TBR News September 26, 2011

Sep 26 2011

The Voice of the White House


            Washington, D.C., September 25, 2011: “There have been questions about the non-appearance of this newsletter.

            For the last three weeks I have been staying with an old friend down in the Caribbean while he, and others, debriefed a defecting Israeli Mossad agent. It has been a most enlightening time and aside from the negativity of a sunburn,

            I have learned more about Israel’s espionage and political manipulations in this country than I could have from getting squinty-eyed reading through hundreds of allegedly “inside” blogs. If the American public ever got wind of the degree and extent to which Israel controls our government, the sky would be filled with thick clouds of smoke from burning synagogues and the trees in our parks would be laden with strange fruit.

            And about half of Congress would be in full flight to foreign parts to avoid the public wrath.It boils down to this” What Israel wants, Israel gets. Almost always. Israel, afraid of Hezbollah’s huge number of Russian-made surface-to-surface missiles, had been ordering our government to carpet bomb all of southern Lebanon to disrupt possible (note the word ‘possible’ here) missile storage and potential launching sites.

            That was too much for almost everyone inside the Beltway so it got turned down, along with period demands for America to nuke Tehran and prevent the Iranians from possibly bombing Israel. That country feels that because of their political, and to a lesser degree, economic control here, way out of proportion to their relatively small numbers, that America is a necessary evil that will always, almost without exception, do all of Israel’s dirty work for her.

            But now, with time and the tides turning against her, Israel is becoming hysterical and manic in her demands. Once friendly allies Turkey and Egypt have turned against Israel and her borders are no longer secure from the north or the south. Obama was summarily ordered to threaten Egypt with military action when huge mobs of furious Egyptians sacked the Israeli embassy in Cairo and the Turkish threat of support of the Gaza relief convoys was to be interdicted, physically, by elements of the U.S. Navy.

            The Navy is not going to shoot up the military ships of country America needs for her military bases so Israel is casting about for more areas in which she can force actions favorable to herself but highly damaging to American interests. I suppose all of this will “leak” out when anti-Israeli elements in our military and civilian sectors get their hands on the hundreds of pages of fascinating transcripts. Israel should realize that a wheel always turns and that which is at the top today will surely be at the bottom tomorrow.”



American poverty levels hit record high

Numbers grow for a third year, to 15.1%, with 46 million people impoverished – the highest rate since 1993

September 14, 2011


A record 46 million Americans were living in poverty in 2010, pushing the US poverty rate to its highest level since 1993, according to a government report on the grim effects of stubbornly high unemployment.

Underscoring the economic challenges that face President Barack Obama and Congress, the US census bureau said the poverty rate rose for a third consecutive year to hit 15.1% in 2010. The number of people in poverty was the largest since the government first began publishing estimates, in 1959.

The report surfaces at a time when the economic straits of ordinary Americans are at the forefront of the 2012 election campaign.

Obama is suffering from low job approval ratings on the economy, and evidence of rising poverty could give popular momentum to the $450bn job-creation programme he unveiled last week.

The census data could also come into play in the deliberations of a bipartisan super committee in Congress, which has been charged with finding at least $1.2 trillion in budget savings over 10 years by 23 November.

The US has the highest poverty rate among developed countries, according to the Paris-based Organisation for Economic Cooperation and Development (OECD).

The poverty line for a US family of four, including two children, is an income of $22,113 (£14,062) a year.

The data showed that children under 18 suffered the highest poverty rate – 22% – compared with adults and the elderly.

In a sign of decline for middle-income Americans, the figures showed continued decline in the number of Americans with employer-provided health insurance, while the ranks of the uninsured hovered just below the 50 million mark.

Underlying the census data was a rate of economic growth too meagre to compensate for the loss of hundreds of thousands of jobs from 2009 to 2010, as the recession officially ended but the jobless rate rose from 9.3% to 9.6%.

“All of this deterioration in the labour market caused incomes to drop, poverty to rise and people to lose their health insurance,” said Heidi Shierholz of the Economic Policy Institute thinktank. “One of the immediately obvious issues this brings up is that there is no relief in sight.”

The numbers would have been worse, analysts said, but for government assistance programmes, including extended unemployment compensation, stimulus spending and Obama’s health reforms, which appeared to have reduced the number of uninsured young adults.

In Obama’s hometown of Chicago, Salvation Army Major David Harvey knows well the effects of grinding poverty on the city’s south side, where he attended a food giveaway on Tuesday.

“There are more families falling into poverty,” he said. “That’s multiplied on the south side of Chicago, where there are pockets with 20%, or more, unemployment.

“You’ve got people crying for jobs. They move out of state to get jobs because employers are leaving because of the tax increases here.”

The poverty rate increased for non-Hispanic whites, black people and Hispanics but did not differ significantly for Asians. Black people and Hispanics together accounted for 54% of the poor, with whites at 9.9% and Asians at 12.1%.

The south fared worst among US regions, recording the highest poverty rate, a significant drop in median income and the largest number of residents without health insurance.

Broken down by state, Mississippi had the highest share of poor people, at 22.7%, according to calculations by the census Bureau. It was followed by Louisiana, the District of Columbia, Georgia, New Mexico and Arizona. At the other end of the scale, New Hampshire had the lowest share, at 6.6%.

The administration was quick to seize on data showing a 2.1% drop in uninsured young adults aged 18 to 24 as evidence that families were benefiting from an Obama healthcare reform that allows parents to extend their coverage to children as old as 25.

The Affordable Care Act is the centerpiece of Obama’s domestic policy agenda but it has come under fierce attack from Republicans, including presidential candidates who hope to challenge the president in the 2012 general election.

“We expect even more will gain coverage in 2011 when the policy is fully phased in,” the health and human services secretary, Kathleen Sebelius, said in a blog posting.

Worlds apart – the neighbourhoods that sum up a divided America

The contrasting fortunes of New York’s South Bronx and Upper East Side highlight a growing gap between rich and poor

September 17, 2011

by Paul Harris in New York

The Observer/UK

They are barely a mile apart, separated by a few gritty streets and a thin muddy stretch of water known as the Harlem river. They are in the same city and have experienced the same recession.

            But New Yorkers living in the city’s 14th and 16th congressional districts – electoral districts with populations of around 600,000 each – often occupy completely different worlds. Their lives provide a shocking example of growing inequality in America, where the rich are leaving a growing mass of the poor completely behind.

            The numbers are stark enough. Last week a census report revealed that 46 million Americans live in poverty, the highest number ever recorded. At the same time, the richest 20% of Americans control 84% of the country’s wealth. Indeed, just 400 families have the same net worth as the total of the bottom 50%. America’s Gini coefficient – which measures inequality of income distribution – now nears that of Rwanda.

            The Gini figure is just a number – but to walk the streets of the 14th and 16th districts is to see that story of growing inequality in terms of people living almost next to each other but separated by education, job prospects, health, race and class.

            The 14th occupies a chunk of Manhattan and Queens. Not all of it is wealthy, but at its heart lies the Upper East Side, by Central Park, a neighbourhood that is home to New York‘s moneyed classes. It is here that the titans of finance, whose recklessness brought on the near collapse of the American economy, live and play. They raise their families in gigantic apartments, send their children to the best private schools and patronise the pricey bistros that dot the street corners. Old money New York has long considered the Upper East Side its natural home, viewing Central Park as its backyard and Manhattan as a private playground.

            The same cannot be said of the 16th. That district spans the South Bronx. It has been occupied by waves of immigrants, now mainly Hispanics from Mexico, the Dominican Republic and Puerto Rico, plus black Americans heading out of the south or fleeing higher rents in gentrifying Harlem. It is rife with gangs, drugs and crime. Well-paid jobs are scarce.

            To travel between the two districts is to go from a world of unimaginable luxury to one of fear and poverty. It takes about 10 minutes on the subway.

            Felix Santiago, 51, has certainly felt the impact of the great recession on the 16th district. He arrived from Puerto Rico 30 years ago and made a home when the neighbourhood was scarred by the drug epidemic and racial troubles of the 1970s and 1980s. Now he sees it going downhill again. “If you live in this neighbourhood, you are poor. If you try to be middle class, you just can’t do it,” he said.

            Santiago has tried. He works as a handyman in a local church; his daughter joined the US Marines. But he struggles as rents and food prices go up. He shook his head at the idea that America’s economy has recovered since the financial crisis. In the South Bronx, he said, it is still getting worse. “I think this year has been the real critical one. There is no work. Prices are going up. It is getting ridiculous.”

            Life is definitely hard in the 16th compared with the 14th. Life expectancy is three years lower in the South Bronx than on the Upper East Side. The median household income of $23,000 (£14,500) in the 16th is barely above the official poverty level. In the South Bronx, nearly 40% of people live below the poverty line; in the 14th, the figure is less than 10%.

            The murder rate is four times higher in the 16th and the number of robberies more than twice as high. There are 90 Starbucks coffee shops in the 14th. There is just one in the 16th.

            Just a few blocks away from where Santiago works are some of the toughest streets in the Bronx. On one corner, even though it is barely 10am, police have a lookout post on top of a mobile crane. It looks eerily like a medieval watch tower. Nor does it stop drug dealers from plying their trade nearby, though Santiago warned that times are tough for them too. “There is no money for people to spend on drugs,” he said, blaming that for a spate of muggings as frustrated dealers turn to robbery. Local shops sell cheap clothes and corner stores accept food stamps. It would be suicide not to. The use of food stamps in the US has risen by 75% in the past four years and now covers 15% of the population.

            But if you hop on the number 6 subway line and travel a few stops south to the Upper East Side, food stamps are not an issue. The streets are crowded, luxury shops sell the latest fashions and French restaurants are doing a roaring trade. There is anger at the recession here, too. Certainly Sam Durant is furious. He runs a high-end jewellery store on Madison Avenue and his trade is down as Wall Street bankers are now often paid bonuses in stocks not cash.

            Durant knows where the blame lies. “People are not spending,” he said “That asshole in the White House has taken away their bonuses. He doesn’t want them to have what he doesn’t have,” he said. His disapproval of Barack Obama is fierce. “He’s the most hated president in history, did you know that?” he said.

            Politics inspires worry in the South Bronx, too. But in a different way. In St Ann’s church, the Rev Martha Overall watched last week’s Republican debate in dismay, especially the attacks on government. She fears the impact that enormous government cuts are already having, let alone the sort that any Republican president might bring in. “It’s social Darwinism. It’s people being pitted against people. I also believe it is un-American. I don’t believe this country was founded on a sense of every man for himself. It was founded on community,” Overall said.

            Rather than fretting over Wall Street bonuses, Overall is scared about reports that the local post office, a major employer in the area, might shut “It is also kind of a social centre here,” she said.

            “Don’t walk across the park,” warned Santiago, referring to St Mary’s Park in the South Bronx. Such sentiments are rarely voiced on the Upper East Side about Central Park. Last week it was its usual haven, packed with young mothers and their children and, more frequently, with dark-skinned nannies wheeling white children around.

            One young mother, who gave her name as Ally, said the recession had hit the neighbourhood. Her husband worked in finance and, while he had kept his job, things had been nerve-racking. “It’s not been easy. You don’t feel you have security and so you watch your spending,” she said.

            But in general the finance industry is roaring again. Last year the ratio of wage bills to company earnings rose at 10 out of 16 major US and European banks. This year again will see bonuses worth hundreds of thousands of dollars for many and millions of dollars for the lucky few. Such payouts fuel the Upper East Side property market.

            A glance at an estate agent’s display on Madison Avenue revealed a townhouse going for $26m. Prefer to rent? Another could be had for $58,000 a month. Even a modest-looking two-bedroom apartment cost $1.9m. On 75th Street, one opulent mansion has just been sold by financier Christopher Flowers for $36.5m (he had left the property empty for the past couple of years).

            It is a different picture a few miles away. There are vacant properties in the Bronx, but they tend to be derelict. Yet there are links between the two neighbourhoods. Overall is one herself. She is from the Upper East Side but works with church groups in what she calls “the other congressional district”.

            St Ann’s welcomes volunteers from the Upper East Side and schools operate exchange programmes. But on the whole, the people of the South Bronx pay little attention to the people of the Upper East Side and vice versa. Both are too busy with their own concerns.

            Mike Manigault, 21, came here from South Carolina. He had just got a precious job at the Fat Boy Barber Shop. He was glad his year-long quest to find work had ended, even if he was just sweeping up hair. “It’s tough, but you just do what you got to do. You either quit or you keep trying,” he said.

            And as for life as it’s lived on the Upper East Side? He shrugged. He has never been there.

Logistics of Denial

September 16, 2011

by Michael Pettis

Market Oracle

            Slow growth is embedding itself solidly into the US economy and the bond mayhem in Europe continues. The external environment for China is getting worse. This will almost certainly make China’s adjustment – when Beijing finally gets serious about it – all the more difficult.
            With still weak domestic consumption growth, and little chance of this changing any time soon, weaker foreign demand for Chinese exports will cause greater reliance than ever on investment growth to generate GDP growth.
            Europe’s travails in particular can’t be good for exports. What’s worse, it’s now pretty much official that the euro will fail soon enough. We have this on no less an authority than Angela Merkel. Here is what Thursday’s Financial Times says: Merkel Promises Euro Will Not Fail

            Angela Merkel, German chancellor, declared on Wednesday that “the euro will not fail” after the country’s powerful constitutional court rejected a series of challenges to the multibillion-euro rescue packages agreed last year for Greece and other debt-strapped members of the eurozone.
            In a passionate restatement of Germany’s determination to defend the common currency, the chancellor welcomed the court’s judgment as “absolutely confirming” her government’s policy of “solidarity with individual responsibility”.

First Rule of Politics

            No, I didn’t misread the article. I just have a very different understanding of the logistics of a denial. Last year, for example, I wrote on my blog about ferocious denials by both Spain and Portugal that they would need any official help in funding themselves. But according to one of my favorite British television comedies, Yes, Minister, an official denial means something very different from what is intended.
            “The first rule of politics,” Sir Humphrey, the wily civil servant in the show, insists is: “never believe anything until it is officially denied.”
            I don’t want to sound too glib or too jokey, but I wonder if there has ever been a forced devaluation that wasn’t preceded by ringing assertions from presidents and central bank governors that under no circumstance would the currency ever devalue.
            What is all the more interesting is that I recently discovered that the quote “never believe anything until it is officially denied” doesn’t originate with the writers of the British TV comedy. Apparently it can be traced to at least as far back as Otto von Bismarck, who was born not too far from where Angela Merkel grew up. Never believe anything until it is officially denied, the Iron Chancellor warned us.

An Interesting Proposal

            So if Germany’s Iron Lady is now denying that the euro will fail, can its failure be far off? It depends I guess on what we mean by failure. If any important reversal in the structure and membership of the euro is a failure, then it will almost certainly fail, but I suppose there are many ways the euro project can be transformed without quite calling it a failure.
            At the end of last month Hans-Olaf Henkel, for example, the former head of the Federation of German Industries, had an interesting OpEd in the Financial Times. In Sceptic’s Solution he says:

            Having been an early supporter of the euro, I now consider my engagement to be the biggest professional mistake I ever made. It would be misleading to proclaim there is an easy way out. But it is irresponsible to maintain there is no alternative. There is.
            The end result of plan “A” – “defend the euro at all cost” – will be detrimental to all. Rescue deals have led the eurozone on the slippery path to the irresponsibility of a transfer union. If everybody is responsible for everybody’s debts, no one is. Competition between politicians in the eurozone will focus on who gets most at the expense of the others. The result is clear: more debts, higher inflation and a lower standard of living. The eurozone’s competitiveness is bound to fall behind other regions of the world.
            As a plan “B” George Soros suggests that a Greek default “need not be disorderly”, or result in its departure from the eurozone. But a Greek default or departure from the eurozone implies risks too high to take. First in Athens, then Lisbon, Madrid and perhaps Rome, people would storm the banks as soon as word got out. A “haircut” would not improve Greece’s competitiveness either. Soon, the Greeks will have to go to the barber again. Anyway, we now talk also about Portugal, Spain, Italy and, I am afraid, soon France.
            That is why we need a plan “C”: Austria, Finland, Germany and the Netherlands to leave the eurozone and create a new currency leaving the euro where it is. If planned and executed carefully, it could do the trick: a lower valued euro would improve the competitiveness of the remaining countries and stimulate their growth. In contrast, exports out of the “northern” countries would be affected but they would have lower inflation. Some non-euro countries would probably join this monetary union. Depending on performance, a flexible membership between the two unions should be possible.

I think Henkel is right, although I think the likelihood of Europe’s adopting his Plan C is pretty small. Still, it is interesting to consider why he might be right.

Damned Either Way

            The problem is that if Spain leaves the euro and returns to the peseta, it will be caught in a downward currency spiral like the ones suffered by Mexico in 1982 and 1994 and Korea in 1997. In both cases the currency plunged by far more than the amount of its theoretical overvaluation. This happened because a substantial portion of Mexican and Korean debt was denominated in foreign currency. Of course once Spain revives the peseta, it will be in a similar position – with a lot of its debt denominated in euros, which will become a foreign currency.
            What does external debt have to do with the extent of the devaluation? Quite a lot, it turns out. Mexico and Korea (and a host of others examples) remind us that when a country is forced to devalue, the amount of the devaluation is not necessarily in line with estimates of the amount of overvaluation.
            I would argue that Spain probably suffers from 15-20% overvaluation, but once Spain returns to the peseta the peseta will not devalue by that amount. It will devalue by at least 50%, and probably a lot more. Why? Because of the self-reinforcing relationship between the currency and external debt.
            It always works the same way when a country with a lot of external debt devalues its currency. As the peseta devalues, Spain’s external debt will rise in tandem since it is denominated in the appreciating currency. Since Spain is already believed to be overly indebted, as the debt rises relative to domestic assets, Spanish credibility will decline quickly and financial distress costs will rise.
            But of course as credibility declines and defaults rise, the peseta will drop even more as investors flee the currency and as domestic borrowers with euro-denominated debt try to hedge the currency risk. This will go on in a self-reinforcing way until the currency has been crushed. In the end, for Spain to leave the euro would probably cause its external debt to more than double – perhaps even triple – as the peseta falls. Of course it will be forced into default within days or weeks.
            This, by the way, is not an argument for Spain to stay in the euro. If Spain stays in the euro we will still arrive at default, but much more slowly, and mainly at first through a grinding away of wages and economic growth over many, many years and a gradual building up of debt as Germany refinances Spanish debt at interest rates that exceed GDP growth rates. The default will occur anyway, but only after years of high unemployment.
            This is why I think Henkel’s proposal makes sense. Rather than have Spain leave the euro, Germany can leave the euro. The new German currency would automatically appreciate and the euro would depreciate, but without the terrible debt dynamics, the adjustment in the currency value would be much closer to the theoretically correct adjustment. The relative adjustment would probably be in the 20% range rather than in the 50% range.
            Of course German banks would still have a problem. Their deposits would be in the form of the new German currency, and a lot of their loans – all those to Spain, for example – would be in the depreciating euro, and so they would take large losses. But at least the losses will be less – and more importantly the process will be more orderly – than if Spain simply leaves the euro and defaults.
            One way or the other Germany is going to take a pretty big hit. It is a complete waste of time trying to figure out how to avoid it. It would be far more constructive to resolve the problem as quickly as possible in as orderly a manner as possible, and as any good Minskyite would tell you, that means we have to pay special attention to the balance sheet dynamics. That’s why I think Henkel’s proposal is an interesting one.
            Of course the really interesting thing about Henkel’s proposal (at least to me) is to figure out what decision France would make if something like this happened. If France remained within the euro (i.e. “peripheral” Europe in Henkel’s scenario), the possibility of a United States of Europe would be forever dashed, but it would almost certainly be replaced with a two-entity Europe – the United States of Germany and the United States of France, or perhaps, for those who like 19th Century monetary history, the new Zollverein and the new Latin Union.

It’s the Occupation, Stupid
The State to Which the U.N. May Grant Membership Is Disappearing

September 22, 2011

by Sandy Tolan


It’s the show that time and the world forgot. It’s called the Occupation and it’s now in its 45th year. Playing on a landscape about the size of Delaware, it remains largely hidden from view, while Middle Eastern headlines from elsewhere seize the day.  Diplomats shuttle back and forth from Washington and Brussels to Middle Eastern capitals; the Israeli-Turkish alliance ruptures amid bold declarations from the Turkish prime minister; crowds storm the Israeli Embassy in Cairo, while Israeli ambassadors flee the Egyptian capital and Amman, the Jordanian one; and of course, there’s the headliner, the show-stopper of the moment, the Palestinian Authority’s campaign for statehood in the United Nations, which will prompt an Obama administration veto in the Security Council.

But whatever the Turks, Egyptians, or Americans do, whatever symbolic satisfaction the Palestinian Authority may get at the U.N., there’s always the Occupation and there — take it from someone just back from a summer living in the West Bank — Israel isn’t losing.  It’s winning the battle, at least the one that means the most, the one for control over every square foot of ground.  Inch by inch, meter by meter, Israel’s expansion project in the West Bank and Jerusalem is, in fact, gaining momentum, ensuring that the “nation” that the U.N. might grant membership will be each day a little smaller, a little less viable, a little less there.

How to Disappear a Land

On my many drives from West Bank city to West Bank city, from Ramallah to Jenin, Abu Dis to Jericho, Bethlehem to Hebron, I’d play a little game: Could I travel for an entire minute without seeing physical evidence of the occupation?  Occasionally — say, when riding through a narrow passage between hills — it was possible.  But not often.  Nearly every panoramic vista, every turn in the highway revealed a Jewish settlement, an Israeli army checkpoint, a military watchtower, a looming concrete wall, a barbed-wire fence with signs announcing another restricted area, or a cluster of army jeeps stopping cars and inspecting young men for their documents.

The ill-fated Oslo “peace process” that emerged from the Oslo Accords of 1993 not only failed to prevent such expansion, it effectively sanctioned it.  Since then, the number of Israeli settlers on the West Bank has nearly tripled to more than 300,000 — and that figure doesn’t include the more than 200,000 Jewish settlers in East Jerusalem.

The Oslo Accords, ratified by both the Palestinians and the Israelis, divided the West Bank into three zones — A, B, and C.  At the time, they were imagined by the Palestinian Authority as a temporary way station on the road to an independent state.  They are, however, still in effect today.  The de facto Israeli strategy has been and remains to give Palestinians relative freedom in Area A, around the West Bank’s cities, while locking down “Area C” — 60% of the West Bank — for the use of the Jewish settlements and for what are called “restricted military areas.”  (Area B is essentially a kind of grey zone between the other two.)  From this strategy come the thousands of demolitions of “illegal” housing and the regular arrests of villagers who simply try to build improvements to their homes.  Restrictions are strictly enforced and violations dealt with harshly.

When I visited the South Hebron Hills in late 2009, for example, villagers were not even allowed to smooth out a virtually impassable dirt road so that their children wouldn’t have to walk two to three miles to school every day. Na’im al-Adarah, from the village of At-Tuwani, paid the price for transporting those kids to the school “illegally.” A few weeks after my visit, he was arrested and his red Toyota pickup seized and destroyed by Israeli soldiers.  He didn’t bother complaining to the Palestinian Authority — the same people now going to the U.N. to declare a Palestinian state — because they have no control over what happens in Area C.

The only time he’d seen a Palestinian official, al-Adarah told me, was when he and other villagers drove to Ramallah to bring one to the area.  (The man from the Palestinian Authority refused to come on his own.) “He said this is the first time he knew that this land [in Area C] is ours.  A minister like him is surprised that we have these areas?  I told him, ‘How can a minister like you not know this?  You’re the minister of local government!’

“It was like he didn’t know what was happening in his own country,” added al-Adarah.  “We’re forgotten, unfortunately.”

The Israeli strategy of control also explains, strategically speaking, the “need” for the network of checkpoints; the looming separation barrier (known to Israelis as the “security fence” and to Palestinians as the “apartheid wall”) that divides Israel from the West Bank (and sometimes West Bankers from each other); the repeated evictions of Palestinians from residential areas like Sheikh Jarrah in East Jerusalem; the systematic revoking of Jerusalem IDs once held by thousands of Palestinians who were born in the Holy City; and the labyrinthine travel restrictions which keep so many Palestinians locked in their West Bank enclaves.

While Israel justifies most of these measures in terms of national security, it’s clear enough that the larger goal behind them is to incrementally take and hold ever more of the land.  The separation barrier, for example, has put 10% of the West Bank’s land on the Israeli side — a case of “annexation in the guise of security,” according to the respected Israeli human rights group, B’tselem.

Taken together, these measures amount to the solution that the Israeli government seeks, one revealed in a series of maps drawn up by Israeli politicians, cartographers, and military men over recent years that show Palestine broken into isolated islands (often compared to South African apartheid-era “bantustans”) on only about 40% of the West Bank.  At the outset of Oslo, Palestinians believed they had made a historic compromise, agreeing to a state on 22% of historic Palestine — that is, the West Bank and Gaza.  The reality now is a kind of “ten percent solution,” a rump statelet without sovereignty, freedom of movement, or control of its own land, air, or water. Palestinians cannot even drill a well to tap into the vast aquifer beneath their feet.

Living Amid Checkpoints, Roadblocks, and Night Raids

Almost always overlooked in assessments of this ruinous “no-state solution” is the human toll it takes on the occupied. More than on any of my dozen previous journeys there, I came away from this trip to Palestine with a sense of the psychic damage the military occupation has inflicted on every Palestinian.  None, no matter how warm-hearted or resilient, escape its effects.

“The soldier pointed to my violin case.  He said, ‘What’s that?'” 13-year-old Alá Shelaldeh, who lives in old Ramallah, told me.  She is a student at Al Kamandjati (Arabic for “the violinist”), a music school in her neighborhood (which will be a focus of my next book). She was recalling a time three years earlier when a van she was in, full of young musicians, was stopped at an Israeli checkpoint near Nablus. They were coming back from a concert.  “I told him, ‘It’s a violin.’  He told me to get out of the van and show him.”  Alá stepped onto the roadside, unzipped her case, and displayed the instrument for the soldier.  “Play something,” he insisted.  Alá played “Hilwadeen” (Beautiful Girl), the song made famous by the Lebanese star Fayrouz.  It was a typical moment in Palestine, and one she has yet to, and may never, forget.

It is impossible, of course, to calculate the long-term emotional damage of such encounters on children and adults alike, including on the Israeli soldiers, who are not immune to their own actions.

Humiliation at checkpoints is a basic fact of West Bank Palestinian life.  Everyone, even children, has his or her story to tell of helplessness, fear, and rage while waiting for a teenaged soldier to decide whether or not they can pass.  It has become so normal that some kids have no idea the rest of the world doesn’t live like this. “I thought the whole world was like us — they are occupied, they have soldiers,” remembered Alá’s older brother, Shehade, now 20.

At 15, he was invited to Italy.  “It was a shock for me to see this life.  You can go very, very far, and no checkpoint.  You see the land very, very far, and no wall.  I was so happy, and at the same time sad, you know?  Because we don’t have this freedom in my country.”

At age 12, Shehade had seen his cousin shot dead by soldiers during the second intifada, which erupted in late 2000 after Israel’s then-opposition leader Ariel Sharon paid a provocative visit to holy sites in the Old City of Jerusalem.  Clashes erupted as youths hurled stones at soldiers. Israeli troops responded with live fire, killing some 250 Palestinians (compared to 29 Israeli deaths) in the first two months of the intifada. The next year, Palestinian factions launched waves of suicide bombings in Israel.

One day in 2002, Shehade recalled, with Ramallah again fully occupied by the Israeli army, the young cousins broke a military curfew in order to buy bread.  A shot rang out near a corner market; Shehade watched his cousin fall.  This summer Shehada showed me the gruesome pictures — blood flowing from a 12-year-old’s mouth and ears — taken moments after the shooting in 2002.

Nine years later, Ramallah, a supposedly sovereign enclave, is often considered an oasis in a desert of occupation.  Its streets and markets are choked with shoppers, and its many trendy restaurants rival fine European eateries.  The vibrancy and upscale feel of many parts of the city give you a sense that — much as Palestinians are loathe to admit it – this, and not East Jerusalem, is the emerging Palestinian capital.

Many Ramallah streets are indeed lined with government ministries and foreign consulates.  (Just don’t call them embassies!)  But much of this apparent freedom and quasi-sovereignty is illusory.  In the West Bank, travel without hard-to-get permits is often limited to narrow corridors of land, like the one between Ramallah and Nablus, where the Israeli military has, for now, abandoned its checkpoints and roadblocks.  Even in Ramallah — part of the theoretically sovereign Area A — night incursions by Israeli soldiers are common.

“It was December 2009, the 16th I think, at 2:15, 2:30 in the morning,” recalled Celine Dagher, a French citizen of Lebanese descent. Her Palestinian husband, Ramzi Aburedwan, founder of Al Kamandjati, where both of them work, was then abroad.  “I was awakened by a sound,” she told me.  She emerged to find the front door of their flat jammed partway open and kept that way by a small security bar of the sort you find in hotel rooms.

Celine thought burglars were trying to break in and so yelled at them in Arabic to go away.  Then she peered through the six-inch opening and spotted 10 Israeli soldiers in the hallway.  They told her to stand back, and within seconds had blown the door off its hinges.  Entering the apartment, they pointed their automatic rifles at her.  A Palestinian informant stood near them silently, a black woolen mask pulled over his face to ensure his anonymity. 

The commander began to interrogate her. “My name, with whom I live, starting to ask me about the neighbors.” Celine flashed her French passport and pleaded with them not to wake up her six-month-old, Hussein, sleeping in the next room. “I was praying that he would just stay asleep.” She told the commander, “I just go from my house to my work, from work to my house.”  She didn’t really know her neighbors, she said.

As it happened, the soldiers had blown off the door of the wrong flat.  They would remove four more doors in the building that night, Celine recalled, before finding their suspect: her 17-year-old next door neighbor.  “They stood questioning him for maybe 20 minutes, and then they took him.  And I think he’s still in jail.  His father is already in jail.”

According to Israeli Prison Services statistics cited by B’tselem, more than 5,300 Palestinians were in Israeli prisons in July 2011.  Since the beginning of the occupation in 1967, an estimated 650,000 to 700,000 Palestinians have reportedly been jailed by Israel.  By one calculation, that represents 40% of the adult-male Palestinian population.  Almost no family has been untouched by the Israeli prison system.

Celine stared through the blinds at the street below, where some 15 jeeps and other military vehicles were parked.  Finally, they left with their lights out and so quietly that she couldn’t even hear their engines.  When the flat was silent again, she couldn’t sleep.  “I was very afraid.”  A neighbor came upstairs to sit with her until the morning.

Stories like these — and they are legion — accumulate, creating the outlines of what could be called a culture of occupation.  They give context to a remark by Saleh Abdel-Jawad, dean of the law school at Birzeit University near Ramallah: “I don’t remember a happy day since 1967,” he told me.  Stunned, I asked him why specifically that was so.  “Because,” he replied, “you can’t go to Jerusalem to pray.  And it’s only 15 kilometers away.  And you have your memories there.”

He added, “Since 17 years I was unable to go to the sea. We are not allowed to go. And my daughter married five years ago and we were unable to do a marriage ceremony for her.” Israel would not grant a visa to Saleh’s Egyptian son-in-law so that he could enter the West Bank.  “How to do a marriage without the groom?”

A Musical Intifada

An old schoolmate of mine and now a Middle East scholar living in Paris points out that Palestinians are not just victims, but actors in their own narrative.  In other words, he insists, they, too, bear responsibility for their circumstances — not all of this rests on the shoulders of the occupiers.  True enough.

As an apt example, consider the morally and strategically bankrupt tactic of suicide bombings, carried out from 2001 to 2004 by several Palestinian factions as a response to Israeli attacks during the second intifada.  That disastrous strategy gave cover to all manner of Israeli retaliation, including the building of the separation barrier.  (The near disappearance of the suicide attacks has been due far less to the wall — after all, it isn’t even finished yet — than to a decision on the part of all the Palestinian factions to reject the tactic itself.)

So, yes, Palestinians are also “actors” in creating their own circumstances, but Israel remains the sole regional nuclear power, the state with one of the strongest armies in the world, and the occupying force — and that is the determining fact in the West Bank.  Today, for some Palestinians living under the 44-year occupation simply remaining on the land is a kind of moral victory.  This summer, I started hearing a new slogan: “Existence is resistance.” If you remain on the land, then the game isn’t over.  And if you can bring attention to the occupation, while you remain in place, so much the better.

In June, Alá Shelaldeh, the 13-year-old violinist, brought her instrument to the wall at Qalandia, once a mere checkpoint separating Ramallah and Jerusalem, and now essentially an international border crossing with its mass of concrete, steel bars, and gun turrets.  The transformation of Qalandia — and its long, cage-like corridors and multiple seven-foot-high turnstiles through which only the lucky few with permits may cross to Jerusalem — is perhaps the most powerful symbol of Israel’s determination not to share the Holy City.

Alá and her fellow musicians in the Al Kamandjati Youth Orchestra came to play Mozart and Bizet in front of the Israeli soldiers, on the other side of Qalandia’s steel bars.  Their purpose was to confront the occupation through music, essentially to assert: we’re here.  The children and their teachers emerged from their bus, quickly set up their music stands, and began to play.  Within moments, the sound of Mozart’s Symphony No. 6 in F Major filled the terminal.

Palestinians stopped and stared.  Smiles broke out.  People came closer, pulling out cell phones and snapping photos, or just stood there, surrounding the youth orchestra, transfixed by this musical intifada.  The musicians and soldiers were separated by a long row of blue horizontal bars.  As the music played on, a grim barrier of confinement was momentarily transformed into a space of assertive joy. “It was,” Alá would say later, “the greatest concert of my life.”

As the Mozart symphony built — Allegro, Andante, Minuet, and the Allegro last movement — some of the soldiers started to take notice.  By the time the orchestra launched into Georges Bizet’s Dance Boheme from Carmen #2, several soldiers appeared, looking out through the bars. For the briefest of moments, it was hard to tell who was on the inside, looking out, and who was on the outside, looking in.

If existence is resistance, if children can confront their occupiers with a musical intifada, then there’s still space, in the year of the Arab Spring, for something unexpected and transformative to happen.  After all, South African apartheid collapsed, and without a bloody revolution. The Berlin Wall fell quickly, completely, unexpectedly.  And with China, India, Turkey and Brazil on the rise, the United States, its power waning, will not be able to remain Israel’s protector forever. Eventually, perhaps, the world will assert the obvious: the status quo is unacceptable.

For the moment, whatever happens in the coming weeks at the U.N., and in the West Bank in the aftermath, isn’t it time for the world’s focus to shift to what is actually happening on the ground?  After all, it’s the occupation, stupid.

Sandy Tolan is author of The Lemon Tree: An Arab, a Jew, and the Heart of the Middle East.  He is associate professor at the Annenberg School for Communication and Journalism at the University of Southern California.  He is at work on a new book, Operation Mozart, about music and life in Palestine.  He blogs at ramallahcafe.com.

Praying in Paris streets outlawed

Praying in the streets of Paris is against the law starting Friday, after the interior minister warned that police will use force if Muslims, and those of any other faith, disobey the new rule to keep the French capital’s public spaces secular.

September 15, 2011

by Henry Samuel, Paris


Claude Guéant said that ban could later be extended to the rest of France, in particular to the Mediterranean cities of Nice and Marseilles, where “the problem persists”.

He promised the new legislation would be followed to the letter as it “hurts the sensitivities of many of our fellow citizens”.

“My vigilance will be unflinching for the law to be applied. Praying in the street is not dignified for religious practice and violates the principles of secularism, the minister told Le Figaro newspaper.

“All Muslim leaders are in agreement,” he insisted.

In December when Marine Le Pen, then leader-in-waiting of the far-Right National Front, sparked outrage by likening the practice to the Nazi occupation of Paris in the Second World War “without the tanks or soldiers”. She said it was a “political act of fundamentalists”.

More than half of right-wing sympathisers in France agreed with Marine Le Pen, at least one poll suggested.

Nicolas Sarkozy’s party denounced the comments, but the President called for a debate on Islam and secularism and went on to say that multiculturalism had failed in France.

Following the debate, Mr Guéant promised a countrywide ban “within months”, saying the “street is for driving in, not praying”.

In April, a ban on wearing the full Islamic veil came into force. Holland today became the third European country to ban the burka, after Belgium, despite the fact fewer than 100 Dutch women are thought to wear the face-covering Islamic dress.

Yesterday, Mr Guéant said the prayer problem was limited to two roads in the Goutte d’Or district of Paris’s eastern 19th arrondissement, where “more than a thousand” people blocked the street every Friday.

However, a stroll through several districts in Paris on a Friday suggests that Muslims spill into the streets outside many mosques.

Under an agreement signed this week, believers will be able to use the premises of a vast nearby fire station while awaiting the construction of a bigger mosque.

“We could go as far as using force if necessary (to impose the ban), but it’s a scenario I don’t believe will happen, as dialogue (with local religious leaders) has born fruit,” he said.

Sheikh Mohamed salah Hamza, in charge of one of the Parisian mosques which regularly overflows, said he would obey the new law, but complained: “We are not cattle” and that he was “not entirely satisfied” with the new location. He said he feared many believers would continue to prefer going to the smaller mosque.

Public funding of places of religious worship is banned under a 1905 law separating church and state. Mr Guéant said that there were 2,000 mosques in France with half being built in the past ten years.

France has Europe’s largest Muslim population, with an estimated five million in total.

3 EU states insist on control of national borders  

September 13, 2011

by Raf Casert
Associated Press

BRUSSELS (AP) — Germany, France and Spain warned the European Union’s head office Tuesday not to meddle in how they manage their borders, insisting it’s a question of state sovereignty, even as the bloc’s member nations debate how to tackle issues such as illegal immigration and crime.The three-country statement came as the EU Commission prepared to present plans Friday to better manage the Schengen zone of borderless travel through much of Europe. The Schengen Agreement governing the zone is a legally binding treaty; 25 countries are currently members of the Schengen visa-free zone.The Commission says its proposal would allow it to assess how member countries patrol the outer border of the visa-free zone, and to give financial and technical assistance to countries found to have deficiencies. Brussels could, if the deficiencies persisted, order checks instituted at a country’s internal borders – those national borders that lie within the visa-free zone.But Germany, France and Spain fear the proposal would give Brussels too many powers over national borders if it could decide when and how disputes should be solved.”Respecting the core area of national sovereignty is very important to the member states,” the statement said.In June, EU leaders agreed to set up new rules underpinning the principle of free travel throughout much of the continent after Italy, Denmark and France all took action to roll back visa-free travel.Germany has been critical of neighbor Denmark’s plans to reintroduce permanent customs controls at its borders in what it calls an attempt to fight crime. France and Italy were involved in a dispute over ways to stem the flow of illegal immigrants from northern Africa.The two issues – crime and illegal immigration – have led to growing divisions among EU nations. Some claim the unrestricted travel has turned Europe into a vast playground for criminals and illegal immigrants.According to the three countries’ statement Tuesday, “The European Commission would assume responsibility for deciding whether to reintroduce temporary checks” at those borders of member states that lie inside the visa-free zone.”We therefore do not share the European Commission’s views on assuming responsibility for making decisions on operational measures in the security field,” it said. “The Member States have the political responsibility for maintaining public order and protecting internal security.”EU leaders said in June that any reintroduction of national border controls – which would undercut the borderless travel zone, one of the EU’s signal achievments – should only be done as a last resort.Under the Commission’s proposals, member countries would still have the option to institute border controls themselves in emergencies, such as terrorist attacks, but only for a few days. Afterward, it would go to a special panel of EU experts for further action.—Associated Press writer Don Melvin contributed to this story

’65 percent Himalayan glaciers melting’ 

July 19, 2011

Greater Kashmir News

New Delhi,: In a startling comparison between the state of glaciers in the Himalayan ranges in the last 50 years, glaciologists say nearly 65 percent glaciers are melting due to global warming.
             “Almost 65 percent of the glaciers are depleting in the Himalayan region in a comparison between 1955 and 2007. There are many recently formed lakes in the region, resulting to changing weather pattern,” said scientist Alton Byer, who is studying melting glaciers, in a documentary screened by the United Nations Development Programme (UNDP) here Tuesday.
             The film examines the shrinking glaciers of the Himalayas and the effects they have on the lives and livelihood of people in Asia.
            Glaciologists from the Mountain Studies Institute and the International Centre for Integrated Mountain Development (ICIMOD) have stated the ice melting poses a huge risk of disasters in the regions surrounding the mountain range.
            “There is a huge risk of avalanches and high magnitude earthquakes in the region. The meltdown poses threat to millions across Asia,” said Byer in the documentary.
            The UNDP also awarded Chhewang Norphel, popularly known as the ‘Ice Man’ of Leh, for preventing glacier melting in the Leh mountains.
            Norphel, chief project officer of the Leh Nutrition Project, brought hope to thousands of farmers in the Ladakh region through his innovative idea of building artificial glaciers that store melting glacial water and help irrigate land in the region. (IANS) 

Bush’s Toronto Visit Cancelled Amid Mass Public Pressure for Arrest

Canadians Hit Reject Button on G.W. Bush Visit


Truth About Internationally Disgraced U.S. President Hidden from American Public


This week’s appearance by former U.S. president George W. Bush at an event hosted by a local evangelical Christian university has been cancelled while the mainstream U.S. Media ignores the international embarrassment. 

The decision came Wednesday, the same day three former students launched a petition urging the university to cancel the speech.  On Tuesday, a class valedictorian and professor publicly spoke out against the appearance following the resignation of another staff member.

Bush was scheduled to speak Sept. 20 to about 150 people at an invitation-only breakfast hosted by Tyndale University College and Seminary, home to about 1,400 students at two campuses in Toronto’s north end.

Tyndale supporter Prem Watsa, chief executive of Fairfax Financial Holdings and sometimes referred to as “Canada’s Warren Buffett,” was sponsoring the event, which the administration said was intended to raise the university’s profile. Watsa did not respond to requests for comment.

A brief on the university’s website Wednesday afternoon announced the cancellation “due to scheduling change” but provided no details, nor did it mention Bush by name. Tyndale spokeswoman Lina van der Wel confirmed the note pertained to the Bush event, which she said would not be rescheduled. She said she could not explain the “scheduling change,” nor say whether it was the university or Bush who cancelled.

University president Gary Nelson held a town-hall meeting at the school at noon Wednesday, a few hours before the decision to cancel was made public. Faculty reached by the Star refused to discuss what happened at the meeting.

Opposition to Bush’s appearance at the non-denominational evangelical university had been growing within the school’s community since Monday after the story ”Bush to make promotional appearance in Toronto for Christian college” was published in the Star.

The following day, a class valedictorian and professor spoke out passionately against the visit. The university also confirmed “a valued employee” quit in protest.

Critics accused Tyndale of sacrificing its peaceful ideals to attract wealthy donors with the exclusive event. Many students and alumni also complained they only heard about the high-profile appearance through the news.

“They’re still not even saying his name on their web page,” said Dan Oudshoorn, a former student body president who graduated in 2006 and was part of the group that launched the petition. “I think it shows they were really trying to sneak in a cash grab through a means they know is dirty, they got busted doing it and now they’re trying to sneak back out again without taking responsibility.”

As it stands, the main stream media in the USA has be absolutely silent on the international rejection of George W. Bush.

‘US media silence serves a purpose for the establishment.  This is an embarrassment, a disgrace that America does NOT want to talk about or face.  The fact that we, our culture and society, are complicit in the wholesale criminal acts of this pathetic Head of the Torture Snake is something that we don’t want to talk about.  So silence works best.  Besides Lady Gaga is on Dancing with the Stars and that’s much more easy on the soul” says Mike Leon, editor-in-chief of Veterans News Now.

In this authors view, to me, whats even worse is that our presidency has been disgraced.  We’re are forever scarred by the psychotic predators who commited crimes against humanity in our name.  And we, the people, are numb, nuertered, and morally bankrupt without standing.

Instead, the rest of the world has taking over for us as we’ve vacated the leadership stage.  The conscience vacuum has been filled by Canadians and others worldwide who’ve decide to get up and stand up and fight against what we’ve become.  At best  how embarrassing is that we no longer stand for justice, peace, and humanity.  At worst, we’re the 800lb fascist in the room pointing fingers at the ghost of Mother Teresa, Mahatma Ghandi, and Martin Luther King. What a disgrace!


YA authors asked to ‘straighten’ gay characters

Authors say agent offered them book deal conditional on making a character heterosexual September 14, 2011

by Alison Flood


Two American authors have revealed that they were told by a literary agent to “straighten” a gay character in their post-apocalyptic young adult novel if they wished to be represented.

Sherwood Smith and Rachel Manija Brown’s co-written YA novel, Stranger, includes the viewpoint of Yuki as one of its five main characters. Yuki is gay and has a boyfriend, with whom he does “nothing more explicit” than kissing. Writing in the US trade magazine Publishers Weekly, the two published authors say they were contacted by an agent from a “major” literary agency, who offered to sign them up “on the condition that we make the gay character straight, or else remove his viewpoint and all references to his sexual orientation”.

The demand follows the experience of author Jessica Verday, who pulled out of the young adult anthology Wicked Pretty Things in March after she was told by its editor that her story, “which features Wesley (a boy) and Cameron (a boy), who were both in love with each other, would have to be published as a male/female story because a male/male story would not be acceptable to the publishers”.

Like Verday, Smith and Brown refused to “straighten” Yuki, with Brown telling the agent that “making a gay character straight is a line in the sand which I will not cross. That is a moral issue. I work with teenagers, and some of them are gay. They never get to read fantasy novels where people like them are the heroes, and that’s not right”. The agent suggested that, as a compromise, Yuki could be revealed to be gay in later books, when readers “were already invested in the series”. Smith and Brown were unconvinced. “We knew this was a pie-in-the-sky offer – who knew if there would even be sequels? – and didn’t solve the moral issue. When you refuse to allow major characters in YA novels to be gay, you are telling gay teenagers that they are so utterly horrible that people like them can’t even be allowed to exist in fiction,” they said, adding that the agent was not the only one to have requested a rewrite which included cutting the viewpoint of Yuki.

“This isn’t about one agent’s personal feelings about gay people. We don’t know their feelings; they may well be sympathetic in their private life, but regard the removal of gay characters as a marketing issue. The conversation made it clear that the agent thought our book would be an easy sale if we just made that change. But it doesn’t matter if the agent rejected the character because of personal feelings or because of assumptions about the market. What matters is that a gay character would be quite literally written out of his own story,” they said.

The two authors believe that “forcing all major characters in YA novels into a straight white mould is a widespread, systemic problem which requires long-term, consistent action”. They suggest that both editors and agents who are open to novels with lesbian, gay, bisexual and transgender protagonists make this explicit, that readers vote with their pockets and that writers speak out about similar experiences. “How many published novels with a straight white heroine and a lesbian or black or disabled best friend once had those roles reversed, before an agent demanded a change? This does not make for better novels. Nor does it make for a better world. Let’s make a better world,” they say.

Their revelations about being asked, as novelist Scott Tracey put it, to “straightwash” their character have prompted a storm of comments online, with other authors citing similar experiences. “I fired my first agent because she didn’t like the protagonist of my outlined novel being lesbian, [and] said ‘This is not a selling outline’,” said author Nicola Griffith. “The novel, Slow River went on to win the Nebula award, the Lambda literary award, and others.” An anonymous author posted that their publisher, one of the “big six”, did not ask for a gay character to be removed – rather “my editor went through and deleted all gay references between my copy-edits and the first-pass pages without bothering to tell me”. Tracey, author of Witch Eyes, blogged that he “had agents who said there wasn’t a market for a paranormal with a gay character who had a romance. I had editors suggest they would reconsider the book if Braden and Trey became Brenda and Trey. Or if I removed the romance and made it a straight girl/gay guy buddy comedy”. The debate has also taken off on Twitter through the hash tag #YesGayYA.

British novelist Malorie Blackman, author of the Noughts and Crosses series for teenagers, said she was “shocked and saddened” by Brown and Smith’s experience. Although Blackman experienced only positive reactions from her agent, publisher and readers at her inclusion of a gay younger brother in her novel Boys Don’t Cry, she said that, when she was starting out as a writer 20 years ago, she was asked to make a black character white.

“Are we still not over this nonsense?” she said. “I think it’s really sad. All power to the writers for sticking to their guns and making sure the character was how they wanted him to be. At the end of the day you have to be true to the story you are telling. When I was asked [to whiten her character] I said no. It seems to me this is more of the same … With all these things it stems from ignorance, and ignorance breeds fear. A good way of tackling this is to show gay or Muslim or black characters in our fiction for children. I grew up with no black characters in the books I read and I missed them. It’s part of the reason I became a writer


Obama sears the arc of instability
September 20, 2011

by Nick Turse

Asia Times

            It’s a story that should take your breath away: the destabilization of what, in the George W Bush years, used to be called “the arc of instability”. It involves at least 97 countries, across the bulk of the global south, much of it coinciding with the oil heartlands of the planet. A startling number of these nations are now in turmoil, and in every single one of them – from Afghanistan and Algeria to Yemen and Zambia – Washington is militarily involved, overtly or covertly, in outright war or what passes for peace.
            Garrisoning the planet is just part of it. The Pentagon and US intelligence services are also running covert special forces and spy operations, launching drone attacks, building bases and secret prisons, training, arming, and funding local security forces, and engaging in a host of other militarized activities right up to full-scale war. But while you consider this, keep one fact in mind: theodds are that there is no longer a single nation in the arc of instability in which the United States is in no way militarily involved.

Covenant of the arc

            “Freedom is on the march in the broader Middle East,” the president said in his speech. “The hope of liberty now reaches from Kabul to Baghdad to Beirut and beyond. Slowly but surely, we’re helping to transform the broader Middle East from an arc of instability into an arc of freedom.”
            An arc of freedom. You could be forgiven if you thought that this was an excerpt from President Barack Obama’s Arab Spring speech, where he said, “[I]t will be the policy of the United States to … support transitions to democracy.” Those were, however, the words of his predecessor George W Bush. The giveaway is that phrase “arc of instability”, a core rhetorical concept of the former president’s global vision and that of his neo-conservative supporters.
            The dream of the Bush years was to militarily dominate that arc, which largely coincided with the area from North Africa to the Chinese border, also known as the Greater Middle East, but sometimes was said to stretch from Latin America to Southeast Asia. While the phrase has been dropped in the Obama years, when it comes to projecting military power President Barack Obama is in the process of trumping his predecessor.
            In addition to waging more wars in “arc” nations, Obama has overseen the deployment of greater numbers of special operations forces to the region, has transferred or brokered the sale of substantial quantities of weapons there, while continuing to build and expand military bases at a torrid rate, as well as training and supplying large numbers of indigenous forces.
            Pentagon documents and open source information indicate that there is not a single country in that arc in which US military and intelligence agencies are not now active. This raises questions about just how crucial the American role has been in the region’s increasing volatility and destabilization.

Flooding the arc

            Given the centrality of the arc of instability to Bush administration thinking, it was hardly surprising that it launched wars in Afghanistan and Iraq, and carried out limited strikes in three other arc states – Yemen, Pakistan, and Somalia. Nor should anyone have been shocked that it also deployed elite military forces and special operators from the Central Intelligence Agency (CIA) elsewhere within the arc.
            In his book The One Percent Doctrine, journalist Ron Suskind reported on CIA plans, unveiled in September 2001 and known as the “Worldwide Attack Matrix” for “detailed operations against terrorists in 80 countries”. At about the same time, then-secretary of defense Donald Rumsfeld proclaimed that the nation had embarked on “a large multi-headed effort that probably spans 60 countries”. By the end of the Bush years, the Pentagon would indeed have special operations forces deployed in 60 countries around the world.
            It has been the Obama administration, however, that has embraced the concept far more fully and engaged the region even more broadly. Last year, the Washington Post reported that US had deployed special operations forces in 75 countries, from South America to Central Asia.
            Recently, however, US Special Operations Command spokesman Colonel Tim Nye told me that on any given day, America’s elite troops are working in about 70 countries, and that its country total by year’s end would be around 120. These forces are engaged in a host of missions, from Army Rangers involved in conventional combat in Afghanistan to the team of Navy SEALs who assassinated Osama bin Laden in Pakistan, to trainers from the army, navy, air force, and marines within US Special Operations Command working globally from the Dominican Republic to Yemen.
            The United States is now involved in wars in six arc-of-instability nations: Afghanistan, Iraq, Libya, Pakistan, Somalia and Yemen. It has military personnel deployed in other arc states, including Algeria, Bahrain, Djibouti, Egypt, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Pakistan, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates.
            Of these countries, Afghanistan, Bahrain, Djibouti, Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates all host US military bases, while the CIA is reportedly building a secret base somewhere in the region for use in its expanded drone wars in Yemen and Somalia. It is also using already existing facilities in Djibouti, Ethiopia, and the United Arab Emirates for the same purposes, and operating a clandestine base in Somalia where it runs indigenous agents and carries out counterterrorism training for local partners.
            In addition to its own military efforts, the Obama administration has also arranged for the sale of weaponry to regimes in arc states across the Middle East, including Bahrain, Egypt, Iraq, Jordan, Kuwait, Morocco, Saudi Arabia, Tunisia, the United Arab Emirates and Yemen. It has been indoctrinating and schooling indigenous military partners through the State Department’s and Pentagon’s International Military Education and Training program.
            Last year, it provided training to more than 7,000 students from 130 countries. “The emphasis is on the Middle East and Africa because we know that terrorism will grow, and we know that vulnerable countries are the most targeted,” Kay Judkins, the program’s policy manager, recently told the American Forces Press Service.
            According to Pentagon documents released earlier this year, the US has personnel – some in token numbers, some in more sizeable contingents – deployed in 76 other nations sometimes counted in the arc of instability: Angola, Botswana, Burundi, Cameroon, Chad, Congo, Cote d’Ivoire, Ethiopia, Gabon, Ghana, Guinea, Kenya, Liberia, Madagascar, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Sudan, Tanzania, Togo, Uganda, Zambia, Zimbabwe, Sri Lanka, Syria, Antigua, the Bahamas, Barbados, Belize, Bolivia, Colombia, Costa Rica, Cuba, the Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, Venezuela, Albania, Bosnia and Herzegovina, Macedonia, Romania, Serbia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Bangladesh, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

            While arrests of 30 members of an alleged CIA spy ring in Iran earlier this year may be, like earlier incarcerations of supposed American “spies”, pure theater for internal consumption or international bargaining, there is little doubt that the US is conducting covert operations there, too.
            Last year, reports surfaced that US black ops teams had been authorized to run missions inside that country, and spies and local proxies are almost certainly at work there as well. Just recently, the Wall Street Journal revealed a series of “secret operations on the Iran-Iraq border” by the US military and a coming CIA campaign of covert operations aimed at halting the smuggling of Iranian arms into Iraq.
            All of this suggests that there may, in fact, not be a single nation within the arc of instability, however defined, in which the United States is without a base or military or intelligence personnel, or where it is not running agents, sending weapons, conducting covert operations or at war.

The arc of history

            Just after Obama came into office in 2009, then-Director of National Intelligence Dennis Blair briefed the Senate Select Committee on Intelligence. Drawing special attention to the arc of instability, he summed up the global situation this way: “The large region from the Middle East to South Asia is the locus for many of the challenges facing the United States in the twenty-first century.”
            Since then, as with the Bush-identified phrase “global war on terror”, the Obama administration and the US military have largely avoided using “arc of instability”, preferring to refer to it using far vaguer formulations.
            During a speech at the National Defense Industrial Association’s annual Special Operations and Low-Intensity Conflict Symposium earlier this year, for example, Navy Admiral Eric Olson, then the chief of US Special Operations Command, pointed toward a composite satellite image of the world at night. Before September 11, 2001, said Olson, the lit portion of the planet – the industrialized nations of the global north – were considered the key areas. Since then, he told the audience, 51 countries, almost all of them in the arc of instability, have taken precedence. “Our strategic focus,” he said, “has shifted largely to the south … certainly within the special operations community, as we deal with the emerging threats from the places where the lights aren’t.”
            More recently, in remarks at the Paul H Nitze School of Advanced International Studies in Washington, DC, John O Brennan, the assistant to the president for homeland security and counter-terrorism, outlined the president’s new National Strategy for Counter-terrorism, which highlighted carrying out missions in the”Pakistan-Afghanistan region” and “a focus on specific regions, including what we might call the periphery – places like Yemen, Somalia, Iraq, and the Maghreb [northern Africa].”
            “This does not,” Brennan insisted, “require a ‘global’ war” – and indeed, despite the Bush-era terminology, it never has. While, for instance, planning for the 9/11 attacks took place in Germany and would-be shoe-bomber Richard Reid hailed from the United Kingdom, advanced, majority-white Western nations have never been American targets. The “arc” has never arced out of the global south, whose countries are assumed to be fundamentally unstable by nature and their problems fixable through military intervention.

Building instability

A decade’s evidence has made it clear that US operations in the arc of instability are destabilizing. For years, to take one example, Washington has wielded military aid, military actions, and diplomatic pressure in such a way as to undermine the government of Pakistan, promote factionalism within its military and intelligence services, and stoke anti-American sentiment to remarkable levels among the country’s population. (According to a recent survey, just 12% of Pakistanis have a positive view of the United States.)
            A semi-secret drone war in that nation’s tribal borderlands, involving hundreds of missile strikes and significant, if unknown levels, of civilian casualties, has been only the most polarizing of Washington’s many ham-handed efforts. When it comes to that CIA-run effort, a recent Pew survey of Pakistanis found that 97% of respondents viewed it negatively, a figure almost impossible to achieve in any sort of polling.
            In Yemen, long-time support – in the form of aid, military training, and weapons, as well as periodic air or drone strikes – for dictator Ali Abdullah Saleh led to a special relationship between the US and elite Yemeni forces led by Saleh’s relatives. This year, those units have been instrumental in cracking down on the freedom struggle there, killing protesters and arresting dissenting officers who refused orders to open fire on civilians.
            It’s hardly surprising that, even before Yemen slid into a leaderless void (after Saleh was wounded in an assassination attempt), a survey of Yemenis found – again a jaw-dropping polling figure – 99% of respondents viewed the US government’s relations with the Islamic world unfavorably, while just 4% “somewhat” or “strongly approved” of Saleh’s cooperation with Washington.
            Instead of pulling back from operations in Yemen, however, the US has doubled down. The CIA, with support from Saudi Arabia’s intelligence service, has been running local agents as well as a lethal drone campaign aimed at Islamic militants. The US military has been carrying out its own air strikes, as well as sending in more trainers to work with indigenous forces, while American black ops teams launch lethal missions, often alongside Yemeni allies.
            These efforts have set the stage for further ill-will, political instability, and possible blowback. Just last year, a US drone strike accidentally killed Jabr al-Shabwani, the son of strongman Sheikh Ali al-Shabwani. In an act of revenge, Ali repeatedly attacked of one of Yemen’s largest oil pipelines, resulting in billions of dollars in lost revenue for the Yemeni government, and demanded Saleh stop cooperating with the US strikes.
            Earlier this year, in Egypt and Tunisia, long-time US efforts to promote what it liked to call “regional stability” – through military alliances, aid, training, and weaponry – collapsed in the face of popular movements against the US-supported dictators ruling those nations.
            Similarly, in Bahrain, Iraq, Jordan, Kuwait, Morocco, Oman, Saudi Arabia and the United Arab Emirates, popular protests erupted against authoritarian regimes partnered with and armed courtesy of the US military.
            It’s hardly surprising that, when asked in a recent survey whether Obama had met the expectations created by his 2009 speech in Cairo, where he called for “a new beginning between the United States and Muslims around the world”, only 4% of Egyptians answered “yes”. (The same poll found only 6% of Jordanians thought so and just 1% of Lebanese.)
            A recent Zogby poll of respondents in six Arab countries – Egypt, Jordan, Lebanon, Morocco, Saudi Arabia and the United Arab Emirates – found that, taking over from a president who had propelled anti-Americanism in the Muslim world to an all-time high, Obama managed to drive such attitudes even higher. Substantial majorities of Arabs in every country now view the US as not contributing “to peace and stability in the Arab world”.

Increasing instability across the globe

            United States interference in the arc of instability is certainly nothing new. Leaving aside current wars, over the last century, the United States has engaged in military interventions in the global south in Cambodia, Congo, Cuba, the Dominican Republic, El Salvador, Egypt, Grenada, Guatemala, Haiti, Honduras, Iraq, Kuwait, Laos, Lebanon, Libya, Panama, the Philippines, Mexico, Nicaragua, Panama, Somalia, Thailand, and Vietnam, among other places. The CIA has waged covert campaigns in many of the same countries, as well as Afghanistan, Algeria, Chile, Ecuador, Indonesia, Iran, and Syria, to name just a few.
            Like George W Bush before him, Barack Obama evidently looks out on the “unlit world” and sees a source of global volatility and danger for the United States. His answer has been to deploy US military might to blunt instability, shore up allies, and protect American lives.
            Despite the salient lesson of 9/11- interventions abroad beget blowback at home – he has waged wars in response to blowback that have, in turn, generated more of the same. A recent Rasmussen poll indicates that most Americans differ with the president when it comes to his idea of how the US should be involved abroad.
            Seventy-five percent of voters, for example, agreed with this proposition in a recent poll: “The United States should not commit its forces to military action overseas unless the cause is vital to our national interest.” In addition, clear majorities of Americans are against defending Afghanistan, Iraq, Pakistan, Saudi Arabia, and a host of other arc of instability countries, even if they are attacked by outside powers.
            After decades of overt and covert US interventions in arc states, including the last 10 years of constant warfare, most are still poor, underdeveloped, and seemingly even more unstable. This year, in their annual failed state index – a ranking of the most volatile nations on the planet – Foreign Policy and the Fund for Peace placed the two arc nations that have seen the largest military interventions by the US – Iraq and Afghanistan – in their top ten. Pakistan and Yemen ranked 12th and 13th, respectively, while Somalia the site of US interventions under president Bill Clinton in the 1990s, during the Bush presidency in the 2000s, and again under Obama – had the dubious honor of being number one.
            For all the discussions here about (armed) “nation-building efforts” in the region, what we’ve clearly witnessed is a decade of nation unbuilding that ended only when the peoples of various Arab lands took their futures into their own hands and their bodies out into the streets.
            As recent polling in arc nations indicates, people of the global south see the United States as promoting or sustaining, not preventing, instability, and objective measures bear out their claims. The fact that numerous popular uprisings opposing authoritarian rulers allied with the US have proliferated this year provides the strongest evidence yet of that.
            With Americans balking at defending arc-of-instability nations, with clear indications that military interventions don’t promote stability, and with a budget crisis of epic proportions at home, it remains to be seen what pretexts the Obama administration will rely on to continue a failed policy – one that seems certain to make the world more volatile and put American citizens at greater risk.

            Nick Turse is a historian, investigative journalist, the associate editor of TomDispatch.com, and a senior editor at Alternet.org. His latest book is The Case for Withdrawal from Afghanistan (Verso Books). You can follow him on Twitter @NickTurse, on Tumblr, and on Facebook. This article is a collaboration between Alternet.org and TomDispatch.com.


Special report: Nevada’s big bet on secrecy

September 26, 2011

by Brian Grow and Kelly Carr


            CARSON CITY, Nevada (Reuters) – Aaron S. Young, Wayne Andre McMiniment and Richard C. Neiswonger share two things in common.

            Each man built a thriving business that helps people set up shell companies, firms with few real operations, in the state of Nevada.

And each had done time in federal prison for a financial felony.

Young served 14 months in prison for employing Nevada shell companies to help clients dodge taxes. McMiniment spent three years in jail for wire fraud in a theft and tax-evasion operation that also involved Nevada shells. Neiswonger did 14 months for committing wire fraud and money-laundering in a get-rich-quick scheme.

The presence of former felons in the business of creating businesses is an extreme example of vulnerability in corporate America. Nevada has spawned a thriving industry of consultants who aid companies seeking to avoid liability and disclosure, at a time when Washington is calling on other nations to enforce greater transparency of financial flows.

Ten years ago, Nevada enacted some of America’s loosest disclosure and liability laws for corporations, in a bid to spur the state economy. It protected corporate officers and directors from liability for breaches of duty, bad faith and self-dealing – acts that can be the basis of lawsuits in other states.

Today, the business of registering companies in Nevada, many of them shells, is booming.

Nevada has emerged as the state with the second-largest number of corporate entities registered per capita, after longtime leader Delaware. The state’s business-filings unit generated revenue of $108 million in fiscal 2010, up from $43 million in 2002.

At the same time, Nevada is attracting an outsize number of companies with shaky financial reporting, according to a study published in March by Michal Barzuza and David C. Smith of the University of Virginia.

On average, in each year between 2000 and 2008, 14.5 percent of public Nevada companies restated their accounting; 12.6 percent lowered reported net income; and 1.3 percent were the subject of fraud allegations or investigations by regulators, the study found. Nationally, 8.5 percent of companies restated their accounts, 7.3 percent reduced their reported net income and 0.9 percent were subject to fraud allegations or probes.

Nevada also emerged as a hotbed for a key subset of shell companies, those that are listed on stock exchanges. Financial consulting firm PrivateRaise says that 588 of the 1,215 publicly-traded U.S. shell companies it monitors, or nearly half, are registered in Nevada. Public shells have drawn scrutiny from regulators as a backdoor way for foreigners to list on U.S. markets, because buyers can get a listing without the scrutiny of an initial public offering.

In effect, says University of Virginia’s Barzuza, the Silver State is marketing itself as a low-liability zone, attracting a niche of owners more prone to reporting problems. “Nevada has all but hung up a ‘no law’ for-sale sign,” she says.


Most Nevada companies are above-board. And so are most shell companies: They are used by corporations to set up side businesses under different brands, for instance. Corporations can use shells for legitimate secrecy, such as storing intellectual property that they don’t want nosy competitors to know they possess.

But Nevada boosters are going a step further, touting the state as an oasis of anonymity and even impunity for business owners.

Wayne McMiniment’s website claims – in a stretch of the truth, state officials say – that Nevada companies protect any individual “from personal liability for acts committed on behalf of the Corporation, by the Corporation.” Aaron Young’s firm pitches the state as a place to avoid the taxman’s gaze: “It is very hard to pierce the veil of a Nevada corporation,” its site says. Richard Neiswonger’s promotional literature marketed Nevada as the alternative to an offshore tax haven: “This provides your clients with the highest level of privacy and asset protection available without leaving the country.”

Nevada officials don’t go so far, but they pitch the secrecy angle. “Piercing the corporate veil in Nevada requires the presence of ‘fraud’ or ‘manifest injustice,'” says the site of the secretary of state, Ross Miller, who oversees business registrations. “This is the highest standard for personal indemnification available.”

State leaders say their incorporation laws have been an economic boon, and add that the state began tightening enforcement against financial fraud as early as 2007.

“We’re proud to be the home to hundreds of thousands of companies that participate in legitimate commerce and keep the nation’s economy moving,” Secretary of State Miller said in an interview. “With the volume of filings we have, you have to realize that we’re going to have some bad apples, and therein lies the cost.” He added that some incorporation firms are falsely promoting Nevada “as a safe haven for criminal activity” and that he planned to crack down on them.

The three firms run by Young, McMiniment and Neiswonger have created or represented a total of more than 14,000 companies in Nevada. More than 3,000 of these companies have been hit with state and federal tax liens and civil judgments, or named in federal civil and criminal cases. Federal investigators alleged that these companies have been vehicles used for financial fraud, stock fraud, money laundering and tax evasion, according to court records.

Reuters detailed its discovery of former felons in the mass-incorporation industry to Nevada state officials. In response, Miller said he plans to introduce a bill barring felons from running incorporation firms. In early September, he announced the creation of a Corporate Ownership Fraud Task Force to fight abuses of Nevada incorporation rules.

“Our office is always responsive to actionable leads related to violations of our criminal statutes,” said his deputy, Robert E. Walsh, in an email, “and specific information from Reuters regarding felons, mass incorporators, shells, tax evasion and fraud in Nevada certainly played a role in our realization that a more formalized multi-jurisdictional Task Force may be needed at this point.”

Best known as home to the anything-goes gambling capital of Las Vegas, Nevada sought a decade ago to make it more attractive for firms to incorporate here. The bill passed because legislators saw it as a way to attract real new businesses and generate fees from people setting up companies.

Some opposed the move. “We are holding up a sign that says, ‘Sleaze balls and rip-off artists welcome here,'” said Dina Titus, then a Democratic state senator, in a debate on the bill at the time. Today, she says, “a lot more harm than good has been done, to individuals as well as Nevada’s reputation.”

The changes bucked a trend that intensified in the U.S. early last decade, when Washington began pressing the rest of the world to clean up shady financial flows and improve corporate transparency in order to combat terrorist funding and tax evasion.

But in America itself, states with liberal incorporation laws – such as Delaware, Wyoming and Nevada – are magnets for businesses seeking secrecy.

All three states allow “nominees” to stand in for real corporate directors and officers, keeping their names out of public records and making it more difficult for law-enforcement officials, regulators and investors to identify them.

Law-enforcement officials say loose disclosure makes it tough to investigate fraud. The U.S. Money Laundering Threat Assessment, a federal report released in 2006, named Nevada, Wyoming and Delaware as “the most accommodating jurisdictions in the United States” for the creation of shell companies, rivaling offshore secrecy havens such as the Cayman Islands and Panama. But little has been done to address those gaps.

Not everyone sees a problem in Nevada. Corporate formation is supervised by individual states in the U.S. and is largely unregulated – for the good reason that making it easy to start a business is essential to a strong economy. Nevada’s incorporation regime is a welcome low-cost alternative for companies with limited capital, some scholars say.

“I don’t think that the law has changed the business climate that dramatically. The laws don’t blatantly allow fraud,” says Larry E. Ribstein, associate dean for research at the University of Illinois College of Law.


Richard C. Neiswonger has been sued by the Federal Trade Commission twice and sanctioned by four states a half-dozen times since the mid-1980s for falsely marketing business ventures and get-rich-quick schemes.

In 1998, he was indicted by federal prosecutors in Missouri on charges of deceptively enticing entrepreneurs to pay more than $10,000 to become financial consultants. He pleaded guilty to wire fraud and money laundering, was sentenced to 18 months in a Las Vegas prison and ordered to refund $2.75 million to clients. As a condition for his release, he agreed with the Justice Department to stop using deceptive tactics to market business opportunities and potential profits.

But from 1998 to 2007, including while he was in prison, Neiswonger and two associates were able to run an operation that mass-produced shell companies, prosecutors alleged this summer.

The trio operated a company called APG Marketing and a related firm called APG Inc.; the initials stand for Asset Protection Group. The businesses were at the heart of “an asset and income concealment scheme,” according to a criminal indictment filed July 5 in U.S. District Court in Nevada. They formed more than 2,800 shell companies in Nevada to help more than 1,000 clients evade U.S. taxes. Neiswonger was charged with 30 counts of mail fraud, wire fraud and money laundering.

The operation made elaborate use of shells, prosecutors alleged. One type helped clients conceal ownership of assets via Nevada shell companies. Another helped shift income to Nevada, which has no state corporate or personal income tax, to evade other state and federal taxes. A third moved clients’ cash offshore through a pooled account. To hide clients’ income, they opened at least 900 bank accounts with disguised corporate owners. To create false debts that could be deducted by clients from IRS tax filings, they set up 416 fake liens, the indictment alleged.

At least 69 of Neiswonger’s customers evaded a total of more than $30 million in federal taxes, the IRS alleged. One client was Nashville resident Charles Phillip Maxwell, according to documents filed by the IRS in the FTC’s civil lawsuit.

Maxwell has a history of tussles with the IRS, court records show. In one of his five lawsuits against the tax agency, he claimed to be a citizen of the “Sovereign Republic Tennessee” and therefore exempt from federal taxes. He lost.

Maxwell allegedly used a Nevada shell company called Southland Investments Inc., set up by APG, to hide assets at a time when he owed $8,394.62 in taxes. The IRS sought to collect that amount from a Bank of Nevada account held in the name of Southland. The IRS said internal records from APG showed Maxwell to be the “true account holder.”

Maxwell, 60, denies any ownership in Southland. The federal judge who authorized the IRS to seize funds from the Southland bank account was a “common thief,” Maxwell said in an interview. “There is no such thing as individual liability for income tax,” he said. The IRS declined to comment.

The FTC got wind of Neiswonger’s new operation and filed a civil complaint in April 2006 seeking a fine and a contempt order for violating his previous ban on deceptive marketing.

Neiswonger kept operating the APG scheme until 2007, when the state of Nevada learned of the FTC complaint and revoked the licenses of APG Marketing and APG Inc.

In July 2008, the U.S. District Court in Missouri found Neiswonger in contempt and fined him $3.2 million. A related criminal case was filed this summer; Neiswonger pleaded not guilty. David Chesnoff, an attorney for Neiswonger, said his client was not available to comment.

The case points to a challenge authorities face in policing shell company abuses.

Publicly available court records document Neiswonger’s criminal history. But no states require business-incorporation specialists to be licensed. No state bars convicted felons from forming, selling or representing companies, including people found guilty of tax evasion and other white-collar crimes. In the U.S., white-collar felons are usually deemed to have paid their debt to society and are free to remake their careers after serving their time.


When authorities try to curb the business activities of people with a felony record, they sometimes face roadblocks.

In December 1998, Wayne Andre McMiniment pleaded guilty to wire fraud and was sentenced to 52 months in prison and three years of supervised release, and ordered to refund $1.9 million to clients. In addition to stealing from clients, he helped them evade taxes by creating Nevada shell companies with offshore bank accounts, according to an indictment filed in U.S. District Court in Nevada. McMiniment served three years in a Las Vegas prison.

As part of his probation, the court prohibited McMiniment from “engaging in employment, consulting or any association with any business which acts as an officer, an agent, or nominee director of any corporate entity or business during the period of supervision.”

But prosecutors assert that shortly after his release, McMiniment returned to oversee operations at Nevada First Holdings, an incorporation service headquartered a mile from the Las Vegas Strip.

In October 2003, prosecutors alleged that McMiniment may be using Nevada First Holdings “to engage in the same criminal activities for which he was convicted,” and asked that the court bar him from involvement in the company, according to court records in the case. Judge Philip M. Pro of U.S. District Court in Nevada denied the request. The judge’s order is sealed; it couldn’t be determined why the request was turned down.

Nevada First Holding’s license was revoked last year for failure to file an annual list of officers, according to the Nevada Secretary of State’s office. But the company remains in business.

McMiniment confirmed in an email that Nevada First still provides incorporation and mail-forwarding services. The company is promoting the sale of Nevada corporations and a sophisticated variety of shell company, known as shelf corporations, which can have years of tax filings and other records behind them.

His company has formed or represented 1,170 corporations in Nevada. Of those, 103 are still active, Nevada records show.

A number of clients have run into tax trouble. Nevada First Holdings keeps an address at 1117 Desert Lane in Las Vegas. A review of tax liens and judgments filed against companies registered there found that more than 40 have been subject to demands for payment of more than $1.5 million from state and federal tax collectors and creditors in the past six years. The IRS filed a tax lien for $15,835 against McMiniment last year, and four worth more than $48,000 against Nevada First Holdings since 2008.

The IRS declined to comment.

McMiniment says he runs a legitimate consultancy. “NFH is one of the smallest incorporation companies in Nevada and it has proven to never have violated any laws in the state or its clients,” he said in an email. “My personal pleading of wire fraud had nothing to do with NFH or its clients as later ruled by Judge Pro, who gave me authorization to continue to represent NFH.”

The Secretary of State’s office said that if Nevada First Holdings is proven to be still doing business after having its license revoked, the state may pursue civil penalties.


Until asked about the company’s past, the Secretary of State’s office was unaware of the criminal records of Aaron Young and Lee Morgan, two top executives of incorporation specialist Laughlin Associates.

According to a June 2003 indictment filed in U.S. District Court for the District of Oregon, Young and Morgan helped dozens of people evade U.S. taxes in a scheme led by their mentor, Terry L. Neal, author of a tax-minimization handbook called “The Offshore Advantage.” The trio set up domestic and offshore shell companies to hide income, and then helped clients who controlled the firms file false tax returns, the indictment alleged.

Neal, Young and Morgan provided a smorgasbord of tax-evasion services. These included “income stripping,” the indictment said, in which clients billed fake companies for consulting services that later were falsely deducted as business expenses on tax returns. There were false mortgage loans and fake insurance policies, used to reduce reportable income on tax filings. Clients could park tax-evaded funds in offshore brokerage accounts or group bank accounts, and withdraw money with credit cards tied to offshore banks, the indictment alleged.

Young was indicted on seven counts of tax fraud and conspiracy for allegedly helping clients evade U.S. taxes by hiding assets behind hundreds of shell companies in Nevada and the Caribbean, according to federal court records in Oregon. Morgan was indicted on 12 counts.

“The corporations had no employees, no business premises, and conducted no business,” prosecutors wrote in the indictment.

A year later, Young and Morgan each pleaded guilty to assisting or filing a false tax return. Both served 14 months in prison. Neal, the ringleader, was sentenced to six years.

Neal and Morgan did not respond to requests for comment. Young says he was a bit player in the fraud, and attributes his conviction to “naiveté.”

Today, Young says, Laughlin Associates is “clean as a whistle.” A number of his clients, however, have run into trouble.

Laughlin’s headquarters is located at 2533 North Carson Street in Carson City. A review of tax liens and civil judgments issued in the past 10 years against companies registered at the address found that more than 230 have been the subject of demands from government agencies and other creditors for payment of more than $13.3 million in allegedly outstanding taxes and debts. Some 120 of the liens and judgments have been issued since Young’s release from prison.

Young says the companies hit with tax liens and civil judgments represent only about 2 percent of the 10,000 firms Laughlin has represented in the last 10 years.

The review also identified a publicly traded shell company represented by Laughlin Associates whose shares were targeted in an alleged stock-manipulation scheme.

Laughlin is the registered agent for a New Jersey-based company listed on the over-the-counter market called Euro Solar Parks, according to Nevada state records. Euro Solar describes itself as a builder and operator of solar-energy plants in Europe.

Euro Solar has the hallmarks of a shell company, with few apparent real operations. In its most recent filing with the Securities and Exchange Commission, it reported generating no revenue in the past two years and having assets of just $16,618 as of June. A call to a phone number listed for Euro Solar’s headquarters was answered by a man who said he had no affiliation with the company. The chief executive couldn’t be reached.

In March, federal prosecutors in the Eastern District of New York indicted two stock promoters for attempting to illegally manipulate Euro Solar’s share price. Between February and March of this year, stock promoters Joseph Catapano and Michael Piervinanzi offered an undercover government agent a 30 percent commission to buy, along with other brokers, 3 million shares of Euro Solar and hold the stock at least six months.

Catapano and Piervinanzi, without admitting or denying the allegations, were permanently barred from penny-stock transactions in July and fined an amount to be determined. The Justice Department withdrew criminal charges in September, with the right to refile them later.

Attorneys for Piervinanzi and Catapano said their clients were not available for comment.

Young said authorities hadn’t contacted his firm about the case. “I have no idea what clients do with the corporations they have us form for them,” he said.

The tax-evasion operation of Aaron Young and his associates drew the attention of Senate investigators back in 2006. The Senate’s Permanent Subcommittee for Investigations documented their operation in detail in a report called “Tax Haven Abuses: The Enablers, The Tools and Secrecy”.

Asked if Senate investigators knew Young was back in the incorporation business, a senior staff member involved in preparing the report replied in an email: “Nope. Unbelievable.”

(Additional reporting by Nanette Byrnes in Chapel Hill, North Carolina, Thomas Brown in Miami, Alexander Huebner in Frankfurt, and Jen Rogers and Ruben Ramirez in Reno and Carson City; research assistance by Mary Kivimaki of Westlaw; editing by Michael Williams and Claudia Parsons.)


Spontaneous combustion killed Irish pensioner, inquest rules

Coroner gives first spontaneous combustion verdict in 25-year career after man found dead in unexplained circumstances September 23, 2011by Henry McDonald, Ireland correspondentguardian.co.uk,

            An Irish pensioner found burnt to death at his home died from spontaneous human combustion, an inquest has concluded.

The West Galway coroner, Kieran McLoughlin, said there was no other adequate explanation for the death of 76-year-old Michael Faherty, also known as Micheal O Fatharta. He said it was the first time in his 25 years as a coroner that he had returned such a verdict.

An Irish police crime scene investigator and a senior fire officer told the inquest in Galway that they could not explain how Faherty burned to death. Both said they had not come across such a set of circumstances before.

The assistant chief fire officer, Gerry O’Malley, said fire officers were satisfied that an open fire in Faherty’s fireplace had not been the cause of the blaze.

No trace of an accelerant was found at the scene, and there was no sign that anyone else had entered or left the house in Ballybane, Galway city.

The inquest heard that asmoke alarm in the home of Faherty’s neighbour Tom Mannion had gone off at about 3am on 22 December last year. Mannion said he went outside and saw heavy smoke coming from Faherty’s house. He banged on the front door but got no response, and then banged on the door of another neighbour. Gardai and the fire brigade arrived quickly at the scene.

Garda Gerard O’Callaghan said he went to the house after the fire had been extinguished and found Faherty lying on his back in a sitting room, with his head closest to the fireplace. The rest of the house had sustained only smoke damage.

O’Callaghan told the coroner that the only damage was to Faherty’s remains, the floor underneath him and the ceiling above. .

The inquest heard that fire officers had been unable to determine the cause or the origin of the fire.

The state pathologist, Prof Grace Callagy, noted in her post-mortem findings that Faherty had Type 2 diabetes and hypertension, but concluded he had not died from heart failure.

His body had been extensively burned and, because of the extensive damage to the organs, it was not possible to determine the cause of death.

McLoughlin said: “This fire was thoroughly investigated and I’m left with the conclusion that this fits into the category of spontaneous human combustion, for which there is no adequate explanation.”

Conversations with the Crow

            When the CIA discovered that their former Deputy Director of Clandestine Affairs, Robert T. Crowley, had been talking with author Gregory Douglas, they became fearful (because of what Crowley knew) and outraged (because they knew Douglas would publish eventually) and made many efforts to silence Crowley, mostly by having dozens of FBI agents call or visit him at his Washington home and try to convince him to stop talking to Douglas, whom they considered to be an evil, loose cannon.

                        Crowley did not listen to them (no one else ever does, either) and Douglas made through shorthand notes of each and every one of their many conversation. TBR News published most of these (some of the really vile ones were left out of the book but will be included on this site as a later addendum ) and the entire collection was later produced as an Ebook.

          Now, we reliably learn, various Washington alphabet agencies are trying to find a way to block the circulation of this highly negative, entertaining and dangerous work, so to show our solidarity with our beloved leaders and protectors, and our sincere appreciation for their corrupt and coercive actions, we are going to reprint the entire work, chapter by chapter. (The complete book can be obtained by going to:


Here is the ninety-fourth  chapter

Conversation No. 94


Date: Wednesday, July 30, 1997
Commenced: 11:05 AM CST

Concluded: 11:15 AM CST 

GD: Good morning, Robert. Anything new to report?

RTC: Quiet here. Pleasant to have quiet after the constant uproar at the office but there are times when I really miss it.

GD: Noise and uproar never bothered me at all. Bad food does, however, I had a chicken paprikash last night and it did not sit well.

RTC: Paprikash?
GD: Hungarian  chicken with paprika. Cook it in a pan with butter, onions and paprika. I developed a liking for it when I was living in Munich but this one was not good. Stringy chicken. Could have been cat but I won’t eat there again.

RTC: That’s right. You lived in Munich, didn’t you?
GD: Yes, for a long time, there or nearby.

RTC: We had a large base there. Dealt with the Czechs.

GD: I know about your operations there. Christ, you people were about as subtle as a fart in a space suit. You had Radio Free Liberty or whatever out at Holzkirchen and by the English Garden. And at Stachus….sorry, Karlsplatz, you had a export office that everyone from the whores to the cab drivers knew was the CIA office. Once paid a wino to crap on their doorstep. Oh, and the Hungarian fellow. I should tell you about that one. I knew this very nice, very old- family lady. I mean a real lady, old family. Anyway, she met this Hungarian who was selling gold coins and whatnot and the long and the short of it was the asshole stiffed her for a lot of money for fake gold coins and jewelry. She went to the police but they did nothing. I knew one or two very senior police people so I spoke very seriously with one of them. Told me they knew all about the swine but couldn’t touch him because he was a top CIA person. Maybe they couldn’t touch him but I certainly could. Critchlow…I think it was that one…anyway, I set out to get back the money. I met this slimy crud in a coin shop, not by accident, and struck up a nice conversation with him. I should tell you that I know more about gold than he ever could but I let him think I was a dumb, rich American. He was incorrect on two of the three impressions. Oh my, he did get interested in me. I also went to his apartment to deal with him and then, armed with my information, I went to see some Turkish friends. Turks, Robert, can be very mean and my friends were no exception. Details are not necessary here but I told the Turks this jerk was on to their smuggling operations and was going to have them arrested so they went after him. As I recall, though I was having dinner with my police official at the time, he was walking across the bridge down by the German Museum when some bad person came up behind him, cut his throat and chunked him over the parapet and down into the Isar. I should have added that it was winter and the river was frozen on the surface but the Budapest Kid went right through the ice. They found him in the spring, down by the dam. I must confess that after dining with the police gentleman, I spoke briefly with one of my really keen Turkish friends and we broke into the Hunky’s pad and stripped it. I got a lot of gold, some folders with interesting papers, a small radio, two silenced pistols and other things we really don ‘t need to discuss. The Turk got quite a bit of gold and some awful Japanese pornography. I don’t think ten year old Asian girls being banged by well-hung Negros is really nice but the others thought so and who can dispute tastes after all? He and his cousin came back later with a truck and took all the furniture and even the toilet and a washbasin. I know about this because later, my police friend asked me about the terrible vanishing of the CIA man and the rape of his apartment. Of course I knew nothing but I did give the lady all of her money back with a warning to her son, who was in their foreign office, to keep a good watch on his mother in future. I told him what happened and he and I had a good laugh  I knew him for years and we used to go shooting together and I had no problem telling him about it. Such a fuss from your people. They thought the Russians had kidnapped him. But in the spring, they found him stuck in the dam grill, all mixed up with a few equally rotting dead pets and an aborted fetus or two. Closed coffin and a nice ceremony.

RTC: You mentioned finding some papers. I don’t care about the silenced pistols but the fate of the papers interests me. From a purely abstract but professional point of view, you understand.

GD: Oh, I understand your abstract interest. As an abstract answer, I sold them to interested parties. Kept me in rent and food money for a number of months, I must say. My lady friend was happy and so were my pleasant Turkish friends. The Hungarian was not happy but the Hungarian was a lying, thieving sack of shit and much better off dead and bobbing around deep in the cold river. The Turks found his bed very comfortable but I never enquired about the fate of the toilet. There are some things best left strictly alone. And so much for my Hungarian adventures.

(Concluded at 11;15 AM CST)


Dramatis personae: 


James Jesus Angleton: Once head of the CIA’s Counterintelligence division, later fired because of his obsessive and illegal behavior, tapping the phones of many important government officials in search of elusive Soviet spies. A good friend of Robert Crowley and a co-conspirator with him in the assassination of President Kennedy

            James P. Atwood: (April 16, 1930-April 20, 1997) A CIA employee, located in Berlin, Atwood had a most interesting career. He worked for any other intelligence agency, domestic or foreign, that would pay him, was involved in selling surplus Russian atomic artillery shells to the Pakistan government and was also most successful in the manufacturing of counterfeit German dress daggers. Too talkative, Atwood eventually had a sudden, and fatal, “seizure” while lunching with CIA associates.

            William Corson: A Marine Corps Colonel and President Carter’s representative to the CIA. A friend of Crowley and Kimmel, Corson was an intelligent man whose main failing was a frantic desire to be seen as an important person. This led to his making fictional or highly exaggerated claims.

            John Costello: A British historian who was popular with revisionist circles. Died of AIDS on a trans-Atlantic flight to the United States.

            James Critchfield: Former U.S. Army Colonel who worked for the CIA and organizaed the Cehlen Org. at Pullach, Germany. This organization was filled to the Plimsoll line with former Gestapo and SD personnel, many of whom were wanted for various purported crimes. He hired Heinrich Müller in 1948 and went on to represent the CIA in the Persian Gulf.

            Robert T. Crowley: Once the deputy director of Clandestine Operations and head of the group that interacted with corporate America. A former West Point football player who was one of the founders of the original CIA. Crowley was involved at a very high level with many of the machinations of the CIA.

            Gregory Douglas: A retired newspaperman, onetime friend of Heinrich Müller and latterly, of Robert Crowley. Inherited stacks of files from the former (along with many interesting works of art acquired during the war and even more papers from Robert Crowley.) Lives comfortably in a nice house overlooking the Mediterranean.

            Reinhard Gehlen: A retired German general who had once been in charge of the intelligence for the German high command on Russian military activities. Fired by Hitler for incompetence, he was therefore naturally hired by first, the U.S. Army and then, as his level of incompetence rose, with the CIA. His Nazi-stuffed organization eventually became the current German Bundes Nachrichten Dienst.

            Thomas K. Kimmel, Jr: A grandson of Admiral Husband Kimmel, Naval commander at Pearl Harbor who was scapegoated after the Japanese attack. Kimmel was a senior FBI official who knew both Gregory Douglas and Robert Crowley and made a number of attempts to discourage Crowley from talking with Douglas. He was singularly unsuccessful. Kimmel subsequently retired, lives in Florida, and works for the CIA as an “advisor.”

            Willi Krichbaum: A Senior Colonel (Oberführer) in the SS, head of the wartime Secret Field Police of the German Army and Heinrich Müller’s standing deputy in the Gestapo. After the war, Krichbaum went to work for the Critchfield organization and was their chief recruiter and hired many of his former SS friends. Krichbaum put Critchfield in touch with Müller in 1948.

            Heinrich Müller: A former military pilot in the Bavarian Army in WWI, Müller  became a political police officer in Munich and was later made the head of the Secret State Police or Gestapo. After the war, Müller escaped to Switzerland where he worked for Swiss intelligence as a specialist on Communist espionage and was hired by James Critchfield, head of the Gehlen Organization, in 1948. Müller subsequently was moved to Washington where he worked for the CIA until he retired.

            Joseph Trento: A writer on intelligence subjects, Trento and his wife “assisted” both Crowley and Corson in writing a book on the Russian KGB. Trento believed that he would inherit all of Crowley’s extensive files but after Crowley’s death, he discovered that the files had been gutted and the most important, and sensitive, ones given to Gregory Douglas. Trento was not happy about this. Neither were his employers.

            Frank Wisner: A Founding Father of the CIA who promised much to the Hungarians and then failed them. First, a raging lunatic who was removed from Langley, screaming, in a strait jacket and later, blowing off the top of his head with a shotgun.

            Robert Wolfe: A retired librarian from the National Archives who worked closely with the CIA on covering up embarrassing historical material in the files of the Archives. A strong supporter of holocaust writers specializing in creative writing. Although he prefers to be called ‘Dr,’ in reality he has no PhD.

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