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The Clintons’ $93 Million Romance with Wall Street: a Catastrophe for Working Families, African-Americans, and Latinos

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By Richard W. Behan | CounterPunch | March 16, 2016

For 24 years Bill and Hillary Clinton have courted Wall Street money with notable success. During that time the New York banks contributed:

* $11.17 million to Bill Clinton’s presidential campaign in 1992.

*$28.37 million for his re-election in 1996.

*$2.13 million to Hillary Clinton’s senatorial campaign in 2002.

*$6.02 million for her re-election in 2006.

*$14.61 million to Hillary Clinton’s presidential campaign in 2008.

*$21.42 million to her 2016 campaign.

The total here is $83.72 million for the six campaigns,i ii disbursed from eleven congenial banks: Goldman Sachs, Citigroup, UBS, Bank of America/Merrill Lynch, Wells Fargo, Barclay’s, JP Morgan Chase, CIBC, Credit Suisse, Deutsche Bank, and Morgan Stanley.iii iv

Then there were the speeches. Sixteen days after leaving the White House in 2001, Mr. Clinton delivered a speech to Morgan Stanley, for which he was paid $125,000. That was the first of many speeches to the New York banks. Over the next fourteen years, Mr. Clinton’s Wall Street speaking engagements earned him a total of $5,910,000:v

*$1,550,000 from Goldman Sachs.

*$1,690,000 from UBS.

*$1,075,000 from Bank of America/Merrill Lynch.

*$770,000 from Deutsche Bank.

*$700,000 from Citigroup

After she resigned as Secretary of State in 2012 Hillary Clinton took to the lecture circuit as well. Some of her income has come to light during the current presidential campaign—the infamous $675,000 she was paid for three speeches to Goldman Sachs. That disclosure, however, belittles her financial achievement and the scope of her audiences. She also addressed the Bank of America/Merrill Lynch, Morgan Stanley, Deutsche Bank, UBS, Ameriprise, Apollo Management Holdings, CIBC, Fidelity Investments, and Golden Tree Asset Management. In doing so she earned another $2,265,000.vi

No other political couple in modern history has enjoyed so much money flowing to them from Wall Street for such a long time—$92.57 million over a quarter century.

During a CNN forum on February 3, Anderson Cooper wondered if Goldman Sachs’ $675,000 might impact her prospective presidential decisions. Defending her integrity with undisguised indignation, she described her independence from the banks:

Anybody who knows me, who thinks that they can influence me, name anything they’ve influenced me on. Just name one thing. I’m out here every day saying I’m going to shut them down, I’m going after them. I’m going to jail them if they should be jailed. I’m going to break them up.vii

Her campaign website confirms her fierce determination to oversee the banks and hold them strictly to account. “Wall Street must work for Main Street,” the website claims, outlining her program for “Wall Street Reform:”

Veto Republican efforts to repeal or weaken Dodd-Frank

Tackle dangerous risks in the big banks and elsewhere in the financial system.

Hold both individuals and corporations accountable when they break the law.viii

$675,000 might be insufficient to elicit Ms. Clinton’s sympathetic ear, but a quarter century of accepting tens of millions of dollars is not so easily dismissed. It would likely have some impact on the Clintons’ sense of gratitude and certainly on their social, cultural, and political environments.

Over that period of time, while one of them or the other held public office almost continuously, the couple accumulated a net worth of $125 million.ix x Measured by family wealth, this inserted the couple into the top 1% of American families by a factor of 16 ($7.88 million is the threshold).

The Clintons found that stratum of society agreeable. In New York, their home upon leaving the White House, they moved easily among other multimillionaires, the celebrated, wealthy, and accomplished people of the city. Lloyd Blankfein, Robert Rubin, and Henry Paulson are examples, CEOs of the benefactor Wall Street banks. The couple could scarcely avoid adopting the mindset, language, values, and political perspectives of the people who now constituted their peer group.

Breaking up banks, jailing the lawless executives, forcing Wall Street to work for Main Street: Hillary Clinton’s stern proclamations of impartial law enforcement and strict regulation are difficult to take seriously.

Wall Street doesn’t. One bank executive assured his clients, “We continue to believe Clinton would be one of the better candidates for financial firms.” He was quoted in a CNN Money article, “Wall Street Isn’t Worried about Hillary Clinton’s Plan,” which stated,

Hillary Clinton unveiled her big plan to curb the worst of Wall Street’s excesses…. The reaction from the banking community was a shrug, if not relief.xi

There is good reason for the banks’ sanguine view. Over the 24 years of the romance, the Clintons first reoriented their political party, gave it a new name, the New Democratic Party, and put it at Wall Street’s service. Then they engineered financial opportunities for the New York banks of immense value—running into the hundreds of billions. And through the years as President, Senator, and Secretary of State the Clintons supported Wall Street’s interests at every necessary turn and without fail.

In the early 1990s, chairing the Democratic Leadership Council, Bill Clinton ushered in the centrist, triangulating New Democratic Party, explicitly to be more business-friendly—and to attract the financial support of corporate America. Wall Street supported his 1992 campaign handsomely, and Bill Clinton became the first president under the new banner. Hillary Clinton was at his side, a de facto minister-without-portfolio.

When he appointed Robert Rubin of Goldman Sachs as Secretary of the Treasury Department, Clinton established a precedent. For the next 24 years every Administration would find Wall Street executives to serve in the position. The New York banks became the primal clients of the New Democratic Party.

But the working families of America and the African-American and Hispanic communities—the party’s historic constituencies—were betrayed and abandoned, deprived of effective representation in Washington. The Clintons’ political campaigns over the next decades became monumental hypocrisies, Bill donning sunglasses to play his saxophone for Arsenio Hall, Hillary visiting black churches to hug the parishioners. They speak warmly to the traditional constituencies with carefully scripted political rhetoric, currying their favor, depending on them for electoral victory, but effectively obscuring the truth of their betrayal.

The traditional constituencies were not only betrayed, but targeted. On taking office Mr. Clinton announced, “The era of big government is over.” On that cue he co-opted two issues long

used by Republicans to mask their party’s racism: “welfare” and “crime.” To address the issues two laws were passed in Clinton’s first term that savaged the betrayed constituencies.

The first was The Personal Responsibility and Work Opportunity Reconciliation Act. It fulfilled Clinton’s promise to “end welfare as we know it,” and the punishing effects it set in motion have yet to abate. Since the end of the Clinton Administration, poverty in the U.S. has nearly doubled: “… the number of Americans living in high-poverty areas rose to 13.8 million in 2013 from 7.2 million in 2000, with African-Americans and Latinos driving most of the gains.”xii

To show how tough on crime he could be, Clinton next guided The Violent Crime Control and Law Enforcement Act of 1994 through Congress. A flurry of prison construction quickly followed, an industry of private for-profit prisons took hold and flourished, and a skyrocketing population mostly of young black males soon filled them, most frequently charged with drug offenses, non-violent and victim-free.

Sixteen years later the effects of the law were described in a searing book: The New Jim Crow: Mass Incarceration in the Age of Colorblindness.

The author of the book is a distinguished legal scholar and human rights activist, Michelle Alexander.

Ms. Alexander well understands how the Clintons and their creation, the New Democratic Party, left working families and communities of color without a political voice. And no one addresses the tragedy more forcefully. Her latest work is an article, “Black Lives Shattered,in the February 29, 2016 issue of The Nation. She details how the two Clinton laws have devastated African-American families and sent millions—particularly those young black males—to prison. In the article’s caption, she asks, The Clinton’s legacy has been the impoverishment of black America—so why are we still voting for them?

The online version of her article carries a different title, Why Hillary Clinton Doesn’t Deserve the Black Vote . Her compelling case is abbreviated in the subtitle:

From the crime bill to welfare reform, policies Bill Clinton enacted—and Hillary Clinton supported—decimated black America.

When pressed, and with limited enthusiasm Hillary Clinton now apologizes for the laws, suggesting they are no longer quite so appropriate.

But she has not, cannot, and unquestionably will not mention two other laws passed at the bidding of President Clinton’s Treasury Secretary, Robert Rubin.

These laws enriched the Wall Street banks by hundreds of billions of dollars, but they too devastated working families, African-Americans, and Latinos.

The first was The Financial Services Modernization Act of 1999, repealing the Glass-Steagall legislation of 1933. Now it was legal once more for financial institutions to mix commercial and investment banking. Goldman Sachs et al. could now use depositor’s funds, insured by the Federal Deposit Insurance Corporation, to buy up “subprime” mortgages, the high-interest debt obligations of typically low-income, black, and Latino families.

The next law was The Commodity Futures Modernization Act. Now Goldman Sachs et al. could transform packages of those “subprime” mortgages into complicated derivatives called “mortgage-backed-obligations,” have them fraudulently rated as AAA investments, and sell them around the world, without limit, without restriction, without regulation, at immense profit.

For eight years the bubble inflated, and then it collapsed in the last year of George Bush’s Administration. Real estate values plummeted. The stock market was hammered. So was the U.S. economy. And so tragically were many low-income, African-American, and Latino families. $13 trillion in household wealth vaporized. Nine million workers lost their jobs. Five million families were evicted from their homes.xiii

This is what the Clinton Administration, and the New Democratic Party, had wrought.

The banks were caught with hundreds of billions in mortgage-backed derivatives still in the pipeline, the market values of which were dropping like stones. Wall Street’s prospective losses were horrific; bankruptcies loomed. But George Bush’s Treasury Secretary was the obligatory Wall Streeter: Mr. Hank Paulson, recently CEO of Goldman Sachs. In a heartbeat Mr. Paulson rammed through Congress The Emergency Economic Stabilization Act of 2008. It was known as the “Troubled Asset Relief Program,” and it handed Mr. Paulson $700 billion of taxpayers’ money to buy the near-worthless securities from the banks.

Hillary Clinton, now the U.S. Senator from New York, voted for the bill, telling a New York radio station the next day, “I think the banks of New York..are probably the biggest winners in this.”xiv

Eagerly, Mr. Paulson started buying, typically paying the banks half again the market value of the “troubled assets.”xv But a presidential campaign was underway, and soon he would have to stop.

Barack Obama, overcoming Hillary Clinton in the primaries, was elected as the second president from the New Democratic Party. Mr. Obama’s campaign contributions from Wall Street:

*Goldman Sachs: $1,034,615

*JP Morgan Chase: $847,855

*Citigroup: $755,057

*Morgan Stanley: $528,182

The total here is $3.7 million.xvi (Hillary Clinton’s campaign, apparently thought more likely to succeed, was supported with $14.6 million from the banks.xvii)

President Obama’s choice of Wall Street bankers to head his Treasury Department was Mr. Timothy Geithner, lately the president of the Federal Reserve Bank of New York. Mr. Geithner wasted no time in resuming the “troubled asset” purchases, and his execution of the program was no less profitable for the banks than Mr. Paulson’s.xviii

Wall Street’s grip on the New Democratic Party, however, and its influence in the Obama Administration, appeared in the Department of Justice as well. Mr. Eric Holder joined the Administration from the law firm of Covington Burling, which represents in Washington most of the Wall Street banks. Charged with prosecuting their criminal behavior, Mr. Holder found the banks “too big to fail.” Instead of criminal indictments and lawsuits, then, Mr. Holder negotiated with each of the banks a financial penalty to be paid from corporate funds. No corporate executives were jailed, no personal fines levied, no records of criminal conduct filed, no salaries reduced, no bonuses denied.

Today the Wall Street banks are larger and more powerful than ever, and Mr. Holder has returned to Covington Burling. President Obama, however—of the New Democratic Party—has provided no similar relief to the brutalized working families and communities of color. Their struggles continue, the crime and welfare laws have not been repealed, and the title of a recent study tells the tragic truth: During Obama’s Presidency Wealth Inequality has Increased and Poverty Levels are Higher.xix

Because of the Clintons’ romance with Wall Street and their corrupt New Democratic Party, the New York bankers and the Clintons are richer today. Others—betrayed, abandoned, savaged—are not.

Notes

i“Two Clintons. 41 years. $3 Billion,” Washington Post, November 19, 2015

ii“Occupy Hillary Clinton’s Wall Street Speeches,” Huffpost Politics, February 28, 2016

iii“Hillary Clinton. Top 20 Contributors, 1999-2002,” http://www.opensecrets.org/politicians/contrib.php/type==C&cid..

iv“Hillary Clinton, Jeb Bush Still Favorites of Wall Street Banks,” Huffpost Politics, October 22, 2015

v“$153 Million in Bill and Hillary Speaking Fees, Documented,” Robert Yoon, CNN, Updated February 6, 2016.

vi“Hillary Clinton Made More in 12 Speeches to Big Banks That Most of Us Earn in a Lifetime,” https://theintercept.com/2016/01/08/hillary-clinton-earned-more-from-12-speeches-to-big-banks-than-most-americans-earn-in-their-lifetime/

vii“Clinton Defends Wall Street Speeches at CNN Town Hall,” Time, February 4, 2016

viiiFrom Hillary Clinton’s campaign website, under “Wall Street Reform,” http://hillaryclinton.com/issues/wall-street

ix“Hillary Clinton net worth: $45 Million,” http://www.celebritynetworth.com/

x“Bill Clinton net worth: $80 Million,” http://www.celebritynetworth.com/

xi“Wall Street Isn’t Worried about Hillary Clinton’s Plan,” CNN Money, October 8, 2015.

xii“Poverty Has Nearly Doubled Since 2000 in America,” International Business Times, August 9, 2015

xiii“Wall Street Reform: Wall Street must work for Main Street,” http://hillaryclinton.com/issues/wall-street

xiv“Hillary Clinton’s Tough Talk on Wall Street,” http://www.thedailybeast.com/articles/2015/11/13/hillary-clinton..

xv“Troubled Asset Relief Program,” Wikipedia

xvi“Barack Obama. Top Contributors, 2008 Cycle,” http;//www.opensecrets.org/pres08/contrib.php/cid=

xviiWashington Post, “Two Clintons. 41 Years. $3 Billion”

xviiiSee Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, by Neil Barofsky, passim.

xixhttp://www.counterpunch.org/2016/02/26/during-obamas-presidency-wealth-inequality-has-increased-and-poverty-levels-are-higher/

Richard W. Behan lives in Corvallis, Oregon. He can be reached at: rwbehan@comcast.net.

March 16, 2016 Posted by | Corruption, Deception, Economics, Ethnic Cleansing, Racism, Zionism, Progressive Hypocrite, Timeless or most popular | , , , , | 2 Comments

US/NATO Embrace Psy-ops and Info-War

By Don North | Consortium News | September 2, 2015

As reflected in a recent NATO conference in Latvia and in the Pentagon’s new “Law of War” manual, the U.S. government has come to view the control and manipulation of information as a “soft power” weapon, merging psychological operations, propaganda and public affairs under the catch phrase “strategic communications.”

This attitude has led to treating psy-ops – manipulative techniques for influencing a target population’s state of mind and surreptitiously shaping people’s perceptions – as just a normal part of U.S. and NATO’s information policy.

Dr. Stephen Badsey, Professor of Conflict studies, Wolverhampton University, U.K.

Dr. Stephen Badsey, Professor of Conflict studies, Wolverhampton University, U.K.

“The NATO case and argument is that NATO’s approach to psy-ops is to treat it as an essentially open, truthful and benign activity and that, plus the elimination of any meaningful distinctions between domestic and foreign media institutions and social media, means that psy-ops and public affairs have effectively fused,” said British military historian, Dr. Stephen Badsey, one of the world’s leading authorities on war and the media.

Badsey said NATO has largely abandoned the notion that there should be a clear distinction between psy-ops and public affairs, although NATO officially rules out the dissemination of “black propaganda,” knowingly false information designed to discredit an adversary.

“The long argument as to whether a firewall should be maintained between psy-ops and information activities and public affairs has now largely ended, and in my view the wrong side won,” Badsey added.

And, as part of this Brave New World of “strategic communications,” the U.S. military and NATO have now gone on the offensive against news organizations that present journalism which is deemed to undermine the perceptions that the U.S. government seeks to convey to the world.

That attitude led to the Pentagon’s new “Law of War” manual which suggests journalists in wartime may be considered “spies” or “unprivileged belligerents,” creating the possibility that reporters could be subject to indefinite incarceration, military tribunals and extrajudicial execution – the same treatment applied to Al Qaeda terrorists who are also called “unprivileged belligerents.” [See Consortiumnews.com’sPentagon Manual Calls Some Reporters Spies.”]

The revised “Law of War” manual has come under sharp criticism from representatives of both mainstream and independent media, including The New York Times’ editors and the Committee to Protect Journalists, as well as academics such as Dr. Badsey.

“The attitude toward the media expressed in the 2015 Pentagon manual is a violation of the international laws of war to which the USA is a signatory, going back to the 1907 Hague Convention, and including the Geneva Conventions,” said Badsey, a professor of conflict studies at Wolverhampton University in the United Kingdom and a long-time contact of mine who is often critical of U.S. military information tactics.

“But [the manual] is a reflection of the attitude fully displayed more than a decade ago in Iraq where the Pentagon decided that some media outlets, notably Al Jazeera, were enemies to be destroyed rather than legitimate news sources.”

The Vietnam Debate

The Pentagon’s hostility toward journalists whose reporting undermines U.S. government propaganda goes back even further, becoming a tendentious issue during the Vietnam War in the 1960s and 1970s when the war’s supporters accused American journalists of behaving treasonously by reporting critically about the U.S. military’s strategies and tactics, including exposure of atrocities such as the My Lai massacre.

In the 1980s, conservatives in the Reagan administration – embracing as an article of faith that “liberal” reporters contributed to the U.S. defeat in Vietnam – moved aggressively to discredit journalists who wrote about human rights violations by U.S.-backed forces in Central America. In line with those hostile attitudes, news coverage of President Ronald Reagan’s invasion of Grenada in 1983 was barred, and in 1990-91, President George H.W. Bush tightly controlled journalists trying to report on the Persian Gulf War. By keeping out – or keeping a close eye on – reporters, the U.S. military acted with fewer constraints and abuses went largely unreported.

This so-called “weaponizing of information” turned even more lethal during the presidency of Bill Clinton and the war over Kosovo when NATO identified Serb TV as an enemy “propaganda center” and dispatched warplanes to destroy its studios in Belgrade. In April 1999, acting under orders from U.S. Army General Wesley Clark, American bombers fired two cruise missiles that reduced Radio Televizija Srbija to a pile of rubble and killed 16 civilian Serb journalists working for the government station.

Despite this willful slaughter of unarmed journalists, the reaction from most U.S. news organizations was muted. However, an independent association of electronic media in Yugoslavia condemned the attack.

“History has shown that no form of repression, particularly the organized and premeditated murder of journalists, can prevent the flow of information, nor can it prevent the public from choosing its own sources of information,” the group said.

The (London) Independent’s Robert Fisk remarked at the time, “once you kill people because you don’t like what they say, you change the rules of war.” Now, the Pentagon is doing exactly that, literally rewriting its “Law of War” manual to allow for the no-holds-barred treatment of “enemy” journalists as “unprivileged belligerents.”

Despite the 1999 targeting of a news outlet in order to silence its reporting, a case for war crimes was never pursued against the U.S. and NATO officials responsible, and retired General Clark is still a frequent guest on CNN and other American news programs.

Targeting Al Jazeera

During the presidency of George W. Bush, the Arab network Al Jazeera was depicted as “enemy media” deserving of destruction rather than being respected as a legitimate news organization – and the news network’s offices were struck by American bombs. On Nov. 13, 2001, during the U.S. invasion of Afghanistan, a U.S. missile hit Al Jazeera’s office in Kabul, destroying the building and damaging the homes of some employees.

On April 8, 2003, during the U.S. invasion of Iraq, a U.S. missile hit an electricity generator at Al Jazeera’s Baghdad office, touching off a fire that killed reporter Tareq Ayyoub and wounding a colleague. The Bush administration insisted that the attacks on Al Jazeera offices were “accidents.”

However, in 2004, as the U.S. occupation of Iraq encountered increased resistance and U.S. forces mounted a major offensive in the city of Fallujah, Al Jazeera’s video of the assault graphically depicted the devastation – and on April 15, 2004, Defense Secretary Donald Rumsfeld decried Al Jazeera’s coverage as “vicious, inaccurate and inexcusable.”

According to a British published report on the minutes of a meeting the next day between President Bush and UK Prime Minister Tony Blair, Bush suggested bombing Al Jazeera’s headquarters in Qatar but was talked out of the idea by Blair who said it would provoke a worldwide backlash.

During the Iraq War, Dr. Badsey wrote the following observation which I cited in my book on military/media relations, Inappropriate Conduct: “The claim that in 2004 at the first battle of Fallujah the U.S. Marine Corps ‘weren’t beaten by the terrorists and insurgents, they were beaten by Al Jazeera television’ rather than that they [U.S. forces] employed inappropriate tactics for the political environment of their mission, is recognizable as yet another variant on the long-discredited claim that the Vietnam War was lost on the television screens of America.”

Although the notion of Vietnam-era journalists for U.S. media acting as a fifth column rather than a Fourth Estate is widely accepted among conservatives, the reality was always much different, with most of the early Vietnam War coverage largely favorable, even flattering, before journalists became more skeptical as the war dragged on.

In a recent interview on NPR radio, Charles Adams, a senior editor of the new “Law of War” manual, was unable to cite examples of journalists jeopardizing operations in the last five wars – and that may be because there were so few examples of journalistic misconduct and the handful of cases involved either confusion about rules or resistance to news embargoes that were considered unreasonable.

Examining the history of reporters dis-accredited during the Vietnam War, William Hammond, author of a two-volume history of U.S. Army relations with the media in Vietnam, found only eight dis-accreditations, according to military files.

Arguably the most serious case involved the Baltimore Sun’s John Carroll, an Army veteran himself who believed strongly that it was important that the American people be as thoroughly informed about the controversial war as possible. He got in trouble for reporting that the U.S. Marines were about to abandon their base at Khe Sahn. He was accused of violating an embargo and was stripped of his credentials, though he argued that the North Vietnamese surrounding the base were well aware of the troop movement.

Toward the end of the war, some reporters also considered the South Vietnamese government so penetrated by the communists that there were no secrets anyway. Prime Minister Nguyen van Thieu’s principal aide was a spy and everyone knew it except the American people.

During his long career, which included the editorship of the Los Angeles Times, Carroll came to view journalists “almost as public servants and a free press as essential to a self-governing nation,” according to his obituary in The New York Times after his death on June 14, 2015.

Strategic Communication

During the Obama administration, the concept of “strategic communication” – managing the perceptions of the world’s public – has grown more and more expansive and the crackdown on the flow of information unprecedented. More than any of his predecessors, President Barack Obama has authorized harsh legal action against government “leakers” who have exposed inconvenient truths about U.S. foreign policy and intelligence practices.

And Obama’s State Department has mounted a fierce public campaign against the Russian network, RT, that is reminiscent of the Clinton administration’s hostility toward Serb TV and Bush-43’s anger toward Al Jazeera.

Since RT doesn’t use the State Department’s preferred language regarding the Ukraine crisis and doesn’t show the requisite respect for the U.S.-backed regime in Kiev, the network is denounced for its “propaganda,” but this finger-pointing is really just part of the playbook for “information warfare,” raising doubts about the information coming from your adversary while creating a more favorable environment for your own propaganda. [See Consortiumnews.com’sWho’s the Propagandist? US or RT?”]

This growing fascination with “strategic communication” has given rise to NATO’s new temple to information technology, called “The NATO Strategic Communications Center of Excellence” or STRATCOM, located in Latvia, a former Soviet republic that is now on the front lines of the tensions with Russia.

On Aug. 20, some of the most influential minds from the world of “strategic communications” gathered in Latvia’s capital of Riga for a two-day conference entitled “Perception Matters.” A quotation headlined in all its communications read: “Since wars begin in the minds of men, it is in the minds of men that the defenses of peace must be constructed” – noble sentiments perhaps but not always reflected in the remarks by more than 200 defense and communications experts, many of whom viewed information not as some neutral factor necessary for enlightening the public and nourishing democracy, but as a “soft power” weapon to be wielded against an adversary.

Hawkish Sen. John McCain, R-Arizona, led a delegation of U.S. senators and said STRATCOM was needed to combat Russia and its President Vladimir Putin. “This Center will help spread the truth,” said McCain – although “the truth” in the world of “strategic communications” can be a matter of perception.

~

Don North is a veteran war correspondent who covered the Vietnam War and many other conflicts around the world. He is the author of a new book, Inappropriate Conduct,  the story of a World War II correspondent whose career was crushed by the intrigue he uncovered.

September 3, 2015 Posted by | Deception, Mainstream Media, Warmongering, Progressive Hypocrite, Timeless or most popular, War Crimes | , , , , , | Leave a comment

Hillary Remains Clueless About Regulation on the 28th Anniversary of the Keating Five Meeting

By William K. Black | New Economic Perspectives | April 9, 2015

The Clintons’ Unlearned Lessons of the Keating Five Meeting

On April 9, 1987, twenty-eight years ago today, my colleagues and I from the Federal Home Loan Bank of San Francisco (FHLBSF) met with five senators at the behest of the most notorious savings and loan (S&L) fraud – Charles Keating. Keating was looting Lincoln Savings through classic “accounting control fraud” techniques. Our examiners and enforcement investigation led by Anne Sobol (detailed from Litigation Division) had discovered and documented some of Keating’s worst frauds. Keating, desperate to prevent our recommendation that the federal agency place Lincoln Saving into conservators (removing Keating from power), used the five senators to try to pressure us into taking no enforcement action against Lincoln Savings and its officers for the largest violation of rules in the history of our agency.

The agency’s statutory authority to place a state-chartered S&L like Lincoln Savings into conservatorship had lapsed so Bank Board Chairman Edwin Gray could not act on our recommendation until Congress passed legislation restoring our power. The five Senators, of course, would have a great deal to say about whether and when that legislation was passed. Because we refused to give in to their intimidation, the Keating Five helped ensure that the power to remove Keating from power was not passed until after Gray’s term ended – and President Reagan’s cynical secret deal with Speaker of the House James Wright ensured that Reagan would not reappoint Gray.

Gray’s successor, M. Danny Wall, was a Republican political staffer whose boss, Senator Jake Gran, after a single meeting with Keating had his number and refused to ever meet with him again. But the lesson Wall took from seeing Gray reduced to roadkill at the hands of Speaker Wright and the Keating Five was to never block the road when powerful thieves and their political cronies are racing down that road and eager to run you over.

Wall first took the unprecedented step of removing our (the FHLBSF) jurisdiction over Lincoln Savings and gave Keating a sweetheart deal. Wall’s critical, Neville Chamberlain-like order to his senior staff to reach an “amicable resolution” with Keating (which, given Keating, meant “surrender”) occurred immediately after a meeting with Keating. Wall’s meeting with Keating, in turn, occurred immediately after Keating met with Senator Glenn and Speaker Wright. Keating and Wright used their after-lunch meeting to plot how to get me fired and sued. Keating hired private investigators twice that we know of to try to find dirt on me.  Fortunately, I live a very Midwestern personal life. Keating eventually sued me for $400 million.

Keating, being Keating, started his meeting with Wall by noting that he had just met with Speaker Wright and Senator Glenn. Keating was capable of being subtle, but he preferred smash mouth football, so his next line, referring to the Speaker, was that “There’s someone you would have much better relationships with if you took care of your red-headed lawyer in San Francisco.” I still had bright red hair (and beard) at that time.

After getting rid (he thought) of the accursed FHLBSF regulators, Wall proceeded to force Joe Selby, the Nation’s most respected financial regulator, to resign as our top supervisor for Texas.  Selby’s sin was being a vigorous regulator. The Texas frauds targeted him for removal and successfully enlisted Speaker Wright’s enthusiastic support through contributions and by telling Wright that Selby was gay. Bank Board Chairman Gray, who personally recruited Selby and Mike Patriarca because of their reputations as the Nation’s best financial regulators, had placed Selby and Patriarca in charge of the two states with the worst fraud problems (Texas and California). Wall, while still a congressional aide, had urged Gray to fire Selby to placate the Speaker. Gray refused. Wall now publicly took “credit” for forcing Selby to resign or be fired.  Within months, Wall had removed or sidelined the Nation’s best financial regulators.

Keating’s successful extortion of Wall to remove the FHLBSF’s jurisdiction over Lincoln Savings did not work out well for Wall and the Keating Five for Keating used the sweetheart deal to intensify his looting of Lincoln Savings and its customers which led it to become the most expensive financial institution failure in U.S. history (at what now seems a quaint $3.4 billion), to sell worthless (and uninsured) junk bonds of Lincoln Savings’ insolvent holding company, and to target tens of thousands of widows for those sales. My extensive notes of the Keating Five meeting led to a Senate ethics investigation of the Keating Five. The Democratic Party Senate Committee colleagues on that investigation spent most of their energy attacking us, the regulators, for the high crime of criticizing Senators for aiding the Nation’s most notorious fraud loot the S&L and rip off widows. (Senators Cranston, Riegle, Glenn, and DeConcini were Democrats. Senator McCain was the lone Republican.)

The type of violations we had documented were invariably fatal. Keating had recruited the Keating Five through political contributions and through hiring Alan Greenspan as a lobbyist. Greenspan also served Keating as his outside economist to attempt to prevent the agency from adopting effective regulations to restrain looting by the Keatings of the world. In that capacity Greenspan had famously claimed that Lincoln Savings posed no foreseeable risk of loss to the FSLIC insurance fund.  Greenspan was slightly (as in 180º) off as I just explained.

But here’s the thing – given their ages, the lessons of the S&L debacle should have been the formative experiences for everyone involved in the most recent crisis. Wall resigned in disgrace in December 1989 after months of House hearings. The Senate ethics committee hearings on the “Keating Five” took place in 1990 and 1991.

“These [Senate ethics committee] hearings would take place from November 15 through January 16, 1991.[31] They were held in the Hart Senate Office Building‘s largest hearing room.[51] They were broadcast live in their entirety by C-SPAN, with CNN and the network news programs showing segments of the testimonies.[51] At the opening of the hearings, as The Washington Post would later write, ‘the senators sat dourly alongside one another in a long row, a visual suggestive of co-defendants in a rogues’ docket.’[52] Overall, McCain would later write, ‘The hearings were a public humiliation.’[51]

The committee reported on the other four senators in February 1991, but delayed its final report on Cranston until November 1991.”

Greenspan’s role was discussed in both the House and Senate hearings.

“Progressives” tend to roll their eyes in disgust at the entire “Whitewater” investigation, but two points are worth noting in terms of what the scandal should have taught the Clintons and their appointees. First, James McDougall, the CEO, looted Madison Guaranty through classic accounting control fraud techniques. (He was acquitted by a jury of one series of alleged bank frauds and convicted subsequently of other band frauds.)

James Clark, the Bank Board examiner-in-charge (EIC) of the 1986 examination of Madison Guaranty, testified in front of Congress about McDougall’s domination of the S&L and his massive multiple frauds. Clark’s testimony is devastating.

Second, McDougall’s frauds were made possible by the criminogenic environment created by the three “de’s” – deregulation, desupervision, and de facto decriminalization – and McDougall was brought to book when the regulators and prosecutors learned their lessons and got rid of the three “de’s.” The FSLIC was appointed the conservator for Madison Guaranty in February 1989.

Then first lady Hillary Clinton received substantial adverse publicity about her role not simply as an investor with but also as an attorney for the S&L.  She and her husband were publicly humiliated by the sex aspects of the investigation. Both Clintons, therefore, would logically have come out of the experience with a strong appreciation of how dangerous accounting control frauds are, why bank CEOs pose by far the greatest risk of fraud and do so through accounting fraud techniques (the fraud “recipe” for a lender) that require the lender to intentionally make large numbers of bad loans. This, in turn, requires the CEO to suborn the underwriting and internal controls. The Clintons should have had an acute appreciation of how critical underwriting is to avoiding banking crises. They observed first hand that the S&L debacle was driven by an epidemic of accounting control fraud.

Bill Clinton announced his candidacy for the Democratic Party’s nomination for President on October 2, 1991 – while the Senate Ethics committee was still wrapping up its investigation of the Keating Five. The S&L debacle was the defining scandal of the Clinton’s era and it was fresh in their minds as they made the run for the nomination and the presidency. We were convicting several hundred banksters and their cronies annually as Clinton prepared to run and actually ran his first campaign for the nomination and the presidency.

The same logic applies to Greenspan. He had to read our examination report and my report on why Lincoln Savings would be a disaster. My report emphasized the key role of its deliberately pathetic underwriting. Similarly, our presentation to the Keating Five emphasized the non-existent nature of Lincoln Savings’ underwriting on multi-million dollar loans. This was reprised in our testimony before the House and the Senate about Keating’s looting of Lincoln Savings.

But we know what the Clintons, their appointees, and Greenspan (originally a Bush I appointee) learned from the S&L debacle – nothing, or worse than nothing. Greenspan told the sycophantic author of Maestro that he would have done, said, and wrote the same things for Keating now that he did then based on the “facts.” I discuss later Greenspan’s actual approach to the “facts.”

Clinton’s Goal: Destroy the “Culture of Regulation”

But the Clintons and their bankster allies learned something far worse – the need to push the three “de’s” to ensure that never again would banksters and their political cronies be prevented from looting “their” banks or be held accountable for their looting. Bill Clinton, in his first major meeting with financial regulators (from the Office of the Comptroller of the Currency (OCC)) as President, chose to make these revealing remarks. One part of government most upset Clinton – the examiners who checked for threats to the safety and soundness of banks and businesses.

“The federal government to many people is not the President of the United States, it’s the person who shows up on the doorstep to check out the bank records, or the safety in the factory, or the integrity of the workplace, or how the nursing home is being run. I believe that we have a serious obligation in this administration to work with the Congress to reduce the burden of regulation and to increase the protection to the public. And we have an obligation on our own to do what we can to change the destructive elements of the culture of regulation that has built up over time….”

The federal examiners that expose the banks, workplaces, and nursing homes that engage in fraud or abuse provide a vital and unique service not only to the public, but also to honest competitors by blocking the “Gresham’s” dynamic that “control fraud” produces (bad ethics drives good ethics out of the markets). Clinton, however, is unaware of this dynamic. This type of regulation does not (net) “burden” honest businesses – it makes it possible for them compete by relieving them of the impossible burden of competing with control frauds. Clinton sees regulation not as episodically failing, but as the inherently flawed product of a “destructive” “culture of regulation.”  He started the process that replaced a “culture of regulation” with what even the anti-regulators now concede is the “culture of corruption” that dominates Wall Street and the City of London.

Clinton then singled out the worst examiners – bank regulators.

“When I was out in New Hampshire in 1992, I heard more grief about the regulation of the private sector by the Comptroller of the Currency than any other single thing. And now every time I go to New England, they say, we’re making money, we’re making loans, and we can function, because we finally got somebody down there in Washington who understands how to have responsible and safe banking regulations, and still promote economic growth. I hear it every time I go up there, and I thank you, sir, for what you’ve done on that. (Applause.)”

Vice-President Gore had already praised the OCC head, Gene Ludwig, for embracing the three “de’s.” Gore was particularly impressed that the bankers’ lobbyists were praising Ludwig. Readers will vary on what they infer from that praise, but Gore thought the only possible inference was that Ludwig’s deregulatory policies were superb.  When the bank lobbyists are praising you as a financial regulator you know you are on a path to disaster for the industry and the public. Bank lobbyists do not represent the interests of “banks” or their shareholders. They represent the interests of the banks’ controlling officers and when those CEOs create a culture of corruption the lobbyists will push policies that will make it easy for the CEOs’ to loot “their” banks with impunity through the “sure thing” of accounting control fraud.

Clinton launched an unholy war against effective financial regulation. He began the process, and bragged about, the massive cuts in the FDIC staff that eventually (Bush made it worse) led to the FDIC losing over three-quarters of its total staff and the OTS over half of its staff. FBI agents were reassigned from prosecuting the S&L frauds and such prosecutions largely ended in 1993. Clinton’s “reinventers” ordered us to refer to the industry as our “customer” and to treat them as if they were our “customer.”  Clinton’s reinventers eliminated the most important rule – the underwriting rule. They replaced it with a deliberately unenforceable “guideline” that was exceptionally criminogenic and would greatly intensify the epidemic of liar’s loans. This rule change was actually far more damaging than the more infamous statutory acts of deregulation that Bill Clinton, Rubin, and Greenspan pushed in order to essentially repeal the Glass-Steagall Act and pass the Commodities Futures Modernization Act of 2000 to not only kill Brooksley Born’s effort to protect the Nation and the world from financial derivatives, but ensure that no regulator in America would have any ability to regulate effectively massive classes of derivatives.

Clinton’s key economic appointees, and Gore, were fervent proponents of the three “de’s.” They came from banking and represented the interests not of banks, but of the banksters. Robert Rubin, the former head of Goldman Sachs and Clinton’s Treasury Secretary exemplified the bankster representing the interests of his peers. In particular, they pushed the global regulatory “race to the bottom” – warning that any effective financial regulation would drive the bankers to relocate to the City of London.

While anyone open to reality would have learned the grave dangers of the three “de’s” and the enormous value of effective regulation, there were three excellent reasons for the Clinton/Gore administration to be closed to reality and to embrace the three “de’s” and the banksters. First, it is not pleasant to be the subject of a government investigation and a conservatorship for your friend, business partner, and legal client’s S&L. It is perfectly human to react by being enraged at regulators. It was effective banking examiners who stopped McDougall’s frauds, conducted the bulk of the investigations that led to McDougall being convicted, and led to the exposure of the “Whitewater” “scandal.” From the Clintons’ perspective, that represented “Strike One, Strike Two, Strike Three – You’re Out!”

Second, the Clintons and Gore were leaders of the Democratic Leadership Council (DLC). The DLC’s creed was that the three “de’s” were divinely inspired. It was revealing that Clinton chose Gore as his running mate. Gore provided neither geographic nor ideological diversity to the ticket. Clinton did not want ideological diversity. He wanted a loyal junior partner who shared his disdain for regulators. It would require unusual independence of thought for Clinton and Gore, in their moment of electoral triumph, to say: “we’ve been observing the S&L debacle and thinking hard about its implications for our anti-regulatory policies and we have been forced to conclude that the DLC dogmas we have long championed about the virtues of the three ‘de’s’ are not simply incorrect but dangerous to the Nation.” Humans are more likely to do what Clinton and Gore did – religiously ignore the lessons of the S&L debacle and surround themselves with zealous advocates of the three “de’s.”

Third, the DLC had a special place in its heart for big finance. Big finance had the big money to make contributions, but it also had CEOs who were often at least moderate on social issues. These big contributors had been there in the DLC’s corner since its founding in 1985. How likely was it that Clinton and Gore, its two greatest DLC beneficiaries, would turn on big finance in their moment of triumph?

Hillary Clinton Learned the Same Perverse Lessons as Bill about Financial Regulation

I thank Samantha Lachman for her April 9, 2015 column entitled “As Clinton Tries To Win Over Progressives, She Might Want To Distance Herself From This Economic Adviser.” I hope that my column will not seem too harsh, but I feel the need to point out the key ways in which my analysis differs from Lachman’s – each of which adds to her thesis.

Lachman’s column explains that Hillary Clinton chose Robert Hormats as one of her most prominent economic advisors. Lachman points out that Hormats is a rabid deficit (and war) hawk, wants to cut the safety net, supports the faux “free trade” agreements that the Rubin-wing of the Democratic Party constantly seeks to inflict on the Nation, and favors aggressive deregulation. Lachman warns that this will cause progressives to wonder whether they should support Hillary Clinton. Lachman’s sole substantive argument against Hormats’ support for deregulation is that if she were to adopt his policy recommendations it would inhibit efforts were H. Clinton to be elected to reduce inequality.

“Hormats, who was the undersecretary for economic, energy and environmental affairs from 2009 to 2013, has advocated for the deregulatory approach that was begun by the Reagan administration and continued by former President Bill Clinton. Progressives say this deregulatory strategy contributed to widening income inequality….”

Lachman is correct about the content of Hormats’ policy positions. But here are the key factors I would urge readers (and potential campaign supporters and voters) to consider that arise from these positions.

  1. The problem with Hormats is not that he will upset “progressives.” The problem is that he is incompetent, dishonest, and supports policies that have devastated and will continue to devastate our Nation and the people of the world. Hormats has been wrong on every important economic issue – for decades. That should upset everyone regardless of their politics.

The insoluble problem is that every time Hormats’ policies cause a disaster and his dogmas are falsified he doubles-down on his failures. He does so because he is so dogmatic and intellectually dishonest that he refuses to learn from even his most catastrophic mistakes – and because his policy disasters enrich him and his peers – the elite banksters.

The enormous problem with Hormats’ policies is not that his policies “contributed to widening income inequality” (though they did) – but that they blew up the financial system, our Nation’s economy, and the global economy. In the U.S. 9.3 million Americans lost their jobs and roughly six million jobs that would have been created absent the Great Recession were not created. The leading economic estimate is that the U.S. will lose $24 trillion in GDP as a result. The job and GDP losses are far larger in Europe due to the insanity of self-inflicted austerity. If Hormats had been able to secure his desire to inflict austerity on America our job and GDP losses would have at least doubled.

Worse, Hormats’ policies blew up the financial system because they made it so “criminogenic” that it produced the three great fraud epidemics by bankers (appraisal, “liar’s” loans, and secondary market fraud) that hyper-inflated the bubble and caused the catastrophic fraud losses that drove the financial crisis.

Worse still, while he had a front row seat to these frauds epidemics as Goldman Sach’s Vice Chairman, he not only failed to warn the Nation about them but encouraged ever more criminogenic heapings of the three “de’s” – deregulation, desupervision, and de facto decriminalization.

And, still worse, Hormats continues to push for those same policies because while they were a catastrophic failure for our Nation and the world, they make him and his peers (many of them criminals) immensely wealthy – and will do so in the future when his policies again crush our Nation in an orgy of fraud by the banksters. Hormats doubtless supports (formal) legal civil rights (as opposed to the reality), which makes him a member in good standing of the Rubin-wing of the Democratic Party, but his economic policies are to the right of the UK Tories’ policies that Paul Krugman correctly eviscerates for their economic illiteracy.

I will discuss only two examples of Hormats’ incompetence as an economist, neither of which Lachman explores. First, he championed and aided the “Scandalous Seven.”

  1. Hormats’ continuing support for the three “de’s” and his support for President Clinton’s reappointment of Alan Greenspan and President Obama’s reappointment of Ben Bernanke to head the Fed. There are seven U.S. public officials who embraced the three “de’s” and are most culpable for creating and refusing to stop the criminogenic environment that produced the three most destructive epidemics of financial fraud in history. Those fraud epidemics hyper-inflated the bubbles, drove the financial crisis, and caused the Great Recession.  Clinton, Gore, Rubin (with a dishonorable mention to his protégé Larry Summers), Greenspan, President George W. Bush, Bernanke, and Timothy Geithner are the U.S. officials who failed so spectacularly in the run-up to the crisis that they deserve their inclusion on my list of the Scandalous Seven. I am talking here about the public sector. The elite bankers who led the fraud schemes are even more culpable for they were made wealthy by their fraud schemes.  

The terrible thing about the seven officials is that none of them had to be bribed in any overt fashion that could ever lead to even an investigation much less a prosecution. (The finance industry, of course, finds ways to richly reward its political cronies.) The Scandalous Seven felt wonderful about their actions in creating and then ignoring the criminogenic environment. Like Hormats, their embrace of the three “de’s” was open, not furtive. Three of the officials were Republicans and four were from the Rubin-wing of the Democratic Party. Geithner is a special case who became a nominal Rubin-Democrat to get his position as Treasury Secretary in the Obama administration.

Lachman’s discussion of the Hormats’ support for Greenspan and deregulation emphasizes that Greenspan “is loathed by progressives.”

“Similarly, in a discussion of whether former Federal Reserve Chairman Alan Greenspan should be reappointed by then-President George W. Bush, Hormats said Greenspan, who is loathed by progressives, had done ‘a terrific job.’

‘He enjoys respect on both Main Street and Wall Street,’ Hormats said. ‘In short, he’s really been one of the great financial leaders in American history.’

In the same conversation, Hormats argued that while Greenspan had facilitated a positive economic climate, other factors, including deregulation, were also responsible for private sector growth.

‘[Greenspan] has power, but what’s really driving this economy is the dramatic change that’s taking place in the private sector in this country,’ he continued. ‘We’ve had government deregulation, which has held.’”

A technical note, Lachman is quoting from an NPR transcript and the audio is no longer available on the web site. I suspect that the last word, “held,” should read “helped.”  Lachman does not explain why “progressives” loath Greenspan – or why such loathing should be limited to “progressives.” If “progressives” loath Greenspan for bad reasons then this represents a defect on their part, not a failure by Greenspan or Hormats. In the same interview Lachman is quoting, Robert Reich issued a vibrant endorsement of Greenspan’s reappointment by Clinton that included one of the funniest (unintentional) descriptions of Greenspan: “Alan Greenspan is a pragmatist, an empiricist.” When it came to regulation to stop the fraud epidemics, I show below that Greenspan was still Ayn Rand’s faithful cultist. He was dogmatic and rather than an “empiricist” he religiously refused to allow real data to be presented.

Here are the primary reasons Greenspan (and Bernanke) make my list of the Scandalous Seven.

  • The Fed had the unique authority under HOEPA (enacted in 1994 under Clinton) to ban all “liar’s” loans – regardless of whether they were originated by federally insured lenders. As the name implies, such loans were known to be pervasively fraudulent and it was known that lenders and loan brokers overwhelmingly put the lies in liar’s loans. Greenspan, and then Bernanke, refused to use this authority to stop an obvious, massive epidemic of “accounting control fraud. The FBI’s senior agent in charge of dealing with mortgage fraud, Chris Swecker, warned in September 2004 that there was an “epidemic” of mortgage fraud developing and predicted that it would cause a financial “crisis” – and Greenspan refused to stop the fraud epidemic. Greenspan’s colleague, Governor Gramlich, warned Greenspan of the developing epidemic of bad loans and urged him to send the Fed examiners in to the sleazy bank holding company affiliates that were pumping out hundreds of thousands of fraudulent loans. Greenspan refused not only to stop the fraudulent loans – he refused to send the examiners in to find the facts. When Richard Spillenkothen, the Fed’s top supervisor, requested to brief the full Fed board on the fact that every major bank involved with Enron had eagerly aided and abetted Enron’s accounting fraud and tax evasion the senior leadership of the Fed was enraged – at its supervisors! While Spillenkothen does not name individual names, this could not have occurred without Greenspan’s active support.

When another Fed supervisor, Sabeth Siddique, several years later presented the Fed board and Regional Bank Presidents with data from the Nation’s largest banks showing that they were moving massively into making loans that were known to be pervasively fraudulent and exceptionally likely to default the Fed split into a civil war in which the supervisor was subjected to “personal” attacks – for providing data from the banks to the Fed!

“Some people on the board and regional presidents . . . just wanted to come to a different answer. So they did ignore it, or the full thrust of it,” [Federal Reserve Governor Bies] told the Commission.

Within the Fed, the debate grew heated and emotional, Siddique recalled. “It got very personal,” he told the Commission. The ideological turf war lasted more than a year, while the number of nontraditional loans kept growing….” (FCIC 2011: 20-21).

This is significantly insane. The Fed leadership, under Greenspan and Bernanke, was so dogmatic and passionate in its hatred for regulation, supervision, enforcement, and prosecution and so rabid in its faith in “markets” and the inherent sainthood of financial CEOs that it conducted an unholy war against its own supervisors and reality.  Simply providing data from the industry to the leaders of your agency became a CLG for Fed supervisors (“career limiting gesture”).

It is important to recall four other matters in this context. We (OTS-West Region) figured out liar’s loans in 1991 – and drove them out of the S&L industry, which was the limits of our statutory powers (unlike the Fed after the passage of HOEPA in 1994). We got it right because unlike Greenspan and Bernanke we were reality-based regulators eager to get the facts. So we listened to our examiners (as we had in 1984 about prior epidemics of accounting control fraud). The loans were not yet called “liar’s” loans by the industry and there was very limited experience with “low documentation” loans but our examiners realized that failing to underwrite the borrower’s income had to lead to “adverse selection” and produce severe losses. We realized that only fraudulent CEOs running accounting control frauds would make liar’s loans.  Greenspan and Bernanke had no need to reinvent the supervisory wheel and the disastrous loss data on the 1990-1993 experience with liar’s loans was available to them.  Banning liar’s loans was one of the easiest calls any regulatory could make. There was zero upside to liar’s loans – they harmed every honest borrower.

The second fact is that Greenspan was no virgin when it came to accounting control fraud. As I explained above, Charles Keating, the most notorious S&L fraud, used him as a lobbyist to recruit the five U.S. Senators who became known as the “Keating Five” when they met with us on April 9, 1987.

The third fact is that in addition to the FBI’s 2004 warning that the developing mortgage fraud “epidemic” would cause a financial “crisis” if it were not stopped the appraisers had created an extraordinary warning in the form of a public petition explaining that fraudulent lenders were deliberately creating a “Gresham’s” dynamic (in which bad ethics drives good ethics from the markets and professions) by extorting appraisers’ to inflate the value of homes pledged as collateral – something only a fraudulent bank or loan broker officer would do. The following astonishing fact is revealed (but also buried) well into the report of the Financial Crisis Inquiry Commission (FCIC): “Swecker, the former FBI official, told the Commission he had no contact with banking regulators during his tenure” (FCIC 2011: 164, emphasis added). As a former financial regulator I am almost reduced to tears every time I read that sentence.

  1. Put yourself in the position of Greenspan, Bernanke, Geithner, and Bush – all in office when Swecker made his very public warnings in the media and his Congressional testimony in 2004. There is no possible excuse for their total refusal to act against a crime wave led by elite banksters. Worse, their obscene attacks on supervisors to prevent them from presenting these senior officials with the reality of the three raging fraud epidemics demonstrates that they were not simply cowards unwilling to stop a wave of crime by their powerful cronies. These four officials’ war on the facts was so intense because they knew that if they ever let reality intrude it would falsify their ideological dogmas and render disgraceful their slavish lifetime devotion to the banksters.

The fourth fact is that within months of Bernanke’s ascendancy to running the Fed he knew from the MARI/MBA report that the available data showed that 90% of liar’s loans were fraudulent. He refused to use HOEPA to ban liar’s loans.

  1. Greenspan also makes the list for his dogmatic position expressed to CFTC Chair Brooksley Born that preventing fraud was never a legitimate basis for regulation.
  1. The real problem is the Clintons.

First, H. Clinton chose Hormats – in 2009 – to be her key economic adviser at State at a time when, for the reasons I just explained, it was inescapable that he three “de’s” (championed by Hormats) had produced the three most damaging financial fraud epidemics in world history, destroyed the global financial system (it was resurrected only by massive public bailouts by the Treasury and the Fed), and caused the Great Recession.

Hormats was still pushing the three “de’s” under H. Clinton. She knew this before she recruited him to be one of her top lieutenants at State. Hormats proceeded to continue to shill for the three “de’s” at State – with no known reprimands from H. Clinton. As I have often noted, economics has the very useful concept of “revealed preferences.” Lachman’s focus is on Hormats’ revealed preferences, but the key is that we are observing H. Clinton’s true preference. She picked a known, serial incompetent who was a disaster in his supposed area of expertise (finance) and so dogmatic, intellectually dishonest, and dedicated to the interests of his fellow 1% that he continues to double-down on his failures. Lachman warns H. Clinton that to curry favor with progressives “She Might Want To Distance Herself From This Economic Adviser.” But that is not what any progressive should want. Progressives (and everyone else) should be demanding that she repudiate, not merely “distance herself from” Hormats’ dogmas. It does nothing good for the world if H. Clinton is able to deceive people by making it appear that she has ditched disastrous deregulatory dogmas by keeping Hormats at a “distance” while she actually maintains those same dogmas.

What H. Clinton should be doing, in alliance with Senator Warren, is leading the charge demanding that the Obama Administration honor the whistleblowers who made public the massive frauds by Citi, JPM, and Bank of America’s senior managers and prosecute the banksters. That would be great substantively for America and smart politics. The Clintons have been conspicuously silent about the banksters and the fraud epidemics they led that drove our crises. She could fix that in 15 minutes – if she wished to.

Second, as I explained above, the Clinton administration enthusiastically embraced the three “de’s” through the “Reinventing Government” movement. Al Gore led the charge. I have written about this extensively. Reinventing government was expressly designed not to prosecute elite corporate criminals. Yes, the Bush administration that followed was even worse, but it was Clinton who began what Tom Frank aptly terms The Wrecking Crew. I got out as a regulator when the “Reinventers” ordered us to refer to the industry we were supposed to regulate as our “customer” – and to treat banks and bankers as if they were “customers.” I personally witnessed this directive, and the administration’s chief goon in charge of its oxymoronic “Reinvention” proudly cites that directive as one of his top accomplishments and prints praise of his supposed bravery in insisting on that directive.

Hormats was not a powerful adviser to the Clinton administration. Bob Rubin, Goldman Sachs’ CEO, was the paramount adviser on economic matters. Hormats is simply one of dozens of Rubinites that infested the Clinton and Obama administrations. But blaming the three “de’s” on Rubin is unfair, for B. Clinton and Gore were sincerely and zealously committed to deregulation, desupervision, and the de facto decriminalization of elite white-collar crime. Neither was seduced by Rubin. H. Clinton knows as much as any person alive about the Rubinites’ pathologies. She recruited Hormats because he was a Rubinite, not because he deceived her.

At one point, all six of Obama’s most senior economic advisers where Rubinites. (They are still overwhelmingly Rubinites.) Obama and H. Clinton have chosen Rubinites as their dominant economic advisers not through some sinister, secret infiltration engineered by Rubin, but because Obama and the Clinton represent the Rubin-wing of the Democratic Party.

Third, H. Clinton chose Hormats as a top adviser not because of his “expertise” – she knows he has been consistently, horrifically wrong about every important economic policy issue on which he has opined in the last 20 years – but as a signal to the donors, the elite bankers. The signal is that I have always been with you and will always be with you, regardless of the bleating of the Democratic-wing of the Democratic Party.

I have explained Hormats’ incompetence when it came to regulation. I will add briefly related displays of incompetence in what he purports to be his fields of expertise.  First, he wants to cut the already inadequate safety net for the purpose of reducing budget deficits. Consider his testimony before the House Budget Committee on June 26, 2007. The setting was a friendly one. The Democrats controlling the Committee held a hearing to embarrass the Bush administration. The Democratic meme was that unlike virtuous Clinton, Bush had taken us deep into deficit – and much of our national debt was owed to the Chinese (cue dramatic, pulsating minor key music foreshadowing disaster). I know that many “progressives” would think that such a hearing was fantastic – good politics plus hoisting the Republican’s fiscal conservatives on their own petard.

I’ll simply refer readers to my colleagues’ explanations of why the “Red Peril” fearmongering is nonsense. It is terrible economics and Democrats shouldn’t try to score political points by spreading economic lies – even if the Democrats are right that the Republicans do so routinely.

I think that the hearing and Hormats’ testimony demonstrated the idiocy and dishonesty of many Democrats. Recall the date of the hearing – the U.S. was racing into the Great Recession. It officially began in the Fourth Quarter of 2007. By the time Hormats testified roughly five nonprime lenders were failing every week and housing prices had been falling for over a year in many markets. The U.S. needed to be running far larger federal budget deficits to begin to counter the coming recession. Instead, we had Hormats testifying that July 26, 2007 would be a great time for the U.S. to simultaneously “boost savings at home,” cut safety net payments (Social Security, Medicare, and Medicaid), and return the federal budget to surplus. Each of these actions would have further reduced already inadequate demand and caused the Great Recession to come sooner, be deeper, and last far longer – because that is what austerity does when you add it to a recession.

Hormats:  Not Cutting Grandmother’s Social Security Will Get Her Nuked

Hormats was just getting started with his plan to ruin America. He claimed that we had to adopt these three self-destructive policies that would hurl us into an earlier, deeper, and longer recession (and therefore increase the budget deficit) to protect ourselves from a terrorist WMD attack.

“Because we know that one of the stated objectives of terrorists is to cause massive disruption in the U.S. economy, such financial vulnerabilities could lead potential perpetrators to feel that they can do a great deal of damage not simply by their initial act, but also because of the secondary and tertiary economic disruptions that would occur because of the subsequent turmoil in a more vulnerable financial environment. In finances as in military affairs, vulnerability frequently invites aggression.”

Hormats’ position was refuted by an earlier speaker that looked a whole lot like Hormats who only about 30 seconds earlier testified that “It is worth recalling that the country had recorded four years of budget surplus before 9/11….” Indeed, it would have been “worth recalling” by Hormats who only 30 seconds later claimed that we could greatly reduce the risk of terrorist attacks if we ran budget surpluses. Hormats displayed at this hearing that he is not simply incompetent, he is a shill willing to say anything, no matter how loony, to please the Democratic politicians who might again make the mistake of appointing him to office.

In the same testimony, Hormats also indicated that he is a “finance expert” who is clueless about the actual financial system of a nation with a sovereign currency, i.e., the U.S.

“Alexander Hamilton recognized from the very beginning that America’s financial strength was vital to its security. If the country did not manage its finances well, he reasoned, it would not have the resources needed to defend itself in time of war and it would lose credibility in the eyes of creditors, making borrowing in time of war or other national emergency all the more difficult.

Over two centuries have passed since Hamilton held office, but these principles are just as relevant today.”

Well, no, not even close. On a more technical detail, his “Red Peril” scenarios assume that the U.S. can only fund itself through issuing bonds. My colleagues have explained in loving detail in NEP why Hormats’ claims demonstrate that he does not understand even the most basic aspects of how money actually works. I do not demand that Hormats agree with MMT, but he does have to understand the actual operations by which money can be created to be minimally competent in his field. As I explained, one does not make a Rubinite an adviser because one is seeking competence.

April 20, 2015 Posted by | Corruption, Timeless or most popular | , , , , , , , , , , | 1 Comment

JOY OH JOY, HILLARY IS RUNNING

391337_Hillary-Clinton

By John Chuckman | Aletho News | April 13, 2015

Yes, there is still bias “out there,” as some have written, about an American woman running for President, but I do not believe the bias is decisive: after all, America has broken what surely was its fiercest taboo with the election of a black man, twice. There is, however, another bias “out there,” and a decisive one: a bias against the Clintons, a ghastly pair in almost every respect, America’s contemporary version of the Borgias – both of them grasping, vicious, ruthless, two-faced, and lacking only the Borgias’ good taste in art and literature.

Among the distinguished achievements of Hillary’s husband are the bombing of Serbia’s capital, including the offices of journalists, and the bombing of a pharmaceutical plant in Sudan claimed to be a chemical weapons plant. President Clinton bragged of “ending welfare in our time,” quite the claim for a self-styled liberal. It was his blundering, belligerent FBI and ATF that committed the atrocities at Waco. He embarrassed everyone with his grotesque personal behavior, and he pardoned some ghastly criminals in return for huge contributions to his “foundation.” He is good friends with people like Jeffrey Epstein, a registered sex offender who solicited and kept underage girls to “service” guests on his private island or on the “Lolita Express,” nick-name for his private jet – both jet and island having Clinton recorded as a guest.

Bill Clinton failed every major undertaking of worth, including healthcare reform, Hillary playing a large role in that failure. Sometimes forgotten, he also frequently played the public coward, not standing behind appointments he made when they were attacked viciously in the Senate, allowing honorable people to be pilloried, then finally withdrawing their nominations. Perhaps his greatest act of cowardice involved the genocidal horrors of Rwanda. He was aware of them quite early, but his government was instructed not to use inflammatory language in public, and he made virtually no effort to save a million lives.

His contemptible behavior should, in theory, have nothing to do with Hillary, but in fact it very much does. They were the ones going around talking up the idea of getting “two for one” during his term of office. She still treats him as a confidant and advisor, having been photographed a number of times engaged in serious tête-à-têtes, and he has had several sessions with Obama, and big money sources, concerning Hillary’s ambitions.

Both Clintons have long records of chasing, indeed grovelling in much the same fashion as the smarmy Tony Blair, after big money – money for the foundation, money for elections, she having set an unenviable record for cancerous spending when running for the Senate in New York, and they have both been involved in at least as many questionable deals on the side as several former Israeli Prime Ministers combined.

I wish a woman could run for President, but must the candidate be someone who resembles Richard Nixon in drag and shares views the late ogre, J. Edgar Hoover? Everyone who doubts what a colossally unpleasant character Hillary has in private should read the memoirs of former secret service agents. Her behavior was appalling, tasking agents with things like holding her purse in public, and shouting a stream of “f–k off” invective at them if they declined.

She has always voted for war in the Senate, including the horrible war crime of invading Iraq. She goes around making speeches – at $300,000 a pop plus a whole printed list of demanded perquisites – about America’s need for a strong defense. Strong defense? America? How does one manage to spend more than America already spends on death and destruction? Park a nuclear-loaded B-52 at every civilian airport? Supply every Boy Scout troop with heavy machine guns and plenty of ammo? The woman borders on deranged here.

She has lied countless times in office and while running for office. The bloody mess at Benghazi was her baby, and she has done nothing but lie about its embarrassing and deadly failure. The last time she ran for President, in order to bolster her image for toughness, she bragged of coming under gunfire when she landed on a visit to Bosnia as First Lady, but a news video promptly appeared which showed nothing but a sweet little girl presenting flowers to her at the airport. Of course, she had to lie again when the video turned up, saying she hadn’t remembered events clearly, but no one ever forgets coming under gun fire. It is not possible unless your faculties are in such a jumbled state you should be disqualified from office.

Of course, in the end, Hillary’s mass of deceptions and terrible associations and rotten personality really do not matter because America’s real government, its ongoing unelected one, allows no President to depart much from the established script. The last one who made a serious try had half his head blasted into the streets of Dallas.

Anticipation and excitement about the first woman candidate reminds me of America’s electing and celebrating its first black – a seemingly charming and intelligent man at the time – and he has proved just another George Bush, giving ordinary Americans nothing, and especially his own people. He weekly approves extrajudicial killings in a half dozen places, behavior completely in keeping with former South American juntas who made thousands of people just disappear, and he happily does business with tyrants and absolute monarchs and madmen like Netanyahu. Hillary would do precisely the same.

In the end, the person America elects as President makes no appreciable difference to what America does in the world or how its wealthy rulers treat their own people, a presidential election being little more than the most costly theater performance in the world, “a tale / Told by an idiot, full of sound and fury, / Signifying nothing.”

April 13, 2015 Posted by | Progressive Hypocrite, War Crimes | , , | 3 Comments

Hillary Clinton: Playing a Dog-Eared “Hitler” Card

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By Norman Solomon | War is a Crime | March 7, 2014

The frontrunner to become the next president of the United States is playing an old and dangerous political game — comparing a foreign leader to Adolf Hitler.

At a private charity event on Tuesday, in comments preserved on audio, Hillary Clinton talked about actions by Russia’s President Vladimir Putin in the Crimea. “Now if this sounds familiar, it’s what Hitler did back in the ’30s,” she said.

The next day, Clinton gave the inflammatory story more oxygen when speaking at UCLA. She “largely stood by the remarks,” the Washington Post reported. Clinton “said she was merely noting parallels between Putin’s claim that he was protecting Russian-speaking minorities in Crimea and Hitler’s moves into Poland, Czechoslovakia and other parts of Europe to protect German minorities.”

Clinton denied that she was comparing Putin with Hitler even while she persisted in comparing Putin with Hitler. “I just want people to have a little historic perspective,” she said. “I’m not making a comparison certainly, but I am recommending that we perhaps can learn from this tactic that has been used before.”

Yes indeed. Let’s learn from this tactic that has been used before — the tactic of comparing overseas adversaries to Hitler. Such comparisons by U.S. political leaders have a long history of fueling momentum for war.

“Surrender in Vietnam” would not bring peace, President Lyndon Johnson said at a news conference on July 28, 1965 as he tried to justify escalating the war, “because we learned from Hitler at Munich that success only feeds the appetite of aggression.”

After Ho Chi Minh was gone, the Hitler analogy went to other leaders of countries in U.S. crosshairs. The tag was also useful when attached to governments facing U.S.-backed armies.

Three decades ago, while Washington funded the contra forces in Nicaragua, absurd efforts to smear the elected left-wing Sandinistas knew no rhetorical bounds. Secretary of State George Shultz said on February 15, 1984, at a speech in Boston: “I’ve had good friends who experienced Germany in the 1930s go there and come back and say, ‘I’ve visited many communist countries, but Nicaragua doesn’t feel like that. It feels like Nazi Germany.’”

Washington embraced Panama’s Gen. Manuel Noriega as an ally, and for a while he was a CIA collaborator. But there was a falling out, and tension spiked in the summer of 1989. Deputy Secretary of State Lawrence Eagleburger said that drug trafficking by Noriega “is aggression as surely as Adolf Hitler’s invasion of Poland 50 years ago was aggression.” A U.S. invasion overthrew Noriega in December 1989.

In early August 1990, the sudden Iraqi invasion of Kuwait abruptly ended cordial relations between Washington and Baghdad. The two governments had a history of close cooperation during the 1980s. But President George H. W. Bush proclaimed that Saddam Hussein was “a little Hitler.” In January 1991, the U.S. government launched the Gulf War.

Near the end of the decade, Hillary Clinton got a close look at how useful it can be to conflate a foreign leader with Hitler, as President Bill Clinton and top aides repeatedly drew the parallel against Serbia’s president, Slobodan Milosevic. In late March 1999, the day before the bombing of Kosovo and Serbia began, President Clinton said in a speech: “And so I want to talk to you about Kosovo today but just remember this — it’s about our values. What if someone had listened to Winston Churchill and stood up to Adolf Hitler earlier?”

As the U.S.-led NATO bombing intensified, so did efforts to justify it with references to Hitler. “Clinton and his senior advisers harked repeatedly back to images of World War II and Nazism to give moral weight to the bombing,” the Washington Post reported. Vice President Al Gore chimed in for the war chorus, calling Milosevic “one of these junior-league Hitler types.”

Just a few years later, the George W. Bush administration cranked up a revival of Saddam-Hitler comparisons. They became commonplace.

Five months before the invasion of Iraq, it was nothing extraordinary when a leading congressional Democrat pulled out all the stops. “Had Hitler’s regime been taken out in a timely fashion,” said Rep. Tom Lantos, “the 51 million innocent people who lost their lives during the Second World War would have been able to finish their normal life cycles. Mr. Chairman, if we appease Saddam Hussein, we will stand humiliated before both humanity and history.”

From the Vietnam War to the Iraq War, facile and wildly inaccurate comparisons between foreign adversaries and Adolf Hitler have served the interests of politicians hell-bent on propelling the United States into war. Often, those politicians succeeded. The carnage and the endless suffering have been vast.

Now, Hillary Clinton is ratcheting up her own Hitler analogies. She knows as well as anyone the power they can generate for demonizing a targeted leader.

With the largest nuclear arsenals on the planet, the United States and Russia have the entire world on a horrific knife’s edge. Nuclear saber-rattling is implicit in what the prospective President Hillary Clinton has done in recent days, going out of her way to tar Russia’s president with a Hitler brush. Her eagerness to heighten tensions with Russia indicates that she is willing to risk war — and even nuclear holocaust — for the benefit of her political ambitions.

March 7, 2014 Posted by | Mainstream Media, Warmongering, Timeless or most popular | , , , , | 5 Comments

Misread Telexes Led Analysts to See Iran Nuclear Arms Programme

By Gareth Porter | IPS | February 5, 2014

When Western intelligence agencies began in the early 1990s to intercept telexes from an Iranian university to foreign high technology firms, intelligence analysts believed they saw the first signs of military involvement in Iran’s nuclear programme. That suspicion led to U.S. intelligence assessments over the next decade that Iran was secretly pursuing nuclear weapons.

The supposed evidence of military efforts to procure uranium enrichment equipment shown in the telexes was also the main premise of the International Atomic Energy Agency’s investigation of Iran’s nuclear programme from 2003 through 2007.

But the interpretation of the intercepted telexes on which later assessments were based turned out to have been a fundamental error. The analysts, eager to find evidence of an Iranian nuclear weapons programme, had wrongly assumed that the combination of interest in technologies that could be used in a nuclear programme and the apparent role of a military-related institution meant that the military was behind the procurement requests.

In 2007-08, Iran provided hard evidence that the technologies had actually been sought by university teachers and researchers.

The intercepted telexes that set in train the series of U.S. intelligence assessments that Iran was working on nuclear weapons were sent from Sharif University of Technology in Tehran beginning in late 1990 and continued through 1992. The dates of the telexes, their specific procurement requests and the telex number of PHRC were all revealed in a February 2012 paper by David Albright, the executive director of the Institute for Science and International Security, and two co-authors.

The telexes that interested intelligence agencies following them all pertained to dual-use technologies, meaning that they were consistent with work on uranium conversion and enrichment but could also be used for non-nuclear applications.

But what raised acute suspicions on the part of intelligence analysts was the fact that those procurement requests bore the telex number of the Physics Research Center (PHRC), which was known to have contracts with the Iranian military.

U.S., British, German and Israeli foreign intelligence agencies were sharing raw intelligence on Iranian efforts to procure technology for its nuclear programme, according to published sources. The telexes included requests for “high-vacuum” equipment, “ring” magnets, a balancing machine and cylinders of fluorine gas, all of which were viewed as useful for a programme of uranium conversion and enrichment.

The Schenck balancing machine ordered in late 1990 or early 1991 provoked interest among proliferation analysts, because it could be used to balance the rotor assembly parts on the P1 centrifuge for uranium enrichment. The “ring” magnets sought by the university were believed to be appropriate for centrifuge production.

The request for 45 cylinders of fluorine gas was considered suspicious, because fluorine is combined with uranium to produce uranium hexafluoride, the form of uranium that is used for enrichment.

The first indirect allusion to evidence from the telexes in the news came in late 1992, when an official of the George H. W. Bush administration told The Washington Post that the administration had pushed for a complete cutoff of all nuclear-related technology to Iran, because of what was called “a suspicious procurement pattern”.

Then the Iranian efforts to obtain those specific technologies from major foreign suppliers were reported, without mentioning the intercepted telexes, in a Public Broadcasting System “Frontline” documentary called “Iran and the Bomb” broadcast in April 1993, which portrayed them as clear indications of an Iranian nuclear weapons programme.

The producer of the documentary, Herbert Krosney, described the Iranian procurement efforts in similar terms in his book “Deadly Business” published the same year.

In 1996, President Bill Clinton’s CIA Director John Deutch declared, “A wide variety of data indicate that Tehran has assigned civilian and military organisations to support the production of fissile material for nuclear weapons.”

For the next decade, the CIA’s non-proliferation specialists continued to rely on their analysis of the telexes to buttress their assessment that Iran was developing nuclear weapons. The top-secret 2001 National Intelligence Estimate bore the title “Iran Nuclear Weapons Program: Multifaceted and Poised to Succeed, but When?”

Former IAEA Deputy Director General for Safeguards Olli Heinonen recalled in a May 2012 article that the IAEA had obtained a “set of procurement information about the PHRC” – an obvious reference to the collection of telexes – which led him to launch an investigation in 2004 of what the IAEA later called the “Procurement activities by the former Head of PHRC”.

But after an August 2007 agreement between Iran and IAEA Director-General Mohamed ElBaradei on a timetable for the resolution of “all remaining issues”, Iran provided full information on all the procurement issues the IAEA had raised.

That information revealed that the former PHRC head, Sayyed Abbas Shahmoradi-Zavareh, who had been a professor at Sharif University at the time, had been asked by several faculty departments to help procure equipment or material for teaching and research.

Iran produced voluminous evidence to support its explanation for each of the procurement efforts the IAEA had questioned. It showed that the high vacuum equipment had been requested by the Physics Department for student experiments in evaporation and vacuum techniques for producing thin coatings by providing instruction manuals on the experiments, internal communications and even the shipping documents on the procurement.

The Physics Department had also requested the magnets for students to carry out “Lenz-Faraday experiments”, according to the evidence provided, including the instruction manuals, the original requests for funding and the invoice for cash sales from the supplier. The balancing machine was for the Mechanical Engineering Department, as was supported by similar documentation turned over to the IAEA. IAEA inspectors had also found that the machine was indeed located at the department.

The 45 cylinders of fluorine that Shahmoradi-Zavareh had tried to procure had been requested by the Office of Industrial Relations for research on the chemical stability of polymeric vessels, as shown by the original request letter and communications between the former PHRC head and the president of the university.

The IAEA report on February 2008 recorded the detailed documentation provided by Iran on each of the issues, none of which was challenged by the IAEA. The report declared the issue “no longer outstanding at this stage”, despite U.S. pressure on ElBaradei to avoid closing that or any other issue in the work programme, as reported in diplomatic cables released by WikiLeaks.

The IAEA report showed that the primary intelligence basis for the U.S. charge of an Iranian nuclear weapons programme for more than a decade had been erroneous.

That dramatic development in the Iran nuclear story went unnoticed in news media reporting on the IAEA report, however. By then the U.S. government, the IAEA and the news media had raised other evidence that was more dramatic – a set of documents supposedly purloined from an Iran laptop computer associated with an alleged covert Iranian nuclear weapons programme from 2001 to 2003. And the November 2007 NIE had concluded that Iran had been running such a programme but had halted it in 2003.

Despite the clear acceptance of the Iranian explanation by the IAEA, David Albright of ISIS has continued to argue that the telexes support suspicions that Iran’s Defence Ministry was involved in the nuclear programme.

In his February 2012 paper, Albright discusses the procurement requests documented in the telexes as though the IAEA investigation had been left without any resolution. Albright makes no reference to the detailed documentation provided by Iran in each case or to the IAEA’s determination that the issue was “no longer outstanding”.

Ten days later, the Washington Post published a news article reflecting Albright’s claim that the telexes proved that the PHRC had been guiding Iran’s secret uranium enrichment programme during the 1990s. The writer was evidently unaware that the February 2008 IAEA report had provided convincing evidence that the intelligence analyst’s interpretations had been fundamentally wrong.

February 6, 2014 Posted by | Deception, Mainstream Media, Warmongering | , , , , , , , | Leave a comment

The Hypocrisy of Human Rights Watch

By Keane Bhatt | NACLA | February 5, 2014

Over more than a decade, the rise of the left in Latin American governance has led to remarkable advances in poverty alleviation, regional integration, and a reassertion of sovereignty and independence. The United States has been antagonistic toward the new left governments, and has concurrently pursued a bellicose foreign policy, in many cases blithely dismissive of international law.

So why has Human Rights Watch (HRW)—despite proclaiming itself “one of the world’s leading independent organizations” on human rights—so consistently paralleled U.S. positions and policies? This affinity for the U.S. government agenda is not limited to Latin America. In the summer of 2013, for example, when the prospect of a unilateral U.S. missile strike on Syria—a clear violation of the UN Charter—loomed large, HRW’s executive director Kenneth Roth speculated as to whether a simply “symbolic” bombing would be sufficient. “If Obama decides to strike Syria, will he settle for symbolism or do something that will help protect civilians?” he asked on Twitter. Executive director of MIT’s Center for International Studies John Tirman swiftly denounced the tweet as “possibly the most ignorant and irresponsible statement ever by a major human-rights advocate.”1

HRW’s accommodation to U.S. policy has also extended to renditions—the illegal practice of kidnapping and transporting suspects around the planet to be interrogated and often tortured in allied countries. In early 2009, when it was reported that the newly elected Obama administration was leaving this program intact, HRW’s then Washington advocacy director Tom Malinowski argued that “under limited circumstances, there is a legitimate place” for renditions, and encouraged patience: “they want to design a system that doesn’t result in people being sent to foreign dungeons to be tortured,” he said, “but designing that system is going to take some time.”2

Similar consideration was not extended to de-facto U.S. enemy Venezuela, when, in 2012, HRW’s Americas director José Miguel Vivanco and global advocacy director Peggy Hicks wrote a letter to President Hugo Chávez arguing that his country was unfit to serve on the UN’s Human Rights Council. Councilmembers must uphold the highest standards in the promotion and protection of human rights, they maintained, but unfortunately, “Venezuela currently falls far short of acceptable standards.”3 Given HRW’s silence regarding U.S. membership in the same council, one wonders precisely what HRW’s acceptable standards are.

One underlying factor for HRW’s general conformity with U.S. policy was clarified on July 8, 2013, when Roth took to Twitter to congratulate his colleague Malinowski on his nomination to be Assistant Secretary of State for Democracy, Human Rights and Labor (DRL). Malinowski was poised to further human rights as a senior-level foreign-policy official for an administration that convenes weekly “Terror Tuesday” meetings. In these meetings, Obama and his staffers deliberate the meting out of extrajudicial drone assassinations around the planet, reportedly working from a secret “kill list” that has included several U.S. citizens and a 17-year-old girl.4

Malinowski’s entry into government was actually a re-entry. Prior to HRW, he had served as a speechwriter for Secretary of State Madeline Albright and for the White House’s National Security Council. He was also once a special assistant to President Bill Clinton—all of which he proudly listed in his HRW biography. During his Senate confirmation hearing on September 24, Malinowski promised to “deepen the bipartisan consensus for America’s defense of liberty around the world,” and assured the Foreign Relations Committee that no matter where the U.S. debate on Syria led, “the mere fact that we are having it marks our nation as exceptional.”5

That very day, Obama stood before the UN General Assembly and declared, “some may disagree, but I believe that America is exceptional.” Assuming that by “exceptional” Obama meant exceptionally benevolent, one of those who disagreed was Brazilian president Dilma Rousseff, who had opened the proceedings at the same podium by excoriating Obama’s “global network of electronic espionage,” which she considered a “disrespect to national sovereignty” and a “grave violation of human rights and of civil liberties.” Rousseff contrasted Washington’s rogue behavior with her characterization of Brazil as a country that has “lived in peace with our neighbors for more than 140 years.” Brazil and its neighbors, she argued, were “democratic, pacific and respectful of international law.”6 Rousseff’s speech crystallized Latin America’s broad opposition to U.S. exceptionalism, and therefore shed light on the left’s mutually antagonistic relationship with HRW.

*

Malinowski’s background is but one example of a larger scenario. HRW’s institutional culture is shaped by its leadership’s intimate links to various arms of the U.S. government. In her HRW biography, the vice chair of HRW’s board of directors, Susan Manilow, describes herself as “a longtime friend to Bill Clinton,” and helped manage his campaign finances. (HRW once signed a letter to Clinton advocating the prosecution of Yugoslav President Slobodan Milosevic for war crimes; HRW made no case for holding Clinton accountable for NATO’s civilian-killing bombings despite concluding that they constituted “violations of international humanitarian law.”)7 Bruce Rabb, also on Human Rights Watch’s Board of Directors, advertises in his biography that he “served as staff assistant to President Richard Nixon” from 1969-70—the period in which that administration secretly and illegally carpet bombed Cambodia and Laos.8

The advisory committee for HRW’s Americas Division has even boasted the presence of a former Central Intelligence Agency official, Miguel Díaz. According to his State Department biography, Díaz served as a CIA analyst and also provided “oversight of U.S. intelligence activities in Latin America” for the House Permanent Select Committee on Intelligence.9 As of 2012, Díaz focused, as he once did for the CIA, on Central America for the State Department’s DRL—the same bureau now to be supervised by Malinowski.

Other HRW associates have similarly questionable backgrounds: Myles Frechette, currently an advisory committee member for the Americas Division, served as Assistant U.S. Trade Representative for Latin America and the Caribbean from 1990-93, and then became U.S. Ambassador to Colombia from 1994-97. Frechette subsequently worked as the executive director of a “nonprofit” group called the North American-Peruvian Business Council, and championed the interests of his funders in front of Congress. His organization received financing from companies such as Newmont Mining, Barrick Gold, Caterpillar, Continental Airlines, J.P. Morgan, ExxonMobil, Patton Boggs, and Texaco.10

Michael Shifter, who also currently serves on HRW’s Americas advisory committee, directed the Latin America and Caribbean program for the National Endowment for Democracy (NED), a quasi-governmental entity whose former acting president Allen Weinstein told The Washington Post in 1991 that “a lot of what we do today was done covertly 25 years ago by the CIA.”11 Shifter, as current president of a policy center called the Inter-American Dialogue, oversees $4 million a year in programming, financed in part through donations from the U.S. Agency for International Development (USAID), the embassies of Canada, Germany, Guatemala, Mexico and Spain, and corporations such as Chevron, ExxonMobil, J.P. Morgan, Microsoft, Coca-Cola, Boeing, and Western Union.

To be sure, not all of the organization’s leadership has been so involved in dubious political activities. Many HRW board members are simply investment bankers, like board co-chairs Joel Motley of Public Capital Advisors, LLC, and Hassan Elmasry, of Independent Franchise Partners, LLP. HRW Vice Chair John Studzinski is a senior managing director at The Blackstone Group, a private equity firm founded by Peter G. Peterson, the billionaire who has passionately sought to eviscerate Social Security and Medicare. And although Julien J. Studley, the Vice Chair of the Americas advisory committee, once served in the U.S. Army’s psychological warfare unit, he is now just another wealthy real-estate tycoon in New York.

That HRW’s advocacy reflects its institutional makeup is unremarkable. Indeed, an examination of its positions on Latin America demonstrates the group’s predictable, general conformity with U.S. interests. Consider, for example, HRW’s reaction to the death of Hugo Chávez. Within hours of his passing on March 5, 2013, HRW published an overview—“Venezuela: Chávez’s Authoritarian Legacy”—to enormous online response. In accordance with its headline’s misleading terminology, HRW never once mentioned Chávez’s democratic bona fides: Since 1998, he had triumphed in 14 of 15 elections or referenda, all of which were deemed free and fair by international monitors. Chávez’s most recent reelection boasted an 81% participation rate; former president Jimmy Carter described the voting process as “the best in the world.”12 The article neglected to cite a single positive aspect of Chávez’s tenure, under which poverty was slashed by half and infant mortality by a third.

In contrast, HRW’s August 21, 2012 statement regarding the death of Ethiopian leader Meles Zenawi was decidedly more muted: “Ethiopia: Transition Should Support Human Rights Reform,” read the headline. Leslie Lefkow, HRW’s deputy Africa director, urged the country’s new leadership to “reassure Ethiopians by building on Meles’s positive legacy while reversing his government’s most pernicious policies.” Regarding a leader whose two-decade rule had none of Chávez’s democratic legitimacy (HRW itself documented Ethiopia’s repressive and unfair elections in both 2005 and 2010), the organization argued only that “Meles leaves a mixed legacy on human rights.”13 Whereas HRW omitted all mention of Chávez-era social improvements, it wrote, “Under [Meles’s] leadership the country has experienced significant, albeit uneven, economic development and progress.”

The explanation for this discrepancy is obvious: as a New York Times obituary reported, Meles was “one of the United States government’s closest African allies.” Although “widely considered one of Africa’s most repressive governments,” wrote the Times, Ethiopia “continues to receive more than $800 million in American aid each year. American officials have said that the Ethiopian military and security services are among the Central Intelligence Agency’s favorite partners.”14

*

HRW has taken its double standard to cartoonish heights throughout Latin America. At a 2009 NED Democracy Award Roundtable, José Miguel Vivanco described Cuba, not the United States, as “one of our countries in the hemisphere that is perhaps the one that has today the worst human-rights record in the region.” As evidence, he listed Cuba’s “long- and short-term detentions with no due process, physical abuse [and] surveillance”—as though these were not commonplace U.S. practices, even (ironically) at Guantánamo Bay.15 Vivanco was also quoted in late 2013, claiming at an Inter-American Dialogue event that the “gravest setbacks to freedom of association and expression in Latin America have taken place in Ecuador”—not in Colombia, the world’s most dangerous country for trade union leaders, or in Honduras, the region’s deadliest country for journalists (both, incidentally, U.S. allies).16

Latin America scholars are sounding the alarm: New York University history professor Greg Grandin recently described HRW as “Washington’s adjunct” in The Nation magazine.17 And when Vivanco publicly stated that “we did [our 2008] report because we wanted to show the world that Venezuela is not a model for anyone,” over 100 academics wrote to the HRW’s directors, lamenting the “great loss to civil society when we can no longer trust a source such as Human Rights Watch to conduct an impartial investigation and draw conclusions based on verifiable facts.”18

HRW’s deep ties to U.S. corporate and state sectors should disqualify the institution from any public pretense of independence. Such a claim is indeed untenable given the U.S.-headquartered organization’s status as a revolving door for high-level governmental bureaucrats. Stripping itself of the “independent” label would allow HRW’s findings and advocacy to be more accurately evaluated, and its biases more clearly recognized.

In Latin America, there is a widespread awareness of Washington’s ability to deflect any outside attempts to constrain its prerogative to use violence and violate international law. The past three decades alone have seen U.S. military invasions of Grenada and Panama, a campaign of international terrorism against Nicaragua, and support for coup governments in countries such as Venezuela, Haiti, Honduras, and Guatemala. If HRW is to retain credibility in the region, it must begin to extricate itself from elite spheres of U.S. decision-making and abandon its institutional internalization of U.S. exceptionalism. Implementing a clear prohibition to retaining staff and advisers who have crafted or executed U.S. foreign policy would be an important first step. At the very least, HRW can institute lengthy “cooling-off” periods—say, five years in duration—before and after its associates move between the organization and the government.

After all, HRW’s Malinowski will be directly subordinate to Secretary of State John Kerry, who conveyed the U.S. attitude toward Latin America in a way that only an administrator of a superpower could. In an April 17, 2013 House Foreign Affairs Committee hearing, a member of Congress asked Kerry whether the United States should prioritize “the entire region as opposed to just focusing on one country, since they seem to be trying to work together closer than ever before.” Kerry reassured him of the administration’s global vision. “Look,” he said. “The Western Hemisphere is our backyard. It is critical to us.”19


1. Kenneth Roth, followed by John Tirman’s response, Twitter, August 25, 3013, http://twitter.com/KenRoth/status/371797912210407424.

2. Greg Miller, “Obama preserves renditions as counter-terrorism tool,” Los Angeles Times, February 1, 2009.

3. José Miguel Vivanco and Peggy Hicks, “Letter to President Chavez on Venezuela’s Candidacy to the UN Human Rights Council,” Human Rights Watch, November 9, 2012.

4. Jo Becker and Scott Shane, “Secret ‘Kill List’ Proves a Test of Obama’s Principles and Will,” The New York Times, May 29, 2012.

5. Senate Foreign Relations Committee, “Statement for the Record by Tom Malinowski,” September 24, 2013.

6. “Text of Obama’s Speech at the U.N.,” The New York Times, September 24, 2013. Statement by H.E. Dilma Rousseff, United Nations, September 24, 2013.

7. Human Rights Watch, “Major Rights Groups Oppose Immunity for Milosevic,” October 6, 2000. HRW, “New Figures on Civilian Deaths in Kosovo War,” Februrary 8, 2000.

8. Human Rights Watch, “Board of Directors,” www.hrw.org, accessed November 16, 2013.

9. U.S. Department of State, “Franklin Fellows Alumni,” September 8, 2011, http://careers.state.gov/ff/meet-the-fellows/franklin-fellows/miguel-diaz, accessed November 16, 2013.

10. Ways and Means Committee, “Statement of Myles Frechette, the North American Peruvian Business Council,” U.S. House of Representatives, May 8, 2001.

11. David Ignatius, “Innocence Abroad: The New World of Spyless Coups,” The Washington Post, September 22, 1991.

12. Keane Bhatt, “A Hall of Shame for Venezuelan Elections Coverage,” Manufacturing Contempt (blog), nacla.org, October 8, 2012.

13. Human Rights Watch, “Ethiopia: Government Repression Undermines Poll,” May 24, 2010.

14. Jeffrey Gettleman, “Meles Zenawi, Prime Minister of Ethiopia, Dies at 57,” The New York Times, August 22, 2012.

15. National Endowment for Democracy, “José Miguel Vivanco: 2009 NED Democracy Award Roundtable,” Youtube.com, Jun 29, 2009.

16. Eva Saiz, “Indígenas de Ecuador denuncian en EEUU la norma de libre asociación de Correa,” El Pais, October 28, 2013.

17. Greg Grandin, “The Winner of Venezuela’s Election to Succeed Hugo Chávez Is Hugo Chávez,” The Nation, April 16, 2013.

18. Venezuelanalysis.com, “More Than 100 Latin America Experts Question Human Rights Watch’s Venezuela Report,” December 17, 2008.

19. Committee on Foreign Affairs, House of Representatives, “Hearing: Securing U.S. Interests Abroad: The FY 2014 Foreign Affairs Budget,” April 17, 2013.

February 5, 2014 Posted by | Deception, Mainstream Media, Warmongering, Timeless or most popular | , , , , , , , | 1 Comment

NAFTA at 20: State of the North American Worker

Twenty years since its passage, NAFTA has displaced workers on both sides of the U.S.-Mexico border, depressed wages, weakened unions, and set the terms of the neoliberal global economy.

By Jeff Faux | Foreign Policy in Focus | December 13, 2013

Foreign Policy In Focus is partnering with Mexico’s La Jornada del campo magazine, where an earlier version of this commentary appeared, to publish a series of pieces examining the impacts of the North American Free Trade Agreement (NAFTA) 20 years since its implementation. This is the first in the series.

The North American Free Trade Agreement, or NAFTA, was the door through which American workers were shoved into the neoliberal global labor market.

By establishing the principle that U.S. corporations could relocate production elsewhere and sell their products back into the United States, NAFTA undercut the bargaining power of American workers, which had driven the expansion of the middle class since the end of World War II. The result has been 20 years of stagnant wages and the upward redistribution of income, wealth, and political power.

A Template for Neoliberal Globalization

NAFTA impacted U.S. workers in four principal ways.

First, it caused the loss of some 700,000 jobs as companies moved their production to Mexico, where labor was cheaper. Most of these losses came in California, Texas, Michigan, and other states where manufacturing is concentrated (and where many immigrants from Mexico go). To be sure, there were some job gains along the border in the service and retail sectors resulting from increased trucking activity. But these gains are small in relation to the losses, and have generally come in lower paying occupations. The vast majority of workers who lost jobs from NAFTA, therefore, suffered a permanent loss of income.

Second, NAFTA strengthened the ability of U.S. employers to force workers to accept lower wages and benefits. As soon as NAFTA became law, corporate managers began telling their workers that their companies intended to move to Mexico unless the workers lowered the cost of their labor. In the midst of collective bargaining negotiations with unions, some companies even started loading machinery into trucks that they said were bound for Mexico. The same threats were used to fight union organizing efforts. The message was: “If you vote to form a union, we will move south of the border.” With NAFTA, corporations also could more easily blackmail local governments into giving them tax breaks and other subsidies, which of course ultimately meant higher taxes on employees and other taxpayers.

Third, NAFTA drove several million Mexican workers and their families out of the agriculture and small business sectors, which could not compete with the flood of products—often subsidized—from U.S. producers. This dislocation was a major cause of the dramatic increase of undocumented workers in the United States, putting further downward pressure on North American wages, particularly in already lower-paying labor markets.

Fourth, and ultimately most importantly, NAFTA created a template for the rules of the emerging global economy, in which the benefits would flow to capital and the costs to labor. Among other things, NAFTA granted corporations extraordinary protections against national labor laws that might threaten profits, set up special courts—chosen from rosters of pro-business experts—to judge corporate suits against governments, and at the same time effectively denied legal status to workers and unions to defend themselves in these new cross-border jurisdictions.

The U.S. governing class—in alliance with the financial elites of its trading partners—applied the NAFTA principles to the World Trade Organization, to the policies of the World Bank and IMF, and to the deal under which employers of China’s huge supply of low-wage workers were allowed access to U.S. markets in exchange for allowing American multinational corporations to invest there. The NAFTA doctrine of socialism for capital and free markets for labor also drove U.S. policy in the Mexican peso crisis of 1994-95, the Asian financial crash of 1997, and the global financial meltdown of 2008. In each case, the U.S. government organized the rescue of banks and corporate investors while letting the workers fend for themselves.

A Watershed in U.S. Politics

In U.S. politics, the passage of NAFTA under President Bill Clinton signaled that the elites of the Democratic Party—the “progressive” major party—had accepted the reactionary economic ideology of Ronald Reagan.

A “North American Accord” was first proposed by the Republican Reagan in 1979, a year before he was elected president. A decade later, his Republican successor, George H.W. Bush, negotiated the final agreement with Mexico and Canada.

At the time, the Democrats who controlled Congress would not approve the agreement. And when Democrat Bill Clinton was elected in 1992, it was widely assumed that the political pendulum would swing back from the right, and that therefore NAFTA would never pass. But Clinton surrounded himself with economic advisers from Wall Street and in his first year pushed the approval of NAFTA through the Congress.

Despite the rhetoric, the central goal of NAFTA was not “expanding trade.” After all, the United States, Mexico, and Canada had been trading goods and services with each other for three centuries. NAFTA’s central purpose was to free American corporations from U.S. laws protecting workers and the environment. Moreover, it paved the way for the rest of the neoliberal agenda in the United States: the privatization of public services, the deregulation of finance, and the destruction of the independent trade union movement.

The inevitable result was to undercut the living standards of workers all across North America: Wages and benefits have fallen behind worker productivity in all three countries. Moreover, despite declining wages in the United States, the gap between the typical American and typical Mexican worker in manufacturing remains the same. Even after adjusting for differences in living costs, Mexican workers continue to make about 30 percent of the wages that workers make in the United States. Thus, NAFTA is both symbol and substance of the global “race to the bottom.”

Creating a New Template

Here in North America there are two alternative political strategies for change.

One is repeal: NAFTA gives each nation the right to opt out of the agreement. The problem is that by now the three countries’ economies and populations have become so integrated that dis-integration could cause widespread dislocation, unemployment, and a substantial drop in living standards.

The other option is to build a cross-border political movement to rewrite NAFTA in a way that gives ordinary citizens rights and labor protections at least equal to the current privileges of corporate investors. For example, all three NAFTA nations should adopt similar high standards for the protection of free trade unions, collective bargaining, and health and safety—and their citizens should have the right to sue other countries for violations.

This would obviously not be easy. But a foundation has already been laid by the growing collaboration among immigrant, trade unionist, human rights, and other activist organizations in all three counties.

If such a movement could succeed in drawing up a new continent-wide social contract, North American economic integration—instead of being a blueprint for worker exploitation—might just become a model for bringing social justice to the global economy.

Jeff Faux is the founder, and now Distinguished Fellow, of the Economic Policy Institute in Washington DC. His latest book is The Servant Economy.

December 14, 2013 Posted by | Civil Liberties, Economics, Environmentalism, Solidarity and Activism, Timeless or most popular | , , , , , , , | Leave a comment

The Shady Ties Between de Blasio and the Clintons

The New Democrats, Same as the Old

By RICHARD KREITNER |  October 25, 2013

Last Monday, Hillary Clinton headlined a fundraiser at the Roosevelt Hotel in Manhattan for Bill de Blasio, the man who managed her successful 2000 Senate campaign and last month declared himself “proud to come from the Clinton family.” Topping the list of co-chairs for the event—those who have promised to bundle $25,000 for de Blasio—was one Paul Adler, a Democratic power-broker in Rockland County, and a convicted felon.

Adler has long been a devoted supporter of de Blasio, whom he first met in 1996 when de Blasio ran the president’s re-election operation in New York. When Clinton named de Blasio her campaign manager in 1999, Adler told the Associated Press she would “benefit enormously” from such “a hands-on professional.”

In 2000, Rockland County was one of the most heavily contested swing districts in New York State, and Clinton faced tough opposition in former Rep. Rick Lazio, a social conservative well-liked by leaders in the ultra-Orthodox community. As chairman of the Rockland County Democratic Party, Adler was valuable enough to the Clintons that he was invited to spend a night at the White House, which he reciprocated by hosting Hillary at his home during her listening tours of the state. Serving as a delegate to Democratic National Convention in Los Angeles in August 2000, Adler was profiled by CNN as one of the “the folks who are the heart and soul of American politics.” He proudly told the camera:

My Rolodex is my most prized possession. It is a 25-year work in progress. It is the tool that enables me to do what I need to do: to get somebody at an embassy to get a donor who allows me to get the superintendent of highways. If the building was on fire, I would run in to get that first.

His main task was cultivating Jewish support in the county, especially among the various Hasidic sects, which often deliver votes in blocs on the strong recommendation of rabbinic leadership. Adler was especially close to New Square, a Skverer Hasidic village of about 7,000 people that may have the most political power per capita of any community in the United States. Its leader, Rabbi David Twersky is seen as infallible by his followers: on Shabbat, hundreds or even thousands of worshippers watch the rabbi eat precisely specified portions of food—so much whitefish, so much egg salad—and eagerly await the honor of consuming his leftovers. The village was most recently in the news in 2011 when a young goon allied with Twersky—the nephew of his top political aide, Deputy Mayor Israel Spitzer—set fire to a 43-year old plumber and father-of-four named Aron Rottenberg, who had dared attend services at an outside shul.

In the 2000 Senate election, New Square voted 1400-12 in favor of Clinton, while nearby communities voted just as overwhelmingly for the pro-life Lazio. In December of that year, the senator-elect welcomed Twersky and other New Square leaders to the White House, where they asked the president to review the case of four Skverers who had been convicted two years earlier of embezzling tens of millions of dollars from federal education and housing programs. On his last day of office in January 2001, President Clinton commuted the sentences of the four men. The appearance of a possibly illegal quid pro quo involving New Square’s votes, as well as other suspicious Clinton pardons, prompted the U.S. Attorney for the Southern District of New York, Mary Jo White (now head of the SEC), to launch an investigation the following month.

A March 2001 article in the New York Times about the case noted the government would have to prove that New Square’s votes represented a “thing of value” which could be traded illegally for commutations. Otherwise, however unseemly the appearance of a deal, nothing illegal could be proven to have occurred. That line would only have been crossed, experts said, had a monetary donation been specifically tied to a certain promised outcome, and no New Square leaders had contributed financially to Clinton’s campaign.

By the time the commutations were granted, de Blasio was already running for a spot on the New York City Council. On December 7th, 2000, just a month after Hillary’s election and two weeks before his and Twersky’s White House visit, New Square Deputy Mayor Israel Spitzer—the rebbe’s political liason to outsiders—attended a fundraiser in Manhattan for de Blasio’s council race, donating $2,500, the legal limit at the time. In August 2001, when the Village Voice asked de Blasio whether he had been questioned in White’s pardons investigation, he refused to say yes or no, only adding, “I’m waiting to hear what’s going to happen with that.”

Whether or not de Blasio ever did, the public never has. But given his leadership of Clinton’s campaign (with a specific portfolio, as one former Clinton aide recently told The Times, of soothing “many of the prickly political factions in New York State,” not a reference to cabdrivers), the timely Spitzer donation, and his relationship with Adler, it is almost impossible to conceive of the possibility that de Blasio did not at least know about New Square’s strategy for obtaining presidential pardons by showering Clinton with symbolically significant Jewish support—or, at most, participate in that strategy by helping procure for Twersky and Spitzer a much-desired visit to the White House to plead their case. Spitzer’s and, more recently and more extensively, Adler’s continued patronage of de Blasio’s political career at least gives the impression that the central figures of the New Square pardons episode remain deeply grateful toward Clinton’s former campaign manager, as they are towards this year’s Democratic candidate for Rockland County Executive, David Fried, another former Clinton aide who helped orchestrate the relationship between the village and the campaign at the time and has been endorsed by the ex-president. Either Spitzer and Adler are rewarding Fried and de Blasio for services rendered or they just happen to be supporting, financially and otherwise, the candidates who thirteen years ago were perfectly positioned to have helped them accomplish what was then their most urgent political—and for the New Square leaders, religious—goal.

In response to a series of questions about New Square and Paul Adler, de Blasio campaign spokesman Dan Levitan wrote: “Bill is proud of his time working for the Clinton Administration and on Hillary’s Senate campaign. The facts clearly show he had no involvement in this matter.”

***

In 1997, when four Skverers—three from New Square and one from Brooklyn—were arrested and charged with conspiracy to defraud the federal government, the village refused to participate in the investigation. At one point a mob surrounded  federal agents trying to serve subpoenas. Three other men, including a founder of the village and the mayor’s son, fled to Israel, though those two were later caught and convicted. According to the Talmud, “pidyon shvuyim”—releasing Jewish captives held by gentiles—is one of the most important mitzvahs in Jewish law, and by the summer of 2000, the Skverer community was desperate to spring the men from prison.

Meanwhile, Clinton was struggling in her race against Lazio, having a hard time defeating the “carpet-bagger” label in her newly adopted home state, as well as a general Clinton fatigue. Worse, the Jewish community was apoplectic over the news that the First Lady embraced and kissed Yasser Arafat’s wife, Suha, just after she slurred Israel, and a new book was out claiming that as a 26-year-old, Clinton had allegedly yelled “You fucking Jew bastard!” at the manager of her then-boyfriend Bill’s unsuccessful 1974 congressional campaign in Arkansas. It became de Blasio’s job to make sure Jewish leaders like Assemblyman Dov Hikind, a longtime Brooklyn macher, at the very least didn’t publicly endorse Lazio.

But for Rockland County there was Adler, who knew the soft spot in the ordinarily Republican-voting Hasidic front. On August 8th, Adler coordinated the candidate’s visit to New Square. Clinton, wearing a head covering and a long black skirt, met with Twersky, Spitzer, Assembly Speaker Sheldon Silver, and assorted Rockland County leaders at the rabbi’s home. The community “embraced her with a warmth that surprised and delighted her campaign team,” The Daily News reported the following year.

As Clinton’s efforts to woo Twersky intensified, the rabbi hatched a strategy to achieve his one goal: winning the release of his four followers from prison. On August 25th, two weeks after Clinton’s visit, a Manhattan appeals court rejected a motion to overturn the convictions. With Adler, Clinton visited New Square again in mid-September, and according to two different accounts, one given to the News and one to the Jewish Telegraphic Agency, it was either that month or the next when Twersky told Nathan Lewin, the Orthodox Washington lawyer representing the convicted villagers, of his plan to deliver overwhelming support in New Square for Clinton’s Senate bid in order to convince her husband to grant pardons—or at least commutations—to the four men. “I thought he was out of his mind,” Lewin recalled to the News at the time. (In a phone call, Lewin denied having had any knowledge of the rabbi’s plan.)

But sure enough, commutations of the men’s sentences were among the nearly 177 pardons and other remissions Bill Clinton granted during his final days in office. Newly installed as a senator, Hillary Clinton denied reports that she had attended a meeting before the election at which Twersky’s request for pardons was discussed. “Sen. Clinton doesn’t recall ever being present during any discussion of clemency for the New Square people prior to December 2000,” Clinton’s lawyer in the case, David Kendall, told the Daily News. In March 2001, FBI investigators visited the New Square Village Hall and Israel Spitzer’s home. Silver, several Rockland officials, and numerous Clinton staffers—some of whom launched legal defense funds for themselves—testified before a grand jury with lawyers provided and paid for by an unidentified source. But White’s successor as U.S. Attorney, James Comey (now head of the FBI), closed the investigation in 2002, without filing any charges, after 9/11 prompted a redistribution of resources and George W. Bush decided it was bad karma to go after his predecessor.

***

Meanwhile, on September 12th, 2000, just a day after being mentioned by The New York Post’s Fred Dicker as a possible replacement for the outgoing state party chair, Adler had been arrested and charged with embezzling at least $375,000 in corrupt real estate deals through bribery, extortion, and mail fraud, including $135,500 for “public relations consulting work” from the developer of the massive Palisades Center mall in West Nyack, which he then funneled through a shell company. According to the complaint, Adler told associates, “If you can’t help your friends, then why get into some of these positions?’” He added that he had not become chairman of the county party to “lose money.” The schemes were similar to the one that in 1987 led to charges against Adler and two associates of bribery and conspiracy to defraud the state government of $20 million in a complicated real estate deal involving a business partner of Governor Mario Cuomo’s son, Andrew; Adler was acquitted on all charges. This time, he was represented by the Bronx-based lawyer Murray Richman, who has made an illustrious career of defending mobsters. (In 2009, Richman bragged to filmmaker Errol Morris: “I had a trial in which my client stabbed the guy in the back four times—uh, no, uh, seven times—and my defense was he kept backing into the knife. And the jury bought it!”)

Responding to demands from Lazio that Clinton return Adler’s donations, a spokeswoman for the First Lady said, “Hillary knows that this is a difficult time for Paul and his family and she wishes them well.” Though the two inquiries were kept separate, as part of the Southern District investigation into Clinton’s pardons the FBI seized two boxes of documents from the Rockland County Democratic Party headquarters, dated 1996-2000: the exact years of Adler’s term as party chair. He faced up to 60 years in prison, but was sentenced to only 19 months in medium-security Otisville penitentiary in a plea bargain his lawyers were careful to assure the Times did not include cooperation with the pardons investigation. In the Post Jack Newfield reported that it was the non-Orthodox Adler who, on that Shabbat morning in January, delivered the news about the commutations to New Square, which Adler’s lawyer denied.

It isn’t clear how much of the New Square portfolio fell to de Blasio in Adler’s absence during the final months of Clinton’s Senate campaign. But it was clearly de Blasio who benefited most from the financial largesse of the community, when Twersky’s aide Spitzer donated $2,500 to what was widely seen as a long-shot run for an open City Council seat in Brooklyn. The district—Brooklyn’s 39th—straddled Park Slope and Borough Park, the urban stronghold of ultra-Orthodox leaders. But the Skverers represent a vanishingly small part of the Borough Park community, and participate almost not at all in its power structure. While Spitzer’s father, Avraham Chaim Spitzer, is a rabbi whose shul is in Borough Park, the synagogue is not in de Blasio’s district. Besides his $2,500 donation to de Blasio’s 2001 council race; a $250 donation to de Blasio’s 2005 re-election bid; and a $3,850 donation to his 2009 public advocate campaign, Spitzer has never before or since donated to a New York City political candidate. Not in Borough Park, not anywhere, not ever: Spitzer’s financial interest in city politics is wholly restricted to de Blasio’s career.

If you are Israel Spitzer, why donate to the nascent, long-shot bid for city council—a city, of course, which you don’t live in—by the guy who just ran the Senate campaign of a woman whose husband is President of the United States and therefore has the unilateral power to grant your most dire political wish? Was he buying access to the Clintons through de Blasio?

“There is no connection whatsoever,” Spitzer said when reached by phone last week. “My relationship to Bill de Blasio is as a councilman and public advocate. We have institutions all over, in Borough Park, in Williamsburg. New Square is not just New Square.”

Did you meet de Blasio when he was working on Hillary Clinton’s 2000 Senate campaign?

“It has nothing to do with the Senate campaign or Hillary. We know him through various activities over the years.”

Your first donation to de Blasio came just a month after the end of Hillary’s campaign, and two weeks before your meeting at the White House with the Clintons.

“I was introduced to him when he decided to run for office, and I thought he was the right candidate.”

“What people may see is obvious,” says Alexander Rapoport, a de Blasio supporter who runs Masbia, a network of kosher soup kitchens that cater to the ultra-Orthodox community in Brooklyn. “Obviously, they did vote for her and they were pardoned. They don’t need for explanation. The eye sees what it sees.”

***

“We are supporting him 100%,” Spitzer says of de Blasio’s current campaign. “Not with financial support, but with access support, other support. We’re helping get communities to endorse him.”

Indeed, though he has given $2,500 to Governor Andrew Cuomo’s 2014 re-election bid, Spitzer has not yet contributed money to de Blasio’s mayoral race.

But Paul Adler has.

For a while after his release, in 2004, Adler kept a low-profile, but as the Rockland County Times noted in March, he has been staging a major comeback in the past three years, winning awards for philanthropy from the Rockland Development Council and for service to the Rockland Business Association, and serving on the boards of several Jewish community organizations. Adler has also regained his real estate license—impossible for a convicted felon in many states—and was hired in 2010 as a vice-president of Rockland-based Rand Commercial, where he tends to blend economic and political boosterism in equal parts. While Adler’s interests may be tangled, they rarely seem to conflict.

Rand Commercial is the leading firm invested in properties adjacent to the Tappan Zee Bridge replacement—Gov. Cuomo’s signature infrastructure project—and Adler has served as chief promoter for the project in local media. “It is pretty clear that when we build it, they will come,” Adler has said—a revealing use of the personal plural. “Business creates more business.” Rand has an entire website devoted to the new bridge, listing newly valuable properties for lease near the site, trumpeting Cuomo’s declarations of its necessity, and promising an economic windfall for adjacent communities. Any information Adler may have been privy to related to the bridge’s construction could have been easily and lucratively parlayed into business for Rand Commercial, but perhaps it is only attributable to coincidence or a keen sense for timing that Adler brokered the deal that will move the state police and New York State Thruway Authority facilities to a vacant warehouse owned by a Rand client in West Nyack.

Adler has also championed a projected desalination plant on the Hudson River proposed by United Water, serving the company as an advocate, pressing Rockland officials and community groups like the NAACP to support the plant over the objections of environmentalists, while encouraging the Cuomo administration to approve it. He was also recently admitted to the bar, which requires letters of recommendation vouching that the candidate possesses “the necessary character to justify the trust and confidence that clients, the public and the legal system will place in them.” Bar applications are sealed and confidential under state law.

This summer, when former state senator Nicholas Spano—who worked at Rand before being convicted of tax fraud in 2012—sought a judge’s permission to communicate with his fellow ex-con, a local paper quoted Adler advising Spano to think of redemption as “really a journey, not a destination.”

Adler’s journey has included a sharp spike in political fundraising activities—an activity the Adlers never seem to have taken much interest in before his arrest, and is perhaps an attempt to buy back the influence he lost. Since 2005, the Adler household has sprinkled more than $50,000 among dozens of local, state, and federal campaigns—including to Andrew Cuomo. He has held events at his home for Rep. Nita Lowey, a Westchester Democrat, and earlier this month hosted a major fundraiser for David Fried, the Democratic candidate for Rockland County Executive and a former White House advance aide for the Clintons who grew up in nearby Spring Valley, adjacent to New Square. A person who was involved in Rockland politics at the time said that in the fall of 2000, with Adler in prison, Fried pressed those who controlled the president’s schedule to fit in a visit to New Square, just across the Hudson from Chappaqua, where the Clintons had bought a home to facilitate Hillary’s Senate bid. According to the person, who is backing Fried in his current campaign, Fried was on the phone with Spitzer constantly at the time. Bill Clinton endorsed Fried earlier this year, saying he “worked closely” with the advance aide, and in the September primary New Square took the extraordinary step of splitting their usual bloc vote, throwing enough votes to Fried to defeat his opponent Ilan Schoenberger, the village’s long-time political patron who also attended the August 2000 meeting with Hillary Clinton.

The Facebook page for last Sunday’s “Democratic Unity Event” for Fried at Adler’s palatial home in New City, a secular community a few minutes’ drive from New Square, said “Everyone is welcome,” and the open door on a drizzly Sunday morning seemed to emphasize the point. In her rousing speech (“We need someone who’s gonna take us out of this darkness and into the light!”), Kristen Stavisky, Adler’s successor as Democratic county chair, named and drew applause for all the “electeds” in the room—all the public officials, that is, including sitting judges, willing to attend a fundraiser in a disgraced ex-convict’s home: David Carlucci, state senator; James Skoufis, assemblyman; Ellen Jaffee, assemblywoman; Christopher St. Lawrence, Mayor of Ramapo (whose town hall was raided in May by the FBI, investigating the construction of a widely-scorned baseball stadium midwifed, according to Skriloff and others, by Adler); Louis Falco, Rockland County Sherriff; and many more. Senator Kirsten Gillibrand sent a staffer. When Adler took the floor he especially called out New Square’s Spitzer, standing just to the side, for recognition. I can tell you that I’ve personally spoken with the governor,” Adler told a captivated room. “The governor will be in to campaign on this. Senator Schumer will be in. Senator Gillibrand will be in. The entire state delegation is going to be down here.”

“I don’t think candidates for political office should actively seek and obtain support, including financial, from a convicted federal felon,” says Michael Bongiorno, who as Rockland County District Attorney in 2000 helped put Adler behind bars. “I think it shows extremely poor judgment on the part of anyone who does so.”

“He is very involved with the community,” Fried says, explaining his willingness to accept Adler’s support. “He was recently admitted as an attorney, which required passage of the ‘Character and Fitness’ test. He is one of the largest donors to community programs and agencies including the JCC, and he is very involved with numerous organizations that are important to me.”

Last week, as Hillary Clinton hosted the Roosevelt Hotel event for de Blasio, her husband attended a fundraiser for Fried. Despite his $25,000 co-chairmanship of the de Blasio fundraiser, rumor has it Adler attended Fried’s. Through a spokesman, Fried declined a follow-up request for comment about his role in obtaining the New Square commutations.

“Adler is part of a small cabal that controls Rockland County,” says Robert Rhodes, a self-described left-wing Democrat who is president of the anti-developers group Preserve Ramapo, which has endorsed Fried’s Republican opponent Ed Day in the county executive race. “He’s a guy who goes to prison, then comes back here raising money for the county Democratic machine.”

***

And not only for the county machine.

Last January, the day before formally declaring his candidacy for the mayoral race, de Blasio wrote on Facebook, “My family is making a very important announcement at our home in Park Slope tomorrow.” Adler’s comment, the very first on the page, was simple: “Good luck.”

But Adler knew it would take more than luck to elect the long-shot de Blasio, having already hosted a Rockland County meet-and-greet for the candidate at his home and, along with Clinton alum Harold Ickes, co-chaired a high-dollar fundraiser for de Blasio at the Waldorf Astoria in 2010, widely seen as the first public hint of de Blasio’s mayoral aspirations and of Clintonian support. Adler has donated $1,500 so far to the mayoral campaign, while his wife Mary and son Samuel, who both also happen to work for Rand Commercial, have donated $4,950 and $250 to de Blasio, respectively, and their daughter, who was hired by Gov. Cuomo as a press officer for the state’s economic development agency, has donated $425. Adler attended de Blasio’s victory party in Gowanus on primary night last month.

Written by Adler and graced with his visage, the official Twitter feed of Rand Commercial—which does not handle city-based properties—spends a lot of time concerned with the New York City mayoral campaign:

Reached by phone, Adler praised de Blasio’s “very progressive mindset” and declared his belief that “the winds are blowing for change.” When asked whether de Blasio played any role in the New Square pardons, Adler said Hillary Clinton’s campaign manager “didn’t have anything to do with that, he had nothing to do with anything.” Asked whether he recalled de Blasio attending any meetings between Clinton and the village leaders, Adler said no, called this reporter “sleazebag” twice, and hung up.

The response de Blasio spokesman Dan Levitan e-mailed did not address questions concerning Paul Adler—including whether the candidate has ever discussed New Square with him. A subsequent request for comment has not been returned.

But on Monday, when Adler sent his announcement about chairing the Clinton/de Blasio fundraiser—from his Rand Commercial e-mail account—he wrote:

We are all inextricably linked together, so let’s be active participants in making history once again.

I know I am always asking to you to support this cause or that candidate, but, we always seem to in the right place at the right time, and this time is no exception.

Richard Kreitner is a writer and researcher in New York City. He is on Twitter at @richardkreitner and can be reached at richard.kreitner [at] gmail.com.

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November 9, 2013 Posted by | Corruption, Deception | , , , , , , | Leave a comment

Palestinian Babies and the Banality of Israeli Racism

By Roger Sheety | Palestine Chronicle | July 9, 2013

A June, 2013 speech by Bill Clinton honoring war criminal Shimon Peres has highlighted the extent to which Israeli anti-Palestinian and anti-Arab bigotry has become acceptable within Western mainstream discourse.

In a racist echo of Golda Meir, who once admitted that she had trouble sleeping because of the number of Palestinian babies being conceived, Clinton said:  “No matter how many settlers you put out there [in the West Bank], the Palestinians are having more babies than the Israelis as a whole….  You’ve got an existential question to answer.”

Clinton, who was reportedly paid $500,000 to publicly share his hatred of Palestinian babies, couched his bigotry as part of a speech on “peace” and the bankrupt “two-state solution.”  Said Clinton:  “If you don’t have a vision of where you want to wind up, bad things are going to happen sooner or later….  You have a better chance if you are driven by a vision of peace and reconciliation.”  In plain language, if Israel does not return a mere 22 percent of the 100 percent of Palestinian land it stole, it will soon (horror of horrors) be overrun with Palestinian children.

Clinton’s racist comments, reported worldwide by mainstream media mostly without irony, were also an extension of current U.S. President Barack Obama’s own fear and hatred of Palestinian children, which he expressed clearly in May of 2011 to the delight and cheers of his American Israel Public Affairs Committee (AIPAC) audience in Washington:

“Here are the facts we all must confront.  First, the number of Palestinians living west of the Jordan River is growing rapidly and fundamentally reshaping the demographic realities of both Israel and the Palestinian territories.  This will make it harder and harder—without a peace deal—to maintain Israel as both a Jewish state and a democratic state.”

For Palestinians, of course, neither Clinton’s nor Obama’s morally abhorrent remarks come as a surprise since they have long been accustomed to Israeli racism and its accompanying violence and brutality.  Racist terms like “demographic bomb” and “demographic threat” are so common in Israeli media and discourse that they barely register any protest in the so-called “Jewish and democratic state.”

We are not talking about Israeli soccer fans thuggishly chanting “death to Arabs” at sporting events (a common occurrence these days), but rather racist incitement from the highest elected officials.  Both Peres and Benjamin Netanyahu, for instance, have used the phrase “demographic threat” in public statements regarding Palestinian citizens of the state.  In 2003, as finance minister, Netanyahu would say, “If there is a demographic problem, and there is, it is with the Israeli Arabs who will remain Israeli citizens” (“Netanyahu:  Israel’s Arabs are the real demographic threat,” Haaretz, December 18, 2003).

Similarly, Peres would publicly muse in 1977 on the “problem” of the growing Palestinian population of Jerusalem:  “I do not want to wake up one morning to discover that Jerusalem is subject to the demographic fate of [the] Galilee” (“Israel’s Geographic-Demographic Threat to Identity,” Royal United Services Institute News Brief, January, 2011).  Ehud Olmert, as well, in a speech to the Knesset in 2007, would speak in alarming tones of a pending “demographic battle drowned in blood and tears.”

In 2009, Israeli Housing Minister Ariel Atias would instigate hatred against Palestinian citizens of the state and justify apartheid in a speech to the Israel Bar Association.  “I see [it] as a national duty to prevent the spread of a population that, to say the least, does not love the state of Israel,” said Atias.  Speaking in particular against the Palestinian population of the Galilee, he added:  “If we go on like we have until now, we will lose the Galilee.  Populations that should not mix are spreading there.  I don’t think that it is appropriate [for Arabs and Israeli Jews] to live together” (“Housing Minister:  Spread of Arab population must be stopped,” Haaretz, July, 2009).

Michael Oren, the current Israeli Ambassador (and chief propagandist) to the U.S., would even write a lengthy and deeply racist article published in Commentary magazine in 2009, titled “Seven Existential Threats,” and which included the sub-heading “The Arab Demographic Threat.”  He would opine in a grave, apocalyptic voice that “the Palestinian population on both sides of the 1949 armistice lines is expanding far more rapidly than the Jewish sector and will surpass it in less than a decade.”

This trend must not continue, continues Oren, because “Israel, the Jewish State, is predicated on a decisive and stable Jewish majority of at least 70 percent.  Any lower than that and Israel will have to decide between being a Jewish state and a democratic state.  If it chooses democracy, then Israel as a Jewish state will cease to exist.”

Israeli academics and intellectuals, too, have joined the racist chorus of incitement and, simultaneously, of justification of war crimes against Palestinians.  So Benny Morris, for example, after documenting the destruction of Palestine, the massive ethnic cleansing, the theft of land, and the massacres and rapes of innocents, would then vindicate every crime of the Zionist colonial-settler state from 1948 to the present.

“There are circumstances in history that justify ethnic cleansing,” said Morris in a 2004 interview with Ari Shavit.  “That is what Zionism faced [in 1948].  A Jewish state would not have come into being without the uprooting of 700,000 Palestinians.  Therefore it was necessary to uproot them.  There was no choice but to expel that population.  It was necessary to cleanse the hinterland and cleanse the border areas and cleanse the main roads.  It was necessary to cleanse the villages from which our convoys and our settlements were fired on.”

Then, jumping ahead six decades, he refers to Palestinian citizens of the state, who were not ethnically cleansed, in typically racist terms:  “The Israeli Arabs are a time bomb.  Their slide into complete Palestinization has made them an emissary of the enemy that is among us.  They are a potential fifth column.  In both demographic and security terms they are liable to undermine the state” (“An interview with Benny Morris,” Counterpunch.org, January, 2004).  Morris would thus set the stage for future ethnic cleansing of Palestinians, including the current operation in the Naqab (“Negev”) where tens of thousands of Palestinian Bedouin have been targeted for forcible removal from their ancestral lands.

Furthermore, these terms, once used exclusively against Palestinians, are now also utilized by both Israeli officials and citizens to shamelessly incite hatred against African asylum seekers, as well as African Jews who are, nominally, citizens of the state.  As reported by Haaretz in 2010, for instance, Netanyahu said, the “flood of illegal workers infiltrating from Africa [was] a concrete threat to the Jewish and democratic character of the country.”  Without skipping a beat, he would then associate asylum seekers with smuggling of drugs, terrorism, and general decadence, and so justifying the building of yet another apartheid wall to keep out the unwanted (“Netanyahu: Illegal African immigrants—a threat to Israel’s Jewish character,” Haaretz, July, 2010).  See, in addition, the superb work of David Sheen who has meticulously documented recent shockingly fanatical anti-African marches in Tel Aviv, organized and led by elected Israeli officials and community leaders, in dozens of official reports, interviews, and video testimonies (www.davidsheen.com/racism/).

It is impossible to imagine Clinton, Obama, or any major political figure for that matter, talking about any other national, ethnic, or religious group in such unapologetically racist terms.  Would either have made analogous comments regarding, for example, indigenous South Africans during the days of South African Apartheid?  Or against North American First Nation peoples today?  Would an Australian or Canadian housing minister ever speak about a minority group within their countries with the same unabashed hatred as Ariel Atias?  Had they done so, the response of Western liberal pundits and intellectuals would have been swift and indignant—and rightfully so.

Ethnic cleansing, land theft, destruction of hundreds of ancient towns and villages, massacres, military occupation, and apartheid over six and a half decades in Palestine are all deeply tied together with Israeli/Zionist racism.  Indeed, Israeli bigotry has often been and continues to be used to sanction and sanctify Israeli crimes against humanity; thus do attitudes and actions simultaneously fuel and feed off each other.  That even supposed progressives have adopted Israeli attitudes towards Palestinians in their public statements as their own (with little or no controversy), and therefore also excusing Israeli crimes, shows the vile depths to which mainstream media discourse has sunk.

July 10, 2013 Posted by | Ethnic Cleansing, Racism, Zionism, Progressive Hypocrite, Timeless or most popular | , , , , , , | 2 Comments

Israel, Hawking and the Pressing Question of Boycott

By Ramzy Baroud | Palestine Chronicle | May 16 2013

It is an event ‘of cosmic proportions’, said one Palestinian academic, a befitting description regarding Stephen Hawking’s decision to boycott an Israeli academic conference slated for next June. It was also a decisive moral call which was communicated on May 8 by Cambridge University, where Hawking is a professor.

Hawking is a world-renowned cosmologist and physicist. His scientific work had the kind of impact that redefined or challenged entire areas of research from the theory of relativity, to quantum mechanics and other fields of study. This towering figure is also wheelchair-bound – suffering from complete physical paralyses caused by amyotrophic lateral sclerosis (ALS) disease. For Hawking, however, such a painful fact seems like a mere side note in the face of his incredible contributions to science, ones that are comparable to only few men and women throughout history.

What is considered a prestigious scientific conference in Israel is hosted by President Shimon Peres, most remembered by Lebanese and Palestinians for ordering the shelling of a United Nations compound near the village of Qana in South Lebanon in 1996. The compound was a safe heaven, where civilians often sought shelter during Israeli strikes. Not that time around, however. 106 innocent people that were mostly children and women were killed and 116 wounded, including UN forces. That harrowing event alone would have sent Peres, then Israel’s prime minister, to serve his remaining years in jail. But of course, Israel is above the law, or so the Israeli government believes and thus it has consistently behaved accordingly in the last 65 years with a price tag of uncountable lives, untold destruction and protracted suffering of entire nations.

Hawking’s response to the boycott call was immensely important. The man’s legendary status aside, the Boycott, Divestment and Sanctions (BDS) movement has proved more durable and successful than its detractors – mostly Israel’s apologists – want to believe. Hawking’s decision was also a testament that reason and morality should and must go hand in hand. Israel’s boasting of its scientific accomplishments should mean zilch if such technology is put to work to advance state violence, tighten military occupation and make killer drones available to other countries, thus exporting violence and mayhem. That very ‘science’ was used in abundance in Israel’s latest two wars on Gaza (2008-09 and 2012) which claimed thousands of lives between the dead and wounded.

Cambridge University, perhaps wary of a possible backlash, tried to mask Hawking’s decision as one that is compelled by health reasons, which, of course, was not the case at all. The university eventually retracted the statement, for the British scientist wished to make his decision crystal clear. The UK Guardian newspaper reported on Hawking’s rebuff of the conference, citing a statement by the British Committee for the Universities of Palestine, as it had coordinated with Hawking’s office:

“We understand that Professor Stephen Hawking has declined his invitation to attend the Israeli Presidential Conference Facing Tomorrow 2013, due to take place in Jerusalem on 18-20 June. This is his independent decision to respect the boycott, based upon his knowledge of Palestine, and on the unanimous advice of his own academic contacts there.”

Unlike other acts of boycott, sometimes dismissed by Israeli officials as insignificant, this one was manifestly shocking for Israel. Yigal Palmor, spokesman for Israel’s Foreign Ministry was quoted by the New York Times saying “never has a scientist of this stature boycotted Israel.”

And since it was unexpected, Hawking’s respect of the boycott generated disorganized Israeli and pro-Israeli responses, ranging from demeaning jokes and insults pertaining to his illness, unwarranted accusations and even shaming him for using technology supposedly developed in Israel to combat his deteriorating ALS condition.

Never before has the country lost control over its carefully tailored narrative of its military occupation and violations of human rights in Palestine as is the case these days. While on one hand, Israeli officials speak of ‘peace’, they continue to issue tenders to build more settlements or expand existing ones, all built illegally on Palestinian land. On the very day that Hawking’s decision to boycott the conference was announced, ‘civil administration’ in Israel agreed to the construction of 296 new housing units in the illegal settlement of Beit El, thus entrenching military occupation and ethnic cleansing. Israeli officials and media still insist that there are no links whatsoever between such stark violations of international and humanitarian law and the rising boycott movement. They indefatigably accuse their critics of ‘anti-Semitism’ (which is hardly effective anymore) and warn of attempts at the ‘de-legitimatization’ of Israel, as if they expect the world to remain completely oblivious to its perpetual war crimes, illegal occupation and institutionalized discrimination against non-Jewish inhabitants of Palestine and Israel.

The dialectics of Hawking’s decision are also important. It is a proof that civil society remains relevant, can be effective and also shows that official venues are not the only platforms in which the occupation of Palestine can be discussed and justly addressed. Nearly 20 years have passed since the Oslo Accords were signed, yet the Israeli occupation seems much more rooted than it was in 1993.

There is little doubt that the boycott movement is in constant growth and not simply because of the recurring news of artists and academics refusing to visit Israel, or take part in Israeli-sponsored events. Equally significant is the existence of strong layers of support being provided by civil society that makes it possible for artists, academics and others to adhere to the call of boycott, without fearing serious repercussions.

It was revealed that a letter to Hawking, aimed at dissuading him from joining the conference was signed by 20 top academics from many universities, including MIT, Cambridge, London, Leeds, Southampton, Warwick, Newcastle, etc. The professors told Hawking they were ‘surprised and deeply disappointed’ that he had agreed to take part in the conference, which is also to be attended by former British Prime Minister Tony Blair and former US President Bill Clinton, each with his own record of war crimes accusations spanning from Sudan, to Afghanistan, to Iraq.

But criticism of Hawking is not only emanating from Israel and its predictable circle of diehard supporters. It is also coming from some of those who count themselves as members of the Palestinian solidarity camp. The latter group, which is shrinking in number and outreach, argue that boycotting all aspects of Israel’s academic, cultural and political life will play into Israel’s ‘anti-Semitism’ and ‘de-legitimization’ arguments.

But can the solidarity movement limit its boycott to the few Israeli companies with links to West Bank settlements and expect to achieve tangible, long term results? Those who think that boycotting the occupation is enough, seem not to understand the nature of the relationship between West Bank setters and the Israeli government. Israel treats the settlements and its well-armed inhabitants as part and parcel of the Israeli state and economy. They are residents of Israel, even if they live near Ramallah. There is no separation whatsoever except for some imaginary ‘Green Lines’ and such. And now with the Apartheid Wall, even that separation is being blurred and redefined.

Palestinians in Gaza or Nablus don’t see any difference between a solider who lives in an illegal Jewish settlement or another who lives inside Israel. They are all capable of committing murder, as many surely have, unhampered by geography or borders. International civil society should not fall into the trap of illusory distinctions. This also makes Hawking’s decision to boycott an Israel-based conference “of cosmic proportions”. It is morally defensible and ethically sound, qualities befitting a formidable man of reason like Stephen Hawking.

Ramzy Baroud (www.ramzybaroud.net) is the editor of PalestineChronicle.com. His latest book is: My Father Was A Freedom Fighter: Gaza’s Untold Story (Pluto Press).

May 16, 2013 Posted by | Ethnic Cleansing, Racism, Zionism, Illegal Occupation, Solidarity and Activism, Timeless or most popular, War Crimes | , , , , , , , | 2 Comments