The Voice of the White House

Washington , D.C. , March 13, 2008 : “Interesting piece of news of the duplicity of everyone inside the Beltway. The McCain people are terrified lest Crazy John’s religious nut preachers’ jabberings make serious trouble for him. In a typical alliance, the Clinton people have given the McCain people some tapes of a very emotional Chicago black minister, attacking the white establishment for years of harassment of the black community. The McCain people, in turn,  using Karl Rove’s hate networks, are planning a Swift Boat type of attack on Obama to deflect public attention from McCain’s vicious friends in the religious right. This is really interesting, if repulsive, because the black- stocking Republicans hate blacks, Asians, Jews, Communists, homosexuals, and liberals, equally. You ought to listen to some of their jovial chats sometime. It sounds like something heard in Nazi party circles in pre-war Germany . While wishing to appear supporters of blacks, the Clintons, both of them, are livid with rage that a black man is kicking Hillary’s huge ass. She thought she would be a walk-in for the Democratic nomination but now that she sees her long sought-after prize slipping from her grip, she and her people have become so frantic that they have no problem dealing with McCain, or even the vile Bush toadies.. Ergo, the Hillary people turned over inflammatory tapes by a black minister, Obama’s pastor, to the enemy in order to destroy her enemy. This is the old Mafia slogan that says the enemy of my enemy is my friend. Hillary is known to be a sell-out to the business establishment while Obama is less certain in his allegiances so the corporate structure will support her and McCain jointly and do everything they can to trash him. Bismarck once said  that many enemies meant much honor and that is certainly true now. As Hillary perceives that she might not become President, she morphs from patronizing the nice black people to screaming silent curses at the uppity nigger that is more successful in public than she is. The real loser in all of this filth- flinging is the American public and it goes almost without saying that we deserve better than both Republican and Democratic chronic and escalating vileness. Why not address the issues? Why? The Clinton people are in bed with the people who are the power elite and Obama is not.”

John McCain's "Spiritual Guide" Calls For Destruction Of Islam

March 12, 2008-

by David Corn

Mother Jones

Senator John McCain hailed as a spiritual adviser an Ohio megachurch pastor who has called upon Christians to wage a "war" against the "false religion" of Islam with the aim of destroying it.

On February 26, McCain appeared at a campaign rally in Cincinnati with the Reverend Rod Parsley of the World Harvest Church of Columbus, a supersize Pentecostal institution that features a 5,200-seat sanctuary, a television studio (where Parsley tapes a weekly show), and a 122,000-square-foot Ministry Activity Center. That day, a week before the Ohio primary, Parsley praised the Republican presidential front-runner as a "strong, true, consistent conservative."

The endorsement was important for McCain, who at the time was trying to put an end to the lingering challenge from former Arkansas governor Mike Huckabee, a favorite among Christian evangelicals. A politically influential figure in Ohio , Parsley could also play a key role in McCain's effort to win this bellwether state in the general election. McCain, with Parsley by his side at the Cincinnati rally, called the evangelical minister a "spiritual guide."

SECRECY NEWS

from the FAS Project on Government Secrecy

Volume 2008, Issue No. 25

March 11, 2008

THE FBI AS A FOREIGN INTELLIGENCE ORGANIZATION

Since 2006, the Federal Bureau of Investigation has assumed growing responsibilities as a collector of foreign intelligence, FBI budget documents indicate.

"In May 2006, the Director of the Office of National Intelligence tasked the FBI to use its collection authorities, consistent with applicable laws and protection of civil liberties, to collect FI [foreign intelligence] information against the National Intelligence Priorities Framework and pursuant to the National HUMINT Collection Directives."

Prior to that time, "there were no concerted efforts to collect FI exclusivly, nor did the FBI have an investigative program that solely focused intelligence collection activities on FI."

Today, the FBI is "the primary or supporting collector on ninety-eight (98) national intelligence topics that implement the [National Intelligence Priorities Framework]," according to the FBI's remarkably detailed congressional budget justification for fiscal year 2009 (page 6-48).

http://www.fas.org/irp/agency/doj/fbi/2009just.pdf

Virtually all foreign intelligence gathered by the FBI comes from confidential human sources. The Bureau requested $3.2 million to pay for source recruitment, or "approximately $16,000 per Agent for 200 Agents" (page 6-50).

The FBI Counterterrorism Division validated -- i.e. checked the reliability of -- 60% of its confidential human sources in FY 2007.  This was an increase from 0% the year before, but short of the target of 100% validation (page 4-31).

Among other notable details, the FBI budget request states that in FY2007 there were over 21,000 "positive encounters" with known or suspected terrorists (page 4-29). "A positive encounter is one in which an encountered individual is positively matched with an identity in the Terrorist Screening Data Base."

The budget document also reports on threats to government and private information systems, stating that "more than 20 terabytes of sensitive information has been stolen to date, disrupting military operations and significantly impacting the confidence in the integrity of our national information infrastructure" (page 6-20).

A recent national security computer intrusion investigation determined that "computers were compromised at a sensitive policy making government entity" (page 6-23).

SECRECY REIGNS AT THE DOJ OFFICE OF LEGAL COUNSEL

The Justice Department's Office of Legal Counsel (OLC), which is responsible for interpreting the law for executive branch agencies, has played an influential role in the development of Bush Administration policy, and an unusually secretive one.

In a December 7 floor statement, Senator Sheldon Whitehouse (D-RI) described the contents of three OLC opinions that he had been able to review. One of them discussed the nature of executive orders as a category. Sen. Whitehouse characterized the conclusions of that OLC opinion as follows:

"An Executive order cannot limit a President. There is no constitutional requirement for a President to issue a new Executive order whenever he wishes to depart from the terms of a previous Executive order."

http://www.fas.org/irp/congress/2007_cr/fisa120707.html

We requested a copy of that seemingly innocuous, if questionable, opinion under the Freedom of Information Act. But the request was denied.

"We are withholding the document in full because it is classified and thus exempt under Exemption 1 of the FOIA," the OLC responded.

http://www.fas.org/sgp/news/2008/02/olc020508.pdf

"The OLC should publicly release more of its opinions, as was routinely done during Janet Reno's tenure as attorney general during the 1990s," the Washington Post editorialized today. "Too many Bush OLC memos remain secret, with only a handful of administration officials being privy to their conclusions."

"During the Bush administration, the OLC has become known as a partisan enabler of legally and ethically questionable presidential policies, including those involving the use of torture."

See "The President's Lawyers," March 11:

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/10/AR2008031002664.html

SUNSHINE WEEK

Sunshine Week, a national campaign to promote openness and access to information, is March 16-22, 2008 . Numerous events at the national and local level, as well as online, have been scheduled to encourage a public dialogue on transparency.

More information and abundant resources can be found here:

http://www.sunshineweek.org/

National Freedom of Information Act day will be observed on March 14 with a day-long conference sponsored by the First Amendment Center .

http://www.firstamendmentcenter.org/press/information/topic.aspx?topic=FOI_Day

The recently-formed Collaboration on Government Secrecy at the American University 's Washington College of Law will hold a conference on Monday March 17.

http://www.wcl.american.edu/secle/founders/2008/031708.cfm

OpenTheGovernment.org will hold a webcast conference on Government Secrecy at the National Press Club on March 19.

http://www.openthegovernment.org/article/subarchive/109

Other national and local Sunshine Week events are noted here:

http://www.sunshineweek.org/index.cfm?id=6843

The Poisoning of America

AP Probe Finds Drugs in Drinking Water

March 10. 2008

by Jeff Donn, Martha Mendoza and Justin Pritchard

AP

A vast array of pharmaceuticals — including antibiotics, anti-convulsants, mood stabilizers and sex hormones — have been found in the drinking water supplies of at least 41 million Americans, an Associated Press investigation shows.

To be sure, the concentrations of these pharmaceuticals are tiny, measured in quantities of parts per billion or trillion, far below the levels of a medical dose. Also, utilities insist their water is safe.

But the presence of so many prescription drugs — and over-the-counter medicines like acetaminophen and ibuprofen — in so much of our drinking water is heightening worries among scientists of long-term consequences to human health.

In the course of a five-month inquiry, the AP discovered that drugs have been detected in the drinking water supplies of 24 major metropolitan areas — from Southern California to Northern New Jersey , from Detroit to Louisville , Ky.

Water providers rarely disclose results of pharmaceutical screenings, unless pressed, the AP found. For example, the head of a group representing major California suppliers said the public "doesn't know how to interpret the information" and might be unduly alarmed.

How do the drugs get into the water?

People take pills. Their bodies absorb some of the medication, but the rest of it passes through and is flushed down the toilet. The wastewater is treated before it is discharged into reservoirs, rivers or lakes. Then, some of the water is cleansed again at drinking water treatment plants and piped to consumers. But most treatments do not remove all drug residue.

And while researchers do not yet understand the exact risks from decades of persistent exposure to random combinations of low levels of pharmaceuticals, recent studies — which have gone virtually unnoticed by the general public — have found alarming effects on human cells and wildlife.

"We recognize it is a growing concern and we're taking it very seriously," said Benjamin H. Grumbles, assistant administrator for water at the U.S. Environmental Protection Agency.

Members of the AP National Investigative Team reviewed hundreds of scientific reports, analyzed federal drinking water databases, visited environmental study sites and treatment plants and interviewed more than 230 officials, academics and scientists. They also surveyed the nation's 50 largest cities and a dozen other major water providers, as well as smaller community water providers in all 50 states.

Here are some of the key test results obtained by the AP:

_Officials in Philadelphia said testing there discovered 56 pharmaceuticals or byproducts in treated drinking water, including medicines for pain, infection, high cholesterol, asthma, epilepsy, mental illness and heart problems. Sixty-three pharmaceuticals or byproducts were found in the city's watersheds.

_Anti-epileptic and anti-anxiety medications were detected in a portion of the treated drinking water for 18.5 million people in Southern California .

_Researchers at the U.S. Geological Survey analyzed a Passaic Valley Water Commission drinking water treatment plant, which serves 850,000 people in Northern New Jersey , and found a metabolized angina medicine and the mood-stabilizing carbamazepine in drinking water.

_A sex hormone was detected in San Francisco 's drinking water.

_The drinking water for Washington , D.C. , and surrounding areas tested positive for six pharmaceuticals.

_Three medications, including an antibiotic, were found in drinking water supplied to Tucson , Ariz.

The situation is undoubtedly worse than suggested by the positive test results in the major population centers documented by the AP.

The federal government doesn't require any testing and hasn't set safety limits for drugs in water. Of the 62 major water providers contacted, the drinking water for only 28 was tested. Among the 34 that haven't: Houston , Chicago , Miami , Baltimore , Phoenix , Boston and New York City 's Department of Environmental Protection, which delivers water to 9 million people.

Some providers screen only for one or two pharmaceuticals, leaving open the possibility that others are present.

The AP's investigation also indicates that watersheds, the natural sources of most of the nation's water supply, also are contaminated. Tests were conducted in the watersheds of 35 of the 62 major providers surveyed by the AP, and pharmaceuticals were detected in 28.

Yet officials in six of those 28 metropolitan areas said they did not go on to test their drinking water — Fairfax, Va.; Montgomery County in Maryland; Omaha, Neb.; Oklahoma City; Santa Clara, Calif., and New York City.

The New York state health department and the USGS tested the source of the city's water, upstate. They found trace concentrations of heart medicine, infection fighters, estrogen, anti-convulsants, a mood stabilizer and a tranquilizer.

City water officials declined repeated requests for an interview. In a statement, they insisted that " New York City 's drinking water continues to meet all federal and state regulations regarding drinking water quality in the watershed and the distribution system" — regulations that do not address trace pharmaceuticals.

In several cases, officials at municipal or regional water providers told the AP that pharmaceuticals had not been detected, but the AP obtained the results of tests conducted by independent researchers that showed otherwise. For example, water department officials in New Orleans said their water had not been tested for pharmaceuticals, but a Tulane University researcher and his students have published a study that found the pain reliever naproxen, the sex hormone estrone and the anti-cholesterol drug byproduct clofibric acid in treated drinking water.

Of the 28 major metropolitan areas where tests were performed on drinking water supplies, only Albuquerque ; Austin , Texas ; and Virginia Beach , Va. ; said tests were negative. The drinking water in Dallas has been tested, but officials are awaiting results. Arlington , Texas , acknowledged that traces of a pharmaceutical were detected in its drinking water but cited post-9/11 security concerns in refusing to identify the drug.

The AP also contacted 52 small water providers — one in each state, and two each in Missouri and Texas — that serve communities with populations around 25,000. All but one said their drinking water had not been screened for pharmaceuticals; officials in Emporia , Kan. , refused to answer AP's questions, also citing post-9/11 issues.

Rural consumers who draw water from their own wells aren't in the clear either, experts say.

The Stroud Water Research Center , in Avondale , Pa. , has measured water samples from New York City 's upstate watershed for caffeine, a common contaminant that scientists often look for as a possible signal for the presence of other pharmaceuticals. Though more caffeine was detected at suburban sites, researcher Anthony Aufdenkampe was struck by the relatively high levels even in less populated areas.

He suspects it escapes from failed septic tanks, maybe with other drugs. "Septic systems are essentially small treatment plants that are essentially unmanaged and therefore tend to fail," Aufdenkampe said.

Even users of bottled water and home filtration systems don't necessarily avoid exposure. Bottlers, some of which simply repackage tap water, do not typically treat or test for pharmaceuticals, according to the industry's main trade group. The same goes for the makers of home filtration systems.

Contamination is not confined to the United States . More than 100 different pharmaceuticals have been detected in lakes, rivers, reservoirs and streams throughout the world. Studies have detected pharmaceuticals in waters throughout Asia , Australia , Canada and Europe — even in Swiss lakes and the North Sea .

For example, in Canada , a study of 20 Ontario drinking water treatment plants by a national research institute found nine different drugs in water samples. Japanese health officials in December called for human health impact studies after detecting prescription drugs in drinking water at seven different sites.

In the United States , the problem isn't confined to surface waters. Pharmaceuticals also permeate aquifers deep underground, source of 40 percent of the nation's water supply. Federal scientists who drew water in 24 states from aquifers near contaminant sources such as landfills and animal feed lots found minuscule levels of hormones, antibiotics and other drugs.

Perhaps it's because Americans have been taking drugs — and flushing them unmetabolized or unused — in growing amounts. Over the past five years, the number of U.S. prescriptions rose 12 percent to a record 3.7 billion, while nonprescription drug purchases held steady around 3.3 billion, according to IMS Health and The Nielsen Co.

"People think that if they take a medication, their body absorbs it and it disappears, but of course that's not the case," said EPA scientist Christian Daughton, one of the first to draw attention to the issue of pharmaceuticals in water in the United States .

Some drugs, including widely used cholesterol fighters, tranquilizers and anti-epileptic medications, resist modern drinking water and wastewater treatment processes. Plus, the EPA says there are no sewage treatment systems specifically engineered to remove pharmaceuticals.

One technology, reverse osmosis, removes virtually all pharmaceutical contaminants but is very expensive for large-scale use and leaves several gallons of polluted water for every one that is made drinkable.

Another issue: There's evidence that adding chlorine, a common process in conventional drinking water treatment plants, makes some pharmaceuticals more toxic.

Human waste isn't the only source of contamination. Cattle, for example, are given ear implants that provide a slow release of trenbolone, an anabolic steroid used by some bodybuilders, which causes cattle to bulk up. But not all the trenbolone circulating in a steer is metabolized. A German study showed 10 percent of the steroid passed right through the animals.

Water sampled downstream of a Nebraska feedlot had steroid levels four times as high as the water taken upstream. Male fathead minnows living in that downstream area had low testosterone levels and small heads.

Other veterinary drugs also play a role. Pets are now treated for arthritis, cancer, heart disease, diabetes, allergies, dementia, and even obesity — sometimes with the same drugs as humans. The inflation-adjusted value of veterinary drugs rose by 8 percent, to $5.2 billion, over the past five years, according to an analysis of data from the Animal Health Institute.

Ask the pharmaceutical industry whether the contamination of water supplies is a problem, and officials will tell you no. "Based on what we now know, I would say we find there's little or no risk from pharmaceuticals in the environment to human health," said microbiologist Thomas White, a consultant for the Pharmaceutical Research and Manufacturers of America.

But at a conference last summer, Mary Buzby — director of environmental technology for drug maker Merck & Co. Inc. — said: "There's no doubt about it, pharmaceuticals are being detected in the environment and there is genuine concern that these compounds, in the small concentrations that they're at, could be causing impacts to human health or to aquatic organisms."

Recent laboratory research has found that small amounts of medication have affected human embryonic kidney cells, human blood cells and human breast cancer cells. The cancer cells proliferated too quickly; the kidney cells grew too slowly; and the blood cells showed biological activity associated with inflammation.

Also, pharmaceuticals in waterways are damaging wildlife across the nation and around the globe, research shows. Notably, male fish are being feminized, creating egg yolk proteins, a process usually restricted to females. Pharmaceuticals also are affecting sentinel species at the foundation of the pyramid of life — such as earth worms in the wild and zooplankton in the laboratory, studies show.

Some scientists stress that the research is extremely limited, and there are too many unknowns. They say, though, that the documented health problems in wildlife are disconcerting.

"It brings a question to people's minds that if the fish were affected ... might there be a potential problem for humans?" EPA research biologist Vickie Wilson told the AP. "It could be that the fish are just exquisitely sensitive because of their physiology or something. We haven't gotten far enough along."

With limited research funds, said Shane Snyder, research and development project manager at the Southern Nevada Water Authority, a greater emphasis should be put on studying the effects of drugs in water.

"I think it's a shame that so much money is going into monitoring to figure out if these things are out there, and so little is being spent on human health," said Snyder. "They need to just accept that these things are everywhere — every chemical and pharmaceutical could be there. It's time for the EPA to step up to the plate and make a statement about the need to study effects, both human and environmental."

To the degree that the EPA is focused on the issue, it appears to be looking at detection. Grumbles acknowledged that just late last year the agency developed three new methods to "detect and quantify pharmaceuticals" in wastewater. "We realize that we have a limited amount of data on the concentrations," he said. "We're going to be able to learn a lot more."

While Grumbles said the EPA had analyzed 287 pharmaceuticals for possible inclusion on a draft list of candidates for regulation under the Safe Drinking Water Act, he said only one, nitroglycerin, was on the list. Nitroglycerin can be used as a drug for heart problems, but the key reason it's being considered is its widespread use in making explosives.

So much is unknown. Many independent scientists are skeptical that trace concentrations will ultimately prove to be harmful to humans. Confidence about human safety is based largely on studies that poison lab animals with much higher amounts.

There's growing concern in the scientific community, meanwhile, that certain drugs — or combinations of drugs — may harm humans over decades because water, unlike most specific foods, is consumed in sizable amounts every day.

Our bodies may shrug off a relatively big one-time dose, yet suffer from a smaller amount delivered continuously over a half century, perhaps subtly stirring allergies or nerve damage. Pregnant women, the elderly and the very ill might be more sensitive.

Many concerns about chronic low-level exposure focus on certain drug classes: chemotherapy that can act as a powerful poison; hormones that can hamper reproduction or development; medicines for depression and epilepsy that can damage the brain or change behavior; antibiotics that can allow human germs to mutate into more dangerous forms; pain relievers and blood-pressure diuretics.

For several decades, federal environmental officials and nonprofit watchdog environmental groups have focused on regulated contaminants — pesticides, lead, PCBs — which are present in higher concentrations and clearly pose a health risk.

However, some experts say medications may pose a unique danger because, unlike most pollutants, they were crafted to act on the human body.

"These are chemicals that are designed to have very specific effects at very low concentrations. That's what pharmaceuticals do. So when they get out to the environment, it should not be a shock to people that they have effects," says zoologist John Sumpter at Brunel University in London , who has studied trace hormones, heart medicine and other drugs.

And while drugs are tested to be safe for humans, the timeframe is usually over a matter of months, not a lifetime. Pharmaceuticals also can produce side effects and interact with other drugs at normal medical doses. That's why — aside from therapeutic doses of fluoride injected into potable water supplies — pharmaceuticals are prescribed to people who need them, not delivered to everyone in their drinking water.

"We know we are being exposed to other people's drugs through our drinking water, and that can't be good," says Dr. David Carpenter, who directs the Institute for Health and the Environment of the State University of New York at Albany .

The AP National Investigative Team can be reached at investigate (at) ap.org

AP: Water Makes US Troops in Iraq Sick

March 10, 2008

by Larry Margasak

AP

WASHINGTON - Dozens of U.S. troops in Iraq fell sick at bases using "unmonitored and potentially unsafe" water supplied by the military and a contractor once owned by Vice President Dick Cheney's former company, the Pentagon's internal watchdog says.

A report obtained by The Associated Press said soldiers experienced skin abscesses, cellulitis, skin infections, diarrhea and other illnesses after using discolored, smelly water for personal hygiene and laundry at five U.S. military sites in Iraq .

The Defense Department's inspector general's report, which could be released as early as Monday, found water quality problems between March 2004 and February 2006 at three sites run by contractor KBR Inc., and between January 2004 and December 2006 at two military-operated locations.

It was impossible to link the dirty water definitively to all the illnesses, according to the report. But it said KBR's water quality "was not maintained in accordance with field water sanitary standards" and the military-run sites "were not performing all required quality control tests."

The report said KBR took corrective steps and was providing adequate water quality by November 2006. But military units at the two sites they controlled were still failing to perform required quality control tests and maintain appropriate records by that time.

"Therefore, water suppliers exposed U.S. forces to unmonitored and potentially unsafe water," at the military sites by late 2006, the report said.

The problems did not extend to troops' drinking water, but rather to water used for washing, bathing, shaving and cleaning. Water used for hygiene and laundry must meet minimum safety standards under military regulations because of the potential for harmful exposure through the eyes, nose, mouth, cuts and wounds.

The KBR sites were Camp Ar Ramadi, Camp Q-West and Camp Victory . The military sites were Logistics Support Area Anaconda and Camp Ali .

The inspector general's study confirmed AP reports on the contaminated water in early 2006 and provided additional details on the scope of the problem at the Iraq bases. In January that year, interviews and internal company documents disclosed the problems at Ar Ramadi and showed that KBR employees could not get the company to inform base residents.

Halliburton Co., then KBR's parent company, disputed the allegations even though they were made by its own employees and documented in company e-mails. In March 2006, the AP obtained an internal Halliburton report that, in one instance, the company missed contamination that could have caused "mass sickness or death" at Ar Ramadi.

The report said the event at Ar Ramadi could have been prevented if KBR's reverse osmosis units on the site had been assembled, instead of relying on the military's water production facilities.

Halliburton is the oil services conglomerate that Cheney once led. Congressional Democrats long have complained that KBR has benefited from its former ties to Cheney.

KBR, responding to the inspector general's report, said its water treatment "has met or exceeded all applicable military and contract standards." The company took exception to many of the inspector general's assertions. "KBR's commitment to the safety of all of its employees remains unwavering," the company said in a statement to the AP.

KBR provided water treatment to U.S. troops under a large-scale defense contract that also included housing and food to soldiers in Iraq , Afghanistan , Kuwait , Djbouti and Georgia .

The military has "taken the appropriate measures to correct the problem and ensure we provide the appropriate oversight of the system," said Navy Capt. James Graybeal of the U.S. Central Command, which oversees U.S. troops in the Middle East.

North Dakota Sen. Byron Dorgan, who has led Democratic inquiries into contracting abuses in Iraq , said the inspector general has backed up what those earlier hearings uncovered. "KBR was not doing its job" and U.S. forces had water that did not meet Army standards, Dorgan said.

"I think it's outrageous that KBR tried to deny that there was a problem, especially when it turned out that there were dozens of U.S. troops reporting water-related illnesses," he said.

The inspector general investigated the 2006 reports at Dorgan's request.

The inspector general's report said some troops noticed problems with the water. Between October 2004 and May 2005, troops at Camp Ar Ramadi said bathwater was discolored and had an unusual odor. The report said KBR failed to treat the nonpotable water and monitor water quality during the same period.

At Camp Q-West, KBR inappropriately delivered chlorinated wastewater for showers and latrines without informing military preventive medicine officials, the report said. "KBR did not monitor or record the quality of water at point-of-use containers before April 2006, even though the ... contract required the company to do so," the report added.

Medical records for troops at Camp Q-West indicated 38 cases of illnesses commonly attributed to problem water. These include skin abscesses, cellulitis, skin infections and diarrhea. Doctors diagnosed 24 of the cases in January and February 2006, the same period when medical officials warned of a rise in bacterial infections at the base.

In addition, military medical records - tied to no particular base in Iraq - showed 26 cases of food and waterborne diseases, including hepatitis, giardiasis and typhoid fever.

What they didn't tell you about the recent meat recall

March 12, 2008

by Stephen J. Hedges

Seattle Times/ Chicago Tribune

WASHINGTON- The largest meat recall in U.S. history was bound to reverberate throughout the food-manufacturing world. So far, four major food manufacturers – ConAgra, General Mills, Heinz and Nestlé- have acknowledged that meat involved in the 143 million-pound recall, announced Feb. 17, was used in some of their products

So why haven't those products been recalled?

They have been — very quietly.

Nestlé, General Mills, Heinz and ConAgra each acknowledged to news organizations that they have recalled products containing beef from the meatpacking company Hallmark/Westland.

Those products include two versions of Nestlé's Hot Pocket sandwiches, Heinz's Boston Market lasagna with meat sauce, General Mills' Progresso Italian Wedding Soup and a variety of meat products from ConAgra, ranging from Slim Jim snacks to Hunt's Manwich Original Sloppy Joe Sauce.

The companies stressed that the use of Hallmark/Westland meat was limited, and that they notified retailers and told them to pull those products.

But none had taken the usual step of notifying consumers through news releases and warnings on Web sites.

Why the secrecy? In part because the recall is indirect; the U.S. Department of Agriculture (USDA) urged Hallmark/Westland to contact food producers that use its meat and urge them to pull their products. But the USDA did not contact food producers.

The food manufacturers said they are under no obligation to notify consumers.

The Hallmark/Westland recall is considered a Class II recall under U.S. Department of Agriculture guidelines, which means there is a remote risk of adverse human-health effects.

But food-safety advocates said ordinary shoppers have been forgotten.

"It's better to fess up and be open and honest with your consumers," said Bill Marler, a lawyer who often sues companies on behalf of food-poisoning victims. "It makes consumers more comfortable with your product, not less comfortable."

Company officials said their understanding was that the USDA wanted them to notify only retailers. "There was not a requirement for public notification through USDA because the health risk is negligible," said Nestlé spokeswoman Roz O'Hearn.

General Mills spokeswoman Kirstie Foster said, "This is not a consumer recall. According to USDA, consumers do not need to take action."

ConAgra asked grocers carrying the affected products to remove them. A spokeswoman said consumers will be reimbursed upon request, but the company's Web sites don't mention that offer.

Heinz said only a "small portion" of recalled ground beef was used in its lasagna and it is working with stores "to ensure the recalled product is removed from store shelves."

Amanda Eamich, of USDA's Food Safety and Inspection Service, said the department's recall directly named only Hallmark/Westland, not its customers. But USDA did tell Hallmark/Westland to ask the manufacturers that use its meat to pull their products. She acknowledged the agency did not ask that consumers be notified.

"Companies can certainly choose to do so if they'd like," Eamich said. "But our goal is to make sure that products are controlled and destroyed."

Hallmark/Westland and the USDA announced the meat recall after the Humane Society of the United States released a video that showed dairy cows bound for slaughter being mistreated at the company's Chino , Calif. , slaughter plant.

The mistreated cows were "downers," unable to stand because of undetermined ailments. The slaughter of downers is strictly regulated; the USDA requires an inspection, and only those whose ailments pose no risk to food, such as a broken leg, can be slaughtered.

The video led to the recall and to the closing of the Chino plant and criminal charges against two former Hallmark/Westland employees. The USDA is conducting an investigation and has put two inspectors who were working at the plant on administrative leave.

Richard Raymond, the USDA undersecretary for food safety, told Congress last week that recalled Hallmark/Westland meat went to more than 10,000 distributors and food manufacturers, including the USDA’s own nutrition programs- including the school-lunch program- which brought 50 million pounds of meat.

About 100 school districts in Washington state, including in Seattle , received raw beef from Hallmark/Westland in November and December. In late January, the USDA advised schools to stop using the beef.

Raymond said USDA regulations prevent the department from disclosing Hallmark/Westland's customers because such information is considered proprietary. Food-safety groups argued for lifting that restriction.

The food producers involved emphasized that their use of Hallmark/Westland meat was limited.

"A very small amount of those products is impacted," said Teresa Paulsen, of ConAgra. "That's because we produced product with beef sourced from Westland on only a few days. In fact, less than two-tenths of 1 percent of our overall product volume is impacted."

Foster, of General Mills, said Hallmark/Westland was not a supplier to the company. Instead, she said, the meat company was a vendor to one of General Mills' suppliers and the recalled meat made it into 35,000 cases of Progresso Italian Wedding Soup "for a very short time."

Nestlé's O'Hearn said the Hallmark/Westland recall affected the company "in a very minor way" and just "two days of production on one line in one facility" are being recalled.

Marler, the lawyer, criticized the department for its handling of the Hallmark/Westland recall, which he said was too broad to be effective. The recall covered meat produced from Feb. 1, 2006 , to Feb. 2, 2008 , an unusually long period for perishable food.

USDA officials said most of the recalled meat likely had been consumed. They said no illnesses linked to the meat have been reported.

Material from The Seattle Times archives is included in this report.

The Economic Collapse

Half of gold in central banks gone?

January 29, 2008

by Jerome R. Corsi

Genesis Communications Network

U.S. central banks may have less than half the gold they claim to possess in their vaults, charges a watchdog group in an ad scheduled for publication in the Wall Street Journal this week.

As WND reported, the Gold Anti-Trust Action Committee, or GATA, claims the Federal Reserve and the U.S. Treasury are surreptitiously manipulating the country's gold reserves by participating in undisclosed leases, according to an advance copy WND obtained of the ad running in Thursday's edition of the Journal.

GATA believes much of the borrowed gold out on lease will never be returned to the central banks.

"With the demand for gold so strong worldwide, it has become impossible to return much of the leased gold without driving the price to the moon," said GATA's chairman, William J. Murphy III.

"Most observers calculate central bank reserves are supposed to have about 30,000 tons of gold worldwide in their vaults, but we believe the amount of gold actually there may be more like 15,000 tons," Murphy said. "The rest of the gold is gone."

The U.S. Treasury denies the claim, insisting the stock is accounted for regularly.

"We want to expose and stop the manipulation of the gold market by the United States Treasury and Federal Reserve right now," Murphy said.

"The purpose of this ad is to wake people up in the investment world as to what is going on behind the scenes in the U.S. gold and financial markets," Murphy told WND.

He explained GATA has decided to pay the Wall Street Journal $264,000 for a one-time placement of the full page ad in the national edition because the financial press has not covered the story.

"We have had two major international conferences since 2001; the mainstream financial press has blackballed our message," Murphy explained.

"Anybody Seen Our Gold?" the ad is titled, charging U.S. gold reserves held at depositories such as Fort Knox or West Point may have been seriously depleted as they are shipped overseas to settle complex transactions utilized by the Federal Reserve and the U.S. Treasury to suppress prices.

GATA further charges the U.S. government strategy to manipulate the price of gold has begun to fail.

"The objective of this manipulation is to conceal the mismanagement of the U.S. dollar so that it might retain its function as the world’s reserve currency," the ad copy reads.

"Gold's recent rise toward $900 per ounce shows that the price suppression scheme is faltering," GATA says. "When it is widely understood how central banks have been suppressing gold, its price may rise to $3,000 or $5,000 an ounce or more."

As evidence of gold price manipulation by the U.S. Treasury and the Federal Reserve, GATA cites Treasury's weekly report of the government's international reserve position that since May has listed gold loans and swaps as a line item in accounting for U.S. gold reserves.

The ad also cites a July 24, 1998 , statement by then-Federal Reserve Chairman Alan Greenspan, who told Congress "central banks stand ready to lease gold in increasing quantities should the price rise."

The most recent U.S. Treasury statement of the U.S. international reserve position, released Jan. 24, lists the total U.S. foreign currency reserves as $71.515 billion, of which $11.041 billion is listed as gold (including gold deposits and, if appropriate, gold swapped).

The Bank of International Settlements reports the gold derivatives market hit a peak of $640 billion dollars in December 2006.

Murphy emphasizes that tracing the derivatives back to central bank gold transactions and determining precisely the degree to which the Federal Reserve and the U.S. Treasury are involved is not possible now, given the lack of public accountability and transparency built into the gold derivatives financial system worldwide.

Murphy said his group filed a Freedom of Information Act request with the U.S. Treasury and the Federal Reserve "to find out what this line item is all about."

"What is the true status of the U.S. gold that is supposed to belong to the American people?" he asked. "Has U.S. gold been put into play without the Treasury or Fed letting the American people know?"

A statement on Treasury's website claims the agency's Exchange Stabilization Fund has not been used to manipulate gold prices. But no statement could be found on the Treasury website that categorically denies the agency engages in gold swaps, leases or futures contracts for reasons other than to manipulate the price of gold.

The London Bullion Market Association lists on its website more than 80 members working as "bullion bank market makers" engaged in the worldwide gold commodities market place as principals originating and participating in various gold derivative products, including gold leases and swaps.

The U.S. members of the London Bullion Market Association listed include Bear Stearns Forex Inc., Goldman Sachs International, JP Morgan Chase Bank, Bank of America, Citibank, Merrill Lynch and Morgan Stanley.

A legal memorandum filed Feb. 28, 2003 , on behalf of Barrick Gold Corporation, a major gold company affiliated with bullion bank J. P. Morgan, admitted Barrick engages with central banks in gold leases and other gold derivative transactions, without specifically admitting whether any such transactions were conducted on behalf of the Federal Reserve and Treasury.

In September 1999, European central banks meeting in Washington signed what has become known as the "Washington Accord," an agreement in which the banks agreed to limit the amount of their gold sales to 400 tons per year and not to expand their leasing operations during the five years of the agreement.

Under a gold lease, a central bank loans gold to a bullion bank at a nominal rate of interest, typically 1 percent.

The bullion banks then takes the gold lease to a commodities market such as the London Bullion Market, where the physical gold is sold, thereby adding to the supply of gold available on the market.

Problems develop when the price of gold rises dramatically, such as it has in recently months, with gold currently running over $900 an ounce.

Now, when the leased gold needs to be returned to the central banks at the end of the lease period, the bullion banks may have to go into the market and buy gold at a much higher price than the price when the gold initially was leased.

To hedge against the risk, bullion banks typically buy futures contracts or gold call options to secure gold delivery at a specified future date for a specified future price.

In the world of gold derivatives, a wide variety of contracts exist, including transactions in which central banks swap gold reserves, so they can carry out leasing or other gold derivative transactions using the gold of the other central bank rather than their own.

Gold swaps make central bank gold transactions even less transparent and more difficult to track.

Under current International Monetary Fund rules, central banks do not have to disclose on their financial statements how much of the gold in their stated reserves is encumbered by derivative contracts, including gold leases and swaps.

Nor are bullion banks required to disclose to the public the contracts under which they lease gold from central banks.

Gold yesterday hit a new all-time high, with futures contracts for February delivery surging to $929.80 an ounce on the New York Mercantile Exchange in mid-day trading.

Buyout Industry Staggers Under Weight of Debt

March 11, 2008

by Michael  J.de la Merced

New York Times

With their big paydays and bigger egos, private equity moguls came to symbolize an era of hyper-wealth on Wall Street.

Now their fortunes are plummeting.

Celebrated buyout firms like the Blackstone Group and Kohlberg Kravis Roberts & Company, hailed only a year ago for their deal-making prowess, are seeing their profits collapse as the credit crisis spreads through the financial markets.

Investors fear that some of the companies that these firms bought on credit could, like millions of American homeowners, begin to buckle under their heavy debts now that a recession seems almost certain. The buyout lords themselves suddenly confront gaping multibillion-dollar losses on their investments.

On a day in which the stock market tumbled to its lowest point in two years and rumors flew that a major Wall Street firm might be in trouble, Blackstone said Monday that its profit had plunged.

The firm said earnings tumbled 89 percent in the final three months of 2007 and warned that the deep freeze in the credit markets — and, by extension, in the private equity industry — was unlikely to thaw soon.

“They see the handwriting on the wall,” said Martin S. Fridson, a leading expert on junk bonds, said of buyout firms. “They’re staring into the jaws of hell.”

It is a major turn of events for Blackstone and its chief executive, Stephen A. Schwarzman, who took the firm public last year at the height of the buyout binge. On paper, Mr. Schwarzman has personally lost $3.9 billion as the price of Blackstone’s stock sank.

Even so, Mr. Schwarzman is still worth billions, more than rich enough to pledge $100 million to the New York Public Library, as he plans to do Tuesday.

In recent years private equity firms have bought thousands of companies, mostly with borrowed money.

Blackstone and others argue they can run these businesses more efficiently — and therefore more profitably — than they could as public companies. Now, the bankers and investors who financed the boom in corporate takeovers are running for the exits. Loans and junk bonds that deal makers used to pay for the acquisitions — debts that must be repaid by the companies, not the deal makers — are sinking in value.

The speed and ferocity of the industry’s reversal have taken even Wall Street by surprise. On Monday, Carlyle Capital, a highly leveraged fund linked to another buyout firm, the Washington-based Carlyle Group, confronted the prospect of insolvency. Carlyle’s troubles, along with rumors that Bear Stearns might be running short of cash, helped drive stocks lower. Bear Stearns denied the rumors.

But companies far from Wall Street are feeling the pain of the private equity crisis. In 2006, for example, Freescale Semiconductor, which makes computer chips, found itself the object of private equity’s affection and the subject of the biggest buyout battle of all time in the technology industry.

Two groups of private equity firms vied for the microchip manufacturer, a spinoff of Motorola that builds most of the computer chips for that company’s cellphones. Ultimately, the winning group, led by Blackstone, paid a staggering $17.6 billion, most of that with borrowed money.

That was then. Now Freescale is plagued by falling demand from Motorola and billions of dollars in debt related to its takeover. It replaced its chief executive nearly three weeks ago, and its junk bonds recently traded at levels that suggest the company might be unable to pay its debts. The company has said that while times are challenging, it can meet its debts.

“No one saw this kind of outcome,” Michael Holland, chairman of the New York investment firm Holland & Company, and a former Blackstone executive, said of the buyout industry’s troubles.

Freescale is far from alone, as the private equity industry reels from the shocks to the credit markets and the broader economy. Since last summer, financing for the multibillion dollars deals has withered, depriving buyout firms of the headlines and, more important, the returns to which they had grown accustomed.

Bonds and loans of newly private companies as diverse as the Realogy Corporation, a Minneapolis-based real estate company, and OSI Restaurant Partners, which owns the Outback Steakhouse chain, have plunged so far in value that bankers consider the debt distressed.

While these and many other companies are current on their debts, their bonds now trade at 70 or 80 cents on the dollar, suggesting investors are worried about these businesses’ financial health. Some bonds are selling at even lower prices, and a few companies have gone bankrupt.

As a financial firm, Blackstone is just one of many that have suffered over the past eight months. But unlike banks and mortgage lenders, Blackstone is the only major American buyout firm that is publicly traded. Its stumbles are more clearly tracked than any of its peers, as shown by a stock price that has dropped more than 50 percent since its debut.

On Monday, Blackstone reported soft results in its private equity and corporate real estate businesses, its two biggest divisions. Stripped of the cheap debt that girds its deal making, Blackstone said it will now focus on smaller transactions. Yet the firm has not struck any deal over $2 billion since last July, when it announced a $25 billion takeover of Hilton Hotels. Since then, it has failed to complete two buyouts, those of PHH, a mortgage lender, and Alliance Data Systems, a credit card processor.

Blackstone also took an accounting charge related to its investment in the Financial Guaranty Investment Corporation, a troubled bond insurance company.

But private equity firms’ problems now extend well beyond themselves. Banks, for example, are saddled with billions of dollars of buyout-related debt they cannot sell, serving as the next possible wave of write-downs after the subprime mortgage debacle. Citigroup, Goldman Sachs and Lehman Brothers are currently holding what some analysts estimate is $130 billion in leveraged loans, or those supporting private equity deals.

And the companies that private equity firms have acquired may be the next to suffer. Emboldened by the availability of cheap debt, private equity firms borrowed more and more as they paid higher prices to strike more deals. That has left many companies like Freescale to cope with more debt to pay off.

Surveying junk debt offerings since 2002, Mr. Fridson found that companies taken private tended to suffer more distress than their peers. According to his firm, FridsonVision, Blackstone had the fourth most-distressed companies of major private equity firms, with nearly 34.8 percent of its holdings falling into that category compared with the average of 27.7 percent.

Calling a bottom to the industry’s problems is a notoriously difficult task, even for sophisticated investors like Blackstone. Executives from the firm argue that these are times to buy things cheaply, be they stakes in companies or real estate properties.

Blackstone recently raised $1.4 billion from investors for a fund devoted to buying bonds and loans at fire sale prices. But in a conference call on Monday, Hamilton E. James, the firm’s president, said the fund is “100 percent dry powder” and so far has not been tapped for investments. “Our view is that things will get worse before they get better,” Mr. James said.

Carlyle Fund's Assets Seized

Leaders Fail to Stop Securities Sell-Off

March 13, 2007

by Thomas Heath

Washington Post

A publicly traded affiliate of the Carlyle Group said yesterday that lenders were seizing its assets, sending the fund, Carlyle Capital, into insolvency.

The collapse of Carlyle Capital is the first time a Carlyle Group fund has failed and is a stinging embarrassment for the District private-equity powerhouse, which has built an international reputation with a client list that reaches around the world.

The high-profile downfall, part of the broad turmoil in credit markets worldwide, followed a week of frantic negotiations between the Carlyle Group and a number of lenders. Carlyle Group's three founders as recently as Monday were considering injecting cash into the fund as a way to usher it through the credit crisis.

By yesterday the fund had defaulted on $16.6 billion of debt and said it expected to default soon on its remaining debt. The fund's $21.7 billion in assets were exclusively in AAA mortgage-backed securities issued by Fannie Mae and Freddie Mac, traditionally considered secure and conservative investments, which it was using as collateral against its loans.

In a statement, Carlyle Capital said that it had been unable to meet margin calls in excess of $400 million over the past week and that it expected its lenders to take control of its remaining assets. The lenders, headed by Deutsche Bank and J.P. Morgan Chase, began selling the securities last night, according to a report on the Wall Street Journal's Web site.

The problems at Carlyle Capital have preoccupied the top leaders at Carlyle Group. The firm's founders, David M. Rubenstein, William E. Conway Jr. and Daniel D'Aniello, had been in meetings with lenders in an effort to resolve Carlyle Capital's problems, not only to protect their own investment and that of employees who have put millions of dollars into the company, but also to preserve Carlyle's Midas-touch reputation.

Forbes magazine last year estimated Carlyle's three founders to each be worth about $2.5 billion.

Carlyle Capital is incorporated on Guernsey, an island in the English Channel, and is traded on Amsterdam's Euronext exchange.

The fund was set up in August 2006 with roughly $670 million in cash from Carlyle's owners and other investors, and about $300 million in additional capital raised from a public stock sale.

The capital allowed the fund to go to banks and borrow far more, leveraging its cash investment some 20 times into the portfolio.

Carlyle Capital's prospects were dimmed by the same doubts that have upended securities linked to riskier subprime mortgages, namely whether the underlying assets were losing value and whether the homeowners would continue to make their payments.

As the market value of the Fannie Mae and Freddie Mac securities has dropped, Carlyle Capital's lenders asked it to increase its cash equity from what was 1 percent to as much as 5 percent. An increase of that amount on $20 billion in loans amounts to several hundred million dollars.

The Carlyle Group last summer loaned Carlyle Capital $150 million to cover debt obligations.

Conway and Rubenstein were in New York much of this week, accompanied by a team of Carlyle Group insiders, including the company's chief financial officer, negotiating a "standstill" agreement with lenders as they tried to work out a financial solution.

The agreement would have stopped lenders from foreclosing on loans they made to Carlyle Capital.

Carlyle Capital stock closed at $2.80 in Amsterdam yesterday before the announcement, off 89 percent from its peak.

The Religion Side Show

Disinvited to a Screening, a Critic Ends Up in a Faith-Based Crossfire

March 10, 2008

by John Metcalfe

New York Times

Shortly before he was to attend a screening in January of the documentary “Expelled: No Intelligence Allowed,” which is about alternatives to the theory of evolution, Roger Moore, a film critic for The Orlando Sentinel, learned that his invitation had been revoked by the film’s marketers.

“Well, you already invited me,” he recalled thinking at the time. “I’m going to go.”

So Mr. Moore traveled to a local megachurch and planted himself among a large group of pastors to watch the movie. In it, Ben Stein, the actor and economist (and regular contributor to The New York Times) interviews scientists and teachers who say that Darwinism gets too much emphasis in the classroom and that proponents of the theory of intelligent design are treated unfairly.

There were nondisclosure agreements to sign that day, but Mr. Moore did not, and proceeded to write perhaps the harshest review “Expelled” has received thus far. The film will open April 18, but has been screened several times privately for religious audiences. Mr. Moore deplored what he perceived as “loaded images, loaded rhetoric, few if any facts” and accused Mr. Stein of using a “Holocaust denier’s” tactics.

Which, of course, was exactly the reaction the moviemakers were hoping to avoid by keeping mainstream critics out.

Mr. Stein said in a telephone interview that he had not read Mr. Moore’s review, but that “being compared with a Holocaust denier is nonsense,” adding, “This guy is extremely confused.” He said he decided to participate in the project because “there’s just a lot of people who don’t believe that big science and Darwinism should have a stranglehold on academic life, and they have been waiting for a voice.”

Paul Lauer, head of Motive Marketing, which is handling publicity for the film, said that critics were not invited mostly because the film was not polished enough for professional scrutiny. He said that his company, which also marketed the 2004 film, “The Passion of the Christ,” is reaching out to conservative leaders.

For example, Mr. Lauer said, Mr. Stein personally showed “Expelled” to James Dobson, founder of Focus on the Family, which has a big following among right-wing Christians. (Mr. Dobson gave the film a thumbs-up.)

The film, which takes a position on intelligent design shared by President Bush, has also been shown at California Baptist University and the Dallas Theological Seminary. Glowing reviews have popped up on AnswersInGenesis.org, whose co-chief executive, Ken Ham, founded the Creation Museum , and in The American Spectator, whose senior editor, Tom Bethell, said that the movie evoked “tears of joy.”

Mr. Lauer said the marketing strategy was “about finding and serving people with deep-seated motivations” and then hoping those people would talk up the movie to their friends. The general media will be invited to screenings in early April, he said.

Logan Craft, executive producer of “Expelled” and chief of Premise Media, said he thought Mr. Moore had been wrong to attend the screening after being disinvited, but both he and Mr. Lauer denied any involvement in an online “media alert” that purported to be from a backer of the film. The alert accused Mr. Moore of posing as a minister to gain admission, calling his actions a “security breach.” Mr. Moore said he never represented himself as other than a reporter.

After Mr. Moore’s review, Mr. Stein commented, “Oh well. This will probably happen a lot more times.”

Comment: Like cleaves unto like and it is very obvious that McCain is both injudicious in his choice of support and his persistence in seeking out members of the religious nut fringe. We have had more than enough of religious crazies, to include Pat Robertson and all of his fellow travelers. BH