Hamas top and middle-ranking activists dived underground. This is reported by DEBKAfile's counter-terror sources. Since then, known Hamas operatives have maintained perfect telephone silence, their relatives are in the dark about their whereabouts and contacts are maintained only through trusted couriers.
This situation presented the Hamas command center in Damascus with the problem of communicating urgent instructions to the men on the ground in the Gaza Strip - urgent for two reasons:

1. Although Adel Aziz Rantisi made a show of bending the knee to Khaled Mashaal, head of the Hamas Damascus command center, Mashaal knows he must assert his authority without delay and set the pace of coming in events in the Gaza Strip before the local leadership grabs the initiative.

2. Hamas, Hizballah and al Qaeda agents maintain day-to-day exchanges based on a delicately balanced intelligence and logistical give and take. Mashaal and company will not allow anyone in the Hamas Gaza command to upset the balance of this relationship.

A way therefore had to be found for Hamas, Damascus, to impose its will on Hamas, Gaza.
The method finally hit on was to take to the airwaves.
Friday, March 26, therefore, the Hamas liaison man in Lebanon, Osama Hamdan, who managed the Mishaal-Rantisi compromise, was interviewed on Hizballah Radio Nur. On the assumption that the Gaza contingent in hiding were listening in case of coded messages, Hamdan addressed the Hamas "military" wing, the Izz el-Deen al-Qasseem Brigades, directly - not in code but in plain language.
DEBKAfile monitored his statement, as follows:
"The lone suicide martyr method has scored great achievements, but now, as we stand at the threshold of a decisive stage, we must resort to a tactic that brings us the desired results. Ideally, we would round up 70,000 to 80,000 martyrs and have them blow themselves up simultaneously in the enemy's urban centers and so finally vanquish him. But that is not realistic. One tenth or even one hundredth part of that number should suffice to inflict a shock on a strategic scale. I therefore tell you not to hurry to exact revenge. We have to be sure our assault is concerted and perfectly orchestrated. Don't waste resources and manpower on small operations. No one is pushing you. Take all the time you need and then pick a date and hour that are most advantageous to our project."
Hamdan's words freely translated are a directive from Damascus HQ to Muhammed Deif, commander of the Izz el-Deen al-Qassam, to muster an army of several hundred suicide killers to reach the hubs of Israeli cities and blow themselves up at the same moment. The Damascus Hamas command reckons that, even if not all the massacres come off, Israel will not be able to withstand a shock and casualties of the magnitude projected
This escalation fits in well with the intelligence gathered by Americans and Israelis on the spreading base of anti-Israeli terror from the double suicide attack carried out in Ashdod shortly before the assassination of Sheikh Yassin which caused the deaths of 10 Israeli port workers. Their experts conclude the attack was the work of Hizballah aided and abetted by al Qaeda.
A senior US intelligence official is quoted as saying: "The soldiers were members of Hamas. But the overall planning, the way the ship's container was prepared, the weapons used and the level of advance intelligence invested in the attack all bear the marks of the two Islamic terrorist groups. We can expect many more combined terrorist assaults of this kind in the future."
The Ashdod attack posed a grave challenge to the Sharon government's security and counter-terror policies. Last December, before handing over a large number of prisoners in an uneven swap deal with Hizballah, Israel issued a sharp public warning to the Lebanese Shiite terrorist group against further aggression.
Less than three months later, the Hizballah, not satisfied with the Ashdod operation, battered IDF for nearly three hours last Sunday, March 21, its missiles and mortars hitting road junctions on the Golan and coming close to the town of Kiryat Shmoneh inside the Green Line. Israel's response, confined to an air-artillery raid on Hizballah firing positions, bespoke diluted deterrence, a signal certainly picked up by Hizballah and al Qaeda as well as the Hamas and its fellow Palestinian terrorist organizations.
Many Israelis, including some at decision-making levels, prefer not to see the international terrorist coalition functioning in Palestinian-controlled territory - and even among Israeli Arabs in the form of Al Qaeda sleeper cells. The phenomenon is not even new. Al Qaeda shoe bomber Richard Reid who failed to blow up an American airliner on December 22, 2001, learned how to pack explosives in his shoes while visiting Hamas activist Nabil Aqal at his home in the Jebaliya refugee camp of the Gaza Strip. This fact was not brought out in the US court that sentenced him to life imprisonment. Israel too kept quiet about this connection, mainly so as not to embarrass Mohammed Dahlan, then head of the Palestinian Gaza Strip preventive security apparatus, who could not have avoided knowing about the al Qaeda visitor.
He was not the last, the two British Muslim bombers, Assif Muhammad Hanif and Omar Khan Sharif, who bombed Mike's Place on the Tel Aviv promenade on April 30, 2003, also spent time with Hamas hosts in the Gaza Strip prior to their hit. Their real assignment was to bomb the US embassy a few doors away from the bar but they found it too well protected. American, British and Israeli security forces have conspired to keep this quiet. But, unlike the Israelis, who bury their heads in the sand, the British heeded the Tel Aviv attack as a danger signal warning them that al Qaeda had planted cells in Briton's large Muslim population. Since the Madrid train attacks, London's top security and police officials have reiterated that an al Qaeda strike in the British capital is inevitable.


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Clearing the Decks for Jimmy
FROM DEBKA-Net-Weekly 150 Updated by DEBKAfile
March 26, 2004, 3:55 PM (GMT+02:00)
The process of selecting Gemal Jimmy Mubarak to succeed his 76-year old father as Egyptian president is nearly over, notwithstanding Mubarak Sr.'s denials. A book just out in Cairo, "Gemal Mubarak - Revival of National Liberalism," performs an excellent PR job on the incoming president. The book, clearly written to order by Gahad Awda, a member of the ruling party's central committee, introduces young Mubarak's political agenda and his vision for the future of his country.
Much less glossy reading matter was handed to President Hosni Mubarak earlier this month. It was put in his hands, gift-wrapped as a special package, ahead of his trip to Washington next month.
To subscribe to DEBKA-Net-Weekly click HERE .
On May 19, DEBKA-Net-Weekly revealed its contents: a large stack of Iraqi intelligence documents that US forces seized in Baghdad and which expose the deep penetration of the Mubarak regime achieved by the deposed Iraqi ruler Saddam Hussein.
After opening his gift, Mubarak called an emergency session in the presidential palace of his key advisers, intelligence chiefs led by General Omar Suleiman and top military and police commanders.
The documents spelled out in detail how Farhan Hassan, Iraq's deputy ambassador to the Arab League in Cairo, turned his office into a center of espionage and recruiting post for Iraqi agents in Egypt, the United States and the Gulf.
At the end of the meeting, according to DEBKA-Net-Weekly 's intelligence sources, Mubarak ordered his security forces to start rounding up all the Egyptians listed in the documents as agents of Hassan's Iraqi network. Some 120 people were picked in the first wave.
The package also contained Hassan's reports to Baghdad. Under the codename "Number 3" attested to his ranking in the Iraqi hierarchy, he filed directly to Saddam Hussein.
Number 3 described in detail how he bought the loyalty of "several prominent Egyptian journalists", among them popular columnist Sayid Nasser, who were willing to publish articles shooting Saddam's propaganda line. One report outlined Hassan's steps for the recruitment of Shuwaike Abu Zayad, the wife of one of Egypt's top diplomats. She passed to Number 3 all the Egyptian foreign ministry's top-secret cables and documents.
As expectations of a US invasion of Iraq mounted in 2002, Mrs. Abu Zayad handed the Iraqis the ministry's secret computer codes. Iraqi intelligence then tapped in from Baghdad and downloaded document after document, including the secrets of US-Egyptian military cooperation and transcripts of conversations between Mubarak and the past and present US defense secretaries, William Cohen and Donald Rumsfeld. The Iraqis also read all the secret reports and documents pertaining to the annual US-Egyptian "Bright Star" military maneuvers.
Number 3 was particular fond of boasting to Saddam that he had recruited about 20 Egyptian generals who had been transferred to the reserves and farmed out to administrative jobs in Egypt's military industries. They positively gushed with information on their former units and new jobs.
Hassan also enlisted engineers, industrialists and doctors, some of them personal physicians to Egypt's senior military officers and political leaders. Saddam placed extremely high value on information on the health of top Egyptians.
Number 3 performed many more services for his master in Baghdad. They included:

1. Thwarting special operations mounted by the Iraqi opposition in Washington and London. In the US capital, according to one of the documents, Hassan recruited Najib Salhi, an Iraqi general and former commander of Iraq's 4th Division who defected to the United States. The general's people collected information in Washington on the activities of Iraqi opposition figures, including Mohammed Chalabi, now a senior member of the Iraqi Governing Council.

2. Using Iraq's Arab League office in Cairo to recruit agents from Eastern Europe. The documents are chock full of the names of Russian and Czech diplomats who served Iraqi intelligence. Number 3 was able to pass along to Baghdad volumes of secret cables and military reports that Moscow sent to or received from its embassies in the Middle East and Gulf.

3. Running a large number of import-export companies registered in Cairo. They were used as fronts for information, goods and money sought by Iraq.

4. Overseeing operations at the Qatar-based al-Jazeera, the biggest and most influential Arab satellite television in the world. Hassan got first look at intelligence gathered by the station and paid its staffers to tout the Iraqi line. This operation was a great success. Hassan's people managed to enlist the services of Faisal al-Qassam, one of the station's best-known broadcasters. Qassam, a Syrian, edits and moderates al Jazeera's popular daily phone-in show, "Counterpoint". Only a few of the dozens of callers who telephone from across the Arab world to discuss current events get on the air. But before every show, Number 3 or one of his minions decided with Qassam on the issue to be discussed and handed him a list of viewers who would call in with the questions they would ask. Those viewers were, of course, Iraqi intelligence agents from across the Arab world who read out the questions dictated from Baghdad.

The Egyptian regime therefore has its hands full rolling up Hassan's pro-Saddam network. It is waiting for a second stack of secret Iraqi files to come in from Washington. The president will then be able to finish a thorough clearing-out in time to hand a sparkling clean administration over to his successor
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Riyadh Spurns Powell on Detained Reformists
DEBKAfile Special Report
March 22, 2004, 8:47 AM (GMT+02:00)
US-Saudi relations, uneven since 9/11, have hit a new low over a fresh bone of contention: a sharply-worded protest from Washington against the continued detention of 16 Saudi reform campaigners, half of them university professors and including a number of Shiite spokesmen. Their immediate release was demanded.
DEBKAfile's Washington and Middle East sources describe this action as the first direct protest to an Arab nation in the framework of President George W. Bush's initiative for spreading democratic reforms throughout the Greater Middle East. The protest was in effect an American jog to the Saudi elbow to speed up change.
Riyadh's response was furious enough to have Secretary of State Colin Powell make an unscheduled detour after Islamabad and Baghdad and turn up in Riyadh Friday, March 19. Crown Prince Abdullah greeted him with the angry statement that the arrests were an internal affair. The interview ended in acrimony - in diplomatic parlance "a candid and open debate."
According to our sources, the Saudis are willing to release the campaigners, who demand that Saudi Arabia's absolute monarchy move towards a more constitutional model, only if they sign a pledge to stay out of politics. This they refuse to do.
In the background, DEBKAfile's Cairo sources report, the 22-nation Arab League is tensely engaged in trying to agree on a plan for adoption by the March 29 Arab summit as a riposte to the US Greater Middle East Initiative. The American protest to Saudi Arabia landed in the middle of these preparations with a disturbing thump. Until then, Arab rulers had regarded the Bush democracy initiative as a long-term project to be filtered through in easy stages with enough time for argument and debate along the way. Suddenly it was hanging over their heads.
The Bush administration is also speeding up its action to punish Damascus.
Empowered by recent legislation, President Bush looks as though he is only days away from slapping sanctions down on Syria for sponsoring terrorism, occupying Lebanon, failing to stop anti-American fighters entering Iraq and maintaining chemical and biological weapons programs. Congressional sources list the sanctions expected to unfold in stages as a ban on Syrian aircraft from the United States, prohibition of American energy companies from making future investments in Syria and a block on transactions in Syrian government-owned property - to name a few.
Furthermore, Free Syria Radio takes to the air on March 31 from a US-financed station in Cyprus, two days after the Arab summit opens in Tunis.
These moves are aimed, according to our Washington sources, at breaking up the united Arab front attempting to formulate an agreed plan to combat the Greater Middle East Initiative before it takes off. This front, spearheaded by Egyptian president Hosni Mubarak and Crown Prince Abdullah, now faces a direct challenge ahead of the Arab summit: come to terms with democratic reform as a living process already in motion or else risk a direct showdown with the Bush administration. They do not need to be reminded of the changes in Iraq exactly one year after the US invasion

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Tories can kill off the European Constitution
(Filed: 30/03/2004)
The Prime Minister yesterday reported back to Parliament on last week's EU summit in Brussels. In doing so he signalled the return of the European Constitution to the heart of British political debate.
Not that Tony Blair is seriously interested in consulting public opinion. His view is that this is an arcane document of no fundamental importance, which consolidates older EU treaties but otherwise adds little to the long-established ascendancy of European over British law. In the Commons, Mr Blair ridiculed the Conservative critique as alarmist exaggeration, implying that not much would change.
In reality, the draft constitution would have incalculable consequences. Superimposed on our own unwritten set of conventions, it would inaugurate an organic and inexorable process of centralisation, leading to the atrophy of the nation state and the hypertrophy of the superstate.
The constitution would not merely circumscribe, but abdicate parliamentary sovereignty - and in perpetuity. It is the Trojan horse whereby the last citadel of independence could be subverted from within. Because the new constitution is established by a treaty, it still requires ratification. Once the constitution creates Europe as a legal entity, treaties and ratification - the badges of sovereignty - would be consigned to the dustbin of history.
The best form of ratification would be a referendum. There is a strong and popular case for it, but so far Mr Blair has remained unmoved. Yesterday Downing Street dismissed the notion with a "No!" emphatic enough for a Thatcher or a de Gaulle. Given such authoritarian intransigence, it is imperative for the democratic Opposition (Liberal as well as Tory) to have a plan B, a way of testing public opinion, just in case Labour refuses to hold a referendum that it would probably lose.
The next best opportunity is the European elections in June, which might, with an energetic campaign, be turned into a de facto referendum. But an election in which most people normally abstain and in which other issues are bound to figure will not be easy to focus on so abstract a proposition as the constitution.
Even so, there is an opportunity here for Michael Howard. By exposing the hollowness of the pretence that Britain's first ever written constitution is merely a tidying-up exercise, the Tories ought to be able to denounce both the constitution itself and Mr Blair's duplicity, too. The House of Lords could do its part to prevent the ratification of the constitution without a prior referendum.
The constitution still has many hurdles to surmount, but even the best efforts of the Opposition may fail to halt the juggernaut before the next election. The country deserves a clear choice. Labour stands for a system in which European policies on asylum and immigration, taxation and justice, defence and foreign affairs would slowly but surely replace distinctively British ones. What would the Tories do if the constitution were a fait accompli?
A promise to "renegotiate" the constitution is not enough. Mr Howard needs to spell out precisely how he would reverse this inglorious revolution.

>> NOW THEY TELL US...

Skeleton in Clarke's closet
By Boston Herald editorial staff
Thursday, March 25, 2004
Former counterterrorism official and now tell-all author Richard Clarke was at it again yesterday, scorching Bush administration officials in testimony before the national Sept. 11 commission.
We'd like to know how Clarke squares his contention that he was the only one in the Bush administration truly committed to thwarting terrorism before the Sept. 11 attacks with this: It was Clarke who personally authorized the evacuation by private plane of dozens of Saudi citizens, including many members of Osama bin Laden's own family, in the days immediately following Sept. 11.
Clarke's role was revealed in an October 2003 Vanity Fair article. ``Somebody brought to us for approval the decision to let an airplane filled with Saudis, including members of the bin Laden family, leave the country,'' Clarke told Vanity Fair. ``My role was to say that it can't happen unless the FBI approves it. . . And they came back and said yes, it was fine with them. So we said `Fine, let it happen.' ''
Vanity Fair uncovered that the FBI never fully investigated the passengers on those privately chartered flights (one of which flew out of Logan International Airport after scooping up a dozen or so bin Laden relatives.) But Clarke protested to Vanity Fair that policing the FBI was not in his job description.
Isn't that convenient?
The same sanctimonious Clarke who now claims National Security adviser Condoleezza Rice didn't even know what al-Qaeda was, could have stopped the bin Laden airlift singlehandedly.
Why didn't he appeal to Rice, or even President Bush [related, bio] himself in one of those one-on-ones in the Situation Room, to block the flights? Surely it would have been helpful to determine - without a shred of doubt - that those passengers knew nothing about the Sept. 11 plot or the modus operandi of their notorious relative.
By all accounts, Clarke made hundreds of decisions in the days after Sept. 11, many clear-headed and right.
Approving those special flights seems like a wrong one, but it was a judgment call made in the aftermath of the worst terrorist attack on U.S. soil in history.
Perhaps it was the best decision he could make under the circumstances. It's too bad Clarke cuts no one in the Bush administration the same slack he so easily cuts himself.


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Conspiracy (A theory)
http://www.haaretz.com/hasen/spages/408750.html
By Doron Rosenblum
How did the State of Israel, once one of the most promising, riveting and admired countries in the world, plunge from the heights of promise and hope into the depths of despair, bereavement and failure? What caused a country where, everyone agrees, there are intelligent people - and in any event, human material of equal caliber to that of any other country - to deteriorate, willingly and with full awareness, down the slope of the sewage of history? What made it become, gradually but systematically, one of the most hated, most isolated and most miserable places to be on the planet? Why did a country that was established as a "refuge" and a "haven" turn into a trap in which the routine of life has become a routine of death and which is defined, according to the findings of a comprehensive public opinion survey, as "the country most dangerous to peace in the world"?
These questions have been contemplated for the past three years from every possible angle in an effort to understand and explain why, in this period especially, hardly any step taken by the government of Israel improves the country's lot or turns out to be useful. Why is the country striding along on a march of folly which has seen few precedents in human history? Why is it being swept from one idiotic decision to another? Why does it repeatedly act in explicit contradiction to the interests of its inhabitants?
In these past three years in particular, there is no mine that Israel has failed to step on, no opportunity it hasn't missed, no path it hasn't embarked on in the certain knowledge that it will be harmful.
Following the liquidation of Sheikh Ahmed Yassin this week, for example, one commentator informed us that "the security bodies are deploying for what is known as damage assessment" (!) in the wake of the act they decided on. The defense minister explained that the "wave of hits" was intended to meet the "wave of escalation in terrorist attacks that will follow in its wake." He thus made it clear what underlies this series of decisions, which can be called "cost-damage" (as opposed to "cost-benefit"). They seem not to be driven by clear and rational considerations of benefit but by vague and uncontrollable "planning" impulses, accompanied by a silent prayer that it will be possible to contain their damage. It's like someone who is mentally ill and takes into account his own attacks of madness, and deploys to absorb them.
The attempt to explain rationally and conventionally the dynamics at work here has long since failed. So much so, in fact, that the only explanation the political and military analysts on television could come up with this week was: "They're doing XXX and hoping something good will come of it."
Is there any other way to explain the deliberate escalations that have only intensified the waves of terrorism, the crushing of the Palestinian Authority (followed by the crocodile tears over the "anarchy that has been created" without the PA), the foolish "deals" that only strengthened Hezbollah, the hasty, hot-headed military operations, executed with the total abandonment of the security of the country's citizens? Or the fact that "at the end of the day" (as they like to say in the army), every day is worse than the one before, every year is harder than the last?
What's going on here? What's behind it?
Some will say that there is method to the madness: It's all a brilliant Machiavellian ploy by Messrs. Sharon & Mofaz to preserve the true apple of their eye - the settlements - even if the world turns topsy-turvy. Others will say that it's all inertia, the work of lowbrow generals who don't know any other way. There's nothing of genius here, just stupidity. Still others will put it down to shehur, witchcraft, the evil eye. It's just that our luck has turned around, you see, because from a certain stage the slice of bread always falls with the buttered side down. Some will say: we have found ourselves dastardly enemies - irrational, murderous, lacking the ability to compromise, without creativity or flexibility, and that their madness has somehow clung to us.
There is no explanation that hasn't been heard in the past three years, apart from one: conspiracy.
Maybe there's a mole.
Yes, a mole. A kind of planted spy - a destructive worm virus, a Trojan horse.
Let's put it this way: We have here a march of folly that is so systematic, so consecutive and so determined that there's no way it's happening by itself. Because if it were accidental, wouldn't there have to be the occasional random success as well? So maybe it's really not accidental. Maybe there's someone who's running the show - craftily, brilliantly.
Who is it? That's not clear. But that's the whole point. We don't know and we don't suspect. But maybe he's sitting there, way up at the top of the decision-making process, deeply dug in: an impeccable fellow, supposedly, above all suspicion; known even as a fervid patriot, ostensibly - preferably of the type who has gone through all the stages of Israeli involvement since his youth, including an impressive military career.
"Decent," seemingly, and even "simple-minded" outwardly, driven purportedly by passion and wrath, he succeeds in tapping brilliantly into all the psychoses and paranoias of the Israelis and in making them follow blindly his proposals, recommendations and decisions - however loony and harmful they may be. The motive is one: to cause, within the shortest possible time, the greatest and longest-lasting damage.
Let's say violence springs up on the Palestinian side - stone-throwing, roadblocks, firebombs. Our friend coils himself for action: here's a great chance to drag Israel into a "policy of escalation." Why shouldn't it cut off its nose to spite its face?
The tanks are already rolling, shells are flying, casualties are falling, the blood stirs up the passions. And when buses start to explode there is no longer anyone to stop the targeted liquidations. In fact, they're so targeted that they will cause Israel its most severe image damage: there's always a kid who gets killed, or a pregnant woman, and always, somehow, just as the cameras are rolling.
If it's proved beyond any doubt that these "targeted" assassinations also summon up horrific revenge attacks, worse than anything we have known, our friend will see to it that the idea is adopted and turned into permanent policy; and not only that, he will also see to its implementation - like pouring oil on the flames - whenever some sort of calm looms, some kind of respite, even if only because of mutual exhaustion. When it appears, for a moment, that the sides have already fought themselves silly, like two punch-drunk boxers, our malicious friend starts to get worried. Why should the stock market be bullish? Why should shoppers go back to the malls? Why should nature lovers take up hiking again? Why give some political process a chance? Right off he will douse them with a pail of water and get them back into action, for another round. Good morning, targeted assassination! Good morning, Israel! Good morning, Zaka! Good morning, red alerts!
Endlessly creative, our molish buddy will propose trapping Israel so that it will not emerge well from any situation. It will always fall over some tripwire that it has prepared itself in advance: "no" to the building of a fence until the number of dead soars into the hundreds; "yes" to a fence only along a route that generates international protest; "no" to Abu Mazen and to negotiations with the most moderate elements; "yes" to Nasrallah and to gestures and deals with the most extreme element. In the wake of appalling terrorist attacks against women and children, he will suggest a "moderate response," of all things, and that we build ourselves up from the feeling of victimization; following semi-legitimate guerrilla attacks on the army and on strategic targets he will propose that we "go ape"; give the option of negotiations in return for concessions and withdrawals in return for eternal war, he will opt for the latter. And so on and so forth. The sky's the limit.
At every stage, our friend will ask himself: How else can I be harmful? What haven't I done yet? What extra dimension can I inject into the conflict? What new layer can be added to it? We succeeded in elevating the conflict from a territorial dispute into a war of chaos involving decentralized communities and organizations. Well done, yes, but now it's time to elevate it to the religious plane, the apocalyptic level, so that the damage will extend not only into the next generation, but for untold generations down the line.
Our friend looks around and asks himself: What single action can I take in order to place Israel at the cutting edge in the war of civilizations against the whole of Islam? How can I upgrade the existential threats: from mere bombs and shooting by local ragamuffin groups to the gunsights of Al-Qaida? And how can I, by the same twist of the blade, cause the most effective publicity damage? His eye catches sight of the most adored religious leader, who is also old, sick and crippled. And the rest is the un-end of history: today the war of Gog and Magog; tomorrow the Apocalypse.
The holidays are approaching. Pleasant azure skies above, a dry desert wind, flowers blooming across the land. A moment of quiet. The economy is showing a bit of improvement. The fingers of our friend are beginning to itch. Then a brain wave: he goes over to the beehive and kicks it as hard as he can. A vast swarm of bees hides the light of the sun. And, as a morale boosting bonus, he also makes sure to inform the public that in his view, the war will go on for 20 years at least (without deducting the past three years).
And again he looks around: what else, what else ... A mischievous glint in his eye: the Temple Mount?
Hey, that's an idea, too ...
Who's the mole? And furthermore: why is he doing it? In whose service is he operating? A messianic organization? Spectra? Smersh? The cult of the devil? The angels of hell? One might think he's working in the service of the Palestinians, were it not for the suspicion that an equally malicious mole is operating at their highest levels, too, and is constantly undermining their best interests.
So, who is he? And, above all, what's his motive? What's he after? It's not clear. It might all really be just an unfounded theory, a ridiculous thesis with no foundation of any kind. But tell me, in the light of what's going on, does anyone have a better explanation?
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Where a foreign passport and an American accent don't help
By Daphna Berman
Students from the U.S. often think police here are too involved with terror to deal with drugs - until they get caught and thrown in jail.
When Yaakov came to study in a Jerusalem yeshiva for a year, he never thought he would spend 10 months in an Israeli prison. Neither did Michael, a yeshiva student from California, or Sarah, a seminary student from New York. But that didn't prevent the three American teens from being arrested and thrown in the Israeli prison system - a place, they soon discovered, where a foreign passport and an American accent didn't come to their rescue. "I never thought I would get caught," Sarah, a petite blond who doesn't look a day over 15 told Anglo File this week. "It always seemed like the police and the IDF were using their intelligence to bust Hamas, not a bunch of American kids."
Israel, she says, seemed to be a giant playground without rule, law, or consequence - a place where it was acceptable to smuggle drugs over international borders. According to Caryn Green, a social worker who deals with English-speaking teens in Jerusalem, many of the North American yeshiva students who get caught in the world of Israeli drug smuggling think that crime here is somehow safer than back home. "The streets look different, the police look different, and kids don't really think of it all as real," she explains. "Drinking rules are more lenient, which gives the impression that everything is more lenient, and so the environment makes them feel less vulnerable."
Many of the kids have abandoned an Orthodox lifestyle, and as one former drug dealer from Jerusalem added, "you've already defied God, which is the ultimate rule of any Orthodox kid - after that, drugs don't seem to bad."
As director of Crossroads, an organization for troubled Anglo youth located off Jerusalem's Zion Square, Green deals with kids who "get picked up all the time" for drug-related interrogations. In the three years since she founded the organization, nine teenagers from abroad have been sentenced to prison terms, four of whom were arrested at Ben-Gurion International Airport for drug smuggling. And although most of these yeshiva students have used or abused drugs before they arrived in Israel, the run-in with the police here, she says, is usually their first.
Spoiled princess
Sarah first smoked marijuana on her 13th birthday, and began dealing drugs two years later. But as the daughter of a wealthy New York businessman who describes herself as a "spoiled little princess," she says she was never motivated by a desire for added income. She helped friends deal as well, but she never asked for commission or her fair share of the profit. "I didn't want money, and I didn't need money," the 20-year-old said this week. "It was always about fun."
Still, it wasn't until Sarah arrived in Israel that she began to smuggle drugs internationally. In December of 2003, the young seminary student traveled to Amsterdam with some friends, who were also yeshiva students; her parents knew where she was going, but decided they didn't want to know why. Three months later, the apartment she was living in was raided: Sarah was arrested, along with Yaakov, and four other American teenagers. "I called my parents and expected to be out in 24 hours," she recalls. "That's the way it was for most of my life - if I got caught smoking in school, they couldn't do anything to me because my parents funded the school. I just figured my parents could sort this out."
After hours of interrogation, hunger, cocaine withdrawal, and a night spent in a holding cell in Jerusalem's Russian Compound, Sarah realized that neither her American citizenship nor her parents' money could come to her rescue. She remained in the holding cell for a month, and was then transferred to Neveh Tirza prison for women in Ramle, where she remained for another two weeks with an American friend, also there on drug-related charges. But Sarah was, by her own estimations, relatively lucky.
The guards at the prison, she says, felt bad for her and gave her preferential treatment-partially because she didn't speak Hebrew, but also because she has the pretty innocence of a young girl. In the Russian Compound, she was allowed to bring in a television, and in Neveh Tirza, her father would bring food from the outside for Shabbat, despite prison regulations. "My time in jail was pretty cushy," she admits. "I think they were also afraid of putting us with Israelis."
In many ways, though, Sarah's experience was atypical of North American yeshiva students who have run-ins with the Israeli penal system. She had the luxury of hiring a private attorney that her friend Yaakov, who was arrested the same day, did not, and says that as an innocent looking female, she was given leniencies her male friends were denied. Most nights in Neveh Tirza, she watched MTV with one of prison guards. After a month-and-a-half of incarceration, Sarah was released to nine months of drug rehabilitation, which she has since completed. She's now finishing her obligatory community service at a Jerusalem soup kitchen.
A god on the streets
Yaakov, like Sarah, was no newcomer to the drug scene when he left his home in Brooklyn to study in a Jerusalem yeshiva three years ago. Over the course of two years, he traveled to Amsterdam three times, personally smuggling between 12 to 14 kilograms of high quality marijuana, estimated at NIS 2 million. He had several people selling and smuggling drugs for him during that period as well, and was by his own estimates, a king in the English-speaking downtown Jerusalem crowd. "It starts as an easy way to make money, but it turns into a life style where people are always looking for you, needing you, and looking to get drugs from you," Green explains.
Being "a god on the streets," she adds, becomes addictive. The police arrested Yaakov in January 2003 - five days after his last and final trip to Amsterdam, and a week before his 18th birthday. "I thought I was invincible," he recalled this week on the telephone from his apartment in Brooklyn. "I kept thinking, `you can't touch me, I'm an American.' But after a few days, I realized they could touch me."
He says he was beaten, interrogated and deprived of a lawyer. At the age of 18, Yaakov was sentenced to 15 months in the Israeli prison system, 10 of which he served. "Prison was like a Third world country," he says. "People were piled into rooms, there were mice running around, bed bugs, mosquitoes, and during the summer, it was hot as hell." He says he got used to prison life quickly, learned to speak Hebrew "the hard way," and gained a reputation as "the crazy American."
Michael, meanwhile, joined him in prison soon after, and though the two yeshiva students knew each other only in passing before their incarceration, they became quick friends. They took cold showers in the winter, slept through the stifling Be'er Sheva heat in the summer, and though they were allowed visitors twice a month, Michael refused. "The visiting room was gruesome - it was like a cage - and I didn't want anyone to come down to see me," he said this week, also from his apartment in New York.
Michael is hesitant to provide details of his drug-dealing past over the phone, but admits, like Sarah and Yaakov, to have traveled to Amsterdam with friends to bring back mass quantities of drugs. "I would never have done this in the U.S., but Israel just seemed like it was Mardi Gras every day," he says. Michael was also 18 at the time of his imprisonment, and he served nine months in prison. He spent his days reading, "getting a little more knowledge, and learning not to make the same stupid mistakes again."
Michael is now a college student with hopes of becoming a lawyer. "Prison showed me a different world," he says. "It showed me a world with consequences."


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Revived to die another day?
Mar 26th 2004
From The Economist Global Agenda
European Union leaders have relaunched their plan to give the EU a written constitution, which had looked doomed after the collapse of talks last December. The leaders now seem ready to compromise but what about their voters and parliaments?
"TWELVE weeks to stop Euro superstate", screamed Britain's Europhobic tabloid Sun this week, reporting that European Union leaders--led by the nefarious, cheese-eating President Jacques Chirac of France--had revived their proposals for a written EU constitution and were aiming to get it agreed by June. To the horror of those opposed to "Ever closer union", the constitution would among other things extend the Union's powers and remove national governments' vetoes in many areas. It would also give the EU a full-time president and foreign minister and introduce a charter of fundamental rights.
Talks on the proposed constitution collapsed last December, when the then holder of the EU's rotating presidency--Italy's prime minister, Silvio Berlusconi--failed to resolve big differences over such issues as member countries' voting strengths. After this, it looked like the constitution would not be revived for years. However, now that the capable and diplomatic Irish prime minister, Bertie Ahern, has taken over the EU presidency from the inept and abrasive Mr Berlusconi, the draft constitution has been fished out of the bin and compromise is in the air. In a summit in Brussels on Thursday March 25th, dominated by discussion of anti-terrorism measures (see article), the leaders of the 15 current EU member states and the 10 countries that will join in May committed themselves to agreeing on a final text for the constitution by their next summit on June 17th and 18th.
One of the main objectives of the constitution is to rationalise the EU's voting arrangements so that, as it expands to 25 members and eventually more, it does not suffer near-permanent stalemate. The draft discussed in December included a new, "double majority" voting system in which most measures would be approved if a numerical majority of EU countries voted for them; and if those countries' combined populations were at least 60% of the EU's total. But Poland and Spain insisted on keeping the voting scheme agreed at the Nice summit in 2000, in which each gets almost as many votes as Germany despite having only around half its population. The smaller countries feared that the new voting system would allow the three largest EU members, Germany, France and Britain, to dominate the rest. Now, a compromise is being floated, which among other things would force the big three to win the backing of at least two other countries to block any proposed law. To pass, a law would need the votes of countries representing perhaps 64% of the EU population. And the new voting system would be delayed for a number of years.
There are several reasons, besides Mr Ahern's quiet diplomacy, why the constitution has been revived so soon after it had seemed lost. In the wake of the Madrid bombings, EU leaders have been keen to display their unity. The unexpected victory of the Socialists in Spain's general election, a few days after the bombings, brought to power a new government that is more willing to compromise on voting arrangements--and keen to align itself diplomatically with France and Germany, rather than Britain and America, as the previous, conservative government did.
Some people in France and Germany had seen the collapse of the constitutional talks as an opportunity to push ahead with forming an "inner core" of EU countries that would pursue faster, deeper integration. But, the more they have thought about this, the clearer it has become that there is little of substance that such a core group could achieve. Some proposals, such as unifying their criminal-justice systems, present huge challenges. And anyway, the existing EU treaties limit the ability of any group of countries to push ahead without the others. So they have turned their attention back to reaching agreement on the constitution.
Faced with being the only one still resisting an agreement, Poland's prime minister, Leszek Miller, had begun in recent days to signal his readiness to compromise. But while Mr Miller sat at the summit table on Thursday night, a group of parliamentarians from his Democratic Left Alliance (SLD) met in Warsaw and agreed to break away and form a new party. On returning home, Mr Miller, who has become deeply unpopular as a result of corruption scandals, bungled health reforms and Poland's 20% unemployment rate, announced his resignation (see article). Even if his replacement is equally willing to compromise over the EU's voting arrangements, the Polish parliament and people may not be. The parliament has already passed a motion rejecting anything other than the Nice voting rules. If Poland holds a referendum on the EU constitution, as Mr Miller has suggested it might, the answer might well be Nie.
Mr Chirac has raised the possibility of France holding a referendum to ratify the EU constitution but is now backing off, realising his compatriots might also say Non. And Britain's prime minister, Tony Blair, is under strong pressure from the opposition Conservatives and the Eurosceptic British press to call a referendum. If he continues to resist this, he will only boost the fortunes of the Eurosceptic opposition leader, Michael Howard, ahead of an election expected next year. At last December's summit, shortly before the talks collapsed, Mr Blair won acceptance of his demand that member countries keep their vetoes on such issues as tax, social security and judicial co-operation. However, in the revived talks he will have to fight for them all over again--and if he does not win back all these concessions, the press, parliament and public will give him hell.
Since the constitution only takes effect if it is ratified by all 25 countries, there is a strong chance that, despite the EU leaders' willingness to compromise, it will fail to get through. In one respect, this would be a shame: the new voting arrangements make sense, as does the idea of giving the Union a fundamental charter outlining its powers, in place of the current hotch-potch of treaties. However, the draft constitution that EU leaders have been discussing, drawn up by a 105-member European Convention, is a terrible mess. It is so hard to understand that even the convention's members struggle to explain it. Whereas it ought to have strengthened the principle of "subsidiarity" (devolving decision-making so it is as close to the people as possible), it does the opposite--making everything subordinate to the Union's objectives, which include various types of "cohesion" (read: Brussels-led harmonisation).
If the citizens of one or other part of Europe send the constitution back to the bin, the EU might be forced to come back with a simpler, more sensible version a few years from now, when its new members have had time to settle in and any problems of an enlarged Union will have had time to emerge. This would be no bad thing.
Copyright ? 2004 The Economist Newspaper and The Economist Group. All rights reserved.



Saudi Arabia
The limits of reform
Mar 25th 2004 | CAIRO
From The Economist print edition
Why six Saudi liberals are in jail, despite talk of change
AFP
The chief mufti squeezes the crown prince
Get article background
IF YOU thought that change was coming soon to Saudi Arabia, think again. Consider the six prominent Saudi liberals who have spent the past week in jail. Their crime is that, unlike seven colleagues arrested at the same time but freed soon afterwards, these recalcitrants refused to pledge that they will stop pestering the country's rulers to reform.
There are other countries where simply asking politely for more rights--in this case, by signing several petitions--can land you in prison. But Saudi Arabia had lately shed some of its aura of arch-autocracy. A mix of pressures--home-grown terrorism, criticism from abroad, and the general restlessness of their mostly youthful subjects--appeared to have awakened Saudi princes to the incongruity of running a large, modern state like a family ranch. The past few years have seen the start of a wide-ranging dialogue, in the press and in government-sponsored forums, to find ways to devolve at least a measure of power to commoners.
Tensions were bound to emerge, particularly in the absence of any elected assembly to air differences or frame a legislative agenda. Reform-minded citizens took to probing, to see just how far the establishment, which in Saudi Arabia means the 10,000-odd princes of the al-Saud family and their pampered traditional allies, the Wahhabi clerical hierarchy, would let them go. They soon encountered red lines. In the past year, for example, half a dozen newspaper columnists have lost their jobs for suggesting such things as abolishing the religious police, allowing women to drive cars, and opening the national budget to public scrutiny.
But a strong popular backlash against religious extremism following recent terror attacks, and the tacit backing of some senior princes, had lately encouraged the kingdom's normally quiescent liberals to further boldness. Despite warnings from the authorities, one group of them had the temerity to prepare yet another petition, demanding the right to set up a human-rights commission. (The government recently licensed an ostensibly independent body to monitor human rights, but most of its members are state employees.)
These are the men, most of them academics, now in jail. But their fate is not the only signal that hard-line princes are losing patience. The minister of defence and second-in-line to the throne, Prince Sultan, this week dismissed any idea that the Shura Council, an appointed body that vets laws, might become an elected legislature, on the ground that illiterate people might be voted in. For his part, the chief mufti of the kingdom, Sheikh Abdel Aziz al-Sheikh, declared that liberals were as much of a danger as militant religious extremists. "Those who doubt the nation and its leadership and its faith are the true enemies, whether or not they claim to call for reform," he said. "The nation's reform will come about only through the faith of Islam and a leadership that imposes this faith and God's will."
Liberal reformists have not despaired yet. While one group launched yet another petition, to demand the release of their colleagues, others met Prince Nayef, the owlish interior minister, to make the request personally. Participants at the dawn meeting said that the prince assured them that royal doors would always be open to citizens' complaints but that "foreign agencies" were exploiting the reformers' platform in order to damage Saudi national unity. In other words, to call openly for domestic change is tantamount to treason.
Copyright ? 2004 The Economist Newspaper and The Economist Group. All rights reserved.

RECIT
Les "tigres" de Guantanamo
LE MONDE | 27.03.04 | 13h08
Le 17 mars, le Pentagone a fait visiter ? un groupe de journalistes le camp de Guantanamo, transform? en v?ritable usine ? interrogatoires par une unit? sp?cialis?e : les Tiger Teams.
Au nom de la guerre contre le terrorisme, les Etats-Unis d?tiennent plus de 600 personnes sans jugement ? Guantanamo. A intervalles r?guliers, le Pentagone y organise des "media tours". Avant l'embarquement, les journalistes s'engagent par ?crit ? ne pas tenter d'entrer en communication avec les prisonniers. Chaque soir, un militaire revoit le contenu des appareils photo. Les visages de d?tenus sont effac?s, conform?ment aux conventions de Gen?ve, ainsi que tout ce qui pourrait nuire ? l'image de l'arm?e.
La visite guid?e ordinaire du 16 au 19 mars a pris un relief particulier. Accus?e de maltraiter les prisonniers, l'arm?e am?ricaine a montr? quelques sc?nes du camp Delta. Pour la premi?re fois, la presse a pu voir les pi?ces o? se d?roulent les interrogatoires. Les militaires ont aussi ouvert la salle du tribunal o? se tiendront les proc?s des "ennemis combattants". Les audiences ne commenceront pas avant plusieurs mois, mais, dans ce no man's land juridique qu'est Guantanamo, les responsables am?ricains sont press?s de montrer qu'une ?bauche de juridiction, f?t-elle militaire, est en chantier.
Le commandant du camp, le major- g?n?ral Geoffrey Miller, a tenu ? pr?senter lui-m?me le travail accompli. Guantanamo est "un laboratoire dans la guerre contre le terrorisme, a-t-il expliqu?. La d?tention est humaine, ici, et nous en sommes fiers". C'?tait sa derni?re conf?rence de presse. Apr?s dix-huit mois ? Cuba, il a ?t? nomm? le 22 mars en Irak. L?-bas aussi, il s'occupera de d?tention. "Les Etats-Unis ne torturent jamais personne, a-t-il assur?. Nous autorisons certaines techniques d'interrogatoire, mais pas les techniques coercitives."
Dans la foul?e, le lieutenant-colonel Pamela Hart a projet? le diaporama de pr?sentation du camp. Guantanamo : 610"ennemis combattants", 2 162 soldats. De 250 ? 300 interrogatoires par jour. Il est interdit d'enregistrer, a-t-elle dit, mais on a le droit de citer.
LA BASE
Guantanamo n'est pas vraiment une baie. Tout juste un morceau. Pour aller de l'a?roport ? la base, il faut prendre un ferry. Les Etats-Unis louent l'endroit ? Cuba depuis 1903, au terme d'un bail perp?tuel. Si Fidel Castro dispara?t, le commandant de la base navale, Les McCoy, ne pr?voit pas de changement. "La base sera conserv?e aussi longtemps que durera la guerre contre le terrorisme", anticipe-t-il.
La base est envahie d'engins de chantier. Delta I, Delta II, Delta III, camp 4, camp 5, camp Echo... Depuis l'ouverture, en janvier 2002, Guantanamo a connu une sorte de boom immobilier. Le camp 5 n'est pas encore tout ? fait termin?. Ce sera le joyau du syst?me. "L'installation d'interrogatoires et d'isolement du XXIe si?cle", explique le diaporama. Tout sera informatis?. " On pourra tenir quatorze interrogatoires en m?me temps, s'exclame un officier. Et sans une feuille de papier !"
Depuis janvier, le Pentagone s'impatiente. Il faut acc?l?rer les lib?rations. Sur place, les militaires voudraient ?tre s?rs que les d?tenus ont livr? tous leurs secrets. En deux ans, 119 d?tenus ont ?t? rel?ch?s et 12 autres ont ?t? transf?r?s pour incarc?ration dans leur pays (4 Saoudiens, 1 Espagnol, 7 Russes). Le camp 5 va accro?tre "l'efficacit? de la main-d'?uvre de 50 %". Cette fois, il ne s'agit pas de pr?fabriqu?. Le b?timent a une "dur?e de vie de cinquante ans". Les premiers condamn?s y seront probablement d?tenus. Le commandant Miller d?ment toute intention d'y construire une chambre d'ex?cution.
Les d?tenus sont originaires de 42 pays. Six seulement font l'objet de poursuites. Les derniers sont arriv?s en novembre 2003. Les militaires continuent d'affirmer que personne n'a d?barqu? l? par hasard et qu'ils d?tiennent des membres d'Al-Qaida qui travaillaient ? la mise au point de chaussures ? explosifs ou ? l'emploi de t?l?phones cellulaires comme d?tonateurs. "Plus d'une cinquantaine n'ont aucun scrupule ? expliquer qu'ils sont des djihadistes actifs et que, s'ils sont lib?r?s, ils retourneront imm?diatement au combat", affirme Steve Rodriguez, le chef du renseignement, d'origine cubaine.
M?me leur ?ge est tenu secret. Pour montrer qu'il n'y a pas de mineurs, l'arm?e ne l?sine pas. Elle proc?de ? une radio du poignet et ?value la densit? des os. La marge d'erreur ?tant de 1 ? 3 ans, le commandant juge impossible de se prononcer. A l'autre extr?mit?, il reconna?t qu'"un petit nombre de d?tenus approchent les 70 ans". Les d?tenus n'ont pas de visite d'avocat ni de famille. Mais ils ont ?t? mis au courant que "l'Irak avait ?t? lib?r?", comme dit un officier. Ils n'ont plus d'aum?nier musulman depuis l'arrestation du capitaine James Yee. L'officier a ?t? accus? d'espionnage au profit de la Syrie et de s?dition. Il a pass? soixante-seize jours aux arr?ts. Finalement, l'arm?e a laiss? tomber les charges. Le 22 mars, il a ?cop? d'une r?primande pour adult?re.
Pr?s des deux tiers des soldats sont issus de la r?serve ou de la Garde nationale. Ils aimeraient bien rentrer chez eux, mais ils sont convaincus de participer ? la GWOT (global war on terror), la lutte globale contre le terrorisme. "Personne ne se l?ve le ma- tin en se disant : chic, je vais aller surveiller des terroristes !, dit le sergent Jansen. Mais, en m?me temps, pendant qu'ils sont ici, ils ne sont pas l?-bas en train de faire on ne sait quoi."
Sortis du camp Delta, les soldats ach?tent le Navy Times. Ils regardent la t?l?vision des forces arm?es (AFN). Les publicit?s sont une succession de mises en garde. Contre le soleil, qui br?le. Contre le bavardage, qui peut ?tre exploit? par l'ennemi. Il leur arrive d'?tre confront?s ? des questions d?licates : "Mes enfants ont lu dans la presse le t?moignage des Britanniques qui se sont plaints d'avoir ?t? maltrait?s, confie un officier, hors micro. Ils m'ont t?l?phon? : vous faites vraiment ce genre de choses l?-bas ?"
LES INTERROGATOIRES
La pi?ce ma?tresse du dispositif carc?ral est l'interrogatoire. Une unit? a ?t? sp?cialement form?e pour Guantanamo et entra?n?e dans l'Arizona. Elle a transform? le camp en une usine ? interrogatoires. Selon le commandant Miller, les Tiger Teams sont maintenant plus de 200, et elles sont pr?sentes en Afghanistan et en Irak.
Les militaires jurent qu'ils ont obtenu des renseignements int?ressants sur des cellules en activit?, y compris en Europe. Renseignements qui ont m?me permis de "lancer des op?rations militaires" ou de mettre en cause "des organisations charitables fournissant un soutien financier ? Al-Qaida". Ils sont contents aussi d'obtenir des renseignements topologiques sur les chemins et les caves des montagnes afghanes. D'un point de vue sociologique, il n'y a pas de d?tenu inint?ressant. "Chaque d?tenu a une valeur diff?rente, explique le commandant Miller. Et tous nous aident ? comprendre le terrorisme et la mani?re de le r?duire."
Les interrogatoires sont men?s principalement par des r?servistes. Le mensuel Vanity Faira interrog?, en janvier, des professionnels de l'espionnage, qui ont ironis? sur l'enthousiasme de n?ophyte des Tiger Teams. Depuis, l'?tat-major met en avant l'"expertise" de ses troupes. Le chef des Tiger Teams appartient ? la division homicides du service de police d'une grande ville du Midwest. Il pr?f?re garder l'anonymat, mais il a "400 inculpations ? son palmar?s".
Les Tiger Teams fonctionnent par ?quipes de trois : analyste, interrogateur et interpr?te. L'interrogatoire se d?roule dans une pi?ce quasiment vide, munie d'une table, d'un miroir sans tain, d'une cam?ra et d'un anneau dans le sol. Le d?tenu arrive menott? dans son "costume trois pi?ces", l'ensemble de cha?nes qui lui entravent pieds et mains et sont reli?es ? la ceinture.
Au mur, il y a des affiches de l'Afghanistan. Sur un ordinateur portable, on lui montre ? l'occasion un film de propagande, Afghan Spring, pour lui donner la nostalgie. "Ils voient que l'?cole a ?t? repeinte en jaune ; on leur raconte que la route Kandahar-Kaboul est en reconstruction", indique le chef enqu?teur. Il affirme avoir r?ussi ? faire parler l'an dernier "l'instructeur d'Al-Qaida pour les explosifs. (...) On a jou? aux ?checs et on a mang? des hamburgers, beaucoup de hamburgers. C'est un individu qui aime manger".
Les Tiger Teams ont une salle avec un d?tecteur de mensonges. Le commandant d?ment qu'elles utilisent l'arme de la privation de sommeil : "En tout cas, pas depuis que je suis l?." Les sessions durent au maximum dix heures, en deux s?ances de cinq heures. Mais l'interrogatoire peut avoir lieu ? tout moment, sept jours sur sept et vingt-quatre heures sur vingt-quatre. La devise du groupe : "Tiger never sleeps" (le tigre ne dort jamais).
DES "?L?MENTS DE CONFORT"
Le camp Delta est install? ? l'endroit que les Cubains ne voient pas depuis leurs miradors. L'un des coins les plus arides, au bord de la falaise. Il faut boire plusieurs litres d'eau par jour. Pour inciter les d?tenus ? parler, le major-g?n?ral Miller et ses hommes ont d?velopp? un syst?me de triage. "A l'isra?lienne", dit un sp?cialiste des prisons. S'ils sont "coop?ratifs", les prisonniers gravissent les ?chelons. Partant des camps 2 et 3, de haute s?curit?, l'objectif est d'arriver au camp 4 (s?curit? moyenne).
Les d?tenus sont encourag?s ? ?tre coop?ratifs par des r?compenses, des "?l?ments de confort". Sont consid?r?s comme des ?l?ments de confort : les brosses ? dents de plus de 3 cm, le calot de pri?re, les livres, les minutes de sport additionnelles... Et l'eau. Le fait d'avoir de l'eau en bouteille est un ?l?ment de confort qui se monnaie : "Une bouteille bien fra?che, au lieu de boire au robinet", sugg?re un officier. Parfois, c'est le gobelet en carton qui se m?rite. "Un gobelet plut?t que de devoir boire dans ses mains", r?sume le colonel Cannon.
Les privil?ges sont r?vocables. En cas de "mauvaise conduite", le d?tenu peut "perdre un objet pour cinq jours, par exemple". De 20 ? 30 d?tenus n'ont jamais quitt? le camp 3, indique le g?n?ral. Des "non-coop?ratifs", dont il est difficile d'obtenir l'identit?. Une centaine, dits "dociles", sont au camp 4. Les gardiens sont ?quip?s d'ordinateurs. "Un logiciel con?u par la police militaire pour la police militaire", dit le lieutenant-colonel Michael Young.
Des incidents ont lieu plusieurs fois par semaine. "Par exemple, quand une femme de la police militaire passe juste au moment o? un d?tenu sort de sa douche, dit le colonel Cannon. Ou quand on cogne le Coran qui est accroch? au grillage." Il arrive aussi que les prisonniers "hurlent des menaces contre les troupes am?ricaines, d?noncent les Infid?les, jouent sur les questions d'ethnicit? ou insultent les femmes". Un quart des membres de la police militaire sont des femmes, et il n'est pas question de changer. La soldate Jiovani Barber, 24 ans, une joailli?re des ?les Vierges, estime avoir pris le dessus. "S'ils veulent avoir quelque chose, ils sont bien oblig?s de me le demander."
La police militaire ramasse les ustensiles en plastique pour ?viter les suicides. Il y a d?j? eu 34 tentatives par pendaison. Le CICR a protest? l'an dernier contre la d?t?rioration psychologique des d?tenus, en l'absence d'une notion de temps et de limite ? la d?tention. Le colonel Cannon estime avoir mis fin ? la s?rie. Non pas que le moral soit meilleur, mais il a augment? la fr?quence des patrouilles. Les suicidaires n'ont plus le temps de s'organiser.
Au camp 4, l'uniforme n'est plus orange, mais blanc. "C'est beaucoup plus frais et beaucoup plus prestigieux dans leur culture", croit savoir un officier. Les d?tenus ont une vie communautaire et passent huit heures par jour hors des cellules. Le camp 4, c'est "la terre promise", dit le chef de la d?tention, "la derni?re ?tape avant de rentrer ? la maison". Les d?tenus re?oivent des chaussures en toile en plus de leurs flips-flops. L'appel ? la pri?re est retransmis par les haut-parleurs du mirador. Les d?tenus n'auront jamais vu un juge en deux ans, mais on ne les aura pas bern?s sur l'heure de la pri?re. "On regarde sur l'Internet pour ?tre s?r de l-heure exacte", explique le sergent Sam Wireman.
In extremis, on tente de leur donner une autre image de l'Am?rique. Au lieu d'une rotation constante, les gardiens s'efforcent de d?velopper une relation avec les d?tenus. Des cam?ras surveillent les chambr?es, mais n'enregistrent pas les sons. Apr?s avoir v?cu derri?re des grillages, les d?tenus ont droit ? un rideau de douche.
Lorsque nous avons visit? le camp 4, des d?tenus jouaient au ping-pong ; d'autres ?taient assis autour des tables de pique-nique. Un instant, une voix nasillarde, venue d'une chambr?e, a couvert les explications du sergent. Une grammaire approximative, mais le message ?tait clair : "Il ment avec vous." Plus loin, il y a eu quelques cris : "Go ! Go !"

Corine Lesnes

* ARTICLE PARU DANS L'EDITION DU 28.03.04





Affaire Ioukos: des milliards bloqu?s en Suisse
swissinfo 29 mars 2004 20:58
Tandis qu'une partie de ses fonds sont bloqu?s, l'ancien patron de Ioukos Mikha?l Khodorkovski est en prison. (Keystone)
La Suisse a gel? une somme record de plusieurs milliards de francs dans l'affaire du g?ant p?trolier russe Ioukos.
Les avocats des personnes et soci?t?s vis?es vont faire recours contre ce blocage. Ils critiquent l'attitude de la justice suisse dans un dossier qu'ils estiment hautement politique.
M?me si aucun chiffre pr?cis n'a ?t? articul?, les sommes en jeu dans cette affaire sont consid?rables. Le Parquet russe, qui a demand? l'entraide judiciaire de la Suisse, a r?cemment ?voqu? le gel de 6,2 milliards de francs sur les comptes de 20 actionnaires de Ioukos, parmi lesquels l'ex-PDG Mikha?l Khodorkovski.
Dans un communiqu?, le Minist?re public de la Conf?d?ration (MPC) pr?cise que les sommes ont ?t? gel?es ? la fin de la semaine derni?re et qu'il ?s'agit d'avoirs de personnes physiques et morales concern?es par la proc?dure p?nale en Russie?.
?Vague et incompr?hensible?
Lors d'une conf?rence de presse convoqu?e ? Gen?ve, l'avocat Philippe Neyroud, mandat? pour d?fendre entre autres Mikha?l Khodorkovski, a qualifi? ce dossier de ?politique?.
Le gel des avoirs par Berne s'est fait sur une demande russe ?vague et incompr?hensible?. Aucun pays au monde n'aurait r?agi comme l'a fait la Suisse, ajoute l'avocat.
Il demande donc ? la justice suisse de ne pas tomber dans le pi?ge politique et de s'engager dans une analyse ind?pendante du dossier.
Quant ? la somme exacte qui a ?t? gel?e, Ma?tre Neyroud juge ?faux? le chiffre de 6,2 milliards de francs. L'avocat genevois, accompagn? de deux confr?res am?ricains, n'a cependant pas voulu donner d'estimation.
Cinq banques
Le MPC, qui avait jusqu'ici refus? de confirmer le gel des fonds, ne fournit pas non plus de chiffres pr?cis.
?Il ne s'agit pas uniquement de comptes dont les montants peuvent ?tre d?termin?s en francs et en centimes, mais aussi d'autres biens et avoirs dont la valeur est difficile ? estimer ? premi?re vue?, explique son porte- parole, Hansj?rg Mark Wiedmer.
L'affaire est complexe, avec une trentaine de soci?t?s et une vingtaine de personnes vis?es.
?Il y a s?rement eu amalgame?, affirme Ma?tre Neyroud. Selon lui, cinq banques auraient re?u des requ?tes de gel de comptes: l'UBS, BNP Paribas, SG Banque, Cr?dit Agricole Indosuez, et Dresdner Bank.
Pour l'avocat am?ricain Sanford Saunders, Mikha?l Khodorkovski et ses amis sont attaqu?s car ils repr?sentent le changement en Russie. Pour lui, ?ce qui leur arrive en Suisse est la continuation de ces attaques?.
Gel provisoire, puis formel
A la suite de la commission rogatoire russe, des perquisitions ont ?t? men?es dans quatre cantons le 4 mars dernier, dans le cadre d'une proc?dure pour ?appartenance ? une organisation criminelle, abus de confiance, escroquerie et escroquerie fiscale?.
Le MPC a saisi des documents, entendu des t?moins et proc?d? au blocage d'avoirs ?par mesure urgente et provisoire?, afin de sauvegarder des moyens de preuve.
La justice russe ayant confirm? cette demande de blocage dans un compl?ment ? sa commission rogatoire, il a ?t? proc?d? ? un gel formel.
Gel record
Les avocats annoncent un recours au Tribunal f?d?ral (cour supr?me). Le gel d'une telle somme constitue un record pour la Suisse. Pour m?moire, la justice helv?tique avait bloqu?, en janvier 2000, pr?s d'un milliard de francs, d?pos? en Suisse par l'ex-dictateur nig?rian Sani Abacha.
Le groupe Ioukos est accus? par Moscou d'?vasion fiscale et de fraude ? grande ?chelle. Mais des analystes ? Moscou pr?sentent cette affaire comme une tentative du pr?sident Vladimir Poutine de mettre au pas Mikha?l Khodorkovski en raison de ses ambitions politiques.
swissinfo et les agences
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L'?conomie suisse face au d?fi de l'?largissement
swissinfo 29 mars 2004 08:19
D?s le 1er mai, les entreprises suisses vont se tourner un peu plus vers l'Europe de l'est. (Keystone)
En panne de croissance, l'?conomie suisse s'appr?te ? rivaliser contre une Europe de 25 Etats.
Les secteurs traditionnellement li?s aux exportations en profiteront. Mais le march? int?rieur devra ?tre r?form? pour b?n?ficier pleinement du retour de la croissance.
Nombre d'experts ?conomiques, l'Organisation de coop?ration et de d?veloppement ?conomiques (OCDE) en t?te, s'accordent ? le dire: la croissance ?conomique suisse traverse une passe difficile depuis une dizaine d'ann?es.
Au moment o? dix pays d'Europe centrale et de l'Est s'appr?tent ? rejoindre l'Union europ?enne (UE), l'?conomie suisse semble toujours plus isol?e au milieu d'un continent dont l'interconnexion des ?conomies avance ? pas de g?ant.
Le nouvel ?largissement de l'UE ne semble cependant pas affoler outre mesure les milieux patronaux helv?tiques. Ils y voient en effet une opportunit? de se profiler sur de nouveaux march?s.
L'?largissement comme aiguillon
?L'?largissement de l'Union europ?enne constitue en fait une meilleure incitation ? d?velopper le commerce et positionner nos entreprises sur des march?s d'avenir pour nos projets?, rel?ve Catherine Lance, charg?e de projet pour economiesuisse.
Des opportunit?s qui existent pourtant depuis la chute du mur de Berlin. Mais la nature sauvage de l'?conomie, qui caract?risait ces pays jusque dans un pass? r?cent, comportait beaucoup de risques pour qui osait s'y aventurer.
D?faut de paiement, non-respect des d?lais de livraison, disparition des marchandises, impossibilit? d'actionner les m?canismes juridiques pour faire respecter ses droits... Tout un floril?ge de m?saventures v?cues par nombre d'investisseurs ?trangers.
Mais les temps ont chang?. Et l'adh?sion de ces pays indique que toutes les pratiques commerciales se sont align?es sur celles de l'UE.
Une aubaine pour les soci?t?s suisses?
Pour les entreprises suisses, les avantages d?coulent surtout des simplifications administratives.
?Les dix syst?mes nationaux diff?rents qui existent actuellement seront dor?navant semblables ? ceux des autres membres de l'Union. Ce qui facilite grandement la t?che des entreprises qui voudront se d?velopper dans ces nouveaux pays?, poursuit Catherine Lance.
Au-del? de ces simplifications, les relations ?conomiques et commerciales entre la Suisse et les nouveaux adh?rents seront r?gl?es par l'accord de libre-?change conclu en 1972 avec l'UE et les sept accords bilat?raux (bilat?rales I). De quoi donner certains gages de s?curit? aux investisseurs.
?En faisant leur entr?e dans l'Union europ?enne, ces pays montrent aux autres qu'ils appliqueront le m?me droit de la m?me fa?on que dans les autres pays de l'Union, souligne Ren? Schwok, ce qui devrait rendre les investissements plus rentables.?
Professeur ? l'Institut d'?tudes europ?ennes ? Gen?ve, il estime en outre que les exportations suisses seront les principales b?n?ficiaires de l'?largissement. ?Depuis plusieurs ann?es, la croissance ?conomique des nouveaux adh?rents est plus importante que celles des membres de l'Union.?
Un potentiel ? d?velopper
Selon une ?tude du Credit Suisse Group de 2003 - qui mesure l'impact de l'?largissement sur la Suisse - 2,5% du commerce ext?rieur helv?tique se fait avec les nouveaux entrants.
La Pologne, la Hongrie et la R?publique tch?que, ensemble, ne recueillent que 1% des investissements directs de la Suisse ? l'?tranger. Au vu de ces chiffres, le potentiel existe mais la Suisse devra compter avec une s?v?re concurrence ?manant des autres membres de l'Union.
La banque identifie principalement trois secteurs susceptibles de conna?tre une croissance substantielle, ? savoir les produits chimiques, les machines et l'?lectronique. Des secteurs auxquels Ren? Schwok rajoute le secteur financier.
?Banque, assurance, r?assurance, n?goce sont des secteurs dans lesquels le savoir-faire suisse peut se distinguer?, explique le professeur genevois.
Pas de boom attendu
L'?largissement de l'UE ne provoquera donc pas une v?ritable explosion des exportations suisses. Certains secteurs en profiteront mais de fa?on relativement marginale.
Quant ? la croissance ?conomique nationale, son salut viendra avant tout de la r?forme de son march? int?rieur: lutte contre les cartels, am?lioration de la transparence et facilitation de la cr?ation d'entreprises.
Autant de domaines mis ? mal chez les membres de l'UE et contre lesquels le gouvernement suisse semble s'?puiser depuis trop longtemps. Mais sans r?sultats significatifs.
swissinfo, Jean-Didier Revoin

Clarke Is Right
Below the grandstanding is some solid expertise.

It has been widely remarked by now that Richard Clarke was the most aggressive counterterrorism official in the Clinton administration, privately frustrated by his inability to get the Clinton team to take up his most important ideas. The fact that Clarke is quite sound on terrorism issues -- at least those not touching on the Iraq war -- has now been obscured by his star turn as an anti-Bush partisan. But if you focus on what Clarke said in his testimony before the 9/11 commission when he wasn't beating up on Condi Rice et al, you hear a quite reasonable analysis of the U.S. response to terrorism.

First, Clarke agrees with the assessment of the Bush team that his proposals for action in Afghanistan -- aiding the Northern Alliance, flying the Predator, etc. -- would not have prevented 9/11. Asked of his proposals at the commission hearing, "assuming that [they] had all been adopted, say, on January 26, year 2001, is there the remotest chance that it would have prevented 9/11?" Clarke's answer: "No."

Clarke agrees with the argument -- made repeatedly by conservatives over the years -- that the CIA had been beaten into a defensive crouch by its critics. As Clarke explained to the 9/11 commission, "our HUMINT program, our spy capability, had been eviscerated in the mid-1980s and early-1990s, and there was no such capability either to know that al-Qaeda existed, let alone to destroy it. And there's something else that I think we have to understand about the CIA's covert action capabilities. For many years they were roundly criticized by the Congress and the media for various covert actions that they carried out at the request of people like me in the White House -- not me, but people like me. And many CIA senor managers were dragged up into this room and others and berated for failed covert action activities. And they became great political footballs."

Clarke seems to agree with a point often made by Clinton critics: that it was foolish in the 1990s to make the FBI the lead agency in the fight against terrorism since, as an after-the-fact domestic law enforcement agency, it was manifestly not up to the task. He explained to the commission, "the fact that we didn't have intelligence that we could point to that said [an attack] would take place in the United States wasn't significant in my view because, frankly, sir -- I know how this is going to sound, but I have to say it -- I didn't think the FBI would know whether or not there was anything going on in the United States by al-Qaeda." A commissioner asked, "Well, the FBI was the principal agency upon which you had to rely -- is that not the case?" Clarke replied, pregnantly, "It is."

Clarke emphasizes the need for preemption. He explained, "One of the things I would hope comes out of your commission report is a change -- a recommendation for a change in the attitude of government about threats; that we be able to act on threats that we foresee, even if acting requires boldness and requires money and requires changing the way we do business, that we act on threats in the future before they happen. The problem is that when you make that recommendation before they happen, when you recommend an air defense system for Washington before there's been a 9/11, people tend to think you're nuts."

Clarke apparently sees the need for more domestic surveillance in the U.S., advocating doing the Patriot Act one better and creating a domestic intelligence agency. Just imagine the howls from the ACLU. Clarke acknowledged this, but said it was worth it, "I am very fearful that such an agency would have potential to infringe on our civil liberties, and therefore I think we would have to take extraordinary steps to have active oversight of such an agency. And we'd have to explain to the American people in a very compelling way why they needed a domestic intelligence service, because I think most Americans would be fearful of a secret police in the United States. But frankly, the FBI culture, the FBI organization, the FBI personnel are not the best we could do in this country for a domestic intelligence service."

Clarke apparently agrees that law enforcement is an inappropriate paradigm for fighting. He noted the problem with accepting the rules of evidence that apply to criminal cases when it comes to terrorism. He was, for instance, frustrated when the Clinton administration called in the FBI to confirm Iraqi involvement in the attempted assassination of the first President Bush in early 1993, creating an unnecessary delay. He explained, "And that took from February of '93 through the end of May. And it was done in a way that was reminiscent of a criminal process. At least the FBI case was. The CIA case was an intelligence case and had different sources of information, different standards for what was admissible, and a more lenient standard for making a determination. But I think beginning then, I was frustrated by that kind of evidentiary process."

Clarke defends the idea of acting even when the intelligence is uncertain, especially when WMDs are potentially involved. He defended the Clinton administration's controversial 1998 attack on a Sudanese pharmaceutical plant, which many observers think was based on flimsy intelligence at best. Clarke said, "To this day, there are a lot of people who believe that it was not related to a terrorist group, not related to chemical weapons. They're wrong, by the way. But the president [Clinton] had decided in PDD-39 that there should be a low threshold of evidence when it comes to the possibility of terrorists getting their access -- getting their hands on chemical weapons."

-- Rich Lowry is author of Legacy: Paying the Price for the Clinton Years.

http://www.nationalreview.com/lowry/lowry200403290950.asp
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Loose Canons
Mr. Clarke and Mullah Brezhnev
By Jed Babbin
Published 3/29/2004 12:06:21 AM


First we had It Takes a Village. Then there was Living History. Now we have Against All Enemies. Like the first, it was not written by Hillary Clinton and, like the second, it is revisionist history at its worst.

Mr. Clarke -- former White House terrorism "czar" during the era of al-Qaeda's first round of attacks on America -- is doing his best to sink President Bush. If you listened to Clarke's testimony to the 9-11 Commission this week, you would have heard that Mr. Bush came into office and -- with the Wolfowitz snarling at the White House door -- ignored al-Qaeda and everything the smartest people (meaning Clarke) were saying. According to Clarke, by deposing Saddam Mr. Bush only made the world a more dangerous place. Clarke wants us to believe that if only Mr. Bush had chosen him instead of Condi Rice for National Security Advisor, if only Mr. Bush had done what Clarke had said instantly, and every time, maybe -- just maybe -- we would have been spared the 9-11 attacks. Nonsense.

Clarke was in the White House for eight years, all through the Clinton administration's failures and now wants the world to ignore that track record. His major accomplishment was a completely useless strategy on cyber-terrorism.

All you need to know about Clarke is that the release of his new Bush-bashing book Against All Enemies happened the day before his melodramatic testimony. I'm sure it was a coincidence that the book release was accelerated by a month -- as Tim Russert noted on Meet the Press -- to appear in bookstores in time for his testimony.

Clarke began by apologizing to the families of 9-11 victims for his failure to stop the attacks. All he lacked was the trembling lower lip. He grandstanded, putting himself in the place of the government of the United States, of which he wants the world to believe he should have been in charge. His arguments are not only partisan but dishonest. He famously briefed reporters in August 2002 about the efforts of the Bush administration to fight terrorism and said, at length, that the Bush administration was working hard to change and improve anti-terrorist actions, including quintupling the covert action budget for the CIA. Now he says that he disagreed with what he said then. On Meet the Press, he said that he had to do that or resign, and chose to spin because -- he implied -- he, Clarke the omniscient, was just too important to the anti-terror effort to leave it in the hands of others. Read the soon-to-be unclassified Clarke testimony of two years ago -- and the already-available 9-11 Commission staff report for the details.

Clarke will sell a lot of books as a result of this publicity exercise. He will be hired by some network as a terrorism "expert" and be in our faces through the election. That alone makes it important to understand what he is saying, and why it is so terribly wrong.

THE MOST IMPORTANT CHARGE Clarke makes -- and the one that is blatantly partisan -- is that by deciding to topple Saddam, Mr. Bush made the world a more dangerous place. He said on Meet the Press that America is more hated now in the Arab world than it was before, and that by removing Saddam, we have made it harder to gain the trust of the Arab world. He also said that the war in Iraq weakened the war against terrorism by angering the Arab world and by taking needed resources away from the war against al-Qaeda. That's his principal position, and it is the most demonstrably wrong one he took, which is saying quite a lot.

If Clarke is to be believed, why would 9-11 have happened? If our diplomacy and foreign aid were successful, why would terrorists have killed thousands of American that day? Had we stayed out of Iraq, and left the job of persuading the Arab nations to help fight terrorism to the diplomats, our Clinton-era posture in the Middle East would have remained unchanged and unsuccessful. The principal development in the Middle East in the Iraq campaign is the demonstration to the despots and religious thugocracies there that we will act decisively to stop their involvement in terrorism. Though most of those nations -- particularly Iran -- still don't believe we will do to them what we did to Saddam, there is a signal of a change in their thinking. Does anyone seriously believe that Muammar Qaddafi would have surrendered his nuclear weapons program if he was unconcerned about being next on Uncle Sam's list?

Clarke still doesn't understand that we cannot give a rat's behind about what the average man on the street in Damascus or Teheran thinks of us if we want to end the terrorism those nations produce. We cannot say it often enough: terrorism doesn't result from poverty, it isn't aimed at us because we don't sing "Kumbaya" in Arabic often enough. Terrorism is driven by ideology and fueled by a poisonous interpretation of religion. It's much more important to recognize that radical Islam -- terrorist Islam -- is being spread by a propaganda line we should well remember.

Those who preach it -- whether it's the Saudi Wahabbism, the Iranian edition, or one of the others -- insist that terrorist Islam will succeed inevitably, and its seizure of power in any nation is irreversible. It is, they say, the will of God. More than thirty years ago, a guy named Leonid Brezhnev said the same thing about communism, and the Clarkes of that era bought it. At least until Lech Walesa and some very brave Poles proved the Brezhnev Doctrine, as it became known, to be utterly false. By overthrowing communism and establishing democracy, Walesa and his people drove a stake through the heart of communism. If there is a central strategy in our war against terror, it must be this: those who propagandize the inevitability and irreversibility of radical Islam must be proven wrong just as the Brezhnevites of the 1970s were, and in the same way.

If we are to succeed in the long-term war against Islamic terror, we must succeed in the same way, and to the same degree that the Poles did. We have so far toppled two regimes. But in neither in Afghanistan nor in Iraq did we topple a radical Islamist regime in an Arab country. The first time we do this, and manage to get the people of that nation to establish basic freedoms, we will have created a new Poland in the Arab world. By doing so, and only by doing so, can we finally defeat the Brezhnevite Islamists and bring the era of global terrorism to an end.


TAS Contributing editor Jed Babbin was a deputy undersecretary of defense in the first Bush administration, and now often appears as a talking warhead on radio and television.

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Those who predicted Islamist terrorism ran against the wind
By Barbara Amiel
(Filed: 29/03/2004)


'I hate terrorists!" "I hate them more!" There's a catfight in Washington at the Senate hearings on 9/11. Richard Clarke, the former terrorism tsar, is apologising to all Americans for not being a step ahead of the World Trade Centre horror. Book sales are soaring for Clarke's dump on President Bush and his inside story of the war on terrorism (including that practised by Washington bureaucrats). CNN is rapturous and appears to have Clarke on a half-hourly loop. White House television correspondents are interviewing those who lost "loved ones" and are at the hearings to learn "what really happened on September 11, 2001".

They won't learn much. Clarke's apology to the families of those killed and his dramatic "I failed you" is probably heartfelt, since he was in four successive administrations and is one of a dozen or two top officials charged with the task of tackling terrorism. But I can't see how any American government or individual, of either party, could have prevented the development of international terrorism. The question is not whether Reagan-Bush-Clinton-Bush actually knew about the murderous intentions of radical Islam or whether they took what they knew seriously, but what the public mood would have let them do about it before 9/11.

Not much, I wager. What administration could, before 9/11, have sent in American boys to fight a regime in Afghanistan because it was implementing the ideas of an old man with a long white beard, sitting crossed-legged in the mountains talking about Satan America? Had I been in Congress before 9/11, knowing everything that was knowable about the Islamists, I still doubt if I would have voted to send troops to the Hindu Kush to topple the Taliban. Eardrums would have exploded all over Capital Hill from outcries of racism and imperialism if there had been serious efforts, pre-9/11, to round up suspected Muslim militants in the United States and tighten security on Muslims entering the country. As it is, the post-9/11 sensitivity to racial profiling makes travel hazardous for white grannies who dislike body-searches.

What is possible in politics depends to a great extent on what is blowing in the wind. There are times when even a Churchill can't trudge against it, no matter how accurate his sense of direction. The notion of terrorism as a lethal threat to America had no force, even after the assassination of the radical Rabbi Kahane (New York, 1990), the first bombing of the World Trade Centre (1993) and the deadly attacks on America embassies, citizens and military abroad - all carried out by Islamists. The American eagle was in ostrich mode.

Some people do try to run against the wind. Steve Emerson worked for CNN until one day, being a nosy reporter, he walked into a meeting where a Hamas leader was speaking about the need to kill Jews and carry out jihad - in Oklahoma City. He left CNN and made domestic terrorism his field of research. By 1994 he had assembled a film, Jihad in America, that no mainstream network would run. The film showed footage of Islamic terror-mongers in cities as varied as Dallas, Detroit, New York and Atlanta, recruiting for both domestic and world-wide jihad. "Jihad means fighting only, fighting with the sword," said Sheikh Abdullah Azzam, speaking at a conference in Brooklyn in 1989. His cousin went further. In Atlanta in 1990, Fayiz Azzam harangued: "Allah's religion - be he praised - must offer skulls, must offer martyrs. Blood must flow. There must be widows, there must be orphans. Hands and limbs must be cut..."

The film was an astonishing piece of work for its time. Looked at now, it is eerie in its prescience. Emerson finally wangled a one-time, limited showing on PBS, on November 21, 1994. In spite of the routine caveats in the documentary, reiterating the distinction between radical Islamists and the religious beliefs of the vast majority of moderate Muslims, only Muslim extremists spoke out about the film, organising letters of protest. The moderate Muslims remained, as ever, so moderate as to be invisible.

Emerson became an encyclopaedia on Islamic terrorism and its adherents in America. His knowledge was no help to his journalism career. "You're radioactive," one Washington Post reporter told him, after having been instructed by his editor never to use any material or research from Emerson. He met the common fate of those who run against the zeitgeist. Until 9/11, he was marginalised in the mainstream press and smeared by much of the Left as a fanatic. Like many single-issue people, he occasionally lacked caution in his work, unwise when working in a minefield, but probably necessary in the first place.

Yigal Carmon, a friend of Emerson's, had his last day at work as counter-terrorist adviser to Israeli prime minister Rabin on February 26, 1993. That morning he went to the Pentagon to brief the Special Operations and Low Intensity Conflict Group on Islamic fundamentalism. Carmon quoted excerpts from radical Islamists he had translated. The nuances of Arabic were particularly significant to him and he explained them carefully. "Islamic fundamentalism," he concluded, "is an imminent threat to America." The Americans listened carefully. Carmon, a rare combination of street-smart and intellectual heft, knew he hadn't a chance in hell of making them understand. Two and a half hours later he was in New York. He arrived just as a mini-van filled with 500 kilogrammes of high explosives went off in the basement of the World Trade Centre.

Out of government, Carmon set up the Middle East Monitoring and Research Institute and continued translating the broadcasts and meetings of the Arab world. The chilling remarks of Arab leaders appeared in stark contrast to their anodyne sentiments in English.

Still, people rarely welcome Cassandras. As Tolstoy pointed out, Napoleon mesmerised his followers, but if his commands had run against the spirit of the times, even Napoleon wouldn't have been obeyed. Running against the wind, every hour each day, takes an obsessive personality which plays out well in terms of Carmon's unfailing accuracy in his translations and information. But Israelis are more instinctively Peace Now than Fight Now and didn't enjoy Carmon's truths any more than Americans wanted Emerson's film. Not wanting to believe uncomfortable things until it is too late is a universal tendency.

Which is perhaps why Clarke's accusations are so happily greeted. Not just in terms of partisanship but for their simplicity. If 9/11 can be reduced to being Washington's fault, the irrational hate and destruction becomes almost manageable. Change administrations, and the Islamists will go away. Such a seductive, comforting thought echoes in most political battles and elections today. The wind from the east blows gritty grains of fear and delusion into the West's eyes. One wonders apprehensively, which way the zeitgeist of this new millennium will turn. Worse, one fears the calamity that will really turn it hasn't happened yet.


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The (Out)Source of All Confusion
Fear + slow jobs growth + an election year = bad policy.

On Friday, April 2, the Bureau of Labor Statistics will release the employment report for March. Most economists are expecting a solid increase in jobs. But they have expected significant increases for months, only to be proven wrong when the official data were released. Another weak jobs number undoubtedly will raise pressure on Congress and the Bush administration to take action on the issue of outsourcing, which many unemployed workers, especially in information technology (IT), blame for their misfortune.

One reason why the outsourcing issue has gotten so much attention is that it plays to deeply held fears about foreigners, fears that have been part of the American political landscape since the Know-Nothing movement of the 1840s. As Holman Jenkins of the Wall Street Journal recently put it, "The current griping over 'outsourcing' seems almost a species of psychological dysfunction, one that blames foreigners over any explanation that doesn't."

The Bush administration has been very slow to recognize the political threat from the outsourcing issue. Indeed, it played right into it with an ill-timed proposal to allow illegal Mexican workers in the U.S. to have "guest worker" status allowing them to remain here legally. While I think this is a defensible policy, it suffers from appearing to be motivated more by politics than a serious concern for illegal immigration. It looks as if its sole purpose is to win Hispanic votes.

President Bush also shot himself in the foot when he promised to create a high-level post to promote manufacturing, the area where the greatest job losses have occurred. It turned out that this "manufacturing czar" position involved nothing more than renaming an existing assistant-secretary position at the Commerce Department. And the vetting process for the position was bungled: Tony Raimondo, who has outsourced jobs to China from his own business, was named to the post. The appointment was quickly rescinded when John Kerry's campaign brought this fact to the media's attention.

The Bush administration has done little to address the outsourcing issue other than muzzle Greg Mankiw, chairman of the Council of Economic Advisers, for daring to suggest that it is an inevitable process. But others are starting to pick up the slack. A new study by the American Electronics Association offers a balanced perspective.

While acknowledging that outsourcing has hurt some Americans, the AEA study places most of the blame for job loss on slow growth and rising productivity. It also notes that other countries have caught up with the U.S. in terms of education and technology, making them stronger competitors for IT business. They are competing not just on the basis of wages, but quality as well.

The AEA study says that today's concern for outsourcing echoes warnings in the 1980s that Japan was going to take over the world. A recent Forbes article points to parallels with the automation scare of the 1960s. As a presidential candidate in 1960, John F. Kennedy warned that automation "carries the dark menace of industrial dislocation, increased unemployment and deepens poverty."

Robots, Japan, NAFTA, and other threats to our prosperity have never sustained themselves, and the doom-and-gloom crowd has always slunk away without ever explaining why they were so wrong. Ross Perot, for example, has never told us why NAFTA didn't cause the "giant sucking sound of jobs being pulled out of this country" that he predicted in 1992.

Writing in the May/June issue of Foreign Affairs, political scientist Daniel Drezner explains that fears of permanent job loss from trade and technology always arise when unemployment is high for cyclical reasons. But eventually the slowdowns end and employment strengthens again. "Once the economy improves, the political hysteria over outsourcing will also disappear," Drezner writes.

This is exactly what President Kennedy's Council of Economic Advisers told him would happen when fears that automation would cause all jobs to disappear were at a peak forty years ago. CEA chairman Walter Heller explained that the best thing he could do was cut taxes to stimulate investment and consumption, which would raise economic growth and employment regardless of how much automation was going on. When this proved to be correct, the automation hysteria faded away.

Thus, most economists believe that policies aimed specifically at outsourcing are misdirected and potentially counterproductive. For example, a new study by the National Foundation for American Policy argues that anti-outsourcing legislation recently passed by the Senate, by inviting foreign retaliation, reducing competition, and raising costs to governments, will likely destroy more jobs than it saves. The amendment, sponsored by Sen. Chris Dodd (D., Conn.), would prohibit federal contractors or states from contracting-out with foreign businesses.

Outsourcing is an issue only because employment growth is slow. But it is not the cause. Hence, policies directed at restricting outsourcing are unlikely to create any jobs and actually run the risk of making the situation worse.

-- Bruce Bartlett is senior fellow for the National Center for Policy Analysis. Write to him here.

http://www.nationalreview.com/nrof_bartlett/bartlett200403290816.asp

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Kerry in fine shape (except for his ailments)

By Jim VandeHei
The Washington Post
ELISE AMENDOLA / AP
Sen. John Kerry, lower right, snowboards ahead of his instructor, Jim Grossman, at Sun Valley, Idaho, last week.

ST. LOUIS -- Sen. John Kerry, by most measures an unusually fit 60-year-old, has spent key parts of his presidential campaign battling ailments ranging from prostate cancer to a stubborn cough and cold.
Kerry frequently complains to reporters of a stiff right shoulder or allergies that leave his voice raspy and throat sore. For much of this year, Kerry has curtailed speaking and sipped lemon tea to nurse a voice strained by hacking and yakking. In mid-February, he described the ailment to reporters as a "chest thing" and griped about its persistence.
On Wednesday, Kerry will undergo elective shoulder surgery for a slight tear, marking the second time the Democratic candidate has missed time on the hustings for an operation. Shortly after announcing his campaign in 2003, Kerry had his prostate removed to cure early-stage cancer.
In some instances, the aches and illness have come at inopportune times, slowing his campaign at critical junctures. But mostly, they have simply frustrated an athletic candidate who plays hockey and bicycles, snowboards and windsurfs. His biggest complaint: Aches and pains are precluding more frequent workouts.
"Kerry is the most athletic, most vigorous guy in the race," said David Wade, his spokesman. "He bounced back from surgery last year way faster than most, he windsurfs, mountain climbs, skis and snowboards; in great shape -- not exactly the kind of guy whose health is a question mark."
Shortly after announcing Wednesday's surgery, a local TV reporter's first question to Kerry was whether the candidate had a "Cheney problem," a reference to health questions that have dogged the vice president as a result of his heart condition.
Kerry brushed off the inquiry with a simple "no," and declared "I'm healthy." Indeed, based on Kerry's partial medical records, which were released last year, the Massachusetts senator appears in fine and fit condition.
Yesterday morning at Chris's Pancakes and Dining, three different patrons commented about how Kerry looks better in person than he does on television. Yet one man commented, "You need a little flesh on." Kerry agreed and said, "I know, I'm working on it."
Today, Kerry's general physician, Dr. Gerald Doyle, will release an updated summary of the candidate's health record. And Dr. Bertram Zarins, from Massachusetts General, will brief reporters on Kerry's upcoming surgery.
Because Americans generally have chosen presidents whom they view as strong -- from Theodore Roosevelt to John F. Kennedy to Ronald Reagan to George W. Bush, the candidates routinely portray themselves as vibrant and virile.
In the 1992 campaign, Paul Tsongas, who suffered from lymphoma, showed himself swimming in a television commercial to prove his good health. In 1996, Bob Dole, who had been treated for prostate cancer and had minimal use of his right arm from a World War II injury, frequently battled to prove himself fit to unseat a much-younger Bill Clinton.
And Bill Bradley did not disclose his three years of heart problems until he was forced to do so during the last presidential campaign.
In earlier years, politicians and presidents hid their ailments, underscoring how essential the image of strength is to leadership and how open, by historical standards, Kerry and other modern politicians are today about their health.
Grover Cleveland underwent two operations for cancer of the jaw in 1889, but told America he had a tooth removed. Most famously, Franklin Roosevelt hid his disability from Americans in an era when the president's every move was not captured on camera. Now, candidates publicize hospital visits and quickly release medical records to the public.
This year's election features two men who revel in their athleticism. Bush runs a subseven-minute mile and bench presses more than 200 pounds. For relaxation, the president chops wood and clears brush at his ranch.
Bush did have four noncancerous skin lesions removed in December 2001 and recently stopped running as result of a knee injury.
Not to be outdone, Kerry has played hockey with the Boston Bruins and, last week, was photographed snowboarding and hiking up snow-covered mountains. At airports, he often tosses a football or baseball with a top aide before the cameras. He sometimes brings a bike along for working out.
But, several aides said, Kerry's bout with prostate cancer was to blame for the candidate's slow and uneven start to the presidential campaign. After surgery in February 2003, Kerry missed several weeks of campaigning and was sore and tired for many more.
Kerry lied to the Boston Globe when asked if he was sick. He later explained that he wanted to tell his family first. At a news conference to announce his surgery, Kerry's staff distributed a quote from the candidate's doctor describing him as "strong as an ox."
This week's surgery comes at the beginning of a fast and furious general-election campaign -- and only days after Kerry vacationed in Idaho. Some Democrats complained last week that Kerry's absence from the trail was ill-advised.
Wade said Kerry wants to get it over early so it doesn't bother him later in the campaign.


Copyright ? 2004 The Seattle Times Company

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Nuclear Security Decisions Are Shrouded in Secrecy
Agency Withholds Unclassified Information
By R. Jeffrey Smith
Washington Post Staff Writer
Monday, March 29, 2004; Page A21
Nineteen men in four squads. That's the size of the terrorist threat that some nuclear critics say armed guards at U.S. nuclear power plants and weapons facilities should be able to rebuff.
The figure is pegged to the Sept. 11, 2001, al Qaeda assaults on the World Trade Center and Pentagon. The Bush administration has updated a much weaker 1980s-era standard, but government and congressional officials say the presumed attack still involves considerably fewer than 19 terrorists -- and that means requiring a smaller guard force than critics say is necessary.
A legal dispute related to this standard has now arisen, but -- as in other recent discussions of the administration's response to terrorism threats -- the squabbling is occurring almost entirely outside public view. The immediate issue is an unclassified request by a nuclear power plant operator for an exemption from certain parts of the new security requirements.
The Nuclear Regulatory Commission has deemed the operator's request sensitive, and declared that its release would bring criminal prosecution. Critics who allege the standards are already too lax have filed a challenge to the exemption request, which the commission has also declared is too sensitive to be released.
It is but one example of the manner in which post-Sept. 11 anti-terrorism controls -- even those concerning unclassified information -- have altered the landscape of public debate about security matters. Civil defense arrangements that were once the subject of mostly open rulemaking or debate are now often decided under a cloak of secrecy covering all but industry and government participants.
The result has been to complicate efforts to hold officials accountable for their decisions, especially in the counterterrorism field, say advocates of open policymaking. "There has been a proliferation of new controls on unclassified information," said Steven Aftergood, director of the Government Secrecy Project at the Federation of American Scientists. "This is where the public is at a disadvantage," because few mechanisms are available to challenge these controls or to ensure that public representatives have access comparable to what industry routinely gains.
In the nuclear site security case, Duke Power asked the NRC to waive certain security precautions, normally required wherever more than a bomb's worth of special nuclear materials are present. The request involves the planned shipment next spring of French-made nuclear fuel rods containing plutonium to its plants in North and South Carolina, where they will be stored and then burned in reactors.
The challenge has been filed by the Blue Ridge Environmental Defense League, with technical advice from the Union of Concerned Scientists. Although UCS scientist Edwin Lyman, who has a security clearance, read the exemption request after signing a non-disclosure statement, neither he nor the environmental group has been able to learn exactly what the NRC's security standards are.
Lyman says he is willing to keep whatever he learns confidential, but that without knowing more, he cannot fully assess the proposal or effectively express concerns about the underlying standard. But the NRC, ruling in a Feb. 18 decision, said that although Duke Power has a "need to know," the environmental group does not.
Rep. Edward J. Markey (D-Mass.), a longtime critic of nuclear power, has complained that the NRC barred the groups from learning the same information it shared not only with Duke Power but also with the Nuclear Energy Institute, an industry group that has lobbied against stiffer guard force requirements.
In a March 18 letter to the NRC, institute President Joe Colvin said the group was meeting "almost daily" with the commission staff to discuss the security standard, now undergoing a final government review. A senior NRC official, speaking on condition that he not be named, asserted that "the public does not have a need to know [the postulated terrorist threat] and doesn't, for the most part, have security clearances. . . . There is no way you can bring the public into that discussion." He said the critics "are unlikely to have anything but disdain for anything that we do, so I don't know what we can gain from that." Duke Power maintains that its power plants are well protected, and that its security exemption request is reasonable, given the difficulty of diverting plutonium contained in the bulky fuel rods. Nuclear Energy Institute Vice President Steve Floyd is skeptical of the critics' demands for even controlled access to threat information. "You have to realize what their agenda is -- to drive costs up to the point where nuclear [power] is no longer feasible," Floyd said.
But Aftergood of the Government Secrecy Project said that "it is the public that has to deal with the consequences" of a nuclear site security breach, and so it is entitled to participate more fully in the debate. "Fundamentally, the NRC policy views members of the public as a threat," Aftergood said.
The NRC is not alone in imposing its own, new controls on unclassified information. The Department of Homeland Security has promised not to disclose security data furnished by companies on their "critical infrastructure or protected systems," a potentially broad category of data.
The Federal Energy Regulatory Commission has adopted a slightly different policy to shield what it calls critical "energy infrastructure" data: It will release the data to recipients who sign a non-disclosure pledge. These and other government offices are essentially taking their cues from a White House directive in March 2002, which encouraged government officials to treat all unclassified security-related information as sensitive data not subject to public release.
But the NRC policy is one of the most expansive. The commission recently threatened staff members at a watchdog group, the Project on Government Oversight (POGO), with criminal prosecution because they published their own detailed critique of security at Entergy Nuclear's two reactors at Indian Point in New York.
"The Commission is concerned that a public discussion of some of those issues would not be in the best interests of the United States," NRC Secretary Annette L. Vietti-Cook wrote to the group in the fall, noting problems related to discussion in the critique of the number of attackers a plant might have to fend off and particular security weaknesses.
Roy P. Zimmerman, director of the NRC's office of nuclear security, subsequently wrote that POGO's critique -- which the group says was based solely on interviews it conducted with people who participated in or observed Indian Point security drills -- had been deemed "safeguards information" protected by federal law. Such laws, he noted, apply to "any person . . . who produces, receives, or acquires" such data, no matter how they got it.
In an apparent Catch-22, Zimmerman said the commission could not, however, specify what information it wanted deleted from the critique. That prompted POGO's lawyer, David C. Vladeck, to allege that the NRC was trying to "silence" the group. Eventually, the NRC, which denied the accusation, agreed to describe the offending information in general terms, and POGO released a new critique containing passages it had rephrased.
But, in an illustration of the challenges the government faces in trying to quash public discussion of sensitive but unclassified information, the original POGO critique remains posted on an independent Web site devoted to disseminating whatever officials seek to censor (www.thememoryhole.org).
Since Sept. 11, 2001, many bureaucrats have been using heightened security concerns to "hide their inadequacies," said Danielle Brian, POGO's executive director. "It has gone far, far beyond what is reasonable."
Aftergood similarly warns that the government has "cast too broad a net and . . . failed to provide an internal self-check." The sole office for policing the government's disclosure of security-related information was created in an era when data were either classified or subject to public release, and has no jurisdiction over the burgeoning realm of sensitive but unclassified information, he said.
J. William Leonard, who heads that office -- the Information Security Oversight Office, an arm of the National Archives -- confirms Aftergood's account. Although making no comment on specific disputes, he said that in many instances, "sensitive but unclassified" is a label without meaning that is misused by officials who lack the proper "training, background or understanding" to decide what to withhold. Leonard said that strictly applying a "need to know" test can sometimes exclude important players whose valuable insight is not foreseen.
Leonard gave a speech last year that he says is still relevant, in which he noted that the government needs to create "a seamless process" for sharing or withholding information, yet "we are . . . quite possibly adding new seams every day" by not enforcing a reasonable, government-wide policy.



? 2004 The Washington Post Company
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Full text
List of nuclear weapon accidents released by the MoD: part 1
List of nuclear weapon accidents released by the MoD: part 2
List of nuclear weapon accidents released by the MoD: part 3
List of nuclear weapon accidents released by the MoD: part 4
See the ombudsman's report (pdf)
http://politics.guardian.co.uk/foi/story/0,9061,1061755,00.html

MoD catalogues its nuclear blunders

Ombudsman forces disclosure of list of mishaps from 1960 to 1991 in which weapons were dropped or their carriers had road accidents
Rob Evans
Monday October 13, 2003
The Guardian
British nuclear weapons have been repeatedly dropped, struck by other weapons, and on one occasion carried on a truck that slid down a hill and toppled over, the Ministry of Defence has admitted after decades of secrecy.
The department has been forced to publish a list of 20 accidents and mishaps with nuclear weapons between 1960 and 1991, following a critical verdict from the parliamentary ombudsman.
No incidents have been reported since then. The list shows that trucks carrying nuclear weapons on British roads overturned on two occasions, and cars crashed into two convoys.
Nuclear weapons were dropped or fell on four occasions, and other munitions struck the atomic weapons four times. Four of the incidents happened abroad, in Germany, Malta and near Hong Kong.
Sir Kevin Tebbit, the MoD's permanent secretary, has had to disclose the list following a six-year "open government" campaign by the Guardian. The MoD initially blocked the request submitted in 1997, prompting the newspaper to lodge a complaint with the ombudsman, Ann Abraham.
Finding the MoD guilty of maladministration, the ombudsman dismissed its objections and ruled that disclosing the information would not endanger the security of the nation. She also criticised the ministry for the "inordinate delay" in releasing the list.
One accident hushed up by the MoD was in 1960 in Lincolnshire. According to the MoD, "an RAF nuclear weapon load carrier, forming part of a convoy, experienced a brake failure on an incline and overturned". The MoD gives no other details, but insists "there was no damage to any nuclear weapon".
Three years later, on the border of Lincolnshire and South Yorkshire, there was another "brake failure on a nuclear weapon load carrier". The MoD does not give further details, but again says no weapons were damaged. Another brake failure happened in June 1985 near Glasgow.
Since Britain started making nuclear weapons in the early 1950s, convoys have regularly transported missiles hundreds of miles on motorways and other roads from bases to the atomic weapons factories at Aldermaston and Burghfield in Berkshire.
These convoys continue today, as the warheads have a very short shelf-life and constantly have to be refurbished and rebuilt to keep them safe.
Frank Barnaby, a nuclear physicist who worked at Aldermaston in the 1950s, said: "To have three brake failures frankly surprises me. A well-maintained convoy should not have brake failures." He said that the designs of Britain's early nuclear weapons, from the 1950s and 1960s, were unsafe and primitive, and that the MoD was "lucky" to have got away with not having more serious accidents, including nuclear explosions.
He added: "The fact is that the early bombs were not safe until the safety features in the more modern weapons were installed. They were not safe [enough] to be subjected to severe shock."
The MoD insists the accidents never caused radiation leaks. "There has never been an occurrence involving a British nuclear weapon which represented a threat to public safety or to the safety of service personnel."
Shaun Gregory, a Bradford University academic who has studied the dangers of nuclear accidents, said that the MoD's descriptions of the incidents had the "appearance of being a sanitised version" of events and did not ring true. "Any type of complex system is bound to run into trouble," he said.
He believed that there was little chance of a nuclear detonation, but an accident could have caused a fire or explosion which could have showered radioactive debris around the immediate area. He pointed out that the US had released the documents and reports of accidents with their nuclear weapons under the country's freedom of information act. These reports had shown how military staff had panicked during those events.
There have been at least two accidents with US nuclear weapons on British soil, both at Lakenheath in Suffolk. In 1956, a bomber careered out of control and ploughed into a bomb dump housing three nuclear weapons, tearing it apart. The bomber exploded and threw burning fuel over all three nuclear weapons. One official US cable reported that it was a "miracle" that one bomb with "exposed detonators" did not explode.
In 1961, a warplane loaded with a nuclear bomb caught fire, leaving the weapon "scorched and blistered".
For decades, the MoD refused to disclose any information on nuclear accidents, as it did not want to confirm or deny presence of weapons at any particular time or place. But the ombudsman decided that national security could not be compromised, as the weapons in the accidents had been taken out of service.
She wrote : "It is therefore difficult to envisage the release of information about events that happened some time ago to weapons that no longer exist could cause harm if made more widely available."
Mr Barnaby said: "The intense secrecy was an absurdity. It does not affect national security. It is just an embarrassment which would make people more hostile to nuclear weapons."
The MoD's list is based on incomplete records. From military sources, the Guardian has learnt of three other mishaps. In 1988, a WE177 nuclear bomb was dented after it was dropped at RAF Marham, Norfolk. Another WE177 fell off a workstand in 1976 at RAF Honington, Suffolk, while being loaded on to a plane. In 1967, a Vulcan bomber carrying a nuclear weapon was struck by lightning at RAF Waddington, Lincolnshire.
Only seconds away from disaster
Wiltshire 1987 Truck with two 950lb WE177 n-weapons skidded and rolled on to side; second truck also slid off road. According to MoD, minor damage only. Armed police sealed off site from protestors
Malta 1974 Two torpedoes fell on to WE177 on board HMS Tiger. 'Superficial scratching' said MoD, but torpedo blast could have detonated explosive in n-weapon, scattering radioactivity
Lincolnshire 1960 N-weapon truck had 'brake failure and overturned'; similar failure in 1963
Germany 1974 and 1984 WE177 dropped while loading on plane at RAF Laarbruch in 1974; another WE177 dropped at RAF Bruggen in 1984 - reportedly caused base to shut for period
At sea 1974 and 1981 Parts of Polaris casing 'compressed' onto missiles on board subs. Design modified
Firth of Clyde 1973- 87 Coulport arms depot: in 1973, Land Rover reversed into RAF convoy of Polaris warheads, 'minor damage' to truck; in 1977 Polaris missile dropped while lifted; MoD said it fell 'a few inches'; in 1987, missile hit trailer because of 'human error onpart of crane driver' and defective crane, according to MoD. After inquiry, 'substantial changes in management responsibilities, training and command and control'. On M8 near Glasgow in 1983, Polaris warheads convoy collided with car; in 1985 there was 'brake failure on carrier', according to MoD, and it bumped into one in front
M25 1991 RAF convoy had 'mechanical failure'; motorway was closed several hours while, it is thought, n-bomb was shifted from one truck to another
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'Takfiris a new breed of 'Jihadis' emerging'
PTI[ MONDAY, MARCH 29, 2004 10:42:40 PM ]
WASHINGTON: A new breed of 'Jihadis', schooled in the North African Islamic doctrine known as Takfir wal Hijra, is posing acute threat to Europe, a media report said.
The Takfiris, suspected to have carried out the March 17 Madrid blasts killing 190 and injuring over 1900, are unfettered by many of the religious and ideological constraints that defined Islamic terrorism in the past, The Wall Street Journal reported.
These warriors, trained by Afghan veterans of al-Qaeda, think, recruit and operate differently from traditional Islamic networks.
For Europe, that makes the threat particularly acute. Unlike previous generations of radical Islamists, who put on long beards with orthodox postures, the newer generation of holy warrior blends in better. They are encouraged to lead a double life for the ultimate pursuit of Jihad, the report said.
"Outwardly, they pretend to lead a modern lifestyle," terrorism expert Magnus Ranstorp was quoted as saying in the report. "But deep inside they adhere to a pure medieval strain of Islam," he said.
Many Takfiris shave their beards and avoid mosques for security reasons. "Recruits conceal their true beliefs until the time is right," says Ranstorp.
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Cops missing out on IP benefits

By Ben Charny
Staff Writer, CNET News.com
http://news.com.com/2100-7352-5181099.html
Story last modified March 29, 2004, 8:57 AM PST
SANTA CLARA, Calif.--With the growing use of Internet Protocol inside telephone networks, 911 operators could have life-saving information at their fingertips.
But those gathered here for the Spring 2004 Voice on the Net Conference & Expo warn that the nation's 2,300 emergency call centers are missing out on a technological breakthrough touted as on par with the invention of police car radios.
By upgrading to IP equipment, 911 calls could be accompanied by much more information, such as callers' medical records or maps of the inside of their homes. But tight state budgets and technological inertia will delay, likely for years, upgrades that 911 call centers need to make to the century-old radio technology they now use, industry executives and officials say.
It's a "case where the communications link is outstripping the ability of the network and the funding ability of the local agencies," said Robert Pepper, the Federal Communications Commission's chief of policy development. "It turns out to be a huge problem."
The concerns only add to the problems that the broadband phone industry has created for law enforcement. More immediate problems are meeting soon-to-be drafted mandates to wiretap Internet-based calls or to provide the location of someone dialing 911 via a broadband connection.
A representative of the Association of Public-Safety Communications Officials International had no immediate comment.
Broadband phone service, otherwise known as voice over Internet Protocol (VoIP), is the latest telephone technology to outpace the nation's law enforcers. The most recent was cell phones.
Police in only a small number of cities are now able to determine the location of someone calling 911 via a cell phone, even though the U.S. cell phone industry made the necessary technology available in 100 markets last year. In May, when carriers will have to offer so-called enhanced 911 everywhere, at least one-third of all rural police agencies won't be able to use the information, according to sources familiar with the situation.
VoIP is a technology for making phones calls using the most popular method for sending data from one computer to another. Internet telephony services typically promise consumers a smaller phone bill, largely because VoIP providers operate free of regulation.
Carriers are already embracing VoIP as a way to cut traffic costs on international and long-distance calls. VoIP eventually is expected to replace the public switched telephone network as big phone companies convert to IP-based fiber-optic networks.

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Police 'let Madrid bomb suspects go'
By Isambard Wilkinson in Madrid
(Filed: 29/03/2004)
Spanish police were agonisingly close to foiling the Madrid train bombings, it was disclosed yesterday.
A car carrying the explosives used in the March 11 massacre was stopped by police but its Arab driver was fined only for a minor traffic offence, it was reported.
The boot of the Volkswagen was packed with 220 lb of industrial dynamite being transported to Madrid after it had been stolen from a coal mine at Aviles in northern Spain during the last week of February, the El Pais newspaper said.
The car, which had been stolen, was stopped by two Civil Guard patrolmen near Benavente, in the province of Leon, north of Madrid.
But their suspicions were not aroused when they checked the car's registration as the owner had not yet reported it missing. They failed to recognise that the driver was not the registered owner.
The driver was fined for a minor infringement and allowed to drive on. Three of the four bombing suspects are thought to have been in the car.
The car has now been found and traces of the dynamite used to bomb four packed commuter trains during the morning rush hour, killing 190 people and injuring more than 1,500 were found by forensic scientists in the boot.
The explosives were packed into haversacks and hold-alls at a house in the countryside 20 miles from Madrid the day before the bombing.
Police, who found the terrorists' safe house by tracing calls they had made on mobile phones, were yesterday still searching the building near the small, picturesque town of Chinchon. Officers claim that they found the fingerprints of two of the 12 people - nine Moroccans, two Indians and a Spaniard - facing provisional murder and terrorism-related charges following the attacks.
The fingerprints allegedly were those of Jalam Zougam, the owner of a mobile phone shop. and Abderrahim Zbakh, a chemistry graduate.
Zougam is said by investigators to have been one of the ringleaders of the Moroccan terrorist cell blamed for the attack and Zbakh, dubbed "Chemical Ali" by investigators, is believed to have made the luggage bombs.
Police found detonators and explosives similar to those used in the attacks at the house, Spanish newspapers quoted sources close to the investigation as saying.
A total of 20 suspects have been arrested and six are due in court today.


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NATO chief says "some nuts to crack" in Russia relations
WASHINGTON : NATO's secretary general there were still "nuts to crack" in relations with Russia as the alliance expands eastward with the addition of seven new members, including three former Soviet Baltic republics.
NATO Secretary General Jaap de Hoop Scheffer said he did not believe the expansion would cause new tension with Russia but acknowledged there were problems over the Conventional Forces in Europe (CFE) treat which limits troop numbers in eastern Europe.
"There are some nuts to crack, of course," he said.
"When I say we have some nuts to crack it's, of course, Russian worries about the effectiveness of the CFE treaty. NATO worries about the Russians still having their forces in Moldova-Transdniestra and Georgia," he said.
Nevertheless, he said, "NATO needs a partnership with the Russians. It's in NATO's interest and at the same time it is in Russia's interest that we have a strong partnership."
De Hoop Scheffer said it was good sign that Russian Foreign Minister Sergei Lavrov plans to attend a meeting of the NATO-Russia Council in Brussels Friday, the same day NATO will formally welcome in its new members.
The NATO chief said he planned to visit Moscow in early April, and would see Russian Defense Minister Sergey Ivanov Monday at a Russia-NATO meeting on terrorism in Norfolk, Virginia.
De Hoop Scheffer spoke shortly before the seven new members deposited instruments of accession to NATO at a ceremony here, effectively expanding the alliance to 26 members.
The new members include four from the former East bloc -- Romania, Bulgaria, Slovakia and Slovenia -- and the Baltic states of Estonia, Lithuania and Latvia.
Admission of the Baltic countries has been the bitterest pill for Moscow to swallow.
Russian officials last week warned that Moscow might build up its nuclear forces in response to the expansion, and expressed concern over NATO air patrols over the Baltics, which de Hoop Scheffer said were set to begin Monday.
"Without doubt, NATO's expansion touches Russia's political, military and, to a certain extent, economic interests," Russia's top foreign ministry spokesman Alexander Yakovenko reaffirmed Monday in an official statement released in Moscow.
The statement underlined that the three states and Slovenia have not signed up to the CFE as they did not exist as independent nations when the treaty was signed. The limbo status could leave open the possibility of NATO stationing unlimited number of troops at Russia's western front.
Moscow also fears NATO air patrols over the Baltics will be used to spy on its territory.
De Hoop Scheffer said the decision to use NATO fighters to patrol the Baltics was fully explained to Lavrov when it was taken two weeks ago by the alliance's decision-make North Atlantic Council.
"At this very moment fighters are in the air to land at Lithuania airport very shortly," he said.
"It's NATO airspace and NATO airspace has always been patrolled and covered, which will always be the case when later today the alliance will be formally enlarged by seven new member states," he said.

- AFP
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A Testing Time
Says The Economist:
Mr Badawi's choice of ministers next week, and his selection of office-holders within UMNO at the party's conference in June, will provide the first unambiguous test of his sincerity as a reformer. [via The Economist -- subscription required]
Abdullah needs to pass with flying colours. We'll see the results of the first part of the test tomorrow when he announces the new Cabinet lineup.
And Datuk Seri, how about proving The Economist wrong on this one:
There is one item on the opposition's agenda, however, that Mr Badawi seems likely to neglect.
So far, he has barely mentioned, let alone dismantled, the various repressive measures that Dr Mahathir employed to dampen dissent.
The government still controls the airwaves, potential critics have difficulty obtaining newspaper licences, opposition politicians are jailed without trial, protest rallies are banned.
As one activist points out, when the government's critics are cowed, the corruption and inefficiency Mr Badawi says he is battling are sure to thrive.
A report card with straight As definitely looks better than one tarnished with a stray F or two.



Bravo Badawi >>...?

Mar 25th 2004 | KUALA LUMPUR
From The Economist print edition
Dr Mahathir's old party has done better without him
Get article background
THE National Front coalition may have won every election since Malaysia's independence, but it has not won by such a crushing margin in decades. On March 21st, voters awarded it 90% of the seats in the national parliament, up from 77% in 1999. It also won control of 11 of the 12 state governments at stake, while its share of the popular vote rose from 57% to 64%. Meanwhile, the biggest opposition party, the Pan-Malaysia Islamic Party (PAS), retained only seven of the 27 national seats it held in 1999, was practically obliterated in one of the two states it had controlled, and held on to the other by the thinnest of margins. So were the voters endorsing the status quo, and rejecting criticism of the government? Not exactly: the result was a victory for the opposition's ideas, though not for its parties.
Dumbfounded opposition leaders are denouncing the conduct of the election and calling for a new one. They point to a study of the electoral roll conducted before the poll which found a worryingly high proportion of false or incomplete addresses, and untraceable or suspicious names--including 156 people registered at the same address. They also complain about the short campaign period, media bias, gerrymandering and lack of funds. Yet the opposition faced similar obstacles in 1999, and did much better.
Another explanation holds that voters from the country's Malay Muslim majority spurned PAS's dogmatic vision of an Islamic state in favour of the Front's more progressive approach. It is certainly true that Malay voters deserted PAS in droves in Kelantan and Terengganu, the two states it had won decisively in 1999. Many of them, especially women and the young, doubtless chafed at PAS's edicts banning rock concerts, encouraging modest dress, and separating the sexes in supermarkets and on beaches.
But the National Front, despite condemning PAS as reactionary zealots, itself takes quite a doctrinaire approach to Islam, especially in areas with lots of conservative Muslim voters. It matched PAS's call for an Islamic state with a declaration that Malaysia already was one. Just before the election, it tried to defuse PAS's campaign in favour of private Islamic education with an announcement that Malay students would have to study Arabic and the Koran in state schools. One National Front state government even encourages polygamy. A big selling point of Abdullah Badawi, the prime minister and National Front leader, is his degree in Islamic studies.
Mr Badawi was indeed an important factor in the election, but probably as much for his unsullied and gentlemanly reputation as for his Islamic credentials. He came to power only last October, upon the retirement of Mahathir Mohamad, the prime minister of 22 years. At the previous election, voters seem to have blamed Dr Mahathir both for the struggling economy and for the high-handed and corrupt ways of Malaysian officialdom. They also associated him with the unjust treatment of Anwar Ibrahim, finance minister and deputy to Dr Mahathir, who was sacked, jailed and beaten in 1998. By retiring before this election, Dr Mahathir deprived his critics of their most emotive issue.
By contrast, Mr Badawi, or "Pak Lah" as Malaysians affectionately call him, is a breath of fresh air. In his five months in office, he has launched a counter-corruption drive, called for an inquiry into the police force and scrapped an extravagant construction scheme. In the election campaign, too, he stole the opposition's thunder by promising humbler, cleaner and more responsive government.
PAS and Keadilan, a party founded by disgruntled supporters of Mr Anwar, dismiss Mr Badawi's soft spot for good governance as a campaign ploy. Dr Mahathir, too, they argue, sold himself as a reformer at first. What is more, the senior echelons of the United Malays National Organisation (UMNO), the main component of the National Front, are still packed with the sort of politicians that the electorate turned against in 1999.
Before this election, Mr Badawi's supporters argued that he did not yet have enough authority to overhaul UMNO or the government wholesale. He had, after all, been appointed deputy prime minister by Dr Mahathir and then inherited the premiership without an election. His thumping victory at the polls, however, should put such concerns to rest. So Mr Badawi's choice of ministers next week, and his selection of office-holders within UMNO at the party's conference in June, will provide the first unambiguous test of his sincerity as a reformer.
There is one item on the opposition's agenda, however, that Mr Badawi seems likely to neglect. So far, he has barely mentioned, let alone dismantled, the various repressive measures that Dr Mahathir employed to dampen dissent. The government still controls the airwaves, potential critics have difficulty obtaining newspaper licences, opposition politicians are jailed without trial, protest rallies are banned. As one activist points out, when the government's critics are cowed, the corruption and inefficiency Mr Badawi says he is battling are sure to thrive.


Copyright ? 2004 The Economist Newspaper and The Economist Group. All rights reserved.

Happy Nowrouz!

>> MULLAHWATCH - AHA?


Iran postpones UN nuclear inspection mission
Friday, March 12, 2004 - ?2004 IranMania.com
VIENNA, March 12 (AFP) - Iran has put off an inspection mission from the UN nuclear watchdog that was due to arrive in the Islamic Republic this week, Iranian ambassador to the international agency Pirooz Hosseini told AFP.
He said that "due to the approaching of the Iranian New Year we asked them to come later."
The ambssador said no new date had been set.
The delay comes as the watchdog, the International Atomic Energy Agency (IAEA), is debating at a board of governors meeting in Vienna a resolution that criticizes Iran for hiding parts of its nuclear program.
IAEA officials refused to comment on the inspection mission.
Iranian Foreign Minister Kamal Kharazi had threatened in Iran this week for the Islamic Republic to end cooperation with the IAEA unless it stopped being "influenced by the Americans".
Hosseini said the delay in the inspection mission was not politically motivated.
He said that people will be out of their offices, since when the Iranian new year begins next week "there are five or six days of official holiday and then schools are closed for 15 days and parents take off to be with their children."
But a diplomat close to the IAEA said "of course it's political", and added that "the delay in inspections will definitely slow down what the IAEA is trying to do."
The IAEA has since February 2003 been verifying with inspections whether Iran's nuclear program is peaceful, or devoted to secretly developing atomic weapons, as the United States has charged.
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>> OUR FRIENDS EU HARDBALL?


EU warns Iran over human rights
Friday, March 26, 2004 - ?2004 IranMania.com
GENEVA, March 25 (AFP) -- The European Union warned Tehran on Thursday that it had seen little progress in Iran's human rights dossier, which Brussels has effectively made a precondition to improved trade ties.
The EU also openly admitted at the UN Human Rights Commission in Geneva that its policy of constructive engagement with Tehran on human rights was flagging.
"Unfortunately, the fourth round of our human rights dialogue with Iran has not taken place due to Iran's failure to confirm the dates agreed," Ireland's envoy Mary Whelan told the Commission on behalf of the EU presidency.
"We regret that overall we see little improvement in the human rights situation in the country," she added.
Despite some improvement in women's rights, Whelan underlined that violations of human rights "continue to be widespread" in Iran, including torture, disappearances after arrests, arbitrary detention and political and religious repression.
The EU also noted that a de facto moratorium on amputations in Iran, a criminal penalty under Islamic law, had not been respected, while public executions continued.
"The recent interference in the electoral process represents a setback for democracy and a general trend toward even more restrictions on the exercise of political rights and freedoms," Whelan charged.
The EU External Affairs Commissioner Chris Patten said in February, after elections in Iran were marred by a ban on many reformist candidates, that Brussels would be watching closely to see how the situation there evolved.
The EU promotes constructive engagement with the Islamic Republic, seeking dual-track talks on trade and political issues, in contrast notably to the United States which has labelled Tehran part of an "axis of evil."
But the talks have been on hold since June 2003 because of EU concerns about Iran's nuclear ambitions.

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>> MEANWHILE OUR RUSSIAN FRIENDS...
Russian Atomic Energy Minister to visit Iran
Thursday, March 25, 2004 - ?2004 IranMania.com
Tehran, March 24 (IranMania) -- According to Iran's State News Agency(IRNA) Chief of the Federal Atomic Energy Agency Alexander Rumyantsev is most likely to visit Iran in May, spokesman for the restructured Atomic Energy Ministry Nikolai Shingarev told Itar-Tass.
"Implementation of the scheduled construction of the first energy unit of Iran`s nuclear power plant in Bushehr will be discussed at the upcoming meeting of the chief of the atomic energy agency and the leadership of the Iranian atomic energy agency."
Meanwhile, "the text of the protocol on return of spent nuclear fuel with the nuclear power plant for storage and processing in Russia" is expected to be finally agreed at the Tehran meeting.
"Representatives of the Russian corporation TVEL will discuss "the commercial aspect of the return of spent nuclear fuel at a meeting with the Iranian side shortly," Shingarev emphasized. The company TVEL did not rule out "the meeting may be held in Tehran in the next two weeks."
Rumyantsev was initially planned to visit Iran last January, but the trip was postponed to March "for technical reasons."
Shingarev noted that new adjournment of the date of the trip of the atomic energy agency chief to Tehran "is caused by the resolution of organizational issues of the transfer of powers and functions of the abolished Atomic Energy Ministry to the Federal Atomic Energy Agency."
"This work will be mainly completed in the next six weeks," he remarked.


Moscow may help Iran build 2nd reactor
Thursday, March 25, 2004 - ?2004 IranMania.com
Tehran, March 24 (IranMania) -- According to Iran's State News Agency(IRNA) Russia may take part in the construction of a second reactor at Iran's Bushehr nuclear power plant, sources at the Russian Atomic Energy Ministry said.
According to the official, the general contractor involved in the Bushehr nuclear power plant project - Atomstroiexport, has already handed over to Iran preliminary feasibility studies concerning the construction of a second reactor at Bushehr.
The chief of the Federal Agency for Atomic Power, Alexander Rumyantsev said on Monday Russia`s plans regarding the Iranian nuclear power program remained unchanged, despite the ongoing reorganization of the Atomic Energy Ministry.
"Technical cooperation with Iran in nuclear power plant construction in Bushehr will go on," he said. "I see no causes that
might restrict our cooperation."
A supplementary protocol on the repatriation of spent nuclear fuel from Bushehr to Russia "will be signed soon." Rumyantsev said signing of the protocol had been delayed against a background of "certain financial aspects."
"Iran has asked for several months to study the technology of handling spent nuclear waste," Rumyantsev said, adding that "Iran had repeatedly confirmed the readiness to sign the protocol."
In the meantime Iran`s Ambassador to Russia, Gholam-Reza Shafei has told Tass in an interview that the Russian-Iranian protocol on he return of spent nuclear fuel from Bushehr nuclear power plant will be signed in Tehran or in Moscow in the near future. Cooperation between Iran and Russia, he said, is "absolutely transparent and is being carried in full compliance with international legislation and the applicable rules."
"In view of Iran`s signing of the supplementary protocol with the International Atomic Energy Agency and our commitment to the liabilities under the Nuclear Arms Non-Proliferation Treaty and the good political relationship with Russia we hope that Russian-Iranian cooperation in the field of nuclear power will go on developing," the Iranian ambassador said.
"Cooperation in building the first unit of Bushehr nuclear power plant is continuing. The reasons why construction work has fallen behind schedule will be discussed when a senior Russian official visits Iran shortly."
Ambassador Shafei noted that Russia and Iran had agreed to sign a protocol on the return of spent fuel to Russia. "Alongside this protocol a supplement must be signed to the comprehensive contract on the construction of the nuclear power plant`s first unit."
The two sides are in the phase of active coordination of these documents, to be signed in Tehran or Moscow soon. "
A second Bushehr reactor is a future project and more fundamental negotiations on it will follow," the Iranian ambassador said.

>> AHEM...WE WERE BORN YESTERDAY...

Nuke fuel repatriation protocol with Iran
Thursday, March 25, 2004 - ?2004 IranMania.com
Tehran, March 24 (IranMania) -- According to Iran's State News Agency(IRNA) a Russian-Iranian protocol on the return of spent nuclear fuel from Bushehr nuclear power plant will be signed in Tehran or in Moscow in the near future, Iran's Ambassador to Russia Gholam-Reza Shafei told Tass in an interview.
Cooperation between Iran and Russia, he said, is "absolutely transparent and is being carried out in full compliance with international legislation and the applicable rules."
"In view of Iran`s signing the supplementary protocol with the International Atomic Energy Agency and our commitment to the liabilities under the Nuclear Arms Non-Proliferation Treaty and the good political relationship with Russia, we hope that
Russian-Iranian cooperation in the field of nuclear power will go on developing," the Iranian ambassador said.
"Cooperation in building the first unit of the Bushehr nuclear power plant is continuing. The reasons why construction work has fallen behind schedule will be discussed when a senior Russian official visits Iran shortly."
Ambassador Shafei said Russia and Iran had agreed to sign a protocol on the return of spent fuel to Russia.
"Alongside this protocol a supplement must be signed to the comprehensive contract on the construction of the nuclear power plant`s first unit." The two sides are in the phase of active coordination of these documents, to be signed in Tehran or Moscow soon.
"A second Bushehr reactor is a future project and more fundamental negotiations on it will follow," the Iranian ambassador said.


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Israeli report blasts intelligence
for exaggerating the Iraqi threat
By Dan Baron
JERUSALEM, March 28 (JTA) -- Israel's foreign intelligence services have come under public scrutiny with revelations they overestimated one major threat while underplaying another.
Hot on the heels of the testimony of former U.S. counterterrorism chief Richard Clarke accusing the Bush administration of ignoring pre-Sept. 11 U.S. intelligence reports because it was focused on Iraq, the Steinitz Report issued on Sunday blasted those in Israel who had pushed for the war on Iraq.
The 80-page report, compiled by the Knesset Subcommittee on Secret Services under lawmaker Yuval Steinitz, lambasted prewar assessments by Mossad and military intelligence officials that it was "very likely" Saddam Hussein had missiles with non-conventional payloads aimed at Israel.
That perceived threat prompted the Defense Ministry to issue millions of gas masks and order citizens to prepare sealed rooms, at a cost of millions of dollars.
"The military and political upper echelons are responsible for the mess-up," said the Steinitz Report, which charged Israeli intelligence analysts with overconfidence and oversimplification.
The report also said Mossad and military intelligence officials are in need of a major overhaul after they failed to track Libya's pursuit of weapons of mass destruction.
Libyan ruler Muammar Gaddafi abandoned the program in December in negotiations with the United States and Britain that were kept secret from Israel.
"The idea that a hostile nation like Libya, with an unpredictable leader like Gaddafi, was in the running to develop a militarized nuclear industry, without Israel getting the necessary advance warning from its intelligence service to act preventively or at least prepare accordingly, is -- to put it mildly -- intolerable," the report said.
"The prime ministers lack the proper tools that would afford them real oversight and orientation on the intelligence apparatus and building a real force for intelligence analysis."
Israel stayed on the sidelines of the Iraq war out of concerns its involvement would alienate the few U.S. allies in the Arab world.
But Israeli intelligence assessments were regularly fed to Washington.
"It is not inconceivable that assessments passed by an Israeli intelligence agency . . . to a friendly agency were bounced back and force, played a key role in that friendly agency's planning, and ultimately ended up with the agency where they originated in the form of an analysis by an altogether different agency. Such assessments would immediately be perceived as another authoritative body bolstering and verifying the original Israeli view," the report said.
Yet asked by reporters if Israeli intelligence might have misled the United States and its ally Britain as to Iraq's real capabilities, Steinitz was more circumspect.
"American and British intelligence services had much better access to Iraq by simply sitting in Kuwait and other locations, and by being able to fly almost freely over Iraqi soil," he said.
U.S. and British officials did not comment.
The Steinitz report did not recommend action against any specific intelligence officials. But it said military intelligence, which has swollen steadily in terms of manpower and funding since Israel's failure to foresee the Arab assault which opened the 1973 Yom Kippur War, should be cut down in size.
Unit 8200, the military intelligence codebreakers -- who, according to a recent report in the New Yorker magazine, tipped off the United States as to Iran's nuclear buildup -- should become a civilian agency, the report said.
Meanwhile, it called for the Mossad to be boosted. According to security sources, the spy agency has fallen into lethargy recently through a combination of military intelligence's wide reach and an over-reliance on cooperation with foreign agencies.
The Prime Minister's Office, which oversees all of Israel's intelligence agencies, said it would consider the recommendations.

? JTA. Reproduction of material without written permission is strictly prohibited.
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NEWS ANALYSIS
One year after war in Iraq, results
are mixed -- and terrorism continues
By Leslie Susser
JERUSALEM, March 22 (JTA) -- When the United States launched its war on Saddam Hussein's regime in Iraq, Israeli planners were hoping for major strategic changes that would promote regional stability.
A year later, the results are mixed.
There have been some major strategic gains: potential nuclear threats from Iran and Libya have been reduced, the threat of Iraq and Syria joining forces in a land war on Israel's northeastern border has been removed, and on Israel's northern border, the Hezbollah terrorist group has been exercising newfound restraint.
But the hoped-for domino effect against terrorism and its sponsors has not materialized. The terrorist threat to Israel actually has grown, and the chances of peace with the Palestinians appear increasingly remote.
Much will depend on whether the United States sees through the regime-change process and creates a stable democracy in Iraq or withdraws in disarray, leaving behind a trail of chaos and resentment.
Though no weapons of mass destruction have been found in Iraq, Israeli experts still maintain that Saddam had advanced chemical and biological weapons' programs and that if left to his own devices, he would have obtained nuclear bombs sooner or later.
Israeli strategists argue that the fact that such developments were pre-empted by the war is a major strategic boon not only for Israel, but for the Western world as a whole.
The most unexpected strategic gain for Israel was the domino effect on Libya's leader, Col. Muammar Gadhafi. Days after Saddam's capture by American forces in December, Gadhafi announced his readiness to dismantle his weapons of mass destruction programs.
Israeli officials believe Gadhafi is genuine and that Libya can be removed from Israel's "threat map."
They maintain that had Gadhafi developed a nuclear capability, Israel and the West would have had to invest huge resources in developing a suitable response.
The same Israeli officials are far less sanguine about Iran's declared readiness to suspend its nuclear program. They believe the Iranians are playing for time. But they note that even if the Iranians go back on their promises, the war in Iraq has pushed back their nuclear timetable.
It also has created a framework for international monitoring of Iran's nuclear development. That is no small achievement, the Israeli officials say.
One of the Israeli military planners' greatest nightmares was the specter of massive Iraqi, Syrian and Jordanian tank forces rolling across the desert toward Israel's eastern border. This scenario was dubbed the "Eastern Front" problem, and it was one of the main reasons for Israel's huge tank build up, even after achieving peace with Egypt and Jordan.
The removal of Iraq from the equation makes the scenario totally unrealistic. Israel's military planners will be able to risk major cutbacks in land forces and already are considering which units they can do without.
There also is a significant political dimension to the Eastern Front's disappearance.
Prime Minister Ariel Sharon always had insisted on retaining the Jordan Valley, between the West Bank and Jordan, as an additional buffer against the Eastern Front.
That would have meant that any future Palestinian state would have had to settle for no more than 80 percent of the West Bank. Now that the Eastern Front no longer exists, Sharon can consider relinquishing the Jordan Valley and strengthening chances for a future territorial settlement with the Palestinians.
Saddam's elimination and the collapse of Eastern Front also has heightened Syria's weakness and isolation.
This already has led to overtures to Israel from Syria's President Bashar Assad, which Israel dismissed as insincere. But a weakened Syria may well make serious approaches for peace with Israel soon.
In addition, with Israel and the United States believing that the best hope for long-term peace in the Middle East is the overthrow of autocratic regimes and the spread of democracy, they could not but take heart from unprecedented criticism of the Assad regime and recent Kurdish riots in Syria. One group of protesters said explicitly that they had been inspired by the overthrow of Saddam to challenge the sister Ba'athist regime in Damascus.
Another gain for Israel is the restraint currently being exercised on its volatile northern border by Hezbollah.
The group has been defined by the United States as a terrorist organization on a par with Al-Qaida, and its members may fear that attacks on Israel could elicit massive Israeli retaliation -- with the backing of the United States.
So Hezbollah, with Iranian aid, has changed its modus operandi: Instead of sparking direct military exchanges with Israel, it is clandestinely sending agents into the West Bank and Gaza Strip to help promote terrorism there.
Indeed, in perhaps the greatest disappointment to Israeli policy makers, the Iraqi domino effect has not impacted the level of Palestinian terrorism.
In a recent interview with Israel's daily Ma'ariv, retired Maj. Gen. Amos Gilad, Defense Minister Shaul Mofaz's closest political adviser, declared that "the domino effect worked where it wasn't expected to, on Libya, and not where we hoped it would, on Arafat."
Ongoing Palestinian terrorism after the war in Iraq, and the sense that there was no one to talk to on the Palestinian side, led to Sharon's plan for unilateral disengagement from the Palestinians. The first step, outside of Israel's West Bank security barrier, is Israel's withdrawal from the Gaza Strip.
But both Israel and the United States feared that as in Iraq, a power struggle would ensue between different local factions. To ensure that the secular Palestinian Authority and not the fundamentalist Hamas takes control of Gaza after the Israeli withdrawal, Israel has been targeting Hamas and its leaders.
Monday's assassination of Hamas spiritual and political leader Sheik Ahmed Yassin was part of this policy. Israeli military intelligence estimates that this will weaken Hamas and reduce terrorism in the long term.
Other analysts, however, warn that in assassinating a cleric, Israel may have opened a wider front with the Muslim world -- precisely the kind of development the U.S.-led war in Iraq was meant to contain.
Whether terrorism against Israel declines will depend to some extent on the degree to which the United States manages to stabilize the situation in Iraq, Israeli analysts believe.
As far as its strategic impact on the region is concerned, they argue, the American story in Iraq is far from over.
This month's signing of a provisional constitution in Iraq should be a major achievement for the Americans, they say, but they fear that ongoing terrorism in Iraq still could disrupt Washington's plans for a model democracy.
And, they say, the way the struggle in Iraq between the United States and its terrorist opponents plays out could have major consequences for Israel and the region as a whole.
Leslie Susser is the diplomatic correspondent for the Jerusalem Report.


? JTA. Reproduction of material without written permission is strictly prohibited.
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China's Communists Fall Victim to Piracy
BEIJING - China's rampant copyright piracy has hit home for the ruling communists after police caught two people with 14,000 unauthorized copies of party handbooks.
The two books contain new rules on party relations with the Chinese public and are mandatory reading for the party's 68 million members, the official Xinhua News Agency said.
Police launched an investigation following a complaint by the party publishing house that illegal copies appeared on the market immediately after it issued the real thing in February.
A bookstore owner and a printer in the western city of Xi'an were caught and admitted printing copies because the books "have become best sellers and are profitable," Xinhua said.
The report didn't say whether any party members -- who are supposed to be moral role models -- tried to save money on their political obligations by buying pirated copies.
It didn't say what penalties the store owner and his printer might face.
China's thriving industry in product piracy churns out illegal copies of everything from software to DVDs of Hollywood movies to fake designer shirts.
Chinese leaders have launched repeated crackdowns, but foreign and Chinese manufacturers complain that violations are still widespread.


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Chirac Suffers Midterm Blow
French Deliver Rebuke of Government Policies in Regional Vote
By Keith B. Richburg
Washington Post Foreign Service
Monday, March 29, 2004; Page A18
PARIS, March 28 -- President Jacques Chirac and his ruling conservative party suffered a crushing defeat in regional midterm elections Sunday, with the opposition Socialists and their Green and Communist allies seizing control of the vast majority of regional councils. The results represented a sharp rebuke for the government, which has attempted to reform France's costly health care, pension and education systems.
Chirac's party was expected to lose control of a number of regional councils after its poor showing in last week's first round of voting. But the scale of Sunday's defeat immediately prompted speculation that Chirac's prime minister, Jean-Pierre Raffarin, could be replaced in a sweeping post-election cabinet reshuffle this week.
"It's not just a defeat," said Alain Duhamel, a veteran political analyst and commentator. "It's a disaster."
Results being tallied Sunday night showed the Socialists and their allies taking control of at least 21 of 26 regional governments. Nationally, the Socialists and their allies were winning almost 50 percent of the vote, compared with just 37 percent for the government and about 13 percent for the anti-immigration National Front party.
All last week, the French media had been filled with speculation that Chirac would keep Raffarin in a retooled government and let go of some of the more unpopular ministers. But Duhamel, among others, said Chirac might now feel pressure to replace Raffarin with Interior Minister Nicolas Sarkozy, whose crackdown on crime has made him France's most popular politician.
Also threatened were the government's unpopular attempts to cut the spiraling costs of France's generous pension system and other aspects of the welfare state. The government has said changes are necessary to make the French economy more dynamic. But the reforms, including an increase in the number of years a person must work to qualify for a pension and a planned reduction in some unemployment benefits, have prompted bitter and disruptive protests over the past two years by a wide range of workers.
Alain Juppe, the head of Chirac's ruling Union for a Popular Movement (UMP) party, insisted the reforms would continue. "The governing majority has suffered a serious defeat," he said in a speech to supporters. "Is it necessary to abandon the reforms launched by the Raffarin government? In conscience, I believe not. To abandon the reforms would be to condemn our country to paralysis and regression."
Raffarin, appearing subdued, said, "It is clear that the opposition has won this ballot." But, he said, "the reforms will continue simply because they are necessary."
Leaders of the victorious Socialist Party called the results a repudiation of Chirac's policies and said voters had demonstrated their trust in the Socialists to preserve the safety net of social services.
Citing the high turnout, Francois Hollande, the Socialist Party leader, said voters had "sent a clear message to our political leaders. They have rejected the policies which have over two years aggravated inequality."
The ruling party's defeat was underscored in some high-profile races. Poitou-Charentes, in western France, was long Raffarin's personal fiefdom, but on Sunday it was won by a Socialist, Segolene Royal, who received 55 percent of the vote. A conservative former French president, Valery Giscard d'Estaing, was handily defeated in his bid to become the regional president of Auvergne.
Regions have little real power, and turnout in the past has been low. But Sunday was the first time French voters had an opportunity to go to the polls since Chirac and the center-right swept to power two years ago, and many wanted to signal their dissatisfaction before the next elections for president and parliament in 2007.
"The results of the regionals are going to have a huge influence on the national government's policies," said Karim Khelifi, 43, a communications worker voting in a working-class neighborhood of Paris. "I hope that the left wins in many regions," he added. "That way, the government will be forced to come back to more humane social policies."
Special correspondent Pan Yuk contributed to this report.

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R?gionales : la d?b?cle de la droite
LEMONDE.FR | 28.03.04 | 20h02 * MIS A JOUR LE 29.03.04 | 01h57
La vague rose du premier tour des r?gionales s'est amplifi?e au second tour, dimanche, et la gauche se retrouve ? la t?te d'au moins 20 r?gions m?tropolitaines sur 22, contre huit avant le scrutin.
La majorit? UMP-UDF a subi une v?ritable d?route, dimanche 28 mars, au second tour des ?lections r?gionales. La gauche emporte au moins 20 r?gions sur les 22 de la France m?tropolitaine alors que la droite, qui en contr?lait 14 depuis 1998, n'en a plus que deux au maximum, l'Alsace et peut-?tre la Corse.
Le taux d'abstention, qui ?tait de 37,9 % au premier tour, est tomb? ce dimanche ? pr?s de 35 %. Cette plus forte mobilisation des ?lecteurs a profit? ? la gauche, qui recueille 50,37 % des voix (6 points de plus par rapport au premier tour), contre 37 % ? la droite (+ 3) et 13 % au Front national (- 2,5).
Cette victoire ?crasante de la gauche, qualifi?e d'"extr?mement spectaculaire" par l'ancien premier ministre PS Laurent Fabius, se traduit par le gain d'une dizaine de r?gions, sur les 13 que la droite d?tenait en m?tropole (hors Corse). Le premier secr?taire du Parti socialiste, Fran?ois Hollande, a, lui, parl? de"d?saveu s?v?re" du pr?sident Jacques Chirac.
"C'est d?sormais au pr?sident de la R?publique de tirer les le?ons de cette crise de confiance", a rench?ri le pr?sident de l'UDF, Fran?ois Bayrou.
"C'est un 21 avril [2002] ? l'envers", a d?clar?, de son c?t?, le ministre des affaires sociales, Fran?ois Fillon, en ?voquant "une d?faite extr?mement grave du gouvernement et de la majorit?". Le constat est identique pour le pr?sident de l'UMP, Alain Jupp?, qui estime que "la majorit? gouvernementale vient de subir un ?chec grave. (...) Nous devons entendre ce fort m?contentement".
D?FAITES CUISANTES
Symbole de cette situation, le Poitou-Charentes, fief du premier ministre, o? S?gol?ne Royal (PS) obtient 55,1 % des suffrages, soit 20 points d'avance sur Elisabeth Morin (UMP), successeur de M. Raffarin ? la r?gion.
Autre victime de ce raz-de-mar?e, l'ancien pr?sident Val?ry Giscard d'Estaing (UMP), battu de 5 points en Auvergne (52,65 % contre 47,5 %) par Pierre-Jo?l Bont? (PS).
D?faite cuisante aussi en Picardie pour le ministre UDF, Gilles de Robien, qui ne recueille que 35,7 % des voix contre 45,7 % ? la liste du PS Claude Gewerc.
La droite perd deux autres bastions, la Bretagne, o? le pr?sident sortant, Josselin de Rohan (UMP), est largement devanc? par Jean-Yves Le Drian (58 % contre 42 %), et la Franche-Comt?, o? Raymond Forni (PS) devance de 12 points Jean-Fran?ois Humbert (UMP).
Elu en 1998 avec les voix du Front national, Jacques Blanc (UMP) est battu de 15 points en Languedoc-Roussillon par le maire PS de Montpellier, Georges Fr?che.
REMANIEMENT EN VUE
Dans ce contexte, la gauche conserve ais?ment les huit r?gions qu'elle d?tenait d?j?, dont l'Ile-de-France, o? Jean-Paul Huchon (PS) devance le porte-parole du gouvernement, Jean-Fran?ois Cop? (UMP), d'environ 6 points.
Dans la r?gion PACA, le pr?sident sortant PS, Michel Vauzelle, devance de 11 points le secr?taire d'Etat UMP, Renaud Muselier.
M?me cas de figure en Aquitaine et dans le Nord - Pas-de-Calais, o? les sortants PS Alain Rousset et Daniel Percheron l'emportent avec environ 20 points d'avance sur les ministres Xavier Darcos et Jean-Paul Delevoye.
L'?chec de la droite place le pr?sident Jacques Chirac dans une position difficile, l'incertitude r?gnant plus que jamais sur l'ampleur du remaniement minist?riel ? venir et sur le possible d?part de Jean-Pierre Raffarin de Matignon. Un changement de strag?gie mettant davantage l'accent sur le social pourrait voir le jour.
"Des changements s'imposent certainement", a indiqu? M. Raffarin dans sa premi?re r?action publique apr?s les r?sultats, apr?s que des ministres ont admis la gravit? de la d?faite du gouvernement. Pour M. Raffarin, dont la popularit? est en chute libre, "l'action doit ?tre plus efficace, l'action doit ?tre plus juste". Rappelant son bilan au gouvernement en mati?re de lutte contre l'ins?curit? et le ch?mage ou de r?forme des retraites, il a reconnu que "ce n'est pas assez, je le sais, les Fran?aises et les Fran?ais nous l'ont dit aujourd'hui clairement".
Selon un sondage r?alis? cette semaine par la Sofres, ? para?tre lundi dans L'Express, 59 % des Fran?ais souhaitent le d?part de M. Raffarin, 29 % plaident au contraire pour son maintien tandis que 40 % veulent qu'il soit remplac? par Nicolas Sarkozy.
Lemonde.fr avec AFP et Reuters

Acheter les droits de reproduction

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Shiites Organize to Block U.S. Plan
Spurred by Sistani, Iraqi Clergy Mobilizes Followers Against Constitution
By Anthony Shadid
Washington Post Foreign Service
Monday, March 29, 2004; Page A01
BAGHDAD -- With the turban of the clergy and the talk of a politician, Hashem Awadi, a young Shiite Muslim cleric, thumbed through papers that described the latest challenge to Washington's political blueprint for Iraq.
Here, the gaunt, 38-year-old said, was a leaflet that enumerated the objections of Grand Ayatollah Ali Sistani, the country's most powerful cleric, to Iraq's interim constitution. This, he said, was the letter the ayatollah sent to the United Nations in protest. And here, displayed proudly, was the petition denouncing that constitution in what he said amounted to a "popular referendum."
"We want to make clear the will of the people," said Awadi, who heads the Ghadir Foundation, a religious institute in Baghdad that, by his count, has distributed as many as 10,000 of the petitions. "The people are burning."
Awadi, whose speech veers from Islamic law to Western freedoms, is one of the leaders of a vociferous grass-roots campaign unleashed by the edict published by Sistani's office March 8 questioning the legitimacy of the interim constitution.
In the weeks since, the vast network of Shiite Muslim mosques, religious centers, foundations and community organizations that make Sistani Iraq's most influential figure has led a campaign to amend the constitution or discard it. Posters have gone up at universities in Baghdad and elsewhere, leaflets have circulated among prayer-goers and Sistani's cadres -- from young clerics to devoted laymen -- have gathered tens of thousands of signatures on the petitions. Demonstrations are next, they warn.
"This is freedom of expression," Awadi said, thumbing yellow worry beads. "This is freedom of opinion."
The clergy's campaign is steeped in the religious symbolism that binds much of the country's Shiite majority, whose political ascendancy is a defining feature of postwar Iraq. It turns on a term -- legitimacy -- that is far easier to deny than to bestow. The campaign signals a willingness to confront U.S. authorities at a moment when time is short, as the American administration prepares to formally end the occupation on June 30 and turn over authority to an interim Iraqi government.
Sistani's edict was never uttered aloud. The reclusive, 73-year-old cleric did not deliver it publicly. But the statement -- six lines penned in the meticulous handwriting of Sistani's son -- was enough to seriously imperil a document American and Iraqi leaders have hailed as a model for the Arab world and the clergy have denounced as the work of an unelected body unduly pressured by U.S. officials.
Sistani's followers make clear that their campaign is not simply driven by the hope of altering the constitution. In a country where pledges of democracy are not yet supported by representative institutions, religion is by far the best-organized force. Its leadership views the constitution as an opportunity to mobilize the still unfulfilled potential of the country's Shiite majority.
"For a long time, we had lost our rights," said Saad Taher, 40, a community activist and municipal worker, sitting in a tailor's shop in the religiously mixed neighborhood of New Baghdad. "We're trying to help the people to take their rights back."
The room, a dingy second-floor workshop that overlooks a teeming street market of rickety stalls, is the headquarters of Taher's Committee of Heavenly Books, one of an abundance of Shiite community groups that have sprung up since the fall of Saddam Hussein's government on April 9. Most have names imbued with religious imagery, like the Committee of Rescue Ships or Committee of the Followers of Hussein, Shiite Islam's most beloved saint. Most are long on devotion and short on money.
"We're from the people," Taher said. "We're the children of this neighborhood."
With about 400 members, the committee has worked on the front lines of the constitutional campaign. Taher and his co-director, Talal Jaafari, a vendor in the market outside, meet every day in the workshop with five or 10 of the most committed.
For the past week, they have gone to universities, to Shiite community centers known as husseiniyas, to mosques and door to door with the petitions, which describe the constitution as illegitimate and list objections that run from the document's liberal definition of citizenship to the power of an unelected government to make lasting decisions. So far, the two men have completed more than 400 petitions, each with 15 signatures, along with a name, address, occupation and birth date.
Some were reluctant to sign, fearing political involvement that, until a year ago, was particularly dangerous, Taher said.
"But we've overcome our fear," he said, smiling. "Thank God and praise him."
"We've come to the point where others are scared of us," a friend, Jassem Qureishi, said, drawing laughs from the group.
"America has a term: the rebuilding of Iraq," Taher said, sitting along a wall crowded with religious portraits and a tailor's tools. "We are rebuilding ourselves. We want to create a new Iraqi personality. That's our task. That's not the Americans' task."
Asked about the next step the group plans in the campaign, Taher answered succinctly.
"We take our instructions from Sheik Sahib," he said.
Lieutenant in Baghdad
Sheik Sahib Abdullah Warwar Qureishi is a wakil, or religious representative. He is one of about 200 in Baghdad who answer to Sistani, many of them providing the organizational power behind the campaign's momentum.
Unlike many of the wakils, Qureishi is young, his bushy beard making him appear older than his 34 years. But he has spent more than a decade as a seminary student in the Shiite holy city of Najaf, where Sistani has his headquarters. His words come slowly and are often unexpectedly cheerful, in the mentoring tone of a teacher.
"We refuse the constitution in its entirety and its details," he said, sitting under three shelves full of law books.
Qureishi is responsible for a sprawling swath of New Baghdad known as the Gulf neighborhood, which is majority Shiite. More than 70,000 people live there, and the area has 10 husseiniyas and 12 mosques. Qureishi spends half the week in Najaf, where he visits Sistani's office daily. On his three nights in Baghdad, he teaches three one-hour courses to about 37 students who, along with the activists of the Committee of Heavenly Books, have become the foot soldiers in the petition campaign.
On this night, six stacks of petitions were laid out in front of him, spread like a feast.
"For 35 years, Najaf could never lift its head. The people couldn't breathe," he said, as the ceiling fan blew the scent of burning incense across the room. "Now we speak as we like, we worship as we like. What we have now feels like democracy."
Until late in the night, students and activists streamed into his small brick house, bordered by three palm trees, with pools of sewage outside. Each carried a bundle of petitions. Over the past week, he estimated, he had gathered at least 6,000 petitions with 90,000 signatures. Every day or so, he has the documents scanned onto a computer disc and sent to Sistani's office in Najaf.
"We had more than 1,000, and it wasn't enough," said one activist, Qassim Hassan, 42, as he entered the home.
"If you need a billion, I'll give them to you," Qureishi told him.
Kadhim Atshan, a member of the committee, said a third of the people wanted to sign with pens dipped in their own blood.
Qureishi shook his head. Sistani, he said, "has refused people doing this. He said it's disgusting, and he doesn't accept it."
Sitting together on red carpets, their backs against pillows along the walls, the men talked about what they considered the constitution's faults.
The campaign already resembles a movement led by Sistani against a U.S.-devised plan for Iraq's transition, announced Nov. 15, calling for regional caucuses that would choose a transitional government. A month later, Sistani made his reservations to the plan public. By February, amid popular opposition, the U.S. administration was looking for an alternative that has yet to be decided.
In both campaigns, the question was who would decide Iraq's political future and under what authority.
Iraq's U.S.-appointed Governing Council, which negotiated and signed the interim constitution on March 8, "doesn't represent the majority of the people," Qureishi said. "They must represent themselves." He turned the discussion to the U.S. occupation, as the men listened patiently. "The coalition forces didn't come for your interests or my interests," he said, wagging his finger, "not at all."
"The solution is for you to vote, for me to vote, for him to vote," he said, pointing to those gathered. "That's the solution."
The enthusiasm grew. At one point, electricity was cut and the lights went out. Most of the men pulled out lighters. The conversation never missed a beat. Some of the youngest of the sheik's followers pleaded for more direct action. "The shortest distance between two points is a straight line," said Jawad Rumi, 33. "The shortest distance from Earth to Heaven is jihad."
Over tea and cigarettes, other men spoke up, addressing the sheik or their colleagues, and nearly all seemed to have read the law. One pointed out the constitution's provision for Iraqis to reclaim citizenship. Several pointed out that the provision would allow Iraqi Jews who left for Israel in the 1940s and 1950s to return. "It will let the Israelis do as they like in Iraq," Jaafari said to the nods of others.
What about Iraqi armed forces remaining under U.S. control in the interim? one man asked. Why wasn't the constitution put to a vote? asked another. Others objected to a three-member presidency that would allow a vice president, likely a Sunni Arab or Kurd, to overrule a presumably Shiite president -- a clause that U.S. officials and some Iraqi leaders describe as essential for protecting minority rights.
The sheik spoke up again. From a poster embossed with red and black type on a blue background, he pointed out what he said was his biggest objection: a provision that gives Kurds an effective veto over the permanent constitution to be written next year.
"This decision was imposed on us," Qureishi said.
'They're Ready to Act'
The poster the sheik read from has gone up in many parts of Baghdad. It bears a picture of Sistani, with flowing beard and turban, reading from a book. In large type, it asks, "What do you know about the Iraqi State Law for the Transitional Phase?" It was published by the Najaf-based Murtada Foundation which, like Awadi's Ghadir Foundation, is among the handful of institutions that are nominally independent but under the loose supervision of the offices of Sistani and other senior ayatollahs.
The literature is ubiquitous -- in husseiniyas and mosques, on the walls of universities and in markets. Qureishi, the sheik, had foot-high stacks of the group's leaflets and interviews, piled next to blank petitions. At a mosque in a nearby neighborhood, banners along the walls copied the slogans: "Any law not ratified by a nationally elected group will not be legitimate."
Jassim Jazairi, a 35-year-old cleric in a black turban, runs the branch of the Murtada Foundation on Baghdad's Palestine Street, one of two in the capital. On his untidy desk were 170 petitions, marked either with signatures or with the thumbprints of the illiterate. Alongside them were copies of an interview with "a source close to" Sistani, reprinted from the foundation's magazine, Holy Najaf. Next to those was a red Koran.
"Even now, when we hold forums and we talk about [Sistani's] reservations, the people almost respond with violence," Jazairi said. "They're emotional, and they're ready to act."
Jazairi predicted that protests would come next, to force amendments to the constitution. He insisted they would stay nonviolent -- "peaceful resistance," as he put it. To him, they were another step in the politicization of the Shiite community, led by the clergy.
"We lost so much over 35 years of repression," he said. "The fear remains, and it still affects Iraq's people. We want to restore people's confidence in themselves. We want them to know they can change the political situation they face."


? 2004 The Washington Post Company
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Iraqi Minister Escapes Assassination
2 hours, 31 minutes ago
By CHRISTOPHER TORCHIA, Associated Press Writer
BAGHDAD, Iraq - Gunmen opened fire Sunday on a convoy carrying Iraq (news - web sites)'s minister of public works, killing a driver and a bodyguard and injuring two others, the U.S.-led coalition said. The minister, Nisreen Berwari, was unharmed.
In another attack in the same city, Mosul, gunmen killed a Briton and a Canadian who were working as security guards for foreign electrical engineers at a power station. The ambush appeared to be part of a campaign to undermine U.S.-led reconstruction efforts in Iraq.
The attacks highlighted the tenuous security situation in Iraq's third-largest city, once a prime recruiting ground for the officer corps of Saddam Hussein (news - web sites)'s military.
Berwari was returning to Mosul from a meeting in the city of Dohuk when her convoy was attacked, said Kristi Clemens, a coalition spokeswoman in Baghdad.
Saro Qader, an official with the Kurdistan Democratic Party, described the attack as an "assassination attempt." Berwari is a member of the Kurdish party.
Iraqi police said the attack occurred around 11 a.m. in the al-Karama neighborhood of Mosul. They said the two men who were killed were both bodyguards, and that Berwari was in another car that was not hit by gunfire.
Berwari, who earned a degree at Harvard University's John F. Kennedy School of Government in 1999, is one of five Kurdish ministers in the coalition-appointed interim government. There are 20 other ministers.
Previously, Berwari was development minister in the Kurdistan regional government, and she also served with United Nations (news - web sites) organizations in Iraq.
Another female political leader, Aqila al-Hashimi, was assassinated in September. She was a Shiite member of the U.S.-appointed Iraqi Governing Council.
The slain Briton and Canadian had been assigned to protect foreign engineers working for General Electric Co., a coalition spokesman said on condition of anonymity. GE is helping rebuild Iraq's decrepit electrical infrastructure, which has suffered from war, neglect and years of sanctions. Power blackouts are frequent.
U.S. soldiers and Iraqi police sealed off the area after the shooting. Witnesses saw two partly burned bodies, clad in flak jackets, lying beside a four-wheel drive vehicle that was on fire. One man had been shot in the head.
In London, the Foreign Office said one Briton was killed. In Ottawa, the Canadian Foreign Ministry said a Canadian died. Their names were not released.
An Iraqi official at the power station in East Mosul said the slain men were protecting experts working at the station. Private security firms provide guards to many foreign companies operating in Iraq.
This month, assailants have killed other Western civilians linked to reconstruction efforts: four American missionaries working on a water project in Mosul, two Finnish businessmen in Baghdad, a German and a Dutch national working on a water project south of Baghdad, and two American staffers with the coalition shot south of the capital.
U.S. military officials in Mosul say insurgents are shifting from attacks on American troops to targeting Iraqi security forces, and most recently civilians. The shift could be partly because there are fewer American soldiers in the area, and consequently fewer U.S. targets.
The U.S. military, however, says rebels are choosing civilians targets because they are frustrated at a lack of success in attacking soldiers.
Late last year, some 20,000 soldiers with the U.S. Army's 101st Airborne Division occupied Mosul and surrounding areas. Since the 101st pulled out in February, the region around Mosul has been occupied by 8,000 U.S. troops under Task Force Olympia, which lacks the 101st's fleet of helicopters.
The new forces in the north have cut back on the number of economic development and infrastructure projects undertaken by the 101st.
In other violence in Mosul on Sunday:
_ Iraqi police said two U.S. soldiers were wounded after gunmen in a car opened fire on their military vehicle. The U.S. military said troops returned fire, killing all four "enemy forces" in the car.
_ A U.S. military Stryker vehicle caught fire after being struck by a rocket-propelled grenade, but there were no injuries, the U.S. military said.
_ Gunmen exchanged fire with Iraqi police guarding the main gate of the television station. Two policemen were injured, and the attackers fled.
_ A rocket, possibly aimed at a police station a block away, hit a classroom at a primary school while a lesson was in progress. It failed to explode, and no pupils were injured.
In Baghdad, U.S. soldiers shut down a weekly newspaper run by followers of radical Shiite Muslim cleric Muqtada al-Sadr, saying its articles were inciting violence against the coalition. The Al-Hawza newspaper will be closed for 60 days, the coalition said. Hours later, 1,000 followers of al-Sadr demonstrated against the closure, saying it violated freedom of expression.

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The Holocaust Shrug
From the April 5, 2004 issue: Why is there so much indifference to the liberation of Iraq?
by David Gelernter
04/05/2004, Volume 009, Issue 29
I HEAR AND READ ALL THE TIME about Democratic fury; evidently, enraged Democrats are prepared to do whatever it takes to rid the country of George W. Bush's foul presence. Somehow Republican rage doesn't seem quite as newsworthy (and when it does show up, the storyline is usually "Republicans Angry at Bush"). To be fair, Republicans do control the presidency and both houses of Congress, and ought to be far gone in euphoria. But they are not. There are lots of unhappy and quite a few furious ones out there, and they are not all mad at the president. Some reporters will find this hard to believe, but quite a lot of them are actually mad at the Democrats.
Consider Iraq. By overthrowing Saddam, we stopped a loathsome bloody massacre--a hell-on-earth that would have been all too easily dismissed as fantastic propaganda if we hadn't seen and heard the victims and watched the torturers on videotape. Now: There is all sorts of latitude for legitimate attack on the Bush administration and Iraq. A Bush critic could allege that our preparation was lousy, our strategy wrong, our postwar administration a failure, and so on ad infinitum . . . so long as he stays in ground-contact with the basic truth: This war was an unmitigated triumph for humanity. Everything we have learned since the end of full-scale fighting has only made it seem more of a triumph.
But Democratic talk about Iraq is dominated not by the hell and horror we abolished or the pride and joy of what we achieved. Many Democrats mention Saddam's crimes only grudgingly. What they really want to discuss is how the administration "lied" about WMDs (one of the more infantile accusations in modern political history), how (thanks to Iraq) our allies can't stand us anymore, how (on account of Iraq) we are shortchanging the war on terror. But don't you understand, a listener wants to scream, that Saddam's government was ripping human flesh to shreds? Was consuming whole populations by greedy mouthfuls, masticating them, drooling blood? Committing crimes that are painful even to describe? Don't you understand what we achieved by liberating Iraq, what mankind achieved? When we hear about Saddam and his two sons, how can we help but think of the three-faced Lucifer at the bottom of Dante's hell?--"with six eyes he was weeping and over three chins dripped tears and bloody foam," Con sei occhi piangea, e per tre menti / gocciava 'l pianto e sanguinosa bava, as he crushes human life between his teeth.
I could understand the Democrats' insisting that this was no Republican operation; "we were in favor of it too, we voted for it too, and then voted more money to fund it; we want some credit!" Those would be reasonable political claims. But if you talk as if this war were one big, stupid blunder that we are stuck with and have to make the best of--you are nowhere near shouting distance of reality; people would suspect your sanity if you were not a politician already. Instead of insisting that the war belongs to them, too, Democrats are running top speed in the other direction. Howard Dean led the way on this flight from duty, honor, and truth, but it didn't take long for most of the nation's prominent Democrats (with a few honorable exceptions) to jump aboard the Dean express--which is now, absent Dean, a runaway train.
People ask, why this big deal about Saddam? "Isn't X evil too, and what about Y, and how can you possibly ignore Z?" But we aren't automata; we are able to make distinctions. Some evil is beyond our power to stop. That doesn't absolve us from stopping what we can. All cruelty is bad. Yet some cruel and evil men are worse than others. By any standard we did right by overthrowing Saddam--and do wrong by denying or belittling that fact.
The Democrats' refusal to acknowledge the moral importance of the Coalition's Iraq victory felt, at first, like the Clinton treatment--more relativistic, warped-earth moral geometry in which the truth gradually approaches infinite malleability. Overthrowing vicious dictatorships and stopping crimes against humanity were no longer that big a deal once Republicans were running the show. It seemed like the same old hypocrisy, sadly familiar. (I will even concede, for what it's worth, that Republicans can be inconsistent and hypocritical too.)
But as we learned more about Saddam's crimes, and Democrats grew less convinced that the war was right and was necessary . . . their response took on a far more sinister color. It started to resemble the Holocaust Shrug.
I SUGGEST ONLY DIFFIDENTLY that the world's indifference to the Coalition's achievement resembles its long-running, well-established lack of interest in Hitler's crimes. I don't claim that Saddam resembles Hitler; I do claim that the world's indifference to Saddam resembles its indifference to Hitler.
The Holocaust was unique--"fundamentally different," the German philosopher Karl Jaspers wrote, "from all crimes that have existed in the past." Hitler's mission was to convert Germany and eventually all Europe into an engine of annihilating Jew-hatred. He tore the heart out of the Jewish nation. There is nothing "universal" or "paradigmatic" about the Holocaust, and next to Hitler, Saddam is a mere child with a boyish love of torture and mass murder.
Yet Saddam, like Hitler, murdered people sadistically and systematically for the crime of being born. Saddam, like Hitler, believed that mass murder should be efficient, with minimal fuss and bother; it is no accident that both were big believers in poison gas. Saddam's program, like Hitler's, attracted all sorts of sadists; many of Saddam's and Hitler's crimes were not quite as no-fuss, no-muss as the Big Boss preferred. Evidently Saddam, like Hitler, did not personally torture his prisoners, but Saddam (like Hitler) allowed and condoned torture that will stand as a black mark against mankind forever.
Hitler was in a profoundly, fundamentally different league. And yet the distinction is unlikely to have mattered much to a Kurd mother watching her child choke to death on poison gas, or a Shiite about to be diced to bloody pulp. The colossal scale and the routine, systematic nature of torture and murder under Saddam puts him in a special category too. Saddam was small compared with Hitler, yet he was like Hitler not only in what he wanted but in what he did. When we marched into Iraq, we halted a small-scale holocaust.
I could understand people disagreeing with this claim, arguing that Saddam was evil but not that kind of evil, not evil enough to deserve being discussed in those terms. But the opposition I hear doesn't dwell on the nature of Saddam's crimes. It dwells on the nature of America's--our mistakes, our malfeasance, our "lies." It sounds loonier and farther from reality all the time, more and more like the Holocaust Shrug.
Turning away is not evil; it is merely human. And that's bad enough. For years I myself found it easy to ignore or shrug off Saddam's reported crimes. I had no love for Iraq or Iraqis. Before and during the war I wrote pieces suggesting that Americans not romanticize Iraqis; that we understand postwar Iraq more in terms of occupied Germany than liberated France. But during and after the war it gradually became impossible to ignore the staggering enormity of what Saddam had committed against his own people. And when we saw those mass graveyards and torture chambers, heard more and more victims speak, watched those videotapes, the conclusion became inescapable: This war was screamingly, shriekingly necessary.
But instead of exulting in our victory, too many of us shrug and turn away and change the subject.
Young people might be misled about the world's response to the Holocaust by the current academic taste for "Holocaust studies" and related projects. It wasn't always this way.
In the years right after the war, there was Holocaust horror all over the world. The appearance of such books as Elie Wiesel's Night and Anne Frank's diary kept people thinking. But after that, silence set in. In 1981 Lucy Dawidowicz, most distinguished of all Holocaust historians, wrote of "this historiographical mystery of why the Holocaust was belittled or overlooked in the history books." I remember the 1960s (when I was a child growing up) as years during which the Holocaust was old stuff. On the whole, neither Jews nor gentiles wanted to think about it much. I remember the time and mood acutely on account of travels with my grandfather.
He was a rabbi and a loving but not a happy man. His synagogue was in Brooklyn, at the heart of an area that was full of resettled Holocaust survivors. He would visit them often, especially ones who had lost their families and not remarried. Naturally they were the loneliest. But what they suffered from most was not loneliness but the pressure of not telling. Pressure against their skulls from the inside, hard to bear. They needed to speak, but no one needed to listen.
Old or middle-aged men with gray faces and narrow wrists where the camp number was tattooed forever in dirty turquoise, living alone in small apartments: They would go on for an hour or more, mumbling with downcast eyes as if they were embarrassed--but they were not embarrassed; they were merely trying to keep emotion at bay so they could finish. Not to be cut down by emotion was the thing; they wanted to make it through to the end. So they would mumble quickly as if they were making a run for it, in Yiddish or sometimes Hebrew or, occasionally, heavily accented English. My Hebrew was inadequate and my Yiddish was worse, but I could get the gist, and my grandfather would fill me in afterward. Once an old man wanted to tell us how one man in a barracks of 40 had stolen a piece of bread (or something like that), and in retaliation the whole group was forced at gunpoint to duck-walk in the snow for hours. He didn't know the right word, so he got down on the floor to show us--an old man; but he had to tell us what had happened.
Steven Vincent went to Iraq after the war and reported in Commentary about Maha Fattah Karah, an old woman, sobbing. "I look to America. I ask America to help me. I ask America not to forget me." Saddam murdered her husband and son. That story takes me back.
My grandfather was driven. He spent years at one point translating a rabbi's memoir from Hebrew, then more years trying to find a publisher--any publisher; but no one wanted it. Holocaust memoirs were a dime a dozen, and (truth to tell) had rarely been hot literary properties in any case. Then he shopped the "private publishers" who would bring out a book for a fee. He tried hard to raise the money. He was a good money-raiser for many fine causes. But this time he failed. No one wanted to underwrite a Holocaust memoir. The book never did appear.
THE HOLOCAUST SHRUG: To turn away is a natural human reaction. In 1999 (Steven Vincent reports) the Shiite cleric Sadeq al Sadr offended Saddam--whose operatives raped Sadeq's sister in front of him and then killed him by driving nails into his skull. Who can grasp it? In any case, today's sophisticates cultivate shallowness. They deal in cynicism, irony, casual bitterness; not in anguish or horror or joy.
Lucy Dawidowicz discussed the unique enormity of the Holocaust. It destroyed the creative center of world Jewry and transferred premeditated, systematic genocide from "unthinkable" to "thinkable, therefore doable." Mankind has crouched ever since beneath a black cloud of sin and shame.
Nothing will erase the Holocaust, but it is clear what kind of gesture would counterbalance it and maybe lift the cloud: If some army went selflessly to war (a major war, not a rescue operation) merely to stop mass murder.
That is not quite what the Coalition did in Iraq. We knew we could beat Saddam (although many people forecast a long, bloody battle); more important, we had plenty of good practical reasons to fight. Nonetheless: There were many steps on the way to the Holocaust, and we can speak of a step towards the act of selfless national goodness that might fix the broken moral balance of the cosmos. The Iraq war might be the largest step mankind has ever taken in this direction. It is a small step even so--but cause for rejoicing. Our combat troops did it. It is our privilege and our duty to make the most of it. To belittle it is a sad and sorry disgrace.

David Gelernter is a contributing editor to The Weekly Standard.

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

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>> GREAT JOB PERVEZ?

Pakistan withdraws, calls mission success
By SADAQAT JAN
ASSOCIATED PRESS WRITER
A Pakistani government official, center, smiles, as he is surrounded by tribal elders after being released by foreign militants linked with al-Qaida, in Wana, Pakistan on Sunday, March 28, 2004. Pakistani troops began withdrawing from some parts of western Pakistan on Sunday after militants agreed to release captured soldiers and politicians, but officials said soldiers will remain in the area while tribal leaders negotiate the handing over of foreign militants. (AP Photo)
PESHAWAR, Pakistan -- Pakistan called its mission to chase down and kill Taliban and al-Qaida militants a success and began withdrawing troops Sunday after tribesmen along the border with Afghanistan agreed to release captured soldiers and politicians.
Officials said, however, troops would remain in the unruly western border region while tribal leaders negotiate the hand-over of other foreign militants.
Eleven soldiers were released Sunday morning and two local officials were expected to be released later in the day or early Monday, said Brig. Mahmood Shah, the regional security chief.
Another soldier escaped before he could be released, he added.
"The main objectives of the operation have been achieved. They included destroying dens, searching of homes, taking people into custody and the recovery of gadgets and equipment," Shah said.
Troops would regroup in South Waziristan's main town of Wana and remain in the area, he said.
But Shah said 500-600 suspected militants still may be hiding along the border with Afghanistan and he did not rule out using military force against them. The army would continue using a combination of military operations and talks with tribal leaders to rid the region of suspected al-Qaida forces and allies, he said.
About 10,000 Mahsud tribesmen met Sunday near Wana to help authorities track the perpetrators of an attack on an army convoy last week.
Late Saturday, military spokesman Maj. Gen. Shaukat Sultan said recently gathered intelligence - combined with eyewitness accounts - indicated that alleged terrorist Tahir Yuldash had been badly wounded and was in hiding. He said Pakistani forces were not close to capturing him.
"He might have slipped away, he's on the run," Sultan said.
Yuldash is the leader of an Uzbek terror group allied with al-Qaida called the Islamic Movement of Uzbekistan. He was previously mentioned as one of two possible "high-value targets" cornered when Pakistan's military began the sweep of South Waziristan on March 16.
Despite the apparent escape, Sultan said the operation had been successful because the military had killed 60 suspected militants and captured 163 more.
President Gen. Pervez Musharraf, a key ally of the United States, has sent 70,000 troops to the border with Afghanistan since the Sept. 11 attacks to prevent cross-border attacks - the first such deployment since independence from Britain in 1947.
U.S. and Afghan forces have deployed on the other side of the border as part of a new offensive against al-Qaida and Taliban forces there. Musharraf has said U.S. experts are working with Pakistani troops, but no American military forces have crossed into Pakistan.
"As far as al-Qaida is concerned, yes, indeed, they are in bigger numbers than we thought in that region. And we need to eliminate them. It's very clear that we will eliminate them," Musharraf said in an interview on ABC News' "This Week with George Stephanopoulos" aired Sunday in the United States.
He said tribal elders from six of the seven tribal groups in western Pakistan were cooperating with the government's efforts to capture, kill or drive out foreign extremists.
"They are cooperating with us, cooperating with the army. And I'm very sure we'll take a very hard stand, and the writ of the government will be established, and these people have to be eliminated," Musharraf said.

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Tokyo nixes extradition of alleged spy
THE ASSOCIATED PRESS
TOKYO -- A Japanese court rejected a request Monday to extradite a medical researcher wanted in the United States on charges of industrial espionage.
The Tokyo High Court turned down a request made by U.S. authorities for Takashi Okamoto, 43, a former researcher at the Cleveland Clinic in Ohio, said court spokeswoman Yukiko Morita. The court released no other details of the ruling.
Okamoto was charged in May 2001 with conspiracy, economic espionage and interstate shipment of stolen property related to Alzheimer's disease research.
According to a federal indictment, Okamoto left the United States on Aug. 17, 1999, a day after he and another Japanese man allegedly took genetic materials from a lab and left vials of tap water in their place.
Okamoto allegedly arranged for the materials to be sent to the Institute of Physical and Chemical Research, north of Tokyo. He also allegedly destroyed other biological materials.
Tokyo prosecutors took Okamoto into custody last month after Justice Minister Daizo Nozawa ordered them to start extradition proceedings. Court hearings began earlier this month.
Japan and the United States have an extradition treaty, but Tokyo only sends its citizens to face charges abroad if they have been accused of acts that are also illegal in Japan.
While Japan doesn't have any economic espionage laws, the Justice Ministry had decided Okamoto's acts constituted theft and destruction of property under Japanese law.
Okamoto has claimed his innocence, saying he didn't think his actions were criminal, according to local media reports.
He is now a doctor at a hospital on Japan's northernmost main island of Hokkaido. He resigned from the Cleveland Clinic in 1999.
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Washington Prowler
Unity Diners
By The Prowler
Published 3/29/2004 12:07:19 AM
LOSERMEN IN ACTION
Apparently attendees at the Democratic Unity Dinner in Washington last Thursday night got a look at another version of Al Gore Unleashed.
This Gore updated model is a vindictive and bitter, washed-up candidate who acts like a teen-age girl trying to impress the cool kids. For example, upon seeing the Rev. Jesse Jackson on stage, Gore made a beeline toward him and, while casting his gaze across the stage at his former running mate, Sen. Joe Lieberman, wrapped Jackson in a big hug.
"Jackson looked mortified," says an onlooker. "That kind of affection wasn't something he was looking for."
Gore then turned and walked toward Lieberman ... and simply patted him on the back. "They don't get along, for obvious reasons," says a former Lieberman campaign staffer. "Gore has never apologized for his betrayal."
But one good turn deserves another, and Gore got the stiff himself when he attempted to reach out to his former boss, Bill Clinton. Clinton, refused to step up to Gore, instead putting current presidential candidate Sen. John Kerry between him and Gore. So much for unity.
Down in the audience, similar behavior was unfolding. Sen. Tom Daschle had one of his staffer complain to DNC organizers about his seating, which placed him about three rows back in the audience during dinner. His table was not as good as the one set aside for some of Kerry's campaign staffers, including uber consultant Bob Shrum.
SANITY REIGNS
A month ago, AFSCME president Gerald McEntee was saying that his ex-golden boy, former Vermont Gov. Howie Dean, was insane. Now McEntee is getting back in bed with his nutty pal.
According to former Dean campaign sources, McEntee has committed funds in the "seven figure range" to Dean's new grassroots program. The money from AFSCME will be used to strengthen the commitment of Dean's young voting block to the Democrats and not to independents or third-party candidates in 2004.
"It's all about [Ralph] Nader," says a former Dean staffer, who is mulling an offer to rejoin Dean's operation. "There is real concern about young-voter flight to Nader or elsewhere now that Dean is gone. McEntee's money would try to shore up that support."
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Saddam betrayed by bodyguard
Saddam Hussein was finally betrayed by a relative who was one of his closest bodyguards, a BBC programme reveals.
Panorama reports that after eight months on the run, the hiding place of the ousted Iraqi leader was given away by an aide known as "the fat man".
The programme, to be broadcast on BBC One on Sunday, says Mohammed Ibrahim Omar al-Musslit gave away the secret after being arrested and interrogated.
Saddam Hussein was captured on 13 December near his home town of Tikrit.
Mr Musslit was a loyal lieutenant of Saddam Hussein. He was one of the people who accompanied the Iraqi leader as he fled Baghdad in a white Oldsmobile, as US troops entered the city on 9 April 2003.
But Panorama will reveal that he was quickly broken by interrogators after being captured in Baghdad, and led American troops to his boss just hours after being arrested in December.
No reward?
After his arrest, Mr Musslit was flown to Tikrit where he was interrogated. He was then made to point out the remote farm where Saddam Hussein was hiding
I think the US treasury gets to keep the money
Major-General Raymond Odierno
The 600 American soldiers there found nothing in the farm buildings, but discovered Saddam Hussein hiding in an underground passage.
But because he did not willingly offer the information, the man who led the Americans to Saddam Hussein's secret bunker near his home town of Tikrit will not benefit from the $25m reward that was on offer.
A senior US commander, Major General Ray Odierno, denied the source had been tortured but told the programme that he was "a shady character", adding that he believed "the US treasury gets to keep the money."
To this day the US will not reveal the identity of the man who led them to Saddam Hussein.
Key figure
Colonel James Hickey, of the 4th Infantry Division, the unit that captured him in "Operation Red Dawn" would only say that he was "a middle aged man who went pear shaped."
However, people close to Saddam Hussein confirmed to Panorama reporter Jane Corbin that it was Mr Musslit who betrayed the former Iraqi president.
Mr Musslit was a key figure in Saddam Hussein's security organisation and had been in the Fedayeen.
By the end, Mr Musslit was believed to be the only man who knew of Saddam Hussein's full movements.
Panorama: Saddam on the run will be broadcast on BBC One on Sunday, 28 March 2004 at 2215 BST
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/programmes/panorama/3572659.stm
Published: 2004/03/26 22:44:54 GMT
? BBC MMIV
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Al-Qa'ida 9/11 chief reveals US got off lightly
From The Sunday Times
March 29, 2004
IT makes a chilling picture. The mastermind behind the September 11 attacks has told interrogators that he and his terrorist nephew leafed through almanacs of US skyscrapers when planning the operation.
Sears Tower in Chicago and Library Tower in Los Angeles - which was "blown up" in the film Independence Day - were both potential targets, according to transcripts of interrogations of al-Qa'ida operations chief Khalid Shaikh Mohammed. "We were looking for symbols of economic might," he told his captors.
He recounted sitting looking at the books with Ramzi Yusuf, his nephew by marriage, who was the man behind the first World Trade Centre bombing in 1993. In that attack Yusuf succeeded only in ripping a crater into the foundations with a van bomb.
"We knew from that experience that explosives could be problematic," Khalid said, "so we started thinking about using planes."
When he was captured last March in the house of a microbiologist in Rawalpindi, Pakistan, the paunchy 37-year-old was unshaven and wearing a baggy vest. He looked more like a down-and-out than one of the most dangerous men in the world.
The interrogation reports make clear, however, that he was not only the chief planner for September 11 but also introduced Osama bin Laden to Hambali, the Indonesian militant accused of orchestrating the Bali bombing 13 months later.
To date, Khalid is the most senior al-Qa'ida member to have been caught. Until now there has been no word of where he is being held or what, if anything, he is saying.
Although the interrogation transcripts are prefaced with the warning that "the detainee has been known to withhold information or deliberately mislead", it is clear that he is talking - and that the September 11 conspiracy was much more extensive than has previously been revealed.
The confessions reveal planning for the atrocity started much earlier than anyone had realised and was intended to be even more devastating.
"The original plan was for a two-pronged attack with five targets on the east coast of America and five on the west coast," he told interrogators.
"We talked about hitting California as it was America's richest state and bin Laden had talked about economic targets."
Bin Laden, who like Khalid had studied engineering, vetoed simultaneous coast-to-coast attacks, arguing that "it would be too difficult to synchronise".
Khalid switched to two waves: hitting the east coast first and following up with a second attack. "Osama had said the second wave should focus on the west coast," he said.
Zacarias Moussaoui, a French-Moroccan who had lived in London, was sent to the Pan Am international flight school in Minnesota to train for the west coast attack, according to Khalid. His instructor alerted the FBI, however, after the Moroccan showed no interest in landing planes - only in steering them. He was arrested in August 2001.
Until now it had been widely believed that Moussaoui was meant to have been the 20th hijacker on September 11. The revelation by Khalid that he was part of a "second wave" is lent weight by the FBI's recent arrest of two other men who were allegedly part of the west coast conspiracy.
Despite the setbacks, Khalid described the September 11 attack as "far more successful than we had ever imagined".
Khalid, whose family came from Pakistan, was born in 1965 in Kuwait City, where his father was a preacher. He joined the Muslim Brotherhood as a teenager and went to the US to study engineering in North Carolina.
At that time the Afghan jihad against the Russians was in full flow. After graduating, Khalid headed for one of bin Laden's guesthouses in the Pakistani frontier town of Peshawar. He has told interrogators it was there that he first met Hambali.
In 1992 Khalid moved south to Karachi. Posing as a businessman importing holy water from Mecca, he acted as a fundraiser and intermediary between young militants and wealthy sponsors in the Gulf.
Yusuf's attempt to blow up the World Trade Centre inspired him to conceive his own operations. The first was a plot to blow up 12 American airliners over the Pacific. Both Yusuf and Hambali were involved. It failed after their Manila bomb factory caught fire. The men fled to Pakistan where Yusuf was arrested.
Undeterred, Khalid decided to start working on something "far more spectacular" for which he "hoped to persuade bin Laden to give him money and operatives". He also decided to introduce Hambali to bin Laden.
Hambali headed Jemaah Islamiah, which wanted to unite Southeast Asia under an Islamic banner.
Khalid told interrogators: "I was impressed by JI's ability to operate regionally and by Hambali's connections with the Malaysian government. He told me that his group had a training camp in The Philippines and a madrasah (religious teaching) program in Malaysia on the border with Singapore.
"In 1996 I invited Hambali to Afghanistan to meet Osama. He spent three or four days with him and it was agreed that al-Qa'ida and Hambali's organisation would work together on 'targets of mutual interest'."
Hambali, who had been operating on a shoestring, was provided with a new car, mobile phones and computers.
Bin Laden was apparently impressed by Khalid's networking and ideas and made him head of al-Qa'ida's military committee. From then on he was a key planner in almost every attack, including the simultaneous bombings of the US embassies in Kenya and Tanzania in 1988. Bin Laden dubbed him The Brain.
The big challenge was to attack Americans on their own soil. Initially Khalid proposed leasing a charter plane, filling it with explosives and crashing it into the CIA headquarters. But the plan expanded.
Bin Laden pointed out that on a visit to the US in 1982 he had been to the Empire State Building in New York and was astonished by how unprotected such key landmarks were.
A committee, known as the shura, was formed comprising bin Laden, Khalid and four others. It met at what was known as the war room in bin Laden's camp outside Jalalabad in Afghanistan. The plan for a two-pronged attack was formed. "We had scores of volunteers to die for Allah but the problem was finding those familiar with the West who could blend in as well as get US visas," Khalid told his interrogators.
Two Yemenis and two Saudi pilots, Nawaf al-Hazmi and Khalid al-Midhar, were selected and given commando training in Afghanistan. "All four operatives only knew that they had volunteered for a martyrdom operation involving planes," Khalid said.
In 1999 the two Yemenis were refused US visas; but a few months later four jihad recruits from Hamburg arrived in Quetta, Pakistan. Led by Mohammed Atta, an Egyptian, they had originally planned to go to Chechnya to fight the Russians, but a former mujaheddin in Germany had given them an introduction to bin Laden.
After meeting the al-Qa'ida leader in Kandahar, they delivered the baia, the oath of allegiance required to gain access to his inner circle, and were invited to his Ramadan feast. He told them that they had been selected for a top-secret mission and promised that they would enter paradise as martyrs.
They were instructed to go home and destroy their passports so their trip to Pakistan would be undetected. They were then to shave off their beards, go to the US and obtain pilot's licences.
Khalid told interrogators he had provided them with a special training manual which included information on how to find flight schools and study timetables.
Three of the four were granted US visas and travelled to the US. The fourth, Ramzi Binalshibh, failed and returned to Afghanistan, where he communicated with them through internet chat rooms.
In the spring of 2000, after a planning meeting in Kuala Lumpur, bin Laden scaled back the plan from two-prong to two-wave because they had been unable to get enough potential pilots into the US. Moussaoui succeeded in entering the US, but the order went out for potential recruits who were not Arab, Khalid told his captors.
A date was set for the first-wave attack, codenamed Porsche 911, and a message went around the world for followers to return to Afghanistan by September 10.
The messages were intercepted by several Western intelligence agencies but none apparently realised their significance.
When the suicide planes struck on September 11, al-Qa'ida seems to have been taken by surprise - both by the success of the attacks and by the US reaction.
"Afterwards we never got time to catch our breath, we were immediately on the run," Khalid said.
He said the war on terrorism and the US bombing of Afghanistan completely disrupted their communications network. Operatives could no longer use satellite phones and had to rely on couriers, although they still used internet chat rooms.
"Before September 11 we could dispatch operatives with the expectation of follow-up contact but after October 7 (when the bombing started) that changed 180 degrees. There was no longer a war room or shura and operatives had more autonomy."
He told interrogators that he remained in Pakistan for 10 days after September 11, then went to Afghanistan to find bin Laden: "I went to Jalalabad, Tora Bora, looking for him and then eventually met him in Kabul."
The al-Qa'ida leader instructed him to continue operations - with Britain as the next target.
"It was at this time we discussed the Heathrow operation," Khalid said. "Osama declared (British Prime Minister Tony) Blair our principal enemy and London a target."
He arranged for operatives to be sent from Pakistan and Afghanistan to London, where surveillance of Heathrow airport and the surrounding areas began. However, he claimed, the operation never got beyond the planning stages. "There was a lot of confusion," he said. "I would say my performance at that time was sloppy."
One priority was to get Hambali out of Afghanistan. In November 2001, Khalid arranged for him to go to Karachi. There he gave him $US20,000 and a false Indonesian passport with which he could travel to Sri Lanka and on to Thailand, from where he would help to organise the Bali nightclub bombing the following year. They kept in touch through Hambali's younger brother, who was in Karachi.
The net was closing in around Khalid. Another shura member, Abu Zubayda, was arrested in Faisalabad in March 2002. Six months later Binalshibh was seized in a Karachi apartment he shared with Khalid.
Khalid escaped, but his flight came to an end in the early hours of March 2 last year in Rawalpindi. Questioned for two days by Pakistan's military intelligence, who say he did nothing but pray repeatedly, he was flown blindfolded to Bagram, the US base in the mountains above Kabul.
It is not clear how long he was held there, nor what methods were used to make him talk. Afghans freed from Bagram claim to have been subjected to sleep deprivation and extremes of hot and cold. There have also been reports of truth drugs.
? The Australian
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>> KPMG GOOD TURN?

'Massive scam' in Iraqi oil program
From The Sunday Times
March 29, 2004
AN investigation into the United Nations oil-for-food program in Iraq is to name more than 200 people, including British and European politicians, businessmen and senior UN officials, who may have profited from Saddam Hussein's regime.
The inquiry is being conducted by accountants KPMG and international law firm Freshfields Bruckhaus Deringer on behalf of the US-appointed Iraqi Governing Council. The KPMG team has previously traced assets seized by the Nazis during the Holocaust.
The investigators claim tens of billions of dollars may have been improperly distributed under the auspices of the oil-for-food program.
The publication of the report, probably in May, is likely to embarrass the UN. It stands accused of failing to properly police the oil scheme, while senior officials allegedly took kickbacks.
The scheme, set up in 1995, allowed the Iraqis to sell oil worth more than $US47 billion ($62 billion) in return for food and other essential humanitarian supplies.
But investigators say Iraqi documents suggest millions of barrels of oil were given as bribes for supporting the Hussein regime.
KPMG is also investigating claims that bribes were paid to UN staff and that food unfit for human consumption was traded for oil.
The report will for the first time identify everybody who was allegedly allocated oil and others who might have acted improperly under the scheme. Further investigation will establish how many were profiting illegally from the arrangement, although some were legitimate traders.
The investigation into the scandal is being overseen by Claude Hankes-Drielsma, a former chairman of the management committee of Price Waterhouse who is now advising the Iraqi council.
In a letter to UN Secretary-General Kofi Annan earlier this month, Mr Hankes-Drielsma said: "The UN failed in its responsibility to the Iraqi people and the international community at large.
"It will not come as a surprise if the oil-for-food program turns out to be one of the world's most disgraceful scams and an example of inadequate control, responsibility and transparency, providing an opportune vehicle for Saddam Hussein to operate under the UN aegis to continue his reign of terror and oppression."
The KPMG team is trawling through documents held in several Iraqi government departments, including the oil ministry in Baghdad. Investigators are interviewing the Iraqi civil servants who reportedly signed and compiled the documents to verify their authenticity.
After the report is published, a second phase of the investigation will trace what happened to the allocated oil, where and if it was sold, how much money was made and by whom.
"Many on the list may be absolute bona fide oil traders. But there are people on the list who have been allocated oil and you have to ask why," Mr Hankes-Drielsma said.


? The Australian


Why world can't rest on retirement
By Frances Cairncross
March 29, 2004
SOMETHING unprecedented and irreversible is happening to humanity. This year or next, the proportion of people aged 60 or over will surpass the proportion of under-5s. For the rest of history, there are unlikely ever again to be more toddlers than grey heads.
Already those aged 65 and over, who throughout recorded time have rarely accounted for more than 2-3 per cent of most countries' people, make up 15 per cent of the rich world's inhabitants.
So this is the start of what the Japanese (who will have a million centenarians by mid-century) call the Silver Century. The rise in the proportion of the world's old will be the century's defining demographic trend.
In some countries it may also determine the nature of politics, rates of economic growth (ageing countries will have slower rates of growth per head than those with younger populations) and global clout.
In fact, three trends are running in parallel, each at a different pace. The first is a bulge in retirement, which will become noticeable in just over a decade.
The older members of the US baby-boom generation are due to turn 62 (the minimum age at which social security allows early retirement) in 2008.
But the generation, like a pig in a python, will guarantee an unusually large proportion of old folk - and then of very old folk - in the populations of most rich countries in this century's middle years.
Its impact will be aggravated by a second trend: the widespread fall in fertility rates.
In most countries women on average are not having enough babies to replace the people who die. In some countries, mainly in continental Europe and Japan, birth rates have been below replacement for a quarter of a century. When the baby boomers retire, the size of the working population will plummet. That in itself is worrying enough. But there is a third problem: the old spend much more time in retirement than ever before. Life expectancy continues to rise, yet people are drawing their pensions earlier and earlier.
A century ago, most old people worked almost up to the end of their days. Now, by the age of 65, only 16 per cent of men are still in the workforce in the US and only 4 per cent in continental Europe.
Thus, a larger generation of old folk than ever before will need support for longer than ever before from a population of working age that is shrinking continuously in absolute size for the first time since the Black Death.
And the level of that support is unprecedented. The triumph of Europe's welfare state and the US's social security system has been more or less to eradicate poverty among the old. All rich countries have health insurance systems with near-universal coverage for the retired.
The cost of these benefits, in effect, falls on those in work. This has prompted books with scary titles, such as The Coming Generational Storm.
Moreover, if things look bad in the US and worse in continental Europe, they will one day look calamitous in some parts of the developing world. There, the passage of the pig within the python will be even more rapid.
Countries as diverse as Brazil, Iran and Turkey will all be below replacement rate within 15 years.
China's huge Red Guard generation - its equivalent of the US's baby boomers - reaches retirement age around 2015.
Meanwhile, thanks to China's one-child policy, the fertility rate has plunged from six or seven children per woman in the 1960s to below replacement rate.
In a decade's time, many countries thus start to face a huge problem: how to support a vastly larger population of old folk.
There are only three ways to provide income in old age: one, to store goods for later consumption, which in practice doesn't work (just try storing a hip replacement operation); two, to exchange current production for claims on future production, by saving or by extracting promises from your children or the government; and three, to go on producing yourself.
The promises governments have made to people retiring today are too large to be met in full. As a result, people will have to work longer, and retire later, than they do now. And the old will have to insure themselves for more of the cost of healthcare.
Fortunately there is a time window, of about a decade, during which the population of working age will be at a historic high. OECD projections show that the impact of retiring baby boomers will not begin to be felt until the next decade, and will culminate in 2025-35.
So governments have a chance - but one that they must grab fast.
It will not be easy. The notion of retirement - an abrupt end to paid employment - is relatively recent but has been hugely popular. Cutting it back is expected to cause uproar.
Massachusetts Institute of Technology economist Dora Costa, who wrote The Evolution of Retirement, points out that people began to reduce the length of their working lives as soon as they could afford to do so, and long before generous social benefits were widely available.
Not only do the old live longer than ever; the range of pleasures available in retirement, such as foreign holidays and home entertainment, are more varied and less expensive than ever before.
The longer that countries postpone the steps needed to make retirement sustainable, the more abrupt and damaging the transition will be. But given the will, change is possible.
Pioneering work by two US economists, Jonathan Gruber and David Wise, has shown that retirement decisions are greatly influenced by the structure of pensions and other benefits. If it pays to stop working, people will. Driven by fiscal desperation, governments will increasingly steel themselves to alter the way benefits work.
Once that change begins, there will be jobs for those who want them. When the baby boomers start to retire in large numbers, they will empty out workplaces - such as public services - that now have lots of staff in their 50s. To replace them, employers will have to come up with the sort of flexible deals they once used to attract women back to work.
Indeed, the workplace revolution that lies ahead may be very like the one that, in the course of the 1970s and 80s, brought millions of mothers into the job market.
Since then, the workplace has been feminised; in future it will be grizzled. A quarter of a century from now, retirement will look different: a mix of work and gardening, rather than gardening alone. For older people, work may then offer some of the charms that have lured so many women into the job market: stimulus, companionship and the freedom from worry that extra money can bring.
Frances Cairncross is management editor of British news magazine The Economist.


? The Australian

>> AHEM...

'Let it happen' - Richard Clarke helped bin Laden family flee United States after 9/11
As counterterrorism czar, Richard Clarke helped the al Qaeda leader's family out of the US.
Former National Security Council counterterrorism czar Richard Clarke approved the evacuation of Osama bin Laden's relatives from the United States after the September 11, 2001 attacks.
"It was Clarke who personally authorized the evacuation by private plane of dozens of Saudi citizens, including many members of Osama bin Laden's own family, in the days immediately following September 11," the Boston Herald notes in a March 26 editorial.
According to the Herald, "Clarke's role was revealed in an October 2003 Vanity Fair article. 'Somebody brought to us for approval the decision to let an airplane filled with Saudis, including members of the bin Laden family, leave the country,' Clarke told Vanity Fair. 'My role was to say that it can't happen unless the FBI approves it. . . And they came back and said yes, it was fine with them. So we said "Fine, let it happen."'
"Vanity Fair uncovered that the FBI never fully investigated the passengers on those privately chartered flights (one of which flew out of Logan International Airport after scooping up a dozen or so bin Laden relatives.) But Clarke protested to Vanity Fair that policing the FBI was not in his job description."


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Hamas linked to area housing


By Jerry Seper
THE WASHINGTON TIMES


The terrorist organization Hamas invested millions of dollars during the past decade in real-estate projects nationwide, including in suburban Maryland, as part of a scheme to raise cash to fund acts of terrorism, records show.
The investments -- involving the construction of hundreds of new homes, including many in Oxon Hill -- were handled through BMI Inc., a defunct Secaucus, N.J., investment firm founded by Soliman S. Biheiri, an Egyptian and Hamas supporter, according to a newly released sentencing declaration by U.S. Immigration and Customs Enforcement (ICE).
In the declaration, ICE senior agent David Kane said Biheiri, sentenced in January to a year in prison on immigration violations, used the firm beginning in 1991 to raise "large amounts of money" through investments and as a front to route cash from more than 100 bogus Hamas charities and businesses, most of which operated in Virginia.
The Oxon Hill investment included a project known as Barnaby Knolls, financed by a BMI subsidiary BMI Real Estate Development Inc., the declaration said. Begun in January 1991, it involved the construction of 57 homes in the working-class Prince George's County neighborhood.
ICE agents refer to the project as "Hamas West," although no one living in the subdivision has been identified as being involved in the scheme or with the terrorist organization that is pursuing a Palestinian state.
One of the principle BMI investors in the Oxon Hill project, according to the Kane declaration, was Mousa Mohammad Abu Marzook, the self-proclaimed political leader of Hamas detained by U.S. authorities in 1995 on suspicion of being involved in terrorist activities. He later was expelled to Jordan, where he was deported to Syria for his ties to Hamas.
The U.S.-educated Marzook, who had lived in Falls Church, has been named by Israeli authorities on charges of murder, attempted murder, manslaughter and conspiracy in truck and bus bombings in Israel that killed 14 and injured 56. He also is accused of ordering the killing of 37 others in Hamas attacks in Israel.
According to the declaration, Marzook told a confidential U.S. Customs Service informant during a May 1991 meeting in Ruston, La., that he "has and currently is investing money with BMI," including a real-estate project in Oxon Hill, where he intended to build "more than 56 homes." In the tape-recorded conversation, Marzook noted that the suburban Maryland site was close to Washington.
According to the declaration, more than $1 million was invested by BMI in various real-estate projects, many of which are described but not identified.
The declaration said hundreds of thousands of dollars invested in the projects was returned to investors or were re-invested in other real-estate developments, with much of the cash being routed through banks in Virginia and New Jersey to Dubai in the United Arab Emirates. It said significant amounts of cash obtained in the real-estate ventures were used "in furtherance of Hamas terrorist operations."
It was a U.S. investigation into Marzook's financial activities in this country that led to Biheiri, BMI and Ptech, a Boston-based computer software firm raided by customs agents in December 2002, authorities said. They said Biheiri and Yasin Qadi, a key BMI investor, were the primary Ptech financiers.
Qadi, a Saudi multimillionaire, was listed by the Treasury Department in 2002 as a terrorist and is thought by authorities to have diverted millions of dollars to Osama bin Laden's al Qaeda network through various charitable organizations.
Biheiri was a key figure in a scheme using private companies and interrelated Islamic charities operating out of business fronts in Herndon and Falls Church to divert millions of dollars to global terrorists, including Hamas and al Qaeda.
In 2002, federal agents raided 14 Islamic businesses in Virginia, seizing computers, bank statements and other documents in a customs investigation known as "Operation Green Quest." That probe focused on what authorities called a "financial relationship between" BMI and a Herndon corporation Sana-Bell Inc.
Authorities said Sana-Bell existed to generate funds for a Falls Church-based charity known as the International Islamic Relief Organization (IIRO). In an affidavit filed in connection with the Green Quest investigation, Mr. Kane said the CIA listed the IIRO as having "extremist connections" to Hamas and Al-Gamaa Al-Islamiya, the Egyptian terrorist organization that served as a precursor to al Qaeda.
Hamas was designated by the State Department as a terrorist organization in 1991. Although the number of hard-core members is unknown, supporters and sympathizers have been placed in the tens of thousands. Much of its fund raising takes place in the United States.

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A dangerous stalemate in Venezuela



Venezuelan President Hugo Chavez has been able to relegate a recall drive on his government to a kind of bureaucratic netherworld. This maneuvering hasn't stanched mounting tensions, though, and may well lead to a series of violent demonstrations. Such a conflict would test the ability of the regional players, such as the Organization of American States (OAS) and Brazil, to deal with a crisis.
At issue is a petition drive held last year calling for a recall referendum on the Chavezgovernment.Recently, Venezuela's electoral chamber of the Supreme Court cleared the way for a recall vote by finding that an electoral committee -- created to oversee the referendum drive -- was wrong in rejecting 876,000 signatures on mere technicalities. This gave the opposition more than the 2.43 million signatures needed to hold a referendum. But on Tuesday, the constitutional chamber of the court -- which is headed by Ivan Rincon, a staunch Chavez ally -- rejected the jurisdiction of the electoral chamber. That decision can be appealed to the full court, which is also headed by Mr. Rincon.
The current impasse helps Mr. Chavez run out the clock. According to the Venezuelan constitution, if a referendum isn't held by Aug. 19, then the Venezuelan people could vote against the Chavez government in a recall, but his vice president would remain in charge for the current term. Given the recent bureaucratic gyrations, it is highly unlikely a referendum could be held by the August deadline. In either scenario, "the opposition will probably react by trying to force [Mr. Chavez] out of power in a less formal way," said Ricardo Amorim, head of Latin America Research at IDEAglobal. This would probably lead to "confrontation on the streets, with very likely people getting killed," he added. Although it is unlikely such a confrontation would cause the same economic trauma as the general strike called at the end of 2002, it could still reverse Venezuela's oil-driven rebound. However, such a crisis is not expected to have any substantive impact on the global oil market.
Brazil, other Latin American countries and the United States should make clear to Mr. Chavez that his government could face international sanction should the OAS denounce the referendum process. The OAS must be the arbiter of the legitimacy of the process. Should Mr. Chavez abide by his obligations and prevail, the opposition must be firmly told that its efforts to unseat him before the 2006 elections have no backing.
Should the parties delay in alerting Mr. Chavez that they are unified in supporting whatever conclusions the OAS reaches, Mr. Chavez and his supporters could become entrenched in positions they may be unwilling to reverse for political reasons. Applying some pressure on Mr. Chavez now could yield stability for the country and the region.


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Venezuela forces tortured protesters -ombudsman
CARACAS, Venezuela, March 25 (Reuters) - Venezuelan security forces tortured some protesters detained during recent anti-government demonstrations, but did not shoot and kill demonstrators, the state ombudsman said on Thursday.
In a report to the National Assembly, German Mundarain, a state official who investigates complaints against public authorities, said nine civilians were killed in street clashes between troops, police and opposition protesters between Feb. 27 and March 5 in Caracas and other cities.
Human rights groups have accused President Hugo Chavez's government of using excessive force to control the protesters, who were demanding that Chavez submit to a recall referendum.
They cited cases of shootings, beatings and torture.
The left-wing president, who is resisting the opposition vote petition, has denied there were rights abuses, condemned the pro-referendum protesters as armed subversives and praised the actions of his security forces.
Mundarain, who has been repeatedly accused by the opposition of being biased in favor of the government, said 193 people were injured during the disturbances and 513 were detained, although most were quickly released.
"These detentions gave rise to cases in which some officers went beyond the legitimate use of force," he said in the report, citing seven cases of torture and 17 of "cruel, inhumane or degrading treatment."
Human rights groups said detainees were subjected to severe beatings, burnings, electric shocks and mock executions.
The ombudsman urged the government to investigate these cases and prosecute those responsible if necessary, but also accused opposition leaders of "instigating violence" and said troops and police were fired on.
Mundarain said no deaths could be attributed so far to security forces because none of the deadly shooting injuries were caused by the regulation automatic rifles they carried.
Opposition leaders and a local human rights group put the death toll at 14, and cite eyewitness reports that troops killed some protesters. Witnesses say unidentified civilian gunmen also opened fire.
Opponents of former paratrooper Chavez, who was elected in 1998, accuse him of becoming increasingly dictatorial and repressive. He dismisses his enemies as U.S.-backed "oligarchs" trying to end his "revolution" seeking to fight poverty in the world's No. 5 oil exporter.

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>> CONGRESS FIDDLES...


Congressional talks on pension plan stall

ASSOCIATED PRESS
House and Senate negotiators yesterday hit an angry impasse over legislation that could save employers billions of dollars, with just days left before companies must begin making their quarterly pension payments.
There were no immediate plans to revive negotiations on the bill, which would provide employers two years of relief on payments they make into their pension plans. During that interval, Congress would work on long-term legislation to ensure viability of the pension system and retirement incomes of American workers.
Rep. John A. Boehner, Ohio Republican and chairman of the House Education and the Workforce Committee, said Democrats had rejected a compromise offer that "was as far as we could go."
Democrats, led by Sen. Edward M. Kennedy, of Massachusetts, put the blame on the White House.
Mr. Kennedy said the Bush administration leaned on Republicans to resist help for union-based multiemployer pension plans, which he said "reflects an ideological viewpoint."
The deadlock complicates efforts to pass a compromise bill next week, before Congress leaves for its spring recess, and dims hopes that companies sponsoring single-employer plans will have new guidelines before April 15, when many have to make quarterly contributions.
The two sides are in general agreement on single-employer plans, which face the most serious financial problems and are the main focus of the bill.
The bill would determine a new corporate bond-based interest rate that would be used for the next two years to replace a formula, based on a very low interest rate, that has caused contributions to soar.
The Pension Benefit Guaranty Corp. (PBGC), a government agency that insures the pensions of about 44 million American workers, estimated the new rate would save companies $80 billion, which could be used for new hiring and economic expansion and could save some plans from bankruptcy.
Without the fix, companies "are going to have to divert money that they could otherwise put back in their business," said Dorothy Coleman, vice president for tax policy at the National Association of Manufacturers. "This is a critical issue to our economy."
Asghar Alam, U.S. retirement practice leader at Mercer Human Resource Consulting, wrote the negotiators this week that, without quick action, companies may not be able to meet the contribution deadline. That, Mr. Alam wrote, would pose a risk to companies that they would contribute cash that would not be deductible or that they would face tax penalties or federal action by failing to contribute enough.
"We urge you to begin that effort without allowing any more blows to be dealt to the traditional plans that have weathered so much in the past few years," Mr. Alam said.
The main stumbling block is Senate language that would allow the nation's 1,700 multiemployer plans to defer losses over the next two years. The administration objected, saying that would encourage underfunding of plans, and threatened to veto the bill unless that provision was eliminated.
Mr. Boehner said Republicans offered a compromise yesterday that would help multiemployer plans with the greatest financial need, which Republican aides said would be accessible to significantly fewer than 20 percent of all plans.
Rep. Robert E. Andrews, New Jersey Democrat, said that would help fewer than 10 percent of plans, and "that was not acceptable."
Mr. Kennedy attributed the deadlock to intransigence, arbitrary interference and "punitive, antilabor provisions" from the White House.
Multiemployer plans, which cover about 9 million of the 44 million workers covered by the PBGC, are usually operated jointly by labor and management in such fields as construction and trucking.
The General Accounting Office, the investigative wing of Congress, released a report yesterday that said multiemployer plans, after two decades of relative stability, "have suffered recent and significant funding losses" because of stock market declines and poor economic conditions. Multiemployer plans are now underfunded by $100 billion, up from $21 billion in 2000.
In addition to general accord on single-employer plans, the negotiators were close on the third part of the legislation; those would reduce for two years what airlines and steelmakers with underfunded pension plans must pay into a required catch-up fund.

A KNIGHT RIDDER INVESTIGATION

Air Force let Boeing rewrite terms of tanker contract
BY JOSEPH L. GALLOWAY
Knight Ridder Newspapers
WASHINGTON - The Air Force gave the Boeing Co. five months to rewrite the official specifications for 100 aerial refueling tankers so that the company's 767 aircraft would win a $23.5 billion deal, according to e-mails and documents obtained by Knight Ridder.
In the process, Boeing eliminated 19 of the 26 capabilities the Air Force originally wanted, and the Air Force acquiesced in order to keep the price down.
The Air Force then gave Boeing competitor Airbus 12 days to bid on the project and awarded the contract to Boeing even though Airbus met more than 20 of the original 26 specifications and offered a price that was $10 billion less than Boeing's.
The Boeing tanker deal has been under investigation since it became public two and a half years ago and has been suspended pending the outcome of the probes.
But the e-mails and other documents show just how intent the Air Force was on steering the deal to Boeing, even though Airbus' tankers were more capable and cost less.
In one document, Bob Gower, Boeing's vice president for tankers, noted that one objective in rewriting the specifications was to "prevent an AoA from being conducted." "AoA" stands for "analysis of alternatives" or, in essence, a look at serious competitors.
Among the original Air Force requirements Boeing eliminated was that the new tanker be equipped to refuel all the military services' aircraft, refuel multiple aircraft simultaneously, and carry passengers, wounded troops and cargo. Boeing also eliminated an Air Force requirement that the new tankers be at least as effective and efficient as the 40-year-old KC-135 tankers they would replace.
Sen. John McCain, R-Ariz., demanded the Boeing documents in his role as chairman of the Senate Commerce Committee. Senate investigators made the Boeing documents available to Knight Ridder.
Air Force Undersecretary for Acquisitions Marvin Sambur defended the Boeing deal. "This was not a competitive bid process," he said. "The Air Force was ordered by Congress to work with Boeing on the new tanker program."
Sambur was referring to a line item inserted into the appropriations bill in 2001, after the Sept. 11 attacks, by Sen. Ted Stevens, R-Alaska, which said the Air Force should lease 100 767s from Boeing to be used as tankers.
The bill passed the Senate over the objections of McCain and other senators. After the bill became law, McCain, in a committee hearing where Air Force Secretary James Roche was testifying, criticized Roche for an uncompetitive deal, and Roche agreed to conduct a competitive bidding.
The Air Force then put out a request for information to Boeing and Airbus, but by then Boeing and the Air Force had made arrangements that ensured Boeing would win.
Sambur also confirmed that the first 100 Boeing planes would be able to refuel only one plane at a time and would be able to refuel only Air Force planes.
The Boeing deal provides for a refueling capability for Navy, Marine and Special Operations aircraft "in the second spiral of development," Sambur said. Retrofitting the first 100 planes to do so would be at additional cost to the Air Force, he said.
But Doug Kennett, a Boeing spokesman in Washington, said that the first 100 tankers would be able to refuel Navy, Marine and allied aircraft one at a time.
He also said the Air Force turned Airbus down on failure to meet several specifications. The Airbus aircraft was larger than what the Air Force wanted and at the time Airbus did not have the specific type of refueling boom required by the Air Force, Kennett said.
Other sources said Boeing would have to redesign the wings of the 767 to add the ability to refuel more than one plane at a time. That cost also would be additional to the Air Force.
Politics has played a heavy role in the Boeing deal. House Speaker Dennis Hastert, R-Ill., whose state is home to Boeing headquarters, and Democratic Rep. Norman D. Dicks, who represents the state of Washington, where a key Boeing production plant is located, lobbied the White House on the deal.
Boeing and the Air Force also lobbied for the deal, and President Bush designated his chief of staff, Andrew Card, as the point man on the issue.
The Office of Management and Budget and other independent agencies criticized the tanker deal as too expensive and unneeded.
Card intervened and ordered them to move ahead with the Boeing deal.
White House spokesman Claire Buchan said Card sought to mediate the contract dispute without taking sides.
"There were disagreements among the Air Force, the DOD (Department of Defense) and the OMB. His role was to ensure that all sides were heard, and that the military's needs were met, and that the taxpayers got the best value for their money," she said Saturday.
Boeing e-mails indicated that Card was primarily interested in how many jobs the contract would create: Boeing claimed upwards of 28,000, but Roche, the Air Force secretary, in a letter to the White House upped the ante to 39,000 new jobs.
"This was a negotiation between the Air Force and Boeing; they weren't giving it to Airbus," said Steven Schooner, co-director of the Government Procurement Law Program at George Washington University. "It definitely lends support to the generally accepted reflection that this was never intended to be an open competition.
"In a competitive procurement, you don't let one of the competitors write this because it gives them a competitive advantage," Schooner said.
Senate investigators have plowed through some 8,000 pages of Boeing documents that were so embarrassing and revealing that the company last year fired one of its vice presidents, Darleen Druyun. Druyun had been an Air Force acquisitions officer involved in negotiations on the tanker deal. Boeing also fired its chief financial officer, who had hired Druyun. Boeing chairman and chief executive Phil Condit also left the company in an attempt to help Boeing put the scandal behind it and get the deal back on track.
McCain - who's led a two-year fight against what he considers both a bad deal for the government and an unnecessary deal for the Air Force - pointed out in a letter to Department of Defense Inspector General Joseph Schmitz earlier this month that the Air Force in 2001 developed a draft Operational Requirements Document (ORD) with 26 specifications for the new tanker aircraft, then gave the document to Boeing.
The Air Force's minimum requirements were subsequently reduced to only seven - and Boeing tailored the specifications to the airplane the company had on hand. The first 100 planes can only be used to refuel Air Force fighters and bombers.
The rewritten document was so thoroughly tailored to Boeing's wish list that when it was briefed to the Pentagon's Joint Requirements Board in July 2002 it was actually titled the "KC-767 ORD."
A board member's memo on the briefing said the operational requirements documents "should not be written for a specific aircraft but rather for a capability" and directed the title to be changed so as not to identify a particular aircraft.
The Air Force changed the name, but not the specifications.
Schmitz is set to release his audit report within the next week. It's the first of several investigations of the Boeing deal, including one by federal prosecutors.
A draft of the audit report, leaked earlier this month to Bloomberg News, said the Boeing contract was flawed and may need to be renegotiated because of "unsound acquisition and procurement practices." But Schmitz could find "no compelling reason" to kill the deal.
His report also questions whether the government should be leasing any of the aircraft, because the cost of leasing a Boeing 767 tanker is greater than the cost of buying one at $138.5 million each. The deal, as presently structured, would have the government lease 20 of the tankers and buy 80.
Schmitz told Knight Ridder that the audit report, once proprietary and source information is removed, will be released to the public. He added that his office has initiated an investigation "into related matters." An investigation by the inspector general involves law enforcement, while an audit looks into fiscal practices.
The Schmitz audit report is certain to generate fresh outrage on Capitol Hill, resulting in new hearings and renewed demands for the Air Force to hand over its internal documents on the Boeing deal, which it has been refusing to do for nearly a year on what one Senate investigator called "very shaky grounds."
McCain, who also sits on the Senate Armed Services Committee, is pressing the committee to force the Air Force to hand over its internal documents as well.
Sambur said that the decision to withhold the internal documents "is taken at a much higher level than the Air Force. It is a very serious decision. If everyone knew that their e-mails were subject to this kind of scrutiny no one would use it to debate with their colleagues and develop positions. They would watch every word they write."
An Airbus spokesman told Knight Ridder that if the aerial tanker contract was re-bid, the Airbus group would not only underbid Boeing again, but it would also agree to build the aircraft in the United States.
A federal prosecutor in the Eastern District of Virginia has been investigating allegations that Druyun simultaneously conducted negotiations on the tanker deal for the Air Force while negotiating with Boeing for a job when she retired after 33 years with the Air Force.

(Knight Ridder correspondents Seth Borenstein and Ron Hutcheson contributed to this report.)


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>> GENERICS 2...


Bush's AIDS Program Balks at Foreign Generics
U.S. Insistence on More Tests Complicates Rollout
By David Brown
Washington Post Staff Writer
Saturday, March 27, 2004; Page A03
The Bush administration is requiring that foreign-made generic AIDS drugs undergo further evaluation before they are used in its $15 billion global AIDS program, even though the same pills have passed muster by the World Health Organization and other international health groups.
Announced three weeks ago to the first organizations to get money through the Bush program, the decision is already complicating the rollout of the enormously ambitious President's Emergency Plan for AIDS Relief. That plan, which goes by the acronym PEPFAR, aims to put 2 million people in 14 African and Caribbean countries on life-saving antiretroviral therapy over the next five years.
The decision to spend U.S. funds only on brand-name drugs until foreign generics are studied further has angered AIDS activists. They see it as an effort to protect the U.S. pharmaceutical industry and undercut, at least symbolically, the burgeoning offshore generic drug industry.
"They are trying to hand the U.S. global AIDS plan over to Big Pharma," said Sharonann Lynch of the group Health GAP. "Look at the leg up that brand-name drugs are getting, courtesy of George Bush."
PEPFAR officials say they are only showing an abundance of caution as the United States government commences paying for lifelong medical treatment for millions of noncitizens, most of them in Africa.
"If in two or three years we have drug resistance as a result of a therapy that we introduce, we will have lost the continent in terms of our ability to treat," said Mark R. Dybul, an AIDS researcher from the National Institutes of Health now assigned to the Office of the U.S. Global AIDS Coordinator, at the State Department.
" 'Good drugs' isn't good enough. Because of the risk of resistance, we need the highest possible quality drugs to avert a disaster on the continent," he added.
Several experts believe the policy could have two possible effects.
It could delay initiating antiretroviral therapy in some AIDS patients in the developing world. Alternatively, it might require some of them to start taking more expensive brand-name pills and then switch to generic equivalents in six months to a year.
Even at the deep discounts offered by their makers, brand-name drugs in most cases are about three times the price of generics. And even if the period in which more expensive drugs are used is short, the policy could sow confusion in the minds of newly treated AIDS patients and complicate the operation of newly established AIDS clinics.
This is especially true in countries getting money not only from PEPFAR but also from sources such as the Global Fund for AIDS, Tuberculosis and Malaria, which endorses the pills that PEPFAR now prohibits.
"It is hard to simplify [an AIDS treatment system] when the Americans say: Let's do it with different drugs and a separate procurement system," Stephen Gloyd, a physician at the University of Washington, said. "It has a potential negative effect on the ground. It's not just an issue of buying more expensive drugs."
Through an organization called Health Alliance International, Gloyd is helping set up treatment programs in Mozambique with about $3 million from PEPFAR.
Practically speaking, the main drug that PEPFAR recipients will not be able to use immediately is a "fixed-dose combination" of three antiretroviral drugs -- stavudine, lamivudine and nevirapine -- made by several companies in India.
Sold as Triomune, Triviro and other names, it comes in a single pill and is taken twice a day. A year's supply can cost from $136 to $263. Taken as separate pills bought at a discount, this combination costs $559 a year.
The combination is one of four that World Health Organization experts recommend in the guidelines for the "3 by 5" program -- WHO's separate effort to help put 3 million people in poor countries on antiretrovirals by the end of 2005. In practice, about 90 percent of people who have never taken AIDS drugs are expected to start with it.
PEPFAR's prohibition against using this unusually handy pill arises from the requirement that AIDS drugs bought through the U.S. program must be "approved by a stringent regulatory authority or otherwise demonstrate quality, safety and efficacy at the lowest possible cost," according to guidelines issued in December. In practical terms, that means drugs approved by the Food and Drug Administration (FDA) -- this country's "stringent regulatory authority" -- or through other mechanisms the PEPFAR may set up.
Several years ago, WHO set up a system to help countries shop wisely for drugs used to treat the three big infections of poverty -- AIDS, tuberculosis and malaria. The system is called "prequalification."
Drug companies -- both those making patented brand-name drugs as well as those making unpatented generics -- are invited to submit their products for WHO evaluation. The drugs (or, in the case of combinations, their components) have been tested and licensed elsewhere. WHO examines them for purity, safety and efficacy. Employing three-person teams of regulatory experts, it also inspects the factories where they are made.
If the drug is deemed safe and potent, and the manufacturing procedures good, it is published on a list. Periodically, samples of these "prequalified" drugs are tested to make sure they are still up to standard, and are being made where they are supposed to be made.
The system is voluntary. Because it has no legal standing and is simply a service for WHO's 192 member states (especially ones that do not have an equivalent of the FDA), "prequalification" does not meet PEPFAR's legal requirements.
Generic drug manufacturers in India, Brazil and elsewhere could submit their products to the FDA for approval, but most do not because they would then have to honor U.S. patent law. Consequently, Triomune and similar products are not licensed for use in the United States.
Dybul said the data WHO collects may contain all the information PEPFAR needs to reassure itself that Indian generics are good enough. However, WHO collected the data with the understanding it would be confidential.
"All we are saying is: We need to see the data ourselves," Dybul said. He added that if anything bad happened because the Bush program used substandard drugs, "you would crucify us for not having the due diligence of looking at the data ourselves -- and rightly so."
However, because the data cannot be turned over to PEPFAR, U.S. officials are proposing that countries and organizations agree on a set of principles by which fixed-dose combination drugs -- not only for AIDS but also for other diseases -- can be evaluated. Each group could adopt the principles as its own, and drug companies would know what documentation to submit.
A meeting to work on a statement of principles is scheduled to take place Monday and Tuesday in Gaborone, Botswana. Even if adopted quickly, it could be fall before offshore AIDS generics get PEPFAR's approval under this mechanism.
Many experts do not think such a parallel system is necessary, given the existence of WHO's prequalification program.
"We are basically doing all the same functions" that the FDA does when it reviews generic combinations composed of medications that have long been taken together as separate pills, said Lembit Rago, WHO's coordinator for quality assurance and safety of medicines.
A clinical pharmacologist who once headed Estonia's counterpart to the FDA, Rago said in practical terms it is irrelevant that "prequalification" is not "legal licensure."
"It doesn't matter which color is the cat. It has to catch the mice," he said.
? 2004 The Washington Post Company
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Rapid Oral Test for HIV Approved
Reuters
Saturday, March 27, 2004; Page A03
The Food and Drug Administration has approved the first rapid saliva test for the virus that causes AIDS, officials said yesterday.
The test, made by OraSure Technologies Inc., provides results within 20 minutes with 99 percent accuracy. Other approved rapid tests for the human immunodeficiency virus require taking blood samples.
"This oral test provides another important option for people who might be afraid of a blood test," said Health and Human Services Secretary Tommy G. Thompson.
Officials also said the test could help on two fronts, encouraging more people to get tested as well as actually getting them the results.
One-fourth of the roughly 900,000 HIV-infected people in the United States are not aware they have the virus, the Centers for Disease Control and Prevention estimates.
People given standard tests that take a week or two often do not return to get the results. With a rapid test, a patient can get an answer in just one clinic visit. Those who test positive can start treatment quickly and take steps to keep from spreading the virus.
The new test also helps protect health care workers from becoming infected with HIV because they do not have to handle blood, officials said.
Results should be confirmed by a second, more specific test, the FDA said.

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Plan to Fight AIDS Overseas Is Foundering
By DONALD G. McNEIL Jr.
Three years after the United Nations declared a worldwide offensive against AIDS and 14 months after President Bush promised $15 billion for AIDS treatment in poor countries, shortages of money and battles over patents have kept antiretroviral drugs from reaching more than 90 percent of the poor people who need them.
Progress in distributing the drugs, which have sharply cut the death rate in the United States and other Western countries, has been excruciatingly slow despite steep drops in their prices.
As a result, only about 300,000 people in the world's poorest nations are getting the drugs, of six million who need them, according to the World Health Organization.
Experts, advocacy groups and health officials agree that the delays, compounded by inadequate medical facilities and training in very poor countries, are likely to persist unless spending is stepped up sharply.
Early this month, Stephen Lewis, the special United Nations envoy for AIDS in Africa, conceded that the W.H.O.'s ambitious plan to have three million people in treatment by 2005 -- announced on Dec. 1, World AIDS Day -- was already collapsing from a lack of money. Donations to the Global Fund to Fight AIDS, Tuberculosis and Malaria are now about $1.6 billion a year, barely 20 percent of what Secretary General Kofi Annan said was needed when he created the fund in 2001.
Saying that global contributions come to a tiny fraction of what is being spent on military operations and building civilian institutions in Iraq and Afghanistan, Mr. Lewis added that if the W.H.O. program failed, "there are no excuses left, no rationalizations to hide behind, no murky slanders to justify indifference -- there will only be the mass graves of the betrayed."
While Mr. Bush promised in his 2003 State of the Union address to spend $15 billion over five years on AIDS in Africa and the Caribbean, his budget requests have fallen far short of that goal. For the most recent donation to the Global Fund, he requested only $200 million, although Congress authorized $550 million.
Nor have Europe and Asia been as generous as the fund had hoped.
Dr. Richard G. A. Feachem, a Briton who is the fund's executive director, put a brave face on the situation, describing current donations as "a steep upward flight path to our cruising altitude, which we anticipate to be $8 billion." To get there in the fund's first two years would be "inconceivable," he added. He is lobbying Congress for $1.2 billion for 2005.
At the same time, few people in poor countries have been able to get lower-priced generic antiretroviral drugs. While the generic drugs have been approved by the W.H.O., endorsed by the World Bank and used in several African countries, the Bush administration has so far paid only for medicines that are still under patent and cost much more.
For example, Daniel Berman, co-director of the Doctors Without Borders campaign for low-cost drugs, said that in Zimbabwe his organization planned to treat 1,000 patients with drugs from two approved Indian generic makers, Cipla Ltd. and Ranbaxy Laboratories Ltd.
Both companies combine three antiretrovirals so that a day's dose is just two pills and the cost is $244 to $292 per patient per year. Meanwhile, Mr. Berman said, the Centers for Disease Control in Atlanta plans to pay for the treatment of 1,000 Zimbabweans, buying the same three drugs separately from GlaxoSmithKline, Bristol-Myers Squibb and Boehringer-Ingelheim. The best prices available in Africa from those companies, he said, add up to $562 a year, and a daily dose is six pills.
Advocates of cheap drugs say the Bush administration has yielded to pressure from the pharmaceutical lobby to find ways to reject the generics.
On Friday, Senators Edward M. Kennedy, Democrat of Massachusetts, and John McCain, Republican of Arizona, wrote a joint letter to the White House urging it to accept W.H.O.-approved generics.
In a separate letter, Representative Henry A. Waxman, Democrat of California, accused the administration of trying to set standards for Indian generics higher than those for American ones.
A spokesman for Randall L. Tobias, the administration's AIDS coordinator, said any suggestion that he was snubbing generics was "utter nonsense."
"We will buy whatever drug is safe and effective at the lowest possible price," said the spokesman, Dr. Mark R. Dybul. "We don't care if it's made by Cipla or Ranbaxy, in South Africa or Brazil or Nigeria."
Mr. Tobias has scheduled a meeting in Botswana for Monday to ascertain whether the W.H.O.'s approval process is rigorous enough.
Dr. Lembit Rago, who leads the W.H.O. assessments, said he used "absolutely the same principles" as the Food and Drug Administration, and borrowed his inspectors from regulatory agencies in Canada, France, Germany, Sweden and Switzerland. As soon as his office approved the Indian pills, he said, "a very cold wind began to blow from the U.S."
"It is no secret that Pharma is lobbying against us in a big way," he said.
A spokesman for the Pharmaceutical Research and Manufacturers Association of America, the industry's American lobbying group, said his association was "not involved in any way in this." But he called the Indian drugs "new combinations that have not been appropriately treated."
Dr. Dybul said Mr. Tobias wanted to see all the data the Indian companies gave the W.H.O.
A W.H.O. spokeswoman said the agency signed confidentiality agreements, but she said the Bush administration could ask the Indian companies for the data.
Against that backdrop, prices for both branded and generic medicines have plunged in the last two years. Last October, a foundation organized by former President Bill Clinton announced an agreement with Indian and South African generic makers to sell the drugs for $140 per patient per year if large orders were guaranteed, payment was in cash and the drug maker did not have to pay the legal and lobbying costs of getting each drug licensed in each country.
In January, Mr. Clinton announced that he had brokered another price-cut deal with five companies making AIDS tests. One of the companies, Becton, Dickinson & Company, dropped the cost of its CD-4 count, which measures immune cells, to as little as $3, from a high of $10.
On Dec. 9, with little fanfare, an important step took place in South Africa. Two pharmaceutical giants, Glaxo and Boehringer-Ingelheim, agreed to grant licenses to produce AIDS drugs to four generic companies from India and South Africa.
The companies will be allowed to sell the drugs anywhere in sub-Saharan Africa. In return, Glaxo and Boehringer will get royalties of 5 percent of sales. Under the threat of heavy fines, the companies had backed down from their original plan: a license for one small generic maker supplying only South Africa's public hospitals and royalties of 15 percent to 30 percent.
The Canadian government has proposed a law encouraging its drug makers to make cheap copies of drugs to treat AIDS and malaria for export to poor countries. The bill is bogged down in Parliament.
Treatment plans have varied wildly in different countries. South Africa, with the world's largest number of AIDS patients, was slow to roll out nationwide treatment because of years of opposition by President Thabo Mbeki. India, which has the second largest number, has been slow to negotiate low prices with its own generic companies. Brazil makes its own generic drugs. Romania buys only brand-name drugs, but its epidemic is confined to about 10,000 people.
Nigeria, Africa's most populous country, has had trouble running even so much as a pilot program for 15,000 of an estimated 3.5 million infected people. Many of the country's 25 treatment centers, which were selling the drugs at a subsidized price of $85 a year, ran dry in September and did not get new supplies until February.
Malaysia is the only country to exercise a "compulsory license" right under trade treaties to ignore a patent and import generics, said James P. Love, director of the Consumer Project on Technology, a group that is pushing for cheaper drugs. Uganda, Mozambique and Zambia may soon do the same, he said, but China backed away from doing so for fear of American trade retaliation. "They're using older drugs that are already off patent in China," he said.
Copyright 2004 The New York Times Company
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>> TERROR FILES...

Imam Not Allowed To Attend Va. Meeting
By Timothy Dwyer and Jerry Markon
Washington Post Staff Writers
Saturday, March 27, 2004; Page A11
A federal judge yesterday rejected a Cleveland imam's request to travel to Northern Virginia for what prosecutors said was a meeting with a group with ties to terrorists.
The imam, Fawaz Damra, faces federal charges in Ohio that he lied on his citizenship forms by concealing his affiliation with several terrorist groups, including Palestinian Islamic Jihad. He had asked a judge earlier this week for permission to travel to Springfield for a meeting last night sponsored by the United Association for Studies and Research Inc., or UASR.
The group says it is a Muslim American think tank, but federal prosecutors and congressional investigators have linked it to terrorist groups, primarily the Islamic Resistance Movement, or Hamas, court records and interviews show. Hamas has been designated a terrorist organization by the U.S. government.
Anisa Abd el Fattah, director of public affairs for UASR, said the organization is not tied to Hamas or any other terrorist group. She said last night's meeting at the UASR offices was the first in a series that would lead to "a structure for what we hope is going to be Muslim-Jewish dialogue between Muslim and Jewish leaders in the United States."
Local Muslim leaders and imams were planning to attend last night's meeting, she said. Future meetings, she added, would include Jewish community leaders.
In documents filed this week in U.S. District Court in Cleveland, Damra's attorneys described the meeting as "a panel discussion between Rabbis and Imams at an Interfaith meeting." Damra is required under terms of his bail to request permission to travel.
Damra, the imam of the Islamic Center of Cleveland, also known as the "grand mosque," was indicted by a federal grand jury in December on one count of naturalization fraud. A trial date has not been set.
Prosecutors allege that Damra did not disclose his ties to Islamic Jihad, which has claimed responsibility for bombings and other terrorist acts in Israel. Law enforcement sources said Damra was formerly the head of al-Farooq mosque in Brooklyn, N.Y., whose adherents include men convicted in the first bombing of the World Trade Center in 1993 and Omar Abdel Rahman, the "blind sheik" who was convicted along with nine others in a plot to blow up Manhattan landmarks including the United Nations.
An attorney for Damra, who has pleaded not guilty, did not return telephone calls yesterday.
In response to Damra's travel request, Gregory A. White, the U.S. attorney in Cleveland, filed a memo saying he "strongly opposes" granting it because UASR "has demonstrated its sympathies for Hamas." He added that several "key associates" of the Springfield group "are, or have been, integrally involved in Hamas activities."
Among those, prosecutors said, is Mousa Abu Marzook, a Hamas leader and Gaza native who lived in Northern Virginia until 1993 and was designated a terrorist by the U.S. government in 1995.
El Fattah said Marzook founded UASR but did not begin his affiliation with Hamas until five years later and has not been involved with UASR since at least 1996. She added that Marzook's wife and children still attend UASR's functions.
Another former UASR official is Abdurahman Alamoudi, a prominent Muslim activist indicted in federal court in Alexandria in October on money laundering and fraud charges. Among the charges is that Alamoudi lied on his citizenship forms by not revealing his role as a "director" of UASR.
After the judge rejected Damra's request to travel to Springfield, his attorneys filed another motion saying he was "unaware of any of the facts" alleged by prosecutors.
UASR is also one of the dozens of Muslim charities and foundations for which Senate Finance Committee investigators are seeking tax and financial records. The records were requested as part of a widening probe into alleged ties between tax-exempt organizations and terrorist groups, according to documents and federal officials.


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WAR ON TERRORISM | VENEZUELA
IDs easily bought in Venezuela could aid terrorists, U.S. fears
U.S. officials worry that Venezuela's trade in fake identification documents could help terrorists and other criminals hide their identities.
BY ALFONSO CHARDY
achardy@herald.com
CARACAS - Juli?n runs a small office supply shop in downtown Caracas, but his main income comes from the dilapidated government immigration offices nearby.
Juli?n readily admits that he moonlights as a purveyor of fraudulent Venezuelan passports and national identity cards, and an expediter of real ones.
And he gladly ticks off the prices he offers, usually to illegal immigrants: about $260 for a fake passport and $80 for a fake national identity card known as a cedula. It's a lot more for real ones, depending on how fast his clients want them.
In the post-Sept. 11 era, Venezuela's trade in false documents has alarmed U.S. officials, in light of allegations that leftist President Hugo Ch?vez's government has issued fake IDs to leftist guerrillas in neighboring Colombia, Arabs with suspicious backgrounds and Cuban intelligence agents.
The trade is indeed widespread and at times worrisome, a month-long Herald review of the allegations found.
Two Venezuelan Muslims -- one who attended two of the same U.S. aviation schools as one of the Sept. 11 hijackers, another arrested with a grenade in London -- may have false documents, the former head of Venezuelan immigration told The Herald.
But the trade has been going on for decades, mainly linked to corrupt employees in the immigration department, known by its Spanish acronym DIEX, and apparently has not increased significantly under Ch?vez, The Herald also found. Ch?vez has denied the allegations.
`HISTORIC PRACTICE'
''I've been doing this long before Ch?vez became president,'' said Juli?n, who asked that his last name not be published. ``It's a traditional, historic practice in our country.
U.S. officials said their main fear is that Islamic radicals, hiding their true identities with Venezuelan documents, could slip into the United States, past terrorist ''watch lists,'' and stage another Sept. 11-style attack.
''The sale of cedulas and passports . . . did not start with Ch?vez. But we are more concerned now because terrorists can exploit a corrupt system to hurt us,'' said a top U.S. government official familiar with Venezuela.
Washington already has taken action. In recent months, the U.S. Consulate in Caracas has denied visas to Venezuelans carrying flimsy ''temporary'' passports or regular passports that were renewed multiple times after the initial expiration date of five years.
RAN OUT
Stuart Patt, a State Department spokesman, said the single-sheet temporary passports were issued by the Venezuelan government in the last few months after it ran out of the more secure regular passports.
''In general,'' Patt said, ``Venezuelan passports are not very reliable documents. They are susceptible to fraudulent use.''
Colombian officials, who have long alleged that Ch?vez is helping the guerrillas, say that scores of the rebels killed or captured near the eastern border with Venezuela were carrying Venezuelan cedulas.
''We know they can buy them easily there,'' one army general in Bogot? said recently. ``They can buy them easily here, too, by God. We Colombians are famous around the world for making false documents.''
''But there's so many of them these days that we have to ask: Is it a business or is it a policy?'' the general added.
The cedula is the primary national identification document in Venezuela, serving as proof of birth for Venezuelans and residency for foreigners.
PAPERS FOR BRIBES
But retired national guard Gen. Marco Antonio Ferreira, who resigned as head of DIEX in April 2002, said that some of the agency's branch offices outside Caracas long have issued cedulas to illegal migrants in exchange for bribes.
He gave The Herald a computerized list of more than 3,000 names of people holding what he suspects are real but fraudulently obtained documents.
They carry the numbers for blank cedulas that were sent to provincial branches but then ordered withdrawn for a number of reasons, chief among them that the branches had a surplus of blank forms, Ferreira said.
MIDDLE EAST NAMES
Ferreira's lists of suspect cedulas included more than 300 people with Middle Eastern names. A U.S. Homeland Security Department official checked the names against a terrorist watch list and found no matches.
But Ferreira said he suspected that the Venezuelan ID cards carried by Hakim Mohamed Ali Diab Fattah and Hazil Muhammad Rahaman Alan were false. Venezuelans are required to obtain cedulas at age 7. Ferreira said the two Muslims obtained theirs when they were 19 and 24.
Diab Fattah, 30, was detained in the United States after taking lessons at two of the same aviation schools attended by Sept. 11 hijacker Hani Hanjour. He was deported to Venezuela in 2002. Rahaman, 38, was arrested in London last year after a hand grenade was found in his luggage at Gatwick airport. He is awaiting trial there.
'EXPRESS' RESIDENCY
Concerns over Venezuela's ID system deepened in January when the Ch?vez government implemented a new immigration initiative: ''express'' residency and naturalization for foreign nationals living illegally in Venezuela.
Opposition leaders said the system will compromise the nation's security and that Ch?vez is only trying to increase the number of voters who may support him if electoral officials approve the recall referendum against Ch?vez sought by his political opponents.
But Venezuelan immigration officials argue that legalizing longtime illegals strengthens national security -- the same argument President Bush used recently when he proposed granting temporary work permits to illegal immigrants.
'SAFEGUARD' SECURITY
''Regularization is a policy which will not only resolve the situation of illegal foreigners but will also seek to safeguard the security of the state,'' Hugo Cab?zas, current head of DIEX, was quoted as saying recently by the Caracas daily El Universal.
Thousands of illegal migrants signing up for the express program -- most of them Colombians who fled here when their country was awash in political bloodshed and Venezuela's oil-fueled economy was humming along -- now mob the DIEX building almost daily.
And for those not willing to stand in line, there are still many fake-ID dealers nearby like Juli?n, known here as gestores, Spanish for brokers or middlemen.
``Many of the businesses around the DIEX have gestores. Here, I photocopy documents, and others plastify the cedulas. But thats just part of what we really do. Many people around here survive on selling cedulas and passports.
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VENEZUELA | TERROR SUSPECTS
A pair of arrests illustrates problem
CARACAS - The cases of two Venezuelan Muslims arrested in the United States and London illustrate the unreliability of the country's national identification card system.
If they were not who their documents said they were, who were they?
* Hakim Mohamed Ali Diab Fattah. Carries Venezuelan National ID card No. v16.105.824, issued in 1993, identifying him as a Venezuelan citizen.
Detained in the United States in 2001 after he was found to have attended two of the same aviation schools as Sept. 11 hijacker Hani Hanjour.
Deported to Venezuela March 8, 2002, four days after the U.S. Embassy in Caracas sent a letter to the Venezuelan government saying he had violated U.S. immigration laws and that an FBI investigation had shown he had ``threatened that he was going to blow up an Israeli airliner.''
U.S. officials familiar with the case said they were confident that U.S. investigators thoroughly checked his background and found him not to be a threat.
His identification card, issued in the Caribbean town of Maiquetia, shows he would be 30 years old now. He is believed to be of Palestinian descent.
But former Venezuelan immigration department chief Marco Antonio Ferreira said he suspected the ID was fraudulently obtained because Diab was 19 when it was issued. Venezuelans usually obtain ID cards at age 7 to register for school.
His whereabouts are unknown.
A family member told The Herald that other relatives had taken Diab to Israel. An Israeli official said Diab had not sought a visa at the Israeli Embassy in Caracas.
* Hazil Muhammad Rahaman Alan. Carries ID card No. v6.285.604, issued in 1990.
Arrested in London last year after a hand grenade was found in his luggage at Gatwick airport, he is awaiting trial there. Media reports say he visited Afghanistan and Sudan, two former Al Qaeda strongholds.
Rahaman obtained his ID card at age 24. Ferreira said he has more suspicions about him because the records backing up his ID card application ``appear to have been extracted from the files.''
Rahaman is believed to be of Southeast Asian descent, and his family has a home in the well-to-do Caracas district of El Cafetal. The home is now empty.
A neighbor told The Herald that Rahaman's mother had told him shortly after the arrest in London that her son had disappeared eight or nine years ago and not been heard from.
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Uribe sees Bush, hopes aid follows
BY FRANK DAVIES
fdavies@herald.com
WASHINGTON - President Alvaro Uribe of Colombia ended a four-day visit Thursday with an upbeat assessment of his country's progress against drugs, guerrillas and economic woes.
After his third meeting with President Bush in two years, Uribe said he is grateful for $2.5 billion in U.S. aid since since 2000, adding that the so-called Plan Colombia is helping to improve security and reduce coca cultivation.
Aggressive eradication efforts have reduced coca cultivation by 33 percent in the last two years, according to a State Department report released during Uribe's visit.
''These are credible numbers, but we are not bragging,'' Uribe told an audience at the National Press Club. ``These are just the first results, and I am not satisfied.''
Colombian officials said they also have high hopes for free-trade talks with the United States, scheduled to begin in May.
And this week Gen. James Hill, chief of the Miami-based U.S. Southern Command, asked Congress to raise the limit on the U.S. presence in Colombia to 800 military personnel and 600 civilian contractors. The current cap is 400 of each.
With recent Colombian advances against guerrilla groups, Hill said he saw a chance, with increased training and support, to ``deal a decisive blow against narco-terrorists.''
Uribe said that improved security was his top concern and essential to luring investment and improving democratic institutions. He quoted the former Socialist leader of Spain, Felipe Gonzalez, who once told him, ``Security is a democratic value.''
Asked about support for the U.S. war in Iraq, Uribe ducked the question. But he said the war is part of a larger global conflict with terrorism.
He faced critical questions on Capitol Hill about his efforts to make peace with several hundred members of the United Self-Defense Forces of Colombia, or AUC, an illegal paramilitary group widely accused of brutality in fighting leftist guerrillas.
Several House members said the agreement could protect human rights abusers, but Uribe said he was trying to reintegrate the AUC fighters into society.

A Guide to the New 2004 Social Security Trustees' Report
by David C. John
WebMemo #459

March 25, 2004
On March 23, 2004, the latest annual report of the Social Security's Trustees was released to the public. Most stories about this report focused on obvious facts such as when the trust fund will run out. However, there is much more to the story than just those dates. This briefing gives you an idea of how to get to the important facts behind the obvious in order to get a real picture of Social Security's financial outlook.
What is the Trustees' Report?
Every year, the Social Security Act requires the Trustees of the Social Security trust funds to issue a report on the financial status of those trust funds. This report includes not only current financial information, but also projections about the funds' ability to finance promised benefit payments in the future. If the report shows that the trust funds will be unable to finance all of these payments (as all recent reports have), the law requires the Trustees to recommend ways to make up the shortage. However, this requirement is regularly ignored.
The Trustees include the Secretaries of Treasury, Labor, and HHS, the Social Security Administration Commissioner and Deputy Commissioner, and two public trustees appointed by the President and confirmed by the Senate. The public trustees are Thomas R. Saving of Texas A & M University and John L. Palmer of Syracuse University. They were nominated to a five-year term by former President Bill Clinton in 2000 and were approved by the Senate later that year.
The 2004 Report is the third to include the full input of these public trustees and continues to include a great deal of additional information that was not available in previous reports. Both trustees have spoken about the need to include more and clearer information so that the public can fully understand the state of the Social Security trust fund and the financial challenges that lie ahead. This year's Report again shows the results of their efforts.
What does it all mean?
Good news for seniors. The benefits of current retirees and those close to retirement are completely safe. The 2004 Report shows that the program will have enough resources to pay full benefits until 2018. Despite political scare tactics, seniors can rest assured that their benefits are safe.
Bad news for younger workers. Unfortunately, younger workers have a great deal to worry about. Even though their parents' and grandparents' benefits are safe, theirs are not. Any worker born after 1975 will reach full retirement age after the trust fund is exhausted. Unless Congress acts soon, they can look forward to paying full Social Security taxes throughout their careers but only receiving 73 percent or less of the benefits that have been promised to them. In addition, they will have to pay about $5 trillion (in today's dollars) in additional general taxes in order to repay the Social Security trust fund.
Social Security must be reformed. The Report shows that today's Social Security cannot last. Over time, the system has promised almost $26 trillion (in 2004 dollars) more in benefits than it will have the ability to pay. Just repaying the amount that will be in Social Security's trust fund will cost over $5 trillion.
Delay makes it even harder to reform Social Security. Every year, there is one less year of surplus and one more year of deficit. Once those deficits start in 2018, the Trustees' Report shows that they will never end. Each year, with the disappearance of another year of surplus, reforming Social Security gets more expensive.
Delay will make it harder to run the rest of the government. If Social Security is not reformed, by 2030 it will require almost 13 percent of all income taxes collected that year in addition to what the program would receive from its payroll taxes to pay all promised benefits. By 2040, that number will surpass 15 percent of all income taxes and it will continue to grow after that. This will make it much harder for our children and grandchildren to pay for government programs dealing with national security, health, education, and the environment.
Personal retirement accounts must be established. Allowing American workers to invest a portion of their existing Social Security taxes in an account that they would own is the lowest cost way to ensure that they have an adequate retirement income. The alternative is a combination of benefit cuts and tax increases. Without personal retirement accounts, workers will end up paying more taxes for less benefits. Polls consistently show that a large majority of Americans support President Bush's plan to establish such accounts.
False lessons that should be avoided
President Bush's tax plan makes Social Security worse. Cutting taxes will not make it harder to pay for Social Security's coming deficits. Social Security will take in more cash than it pays out for about fourteen years. Without the growth that will be stimulated by the President's tax plan, future Congresses will face a much harder task in either reforming Social Security or paying for its deficits.[1]
Repealing President Bush's tax cuts will make it easier to pay for Social Security. Repealing tax cuts today will not make it easier to pay for Social Security in the future. Social Security does not need any additional cash to pay benefits for about another fourteen years. During the interim, Congress will just spend the additional money on new programs, and by the time it might be used to pay benefits, every dollar will be committed to new "essential" programs that cannot be cut.
Social Security's problems are so far in the future that we don't need to worry about them. It takes about 22 years to grow a taxpayer. Almost every new taxpayer who will begin a new career after graduating from college in 2025 is living today and can be counted. Similarly, everyone who will receive Social Security retirement benefits in the year 2040 is alive and most of them are paying taxes. Social Security's problems are based on demographics, which don't change from year to year. The people who will be hurt if nothing is done to fix Social Security are not fantasy people of the future. They are our children and grandchildren of today.
What is easy to find in the Report
When Social Security will begin to run a cash-flow deficit. The most recent estimates on when the trust fund will begin to spend more money in benefits than it receives in taxes is usually found in the accompanying press release and in the front of the Trustees' Report. It also includes the latest estimate of when the trust fund will be exhausted. According to the new 2004 Report, the year that Social Security will begin to spend more in benefits than it receives in payroll taxes remains at 2018 - the same year that was in last year's Report. The year the "trust fund" is exhausted also stays the same at 2042.
Operating numbers from the current year: The Trustee's Report includes detailed information about the aggregate amount of payroll taxes paid in the just ended calendar year and the aggregate amount of benefits of different types paid in that year. It also includes data on operating expenses. In 2003, the Old-Age and Survivors Trust Fund (which pays for retirement and survivor's benefits) took in $543.8 billion and paid out $406.0 billion. The annual surplus was $137.8 billion.
Dozens of charts and tables: Literally dozens of various technically labeled charts and tables are scattered through the Trustees' Report. Unfortunately, their actual meaning is usually much less clear.
What you will have to search for
The Meaning of All Those Charts. So far, the Trustees have used three scenarios to project Social Security's financial future. The middle scenario, which is the most likely to occur, is usually cited. The Trustees have also included both a more optimistic projection and a more pessimistic projection. Although all three are listed, it is not correct to assume that there is an equal chance that each might occur. It would be far more correct if the Trustees also included the likelihood that each would occur.
However, hidden in the details of those charts is some critical information:
Social Security spending will exceed projected tax collections in 2018. These deficits will quickly balloon to alarming proportions. After adjusting for inflation, annual deficits will exceed $100 billion within about five years, $200 billion after about ten years, and $300 billion after about fifteen years.
Between 2018 and 2079, the cumulative unfunded liability (the amount more that Social Security will have to pay in benefits during that period than it will receive in payroll and other taxes) is projected to be about $25.85 trillion (in 2004 dollars). This is more than six times the national debt.
In net present value terms, Social Security owes $5.2 trillion dollars more in benefits than it will receive in taxes. That number includes $1.5 trillion, in net present value terms, to repay the bonds in Social Security's trust fund. This is an almost 6 percent increase from last year.
Net present value measures the amount of money that would have to be invested today in order to have enough money on hand to pay deficits in the future. In other words, Congress would have to invest $5.2 trillion today in order to have enough money to pay all of Social Security's promised benefits between 2018 and 2079. This money would be in addition to what Social Security receives during those years from its payroll taxes.
A new perpetual projection that extends beyond the usual 75-year planning horizon. In net present value terms, the perpetual projection is $11.9 trillion, including money necessary to repay bonds in the trust fund. Those projections show that Social Security's total deficit continues to grow well beyond the 75-year projection period. Any reform that just eliminates deficits over the 75-year window will not be sufficient to solve the program's problems. The current system would run into renewed deficits after the 75-year window ends.
This is important because many opponents of reform claim that raising payroll taxes by about 2 percent, the average percentage difference between revenues and outlays over the 75-year period, would solve Social Security's problems. The reality, however, is that the program's future deficits are projected to be so large that this tax increase would still leave a huge shortfall. These new projections should end the claims that Social Security's impending financial crisis can be resolved with modest changes to the current system.
What needs to be in the Report, but has not appeared so far
Specific information on the program's total long-term outlook. The Report should specify the long-term unfunded liability of Social Security in nominal and inflation-adjusted dollars, as well as any changes in the unfunded liability from year to year, using the SSA's own data. This year's Report offers improved information, but there is still a long way to go. With this information, working Americans could balance any short-term "improvements" in Social Security's financial future with the higher deficits their children and grandchildren will have to pay.
A measure of workers' rate of return. The Trustees' Report does not include any measure of what workers actually receive for their payroll taxes. The best way to accomplish this would be to include a chart in the Report that plots implicit rates of return by birth year. Similar to a chart found in the GAO's August 1999 report on Social Security's rate of return, this chart would illustrate to Americans that the rate of return from Social Security has steadily and dramatically decreased. For instance, GAO's chart shows that a worker born around 1920 could expect a rate of return from Social Security taxes of about 7 percent after inflation. On the other hand, a worker born in mid-1980s could only expect a return of under 2 percent. If they were provided with these figures, workers would see that, unless the current system is reformed, they can expect a lower rate of return on their taxes than their parents and grandparents received. More important, they can see that their children and grandchildren will receive even less from Social Security.
Information on the nature of its trust funds and how they differ from private-sector trust funds. The Office of Management and Budget explained in its fiscal year 2000 budget document that the Social Security "trust funds" do not contain stocks, bonds, or other assets that could be sold directly for cash. Unlike private-sector trust funds, the Social Security trust funds contain only IOUs that will have to be paid back with future taxes. As OMB noted,
These balances are available to finance future benefit payments...only in a bookkeeping sense. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits, or other expenditures.
Information used to make projections, including economic models and the relevant data analyzed. Social Security's trustees also should clearly disclose any changes made in these models during the previous year. This disclosure would allow independent researchers to verify the SSA's projections.
How does Social Security operate?
For a briefing on how Social Security operates, how the trust fund works, how benefits are calculated, and other features of the current system and reform options, please see Social Security Basics.

[1] For a further discussion, please see President Bush's Tax Plan Would Improve the Ability to Deal with Future Social Security Deficits.

David C. John is Research Fellow in Social Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
? 1995 - 2004 The Heritage Foundation
All Rights Reserved.

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Providing Social Security Benefits in the Future: A Review of the Social Security System and Plans to Reform It
by David C. John
Backgrounder #1735
March 25, 2004 | Executive Summary | |
Social Security is the best-loved American government program, but how it works and is financed is almost completely unknown. Most Americans have a vague idea that they pay taxes for their benefits and that their benefits are linked somehow to their earnings. Many also know that the program is in trouble and needs to be "fixed" sometime soon to deal with the retirement of the baby boomers. Beyond this, their knowledge of the facts is severely limited and often colored by rumors and stories.
Most politicians exploit this lack of knowledge and limit their statements on Social Security to platitudes and vague promises. To make matters worse, reformers tend either to be content with similar platitudes or to speak in such detail that few outside the policy world can understand what they are saying. The simple fact is that today's Social Security is extremely complex, and any reform plan that is more than fine words will be similarly complex.
This paper attempts to simplify the reform debate by comparing various plans (including the current system) side by side. Each of the six sections of this paper compares how the current system and the reform plans handle a specific subject. Only reform plans that have been scored by Social Security's Office of the Chief Actuary are included in this comparison, using numbers contained in the 2003 Report of the Social Security Trustees. The six corresponding tables contain general reviews of aspects of the current system and the reform plans, with more details in the footnotes.
While looking at just one or two sections of special interest may be tempting, this approach would probably be misleading. For the best effect, each section should be considered together with the other sections in order to form a complete picture of the plan. Using simply one section by itself to judge an entire plan will not yield an accurate result.
Seven Important Rules for Real Social Security Reform
Information in this side-by-side comparison is based on Social Security's scoring memos for each plan and conclusions that can be drawn from information contained in those memos. While there are many good points in the reform plans examined in this analysis, this is not an endorsement of any proposal by the author or The Heritage Foundation. Instead, this comparison provides details of specific plans. However, it would be wise for reformers to follow a set of general principles to ensure that any Social Security reform both resolves Social Security's problems and provides workers with greater retirement security. Those principles are listed below.
This comparison of plans makes no effort to examine whether the Social Security reform plans included in it meet or violate any or all of the principles.
Principles for Social Security Reform:
The benefits of current retirees and those close to retirement must not be reduced. The government has a moral contract with those who currently receive Social Security retirement benefits, as well as with those who are so close to retirement, that they have no other options for building a retirement nest egg. If the benefits of younger workers cannot be maintained given the need to curb the burgeoning cost of the program, then they should have the opportunity to make up the difference by investing a portion of their Social Security taxes in a personal retirement account.
The rate of return on a worker's Social Security taxes must be improved. Today's workers receive very poor returns on their Social Security payroll taxes. As a general rule, the younger a worker is or the lower his or her income, the lower his or her rate of return will be. Reform must provide a better retirement income to future retirees without increasing Social Security taxes. The best way to do this is to allow workers to divert a portion of their existing Social Security taxes into a personal retirement account that can earn significantly more than Social Security can pay.
Americans must be able to use Social Security to build a nest egg for the future . A well-designed retirement system includes three elements: regular monthly retirement income, dependent's insurance, and the ability to save for retirement. Today's Social Security system provides a stable level of retirement income and does provide benefits for dependents. But it does not allow workers to accumulate cash savings to fulfill their own retirement goals or to pass on to their heirs. Workers should be able to use Social Security to build a cash nest egg that can be used to increase their retirement income or to build a better economic future for their families. The best way to do this is to establish, within the framework of Social Security, a system of personal retirement accounts.
Personal retirement accounts must guarantee an adequate minimum income . Seniors must be able to count on a reasonable and predictable minimum level of monthly income, regardless of what happens in the investment markets.
Workers should be allowed to fund their Social Security personal retirement accounts by allocating some of their existing payroll tax dollars to them. Workers should not be required to pay twice for their benefits--once through existing payroll taxes and again through additional income taxes or contributions used to fund a personal retirement account. Moreover, many working Americans can save little after paying existing payroll taxes and so cannot be expected to make additional contributions to a personal account. Thus Congress should allow Americans to divert a portion of the taxes that they currently pay for Social Security retirement benefits into personal retirement accounts.
For currently employed workers, participation in the new accounts must be voluntary. No one should be forced into a system of personal retirement accounts. Instead, currently employed workers must be allowed to choose between today's Social Security and one that offers personal retirement accounts.
Any Social Security reform plan must be realistic, cost-effective and reduce the unfunded liabilities of the current system. True Social Security reform will provide an improved total retirement benefit. But it should also reduce Social Security's huge unfunded liabilities by a greater level than the "transition" cost needed to finance benefits for retirees during the reform. Like paying points to obtain a better mortgage, Social Security reform should lead to a net reduction in liabilities.
The Social Security System and Plans
for Reform
The Current System
Social Security currently pays an inflation-indexed monthly retirement and survivors' benefit, based on a worker's highest 35 years of earnings. Past earnings are indexed for average wage growth in the economy before calculating the benefit. The benefit formula is progressive, meaning that lower-income workers receive a benefit equal to a higher proportion of their average income than upper-income workers receive. The program is expected to continue to collect more in payroll taxes than it pays out in benefits until about 2018.
Unused payroll taxes are borrowed by the federal government and replaced by special-issue Treasury bonds. After the system begins to pay out more than it receives, the federal government will cover the resulting cash flow deficits by repaying the special-issue Treasury bonds out of general revenues. When the bonds run out in about 2042, Social Security benefits will automatically be reduced to a level equal to incoming revenue. This is projected to require a 27 percent reduction in 2042, with greater reductions after that.
The DeMint Plan
Representative Jim DeMint (R-SC) has introduced a voluntary personal retirement account (PRA) plan that would establish progressively funded voluntary individual accounts for workers under age 55 on January 1, 2005. The amount that goes into each worker's account would vary according to income, with lower-income workers able to save a higher percentage. For average-income workers, the account would equal about 5.1 percent of income.
The government would pay the difference between the monthly benefit that can be financed from an annuity paid for by using all or some of the PRA and the amount that the current system promises. The sum of the annuity and the government-paid portion of Social Security would be guaranteed at least to equal benefits promised under the current system, and 35 percent of PRA assets would be invested in government bonds to help pay for any Social Security cash flow deficits. This proportion would be reduced gradually in the future. General revenue money would be used to pay for additional cash flow deficits.
The Graham Plan
Senator Lindsay Graham (R-SC) has proposed a plan that would give workers under age 55 (in 2004) three options. (Workers above the age of 55 would be required to remain in the current system and would receive full benefits.)
Under Option 1, workers would establish PRAs funded with part of their existing payroll taxes, equal to 4 percent of pay up to a maximum of $1,300 per year. Workers' benefits would be reduced by changing the benefit indexing formula from the current wage growth index to one based on consumer prices. Over time, this change would reduce benefits for workers at all income levels, but the effect on lower-income workers would be eased by a mandated minimum benefit of at least 120 percent of the poverty level for workers with a 35-year work history. The government-paid monthly benefit would be further reduced to reflect the value of the PRA. This reduction would be calculated using the average earnings of government bonds so that, if the PRA earned more than government bonds, the total monthly benefit would be higher. Option 1 also raises survivor benefits to 75 percent of the couple's benefit for many survivors.
Option 2 is essentially the same as Option 1, but without PRAs. The government would pay all benefits for workers who choose this option. Option 2 includes both the basic benefit reduction and the minimum benefit requirement.
Option 3 pays the same level of benefits promised under current law, but workers who select this option would pay higher payroll taxes in return. Initially, the payroll tax rate for retirement and survivors' benefits would increase from 12.4 percent of income to 14.4 percent of income (counting both the worker's and the employer's shares of the tax). In subsequent years, the tax rate would continue to climb in 0.25 percent increments.
The Smith Plan
Representative Nick Smith (R-MI) has proposed a voluntary PRA plan that would create personal retirement savings accounts funded with an amount equal to 2.5 percent of income, paid out of existing payroll taxes. This would increase to 2.75 percent of income in 2025 and could become larger after 2038 if Social Security has surplus cash flows. Retirement and survivors' benefits would be reduced by an amount equal to the value of lifetime account contributions plus a specified interest rate.
The Smith plan would also make many changes in Social Security's benefit formula, mainly affecting middle-income and upper-income workers. These changes would eventually result in most workers receiving a flat monthly benefit of about $550 in 2004 dollars. It would also gradually increase the retirement age for full benefits and require that all newly hired local and state workers be covered by Social Security. The Smith plan transfers $866 billion from general revenues to Social Security between 2007 and 2013 to help cover cash flow deficits and allows additional general revenue transfers when needed after that.
The Ferrara Plan
Peter Ferrara, Director of the International Center for Law and Economics, has proposed a plan that would create voluntary PRAs that would be funded according to a progressive formula that allows lower-income workers to save a higher proportion of their payroll taxes than upper-income workers. Average-income workers could save about 6.4 percent of their income. Workers would be guaranteed that the total of their PRA-generated benefits and government-paid monthly benefits would at least equal the benefits promised under the current system.
Any Social Security cash flow deficits that remain would be financed through general revenue transfers equal to a 1 percent reduction in the growth rate of all government spending for eight years, the corporate income taxes deemed to result from the investment of personal account contributions, and issuing about $1.4 trillion in "off-budget" bonds. Under the Ferrara plan, these bonds would be considered a replacement for the existing system's unfunded liability and thus would not increase the federal debt.
The Orszag-Diamond Plan
Peter Orszag, Senior Fellow at the Brookings Institution, and Peter Diamond, Institute Professor of Economics at the Massachusetts Institute of Technology, have developed a plan that does not include any form of PRA or government investment of Social Security trust fund money in private markets. Instead, it gradually changes the benefit formula to reduce benefits for moderate-income and upper-income workers and requires that all state and local government workers come under Social Security. It would also gradually reduce benefits by raising the age at which workers could receive full benefits. Workers could still retire earlier, but at lower benefits. Benefits would increase for lower-income workers, widows, and the disabled.
In addition, the plan would gradually increase the payroll tax for all workers from the current 12.4 percent of income to 15.36 percent of income in 2078. It would also raise the earnings threshold on Social Security taxes--thus requiring higher-income workers to pay additional payroll taxes--and impose a new 3 percent tax on income above the earnings threshold. Workers would not receive any credit toward benefits for income covered by this new tax.
Statements by the SSA Chief Actuary's Office on Each Reform Plan
The Social Security Administration has evaluated each of the reform plans.
The DeMint Plan. "Under plan specifications described below the Social Security program would be expected to meet its benefit obligations throughout the long-range period 2003 through 2077 and beyond."1
The Graham Plan. "[A]ll participation levels would be expected to result in sustainable solvency for the foreseeable future, as trust fund ratios are projected to be rising substantially at the end of the 75-year projection period."2
The Smith Plan. "Enactment of this proposal, assuming universal participation in Option 1, is expected to eliminate the estimated long-range OASDI [Old-Age, Survivors, and Disability Insurance] actuarial deficit (1.92 percent of taxable payroll under present law) based on "intermediate" assumptions described below and to result in sustainable solvency for the foreseeable future."3
The Ferrara Plan. "Under the plan specifications described below the Social Security program would be expected to be solvent and to meet its benefit obligations throughout the long-range period 2003 through 2077 and beyond."4
The Orszag-Diamond Plan. "This proposal would, through a combination of increases in taxes and coverage, reductions in the general growth of benefits levels, and certain enhancements to benefit protections, restore solvency to the OASDI program over the 75-year projection period under the intermediate assumptions of the 2003 Trustees Report. Moreover, as the projected trend in the ratio of Trust Fund assets would be stabilized and even rising slowly at the end of the period, The OADSDI program would be made sustainably solvent under these assumptions for the foreseeable future."5

1. Personal Retirement Accounts

What Is This, and Why Is It Important?
Allowing workers to invest a portion of their Social Security taxes is the only alternative to raising Social Security taxes or reducing Social Security benefits. However, personal retirement accounts are not all equal. The money that goes into the PRAs could come from diverting a portion of existing Social Security taxes or from some other source. (See Table 1.)
Similarly, the size of the accounts (usually expressed as a percentage of the worker's pay) is important. While larger accounts would temporarily increase the amount of additional funds required to pay benefits to retirees, they would also accumulate a pool of money faster than smaller accounts and finance a greater portion of benefits in future years. This can reduce the amount of additional tax dollars needed in future decades.
Finally, how the PRAs are invested is important. Even though they show steady growth over time, stocks and commercial bonds are generally more volatile than government bonds. Investing a portion of the PRAs in government bonds makes the accounts slightly less volatile while providing some of the additional dollars needed to pay benefits to current retirees.

2. Retirement and Survivors Benefits

What Is This, and Why Is It Important?
Other than creating personal retirement accounts that allow workers to self-fund all or a portion of their Social Security retirement benefits, most reform plans deal with the program's coming deficits by either changing the level of retirement benefits promised or finding ways to increase program revenues. This section examines how various reform plans treat promised retirement benefits. (See Table 2.)
Social Security uses a complex formula to calculate an individual worker's retirement benefits. Subtle changes in this formula can cause a large change in benefits over time. For instance, changing how past income is indexed to a constant purchasing power will have only a minor impact for the first several years. However, the effect is cumulative and after several decades will result in major changes in benefits.
Similarly, seemingly minor changes in "bend points"39 or other aspects of the benefit formula can, over the long term, cause major changes in benefits for upper-income and/or moderate-income workers. It is even possible to use the benefit formula to approximate an increase in the full retirement age without actually raising it. Thus, a plan could still allow workers to qualify for "full retirement benefits" at 65, 66, or 67 but award them full retirement benefits (as defined under the current system) only if they wait to retire until a later age.
The first question that any plan must answer is whether it would pay the full level of benefits promised under the current system. If so, it must deal with how to pay the cost, since the current system cannot afford to pay for all of the promised benefits. Other important questions include whether the plan proposes benefit changes (usually reductions) if workers do not choose to have a personal retirement account, protects lower-income workers (who more often have an interrupted work history) by instituting some sort of minimum benefit level, and/or addresses the low benefits for certain lower-income, widowed, and disabled workers under the current system.

3. Payroll Taxes

What Is This, and Why Is It Important?
Increasing Social Security payroll taxes would be one way to pay projected cash flow deficits. This method is closer to the self-funding that has characterized the system so far, but raising payroll taxes has significant drawbacks. Alternatives to payroll tax increases include instituting some form of personal retirement account to increase the return on taxes, reducing benefits, and using significant amounts of general revenue money to cover Social Security's cash flow deficits. (See Table 3.)
Currently, all workers pay 5.3 percent of their income to pay for Social Security retirement and survivors benefits. In 2004, this tax will be paid on the first $87,700 of an employee's income.40 Employers match this tax for a total of 10.6 percent of each worker's income. In addition, both employer and employee pay an additional 0.9 percent of the worker's income (1.8 percent total) for Social Security disability benefits. Thus, the employer and employee pay a total Social Security payroll tax of 12.4 percent.41
Additional payroll taxes could be collected in three ways:
The overall tax rate could be increased. However, this imposes higher taxes on all income groups and could reduce employment in the economy by making it more expensive to hire additional workers.
The tax could be imposed on income levels above the threshold, currently at $87,700. In the short run, this would increase revenues, but since retirement benefits are paid on all income taxed for Social Security, it would also eventually increase the amount of benefits the system would have to pay each year and offset the amount raised through the higher taxes.
Payroll taxes could be disconnected from the benefit formula. This could take the form of a new tax paid on income above the current $87,700 earnings threshold, collecting taxes on income up to the $87,700 level but counting only income up to $60,000 or some other level toward benefits, or some combination of the two. In either case, this type of tax would break the link between taxes and income that has existed since Social Security began in 1935. To date, neither the right nor the left has been willing to break this link for fear that it would be the first step toward turning Social Security into a welfare system. Both sides have worried that such a move--or even the perception of such a move--would undermine the program's widespread support among the American people.

4. Social Security's Unfunded Liability

What Is This, and Why Is It Important?
Both the current Social Security system and every plan to reform it will require significant amounts of general revenue money in addition to the amount collected through payroll taxes. This additional money is necessary to reduce the difference between what Social Security currently owes and what it will be able to pay.
In the reform plans, the transition cost represents a major reduction from the unfunded liability of the current program. Even though the reform plans are expensive, all of them would require less additional money than the current system. However, both the amount and the timing of this additional money would vary depending on the plan. (See Table 4.)
The amount of additional money that is needed can be measured according to two different systems. Both measurements give valuable information.
Present value reflects the idea that a dollar today has more value to a person than that same dollar has sometime in the future. It gives an idea of when the additional money is needed by giving greater weight to money needed in the near future than to an equal amount needed further in the future. In addition to showing the amount of money needed, a higher present value number indicates that money is needed sooner rather than later.
The sum of the deficits indicates the total amount of additional money that will be needed. This measure gives $100 needed today the same weight as $100 needed in 15 years. This measure adds up only the future cash flow deficits; it does not include cash flow surpluses because the government does not have any way to save or invest that money for future use. Using both of these measurements gives a better picture of the situation than using just one.
Paying for the current system or any of the reform plans will require Congress to balance Social Security's needs against those of the rest of the economy. In general, as more additional dollars are needed for the current system or a reform plan, less money will be available for other government programs and the private sector.
As this burden on the general federal budget increases and persists, Congress would find it increasingly more difficult to come up with that money, and it would become increasingly less likely that such a plan would really be paid for on schedule. This is especially true for the current system, which will incur the massive deficits to pay all of the promised benefits.
The numbers used in Table 4 were calculated by the Office of the Chief Actuary using static scoringmethods. Dynamic scoring would give a more complete picture of the economic effects of each plan, allowing analysts to compare a plan's ability to create jobs, increase savings, and generate economic growth. In many cases, economic growth associated with a reform plan could increase or reduce the amount of general revenue required to finance it. Regrettably, the Social Security Administration does not offer dynamic scoring at this time.

5. Paying for Social Security's Unfunded Liability

What Is This, and Why Is It Important?
Both the current Social Security program and all of the proposed reform plans will require large amounts of general revenue money to cover the annual cash flow deficits. Exactly when that money is first needed, how many years it will be needed, and the total amount that will be needed varies from plan to plan. Avoiding use of general revenue money would require either reducing Social Security benefits enough to eliminate the annual deficits or imposing new taxes to generate sufficient revenue. Neither the current system nor any of the proposed reform plans comes close to closing the gap.
Some plans do specify sources for the needed general revenues (See Table 5.), but these are handicapped by the fact that no Congress can bind the hands of a future Congress. Thus, even if Congress did pass a plan that specified the source of the needed general revenues, a future Congress could change the plan by a majority vote. The only way to avoid this uncertainty would be for Congress to pass and the states to ratify the plan as a constitutional amendment--which would be prohibitively difficult.
In short, both the current system and all known reform plans would have to find the necessary general revenues from some combination of four sources: borrowing additional money, collecting more taxes than needed to fund the rest of the government, reducing other government spending, or reducing Social Security benefits more than is called for under either current law or any of the reform plans.
The most important thing to remember is that the existing Social Security system and the reform plans all face this problem. This is not a weakness that is limited to PRA plans or any other reform plan. The only question is when the cash flow deficits begin and how large they will be.
Current Law
Current law makes no provision for funding Social Security's unfunded liability. The program has no credit line with the U.S. Treasury, and when its trust fund promises are exhausted, current law will require it to reduce benefits.
The DeMint Plan
While some press releases connected with Representative DeMint's plan suggest that some of its general revenue needs could be generated by reducing the growth of federal spending, no language specifying where the general revenues would come from is included in his legislation.
The Graham Plan
Senator Graham's plan in-cludes a commission that would recommend reductions in corporate welfare and redirect the savings to reduce his plan's unfunded liability. At best, a reduction in corporate welfare would generate only part of the needed general revenue. The commission would produce a legislative proposal that would then be considered by Congress.
Because the commission would be created by the same legislation that implements Graham's Social Security reforms, its recommendations could not even be considered until after the plan is enacted. As a result, passage of the Graham plan does not guarantee that these revenues would be available. Regardless of what the commission recommended, a future Congress could reject the proposed cuts in corporate welfare. In that case, Congress would have to come up with another method to raise the needed revenue.
The Smith Plan
Other than the proposed benefit changes that would partially reduce Social Security's unfunded liability, the Smith plan does not specify how it would pay cash flow deficits.
The Ferrara Plan
The Ferrara plan includes three mechanisms designed to create the needed general revenues.
First, it would mandate a 1 percent reduction in the growth of all federal spending (including entitlements such as Social Security) for at least 8 years and redirect that revenue to Social Security. Since Congress cannot legally force a subsequent Congress to follow a set course of action, the only enforcement mechanism available is a constitutional amendment. As a result, the Ferrara plan simply
appropriates to Social Security the amount of revenue that would result if Congress were to reduce spending growth. In practice, a future Congress could choose not to reduce spending growth and, instead, just let the deficit grow larger or generate the necessary revenue in some other way.
Second, the Ferrara plan would transfer to Social Security the amount of corporate income taxes that could potentially result from the investment of personal accounts in corporate stocks and bonds. This is not a new or higher tax. This transfer is intended to reflect the taxes that would be paid at the current 35 percent corporate tax rate. Since SSA does not conduct dynamic scoring, this transfer is based on the static assumption that two-thirds of the stocks and bonds held through personal accounts reflect domestic corporate investment.
Third, the Ferrara plan would borrow about $1.4 trillion in special off-budget bonds. However, there is no practical way to create off-budget bonds that would not count against the federal debt. Even if there were, such a move would reduce the amount of transparency in the federal budget.
The Orszag-Diamond Plan
While the Orszag-Diamond plan includes both some benefit reductions and benefit increases for widows, the disabled, and low-income workers, the two elements of the plan are roughly equal. It reduces Social Security's unfunded liability using tax increases contained in the plan, including an increase in the payroll tax rate, a gradual increase in the amount of income subject to Social Security taxes, and a new 3 percent tax on any salary income not subject to Social Security taxes.

6. Making Social Security a Better Deal for Workers

What Is This, and Why Is It Important?
In the long run, a reform plan should do more than just preserve the current Social Security system with its many flaws. While a key requirement of any reform plan is to provide a stable, guaranteed, and adequate level of benefits at an affordable cost, it should do more. (See Table 6.)
The current system fails to allow workers to build any form of nest egg for the future. Instead, it is the highest single tax for about 80 percent of workers. In return, each worker receives a life annuity that ends with the death(s) of the worker, the surviving spouse (if there is one), or young children (if any). In today's world, where two-earner families are increasingly the norm, the current system even limits survivor benefits to the higher of either the deceased spouse's benefits or the surviving spouse's benefits. Whichever account is lower, no matter how long that spouse worked, is marked paid in full and extinguished.
At a minimum, a reform plan should allow workers to pass on some of what they earned and paid in Social Security taxes to improve their spouse's retirement benefits. It should also allow workers the flexibility to use their entire account for retirement benefits or take a smaller retirement benefit and use the balance to pay for a grandchild's college education, start a small business, or pass on money to a later generation.
In judging whether each proposed reform would be better for America's workers, readers may differ sharply. However, while most summaries and studies examine Social Security reform from the viewpoint of federal budget impact, tax rates, and the survivability of the system, few consider the overall impact of reform on the workers it was designed to benefit in the first place. Social Security should not be reformed or "saved" for its own sake, but only if it more effectively provides the benefits workers need at a price they can afford.

David C. John is Research Fellow in Social Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

1. Stephen C. Goss, Chief Actuary, Social Security Administration, "Estimated Financial Effects of H.R. 3177, the `Social Security Savings Act of 2003,'" memorandum to Representative Jim DeMint, September 26, 2003, at www.ssa.gov/OACT/solvency/DeMint_20030926.html (February 28, 2004).
2. Chris Chaplain, Actuary, and Alice H. Wade, Deputy Chief Actuary, Social Security Administration, "Estimated OASDI Financial Effects of `Social Security Solvency and Modernization Act of 2003' introduced by Senator Lindsey Graham," memorandum to Stephen C. Goss, November 18, 2003, at www.ssa.gov/OACT/solvency/LGraham_20031118 (February 28, 2004).
3. Chris Chaplain, Actuary, and Alice H. Wade, Deputy Chief Actuary, Social Security Administration, "Estimated Long-Range OASDI Financial Effect of a Proposal Developed by Representative Nick Smith," memorandum to Stephen C. Goss, September 10, 2003, at www.ssa.gov/OACT/solvency/NSmith_20030910.html (February 28, 2004).
4. Stephen C. Goss, Chief Actuary, Social Security Administration, "Estimated Financial Effects of `The Progressive Personal Account Plan,'" memorandum to Peter Ferrara, December 1, 2003, at www.ssa.gov/OACT/solvency/PFerrara_20031201.html (February 28, 2004).
5. Stephen C. Goss, Chief Actuary, Social Security Administration, "Estimates of Financial Effects for a Proposal to Restore Solvency to the Social Security Program," memorandum to Peter Diamond and Peter Orszag, October 8, 2003, at www.ssa.gov/OACT/solvency/DiamondOrszag_20031008.html (February 28, 2004).
6. Alternative sources of funds for the PRAs would require either additional savings or additional taxes. In both cases, the result would lower the overall rate of return because the worker would be paying more.
7. Some plans offer additional investment options. All stock investment options would be invested in stock index funds, not individually selected stocks. Similarly, government and commercial bond investments would be in broadly based pools of bonds rather than in individually selected bonds.
8. At least initially, all accounts are managed by a single entity offering limited investment choices. This structure significantly reduces administrative costs. In all cases, the fund management would be contracted out to a private manager by a government supervisory agency, similar to how federal workers' Thrift Savings Plan is managed. Some plans would allow workers to select another funds manager when their accounts reach a certain size.
9. Workers could contribute up to an additional $5,000 to their account. Lower-income workers could receive a matching government contribution of up to $500 for their additional contributions.
10. This is the average account size for median-income workers. Lower-income workers could put a higher percent of their income into a PRA than higher-income workers. This progressive feature approximates the current Social Security system, which gives lower-income workers higher benefits for their taxes than higher-income workers receive.
11. The account is centrally managed at first. When assets reach $5,000, the worker could select additional investment choices.
12. Workers could contribute up to an additional $2,000 and receive a partial tax credit. They could also roll over money from other retirement accounts into their Social Security PRA. Low-income workers could receive an additional $300 from the government to their account.
13. When the account reaches $10,000, the worker could switch to one of several privately managed investment choices approved by the Secretary of the Treasury.
14. If Social Security's finances improve, larger accounts could be allowed after 2038.
15. When an account reaches $2,500, the worker could switch to a private funds manager.
16. While a central administrator would collect and distribute account contributions, all investments would be in privately managed funds.
17. Some experts are concerned that PRAs could result in lower benefits for low-income workers because they may have intermittent work histories. A guaranteed minimum benefit would provide additional protections for these workers.
18. For many years, experts on all sides of the debate have criticized the current system for providing inadequate benefits to a surviving spouse. They have also expressed concern that benefit changes for retirees and their survivors would be unfair to those receiving benefits under Social Security's disability program.
19. Under current law, Social Security will automatically reduce the benefits when the trust fund runs out in 2042. From that point on, Social Security would only pay benefits equal to its cash flow. The SSA estimates that this would immediately reduce benefits by 27 percent in 2042, with larger reductions in subsequent years.
20. Under current law, Social Security uses the same benefit formula to compute both retirement and disability benefits. When a disabled worker reaches full retirement age, the worker's benefits switch from being paid by the disability program to being paid through the retirement and survivors program.
21. The DeMint plan would guarantee future retirees at least the same level of benefits as under the current system.
22. The DeMint plan would guarantee workers at least the same level of benefits as under the current system, but does not provide for a higher minimum benefit.
23. Under the DeMint plan, disability benefits would not changed. The PRA of a deceased spouse would be added to the surviving spouse's PRA account after subtracting the amount needed to pay benefits to any survivors. If there are no survivors, the PRA would go to the worker's estate.
24. The Graham plan allows workers to lock in the current level benefits if they are willing to pay higher payroll taxes. If a worker chooses that option, payroll taxes would climb to 14.4 percent from the current 12.4 percent (counting both the employer and employee shares). It would increase further if a higher rate were necessary to pay benefit levels promised under current law. If a worker chooses another option, the worker's benefits would be reduced below the level promised by the current system.
25. The Graham plan would change how benefits are calculated when the worker retires, from the current method of indexing past earnings to wage growth in the economy to indexing based on inflation and price growth. This would gradually reduce benefits. Workers who choose to pay higher payroll taxes would avoid this reduction.
26. The Graham plan sets a minimum benefit at 120 percent of the poverty level in 2011 for workers with a work history of at least 35 years.
27. Under the Graham plan, disability benefits would not change from the current level. However, when a disabled worker reaches retirement age, the retirement benefits could be reduced to reflect changes in benefit formulas during times when the worker was not on disability. Surviving spouses would receive at least 75 percent of the benefit received when both spouses were alive, subject to some restrictions. If a worker chooses to have a PRA, the balance in that account would be transferred to the spouse's account when the worker died.
28. The Smith plan includes a variety of benefit reductions that would reduce benefits for almost all retirees below the level promised by the current system.
29. The Smith plan would make many changes to Social Security's benefit formula, primarily affecting middle-income and upper-income workers. For most workers, it would eventually result in a flat monthly benefit of about $550 per month (in 2004 dollars). It would also gradually increase the retirement age for full benefits.
30. While there is no set minimum benefit as contained in some other plans, lower-income workers would receive additional credits into their PRA and any benefit reductions that would otherwise affect them would be limited by a maximum reduction.
31. Under the Smith plan, lower-income disabled workers would not be affected by reductions to the benefit formula. Disabled workers with incomes above the threshold would see a minimum benefit level. Benefits could be adjusted.
32. The Ferrara plan would guarantee future retirees at least the same level of benefits as under the current system.
33. The Ferrara plan would not provide for a higher minimum benefit.
34. The Ferrara plan does not address disabled workers in any detail. However, because the plan is based on the combined trust fund of both the retired/survivors program and the disability program, one could assume that disability benefits would be paid out of a PRA and that current disability benefits would also be guaranteed. Spouses are guaranteed current law benefits. Upon the death of one spouse, the balance in the PRA would be transferred to the surviving spouse's PRA.
35. The Orszag-Diamond plan includes a number of benefit reductions that would especially affect upper-income and middle-income retirees. It also effectively increases the retirement age for all income levels by making it impossible for workers to get their full benefits unless they choose to delay retirement beyond the current normal retirement age.
36. The Orszag-Diamond plan would gradually change the benefit formula to reduce benefits for moderate and upper-income workers. Although workers could still retire earlier, they would receive lower benefits.
37. The benefit for minimum wage workers with at least 35 years of work history would be phased in over time, with the benefits reaching at least the poverty level by 2012. This benefit would gradually increase in subsequent years.
38. Surviving spouses would be guaranteed a benefit of at least 75 percent of the amount that the couple received when both were still living. Benefits for disabled workers would not be affected by changes to retirement and survivor's benefits.
39. The benefit formula used by the current Social Security system develops an "average indexed monthly earnings" for each worker by indexing his or her highest 35 years' earnings covered by Social Security taxes according to the growth in wages that has occurred between the date they were earned and the date that the benefit calculation is being made. In the next step, the actual retirement benefit is calculated. In 2003, the formula paid benefits equal to 90 percent of the first $606 of a worker's average indexed monthly earnings, 32 percent of the amount between $606 and $3,653, and 15 percent of any indexed earnings above $3,653. The divisions between the 90 percent, 32 percent, and 15 percent levels are called bend points.
40. This threshold is indexed and changes each year.
41. Although the federal government considers the employer's matching share as a separate item, most employers add their portions of the Social Security tax to a worker's salary when calculating the true cost of an employee.
42. Under the current system, workers pay taxes on the first $87,700 of income, which is indexed and changed each year. Plans marked with "yes" would impose an additional tax increase.
43. Benefits are currently calculated using all of the income upon which the worker paid Social Security taxes. Plans marked "yes" would break this link. Many analysts on both the left and the right believe that breaking this link would be the first step toward changing Social Security into a welfare system.
44. Workers would have the option of maintaining the current level of promised benefits in exchange for a payroll tax increase.
45. Total payroll tax rates (including the tax for disability benefits) would increase from the current 12.4 percent of income (the employee and employer shares combined) to 15.36 percent by 2078.
46. Between 2005 and 2063, the Orszag-Diamond plan would gradually raise the amount of income subject to Social Security taxes by 0.5 percent points annually, in addition any increases under the current formula.
47. The Orszag-Diamond plan would impose a new tax of 3 percent on all income above the current taxable earnings limit; however, workers would not receive any credit toward Social Security benefits for income subject to this tax. The plan's authors estimate that this tax would increase to 3.5 percent by 2080.
48. All dollar amounts are in billions of 2003 dollars.
49. Present value is a measurement of the amount of money that if invested today would finance future benefit payments. For example, if Social Security will owe $1,000 in 30 years and assuming that an investment would earn an average of 3 percent every year after inflation (a growth rate equal to what government bonds pay), the present value of the $1,000 due in 30 years is $412. (Invested at a 3 percent interest rate, $412 will grow to $1,000 in 30 years.) Because the money is assumed to grow over time, a dollar needed in the future counts as less in present value terms than a dollar needed today.
50. This is another measurement of the amount of additional money needed. In this case, the "additional amount" is the total amount of additional federal revenues required to fund the transaction. Surpluses (if any) are not included since current law does not allow the government to do anything with excess cash except spend it. Under this method, if Social Security needed $1 billion in 2005 to make benefits payments and another $1 billion in 2025, the additional amount would be the total of $2 billion.
51. The current Social Security system will require additional revenues in excess of $100 billion annually for 57 years, in excess of $300 billion annually for 45 years, and in excess of $400 billion annually for 33 years.
52. The DeMint plan will require additional general revenues in excess of $100 billion annually for 35 years. It will not require additional general revenues in excess of $300 billion annually in any year.
53. The Graham plan will require additional general revenue in excess of $100 billion annually for 32 years. It will not require additional general revenues in excess of $300 billion annually in any year.
54. This scoring assumes that 100 percent of eligible workers would choose to have a personal retirement account. The plan was also scored for 67 percent and 0 percent participation, both of which require less additional general revenue dollars.
55. The Smith plan will require additional general revenues in excess of $100 billion annually for 24 years. It will not require additional general revenues in excess of $300 billion annually in any year
56. Supporters of the Ferrara plan believe that the maximum annual deficit would be $49 billion in 2005 if the various methods that it uses to finance the transition are taken into consideration. However, this section of the paper deals only with the size of the necessary general revenue transfers, not how the plans propose to finance them. The next section discusses how plans propose to find the necessary general revenues.
57. The Ferrara plan will require additional general revenues in excess of $100 billion annually for 47 years, in excess of $300 billion annually for 30 years, and in excess of $400 billion annually for 20 years.
58. The Orszag-Diamond plan will require additional general revenues in excess of $100 billion annually for 45 years. It will not require additional general revenues in excess of $300 billion annually in any year.
59. This is the most subjective measure in this paper. It compares the retirement benefits offered under the reform plan to the amount of general revenue money that is needed to finance it, while taking into consideration both changes in taxes (if any) and the ability to build a nest egg. It compares these to what the current system would be able to pay rather than what it promises.
60. Upon a worker's death, any remaining PRA balance would be transferred to the PRAs of any survivors or the worker's estate if there are no survivors.
61. Under the DeMint plan, workers may annuitize either all of their PRAs or 35 percent. However, the total income generated from a combination of the annuity and any government-paid benefit must total at least a poverty level income. If annuitizing 35 percent of the PRA does not reach this level when combined with a government-paid benefit, then enough of the PRA must be annuitized to reach that level. Any money not annuitized may be used for any purpose,
62. The DeMint plan would allow workers to improve their retirement benefits over the current system. While it has somewhat higher general revenue costs than other plans, it also guarantees a higher level of benefits and allows workers to build a nest egg for the future. The plan contains an innovative method to reduce general revenue costs by requiring workers with personal accounts to invest a certain proportion of their account in government bonds, and it contains the most progressive personal account contribution rate of any of the plans. This would allow it to closely match the current system's progressive benefit levels through its account structure alone.
63. The Graham plan requires workers to annuitize enough of the personal retirement account to provide a poverty-level income for their households, when combined with the government-paid monthly benefit. Any remaining amount may be used for any purpose.
64. The flexibility contained in the Graham plan offers workers much more control over their futures. Each worker would have the opportunity to decide the level of benefits, cost, and risk. The plan offers benefits above the current system at a relatively low general revenue cost. It also allows workers the opportunity to build a nest egg.
65. Under the Smith plan, the treatment of a deceased worker's PRA is less clear. It appears that upon a worker's death, any remaining PRA balance would be transferred to the PRAs of any survivors or the worker's estate if there are no survivors.
66. The Smith plan requires workers to annuitize enough of the personal retirement account to provide a poverty-level income for their households, when combined with the government-paid monthly benefit. However, unlike most other personal account plans, workers must either annuitize the full PRA or make regular withdrawals from amount remaining in the PRA after annuitization, although the worker may only draw enough so that the total lasts throughout retirement. The worker does not have the option of using remaining money for other purposes than retirement.
67. Overall, the Smith plan's benefit to workers is questionable. While general revenue costs are comparatively low, the eventual severe reduction in benefits will transform Social Security into a low flat-rate benefit that is substantially less than the current system's average benefit level. The plan also offers only very limited opportunities to build a nest egg. If the Smith plan were enacted, some form of almost mandatory occupational pension savings plan would be needed to provide workers--and especially lower-income workers--with a decent standard of living during retirement.
68. Under the Ferrara plan, workers must buy an annuity that pays a monthly amount equal to the worker's Social Security benefits under the current system. If the account is not large enough to buy the annuity, the federal government would make up the difference. Any money not annuitized may be used for any purpose.
69. The Ferrara plan could potentially improve workers' retirement benefits, but its substantial costs and financing mechanism may offset these benefits. While workers would be guaranteed at least the same level of retirement benefits as under the current system and would have the opportunity to build a nest egg, the higher general revenue taxes necessary to finance the plan make an overall improvement questionable.
70. The Orszag-Diamond plan does not create any form of personal retirement account.
71. Under the Orszag-Diamond plan, workers would pay higher payroll taxes for lower Social Security benefits, with no opportunity to build a nest egg. Furthermore, workers would receive no benefit for the substantial and perpetual general revenue transfers required to finance this plan.


? 1995 - 2004 The Heritage Foundation
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President Bush's Tax Plan Would Improve the Ability to Deal with Future Social Security Deficits
by David C. John
Executive Memorandum #858

February 6, 2003
President George W. Bush's proposed tax cut plan would increase economic growth and make it easier to afford the additional money required for Social Security reform. The President's dividend tax proposal alone is expected to create an average of 512,000 new jobs each year and increase GDP by over $79 billion annually, according to dynamic economic estimates prepared by The Heritage Foundation's Center for Data Analysis.
An important but often ignored side effect of higher employment and economic growth is the strengthening of the Social Security trust fund due to extra payroll tax collections. Over just the first 10 years, the higher employment caused by the dividend tax proposal would also provide over $100 billion more to the Social Security trust fund than it is currently expected to receive. Significantly more resources will flow to that trust fund after the first 10 years. While this economic growth will not solve or even significantly delay Social Security's coming fiscal crisis, the additional money will make it easier for Social Security to meet its benefit obligations over the next several years.
Given these facts, one has to wonder why the President's critics charge that the tax plan would damage Social Security. Social Security is financially stable for now, but this will not always be the case. In 2017, Social Security will begin to pay more in benefits than it receives in payroll taxes. Unless the program is reformed, it will continue to run deficits for at least the next 60 years. Between 2017 and 2077, Social Security will require $25 trillion (in inflation-adjusted 2002 dollars) more than it will receive from payroll taxes just to meet its obligations.
How the Trust Fund Operates
The Social Security trust fund is a mechanism to pay future benefits, not a source of actual money that can be used to pay those benefits. Excess payroll taxes that are not needed immediately to pay benefits are loaned to the government in return for special-issue Treasury bonds. The bonds are really nothing more than an IOU and have no other value than as a promise to impose higher general revenue taxes on future workers. It is future higher taxes that will pay Social Security benefits. The annual payroll tax surpluses, which many thought were being used to build up a reserve for baby boomers, have already been spent on other government programs or to reduce the government debt.
When an employer pays income and payroll taxes to the Treasury on behalf of his or her employees, the employer sends in one periodic check or electronic fund transfer that represents both the total income taxes and the total Social Security payroll taxes that are due. That money is all deposited into Treasury's general fund with no distinction made between income and payroll taxes. On a regular basis, the Treasury estimates how much of its aggregate tax collections are due to Social Security taxes and credits the trust fund with that amount. No money actually changes hands; this crediting is strictly an accounting transaction. These estimates are corrected after income tax returns show how much in payroll taxes was actually paid in a specific year. Then individual workers are credited with the amount that was withheld from their paychecks.
Furthermore, Social Security benefit checks are actually Treasury checks. Each month, Social Security directs the Treasury to pay benefits to a list of individual recipients and tells Treasury how much each individual is to receive. The total amount that the Treasury pays to workers is subtracted from the bookkeeping entry representing the Social Security trust fund. Again, no money actually changes hands; the funds were always in a Treasury account.
If the bookkeeping entry shows any payroll tax funds that are not needed to pay benefits, the Treasury issues the Social Security Administration a special-issue Treasury bond in that amount. The bond acts as an IOU and promises to provide general revenue funds in that amount plus interest when Social Security needs additional money to pay benefits. After the trust fund has been credited with the IOUs, Social Security's extra tax collections are treated just like any other tax and spent to pay the government's bills. That money could be used to repay federal debt owned by the public or spent to pay for any other type of federal program from aircraft carriers to education research.
False Charges That the Tax Cut Would Hurt Social Security
President Bush's plan would not reduce Social Security's ability to pay benefits, alter the Social Security trust fund, or change the program's projected insolvency date. Because the proposed tax cut does not raise or lower Social Security payroll taxes, the program would remain able to pay all benefits owed through 2017, and its trust fund account would be credited with at least the same amount in IOUs.
Social Security's finances are accounted for separately from the rest of the government, and as long as the program collects enough payroll taxes each year to meet its current obligations, changes in other taxes do not affect its financial outlook. Regardless of whether the tax cut plan passes or not, excess Social Security taxes that are not needed to pay current benefits would continue to be swept into the government's general revenues and spent on a variety of programs just as they have been for decades.
Similarly, unified federal budget deficits or surpluses have no effect on Social Security's ability to pay benefits or the amount in IOUs that will go into the Social Security trust fund. The only change would be an estimated additional $100 billion in trust fund IOUs from increased economic growth. Legally, Social Security taxes must be used only for that program--with excess revenues loaned to the government. Even though Social Security payroll taxes are mixed in with other federal revenues when both are received, the separate accounting of those payroll taxes allows the program to remain unaffected. As long as Social Security runs an annual cash flow surplus, this will remain true.
Conclusion
Both the President and Congress should act to reform Social Security in the very near future. Every day that they delay only increases the eventual cost of reform. However, paying for that reform requires the economic growth that would be created by President Bush's tax plan. Charges that the tax plan would weaken Social Security or transfer money out of Social Security to the rich are simply wrong. Similarly, worries that the tax plan would take money that is needed to pay for Social Security reform are misplaced. What Social Security needs more than anything else is a growing, healthy economy.

David C. John is Research Fellow in Social Security and Financial Institutions in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.


? 1995 - 2004 The Heritage Foundation
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