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The UN High Commissioner for human rights in Bosnia, Madeleine Rees, demands that colleagues involved in the sex trade in Bosnia, including some UN officials, international peacekeepers, and police, be stripped of their immunity and prosecuted. She accuses Jacques Paul Klein, the former head of the UN mission in Bosnia, of not taking UN complicity in the country’s increasing sex trade seriously enough. There has been a recent upsurge in the trafficking of women in Bosnia, with reports documenting women as young as 12 years old being kidnapped from their homes in eastern Europe and being forced into prostitution by organized criminal gangs. The demand for young women in Bosnia began in the mid-1990s with the arrival of tens of thousands of male UN personnel. Some UN personnel and international aid workers have been linked to prostitution rings in the area. Rees says private contractors such as DynCorp are major contributors to the problem. She goes on to explain how foreign nationals enjoy immunity from punishment, and how no one is prosecuted if a brothel is raided and UN police are found inside. Jan Oskar Solnes, a spokesman for the European Union Police Mission in Bosnia and Herzegovina, responding to Rees comments, says: “It’s correct we have diplomatic immunity, but I imagine any incident [of sexual misconduct] would be a personal rather than professional matter.” Kirsten Haupt, a spokeswoman for the United Nations Liaison Office (UNLO) in Bosnia, says, “All cases have been thoroughly investigated. We have sent a number of officers home. There is absolutely no toleration of a ‘boys will be boys’ attitude here.” Also, an unnamed spokesman for DynCorp says, “We do not make it a practice to comment on opinions… However, we are familiar with previous public statements Ms. Rees has made about involuntary servitude and DynCorp continues to share her concerns for women held against their will in Bosnia, just as we condemn all human rights abuses anywhere in the world.” [Scotsman, 2/9/2003]
CIA Director George Tenet briefs National Security Adviser Condoleezza Rice on the forthcoming rendition of al-Qaeda figure Hassan Mustafa Osama Nasr from Italy to Egypt (see Noon February 17, 2003). According to a senior CIA officer who GQ magazine will say is “directly involved,” Rice approves the mission, but worries how she will tell President Bush. [GQ, 3/2007 ]
The US Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) raises the fuel economy standard to a 22.2-mpg fleet average—an increase of only 1.5 miles per gallon—to take effect over the next three years. [US Department of Transportation, 4/1/2003] But loopholes in the regulations will result in a mere overall net increase of .3 miles per gallon. Though the administration cites the new standard as evidence of its commitment to improving air quality, critics note the negligible effect the increase will have and say that it represents only what the automobile industry was intending to do anyway. The auto industry has long complained that increasing fuel economy standards is too expensive and would negatively affect vehicle safety—assertions disputed by the National Academies of Science. [Associated Press, 4/1/2003; Alliance to Save Energy, 4/1/2003; Union of Concerned Scientists, 8/10/2005]
White House envoy to Iraq Zalmay Khalilzad writes in an op-ed piece published in the Wall Street Journal: “The coalition supports the formation, as soon as possible, of the Iraqi Interim Authority—a transitional administration, run by Iraqis, until a government is established by the people of Iraq through elections. The Interim Authority should be broad-based and fully representative.” [Wall Street Journal, 4/17/2003]
Lt. Gen. Jay Garner, director of the Pentagon’s Office of Reconstruction and Humanitarian Assistance, tells reporters: “The new ruler of Iraq is going to be an Iraqi. I don’t rule anything.” [American Forces Press Service, 4/24/2003]
Lt. Gen. Jay Garner, director of the Pentagon’s Office of Reconstruction and Humanitarian Assistance, says during a discussion with about 60 selected Iraqi technocrats and academics: “I think you’ll begin to see the governmental process start next week, by the end of next week. It will have Iraqi faces on it. It will be governed by the Iraqis.” [Washington Post, 4/24/2003; BBC, 4/24/2003]
Defense Secretary Donald Rumsfeld tells the Associated Press, “If you’re suggesting, how would we feel about an Iranian-type government with a few clerics running everything in the country, the answer is: That isn’t going to happen.” [Associated Press, 4/25/2003; Guardian, 4/25/2003]
President Bush, in discussion on the future of Iraq at the Performing Arts Center in Dearborn, Michigan, says: “As freedom takes hold in Iraq, the Iraqi people will choose their own leaders and their own government. America has no intention of imposing our form of government or our culture. Yet, we will ensure that all Iraqis have a voice in the new government.” [US President, 5/5/2003]
Lt. Gen. Jay Garner, director of the Pentagon’s Office of Reconstruction and Humanitarian Assistance, tells reporters in Baghdad, “By the middle of (this) month, you’ll really see a beginning of a nucleus of an Iraqi government with an Iraqi face on it that is dealing with the coalition.” [BBC, 5/5/2003; CNN, 5/5/2003]
The Bush administration sends Congress a $247-billion, six-year spending proposal which would undermine environmental protections, discourage the development of mass transit systems and threaten historical sites, recreation areas, and wildlife refuges by shifting regulatory authority to the state and local level and undermining public oversight. The proposal, called the “Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003,” would cut the federal/local funding ratio for new rail projects from 80/20 to 50/50, thus requiring local governments to pay for a larger portion of such transit systems. The bill allocates four times as much funds for roads than for mass transit. [Associated Builders and Contractors, 5/16/2003; Natural Resources Defense Council, 7/3/2004]
In Mosul, US administrator for Iraq Paul Bremer complains to reporters: “I’ve read a report in the American press about a delay (in the transitional authority). I don’t know where these stories are coming from because we haven’t delayed anything.” [Straits Times, 5/19/2003; Washington Times, 5/20/2003]
The House of Representatives passes the Healthy Forests Restoration Act of 2003 by a vote of 256 to 170 as part of the Bush administration’s “Healthy Forests Initiative.”
(see November 27, 2002)
(see December 11, 2002). [US Department of the Interior, 5/30/2003] The legislation, introduced by Rep. Scott McInnis, relaxes requirements for the removal of small underbrush and trees on 20 million acres of forestland vulnerable to wildfires. The bill, dubbed the “‘Healthy Stealthy’ Act” by critics, removes important environmental safeguards and reduces public participation and judicial review, [Reuters, 5/22/2003] facilitating the timber industry’s access to 192 million acres. The measure also increases the industry’s subsidies by $125 million. [Alternet, 5/19/2003]
US administrator for Iraq Paul Bremer tells reporters, “I would think we are talking about more like sometime in July to get a national conference put together.” [Radio Free Europe, 5/21/2003]
Defense Secretary Donald Rumsfeld writes in an op-ed piece published in the Wall Street Journal: “As Thomas Jefferson put it, ‘we are not to expect to be translated from despotism to liberty in a featherbed.’ It took time and patience, but eventually our Founders got it right—and we hope so will the people of Iraq—over time.” [Wall Street Journal, 5/27/2003 ]
Defense Secretary Donald Rumsfeld tells the Council on Foreign Relations in New York: “While our goal is to put functional and political authority in the hands of Iraqis as soon as possible, the Coalition Provisional Authority has the responsibility to fill the vacuum of power . . . by asserting temporary authority over the country. The coalition will do so. It will not tolerate self-appointed ‘leaders.’” [Council for Foreign Relations, 5/27/2003]
Ahmed Chalabi, head of the Iraqi National Congress, complains about the US occupation of Iraq that he played a pivotal role in bringing about. “They told us, ‘Liberation now,’ and then they made it occupation,” he says. “Bush said he was a liberator, not an occupier, and we supported the United States on this basis.” [Philadelphia Inquirer, 5/29/2003]
Isam Khafaji, an Iraqi exile who returned to Iraq to serve on the Defense Department’s Iraq Reconstruction and Development Council, complains to the Washington Post: “Our role is very limited. We’re not allowed to make any decisions.” [Washington Post, 6/8/2003]
Hamid Bayati, spokesperson for the Supreme Council for the Islamic Revolution in Iraq (SCIRI), tells the Washington Post: “If [Bremer] is going to appoint an administration, we can’t be part of that. We will only be part of an administration selected by the Iraqi people. There are certain lines which we cannot cross.” [Washington Post, 6/8/2003]
A White House aide tells Congress that the administration overestimated the expected reduction in mercury emissions that would result from the implementation of its “Clear Skies” plan. [Atlanta Journal-Constitution, 6/6/2003] The EPA is under court orders to finalize a mercury reduction plan, which would update the Clean Air Act, by December 15, 2003. The current version of the Clean Air Act has no provisions covering mercury, a byproduct of coal-burning power plants. [New York Times, 7/14/2003] The administration’s “Clear Skies” plan had predicted that if sulfur and nitrogen compound emissions were reduced by 70 percent in 2010 as the plan proposes, there would be a concomitant reduction in mercury pollution from coal power plants to about 26 tons a year nationally. But a revised estimate put the expected reduction between 2 and 14 tons. Since Congress’ current draft of the Clean Air Act had set a reduction target of 22 tons by 2010 based on the plan’s previous figures, energy industry lobbyists and some pro-industry senators are now arguing that the mercury reduction goal should likewise be set to a smaller amount. [Atlanta Journal-Constitution, 6/6/2003]
Abu Adel, a senior tribal leader in Ramadi, Iraq, tells the Associated Press: “We are a proud people and we will not accept this humiliation. The Americans should beware the wrath of the Iraqi people.” [Associated Press, 6/17/2003]
Haiti uses more than 90 percent of its foreign reserves to pay $32 million in debt service to its international creditors, requiring Aristide’s government to end fuel subsidies and slash spending on health and education programs. Haiti’s debt is of dubious legality, however, as the London-based Haiti Support Group explains: “Haiti’s debt to international financial institutions and foreign governments has grown from $302 million in 1980 to $1.134 billion today. About 40 per cent of this debt stems from loans to the brutal Duvalier dictators, who invested precious little of it in the country. This is known as ‘odious debt’ because it was used to oppress the people, and, according to international law, this debt need not be repaid.” The debt payment increases public dissatisfaction with Aristide’s administration. [Dollars and Sense, 9/7/2003; CounterPunch, 3/1/2004; London Review of Books, 4/15/2004]
Shayna Steinger, a consular officer who issued 12 visas to the 9/11 hijackers in Jeddah (see July 1, 2000), serves as the political officer at the US Embassy in Beirut, Lebanon. The start and end dates of her tour of duty are unknown, but she meets with Lebanese Prime Minister Rafiq Al-Hariri on July 8. [Rafic Hariri, 7/8/2003]
Miroslav Kalousek is elected the new chairman of the Czech Christian Democrats (KDU-CSL), defeating the current chairman and foreign minister Cyril Svoboda in the second round of voting at the party’s conference in Ostrava. Kalousek obtained 164 votes, whereas Svoboda only got 131, but was then elected to one of the five deputy chairman positions. Shortly before the election, Mirek Topolanek, chairman of the center-right Civic Democratic Party (ODS), had indirectly supported Kalousek over Svoboda in a speech to the conference, whereas Prime Minister Vladimir Spidla of the Social Democrats (CSSD) had offered indirect support to Svoboda, the favourite before the election. Despite this assistance, Svoboda’s position was hampered by his unpopular support for the US-led invasion of Iraq, his pro-European orientation, and, in particular, the party’s poor performance in recent elections, which may be the deciding factor between the two candidates. [Novinky(.cz), 11/8/2003]
In Washington, there is an anti-Aristide demonstration sponsored by the Haiti Democracy Project. Several hundred protesters, including many Haitian Americans and recent exiles, attend the event. Many of the demonstrators arrive in buses from New York and Boston. [Miami Herald, 1/30/2004]
VHeadline.com reports that the Bush administration is planning another coup in Venezuela. [VHeadline, 2/3/2004]
Rebels take over cities in northern Haiti and move towards Haiti’s capital, Port-au-Prince, overrunning President Jean-Bertrand Aristide’s local police forces and vowing to overthrow him. [New York Times, 2/29/2004] The rebels include various factions. The leading groups are led by Louis-Jodel Chamblain, a convicted murderer and former death squad leader under “Baby Doc” Duvalier, and Guy Philippe, also a known human rights violator (see October 31, 1991)
(see 1997-1999). [CounterPunch, 3/1/2004; Amnesty International, 3/3/2004; Associated Press, 3/3/2004]
Guy Philippe tells the Miami Herald during an interview conducted in Cap Haitein, Haiti, that the man he admires most is former Chilean dictator Gen. Augusto Pinochet. “Pinochet made Chile what it is,” the 35-year-old rebel says. Philippe adds that US President Ronald Reagan is his next favorite. [Miami Herald, 2/28/2004; One World, 3/2/2004; Jamaica Observer, 3/7/2004]
US officials delay a small group of additional bodyguards from the Steele Foundation on their way to Haiti. [Democracy Now!, 3/2/2004]
Shortly before his ouster, Aristide contacts the US firm that provides his security, the San Francisco-based Steele Foundation, and asks for additional guards. The company—made up of former US Special Forces soldiers, intelligence officers, and other security experts—has been providing Haiti with its security services since 1998. Haiti’s contract with the firm is approved by the US State Department. But Aristide’s last minute attempt to increase his security is blocked by the White House. According to news reports, the Steele Foundation asks the US embassy in Port-au-Prince if it can rely on American protection in the event that the rebels arrive at the presidential palace. The Steele Foundation is told that no such protection would be provided. The company had earlier helped repel attacks against the presidential palace from paramilitary groups in December 2001. [Miami Herald, 3/1/2004; Democracy Now!, 3/2/2004; Associated Press, 3/2/2004]
In the evening, Aristide family friend Randal Robinson calls Aristide’s residence in Port-au-Prince. An unfamiliar voice answers the phone and says that both the president and his wife are busy and cannot take the call. [Democracy Now!, 3/1/2004]
Haitian President Jean-Bertrand Aristide informs Jamaican Prime Minister P. J. Patterson and Foreign Minister K. D. Knight that he does not plan to resign, despite demands from armed rebels who are quickly closing in on the capital. [Associated Press, 3/2/2004]
Haitian President Jean-Bertrand Aristide is escorted on a US-charted jet to the Central African Republic. The details of this event are disputed.
US' version of events - Aristide contacts US ambassador James Foley on the night of January 28 and asks him three questions: “What did he think would be best for Haiti? Would the United States guarantee his protection? And could he choose his destination for exile?” At 11pm, Ambassador Foley informs Aristide that the United States can ensure his safe departure if he decides to resign and adds that this is what the Bush administration feels he should do. [Independent, 3/2/2004; Associated Press, 3/2/2004; Washington Post, 3/3/2004] Aristide and his American wife decide that they will accept the American offer. [Washington Post, 3/3/2004] Later in the night, Foley attempts to email the president but Aristide’s computer has already been packed. [Washington Post, 3/3/2004] Some time after midnight, Ambassador Foley telephones the US Embassy’s second-ranking officer in Port-au-Prince, Luis Moreno, and asks that he escort Aristide and his wife to the airport. [Washington Post, 3/3/2004] Shortly after 4 am, US Diplomat Luis Moreno arrives at the gates of Aristide’s residence in the suburb of Tabarre with a fellow US diplomat and six State Department security officers. Inside Aristide’s house the lights are on. Aristide meets Moreno at the door with his suitcases packed. “You know why I’m here,” Moreno says in Spanish. “Yes, of course,” Aristide is quoted as saying in response. Moreno asks Aristide for a resignation letter and Aristide promises to give one to him before he leaves the island. “You have my word and you know my word is good,” Aristide is quoted as saying. They then travel to the airport in separate vehicles, without any further conversation. They arrive at the airport and about 20 minutes before the plane arrives, Moreno again asks for the letter. Aristide provides the letter and then the two converse for the next few minutes. “I expressed sadness that I was here to watch him leave,” Moreno later tells The Washington Post. “Sometimes life is like that,” Aristide responds. “Then I shook his hand and he went away.” [Aristide, 2/28/2004; Reuters, 3/1/2004; Washington Post, 3/3/2004] A US-charted commercial plane arrives in Port-au-Prince at approximately 4:30am. [Aristide, 2/28/2004; Associated Press, 3/2/2004] US authorities do not force Aristide onto the leased plane. He goes willingly. [BBC, 3/1/2004; Associated Press, 3/2/2004] At 6:15am, the plane departs. [Miami Herald, 2/29/2004] “He was not kidnapped. We did not force him on to the airplane. He went onto the airplane willingly, and that’s the truth,” Secretary of State Colin Powell claims. [BBC, 3/1/2004; Associated Press, 3/2/2004] “The allegations that somehow we kidnapped former President Aristide are absolutely baseless, absurd.” [Reuters, 3/2/2004]
Aristide's version of events - US soldiers arrive at Aristide’s residence and order the president not to use any phones and to come with them immediately. Aristide, his wife Mildred and his brother-in-law are taken at gunpoint to the airport. Aristide is warned by US diplomat Luis Moreno that if he does not leave Haiti, thousands of Haitians would likely die and rebel leader Guy Philippe would probably attack the palace and kill him. Moreover, the US warns Aristide that they are withdrawing his US-provided security. [Democracy Now!, 3/1/2004; BBC, 3/1/2004; Associated Press, 3/2/2004] Aristide composes and signs a letter explaining his departure. [Democracy Now!, 3/1/2004; Associated Press, 3/2/2004] The president, his wife, and his brother-in-law board a commercial jet charted by the US government. His own security forces are also taken and directed to a separate section of the plane. During the flight, Aristide and his wife remain in the company of soldiers. The shades on the windows of the plane are kept down. Soldiers tell him they are under orders not to tell him where he is going. [Democracy Now!, 3/1/2004] The plane stops first in Antigua, where it stays on the ground for two hours, and then flies for six hours across the Atlantic to the Central African Republic. Aristide is unable to communicate with anyone on the ground during the entire 20-hour period he is on the plane because it is presumably not equipped with a telephone. Shortly before touchdown, Aristide is informed that the destination is the Central African Republic. Upon arrival, Aristide is escorted to the “Palace of the Renaissance,” where he makes one phone call to his mother in Florida and her brother. He is provided a room with a balcony, but is not permitted to move around, and he remains in the company of soldiers. [Democracy Now!, 3/1/2004; Associated Press, 3/2/2004] His phone is taken away by African authorities and [Miami Herald, 3/3/2004] he is not provided a replacement or a landline. On the morning of March 1, he contacts US Congresswomen Maxine Waters and family friend Randall Robinson with a cell phone that is smuggled to him.(see March 1, 2004) [Democracy Now!, 3/1/2004] In an interview with CNN, he says he considers the events a “coup d’etat” and a “modern” version of kidnapping. [Inter Press Service, 3/2/2004]
Joseph Pierre's version of events - According to Joseph Pierre, a concierge at Aristide’s residence, whose account is reported in the French newspaper Lib�ration, Aristide is taken away early Sunday morning by US soldiers. “White Americans came by helicopter to get him. They also took his bodyguards. It was around two o’clock in the morning. He didn’t want to leave. The American soldiers forced him to. Because they were pointing guns at him, he had to follow them. The Americans are second only to God in terms of strength.” [Independent, 3/2/2004]
With the removal of Haitian President Jean-Bertrand Aristide, Boniface Alexandre, chief justice of the Supreme Court, is sworn in as president at the home of Prime Minister Yvon Neptune, in conformance with Haiti’s constitutional rite of succession. The ceremony is attended by US Ambassador James Foley. However without a parliament (see January 2004), his appointment cannot be approved as required by Haiti’s 1987 Constitution. [Reuters, 2/29/2004; New York Times, 2/29/2004; Miami Herald, 3/1/2004]
Throughout Haiti, supporters of former president Jean-Bertrand Aristide and leaders of popular organizations (“OPs”) are hunted down, arrested, and sometimes beaten and killed by the new government’s police and by remnants of the paramilitary rebel forces. In order to avoid this persecution, many Aristide supporters go into hiding, either in Port-au-Prince, or in the mountains, taking their spouses and children with them. In many cases, their homes, left vacant, are burned to the ground by opposition forces. Leaders of popular organizations who seek asylum at the embassies of the United States, Mexico, Canada, France, and Venezuela, are turned away. The multinational coalition’s forces—consisting of some 3,600 US, Canadian, French, and Chilean troops—reportedly limit their patrolling to Haiti’s capital, Port-au-Prince, thus providing no security in other cities or the outlying areas. [Jamaica Observer, 3/28/2004; CNN, 4/9/2004; Griffin, 4/11/2004 ; Democracy Now!, 4/12/2004; Brattleboro Reformer, 4/30/2004]
Amnesty International releases a statement calling on the US-led force in Haiti to prevent the paramilitary leaders from taking power. The organization makes the following demands: [Amnesty International, 3/3/2004]
“The MIF must take urgent steps to guarantee that notorious human rights offenders with pending sentences for human rights convictions, and those facing indictments on human rights grounds, are taken into custody and brought before the Haitian justice system. Escapees must be returned to prison; those perpetrators convicted in absentia have the opportunity for a retrial, under Haitian law, and should be held in custody until the retrial occurs.” [Amnesty International, 3/3/2004]
“The MIF must take immediate steps to disarm the rebel groups and armed pro-government gangs, to minimize the risks of ongoing human rights abuses.” [Amnesty International, 3/3/2004]
“The international community must as a matter of priority ensure that under no circumstances are those convicted of or implicated in serious human rights abuses given any position of authority, whether in a transitional government or among the security forces, where they might commit further violations.” [Amnesty International, 3/3/2004]
“The Multinational Interim Force (MIF) must take urgent steps to ensure that the safety of all police and justice officials, witnesses, and human rights defenders involved in bringing the individuals named in this report to justice is guaranteed.” [Amnesty International, 3/3/2004]
“The MIF must take steps to protect police and judicial records relating to past human rights abuses.” [Amnesty International, 3/3/2004]
“No amnesty for past or recent human rights abuses can be permitted.” [Amnesty International, 3/3/2004]
“In the longer term, the international community must assist the Haitian justice system so that it can bring to justice all of those accused of involvement in human rights violations.” [Amnesty International, 3/3/2004]
The European Union announces it has begun a preliminary investigation into the sale of Real Madrid’s training ground to the city council in 2001 (see (May 8, 2001)). The sale netted €480m, which wiped out the football club’s €290m debt and enabled it to buy players such as Zinedine Zidane, Ronaldo, Luis Figo, and David Beckham. “We believe Madrid’s regional authorities may have overpaid,” says Tilman Luder, the EU’s competition spokesman. He also warns that the club may have to pay back some money if the price exceeded the market value. “We have sent a questionnaire to the Spanish government: to find out why they bought this land, at what price, and if they can prove it was at the market price. We suspect that the purchase price was influenced by the fact that this property had been reclassified, which increased its value,” says Luder. If Spain’s response to the questionnaire is not satisfactory, the EU may launch a formal investigation. [Independent, 3/4/2010] The EU will later drop the matter (see (November 9, 2004)).
A Tripartite Council is formed in accordance with Organization of American States resolutions CP/Res. 861 (February 19, 2004), CP/Res. 862 (February 26, 2004) and UN resolution S/1529 (February 29, 2004). Selected to serve on the council are Leslie Voltaire, Minister of Haitians Living Abroad; Paul Denis, Democratic Convergence spokesman; and Adamo Guino, UN Resident Coordinator in Haiti. The council is charged with the task of selecting a seven-member Council of Sages (see March 4, 2004). [Inter-American Institute of Human Rights, 3/4/2004; Haiti Info, 4/6/2004]
A Tripartite Council (see March 4, 2004) meets and selects a seven-member Council of Sages. It chooses Lamartine Clermont, Catholic Church; Ariel Henry, Democratic Convergence; Anne-Marie Issa, director-general of Signal FM Radio; Mac Donald Jean, Anglican Church; Danielle Magliore, director of ENFOFANM; Christian Rousseau, University administrator (previously involved in opposition student protests); and Paul Emile Simon, Fanmil Lavalas (party of Aristide government). [Fire, 1999; Agence France-Presse, 1/7/2004; Inter-American Institute of Human Rights, 3/4/2004; US Department of State, 3/19/2004; Haiti Info, 4/6/2004]
Haitian Gerard Latortue is appointed Prime Minister by the seven-member Council of Sages formed under a plan approved by the United States, France and the Organization of American States (see March 5, 2004). Latortue, whose current place of residence is Boca Raton, Florida, has been living outside of Haiti for decades. [Agence France-Presse, 3/11/2004; NBC 6 (Miami), 3/11/2004; Reuters, 3/13/2004] The 69-year-old former foreign minister has worked for the UN Industrial Development Organization in Africa (1972-1994) and most recently has been working as an international business consultant in Miami. [Associated Press, 3/10/2004; NBC 6 (Miami), 3/11/2004; Haiti Support Group, 3/17/2004] Hours after the appointment, US members of the international security force are fired upon by gunmen in three separate incidents while on patrol near the prime minister’s official residence. [Agence France-Presse, 3/11/2004; Associated Press, 3/11/2004]
Gerard Latortue is sworn in as prime minister of Haiti “before a crowd of 200 people under heavy security,” two days after arriving in Haiti from Florida. [Associated Press, 3/13/2004]
“Following a US-backed plan,” Haitian Prime Minister Gerard Latortue meets with political leaders to begin the process of selecting thirteen ministers for a new interim government. People who had worked in the government since 2000 are automatically disqualified. Additionally, no representatives from any political parties—the Lavalas Family Party or the opposition—are supposed to be included in the interim cabinet. Notably, several of those chosen have held posts in international development organizations, which as the Haiti Support Group notes, “have been very active in Haiti for many decades without making any discernible progress with the country’s social or economic development.” Among those chosen are Yvon Simeon as foreign minister; Bernard Gousse, an anti-Aristide lawyer, as justice minister; Henri Bazan, president of the Haitian Association of Economists, UN consultant, as finance minister; former Gen. Herard Abraham as interior minister; Josette Bijoux, World Health Organization, as public health minister; Daniel Saint-Lot, Director of Training for the controversial USAID-funded, community radio development program, RAMAK, as commerce, industry and tourism minister, Pierre Buteau, as education and culture minister; Roland Pierre, agronomist, as planning and environment minister, Smarck Michel, former primer minister, as planning minister. [CNN, 3/16/2004; Haiti Support Group, 3/17/2004] Despite Latortue’s assurances, several of these people do have ties to political parties. Yvon Simeon, was the Democratic Convergence’s representative in Europe and Bernard Gousse is said to be an active member of the Group of 184. [Haiti Support Group, 3/17/2004] Interestingly, many of the new cabinet members, like Mr. LaTortue himself, are from Boca Raton, Florida, leading some observers to refer to the new government as the “Boca Regime.” [Z Magazine, 5/5/2004]
Entity Tags: Josette Bijoux, Yvon Simeon, Smarck Michel, Mac Donald Jean, Herard Abraham, Roland Pierreas, Paul Emile Simon, Pierre Buteau, Lamartine Clermont, Danielle Magliore, Gerard Latortue, Anne-Marie Issa, Ariel Henry, Henri Bazan, Christian Rousseau, Bernard Gousse, Daniel Saint-Lot
Timeline Tags: Haiti Coup
The White House responds aggressively to comments made the previous day by former counterterrorism “tsar” Richard Clarke (see March 24, 2004), who accused the Bush administration of doing little about terrorism prior to 9/11 (see March 21, 2004). Author Philip Shenon will characterize the situation at the White House following the comments as a “near panic” and “genuine alarm,” because Clarke’s allegations are “a direct threat to [President] Bush’s reelection hopes.”
Rice Leads Response - White House chief of staff Andy Card will say that the most upset person is Clarke’s former boss Condoleezza Rice, who takes the lead in responding. She appears on several television shows, claiming—in what Shenon calls a “remarkably angry tone”—on 60 Minutes: “Dick Clarke just does not know what he’s talking about.… Richard Clarke had plenty of opportunities to tell us in the administration that he thought the war on terrorism was moving in the wrong direction, and he chose not to.” Vice President Dick Cheney says that Clarke has a “grudge” against the administration because he did not get a position at the Department of Homeland Security that he wanted, adding that Clarke “wasn’t in the loop, frankly” and “clearly missed a lot of what was going on.” Shenon will comment, “Cheney’s remarks had unintentionally proved exactly what Clarke was saying—that his authority was so diminished in the Bush administration that he had no ability to reach the decision makers in the White house when threats emerged.” [Shenon, 2008, pp. 277-279]
Having It Both Ways? - “You can’t have it both ways,” adds retired General Wesley Clark, the former commander of NATO forces in Bosnia. He was “either the counterterrorism czar and was responsible and knew what was going on, or the administration gave him a title and didn’t put any emphasis on terrorism and that’s why he wasn’t in the loop.” [Rich, 2006, pp. 114-119]
Surrogate Smears - Surrogates try dirty tactics, for example conservative columnist Robert Novak suggests that Clarke is motivated by racial prejudice against Rice, a “powerful African-American woman,” and conservative commentator Laura Ingraham asks why “this single man” is such a “drama queen.” Although Clarke anticipated attacks, he is surprised at their ferocity. [Shenon, 2008, pp. 277-279] Former White House communications director Karen Hughes interrupts her book tour to criticize Clarke for supposedly promoting his own book, Against All Enemies. Right-wing bloggers, perhaps given direction by White House officials, begin swapping lascivious and baseless rumors about Clarke’s sexual orientation. [Rich, 2006, pp. 114-119] The Washington Times accuses Clarke of being “a political chameleon who is starved for attention after years of toiling anonymously in government bureaucracies.” Neoconservative columnist Charles Krauthammer calls Clarke “a partisan perjurer.” At the extreme edge of the attack is conservative author Ann Coulter, who with no evidence whatsoever, accuses Clarke of racism: she portrays him as thinking of Condoleezza Rice, “[T]he black chick is a dummy” whom Bush promoted from “cleaning the Old Executive Office Building at night.” [Salon, 3/29/2004] Senator John McCain (R-AZ) calls the attacks “the most vigorous offensive I’ve ever seen from the administration on any issue.” [Washington Post, 3/28/2004]
Clarke's Counters - Republican leaders also threaten to release testimony Clarke gave in 2002, and Clarke says he welcomes the release. The testimony remains classified. [Associated Press, 3/26/2004; Associated Press, 3/28/2004] Clarke calls on Rice to release all e-mail communications between the two of them before 9/11; these are not released either. [Guardian, 3/29/2004] Despite the attacks, Clarke’s partners in a consulting business stick with him, as does ABC News, which recently hired him as a terrorism consultant. [Shenon, 2008, pp. 277-279]
Mishandled Response? - According to Reuters, a number of political experts conclude, “The White House may have mishandled accusations leveled by… Clarke by attacking his credibility, keeping the controversy firmly in the headlines into a second week.” [Reuters, 3/29/2004]
No Evidence of Contradiction - However, a review of declassified citations from Clarke’s 2002 testimony provides no evidence of contradiction, and White House officials familiar with the testimony agree that any differences are matters of emphasis, not fact. [Washington Post, 4/4/2004]
Entity Tags: Robert Novak, John McCain, Karen Hughes, Philip Shenon, Condoleezza Rice, Charles Krauthammer, Laura Ingraham, Andrew Card, Ann Coulter, Wesley Clark, Richard (“Dick”) Cheney, Richard A. Clarke, Washington Times
Timeline Tags: Complete 911 Timeline
At a campaign appearance in New Hampshire, President Bush refers to the 9/11 attacks, saying, “Had I known that the enemy was going to use airplanes to strike America, to attack us, I would have used every resource, every asset, every power of this government to protect the American people.” He also suggests that his predecessor, Democrat Bill Clinton, was more to blame for the attacks than he was, as the 9/11 Commission is looking at “eight months of my administration and the eight years of the previous administration.” This speech comes one day after his former counterterrorism “tsar,” Richard Clarke, had given damaging high-profile testimony to the Commission (see March 24, 2004). Author Philip Shenon will comment that Bush “was apparently hoping that his audience would forget that the August 6 [Presidential Daily Brief item (see August 6, 2001)] had warned specifically that planes might be hijacked by al-Qaeda within the United States.” [Shenon, 2008, pp. 289]
CARICOM members meet in Basseterre, St. Kitts and Nevis and call for a UN investigation into the February 29 ouster (see February 28, 2004-March 1, 2004) of Haitian President Jean-Bertrand Aristide’s. “In the light of contradictory reports still in circulation concerning the departure of President Aristide from office, heads of government (of CARICOM) believed that it is in the compelling interest of the international community that the preceding events and all the circumstances surrounding the transfer of power from a constitutionally elected head of state, be fully investigated,” the statement reads. [CARICOM, 3/26/2004; Inter Press Service, 4/13/2004] US Secretary of State Colin Powell will dismiss CARICOM’s call for a probe on April 5. “I don’t think any purpose would be served by an inquiry. We were on the verge of a bloodbath and President Aristide found himself in great danger.” [US Department of State, 4/5/2004; Agence France-Presse, 4/5/2004; Washington Times, 4/6/2004; Inter Press Service, 4/13/2004] And according to diplomatic sources interviewed by Inter Press Service, the US and France intimidate CARICOM into delaying its official request for a UN inquiry. Both countries warn that they will veto any resolution calling for a probe. [Inter Press Service, 4/13/2004 Sources: Unnamed sources]
Shayna Steinger, a consular officer who issued 12 visas to the 9/11 hijackers in Jeddah (see July 1, 2000), is nominated for a new State Department rank. According to the Congressional Record, Steinger and several other officials are proposed for the rank of “foreign services officers of class four, consular officer and secretary in the Diplomatic Service of the United States of America.” [US Congress. Senate., 4/8/2004]
In an interview with the Miami Herald, Haitian rebel Guy Philippe says that his paramilitary group, the Front de Resistance, would soon be laying down its arms and founding a new political party, the Front de Reconstrucion Nationale. He adds that he will consider running as the party’s candidate for president. “We have to do a poll and see who has the advantage,”] he explains. “If the poll says I am the person, I will be the person.” If elected president, Philippe says his first priority would be reestablishing the Haitian national army. “This would be a professional army, not the one we had,” he says, reasoning that “[y]ou can’t have foreigners invest without security.” Next on his agenda, Philippe continues, would be “education, education, education.” And unlike Aristide, whose policies often conflicted with the interests of Haiti’s wealthy elite—“who have maintained a stark class system in Haiti for 200 years”—Philippe’s policies would avoid antagonizing them. “They have a key role in this country,” he explains. Philippe claims that he and other rebels, whom human rights groups have demanded be excluded from politics in post-Aristide Haiti (see March 3, 2004), are being misrepresented. For example, he contends that Louis-Jodel Chamblain, who was convicted in absentia for his involvement in the Raboteau Massacre (see April 18-22, 1994), is in fact a hero. “I’m sorry, but Chamblain is a hero. A lot of people love him here. He offered his life for his countrymen.” An unnamed US official tells the Miami Herald, “It’s a very scary thought. It’s all the same guys. Talk about taking one step forward and two steps back.” [Miami Herald, 4/30/2004]
Some British politicians are unhappy over the arrest of leading Islamist radical Abu Hamza al-Masri (see May 27, 2004), for various reasons. The US is clearly aware that Abu Hamza is a very significant Islamist militant, and, according to authors Sean O’Neill and Daniel McGrory: “[T]he question that hung uncomfortably in the air in Whitehall that afternoon was why [the British] government and its agencies had not appreciated the danger he posed, and done something about it. The unpalatable answer was that Britain had missed, or had chosen not to take, at least a dozen opportunities to act against Abu Hamza.” The arrest of Abu Hamza, who informed for two of Britain’s security services (see Early 1997), causes “considerable unease” in the cabinet; some ministers think Britain should be grateful to the FBI for “doing Britain’s dirty work,” whereas others think “Britain came out of the affair looking like America’s poodle.” [O'Neill and McGrory, 2006, pp. 284]
The Coalition Provisional Authority (CPA) formally hands over Iraqi sovereignty to an interim government headed by Prime Minister Iyad Allawi. CPA administrator Paul Bremer, reading from a letter contained in the transfer document, says that with the transfer of power, the “Iraqi interim government will assume and exercise full sovereign authority on behalf of the Iraqi people.” [CNN, 6/28/2004] The transfer is done quickly and in private, with virtually no media presence. Bremer leaves the country after telling reporters he will fly out on one plane, then secretly boarding a second plane. Diplomat Peter Galbraith will later write, “What started with neoconservative fantasies of cheering Iraqis greeting American liberators with flowers and sweets ended with a secret ceremony and a decoy plane.” [Rich, 2006, pp. 127]
NATO adopts an official policy document mandating “zero-tolerance” for the trafficking in human beings by NATO forces and staff. The document is a result of discussions that began at NATO in the fall of 2003. The document says that NATO will increase cooperation among countries in order to combat the problem of human trafficking. Specific strategies outlined in the document include reviewing current legislation of member countries, encouraging member countries to approve the UN Convention Against Organized Crime, providing support to local authorities in their efforts to combat trafficking in human beings, imposing penalties on contractors who engage in human trafficking, and evaluating the implementation of the efforts of those involved. [NATO, 6/29/2004]
Shayna Steinger, a consular officer who issued 12 visas to the 9/11 hijackers in Jeddah (see July 1, 2000), serves as the chief of the political and economic section at the US Embassy in Sana’a, Yemen. [US Department of State, 9/2004]
The European Union drops a competition probe into a transaction in which football club Real Madrid received hundreds of millions of Euros from the Madrid city council in return for its training ground (see (May 8, 2001) and March 3, 2004). The commission concludes that no state aid for Real was involved in the transaction and no government resources were transferred to it. [Sports Illustrated, 11/9/2004]
Greece admits it joined the euro single currency in 2001 on the basis of figures that showed its budget deficit to be much lower than it really was. Eurozone states are expected to have deficits below 3 percent of gross domestic product, but revised data show Greece has exceeded that limit since 1999. Greek press reports suggest the country’s budget deficit in 1999 was 3.38 percent. The problem was discovered by Eurostat, the EU’s statistics agency, when it visited Athens last week to examine Greece’s current budget figures. Greece had already said that its public deficit breached the European Union cap between 2000 and 2003, as the cost of hosting the 2004 summer Olympics reached €7bn. But Greece’s finance ministry had claimed that the country’s 1999 deficit, on the basis of which Greece was allowed to join the euro in 2001, was below the limit. “It has been proven that Greece’s budget deficit never fell below 3 percent since 1999,” finance minister George Alogoskoufis now admits. Katinka Barysch, chief economist at the Centre for European Reform, says the announcement will not be a surprise for Brussels insiders. “Quite a few member states did something similar because of the political imperative to join the euro as soon as possible. Greece has just gone a bit further,” she says. [BBC, 11/15/2004]
Peter Kornbluh, a senior analyst at the private non-profit National Security Archive in Washington, tells Newsday that documents recently acquired by the National Security Archive provide “substantive evidence that the CIA knew in advance about the coup, and it is clear that this intelligence was distributed to dozens of members of the Bush administration, giving them knowledge of coup plotting.” [Newsday, 11/24/2004]
The center-right Greek government raises taxes on alcohol and tobacco in an effort to combat the country’s large budget deficit. The price of the cheapest pack of cigarettes will rise from €0.80 to €1.40, whereas taxes on spirits will be raised by 20 percent and the rate on ouzo will go up 10 percent. The changes are announced by Greek Minister of Finance Giorgos Alogoskoufis and will also apply to previously tax-free holiday resorts such as Rhodes. In addition, the main VAT rate will rise from 18 percent to 19 percent. Officials hope the increases will boost public revenues by €500m. The Greek budget deficit is 6.1 percent of GDP, well over the 3 percent permitted by Eurozone rules, and was increased by the massive cost of hosting the 2006 summer Olympics. Together with spending cuts, the government hopes the measures will rein in the deficit to 3.5 percent of GDP this year. According to the Greek government, the tax rises are the only way of avoiding cuts in health and education spending. [Guardian, 3/30/2010]
A report is secretly delivered to Congress by the Pentagon’s Office of Inspector General, regarding the inaccuracy of statements made by Defense Department officials on the military’s response to the September 11 hijackings. The 9/11 Commission made a formal request in summer 2004 for the inspector general to investigate the matter, because military officials had given testimony that was later proved to have been false (see Shortly before July 22, 2004). For example, they claimed that NORAD had been tracking Flight 93 on 9/11 and was ready to shoot it down if it threatened Washington (see Shortly Before 9:36 a.m. September 11, 2001 and (9:36 a.m.-10:06 a.m.) September 11, 2001). Yet audiotapes obtained under subpoena showed NORAD was unaware of this flight until after it crashed. In its report, the inspector general’s office states that it found “the inaccuracies, in part, resulted because of inadequate forensic capabilities.” It says that commanders found it difficult to create an accurate timeline of the events of 9/11 due to the lack of a well-coordinated system in logging information about air defense operations. At the time, air defense watch centers had used handwritten logs, and these could be unreliable. Following the attacks, the report claims, commanders failed to press hard enough for an accurate timeline to be produced for the benefit of investigations, like the 9/11 Commission. Yet, as some of the Commission’s staff will later point out, the military had already reviewed the NORAD audiotapes chronicling the events of 9/11 prior to its officials giving their incorrect testimonies. In response to a freedom of information request by the New York Times, the inspector general’s report will be publicly released in August 2006, but the equivalent of several pages will be blacked out on national security grounds. [Vanity Fair, 8/1/2006; Washington Post, 8/2/2006; New York Times, 8/5/2006; Reuters, 8/5/2006; US Department of Defense, 9/12/2006 ]
9/11 Staff Member Criticizes Report - In his 2009 book The Ground Truth, John Farmer, who served as senior counsel to the 9/11 Commission, will criticize the inspector general’s report. Farmer says the report mischaracterizes the 9/11 Commission’s referral by saying the Commission had alleged officials knowingly made false statements, when instead it had simply “documented the facts concerning what occurred on 9/11, the disparity between those facts and what the government had been telling the public with total assurance since 9/11, and the relative ease with which anyone looking could have uncovered those facts.” He faults the inspector general for interpreting the issue narrowly, by focusing on statements made to the 9/11 Commission; ignoring the larger context in which the events of 9/11 were extremely significant and so it should have been extremely important for the military to understand the truth of what happened, in order to correct any problems, as well as to be able to present an accurate account to the White House and to the public; and failing to address the question of whether the false accounts had served anyone’s interests. The inspector general’s report affirms the claims of top NORAD commanders that, in Farmer’s words, they had been “simply too busy fixing the system and fighting the war on terror to concern themselves with piecing together the facts of 9/11.” Farmer will ask, “[H]ow… could the Department of Defense identify and correct operational weaknesses without knowing precisely what had occurred that morning?” He will question the report’s determination that the Defense Department lacked the forensic capabilities for maintaining logs, video and audio recordings, and storing radar information, and had not coordinated with the FAA on reconstructing the events of 9/11, as the Commission had documented evidence that the two agencies had indeed coordinated while developing their reconstructions of events. Farmer will write that “it is impossible to conclude honestly, from the two inspector general reports, that the official version of the events of 9/11 was the result of mere administrative incompetence; too many questions remain unanswered.” He will add, “History should record that whether through unprecedented administrative incompetence or orchestrated mendacity, the American people were misled about the nation’s response to the 9/11 attacks.” [Farmer, 2009, pp. 283-289]
The Chicago Tribune publishes a multi-part series titled, “Pipeline to Peril,” summarizing its investigation of the human trafficking network that is supplying US military bases and private contractors in Iraq with cheap labor. The articles detail how Halliburton subsidiaries such as KBR are making use of over 200 illicit international human trafficking brokers for supplying cheap labor for the Iraq war effort, mainly from impoverished Asians. The brokers are often deceitful in their recruiting practices. For instance, they are reported to have promised jobs in luxury hotels in Jordan for the potential workers. The workers are required to pay hefty broker fees up front, and once trapped at halfway points in Jordan by those initial fees, they are informed that that they will be working in Iraq and their passports are confiscated. The article gives an example of twelve Nepalese workers who were kidnapped by Iraqi insurgents at gunpoint and later killed while traveling in an unprotected caravan across Iraq. [Chicago Tribune, 10/9/2005]
The White House announces that President Bush will nominate Paul McNulty to be the next deputy attorney general. McNulty is currently the US Attorney for the Eastern District of Virginia, which the Washington Post will describe as the “central legal front in the Bush administration’s anti-terrorism strategy.” He was involved in the prosecutions of “American Taliban” John Walker Lindh and Zacarias Moussaoui, sometimes referred to as a candidate for the “20th hijacker” on 9/11. McNulty’s nomination comes after the previous nominee, Timothy E. Flanigan, withdrew his name from consideration at the start of the month due to opposition in the Senate. McNulty will keep his current job and serve as acting deputy attorney general until confirmed by the Senate. [Washington Post, 10/22/2005] McNulty recently took a decision not to prosecute CIA officers who abused and killed detainees in some cases referred to his office by the agency’s inspector general (see (August 2004) and Mid-October 2005).
The Czech Christian Democrat party (KDU-CSL) re-elects its chairman, Miroslav Kalousek, for another four-year term. There is no other candidate and Kalousek receives 249 of 316 possible votes. [Novinky(.cz), 11/12/2005]
A report finds that the death of former New York City detective James Zadroga (see January 5, 2006) was caused by exposure to dust during rescue attempts at Ground Zero. The report, by Gerard Breton of the medical examiner’s office in Ocean County, New Jersey, says, “It is felt with a reasonable degree of medical certainty that the cause of death in this case was directly related to the 9/11 incident.” Before completing the report, Breton did not consult with doctors who had tested or treated other first responders at Ground Zero, although he did talk to Zadroga’s physician. Neither did he test particles found in Zadroga’s lungs to compare them with the dust from the World Trade Center. Nevertheless, Breton says, “I cannot personally understand that anyone could see what I saw in the lungs, and know that the person was exposed to Ground Zero, and not make the same link I made.” [New York Times, 4/14/2006] His conclusion will be disputed. [New Yorker, 9/15/2008] The report may have a wider impact, as several lawsuits have been brought by first responders and downtown residents alleging that the toxic mixture of dust and fumes at Ground Zero was deadly. In addition, the report may mean Zadroga’s death should be classified as “in the line of duty,” meaning his survivors would be eligible for more benefits. [New York Times, 4/14/2006]
President Musharraf appeared on the Daily Show with Jon Stewart to promote his new book. [Source: Adam Rountree / AP]President Pervez Musharraf of Pakistan publishes his autobiography, In the Line of Fire, generating a number of controversies:
He speculates that Omar Saeed Sheikh, who was involved in the kidnapping and murder of Daniel Pearl (see January 23, 2002) and is said to have wired money to the 9/11 hijackers (see Early August 2001), may have been recruited by MI6 in the 1990s (see Before April 1993). The Independent will also comment, “he does not mention that British-born Omar Saeed Sheikh, who planned the Pearl abduction, had surrendered a week before his arrest was announced to a general with intelligence links who was Musharraf’s friend. What happened during that week?” [Independent, 11/21/2006]
Musharraf writes, “Those who habitually accuse us of not doing enough in the war on terror should simply ask the CIA how much prize money it has paid to the Government of Pakistan.” [Press Trust of India, 9/28/2006] However, US law forbids rewards being paid to a government. The US Justice Department says: “We didn’t know about this. It should not happen. These bounty payments are for private individuals who help to trace terrorists on the FBI’s most-wanted list, not foreign governments.” [London Times, 9/26/2006] Musharraf then backtracks and claims the Government of Pakistan has not received any money from the US for capturing people. [Press Trust of India, 9/28/2006]
He also claims that State Department Official Richard Armitage threatened that if Pakistan did not co-operate with the “war on terror,” the US would bomb it “back into the stone age” (see September 13-15, 2001).
The book does not receive good reviews. For example, the Independent calls it “self-serving and self-indulgent” and concludes that “Readers who want to understand contemporary Pakistan deserve a more honest book.” [Independent, 11/21/2006] In a review with the sub-heading “Most of Gen. Pervez Musharraf’s new book cannot be believed,” the Wall Street Journal writes, “The book is not so much an autobiography as a highly selective auto-hagiography, by turns self-congratulatory, narcissistic, and mendacious.” [Wall Street Journal, 10/19/2006]
Czech President Vaclav Klaus appoints a new government of the Czech Republic. The incoming prime minister is Mirek Topolanek, of the right-leaning Civic Democratic Party (ODS). The government comprises a coalition of three parties, led by the ODS, but also including the center-right Christian Democrats (KDU-CSL) and central Green Party (SZ). Besides Topolanek, the leading figures in the government include Jiri Cunek, chairman of the Christian Democrats and minister for local development, Miroslav Kalousek (KDU-CSL), who will be minister of finance, and Martin Bursik, chairman of the Green Party and minister of the environment. The government now has 30 days to win a vote of confidence in the Chamber of Deputies, the lower house of the Czech parliament. [Mlada fronta DNES, 1/9/2007]
General George Casey, the outgoing commander of US forces in Iraq, faces criticism from both Republican and Democratic Senators during his testimony before the Armed Services Committee. Sen. John McCain (R-AZ) tells Casey that “things have gotten markedly and progressively worse” during Casey’s 2 1/2-year tenure, “and the situation in Iraq can now best be described as dire and deteriorating. I regret that our window of opportunity to reverse momentum may be closing.” Casey is slated to become the Army Chief of Staff. McCain, a strong supporter of the “surge” of US forces into Iraq, has proposed a Senate resolution including stringent benchmarks to gauge the progress of the Iraqi government and military. McCain’s resolution and other nonbinding, bipartisan proposals that would express varying degrees of disapproval of Bush’s plan will soon be debated on the Senate floor. [Washington Post, 2/2/2007]
In an open letter to President Bush, Florida Congressman Robert Wexler and New York Congressman Gary Ackerman ask the president to give Congress immediate access to all information regarding a May 2003 dialog between Iran and the US in which Iran offered the US concessions (see May 4, 2003). Wexler and Ackerman acknowledge their skepticism of Iran’s intentions with regard to the offer, but ask the president to explain why the administration turned Iran down. Wexler and Ackerman, both of whom are members of the House Committee on Foreign Affairs, say the information is needed in order to create a more informed policy toward Iran. The two congressmen ask that the information be turned over to Congress by February 23, 2007. [Robert Wexler, 2/9/2007]
The Transactional Records Action Clearinghouse (TRAC), a data research organization affiliated with Syracuse University, has discovered that terrorism claims formed less that 0.01 percent of immigration court charges filed by the Department of Homeland Security (DHS). The immigration court records were obtained under the Freedom of Information Act. Of 814,073 cases brought to the immigration courts by the DHS, 12, or 0.0015 percent, were for charges of terrorism. In addition, 114 cases, or 0.014 percent, concerned individuals charged with national security violations. TRAC spokesman David Burnham says, “The DHS claims it is focused on terrorism. Well that’s just not true. Either there’s no terrorism, or they’re terrible at catching them. Either way it’s bad for all of us.” TRAC further claims that there exists an “apparent gap between DHS rhetoric about its role in fighting terrorism and what it actually has been doing.” DHS spokesman Russ Knocke calls the TRAC report “ill-conceived” and said the group “lack[s] a grasp of the DHS mission.” The DHS claims that any clampdown on immigration decreases the likelihood of terrorists entering the US. [CNN, 5/27/2007]
Former Thai Prime Minister Thaksin Shinawatra loges a £81.6m formal takeover bid for football club Manchester City. The offer is made through a company called UK Sports Investments, a vehicle indirectly controlled by Shinawatra, his son, and his daughter. [BBC, 6/21/2007] Since he was overthrown by a military coup last September, Shinawatra has been dogged by allegations covering assorted instances of corruption, human rights abuses, and running death squads as a part of his government’s war on drugs. [Daily Mail, 6/22/2007] Thai prosecutors have already filed corruption charges and frozen some of his assets. [BBC, 6/21/2007]
Former Thai Prime Minister Thaksin Shinawatra passes the Premier League’s “fit and proper person” test and receives the green light to take full control of football club Manchester City. Shinawatra has already purchased a majority of shares (see July 6, 2007) and this is the last hurdle his takeover has to cross. Allegations that Shinawatra was involved in various instances of corruption, human rights abuses, and death squads (see June 21, 2007) apparently do not prevent him from passing the test. On July 11, one civil servant at the Foreign Office (FCO) will send an e-mail, later obtained by the Telegraph by Freedom of Information Act request, saying that the Premier League thinks that Shinawatra would probably pass the test on that day, and asking if the FCO has any information it could share on him. The FCO also says that the League never follows up on the request, although the League comments: “What we were told by the government was, as these were only allegations, they could offer no comment or advice that was not already in the public domain. Had they offered any form of briefing we would, of course, have accepted.” [Daily Telegraph, 3/13/2008]
Lynn Margulis. [Source: Javier Pedreira]Lynn Margulis, a distinguished professor in the department of geosciences at the University of Massachusetts, describes the US government’s account of 9/11 as a “fraud,” and calls for a new investigation of the attacks. In a statement published on the website PatriotsQuestion911.com, she writes, “Certainly, 19 young Arab men and a man in a cave 7,000 miles away, no matter the level of their anger, could not have masterminded and carried out 9/11: the most effective television commercial in the history of Western civilization.” She calls 9/11 a “false-flag operation” that has been used to justify the recent wars in Afghanistan and Iraq, along with “unprecedented assaults on research, education and civil liberties.” She compares it to the sinking of the USS Maine in 1898—which led to the Spanish American War—and the German Reichstag fire of 1933, which facilitated the rise of the Nazi party. Some have alleged that these earlier events were orchestrated by governmental powers. Margulis has previously written extensively on a wide range of scientific topics, making original contributions to cell biology and microbial evolution, and is best known for her theory of symbiogenesis. In 1999, she received the National Medal of Science, which is America’s highest honor for scientific achievement. Margulis says she came to her conclusions about 9/11 based on her own research and from reading two books about the attacks by retired theology professor David Ray Griffin (see March 1, 2004). She concludes her statement, “I suggest that those of us aware and concerned demand that the glaringly erroneous official account of 9/11 be dismissed as a fraud and a new, thorough, and impartial investigation be undertaken.” [University of Massachusetts, 11/4/2003; Daily Hampshire Gazette, 9/11/2007; Smith College Sophian, 9/20/2007]
Arsenal shareholder Alisher Usmanov temporarily shuts down the website of Boris Johnson, the Conservative candidate for major of London, in a dispute between Usmanov and former British ambassador to Uzbekistan Craig Murray. Usmanov has numerous other websites shut down as well. Following the purchase of an interest in Arsenal by Usmanov, an Uzbek-Russian businessman (see Shortly Before August 31, 2007), Murray made numerous allegations against him (see September 2, 2007), and Usmanov used the law firm Schillings in an attempt to shut down discussion of them on the Internet (see Shortly After September 2, 2007). Schillings now pressures Murray’s webhost, Fasthosts Internet, to act against Murray, and it responds by cutting off services to Murray and numerous other bloggers who simply share some technical services with him, even though they had not written about Usmanov or been the subject of a complaint by him. Johnson calls the action “a serious erosion of free speech,” adding: “This is London, not Uzbekistan.… It is unbelievable that a website can be wiped out on the say-so of some tycoon. We live in a world where Internet communication is increasingly vital, and this is a serious erosion of free speech.” Bob Piper, another affected blogger and local Labour Party politician in Birmingham, calls the situation “outrageous.” [Guardian, 9/20/2007]
Through investgative blogger Brad Friedman, former FBI translator Sibel Edmonds makes an open offer to all broadcast TV networks to give any one of them an exclusive “tell all” interview in exchange for unedited air time. Edmonds says, “[h]ere’s my promise to the American Public: If anyone of the major networks—ABC, NBC, CBS, CNN, MSNBC, Fox—promise to air the entire segment, without editing, I promise to tell them everything that I know.” She further explains, “I can tell the American public exactly what it is, and what it is that they are covering up,” adding, “I’m not compromising ongoing investigations,” as “they’ve all been shut down since.” Edmonds has already gone to Congress, the Justice Department inspector general, and the 9/11 Commission, and on two separate occasions had been gagged under the State Secrets Act to prevent her testimony in court. Regarding what she has to talk about, Friedman summarizes it as: “Everything she hasn’t been allowed to tell since 2002, about the criminal penetration of the FBI where she worked, and at the Departments of State and Defense; everything she heard concerning the corruption and illegal activities of several well-known members of Congress; everything she’s aware of concerning information omitted and/or covered up in relation to 9/11. All of the information gleaned from her time listening to and translating wire-taps made prior to 9/11 at the FBI.” [Bradblog.com, 10/29/2007]
Shayna Steinger, a consular officer who issued 12 visas to the 9/11 hijackers in Jeddah (see July 1, 2000), receives a posting at the State Department in Washington. She takes up the position of a desk officer at the Bureau of Near Eastern Affairs’s Office of Israel and Palestinian Affairs, where she is responsible for the West Bank and Gaza. [AFSA News, 1/2008 ]
The Pentagon produces a classified report assessing the damage the whistleblower website WikiLeaks could cause to it. The report concludes that “WikiLeaks.org represents a potential force protection, counterintelligence, OPSEC [operational security], and INFOSEC [information security] threat to the US Army.” WikiLeaks published information about US Army operations in Iraq, Afghanistan, and Guantanamo the previous year. The report says some of the interpretations WikiLeaks puts upon released documents are incorrect, but does not detail specific examples. The author also speculates that the organization is actually supported by the CIA. [New York Times, 3/17/2010] The report itself will later be leaked to WikiLeaks and published by it (see March 15, 2010).
Shayna Steinger, a consular officer who issued 12 visas to the 9/11 hijackers in Jeddah (see July 1, 2000), becomes a board member of the American Foreign Service Association. [AFSA News, 1/2008 ] According to its Web site, the association has 15,000 dues-paying members who work abroad, mostly for the State Department, and its principal mission is to protect their interests and enhance the effectiveness of the US’s Foreign Service. [American Foreign Service Association, 4/17/2010] Steinger is currently a desk officer at the Bureau of Near Eastern Affairs’ Office of Israel and Palestinian Affairs (see Before January 2008). Also appointed to the board at this time are former Ambassador Barbara Bodine, who hampered the FBI’s investigation into the USS Cole bombing in 2000 (see October 14-Late November, 2000), and Anne Aguilera, a consular officer who has served in Iraq. [AFSA News, 1/2008 ]
The United States Federal Reserve has lent Wall Street’s largest investment bank billions of dollars, as the credit crisis threatens to spiral into a full-blown banking crisis. In developments currently rocking the world’s financial markets, the Fed and rival Wall Street bank, JP Morgan Chase, are funneling emergency loans to Bear Stearns, whose exposure to battered credit markets has led to a crisis of confidence in its ability to continue trading. In accelerating numbers, clients and trading partners are pulling business from Bear Stearns, after rumors of its solvency began circulating. During a last-minute conference call with investors, management at the investment bank warned that its emergency lending facility with the Federal Reserve has failed to staunch the bleeding. “We have been subject to a significant amount of rumor and innuendo in the past week,” says Bear Stearns chief executive Alan Schwartz. “We attempted to provide some facts but, in the market environment, the rumors intensified and a lot of people wanted to act to protect themselves first from the possibility that the rumors were true, and wait till later for the facts.” Bear Stearns appears most fragile of Wall Street’s major investment banks, since the July 2007 collapse of two internal hedge funds, providing initial clues about the scale of the unfolding credit crisis. Shares across the banking sector plunge as analysts fear that the Fed’s willingness to intervene suggests that Bear’s future is pivotal to the banking system, and that its failure precipitates losses that may cascade through its trading partners. Bear Stearns stocks are in freefall, closing down 47 percent. Pierre Ellis at New York’s Decision Economics said, “Clearly the Fed is addressing what they feel is a systemic risk very aggressively.” [Belfast Telegraph, 3/15/2008]
US taxpayers express their lack of support of the Troubled Asset Relief Program (TARP—see October 3, 2008) bailout bill to members of Congress, including Speaker of the House Nancy Pelosi (D-CA), Senate majority Leader Harry Reid (D-NV), and the Senate and House budget committee chairs—Chris Dodd (D-CT) and Barney Frank (D-NY), respectively—with phone calls, emails, and faxes, initially rallying the power and the numbers to defeat the bill that some call “a historic swindle.” [The Nation, 9/19/2008] According to the Congressional Quarterly, “[Senator Lindsey] Graham (R-FL) said that the deluge of public e-mails and telephone calls was comparable to several of the most contentious issues of the last decade.” Graham adds:
“It’s somewhere between impeachment and immigration.… This is intense, but I’ve seen worse.” [Congressional Quarterly, 9/28/2008]
AIG logo. [Source: American International Group (AIG)]In an historic move, the federal government bails out insurance corporation AIG with an $85 billion loan, giving control of the firm to the US government. After resisting AIG’s overtures for an emergency loan or other intervention to prevent the insurer from falling into bankruptcy, the government decided AIG, like the now-defunct investment bank, Bear Stearns, was “too big to fail” (see March 15, 2008). The US government will lend up to $85 billion to AIG. In return, the government gets a 79.9 percent equity stake in warrants, called equity participation notes. The two-year loan will carry a LIBOR interest rate plus 8.5 percentage points. LIBOR, the London InterBank Offered Rate, is a common short-term lending benchmark. The bailout comes less than a week after the government allowed a large investment bank, Lehman Brothers Holdings Inc., to fold (see September 14, 2008). As part of the loan agreement, Treasury Secretary Henry Paulson insists that AIG’s chief executive, Robert Willumstad, steps aside. Willumstad will be succeeded by Edward Liddy, the former head of insurer Allstate Corp (see September 18, 2008). [Wall Street Journal, 9/16/2008] Shares in AIG drop to $3.75 on the news. [Bloomberg, 3/5/2009]
House of Representatives bill 1424, known as the Troubled Asset Relief Program (TARP), passes by a slim margin in both Congressional houses, and is immediately signed into law by President Bush. [White House, 10/3/2008]
After President Bush and US Treasury Secretary Henry Paulson push through a long-sought change in how bank mergers are taxed, Bloomberg News sues the Federal Reserve for failing to reveal loan recipients. The change will deprive US taxpayers of as much as $140 billion in tax revenue. As the economy continues its downward spiral into what is called the worse economic crisis since the Great Depression, sources say that a late September $700 billion bailout is “a quiet windfall for US banks.” [Washington Post, 11/10/2008] The legality of Treasury-negotiated equity deals for many US banks is questioned by tax attorneys, as well as nearly $2 trillion that Ben Bernanke of the Federal Reserve handed out in emergency loans before the $700 billion Troubled Asset Relief Program, or TARP, was enacted (see October 3, 2008). The Fed refuses to reveal which corporations received loans, or what collateral has been presented. Sources say that this secrecy is a legal violation. The Federal Reserve’s lending is significant because the central bank has stepped into a rescue role that was also the purpose of the TARP bailout plan, although without safeguards put into the TARP legislation by Congress. Total Fed lending topped $2 trillion for the first time and has risen by 140 percent, or $1.172 trillion, in the weeks since Fed governors relaxed the collateral standards on September 14. The difference includes a $788 billion increase in loans to banks through the Fed and $474 billion in other lending, mostly through the central bank’s purchase of Fannie Mae and Freddie Mac bonds. [Bloomberg News, 11/10/2008; AlterNet, 11/14/2008]
Detroit’s Big Three CEOs testify for more than two hours in a hearing before the Senate Banking Committee, using dire language to describe the financial straits that are threatening to bankrupt their companies. Chrysler LLC CEO Robert Nardelli says that without immediate help, his company could be forced into bankruptcy. “We cannot be confident that we will be able to successfully emerge,” he says. General Motors (GM) Corporation’s CEO, Rick Wagoner, adds that the failure of the industry would be “catastrophic,” causing the loss of 3 million jobs. Ford Motor Company CEO Alan Mulally tells the committee that if one of the automakers failed, the whole industry could be disrupted. “You’re here to get life support,” says ranking minority member Richard Shelby (R-AL). “Why aren’t you making money? How would you pay this money back?”
Financial Losses Worse than Originally Believed - The automakers say that their financial losses were worse than they at first thought, with Nardelli testifying that his company ran through $5 billion this year, including $3.3 billion in the third quarter, with only $6.1 billion on hand to last through the end of the year. Wagoner says that his firm would spend $15 billion by the end of 2008, and another $10 billion in 2009. Wagoner wants $10-$12 billion for GM, while Mulally and Nardelli want $7 billion for their respective corporations. Both Wagoner and Nardelli say that their companies will run out of money in a matter of months. One senator asks if the automakers would be willing to make monthly status reports on cash flow if the Senate agrees to the loan. Nardelli offers to take $1 a year as salary compensation; neither Mulally nor Wagoner did not make the same commitment. Nardelli also committed to Chrysler’s agreeing to consider new fuel efficiency standards. “We’d be open to any requirements,” he says.
Already Cut Costs, Moved to Restructure - The automakers testify how aggressively they have moved to cut costs, restructure, and revamp their product lines to be more competitive with foreign rivals, and say their companies were making progress until they were derailed by the credit crisis that has stalled the global economy and dried up consumer confidence. Auto sales are at their lowest level in at least 15 years, they say, dropping nearly 32 percent in October. As a testament to the seriousness of their financial crisis, the three automakers assure the committee that they would spend the requested $25 billion in the United States; however, they refuse to say that they would not come back for further bailout funding. Wagoner testifies that GM has cut $9 billion in costs since 2005. He touts labor agreements with the United Auto Workers that will further cut wage and health care expenses, and says that improvements in designing and manufacturing vehicles as well as developing fuel-saving technologies will also assist in reining in manufacturing costs. “As a result of these and other actions, we are now matching—or besting—foreign automakers in terms of productivity, quality and fuel economy,” he says. Wagoner assures the committee that the company was moving quickly to right its business. “We have more work to do in all aspects of our business,” Wagoner said. “This is hard stuff.” He said that GM would use some of the money to pay suppliers and pay for part of the Chevrolet Volt program.
UAW President Grilled - In his own testimony, United Auto Workers President Ron Gettelfinger ranks the relative financial health of the Big Three as Ford being the most solvent, with Chrysler at number two, while General Motors may be at or near insolvency by the end of 2008. The UAW chief faces tough questions as well, as Senator Bob Corker (R-TN) pushes back on union work rules and the jobs bank. “I understand Mr. Gettelfinger has done a good job on behalf of all workers not working and being paid,” Corker says, calling the practice unacceptable in other businesses.
Disagreement among Democrats, Republicans - Democrats support a plan to subtract $25 billion from the $700 billion Wall Street bailout package, known as the Troubled Asset Recovery Program (TARP), while Mitch McConnell (R-KY) has joined the White House call to speed up money previously authorized for the automakers through an Energy Department loan program. “To basically change the qualifications of the money that we have already appropriated is a sound way to go forward,” said McConnell. House Democrats and many environmentalists oppose the use of the Energy Department loan, since it is approved only for projects that lead to significant fuel efficiency improvements. Carl Levin (D-MI) says that in order to get a bill, Republicans must write language that explains how they would quickly get $25 billion from the Energy Department program to automakers. But Levin is realistic about the long road they face. “Progress: No. Effort: Hell, yes. Big-time effort,” he says. “We haven’t seen progress and won’t see progress until we see the language from those who want to see the [Energy Department] funds.” Debbie Stabenow (D-MI) says she will “very reluctantly” agree to reworking the retooling loans if that was the only way to get help now. Other Senate allies of the auto industry, including Claire McCaskill (D-MO) and Ken Salazar (D-CO), opposed the proposal to shift $25 billion from TARP. “I’m not sure we want to throw good money after bad,” Salazar says. Max Baucus (D-MT), chairman of the Senate Finance Committee, says it will be nearly impossible to make a deal before Congress adjourns for the year later this week. “Reading the tea leaves, I just don’t think it’s going to happen,” Baucus says. “There’s not enough time given the opposition of the White House and opposition of the other side of the aisle.” Corker echoes the belief that nothing would get done this year, calling the hearings “the first step in a loan application.”
Further Hearings Slated - The CEOs will return to Capitol Hill for a hearing before the House Financial Services Committee on Tuesday, November 25. [Detroit News, 11/19/2008]
Entity Tags: United Auto Workers, Ford Motor Company, Debbie Stabenow, Chrysler, Carl Levin, Alan Mulally, General Motors, Senate Banking Committee, Max Baucus, Rick Wagoner, Robert Nardelli
Timeline Tags: Global Economic Crises
The annual rate of inflation in Iceland rises to a record high of 17.1 percent. [BBC, 2/2/2009]
US government-seized mortgage finance companies Fannie Mae and Freddie Mac suspend foreclosures from November 26, 2008 until January 9, 2009. The six-week suspension on both foreclosures and evictions will give loan servicers time to implement streamlined loan modifications for struggling borrowers. Since September 6, 2008, Fannie and Freddie have been federal government-controlled and sponsored entities that own or guarantee $5.2 billion of the $12 billion US home mortgage market. They offer borrowers who are 90 days or more delinquent with high loan-to-income ratios a chance to modify their mortgage terms to decrease their monthly mortgage payments by roughly 38 percent of the homeowner’s monthly pretax salary. The companies say they plan to reduce interest rates for up to 5 years while lengthening repayment terms as much as 40 years to trim monthly payments. [Bloomberg, 11/20/2008]
The Icelandic finance ministry says the country’s economy is forecast to shrink by 9.6 percent in 2009. In addition, it predicts no growth in 2010. [BBC, 2/2/2009]
New York University economist Nouriel “Dr. Doom” Roubini and Western Europe Finance and Banking analyst Elisa Parisi-Capone of RGE Monitor release new estimates for expected loan losses and writedowns on US originated securitizations:
Loan losses on a total of $12.37 trillion unsecuritized loans are expected to reach $1.6 trillion. Of these, US banks and brokers are expected to incur $1.1 trillion.
Mark-to-market writedowns based on derivatives prices and cash bond indices on a further $10.84 trillion in securities reached $1.92 trillion. According to flow-of-funds data, about 40% of these securities (and losses) are foreign-held. US banks and broker dealers are assumed to incur a share of 30-35%, or $600-700 billion in securities writedowns.
US-originated assets’ total loan losses and securities writedowns are expected to reach about $3.6 trillion. The US banking sector is exposed to half of this figure, or about $1.8 trillion (i.e. $1.1 trillion loan losses + $700bn writedowns).
As of the third quarter of 2008, Federal Deposit Insurance Corporation-insured banks’ capitalization is $1.3 trillion; as of the same period, investment banks had $110bn in equity capital. Roubini and Parisi-Capone say that past recapitalization through the first release of the TARP funds for $230bn, and private capital of $200bn leaves the US banking system very nearly insolvent, should loss estimates materialize.
In order to restore safe lending, additional private and/or public capital of approximately $1 to 1.4 trillion is needed, thus calling for a comprehensive solution along the lines of a “bad bank” proposed by policymakers, or an outright restructuring through a new resolution trust corporation (RTC).
In September 2008, Roubini proposed a solution for the banking crisis that also addresses the root causes of the financial turmoil in the housing and the household sectors. The HOME (Home Owners’ Mortgage Enterprise) program combines an RTC to deal with toxic assets, a homeowners loan corporation to reduce homeowners’ debt, and a reconstruction finance corporation to recapitalize viable banks.
They concluded that total financial system losses will likely hit $3.6 trillion, half of which, according to Roubini, “will be borne by US firms,” and that the losses will overwhelm the US financial system which, in the third quarter of 2008, had a capitalization of $1.3 trillion in commercial banks and $110 billion in investment banks. [Bloomberg, 1/20/2009; AFP Reporter, 1/22/2009] Since September 7, 2006, Dr. Roubini, an economics professor at New York University, has been known as “Dr. Doom” after telling an audience of economists at the International Monetary Fund that an economic crisis was brewing in the coming months and years. He warned that the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession, and laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he said, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac. [New York Times Magazine, 8/15/2008]
Prime Minister of Iceland Geir Haarde calls a general election for the spring, two years early. The decision to have early elections is triggered by the global financial crisis, which has hit Iceland particularly badly. Haarde adds that he will not stand again because he has throat cancer. Two days previously, protesters angry at the economic crisis had surrounded his car, banging on its windows and pelting it with eggs. [BBC, 2/2/2009]
Icelandic Prime Minister Geir Haarde announces the immediate resignation of the country’s government. The government became unstable when Iceland was hit particularly hard by the global financial crisis and the government had to take over three major banks. Haarde had already called an early election in Iceland (see January 23, 2009), but could have remained in office until voting. However, talks about continuing until the election with his coalition partner, the Social Democratic Alliance, break down and he leaves office. [BBC, 2/2/2009]
Following the resignation of the previous cabinet (see January 26, 2009), a new government is formed in Iceland by the Left-Green Movement and the Social Democratic Alliance. The new government will be in office for only a few months, until fresh elections in the spring. New Prime Minister Johanna Sigurdardottir sets out her government’s plan to deal with the financial crisis. She says her priority will be to replace the central bank’s board, which failed to prevent the collapse of the country’s banking system. She also says she will ask a parliamentary committee to look into joining the EU. [BBC, 2/2/2009]
Citigroup logo. [Source: Citigroup]The latest government bailout gives Citigroup bond holders excellent terms and doesn’t provide the bank with new money. Instead, Citigroup cut expenses with the elimination of preferred stock dividends, and also converted shares into common equity at an above-market-value of $3.25, positioning itself to take the first hit if it encounters additional losses. Analysts are predicting that the company’s losses will continue to increase. Since the beginning of 2009, Citigroup’s stock has fallen 78 percent. “Debt holders could eventually be required to participate in further government-led restructuring actions,” Standard and Poor’s says. [Bloomberg, 3/2/2009] Citigroup CEO Vikram Pandit tells investors that increasing the bank’s “tangible” common equity from $29.7 billion to as much as $81 billion should “take confidence issues off the table,” about the bank’s loss absorption ability. The bank lost $27.7 billion in 2008, and is predicted to lose $1.24 billion during the first six months of 2009. “There’s no difference here,” says Christopher Whalen, co-founder of Institutional Risk Analytics, a Torrance, California risk-advisory firm. “It won’t fix revenue, and you’re still going to see loss rates.” Whalen says that the government’s efforts are mainly protecting other financial institutions and foreign goverments that are Citigroup bonds holders. “The taxpayer is funding the operating loss and protecting the bondholders,” Whalen notes. “The subsidy for the banks will become one of the biggest lines in Washington’s budget.”
Government Should Organize Citigroup, AIG Bondholders - Whalen also says it would be better if the government organized Citigroup and insurer American International Group Inc. bondholders, since the insurer received a $150 billion US bailout, and also made a deal with the government to convert some of its debt to equity. US government investment fell by more than 50 percent, and the government plans to convert up to $25 billion of its preferred stock to common shares, gaining a 36 percent stake in the bank. At Friday’s closing price of $1.50, government investment is worth approximately $11.5 billion. The bank itself has a stock market value of $8.2 billion as of market closing on February 27.
Analyst: Investors Should Avoid Citigroup Shares - Richard Ramsden, head of a group of analysts at Goldman Sachs Group, recommends that investors avoid investing in Citigroup shares: “It is unclear whether this is the last round of capital restructuring, which means that existing equity may be further diluted in the future.” The bank’s move to convert preferred shares to common equity led Moody’s Investors Service to adjust its senior debt rating for the bank from A3 to A2. Standard and Poor’s also changed its outlook on the bank’s debt from negative to stable. “Citi will face a tough credit cycle in the next two years, which will likely result in weak and volatile earnings,” S&P analyst Scott Sprinzen says. “We cannot rule out the possibility that further government support may prove necessary.” With the first two Citigroup rescue bailouts, the US Treasury bought $45 billion of preferred stock, and the Federal Reserve and FDIC guaranteed the bank against all but $29 billion of losses on a $301 billion portfolio of assets. With the third bailout, the Treasury, the Government of Singapore Investment Corporation, Saudi Prince Alwaleed bin Talal, and other preferred stockholders, agreed to take common stock at $3.25 a share, giving up dividends. The chairman of the House Ways and Means Committee, Charles Rangel (D-NY), says: “The administration and the past administration have tried so many different ways that we can only hope and pray that this time they get it right. It seems like with the banks it is a never-ending thing.” [Bloomberg, 2/28/2009]
Third US Rescue Forces Citigroup Board Changes - The Obama administration demonstrated its willingness to force changes on executives at top banks that receive taxpayer-funded rescue packages by pressing Citigroup to reorganize its 15-member board with new, more independent members. The move sends a message to Wall Street that there are consequences when taxpayer dollars are used to save them. “The government is the new boss, and the new executive committee is no longer on Park Avenue,” says Michael Holland who, as chairman and founder of New York’s Holland & Co., manages nearly $4 billion in investments. [Bloomberg, 3/2/2009]
Entity Tags: Government of Singapore Investment Corporation, Christopher Whalen, Charles Rangel, Alwaleed bin Talal, AIG (American International Group, Inc.), Federal Deposit Insurance Corporation, Vikram Pandit, US Department of the Treasury, Citigroup, Richard Ramsden, Moody’s Investors Service, Standard & Poor’s, Michael Holland, Institutional Risk Analytics, Scott Sprinzen, US Federal Reserve
Timeline Tags: Global Economic Crises
European Union Leaders hold an emergency summit in Brussels, saying they are determined to avoid protectionist moves in response to the economic crisis that might cause a rift between nations in the East and West. The summit comes on the heels of French President Nicolas Sarkozy’s pledge to help his nation’s car industry, if jobs were safeguarded in France. Sarkozy’s pledge raised fears that national protectionism could scuttle hopes of a Eurozone recovery. Speaking after their meeting, European Commission President Jose Manuel Barroso says, “There was consensus on the need to avoid any unilateral protectionist measures.” German Chancellor Angela Merkel says that the newest EU member states that are former communist countries were not all in the same situation. Czech Republic Prime Minister Mirek Topolanek, the current EU president who also chairs the talks, condemns Sarkozy’s comments, saying: “We need a Europe without barriers but also a just and fair Europe. I think that it was perfectly clear that the European Union isn’t going to leave anybody in the lurch.” British Prime Minister Gordon Brown adds: “Today was the start of a European consensus on all these major issues that are facing the world community, including ‘no’ to protectionism. Bold global action, a global grand bargain, is not now just necessary, but it is vitally urgent.” President Sarkozy denies accusations of protectionism levied at his €6 billion (approximately $8 billion) bail-out plan to keep French carmakers manufacturing in France, but says that if the US defended its own industries, perhaps Europe should do the same. There is no announcement of a new EU aid package for the badly-hit economies of Central and Eastern Europe. The summit comes a week after the same EU leaders met to discuss reforming the EU’s financial system. Brown says the G20 talks next month represent an opportunity to agree on a new deal. “Only by working together will we deliver the EU and international recovery we need,” he says. This week, Brown will become the first European leader to hold talks with President Obama, who is also expected to visit Prague in April. [BBC, 3/1/2009]
Having received over $170 billion in taxpayer bailout funds in the last five months, troubled insurance giant American International Group (AIG) pays executives nearly $200 million in bonuses. The largest are bonus payouts that cover AIG Financial Products executives who sold risky credit default swap contracts that caused huge losses for the insurer (see September 16, 2008). Despite a request by US Treasury Secretary Timothy Geithner for the insurance conglomerate to curtail future bonus pay—and AIG’s agreement to do so—the global insurer cuts bonus checks on Sunday, March 15, 2009, in order to meet a bonus payment agreement deadline. The Treasury Department has publicly acknowledged that the government does not have the legal authority to block current bonus payments, although AIG stated in early March that it suffered its largest corporate loss in history, when it reported fourth quarter 2008 losses of $61.7 billion.
Treasury Tried to Prevent Payments - An anonymous Obama administration official says that on March 11 Geithner called AIG Chairman Edward Liddy demanding that the CEO renegotiate the insurer’s present bonus structure. In a letter, Liddy informed Geithner that outside lawyers had advised AIG that the company could face lawsuits, should they not make the contractually obligated payments. “AIG’s hands are tied,” Liddy wrote, although acknowledging that, with the company’s fiduciary situation, he found it “distasteful and difficult” to approve and pay the bonuses. He wrote that the early 2008 bonus payments agreement was entered into prior to the company being forced last fall to obtain the first taxpayer bailout because of the company’s severe financial distress.
Some Monies Already Paid Out - A white paper generated by AIG asserted that the firm had already distributed $55 million in “retention pay” to nearly 400 AIG Financial Products employees. According to the white paper, the global entity “will labor to reduce 2009 bonus payment amounts,” trimming payouts by at least 30 percent this year. [Associated Press, 3/15/2009]
President Obama formally announces his administration’s war strategy for Afghanistan and Pakistan, explicitly linking the two countries in a shared threat assessment requiring a comprehensive regional approach that commits US police and army trainers to Afghanistan, promises an enlargement of Afghan Security Forces, and a requests a boost in funding for Pakistan. The president specifically announces a deployment of 4,000 US troops to train Afghan Army and Police while calling for an accelerated effort to enlarge these forces to an army of 134,000 and a police force of 82,000. The Interagency Policy Group White Paper on the strategy suggests the build-up of Afghan Security Force numbers is only a first step. “Initially this will require a more rapid build-up of the Afghan Army and police up to 134,000 and 82,000 over the next two years, with additional enlargements as circumstances and resources warrant,” reads the paper. [The White House, Office of the Press Secretary, 3/27/2009; Interagency Policy Group, 3/27/2009 ] The New York Times, reporting a day in advance of the announcement, notes that the new strategy will not explicitly endorse the request from American commanders to increase the Afghan national security forces to 400,000 as it had reported earlier in the week (see March 18, 2009). [New York Times, 3/26/2009] Commenting later on Obama’s strategy, retired Army Lieutenant Colonel John Nagl, one of the chief architects of the nation-building counterinsurgency doctrine, will say that Obama’s troop increase and trainer push falls short and is a merely a “down payment” on what needs to be done to secure Afghanistan (see March 31, 2009).
A number of high-profile personalities leave the Czech Christian Democrats (KDU-CSL). The first to go is former party chairman Miroslav Kalousek, who has already announced his intention to leave and form a new party, to be called TOP 09. He is followed by lower house deputy, Vlasta Parkanova, who intends to follow Kalousek into TOP 09, her colleague Pavel Severa, and Senator Ludmila Mullerova. The exits mean that a total of five deputies have recently left the party. “Today I left the party and handed over my party card,” says Kalousek, adding that the KDU-CSL’s deputies club can throw him out if it wants. Whereas Severa says he is upset at the recent election of Cyril Svoboda to the position of party chairman, because of personal issues—in particular a property dispute—Svoboda is involved in, Parkanova is unhappy over an apparent move by the party to the left. [Novinky(.cz), 6/9/2009]
Former foreign minister and current senator Karel Schwarzenberg will lead the newly announced Czech right-wing political party TOP 09, says the party’s founder Miroslav Kalousek. Schwarzenberg will be the only candidate proposed for the position of chairman. Kalousek persuaded the popular 71-year-old Schwarzenberg, formerly associated with the Green Party, to join TOP 09. “The voter expects something new, that will get us out of the politics of the last few years. The sense of TOP 09 is alternative,” says Schwarzenberg at a press conference. [MladÃ¡ fronta DNES, 6/11/2009]
TOP 09, a new right-wing Czech political party guided by Miroslav Kalousek, submits an application for its registration to the Ministry of the Interior. Registering with the ministry is the step that will formally establish the party and allow it to compete in elections. The party’s preparatory committee has already received numerous applications for membership. “We are pleasantly surprised,” says Kalousek. “We thank them [the applicants] and are writing that they can become members when the party is formally established.” [Mlada fronta DNES, 6/15/2009]
FBI whistleblower Sibel Edmonds testifies under oath in a deposition for the Schmidt v. Krikorian case. David Krikorian, a 2010 Democratic candidate for US Representative of Ohio, had been sued by Jean Schmidt (R-OH) in response to his claim that she had accepted “blood money” from the Turkish lobby in exchange for opposing an Armenian genocide resolution. As part of his defense against Schmidt’s charge that he had libeled her, Krikorian subpoenaed Edmonds’s testimony, as she had previously spoken and written about corruption of members of Congress by the Turkish Lobby. In two unrelated lawsuits prior to this one, Edmonds had been blocked from testifying by former Attorney General John Ashcroft, under the State Secrets Act. In Schmidt v. Krikorian, however, the Department of Justice under Attorney General Eric Holder does not reinvoke the claim of “state secrets” or otherwise move to block the testimony, and does not dispatch legal counsel to raise objections during the deposition. At the deposition, Krikorian is represented by Dan Marino of Mark Geragos’ law firm, Schmidt is represented by Bruce Fein, and Edmonds has retained Stephen M. Kohn of the National Whistleblower Center. Kohn says he has “asked [Sibel Edmonds] to limit her responses only to the information that she believes to be publicly available or she has learned from sources outside of her employment.” Marino begins his examination of Edmonds by asking basic questions about her background and work with the FBI, then works through a lengthy series of questions based on public statements Edmonds had made regarding events she witnessed. Much of this information has previously been reported, but for the first time, Edmonds is swearing to it under oath. [Edmonds, 8/8/2009] The following subjects were covered in attorney Dan Marino’s initial examination of Sibel Edmonds:
Edmonds' Experience with Her FBI Co-worker Melek Can Dickerson and Her Husband, Major Douglas Dickerson - Edmonds and her husband Matthew Edmonds had previously said former FBI colleague Melek Can Dickerson and her husband, Major Douglas Dickerson, attempted to bribe her to pass on sensitive information (see December 2, 2001), and she confirms this. Edmonds had also previously reported to Congress and the Justice Department Inspector General that Melek Can Dickerson was spying for subjects of the FBI’s investigations (see (Late October 2001)), and she confirms this as well. [Edmonds, 8/8/2009, pp. 22-34, 38]
Turkish Entities Targeted by FBI Investigations of Influence and Espionage - When asked if the American Turkish Council was a target of FBI investigations (see Late 1990s-Early 2001, Edmonds confirms it, but when asked to identify others, she declines to specifically name any. When asked about the “Turkish Lobby”, Edmonds says there is an overt and a covert lobby. The covert lobby involves “trying to obtain very sensitive, classified, highly classified US intelligence information, weapons technology information, classified congressional records, recruiting—recruiting key US individuals with access to highly sensitive information, blackmailing, bribery.” She testifies the Turkish government is indirectly involved, and that its concerns include access to US aid and weapons, as well as preventing Congress from passing a resolution acknowledging the Turkish genocide of the Armenians. [Edmonds, 8/8/2009, pp. 26-41]
Edmonds' 'State Secrets Privilege Gallery' - Marino asks the meaning of the ‘State Secrets Privilege Gallery’ at her website, justacitizen.com (see January 6, 2008). The gallery is a collection of photos without names; Edmonds explains it features the subjects of FBI investigations Edmonds was part of during her time as an FBI translator, whose names and criminal activities were being protected by claims of State Secrets and the gag orders she had been placed under. The twenty-one photos (including three place holders with question marks) feature current and former State and Defense Dept. officials; current and former members of Congress; and lobbyists and members of think tanks. Marino then names nine of the people listed in the gallery, and asks why they’re listed. As it had been reported by others that Marc Grossman was the person involved, Edmonds discusses, in some detail, her knowledge of his involvement with a criminal network stealing and selling US nuclear secrets (see January 6, 2008 and After), as well as his disclosure to a Turkish agent that Brewster Jennings was a CIA front company investigating nuclear trafficking (see Summer-Autumn 2001). Edmonds discusses the others in more general terms; Dennis Hastert (R-IL), Dan Burton (R-IN), Stephen Solarz (D-NY), Bob Livingston (R-LA) and Tom Lantos (D-CA) are all variously accused of accepting bribes in exchange for serving the interests of foreign governments, as well as involvement in blackmail and money laundering. Lantos is also accused of “disclosing highest level protected US intelligence and weapons technology information both to Israel and to Turkey.” Edmonds indicates the question mark in the Congressional group is a bisexual woman and a current member of Congress. Turkish agents wanted her to oppose an Armenian genocide resolution, and because her husband was an influential businessman. Edmonds did not include her photo in the gallery, and declines to name her in the deposition, as she is unaware if the congresswoman had actually been blackmailed, or done anything illegal. However, in an interview published in the November 2008 American Conservative, Edmonds names her as Jan Schakowsky (D-IL). [Edmonds, 8/8/2009, pp. 42-84]
Indirect Knowledge of Illicit Israeli Influence on Congress - Asked if she is “aware of the Israeli government or Israeli organizations influencing members of Congress,” Edmonds responds, “Indirectly, based on how they work, some of the largest Israeli lobby groups with the entities such as ATC and also the Turkish diplomatic community and how they actually trained and make it possible for the Turkish lobby and these entities to do it. [T]hey had training period in ‘96 and ‘98 from individuals that were sent to them from both [AIPAC] and JINSA, both the lobbying, but also on… covering up the money track.” [Edmonds, 8/8/2009, pp. 64]
Behrooz Sarshar's Testimony regarding FBI 9/11 Foreknowledge - Marino asks Edmonds about an entry on her Wikipedia page that said, “[Edmonds] claims that the FBI received information in April 2001 from a reliable Iranian intelligence asset that Osama bin Ladin was planning attacks on four to five cities with planes. Some of the people were already in the country, and the attacks would happen in a few months.” Edmonds clarifies that she knew of this incident from FBI translator Behrooz Sarshar (see April 2001), and her role was that she, “facilitated Mr. Sharshar’s meeting with 9/11Commission and also with the Glenn Fine, Department of Justice Inspector General’s Office, and… put him in touch with the members of media.” [Edmonds, 8/8/2009, pp. 66-67]
How Blackmail Operations Are Conducted by Turkish Operatives - Sibel Edmonds explains how blackmail operations were conducted by Turkish agents. “[E]veryone was taught in [FBI] counterintelligence—that the target[,] US persons, whether they are in Congress or executive branch or whatever, first go by foreign entities to what they refer to as hooking period, and it was very common; it’s a very common way of trying to find vulnerability, and that is sexual, financial, any other kinds of greeds, and it was… being done a lot, and in some cases certain people from Pentagon would send a list of individuals with access to sensitive data, whether weapons technology or nuclear technology, and this information would include all their sexual preference, how much they owed on their homes, if they have gambling issues, and the State Department, high level State Department person would provide it to these foreign operatives, and those foreign operatives then would go and hook those Pentagon people, whether they were at RAND or some other Air Force base. And then the hooking period would take some times. Sometimes it takes months, sometimes one year. They would ask for small favor, but eventually after they reviewed the targets… then they would go blackmail and that person would give them everything, nuclear related information, weapons related information. It always worked for them. So it was not always money.” [Edmonds, 8/8/2009, pp. 72-74]
The Historical Reality and Turkish Denial of the Armenian Genocide - Edmonds acknowledges the Ottoman genocide of Armenians as historical fact. She also notes that in Turkish society acknowledgment of the genocide is not permitted, and there are active efforts to suppress and dispute information and views related to it. [Edmonds, 8/8/2009, pp. 78-81]
The Revolving Door between the US Government and the Turkish Lobby - Asked if she was aware that members of Congress have left office and become lobbyists for Turkey, Edmonds affirms her knowledge of Hastert, Solarz and Livingston having done so. She also adds, “But then there are people who work for these lobbying firms who are not the top, but they have received their share while they were working, whether they are in Pentagon. One person was Defense Intelligence Agency person, Dana Bauer, and now she works for Bob Livingston, but this individual, Ms. Bauer, did a lot of favors and illegal favors… for [the] government of Turkey and others, and then was hired by Livingston and put on a big salary to represent Turkish government. So it’s not only top tier of the lobbying firm, but then the people who work for them later and the various layers of those people.” [Edmonds, 8/8/2009, pp. 83]
Quid Pro Quo: Congress and the Turkish Lobby - Attorney Marino solicits Edmonds understanding of Congress, lobbyists and ‘quid pro quo’, with a hypothetical example he deems “particularly relevant to our case”, saying: “You have a hypothetical Congresswoman from State X. Her district has no Turkish population to speak of or Armenian population to speak of. She’s the largest recipient of Turkish PAC money in the 2008 election cycle. All right? She meets with Livingston and Rogers or Livingston Group when they’re escorting members of the Turkish parliament to a reception. She receives fact sheets from the Livingston Group talking about Turkish relations; goes to luncheons in honor of the Turkish Foreign Minister, and she opposes Armenian genocide resolution and, in fact, refuses to even recognize the genocide as a historical fact.” Edmonds responds, “Based on several that I personally know about in terms of how they conduct and how they behave, those elected officials who are serving the foreign government’s interest, I would say that’s modus operandi that you describe. It’s a classic fit of how individuals who happen to owe their position and favors to a foreign government, in this particular case Turkey, behave… and the kinds of people they associate with. That modus operandi classically matches of the individuals I know who were serving Turkish government’s and other Turkish entities’ interest.” [Edmonds, 8/8/2009, pp. 84-87]
Turkish Practices and Policies 'Inimical to American Interests' that Resulted in 'Lost Lives' - Edmonds is asked about a deposition-related declaration in which she stated that she had, “obtained evidence that the government of Turkey had engaged in practices and policies that were inimical to American interests and had, in fact, resulted in both the direct and indirect loss of American lives.” As examples, Edmonds refers to the setting up of Madrassahs in order to radicalize Muslims to be Mujahedeen and use them as proxies in conflicts and terrorism; trafficking in heroin; “illegally obtaining and selling” US military weapons and technology including nuclear secrets, as well as other top secret information, including foreign policy secrets; and the exposure of Brewster-Jennings as a CIA front company investigating nuclear trafficking (see Summer-Autumn 2001). [Edmonds, 8/8/2009, pp. 88-94]
Fethullah Gulen, US-Protected Madrassah Financier - When asked who Fethullah Gulen (spelled Fetullah Gulan in the transcript) is, Edmonds states his network controlled around $25 billion and had set up 300 Madrassahs in Central Asia. She says he fled Turkey when Turkish authorities linked him to plans to overthrow the secular Turkish government, and he was permitted to enter and remain in the US without a visa. Edmonds states he is establishing Madrassah’s in the US that are allegedly moderate but are in fact radicalizing Muslims, and that Gulen is being protected by US authorities because US entities consider his network useful for waging proxy wars over Central Asian energy resources. As an analogy, Edmonds says the “Cold War is not over”. [Edmonds, 8/8/2009, pp. 94-98] After Marino’s examination, Bruce Fein cross-examines Edmonds, then Marino re-examines and Fein cross-examines her again. The entire deposition lasts about four and a half hours. [Edmonds, 8/8/2009, pp. 104-216]
Entity Tags: Federal Bureau of Investigation, Tom Lantos, Douglas Dickerson, Bruce Fein, Bob Livingston, American Turkish Council, Stephen Solarz, Sibel Edmonds, Dan Burton, Richard Gephardt, John Ashcroft, Jan Schakowsky, Fethullah Gulen, Dennis Hastert, Roy Blunt, Melek Can Dickerson, Michael Kohn, Marc Grossman
Timeline Tags: Complete 911 Timeline
The new Greek government headed by Georgios Papandreou of the Panhellenic Socialist Movement (PASOK) announces a draft budget that will cut the Greek deficit dramatically. According to the draft, the deficit will be cut from 12.7 percent of GDP, although measures to assist the poor will also be implemented. [Reuters, 3/3/2010]
The Greek government releases a final draft of its budget that aims to cut the deficit to 8.7 percent of GDP in 2010. The deficit is now well over 10 percent, so such a reduction would show EU partners and markets that the country is trying to sort its finances out. However, the draft budget also sees public debt rising to 121 percent of GDP in 2010, from 113.4 percent in 2009. EU forecasts on Greece for 2010 are worse, with the deficit seen at 12.2 percent of GDP and national debt rising to 124.9 percent, the highest ratio in the EU. [Reuters, 3/3/2010]
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