TBR News June 17,2015

Jun 17 2015

The Voice of the White House

Washington, D.C. June 16, 2015: “The US is now trying to get at Russiaa by threatening to put heavy military hardware in neighboring Baltic states. Putin has, rightly, taken this as a direct threat to Russian security and has threatened to beef up Russian ICBM development in retaliation. Also, the US has been making greedy gestures to the newly-ice free Arctic regions, lusting after the oil reserves there as well as wishing to take control of the potential very valuable trade routes. Like the loud sanctions Obama fastened on Russia after the Crimean fiasco, these plans will achieve nothing but future trouble. And Greece refuses to repay EU loans and claims that it will leave the EU. No doubt, given Grecian bankruptcy and bad fiscal policies, the EU will celebrate. This is like having your nasty mother-in-law threaten to never visit you again!”

Second hack of federal records hit intelligence and military personnel

OPM hackers linked to China accessed sensitive background information

News follows revelation records of 14 million federal employees compromised

June 2, 2015

Associated Press in Washington

As many as 14 million current and former civilian US government employees had their personal information exposed to hackers, according to two people who were briefed on the investigation, representing a far higher figure than the 4 million the Obama administration initially disclosed – and coming amid an apparent second cyber breach that officials said was linked to China.

The newer estimates put the number of compromised records at between 9 million and 14 million going back to the 1980s, said one congressional official and one former US official, who spoke to the Associated Press on condition of anonymity because information disclosed in the confidential briefings includes classified details of the investigation.

There are about 4.2 million federal employees, so the majority of the records exposed relate to former employees. Contractor information also has been stolen, officials said.

The latest revelation came a day after a major union said the cyber theft is more damaging than it first appeared, asserting that hackers stole personnel data and social security numbers for all the federal workers in a central personnel database.

Several US officials also said hackers linked to China appear to have gained access to sensitive background information submitted by intelligence and military personnel seeking security clearances. The break is the second digital breach of federal records revealed in a week and could dramatically compound the potential damage.

The forms believed accessed, known as Standard Form 86, require applicants to fill out deeply personal information about mental illnesses, drug and alcohol use, past arrests and bankruptcies. They also require the listing of contacts and relatives, potentially exposing any foreign relatives of US intelligence employees to coercion. The applicant’s social security number and that of his or her cohabitant are required.

The officials declined to be quoted by name because the details are classified, and the Office of Personnel Management had no immediate comment.

Regarding the new user total affected by the main breach, the Obama administration had acknowledged that up to 4 million current and former employees whose information resides in the OPM server are affected by the December cyber breach, but it had been vague about exactly what was taken.

But J David Cox, president of the American Federation of Government Employees, said in a letter Thursday to OPM director Katherine Archuleta that based on incomplete information OPM provided to the union, “we believe that the Central Personnel Data File was the targeted database, and that the hackers are now in possession of all personnel data for every federal employee, every federal retiree, and up to 1 million former federal employees”.

The OPM data file contains the records of most federal civilian employees, though not members of Congress and their staffs, members of the military or staff of the intelligence agencies.

The union believes the hackers stole military records and veterans’ status information, address, birth date, job and pay history, health insurance, life insurance and pension information, and age, gender and race data, he said.

Also Thursday, Senate Democrat leader Harry Reid said that the hack was carried out by “the Chinese” without specifying whether he meant the Chinese government or individuals. Reid is one of eight lawmakers briefed on the most secret intelligence information. US officials have declined to publicly blame China, which has denied involvement.

The union, which does not have direct access to the investigation, said it is basing its assessment on “sketchy” information provided by OPM. The agency has sought to downplay the damage, saying what was taken “could include” personnel file information such as social security numbers and birth dates.

We believe that social security numbers were not encrypted, a cybersecurity failure that is absolutely indefensible and outrageous,” Cox said in the letter. The union called the breach “an abysmal failure on the part of the agency to guard data that has been entrusted to it by the federal workforce”.

Samuel Schumach, an OPM spokesman, said that “for security reasons, we will not discuss specifics of the information that might have been compromised”.

Schumach did, however, address Cox’s comment on encryption. “Though data encryption is a valuable protection method, today’s adversaries are sophisticated enough that encryption alone does not guarantee protection,” he said. “OPM does utilize encryption in some instances and is currently increasing the types of methods utilized to encrypt data.”

The central personnel data file contains up to 780 separate pieces of information about an employee.

Cox complained in the letter that “very little substantive information has been shared with us, despite the fact that we represent more than 670,000 federal employees in departments and agencies throughout the executive branch”.

The union’s release and Reid’s comment in the Senate put into sharper focus what is looking like a massive cyber espionage success by China. Republican senator Susan Collins, an intelligence committee member, has also said the hack came from China.

Mike Rogers, the former chairman of the House intelligence committee, said last week that Chinese intelligence agencies have for some time been seeking to assemble a database of information about Americans. Those personal details can be used for blackmail, or also to shape bogus emails designed to appear legitimate while injecting spyware on the networks of government agencies or businesses Chinese hackers are trying to penetrate.

US intelligence officials say China, like the US, spies for national security advantage. Unlike the US, they say, China also engages in large-scale theft of corporate secrets for the benefit of state-sponsored enterprises that compete with Western companies. Nearly every major US company has been hacked from China, they say.

Greece contagion sweeps euro zone bond markets, hits shares

June 15, 2015

by Nigel Stephenson


LONDON | Global financial markets suffered their first bout of significant contagion from the Greek crisis this year on Monday after 11th hour talks between the near bankrupt country and its creditors collapsed.

After weeks of minor ebbs and flows on the stop-start negotiations, bond markets across the euro zone signaled alarm that a deal may not be reached by mid-year, when Athens must repay 1.6 billion euros ($1.8 billion) to the International Monetary Fund.

The premium investors demand to hold Spanish, Italian and Portuguese government bonds over low-risk German Bunds hit 2015 highs, with the 10-year yield gap between Spanish and German debt touching its widest since August.

Shares in Europe and Asia fell, led lower by banks.

The euro weakened against the dollar, pressured also by investor anxiety ahead of a U.S. Federal Reserve interest rate-setting meeting later this week.

U.S. stock index futures ESc1 were down 0.5 percent, suggesting Wall Street would extend Friday’s declines, which were blamed on worries over Greece and the Fed meeting.

Talks on Sunday between Greece and its creditors, described as a last attempt to bridge their differences, broke up after less than an hour.

European Union officials said Athens had offered no new concessions to secure the funding it needs. Athens said it would not give in to demands for more pension and wage cuts.

Greece has already been bailed out twice and many banks have cut their exposure to the country while euro zone authorities have put in place mechanisms to limit contagion. However, the prospect of default and the possibility of Athens leaving the euro weighed heavily on sentiment on Monday.

“If Greece leaves the euro zone, euro zone participation will no longer be irreversible. Euro zone participation may even become an issue in elections in other euro countries where euroskeptic parties are gaining ground, such as in Spain later this year,” said Ruth van de Belt, investment strategist at Kempen Capital Management.


The pan-European FTSEurofirst 300 .FTEU3 stock index fell 1.3 percent and a gauge of European stock market volatility .V2TX hit its highest since Jan. 22, days before the left-wing Syriza party of Greek Prime Minister Alexis Tsipras won power in a parliamentary election.

Banks in Spain, Italy and Portugal were among the big losers, with Italy’s Banco Monte dei Paschi (BMPS.MI) down 4.5 percent and Spain’s Banco Popular (POP.MC) down 4.1 percent and Portuguese Millennium bcp (BCP.LS) down 5 percent.

Athens stocks dropped 5.2 percent while the exporter-heavy German DAX index .GDAXI lost 1.7 percent.

“Sentiment remains negative with rallies likely to be sold until there is some positive news (on Greece),” said Peregrine & Black senior sales trader Markus Huber.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.9 percent. Tokyo’s Nikkei 225 .N225 index fell 0.1 percent, with traders citing concern over Greece and the Fed meeting, which ends on Wednesday.

Solid U.S. data last week reinforced expectations that the Fed is on track to raise rates, possibly as soon as September. Investors will focus on any changes in Fed Chair Janet Yellen’s language in a post-meeting news conference.

The euro was down 0.5 percent at $1.1208, recovering from a low of $1.1188. Euro/dollar one-month volatility, a gauge of how sharp swings in the exchange rate are expected to be, hit its highest for 3-1/2 years.

The single currency also hit its lowest in nearly two weeks against the Swiss franc, before recovering.

Euro weakness helped push the dollar 0.4 percent higher against a basket of major currencies .DXY.

The yen was down 0.2 percent at 123.60 per dollar.

Safe-haven German 10-year bond yields fell 2 basis points to 0.83 percent while yields on Italian and Spanish 10-year bonds rose 14 and 15 bps respectively. Greek 10-year yields rose 94 bps to 12.76 percent, still a percentage point below late-April peaks.

Oil fell as the dollar firmed. Brent crude LCOc1 lost $1.3 a barrel to $62.57. Gold was steady at $1,180.60 an ounce.

(Additonal reporting by Jamie McGeever, Emelia Sithole-Matarise and Sudip Kar-Gupta in London, Lisa Twaronite in Tokyo; editing by John Stonestreet)

The Anne Frank Diary Fraud
by Brian Harring –

When Harriet Beecher Stowe wrote Uncle Tom’s Cabin, she did so prompted by the highest of motives. Yet she, herself, relates the incident that when she first met Abraham Lincoln in 1863, he commented “So you are the little woman who wrote the book that made this great war!”

Few will deny that the printed word in this instance fanned the flames of passion which brought about one of the bloodiest and saddest wars of American history, with brother sometimes pitted against brother, father against son. Perhaps if there had been less appeal to the emotions the problems might have resolved themselves through peaceful means. However, almost universally read at the time, few people then recognized the potency of one small book or the injustice done the South through its wide acceptance as a fair picture of slavery in the South.

Propaganda, as a weapon of psychological warfare is in even wider use today. Communists were masters of the art. Often they used the direct approach; just as often they employed diversion tactics to focus the eyes and ears of the world in directions other than where the real conflict was being waged. For many years, through propaganda alone, the dead threat of Hitler and Nazism had been constantly held before the public in a diversion maneuver to keep attention from being directed against the live threat of Stalin, Khrushchev and Communism.

Such has been the effect, if not the deliberate intention of many who have promoted its distribution, of a book of popular appeal-The Diary Of Anne Frank. It has been sold to the public as the actual diary of a young Jewish girl who died in a Nazi concentration camp after two years of abuse and horror.

Many Americans have read the book or seen the movie version, and have been deeply moved by the real life drama it claims to present. But have we been misled in the belief that Anne Frank actually wrote this diary? And if so. should an author be permitted to produce a work of fiction and sell it to the world as fact, particularly one of such tremendous emotional appeal?

The Swedish journal Frio Ord published two articles commenting on The Diary of Anne Frank. A condensation of these articles appeared in the April 15, 1959 issue of Economic Council Letter, as follows:

“History has many examples of myths that live a longer and richer life than truth. and may become more effective than truth.

The Western world has for some years hem made aware of a young Jewish girl through the medium of what purports to he her personally written story, “Anne Frank’s Diary.” Any informed literary inspection of this book has shown it to have been impossible as the work of a teenager.

A noteworthy decision of the New York Supreme Court confirms this point of view, in that the well known American writer, Meyer Levin, has been awarded $50.000 to be paid him by the father of Anne Frank as an honorarium for Levin’s work on the “Anne Frank Diary.”

Mr. Frank, in Switzerland, had promised to pay to prominent Jewish author, Meyer Levin. not less than $50,000 because he had used the literary creation of author Levin in toto, and represented it to his publisher and the public as his late daughter’s original work.

Inquiry of the County Clerk. New York County. as to the facts of the case referred to in the Swedish press, brought a reply on April 23, 1962, giving the name of a New York firm of lawyers as “attorneys .far the respondent.” Reference was to ”The Dairy of Anne Frank 2203-58.”

A letter to this firm brought a response on May 4, 1962 that “Although we represent Mr. Levin in other matters, we had nothing to do with the Anne Frank case.”

On May 7, 1962, came the following reply from a member of a firm of New York lawyers to whom the original inquiry had been forwarded:

“I was the attorney for Meyer Levin in his action against Otto Frank and others. It is true that a jury awarded Mr. Levin $50,000 in damages, as indicated in your letter. That award was later set aside by the trial justice. Hon. Samuel C. Coleman. on the ground that the damages had not been proved in the manner required by law. The action was subsequently settled between the litigating parties, while an appeal from Judge Coleman’s decision was pending.

I am afraid that the case itself is not officially reported, so far as the trial itself, or even Judge Coleman’s decision, is concerned. Certain procedural matters were reported. both in 141 New York Supplement. Second Series 170. and in 5 Second Series 181. The correct file number in the New York County Clerk‘s office is 2241-1956 and the file is probably a large and full one which must include Judge Coleman’s decision. Unfortunately, our file is in storage and 1 cannot locate a copy of that decision as it appeared in the New York Law Journal early in the year 1960.”

The Diary Of Anne Frank was first published in 1952 and immediately became a bestseller. It has been republished in paperback, 40 printings. It is impossible to estimate how many people have been touched and aroused by the movie production.

Why has the trial involving the father of Anne Frank, bearing directly on the authenticity of this book, never been “officially reported”? In royalties alone, Otto Frank has profited richly from the sale of this book, purporting to depict the tragic life of his daughter. But is it fact, or is it fiction? Is it truth or is it propaganda? Or is it a combination of all of these? And to what degree does it wrongfully appeal to the emotions through a misrepresentation as to its origin?

School publications for years have recommended this book for young people, presenting it as the work of Anne Frank. Advertising in advance of the movie showing has played up the “factual” nature of the drama being presented. Do not writers of such editorials and promoters of such advertising, “fan the flames of hate” they rightly profess to deplore?

Many American Jews were shocked at the handling of the Eichmann case, the distortions contained in the book Exodus and its movie counterpart, but their protests have had little publicity outside of their own organ, Issues, by the American Council for Judaism. Others who have expressed the same convictions have been charged with anti-Semitism. Yet it is to be noted that both Otto Frank and his accuser Meyer Levin, were Jewish, so a similar charge would hardly be applicable in pursuing this subject to an honest conclusion..

File number 2241-1956 in the New York County Clerk’s office should be opened to the public view and its content thoroughly publicized. Misrepresentation, exaggeration, and falsification has too often colored the judgment of good citizens. If Mr. Frank used the work of Meyer Levin to present to the world what we have been led to believe is the literary work of his daughter, wholly or in part, then the truth should be exposed.

To label fiction as fact is never justified nor should it be condoned.

Since actual period documentation does not exist in support of the Holocaust myth, it has always been incumbent on its supporters to create it.

Not only is the “Anne Frank” diary now considered to be a fake, so also is “The Painted Bird” by Jerzy Kosinski. This book, which is a mass of pornographic and sadistic imagery which, had it not been taken so seriously by the Jewish community, would be merely the pathetic manifestation of a self-serving and very sick person.

This was duly exposed as a shabby, though much revered (by the Jewish community) and quoted, fraud. When this was exposed, Kosinski committed suicide. Later, in Kosinski’s footsteps we find the next fiction entitled “Fragments, ” by a Swiss Protestant named Bruno Dosseker who spent the war in Switzerland as a young child. Dosseker posed as a very young Baltic Jewish concentration camp inmate named Binjamin Wilkomerski. This work consists of allegedly fragmented “memories” and is very difficult to read

Dosseker became the poster boy for the Holocaust supporters and was lionized by the international Jewish community, reaping considerable profit and many in-house awards for his wonderful and moving portrayal of German brutality and sexual sadism.

Another book, allegedly by a Hungarian doctor, concerning his deportation from Budapest in 1944 and subsequent journey by “Death Train” to Auschwitz is another fraud. There was never such a doctor in Hungary during the period involved and the alleged route of the train from Budapest to Auschwitz did not exist.

These sort of pathetic refugees from the back wards seem to be drawn to the Holocausters…and they to them. There are now “Holocaust Survivors” as young as thirty which is an interesting anomaly because the last concentration camp was closed in 1945. Perhaps they consider the last frenzied spring sale at Bloomingdale’s department store to be what they survived.

Next we can expect to see a book based on twenty-seven volumes of secret diaries prepared on a modern word processor within the current year by an alleged inhabitant of the Warsaw ghetto, describing the Nazi slaughter of tens of millions of weeping Jews by means that would shame a modern African state.

And, predictably, the publication of these howlers would be greeted with joy on the part of the fund raisers and fanatics, praised in the columns of the New York Times and scripted by Steven Spielberg for a heart-wrenching and guaranteed Oscar-winning film.

Hundreds of thousands of DVD copies will be donated to American schools and the Jewish community will demand that subservient executive and legislative bodies in America create a Day of Atonement as a National Holiday to balance the terrible Christian Christmas and the wickedly Satanic Halloween.

Conservationists must hate these books because so many otherwise beautiful and useful trees are slaughtered for their preparation

Insofar as the Anne Frank diary is concerned, herewith is some background on Anne Frank, her family and her alleged Diary.

The Franks were upper class German Jews, both coming from wealthy families. Otto and his siblings lived on the exclusive Meronstrasse in Frankfurt. Otto attended a private prep school, and also attended the Lessing Gymnasium, the most expensive school in Frankfurt.

Otto attended Heidelberg University. After graduation he left for a long vacation in England.

In 1909, the 20 year old Otto went to New York City where he stayed with his relatives, the Oppenheimers.

In 1925 Anne’s parents married and settled in Frankfurt, Germany. Anne was born in 1929. The Frank’s family business included banking, management of the springs at Bad Soden and the manufacture of cough drops. Anne’s mother, the former Edith Holländer, was the daughter of a manufacturer.

In 1934, Otto and his family moved to Amsterdam where he bought a spice business, Opekta, which manufactures Pectin used in making household jellies.

On May 1940, after the Germans occupied Amsterdam Otto remained in that city while his mother and brother moved to Switzerland. Otto remained in Amsterdam where his firm did business with the German Wehrmacht. From 1939 to 1944, Otto sold Opeka, and Pectin, to the German army. Pectin was a food preservative, and a anti infectant balm for wounds and as a thickener for raising blood volume in blood transfusions. Pectin was used as an emulsifier for petroleum, gelatized gasoline for fire bombing. By supplying the Wehrmacht, Otto Frank became, in the eyes of the Dutch, a Nazi collaborator.

On July 6, 1942 Otto moved the Frank family into the so-called ‘Secret Annex’. The annex is a three story, mostly glass townhouse that shares a garden park with fifty other apartments.

While he was allegedly in hiding, Otto Frank still managed his business, going downstairs to his office at night and on weekends. Anne and the others would go to Otto’s office and listen to radio broadcasts from England.

The purported diary begins on June 12, 1942, and runs to December 5,1942 . It consists of a book that is six by four by a quarter inches. In addition to this first diary, Anne supplemented it with personal letters. Otto said Anne heard Gerrit Bolkestein in a broadcast say: ~ “Keep a diary, and he would publish after the war”, and that’s why Anne’s father claimed she rewrote her diaries second time in 1944.

In this second edition, the new writer changed, rearranged and occasionally combined entries of various dates.

When Anne allegedly rewrote the diaries, she used a ball point pen, which did not exist in 1945, and the book took on an extremely high literary standard, and read more like a professional documentary than a child’s diary. In Anne’s second edition her writing style, and handwriting, suddenly matured.

The actual diary of Anne Frank contained only about 150 notes, according to The New York Times, of October 2 ,1955.

In 1944, German authorities in occupied Holland determined that Otto Frank had been swindling then via his extensive and very lucrative Wehrmacht contracts. The German police then raided his apartment attic, and the eight Jews were sent to Westerbork work camp and forced to perform manual labor .Otto himself was sent to Auschwitz.. Anne, her sister Margot, and her mother, subsequently died of typhus in another camp.

In 1945, after being liberated from German custody, Otto returned to Amsterdam, where he claimed he found Anne’s diary cleverly hidden in the Annex’s rafters. However, another version has a Dutch friend, Meip Geis finding Anne’s diary of fictional events, which she then gave to Otto Frank.

Otto took what he claimed were Anne’s letters and notes, edited them into a book, which he then gave to his secretary, Isa Cauvern, to review. Isa Cauvern and her husband Albert Cauvern , a writer, authored the first diary.

Questions were raised by some publishers as to whether Isa and Albert Cauvern, who assisted Otto in typing out the work used the original diaries or whether they took it directly from Mr. Frank’s personal transcription.

American author, Meyer Levin wrote the third and final edition

Meyer Levin was an author, and journalist, who lived for many years in France, where he met Otto Frank around 1949.

Born in 1905, Meyer Levin was raised in the section of Chicago notoriously known in the days of gangster warfare as the “Bloody Nineteen Ward.” At the age of eighteen he worked as a reporter for the Chicago Daily News and during the next four years became an increasingly frequent contributor to the national literary magazine, The Menorah Journal. In 1929 he published THE REPORTER, which was the first of his sixteen novels.

In 1933 Levin became an assistant editor and film critic at the newly-created Esquire Magazine where he remained until 1939.

Perhaps his best-known work is COMPULSION (1956), chronicling the Leopold and Loeb case and hailed by critics as one of the greatest books of the decade. The compelling work was the first “documentary novel” or “non-fiction novel.”

After the enormous success of COMPULSION, Levin embarked on a trilogy of novels dealing with the Holocaust. The first, EVA (1959) was the story of a Jewish girl’s experiences throughout the war and her adjustment to life after the concentration camps. This was followed by THE FANATIC (1963), which told the hypnotic story of a Jewish poet dealing with the moral questions that arose from his ordeal at the hands of the Nazis. The last in the triptych, THE STRONGHOLD (1965), is a thriller set in a concentration camp during the last days of the war.

At the outset of World War II Levin made documentary films for the US Office of War Information and later worked in France as a civilian expert in the Psychological Warfare Division. He eventually became a war correspondent for the Jewish Telegraphic Agency, with the special mission of uncovering the fate of Jewish concentration camp prisoners. Levin took his role very seriously, sometimes entering concentration camps ahead of the tanks of the liberating forces in order to compile lists of the survivors.

After the war Levin went to Palestine and turned his attention again to the motion picture camera. His film MY FATHER’S HOUSE told the story of a child survivor searching for his family in Palestine. He wrote this story as a novel as well and the book was published in 1947.

Levin also joined the Hagana underground and helped smuggle Jews from the interior of Poland to Palestine, then basically an Arab country under the control of the British..

In 1951 Levin came upon a copy of the French edition of the Anne Frank diary He made a number of attempts to have the work published in English, and conceived it as a play and film. When the diary finally found an American publisher, his play was accepted for production but then suddenly barred, ostensibly for being “unstageworthy,” and another writer’s version was commissioned.

Levin fought for the rights to perform his version of the play, claiming that the real reason the producers refused to stage his work was because they thought it “too Jewish.” He saw the suppression of the play as an extension of the Stalinist attack on Jewish culture and, outraged that even Anne Frank could be censored, he took the producers to court and began an agonizing, prolonged struggle that dragged on for years.

Levin eventually won a jury award against the producers for appropriation of ideas, but the bitterness of the trial made him many enemies in the Jewish and literary communities.

Although Levin’s version of the play is still banned by the owners of the dramatic rights, underground productions of the work are frequently staged throughout the world.

Meyer Levin died in 1981

Levin rewrote the various post-war treatments of the Anne Frank diary with an eye toward a Broadway production, but Otto decided to cut him out, refusing to honor his contract or pay him for his work. Meyer Levin sued Otto Frank for his writings, and the New York Supreme court awarded Meyer Levin $50,000, for his ‘intellectual work’.

In 1980, Otto sued two Germans, Ernst Romer and Edgar Geiss, for distributing literature denouncing the diary as a forgery. The trial produced a study by official German handwriting experts that determined everything in the diary was written by the same person. The person that wrote the diaries had used a ballpoint pen throughout. Unfortunately for Herr Frank, the ballpoint pen was not available until 1951 whereas Anne was known to have died of typhus in 1944.

Because of the lawsuit in a German court, the German state forensic bureau, the Bundes Kriminal Amt [BKA] forensically examined the manuscript, which at that point in time consisted of three hardbound notebooks and 324 loose pages bound in a fourth notebook, with special forensic equipment.

The results of tests, performed at the BKA laboratories, showed that “significant” portions of the work, especially the fourth volume, were written with a ballpoint pen. Since ballpoint pens were not available before 1951, the BKA concluded those sections must have been added subsequently.

In the end, BKA clearly determined that none of the diary handwriting matched known examples of Anne’s handwriting. The German magazine, Der Spiegel, published an account of this report alleging that (a) some editing postdated 1951; (b) an earlier expert had held that all the writing in the journal was by the same hand; and thus (c) the entire diary was a postwar fake.

The BKA information, at the urgent request of the Jewish community, was redacted at the time but later inadvertently released to researchers in the United States\

CIA torture appears to have broken spy agency rule on human experimentation

Exclusive: Watchdogs shocked at ‘disconnect’ between doctors who oversaw interrogation and guidelines that gave CIA director power over medical ethics

June 15, 2015

by Spencer Ackerman

The Guardian


Central Intelligence Agency had explicit guidelines for “human experimentation” before, during and after its post-9/11 torture of terrorism detainees, the Guardian has learned, which raise new questions about the limits on internal oversight over the agency’s in-house and contracted medical research.


The guidelines, published here for the first time, were still in effect during the lifespan of the agency’s controversial interrogation program


Sections of a previously classified CIA document, made public by the Guardian on Monday, empower the agency’s director to “approve, modify, or disapprove all proposals pertaining to human subject research”. The leeway provides the director, who has never in the agency’s history been a medical doctor, with significant influence over limitations the US government sets to preserve safe, humane and ethical procedures on people.

CIA director George Tenet approved abusive interrogation techniques, including waterboarding, designed by CIA contractor psychologists. He further instructed the agency’s health personnel to oversee the brutal interrogations – the beginning of years of controversy, still ongoing, about US torture as a violation of medical ethics.

But the revelation of the guidelines has prompted critics of CIA torture to question how the agency could have ever implemented what it calls “enhanced interrogation techniques” – despite apparently having rules against “research on human subjects” without their informed consent.

Indeed, despite the lurid name, doctors, human-rights workers and intelligence experts consulted by the Guardian said the agency’s human-experimentation rules were consistent with responsible medical practices. The CIA, however, redacted one of the four subsections on human experimentation.


The more words you have, the more you can twist them, but it’s not a bad definition,” said Scott Allen, an internist and medical adviser to Physicians for Human Rights.

The agency confirmed to the Guardian that the document was still in effect during the lifespan of the controversial rendition, detention and interrogation program.

After reviewing the document, one watchdog said the timeline suggested the CIA manipulated basic definitions of human experimentation to ensure the torture program proceeded.

Crime one was torture. The second crime was research without consent in order to say it wasn’t torture,” said Nathaniel Raymond, a former war-crimes investigator with Physicians for Human Rights and now a researcher with Harvard University’s Humanitarian Initiative.

The document containing the guidelines, dated 1987 but updated over the years and still in effect at the CIA, was obtained under the Freedom of Information Act by the ACLU and shared with the Guardian, which is publishing it for the first time.

The relevant section of the CIA document, “Law and Policy Governing the Conduct of Intelligence Agencies”, instructs that the agency “shall not sponsor, contract for, or conduct research on human subjects” outside of instructions on responsible and humane medical practices set for the entire US government by its Department of Health and Human Services.

A keystone of those instructions, the document notes, is the “subject’s informed consent”.

That language echoes the public, if obscure, language of Executive Order 12333 – the seminal, Reagan-era document spelling out the powers and limitations of the intelligence agencies, including rules governing surveillance by the National Security Agency. But the discretion given to the CIA director to “approve, modify, or disapprove all proposals pertaining to human subject research” has not previously been public.

The entire 41-page CIA document exists to instruct the agency on what Executive Order 12333 permits and prohibits, after legislative action in the 1970s curbed intelligence powers in response to perceived abuses – including the CIA’s old practice of experimenting on human beings through programs like the infamous MK-Ultra project, which, among other things, dosed unwitting participants with LSD as an experiment.

The previously unknown section of the guidelines empower the CIA director and an advisory board on “human subject research” to “evaluate all documentation and certifications pertaining to human research sponsored by, contracted for, or conducted by the CIA”.

Experts assessing the document for the Guardian said the human-experimentation guidelines were critical to understanding the CIA’s baseline view of the limits of its medical research – limits they said the agency and its medical personnel violated during its interrogations, detentions and renditions program after 9/11.

The presence of medical personnel during brutal interrogations of men like Abu Zubaydah, they said, was difficult to reconcile with both the CIA’s internal requirement of “informed consent” on human experimentation subjects and responsible medical practices.

When Zubaydah, the first detainee known to be waterboarded in CIA custody, “became completely unresponsive, with bubbles rising through his open, full mouth”, he was revived by CIA medical personnel – known as the Office of Medical Services (OMS) – according to a CIA account in the Senate intelligence committee’s landmark torture report.

Physicians for Human Rights called for federal investigation on CIA torture program participation, calling rectal feeding technique ‘form of sexual assault’

The OMS doctors were heavily involved in the torture of detainees in CIA custody. They advised interrogators on the physical and psychological administration of what the agency called “enhanced interrogation techniques”. After observation, the doctors offered perspectives on calibrating them to specific detainees’ resilience.

OMS staff assigned to the agency’s black sites wrote emails with subject lines like: “Re: acceptable lower ambient temperatures”.

The CIA, which does not formally concede that it tortured people, insists that the presence of medical personnel ensured its torture techniques were conducted according to medical rigor. Several instances in the Senate torture report, partially declassified six months ago, record unease among OMS staff with their role in interrogations.

But other physicians and human rights experts who have long criticized the role of medical staff in torture said the extensive notes from CIA doctors on the interrogations – as they unfolded – brought OMS into the realm of human experimentation, particularly as they helped blur the lines between providing medical aid to detainees and keeping them capable of enduring further abusive interrogations.

Doctors take oaths to guarantee they inflict no harm on their patients.

Zubaydah “seems very resistant to the water board”, an OMS official emailed in August 2002. “No useful information so far … He did vomit a couple of times during the water board with some beans and rice. It’s been 10 hours since he ate so this is surprising and disturbing. We plan to only feed Ensure for a while now. I’m head[ing] back for another water board session.”

Doctors and intelligence experts said they could imagine legitimate, non-abusive CIA uses for human experimentation.

Steven Aftergood, a scholar of the intelligence agencies with the Federation of American Scientists, suggested that the agency might need to study polygraph effects on its agents; evaluate their performance under conditions of stress; or study physiological indicators of deception.

But all said that such examples of human experimentation would require something that the CIA never had during the interrogation program: the informed consent of its subjects.

There is a disconnect between the requirement of this regulation and the conduct of the interrogation program,” said Aftergood. “They do not represent consistent policy.”

Months after Zubaydah’s interrogation, Tenet issued formal guidance approving brutal interrogation techniques, including waterboarding. Tenet explicitly ordered medical staff to be present – a decision carrying the effect of having them extensively document and evaluate the torture sessions.

[A]ppropriate medical or psychological personnel must be on site during all detainee interrogations employing Enhanced Techniques,” Tenet wrote in January 2003. “In each case, the medical and psychological staff shall suspend the interrogation if they determine that significant and prolonged physical or mental injury, pain or suffering is likely to result if the interrogation is not suspended.”

In response to the Guardian’s questions about the newly disclosed document and its implications for the CIA’s post-9/11 torture program, CIA spokesperson Ryan Trapani provided the following statement:

CIA has had internal guidelines interpreting Executive Order 1233 in place continuously from 1987 to present. While some provisions in these guidelines have been amended since September 11, 2001, none of those amendments changed provisions governing human experimentation or were made in response to the detention and interrogation program.”

Ironically, the only part of the CIA’s torture program in which agency officials claimed they were hamstrung by prohibitions on human experimentation is when they were asked by John Helgerson, their internal inspector general, if torture was effective.

Their response was framed as an example of the agency respecting its own prohibition on human experimentation. In more recent days, the CIA has used it as a cudgel against the Senate report’s extensive conclusions that the torture was ultimately worthless.

[S]ystematic study over time of the effectiveness of the techniques would have been encumbered by a number of factors,” reads a CIA response given to Helgerson in June 2003, a point the agency reiterated in its formal response to the Senate intelligence committee. Among them: “Federal policy on the protection of human subjects.”

Harvard’s Raymond, using the agency’s acronym for its “enhanced interrogation technique” euphemism, said the CIA must have known its guidelines on human experimentation ruled out its psychologist-designed brutal interrogations.

If they were abiding by this policy when EIT came up, they wouldn’t have been allowed to do it,” Raymond said. “Anyone in good faith would have known that was human subject research.”

The Truth About Diego Garcia: And 50 Years of Fiction About an American Military Base

by David Vine



First, they tried to shoot the dogs. Next, they tried to poison them with strychnine. When both failed as efficient killing methods, British government agents and U.S. Navy personnel used raw meat to lure the pets into a sealed shed. Locking them inside, they gassed the howling animals with exhaust piped in from U.S. military vehicles. Then, setting coconut husks ablaze, they burned the dogs’ carcasses as their owners were left to watch and ponder their own fate.


The truth about the U.S. military base on the British-controlled Indian Ocean island of Diego Garcia is often hard to believe. It would be easy enough to confuse the real story with fictional accounts of the island found in the Transformers movies, on the television series 24, and in Internet conspiracy theories about the disappearance of Malaysia Airlines flight MH370.


While the grim saga of Diego Garcia frequently reads like fiction, it has proven all too real for the people involved. It’s the story of a U.S. military base built on a series of real-life fictions told by U.S. and British officials over more than half a century. The central fiction is that the U.S. built its base on an “uninhabited” island. That was “true” only because the indigenous people were secretly exiled from the Chagos Archipelago when the base was built. Although their ancestors had lived there since the time of the American Revolution, Anglo-American officials decided, as one wrote, to “maintain the fiction that the inhabitants of Chagos [were] not a permanent or semi-permanent population,” but just “transient contract workers.” The same official summed up the situation bluntly: “We are able to make up the rules as we go along.”


And so they did: between 1968 and 1973, American officials conspired with their British colleagues to remove the Chagossians, carefully hiding their expulsion from Congress, Parliament, the U.N., and the media. During the deportations, British agents and members of a U.S. Navy construction battalion rounded up and killed all those pet dogs. Their owners were then deported to the western Indian Ocean islands of Mauritius and the Seychelles, 1,200 miles from their homeland, where they received no resettlement assistance. More than 40 years after their expulsion, Chagossians generally remain the poorest of the poor in their adopted lands, struggling to survive in places that outsiders know as exotic tourist destinations.


During the same period, Diego Garcia became a multi-billion-dollar Navy and Air Force base and a central node in U.S. military efforts to control the Greater Middle East and its oil and natural gas supplies. The base, which few Americans are aware of, is more important strategically and more secretive than the U.S. naval base-cum-prison at Guantánamo Bay, Cuba. Unlike Guantánamo, no journalist has gotten more than a glimpse of Diego Garcia in more than 30 years. And yet, it has played a key role in waging the Gulf War, the 2003 invasion of Iraq, the U.S.-led war in Afghanistan, and the current bombing campaign against the Islamic State in Syria and Iraq.


Following years of reports that the base was a secret CIA “black site” for holding terrorist suspects and years of denials by U.S. and British officials, leaders on both sides of the Atlantic finally fessed up in 2008. “Contrary to earlier explicit assurances,” said Secretary of State for Foreign and Commonwealth Affairs David Miliband, Diego Garcia had indeed played at least some role in the CIA’s secret “rendition” program.


Last year, British officials claimed that flight log records, which might have shed light on those rendition operations, were “incomplete due to water damage” thanks to “extremely heavy weather in June 2014.” A week later, they suddenly reversed themselves, saying that the “previously wet paper records have been dried out.” Two months later, they insisted the logs had not dried out at all and were “damaged to the point of no longer being useful.” Except that the British government’s own weather data indicates that June 2014 was an unusually dry month on Diego Garcia. A legal rights advocate said British officials “could hardly be less credible if they simply said ‘the dog ate my homework.’”


And these are just a few of the fictions underlying the base that occupies the Chagossians’ former home and that the U.S. military has nicknamed the “Footprint of Freedom.” After more than four decades of exile, however, with a Chagossian movement to return to their homeland growing, the fictions of Diego Garcia may finally be crumbling.


No “Tarzans”


The story of Diego Garcia begins in the late eighteenth century. At that time, enslaved peoples from Africa, brought to work on Franco-Mauritian coconut plantations, became the first settlers in the Chagos Archipelago. Following emancipation and the arrival of indentured laborers from India, a diverse mixture of peoples created a new society with its own language, Chagos Kreol. They called themselves the Ilois — the Islanders.


While still a plantation society, the archipelago, by then under British colonial control, provided a secure life featuring universal employment and numerous social benefits on islands described by many as idyllic. “That beautiful atoll of Diego Garcia, right in the middle of the ocean,” is how Stuart Barber described it in the late 1950s. A civilian working for the U.S. Navy, Barber would become the architect of one of the most powerful U.S. military bases overseas.


Amid Cold War competition with the Soviet Union, Barber and other officials were concerned that there was almost no U.S. military presence in and around the Indian Ocean. Barber noted that Diego Garcia’s isolation — halfway between Africa and Indonesia and 1,000 miles south of India — ensured that it would be safe from attack, yet was still within striking distance of territory from southern Africa and the Middle East to South and Southeast Asia.


Guided by Barber’s idea, the administrations of John F. Kennedy and Lyndon Johnson convinced the British government to detach the Chagos Archipelago from colonial Mauritius and create a new colony, which they called the British Indian Ocean Territory. Its sole purpose would be to house U.S. military facilities.


During secret negotiations with their British counterparts, Pentagon and State Department officials insisted that Chagos come under their “exclusive control (without local inhabitants),” embedding an expulsion order in a polite-looking parenthetical phrase. U.S. officials wanted the islands “swept” and “sanitized.” British officials appeared happy to oblige, removing a people one official called “Tarzans” and, in a racist reference to Robinson Crusoe, “Man Fridays.”


Absolutely Must Go”


This plan was confirmed with an “exchange of notes” signed on December 30, 1966, by U.S. and British officials, as one of the State Department negotiators told me, “under the cover of darkness.” The notes effectively constituted a treaty but required no Congressional or Parliamentary approval, meaning that both governments could keep their plans hidden.


According to the agreement, the United States would gain use of the new colony “without charge.” This was another fiction. In confidential minutes, the United States agreed to secretly wipe out a $14 million British military debt, circumventing the need to ask Congress for funding. In exchange, the British agreed to take the “administrative measures” necessary for “resettling the inhabitants.”


Those measures meant that, after 1967, any Chagossians who left home for medical treatment or a routine vacation in Mauritius were barred from returning. Soon, British officials began restricting the flow of food and medical supplies to Chagos. As conditions deteriorated, more islanders began leaving. By 1970, the U.S. Navy had secured funding for what officials told Congress would be an “austere communications station.” They were, however, already planning to ask for additional funds to expand the facility into a much larger base. As the Navy’s Office of Communications and Cryptology explained, “The communications requirements cited as justification are fiction.” By the 1980s, Diego Garcia would become a billion-dollar garrison.


In briefing papers delivered to Congress, the Navy described Chagos’s population as “negligible,” with the islands “for all practical purposes… uninhabited.” In fact, there were around 1,000 people on Diego Garcia in the 1960s and 500 to 1,000 more on other islands in the archipelago. With Congressional funds secured, the Navy’s highest-ranking admiral, Elmo Zumwalt, summed up the Chagossians’ fate in a 1971 memo of exactly three words: “Absolutely must go.”


The authorities soon ordered the remaining Chagossians — generally allowed no more than a single box of belongings and a sleeping mat — onto overcrowded cargo ships destined for Mauritius and the Seychelles. By 1973, the last Chagossians were gone.


Abject Poverty”


At their destinations, most of the Chagossians were literally left on the docks, homeless, jobless, and with little money. In 1975, two years after the last removals, a Washington Post reporter found them living in “abject poverty.”


Aurélie Lisette Talate was one of the last to go. “I came to Mauritius with six children and my mother,” she told me. “We got our house… but the house didn’t have a door, didn’t have running water, didn’t have electricity. And then my children and I began to suffer. All my children started getting sick.”


Within two months, two of her children were dead. The second was buried in an unmarked grave because she lacked money for a proper burial. Aurélie experienced fainting spells herself and couldn’t eat. “We were living like animals. Land? We had none… Work? We had none. Our children weren’t going to school.”


Today, most Chagossians, who now number more than 5,000, remain impoverished. In their language, their lives are ones of lamizer (impoverished misery) and sagren (profound sorrow and heartbreak over being exiled from their native lands). Many of the islanders attribute sickness and even death to sagren. “I had something that had been affecting me for a long time, since we were uprooted,” was the way Aurélie explained it to me. “This sagren, this shock, it was this same problem that killed my child. We weren’t living free like we did in our natal land.”


Struggling for Justice


From the moment they were deported, the Chagossians demanded to be returned or at least properly resettled. After years of protest, including five hunger strikes led by women like Aurélie Talate, some in Mauritius received the most modest of compensation from the British government: small concrete houses, tiny plots of land, and about $6,000 per adult. Many used the money to pay off large debts they had accrued. For most, conditions improved only marginally. Those living in the Seychelles received nothing.


The Chagossian struggle was reinvigorated in 1997 with the launching of a lawsuit against the British government. In November 2000, the British High Court ruled the removal illegal. In 2001 and 2002, most Chagossians joined new lawsuits in both American and British courts demanding the right to return and proper compensation for their removal and for resettling their islands. The U.S. suit was ultimately dismissed on the grounds that the judiciary can’t, in most circumstances, overrule the executive branch on matters of military and foreign policy. In Britain, the Chagossians were more successful. In 2002, they secured the right to full U.K. citizenship. Over 1,000 Chagossians have since moved to Britain in search of better lives. Twice more, British courts ruled in the people’s favor, with judges calling the government’s behavior “repugnant” and an “abuse of power.”


On the government’s final appeal, however, Britain’s then highest court, the Law Lords in the House of Lords, upheld the exile in a 3-2 decision. The Chagossians appealed to the European Court of Human Rights to overturn the ruling.


A Green Fiction


Before the European Court could rule, the British government announced the creation of the world’s largest Marine Protected Area (MPA) in the Chagos Archipelago. The date of the announcement, April Fool’s Day 2010, should have been a clue that there was more than environmentalism behind the move. The MPA banned commercial fishing and limited other human activity in the archipelago, endangering the viability of any resettlement efforts.


And then came WikiLeaks. In December 2010, it released a State Department cable from the U.S. Embassy in London quoting a senior Foreign and Commonwealth Office official saying that the “former inhabitants would find it difficult, if not impossible, to pursue their claim for resettlement on the islands if the entire Chagos Archipelago were a marine reserve.” U.S. officials agreed. According to the Embassy, Political Counselor Richard Mills wrote, “Establishing a marine reserve might, indeed… be the most effective long-term way to prevent any of the Chagos Islands’ former inhabitants or their descendants from resettling.”


Not surprisingly, the main State Department concern was whether the MPA would affect base operations. “We are concerned,” the London Embassy noted, that some “would come to see the existence of a marine reserve as inherently inconsistent with the military use of Diego Garcia.” British officials assured the Americans there would be “no constraints on military operations.”


Although the European Court of Human Rights ultimately ruled against the Chagossians in 2013, this March, a U.N. tribunal found that the British government had violated international law in creating the Marine Protected Area. Next week, Chagossians will challenge the MPA and their expulsion before the British Supreme Court (now Britain’s highest) armed with the U.N. ruling and revelations that the government won its House of Lords decision with the help of a fiction-filled resettlement study.


Meanwhile, the European Parliament has passed a resolution calling for the Chagossians’ return, the African Union has condemned their deportation as unlawful, three Nobel laureates have spoken out on their behalf, and dozens of members of the British Parliament have joined a group supporting their struggle. In January, a British government “feasibility study” found no significant legal barriers to resettling the islands and outlined several possible resettlement plans, beginning with Diego Garcia. (Notably, Chagossians are not calling for the removal of the U.S. military base. Their opinions about it are diverse and complicated. At least some would prefer jobs on the base to lives of poverty and unemployment in exile.)


Of course, no study was needed to know that resettlement on Diego Garcia and in the rest of the archipelago is feasible. The base, which has hosted thousands of military and civilian personnel for more than 40 years, has demonstrated that well enough. In fact, Stuart Barber, its architect, came to the same conclusion in the years before his death. After he learned of the Chagossians’ fate, he wrote a series of impassioned letters to Human Rights Watch and the British Embassy in Washington, among others, imploring them to help the Chagossians return home. In a letter to Alaska Senator Ted Stevens, he said bluntly that the expulsion “wasn’t necessary militarily.”


In a 1991 letter to the Washington Post, Barber suggested that it was time “to redress the inexcusably inhuman wrongs inflicted by the British at our insistence.” He added, “Substantial additional compensation for 18-25 past years of misery for all evictees is certainly in order. Even if that were to cost $100,000 per family, we would be talking of a maximum of $40-50 million, modest compared with our base investment there.”


Almost a quarter-century later, nothing has yet been done. In 2016, the initial 50-year agreement for Diego Garcia will expire. While it is subject to an automatic 20-year renewal, it provides for a two-year renegotiation period, which commenced in late 2014. With momentum building in support of the Chagossians, they are optimistic that the two governments will finally correct this historic injustice. That U.S. officials allowed the British feasibility study to consider resettlement plans for Diego Garcia is a hopeful sign that Anglo-American policy may finally be shifting to right a great wrong in the Indian Ocean.


Unfortunately, Aurélie Talate will never see the day when her people go home. Like others among the rapidly dwindling number of Chagossians born in the archipelago, Aurélie died in 2012 at age 70, succumbing to the heartbreak that is sagren.


David Vine is associate professor of anthropology at American University in Washington, D.C.



Rich Californians balk at limits: ‘We’re not all equal when it comes to water’

June 13,2015

by Rob Kuznia

Washington Post

RANCHO SANTA FE, CALIF. — Drought or no drought, Steve Yuhas resents the idea that it is somehow shameful to be a water hog. If you can pay for it, he argues, you should get your water.

People “should not be forced to live on property with brown lawns, golf on brown courses or apologize for wanting their gardens to be beautiful,” Yuhas fumed recently on social media. “We pay significant property taxes based on where we live,” he added in an interview. “And, no, we’re not all equal when it comes to water.”

Yuhas lives in the ultra-wealthy enclave of Rancho Santa Fe, a bucolic Southern California hamlet of ranches, gated communities and country clubs that guzzles five times more water per capita than the statewide average. In April, after Gov. Jerry Brown (D) called for a 25 percent reduction in water use, consumption in Rancho Santa Fe went up by 9 percent.

But a moment of truth is at hand for Yuhas and his neighbors, and all of California will be watching: On July 1, for the first time in its 92-year history, Rancho Santa Fe will be subject to water rationing.

It’s no longer a ‘You can only water on these days’ ” situation, said Jessica Parks, spokeswoman for the Santa Fe Irrigation District, which provides water service to Rancho Santa Fe and other parts of San Diego County. “It’s now more of a ‘This is the amount of water you get within this billing period. And if you go over that, there will be high penalties.’ ”

So far, the community’s 3,100 residents have not felt the wrath of the water police. Authorities have issued only three citations for violations of a first round of rather mild water restrictions announced last fall. In a place where the median income is $189,000, where PGA legend Phil Mickelson once requested a separate water meter for his chipping greens, where financier Ralph Whitworth last month paid the Rolling Stones $2 million to play at a local bar, the fine, at $100, was less than intimidating.

All that is about to change, however. Under the new rules, each household will be assigned an essential allotment for basic indoor needs. Any additional usage — sprinklers, fountains, swimming pools — must be slashed by nearly half for the district to meet state-mandated targets.

Residents who exceed their allotment could see their already sky-high water bills triple. And for ultra-wealthy customers undeterred by financial penalties, the district reserves the right to install flow restrictors — quarter-size disks that make it difficult to, say, shower and do a load of laundry at the same time.


In extreme cases, the district could shut off the tap altogether.

The restrictions are among the toughest in the state, and residents of Rancho Santa Fe are feeling aggrieved.

I think we’re being overly penalized, and we’re certainly being overly scrutinized by the world,” said Gay Butler, an interior designer out for a trail ride on her show horse, Bear. She said her water bill averages about $800 a month.


It angers me because people aren’t looking at the overall picture,” Butler said. “What are we supposed to do, just have dirt around our house on four acres?”

Rancho Santa Fe residents are hardly the only Californians facing a water crackdown. On Friday, the state said it would impose sharp cutbacks on senior water rights dating back to the Gold Rush for the first time in four decades, a move that primarily hits farmers. And starting this month, all of California’s 400-plus water districts are under orders to reduce flow by at least 8 percent from 2013 levels.

Top water users such as Rancho Santa Fe are required to cut consumption by 36 percent. Other areas in the 36-percent crosshairs include much of the Central Valley, a farming region that runs up the middle of the state, and Orange County, a ritzy Republican stronghold between San Diego and Los Angeles.

I call it the war on suburbia,” said Brett Barbre, who lives in the Orange County community of Yorba City, another exceptionally wealthy Zip code.

Barbre sits on the 37-member board of directors of the Metropolitan Water District of Southern California, a huge water wholesaler serving 17 million customers. He is fond of referring to his watering hose with Charlton Heston’s famous quote about guns: “They’ll have to pry it from my cold, dead hands.”

California used to be the land of opportunity and freedom,” Barbre said. “It’s slowly becoming the land of one group telling everybody else how they think everybody should live their lives.”

Jurgen Gramckow, a sod farmer north of Los Angeles in Ventura County, agrees. He likens the freedom to buy water to the freedom to buy gasoline.

“Some people have a Prius; others have a Suburban,” Gramckow said. “Once the water goes through the meter, it’s yours.”

Yuhas, who hosts a conservative talk-radio show, abhors the culture of “drought-shaming” that has developed here since the drought began four years ago, especially the aerial shots of lavish lawns targeted for derision on the local TV news.

“I’m a conservative, so this is strange, but I defend Barbra Streisand’s right to have a green lawn,” said Yuhas, who splits his time between Rancho Santa Fe and Los Angeles. “When we bought, we didn’t plan on getting a place that looks like we’re living in an African savanna.”

Others are embarrassed by such defiance. Parks of the Sante Fe Irrigation District said she was mortified when the report came out earlier this month showing that Rancho Santa Fe had increased its water use — the only community in the region to do so.


“I kind of take it personally,” she said last week as she toured the community in an SUV bearing the water district’s logo.


Parks said she doesn’t know exactly what happened, but she has heard rumors that some people jacked up their water use in a misguided attempt to increase their baseline before rationing kicks in. With sprinkler restrictions already in place, she said the dynamic between local gardeners and her small team of enforcers is getting interesting.

“Everyone seems now to know what our cars look like,” she said. In Fairbanks Ranch, a gated community, “whenever one of our trucks go in, the gardeners all seem to call each other — text-message each other — to let them know that we’ve arrived. So then all of a sudden we see water kind of draining off the property but no sprinklers on.”

Because the restrictions that took effect in September didn’t register, the district further tightened the screws this month. Sprinkler days were reduced from three a week to two, while car-washing and garden fountains were banned altogether.



Holly Manion, a real estate agent who has lived on the Ranch, as it’s often called, for most of her 62 years, supports the restrictions. Although Manion cherishes the landscape of manicured lawns and burbling fountains that has long defined the Ranch, she thinks the drought requires a new way of life that emphasizes water conservation.

“Just take a drive around the area. You’ll see lakes low, rivers dry and hillsides parched,” Manion said, adding that she is appalled by people who tolerate leaking sprinklers and the resulting cascades of wasted water.

“There are people, they aren’t being responsible,” she said. “They’re just thinking of their own lives.”

Ann Boon, president of the Rancho Santa Fe Association, insists that most residents are taking the drought seriously. She said she was shocked by the reported 9 percent increase, arguing that it “must be some anomaly.”

“Everybody has been trying to cut back,” she said.


For example, many Rancho Santa Fe residents have enthusiastically embraced drought-tolerant landscaping. Manion took advantage of a rebate to rip out much of the turf on her three-acre property and replace it with succulents and decomposed-granite pathways. She left only a small patch of grass for her two dogs to play on.

It makes me happy when I look at it, because it’s thriving,” she said.

Butler said she, too, is replacing grass with drought-friendly native landscaping on her four acres, at a cost of nearly $80,000. (She’ll get a rebate for about $12,000.) But she came to the decision grudgingly, she said. And she defends the amount of water she and her neighbors need for their vast estates.

You could put 20 houses on my property, and they’d have families of at least four. In my house, there is only two of us,” Butler said. So “they’d be using a hell of a lot more water than we’re using.”

Rancho Santa Fe resident Randy Woods was feeling burdened by his lush landscape and opted to downsize. The 60-something chief executive of a biotech company moved a year ago from a two-acre estate — replete with two waterfalls, two Jacuzzis, a swimming pool and an orchard — to a condo in the tiny core of town known as “the Village.”

Woods said some of his friends would like to do the same, largely to cut down on their bloated water bills. But they have encountered an unforeseen obstacle, he said: The drought has dampened demand for large estates in San ­Diego County.

Woods said his girlfriend is among those struggling to sell. Her home boasts a yard designed by Kate Sessions, a well-known landscape architect and botanist who died in 1940. But now, the rare palm tree specimens, the secret garden and the turret-shaped hedges are a liability rather than a selling point.

Another friend, Woods said, has seen the value of his nine-acre plot plummet from $30 million to $22 million.

As for Woods, his monthly water bill has shriveled from $500 to around $50.

“My friends,” he said, “are all jealous.”

Rancho Santa Fe resident Randy Woods was feeling burdened by his lush landscape and opted to downsize. The 60-something chief executive of a biotech company moved a year ago from a two-acre estate — replete with two waterfalls, two Jacuzzis, a swimming pool and an orchard — to a condo in the tiny core of town known as “the Village.”


Woods said some of his friends would like to do the same, largely to cut down on their bloated water bills. But they have encountered an unforeseen obstacle, he said: The drought has dampened demand for large estates in San ­Diego County.

Woods said his girlfriend is among those struggling to sell. Her home boasts a yard designed by Kate Sessions, a well-known landscape architect and botanist who died in 1940. But now, the rare palm tree specimens, the secret garden and the turret-shaped hedges are a liability rather than a selling point.

Another friend, Woods said, has seen the value of his nine-acre plot plummet from $30 million to $22 million.

As for Woods, his monthly water bill has shriveled from $500 to around $50.

“My friends,” he said, “are all jealous.”

By the numbers: US police kill more in days than other countries do in years

June 9, 2015

by Jamiles Lartey

The Guardian


It’s rather difficult to compare data from different time periods, according to different methodologies, across different parts of the world, and still come to definitive conclusions.


But now that we have built The Counted, a definitive record of people killed by police in the US this year, at least there is some accountability in America – even if data from the rest of the world is still catching up.


It is undeniable that police in the US often contend with much more violent situations and more heavily armed individuals than police in other developed democratic societies. Still, looking at our data for the US against admittedly less reliable information on police killings elsewhere paints a dramatic portrait, and one that resonates with protests that have gone global since a killing last year in Ferguson, Missouri: the US is not just some outlier in terms of police violence when compared with countries of similar economic and political standing.


Fact: In the first 24 days of 2015, police in the US fatally shot more people than police did in England and Wales, combined, over the past 24 years.


Behind the numbers: According to The Counted, the Guardian’s special project to track every police killing this year, there were 59 fatal police shootings in the US for the days between 1 January and 24 January.


According to data collected by the UK advocacy group Inquest, there have been 55 fatal police shootings – total – in England and Wales from 1990 to 2014.


The US population is roughly six times that of England and Wales. According to the World Bank, the US has a per capita intentional homicide rate five times that of the UK.


Fact: There has been just one fatal shooting by Icelandic police in the country’s 71-year history. The city of Stockton, California – with 25,000 fewer residents than all of Iceland combined – had three fatal encounters in the first five months of 2015.


Behind the numbers: A 2013 police shooting in Iceland drew international attention because it was the first of its kind; there had literally never been a fatal police shooting recorded there before two years ago.


In Stockton, Patrick Wetter, Matautu Nuu and Carl Lao were all fatally shot by police in the 64-day span between 6 January and 4 March. According to US census data from 2013, Stockton has a population of 298,118; World Bank data puts Iceland’s population at 323,764 for the same year.


Iceland’s official intentional homicide rate is so low that it does not register in World Bank data on intentional homicides per 100,000 people. For the US, the rate is five per 100,000.


Fact: Police in the US have shot and killed more people – in every week this year – than are reportedly shot and killed by German police in an entire year.


Behind the numbers: The Counted database shows that the first week of 2015 had the fewest fatal police shootings of any this year, with 13.


The German Police University concluded in 2012 that German police had killed six people by gunshot in 2011 and seven in 2012.


According to the German data and the Guardian’s count, more unarmed black men (19) have been fatally shot by US police in 2015 than citizens of any race, armed or unarmed, fatally shot in Germany during all of 2010 and 2011 (15).


The US population is roughly four times that of Germany, and according to the World Bank, the US has a per capita intentional homicide rate five times that of Germany.


Fact: Police in the US fatally shot more people in one month this year than police in Australia officially reported during a span of 19 years.


Behind the numbers: The Counted database shows that police in the US fatally shot 97 people in March 2015, the highest one-month total recorded by the Guardian.


A 2013 study from the Australian Institute of Criminology (AIC) found 94 fatal police shootings for the period between 1992 and 2011.


In Australia, as opposed to the US, all police shootings are subject to national monitoring by law. The US population is nearly 14 times that of Australia, and the US has a per capita intentional homicide rate five times that of Australia.


Fact: Police in Canada average 25 fatal shooting a year. In California, a state just 10% more populous than Canada, police in 2015 have fatally shot nearly three times as many people in just five months.


Behind the numbers: So far in 2015, police in California have fatally shot 72 people, according to the Guardian’s database – the most thorough accounting for officer-involved fatalities ever built in the US.


In Canada, reliable nationwide numbers on police shootings don’t yet exist.


But a journalist for the Independent in Canada did combine data from the provinces that report police killings – and extrapolated that Canadian police kill an average of 25 people by gunshot every year.


The US has an intentional homicide rate two and a half times that of Canada, according to the World Bank.


Fact: Police fired 17 bullets at Antonio Zambrano-Montes, who was “armed” with a rock. That’s nearly three times what police in Finland are reported to have fired during all of 2013.


Behind the numbers: Zambrano-Montes was killed in February by officers responding to reports that he was throwing rocks at cars. The incident was caught on video, with 17 shots fired; according to police, “five or six” struck Zambrano-Montes.


In Finland, according to chief inspector Jukka Salmine, police fired just six bullets in all of 2013.


Putin says Russia beefing up nuclear arsenal

June 16, 2015

by Maria Tsvetkova



President Vladimir Putin said on Tuesday Russia would add more than 40 new intercontinental ballistic missiles to its nuclear arsenal this year, a remark that is likely to increase alarm in the West.


Putin made his announcement a day after Russian officials denounced a U.S. plan to station tanks and heavy weapons in NATO states on Russia’s border as the most aggressive act by Washington since the Cold War.


Tension has resurged between Russia and Western powers over Moscow’s role in the Ukraine crisis, in which pro-Russian separatist forces have seized a large part of the country’s east after Russia annexed Crimea from Ukraine in early 2014.


The West, led by the European Union and United States, have imposed punitive economic sanctions on Russia.


“More than 40 new intercontinental ballistic missiles able to overcome even the most technically advanced anti-missile defense systems will be added to the make-up of the nuclear arsenal this year,” Putin, flanked by army officers, said in a speech at an arms fair west of Moscow.


Intercontinental ballistic missiles have a minimum range of more than 5,500 km (3,400 miles). Putin gave no more details of which missiles were being added to the nuclear arsenal.


He has said several times that Russia must maintain its nuclear deterrence to counter what he sees as growing security threats, and Moscow reserves the right to deploy nuclear weapons in Crimea.


Such comments have helped whip up anti-Western sentiment and rally support behind Putin but have caused concern in the West, particularly countries on or near Russia’s borders.





Russian officials warned on Monday that Moscow would retaliate if the United States carried out its plan to store heavy military equipment in eastern Europe, including in the Baltic states that were once in the Soviet Union.


“The feeling is that our colleagues from NATO countries are pushing us into an arms race,” RIA news agency quoted Deputy Defense Minister Anatoly Antonov as saying during “Army 2015”, a fair at which arms and other military equipment are on show.


Putin has said Moscow will not be drawn into a new arms race although Russia is modernizing its armed forces. Putin said in his speech that 70 percent of the military equipment in use would by 2020 be the most up-to-date and top-quality.


But lavish military spending is weighing heavily on Russia’s national budget at a time when the economy is sliding toward recession, hit by low oil prices and Western sanctions.


The Kremlin portrays spending on the Russian arms sector as a driver of economic growth, but Putin’s critics say it is excessive and comes at the expense of social needs.


(Additional reporting and writing by Gabriela Baczynska, Editing by Timothy Heritage and Mark Heinrich)


The new cold war

The Guardian


The Arctic


A last great unprotected wilderness, safe haven for endangered species and home to native people whose subsistence lifestyle has survived in harmony with nature for thousands of years.


It is here that Shell plans to drill for oil, pulling the detonator on a carbon bomb which eventually could spray 150bn tonnes of carbon dioxide into the atmosphere.


The irony is that the drilling is only possible because manmade climate change is already causing this region to grow warmer twice as fast as the rest of the planet. The melting ice makes these huge reserves of oil and gas more accessible.


It could set major oil companies against each other but also superpower against superpower as they scramble to exploit the last untapped giant reserves in a part of the world where territorial boundaries remain unclear. No wonder some fear a new cold war.


Barrow, the most northerly city in the US, is ground zero for the world’s most controversial oil drilling campaign. Less than 1,200 miles from the north pole, Barrow is also known as a base for climate change study.


Originally called Ukpeagvik, place where the snowy owls are hunted, the town of 4,500 residents was renamed in 1825 after Sir John Barrow of the British Admiralty by naval officers mapping the region for the UK.


Now a new British presence is being established by the Anglo Dutch Shell and it is also not one which is welcome by all, especially some of those who live in the tumble of wooden homes that hug the shoreline.


Rosemary Ahtuangaruak is one of them. She describes herself as an environmental justice adviser but is also a former mayor, trained health worker and stalwart defender of Inupiat culture.


I work with non­profit organisations that want to protect the Arctic Ocean and wilderness areas. It’s about raising the importance of health, tradition and culture in the venues of those (Shell and others) who want to change our lands and waters,” she says, one eye on three grandchildren she is minding.


It’s about the (any future oil) spill. They cannot clear up in ice conditions which we have for eight or nine months of the year. The ecosystem renewal, which is needed for the many different animals that migrate here, is important because we are feeding our families from the ocean. We must keep this environment pristine.”


The wild rose of the Tundra, as one critic labelled her, is convinced the subsistence way of life practised by the Inupiat could be extinguished for future generations in the event of oil pollution.


She says she has seen at close quarters what happens in a community that is subject to an oil rush. Although many outsiders presume that fossil fuel extraction is new to the northern shores of Alaska, the contrary is true.


BP and others have been producing oil at Prudhoe Bay down the coast east from Barrow for more than half century. But that is no reassurance to Ahtuangaruak who worked as a health aide – and briefly as mayor of the small village of Nuiqsut, an Inupiat community right next door to Prudhoe Bay.


I learned living in Nuiqsut there are some really serious health impacts that happen to our people living in the same area where this is happening (oil extraction): cancer rates have gone up … acute sensitivity to chemicals and even suicides. I had to deal with the sick babies. That’s why I argue so hard now.”


Shell is exploring its own small section of the far north but the US Geological Survey has estimated there could be 412bn barrels of oil equivalents reserves in the wider Arctic region.


The combined onshore and offshore acreage stretching across the top of the globe from Alaska through Greenland and Russia would be far more likely to be sought if Shell gets a good result in the Chukchi.


A successful strike by Anglo Dutch energy group will trigger a black gold rush to the wider polar region which is believed to hold the last remaining giant reserves in the world.


The US Geological Survey has estimated there is 30% of the world’s undiscovered gas and 13% of oil waiting to be found inside the Arctic circle.


A drop in the price of oil from $115 per barrel last summer to $65 now has forced oil companies – including Shell – to slash their annual capital spending.


But such is the lure of the Arctic for Shell that it has ring fenced this operation despite having spent $6bn on fruitless drilling so far.


And continuing interest in the mineral riches of the Arctic by Russia, Norway Greenland and others has brought sabre rattling: a significant build up in military spending and activity.


The Polish Institute of International Affairs (PISM) warned recently that Moscow is setting up a naval infantry brigade, an air defence division, and a coastal missile system, in outlying archipelagos in the Arctic Ocean.


The Ukraine crisis has ramped up tension – as has a provocative visit to the Svalbard archipelago in the Arctic by Russia’s deputy prime minister, Dmitry Rogozin.


All the states surrounding the Arctic Ocean are involved in a kind of land grab, applying for right to license oil and gas by making territorial claims under a UN Law of the Sea Treaty.


And the Russians have already signalled the importance they attach to the region by planting a flag on the bottom of the ocean at the north pole. The move by veteran Arctic explorer Artur Chilingarov in 2007 caused widespread protest from the rest of the world but Vladimir Putin laughed it off as a bit of theatre.


The Arctic Council of littoral states has been meeting regularly and played down any suspicions of a growing new cold war.


Rob Huebert, professor of political science at the University of Calgary, is worried: “The intrusions of unidentified submarine in Swedish and Finnish waters and aircraft incursions into Norwegian airspace demonstrates what they (the Russians) can do and it also demonstrates what the western nations now have to begin to prepare for.”


A long and boisterous queue snakes down the road from a blue wooden clapboard home in the strong spring sunshine.


The line of blue jeans and coloured anoraks is mainly made up of middle aged or young couples, their children playing in the snow in front of the house.


When the older members of the community arrive later on ­often propped up by relatives and walking frames­ they are immediately ushered to the front of the long line.


Suddenly the door opens and a smiling host greets the carnival like crowd. “Hey, hey hey,” he cries. “Hey, hey, hey,” they shout back as they begin to move through a side entrance from where a sweet but distinctive smell emanates. This is called a whale feast but it’s a relatively brief affair.


Within minutes the front door opens and the same visitors stream out clutching small plastic bags full of whale meat or skin and blubber, muktuk, and thanking the owner of the house.


That is Gordon Brower, a 52-year-old local whaling captain, who is performing a ritual central to the local Inupiat culture: hosting the entire “village” of Barrow to celebrate each successful hunt.


Whaling has been going on for centuries in this part of the world and the hundreds of residents who are involved in supporting the various crews tend to be at the centre of opposition to Shell’s Chukchi drilling programme.


Bowhead whales migrate in the spring and autumn in the Chukchi and Beaufort Seas off the coast of Barrow and the wider North Slope region. These enormous mammals stand to be disrupted most by oil.


Rosemary Ahtuangaruak argues that the whaling, which cannot by law be done on a commercial basis and which is heavily controlled by a quota system, is not just a cultural event. It is about survival in a town where supermarket food costs are astonishingly high as everything used or sold in Barrow has to be airlifted in.


Right now our people are out on the ice providing the nutritious food from the bowhead whale…We cannot replace those foods in our diet – not from shop foods out of a box,” she argues.


The Inupiat of northern Alaska are not alone in their worries about the future of their way of life.


This is a central issue too for the Inuit Circumpolar Council, which represents 160,000 indigenous peoples from Alaska, through Canada and Greenland to Russia.


Aqqaluk Lynge, the chairman of the Council, expressed his worst fears a few years ago when he said: “When I’m lying awake at night, I pray we don’t find oil.”


But not everyone in Barrow is gloomy. Many are aware that the local economy in the wider North Slope area has grown relatively prosperous on the back of half a century of hydrocarbons at Prudhoe Bay.


It is not unusual then to come across someone such as local carver Ron Saganna or Jake Calderwood, a 29-year-old, bushy­-bearded, music teacher at the local Fred Ipalook elementary school who are essentially supportive of drilling.


Standing most firmly against ‘big oil’ and local government is George Edwardson, a flamboyant and respected elder in the Inupiat community.


With white hair flowing down his back, a ready smile and a conspiratorial wink, George was, until health intervened, president of the Inupiat Community of the Arctic Slope for 20 years.


Shell is a bulldog that is acting on behalf of other foreign oil companies. It used to be BP until the Gulf of Mexico. Basically lease sale 193 (which gives Shell the right to acreage in the Chukchi) was illegal. The MMS (Minerals Management Service) violated the law because the right environmental impact assessments were not completed,” he says.


When Alaska was bought by the US government in the mid 1800s for $7.2m (£4.6m) critics called it Seward’s folly after the secretary of state who was accused of overpaying the Russians.


It is tempting to think that the decision by Washington to grant drilling rights to Shell in the waters off Alaska this month may yet become known as something worse: Mankind’s folly.


And those against big oil’s Arctic adventure are aware that any success by Shell will have major reverberations around the top of the world. ConocoPhillips and other oil companies are present in Barrow and interested in the icy waters.


Charlotte Brower, the mayor of the North Slope borough, is in the hot seat when it comes to the most basic conflict in Barrow and the surrounding villages: oil versus the environment.


She has little time for those who think oil companies should be stopped in their tracks saying all basic services in the form of schools, hospitals, roads and utilities have been paid for in oil-derived revenues from Prudhoe Bay.


There are parts of the world that have enjoyed these services for so long that the potential of living without them seems foreign, but among our people there are those of us who can still remember when some parents had to watch their children die in their arms because there was no clinic or medical staff to treat relatively simple ailments.”


Our leaders have worked diligently to strike a balance that ensures resource development to ensure our people do not have to endure these condition any longer while protecting our a pillar of our culture, our subsistence harvests. We will continue to strike that balance for the good of our people.”


Ben van Beurden, the chief executive of Shell, told the Guardian that he would not enter the Arctic unless it could be done safely although he dismissed as “emotional” suggestions Shell should stay away just because the region was showing advanced signs of climate change. “I have spent a lot of time on this and I think we can do it responsibly.”


However much the Dutchman dresses it up, Shell is taking a significant gamble on the environment – and his own company.


The Deepwater Horizon accident in the Gulf of Mexico has already cost BP $40bn and left it at one stage close to collapse.


While the Shell drilling in the Arctic is in shallower water and lower well pressures, the stakes are much higher. The reputational risks alone convinced Shell’s French rival Total that it should abandon any post-Macondo oil search in the Arctic.


Equally the mayor of Barrow is presiding over a community deeply divided over oil – even before the drilling starts.


Activists such as Rosemary Ahtuangaruak, tribal leaders such as George Edwardson and the whalers will continue to voice their opposition.


The most vulnerable potential victims of big oil – the migrating eider ducks, the whales, walruses, seals and polar bears – have no say.


The Great Mortgage Swindle: Countrywide, the Subprime Kings

Many factors combined to create the current housing crisis in the United States.

Low interest rates after the 2001 stock market crash spurred the housing boom. Housing prices skyrocketed above historic trendlines. People were duped into thinking prices would rise forever, but it was inevitable that the housing bubble would burst, and houses would suddenly be worth a lot less. With house prices falling, lots of people are now finding they owe more than their house is worth. This problem is exacerbated by predatory loan arrangements that have left millions facing suddenly rising mortgage payments.

A lot of people and corporations deserve blame for this state of affairs.

Instead of warning consumers about the housing bubble – which would have gone a long way to counter the excessive price run-ups – then-Federal Reserve Chair Alan Greenspan denied a bubble was occurring.

Wall Street firms created exotic investment instruments that made possible the purchase and trading of large numbers of mortgages. This created conditions so that banks and initial lenders took less care in issuing mortgages – since they wouldn’t be responsible for mortgages gone bad. The Wall Street firms not only sold these instruments to duped investors, they took on major liabilities on their own – even though it was obvious the housing bubble would have to burst.

Rating agencies like Moody’s and Standard & Poor’s, which evaluated the riskiness of these new mortgage investment instruments, failed utterly. The housing bubble meant mortgage investments were sure to lose money, but the ratings agencies gave them top ratings anyway. Along with the “innovation” of the Wall Street firms, the ratings agencies helped maintain a market that dramatically exacerbated, and to a considerable degree may have created, the housing bubble.

Financial bubbles create an incentive for criminal and shady activity. Just like the stock bubble of the late 1990s created the climate for Enron and dozens of other companies to cook their books, the housing bubble created incentives for predatory lenders to exploit consumers.

The predatory lenders offered low rates, at least at first. Rates would rise later, but the lenders said that – because home prices were rising so fast and would continue to do so – borrowers could always refinance with a new loan.

The biggest of the predatory lenders was Countrywide, a mortgage lender acquired by Bank of America in January 2008. The company and its CEO, Angelo Mozilo, made a bundle, while setting up thousands and thousands of families for financial ruin.

“Over the past few years,” says Martin Eakes of the Center for Responsible Lending, “by steering millions of people into bad loans, Countrywide has been the largest rogue mortgage lender in the country. According to Countrywide’s own data, more than 80 percent of its exotic adjustable-rate loans were made to borrowers that do not meet current banking standards. Countrywide knew that these homeowners would not be able to make their monthly loan payments after dramatic payment increases became effective.”

The Center for Responsible Lending has compiled a dossier on Countrywide’s irresponsible practices, presented in a report, “Unfair and Unsafe.” Its devastating report, based on customer complaints, lawsuits, regulatory actions, news accounts, government reports and company documents, shows how Countrywide engaged in rampant wrongdoing:

Predatory lending.

“Lawsuits filed around the country have accused Countrywide of preying on borrowers through a variety of unfair and fraudulent tactics that have siphoned equity out of their homes and pushed many into foreclosure,” notes “Unfair and Unsafe.” “Borrowers and regulators have accused the company of: steering borrowers with good credit into higher-cost ‘subprime’ loans; gouging minority borrowers with discriminatory rates and fees; working in cahoots with mortgage brokers who use bait-and-switch tactics to land borrowers into loans they can’t afford; targeting elderly and non-English-speaking borrowers for abusive loans; and packing loans with inflated and unauthorized fees.”

In one lawsuit, Albert Zacholl, a 74-year-old man living in Southern California, alleges that Countrywide and a pair of mortgage brokers “cold-called and aggressively baited” him. They promised him $30,000 cash, a mortgage that would replace his previous mortgage (which was leaving him owing more each month) and a monthly payment that would not exceed $1,700. Zacholl told the brokers that his income consisted of a pension of $350 a month and Social Security payments of $958, and that with help from his son, he could afford a mortgage up to $1,700. According to the lawsuit, the broker falsified his loan application by putting down an income of $7,000 a month, and then arranged for a high-interest mortgage that required him to pay more than $3,000 a month (and failed to deliver the $30,000 cash payment). The motivation for the scam, according to the lawsuit, was to collect $13,000 in fees.

In court papers, the Center for Responsible Lending reports, Countrywide responded that Zacholl “consented to the terms of the transaction” and that any problems were the result of his own “negligence and carelessness.”

Dangerous products.

Countrywide has been a leader in pushing unsound mortgage terms. These include “exploding” subprime adjustable rate mortgages – with reasonable interest rates in the first year that jump in subsequent years, often by as much as 30 percent to 50 percent.

Conflicts of interest.

“Countrywide has created a corporate structure designed to allow its subsidiaries to work hand-in-hand in squeezing borrowers with excessive fees and penalties,” according to “Unfair and Unsafe.” Countrywide affiliates handle appraisals, credit reports, flood certifications and other documentation for new loans; provide “force-placing” insurance for borrowers whose homeowners insurance has lapsed; and serve as a foreclosure trustee. The interconnections enable Countrywide to charge high fees, and deny borrowers the benefit of third parties’ independent judgment and independent interests.

Broken promises on loan modifications.

The company has a history of failing to fully live up to its promises to help borrowers keep their homes by modifying onerous loans, according to “Unfair and Unsafe.” The report cites a Fall 2007 Credit Suisse review that ranked Countrywide as one of the mortgage lenders least willing to adjust loan terms.

Countrywide says it is committed to working out fair arrangements to keep homeowners in their houses. In December, it entered into an arrangement with the community group ACORN designed to help subprime borrowers.

“During the first 11 months of 2007, Countrywide helped more than 69,000 customers retain their homes through solutions such as loan modifications, long-term repayment plans, special forbearance and other options,” says Steve Bailey, a Countrywide senior managing director of loan administration. “Regardless of the reason for the payment difficulties, Countrywide wants to try to find reasonable solutions for our borrowers.”

Abusive loan servicing.

Borrowers claim that Countrywide has engaged in sloppy and fraudulent loan servicing that has produced unwarranted fees and foreclosures.

With the collapse of the housing market in 2007, Countrywide’s fortunes turned, its mortgage-backed securities plummeted in value, and the company seemed on the edge of bankruptcy. In January 2008, Bank of America agreed to buy the company.

Do not weep for company co-founder and long-time CEO Angelo Mozilo, however. Mozilo grabbed compensation worth $185 million from 2002-2006, according to an analysis by the U.S. House of Representatives Committee on Oversight and Government Reform. Between November 2006 and December 2007, Mozilo sold $150 million in stock – effectively jumping from a sinking corporate ship for which he was supposedly at the helm, or at least on the captain’s deck.

“Particularly, the discrepancy between Mr. Mozilo’s compensation and Countrywide’s performance is striking,” concludes the Oversight Committee analysis. “In 2007, Countrywide announced a $1.2 billion loss in the third quarter and an additional loss of $422 million in the fourth quarter.” By the end of the year, the company’s stock fell 80 percent from its February peak. “During the same period, Mr. Mozilo was paid $1.9 million in salary, received $20 million in stock awards contingent upon performance, and sold $121 million in stock.”

Mozilo retired as CEO in 2006, remaining as company chair and an employee. The House Oversight Committee analysis shows that his compensation contract, taking effect in 2007, was outrageous, and based in part on recommendations from a compensation consultant loyal to Mozilo rather than Countrywide.

Even so, Mozilo was bitter that the company did not give him everything he wanted. In an e-mail message turned up by the Oversight Committee, Mozilo wrote to the compensation consultant:

“I appreciate your input but at this stage in my life at Countrywide this process is no longer about money but more about respect and acknowledgement of my accomplishments. … Boards have been placed under enormous pressure by the left wing anti business press and the envious leaders of unions and other so called ‘CEO Comp Watchers’ and therefore Boards are being forced to protect themselves irrespective of the potential negative long term impact on public companies. I strongly believe that a decade from now there will be a recognition that entrepreneurship has been driven out of the public sector resulting in underperforming companies and a willingness on the part of Boards to pay for performance.”

With attention focused on the discrepancy between Mozilo’s compensation package and Countrywide’s well-being, he waived various payments – totaling $37.5 million – he could have received once Bank of America finalizes its takeover.

In March 2008, Mozilo appeared before the House Oversight Committee to explain his compensation.

“Countrywide’s board,” he testified, “has aligned the interests of our top executives, including me, with shareholders by making our compensation primarily performance-based – namely, tied to earnings per share and share price appreciation. Since 1982 through early 2007, Countrywide’s stock appreciated over 23,000 percent, reaching a peak market value of over $25 billion from a starting value of zero. As a result, over recent years, I have received substantial income from bonuses under a formula that was approved by our shareholders on at least two occasions.”

He also received substantial stock options, explaining, these were “options that required the price of the stock to rise above the option price before any income could be realized, thereby aligning me squarely with our shareholders.” In anticipation of his retirement, he testified, he put in place a plan to cash in some stock options earned in earlier years. His sales were thus planned in advance of Countrywide’s downturn. But he continues to hold substantial shares in Countrywide – shares worth much less than before the company’s stock collapsed.

Mozilo testified that he is “very proud of the home ownership opportunities that Countrywide has provided for over 20 million families,” while acknowledging the hardship faced by homeowners and Countrywide employees and shareholders.

“In my 55 years in the industry,” he said, “this by far is the worst housing crisis I have ever seen, combined with an unprecedented collapse of the credit and liquidity markets.”

“The problem we face,” he said, “is the deterioration of the value of homes. As values were going up, we had no problem. We had no delinquencies and no foreclosures, because people had options, because people run into three things in their lives generally – loss of job, loss of marriage, loss of health. When that happens and they own a home, and it impacts their income, they generally have a way out – sell the house, refinance, do something.

“That equity that they have in their homes has been virtually wiped out. And that’s what’s exacerbating this whole foreclosure problem.”


Wasn’t that problem entirely foreseeable? Didn’t Countrywide’s lending policies – which generously might be called aggressive – depend on constantly rising housing values in what was obviously a bubble market?

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