Billions Over Baghdad

Sometimes a picture speaks for itself, so I won't give much of a foreword here. Just keep two things in mind: (1) Most of this money belonged to the Iraqis- so add reckless theft to our list of gross crimes committed upon that country's populace- and (2) YOUR money is being sucked into this mindless hole of incompetence, colonialism and death- in the tens of $thousands- every second. In case you need a reminder, the countdown clock labeled Cost of the Iraq War is to your right. I guess we're "Spending it over there, so we don't have to spend it here."

Disgusted yet?

Reposted here from Vanity Fair.

Billions over Baghdad

Between April 2003 and June 2004, $12 billion in U.S. currency—much of it belonging to the Iraqi people—was shipped from the Federal Reserve to Baghdad, where it was dispensed by the Coalition Provisional Authority. Some of the cash went to pay for projects and keep ministries afloat, but, incredibly, at least $9 billion has gone missing, unaccounted for, in a frenzy of mismanagement and greed. Following a trail that leads from a safe in one of Saddam's palaces to a house near San Diego, to a P.O. box in the Bahamas, the authors discover just how little anyone cared about how the money was handled.



by Donald L. Barlett and James B. Steele October 2007

http://www.vanityfair.com/politics/features/2007/10/iraq_billions200710

Hidden in plain sight, 10 miles west of Manhattan, amid a suburban community of middle-class homes and small businesses, stands a fortress-like building shielded by big trees and lush plantings behind an iron fence. The steel-gray structure, in East Rutherford, New Jersey, is all but invisible to the thousands of commuters who whiz by every day on Route 17. Even if they noticed it, they would scarcely guess that it is the largest repository of American currency in the world.

Officially, 100 Orchard Street is referred to by the acronym eroc, for the East Rutherford Operations Center of the Federal Reserve Bank of New York. The brains of the New York Fed may lie in Manhattan, but xeroc is the beating heart of its operations—a secretive, heavily guarded compound where the bank processes checks, makes wire transfers, and receives and ships out its most precious commodity: new and used paper money.

On Tuesday, June 22, 2004, a tractor-trailer truck turned off Route 17 onto Orchard Street, stopped at a guard station for clearance, and then entered the eroc compound. What happened next would have been the stuff of routine—procedures followed countless times. Inside an immense three-story cavern known as the currency vault, the truck's next cargo was made ready for shipment. With storage space to rival a Wal-Mart's, the currency vault can reportedly hold upwards of $60 billion in cash. Human beings don't perform many functions inside the vault, and few are allowed in; a robotic system, immune to human temptation, handles everything. On that Tuesday in June the machines were especially busy. Though accustomed to receiving and shipping large quantities of cash, the vault had never before processed a single order of this magnitude: $2.4 billion in $100 bills.

Under the watchful eye of bank employees in a glass-enclosed control room, and under the even steadier gaze of a video surveillance system, pallets of shrink-wrapped bills were lifted out of currency bays by unmanned "storage and retrieval vehicles" and loaded onto conveyors that transported the 24 million bills, sorted into "bricks," to the waiting trailer. No human being would have touched this cargo, which is how the Fed wants it: the bank aims to "minimize the handling of currency by eroc employees and create an audit trail of all currency movement from initial receipt through final disposition."

Forty pallets of cash, weighing 30 tons, were loaded that day. The tractor-trailer turned back onto Route 17 and after three miles merged onto a southbound lane of the New Jersey Turnpike, looking like any other big rig on a busy highway. Hours later the truck arrived at Andrews Air Force Base, near Washington, D.C. There the seals on the truck were broken, and the cash was off-loaded and counted by Treasury Department personnel. The money was transferred to a C-130 transport plane. The next day, it arrived in Baghdad.

That transfer of cash to Iraq was the largest one-day shipment of currency in the history of the New York Fed. It was not, however, the first such shipment of cash to Iraq. Beginning soon after the invasion and continuing for more than a year, $12 billion in U.S. currency was airlifted to Baghdad, ostensibly as a stopgap measure to help run the Iraqi government and pay for basic services until a new Iraqi currency could be put into people's hands. In effect, the entire nation of Iraq needed walking-around money, and Washington mobilized to provide it.

What Washington did not do was mobilize to keep track of it. By all accounts, the New York Fed and the Treasury Department exercised strict surveillance and control over all of this money while it was on American soil. But after the money was delivered to Iraq, oversight and control evaporated. Of the $12 billion in U.S. banknotes delivered to Iraq in 2003 and 2004, at least $9 billion cannot be accounted for. A portion of that money may have been spent wisely and honestly; much of it probably wasn't. Some of it was stolen.

Once the money arrived in Iraq it entered a free-for-all environment where virtually anyone with fingers could take some of it. Moreover, the company that was hired to keep tabs on the outflow of money existed mainly on paper. Based in a private home in San Diego, it was a shell corporation with no certified public accountants. Its address of record is a post-office box in the Bahamas, where it is legally incorporated. That post-office box has been associated with shadowy offshore activities.

Coalition of the Billing
The first shipment of cash to Iraq took place on April 11, 2003—it consisted of $20 million in $1, $5, and $10 bills. It was arranged in small bills on the theory that these could quickly be circulated into the Iraqi economy "to prevent a monetary and financial collapse," as one former Treasury official put it. Those were the days when American officials worried that the gravest threat facing Iraq might be low-grade civilian unrest in Baghdad. They didn't have a clue as to the power of the insurgency that was to come. The initial $20 million came exclusively from Iraqi assets that had been frozen in U.S. banks as long ago as the Gulf War, in 1990. Subsequent airlifts of cash also included billions from Iraqi oil revenues controlled by the United Nations. After the creation of the Development Fund for Iraq (D.F.I.)—a kind of holding pit of money to be spent for "purposes benefitting the people of Iraq"—the U.N. turned over control of Iraq's oil billions to the United States.

When the U.S. military delivered the cash to Baghdad, the money passed into the hands of an entirely new set of players—the staff of the American-led Coalition Provisional Authority. To many Americans, the initials C.P.A. would soon be as familiar as those of long-established government agencies such as D.O.D. or hud. But the C.P.A. was anything but a conventional agency. And, as events would show, its initials would have nothing in common with "certified public accountant." The C.P.A. had been hastily created to serve as the interim government of Iraq, but its legality and paternity were murky from the start. The Authority was in effect established by edict outside the traditional framework of American government. Not subject to the usual restrictions and oversight of most agencies, the C.P.A. during the 14 months of its existence would become a sump for American and Iraqi money as it disappeared into the hands of Iraqi ministries and American contractors. The Coalition of the Willing, as one commentator observed, had turned into the Coalition of the Billing.

The first mention of the C.P.A. came on April 16, 2003, in a so-called freedom message to the Iraqi people by General Tommy R. Franks, commander of the coalition forces. A week after mobs ransacked Iraq's National Museum of its treasures, unchallenged by American troops, General Franks arrived in Baghdad for a six-hour whirlwind tour. He met with his commanders in one of Saddam Hussein's palaces, held a video conference with President Bush, and then quickly flew off. "Our stay in Iraq will be temporary," General Franks wrote, "no longer than it takes to eliminate the threat posed by Saddam Hussein's weapons of mass destruction, and to establish stability and help Iraqis form a functioning government that respects the rule of law." With that in mind, General Franks wrote that he created the Coalition Provisional Authority "to exercise powers of government temporarily, and as necessary, especially to provide security, to allow the delivery of humanitarian aid and to eliminate weapons of mass destruction." Three weeks later, on May 8, 2003, the U.S. and British ambassadors to the United Nations sent a letter to the U.N. Security Council, effectively delivering the C.P.A. to the United Nations as a fait accompli.

The day before, President Bush had appointed L. Paul Bremer III, a retired diplomat, as presidential envoy to Iraq and the president's "personal representative," with the understanding that he would become the C.P.A. administrator. Bremer had held State Department posts in Afghanistan, Norway, and the Netherlands; had served as an assistant to Henry Kissinger and Alexander Haig; and had closed out his diplomatic career in 1989 as ambassador-at-large for counterterrorism. More recently, he had been the chairman and chief executive officer of a crisis-management business called Marsh Crisis Consulting. Despite his State Department background, Bremer had been selected by the Pentagon, which had elbowed aside all contenders for authority in post-invasion Iraq. The C.P.A. itself was a creature of the Pentagon, and it would be Pentagon personnel who did the C.P.A.'s hiring.

Over the next year, a compliant Congress gave $1.6 billion to Bremer to administer the C.P.A. This was over and above the $12 billion in cash that the C.P.A. had been given to disburse from Iraqi oil revenues and unfrozen Iraqi funds. Few in Congress actually had any idea about the true nature of the C.P.A. as an institution. Lawmakers had never discussed the establishment of the C.P.A., much less authorized it—odd, given that the agency would be receiving taxpayer dollars. Confused members of Congress believed that the C.P.A. was a U.S. government agency, which it was not, or that at the very least it had been authorized by the United Nations, which it had not. One congressional funding measure makes reference to the C.P.A. as "an entity of the United States Government"—highly inaccurate. The same congressional measure states that the C.P.A. was "established pursuant to United Nations Security Council resolutions"—just as inaccurate. The bizarre truth, as a U.S. District Court judge would point out in an opinion, is that "no formal document … plainly establishes the C.P.A. or provides for its formation."

Accountable really to no one, its finances "off the books" for U.S. government purposes, the C.P.A. provided an unprecedented opportunity for fraud, waste, and corruption involving American government officials, American contractors, renegade Iraqis, and many others. In its short life more than $23 billion would pass through its hands. And that didn't include potentially billions more in oil shipments the C.P.A. neglected to meter. At stake was an ocean of cash that would evaporate whenever the C.P.A. did. All parties understood that there was a sell-by date, and that it was everyone for himself. An Iraqi hospital administrator told The Guardian of England that, when he arrived to sign a contract, the army officer representing the C.P.A. had crossed out the original price and doubled it. "The American officer explained that the increase (more than $1 million) was his retirement package." Alan Grayson, a Washington, D.C., lawyer for whistle-blowers who have worked for American contractors in Iraq, says simply that during that first year under the C.P.A. the country was turned into "a free-fraud zone."

Bremer has expressed general satisfaction with the C.P.A.'s work while at the same time acknowledging that mistakes were made. "I believe the C.P.A. discharged its responsibilities to manage these Iraqi funds on behalf of the Iraqi people," he told a congressional committee. "With the benefit of hindsight, I would have made some decisions differently. But on the whole, I think we made great progress under some of the most difficult conditions imaginable, including putting Iraq on the path to democracy."

The Bottomless Vault
To be fair, the C.P.A. really did need money desperately, and it really did need to start spreading it among the traumatized Iraqi population. It also needed to jump-start Iraq's basic services. As the C.P.A. demanded ever greater amounts of cash, the pallets of $1, $5, and $10 bills were soon replaced by bundles of $100 bills. During the C.P.A.'s little more than a year of life, the New York Federal Reserve Bank made 21 shipments of currency to Iraq totaling $11,981,531,000. All told, the Fed would ship 281 million individual banknotes, in bricks weighing a total of 363 tons.

After arriving in Baghdad, some of the cash was shipped to outlying regions, but most of it stayed in the capital, where it was delivered to Iraqi banks, to installations such as Camp Victory, the mammoth U.S. Army facility adjacent to the Baghdad airport, and to Saddam's former presidential palace, in the Green Zone, which had become the home of Bremer's C.P.A. and the makeshift Iraqi government. At the palace the cash disappeared into a vault in the basement. Few people ever saw the vault, but the word was that during one short period it held as much as $3 billion. Whatever the figure, it was a major repository of the banknotes from America during the brief time the cash was under the care of the C.P.A. The money flowed in and out rapidly. When someone needed cash, a unit called the Program Review Board, composed of senior C.P.A. officials, reviewed the request and decided whether to recommend a disbursement. A military officer would then present that authorization to personnel at the vault.

Even those who picked up large sums usually did not actually see the vault. Once a disbursement had been made, the cash was brought to an adjoining room for pickup. This "secure room," as one military officer called it, looked a lot like a vault itself: a thick metal door at the entrance, with the room beyond starkly furnished with only a table and chairs. The table would be piled high with cash. An authorized officer would sign papers for the money, then begin carting it upstairs—sometimes in sacks or metal boxes—to the Iraqi ministry or C.P.A. office that had requested it. Upon turning over the cash, the officer would be required to obtain a receipt—nothing more.

C.P.A. officials tried to keep a rough running tab on the amount disbursed to individual Iraqi agencies such as the Ministry of Finance ($7.7 billion). But there was little detail, nothing specific, on how the money was actually used. The system basically operated on "trust and faith," as one former C.P.A. official put it. Once the cash passed into the hands of the Iraqis or any other party, no one knew where it went. The C.P.A. turned over $1.5 billion in cash to Iraqi banks, for instance, but later auditors could account for less than $500 million. The United Nations retained a team of auditors to look over American shoulders. They didn't see much, because they were largely cut off from access while the C.P.A. held power. As a report by the U.N.'s accounting consultant, KPMG, noted dryly, "We encountered difficulties in performing our duties and meeting with key C.P.A. personnel."

"There was corruption everywhere," said one former military officer who worked with the C.P.A. in Baghdad in the months after the invasion. Some of the Iraqis who were put in charge of ministries after Saddam's fall had never run a government agency before. Their inexperience aside, he said, they lived in constant fear of losing their jobs or their lives. All many cared about, he added, was taking care of themselves. "You could see that a lot of them were trying their best to get a quick retirement fund before they were ousted or killed," he added. "You just get what you can while you're in that position of power. Instead of trying to build the nation, you build yourself."

Did any withdrawals from the vault pay for secret activities by government personnel? It is an obvious possibility. Much of the cash was clearly destined for American contractors or Iraqi subcontractors. Sometimes the Iraqis came to the palace to collect their cash; other times, when they were reluctant to show up at the American compound, U.S. military personnel had to deliver it themselves. One of the riskier jobs for some U.S. military men was to fill up a car with bags of cash and drive the money to contractors in Baghdad neighborhoods, handing it over like a postal worker delivering mail.

‘Fraud" was simply another word for "business as usual." Of 8,206 "guards" drawing paychecks courtesy of the C.P.A., only 602 warm bodies could in fact be found; the other 7,604 were ghost employees. Halliburton, the government contractor once headed by Vice President Dick Cheney, charged the C.P.A. for 42,000 daily meals for soldiers while in fact serving only 14,000 of them. Cash was handed out from the backs of pickup trucks. On one occasion a C.P.A. official received $6.75 million in cash with the expectation he would shell it out in one week. Another time, the C.P.A. decided to spend $500 million on "security." No specifics, just a half-billion dollars for security, with this cryptic explanation: "Composition TBD"—that is, "to be determined."

The pervasiveness of this Why-should-I-care? attitude was driven home in an exchange with retired admiral David Oliver, the C.P.A.'s director of management and budget. Oliver was asked by a BBC reporter what had happened to all the cash airlifted to Baghdad:

Oliver: "I have no idea—I can't tell you whether or not the money went to the right things or didn't—nor do I actually think it's important."

Q: "Not important?"

Oliver: "No. The coalition—and I think it was between 300 and 600 people, civilians—and you want to bring in 3,000 auditors to make sure money's being spent?"

Q: "Yes, but the fact is that billions of dollars have disappeared without a trace."

Oliver: "Of their money. Billions of dollars of their money, yeah, I understand. I'm saying what difference does it make?"

The difference it made was that some American contractors correctly believed they could walk off with as much money as they could carry. The circumstances that surround the handling of comparatively small sums help explain the billions that ultimately vanished. In the south-central region of Iraq a contracting officer stored $2 million in a safe in his bathroom. One agent kept $678,000 in an unsecured footlocker. Another agent turned over some $23 million to his team of "paying agents" to deliver to contractors, but documentation could be found for only $6.3 million of it. One project officer received $350,000 to fund human-rights projects, but in the end could account for less than $200,000 of it. Two C.P.A. agents left Iraq without accounting for two payments of $715,000 and $777,000. The money has never been found.

To Frank Willis, a senior adviser to the Iraqi transportation ministry, the presence of so much cash circulating so freely gave the Green Zone a "Wild West" feel. A moderate Republican who worked for Reagan and voted for George W. Bush, Willis spent many years in executive roles in the State Department and the Department of Transportation before leaving government service in 1985. He was a top executive of a health institute in Oklahoma when, in 2003, an old friend from Washington called and asked if he would come to Iraq to help the C.P.A. get the various transportation systems running again.

"You've got to be crazy," Willis told him at first. He says he was talked into going for 30 days, but once in Baghdad became caught up in the work and stayed for six grueling months. Willis says he wasn't there a month before he felt the way things were being done was "terribly wrong." One afternoon he returned to his office to find piles and piles of shrink-wrapped $100 bills stacked on a table. "This just got wheelbarrowed in," one of his American colleagues explained. "What do you think of two million bucks?" The money had been "checked out" of Saddam's old vault in the basement, two floors below, in order to pay a U.S. contractor hired by the C.P.A. to provide security.

The neat bundles of cash looked almost like play money, and the temptation to handle them was irresistible. "We were all in the room passing those things around and having fun," Willis remembers. He and his colleagues played a game of football, tossing the bricks back and forth. "You could spin them but not throw a spiral," Willis says with a laugh. When he called the American contractor to come get his money, Willis advised him, "You better bring a gunnysack."

"Integrity Is a Core Principle"
The American contractor needing the gunnysack was a company called Custer Battles. The name was derived not from Little Big Horn but from the names of the company's owners, Scott K. Custer and Michael J. Battles. Both were former army rangers in their mid-30s, and Battles also had once been a C.I.A. operative. The pair showed up on the streets of Baghdad with the blessing of the White House at invasion's end, looking for a way to do business. At the time, the only American civilians who could gain access to the city were those approved by President Bush's staff.

The Battles half of the team brought the White House access, secured when Michael Battles became the G.O.P.-backed candidate in the 2002 Rhode Island congressional primary for the privilege of losing to the Democratic incumbent, Patrick Kennedy. Battles not only lost the primary but was fined by the Federal Election Commission for misrepresenting campaign contributions. Nevertheless, he forged important political connections. His contributors included Haley Barbour, the longtime Washington power broker and former chairman of the Republican National Committee, who is now governor of Mississippi, and Frederic V. Malek, a former special assistant to President Nixon, who survived the Watergate scandal and went on to become an insider in the Reagan administration and both Bush administrations.

The C.P.A. awarded Custer and Battles one of its first no-bid contracts—$16.5 million to protect civilian aircraft flights, of which at the time there were few, into Baghdad International Airport. The company faced immediate obstacles: Custer and Battles didn't have any money, they didn't have a viable business, and they didn't have any employees. Bremer's C.P.A. had overlooked these shortcomings and forked over $2 million anyway, in cash, to get them started, simply ignoring long-standing requirements that the government certify that a contractor has the capacity to fulfill a contract. That first $2 million cash infusion was followed shortly by a second. Over the next year Custer Battles would secure more than $100 million in Iraq contracts. The company even set up an internal Office of Corporate Integrity. "Integrity is a core principle of Custer Battles' corporate values," Scott Custer stated in a press release.

The U.S. business community was impressed by this upstart. In May 2004, Ernst & Young, the global accounting firm, announced the finalists for its New England Entrepreneur of the Year Awards, honoring an ability "to innovate, develop, and cultivate groundbreaking business models, products, and services." Among the honorees were Scott Custer and Michael Battles.

Four months later, in September 2004, the air force issued an order barring Custer Battles from receiving any new government contracts until 2009. The company had come to epitomize the way business was done in Baghdad. Custer Battles had billed the government $400,000 for electricity that cost $74,000. It had billed $432,000 for a food order that cost $33,000. It had charged the C.P.A. for leased equipment that was stolen, and had submitted forged invoices for reimbursement—all the while moving millions of dollars into offshore bank accounts. In one instance, the company claimed ownership of forklifts used to transport the C.P.A.'s cash (among other things) around the Baghdad airport. But up until the war the forklifts had been the property of Iraqi Airways. They were "liberated," along with the Iraqi people, following hostilities. Custer Battles seized them, painted over the old name, and transferred ownership to its offshore businesses. The forklifts were then leased back to Custer Battles for thousands of dollars a month, a cost that Custer Battles passed along to the C.P.A. In 2006, a federal-court jury in Virginia ordered the company to pay $10 million in damages and penalties for defrauding the government. The jury found more than three dozen instances of fraud in which Custer Battles used shell companies in the Cayman Islands and elsewhere to manufacture phony invoices and pad its bills. During the same period Battles personally withdrew $3 million from the company coffers as a kind of bonus—or, as he put it, "a draw." The jury decision in the whistle-blower lawsuit was subsequently overturned when the trial judge set the verdict aside, pointing out that the C.P.A. was not in fact a U.S.-government entity and hence Custer Battles could not be tried under the federal fraud act. That decision is under appeal.

The NorthStar Contract
How can billions of dollars simply vanish? Wasn't there any accounting mechanism in place to keep track of the money?

La Jolla, California, is about as far away from Iraq in both distance and mind-set as one can get. The house at 5468 Soledad Road is a two-story dwelling with six bedrooms and five and a half baths, a typical California home of beige stucco under a red tiled roof. The neighborhood is lush and well kept. But in one respect 5468 Soledad is not a typical suburban house at all.

On October 25, 2003, the C.P.A. awarded a $1.4 million contract "to provide accountant and audit services" to help "in the management and accounting of the Development Fund for Iraq." In other words, the purpose was to help Bremer and the C.P.A. keep tabs on the billions of dollars under their control, and to help make sure that the money was properly spent. The one-year C.P.A. contract was awarded to a company called NorthStar Consultants.

When a request was made to the U.S. government for a copy of this contract, officials at the Pentagon, which has oversight, dragged their feet for weeks. The document they eventually supplied had been strategically redacted. Nearly all the information about the contractor had been blacked out, including the name and title of the company officer who had executed the contract, the name of the person to call for information about the company, the last four digits of the company's phone number, and the name of the U.S.-government official who had awarded the contract in the first place. But by cross-referencing public records and other sources it was possible to fill in some of the missing data. One path led to 5468 Soledad Road.

The house is owned by Thomas A. and Konsuelo Howell, according to San Diego County records. The couple apparently bought it new in 1999. State records indicate that several companies operate from the house. One of them is called International Financial Consulting, Inc., though it isn't clear what this company actually does. Incorporated in 1998, I.F.C. was described as a venture in "business consulting," according to papers Howell filed with the state. The Howells are listed as the only directors.

Another company operating out of 5468 Soledad is called Kota Industries, Inc., whose stated business is the "sale of furniture, home furnishings, flooring," according to California records. Numerous business directories in the San Diego area ascribe similar activities to Kota, listing it as a remodeling, repairing, or restoration contractor. One directory describes its specialty as "kitchen, bathroom, basement remodeling." Again, the Howells are the only officers and directors.

In January 2004, in the business-names index of San Diego County, Thomas Howell indicated that a third company was now based at 5468 Soledad, noting that it was owned by International Financial Consulting. This new company was NorthStar.

How did someone whose line of work includes home remodeling end up getting the contract to audit the billions being airlifted to Iraq? Thomas Howell is 60; he and his wife have lived in San Diego for at least two decades. Over the years, the couple has also maintained addresses in Fort Lauderdale, Florida, and Laredo, Texas. Neighbors describe the Howells as pleasant, but can add little else. "I know them, but I don't know what they do," said one. "That's all I can tell you." Two others could say only that they saw the Howells occasionally in the neighborhood. Were they aware that a company with an Iraqi contract had operated from the house? "Really?" said one. "No. I didn't know that."

Thomas Howell refuses to discuss the NorthStar contract in detail. A telephone exchange with him, reached at 5468 Soledad Road, went as follows.

A woman answered, "Kota Industries."

"Could I speak with Mr. Thomas Howell?"

"May I ask who is calling?" the woman asked.

"My name is Jim Steele."

"Wait just a second," the woman said.

A few moments later, a man came on the line. "Tom Howell," he said.

"My name is Jim Steele, and I am a writer with the magazine Vanity Fair. I would like to talk to you about NorthStar Consultants."

Howell said, "Well, let me find a contact who can talk all this stuff with you. What is your phone number, Jim?"

Howell repeated the number and added, "O.K. Let me get somebody who can discuss all this stuff for you."

"I'd just like to make sure here. Aren't you president of the company?"

"That's right," said Howell.

"But you can't … "

"Well, I'm not … I can't … You want to talk about the D.F.I. [Development Fund for Iraq] and that sort of stuff?" asked Howell.

"Well, yeah."

"O.K.," Howell replied, "I'll get someone who's authorized to talk about all that. I'll have them give you a call or I'll call you and give you their number."

"Is this the military or your lawyer?"

"The military," said Howell, abruptly ending the conversation with "O.K. Thanks. Good-bye."

The next attempt was a visit to Howell's home the following day. A stylishly dressed woman emerged from behind a locked fence. "May I help you?" she asked. The woman confirmed that she was Konsuelo Howell, and explained that it would be impossible to speak with her husband. "He is out of the country."

He never did call back with the name of a Pentagon official "authorized" to speak about NorthStar. Nor did anyone from the Pentagon call. When a Pentagon public-affairs officer was queried about who might be able to discuss the contract, the officer said she needed a name, which, as it turned out, only Howell could provide. The Pentagon also failed to respond to a request for the information deleted from the NorthStar contract and the name of the person who had ordered it deleted.

When Howell was contacted again, three months later, he stated that the Department of Defense had told him that "they didn't have anybody anymore specifically tasked with answering these questions." As far as D.O.D. was concerned, Howell added, the issue was "closed." Once again he refused to discuss the NorthStar contract in any detail: "The way I normally work with all my clients is: my work is confidential," he said. "If they want to let it out, that's fine. But I work for them. It's their business." Howell did say that NorthStar was his one and only U.S. government contract. How did he land it? "I saw it published on the Web, that it was out for bids," he said.

As for how much auditing NorthStar really did in Iraq, the missing billions provide the best answer. The company did have personnel in Baghdad, though how many, and for how long, and for what purpose, is not known—another point Howell declines to discuss. Under the terms of C.P.A. Regulation No. 2, signed by Bremer on June 15, 2003, money coming into Iraq was supposed to be tracked by an "independent certified public accounting firm." Howell was not a certified public accountant, nor were any of the people who worked for him. Bremer seems to have been unaware of this detail. When he was asked at a congressional hearing earlier this year about NorthStar, he answered, "I don't know what kind of firm it was, other than it was an accounting firm." Would it upset him, a congressman asked, if he found out there were no accountants on NorthStar's staff? "It would," Bremer answered, "if it were true."

It is true. And rather than reissue the contract to a certified public accountant, someone in the government contract office simply eliminated the requirement, thereby making Howell eligible for the work.

The Baghdad-Bahamas Connection
When an unknown official at the Pentagon meticulously went through the NorthStar contract and used a thick-tipped marker to black out Thomas Howell's name, title, office address, and phone number, he or she neglected to conceal one of the most intriguing aspects of the contract: NorthStar's mailing address. It was P.O. Box N-3813 in Nassau, in the Bahamas.

High on a hill in Nassau, the main post office commands panoramic views of the capital city—the pink stuccoed Parliament building, bustling Bay Street with its hordes of tourists, and, beyond it, the giant cruise ships that dock in Nassau's harbor. Just as you enter the post office, on a sprawling plaza beneath an overhang offering protection from the tropical sun and rain, there stand row after row of metal boxes, each bearing the capital letter N followed by a series of numbers. These are the private post-office boxes of Nassau. Because there is no home delivery in the city, it is the way people in the capital get their mail.

Box N-3813, four inches wide by five inches high, looks like all the other post-office boxes. It harbors many secrets that its users want to keep. No one knows whether anyone at the C.P.A. or the Pentagon questioned why one of its contractors used an offshore post-office box. It is undeniably true, however, that foreigners often use post-office boxes in the Bahamas and other tax havens for three purposes: to conceal assets, to avoid taxes, and to launder money. NorthStar would not be at all unusual among Iraq contractors in setting up its affairs this way. Post-office boxes in tax havens around the world have been flooded with contractor business based in Iraq.

Box N-3813, it turns out, has been the locus for all sorts of transactions by Americans and others looking to move money offshore. In addition to Howell's NorthStar, this particular box also served as the address of record for a man named Patrick Thomson and for his Bahamian business called Lions Gate Management. Both figured prominently in one of the more spectacular offshore frauds in recent years, the collapse of Evergreen Security. The Caribbean-based Evergreen enticed thousands of investors, many of them U.S. retirees, to pour money into its so-called tax-sheltered offshore funds, with the promise of handsome returns. Some of the money came from hundreds of Caribbean trusts for which Thomson acted as trustee. A Ponzi scheme masquerading as a mutual fund, Evergreen siphoned $200 million from investors in the United States and two dozen other countries. One of its ringleaders was William J. Zylka, a New Jersey "con artist who falsified his background, credentials and wealth in order to perpetrate elaborate schemes," according to court documents. He pocketed $27.7 million of Evergreen's money.

Throughout the looting of Evergreen, Thomson was one of the firm's three directors. During that time he also arranged for Howell to establish the same Nassau post-office box as NorthStar's legal home. Identified in Nassau as a member of one of Scotland's oldest publishing families, Thomson has operated out of one or more office buildings in the heart of Nassau for many years. Like most of those in the shadowy world of offshore deals, he has generally kept a low profile, the scandal over Evergreen Security being the one great exception. Thomson incorporated NorthStar for Howell in the Bahamas in January of 1998, as what is known as an "international business company," or I.B.C. Despite their impressive name, I.B.C.'s are little more than paper operations. As a rule, they don't carry on any business; they are empty vessels that can be used for anything. They have no real chief executive officer or board of directors, and they don't publish financial statements. An I.B.C.'s books, if there are any, can be kept anywhere in the world, but no one can inspect them. I.B.C.'s aren't required to file annual reports or disclose the identity of their owners. They're shells, operating in total secrecy. In the last two decades, they have sprouted by the hundreds of thousands in tax havens worldwide.

In a telephone interview, Thomson discussed with great reluctance his role in creating NorthStar for Thomas Howell. How did they meet?

"I believe I was introduced to him through a friend with Citibank," Thomson replied. "I believe Howell used to work for Citibank." He said it was his recollection that Howell initially established NorthStar because of some consulting work he was doing in the Far East, not the Middle East. "This was before the Iraq war started," he noted. "All we did was supply a company name." Thomson said he had had no contact with Howell in years. He had heard that Howell was in Iraq, but declined to discuss the matter further.

Turning Off the Spigot
By the spring of 2004 the clock was winding down for L. Paul Bremer and the C.P.A. Within several months—on June 30—the Authority was scheduled to turn government operations over to the Iraqis, at least formally. There was palpable anxiety among officials and contractors about what would happen under the new Iraqi regime, and they launched an aggressive effort to get as much money into the pipeline as possible. On April 26, another shipment of cash-laden pallets, this one holding $750 million, arrived at Baghdad International Airport. On May 18 the Fed made a $1 billion shipment, which was followed on June 22 by the biggest single shipment ever made by the Fed anywhere—$2.4 billion. Another $1.6 billion arrived three days later, bringing the total of cash shipments to Iraq to $5 billion in the C.P.A.'s final three months.

The C.P.A. sought to make one more huge withdrawal. On Monday, June 28, as Bremer stole away from Baghdad unannounced—two days ahead of the scheduled handover of authority—another C.P.A. official put in hurried pleas to the Federal Reserve Bank for an additional $1 billion infusion, hoping to get the money before an Iraqi provisional government came to power. Internal e-mails from the Federal Reserve Bank show that the requests for money came from Don Davis, an air-force colonel serving as the C.P.A. comptroller and manager of the Development Fund for Iraq. But the Fed would have no part of the plan. Because Bremer had already "transferred authority (which is being reported in the press as 10:26 a.m. in Baghdad)," a Fed official explained, "the C.P.A. no longer had control over Iraq's assets."

In one of his last official acts before leaving Baghdad, Bremer issued an order—prepared by the Pentagon, he says—declaring that all coalition-force members "shall be immune from any form of arrest or detention other than by persons acting on behalf of their Sending States." Contractors also got the same get-out-of-jail-free card. According to Bremer's order, "contractors shall be immune from Iraqi legal process with respect to acts performed by them pursuant to the terms and conditions of a Contract or any sub-contract thereto." The Iraqi people, who had had no say over Saddam Hussein's illegal conduct during his dictatorship, would have no say over illegal conduct by Americans in their new democracy.

And the "Sending State" itself is not interested in pursuing misconduct. With the exception of a few low-level individuals, the Bush administration's Justice Department has resolutely avoided the prosecution of corporate fraud stemming from the occupation of Iraq.

"In our fifth year in the war in Iraq," according to Alan Grayson, the attorney for whistle-blowers, "the Bush administration has not litigated a single case against any war profiteer under the False Claims Act." This at a time, Grayson told a congressional committee, when "billions of dollars are missing and many billions more wasted." Grayson knows what he is talking about. He represented the whistle-blowers in the Custer Battles case brought under the False Claims Act—a case in which the Justice Department refused to get involved, and the only one that has gone to trial.

There is no true method of calculating the human cost of the war in Iraq. The monetary cost, grossly inflated by theft and corruption, is another matter. One simple piece of data puts this into perspective: to date, America has spent twice as much in inflation-adjusted dollars to rebuild Iraq as it did to rebuild Japan—an industrialized country three times Iraq's size, two of whose cities had been incinerated by atomic bombs. Understanding how and why this happened will take many years—if understanding comes at all. There has been no rush to explain even this one small part of the story, that of the missing Iraqi billions. No one in the U.S. government wants to talk about NorthStar Consultants, much less about the money that disappeared. Bradford R. Higgins was the C.P.A.'s chief financial officer, on loan from the State Department, where he is assistant secretary for resource management and chief financial officer. Higgins says it was "a Department of Defense–managed operation"; he says that "I don't know anyone at NorthStar" and that he did not oversee its operations. The C.P.A.'s comptroller and D.F.I. fund manager during the NorthStar days in 2003 was air-force colonel Don Davis. Through the air-force public-affairs office in the Pentagon, Davis declined to comment. L. Paul Bremer III, who wrote a 400-page book on his experiences as the C.P.A.'s administrator, stated in an interview that he had no input in the decision to hire NorthStar. He explained that "all of the contracting was done, by order of the secretary of defense, by the department of the army. They were our contracting arm … I don't think I ever heard of NorthStar until some questions came up after I left." Nor did he have any dealings with NorthStar's Howell, he said. "If I met him, I have no memory of it." Queries sent repeatedly to the army's public-affairs desk in Baghdad and the Pentagon have gone unanswered, as have those to the office of the secretary of defense.

The simple truth about the missing money is the same one that applies to so much else about the American occupation of Iraq. The U.S. government never did care about accounting for those Iraqi billions and it doesn't care now. It cares only about ensuring that an accounting does not occur.

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Blackwater- Making a Killing in Iraq

On September 16 a heavily armed State Department convoy guarded by Blackwater USA gave orders for a vehicle to move off the road. Somewhere in the chaotic traffic situation that always happens when US convoys rush through Iraqi streets, pushing everyone else off, the vehicle mistook directions and veered back onto the road. The Blackwater USA guards immediately opened fire, shooting at the vehicle and indiscriminately into the heavily populated area. "I saw women and children jump out of their cars and start to crawl on the road to escape being shot," said Iraqi lawyer Hassan Jabar Salman, who was shot four times in the back. "But still the firing kept coming and many of them were killed. I saw a boy of about 10 leaping in fear from a minibus--he was shot in the head. His mother was crying out for him. She jumped out after him, and she was killed." Some 20+ Iraqi civilians would end up dead; dozens more were badly wounded. Blackwater would at first claim a car bomb had gone off, and that they were in a firefight, and the initial vehicle was packed with insurgents. Turned out however that the only people firing were Blackwater; there was never a car bomb; and the drivers of the initial vehicle that was first struck were not insurgents, but an Iraqi man, woman and infant child. Witnesses say the bodies of the mother and child were melded together by the flames that had engulfed their vehicle.



I've written on Blackwater before, in a previous blog titled Attack of the Clones: Blackwater, Emergency Powers & the Endangered Republic. In that article I warned about the rise of the world's largest mercenary outfit, its links to the Bush administration's ever-increasing claims of executive powers, and the dangers such politically-connected private armies pose to any Republic. However Blackwater has been helping sow chaos in another country--or what's left of it--as it has literally terrorized the people of Iraq. From the circumstances that would lead to the decimation of Fullujah (a key marker of the Iraqi Insurgency) to indiscriminate, random, wanton and reckless lawless killings of Iraqis, Blackwater USA has somehow found itself in the middle. Just today, McClatchy Newspapers released a finding that in a separate incident, at the very same time that General Patreaus sat before Congress touting "progress" of the so-called surge, Blackwater guards shot 43 unarmed Iraqi civilians, killing 16. And what's worse is that through its links to powerbrokers in the Bush administration, it is making a killing--literally--by raking in over a billion of our tax dollars.

The person who has probably done the most to bring Blackwater to light is Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. In the wake of this most recent Blackwater scandal, he's written a series of recent articles. One of them is below.

Making a Killing
By Jeremy Scahill, The Nation

September 27 , 2007

http://www.thenation.com/doc/20071015/scahill

It's being described as "Baghdad's bloody Sunday." On September 16 a heavily armed State Department convoy guarded by Blackwater USA was whizzing down the wrong side of the road near Nisour Square in the congested Mansour neighborhood in the Iraqi capital. Iraqi police scrambled to block off traffic to allow the convoy to pass. In the chaos, an Iraqi vehicle entered the square, reportedly failing to heed a policeman's warning fast enough.

The Blackwater operatives, protecting their American principal, a senior State Department official, opened fire on the vehicle, killing the driver. According to witnesses, Blackwater troops then launched some sort of grenade at the car, setting it ablaze. But inside the vehicle was not a small sect from Al Qaeda in Mesopotamia or the Mahdi Army, the "armed insurgents" Blackwater described killing in its official statement on the incident.

It was a young Iraqi family -- man, woman and infant -- whose crime appeared to be panicking in a chaotic traffic situation. Witnesses say the bodies of the mother and child were melded together by the flames that had engulfed their vehicle.

Gunfire rang out in Nisour Square as people fled for their lives. Witnesses described a horrifying scene of indiscriminate shooting by the Blackwater guards. In all, as many as twenty-eight Iraqis may have been killed, and doctors say the toll could climb, as some victims remain in critical condition. A company spokesperson said Blackwater's forces "acted lawfully and appropriately" and "heroically defended American lives in a war zone."

Blackwater's version of events is hotly disputed, not only by the Iraqi government, which says it has video to prove the shooting was unprovoked, but also by survivors of the attack. "I saw women and children jump out of their cars and start to crawl on the road to escape being shot," said Iraqi lawyer Hassan Jabar Salman, who was shot four times in the back during the incident.

"But still the firing kept coming and many of them were killed. I saw a boy of about 10 leaping in fear from a minibus -- he was shot in the head. His mother was crying out for him. She jumped out after him, and she was killed."

Salman says he was driving behind the Blackwater convoy when it stopped. Witnesses say some sort of explosion had gone off in the distance, too far away to have been perceived as a threat. He said Blackwater guards ordered him to turn his vehicle around and leave the scene. Shortly after, the shooting began. "Why had they opened fire?" he asked. "I do not know. No one -- I repeat no one -- had fired at them. The foreigners had asked us to go back, and I was going back in my car, so there was no reason for them to shoot." In all, he says, his car was hit twelve times, including the four bullets that pierced his back.

While the shooting in Nisour Square has put the issue of private forces in Iraq -- and Blackwater's name specifically -- on the front pages of newspapers around the globe, this is hardly the first deadly incident involving these forces. What is new is that the Iraqi government responded powerfully. Within twenty-four hours of the shooting, Iraq's Interior Ministry announced that it was expelling Blackwater from the country; Prime Minister Nuri al-Maliki called the firm's conduct "criminal."

The next day, the State Department ordered all non-US military officials to remain inside the Green Zone, and diplomatic convoys were halted. The Iraqi government, acting as though it was in control of the country, announced that it intended to prosecute the Blackwater men responsible for the killings. "We will not allow Iraqis to be killed in cold blood," Maliki said. "There is a sense of tension and anger among all Iraqis, including the government, over this crime."

But getting rid of Blackwater would not prove to be so easy. Four days after being grounded, Blackwater was back on Iraqi streets. After all, Blackwater is not just any security company in Iraq; it is the leading mercenary company of the US occupation. It first took on this role in the summer of 2003, after receiving a $27 million no-bid contract to provide security for Ambassador Paul Bremer, the original head of the Coalition Provisional Authority.

Since then, it has kept every subsequent US Ambassador, from John Negroponte to Ryan Crocker, alive. It protects Secretary of State Condoleezza Rice when she visits the country, as well as Congressional delegations. Since its original Iraq contract, Blackwater has won more than $700 million in "diplomatic security" contracts through the State Department alone.

The company's domestic political clout has been key to its success. It is owned by Erik Prince, a reclusive right-wing evangelical Christian who has served as a major bankroller of the campaigns of George W. Bush and his allies. Among the company's senior executives are former CIA official J. Cofer Black, who once oversaw the extraordinary-rendition program and led the post-9/11 hunt for Osama bin Laden (and who currently serves as GOP presidential hopeful Mitt Romney's top counterterrorism adviser), and Joseph Schmitz, the Pentagon Inspector General under Donald Rumsfeld.

So embedded is Blackwater in the US apparatus in Iraq that the incident in Nisour Square has sparked a crisis for the occupation that is both practical and political. Now that Blackwater's name is known (and hated) throughout Iraq, the bodyguards themselves are likely to become targets of resistance attacks, perhaps even more so than the officials they are tasked with keeping alive. This will make their work much more difficult. But beyond such security issues are more substantive political ones, as Blackwater's continued presence on Iraqi streets days after Maliki called for its expulsion serves as a potent symbol of the utter lack of Iraqi sovereignty.

Maliki has been under heavy US pressure to back off his initial demands. While Rice immediately called the Iraqi prime minister ostensibly to apologize, she made a point of emphasizing publicly that "we need protection for our diplomats." A few days later, Tahseen Sheikhly, a representative of Maliki's government, stated, "If we drive out this company immediately, there will be a security vacuum. That would cause a big imbalance in the security situation." Given the carnage of September 16, it was a difficult statement to wrap one's head around.

Maliki then agreed to withhold judgment on Blackwater's status, pending the conclusion of a joint US-Iraqi investigation. If he ultimately goes along with the United States and tolerates Blackwater's presence, the political consequences will be severe. Among those calling for the firm's expulsion is Muqtada al-Sadr. A cave-in by Maliki could weaken his already tenuous grip on power and reinforce the widespread perception that he is merely a puppet of the US occupation. Clearly aware of this, while visiting the United States a week after the shootings, Maliki went so far as to call the situation "a serious challenge to the sovereignty of Iraq" that "cannot be accepted."

In Baghdad there is great determination to bring the perpetrators of the Nisour Square slaughter to justice. An investigative team made up of officials from Iraq's Interior, National Security and Defense ministries said in a preliminary report that "the murder of citizens in cold blood in the Nisour area by Blackwater is considered a terrorist action against civilians just like any other terrorist operation."

But Iraqi investigators claim that they have received little or no information from the US government and have been denied access to the Blackwater operatives involved in the shootings. A US official appeared to dismiss the validity of the Iraqi investigation, telling the New York Times, "There is only the joint investigation that we have with the Iraqis."

Still, Iraqi officials announced their intent to bring criminal charges against the Blackwater forces involved in the shooting, and the report stated, "The criminals will be referred to the Iraqi court system." Abdul Sattar Ghafour Bairaqdar, a member of Iraq's Supreme Judiciary Council, the country's highest court, recently said, "This company is subject to Iraqi law, and the crime committed was on Iraqi territory, and the Iraqi judiciary is responsible for tackling the case."

Unfortunately, things are not quite so simple.

On June 27, 2004, the day before Paul Bremer skulked out of Baghdad, he issued a decree known as Order 17, which granted sweeping immunity to private contractors working for the United States in Iraq, effectively barring the Iraqi government from prosecuting contractor crimes in domestic courts. The timing was curious, given that Bremer was leaving after allegedly "handing over sovereignty" to the Iraqi government.

Shortly after the Nisour shooting, Maliki said he wanted to change Order 17 to permit prosecution in Iraqi courts of criminal activities committed by contractors. The Iraqi Parliament could also try to pass a law repealing it altogether. Michael Ratner, president of the Center for Constitutional Rights, characterizes Order 17 as a clear violation of Iraqi sovereignty but points out that it contains a provision that allows the United States to waive the immunity with regard to individuals.

"A possible first step for Iraq is to ask the US to waive the immunity of those involved in the killing," says Ratner, who concedes that this is an unlikely move from Washington, "as it would frighten other private contractors." He also said the immunity is a part of the US strategy for using private companies like Blackwater to deter resistance attacks on occupation personnel. "None of this is by chance; their very purpose is to brutalize and strike fear into the people of Iraq -- that is why they are back on the streets."

Former CIA case officer Robert Baer says that the cleanest solution would be for the United States to rescind Order 17. "Do we let Iraqi Embassy private security contractors race around Washington or New York, machine guns sticking out the window, to prevent carjackings?" asked Baer. "This would effectively close down private security companies. There is no reason the State Department cannot provide its own security." He points out that State Department security officers are under diplomatic immunity, but if there's a questionable shooting, the Iraqi government would have the option of expelling the perpetrators under the Vienna Convention.

This discussion of Order 17 is important but in practical terms it may well be moot, as it is hard to imagine the United States allowing the prosecution of US private security forces in an Iraqi court. Industry representatives say that in cases where contractors are alleged to have committed crimes or engaged in misconduct, Washington has told them to get the contractors in question out of Iraq quickly. As one private security contractor recently told the Washington Post, "We were always told, from the very beginning, if for some reason something happened and the Iraqis were trying to prosecute us, they would put you in the back of a car and sneak you out of the country in the middle of the night."

That is precisely what happened after an incident that occurred last Christmas Eve, in which an off-duty Blackwater operative allegedly shot and killed the Iraqi bodyguard of Vice President Adil Abdul-Mahdi inside the Green Zone. Blackwater officials confirm that they whisked the contractor safely out of Iraq, which they say Washington ordered them to do. Iraqi officials labeled the killing a "murder."

Blackwater says it fired the contractor, but he has yet to be publicly charged with any crime. Representative Dennis Kucinich, a member of the Committee on Oversight and Government Reform, has suggested that "there's a question that could actually make [Blackwater's] corporate officers accessories here in helping to create a flight from justice for someone who's committed a murder." According to a memo from the US Embassy to Secretary Rice, after the shooting, Abdul-Mahdi tried to keep the story under wraps because he believed "Iraqis would not understand how a foreigner could kill an Iraqi and return a free man to his own country."

While there may be a debate about subjecting private forces to Iraqi courts, legal mechanisms do exist to prosecute armed contractors in US courts for crimes committed in Iraq. But the Bush Justice Department would have to press charges, and that hasn't happened. US contractors in Iraq reportedly have their own motto: "What happens here today stays here today."

While much of the media attention stemming from the September 16 killings focuses on the current crisis, this is hardly a new situation. In just the past nine months, Blackwater forces have been at the center of several other fatal shootings that sparked protests from the Iraqi government.

There was the Christmas Eve incident, and then, in May, Blackwater forces engaged in back-to-back deadly actions in a Baghdad neighborhood near the Iraqi Interior Ministry. In one incident, Blackwater forces fired on an Iraqi vehicle they said had veered too close to their convoy, killing a civilian driver. As with the September 16 shooting, witnesses say it was unprovoked. In the ensuing chaos, the Blackwater operatives reportedly refused to give their names or details of the incident to Iraqi officials, sparking a tense standoff between Blackwater and Iraqi forces, both of which were armed with assault rifles. It might have become even bloodier if a US military convoy hadn't arrived on the scene and intervened.

A day before that incident, in almost the same neighborhood, Blackwater operatives found themselves in a gun battle lasting nearly an hour that drew in US military and Iraqi forces, in which at least four Iraqis are said to have died. US sources said the Blackwater forces "did their job," keeping the officials alive.

Iraqi officials allege that there have been at least six deadly incidents involving Blackwater in the past year alone, which in addition to the September 16 death toll have caused ten Iraqi deaths. An Iraqi official says they show Blackwater "has a criminal record." Among these are a February 4 shooting allegedly resulting in the death of Hana al-Ameedi, an Iraqi journalist, near the Foreign Ministry; a February 7 shooting in which three guards were allegedly killed outside Iraqi state television offices; a September 9 shooting during which five Iraqis were killed near a government building in Baghdad; and a September 12 shooting that wounded five people in eastern Baghdad.

US and Iraqi officials reportedly discussed Blackwater's impunity months before the September shooting. "We tried several times to contact the US government through administrative and diplomatic channels to complain about the repeated involvement by Blackwater guards in several incidents that led to the killing of many Iraqis," said deputy Interior Minister Hussein Kamal.

However, US Embassy spokesperson Mirembe Nantongo said, "We have no official documentation on file from our Iraqi partners requesting clarification of any incident." That statement is contradicted by another US official. Matthew Degn, who served as a liaison to the Iraqi Interior Ministry until August, told the Washington Post that Iraqi officials sent a flurry of memos to Blackwater and US officials well before the September 16 shootings and were rebuffed in their requests for action. "We had numerous discussions over [Iraqi government] frustrations with Blackwater, but every time [Iraqi officials] contacted the [US] government, it went nowhere."

Iraq's anger would be understandable even if the only incident involving Blackwater was the Nisour shootings -- more so if you take into account the past year of the company's actions. But this is a four-year pattern that goes beyond Blackwater. The system of "private security" being paid billions in US taxpayer dollars has not only continued despite rampant abuses; it has flourished. Blackwater and its ilk operate in a demand-based industry, and with US forces stretched thin, there has been plenty of demand. According to the Government Accountability Office, there are as many as 180 mercenary firms in Iraq, with tens of thousands of employees. Without the occupation and continued funding for the war, these companies would not be in Iraq.

Even though this scandal is about a system, not about one company or "a few bad apples," Blackwater does stand out. While it has no shortage of US and British competitors in Iraq, no other private force's actions have had more of an impact on events in Iraq than those of the North Carolina-based company. Blackwater's primary purpose in Iraq, at which it has been very effective, is to keep the most hated US occupation officials alive by any means necessary. This has encouraged conduct that places American lives at an infinitely higher premium than those of Iraqi civilians, even in cases where the only Iraqi crime is driving too close to a VIP convoy protected by Blackwater guards.

It isn't just the Iraqi government and the country's civilian population that are angered by Blackwater's conduct. Col. Thomas Hammes, the US military official who once oversaw the creation of a new Iraqi military, has described driving around Iraq with Iraqis and encountering Blackwater operatives. They "were running me off the road. We were threatened and intimidated," Hammes said. But, he added, "they were doing their job, exactly what they were paid to do in the way they were paid to do it, and they were making enemies on every single pass out of town." Hammes concluded they were "hurting our counterinsurgency effort."

Just as the world was learning of the September 16 Blackwater shooting in Baghdad, another scandal involving the company was breaking in the United States. Allegations surfaced that weapons brought into Iraq by Blackwater may have ended up in the hands of the Kurdish militant group the PKK, which is designated a "foreign terrorist organization" by the State Department. According to a September 18 letter sent by Representative Henry Waxman to State Department Inspector General Howard Krongard, a federal investigation into whether Blackwater "was illegally smuggling weapons into Iraq" was obstructed by Krongard, who, Waxman charged, is a partisan operative with close ties to the Bush Administration.

Waxman cited a July e-mail message from Krongard in which he ordered his staff to "stop IMMEDIATELY" cooperating with the federal prosecutor investigating Blackwater until Krongard himself could speak to him. Waxman said Krongard's actions caused "weeks of delay" and that by subsequently assigning a media relations staffer instead of an investigator to aid the prosecutor, Krongard had "impeded the investigation." Blackwater, for its part, denies that it was "in any way associated or complicit in unlawful arms activities" and is cooperating in the federal investigation. Waxman has announced that he will hold hearings on the issue in October.

In keeping with Krongard's stance, the State Department has responded to the widening Blackwater inquiry with stonewalling and evasion. Indeed, Blackwater's attorney told the House Oversight and Government Reform Committee, which Waxman chairs, that State had directed the company "not to disclose any information" regarding its Iraq security contract without written authorization.

After Waxman protested, the department specified that this restriction applied only to classified information. Waxman, for his part, is looking for answers from the top gun: He sent Blackwater CEO Erik Prince a letter requesting his presence at a hearing. "One question that will be examined is whether the government's heavy reliance on private security contractors is serving U.S. interests in Iraq," Waxman informed Prince. "Another question will be whether the specific conduct of your company has advanced or impeded U.S. efforts."

Those are good questions. But it is unfortunate that it has taken four years of the most privatized war in US history for Congress to ask them. Last time Prince was invited to appear before Congress, he sent his lawyer instead. This time Waxman could choose to use the power of the subpoena. As has finally become clear to some in Congress, war contracting is not merely about squandered taxpayer dollars. It is about life and death. The stakes are far too high to let Prince and his cronies call (or fire) any more shots.


Jeremy Scahill, an independent journalist who reports frequently for the national radio and TV program Democracy Now!, has spent extensive time reporting from Iraq and Yugoslavia. He is currently a Puffin Writing Fellow at The Nation Institute. Scahill is the author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.

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AHMADINEJAD-A-PHOBIA

Anyone living in NY for the past few days has been treated to one big soap opera, in which a small president from Iran was turned into the incarnate of Satan, the chancellor of a respected University would embarrass himself in the name of not-so-very "free speech" and the image of the 'ugly American' would reverberate around the world.



First off, I think Ahmadinejad is pretty much alot of mouth and a bit of buffoon myself. Holocaust denial is pretty much up there on my idiot-o-meter. And anyone who can respond to the accusation of the execution of homosexuals with a dead pan, "In Iran, we don't have homosexuals" can only be taken so seriously (After all, our ally Saudi Arabia only *flogs* them in public).

All of that being said, Ahmadinejad's rise to power in Iran was directly related to the Bush administration placing a country that had nothing to do with 9/11 in an Axis of Evil--with one country that was their sworn enemy (Iraq) and another on the other side of the world (North Korea). So it is ironic that this beneficiary of boorish and illogical US foreign policy would today become such a great pariah.

Much was made over Ahmadinejad's visit to the US, a routine act during the meeting of the UN's General Assembly; protest over the controversial leader quickly turned into American exceptionalism and jingoism at fever pitch. First you have the US denying his request to place a wreath at the 9/11 memorial. The supposed reason was that they could not secure his security. No one's buying that. So what was the purpose of the snub? Because he's not liked? Iran had nothing to do with 9/11 and Al-Qaeda are Sunni extremists who would love to see Shiite dominated Iran toppled. Perhaps Ahmadinejad was being sincere. Perhaps he was tweaking the US. Whatever the case, the rabid response by NY tabloids and some city officials only helped him solidify his point about the ugly American.

Speaking of ugly Americans, we also had GOP Presidential candidate Mitt Romney writing a letter to the UN Secretary General declaring that the Iranian president shouldn't be allowed to address the assembly. Uh, newsflash Mr. Romney. The Secretary General of the UN has zip/zilch power on restricting the head of state of a
member nation from speaking anywhere. If you don't know this Mr. Romney, it's reason #8790 why you should not be President of *anything.*

The greatest controversy came about over Ahmadinejad's speaking at Columbia University. This was a legitimate debate, as the Iranian president has certainly done enough for many to be offended at his presence. But how did the President of Columbia who steadfastly protected the freedom of speech for Ahmadinejad react once the Iranian leader was there? Well Chancellor Lee Bollinger, after being savaged by right wingers, Iran-o-phobes and local news outlets, showed up and dutifully played the part of the "ugly American," engaging in alot of name-calling and sharp insults of the man he *invited* to speak.

"You, quite simply, [are] ridiculous," Bollinger berated his guest. "You are either brazenly provocative or astonishingly uneducated. . . . I doubt you will have the intellectual courage to answer [our] questions . . . I do expect you to exhibit the fanatical mind-set that characterizes so much of what you say and do. . . . Your preposterous and belligerent statements . . . led to your party's defeat in the [last] elections."

Wow! What a hero! He berated the head of state of an unpopular country in front of a crowd that also despises that country. Such bravery! What's next? Maybe pillorying Bill Clinton in front of a Rush Limbaugh Fan Club Convention?

Embarrassingly, what Bollinger showed was not only unsightly behavior repackaged as "courage," but his own ignorance in calling Ahmadinejad a " petty dictator," as the Iranian government is structured in such a way that while one can argue that it is dictatorial, it puts no such power in one individual. Ahmadinejad is a souped-up spokesman who has to answer to alot of higher-ups and more behind the scenes "Dutch uncles." If Bollinger really wanted to berate actual dictators, he might have looked to the Al-Saud family of Saudi Arabia or Al-Sabah of Kuwait, all key American allies.

And if you were in the NYC area and had a chance to see the daily vitrolic headlines in the Daily News and that other private but state directed venue the NY Post, caricaturing Ahmadinejad as "evil" and "the devil," etc., you saw ugly Americanism at its best---putting itself on an equal moral and journalistic level as any state run Iranian publication that calls the US "The Great Satan." Way to go there folks.

What this entire excerise did show was that for all the touted ideals of American free speech, it can be circumvented and restricted without reaching the heights of jack-booted thugs disappearing dissenters into the night--though that may be forthcoming given time. When you marry journalists with the state, and a specific ideology that forces even university presidents to obediently play the role of belligerent attack-dog, you've already denied free speech and replaced it with a farce.

Ironically, for all Ahmadinejad's foot-in-mouth disease, and Iran's repressive regime, he/they have not invaded anyone in the last 100 years, occupied any territory that is not their own, sent the region they live in spinning into instability or damaged the reputation of the UN or the delicate geopolitical balance of the world. In fact, the last time Iran had a war, it was because an American ally (Saddam's Iraq) attacked them. Much the same cannot be said for the 'land of the free...'

Glass houses and all that...

Below is an article by Juan Cole, which highlights how this entire kicking up of dust over Ahmadinejad's UN visit is a neo-con drumbeat for war. Also see: The Bollinger/Ahmadinejad Farce.

Turning Ahmadinejad into public enemy No. 1

Demonizing the Iranian president and making his visit to New York seem controversial are all part of the neoconservative push for yet another war.

By Juan Cole

Sep. 24, 2007 | Iranian President Mahmoud Ahmadinejad's visit to New York to address the United Nations General Assembly has become a media circus. But the controversy does not stem from the reasons usually cited.

The media has focused on debating whether he should be allowed to speak at Columbia University on Monday, or whether his request to visit Ground Zero, the site of the Sept. 11 attack in lower Manhattan, should have been honored. His request was rejected, even though Iran expressed sympathy with the United States in the aftermath of those attacks and Iranians held candlelight vigils for the victims. Iran felt that it and other Shiite populations had also suffered at the hands of al-Qaida, and that there might now be an opportunity for a new opening to the United States.

Instead, the U.S. State Department denounced Ahmadinejad as himself little more than a terrorist. Critics have also cited his statements about the Holocaust or his hopes that the Israeli state will collapse. He has been depicted as a Hitler figure intent on killing Israeli Jews, even though he is not commander in chief of the Iranian armed forces, has never invaded any other country, denies he is an anti-Semite, has never called for any Israeli civilians to be killed, and allows Iran's 20,000 Jews to have representation in Parliament.

There is, in fact, remarkably little substance to the debates now raging in the United States about Ahmadinejad. His quirky personality, penchant for outrageous one-liners, and combative populism are hardly serious concerns for foreign policy. Taking potshots at a bantam cock of a populist like Ahmadinejad is actually a way of expressing another, deeper anxiety: fear of Iran's rising position as a regional power and its challenge to the American and Israeli status quo. The real reason his visit is controversial is that the American right has decided the United States needs to go to war against Iran. Ahmadinejad is therefore being configured as an enemy head of state.

The neoconservatives are even claiming that the United States has been at war with Iran since 1979. As Glenn Greenwald points out, this assertion is absurd. In the '80s, the Reagan administration sold substantial numbers of arms to Iran. Some of those beating the war drums most loudly now, like think-tank rat Michael Ledeen, were middlemen in the Reagan administration's unconstitutional weapons sales to Tehran. The sales would have been a form of treason if in fact the United States had been at war with Iran at that time, so Ledeen is apparently accusing himself of treason.

But the right has decided it is at war with Iran, so a routine visit by Iran's ceremonial president to the U.N. General Assembly has generated sparks. The foremost cheerleader for such a view in Congress is Sen. Joseph Lieberman, I-Conn., who recently pressed Gen. David Petraeus on the desirability of bombing Iran in order to forestall weapons smuggling into Iraq from that country (thus cleverly using one war of choice to foment another).

American hawks are beating the war drums loudly because they are increasingly frustrated with the course of events. They are unsatisfied with the lack of enthusiasm among the Europeans and at the United Nations for impeding Tehran's nuclear energy research program. While the Bush administration insists that the program aims at producing a bomb, the Iranian state maintains that it is for peaceful energy purposes. Washington wants tighter sanctions on Iran at the United Nations but is unlikely to get them in the short term because of Russian and Chinese reluctance. The Bush administration may attempt to create a "coalition of the willing" of Iran boycotters outside the U.N. framework.

Washington is also unhappy with Mohammad ElBaradei, head of the International Atomic Energy Agency. He has been unable to find credible evidence that Iran has a weapons program, and he told Italian television this week, "Iran does not constitute a certain and immediate threat for the international community." He stressed that no evidence had been found for underground production sites or hidden radioactive substances, and he urged a three-month waiting period before the U.N. Security Council drew negative conclusions.

ElBaradei intervened to call for calm after French Foreign Minister Bernard Kouchner said last week that if the negotiations over Iran's nuclear research program were unsuccessful, it could lead to war. Kouchner later clarified that he was not calling for an attack on Iran, but his remarks appear to have been taken seriously in Tehran.

Kouchner made the remarks after there had already been substantial speculation in the U.S. press that impatient hawks around U.S. Vice President Dick Cheney were seeking a pretext for a U.S. attack on Iran. Steven Clemons of the New America Foundation probably correctly concluded in Salon last week that President Bush himself has for now decided against launching a war on Iran. But Clemons worries that Cheney and the neoconservatives, with their Israeli allies, are perfectly capable of setting up a provocation that would lead willy-nilly to war.

David Wurmser, until recently a key Cheney advisor on Middle East affairs and the coauthor of the infamous 1996 white paper that urged an Iraq war, revealed to his circle that Cheney had contemplated having Israel strike at Iranian nuclear research facilities and then using the Iranian reaction as a pretext for a U.S. war on that country. Prominent and well-connected Afghanistan specialist Barnett Rubin also revealed that he was told by an administration insider that there would be an "Iran war rollout" by the Cheneyites this fall.

It should also be stressed that some elements in the U.S. officer corps and the Defense Intelligence Agency are clearly spoiling for a fight with Iran because the Iranian-supported Shiite nationalists in Iraq are a major obstacle to U.S. dominance in Iraq. Although very few U.S. troops in Iraq are killed by Shiites, military spokesmen have been attempting to give the impression that Tehran is ordering hits on U.S. troops, a clear casus belli. Disinformation campaigns that accuse Iran of trying to destabilize the Shiite-dominated Iraqi government -- a government Iran actually supports -- could lay the groundwork for a war. Likewise, with the U.S. military now beginning patrols on the Iran-Iraq border, the possibility is enhanced of a hostile incident spinning out of control.

The Iranians have responded to all this bellicosity with some chest-thumping of their own, right up to the final hours before Ahmadinejad's American visit. The Iranian government declared "National Defense Week" on Saturday, kicking it off with a big military parade that showed off Iran's new Qadr-1 missiles, with a range of 1,100 miles. Before he left Iran for New York on Sunday morning, Ahmadinejad inspected three types of Iranian-manufactured jet fighters, noting that it was the anniversary of Iraq's invasion of Iran in 1980 (which the Iranian press attributed to American urging, though that is unlikely).

The display of this military equipment was accompanied by a raft of assurances on the part of the Iranian ayatollahs, politicians and generals that they were entirely prepared to deploy the missiles and planes if they were attacked. A top military advisor to Supreme Jurisprudent Ali Khamenei told the Mehr News Agency on Saturday, "Today, the United States must know that their 200,000 soldiers in Iraq and Afghanistan are within the reach of Iran's fire. When the Americans were beyond our shores, they were not within our reach, but today it is very easy for us to deal them blows." Khamenei, the actual commander in chief of the armed forces, weighed in as well, reiterating that Iran would never attack first but pledging: "Those who make threats should know that attack on Iran in the form of hit and run will not be possible, and if any country invades Iran it will face its very serious consequences."

The threat to target U.S. troops in Iraq and Afghanistan and the unveiling of the Qadr-1 were not aggressive in intent, but designed to make the point that Iran could also play by Richard M. Nixon's "madman" strategy, whereby you act so wildly as to convince your enemy you are capable of anything. Ordinarily a poor non-nuclear third-world country might be expected to be supine before an attack by a superpower. But as Mohammad Reza Bahonar, the Iranian deputy speaker of Parliament, warned: "Any military attack against Iran will send the region up in flames."

In the end, this is hardly the kind of conflagration the United States should be enabling. If a spark catches, it will not advance any of America's four interests in the Middle East: petroleum, markets, Israel and hegemony.

The Middle East has two-thirds of the world's proven petroleum reserves and nearly half its natural gas, and its fields are much deeper than elsewhere in the world, so that its importance will grow for the United States and its allies. Petro-dollars and other wealth make the region an important market for U.S. industry, especially the arms industry. Israel is important both for reasons of domestic politics and because it is a proxy for U.S. power in the region. By "hegemony," I mean the desire of Washington to dominate political and economic outcomes in the region and to forestall rivals such as China from making it their sphere of influence.

The Iranian government (in which Ahmadinejad has a weak role, analogous to that of U.S. vice presidents before Dick Cheney) poses a challenge to the U.S. program in the Middle East. Iran is, unlike most Middle Eastern countries, large. It is geographically four times the size of France, and it has a population of 70 million (more than France or the United Kingdom). As an oil state, it has done very well from the high petroleum prices of recent years. It has been negotiating long-term energy deals with China and India, much to the dismay of Washington. It provides financial support to the Palestinians and to the Lebanese Shiites who vote for the Hezbollah Party in Lebanon. By overthrowing the Afghanistan and Iraq governments and throwing both countries into chaos, the United States has inadvertently enabled Iran to emerge as a potential regional power, which could challenge Israel and Saudi Arabia and project both soft and hard power in the strategic Persian Gulf and the Levant.

And now the American war party, undeterred by the quagmire in Iraq, convinced that their model of New Empire is working, is eager to go on the offensive again. They may yet find a pretext to plunge the United States into another war. Ahmadinejad's visit to New York this year will not include his visit to Ground Zero, because that is hallowed ground for American patriotism and he is being depicted as not just a critic of the United States but as the leader of an enemy state. His visit may, however, be ground zero for the next big military struggle of the United States in the Middle East, one that really will make Iraq look like a cakewalk.

-- By Juan Cole

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Black Snake Moan vs Megan Williams

Okay... So by now everyone has heard of the ordeal of Megan Williams, the young black woman who police say was kidnapped, tortured and repeatedly sexually abused for a week long ordeal in Charleston, West Virginia. Williams mother says she was chained, sexually assaulted, doused with hot water, stabbed, forced to eat animal feces, and taunted with racial slurs (n*gger). Six whites, two of them women, were arrested and now face a multitude of charges. Wonder if Craig Brewer, the white guy who showed us a black pimp can cry in Hustle & Flow, and that the long-time southern fantasy of 'white woman slavery' does exist after all in the not-so-subtle symbolisms of Black Snake Moan, will tackle this in his next film?


While news of this bizarre case has been noteworthy, it has interestingly enough not reached the heights of accused dog torturer Michael Vick, or any number of reports featuring missing white girls or young women. The reality is of course that statistics show the sexual abuse of girls and women in American society is a common occurrence. Megan Williams' case compounds the issue by its sheer extremities and the intersections of race and gender in the South. If any serious discussions were to be had, a Pandora's box of American issues of violence, race and women of color could be opened up--but not likely. Instead, the most we'll get are inverted stories like Brewer's Black Snake Moan, that seek to bury harsh realities under complicated symbolic fantasies. Go figure.

At any rate, of all the op eds I have seen on this topic, the best thus far has been from James Peterson at Black Prof.com, who places the issue in a larger perspective.

His piece is reposted in full below:

Why Megan Matters

by James Peterson

First, my heart goes out to Megan Williams, her parents: Carmen and Matthew Williams, as well as her family and the community of Charleston, West Virginia; who, like most of us, must be shocked, outraged and utterly disturbed by the heinous hate crimes that took place in that trailer home located in Logan County.

The agonizing situational irony of this story “breaking” on the sixth anniversary of 9-11 puts into bold relief the sentiments of several or our leading public intellectuals and the abiding sense amongst some African Americans that the so-called War on Terror is misplaced and misdirected if one considers for one moment the consistent acts of terror committed against women and people of color in this country.

After their appearances on HBO’s Real Time with Bill Maher, both Cornel West and Hip Hop artist/activist/actor Mos Def were lambasted by mainstream media for their “extreme” views on Osama Bin Laden, the attack on the twin towers, and American efforts to combat terrorists over seas. Dr. West and others like Dr. Michael Eric Dyson have clearly attempted to re-center any discussion on terror around the experiences of Black Folk in this country in order to provide a reasonable context for why some people simply cannot stomach an American policy that is inherently hypocritical if it does not root out terror in its own back yard.

The fact that these acts of racist terror are executed by American citizens (and I use this term very loosely here) should provide proof positive for Dyson’s and West’s reasonable suggestions that some people of color simply can not genuinely connect themselves to the patriotic machinery that invites us to hate “Islamic Fascists” or to accept a permanent war allegedly committed to eradicating evil overseas when so much evil still lurks right here, in West Virginia, in Louisiana, in New York, Texas, Wyoming or (insert heinous hate-crime locale here) AMERICA.

Six white West Virginians (Frankie Lee Brewster, age 49, Bobby Brewster, 24, Danny Combs, 20, George Messer, 27, Karen Burton, 45, and Alisha Burton, 23) have been charged with the kidnapping, malicious wounding, battery, and sexual assault of 20 year-old Megan Williams. Over the course of a week-long, unimaginable and I am sure for her, unending torture-spree, these six devilish people raped her, scolded her with boiling water, pulled out her hair, beat her, choked her, stabbed her, forced her to drink from a toilet, eat feces and otherwise utterly de-humanized her. They would call her “nigger’ when they stabbed her. And one of the ‘alleged’ assailants exclaimed: “that’s what we do to niggers around here.” Around here being Logan County West Virginia, but for women and people of color who have endured and persevered in the face of all forms of gendered and/or racialized terror, ‘around here’ can mean around the corner.

And so yes, (and I know this will surely bring out all of the haters) 9-11 cannot mean the same thing to me anymore. Not because of our current administration’s flawed foreign policy; not because of the popular youtube movie – Loose Change, but because we live in a country where Megan’s humanity can be erased. And that it can be erased so horrifically with such awfully racist motivation and cruel intentions, means that some of us are not safe from a homegrown (and historically cultivated) strain of terrorism.

Megan matters more to me now because I know that if she were white and her alleged assailants were black than this would be a top news story. It would be front page on all of the major websites and internet platforms. If she were a dog and her alleged assailants were black athletes, every news outlet in the world would converge on these assailants. But alas, she is a human being. She is a woman. She is an African American woman. And since there is no PETH with the power of PETA, (i.e. since some people care more about dogs than they do about people; even people who are treated worse than dogs); and since we live in a world where terror coming from over there is more important than the terror that comes from right here, I just want to make it clear that I stand against the racial terror that operates RIGHT HERE.

Megan matters because her horror story is not the first of its kind and unless we unveil and eradicate the racist elements of our own society it unfortunately will not be the last.

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Fascist America in 10 Easy Steps

I tend to write alot about the spiral into a police state of fascism in America. Most people scoff, thinking it's far-fetched. But that's what most people who are marching down the road to a fascist authoratative state always do--scoffing while all the while they are being spied on, having their rights stripped away, pressured into silence, fear-mongered into wars and lulled to sleep by a complacent media. Last April, Naomi Wolf wrote an article that appeared in the Guardian Unlimited titled, Fascist America in 10 Easy Steps. I reprint it here for careful review.


Fascist America, in 10 easy steps


From Hitler to Pinochet and beyond, history shows there are certain steps that any would-be dictator must take to destroy constitutional freedoms. And, argues Naomi Wolf, George Bush and his administration seem to be taking them all

Tuesday April 24, 2007
The Guardian


Last autumn, there was a military coup in Thailand. The leaders of the coup took a number of steps, rather systematically, as if they had a shopping list. In a sense, they did. Within a matter of days, democracy had been closed down: the coup leaders declared martial law, sent armed soldiers into residential areas, took over radio and TV stations, issued restrictions on the press, tightened some limits on travel, and took certain activists into custody.

They were not figuring these things out as they went along. If you look at history, you can see that there is essentially a blueprint for turning an open society into a dictatorship. That blueprint has been used again and again in more and less bloody, more and less terrifying ways. But it is always effective. It is very difficult and arduous to create and sustain a democracy - but history shows that closing one down is much simpler. You simply have to be willing to take the 10 steps.
As difficult as this is to contemplate, it is clear, if you are willing to look, that each of these 10 steps has already been initiated today in the United States by the Bush administration.

Because Americans like me were born in freedom, we have a hard time even considering that it is possible for us to become as unfree - domestically - as many other nations. Because we no longer learn much about our rights or our system of government - the task of being aware of the constitution has been outsourced from citizens' ownership to being the domain of professionals such as lawyers and professors - we scarcely recognise the checks and balances that the founders put in place, even as they are being systematically dismantled. Because we don't learn much about European history, the setting up of a department of "homeland" security - remember who else was keen on the word "homeland" - didn't raise the alarm bells it might have.

It is my argument that, beneath our very noses, George Bush and his administration are using time-tested tactics to close down an open society. It is time for us to be willing to think the unthinkable - as the author and political journalist Joe Conason, has put it, that it can happen here. And that we are further along than we realise.

Conason eloquently warned of the danger of American authoritarianism. I am arguing that we need also to look at the lessons of European and other kinds of fascism to understand the potential seriousness of the events we see unfolding in the US.

1. Invoke a terrifying internal and external enemy

After we were hit on September 11 2001, we were in a state of national shock. Less than six weeks later, on October 26 2001, the USA Patriot Act was passed by a Congress that had little chance to debate it; many said that they scarcely had time to read it. We were told we were now on a "war footing"; we were in a "global war" against a "global caliphate" intending to "wipe out civilisation". There have been other times of crisis in which the US accepted limits on civil liberties, such as during the civil war, when Lincoln declared martial law, and the second world war, when thousands of Japanese-American citizens were interned. But this situation, as Bruce Fein of the American Freedom Agenda notes, is unprecedented: all our other wars had an endpoint, so the pendulum was able to swing back toward freedom; this war is defined as open-ended in time and without national boundaries in space - the globe itself is the battlefield. "This time," Fein says, "there will be no defined end."

Creating a terrifying threat - hydra-like, secretive, evil - is an old trick. It can, like Hitler's invocation of a communist threat to the nation's security, be based on actual events (one Wisconsin academic has faced calls for his dismissal because he noted, among other things, that the alleged communist arson, the Reichstag fire of February 1933, was swiftly followed in Nazi Germany by passage of the Enabling Act, which replaced constitutional law with an open-ended state of emergency). Or the terrifying threat can be based, like the National Socialist evocation of the "global conspiracy of world Jewry", on myth.

It is not that global Islamist terrorism is not a severe danger; of course it is. I am arguing rather that the language used to convey the nature of the threat is different in a country such as Spain - which has also suffered violent terrorist attacks - than it is in America. Spanish citizens know that they face a grave security threat; what we as American citizens believe is that we are potentially threatened with the end of civilisation as we know it. Of course, this makes us more willing to accept restrictions on our freedoms.

2. Create a gulag

Once you have got everyone scared, the next step is to create a prison system outside the rule of law (as Bush put it, he wanted the American detention centre at Guantánamo Bay to be situated in legal "outer space") - where torture takes place.

At first, the people who are sent there are seen by citizens as outsiders: troublemakers, spies, "enemies of the people" or "criminals". Initially, citizens tend to support the secret prison system; it makes them feel safer and they do not identify with the prisoners. But soon enough, civil society leaders - opposition members, labour activists, clergy and journalists - are arrested and sent there as well.

This process took place in fascist shifts or anti-democracy crackdowns ranging from Italy and Germany in the 1920s and 1930s to the Latin American coups of the 1970s and beyond. It is standard practice for closing down an open society or crushing a pro-democracy uprising.

With its jails in Iraq and Afghanistan, and, of course, Guantánamo in Cuba, where detainees are abused, and kept indefinitely without trial and without access to the due process of the law, America certainly has its gulag now. Bush and his allies in Congress recently announced they would issue no information about the secret CIA "black site" prisons throughout the world, which are used to incarcerate people who have been seized off the street.

Gulags in history tend to metastasise, becoming ever larger and more secretive, ever more deadly and formalised. We know from first-hand accounts, photographs, videos and government documents that people, innocent and guilty, have been tortured in the US-run prisons we are aware of and those we can't investigate adequately.

But Americans still assume this system and detainee abuses involve only scary brown people with whom they don't generally identify. It was brave of the conservative pundit William Safire to quote the anti-Nazi pastor Martin Niemöller, who had been seized as a political prisoner: "First they came for the Jews." Most Americans don't understand yet that the destruction of the rule of law at Guantánamo set a dangerous precedent for them, too.

By the way, the establishment of military tribunals that deny prisoners due process tends to come early on in a fascist shift. Mussolini and Stalin set up such tribunals. On April 24 1934, the Nazis, too, set up the People's Court, which also bypassed the judicial system: prisoners were held indefinitely, often in isolation, and tortured, without being charged with offences, and were subjected to show trials. Eventually, the Special Courts became a parallel system that put pressure on the regular courts to abandon the rule of law in favour of Nazi ideology when making decisions.

3. Develop a thug caste

When leaders who seek what I call a "fascist shift" want to close down an open society, they send paramilitary groups of scary young men out to terrorise citizens. The Blackshirts roamed the Italian countryside beating up communists; the Brownshirts staged violent rallies throughout Germany. This paramilitary force is especially important in a democracy: you need citizens to fear thug violence and so you need thugs who are free from prosecution.

The years following 9/11 have proved a bonanza for America's security contractors, with the Bush administration outsourcing areas of work that traditionally fell to the US military. In the process, contracts worth hundreds of millions of dollars have been issued for security work by mercenaries at home and abroad. In Iraq, some of these contract operatives have been accused of involvement in torturing prisoners, harassing journalists and firing on Iraqi civilians. Under Order 17, issued to regulate contractors in Iraq by the one-time US administrator in Baghdad, Paul Bremer, these contractors are immune from prosecution

Yes, but that is in Iraq, you could argue; however, after Hurricane Katrina, the Department of Homeland Security hired and deployed hundreds of armed private security guards in New Orleans. The investigative journalist Jeremy Scahill interviewed one unnamed guard who reported having fired on unarmed civilians in the city. It was a natural disaster that underlay that episode - but the administration's endless war on terror means ongoing scope for what are in effect privately contracted armies to take on crisis and emergency management at home in US cities.

Thugs in America? Groups of angry young Republican men, dressed in identical shirts and trousers, menaced poll workers counting the votes in Florida in 2000. If you are reading history, you can imagine that there can be a need for "public order" on the next election day. Say there are protests, or a threat, on the day of an election; history would not rule out the presence of a private security firm at a polling station "to restore public order".

4. Set up an internal surveillance system

In Mussolini's Italy, in Nazi Germany, in communist East Germany, in communist China - in every closed society - secret police spy on ordinary people and encourage neighbours to spy on neighbours. The Stasi needed to keep only a minority of East Germans under surveillance to convince a majority that they themselves were being watched.

In 2005 and 2006, when James Risen and Eric Lichtblau wrote in the New York Times about a secret state programme to wiretap citizens' phones, read their emails and follow international financial transactions, it became clear to ordinary Americans that they, too, could be under state scrutiny.

In closed societies, this surveillance is cast as being about "national security"; the true function is to keep citizens docile and inhibit their activism and dissent.

5. Harass citizens' groups

The fifth thing you do is related to step four - you infiltrate and harass citizens' groups. It can be trivial: a church in Pasadena, whose minister preached that Jesus was in favour of peace, found itself being investigated by the Internal Revenue Service, while churches that got Republicans out to vote, which is equally illegal under US tax law, have been left alone.

Other harassment is more serious: the American Civil Liberties Union reports that thousands of ordinary American anti-war, environmental and other groups have been infiltrated by agents: a secret Pentagon database includes more than four dozen peaceful anti-war meetings, rallies or marches by American citizens in its category of 1,500 "suspicious incidents". The equally secret Counterintelligence Field Activity (Cifa) agency of the Department of Defense has been gathering information about domestic organisations engaged in peaceful political activities: Cifa is supposed to track "potential terrorist threats" as it watches ordinary US citizen activists. A little-noticed new law has redefined activism such as animal rights protests as "terrorism". So the definition of "terrorist" slowly expands to include the opposition.

6. Engage in arbitrary detention and release

This scares people. It is a kind of cat-and-mouse game. Nicholas D Kristof and Sheryl WuDunn, the investigative reporters who wrote China Wakes: the Struggle for the Soul of a Rising Power, describe pro-democracy activists in China, such as Wei Jingsheng, being arrested and released many times. In a closing or closed society there is a "list" of dissidents and opposition leaders: you are targeted in this way once you are on the list, and it is hard to get off the list.

In 2004, America's Transportation Security Administration confirmed that it had a list of passengers who were targeted for security searches or worse if they tried to fly. People who have found themselves on the list? Two middle-aged women peace activists in San Francisco; liberal Senator Edward Kennedy; a member of Venezuela's government - after Venezuela's president had criticised Bush; and thousands of ordinary US citizens.

Professor Walter F Murphy is emeritus of Princeton University; he is one of the foremost constitutional scholars in the nation and author of the classic Constitutional Democracy. Murphy is also a decorated former marine, and he is not even especially politically liberal. But on March 1 this year, he was denied a boarding pass at Newark, "because I was on the Terrorist Watch list".

"Have you been in any peace marches? We ban a lot of people from flying because of that," asked the airline employee.

"I explained," said Murphy, "that I had not so marched but had, in September 2006, given a lecture at Princeton, televised and put on the web, highly critical of George Bush for his many violations of the constitution."

"That'll do it," the man said.

Anti-war marcher? Potential terrorist. Support the constitution? Potential terrorist. History shows that the categories of "enemy of the people" tend to expand ever deeper into civil life.

James Yee, a US citizen, was the Muslim chaplain at Guantánamo who was accused of mishandling classified documents. He was harassed by the US military before the charges against him were dropped. Yee has been detained and released several times. He is still of interest.

Brandon Mayfield, a US citizen and lawyer in Oregon, was mistakenly identified as a possible terrorist. His house was secretly broken into and his computer seized. Though he is innocent of the accusation against him, he is still on the list.

It is a standard practice of fascist societies that once you are on the list, you can't get off.

7. Target key individuals

Threaten civil servants, artists and academics with job loss if they don't toe the line. Mussolini went after the rectors of state universities who did not conform to the fascist line; so did Joseph Goebbels, who purged academics who were not pro-Nazi; so did Chile's Augusto Pinochet; so does the Chinese communist Politburo in punishing pro-democracy students and professors.

Academe is a tinderbox of activism, so those seeking a fascist shift punish academics and students with professional loss if they do not "coordinate", in Goebbels' term, ideologically. Since civil servants are the sector of society most vulnerable to being fired by a given regime, they are also a group that fascists typically "coordinate" early on: the Reich Law for the Re-establishment of a Professional Civil Service was passed on April 7 1933.

Bush supporters in state legislatures in several states put pressure on regents at state universities to penalise or fire academics who have been critical of the administration. As for civil servants, the Bush administration has derailed the career of one military lawyer who spoke up for fair trials for detainees, while an administration official publicly intimidated the law firms that represent detainees pro bono by threatening to call for their major corporate clients to boycott them.

Elsewhere, a CIA contract worker who said in a closed blog that "waterboarding is torture" was stripped of the security clearance she needed in order to do her job.

Most recently, the administration purged eight US attorneys for what looks like insufficient political loyalty. When Goebbels purged the civil service in April 1933, attorneys were "coordinated" too, a step that eased the way of the increasingly brutal laws to follow.

8. Control the press

Italy in the 1920s, Germany in the 30s, East Germany in the 50s, Czechoslovakia in the 60s, the Latin American dictatorships in the 70s, China in the 80s and 90s - all dictatorships and would-be dictators target newspapers and journalists. They threaten and harass them in more open societies that they are seeking to close, and they arrest them and worse in societies that have been closed already.

The Committee to Protect Journalists says arrests of US journalists are at an all-time high: Josh Wolf (no relation), a blogger in San Francisco, has been put in jail for a year for refusing to turn over video of an anti-war demonstration; Homeland Security brought a criminal complaint against reporter Greg Palast, claiming he threatened "critical infrastructure" when he and a TV producer were filming victims of Hurricane Katrina in Louisiana. Palast had written a bestseller critical of the Bush administration.

Other reporters and writers have been punished in other ways. Joseph C Wilson accused Bush, in a New York Times op-ed, of leading the country to war on the basis of a false charge that Saddam Hussein had acquired yellowcake uranium in Niger. His wife, Valerie Plame, was outed as a CIA spy - a form of retaliation that ended her career.

Prosecution and job loss are nothing, though, compared with how the US is treating journalists seeking to cover the conflict in Iraq in an unbiased way. The Committee to Protect Journalists has documented multiple accounts of the US military in Iraq firing upon or threatening to fire upon unembedded (meaning independent) reporters and camera operators from organisations ranging from al-Jazeera to the BBC. While westerners may question the accounts by al-Jazeera, they should pay attention to the accounts of reporters such as the BBC's Kate Adie. In some cases reporters have been wounded or killed, including ITN's Terry Lloyd in 2003. Both CBS and the Associated Press in Iraq had staff members seized by the US military and taken to violent prisons; the news organisations were unable to see the evidence against their staffers.

Over time in closing societies, real news is supplanted by fake news and false documents. Pinochet showed Chilean citizens falsified documents to back up his claim that terrorists had been about to attack the nation. The yellowcake charge, too, was based on forged papers.

You won't have a shutdown of news in modern America - it is not possible. But you can have, as Frank Rich and Sidney Blumenthal have pointed out, a steady stream of lies polluting the news well. What you already have is a White House directing a stream of false information that is so relentless that it is increasingly hard to sort out truth from untruth. In a fascist system, it's not the lies that count but the muddying. When citizens can't tell real news from fake, they give up their demands for accountability bit by bit.

9. Dissent equals treason

Cast dissent as "treason" and criticism as "espionage'. Every closing society does this, just as it elaborates laws that increasingly criminalise certain kinds of speech and expand the definition of "spy" and "traitor". When Bill Keller, the publisher of the New York Times, ran the Lichtblau/Risen stories, Bush called the Times' leaking of classified information "disgraceful", while Republicans in Congress called for Keller to be charged with treason, and rightwing commentators and news outlets kept up the "treason" drumbeat. Some commentators, as Conason noted, reminded readers smugly that one penalty for violating the Espionage Act is execution.

Conason is right to note how serious a threat that attack represented. It is also important to recall that the 1938 Moscow show trial accused the editor of Izvestia, Nikolai Bukharin, of treason; Bukharin was, in fact, executed. And it is important to remind Americans that when the 1917 Espionage Act was last widely invoked, during the infamous 1919 Palmer Raids, leftist activists were arrested without warrants in sweeping roundups, kept in jail for up to five months, and "beaten, starved, suffocated, tortured and threatened with death", according to the historian Myra MacPherson. After that, dissent was muted in America for a decade.

In Stalin's Soviet Union, dissidents were "enemies of the people". National Socialists called those who supported Weimar democracy "November traitors".

And here is where the circle closes: most Americans do not realise that since September of last year - when Congress wrongly, foolishly, passed the Military Commissions Act of 2006 - the president has the power to call any US citizen an "enemy combatant". He has the power to define what "enemy combatant" means. The president can also delegate to anyone he chooses in the executive branch the right to define "enemy combatant" any way he or she wants and then seize Americans accordingly.

Even if you or I are American citizens, even if we turn out to be completely innocent of what he has accused us of doing, he has the power to have us seized as we are changing planes at Newark tomorrow, or have us taken with a knock on the door; ship you or me to a navy brig; and keep you or me in isolation, possibly for months, while awaiting trial. (Prolonged isolation, as psychiatrists know, triggers psychosis in otherwise mentally healthy prisoners. That is why Stalin's gulag had an isolation cell, like Guantánamo's, in every satellite prison. Camp 6, the newest, most brutal facility at Guantánamo, is all isolation cells.)

We US citizens will get a trial eventually - for now. But legal rights activists at the Center for Constitutional Rights say that the Bush administration is trying increasingly aggressively to find ways to get around giving even US citizens fair trials. "Enemy combatant" is a status offence - it is not even something you have to have done. "We have absolutely moved over into a preventive detention model - you look like you could do something bad, you might do something bad, so we're going to hold you," says a spokeswoman of the CCR.

Most Americans surely do not get this yet. No wonder: it is hard to believe, even though it is true. In every closing society, at a certain point there are some high-profile arrests - usually of opposition leaders, clergy and journalists. Then everything goes quiet. After those arrests, there are still newspapers, courts, TV and radio, and the facades of a civil society. There just isn't real dissent. There just isn't freedom. If you look at history, just before those arrests is where we are now.

10. Suspend the rule of law

The John Warner Defense Authorization Act of 2007 gave the president new powers over the national guard. This means that in a national emergency - which the president now has enhanced powers to declare - he can send Michigan's militia to enforce a state of emergency that he has declared in Oregon, over the objections of the state's governor and its citizens.

Even as Americans were focused on Britney Spears's meltdown and the question of who fathered Anna Nicole's baby, the New York Times editorialised about this shift: "A disturbing recent phenomenon in Washington is that laws that strike to the heart of American democracy have been passed in the dead of night ... Beyond actual insurrection, the president may now use military troops as a domestic police force in response to a natural disaster, a disease outbreak, terrorist attack or any 'other condition'."

Critics see this as a clear violation of the Posse Comitatus Act - which was meant to restrain the federal government from using the military for domestic law enforcement. The Democratic senator Patrick Leahy says the bill encourages a president to declare federal martial law. It also violates the very reason the founders set up our system of government as they did: having seen citizens bullied by a monarch's soldiers, the founders were terrified of exactly this kind of concentration of militias' power over American people in the hands of an oppressive executive or faction.

Of course, the United States is not vulnerable to the violent, total closing-down of the system that followed Mussolini's march on Rome or Hitler's roundup of political prisoners. Our democratic habits are too resilient, and our military and judiciary too independent, for any kind of scenario like that.

Rather, as other critics are noting, our experiment in democracy could be closed down by a process of erosion.

It is a mistake to think that early in a fascist shift you see the profile of barbed wire against the sky. In the early days, things look normal on the surface; peasants were celebrating harvest festivals in Calabria in 1922; people were shopping and going to the movies in Berlin in 1931. Early on, as WH Auden put it, the horror is always elsewhere - while someone is being tortured, children are skating, ships are sailing: "dogs go on with their doggy life ... How everything turns away/ Quite leisurely from the disaster."

As Americans turn away quite leisurely, keeping tuned to internet shopping and American Idol, the foundations of democracy are being fatally corroded. Something has changed profoundly that weakens us unprecedentedly: our democratic traditions, independent judiciary and free press do their work today in a context in which we are "at war" in a "long war" - a war without end, on a battlefield described as the globe, in a context that gives the president - without US citizens realising it yet - the power over US citizens of freedom or long solitary incarceration, on his say-so alone.

That means a hollowness has been expanding under the foundation of all these still- free-looking institutions - and this foundation can give way under certain kinds of pressure. To prevent such an outcome, we have to think about the "what ifs".

What if, in a year and a half, there is another attack - say, God forbid, a dirty bomb? The executive can declare a state of emergency. History shows that any leader, of any party, will be tempted to maintain emergency powers after the crisis has passed. With the gutting of traditional checks and balances, we are no less endangered by a President Hillary than by a President Giuliani - because any executive will be tempted to enforce his or her will through edict rather than the arduous, uncertain process of democratic negotiation and compromise.

What if the publisher of a major US newspaper were charged with treason or espionage, as a rightwing effort seemed to threaten Keller with last year? What if he or she got 10 years in jail? What would the newspapers look like the next day? Judging from history, they would not cease publishing; but they would suddenly be very polite.

Right now, only a handful of patriots are trying to hold back the tide of tyranny for the rest of us - staff at the Center for Constitutional Rights, who faced death threats for representing the detainees yet persisted all the way to the Supreme Court; activists at the American Civil Liberties Union; and prominent conservatives trying to roll back the corrosive new laws, under the banner of a new group called the American Freedom Agenda. This small, disparate collection of people needs everybody's help, including that of Europeans and others internationally who are willing to put pressure on the administration because they can see what a US unrestrained by real democracy at home can mean for the rest of the world.

We need to look at history and face the "what ifs". For if we keep going down this road, the "end of America" could come for each of us in a different way, at a different moment; each of us might have a different moment when we feel forced to look back and think: that is how it was before - and this is the way it is now.

"The accumulation of all powers, legislative, executive, and judiciary, in the same hands ... is the definition of tyranny," wrote James Madison. We still have the choice to stop going down this road; we can stand our ground and fight for our nation, and take up the banner the founders asked us to carry.

Naomi Wolf's The End of America: A Letter of Warning to a Young Patriot will be published by Chelsea Green in September.

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Morpheus Returns- And So Does Katrina...

Okay. So Morpheus took a litle longer to return than first expected. Hey, you try fighting Sentinels and Agents--taking 2nd billing to Neo no less--all the while trying to maintain a blog. Like our fearless leader George Dubya would say, "it's hard!" But! Like the prodigal son, I have returned. Due to time constraints, the Media Round Up will no longer be "weekly," though rest assured an eye will still be kept on the *failing* 4th Estate. So enough of that, let's start this hoot-nanny!

K A T R I N A- two years from this tragic event in U.S. history, the residents of the Gulf Coast, New Orleans in particular, have still not recovered. For those living in America's Disneyland of Lindsey Lohan and American Idol, the disaster of Katrina (both natural and man-made) highlighted not only the racial and wealth inequities that have long plagued this country, but exposed the Bush administration for the incompetent junta of cronies that they really are--more adept at spinning facts to their ends than actually running a functioning government.



Unfortunately, the American attention span is short. So in fact is the national media's, who congratulates itself for being there to cover the story (neglecting to point out their role in spreadiing racist "Birth of a Nation" type rumors about New Orlean's citizenry). Much the same can be said for the political class (with the exception of a few notables like Sen. John Edwards) who have barely spoken out about Katrina, which is ironic given it's importance to the Democratic Party's gains in the last Congressional elections.

So this blog is dedicated to Katrina, and those it affected. A few media outlets have done some good work keeping up with the aftermath and legacy of the disaster. They vary from Amy Goodman's Democracy Now! to The Nation to New Orleans own Times-Picayune. The good folks at Truthout (I'll send you guys a donation soon--promise!) have compiled many of these stories together on a Katrina page. I offer one of them. The link to the main site is below.

The Lower Ninth Battles Back
By Rebecca Solnit
The Nation

10 September 2007 Issue

The word "will" comes up constantly in the Lower Ninth Ward now; We Will Rebuild is spray-painted onto empty houses; "it will happen," one organizer told me. Will itself may achieve the ambitious objective of bringing this destroyed neighborhood back to life, and for many New Orleanians a ferocious determination seems the only alternative to being overwhelmed and becalmed. But the fate of the neighborhood is still up in the air, from the question of whether enough people can and will make it back to the nagging questions of how viable a city and an ecology they will be part of.

full article:

http://www.thenation.com/doc/20070910/solnit

Truthout.org Katrina Aftermath page: http://www.truthout.org/KatrinaAftermath.shtml

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