yeah, it’s long, but it’s the reality, OK?

Three Good Reasons To Liquidate Our Empire
Chalmers Johnson, Tom Dispatch, Jul 30 2009

However ambitious Obama’s domestic plans, one unacknowledged issue has the potential to destroy any reform efforts he might launch. Think of it as the 800-pound gorilla in the US living room: our long-standing reliance on imperialism and militarism in our relations with other countries and the vast, potentially ruinous global empire of bases that goes with it. The failure to begin to deal with our bloated military establishment and the profligate use of it in missions for which it is hopelessly inappropriate will, sooner rather than later, condemn the US to a devastating trio of consequences: imperial overstretch, perpetual war, and insolvency, leading to a likely collapse similar to that of the former Soviet Union. According to the 2008 official Pentagon inventory of our military bases around the world, our empire consists of 865 facilities in more than 40 countries and overseas US territories. We deploy over 190,000 troops in 46 countries and territories. In just one such country, Japan, at the end of Mar 2008, we still had 99,295 people connected to US military forces living and working there: 49,364 members of our armed services, 45,753 dependent family members, and 4,178 civilian employees. Some 13,975 of these were crowded into the small island of Okinawa, the largest concentration of foreign troops anywhere in Japan. These massive concentrations of US military power outside the US are not needed for our defense. They are, if anything, a prime contributor to our numerous conflicts with other countries. They are also unimaginably expensive. According to Anita Dancs, an analyst for the website Foreign Policy in Focus, the US spends approximately $250b each year maintaining its global military presence. The sole purpose of this is to give us hegemony, that is, control or dominance, over as many nations on the planet as possible. We are like the British at the end of WW2: desperately trying to shore up an empire that we never needed and can no longer afford, using methods that often resemble those of failed empires of the past, including the Axis powers of WW2 and the former Soviet Union. There is an important lesson for us in the British decision, starting in 1945, to liquidate their empire relatively voluntarily, rather than being forced to do so by defeat in war, as were Japan and Germany, or by debilitating colonial conflicts, as were the French and Dutch. We should follow the British example. Alas, they are currently backsliding and following our example by assisting us in the war in Afghanistan. Here are three basic reasons why we must liquidate our empire or else watch it liquidate us.

(1) We can no longer afford our postwar expansionism. Shortly after his election as president, Obama, in a speech announcing several members of his new cabinet, stated as fact that “we have to maintain the strongest military on the planet.” A few weeks later, on Mar 12 2009, in a speech at the National Defense University in Washington DC, the president again insisted, “Now make no mistake, this nation will maintain our military dominance. We will have the strongest armed forces in the history of the world.” And in a commencement address to the cadets of the US Naval Academy on May 22, Obama stressed that “we will maintain America’s military dominance and keep you the finest fighting force the world has ever seen.” What he failed to note is that the US no longer has the capability to remain a global hegemon, and to pretend otherwise is to invite disaster. According to a growing consensus of economists and political scientists around the world, it is impossible for the US to continue in that role while emerging into full view as a crippled economic power. No such configuration has ever persisted in the history of imperialism. The University of Chicago’s Robert Pape, in Dying to Win: The Strategic Logic of Suicide Terrorism (Random House, 2005), writes:

The US is in unprecedented decline. The self-inflicted wounds of the Iraq war, growing government debt, increasingly negative current-account balances and other internal economic weaknesses have cost the US real power in today’s world of rapidly spreading knowledge and technology. If present trends continue, we will look back on the Bush years as the death knell of US hegemony.

There is something absurd, even Kafkaesque, about our military empire. Jay Barr, a bankruptcy attorney, makes this point using an insightful analogy:

Whether liquidating or reorganizing, a debtor who desires bankruptcy protection must provide a list of expenses, which, if considered reasonable, are offset against income to show that only limited funds are available to repay the bankrupted creditors. Now imagine a person filing for bankruptcy claiming that he could not repay his debts because he had the astronomical expense of maintaining at least 737 facilities overseas that provide exactly zero return on the significant investment required to sustain them. He could not qualify for liquidation without turning over many of his assets for the benefit of creditors, including the valuable foreign real estate on which he placed his bases.

In other words, the US is not seriously contemplating its own bankruptcy. It is instead ignoring the meaning of its precipitate economic decline and flirting with insolvency. Nick Turse, author of The Complex: How the Military Invades our Everyday Lives (Metropolitan Books, 2008), calculates that we could clear $2.6b if we would sell our base assets at Diego Garcia in the Indian Ocean and earn another $2.2b if we did the same with Guantánamo Bay in Cuba. These are only two of our over 800 overblown military enclaves. Our unwillingness to retrench, no less liquidate, represents a striking historical failure of the imagination. In his first official visit to China since becoming Treasury Secretary, Timothy Geithner assured an audience of students at Beijing University, “Chinese assets invested in the US are very safe.” According to press reports, the students responded with loud laughter. Well they might. In May 2009, the Office of Management and Budget predicted that in 2010 the US will be burdened with a budget deficit of at least $1750b. This includes neither a projected $640b budget for the Pentagon, nor the costs of waging two remarkably expensive wars. The sum is so immense that it will take several generations for US citizens to repay the costs of Bush’s imperial adventures, if they ever can or will. It represents about 13% of our current GDP. It is worth noting that the target demanded of European nations wanting to join the Euro Zone is a deficit no greater than 3% of GDP. Thus far, Obama has announced measly cuts of only $8.8b in wasteful and worthless weapons spending, including his cancellation of the F-22 fighter aircraft. The actual Pentagon budget for next year will, in fact, be larger, not smaller, than the bloated final budget of the Bush era. Far bolder cuts in our military expenditures will obviously be required in the very near future if we intend to maintain any semblance of fiscal integrity.

(2) We are going to lose the war in Afghanistan and it will help bankrupt us. One of our major strategic blunders in Afghanistan was not to have recognized that both Great Britain and the Soviet Union attempted to pacify Afghanistan using the same military methods as ours and failed disastrously. We seem to have learned nothing from Afghanistan’s modern history, to the extent that we even know what it is. Between 1849 and 1947, Britain sent almost annual expeditions against the Pashtun tribes and sub-tribes living in what was then called the North-West Frontier Territories, the area along either side of the artificial border between Afghanistan and Pakistan called the Durand Line. This frontier was created in 1893 by Britain’s foreign secretary for India, Sir Mortimer Durand. Neither Britain nor Pakistan has ever managed to establish effective control over the area. As the eminent historian Louis Dupree put it in his book Afghanistan (Oxford University Press, 2002, p. 425):

Pashtun tribes, almost genetically expert at guerrilla warfare after resisting centuries of all comers and fighting among themselves when no comers were available, plagued attempts to extend the Pax Britannica into their mountain homeland.

An estimated 41 million Pashtuns live in an undemarcated area along the Durand Line and profess no loyalties to the central governments of either Pakistan or Afghanistan. The region known today as the Federally Administered Tribal Areas of Pakistan is administered directly by Islamabad, which, just as British imperial officials did, has divided the territory into seven agencies, each with its own “political agent” who wields much the same powers as his colonial-era predecessor. Then as now, the part of FATA known as Waziristan and the home of Pashtun tribesmen offered the fiercest resistance. According to Paul Fitzgerald and Elizabeth Gould, experienced Afghan hands and coauthors of Invisible History: Afghanistan’s Untold Story (City Lights, 2009, p. 317):

If Washington’s bureaucrats don’t remember the history of the region, the Afghans do. The British used air power to bomb these same Pashtun villages after WW1 and were condemned for it. When the Soviets used MiGs and the dreaded Mi-24 Hind helicopter gunships to do it during the 1980s, they were called criminals. For the US to use its overwhelming firepower in the same reckless and indiscriminate manner defies the world’s sense of justice and morality while turning the Afghan people and the Islamic world even further against the US.

In 1932, in a series of Guernica-like atrocities, the British used poison gas in Waziristan. The disarmament convention of the same year sought a ban against the aerial bombardment of civilians, but Lloyd George, who had been British prime minister during WW1, gloated (Fitzgerald and Gould, p. 65):

We insisted on reserving the right to bomb niggers.

His view prevailed. The US continues to act similarly, but with the new excuse that our killing of noncombatants is a result of collateral damage or human error. Using pilotless drones guided with only minimal accuracy from computers at military bases in the Arizona and Nevada deserts among other places, we have killed hundreds, perhaps thousands, of unarmed bystanders in Pakistan and Afghanistan. The Pakistani and Afghan governments have repeatedly warned that we are alienating precisely the people we claim to be saving for democracy. When in May 2009, Gen. Stanley McChrystal was appointed as the commander in Afghanistan, he ordered new limits on air attacks, including those carried out by the CIA, except when needed to protect allied troops. Unfortunately, as if to illustrate the incompetence of our chain of command, only two days after this order, on Jun 23 2009, the US carried out a drone attack against a funeral procession that killed at least 80 people, the single deadliest US attack on Pakistani soil so far. There was virtually no reporting of these developments by the mainstream US press or on the network television news. At the time, the media were almost totally preoccupied by the sexual adventures of the governor of South Carolina and the death of pop star Michael Jackson. Our military operations in both Pakistan and Afghanistan have long been plagued by inadequate and inaccurate intelligence about both countries, ideological preconceptions about which parties we should support and which ones we should oppose, and myopic understandings of what we could possibly hope to achieve. Fitzgerald and Gould (p. 322-324) charge that, contrary to our own intelligence service’s focus on Afghanistan:

Pakistan has always been the problem. Pakistan’s army and its ISI, from 1973 on, have played the key role in funding and directing first the mujahideen and then the Taliban. It is Pakistan’s army that controls its nuclear weapons, constrains the development of democratic institutions, trains Taliban fighters in suicide attacks and orders them to fight US and NATO soldiers protecting the Afghan government.

The Pakistani army and its intelligence arm are staffed, in part, by devout Muslims who fostered the Taliban in Afghanistan to meet the needs of their own agenda, though not necessarily to advance an Islamic jihad. Their purposes have always included: keeping Afghanistan free of Russian or Indian influence, providing a training and recruiting ground for mujahideen guerrillas to be used in places like Kashmir (fought over by both Pakistan and India), containing Islamic radicalism in Afghanistan (and so keeping it out of Pakistan), and extorting huge amounts of money from Saudi Arabia, the Persian Gulf emirates, and the US to pay and train “freedom fighters” throughout the Islamic world. Pakistan’s consistent policy has been to support the clandestine policies of the ISI and thwart the influence of its major enemy and competitor, India. Col. Douglas MacGregor, US Army (retd.), an adviser to the Center for Defense Information in Washington, summarizes our hopeless project in South Asia this way:

Nothing we do will compel 125 million Muslims in Pakistan to make common cause with a US in league with the two states that are unambiguously anti-Muslim: Israel and India.

Obama’s mid-2009 surge of troops into southern Afghanistan and particularly into Helmand Province, a Taliban stronghold, is fast becoming darkly reminiscent of Gen. William Westmoreland’s continuous requests in Vietnam for more troops and his promises that if we would ratchet up the violence just a little more and tolerate a few more casualties, we would certainly break the will of the Vietnamese insurgents. This was a total misreading of the nature of the conflict in Vietnam, just as it is in Afghanistan today. Twenty years after the forces of the Red Army withdrew from Afghanistan in disgrace, the last Russian general to command them, Gen. Boris Gromov, issued his own prediction: Disaster, he insisted, will come to the thousands of new forces Obama is sending there, just as it did to the Soviet Union’s, which lost some 15,000 soldiers in its own Afghan war. We should recognize that we are wasting time, lives, and resources in an area where we have never understood the political dynamics and continue to make the wrong choices.

(3) We need to end the secret shame of our empire of bases. In March, NYT’s Bob Herbert noted:

Rape and other forms of sexual assault against women is the great shame of the US armed forces, and there is no evidence that this ghastly problem, kept out of sight as much as possible, is diminishing. New data released by the Pentagon showed an almost 9% increase in the number of sexual assaults, to 2,923, and a 25% increase in such assaults reported by women serving in Iraq and Afghanistan over the past year. Try to imagine how bizarre it is that women in US uniforms who are enduring all the stresses related to serving in a combat zone have to also worry about defending themselves against rapists wearing the same uniform and lining up in formation right beside them.

The problem is exacerbated by having our troops garrisoned in overseas bases located cheek-by-jowl next to civilian populations and often preying on them like foreign conquerors. For example, sexual violence against women and girls by US GIs has been out of control in Okinawa, Japan’s poorest prefecture, ever since it was permanently occupied by our soldiers, Marines, and airmen some 64 years ago. That island was the scene of the largest anti-US demonstrations since the end of WW2 after the 1995 kidnapping, rape, and attempted murder of a 12-year-old schoolgirl by two Marines and a sailor. The problem of rape has been ubiquitous around all of our bases on every continent and has probably contributed as much to our being loathed abroad as the policies of the Bush administration or our economic exploitation of poverty-stricken countries whose raw materials we covet. The military itself has done next to nothing to protect its own female soldiers or to defend the rights of innocent bystanders forced to live next to our often racially biased and predatory troops. “The military’s record of prosecuting rapists is not just lousy, it’s atrocious,” writes Herbert. In territories occupied by US military forces, the high command and the State Department make strenuous efforts to enact so-called Status of Forces Agreements that will prevent host governments from gaining jurisdiction over our troops who commit crimes overseas. The SOFAs also make it easier for our military to spirit culprits out of a country before they can be apprehended by local authorities.

This issue was well illustrated by the case of an Australian teacher, a long-time resident of Japan, who in Apr 2002 was raped by a sailor from the aircraft carrier USS Kitty Hawk, then based at the big naval base at Yokosuka. She identified her assailant and reported him to both Japanese and US authorities. Instead of his being arrested and effectively prosecuted, the victim herself was harassed and humiliated by the local Japanese police. Meanwhile, the US discharged the suspect from the Navy but allowed him to escape Japanese law by returning him to the US, where he lives today. In the course of trying to obtain justice, the Australian teacher discovered that almost fifty years earlier, in Oct 1953, the Japanese and US governments signed a secret understanding as part of their SOFA in which Japan agreed to waive its jurisdiction if the crime was not of national importance to Japan. The US argued strenuously for this codicil because it feared that otherwise it would face the likelihood of some 350 servicemen per year being sent to Japanese jails for sex crimes. Since that time the US has negotiated similar wording in SOFAs with Canada, Ireland, Italy, and Denmark. According to the Handbook of the Law of Visiting Forces (2001), the Japanese practice has become the norm for SOFAs throughout the world, with predictable results. In Japan, of 3,184 US military personnel who committed crimes between 2001 and 2008, 83% were not prosecuted. In Iraq, we have just signed a SOFA that bears a strong resemblance to the first postwar one we had with Japan: namely, military personnel and military contractors accused of off-duty crimes will remain in US custody while Iraqis investigate. This is, of course, a perfect opportunity to spirit the culprits out of the country before they can be charged. Within the military itself, the journalist Dahr Jamail speaks of the “culture of unpunished sexual assaults” and the “shockingly low numbers of courts martial” for rapes and other forms of sexual attacks. Helen Benedict quotes this figure in a 2009 Pentagon report on military sexual assaults: 90% of the rapes in the military are never reported at all and, when they are, the consequences for the perpetrator are negligible. It is fair to say that the US military has created a worldwide sexual playground for its personnel and protected them to a large extent from the consequences of their behavior. As a result a group of female veterans in 2006 created the Service Women’s Action Network. Its agenda is to spread the word that “no woman should join the military.” I believe a better solution would be to radically reduce the size of our standing army, and bring the troops home from countries where they do not understand their environments and have been taught to think of the inhabitants as inferior to themselves.

Dismantling the US empire would, of course, involve many steps. Here are ten key places to begin: We need to put a halt to the serious environmental damage done by our bases planet-wide. We also need to stop writing SOFAs that exempt us from any responsibility for cleaning up after ourselves. Liquidating the empire will end the burden of carrying our empire of bases and so of the opportunity costs that go with them: the things we might otherwise do with our talents and resources but can’t or won’t. As we already know (but often forget), imperialism breeds the use of torture. In the 1960s and 1970s we helped overthrow the elected governments in Brazil and Chile and underwrote regimes of torture that prefigured our own treatment of prisoners in Iraq and Afghanistan. Dismantling the empire would potentially mean a real end to the modern US record of using torture abroad. We need to cut the ever-lengthening train of camp followers, dependents, civilian employees of the Department of Defense, and hucksters, along with their expensive medical facilities, housing requirements, swimming pools, clubs, golf courses, and so forth, that follow our military enclaves around the world. We need to discredit the myth promoted by the military-industrial complex that our military establishment is valuable to us in terms of jobs, scientific research, and defense. These alleged advantages have long been discredited by serious economic research. Ending empire would make this happen. As a self-respecting democratic nation, we need to stop being the world’s largest exporter of arms and munitions and quit educating Third World militaries in the techniques of torture, military coups, and service as proxies for our imperialism. A prime candidate for immediate closure is the so-called School of the Americas, the US Army’s infamous military academy at Fort Benning, Georgia, for Latin American military officers. Given the growing constraints on the federal budget, we should abolish the Reserve Officers’ Training Corps and other long-standing programs that promote militarism in our schools. We need to restore discipline and accountability in our armed forces by radically scaling back our reliance on civilian contractors, private military companies, and agents working for the military outside the chain of command and the Uniform Code of Military Justice. Ending empire would make this possible. We need to reduce, not increase, the size of our standing army and deal much more effectively with the wounds our soldiers receive and combat stress they undergo. To repeat the main message of this essay, we must give up our inappropriate reliance on military force as the chief means of attempting to achieve foreign policy objectives. Unfortunately, few empires of the past voluntarily gave up their dominions in order to remain independent, self-governing polities. The two most important recent examples are the British and Soviet empires. If we do not learn from their examples, our decline and fall is foreordained.

an entertaining gold bug rant

US Govt Yuan Bond Threat to US$
Jim Willie, Market Oracle, Jul 29 2009

The tables are fast turning against the deeply indebted US Govt officials. USA Inc is in deep trouble. Its productive engines in both finance and industry are either wrecked or sputtering, even as its debt burden grows exponentially. Debt default litters the landscape. Next its sovereign bonds will be have to be sold to some extent outside the US$ sphere, which will put at great risk its stock, namely the US$ itself. Let’s call them US Govt Dragon Bonds. The custodians desperately seek creditors to supply much needed capital in order to fund the gigantic and growing US Govt debts, which by the way are grossly understated. The last resort is to monetize the US Treasury Bond issuance, a process well along. With the aid of the US$ Swap Facility, the US Fed has been able to secretly bid on US Treasury Bonds from foreign soil, have it appear like foreign bids, and conceal the continued and broadening monetization initiative. The US is boldly defying the creditor nations, printing money, and buying its own debt. When more fully revealed, the US$ will suffer the consequences. A sense of betrayal will surely come, much like discovery that the CIA has been flooding the globe with counterfeit $100 bills, or Wall Street has been flooding the globe with counterfeit Fannie Mae Bonds. Closer to home, it is akin to selling lemonade has been secretly watered down, or putting lawn mower clippings into the reefer batch before sale.

Andy Xie is a former colleague of Stephen Roach at Morgan Stanley, and now a board member of Rosetta Stone Advisors. He is an Asian financial expert. He believes the US Fed is locked in a tight corner, while the investment community suffers from a massive blind spot. He wrote, “The US has no way out but to print money. Dollar weakness reflects the market’s wavering confidence in the Fed. If the wavering continues, it could lead to a dollar collapse. Markets are trading on imagination. The world is setting up for a big crash, again.” Contrast with a comment made by Jeffrey Immelt, the CEO of General Electric. He believes the US should take a cue from the Chinese, who are growing fast, invest in industry, and make things. Wow, what wisdom! So the great financial engineering movement promoted by Greenspan and Wall Street mainly produced big bond fees and a wrecked banking system. Yes, without any equivocation or doubt, tragically. The financial engineering devices were based upon innovation in leverage and fraud without benefit of tangible production, serving as the vast illusory machinery atop a gigantic system totally dependent upon inflation. It imploded. Another alternative exists, beyond Xie’s radar. In addition to hidden monetization will come issuance of US Govt bonds outside the US$ sphere. When the news breaks, it will hit like a tsunami.

Talk is everywhere one turns that the US Govt has little recourse but to print money and cover their debts. Such moves shift the risk from the US Treasury Bond to the US$ in clear fashion. The Chinese Govt and Bank officials have been extremely vocal in the last few months, especially in the last few weeks. They abhor and are angry at both the rising US Govt deficits and the rising risk from direct monetization of those deficits in debt issuance. One could fill an entire page with warnings by the Chinese against US profligacy, reckless policy, and more. Every week contains major news wire stories, which do not receive proper attention in the US financial press. The Chinese are noticing even more dangerous developments, such as ineffective official stimulus, unproductive rescue of dead banks, endless credit derivative covered costs (AIG and Fannie Mae), entirely new programs with staggering price tags (health care), refused disclosure of disbursed Congressional funds, and tremendous waste, all of which not only result in gargantuan government deficits, but add risk to the US$ from a failure standpoint. The criminal angle is increasingly being discussed in the open. Goldman Sachs has exposure from Ultimate Insider Trading software tools that were stolen, now being torn apart in London and Germany for evidence discovery. Perhaps worse, the US Fed is under challenge by the US Congress (in charge of its contract) for disclosure and audit that could eventually reach the US Supreme Court.

The Chinese are in town to meet with the US Govt officials on continued debt support. The public will surely NOT be told what is discussed. One informed contact wrote this morning that the US lies as a terminal patient in the Intensive Care Ward, and seeks a death with dignity from its Chinese creditor doctors. The challenge to China is to protect its main core of US$-based reserves, and to protect future investments. Incremental commitments must come with new more concrete protective measures. The financial markets are NOT factoring this in! They seem to operate on a ‘Business as Usual’ assumption that is dying rapidly. In the past, the US Govt has actually boasted of a policy to inflate debts away by permitting inflation, and to anticipate debt repayment in cheaper dollars. In other words, permit the foreign creditors to take losses on the loan balance in real terms, a major betrayal. A double blow occurs when the US$ falls and US Treasury yields rise, in the foreign creditor accounts. THE FOREIGNERS RESENT THIS POLICY TO THE EXTREME. Harken back to the 1970 decade, when the Arabs quadrupled the crude oil price. They reaped huge new windfall profits, as they realized enormous trade surpluses. But they were duped into recycling surpluses into US Treasury Bonds, probably with reminders of US military protection. They suffered 30% losses on up to $100b in US Treasury Bonds invested. They remember. When US Govt officials promote a plan to inflate debts away, they are announcing a planned betrayal of foreign creditors. Nowadays, the US has much less financial power, prestige, and influence to force feed a policy to the creditor nations. The creditors are in revolt, are organizing, and have taken action at the grass roots level.

Times have changed in the entire psychology of credit support for the US Govt and US economy in a manner that is shocking, if not revolutionary. The creditor nations have begun to discuss new terms of continued support. Foreign creditors are noticing Uncle Sam groveling and in growing desperate and confusion. Behind the curtains, the Chinese have clearly struck some important deals. Rumors are ripe that in a March trip to Beijing, Clinton cut a deal promising Eminent Domain on US property in return for continued US Treasury Bond support. So maybe a shopping basket of thousands of homes, hundreds of commercial buildings, scads of idle industrial plants, and a few million acres of farmland are soon to be seized by the Chinese in exchange for US Treasury Bond debt. One must wonder. The US people, i.e. USA Inc shareholders, will be the last to know in this criminal syndicate environment, a hatched cloud from the Fascist Business Model. Seemingly on a quarterly basis, something must be handed to the Chinese for continued US Treasury Bond support. The US Treasury officials and US Fed have lied through their teeth about avoiding direct monetization. If the Chinese have half a brain individually, they can see the back-door monetization with collusion of foreign central banks. The Chinese are in town for the next concession. One can only wonder. Well, the Jackass has a good idea of what comes next. It is just a matter of time.

The concept can be described in very simple terms. The vehicle is devastating in its effects and consequences. What are they exactly? The US Govt might soon issue bonds, except not in US$ denomination, but rather in Yuan currency. Out of the gate (with debt signposts), the US Govt must purchase gigantic swaths of Yuan and pay with US$. The result is a quantum decline in the US$ exchange rate relative to everything holding the Yuan together. The Chinese decided in 2005 to tie their Yuan currency to a basket of currencies, led by the US$, the Euro, the Yen, the British Pound, and a small additional group. So the direct purchase of Yuan by the US, the newest upcoming member of the Third World, will have numerous profound effects to lift other currencies. The direct consequences of US Govt Yuan Bonds would be vast, visible, lethal: the US$ exchange rate would fall with each debt issuance; the loan balance in US Govt debt would rise with a declining US$; the Yuan currency would be further established as a global reserve alternative; continued trade settlement in Yuan terms would be enabled; rise in entire cost structure to the US economy from commodity pricing. The risk of US Treasury Bond default grows with each passing new issuance. The Chinese want protection and assurance against the falling US$ and even the growing principal risk of US Treasury Bonds. Higher bond yields mean principal bond loss. Both currency and bond loss mean a powerful combined loss. Beijing wants protection and security in exchange for continued debt support. A Yuan-based bond issuance by the US Treasury, sold by the US Fed, would accomplish this to some degree. In a few years time, if the US$ exchange rate is 15% to 30% lower, the loan balance in Yuan terms would be unchanged. The cost to the US Govt grows by that percentage however. If the yield rises, then protection can be locked by means of making the debt securities of shorter maturity, like two to five years.

The Chinese have already been shifting their US Treasury Bond portfolio from long-term to short-term maturity. This has been the driving factor behind the rising 10-year US Treasury yield and the steeper yield curve. Perversely, the US banks enjoy a benefit. They can amplify their Carry Trade, borrow at the short end, invest in the long end, pocket the 2% to 3% difference, and even store their booty of bonds at the US Fed itself. This is one reason the US banks are not lending to Main Street firms and households. They are too busy playing the US Treasury Bond Carry Trade under the aegis of the discredited US Fed. And the topic of Bank Consolidation has not even been raised, whereby the big US banks reverse the carry trade by buying up distressed regional banks. Maybe the Chinese will become involved in that racket as a fringe benefit. Maybe they have been tipped off to purchase stock in the giant pharmaceutical firms who will reap windfall profits as the swine flu is spread by means of faulty vaccines and forced inoculations. The US Govt Yuan Bond will be a significant blow to the US financial sector from a psychological standpoint, a deep undercut to US supremacy and arrogance. China has not been able to supplant the US$ from the top down within banking circles. The Yuan Bond will serve as the sword that shatters the highest tables finally, their first phalanx attack. The grassroots approach in international contract trade settlement, the bottom up, has already seen much progress. In time, the US$ fortress will be pretty, shiny, and full of cheesy fake marble, as it washes away to the sea. Less US$ demand will be seen in international trade contract settlement as a result, a key undermine to the US$. Combine with more sales of US$ to purchase Yuan necessary for the new bonds, to make for a deadly mix. We are talking about potential avalanches of US$ sales. The US$ exchange rate is at very high risk.

When other foreign creditors observe the US Govt Yuan Bond completion, they will want to execute the same. Prepare on the second round for Euro Bonds, Yen Bonds, maybe even Ruble Bonds and Loonie Bonds, as the Europeans, Japanese, Russians, and Canadians will want protection. They can demand it. The Chinese are the primary spearhead against the US$ and its primacy as global reserve currency. Other nations will follow. The impact of the US Govt Yuan Bonds will be doubled when additional issuances are ordered and executed. The US Fed will therefore morph into an agency that also purchases Chinese Yuan currency. Usually that means Chinese Govt sponsored debt securities, but also Chinese Corporate debt securities. Later, the Chinese will figure it out, and issue Mortgage debt securities, even Automobile and Credit Card debt securities. Thus the practical impact will be vast development stimulus for the Chinese Economy, as the US economy will slide into a Third World zone of under-development, deprivation, and destitution. China will assume the role of a predatory creditor nation, with the full privilege of either influence or abuse at their disposal. Reality thus strikes soon. Welcome to the post-Lehman era, with gratitude to Wall Street. Never lose sight of the role the US Fed has had in the destruction of the financial, economic, and implicitly political structure of the US. Some precedent is forming. The US-based discount retail giant chain Wal-Mart has sold $1.1b in Samurai Bonds, denominated in Yen currency. The bonds hit the Japanese market in two tranches comprised of ¥83.1b in fixed-rate bonds and ¥16.9b in floating-rate bonds. The fixed-rate bond coupon was set at 55 basis points above prevailing yen swaps, while that of the floating-rate bonds was set at 60 basis points above the six-month LIBOR offered rate for yen. So Wal-Mart must be watchful of the US$ exchange rate relative to the Yen. US corporations will watch and learn, perhaps with a certain amount of dismay and trepidation. Government debt will follow like night follows day. With Japanese bonds called Samurai Bonds, one should expect the Chinese bonds to be called Dragon Bonds. The name is suitable, since the hot dragon breath will burn US$ paper globally.

The Japanese are bracing politically for a shun of typical obedient US Treasury purchases, or at least an altered course. In May a prominent Japanese politician called for no more loans to the US Govt based in US$, only in Japanese Yen. At the same time, some influential currency traders in Tokyo predicted that the US$ exchange rate would fall by 50% against the yen. The benefit to the US in both business and finance has come at a chronic Asian heavy cost. To shore up the shaky US Fed primary bond dealer crew, they signed up two Canadian banks. What suckers! They also signed up Nomura Securities in Tokyo as primary dealer, making it the third firm to join the network of securities firms that underwrite the US Govt debt this year. Nomura was a primary dealer from 1986 through 2007, when it ended the role following a $656m loss on US home loans. They are back for more losses. We have come a long way from January when accusing China of currency manipulations, when accusing them of saving too much money and inflicting damage on the US economy, both absolute utter nonsense and extremely harmful propaganda. The US Govt officials and US bank officials have a remarkable ability to blame other nations for their own incredibly self-destructive policies and track record. These actions are without precedent, to insult and lay blame improperly on a creditor nation when the US insolvent financial condition teeters toward bankruptcy, held up by more interventions, more fraud, and more phony money. Such accusations were delivered against China, immediately after the historic bank system breakdown in the US tied directly to lending standard insanity for US home loans, insane bond leverage and packaging by Wall Street firms, corrupted debt rating agency with profound collusion, and a US Fed central bank totally asleep at the wheel for half a decade. The entire financial system within the US suffered a near fatal heart attack from a designed inflation policy combined with total carte blanche on reckless, predatory, and often illegal bank practices. The US bankers have since declared numerous errors committed, which is a euphemism for grand fraud. Even the London economist clowns admit a collective error from excess enthusiasm, a euphemism for grotesque structural defects and reckless policy errors.

Yet in the wake of all this failed policy, repeated crises, deep embarrassment from falling off the pedestal, US leaders saw fit to accuse China of currency manipulation, excessive savings, and irresponsible export of boatloads of funds into the US debt and inflation machinery. If the truth be known, the Chinese merely served as a device to provide the excessive debt collateralized by the US housing sector a round trip back to the US economy. The US households used the home equity funds to spend on Chinese exported finished products. The Chinese cooperatively and dutifully recycled their trade surpluses into US Treasury Bonds and US Agency Mortgage Bonds. Creditors led by China are now angry enough at baseless accusations in the past to make tougher rules for continued credit support. The blame game is the grand footnote in the mythology chapters, after events go awry. The Chinese obediently permitted the US debt machinery to provide the desired destructive impetus to support the US economy, all at US request. Between the years 2002 and 2004, US firms at the urge of the US Govt installed over $23b in direct foreign investment. The battle cry for the US economists and bankers was to realize benefits within the US economy by means of ‘Low Cost Solutions’ in reckless heretical style. It served as the mythological ideological chapter of those years. How did that work out, Mr Greenspasm? How did that work out, Mr Rubin, who pushed for the Chinese Most Favored Nation status? How did that work out, Mr Paulson? The US not only has told mythology stories for years, but has integrated them into the US economic fabric and the US mindset. Ignorant and untrained, the US sheeple continue to accept the heretical drivel as fact, since the clowns uttering policy have PhD and Wall Street pedigrees of highly questionable value. Past performance, nearly total failure, is not relevant. Hmm! The latest mythology chapters have been centered on the nonsensical Green Shoots and a contradictory Jobless Recovery, both false, both baseless, both convenient.

The credit market seems asleep once again at the wheel. A horrible US Treasury auction just was completed on Wednesday morning, with dreadful bid action, and surely too much volume. A whopping $250b in official US Treasury auctions is planned for this current week, which must seem like a misprint. That volume requires greater monetization, greater stock losses, or newer innovative programs to encourage foreign creditors. The bigger apparent misprint is the US Govt deficits. The Wednesday auction was for $39b, almost four times a typical entire month from over a year ago. It fetched only 1.92 bid/cover ratio, when a 2.20 ratio had been seen recently, with 2.689% in paid yield. One must be a moron to find US Treasury Bonds a safe prudent investment these days. Then again, there are plenty of blockheads who still manage funds. A few years ago these same nitwits bought mortgage bonds since they paid a higher yield. Typically, when the US Treasury Bonds lose value, the principal beneficiary is gold. Today, the financial markets are still celebrating an increase in home sales and a home price index that is no longer falling. They overlook the tremendous hidden home supply covered up by the banks, in REO properties withheld from the market. They overlook the miserable US Treasury auction, with more bad auctions to come. They overlook the 96% decline in US corporate profits since Oct 2007, in a gutted US economy. They overlook the skyrocketing US Govt debt finance needs, sure to continue even worse. They overlook the global revolt against the US$ as reserve currency, where broad initiatives have considerable support, enough at least to chip away at the throne for the US$ trade settlement. They overlook the ineffective stimulus to date, and the criminal disbursement of Congressional funds, most likely for Wall Street benefit purposes. They overlook the nearly universal global debasement (if not destruction) of money and the financial structures, and the failed central bank franchise model. So, easily translated, the gold price is a bargain made even cheaper by a $10 discount offered today. Paper money is gradually being recognized as ruined.

The gold price shows a clear rising trend when viewed from a certain perspective. With a price discount today, it has come down to the 20-week moving average in a move toward greater stability. It has also come down to a clear but unorthodox uptrend line of support, with five touch points to render it meaningful. Pressure mounts on the 1000 resistance level. What will take the gold price finally over 1000? Very difficult question. Certainly, some kind of disturbance to the system, something factored incorrectly in recent months, a shock, a scandal. Perhaps a breakdown in an important sacred structure like the COMEX for gold or the US Treasury auction system. The billionaires of the Arab world, who largely control far more Western banks than people notice, have been deeply involved with independent third party gold bullion bank audits since the spring. Many gold accounts have been sold and replaced illegally by paper certificates by New York and London, the epicenter of financial fraud and theft. The blood on the floor has been cleaned up quietly. With certainty, threats to aggrieved parties have been delivered. The pressures mount toward a breakdown. A sequence is clear. The gold cartel digs in its heels and defends a given level. They dump paper gold on the market periodically in defense of the indefensible. The sequence has the strange characteristic of lower highs and higher lows each time. A resolution is demanded. The gold cartel is fast running out of physical gold with which to fill their rifles and artillery cannons. Being shot with a paper bullet from a rifle surely hurts, but the effect to stop a rush of angry investors cannot be stopped by paper gunfire. Beware of upcoming shocks.

cockburn manufactures an entire case against the iranians

(In my opinion, Counterpunch is simply a vehicle for MI6 agents of influence in the USA. I am not a big fan of the phony ‘Dr John Coleman, ex-MI6 man’, but the Cockburns are a perfect example of what he describes in his book ‘Conspirators’ Hierarchy: the Committee of 300′ – RB)

Victims of a Covert Tit-for-Tat War
Patrick Cockburn, Counterpunch, Jul 30 2009

In the latest act of the grim drama surrounding the fate of the five hostages, officials in London have told the families of two of the guards, Alan McMenemy, from Glasgow, and Alec Maclachlan, from South Wales, that the two men are probably dead. The bodies of two other guards, Jason Creswell and Jason Swindlehurst, were delivered in caskets through an intermediary to a Baghdad police station on Jun 19. Creswell, 39, of Glasgow, and Swindlehurst, 38, of Skelmersdale, Lancashire, were both found by an inquest in the UK to have “died from gunshot wounds”. A source in Iraq claimed the two men had been killed some two-and-a-half months earlier, which would put their deaths some time in early April. Since Peter Moore, 36, a computer consultant, and his four security guards were seized in the Iraqi finance ministry by 40 men dressed as policemen two years ago, it has never been clear who was holding them and where they were being kept. The kidnappers belong to the Asaib al-Haq militant group, which split from the Mehdi Army militia of Muqtada al-Sadr, which had earlier declared a ceasefire. Their main demand has been the release of the movement’s chief, Qais al-Khazali, who had once been Sadr’s spokesman, along with his brother Laith and other leaders who were captured in Basra on Mar 20 2007. Two months later, the five Britons were seized in a meticulously organized raid. British security sources believe that at some point the five British hostages were held in Iran, which shares a highly porous, 900-mile long border with Iraq. Consideration was given to launching a raid to free them, but the plan was abandoned as too dangerous and unlikely to succeed. Negotiations with the kidnappers were all the more difficult because Britain did not want to make concessions and was, in any case, in no position to do so, since Qais al-Khazali and the prisoners Asaib al-Haq wanted released were held by the US, which had no wish to let them go because, when the Khazali brothers were captured, they had in their possession a 22-page document, allegedly prepared by the Quds Force, part of the Iranian Revolutionary Guard, giving details of the US defenses at their camp at Kerbala. This was the target of an expertly planned raid in which five US soldiers were killed, though the attack may have been a botched operation to kidnap them.

In the past, it has been Sunni Arab groups in Iraq who have most often killed their foreign prisoners, often filming their beheading and death agonies. It is not clear why Asaib al-Haq should have killed four of their five captives. A member of the Sadrist movement in Baghdad, with knowledge of actions of the kidnappers, says that at first they wanted the release of 150 members of their movement. He adds that they were first frustrated by the refusal of the British embassy in Baghdad to negotiate and “believed that British has tortured detainees from this group, and one of them had died during torture”. They then killed two of their hostages. “The Iraqi government was on the sidelines and negotiations had been taking place directly between the British embassy and the kidnappers for five months,” he said. Iranian intelligence supported Asaib al-Haq as one of its many assets in Iraq which could be used, when necessary, against the US. Iran had always had influence within the Sadrist movement, though its expansion was opposed by Muqtada al-Sadr. “In 2005, the situation changed with the Sadrists,” says an anti-Iranian Sadrist militant whose nom de guerre is Hussein Ali. “The Iranians became more involved with the help of important advisers to Muqtada. Iranian policy was to offer aid in the shape of financial support, modern weapons and good communications systems. Once lured into accepting them, the recipient cannot do without them.” At this time, Iranian intelligence was offering $800 to anybody who would attack the US or assassinate Iraqi figures, says Hussein Ali. The Mehdi Army militiamen were unpaid, but the Iranians were paying salaries and offering training in Iran. “They give the volunteers $300 to $400 a month, train them to use weapons and fight the Americans.” These subsidies have been reduced since it became clear to Iran that US military forces are leaving Iraq.

Moore and the four security men from the Canadian company GardaWorld were the victims of a tit-for-tat covert war waged by US and Iranian intelligence services in Iraq. This reached a peak of intensity in 2007, with Iranian officials and diplomats being abducted in Baghdad and Arbil. British marines and sailors were seized by Iranian Revolutionary Guards in disputed waters in the Persian Gulf. This subterranean conflict is now gradually de-escalating as Obama seeks to reduce points of friction with Iran and US combat forces leave Iraq. Five imprisoned Iranian diplomats were released three weeks ago. Improved US-Iranian relations seemed to open the door to a prisoner swap because, under the Status of Forces Agreement signed between the US and Iraq last year, all US captives are to be handed over to the Iraqi government. The government is eager to bring groups such as Asaib al-Haq into constitutional politics, but cannot do so while the movement holds hostages or its leaders are in prison. Laith al-Khazali was released by the US military in June as part of political reconciliation and, though hostages were not mentioned, Asaib al-Haq was expected to respond. When they did so 10 days later, it was by returning the bodies of two of their captives. Now it is believed that only Moore may be alive of the five originally captured, but the precise circumstances which led to the deaths remains a mystery. The most important demand of the kidnappers of the British hostages has been the release of Sheikh Qais al-Khazali, the leader of Asaib al-Haq, who has been imprisoned by the US since early 2007.

at least the guardian don’t say it was the iranians

Iraqi government officials may have
colluded in British hostages’ kidnap
Meena Muhammed, Maggie O’Kane, Guy Grandjean, Guardian, Jul 30 2009

An investigation into the kidnapping of five British men in Iraq has uncovered evidence of possible collusion by Iraqi government officials in their abduction, and a possible motive: to keep secret the whereabouts of billions of dollars in embezzled funds. A former high-level Iraqi intelligence operative and a current senior government minister, who has been negotiating directly with the hostage takers, have told the Guardian that the kidnapping of IT specialist Peter Moore and his four bodyguards in 2007 was not a simple snatch by a band of militants but a sophisticated operation, almost certainly with inside help. Only Moore is thought still to be alive. Witnesses to the extraordinary operation which led to the abductions have also told us that they have been warned by superiors to keep quiet. one of the sources said:

This operation was on a state level, not al-Qaida. Only the state has the capability to carry this out.

The Guardian can also reveal that there was a sixth westerner who was working with Moore at the time of the kidnap. The man, whose identity is known to the Guardian, managed to narrowly avoid being captured by hiding in a toilet at the Iraqi ministry of finance, where the abductions took place. Over the past 10 months the Guardian has interviewed senior Iraqi figures and eyewitnesses as well as the former British military officer who investigated the kidnap for the men’s employers. Their accounts allege that the hostage takers had contacts in the Iraqi government, and also that officials in the ministry of defence warned off witnesses to the kidnap. The investigation has also uncovered compelling evidence that the one of the key motives behind the kidnappings may have been the nature of the work the hostages were doing in fighting massive corruption in Iraq’s government ministries. Moore was employed to install a new computer tracking system which would have followed billions of dollars of oil and foreign aid money through the ministry of finance. The Iraq Financial Management Information System was nearly complete and about to go online at the time of the kidnap. The senior intelligence source said:

Many people don’t want a high level of corruption to be revealed. Remember this is the information technology centre, this is the place where all the money to do with Iraq and all Iraq's financial matters are housed.

Last month the bodies of two British security guards, Jason Cresswell and Jason Swindlehurst, were handed over to the British embassy in Baghdad. And on Wednesday this week Gordon Brown said that the remaining two guards, Alan McMenemy and Alec MacLachlan were very likely to be dead. Moore is still believed to be alive, although nothing has been heard from him for months. Today Avril Sweeney, Peter Moore’s mother, said of the Guardian investigation:

This is the only thing that makes perfect sense, the only thing that has ever made perfect sense since the kidnap began. If this evidence is correct then there are massive questions that need to be answered. There is no way that 40 armed policemen would be able to storm into that building and take my son. This was all planned. Everything has been so tightly controlled. I appeal to the Iraqi government to bring about the safe release of my son.

A Foreign Office spokesman today told the Guardian:

This is a highly complex and challenging case, illustrated by the scale of the original abduction. There has been widespread speculation in Iraq about many aspects of the case. We have never ruled out the possibility that the hostage takers may have received advance notice or other assistance from sympathisers who were aware of the hostages’ visit to the ministry that day. But since the beginning we have worked closely with Iraqi counterparts at all levels that we can trust, including the police, and continue to have excellent co-operation with them.

Intelligence officer claims Iraqi officials
may have colluded in kidnap of Britons
Meena Muhammed, Maggie O’Kane, Guy Grandjean, Guardian, Jul 30 2009

It was about midday on May 29 2007 when between 80 and 100 men dressed in the uniform of the special commandos at the Iraqi ministry of the interior calmly blocked off all the major roads leading to the ministry of finance’s technology centre in Baghdad. An estimated 19 Toyota Land Cruisers, known to be used only by the ministry of the interior, drove through armed roadblocks and came to a standstill in front of the building where Peter Moore, a British computer specialist, another analyst and four security guards were working. Moore, who had recently arrived in the country from voluntary work in Guyana, was in the process of installing sophisticated software for the US state department that would have tracked millions of pounds of international aid money, and the estimated $50b Iraqi annual oil revenue, as it was disbursed through the ministry of finance. Unknown to the kidnappers, two intelligence officers were parked opposite the centre, outside an outpatients’ clinic. Through an intermediary, a former high-level intelligence source, one of the officers described the operation to the Guardian:

The cars started coming down the street and surrounding the ministry. The cars were marked ‘ministry of the interior,’ they are Toyota Land Cruisers, they belong to the ministry of the interior. The operation was well planned and they were carrying Kalashnikovs. One group came out with two of the hostages. They put them in the first car. They weren’t hooded or handcuffed. Then they brought the other three men out. Then they brought out the men’s belongings, their briefcases and rucksacks. They put those things in a separate car. People started gathering around. It was near the al-Rafidain Bank on Palestine Street. The people were gathering around and the kidnappers were shouting: ‘Go home now, this is nothing do with anyone. Do not look, this has nothing to do with you.’

The kidnappers had passed through the armed checkpoint at the centre’s gate without a shot being fired and conducted the entire kidnap operation in under 15 minutes. Witnesses at the scene, who have never been interviewed before, confirm that it was a huge, highly militarised operation. Whahib Allawi said:

I was at the reception desk when the kidnappers entered the building. There were so many of them, all heavily armed. They all went upstairs and the employees began to run out of the building. They kept shouting ‘Sit down! Sit down!’ to everyone they saw. They kicked anyone who was in their way.

Haider Sa’adoon, a technician also working at the centre, said:

One of the kidnappers burst into my office and said: ‘Stay where you are and don’t move!’ It was terrifying. You could tell there were many of them, because of the sound of the running footsteps. It made so much noise.

According to the same high-level intelligence source, a kidnap operation of this kind would have been impossible without government assistance. After the hostages were taken, the two intelligence men, who were working for the Iraqi ministry of defence, followed the convoy as it took off at high speed through the city, cutting through Palestine Street and Beirut Square towards al-Sha’ab stadium. The two intelligence operatives were subsequently told by the Iraqi defence ministry to keep quiet about what they had seen. The Guardian’s intelligence source said they were ordered not to proceed with the surveillance:

We thought the cars might be heading to the ministry of the interior, which is very near, but they didn’t, they passed the al-Sha’ab stadium and were heading towards Luna Park. No one was stopping them at the checkpoints, they were all in ministry of the interior cars, who would dare to stop them? We couldn’t keep up. This operation is one only a government can do. Not al-Qaida. Al-Qaida might be able to get hold of three or four cars, but they can’t bring more than 20 commando cars and all those uniforms. Only the state has the capability to carry this out. The ministry of defence called us and told us: ‘You must forget all about this subject, completely forget it. Act as if you know nothing and tell your colleagues not to say a word.’

After the kidnappings GardaWorld, which employed the four security men, Alan McMenemy, Alec MacLachlan, Jason Cresswell and Jason Swindlehurst, conducted its own investigation into the abductions. Paul Wood, a former British army officer, spent 10 months compiling a report and believes that there was some level of collusion, that the kidnapping was unprecedented and “too perfect”. Wood, who has now left Baghdad and is currently working in Afghanistan, said:

This kidnapping took place on government property, in the ministry of finance building where there was security in place. It would make sense to think that there was someone on the inside telling the kidnappers when to come, what to expect and how to deal with any security issues they were going to face. It strikes me as unlikely that there couldn’t have been some kind of collaboration for the convoy of that size: 19 vehicles with 50 people in police uniforms driving in through the gates. None of us had seen anything like it before. We always operated on the basis that our people were safe once they got inside a government ministry. This kidnapping was the first of its kind and after that we changed the way we worked, how our security detail worked completely.

The suggestion that officials in three government ministries may have been involved and helped the kidnappers has been strongly denied by the Iraqi government and the country’s national security adviser, Dr Mowaffak al Rubaie. But he told the Guardian government ministries were “not infallible” and that the ministries had been infiltrated by extremists. It is the alleged corruption in Iraq and its ministries at the time of the abductions that have now come into focus. Judge Radhi Hamza al-Radhi, former commissioner of the Commission of Public Integrity in Iraq, testified to the US Congress on Oct 4 2007:

The cost of corruption that my commission has uncovered so far across all ministries in Iraq has been estimated to be as high as $18bn.

He had fled to the US in Aug 2007 after his family’s home was targeted in a rocket attack. The computer system Peter Moore was in the process of implementing, known as the Iraq financial management information system, was nearly complete and about to go online. Vance Jochim, who was the chief auditor and a US adviser for the Commission of Public Integrity based at the US embassy in Baghdad, said:

The new system would provide more transparency and accountability over the oil and other revenue handled by the finance ministry, which had been resisting its implementation for nearly two years.

Judge al-Rahdi said:

The ministry of finance was the centre for the tracking system. It was linked to 11 other ministries. They started using the program for a few months, but after the kidnapping of Peter Moore the ministry of finance immediately stopped the system. As a result all the other Iraqi ministries were not able to keep the program going.

Eight months after the kidnappings, the only other location with a full record of the Iraqi government’s financial transactions and records of possible financial misconduct, Iraq’s Central Bank, was destroyed in a fire. The subsequent investigation found that it was arson. The intelligence source said:

Many people don’t want a high level of corruption to be revealed. Remember this is the information technology centre, this is the place where all the money to do with Iraq and all Iraq’s financial matters are housed. The centre is linked to the Americans and all the money transfers. Everything, right down to the last penny, is in that centre.

Vance says the track record of those involved in helping to find Iraq’s missing millions is not a good one. The woman who invented the automated computer tracking system that Moore and the others were sent to install and teach left the country without notice, because people had begun asking about her at the ministry of finance and her security firm, Kroll, believed she was on the list for attack. Since the kidnappings, four hostage videos have been released by the kidnappers calling for a response to their request to have a number of prominent members of a radical Shia group, the Righteous League, released. In the first video, on Dec 4 2007, they also made reference to a financial motive:

They have confessed and given details of plans in which they came to loot our wealth under the fake cover of being consultants at the finance ministry. We will show details of their confessions later.

According to people at the ministry there was no need for confessions. Everyone down to the receptionist knew the work that Moore and his bodyguards were there to do. The 12 female students he was teaching knew he was there to install the management information system. A subsequent video shows the hostages looking increasingly desperate and calling for their release. However, the last two have only featured Moore. He is believed to still be alive and there are some in the Iraqi government, including the national security adviser, who have worked hard to try to bring the hostages back safely. He says:

They came to help build Iraq. The men who were kidnapped, they were helping and building and setting up institutions for us. And they were taken away. We feel very bad about that.

It had always been thought there were five westerners at the ministry of finance in Baghdad on the day of the kidnap in May 2007. But the Guardian can confirm that a sixth man, a US IT consultant working for BearingPoint, was also with the five Britons when the hostage takers struck. According to a former senior intelligence official, the sixth man, whose name is known to the Guardian, was in the toilet at the time and was narrowly missed by the kidnappers. the intelligence source said:

The police were there and the guards were there, they said there was another man, they did not take him, he was at the bathroom. I was told by the guard one foreigner stayed, they had contacted his employers. They came to take him away accompanied by security.

It is believed that the sixth man left Iraq soon after the kidnap.

rosenbaum organ transplant racket was ‘an open secret’

How Kidneys Are Bought And Sold on Black Market
Rebecca Dube, Forward, Jul 29, 2009 (abridged)

Levy Izhak Rosenbaum is looking at a possible five-year federal prison sentence. Rosenbaum was arrested Jul 23, and charged with conspiracy to transport human organs. It is perhaps the most bizarre subplot of the FBI’s massive money laundering and corruption investigation that yielded 44 arrests in New Jersey and Brooklyn, including the mayors of Hoboken, Secaucus and Ridgefield; two state assemblymen; five rabbis, and numerous other public officials. According to the criminal complaint filed in the US District Court of New Jersey, Rosenbaum told an undercover federal agent on Jul 13 that he’d been brokering kidney sales for 10 years from his home in Brooklyn. According to the complaint, Rosenbaum said, before assuring the undercover agent that he’d brokered “quite a lot” of kidney transplants, including one two weeks prior to their conversation:

I am what you call a matchmaker.

Rosenbaum is the first person charged in the US with trafficking in live human organs, medical ethicist Arthur Caplan said. His arrest has illuminated a dark side of the medical world, where the desperately poor sell body parts to the desperately ill, brokers make a profit and medical centers turn a blind eye. Caplan, who serves as director of the Center for Bioethics at the University of Pennsylvania and is co-directing a UN task force on international organ trafficking, said:

There is probably more of this going on. It is a very lucrative business.

The exposure of the organ-trafficking operation surprised most of the medical establishment, who knew of such activity happening overseas but not in the US. But Rosenbaum’s alleged business was an open secret for years among a certain community of Jewish transplant seekers. Robert Berman, founder and director of the New York-based Halachic Organ Donor Society, which encourages organ donation among observant Jews in the US, Israel and other countries, said:

Over the years, dozens of people have asked me to help them get in touch with ‘Isaac, the organ broker from Brooklyn.’ I always refused to do so.

Berman said that while he personally supports the idea of changing the law to allow people to get paid for giving someone else a kidney, he does not condone any illegal activity. He said:

The black market is obviously not ideal. People get ripped off.

Berman founded the Halachic Organ Donor Society to combat the notion that Jewish law does not permit organ donation. Because of that misperception, he said, Israel has one of the lowest organ donor rates in the world, which is why many Israelis travel to the US in hopes of finding a match. Berman said:

Jews have no problem putting themselves on the list to get an organ, but when it comes to donating, they have a lot of religious reasons not to.

An expert in the organ black market said that Rosenbaum was the main US broker for an international trafficking network. Nancy Scheper-Hughes, a professor of medical anthropology at the University of California, Berkeley, said she told the FBI about Rosenbaum’s operation back in 2002. Scheper-Hughes did not respond to interview requests; however, she told the NY Daily News and WNYC public radio that Rosenbaum recruited impoverished kidney sellers from Moldova, where, she said, she visited a village where 20% of the men had sold a kidney. According to the criminal complaint, Rosenbaum told potential clients that the kidney sellers came from Israel. Scheper-Hughes said that the kidney sellers described Rosenbaum as a thug who threatened them with a pistol if they expressed hesitation once they arrived in the US for the operation. Medical centers interview potential transplant donors to make sure they are suitable matches, and a psychological screening is usually included, as well. Because paying for organs is illegal, Rosenbaum would create fictional relationships between the recipient and the seller, according to the criminal complaint, and would coach both of them on what to say. Rosenbaum said, according to the complaint:

I put together the story. Could be neighbors, could be friends from shul, could be friends from the community, could be friends of his children, business friends.

More careful screening probably would expose fake relationships, Caplan said, but clearly that didn’t happen, as Rosenbaum allegedly operated his trafficking ring successfully for a decade without detection. Caplan noted that medical centers make about $100,000 per kidney transplant, adding:

Some hospitals just don’t care. They want to make the money and do the transplant, they’re not picky.

Caplan opposes legalizing the sale of human organs, saying that exploitation is inevitable no matter what the legal status. Medical centers should standardize and tighten their donor screenings, he said. According to Caplan, the going rate for kidney sellers ranges from $500 in India to $10,000 in Israel. Caplan said:

The people who sell are almost always incredibly poor. They’re usually up to their eyeballs in debt. The people who are involved in this are past the point of desperation. They’re not making some sort of calculated decision.

The black market for kidney donation is thriving because demand far outstrips supply. More than 80,000 people are on the kidney transplant waiting list in the US, and every year about 4,500 die while waiting, according to the National Kidney Foundation. Last year, 16,517 transplants were performed in the US: 10,550 with cadaver organs from people who died, and 5,967 from living donors.

an interesting attempt to describe the syrian jews in jersey

An Inside Look at a Syrian-Jewish Enclave
Larry Cohler-Esses, Forward, Jul 28, 2009

At the Deal Synagogue on the final Saturday afternoon of July, congregants were treated to the spectacle of a revered rabbi of the Syrian community disavowing his son. Referring to the third meal of the Sabbath, when many observant Jews in the community join their rabbi for a session of learning, one community leader confided:

It was at the Seudat Shlishit. Without using the word ‘disown,’ he said his son was no longer welcome in his home.

According to two sources, the senior Dwek delivered a blistering speech at the gathering, in which he denounced the actions of a Jew being an informant against fellow Jews and requested the community’s prayers for him in a time of suffering. And then, as if to underline the point, the elder Dwek taught a class together with Nachum, the man caught in his son’s sting. Reached by phone, Dwek declined to comment. Deal, N.J., is a quiet and bucolic seashore summer community for the prosperous, largely Brooklyn-based Syrian-Jewish community of about 75,000. But that tranquility has been buried in a din of rumor and gossip since money laundering charges were lodged against the three Syrian rabbis, who are out on bail. There is a deep historical irony to these arrests: Solomon Dwek took down the rabbis from the two main rival families whose leadership struggle divided the community some 15 years ago. And in damaging these pillars of the community, some say, Dwek may have strengthened the ultra-Orthodox “black hat” stream that has been a rising force, at least among the rank and file. Others see it, to the contrary, as offering an opening to the community’s more liberal wing, since the rabbis arrested were all strong traditionalists, if not black hat themselves.

As Sephardim, the Syrians don’t fit neatly into the religious denominations that define their Eastern European counterparts, but their fealty to their rabbis is profound. So talk of the federal case is everywhere: at the Casino Beach Club abutting the Jersey Shore, where many gather to play cards and swim in the football-field-sized pool; in the large homes where extended families gather for meals in a summer ritual, and in restaurants, shopping malls and on web sites. Not surprising for a community that reveres its rabbis as few others do, there were declarations of solidarity. Activist Albert Edery wrote in a lengthy letter of support on the web site symall.com, a popular community bulletin board:

We should stand by our Rabbis in solidarity and let what ever happened today play out.

But that was not the only reaction. A different Web site, enclavement.com, maintained by present and former members of the community with a bent clearly more critical, offered a faux news report with the lead:

A heavy blow was dealt to the enclave yesterday, as news spread that some of the community’s most trusted, religious, and morally upright figures were guilty of the most serious crime imaginable: getting caught. This public embarrassment has engendered a mass outpouring of outrage and condemnation.

This was precisely the type of reaction bound to enrage and frustrate community members mortified at the notion that the arrested rabbis might, as a result of their positions, be seen as embodying the community’s own values. It is an image that, to some extent, has been reinforced by public commentary on the community even before the events of late July. A recent Broadway play by David Adjmi skewered the Syrian-Jewish community, his former home, as corrupt and materialistically obsessed. And two years ago, a NYT Magazine piece by Zev Chafets conveyed a similar theme. One important activist argued:

Their alleged actions in no way characterize this community. Once in a while, you may have an Eddie Antar. This has more to do with the Haredi community. The regular community feels their traditions have been hijacked.

As it happens, Solomon Dwek and his father are at the center of this black hat faction in Deal. But the leadership struggle goes back to 1994, when Rabbi Saul Kassin, now 87 and out of jail on $200,000 bail, won the titular title of chief rabbi after the death of his father, Rabbi Jacob Kassin, spiritual leader since the 1930s. In doing so, he beat out Rabbi Baruch Ben-Haim, who, incidentally, was married to the elder Kassin’s daughter, and whom many considered better qualified for the job. The choice, reportedly based on the last will and testament of Jacob Kassin, was not universally popular. In the wake of losing the contest for succession, Ben-Haim withdrew from the community’s mainstream in many ways, including no longer attending the community’s rabbinic council meetings regularly, according to one source. Over time, this source related, he turned increasingly toward the ultra-Orthodox wing of the community, an orientation sustained by his son, Eli Ben-Haim, who also was charged.

Even before the arrests, some would speculate about who, if anyone, might succeed Kassin as chief rabbi. His arrest has now accentuated the question. One longtime observer from within the community predicted that Solomon Dwek’s choice of whom to sting would inevitably strengthen the Haredi faction in the years to come. The Deal Yeshiva and Deal Kollel, both headed by Dwek’s father, are the centers for the ultra-Orthodox in Deal and remain untouched by the scandal, as does Ateret Torah, the central ultra-Orthodox Syrian congregation in Brooklyn. But another source deeply involved in community affairs dismissed this. Under the relatively weak leadership of Saul Kassin, he explained, individual congregations have increasingly looked to their own spiritual leaders. This close observer of trends in the community also pointed to increasing gaps between the ultra-Orthodox and the mainstream that he predicted would, over time, erode the traditional Sephardic ethos of belief in traditional observance and simultaneous toleration of laxity of the same. He said:

No one takes seriously any longer the idea of succession. There will very probably be a split in the community down the road. These are centrifugal forces.

Also, in contrast to the past, when boys were encouraged to go into business right out of school,

There are now a lot of people in our community who insist on higher secular education for their children. The Haredim don’t tolerate that.

It’s not a universal view. One rabbi said:

It’s true there’s been a bit of polarization in the community in the last 15 to 20 years. But the community is complex. We’re not ideological. People marry each other. The streams overlap.

Solidarity is how this community has survived intact even as other, less insular, Sephardic communities, the Greeks for example, have scattered and assimilated in America. The Syrians’ communal trajectory has traced the reverse course of Ashkenazic Jewry, in which each generation of the mainstream has been more assimilated than the last. With the Syrian Jews, each generation has been more insular. It is an insularity reinforced in no small part by a rabbinic edict from the 1930s, since updated and strengthened, that, in its current interpretation, forbids community members from marrying converts to Judaism, even if validly converted by an Orthodox rabbi elsewhere. It is an insularity that has grown, even as their wealth has burgeoned due to their elaborate, family-linked network of mutual aid in business and philanthropy. This has led some wags to describe the community as medieval minds in Armani designs. But its defenders point, instead, to the unparalleled benefits community members share. Sarina Roffe, a writer and researcher whose work focuses on her community, and one of the few sources willing to speak on the record, said:

No community has been as successful in building such an extensive infrastructure for its members.

Now this community’s absolute fealty to its rabbis will face a test unlike any it has faced before. And no one knows for sure in which direction its members will turn, toward greater openness to the outside or further fortification against it.

notice how this article’s headline misrepresents the content

Outrage at San Francisco Jewish Film Festival
over Rachel Corrie screening
Abi Goodman, JPost, Jul 30 2009

Emotions ran high at the San Francisco Jewish Film Festival over the showing of Rachel, a film that looks at the International Solidarity Movement activist Rachel Corrie and her death in Gaza in Mar 2003. The controversy had been brewing for some time, concerning both the showing of the film and the invitation to Rachel’s mother, Cindy Corrie, to speak at the festival. In the wake of protests against the showing of the film last Saturday, Peter Stein, the festival’s executive director, invited Dr. Mike Harris, one of the leaders of the local Stand With Us chapter, to speak in order to put across his objections. Stand With Us is a pro-Israel advocacy organization based in Los Angeles. In his speech, Harris, to give some context to the film, talked about the spate of suicide bombings that took place leading up to Rachel’s death. He referred to the other “Rachels” who died as a result of terrorist attacks preceding Rachel Corrie’s death. Harris was heckled throughout most of his speech. Cries of “not true” followed his accusation that the ISM had aided terrorists who took over Bethlehem’s Church of the Nativity in 2002, and mocking laughter ensued when he said:

That’s why the young IDF soldier was operating the bulldozer in Rafah. It was to destroy the tunnels used to smuggle explosives for murdering Israelis.

When Harris criticized the choice of sponsor for the film, saying, “The American Friends Service Committee supports boycotts, divestment and sanctions against Israel,” his words were followed by hoots of support for the AFSC. Harris went on to mention the AFSC’s decision to host a dinner for Iranian President Mahmoud Ahmedinejad, which drew more cheers of support from the audience. In his blog following the incident, Harris wrote that he was not surprised by the responses from the audience:

Stand With Us fully supported my appearance, realizing that this was a unique opportunity to present our viewpoint, even knowing that the majority of the audience would be hostile.

On Jul 20, five days before the screening, the president of the San Francisco Jewish Film Festival board, Shana Penn, resigned over the issue. “Healthy differences on how to approach sensitive issues” was her reason for resigning, she said, according to j., a San Francisco area Jewish newsweekly. Standing by its decision to show the film and to invite Cindy Corrie, the festival released the following statement:

We are presenting the views of the filmmakers and their subjects in what we hope is an atmosphere that encourages free expression and public debate. We believe that the best artists, including documentary filmmakers, create work that makes us think and sparks a dialogue both within the Jewish community and the greater community of the Bay Area.

The film’s director Simone Bitton has put together interviews with eyewitnesses, IDF soldiers and spokespeople to try to bring new information to the table regarding Corrie’s death. The film was protested for its anti-Israel nature, which was seen as unsuitable for a Jewish film festival. Rachel has already been shown at the Berlin International Film Festival and the Tribeca Film Festival in New York.

obama tardy in pandering to jewish megalomania

Obama fails to name anti-Semitism envoy
Etgar Lefkovits, JPost, Jul 30 2009

The Obama administration has failed to name an envoy for monitoring and combating anti-Semitism around the world as mandated by US law since the previous ambassador was relieved of his duties at the start of the president’s term more than six months ago, officials said Thursday. The failure to name a new envoy for the post raises questions about the importance the new administration attaches to the fight against anti-Semitism, said Rafael Medoff, director of the Washington DC-based David S. Wyman Institute for Holocaust Studies. Medoff wrote in a monograph to be published by the Jerusalem Center for Public Affairs, entitled The Politics of the American Response to Global Anti-Semitism:

Foot-dragging on the selection sends a message that anti-Semitism is not of great importance to the United States. At a time when anti-Semitism remains a staple of government propaganda in the Middle East, when violent anti-Semitic incidents are reported almost daily throughout Europe, and when even the streets of Washington are not untouched by anti-Semitism’s violent potential, that is the wrong message to send. On the one hand, it is understandable that at a time of multiple domestic and foreign crises, the Obama administration does not see this position as a top-tier concern. Yet it is nevertheless surprising how far down anti-Semitism appears to have slid on the new administration’s list of priorities, particularly when it was the Democrats themselves who fought so hard to create the position over the vehement opposition of the Bush administration.

The State Department’s Office of the Special Envoy to Monitor and Combat Anti-Semitism, which was established by a Congressional initiative in 2004, advocates American policy on anti-Semitism both in the US and internationally. The proposal to establish such an office was initially opposed by the Bush administration, which took 18 months to appoint an envoy to head the office, Medoff said. The envoy, Dr. Gregg Rickman, was removed from his post when the Obama administration took office in January, in keeping with standard policy when a president of a different party takes power. A White House spokesman referred queries on the issue Thursday to the State Department. A State Department official said Thursday that upon the inauguration of a new president, ambassadors from the previous administration tender their resignations. The official said that as with all Ambassadorial and other senior positions, there is an appointment process, which is ongoing, that includes the president nominating a candidate followed by Senate confirmation.

larry franklin’s charges get yet another airing

‘Anti-Semitism was behind our case’
Hillary Leila Krieger, JPost, Jul 30 2009

One of the former AIPAC staffers once accused of illegally sharing classified information with Israeli officials lashed out at the FBI Thursday following comments from an FBI informant that anti-Semitism had been a motivation for the case. Steven Rosen, one of the two former officials from AIPAC charged in the case, told the JPost:

Within the counter-intelligence bureaucracy of the United States government, there is a virulent ideology about Israel and Jews. What these guys believe is that there’s a Jewish cabal, a Jewish conspiracy.

Larry Franklin, who supplied Rosen with classified information as part of an FBI sting, was quoted Thursday in the Washington Times as saying that anti-Semitism “was part of this investigation and may have been an initial incitement of this investigation.” He said FBI investigators “asked me about every Jew I knew” in the Office of the Secretary of Defense, where he worked as an Iran analyst and came into contact with Rosen and his co-worker Keith Weisman in their capacity as employees of AIPAC, which dismissed them after the charges were filed. Those charges were dropped by the government this spring. The 12-year sentence imposed on Franklin for passing on classified information was subsequently reduced to probation. Franklin also told the Washington Times:

One agent said to me, ‘How can an Irish Catholic from the Bronx get mixed up with all these…,’ and I finished the sentence for him: ‘Jews?’ And I proceeded to tell him that Christ and all the apostles and even his mom were Jewish. So it was that sort of thing. And just sarcastic turns of the phrase from time to time. You know, I felt dirty sometimes.

The FBI did not respond to a JPost request for comment by press time, and the Washington Times reported that FBI Assistant Director John Miller declined to address the charges of anti-Semitism, quoting Miller as saying:

We have no way to respond to third-hand characterizations of partial statements allegedly made by unnamed FBI employees several years ago. If Mr. Franklin would like to make a formal complaint about the conduct of any FBI employee, there is a process to do.

Franklin couldn’t be reached by the JPost for comment. Rosen, though, said he had heard statements similar to Franklin’s from other individuals questioned in the multi-year probe, which lead to charges being filed in 2005. He took issue with the questions the FBI asked about why AIPAC officials such as himself were in touch with the Israeli Embassy, or why US officials were in touch with AIPAC, asking:

Why is that suspect? How could AIPAC not be in touch with the embassy of Israel? They were trying to put a stigma on the very idea of government officials talking to AIPAC.

But Morris Amitay, who was executive director of AIPAC from 1974 to 1980, had a different take on the FBI questioning, which he himself also underwent. He recalled being asked, in connection to his former AIPAC role:

Why would you have contact with anyone at the Israeli Embassy?

But he chalked that up to “ignorance on the part of the FBI” and “a complete lack of sophistication,” rather than pervasive anti-Semitism. He added that the interest of law enforcement officials in Israeli ties stems largely from the case of Jonathan Pollard, a former US Navy analyst who is serving a life sentence for passing secrets to Israel, whom some officials have maintained worked in collaboration with another, never-found, spy, saying:

I think I was being asked stupid questions, not malicious questions.

Still, Rosen said the Jewish community needs to do more to counter the attitude toward Jews and Israel found in US counter-intelligence agencies, declaring:

There needs to be a systemic campaign. The organized community as a whole has left this job undone and it’s time to do the job.

Abraham Foxman of the ADL said:

We’ve been aware that there is a layer of bigotry. Government service is not immune.

He pointed to meetings and complaints the ADL has pursued with government agencies, including the CIA and the Pentagon, over the treatment Jewish staff have received, particularly those with ties to Israel, and Israelis who have had problems getting security clearances. He said that he would be willing to raise the issue raised by the AIPAC trial with the appropriate authorities as well, but that to do so required complaints by affected individuals. Franklin or others with direct knowledge of what the FBI had done “would have to be willing participants,” and he was glad that Franklin had spoken up, he added:

It’s important. It raises the issue.

Rosen also expressed satisfaction that Franklin was going public with his experience, particularly since Franklin is not Jewish, saying:

I’m glad he’s speaking out about it, because it’s courageous to speak about it. I’m grateful because it’s the truth and nobody’s willing to say there’s anti-Semitism inside agencies of the US government, when it’s right there.

your holiday fiction reads

Israel ‘defense brief’: Gaza offensive was proportionate
Barak Ravid, Cnaan Liphshiz, Haaretz, Jul 31 2009

Israel’s offensive against Hamas in Gaza at the beginning of the year was a “proportional response” to attacks by the Islamist group, the Foreign Ministry said in a defense brief on Operation Cast Lead released Thursday. the ministry said Thursday in a statement on the brief, which was published ahead of two harsh United Nations reports on the conflict expected to be released soon:

Israel’s resort to force in the Gaza Operation was both a necessary and a proportionate response to Hamas’ attacks. While the IDF continues to investigate specific incidents during the Operation, the Paper demonstrates that Israeli commanders and soldiers were guided by International Humanitarian Law, including the principles of distinction and proportionality.

The ministry said the brief, titled “The Operation in Gaza – Legal and Factual Aspects,” also details the context of the campaign. The report may be downloaded here (160 pp, pdf). According to the statement, the brief gives previously unpublished details of multiple IDF investigations into allegations made by various groups of violations of the law during Operation Cast Lead, the code-name for the 3-week offensive. The paper reveals that IDF investigative teams are currently examining approximately 100 complaints, including 13 criminal investigations opened so far. A draft of two UN reports is expected to be given to Israel around the end of August, before they are officially presented to the Human Rights Council in mid-September. The reports are expected to be highly critical of the extent of civilian casualties in the Hamas-ruled territory during the operation. The ministry added:

The Paper also gives a detailed account of Israel’s humanitarian efforts in the course of the operation, particularly in the face of Hamas attempts to launch attacks during humanitarian pauses to allow aid to reach civilians, hijack aid and assistance, and hide within and behind medical and international facilities.

The brief concludes that more than 12,000 rockets and mortars fired by Gaza militants between 2000 and 2008 forced Israel to act. It says Hamas was to blame for civilian casualties by deploying its fighters in neighborhoods and that Israeli forces destroyed buildings only to protect themselves. The IDF says that a total of 1,166 Palestinians were killed in the operation, the majority of whom were militants; Palestinians, however, say that more than 1,400 were killed, including over 900 civilians. NGO Monitor hailed the document on Thursday as a welcome change in the way the Israeli government counters bias. The group said the brief was a document containing “evidence central to examining the facade of research methodology in more than 500 NGO statements during and after the recent Gaza conflict.” NGO monitor noted that Amnesty International and Human Rights Watch claimed to have no evidence of Hamas’ alleged use of “human shields” in Gaza, but that:

In contrast, the report quotes Hamas operatives who acknowledged rocket fire from schools and describe incidents in which Hamas activists requested children to wheel carts laden with rockets, in case IDF forces noticed them.

Israel: Operation Cast Lead was necessary and proportionate
Yaakov Katz, JPost, Jul 31 2009

A government report released Thursday insisted that incessant Hamas rocket attacks forced Israel to hit Gaza hard earlier this year, countering charges of war crimes but acknowledging that more than a dozen criminal inquiries are underway. The 160-page report was called the first comprehensive Israeli government study of Operation Cast Lead in December and January that killed more than 1,100 Palestinians. It was an attempt to answer charges from Palestinians, the UN and human rights groups that Israeli forces committed war crimes and violated international law during the three-week operation. Charges have included indiscriminate and intentional firing that killed civilians and destroyed property. During the conflict, Israeli warplanes, tanks and artillery obliterated Palestinian government buildings and destroyed or damaged thousands of apartments, houses, businesses and factories. Israeli officials have acknowledged that their soldiers used additional firepower to keep their own casualties down. Ten Israeli soldiers were killed during the conflict, along with three civilians who died in rocket attacks. The scope of the destruction has triggered a flood of scathing reports from human rights groups. Defending Israeli actions, the government report said it was not meant to be an assertion of infallibility, but rejected the charges one by one, attributing excessive damage and casualties to understandable wartime mistakes. The report said Israel is investigating about 100 complaints and has opened 13 criminal inquiries. A military statement Thursday said criminal cases under investigation now number 15. The report’s executive summary noted that 12,000 rockets and mortars were fired at Israel between 2000 and 2008, including nearly 3,000 in 2008 alone, and said:

Israel had both a right and an obligation to take military action against Hamas in Gaza to stop Hamas’ almost incessant rocket and mortar attacks. Under international law, Israel had every right to use military force to defend its civilians.

The report said 1 million Israelis were threatened by Hamas rockets, tens of thousands were traumatized and thousands fled their homes. It called the offensive, which began Dec 26 and lasted three weeks, a necessary and proportionate response. Hamas official Mushair al-Masri rejected the report, repeating the charge that Israel committed war crimes in Gaza, commenting on Thursday:

This report is ridiculous and stupid and does not deserve a response.

PA President Mahmoud Abbas has denounced the Hamas rocket fire but charged that Israel’s response was excessive. The report analyzes at length the steps Israeli forces took to minimize civilian casualties in Gaza, while claiming that some such casualties were inevitable because Hamas fighters took up positions in crowded neighborhoods. It said international law is violated only when there is an intention to target civilians, and Israel had no such intention, in contrast to Hamas targeting Israeli civilians with its rockets. The report explains damage to UN facilities by blaming Hamas for setting up rocket launchers nearby. In one of the specific case studies, the Israeli report dismissed charges that dozens of Palestinian civilians were killed or wounded by white phosphorous shells, which are used to lay down smoke screens. In a footnote, the report acknowledged that shell casings with phosphorus residue could have hurt some people and started fires, but claimed:

There appear to have been no documented deaths in Gaza resulting from exposure to white phosphorus itself, but it does not appear that damage from this use can be regarded as excessive.

Amnesty International is among the groups charging Israel with war crimes. In a report this month, the group deplored Israel’s use of less-precise artillery shells and white phosphorous in built-up areas. It also accused Israeli forces of using Palestinians as “human shields” and frequently blocking civilians from receiving medical care and humanitarian aid. Internal investigations into the use of white phosphorous have “uncovered no violations of international law,” the report said, but noted that some inquiries are still in progress. The report detailed steps aimed at limiting civilian casualties, counting 2.5 million leaflets and 165,000 phone calls to civilians warning them to leave targeted areas. Also, it said, humanitarian aid flowed into Gaza throughout the conflict. The IDF has decided that in the event of a future conflict it will issue more detailed warnings to Palestinians before air strikes in residential areas. In recent discussions on the results of the operation, senior IDF officers have called to make improvements to procedures and to provide more details in the flyers to ensure that the Palestinians realize that their lives are at risk. Some of the flyers may henceforth include details on routes that the Palestinians can use to flee an area which is scheduled to be invaded.

Report defends actions during Gaza war
Roee Nahmias, Ynet, Jul 30 2009

Israel has published an official 160-page report on Operation Cast Lead, the military offensive launched in the Gaza Strip in January. Thursday’s report holds Hamas responsible for the need for the military operation, stating that incessant rocket fire on Israel’s south made a military strike inevitable, and that Israel did not violate international law. The report admits that, despite precautionary measures, many Palestinian civilians were wounded and killed during the operation and severe property damage was inflicted. Nevertheless, the report, dubbed “Israel’s statement of defense,” states that civilian casualties and property damage do not, by themselves, constitute a violation of international law. Hamas rocket fire was aimed at Israel’s civilian population, rendering it a clear violation of international law, while Israel’s strikes were aimed at Hamas military targets and therefore did not breach it, it said. The report also stated that Israel explored different avenues prior to launching the operation, including seeking the UN and UN Security Council’s intervention and launching direct and indirect negotiation efforts. The document went on to detail Hamas’ escalating attacks on Israel, which included kidnapping IDF soldier Gilad Shalit in Jun 2006, as well as its use of civilian facilities, such as mosques, schools and hospitals, as bases of operations. It also noted israel’s continuous efforts to coordinate humanitarian aid shipments into Gaza, and various ways in which Hamas exploited these efforts to hijack supplies meant for the civilian population, concluding:

Israel had both a right and an obligation to take military action against Hamas in Gaza to stop Hamas’ almost incessant rocket and mortar attacks upon thousands of Israeli civilians and its other acts of terrorism. Israel was bombarded by some 12,000 rockets and mortar shells between 2000 and 2008, including nearly 3,000 rockets and mortar shells in 2008 alone… These deliberate attacks caused deaths, injuries, and extensive property damage; forced businesses to close; and terrorized tens of thousands of residents into abandoning their homes. The IDF were guided by International Humanitarian Law, including the principles of distinction and proportionality. These principles, enshrined in IDF training, Code of Ethics and rules of engagement, required IDF forces to direct their attacks solely against military objectives and to try to ensure that civilians and civilian objects would not be harmed.

Hamas official Mushair al-Masri rejected the report, repeating the charge that Israel committed war crimes in Gaza, saying on Thursday:

This report is ridiculous and stupid and does not deserve a response.

PA President Mahmoud Abbas has denounced the Hamas rocket fire but charged that Israel’s response was excessive. Also Thursday, the Foreign Ministry decided to name a legal adviser to the Israeli Embassy in The Hague, ahead of the publication of two UN reports probing the Israeli offensive in Gaza. The Foreign Ministry wants to brand them as biased and not credible, laying the groundwork for the foreseeable diplomatic and legal battles ahead. The Foreign Ministry also intends to launch a campaign to thwart any legal actions against Israel. The ministry would like to see Prime Minister Netanyahu head its PR efforts. The new legal adviser will have to deal with any action taken in the Hague-based International Crimes Court.