TBR News July 28, 2017

Jul 28 2017

The Voice of the White House

Washington, D.C., July 28, 2017: “Governments, like individuals, are chronically in need of money to operate. This funding comes from diverse sources in the main taxes raised from the population. But in a democratic state, these funds are controlled and accountable.

It would be, as it is in the United States, quite acceptable for the government to loot the Social Security and federal pension funds until all that remains to the eye of the beneficiaries is a hollow facade, only awaiting a strong windstorm to collapse. However, it is another matter entirely for a government to make a profit by selling illegal drugs to its own citizens, as only one example.

Clandestine agencies are always loathe to disclose to the custodians of public funds the reasons for which their budgetary needs are required. Other, and less public, sources have to be tapped.”

Table of Contents

  • Republican effort to gut Obamacare crashes in U.S. Senate
  • John McCain sinks ‘skinny repeal’ of Obamacare health act
  • Despite What the Press Says, “Maverick” McCain Has a Long and Distinguished Record of Horribleness
  • Paul blocks McConnell from setting up defense bill vote
  • Top Trump lieutenant Scaramucci lashes colleagues in obscene rant
  • Kremlin tells US to cut diplomatic staff in sanctions row
  • ‘Little Russia’: Pro-Russian Separatists Harden Split from Ukraine
  • North Korea fires missile in direction of Japan, reports say
  • The Origins of the Cold War


Republican effort to gut Obamacare crashes in U.S. Senate

July 27, 2016

by Yasmeen Abutaleb, Amanda Becker and David Morgan


WASHINGTON (Reuters) – A U.S. Senate led by Donald Trump’s fellow Republicans failed by a single vote to pass a healthcare bill on Friday, delivering a stinging blow to the president as it undermined his campaign promise to dismantle Obamacare.

Three Republican senators – John McCain, Susan Collins and Lisa Murkowski – joined Senate Democrats in the dramatic early-morning 51-49 vote rejecting the bill. The outcome may spell doom for the party’s seven-year quest to gut a 2010 law that was Democratic former President Barack Obama’s signature domestic policy achievement.

For the moment the Affordable Care Act, which extended health insurance to 20 million people and drove the percentage of uninsured people to historic lows, remains in place and must be run by an administration that is hostile to it.

This leaves health insurers unsure how long the administration will continue to make billions of dollars in Obamacare payments that help cover out-of-pocket medical expenses for low-income Americans.

In Friday’s vote, Senate Majority Leader Mitch McConnell was unsuccessful in securing passage of even a stripped-down so-called skinny bill that would have repealed a few key parts of Obamacare. Broader legislation was defeated earlier in the week.

“It’s time to move on,” McConnell, whose reputation as a master strategist was in tatters, said on the Senate floor after the vote that unfolded at roughly 1:30 a.m.

“The American people are going to regret that we couldn’t find a better way forward,” McConnell added.

Republicans have long denounced Obamacare – which expanded the Medicaid health insurance for the poor and disabled and created online marketplaces for individuals to obtain coverage – as an intrusion by government on people’s healthcare decisions.

The Senate failure to move forward on dismantling it called into question the Republican Party’s basic ability to govern even as it controls the White House, Senate and House of Representatives.

Trump has not had a major legislative victory after more than six months in office. He had promised to get major healthcare legislation, tax cuts and a boost in infrastructure spending through Congress in short order.

“3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let Obamacare implode, then deal. Watch!” Trump wrote on Twitter after the vote.

But McCain wrote on Twitter, “Skinny repeal fell short because it fell short of our promise to repeal & replace Obamacare w/ meaningful reform.”

Republicans released the skinny bill just three hours before voting began. It would have retroactively repealed Obamacare’s penalty on individuals who do not obtain health insurance, repealed for eight years a penalty on certain businesses that do not provide employees with insurance and repealed a tax on medical devices until 2020. The nonpartisan Congressional Budget Office estimated that if it became law, 15 million fewer Americans would be insured in 2018 than under existing law.

The Affordable Care Act was passed by a then-Democratic controlled Congress with no Republican support in 2010. But Republicans have failed to come up with a consensus plan to replace it at a time when they hold all the power in Washington.

Uncertainty for Healthcare Industry

Health insurers have until September to finalize their 2018 health plans in many Obamacare marketplaces.

Some insurers, including Humana and Aetna, have pulled out of such markets, citing the uncertainty over the payments. Others have raised rates by double digits and said that they will need to raise rates another 20 percent if the uncertainty does not ease. Anthem Inc, which has already left three of the 14 states where it sells Blue Cross Blue Shield plans, said this week it might pull out of more.

Wall Street traded lower on Friday with less focus on the news from the Senate overnight and more on key earnings from Amazon and Exxon. Shares of hospitals were mixed: Tenet Healthcare fell 2 percent, Community Health Systems was nearly flat and HCA Healthcare gained 1.2 percent. Shares of health insurers were also mixed. Aetna was off 0.2 percent, Anthem gained 0.4 percent and Humana was off 0.3 percent.

Democrats, and some Republicans, said the bill’s failure could present an opportunity for the two parties to work together to fix problematic areas of the Obamacare law without repealing it.

Top House Democrat Nancy Pelosi called on Republican House Speaker Paul Ryan to establish a process for moving forward on improving Obamacare, rather than repealing it.

After the House passed a bill to repeal and replace Obamacare in May, McConnell grappled to get Senate Republicans to agree on their version of the bill. Hard-line conservatives wanted a bill that would substantially gut Obamacare, while moderates were concerned over legislation that could deprive millions of people of their healthcare coverage.

Republicans hold a 52-48 majority in the 100-seat Senate and could afford to lose support from only two Republican senators, with Vice President Mike Pence ready to cast a tie-breaking vote on the Senate floor.

Drama Over Mccain

As the vote on the skinny bill approached, all eyes in the Senate chamber were on McCain. The 2008 Republican presidential nominee flew back from Arizona earlier in the week after being diagnosed this month with brain cancer. McCain, an 80-year-old former prisoner of war in Vietnam who tangled with Trump during the 2016 election campaign and was disparaged by him, won praise for this from the president.

McCain, a veteran senator who has long been known for his independent streak, delivered a rousing speech on Tuesday calling for cooperation between the parties and then cast a decisive vote in allowing the Senate to take up the healthcare bill.

Early on Friday, he sat on the Senate floor talking to Collins, Murkowski, and Republican Senator Jeff Flake, also from Arizona. Collins and Murkowski both voted this week against broader Republican healthcare proposals, and both had concerns about the pared-down proposal.

McCain was approached before voting began by Pence and a close friend, Republican Senator Lindsey Graham. After speaking to them, McCain walked across the Senate floor to tell top Senate Democrat Chuck Schumer and other Democrats he would vote with them.

When McCain walked to the front of the Senate chamber to cast his deciding “no” vote, giving a thumbs down, Democrats cheered, knowing the bill would fail.

Trump had often expressed exasperation over the failure of congressional Republicans to overcome internal divisions to repeal Obamacare, but offered no policy specifics himself.

He has demanded at various times that Obamacare should be allowed to collapse on its own, that it should be repealed without replacement, and that it should be repealed and replaced.

Additional reporting by Susan Cornwell, Richard Cowan and Eric Walsh in Washington, Saikat Chatterjee and Abhinav Ramnarayan in London; Writing by Will Dunham; Editing by Louise Ireland and Frances Kerry


John McCain sinks ‘skinny repeal’ of Obamacare health act

Arizona senator, whose war record Trump mocked, deals major blow to president’s agenda in dramatic late-night vote

July 28, 2017

by Ben Jacobs, Lauren Gambino and Lois Beckett in Washington

The Guardian

Arizona senator John McCain torpedoed his party’s Obamacare repeal bill – and with it Donald Trump’s legislative agenda – in a night of high drama on Capitol Hill in the early hours of Friday morning.

McCain’s vote against the bill delivered a major setback for Republicans who have spent seven years vowing to repeal and replace Barack Obama’s Affordable Care Act.

McCain, who returned to Washington this week after being diagnosed with brain cancer, joined fellow Republicans Susan Collins of Maine and Lisa Murkowski of Alaska in voting down the so-called “skinny repeal” bill 51-49. Their no votes had been expected, but McCain’s came as a stunning and decisive blow to Senate Republicans and the president.

The bill would have removed the individual mandate, a key aspect of Obamacare which requires all Americans to have health insurance or pay a fine. In an analysis released roughly an hour after the bill was filed, the non-partisan Congressional Budget Office estimated that 15 million people would lose their cover if it passed and premiums would rise by 20%.

Trump issued a statement on Twitter early on Friday morning in which he insisted that he now wanted to let Obamacare collapse. He said: “3 Republicans and 48 Democrats let the American people down. As I said from the beginning, let ObamaCare implode, then deal. Watch!”

The bill was made public minutes before 10pm EDT on Thursday night, giving senators only two hours to review the measure before voting on it. Many Republican senators disdained the legislation, calling it a “disaster” and worse than Obamacare.

McCain, a six-term senator who was his party’s 2008 presidential candidate against Barack Obama, told reporters to “wait for the show” as he arrived for the vote in the Senate chamber.

Once on the Senate floor, McCain was lobbied by the vice-president, Mike Pence, who was there to preside in case of a tie, for more than 20 minutes. The two went back and forth and occasionally disappeared from the chamber altogether.

But as the votes were cast, McCain, who has long nurtured a reputation as a maverick willing to buck party lines, delivered a black eye to Trump, who had infamously mocked him as “not a war hero” during the 2016 campaign.

McCain is a decorated navy veteran who was repeatedly tortured during five and a half years of captivity in the Vietnam war.

The dramatic vote ended months of furious negotiating which exposed a party riven over how to dismantle a law that extended healthcare coverage to millions of Americans and has taken root in several states, in some cases with the help of Republican governors.

The vote also deprived Trump of his first major legislative victory six months into his turbulent administration. The president had campaigned on repealing Obamacare but intervened late in the process. His lobbying was sporadic, inconsistent and occasionally counterintuitive. He said in an interview that the House healthcare bill that passed in May, and which the Senate bill mirrors, was “mean”.

Afterwards, the Senate Democratic leader, Chuck Schumer, spoke to reporters about McCain’s vote.

Schumer said he and McCain had spoken “three or four” times a day since the Arizona senator returned to Washington, discussing the bill and the secretive process Republicans were using to try to pass the measure.

“Given his stature, his remarks at the beginning when he came in, moved everybody and I think that helped,” Schumer said. “He’s a hero. He’s a hero of mine.”

“And can we also not forgot the two women senators who were there from the beginning,” interjected Senator Amy Klobuchar of Minnesota.

Schumer said he could not recall a more dramatic night. Then he turned around and corrected his response, saying: “The birth of my daughter.”

Republicans could tell that the mood was changing in the Senate as the vote approached. “You could see, honestly, the body language in the entire chamber change the last two hours,” David Perdue of Georgia told the Guardian.

“You guys were up there, you could see it. One side was kind of ebullient and talking, and the other side was very subdued, and all of a sudden, it began to change. And I think it was an instinctive reaction to maybe, ‘This thing’s not going to pass tonight.’ And nobody knew for sure until you saw three votes.”

“This is what democracy is,” Perdue said. “It’s messy.”

“This isn’t about wins and losses. I actually respect Chuck Schumer’s comments tonight. He admitted Obamacare’s broken, we’ve got to fix it.

“I think there’s a mood right now in the Senate, from McCain’s comments the other day to Schumer’s comments tonight, I think there’s a growing sense that ‘let’s get this done.’”

The first-term Georgia Republican cast no blame on McCain. “I don’t think he turned on anybody,” said Perdue. “I think he voted his conscience. He loves America.”

Not all Republicans were so sanguine.

An emotional Senate majority leader, Mitch McConnell, declared immediately after the vote on the Senate floor: “This is clearly a disappointing moment … So yes, this is a disappointment. A disappointment indeed.” He added: “Our only regret tonight is that we didn’t achieve what we had hoped to accomplish. I think the American people are going to regret that we couldn’t find a better way forward.”

Ted Cruz, an ardent conservative who was skeptical that the bill did not fully dismantle Obamacare, insisted to reporters after the vote: “Mark my words, this journey is not yet done.”

The Texas Republican noted that the vote would be viewed as betrayal by many conservatives who have seen the GOP promise to repeal and replace Obamacare for years.

“For seven years Republicans have campaigned on one central message that we would repeal the train wreck that is Obamacare,” said Cruz. “The losers tonight are the people who believed in the democratic process, believe that actually when candidates run and say ‘I will fight to repeal Obamacare’ that that actually means they will fight to repeal Obamacare.”

Democrats have long conceded that there are problems with Obama’s healthcare law, but remained uniformly opposed to any measure that would repeal it. That left McConnell with a small margin of error. He could lose only two votes, with Pence on hand to cast a tie-breaking vote. He lost three when McCain voted no.

Nearly 20 million people gained healthcare coverage under Obama’s Affordable Care Act. The law requires all Americans to have insurance or face a penalty and offered states funding incentives to expand Medicaid coverage for people with low incomes.

In the meantime, Louisiana Republican Bill Cassidy insisted the efforts to reform healthcare “can’t be over”. However, Cassidy did manage to view the night’s events with some detachment. “Well, it was certainly dramatic. Certainly Senator McCain knows how to improve the drama.”


Despite What the Press Says, “Maverick” McCain Has a Long and Distinguished Record of Horribleness

July 27 2017

by Mehdi Hasan

The Intercept

What sort of person takes a break from taxpayer-funded cancer treatment and flies 2,000 miles to cast a vote that could result in 22 million people losing their health insurance and tens of thousands of them also losing their lives, then makes a big speech about how messed up the whole process is?

Perhaps the same sort of person who relentlessly agitated for an invasion and occupation of Iraq that caused the deaths of hundreds of thousands of Iraqis and led to millions of others being displaced from their homes?

Or maybe the same sort of person who put personal and party interests ahead of the national interest when he picked the know-nothing, far-right demagogue Sarah Palin, the ur-Trump, as his running mate in 2008?

Meet John Sidney McCain III: veteran Republican senator from Arizona and former GOP presidential candidate, who endured horrific torture and abuse at the hands of the Viet Cong between 1967 and 1973, and who was tragically diagnosed with brain cancer last week — and who has also been a loathsome human being for most of his eight decades on this planet.

McCain, whose nickname in high school was “McNasty,” has a long and well-documented history of temper tantrums and vicious bullying. The victims of his profanity-laden tirades range from his Democratic opponents and their children — “Do you know why Chelsea Clinton is so ugly? Because Janet Reno is her father,” he joked at a 1998 Republican fundraiser — to anti-war protesters (“low-life scum“) to fellow Republican Sens. Charles Grassley (“fucking jerk“) and Peter Domenici (“asshole“).

He once compared the president of Iran to a monkey and still insists on calling his Vietnamese captors “gooks” (the fact that they brutally tortured him does not excuse his repeated use of a crude racial epithet). Then there is his poor wife. As journalist Cliff Schecter recounts in his 2008 book “The Real McCain”:

In his 1992 Senate bid, McCain was joined on the campaign trail by his wife, Cindy, as well as campaign aide Doug Cole and consultant Wes Gullett. At one point, Cindy playfully twirled McCain’s hair and said, “You’re getting a little thin up there.” McCain’s face reddened, and he responded, “At least I don’t plaster on the makeup like a trollop, you cunt.”

None of this, however, seems to matter to his legion of fans and admirers in the press. “It is simply impossible to overestimate the love, bordering on worship, that reporters in Washington long had for McCain,” wrote the Washington Post’s Paul Waldman on Tuesday, “and to a great degree still do.”

It is thanks to these friendly journalists — “my base,” as McCain dubbed them — that the Arizona senator has been able to cultivate his image as an independent, a rebel, a maverick. Yet the truth is that McCain has always been a card-carrying conservative.

The former GOP presidential candidate, who proudly calls himself pro-life and a “Reagan Republican,” spent his first decade in Congress voting for tax cuts and trying to block the creation of Martin Luther King Jr. Day. He has earned a lifetime rating of 81.6 percent from the American Conservative Union and, according to a survey by FiveThirtyEight, has voted in line with President Donald Trump — a leader with whom he pretends to disagree — 90.7 percent of the time. (“Never Trump”? Well, I guess 9.3 percent of the time.)

McCain, to quote FiveThirtyEight’s Harry Enten, is a “MINO … or maverick in name only.” He is, perhaps above all else, a brazen hypocrite. Here is a Republican foreign policy hawk who sanctimoniously suggests support for human rights “must be an essential part of our foreign policy” while backing war after war that violate those very same rights. Here is a hero of the neocons who issues pious proclamations about the importance of promoting democracy and free elections while also cozying up to some of the world’s worst dictators.

As ever, his boosters in the media give him cover. In a fulsome if bizarre encomium to the former GOP presidential candidate last Saturday — headlined “What we can all learn from John McCain” — the Washington Post editorial board declared that “all over this world, Mr. McCain is associated with freedom and democracy” and claimed he had “championed human rights with verve and tirelessness — speaking out against repression and authoritarianism, and inviting … both Republicans and Democrats, to bear witness with him on trips abroad.”

This is pure fantasy. What was McCain bearing witness to in 2009 when he offered to sell weapons to Col. Qaddafi at a private meeting with the Libyan dictator and his son Muatassim? According to a State Department cable released by WikiLeaks, “McCain assured Muatassim that the United States wanted to provide Libya with the equipment it needs for its security.” McCain would later support regime change in Libya but the 2009 cable does not make any mention of him raising the issue of human rights with Qaddafi in person — with or without any “verve.”

What was McCain bearing witness to on all those friendly trips to the Kingdom of Saudi Arabia, where he glad-handed Saudi royals? And where was the championing of human rights last month, when he helped block a bipartisan attempt in the Senate to restrict the sale of arms to Saudi Arabia in order to try and reduce the number of civilian casualties in war-torn Yemen? Oh, and was it McCain’s association with “freedom and democracy” that prompted the Saudis to donate $1 million to the McCain Institute at Arizona State University?

The Post’s editorial also heaped praise on McCain for supporting “victims of repression” and offering them “succor and encouragement in the fight against tyranny.” This must have come as a surprise to the Palestinians, victims of the longest ongoing military occupation in the world. The former Republican presidential candidate is a strong defender of Israel and close ally of Benjamin Netanyahu. In 2014, he defended Israel’s murderous assault on Gaza, and in 2015, he said the U.S. government “shouldn’t be considering” supporting a Palestinian bid for statehood, warning that in the event of the United Nations recognizing a state of Palestine, “the United States Congress would have to examine our funding for the United Nations.” Repressed Palestinians? Screw ’em.

As FAIR.org media analyst Adam Johnson has observed, we have been fed a “childlike narrative of McCain as brave truth-teller, rather than predictable champion of war and empire who occasionally makes toothless references to human rights for the purposes of image curation.”

The “image curation” is in full swing these days — as are the repeated attempts to stifle any criticism of the Arizona senator’s awful political record. Yet those of us who heard McCain call for U.S. troops to occupy Iraq for “100 years”; who watched him laugh and sing “bomb, bomb, bomb, bomb” Iran; who listened to him call for an escalation of the unwinnable war in Afghanistan cannot — and should not have to — stay silent because he was diagnosed with cancer last week, or because of his undoubted bravery in Vietnam five decades ago.

We can wish McCain a speedy recovery while also acknowledging that he is nevertheless, to quote Jimmy Carter, an unrepentant “warmonger.” He has the blood of tens of thousands of innocents, in places like Iraq, Afghanistan, Yemen, and Libya, on his hands. And with his vote to move the Republican health care push forward in the Senate this week, he may soon have the blood of tens of thousands of Americans on his hands as well.


Paul blocks McConnell from setting up defense bill vote

July 28, 2017

by Max Greenwood

The Hill

Sen. Rand Paul(R-Ky.) blocked Majority Leader Mitch McConnell’s (R-Ky.) request early Friday morning for the chamber to advance the annual defense funding bill.

McConnell made the request in the immediate aftermath of the Senate’s shocking rejection of a scaled-back bill to repeal parts of ObamaCare, asking for unanimous consent to proceed to the defense legislation.

Senate Minority Leader Charles Schumer(D-N.Y.), who rejected Sen. John McCain’s (R-Ariz.) request on Thursday to pause the healthcare debate and move on to the National Defense Authorization Act (NDAA), said after the healthcare vote that he would let the bill move forward.

But Paul, who has been among the Senate’s most vocal ObamaCare critics, voiced an objection to McConnell’s request without explaining why, stalling proceedings on the NDAA, which is typically one of the least controversial spending bills.

Instead, the Senate will take up judicial nominations when lawmakers meet on Monday.

“Senator Rand Paul requested two bipartisan amendments, one on ending indefinite detention and one on AUMFs,” said Paul communications director Sergio Gor, referring to authorizations for the use of military force.

“He looks forward to working with leadership and the committee to get this done soon.”


Top Trump lieutenant Scaramucci lashes colleagues in obscene rant

July 27, 2017

by Steve Holland


WASHINGTON (Reuters) – Open warfare erupted inside President Donald Trump’s inner circle as his new communications director, Anthony Scaramucci, attacked senior White House colleagues in obscene comments published on Thursday.

Scaramucci blasted White House chief of staff Reince Priebus and Trump’s chief strategist, Steve Bannon, in an article in The New Yorker based on a telephone conversation on Wednesday night between one of the magazine’s correspondents and Scaramucci.

Amid a stream of vulgar language, the former Wall Street financier named to the communications post last Friday called Priebus a “fucking paranoid schizophrenic” and accused Bannon of trying to build his own brand “off the fucking strength of the president.”

In a Twitter message after the article appeared online, Scaramucci said: “I sometimes use colorful language. I will refrain in this arena but not give up the passionate fight for @realDonaldTrump’s agenda.”

Asked about the article, White House press secretary Sarah Sanders said the administration was focused on healthcare and other items.

“He used some colorful language that I don’t anticipate he’ll do again,” she told reporters. Any apology “needs to happen personally between them,” she said.

Priebus and Bannon had no comment.

Trump himself made no public comment on his aide’s outburst. Some of Trump’s advisers have questioned Priebus’ competence and his position appeared weak. Republicans close to the White House said Trump’s family had also been critical of his chief of staff.

The drama was the latest sign of disarray within the Trump White House even as it tries to advance healthcare and tax reform legislation. The president himself is preoccupied with an investigation into Russian meddling in last year’s presidential election and has been fiercely critical in recent days of his own attorney general, Jeff Sessions.

The scathing remarks by Scaramucci came as he and other Trump loyalists ratcheted up pressure on Priebus, a former Republican National Committee chairman, who does not have years-long ties with Trump.

There has been speculation that Priebus, who steered the party apparatus behind Trump’s unorthodox candidacy in last year’s election, is on his way out because Trump has no major legislative achievements in his first six months in office.

‘I’m Not Steve Bannon’

Earlier in the day, Sanders would not say whether Trump had confidence in Priebus.

“We all serve at the pleasure of the president and if it gets to a place where that isn’t the place, he’ll let you know,” Sanders told reporters.

She added that Trump “hires the very best people” who are not always going to agree and that he supports “healthy competition, and with that competition you usually get the best results.”

Priebus had sought to block Scaramucci from a White House job, according to officials. Priebus’ allies said Trump’s hiring of Scaramucci, which prompted press secretary Sean Spicer to resign, was a bad omen for Priebus.

In The New Yorker article, Scaramucci demanded to know how the reporter found out about a White House dinner Scaramucci had with Trump on Wednesday. In the conversation, Scaramucci made clear he suspected that Priebus had leaked the information to the reporter, calling Priebus “a paranoiac,” according to the magazine.

Scaramucci also told The New Yorker that unlike Bannon, he had no interest in media attention.

“I’m not Steve Bannon,” he said, adding: “I’m here to serve the country.”

On Wednesday, Scaramucci appeared to suggest in a Twitter message, later deleted, that the Federal Bureau of Investigation should investigate Priebus over a leak of Scaramucci’s financial records.

“If Reince wants to explain he’s not a leaker, let him do that,” Scaramucci said on CNN’s “New Day” on Thursday.

U.S. House of Representatives Speaker Paul Ryan defended Priebus on Thursday. The two men, both from Wisconsin, are close.

“Reince is doing a fantastic job at the White House and I believe he has the president’s confidence. If those two gentlemen have differences, my advice would be to sit down and settle your differences,” Ryan told a news conference.

Trump allies saw the drama playing out as a sign that the group of original Trump supporters was growing weary of Priebus and the RNC faction he brought with him.

“There is a widespread feeling among Trump supporters that he’s never been a real supporter of Donald Trump and that he isn’t playing to win on the president’s behalf,” said an outside Trump adviser. “After six months of this, time is up.”

Additional reporting by Doina Chiacu and Will Dunham; Editing by Kevin Drawbaugh and Peter Cooney


Kremlin tells US to cut diplomatic staff in sanctions row

Russia’s Foreign Ministry has told the US to cut the number of its diplomats in Russia, responding to anti-Russian sanctions endorsed by the US Senate. Moscow accused the US of hiding behind “exceptionalism.”

July 28, 2017


The decision to boost sanctions against Russia showed the “extreme aggression” of the US in the international arena, the Russian Foreign Ministry said while detailing its counter-measures in a Friday statement.

Moscow called on the US to reduce the number of its diplomatic staff in Russia to 455 in order to match the number of Russian diplomats in the US. Russia will also “mirror” any further expulsions of Russian diplomats, the ministry added.

Also, Russian authorities said they would seize a dacha (a vacation home) used by American diplomats outside of Moscow, as well as warehouse in the Russian capital.

Russian officials also slammed the US sanctions, saying they are motivated by “absolutely imaginary allegations of Russian involvement in their internal matters.”

“While hiding behind its ‘exceptionalism,’ the US is haughtily ignoring other countries’ positions and interests,” they said.

US ‘blackmail’ to limit cooperation with Europe

Both chambers of the US Congress approved the sanctions bill earlier this week. The document is designed to target, among other things, Russia’s key energy sector and other segments of the Russian economy.

The bill has triggered concern in the EU, as the sanctions could also hit European companies working with the Russians on energy projects, including the major Russian Nord Stream 2 gas pipeline. On Wednesday, the German Foreign Ministry warned that Berlin “could not accept” the US using sanctions against Russia as a tool of industrial policy.

EU Commission chief Jean-Claude Juncker also warned that the sanctions bill might have an impact on Europe’s “energy security interests” and said that the European bloc was ready to respond with measures of its own.

“America first cannot mean that Europe’s interests come last,” he said.

The Russian Foreign Ministry also decried US lawmakers for using “political tools in order to create an unfair advantage for the US in global economy.”

“This blackmail, aimed at limiting cooperation of Russia with its international partners, carries a threat to many countries and international business,” the said on Friday.

Trump pressed by Congress on Russia

The countermeasures follow a Thursday vote in the US Senate, where senators from both parties overwhelmingly backed the sanctions bill. It still needs to signed by President Donald Trump. Trump might choose to veto it and send it back to Congress, but the lawmakers are likely to overrule such a decision.

The bill includes a section that requires Trump to seek permission from Congress before lifting the sanctions,limiting his ability to maneuver diplomatically.

Russian president Vladimir Putin approved the Russian counter-measures, Kremlin spokesman Dmitry Peskov told reporters on Friday. Peskov added that the Kremlin did not wait for Trump to sign the bill before responding, as the bill was “almost fully defined” after going through the US Senate.

On Thursday, Putin decried the “boorish” behavior of the US and said that sanctions against his country were illegal.

“It is very regrettable that Russian-American ties are being sacrificed to issues of American internal policy,” he said during a diplomatic visit to Finland.

The sanctions punish Russia for alleged meddling in the US presidential elections as well as military intervention in Ukraine.

 ‘Little Russia’: Pro-Russian Separatists Harden Split from Ukraine

After nationalizing businesses, pro-Russian separatists have proclaimed their own state in eastern Ukraine, calling it “Little Russia.” Tens of thousands of residents in the region are now jobless.

July 28, 2017

by Christian Neef


The city of Yenakiieve, northeast of Donetsk, was founded more than a century ago around a steel mill. Some 10,000 people work at the steel mill, and the company that owns it operates the most modern rolling mill in Ukraine. But as of March, the mill became a thing of the past.

On the morning of March 1, armed men arrived at the plant, demanding that management submit to the regime of the “Donetsk People’s Republic.” If they refused, the men said, “legal and physical measures” would be taken against management and employees. What seemed like a farce at first would prove to be a major political move. In doing so, the pro-Russian separatists in the eastern Ukrainian People’s Republics of Donetsk and Luhansk have divided the country even further.

The nationalization of Ukrainian companies was a violation of the Minsk Agreement. As part of the 2015 accord, the parties to the conflict agreed to preserve Ukraine’s territorial integrity. But it would not be the last violation. Last week, the separatists took the step of proclaiming their own state, calling it “Little Russia.” Before that, Russian President Vladimir Putin had indirectly threatened to recognize such a state.

Since the spring of 2014, the regions have been occupied by pro-Russian rebels, who seceded from Ukraine with Russian support. It was a serious blow to Ukraine, especially from an economic standpoint. Until then, eastern Ukraine had been responsible for a fifth of the country’s entire industrial production. There are hundreds of mines in the region, together with Europe’s largest coking plants, important nonferrous metal and chemical plants. Much of the country’s electricity had also been generated in eastern Ukraine.

Although the separatists took over city halls and police stations in a coup three years ago, the large companies initially remained in the hands of their Ukrainian owners. They continued to produce as if nothing had happened. The separatists tolerated this because the businesses provided tens of thousands of jobs in the people’s republics. There was fighting at the front, but Ukraine continued to supply iron ore to the separatist region. In return, for three years, trains filled with anthracite traveled from the separatist region across the border, destined for Ukrainian thermal power plants.

The system worked until early this year, when Ukrainian nationalists put a stop to deliveries of goods in both directions. Trading with the enemy, they said, was tantamount to “funding terrorism.” Because Ukrainian President Petro Poroshenko didn’t dare to break up the blockade, he declared the suspension of trade. In doing so, he provided the separatists with an excuse to cut themselves off even further from Ukraine.

A Turning Point

It was a major turning point in the history of the war in eastern Ukraine, a conflict already known for its twists and turns. Soon afterward, the people’s republics nationalized 53 Ukrainian companies in their territory. Russia supported the takeover. Moscow could “understand, to a certain extent” the “temporary administration” of the businesses by the governments of the people’s republics, Putin’s spokesman said.

Most of the plants that have now been nationalized are part of the empire of Ukrainian oligarch Rinat Akhmetov. He was not only forced to write off the Yenakiieve steel mill, but also another steel mill, two coking plants, a pipe mill, three large coal mines and a thermal power plant, as well as the stadium in Donetsk he had built for the 2012 football European Championship. His losses run into the billions.

The management of the affected plants refused to agree to the separatists’ conditions. They stopped production and the workers were sent home. The top managers left for Ukraine on March 1. What has happened to the companies since then? Have the separatists placed them back into operation? And if so, where are they getting their raw materials from and where are they sending the steel and coke they produce?

It’s difficult to find answers to these questions. The people’s republics are providing no information, and Russia acts as if it has nothing to do with it all. It is also unwilling to provide proof that the occupied territories are surviving exclusively on Russian assistance. The events surrounding the nationalized companies are one of the best-kept secrets of the people’s republics.

Journalists Barred from Entry

The authorities in Donetsk are particularly averse to journalists these days. Our request for accreditation was denied by the Information Ministry in March, in an email that read: “The accreditation of the Der Spiegel journalists in the Donetsk People’s Republic is denied.” Accreditation had been issued in previous years. And without the necessary documents, it is no longer possible to pass through the checkpoints at the line of demarcation.

The separatist territories are also increasingly difficult to reach by telephone. Using WhatsApp, we finally manage to contact one of the best-known men in the Donetsk Republic, Alexander Khodakovsky, the former military head of the republic and commander of the Vostak (“East”) militia battalion, and later the head of state security and a member of the separatist parliament.

A year and a half ago, Khodakovsky quarreled with the Donetsk leadership. Today he is primarily involved with his movement, the Patriotic Forces of the Donbass. He says he’s concerned about developments in his republic.

“We are experiencing growing losses at the front,” he says, adding that the military situation is deteriorating. What soldier is willing to risk his life for 15,000 rubles a month, or about 220 euros? “Without Russia, Ukraine would have strangled us long ago.”

Khodakovsky says he was opposed to a premature nationalization of the Ukrainian plants. Some 100,000 people were employed there, “a tenth of our population.” The takeover of the companies “was a spontaneous decision.”

So, who’s in charge of the campaign? All the plants, he says, were placed under the control of a company called Wneschtorgserwis. It is registered in South Ossetia, the small Caucasus republic that was de facto taken over by Russia after the 2008 war against Georgia. This approach was used to cover up what was happening in the nationalized plants and Moscow’s role in the matter, he explains, adding that it was necessary to avoid the imposition of international sanctions on the companies involved.

Considerable Russian Influence

Khodakovsky says entire factories are being dismantled and sold to Russia, including the equipment from the October mine. “Of course, Mr. Surkov exerts a great deal of influence on what is happening here,” says Khodakovsky. “I would say he is the leading figure here.”

Vladislav Surkov, the former chief ideologue at the Kremlin, is now Putin’s personal adviser and his envoy to the people’s republics. He never made an appearance at the Minsk negotiations over Ukraine, but he has turned up in Donetsk and Luhansk. Western diplomats say that nothing functions without this man, which is why they meet regularly with Surkov in his office in the presidential administration on the Old Square in Moscow. Their last meeting with Surkov was in June.

There is little information available about Wneschtorgserwis. No one knows who runs it and how it is structured. It is known, however, that the company has reportedly delivered 140,000 tons of iron ore to steel mills in the Donbass region since April, for $18 million, and that it has begun exporting steel to Russia from there, as well as anthracite from the mines.

Wneschtorgserwis does have a PR representative. His name is Viktor Nikolayenko and he can sometimes be reached via the internet. Nikolayenko promised to smuggle DER SPIEGEL journalists into the separatist region and open a few plants for a visit. But then he went silent for weeks until, in May, he finally wrote that Moscow had strictly forbidden any interaction with the press — yet another indication of where the decisions are made.

We did at least succeed in obtaining details about the true situation in the confiscated plants. When the people’s republics took over the factories in March, officials said they would be “up and running again within two months.” But almost nothing has happened to date. The plants lack competent managers, raw materials and funds. At first the workers were still being paid 90 percent of their wages, but now more and more are complaining about severe cuts.

In early June, the Donetsk Republic decided to stop pumping water out of several mines and to dismiss the miners. Even in mines still in operation, like the Sassyadko mine in Donetsk, workers are pressured to quit, while others are advised to join the people’s militias. The working week in government-owned coal companies was reduced to two days on July 1, and wages were reduced by more than half. The confiscated Donetsk smelting works has suspended operations because diesel fuel is no longer available. And the situation in the vicinity of the wagon manufacturing plant in Stakhanov is now so dramatic that the management requested 1,500 food packets from the leadership of the people’s republic.

‘A Political Decision’

Dennis Denissov admits that Russia needs neither the steel nor the coal from the Donbass mines, which is what makes the situation so dramatic. Denissov is close to the deputy head of the government in Donetsk, who controls the nationalized companies. He works for a foundation that organizes assistance for the Donbass region from Moscow. He also promises to provide access to the people’s republics.

Dennisov says it was “a political decision” for Moscow to provide the affected companies with a loan for 10 billion rubles. Given that Russia doesn’t want to buy the separatists’ products, other buyers need to be found. He says there are potential buyers in the Baltics and in Serbia. The products are shipped through the Russian Black Sea port of Novorossiysk — with forged documents to conceal their origin.

However, the Russian support has not eased the situation. In mid-July, Oplot (“Bullwark”), the separatists’ television station, announced that the leadership of the Donetsk Republic had established a commission to search for solutions for the affected companies.

At almost the same time, Denissov contacted DER SPIEGEL once again, saying that he had had to complete a security inquiry in Moscow first. Unfortunately, he added, the outcome was negative: “You are not welcome in the territory of our republic.” Eastern Ukraine, it appears, has become terra incognita.

Translated from the German by Christopher Sultan

North Korea fires missile in direction of Japan, reports say

Japanese PM calls meeting of security council after apparent missile launch

Japan says launch is unacceptable and in clear violation of UN resolutions

July 28, 2017

by Oliver Laughland in New York and agencies in Tokyo

The Guardian

Japan’s prime minister has said North Korea fired what is believed to be a missile that may have landed in the sea off Japan.

Shinzo Abe told reporters that officials were analysing the apparent launch, just before midnight on Friday, and that he had called a meeting of the national security council.

“I have received information that North Korea once again conducted a missile firing,” he said. “We will immediately analyze information and do our utmost to protect the safety of the Japanese people.”

There was no immediate announcement of the type of missile. On July 4, Pyongyang triggered global alarm with the test-launch of its first intercontinental ballistic missile.

Chief cabinet secretary Yoshihide Suga said that the missile flew for about 45 minutes and appeared to have landed in the waters off Japan’s exclusive economic zone, but that there were no immediate reports of damage.

Suga added that the missile launch was unacceptable and in clear violation of United Nations resolutions, and said Japan had protested in the strongest possible terms.

“North Korea’s repeated provocative acts absolutely cannot be accepted,” he said.

Japanese public broadcaster NHK said the coast guard had issued safety warnings to aircraft and ships.

Pentagon spokesman Lt Col Christopher Logan confirmed that the United States had detected the launch of a ballistic missile from North Korea.

He added: “We are currently assessing all the data and we will have more information soon.”

Earlier this week, US officials said that they had detected signs of preparation for a new missile launch, which they thought would be of either an intermediate-range missile or North Korea’s ICBM – known as a KN-20 or a Hwasong-14.

North Korean leader Kim Jong-un, who personally oversaw the 4 July launch, described it as a gift to the “American bastards.”

The US military had expected that a missile would occur on Thursday, which was the 64th anniversary of the signing of the Korean armistice agreement.

The test raised tensions in the region, pitting Washington, Tokyo and Seoul against China, Pyongyang’s last remaining major ally.

After the test, the United States launched a push at the United Nations for tougher measures against Pyongyang.

In all, six sets of UN sanctions have been imposed on North Korea since it first tested an atomic device in 2006, but two resolutions adopted last year significantly toughened the sanctions regime.

There was no immediate confirmation of the launch by North Korea. The day’s broadcast on state-run television had already ended when the news broke at around midnight Pyongyang time.

North Korea generally waits hours or sometimes a day or more before announcing launches, often with a raft of photos in the ruling party newspaper or on the television news. North Korean leader Kim Jong Un is usually shown at the site to observe and supervise major launches.

Meanwhile, the US military is preparing to conduct another test of a missile-intercept system in Alaska, perhaps as soon as Saturday.

That test of the Terminal High Altitude Area Defense (Thaad) system had been scheduled before Friday’s developments.



From the FAS Project on Government Secrecy

Volume 2017, Issue No. 56

July 28, 2017


The Trump Administration budget request for FY 2018 would “severely reduce” Energy Department funding for development of carbon capture and sequestration technologies intended to combat the climate change effects of burning fossil fuels.

The United States has “more than 250 years’ worth of clean, beautiful coal,” President Trump said last month, implying that remedial measures to diminish the environmental impact of coal power generation are unnecessary.

Research on the carbon capture technology that could make coal use cleaner by removing carbon dioxide from power plant exhaust would be cut by 73% under the Trump proposal.

“The Trump Administration’s approach would be a reversal of Obama Administration and George W. Bush Administration DOE policies, which supported large carbon-capture demonstration projects and large injection and sequestration demonstration projects,” the Congressional Research Service said this week in a new report.

“We have finally ended the war on coal,” President Trump declared.

However, congressional approval of the Administration’s proposal to slash carbon capture and sequestration (CCS) development is not a foregone conclusion.

“The House Appropriations Committee’s FY2018 bill funding DOE disagrees with the Administration budget request and would fund CCS activities at roughly FY2017 levels,” the CRS report said.

“This report provides a summary and analysis of the current state of CCS in the United States.” It also includes a primer on how CCS could work, and a profile of previous funding in this area. See Carbon Capture and Sequestration (CCS) in the United States, July 24, 2017.

Other new and updated reports from the Congressional Research Service include the following.

Methane and Other Air Pollution Issues in Natural Gas Systems, updated July 27, 2017

The U.S. Export Control System and the Export Control Reform Initiative, updated July 24, 2017

Base Erosion and Profit Shifting (BEPS): OECD Tax Proposals, July 24, 2017

Oman: Reform, Security, and U.S. Policy, updated July 25, 2017

Lebanon, updated July 25, 2017

Aviation Bills Take Flight, but Legislative Path Remains Unclear, CRS Insight, July 25, 2017

Military Officers, CRS In Focus, July 3, 2017

Military Enlisted Personnel, CRS In Focus, July 3, 2017

Transgender Servicemembers: Policy Shifts and Considerations for Congress, CRS Insight, July 26, 2017

Systematic, authorized publication of CRS reports on a government website came a step closer to reality yesterday when the Senate Appropriations Committee voted to approve “a provision that will make non-confidential CRS reports available to the public via the Government Publishing Office’s website.”


The Origins of the Cold War

July 28, 2017

by Harry von Johnston, PhD

In 1948,the American armed forces were also being sharply reduced, since the war in the Pacific had ended in 1945. Military units were disbanded and their soldiers returned to civilian life as quickly as possible. On the economic front, businesses that had enjoyed lucrative government military contracts found themselves with empty assembly lines and tens of thousands of laid off workers.

It has been said that there never was a good war nor a bad peace. While the latter was certainly beneficial to the Soviets and permitted them to rebuild their shattered economy, it certainly was not beneficial for either the rapidly-shrinking military or business communities in the United States.

This situation permitted the development of the Gehlen organization and secured its position as a vital American political resource. The US had virtually no military intelligence knowledge of the Soviet Union. But the Germans, who had fought against them for four years, had. Gehlen and his military staff only had knowledge of wartime Soviet military units which were either reduced to cadre or entirely disbanded. However, this was of no interest to the senior officials of US intelligence. Gehlen was to become a brilliant intelligence specialist with an incredible grasp of Soviet abilities and intentions. This preeminence was almost entirely fictional. It was designed to elevate Gehlen in the eyes of American politicians including President Truman and members of Congress, and to lend well-orchestrated weight to the former General’s interpretation of his employer’s needs.

In 1948, Stalin sent troops into Czechoslovakia after a minority but efficient communist coup which overthrew the Western-oriented government. This act, in February of 1948, combined with the blockade of West Berlin, then occupied by the British, French and Americans in June of the same year, gave a group of senior American military leaders a heaven-sent opportunity to identify a new and dangerous military enemy—an enemy which could and would attack Western Europe and the United States in the immediate future.

To facilitate the acceptance of this theory, Gehlen was requested to produce intelligence material that would bolster it in as authoritative a manner as possible. This Gehlen did and to set the parameters of this report, Gehlen, General Stephen Chamberlain, Chief of Intelligence of the US Army General Staff, and General Lucius D. Clay, US commander in occupied Germany met in Berlin in February of 1948, immediately after the Czech occupation but before the blockade.

After this meeting, Gehlen drew up a lengthy and detailed intelligence report which categorically stated that 175 fully-equipped Soviet divisions, many armored, were poised to attack. General Clay forwarded this alarming example of creative writing to Washington and followed up with frantic messages indicating his fear that the Soviets were about to launch an all-out land war on the United States.

Although the sequence of events might indicate that Clay was involved in an attempt to mislead US leaders, in actuality, he was misled by Chamberlain and Gehlen. They managed to thoroughly frighten General Clay and used him as a conduit to Washington. He was not the last to fall victim to the machinations of the war party.

The Gehlen papers were deliberately leaked to Congress and the President. This resulted in the Cold War between the Soviet Union and the United States. This was not a historical first by any means. Elements in England at the beginning of the 20th century, alarmed at the growing economic threat of a united Germany, commenced a long public campaign designed to frighten the British public and their leaders into adopting a bellicose re-armament program based on a fictional German military threat.

Gehlen and his organization were considered vital to US interests. As long as the General was able to feed the re-armament frenzy in Washington with supportive, inflammatory secret reports, then his success was assured.

The only drawback to this deadly farce was that the General did not have knowledge of current Soviet situations in the military or political fields. He could only bluff his way for a short time. To enhance his military staffs, Gehlen developed the use of former SS Sicherheitsdienst (SD) and Gestapo people, brought to him by Krichbaum, his chief recruiter.

At the same time, a joint British-American project called “Operation Applepie” was launched with the sole purpose of locating and employing as many of the former Gestapo and SD types now being employed by Gehlen. Imitation is the sincerest form of flattery, after all. During the course of this hunt, the prize was considered to be former SS-Gruppenführer Heinrich Müller, then in Switzerland. Contact with the former Gestapo Chief was through Krichbaum, acting on Müller’s specific instructions.

In the resulting bidding war, the Americans easily defeated the British, and the British public was spared the possible discovery of Müller appearing, under a new name, on their New Year’s Honors List instead of being made a Brigadier General of Reserve in the United States Army under a new name.

The recently uncovered files on “Applepie” are of such interest that they will be the subject of a further in-depth publication. Other document series of equal importance will include the so-called Robinson papers and a series of reports on the British use of certain former Gestapo and SD personnel in Damascus, Syria by John Marriott of the Security Intelligence Middle East (SIME). Robinson (or Robinsohn as he was known to the Gestapo officials) was a high-level Soviet agent captured in France as a result of the Rote Kapelle investigations. Robinson’s files came into Müller’s possession and reveal an extensive Soviet spy ring in Great Britain. Such highly interesting and valuable historical records should also encompass the more significant intercepts made of Soviet messages by the Gestapo from Ottawa, Canada to Moscow throughout the war. These parallel the so-called Venona intercepts which have been fully translated and are extraordinarily lengthy.

In 1948, control of the Gehlen organization was assumed by the new CIA and put under the direction of Colonel James Critchfield, formerly an armored unit commander and now a CIA section chief.

At this point, Gehlen had a number of powerful sponsors in the US military and intelligence communities. These included General Walter Bedell Smith, former Chief of Staff to General Eisenhower and later head of the CIA; General William Donovan, former head of the OSS; Allen Welch Dulles, former Swiss station chief of the OSS and later head of the CIA; Rear Admiral Roscoe Hillenkoetter, first head of the CIA; General Edwin Sibert of US Army military intelligence and Generals Chamberlain and Clay.

American military intelligence officers were well aware that the Soviet Army threat was hollow and that the Soviets’ act of dismantling the eastern German railroad system was strong proof that an attack was not in the offing, but they were strongly discouraged by their superiors from expressing their views.

In 1954, General Arthur Trudeau, chief of US military intelligence, received a copy of a lengthy report prepared by retired Lt. Colonel Hermann Baun of Gehlen’s staff. Baun, who had originally been assigned to the German High Command (OKW) as an Abwehr specialist on Russia, eventually ended up working for Gehlen’s Foreign Armies East which was under the control of the Army High Command (OKH). Baun was an extremely competent, professional General Staff officer who, by 1953, had taken a dim view, indeed, of the creatures foisted on him by Gehlen. Baun detested Gehlen who had forced him out of his post-war intelligence position with the West. Baun’s annoyance was revealed in a lengthy complaint of Gehlen’s Nazi staff members which set forth, in detail, their names and backgrounds.

General Trudeau was so annoyed with this report that in October of 1954, he took West German Chancellor Konrad Adenauer aside as Adenauer was making an official visit to Washington, Trudeau passed much of this information to the horrified Adenauer, who had spent time in a concentration camp during the war. Adenauer, in turn, raised this issue with American authorities and the matter was leaked to the press. Allen Dulles, a strong Gehlen backer and now head of the CIA, used his own connections and those of his brother, John, Eisenhower’s Secretary of State, to effectively silence Trudeau by transferring him to the remote Far East.

Trudeau’s warning to Adenauer did not have a lasting effect and on April 1, 1956, former General Reinhard Gehlen was appointed as head of the new West German Federal Intelligence Service, the Bundesnachrichtendiesnt or BND.

To this day, it is well-known that the BND is firmly in the hands of the CIA and, like British intelligence agencies, does as Langley wishes.

In this case, as in so many other similar ones, virtue is certainly not its own reward.



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