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Peru: scandal over Israeli security contractor

WW4 Report – 03/31/2013

Peru’s Congress has opened a high-profile investigation into a contract with Israeli security firm Global CST, entered into by the previous government of Álan García, an audit by the Comptroller General of the Republic found irregularities in the deal. The probe concluded that the Peruvian state had lost $16 million when the firm failed to fulfil terms of its contract with the Armed Forces Joint Command. A congressional oversight commission has questioned three former cabinet members in the scandal—ex-housing minister Hernán Garrido, and ex-defense ministers Ántero Flores Aráoz and Rafael Rey—as well as ex-Joint Command chief Gen. Francisco Contreras. Special anti-corruption prosecutor Julio Arbizu has called on García himself to testify before what is being called the Mega-Commission, and for the attorney general’s office, or Fiscalía, to investigate the former president.

Global CST, whose founder and director is IDF reserve Gen. Israel Ziv, was secretly contracted in 2009 to help Peru’s military fight remnant Sendero Luminoso rebels in the Apurímac-Ene River Valley (VRAE). Testimony and documents confirm that Rey exchanged communication directly with Israel’s then-foreign minister Avigdor Lieberman over the deal, and called upon him to pressure CST’s competitor Armaz to drop out of the bidding process. According to testimony, Garrido also helped Global CST arrange a similar deal with the government of Colombia before recommending the firm to Peru’s own armed forces.

Also named is ex-admiral Carlos Tubino, now a lawmaker for the Fuerza Popular party, headed by Keiko Fujimori, daughter of imprisoned ex-dictator Alberto Fujimori. Both Fujimoristas and supporters of García’s APRA charge that the investigation is politically motivated. (IPS, La Primera, March 22; Perú21, March 15; Perú21, March 8)

Controversy also surrounds contracts with the Israel Corporation, which has bought into Peru’s energy sector.

April 2, 2013 Posted by | Corruption | , , , , | Leave a comment

Russia slams US ‘interference’ for vowing to continue NGO funding

RT | March 30, 2013

Russia’s Foreign Ministry has condemned the US over its plan to continue financing certain Russian NGOs. Moscow has accused Washington of meddling in its domestic affairs.

“We consider the statement by the US State Department official representative Victoria Nuland, saying the US is going to continue financing some of Russia’s NGOs through intermediaries in third countries, avoiding the Russian legislature, a blatant interference into our internal affairs,” Russian Foreign Ministry spokesperson Aleksandr Lukashevich said in a statement on Saturday.

Mass audits of Russian NGOs started on March 21, on orders from the Justice Ministry and the Prosecutor General’s office.

The checks immediately sparked criticism in the international rights community, which labeled them an attempt to pressure activists. Russia has maintained the checks are regular inspections to see if NGO work complies with Russian law – legislation was recently amended to require that NGOs receiving foreign funding register as ‘foreign agents.’

Victoria Nuland, US State Department spokesperson, said that Washington’s NGO funding will continue unabated: “We are providing funding through platforms outside of Russia for those organizations that continue to want to work with us,” she said at a Thursday briefing.

The Russian Foreign Ministry believes the US is engaged in “direct instigating of certain non-governmental and public structures to violate legislation related to the work of non-governmental organisations in the Russian Federation,” according to Lukashevich’s statement.

Russian diplomats were also incensed by Victoria Nuland’s description of the NGO raids as a “witch hunt.” Lukashevich’s statement described his American counterpart’s choice of words as “cynical and provocative.”

Moscow has said that its NGO policy is in line with generally accepted international practices. So far, auditors have reported no infractions in the activities of non-governmental groups, apart from one incident. On Thursday, ‘For Human Rights’ leader Lev Ponomaryov refused to turn over working documents to inspectors, saying that his organization had already been subjected to a recent check.

Law enforcers said the act was a refusal to comply with lawful demands, and started an administrative case against the activist.

President Putin on Friday asked Russia’s top Human Rights Commissioner, Vladimir Lukin, to monitor the situation with the NGO raids. “I would like to rule out any excesses there,” Putin said.

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March 30, 2013 Posted by | Corruption, Deception | , , , , | Leave a comment

How Big Corporations are Unpatriotic

By Ralph Nader | March 28, 2013

Many giant profitable U.S. corporations are increasingly abandoning America while draining it at the same time.

General Electric, for example, has paid no federal income taxes for a decade while becoming a net job exporter and fighting its hard-pressed workers who want collective bargaining through unions like the United Electrical Workers Union (UE). GE’s boss, Jeffrey Immelt, makes about $12,400 an hour on an 8-hour day, plus benefits and perks, presiding over this global corporate empire.

Telling by their behavior, these big companies think patriotism toward the country where they were created and prospered is for chumps. Their antennae point to places where taxes are very low, labor is wage slavery, independent unions are non-existent, governments have their hands out, and equal justice under the rule of law does not exist. China, for example, has fit that description for over 25 years.

Other than profiteering from selling Washington very expensive weapons of mass destruction, many multinational firms have little sense of true national security.

Did you know that about 80 percent of the ingredients in medicines Americans take now come from China and India where visits by FDA inspectors are infrequent and inadequate?

The lucrative U.S. drug industry – coddled with tax credits, free transfer of almost-ready-to-market drugs developed with U.S. taxpayer dollars via the National Institutes of Health – charges Americans the highest prices for drugs in the world and still wants more profits. Drug companies no longer produce many necessary medicines like penicillin in the U.S., preferring to pay slave wages abroad to import drugs back into the U.S.

Absence of patriotism has exposed our country to dependency on foreign suppliers for crucial medicines, and these foreign suppliers may not be so friendly in the future.

Giant U.S. companies are strip-mining America in numerous ways, starting with the corporate tax base. By shifting more of their profits abroad to “tax-haven” countries (like the Cayman Islands) through transfer pricing and other gimmicks, and by lobbying many other tax escapes through Congress, they can report record profits in the U.S. with diminishing tax payments. Yet they are benefiting from the public services, special privileges, and protection by our armed forces because they are U.S. corporations.

On March 27, 2013, the Washington Post reported that compared to forty years ago, big companies that “routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits,” are now reporting less than half that share. For instance, Proctor and Gamble was paying 40 percent of its total profits in taxes in 1969; today it pays 15 percent in federal taxes. Other corporations pay less or no federal income taxes.

Welcome to globalization. It induces dependency on instabilities in tiny Greece and Cyprus that shock stock investments by large domestic pension and mutual funds here in the U.S. Plus huge annual U.S. trade deficits, which signals the exporting of millions of jobs.

The corporate law firms for these big corporations were the architects of global trade agreements that make it easy and profitable to ship jobs and industries to fascist and communist regimes abroad while hollowing out U.S. communities and throwing their loyal American workers overboard. It’s not enough that large corporations are paying millions of American workers less than workers were paid in 1968, adjusted for inflation.

Corporate bosses can’t say they’re just keeping up with the competition; they muscled through the trade system that pulls down on our country’s relatively higher labor, consumer and environmental standards.

Corporate executives, when confronted with charges that show little respect for the country, its workers and its taxpayers who made possible their profits and subsidized their mismanagement, claim they must maximize their profits for their shareholders and their worker pension obligations.

Their shareholders? Is that why they’re stashing $1.7 trillion overseas in tax havens instead of paying dividends to their rightful shareholder-owners, which would stimulate our economy? Shareholders? Are those the people who have been stripped of their rights as owners and prohibited from even keeping a lid on staggeringly sky-high executive salaries ranging from $5,000 to $20,000 an hour or more, plus perks?

Why these corporate bosses can’t even abide one democratically-run shareholders’ meeting a year without gaveling down their owners and cutting time short. To get away from as many of their shareholder-owners as possible, AT&T is holding its annual meeting on April 26 in remote Cheyenne, Wyoming!

Pension obligations for their workers? The award-winning reporter for the Wall Street Journal Ellen E. Shultz demonstrates otherwise. In her gripping book Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, she shows how by “exploiting loopholes, ambiguous regulations and new accounting rules,” companies deceptively tricked employees and turned their pension plans into piggy banks, tax shelters and profit centers.

Recently, I wrote to the CEOs of the 20 largest U.S. corporations, asking if they would stand up at their annual shareholders’ meetings and on behalf of their U.S. chartered corporation (not on behalf of their boards of directors), and pledge allegiance to the flag ending with those glorious words “with liberty and justice for all.” Nineteen of the CEOs have not yet replied. One, Chevron, declined the pledge request but said their patriotism was demonstrated creating jobs and sparking economic activity in the U.S.

But when corporate lobbyists try to destroy our right of trial by jury for wrongful injuries – misnamed tort reform – when they destroy our freedom of contract – through all that brazenly one-sided fine print – when they corrupt our constitutional elections with money and unaccountable power, when they commercialize our education and patent our genes, and outsource jobs to other countries, the question of arrogantly rejected patriotism better be front-and-center for discussion by the American people.

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March 29, 2013 Posted by | Corruption, Deception, Economics, Timeless or most popular | , , , , | Leave a comment

Obama’s cybersecurity plan: Monitor more of the Internet

RT | March 21, 2013

President Barack Obama’s plan to protect the United States’ critical infrastructure against cyberattacks is accelerating quickly as more private sector businesses are signing on to share information with the federal government.

When Pres. Obama rolled out his ‘Improving Critical Infrastructure Cybersecurity’ executive order last month, he asked that classified cyber threat and technical information collected by the government be given to eligible commercial service providers that offer security services to businesses linked to the country’s critical infrastructure.

But in the few short weeks since the order was announced during the president’s annual State of the Union address, warnings of an imminent attack have only increased. CIA Director John Brennan told a panel last week that “the seriousness and the diversity of the threats that this country faces in the cyber domain are increasing on a daily basis,” and US national intelligence chief James Clapper claims there is “a remote chance of a major cyberattack against US critical infrastructure systems during the next two years that would result in long-term, wide-scale disruption of services, such as a regional power outage.”

Upon announcement of the executive order, a handful of defense contractors and telecom companies — namely Lockheed Martin, Raytheon, AT&T and CenturyLink — confirmed that they’d be voluntarily sharing information back and forth with the country’s top intelligence agencies in order to closely monitor any threats that could collapse the country’s critical infrastructure, a vaguely defined category assumed to include the nation’s power systems, telecommunication wires and other major utilities.

“The demand is there. I think the priority is there, and the threat is serious,” Steve Hawkins, vice president of information and security solutions for Raytheon, told Bloomberg earlier in the month.

As warnings of a cyberattack increase, however, the latest news out of Washington is that even more private sector companies with ties to critical infrastructure will be participating in the program. In a report published on Thursday by Reuters, the newswire notes that the framework first outlined during last month’s executive order is already quickly shaping up, with tasks being delegated throughout the US so that threat information can be adequately passed to applicable persons.

According to Reuters’ latest write-up, the executive order will require the National Security Agency to collect classified intelligence on serious hacking attempts aimed at American businesses, which will then be handed over to the Department of Homeland Security to pass on to the telecom and cybersecurity providers — Raytheon, AT&T and others — where employees holding security clearances will scan incoming emails and routine Web traffic for threats to the infrastructure.

But while the government has long asked the entities to open up lines of communication with the NSA and other offices, smaller private-sector businesses could soon be signing on. According to Joseph Menn and Deborah Charles of Reuters, the government is already expanding their cybersecurity program so that even more Web traffic heading into and out of defense contractors will be scanned to include far more of the country’s private, civilian-run infrastructure.

“As a result, more private sector employees than ever before, including those at big banks, utilities and key transportation companies, will have their emails and Web surfing scanned as a precaution against cyberattacks,” they write.

Once those participating companies sign on to get data from Homeland Security, the DHS will send them computer threat “signatures” obtained by the NSA that will offer a list of red flags to be watching out for as huge amounts of Web data is scanned second-by-second and bit-by-bit.

“The companies can use this intelligence to strengthen cybersecurity services they sell to businesses that maintain critical infrastructure,” Bloomberg News reports.

That intelligence, including but not limited to cyber timestamps, indicators and the critical sector potentially, can then be monitored to search for malicious code and viruses sent through America’s Internet with the intent of causing harm. In exchange, the critical infrastructure companies that could be targeted by cyberterrorists will pay the contractors and telecoms for their help.

The threat of a cyberwar crippling America’s power grid and communication systems has been ramped-up in recent weeks, particularly in light of a highly-touted report that linked Chinese state actors with repeated attempts to sabotage US businesses and conduct espionage to steal secrets.

“Increasingly, US businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyber intrusions emanating from China on an unprecedented scale,” National Security Adviser Thomas Donilon told the Asia Society in New York last week. “The international community cannot afford to tolerate such activity from any country.”

March 22, 2013 Posted by | Civil Liberties, Corruption, Full Spectrum Dominance, Progressive Hypocrite | , , , , , | Leave a comment

U.S./Israel Axis of Evil

By Margaret Kimberley | Black Agenda Report  | March 20, 2013

President Barack Obama’s visit to Israel signals nothing but bad news for the Palestinian people and probably the people of the rest of the world too. Every American president who has served since Israel’s founding has put chosen Israeli interests over those of their own people. Israel may kill United States servicemen as it did in attacking the U.SS. Liberty in 1967. American citizen Rachel Corrie was crushed to death by an Israeli tractor when she tried to prevent the demolition of a Palestinian home. Furkan Dogan was assassinated by Israeli soldiers on board a freedom flotilla vessel bound for Gaza. Neither the sailors on board the Liberty, nor Corrie, nor Dogan received any justice from their government. There is very little justice when it comes to Israeli/American relations.

It will be important to keep that in mind while watching Obama’s “listening” trip to Israel, Palestine and Jordan. The president’s first visit to Israel since his election is nothing more than a public relations ruse. Obama will do just as his predecessors did in regards to Israel, that is to say, whatever the Israelis want him to do.

It doesn’t matter that Prime Minister Netanyahu practically endorsed Mitt Romney during his presidential campaign. Romney’s well heeled Zionist supporters wasted their war chests and not just because theirs was a losing effort. They were going to get what they wanted from whomever emerged victorious in November. There was no need to spread around all that cash.

If Obama acts true to form during his trip, he will perform his usual double talk routine. He will say things that make his liberal fans happy, such as making bland comments about Palestinian rights. Such talk should be ignored because Obama loves nothing more than behind the scenes wheeling and dealing with people whom he allegedly opposes.

Just as he gave us sequestration and cuts to entitlement programs, he will mouth the right words but give Israel the go ahead on anything they want. Obama is after all the more effective evil. His common sense tells him that a shooting war against Iran would be difficult to pull off, but he has crushed the Iranian economy with sanctions. Iranians are going without food and medicines because the United States and NATO want them to submit to western dictates on nuclear production and on their very existence as a sovereign nation.

One by one, the dominoes have fallen to the Obama regime. On this tenth anniversary of the occupation of Iraq, it is important to remember that Barack Obama made good on the neo-con dream of an American empire. He has gone where Reagan and the Bush presidents would not. He killed Gaddafi, he is destroying Syria, he is sending troops to occupy the African continent.

If anyone can get away with making Israeli fantasies of regional domination come true, it is Obama.

If the flies on the wall during the Obama and Netanyahu meetings could talk, they would have much to tell us. Netanyahu is likely to get his own version of a sequestration deal. A promise to cease and desist from showing badly made drawings of Iranian bombs in exchange for patience and a certainty that the United States will live up to its promise to be Israel’s best friend. Obama’s diabolical ability to make his supporters believe that he isn’t doing things he clearly is doing will come in handy when dealing with the likes of Netanyahu.

The United States will do as it has done for decades. It will keep vetoing United Nations resolutions which criticize Israel. It will keep arming Israel and agreeing to settlements which steal Palestinian land. When Israel decides to massacre people in Lebanon or Gaza or anywhere else, the United States government will either voice support or be silent.

Obama’s relationship with Israel and its American Zionist supporters is but one example of why the ruling classes chose him for the presidency. As we have pointed out in Black Agenda Report, pax Americana could only succeed if the brand was rebooted. “So much face was lost, it required that the Empire put a new, Black face forward, so as to resume the game under (cosmetically) new circumstances.”

The nonsensical dance goes something like this. Racists attack Obama. Progressives defend Obama. Obama goes behind closed doors to do what progressives say they don’t want. Obama lies and claims he didn’t do what he in fact did. Progressives are happy. The world suffers anew.

Obama is not without pride and ego. He did make Netanyahu wait for a meeting after he so publicly backed Romney. Ultimately though, he does what the system requires of him. In the end, Israel will get a pass or even American help for its next nefarious plan. No listening is needed to make that prediction.

Margaret Kimberley lives in New York City and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgendaReport.com.

March 20, 2013 Posted by | Corruption, Ethnic Cleansing, Racism, Zionism, Progressive Hypocrite | , , , , , | Leave a comment

Fifteen Benefits of the War on Drugs

By Kevin Carson | Center for a Stateless Society | March 10, 2013

With American drug use levels essentially the same as — and levels of drug-related violence either the same as or lower than — those in countries like the Netherlands with liberal drug laws, public support for the War on Drugs appears to be faltering. This was most recently evidenced in the victory of major drug decriminalization initiatives in Colorado and Washington. Some misguided commentators go so far as to say the Drug War is “a failure.” Here, to set the record straight, are fifteen ways in which it is a resounding success:

1. It has surrounded the Fourth Amendment’s “search and seizure” restrictions, and similar provisions in state constitutions, with so many “good faith,” “reasonable suspicion” and “reasonable expectation of privacy” loopholes as to turn them into toilet paper for all intents and purposes.

2. In so doing, it has set precedents that can be applied to a wide range of other missions, like the War on Terror.

3. It has turned drug stores and banks into arms of the state that constantly inform on their customers.

4. Via programs like DARE, it has turned kids into drug informants who monitor their parents for the authorities.

5. As a result of the way DARE interacts with other things like Zero Tolerance policies and warrantless inspections by drug-sniffing dogs, the Drug War has conditioned children to believe “the policeman is their friend,” and to view snitching as admirable behavior, and to instinctively look for an authority figure to report to the second they see anything the least bit eccentric or anomalous.

6. Via civil forfeiture, it has enabled the state to create a lucrative racket in property stolen from citizens never charged, let alone convicted, of a crime. Best of all, even possessing large amounts of cash, while technically not a crime, can be treated as evidence of intent to commit a crime — saving the state the trouble of having to convert all that stolen tangible property into liquid form.

7. It has enabled local police forces to undergo military training, create paramilitary SWAT teams that operate just like the U.S. military in an occupied enemy country, get billions of dollars worth of surplus military weaponry, and wear really cool black uniforms just like the SS.

8. Between the wars on the urban drug trade and rural meth labs, it has brought under constant harassment and surveillance two of the demographic groups in our country — inner city blacks and rural poor whites — least socialized to accept orders from authority either in the workplace or political system, and vital components of any potential movement for freedom and social justice.

9.In addition, it brings those who actually fall into the clutches of the criminal justice system into a years-long cycle of direct control through imprisonment and parole.

10. By disenfranchising convicted felons, it restricts participation in the state’s “democratic” processes to only citizens who are predisposed to respect the state’s authority.

11. In conjunction with shows like Law and Order and COPS, it conditions the middle class citizenry to accept police authoritarianism and lawlessness as necessary to protect them against the terrifying threat of people voluntarily ingesting substances into their own bodies.

12. Through “if you have nothing to hide you have nothing to fear” rhetoric, it conditions the public to assume the surveillance state means well and that only evildoers object to ubiquitous surveillance.

13. In conjunction with endless military adventures overseas and “soldiers defend our freedoms” rhetoric, it conditions the public to worship authority figures in uniform, and predisposes them to cheerfully accept future augmentations of military and police authority without a peep of protest.

14. It creates enormously lucrative opportunities for the large banks — one of the most important real constituencies of the American government — to launder money from drug trafficking.

15. Thanks to major drug production centers like the Golden Triangle of Southeast Asia, the opium industry in Afghanistan, and the cocaine industry in South America, it enables the CIA — the world’s largest narcotrafficking gang — to obtain enormous revenues for funding black ops and death squads around the world. This network of clandestine intelligence agencies, narcotraffickers and death squads, by the way, is the other major real constituency of the American government.

The Drug War would indeed be a failure if its real function was to reduce drug consumption or drug-related violence. But the success or failure of state policies is rightly judged by the extent to which they promote the interests served by the state. The Drug War is a failure only if the state exists to serve you.

~

Kevin Carson is a senior fellow of the Center for a Stateless Society (c4ss.org) and holds the Center’s Karl Hess Chair in Social Theory. He is a mutualist and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: A Libertarian Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation, and his own Mutualist Blog.

March 12, 2013 Posted by | Civil Liberties, Corruption, Economics, Timeless or most popular | , , , , , , , | Leave a comment

Will the World Bank Stop Investing in Campesino Assassinations?

By Arthur Phillips | CEPR Americas Blog | March 8, 2013

On February 27, the office of the Compliance Advisor/Ombudsman (CAO) for the World Bank’s International Finance Corporation (IFC) launched an audit of the lending arm’s $30 million investment in Tegucigalpa-based Corporación Dinant, which produces palm oil and food products. The audit comes in response to widespread claims of violence, intimidation, and illegal evictions carried out by Dinant’s private security guards in Honduras’ Bajo Aguán valley, the center of the country’s ongoing land struggle. In offering its resources and reputation to the company, the World Bank and its member countries are complicit in the deaths of countless innocent farmers.

The COA’s review began just two days after the United Nations Working Group on the use of mercenaries urged the Honduran government “to properly investigate and prosecute crimes committed by private security guards and to ensure that victims receive effective remedies.” A delegation from the Working Group was in the country from February 18 to 22, when it met with government officials and representatives of civil society and the private sector, including security firms. The delegates voiced their particular concern about the “alleged involvement of private security companies hired by landowners in widespread human rights violations including killings, disappearances, forced evictions and sexual violence against representatives of peasant associations in the Bajo Aguán region.” Dinant is the largest single landholder in the region.

An appointed panel of unnamed experts is currently convened in Washington, D.C., to review both the IFC’s adherence to its social and environmental policies and the role Dinant has played in the abuses. Many human rights observers consider the company’s owner, Miguel Facussé, to be one of the country’s most powerful men and hold him responsible for the killings of dozens of campesinos.

The audit had been a long time coming. On November 19, 2010, the human rights organization Rights Action wrote a letter to the World Bank’s then-president Robert Zoellick demanding that the financial institution suspend its funding to Honduras. The group cited the “context of grave human rights abuses and lack of independence of the justice system” as grounds to withhold funding, and characterized support for Dinant as “a case of gross negligence of the World Bank’s human rights and due diligence obligations.” In the letter, Rights Action also noted that “at least 19 farmers in this region have been killed in the context of conflicts with biofuel industry interests.” (In a new report released two weeks ago, the same group declared that 88 farmers and their supporters have been killed in Bajo Aguán since January 2010, most of them in targeted assassinations.)

In the ensuing period, the office of the CAO maintained discussions with local civil society organizations and in April 2012, CAO Vice President Meg Taylor informed the IFC that her office was initiating an appraisal of the funding group’s investment in Dinant. That appraisal, having found sufficient grounds for further investigation, culminated this August in the decision to conduct the current audit.

A diverse group of international organizations, including Oxfam, Vía Campesina and the Latin American Working Group, welcomed CAO’s decision. In a co-signed letter, though, the groups expressed their firm demand that the IFC halt its financial cooperation with the palm oil company

until a) clear evidence is provided of significant progress in overcoming impunity of crimes and human rights abuses committed against organized peasants and their supporters in the Lower Aguán; and b) a comprehensive, just, peaceful and sustainable resolution is provided to the conflicts over land between the Corporación Dinant, the government of Honduras and the local peasant movements.

The panel is scheduled to conclude its audit on March 8.

On Friday, March 1, while the CAO panel gathered in Washington, journalist Carlos Augusto Lara Cruz was reportedly threatened by a Dinant employee while covering a confrontation between campesinos and a military unit. It must be noted that Honduran human rights defenders have consistently and credibly accused military and police units of collaborating with Dinant security guards in kidnapping, torturing, and murdering land rights activists.

One of the latest assassinations in the area took place on Thursday, February 21, when lawyer José Andrés Andrade Soto was shot dead in the town of Tocoa. Andrade Soto led the regional office of the National Agrarian Institute until former president Manuel Zelaya was deposed in the June 2009 coup. Today, farmer organizations continue to struggle for land titles that the Zelaya government granted to them shortly before it was overthrown.

As part of its Summary of Proposed Investment, written before the program’s approval in order to boost the institution’s transparency, the IFC described its cooperation with Dinant as an opportunity to help small farmers in Bajo Aguán. It also declared that there was no controversy regarding the land in question. “Land acquisition is on a willing buyer-willing seller basis, and there is no involuntary displacement of any people,” the report assured.

Since that report was published, scores of campesinos have been assassinated for efforts to re-appropriate their rightful land. The World Bank and its member countries bear some degree of responsibility for their deaths. No matter the outcome of the CAO audit, the IFC should apologize for the suffering in which it has been complicit and should immediately revoke its support for Facussé and Corporación Dinant.

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March 8, 2013 Posted by | Corruption, Ethnic Cleansing, Racism, Zionism, Subjugation - Torture | , , , , , , | Leave a comment

The Green Green Gold of Ethiopia

By GRAHAM PEEBLES | CounterPunch | March 8, 2013

Ancestral land that for generations has served as home and livelihood for hundreds of thousands of indigenous people in Ethiopia is being leased out, on 99-year renewable contracts at nominal sums to foreign corporations. The land giveaway or agrarian reforms as the government would prefer to present them began in 2008 when the Ethiopian government, under the brutal suppressive Premiership of Meles Zenawi invited foreign countries/corporation to take up highly attractive deals and turn large areas of land over to industrial farming for the export of crops. India, China and Saudi Arabia were all courted and along with wealthy Ethiopians have eagerly grabbed large pieces of land at basement prices; rates vary from $1.10 to $6.05 per hectare (HA), comparable land in India would set you back $600 per ha.

A total of 3,619,509 ha, the Oakland Institute (OI), a US based think tank, estimate has been leased out. Land made available by the forced re-location of hundreds of thousands of indigenous people under the government’s universally condemned Villagization progamme, which aims to forcibly re-locate over 1.5 million people from their homes.

Indian corporations have taken the lion’s share, acquiring around 600,000 ha concentrated in Gambella and Afar, split between 10 investing companies. The term ‘investing’ implies benefits for Ethiopia, which is misleading; ‘profiteering’, or ‘exploiting’ sits closer to the truth of these land deals, as the OI make clear, “taking over land and natural resources from rural Ethiopians, is resulting in a massive destruction of livelihoods and making millions of locals [farmers and pastoralist communities] dependent on food handouts”. With small scale farmers being evicted from their land, prices of staples such as Teff, used by millions throughout Ethiopia to make Injera (bread), has rocketed in price, according to Ethiotribune 22/5/2012, increasing fourfold since 2008.

Corporate expansionism: small change big profits

In line with its ambitions of diversity and world food dominance – Karuturi Global, the world’s largest grower of roses, leads the Indian charge, leasing 311,700 ha in Gambella. Not satisfied with this, GRAIN (an international NGO, working to support small farmers) report Mr.Karuturi “wants to set up farming operations [throughout Eastern and Southern Africa] on more than 1 million [ha]” – too much never enough in corporate expansionism.

Almost a quarter of Gambella’s 25 million ha has been earmarked by the federal government for agricultural ‘development’. Karuturi, whose profits “rose 55.13% to Rs 1.21 crore [10 million] in the quarter ended June 2012”, took their chunk without even seeing it, paying only $1.10 per ha. For the Indian giant it is, John Vidal in ‘Land Grab Ethiopia (LGE)’ says, “the sale of the century”. ‘Green Gold’ is how Mr. Karuturi in GRAIN (‘Who’s Behind the Land Deals’), describes his 300,000 ha of Ethiopian soil, “for which he pays $46 per ha per year including water and labour and expects at least $660 [per ha] in profit per year”. (Ibid)

In addition to paddy, Indian farmers are being sub-contracted to grow maize, cereals, palm oil and sugarcane amongst others. All of which are destined for export, either to India or Europe, where companies farming in Ethiopia (and other Sub-Saharan African nations), benefit from lower import duties applied to developing countries, notwithstanding the fact that the land is leased to, and the crops produced and sold by, multi million-rupee rich companies.

Another major Indian company leasing land in Gambella is the decidedly green sounding BHO Bioproducts. Following the corporate rhetoric, BHO Chief Operating Officer Sunny Maker told Bloomberg in 2010 that, they have “plans to invest more than $120 million in rice and cotton production”, which, by 2017, should “generate about $135 million a year from sales divided equally between domestic [Indian] and international markets.” He added that the “incredibly rich fertile land”, will all be “cleared within the next three years”. Cleared yes, violently, indiscriminately and totally; villages, people, forests, woodland, all destroyed, burnt, relocated, displaced, desecrated. The governments promise to such prized investors is that the land is handed over stripped of everything and everyone. Dissent is not allowed and dealt with brutally should it occur, as Anuradha Mittal, Executive Director of OI makes clear. “The repression of social resistance to land investments is even stipulated in land lease contracts, [it is the] state’s obligation to ‘deliver and hand over the vacant possession of leased land free of impediments’ and to provide free security ‘against any riot, disturbance or any turbulent time.”

The ‘rich fertile land’, lovingly cultivated at the hands of the men and women who have farmed it for generations, is unlikely to be nurtured so carefully by Indian (or indeed Chinese or Saudi Arabian) corporations with their thirsty ‘GM seeds’ (Ibid). For as Oxfam in their detailed report ‘Land and Power’ diplomatically point out, “investors short time scales may tempt them into unsustainable cultivation, undermining agricultural production.”

The devolution of development

Land is a prime cut asset in the commercialization of everything, everywhere, and the “rich fertile land” in Ethiopia is cheap, even by Sub-Saharan African standards. Along with long-term leases, the government offers a neat bundle of carrots, including tax incentives and unrestricted export clauses, incentives that the OI state “deny African countries economic benefits” from land deals that the Ethiopian regime wraps up neatly in its complete disregard for the human rights of the indigenous people. Government indifference encouraging corporate irresponsibility – and they need little encouragement. Businesses hardly seem to be grabbing the land, so much as accepting it as a gift, parceled up and ready to be torn open.

In exchange for such attractive deals, the Ethiopian government has been extended, the OI reports “a $640 million line of credit… over five years to boost sugar production in the country’s Lower Omo region”. Not a philanthropic gesture, more a sales trap by India’s EXIM (export and import) Bank, who stipulate, “Ethiopia must import 75% of the value of the credit line in the form of Indian goods and services.”

The government-owned sugar plantations in the Lower Omo are themselves attracting a great deal of concern and criticism from human rights groups, who highlight the environmental and human damage being perpetrated. Government acts of violence and abuse, in the various land deal regions, are justified under the overused and misleading title of ‘development’; a term appropriated by the international monetary machine – the World Bank and International Monetary Fund (IMF) primarily – misunderstood and distorted by government development agencies, acting in line with foreign affairs policies by promoting national self interest and perverted by the corrupt ideologically-blinkered governments of developing nations. An undeveloped ideological trinity whose actions have drained the 21st century sacred cow and its stable mate ‘growth’ – dry of any true and relevant meaning. Far from supporting human and or social development the “unfair terms and near give-away prices [of land deals]… are hindering development…. Foreign corporations and the World Bank are pressuring African leaders to give them exemptions from taxes, import and export duties, and local labor laws – not to mention water and mineral rights that could be worth billions”, the OI confirm.

More concerned with sitting at the top table and cultivating the right international allies than with doing their constitutional duty and serving the needs of the people, the Ethiopian government is in danger of giving away, and for peanuts, it’s ‘rich and fertile’ land to overseas companies who have no interest in Ethiopia, it’s environment, its culture and even less in its people.

Increasing hunger

Hunger and poverty stalk the land of both Ethiopia and India. 12 – 15 million people survive on food aid in Ethiopia, which ranks at the bottom of the World Hunger Index at 76. India, with the highest rate of malnourished children in the world, where 25% (around 270 million) of the world’s hungry live, despite the fact that, according to the World Food Programme (WFP), “the country grows enough food for its people”, comes in 65th of the hungriest nations, below Niger and the Sudan – neither of which, to my knowledge, boast 61 billionaires and 200,000 dollar millionaires unlike India. And whereas “most countries have made consistent progress in reducing hunger, India has seen hunger rise over the last decade compared with the late 1990s.”(Ibid) This so-called economic miracle nation refuses to feed it’s own people.

Food insecurity, the WFP makes clear is caused not by lack of produce, but by an unwillingness to share the Earths bounty equitably. The states in India with the greatest numbers suffering from hunger and malnutrition, as per WFP records, “include Madhya Pradesh, Chhattisgarh, Bihar, Jharkhand, Orissa, Rajasthan and Uttar Pradesh”; these are the states where the poorest (Adivasi – indigenous and Dalit) people in the country and quite possibly in the World happen to live. The poor are dying of hunger not because India cannot feeed everyone, as the United Nations report on regional cooperation makes crystal clear, “the root cause of hunger across the sub-region and the world today is not a lack of food. It is the economic and social distribution of that food which leaves populations undernourished and hungry.”

Men women and children living in dire poverty starve to death, in India, Ethiopia and throughout the world. They starve and die for want of the food that is rotting in warehouses, food served up to rats or destroyed by the Indian government, because it is cheaper to burn it than to distribute it to those in need. As Graziano da Silva, Director-General of the Food and Agriculture Organisation of the United Nations (26/01/13) said, “globally, a third of all food produced is wasted, and… if one could avoid this waste it would be possible to feed all the hungry people [in the world] and have food to spare.” Food to spare!Such is the inhumane ethos that underpins market fundamentalism, that allows men women and children, young and old to starve – simply because the do not have the financial means to feed themselves. Shame on governments Indian and the rest, that allow such inhumane injustice to prevail, as a wise teacher said, “throughout the world there are men, women and little children who have not even the essentials to stay alive; they crowd the cities of many of the poorest countries in the world… My brothers, how can you watch these people die before your eyes and call yourselves men”.

The commercialization of the countryside in India and Ethiopia, which is displacing large numbers of small-scale farmers and concentrating crop production in the hands of multi-nationals, is intensifying existing levels of hunger. Substantive agricultural reform and real development would see the army of skilled small scale producers, with generations of local knowledge and love of the land, supported with the needed capital and technology, given access to markets that corporations bring. Such an agrarian revolution, ethically founded, environmentally healthy and socially sustained, would build long-term food security and feed the hungry.

Soft targets easy profits

India as the WFP makes clear, has no domestic need for food produced by the overseas industrial farms that are causing such far-reaching damage, to the hundreds of thousands of displaced people of Ethiopia as well as the natural environment. The movement in Ethiopia mirrors what is taking place to a much greater degree in India. The government has shifted all support away from Indian farmers and is supporting the transfer of land from the rural poor to large companies – wealthy government benefactors, causing the displacement of millions (60 million to date, according to Arundhati Roy) of indigenous people.

Corporations are targeting countries with “poor governance”, Oxfam 7/02/2013 makes clear, that “allow investors to secure land quickly and cheaply…. [They] “Seem to be cherry picking countries with weak rules and regulations”. Needy nations like hungry people make easy targets for multi-national men, whose pockets governments are desperate to nestle inside. The driving force behind such destructive land developments, undertaken by corporations obsessed by an insatiable desire for growth and world leading economic development, is, as Oxfam suggests, profit and profit alone.

Graham Peebles is director of the Create Trust. He can be reached at: graham@thecreatetrust.org

March 8, 2013 Posted by | Corruption, Economics, Ethnic Cleansing, Racism, Zionism, Malthusian Ideology, Phony Scarcity, Timeless or most popular | , , , , , , , | Leave a comment

STATIN NATION

View another excerpt from the documentary film Statin Nation.

For more information, please visit www.statinnation.net

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March 3, 2013 Posted by | Corruption, Deception, Science and Pseudo-Science, Video | , , , , , | Leave a comment

Gasoline prices, a challenge to Obama

By Ralph Nader | February 28, 2013

Here we go again. A sudden surge in the price of gasoline and heating oil is followed by reported expressions of frustrated despair by hard-pressed consumers in the midst of silence from the oil companies and abdication of responsibility by the elected and appointed officials of federal and state governments.

The price of gasoline is up by about 50 cents in the past month, according to AAA, making the average gallon go for close to $4 per gallon in many parts of the country. Prices are even higher in California. AAA says that this “is the most expensive we’ve seen gasoline in the dead of winter.”

Every penny increase in the annual price of gasoline takes over $1.6 billion dollars from the pockets of American consumers (Source). That doesn’t even count the higher prices for heating oil homeowners are paying.

There was a time when even a few cents increase in the price of gasoline or natural gas would provoke Congressional investigations, actions by state Attorneys General, and condemnations of the producer countries, the OPEC cartel and Big Oil from presidents and the heads of antitrust divisions of the Justice Department or the Federal Trade Commission. That is, until smooth, smiling Ronald Reagan came to Washington, D.C. with his mantra that “government is not the solution; government is the problem.”

Well, now the multi-layered petroleum cartel has become institutionalized, having “gotten government off its back” and they’ve put the New York Mercantile Exchange speculators at the gaming tables.

There seems to be an adequate supply of crude oil in this recessionary global economy. What could be the cause of this latest price spike? The news media offer a spectrum of possible factors – restrictions on exports of Iranian oil imposed by western governments, instability in Syria and elsewhere in the volatile Middle East, oil hungry China, oil speculators on Wall Street and reduced refinery capacity in the U.S.

Each price surge in recent decades seems to have different principal causes. This time it seems to have been precipitated by surging prices of crude – easily manipulated – and in the U.S. the permanent or temporary shutdown for repairs, of too many refineries.

Believe it or not, the U.S. is now a net refined petroleum importer because of the continuing refusal by the industry to rebuild or expand refinery capacity on the very sites where many refineries have been shut down, often in favor of offshore, cheaper installations.

Whenever supply and demand for refined oil products is tight, all it takes is for one or two refineries to suspend operations, other than for repairs, and the prices surge all over the country.

This happened in January to a refinery in California, due to a fire, and more prominently the closure of a key refinery in Port Reading, New Jersey, owned by the Hess company. Five dollars a gallon gas “is a real possibility,” John Kilduff, partner at Again Capital, told Yahoo! Finance, adding “this is partly being driven by the lost refinery capacity of about one million barrels per day…that’s a lot.” (The U.S. consumes about 19 million barrels a day of refined petroleum products.)

So what can our so-called representatives in Washington do about a gouge that has angered almost all conservative and liberal consumers? Well, the Democratically-controlled Senate can start by holding investigatory hearings. The President can speak out more forcefully and indicate he may release some of the government’s crude oil reserves to increase supply.

He can order his Justice Department to at the very least subpoena pertinent oil industry information for starters.

Mr. Obama can forcefully back up Gary Gensler, his appointed, savvy Chairman of the Commodity Futures Trading Commission, who has been trying to rein in excessive speculation that drives up prices and punishes the motoring public.

In 2011 CFTC data showed that massive inflows of speculative money drove up prices. At that time, even Goldman Sachs analyst, David Greely, claimed Wall Street speculation in the futures market was driving up oil prices. Earlier, Rex Tillerson, the head of ExxonMobil, estimated that speculation was responsible for a more than $40 per barrel price increase when oil was just over $100 per barrel. Over the last month crude oil has ranged in price from $93-$120 per barrel.

Admiral Hyman Rickover who, more than 40 years ago, wisely said that there should always be government-owned shipyards to provide a yardstick by which to restrain the high prices and cost overruns being charged by private ship buildings manufacturing the Navy’s ships. That means, in this oil price context, that the government should own and operate some refineries for the armed forces. Any excess capacity could loosen the market with gasoline and heating oil when the corporate interests maneuver tight supplies for which they get immediately rewarded with cold cash.

Were Obama to direct some of his bully pulpit heat on those members of Congress who are marinated in oil, he might find more support from Capitol Hill for all these initiatives.

So call the switchboard at the White House comment line (202-456-1111) and tell the president that you are fed up and determined to drive less, carpool and walk more where possible, but that he, the president, must be more aggressive in taking on the staggeringly profitable and tax-favored big oil companies.

March 1, 2013 Posted by | Corruption, Economics, Malthusian Ideology, Phony Scarcity | , , , , | Leave a comment

US Dairy Industry Wants to Put Aspartame in Milk

By NICK MCCANN | Courthouse News Service | February 21, 2013

WASHINGTON – Dairy industry groups have asked the Food and Drug Administration to be able to put artificial sweeteners in milk, and not change the label, claiming that it is so consumers can “more easily identify its overall nutritional value”.

The Food and Drug Administration is asking for data related to those sweeteners.

The International Dairy Foods Association (IDFA) and the National Milk Producers Federation (NMPF) filed a petition in 2009 requesting that the FDA amend its standard of identity for milk.

The petition asked the agency to allow the use of “any safe and suitable” sweetener for milk and asked to amend the standards of identity for 17 other milk and cream products.

Those products include sweetened condensed milk, whipping cream, yogurt and eggnog, which the groups say should be allowed to have “safe and suitable” sweeteners.

The groups request that the FDA “allow optional characterizing flavoring ingredients used in milk (e.g. chocolate flavoring added to milk) to be sweetened with any safe and suitable sweetener – including non-nutritive sweeteners such as aspartame.”

FDA regulations currently only allow milk products to contain “nutritive sweeteners” (those with calories) which the agency generally recognizes as safe.

The groups say the amendments “would promote more healthful eating practices and reduce childhood obesity by providing for lower-calorie flavored milk products.”

“They state that lower-calorie flavored milk would particularly benefit school children who, according to IDFA and NMPF, are more inclined to drink flavored milk than unflavored milk at school,” the FDA wrote in its notice.

The groups also say they would help with programs that aim to improve nutrition in school meals and argue that the proposed amendments would promote “honesty and fair dealing in the marketplace,” the FDA wrote.

The agency published a notice of the petition on Wednesday requesting comments, data, and information about the proposed amendment to the identity of milk products. The comments are due by May 21.  

Read Courthouse News’ Environmental Law Review.

February 26, 2013 Posted by | Corruption, Deception | , , , , , , | Leave a comment

LIBOR: Viewing the Biggest Financial Crime in History

By DARWIN BOND-GRAHAM | CounterPunch | February 26, 2013

It’s been five years since a few academics and journalists began to dig up evidence that something was wrong with the London Inter-Bank Offered Rate, or LIBOR (pronounced appropriately as “lie-bore.”) The data that curious researchers were compiling couldn’t be explained using the prevailing definition of what LIBOR supposedly was: a trustworthy interest rate that accurately gauged the market price of borrowed US dollars held overseas by the world’s biggest banks. Instead, their findings pointed toward something other than an idealized neoliberal market, influenced only by impersonal supply and demand forces. Many began to realize that the data could easily be explained if the banks were rigging the LIBOR rate in their favor. Strange discrepancies in LIBOR’s correlation to other rates, and to the economic fundamentals of the bank companies responsible for formulating the rate, showed something seriously amiss, but it made sense if the banks were cheating.

The motives of the banks have been clear from the beginning. A few banks that dominate the marketplace for derivatives stand to make billions if LIBOR moves in their favor on particular days when contractual payments between them and their customers come due. They therefore suppressed the rates in order to skim billions of dollars off derivatives and investments. Later these same banks suppressed LIBOR rates to create the illusion that their balance sheets were robust during the financial crisis. This also allowed them further rounds of money-siphoning from their unwitting derivatives customers.

Until recently LIBOR rates have been set by a panel of banks that are members of the British Bankers Association (BBA). The BBA is a private industry group established almost 100 years ago to lobby for the financial industry in one of its global hubs, London. The BBA really came into power in the mid-1980s with the creation of LIBOR. LIBOR was created to further integrate the giant global money market in US dollars held in overseas banks or holding companies, and therefore unregulated by the US Federal Reserve. Called “Eurodollars,” because they originally were dollar savings accumulated in European banks, especially banks in London, these funds quickly became a de facto global currency. LIBOR began as a way for the banks to standardize investment products for these vast pools of American dollars flowing through Europe, and later Japan, the Middle East, and Latin America. By the 1990s LIBOR had become such an important set of interest rates, and US dollars held overseas had becomes such an important source of credit for US consumers, that LIBOR became the key global interest rate around which many financial products were pegged. As LIBOR became more and more important to the globalization of finance, it accrued a sort of official, trusty gloss; nearly everyone assumed that LIBOR was a market rate reflecting competition. Instead, LIBOR has probably all along been a fudged rate, determined less by vast market forces and invisible hands, and more by the vulgar self-interest and power of the elite banks that set LIBOR rates.

Last year government investigations into this globe-spanning crime —rightly called the biggest financial scam in all of history— led to multi-billion dollar fines against Barclays, the Royal Bank of Scotland, and UBS, the 7th, 8th, and 20th largest banks in the world, respectively. Criminal investigations spearheaded by US, UK, Japanese, Canadian, Swiss, and Singaporean authorities are ongoing and aimed at other banks such as Citigroup, JP Morgan, Bank of America, and other “too big to fail” institutions. More details of the crime will be forthcoming as e-mails, internal documents, phone tapes, text messages, and other evidence, is made public, and as the banks are forced to pay significant fines, and sign plea agreements.

While this scandal might seem worlds away, concerning complex financial concepts and obscure money market instruments dealt by bankers out of skyscraper offices in the City of London, the importance of uncovering the complete truth about the LIBOR rigging conspiracy cannot be overstated for local communities across the United States, especially here in California.

Why? First, LIBOR has been used since the 1990s to determine cash flows on interest rate swaps that local governments have purchased from banks to insure themselves against wild swings in variable interest rates owed on billions of municipal debt. Messing with LIBOR messes with the payments due on these instruments.

Second, LIBOR has also been used as a main interest rate of reference for an array of investment products that yield a variable return, dipping and rising in concert with LIBOR. Local and state governments have used these investment products, called “municipal derivatives reinvestment products” to temporarily park public funds, while pension systems and government enterprises like utilities use them make investments. Governments and public agencies earn LIBOR rate returns on their dollars invested in numerous kinds of municipal derivatives, so if LIBOR is illegally fixed downward, they earn less income.

Through both of these forms of exposure, local governments have potentially been harmed by LIBOR-fixing perpetrated by the banks, often times the very same banks that have sold them swaps or municipal derivatives investment products.

California is fast emerging as a center of investigation and litigation into the LIBOR-fixing conspiracy. California is the largest single municipal debt market in the United States, and one of the largest in the world. Last year alone the state of California and its cities, counties, school districts, and other public entities issued $65.7 billion in total public debt. Because of California’s regressive tax structure and chronic budget crises, the state’s multitude of governments have been among the most aggressive in issuing variable rate debt hedged with interest rate swaps.

The Golden State’s local governments have also been the largest purchasers of municipal derivatives contracts from banks because streams of tax and fee revenues often don’t match up with the dates that payments to public employees and contractors come due. Collusive suppression of LIBOR rates by the 16-member panel who were trusted to provide accurate quotes could mean that California local governments have paid untold millions to their interest rate swap counterparties (the banks) that should otherwise have remained in budgets and used to fund school construction, bus lines, street paving, water and sewerage services, etc.

In the 1990s and 2000s local governments across California increasingly issued bonds with variable rates. Investment bank underwriters and municipal debt advisers from the private sector encouraged variable rate bond financing because it promised lower interest rates for California’s cash-strapped municipalities. To hedge against the risk that variable rates might explode, as they did in the 1980s, the banks sold interest rate swaps to local governments. The swaps effectively converted floating rate debt into a fixed rate. Under a typical swap contract the bank seller agrees to pay a floating rate designed to mimic the variable rate interest on the bond debt, and in return the local government agrees to pay a fixed rate. I’ve written elsewhere about how this deal blew up and created a financial injustice when variable interest rates plummeted during and after the Financial Crisis, but the LIBOR rigging conspiracy adds to these harms. The US government bailed out the banks and assisted them in taking “toxic” derivatives assets off their hands, but stood idly by while cities, counties, and public agencies suffered without aid during the Financial Crisis, allowing derivatives instruments on the public’s books to blow up and drain budgets. At this very moment the banks perpetrated an illegal scam to suck even more money from the public via further depression of LIBOR.

Barclays, RBS, UBS, and other banks worked together to suppress LIBOR below even the depths to which it sank after 2008. A number of lawsuits filed by various cities, counties, and public agencies in California asserts the banks did this to skim off an unknown, but very large, amount of money from their public victims, and also to bolster their own balance sheets during the crisis. By suppressing LIBOR the banks ensured that the net difference between the variable rates they owed, and the fixed rates the public was paying on swaps, was wider than it would otherwise have been. This net difference meant that the public owed the banks higher amounts when the interest rate swap payments came due (usually twice a year).

For San Francisco this could mean that millions have been stolen from the capital budget of its Airport. SFO currently has seven interest rate swaps it has purchased to convert variable rate bond debt into synthetic fixed rates. The airport’s counterparties on its swaps included JP Morgan Chase, Merrill Lynch (owned by Bank of America), and Goldman Sachs. Each of these banks likely benefited from conspiratorial suppression of LIBOR, even if it was by just a few basis points (hundredths of a percent). JP Morgan Chase and Merrill’s parent Bank of America are both members of the panel that sets LIBOR, and are both believed to have played a role in the conspiracy.

San Francisco’s pension system may have also been raided by the banks through its speculative investments in swaps. According to the most recent audit of the San Francisco Retirement System’s portfolio, the city’s pension system holds two interest rate swaps on its books with a notional value of $15 million. In prior years, SFERs held other swaps. In 2010, the Retirement System’s audit showed three interest rate swaps with a total notional value of $41 million. Over the last two years these swaps drained $5.3 million from the pension system, and some of these losses might have been due to the downward manipulation of LIBOR. Also on the Retirement System’s books are other investments in bank loans, options, and other securities that might have been impacted by the LIBOR fraud.

San Francisco’s LIBOR damages are probably small in comparison to other local governments and public agencies. The East Bay Municipal Utility District has already filed a lawsuit in federal court alleging damages from bank rigging of LIBOR. The water district’s complaint, filed in January of 2013, alleges that LIBOR suppression drained potentially millions, again from interest rate swap agreements with some of the very banks that sit on the LIBOR-panel: Citibank, JP Morgan Chase, and Bank of America. East Bay MUD lists nine interest rate swaps potentially affected by LIBOR rigging in its lawsuit.

East Bay MUD’s swaps had a total notional amount of $481 million in 2012, according to the utility’s most recent financial report. Downward manipulation of LIBOR by just 10 to 50 basis points (1/10th to 1/2 of a percent) could have drained between $481,000 to $2,400,000 through East Bay MUD’s swap payments every six months. Over a few years, say the conspiracy’s 2007-2010 time-frame alleged in EBMUD’s lawsuit, this would add up to millions of dollars stolen by the banks.

The cities of Richmond, San Diego, and Riverside, and the County of San Mateo, are other California governments that have now filed lawsuits against the banks responsible for setting LIBOR. All of these lawsuits have been consolidated into a larger class action case currently being heard in the U.S. District Court, Southern District of New York, before Judge Naomi Buchwald. There are now about two dozen LIBOR manipulation lawsuits that have been filed and consolidated in New York. The lead case is the City of Baltimore and the New Britain Firefighters’ and Police Benefit Fund lawsuit against the 16-bank LIBOR panel, filed in April of 2012.

More California cities, counties, and public agencies are expected to file their own lawsuits soon, however. CalPERS, which has numerous investments that fluctuate in value and yield with LIBOR, is also said to be investigating its own exposure to rate rigging.

Darwin Bond-Graham is a sociologist and author who lives and works in Oakland, CA. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion.

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February 26, 2013 Posted by | Corruption, Deception, Economics | , , , , | Leave a comment

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