- Signs of the Times for Mon, 15 May 2006 -


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Editorial: Signs Economic Commentary

Donald Hunt
Signs of the Times
May 15, 2006

Gold closed at 716.00 dollars an ounce on Friday, up 4.5% from $685.20 at the end of the previous week. The dollar closed at 0.7737 euros Friday, down 1.5% from 0.7854 for the week. The euro, then, closed at 1.2926, up from 1.2732 dollars compared to the end of the week before. Gold in euros would be 553.92 euros an ounce, up 2.9% from 538.17 for the week. Oil closed at 72.04 dollars a barrel, up 2.9% from $70.01 at the end of the previous week. Oil in euros would be 55.73 euros a barrel, up 1.3% from 54.99 for the week. The gold/oil ratio closed at 9.94, up 1.5% from 9.79. In the U.S. stock market, the Dow closed at 11,380.99 on Friday, down 1.7% from 11,577.74 at the end of the previous week. The NASDAQ fell sharply, closing at 2,243.78, down 4.4 % from 2,342.57 for the week. In U.S. interest rates, the yield on the ten-year U.S. Treasury note closed at 5.19%, up nine basis points from 5.10 at the previous week's close.

The signs are ominous for the U.S. and world economy. Gold continued its sharp rise, especially in dollar terms, and oil seems to have renewed its climb after a brief pause. The dollar continued to fall. This week, however, saw a decrease in the U.S. stock market after it had approached an all-time high. The political crisis in the United States worsened last week as well, with Bush's approval rating falling below 30%; soon he will be the most unpopular president since the beginning of polling. This week may see an indictment of Karl Rove. Significantly, the mainstream media is paying attention to all of these stories. Even cautious establishment outlets like National Public Radio has pundits worrying that Bush's position is so hopeless he will launch an attack on Iran as a desperate, last-ditch attempt to salvage enough popularity to avoid prison (by keeping Congress in Republican hands). Not surprisingly, then, last week also saw the release of some bad consumer sentiment numbers in the United States, showing the sharpest drop in consumer confidence since Hurricane Katrina.

Let's look at gold and the dollar. A whole range of evidence points to a currency collapse for the dollar. The problem is, this has never happened to the supposed "sole superpower" in the world. The fall of the dollar, which has so far been steady and not catastrophic, may be in for a few sharp shocks ending in disaster. Here's a look at how it might unfold:

How does a currency collapse? And the U.S. $?
Excerpts From - "Gold Forecaster - Global Watch"

May 8, 2006
www.goldforecaster.com

When a currency loses the confidence of its people, its fall becomes exponential, as has happened to the Zimbabwe $, where in 1982 one U.S.$ equaled 1 Zimbabwe $. Today around Z$200,000 buys one U.S. $ if you can find someone idiot enough to sell one for the Z$.
In day-to-day terms, the smallest note in Zimbabwe - a Z$500 - is the size of a U.S.$. The price of a single-ply sheet of toilet paper is more expensive at around Z$867.

The U.S.$ is nowhere near there, but clearly the U.S. Administration has no plan or even desire to rectify the U.S. Trade deficit. Consequently, we are seeing a growing number of Central Banks turning to the Euro for its reserves and away from the U.S.$.

Whilst most observers and particularly U.S. observers like to have tangible facts and numbers with which to mathematically gauge the present and the different possible futures, a collapsing currency situation is not as neatly gaugeable. Indeed it is driven in stages of 'confidence', which are rarely measurable in advance.

For instance we see today the move of the Pension and other long-term funds into the gold E.T.F.' One finds there are no mathematically measurable factors with which to measure the pace of change to these funds. Yes, the number of 'Road-shows' the World Gold Council does affects this move to some extent, but how do you measure the spread of that knowledge and resulting investment in the E.T.F.'s outside of that? How does one measure the forces causing uncertainty and falling 'confidence'.

It is an emotional progression, one that moves in lurches as particular incidents destroy confidence limb by limb. In such a climate a steady degeneration of confidence lead to an effect we shall call a "plateau - cliff" process.

• As confidence is whittled away the currency appears relatively stable.

• Then a particular event will occur that triggers a breakdown and the currency drops suddenly, like falling off a cliff, until it finds a short-term bottom and it holds that level for a period as though on a plateau. The process then repeats itself.

• The degeneration then accelerates, so the fall from the cliff to the next stable plateau happens more quickly.

• Then the height of the cliff [the fall] extends until it grows at an exponential basis.

• The final collapse will occur when the currency is completely discredited and used only by those unfortunate to have no other choice. Alternatively the currency is changed to a new one, one whose issue is backed by assets [Such as land - after the Weimar republic] and limited to a fixed relationship to those assets until confidence is restored by a healthy economy and a balanced Balance of Payments. This provides a basis in which to be confident about currency.

However, were the $ heading for a collapse, the U.S. $, a global reserve asset, nothing in the U.S. such as land or any other fixed U.S. asset would suffice. The asset would have to be accessible by its creditors, outside the States who would have to have a willingness to accept that asset in the case of a default by the U.S. The use of the $ domestically and internationally brings such problems that in the final extreme conditions the $ is inadequate as a global reserve currency.

But for the market to whittle away confidence in the $ would take some time. But we believe that it will happen.

• Look back a couple of years and we saw the $ reigning supreme.

• Then warnings were given against it as the Trade deficit began to grow.

• The Fed or the Administration then allied itself to the euro, giving it the respite it has enjoyed over the last year.

• Now there seems to be a breaking down of the $ of late and some Central Banks switching to the Euro out of the $. These were three distinct stages.

• The next stage is for the $ to fall heavily against the Euro and Euro oriented currencies.

• Next will come the defence of the $ until the weight of selling pressure exhausts the $ against other currencies [please note the U.S. has few foreign currencies left in its hands with which to defend the $, but the Fed put in place measures to allow it intervene in the international foreign exchanges.]

• This could delay the fall for some time, but history has shown that when a Central Bank defends a rate in the market, it gives in periodically and devalues. If insufficient it has to defend again and again.

• I have no doubt that Central Banks will use this defence to unload their dollars back to the States.

• At some stage the U.S. will have to impose Controls to prevent foreign capital from exiting the States and rejecting dollars coming home. These are called Exchange Controls.

• When this happens many currencies will begin facing the same problems as their reserves become suspect too and they cannot defend their own Balance of Payments deficits.

• At this point for the global economy to function adequately, a new "Global Currency" will have to be established and be supplied sufficient so as to regain global confidence. We cannot see this happening without gold in there to a greater or lesser extent. Of course this will have to be at prices believed by all nations, not just individuals!

During this process confidence in the currency will be the measuring factor, a nebulous, unstable element in itself. The process of the decay of confidence is described above. But confidence could well go down dramatically from the point we are at now with the $ in the monetary system. Soon the cliffs will extend until the defence of the currency comes, then a long plateau while the dollar is defended, until the heavy falls begin...

Even Alan Greenspan's predecessor as Fed Chairman, Paul Volcker, is sounding the alarm.

"A Really High Gold Price"

By Eric J. Fry

On Tuesday, the Ben Bernanke hiked short-term interest rates to 5% - the 16th straight quarter-point increase - and promised to continue hiking rates "if the data warrant." Over the ensuing three days, global stock marketshare stumbled, the dollar has dropped 2% and the gold price has skyrocketed more than $50.

These financial data are probably not the sort of "data" that Bernanke had in mind, but they are exactly the sort that might warrant a 17th or 18th or 25th rate hike...as a desperate effort to defend the U.S. dollar.

...At $730 an ounce, the gold price has reached its highest level since the beginning of the Volcker era. But beyond this superficial connection, the two eras possess very few obvious similarities, "obvious" being the operative word. Based on the prevailing economic [view], Volcker faced a far more dire situation than Bernanke faces. But we fear that the reality is exactly the opposite.

"Ben Bernanke," writes Ambrose Evans-Pritchard for the Telegraph of London," picks up a chalice brimming with the nastiest of toxins: a current account deficit of 7% of GDP, covered for now by fickle flows of capital from the Chinese central bank and petro-dollar sheikhdoms; a negative flow of global investments earnings for the first time in modern memory; a dollar hanging by a political thread; and hair- raising levels of debt."

Volker's chalice, by comparison was brimming with milk and honey. In 1979, America produced a current account surplus and boasted a national savings rate of nearly 10%. Today, both of these essential balance sheet line-items are in the red.

Meanwhile, we have amassed a few trillion dollars of government debt since the Volcker era. Our crippled national balance sheet, therefore, raises the risk of serious economic crisis, should the dollar's slump become a rout.

And now that the dollar is slumping, while gold is soaring, the unimaginable rout of the dollar is becoming a bit too imaginable.

"How much longer can the dollar's supremacy last?" Paul Volker wondered aloud at the Grant's Interest Rate Observer Conference last month. "And what's the endgame?"

Implicit in Volcker's musing was the clear suggestion that the dollar's days are numbered. "Does this go on forever?" he asked rhetorically about the financing of American consumption by foreign creditors. "What kind of pyramid can you build?"

"There seem to me to be a lot of unknowns that are facing this de facto world currency called the U.S. dollar and its increasing importance in the world," Volcker concluded. "Does that increase in importance have some natural limit?
And if so, what is the endgame?"

"In response to the question posed by Paul Volcker," James Grant remarked, "not a few of the Grant's conference attendees had an answer at the ready: 'A really high gold price.'"

Asian central banks seem to be quietly losing confidence in the dollar - quietly because they want to plan their escape from the burden of holding so many dollars and have everything in place before it happens. They can't afford to spook the market just yet, but the following column which appeared on Bloomberg has a startling quote from China's vice Minister of Finance:

Asia Is Getting Ready to Dump the Dollar Peg: Andy Mukherjee

May 8 (Bloomberg) -- Li Yong, China's vice minister for finance, said he had heard a "rumor" that the U.S. dollar was headed for a 25 percent drop. If the gossip was true, the consequences would be "shocking," he said.

Li's comment, which he made at a discussion on global financial imbalances last week at the annual meeting of the Asian Development Bank in the Indian city of Hyderabad, was aimed directly at fellow panelist Tim Adams, the U.S. Treasury undersecretary of international affairs.

The unspoken message was: "Don't try to talk the dollar down." And Adams knew better than to ask, "Well, what are you going to do about it?" The answer to that question has already begun taking shape: Asia may be getting ready to fix its currencies to a local anchor, dumping the region's unofficial dollar peg.

Even as they continue to pile up U.S. debt in their foreign- exchange reserves to keep their currencies stable against the dollar, Asian nations, China among them, are preparing for a scenario where the dollar does indeed collapse under the weight of a record U.S. current account deficit.

At the Hyderabad meeting, finance ministers of China, Japan and South Korea got together with their counterparts from the Association of Southeast Asian Nations, or Asean. The 13-nation group said it would sponsor a research project, titled "Toward greater financial stability in the Asian region: Exploring steps to create regional monetary units."

Asian Currency Unit

This is no innocuous academic exercise. Regional monetary units are a euphemism for a parallel Asian currency, an idea that has been around since the 1997-98 financial crisis and is now, for the first time, entering the realm of policy making.

Both Japan and China are extremely serious about it and are vying to take ownership of the project.

An Asian Currency Unit, or ACU, will be an index that seeks to capture the value of a hypothetical Asian currency by taking a weighted average of several of them. The weight for a particular currency in the index may be determined by the size of the economy and the quantity of its total trade.

What's the big deal with the ACU? Given the data, anyone can set up an index. It isn't that Asia is talking about replacing its national currencies with the ACU. A European-style single currency in Asia is at least decades away. The ACU is an accounting unit; it won't change hands in the physical world.

The ACU will start making a difference when it becomes the fulcrum of exchange-rate management in Asia. There is some sign that Asian nations want to do just that.

A New Peg

Korea, Japan and China agreed in Hyderabad to "immediately launch discussions on the road map for a system to coordinate foreign exchange policy."

The ACU can help a lot in such coordination. It can become a basket peg against which any Asian nation can fix the value of its currency within a band. The ACU, itself, will float.

Why might the ACU work when the now-defunct European Currency Unit, on which the concept is modeled, didn't? One good reason, as noted by economist Barry Eichengreen of the University of California, Berkeley, is that Europe's need for a parallel currency was satisfied by the dollar.

The ACU may well emerge as a viable currency for denominating export invoices, bank loans and bond issuances if the dollar is no longer perceived as a safe storage of value.

So far, Japan has been driving the ACU concept. Haruhiko Kuroda, a former Japanese vice minister of finance and currently the president of the Asian Development Bank, was vigorously pursuing it. The ADB was going to start computing and publishing several ACUs sometime this year.

China in Control

One such ACU would have comprised 13 members, including the Japanese yen, the Chinese yuan, the Korean won and the currencies of Singapore, Malaysia, Thailand, Indonesia, Brunei, Vietnam, Cambodia, Laos, Myanmar and the Philippines. Another ACU would have included both the yuan and the Taiwan dollar -- and that would have been anathema to China. Nor would China have liked to peg the yuan to an ACU that was overly dominated by the yen.

Now China has taken control. While the research will still be conducted in Japan, Asean will take the decision on the composition of the ACU. While Japan is a member of this club, its influence is in decline. The association is now firmly under China's thumb.

While China continues to exhort the U.S. not to follow weak- dollar policies, it, like everyone else, can only guess about the longevity of the present global imbalances.

If there is a sudden collapse in the dollar, the U.S. appetite for imported goods may vanish. The Chinese export engine may seize up and its fragile banking system may collapse under a spate of new bad loans. The idea behind the ACU is to buy some insurance, however inadequate, against all of this.

Stalemate

With its "my currency is your problem" attitude, the U.S. has made a negotiated settlement of global imbalances a diplomatic non-starter. China isn't willing to consider the U.S. argument that quicker appreciation of the yuan may prevent a costly adjustment later.

Once again in Hyderabad, Undersecretary Adams tried valiantly to get this message across to Chinese Vice Finance Minister Li. He was wasting his breath.
Li, as Adams noted wryly, "knows all my talking points."

The fact that this correction of a massive structural imbalance in the world economy coincides with the looming collapse of a world political and military hegemony makes the situation all the more perilous. The following article published last week by William Engdahl details how the United States, in a desperate roll of the dice, just lost the Great Game:

America's Geopolitical Nightmare and Eurasian Strategic Energy Arrangements

F. William Engdahl
May 7, 2006

Part I: The disintegration of the Bush Presidency

By drawing attention to Iraq and the obvious role oil plays in US policy today, the Bush-Cheney administration has done just that: They have drawn the world's energy-deficit powers' attention firmly to the strategic battle over energy and especially oil. This is already having consequences for the global economy in terms of $75 a barrel crude oil price levels. Now it is taking on the dimension of what one former US Defense Secretary rightly calls a 'geopolitical nightmare' for the United States.

The creation by Bush-Cheney-Rumsfeld and company of a geopolitical nightmare, is also the backdrop to comprehend the dramatic political shift within the US establishment in the past six months, away from the Bush Presidency. Simply put: Bush/Cheney and their band of neo-conservative warhawks, with their special relationship to the capacities of Israel in Iraq and across the Mideast, were given a chance.

The chance was to deliver on the US strategic goal of control of petroleum resources globally, in order to ensure the US role as first among equals over the next decade and beyond. Not only have they failed to 'deliver' that goal of US strategic dominance. They have also threatened the very basis of continued US hegemony or as the Rumsfeld Pentagon likes to term it, 'Full Spectrum Dominance.' The move by Bolivian President Evo Morales, following meetings with Venezuela's Hugo Chavez and Fidel Castro, to assert national control over oil and gas resources is only the latest demonstration of the decline in US power projection...

Part II: Disintegration of US Eurasia Strategic Influence

A Foreign Policy disaster over China

In this context, the recent diplomatic insult from Bush to visiting China President Hu Jintao, is doubly disastrous for the US foreign position. Bush acted on a script written by the anti-China neo -conservatives, to deliberately insult and humiliate Hu at the White House. First was the incident of allowing a Taiwanese 'journalist,' a Falun Gong member, into the carefully-screened White House press conference, to rant in a tirade against Chinese human rights for more than three minutes, with no attempt at removal, at a White House filmed press conference. Then came the playing of the Chinese National Hymn for Hu. The 'Chinese' hymn, however, was the (Taiwan) Republic of China hymn, not the (Beijing) Peoples' Republic hymn.

It was no 'slip-up by the professional White House protocol people. It was a deliberate effort to humiliate the Chinese leader. The problem is that the US economy has become dependent on Chinese trade imports and on Chinese holdings of US Treasury securities. China today is the largest holder of dollar reserves in form of US Treasury paper with an estimated $825 billion. Were Beijing to decide to exit the US bond market, even in part, it would cause a dollar free-fall and collapse of the $7 trillion US real estate market, a wave of US bank failures and huge unemployment. It's a real option even if unlikely at the moment.

China's Hu didn't waste time or tears over the Bush affront. He immediately went on to Saudi Arabia for a 3 day state visit where both signed trade, defense and security agreements. Needless to say, this is no small slap in the fact to Washington by the traditionally 'loyal' Saudi Royal House.

Hu signed a deal for SABIC of Saudi Arabia to build a $5.2 billion oil refinery and petrochemical project in northeast China. At the beginning of this year, King Abdullah was in Beijing for a full state visit. Hmmmmm... Since the Roosevelt-King Ibn Saud deal giving US Aramco and not the British exclusive concession to develop Saudi oil in 1943, Saudi Arabia has been regarded in Washington as a core strategic sphere of interest.

Hu then went on to Morocco, another traditional US sphere of interest, Nigeria and Kenya, all regarded as US spheres of interest. Hmmmm. Only two months ago Rumsfeld was in Morocco to offer US arms. Hu is offering to finance energy exploration there.

The SCO and Iran events

The latest developments around the Shanghai Cooperation Organization (SCO) and Iran further underscore the dramatic change in the geopolitical position of the United States.

The SCO was created in Shanghai on June 15, 2001 by Russia and China along with four former USSR Central Asian republics-- Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan. Prior to September 11 2001, and the US declaration of an Axis of Evil in January 2002, the SCO was merely background geopolitical chatter as far as Washington was concerned. Today the SCO, which has to date been blacked out almost entirely in US mainstream media, is defining a new political counterweight to US hegemony and its 'one-polar' world.

At the next June 15 2006 SCO meeting, Iran has been invited to become a full SCO member.

Last month in Teheran, the Chinese Ambassador, Lio G Tan announced that a pending oil and gas deal between China and Iran is ready to be signed.

The deal is said to be worth at least $100 billion, and includes development of the huge Yadavaran onshore oil field. China's Sinopec would agree to buy 250 million tons of LNG over 25 years. No wonder China is not jumping to back Washington against Iran in the UN Security Council. The US had been trying to put massive pressure on Beijing to halt the deal, for obvious geopolitical reasons, to no avail. Another major defeat for Washington.

Iran is also moving on plans to deliver natural gas via a pipeline to Pakistan and India. Energy ministers from the three countries met in Doha recently and plan to meet again this month in Pakistan.

The pipeline progress is a direct rebuff to Washington's efforts to steer investors clear of Iran. Ironically, US opposition is driving these countries into each others' arms, Washington's 'geopolitical nightmare.'

At the same June 15 SCO meeting, India, which Bush is personally attempting to woo as a geopolitical Asian 'counterweight' to China, will also be invited to join SCO. As well, Mongolia and Pakistan will be invited to join SCO. SCO is gaining in geopolitical throw-weight quite substantially.

Iran's Deputy Foreign Minister Manouchehr Mohammadi told ITAR-Tass in Moscow in April that Iranian membership in SCO could 'make the world more fair.' He also spoke of building an Iran-Russia 'gas-and-oil arc' in which the two giant energy producers would coordinate activities.

US out in cold in Central Asia

The admission of Iran into SCO opens many new options for Iran and the region. By virtue of SCO membership, Iran can now take part in SCO projects, which in turn means access to badly-needed technology, investment, trade, infrastructure development. It will have major implications for global energy security.

The SCO has reportedly set up a working group of experts ahead of the June summit to develop a common SCO Asian energy strategy, and discuss joint pipeline projects, oil exploration and related activities. Iran sits on the world's second largest natural gas reserves, and Russia has the largest. Russia is the world's second largest oil producer after Saudi Arabia. These are no small moves.
India is desperate to come to terms with Iran for energy but is being pressured by Washington not to.

The Bush Administration last year tried to get 'observer status' at SCO but was turned down. The rebuff - along with SCO's demands for a reduced American military presence in Central Asia, deeper Russia-China cooperation and the setbacks to US diplomacy in Central Asia - have prompted a policy review in Washington.

After her October 2005 Central Asian tour, Secretary of State Condoleezza Rice announced re-organization of the US State Department's South Asia Bureau to include the Central Asian states, and a new US 'Greater Central Asia' scheme.

Washington is trying to wean Central Asian states away from Russia and China. Hamid Karzai's government in Kabul has not responded to SCO's overtures. Given his ties historically to Washington, he likely has little choice.

Gennady Yefstafiyev, a former general in Russia's Foreign Intelligence Service, says, 'The US's long term goals in Iran are obvious: to engineer the downfall of the current regime; to establish control over Iran's oil and gas; and to use its territory as the shortest route for the transportation of hydrocarbons under US control from the regions of Central Asia and the Caspian Sea bypassing Russia and China. This is not to mention Iran's intrinsic military and strategic significance.'

Washington had based its strategy on Kazakhstan being its key partner in Central Asia. The US wants to expand its physical control over Kazakhstan's oil reserves and formalize Kazakh oil transportation via Baku-Ceyhan pipeline, as well as creating the dominant US role in Caspian Sea security. But Kazakhstan isn't playing ball. President Nursultan Nazarbayev went to Moscow on April 3 to reaffirm his continued dependence on Russian oil pipelines. And China, as we noted back in December, is making major energy and pipeline deals with Kazakhstan as well.

To make Washington's geopolitical problems worse, despite securing a major US military basing deal with Uzbekistan after September 2001, Washington's relations with Uzbekistan today are disastrous. The US effort to isolate President Islam Karimov, along lines of the Ukraine 'Orange Revolution' tactics, is not working. Indian Prime Minister Manmohan Singh visited Tashkent in late April.

As well, Tajikistan relies heavily on Russia's support. In Kyrgyzstan, despite covert US attempts to create dissensions within the regime, President Burmanbek Bakiyev's alliance with Moscow-backed Prime Minister Felix Kulov, is holding.

In the space of 12 months Russia and China have managed to move the pieces on the geopolitical 'chess board' of Eurasia away from what had been an overwhelming US strategic advantage, to the opposite, where the US is increasingly isolated. It's potentially the greatest strategic defeat for the US power projection of the post World War II period...

At least the fall of the U.S. Empire offers some hope for Latin America. Here's the syndicated columnist, Charley Reese:

Capitalism Wasn't Working In Bolivia

Charley Reese

Bolivia's newly-elected president, Evo Morales, has nationalized the nation's oil-and-gas industry and says he will nationalize the timber and mining industries, too.

Good for him. Capitalism was obviously not working in Bolivia. How else can you explain that a nation rich in oil, gas and minerals is the poorest nation in South America? Obviously, the nation's wealth was not flowing to the people.

I confess I have no sympathy for corporations, multinational or otherwise. As a noted English cleric observed, the corporation "has neither a body to kick nor a soul to damn." Typically, multinational corporations find it is cheaper to bribe a dictator or crooked politician than to pay honest royalties and taxes. Thus they suck wealth right out of the country.

Morales has given the corporations 180 days to sign a new contract with the state-owned oil company, or they have to leave the country. In the meantime, he has ordered the Bolivian army to watch over the facilities - a smart move on his part - and sent in auditors to determine how much the oil companies should be compensated for the shares they will sell the government.

Morales has also signed a new trade pact with Venezuela and Cuba, so you can be sure he is on the Bush administration's bad-guy list. Our national scold, Condoleezza Rice, will soon be making catty comments about him. Come to think of it, she rarely has anything good to say about anybody but old George W. Unfortunately for her, the only people who pay any attention to anything she says is the lap-dog press in Washington. She is the silliest secretary of state in American history.

Ordinarily, I believe that a property-based capitalism is the best system. Unfortunately, that has been replaced by finance capitalism, and so we have to face the fact that when the super-rich and the giant corporations buy up all the assets and then sit on them, opportunity for average people shrinks almost to nothing.

That's always been the system in Latin America, and now the Bush administration is imposing the system on us. Congress and the president are bought and paid for. The deliberate influx of immigrants is driving down wages. The ability of corporations to shut their American plants and move them overseas is breaking the union movement. Wealth is accumulating in fewer and fewer hands - hence the proliferation of billionaires.

I hope Morales has a good personal security system. He is messing with big money, and messing with big money can get you killed almost quicker than anything else. People should recognize that money is power - the power to hire thugs and murderers, the power to shut down competitors, the power to corrupt the government. The only possible counterbalance to big money is honest government, which more or less lets us out, at least for the moment. One historian's theory on the rise and fall of empires is that when all the wealth accumulates at the top, the people rebel and the wealth is redistributed. Then the process starts all over. That's sounds plausible to me. If you've ever seen the Palace of Versailles, you can understand why the French revolted. That's the best symbol of greed and ego on the planet.

The old German Oswald Spengler, predicted in his book "The Decline of the West" that the Age of Money would be replaced by the Age of Caesars. That seems to be happening. Certainly George Bush is the most Caesar-like president we've ever had. There are so many laws he's decided don't apply to him that he can rightly be called a scofflaw. And like Rome when the republic died, the legislative branch lies supine on the floor, unwilling to challenge the usurper.

I believe men like Morales and Venezuela's Hugo Chavez represent the best hope of breaking the chains of poverty that have held Latin America behind for so many generations. I hope more countries will realize that toadying to the U.S. is the worst thing they can do for their own people.

The American foreign policy today is clearly imperialistic, and as an American whose loyalty is to the Constitution, I fully oppose it. It's too bad the Democrats are too gutless to oppose it, too.


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Editorial: Shanksville-Flight 93: Many Unanswered Questions Still Linger

by Lisa Guliani
WingTV.net

On May 1, 2006, after a 24-hour respite following our participation in New York City's huge April 29th anti-war rally, WING TV returned to the road once again with three destinations in mind: Shanksville, New Baltimore, and Indian Lake, Pennsylvania. Victor Thorn and I wanted to spend a couple of days in these locations and re-tread some of the area covered in our book, Phantom Flight 93: The Shanksville Flight 93 Hoax.

NEW BALTIMORE

New Baltimore is a scenic wilderness, accessed via one long narrow road that stretches for miles, descending deeper with every twist and bend while fringed by dense woods, fishing holes and wide swaths of forested mountain landscape. Eventually the winding country road brought us to a small street dotted with a few houses. We saw a man in his yard and pulled into the driveway to ask him a few questions about 9-11.

The man's name was Dave and he works as a prison guard. After giving him a brief overview of why we were there, he invited us into his home for coffee. We spent the better part of an hour asking him about 9-11, and Dave openly expressed his doubts as to the official government version of events. He told us not to expect to see much of anything at the temporary memorial site for Flight 93 in Shanksville, because there isn't much of anything to see. Dave was very intrigued by all we related to him regarding the anomalous nature of the official story and equally perplexed by the lack of wreckage and debris shown in the photos on the cover of our book. We could see the wheels turning in his head. He said he would ask around and try to learn more information and get back with us. Dave directed us to speak with a woman who works at the post office just down the road from his home who could point us in the right direction for information.

The post office was nothing more than a pint-sized white shack; and the worker there told us we needed to head over to St. John's Church and speak with a woman named Melanie. This would be Melanie Hankinson, to whom we refer in Phantom Flight 93. We found Melanie inside the lovely church and she related to us her story of 9-11. Melanie says the lawn maintenance man from Beauty Lawn heard a loud "bang" and subsequently informed Melanie that there were papers blowing all over the churchyard. Upon inspection, she found not only papers littering the property, but also small pieces of metal. Melanie also told us that the FBI had set up a trailer in New Baltimore after Flight 93 purportedly crashed in the field at Shanksville, and locals were advised to bring all recovered debris to this trailer and hand it over to the Feds. Subsequently, she and other residents of the community dutifully delivered bags of debris to the FBI as directed. Along with papers and checks, Melanie also found small pieces of metal in the churchyard, which she said the FBI identified as pieces of the plane's underbelly. Keep in mind that New Baltimore is roughly 6-8 miles away from Shanksville and the wind speed on the morning of September 11th in that area was only 9-10 mph.

Prior to leaving New Baltimore, we spoke with a woman named Mrs. Oster, whose husband Charlie saw two additional airplanes in the near vicinity of Flight 93 (or something purporting to be Flight 93) on the morning of September 11th. After asking a few questions, she very undeniably said that she, as well as her husband, felt that this airliner had been shot from the sky. Victor then spoke with Mr. Oster via telephone, and he confirmed the sightings of other small white planes flanking Flight 93.

INDIAN LAKE

Indian Lake resembles a picture postcard. It's sprinkled with nice looking homes, a marina, and a couple of sprawling golf courses. We spoke with several folks at both the marina and the private golf course. Please keep in mind that Indian lake is 1-2 miles from Shanksville.

Stephanie Childers works in the Pro Shop at a private golf course. She told us that she saw Flight 93 intact and in the air on the morning of 9-11 from Hoffman's Nursery, approximately 3-4 miles away. She drew us a diagram to illustrate the plane's approach and described how she saw it descending as it flew, and then how it abruptly went into a vertical nosedive and subsequently crashed. She claims to have seen the windows of Flight 93. Stephanie said that at the time it impacted, she thought there was a bomb on the plane.

Standing next to Stephanie Childers was a man named Bob Pile, who had been listening to our discussion. Bob recalled "what seemed like buckets of gravel" hitting the roof of his house on the morning of 9-11 around the time of Flight 93's reported impact. Bob says his home is one mile away from the crash site. He thinks it is very odd that gravel would reach his home over that distance, and had no explanation as to how this might have happened. We asked him how an airplane as large as Flight 93 could fit into a hole of such significantly smaller dimensions and showed him a representative diagram of the plane and crater dimensions, and he shook his head, unable to reconcile the disparity in dimensions.

Another local named Charles McCauley chimed in at this point. McCauley described the debris he'd recovered from his property - black seat backings that the FBI identified as coming from Flight 93. Charles had no idea how these pieces of plane seats could have made their way the few miles to his house. McCauley, like many others, turned this debris over to the FBI. Both Pile and McCauley described lots of paper, parts of magazines, some solid matter (pieces of seats and metal) and checks carried by the wind in the days following 9-11, all of which was determined by the FBI to be from Flight 93.

After touching base with some more folks at Indian lake, we then proceeded to Shanksville. The people at Indian Lake had advised us to contact local realtor Valencia (Val) McClatchey, who took the infamous photo of a red barn with the mushroom cloud behind it, which appears on the cover of our book and has made its way through the vast spectrum of mainstream and alternative media venues since the events of 9-11.

SHANKSVILLE

We spoke with lots of people while in Shanksville, none of whom recalled smelling the unmistakable odor of burning human flesh on 9-11-01. We did call Val McClatchey and met with her at her real estate office. She was initially pleasant and businesslike, but as soon as we showed her our Flight 93 book, McClatchey became very surly, hostile, and defensive. During the first few minutes in her office, she described being at her home on the morning of 9-11 and hearing the purported plane crash. She said she ran and grabbed her camera, which - conveniently enough - was sitting right by the front door, and snapped her famous photo at a distance of one mile from the crash site. When questioned by us, she abruptly poo-pooed the possibility that Flight 93 might have been shot down or brought down by some other means on the morning of 9-11, and became irate when we again produced our diagram, asking how such a massive plane could fit entirely into a crater of such small proportions. We explained how scientifically and physically impossible it would be for this to happen. At this point, McClatchey's eyes began shooting daggers at us, and she became positively livid when we pointed out that the mushroom cloud in her photo is more reminiscent of an ordnance blast than a jet fuel column. She seemed more inclined to discuss the supposed lawsuit she has brought forth against the Associated Press over her 9-11 photo, apparently in an attempt to intimidate us. McClatchey has previously threatened to sue at least one other 9-11 researcher known as "Killtown" regarding this same photograph, a threat which has thus far not amounted to anything.

She then stated that she "didn't want to be around any people who question the government." Incidentally, her photo is prominently displayed throughout the city of Shanksville, in Somerset County, and is being sold at Ida's Restaurant for $20.00. Val funnels $18 from every photo sale to the Todd Beamer Foundation. But I digress. Approximately 10-15 minutes into our interview, McClatchey suddenly and unexpectedly jumped from her seat and rudely threw us out of her office, mocking and labeling us "conspiracy theorists". We point out that this realtor had no intelligent or coherent responses to the valid questions we raised, nor was she able to explain the anomalous nature of the purported plane crash. In fact, she simply dismissed the discrepancies regarding the plane and crater. Why muddy the water with facts, right Val?

We were quite intrigued by this woman's responses and her absolute unwillingness to consider basic inconsistencies with the official story. Our visit with McClatchey has served to fuel our interest even further as to just what is going on in Shanksville. In its wake, 9-11 has provided some interesting "opportunities" for at least some Shanksville locals, and the recent release of Hollywood's United 93 movie promises a potentially lucrative future for the previously unknown (pre-9/11) community. Val McClatchey made it unmistakably clear to us that she intends to milk her 9-11 claim to fame for all it's worth, truth be damned.

Ironically, we tried to use a cell phone several times while in Shanksville and the surrounding areas. We couldn't get a signal at all, no matter where we were, from the ground. This in itself is pretty interesting wouldn't you say, considering all the supposed phone calls made at 35,000 feet on the morning of 9-11?

Also, every person we spoke to told us a different rate of speed regarding Flight 93's final moments prior to impact - the speeds ranging from 330 mph to 700 mph. We couldn't get the same story twice. The more people we spoke to, the more it appeared that hardly anyone actually saw anything firsthand other than multiple sightings of Flight 93 in mid-air on the morning of 9-11. We have located no one to date who actually witnessed the plane crash-landing. Instead, we listened to many accounts from locals who appeared to be repeating what they had been told.

MORE COMMENTS FROM SHANKSVILLE LOCALS

Firefighter Rick King, owner of Ida's Restaurant

Rick couldn't explain how such a huge airplane could fit into such a small sized crater either, but quickly added that he doesn't see anything "unusual or out of the ordinary" about the official story. When asked if accident reports were filed by the NTSB for Flight 93, he stated in the affirmative. We told him the accident report, if any was filed, has not publicly emerged. He had no comment. When asked, he denied noticing any stench of burning human flesh on 9-11. However, he was able to parrot the now all-too familiar unsubstantiated tale of how debris, wreckage and human remains were found at the crash site. Naturally, he had no qualifier for this tale, and no plausible explanation as to why such a seeming wealth of wreckage, remains, and debris is mysteriously absent in publicly available photos of the Flight 93 crash site. We asked how we could locate the Mayor of Shanksville, Ernie Stull, and were advised that the Mayor was in poor health, suffering from congestive heart failure. We decided not to try to question him because of this information. Another interesting observation about Rick King: The entire time we spoke with him, he kept looking nervously from side to side and peering behind him, as if concerned about who might be watching/listening to him talk with us. Less than 15 minutes after coming out to speak with us on the sidewalk, he abruptly ended the interview and ran back into Ida's Restaurant.

Bob Schmucker, "Ambassador of Flight 93 temporary memorial"

Bob told us that the entire fuselage of Flight 93 had been pulled from the crater, describing it as "looking crumpled-up like aluminum foil when they took it out." He told us three local excavating companies were used to dig out whatever was allegedly in the smoking hole, and the excavators had gone as deep as 50 feet. He could not or would not name them. Schmucker stated that we had valid, serious questions and directed us to speak to Somerset coroner and funeral director, Wally Miller, who appears to us to be the point man in this whole mess. Schmucker also stated that a mound on the property allegedly contains both human remains from Flight 93 and ground tree limbs. He cited Wally Miller as the source of this information. This mound is located within the fenced-in area adjacent to the temporary memorial, behind the spot where the crater used to be. The crater is now completely filled in and inaccessible to the public. In fact, they don't even want you walking up to the fence line.

Vicky Rock, correspondent for The Daily American (Somerset County)

Vicky told us that not all of the people allegedly aboard Flight 93 had been identified in the analysis of human remains after the crash. She related to us that a DMORT team had assisted the FBI and the coroner Wally Miller in making positive identifications. DMORT is an acronym for "Disaster Mortuary Operational Response Team". DMORT's own website states that all of the people onboard Flight 93 were ultimately identified. However, this local correspondent firmly stated otherwise to us. She suggested we speak with Wally Miller for further clarification, which we did later.

I spoke again with Vicky Rock on May 10, 2006, and once again she refuted Miller's statement regarding the Flight 93 identifications. This time, she cited a recent comment made by a victim family member, Betty Kemmerer, who was related to Flight 93 passenger Hilda Marcin of Mt. Olive, NJ. At a meeting, Kemmerer wanted still unidentified human remains to be entombed at the memorial site. According to Vicky Rock, Kemmerer was told by officials that "they would take care of it".

Curiously, we could not purchase a copy of the September 12th issue of The Daily American from the newspaper's circulation department. We were told these issues are inaccessible and in storage, and were not allowed to photocopy the framed article from that specific date which hung on the wall of the newsroom. So, we had to make a trip to their local library, where we photocopied all of the librarian's collected news clippings pertaining to the days immediately following 9-11. Ms. Rock expressed little - if any - interest when we informed her that several of the purported passengers of Flight 93 have yet to appear on the Social Security Death Index listed as deceased, despite Miller's issuance of presumptive death certificates shortly after 9-11. She did not give us the impression that she was curious about this strange phenomenon, and during my telephone conversation with her on May 10th, she stated that neither she nor the newspaper intends to investigate the passenger list oddities, saying, "We don't think there is any story there". No story there? People issued death certificates who were purportedly killed during a 'terrorist" attack in her own community, yet not showing up on official sources as deceased years later - and this is not worthy of a second look or minimal investigation on the part of the local newspaper? Seems to me the flags at the memorial aren't the only things flapping in the wind. Speaking of furious flapping...

Wally Miller, Somerset Coroner and Funeral Director

This was the man we'd been itching to meet, since Miller was the point man who should have been able to tell us all we needed to know about Flight 93 wreckage, remains, and debris. You would think so, right? We thought Val McClatchey's behavior was suspect, but let me stress to you that it was nothing compared to what we've encountered with Wally Miller. Wally was easy enough to find, but we weren't exactly given the hometown welcome, or a civil greeting for that matter. We distinctly got the impression that he had been tipped off that we were coming to talk to him, and he grew increasingly agitated during the 3-4 minutes we were graced with his presence while standing at the side doorway of his funeral home. We had just finished walking through Wally's funeral home looking for and calling out to him, with no response. The whole place appeared shut-down and by all appearances, nothing was going on there that day in the way of viewings, etc. All the lights were off, no chapels were set-up for wakes, no flowers delivered or set-out in chapel rooms; nothing one would typically expect to see preceding such funerary-type events. When he finally answered the side door, Wally was dressed in jeans, not the somber attire of a busy funeral director. Still, Miller stressed to us how busy he was, how he had a lot going on that day, and how he had no time to talk to us. He made it sound like there were viewings scheduled and families arriving (May 2nd), yet there were zero signs of any of this during our previous walk-through of the funeral home. Plus, our car was the only one in his parking lot.

Wally immediately said he did not want to answer any questions about the movie (which we hadn't intended to ask him about anyway) and followed that up with, "I don't want to answer any questions about the remains or the wreckage." Odd, no? Who else should we ask about the remains and the wreckage if not the man who was one of the first to arrive upon the crime scene and who had jurisdiction over it? He spent the first two and a half minutes of our attempt to speak to him trying to convince us how extremely unavailable he would be that day. We tried to schedule him for later on in the afternoon to no avail. I then asked Miller if he would be open to talking to me on the phone, and he agreed to this. During our final thirty seconds at Wally's side door, I did manage ask him if all the people aboard Flight 93 had been identified, and he agitatedly said "yes".

I then repeated the contradictory comment made to us by correspondent Vicky Rock, whose statements refuted Miller's. Remember, Rock told us on that same day (May 2, 2006) that the Flight 93 identifications were incomplete and not everyone had been positively identified. Miller became even more flustered when I questioned him about this contradiction, barking out, "Yes, yes, everyone was identified." Since Miller was supposedly in charge of the Shanksville crime scene, in our view, he is a man with some answers. Strangely enough, many people had told us to go see Wally and they said he would be happy to talk to us. He has been described as a solid rock of the community and 'Mr. Unflappable". Yet clearly Wally was not happy to see or talk to us. From his demeanor, we might as well have been trying to sell him encyclopedias. Miller is cited in several 9-11 reports as having jurisdiction over this crash site, at least until the FBI descended upon the scene and claimed authority over the investigation.

I have spoken with Wally Miller via phone twice since May 2, 2006. On May 10th, during the first call attempt, Miller pretended not to remember his agreement to talk to me by phone from just a few days ago - and when I refreshed his memory, he promptly snarled, "Nahh, nahh, I've got nothing to say to you people." He then hung up on me. This took place within the span of about 33 seconds. I waited a while and then made a second call to Wally, and this time I managed to keep him on the phone a bit longer. However, Wally "Unflappable" Miller was fit to be tied during this second call. He raised his voice, "What questions? What questions?" And instead of allowing me the time he had previously agreed upon days ago and allowing me to ask my questions, he interrupted repeatedly with, "What is your theory?" I tried to explain that all I wanted to do was ask him some basic questions that really need answers, but he kept yelling instead of answering. In response to the above bellowing, I calmly stated that I didn't think the government has been entirely truthful about the events of 9-11. He responded with, "That's a bunch of hooey!!" He used words like "half-truths" in reference to the comments made to us about the fuselage by Bob Schmucker at the memorial site.

Due to his apparent and unconcealed agitation, it was very difficult talking with Miller, or even asking any of the questions I'd compiled. I brought up the matter of how several people from Flight 93, for whom he had issued presumptive death certificates shortly after 9-11, have not appeared listed as deceased on the Social Security Death Index. He became irate, and his answer was, "I don't work for the Social Security Administration." It's kind of hard for me to believe that Mr. Unflappable has conducted himself in this same fashion during countless hours of interviews he'd given in the past to scores of media correspondents. So WHY would Wally Miller flip out like this with me before I even had an opportunity to ask more than one or two of the 22 questions I'd compiled? In fact, he has acted in this manner from the very first second he saw us at his door. The question is, why?

Considering his strange responses, I asked him if he was under a gag order and unable to talk to me about the wreckage/remains. He quickly denied this, stating that he'd given many interviews before; and then in the same breath he proceeded to hurl a name at me in between the yelling. He told me to contact Bill Crowley from the FBI and ask him my questions. Bill Crowley, eh? So, Miller isn't under a gag order, but he immediately referred me to the FBI for information. This is very interesting, especially since Miller has remained accessible for so many previous mainstream interviews and has spoken at length with journalists over the last 4 ½ years. He apparently felt comfortable enough in doing those interviews, but curiously, not this one.

Moreover, if you examine those past Miller interviews, they are all pro-official story, pro-government conspiracy theory. They were softball fluff interviews, all vomiting the same questions and canned responses like a script. Obviously, he had no problem maintaining his composure or modulating his voice during those Q & A sessions. You see, those reporters asked Wally, the Rock of Shanksville, the "right" questions. And you can bet your bottom dollar he didn't send mainstream reporters scurrying off to the FBI for answers to their fluffy questions. Nope, he simply fielded them himself. Yet, he became obnoxious, uncooperative, and high-pitched with me on the phone in a matter of minutes, and then punted me to Pittsburgh FBI agent Bill Crowley. Now remember, Wally denies he is under a gag order.

So, suddenly during our second phone call, Miller barked out, "I've read your business card!! Citizens to Discredit (unintelligible word). Are you kidding me?!?" I thought for a second and replied, "Sir, I don't think I gave you a business card. In fact, I know we never gave you a business card." There was a brief pause on the line, and then Wally Miller proceeded to hang up on me once again. How odd is this? In addition, my business card does not bear the words "Citizens to Discredit ..."

It's noteworthy that I had never met or spoken to the Shanksville coroner prior to May 2nd and have only achieved three minutes of actual face time with him thus far beyond the very few minutes he spent yelling at me and hanging up on me on two separate occasions on May 10, 2006. I have come away from these three interactions with a very distinct impression: Wally Miller is afraid to talk to me for some reason, and from where I sit he's not handling the pressure of potentially "dangerous" questions too well. I absolutely have never handed him a business card, so if he did manage to see my card, there are only a few possibilities as to where he might have seen one. Greg Chiapelli and Vicky Rock are two names that immediately come to mind, since we gave both of these individuals a business card. Wally must have realized he slipped up, and so he hung up instead of explaining how he could have read a card I never gave him. Wally ...you're flapping around like a big bird.

From what we could determine from those we spoke with, the FBI took control over everything involving the crash of Flight 93 from the second they arrived. They reportedly remained on the scene for approximately 2 ½ weeks according to locals. Yet, Wally Miller also must know what was there at the crash site. He's the man who can tell us what we need to know about the plane wreckage, debris field, and human tissue remains identification. Yet, Miller isn't talking. He's flapping and balking, but he sure as hell isn't talking. It seems to me that Miller is owned by the FBI. All indicators point to a cover-up. Not surprisingly, all roads are leading toward the FBI.

Corporal Buncich, Pennsylvania State Police

We asked Officer Buncich if he had any information regarding an area of New Baltimore being cordoned off by the FBI and State Police on 9-11. He did not deny that this may have happened, but said that they had to report to any and all areas where debris/wreckage/remains had been reported on the morning of 9-11 and the days that followed. When asked if we could see copies of the State Police reports, he stated there were no reports filed by the State Police regarding 9-11, which we found most peculiar. No reports filed by the State Police? We were told that the FBI had taken charge of the crash site and investigation, and that they were the information gatherers. Buncich, with a knowing smile, coyly suggested we inquire with the FBI, adding that they would most likely be uncooperative with us.

Greg Chiapelli, Somerset Hospital, Director of Media Relations

Mr. Chiapelli advised us that Somerset Hospital received no bodies from the purported crash of Flight 93 on 9-11. We asked him if he knew of any area cordoned off in New Baltimore by the Feds and State Police, and he denied any knowledge of this. I asked him if he knew of any phone call made to Somerset Hospital on the morning of 9-11, during which ER personnel were advised to prepare to receive victims from two separate plane crashes. He was silent for a moment, and then stated he was unaware of any such call. He then proceeded to tell us that he felt very uncomfortable talking to us and would need to check us out and get clearance before he could speak any further. We asked him why he needed to "check us out" before he could talk to us about 9-11, and he replied "I have never heard of you. I need to check you out first." We provided him with our business cards for this purpose. We couldn't get him to say anything else except that he would contact us once he checked out who we were and what we do. Not surprisingly, we haven't heard from him at this point, so I will now be giving him a call to follow up.

Somerset County Volunteer Firefighter

One unidentified volunteer firefighter remarked to us that the FBI seemed to know what was going on from the minute they arrived upon the Flight 93 crash scene. He was very suspicious of this at the time, and remains so to this day. He told us that the information we want to know is most likely in the hands of the FBI or CIA and will probably never be made public. He didn't actually see anything himself, but simply repeated to us hearsay from other firemen and locals. Over and over, we listened to locals telling us about body parts and fingers being found and how human remains and plane wreckage had been discovered hanging in the infamous Shanksville crash site tree line. Yet, no publicly available photographic evidence to date supports these assertions. We wonder why many people are trying to push the notion that debris and remains would only be ejected onto one side of the crash site (the tree line), rather than on all sides, which makes much more sense. They claim that the reason we can't see any debris/wreckage/remains is because these materials are "obscured" by the trees. Yet, there should be ample evidence of debris/remains and wreckage on the other three sides of the crater as well as the tree line location. Available photos do not show any significant damage to the trees themselves, presenting only a partially burnt tree line. We have looked at some close-up photos of the trees; and no human remains, wreckage, or debris is visible. The damage presented in photos is, just as is the case with WTC 1 and 2, asymmetrical and leaves us with more questions than answers.

CONCLUSION

We also spoke with dozens of other Somerset County locals during our trip, including Terry Butler from Stoystown Auto Wrecker; two different employees of Rollock's Scrap Yard (one of whom said he saw the plane flying belly-up); and the night auditor at a motel in Somerset who provided us with some very interesting information. Needless to say, we will be returning to Shanksville in the near future to do some more digging into this puzzle. Furthermore, if our experiences in the last two weeks are any indication, this mess is going to get even weirder as the days roll by. WING TV will be heading back to Shanksville in the days ahead. The truth is out there somewhere.

[Original]
Comment on this Editorial

Editorial: AIPAC - Lobbies and Whistleblowers Yes!, Spies No!

by James Petras
www.dissidentvoice.org
May 3, 2006

The arrest of two leading members of the principal pro-Israel lobby AIPAC for procuring confidential information from a leading Pentagon official and passing it to an Israeli spymaster seems to be an open and shut case of espionage. This is especially so when the Pentagon employee later confessed and agreed to testify against the accused AIPAC leaders. AIPAC, after reviewing the case, decided to fire the two accused spies and stopped paying their legal expenses. The Israeli agent, recipient of the confidential information fled to Israel, and has refused attempts by the prosecution to interview him. The information disclosed to the Israeli state touched on very sensitive material pertaining to US strategy toward Iran and Iraq and was a grave matter of state, considering that the AIPAC functionaries passed on the information during wartime.

At first, the issue of AIPAC's involvement in a spy ring on behalf of Israel split the major pro-Israel organizations, out of fear of possible repercussions, or anger that it might hurt their credibility on pushing Israel's agenda. However the hard-line Israel Firsters soon went on the offensive, writing editorials, opinion pieces and pressing academic and professional groups to see the issue as a constitutional one of free speech. With time the liberal pro-Israelis jumped on the bandwagon pushing the issue as one of possible persecution of government whistleblowers, who act in the best interest of the government. There are many very solid reasons why the accused AIPAC leaders cannot be considered lobbyists, whistleblowers or investigative reporters seeking out "inside information."

Lobbyists, as we know them since the founding of the republic, represent a particular set of domestic interests (including foreign subsidiaries) pursuing specific sets of policies favoring the domestic groups, which they represent. Lobbyists, who represent the interests of a foreign government, are legal only when they register as foreign agents, pursuing policies, which favor their overseas paymasters. Organizations registered as foreign agents as well as all other organizations which seek and/or obtain confidential documents or information from the US government and transmit the information to foreign governments via spies in their US embassies (or directly overseas) are engaged in espionage and are chargeable as such.

The two former leaders of AIPAC charged with espionage by the Federal Government were not acting for a domestic constituency; they and their organization clearly identify their sole purpose as promoting the interests of the State of Israel. They and their organization did not register as agents of a foreign power, clearly in violation of the pertinent laws. Finally they and their organization did willingly and knowingly receive confidential information from a middle range Pentagon official regarding questions pertaining to US military strategy in a time of war and transmitted it to a Mossad agent doubling as a Political Secretary at the Israeli Embassy.

The US Government's case rests on the testimony of the former Pentagon official, the admissions and videos of the accused that they indeed received the said confidential information and relayed it to a foreign power.

The tendentious arguments put forth by apologists for the accused spies take various forms, usually attempts to blur the line between "common lobby practices" and passing confidential information to a foreign power. One argument is that "most" or "all" lobbyists, (and journalists, pundits and others), secure or try to obtain "inside" information "all the time." But this apology omits the relevant issue of securing and knowingly transmitting strategic military information vital to US war plans to a foreign power with its own specific regional interests in promoting or directing US foreign policy. Hardly a practice "most" lobbyists, if any, pursue. A further elaboration of the argument put forth by prominent ZionCons is that, the foreign power (Israel) is a "staunch ally" of the US, which "shares the same democratic values and strategic interests," converting espionage into merely "sharing intelligence." In fact some ZionCons not only defend the accused spies but chastise the US government for "holding back" information essential for Israel's security and implicitly suggesting that any high level US Administration Middle East policy debates and decisions, in principle, should be open to the Israeli Foreign Office, or at least the minutes should be forwarded to the State of Israel. No country, by law or practice is obliged to share any part of its strategic discussion with any foreign power, ally or not, at any time. This bizarre ideological concoction converts the US into a unique client of Israel... In the same vein, Israel vehemently guards, only for its eyes, all of its strategic discussions, decisions on war and peace, psych warfare, espionage and nuclear weapons plans etc from all US officials at all times. All the major pro-Israeli organizations automatically and wholeheartedly defend Israel's closed policy to the US even as many consider espionage a legitimate exercise in "information sharing".

Predictably extreme ZionCons have even gone so far as to characterize the spy investigation against the leading AIPAC functionaries as an "anti-Semitic" witch-hunt attempting to curtail "legitimate lobbying" activity. No evidence of "anti-Semitism" is ever presented, except for the charging of two Jewish functionaries of AIPAC of receiving and handing over to Israel confidential information. By the same token the trial and conviction of master spy Jonathan Pollard, who spied for Israel and was convicted and sentenced to life in prison, should be liberated and his prosecutors arrested for "hate crimes", i.e. anti-Semitism since Pollard merely exchanged several truckloads of top-secret documents with Israel. In fact, every Israeli Prime Minister has pressured US Presidents for his release to Israel where many consider him a "hero."

Fox News reporter, Carl Cameron, relying on FBI reports, documented the arrest and expulsion of over one hundred Israeli spies blatantly prowling the Pentagon and other government and military facilities between September 11 to December 30, 2001. The sheer scale of Israeli espionage operations in the US and their high-level intelligence and military operatives' access to the offices and intelligence of the US Pentagon during the Paul Wolfowitz-Douglas Feith (numbers 2 and 3 at the Pentagon) tenure may have created a sense of immunity for the AIPAC operatives in passing secret information to Israeli agents. Given the clear-cut distinction between public lobbying for specific legislation favorable to a national constituency and engaging in the secret transmission of top secret war information to a foreign power, the arrest of the "AIPAC Two" offers no threat to legitimate lobbying, to Jewish organizations or even to journalists seeking inside dope to secure a journalistic scoop.

Some Jewish and Gentile legal commentators and journalists have raised the issue of "free speech," that the arrest of the "AIPAC Two" is an infringement of the Bill of Rights and a threat to our Constitution. These legal experts apparently are unaware of the difference between speech ("We are unconditional supporters of the State of Israel") and criminal action -- obtaining highly confidential information and transmitting said information to a foreign government. To argue for "free speech" one would have to call for freedom to act on behalf of a foreign government, in time of war, in accordance with the war agenda of that foreign government. This would mean that Benedict Arnold, a kind of ersatz "lobbyist" for imperial Britain should have been released for passing documents against the independence of the United States, since he was only expressing his opinions...

The issue is not AIPAC's right to stand on a soap box declaring its fealty to Israel at every twist and turn, they have been doing that from the day of their founding and have never been prosecuted. Indeed, they have received the adulation of every President and 95% of the Congressmen and women to the tune of $5 billion dollars a year in "aid" to Israel. What is in question is when securing a yearly tribute from the US taxpayers crosses a clearly demarcated line and enters the arena of securing confidential documents and passing them over to Israel. Publicly securing "big bucks" from Congress to give to the Israeli State is legal, covert espionage for Israeli Intelligence is not or at least unless AIPAC decides to lobby Congress to pass such enabling legislation in which spying for Israel is exempt from our country's espionage laws. The defense of the accused AIPAC spies by certain progressives, including the Village Voice's Nat Hentoff, Democracy Now's Amy Goodman and even Daniel Ellsberg who argue that their prosecution will intimidate whistle blowers from exposing government malfeasance to public scrutiny. Whistle-blowers do not secure confidential information in order to inform foreign governments engaged in war plans (Iran) which will cost US taxpayers billions and the US military thousands of dead and maimed. A whistle-blower is concerned with government or corporate integrity; the activity of the Pentagon official and his AIPAC collaborators compromised the security of the US and increased the military capacity of a foreign government. Whistle-blowers seek to improve governance, the accused spies deliberately called into question out national sovereignty. Concerned whistle-blowers in the past, present and future will not be intimidated by the arrest of a Pentagon official for turning over confidential information to spies of a foreign country; their exposés are public and accord, in most cases, with the publicly articulated ethical norms of their office which are being violated by their higher-ups. The arrested Pentagon official did not go public to denounce his superior in the Pentagon, Zionist Douglas Feith for cooking up false data on Iraq's weapons of mass destruction as he might have. Instead he acted covertly, and transmitted confidential information to Israeli agents to pass on to the state of Israel in order for it to formulate a policy pushing the US toward an unprovoked, preemptive war with Iran. By this, I am suggesting that there is not only a legal basis for the espionage trial of the two AIPAC employees, but a basis for a substantive and informed judgment condemning them for aiding and abetting a brutal, aggressive, colonial power (Israel) to leverage US strategic policies into a murderous attack against Iran.

Finally some ZionCon cynics argue that since the Israel lobby is so influential and the Administration has been and continues to be riddled with pro-Israeli policy-makers, why do they need to burn two key lobbyists in the major lobby group? Since we in the US lack a comparable lobby to AIPAC in Israel and lack insiders privy to the inner workings of their secret services, we can only make some educated guesses. First and foremost, the Israeli state's intelligence services work many sources for intelligence, from official visits by friendly US policy-makers, one-sided exchanges with US intelligence agencies, to information flowing from individual and organized loyalists, to academic research, to paid Israeli agents (like Jonathan Pollard). AIPAC's spying could be simply one more source, to corroborate, confirm or contradict other sources of intelligence. Given the recent unprecedented power of the pro-Israel lobby, where Presidents, Vice Presidents, Cabinet secretaries, Congressional leaders and Governors pledge their unconditional support of Israel and even openly proclaim that US-Middle East wars are for the defense of Israel, there was no reason to suspect that a little AIPAC espionage would result in a federal prosecution. In fact, the US State and the population at large are deeply divided on the issue of fighting Middle East wars for the state of Israel. Israel and its lobby's high-powered campaign for a military attack on Iran has provoked strong opposition from former top officials, the military, the CIA -- both retired and active -- as well as from tens of millions who suffer the consequences of our "foreign entanglements."

A test of strength between the opposing camps is being waged in the prosecution or release of the accused AIPAC spies. A successful prosecution would, at least, raise questions about the purposes and legitimacy of the pro-Israel war lobby. The dismissal of charges, which seems very possible or probable (given the mass one-sided propaganda effort), would be one more victory (this time in the Judiciary branch) for the pro-Israel powerhouse, which already has dominant influence in the Congress and the Executive branches of the government. A judicial victory would mean that the Lobby has political immunity to go about its business of promoting Israeli power by any means necessary. A democracy thrives on dissent; a democracy dies from deceit.

James Petras, a former Professor of Sociology at Binghamton University, New York, owns a 50-year membership in the class struggle, is an adviser to the landless and jobless in Brazil and Argentina, and is co-author of Globalization Unmasked (Zed). His book with Henry Veltmeyer, Social Movements and State Power: Brazil, Ecuador, Bolivia and Argentina, was published in October 2005. He can be reached at: jpetras@binghamton.edu.

Original
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Editorial: Israeli Soldiers Shoot Two International Peace Activists In The Head

International Solidarity Movement
12/05/2006

Israeli Soldiers Shoot Two International Peace Activists In The Head at Bil'in

May 12th, 2006 | Posted in Press Releases, Bil'in Village, Video, ISM Media Alerts, Photos


To view the video footage that Phil, who was hit in the head with a rubber bullet, was filming when he was shot click one of these links: Streaming. Download. In the clip you can see how close the demonstartors were to the soldiers when the soilders opened fire - the sound of the shots fired is clearly audible.

"I saw blood gushing out of his head, and helped bandage it. As we were getting him into the ambulance an Israeli soldier grabbed his long hair and they all tried to stop him from leaving in the ambulance even though they knew he was injured", said American eyewitness Zadie Susser who saw Phillip Reiss from Austraila sitting in shock immediately after he was hit.


At today's Bil'in demonstration, Israeli soldiers shot seven Palestinians with rubber bullets. One Australian and one Danish demonstrator were hospitalised after being shot in the head with rubber bullets at close range.

AFP Cameraman Jamal Al Aruri was shot in the hand with a rubber bullet while he was filming two of his fingers were broken. Adeba Yasin (65) was hit by a rubber coated bullet under her eye while she was sitting on the balcony of her home.

Phillip Reiss (25) from Sydney, Australia was shot as he was running away - he had been filming the demonstration. BJ Lund (21) from Ry, Denmark was also shot as he was standing near army jeeps. Both Phil and BJ are currently in Tel Hashomer hospital in Tel-Aviv. The bullet caused a hemorrhage to Phil's brain, though he is now conscious. BJ required stitches to the head.



Abed Al Karim Khatib (60) was hit by a rubber coated bullet in his private parts, Abed Albased Abu Rahme (15) was hit on his thigh by a rubber coated bullet and Waleed Mahmoud Abu Rahme (20) was hit in his abdomen by a rubber coated bullet. Mohammad Ahmad Issa was hit in the leg with a rubber bullet. Wajdi shokut (18) was hit by a rubber coated bullet in the hand

Ashraf Muhammed Jamal (24) was hit by a tear gas canister aimed at his head.



Abdullah Abu-Rahme (35 and the Co-ordinatior of the Bil'in Popular Committee Against the Wall), Muhammad Al Katib (32, also from the Popular Committee) and Akram Al Katib (34) were beaten.

The demonstration of about 300 people had marched, singing, chanting and waving flags to the gate in the apartheid barrier.

This week, the gate had been locked open, so the Israeli soldiers relied on their jeeps and barbed wire to stop the people of Bil'in from walking into their land. After a while, some of the demonstrators started to open the barbed wire. The Israeli soldiers started hitting people with clubs. A few rocks were thrown from a small group of youth who were away from the main demonstration in front of the jeeps. The soldiers then started firing on the peaceful demonstrators at near point-blank range as they were running away - they were a maximum distance of 10 meters away when shot.

According to Israeli Human Rights group B'Tselem, Israeli Military Regulations stipulate that "the minimum range for firing rubber-coated steel bullets is forty meters. The Regulations emphasize that the bullets must be fired only at the individual's legs, and are not to be fired at children" Israeli soldiers fire rubber-coated steel bullets at Palestinian children during the Bil'in demonstration every week. Israeli demonstrator Matan Cohen was recently shot in the eye during a demonstration in Beit Sira. He now has only partial sight in that eye.

The Israeli military usually uses rubber bullets during demonstrations when Israeli and international activists are present. When Palestinians demonstrate on their own the military uses live ammunition or rubber coated steel bullets.


Two of the demonstrators that were shot from close range were filming the demonstartion. British attorney general, Lord Goldsmith confirmed on the 6th of May he was considering whether to seek the extradition and prosecution of an Israeli soldier who shot dead British cameraman James Miller in Gaza, after a jury in a British inquest unanimously agreed that "Mr Miller was indeed murdered"

Eleven Palestinians have been killed by Israeli soldiers during non-violent demonstrations against the apartheid wall.

On Sunday, May 14, the Israeli Supreme Court will hear Bil'in's legal challenge over the theft of their land by the illegal wall.

Bili'in villagers have been protesting the wall nonviolently for the last 15 months and have become a symbol of Palestinian-Israeli-International cooperation.

The route of the wall in Bil'in is designed to annex the settlement of Modi'n Elite and it's outpost, Matityahu Mizrah, to Israel along with the land belonging to Bil'in so that these illegal settlements can continue to grow.

In a separate court case brought by the village and Peace Now against the new settlement of Matityahu Mizrah, the High Court was told of a land-laundering scheme that allowed the real-estate dealers and settler organizations to convert private land - "purchased" sometimes through dubious means - into "state land.." Then, before the construction of the separation barrier, the land was "returned" to the buyers so that they could establish facts on the ground and press the Defense Ministry into moving the route of the fence to the east of the new illegal neighborhood.

After being prodded by the Supreme Court, the Israel Police's National Fraud Squad opened a criminal investigation into the illegal construction of hundreds of housing units in the Matityahu East "neighborhood" of the Modi'in Ilit settlement.

According to Israeli newspaper Haaretz, hundreds of millions of dollars are believed to have changed hands in the affair.


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I Spy


Online Groups Reveal Details, Legalities of NSA Surveillance

By K.C. Jones
TechWeb.com
Fri May 12, 2006

Recent reports that the National Security Agency spied on Americans expand upon allegations in federal lawsuits alleging that telecommunications companies helped the NSA secretly spy on Americans.

In the Electronic Frontier Foundation's class action lawsuit against AT&T, a former phone company technician explained how he thinks he unknowingly assisted the program toward the end of his 22-year career with the company. Though Mark Klein's declaration is under seal, other federal court documents provide a glimpse into how the retired AT&T communications technician believes his company cooperated. Internet liberties advocates claim the programs are illegal.

"Mr. Klein was required to connect fiber optic circuits carrying AT&T customers' private Internet-based data to a device that diverted that same data to a room controlled by the government," his layer wrote in papers filed in federal court last week.
"When reports of the government's extensive surveillance program surfaced in December 2005, Mr. Klein realized that he was a witness to (and unwitting participant in) a massive effort that had the effect, if not the purpose, of violating the rights of millions of Americans."

Klein's lawyer also explained that Klein repaired and maintained fiber optic cables that carry Internet data from all over the world through an AT&T central switch in San Francisco.

"What he observed - that the signal carrying the Internet data over the fiber optic cables was "split" such that an exact copy of the data was redirected to the National Security Agency - had been the topic of public discussion months before he went public with his observations," court document state. The filings were part of an attempt to lift the seal from Klein's full statements, which would likely reveal even more detail.

Intelligence leaders and the White House claim the NSA has always operated within the law and that its surveillance programs are crucial for maintaining national security. They have argued military and state secrets privileges should allow them to keep the details of surveillance under wraps and that presidential war powers allow the surveillance.

A statement released on the non-partisan Center for Democracy & Technology Web site this week, tackles those arguments and claims that the surveillance appears to be illegal no matter how it was done.

"If the program involved real-time interception, it probably violated both the Foreign Intelligence Surveillance Act and the statute on interception of call detail information in criminal cases," the center's analysis claims. "Both statutes require a court order for interception of information about calling patterns, even if the content of the communication is not collected."

The CDT claims FISA defines "content" in broad terms, including not only the substance of communications but also information that the communication occurred. The group also claims that even non-content information requires a "pen register." The CDT cites two federal laws prohibiting the NSA from retrieving stored information, without obtaining prior judicial approval.

Section 222 of Title 47 of the United States Code requires telecommunications carriers to protect confidentiality of proprietary information relating to carrier services. Section 2702 of Title 18 in the Electronic Communications Privacy Act prohibits electronic communications service providers from knowingly divulging a record or other information pertaining to a subscriber or customer to any government entity without customer consent, subpoena or court order. The privacy act also creates civil liabilities and provides for minimum fines of $1,000 per violation, punitive damages and attorney fees.

"This latest disclosure reinforces what CDT and others in the public interest community have been saying for months," CDT stated. "Congress needs to conduct a comprehensive in-depth and public inquiry into the scope of warrantless domestic surveillance."

The U.S. Department of Justice just closed an investigation into wiretapping the administration claimed was targeted at international communications because investigators were denied access and information. The revelation this week that domestic call information is stored in a huge database that could likely analyze call patterns - and match patterns with other databases containing personal information - is prompting renewed calls for investigation among advocacy groups and elected representatives.

The CDT stated that American citizens and leaders should have a full understanding of whether the "snooping is properly focused," rather than accepting assurances that the NSA spying programs respect the rights of ordinary Americans.



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NSA routing internet data thru Amsterdam to monitor U.S. websites and e-mail

by Tom Flocco

Tulsa-May 15, 2006-TomFlocco.com-An internet routing plot plan verifying the exact travel of website data has revealed that stories and other communications e-mailed from a Pennsylvania computer to be posted at a server in Tulsa, Oklahoma are first routed into Denver / Colorado Springs and then across the Atlantic to Amsterdam, Holland, back through Denver and then to the hosting server in Tulsa.

The discovery was made by the webmaster for TomFlocco.com after becoming curious about the internet route taken by the data and the length of time it took to post a new story when the data only had to travel over the webmaster's phone line across the state to the hosting server in Tulsa.

After contacting a U.S. intelligence source, we were told that Department of Justice (DoJ) investigators have identified an Israeli intelligence internet provider in Amsterdam as a co-conspirator with both the National Security Agency (NSA) and Verizon-MCI in the ongoing Bush administration spy intrusion into the private and personal lives of millions of Americans without their previous knowledge or permission.
Another federal agency official with long-time experience and impeccable credentials told us, "MCI is an NSA shadow company. Just remember that MCI equals NSA and you'll always be correct in your research and investigation."

On February 14, 2005, Verizon announced its intention to purchase MCI for $6.7 billion, after which the company became involved in a strained bidding war with Qwest Communications.

MCI investors sharply criticized the Verizon takeover which was recently finalized; but federal prosecutors probing NSA spying will have reason to subpoena Verizon regarding whether the Bush administration's approval of Verizon's MCI takeover had anything to do with the company's willingness to provide private phone and email records to the NSA to spy on U.S. citizens.

U.S. intelligence sources within the Special Operations Group (SOG) are reporting that NSA computers have been downloading financial and personal files of all American citizens as a result of upgrades to the Echelon satellite network and software program which is part of the Prosecutor's Management Information System (PROMIS).

SOG says the NSA has a "7-10 second lead time" which effectively affords the agency the opportunity to delay the release of currency, stock and bond sales transactions permitting a criminal advantage to agency officials and other high-level associates who game the system of the world's financial markets to steal investment capital from both U.S. and foreign citizens throughout the world.

Personal phone service shut down after posting story

A TomFlocco.com phone call on Friday to Verizon seeking comment for this report on why the company provided personal phone records to the NSA without the knowledge or permission of its customers resulted in a "no comment" response from a Verizon spokesperson identifying herself only as Mrs. Singh: "We are not able to comment on whether we have cooperated with the NSA in this matter since this is a classified issue; but we're confident that we are within the law. We are protecting your privacy but we cannot comment further."

When we asked whether Verizon would deny helping the NSA to spy on Americans, Mrs. Singh's response was "we cannot comment on that."

We also asked to speak to the Verizon legal or security departments, or even the consumer public relations department for a comment; but we were told "We appreciate that this matter is causing concern among our customers but it will not be possible for you to speak to either group. We cannot comment on whether we cooperated with the NSA because it's classified."

Later that afternoon, wide news reported indicated that Verizon was sued for $5 billion for illegally providing phone numbers and records to the NSA without the knowledge or permission of Verizon customers.

On Saturday evening after the Friday call to Verizon, we posted a short new story, "Phone companies help NSA spy on personal computers for enemies list" in the IN BRIEF box at TomFlocco.com.

After the story was posted, our personal office hard-line telephone service with Verizon was shut down at about 1:30 am Sunday morning with that office line remaining out of service for over 23 hours before this story was posted online.

Internet IP address logs from this writer's computer firewall security system provide evidence that the Department of Defense (DoD) is conducting surveillance, since logs show DoD internet identification numbers during specific occasions while we conducted phone interviews with intelligence agents and other sources, and also while reports were being researched and word processed for stories regarding White House crime family activities.

NSA spying on dial-up, high-speed internet e-mail and websites for 'enemies list'

A U.S intelligence source wishing to remain anonymous but who has direct knowledge of the operations said U.S. cable internet corporations have joined the widely-reported telephone company operations to assist in compiling the largest database in history on American citizens while "using super-secret 5th generation Cray computers to tap into dial-up, DSL and high-speed broadband internet connections which have satellite voice recognition and keystroke monitoring capabilities."

This is the first indication that the NSA is also monitoring websites and personal e-mail communications of American citizens without their knowledge or permission.

The government official said "the voice patterns and voice print recognition comes from the original Inslaw systems which are hooked up to E-Systems Dallas voice recognition software and linked over to the NSA."

The long-time agent added that "part of the reason they are spying on Americans is to create an 'enemies list' of those critical of George W. Bush," adding "the monitored phrases and words trigger networks of contacts between people around the country who are inter-related to other activists regarding issues such as the Iraq War, NSA spying, illegal immigration and critical reporters."

The unnamed official also told us "the U.S. and foreign intelligence community has been using lead bags for the purpose of preventing satellite surveillance and physical reconnaissance ever since the Bush administration commenced a national spy program."

On condition of anonymity, the source added, "driver's licenses are already set up with chips for future use in capturing financial, medical and other personal and/or private records and information for use by the Bush administration and Congress to maximize tax compliance, national identification or for potential political purposes."  

NSA/Treadstone spy-death lists?

The Bush spy program enemies list "would be used to organize groups for internment camps-particularly the big camp being developed in northeast Yuma county, Arizona where most of the 'problem patriots and activists' would be housed if Mr. Bush is allowed to remain in power during another major terrorist or biological event," said the unnamed federal agent.

An October 27, 2001 report in the Houston Chronicle confirmed the existence of secret surveillance lists, and that NSA lawyers ordered a massive shredding program of the names and phone numbers of innocent Americans in late October, 2001; but the NSA made copies of the unlawful list, according to two former U.S. officials.

Federal prosecutors will likely have interest in the fact that the NSA reportedly mailed the list to then Under Secretary of State and current White House Chief of Staff John Bolton who emailed the list to Treadstone Space #77 in Colorado.

"All political critics of the Bush or Clinton families have had their names, phone numbers and addresses stored by the NSA at Treadstone Space #71/77," said national security expert Thomas Heneghan, who confirmed another federal agent's assertion that the NSA is being assisted by MCI regarding the Bush administration spy operation on the American people.

"#77 is the Colorado division of # 71 in New York State which is also linked to secret FBI Division 5 operations connected to both the Bush and Clinton families without the knowledge of U.S. citizens," added Heneghan.

The national security watchdog said "the Bush-Clinton crime families are planning a bird flu pandemic as an excuse for a temporary martial law government to cover up ongoing corruption and crimes committed against the American people."

A flu pandemic would allow Mr. Bush to suspend constitutional rights and round up patriot critics on the NSA/Treadstone death-spy list where they could transport innocent U.S. citizens who are politically outspoken to internment camps in locations such as the one in Yuma county, referred to earlier by another federal agent.

Heneghan added that U.S. Senate Leader and GOP presidential candidate William Frist and House of Representatives Democratic Minority Leader Nancy Pelosi are both aware of the Treadstone death list and also the Bush administration spy operations conducted by the NSA-both overseas and in the United States.

Representative Rahm Emanuel (D-IL-5) was identified by Heneghan as "an Israeli intelligence operative in Congress who actually carries copies of the updated [NSA/Treadstone] death-spy list to his office each day," raising questions as to whether alleged operatives loyal to foreign governments are only welcome in the U.S. House of Representatives.



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Spy Agency Watching Americans From Space

By KATHERINE SHRADER
Associated Press
Sat May 13, 2006

WASHINGTON - A little-known spy agency that analyzes imagery taken from the skies has been spending significantly more time watching U.S. soil.

In an era when other intelligence agencies try to hide those operations, the director of the National Geospatial-Intelligence Agency, retired Air Force Lt. Gen. James Clapper, is proud of that domestic mission.

He said the work the agency did after hurricanes Rita and Katrina was the best he'd seen an intelligence agency do in his 42 years in the spy business.
"This was kind of a direct payback to the taxpayers for the investment made in this agency over the years, even though in its original design it was intended for foreign intelligence purposes," Clapper said in a Thursday interview with The Associated Press.

Geospatial intelligence is the science of combining imagery, such as satellite pictures, to physically depict features or activities happening anywhere on the planet. A part of the Defense Department, the NGA usually operates unnoticed to provide information on nuclear sites, terror camps, troop movements or natural disasters.

After last year's hurricanes, the agency had an unusually public face. It set up mobile command centers that sprung out of the backs of Humvees and provided imagery for rescuers and hurricane victims who wanted to know the condition of their homes. Victims would provide their street address and the NGA would provide a satellite photo of their property. In one way or another, some 900 agency officials were involved.

Spy agencies historically avoided domestic operations out of concern for Pentagon regulations and Reagan-era executive order, known as 12333, that restricted intelligence collection on American citizens and companies. Its budget, like all intelligence agencies, is classified.

On Clapper's watch of the last five years, his agency has found ways to expand its mission to help prepare security at Super Bowls and political conventions or deal with natural disasters, such as hurricanes and forest fires.

With help, the agency can also zoom in. Its officials cooperate with private groups, such as hotel security, to get access to footage of a lobby or ballroom. That video can then be linked with mapping and graphical data to help secure events or take action, if a hostage situation or other catastrophe happens.

Privacy advocates wonder how much the agency picks up - and stores. Many are increasingly skeptical of intelligence agencies with recent revelations about the Bush administration's surveillance on phone calls and e-mails.

Among the government's most closely guarded secrets, the quality of pictures NGA receives from classified satellites is believed to far exceed the one-meter resolution available commercially. That means they can take a satellite "snapshot" from high above the atmosphere that is crisply detailed down to one meter level, which is 3.3 feet.

Clapper says his agency only does big pictures, so concerns about using the NGA's foreign intelligence apparatus at home doesn't apply.

"We are not trying to examine an individual dwelling, for example, because what our mission is normally going to be is looking at large areas," he said. "It doesn't really affect or threaten anyone's privacy or civil liberties when you are looking at a large collective area."

When asked what additional powers he'd ask Congress for, he said, "I wouldn't."

Comment: Clapper can spy on anyone, anywhere, at any time. What more power does he need??


His agency also handles its historic mission: regional threats, such as Iran and North Korea; terrorist hideouts; and tracking drug trade. "Everything and everybody has to be some place," he said.

He considers his brand of intelligence a chess match. "There are sophisticated nation states that have a good understanding of our surveillance capabilities," including Iran, he said. "What we have to do is counter that" by taking advantage of anomalies or sending spy planes and satellites over more frequently.

Adversaries who hide their most important facilities underground is a trend the agency has to work at, he said.

NGA was once a stepchild of the intelligence community. But Clapper said it has come into its own and become an equal partner with the other spy agencies, such as the
CIA.

Experience-wise, the agency is among the youngest of the spy agencies. About 40 percent of the agency's analyst have been hired in the last five years.

"They are very inexperienced, and that's just fine. They don't have any baggage," said Clapper, who retires next month as the longest serving agency director. "The people that we are getting now are bright, computer literate. ... That is not something I lie awake and worry about."



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Bush defends spy agency's US phone record collection; Verizon sued

AFP
May 13, 2006

WASHINGTON - US President George W. Bush moved to quell a firestorm over his government's secret collection of telephone records of tens of millions of citizens, insisting they were needed to "target Al-Qaeda".

But the latest controversy has already spawned a major lawsuit against Verizon, one of the telephone companies involved, and members of Congress expressed unease over what they see as erosion of privacy.

The lawsuit, filed in New York on Friday, seeks five billion dollars in damages from Verizon, alleging that the company broke the law by agreeing to provide the National Security Agency with its clients' telephone records.
The plaintiffs argue that phone companies should not cooperate with the NSA, which specializes in electronic espionage, without a proper court warrant based on a well founded "suspicion of terrorist activity or other criminal activity".

But in his weekly radio address, Bush rushed to assure the public the secret program did not target innocent citizens.

"It is important for Americans to understand that our activities strictly target Al-Qaeda and its known affiliates," he said Saturday.

But he gave no answer to questions raised in Congress as to why a program with a purported narrow target would need such a massive database.

The existence of the program was first disclosed this week by USA Today, which said the database compiled by the NSA following the September 11, 2001 attacks contained phone records of tens of millions of Americans provided by AT and T, Verizon and BellSouth.

Officials would not provide any details on how the records were used. But former government security experts and media reports indicated that its genesis lay in US phone numbers found on Al-Qaeda suspects captured overseas.

These numbers, the experts said, immediately became the focus of the NSA's attention, with the circle of surveillance growing exponentially as calls were made to or from the numbers in question.

Specially designed computer programs watch for patterns in these contacts and analyze them to make sure no terrorist cell is operating within the United States.

Bush said the intelligence activities he had authorized were "lawful" and that members of Congress from both parties had been adequately briefed.

"The privacy of all Americans is fiercely protected in all our activities," he insisted. "The government does not listen to domestic phone calls without court approval."

The new controversy follows charges that Bush may have broken the law when he authorized the NSA in the wake of September 11 to conduct wiretaps -- without a court-issued warrant -- of international phone calls made by Americans suspected of terrorist ties.

But while the wiretaps put the White House on the spot, the new revelations could mean a world of legal and financial trouble for the phone companies.

The lawsuit in New York was filed under the 1986 Stored Communications Act, which expressly forbids the companies from turning over customers' records to the government without a warrant.

The statute also gives consumers the right to sue for violations of the act and allows claims of at least 1,000 dollars for each violation.

"If you've got 50 million people, that's potentially 50 billion dollars," said Peter Swire, a law professor at Ohio State University and a former White House adviser on privacy issues.

A Newsweek poll released Saturday showed that a majority of Americans, 53 percent, believe the NSA's telephone database goes too far in invading privacy.

But in a Washington Post and ABC television poll released Friday, 63 percent said the secret program was acceptable.



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NSA has your phone records; 'trust us' isn't good enough

USA Today Opinion
Fri May 12, 2006

The government is secretly collecting the phone records of millions of Americans.

Stop and think for a moment about the meaning of that simple, startling fact, exposed Thursday in a remarkable report by USA TODAY's Leslie Cauley.

In the narrowest interpretation, of course, it is benign. Possibly even helpful. It means that the National Security Agency (NSA) - the Pentagon-run spy agency that monitors communications - is using a new tool to hunt terrorists: Monitor phone traffic to identify threats and stop them.

This is all it means, President Bush told the public Thursday in a brief appearance aimed at quelling the instant outrage provoked by the story. He assured Americans that their civil liberties were being "fiercely protected" and that the government was "not mining or trolling through the personal lives of millions of innocent Americans."

In other words, never mind appearances. Trust us.

Well, that is not all it means. Nor can the president's promise to protect privacy be reliably kept.
The fact that the government is trying to track (but not wiretap) every call you make and every call you receive - at home or on your cellphone is, to say the least, disturbing.

It means that your phone company (if you are a customer of AT&T, BellSouth or Verizon) tossed your privacy to the wind and collaborated with this extraordinary intrusion, and that it did so secretly and without following any court order.

That is, unless you're lucky enough to be served by Qwest, the one major phone company that had the integrity to resist government pressure.

It means that unless public opposition changes the government's course, this database will be compiled, updated and expanded into the indeterminate future, through countless administrations with who-knows-what interests and motives.

Only the most naive and unsuspicious soul could trust that it will remain safe, secured and for the eyes only of those hunting terrorists.

One need look no further than past abuses of power to be uncomfortable about the future.
Richard Nixon during Watergate. Lyndon Johnson during the Vietnam War. J. Edgar Hoover during his long reign as
FBI director.

Even assuming that the Bush administration's motives are pure, and that this program merely looks for patterns of calls that could reveal terror networks, it raises a number of troubling questions:

Is it legal? Bush insists it is, but that's questionable. The 1978 Foreign Intelligence Surveillance Act requires a court order to gather a person's current phone records. A 1934 law requires phone companies to protect customers' privacy. And the Fourth Amendment forbids "unreasonable searches and seizures."

Is it useful? Taken as a whole, such a database is of dubious utility. U.S. intelligence-gathering agencies are already suffering from an abundance of raw information and a dearth of good intelligence. Looking for suspicious patterns among billions of phone numbers seems like the ultimate search for a needle in a haystack.

Is it foolproof? These types of databases invariably have errors. The federal terrorist "watch list," which is used to screen airline passengers, has ensnared a number of innocent travelers - among them Sen. Edward Kennedy (news, bio, voting record), D-Mass., and a 23-month-old toddler - whose names are similar to, or the same as, suspects on the list. Once you're mistakenly targeted, the error can be nearly impossible to fix and your life can be turned upside down.

Will it be abused? Maybe not at first. Over time, however, this vast quantity of data is a potentially irresistible tool for government officials who want to zero in on individual Americans.

At the very least, one can imagine this information being used by law enforcement agencies trying to trace people who have attracted their attention but about whom they don't have enough information to justify a court order. Or to look for whistle-blowers who have leaked sensitive information to reporters.

Consider what happened in the 1960s and '70s, the last time federal law enforcement and national security agencies launched mass snooping expeditions against U.S. citizens. The FBI, which became a clearinghouse for the data, sent them to the CIA, the Justice Department and the IRS, where some of the data were used in tax probes.

"Information that should not have been gathered in the first place has gone beyond the initial agency to numerous other agencies and officials, thus compounding the original intrusion," concluded a committee chaired by Sen. Frank Church, D-Idaho, which investigated and reported on the abuses in 1976. The amount of information was "so voluminous," it was difficult "to separate useful data from worthless detail."

NSA's technological capabilities, the Church Committee wrote, are a "sensitive national asset" valuable to the national defense. Even so, it warned, "if not properly controlled ... this same technological capability could be turned against the American people, at great cost to liberty."

The panel's conclusions about NSA are as valid today as they were then.

The phone record program serves as a powerful reminder of how, in a digital age, records can be compiled and analyzed in ways you are unaware of.

And combined with a separate NSA program (revealed in December by The New York Times) to eavesdrop without warrants on international calls from the USA, it raises the question of what other secret and constitutionally suspect programs the Bush administration might still be shielding.

Air Force Gen. Michael Hayden, who headed the NSA for six years and is now Bush's nominee to be CIA director, is a master of evasion. Speaking in January about the international eavesdropping, he said the program is not a widely cast "drift net" but is narrowly "focused" and "targeted."

Perhaps. But, at the time, he was fully aware of a program that is many of the things the other is not. A 2006 version of the Church Committee is needed to investigate the anti-terror programs created in the scary aftermath of 9/11, and the Senate should hold up Hayden's nomination until all its questions are answered.

Creating a huge, secret database of Americans' phone records does far more than threaten terrorists. It is a deeply troubling act that undermines U.S. freedoms and threatens us all.

The White House declined to provide an opposing view to this editorial.



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Dick Cheney pushed for unfettered domestic wiretaps

AFP
May 14, 2006

NEW YORK - US Vice President Richard Cheney pushed after the September 11 attacks for practically unlimited intercepts of domestic telephone calls and e-mail messages without court warrants in the hunt for terrorists, a US newspaper reported.

Citing two unnamed senior intelligence officials, the The New York Times newspaper said lawyers for the National Security Agency, reluctant to approve any eavesdropping without warrants, insisted in late 2001 that it should be limited to communications into and out of the country.

The NSA's position ultimately prevailed. But just how General Michael Hayden, the director of the agency at the time, designed the program, persuaded wary NSA officers to accept it and sold the White House on its limits is not yet clear, the report said.

President George W. Bush on Monday named Michael Hayden to lead the CIA.
By several accounts, General Hayden, a 61-year-old Air Force officer who left the agency last year to become principal deputy director of national intelligence, was the man in the middle as Bush demanded that intelligence agencies act urgently to stop future attacks, the paper pointed out.

On one side was a strong-willed vice president and his longtime legal adviser, David Addington, who believed that the Constitution permitted spy agencies to take sweeping measures to defend the country, The Times said.

On the other side were some lawyers and officials at the largest American intelligence agency, which was battered by eavesdropping scandals in the 1970s and has since wielded its powerful technology with extreme care to avoid accusations of spying on Americans, the report noted.

As in other areas of intelligence collection, including interrogation methods for terrorism suspects, Cheney and Addington took an aggressive view of what was permissible under the Constitution, according to The Times.

If people suspected of links to Al-Qaeda made calls inside the United States, the vice president and Addington thought eavesdropping without warrants "could be done and should be done," the paper said.

It quotes one of the officials as saying that there was "a very healthy debate" over the issue.

The vice president's staff was "pushing and pushing, and it was up to the NSA lawyers to draw a line and say absolutely not," the official said.

Both officials said they were speaking about the internal discussions because it was important for citizens to understand the interplay between Cheney's office and the NSA.



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War Pimp Cheney's suspicions of Iraq WMD probe, CIA spy outed in legal documents

AFP
Sun May 14, 2006

WASHINGTON - US Vice President Richard Cheney was deeply suspicious of a 2002 probe into whether Iraq had tried to purchase uranium ore from Niger, as well as of a CIA operative's personal role in the effort, newly released legal documents show.

The documents, filed by special prosecutor Patrick Fitzgerald in federal court here, contain direct evidence that Cheney believed Valerie Plame, an undercover CIA operative at the time, might have helped engineer a trip to Niger by her husband, retired ambassador Joseph Wilson, on a mission not authorized by the White House.
The trip, undertaken on behalf of the CIA, helped dispel suspicions that the government of Iraqi President
Saddam Hussein had tried to procure the ore known as "yellowcake" from the African nation as part of a secret effort to reconstitute a nuclear weapons program.

Charges that Saddam was trying to build an arsenal of weapons of mass destruction served as the prime rationale for the launch the March 2003 invasion of Iraq. No such weapons have subsequently been found.

Wilson publicized his findings in a 2003 article in The New York Times, in which he accused the Bush administration of "exaggerating the Iraqi threat" in order to justify the war.

His conclusion also undercut an assertion made by
President George W. Bush in his 2003 State of the Union address that "Saddam Hussein recently sought significant quantities of uranium from Africa."

Shortly thereafter, Plame's name was illegally leaked to conservative columnist Robert Novak, who made it public by including it in his column, effectively ending the woman's
Central Intelligence Agency career.

The documents, filed by special prosecutor Patrick Fitzgerald Friday, do not contain a smoking gun pointing to a specific White House employee behind the leak, which is now the subject of a criminal investigation.

But they show that Cheney was upset by both Wilson's mission to Niger and Plame's suspected role in launching it long before her public outing.

The filing contains a copy of Wilson's article with angry notes scribbled by the vice president on the margins.

"Have they done this sort of thing before?" Cheney queried. "Send an amb. (ambassador) to answer a question? Do we ordinarily send people out pro bono to work for us? Or did his wife send him on a junket?"

According to the documents, Cheney also notified his then-chief of staff, Lewis "Scooter" Libby, that Wilson's wife worked at the CIA about four weeks before her identity was illegally disclosed.

That contradicts Libby's earlier assertions that he had learned about Plame from the media.

Libby was formally indicted