The Rag Blog

“If Obama were to somehow prevail on election night, I would be OJ Simpson-acquittal shocked…The awe part wouldn’t kick in until a few months later…If he actually lived aaaall the way from election night to the inauguration, I would be so awed I’d lead an anti-affirmative action protest in front of the NAACP’s national headquarters.” — Sean Gonsalves

I wrote that in December 2006 and if Obama’s campaign continues to roll, I just might be in front of the NAACP’s Baltimore headquarters in the days following the inauguration of America’s first black president.

That’s if (I said IF), Obama wins — and survives all the way to the inauguration.

I know. It’s a horrible thought. Survive all the way to inauguration? But, honestly — are you telling me it hasn’t run through your mind, especially with all of these comparisons to JFK and MLK?

I wasn’t even alive when John and Martin were around and I’ve wondered, once or twice, whether Barack should move around a lot – maybe throw in a head-fake, here and there — whenever he speaks in public.

Recognize: it takes courage to be in Obama’s very public place. Even a soldier like Colin Powell said no to that call.

In the May 1996 issue of Ladies Home Journal (what can I say, I read a lot), Powell’s wife, Alma, put into words the echo that still emanates from the Lorraine Motel balcony, 40 years after King’s murder.

“You think everybody loves Colin Powell,” she said. “Everybody doesn’t like Colin Powell…I don’t want to describe the hate mail we’ve gotten…A black man running for president is going to be in a dangerous position.”

Not that I’m trying to divide Obamanation, as the superdelegate situation has the potential to do, but, in case you haven’t noticed because of the unfolding Obamanomenom (or maybe you’ve just been feeling Barackward lately), this is Black History Month.

But, let’s do this the left-handed way and look beyond black history to imagine the future of black history, which is to say American history. For you righties, I’ll translate: Instead of thinking about historical “progress” as if it moves forward in linear fashion, let’s think about history as a geometrical shape, like a circle.

Recently, among my multi-racial circle of friends, political discussion turned to the Obama effect on the future of black history. If Obama is elected, does that mean black history (in America) has come full circle?

Of course, an Obama presidency would not put an end to racism, especially the institutional kind. But it would likely mean whatever political support that remains for affirmative action and other race-conscious policies will dry up like a raisin in the sun.

So, on the one hand, Obama in the White House is not quite the same thing as making it to Martin’s mountaintop. I mean, unless a person thinks African-Americans are inferior, which is the very definition of racism, you can’t say were beyond “the race problem” when black folk are disproportionately in jail, out of school, unemployed and in debt. And none of that is likely to significantly change under an Obama administration — without a mass movement behind it, as Barack has pointed out ad naseum on the campaign trail, even if the point is lost on those who criticize his hope talk.

On the other hand, an Obama presidency would definitely be a huge leap forward on several fronts, to the point where it could very well signify the Civil Rights Movement (dormant since King’s death but still very much alive in our political culture), has come full circle.

And that would be a good thing because when Martin was on the mountaintop, preaching the night before his assassination, King looked to the future of American history and saw beyond the color line — to the horizon of economic justice.

“It’s all right to talk about ‘long white robes over yonder,’ in all of its symbolism,” he said. “But ultimately people want some suits and dresses and shoes to wear down here. It’s alright to talk about ‘streets flowing with milk and honey,’ but God has commanded us to be concerned about the slums down here, and his children who can’t eat three square meals a day.”

So like I was saying, if — if – Obama wins, and the ghosts of black history don’t condemn us to repeat the Sixties, I guess I’ll be in front of NAACP HQ in the days following the inauguration, holding a sign that’ll read: “No to race-based affirmative action.”

The other side will say: “Yes to a class-based affirmative action.”

There’s a man in Florida who has been writing to me for years (ten pages, handwritten) though I’ve never met him. He tells me the kinds of jobs he has held-security guard, repairman, etc. He has worked all kinds of shifts, night and day, to barely keep his family going. His letters to me have always been angry, railing against our capitalist system for its failure to assure “life, liberty, the pursuit of happiness” for working people.

Just today, a letter came. To my relief it was not handwritten because he is now using e-mail: “Well, I’m writing to you today because there is a wretched situation in this country that I cannot abide and must say something about. I am so enraged about this mortgage crisis. That the majority of Americans must live their lives in perpetual debt, and so many are sinking beneath the load, has me so steamed. Damn, that makes me so mad, I can’t tell you. . . . I did a security guard job today that involved watching over a house that had been foreclosed on and was up for auction. They held an open house, and I was there to watch over the place during this event. There were three of the guards doing the same thing in three other homes in this same community. I was sitting there during the quiet moments and wondering about who those people were who had been evicted and where they were now.”

On the same day I received this letter, there was a front-page story in the Boston Globe, with the headline “Thousands in Mass. Foreclosed on in ‘07.”

The subhead was “7,563 homes were seized, nearly 3 times the ‘06 rate.”

A few nights before, CBS television reported that 750,000 people with disabilities have been waiting for years for their Social Security benefits because the system is underfunded and there are not enough personnel to handle all the requests, even desperate ones.

Stories like these may be reported in the media, but they are gone in a flash. What’s not gone, what occupies the press day after day, impossible to ignore, is the election frenzy.

This seizes the country every four years because we have all been brought up to believe that voting is crucial in determining our destiny, that the most important act a citizen can engage in is to go to the polls and choose one of the two mediocrities who have already been chosen for us. It is a multiple choice test so narrow, so specious, that no self-respecting teacher would give it to students.

And sad to say, the Presidential contest has mesmerized liberals and radicals alike. We are all vulnerable.

Is it possible to get together with friends these days and avoid the subject of the Presidential elections?

The very people who should know better, having criticized the hold of the media on the national mind, find themselves transfixed by the press, glued to the television set, as the candidates preen and smile and bring forth a shower of clichés with a solemnity appropriate for epic poetry.

Even in the so-called left periodicals, we must admit there is an exorbitant amount of attention given to minutely examining the major candidates. An occasional bone is thrown to the minor candidates, though everyone knows our marvelous democratic political system won’t allow them in.

No, I’m not taking some ultra-left position that elections are totally insignificant, and that we should refuse to vote to preserve our moral purity. Yes, there are candidates who are somewhat better than others, and at certain times of national crisis (the Thirties, for instance, or right now) where even a slight difference between the two parties may be a matter of life and death.

I’m talking about a sense of proportion that gets lost in the election madness. Would I support one candidate against another? Yes, for two minutes-the amount of time it takes to pull the lever down in the voting booth.

But before and after those two minutes, our time, our energy, should be spent in educating, agitating, organizing our fellow citizens in the workplace, in the neighborhood, in the schools. Our objective should be to build, painstakingly, patiently but energetically, a movement that, when it reaches a certain critical mass, would shake whoever is in the White House, in Congress, into changing national policy on matters of war and social justice.

Let’s remember that even when there is a “better” candidate (yes, better Roosevelt than Hoover, better anyone than George Bush), that difference will not mean anything unless the power of the people asserts itself in ways that the occupant of the White House will find it dangerous to ignore.

The unprecedented policies of the New Deal-Social Security, unemployment insurance, job creation, minimum wage, subsidized housing-were not simply the result of FDR’s progressivism. The Roosevelt Administration, coming into office, faced a nation in turmoil. The last year of the Hoover Administration had experienced the rebellion of the Bonus Army-thousands of veterans of the First World War descending on Washington to demand help from Congress as their families were going hungry. There were disturbances of the unemployed in Detroit, Chicago, Boston, New York, Seattle.

In 1934, early in the Roosevelt Presidency, strikes broke out all over the country, including a general strike in Minneapolis, a general strike in San Francisco, hundreds of thousands on strike in the textile mills of the South. Unemployed councils formed all over the country. Desperate people were taking action on their own, defying the police to put back the furniture of evicted tenants, and creating self-help organizations with hundreds of thousands of members.

Without a national crisis-economic destitution and rebellion-it is not likely the Roosevelt Administration would have instituted the bold reforms that it did.

Today, we can be sure that the Democratic Party, unless it faces a popular upsurge, will not move off center. The two leading Presidential candidates have made it clear that if elected, they will not bring an immediate end to the Iraq War, or institute a system of free health care for all.

They offer no radical change from the status quo.

They do not propose what the present desperation of people cries out for: a government guarantee of jobs to everyone who needs one, a minimum income for every household, housing relief to everyone who faces eviction or foreclosure.

They do not suggest the deep cuts in the military budget or the radical changes in the tax system that would free billions, even trillions, for social programs to transform the way we live.

None of this should surprise us. The Democratic Party has broken with its historic conservatism, its pandering to the rich, its predilection for war, only when it has encountered rebellion from below, as in the Thirties and the Sixties. We should not expect that a victory at the ballot box in November will even begin to budge the nation from its twin fundamental illnesses: capitalist greed and militarism.

So we need to free ourselves from the election madness engulfing the entire society, including the left.

Yes, two minutes. Before that, and after that, we should be taking direct action against the obstacles to life, liberty, and the pursuit of happiness.

For instance, the mortgage foreclosures that are driving millions from their homes-they should remind us of a similar situation after the Revolutionary War, when small farmers, many of them war veterans (like so many of our homeless today), could not afford to pay their taxes and were threatened with the loss of the land, their homes. They gathered by the thousands around courthouses and refused to allow the auctions to take place.

The evictions today of people who cannot pay their rents should remind us of what people did in the Thirties when they organized and put the belongings of the evicted families back in their apartments, in defiance of the authorities.

Historically, government, whether in the hands of Republicans or Democrats, conservatives or liberals, has failed its responsibilities, until forced to by direct action: sit-ins and Freedom Rides for the rights of black people, strikes and boycotts for the rights of workers, mutinies and desertions of soldiers in order to stop a war.

Voting is easy and marginally useful, but it is a poor substitute for democracy, which requires direct action by concerned citizens.

Howard Zinn is the author of “A People’s History of the United States,” “Voices of a People’s History” (with Anthony Arnove), and most recently, “A Power Governments Cannot Suppress.”

Tuesday’s Democratic primaries saw Barack Obama racking up over 60 percent of the white male vote in Wisconsin, riding an unprecedented historical demographic anomaly that will likely send him to the White House – barring a third consecutive general election theft by the Republicans. It appears Hillary Clinton’s goose is cooked.

Once whites demonstrated their willingness to vote for a “certain type” of Black man, in Iowa back in January, it was a foregone conclusion that African Americans would line up in overwhelming numbers behind the Illinois Senator. Before then, all that had held back the tides of Black mass commitment to Obama’s candidacy were lingering doubts that whites would support any “type” of Black person’s elevation to the nation’s highest office. When that dam broke, the African American celebration began. After 400 years in slave hell and Jim Crow purgatory, we’ve finally got a chance! Or so the crowd believes.

Obama wasn’t taking any chances. His strategy from the very beginning has been to flip the historical script by appealing directly to the most backward demographic in electoral politics: white males. This “white male strategy” – smelling eerily of a previous Republican “southern strategy” – required constant assurances to white men that Obama’s run would signal the end of race as a point of political contention in the United States. No longer would whites, especially males, be compelled to answer for their privileged status. A 40-plus year annoyance was nearly over, since Blacks had “already come 90 percent of the way” to equality. Obama told them so.

Reagan-loving whites – especially the white men who have always led the “backlash” against real and perceived African American gains – found themselves wooed by a Black man who understood their sense of revulsion at “the excesses of the Sixties and Seventies.” Wow! That’s the kind of change we’ve been waiting for, exclaimed increasing numbers of white males. A new day beckoned, free at last of psychological harassment from the likes of Reverends Jesse and Al.

Obama is a world-class wooer. His white male wooing is made much easier by the fact that those who consider themselves his “sisters” and “brothers” demand nothing whatsoever from him. Just come home when you get ready, brother. Obama is free to concentrate his attentions on the hard-to-get demographics, especially white men with their peculiar notions of “change.” No need for Obama to promise the hood a damn thing, except that he’ll cut a dashing figure in the Oval Office and make the homefolks proud that he’s there, symbolically representing them.

Republicans and GOP-leaning “independents” (meaning, deep-dyed whites) are crossing over in herds to vote for Obama. They’ve gotten the message: happy days are here again, when the darkies smiled and were careful not to hurt our feelings by telling the truth. That’s the kind of “change” we’ve always “hoped” for, by golly!

The white liberal/left, ineffectual and geographically scattered, are drawn irresistibly to the Black man who regales them with sweet nothings – literally, nothing in the way of the concrete policies for peace and social justice they claim to champion. His presence in their midst is enough. Besides, Obama is someone who is “capable of forging a progressive majority,” they say.

That’s a strange concept, since Obama doesn’t act like a progressive, or claim to be one. But he has no problem with folks gathering around him. He’s a real party guy.

The no-nonsense white men that rule society and cling to ownership of the world were harder nuts to crack; you’ve got to sign a prenuptial to get skin-tight with them. No problem. Before Obama even began to strut on the national runway, he’d won the approval of the Wall Street and military/industrial (and nuclear power) branches of the Money Family. Run-of-the-mill citizens will be barred from state court relief, so as not to jam up big corporations with their silly lawsuits. Energy companies can count on their usual subsidies. The “sanctity of contracts” will not be violated to save homeowners from foreclosure, no matter how deep the credit crisis becomes. The voracious military will be fed an additional 92,000 soldiers and Marines, regardless of what happens in Iraq, to be available for more wars. Most importantly – and this is the really smooth part of Obama’s game – the ever-increasing military budget will make moot all of Barack’s and Hillary’s (near identical) promises about health care, affordable housing, the whole public agenda that has been dangled in front of those fans and groupies in the cheap seats.

Once he gets in office, many of the swooners will find out that he’s already married to the Power Mob.

But that’s OK. Obama knows his most enthusiastic supporters – the ones that claim him as their own as a matter of blood – will stick by him without complaint. Hell, their “leaders” show every sign of allowing him to wine and dine and make promises to everybody else BUT them, at least until he is comfortably in office – maybe for the entirety of his first term. For the time being, though, Black folks aren’t even hearing what he’s saying to the white men or anybody else – they’re just enjoying the music: “It’s been a long, a long time coming, but I know, a change gonna come.”

Oh no it ain’t.

I would not have thought that the coverage of the US presidential campaign could get more shallow and meaningless, and then, along comes the plagiarism story.

OMG! Barack Obama, the silver-tongued front-runner for the Democratic presidential nomination, lifted a couple of lines and an idea from the black governor of Massachusetts, Deval Patrick. Patrick, himself something of a wordsmith, had been hit with the same attack by a wooden opponent, and responded by saying that words matter, and citing Martin Luther King’s famous “I have a dream” line and the Declaration of Independence’s ringing “all men are created equal.”

Obama, whose oratorical skills have left the robotic and monotonous Hillary Clinton sounding like a pull-string Barbie on the stump (remember “Math is hard!”?), has had the Clinton campaign frantically casting around for a rejoinder, and the best they could come up with to date was a charge that he’s “all hat and no cattle” (itself a line lifted, uncredited, from Texas populist Jim Hightower, if I recall, though I think it has an older lineage among Texans, and has been appropriately applied to President Bush on numerous occasions). Obama decided to respond using some of Patrick’s lines.

Now, one could argue that Obama would have been better advised to give fair attribution to Gov. Patrick, but since when have politicians gone around putting footnotes on their public speeches? Most political speeches are exercises in cut and paste, full of regurgitated pablum and lifted quotes. If plagiarism were a political crime, 90 percent of members of Congress would be out on their ears. (For that matter, if plagiarism were a crime, Hillary Clinton herself would be behind bars. Her book, “It Takes a Village,” was largely written by Barbara Feinman, a Georgetown University journalism prof who was reportedly offered $120,000 for the job, but her name appeared nowhere in the volume, which Clinton still claims as her own work.)

Besides, come on now! We’re not nominating an English professor, god knows. If we were, how the hell would we have had Bush for president for the last what seems like eternity, with his maddening use of the word “nukular,” his drunken “sh” slurs all over the place, his grammatical atrocities, and his mangled quotes (remember “if you fool me once…”?)?

Excuse me, but we have a criminal $1-trillion war raging in Iraq that is sucking the lifeblood out of the American economy, killing American troops by the day and slaughtering innocent Iraqis by the hundred thousands, we have an economy that’s racing for the toilet like a party-goer who ate too many bad shrimps, we have bridges collapsing, we have the North Pole ice vanishing faster than Bush’s credibility, and the media are focussed laser-like on what? The momentious question of whether Obama lifted a quote from Gov. Patrick without acknowledgement?

We have Democrats trying to decide whether to select a woman senator who used insider information to make a killing in cattle futures, who has accepted massive donations from the healthcare industry and military contractors, who voted enthusiastically if cynically for George Bush’s Iraq War, and whose husband wants nothing more than a new shot at some eager White House interns, or a black senator who spoke out against that war before it happened, when to do so was to risk being called a traitor by the Commander in Chief and his minions, and the best our vaunted “independent” media pundits can do is what? Accuse Obama of plagiarism?

We could use some reporting on Clinton’s and Obama’s corporate backing, on the key people advising them on foreign affairs and domestic economic policy, some serious challenges on how each candidate will actually address climate change issues, and on how they can do anything without attacking the out-of-control military budget. Instead, we get this “big” plagiarism story as the main event of the Wisconsin primary.

Thank you, Fourth Estate, for making us a well-informed citizenry.

In his victory speech in Texas Tuesday, Barack Obama promised to end the Iraq war in 2009, a new commitment that parallels recent opinion pieces in The Nation.

Prior to his Houston remarks, Obama’s previous position favored an American combat troop withdrawal over a sixteen-to-eighteen-month timeframe. He has been less specific on the number and mission of any advisers he would leave behind.

Ending the war in the first year of his potential presidency, therefore, is the strongest stand Obama has taken thus far, and one he will be questioned on sharply by the Republicans and the media. As Juan Cole noted last year, the Bush-Cheney team is preparing a “poison pill” of disorder and blame for any future President contemplating an Iraq troop withdrawal.

Did Obama mean it? Was it only rhetoric? Perhaps, but as Obama has said over and over lately, words make a difference. He may be asked to square his 2009 goal with his previous eighteen-month timetable. To avoid inconsistencies or missteps, he might claim that he will publicly declare in 2009 that he is ending the occupation but bringing the troops home on his longer timetable. Who knows? But these were words worth holding the candidate to. The astonishing thing is that antiwar sentiment among Obama’s base is running strongly enough to push the candidate forward to a stronger commitment. By comparison, in The Audacity of Hope (2006), Obama wrote that “how quickly a complete withdrawal can be accomplished is a matter of imperfect judgment based on a series of best guesses.”

The Iraq war, and the so-called war on terrorism, are now guaranteed to loom large in the likely battle between Obama and John McCain. The American experience, first with Vietnam and now with Iraq, provides a strong reservoir of support for Obama’s skeptical position from 2002 until the present time. But McCain’s personal experience as a tough Navy pilot and prisoner of war makes him much more formidable than Hillary Clinton as a “national security” advocate against Obama. McCain’s remarks last night were focused entirely on Obama’s lack of experience in foreign affairs, and should be a wake-up call to the peace movement to become more engaged in the presidential election.

Obama faces two immediate tests aside from the primary contests ahead. First, sometime in April, General David Petraeus will be testifying in Washington that the conditions are improving in Iraq and that the United States must “stay the course.” Petraeus will be acting as a de facto surrogate for McCain in domestic politics. Obama will have to respond to the general’s serious claims without retreating from the commitment he has given to early withdrawal.

Second, the questions of Afghanistan, Iran and Pakistan could intensify as a symbol of America’s current policies towards terrorism. McCain has already absorbed both neoconservative doctrines and the neoconservatives themselves in his campaign against “Islamo-fascism” as the greatest threat in American history.

First, the neoconservatives will push for Obama’s (and the Democrats’) acceptance of their terminology to control the debate, or berate their opponents as weak for not recognizing “Islamo-fascism” as the new equivalent of the Communist threat during the cold war.

Next, they will attack Obama for proposing to pull the plug on Iraq just when the tide is turning.

Finally, they will question Obama’s experience in pushing for diplomacy towards Iran, and draw him out on why he favors more troops in Afghanistan and a pre-emptive strike against Pakistan if there is “actionable intelligence.” They will probe, too, into Obama’s commitment to Israel.

It will be messy and ugly, with right-wingnuts calling Obama by his middle name as often as possible.

Weeks before Obama became the front-runner, the New York Times hired William Kristol as another in-house neoconservative, as Kristol was blasting the Democratic Party for becoming “the puppet of the antiwar groups.” The Times’s own “objective” news commentary adopted the right-wing frame that the Democrats would “seem unpatriotic” by cutting funds for American troops while “under intense pressure from the antiwar faction [read: majority] of their party.” Wedge politics virtually dictates that splintering the Obama campaign, the Democrats and the antiwar movement, while uniting the right and center around “experience,” will be the strategic agenda for Republicans through November. If he is not the vice-presidential candidate, Joe Lieberman will be employed as the primary ally of the Republicans in trying to make inroads into the American Jewish community as well.

But there are Republican weaknesses to expose too, beginning with their attempt to perpetuate an endless trillion-dollar war in Iraq. MoveOn and others will strike hard at that Republican vulnerability. According to counterinsurgency doctrine, the current Iraq war is expected to last throughout the next presidential term, longer than most Americans can imagine supporting it. On Iran, the recent National Intelligence Estimate has dampened any White House plans for an American strike, though the Israelis may act as a dangerous surrogate before December.

Then there is the quagmire of Afghanistan, where no military solution is in sight. And finally, in Pakistan, $11 billion invested in the Musharraf regime was swept away by the voters yesterday. The Pakistanis do not want to be pawns in the American war on terrorism. They know that a military fight with the Taliban or Al Qaeda is also a bottomless battle against Pashtun nationalism with implications for Pakistan’s stability as a whole.

The danger for Obama lies in being challenged by McCain, the neoconservatives and the right-wing conservatives to prove his credentials as a militarist or face being painted as another Democrat too weak to be Commander-in-Chief.

The opportunity for the peace movement is to engage in open political and intellectual battle, from precincts to public forums, against the neoconservative agenda for a permanent war against Muslim radicals and on behalf of American access to oil with dire consequences at home.

From prostitutes to Super bowl tickets, a federal probe reveals how contractors in Iraq cheated the U.S.

21/02/08 ” Chicago Tribune” — — ROCK ISLAND, Ill.—Inside the stout federal courthouse of this Mississippi River town, the dirty secrets of Iraq war profiteering keep pouring out.

Hundreds of pages of recently unsealed court records detail how kickbacks shaped the war’s largest troop support contract months before the first wave of U.S. soldiers plunged their boots into Iraqi sand.

The graft continued well beyond the 2004 congressional hearings that first called attention to it. And the massive fraud endangered the health of American soldiers even as it lined contractors’ pockets, records show.

Federal prosecutors in Rock Island have indicted four former supervisors from KBR, the giant defense firm that holds the contract, along with a decorated Army officer and five executives from KBR subcontractors based in the U.S. or the Middle East. Those defendants, along with two other KBR employees who have pleaded guilty in Virginia, account for a third of the 36 people indicted to date on Iraq war-contract crimes, Justice Department records show.

On Wednesday, a federal judge in Rock Island sentenced the Army official, Chief Warrant Officer Peleti “Pete” Peleti Jr., to 28 months in prison for taking bribes. One Middle Eastern subcontractor treated him to a trip to the 2006 Super Bowl, a defense investigator said.

Prosecutors would not confirm or deny ongoing grand jury activity. But court records identify a dozen FBI, IRS and military investigative agents who have been assigned to the case. Interviews as well as testimony at the sentencing for Peleti, who has cooperated with authorities, suggest an active probe.

Rock Island serves as a center for the probe of war profiteering because Army brass at the arsenal here administer KBR’s so-called LOGCAP III contract to feed, shelter and support U.S. soldiers, and to help restore Iraq’s oil infrastructure.

In one case, a freight-shipping subcontractor confessed to giving $25,000 in illegal gratuities to five unnamed KBR employees “to build relationships to get additional business,” according to the man’s December 2007 statement to a federal judge in the Rock Island court. Separately, Peleti named five military colleagues who allegedly accepted bribes. Prosecutors also have identified three senior KBR executives who allegedly approved inflated bids. None of those 13 people has been charged.

A common thread runs through these cases and other KBR scandals in Iraq, from allegations the firm failed to protect employees sexually assaulted by co-workers to findings that it charged $45 per can of soda: The Pentagon has outsourced crucial troop support jobs while slashing the number of government contract watchdogs.

The dollar value of Army contracts quadrupled from $23.3 billion in 1992 to $100.6 billion in 2006, according to a recent report by a Pentagon panel. But the number of Army contract supervisors was cut from 10,000 in 1990 to 5,500 currently.

Last week, the Army pledged to add 1,400 positions to its contracting command. But even those embroiled in the frauds acknowledge the impact of so much war privatization.

“I think we downsized past the point of general competency,” said subcontractor Christopher Cahill, who for a decade prepared military supply depots under LOGCAP. Now serving 30 months in federal prison for fraud, Cahill added: “The point of a standing army is to have them equipped.”

KBR, a former subsidiary of Halliburton Co., says it has been paid $28 billion under LOGCAP III. The firm says it quickly reports all instances of suspected fraud and has repaid the Defense Department more than $1 million for questionable invoices.

In a statement, KBR said its roughly 20,000 employees and 40,000 subcontractors have performed laudably in a war zone where Army demands shift rapidly and local suppliers don’t always maintain ledger books. Spokeswoman Heather Browne wrote: “Ethics and integrity are core values for KBR.”

But a wiretapped transcript recently released in Rock Island underscores the brazen nature of the exceptions.

In October 2005, with federal agents tailing them, three war contractors slipped through London’s posh Cumberland hotel before meeting in a quiet lounge. For the rest of that afternoon, the men sipped cognac and whiskey and discussed the bribes that had greased contracts to supply U.S. troops in Iraq.

Former KBR procurement manager Stephen Seamans, who was wearing a wire strapped on by a Rock Island agent, wondered aloud whether to return $65,000 in kickbacks he got from his two companions, executives from the Saudi conglomerate Tamimi Global Co.

One of the men, Tamimi operations director Shabbir Khan, urged him to hide the money by concocting phony business records.

“Just do the paperwork,” Khan said.

Party houses, prostitutes

In October 2002, five months before the U.S.-led invasion of Iraq, Khan threw a birthday party for Seamans at a Tamimi “party house” near the Kuwait base known as Camp Arifjan. Khan “provided Seamans with a prostitute as a present,” Rock Island prosecutors wrote in court papers. Driving Seamans back to his quarters, Khan offered kickbacks that would total $130,000.

Five days later, with Seamans and Khan hammering out the fine print, KBR awarded Tamimi the war’s first $14.4 million mess hall subcontract, court records show.

In April 2003, as American troops poured into Iraq, Seamans gave Khan inside information that enabled Tamimi to secure a $2 million KBR subcontract to establish a mess hall at a Baghdad palace. Seamans submitted change orders that inflated that subcontract to $7.4 million.

By June, Seamans and fellow KBR procurement manager Jeff Mazon, a Country Club Hills resident, had executed subcontracts worth $321 million. At least one deal put U.S. soldiers at risk.

The Army LOGCAP contract required KBR to medically screen the thousands of kitchen workers that subcontractors like Tamimi imported from impoverished villages in Nepal, Pakistan, India and Bangladesh.

But when Pentagon officials asked for medical records in March 2004, Khan presented “bogus” files for 550 Tamimi workers, Assistant U.S. Atty. Jeffrey Lang said in a court hearing last year.

KBR retested those 550 workers at a Kuwait City clinic and found 172 positive for exposure to hepatitis A, Lang told the judge. Khan tried to suppress those findings, warning the clinic director that Tamimi would do no more business with his medical office if he “told KBR about these results,” Lang said in court. The infectious virus can cause fatigue and other symptoms that arise weeks after contact.

Retesting of the 172 found that none had contagious hepatitis A, Lang said, and Khan’s attorneys said in court that no soldiers caught diseases from the workers or from meals they prepared. It remains unclear if that is because the workers were treated or because they did not remain infectious after the onset of symptoms.

Still, the incident shows how even mundane meal contracts can put troops at risk. Similar disease-testing breaches cropped up at cafeterias outsourced to firms besides Tamimi, former KBR Area Supervisor Rene Robinson said in a Tribune interview.

“That was an ongoing problem,” Robinson said. “When the military asked for paperwork, it was spotty.” KBR was forced to begin vaccinating the employees at their work sites, he added.

Tamimi and its U.S. lawyers did not respond to requests for comment. The company has said it is cooperating with federal authorities.

By July 2005, Tamimi had secured some 30 KBR troop feeding subcontracts worth $793.5 million, records show. Khan continued to negotiate Iraq war subcontracts for Tamimi until shortly before he was arrested in Rock Island in March 2006.

He is now serving a 51-month prison sentence for lying to federal agents about the kickbacks he wired to Seamans, who pleaded guilty and served a year and a day in prison. Both declined to comment.

Seamans, a 46-year-old Air Force veteran, once taught ethics to junior KBR employees. At his December 2006 sentencing hearing, he expressed remorse for taking the kickbacks, telling the judge: “It is not the way that Americans do business.”

It was another repentant LOGCAP veteran standing before a Rock Island judge on Wednesday. Peleti, formerly the military’s top food service adviser for the Middle East, wept as he admitted taking bribes from Tamimi and three other subcontractors between 2003 and early 2006.

Ribbons and badges glittered across Peleti’s pressed green Army shirt. “I stand here before you today to convey my remorse and sincere regret,” he said, then broke down.

One subcontractor, Public Warehousing Co., took Peleti and another top Army official to the Super Bowl, a defense investigator said in court Wednesday. The firm has denied wrongdoing. Khan also bribed Peleti to influence LOGCAP contracts with cash. Peleti was arrested in 2006 while re-entering the U.S. at Dover Air Force Base with a duffel bag stuffed with watches and jewelry as well as about $40,000 concealed in his clothing.

While prosecutors documented kickbacks in only the first two of Tamimi’s mess hall subcontracts, they contend that the tone was set to corrupt the system.

“Tamimi and Mr. Khan have their hooks into Mr. Seamans, they have their hooks into KBR,” Lang said in court last year. “It is difficult to assess the kind of damage that did to the integrity of the subcontracting process when the first two subcontracts are corrupted.”

Auditors in the basement

Military auditors say they closely monitor the layers of KBR subcontractors who actually perform most of the LOGCAP work, stationing teams in Iraq. But one Rock Island search warrant said auditors working back in the U.S. could manage only limited reviews of the cascade of deals.

In the basement of one of KBR’s Houston office buildings, a 25-member team from the Defense Contract Audit Agency had “no communications” with “personnel on the ground,” so they could not confirm whether goods and services actually were delivered, the search warrant application said.

In the absence of oversight, some Middle Eastern businessmen would offer “Rolex watches, leather jackets, prostitutes, and the KBR guys weren’t shy about bragging about the fact that they were being treated to all that stuff,” said Paul Morrell, whose firm The Event Source ran several mess halls as a KBR subcontractor.

Such questionable relationships continued long after early procurement managers like Seamans had been rooted out. Early subcontractors such as Tamimi became almost indispensable in part by outfitting Army cafeterias with expensive power generators and refrigeration systems, records and interviews show.

“If you ever gave Tamimi a hard time, you’d get a call,” former KBR subcontract manager Harry DeWolf told the Tribune.

When subcontracts came up for renegotiation, DeWolf said, companies like Tamimi “would say, ‘Fine, we’re going to pull out all of our people and equipment.’ They really had KBR and the government over the barrel.”

Complicating the investigation of war-contract crimes, the government of Kuwait has denied a U.S. request to extradite two Middle Eastern businessmen accused of LOGCAP fraud. The country’s ambassador last year sent letters to the Justice Department asking the U.S. to drop its case against one of them, arguing that international agreements forbid U.S. prosecution of Kuwaiti residents for crimes allegedly committed on Kuwaiti soil. Prosecutors disagree, but a judge is considering Kuwait’s assertion.

Investigators also have faced challenges in dealing with KBR. The company has withheld some internal company documents relating to Mazon, Seaman’s fellow KBR procurement manager, the firm’s attorneys wrote in court filings.

In response to one subpoena, the firm gave agents about 2,760 of Mazon’s computer files but withheld 398 others, saying they were covered by attorney-client privilege or other protections.

Federal prosecutors say they have given KBR no special treatment and that the company has legal rights afforded to all firms whose employees have been charged with wrongdoing. “We did withhold some documents as being privileged,” a KBR spokeswoman wrote, but added that the company has provided statements and grand jury testimony.

Mazon has pleaded not guilty to charges that he inflated a fuel contract. His attorneys say the fuel subcontract was accidentally inflated when figures were converted from U.S. dollars to Kuwaiti dinars then back again. At least 22 KBR troop support subcontracts were inflated through similar errors, Mazon’s attorney J. Scott Arthur wrote in papers filed in Rock Island.

KBR attorneys said the company informed federal officials of three similar “double conversions” on other subcontracts. But KBR said it “has not undertaken an exhaustive search of its millions of pages of procurement documents” to determine whether other such errors exist.

dyjackson@tribune.com – jgrotto@tribune.com

21/02/08 “Seattle Times” — — Iraq should have cured President George W. Bush of any further itch for starting a war. And yet there comes a rumble for an attack on Iran. Opposing this, the Center for Arms Control and Nonproliferation sends out emissaries, several of whom visited The Seattle Times.

Among them was Brig. Gen. John H. Johns (ret.), who was assistant commander of the 1st Infantry Division and a lecturer at the Army War College. Like other generals, Johns opposed the invasion of Iraq, and he now opposes an attack on Iran.

Is such an attack possible? It is Bush’s last year in office. There is no time for a land war, and anyway, says Johns, “We don’t have the ground troops to do it.” But an air war is possible. Johns says it might destroy 1,200 to 1,600 targets.

Johns is not a spokesman for the government. Whether that makes him less credible will depend on your point of view. He lives near Washington, D.C., and socializes with retired generals and CIA officers and others from the security world. He speaks on behalf of a peace group. Take that for what it is worth.

Here is what he says: Last year, there was a push in the administration for an air war against Iran. The given reason was Iran’s plan to build an A-bomb. Then came the National Intelligence Estimate that said Iran had given up on it five years ago.

Says Johns, “The intelligence community intended that to be public to lessen the president’s chance of going to war. They wanted to avoid being complicit in another war. That’s the story I get.”

Johns says a struggle is under way in Washington, D.C. Those opposed to an attack include Secretary of State Condoleezza Rice, Secretary of Defense Robert Gates and the entire Joint Chiefs of Staff. Those wanting an attack, he says, are the deputy national-security adviser for global democracy strategy, Elliott Abrams; Vice President Dick Cheney, “and the hard-line Israel lobby.”

Bombing Iraq is how Israel scotched Saddam Hussein’s A-bomb, in 1981. Israel is much admired for that, but preventive air attack is a high-risk strategy. It stirs hatred, and it has a large downside if it fails.

Diplomacy is lower-risk, especially if there is time for it. Johns goes further, arguing against an attack even if diplomacy fails. “Even if Iran got nuclear weapons,” he says, “they’re not going to commit suicide by using them.”

There may be other pretexts for war. On Jan. 6 came an incident of Iranian speedboats zipping around U.S. Navy ships in a provocative way. It could have been another Gulf of Tonkin incident.

What would it take to have a war with Iran? Stephen Kinzer, a former New York Times correspondent and author of “All the Shah’s Men” (2003), was also part of the peace delegation here. He says it might just take a decision. “The possibility of an attack is real,” he says, and notes that President Bush would not need a vote of Congress.

Air attack is an act of war. At least, Americans thought so in 1941. But despite the Constitution granting the war power to Congress, in Vietnam (1964), Kuwait (1990) and Iraq (2002) our presidents have asked Congress for permission to make war only when they expected major fighting on the ground. Even to invade Iraq, George W. Bush said he did not need permission and asked for it only after Congress, and the public, raised an outcry.

In 1999, President Clinton conducted a 78-day air war against Serbia even though the House deadlocked 213-213 on a resolution supporting it, and the Senate never voted at all. Clinton didn’t care; his position was that he didn’t need permission for an air war.

What matters is not only the Constitution; it is the outcry. Government does what it can get away with – and in the last year of the Bush presidency, it is still an open question how much that is.

Bruce Ramsey’s column appears regularly on editorial pages of The Times. His e-mail address is bramsey@seattletimes.com.

“Facts do not cease to exist because they are ignored”. Aldous Huxley

21/02/08 “ICH” — — The credit storm which began in July when two Bear Stearns hedge funds were forced to liquidate, has continued to intensify and roil the markets. Last week the noose tightened around auction-rate securities,a little-known part of the market that requires short-term funding to set rates for long-term municipal bonds. The $330 billion ARS market has dried up overnight pushing up rates as high as 20% on some bonds—a new benchmark for short term debt. Auction-rate securities are now headed for extinction just like the other previously-vital parts of the structured finance paradigm. The $2 trillion market for collateralized debt obligations (CDOs), the multi-trillion dollar mortgage-backed securities market (MBSs) and the $1.3 asset-backed commercial paper (ABCP) market have all shut down draining a small ocean of capital from the financial system and pushing many of the banks and hedge funds closer to default.

The price of insuring corporate bonds has skyrocketed in the last few weeks making it more difficult for businesses to get the funding they need to expand or continue present operations. Much of this has to do with the growing uncertainty about the reliability of credit default swaps, a $45 trillion dollar market which remains virtually unregulated. Credit-default swaps are a type of financial instrument that are used to speculate on a company’s ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. When the price of CDSs increases, it means that there is greater doubt about the quality of the bond. Prices are presently soaring because the entire structured finance market—and anything connected to it—is under withering attack from the meltdown in subprime mortgages. As foreclosures continue to rise, the securities that were fashioned from subprime loans will continue to unwind destroying trillions of dollars of virtual-capital in the secondary market.

It all sounds more complicated than it really is. Imagine a 200 ft. conveyor belt with two burly workers and a mountain-sized pile of money on one end, and a towering bonfire on the other. Every time a home goes into foreclosure; the two workers stack the money that was lost on the transaction—plus all of the cash that was leveraged on the home via “securitization” and derivatives—-onto the conveyor-belt where it is fed into the fire. That is precisely what is happening right now and the amount of capital that is being consumed by the flames far exceeds the Fed’s paltry increases to the money supply or Bush’s projected $168 billion “surplus package”. Capital is being sucked out of the system faster than it can be replaced which is apparent by the sudden cramping in the financial system and a more generalized slowdown in consumer spending.

According to a recent Bloomberg article:

“A year ago $20 million would have gotten Luminent Mortgage Capital Inc. access to $640 million in loans to buy top-rated mortgage-backed securities. Now that much cash gets the firm no more than $80 million. …(Only) 6 lenders are offering 5 times leverage, while a year ago, 20 banks extended 33 times.”

The banks are not providing anywhere near as much money for leveraged investments as they did just last year. And, when credit shrinks on a national scale–as it is—so does the economy. It’ a simple formula; less money means less economic activity, less growth, fewer jobs, tighter budgets, more pain.

Bloomberg continues:

“Wall Street firms, reeling from $146 billion in losses on their debt holdings, are fueling a credit crisis by clamping down on lending to investors and hedge funds that use borrowed money to buy securities. By pulling back, (the banks) are contributing to reduced demand and lower prices throughout the fixed-income world.”

The banks are in no position to be extravagant because they’re already saddled with $400 billion in MBSs and CDOs—as well as another $170 billion in private equity deals—for which there is currently no market. They’ve had to dramatically cut back on their lending because they either don’t have the resources or are facing bankruptcy in the near future.

An article which appeared on the front page of the Financial Times last week, illustrates how hard-pressed the banks really are:

“US banks have been quietly borrowing massive amounts of money from the Federal Reserve…$50 billion in one month”.

The Fed’s new Term Auction Facility “allows the banks to borrow money against all sort of dodgy collateral,” says Christopher Wood, analyst at CLSA. “The banks are increasingly giving the Fed the garbage collateral nobody else wants to take … [this] suggests a perilous condition for America’s banking system.”

The move has sparked unease among some analysts about the stress developing in opaque corners of the US banking system and the banks’ growing reliance on indirect forms of government support.” (“US Banks borrow $50 billion via New Fed Facility”, Financial Times)

(The story appeared no where in the US media)

At the same time the banks are getting backdoor injections of liquidity from the Fed; banking giant Citigroup has been trying to off-load some of its branches so it can cover its structured investment losses. It all looks rather desperate, but scouring the planet for capital to shore up flagging balance sheets is turning out to be a full-time job for many of America’s largest investment banks. It is the only way they can stay one step ahead of the hangman.

In the last few days, gold has spiked to $950, a new high, while oil futures passed the $100 per barrel mark. The battered greenback has already taken a beating, and yet, Fed chairman Bernanke is signaling that there are more rate cuts to come. The prospect of a global run on the dollar has never been greater. Still, Bernanke will do whatever he can to resuscitate the faltering banking system, even if he destroys the currency in the process. Unfortunately, interest rates alone won’t cut it. The banks need capital; and fast. Meanwhile, the waning dollar has sent food and energy prices soaring which is leaving consumers without the discretionary income they need for anything beyond the basic necessities. As a result, retail sales are down and employers are forced to lay off workers to reduce their spending. This is all part of the self-reinforcing negative-feedback loop that begins with falling home prices and then rumbles through the broader economy. There is no chance that the economy will rebound until housing prices stabilize and the rate of foreclosures returns to normal. But that could be a long way off. With housing inventory at historic highs and mortgage applications at new lows, the economy could keep somersaulting down the stairwell for a full two years or more. Only then, will we hit rock-bottom.

The country is now headed into a deep and protracted recession. Low interest credit and financial innovation have paralyzed the credit markets while inflating a monstrous equity bubble that is wreaking havoc with the world’s financial system. The new market architecture, “structured finance” has collapsed from the stress of falling asset-values and rising defaults. Many of the banks are technically insolvent already, hopelessly mired in their own red ink. Public confidence in the nations’ financial institutions has never been lower. Monetary policy and deregulation have failed. The system is self-destructing.

Now that the credit crunch has rendered the markets dysfunctional, spokesmen for the investor class are speaking out and confirming what many have suspected from the very beginning; that the present troubles originated at the Federal Reserve and, ultimately, they are the ones who are responsible for the meltdown. In an article in the Wall Street Journal this week, Harvard economics professor and former Council of Economic Advisers under President Reagan, Martin Feldstein, made this revealing admission:

“There is plenty of blame to go around for the current situation. The Federal Reserve bears much of the responsibility, because of its failure to provide the appropriate supervisory oversight for the major money center banks. The Fed’s banking examiners have complete access to all of the financial transactions of the banks that they supervise, and should have the technical expertise to evaluate the risks that those banks are taking. Because these banks provide credit to the nonbank financial institutions, the Fed can also indirectly examine what those other institutions are doing.

The Fed’s bank examinations are supposed to assess the adequacy of each bank’s capital and the quality of its assets. The Fed declared that the banks had adequate capital because it gave far too little weight to their massive off balance-sheet positions—the structured investment vehicles (SIVs), conduits and credit line obligations—that the banks have now been forced to bring onto their balance sheets. Examiners also overstated the quality of the banks’ assets, failing to allow for the potential bursting of the house price bubble. The implication of this for Fed supervision policy is clear. The way out of the current crisis is not.”

How odd? So, when all else fails; tell the truth?

But Feldstein is right; the Fed refused to perform its oversight duties because its friends in the banking industry were raking in obscene profits selling sketchy, subprime junk to gullible investors around the world. They knew about the “massive off balance-sheet positions” which allowed the banks’ to create mortgage-backed securities and CDOs without sufficient capital reserves. They knew it all; every last bit of it, which simply proves that the Federal Reserve is an organization which serves the exclusive interests of the banking establishment and their corporate brethren in the financial industry.

Surprised?

Never have so many hoped for so much because of rollicking rhetoric and pulsating platitudes. A tsunami of hope has plunged America into electoral euphoria. In its path is the wreckage of critical thinking about what ails the US and what bold, revolutionary actions are needed. Barry Obama has accomplished semantic alchemy, turning justified but grim distrust and outrage with government and politics into hallelujah hope. But most hope never materializes and is a terrible predictor of reality.