AlterNet.org: Investigations

Everything You Heard About the Deficit Falling Is Wrong

Nomi Prins, AlterNet — Thu, 23 May 2013 11:38:00 -0700

Most of the media bought the notion that somehow the deficit had magically halved. Let's look at the math.

If it’s too good to be true, it probably isn’t. Especially if it involves math, the Treasury Department, and two disparate political camps championing two different economic doctrines that came of age decades ago.

So went the telling of the deficit story last week. Most of the media bought the notion that somehow the deficit had magically halved to $682 billion from around $1.1 trillion last year, based on not even examining the Treasury Department's own reports before promoting that gleeful and surreal conclusion.

When the Congressional Budget Office (CBO) announced that the deficit underwent some kind of Fastest Loser diet, Keynesian types were thrilled that their philosophy was validated. The magic number proved that government fiscal stimulus will ultimately boost the economy. (Leave aside that John Maynard Keynes was actually an asset manager and successful speculator.) Thus, budgetary cuts are not necessary.

Where there is truth to this (austerity never helped anyone but those not affected by it), ignoring the fact that certain federal fiscal stimulus plans were used as reasons to increase overall debt in the form of treasury securities that banks use as reserve to buoy the banking system—and thus the stock market—and not the general economy, does economics and more importantly, the country, a disservice.

On the other hand, the free-market types also considered this a triumph of their philosophy. By not overly regulating the market (score another one for watering down the already tepid Frank-Dodd Act), the economy is marching back to normal.

Again, this does their notion a disservice because a true free-marketer would be against the Federal Reserve propping up the treasury (and thus debt) market by buying lots of treasuries, and allowing banks to park more treasuries on their books to the tune of $1.5 trillion worth) and toxic assets (in the form of buying $85 billion of them from banks who had them rotting on their books allowing banks to free up space to speculate in other ways).

Those debates, in all their generalities, will continue on. Meanwhile, there’s the matter of what sparked the latest phase of debates over big vs. small (rather than Wall Street-coddling vs. population-stimulating). -the deficit figure, that number that measures what the government takes in vs. what it spends, and what it shows, is that neither bank stimulus nor populace stimulus has changed very much in the past three years.

First, a hat tip to Karl Denninger at Market Ticker for boldly going where much of the media seemed too complacent or clueless to go. According to Denninger, since September 28, 2012, “there has been a net $762.6 billion of new debt added to the federal balance sheet, not the $488 billion the Treasury Department claims.” In addition, Social Security and Medicare are almost $90 billion in the hole this year already.

He writes that Treasury’s own cash statement indicates that, “At the current run rate over the four calendar months … the deficit on a cash basis this year is $1.188 trillion” compared to $1.210 trillion last year, which is about the same. If you include figures through the end of April, that same run rate produced a deficit of about $1.307 trillion.

I was truly puzzled by the new figure and more so by how much of the media and various Krugmanites tend to lump all fiscal stimulus into a population helping category, without noting that certain forms help the banking system more than the population. To be sure, stimuli like extended unemployment programs help families make ends meet while seeking better opportunities, but programs like HAMP barely make a dent in peoples’ foreclosure-related problems, while enabling banks to benefit from more aggregate support.

What seemed odder is that the deficit has always been reported as the total of those debts/expenditures relative to revenues, and simple logic says that those debts/expenditures haven't dropped, and revenues haven't increased by what is reported near a $500 billion shift....

One is tempted (if one cared to probe for a nanosecond) to ask what the Treasury Department didn’t include, but its math doesn't work even if it didn't exclude anything. Take its own report, the Monthly Treasury Statement which compiles activity from the start of the current fiscal year (October 2012) through April 2013.

A very cursory look at this report clearly reveals some items that don’t actively support the report’s optimistic subtitle.

Take Table 1. The numbers show that there have been $1.603 trillion in budget receipts so far for fiscal year 2013 vs. $2.090 trillion in outlays. This indeed produces a value for a current deficit (outlays minus receipts) of -$487 billion.

The same table also shows there were $1.383 trillion in receipts for the same period in 2012 and $2.1 trillion (about the same as this year) in outlays. Combining those figures, we do get a comparative deficit this time last year of -$719 billion. Okay, so far, it's on point with the headline's cheer.

However, just below Table 1 comes some small print. The Treasury Department appears to have changed some accounting methods. The small print reads: "The deficit figure differs by $2.23 billion due mainly to revisions in the data following the release of the Final Monthly Treasury Statement." There’s no clarity about how those revisions changed numbers, and the changes are small in the scheme of things, so let’s raise an eyebrow and move on for now—to the good part.

Even if we pretend those changes don’t matter and even if the rest of this year's receipts come in 16 percent greater than they did last year (which on average is what this table is indicating so far), we'd still get a total of $1.603 trillion receipts plus an expected $1.234 trillion. That equals $2.614 trillion in total receipts for 2013. Remember that number for a moment.

Now, consider that even if the rest of this year's expenditures remain flat to last year's (like the first part of the year indicated), there would be $3.5 trillion in outlays for 2013. If we subtract that $3.5 trillion in outlays from $2.614 trillion in receipts, we get a total deficit of approximately $886 billion; certainly not the $642 billion the CBO recently announced.

But there’s more. There’s Table 2.

According to Table 2, those expenditures actually won't be flat, instead they will be higher, by about $184 billion, to reach $3.684 trillion.

Subtracting $3.684 trillion from $2.614 trillion, we get a total expected deficit of approximately $1.069 trillion—or about the same as it has been over the last couple of years—and again not the $642 billion that the media spread, and that Krugmanites consider reflective of fiscal stimulus working for the overall economy.

There’s a danger in working with numbers. They can be massaged and bent and faked and shrouded with suppositions. But, that’s not the case here. This is a case of simple addition and subtraction using Treasury’s own report. Doing so reveals a discrepancy between the recent headline deficit number and the one in the report. The issue here isn’t whether government stimulus works or not (nor how it was designed and who it really helps most beneath associated political rhetoric), but about why people can be so eager to be right about the nature of the forest, they ignore the fact that they are running smack into a tree right in front of them. Let’s at least agree about the tree, and move on from there.

I Thought Solitary Confinement in Iran Was Bad -- Then I Went Inside America's Prisons

Shane Bauer, Mother Jones — Sat, 04 May 2013 10:45:00 -0700

We throw thousands of people in prison for the books they read, the company they keep, the beliefs they hold. Here's why.

Shane Bauer was one of the three American hikers imprisoned in Iran after being apprehended on the Iraqi border in 2009. He spent 26 months in Tehran's Evin Prison, 4 of them in solitary. Bauer is winner of the2013 Hillman Prize for Magazine Journalism for the article below, his special investigation into solitary confinement. The winning feature was published in Mother Jones and supported by the Investigative Fund of the Nation Institute.

IT'S BEEN SEVEN MONTHS since I've been inside a prison cell. Now I'm back, sort of. The experience is eerily like my dreams, where I am a prisoner in another man's cell. Like the cell I go back to in my sleep, this one is built for solitary confinement. I'm taking intermittent, heaving breaths, like I can't get enough air. This still happens to me from time to time, especially in tight spaces. At a little over 11 by 7 feet, this cell is smaller than any I've ever inhabited. You can't pace in it.

Like in my dreams, I case the space for the means of staying sane. Is there a TV to watch, a book to read, a round object to toss? The pathetic artifacts of this inmate's life remind me of objects that were once everything to me: a stack of books, a handmade chessboard, a few scattered pieces of artwork taped to the concrete, a family photo, large manila envelopes full of letters. I know that these things are his world.

"So when you're in Iran and in solitary confinement," asks my guide, Lieutenant Chris Acosta, "was it different?" His tone makes clear that he believes an Iranian prison to be a bad place.

He's right about that. After being apprehended on the Iran-Iraq border, Sarah Shourd, Josh Fattal, and I were held in Evin Prison's isolation ward for political prisoners. Sarah remained there for 13 months, Josh and I for 26 months. We were held incommunicado. We never knew when, or if, we would get out. We didn't go to trial for two years. When we did we had no way to speak to a lawyer and no means of contesting the charges against us, which included espionage. The alleged evidence the court held was "confidential."

What I want to tell Acosta is that no part of my experience—not the uncertainty of when I would be free again, not the tortured screams of other prisoners—was worse than the four months I spent in solitary confinement. What would he say if I told him I needed human contact so badly that I woke every morning hoping to be interrogated? Would he believe that I once yearned to be sat down in a padded, soundproof room, blindfolded, and questioned, just so I could talk to somebody?

I want to answer his question—of course my experience was different from those of the men at California's Pelican Bay State Prison—but I'm not sure how to do it. How do you compare, when the difference between one person's stability and another's insanity is found in tiny details? Do I point out that I had a mattress, and they have thin pieces of foam; that the concrete open-air cell I exercised in was twice the size of the "dog run" at Pelican Bay, which is about 16 by 25 feet; that I got 15 minutes of phone calls in 26 months, and they get none; that I couldn't write letters, but they can; that we could only talk to nearby prisoners in secret, but they can shout to each other without being punished; that unlike where I was imprisoned, whoever lives here has to shit at the front of his cell, in view of the guards?

"There was a window," I say. I don't quite know how to tell him what I mean by that answer. "Just having that light come in, seeing the light move across the cell, seeing what time of day it was—" Without those windows, I wouldn't have had the sound of ravens, the rare breezes, or the drops of rain that I let wash over my face some nights. My world would have been utterly restricted to my concrete box, to watching the miniature ocean waves I made by sloshing water back and forth in a bottle; to marveling at ants; to calculating the mean, median, and mode of the tick marks on the wall; to talking to myself without realizing it. For hours, days, I fixated on the patch of sunlight cast against my wall through those barred and grated windows. When, after five weeks, my knees buckled and I fell to the ground utterly broken, sobbing and rocking to the beat of my heart, it was the patch of sunlight that brought me back. Its slow creeping against the wall reminded me that the world did in fact turn and that time was something other than the stagnant pool my life was draining into.

Here, there are no windows.

Acosta, Pelican Bay's public information officer, is giving me a tour of the Security Housing Unit. Inmates deemed a threat to the security of any of California's 33 prisons are shipped to one of the state's five SHUs (pronounced "shoes"), which hold nearly 4,000 people in long-term isolation. In the Pelican Bay SHU, 94 percent of prisoners are celled alone; overcrowding has forced the prison to double up the rest. Statewide, about 32 percent of SHU cells—hardly large enough for one person—are crammed with two inmates.

The cell I am standing in is one of eight in a "pod," a large concrete room with cells along one side and only one exit, which leads to the guards' control room. A guard watches over us, rifle in hand, through a set of bars in the wall. He can easily shoot into any one of six pods around him. He communicates with prisoners through speakers and opens their steel grated cell doors via remote. That is how they are let out to the dog run, where they exercise for an hour a day, alone. They don't leave the cell to eat. If they ever leave the pod, they have to strip naked, pass their hands through a food slot to be handcuffed, then wait for the door to open and be bellycuffed.

I've been corresponding with at least 20 inmates in SHUs around California as part of an investigation into why and how people end up here. While at Pelican Bay, I'm not allowed to see or speak to any of them. Since 1996, California law has given prison authorities full control of which inmates journalists can interview. The only one I'm permitted to speak to isthe same person the New York Times was allowed to interview months before. He is getting out of the SHU because he informed on other prisoners. In fact, this SHU pod—the only one I am allowed to see—is populated entirely by prison informants. I ask repeatedly why I'm not allowed to visit another pod or speak to other SHU inmates. Eventually, Acosta snaps: "You're just not."

IF I COULD, I WOULD MEET WITH Dietrich Pennington, a 59-year-old Army veteran from Oakland who has served 20 years of a life sentence for robbery, kidnapping, and attempted murder. Pennington has lived alone in one of these cells for more than four years. During that time, he hasn't spoken to his family. He has never met any of his seven grandchildren. In the SHU, he's seen "some of the strongest men I know fall apart."

But the fact that Pennington is in solitary is not what is remarkable about his story. More than 80,000 people were in solitary confinement in the United States in 2005, the last time the federal government released such data. In California alone, at least 11,730 people are housed in some form of isolation. What is unique about Pennington—if being one of thousands can be considered unique—is that he doesn't know when, or if, he will get out of the SHU. Like at least 3,808 others in California, he is serving an indeterminate sentence.

Compared to most SHU inmates, Pennington is a newbie. Prisoners spend an average of 7.5 years in the Pelican Bay SHU, the only one for which the California Department of Corrections and Rehabilitation (CDCR) has statistics. More than half of the 1,126 prisoners here have been in isolation for at least five years. Eighty-nine have been there for at least 20 years. One has been in solitary for 42 years.

Like many of the others, Pennington has never been charged with any serious prison offenses, like fighting or selling drugs. In 20 years of incarceration, his only strikes have been two rule violations: delaying roll call and refusing to be housed in a dorm-style cell with at least seven other prisoners. While in prison, he became a certified welder, receiving a special commendation for his work on building a rollover crash simulator for the California Highway Patrol. He used to regularly attend religious services and self-help groups, including parenting classes, Alcoholics Anonymous, and Narcotics Anonymous, all of which are forbidden in the SHU.

Pennington's lawyer, Charles Carbone, says his "impeccable prison record" should have him on track for parole. But there is no chance of that—four years ago Pennington was "validated" by prison staff as an associate of a prison gang (one formed on the inside, as opposed to a street gang). That's the reason he and thousands of others are in the SHU with no exit date.

Pennington is not accused of giving or carrying out orders on behalf of any gang. In fact, there is no evidence that he's ever communicated with a member of a gang in his entire life. "I've never been, never want to be a part of no gang," he wrote me. (He is currently trying to challenge his validation in court.)

To validate an inmate as a gang member, the state requires at least three pieces of evidence, which must be "indicative of actual membership" or association with a prison gang in the last six years. At least one item must show a "direct link," like a note or other communication, to a validated gang member or associate. Once the prison's gang investigator has gathered this evidence, it is reviewed in an administrative hearing and then sent to CDCR headquarters in Sacramento.

In Pennington's file, the "direct link" is his possession of an article published in the San Francisco Bay View, an African American newspaper with a circulation of around 15,000. The paper is approved for distribution in California prisons, and Pennington's right to receive it is protected under state law. In the op-ed style article he had in his cell, titled "Guards confiscate 'revolutionary' materials at Pelican Bay," a validated member of the Black Guerilla Family prison gang complains about the seizure of literature and pictures from his cell and accuses the prison of pursuing "racist policy." In Pennington's validation documents, the gang investigator contends that, by naming the confiscated materials, the author "communicates to associates of the BGF…as to which material needs to be studied." No one alleges that Pennington ever attempted to contact the author. It is enough that he possessed the article.

The second piece of evidence was a cup Pennington had in his cell bearing a picture of a dragon, an image CDCR considers an "identifying symbol" of the Black Guerilla Family. The third was a notebook he kept, which the gang investigator alleges "shows his beliefs in the ideals of the BGF." Its pages are filled with references to black history—Nat Turner, theScottsboro 9, the number of blacks executed between 1930 and 1969, and quotes from figures like W.E.B. Du Bois and Malcolm X. There are also passages in which Pennington ruminates at length on what he calls "the oppression and violence inflicted upon us here in maximum security," referencing a Time exposé.

Pennington never mentions gangs or unlawful activity in his writing. But in his validation documents, the gang investigator points out that the notebook contains quotes by Fleeta Drumgo and George Jackson, two former Black Panthers who are revered by members of the BGF and politicized African American prisoners generally. The single Jackson quote Pennington wrote down reads, "The text books on criminology like to advance the idea that the prisoners are mentally defective. There is only the merest suggestion that the system itself is at fault."

California officials frequently cite possession of black literature, left-wing materials, andwriting about prisoner rights as evidence of gang affiliation. In the dozens of cases I reviewed, gang investigators have used the term "[BGF] training material" to refer to publications by California Prison Focus, a group that advocates the abolition of the SHUs; Jackson's once best-selling Soledad Brother; a pamphlet said to reference "Revolutionary Black Nationalism, The Black Internationalist Party, Marx, and Lenin"; and a pamphlet titled "The Black People's Prison Survival Guide." This last one advises inmates to read books, keep a dictionary handy, practice yoga, avoid watching too much television, and stay away from "leaders of gangs."

The list goes on. Other materials considered evidence of gang involvement have included writings by Mumia Abu-Jamal; The Black Panther Party: Reconsidered, a collection of academic essays by University of Cincinnati professor Charles Jones; pictures of Assata Shakur, Malcolm X, George Jackson, and Nat Turner; and virtually anything using the term "New Afrikan." At least one validation besides Pennington's referenced handwritten pages of "Afro centric ideology."

As warden of San Quentin Prison in the 1980s, Daniel Vasquez oversaw what was then the country's largest SHU. He's now a corrections consultant and has testified on behalf of inmates seeking to reverse their validations. As we sat in his suburban Bay Area home, he told me it is "very common" for African American prisoners who display leadership qualities or radical political views to end up in the SHU. Similarly, he recalls, "we were told that when an African American inmate identified as being Muslim, we were supposed to watch them carefully and get their names."

Vasquez testified in federal court in the case of a former inmate, Ernesto Lira, who was gangvalidated in part based on a drawing that included an image of the huelga bird, the symbol of the United Farm Workers. While the image has been co-opted by the Nuestra Familia prison gang, Vasquez testified that it is "a popular symbol widely used in Hispanic culture and by California farmworkers." Lira's validation was one of a handful to ever be reversed in federal court—though not until after he was released on parole, having spent eight years in the SHU. And though the court ruled that the huelga bird is of "obscure and ambiguous meaning," it continues to be used as validation evidence.

Gang evidence comes in countless forms. Possession of Machiavelli's The Prince, Robert Greene's The 48 Laws of Power, or Sun Tzu's The Art of War has been invoked as evidence. One inmate's validation includes a Christmas card with stars drawn on it—alleged gang symbols—among Hershey's Kisses and a candy cane. Another included a poetry booklet the inmate had coauthored with a validated BGF member. One poem reflected on what it was like to feel human touch after 14 years and another warned against spreading HIV. The only reference to violence was the line, "this senseless dying gotta end."

"Direct links" that appear in inmates' case files are often things they have no control over, like having their names found in the cells of validated gang members or associates or having a validated gang affiliate send them a letter, even if they never received it or knew of its existence. Appearing in a group picture with one validated gang associate counts as a direct link, even if that person wasn't validated at the time.

In the course of my investigation, I obtained CDCR's confidential validation manual. It teaches investigators that use of the words tío or hermano, Spanish for uncle and brother, can indicate gang activity, as can señor. Validation files on Latino inmates have included drawings of the ancient Aztec jaguar knight and Aztec war shields, and anything in the indigenous Nahuatl language, spoken by an estimated 1.4 million people in central Mexico.

Some SHU inmates, aside from the "bona fide gang members," are those "the guards don't like," says Carbone, Pennington's lawyer. "They get annihilated with gang validations in order to get them off the main lines…The rules are so flimsy that if the department wants somebody validated, he will get validated."

California is just one of many states where inmates can be thrown into solitary confinement on sketchy grounds—though just how many is hard to know. A survey conducted by Mother Jones found that most states had some kind of gang validation process, but implementation varied widely, and a number of states would not disclose their policies at all. Seventeen states said they don't house inmates in "single-celled segregation" indeterminately. (No state officially uses the term "solitary.")

It's unclear how many states keep inmates in solitary as long as California does. Texas has 4,748 validated affiliates of "security threat groups" in indefinite solitary—more than California's prison gang affiliates—and some have been there for more than 20 years. Louisiana has held two Black Panthers in solitary for 40 years. Minnesota is near the opposite end of the spectrum, holding inmates in segregation for an average term of 29 days. At least 12 states review an inmate's segregation status every 30 days or less; Massachusetts does it weekly.

Keeping all these inmates segregated is an expensive proposition for taxpayers. Pelican Bay spends at least 20 percent more to keep an inmate in isolation—an extra $12,317 per inmate per year, or $14 million annually.

AT PELICAN BAY, DECISIONS about who gets put in the hole indefinitely come down to one man: Institutional Gang Investigator David Barneburg. A stocky man with a shaved head and a seven-point star on the breast of his khaki uniform, Barneburg comes from a lineage of loggers who found themselves out of work when the timber industry busted. When Pelican Bay opened its doors amidst the majestic redwoods in 1989, his father signed up.

Pelican Bay was a new kind of prison—one of the nation's first full-fledged supermaxes, built with the explicit purpose of housing inmates in long-term isolation. After Pelican Bay, supermaxes popped up across the country, in part to deal with rising violence in increasingly crowded prisons. Today, there are roughly 60 nationwide.

Barneburg started here in 1997, and after 15 years on the job, he comes off as a man under duress. He makes a point of assuring me that he and his gang investigations team of 10 are not "knuckle-dragging thugs." He tells me he has to regularly take the stand in court to defend gang validations. To date, prisoners have sued him at least 30 times, though I could find no record of any having succeeded. "I don't want to go as far as saying gang investigators are persecuted, but…"

He is giving me a PowerPoint presentation detailing the structures and operations of the seven prison gangs targeted by the department of corrections. The Nazi Low Riders. The Aryan Brotherhood. The Texas Syndicate. The Black Guerilla Family. The Mexican Mafia. The Nuestra Familia. The Northern Structure. "It's about power," he says. "It's about control. It's about extortion. It's about money. It's about dope. It's about murder." Membership in a gang is not illegal in the United States—it's a right protected by the First Amendment—but Barneburg says segregating gang members is the only way to keep prisons from being overrun by racial strife, stabbings, and killings.

When I ask him how well that's worked, he stutters and says diffidently, "I think there's been less violence."

He's wrong. The rate of violent incidents in California prisons is nearly 20 percent higher than when Pelican Bay opened in 1989. As I walk with Lieutenant Acosta alongside the general population yard—a grassy, if bleak, fenced-in area where, unlike in the SHU, prisoners are allowed to interact—he unwittingly contradicts Barneburg's claim too, saying that violence in Pelican Bay has seen dramatic spikes over the years. In the 1990s, he says, "you didn't see the big fights, all the riots. It was like one, two guys fighting, maybe three guys." But since then, prison gang violence has escalated dramatically, with riots involving upwards of 200 people.

Prison violence fluctuates for myriad reasons, among them overcrowding, gang politics, and prison conditions. It's impossible to say for certain what role SHUs play; what is clear is that in states that have reduced solitary confinement—Colorado, Maine, and Mississippi—violence has not increased. (Illinois plans to close its notorious Tamms supermax soon.) Since Mississippi State Penitentiary at Parchman released 75 percent of inmates from solitary in the mid-2000s, violence has dropped 50 percent.

CDCR officials claim California is different because the gang problem is worse here, though they don't have data to confirm this. Barneburg says without SHUs, there would be no way to prevent gang leaders from giving orders to the general population. What he doesn't say is that very few SHU inmates are considered gang leaders even by CDCR's standards. Only 22 percent of those serving indeterminate SHU terms are validated even as members of prison gangs. The rest, like Dietrich Pennington, are classified as associates, people who are accused of having had some connection with members—or other associates—of prison gangs.

Former San Quentin Warden Daniel Vasquez says association with prison gangs—for protection, among other things—is "pretty inescapable" in the hostile and racially segregated atmosphere inside. "You're going to come across them in some form or fashion," he says. "You are going to start experiencing the pressures of these gangs." Barneburg himself acknowledges it is hard for a Mexican from Southern California, for example, to keep away from the Mexican Mafia, since the gang sees itself as the authority over any Mexican prisoner from the lower part of the state. A full 2,201 people currently serving indeterminate SHU terms are validated as associates of that gang; there are only 98 validated members.

Being associated with a prison gang—even if you haven't done anything illegal—carries a much heavier penalty than, say, stabbing someone. Association could land you in solitary for decades. An inmate who murders a guard—the severest crime in prison—can get no more than five years in the SHU.

THE DECISION TO PUT A MAN in solitary indefinitely is made at internal hearings that last, prisoners say, about 20 minutes. They are closed-door affairs. CDCR told me I couldn't witness one. No one can.

When Josh Fattal and I finally came before the Revolutionary Court in Iran, we had a lawyer present, but weren't allowed to speak to him. In California, an inmate facing the worst punishment our penal system has to offer short of death can't even have a lawyer in the room. He can't gather or present evidence in his defense. He can't call witnesses. Much of the evidence—anything provided by informants—is confidential and thus impossible to refute. That's what Judge Salavati told us after our prosecutor spun his yarn about our role in a vast American-Israeli conspiracy: There were heaps of evidence, but neither we nor our lawyer were allowed to see it.

None of the gang validation proceedings, from the initial investigation to the final sentencing, have any judicial oversight. They are all internal. Other than the inmate, there is only one person present—the gang investigator—and he serves as judge, jury, and prosecutor. After the hearing, the investigator will send his validation package to Sacramento for approval. The chances of it being refused are vanishingly small: The department's own data shows that of the 6,300 validations submitted since 2009, only 25 have been rejected—0.4 percent. "It's pretty much a rubber stamping," Vasquez says.

"That is a system that has no place in a constitutional democracy," says David Fathi, director of the American Civil Liberties Union's National Prison Project. He says California's policy is "a form of guilt by association that is completely foreign to our legal system. Prison administrators have absolute power, and that is a recipe for abuse and violation of rights."

CDCR officials are quick to point out that inmates can challenge their gang status: They can appeal to the gang investigator, the warden, and, as a last resort, the departmental appeals office in Sacramento. But former Pelican Bay Warden Joseph McGrath testified in court that "officers do not reevaluate the evidence" and that, if an appeal came to him, he would "assume the truth of whatever was written" in the validation documents. When I asked CDCR for an example of an appeal resulting in a reversal of a gang validation, they couldn't produce a single case. Gang investigator Barneburg, who has worked at Pelican Bay for 15 years, has never seen a validation appeal succeed either—evidence, he says, of his team's thoroughness. "We put out really quality work," he says.

If an inmate exhausts his administrative appeals, he has the legal right to take his case to court. Most can't afford a lawyer, so they end up representing themselves. Attorney Charles Carbone, who has challenged more than 200 gang validations (of which he says about 25 have been successful), says inmates who represent themselves succeed "less than 1 percent" of the time. The biggest obstacle is the "some evidence" standard, which essentially means that CDCR only has to provide a bare minimum of proof. The courts do not weigh the evidence or decide whether or not a prisoner is in a gang. The judge's job is only to "see whether any evidence exists," Carbone says. "And if it does, he won't evaluate it. He'll leave that to the prison authorities."

HOW DOES SOMEONE GET OUT of the SHU, then? Officially, there are two ways. One is to be declared an "inactive" gang member or associate, which doesn't happen very often. Just a few dozen inmates are released to the general population every year via that process—less than 1 percent of those serving indeterminate SHU terms. The earliest chance of being classified as "inactive" is six years from the latest evidenced gang activity. Then, if a gang investigator provides a single piece of new evidence—say a book found in the cell or a tidbit from a confidential informant—the inmate has to wait six more years.

The other way out is to debrief—to divulge everything an inmate knows about a gang, including names of members and associates. This he can do at any time. An average of 108 do it every year, even though among prisoners snitching can carry the death penalty.

And what if a prisoner in the SHU doesn't know anything? As former Pelican Bay Warden McGrath testified in court three years ago, anyone mistakenly validated "cannot debrief," because they have nothing to give. Catch-22.

In Pelican Bay's Transitional Programming Unit—the place where inmates go once they've been released from the SHU—I sit at a metal table with Paul Bocanegra, a burly, tattooed former prison gang member. He spent 12 years in isolation before he debriefed. Now, he is housed among other debriefers and will probably never go back to the general population. Assault or murder, he says, is "usually what happens once you turn your back on your buddies—people you used to run with. That's always in the back of your head. What's gonna happen if one day I get out, you know?"

CDCR claims that indeterminate SHU sentences are not meant to be punitive but are simply intended to isolate dangerous prisoners. That's also the argument the department uses to refute challenges like the class action lawsuit under way by the Center for Constitutional Rights on behalf of Pelican Bay prisoners who have spent between 10 and 28 years in solitary. The suit claims that prolonged SHU confinement is cruel and unusual punishment.

Is it not? In the SHU, no work, drug treatment programs, or religious services are permitted. SHU prisoners are not allowed phone calls (except in approved emergencies) or contact visits. Clocks, photo albums, food condiments containing sugar (like ketchup), playing cards, and chessboards are all banned. Only after a nearly three-week-long hunger strike last year were SHU inmates allowed calendars, as well as handballs to use in the concrete dog run. Their monthly canteen draw is a quarter of the regular population's allowance, as is the one 30-pound package they can receive per year. Pelican Bay Warden Greg Lewis insists this, too, isn't to punish them, but to provide "a very safe environment."

When I ask Bocanegra if the SHU is punishment, he laughs. "It's meant to break a person," he says. "You have to accept whether you want to die back there or you want to change." Leaving the SHU for a unit where he can exit his cell without cuffs and go to an outdoor exercise yard with a small group of other people, he says, made him "feel like you're free." When he walked out of the SHU, he saw his first tree in 12 years.

EVERY DAY, I COME HOME to a new stack of letters from prisoners—our hostage story, it seems, is best known inside America's penitentiaries. For a while, I try to respond to each one, but as the weeks and months pass, they start to pile up. I become afraid of them and all the sorrow they contain. They take me back to my own time in solitary—and how can I go back there every day?

One morning, I sit down at my desk and look at the stack of envelopes slowly taking it over. I need to write these people back. I know what it's like to wait for word from the outside. Some of them remind me of myself while I was locked up, their whole lives bent on staying sane. They write. They read. They exercise. They meditate. Others make me think of what I would have eventually become. Their letters don't make sense. They write me constantly, desperately. They are broken.

Instead of digging into the pile, I place a stack of 18 postcards in front of me and write on each of them a question that has been on my mind since I left Pelican Bay: "Do you think prolonged SHU confinement is torture?" I send them to prisoners across the state and 14 write back, all with the same answer: "yes." One tells me he has developed a condition in which he bites down on his back teeth so hard he has loosened them. They write: "I am filled with the sensation of drowning each and every day." "I was housed next door to…guys who have eaten and drank their own body waste and who have thrown their own body waste in the cells that I and others were housed in. I cry."

There are plenty of studies about the psychosis-like symptoms that result from prolonged solitary. Indicators of what psychiatrist Stuart Grassian calls "SHU syndrome" include confusion and hallucination, overwhelming anxiety, the emergence of primitive aggressive fantasies, persecutory ideation, and sudden violent outbursts.

As I read the medical literature, I remember the violent fantasies that sometimes seized my mind so fully that not even meditation—with which I luckily had a modicum of experience before I was jailed—would chase them away. Was the uncontrollable banging on my cell door, the pounding of my fists into my mattress, just a common symptom of isolation? I wonder what happens when someone with a history of violence is seized by such uncontrollable rage. A 2003 study of inmates at the Pelican Bay SHU by University of California-Santa Cruz psychology professor Craig Haney found that 88 percent of the SHU population experiences irrational anger, nearly 30 times more than the US population at large.

Haney says there hasn't been a single study of involuntary solitary confinement that didn't show negative psychiatric symptoms after 10 days. He found that a full 41 percent of SHU inmates reported hallucinations. Twenty-seven percent have suicidal thoughts. CDCR's own data shows that, from 2007 to 2010, inmates in isolation killed themselves at eight times the rate of the general prison population.

In the SHU, people diagnosed with mental illnesses like depression—which afflicts, according to Haney, 77 percent of SHU inmates—only see a psychologist once every 30 days. Anyone whose mental illness qualifies as "serious" (the criterion for which is "possible breaks with reality," according to Pelican Bay's chief of mental health, Dr. Tim McCarthy) must be removed from the SHU. When they are, they get sent to a special psychiatric unit—where they are locked up in solitary. Some 364 prisoners are there today.

Is long-term SHU confinement torture? The ACLU says yes. Physicians for Human Rights agree. The Center for Human Rights and Constitutional Law and several other prisoner rights groups recently filed a petition with the United Nations claiming just that. Human Rights Watch says at the very least, it constitutes cruel, inhuman, and degrading treatment, which is prohibited by international law.

UN Special Rapporteur on Torture Manfred Nowak once sent a letter to Tehran to appeal on behalf of my fellow hostage, and now wife, Sarah Shourd. Though Josh and I were celled together after four months, Sarah remained in isolation, seeing us for only an hour a day. Late last year, Nowak's successor, Juan Mendez, came out with a report in which he called for an international prohibition on solitary confinement of more than 15 days. He defined solitary as any regime where a person is held in isolation for at least 22 hours a day. Anything more "constitutes torture or cruel, inhuman or degrading treatment or punishment, depending on the circumstances." When I called Mendez to ask about the SHU, he said, "I don't think any argument, including gang membership, can justify a very long-term measure that is inflicting pain and suffering that is prohibited by the Convention Against Torture."

CDCR, like correctional departments around the country, does not consider the SHU solitary confinement. Inmates have TV, and they have contact with staff when they bring them their food, officials told me. Our interrogators in Iran said the same thing.

JOSH AND I USED TO MAKE up stories about other prisoners who walked past our cell, blindfolded, on their way to the bathroom. In our imaginations, the man who looked to be in his mid-30s with a smooth head and a slim build was the lead singer in an alternative rock band. His anguish was fueled by the fact that the government deemed his music subversive, when all he wanted was to play his guitar. The grizzled old man was a playwright. The guy with the long beard was an imam. The clean-cut twentysomething was an internet hacker.

Lately, it's like I've been doing the opposite—shaping living, breathing people out of snatches of information. Vincent Bruce has written me more than 20 times, and I've read through hundreds of pages of his court and prison files. From this, I can tell you that the 50-year-old has spent nine and a half years in isolation—seven of them alone in the SHU—but I can't tell you whether it shows in his stride like I could with the guys who walked past my cell. I can tell you that when he was 26, he busted out of jail in Chicago, that The Decline and Fall of the Roman Empire is one of his favorite books, and that he loves Phil Collins' "In the Air Tonight."

I can tell you that he is one of California's most effective jailhouse lawyers. This is how his days pass: At six o'clock every morning, he wakes up, washes his face, and scrubs the floor of his cell. He does half an hour of yoga and meditation. From noon until dinnertime, he sits hunched over on his bed and pores over whatever legal case he is working on. Sometimes he gets diverted and watches court shows. It's one of his weaknesses.

When Bruce was a kid, he says, his mom had nervous breakdowns when she would turn into a zombie that he had to feed and bathe. Her boyfriend's solution was to "slap her out of it." At 13 or 14 he started running with the Crips. Since then, he has spent a total of about one year on the outside. At 23, he was convicted of three counts of first-degree murder, two counts of attempted murder, and two counts of first-degree robbery, and sentenced to life without parole.

Several years into his incarceration, he started to organize other prisoners. In the 1990s at Salinas Valley State Prison, he crossed the intense racial divide of prison and organized 74 black, white, and Latino prisoners to pressure the administration into providing family visitation, religious services, and better food.

In 1998, Bruce was put in administrative segregation for allegedly assaulting another inmate. Ad-seg, as it is commonly known, is a solitary unit in each prison where inmates are often placed for disciplinary infractions. Some 6,700 California prisoners are in such units.

Bruce's ad-seg term was supposed to last 90 days. While there, he started pushing for improvements—allowing ad-seg inmates access to the exercise yard, reading and writing materials, the law library, and adequate bedding and clothing. Shortly afterward, he was told he wouldn't be getting out of isolation: He was under investigation for gang affiliation. (His time in the Crips, which he says ended years ago, was irrelevant here—indeterminate SHU terms are only given for connections with prison gangs.)

This had happened before, but investigators had determined the evidence "insufficient." This time—using the same evidence—Bruce was validated and transferred to the Pelican Bay SHU. He denies ever affiliating with a prison gang.

Bruce would later write in a legal complaint that the gang investigator told him the goal was to "make an example out of him" because he was acting as a "spokesperson for other prisoners' grievances." It would be nearly three years before he had direct contact with another human being.

In 1999, Bruce sued the department of corrections, claiming he had been put in the hole for being a jailhouse lawyer. Thanks to his legal pestering, the court eventually appointed him an attorney. The case dragged on for seven years. Meanwhile, he was released from the SHU as an "inactive" gang associate and transferred to another prison, where he continued his advocacy, winning at least 25 concessions over a period of six years, including wheelchair-accessible tables for the yard. At one point he initiated a hunger strike that involved 120 inmates. Two days later, he was put in ad-seg for "conspiracy to assault staff." The claim was based on confidential information that the person in charge of reviewing ad-seg assignments later found did not exist; it couldn't be found anywhere in his file. He spent a year in isolation.

About a year after Bruce was released from ad-seg, CDCR agreed to a settlement in his retaliation suit, paying him $7,500 and guaranteeing him adequate due process in the future. Ten days later, two assistant gang investigators came to Bruce's cell and confiscated his legal materials, a violation of California law. That same day, he was placed in ad-seg for possession of a shiv. Prison officials later acknowledged that the weapon didn't belong to him, but the charge was never dropped, and he was sent to the SHU to serve a 10-month sentence.

The gang investigator meant to keep him there. In yet another gang validation package, he claimed Bruce's retaliation case against CDCR in itself constituted "gang activity." In January 2008, he was validated as an associate of the BGF and his SHU sentence was extended indefinitely. The evidence against him was confidential. He has been in the SHU ever since.

Six months after his indefinite SHU term began, he received a letter from a young man he'd been celled with a few years before. "Although I tried my best not to let you know I was listening to you," the other prisoner wrote, "my ears was always open when you spoke. Vincent you have made me a wise young man, and did something for me I will never forget." Now, he wrote, "The gang banging life is over with."

INFORMATION OBTAINED FROM prisoners in solitary has long been viewed with suspicion. Numerous psychological studies have found that the more people are subject to sensory deprivation, the more suggestible they become. A 1961 US Air Force study titled "The Manipulation of Human Behavior" cast this as a plus, saying, "Solitary confinement and monotonous, barren surroundings play an important role in making the prisoner more receptive and susceptible to the influence of the interrogator." After the public disclosure of the CIA's 1983 "Human Resource Exploitation Training Manual," which taught agents how to extract confessions without leaving bruises, the agency renounced the use of "coercive interrogation techniques," including solitary confinement, in part because they yielded "unreliable results."

In California, much of the information used to validate prisoners comes from the 108 inmates who debrief every year, creating a revolving door where people get out of the SHU by putting others in. Pelican Bay gang investigator David Barneburg insists that all information is double-checked against information provided by other sources. But as long as this information is kept secret from everyone, including lawyers, that vetting is left up to investigators—and there's evidence that they are not immune to the temptation to make things up.

In 2006, a prisoner with a violence-free prison record named Ricky Gray was validated as a member of the Black Guerilla Family and given an indeterminate SHU sentence. But the warden at his prison, who Gray claims was sympathetic to his case, took an unusual step: He instructed a staff assistant to reinterview the informants who had given evidence against him. The assistant concluded that the entire validation package was "comprised of conjecture, second hand expression, assumptions, frivolous statements, incomplete documentation, and blatant lack of thorough investigation." Gray managed to obtain a copy of this confidential report, and his lawyer passed it to me, providing a rare glimpse of the type of evidence used in gang validations.

Several of the alleged informants, the assistant wrote, didn't know Gray at all. Two others—said to have reported that Gray was recruiting inmates to the BGF—signed sworn affidavitsthat they had never been interviewed about the subject and didn't know the guard who compiled their alleged statements. The paperwork that allegedly documented their statements didn't bear their signatures. In another of the interviews used against Gray, the staff assistant says the gang investigator appeared "to be leading" the informant "to answer questions the way he would like."

Like Bruce, Gray believes the gang investigator retaliated against him for his work as a jailhouse lawyer, a role in which he has been particularly successful—his biggest victory was an Eighth Amendment claim against prison guards that won him a $115,000 settlement from CDCR. Indeed, his legal work is specifically referenced in his validation. One piece of evidence pointedly stated that Gray's "use of correspondence for legal purposes is well documented."

The staff assistant's review recommended that Gray be classified as an "inactive" gang member and stated that Gray "does not have a problem following the rules once he is aware of them." But six years later, Gray remains in the SHU. The warden who ordered the review transferred to another prison 37 days after it was completed, and the gang investigator—the same man who presided over Gray's validation in the first place—chose not to change Gray's validation status in response to the investigation. When Gray took the matter to court, the judge ruled that "a prisoner has no constitutionally guaranteed immunity from being falsely or wrongfully accused of conduct which may result in the deprivation of a protected liberty interest." In other words, it is not illegal for prison authorities to lie in order to lock somebody away in solitary.

AT SOME POINT DURING THE disorienting reentry blitz that followed my release in September of last year, I heard that in California, prisoners were doing what the three of us had done in Iran: hunger striking to protest isolation. Up to 12,000 inmates participated in protests against long-term SHU confinement across the state, making it probably the largest prison strike in recent history—twice the size of the one that took place a few months earlier. The prisoners were demanding changes to the gang validation policy and an end to long-term solitary.

Implicit in the two hunger strikes was a message: The use of prolonged solitary confinement was leading to the kind of unrest it was meant to tamp down. Nearly three weeks into the 2011 strike, CDCR promised to make changes to its gang validation policy. Since then, it has been hammering out a set of reforms, aimed primarily at turning the policy into a "behavior-based" one. This would bring California in line with other states that—at least on paper—segregate people only when they engage in violent or dangerous activity.

The new policy, which is already being rolled out on a pilot basis, will also include a "step down" program that would allow inmates to work their way out of the SHU over a four-year period, rather than wait six years before their case is even reviewed. After a year of abstaining from gang activity in the SHU, an inmate will be able to get one phone call per year, a deck of cards, and the ability to spend 11 more dollars at the canteen every month. After three years, he'll be allowed a chessboard, and his family will be able to send him two packages each year rather than one.

Department officials in Sacramento wouldn't talk to me about the new policy—after my visit to Pelican Bay, they declined further interviews, citing pending litigation. But when I talked to CDCR spokeswoman Terry Thornton about the reforms, she said, "I think you are going to see a lot of people classified as associates getting out of the SHU." Under the new policy, associates—unlike members—of prison gangs will only be put in the SHU if they commit a "serious" rule violation or two "administrative" rule violations.

Here's the catch, though: CDCR is vastly expanding what counts as rule violations. Under current regulations, "serious" violations are things like assaults, drug use, and escape attempts. But in the latest version of the reforms,the definition includes possession of "training material" for security threat groups (the new term for gangs), like the books listed earlier. Things that didn't previously count as a rule violation—such as making artwork depicting threat-group symbols, communication showing threat-group behavior, and anything that "depicts affiliation" with a threat group—will all be serious rule violations on par with stabbing somebody. "Administrative rule violations" will now include many new categories, such as possession of photos of validated threat-group affiliates.

Most critically, the new security threat group category doesn't just denote prison gangs, but also includes a much larger number of "disruptive groups." Among these are street gangs, motorcycle gangs, and "revolutionary groups." The list of disruptive organizations that CDCR gave me runs to 1,500, including not only the Bloods and Crips, but also the Juggalos, the dedicated clown-faced following of the dual-platinum horrorcore hip-hop group Insane Clown Posse. The Black Panthers are on the list, as are a couple of Nation of Islam-affiliated groups. One category is titled "Black-Non Specific," suggesting that any group with the word "black" in its name can be considered disruptive. (CDCR would not respond to my questions on this matter.)

Taken together, the policy changes could mean that a Crip taking part in a hunger strike, a Black Panther with a drawing he made of his organization's namesake cat, or an Insane Clown Posse fan with an album cover and a concert photo could receive indeterminate SHU terms.

ONE NIGHT, I STARE AT THE PILE of letters on my desk. I can't let it keep growing, so I take it over to the couch and read through them all. It's painful. A part of me relates to these people, but, like I wanted to tell Lieutenant Acosta when I stood in that cell, there are such huge differences too. They are criminals; I was a hostage. They are spending many years in solitary; I did four months.

But still, I can't escape the fact that their desperate words sound like the ones that ricocheted through my own head when I was inside. When I finish the stack of letters, I dig up the first correspondence I ever received from a prisoner. He has been out of the SHU for years, but through his florid prose, I hear the voice of someone who is still profoundly disturbed by the time he did there.

March 27, 2012
…Like you, I know what it is like to have our very existence internalized to the point of kissing Siren on the lips while she guided us to the rocks of insanity. Then, wondering if we'd ever escape her spell. Fortunately we both did. But as you will learn about you and me, we did not come out unscathed. At times…I mourn the solitude of days gone past. Days where time lost all meaning; to the point where I knew not if I was alive or dead; and where sometimes I did not care either way...
—Steve Castillo

After I read this, I go to the big wicker chest at the foot of our bed. In it are letters written to me by friends, family, and strangers that I never received because the Iranian censors would only let in mail from immediate family. There are hundreds of these; I keep them because I think I might read them some day. But not now. Instead, I grab a little piece of paper that is covered in microscopic writing, the script so small and the shorthand so esoteric that I can hardly read it, even though it was written by my own hand. It is the only piece of my prison journal—written on scraps of paper and hidden in the spines of books—that made it out.

The more one is utterly alone, the more the mind comes to reflect the cell; it becomes blank static…
Solitary confinement is not some sort of cathartic horror of blazing nerves and searing skin and heads smashing blindly into walls and screaming. Those moments come, but they are not the essence of solitary. They are events that penetrate the essence. They are stones tossed into an abyss. They are not the abyss itself…
Solitary confinement is a living death. Death because it is the removal of nearly everything that characterizes humanness, living because within it you are still you. The lights don't turn out as in real death. Time isn't erased as in sleep…

I carefully fold up the note, put it back in the chest, and step out onto our little second-story porch, into the breeze and the sun.

Shane Bauer was one of the three American hikers imprisoned in Iran after being apprehended on the Iraqi border in 2009. He spent 26 months in Tehran's Evin Prison, 4 of them in solitary. He lives in Oakland, California, with his fellow hostage and now wife, Sarah Shourd. Together with the third former hostage, Josh Fattal, they are working on a book about their captivity that is due out in 2014. Follow him on Twitter here.

6 Brave Govt. Whistleblowers Charged Under the Espionage Act by Obama's Administration

John Light, Lauren Feeney, Moyers & Company — Thu, 02 May 2013 15:35:00 -0700

The Espionage Act had only been used three times in its history to try government officials accused of leaking classified information — until the Obama administration came along.

The Obama administration has been carrying out an unprecedented crackdown on whistleblowers, particularly on those who have divulged information that relates to national security. The Espionage Act, enacted during the first World War to punish Americans who aided the enemy, had only been used three times in its history to try government officials accused of leaking classified information — until the Obama administration. Since 2009, the administration has used the act to prosecute six government officials. Meet the whistleblowers.

1. Thomas Drake

Thomas Drake is a former senior executive at the NSA who was charged under the Espionage Act for the unauthorized “willful retention” of classified documents. Drake’s problems with the agency started when he found himself on the minority side of a debate about two new tools for collecting intelligence from digital sources. One program, called Trailblazer, was being built by an outside contractor for $1.2 billion; the other, known as ThinThread, was created in-house by a legendary crypto-mathematician named Bill Binney for about $3 million.

Then, in the wake of the attacks of Sept. 11 2001, the NSA, with the approval of the Bush administration, began the illegal warrantless surveillance of American citizens. This did not sit well with Drake, who says that during his time in the Air Force, where he also did surveillance work, the imperative to protect American’s privacy was drilled into him. “If you accidentally intercepted U.S. persons, there were special procedures to expunge it.”

“I was faced with a crisis of conscience,” Drake told The New Yorker’s Jane Mayer. “What do I do — remain silent, and complicit, or go to the press?” As a father of five, one of whom has serious health problems, Drake concluded that he’d go to the press with his complaints about the NSA — but he’d only share unclassified information, thinking perhaps he’d lose he’s job but at least not end up in jail. So he leaked the story of ThinThread vs. Trailblazer — a simple story of government waste — to the Baltimore Sun. A few months later, the FBI appeared at his door. Drake at one point faced up to 35 years in prison for various charges, most of which were dropped. He eventually pleaded guilty to a misdemeanor for exceeding authorized use of a computer.

2. Stephen Jin-Woo Kim

In 2010, Stephen Jin-Woo Kim, a specialist in nuclear proliferation who worked as a contractor for the State Department, pleaded not guilty to charges of leaking information about North Korea to Fox News. He was indicted by a Federal Grand Jury, but the case has not yet been brought to trial.

Fox journalist James Rosen, with whom Kim had been in touch in the past, reported in 2009 that North Korea would likely test another nuclear missile in reaction to a pending United Nations Security Council resolution condemning its nuclear tests. The Justice Department said Kim was Fox’s source.

Kim, who immigrated to the U.S. from South Korea when he was nine years old, told Bloomberg News that “to be accused of doing something against or harmful to U.S. national interest is something I can’t comprehend.” Kim’s lawyers said that Kim was being charged for participating in the type of exchange between experts and the press “that happen hundreds of times a day in Washington.”

“In its obsession to clamp down on perfectly appropriate conversations between government employees and the press, the Obama Administration has forgotten that wise foreign policy must be founded on a two-way conversation between government and the public,” his lawyers said.

3. John Kiriakou

John Kiriakou, a former CIA agent, was sentenced to two and a half years in prison for giving journalists the names of two former colleagues who interrogated detainees using harsh practices including waterboarding. Kiriakou became central to the debate surrounding interrogation tactics in 2007 with an interview on ABC News. By then, he had left the CIA and was working at the auditing firm Deloitte. "Like a lot of Americans, I'm involved in this internal, intellectual battle with myself weighing the idea that waterboarding may be torture versus the quality of information that we often get after using the waterboarding technique, and I struggle with it," he said in his ABC interview. He suggested that our country should abandon the technique because "we're Americans and we're better than this."After the interview, Kiriakou was asked to leave Deloitte but became a source for other journalists investigating torture. Over the course of the next year he gave the name of one former colleague to a freelance reporter and gave the name of another former colleague to a reporter for The New York Times. He pleaded guilty in October 2012 to the leak made to the freelancer; the charge related to The New York Times was dropped.

4. Shami K. Leibowitz

Shamai K. Leibowitz, a former FBI Hebrew translator and the grandson of Israeli philosopher Yeshayahu Leibowitz, pleaded guilty to leaking classified information before a judge who later said he did not know exactly what Leibowitz had disclosed — just that it was a “very, very serious offense.” Leibowitz was sentenced to 20 months in prison.

Leibowitz had leaked 200 pages of transcribed conversations recorded by FBI wiretaps of the Israeli embassy in Washington. They documented discussions embassy officials had with American supporters of Israel and at least one member of Congress — and a discussion among Israeli officials in which they worry that their exchanges might be monitored. The leak was to a blogger, Richard Silverstein, who writes the blog Tikun Olam promoting peace between Israel and Palestine and monitoring U.S. government overreach. Silverstein burned the transcripts when Leibowitz came under investigation.

In an interview with The New York Times, Silverstein said that Leibowitz released the transcripts because of Israel’s aggressive attempts to influence public opinion in the U.S., and because Leibowitz worried that Israel would take what he saw as the potentially disastrous step of bombing nuclear facilities Iran. “I should not have done what I did,” Leibowitz said at his sentencing, “and I regret it terribly.”

5. Pfc. Bradley Manning

Pfc. Bradley Manning admitted to leaking 700,000 government documents to Wikileaks, including videos of air strikes in Afghanistan and Iraq in which civilians were killed. Manning said one of the videos, from 2007, was particularly disturbing to him — it showed American Apache helicopters killing a dozen people in Baghdad, including twoReuters journalists, and then opening fire on a van that arrived to help the victims. Manning noted the “seemingly delightful blood lust” of the airmen.

Manning said in February that his goal in releasing the materials was to show the public “what happens and why it happens.” “I believed if the public — in particular the American public — had access to the information” in the reports, “this could spark a debate about foreign policy in relation to Iraq and Afghanistan,” he said.

In 2010, while on leave, Manning first tried to leak materials to The Washington Post, but felt the reporter he spoke with was not interested. He then left a message with the ombudsman’s office at The New York Times which was not returned. So he uploaded the files to WikiLeaks. He was arrested on May 29, 2010; his trial is set for June 3, 2013.

A military judge ruled earlier this month that for Manning to be convicted under the Espionage Act, the prosecution would have to prove that Manning had “reason to believe” that the files could be used to harm the U.S. or to aid a foreign power. Manning said during his February confession that he thought carefully about the information he was releasing, and felt nothing he leaked could be used to harm the U.S.

6. Jeffrey Sterling

Jeffrey Sterling, a former-CIA officer, pleaded not guilty to the charge that he leaked information about a U.S. plan to sabotage Iran’s nuclear operations to Pulitzer Prize-winning New York Times journalist James Risen for his book State of War. The book had a chapter on a botched operation to derail Iran’s nuclear ambitions through sabotage, and the Justice Department charged that Sterling had been Risen’s source.

Risen recounts how, in the early 2000s, the CIA sent a Russian nuclear scientist to Iran to leak flawed plans for a nuclear bomb-triggering device in an attempt to set back the country’s efforts to develop a bomb. But the flaw in the bomb plans was so obvious that the Russian scientist spotted it immediately — the scientist then told the Iranians that there was an obvious flaw in the plans so that they would take him seriously. Risen’s source felt the Iranians likely were able to learn from the parts of the plans that weren’t flawed, and that the operation, intended as sabotage, may have in fact brought Iran closer to developing a nuclear weapon.

The CIA had suspected Sterling of leaking information to Risen since 2002, when Risen wrote an article about the effect racial discrimination had on Sterling’s career. In the article, Sterling said he had repeatedly been passed over for advancement because he is black — a superior once told him he was not an ideal spy because “you kind of stick out as a big black guy.” Sterling sued the CIA for racial discrimination in 2000.

After his arrest, Sterling maintained his innocence, and Risen refused to reveal his confidential sources for his book, citing the first amendment in a lengthy affidavit. As of summer 2012, the Justice Department says it has effectively terminated the case.

Big Banks Are Knee-Deep in the Dirty Money-Laundering Business

Michael Hudson, ICIJ — Thu, 02 May 2013 13:08:00 -0700

U.S. and UK financial firms are pretending they haven't been deeply involved in the dark side of banking.

Money-laundering issues at U.S. and UK financial firms shed light on role of rich nations and elite banks in the offshore world.

In the summer of 2009, Jennifer Sharkey was moving in select company. As a Manhattan-based vice president at JPMorgan Chase & Co.'s Private Wealth Management group, she juggled relationships with 75 "high net worth" clients with assets totaling more than half a billion dollars.

Things changed for her, she claims, after she raised doubts about a "suspect" foreign client who had millions stashed in various accounts at the bank.

The client was making questionable cash transfers and concealing who actually owned certain accounts, according to a lawsuit Sharkey is pursuing in federal court in Manhattan. She also found evidence, her suit claims, that the client had falsified financial statements for one of his companies and that he'd been involved in the "unexplained disappearance" of millions of dollars in merchandise in another venture.

After she warned high-level bank officials that the client might be involved in fraud and money laundering, her suit claims, JPMorgan moved to silence her — pressuring her to stop raising questions about the client, assigning her other clients to junior colleagues and, finally, firing her.

"I was just doing my job," Sharkey said in an interview with the International Consortium of Investigative Journalists (ICIJ). But for the bank, she said, "it was more important to keep this client than to do the right thing."

JPMorgan denies it retaliated against Sharkey for pushing the bank to exit its relationship with the client — and it denies that the customer was either a foreign client or engaged in suspect activities. The bank says it goes to great lengths to identify and block money laundering, terrorism financing and other illicit transactions.

Sharkey isn't alone, though, in raising concerns about the largest U.S. bank's commitment to fighting the flow of dirty money around the world.

Over the years, JPMorgan Chase and its corporate forebears have been accused of serving as conduits for money controlled by drug smugglers, mobsters and political despots and acting as magnets for "flight capital" from rich tax dodgers from Latin America and other regions. The bank also played a part, lawsuits alleged, in massive tax haven-enabled frauds in the Enron and Madoff scandals.

An examination of JPMorgan's record in policing suspect cash and offshore deals offers a case study of how big banks deal with dirty money and transnational corruption — and a window onto the decades-long history of the banking industry's fraught relationship with the offshore world.

When people think about secret accounts and money laundering, they often imagine the Cayman Islands or some other sultry paradise. But the enablers of cross-border corruption aren't located only in flyspeck island havens, white-collar crime experts say.

Criminals and connivers rely on easy access to banks in the U.S., the UK and other rich nations to hide their assets from investigators and tax collectors and shift moneyin and out of offshore hideaways.

Without this access, their shell games wouldn't be possible.

In 2003, New York prosecutors claimed that an unlicensed money-transfer firm in Manhattan directed $9 billion in wire transactions through three dozen accounts at JPMorgan, moving money around the world for drug dealers and other dodgy characters.

In 2011, the bank paid nearly $90 million to settle regulators' claims that it hadviolated economic sanctions against Iran, Cuba and other countries under U.S. embargoes.

In January, a consent order from JPMorgan's main federal regulator, the Office of the Comptroller of the Currency, cited the bank for "critical deficiencies" in its anti-money-laundering controls, including inadequate procedures for monitoring transactions at foreign branches.

In the 2003 case, the bank acknowledged it had been "too slow and not forceful enough" in vetting the money-transfer firm, but said it was working to tighten its money laundering safeguards. In the 2011 case, the bank said the sanction violationswere isolated incidents. In the wake of the comptroller's case, the bank told the New York Times that it has been "working hard to fully remediate the issues identified."

Mark Kornblau, a JPMorgan spokesman, declined to answer detailed questions for this story.

In a brief written statement, he told ICIJ that complying with anti-money-laundering rules "is a top priority for us. We have already made progress addressing the issues cited in the consent orders, which contain no allegations of intentional misconduct by the firm or any of its employees."

JPMorgan isn't alone when it comes to taking heat for failing to do enough to stop the flow of suspect cash. Last year U.S. authorities reached settlements with HSBC, Citigroup and UK-headquartered Standard Chartered Bank over alleged money-laundering compliance failures.

HSBC agreed in December to pay more than $1.9 billion to settle an investigation into evidence it shifted cash for rogue nations, terrorists and Mexican drug lords.

U.S. Senator Carl Levin of Michigan said a "pervasively polluted" culture at HSBCallowed billions in suspect dollars to flow through the bank. Senate investigators said HSBC ignored warnings from Mexican and U.S. authorities that the gush of money flowing into the bank from Mexico was so large it could only be sustained by the proceeds from narcotics trafficking.

HSBC said in a statement last year that it was "profoundly sorry" for its "past mistakes."

How well major banks screen customers and cash flows is important because, in a digitally connected world, dirty money no longer travels as stacks of bills stuffed into suitcases. It moves by the click of a computer key. This makes big banks crucial gatekeepers in the financial system, giving them the power to cut off the flow of corrupt cash or allow it to roam free.

The offshore system can't be reformed, money laundering experts say, without cooperation and compliance from the banking system's biggest players.

Dennis Lormel, former chief of the FBI's financial crimes program, says compliance watchdogs working on the payroll of big banks strive to do the right thing, but they're often locked in losing battles with bankers who are more concerned about booking deposits and doing deals than making sure the money coming in is clean.

"The business culture usually wins," Lormel says. "The business people take the risks and the compliance people are left to clean up the mess."

Offshore Players

JPMorgan and other major banks have increased their risks and rewards in the offshore world by weaving a web of branches and subsidiaries across places that have been tagged as havens for financial secrecy and criminal activity.

Secret records obtained by ICIJ reveal how many of the world's top banks – including UBS and Clariden in Switzerland, ING and ABN Amro in the Netherlandsand Deutsche Bank in Germany – have worked to set up their customers with secrecy-cloaked companies in the British Virgin Islands, the Cook Islands and other offshore locales.

The banks deny wrongdoing.

A 2008 U.S. government report found JPMorgan had 50 subsidiaries in Bermuda, the Bahamas and other places labeled as tax havens or secrecy jurisdictions, tied for 11th highest among the 100 largest U.S. companies.

Since then the bank has expanded its reach in some offshore centers. Its tally of subsidiaries in the Cayman Islands grew from seven in 2007 to 20 at the end of 2012,securities filings show. Over that span its subsidiaries in Mauritius — a tiny isle off Africa's eastern coast that's been called "a Cayman Islands to India" — grew from eight to 14.

While the bank helps move money around the world via its tax haven subsidiaries, JPMorgan's international private banking network attracts large deposits to the U.S. from rich customers in Latin America and other regions. Much of this money isn't reported to tax authorities in the depositors' home countries, according to a study last year by James S. Henry, former chief economist at McKinsey & Company and a board member of Tax Justice Network, an advocacy group that favors tighter regulation of the offshore system.

The study estimates JPMorgan's private banking operations boosted their assets under management from $187 billion in 2005 to $284 billion in late 2010 — ranking it among an elite group of giant private banking institutions whose mission, the report claims, is to "entice the elites of rich and poor countries alike to shelter their wealth tax-free offshore."

Rich history

JPMorgan Chase is an amalgam of America's two most storied banks. Historian Ron Chernow called the Morgan banking dynasty perhaps "the most formidable financial combine in history." Chase Manhattan traced its roots to 1799 and claimed Aaron Burr, the nation's third vice president, as its founder.

Before the mega-merger that brought the Morgan and Chase empires together at the turn of this century, both played roles in the emergence of tax havens — and in the controversies that grew out of the offshore system's rise.

Chase and Morgan were early players, in the 1960s, in the growth of the Bahamas as an overseas financial center. Chase was one of the banks of choice for Philippine President Ferdinand Marcos and the Shah of Iran, strongmen who looted their countries' treasuries during their decades in power. Relations between Chase officials and the Shah were so close in the 1960s and '70s, Henry says, that Chase Chairman David Rockefeller was essentially "the Shah's private banker."

Chase played a cameo role in an offshore money-laundering thread of the Watergate scandal, serving as a conduit for an illegal $55,000 contribution that American Airlines laundered through a foreign source and funneled into President Nixon's re-election campaign. Federal authorities fined the airline, but apparently took no action against Chase.

In 1973, a mobster turned informer told a congressional committee that Chase and other firms helped him cook up bogus covers for illegal transactions in stolen and counterfeit securities that had been laundered through Switzerland and Belgium and then brought back to the U.S. The witness testified Chase bankers accepted the "flimsiest of proof" as to his identity when they signed off on documents that made his transactions possible.

In another case, the infamous "Pizza Connection" heroin ring used Chase to channel cash overseas, according to an account in The Money Launderers, a book by former U.S. Treasury enforcement official Robert E. Powis. In July 1980, a bagman for the ring entered Chase Manhattan's headquarters with four leather bags stuffed with $550,000 in fives, tens and twenties. The bank accepted the money, counted it, then transferred it to a Swiss account, according to Powis.

In June 1985, the Treasury Department fined Chase and other New York banks for ignoring one of the government's basic safeguards against financial chicanery — the federal Bank Secrecy Act's requirement that banks report any transactions involving $10,000 or more in cash. Chase paid a then-record fine of $360,000, based on 1,442 unreported transactions totaling $853 million.

"Some clerical people did not file reports here and there," a Chase spokesman told The Washington Post at the time. "There was nothing willful about this thing."

Fallen angel

Along with handling money involved in drug smuggling and other underworld activities, big U.S. banks have also attracted deposits from Third World elites who want to hide their wealth from tax collectors. For decades, anti-corruption advocates say, U.S. banks have encouraged this process by dispatching armies of private bankers to solicit flight capital from developing nations.

In the 1980s, Antonio Gebauer was J.P. Morgan & Co.'s top man South of the Border, lauded by a Morgan spokesman as "the most highly esteemed banker in Latin America." Gebauer specialized in putting together multi-million-dollar loan deals across the region. He also oversaw covert New York bank accounts for a handful of wealthy Brazilians, among them a great-grandson of the founder of Brazilian Republic.

Brazilian authorities later questioned whether the money was unreported capital. Gebauer's attorney said the accounts had been set up under "the unusual and Byzantine relationships that often exist between bankers and flight capitalists."

The secret deposits might have remained secret if Gebauer hadn't been caught embezzling more than $4 million from his clients' accounts. In 1987, a U.S. judge sentenced him to 3½ years in prison, calling him "a fallen angel of the banking world."

U.S. media touched on the flight capital issue briefly, and the government of Brazil filed a treaty request asking U.S. authorities to subpoena account details from Morgan officials.

The bank won a court decision blocking Brazil's push to get more information. And Gebauer's guilty pleas allowed the House of Morgan to avoid a messy trial that have might revealed "the seamier side" of its Latin American operations, according to Henry's 2003 book on the dark side of global finance, Blood Bankers.

Post-9/11 World

The issue of dark money didn't go away after J.P. Morgan & Co. and Chase Manhattan Corp. merged in late 2000, creating JPMorgan Chase & Co.

In March 2001, a U.S. Senate investigation revealed Chase Manhattan had been among big firms that had provided correspondent accounts to offshore banks involved in criminal activity. Investigators found that Antigua-licensed American International Bank moved $116 million through its account at Chase even as it was engaging in frauds in the U.S. and working hand-in-hand with convicted felons.

After the Sept. 11, 2001, terrorist attacks, tracking illicit cash became a bigger concern for U.S. authorities. Lormel, the former FBI official, says JPMorgan representatives were among the compliance specialists from various banks who pitched in after Sept. 11 and helped efforts to track terrorists.

"Whatever we wanted, within the limits of the law, the bankers were incredibly helpful," he recalls.

JPMorgan's post-9/11 record wasn't spotless, however.

In January 2003, federal authorities raided a business in Brooklyn called Carnival French Ice Cream, a convenience store with a limited supply of food and sundries and two soft-serve ice cream machines. During their search, investigators found paperwork that led them to conclude that, over a six-year period, the store's proprietor had laundered millions of dollars through a JPMorgan account on its way to Yemen, China and other places.

Some of the money, investigators believed, went to a Yemeni cleric who later pleaded guilty to charges that he had conspired to aid terrorists.

In February 2003, a month after the ice-cream shop raid, investigators for then-Manhattan District Attorney Robert Morgenthau raided an unlicensed money transfer firm, Beacon Hill Services Corp., that maintained dozens of accounts with JPMorgan.

Morgenthau said Beacon Hill was able to wire $9 billion through these accounts because the JPMorgan's compliance unit "fell down on the job," ignoring "numerous red flags for money laundering." A sizeable chunk of the money, he said, came from drug dealers and tax dodgers, and some ended up in the Middle East, possibly in the hands of terrorists.

No criminal charges were filed against JPMorgan in the case.

In the wake of these cases, industry officials argued it wasn't fair to expect banks to catch every questionable transaction amid trillions of dollars in daily cash flows.

JPMorgan's general counsel told The Wall Street Journal: "Think if you're running a railroad, and we say to you, 'We want you to monitor everyone who takes your train and see if their trip is legitimate.' "

'Uniquely situated'

Questions about how well JPMorgan monitors its customers persisted over the past decade, coming up in lawsuits and investigations relating to the Enron and Madoff affairs and other scandals.

Investors, insurers and federal authorities accused JPMorgan and Enron Corp. of using "special purpose vehicles" based in tax havens in the UK's Channel Islands as part of a scheme to create disguised loans that allowed Enron to hide its debts and book sham profits. The bank, which denied wrongdoing, shelled out more than $3 billion to settle claims related to Enron's fall.

After the Madoff case broke in 2008, a court-appointed trustee, Irving Picard, invoked Enron in attacking JPMorgan's role in the largest Ponzi scheme in history. JPMorgan turned a blind eye to Madoff's activities, Picard claims, despite its promises to do better after it had been caught "propping up" Enron's frauds.

JPMorgan, Picard asserted, was "at the very center" Madoff's Ponzi scheme. As his primary bank for more than two decades, it "provided the infrastructure for Madoff's deception" and was "uniquely situated to see the likely fraud," the trustee alleged in a lawsuit in federal court.

The bank held as much as $5.5 billion in Madoff-connected cash and, according to court filings by Picard, earned an estimated half-billion dollars from fees and other revenues generated by Madoff's billions.

Any concerns within the bank about Madoff "were suppressed as the drive for fees and profits became a substitute for common sense, ethics and legal obligations," Picard's lawsuit said.

The suit said the bank ignored a key indicator of money laundering or other financial crimes: frequent wire activity with offshore banking centers and financial secrecy havens. Within Madoff's main account at JPMorgan, dollar amounts of wire activity with high- and medium-risk jurisdictions increased 83 percent between 2004 and 2008.

In June 2007, a JPMorgan risk officer raised questions about whether Madoff might be running a Ponzi scheme. Other than asking a junior employee to do a Google search, JPMorgan officials did nothing to dig deeper into Madoff's business model, Picard charged. Madoff's main JPMorgan account was still operating without restrictions when he was arrested at the end of 2008.

The bank calls Picard's allegations "blustering" and "preposterous."

"The trustee's damages claims demand the absurd inference that JPMorgan deliberately joined with Bernard Madoff in a doomed-to-fail Ponzi scheme so that it could earn conventional banking fees," the bank said in a court filing.

A judge threw out many of Picard's claims against JPMorgan, ruling that it's up to individual victims rather than the trustee to sue the bank. That decision is on appeal. Other claims are still alive in bankruptcy court.

Last month, the New York Times reported that U.S. prosecutors have opened a new front in the case, investigating whether JPMorgan violated federal law by failing to fully inform authorities about suspicions about Madoff.

A bank spokesman told the Times the JPMorgan employees made "good faith" efforts "to comply with all anti-money-laundering and regulatory obligations."

EL MORGANGATE

As the fallout from Madoff's fraud and the 2008 financial crisis was spreading across Wall Street, JPMorgan was dealing with another scandal 5,000 miles away.

An Argentine newsmagazine, Crítica de la Argentina, had run an exposé listing the names and deposit balances of some 200 citizens with JPMorgan accounts in the U.S. — including executives associated with the country's largest media company.

The headline: EL MORGANGATE.

The issue of flight capital flowing from Latin America to the United States had once again come to the surface. And, once again, JPMorgan was in the middle of the affair, in a case with striking parallels to the Tony Gebauer scandal two decades before.

Hernan Arbizu was a New York-based JPMorgan vice president in charge of some $200 million in accounts belonging to Argentines. Like Gebauer, he was accused of pilfering money from his clients. And as in the Gebauer case, exposure of his wrongdoing was accompanied by questions about his employer's relationships with wealthy, tax-shy Latin Americans.

Arbizu claims he and other private bankers helped customers launder money and evade taxes in their home countries. "I became a fraudster from the minute I started working in private banking, because if you think about it, I was committing fraud against Argentina as a whole through our activities here," he told Bloomberg News in 2009.

JPMorgan sued Arbizu in federal court in New York, accusing him of stealing money from client accounts and violating confidentiality agreements by expropriating JPMorgan documents. The bank eventually won a default judgment against him totaling nearly $3.6 million.

U.S. criminal charges pending against Arbizu may never be prosecuted. He remains out of reach in Argentina, protected from extradition by a government that has used his testimony in various legal actions.

JPMorgan declined to answer questions about Arbizu.

Model effort

In 2010, anti-money laundering specialists at JPMorgan became concerned about a series of multi-million-dollar wire transfers involving a San Antonio, Texas, businessman. When bank officials confronted the businessman, court affidavits say, he told them he was acting as a front for his brother-in-law, the former treasurer of the Mexican border state of Coahuila.

The bank alerted the U.S. Drug Enforcement Administration, helping spark official investigations of the ex-treasurer, who now stands accused in Mexico of embezzling millions of dollars from his state's treasury.

In 2010 and 2011, anti-money laundering experts at the bank joined the U.S. Department of Homeland Security in the agency's fight against human trafficking.

Homeland Security and JPMorgan officials developed a detailed M.O. for the banking habits of businesses involved in human smuggling for prostitution and other forms of forced labor, according to John Byrne, executive vice president of the Association of Certified Anti-Money Laundering Specialists. One of the red flags: businesses that booked lots of round-number credit card payments — say, $200 — after midnight.

Byrnes' group honored JPMorgan and Homeland Security with its Private-Public Service Award. The collaboration, Byrnes says, was an example of good-faith effort by JPMorgan and other banks to fight corruption and money laundering.

Byrnes acknowledges big banks have made mistakes, but he believes these problems don't add up to a picture of an industry that puts profits above compliance.

The banking industry, he says, "works very, very hard to keep illicit funds out of institutions. The commitment comes from the top — from senior management."

'Rare incidents'

Around the time JPMorgan was helping Homeland Security and the DEA zero in on human smugglers and the former Mexican official, it was under fire from another U.S. agency.

The Department of the Treasury was investigating evidence that JPMorgan had ignored legal bans on doing business with Cuba, Sudan, Liberia and Iran.

After the department subpoenaed information about one suspect transaction, the bank claimed, repeatedly, that it didn't have key documents that in fact it did have, the agency said. Only after the agency provided a detailed list it had obtained from another financial institution, the agency said, did JPMorgan cough up the documents.

Treasury officials found that the bank committed multiple violations of U.S. economic embargoes between March 2005 and March 2011. Among the violations: 1,711 transfers totaling $178.5 million to Cuban citizens and the transfer of 32,000 ounces of gold bullion, worth more than $20 million, to a bank in Iran.

The agency charged that bank managers and supervisors knew about the law-breaking and but did nothing to fix the problem.

After the $88.3 million penalty in the case was announced in August 2011, a JPMorgan spokesman said the matter involved "rare incidents" that were "unrelated and isolated from each other. The firm screens hundreds of millions of transaction and customer records per day and annual error rates are a tiny fraction of a percent."

Criminal history

That settlement hasn't wiped the slate clean for the bank when it comes to problems over its handling of suspect transactions and clients. Other investigations and lawsuits are still in the works.

In federal court in Minnesota, JPMorgan faces claims that it allowed corporate financier Thomas Petters to run a $3.7 billion Ponzi scheme that raised money through investment funds based in the Caymans.

Petters moved more than $83 million in Ponzi cash through his JPMorgan accounts between 2002 and 2007, a court-appointed trustee, Douglas Kelley, claims in a lawsuit. JPMorgan accepted his deposits, loaned him huge sums and worked with him on his $426 million purchase of Polaroid Corp., the suit says, even though it knew or should have known that he had a shady business plan — and a shady backstory.

Petters had a record of convictions for forgery, larceny and fraud and his chief fundraiser in the Ponzi scheme had done time in prison for cocaine dealing and offshore money laundering.

In court records, JPMorgan says Kelley's charges are "long on innuendo" and full of "largely irrelevant allegations." It says it engaged in legitimate, arm's-length transactions with Petters and that Kelley is trying to overcome the facts and the law "by talismanically invoking the term 'Ponzi scheme.' "

Kelley, a former federal prosecutor, said in an interview that his court filings in various lawsuits relating to Petters' frauds are "filled with specific facts" that show that JPMorgan and other banks that did business with Petters "turned their heads aside and didn't ask questions they ought to be asking just because they were making money hand over fist."

"If you're a banker and start to see a number of these red flags crop up," Kelley said, "you have a duty to ask questions — and you have a duty not to accept answers that are not facially candid."

50 Reasons You Despised George W. Bush's Presidency: A Reminder on the Day of His Presidential Library Dedication

Steven Rosenfeld, AlterNet — Wed, 24 Apr 2013 13:03:00 -0700

He's one of the worst presidents ever.

On Thursday, President Obama and all four living ex-presidents will attend the dedication of the $500 million George W. Bush Presidential Library at Southern Methodist University in Dallas, Texas. Many progressives will remember Bush as a contender for the "worst president ever," saying he more aptly deserves a multi-million-dollar prison cell for a litany of war crimes.

Amazingly, the Bush library seeks to ask visitors "What would you have done?" if you were in this president’s shoes. The ex-president’s defenders are betting that the public will reconsider their judgments after a hefty dose of historical amnesia. Bush has been absent from political debates in recent years, instead making millions in private speeches. Today, his popularity is even with Obama's; both have 47 percent approval rating.

Let’s look at 50 reasons, some large and some small, why W. inspired so much anger.

1. He stole the presidency in 2000. People may forget that Republicans in Florida purged more than 50,000 African-American voters before Election Day, and then went to the Supreme Court where the GOP-appointed majority stopped a recount that would have awarded the presidency to Vice-President Al Gore if all votes were counted. National news organizations verified that outcome long after Bush had been sworn in.

2. Bush’s lies started in that race. Bush ran for office claiming he was a “uniter, not a divider.” Even though he received fewer popular votes than Gore, he quickly claimed he had the mandate from the American public to push his right-wing agenda.

3. He covered up his past. He was a party boy, the scion of a powerful political family who got away with being a deserter during the Vietnam War. He was reportedly AWOL for over a year from his assigned unit, the Texas Air National Guard, which other military outfits called the "Champagne Division.”

4. He loved the death penalty. As Texas governor from 1995-2000, he signed the most execution orders of any governor in U.S. history—152 people, including the mentally ill and women who were domestic abuse victims. He spared one man’s life, a serial killer.

5. He was a corporate shill from Day 1. Bush locked up the GOP nomination by raising more campaign money from corporate boardrooms than anyone at that time. He lunched with CEOs who would jet into Austin to "educate" him about their political wish lists.

6. He gutted global political progress.He pulled out of the Kyoto Protocol which set requirements for 38 nations to lower greenhouse gas emissions to combat climate change, saying that abiding by the agreement would “harm our economy and hurt our workers.”

7. He embraced global isolationism. He withdrew from the 1972 Anti-Ballistic Missile Treaty, over Russia’s protest, taking the U.S. in a direction not seen since World War I.

8. He ignored warnings about Osama bin Laden. He ignored the Aug. 6, 2001 White House intelligence briefing titled, “Bin Laden determined to strike in the U.S.” Meanwhile, his chief anti-terrorism advisor, Richard Clarke, and first Treasury Secretary, Paul O’Neill, testified in Congress that he was intent on invading Iraq within days of becoming president.

9. Ramped up war on drugs, not terrorists. The Bush administration had twice as many FBI agents assigned to the war on drugs than fighting terrorism before 9/11, and kept thousands in that role after the terror attacks.

10. “My Pet Goat.” He kept reading a picture book to grade-schoolers for seven minutes after his top aides told him that the World Trade Centers had been attacked in 9/11. Then Air Force One flew away from Washington, D.C., vanishing for hours after the attack.

11. Squandered global goodwill after 9/11. Bush thumbed his nose at world sympathy for the victims of the September 11, 2001 attacks, by declaring a global war on terrorism and declaring “you are either with us or against us.”

12. Bush turned to Iraq not Afghanistan. The Bush administration soon started beating war drums for an attack on Iraq, where there was no proven Al Qaeda link, instead of Afghanistan, where the 9/11 bombers had trained and Osama bin Laden was based. His 2002 State of the Union speech declared that Iraq was part of an “Axis of Evil.”

13. Attacked United Nation weapons inspectors. The march to war in Iraq started with White House attacks on the credibility of U.N. weapons inspectors in Iraq, whose claims that Saddam Hussein did not have nuclear weapons proved to be true.

14. He flat-out lied about Iraq’s weapons. In a major speech in October 2002, he said that Saddam Hussein had the capacity to send unmanned aircraft to the U.S. with bombs that could range from chemical weapons to nuclear devices. “We cannot wait for the final proof—the smoking gun—that could come in the form of a mushroom cloud,” he said.

15. He ignored the U.N. and launched a war. The Bush administration tried to get the U.N. Security Council to authorize an attack on Iraq, which it refused to do. Bush then decided to lead a "preemptive" attack regardless of international consequences. He did not wait for any congressional authorization to launch a war.

16. Abandoned international Criminal Court. Before invading Iraq, Bush told the U.N. that the U.S. was withdrawing from ratifying the International Criminal Court Treaty to protect American troops from persecution and to allow it to pursue preemptive war.

17. Colin Powell’s false evidence at U.N. The highly decorated soldier turned Secretary of State presented false evidence at the U.N. as the American mainstream media began its jingoistic drumbeat to launch a war of choice on Saddam Hussein and Iraq.

18. He launched a war on CIA whistleblowers. When a former ambassador, Joseph C. Wilson, wrote a New York Times op-ed saying there was no nuclear threat from Iraq, the White House retaliated by leaking the name and destroying the career of his wife, Valerie Plame, one of the CIA’s top national security experts.

19. Bush pardoned the Plame affair leaker. Before leaving office, Bush pardoned the vice president’s top staffer, Scooter Libby, for leaking Plame’s name to the press.

20. Bush launched the second Iraq War. In April 2003, the U.S. military invaded Iraq for the second time in two decades, leading to hundreds of thousands of civilian deaths and more than a million refugees as a years of sectarian violence took hold on Iraq. Nearly 6,700 U.S. soldiers have died in the Iraq and Afghan wars.

21. Baghdad looted except for oil ministry. The Pentagon failure to plan for a military occupation and transition to civilian rule was seen as Baghdad was looted while troops guarded the oil ministry, suggesting this war was fought for oil riches, not terrorism.

22. The war did not make the U.S. safer. In 2006, a National Intelligence Estimate (a consensus report of the heads of 16 U.S. intelligence agencies) asserted that the Iraq war had increased Islamic radicalism and had worsened the terror threat.

23. U.S. troops were given unsafe gear. From inadequate vests from protection against snipers to Humvees that could not protect soldiers from roadside bombs, the military did not sufficiently equip its soldiers in Iraq, leading to an epidemic of brain injuries.

24. Meanwhile, the war propaganda continued. From landing on an aircraft carrier in a flight suit to declare “mission accomplished” to surprising troops in Baghdad with a Thanksgiving turkey that was a table decoration used as a prop, Bush defended his war of choice by using soldiers as PR props.

25. He never attended soldiers' funerals. For years after the war started, Bush never attended a funeral even though as of June 2005, 144 soldiers (of the 1,700 killed thus far) were laid to rest in Arlington National Cemetary, about two miles from the White House.

26. Meanwhile, war profiteering surged.The list of top Bush administration officials whose former corporate employers made billions in Pentagon contracts starts with Vice-President Dick Cheney and Halliburton, which made $39.5 billion, and included his daughter, Liz Cheney, who ran a $300 million Middle East partnership program.

27. Bush ignored international ban on torture. Suspected terrorists were captured and tortured by the U.S. military in Baghdad’s Abu Gharib prison, in the highest profile example of how the Bush White House ignored international agreements, such as the Geneva Convention, that banned torture, and created a secret system of detention that was unmasked when photos made their way to the American media outlets.

28. Created the blackhole at Gitmo and renditions. The Bush White House created the offshore military prison at Guantanamo Bay, Cuba, as well as secret detention sites in eastern Europe to evade domestic and military justice systems. Many of the men still jailed in Cuba were turned over to the U.S. military by bounty hunters.

29. Bush violated U.S. Constitution as well.The Bush White House ignored basic civil liberties, most notably by launching a massive domestic spying program where millions of Americans’ online activities were monitored with the help of big telecom companies. The government had no search warrant or court authority for its electronic dragnet.

30. Iraq war created federal debt crisis.The total costs of the Iraq and Afghan wars will reach between $4 trillion and $6 trillion, when the long-term medical costs are added in for wounded veterans, a March 2013 report by a Harvard researcher has estimated. Earlier reports said the wars cost $2 billion a week.

31. He cut veterans’ healthcare funding. At the height of the Iraq war, the White House cut funding for veterans’ healthcare by several billion dollars, slashed more than one billion from military housing and opposed extending healthcare to National Guard families, even as they were repeatedly tapped for extended and repeat overseas deployments.

32. Then Bush decided to cut income taxes. In 2001 and 2003, a series of bills lowered income tax rates, cutting federal revenues as the cost of the foreign wars escalated. The tax cuts disproportionately benefited the wealthy, with roughly one-quarter going to the top one percent of incomes compared to 8.9% going to the middle 20 percent. The cuts were supposed to expire in 2013, but most are still on the books.

33. Assault on reproductive rights.From the earliest days of his first term, the Bush White House led a prolonged assault on reproductive rights. He cut funds for U.N. family planning programs, barred military bases from offering abortions, put right-wing evangelicals in regulatory positions where they rejected new birth control drugs, and issued regulations making fetuses—but not women—eligible for federal healthcare.

34. Cut Pell Grant loans for poor students. His administration froze Pell Grants for years and tightened eligibility for loans, affecting 1.5 million low-income students. He also eliminated other federal job training programs that targeted young people.

35. Turned corporations loose on environment. Bush’s environmental record was truly appalling, starting with abandoning a campaign pledge to tax carbon emissions and then withdrawing from the Kyoto Protocol on greenhouse gases. The Sierra Club lists 300 actions his staff took to undermine federal laws, from cutting enforcement budgets to putting industry lobbyists in charge of agencies to keeping energy policies secret.

36.. Said evolution was a theory—like intelligent design.One of his most inflammatory comments was saying that public schools should teach that evolution is a theory with as much validity as the religious belief in intelligent design, or God’s active hand in creating life.

37. Misguided school reform effort. Bush’s “No Child Left Behind” initiative made preparation for standardized tests and resulting test scores the top priority in schools, to the dismay of legions of educators who felt that there was more to learning than taking tests.

38. Appointed flank of right-wing judges. Bush’s two Supreme Court picks—Chief Justice John Roberts and Associate Justice Samuel Alito—have reliably sided with pro-business interests and social conservatives. He also elevated U.S. District Court Judge Charles Pickering to an appeals court, despite his known segregationist views.

39. Gutted the DOJ’s voting rights section. Bush’s Justice Department appointees led a multi-year effort to prosecute so-called voter fraud, including firing seven U.S. attorneys who did not pursue overtly political cases because of lack of evidence.

40. Meanwhile average household incomes fell. When Bush took office in 2000, median household incomes were $52,500. In 2008, they were $50,303, a drop of 4.2 percent, making Bush the only recent two-term president to preside over such a drop.

41. And millions more fell below the poverty line. When Bill Clinton left office, 31.6 million Americans were living in poverty. When Bush left office, there were 39.8 million, according to the U.S. Census, an increase of 26.1 percent. The Census said two-thirds of that growth occurred before the economic downturn of 2008.

42. Poverty among children also exploded. The Census also found that 11.6 million children lived below the poverty line when Clinton left office. Under Bush, that number grew by 21 percent to 14.1 million.

43. Millions more lacked access to healthcare. Following these poverty trends, the number of Americans without health insurance was 38.4 million when Clinton left office. When Bush left, that figure had grown by nearly 8 million to 46.3 million, the Census found. Those with employer-provided benefits fell every year he was in office.

44. Bush let black New Orleans drown. Hurricane Katrina exposed Bush’s attitude toward the poor. He didn’t visit the city after the storm destroyed the poorest sections. He praised his Federal Emergency Management Agency director for doing a "heck of a job" as the federal government did little to help thousands in the storm’s aftermath and rebuilding.

45. Yet pandered to religious right. Months before Katrina hit, Bush flew back to the White House to sign a bill to try to stop the comatose Terri Schiavo's feeding tube from being removed, saying the sanctity of life was at stake.

46. Set record for fewest press conferences. During his first term that was defined by the 9/11 attacks, he had the fewest press conferences of any modern president and had never met with the New York Times editorial board.

47. But took the most vacation time. Reporters analyzing Bush’s record found that he took off 1,020 days in two four-year terms—more than one out of every three days. No other modern president comes close. Bush also set the record for the longest vacation among modern presidents—five weeks, the Washington Post noted.

48. Karl Rove, Dick Cheney, Donald Rumsfeld. Not since Richard Nixon’s White House and the era of the Watergate burglary and expansion of the Vietnam War have there been as many power-hungry and arrogant operators holding the levers of power. Cheney ran the White House; Rove the political operation for corporations and the religious right; and Rumsfeld oversaw the wars.

49. He’s escaped accountability for his actions. From Iraq war General Tommy Franks’ declaration that “we don’t do body counts” to numerous efforts to impeach Bush and top administration officials—primarily over launching the war in Iraq—he has never been held to account in any official domestic or international tribunal.

50. He may have stolen the 2004 election as well. The closest Bush came to a public referendum on his presidency was the 2004 election, which came down to the swing state of Ohio. There the GOP’s voter suppression tactics rivaled Florida in 2000 and many unresolved questions remain about whether the former GOP Secretary of State altered the Election Night totals from rural Bible Belt counties.

Any bright spots? Conservatives will lambaste lists like this for finding nothing good about a president like W. So, yes, he created the largest ocean preserve offshore from Hawaii in his second term. And in his final year in office, his initiative to fight AIDS across Africa has been credited with saving many thousands of lives. But on balance, George W. Bush was more than eight years of missed opportunities for America and the world. He was a disaster, leaving much of America and the world in much worse shape than when he took the oath of office in 2001. His reputation should not be resurrected or restored or seen as anything other than what it was.

The Billionaire Brothers Behind America's Predator Drones -- And Their Very Strange Past

Yasha Levine, Not Safe for Work Corporation — Wed, 24 Apr 2013 09:41:00 -0700

Linden Stanley and James Neal Blue's General Atomics has a massive stake in the drone industry. But that's just the start.

This article first appeared at the Not Safe for Work Corporation.

Gray Butte, CA: It's around 1 p.m. when my buddy Dave and I finally spot the General Atomics drone base, way out in the wastelands of the Mojave Desert.

We're on the border of San Bernardino and Los Angeles Counties. There's not much around for miles--nothing but sandy soil, rocks, Joshua trees, an abandoned trailer here and there, heaps of trash and tires. There's also a salvage yard full of airplane parts a few miles down the road, as well as a dairy plant and a foul-smelling high density feed lot crammed with miserable dairy cows reeking of shit and piss, baking in the desert sun. Next door to that is a trailer with a sign offering baby goats for sale.

We stop short of the gate, pulling over on the shoulder. Dave is a Victorville native whose dad was in the Air Force. He' s been around drones since they started popping up here in the 1990s. Right after high school, he even scored a brief gig with the infamous Pinkertons, guarding an early prototype of the Predator. But today in our drop-top Mustang rental car--a perfect car for drone hunting--Dave and I look just like a couple'a tourists. I pretend to fumble with the roof controls while we check out the scene.

From afar, the base itself doesn't look like much--just a jumble of low-slung prefab structures and warehouses and random industrial machinery flanked by vivid green alfalfa crop fields, and a solar field just beyond. That base could be anything. But it isn't just anything. We are looking at what used to be an abandoned WWII-era airfield, but today ranks as possibly the largest private drone base in the United States.

General Atomics took the base over in 2001 and converted it into a testing and quality control facility for its drone fleet. This is where the company tests experimental drone technology--like the newfangled stealth bomber jet drone. But mostly the base is where General Atomics techs assemble and test their Predator and Reaper drones before breaking them down again and shipping them to eager customers in the Air Force, Border Patrol, National Guard and the CIA.

The Guardian estimated that U.S. armed forces had about 250 General Atomics drones in 2012. And a good number of them first came through Grey Butte.

As we peer through the outer perimeter fence of the base, I can make out a couple of Reapers parked outside, their motors revving up louder and faster, as they were about to take off. The fence has a couple of smallish signs warning people to stay the fuck away, or else. Beyond the whirring Reapers we see warehouses, hangers, an air control tower and stacks of long rectangular plastic crates that are used to transport the disassembled Predators.

At one point, we spot a Predator hovering very high overhead. It circles a few times and then disappears from view.

I'm suddenly paranoid.

When people talk or think about drones these days, it's usually in very crude, naive, B-sci-fi ways: vague images of big brother robots menacingly hovering over us, observing, recording and tracking our every move…

But I'm not so much spooked by the Predator drones hovering above me, as I am by the spooky brothers who make them: Linden Stanley and James Neal Blue, the mysterious Blue brothers who own and run General Atomics.

You probably don't know about the Blue brothers, and neither did I until a few months ago. There's very little current information available about their lives, and the parts that are known are murky and incomplete.

What we do know with a fair amount of certainty is that Linden Stanley Blue and James Neal Blue were born to a wealthy family in Colorado during the Great Depression, went to Yale, served as Air Force pilots, and have been involved in some very heavy business activities since then: They've enriched uranium, dumped radioactive waste on a Native American reservation, infiltrated and spied on environmental activists, operated plantations with one of the South America's most brutal dictator clans and tried to turn Telluride, the quaint Colorado ski town, into a giant McTractHome development.

Today the Blue brothers reside in separate mansions in the wealthy, pasty-white beach enclave of La Jolla -- the Beverly Hills of San Diego -- not far from the headquarters of General Atomics. The brothers are both approaching 80, and are extremely wary of the press.

The Blue's weren't always as shy of the spotlight as they are today.

Back in 1957, Neal Blue and his brother Linden made the cover of LIFE magazine as "The Flying Blue Brothers.” It showed them crammed into the cockpit of a small blue single-prop plane, with big creepy smiles, ready to fly around the perimeter of South America.

The Blue brothers of Yale make a hazardous hemispheric odyssey
The tiny plane above, dodging through cloud openings among the treacherous peaks of the Colombian Andes, is the vehicle of a unique, exciting modern odyssey. Last summer, piloted alternately by Yale men Neal and Linden Blue (left), the Blue Bird flew 25,000 miles in 110 days--from Denver. Colo, to Mexico, down along the rugged west coast of South America, across the Andes to Argentina, back north again over the Caribbean to Miami, and at last to New Haven. The log of their trip was packed with colorful and hazardous incident. With oxygen but without a supercharger in their single-engined plane, they Hew at dangerous altitudes of 16,000 feet They made 44 stops along the way, dropping in on affable plantation owners and friendly head-hunters; they landed lightheartedly where no plane had ever been before and then were forced down dangerously where no plane should have been.

One of these "affable plantation owners” was none other than Anastasio Somoza, the brutal dictator whose family had run Nicaragua like their own private slave plantation for three generations, until being ousted in from power in 1979 after a bloody popular uprising led by the Sandinistas.

One of the LIFE spreads is a picture of the brothers hanging up hammocks to dry on their plane, with a caption explaining that "the boys and their bedding had got soaked when they slept out in a tropical shower” in Nicaragua, "where they interviewed the late President Somoza.”

The Blue brothers did more than just interview President Somoza, they went into business with his family, partnering up on several agricultural ventures, including cocoa and banana plantations, as well as a 100,000-acre ranch of some kind. The details are murky, but it seems the partnership continued until the very end of Somoza rule.

These are the same Somozas whose security forces were caught on camera executing an American reporter for ABC News in 1979, shooting him point-blank in the head as he lay on the ground face-down. That reporter had come to Nicaragua to cover the revolution. When American TV showed the reporter getting his brains blown out, that was the last straw forcing Carter to withdraw U.S. backing for the Somoza family.

Their hold on power collapsed, the Sandinistas took over Nicaragua, and the Blue brothers' business partners went into exile in the U.S. The execution of a nosy journalist wouldn't have interested the Blue brothers much, but losing their agricultural holding to a bunch of commie peasants wounded their pride. It's a wound that festers to this very day.

In 1961, four years after making the cover of LIFE magazine, the Blue brothers again made national headlines--this time, in connection with Communist Cuba.

It was another bizarre story, but the gist of it is this: Linden Blue was on his way to Nicaragua when, for some inexplicable reason, he decided to fly his private prop plane straight over Fidel Castro's Havana. This happened at a time of escalating tensions. The U.S. had just closed down its embassy in Havana and severed diplomatic relations. Meanwhile, Castro had advanced knowledge that the CIA's was planning its Bay of Pigs invasion, which was just a month away. Not surprisingly, as Linden flew over Havana, he was intercepted by a Cuban fighter jet, forced to land, and thrown in jail along with his sole passenger, a buddy/business partner who worked as an executive for a baby food company.

Here's a clip from a 1961 story in the Miami News published after their release 11 days later:

They had set out from Key West on March 24 In Blue's twin-engine private plane on a flight to Managua, Nicaragua, where Blue is partner in a banana plantation. [Donald] Swenson, executive for a baby food manufacturing firm, said he went along to see the plantation and possibly to enter into a business relationship with Blue. They were about 70 miles from Havana when Blue, piloting the plane, contacted the Havana airport by radio to ask permission to fly over the area on his way to Nicaragua. "About 20 miles from Havana, they ordered me to remain near the city at 8,000 feet,” Blue said. ”Shortly after that an American-made jet fighter appeared. He came very close once, apparently to check on our plane's identification marks." Next, Blue was ordered to land. I was in no position to argue about it," he said. Blue and Swenson were hustled away to a large house in the city. They soon learned that they were at the head-quarters of the Cuban secret police.

Linden Blue and his buddy Gerber were released on April 5. Less than two weeks later, the CIA launched the Bay of Pigs invasion--an operation in which Nicaragua's Somoza clan happened to play a crucial role, allowing the CIA to use Nicaragua as a base of operations. The Cuban exile "army” trained in Nicaragua, and part of their invasion was launched from there.

H'mmm, makes me wonder about that plantation business the Blue brothers were running in Nicaragua. Was it simply a cover for clandestine spook work? Or was it a legitimate business? Maybe it was both?

The Blue brothers are coy about their intelligence connections. In 2007, Neal told the New York Times that he and his brother were "enthusiastic supporters” of the CIA-run Contra army in the 1980s, a brutal death squad that terrorized Nicaraguan peasants and sabotaged infrastructure in order to destabilize the Sandinistas' rule. That raised an obvious question about intelligence connections; but Neal Blue "declined to discuss if they have worked for the Central Intelligence Agency.”

Wink, wink. Nod, nod.

Then, in 1982, Linden Blue, was appointed CEO of Beech Aircraft Corporation, which at the time had just been bought out by mega-military contractor Raytheon, the world's premier manufacturer of guided missiles.

Two years later, his brother Neal bought up most of the valley below Telluride and hatched plans to subdivide and turn the small ski town into a massive McMansion subdivision. The plan ultimately failed, but Neal fought with local residents for 25 years to push it through, even lobbying the Colorado's legislature to pass a retroactive law that would allow him carry out his plans--a law that was later struck down by Colorado's Supreme Court.

But the Blue brothers really came into their own after buying General Atomics from Chevron in 1986 for a reported $60 million.

At the time, General Atomics was a struggling company primarily involved in building civilian nuclear reactors, and losing out to bigger, badder nuclear behemoths like Westinghouse.

After packing their company's "advisory panel” with big names like Reagan's loopy Secretary of State, Gen. Alexander Haig, the Blue brothers began expanding into nuclear-related technologies: nuclear waste disposal, maglev trains and, most lucratively, mining and enriching uranium.

They acquired the largest known uranium deposit in the United States, located in New Mexico. They also bought a decrepit uranium processing facility in Oklahoma that had had a radioactive leak the size of Three Mile Island just a few years earlier. But General Atomics kept operating the leaky facility, cranking out specialized uranium metal used in fuel rods and armor-piercing munitions for five more years before finally shutting it down after the plant experienced yet another major release of radioactive material. An investigation found that ground water near the plant was 35,000 times above the legal limit, and that the company had known the plant was leaking radioactive waste but did nothing.

General Atomics also developed a massive uranium operation in Australia, where it owned one of the country's largest uranium mines. In 2001, it was discovered that the company had hired private spooks to infiltrate an Australian environment group that had been protesting one of its mines.

Here's the Australian branch of Friends of the Earth describing what happened:

The infiltrator, known as Mehmet, had previously infiltrated green groups as part of an undercover police operation before he moved into the private sector to set up his own security company, Universal Axiom. He also provided personal protection to visiting GA executives. When asked about the company's tactics, a Heathgate spokesperson said the company was privately owned and had a policy of not responding to media questions.

Neal Blue bragged to Fortune Magazine in 2008 that he had snapped up uranium deposits in Australia for nothing in the 80s, when uranium mining was still illegal in that country, "gambling” that a new government would eventually rewrite the laws and make the Blue brothers a lot of money--which of course they did.

”For our size, we possess more significant political capital than you might think,” Blue once told a defense trade mag.

Indeed.

That "political capital” is a big reason GA's Predator drones are now a household name.

A few years after buying General Atomics, Neal Blue set up a special "advanced technology projects” division in order to identify and develop undervalued military technology.

Such a venture required some serious connections and lobbying muscle, so Neal found the perfect man for the job: former Navy admiral Thomas J. Cassidy Jr.

Cassidy had a cameo role in Tom Cruise's "Top Gun,” a movie which was made with massive support from the U.S. Navy. Cassidy was a celebrity, but was also very experienced in navigating the halls of the DoD. A few years before he was hired by General Atomics, Cassidy had been disciplined in a major corruption scandal triggered by reports that the Navy had been buying ashtrays from Grumman Aerospace Corp for $659 a pop under his command.

So in 1992, Cassidy and the Blue brothers realized that locally-manufactured UAVs were gonna be the next big thing, and decided to get in early on the UAV racket. A decade later, their little company dominated the drone market, producing the cheapest and most dependable product.

To hear the Blue brothers tell it now, they all but invented the Predator drone. Neal told Fortune magazine in 2008 he got the idea to build drones decades ago, while fighting Sandinistas in Nicaragua.

Back then Blue was a Denver oilman and real estate investor who happened to spend a lot of time thinking about how to defeat communists. He was particularly interested in seeing the overthrow of the Soviet-backed Sandinistas, who had recently seized control of Nicaragua. He had known the Somozas, the ousted ruling family, from his cocoa and banana days, and, well, he hated Reds. Crippling the regime, Blue figured, was simple: just send GPS-equipped unmanned planes on kamikaze missions to blow up the country's gasoline storage tanks. "You could launch them from behind the line of sight,” he recalls matter-of-factly, "so you would have total deniability.” Blue pauses, leans back in his white-leather swivel chair, and quickly adds that he had nothing to do with any of the Reagan-era operations there - nor, of course, did he launch his own attack.

It's a nice story, except for all the bullshit.

The Predator drone was actually created by Israeli named Abroham Karem, who had helped design Israel's first drones for use in the Yom Kippur war. In the 1980s, Karem moved to Orange County and set up a small shop with DARPA funding to replicate and improve the technology here.

His company was called Leading Systems, and had already developed a working Predator drone prototype that was cheaper and more reliable than what good ol' boy defense companies like Lockheed Martin could crank out. Karem made an elegant and efficient product it, but it wasn't getting much love in the DoD.

It needed a power-salesman and a lot of money to grease the procurement process. And that's what the Blue brothers, and their man Cassidy, brought to the table.

"Behind its success in winning government contracts has been a formidable and at times controversial lobbying effort,” wrote the Financial Times.

H'mmm… "formidable and at times controversial” is one way of putting General Atomics' lobbying efforts. Another way would be to say the company flooded Congress with money.

A 2006 investigation by the Center for Public Integrity found that General Atomics was among the biggest sponsors of congressional trips, outspending other defense contractors by 50 times or more--and that's not counting the roughly $2.5 million a year it spends on lobbying.

San Diego-based General Atomics largely targeted congressional staff members, spending roughly $660,000 on 86 trips for legislators, aides and their spouses from 2000 to mid–2005, according to an analysis of travel disclosure records by the Center for Public Integrity, American Public Media and Northwestern University's Medill News Service.

While on trips to Turkey in 2004 and Australia in 2005 -- some valued at more than $25,000 -- staffers attended meetings with officials of foreign governments being solicited to buy the company's unmanned spy plane, the Predator.

Among those aides was J. Scott Bensing, chief of staff to Sen. John Ensign, R-Nev., a member of the Senate Armed Services Committee's Airland subcommittee. Two of his trips cost more than a combined $46,000.

Bensing said that he and his wife, Lia, went to Italy and Turkey in 2004 and Australia in March 2005 on the company's tab. His disclosure forms list more than $37,000 in transportation expenses and nearly $4,400 worth of meals for the two weeklong trips.

Bensing indicated on his forms that the Australia trip's purpose was to discuss "the international war on terror,” while the Turkey trip included discussions on "NATO interoperability and other international military issues.” However, other aides who went on the trips indicated that staffers also sat in on meetings with officials of foreign governments interested in buying the Predator and other robotic planes developed by General Atomics.

"I was not there to advocate [for General Atomics],” he said. "That was not our purpose. It certainly wasn't why I was there.” Bensing asserted that he did not go on the two trips to help sell aircraft. He said the meetings were focused on national security, and that if the Predator came up in conversation, it was because foreign officials raised the topic.

One of General Atomics' biggest fans was Rep. Randy "Duke” Cunningham, a Republican whose district included General Atomics headquarters in San Diego. Cunningahm's office took more than $50,000 worth of trips from 2002 to 2005.

In 2006, Cunningham got eight years for evading taxes and accepting a couple of million in bribes, including a house and a boat christened the "Duke-stir,” from a couple of defense contractors not connected with General Atomics. Cunningham was the poster boy for Bush-era defense corruption: He even worked out a bribe-scale which valued the bribe amount based on the size of contracts he secured for his clients.

While staffers denied their roles as drones salesmen, General Atomics' Admiral Cassidy was more honest, explaining that this was simply a sensible way of doing business: "[It's] useful and very helpful, in fact, when you go down and talk to the government officials to have congressional people go along and discuss the capabilities of [the plane] with them.”

Cassidy admitted that "Without congressional support in the beginning, I am not sure the Predator would have ever seen the light of day.”

Neal Blue explained this practice to the Center for Public Integrity in similar terms: "A somewhat smaller enterprise is at a disadvantage in competing with very large embedded defense companies. It became imperative upon us to find a better way … independent of the bureaucratic procurement grind.”

General Atomics does not disclose its financial information, but stats gleaned from public data show that they took in just under $5 billion from U.S. taxpayers from 2000 to 2009. Current annual revenue is estimated to between $600 million and $1 billion, with about 80 percent coming from government defense contracts.

Today, General Atomics dominates 25% of the UAV market--a market that will only keep getting bigger and bigger.

Recently, General Atomics tested a new stealth jet bomber drone that will compete with Lockheed Martin's RQ–170 Sentinel--the one that got hacked into by Iran's cyber-mullahs and redirected to land in Tehran.

I wanted to ask the Blue brothers about all of these things, given the still escalating controversy in this country about the use of drones, both abroad and here at home. I'd tried getting in touch with the Blue brothers through official channels, of course. But my request for an interview, or a tour of the base, was denied. Their press person explained that GA's owners are "very selective” when it comes to granting interviews. Which is why I'd come to the base in person, in the somewhat optimistic attempt to talk my way inside for a look around.

I didn't even make it to the gate.

The moment Dave and I step out of the car, two security guards materialize out of a trailer and come racing out of the gate towards the car, yelling.

"You can't stand here! You can't stand here!"

"Isn't this public property?" I ask, doing my best impression of a confused tourist.

"Yes, but you can't stop here. You have to move."

"Why? What is this place?"

I can't tell you that, sir. Please, sir. Move."

"I think they're from Securitas," explains Dave. "That's what the Pinkertons are called these days."

I slam the car into reverse, gunning the Mustang away from the base, back out into the desert. Finally we stop and I look left and right, ahead and behind, expecting to see a General Atomics' security goon bearing down us, ready to drape sacks over our heads and drag us to some private black site dungeon from which we'd never emerge.

But there's nothing. Not even a drone in the sky. Just a couple of vultures circling overhead.

America Keeps Honoring One of Its Worst Mass Murderers: Henry Kissinger

Fred Branfman, AlterNet — Tue, 16 Apr 2013 15:23:00 -0700

Including ten quotes that illustrate his megalomania and indifference to the deaths of untold numbers of civilians.

Henry Kissinger's quote recently released by Wikileaks,"the illegal we do immediately; the unconstitutional takes a little longer", likely brought a smile to his legions of elite media, government, corporate and high society admirers. Oh that Henry! That rapier wit! That trademark insouciance! That naughtiness! It is unlikely, however, that the descendants of his more than 6 million victims in Indochina, and Americans of conscience appalled by his murder of non-Americans, will share in the amusement. For his illegal and unconstitutional actions had real-world consequences: the ruined lives of millions of Indochinese innocents in a new form of secret, automated, amoral U.S. Executive warfare which haunts the world until today.

And his conduct raises even more fundamental questions: to what extent can leaders who act secretly ,illegally and unconstitutionally, lying to their citizenry and legislature as a matter of course, legitimately claim to represent their people? How much allegiance do citizens owe such leaders? And what does it say about America’s elites that they have honored a man with so much innocent blood on his hands for the past 40 years?

Mr. Kissinger's most significant historical act was executing Richard Nixon's orders to conduct the most massive bombing campaign, largely of civilian targets, in world history. He dropped 3.7 million tons of bombs** between January 1969 and January 1973 - nearly twice the two million dropped on all of Europe and the Pacific in World War II. He secretly and illegally devastated villages throughout areas of Cambodia inhabited by a U.S. Embassy-estimated two million people; quadrupled the bombing of Laos and laid waste to the 700-year old civilization on the Plain of Jars; and struck civilian targets throughout North Vietnam - Haiphong harbor, dikes, cities, Bach Mai Hospital - which even Lyndon Johnson had avoided. His aerial slaughter helped kill, wound or make homeless an officially-estimated six million human beings**, mostly civilians who posed no threat whatsoever to U.S. national security and had committed no offense against it.

There is a word for the aerial mass murder that Henry Kissinger committed in Indochina, and that word is “evil”. The figure most identified with this word today is Adolph Hitler, and his evil was so unspeakable that the term is by now identified with him. But that is precisely why it is important to understand the new face of evil and moral depravity that Henry Kissinger represents. For evil not only comes in the form of madmen dreaming of 1000 year Reichs. In fact, in our day, it is more likely to be committed by sane, genial and ordinary careerists waging invisible automated war in far-off lands against people whose screams we never hear, whose faces we never see, and whose deaths go unrecorded and unnoticed. It is critical to understand this new face of evil, for it threatens not only countless foreigners but Americans in coming years. And no one has embodied it more than Henry Kissinger.

The planes he dispatched came by day. They came by night. Remorseless. Pitiless. Relentless. Day after day, week after week, month after month, year after year. Most of the people below had no idea where the bombers came from, why their lives had been turned into a living hell. The movie "War of the Worlds", in which Americans are incomprehensibly slaughtered by machines is the closest depiction of what the innocent rice-farmers of Indochina experienced.

Hundreds of thousands of innocent human beings in Laos, Cambodia and Vietnam were forced to live in holes and caves, like animals. Many tens of thousands were burned alive by the bombs, slowly dying in agony. Others were buried alive, as they gradually suffocated to death when a 500 pound bomb exploded nearby. Most were victims of antipersonnel bombs designed primarily to maim not kill, many of the survivors carrying the metal, jagged or plastic pellets in their bodies for the rest of their lives.

Fathers like 38-year old Thao Vong were suddenly blinded or crippled for life as they lost an arm or leg, made helpless, unable to support their families, becoming dependent on others just to stay alive. Children were struck, lying out in the open, screaming, villagers unable to come to their aid for fear of being killed themselves. No one was spared - neither sweet, loving grandmothers nor lovely young women, neither laughing, innocent children nor nursing or pregnant mothers, not water buffalo needed to farm not the shrines where people had for centuries honored their ancestors and hoped one day to be honored themselves.

A farmer on the Plain of Jars in northern Laos wrote of being bombed by the U.S. in 1969 that "every day and every night the planes came to drop bombs on us. We lived in holes to protect our lives. I saw my cousin die in the field of death. My heart was most disturbed and my voice called out loudly as I ran to the houses. Thus, I saw life and death for the people on account of the war of many airplanes in the region of the Plain of Jars. Until there were no houses at all. And the cows and buffalo were dead. Until everything was leveled and you could see only the red, red ground."

A 30-year old mother wrote that "at that time, our lives became like those of animals desperately trying to escape their hunters. Our lives were confided to the Lord Buddha. No matter when, all we did was to pray to the Lord to save our lives."

A 39 year old rice-farmer wrote of the aftermath of a bombing raid: “The other villagers and I got together to consider this thing. We hadn't done anything, nor harmed anyone. We had raised our crops, celebrated the festivals and maintained our homes for many years. Why did the planes drop bombs on us, impoverishing us this way?”

Mr. Kissinger exulted to President Nixon over this bombing, telling him that "it's wave after wave of planes. You see, they can't see the B-52 and they dropped a million pounds of bombs ... I bet you we will have had more planes over there in one day than Johnson had in a month ... each plane can carry about 10 times the load of World War II plane could carry."

Although Mr. Kissinger claimed he was only bombing enemy troops, guerrilla soldiers were largely undetectable from the air. Investigating the bombing of northern Laos, the U.S. Senate Refugee Subcommittee concluded that "the United States has undertaken a large-scale air war over Laos to destroy the physical and social infrastructure in Pathet Lao (i.e., guerrilla) areas. Throughout all this there has been a policy of secrecy. The bombing has taken and is taking a heavy toll among civilians." These words apply to Mr. Kissinger's bombing throughout Indochina. The villagers of Indochina were not "collateral damage". They were the target.

Those who praise Mr. Kissinger for the opening to China but ignore his mass murder in Indochina shame human decency itself. By honoring Mr. Kissinger they dishonor themselves. And they are also blind to the careerist "Executive Branch mentality" he embodied, which poses a clear and present a danger to foreigners and Americans alike today. Adolph Hitler dreamed of conquering and Stalin of communizing the world. Mr. Kissinger destroyed millions of lives primarily to further his career by preventing a communist takeover while he held office. And it is this kind of institutional, bureaucratic mentality, combined with new machines of secret war, which threatens the humanity today far more than the crazed ideologies of the past.

In the end Mr. Kissinger failed, as the communists took over Indochina in the spring of 1975. The Thieu, Lon Nol and Royal Lao government regimes, which Mr. Kissinger propped up with so many tens of billions of U.S. taxpayer dollars, evaporated. The genocidal Khmer Rouge took over in Cambodia, which would not have occurred had Mr. Kissinger supported the neutralist Sihanouk and not illegally invaded Cambodia. But though Mr. Kissinger failed miserably in Indochina, he did in the end succeed in his principal goal. He emerged from the wreckage of Indochina with his reputation intact.

Even critics of Mr. Kissinger tend to use euphemisms about his actions for fear of losing their "credibility." But facts are facts. The truth is the truth, and euphemisms obscure it. It is a matter of fact not rhetoric that Mr. Kissinger bears a major responsibility for murdering masses of people in Indochina. He is a mass murderer.

What is most important about his mass murder, however, was not only that his order to Alexander Haig to undertake "a massive bombing campaign in Cambodia. Anything that flies on anything that moves" was clear evidence of criminal intent to avoid the laws of war protecting civilians, and that he would have been executed had the Nuremberg Judgment been applied to his blanket bombing of civilian targets.

It was that he conducted a new form of automated, secret and amoral warfare previously only imagined by George Orwell in 1984 when he described war as fought by machines waged by "very small numbers of people, mostly highly-trained specialists (waging war) on the vague frontiers whose whereabouts the average man can only guess at." When Richard Nixon decided, and Henry Kissinger executed, a plan to withdraw U.S. ground troops but seek to win by escalating war from the air, they brought into being a new age of automated war that inevitably, and cold-bloodedly, wound up killing large numbers of civilians.

Previous war-makers fomented hatred against the "Jewish scum", "gooks", or "Huns" they massacred. But neither Mr. Kissinger nor his subordinates had anything against the countless Lao, Cambodian and Vietnamese civilians they slaughtered. They simply did not regard them as human beings. They had no more significance for them than cockroaches or ants. It was not immorality but amorality, the murder of countless "non-people" whose existence as human beings was simply ignored. Though the people of the Plain of Jars wanted nothing from America except to be left alone, even this simple wish was denied them, as they were extinguished like flies out of indifference not malice.

An August, 1945 editorial in the London Observer eerily foreshadowed what Mr. Kissinger represented, and what such successors as David Petraeus and John Brennan embody today: "Albert Speer symbolizes a type which is becoming increasingly important in all belligerent countries: the pure technician, the classless, bright young man, without background, with no other original aim than to make his way in the world, and no other means than his technical and managerial ability. It is the lack of psychological and spiritual ballast and the ease with which he handles the terrifying technical and organizational machinery of our age which makes this slight type go extremely far nowadays. This is their age. The Hitlers and Himmlers we may get rid of, but the Speers, whatever happens to this particular special man, will long be with us."

Although Mr. Kissinger failed so miserably in Indochina, he did indeed display great ability in handling the "organizational machinery" of the U.S. Executive Branch -- so much ability in fact that his actions have become the template for most U.S. war-making today. This war-making is:

-- Undemocratic: Mr. Kissinger not only failed to obtain permission from Congress to bomb Laos and Cambodia, he did not even inform it he was doing so. The incredible fact is that a handful of U.S. leaders unilaterally dropped 3.7 million tons of bombs on Indochina entirely on their own initiative - as have U.S. officials today assassinated thousands of unarmed suspects throughout the Muslim world.

-- Unconstitutional: The very foundation of the Constitution is the principle that leaders may only legitimately rule with the "informed consent" of the people. But Mr. Kissinger not only failed to inform the American people or Congress about his bombing of Indochina. He has lied about it from the day he took office until today. Between January 1969 and March 1970, as he leveled the Plain of Jars, Mr. Kissinger's State Department denied it was even bombing Laos. And when reports from refugees made it impossible to deny the bombing, Mr. Kissinger's and his representatives continued to lie, denying that they bombed civilian targets. William Sullivan, close Kissinger ally and the former U.S. Ambassador to Laos, testified to Senator Edward Kennedy on April 22, 1971 "the policy of the U.S. is deliberately to avoid hitting inhabited villages."

-- Illegal: By failing to even notify Congress of his massive bombing, Mr. Kissinger broke domestic law. By systematically bombing civilian targets and refusing to observe laws seeking to protect civilians during wartime, he violated international law. Both conditions are true for U.S. drone and ground assassinations today.

-- Secret: The bombing of Laos and Cambodia, like that in Pakistan, Yemen and Somalia today, was conducted in secret. Even as U.S. officials first denied they were doing any bombing at all, and then that they were only bombing legitimate military targets, they refused to allow journalists to go out on bombing runs. The information about the bombing of civilian targets was classified and kept out of the hands of Congress, the media, and the American people.

-- Amoral: Like Mr. Kissinger, President Obama lied when he recently described his drone assassination program as “a targeted, focused effort at people who are on a list of active terrorists who are trying to go in and harm Americans, hit American facilities, American bases, and so on ". In fact, U.S. officials have admitted that most of their victims are unarmed suspects killed in "signature strikes" against people who names are not known. And the Bureau of Investigative Journalism has documented that hundreds of those killed by U.S. drone strikes are civilians. The victims of drone strikes are simply labeled "militants", denied their humanity as well as their lives.

What is most troubling to anyone with a conscience about Mr. Kissinger's new form of warfare is that, from a bureaucratic perspective, it worked. By keeping the human consequences of their war-making secret from Congress and the American people, the Kissingers, Petraeuses and Brennans have had a free hand to kill, torture, imprison and maim anyone they wish. They not only need not fear punishment for their illegal acts. Like Mr. Kissinger, who has grown wealthy on the blood of the innocents of Indochina, they can even look forward to being rewarded for them. We are taught as children that crime does not pay. Mr. Kissinger, who has earned tens of millions since the war ended on the blood of innocent Indochinese, is living proof that this is untrue.

The big question for Americans today is the degree to which this "Executive Mentality" will be directed against American citizens in the future. The prospects are not promising.

The U.S. Executive today has not only obtained permission from Congress to kill or imprison any American citizens they wish without due process. They have done so - murdering not only Anwar al-Awlaki but his 16 year son, also a U.S. citizen, while sitting in a café. The Executive under President Obama has undertaken unprecedented prosecution of U.S. whistle-blowers and journalists alike for revealing information officials have arbitrarily classified. Never before has the U.S. had an Executive Branch "Department of Homeland Security", which routinely spies on millions of Americans, and is working to paramilitarize police departments around the nation.

On a human level it is possible, even appropriate, to sympathize with Henry Kissinger. German Jew Heinz Alfred Kissinger was only 9 when Hitler took office, and only escaped at age 16 shortly before Kristallnacht, One can only guess at the multiple traumas and psychological damage he suffered. It is entirely understandable that he would develop a cynical view of the world and devote himself solely to gaining and holding power devoid of moral or ethical concerns.

But Mr. Kissinger is more than an individual. He is also a political and historical figure.

Future historians, public intellectuals and journalists who have nothing to gain by flattering Mr. Kissinger and ignoring his crimes against humanity will likely have a very different view of his legacy than today's opinion-makers.

They will likely see the U.S. opening to China as inevitable and pay relatively little attention to Mr. Kissinger's role in it. As the historian Gareth Porter has documented in detail, they will also see clearly that the terms of the Paris Peace Agreement he signed in 1973 were no different than what he could have obtained in 1969 - thus saving tens of thousands of American, and countless Indochinese, lives. And his winning the Nobel Peace Prize will be seen less as an honor he deserved than an indelible stain on those who awarded it to him.

No, what Mr. Kissinger will be most remembered for is cold-bloodedly ushering in a new age of undemocratic, unconstitutional, secret, criminal and amoral automated warfare, by a U.S. Executive Branch constrained neither by law nor elemental human decency.

After the war ended, former Defense Secretary Robert McNamara made a good-faith effort to understand what he did in Vietnam, issuing a mea culpa of sorts in his book In Retrospect. By contrast PBS Journalist Steve Talbot reported the following when he interviewed Mr. Kissinger: “I told him I had just interviewed Robert McNamara in Washington. That got his attention. He stopped badgering me, and then he did an extraordinary thing. He began to cry. But no, not real tears. Before my eyes, Henry Kissinger was acting. ‘Boohoo, boohoo,’ Kissinger said, pretending to cry and rub his eyes. ‘He’s still beating his breast, right? Still feeling guilty.’ He spoke in a mocking, singsong voice and patted his heart for emphasis.” As the Khmer Rouge were conducting genocide in Cambodia, Mr. Kissinger told the Thai Foreign Minister on November 26, 1975 that “how many people did (Khmer Rouge Foreign Minister Ieng Sary) kill? Tens of thousands … you should tell the Cambodians that we will be friends with them. They are murderous thugs, but we won’t let that stand in the way. We are prepared to improve relations with them. Tell them the latter part, but don’t tell them what I said before.”

Future historians will not only marvel at the depth of his pathology, but ask a basic question: what does it say about America and its elites that they honor such a man?

They will likely not have much interest in the man himself who was indeed, after all, little more than the man foresaw by the London Observer, a "classless, bright young man ... with no other original aim than to make his way in the world"characterized both by a "lack of psychological and spiritual ballast" and a skill in handling "the terrifying technical and organizational machinery of our age."

Kissinger the man will likely be remembered, if he is remembered at all, as the fellow best described by the novelist Joseph Heller in Good As Gold:

“It was disgraceful and so discouraging … that this base figure charged with infamies too horrendous to measure and too numerous for listing should be gadding about gaily in chauffeured cars, instead of walking at Spandau with Rudolf Hess ... Asked about his role in the Cambodian war, in which an estimated five hundred thousand people died, he'd said: ‘I may have a lack of imagination, but I fail to see the moral issue involved.’ Whereas another State Department official, William C. Sullivan, had testified: ‘The justification for the war is the reelection of the President.’ Not once … had Kissinger raised a voice in protest against the fascistic use of police power to quell public opposition to the war in Southeast Asia.
“In Gold's conservative opinion, Kissinger would not be recalled in history as a Bismarck, Metternich, or Castlereagh but as an odious shlumpf who made war gladly."

But what this insignificant man symbolized for future war-making will be of great significance to future historians. For, as the London Observer also correctly predicted Mr. Kissinger did indeed go far – taking America on a dark journey of war-making characterized by mass murder by machine, secrecy, lying, manipulation, betrayal of democracy and the U.S. Constitution, international criminality, overthrowing democratically elected governments and support for some of the world's most brutal and savage dictators. Yes, as he joked, he was skilled at engaging in "illegal" and "unconstitutional" activities. But the rest of humanity, and this nation, will be paying the price for this skill for generations to come.

** “Dollars and Deaths,” The Congressional Record, May 14, 1975, p. 14262.

TOP TEN KISSINGER QUOTES

1. Soviet Jews:“The emigration of Jews from the Soviet Union is not an objective of American foreign policy. And if they put Jews into gas chambers in the Soviet Union, it is not an American concern. Maybe a humanitarian concern.” (link)

2. Bombing Cambodia: “[Nixon] wants a massive bombing campaign in Cambodia. He doesn't want to hear anything about it. It's an order, to be done. Anything that flies on anything that moves.” (link) (Emphasis added)

3. Bombing Vietnam: "It's wave after wave of planes. You see, they can't see the B-52 and they dropped a million pounds of bombs ... I bet you we will have had more planes over there in one day than Johnson had in a month ... each plane can carry about 10 times the load of World War II plane could carry." (link)

4. Khmer Rouge:“How many people did (Khmer Rouge Foreign Minister Ieng Sary) kill? Tens of thousands? You should tell the Cambodians (i.e., Khmer Rouge) that we will be friends with them. They are murderous thugs, but we won’t let that stand in the way. We are prepared to improve relations with them. Tell them the latter part, but don’t tell them what I said before.” (from November 26, 1975 Meeting With Thai Foreign Minister.)

5. Dan Ellsberg: “Because that son-of-a-bitch—First of all, I would expect—I know him well—I am sure he has some more information---I would bet that he has more information that he’s saving for the trial. Examples of American war crimes that triggered him into it…It’s the way he’d operate….Because he is a despicable bastard.” (Oval Office tape, July 27, 1971)

6. Robert McNamara: “Boohoo, boohoo … He’s still beating his breast, right? Still feeling guilty. ” (Pretending to cry, rubbing his eyes.)

7. Assassination: “It is an act of insanity and national humiliation to have a law prohibiting the President from ordering assassination.” (Statement at a National Security Council meeting , 1975)

8. Chile: “I don't see why we need to stand by and watch a country go communist due to the irresponsibility of its people. The issues are much too important for the Chilean voters to be left to decide for themselves.” (link)

9. Illegality-Unconstitutionality: “The illegal we do immediately. The unconstitutional takes a little longer.” (from March 10, 1975 Meeting With Turkish Foreign Minister Melih Esenbel in Ankara, Turkey)

10. Himself: “Americans like the cowboy … who rides all alone into the town, the village, with his horse and nothing else … This amazing, romantic character suits me precisely because to be alone has always been part of my style or, if you like, my technique.” (November 1972 Interview with Oriana Fallaci)

Fred Branfman exposed the U.S. Secret Air War against Laos while living there from 1967-1971, and edited Voices From the Plain of Jars: Life Under An Air War, the only book to emerge from the Indochina war written by the villagers who comprised 95% of the population. The book will be reissued by the University of Wisconsin Press on May 31, 2013.

War on Whistleblowers: How the Obama Administration Destroyed Thomas Drake For Exposing Government Waste

Marcy Wheeler, AlterNet — Mon, 15 Apr 2013 14:43:00 -0700

When the NSA wasted billions on a government contractor, Drake tried to do something about it. That was his first mistake.

To order a free DVD of the documentary, War on Whistleblowers, click here.

When Thomas Drake, then an official at the National Security Agency, realized that the agency’s decision to shut down an internal data analysis program and instead outsource the project to a private contractor provided the government with less effective analysis at much higher cost, he tried to do something about it. Drake’s decision to join three other whistleblowers in asking the agency’s inspector general to investigate ultimately made him the target of a leak investigation that tore his life apart.

In 2005, the inspector general of the Department of Defense, of which NSA is a part, confirmed the whistleblowers’ accusations of waste, fraud and security risk.

Earlier this year, former NSA Director Michael Hayden even conceded that TrailBlazer, the program for which the NSA paid over $1 billion to the Science Applications International Corporation, had failed. The agency, after killing its own program (called ThinThread) “outsourced how we gathered other people’s communications,” he said in response to a question from investigative journalist Tim Shorrock. “And that was a bridge too far for industry. We tried a moonshot, and it failed.”

Nevertheless, Drake’s efforts to expose that waste and abuse would ultimately lead to his being charged under the 1917 Espionage Act -- a law intended for the prosecution of spies, not whistleblowers.

Drake, a subject of a new documentary, War on Whistleblowers: Free Press and the National Security State, could have been put away for the rest of his life. “Speaking truth to power is now a criminal act,” Drake told filmmaker Robert Greenwald.

The investigation that would ensnare Drake began in 2006, under the Bush administration. But he wasn’t charged until 2010, when the Obama administration accused him of providing information to Baltimore Sun reporter Siobhan Gorman. In 2006 and 2007, she wrote a series of articles on NSA inefficiencies sourced to as many as 18 people, including Drake, who contends that he did not provide any classified information to her.

Rather than charging him with leaking classified information, the government charged him with retaining classified information. Over the course of the investigation, however, the government admitted that some of the documents in question had subsequently either been declassified or were never classified to begin with. Between that embarrassing revelation and the attention of good government groups, the case against Drake fell apart.

In 2011, the government dismissed all espionage-related charges against Drake, and he pleaded guilty to one misdemeanor charge: unauthorized use of a government computer. The judge in the case, Richard Bennett, said the case against Drake “doesn’t pass the smell test,” when he sentenced him to probation. Today Drake works at an Apple retail store rather than serving the country in a high-level national security role.

In a speech at the National Press Club last month, Drake talked about being charged with a crime originally targeted at people who sold sensitive information to our enemies.

“When you’re painted with the Espionage Act, it’s the worst thing,” Drake said, “because you’re immediately put into the same category historically as the Aldrich Ameses of the world, or the [Robert] Hanssens of the world -- the real spies.”

“That’s how that World War I statute was originally designed,” Drake continued. “Troubled as it is, in terms of the Constitution, it was designed to go after spies, not truth-tellers, not whistleblowers, and not people having contact with the press. It was not designed for that. But that’s what it’s turned into.”

Equating Whistleblowing With Spying

Thomas Drake’s prosecution is just the most egregious of a series of cases the Obama administration has pursued against whistleblowers. While a number of the cases were initiated under the Bush administration, the Department of Justice under President Barack Obama has used the Espionage Act far more expansively than his predecessors. All told, Obama’s DOJ has prosecuted six whistleblowers and a researcher under the Espionage Act (in addition to Drake, the Obama administration has charged Shamai Leibowitz, Jeffrey Sterling, Stephen Jin-Woo Kim, Jeffrey Sterling, Bradley Manning, and James Hitselberger).

“The government, backed by the national security state influence, is using its powers and influence to threaten, scare and try to silence whistleblowers and journalists,” said Greenwald, whose film is a joint project with the War Costs project of the Brave New Foundation, which he founded. “Using its unlimited legal and financial resources the effort to scare [people] into silence even before going through the judicial process is a serious miscarriage of justice and democracy.”

The government effectively maintains that sharing information about American policies with the American public is as bad as secretly dealing top-secret information to one of our enemies.

In both the Sterling case, in which a former CIA officer allegedly provided information on a botched operation targeted at Iran, and the Manning case, in which Bradley Manning leaked information to WikiLeaks, the government has even said as much.

In the Sterling case, the government argued that providing information to the New York Times was “more pernicious than the typical espionage case where a spy sells classified information for money” because by just giving information to the press, “every foreign adversary stood to benefit from the defendant’s unauthorized disclosure of classified information.”

In the Manning case, the government justified charging Manning with “aiding the enemy” -- a charge that can carry the death sentence -- by contending that passing information to either WikiLeaks or the Times still amounted to indirectly handing information to al Qaeda.

And it increasingly appears the government is extending that logic -- whistleblowing equals espionage -- in its investigative approach.

The government’s investigation of Drake began not for his role as a source for the Baltimore Sun series, but because it was searching for sources for the devastating 2005 New York Times story, broken by James Risen and Eric Lichtblau, revealing the Bush administration’s widespread use of warrantless wiretaps.

Drake was not a source for that story; he wasn’t even “read into” the program. However, the FBI appears to have identified Drake, the former NSA whistleblowers with whom he had complained to the inspector general, and Diane Roark, a former House Intelligence Committee staffer, as people who had complained internally about ThinThread and TrailBlazer, as related programs. Once they did so, the FBI interpreted actions taken to submit the IG complaint as well as information given to the Intelligence Committee -- which has oversight in such matters -- as proof they were leaking classified information about ThinThread and TrailBlazer.

The investigation clearly ignored the extensive whistleblowing about ThinThread -- whose rejection by NSA, Drake says, laid the groundwork for the warrantless wiretapping that the Bush administration initiated after the terrorist attacks of September 11, 2001.

An affidavit justifying a December 2007 warrant for Drake’s emails makes almost no mention that Drake and his colleagues were sharing information, in large part, in an effort to report fraud, waste and abuse -- waste the NSA Inspector General (and, ultimately, Congress) affirmed. Instead, it suggests Drake and the people with whom he was accused of conspiring were in search of profit. While the affidavit treats with skeptism their views that ThinThread performed better than TrailBlazer, it doesn’t appear to mention that the inspector general had investigated the issue and confirmed their views. It presents Drake’s printing of specifically unclassified documents as suspicious: “Drake was then seen rolling up [unclassified] documents ... and placing the documents in the glove box of his vehicle, where they would not be visible to others,” the affidavit alleges, as part of the case for probable cause.

Fishing Expedition

Once the FBI discovered a group of people who had warned the appropriate congressional oversight committee, as well as the Pentagon, that NSA had made costly, ineffective choices, the bureau kept digging into their lives until it found something.

“My life was turned upside down.” Drake said at his National Press Club speech.“I know for a fact that everything you could find out or anything you could possibly imagine in your life -- any transaction, all your e-mails, any and all subscriber information with any concern, including telecommunication concerns -- was all exposed to the government. Because they were looking for what was necessary to indict me.”

When the government designates whistleblowers as espionage targets, Drake said in an interview, that designation gives them “free rein to tear your life apart.”

Drake and most of the others charged by the Obama administration under the Espionage Act still either worked directly for or were contracted to the government at the beginning of the investigation, which means the government had broad access to information on them as part of their security clearance. Then the investigation proceeded using Title III (criminal, not intelligence) warrants.

But for investigative targets who don’t hold a security clearance, the label “espionage” may serve to give the government the same kind of investigative license it has with clearance holders.

Once the attorney general deems an investigation to be a counterintelligence (that is, espionage) probe, the government gains access to a whole set of secretive investigative tools, such as National Security Letters, which require recipients, such as telecom companies, retail outlets and even libraries, to turn over records of a target’s transactions -- without notifying the target. Other tools include orders, authorized under Section 215 of the USA PATRIOT Act, to turn over business records, up to and including cell phone GPS data. These tools effectively allow the government to camp out on someone’s life -- read their e-mails, search their dwellings and computers, review their financial information -- until the government discovers evidence of a crime.

Is Supporting WikiLeaks a Crime?

That may be what happened with WikiLeaks. On Dec. 6, 2010, Eric Holder confirmed what had been reported a week earlier in the media: among other theories, DOJ was considering prosecuting WikiLeaks under the Espionage Act. Holder announced this at the beginning of the investigation, not after finding evidence that anyone from WikiLeaks had solicited information from Bradley Manning.

In the same comments, Holder tied such theories to aggressive investigative techniques: “I personally authorized a number of things last week and that's an indication of the seriousness with which we take this matter and the highest level of involvement at the Department of Justice.”

In a statement before his court martial on February 28, Bradley Manning insisted that no one had solicited him to send information. “The decisions that I made to send documents and information to [WikiLeaks] were my own decisions, and I take full responsibility for my actions.”

Not long after Holder made his statement, the government reportedly reached the same conclusion. Yet the government continues its investigation into known associates of WikiLeaks. It appears that without having acquired any information showing evidence that WikiLeaks solicited the information in question, the government labeled WikiLeaks a spying entity, allowing the government expansive investigative powers.

To be clear, any investigation of Julian Assange -- who is not an American citizen and not in the US -- could easily use such tools. But to pursue, in the same heavy-handed way, any Americans involved, the “espionage” designation provides a very valuable tool.

Jacob Appelbaum, an American who is a security researcher and volunteer for WikiLeaks, has been heavily surveilled for two and a half years in actions apparently related to the WikiLeaks investigation. He has been stopped and interrogated at borders more than four times, subjected to physical surveillance, and had his communication metadata collected by administrative subpoena. The information collected ranges from the unique identifier assigned to every Internet user, the identifying number assigned to one’s Internet provider, cell phone service provider, general local information, phone numbers of recipients of the target’s calls and texts, e-mail addresses to which communications were sent, and more. And, the FBI once hinted, a National Security Letter was likely served on his Gmail account. Appelbaum has also talked about the danger the investigation has done to those associated with him, which in his case includes democracy activists in authoritarian countries.

Guilt By Association

The other thing that comes with some of these counterintelligence investigative techniques is a very expansive standard for collection: information need only be “relevant to” an investigation to require a third party to turn over the information requested by the government. In this way, the government can also collect information on associates of a whistleblower who may have no evident ties to a leak or crime. This permits the government to collect personal information on associates of a target or whistleblower, on the theory of guilt by association.

In Drake’s case, the government, using ordinary Article III search warrants, investigated everyone who had ties with him, Drake said in our conversation, undermining their First Amendment right of assembly.

“Everybody that was associated with me, either because they used to work for me or had links to me or had ties to me by mere association -- assembly, that freedom to do so under the First Amendment -- were investigated, were interrogated,” Drake said. “And some of those same people lost their jobs and their livelihood because of their association with me. Mere association meant they were guilty. And they were going to be punished -- punished -- because of that association.”

Worse may have happened in the WikiLeaks investigation. In response to a Freedom of Information request from the Electronic Privacy Information Center for information on investigation into supporters of WikiLeaks, the government refused to turn over information, in part, because it was statutorily prohibited from doing so. Yet it wouldn’t reveal the statute in question, because “to disclose which statute or further discuss its application publicly would undermine interests protected by [the ongoing investigation into WikiLeaks], as well as by the withholding statute.”

The government went so far as to plead with the judge not to reveal the statutes under which the government was investigating WikiLeaks supporters, writing: “Defendants respectfully request that the Court not identify the Exemption 3 statute(s) at issue.”

That the government clearly doesn’t want to reveal what statutory theories it is using to investigate not just Bradley Manning, but mere supporters of WikiLeaks, strongly suggests it is relying on one of the national security statutes that would be triggered by an espionage investigation, which would come with a gag order.

Your Data in a Driftnet

The government has three other relatively new tools it could wield against whistleblowers.

As the ACLU’s senior policy counsel Mike German pointed out in an interview, the government’s compilation of massive databases of information on U.S. persons data makes it possible to find evidence of “wrongdoing” on a person as soon as they expose themselves as whistleblowers. These databases are assembled through what is known as a “driftnet” process, where the government just collects everybody’s metadata, much as the fishing industry uses mile-long driftnets to catch everything that wanders into the net.

“A big part of the problem of the driftnet collection is that the information just sits in a pool waiting for a reason to exploit it,” German told me. “So whistleblowers are at great risk because, as they used to say in the FBI, no one is ‘administratively pure.’ Once a person becomes a whistleblower, agents have deep databases they can reach into to find anything that justifies firing them.”

Additionally, in 2011, the FBI changed its Domestic Investigations and Operations Guide to make it easier to identify any government officials who might be talking to the press. Previously, the government had required attorney general approval before accessing a journalist’s communications. But with the new DIOG, the FBI held that the policy only applied to journalists’ communications accessed via a search warrant. As the DIOG makes clear, the FBI asserts the right to access a journalist’s toll records (a record of everyone a person has called or e-mailed) using National Security Letters. And since those aren’t warrants, they don’t fall under the previous policy.

While the DIOG redacts most of the details about under what circumstances FBI agents can use NSLs to get journalists’ contact information, it makes it clear it is permissible in at least some situations. “If the NSL is seeking telephone toll records of an individual who is a member of the news media or news organization … there are no additional approval requirements other than those set out in DIOG Section 18.6.6.1.3.”

In other words, even as the government has increasingly been targeting whistleblowers as spies, it has made it easier -- potentially far, far easier -- for law enforcement to access the contact information of journalists the government deems to be witnesses, via their communication with sources, to a “crime.”

Then, last year, the director of National Intelligence added a question to the polygraph personnel with security clearances would undergo, that asks specifically about contacts with “unauthorized recipients,” including the media. As with Drake, this raises the likelihood a national security official will be fired solely for sharing unclassified information with the press.

The effect of demonizing whistleblowers and throwing invasive investigative techniques at both the whistleblowers and journalists who report on them is to sow fear.

“This arbitrariness in enforcement serves as a serious deterrent to whistleblowing because all employees know that if you become a target they will find something, even though all other agents who engage in the same act or omission aren’t punished at all,”said the ACLU’s German.

The Obama administration has set out to brand those who share information publicly as spies, even asserting sharing of information with the public is worse than sharing it with our worst enemies. But underneath that demonization, there’s an entire apparatus of invasive investigative tools that mean any national security insider can have his or her life ripped apart, under the guise of law, as retaliation for trying to expose wrongdoing.

To order a free DVD of the documentary, War on Whistleblowers, click here.

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