Sometimes Conspiracy Theories Are True
By Alexander Cockburn | The American Conservative | July 1, 2010 Issue
Unlike the French or the Italians, for whom conspiracies are an integral part of government activity, acknowledged by all, Americans have been temperamentally prone to discount them. Reflecting its audience, the press follows suit. Editors and reporters like to offer themselves as hardened cynics, following the old maxim “Never believe anything till it is officially denied,” but in truth, they are touchingly credulous, ever inclined to trust the official version, at least until irrefutable evidence—say, the failure to discover a single WMD in Iraq—compels them finally to a darker view.
Once or twice a decade some official deception simply cannot be sedately circumnavigated. Even in the 1950s, when the lid of government secrecy was more firmly bolted down, the grim health consequences of atmospheric testing of nuclear weapons in the South Pacific, Utah, and Nevada finally surfaced. In the late 1960s, it was the turn of the CIA, some of its activities first exposed in relatively marginal publications like The Nation and Ramparts, then finally given wider circulation.
Even then the mainstream press exhibited extreme trepidation in running any story presuming to discredit the moral credentials of the U.S. government. Take assassination as an instrument of national policy. In these post-9/11 days, when Dennis Blair, the director of national intelligence, publicly declares, as he did before the House Intelligence Committee, that the government has the right to kill Americans abroad, it is easy to forget that nothing used to more rapidly elicit furious denials from the CIA than allegations about its efforts, stretching back to the late 1940s, to kill inconvenient foreign leaders. Charges by the Cubans through the 1960s and early 1970s about the Agency’s serial attempts to murder Fidel Castro were routinely ignored, until finally the Senate hearings conducted in 1976 by Sen. Frank Church elicited a conclusive record of about 20 separate efforts.
Indeed, there was a brief window in the early ’70s, amid revulsion over the Vietnam War and the excitement of the Watergate hearings, when the press exhibited a certain unwonted bravado, in part because investigative committees of Congress, enlivened by Watergate, made good use of subpoena power and immunity from threats of libel. Hence the famous Lockheed bribery hearings.
Decorum soon returned, however, amid stern warnings by the late Katharine Graham, chairman of the Washington Post Company. “The press these days should … be rather careful about its role,” she told the Magazine Publishers’ Association. “We had better not yield to the temptation to go on refighting the next war and seeing conspiracy and cover-up where they do not exist.” Mrs. Graham’s employees duly took heed. “Conspiracy-mongering” can be a deadly charge leveled at a reporter or an editor.
Just over 20 years later, in 1996, the Washington Post fired off a six-part series, concocted with the help of Harvard profs, decked out with doleful front-page headlines such as “In America, Loss of Confidence Seeps Into Institutions.” Cutting through the underbrush of graphs and pizza-slice charts, one found something simple: it’s as if P.T. Barnum set forth across the country to see if one was being born every minute, got to the edge of the Midwest, looked around and then muttered to himself mournfully, “No suckers!” The Post’s earnest message was that mistrust is bad and that it is better for social stability and contentment to trust government, as in the golden ’50s, which, the older crowd may recall, was a time when government told soldiers it was safe to march into atomic test sites and when government-backed doctors offered radioactive oatmeal to retarded kids without their parents’ knowledge.
The mainstream press—what’s left of it—sees an important duty to foster confidence in public institutions. On May 6, right after disclosure of Goldman Sachs’ double dealing, came the plummet and surge in the stock market that for a brief moment sliced 998 points off the Dow, prompting serious losses to small investors who had placed stop-loss orders on individual stocks. On Comedy Central, Jon Stewart showed a stream of news anchors characterizing everything from the GM bailout to the mortgage crisis to the rescue of AIG as caused by a “perfect storm.” Stewart said, “I’m beginning to think these are not perfect storms. I’m beginning to think these are regular storms and we have a s—ty boat.” But the mainstream press zealously steered clear of suggestions that market manipulators might have engineered a killing.
The integration of journalists into Washington’s policy apparatus, with its luxuriant jungle of lobby shops thinly disguised as nonprofits, with their seminars, “scholars in residence,” and fellowships, has led to a decorous tendency to ignore the grime of politics at the level of corruption, blackmail, and bribery—mostly inaccessible anyway without the power of subpoena. There’s an interesting genre of books, some written by political fixers in the aftermath of exposure or incarceration—Bobby Baker’s Wheeling and Dealing is a good example—that usefully describe the grime, but these are rarely reviewed in respectable journals.
Sometimes a cover-up does surface, propelled into the light of day by a tenacious journalist. Then there’s the outraged counterattack. Are you suggesting, sir, that the CIA connived to smuggle cocaine into America’s inner cities? Gary Webb’s career at the San Jose Mercury News was efficiently destroyed. Those who took the trouble to read the subsequent full report of CIA Inspector General Fred Hitz found corroboration of Webb’s charges. But by then the caravan had moved on. A jury issued its verdict, but the press box was empty.
Maybe now the decline in power of the established corporate press, the greater availability of dissenting versions of politics and history, and the exposure of the methods used to coerce public support for the attack on Iraq have engendered a greater sense of realism on the part of Americans about what their government can do. Perhaps the press will be more receptive to discomfiting stories about what Washington is capable of in the pursuit of what it deems to be the national interest. Hopefully, in this more fertile soil, Syd Schanberg’s pertinacity will be vindicated at last, and those still active in politics who connived at this abandonment will be forced to give an account. 
Canadian Government Pays Organization To Troll Political Chat Forums
Paul Joseph Watson | Prison Planet.com | May 24, 2010
The next time you struggle to comprehend how someone could spend their time trolling the Internet in order to defend and downplay whatever government cover-up or abuse is in the news this week, consider the fact that they may be on a government payroll.
The Canadian government has been caught paying a media group to monitor online political discussion and respond to “misinformation,” in other words to spread state-sanctioned propaganda, in the latest scandal to hit the Harper administration.
“Under the pilot program the Harper government paid a media company $75,000 to monitor and respond to online postings about the east coast seal hunt,” reports News1130.
“The government has a lot of power, that it feels the need to monitor public bulletin boards, or places where people express views and then to respond to that, seems to me going beyond a reasonable action the government should be taking,” said UBC Computer Science professor and President of the BC Freedom of Information and Privacy Association, Richard Rosenberg.
A poll carried on the News1130 website shows that the majority of respondents, 77 per cent, are not intimidated by the fact that the government is monitoring their online conversations, and would not regulate the information they post on the Internet.
Accusations that people who defend the seemingly indefensible in the aftermath of government atrocities, wars and scandals are in the pay of unscrupulous authorities, circulate on a regular basis. But the fact is that governments and transnational corporations have made a habit of using the Internet to spread propaganda by using individuals who pose as neutral observers.
The innovator of these “black propaganda” techniques was undoubtedly Monsanto, who as far back the late 90’s were creating “fake citizens” via their PR front company Bivings to post messages on Internet bulletin boards lauding the virtues and scoffing at the dangers of genetically modified food.
In the 21st century, governments try to harness the power of manufacturing fake consensus in order to dictate reality and justify their actions.
Last year, the Israeli government announced that it would be setting up a network of bloggers to combat websites deemed “problematic” by the Zionist state following a massive online backlash to Israel’s brutal bombing of Gaza.
Israel’s goal was to flood Internet message boards in English, French, Spanish and German with their own PR agents who would attempt to manufacture a contrived consensus that the IDF’s actions were justified.
Like Israel, the U.S. military industrial complex hires armies of trolls to spew propaganda in defense of the war on terror and in support of bombing whatever broken-backed third world country is being targeted next.
CENTCOM has programs underway to infiltrate blogs and message boards to ensure people, “have the opportunity to read positive stories,”presumably about how Iraq is a wonderful liberated democracy and the war on terror really is about protecting Americans from Al-CIAda.
In May 2008, it was revealed that the Pentagon was expanding “Information Operations” on the Internet with purposefully set up foreign news websites, designed to look like independent media sources but in reality carrying direct military propaganda.
More recently the New York Times published an exposé on how privately hired operatives were appearing on major US news networks promoting the interests and operations of the Pentagon and generating favorable news coverage of the so-called war on terror while posing as independent military analysts.
This operation was formally announced In 2006 when the Pentagon set up a unit to “better promote its message across 24-hour rolling news outlets, and particularly on the internet”.
Again, the Pentagon said the move would boost its ability to counter “inaccurate” news stories and exploit new media.
Last year, the US Air Force announced a “counter-blog” response plan aimed at fielding and reacting to material from bloggers who have “negative opinions about the US government and the Air Force.”
The plan, created by the public affairs arm of the Air Force, includes a detailed twelve-point “counter blogging” flow-chart that dictates how officers should tackle what are described as “trolls,” “ragers,” and “misguided” online writers.
On Being the Wrong Size
By Willis Eschenbach | May 23, 2010
This topic is a particular peeve of mine, so I hope I will be forgiven if I wax wroth.
There is a most marvelous piece of technology called the GRACE satellites, which stands for the Gravity Recovery and Climate Experiment. It is composed of two satellites flying in formation. Measuring the distance between the two satellites to the nearest micron (a hundredth of the width of a hair) allows us to calculate the weight of things on the earth very accurately.
One of the things that the GRACE satellites have allowed us to calculate is the ice loss from the Greenland Ice Cap. There is a new article about the Greenland results called Weighing Greenland.
Figure 1. The two GRACE satellites flying in tandem, and constantly measuring the distance between them.
So, what’s not to like about the article?
Well, the article opens by saying:
Scott Luthcke weighs Greenland — every 10 days. And the island has been losing weight, an average of 183 gigatons (or 200 cubic kilometers) — in ice — annually during the past six years. That’s one third the volume of water in Lake Erie every year. Greenland’s shrinking ice sheet offers some of the most powerful evidence of global warming.
Now, that sounds pretty scary, it’s losing a third of the volume of Lake Erie every year. Can’t have that.
But what does that volume, a third of Lake Erie, really mean? We could also say that it’s 80 million Olympic swimming pools, or 400 times the volume of Sydney Harbor, or about the same volume as the known world oil reserves. Or we could say the ice loss is 550 times the weight of all humans on the Earth, or the weight of 31,000 Great Pyramids … but we’re getting no closer to understanding what that ice loss means.
To understand what it means, there is only one thing to which we should compare the ice loss, and that is the ice volume of the Greenland Ice Cap itself. So how many cubic kilometres of ice are sitting up there on Greenland?
My favorite reference for these kinds of questions is the Physics Factbook, because rather than give just one number, they give a variety of answers from different authors. In this case I went to the page on Polar Ice Caps. It gives the following answers:
Spaulding & Markowitz, Heath Earth Science. Heath, 1994: 195. says less than 5.1 million cubic kilometres (often written as “km^3″).
“Greenland.” World Book Encyclopedia. Chicago: World Book, 1999: 325 says 2.8 million km^3.
Satellite Image Atlas of Glaciers of the World. US Geological Survey (USGS) says 2.6 million km^3.
Schultz, Gwen. Ice Age Lost. 1974. 232, 75. also says 2.6 million km^3.
Denmark/Greenland. Greenland Tourism. Danish Tourist Board says less than 5.5 million km^3.
Which of these should we choose? Well, the two larger figures both say “less than”, so they are upper limits. The Physics Factbook says “From my research, I have found different values for the volume of the polar ice caps. … For Greenland, it is approximately 3,000,000 km^3.” Of course, we would have to say that there is an error in that figure, likely on the order of ± 0.4 million km^3 or so.
So now we have something to which we can compare our one-third of Lake Erie or 400 Sidney Harbors or 550 times the weight of the global population. And when we do so, we find that the annual loss is around 200 km^3 lost annually out of some 3,000,000 km^3 total. This means that Greenland is losing about 0.007% of its total mass every year … seven thousandths of one percent lost annually, be still, my beating heart …
And if that terrifying rate of loss continues unabated, of course, it will all be gone in a mere 15,000 years.
That’s my pet peeve, that numbers are being presented in the most frightening way possible. The loss of 200 km^3 of ice per year is not “some of the most powerful evidence of global warming”, that’s hyperbole. It is a trivial change in a huge block of ice.
And what about the errors in the measurements? We know that the error in the Greenland Ice Cap is on the order of 0.4 million km^3. How about the error in the GRACE measurements? This reference indicates that there is about a ± 10% error in the GRACE Greenland estimates. How does that affect our numbers?
Well, if we take the small estimate of ice cap volume, and the large estimate of loss, we get 220 km^3 lost annually / 2,600,000 km^3 total. This is an annual loss of 0.008%, and a time to total loss of 12,000 years.
Going the other way, we get 180 km^3 lost annually / 3,400,000 km^3 total. This is an annual loss of 0.005%, and a time to total loss of 19,000 years.
It is always important to include the errors in the calculation, to see if they make a significant difference in the result. In this case they happen to not make much difference, but each case is different.
That’s what angrifies my blood mightily, meaningless numbers with no errors presented for maximum shock value. Looking at the real measure, we find that Greenland is losing around 0.005% — 0.008% of its ice annually, and if that rate continues, since this is May 23rd, 2010, the Greenland Ice Cap will disappear entirely somewhere between the year 14010 and the year 21010 … on May 23rd …
So the next time you read something that breathlessly says …
“If this activity in northwest Greenland continues and really accelerates some of the major glaciers in the area — like the Humboldt Glacier and the Peterman Glacier — Greenland’s total ice loss could easily be increased by an additional 50 to 100 cubic kilometers (12 to 24 cubic miles) within a few years”
… you can say “Well, if it does increase by the larger estimate of 100 cubic km per year, and that’s a big if since the scientists are just guessing, that would increase the loss from 0.007% per year to around 0.010% per year, meaning that the Greenland Ice Cap would only last until May 23rd, 12010.”
Finally, the original article that got my blood boiling finishes as follows:
The good news for Luthcke is that a separate team using an entirely different method has come up with measurements of Greenland’s melting ice that, he says, are almost identical to his GRACE data. The bad news, of course, is that both sets of measurements make it all the more certain that Greenland’s ice is melting faster than anyone expected.
Oh, please, spare me. As the article points out, we’ve only been measuring Greenland ice using the GRACE satellites for six years now. How could anyone have “expected” anything? What, were they expecting a loss of 0.003% or something? And how is a Greenland ice loss of seven thousandths of one percent per year “bad news”? Grrrr …
I’ll stop here, as I can feel my blood pressure rising again. And as this is a family blog, I don’t want to revert to being the un-reformed cowboy I was in my youth, because if I did I’d start needlessly but imaginatively and loudly speculating on the ancestry, personal habits, and sexual malpractices of the author of said article … instead, I’m going to go drink a Corona beer and reflect on the strange vagaries of human beings, who always seem to want to read “bad news”.
PROJECTILE DYSFUNCTION
Media Lens | May 20, 2010
Last week, the BBC reported Barack Obama’s request to Congress for $200 million in military aid to assist Israel’s construction of a short-range rocket defence system, Iron Dome. The funding will be in addition to the $3 billion in military aid the US annually sends to Israel. A BBC online article explained:
“The system is designed to shoot down mortars and rockets from Gaza or Southern Lebanon with guided missiles.” (http://news.bbc.co.uk/1/hi/world/ middle_east/8681919.stm)
Details were provided:
“Iron Dome was conceived and developed in Israel following the Lebanon war of 2006, during which Hezbollah launched about 4,000 rockets into northern Israel. Southern Israel has also come under fire, with thousands of rockets and mortars fired by Palestinian militants.”
The BBC failed to mention that during the 2006 war Lebanon was subjected to 12,000 Israeli bombing raids, 2,500 navy shells, 100,000 army shells and 4.6 million cluster bombs. (Jane’s Defence Weekly, ‘The war in numbers,’ August 23, 2006 and http://www.hrw.org/en/news/2008/02/17/ israel-s-use-cluster-bombs-shows-need-global-ban)
Even prior to the December 27, 2008 Operation Cast Lead offensive – when Israel attacked Gaza with hundreds of bombing raids and drone attacks, and thousands of artillery and tank shells – 14 Israelis had been killed by mostly home-made rockets fired from Gaza over the previous seven years as against 5,000 Palestinians killed by Israeli forces. Some 1,400 Palestinians were massacred in the Cast Lead assault. […]
No Logic Whatsoever
The BBC commented on the status of the Iron Dome technology:
“Israel completed tests on the system in January. Officials say the next phase in its development is its integration into the Israeli army.”
It seems there are no investigative journalists at the BBC willing to check the claim that tests on the system have been “completed” so that the system is ready for action. As for questioning who might stand to gain from hyping this expensive technology, that is also not within the remit of BBC journalism. By contrast, the Jerusalem Post quotes the view of Tel Aviv University professor and noted military analyst Reuven Pedatzur:
“The Iron Dome is all a scam. The flight-time of a Kassam rocket to Sderot is 14 seconds, while the time the Iron Dome needs to identify a target and fire is something like 15 seconds. This means it can’t defend against anything fired from fewer than five kilometers; but it probably couldn’t defend against anything fired from 15 km., either.” (http://www.jpost.com/Israel/Article.aspx?id=175042)
Pedatzur adds:
“Considering the fact that each Iron Dome missile costs about $100,000 and each Kassam $5, all the Palestinians would need to do is build and launch a ton of rockets and hit our pocketbook.”
A second rocket system, David’s Sling, is even less workable, according to Pedatzur:
“Each one of its missiles costs $1 million, and Hizbullah has well over 40,000 rockets. This issue has no logic to it whatsoever.”
Venturing even further beyond the BBC sphere of thinkable thought, we can note that the whole issue of missile defence – which has so far cost US taxpayers alone $100 billion – has long been awash with fraudulent claims. As Greg Thielmann, Senior Fellow at the Arms Control Association, has noted:
“Getting to ground truth on strategic missile defense is a bit like looking for a faithful reflection in the distorted mirrors of a carnival fun house – nothing is quite what it seems.
“Performance details are shrouded in secrecy on both strategic ballistic missile defenses and the countermeasures that would be used to defeat them. Neither strategic ballistic missile offenses nor defenses have been used in combat. Many experts to whom the public has access have a vested interest in spinning evaluations of their capabilities.” (Greg Thielmann, Arms Control Association, ‘Strategic Missile Defense: A Reality Check’; http://www.armscontrol.org/system/files/ TAB_StrategicMissileDefense.pdf)
During the 1991 Gulf War, the mostly male armchair generals of the media swooned before the power and precision of the Patriot anti-missile interceptor. The Guardian gushed:
“The Patriot, a surface-to-air missile, is first among equals of the equipment demonstrated in the Gulf conflict. Although Raytheon and the Pentagon credited the Patriot with only a ‘secondary anti-missile capability,’ it has succeeded against Iraqi Scuds on each occasion it has been called on. Its performance belies concerns which led the Israelis to decide against buying it.” (Francis Tusa, ‘War in the Gulf: Patriot makers race to keep pace with booming demand,’ The Guardian, January 22, 1991)
Robert Fisk wrote in the Independent:
“We are all beginning to feel rather fond of the Patriot missile… The Patriots have performed almost as well as the maker’s advertisements would have you believe. In Saudi Arabia, the best estimate of its success is 12 out of 16 Scuds destroyed.” (Fisk, ‘Crumpled stovepipe that could still break up the coalition,’ The Independent, January 24, 1991)
Thanks to comments such as these appearing right across the media, the US defence industry was “on a high”, Larry Black noted in the Independent:
“Each time the trading-room television monitors replay those videos of cruise missiles attacking a Baghdad bunker, demand for General Dynamics and McDonnell Douglas stock explodes. For every Scud knocked out of the sky by a Patriot missile, America’s defence-electronics contractors notch another dollar on their share prices.” (Black, ‘US defence industry on a high,’ The Independent, January 26, 1991)
Cynics might have put two and two – the claims of knocked out Scuds and the exploding stocks – together. The Patriot system was declared fully 98% successful in intercepting and destroying Scud missiles during the war. Professor Ted Postol of the Massachusetts Institute of Technology was subsequently asked by Congress to investigate the 98% claim. Postol commented:
“It became clear that it wasn’t even close to intercepting +any+ targets, let alone some targets.” (Postol, Great Military Blunders, Channel 4, March 2, 2000, original emphasis)
Last year, Obama similarly hailed a new generation of antimissile defenses, as “proven and effective.” These comments were based on a Pentagon assessment that the SM-3 (Standard Missile 3) had intercepted 84 per cent of incoming targets in tests. Alas, an examination of results from 10 of the allegedly successful tests – again by Postol working with George N. Lewis – found only one or two successful intercepts – a success rate of 10 to 20 per cent. Postol’s comments were again sobering:
“The system is highly fragile and brittle and will intercept warheads only by accident, if ever.”
(http://www.nytimes.com/2010/05/18/ world/18missile.html?th&emc=th)
In an article for the Arms Control Association, Lewis and Postol reviewed a key document published by the Obama administration in February: the Ballistic Missile Defense Review Report:
“… a review of the actual state of missile defense technologies reveals that this new vision put forth by the report is nothing more than a fiction and that the policy strategy that follows from these technical myths could well lead to a foreign policy disaster… the ground-based midcourse ballistic missile defense (GMD) system, which, according to the report, currently protects the continental United States from ICBM attack… has only been tested in carefully orchestrated scenarios that have been designed to hide fundamental flaws and produce appearances of success”.
(http://www.armscontrol.org/act/2010_05/Lewis-Postol)
The return of the colonial: Laor’s “The Myths of Liberal Zionism” reviewed
Max Ajl, The Electronic Intifada, 19 May 2010
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The West has been sold a bill of goods. Burnished bronzed Jewish soldiery protecting settlers founding kibbutzim in a decadent, violent backwater in the Near East, terraforming the desert into farmland, steadfastly creating a cosmopolitan outpost in the center of Barbary — beautiful, innocent, pure, a perfect redemption for the West’s historical sins against European Jewry. Decent if saccharine and overwrought ad-copy for Zionism, and it’s gone over well for decades in Paris, New York, Brussels and Berlin. Like most ad-copy, it has been dishonest. Unlike most ad-copy, it is outright mendacious, something like 1940s cigarette ads advertising tobacco’s salubrious effects. And Zionist intellectuals are having increasing trouble covering up an increasingly evident truth: that Zionism should be slapped with a label reading: caution, settler-colonialism, type two — ethnic cleansing and extermination — this ideology may be harmful to the native population.
Earlier Zionists were not in the business of molly-coddling modern Western sensibilities. They were honest, unaware or indifferent to the fact that the archival record they left behind would be trouble. Take revisionist Vladimir Jabotinsky’s scorched forthrightness: “colonization must … proceed in defiance of the will of the native population … an external power has committed itself to creating such security conditions that the local population, however much it would have wanted to, would be unable to interfere, administratively or physically, with our colonization.” Ideology hasn’t changed much, but the West has. So Israeli new mandarins have to try to sell settler-colonialism to Western states with populations that increasingly regard Zionism’s spiritual core and physical reality as somewhere on the spectrum between mildly embarrassing and overtly revolting. It is those mandarins that anti-Zionist Israeli poet Yitzhak Laor meticulously vivisects in The Myths of Liberal Zionism.
Laor is not much for structure. He wanders and weaves. The book was originally published in Hebrew, and then translated to French; the myths referenced in the book’s title are intended to muck up the minds of a European audience. As Laor writes, “We are not really talking to the United States, maybe because we take its love for granted” (xii). Laor explores differences between the United States and Israel, the most important of which is the Holocaust, and its central role in communal binding for the American Jewish community, the bastion of ideological support for Israel.
Laor begins with an exegesis of the Zionist depiction of Israel — the national self-image as a vulnerable child. As the embodiment of Israeli nationalism, the Israeli soldier is imagined as utterly innocent: a naif. History happens to children. Adults make history happen. Israeli soldiers “ask for a different kind of adoration, love and warmth. They arouse, they are supposed to arouse, a desire to protect them, to defend them” (xvi). So the soldiers are children in need of a guardian, so too is Israel. This is the image Israel presents to the world, to America and to American Jews: we are all wards of an ascendant American Jewry, a responsible American Jewry, because it is Israelis that die to protect Jewry. As Laor continues, “The soldier, as a good grandson, is extremely important if we are to understand the Israeli manipulative narrative: we are the grandchildren that the United States and American Jews are often being called on to feel sorry for” (xvii).
This carefully crafted vulnerability is vital nonsense. Nonsense because Israel is a military titan with a nuclear trump card, vital because a vulnerable child demands succor and nursing. Precisely the correct image for a dependent client-garrison-state — the correct description, despite the analysis du jour in the solidarity movement that elides the materialist reasons for American and European materiel and diplomatic support for Israel.
The soldier is also a figure out of the Aryan imagination. Hebrew literature of the 1940s to 1970s is replete with blue-eyed blondes, at a time when the Israeli Jewish demographic, Ashkenazi and Mizrahim, was hazel to obsidian. Laor is quite clear: this Jew doesn’t exist. He is a stand-in for the real Jewry of Israel, the majority, Arabs, many of the Ashkenazi minority, descendants of refugees from the Shoah. This is particularly annoying for Zionist Arab Jews, who cannot relate to their past except as undispellable shame, as in the case of Israeli playwright and novelist A.B. Yehoshua, perpetually bummed at being a Sephardic Jew.
When oppression and dispossession map over ethnic lines, binding a community to a racially-conceived state requires racism, an abiding hatred of an “Other” — in this case the Palestinian Arab. This becomes even more important when that Other is closer to the Sephardic Jewish population than to the dominant population, the Ashkenazi Jewish elite, the true beneficiary of Israeli racism. Israel is the second most unequal advanced industrial economy in the world, with 40 percent of its stock market owned by a handful of families, overwhelmingly Ashkenazi. Racism glues together a national identity in lieu of cultural or class-based links which could bind Jewish Arabs to Palestinian Arabs in different and dangerous communities of identity.
This racism is codified in Zionist ideology, and so a consistent anti-racism is anti-Zionist. Such truisms don’t go over well much of anywhere. Laor quotes Ilan Greilsammer writing in Le Monde: “It is enough to be an anti-Zionist, a-Zionist, post-Zionist, or a new historian who describes the massacres perpetrated by the Jews during the war of 1948 to be welcomed everywhere with open arms.”
Laor continues: what “Greilsammer is really driving at is the following: in any other place in the (white) world, a state of all its citizens would be a reasonable democratic and republican solution, a legitimate political idea — but this does not apply to Arabs … it is the role of the Jew, within French racism, to articulate such disdain toward the Arabs. This is the return of the colonial” (56-57). The assault on anti-Zionism segues neatly into an assault on anti-Zionism’s moral groundings: anti-colonial universalism. In the neo-colonial present, radical equality threatens a radically unequal world. How to smuggle in colonial ideology? Easy: behind an anti-“anti-Semitic” discourse, from behind which anti-Arab racism can decorously emerge. And it is from this perspective that a Zionist Israeli acts as cipher for European bigotry, and explains the extent of the branding operation.
The core of the change in Jewish identity that Laor describes is “The metamorphosis of the Jew from non-Westerner to candidate-as-Westerner … the most central part of Israeli ideology” (xxiv). Through Zionism, Jewry is immured from its history: the perennial tax-collector and merchant, lingering far too obviously in the interstices of European culture. Through Zionism, the Jew becomes almost-European. Through the sabra, Israel becomes schizophrenically strong and weak: “the sabra … as a victim of circumstances, or a victim of the cruelty of the generation before him, or of the cruelty of Jewish history. In short, he was expected to be cruel, yet his cruelty was forgiven ‘in advance’ for he was the historical answer to the riddle of Jewish history” (xxii). How to solve the riddle? Simple. Though cleansing and renewing violence.
And the Jew-as-probationary-Westerner is doing excellent yeoman work in thrashing the natives. He is permitted and expected to be cruel, in response both to historical cruelty and because Israelis are not in Europe, where the natives are slightly more in line. “What our leaders asked for, it seems, was not the Rights of Man, but the right to belong to the elite. We can now participate in violating the rights of others” (35). Now that Israel is a grown-up nation-state, playing with the adults, its people can enjoy the privilege of at least border-Westerners: cluster-bombing brown folk. Laor knows that this is good work. Constant conflict is good money, good for scaring up oil prices, good for weapons sales. “Why disarm ourselves if the fences not only help us be safe, but also help us stay in ‘the West’? Or, in the words of the future historian: Why think of peace, if the price we will have to pay in return is a heterogeneous life?” (xxix). Future historians may be less demure about the way Israel has ideologically stabilized itself and its bigotry vis-a-vis the needs of its political economy and its insertion into mercantilist neo-liberalism.
Mass-murder in the global South is an organic part of European history, tied to the development of capitalism. But prattle about capitalism and death does no good for the defenders of European capitalism. Nor do narratives linking Victorian genocides to the genocides of the Third Reich. The European community would rather not see the Holocaust as a product of European civilization and its Romantic obsession with national purity, the output of colonialism and an endogenous process of violent state-formation. Instead, the Holocaust is outside history, for both Israel and Europe. As Laor explains, for Israel, this is convenient because it re-writes Jewish history in a floating arc of “national continuity which begins with the rise of Nazism, continues with the war and terminates in the construction of the memory of the (Jewish) victims” (23). For Europe, this is convenient because it places the Holocaust in a mausoleum marked “Human Suffering,” so ostentatiously elaborate that we are meant to not notice that the monument has walled off the Holocaust from the genocides the West perpetrated in the global South, privileging it, privileging Jewish suffering, now a sort of suffering of full human beings since the Jewish people — via Israel — are probationary Europeans.
Laor reserves a particular revulsion for the intellectual artisans toiling away within Israeli society. Like Viktor Klemperer, he highlights the treason of the intellectuals as the worst betrayal. He quotes Amos Oz as writing that the Israel-Palestine conflict is, “in other words a conflict between two causes where both are as just, one as the other.” What can Laor say? He says nothing. Or Claude Lanzmann, maker of the movie Shoah: “They have autonomous territories, an armed police force, weapons are everywhere” (37). While Israeli soldiers beat children to death, children with minds tortured by “memories of mothers screaming with fear, babies who never saw anything but armored trucks near home” (39). Or on Camp David, Laor highlights “the role played by the Zionist left in cementing the anti-Palestinian public perception so common today” (40). Here again is Oz: “he has incited his people against Israel and against the Jews. Finally, he has initiated this recent burst of hateful violence,” meant to wrack Jews with suffering. “The Palestinian people are suffocated and poisoned by blind hate” (42-43). Laor knows that Oz laid the symbolic ground for 5,500 Palestinian and 1,000 Israeli dead during the second Palestinian intifada. Oz scribbles away with the blood of the dead on his quill and Laor loathes him for it.
Laor detests Oz for another reason too. Judaism as a breathing culture has been suffocated by the new Zionist Israeli narrative. The old narrative of Eastern Europe Jewry has had to be decimated. This has meant the destruction of a special memory: Holocaust-surviving, the remnant of eastern European Jewry. Laor is the descendant of survivors of the Shoah, with a tincture of Maghrebi Jew. He is everything the Israeli imaginary attempts to erase or to spit upon. Livid, Laor absolutely refuses to condescend to the culture or the memories of Shoah Jewry. When Oz describes annihilated European Jewry as opera and ballet-viewing, poly-lingual cosmopolitans, Laor explodes: “This is simply the desecration of the memory of the victims of the Holocaust, most of whom never went to the opera, never read European poetry” (113).
As Laor writes, “The real people, those who never frequented operas or concerts, those who were deported en masse to the camps and to their deaths, were not ‘ideal’ in any sense. They loved their spoken language, their world which was burnt down; they were real” (114). Oz hates the real, because reality is intolerable to the Zionist, thief of Jewish history, abuser of the Holocaust. For the Israeli Zionist, Laor has many damning words. Maybe this is an attempt to heal the culture. For American Zionist Jews, who need this book so badly, who will react to its publication like a blind man to Medusa? “I can hardly find appropriate words for them,” for those who pay for the weapons that kill children, for those who will never live in their insurance-policy patch of land in the Levant (xxix). I can find appropriate words for Laor’s book: it is a gift, incredible and beautiful, so wonderful that I am sure that the American Zionist community will spurn it. No one wants to read the words that will be the epitaph on the gravestone marking the burial site of your communal imaginary.
Max Ajl is a writer living in Gaza. He has written for Adbusters! and The New Statesman, among others, and blogs on Israel-Palestine and ecological issues at www.maxajl.com.
Conspiracy of Banks Rigged Bids, Local Governments Robbed
“That money is what we use to build schools”
By Martin Z. Braun and William Selway | Bloomberg | May 18, 2010
A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.
The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory firm CDR Financial Products Inc. Goldberg arranged to pay a kickback to CDR to land the deal, according to government records filed in connection with a U.S. Justice Department indictment of CDR and Wolmark.
West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.
They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.
California to Pennsylvania
The workings of the conspiracy — which stretched from California to Pennsylvania and included more than 200 deals involving about 160 state agencies, local governments and non- profits — can be pieced together from the Justice Department’s indictment of CDR, civil lawsuits by governments around the country, e-mails obtained by Bloomberg News and interviews with current and former bankers and public officials.
“The whole investment process was rigged across the board,” said Charlie Anderson, who retired in 2007 as head of field operations for the Internal Revenue Service’s tax-exempt bond division. “It was so commonplace that people talked about it on the phones of their employers and ignored the fact that they were being recorded.”
Anderson said he referred scores of cases to the Justice Department when he was with the IRS. He estimates that bid rigging cost taxpayers billions of dollars. Anderson said prosecutors are lining up conspirators to plead guilty and name names.
“This will go on for a long time and a lot of people will be indicted,” he said in a telephone interview.
Bidding Encouraged
The U.S. Treasury Department encourages public bidding for GIC contracts to ensure that localities are paid proper market rates. Banks that conspired in the bid rigging for GICs paid kickbacks to CDR ranging from $4,500 to $475,000 per deal in at least 10 different transactions, government court-filed documents say.
A GIC is similar to a certificate of deposit, but its rates aren’t advertised publicly. Instead, towns rely on advisory firms such as CDR to solicit competing offers.
In the bid-rigging deals, CDR gave false information to municipalities and fed information to bankers allowing them to win with lower interest rates than they were otherwise willing to pay, the indictment says. Banks took their illegal gains from the additional returns and paid CDR kickbacks, according to the indictment.
Not Guilty Plea
Wolmark, 54, who was indicted by a federal grand jury in Manhattan on antitrust, conspiracy and wire fraud charges, to which he pleaded not guilty, declined to comment when reached by telephone at CDR’s office. Goldberg, who hasn’t been charged, declined to comment, says his attorney, John Siffert.
Court records in the broadest-ever criminal investigation of public finance shed new light on how Wall Street’s biggest banks were cheating cities and towns during the same decade in which they were setting the stage for a global economic collapse.
As the banks were steering the world’s financial system to the brink of catastrophe by loading more than $1 trillion of subprime mortgage loans into opaque debt investments, they were also duping public officials across the U.S.
Many of the same bankers and advisers who sold public officials interest-rate swap deals that backfired for taxpayers are now subjects of the criminal antitrust investigation involving GICs.
The swaps are derivatives designed to keep monthly interest payments low as lending rates change. Municipal- derivative units of the largest U.S. banks also sold the contracts, public records across the nation show.
Key Witness
Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. Options and futures are the most common types of derivatives.
A key witness in the government’s case is a former banker whom the government hasn’t named, according to a civil lawsuit filed by Baltimore, Maryland, and six other municipal borrowers against Bank of America, JPMorgan and nine other banks. The banker is providing evidence against his peers.
The witness, who was employed by Bank of America Corp. starting in 1999, has laid out the inner workings of the scheme in confidential meetings with investigators, according to the civil lawsuit.
Bank of America, based in Charlotte, North Carolina, has also been providing prosecutors with evidence since at least 2007. The bank voluntarily reported its own illegal activity and agreed to cooperate with the Justice Department’s antitrust division, according to a press release from the company.
Amnesty Agreement
In exchange, the government promised in an amnesty agreement not to prosecute the bank. Bank of America spokeswoman Shirley Norton in San Francisco said in an e-mail the firm is continuing to cooperate.
The banker who has been cooperating with the Justice Department said he overheard his colleagues change Bank of America’s bids after coaching from brokers or other banks bidding on the same deal, according to information that the firm provided to plaintiffs in the civil case filed by seven municipalities.
At least five former bankers with New York-based JPMorgan, the second-biggest U.S. bank by assets, conspired with CDR to rig bidding on investment deals sold to local governments, according to the Justice Department list now under seal.
At least three other former JPMorgan bankers are targets of the investigation, according to filings with the Financial Industry Regulatory Authority. Six bankers with Bank of America, the biggest U.S. lender, are also named in the sealed Justice Department list as participants.
16 Companies
Eighteen employees at 16 other companies, including units of General Electric Co., UBS AG and FSA, then a unit of Brussels lender Dexia SA, are also cited as co-conspirators by the Justice Department, according to the list under seal. None have been charged in the case.
Citigroup spokesman Alex Samuelson, Dexia spokesman Thierry Martiny, GE spokesman Ned Reynolds, JPMorgan spokesman Brian Marchiony, UBS spokesman Doug Morris, and Ferris Morrison, a spokeswoman for Wells Fargo & Co., which acquired Wachovia in 2008, declined to comment.
Former CDR employees Douglas Goldberg, Daniel Naeh and Matthew Rothman, pleaded guilty in federal court in Manhattan in February and March to wire fraud and conspiracy to rig bids.
In October, CDR was charged with criminal conspiracy and fraud, along with Chief Executive Officer David Rubin, 48, vice president Evan Zarefsky and Wolmark. They pleaded not guilty. Rubin, who was also charged with making fraudulent bank transactions, faces as much as $3 million in fines and more than 30 years in jail if convicted.
No Law Broken
Rubin declined to comment in a telephone call.
“Mr. Rubin doesn’t think that CDR broke the law in any of these transactions,” said Laura Hoguet, his attorney in New York.
Daniel Zelenko, a lawyer for Zarefsky in New York, said he was confident his client will prevail at trial.
“The government continues to show that it simply doesn’t understand how this market operated,” Zelenko said in an e- mail.
During more than three years of investigation, federal prosecutors amassed nearly 700,000 tape recordings and 125 million pages of documents and e-mails regarding public finance deals.
$400 Billion
Municipalities and states raise $400 billion a year by selling bonds. They invest much of those proceeds in GICs, sold by banks or insurance companies. Those accounts hold taxpayer money and earn interest before public agencies spend it.
Banks and advising firms illegally siphoned money from taxpayers by paying artificially low interest rates in the GICs, the CDR indictment says. The money was intended to build schools, hospitals, roads and sewers and refinance higher-cost debt.
The bid-rigging schemes were orchestrated by CDR and other advisory firms, according to the indictment and the civil suits. Advisers are unregulated private firms hired by local governments to consult on public finance deals — and are almost always paid by the banks that arrange the transactions or manage the GICs.
Wilshire Boulevard
CDR, which was located on Wilshire Boulevard in Beverly Hills, California, during the transactions under investigation, has provided advice on more than $158 billion in public transactions since it was founded in 1986, according to its website.
CDR helped arrange deals in which financial firms took millions of dollars in profits from GICs, Bloomberg News reported in October 2006. Almost all of the deals were shams: As much as $7 billion in bond-issue proceeds were invested in GICs but never spent for the intended purpose of providing services to taxpayers.
CDR signed off on interest-rate swaps to municipalities, as banks took hidden fees sometimes 10 times as much as they charged on fixed-rate bond deals, according to data compiled by Bloomberg. For the public, the swaps were fraught with risks.
In the past decade, banks have peddled swaps the world over, from Jefferson County, Alabama — which was forced to the brink of bankruptcy — to the hill towns of the Umbria region of Italy. Many of these swaps soured when the credit crisis began in 2007.
Getting Out
Dozens of municipalities have paid banks billions to get out of swap contracts. The agency that oversees the San Francisco-Oakland Bay Bridge said it spent $105 million to escape its deal in July 2009.
“They were gouging the municipalities,” said retired IRS investigator Anderson, 59. “Beside the excessive fees, some of the swap deals just didn’t work. It was just awful. The same people were involved in the GIC end of the market.”
Bid rigging not only cheated cities and towns, it also illegally denied the IRS required taxes from GIC income, Anderson said. The evidence is clear in telephone recordings made on GIC desks, he said. “We could hear people talking about how everyone knew who was going to win the bid. You could tell it was just everyday business.”
The Securities and Exchange Commission is conducting a probe of bid rigging from its Philadelphia office that’s parallel to the Justice Department investigation.
More Probes
State attorneys general in California, Connecticut and Florida are also investigating. Bank of America, JPMorgan, Fairfield, Connecticut-based GE, and Zurich-based UBS have disclosed in regulatory filings that they may be sued by the SEC.
The Federal Bureau of Investigation has raided at least two of CDR’s competitors, Pottstown, Pennsylvania-based Investment Management Advisory Group Inc., known as Image, and Eden Prairie, Minnesota-based Sound Capital Management. Neither has been charged.
Robert Jones, a managing director of Image, declined to comment, after answering a call to the firm’s office. Johan Rosenberg of Sound Capital didn’t return calls seeking comment.
Tape recordings cited in a letter by Justice Department prosecutor Rebecca Meiklejohn show how those deals worked. In two GIC bids for the Utah Housing Corp., CDR’s Zarefsky advised an unidentified trader that his firm could lower its offer by “a dime,” or 10 basis points (a basis point is 0.01 percentage point).
‘A Couple Bucks’
The West Valley City-based housing agency accepted contracts with GE’s FGIC Capital Market Services division for 5.15 percent and 3.41 percent in 2001, public records show. Zarefsky didn’t return calls seeking comment.
“I can actually probably save you a couple bucks here,” Zarefsky told the trader, according to the letter citing the tape recording.
The Utah agency, which finances mortgages for low-income residents, didn’t know that financial firms were cheating it out of money that could have been used to help home buyers, said Grant Whitaker, who runs the agency. “It sounds like somebody got a better deal than we did,” he said in a telephone interview.
Such deals could produce large illegal profits by banks, said Bartley Hildreth, public finance professor at the Andrew Young School of Policy Studies at Georgia State University in Atlanta.
A New Wrinkle
“Just a basis point on many of these deals is tens to hundreds of thousands of dollars,” he said.
This isn’t the first time Wall Street has faced accusations of reaping excessive fees on investment deals with public officials. Goldman Sachs Group Inc., Lehman Brothers, which filed for bankruptcy in 2008, Merrill Lynch & Co. and other securities firms agreed by 2000 to pay more than $170 million to settle SEC charges that they had sold overpriced Treasury bonds to municipalities.
The so-called yield burning drove down the returns that local governments earned and trimmed required payments to the IRS. The firms neither admitted nor denied wrongdoing.
Even as the banks were settling with regulators, they devised another way to burn yield, this time by skimming money from GICs, according to the indictment, which said the conspiracy went from 1998 to at least 2006.
In the lawsuit against Bank of America and JPMorgan filed in New York in June 2009, the city of Baltimore, two Mississippi universities and four other municipal borrowers say that bankers from those two companies colluded in bidding for GIC contracts in Pennsylvania.
Holiday Party
At a holiday party sponsored by advising firm Image at Sparks Steak House in Manhattan early in the past decade, the Pennsylvania deals were discussed by the Bank of America trader who is cooperating with prosecutors and Sam Gruer of JPMorgan, the civil antitrust lawsuit says.
The Bank of America trader told Gruer that he was happy that the two banks weren’t “kicking each other’s teeth out” on bidding for certificates of deposits for bond proceeds, the suit says. That information was provided by Bank of America to the plaintiffs.
Gruer, who was informed by prosecutors in 2007 that he was a target of the investigation, declined to comment.
Coaching a Bidder
The trader who is now a federal witness joined Bank of America after being recommended by Image, according to information that the bank turned over to the Baltimore-led plaintiffs. He was assigned by Phil Murphy, who headed the municipal trading desk, to be Bank of America’s point person for investment contracts bid by Image, the lawsuit says.
Image coached Bank of America in winning an investment contract in Pennsylvania, according to an internal e-mail exchange in May 2001 between Bank of America trader Dean Pinard and Image’s Peter Loughhead that was obtained by Bloomberg News. The e-mail was provided to Bloomberg by a person who got it from Bank of America and asked to remain unidentified.
Loughead, who ran bids for Image, advised Pinard on how much to offer for managing the cash fund for a $10 million bond issued by the sewer authority of Springfield Township, York County, 100 miles (161 kilometers) west of Philadelphia.
‘Don’t Fall on Any Swords’
Pinard said in the e-mail to Loughead that Bank of America was willing to pay the town as much as $40,000 upfront to win the deal. Loughead wrote that the bank didn’t need to pay that much.
“Don’t fall on any swords,” Loughead wrote to Pinard the day before bids were submitted. He suggested that the bank could win the contract with a bid of slightly more than $30,000. The next day, Bank of America offered $31,000. It won the bidding, authority records show.
Loughead didn’t return calls seeking comment. Pinard didn’t respond to telephone requests for an interview and no one responded to a knock on the door at his Charlotte home.
Image ensured that Bank of America would dominate GIC deals in Pennsylvania by soliciting sham bids from other banks to make the process look legitimate, according to testimony from the trader cooperating with the Justice Department.
Bank of America would return the favor to Image by submitting so-called courtesy bids at the adviser’s request, allowing JPMorgan to win some of the deals, according to information that Bank of America gave plaintiffs’ attorneys.
Switching Jobs
Bank of America has cooperated with the municipalities that were suing the bank as part of its 2007 amnesty agreement with the Justice Department.
Traders such as FSA’s Goldberg often had worked for several banks and insurance companies that had a role in GIC contracts, according to employment records with Finra, the self-regulator of U.S. securities firms. CDR employees went on to work in the derivative departments of Deutsche Bank AG and UBS, the records show.
Before joining Bank of America, Pinard, 40, worked at Wheat, First Securities Inc. in Philadelphia with two bankers who would later join Image, according to broker registration records.
“Few people understand this part of public finance,” Georgia State’s Hildreth said. “It is a very small band of brothers who know the market. So, of course, they are going to reap the benefits.”
34 States
For nearly a decade, CDR founder Rubin, Wolmark, and Zarefsky helped fix prices on investment deals that cheated taxpayers in at least 34 states, according to their indictments and records filed in the case.
FSA’s Goldberg, who received a bachelor’s degree in accounting from St. John’s University in Queens, New York, worked with CDR employees on GIC deals, according to the indictment and public records. Goldberg worked from 1999 to 2001 at GE, which gets 35 percent of its revenue from financial services.
Goldberg was referred to only as “Marketer A” in the CDR indictment. “Marketer A” was then later identified as FSA’s Steven Goldberg in the Justice Department list of co- conspirators.
At GE, Goldberg worked with Dominick Carollo, a senior investment officer for FGIC, and Peter Grimm, who worked there from 2000 until at least 2006, according to court documents and public records. GE sold FGIC in 2003 to a group led by mortgage insurer PMI Group Inc.
Funneling Kickbacks
Goldberg and Grimm worked with CDR to increase their gains on GIC deals, according to the CDR indictment and conspirator list. Carollo left GE in 2003, joining the derivatives unit of Royal Bank of Canada. Grimm and Carollo didn’t respond to telephone calls and e-mails seeking comment.
Goldberg continued to participate in the conspiracy after he left for FSA in 2001 and used swap deals with Toronto-based Royal Bank of Canada and UBS to funnel kickbacks to CDR, according to the indictments and the Justice Department list of conspirators. Royal spokesman Kevin Foster said the company is cooperating the government.
FSA, Royal Bank of Canada and UBS all worked on public finance deals in West Virginia that prosecutors say involved bid rigging.
At least three times, Goldberg conspired with CDR to pick up deals with West Virginia agencies, according to a guilty plea by former CDR employee Rothman and other records filed in federal court in Manhattan. Among them was a $147 million investment contract with the West Virginia School Building Authority.
‘Raw Greed’
That state’s schools need every penny they can get, said Mark Manchin, executive director of the school authority. With 17 percent of West Virginians below the poverty line in 2008, the state was 45th among the 50 U.S. states, according to a 2009 Census Bureau report. Manchin said some students study in dilapidated, century-old buildings.
“It’s just raw greed at the expense of the most vulnerable,” he said in a telephone interview. “With deteriorating facilities all over the state, that money is what we use to build schools.”
Bank of America’s municipal derivatives division, which was formed in 1998, worked on the 14th floor of the Hearst Tower in Charlotte. The space was so tight that the banker who’s cooperating with the Justice Department said he could hear others in the office change their bids when they got word from financial advisers, according to information Bank of America gave Baltimore.
Bank of America’s Murphy told the banker helping prosecutors that Image would use sham auctions to steer deals to Bank of America if the employee told Image that he “wanted to win” and “would work with” Image, according to the civil suit filed by Baltimore. Murphy declined to comment.
Verbal Cues
They would use verbal cues to communicate. The banker would ask whether the bid was a “good fit” to get information on competing bids from Image. Sometimes Image’s Martin Stallone said Bank of America’s bids were “aggressive,” or too high, and had to be reworked.
At other times, Stallone would ask the banker to bid a specific number, according to the civil suit.
Stallone didn’t respond to messages left for him at work or to a list of questions faxed and e-mailed to Image.
Like Financial Security Assurance, Bank of America also paid kickbacks to brokers for their help in getting deals, according to the Baltimore lawsuit, which based its allegations on information provided by Bank of America.
On June 28, 2002, Douglas Campbell, a former municipal derivatives salesman at Bank of America, wrote in an e-mail to his boss, then managing director Murphy, that he had paid $182,393 to banks and brokers not tied to any particular deals.
‘Better Relationship’
Three payments totaling $57,393 went to CDR, which played no role in any transaction connected to that amount. A copy of the e-mail was contained in a North Carolina lawsuit filed by Murphy against Bank of America in 2003.
“The CDR fees have been part of the ongoing attempt to develop a better relationship with our major brokers,” Campbell wrote.
The bid rigging in GIC contracts has reduced public funding for schools and housing across the U.S.
“If this was going on in a small state like West Virginia, it must have been huge elsewhere,” the state’s Assistant Attorney General Doug Davis said.
To contact the reporters on this story: William Selway in San Francisco at wselway@bloomberg.net; Martin Z. Braun in New York at mbraun6@bloomberg.net
I’M SURPRISED ISRAEL DID NOT GIVE CHOMSKY THE ‘RED CARPET’ WELCOME
By Steve Amsel | Desert Peace | May 17, 2010
Yesterday a post appeared on this Blog dealing with Noam Chomsky being denied entry to Israel. In the report, Chomsky is referred to as a ‘Left wing American Jewish Intellectual’.In his own words, he admits that his barred entrance has nothing to do with positions he might hold about Israel. Take notice that he does not mention the FACT that Israel is in violation of International Law by determining who can or cannot enter the Palestinian Territories. This also indicates that the Occupied West Bank is under siege, not only the Gaza Strip.
Left wingers do not oppose a boycott and divestment from Israel…. neither do they hold the views expressed by Chomsky in the following…
Audio: Challenging Noam Chomsky’s opposition to boycotting Israel (Ali Abunimah & Jeff Blankfort)
Why does Noam Chomsky oppose boycott, divestment and sanctions against Israel, and why does he think Palestinians should not talk about justice and redress for their ethnic cleansing from their homeland in 1948? Why does Chomsky dismiss any talk about the influence of the Israel lobby? His pathetic views on the Lobby can be seen in THIS video.
Click here to download the download the Abunimah and Blankfort response
or listen to it at Ali Abunimah’s Blog
Israel could have welcomed Chomsky with open arms. His non participation in the Movement is exactly the type of ‘left winger’ Israel loves.
Universities in the Palestinian Territories have scores of professors to chose from that hold views in support of their cause. Chomsky is definitely not one of them.
SEC Admits to Inadequate Tools to Conduct Investigation
Trader’s Harrowing Tape of Market Plunge Reveals Big Name Sellers
By PAM MARTENS | May 17, 2010
SEC Chair Mary Schapiro made a stunning admission during House subcommittee hearings last week seeking answers to the May 6 hit and run in the stock market which briefly trimmed 998 points off the Dow and caused massive losses to small investors who had placed stop loss orders on individual stocks.
According to Ms. Schapiro, the SEC has no consolidated audit trail that captures time and sales in a chronological order among the 40 or more electronic trading platforms and exchanges that constitute today’s deeply fragmented U.S. stock market.
Ms. Schapiro said in her testimony before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises that there were 66 million trades on May 6, coming from the 40 or more stock trading venues. The SEC has requested the individual trading records and must figure out how to review all the disparate trading in sequential time order. Some trading records reside at unregulated entities like hedge funds. Other trades are done by dark pools, internal matching of buys and sells inside brokerage firms (benignly called internalization) and over the counter derivative trades that could impact the stock market but have no oversight by anyone. Ms. Schapiro said she has issued subpoenas but didn’t say to whom.
Ms. Schapiro’s testimony raises the question as to whether the SEC has been properly monitoring potentially rigged trading in real time up to this point.
As far back as five months ago, the SEC was gently coaxing Wall Street to let it police it with proper tools. Below is an excerpt from a speech delivered by James Brigagliano, Deputy Director of the SEC’s Division of Trading and Markets on January 21, 2010 to the Securities Industry and Financial Markets Association (SIFMA), the heavy handed trade and lobby association of Wall Street:
“Chairman Schapiro has expressed her commitment to improving intermarket surveillance. As a step towards fulfilling that commitment, she created an inter-division task force to work with markets to explore ways to establish a comprehensive consolidated audit trail for orders and executions across all markets. While we recognize that such a proposal would require a substantial effort by the SROs [Self Regulatory Organizations] and their members, a consolidated audit trail could be an invaluable regulatory tool to enhance the ability of the SROs and the Commission to detect illegal activity across multiple markets, and would greatly benefit investors and help to restore trust in the securities markets.”
Since when do real cops ask the perps for permission to police them?
Many eyebrows were raised among Wall Street skeptics when President Obama appointed Ms. Schapiro to head the SEC on January 20, 2009. Ms. Schapiro came to the SEC from the Financial Industry Regulatory Authority (FINRA), the self regulatory watchdog of Wall Street, where she served as CEO. Prior to that, she was the Chairman and CEO of the predecessor self regulator, NASD Regulation, which carried the stigma of running a private justice system for Wall Street that investors, industry employees and lawyers felt was rigged in favor of the industry. Why Ms. Schapiro did not insist on creating a consolidated audit trail in her prior regulatory roles or after the four-decade Madoff swindle was revealed remains a nagging question.
Another person to provide Congressional testimony on May 11 was Chief Operating Officer of the New York Stock Exchange, Larry Leibowitz, who was also unable to explain what caused the crash on May 6. Mr. Leibowitz’ younger brother, Comedy Central’s Jon Stewart, had upstaged the hearings the day before on his program “The Daily Show” with his own apt diagnosis. Showing an endless stream of news anchors characterizing everything from the GM bailout to the mortgage crisis to the rescue of AIG as caused by the “perfect storm,” Stewart said: “I’m beginning to think these are not perfect storms. I’m beginning to think these are regular storms and we have a sh*tty boat.”
My only quibble with Stewart’s analysis is that it’s not just that we have a sh*tty boat. It’s that the pirates have a souped up speedboat with computers run by algorithms and have infiltrated the water patrol.
The Congressional testimony of Terry Duffy, Executive Chairman of the Chicago and New York based futures exchanges, known as the CME Group, Inc., raised more alarm bells. Mr. Duffy told the House hearing that “The CME [Chicago Mercantile Exchange] markets functioned properly on May 6, 2010.” “Functioned properly” is clearly a subjective term as his market came within 3 points of being locked limit down. Locked limit down is when the futures market hits a preset percentage decline that automatically halts trading. Without the S&P 500 trading, the cash stock market would have had even less price transparency and this would have accelerated panic selling.
Speaking of the popular futures contract on the Standard and Poor’s 500 called the E-Mini, Mr. Duffy reported that “the market traded in a largely orderly manner…the bid/ask spread momentarily widened to 6.5 points…Market Regulation staff ultimately concluded that there were no anomalies represented by the level of activity or the trading strategies employed by market participants.”
Mr. Duffy’s testimony stands in stark contrast to a harrowing audio tape of the bungee jump in the Standard and Poor’s 500 futures pit between 2:42 and 2:51 p.m. New York time; 1:42 and 1:51 Central time. The tape was made by Ben Lichtenstein, who has worked on the trading floor of the Chicago Mercantile Exchange (CME) for 17 years. Starting out as a runner, then member, then trader, Mr. Lichtenstein launched a savvy service for private investors, traders and asset management companies who need to take the pulse of the futures market in real time. Called TradersAudio.com, the service provides a live audio feed directly from the trading pit in Chicago with Mr. Lichtenstein calling out the play by play as trades occur. He says it’s “like being in the pits without all the pushing and shoving.”
Mr. Lichtenstein has confirmed that this is an authentic tape of his broadcast during the plunge.
At several points on the tape, Mr. Lichtenstein clearly indicates that there is a 10 point spread between the bid and the ask. Mr. Duffy told the House hearing that the spread reached a maximum of 6.5 points. A 10 point spread shows a seriously illiquid market where big players have pulled their support.
At one point on the tape Mr. Lichtenstein yells out: “This is probably the craziest I’ve seen it down here ever.” At another point he says the move through the figure was “just nuts,” meaning when the S&P 500 broke its support level of 1100 no buying support came in; a highly unusual occurrence.
Mr. Lichtenstein calls out the names of Salomon and Morgan Stanley as sellers as the plunge worsens. Both of these firms received taxpayer bailouts and Salomon, a unit of Citigroup, is currently a ward of the taxpayer. If these firms were shorting the market for their own in-house casinos, (their proprietary trading desks), the American people have a right to know and so does Congress. It goes to the very heart of legislative proposals to ban proprietary trading at banks holding insured deposits.
In the brief morning comments that are broadcast in the audio, Mr. Lichtenstein calls out that Pru Bache is selling. Stockbrokers I checked with were shocked to learn Prudential Bache has miraculously arisen from the dead. The company was depicted in Kurt Eichenwald’s epic tome, “Serpent on the Rock,” regarding its massive securities fraud in limited partnerships in the 1980s and 90s. The jacket cover reads: “Backstabbing. Lying. Embezzling. Coverups. Just another day on Wall Street in history’s biggest corporate swindle.” It’s less than comforting to know that the name Pru Bache is being called out on a day that looks like serious manipulation at work.
Nor is it comforting to hear that Salomon is selling. Citigroup uses many monikers to trade around the world. Salomon is one of them. Here’s how Bloomberg described a trade Citigroup code named “Dr. Evil” in 2004:
“On Aug. 2, 2004, between 10:28 and 10:29 a.m., Citigroup traders sold 11.3 billion euros of government bonds in 18 seconds using MTS, according to the Financial Services Authority. A further 1.5 billion euros of bonds were sold on other markets. At the time, an average 13.5 billion euros of bonds traded each day on MTS. The traders had planned to sell only 8 billion euros to 9 billion euros of bonds and weren’t expecting the system to work as well as it did, the FSA said. About seven minutes later, they started buying back 3.8 billion euros of bonds after the securities dropped in price. The Citigroup team also bought 66,214 futures contracts and booked an $18.5 million profit on the day, the FSA said.”
I asked the CME if they would aggregate all the trades done by Citigroup and its affiliates and subsidiaries (Citigroup, Citibank, Salomon, Smith Barney, etc.) to see if Mr. Duffy’s statement would hold up that there “were no anomalies represented by the level of activity or the trading strategies employed by market participants.” The CME’s spokesperson, Allan Schoenberg, responded:
“Per your request for access to client trading information we do not provide access to that. As for your question about Citigroup and access to their information specifically you would have to discuss that with Citigroup. As CFTC Chairman Gensler noted, data that he and his staff have reviewed shows that the trades he referred to in his testimony appeared to be a bona fide hedging strategy.”
I took and passed the commodities licensing exam in 1986. At that time, a bona fide hedger was a party like an oil company hedging the price of oil; or a farmer in the Midwest hedging the price of corn. I don’t think securities laws intended that a Wall Street firm could trade for its own account, against the interest of its customers, and call it bona fide hedging. Until we know just what account these big firms were trading for and the aggregated volume of these trades by firm, we know nothing useful about their May 6 conduct. And let’s remember that these firms are already under investigation for potential rigging of the credit default swap and collateralized debt obligation markets.
According to Mr. Duffy, there were 1.6 million (yes, million) contracts traded in the E-Mini S&P 500 in the pivotal hour of 2:00 to 3:00 p.m. New York time. Each E-Mini trades at 50 times the level of the S&P 500 futures price. At 1100 on the S&P, that would be $55,000 per contract or about $88 billion (yes, billion) in one hour, an astonishing amount.
Last week Reuters leaked an internal document from the CME showing that Waddell & Reed has sold 75,000 contracts during that period with the suggestion that it might have triggered the plunge. The idea that this tiny Midwest mutual fund firm pulled something over on the Wall Street bad boys is specious at best and an intentional distraction at worst. If the report is correct, Waddell & Reed’s contracts represented 4.7 percent of those traded in that hour.
The Senate Banking Committee’s Subcommittee on Securities, Insurance and Investment is slated to pick up where the House left off this coming Thursday from 10:00 a.m. to 12:30 p.m. Hopefully, the Senate will probe the issues raised above, along with the following:
During the House hearings, no mention was made of the fact that three of the largest market cap stocks in the S&P 500 suffered losses far in excess of the overall market decline on May 6, raising a strong warning sign of potential manipulation.
The S&P 500 is weighted by the market capitalization of the individual stocks. Market capitalization is the share price times the number of shares outstanding. The impact of a price change in the S&P 500 index is proportional to significant price changes in the stocks ranking highest in market cap weighting. (Big price declines in a handful of the top tier stocks can crater the market index.) Apple Computer, GE and Procter and Gamble all fall within the top 10 component stocks of the S&P 500 and each of these stocks appears to have been targeted for excessive selling by some entity or algorithmic program on May 6. Sharp price declines in these pivotal stocks in the cash stock market quickly transmuted into selling in the futures market, creating a frenzy in the highly leveraged Chicago futures pits.
According to Standard and Poor’s website on May 14, 2010, Apple Computer ranks number 2 in importance in the S&P 500; GE ranks 4th; Procter and Gamble ranks 5th. At the worst point in the market, Apple had declined by 21.5 percent; GE by 16.6 percent; and Procter and Gamble by a whopping 36 percent. The overall market at its worst level had declined by only 9.2 percent. (3M dropped by 21 percent at its worst point but does not rank in the top 10 of the S&P by market cap.)
Before our so-called fair and efficient markets become the brunt of jokes on more comedy shows around the globe, the Senate needs to stop trying to legislate reforms in the dark and get to the bottom of just how rigged Wall Street really is.
Pam Martens worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article other than being long Procter & Gamble. She and family members own less than 500 shares in Procter & Gamble. She writes on public interest issues from New Hampshire. She can be reached at pamk741@aol.com
Crisis in New Zealand climatology
The warming that wasn’t
By Barry Brill | Quadrant Online | May 15, 2010
The official archivist of New Zealand’s climate records, the National Institute of Water and Atmospheric Research (NIWA), offers top billing to its 147-year-old national mean temperature series (the “NIWA Seven-station Series” or NSS). This series shows that New Zealand experienced a twentieth-century warming trend of 0.92°C.
The official temperature record is wrong. The instrumental raw data correctly show that New Zealand average temperatures have remained remarkably steady at 12.6°C +/- 0.5°C for a century and a half. NIWA’s doctoring of that data is indefensible.
The NSS is the outcome of a subjective data series produced by a single Government scientist, whose work has never been peer-reviewed or subjected to proper quality checking. It was smuggled into the official archive without any formal process. It is undocumented and sans metadata, and it could not be defended in any court of law. Yet the full line-up of NIWA climate scientists has gone to extraordinary lengths to support this falsified warming and to fiercely attack its critics.
For nearly 15 years, the 20th-century warming trend of 0.92°C derived from the NSS has been at the centre of NIWA official advice to all tiers of New Zealand Government – Central, Regional and Local. It informs the NIWA climate model. It is used in sworn expert testimony in Environment Court hearings. Its dramatic graph graces the front page of NIWA’s printed brochures and its website.
Internationally, the NSS 0.92°C trend is a foundation stone for the Australia-New Zealand Chapter in the IPCC’s Third and Fourth Assessment Reports. In 1994, it was submitted to HadleyCRUT, so as to influence the vast expanses of the South Pacific in the calculation of globally-averaged temperatures.
The Minister of Research Science and Technology, the Hon Dr Wayne Mapp, has finally become alarmed at the murky provenance of the NSS. The Government has directed and funded a 6-month project to produce a new national temperature record, with published data and transparent processes. The replacement record is to be the subject of a scientific paper, which is to be peer-reviewed by the Australian Bureau of Meteorology.
Hon Rodney Hide, a climate sceptic who is a Minister in the current Government and leader of the junior coalition partner, the ACT Party, has called upon his ministerial colleagues to formally repudiate the NSS and to withdraw all publications and formal papers which are based on the spurious warming trend of 0.92°C. The Government has not yet responded to this challenge.
New Zealand is a small country, with a strong tradition of open Government, and is not an easy place to keep secrets. The acceptance of the NSS for so long offers evidence of the dictum: “you can fool all of the people some of the time..” But if that can happen in New Zealand, how much greater is the probability that similar shenanigans could be happening in larger, more complex, jurisdictions?
BACKGROUND
The New Zealand Meteorological Service, with its forebears, has been measuring and recording our weather since 1861. In 1992, it published a booklet containing a detailed history of all its weather stations, along with 140 years of climate data. In that year, NIWA came into being and has now published most of the Met Service data online.
In 2007, the then Prime Minister announced her party’s intention that New Zealand should lead the world in fighting climate change, and aim to be the world’s first carbon-neutral country by 2025.
Earlier in 2007, NIWA produced a web page, followed by a printed brochure, with a graph showing that New Zealand had already warmed by an amount far in excess of global averages. The web page claimed a temperature increase of 1.1C during the 144 years of Met Service records, and a 0.92°C trend during the 20th century.
These are remarkable claims. They came out of the blue and do not accord with any written histories, or the personal impressions of our older generations. They don’t square with “hottest day” records held in provinces and city archives. They were not accompanied by big changes in rainfall or winds or sea levels. In these claims, NIWA is a very lonely orphan.
Read the entire substantial essay here at Quadrant Online
Stephen Zunes and the Zionist Tinderbox
“[A]nti Zionism may be a ‘fool’s anti-imperialism,’ where Jewish nationalism itself is erroneously seen as the problem rather than the alliance its leaders have made with exploitative Western interests.” – Stephen Zunes, 2006.1
By Michael Barker | Pulse Media | May 12, 2010
Who is Stephen Zunes? Well according to his web-site, he is a Professor of Politics and International Studies at the University of San Francisco, who in 2002 won recognition from the Peace and Justice Studies Association as Peace Scholar of the Year. Although Zunes describes himself as a committed peace loving, anti-imperialist activist, by reviewing just one of his books this article will demonstrate that in actual fact his scholarly actions belie such intent. The book in question is Tinderbox: U.S. Middle East Policy and the Roots of Terrorism (Zed Books, 2003), a popular text that received glowing accolades from Noam Chomsky, Howard Zinn, Richard Falk, and Saul Landau (amongst others). This essay will illustrate how Zunes’ proclivity for defending Zionism ultimately leads hims to promote a “fool’s anti-imperialism.”
That is not to say that Zunes is uncritical of U.S. foreign policy, far from it, just that his work serves as a smokescreen for understanding the real drivers of U.S. foreign policy vis-a-vis the Middle East.
For example, on the antagonist relationship between U.S. elite interests and human rights, he recognizes that:
- Human rights violations by foreign governments and their lack of democratic institutions generally get the most attention in the United States when a given administration has called attention to them in order to mobilize domestic and international opinion against a regime the U.S. government opposes. (p.10)
However, Zunes continues, “since at least the 1970s” U.S. administrations — or should we say regimes — have “to some degree” been forced to respond to “public and Congressional pressure regarding the lack of democracy and human rights in allied countries.” Typical responses often “constitute little more than lip service and damage control,” but significantly, “the very region that receives the largest amount of American arms and aid has been notably absent from the public debate: the Middle East.” Indeed, with regard the U.S.’s special commitment to Israel, U.S. aid “has generally increased as the government’s repression in the occupied territories has worsened.”2 Moreover, Zunes points out, this relationship…
- … is unlike any other in the world, or indeed, like any in history. In sheer volume, it is the most generous foreign aid program ever between two countries, totaling over $100 billion. No country has ever received as much Congressionally mandated aid as has Israel. What is perhaps even more unusual is that Israel, like its benefactor, is an advanced, industrialized, technologically sophisticated country, as well as a major arms exporter. (p.109)
So how might we come to understand the existence of this enduring toxic relationship? Well according to Zunes, such aid actually runs counter to the best interests — that is, “legitimate defence needs” — of both Israel and the United States. Therefore, as neither State profits from this situation U.S.-based arms manufacturers must be largely to blame, as he says, they are the people who profit most from this insecurity. To support this point Zunes draws upon the words of Matti Peled, the late Israeli major general (and Knesset member), who in the early 1990s “argued that he and other Israeli military leaders saw the [$1.8 billion Israeli military] aid package as little more than a U.S. government subsidy for American arms manufacturers.”3
Zunes does not seriously consider the possibility that an alternative explanation for this state of affairs is that neither the U.S. nor Israel are intent on pursuing peace in the Middle East. Indeed it seems fairly obvious that Israel has no interest in promoting what Zunes considers to be its “legitimate defence needs,” as leading Zionist elites are quite happy escalating tension in the region to facilitate the ethnic cleansing of Palestinians. This might explain why “it appears that the priority of both the executive branch and Congress in recent decades has not been Israeli security, but maintaining the flow of American arms exports.”4 Yet, Zunes is convinced that the root of the problem lies not with Zionism but with the arms manufacturers, thus he writes:
- Much attention has been given to the clout of pro-Israel Politcal Action Committee (PACs) and their alleged role in convincing members of Congress to support these taxpayer-funded arms transfers to Israel. However, contributions by PACs affiliated with military contractors far surpass the pro-Israel PACs. For example, during the 1999-2000 election cycle, just slightly over $2 million in campaign contributions came from the pro-Israel PACs, while PACs affiliated with the arms industry came close to $5 million.5
This gross underestimation of the power of the Israel lobby is almost identical to Noam Chomsky’s arguments which have already been thoroughly rebutted elsewhere. Thus it is fitting that Zunes, like Chomsky, plays the oil card, and says that the “primary reason” why the U.S. supports Israel is because of their need to control oil supplies, which is facilitated by Israel’s ability to prevent “victories by radical nationalist movements” in the Middle East.6 As before, this is an erroneous, unsupported statement that has been convincingly debunked.
Either way if one follows Zunes’ assertion that aid to Israel threatens their national security, “should U.S. policy,” Zunes asks, “then, really be considered ‘pro-Israel?’” He argues not: such aid is counterproductive, as it endangers Israel by encouraging militaristic elements within Israel’s ruling class.7 This inelegant mislogic is used to bolster his case that U.S. support for Israel must be predominantly driven by arms manufacturers and big oil; no need for hard evidence though.
Now that Zunes has cajoled his readers into accepting his fallacious arguments, he provides other “evidence” to help understand what “motivates the strong American bias against the Palestinians.” Thus in addition to the military and oil lobbies, Zunes identifies four other contributing factors to explain this bias: these are (1) a mixture of sentimental attachment combined with guilt (driven by the history of Western anti-Semitism), “friendships with Jewish Americans who identify strongly with Israel, and fear of inadvertently encouraging anti-Semitism,” (2) the rising power of the Christian Right in the United States, which interprets the Israeli-Palestine conflict as “simply a continuation of the Biblical battles between the Israelites and the Philistines,” (3) the “failure of progressive movements in the United States,” and (4) the Israel lobby. No doubt the first three points are all relevant to some degree, but their contemporary significance have all been amplified, and in some cases driven, by the far-reaching influence of the Israel lobby.8
On point four however — that is, the Israel lobby — Zunes suggests that caution must be heeded, because Jews are generally peaceful and only make up a small percentage of the U.S. population (“less than 4 percent”): moreover, “[m]any of the most outspoken members of Congress supportive of Israel’s occupation policies are from states or districts with very small Jewish populations.”9 Yet here Zunes’ argument is nonsensical (again), as the number of active Zionists is insignificant, as ultimately it is the power they exert, not their numbers, that matters most. Furthermore, no one is arguing that all Jews are Zionists, indeed it is only the small but extremely influential Jewish population residing in the American ruling class — along with their non-Jewish Zionist recruits — who give the Israel lobby its tremendous clout. Here as an example of the influence of the Israel lobby we might look to Stephen Green’s book, Taking Sides, America’s Secret Relations with Militant Israel (William Morrow, 1984), which Jeffrey Blankfort observes …
- … was the first examination of State Department archives concerning US-Israel relations. Since the Eisenhower administration, wrote Green in 1984, “Israel, and friends of Israel in America, have determined the broad outlines of US policy in the region. It has been left to American Presidents to implement that policy, with varying degrees of enthusiasm, and to deal with the tactical issues.”
Although Blankfort admits that this is a “slight exaggeration, perhaps,” it is ironic that Zunes refers to Green’s book to support his contention that Israel helps U.S. foreign policy elites, not vice versa.10 But irrespective of contrary evidence, Zunes asks that we put aside our critical faculties because “the strength of the lobby is often greatly exaggerated.”11 Furthermore, to ensure his readers are less likely to believe that the Israel lobby has a significant impact on guiding U.S. foreign policy, Zunes caricatures proponents of this point of view as belonging to the radical Right. No mention is made of Leftists who have long warned of the power of the lobby, like Edward Herman, Alexander Cockburn, and Jeffrey Blankfort; instead, Zunes points to anti-Semitic conservatives, like the politician Patrick Buchanan.12 Lest we forget, oil is the “primary issue.” Thus following Zunes’ example of using Zionists to back his unconvincing case for the overwhelming power of the U.S. arms industry, we could just as easily cite such Zionist sources to undermine his oil argument. For example, in the early 1980s, Morris Amitay, the former executive director of AIPAC, said: “We rarely see them [oil corporations] lobbying on foreign policy issues… In a sense, we have the field to ourselves.”
As this essay has demonstrated, being a progressive scholar does not necessarily guarantee that your analyses will effectively challenge the status quo. Thus while Zunes self-identifies as an anti-imperialist activist, he is a liberal Zionist at heart, and he is certainly not comfortable with advocating the type of systemic social change that we need to eradicate capitalism: by way of a contrast even the moderate civil rights leader, Martin Luther King, recognized that “the evils of capitalism are as real as the evils of militarism and the evils of racism” (King’s words). This explains why Zunes counsels U.S. citizens that “bringing about a more enlightened foreign policy is necessary for national security.”13
Instead of problematising the obvious contradictions between democracy and capitalism, Zunes suggests that the United States political system is simply being misused. He writes that “there is a growing sense that the Bush Administration is cynically manipulating the country’s genuine need for security for the sake of its rigid ideological constructs and its wealthy financial supporters.”14 Unbeknown to Zunes, cynical manipulation is nothing new, it is simply part and parcel of the misnomer that is capitalist democracy. Such shallow thinking necessarily leads Zunes to observe that one of the key problems of America’s counter-terrorism policies is that they confront “the symptoms rather than the cause.” But this will always be the case under capitalism: one would hardly expect the ruling class to attempt to address the root cause of injustice — that is for us to do. A capitalist elite would have lost its marbles if it ever traced universal exploitation back to capitalism itself.
Finally, it is critical to recognize that Zunes’ failure to differentiate between polyarchy (or low-intensity democracy) and more popular understandings of democracy, enables him to suggest with no sense of irony that “worldwide trends [have been] toward democracy and greater individual freedom throughout the world”. Furthermore, he is naïve enough to believe that the popularity of the United States “can be restored, but only if the United States shifts its policies to become more consistent with support for human rights, international law, sustainable economic development and demilitarization.” What Zunes fails to recognize is that the U.S. is already the foremost promoter of human rights — along with Israel — but only a neutered, low-intensity form of rights better known as humanitarian imperialism (see “The Project for A New American Humanitarianism”). Zunes, however, closes his eyes to such suggestions, which he refers to as “conspiracy theories,” and instead argues that what the world needs is just a more benign form of capitalism. “Foreign aid,” he writes, “should be directed toward poorer countries and in support of grassroots development initiatives and away from support for the wealthier countries and/or corrupt and autocratic governments.”15 But here he misses the point, the real solution is not capitalist foreign aid, the real solution is grassroots organizing unhindered by the manipulative funding regimes of U.S. foreign policy elites. This is why Zunes, like capitalism and Zionism, fails to provide the radical theory necessary to eradicate both capitalism and Zionism.
Michael Barker is an independent researcher who is currently based in the UK. His web site is http://michaeljamesbarker.wordpress.com. The author submitted this piece to PULSE.
– Notes –
- Stephen Zunes, “Defending Israel While Challenging its Policies,” in Alan Dershowitz (ed.) What Israel Means to Me (John Wiley & Sons, 2006), p.359. Zunes’ contribution to this book by the notorious Alan Dershowitz speaks volumes of the manner by which Zunes is willing to lend his anti-imperial writings to support Zionism. This is similar in many respects to Zunes’ service as the chair (since 2006) of the academic advisory board of the misnamed International Center for Nonviolent Conflict, and his willingness to help run a “Middle East Orientation Course” for the U.S. Air Force Special Operations School (Hurlburt Field, March 15-16, 2007) — a fact advertised nonchalantly on his current CV (pdf).
- Zunes, Tinderbox, p.13. For example, in October 2000, “after a series of scathing human rights reports from reputable non-governmental organizations criticizing Israeli actions, Congress approved a foreign aid allocation of $2.82 billion to Israel, which critics charged was essentially rewarding the government for its repression.” (p.26) The reputable groups referred to here include Amnesty International and Human Rights Watch.Likewise on May 2, 2002, the U.S. Senate, in a 94-2 vote, passed a resolution which referred to “the Israeli assault on Palestinian towns and refugee camps as ‘necessary steps to provide security to its people by dismantling the terrorist infrastructure in the Palestinian areas.’” Such actions are obviously interpreted by “observers in the Arab and Islamic world as an act of racism”; indeed, “the majority of liberal Democrats — most of whom were on record in support of human rights in Guatemala, East Timor, Colombia, Tibet, and elsewhere — had decided, in a situation where the victims of human rights abuses were Arabs, to instead throw their support to the perpetrator of the human rights abuses. In fact, one of the two sponsors of the House resolution was California Democrat Tom Lantos, who is the long-time chairman of the Human Rights Caucus.” (p.30) Although not mentioned by Zunes, the late Tom Lantos, “the only Holocaust survivor ever elected to Congress,” was a well known Zionist.
- Zunes, Tinderbox, p.40
- Zunes, Tinderbox, p.40 Zunes later adds: “The irony of U.S. policy in the Persian Gulf is that is has little strategic justification given the costs.” He continues, that their policies “actually endangers the security of both the United States and its Gulf allies.” Yet to Zunes this imperialist foreign policy should be deemed some sort of mistake, “a kind of foreign policy by catharis rather than based on any rational strategic calculation.” (p.104) If only Zunes would read such foreign policy blueprints like those of the Project for a New American Century, it would become apparent that U.S. foreign policy is based on very rational criteria, but of course not criteria that is in the rational best interests of either the U.S. or global populous. Zunes observes that: “The worst single terrorist atrocities in the Middle East in recent decades were committed by Christians: the Phalangists, a Lebanese Maronie militia, were responsible for the massacres of thousands of Palestinians at the Tal al-Zataar refugee camp in June 1976 and the Sabra and Shatila refugee camps in September 1982.” (p.171) Later Zunes fills in more details on the background of this group, writing: “The ‘Muslim’ side of the Lebanese civil war in the mid-1970s was actually a largely secular grouping known as the Lebanese National Movement (LNM)… Seeking to block the LNM’s demands for constitutional reform to create a more representative political system that would likely enact policies less sympathetic with the West, the United States clandestinely supported the Phalangist militia, a neo-fascist grouping based in the country’s Maronite Christian community.” (p.184) On a related matter, “the most serious single terrorist bombing against a civilian target in Middle East history was the March 1985 blast in a suburban Beirut neigbourhood that killed 80 people and wounded 200 others.” As Zunes relates, this attack “was ordered by CIA director William Casey and approved by President Reagan as part of an unsuccessful effort to assassinate an anti-American Lebanese cleric.” (p.200)
- Zunes, Tinderbox, p.41. Zunes reference for this point is wwww.politicalmoneyline.com On the previous page of his book to support the same point he refers to Alan Kronstadt et al, Hostile Takeover: How the Aerospace Industries Association Gain Control of American Foreign Policy and Doubl e Arms Transfers to Dictators (Project on Demilitarization and Democracy, 1995).
- Zunes, Tinderbox, p.161. Zunes say that this policeman service is supplemented by Israel’s role in allowing “battlefield testing of American arms,” in exporting homegrown munitions to U.S. allies, and in funneling U.S. arms to groups “too unpopular in the United States for openly granting direct military assistance”. (p.161)
- Zunes, Tinderbox, p.154. “The rise of the rightist Likud Bloc in Israel and the right-ward drift in the Labor Party since 1967 is in large part due to this large-scale American support. Rightist Israeli political leaders such as Menachem Begin, Yitzhak Shamir, Benyamin Netanyahu and Ariel Sharon would certainly have existed without U.S. backing, but they would have likely been part of a small right-wing minority in the Knesset and would have never become prime ministers.” Zunes, Tinderbox, p.155.
- Zunes, Tinderbox, pp.157-8. With respect to the peace movement, Zunes writes: “For many years, most mainstream peace and human rights groups avoided the issue, not wanting to alienate many of their Jewish and other liberal constituents supportive of the Israeli government.” (p.158)
- Zunes, Tinderbox, p.158, p.159.
- Zunes, Tinderbox, p.162 (footnote 110)
- Zunes, Tinderbox, p.159. “For an elaboration of this argument,” Zunes points us to his article, “The Roots of the U.S.-Israeli Relationship,” New Political Science, Nos 21-22, Spring-Summer 1992. He also points to A.F.K. Organski’s, The $36 Billion Bargain: Strategy and Politics in U.S. Assistance to Israel (Columbia University Press, 1990).
- Zunes adds that: “In a classic case of exactly this type of anti-Semitic scapegoating, members of Congress and their aides will claim — always off the record — that they or their boss has to take pro-militarist and anti-human rights positions towards the Israeli-Palestinian conflict because of the need for Jewish campaign contributions. Similarly, as a means of diverting Arab criticism from U.S. policy makers, American diplomats routinely tell representatives of Arab governments that wealth Jews essentially dictate U.S. Middle East policy. The senior President Bush made it clear that such scapegoating is acceptable when — during the debate on the proposed $10 billion loan guarantees to Israel in 1992 — he claimed that he was just ‘one lonely little guy’ standing up to ‘a thousand lobbyists’ swarming on Capitol Hill.” (p.164)
- Zunes, Tinderbox, p.217.
- Zunes, Tinderbox, p.221. Ironically, the majority of the U.S. governments “wealth financial supporters” happen to be Jewish.
- Zunes, Tinderbox, p.14, p.225, p.226. Zunes later adds that: “There is nothing inherently wrong with the United States or other countries supporting democratic opposition movement against autocratic regimes”; although he counsels that in the case of Iraq this would be counterproductive owing to the United States’ damaged credibility in the region. However, he adds that before the United States can work in such a manner it must first “encourage greater freedom in countries it considers it allies, such as Saudi Arabia”. (p.229)
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Sam Husseini: The entire US establishment helped lie their way into the Iraq war
By Slava Zilber | American Herald Tribune | October 14, 2019
Sam Husseini is a senior analyst with the Institute for Public Accuracy, independent journalist and contributor to The Nation and FAIR.
Slava Zilber: Sam, three years ago, you appeared on Talk Nation Radio with David Swanson and spoke about the case of the GCHQ whistleblower Katharine Gun. You pointed out that the people involved in the spying on the UN and the people authorizing the Iraq War were not held accountable:
“Virtually everybody who went along with the war, whether it is Kerry or Clinton, of course, the Bush administration themselves has falsified their own records in terms of why, what they did, when they did, why they did it, to the extent that they’ve been scrutinised at all.”
You also address it in a recent article. And recently, Joe Biden has been lying about his position on the Iraq War. How can such an important issue escape meaningful scrutiny? … continue
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