TBR News August 10, 2014

Aug 10 2014

The Voice of the White House


             Washington, D.C., August 9, 2014: “The feud between the US and Russia, bases primarily on possession of oil and world importance, fluctuates back and forth on a daily basis. Furious that Putin has made him look like a fool, Obama puts sanctions on Russia and they retaliate in kind. Other countries, pressured by Washington to also sanction Russia, see now that their own domestic economic pictures are being injured, are distancing themselves from Obama but in a diplomatic way so as not to invite helicopter gunships to blast their day care centers. For this, of course, the United States would call upon Israel who is an expert in this field. And authentic pictures of the remains of the downed Malaysian passenger plane show very clearly that what brought it down were not “rebel rockets” but machinegun bullets from the two Ukrainian military jets known to have been tracking the plane. Also, note that this plane had been diverted to the war zone by Ukrainian aircraft control people. When this finally emerges, the Obama people will have an awkward time of it because of their close embrace of the corrupt Kiev government.”


Good neighborly relations are Russia’s priority in Arctic – security chief


August 8, 2014



             Russia aims to develop the Arctic as a region of peace and international cooperation, but will always defend its national interests said Security Council Secretary Nikolay Patrushev.

             He was speaking at the opening of the international conference on stable development and security issues in the Arctic region that took place this week in North Russia’s Naryan Mar. The Security Council is Russia’s top consultative body on strategic issues of national importance that provided support for the two-day conference.

President Vladimir Putin addressed the forum with a letter of greetings.

“While Russia is planning to defend firmly its geopolitical and economic interests in the Arctic zone, we also seek to strengthen the cooperation with other member countries of the Arctic Council and to turn the Arctic region into a zone of peace, stability and cooperation,” the message read.

Patrushev said in an interview with the RIA Novosti that the last meeting was attended by delegations from almost all Arctic nations and also representatives of observer states such as China, India, South Korea and Singapore.

He noted that the United States chose not to send its representatives to this year’s event and offered no explanations for the step.

However, Patrushev recalled that in bilateral consultations US officials confirmed their interest in cooperating with Russia in the Arctic.

One possible field of such cooperation could be the Arctic monitoring system presented by the RTI (Radio-technical and Information Systems) corporation during the conference.

RIA Novosti quoted one senior RTI manager as saying that the system allows to get a real time picture of the situation and automatically report about various emerging risks. These include emergency situations in the transport sector, natural and man-made accidents and also acts of terrorism targeting infrastructure sites.

The executive noted that the Russian system is, in fact, a full pledged geo-analytical platform that can also work beyond the borders of Russia’s zone in the Arctic and said that the services would be offered to all partner nations.

Russia has intensified the development of its Arctic Regions over the past few years, including works on the Northern Sea Route, which is gradually becoming an alternative to traditional transport corridors between Europe and Asia.

Larger economic participation has required a more intensive military presence and in April this year Putin announced that Russia was creating a new united fleet of new generation combat ships and submarines permanently deployed to the Arctic.

In late 2013, Russia began extracting oil on the Arctic shelf. The country claims about two-thirds of large oil and gas deposits in the Arctic shelf zone, but plans to claim more territory through the so-called Lomonosov Ridge. Russian authorities plan to lodge the documents with this claim to the United Nations as soon as next year.


Ukraine may block all transit from Russia in sanctions row – PM


August 8, 2014



Ukraine ready to impose sanctions against any transit via its territory, including air flights and gas supplies to Europe, Prime Minister Arseniy Yatsenyuk said Friday.

Ukraine’s parliament will vote on the final measure on Tuesday, and will take into consideration the country’s Security Service, Valeria Hontareva, president of Ukraine’s Central Bank, said.

Kiev has also prepared a list of 172 Russian citizens and 65 companies predominantly Russian to put under sanctions for “sponsoring terrorism, supporting the annexation of Crimea, and violating the territorial integrity of Ukraine,” Yatsenyuk said at a briefing on Friday.

Proposed sanctions include asset freezes, bans on certain enterprises, bans on privatizing state property, refusing to issue licenses, and a complete or partial ban on transit- both aviation and gas.

“We simply have no other choice,” the Prime Minister said, adding that Ukraine will use part of the planned $17 billion IMF aid to achieve energy independence, and may go to the World Bank for help. The country, which is on the brink of economic default, received the first $3.2 billion tranche in May.

Ukraine wants to “put a stop” to its gas dependence on Russia, its main source for energy to heat homes and buildings, but understands it will not be an “easy” process, Yatsenyuk told reporters.

The Prime Minister estimates Ukraine could stand to lose $7 billion as a result of imposing sectorial sanctions against Russia, its biggest trading partner after the European Union.

“There is no doubt that Russia will continue its course in Ukraine it began a decade ago- banning Ukrainian goods, decreasing cooperation, pressure, and blackmail,” Yatsenyuk said.

On Monday the Ukrainian government said it plans to mirror Western sanctions and target Russia’s financial, energy, and military sectors.

Ukraine imports nearly 50 percent of its natural gas from Russia, which in 2013 totaled 27.7 billion cubic meters of natural gas.

If approved, a halt to Russian gas transit would hit Europe as the continent gets 15 percent of the energy it needs from Russia. In June Gazprom, Russia’s national gas company announced it was stopping deliveries to Ukraine, but would continue to ship 180 billion cubic meters of gas to Europe.

The falling out with Russia’s gas major over pricing and debt has forced Ukraine to cut back on its heavy use of energy. Until the winter, homes will go without hot water to cut gas consumption by 30 percent . In 2013, Ukraine used 55 billion cubic meters, and as it stands, Kiev only has about 1.2 billion cubic meters of gas for heating, ITAR-ITASS reported.

On top of that, Ukraine is also exploring reverse flow options; importing gas from neighboring European countries.

In the event Ukraine cuts off gas transit through its territory, Hungary, Slovakia, and the Czech Republic will suffer, Transneft, Russia’s state-owned pipe operator said in a statement on Friday.

Gazprom already has a northern pipeline route that bypasses Ukraine delivering supplies to Germany and other big importers, and is constructing South Stream to run to Southern and Central European countries.


Europe’s fragile economy put to test as Ukraine, Iraq sour mood


August 10, 2014

by John O’Donnell



             FRANKFURT- Investors will gauge the strength of the euro zone’s fragile economy this week as escalating conflicts in Ukraine and Iraq darken the mood globally.

In stark contrast to the United States and Britain, which are growing strongly, economic output in the euro bloc is likely to have all but ground to a halt in the three months to June. Its star economy, Germany, is losing momentum and Italy is sliding back into recession.

“The United States and the United Kingdom are going to be among the fastest-growing economies both this year and next,” said James Knightley, an economist with ING. “In Europe, the situation seems to be going into reverse.”

The growing sanctions fight between Russia and the West over Moscow’s backing of rebels in Ukraine and U.S. air strikes to block Islamist militants in Iraq are also upsetting the markets.

On Thursday, the European Union announces economic output data for the 18 countries in the euro zone for the April-June quarter, and Germany will reveal its own gross domestic product for the same period.

By these yardsticks, neither Germany nor the wider euro zone are expected to see much, if any, improvement on the first three months of the year.

To compound matters, tit-for-tat sanctions between Moscow and the European Union and fears that Russia could even invade eastern Ukraine are already sapping business confidence and will eat into paltry economic growth later this year.

Not only does Moscow supply about a third of the European Union’s gas needs, trade ties in other areas between Russia and Europe run deep.

German energy giant E.ON, for instance, has invested 6 billion euros ($8 billion) since 2007 in Russia, while chemicals firm BASF has a joint venture with Gazprom.

“For a long time, the market has been ignoring the geopolitical risks,” said Gregor Eder, an economist with Allianz, one of the globe’s largest fund investors.

“The escalation in Ukraine and a spiral of sanctions could be a turning point for that. Exports to Russia were already falling even before Ukraine and could fall further. The Iraq crisis increases nervousness further.”





With Europe looking gloomy and the days of mega-growth in China over, the United States has offered some hope for the world economy.

Investors will seek to gauge the strength of the U.S. rebound by examining the latest figures for retail sales and producer prices there.

Many are looking for reassurance, as they are in Britain, that economic growth is trickling down to workers’ pay – important proof that the recovery will stick when central banks make it more expensive to borrow.

But the Bank of England is set to acknowledge surprisingly weak pay growth on Wednesday when it publishes economic projections, raising questions about Britain’s readiness for its first interest rate hike since the financial crisis.

Although unemployment is set to fall, earnings are also forecast to be lower than a year earlier. There is a similar gap in the United States between rising numbers of people in work and lagging pay.

“To have confidence in the recovery in the United States and United Kingdom, wages need to rise in line with credit,” said ING’s Knightley.

“The cost of living continues to exceed wage growth. People need to see that they have more cash at the end of the month so that they are not borrowing out of necessity.”

In China, industrial output readings will give investors a glimpse of the country’s performance in the third quarter of the year after government moves to boost lending to business, such as shrinking the amount of cash that banks must hold in reserve.

China’s economy gathered pace slightly to grow by 7.5 percent in the second quarter as the government stepped up construction of railways and public housing.

But a downturn in property prices, despite efforts to make it easier to buy, as well as high local government debts, are holding up the economy.

Analysts believe that deeper reforms, such as overhauling giant state companies, will be needed in the long term to keep the economy growing at the pace the authorities want.

In the meantime, the euro zone remains the globe’s problem child.

Last week, the European Central Bank signalled that it stood ready to print money and buy bonds if the euro zone deteriorated, a pledge to act that the Frankfurt-based bank has made many times in the past.

ECB President Mario Draghi underscored that he would not be discouraged from taking such action by the fact that the United States was plotting a different course.

His words alone, however, may not be sufficient to reassure investors unnerved at the prospect of the U.S. Federal Reserve drawing the purse strings ever tighter.

“There has been this fantastic monetary policy experiment where policy has never been looser,” said Paul Dales of Capital Economics, which advises companies and others.

“You have to get things back to normal. But no-one really knows how it’s going to play out because no-one has been through it before.”


(1 US dollar = 0.7470 euro)



(Additional reporting by Kevin Yao in Beijing, Martin Santa in Brussels, William Schomberg in London and Jason Lange in Washington; Editing by Hugh Lawson)




Antisemitism on rise across Europe ‘in worst times since the Nazis’

Experts say attacks go beyond Israel-Palestinian conflict as hate crimes strike fear into Jewish communities


August 7. 2014

by Jon Henley

The Guardian  


In the space of just one week last month, according to Crif, the umbrella group for France’s Jewish organisations, eight synagogues were attacked. One, in the Paris suburb of Sarcelles, was firebombed by a 400-strong mob. A kosher supermarket and pharmacy were smashed and looted; the crowd’s chants and banners included “Death to Jews” and “Slit Jews’ throats”. That same weekend, in the Barbes neighbourhood of the capital, stone-throwing protesters burned Israeli flags: “Israhell”, read one banner.

In Germany last month, molotov cocktails were lobbed into the Bergische synagogue in Wuppertal – previously destroyed on Kristallnacht – and a Berlin imam, Abu Bilal Ismail, called on Allah to “destroy the Zionist Jews … Count them and kill them, to the very last one.” Bottles were thrown through the window of an antisemitism campaigner in Frankfurt; an elderly Jewish man was beaten up at a pro-Israel rally in Hamburg; an Orthodox Jewish teenager punched in the face in Berlin. In several cities, chants at pro-Palestinian protests compared Israel’s actions to the Holocaust; other notable slogans included: “Jew, coward pig, come out and fight alone,” and “Hamas, Hamas, Jews to the gas.”

Across Europe, the conflict in Gaza is breathing new life into some very old, and very ugly, demons. This is not unusual; police and Jewish civil rights organisations have long observed a noticeable spike in antisemitic incidents each time the Israeli-Palestinian conflict flares. During the three weeks of Israel’s Operation Cast Lead in late 2008 and early 2009, France recorded 66 antisemitic incidents, including attacks on Jewish-owned restaurants and synagogues and a sharp increase in anti-Jewish graffiti.But according to academics and Jewish leaders, this time it is different. More than simply a reaction to the conflict, they say, the threats, hate speech and violent attacks feel like the expression of a much deeper and more widespread antisemitism, fuelled by a wide range of factors, that has been growing now for more than a decade.

“These are the worst times since the Nazi era,” Dieter Graumann, president of Germany’s Central Council of Jews, told the Guardian. “On the streets, you hear things like ‘the Jews should be gassed’, ‘the Jews should be burned’ – we haven’t had that in Germany for decades. Anyone saying those slogans isn’t criticising Israeli politics, it’s just pure hatred against Jews: nothing else. And it’s not just a German phenomenon. It’s an outbreak of hatred against Jews so intense that it’s very clear indeed.”

Roger Cukierman, president of France’s Crif, said French Jews were “anguished” about an anti-Jewish backlash that goes far beyond even strongly felt political and humanitarian opposition to the current fighting: “They are not screaming ‘Death to the Israelis’ on the streets of Paris,” Cukierman said last month. “They are screaming ‘Death to Jews’.” Crif’s vice-president Yonathan Arfi said he “utterly rejected” the view that the latest increase in antisemitic incidents was down to events in Gaza. “They have laid bare something far more profound,” he said.

Nor is it just Europe’s Jewish leaders who are alarmed. Germany’s chancellor, Angela Merkel, has called the recent incidents “an attack on freedom and tolerance and our democratic state”. The French prime minister, Manuel Valls, has spoken of “intolerable” and clearly antisemitic acts: “To attack a Jew because he is a Jew is to attack France. To attack a synagogue and a kosher grocery store is quite simply antisemitism and racism”.

France, whose 500,000-strong Jewish community is one of Europe’s largest, and Germany, where the post-war exhortation of “Never Again” is part of the fabric of modern society, are not alone. In Austria last month, a pre-season friendly between Maccabi Haifa and German Bundesliga team SC Paderborn had to be rescheduled after the Israeli side’s previous match was called off following an attempted assault on its players.

The Netherlands’ main antisemitism watchdog, Cidi, had more than 70 calls from alarmed Jewish citizens in one week last month; the average is normally three to five. An Amsterdam rabbi, Binjamin Jacobs, had his front door stoned, and two Jewish women were attacked – one beaten, the other the victim of arson – after they hung Israeli flags from their balconies. In Belgium, a woman was reportedly turned away from a shop with the words: “We don’t currently sell to Jews.”

In Italy, the Jewish owners of dozens of shops and other businesses in Rome arrived to find swastikas and anti-Jewish slogans daubed on shutters and windows. One slogan read: “Every Palestinian is like a comrade. Same enemy. Same barricade”; another: “Jews, your end is near.” Abd al-Barr al-Rawdhi, an imam from the north eastern town of San Donà di Piave, is to be deported after being video-recorded giving a sermon calling for the extermination of the Jews.

There has been no violence in Spain, but the country’s small Jewish population of 35,000-40,000 fears the situation is so tense that “if it continues for too long, bad things will happen,” the leader of Madrid’s Jewish community, David Hatchwell, said. The community is planning action against El Mundo after the daily paper published a column by 83-year-old playwright Antonio Gala questioning Jews’ ability to live peacefully with others: “It’s not strange they have been so frequently expelled.”

Studies suggest antisemitism may indeed be mounting. A 2012 survey by the EU’s by the Fundamental Rights agency of some 6,000 Jews in eight European countries – between them, home to 90% of Europe’s Jewish population – found 66% of respondents felt antisemitism in Europe was on the rise; 76% said antisemitism had increased in their country over the past five years. In the 12 months after the survey, nearly half said they worried about being verbally insulted or attacked in public because they were Jewish.

Jewish organisations that record antisemitic incidents say the trend is inexorable: France’s Society for the Protection of the Jewish Community says annual totals of antisemitic acts in the 2000s are seven times higher than in the 1990s. French Jews are leaving for Israel in greater numbers, too, for reasons they say include antisemitism and the electoral success of the hard-right Front National. The Jewish Agency for Israel said 3,288 French Jews left for Israel in 2013, a 72% rise on the previous year. Between January and May this year, 2,254 left, against 580 in the same period last year.

In a study completed in February, America’s Anti-Defamation League surveyed 332,000 Europeans using an index of 11 questions designed to reveal strength of anti-Jewish stereotypes. It found that 24% of Europeans – 37% in France, 27% in Germany, 20% in Italy – harboured some kind of anti-Jewish attitude.

So what is driving the phenomenon? Valls, the French prime minister, has acknowledged a “new”, “normalised” antisemitism that he says blends “the Palestinian cause, jihadism, the devastation of Israel, and hatred of France and its values”.

Mark Gardner of the Community Security Trust, a London-based charity that monitors antisemitism both in Britain and on the continent, also identifies a range of factors. Successive conflicts in the Middle East he said, have served up “a crush of trigger events” that has prevented tempers from cooling: the second intifada in 2000, the Israel-Lebanon war of 2006, and the three Israel–Hamas conflicts in 2009, 2012 and 2014 have “left no time for the situation to return to normal.” In such a climate, he added, three brutal antisemitic murders in the past eight years – two in France, one in Belgium, and none coinciding with Israeli military action – have served “not to shock, but to encourage the antisemites”, leaving them “seeking more blood and intimidation, not less”.

In 2006, 23-year old Ilan Halimi was kidnapped, tortured and left for dead in Paris by a group calling itself the Barbarians Gang, who subsequently admitted targeting him “because he was a Jew, so his family would have money”. Two years ago, in May 2012, Toulouse gunman Mohamed Merah shot dead seven people, including three children and a young rabbi outside their Jewish school. And in May this year Mehdi Nemmouche, a Frenchman of Algerian descent thought to have recently returned to France after a year in Syria fighting with radical Islamists, was charged with shooting four people at the Jewish museum in Brussels.

If the French establishment has harboured a deep vein of anti-Jewish sentiment since long before the Dreyfus affair, the influence of radical Islam, many Jewish community leaders say, is plainly a significant contributing factor in the country’s present-day antisemitism. But so too, said Gardner, is a straightforward alienation that many young Muslims feel from society. “Often it’s more to do with that than with Israel. Many would as soon burn down a police station as a synagogue. Jews are simply identified as part of the establishment.”

While he stressed it would be wrong to lay all the blame at the feet of Muslims, Peter Ulrich, a research fellow at the centre for antisemitism research (ZfA) at Berlin’s Technical University, agreed that some of the “antisemitic elements” Germany has seen at recent protests could be “a kind of rebellion of people who are themselves excluded on the basis of racist structures.”

Arfi said that in France antisemitism had become “a portmanteau for a lot of angry people: radical Muslims, alienated youths from immigrant families, the far right, the far left”. But he also blamed “a process of normalisation, whereby antisemitism is being made somehow acceptable”. One culprit, Arfi said, is the controversial comedian Dieudonné: “He has legitimised it. He’s made acceptable what was unacceptable.”

A similar normalisation may be under way in Germany, according to a 2013 study by the Technical University of Berlin. In 14,000 hate-mail letters, emails and faxes sent over 10 years to the Israeli embassy in Berlin and the Central Council of Jews in Germany, Professor Monika Schwarz-Friesel found that 60% were written by educated, middle-class Germans, including professors, lawyers, priests and university and secondary school students. Most, too, were unafraid to give their names and addresses – something she felt few Germans would have done 20 or 30 years ago.

Almost every observer pointed to the unparalleled power of unfiltered social media to inflame and to mobilise. A stream of shocking images and Twitter hashtags, including #HitlerWasRight, amount, Arfi said, almost to indoctrination. “The logical conclusion, in fact, is radicalisation: on social media people self-select what they see, and what they see can be pure, unchecked propaganda. They may never be confronted with opinions that are not their own.”


Additional reporting by Josie Le Blond in Berlin​, Kim Willsher in Paris, John Hooper in Rome and Ashifa Kassam in Madrid


• This article was amended on Friday 8 August to correct the name of the Madrid Jewish community leader David Hatchwell. This article was further amended to correct the numbers of Jews who left France for Israel in 2013.



Euromaidan Activists Protesting Kiev’s Operation in Eastern Ukraine


August 8, 2014

RIA Novosti


KIEV– The activists still occupying Kiev’s Independence Square are protesting the new Kiev authorities and the government’s military operation in eastern Ukraine, a Euromaidan representative said Friday.

“Why are factories and plants being closed? Why is the war underway? Nothing has changed under the new government; there is still no work and corruption is flourishing,” the representative said.

In general, the protests on Independence Square are peaceful. However, on Thursday, Kiev attempted to dismantle barricades on the square, triggering clashes between the activists and police. Euromaidan defenders were seen throwing projectiles at law enforcement officers and firemen in a bid to force them out of the square and setting tires ablaze in several places. At least four police officers were injured in the clashes.

Dozens of protestors are currently rebuilding the barricades that Kiev attempted to destroy.

Protesters occupied Maidan Nezalezhnosti, or Independence Square, on November 21, 2013, after Ukraine’s Cabinet of Ministers announced an about-turn on the signing of a European Union association agreement.

The so-called Euromaidan protests then spread across the country, resulting in violent armed clashes between radicals and the police, leading to about 100 deaths. Even after Ukraine underwent a regime change in February, a number of protesters refused to leave the square.

In mid-April, Kiev launched a military crackdown on independence supporters in eastern Ukraine. The conflict has claimed the lives of at least 1,367 people, according to the United Nations.


Ukraine activists lament ‘betrayal’ of Kiev’s Maidan as war rages in the east


Fate of centre of months of bloody protests is hotly debated topic in country as Ukrainian forces tighten grip on rebel-held Donetsk


August 7, 2014




Thick smoke from burning tyres once again billowed into the blue sky over Kiev’s Independence Square on Thursday as a group of demonstrators still living in the protest camp scuffled with authorities trying to clear the area.

Dozens of demonstrators threw stones and started fires as they halted a short-lived push by municipal workers backed by interior ministry troops to dismantle barricades around the entrance to the central square with bulldozers.

The fate of the symbolic site, the centre of months of bloody protests that led to the toppling in February of President Viktor Yanukovych, is a hotly debated topic in the country.

“They came from two sides and tried to clear away the tents and everything,” said protester Andriy, clutching an iron bar. “They want us gone, but we are not ready to leave yet.”

In the eastern Ukrainian city of Donetsk at least four people were killed as government forces continued to tighten their grip on the pro-Russia rebel stronghold.

A mortar hit a large hospital in the city on Thursday, killing at least one person, after overnight shelling claimed the lives of three others.

“There was a sudden explosion, a mortar round flew through the window and all the equipment was destroyed,” said Anna Kravtsova, a doctor at the Vishnevskiy hospital. “They killed one person, and one person was injured and taken away.”

Only the dentistry unit suffered damage, witnesses said, but it is one of Donetsk’s larger hospitals, only 4km from the city’s main square, and has treated civilian victims of the conflict.

Kravtsova said the person killed was a patient at the hospital.

The incident follows a night of shelling in another central neighbourhood. The city council said in a statement on its website that three people had been killed and five wounded, and several residential buildings destroyed.

More than 1,100 civilians have died since the Ukrainian army began its “anti-terrorist” operation in the east, according to the UN.

As the rebels struggle to push back Kiev’s forces, fears of Russian intervention have grown. Western leaders have accused Russia of massing troops on the boarder with Ukraine, but Moscow denies doing so.

Since Yanukovych’s fall, the encampment in the centre of Kiev, known as Maidan, has dwindled to a fraction of its original size as many activists have either headed back to work or signed up to join government forces battling the rebels in the east.

Cafes and even a basketball court have gone up on the square as souvenir stalls selling fridge magnets with rude messages about the Russian president, Vladimir Putin, have sprung up and life has crept back to normal.

There have been rumours, however, denied as slander by those still there, of rising alcoholism and petty thuggery.

“This Maidan is not the same one as it was in February. Only the people without any hope are left here now,” said pensioner Sergey, standing among the debris of a dismantled tent.

“The local authorities need to agree with the leaders to move it somewhere, but it can’t be done like this. We have war in the east already and we don’t need war in Kiev too.”

Kiev’s new mayor Vitali Klitschko, a former world boxing champion who was one of the most prominent leaders of the protest movement, lashed out at those still occupying the square, saying authorities had tried to negotiate with them.

“The majority of people in Kiev want order and security in the city centre, but what has been happening here recently is just criminality,” Klitschko said in a statement on Thursday.

“The main demands of Maidan have been met,” he said. “Today we need to work and not bring shame on the idea of Maidan and the country.”

For many, however, the square is still a potent symbol of people power and lies near sacred ground where about 100 demonstrators were gunned down. They accuse Ukraine’s newly elected leadership of inventing excuses to shut it down.

“First we need to drag all the officials who killed people here and stole our money on to the square to judge them. Then we can think about moving on,” said Mykola. “What was started has not been finished and the authorities are scared.”

Nearby, small crowds of local residents gathered to argue with each other, with voices rising and fingers being jabbed into chests.

“This is a betrayal of Maidan and the revolution,” yelled a woman who gave her name as Lidia. “I’ve heard Russia is behind it and they’re trying to bring Yanukovych back,” she said.



Iraq: US Launches Air Strikes on Islamic State Militants Killing ‘Hundreds’


August 8, 2014

by Jack Moore , Gianluca Mezzofiore



The US military has launched air strikes against militants of the Islamic State in northern Iraq, according to the Pentagon.

Pentagon Press Secretary Rear Admiral John Kirby tweeted: “US military aircraft conduct strike on Isil [Islamic State] artillery. Artillery was used against Kurdish forces defending Erbil, near US personnel.”

Two F-18 fighters dropped laser-guided 500-pound bombs on the mobile artillery target. Militants of the Islamic State were using artillery that has been abandoned by the Iraqi army when it fled to shell Kurdish forces defending the regional capital of Kurdistan.

Kirby said that the decision to strike “was made by the US Central Command commander under authorisation granted him by the commander in chief”. The strikes took place at 6.45am EDT (10.45 GMT).

Khalid Jamal Alber, an official for the semi-autonomous Kurdish government in northern Iraq, said: “We thank Barack Obama”. Iraqi army chief of staff Lieutenant General Babaker Zebari said he predicted “huge changes on the ground in the coming hours”.

Rudaw, the leading news source on Kurdish affairs, said that US fighter jets had struck positions in the districts of Gwer and Makhmur in coordination with Kurdish peshmerga fighters.

According to the news outlet, the strikes killed hundreds of Islamic State fighters and wounded more. However, this could not be independently verified.It is the first time the US has been directly involved in a military operation in Iraq since they left the country in late 2011.

US President Barack Obama yesterday authorised airstrikes against the Islamic militants to prevent “a potential act of genocide” of religious minorities and to protect US interests in the region. Approximately 150 US advisers are situated in the Kurdish capital of Erbil.

“To stop the advance on Erbil, I’ve directed our military to take targeted strikes against Isis [IS] terrorist convoys should they move toward the city,” he said in a speech at the White House.

“The only lasting solution is reconciliation among Iraqi communities and stronger Iraqi security forces.”

The UN announced that it was working on a humanitarian corridor in northern Iraq to allow displaced people to flee the country.

The group have grand ambitions of extending their caliphate across the Middle East and forcing their radical ideology onto those of other faiths. Those who do not convert to their form of radical Islam have been summarily executed, imprisoned and chased out of their homes.

Nearly 100,000 Christians have been forced out of Qaraqosh – Iraq’s biggest Christian town – by the group while the Yazidi Kurds face a humanitarian crisis after 200,000 fleed the town of Sinjar, 50,000 into the barren Sinjar mountains at risk of starvation and dehydration.

In June, IS captured large swathes of northern Iraq such as the cities of Mosul and Tikrit and now have their sights set on Erbil, the capital of the autonomous Kurdistan region.

Unicef’s representative in Iraq Marzio Babille said the Yazidis were in a very dangerous situation because of the “very aggressive and brutal” jihadists.



Secrecy News:Identity Intelligence and Special Operations


July.30, 2014 in Intelligence, Military Doctrine

by Steven Aftergood


“Identity intelligence” is a relatively new intelligence construct that refers to the analysis and use of personal information, including biometric and forensic data among others, to identify intelligence targets of interest and to deny them anonymity.

The term began to appear a few years ago and was included, for example, in a 2012 Defense Intelligence Agency briefing package. Since then it has quickly propagated throughout U.S. military and intelligence operations.

Identity intelligence (or I2) was included for the first time in published U.S. military doctrine in the October 2013 edition of Joint Publication (JP) 2-0 on Joint Intelligence, which elaborated on the concept. Identity intelligence is used, JP 2-0 said, “to discover the existence of unknown potential threat actors by connecting individuals to other persons, places, events, or materials, analyzing patterns of life, and characterizing their level of potential threats to US interests.”

(“Identity intelligence” also appeared in an undated Top Secret document that was disclosed by Edward Snowden and published in excerpted form by the New York Times on May 31, 2014.)

Most recently, an updated U.S. Department of Defense publication on special operations noted this month that “Identity intelligence products enable real-time decisions in special operations worldwide.”

The new DoD doctrine on Special Operations — Joint Publication 3-05, dated 16 July 2014 — includes further discussion of identity intelligence (I2) in the special operations context:

“I2 is the collection, analysis, exploitation, and management of identity attributes and associated technologies and processes. The identification process utilizes biometrics-enabled intelligence (BEI), forensics-enabled intelligence (FEI), information obtained through document and media exploitation (DOMEX), and combat information and intelligence to identify a person or members of a group.”

“I2 fuses identity attributes (biological, biographical, behavioral, and reputational information related to individuals) and other information and intelligence associated with those attributes collected across all intelligence disciplines….”

“USSOCOM [US Special Operations Command] exploits biometric, forensic, document and media data collections and integrates the data with all-source intelligence to locate and track unattributed identities across multiple or disparate instances. Intelligence collections are processed through the appropriate DOD and interagency databases, exploited to produce intelligence, and then disseminated to deployed SOF and throughout the interagency. I2 products enable real-time decisions in special operations worldwide.”



*    *    *


Identity intelligence aside, the new Joint Publication 3-05 provides an informative account of the role of special operations, along with some notable changes from previous special operations doctrine.

“Special operations require unique modes of employment, tactics, techniques, procedures, and equipment. They are often conducted in hostile, denied, or politically and/or diplomatically sensitive environments, and are characterized by one or more of the following: time-sensitivity, clandestine or covert nature, low visibility, work with or through indigenous forces, greater requirements for regional orientation and cultural expertise, and a higher degree of risk,” JP 3-05 says.

The previous edition of this publication (dated 2011) had identified 11 core activities for special operations: direct action, special reconnaissance, counterproliferation of weapons of mass destruction, counterterrorism, unconventional warfare, foreign internal defense, security force assistance, counterinsurgency, information operations (IO), military information support operations (MISO), and civil affairs operations.

The new edition adds a 12th mission that up to now had not been considered a core activity: hostage rescue and recovery.

“Hostage rescue and recovery operations are sensitive crisis response missions in response to terrorist threats and incidents. Offensive operations in support of hostage rescue and recovery can include the recapture of US facilities, installations, and sensitive material overseas,” the new JP 3-05 states.


A New Wave of Wacko Evangelicals Swept GOP Primaries—and Could Win Several Seats in Washington


July 25, 2014

by CJ Werleman 



Mega churches fuel a dangerous new wave of political activism.


   A Southern Baptist Pastor claiming dangerous and crazy things like the notion that there is a homosexual plot to sodomize children, and that the First Amendment doesn’t apply to Muslims is so common that it barely registers as newsworthy these days. What should be catching the attention of even the most jaded news editors, however, is that a Southern Baptist Pastor who actually said exactly these aforementioned things has just won his GOP primary race for a seat in the U.S. Congress. Say hello to Tea Party Republican Jody Hice.

In the coming 2014 election, Hice will be the official Republican nominee to replace outgoing Georgia Congressman Paul Broun. Hice believes gay people have a secret plot to seduce and sodomize America’s sons, thinks same-sex marriage is akin to bestiality and incest, and compares abortion to the genocide waged by Hitler. Broun (R-GA) has endorsed Hice, which is unsurprising given it was Broun who once claimed, “Evolution and embryology and the big Bang theory are all lies straight from the pit of Hell.”

Pastor Hice has a long history of delivering hateful and homophobic laden sermons from the pulpit. He has struck out at those who oppose harmful “gay conversion therapy,” and by banning it “we are enslaving and entrapping potentially hundreds of thousands of individuals in a lifestyle that in reality they are not.”

If Pastor Hice were an anomaly, this would be the start and end of this story. Unfortunately for those who cherish America’s secular traditions, he’s not. Alarmingly, he is one face in a sea of evangelical Christian faces swept to primary electoral victories this year on the back of religious conservative activism, and by that I mean political activism drummed up by the success and growth of America’s mega-churches.

While polls show a decline in America’s religiosity, and with millennials shunning the religious enthusiasm of their parents, the mega-church movement is neither dying nor slowing. A 2013 report shows that churches with weekly attendances of 2,000 or more grew in 46 states.

“With each passing year, mega-churches are more in both number and size and the ones at the top of the list are larger than the ones at the top of the list in previous years,” Warren Bird, director of research and intellectual capital development for Leadership Network, told The Christian Post.

According to Bird, there are currently 1,650 established mega-churches in the country, many of which draw a sizeable percentage of young adults. And now these asylums for the easily led are being led to the altar of radical theocratic, political ideals – and its sponsor – the Republican Party.

In a number of GOP primary races, candidates with close ties to a mega-church have upset their more fancied establishment opponents. Including Pastor Hice, four candidates with mega-church backing have won decisive primaries.

“People generally like their pastor, and in politics it’s always good to be liked by voters,” said National Republican Congressional Committee Chairman Greg Walden of Oregon.

Another mega-church supported candidate to triumph is Oklahoma Representative James Lankford, who recently won a primary in the special election to succeed retiring U.S. Senator Tom Coburn.

Lankford is a graduate of the Southwestern Baptist Theological Seminary, who believes life begins at the moment of fertilization. From 1996 to 2009, Lankford was the student ministries and evangelism specialist for the Baptist General Convention of Oklahoma, and was the program director for the largest Christian camp in the U.S. Indeed, Jesus camp comes to Washington.

The Republican National Committee said it was Lankford’s visibility among evangelicals that helped him defeat his much-favored opponent. Notably, should Lankford win in November, he will become the only full-time religious leader in the U.S. Senate.

In North Carolina’s 6th District, Baptist Mark Walker defeated the highly regarded son of one that state’s most powerful politicians by more than 6,000 votes in a GOP runoff. The RNC said it was Walker’s leadership role at Lawndale Baptist Church, which has a membership of several thousand that proved decisive.

Walker is considered such a religious extremist that even his Tea Party colleague and primary opponent called him an extremist, which is like al-Qaeda calling ISIS radical. Walker’s Democrat Party rival warns, “Walker’s extremism has blinded him from the issues that matter…Mark Walker will be a voice only for the most extreme segment of our society.”

In Alabama, the 4,000-member congregation of Briarwood Presbyterian Church propelled Gary Palmer to victory in a GOP runoff in Alabama’s 6th District, to replace retiring Rep. Spencer Bachus. After securing the nomination, Palmer thanked those who helped his campaign become a success.

“This entire campaign was built on prayer, sustained by prayer and tonight was delivered by prayer,” he said.

All of the above is more of what we have seen in this country for the past three decades: Christian dogmatism used to hail and marshal the mystical inerrancy of the free market and the benevolence of unregulated capitalism. The evangelicals of these mega-churches have been used as reliable ballot box lever pullers for our corporate overlords since the election of Ronald Reagan.

If these hapless radicals in prayer have tuned in at any stage since 1980, they’ll realize they’re unlikely to receive what they hope for in return for their vote.

In his political tome What’s the Matter With Kansas, Thomas Frank writes that the trick by the rich to dupe the predominantly working and middle class Christian right into voting for their political party never wears off.

“Vote to stop abortion; receive a rollback in capital gains taxes. Vote to make our country strong again; receive deindustrialization. Vote to screw those politically correct college professors; receive electricity deregulation. Vote to get government off our backs; receive conglomeration and monopoly everywhere from media to meatpacking. Vote stand tall against terrorism; receive Social Security privatization. Vote to strike a blow against elitism; receive a social order in which wealth is more concentrated than ever before in our lifetimes, in which workers have been stripped of power and CEOs are rewarded in a manner beyond imagining.”

For the Republican Party, the growth of the nation’s mega-churches, allows them an opportunity to perform the same trick to a new audience.


CJ Werleman is the author of “Crucifying America.”


Israel’s Iron Dome is more like an iron sieve


July 25, 2014

by David Axe



Israel’s vaunted Iron Dome defense system is more like an iron sieve. It fails to destroy all but a few of the rockets that Hamas and other Palestinian militant groups fire at Israeli communities. But Israel’s early-warning civil-defense systems have proved highly effective.

The radar-guided Iron Dome missile, meant to intercept and smash incoming rockets in the seconds before they strike their targets, works just a small fraction of the time, according to a detailed analysis carried out by scientists at the Massachusetts Institute of Technology. The study was funded by the John D. and Catherine T. MacArthur Foundation and Ploughshares Fund.

Ted Postol, a physicist at the university and an expert in missiles and missile defenses, has found evidence that only about 5 percent of Iron Dome engagements result in the targeted rocket being destroyed or even sufficiently damaged to disable its explosive warhead. In the other 95 percent of cases, the interceptor either misses entirely or just lightly damages the enemy munition, allowing the rocket’s intact warhead to continue arcing toward the ground.

Postol based his conclusion on a careful analysis of amateur videos and photos of Iron Dome interceptions over the past three years. He admitted that most of his data is from a previous round of fighting in 2012. “The data we have collected so far [for 2014], however, indicate the performance of Iron Dome has not markedly improved,” Postol wrote on the website of the nonprofit Bulletin of the Atomic Scientists.

Richard Lloyd, another weapons expert, has also run studies that call into question Iron Dome’s high success rate. Other military analysts support his findings, though the Israeli government dismisses them, as it does the Postol study. An Israeli spokesman told the BBC, “The system saves lives.”

It should go without saying that guiding a missile to strike a particular spot on another missile is a very, very difficult achievement. The U.S. Missile Defense Agency likens rocket-on-rocket interceptions to “hitting a bullet with a bullet.”

The Israeli military, having spent billions of dollars on the system, appears to be exaggerating Iron Dome’s success rate. “Since the beginning of the operation, more than 1,260 rockets were launched from the Gaza Strip towards Israel,” the Israeli Defense Forces said on July 16, nine days into the latest spasm of violence pitting the Jewish state against Palestinian militias.

“Approximately 985 rockets hit Israeli territory and 225 rockets were intercepted by the Iron Dome missile-defense system,” the IDF stated, “with an overall success rate of 86 percent.”

Postol rejected that assessment. “The Israeli government is not telling the truth about Iron Dome,” the physicist asserted. Postol said if Iron Dome has such a high success rate, the Israeli government should release all the data it has.

When it comes to analyzing the effectiveness of missile defenses, Philip Coyle, who ran weapons testing at the Pentagon under the Clinton administration, told MIT’s Technology Review, Postol’s is “the best work that anybody has done outside the bowels of the Pentagon.”

Israel deployed the first Iron Dome missile battery in 2011. Each battery consists of a command post, a radar array and several launchers, each with 20 missiles. The United States has contributed more than $1 billion to Iron Dome’s development in exchange for access to the technology.

There is a lot of money – and credibility — invested in the system’s success.

Israel has so far purchased nine Iron Dome batteries from the manufacturer Rafael — and plans on buying several more. Each Iron Dome missile reportedly costs somewhere between $40,000 and $100,000, compared to less than a $1,000 apiece for the militants’ Qassam rockets

The Israeli government has said the key point is not the cost but preventing Israeli deaths.  “When we work, we do it to save lives,” Major Shay Kobninsky, a military Iron Dome commander, said in an official release.

“Every rocket intercepted would have hit populated areas,” the IDF added on its official blog. But Postol insisted that Iron Dome has not saved any lives. The fact that the Palestinian rockets kill so few Israelis — just two civilians have died in the recent attacks — is due to what Postol calls “civil-defense efforts.”

“Israel’s low casualty rate from Hamas rockets,” Postol wrote, “is largely attributable to the country’s well-developed early-warning and quick-sheltering system for citizens under imminent rocket attack.” Military radars and infrared sensors detect rocket launches the instant they happen. Air-raid sirens alert civilians to head for underground bunkers.

Iron Dome, Postol added, “appears to have had no measurable effect on improving the chances of Israelis escaping injury or death from Hamas artillery rocket attacks in Israel.”

By the time a rocket enters Iron Dome’s 40-mile engagement zone, it’s already arcing downward toward its target. One way or another, a part, or in some cases all, of the rocket is going to strike the ground. Iron Dome must strike an incoming rocket head-on to wreck its warhead and minimize the rocket’s destructive potential.

“If the Iron Dome interceptor instead hits the back end of the target rocket, it will merely damage the expended rocket-motor tube, basically an empty pipe, and have essentially no effect on the outcome of the engagement,” Postol asserted. “The pieces of the rocket will still fall in the defended area; the warhead will almost certainly go on to the ground and explode.”

Israel is not alone in pouring vast sums of money into ambitious missile-defense systems. The United States spends around $10 billion annually on a wide range of rocket interceptors that, like Iron Dome, have performed poorly in tests and combat.

Both countries want to be able to shoot down anything their enemies fire at them. But if Iron Dome is any indication, the technology just isn’t ready.



Special Report: How scams and shakedowns brought Ukraine to its knees


August 7, 2014

by Steve Stecklow, Elizabeth Piper and Oleksandr Akymenko



KIEV  – Late last year, Ukraine’s consumer protection agency began filing lawsuits against Foxtrot, the country’s largest electronics retailer. By early March, Foxtrot faced at least 231 separate suits that demanded fines totaling more than $150 million.

Many of the suits accused the company of minor violations of Ukraine’s labeling law – such as not placing a “quality seal” on tiny memory cards and wafer-thin batteries inside mobile phones. Foxtrot said it placed the seals on the external packaging, which the law also allows.

Viacheslav Povroznick, Foxtrot’s CEO, said agency officials proposed a deal – pay $1 million in cash and the lawsuits would disappear. “We said no,” he said. “It was like a kind of extortion.” Today, the company still faces a mountain of litigation.

Six months after a popular uprising toppled President Viktor Yanukovich, Ukraine’s new leaders are fighting wars on two fronts. One struggle is against Russian-backed insurgents in the east. The other is against staggering corruption that top officials say infected every level of government – and continues to this day.

“It is hard to name an agency that was not involved in any of the scams,” said Vitaliy Kasko, a deputy prosecutor general who is trying to recover billions of dollars in assets allegedly stolen and stashed overseas. Prosecutors say they believe that Yanukovich and a circle of associates stole vast sums of government money and profited from illicit schemes. Last week, the prosecutor’s office detained a deputy head of the central bank on suspicion of involvement in the theft of more than $170 million in state funds.

Corruption has plagued Ukraine since the country gained independence from the Soviet Union in 1991. But under Yanukovich, it grew far worse. The sheer scale of the graft – involving tax evasion, fraudulent value-added tax claims, bribery and extortion – helped set off the chain of events that has embroiled Ukraine in a separatist war.

A Reuters examination of the rampant tax and extortion rackets finds that the toll on the Ukrainian treasury was so great that the state was mortally weakened, leaving it at the mercy of outside powers. Top government officials told Reuters that by the time Yanukovich fled to Russia in February after four years in power, Ukraine was bankrupt. That is why the country sought and took a $17 billion bailout this year from the International Monetary Fund.

Igor Bilous, a former investment banker who now heads Ukraine’s tax agency, said in an interview that the government lost between $6 billion and $9 billion last year through just one scheme – a complex “tax minimization” racket that had the tax office’s blessing.

Where did the money go? “In pockets, obviously,” Bilous said. “I don’t think much can be recovered. A lot was taken out of the country … in dollars and gold.”

The looting ultimately backfired on Yanukovich, helping to set in motion his downfall.




Last year, desperately needing billions of dollars in assistance to replenish the treasury, his government first looked to the European Union for help.

Yanukovich initially supported an association agreement with the EU that would have opened a path to European aid and closer ties to the West. Instead, the pro-Russian politician decided to abandon the agreement and sign a treaty with Moscow to provide monetary aid. That about-face sparked the popular revolt led by pro-Western protesters who occupied the capital’s Independence Square, known locally as the Maidan, culminating in deadly clashes that ultimately led Yanukovich to flee to Russia.

The reverberations are still being felt: Russian President Vladimir Putin annexed Ukraine’s Crimean peninsula, and pro-Russian separatists are fighting to hold territory they’ve seized in eastern Ukraine. On Wednesday, NATO warned that Moscow had massed 20,000 troops on the border and could be poised to send them across.

Yanukovich did not pioneer Ukrainian graft. Prior presidents, too, have been accused of corruption. Instead, according to business executives, government officials and independent watchdog groups, his administration and associates took control of, systematized and expanded various schemes that had existed on a smaller scale for years.

“The current situation with corruption is rooted in Soviet times,” said Andrei Marusov, chairman of the board of Transparency International Ukraine, an anti-corruption organization. “What happened under Yanukovich was the centralization of corruption.… Everything went through this centralized hierarchy of state governance, by steps, by layers, from town, to municipality, then regional, then the ministry and then up to the president.”

Yanukovich – who entered office vowing to fight corruption – could not be reached for comment.

Oleksandr Klymenko, who was head of the tax authority under Yanukovich, said in a statement to Reuters: “It is shameful and just plain wrong that some of my country’s new crowd of bureaucrats are so desperate to distract the public from the alarming economic conditions which they should be working hard to solve (as I did my best to do), that they duplicitously try to explain their own failures by casting blame on my popular successes by fabricating groundless charges.”

Tomas Fiala, president of the 900-member European Business Association, said many companies were targeted by corrupt officials and had little choice but to participate in tax avoidance and other illicit schemes just to conduct ordinary business. “Definitely more than half of the companies working in Ukraine overall were forced to pay bribes,” he said.

About 100 of the EBA’s members currently face criminal cases against executives alleging tax evasion, according to its executive director, Anna Derevyanko.





For French food group Danone SA, troubles began with Ukraine’s tax authorities in 2011, the year after Yanukovich took office. Dario Marchetti, Danone Dairy Ukraine’s general manager at the time, said the subsidiary had agreed to pay a local tax on royalties it was paying the parent company to license its dairy products.

But after paying the tax to the tax office, Danone Ukraine was audited by Ukraine’s customs office. According to Marchetti, customs authorities determined the tax was owed to customs, not the tax office, and the company was required to pay the tax again – plus a penalty for non-compliance. The amount demanded by customs came to about $725,000, he said. Worse, the tax office refused to refund Danone’s previous payment of more than $500,000.

“I personally went to the guys investigating us, and they said, ‘Look, we have a target, and you have two options. You can pay us either 20 or 30 percent of what is owed, or we will go after you.’”

Marchetti said Danone rejected the demand – which it considered a bribe. He said Ukrainian authorities then filed a criminal complaint against Danone Ukraine’s chief accountant, a single mother with two children, accusing her of participating in tax evasion. “They use that as blackmail,” he said.

“In the end, we ended up paying customs, we ended up paying twice just to save our employee,” said Marchetti, who is now general manager at Danone Dairy Brazil. “For a business that went through the 2009 crisis and had low margins, this was a huge hit.”

Mikhailo Noniak, deputy minister for revenue and duties at Ukraine’s tax agency, said of Danone’s past problems: “This doesn’t happen now, but it happened very often before. Tax police, tax inspectors would start checks, investigations, they would go after firms like Danone, they would try to find something, and say something they had done did not correspond to the law.

“To be honest,” Noniak said, “at most firms they could find something that did not meet the legal requirements, and they would do the checks and they would either demand a fine, or open a criminal case, and then they would say, ‘We will not launch a case if you pay.’”

Businesses such as electronics retailer Foxtrot say Ukraine’s consumer protection agency employed similar tactics.

Nestle SA’s local subsidiary, Nestle Ukraine LLC, had a run-in about three years ago with the consumer protection agency. Gennadiy Radchenko, local head of corporate communication and corporate affairs for the Swiss food titan, said the agency halted the sale of 50-gram packages of Nescafe in southern Ukraine. It claimed the product had a bad smell.

He said the allegation made no sense, since the agency found no problem with 100-gram packages of Nescafe, even though the coffee came from the same factory in Brazil. “How could one package be bad and another good?” Radchenko asked. “It’s clear they wanted a bribe.”

Nestle declined to enter discussions and filed a lawsuit against the agency, he said. The company initially lost the case but eventually won on appeal, a process that lasted two to three months, he said.

Radchenko said Nestle’s experience was not at all unusual in Ukraine. “This is routine,” he said.

In a statement to Reuters, Olha Sokolova, the consumer agency’s recently appointed acting head and previously its deputy chief, said she had no information on Radchenko’s allegations. Separately, she defended the agency’s legal actions against Foxtrot, and said she had no information about the retailer’s charge that officials tried to extort bribes.





According to the tax agency and interviews with business people, officials from other government offices frequently shook down companies. The government has 70 different bodies with licensing authority, including 40 with the power to shut down a business, the tax agency said.

Said Danone’s Marchetti: “It was so hard to get an export license without paying bribes that I had to give up exporting.”

Government officials partly attribute the widespread bribery in Ukraine to the low salaries paid to civil servants. The average pay for tax inspectors, for example, is about $145 a month, according to the tax agency. The head of a regional state tax office earns about $350 a month.

“Bribes are how you make your ends meet,” said Jorge Zukoski, who headed the American Chamber of Commerce in Ukraine for 15 years until stepping down in January. “Your government paycheck does not put food on the table. It’s not a living wage.”

In the private sector, many Ukrainian businesses pay their employees partly in cash – known as “black” salaries – to avoid social-security contributions that average about 38 percent. The government loses additional revenue because employees typically do not pay income tax on the secret cash portion of their salary.

“Many analysts single out the payroll tax as being exceptionally high and the main reason why shadow wage payments remain common in Ukraine,” the Office of the U.S. Trade Representative stated in a 2012 report. The social-security tax for employers in Ukraine is more than 2.5 times the average paid by companies in the 34-nation Organization for Economic Co-operation and Development.

The practice of paying “black salaries” continues today. “I know our local competitors are paying in cash in envelopes,” Nestle Ukraine’s Radchenko said. “I know from people in interviews who want to be employed by Nestle.”

Tax authorities estimate that cash payments for salaries total about $17 billion a year, resulting in at least two million workers not appearing on tax rolls. Another five million employees report earning salaries that are below minimum wage, which authorities say is a sign they are paid partly in cash. In all, more than a third of Ukrainian workers are believed to receive “black” salaries.

To run this dodge, many businesses used so-called cashing services, which offered – for a fee of about 8 percent to 12 percent – to provide banknotes to pay “black” salaries and bribes, according to the tax agency.

Tax officials say that during Yanukovich’s administration, there were between six and nine “certified” cashing services that received the agency’s blessing. There were also another 100 to 120 “transit companies” used in the fraud to disguise transactions.

The officials declined to name any of the companies or the people involved, but said more than 100 tax agency employees were directly involved in the schemes.





In exchange for fees, the cashing services provided businesses not just with bank notes, but also phony invoices showing purchases of goods that never took place. Businesses used these fake expenses to reduce their reportable profits and save on corporate income tax, tax officials say.

Many companies also used the fake purchases to reduce the value-added taxes they owed to the government by falsely claiming that they had paid VAT on goods they never really bought.

For years, hundreds of firms offered such illicit services. But tax agency officials say that in 2012 and 2013, Yanukovich officials began pressuring companies to use the half-dozen or so “certified” or “state program” firms. Tens of billions of dollars passed through these firms, tax authorities say.

The biggest loss to the government was VAT revenue, a 20% tax on goods and services that normally provides more than half the funding of Ukraine’s budget, according to tax agency officials. They estimate the treasury last year lost a quarter of its expected VAT revenue through government-sponsored fraudulent schemes.

Ukraine’s treasury was so depleted that in recent years, companies with legitimate claims for VAT refunds often couldn’t receive them.

Volodymyr Klymenko, president of the Ukrainian Grain Association, whose 40 members account for about 90 percent of the country’s grain exports, said that about 15 years ago, officials typically would ask for a cut of one or two percent of VAT refunds. The kickback demands later rose dramatically, he said.

In December, a Ukrainian subsidiary of U.S.-based agribusiness group Archer Daniels Midland Co pleaded guilty in U.S. District Court in Illinois to charges that between 2002 and 2008, it paid about $22 million in bribes to Ukrainian officials through vendors to obtain more than $100 million in legitimate VAT refunds.

The improper payments, falsely recorded as insurance premiums or other business expenses, “were generally 18 percent to 20 percent of the corresponding VAT refunds,” according to a lawsuit by the Securities and Exchange Commission.

ADM and its subsidiary agreed to pay criminal fines and other penalties of about $54 million. Calling the conduct “regrettable,” chief executive Patricia Woertz said ADM had enhanced its internal controls and terminated some employees.

A spokeswoman for ADM added: “While we owned 80% of the corporate parent of the Ukrainian company, we did not control it at that time.”

Grain lobby chief Klymenko said the business of paying kickbacks to receive VAT refunds “reached its height” after Yanukovich became president in 2010. “You had to give up 40 to 50 percent of it,” he said. “They told you where to put it, in which bank to open a bank account, where to transfer the money.”





In his statement, Oleksandr Klymenko, the previous head of the tax authority and no relation of the grain lobby chief, said that the amount of VAT refunds increased in 2013 under his leadership and that he “radically” dealt with “VAT swindlers.” His statement didn’t address the issue of kickbacks.

Officials in the new government of President Petro Poroshenko have taken steps to try to deter corruption. These include a plan announced this week to slash the size of government and increase the salaries of civil servants, although it isn’t clear whether the measure will pass Ukraine’s parliament.

In the meantime, at the ministry of economic development and trade, new chief Pavlo Sheremeta said graft is “a cancer that’s eating the country from inside.” Some of his reform efforts have met resistance.

Sheremeta tried to cancel some of the huge fines leveled by the consumer protection agency against retailers like Foxtrot. The agency – which falls under his own ministry – responded by filing a lawsuit against Sheremeta, arguing that the fines were legal. The suit was dismissed.

The tax ministry, meanwhile, is trying to clean up the VAT rackets.

Noniak, the tax deputy, said the agency has opened 166 inquiries involving allegedly fraudulent requests for VAT refunds totaling about $76 million and another $4 million in illegal refunds. It also has started a criminal case against state officials involved in the suspect refunds.

The agency, Noniak said, plans to give polygraph tests to state officials. It has opened 256 criminal cases against tax inspectors, tax police and customs officials, including 18 cases of alleged bribery. Another focus is hiring.

“We need to appoint new managers as soon as possible,” said Noniak. “We need normal, honest, reliable people who are ready to work for the state, not for themselves.”

Asked if he believed some tax agency employees are still on the take, tax chief Bilous replied: “Of course. That’s our main problem.”


(Additional reporting by Natalia Zinets. Edited by Michael Williams)


Vladimir Putin and the madness of humanitarian imperialism.


August 10,.2014




According to an old humanitarian agenda. Vladimir Putin is demonized by western media The more imperialism is cruel, the more it pretends to be moral and humanitarian. This is not a paradox; not even a mark of hypocrisy. This is just the way the West has worked since it began its imperialistic agenda in the nineteenth century. Any kind of enemy, to their minds, has always been demonized on a moral ground which precedes and accompanies the internal chaos and subsequent attacking and looting of an unfortunate, and much weaker, target country . And, according to their reasoning anything the West does is for the common good..


Lenin used to extensively quote John A. Hobson, an English scientist and writer who wrote an outstanding essay in 1902 about British and European imperialism. History repeats itself since oligarchic democracy and capitalism have frozen temporality, as famous Russian philosopher Alexander Kojève used to think .


But let’s read the observations of Mr Hobson, a politically incorrect leftist.


First of all, for Hobson, the West is never hypocritical:


So every other European nation recognises the true outlines of British Imperialism and charges us with hypocrisy in feigning blindness. This charge is false; no nation sees its own shortcomings…



Any imperialistic nation is naïve and of good faith: there is just a genuine desire to spread Christianity among the heathen, to diminish the cruelty and other sufferings which they believe exist in countries less fortunate than their own, and to do good work about the world in the cause of humanity.


Even the infamous king Leopold of Belgium who ruined and massacred the people of Congo was of good faith: he claimed for his government of the Congo-“Our only programme is that of the moral and material regeneration of the country.”


As we know nowadays the great European monarchs rule the Bilderbergs with the banksters and the architects of the new World order. In the time of Kipling, the average imperialist pretended that England is a knight-errant, everywhere in search of a quest to deliver oppressed peoples from oppressive governments, regardless of her own interests and perils.


The victim of the humanitarian imperialism could be a Boer (a Palestinian in our times) or any people convinced of a barbarian conduct (see the pamphlets of the NYT against ‘homophobe’ Uganda these last weeks). Hobson wrote:


“Aggressive Imperialism, as our investigation has shown, is virtually confined to the coercion by stronger or better-armed nations of nations which are, or seem to be, weaker and incapable of effective resistance.”


Think of Libya, Syria, Iran, Afghanistan, Georgia and now the Ukraine.  Even if tsarist Russia was already hated in Hobson’s epoch for many lies and prejudices, the Russian might and military forces eventually prevented an attack. It always did except against Hitler (1914 was another history) who used the same western rhetoric to enslave and slaughter Slavic peoples. Goebbels blamed the Russians for the Holodomor as the American senates does.


Hobson  writes with irony:


“The chivalrous spirit of Imperialism leads neither Great Britain nor any other Western nation to assail a powerful State however tyrannous or to assist a weak State reputed to be poor.”


Hobson adds that public opinion in this time was moulded and formatted by imperialist literature (Verne, Kipling, Rider Haggard or John Buchan) and that the prejudices of the superior race were thus reinforced. He remarks that the cult of sport and the fascination for adventure and travels bolstered western biases and prejudices. The anglo-Saxon sportsman was (and still is in Nepal) always escorted by sad coolies.


The vast majority of “educated” Englishmen genuinely believe that England’s greatest gain from the Boer war is an enhancement of her “moral prestige”!


For John Hobson, the western stupidity is linked to naïve optimism and it results from the celebration of this insane moral imperialism which helped America to destroy half a dozen countries these last fifteen years, no to mention the incalculable bombings of Uncle Sam’s irascible History:


In England, and indeed throughout Anglo-Saxondom, a sort of cheery optimism has commonly usurped the seat of intelligent direction, a general belief in “national destiny,” which enables us “somehow to muddle through,” and advises us “to do the best we can and not look too far ahead.”


The cheery optimism of our business-knights is actually destroying any country on earth that the West views as either possessing valuable natural resources or is seen as a potential, or actual, threat to its domination..


Hobson writes further on the subject:


“Imperialism is based upon a persistent misrepresentation of facts and forces chiefly through a most refined process of selection, exaggeration, and attenuation, directed by interested cliques and persons so as to distort the face of history.”


Then Hobson concluded, not on the ludicrous state of mind of Obama’s America but of the former imperialist Britain:


“The gravest peril of Imperialism lies in the state of mind of a nation which has become habituated to this deception and which has rendered itself incapable of self-criticism”


For once Hobson is inaccurate: America is capable of self-criticism: it will confess that it has not helped enough its ally Israel, in that it has not attacked Israel’s enemy, Iran, not humiliated enough an alienated Europe and that it has not yet declared the war on Russia!


As we know, nobody plagued with such ‘moral prestige’ is perfect! And nothing is better than an atomic war to boast it.






No responses yet

Leave a Reply