The gas deal with Russia: In extremity: forget blame.

The agreement between Russia and Ukraine on gas prices reveals how powerful Russia’s position is over Europe: The Europeans dependent on this gas supply were, in this severe winter, “unnerved as lights blinked out and homes went cold in some of the new member states of the union in Eastern Europe.” As this article reports, “the situation has gone so far that they stopped being interested in who is to blame,” … “Now we’re talking about preserving trust in a large supplier and a large transit country.” Russia, despite its own problems of population decline, enjoys a strategic position: supplier of vital resources (oil, gas) for Europe. And soon it will be a vital source of fossil fuel resources for the populations of the Far East, for China’s growth rate is still one of the highest in the world. Pipelines west, pipelines east: Russia at the center, along with client states in Central Asia like Kazakhstan and Turkmenistan, whose natural resources are similarly vital to their neighbors.
Here are two articles from the New York Times today that reveal how powerful are the conditions of exigency: people in distress make deals, sometimes very costly ones. So what are the prospects over the long haul?
NYTimes January 11, 2009
Ukraine and Russia Sign Deal Over Gas

MOSCOW — Russia and Ukraine took a major step toward resolving a dispute over natural gas that has left large parts of Europe without heat or fuel for days, signing an agreement with the European Union to establish independent monitors of pipelines, officials said early Sunday.

The agreement was a precondition set by Russian energy officials to turn on the gas flow again. Russia shut off the valves on Thursday after an extended dispute with Ukraine over pricing and accusations of stealing gas from the export pipelines.

It may be days before relief comes to European countries down the line from Ukraine, especially Poland and Bulgaria, which have suffered greatly without heating fuel in the bitter winter weather. Even if Russia immediately turns on the flow, it would take about three days to repressurize the European natural gas pipeline system and restore full service, experts said. And the underlying price dispute has still not been resolved.

Still, the agreement was the first major progress in days of tough negotiations.

The breakthrough started on Saturday, when the Czech prime minister, Mirek Topolanek, whose country holds the rotating presidency of the European Union, met for hours of talks with Prime Minister Vladimir V. Putin of Russia outside Moscow and secured Russia’s agreement. Mr. Topolanek then flew to Kiev, Ukraine, late that night to meet with Ukrainian leaders.

Early Sunday, Prime Minister Yulia V. Tymoshenko of Ukraine emerged from talks with Mr. Topolanek to say her country had signed the protocol. On the Russian side, Ilya Y. Kochevrin, executive director of the export arm of Russia’s natural gas company, Gazprom, confirmed in a telephone interview that an agreement had been reached.

Mr. Topolanek was quoted by Agence France-Presse as saying that now, “Nothing prevents the deployment of monitoring teams and renewal of gas transit.”

Mr. Topolanek and other European officials, clearly unnerved as lights blinked out and homes went cold in some of the new member states of the union in Eastern Europe, had been pressing hard for a settlement in recent days.

In his opening remarks to Mr. Putin, Mr. Topolanek said his colleagues in Europe were interested in restoring gas flow rather than placing blame for the shut-off. The matter is deeply entangled in former Soviet politics and Russia’s assertions of a new and dominant role in the region.

“Indeed, the situation has gone so far that they stopped being interested in who is to blame,” Mr. Topolanek said, according to a Russian government transcript of the meeting. “Now we’re talking about preserving trust in a large supplier and a large transit country.”

Russian authorities maintain that Ukraine began siphoning from pipelines some of the Russian natural gas intended for export to Europe and has been using it to meet internal demand since Russia halted supplies to Ukraine on Jan. 1 because of a dispute over pricing.

Angered that Ukraine was circumventing its fuel embargo and and accusing its leaders of interrupting exports to paying customers farther west, Moscow halted all shipments to Europe via Ukrainian territory. That was unfortunate for European consumers, as about one-fifth of all the natural gas burned in Europe passes through the pipelines. Ukraine denied that it had withdrawn gas from the lines.

Ukraine rejected an earlier version of the monitoring protocol, saying the structure was too cumbersome and would delay the deployment of monitors. It was unclear early Sunday what specific changes had been made, if any, to meet those concerns.

Under the agreement finalized Sunday, Ukraine and Russia would accept observers on their territory, said Mr. Kochevrin, the export director for Gazprom.

Copyright 2009 The New York Times Company

NYTimes January 11, 2009
A Crossroad for Russia and America

MOSCOW — In August of last year, a new Russia presented itself to the world. From the battlefield of Georgia, the message said: We are no longer seeking the good opinion of the West. The new taste for confrontation was seen by many as a byproduct of oil and gas wealth, which had given Russia’s leaders the confidence to risk international isolation. In the title of a book he published in April, the scholar Marshall Goldman offered a one-word explanation: “Petrostate.”

That thesis may have a short shelf life. Russian leaders, no longer hoping to make the ruble an international reserve currency, now face a confluence of disasters: The price of a barrel of oil has slid below $40, shares of Gazprom fell 76 percent in a year and more than a quarter of Russia’s cash reserves have been spent shoring up the ruble.

But does that mean we can expect a thaw between Russia and America?

The question arises at a moment of high tension. The deadlock between Russia and Ukraine on gas prices has drawn in all of Europe; violence in Georgia could flare up again. Barack Obama’s Russia policymakers are taking office under the pressure of unfolding events.

Henry Kissinger, who was in Moscow last month, is offering the hopeful view that the global financial crash could lead to “an age of compatible interests.” But others see the crisis pushing Russia in the opposite direction. So there are two paths:

SCENARIO 1: COOPERATION In the global financial collapse, as Alexander Rahr of Germany’s Council on Foreign Relations put it: “We have all become weaker. We have all become poorer.” So, pressed by domestic concerns, both sides pare back their foreign ambitions. Washington slows its timetable on NATO expansion and missile defense; Russia defers the dream of recapturing the Soviet “privileged sphere of influence.” Leaders in Moscow present this to the public as a victory.

The logic here is straightforward: A cash-strapped Russia would need Western money and technology to develop its energy fields. State monopolies would seek foreign partners, and bare-knuckled power grabs like Russia’s past moves against BP and Shell Oil would look counterproductive. The “battle of ideas” within the Kremlin, as Igor Y. Yurgens, an adviser to President Dmitri A. Medvedev, describes it, would turn away from “isolation, seclusion, imperial instincts” and toward long-term partnership with the West.

“If we take care of the crisis by isolating ourselves, if we don’t learn the lessons from what is already being done, then the fate of Russia can be the repetition of the fate of the U.S.S.R.,” Mr. Yurgens said. “I don’t think we are stupid enough.”

SCENARIO 2: RETRENCHMENT AND NATIONALISM “Less resources means more selfish behavior,” as Sergei A. Markov, director of the Institute of Political Studies in Moscow, has said. In this case, Russia finds itself facing internal dissent and the threat of regional separatism, and lacking large piles of oil money to disburse in hopes of keeping control. Forced to fight for their own survival, political leaders tailor their policies to domestic public opinion. They focus on an external enemy — the United States, which leaders have already blamed for Russia’s financial crisis, and with whom Russia is already deeply irritated over the prospect of American military influence reaching Ukraine.

By this logic, it would be absurd to cede ground to the West now, after the long-awaited taste of satisfaction that Russians got in Georgia. Many Russians see the August war as a restoration of Russia’s rightful place in world events — a product not of oil wealth, but of the Russian society’s recovery from the Soviet collapse.

“Russia has returned, period,” said Vyacheslav A. Nikonov, president of the Kremlin-aligned Polity Foundation. “That will not change. It will not get back under the table.”

WHICH scenario is more likely? To begin, it is clear that Russian authorities are preparing to defend their political power. After presenting himself to the world as a liberal modernizer, President Medvedev has prioritized one major reform — lengthening the presidential term to six years. Last week, he signed a law eliminating jury trials for “crimes against the state,” and pending legislation would expand the definition of treason.

The authorities are nervous, it seems. Mr. Medvedev, in his State of the Nation speech, sent a barbed warning to “those who seek to provoke tension in the political situation.” And last month, riot police were sent 6,000 miles from Moscow to Vladivostok, where hundreds of people were protesting automobile tariffs, The Associated Press reported. “I just think they don’t trust what they can’t control,” said Clifford Kupchan of the Eurasia Group, a global risk-consulting firm based in New York. “Their instinctive reflex is to clamp when faced with uncertainty.”

The first scenario, in which economic considerations dictate a more subdued foreign policy, requires conditions that may not exist. In the government, economic liberals might challenge hardliners. The constituencies who might back them up are ones that fell silent during the boom.

“People in epaulets who feel they are middle class, people in bureaucracy who feel they are middle class, they could be part of this coalition,” Mr. Yurgens said. “Whether this coalition will be strong enough, I have no way of knowing.”

These days, Stephen Sestanovich, a senior fellow at the Council on Foreign Relations, sees signs of “policy confusion” as Moscow’s leaders adjust to Russia’s sudden economic slide. Moscow has allowed the Georgia crisis to subside, but has escalated tensions over gas with Ukraine.

The choice the elites face, Mr. Sestanovich said, is whether to keep talking in ways that make them look like “angry risk-takers and disturbers.”

“Is that still their real view of themselves, and of the appropriate policy in a time of crisis?” he said. “It may be. But I’m not sure, and I don’t think they are.”

The United States has real interests in a cooperative Russia; it wants help in curbing Iran’s nuclear ambitions, and NATO needs more supply routes into Afghanistan. And with Mr. Obama’s arrival in the White House, there seems room for compromise on two big Russian concerns: possible NATO expansion to Ukraine and Georgia, and the plan to station missile-defense facilities in Poland and the Czech Republic.

But in the deep freeze of a Moscow January, the gains of August are still thrilling. When Mr. Putin went on television last week to cut gas shipments to Ukraine — retaliation, he said, for thefts from Russia’s pipeline — who could miss the glint of satisfaction at another tough-guy stance? Foreign policy emits an energy that goes far beyond mere economics, and the new year will call for all the resources Moscow can muster. To a Russia intent on reclaiming great-power status, there may be something elemental about resisting America.

“It’s just the way things are,” said Mr. Nikonov, whose grandfather, Vyacheslav Molotov, was Stalin’s foreign minister. Searching his memory for periods of warmth between the two countries, Mr. Nikonov came up with two: March and April of 1917, and August through December of 1991.

Copyright 2009 The New York Times Company

The movement of Iranian funds through secretive means

Iran holds a kind of pivotal position in the Middle East/Central Asia. The Iranians are not Arab and yet aspire to making their country the hegemon of the Arab Middle East. They are Iranian and Turkish in cultural background, with a long historical/cultural connection with Central Asia where various dialects of Persian and Turkish are still spoken [although most of those speakers are Sunni, not Shia like most Iranians]. The effect for the Iranians is a marginal position in respect to the various political blocs of the region. In fact most of their neighbors distrust Iran’s activities. In a sense, Iran has no friends; only those created by themselves [Hizbollah] or those whose loyalty has to be bought [Hamas]. Because of Iran’s relatively large population and wealth everyone has an interest in what the Iranian leaders are doing. The following article on Iranian moneys moving through American banks reveals how interlinked the financial systems are among the banks around the world, and how Iran seems to have funded some of its operations. And also how vulnerable we all are to abuses of advantage and to distortions of information that can be created by those in strategic positions in the financial sector. The article reveals things that the world is just coming to know: what is it that the world does not know about the funding of various other dangerous enterprises? [Click on the title for the source.]

NYTimes: January 10, 2009
Iran Moved Billions via U.S. Banks

Iranian banks illegally shifted billions of dollars through American financial institutions in recent years, and authorities suspect some of the money may have been used to finance Iran’s nuclear and missile programs.

Details of the illicit transfers came to light on Friday when New York State and federal authorities announced that a large British bank had agreed to pay $350 million to settle accusations that it had helped the Iranian banks hide the transactions.

The British bank, the Lloyds TSB Group, “stripped” information that would have identified the transfers in order to deceive American financial institutions, which are barred from doing business with Iranian banks, Robert M. Morgenthau, the Manhattan district attorney, said. Lloyds acknowledged its conduct and agreed to turn over detailed records of the transactions.

“They went to great lengths to obliterate any identification,” Mr. Morgenthau said.

The district attorney’s office was still investigating nine major banks that might be engaging in similar conduct, but prosecutors declined to name them. Mr. Morgenthau said, however, that money in one transaction was used to buy a large amount of tungsten, an ingredient for making long-range missiles. He said he suspected that other funds might have been used to finance Iran’s nuclear program.

In the current case, investigators were unsure what the money was used for, said Daniel J. Castleman, the chief assistant district attorney. The stripping made it impossible to determine where the money was going, he said. “We don’t know of any money that has gone to any terrorist organizations, individuals or anything like that,” he said.

Lloyds has agreed to examine all of the transactions it stripped to try to determine where the money was headed. In all, Lloyds hid the source of billions of dollars that passed through the United States, prosecutors said. Lloyds also hid transfers from banks in Sudan, which are also banned from doing business with American institutions.

Half of the $350 million Lloyds has agreed to pay will go to the federal government and the rest to Mr. Morgenthau’s office, which will divide the money between the city and the state.

Mr. Morgenthau said he hoped the money, the largest financial penalty his office has ever collected, would provide a boost to tight city and state budgets.

Although prosecutors did not identify specific individuals at Lloyds responsible for the fraud, Mr. Castleman said, “It was a systemic, wide-ranging scheme.” The training manual given to employees of Lloyds even included a section on how to strip transactions, prosecutors said.

Banks in several nations are banned from doing business with American institutions, but the United States is particularly concerned about Iran, which it says finances terrorists and runs an illicit nuclear weapons program. Iran denies those accusations.

The investigation into Lloyds goes back to 2006. It was conducted jointly by Mr. Morgenthau’s office and the Justice Department, with the assistance of the Treasury and banking regulators.

According to a deferred prosecution agreement, Lloyds handled $300 million of Iranian transfers and $20 million of Sudanese transfers that ended at American banks. Mr. Morgenthau said billions of dollars of transactions went through American banks but ended outside the country.

Several employees in Lloyds’ international payment processing unit in London removed from the bank’s central system orders from certain foreign banks, according to the agreement released Friday by Mr. Morgenthau’s office. Employees struck out identifying information about the originating banks on printed copies of the payment instructions, which someone then re-entered into the payments system. When American banks received the transfers, they seemed to have originated at Lloyds.

Worried that they might be violating American law, senior officials at Lloyds stopped the stripping operation for Iranian banks in 2004, but transfers from Sudan were stripped as recently as 2007.

Under the agreement between Lloyds and Mr. Morgenthau, no employees, officers or the bank will be charged with a crime unless evidence emerges that the bank or its employees and officers knew that specific transfers were sent to or by terrorist groups or “proliferators of weapons of mass destruction.” The agreement lasts for two years.

In recent years, officials in the Treasury have stepped up a campaign to have foreign banks sever links with Iranian banks, which they accuse of providing support for groups like Hezbollah and Hamas, in addition to financing Iran’s own nuclear ambitions.

In November, the Treasury barred American financial institutions from handling certain money transfers for Iranian interests that had been previously allowed, closing what it described at the time as the “the last general entry point for Iranian banks.” Certain exceptions are still allowed for humanitarian aid and remittances.

In December, federal authorities moved to seize the assets of the Assa Corporation, which the Treasury says is a front for Bank Melli, Iran’s largest bank. Assa owns a stake in a Midtown Manhattan office tower.

Mr. Morgenthau’s office had been investigating ties between the Iranian government and Assa and a related entity, the Alavi Foundation, since 2006. Mr. Morgenthau said evidence unearthed in that investigation led his office to inquire about money transfers made through Lloyds.

Copyright 2009 The New York Times Company

Worrisome levels of ethical collapse: Portent of the future?

Many eminently notable indications of dishonest and even cruel policies by public figures in high places have come to light in the recent past (one place to see more than enough is Ahmed Rashid, Descent into Chaos). We wonder what an emerging world will be like if this kind of behavior continues among those in power. It is impossible to predict the future, which is by definition an impenetrable fog, but a few serious disciplines, notably economics, have developed in the attempt to establish sign posts that can, even if unclearly, be seen through the fog ahead. For those of us who worry about the trends in ethical behavior it is more precarious, but we never cease to wonder, to speculate on the basis of what is going on among us at the moment. Some thoughts.

A recent issue of the New York Review reports on issues of enduring importance for our understanding of the kind of ethical world that may be in store. Alan Rusbridger, editor of the The Guardian, explains how elaborate, intricate, even convoluted devices of great corporations veil strategies of tax evasion that are unfair if not illegal. “Tax avoidance is a growth industry, with global accountancy firms and boutique tax avoidance specialists devising strategies for sheltering companies from tax through ingenious offshore arrangements, tax havens, registration in multiple jurisdictions, complex derivative instruments, restructuring, and charging for intellectual property” [Jan 15,09, p 57]. Given that tax avoidance is still considered a legitimate strategy for businesses, illegitimate strategies are difficult and costly to identify and prosecute. That is – what is crucial for the public – the intricacies of tax evasion restrain and resist the ability of a free press (to say nothing of the government) to track and expose criminal evasion. Rusbridger says that “the advanced tax planning undertaken today by most global companies is as intelligible to the average person as particle physics” [p58], and he quotes the admission of the managing editor of the Financial Times: “financial journalists … don’t really understand this stuff, and they join a long list of people that starts with bank regulators, central ban regulators and money managers.”

Rusbridger was actually recounting the story of The Guardian’s struggle with Tesco, a huge British based corporation, that had sued the paper for liable in the most complaint-friendly liable court in the world, London. He explains that the costs of protection from liable claims are so great as to restrain serious journalistic inquiry into corporate tax evasion. In Britain, in fact, “it is fairly safe to predict that almost no British paper will investigate in any detail how companies today increasingly fund and structure their overseas expansion with an eye to avoiding tax.” In the mean time the British government estimates that “thousands of major companies” are unfairly (and thus illegally) avoiding tax obligations through elaborate evasion schemes.

All the more reason to encourage journalism – and government service — that helps enforce transparency.

But when those at the highest rungs of the government ladder put into practice regulations that betray their public responsibility we are in even greater danger of entering a future whose structures could become repressive of the weak and vulnerable. The glaring example of abuse of power that in fact offends the public sensibility [and thus must be masked by the power elite] is of course the practice of torture by the current administration. Although practiced illegally before George W. Bush, it was his administration that made it legal, or at least claimed to have made it illegal. It is now clear on the basis of many accounts [for example, Philippe Sands, 2008, Torture Team: Rumsfeld’s Memo and the Betrayal of American Values.] that those at the highest levels of authority authorized it, notably of course Secretary of Defense Richard Rumsfeld, number three in Department of Defense Douglas Feith, chairman of the joint chiefs of staff Gen. Richard Myers, and many others under their authority; and in the White House the Vice President himself, who has admitted to endorsing the abuse of prisoners, as well as Chief Counsel to the President Alberto Gonzales and John Yoo, and others. But then, when the practice of torture came to light, known to the public these officials were supposed to represent, not one of them took responsibility: that allowed the regular troops, who were in fact only doing as they were told, to take the rap.

I would like to believe that the George W. Bush administration was the nadir of ethical collapse in this country’s history. We all hope for a more upright leadership in the future, but what we have just seen, and what so many human beings have endured because of these irresponsible actions, is a warning. Betrayal of the public trust is always a possibility, given our human frailty. There is a continuing need for courageous reporting on the truth as it is found, not as those in power would like it be reported. I pray that the world will be spared another round of power abuse such as the world has just endured.

[A note of irony: Washington has expressed concern that some inmates released from Guantanamo could be tortured or persecuted if they were returned to their home countries.(BBC News, Re Canberra rejects appeal to take US prisoners, 3 January 2009)]

Poverty in Tajikistan: shortage of remittences

NYTimes December 25, 2008
Bad Times Stall Cash Flow From Tajik Migrants

TOSH-TEPPA, Tajikistan — In poverty-stricken Tajikistan, the global financial crisis is measured in bags of flour.

At least that is how Bibisoro Sayidova sees it, as she looks for ways to feed her five children, since her husband, a migrant worker in Russia, stopped receiving his wages this fall. Now he is loading large sacks of dried fruit in Moscow on faith.

“Sometimes I cry when the kids don’t have socks or coats,” she said, mixing a stew of water, bread, onion and oil. “We’re still hoping he’ll get paid.”

The financial crisis that is in full swing in the world’s developed countries is only beginning to reach the poorest, and labor migrants, with feet in both worlds, are among the first to feel it.

Flows of migrant money to developing countries, known as remittances, began to slow this fall, the first moderation after years of double-digit growth, according to the World Bank. The slowdown is expected to turn into a decline of 1 to 5 percent in 2009, when the full effect of the crisis hits.

Some are already feeling it. Mexico, for example, is likely to have a 4 percent decline in the flows of migrant money in 2008, according to World Bank estimates. The biggest declines next year are expected in the Middle East and North Africa, because of economic slowdowns in the Persian Gulf and Europe.

“There’s definitely a serious moderation in the growth of remittances,” said Dilip Ratha, a senior economist at the World Bank who tracks migrant money flows.

The decline will be less severe than for other flows, like foreign investment, Mr. Ratha said, but its effects will be amplified in countries like Tajikistan that have come to depend on rapidly growing remittances. The country will rank first in the world in 2008 for remittances as a portion of its economy — 54 percent — according to an estimate by the International Monetary Fund.

“The Tajik economy is not sustainable without migration,” Mr. Ratha said. “It is not diversified. People are the most important resource they have.”

The reason dates to the Soviet collapse, when factories closed, subsidies from Moscow dried up and villages like Tosh-Teppa, 25 miles north of Afghanistan, were left to rot. More than 80 percent of the population lived under the poverty line of about $2 a day, and Tajiks began to export the only thing they had: themselves.

“The population has been completely abandoned by the state,” said Paul Quinn Judge, who runs the International Crisis Group’s Central Asian program. “When it comes to providing for basic needs — healthy drinking water, heat in winter — they are utterly failing.”

The money the migrants sent back was a lifeline. When Borun, a 42-year-old with a degree in agriculture, first went to work in Russia, a vicious civil war had just ended, and his family was eating corncobs to survive. When his two children came down with malaria, there was no money to take them to a hospital and they died after a local medical office gave them all that it had: aspirin and mosquito netting.

“We would have died without that money,” said his mother, Umiyavi, 59. Like many people interviewed for this article, Borun would not give his last name for fear the Russian authorities would refuse to let him back in to work.

When oil profits were high, workers from Central Asia, the Caucasus and Eastern Europe poured into Russian cities, as many as 10 million by some estimates, making Russia the country with the second largest immigrant population, after the United States.

Like most Tajiks working in Russia — 700,000 to a million people — Borun worked in construction. It was one of the sectors hardest hit by the credit crunch and falling oil prices this fall. Borun’s wages for a job renovating the Lenin Museum in Moscow were delayed. In November his employer paid up, but then immediately fired him.

“They said those who came from abroad have to go,” he said, shivering in a thin jacket in his small house in Khodja-Durbod, a village near Tosh-Teppa. About 300 workers were fired, he said, mostly Tajiks and Uzbeks.

Economists do not expect effects to be felt broadly in labor markets until well into next year, but the trend of booming remittances has clearly ended. In Tajikistan, remittances rose just 1 percent in November, compared with the same month last year, according to the I.M.F., down sharply from a record growth of about 90 percent early this year.

That has brought a quiet desperation into households like Ms. Sayidova’s. The area is missing so many men that it feels like wartime, and its daily allowance of four to six hours of electricity is the same as in Baghdad. Malnutrition is widespread. Unicef estimates that more than one-third of children are stunted. Ms. Sayidova’s 13-year-old son has the body of a 6-year-old.

Ms. Sayidova is part of a new generation of women who are less protected from poverty than their mothers. The Soviet Union required girls to finish high school, but since its collapse the number of girls who graduate has fallen by 12 percent. Ms. Sayidova dropped out and married at 14. She was ashamed to have to borrow money from her mother to buy winter clothes for her children and Vaseline for her hands.

Migrant money had offered a safety net. Roofs were built, houses expanded and the basic needs of a large portion of society provided for. In the years of the migrant boom, the portion of the population living in poverty fell by a third, to 50 percent. In Khodja-Durbod, a school was built on migrant money, with each family contributing $100 and 320 bricks. It is missing both a math teacher and a toilet, and its headmaster is concerned that with the crisis, it will not get either.

Still, migrants do not seem to be giving up and returning home, the biggest worry for Western governments that see large numbers of poor unemployed men just north of Afghanistan as a potential security risk. Instead, people interviewed over three days last week said they would dig in further to hold on to any chance for a job, particularly if the Russian authorities made good on threats to reduce their numbers.

Borun’s oldest son is an exception. He worked for a few months gathering scrap metal in Moscow when he was 16. The experience was so painful that he returned to Tajikistan and began riding his bicycle 13 miles every morning to a better school.

“He saw the way we lived, without respect,” Borun said bitterly. “He doesn’t want to be like his father.”

Copyright 2008 The New York Times Company

How to talk gently about lies

I have been ruminating about Alex’s comment that the report of disputations among the Taliban is a fake, possibly a CIA plant [see July 2, 2008]. He claims to be able to discern it; apparently, I am not. The world of “news” is so filled with lies that we all have a hard time sorting them out. The truth seems ever more elusive, the more we understand that so many of those who hawk information have reasons for presenting it in a certain way. We are becoming inured to lies. We are even inventing courteous ways of saying that we are being lied to, perhaps to avoid being so blunt. The newest way, at least that I have noticed, appears in today’s New York Times. Here is Senator Byron L. Dorgan, Democrat of North Dakota, talking about Maj. Gen. Jerome Johnson, former commander of the Army Sustainment Command: “I believe General Johnson presented evidence that deceived Congress,” Mr. Dorgan said in an interview. But the neatest way he put it is further down in the article: Dorgan says of Johnson’s report, that it was “a display of negligent disregard for facts that were known to the Pentagon.” “Negligent disregard for facts that were known”: a pretty good definition of “lying”. But there are other ways to misrepresent the truth. The way that Fox News represents Michelle Obama is to run several minutes of talk about her in which she says scarcely anything except the few words that they find offensive. Given this kind of treatment, how would anyone get across anything they want to say? That kind of treatment indicates again that the “news” is crafted for an audience by social elements that have reasons, interests, in persuading others to see things they way they see it. It becomes all the most critical, then, for us to know what the interests are of those who describe situations. Politics is the contest over how to define the public situation. That makes news agencies political vehicles. Again, we need to know who owns the news companies and what their interests are. We know quite a bit about Fox: it would be nice if they would seek a better reputation; but then Bill O’Reilly is just too valuable. Somewhere I saw that the Swift Boat Veterans for Truth announced that they would be taking on Obama. This is a group whose credentials were dubious when they claimed to represent the real combat experience of John Kerry, and they have even worse credentials for saying anything in particular about Barak Obama. That they announced their plans to go after him reveals in fact what they are: professional character assassinators whose connection with “truth” is and has always been a charade. They have been pretty quiet, though, since both Obama and McCain have appeared to quash the “527 organizations” this time around. In fact, their website now says that as of May 31, 2008, they have “formally disbanded and ceased all operations”. Is it possible their claim to be working on an attack against Obama was an offer to serve the high-rolling elite who funded their activities the last time? These days the super-rich are not dumping so much money into the Republican cause this time around; could it be that the Swift Boaters didn’t get any offers worth their trouble this time? What with the cost of gas these days and the vanished funding from the super-rich, it hardly pays anymore to be in the business of character assassination.

A Rich Saudi as a “Libel Tourist”

I append below, without comment, a report from last August 3 on The statement speaks for itself; see also my brief note on the topic, “Risks of Litigation,” IJMES, 2006 38:345-347. RLC
[AUGUST 3, 2007 (Los Angeles, CA) — Jeffrey A. Stern, President and Publisher of Los Angeles-based Bonus Books, Inc., is speaking out about this week’s decision by Cambridge University Press to destroy all unsold copies of their 2006 book, “Alms for Jihad,” by American authors Robert Collins and J. Millard Burr, in response to a libel action brought against them in British courts by Saudi billionaire Khalid Salim A. Bin Mahfouz. In just one of a series of heavy-handed libel suits against American and British journalists and publishers filed in British courts in recent years, Mahfouz claimed that “Alms for Jihad” wrongly implicates him as having had a significant role in aiding terrorism. // In a similar attempt to halt the distribution of such claims, libel tourist Bin Mahfouz also filed a libel action in British courts against Dr. Rachel Ehrenfeld, after Bonus Books published her 2003 book “FUNDING EVIL: How Terrorism is Financed and How to Stop It.” Ehrenfeld, director of the American Center for Democracy, also alleged Bin Mahfouz of backing organizations with alleged ties to terrorism, a charge that Mahfouz, formerly president of the National Commercial Bank of Saudi Arabia, continues to deny. But Ehrenfeld stands behind her research, and publisher Stern stands by his author. “I find it utterly appalling that any publisher—let alone one with the history and perceived credibility of Cambridge University Press—would allow themselves to be bullied into making such a decision,” Stern said. “Clearly they must have supported the material before they agreed to a publishing deal with (U.S. authors) Collins and Burr. It’s only now, after being slapped with a suit in the U.K. by the likes of Bin Mahfouz, that they have suddenly decided to concede to demands to pull the book. What’s worse, they have not only agreed to pay damages but they have even gone so far as to issue a formal apology on their website, completely discrediting their authors as having made ‘defamatory allegations’ to which there was ‘no truth whatsoever.’” “Alms for Jihad” authors Robert O. Collins, a professor emeritus of history at the University of California at Santa Barbara, and J. Millard Burr, a retired employee of the U.S. State Department, who were not personally named in the libel action, have refused to endorse their publisher’s settlement. // “What happened to freedom of the press?” Stern said. “We’re talking about two very credible American writers here. The very idea that these authors could be silenced in the U.S. by a British court is not only outrageous and fraught with frightening journalistic implications, it’s simply un-American.” After several copies of the U.S.-released FUNDING EVIL happened to be purchased online by UK buyers, Bin Mahfouz filed suit against Ehrenfeld in Great Britain, where outdated libel laws still put the burden of proof on the defendant. Ehrenfeld was ordered to pay £114, 386.52 in fines and expenses, publish an apology and physically destroy her books. Because she is a U.S. citizen who writes and lives in New York City, Ehrenfeld did not acknowledge the British court. Instead, she filed suit in New York, seeking to block enforcement of the judgment, citing it as contrary to the free speech protections that Americans enjoy. In June, the 2nd U.S. Circuit Court of Appeals ruled in her favor, finding that Ehrenfeld’s claim CAN be brought before a U.S. court. The decision was hailed by prominent U.S. civil rights attorney Harvey Silverglate as one of “the most important First Amendment cases” of the last quarter century. As a result, every American-based writer and publisher in similar “libel tourism” situations can now seek a U.S. court decision, requesting that a foreign decision not be enforceable in this country. // In a recent Washington Times editorial about the Ehrenfeld case, scholar and Jihad Watch director Robert Spencer noted the release of a September 13, 2001 note from France’s foreign intelligence agency, the DGSE (General Directorate of External Security). He stated that French news site obtained the note in late June, revealing that in 1996, Bin Mahfouz was known to be one of the architects of a banking scheme constructed for the benefit of Osama bin Laden. The report also claims that both U.S. and British intelligence services had knowledge of this. “This is just the latest addition to the mountain of evidence from which Miss Ehrenfeld constructed her case in ‘Funding Evil,’” Spencer writes. “Even if this evidence is all mistaken, the British libel judgment against Ehrenfeld appears all the more fantastic and unjustifiable in light of the fact that French intelligence agents had documents allowing them to come to the same conclusion she did.” Ehrenfeld, who is also a Member of the Board of Directors of the Committee on the Present Danger (, told the Chronicle of Higher Education on Monday that she finds Cambridge University Press’ decision “despicable,” and that as she understands it, they “caved immediately.” If and when the New York Court of Appeals decides that there is jurisdiction over Bin Mahfouz, Ehrenfeld’s case would proceed on its merits—allowing Ehrenfeld to conduct pre-trial “discovery” of Bin Mahfouz’s financial activities to further confirm the accuracy of her claims against him. “We commend Rachel Ehrenfeld for being strong-willed on this issue,” Stern said. “Allowing this sort of ‘libel tourism’ to continue stands to negatively impact every writer and publisher and the U.S.—not to mention the public, who is effectively being forced to fall victim to an insidious and unacceptable form of censorship.”

Seventy-two million dollar salary for “a useless pile of rubble”

Rolling Stone has an article about the Bush contacts who have made huge amounts of money in Iraq while our troops and thousands of Iraqis are fighting a war. A small group of well-placed friends are walking away from this fiasco with unconscionable amounts of personal cash. More shame. The American administration has piled shame upon shame in the last 6 years.

Click on the title for the documented source.

Islamic Group’s Wrath Stokes Fears in Gaza

The rising influence, and threat, of radical militants claiming to represent Islam in the Gaza strip looks so much like the attitude and activities of the Taliban in Afghanistan and Pakistan that it is worth noting the similarity. And in each case it is fair to ask where the funding for these activities comes from. Could it not be from a similar source?
Loretta Napoleoni, Terror Incorporated, says that Saudi Arabia has been bankrolling Wahhabist groups in several places. In particular she cites [p. 123] Pakistan, Chechnya, and Egypt, but she implies that “the Saudis” have been funding many such groups elsewhere. Could Saudi money be the main source of the rise of militant, destructive groups claiming to represent Islam in so many places across the Middle East and Central Asia today? If so, it is probably not government money, but private Saudi money. In any case, the world’s appetite for oil may be the ultimate source[!].

Islamic Group’s Wrath Stokes Fears in Gaza
by Eric Westervelt
“Islamic fundamentalists are suspected of murdering three women thought to be prostitutes in the Gaza Strip. The deaths follow the bombing and torching of businesses and public places that radicals believe to be un-Islamic.”
“…according to investigator Abu al Abed … he’s never seen three women murdered in one night, let alone three assassinated gangland style.”
“The attacks started in October 2006 … hitting a wide range of businesses … [m]odern music stores, DVD outlets, restaurants and cultural centers …”
“A statement from … ‘The Swords of Islamic Righteousness,’ claimed responsibility…”
“Gaza security officials are investigating the possibility that these vigilante moralists have the … backing of Hamas.”
” [Investigator] Abed said analysis of explosive residue links Hamas’ underground paramilitary wing — the Izzadine al Qassam brigades — and its more official police force to the wave of attacks.”
” Some in Hamas, investigators say, are working by proxy to do what they can’t do openly now that they’re leading the government: trying to impose an Islamist social agenda across Gaza.”

congress defunding public radio and tv

FYI.Public Broadcasting Targeted By House
Panel Seeks to End CPB’s Funding Within 2 Years
By Paul Farhi
Washington Post Staff Writer
Friday, June 10, 2005; Page A01
A House subcommittee voted yesterday to sharply reduce the federal government’s
financial support for public broadcasting, including eliminating taxpayer funds
that help underwrite such popular children’s educational programs as “Sesame
Street,” “Reading Rainbow,” “Arthur” and “Postcards From Buster.”
In addition, the subcommittee acted to eliminate within two years all federal
money for the Corporation for Public Broadcasting — which passes federal funds
to public broadcasters — starting with a 25 percent reduction in CPB’s budget
for next year, from $400 million to $300 million. In all, the cuts would
represent the most drastic cutback of public broadcasting since Congress created
the nonprofit CPB in 1967. The CPB funds are particularly important for small TV
and radio stations and account for about 15 percent of the public broadcasting
industry’s total revenue.
Expressing alarm, public broadcasters and their supporters in Congress
interpreted the move as an escalation of a Republican-led campaign against a
perceived liberal bias in their programming. That effort was initiated by the
Corporation for Public Broadcasting’s own chairman, Kenneth Y. Tomlinson.
“Americans overwhelmingly see public broadcasting as an unbiased information
source,” Rep. David Obey (Wis.), the ranking Democrat on the subcommittee, said
in a statement. “Perhaps that’s what the GOP finds so offensive about it.
Republican leaders are trying to bring every facet of the federal government
under their control. . . . Now they are trying to put their ideological stamp on
public broadcasting.”
But the Republican chairman of the House Appropriations subcommittee on labor,
health and human services, and education asserted that the panel was simply
making choices among various worthy government programs, and that no political
message was intended.
The subcommittee’s action, which came on a voice vote, doesn’t necessarily put
Big Bird on the Endangered Species List. House members could restore funding as
the appropriations bill moves along or, more likely, when the House and Senate
meet to reconcile budget legislation later this year. The Senate has
traditionally been a stronger ally of public broadcasting than the House, whose
former speaker, Newt Gingrich (R-Ga.), waged a high-profile but ultimately
unsuccessful campaign to “zero out” funding for the CPB a decade ago.
The cuts nevertheless surprised people in public broadcasting. In his budget
sent to Congress in February, President Bush had recommended reducing CPB’s
budget only slightly.
Several denounced the decision by the panel, which has 10 Republicans and seven
Democrats, as payback by a Republican-dominated House after years of complaints
from conservatives who see liberal bias in programs carried by the Public
Broadcasting Service and National Public Radio. Broadcasters noted, for example,
that the 25 percent cutback in next year’s CPB budget was a rollback of money
that Congress had promised in 2004.
PBS, in particular, drew harsh criticism in December from the Bush
administration for a “Postcards From Buster” episode in which Buster, an
animated rabbit, “visited” two families in Vermont headed by lesbians. And
programming on both PBS and NPR has come under fire in recent months from
Tomlinson, the Republican chairman of the CPB, who has pushed for greater
“balance” on the public airwaves.
A spokeswoman for NPR, Andi Sporkin, directly blamed Tomlinson for yesterday’s
action, saying, “We’ve never been sure of Mr. Tomlinson’s intent but, with this
news, we might be seeing his effect.”
Tomlinson did not return calls seeking comment. In a statement, he said,
“Obviously, we are concerned [by the cuts], and we will be joining with our
colleagues in the public broadcasting community to make the case for a higher
level of funding as the appropriations measure makes its way through Congress.”
John Lawson, the president of the Association of Public Television Stations, a
Washington-based group that lobbies for public broadcasters, called the
subcommittee’s action “at least malicious wounding, if not outright attempted
murder, of public broadcasting in America.” He added, “This action could deprive
tens of millions of American children of commercial-free educational programming.”
Rep. Ralph Regula (R-Ohio), the subcommittee’s chairman, said the cuts had
nothing to do with dissatisfaction over public radio or TV programs. “It’s
pretty simple,” he said in an interview. “The thinking was, there’s not enough
money for everything. There are ‘must-do,’ ‘need-to-do’ and ‘nice-to-do’
programs that we have to pay for. [Public broadcasting] is somewhere between a
‘need-to-do’ and a ‘nice-to-do.’ “
The subcommittee had to decide, he said, on cutting money for public
broadcasting or cutting college grants, special education, worker retraining and
health care programs. “No one’s out to get” public broadcasting, Regula said.
“It’s not punitive in any way.”
In fact, none of the Republican members of the subcommittee publicly denounced
public radio or TV funding at yesterday’s markup. Public broadcasting drew
supportive statements from Obey and Rep. Nita Lowey (D-N.Y.).
Regula suggested public stations could “make do” without federal money by
getting more funding from private sources, such as contributions from
corporations, foundations, and listeners and viewers.
But the loss of $23.4 million in federal funds for children’s educational shows
— which PBS calls its “Ready to Learn” programs — could mean the elimination
of these programs, said an official at Alexandria-based PBS who asked not to be
named because the network still hopes to regain the funding. PBS’s revenue
totaled $333 million in fiscal year 2004.
The Ready to Learn group includes “Sesame Street,” “Dragontales,” “Clifford” and
“Arthur,” among others.
The House measure also cuts support for a variety of smaller projects, such as a
$39.6 million public TV satellite distribution network and a $39.4 million
program that helps public stations update their analog TV signals to digital format.
Small public radio stations, particularly those in rural areas and those serving
minority audiences, may be the most vulnerable to federal cuts because they
currently operate on shoestring budgets.
“This could literally put us out of business,” said Paul Stankavich, president
and general manager of the Alaska Public Radio Network, an alliance of 26
stations in the state that create and share news programming. “Almost all of us
are down to the bone right now. If we lost 5 or 10 percent of our budgets in one
fell swoop, we could end up being just a repeater service” for national news,
with no funds to produce local content.
Stankavich, who also runs a public radio and TV station in Anchorage, said
public radio is “an important source of news in urban areas, but it’s
life-critical in rural areas,” especially in far-flung parts of Alaska unserved
by any other broadcast medium.Please see my “concerns” page:
My blog: