Global One Percent Celebrate at the Bohemian Grove
By Peter Phillips | Dissident Voice | July 20, 2015
July 18th 2015 was the first day of this year’s summer camp for the world’s business and political aristocracy and their invited guests. 2,000 to 3,000 men, mostly from the wealthiest global one percent, gather at Bohemian Grove, 70 miles north of San Francisco in California’s Sonoma County—to sit around the campfire and chew the fat—off-the-record—with ex-presidents, corporate leaders and global financiers.
Speakers this year giving “Lakeside Chats” include past Secretary of Defense and the CIA Leon Panetta, Paul Volcker Jr. former Federal Reserve Chairman, retired Admiral Mike Mullen former Chairman of the Joint Chiefs of Staff, NYU Law Professor Bryan Stevenson, producer Norman Lear, the founder of AOL Steve Case, and Christopher Hill former US Ambassador to Iraq.
The Bohemian Grove summer encampments have become one of the most famous private men’s retreats in the world. Club members and several hundred world-class guests gather annually in the last weeks of July to recreate what has been called “the greatest men’s party on earth.” Spanning three weekends, the outdoors event includes lectures, rituals, theater, camp parties, golf, swimming, skeet shooting, politics, sideline business meetings and feasts of food and alcohol.
One might imagine modern-day aristocrats like Henry Kissinger, the Koch brothers, and Donald Rumsfeld amid a circle of friends sipping cognac and discussing how the “unqualified” masses cannot be trusted to carry out policy, and how elites must set values that can be translated into “standards of authority.”
Private men’s clubs, like the San Francisco Bohemian Club, have historically represented institutionalized race, gender and class inequality. English gentlemen’s clubs emerged during Great Britain’s empire building period as an exclusive place free of troublesome women, under-classes, and non-whites. Copied in the United States, elite private men’s clubs served the same self-celebration purposes as their English counterparts.
The San Francisco Bohemian Club was formed in 1872 as a gathering place for newspaper reporters and men of the arts and literature. By the 1880s local businessmen joined the Club in large numbers, quickly making business elites the dominant group. More than 2,500 men are members today. Most are from California, while several hundred originate from some 35 states and a dozen foreign countries. About one-fifth of the members are either directors of one or more of the Fortune 1000 companies, corporate CEOs, top governmental officials (current and former) and/or members of important policy councils or major foundations. The remaining members are mostly regional business/legal elites with a small mix of academics, military officers, artists, or medical doctors.
Foremost at the Bohemian Grove is an atmosphere of social interaction and networking. You can sit around a campfire with directors of PG&E, or Bank of America. You can shoot skeet with the former secretaries of state and defense, or you can enjoy a sing-along with a Council of Foreign Relations director or a Business Roundtable executive. All of this makes for ample time to develop personal long-lasting connections with powerful influential men.
On the surface, the Bohemian Grove is a private place where global and regional elites meet for fun and enjoyment. Behind the scene, however, the Bohemian Grove is an American version of building insider ties, consensual understandings, and lasting connections in the service of class solidarity. Ties reinforced at the Grove manifest themselves in global trade meetings, party politics, campaign financing, and top-down corporatism.
Peter Phillips is a Professor of Sociology at Sonoma State University, and President of Media Freedom Foundation/Project Censored. He wrote his dissertation on the Bohemian Club in 1994.
The Terrorism Pretext: Mass Surveillance is About Money and Power
By Bill Blunden | CounterPunch | July 20, 2015
“We are under pressure from the Treasury to justify our budget, and commercial espionage is one way of making a direct contribution to the nation’s balance of payments” – Sir Colin McColl, former MI6 Chief
For years public figures have condemned cyber espionage committed against the United States by intruders launching their attacks out of China. These same officials then turn around and justify America’s far-reaching surveillance apparatus in terms of preventing terrorist attacks. Yet classified documents published by WikiLeaks reveal just how empty these talking points are. Specifically, top-secret intercepts prove that economic spying by the United States is pervasive, that not even allies are safe, and that it’s wielded to benefit powerful corporate interests.
At a recent campaign event in New Hampshire Hillary Clinton accused China of “trying to hack into everything that doesn’t move in America.” Clinton’s hyperbole is redolent of similar claims from the American Deep State. For example, who could forget the statement made by former NSA director Keith Alexander that Chinese cyber espionage represents the greatest transfer of wealth in history? Alexander has obviously never heard of quantitative easing (QE) or the self-perpetuating “global war on terror” which has likewise eaten through trillions of dollars. Losses due to cyber espionage are a rounding error compared to the tidal wave of money channeled through QE and the war on terror.
When discussing the NSA’s surveillance programs Keith Alexander boldly asserted that they played a vital role with regard to preventing dozens of terrorist attacks, an argument that fell apart rapidly under scrutiny. Likewise, in the days preceding the passage of the USA Freedom Act of 2015 President Obama advised that bulk phone metadata collection was essential “to keep the American people safe and secure.” Never mind that decision makers have failed to provide any evidence that bulk collection of telephone records has prevented terrorist attacks.
If American political leaders insist on naming and shaming other countries with regard to cyber espionage perhaps it would help if they didn’t sponsor so much of it themselves. And make no mistake, thanks to WikiLeaks the entire world knows that U.S. spies are up to their eyeballs in economic espionage. Against NATO partners like France and Germany, no less. And also against developing countries like Brazil and news outlets like Der Spiegel.
These disclosures confirm what Ed Snowden said in an open letter to Brazil: terrorism is primarily a mechanism to bolster public acquiescence for runaway data collection. The actual focus of intelligence programs center around “economic spying, social control, and diplomatic manipulation.” Who benefits from this sort of activity? The same large multinational corporate interests that have spent billions of dollars to achieve state capture.
Why is the threat posed by China inflated so heavily? The following excerpt from an intelligence briefing might offer some insight. In a conversation with a colleague during the summer of 2011 the EU’s chief negotiator for the Trans-Pacific Partnership, Hiddo Houben, described the treaty as an attempt by the United State to antagonize China:
“Houben insisted that the Trans-Pacific Partnership (TPP), which is a U.S. initiative, appears to be designed to force future negotiations with China. Washington, he pointed out, is negotiating with every nation that borders China, asking for commitments that exceed those countries’ administrative capacities, so as to ‘confront’ Beijing. If, however, the TPP agreement takes 10 years to negotiate, the world–and China–will have changed so much that that country likely will have become disinterested in the process, according to Houben. When that happens, the U.S. will have no alternative but to return to the WTO.”
American business interests are eager to “open markets in Asia” and “provide the United States with unprecedented opportunities for investment.” At least, that’s how Hillary Clinton phrased it back when she was the Secretary of State. China represents a potential competitor and so American political leaders need an enemy that they can demonize so that they can justify massive intelligence budgets and the myriad clandestine operations that they approve. The American Deep State wishes to maintain economic dominance and U.S. spies have been working diligently to this end.
Medical Journal Lancet Discloses Financial Interest of Pro-HPV Vaccine Article Author
By Sharyl Atkisson | July 19, 2015
As a result of my inquiry for the article “What you didn’t know about a doctor’s stance on the HPV vaccine,” the medical journal Lancet has now issued a correction to its publication.
The correction acknowledges formerly undisclosed financial conflicts of interest between the article’s lead author and makers of the controversial human papillomavirus (HPV) cervical cancer vaccine.
The article by Dr. Sharon J. B. Hanley defended the vaccine and criticized the Japanese government’s decision to stop promoting the vaccine amid concerns about injuries. It also implied patients are incorrectly blaming the HPV vaccine for unrelated ills.
Hanley did not disclose in the original version that she receives funding from entities supported by makers of both HPV vaccines: Gardasil and Cevarix. In addition, she has previously said the vaccine makers are among those who have paid her “lecture fees.” But Hanley implied the lecture fee disclosure was not required for the recent article because Lancet only asks publishers to account for monetary gain in the most recent three year period.
Critics said it’s an example of hidden cronyism among physicians and corporations who use medical journals to influence public policy.
Read Lancet’s correction in full.
Seeking War to the End of the World
By Robert Parry | Consortium News | July 19, 2015
If the neoconservatives have their way again, U.S. ground troops will reoccupy Iraq, the U.S. military will take out Syria’s secular government (likely helping Al Qaeda and the Islamic State take over), and the U.S. Congress will not only kill the Iran nuclear deal but follow that with a massive increase in military spending.
Like spraying lighter fluid on a roaring barbecue, the neocons also want a military escalation in Ukraine to burn the ethnic Russians out of the east and the neocons dream of spreading the blaze to Moscow with the goal of forcing Russian President Vladimir Putin from the Kremlin. In other words, more and more fires of Imperial “regime change” abroad even as the last embers of the American Republic die at home.
Much of this “strategy” is personified by a single Washington power couple: arch-neocon Robert Kagan, a co-founder of the Project for the New American Century and an early advocate of the Iraq War, and his wife, Assistant Secretary of State for European Affairs Victoria Nuland, who engineered last year’s coup in Ukraine that started a nasty civil war and created a confrontation between nuclear-armed United States and Russia.
Kagan, who cut his teeth as a propaganda specialist in support of the Reagan administration’s brutal Central American policies in the 1980s, is now a senior fellow at the Brookings Institution and a contributing columnist to The Washington Post’s neocon-dominated opinion pages.
On Friday, Kagan’s column baited the Republican Party to do more than just object to President Barack Obama’s Iranian nuclear deal. Kagan called for an all-out commitment to neoconservative goals, including military escalations in the Middle East, belligerence toward Russia and casting aside fiscal discipline in favor of funneling tens of billions of new dollars to the Pentagon.
Kagan also showed how the neocons’ world view remains the conventional wisdom of Official Washington despite their disastrous Iraq War. The neocon narrative gets repeated over and over in the mainstream media no matter how delusional it is.
For instance, a sane person might trace the origins of the bloodthirsty Islamic State back to President George W. Bush’s neocon-inspired Iraq War when this hyper-violent Sunni movement began as “Al Qaeda in Iraq” blowing up Shiite mosques and instigating sectarian bloodshed. It later expanded into Syria where Sunni militants were seeking the ouster of a secular regime led by Alawites, a Shiite offshoot. Though changing its name to the Islamic State, the movement continued with its trademark brutality.
But Kagan doesn’t acknowledge that he and his fellow neocons bear any responsibility for this head-chopping phenomenon. In his neocon narrative, the Islamic State gets blamed on Iran and Syria, even though those governments are leading much of the resistance to the Islamic State and its former colleagues in Al Qaeda, which in Syria backs a separate terrorist organization, the Nusra Front.
But here is how Kagan explains the situation to the Smart People of Official Washington: “Critics of the recent nuclear deal struck between Iran and the United States are entirely right to point out the serious challenge that will now be posed by the Islamic republic. It is an aspiring hegemon in an important region of the world.
“It is deeply engaged in a region-wide war that encompasses Syria, Iraq, Lebanon, the Gulf States and the Palestinian territories. It subsidizes the murderous but collapsing regime of Bashar al-Assad in Syria, and therefore bears primary responsibility for the growing strength of the Islamic State and other radical jihadist forces in that country and in neighboring Iraq, where it is simultaneously expanding its influence and inflaming sectarian violence.”
The Real Hegemon
While ranting about “Iranian hegemony,” Kagan called for direct military intervention by the world’s true hegemonic power, the United States. He wants the U.S. military to weigh in against Iran on the side of two far more militarily advanced regional powers, Israel and Saudi Arabia, whose combined weapons spending dwarfs Iran’s and includes – with Israel – a sophisticated nuclear arsenal.
Yet reality has never had much relationship to neocon ideology. Kagan continued: “Any serious strategy aimed at resisting Iranian hegemony has also required confronting Iran on the several fronts of the Middle East battlefield. In Syria, it has required a determined policy to remove Assad by force, using U.S. air power to provide cover for civilians and create a safe zone for Syrians willing to fight.
“In Iraq, it has required using American forces to push back and destroy the forces of the Islamic State so that we would not have to rely, de facto, on Iranian power to do the job. Overall, it has required a greater U.S. military commitment to the region, a reversal of both the perceived and the real withdrawal of American power.
“And therefore it has required a reversal of the downward trend in U.S. defense spending, especially the undoing of the sequestration of defense funds, which has made it harder for the military even to think about addressing these challenges, should it be called upon to do so. So the question for Republicans who are rightly warning of the danger posed by Iran is: What have they done to make it possible for the United States to begin to have any strategy for responding?”
In Kagan’s call for war and more war, we’re seeing, again, the consequence of failing to hold neocons accountable after they pushed the country into the illegal and catastrophic Iraq War by selling lies about weapons of mass destruction and telling tales about how easy it would be.
Instead of facing a purge that should have followed the Iraq calamity, the neocons consolidated their power, holding onto key jobs in U.S. foreign policy, ensconcing themselves in influential think tanks, and remaining the go-to experts for mainstream media coverage. Being wrong about Iraq has almost become a badge of honor in the upside-down world of Official Washington.
But we need to unpack the truckload of sophistry that Kagan is peddling. First, it is simply crazy to talk about “Iranian hegemony.” That was part of Israeli Prime Minister Benjamin Netanyahu’s rhetoric before the U.S. Congress on March 3 about Iran “gobbling up” nations – and it has now become a neocon-driven litany, but it is no more real just because it gets repeated endlessly.
For instance, take the Iraq case. It has a Shiite-led government not because Iran invaded Iraq, but because the United States did. After the U.S. military ousted Sunni dictator Saddam Hussein, the United States stood up a new government dominated by Shiites who, in turn, sought friendly relations with their co-religionists in Iran, which is entirely understandable and represents no aggression by Iran. Then, after the Islamic State’s dramatic military gains across Iraq last summer, the Iraqi government turned to Iran for military assistance, also no surprise.
Back to Iraq
However, leaving aside Kagan’s delusional hyperbole about Iran, look at what he’s proposing. He wants to return a sizable U.S. occupation force to Iraq, apparently caring little about the U.S. soldiers who were rotated multiple times into the war zone where almost 4,500 died (along with hundreds of thousands of Iraqis). Having promoted Iraq War I and having paid no price, Kagan now wants to give us Iraq War II. [III!]
But that’s not enough. Kagan wants the U.S. military to intervene to make sure the secular government of Syria is overthrown, even though the almost certain winners would be Sunni extremists from the Islamic State or Al Qaeda’s Nusra Front. Such a victory could lead to genocides against Syria’s Christians, Alawites, Shiites and other minorities. At that point, there would be tremendous pressure for a full-scale U.S. invasion and occupation of Syria, too.
That may be why Kagan wants to throw tens of billions of dollar more into the military-industrial complex, although the true price tag for Kagan’s new wars would likely run into the trillions of dollars. Yet, Kagan still isn’t satisfied. He wants even more military spending to confront “growing Chinese power, an aggressive Russia and an increasingly hegemonic Iran.”
In his conclusion, Kagan mocks the Republicans for not backing up their tough talk: “So, yes, by all means, rail about the [Iran] deal. We all look forward to the hours of floor speeches and campaign speeches that lie ahead. But it will be hard to take Republican criticisms seriously unless they start doing the things that are in their power to do to begin to address the challenge.”
While it’s true that Kagan is now “just” a neocon ideologue – albeit one with important platforms to present his views – his wife Assistant Secretary of State Nuland shares his foreign policy views and even edits many of his articles. As she told The New York Times last year, “nothing goes out of the house that I don’t think is worthy of his talents. Let’s put it that way.” [See Consortiumnews.com’s “Obama’s True Foreign Policy ‘Weakness.’”]
But Nuland is a foreign policy force of her own, considered by some in Washington to be the up-and-coming “star” at the State Department. By organizing the “regime change” in Ukraine – with the violent overthrow of democratically elected President Viktor Yanukovych in February 2014 – Nuland also earned her spurs as an accomplished neocon.
Nuland has even outdone her husband, who may get “credit” for the Iraq War and the resulting chaos, but Nuland did him one better, instigating Cold War II and reviving hostilities between nuclear-armed Russia and the United States. After all, that’s where the really big money will go – toward modernizing nuclear arsenals and ordering top-of-the-line strategic weaponry.
A Family Business
There’s also a family-business aspect to these wars and confrontations, since the Kagans collectively serve not just to start conflicts but to profit from grateful military contractors who kick back a share of the money to the think tanks that employ the Kagans.
For instance, Robert’s brother Frederick works at the American Enterprise Institute, which has long benefited from the largesse of the Military-Industrial Complex, and his wife Kimberly runs her own think tank called the Institute for the Study of War (ISW).
According to ISW’s annual reports, its original supporters were mostly right-wing foundations, such as the Smith-Richardson Foundation and the Lynde and Harry Bradley Foundation, but it was later backed by a host of national security contractors, including major ones like General Dynamics, Northrop Grumman and CACI, as well as lesser-known firms such as DynCorp International, which provided training for Afghan police, and Palantir, a technology company founded with the backing of the CIA’s venture-capital arm, In-Q-Tel. Palantir supplied software to U.S. military intelligence in Afghanistan.
Since its founding in 2007, ISW has focused mostly on wars in the Middle East, especially Iraq and Afghanistan, including closely cooperating with Gen. David Petraeus when he commanded U.S. forces in those countries. However, more recently, ISW has begun reporting extensively on the civil war in Ukraine. [See Consortiumnews.com’s “Neocons Guided Petraeus on Afghan War.”]
So, to understand the enduring influence of the neocons – and the Kagan clan, in particular – you have to appreciate the money connections between the business of war and the business of selling war. When the military contractors do well, the think tanks that advocate for heightened global tensions do well, too.
And, it doesn’t hurt to have friends and family inside the government making sure that policymakers do their part to give war a chance — and to give peace the old heave-ho.
[For more on this topic, see Consortiumnews.com’s “A Family Business of Perpetual War.”]
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).
Police Dept Caught Giving Preference to Job Candidates who Said they Wouldn’t Arrest Fellow Cops
By Matt Agorist | The Free Thought Project | July 16, 2015
Methuen, MA — In what can only be described as a “see, I told you so” moment for those in the police accountability sector, a police department in Massachusetts has been caught in a perfidious hiring scheme. They were giving preference to job candidates who said they wouldn’t arrest fellow cops.
In other words, the Methuen police department was only hiring cops who promised to be corrupt and cover for their fellow corrupt officers.
According to the Boston Globe,
A Civil Service Commission official wrote that he was dismayed to learn that the city gave higher points to applicants who said they wouldn’t arrest a family member or an officer they knew, while docking points from who said they would.
“The City turned the interview process upside down,” wrote Christopher C. Bowman, chairman of the Civil Service Commission, in a July 9 decision. “There is simply no valid basis to award the highest points to candidates who express a willingness to apply one set of rules to strangers and another set of rules to friends and family members.”
Ah, but there is a valid basis to award applicants who promise not arrest their fellow cop. Ever hear of the thin blue line?
In police departments across the country, cops who go against this standard and try to hold their fellow officers accountable, are often the subject of demotions, firings, and have even had their lives threatened.
Of course, the Methuen police are spinning this practice of seeking out those who would protect their fellow law-breaking officers by saying that it helps them assess the honesty of candidates.
“I’m looking for some bearing, some honesty, and how quickly the person can think on their feet,” Police Lieutenant Michael Pappalardo testified.
To Lieutenant Pappalardo, it is called ‘honesty’ when police officers look the other way as their fellow officers break the law. How valiant and noble of them!
“Some of the interview panelists actually heaped high praise on those candidates who stated that they would arrest a stranger but not arrest a friend or family member based on the same facts, citing their understanding of ‘discretion,’” Bowman wrote in his decision.
This special treatment for cops who get caught breaking the law and are not charged is called “professional courtesy.” As the Globe noted in December, it is, in fact, quite rare for cops to be charged when they are caught drinking and driving.
“Every police officer who testified before the commission testified that the routine and customary practice when a stop is made on a fellow police officer, is to show professional courtesy and not call in the stop,” the report said.
The hiring practice of Massachusetts police cherry picking cops who won’t hold their fellow cops accountable seem to have been particularly effective. Cops can rape, kill, drink and drive, steal, and commit a myriad of other crimes and the majority of the time they receive but a small slap on the wrist.
The public recognition of hiring those who will simply act as another brick in the blue wall gives us insight into how and why it is so rare and difficult for police officers to prevent corruption in their own departments.
The next time you see a cop, like Timothy Boling of the LMPD, keep his job after getting caught driving drunk in his police cruiser, or firing at SWAT officers during a standoff in which he’s the bad guy — you’ll know exactly why.
Or, the next time you see a cop, like Officer Dale Reising, keep his job after being caught stealing cars, you’ll know that it’s not the criminal’s fault, he’s just receiving what’s known in the biz as ‘professional courtesy.’
Memo to Greece: Make War Not Love with Goldman Sachs
By Marshall Auerback and Randall Wray | Roosevelt Institute | May 2011
In recent weeks, there has been much discussion about what to do about Greece. These questions become all the more relevant as the country attempts to float a multibillion-euro bond issue later this week. The Financial Times has called this fund-raising a critical test of Greece’s credibility in financial markets as it battles with a spiraling debt crisis and strikes. The “credibility” of the financial markets is an important consideration in a country which has functionally ceded its sovereign ability to create currency, and thus remains dependent on the vagaries of the very banking institutions which helped create the mess in the first place.
Maybe Greece should secede from the European Union and default on its euro debt? Or go hat-in-hand to the International Monetary Fund (IMF) to beg for loans while promising to clean up its act? Or to the stronger Euro nations, hoping for charitable acts of forgiveness? Unfortunately, all of these options are going to mean a lot of pain and suffering for an economy that is already sinking rapidly.
And it is questionable whether any of them provide long term viable answers. Polls show that given the perception of fiscal excesses of Greece and the other countries on the periphery, the public in Germany opposes a bailout of these countries at its expense by a significant margin. Periphery countries such as Ireland that have already undertaken harsh austerity measures also oppose the notion of a bailout, despite-nay, because of — the tremendous pain already inflicted on their own respective economies (in Ireland’s case, the banks are probably insolvent as well). The IMF route is also problematic, given that Greece probably doesn’t qualify under normal IMF standards, and many euro zone nations would find this unpalatable from an ideological standpoint, as it would mean ceding control of EU macro policy to an external international institution with strong US influence.
The Wall Street Journal recently highlighted an article by Simon Johnson and Peter Boone, lamenting that the demands being foisted on Greece and other struggling Euronations would “massively curtail demand, lower wages and reduce the public sector workforce. The last time we saw this kind of precipitate fiscal austerity — when nations were tied to the gold standard — it contributed to the onset of the Great Depression in the 1930s”. Where we disagree with Johnson and Boone is the suggestion that the IMF be brought in to craft a solution. Any help from this organization will come with tight strings attached — indeed, with a noose around Greece’s neck. Germany and France would be crazy to commit their scarce euros to a bail-out of Greece since they face both internal threats from their own taxpayers and external threats from financial vampires who are looking for yet another nation to attack.
Here’s a more appropriate action: declare war on Goldman Sachs and other global financial firms that created this mess. Send the troops, the planes, the tanks, and the ships. Attack every outpost of the saboteurs on European soil. Blockade the airports and ports. Make Wall Street traders and CEOs fear for their lives, or at least for their freedom to travel. Build some Guantanamo-like facility to hold these enemy financial combatants until they can be tried, convicted, and properly punished.
OK, if a literal armed attack on Goldman is too far-fetched, then go after the firm using the full force of the regulatory and legal systems. Close the offices and go through the files with a fine-tooth comb. Issue subpoenas to all non-clerical staff for court appearances. Make the internal emails public. Post the names of all managers and traders on Interpol. Arrest anyone who tries to board a plane, train, or boat; confiscate their passports; revoke their visas and work permits; and put a hold on their bank accounts until culpability can be assessed. Make life at least as miserable for them as it now is for Europe’s tens of millions of unemployed workers.
We know that the Obama administration will not go after the banksters that created this global financial calamity. It has been thoroughly co-opted by Wall Street’s fifth column-who hold most of the important posts in the administration. Europe has even more at stake and has shown somewhat more willingness to take action. Perhaps our only hope for retribution lies there.
Some might believe the term “banksters” is too mean. Surely Wall Street was just doing its job-providing the financial services wanted by the world. Yes, it all turned out a tad unfortunate but no one could have foreseen that so many of the financial innovations would turn into black swans. And hasn’t Wall Street learned its lesson and changed its practices? Fat chance. We know from internal emails that everyone on Wall Street saw this coming-indeed, they sold trash assets and placed bets that they would crater. The crisis was not a mistake-it was the foregone conclusion. The FBI warned of an epidemic of fraud back in 2004-with 80% of the fraud on the part of lenders. As Bill Black has been warning since the days of the Saving and Loan crisis, the most devastating kind of fraud is the “control fraud”, perpetrated by the financial institution’s management. Wall Street is, and was, run by control frauds. Not only were they busy defrauding the borrowers, like Greece, but they were simultaneously defrauding the owners of the firms they ran. Now add to that list the taxpayers that bailed out the firms. And Goldman is front and center when it comes to bad apples.
Lest anyone believe that Goldman’s executives were somehow unaware of bad deals done by rogue traders, William Cohan reports that top management unloaded their Goldman stocks in March 2008 when Bear crashed, and again when Lehman collapsed in September 2008. Why? Quite simple: they knew the firm was full of toxic waste that it would not be able to continue to unload on suckers-and the only protection it had came from AIG, which it knew to be a bad counter-party. Hence on March 19, Jack Levy (co-chair of M&As) sold over $5 million of Goldman’s stock and bet against 60,000 more shares; Gerald Corrigan (former head of the NY Fed who was rewarded for that tenure with a position as managing director of Goldman) sold 15,000 shares in March; Jon Winkelried (Goldman’s co-president) sold 20,000 shares. After the Lehman fiasco, Levy sold over $6 million of Goldman shares and Masanori Mochida (head of Goldman in Japan) sold $56 million worth. The bloodletting by top management only stopped when Goldman got Geithner’s NYFed to produce a bail-out for AIG, which of course turned around and funneled government money to Goldman. With the government rescue, the control frauds decided it was safe to stop betting against their firm. So much for the “savvy businessmen” that President Obama believes to be in charge of Wall Street firms like Goldman.
From 2001 through November 2009 (note the date-a full year after Lehman) Goldman created financial instruments to hide European government debt, for example through currency trades or by pushing debt into the future. But not only did Goldman and other financial firms help and encourage Greece to take on more debt, they also brokered credit default swaps on Greece’s debt-making income on bets that Greece would default. No doubt they also took positions as the financial conditions deteriorated-betting on default and driving up CDS spreads.
But it gets even worse: An article by the German newspaper, Handelsblatt, (”Die Fieberkurve der griechischen Schuldenkrise”, Feb. 20, 2010) strongly indicates that AIG, everybody’s favorite poster boy for financial deviancy, may have been the party which sold the credit default swaps on Greece (English translation here).
Generally, speaking, these CDSs lead to credit downgrades by ratings agencies, which drive spreads higher. In other words, Wall Street, led here by Goldman and AIG, helped to create the debt, then helped to create the hysteria about possible defaults. As CDS prices rise and Greece’s credit rating collapses, the interest rate it must pay on bonds rises-fueling a death spiral because it cannot cut spending or raise taxes sufficiently to reduce its deficit.
Having been bailed out by the Obama Administration, Wall Street firms are already eying other victims (and for allowing these kinds of activities to continue, the US Treasury remains indirectly complicit, another good reason why one shouldn’t expect any action coming out of Washington). Since the economic collapse is causing all Euronations to run larger budget deficits and at the same time is raising CDS prices and interest rates, it is easy to pick off nation after nation. This will not stop with Greece, so it is in the interest of Euroland to stop the vampires now.
With Washington unlikely to do anything to constrain Goldman, it looks like the European Union, which is launching a major audit, just might banish the bank from dealing in government debt. The problem is that CDS markets are essentially unregulated so such a ban will not prevent Wall Street from bringing down more countries-because they do not have to hold debt in order to bet against it using CDSs. These kinds of derivatives have already brought down an entire continent — Asia — in the late 1990s , and yet authorities are still standing by and basically doing nothing when CDSs are being used again to speculatively attack Euroland. The absence of sanctions last year, when we had a chance to deal with this problem once and for all, has simply induced even more outrageous and fundamentally anti-social behavior. It has pitted neighbor against neighbor-with, for example, Germany and Greece lobbing insults at one another (Greece has requested reparations for WWII damages; Germany has complained about subsidizing what it perceives to be excessive social spending in Greece).
Of course, as far as Greece goes, the claim now is that these types of off balance sheet transactions in which Goldman and others engaged were not strictly “illegal” under EU law. But these are precisely the kinds of “shadow banking transactions” that almost brought down the global financial system 18 months ago. Literally a year after the Lehman bankruptcy — MONTHS after Goldman itself was saved from total ruin, it was again engaging in these kinds of deals.
And it wasn’t exactly a low-level functionary or “rogue trader” who was carrying out these transactions on behalf of Goldman. Gary Cohn is Lloyd “We’re doing God’s work” Blankfein’s number 2 man. So it’s hard to believe that St. Lloyd did not sanction the activities as well in advance of collecting his “modest” $9m bonus for last year’s work.
If these are examples of Obama’s “savvy businessmen“, then heaven help the global economy. The transaction highlighted, if reported that way in the private sector, would be accounting fraud. Fraud – “Go to jail, do not pass Go” fraud. That senior bankers had no problem in structuring/recommending/selling such deals to cash-strapped governments should probably not surprise us at this point. However, it would be interesting to know if the prop trading desks of those same investment banks, purely by coincidence of course, then took long CDS (short the credit) positions in the credit of the countries doing the hidden swaps. A proper legal investigation by the EU could reveal this and certainly help to uncover much of the financial chicanery which has done so much destruction to the global economy over the past several years.
In this country, we have had a “war on terror” and a “war on drugs” and yet we refuse to declare war on these financial weapons of mass destruction. We all remember Jimmy Carter’s “MEOW”-the attempt to attack creeping inflation that was said to sap the strength of the US economy in the late 1970s. But Europe-and indeed the entire globe-faces a much more dangerous and immediate threat from Wall Street’s banksters. They created this mess and are not only profiting from it, but are actively preventing recovery. They are causing unemployment, starvation, destruction of lives, and even violence and terrorism across the world. They are certainly more dangerous than the inflation of the 1970s, and arguably have disrupted more lives than Osama bin Laden-whose actions led the US to undertake military actions in at least three countries. That should provide ample justification for Greece’s declaration of figurative war on Manhattan.
However, in an ironic twist of fate, it was just announced that Petros Christodoulou will take over as the head of Greece’s national debt management agency. He worked as the head of derivatives at JP Morgan, and also previously worked at Goldman-the firm that got Greece into all this trouble!
Dimitri Papadimitriou has recently made what we consider to be an important plea for moderation of the hysteria about Greece’s debt. Writing in the Financial Times, he complained that “The plethora of articles in your pages and others, some arguing in favour and other against a bail-out, contribute to market confusion and drive the country’s financing costs to record levels. It is not yet clear that a bail-out is even needed, but this market confusion is rendering the government’s ability to achieve its deficit goals ever more difficult.”
Indeed, we suspect that the same financial firms that helped to get Greece into its predicament are profiting from — and stoking the fires of — the hysteria. He goes on, “what Greece really needs now is a holiday from further market confusion being created by contradictory, alarmist public commentary”.
Greece, Euroland in general, and the rest of the world all need a holiday from the manipulation and destruction of our economies by Wall Street firms that profit from speculative bubbles, from burying firms, households, and governments under mountains and debt, and even from the crises that they create. Governments all over the globe should use all legal means at their disposal to ferret out the bad faith and even fraudulent deals that global financial behemoths are foisting on us.
Roosevelt Institute Braintruster Marshall Auerback is a market analyst and commentator.
L. Randall Wray is Professor of Economics at the University of Missouri-Kansas City.
Psychologists colluded with CIA to keep ethics code in line with post 9/11 torture needs – damning report
RT | July 11, 2015
The US’s leading professional psychologists’ organization helped justify CIA and Pentagon torture programs, a new 542-page report shows. The psychologists involved later profited from torture-related contracts.
The report, concluded this month, examined the involvement of the American Psychological Association (APA) in the validation of the so-called program of enhanced interrogation, under which terror suspects were subjected to torture at CIA black cites and at the Pentagon’s Guantanamo Bay prison facility.
The document prepared by a former assistant US attorney, David Hoffman, says some of the APA’s senior figures, including its ethics director, pushed to keep the association’s ethics code in line with DoD’s interrogation policies. Other prominent external psychologists took actions that aided the CIA’s torture practices, defending it from growing dissent among its own psychologists.
“The evidence supports the conclusion that APA officials colluded with DoD officials to, at the least, adopt and maintain APA ethics policies that were not more restrictive than the guidelines that key DOD officials wanted,” the report published on Friday by the New York Times said. “APA chose its ethics policy based on its goals of helping DoD, managing its PR, and maximizing the growth of the profession.”
The Hoffman report focuses on the APA’s close ties with the Pentagon and can be viewed as complimentary to last December’s Senate report that exposed the brutality of post 9/11 CIA tactics towards terror detainees, the NYT said. It also gives additional details about how the intelligence agency adopted the enhanced interrogation program and solicited outside advice to stem concerns among its own medical professionals.
The report also describes several instances in which senior figures involved in the program moved into the private sector to get lucrative contracts from the CIA and the Pentagon. For instance, Joseph Matarazzo, a former president of the psychological association and a member of the CIA advisory committee, was asked by Mr Kirk Hubbard (CIA psychologist who was chairman of the agency advisory committee), to provide an opinion about whether sleep deprivation constituted torture. The conclusion was that it did not.
Later, Matarazzo became a partner in Mitchell Jessen and Associates, a contracting company created by James Mitchel and Bruce Jessen to consult with the CIA on their interrogation program. They were instructors for the Air Force’s SERE (survival, evasion, rescue and escape) program, in which US troops are subjected to simulated torture to prepare them for possible capture. They adapted the program’s techniques for use against terror detainees, the report said.
After the Hoffman report was made public, the American Psychological Association issued an apology.
“The actions, policies and lack of independence from government influence described in the Hoffman report represented a failure to live up to our core values,” Nadine Kaslow, a former president of the organization, said in a statement. “We profoundly regret and apologize for the behavior and the consequences that ensued.”
One of the more immediate consequences of the report was the resignation of the APA’s ethics chief, Stephen Behnke, according to the Guardian. The psychologists coordinated the group’s public policy statements on interrogations with a top military psychologist, the report said. He later received a Pentagon contract for training interrogators, without notifying the American Psychological Association’s board.
Kaslow told the newspaper that Behnke’s last day at the APA was July 8, after the association received Hoffman’s report, and that further resignations were likely to follow.
A similarly damning report on the APA’s involvement in US government torture programs was published in April.
Ukraine Puts 345 State Firms Up For Sale
Sputnik – 10.07.2015
Ukrainian Economic Development Minister Aivaras Abromavicius clarified exactly how many state companies would be offered up for sale to US and European investors at the upcoming Ukrainian-American investment conference in Washington D.C on Monday, stating that 345 state-run firms would be put on offer to the highest bidder.
Speaking before reporters on Thursday, Abromavicius noted that the 345 firms offered for sale “will be included in the first wave of privatizations,” which he earlier confirmed would begin in the fourth quarter of this year.
Kiev’s effort is ostensibly aimed at raising billions of dollars for the country’s cash-strapped budget, as the economy, hit by a decline in trade with Russia, financial panic, and civil war, lies in tatters and on the verge of default.
Companies on the docket include the electricity generation firm Tsentrenergo and six of its regional distributors, gas transportation companies, the Odessa Port Plant, mining operations and agricultural holdings, which together are projected to bring 17 billion hryvnia (about $790 million) into the country’s coffers.
Earlier this year, Ukrainian officials held similar conferences in Washington, Berlin and Paris. As late as last month, Prime Minister Arseniy Yatsenyuk met with Ukrainian-Americans in Washington, telling them that his government wants “to see American owners on the territory of Ukraine,” stating that “they will bring not only investment, but also new standards, new ways of managing the companies, and a new investment culture.”
But with the IMF (conservatively) projecting a 9 percent decline in Ukraine’s GDP in 2015, with inflation hitting nearly 50 percent and the country approaching debt levels amounting to 100 percent of GDP, analysts warn that the present may be the worst possible time for Kiev to sell off its large, state-owned firms. The country’s economic decline, political instability and the war in the east have hit property values hard, which means that Kiev is unlikely to collect significant sums for the large, valuable, strategic assets offered up for sale.
Analysts also suggest that Western investors will have little appetite for the purchase of the unwieldy, heavily-indebted state firms, many operating at a loss since the collapse of the Soviet Union, noting that the most profitable companies were already bought up in crooked schemes by the country’s oligarchs a long time ago. In this connection, AFP recently reported that Rada MPs connected with the country’s oligarchic clans are likely to use their influence to prevent the sale of the profitable state assets under oligarchs’ influence. Moreover, Frankfurter Allgemeine Zeitung columnist Konrad Schuller recently poured cold water on the entire privatization initiative, noting that in an environment of speedy, murky, clan-dominated privatization, Western investors will have no time to assess whether the state companies offered up for sale are truly lucrative or not.
Furthermore, while Yatsenyuk recently announced that over 150 major investors have already RSVP’d to attend the Washington conference, he has already been hit by dissension from within his own cabinet, with officials from the Energy Ministry and the State Property Fund challenging the pace and scale of privatization.
In April of this year, Ukraine agreed to an International Monetary Fund-monitored austerity program, which called for the shedding of 24,000 government jobs, higher taxes, privatization of state assets and the withdrawal of subsidies on utilities in exchange for a total of about $40 billion in IMF-led foreign assistance over the coming four years.
George W. Bush Demands $100k Fee to Address Wounded Iraq War Vets
Sputnik – 10.07.2015
During his term, former President George W. Bush sent US troops to Iraq under what later turned out to be false pretenses. Since then, over 50,000 US soldiers have been wounded, with many struggling to acclimate to life back home. And while the former president has pledged his support to these veterans, he apparently won’t do it for free.
Two weeks ago, at a Chamber of Commerce event, former President Bush touted his support for veterans, saying “I’ve decided to dedicate the rest of my life to helping out vets, to helping those with whom I was honored to serve.”
A noble pledge, perhaps, but it also comes with a fee.
According to ABC News, the former president has charged $100,000 for a speech at a gala fundraiser hosted by the Texas-based Helping a Hero charity for veterans who have lost limbs in Iraq and Afghanistan – the very same countries Bush sent troops to. At an additional cost of $20,000, the former president was also provided with a private jet to fly him to the event.
Members of Helping a Hero also told ABC News that former First Lady Laura Bush also charged a fee of $50,000 for a speech at a gala event the year before for the same organization.
The charity’s chairman was quick to come to the former president’s defense, saying in a statement that Bush’s appearance helped raise “significant funds” for the organization, and that he further reduced his fees from $250,000 to $100,000 for their benefit.
However, according to Politico, the former president’s typical speaking fee is between $100,000 and $175,000, which means Bush may not have been as gracious with his speaking fee as indicated by the charity’s chairman.
Further, ABC reported that both Bill Clinton and Jimmy Carter have never taken money to speak at a veteran’s group in the past. Robert Gates, Secretary of Defense under Bush’s administration, also did not charge a fee for speaking at the same Helping a Hero fundraiser.
The revelation has sparked public outrage, with the former president under fire from both public officials and military veterans. Many drew attention to the irony of a president capitalizing on the soldiers injured in the very wars he created. […]
Some even demanded that Bush return the money, with others noting that the former president and his wife have earned much more from their speeches than those who have gone to fight the wars.
Paid speeches by former presidents have been the subject of intense controversy for years, as they have become a major source of income for their post-presidential years. By 2013, Bill Clinton brought home over $106 million on the lecture circuit, and according to CNN, makes $500,000 per speech.
Toward the end of his presidency, Bush reportedly told author Robert Draper that he intended to “replenish the ol’ coffers” after leaving office and make a “ridiculous” amount of money with his speeches. And apparently, even supporting soldiers he had sent to war won’t come in the way of that money making.
Hillary Clinton: Use Congress and Corporations to End Boycott Israel Movement
By Naji Dahi – ANTIMEDIA – July 9, 2015
According to a letter from Hillary Clinton to pro-Israel donor, Haim Saban, she wants to be the top pro-Israel candidate in the race for the Democratic presidential nomination. More specifically, Clinton pledges her opposition to the BDS (Boycott, Divest, Sanction) movement. According to McClatchy,
“I know you agree that we need to make countering BDS a priority… we can work together…to reverse this trend with information and advocacy, and fight back against further attempts to isolate and delegitimize Israel… from Congress and state legislatures to boardrooms and classrooms, we need to engage all people of good faith, regardless of their political persuasion or their views on policy specifics, in explaining why the BDS campaign is counterproductive to the pursuit of peace and harmful to Israelis and Palestinians alike.”
It is no secret that Hillary Clinton is the Wall Street-sponsored candidate in the Democratic primary race. Data from Open Secrets for the 1999-2016 election cycles shows that three of her top five contributors were Wall Street firms (Citigroup, Goldman Sachs, and J.P. Morgan Chase). It seems that Clinton now wants to become the undisputed pro-Israel candidate, as well.
In the United States presidential elections, all major party candidates are obliged to show their loyalty to the state of Israel. In return, wealthy pro-Israel donors fill their election campaign coffers with much needed cash. In 2008, for example, the top three candidates in both parties (Obama, Clinton, McCain) were also the top three recipients of donations from pro-Israel groups and individuals. In 2012, history repeated itself with Mitt Romney and Barack Obama, the top two recipients of campaign cash from pro-Israel individuals and groups. While it is too early to tell, it is highly likely that the top two candidates from the two major parties will also be the top two recipients of pro-Israel campaign contributions.
Haim Saban, a billionaire who made his fortune in the entertainment industry, is a long time Democrat and ally of Hillary Clinton. He will likely promote pro-Israel, anti-BDS discourse in the Democratic Party. Sheldon Adelson, also a billionaire, is a long-time Republican whose job is to enforce pro-Israel, anti-BDS discourse in the Republican Party. According to The Times of Israel,
“Adelson said his prime focus… was to reverse the inroads being made by what he called ‘the BDS (Boycott, Divestment and Sanctions) and company… the anti-Israel and anti-Semitic organizations [that] are making a lot of headway on the campuses in the United States.’ He said he would encourage Jewish groups to work to have boycott decisions taken by student campus groups reversed… Saban made clear that he intended to fight back against any business groups inclining to boycott Israel, and create a climate in which they were deterred from doing so.”
The success of the BDS movement is becoming an issue for Israel—so much so, that Saban and Adelson held a secret summit in Las Vegas last month to address the matter. The two billionaires invited 50 pro-Israel groups and pledged to fund their efforts to fight BDS on American college campuses with the hope of branding the movement anti-Semitic. According to Haaretz,
”…of millions of dollars were raised to combat campus campaigns to boycott, divest from and sanction Israel — or BDS, as the movement is known… both [Adelson and Saban] stressed their view that BDS — a form of nonviolent protest promoted by a diverse array of groups opposed to Israel’s policies toward the Palestinians — as simply a form of anti-Semitism.”
With Hillary Clinton officially on board and the two billionaires raising $20 million for the anti-BDS cause, American college campuses will be interesting centers of debate this fall.





