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NARRATIVES, NOT IDEASMcCain's Contradictory, Fearful Vision of the Next Four YearsJames S. Henry

Outside the Republican convention hall, Twin City cops and National Guardsmen in full-scale battle gear were arresting credentialed journalists like Amy Goodman and pepper-spraying peaceful demonstrators -- though you didn't hear much about that from the respectable TV commentators who were safe inside, battling balloon drops.   

Inside the hall, we were treated to an odd combination of "Naughty Librarian" Gov. Sarah Palin, John McCain trying for the nth time to appear natural while reading the teleprompter and bashing his own party, and 2380 raucous Republican delegates -- 1.5 percent black, 5 percent Hispanic, 32 percent female,  80 percent over 50, and nearly 100 percent over-fed  -- trying to appear jubilant, grinding to the heavy-metal rhythms that someone in the RNC hierarchy must have thought were a cool idea.   

We also had yet another recapitulation of the Arizona Senator's horrific five years in a POW camp, after being shot down on his 23rd mission over Hanoi back in 1967.

Indeed, if McCain somehow manages to win this election, he will have no one more to thank than Nguyen Van Dai, the 68-year old retired  Vietnamese colonel who actually launched the SAM missile that downed McCain's A-4 Skyhawk on October 27, 1967.

In any case, after watching the Republican Convention from mind-numbing start to finish, it is now crystal clear that,  apart from McCain's 41-year-old combat narrative -- supplemented by the less familiar narrative about Palin's decade-long  battle to combine procreation, small-time government, and the Assembly of God's "Plan for Alaska" -- the Republican Party has become the equivalent of the US housing industry.

It is intellectually bankrupt, with almost no new ideas. As former Reagan speech writer Peggy Noonan correctly put it, "They went for this, excuse me, political bullshit about narratives."

Worse than that, the Republican Party has also turned its back on many of its old favorite best ideas and brand values -- for example,  "small government," "balanced budgets," "non-intervention," "environmental protection," and "the US Constitution."

Palin's first 15-minutes of fame temporarily blinded many commentators  to this basic fact.  But even the most faithful die-hard Republican strategists now agree that, apart from the novelty of her Bat Mitsvah,  this abbreviated convention was a gigantic, expensive messaging mess -- and, on balance,  a gift to the hapless Democrats -- who are otherwise still fully capable of losing this race, even with a full-scale political and economic gale at their backs.

We'll explore the numerous contradictions in McCain's program below.

(c) SubmergingMarkets, 2008

CONTRADICTIONS EVERYWHERE

I. CHANGE WE CAN BELIEVE IN?

Obviously McCain is trying to jump on the "party of change" bandwagon. This is hardly a strategic insight,  given overwhelming popular discontent with the "country's direction" and Obama's success with this theme.

On the level of practical policies, however, it is a little late. 

Indeed, it has really been McCain's policy team that has been doing most of the "changing." 

>For example,  McCain has adopted the idea, which he once opposed,  of extending Bush's tax cuts for corporations and the rich -- the $10 trillion long-run cost of which  is even larger than th $7 trillion that Bush's cost.

Even if we abolish all future Congressional "earmarks," this scheme would cause the US deficit to soar even higher than its record $500 billion current level.

If we have learned anything from the last eight years, it is that such tax cuts don't pay for themselves or reduce government spending; they just produce larger government deficits. 

>McCain's gone completely quiet on the constitutional issues of torture, closing Guantanamo, and illegal surveillance.

To some extent so has Obama. But these were supposed to be the kind of "vintage maverick" issues where McCain spoke truth to power.

>He's got nothing to offer on the deepening economic recession or the national housing crisis, beyond more of the same.

His close friend former Senator Phil Gramm has resigned as Co-Chair of the campaign, but he is still likely to be named McCain's Secretary of the Treasury. 

Yet he is a leading banking industry shill and an opponent of tougher regulation, whose efforts helped contribute to the lax lending policies that have produced the joint housing/banking crisis.

> McCain's ideas about privatizing education, health insurance, Medicare and Social Security are all warmed- over versions of the same proposals the Republicans have tried and failed to implement for over a decade, despite their control of Congress for much of this period.

Especially with the new, probably Democratic-controlled House and Senate, these proposals will be dead on arrival. We will not have "change," but four more years of stasis.

> McCain's only ideas for solving the energy crisis are (1) drilling offshore or in Alaska, and (2) building more nuclear power plants.

Regardless what one thinks of them, these two tactics would both take years to have any impact.

Even if they could overcome the substantial state and federal regulatory obstacles in their way,  they would not produce any additional energy for at least 10 to 12 years.

In contrast, conservation and alternative energy sources like wind and solar produce benefits very quickly.   

> McCain has nothing interesting to say about a whole host of pressing international economic issues, including the faltering WTO round, addressing global poverty, and reviving the global Kyoto accords on the environment.

>On the question of Iraq,  McCain still opposes the idea of a definite timetable for withdrawal, which even the Iraqi Government now supports.

> On the questions of Iran and Georgia, McCain has sounded even more aggressive than VP Cheney, who wisely did not even bother to attend his own Party's convention.

II. "ANTI-WASHINGTON?" 

At least since Barry Goldwater, the Republican Party simply can't get enough of portraying itself as "outside the Beltway," the underdog from the hinterland, and the victim of some vast liberal media conspiracy.

A visitor from another planet might be surprised to learn that  the Republican Party has actually won the White House 9 out of 16 times since 1948. And John McCain, in particular, has been a member of Congress since 1982.

Furthermore, it also controlled the US House of Representatives from 1996 to 2006, and the US Senate from 2000 to the present, with enough seats to prevent any Democratic initiatives.  It  has of course controlled the White House from 2000 to the present. Along the way, it has also taken control of the US Supreme Court and the leadership of key "independent"  federal agencies, like the Federal Reserve.

The Republican Party has also recently compiled a record number of convictions for illegal lobbying activities -- indeed, shortly before McCain was deliver his acceptance, the legendary White House intimate Jack Abramoff was receiving a four-year jail sentence for corruption and bribery. 

The only "change" we can be sure of will come when -- as now appears likely -- the Republican Party  loses control of all these institutions this November.

III.  A BIPARTISAN MAVERICK? 

As noted above,  McCain has actually become less and less of a maverick, and more and more partisan, as time goes by.

The night before his own address to the convention, his own VP candidate could not have been more partisan in her feral attacks on Obama.

Indeed, just by nominating this hard-right, anti-choice, anti-gay, anti-environment, anti-libertarian for VP despite her self-evident lack of credentials,  rather than choosing any number of more talented, moderate Republican women (or men), McCain has clearly helped to polarize the national debate.

This puts paid to all the rhetoric about bipartisanship in his acceptance speech.

IV. OPPOSED TO BIG BROTHER? 

We were amazed and delighted to hear Mitch Romney describe his party not only as "the party of ideas," but as being opposed to "Big Brother."   

It seems that Mitch should stick to pillaging troubled companies, his forte. Is he really not aware that it is the Bush Administration that has been conducting illegal wiretaps and e-mail surveillance on millions of Americans during the last six years?

V. NATIONAL SECURITY EXPERIENCE? WHERE'S OSAMA? 

 To listen to McCain, Bush, Giuliani, Romney, and Co., our visitor from another planet would probably conclude not only that 9/11 did  not happen on the Republican Party's watch, but also that the Iraq War was eminently justified -- indeed, in candidate Palin's memorable words, it is "a task from God".

According to the rhetoric at the Republican convention, the war against Osama Bin Laden and  the Taleban in Afghanistan and Pakistan (remember them?  the original perpetrators of 9/11?)  must also be going so well that we can:

(1) Afford not to mention Osama or Afghanistan at all;

(2) Afford to extend NATO to Georgia and the Ukraine, right on Russia's borders;

(3) Afford to call Iran "the biggest supporter of state terrorism," and threaten it  with military force! 

When it comes to national security, Republicans do have this praiseworthy tendency to recall over and over again great moments of courage and honor that occurred long ago -- say 41 years ago.

But when it comes to all the shameful events that have happened on their own watch in just the last eight years,  they become forgetful.

In my experience, Republicans are systematically incapable of apologizing for anything, even when they are grossly in the wrong.  Indeed, that is a pretty good litmus test for a Republican.

>Lest we forget, Osama bin Laden, still safely ensconced in Pakistan (our putative ally), was the author of 9/11. Next week we'll commemorate the 7th anniversary of that date -- why has he not been brought to justice in seven years?

> Lest we forget,   it was the Bush Administration -- especially Condi Rice and George Tenet -- that ignored numerous signals that allowed 9/11 to happen.

> Lest we forget, Mayor Giuliani was the genius who located the World Trade Center's  emergency command post right across from the Twin Towers with a diesel fuel tank (even though they'd been an obvious target since at least 1993),  ordered the cheap Motorola radios for NYC first- responders, and recommended the mobbed-up former Police Commissioner Bernard B. Kerik to be head of the Department of Homeland Security. 

>Lest we forget, it was the Bush Administration -- with the so-called "maverick/military expert" John McCain toeing the party line, unlike Obama -- that took us to war in Iraq on a pack of lies.

Lest we forget, it was the Bush Administration that, once we got there, completely mismanaged the war effort -- for example, by choosing Kissinger protege  L. Paul Bremer to administer the situation.

Bremer's very first decision was to disband the Iraqi Army -- alienating all those thousands of Sunnis who have recently become our best friends in the "Awakening,"  and setting the stage for Al Qaeda's first real entry into the country -- on US coat-tails!

THE IRAQ/ AFGHAN CONUNDRUM

Finally, returning once more to the question of Iraq, it seems as if the Republican Party is trying to pull off the same game it played with 9/11.

Rather than talking about responsibility for the original fiasco, the Republicans want to focus on claiming credit for what transpired after the event. 

In the case of 9/11, they took credit for managing the crisis after the attack, ignoring their utter mismanagement before.

In the case of Iraq, they are even more cynical:  McCain and the Republicans like to take credit for the progress since January 2007, ignoring the nearly four years of disastrous management after the March 2003 invasion.   

In this spirit, McCain also likes to talk about the "surge" a lot, which he claims is a big success. 

The surge was not his idea, but he takes credit for having supported it ever since General Petraeus and President Bush first introduced it in early 2007. 

Obama, he says,  opposed it,  preferring a timetable that  would have "lost the war."

In fact Obama has never insisted on such any such timetable.

He did, however, courageously oppose entering Iraq in the first place, which would have made the surge unnecessary.

In retrospect,  Obama's fundamental political and military judgment looks pretty astute, compared with "experienced" McCain.

If Obama had been in charge, we might have saved $2 trillion and thousands of young lives.

On the other hand, in McCain's case, despite saying that he "hates war," he has yet to ever oppose one.

He still actually believes, like George W. Bush, that the US made a terrible mistake by withdrawing from Vietnam in 1973! 

True, if we'd followed Obama's course, Saddam & Co. might still be in power, just like Kim Jong Il or Robert Mugabe or the tyrants in Burma (and China!)   

But Saddam would not have any more "weapons of mass destruction" than he ever had. Under the pressures of continued isolation, backed by the UN, his own people might have overthrown him, or he might have died of a heart attack. We can never say.

What is clear is that the main reason that the surge has "worked" is that we are now working closely with many of Saddam's former supporters among the Sunni "Awakening," who have turned on al Qaeda.

The Sunnis have "awakened" partly just because we finally decided to pay them, and partly because they got sick of being ordered around by these fanatical extremists -- who'd never taken root in Iraq before the US invaded the country, outraged the local population, and created a seedbed for insurgency.

It is also because many Shiites have wisely decided that the fastest way to get the US out of Iraq is to quiet down, supporting the Maliki government, probably with the backing of Iran.

Ironically, for someone so concerned about Iran's supposed threat to the region, McCain does not acknowledge the fact that the Iraq invasion, and the continued US presence there,  have only strengthened Iran's hand.

So it is as misleading for McCain and the Republicans to take credit for the surge as it is for them to take credit for fighting the (very incomplete) war against al Qaeda and the Taleban in Afghanistan, in the wake of 9/11.

Once again, however, if you have no original ideas or solutions of your own, it is tempting to concentrate on telling stories about the past.

(c) SubmergingMarkets, 2008

ANOTHER CONJUGAL DICTATORSHIP?Twenty Years Later, Near-Martial Law Returns to the PhilippinesJames S. Henry

At first glance, this week's news from the Philippines is even more dismal than usual. But the deepening crisis also discloses some interesting possibilities for fundamental change.

The bad news has arrived in bulk. First, the search for more than 1050 victims of the recent Leyte mudslide has been called off without any progress.

Second,  President Gloria Macapagal-Arroyo has seen fit to declare a state of emergency -- 20 years to the day after "People's Power"/ EDSA I brought an end to the Marcos dictatorship on February 25, 1986.

Officially, Madame Arroyo attributed her "Proclamation 1017" -- an open-ended declaration of a "national emergency" -- to the supposedly imminent but actually rather vague threat of a coup,  purportedly organized by a cabal of dissident officers, politicians and professors -- in alliance, she claimed, with the Communist Party of the Philippines (!).

Technically, this was not a full-fledged declaration of martial law.  But for those on the ground the distinction is theoretical.  At Arroyo's direction, the police moved quickly  to round up (without warrants) at least three Congressmen, a university professor, 25 protestors at an anti-Arroyo rally, and a half dozen senior miltary and police officers -- including a West Point graduate and and a former Chief of the National Police. All permits for political rallies were cancelled. A leading opposition newspaper was raided. 

Meanwhile, Arroyo produced no hard evidence that any members of this disparate group had done anything more serious than join former Presidents Corazon Aquino and Fidel Ramos  in calling for her to resign.

Even if there had been a coup attempt in the offing, that could have been dealt with under existing laws -- as Aquino did with at least seven coup attempts during her years in office, without requiring emergency powers.

FULL CIRCLE?

In this respect, to long-time Philippines observers,  Arroyo's declaration is reminiscent of President Ferdinand Marcos' 1972 "Proclamation 1081." That was also justified by a fairy tale  -- a bogus assassination attempt against Defense Minister Juan Enrile that, years later, turned out to have been a theatrical production by his own security guards.

It is likely that Arroyo's move is a desperate attempt to head off growing popular demands for her ouster.

Left unchecked, those demands might well have culminated in a huge "People Power" rally this weekend, demanding her resignation.

This popular movement is not based on a disgruntled cabal, much less on some left- or right-wing plot.

Rather, it is based on widespread,  rational disgust with President Arroyo's dismal performance since taking office in 2001.

• Despite rising levels of economic growth -- 3-6 percent per year since 2002 -- the Philippines "oligarchy" remains firmly in control, less than 10 percent of the population perceives that its economic situation has improved under Arroyo, and  more than 71 percent of the population now considers itself poor.

• In yet another striking parallel to the "conjugal dictatorship" of Ferdinand and Imelda, Arroyo's own husband Mike has been forced to live in exile because of his involvement in several gambling and corruption scandals.

• Arroyo is widely believed to have stolen more than 1 million votes in the May 2004 Presidential election, a charge that was only strenghtened by the embarrassing "Gloriagate" tapes. Her position has only been preserved by virtue of her party's dominance in Congress, and her control over the 15-member Philippines Supreme Court, which she has managed to pack with 9 appointments.

Even before the state of emergency, President Arroyo's popularity rating had fallen below that of any of the last four Presidents -- including Joseph Estrada, who was ousted by popular demand at EDSA II in January 2001. Indeed, by January 2006, "net satifaction" with Arroyo (% satisfied minus % dissatisfied)  had reached -30%, a record low. And well over half of the population simply want her to resign -- ala Marcos and Estrada.

US INTERVENTION?

In this situation, one might have hoped that the Bush II Administration would have followed in the footseps of Reagan/ Bush I, circa 1985-86,  and strongly "suggested" to Madame Arroyo that she "do the right thing" and board a plane to Hawaii -- not just for the sake of democracy, but also for the sake of the US' long-term relationship with the Philippines people.

Unfortunately,  this kind of intervention is unlikely,  at least for the moment. 

• President Bush is much more concerned about the Philippines' contribution to the "war on terror" than its domestic  problems. Arroyo has been very accomodating on the "terror war"  front.

• Indeed, throughout Southeast Asia, Bush and Secretary of Defense Rumsfeld have also been turning the other cheek to mis-democracy  -- resuming arms sales to Indonesia's horrific military, indulging the Prime Minister of Thailand in his offshore companies, and so forth. Arroyo is just another example.  
  

• Arroyo has also carefully cultivated key US interest groups. She's Bill Clinton's former classmate at Georgetown, who still looks him up on trips to New York. She's also an outspoken fan of neoliberal policies, who has good relations with US  companies, Congress, and, indeed, President Bush.

• Unlike 1986 and 2001, the opposition has no clear leader that would be acceptable to the US.

• President Bush may well sympathize with an unpopular President whose electoral legitimacy is questionable, and who also repeatedly violates the Constitution and hides behind the skirts of a hand-picked Supreme Court and Congress.

In sum, from Manila, Bangkok, Egypt, the West Bank, and Iran, to Palm Beach County, Haiti, Caracas, Peru, Colombia, and Bolivia,  the US Government only finds "people power" as desirable as the results that it produces. The people of the Philippines should not expect any help from GMA's cronies in Washington.

BEYOND "PEOPLE POWER"?

So to rid themselves of this new usurper,  Filipinos will have to depend on yet another round of Manila popular democracy --  perhaps this time in the face of even more repression. 

Are they up to it? 

Some pundits have recently concluded that, having been through EDSA I and II without achieving very much, and now more economically beleaguered, Filipinos no longer have much stomach for mass resistance.

Indeed, according to one fall 2005 poll,  in hindsight, just 36 percent of the population supports EDSA I, 10 percent supports EDSA II,  and 42 percent believe that doing nothing would have been preferrable.

On the other hand, 6 out 10 Filipinos still reject martial law as the way to solve the country's problems, while at least 58 percent are willing to support another round of mass demonstrations if President Arroyo is clearly shown to have "cheated in the elections" -- e.g., to have violated the law.

Proclaiming a bogus state of emergency and violating civil rights en masse without a "clear and present danger" should surely cross that threshold.

Furthermore, while everyone now recalls "People Power" as a mass movement, in fact i only 7 percent -- 20 percent in Manila -- of Filipinos over the age of 18 actively participated in  it. That is far below the proportion that now says it is still prepared to demonstrate against Presidential illegality.

As usual in revolutionary situations, however, everything comes down to leadership and initiative -- plus a hefty dose of sheer fortuity. The importance of political entrepreneurship is often underestimated by revolutionaries. However, given such decisive opposition leadership, and its ability to avoid being crushed by GMA's supporters,  her newborn "conjugal dictatorshp" could well be headed for history's dustbin. She has just made, as they say, "A mistake the size of her life."  

                                                     ***
(C) JSH, SUBMERGING MARKETS, 2006. ALL RIGHTS RESERVED.

"LIBBYGATE"Why Scooter Will Skate...James S. Henry

Irving Lewis Libby, Jr. was finally arraigned this week, after the Special Prosecutor Patrick "Bulldog" Fitzgerald's two-year investigation. It's always nice to see warmongers twisting in the wind,  but what have we really learned from all of this? 

Unfortunately, the five-count federal indictment of Vice President Dick Cheney's 55-year old Chief of Staff did not actually reveal who outed CIA spookette Valerie Pflame.

But at least we do now know "Scooter's" real first name and the origins of his cute little boys' school handle.     

Before Big Media's attention was deflected back to bird flu and another contentious Supreme Court nomination, the indictment also produced much speculation about whether Libby would cop a plea; whether "Official A" -- Karl Rove -- or even the Veep himself might eventually be charged; and how long the judicial torments suffered by Libby, Tom Delay, Jack Abramoff, and other inner-circle Republicans will persist.

For a few moments, it also appeared that  Patrick "Bulldog" Fitzgerald might finally get down to a few of the really important issues:

• (1) To what extent did the White House, the Pentagon, its operatives, and its allies in the media and foreign governments conspire to orchestrate the fraudulent case for the Iraq War -- as opposed to just being victims of "faulty intelligence?" (E.g., "Tenet made me do it.")

• (2) How often were "house journalists" like Judith Miller, Tim Russert, and Bob Novak  -- whose principle skill is trading various kinds of favors with officials in high places -- used as distribution channels for the Administration's agitprop?

• (3) If they didn't learn Valerie Plame's identity from Libby or Rove, from whom did they learn it?

• (4) What special interests - energy companies, defense contractors, and several Middle East countries, would-be countries, and religious/ ethnic factions -- helped weave the cobweb of distortions and lies that got us into this War, and have kept us in it long after even Brent Scowcoft and William Odom agree that it is a monumental US strategic blunder?

• (5) What was the role of these same interests in insuring that so many leading Democrats have been completely supine on the War? And what other wars do they have in store for our sons and daughters?

Alas, the case against Libby & Co. is unlikely to ever reach these issues.  This is not because of Fitzgerald's investigation, which was ably led by FBI agent Jack Eckenrode, known and admired as a straight shooter by this author since 1987. Rather, it is because, as argued below,  Scooter Libby will almost certainly escape scot-free... just like his oldest client, Mark Rich, who's recently been implicated in paying bribes to Saddam Hussein -- post-pardon.  For the incredible story, read on......

THE LIBBY CASE

At first glance, Fitzgerald's 22-page indictment seems like a good start. While perjury and obstruction of justice charges can be tough to prove, Fitzgeral's case looks straightforward. It also has the extra-added attraction of compelling this particular crop of journalists to bite a hand that has fed them handsomely.

Fitzgerald displayed a palpable sense of relief that he'd been spared having to prosecute violations of the complex 1982 Intelligence Identities Protection Act, the original basis for his investigation.

That statute would have required him to show not only that officials like Libby and Rove who had security clearances had willfully exposed the identity of a true"covert" agent, but also that these same officials had learned the agent's identity from official sources.

By turning the case into a perjury charge, Fitzgerald avoided having to convince a jury that Pflame was still a covert agent when her identity was disclosed. That wasn't going to be a slam dunk, given that she'd  been driving herself to Langley every day, and that she was at least partly responsible for the decision to send her own husband, former Ambassador Joe Wilson IV, on the uranium fact-finding mission to Niger in February 2002.   

There also appears to have been an organized campaign to punish Pflame and her husband, with several officials  leaking her identity to multiple journalists at once, and folks like the curious friend of both Lt. Colonel Larry Franklin and Judith Miller,  Israeli Embassy "political counselor" Naor Gilon, also in the loop. It will  be far easier to for Fitzgerald to prove how Libby learned Plame's identity than to prove that any particular journalist learned it only from him.

ROLL OVER?

Considering the strength of the case, Fitzgerald's unbroken track record of convictions,  and the 30-year sentence that Libby might theoretically face if he doesn't cooperate,  many pundits now expect him to "roll over" and testify against the Veep or Rove.

However,  the poker-faced Libby has showed no signs of knuckling under.  indeed, he has expressed confidence  that “(A)t the end of this process I will be completely and totally exonerated.” His attorney has indicated that Libby wants a jury trial "to clear his name."

Is  this just typical defendant braggadocio? Or does this  savvy member of the Bush Administration's inner circle, who also held key posts under Reagan, Bush I, and Clinton, spent 16 years as a litigator and partner at leading DC and Philadelphia law firms,  and personally represented big-time felons, know something that the pundits do not?

The fact is that those who are hoping for a plea bargain here, much less a trial of the Veep, are likely to be disappointed. 

While Fitzgerald has a solid case, Libby -- like his client Marc David (Reich) Rich, the fugitive from 48 felony counts who was pardoned by President Clinton in January 2001, and the six senior officials and convicted felons who were pardoned by President George H.W. Bush in December 1992 --  has a trump card.

He already knows that he will never do a single minute of jail time.

The simple, if inelegant, reason is this: Scooter Libby knows far too much, and not just about "Pflameburn."

Given his background and experience, Libby might well be in a position to bring down the entire Bush Administration on any number of matters, from secret detention centers and CIA "wet jobs" to missing funds in Iraq to Halliburton's no-bid contracts to the hyping of the case for the war. He might also have a few interesting things to say about the shenanigans of the Clinton, Bush I, and Reagan Administrations.

Absent divine intervention, therefore, the fix is in. Libby's gameplan is already clear: he will insist on a jury trial, and will try to delay that as long as possible -- perhaps up to a year, as his counsel recently indicated. That trial will commence during the fall of 2006 -- not before the November 2006 Congressional elections, if Libby has his way. The trial itself will last at least 3-6 months, and there is always a chance that Libby not be convicted. Even if he is, the appeals would take us well into 2008, Bush's last year in office. So even if Libby is convicted, he'll receive a Presidential pardon with minimal jail time.

RICH IRONIES

From this angle, it was indeed ironic to learn late last week,  just as Scooter was about to be indicted, that his 20-year client Marc Rich had been named by Paul Volcker as a leading provider of bribes to Saddam Hussein in the UN Oil-For-Food (OFF) scandal -- for the most part AFTER his January 2001 pardon by President Clinton.

Furthermore,  it also turned out that several other key OFF beneficiaries and Saddam bribers also had close  ties to both Rich and to Halliburton, the Veep's old firm --  including Mikhail Fridman's Alfa Group, Switzerland's Glencore, and US-based oil companies like Bayoil and Coastal Petroleum.

The striking thing is how bi-partisan most of these corporate kleptocrats have been.

For example, while Halliburton is closely identified with the Republican Party, Coastal's Oscar Wyatt, Jr., now also under federal indictment, has been a heavy life-long contributor to the Democratic Party. 

Rich's ex-wife Denise, operating out of her New York City condo and her high-hedged mansion in Southampton,  greased the skids for her husband's pardon by contributing over $1 million, becoming one of the largest fundraisers for Bill Clinton's new Presidential library.

Alfa Group's Ukrainian-born Mikhail Fridman maintains close ties not only with President Putin and certain leading Moscow mobsters,  but also with the Council on Foreign Relations, where Alfa has recently become a leading contributor.

And when Marc Rich pursued his Presidential pardon, his main legal gun wasn't Scooter,  but Jack Quinn, the Arnold & Porter senior partner who had served as Al Gore's Chief of Staff in the early 1990s.

So, from this angle, Dick Cheney's Chief of Staff has just been trying to keep up.

When we finally sweep clean these Augean stables, we will have to employ a very large, non-partisan broom indeed.

(c) SubmergingMarkets, 2005

TIME'S ARROWA Media Conglomerate's Fateful Decision to Undermine Investigative JournalismJames S. Henry

It was disappointing, but not really surprising,  that Norman Pearlstine, Time Inc.'s Editor-in-Chief since 1995, decided last week to comply with a federal subpoena and turn over documents to the federal government that will probably burn one of his own leading journalist's sources.

As discussed below, this spineless decision was a cardinal sin against investigative journalism and the First Amendment. 

But it was entirely in keeping with Time Warner's long-standing passivity and obsequiousness toward the powers-that-be. 

It also reflects this media conglomerate's increasingly entangled interests with governments and corporations around the world.  Thank goodness that Matt Cooper wasn't working for Time's China subsidiary!

Our condolences go out to the dwindling crop of serious investigative journalists at Time, People, Sports Illustrated, and TWX's other 130 publications, as well as CNN and HBO. 

There is, however, one ray of light in Pearlstine's otherwise cowardly, inexcusable decision. We may finally get to learn the identity of the White House felon who leaked Valerie Plame's CIA relationship to the press. Already there's been some very interesting speculation....!

THE CONTEXT

For the past year,  some marketing genius at AOL Time Warner -- now just Time Warner Inc. ("Twinkie," as journos know it, or TWX, as it is known to its hapless stockholders) -- has been sending us free copies of its "weekly news magazine," Time Magazine.

Even though Twinkie's stock price has been dropping more or less continuously since 1999, I am delighted that it can still afford this kind of largess. It is, after all, "the world's largest media company."

Personally, I've always enjoyed the covers and that pretentious "Person of the Year" award -- which really should still be called "Man of the Year," since they've only honored 2 women, Queen Elizabeth and Corazon Aquino, (plus 1 black and 4 Asians) since 1927. (Peter Ueberroth and Jeff Bezos, but not Nelson Mandela? FDR three times, and Truman, Ike, LBJ, Nixon, Bill Clinton, Dubya, Stalin, Deng Xiaoping, Gorbachev, and Churchill twice each? Does anyone there enjoy sucking up to power, or what?

And who WILL it be this year? The deceased Pope? The new Pope? Justice O'Connor? Bono? Abu Musab al-Zarqawi?)

Anyway, apart from all that, I almost never actually read the damn thing -- at least not since 1973, when Skip (Henry Louis) Gates and I shared an apartment in London, and he was interning for Time. It seemed like a comradely thing to do for a brother.

CONVENTIONAL JUDICIOUSNESS   

In general, Time Magazine, and TWINK's myriad other publications -- People, Sports Illustrated, Yachting, Wedding & Home, Popular Science, Marie Claire, Ski, Family Circle, and over 130 others -- may be helpful and even informative for people who have regular day jobs.

But they have simply never been noted for cutting-edge investigative journalism. 

On the rare occasions when they try to do it, as in CNN/Time's infamous Tailwind investigation in 1998, they usually get caught in their own knickers.

To borrow from a few leading Time Inc. titles, they're really more comfortable keeping things Real Simple, providing Entertainment Weekly, and making a lot of Money, or perhaps even a Fortune -- unless you are a hapless TWX investor.

Of course TWINK's other media properties -- especially CNN and HBO -- have contributed some valuable reporting over the years. But "Chicken Noodle Network,"  in particular,  has been under increasing pressure from rivals like Fox to do more info-tainment and be more gung-ho.

Recently they've also had big fish to fry with the Pentagon, given the increasing importance of embedded journalism and satellite feeds in all sorts of new Third World war zones.

None of this has been especially encouraging to crusading Edward R. Murrow-style  journalism.

GETTING BURNED

In this case, the Time Magazine journalist whose sources were burned, Matthew Cooper, has been fighting this subpoena through the courts for 18 months. He and New York Times' reporter Judith Miller had both refused to reveal their sources to a federal grand jury that is investigating the Valerie Plame case, and had appealed their subpoenaes all the way to the US Supreme Court. After the court ruled against them in late June,  Pearlstine reached his own verdict.

Pearlstine denied that he was influenced at all by the risk that TWX might be subjected to a $1,000 per day fine, much less the even more costly possibility that defiance of the subpoena might jeopardize last year's settlement with the US Department of Justice. Under that settlement, the DOJ filed a criminal complaint against AOL TW for certain misconduct under securities laws, but agreed not to prosecute, so long as the company cooperated fully with the terms of the settlement.

Instead, Pearlstine simply asserted that since the US Supreme Court has decided the matter, he has no option but to comply with the subpoena.

To their credit, The New York Times, Judith Miller, and Matt Cooper, as well as -- we hope -- most other journalists and publishers -- all see it differently.

• They understand that investigative journalists simply cannot do their jobs -- and by extension, the First Amendment can't be effective --  if they are not able and willing to protect their sources.

• They understand that source confidentiality is a long-standing common law tradition which has already been recognized in statutes enacted by 45 states.

• They understand that the so-called trade-off between grand jury access to confidential sources and journalists' rights is no trade-off at all -- since without confidential sources, none of the information sought would even exist in the first place.

• They understand that in individual cases, journalists who have agreed to protect their sources may have a moral obligation that may  indeed, depending on the facts of the case, transcend the legal duty to help prosecute a specific crime. 

In short, Pearlstine's short-sighted stance, if emulated by other news-gathering organizations, could pose a real challenge to hard-hitting investigative journalism -- at least to any that is still being done inside media conglomerates like TWX, Disney, and Viacom.

This is just one more example of the kind of pusillanimous behavior that we have come to associate with publicly-owned media giants.

They have so many interests at stake in their dealings with the government and their fellow corporate giants that they simply lack the will to do vigorous investigative reporting.

The good news is that while these corporate giants atrophy, a whole new generation of spunky alternative sources for news and investigative reporting are springing up.

Unlike some media conglomerates, we protect our sources -- and there are no corporate hirelings who might "balance the interests at stake" and say otherwise.   

We do feel sorry for all the many good reporters at organizations like Time, CNN, and HBO, as well as for any writers affiliated with Little, Brown or TWX's other publishing ventures.

Like Matt Cooper, they may be willing to keep promises to their sources themselves.

But how can they ever be sure now, if push comes to shove, that the commitments they've made to their sources will be respected by the myriad of senior editors and other corporate executives above them?

AND THE LEAKER IS....?

Meanwhile, speculation continues to build about who the White House source or sources might be who leaked Valerie Plame's status as a CIA operative to the press last year -- reportedly out of pique at her husband's anti-Bush stance. The latest rumor on the street is that it is Karl Rove. 

If true, some might say -- well, source confidentiality be damned! What could be more satisfying that to see this bloated blow-hard take a few laps in the federal pen for perjuring himself before a grand jury?

After all, should  a confidential sources rule that is primarily intended to protect whistle-blowers really be extended to a government leaker who's gone on the offense, trying to punish political enemies while hiding behind confidentiality? Some in the journalism community have indeed argued not.

However, from our standpoint, one person's "offensive leaker" is another's "whistleblower" -- that's not an easy line to draw.

Far better that we protect the right of journalists to honor their commitments to confidential sources of all kinds -- except perhaps in the "hard cases" where human lives are clearly at risk. Unless Dubya is a threat to Karl, presumably that's not the situation here.

(c) SubmergingMarkets, 2005