Wednesday, January 18, 2012
24 Hour Blackout, In Opposition to SOPA and PIPA "Closed Internet" Legislation
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Friday, August 26, 2011
Gaddafi's Fellow Travelers James S. Henry
(An earlier version of this appeared today as a Forbes column.)
I recall one cold wintry Saturday evening about three years ago in Vermont, and a dinner conversation among a small group of former business colleagues, including HBS Professor Michael E. Porter, the eminent competitive strategist.
He’d just returned from Tripoli, where he’d been working on what he told us was a “strategy project” for the Gaddafi regime with a raft of consultants from Monitor Group, the Cambridge-based consulting firm that he’d helped to found in the early 1980s.
For about thirty minutes or so he shared with us how excited they all were to be working to reform the Libyan economy, and how Colonel Gaddafi and his sons now really seemed to “get it.”
Clearly Prof. Porter felt this was all pretty cool. When asked about the issue of democracy and the rule of law, he rather quickly brushed aside such concerns, suggesting that they were sort of beside the point – after all, as the case of China supposedly demonstrated, all those annoying traditional liberal values sometimes just need to get out of the way of progress.
At the end of all this, there was a brief silence. I suspect that most of those at the table were slightly discomforted by Prof. Porter’s blunt, hard-nosed neoliberal analysis, and certainly by his apparent intoxication with the infamous Libyan dictator. But he was, after all, an eminent Harvard professor. And unlike us, he’d not only been to the country, but had met its most senior leaders personally.
Finally, however, my friend Roger Kline, a wise old McKinsey partner, broke the silence with a simple, direct, slightly impolitic question, which would be answered only by the silence that it provoked from Professor Porter: “Doesn’t it ever bother you at all, Michael, to be working for a terrorist?”
***
As the spirit of doom hovers over the last remnants of Muammar Gaddafi’s 42-year-long dictatorship, and most Libyans are celebrating his departure with sheer delight, there is much less joy in a handful of top-tier academic and professional-class households in Cambridge, Princeton, Georgetown, Baltimore, East Lansing, and London.
For Mighty Muammar has indeed struck out -- contrary to the hopes and expectations of some of our very best and brightest experts on “competitive country strategy," “global democratic governance," "the idea that is America,” and “soft power.”
After all, from their perspective, whatever Gaddafi's flaws, his blood-stained but deep-pocketed regime was certainly not like that of Kim Jong Il.
Unlike Kim, Gaddafi had been willing to pay quite handsomely to hear them spout off about their pet aerie-faerie neoliberal theories of political and economic development.
Meanwhile, Gaddifi's government also ordered up an expensive grab-bag of university grants, endowments, special education for Libyan police and diplomats, ginned-up degrees for his dim-witted family members, lots of slick lobbying and lawyering, plus a large number of custom press portraits by leading Western academics gurus – none of whom ever bothered to disclose the fact that they were all on Brother Leader's payroll.
This sordid tale first began to trickle out about two years ago from the Libyan opposition, but it really picked up steam after the Revolution began in February 2011. The interested reader can look here, here, here, here, and here for the gory details.
But right now, just as the Gaddafis are about to take their rightful place in history’s waste bin, it is worth recalling the highlights for several reasons.
First, we’d like to make sure that all of the leading academic collaborateurs who helped to legitimate Gaddafi's abattoir receive their due: the very first installment of the “Milton Friedman/ "Putzi" Hanfstaengl Iron Cross Award.
Second, we'd like to require all these collaborateurs to donate the millions of dollars of blood money and the thousands of frequent flier miles they accumulated as unregistered foreign agents for Gaddafi’s regime to Libya’s teeming hospitals and orphanages.
Together, these two simple steps might help to insure that this kind of totally uncool dictatorship rebranding is brought to a screeching halt.
REBRANDING GADDAFI
This tale really began in 2003, when the Gaddafi regime, seeking to end an annoying economic boycott, gave its solemn word to swear off terrorism forever, cease dabbling in nuclear technology, pay compensation for the 1988 Pan Am 103/Lockerbie bombing, and "accept responsibility for the actions of its officials,” whatever that meant.
Not surprisingly, given Gaddafi's horrific track record, most ordinary Westerners, not to mention the hard-pressed Libyan opposition, were deeply skeptical.
But Western leaders and policy experts were curiously much more receptive to Libya’s extraordinary effort to upgrade its image from “terror camp” to “the West’s best new pragmatic partner in the Middle East."
Indeed, it turned out to be a very fertile time for this kind of rebranding effort. First, even though Libya’s U-turn had largely been motivated by economic self-interest, George W. Bush, Tony Blair, and Silvio Berlusconi welcomed it as a badly-needed victory in the “war on terror.” Berlusconi and Blair even flew directly to Tripoli to welcome the “reborn” Gaddafi back into the community of nations.
Nor, in the US, was the welcome committee just limited to Republicans. In July 2008, Democrats Carl Levin and (now Vice President) Joe Biden played a key role in guiding S.1330 through the US Senate.
This scurrilous bill, signed into law by President Bush, controversially granted Gaddafi complete legal immunity for the Lockerbie bombing, so long as he paid a (rather paltry) agreed-upon sum to the victims’ families.
Second, Libya’s U-turn opened the door to a whole bevy of Holy-Water merchants and academic medicine men. These instant Libyan "experts" were eager to offer Gaddafi not only absolution, but also their very latest pet theories about everything from “competitive clusters" and "strong democracy" to “the Third Way.”
They were also eager to see test such theories in Gaddafi’s living laboratory -- especially if the dictator was willing to subsidize the clinical trials. Not since Boris Yeltsin, General Suharto, and General Pinochet have neoliberal academics had such a golden opportunity to test their theories on real live human subjects at country scale.
Third, to a large extent mainly for PR purposes, Western experts also made much of their opportunity to "dialogue" in person with real live Libyans. Well, perhaps not so much with the nascent opposition, which was mainly abroad, in hiding, in jail, or dead.
Of course, according to Gaddafi & Sons, confirmed by US intelligence officials like John Negroponte – who got much of his info about Libya from his brother Nicholas, who got it from Gaddafi & Sons (see below) – the Libyan opposition consisted of radical "al Qaeda” sympathizers or the members of “dissident tribes” in Libya’s supposedly “very tribal” society, anyway.
Their received image of Libya, seen through Gaddafi-colored lens, was curiously similar to the self-image that South Africa’s apartheid regime used to project – a deeply “tribal” society that required strong-armed rule to preserve it from the radical horde at the gates.
In any case, Western experts were generally quite happy to take the Gaddafis’ word -- and his moolah -- for all this, and to participate in one-sided “dialogues” with Brother Leader himself whenever he was able to spare the time.
This delighted Brother Leader. No doubt this was partly because of his deep intellectual curiousity about the very latest economic and political theories. But, more practically, it also meant that prominent Western expert after expert had to fly thousands of miles to Tripoli and back just to help his regime flaunt its wares on Libyan State TV and lend him unprecedented respectability.
Ultimately, you see, Gaddafi had all these neoliberal academics pegged to the tee.
He understood from the start that many were frustrated by their powerlessness in (more) democratic Western societies. Their secret wet dream is the absolute dictator who takes them seriously, and able and willing to test their theories on command, without the need for messy democratic processes.
Indeed, Gaddafi's personal power n Libya was so complete that he never even bothered to give himself a formal title other than "Colonel."
THE CARAVAN
From 2004 on, therefore, Tripoli became a kind of alternative Mecca for a veritable “Who’s Who” of leading Western intelligentsia. Among the key interlocutors were Professor Porter; Cambridge University/LSE’s “Baron” Anthony Giddens and George Joffe; LSE’s Director Sir Howard Davies (now resigned), and Professor David Held, its leading expert on “globalization;” and Monitor Group’s Rajeev Singh Molares (now at Alcatel), Mark Fuller (recently resigned as its Chair), and Bruce J. Allyn (formerly the head of Monitor’s Moscow office).
Others who tagged along for the camel ride included Ann-Marie
Slaughter, Dean of Princeton’s Woodrow Wilson School; Princeton Professors Bernard Lewis and Andrew Moravcsik; the insidious neo-con Richard Perle (2 visits); MIT Professor Emeritus Nicholas Negroponte (several visits), brother of US DNI John Negroponte, and the former head of the MIT Media Labs, who was very eager to get Libyan funding for his ill-fated pet “One
Laptop Per Child” project; a flurry of other Harvard profs, including the Kennedy School’s Robert Putnam, Joseph Nye, and Marshall Ganz, an organizer-guru who became involved in another tidy little dictatorship, Syria; and Johns Hopkins' "end of history" champion Francis Fukuyama, who made history himself by pulling down a record $80,000 for a single audience with Brother Leader.
Nor were journalists entirely immune from the attractions of the
Libyan honeypot. Here, the Monitor ringmasters also went for high-profile celebrities, including Al Jazeera's David Frost, who collected $91,429 for a single visit. They also nearly recruited several others before the project got terminated. One Monitor project memo reports, for example, that:
“Monitor approached (Fareed) Zakaria who said that he is very interested in travelling to Libya in order to meet with the Leader….Monitor also approached ( the New York Times’ Thomas) Friedman who said that he was interested in travelling to Libya at some point in the future.”
Collectively this respectability caravan made dozens of such Gaddafi-tour site visits, logging tens of thousands of First Class miles and receiving millions of dollars in fees to commune about the “New Libya" – all the while helping to launder the regime’s blood-stained image.
This activity seems to have gone far beyond simply helping Libya to restructure its economy and political system along more open, competitive lines. Indeed, it is now clear that the regime probably never seriously intended any meaningful reforms, but was mainly trying to curry influence and favors.
The experts’ punch list included such dubious activities as ghost-writing Saif Gaddafi’s PhD thesis; helping to design a “national security agency” for Libya (!), quite probably with inputs from folks like the Negropontes and Richard Dearlove, the Monitor “senior advisor” who ran the UK’s MI6 from 1999 to 2004; offering to ghost-write a puffed-up version of Brother Leader’s collected works; and, all along, orchestrating a flurry of favorable press coverage in influential papers like the Washingon Post, the New York Times, the International Herald, and the Guardian.
All of this was done without without ever bothering (until this Spring, in the case of Monitor Company) to register as what many of these high-toned folks truly turned out to be: foreign agents of the Government of Libya.
BETTER SAIF THAN SORRY
There are many glaring examples of outright shilling for the Gaddafis by these brown-nosing academic and consulting mercenaries, but a handful captures the essential odor.
One good example was LSE Professor Emeritus/ Blair confidant/ Baron Anthony Gidden’s bold March 2007 speculation in the UK’s Guardian newspaper that Colonel Gaddafi’s Libya might soon turn out to be “the Norway of North Africa.” The piece mentioned Lord Giddens’ impressive academic credentials, but it neglected to mention the fact that he had received $67,000 in fees from Libya, plus First Class round-trip travel expenses for at least two hajjs to visit with Brother Leader and his staff in Tripoli.
Another example is Rutgers Professor Emeritus Ben Barber’s even more wildly enthusiastic August 2007 Washington Post endorsement of the “surprisingly flexible and pragmatic” Gaddafi and his “gifted son Saif.” Of course Saif is much more familiar to the rest of us now for his blood-curdling “rivers of blood” speech on February 20, 2011, which contributed mightily to the subsequent polarization and bloodshed.
Professor Barber’s piece reminded his readers that he was a best-selling author and a Distinguished Senior Fellow at the think-tank Demos. But it neglected to mention the fact that he’d also made multiple all-expense-paid trips to Tripoli, for which he’d been paid at least $100,000 in fees by the Libyan Government.
A third example is HBS Professor Michael E. Porter’s February 23 2007 Business Week interview, in which he reported that he had “taken on” a consulting project in Libya, as if this were some kind of beneficent act. Gaddafi, he maintained with a straight face, wasn’t really a dictator after all: “In a sense, decision-making is widely distributed in (Libya). People [consider Libya] a dictatorship, but it really doesn't work that way. That is another reason for optimism.” (Emphasis added).
Prof. Porter neglected to mention the fact that he and
Monitor Group, the Cambridge consulting firm that he, plus HBS grads Joe Fuller and Mark Fuller, had founded in the early 1980s, were not only earning several million dollars for their Libyan strategy work, but were also up to their proverbial eyeballs in a second multi-million dollar PR project to bolster Gaddafi’s image.
THE IMPACT
All this salacious material is interesting. But did it really have any harmful impacts on Libya? Or is all this merely frivolous second-guessing?
The answer is that this kind of orchestrated air-brushing of the Gaddafi regime by leading Western consultants and academics clearly was not only enormously harmful to the interests of most Libyans, but also that these negative impacts were entirely foreseeable – and, indeed, were anticipated by many critics who had the same intuitive reaction as Roger Kline (see above.)
✔ The academic white-washing helped to conceal the fact that the Gaddafi regime was enormously unpopular with its own people – that the opposition was broad based, that high-level corruption was rife, and that the “tribal”/al Qaeda paradigm of the Libyan opposition was simplistic and dangerously misleading, not to mention self-serving for the Gaddafi clan.
✔Academic air-brushing also contributed to the misleading view that “reforming Libya" was mainly just a technocratic exercise for the insider-elite and their Western advisors, to which constitutive matters like elections, rights, the rule of law, and genuine popular representation could take a back seat.
✔The bevy of big-name Western intellectuals and consultants who courted the Gaddafis not only inflated their egos even larger than they already were, but also encouraged them to believe they could easily buy influence, as well as arms, in the West -- and delay fundamental political reforms.
In short, the white-washing and the kid glove treatment of the Gaddafi regime by leading Western academics may well have discouraged that regime from pursuing deeper political reforms much earlier, and from negotiating in good faith once conflict increased.
In other words, it probably cost lives.
If and when the Gaddafi clan is captured and put on trial, either in Libya or before the ICC, we hope that these courts seize the opportunity to examine the conduct and responsibilty of these neoliberal fellow travelers of dictatorship very closely.
***
So, in the waning hours of the Gaddafi regime, it is important to recall that Brother Leader and his band of thugs did not simply become a menace to Libya’s people and the world on their own.
Nor was his particular brand of madness simply due to the “usual suspects:” anti-Western radicalism, liberation ideology, Gaddafi's own imperialistic ambitions in Africa, his idiosyncratic version of political Islam, or even the fact that he spent far too much time spent frolicking in the desert sun with Ukrainian nurses.
No – while Gaddafi’s buddies in Venezuela still portray him as a stalwart opponent of Western imperialism, the fact is that in recent years he actually continued to increase his influence in the West only with the really quite extraordinary assistance of prominent, high-priced, incredibly smart, but ultimately quite gullible Western “friends.”
(c) JSH 2011
August 26, 2011 at 04:47 PM | Permalink | Comments (0)
Wednesday, May 12, 2010
Is Medical Care In Haiti Really Better Now Than Before the Quake? James S.Henry
(HEUH,Port au Prince, May 12, 2010)
On Monday AP carried a story, unfortunately replayed with no editing by
the Huffington Post , which baldly claimed that
medical care in Haiti is now actually much better and more accessible
than it was before the January 12th quake.
Having spent much of the past week in Haiti visiting nurses, doctors, and medical workers at the main hospital and leading clinics in Port au Prince, as well as several of the largest camps here, I've concluded that this report is, at best, highly misleading.
At worst, it is yet another striking example of sloppy AP reporting and the virtually-unedited brave new world of "fast food" Internet journalism.
While the supply of medical care in Haiti has indeed increased since January, mainly because of the temporary influx of foreign volunteers and donations, the fact is that the demand for most kinds of care has increased even more.
For example, in the aftermath of the quake, there was an immediate need to treat traumatic injuries and perform amputations. That need, which had not really existed before Haiti, naturally got most of the world's attention.
By now that specific need has indeed mostly been met, however.
Accordingly, most US volunteer surgeons and nurses have either rotated
out, or are in the process of leaving.
However, according to more than a dozen nurses, doctors and health workers at HEUH, the main hospital in PauP, and at the leading clinic at the 50,000 person Camp Jean-Louis, this hardly means the country's medical needs are now being better served than before the quake.
The need for the kind of high-visibility, "ER-" type fly-in care has now been replaced by a surge in other maladies, which may be less visually-dramatic to international TV audiences, but no less life-threatening.
Unfortunately, treating these other less glamorous quake-related medical consequences demands a longer term commitment -- plus basic improvements in nutrition and community health that are -- like Adam Smith's "invisible hand" -- for the most part still nowhere to be seen.
For example, since the quake, there's been a sharp rise in under-5 age mortality and physical illnesses and injuries. These include not only infectious diseases like malaria, typhus, and diptheria, but also tetanus (from rubble), accidental poisoning toxic, injuries due to fires.
I spoke with medical workers at Partners in Health, a leading NGO that has been active in Haiti since the mid 1980s, and now operates 15 clinics here, including 4 in PauP. They attribute this surge in infant illness and injuries to the dire living conditions for the 1.412 million (as of this week) still living in temporary shelters. They also attribute many of the health problems they are seeing for kids and adults alike to the increasing prevalance of hunger and malnutrition in the camps. And that, in turn, is due in large measure to the total inadequacy of Government/NGO food and water distribution -- right up to the present.
The PIH clinic workers that I spoke with also report that there has been
a serious increase in mental health problems, due to the quake's
unusual capacity to inflict severe simultaneous traumas: the sudden
loss, not only of one's loved ones and many friends, but also of
shelter, job, savings, community, and sense of security. PIH mental
health workers described patients who have recurrent feelings that the
ground is shaking, irrepressible memories of the sights and smells of
death and destruction, acute fears about entering buildings, nightmares
and daymares about searching for the missing.
0f course before the quake, this country had a grand total of 17 psychiatrists, only 9 of whom were public doctors, to serve a population of at least 8.5 million. There were more Haitian mental health workers in any one of New York, Miami, Boston, and Montreal than in all of Haiti.
Now, after the quake, dedicated NGOs like Partners in Health are indeed working hard to beef up their community mental health efforts -- PIH will launch mental health services at up to 4 of its clinics this year.
However, even PIH freely admits that they are just beginning to scratch the service -- and to understand how vast the need is for post-traumatic therapy on a community-wide scale as a result of the quake. This will require a long-term commitment on all sides.
It would also be really helpful if foreign journalists would make a long-term commitment to really understanding this country, rather than treating it as an endless source of "unexpected natural disasters" and "amazing recoveries."
Sent via BlackBerry by AT&T
May 12, 2010 at 09:37 PM | Permalink | Comments (0)
Thursday, April 01, 2010
ORDINARY INJUSTICE Even Beyond Guantanamo, Rendition, and Torture, the US Criminal (In)Justice System Is a National Disgrace James S. Henry
In 1840, Tocqueville, otherwise usually an astute observer of American society, proclaimed that “there is no country where criminal justice is administered with more kindness than in the
US.”
In the modern-day “Law and Order”/ Perry Mason made-for-TV version of this story, the US is still viewed by many as having, in author Amy Bach’s words, “the world’s finest criminal justice system.”
Certainly this is the preferred self-image when, as it is wont to do, the US criticizes the quality of
criminal justice in other countries.
Juries take their independence seriously and fight tooth and claw for the
truth; parole officers and prison wardens are all deeply committed to “correction.”
Public defenders are not only thoroughly informed about the latest nuances of criminal law, but also work tirelessly to insure that each and every defendant has
his day in court.
Fortunately, Ms.
Her new book, the product of seven years of
first-hand research in the bowels of the state and local court systems of New
York, George, Mississippi, and Chicago, focuses on “ordinary injustice” -- the routine
failure of judges, prosecutors, and defense attorneys as a community to
deliver on the Constitution’s basic promises.
EXCEPTIONS?
Tocqueville was not alone in his naivete'. Initially, the sheer amount of attention given to criminal justice in the US Constitution as well as state constitutions led many observers to expect that the US really might be distinctive.
Indeed, criminal rights are the subject of Article I’s explicit reiteration of habeas corpus, plus four of the first ten amendments (known collectively as the “Bill of Rights”), and their extension to states and non-citizens by the XIV th Amendment.
Many of the exceptions have occurred in times of war or perceived security threats – for example, the Sedition Acts of
1798 and 1918, the World War II internment of Japanese-Americans, the frequent persecution of labor unions, civil rights workers, and Left wing dissidents from the 1880s right up through the 1970s, the 2001
Patriot Act, the NSA's illegal spying program, and the systematic mistreatment of "enemy combatants" at Guantanamo and elsewhere.
Other exceptions have involved the application of "Jim Crow justice” to native Americans, Afro-Americans, and other minorities.
Overall, however, most legal scholars have treated these episodes as abnormal deviations. In the long run, the system as a whole is supposedly always improving, always trying to do the right thing.
On this theory, the US Constitution and the courts that interpret it are a kind of homeostatic machine, with built-in stabilizers that eventually prevent any serious rights violations from becoming permanent.
THE REALITY: FAST-FOOD JUSTICE
It is also conceivable that "path dependency" and "feedback loops" in the legal system may be destabilizing. The erosion of rights in one period may increase the chance that rights continue to erode later on.
Critics of the conventional view have also argued that rich people and poor people – including the indigent defendants who now account
for about 70 to 90 percent of all felony cases – essentially confront two very different US criminal justice systems, especially in state and local
courts.
Meanwhile, 90 percent of criminal defendants soon learn the hard way that their nominal "rights" consist of one brief collect call from a jail cell, followed by a tango with an alliance of police, prosecutors, and public defenders whose shared objective is to talk them into pleading guilty.
As
Clarence Darrow said in his 1902 address to the inmates at the Cook
County
Jail, “First and foremost, people are sent to jail because they are
poor.” And as
the American Bar Association --
not usually aligned with wild-eyed radicals -- reiterated in 2004, “The
indigent defense system in the US remains
in a state of crisis.”
DETAILS FROM THE FRONT
In doing
so, she tackles one of the main challenges that confronts any investigator who seeks to understand how the criminal
justice system really works. This is the fact that “ordinary injustice,” while
pervasive, is very hard to observe
without detailed, painstaking field work.
✔
For example, in her book we meet a Troy New York city judge who routinely fails to inform
defendants in his court of their rights to counsel, imposes $50,000 bails for $27
thefts and $25,000 bails for loitering, and enters guilty pleas for defendants
without even bothering to tell them.
✔
We meet a Georgia public defender who runs a
“meet’ em, greet’em, and plead ‘em”
shop that delivers just 4 trials in 1500 cases, with guilty pleas
entered in more than half of these cases without any lawyer present or any
witnesses interviewed.
✔
We meet Mississippi prosecutors who are so
concerned about their win/loss records and reelections that they simply “disappear” all the
harder-to-prosecute cases from their files.
✔
We meet a Chicago prosecutor who allows two
iinnocent young people to sit in jail for 19 years before he finally works up
the gumption to examine the relevant DNA evidence. This new evidence not only
cleared them, but it also helped to disclose a much larger police conspiracy.
✔ Ms. Bach also reminds us of the unbelievable 2001 case before
the Fifth Circuit Court of Appeals (Texas) where the court labored hard to overrule a
lower court decision that would have permitted a defendant on trial for his
life to receive the death sentence, despite the
fact that his attorney had been fast asleep through much of the trial.
PATTERNS
Amy Bach’s book is more than just a series of such horror stories, however. By doing painstaking legal anthropology in multiple locations, she's been able to go beyond the limits of the typical one-off journalistic expose about the courts. (See, for example, A, B, and C.)
Bach's focus is on identifying recurrent patterns of
misbehavior. These patterns were
unfortunately not “exceptional” at
all, but routine and widespread.
Most important, her research underscores the
fact that ordinary injustice is
not just due to isolated “bad apples.” There is a system at work here. Indeed, injustice thrives on a culture
of tolerance for illegal practices cultivated in whole communities of lawyers, judges,
and police over many years. This
culture, and the “fast food” plea bargaining that it
facilitates, are at the root of
all her cases.
Unfortunately Ms. Bach offers no real solutions
to the problems that she has described so well. She ends up leaning rather heavily on a fond hope that “new metrics” will be developed
to measure how well individual courts actually deliver “justice” -- sort of the legal equivalent of "No Child Left Behind."
There may be something to this. But in my experience, metrics, whether in education or judicial policy, are the last refuge of the policy wonk. They will undoubtedly be a long time coming. This is partly because of budget constraints. But it is also because if the metrics are really worth a damn, they will provoke stiff resistance from the very same bureaucratic interests that Ms. Bach had to overcome in her own research.
Pending the dawn of this brave new world of metrics, I suspect that we will just have to depend on a handful of dedicated lawyers, investigative journalists, and creative legal scholars like Ms. Bach to keep an eye on the courts, root out what’s really going on, and insist that all of the rights we have on paper and take for granted are still around when we really need them.
ROOT CAUSES
So where does “ordinary
injustice” come from, and what can we do about it? Fundamentally, as noted, the kind
of ordinary injustice described by Ms. Bach basically exists because of the
“fast food” plea bargaining system. But as she also recognizes, it would be a waste of time to outlaw this directly. This is
because the plea bargaining treadmill basically derives from the unsuccessful attempt to reconcile
several deeply-inconsistent public demands.
First, 9/11, the war on terror and GWB notwithstanding, most
Americans still fundamentally believe in freedom. Most of us still want to preserve the Bill of Rights -- at least on paper.
Second, we all want to save money – especially in these times. Implementing
the full-blown version of the adversarial trials in
every case would be very costly. While taxpayers value human
rights, they’re not all frothing to pay a
whole lot for them. This is partly just because at any given point in
time their value is a
little abstract -- like health
insurance before you become ill.
Of course the truth is that
the “fast food” system is anything
but cheap. The entire system
– courts, prisons and police – now
costs US taxpayers over $250 billion a year. That figure has been growing like Topsy – it is now at least three times the 1990
level.
Over 80 percent of
these costs are born by the hard-pressed state and local governments. Most of the funds are digested by police
and prisons; courts only account
for about one fifth. Even so, it is far from clear that ordinary taxpayers –
most of whom never expect to see the inside of a criminal court or jailhouse themselves -- would be willing to pay
anything more to help defend the poor
or curb ordinary injustice.
Third, what US taxpayers do care about, at least until now, is “fighting crime,” especially drug-related and lower-level street crime. Ever since the 1970s, these have been the fastest growing contributors to system-wide criminal justice costs.
For many taxpayers, under the influence of thirty years of campaign propaganda from the “war on drugs” industry and
“tough-on-street crime” politicians, this has usually been reduced to “lock ‘em up and throw away the key, as fast as possible.”
The result is that today, in the US, the number of inmates in our local jails and state and federal prisons is at an all-time high: over 2.3 million, 6.8 times the number in 1974.
This means
the US has the highest per capita
incarceration rate in the world. It is 754 per 100,000, higher than
Russia (610), Cuba (531), Iran (223), and China (119), let alone developed countries like the
UK (152), Canada (116), France (96), Germany (88), and Japan (63).
Indeed, southern states like Louisiana (1138), Georgia (1021), Texas (976), Mississippi (955), Oklahoma (919), Alabama (890), Florida (835), and South Carolina (830) have distinguished themselves with even higher rates -- by far the highest rates of incarceration in the world.
This alone helps to explain the
fact that annual cost of all US prisons now exceeds $80 billion a year. Indeed,
the annual cost of warehousing prisoners in California and New York prisons is
at least $50,000 per year per prisoner
– much more than the cost of providing them with full time jobs outside! In addition, in the US, there are over
9 million former prisoners who are now outside prison. More than 5.1 million others remain under supervision,
on parole or probation.
All told, the US now has more than 11.3 million
past and present inmates. This is
the world’s largest domestic criminal population, an incredible 23.5
percent of all current prisoners in the world. No doubt the sheer scale of our “criminal industry
experience curve” gives us
at least one clear national
competitive advantage -- in crime.
Indeed, because of our propensity to throw people in jail
regardless of what becomes of them there,
we now account for over a third
of the entire world’s living past and present prisoners. Not surprisingly, this also affords us
by far the most costly judicial and corrections systems that the world has ever
seen.
For all these costly
incarcerations, despite the vast sums and short-cuts associated with processing
all of these millions through the pipeline as rapidly as possible, there is not
one speck of evidence that this system has contributed one Greek drachma to
falling crime or safer streets.
Indeed, the best evidence is
just the opposite. Over two-thirds of US offenders who are released from prison
are likely to be re-arrested within three years. Reactionary voices may argue that this just shows we should
hold more of them longer, a sure recipe for system bankruptcy. What it really
shows is the complete lack of any real “correction” or retraining in most US prisons. The system that the
entire criminal justice machine works so hard to get people into as fast as
possible has become the world’s largest training ground for serial offenders.
In short, if we really want to understand the roots of "ordinary injustice," as well as the intense pressure that each and every player in the US criminal justice system feels to cut corners and slash costs each and every day, we need to look no further than this self-perpetuating failed prison state-within-a-state.
After all, this particular failed state already has a total population
of current inmates and former inmates under supervision that is greater than
Somalia’s!
***
April 1, 2010 at 04:36 AM | Permalink | Comments (1)
Monday, October 26, 2009
"WHAT MIDDLE CLASS"?
Global Wealth Inequality (2007-08 Average) James S. Henry and Brent Blackwelder (Click chart)
October 26, 2009 at 01:44 PM | Permalink | Comments (0)
Friday, October 02, 2009
Pittsburgh's State of Siege
Suppressiing Dissent With High-Priced Cop Toys
James S. Henry
Pittsburgh's State of Siege
You didn't hear much about it from any major US news organizations, but there was a very disturbing case of gratuitous police-led violence and intimidation at the G20 Summit in Pittsburgh on September 23rd-25th, 2009. Perhaps the only consolation is that it allowed those of us who were there to get a close look at some of the disturbing "brave new world: technologies for anti-democratic crowd control. These were initially developed by the US military to fight terrorists on the high seas and abroad, in places like Afghanistan, Somalia, and Iraq, but are now coming home to roost. Indeed, ironically enough, this is one of the few remaining global growth industries where the US is still the undisputed world leader, as we'll see below.
One local newspaper account described the events at the Pittsburgh G20 as a "clash" between the police, protesters, and college students.
Indeed, a handful of storefronts were reportedly broken on Thursday September 24 by a few unknown vandals.
However, based on our own visit to the summit, interviews with several students and other eye witnesses, and a careful review of the significant amount of video footage that is available online, the only real "clash" that occurred in Pittsburgh on September 23-25, 2009, was between lawless policing and the Bill of Rights.
The most aggressive large-scale policing abuses occurred from 9 pm to 11:30 pm on Friday September 25th near Schenley Park, in the middle of the University of Pittsburgh campus. This was miles away from the downtown area where the G20 had met, and, in any case, it was hours after the G20 had ended.
This particular case of aggressive policing -- "Hammer and Anvil," as the operation was described on police scanners -- was clearly not just a matter of a few "bad apples."
Rather, it appears to have been part of a willful, highly-organized, one-sided, rather high-tech experiment or training exercise in very aggressive crowd control by nothing less than a really scary uniformed mob.
New York police sometimes describe their firemen counterparts, tongue in cheek, as "robbers with boots." In this case we have no hesitation at all in describing this uniformed mob in Pittsburgh as "assailants with badges."
Their actions resulted in the unlawful suppression of the civil rights of hundreds of otherwise-peaceful students who were just "hanging out with their friends on a Friday night in Oakland," or attending a free jazz/blues concert in Schenley Park.
Essentially they got trapped in a cyclone of conflicting and inconsistent police directives to "leave the area." The result was nearly 200 arrests, gassings, beatings, and the deployment of dogs and rubber bullets against dozens of innocent people.
In addition to the students, this aggressive policing also assaulted the civil rights of a small number of relatively-peaceful protesters and quite a few ordinary Pittsburgh residents, most of whom were as innocent as bystanders can possibly be these days.
Why did this occur? In addition to whatever top-down "experiment" or training action was being conducted there appears to have been an extraordinary amojnt of pent-up police frustration and anger. For example, one student overheard a policeman piling out of a rented Budget van near Schenley Park around 9:50 PM Friday.
The officer was heard to exclaim, "Time to kick some ass!"
This is disturbing, but perhaps not all that surprising. After all, thousands of police had basically stood around for days in riot gear, sweltering in the "Indian Summer" heat, dealing with the tensions associated with potential terrorist attacks as well as all the hassles of managing large-scale protest marches, even if peaceful.There was also the inevitable tensions of social class and culture among police, Guardsman, and college students.
On the other hand, precisely because such tensions are so predictable, those in direct command or higher political office, and, indeed University officials, should have acted forcefully to corral them.
JOIN THE CLUB
All this means that Pittsburgh has unfortunately now joined the growing list of cities around the world that have experienced such serious conflicts -- mainly in connection with economic summits or national political conventions.
The list of summit frays includes this summer's G-8 in Italy, last Spring's G20 in London, the September '08 RNC in Minneapolis, the '04 RNC in New York City, Miami's Free Trade Area of the Americas Summit (11/03),
Quebec (4/01), Naples (3/01), Montreal (10/00),
Prague 9/00), Washington D.C. (4/00), the November '99 WTO
"Battle in Seattle," the J18 in London (6/99), Madrid (10/1994), and Berlin (9/88).
President Obama had originally selected Pittsburgh for the G20 because he hoped to showcase its recovery since the 1980s, especially in the last few years, under a Democratic Mayor, in a Democratic state that he barely carried in the 2008 Presidential contest.
In seeking to explain such events, therefore, it alway helps to keep a firm eye on the question -- whose interests did really this serve?
In retrospect, the failure of these leaders to control the police at the G20 has created a serious blemish on the city's reputation for good government. It may have also to some extent undermined Obama’s relations with college students and other activists who worked so hard for his election in this key state. And it certainly did not help the reputation of the Democratic Party in Pittsburgh or Pensylvania at large.
TIANANMEN FLASHBACKS
To journalists like me who happened to have been in Beijing in May 1989, during the buildup to the June 4th massacre in Tiananmen Square, Pittsburgh also bears an interesting resemblance. The analogy may sound a little strained, but bear with me.
(1) As in Beijing, there was a very large deputized police force from all over the country. These included over 1000 police "volunteers" (out of 4000 total police and 2500 National Guardsmen) who were ported in just for the G20.
According to the conventional wisdom, not being from the same community is likely to reduce your inhibitions when it comes to macing and kicking the crap out of unarmed, defenseless young people.
The guest policeman also included several hundred police who were under the command of Miami Police Chief John F. Timoney, pioneer of the infamous "Miami model"
for suppressing protest that was first deployed at the Miami Free Trade Area of the Americas Conference in November 2003. (Here’s the Miami model checklist, most of which was repeated in Pittsburgh.)
As one writer has observed, Timoney, who also served as Police Chief in Philadelphia, "(L)iterally transformed the city into a police state war zone with tanks,
blockades and “non-lethal” (but severely damaging) artillery."
It is unclear to what extent he played a similar role behind-the-scenes in Pittsburgh this year, but there certainly is a strong sulfurous odor.
(2) As in Beijing, In Pittsburgh there were no identifying badges on officers' uniforms, and they also refused to provide any identifying personal information in response to questions. Several photographers also complained about receiving threats and actual damage to their cameras.
(3) As in Beijing, there was simply no direct contest between the power of the security forces once they mobilized, and those of the unarmed students. The only kind of victory that the students could possibly have one in both cases was a moral one -- by essentially sacrificing their bodies and their rights to a tidal wave of repression.
Indeed, the "clash" theory of these events looks even odder once we take into account the fact that on Friday night in Pittsburgh, for example, unarmed students and protesters faced hundreds of police in full riot gear, armed for bear with equipped muzzled attack dogs, gas, smoke canisters, rubber bullets, bean-bag shotguns, pepper pellets, long-range pepper spray, at least four UH-60 Black Hawk helicopters (courtesty of New York Governor Patterson and his National Guard's 3-142nd Assault Helicopter Battalion unit), plus several brand new "acoustic cannons" (see below). There were also probably dozens of undercover agents provocateurs -- at least three of whom were actually "outed" by the students.
The police were also actively monitoring student communications on web sites like Twitter.
From this angle, a key difference with Bejing in 1989 was that the Chinese authorities felt genuinely threatened by the growth of student power and the democracy movement, and feared being ousted,from power. and were therefore able to justify their brutality as part of a zero-sum game. In the case of Pittsburgh, whatever police violence occurred was entirely gratuitous.
"I hereby declare this to be an unlawful assembly. I order all those assembled to immediately disburse. You must leave the immediate vicinity. If you remain in this immediate vicinity, you will be in violation of the Pennsylvania crimes code, no matter what your purpose is. You must leave. If you do not disburse, you may be arrested and/or subject to other police action. Other police action may include actual physical removal, the use of riot control agents, and/or less lethal munitions, which could risk of injury to those who remain."
The fact is that this warning was itself completely unlawful. Putting on the NYCLU lawyer's hat for a moment, absent a "clear and present danger" to the public peace, these threats violated the First Amendment's explicit recognition of right to "peacefully assemble.”
In effect, the fact is that the police and National Guard in Pittsburgh temporarily seized control over public streets, parks, and other public spaces, and exercised it arbitrarily. By the time the victims of these outrageous civil rights infringements have their day in court, the damage will have been long since done.
(5) As in Beijing, the police and military decided to launch their biggest raid late at night, after the summit had ended, most major media had gone home, and the courts had closed for the weekend.
GLOBAL COP TOYS Police behavior at all these global summits has evolved over time into a rather high-tech affair that would make Iranian crowd control experts turn bright green with envy. These sophisticated "phase array" device s emit a targeted 30-degree beam of 100+decibel sound that is effective up to several hundred yards, and is potentially very harmful to the human ear. The Pittsburgh units were apparently purchased by local sheriffs' departments across the country with the help of recent grants from the US Department of Homeland Security. Officially the grants have been justtified in the name of improving communications with the public, by permitting clearer voice channels (!), but that's a cover story -- the true purpose is crowd control. ( Roll tape: LRAD-500X_SDCo_Sheriff1). Other recent ATCO customers include the US Army (for "force protection" in Iraq and Afghanistan), and the US Navy and the navies of Japan and Singapore, for communicating with potentially-hostile vessels at sea. In 2008 ATCO flogged its wares at the biannual China Police Forum, Asia's largest mart for police security equipment. Obviously China would make a terrific reference customer, since it is one of the global front-runners in the brutal suppression of mass dissent. ATCO also has a 2007 contract with the US Marine Corps' "Joint Non-Lethal Weapons Program" to develop new, even more powerful weapons, euphemistically branded "acoustic hailing devices." Just two weeks before the Pittsburgh G20, they turned up in San Diego, where the Sheriff's Department provoked controversy by stationing them near a Congressional town hall forum -- just in case. This growing use of LRADs for domestic crowd control in the For all the homeland security technology buffs in the audience, you may rest assured that LRADs are hardly the only In the last decade the non-lethal weapons arena has exploded, and the US appears to be far ahead, assisted by ample R&D grants and purchase contracts from organizations like the Department of Justice's "National Institute of Justice," DHS's multi-billion dollar Homeland Security Grant Program, the U.S Coast Guard, and the Security Advanced Research Projects Agency, and DOD's Joint Non-Lethal Weapons Directorate (JNLWD) Program. The industry has also been aided by key contractors like ATCO, spearheaded by legendary engineer, inventor, and entrepreneur "Woody" Norris; and Penn State's Advanced Research Lab -- home of the Institute for Emerging Defense Technologies. NIJ also works closely with police organizations like PERF, and international organizations like the UK's Home Office Scientific Development Branch. In the first instance, the development of such non-lethal technologies is usually justified by their potential for providing an alternative to heavier weaponry, thereby reducing civilian casualties in combat situations. The fact that the US military now has at least 750 military bases around the world, and has also recently been playing an important "military policing" role in countries like Somalia, Haiti, Bosnia, Iraq, and Afghanistan, underscored DOD's rationale for these technologies. The problem is that just as in the case of the LRAD, once developed, it is very difficult to wall such technologies out of the US, or restrict them to "pro-civilian/pro-democratic" uses, like providing clearer amplification for outdoor announcements. Even aside from their technical merits, the competitive nature of the global law enforcement equipment industry virtually insures that every tin-horn US sheriff, as well as every Chinese party boss in Urumqi, will soon have access to these very latest tools in the arsenal for suppressing dissent. The ultimate irony, of course, is that the first generation of all these powerful new free speech suppressors have all been developed, not by authoritarian China, Iran, Burma or North Korea, but by US, ostensibly still the leader of the "Free World." TOYS IN THE PIPELINE So what's in store for those who are on the front lines of popular dissent?
We assume that some of the juiciest details are classified. But even a cursory review of public sources reveals that the following new crowd-control technologies may soon be
coming to an economic summit near you.
(See this recent UK review for more details.). ▣
"Area Denial Systems." This is a powerful new "directed-energy" device that generates a precise, targeted beam of "millimeter waves," producing an "intolerable heating sensation on an adversary's skin."
Under development by the US military since at least the late 1980s, this class of "non-lethal" weapons is now close to field deployment. Its key advantage over LRADs is that it has about ten times the range. Raytheon is already supplying its "Silent Guardian" version of the system to the US Army.
The next step required to bring this product to the police market will be to make it smaller and more mobile. According to this week's
New Scientist,
a new highly-portable, battery-powered version of the system, called the
"Thermal Laser,"
will soon become available -- though it has yet to show that demonstrate conclusively that it is within the bounds of the
UN Binding Protocol on Laser Weapons.
▣ New Riot-Control Chemicals and Delivery Systems. Subject to the dicey question of whether these new "calmative," drug-like agents are outside the boundaries of the 1993 Chemical Weapons Convention (to which the US and 187 other countries are signatories), these would not irritate their targets, unlike pepper spray or tear gas, but calm them down.
▣ Glue Guns. If all else fails, UK's Home Office reports that another approach to "less- lethal" crowd control weaponry is also making progress -- a gigantic glue gun that sprays at least some 30 feet, bemingling its target audience in one huge adhesive dissident-ball. Apparently still unsolved is the question of precisely what becomes of all those who are stuck together, or how the police avoid becoming entangled with them. But undoubtedly millions of pounds are being devoted to solving these issues even as we speak. SUMMARY I went to Pittsburgh last week on behalf of Tax Justice Network, a global NGO that is concerned about the harmful impacts that tax havens and dodgy behavior by First World banks, MNCs, lawyers, and accountants are having, especially on developing countries. I was under no illusion that the reforms we were rather politely advocating would quickly be adopted, but at least we'd say our piece, if anyone cared to listen. I came away with the depressing sense that the G20 summit, like its many predecessors, was never intended to be a listening post for independent, outside opinions. But even worse, it had actually become, in practice, an excuse for the criminalization of dissent in capital cities all over the globe, even in those that are nominally the most free, by way of the vast new security measures that it requires and subsidizes,and the repressive tactics that it legitimized. In this day and age, of course, we are told that almost any amount of security is too little. And this heightened sense of insecurity is certainly not aided by having the world's top 20 leaders regularly shuffling from pitstop to pitstop, trying to conduct the world’s business from a traveling roadshow. But I was struck by just how unnecessary, senseless, and counterproductive almost all of the repressive policing tactics deployed in Pittsburgh really were -- how they ran roughshod over many of our most precious freedoms, freedoms that we are supposedly trying to protect. And to what a degree whatever “terrorists” there are out there have already won, by succeeding in creating a society that is really is often ruled by fear instead of justice, by force instead of discourse. ***
For example, last week's G20 featured one of the largest US deployments ever against civilian demonstrators of "LRADS," or acoustic cannons.
Manufactured by San Diego's tiny American Technology Corporation (NASDQ: ATCO), the $37,500 so-call "500X" version of the sound cannon that was used in Pittsburg was developed at the behest of the US military, reportedly in response to the USS Cole incident in 2000, to help the Navy repel hostile forces at sea.
Until recently the most widely-publicized use of LRADS had been against Somali pirates. The devices have also been deployed against "insurgents" by the US military in Fallujah, by the increasingly-unpopular, anything-but-democratic regime of Mikhail Saakashvili in the Republic of Georgia, and by New York City at the RNC in 2005.
US is worrisome, not only because it is a potent anti-civil liberties weapon, because -- just like tasers, rubber bullets, OC gas, and other so-called "non-lethal but actually just "less lethal" weapons" -- they can cause serious injuries to ears, and perhaps even provoke strokes.
potential "less-lethal" free speech-and-assembly killers in the pipeline.
ated 135 miles east of Pittsburgh, has been especially active in advocating the advantages of such new chemical weapons.
Rather than, say, simply allowing the overwhelmingly non-violent demonstrators and students at that peaceful Friday night blues concert to have their say, instead some 200 people were arrested and scores were gassed, clubbed, rubber-bulleted, and imprinted with galling memories that will last a lifetime. The City of Pittsburgh and its residents will certainly be fighting criminal cases and civil rights law suits for years to come. I supposed we are meant to be consoled by the fact that, as the New York Times chose to emphasize this week, things are much more repressive in Guinea.
So perhaps it is time to establish a permanent location for all these global summits. Perhaps one of the Caribbean tax havens, like Antigua or St. Kitts, would do -- journalists always like the sun, and after TJN gets done with them, these havens are going to need to find a new calling anyway!
October 2, 2009 at 08:47 AM | Permalink | Comments (3)
Tuesday, February 12, 2008
John McCain: "No We Can't" Reviving The "Daisy" Strategy in 2008 James S. Henry
My friends: we have spent far too much time and treasure on the prolonged, intense, but ultimately intra-familial and largely issues-free beauty contest between Hillary Clinton and Barack Obama.
Now that that contest is finally drawing to a close, it is time for us to focus like a gamma-ray laser on the real enemy in the fast-approaching November 2008 Presidential election -- Senator John McCain, the bellicose 5'7" septuagenarian fly-boy from Arizona.
What is it about Air Force-trained Republican Senators from Arizona, anyway?
In many respects this year's race recalls 1964, when Senator Barry Goldwater, another war-mongering, outspoken, short-tempered Air Force veteran and Republican Presidential candidate from Arizona, scared the B'Jesus out of the entire country with his threats to use nuclear weapons preemptively ("Let's lob a nuclear bomb into the men's room at the Kremlin").
Usually such pro-war designs are kept well hidden until after the election, as the Bush Administration did in 2000 -- and, indeed, as President Lyndon Johnson did in the 1964 election, when he made Goldwater out to be a mad-man (the "Daisy" strategy," after the notorious political ad by that name: Download 20_johnson_64.mov). Johnson conveniently failed to tell the public during the election campaign that he was also a mad-man, already planning to park more than 500,000 US troops in Vietnam within a year.
In any case, not since 1964 have the Democrats faced a Republican candidate who is as openly pro-war as John McCain is. This should provide them with a remarkable opportunity for party unity, a clear brand, and victory in November.
However, it is very important to reunite the Party and get moving. McCain is already attracting fuzzy-minded support from moderate Democrats and independents who are beguiled by his tough-guy "maverick" image -- especially lower middle-class white males who are (a) bearing the brunt of this year's economic downturn, and (b) not entirely comfortable with voting for either Barack ("the black guy"_ or ("that woman") Hillary. Oddly enough, many of these folks also claim to be anti-war.
Partly because the Democrats have been so distracted by their own interminable (..19 debates??!...six months of primaries?) nominating process, the most telling criticisms of John McCain have so far been provided by his enemies among the Very Far Right Ranters (VFRRs), including leading professional ranters like Anne Coulter, Rush Limbaugh, and James C. Dodson. This crew complains that McCain doesn't quite pass muster on pet right issues like undocumented immigration, gay marriage, and tax cuts. Ironically, Barry Goldwater himself would have also failed these same litmus tests. Indeed, if the 1964 Presidential election had been fought on social issues and the economy rather than on war and peace, the former Air Force Major General from Arizona would most likely have carried many more states than the 6 that he did carry. Defeating Goldwater in 1964 may not have absolutely required the war-mongering issue, but it certainly helped.
Some conservatives have also criticized McCain's preference for voluptuous office assistants and fly-boy-style socializing. From their angle, he also lacks appropriate Christian zeal, was once involved in the shady "Keating Five" savings-and-loan scandal, and has an intermittent work ethic.
Indeed, in the last five Congresses he missed an incredible 21 percent of all Senate votes, including 56 percent in the current 110th Congress. This high rate of absenteeism is also no doubt partly due to the Presidential race, McCain's long-standing battle with cancer, and the fact that at age 71.5, he is already the oldest living leading Presidential candidate ever, having already lived longer than over half of all US Presidents.
The real problem for Democrats and independents, however, should not be McCain's lack of religious fervor, moldy old rumors about the Keating Five or extra-marital relationships, his age, or even his absenteeism, unless that is due to health problems.
And after this year's endless bouts of the smooth-talking ignoramus the Rt. Reverend Huckabee, the lack of religious zeal and ideological purity in a leading Republican candidate is really rather refreshing.
No -- our core problems with John McCain are twofold. First, whenever he actually manages to show up in the Senate and legislate, the results are usually far to the right of what most Democrats, independents, and sensible people in general stand for -- and what both Barack and Hillary, in particular, stand for.
For example, while Barack and Hillary have both earned lifetime voting scores from the American Conservative Union (ACU) of just 8 percent, McCain's lifetime score is 82. While this may be insufficient for VFRRs like Limbaugh and Coulter, it is well above the tail end of the Republican Senate distribution.
McCain may have mellowed slightly in recent years -- in 2006, for example, his ACU score was just 65. However, this is still higher than any Senate Democrat, and it is more than three times the 17 rating scored by McCain's turncoat friend Joe Lieberman. Indeed, on a wide range of key issues that progressives and independents should really care about -- from Supreme Court nominations and extending Bush's tax cuts for the rich to the State Children's Health Insurance program, setting a timetable for withdrawal from Iraq, and bankruptcy reform, and even on his own trademark issues like campaign finance, immigration, the definition of torture, and the Bush tax cuts, the senior Senator from the Grand Canyon state is usually a big disappointment.
Second, and even more important, on the most crucial issue of our time, the conduct of present and future wars, McCain appears to have quite frankly gone completely off the rails.
Misguided Democratic Party strategists like John Podesta, Mark Penn, and Bob Schrum notwithstanding, this issue of the war, and not just "the economy" or "health care," should be at center stage for this election.
This is precisely because, on the one hand, military affairs are supposed to be McCain's core competence, and because, on the other hand, he has gotten this central issue completely wrong.
As discussed below, while millions of Iraqis continue to vote with their feet and either flee abroad or stay there, McCain just keeps repeating the big lie that "the surge is working."
In fact the main reasons that US military casualties, and, to a lesser extent, Iraqi civilian casualties have dropped is not because of "the surge," but because (a) Baghdad has been ethnically cleansed, and is now a sharply divided, Shiite-dominated enclave; (b) Sunni insurgents, fed up with al-Qaeda, have decided temporarily to ally with the "occupiers" and assert control over the "foreign terrorists;" and (c) Iran has temporarily decided to cut down on its support for attacks on US troops, in the interests of undermining the "neocon" coalition in the US, Saudi Arabia, and Israel that is plumping for a McCain-style bombing. (See the video below).
None of this implies that the surge has achieved anything more than a kind of stop-gap temporary stabilization of this very ill patient's condition -- a Bush Adminstration effort that just happens to coincide with a Presidential election year. Since it is unlikely that the surge is sustainable, in terms of troops and dollars, and since its benefits are likely to be temporary, McCain should be compelled to explain on every possible occasion whether the slim increased chance that a Republican president will get elected is really worth the price.
But McCain is at least consistent. Apparently he also still believes that the Vietnam War could have been won with just a little more persistence and less interference from Washington.
For all his putative military experience, therefore, in the grand tradition of Major General/ Senator Goldwater and Air Force General Curtis {"Bombs Away") LeMay, in his 20 hours of flight time over North Vietnam, and his five years of captivity, apparently John McCain never
managed to learn the fundamental lesson that millions of ground troops have learned the hard way -- that guerrilla wars, and, indeed, wars on terror, are ultimately won or lost by political and economic development, not by military tactics. And, furthermore, that the blind over-application of military force to a hostile civilian population by an occupying army and Air Force can actually increase enemy resistance much faster than it can be controlled.
Far from repeating the 2004 Kerry campaign's central mistake and focusing this campaign only on the US economy, therefore, it will be vital for us to keep McCain's extraordinary appetite for war in plain view.
The more general question of why so many Air Force professionals -- including, for example, the Israeli General who was widely blamed for mismanaging last year's conflict with Hezbollah in Lebanon -- tend to systematically overestimate the efficacy of military power, will be left for another time. Plainly this is not just an Arizona malady.
For the interested reader, the following is a smattering of sundry provocative materials with respect to Senator McCain. Not all of it is worth taking seriously --- some of it even resembles the scurrilous attacks on John Kerry's war record in 2004, when McCain, it should be recalled, came to Kerry's defense. We've presented it here in the interests of of airing it out and redirecting our attention to the clear and present danger of a Republican Party that, even in its death throes, may still be able to unite around this "great white hawk" from Arizona.
"Both McCain III’s father and grandfather were Admirals in the United States Navy. His father Admiral John S. ”Junior” McCain was commander of U.S. forces in Europe - later commander of American forces in Vietnam while McCain III was being held prisoner of war. His grandfather John S. McCain, Sr. commanded naval aviation at the Battle of Okinawa in 1945. McCain III, like his father and grandfather, also attended the United States Naval Academy. McCain III finished near the bottom of his graduating class in 1958.
McCain III lost five U.S. Navy aircraft:
1 - Student pilot McCain III lost jet number one in 1958 when he plunged into Corpus Christi Bay while practicing landings.
2 - Pilot McCain III lost another plane two years later while he was deployed in the Mediterranean. ”Flying too low over the Iberian Peninsula, he took out some power lines which led to a spate of newspaper stories in which he was predictably identified as the son of an admiral.
3 - Pilot McCain III lost number three in 1965 when he was returning from flying a Navy trainer solo to Philadelphia for an Army-Navy football game. McCain III radioed, ”I’ve got a flameout” and ejected at one thousand feet. The plane crashed to the ground and McCain III floated to a deserted beach.
4 - Combat pilot McCain III lost his fourth on July 29, 1967, soon after he was assigned to the USS Forrestal as an A-4 Skyhawk combat pilot. While waiting his turn for takeoff, an accidently fired rocket slammed into McCain Jr’s. plane. He escaped from the burning aircraft, but the explosions that followed killed 134 sailors, destroyed at least 20 aircraft, and threatened to sink the ship.
5 - Combat pilot McCain III lost a fifth plane three months later (Oct. 26, 1967) during his 23rd mission over North Vietnam when he failed to avoid a surface-to-air missile. McCain III ejected from the plane breaking both arms and a leg in the process and subsequently parachuted into Truc Bach Lake near Hanoi. After being pulled from the lake by the North Vietnamese, McCain III was bayoneted in his left foot and shoulder and struck by a rifle butt. He was then transported to the Hoa Lo Prison, also known as the Hanoi Hilton.
The 1973 New York Daily News labeled POW McCain III a “PW Songbird”
On McCain III’s fourth day of being denied medical treatment, slapped, and threatened with
death by the communist (they were demanding military information in exchange for medical
treatment), McCain III broke and told his interrogator, ”O.K., I’ll give you military information if you
will take me to the hospital.” U.S. News and World Report, May 14, 1973 article written by former
POW John McCain.
It was then that the communist learned that McCain III’s father was Admiral John S. McCain, the soon-to-be commander of all U.S. Forces in the Pacific. The Vietnamese rushed McCain III to Gai Lam military hospital (U.S. government documents), a medical facility normally unavailable for U.S. POWs. By Nov. 9, 1967 (U.S. government documents) Hanoi press was quoting McCain III describing his mission including the number of aircraft in his flight, information about rescue ships, and the order of which U.S. attacks would take place.
While in still in North Vietnam’s military hospital, McCain III gave an interview to prominent
French television reporter Francois Chalais for a series titled Life in Hanoi. Chalais’ interview with
McCain III was aired in Europe.
Vietnamese doctors operated on McCain’s Leg in early December, 1967.
Six weeks after he was shot down, McCain was taken from the hospital and delivered to a
U.S. POW camp,
In May of 1968, McCain III allowed himself to be interviewed by two North Vietnamese
generals at separate times.” May 14, 1973 article written by former POW John McCain
In August 1968, other POWs learned for the first time that John McCain III had been taken
prisoner.
On June 5, 1969, the New York Daily News reported in a article headlined Reds Say PW Songbird Is Pilot Son of Admiral, “ . . . Hanoi has aired a broadcast in which the pilot son of United States Commander in the Pacific, Adm. John McCain, purportedly admits to having bombed civilian targets in North Vietnam and praises medical treatment he has received since being taken prisoner . . .”
The Washington Post explained McCain III’s broadcast: “The English- Language broadcast beamed at South Vietnam was one of a series using American prisoners. It was in response to a plea by Defense Secretary Melvin S. Laird, May 19, that North Vietnam treat prisoners according to the humanitarian standards set forth by the Geneva Convention.”
In 1970, McCain III agreed to an interview with Dr. Fernando Barral, a Spanish psychiatrist
who was living in Cuba at the time.
The meeting between Barral and McCain III (which was photographed by the Vietnamese)
took place away from the prison at the office of the Committee for Foreign Cultural Relations in
Hanoi (declassified government document). During the meeting, POW McCain sipped coffee and
ate oranges and cakes with the Cuban.
While talking with Barral, McCain III further seriously violated the military Code of Conduct by
failing to evade answering questions ”to the utmost of his ability” when he, according government
documents, helped Barral by answering questions in Spanish, a language McCain had learned in
school. The interview was published in January 1970.
McCain III was released from North Vietnam March 15, 1973 In 1993, during one of his many trips back to Hanoi, McCain asked the Vietnamese not to make public any records they hold pertaining to returned U.S. POWs. McCain III claims, that while a POW, he tried to kill himself.
McCain III was awarded “medals for valor” equal to nearly a medal-and-a-half for each
hour he spent in combat
For 23 combat missions (an estimated 20 hours over enemy territory), the U.S. Navy awarded
McCain III, the son of famous admirals, a Silver Star, a Legion of Merit
for Valor, a Distinguished
Flying Cross, three Bronze Stars, two Commendation medals plus two Purple Hearts and a
dozen service medals.
“McCain had roughly 20 hours in combat,” explains Bill Bell, a veteran of Vietnam and former chief of the U.S. Office for POW/MIA Affairs -- the first official U.S. representative in Vietnam since the 1973 fall of Saigon. “Since McCain got 28 medals,” Bell continued, “that equals to about a medal-and-a-half for each hour he spent in combat. There were infantry guys -- grunts on the ground -- who had more than 7,000 hours in combat and I can tell you that there were times and situations where I’m sure a prison cell would have looked pretty good to them by comparison. The question really is how many guys got that number of medals for not being shot down.”
For years, McCain has been an unchecked master at manipulating an overly friendly and biased news media. The former POW turned Congressman, turned U.S. Senator, has managed to gloss over his failures as a pilot and his collaborations with the enemy to become America’s POW-hero presidential candidate."
"Legendary Temper Could Undermine McCain" Friday, May 25, 2007 By RALPH VARTABEDIAN and MICHAEL FINNEGAN
SPECIAL FROM THE LOS ANGELES TIMES
"
An angry, profane exchange between Sen. John McCain, R-Ariz., and another Republican senator last week prompted a new round of questions about whether McCain's legendary temper is becoming a liability in his campaign for the presidency.
In a private meeting just off the Senate floor, McCain
got into a shouting match with Sen. John Cornyn, R-Texas, over details
of a compromise on immigration legislation. Cornyn accused McCain of being too busy with his campaign to take part in the negotiations, prompting McCain to utter, "F... you."
McCain
spokesman Danny Diaz acknowledged that a "spirited exchange" took place
but said media reports over the weekend had exaggerated its intensity.
McCain's political handlers have plenty of experience in explaining McCain's
salty language and strident attacks. His temper has ranged far and
wide, directed at other members of the Senate, congressional staffers,
heads of government agencies, corporate chieftains, high-ranking
military officers and teenage campaign volunteers.
McCain has shouted at people for any number of reasons, including errors of judgment, disagreements on public policy and even how to set up a podium. "In McCain's world, there aren't legitimate differences of opinions," said David Keene, chairman of the American Conservative Union, which differs with McCain on some conservative issues. "There is his way and there is evil. That is how he approaches issues. That is one of the reasons for conservative nervousness about him." His temper has been an issue for years. In the 2000 presidential primaries, McCain was dubbed "Senator Hothead" by Newsweek.
That year, he won endorsement from only a few Senate colleagues, not so much because of his conservative credentials but because of his frequent attacks and volatile personality. "McCain notes," which offer apologies after heated words, are held by many members of Congress. McCain has written about what he describes as his impatience in three books. "Although I try to refrain from being intentionally discourteous, I am demonstrative in showing my displeasure. I am often impatient and can speak and act abruptly," he wrote in "Why Courage Matters" in 2004. In a 1999 interview with the Los Angeles Times, McCain admitted, "I do everything I can to keep my anger under control. I wake up daily and tell myself, 'You must do everything possible to stay cool, calm and collected today.' "
One bureaucrat who felt McCain's wrath was former NASA administrator Daniel Goldin, who was called in by McCain in 1999, not long after a $125 million probe crashed on Mars because of confusion over the use of metric units. McCain's Senate Commerce Committee had oversight over NASA. "McCain went ballistic the moment Goldin walked into McCain's office," said a participant in the meeting. "He was shouting and using profanity, saying he was sick of NASA's screw-ups. It went on for a few minutes and then he kicked Goldin out of the office." Goldin started walking down the hallway but was summoned back to the senator's office by a McCain aide. "When he came back in, McCain started yelling at Goldin all over again. And then McCain kicked Goldin out a second time, before he ever said a word," the source said.
Julian Zelizer, a history and politics professor at Boston University, said the spectacle of a senator getting into "yelling matches with his colleague" undermines his leadership image. "It is an issue he needs to be cautious with," Zelizer said. Until the latest flap, McCain had managed lately to quell the image that he is easily angered. His campaign leadership took sharp exception to the entire matter, characterizing it as political theater. "If something is written every time members of Congress and leading politicians, behind closed doors, try to get the other's attention, and tempers flare, you'd run out of ink," said John Weaver, McCain's chief campaign strategist. Nonetheless, the issue was used effectively in the 2000 primaries by opponents who planted rumors that he was unstable because of his years as a prisoner of war in North Vietnam. Although some ex-POWs did have psychological problems, McCain came through the experience in good psychological shape, said Navy doctors.
As for his temper, "John McCain is John McCain," said Dr. Bob Hain, director of the Navy's Robert E. Mitchell Center for Prisoner of War Studies. Meanwhile, Democrats said McCain was in deep trouble on the matter. "Apparently, John McCain's do-anything-to-win campaign strategy doesn't include anger management classes," said Damien LaVera, Democratic National Committee spokesman. "We have had eight years of cowboy diplomacy and McCain is even more of a cowboy than the current president," said Roger Salazar, a Democratic political consultant who worked for John Edwards in 2004. "The public wants somebody who is strong but can sit across from allies and adversaries without lunging at them."
(c) SubmergingMarkets, 2008
February 12, 2008 at 03:45 PM | Permalink | Comments (0) | TrackBack
Monday, January 01, 2007
REMEMBERING THE GENERAL Part I: Overview James S. Henry
I was born a Chilean, I am a Chilean,
I will die a Chilean.
They, the fascists, were born traitors,
live as traitors, and will be remembered forever as fascist traitors.-- Orlando Letelier, 1932-76
Both Chile's General Augusto
Pinochet and Saddam Hussein, two formerly US-backed dictators, have at last had to confront Higher Authorities that they were unable to intimidate, compromise, or evade.
However, unlike Saddam, who was hanged in the middle of a night on December 30, 2006, by a nervous Iraqi Government tribunal, Pinochet managed to escape human justice for his crimes, and died of natural causes at the age of 91.
How does the General deserve to be remembered? Did he not richly deserve the same fate as Saddam? And how did he manage to avoid it?
Was he simply a ruthless, corrupt right-wing tyrant, the puppet of foreign interests and their handmaidens, like ITT, Nixon, Kissinger, the CIA, George H.W. Bush, Margaret Thatcher, and Reagan?
Or was he, as many of his defenders still maintain, an essential bulwark against the Leftist Horde in Latin America?
If perhaps not exactly the world's staunchest defender of political liberalism, was he at least -- as Thatcher, some neoliberal economists, The Wall Street Journal, and even supposedly "liberal" newspapers like The Washington Post now maintain -- a staunch defender of "free markets" who deserves much of the credit for Chile's economic performance since the 1970s?
As we'll see, most conventional portraits of General Pinochet are flat-out wrong, not only with respect to his alleged role in combating Soviet expansionism, but also with respect to his regime's alleged beneficial influence on Chile's economy.
First, Pinochet was at best only a non-essential bit player in the anti-Soviet struggle. Allende's broad-based social democratic "revolution" was never taken seriously by Moscow or Havana. Nor was it strong enough to mount a Cuban-style revolution, or even to precipitate a civil war. Left to its own devices, Allende's "leftish" alliance would probably have burned itself out by the next election or plebiscite in 1974.
Furthermore, even if Chile's leftists had somehow managed to create a "Soviet Republic of Patagonia," tiny Chile was already completely surrounded by other countries that had much greater strategic importance to the West.
By 1973, they either already had their own right-wing dictatorships (Brazil, Paraguay, and Bolivia), or were well on the way (Argentina and Uruguay).In short, killing off Chile's long-standing democracy was gratuitous -- the political equivalent of exaggeratinging Iraq's "slam dunk" WMD threat.
All the repression was for nothing.
On the economic front, Pinochet's interregnum was also a costly, needless detour.
Indeed, one key reason why Chile's so-called "economic miracle" has proved to be so successful in the long run -- with great help from human capital finally brought back home by many well-educated returning "Leftists" who were driven out of country in 1973-90 -- was precisely because Pinochet's first decade of experiments with "Los Chicago economics" proved to be so disastrous. Giving Pinochet credit for the subsequent corrective reforms is like crediting Leonid Brezhnev with last decade's revival of economic growth in Eastern Europe.
(For more details, see Parts II and III...)
January 1, 2007 at 01:52 PM | Permalink | Comments (0) | TrackBack
Thursday, November 30, 2006
ASSASSINATION POLITICS Learning the Lessons from Decades of "Conspiracies" James S. Henry
Conspiracy buffs of the world, rejoice! High-stakes political assassinations and the
inscrutable tales of intrigue that inevitably accompany them are back in the headlines!
In the last few months we've had new evidence surfacing about old cases like RFK and JFK that have been unresolved for decades.
We also have many exciting new cases emerging from places like London, Beirut, Moscow, and Gaza -- cases that promise to be unresolved for decades to come.
It cetainly won't be possible to resolve all these cases here, though a few winks and
nods toward our favorite theories will be hard to resist.
However, there are some very important implications to be drawn from examining these political assassination cases side-by-side -- especially for
the bloodless abstractions put forth by the tiny, vocal group of unabashed neoimperialists at the Council on Foreign Relations, the Harvard Law School, the National Review, and the American Enterprise Institute who have been trying to rehabilitate assassination as an acceptable tool of US foreign policy.
In recent weeks
we've been treated to a flurry of assassination news, including the dramatic polonium -210
poisoning of former KGB agent and Putin critic Alexander Litvinenko in London; the gangland-style slayings of investigative journalist Anna Politkovskaya and Andrei Kozlov, Deputy Governor of the Russian Central Bank, in Moscow; the fatal ambush of the Lebanese Christian Falangist leader Pierre Gemayel in Beirut; and UN approval for an international tribunal to pursue another Lebanese case, the February 2005 slaying of Prime Minister Rafik Hariri.
While players like the Russian mafia and other "private enemies" cannot be completely ruled out in these cases, it is suspected that most of them were "political assassinations," in the sense that the perpetrators were sponsored by hostile states or key factions within them, which were motivated by the desire to eliminate politically-influentlal enemies -- often across international borders.
In principle such political assassinations are to be distinguished from purely-terrorist attacks, as well as from attempts to eliminate "military" leaders -- for example, the June 2006 US Predator attack on Abu Musab Al-Zarqawi, the July 2006 explosion that killed the Chechnyan rebel Shamil Basayev, and Israel's innumerable targeted assassinations in the West Bank and Gaza.
In practice these distinctions often break down, given the fact that assassinations also terrorize, and that leaders like Basayev, Sheik Yassin, and Al-Zarqawi have also played important political roles in insurgent organizations.
But part of the price of being an insurgent from a state-less organization, rather than a conventional politician, journalist, agent of the state, or crusading bishop (Romero) is that one's enemies find it much more legally and socially acceptable, as well as more useful, to kill quite openly, and to take credit for the achievement.
This kind of official credit-taking rarely occurs for the type of cases cited earlier. Even if the targets happen to be corrupt politicians or blood-stained former KGB agents, they are deemed to be more "respectable" than the typical insurgent; indeed, conspiring to eliminate them is usually against the law. So responsibility must be hidden -- in many cases, for decades.
CASE REOPENED?
This brings us to the other recent events that have brought this subject back to the surface. These include the 43rd anniversary of the (by now faintly-observed) assassination of JFK on November 22, 1963 in Dallas, and the recent release of "Bobby," a feature film about events at the Ambassador Hotel in Los Angeles on RFK's last day, June 5, 1968.
They also include a striking news report that aired on BBC 2 on November 20, highlighting the new findings of filmmaker Shane O'Sullivan about the RFK assassination. According to O'Sullivan, a careful reexamination of photos taken of the crowd that fateful night at the Ambassador has disclosed the presence, in proximity, of at least three long-time CIA covert operatives who had already become notorious among JFK "assassination buffs" (we wear that label proudly) for other reasons. The men in question were not random associates -- they had all held senior positions in 1962-64 at JM/WAVE, the huge Miami CIA station that was heavily involved in anti-Castro plots and the recruitment of allies among Cuban exiles, US veterans, and the Mafia.
According to O'Sullivan, these were Gordon Campbell, the former Deputy Director of JM/WAVE; George Joannides, the former Director of Psychology Warfare at JM/WAVE; and most interesting of all, David Sanchez Morales, a senior assassinations and sabotage expert who also worked for the CIA in Venezuela, Uruguay, Laos, and Vietnam, and also reportedly developed a close relationship with Chicago mob boss John Rosseli. Roselli's body ended up in an oil drum off the coast of Miami, a week before he was supposed to testify before the House Select Committee on Assassination that was reinvestigating the JFK case.
November 30, 2006 at 03:58 AM | Permalink | Comments (0) | TrackBack
Saturday, August 19, 2006
BEYOND DEBT RELIEF The Next Stage In the Fight for Global Social Justice James S. Henry
“Third World debt relief” has become a little like Boston’s “Big Dig,” the Middle East “peace process,” and the “ultimate cure for cancer” -- long anticipated, endlessly discussed, and perpetually, it seems, just around the corner.
At the end of the day, after decades of effort, the fact is that very little Third World debt relief has actually been achieved.
There is also mounting evidence that even the paltry amount of debt relief that has been achieved has not done very much good.
This is partly because debt relief tends to reinforce questionable policies and bad habits that get developing countries into hock in the first place. It is also because debt relief has reinforced the prerogatives of IMF/World Bank econo-crats, whose policies have often been incredibly detrimental.
Finally, debt relief is also often a very poor substitute for other forms of aid and development finance.
Furthermore, most of the costs of debt relief have been born by ordinary First and Third World taxpayers, while the global banks and Third World elites that have profited enormously from all the lousy projects, capital flight, and corruption that were financed by the debt have escaped scot-free.
This is not to suggest that the debt relief campaign has been utterly pointless.
It has provided a bully pulpit for scores of entertainers, politicians, economists, religious leaders, and NGOs. It has occasionally reminded us of the persistent problems of global poverty and inequality.
It has also provided an excuse for some pretty good free concerts.
From the standpoint of actually providing enough increased aid to improve living conditions in debt-ridden countries, however, debt relief has been a disappointment. In the immortal words of Bono himself, "We still haven't found what we're looking for."
Fortunately, there is an alternative strategy that would have much greater impact. But this strategy would require a more combative stance on the part of anti-debt activists, and it would almost certainly not generate nearly as many convivial press conferences or photo opportunities.
“Fact Check, Please”
Surprisingly, there have been few efforts to take stock of debt relief efforts, to see whether this game has really been worth the candle.
It is high time that we took a closer look. After all, it is now more than 30 years since Zaire’s bilateral debts were rescheduled by the Paris Club in 1976, 27 years since UNCTAD’s $6 billion write-off for 45 developing countries in 1977-79, 23 years since the climax of the so-called “Third World debt crisis” in 1983, and more than a decade since the inauguration of the IMF/World Bank’s debt relief program for “Heavily-Indebted Poor Countries” (“HIPCs”) in 1996.
On the debt relief campaign side, it is two decades since the formation of the UK Debt Crisis Network, eight years since the 70,000-strong “Drop the Debt” demos at G-8’s May 1998 meetings in Birmingham, and over a year since the “Live-8/End Poverty Now” fiesta at Gleneagles.
Along the way, there have been Bradley Plans, Mitterand Plans, Lawson Plans, Mizakawa Plans, Sachs Plans, Evian Plans, and more than 200 debt rescheduling by the Paris Club on increasingly generous terms -- Toronto terms (’88-‘91), London (‘91-‘94) terms, Naples terms (’95-96), Lyon terms (’96-99), and Cologne terms (’99-).
Most recently, in the wake of “Live 8,” the G-8, the World Bank, and the IMF launched their “Multilateral Debt Relief Initiative” (“MDRI”) with a great deal of fanfare, declaring that it will be worth at least “$40 to $50 billion” to the two score countries that are eligible.
Realities
Despite all this activity, the fact is that developing country debt is now greater than ever before, and is still increasing in real terms. For most countries, the debt burden – as measured by the ratio of debt service to national income – is even higher than in the early 1980s, at the peak of the so-called “Third World debt crisis.”
By our estimates, as of 2006, the nominal stock of all developing country foreign debt outstanding was $3.24 trillion. This debt generated about $550 billion of debt service payment each year for First World banks, bondholders, and multilateral institutions.
That includes $41 billion a year that was paid by the world’s 60 poorest countries, whose per capita incomes are all below $825 a year. Even after twenty-five years of “debt relief,” this annual bill for debt service still almost entirely offsets the $40-$45 billion of foreign aid that these countries receive each year. Their debt burden also remains higher, relative to national income, than it was the early 1980s.
As discussed below, most heavy debtors also have very little to show for all this debt. So these payments are, in effect, a “shark fee” paid to First World creditors for funds that have long since vanished into the ether – and a not a few offshore private bank accounts.
Present Value
Since most existing Third World debt was contracted at higher interest rates than now prevail, the “present value” of the debt -- a better measure of its true economic cost -- is actually even higher: nearly $3.7 trillion.
China and India alone now account for about $.5 trillion of this developing country “PV debt.” Both countries were relatively careful about foreign borrowing, and they also largely ignored IMF/World Bank policy advice, so their debt burdens are small, relative to national income. But in absolute terms, their debts are large, simply because they are so huge. They can easily afford it -- thanks in part to their non-neoliberal economic strategies, both countries now have high-growth economies and large stockpiles of reserves.
Of the other $3.2 trillion of “PV debt,” however, $2.6 trillion is owed by 26 low-income and 49 middle-income countries that pursued “high debt” growth strategies.
These heavily-indebted countries have about 1.6 billion residents – over a quarter of the world’s population, a share that has been steadily increasing.
After decades of debt relief, their “PV debt/ national income ratios” are all in the relatively-high 60-90 percent range. Debt service consumes 4 to 9 percent of national income each year, more than they spend on education or health, and far more than they receive in foreign aid.
III. Where’s the “Relief”?
These numbers beg a question -- what have all the professional debt relievers at the World Bank, the IMF, and the Paris Club, not to mention debt relief activists, been up to all these years? How much debt relief have they actually secured, who received it, and how helpful has it been?
To begin with, it is not easy to measure “debt relief.” The definitions of debt relief employed by debtor countries, commercial creditors, bilateral creditors, and multilateral organizations like the IMF/World Bank, the OECD, the Paris Club, and the Bank for International Settlements vary significantly, and the reported data is subject to huge discrepancies. This helps to account for the fact that only a handful of systematic attempts to measure debt relief have ever been attempted.
As usual, however, some things can be said. This article provides the most comprehensive estimate of debt relief to date, based on a careful review of these data sources and our own independent analysis.
Overall Relief
Our first key finding is that the actual amount of debt relief provided to all developing countries to date has been pretty modest.
From 1982 through 2005, in comparable $2006 NPV terms, the total value of all low- and middle-income developing country debt that was “relieved” -- rescheduled, written down, or cancelled –- was only $310 billion -- just 7.8 percent of all the pre-relief debt outstanding.
Low-Income Relief
The relief ratio for the world’s 60 poorest countries has been higher – about 28 percent of their pre-relief debt levels. All told, in PV terms, these countries have received about $161 billion of debt relief – more than half of all the debt relief to date. This is now saving the recipient countries about $15.3 billion per year of debt service.
This is certainly nothing to sneeze at. But it is a far cry from the extra $50 billion to $100 billion per year of cash aid that most leading development experts believe will be needed if developing countries are to attain the (rather modest) “Millennium Development Goals” that were set back in 2000 by the UN, with a target date of 2015.
It is also important to remember that most low-income countries have been waiting a very long time for even this modicum of debt relief, most of did not start arriving until the late 1990s. By then, several countries that had not been “highly-indebted” to begin with had become so, just by dint of the delay.
Debt Relief Sources – Low-Income Countries
Our analysis shows that 30 percent of this low-income debt relief has come from the World Bank/ IMF’s HIPC and MDRI programs. Another 30 percent has come from Russia alone, which forgave a substantial load of bilateral debt that were owed to it by Nicaragua, Vietnam, and Yemen, when Russia joined the Paris Club in 1997. In February 2006, Russia also wrote off another $5+ billion debt that was owed by Afghanistan.
Finally, another $65 billion of debt relief for low-income countries was provided by the Paris Club, an association of First World export credit agencies (EGCs) like the US EXIM Bank and the UK’s EGCD. These agencies have a strong “client base” among the ranks of First World exporters, contractors, and engineering firms. All these private entities received significant business from the first round of Third World lending, in the form of orders for large projects. They are now eager to have the EGCs forgive still more loans, at taxpayer expense, in order to clear the way for another round of project finance.
On the other hand, leading global banks like Citigroup, UBS, JPMorganChase, Goldman Sachs, Deutsche Bank, BNP, and ABN-Amro, and Barclays, have provided a grand total of just $1.5 billion of low-income debt relief, mostly by way of the HIPC program.
In the 1970s and early 1980s, of course, these giant international banks led the way in syndicating loans for developing countries. At the same time, many of them also became pioneers in “private banking,” the dubious business of helping Third (and First) World elites park their capital offshore and onshore, as free of taxes and regulations as humanly possible.
Since the early 1990s, apart from China and India, these private banks have largely handed over the task of providing new loans to low-income countries to multilateral institutions like the IMF, the World Bank, and the IDB, as well as to the EGCs. Ironically, this has permitted them to focus on more lucrative Third World markets, including low-debt/ high-growth markets like China and India.
For middle-income countries, while the foreign loan business was booming in the 1970s and early 1980s, these banks became deeply involved in stashing abroad the proceeds of the banks’ own country loan syndicates. For low-income countries, private bankers were more often called upon to recycle the proceeds of loans from the development banks, the IMF, and the EGCs, as well as the proceeds of various government-owned asset rip-offs.
Overall, therefore, from the standpoint of debt relief, these First World financial giants have provided very little debt relief. This is despite the fact that they have not only reaped enormous profits from Third World lending, but also continue to reap enormous profits from Third World private banking. In the wake of the debt crisis, they have also been able to scoop up undervalued financial assets – banks, pension funds, and insurance companies – in countries like Mexico, the Philippines, and Brazil. In good times and in bad, in other words, these private institutions have always found ways to prosper, help their clients launder money, evade taxes, and conceal ill-gotten gains, and they have never been reluctant to profit from social catastrophe.
We will return to these financial giants below, because the history of their involvement in this story suggests one possible antidote for our “debt relief” blues.
B. Middle-Income Relief
So-called “middle-income” countries like Brazil and Mexico have received $149 billion of debt relief –- just 4.3 percent of their $3.4 trillion of pre-relief debt outstanding. As discussed below, most of this was obtained by the early 1990s, by way of Paris Club restructuring and the Brady Plan.
This reflected the high priority given to these large, lucrative, highly-indebted markets in the 1980s by First World banks and governments, mainly because such a large share of their loan portfolios was tied up in them.
That, indeed, was the true meaning of the “Third World debt crisis,” so far as First World bankers, central bankers, officials and, indeed, most First World journalists was concerned. It was viewed primarily as a ‘crisis’ for the banks and their shareholders. Over time, as they managed to reduce their exposure, the “crisis” disappeared from the headlines – except for the countries involved.
Debt Relief Sources – Middle-Income Countries
Overall, private banks provided $75 billion of debt relief to middle-income countries, about half the total. Most of this was achieved through debt swaps and buy-backs. The Paris Club added another $28 billion, mainly by way of traditional bilateral debt rescheduling.
The US Treasury added $47 billion, by way of the Baker Plan (1985-89) and the Brady Plan (1989-95.) On its own, the Baker Plan actually increased middle-income country debt by $77 billion, consuming $45 billion of US taxpayer subsidies in the process.
From 1995 to 2002, the US Treasury, the World Bank, and the IMF also provided short-term financial relief to several large middle-income countries like Argentina, Brazil, Mexico, and Indonesia. In theory, these were pure reschedulings, with all loans paid back with interest, and no net impact on “PV debt” levels.
In practice, several of these bailouts were completely mismanaged. Indonesia, Mexico, and Argentina were all permitted to use their emergency dollar loans to bail out dozens of domestic banks and companies -- which just happened to be connected to influential members of the local elite, who were also “not unknown” to leading private bankers and US Treasury Secretaries.
So a large share of these bailout loans was wasted on outright graft. On the other hand, countries were still expected to service the bailout loans, often at very high interest rates. Given their reluctance to raise taxes, especially on capital, most countries repaid the bailout loans by boosting domestic debt – in effect, by printing money. For example, Mexico’s bailout in the mid-1990s ended up costing the country’s taxpayers more than $70 billion, while Indonesia’s bailouts ended up costing the country at least $50 billion. In effect, the bailouts actually ended up increasing overall country debt levels, just as the Baker Plan had done. Our estimates of debt relief have generously omitted the impact of these bailouts, which would make the total amount of debt relief even smaller.
Overall, during the 1970s and 1980s, middle-income countries like Argentina, Brazil, Indonesia, Iraq, Mexico, the Philippines, Russia, Turkey, and Venezuela became the world’s largest debtors. Combined with the fact that they have also received so little debt relief since the early 1990s, this helps us to understand why their debt service costs soared to all-time highs since 2000, in real terms, and relative to national income. Recent debt relief programs have focused almost entirely on low-income countries, ignoring the situation of heavily-indebted middle-income countries. This is another strategic choice that debt relievers may want to reconsider.
The Political Economy of “Debt Relief”
So what’s gone wrong with debt relief? Why has so little been achieved after all these years? Whose interests have been served, and whose have been ignored or gored? Is there a different strategy that could have been more effective?
A. The Roots of the “Debt” Crisis
To understand this disappointing debt relief track record, it will be helpful to review the origins of the so-called “Third World debt crisis.” This continuing crisis had its roots in the fact that from the early 1970s to 2003, developing countries absorbed more than $6.8 trillion of foreign loans, aid, and investment, much more foreign capital than they had ever before received.
A handful of developing countries managed this enormous capital influx more or less successfully -- for example, Asian countries like Korea, China, India, Korea, Malaysia, and Vietnam. For a variety of historical reasons, they were able to resist the influence of First World development banks and private banks. Today they are the real winners in the globalization sweepstakes, ranking among the world’s fastest growing economies and the First World’s most important suppliers, customers, and potential competitors.
Our concern here is not with this handful of winners, but with the great majority of the world’s 150 developing countries. In general, compared with the winners, they have been much more open to unrestricted foreign capital and trade since the 1970s, as well as policy advice from the “BWIs” (the Bretton Woods institutions – the World Bank and the IMF). For many countries this close encounter with global capitalism has proved to be troublesome – indeed, for many, disastrous.
In effect, these countries have conducted a very risky policy experiment for several decades. By now the results are clear. Across country income levels, these countries have paid a very heavy price for unfettered access and dependence on foreign banks. Indeed, we are hard-pressed to find a single exception to the miserable track record of this “wide open, debt-heavy, bank-promoted” growth strategy.
Lousy Regimes and Unproductive Debts
Overall, we estimate that more than a trillion dollars – at least 25 to 35 percent -- of the $3.7 trillion foreign debt that compiled by low- and middle-income countries from 1970 to 2004 either disappeared into poorly-planned, corruption-ridden "development" projects, or was simply stolen outright.
For several of the largest debtors, like the Philippines, Indonesia, Mexico, Brazil, Venezuela, Argentina, and Nigeria, the share of the debt that was wasted was even higher. Indeed, one of the most important patterns underlying the “debt crisis” was that borrowing, wasteful projects, capital flight, and corruption were all concentrated in a comparative handful of countries. As we’ll argue, this is crucial fact for those who seek to revitalize the debt relief movement to understand, because it implies that the interests at stake are far greater than those that have come to the surface in the struggle for “low income” debt relief.
Low-Income Heavy Borrowers
In the case of the 48 low-income countries that eventually qualified for debt relief from the BWIs under the HIPC and MDRI programs, a similar pattern of concentration applies. In the early 1980s, the real value of these countries’ debts increased by 70 percent in just six years. By the time the World Bank got around to launching HIPC in 1996, their debts had increased another 7-10 percent. Just 11 of these low-income countries –- including Bolivia, Congo Republic, Cote d’Ivoire, DR Congo, Ethiopia, Ghana, Mozambique, Myanmar, Nicaragua, Sudan, and Zambia -- accounted for 68 percent of this group’s debt increase from 1980 to 1986.
All these top low-income borrowers were not only desperately poor to begin with, but they were also either “weak open states” run by kleptocratic dictators, or were caught up in bloody civil wars – in most cases, both at once. Sometimes the causality flowed in both directions -- excess debt could exacerbate political instability. But the primary relationship was the unsavory combination of weak states, corrupt leaders, wide open capital markets, and symbiotic relationships with “easy money” and seductive bankers.
Extending this analysis to the key middle-income debtors noted above, we find similar long-run patterns of mis-government, weak states, and wide-open banking.
All this suggests that the heaviest debtors got into troubles for reasons that only were only superficially related to the usual villains in the orthodox neoliberal account of debt crises -- “exogenous shocks,” “policy errors,“ “liquidity crises,” and – when pushed to acknowledge the existence of corruption and capital flight – a “lack of transparency in the management of natural resources.” Those countries that are deepest in debt and most in need of relief today include countries that have long been among the most consistently mis-governed, wide-open, and “mis-banked.” While natural resource wealth like minerals and oil have indeed often turned out to contribute to economic mismanagement, their presence is not a sufficient condition for such mismanagement – the decisive question is the relationship between foreign and domestic elites.
From the standpoint of debt relief, this pattern presents a dilemma –Without insisting on deep political reforms, simply providing countries with more relief alone might accomplish little – they are likely to dig themselves right back into a hole. After all, corrupt dictatorships like the Central African Republic have been more or less continuously in arrears on their foreign debts since at least 1971!
The Debt/Flight Cycle
Servicing these huge unproductive debts took a large bite out of these countries’ export earnings and government revenues, draining funds that were badly needed for health, education, and other forms of public investment, and helping to produce crisis after financial crisis. Growth, investment, and employment were throttled by the continuing need – enforced by First World creditors -- to generate enough foreign exchange to service the loans.
Meanwhile, even as all this foreign capital was rushing in, an unprecedented quantity of flight capital – including a substantial portion of the loan proceeds – headed for the exits.
Of course Third World capital flight is an old story, associated with long-standing factors like individual country political risk, unstable currencies, bank secrecy, the rise of “offshore havens,” and the absence of global income tax enforcement.
But the dramatic increase in poorly-managed financial inflows to the developing world in the 1970s and early 1980s – especially foreign loans and aid – boosted these capital outflows by an order of magnitude. They basically overwhelmed existing political institutions in many countries, producing the largest tidal wave of flight capital in history, and fundamentally revolutionizing offshore private banking markets.
We simply cannot account for this sharp increase in flight capital unless we take into accounts its close relationship to all this “lousy lending and loose aid.”
Poorly-controlled lending and foreign aid contributed to the rise of global flight capital in the first place. From one standpoint it did so in a purely mathematical sense, by providing the foreign exchange that was needed to finance capital flight. But that doesn’t explain why these new “loanable funds” didn’t become a net addition to investment in the borrowers’ economies. The loans also stimulated additional capital flight, for several reasons: (1) they destabilized the economies of many newly-indebted countries, providing more capital than they could productively absorb in a short period of time; (2) the inflows provided sources of government revenue that were not directly responsible to taxpayers. This generated enormous opportunities for corruption and waste, partly by way of poorly-planned projects with weak financial controls, and partly by providing Finance Ministers, central bankers, and other insiders with dollars they could use to speculate against their own currencies; (3) the debt flows laid the foundations for a new, highly-efficient global haven network, which made it possible to spirit funds offshore and stash them in anonymous, tax-evading investments. It is no coincidence that this network was dominated by the very same global banks that led the way in Third World syndicated lending.
All this combined to encourage Third World officials and wealthy elites to move a significant share of their private wealth offshore, even as their own governments were borrowing more heavily abroad than ever before.
Part of the resulting flight wave took the form of large stocks of strong-currency “mattress money” that was hoarded by residents of Third World countries -- especially $100 bills, Swiss francs, Deutschmarks, British pounds, and after 2002, €100, €200, and €500 notes. By 2006, for example, the total stock of US currency outstanding was $912 billion. At least two-thirds of it was held offshore, especially in developing countries with a history of devaluations.
An even larger amount of capital flight was accounted by private “elite” funds that were spirited to offshore banking havens – often, it turns out, with the clandestine assistance of the very same First World banks, law firms, and accounting firms.
The outflows that resulted from this “debt-flight” cycle were massive -- by my estimates, an average of $160 billion per year (in real $2000), each year, on average, from 1977 to 2003.
Furthermore, a great deal of this flight capital was permitted to accumulate offshore in tax-free investments, especially bank deposits and government bonds by nonresidents, which were specifically exempted from taxation by First World countries. By the early 1990s, he total stock of untaxed Third World private flight wealth soon came to exceed the stock of all Third World foreign debt.
Indeed, for the largest “debtors,” like Venezuela, Nigeria, Argentina, and Mexico – the same countries that dominated borrowing -- the value of all the foreign flight wealth owned by their elites is almost certainly now worth several times the value of their outstanding foreign debts.
For so-called “debtor” countries, therefore, the real problem was never simply a “debt” problem; it was an “asset” problem – a problem of collecting taxes, controlling corruption, managing state-owned resources, and recovering foreign loot. All this, in turn, was based on the fact that a huge share of private wealth had simply flown the coop, under the “watchful eyes” of the BWIs, other multilateral institutions, Wall Street, and the City of London.
Meanwhile, these countries’ public sectors – and ultimately ordinary taxpayers – were stuck with having to service all these unproductive debts, while their legal systems, banking systems, and capital markets also ended up riddled with corruption.
Conventional economists have not ignored these phenomena completely. But they have tended to compartmentalize them into “institutional” problems like “corruption” and “transparency,” and have treated them as “endogenous” to particular countries. In this approach, the individual country is the appropriate unit of analysis. In fact, however, such local problems were greatly exacerbated by a global problem – the structure of the transnational system for financing development, on the one hand, and for stashing vast quantities of untaxed private capital -- from whatever source derived -- on the other.
Human Capital Flight
This underground river of financial flight was also accompanied by an increased outflow of “human capital” as well, as large parts of the developing world became jobless and unlivable, and a significant share of its precious skilled labor decamped for growth poles like Silicon Valley and other booming First World labor markets. My own estimate for the net economic value of this displaced Third World “human flight” wealth, as of 2006, is $2.5 to $3.0 trillion.
This offshore human capital does send home a stream of remittance income that is now estimated at $100 billion- $200 billion a year. But much of this is wasted on high transfer costs and other misspending. Clearly, a country that chooses to depend heavily on labor exports – as the Philippines, Mexico, Haiti, and Ecuador have done, is a poor substitute for generating jobs and incomes at home.
Summary – Roots of the Crisis
Overall, the impact of the patterns just described on Third World incomes and welfare has been devastating. Except for the handful of globalization winners that managed to avoid the “debt trap” and neoliberal nostrums, real incomes in the Third World basically stagnated or declined from 1980 to 2005. While growth has revived since then, especially among commodity exporters, large parts of the developing world are still struggling to regain their pre-1980 levels of consumption, social spending, and domestic tranquility.
In addition to prolonged stagnation, many countries have also experienced sharp increases in unemployment, poverty, inequality, environmental degradation, insecurity, crime, violence, and political instability, all of which were exacerbated by the debt-flight crisis.
Of course, instability was sometimes beneficial – in Argentina, Bolivia, Brazil, Chile, Guatemala, Indonesia, Kenya, Mexico, the Philippines, and South Africa, financial crises helped to undermine autocratic regimes. But we should be able to democratize without so much hardship.
All these Third World troubles provided a striking contrast to the First World’s relative prosperity during this period. To be sure, there were brief hiccups at the hands of oil price spikes in 1973 and 1979, plus recessions of 1982-83, 1990-91, and 2001-03. Japan stagnated in the 1990s, and France and Germany also experienced prolonged doldrums. But these were the exceptions. Overall, a large share of the world’s poor basically treaded water, while most First World residents paddled by. (continued on page 27)
B. “Can’t Get No Relief!”
Whatever one thinks of neoliberal policies, therefore, it is very hard to make this track record look like an achievement. This perspective should help us to view “debt relief” in a different light.
Given this history, we might well have expected that at least by now, First World governments, the BWIs, and even the global private banking industry would have acknowledged their partial responsibility, pitched in, and offered to share a large portion of the bill.
Obviously this hasn’t happened. As the sidebar discusses, this is not because of any principled opposition to “debt relief” per se. Indeed, debt relief turns out to be a venerable capitalist institution, at least where the debtors in question have clout.
Nor was it possible for the countries themselves to agree on a unilateral moratorium on debt service. More generally, while a handful of individual countries -- Argentina in 2001-2, Russia after World War I, and Cuba in the early 1960s and 1980s –- have declared debt moratoria on their own, Third World debtors as a whole have never been able to marshal the collective will needed to take this step.
Given this, the only alternative has been to rely on voluntary actions by First World creditors, as accelerated by appeals to conscience. We’ve seen the rather modest results that this approach has achieved.
Several key factors are at work here:
• Sticks. Most developing countries believe they are too dependent on the trade finance and aid to risk outright defiance of international creditors.
• Carrots. Many members of the Third World elite have been “bought in.” One common reward is the opportunity to participate in international ventures and receive foreign loans and investments. Beyond that, there is a whole range of other incentives, including offshore accounts, insider profits, and outright bribes and kickbacks. There are also more subtle forms of influence -- Dow Jones board seats (Mexico’s Salinas), positions at prestigious universities, banks and BWIs (Mexico’s Zedillo at Yale, Argentina’s Cavallo at NYU, (Bolivia’s ex-Finance Minister Juan Cariaga) and any number of other former officials at the World Bank/ IFC) participation in other exclusive organizations (for example, the Council of the Americas, the Council on Foreign Relations, or the Inter-American Dialogue), and even more subtle forms of ideological influence. These intra-developing world networks have been relatively weak.
• The Banking Cartel. Compared with the debtor countries, the global financial services industry is very well organized. Country specialists at leading banks and BWIs have dealt with the same debt problems over and over again, while on the country side, dozens of debt negotiators have come and gone. Specialists like Citigroup’s William Rhodes and Chase’s Francis Mason were adept at isolating more militant countries and exploiting inter-country rivalries. Boilerplate language in standard country loan and bond contracts – for example, jurisdiction and cross-default clauses – also helped to perpetuate the “creditor cartel.”
• Declining Political Competition. After 1990, the Soviet Empire ceased to be a serious competitor for Third World affections. Interestingly, from that point on, the real value of total First World aid and aid per capita to developing countries fell until late 1990s. Meanwhile, First World banks completed write-downs of Third World loans, and the BWIs and other official institutions displaced them as the principle source of new low-income loans. With credit risk effectively transferred to the public sector, and the largest debtors focused on the neoliberal reforms that the BWIs were demanding in exchange for debt relief, debtor country support for joint relief atrophied.
With country debtors so fragmented, “small-scale” debt relief became just another instrument of neoliberal reform, while the cause of “large-scale” debt relief was relegated to the NGO community, without much developing country involvement. The resulting “movement” was a loosely-run coalition of First World NGOs and well-meaning celebrities. Lacking a strong political base, the movement mounted a series of intermittent media campaigns. It also assumed the supplicant position of appealing to the “better selves” of politicians like Tony Blair and George Bush, central bankers, and BWI bureaucrats – a hard-nosed, flea-bitten bunch if ever there was one.
The Best-Laid Plans…
One factor that certainly has not played a role in the failure to achieve substantial debt relief is a shortage of clever proposals from the First World policy establishment.
Indeed, ever since Third World borrowing took off in the 1970s, there has been a plethora of schemes for “international credit commissions,” “debt facilities,” debt buybacks, debt-equity swaps, and “exit bonds.” In the last decade, as frustrations with HIPC grew, there have also been proposals for a new “sovereign debt restructuring agency,” global bankruptcy courts, and modifications in the boilerplate contracts noted above.
These proposals provided grist for a steady stream of journal articles and conferences, but very few made much practical difference. The overall pattern was one of cautious incrementalism -- a series of modest proposals, each one just slightly more ambitious than its predecessor, and all doomed to be ineffectual – but with the saving grace that at least no powerful financial interests would be offended.
A. The Baker Plan
The majority of today’s Third World population was not even born in October 1985 when Reagan’s second Treasury Secretary, James A. Baker III, announced his “Baker Plan” for debt relief. This acknowledged the fact that the market-based debt rescheduling approach to the debt crisis pursued by commercial banks since 1982 wasn’t working. Indeed, traditional rescheduling was aggravating the problem, because banks had ceased to provide new loans, while continuing to role over back-due interest at higher and higher interest rates.
The Baker Plan hoped to change this by offering a combination of new loans funded by US taxpayers and the MFIs, plus some private bank loans, in exchange for “market reforms” in the recipient countries. It was motivated by the conventional notion that the 1980s debt crisis was basically a short-term “liquidity” problem, not a reflection of deeper structural interests. Supposedly a fresh round of (government-subsidized) new loans, conditioned on reforms, would allow debtor countries to “grow their way” out of the “temporary” crisis.
By 1989, the Baker had produced a grand total of $32 billion of new loans, mainly to 15 middle-income countries like Mexico and Brazil. This was achieved at a cost of $45 billion to First World taxpayers, by way of the US Treasury. By comparison, the gross external debt of all developing countries at the time was about $1 trillion, so the amount of relief provided was relatively small. Indeed, to the extent that the Plan added $77 billion to Third World debt, it actually constituted negative debt relief.
Finally, of course, both Plans omitted almost all low-income countries completely, partly because First World exposure to them was limited, and partly because at that point, the notion of writing down “development loans” was still anathema to the World Bank and the IMF.
B. “Market-Based” Debt Relief
While observers were waiting for the Baker Plan to work in the late 1980s, private banks were also busy retiring to manage some $26 billion of debt on their own, by way of so-called “market-based” methods, including buy-backs and debt swaps. Some of these techniques had harmful consequences for the countries involved. They also tended to reinforce the de facto “takeover” of the Third World debt problem by the BWIs and other official lenders. With our support, however, they succeeded in offsetting part of the Baker Plans’ harmful effect on debt levels, however.
C. The Brady Plan
When these two approaches failed to make much of a dent in the problem, James Baker’s successor, former Wall Street investment banker Nick Brady came up with a more aggressive debt swap plan in March 1989. The key motivator was not just generosity. Brazil’s February 1987 attempted moratorium on interest payments had set a dangerous precedent, and Mexico’s rigged July 1988 Presidential transition, combined with its huge debt overhang and declining oil prices, suggested that a more widespread default might occur unless more debt relief were forthcoming.
Under Brady’s plan, first implemented by Mexico in July 1989, private banks agreed to swap their country loans at 30-35 percent discounts for a menu of new country bonds, whose interest and principle were securitized by bonds issued by US Treasury, the World Bank, the IMF, and Japan’s Export-Import Bank – backed up, in turn, by reserves from the debtor countries.
By the end of the Brady Plan in 1993, this “semi-voluntary” incentives scheme had provided another relatively small dose of relief, mainly to about 16 Latin American, middle-income countries like Argentina, Brazil, and Mexico, plus US favorites like Poland, the Philippines, and Jordan. With the help of taxpayer subsidies, it also succeeded in virtually wiping out the debts owed by several small developing countries – Guyana, Mozambique, Niger, and Uganda – to private banks. By 1994, just prior to Mexico’s “Tequila Crisis,” the Brady Plan had yielded about $124 billion (in $2006 NPV terms) of debt reduction – at a cost of $66 billion in taxpayer subsidies. To date, it remains the largest – and most costly -- initiative in the entire debt relief arena.
Some have argued that Brady Plan also had a beneficial indirect effect on the total amount of new loans and investments received by debtor countries in 1989-93, by way of its impact on equity markets and direct investment. However, these gains were more than offset by increased capital flight, leaving a net benefit to developing countries that was almost certainly lower than the initial First World tax subsidies.
Furthermore, any such gains were largely wiped out by the subsequent financial crises in Mexico, Argentina, Brazil, Nigeria, Peru, and the Philippines in 1995-99. These were partly due to the brief surge of undisciplined borrowing, facilitated by the Brady Plan Indeed, while the early 1990s produced a reduction in debt service relative to exports and national income for the 16 countries, by the end of 1990s, most of the “Brady Bunch” had seen their debt burdens return to pre-Plan levels.
Overall, therefore, this provides a graphic illustration of the point noted earlier: without basic institutional reform – not just “market” reforms within one country, but more general reforms of the global financial system – debt relief in one period may just lead to increased borrowing and another crisis in the next.
D. “Traditional” Bilateral Relief – Low Income Countries
As noted, these early debt relief initiatives were focused mainly on the world’s largest debtors, although a handful of low-income countries took advantage of them. By the late 1980s, there was a growing recognition of the trend described earlier – that the debts of low-income countries were exploding.
These countries were also paying astronomical debt service bills, despite the fact that they had all qualified for “concessional” finance. By 1986, 19 out of the (future) 38 HIPC low-income countries were devoting at least 5 percent of national income to servicing their foreign debts, and many countries were paying much more. On average, debt service consumed over a third of their export revenues, compared with less than 10 percent a decade earlier. And the “present value” of their low-income country debt had continued to rise throughout the Baker/Brady Plan period. By 1992, the debt was three times the l980 level, and well above the 1986 level. Finally, from 1985 on, private bank lending to low-countries had only been exceeded by lending by development banks and export credit agencies.
One of the first to recognize the need for a closer focus on low-income debt was another UK Chancellor, Nigel Lawson. In 1987 he proposed that the Paris Club refocus its negotiations with debtor countries on trying to reduce their “debt overhang” – the present value of their expected future debt service payments. This was a striking contrast to conventional debt relief, where the goal of rescheduling had always been to avoid write-downs and preserve the loans’ present value by stretching out repayment. Once again, that had assumed that the key debt problem was one of “illiquidity” and that the nasty random shocks would soon reverse themselves. As Lawson and other observers had come to recognize, in the absence of serious intervention, the resulting “debt overhang” might just become permanent.
Lawson’s proposal launched the Paris Club on a prolonged series of debt restructurings. In the next decade, it conducted 90 bilateral restructurings with 73 individual countries, on increasingly-generous term sheets. By 1998, this effort – supplemented by assistance for debt swaps from the World Bank/IDA’s Debt Facility -- had produced another $95 billion of debt relief.
E. HIPC
In September 1996, the BWIs established the “HIPC Initiative,” their first comprehensive debt relief program ever, targeted at “heavily-indebted developing countries.” They didn’t take this initiative unilaterally – they were responding to numerous complaints from NGOs and the debtor countries, who said that existing relief programs were not doing enough for the world’s poorest, most insolvent countries, and that it was also high time for multilateral lenders like the IMF and the World Bank to finally share the costs.
Initially the program was supposed to include the 41 low-income countries that had been included on the World Bank’s first list of “HIPCs” in 1994. That list was supposed to have been determined by objective criteria, including real income levels and the “sustainability” of projected debt service levels, relative to projected exports. But such criteria are of course anything but objective, especially where acute foreign policy interests are concerned. The original list of countries would have included all those with per capita incomes less than $695 in 1993, plus (a) PV debt to income ratios of at least 80 percent, or (b) debt service to export ratios of at least 220 percent. Those criteria would have admitted such major debtors as Angola, Nigeria, Kenya, Vietnam and Yemen. On the other hand, it would have also omitted future HIPCs like Malawi, Guyana, and Gambia. As of 1996, the countries on this original HIPC list accounted for $244 billion of debt and 672 million people – about 63 percent of all low-income country debt and more than a third of all low-income country residents.
Qualifications
For a variety of reasons – including shifting admissions criteria, the desire of the BWIs to contain costs, and sheer geopolitics – this initial list was soon altered. Seven countries, including several large low-income debtors like Kenya, Nigeria, and Angola, were eliminated, while nine much smaller countries suddenly qualified for relief. When the dust settled, there were still precisely 41 countries on the HIPC debt relief list. However, compared with the original list, as of 1996, they now only accounted for 39 percent of all low-income country debt –- indeed, only 6 percent of all developing country debt -- and just 23 percent of all low-income country residents.
This downsizing was partly just due to BWI self-interest. The World Bank is a self-perpetuating bureaucracy, funded by its own long-term bond sales, as well as by First World contributions. It is always very concerned about securing its own cash flow and debt rating.
In principle, contributions from the BWI’s First World members could always make up any shortfalls. In practice, however, the World Bank liked to avoid having to solicit contributions from the US Congress – it always meant difficult hearings where the Bank had to explain where Togo or the Comoros was, and why it deserved assistance.
Initially the BWIs had proposed to fund HIPC debt relief by liquidating part of the IMF’s huge 3.22 metric tons of gold reserves, whose market value had increased to several times book value. Indeed, in 1999-2000, the IMF had conducted a round-trip sale and buyback of 12.9 million ounces with Brazil and Mexico, booking the profit to fund HIPC’s initial costs. Here, however, another powerful set of interests intruded. The BWIs’ proposal for a much larger gold sale were successfully scuttled by the World Gold Council’s lobby, whose membership includes 23 leading global gold mining companies, including the US’ Newmont Mining, South Africa’s AngloGold, and Canada’s Barrick Gold Corp.
So debt relief turned out to be something that the BWIs had to fund on a “pay as you go” basis, through bond sales and periodic contributions from its First World members. The larger the amount of debt relief, the smaller the World Bank’s own loan portfolio, and the more it feared that its own bond rating and financial independence might be jeopardized. So it had an innate bias in favor of providing less debt relief.
As for the precise list of qualifying countries, there were many anomalies. For example, as of the mid-1990s, Angola, Kenya, Nigeria, and Yemen all had higher debt burdens and lower per capita incomes than many of the countries on the final HIPC list, but they were excluded.
On the other hand, at the behest of France, HIPC analysts also designed specific rules so that the Ivory Coast would be included, despite the fact that it had a higher per capita income and lower debt burdens than many other countries on the list. Guyana, a bauxite-rich former British colony in northeast South America with a population of just 750,000 and a real per capita income of $3600 – clearly a “middle income” country, if anyone cared to object – was also admitted.
Meanwhile, HIPC excluded 29 other mainly middle-income countries that had been classified by the World Bank itself as “severely indebted,” including “dirty debt” leaders like Argentina, Ecuador, Indonesia, Pakistan, and the Philippines. In many cases their debt burdens were much heavier than those that were admitted to the HIPC club. (continued below)
All these exclusions were important, because it turned out that while the “HIPC 38” did reduce their debt service payments by about $2 billion a year from 1996 to 2003, debt service payments by non-HIPC low income countries actually increased by several times this figure.
Overall, the BWI’s filters with respect to “sustainable debt” and income were inconsistently applied. They were intended to contain the size of debt relief and focus it on tiny, more malleable countries.
The Long March
Debt critics were naturally a little disappointed at HIPC’s modest scope, relative to the size of all outstanding Third World debt. But at least they thought they could count on the BWIs to provide speedy debt relief to those countries on the HIPC list.
Unfortunately, even for those countries, the journey usually proved to be a very long march. The World Bank and the IMF decided to impose a long, drawn-out, tortuous process before countries actually got any relief, conditioning it on a menu of all the BWIs favorite neoliberal reforms, including privatization, tariff cuts, and balanced budgets.
This was especially hard to account, in light of the fact that the HIPCs on the final list were hardly prime prospects for First World banks, contractors, or equipment suppliers. Fully half had populations smaller than New Jersey’s, with per capita incomes averaging less than $1100, and average life expectancies of just 49 years. So offering this crowd debt relief was unlikely to set a dangerous “moral hazard” precedent.
Nevertheless, under the original 1996 “HIPC I” scheme, countries were supposed to spend three years implementing such reforms under the WB/IMF’s watchful eye before they reached a “decision point.” Then a debt relief package would be assembled and a modest amount of debt service relief would be approved.
Countries were then supposed to continue their good behavior for another 3 years before reaching the “completion point,” at which point they’d finally see a serious reduction in debt service.
Even then, they wouldn’t receive a total debt write-off, but only a partial subsidy, reducing debt service to a level that the WB/IMF considered “sustainable,” relative to projected exports.
Along the way, countries were also expected to draw up an IMF/World Bank-approved “Poverty Reduction Strategy Paper,” negotiate a “Poverty Reduction and Growth Facility,” and engage the IMF and the World Bank in regular, rather intrusive “Staff Monitoring Programs.”
To some extent, all this policy paternalism was justified by the fact that, as we’ve seen, many of these countries were unstable, poorly-governed, war-torn places. This is the old “more sand, same rat-holes” aid dilemma noted earlier – those countries most in need of assistance are also often precisely the ones with the most limited ability to use it wisely. Furthermore, under the influence of neoliberal policies, state institutions in many of these countries have become even weaker.
However, from the standpoint of delivering debt relief in a timely fashion, the BWI’s strictures clearly went beyond the pal. Many BWI technocrats adopted a kind of righteous, almost creditor-like stance toward the countries – perhaps because, after all, the BWIs are substantial creditors. They may also prefer gradual debt relief because this preserves their control. In any case, all of this is a poor substitute for the more constructive neutral role that, say, a “trustee in bankruptcy” would typically play in bankruptcy proceedings.
Combined with country backwardness, this creditor-cum-neoliberal-reformer mentality had predictable results. Indeed, if HIPC’s true goal was to avoid giving meaningful debt relief, it almost succeeded! By 2000, just six countries – Bolivia, Burkina Faso, Guyana, Mali, Mozambique, and Uganda - had managed to reach “completion,” and zero debt relief had been dispensed. Eventually, HIPC I afforded a grand total of $3.7 billion of debt relief to these six countries. Even this amount was not distributed immediately in most cases, but was spread out over decades. For example, Uganda’s debt service relief from the World Bank was stretched out over 23 years, Mozambique’s over 31 years, and Guyana will still be collecting $1 million per year of debt relief in 2050!
Would that First World creditors and the BWIs had been anywhere near as circumspect about making loans to developing countries as they have been about administering debt relief!
HIPC II
In June 1999, following the massive “Drop the Debt” rallies at the May 1998 G-8 meeting in Birmingham, the WB/IMF launched “HIPC II,” supposedly a faster, more generous version of HIPC I. But even this version soon proved to be embarrassingly slow. By 2006, of the 38 countries on the initial HIPC list way back in 1996, just 18 had reached the “completion point.” Eleven others had reached their “decision points,” after a median wait of 49 months, but five of these were reporting “slow progress.” Of the other original nine, just one was both ready to qualify and interested in participating.
To fill out the ranks, in 2006 the WB/IMF identified six more low-income countries that might still be able to qualify for HIPC relief before the curtains finally descend in December 2006. However, only two of these were both ready and willing to try for this deadline.
All told, compared with the original target group, at the end, HIPC was down to providing debt relief to countries that accounted for just 18 percent of outstanding low-income debt and 13 percent of the world’s low income population.
The HIPC Sweepstakes
Those countries that managed to navigate all the HIPC hurdles did finally receive some debt relief – all told, for HIPC I and HIPC II, a grand total reduction in debt service of $832 million per year for 2001-2006, compared with debt payments in 1998-99. This sum was divided among for all 27 countries that had reached their completion or decision points.
Some countries did much better than others. For example, middle-income Guyana progressed quickly through the program, qualifying for debt relief to the tune of $937 per capita from both HIPCs – compared with the “HIPC 38’s” average of just $75 per capita. Indeed, Guyana became something of a pro at debt relief – by 2006, it had achieved a record total of $2971 for each of its citizens, from all debt relief programs to date.
Sao Tome, Nicaragua, Congo Republic, Guinea-Bissau, Zambia, Bolivia, DR Congo, Mozambique, Mauritania, Sierra Leone, Ghana, and Burundi also did relatively well on a per capita basis, all realizing more than $100 of HIPC relief per citizen.
In terms of the share of all HIPC relief received, the clear winner was DR Congo, Mobutu’s old stomping ground, which commanded an astounding 18.2 percent of al HIPC relief, and, indeed, nearly 8 percent of all First World debt relief received by low-income countries.
In these terms, other winners included Nicaragua (9.5% of HIPC, 10.8% of all relief), Zambia (7.2%/4.9%), Ethiopia (5.7%/5.5%), Ghana (6.2%/2.6%), Tanzania (5.8%/4.8%), Bolivia (3.7%/4.2%) and Mozambique (5.8%/6.7%), which single-handedly captured 55 percent of HIPC I’s $3.7 billion benefit.
Compared with our original list of “war-torn debt-heavy dictatorships,” there is a huge overlap: The top ten low-income borrowers in 1980-86 accounted for more than half of both HIPC relief and all First World debt relief distributed from 1988 through 2006. On the other hand, many other indebted low-income countries received much less debt relief, both in per capita and absolute terms.
This per country/ per capita debt relief analysis, presented here for the first time, underscores several of the most serious problems with using debt relief as a substitute for development aid.
Of course it is difficult to insure that reductions in debt service (or the increased borrowing that occur in the aftermath of debt reductions) will be applied to worthy causes. (“The Control Problem.”)
Even apart from that, as noted in the accompanying tables, the amount of relief available varies wildly across countries, according to factors that may have very little to do with development needs. (“The Correlation Problem.”)
The BWIs in charge of the HIPC program tried to tackle the “Control Problem” by insisting on country “poverty reduction” programs and policy reforms, and by monitoring government spending, and so forth. Whether or not that has worked is a matter of dispute – there is a strong case to be made that most of this conditionality was counterproductive. Clearly it succeeded in slowing down the distribution of relief.
But there is nothing that HIPC could do about the “Correlation” problem – the lack of proportionality between debt relief and development needs. Relying on debt relief, in other words, inevitably means that some of the worst-governed, most profligate countries in the world may reap the greatest rewards.
Overall HIPC Results
As noted, HIPC does appear to have reduced foreign debt service burdens somewhat, especially for the 18 countries that managed to complete the program – although domestic debt service may be another story.
However, 11 of the original 38 HIPC countries still had higher debt service/income ratios in 2004 than in 1996. Indeed, to this day, poor Burundi is still laboring under a PV debt/income ratio of 91 percent!
Furthermore, debt service ratios had already declined for 25 out of the 38 countries from 1986 to 1996, prior to HIPC’s existence. Debt service burdens also declined for many other low-income countries that didn’t enroll in HIPC, as well as for the 9 “pre-decision point” countries that have so far received no relief from it. So it is not easy to call the HIPC program a “success,” even for those countries that have been able to reach the finish line.
What is also indisputable is that the total amount of debt relief achieved by HIPC to date has been very modest. While conventional press accounts often refer to HIPC as providing at least “$50 to $60 billion” of debt relief to developing countries, the more accurate estimate is at most $41.3 billion by 2006. This is less than 10 percent of all low-income country debt outstanding.
Of this, $7.6 billion was awarded to the original six countries in the HIPC I program, and another $33.7 billion is expected to be received by the other 23 countries that have at least reached the “decision point.” The potential cost of providing relief to the remaining 9 to 15 countries that might still qualify for HIPC is estimated at $21 billion, but very little of this will ever be forthcoming. Indeed, the timing and levels of relief are still highly uncertain for half of the 11 “decision point” countries.
Once again, all these figures refer to the present values of expected future debt service relief, not to current cash transfers. As of 2006, only a third of HIPC I’s relief and less than 20 percent of HIPC II’s had actually been “banked” – an average of less than $1 billion of cash savings per year, to be divided up among all these very poor countries.
The High Costs of HIPC Relief
Even these modest savings were not cost-free to the countries involved. To comply with the BWI’s demands for HIPC relief, developing countries were required to the usual panoply of neoliberal reforms, many of which had perverse political and economic side effects. There are many examples that illustrate this point.
F. MDRI
Our final stop on the debt relief train is the “Multilateral Debt Relief Initiative” (“MDRI”), announced with so much fanfare at the July 2005 G-8 meetings. On closer inspection, this debt relief plan was even less impressive and generous than HIPC.
By 2004, many debtor countries and First World NGOs had finally had it with HIPC. However, MDRI only really came together because the UK Chancellor, Gordon Brown, saw a chance to earn some political capital, make up for the UK’s lagging foreign aid contributions, and heal some of the bad feelings that had been generated by the UK’s support for the Iraq War, all at very little cost.
With HIPC already set to expire, and with so much low-income debt still outstanding, Brown decided to work closely – and indeed help to fund -- the Live 8/”End Poverty Now” alliance’s “free” concerts. The collaboration with the NGOs was facilitated by the fact that one of Brown’s senior advisors, a former UBS banker, was an Oxfam board member, while Tony Blair’s senior advisor on debt policy was Oxfam’s former Policy Director.
These connections no doubt smoothed the reception for Brown’s proposals in the NGO world, but they ultimately failed to achieve very much incremental debt relief for poor countries.
To begin with, the actual cash value of the debt relief provided by MDRI is far less than the "$40 to $50 billion" that was widely touted in the press.
The face value of the IMF, World Bank, and African Development bank debts of the low-income countries that may be eligible for cancellation adds up to about $38.2 billion.
But MDRI’s debt relief, like HIPC’s will not distributed in one fell swoop. Given the concessional interest rates that already applied to most of the loans in question, and that fact that many of them were already in arrears, the actual debt service savings that these countries may realize from the program is just $.95 billion per year, on average, distributed over the next 37 years, to be divided among 42 countries.
This may appear to be a modest sum to First World residents who are used to seeing much larger sums spent on farm subsidies, submarines, highway programs, and invasions of distant countries. But it is undeniably a large share of the $2.9 billion that the top 19 likely qualifiers for the program spend each year on education, or the $2.4 billion they spend on public health.
Still, the G-8 debt cancellation gets us just 6 percent of the way home toward, say, the Blair/Brown Commission for Africa’s proposed $25-$30 billion per year of increased aid for low-income countries in Africa.
It also compares rather unfavorably with the $1.3 billion per week that the Iraq War was costing in 2005, and the $2 billion a week that it is costing now.
Furthermore, to qualify for this MDRI relief, countries will still have to go through many of the same hoops that HIPC put them through. At least 8 countries among the 42 – including large debtors like Somalia and the Sudan -- may never meet these qualifications.
Even for the top 19 countries that are likely to qualify, MDRI will still leaves them with $23.5 billion of higher-priced bilateral government debt and private debt that are outside the program, with an annual debt service bill of $800 million a year. And here again, of course, the point bears repeating – the countries have virtually nothing to show for all these debts.
Finally, even assuming - optimistically - that MDRI’s 42 potential beneficiaries would otherwise continue to pay the $.7 billion to $1.3 billion of debt service owed to the BWIs and the AfDB over the next 37 years without arrearages or defaults, the "net present value" of this debt cancellation is not $40 billion, but at most $15 billion. In fact, given the likelihood that some debtors may not qualify for the program, the PV of expected MDRI debt relief is really closer to $10 billion.
In fact, from the standpoint of World Bank and African Development Bank bondholders, they may well prefer to have their member countries to take them out of these "dog countries."
Indeed, that might even be a very profitable deal for the World Bank, since its cost of funds is not the 3-3.5 percent paid – if and when they pay -- by these low-income debtors, but at least 4.7 to 5 percent. Assuming that the members of the World Bank’s Executive Board will honor their pledges, exchanging a stream of highly-uncertain debt service payments from these benighted countries for $10 billion to $15 billion of cold hard cash may look like a pretty good deal for the Bank. Certainly it is better than having to play bill collector to all those nasty hell-holes.
And I bet you thought “debt relief” was all about generosity!
VI. Summary – A Modest Proposal
So what are the key lessons from this saga for would-be debt relievers? And where should debt campaigners focus their energies now?
1. Beyond the BWIs.
As we’ve argued, it is no accident that twenty-five years after the debt crisis, some of the poorest countries on the planet, as well as many middle-income countries, continue to be struggling with their foreign debts.
If we accept the basic premise of debt relief – that debtors who have become hopelessly in debt deserve a chance to wipe the slate clean, once and for all, then our conventional approach to debt relief, as administered by the IMF, World Bank, the US Treasury, and the Paris Club, is a failure. Not only has it failed to deliver the goods, but it has also had very high operating costs, in term of delays, administration, and excessive conditionality.
Evidently it was not enough that so much of loans that these countries borrowed was wasted, stolen and laundered right under the noses of our leading banks. Debtor countries were then expected to jump through elaborate BWI policy hoops, testing out all their favorite policy prescriptions in order to avoid having to continue paying for it for the rest of their lives.
In particular, the huge World Bank and IMF bureaucracies have proved to be far better at rationing debt relief than at making sure that impoverished countries don’t get up to their eyeballs in debt in the first place.
Indeed, Russia alone – which is itself still heavily-indebted -- has been far more generous and expeditious with developing countries than the BWIs.
If we are really serious about providing substantial amounts of debt relief, we will to find or design new institutions to administer debt relief.
2. Beyond Narrow Debt Relief.
It not really surprising that First World governments and the BWIs tend to side with international creditors -- as, indeed, governments have often sided with landlords, enclosers, gamekeepers, slave-owners, and other propertied interests.
What is surprising is that, despite the very high stakes for developing countries, and the availability of so much potential mass support for a fairer solution, the debt relief campaign has been so ineffective.
This is no doubt partly just because it is difficult to sustain a global not-for-profit campaign across multiple activists and NGOs. It is also because the campaign faces powerful entrenched interests.
But another difficulty may be of our own making. Compared with the dire needs of many countries and the sheer volume of “dubious debt” and capital flight, we believe that the debt relief movements’ demands have simply been far too meek.
To make a real difference, the debt relief movement needs to get much tougher on two closely-related but necessarily more contentious aspects of the “debt” problem:
(1) Dubious debt, contracted by non-democratic or dishonest governments and wasted on overpriced projects, shady bank bailouts, cut-rate privatizations, capital flight, and corruption. As noted earlier, my own rough estimate is that such debt may account for at least a third of the $3.7 trillion of developing country debt outstanding.
(2) The huge stock of anonymous, untaxed Third World flight wealth that now sits offshore – much of it originally financed by dubious loans, as well as by resource diversions, privatization rip-offs, and other financial chicanery.
Most of this wealth – estimated at $4 trillion to $5 trillion for the Third World alone – has been invested in First World assets, where it generates tax-free returns for its owners and handsome fees for the global private banking industry.
Obviously the sums at stake here are much larger the debt relief campaign has tacked so far. The issue also affects middle-income debtor countries as well as low-income ones. Finally, it also begs the question of the on-going responsibility of leading private global financial institutions, law firms, and accounting firms that built the pipelines for Third World flight capital, and continue to service it. Since the 1980s, several of these institutions have become many times larger and more influential than the World Bank or the IMF.
If the debt relief movement had the will to tackle such problems, there is much that could be done.
For example, we could imagine:
(1) Systematic debt audits, and a global asset recovery institution that helped developing countries recovery stolen assets;
(2) Revitalization of the “odious debt” doctrine, which specifies that debts contracted by dictatorships and/ or spent on non-public purposes or personal enrichment are unenforceable.
(3) Promotion of international tax cooperation and information exchange between First and Third World tax authorities – including as one early step the creation of a “Tax Department” at the World Bank, which doesn’t even have one!
(4) Codes of conduct for transnational banks, law firms, accounting firms, and corporations, prohibiting their active facilitation of dubious lending, money laundering, and tax evasion.
(5) The enactment of a uniform, minimum, multilateral withholding tax on offshore “anonymous” capital – the proceeds of could be used to fund development relief.
Many other ideas along these lines are conceivable. Obviously a great deal of organization and education across multiple NGOs would be needed to tackle even one of them. But the most important requirement is nerve – the willingness to move beyond the debt movement’s all-too-narrow focus, to tackle the real issues in this arena.
3. The Limits of Debt Relief
Earlier in this essay, we expressed serious doubts about the "more sand, same rat-holes" approach to wiping out debts, increasing aid and "ending poverty."
As we argued, most of the prime candidates for debt relief would also have great difficulty in managing it. This skeptical viewpoint has recently received even more support -- there are disturbing reports that the corrupt leaders of poorly-governed, resource-rich countries like DR Congo and Malawi are squandering the debt relief that they’ve recently received on fresh rounds of dubious borrowing and arms purchases.
The fundamental problem, glossed over by many debt movement campaigners, is that combating poverty is not just a question of malaria nets, vaccines, and drinking water. Ultimately it requires deep-rooted structural change, including popular mobilization, and the redistribution of social assets like political power, land, education, and technology. These are concepts that BWI technocrats, let alone film stars and rock stars, may never understand.
On the other hand, it remains the case that poor people in debt-ridden countries are in dire need of almost any short-term relief whatsoever. In that spirit, it would be wonderful to see the debt movement, the G-8, and the BWIs join hands just one more time and finally deliver on their long-standing rhetorical commitment to deliver substantial debt relief.
As we’ve just seen, the 1.6 billion people who reside in heavily-indebted developing countries are still waiting.
***
(c) SubmergingMarkets, 2006
August 19, 2006 at 01:23 AM | Permalink | Comments (0) | TrackBack
Tuesday, July 04, 2006
DEFENDING THE FIRST AMENDMENT ON LONG ISLAND Federal Judge Orders Southampton Village to Allow Free Speech On July 4th!! James S. Henry
(Note: The following is a brief account of this year's conflict between the First Amendment and the Village of Southampton, New York, by Tony Ernst, a reporter for WPKN/ WKPM, 89.5 in Bridgeport, Connecticut.)
=========================================================
In Southampton Village, Long Island, a dispute over whether advocacy groups for the Bill Rights and against the Iraq war can march in the July 4 Independence Day parade was resolved Monday morning by a Federal Judge.
The First Amendment rights of the groups were affirmed by Judge Joanna Seybert of the District Court in Islip.
Judge Seybert issued an order directing that the plaintiffs will be able to march and freely engage in political speech at the July 4 parade in Southampton Village, without interference from Village authorities.
Last month, members of the Peconic Quakers, the South Fork Unitarian-Universalists,the East End Bill of Rights Defense Committee, and the East End Vets were told by organizers of the parade, the Village of Southampton's "Commission on Veterans Patriotic Events," that they could not march with signs of protest as they had done in previous years.
James S. Henry, the attorney for the plaintiffs, remarked on the irony of having to go to court to exercise his constitutional rights on July 4th.
A law suit filed by the plaintiffs is still pending.
Those wanting to join the marchers should meet at 9:30am on Tuesday July 4
at the parking lot of Our Lady of Poland Church on Maple Street south of the Southampton Railroad station.
***
(c) SubmergingMarkets, 2006
July 4, 2006 at 09:22 AM | Permalink | Comments (0) | TrackBack
Sunday, February 26, 2006
ANOTHER CONJUGAL DICTATORSHIP? Twenty Years Later, Near-Martial Law Returns to the Philippines James 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.
February 26, 2006 at 12:03 AM | Permalink | Comments (2) | TrackBack
Saturday, July 02, 2005
TIME'S ARROW A Media Conglomerate's Fateful Decision to Undermine Investigative Journalism James 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
July 2, 2005 at 12:40 PM | Permalink | Comments (2) | TrackBack
Friday, June 24, 2005
GREEN-'HOUSING' GAZANS James S. Henry and Andrew Hellman
The US government, the Palestinians, and indeed most Israelis are delighted that the Sharon Government has finally stood up to some settler extremists, and is still on track to pull out of the Gaza Strip by mid-August.
However, we should all pay closer attention to the precise way that the Israelis are leaving. There appear to be several missed opportunities to leave a much healthier economic base for Gaza's 1.4 million Palestinians when the Israelis leave-- a necessary, if not sufficient, condition for eventual peace.
In particular, Israel is now on a path to dismantle or destroy over 1500 homes and 1000 acres of greenhouses, which already provide thousands of jobs for Palestinians, and might provide thousands more....
GHETTO-FICATION?
At current course and speed, Israel may be missing a huge opportunity to help Gaza become something more than – in the words of Muhammad Dahlan, the Palestinian disengagement coordinator – "a giant prison camp,"
with 35 percent unemployment, 77 percent poverty, a youthful population whose median age is 16, no seaport, a
unusable airport, and few visible means of support other than foreign
aid, rock-throwing, and amateur rocket-building.
No wonder that Hamas has been able to recruit a huge base of
supporters there. It won seven out of ten local council seats in Gaza's municipal elections last December, and would likely have soundly defeated Mahmoud
Abbas' Fatah Party in the Palestinian parliamentary elections that were
originally scheduled for July 17th, but were postponed by Abbas indefinitely in
June.
URBAN DE-RENEWAL
One missed opportunity is housing. At a recent press conference, Secretary of State Rice stated that 1,600 Israeli settler’s houses will be destroyed. The official rationale is that such single-family homes are not economically viable for the Palestinians in Gaza.
In reality, however, that rationale was just for public consumption,
insisted upon by the Sharon Government for PR purposes. With more than
1 million Gazans to consider, surely there are of course quite a few
elderly couples, young couples, and smaller families who might have
used the houses. They also have other potential uses -- business and
government offices, clinics, even guest houses for visiting tourists,
if the area ever stabilized.
The truth is that the houses will be destroyed for much less defensible reasons. First, it is widely viewed as one of the easiest ways to insure that the 8,500 Israeli
settlers actually leave once and for all.
Only 284 families had signed up for compensation under the Evacuation Compensation Law, and officials are expecting more violence between Israelis and Palestinians as the August 15th disengagement approaches.
From Israeli's standpoint, the destruction also prevents
the politically dangerous image of victorious Palestinians waving Hamas
flags on the roofs of former settler's homes, celebrating another
Lebanon-like eviction.
GREENHOUSE WEALTH
Greenhouses could be an even more important missed opportunity. Currently, there are about 1000 acres of Israeli-owned state-of-the-art greenhouses in Gaza. They are worth up to $80 million and employ about 3,500 Palestinians. The fruits and vegetables that they produce account for 15% of Israel’s agricultural exports, mainly to Europe. According to agricultural experts, they might potentially provide as many as 7,000 regular jobs, supporting, in turn, up to 30,000, and perhaps stimulating the growth of related industries.
In short, figuring out a way to keep the greenhouses going could provide stable jobs and incomes for tens of thousands of Gazans, continued good business for Israel, and also offer an opportunity for Israelis and Palestinians to show a little badly-needed cooperative spirit.
However, while the fate of these greenhouses is still being negotiated, and the idea of preserving them has some advocates, the outlook for them at this late date is grim.
According to two Israeli sources in a position to know, the most likely scenario is for the greenhouses to be dismantled and relocated elsewhere, or just demolished and replaced with new greenhouses at new settlements in Nitzanim, just 12 miles from Gaza.
These sources mentioned several key obstacles to a Gaza greenhouse idea.
First, with no seaport and Israel unwilling to permit Gaza to have air rights, and no highway to the West Bank, the perishable goods produced in these greenhouses could not reach the international market unless other transport arrangements are made.
Second, Israel's settler certainly have no good will toward the Gazans, and Israel's agro-businesses don't want to, in effect, put the Palestinians into business to compete with them. A deal would have to be worked out for joint marketing and profit sharing, as well as compensation for the value of the greenhouses. Presumably the World Bank or USAID might be willing to finance such a solution, as they've indicated. Indeed, James Wolfensohn, former World Bank President and Special Envoy for Gaza Disengagement, has evidently been trying to work out such a solution. The Dutch Government has also offered to buy them for the Palestinians.
Third, some have expressed concerns that the Palestinians may not be able to protect the greenhouses from looting by their own people -- though Palestinian sources deny that this is a real concern.
More generally, there is no question that Israelis and Palestinians have little love lost for each other. Right now the Israeli Government is focused on leaving as quickly and safely as possible, and the Palestinians are focused on just having them go. Left to their own devices, there will be no "win-win" solution.
June 24, 2005 at 06:48 PM | Permalink | Comments (0) | TrackBack
Tuesday, February 01, 2005
IRAQ’S ONLY ELECTION More Lipstick on the Pig? James S. Henry
On Sunday January 30, according to the official results finally released on February 13, 8.46 million Iraqis, or 58 percent of Iraq’s 14.6 million registered voters, seized the opportunity to
participate in a “free election” of sorts. They voted for candidates and parties that most of them had never heard of, marked ballots that a majority of
them could not read, walked for miles to secret polling booths under the
watchful eyes of a foreign occupation army that had “collaterally” killed, injured or
brutalized tens of thousands of their fellow citizens,
and defied threats from thousands of other blood-thirsty, anti-democratic insurgents.
About 265,148 of those who voted were located outside the country -- just 13 percent of all the relatively affluent Iraqis who live abroad. Indeed, on Election Day, a large fraction of the Iraqi elite, and many officials in the interim government, were not to be found in the country -- like many members of the Iraqi elites, they had decamped for Jordan, Dubai, or London, anticipating that the insurgents would strike hard.
These non-resident voters did include some 56,568 Iraqis who voted from Iran, 15,062 who voted from Syria, and 11,409 who voted from the UAE -- places that are not otherwise known for holding free elections. That might indeed be viewed as one small victory for "democracy" in the Middle East.
But most ordinary Iraqis had little choice but to stay in Iraq, and a majority of them braved all the difficulties -- including 260 attacks and more than 50 fatalities -- to vote.
Clearly the Iraqi people deserve much credit for this electoin-day bravery – especially those who tried to vote in more heavily Sunni
Arab districts where the insurgents have been most active.
Indeed, for once, this display of bravery was something about Iraq that most international leaders could agree on.
In President Bush’s words, “The Iraqi people themselves made this election a resounding success.” The UN’s Kofi Annan described the Iraqi people as “courageous.” Britain’s Tony Blair reported that he was “humbled” – no mean accomplishment in itself. Even Iran’s Foreign Minister Kamal Kharrazi, perhaps anticipating a Shiite victory, and hoping that this will accelerate a US withdrawal, pronounced the elections a "success" and a "sign of nobility of the Iraqi people.”
It is clear as well that the long-suffering Iraqi people also deserve
our respect for simply having survived more than three decades of costly wars, occupations,
international embargoes, and a brutal dictatorship – aided, armed, and abetted
by several of the very same foreign powers that are now boasting so loudly about being the
midwives of Iraq democracy.
Despite all the collateral damage, the security forces -- mainly
unknown young Iraqi, American, and British soldiers -- who protected these voters also deserve credit. Without this protection, even with all the Iraqi bravery,
there would have been no election. These efforts go a long way toward repaying the moral debt that is owed to the Iraqi people for the Great Powers’ decades of complicity with authoritarian regimes in Iraq, their failure to reckon with Saddam much earlier, and the fact that the Bush Administration and its friends have otherwise botched this latest intervention so thoroughly.
Does anyone else deserve credit for this achievement? Precisely what has been accomplished, at what cost? And when will the Coalition be able to withdraw its troops? Our answers may surprise you.
ANY OTHER CREDITS FOR THIS MOVIE?
In addition to the courageous Iraqi people and those who protected them, who else genuinely deserves praise for Sunday’s election?
As usual, success has generated paternity suits.
According to France’s Jacque Chirac, who spearheaded opposition to the war at the UN and has been of little assistance since then, the election was somehow “a success for the international community.” Chirac did not explain how this was consistent with the fact that the US alone has so far provided more than 90% of the funding, non-Iraqi Coalition forces, and Coalition casualties.
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On the other hand, if you listen to President Bush and his supporters,, as illustrated by the President's State of the Union speech, the election is nothing less than another “mission accomplished,” a complete vindication for the Administration’s entire Iraqi strategy. There is also no shortage of hyperbole and self-congratulation from journalists and pundits, especially those who supported the invasion from the get-go – marching up one rationale and down another.
~ For example, The New York Times Magazine’s Michael Ignatieff declared that Sunday’s election in Iraq was “without precedent,” a bold experiment in democracy that everyone ought to “embrace.”
~ Similarly, The Guardian’s
David Aaronovitch, another long-time supporter of the invasion, wrote that, however we may feel about how we arrived in Iraq and what it cost to get there, the only issue now is, “Are you for or against democracy?”
~ FOX’s flak-jacketed Jerry Rivers (Geraldo Rivera), surrounded by four heavily-armed US Army riflemen, and this time apparently reporting from where he said he was without giving away any troop positions, called the Iraqi election “right up there with “1776 (sic), voting in Selma in 1960 or whatever (sic), and the fall of the Berlin Wall.”
Indeed, this newfound enthusiasm for democracy on the American center-right is so thick that some observers have been reminded of The New York Times’ upbeat assessment of South Vietnam’s Presidential elections in September 1967. The headline read , “US Encouraged by Vietnam vote: Officials Cite 83% Turnout Despite Vietcong Terror."
So we are all Wilsonian democrats now – except perhaps when elections produce outcomes that we don’t like.
In the local elections in the West Bank and Gaza in December 2004, for example, an unprecedented 81 percent of registered Palestinians voted, and more than a third of them voted for Hamas.
Was this comparatively free election, held under Israeli guns in the occupied territories, not a “resounding success?” Were the Palestinians who braved rival factions and the Israeli Army and came out to vote not “courageous?” Are we really, after all, “for or against democracy?”
THE HIGH COST OF MIDDLE EAST DEMOCRACY
It is not surprising that so many have stepped forward to take credit for the courage demonstrated this weekend by ordinary voters, soldiers, and police in Iraq. After two years of terrorist dentistry, we were starved for good news from Iraq.
Expectations have been incredibly low. To paraphrase Samuel Johnson’s remark about the singing dog, we were not surprised that the Iraqi election had imperfections; we were surprised there was any election at all.
The war’s supporters are also down to their very last official justification for preemptively invading a country that never attacked us. Having given up on justifying preemption by finding WMDs, and having made Iraq more of a terrorist base camp than it ever was before, those who “embraced” the original invasion are leaping at the opportunity to say – hey, look, maybe there will be at least some return on this incredibly costly experiment. Maybe the West really can plant democratic seeds in Middle Eastern deserts!
The investment certainly has been huge. It includes more than 1,606 Multilateral Force fatalities, 10,371 US wounded, 1,200 other MLF forces wounded, at least 1,362 fatalities among pro-Coalition Iraqi security forces, and anywhere from 15,563 to 100,000 or more Iraqi civilian and insurgent fatalities, depending on who is counting.
The direct dollar cost of the war and its aftermath is fast approaching $220 billion for the US alone, plus whatever costs the other Coalition members and the Iraqi interim government have paid out of their own pockets – and another $9 billion of Iraqi money that apparently simply vanished under Paul Bremer's administration.
All told, this amounts to nearly$30,000 per Iraqi voter, 15 times the country’s per capita income.
Nor was all this spending only a financial cost, because there were opportunity costs – a fancy way of saying that the money could have been spent elsewhere and saved thousands of lives. After all, it amounts to eight times the annual level of all foreign aid provided by all First World countries,and100 times the amountrequested this year by the World Health Organization to fight the global HIV/AIDS epidemic.
In practice, of course, if President Bush had not been able to launch his pet project in Iraq, he might well have just pursued another tax cut.
But for that much money, maybe we could at least have persuaded Saddam and his loyalists to leave the country and set up shop in Panama or Cuernavaca, following in the Shah’s footsteps. Like the Shah, Saddam has now contracted cancer, and may just have a couple years to live.If only we had waited…..?
EMBRACING REALITY
Under a microscope, most of the ex-post back-patting turns out to be simplistic, self-serving nonsense. Before we take off the flak jackets and break out the champagne, let's recall some sobering realities:
1. Most Iraqis Want Us Gone Whether or not most First Worlders and the Bush Administration “embrace” Iraqi democracy,most Iraqis have clearly not “embraced” occupation. Recent opinion polls show that the vast majority – not only the insurgents, but also those who voted in this election – would like nothing more than for the foreign occupation to end. Indeed, if they had had the chance to vote directly on this subject, one suspects that Sunday's turnout would have increased to 90 percent, and that more than 80 percent would have voted to send all US and British troops packing, to replace them with a few thousand peacekeepers from neutral countries, and to immediately cease construction of the Pentagon's 14 permanent military bases in Iraq. 2. We Could Have Held Better Elections, Much Earlier In recent months, as the insurgency gathered steam, some observers began to suggest that it should be postponed. But Sunday’s election came nearly two years after the US-led invasion. The real issue is, what did we really gain from waiting so long?
In fact, largely because of the deteriorating security situation, this election was almost certainly much less effective, efficient, and democratic than the election that we could have held within a few months of the invasion – using the same simple ration card- and finger-printing based system for voter registration that we ended up using anyway.
Way back then, we probably could have achieved even higher turnout at much lower cost, with a much weaker insurgency -- as the Ayatollah Al-Sistani, Iraq’s chief Shiite cleric, advised Paul Bremer some 20 months ago.
Indeed, in other transitional situations, like South Africa’s transition from apartheid in 1994 and East Timor’s election in 2001, snap elections were held with only a few months of preparation, with great success – more than 90 percent turnout in both cases.
Instead, the Bush Administration decided to postpone the election for almost two years, in a failed effort to manage Iraqi’s political destiny, assert control over Iraq’s domestic policies, head off Shiite and Kurdish regionalism, and install a government that would be more sympathetic to US "neocon" ambitions.
As a result, the Bush team really deserves responsibility for stoking an insurgency -- now estimated by some observers at having at least 10,000 to 20,000 fighters. This armed resistance, in which foreign fighters actually play only a minor supporting role, has derived much of its fire from the continued occupation and the perpetuation of the unelected “interim” government.
This insurgency, in turn, came very close this month to squelching this election entirely -- to the point where Prime Minister reportedly called President Bush in mid-January to propose delaying it again.
In the end, only an all-out mobilization of Coalition forces, including shipping another 12,000 US troops to Iraq on top of the 140,000 already there, prevented a disaster.
While this transition was never going to be easy, the US control-oriented strategy also antagonized many other Iraqis, making it harder to work with local allies and train Iraqi forces. It exacerbated divisions within Iraqi society, as groups like the Kurds grew more and more independent, radical Shiites took up arms, and more and more Sunni Arab areas became no-go war zones.
Far from serving democracy’s cause, therefore, the Bush Administration’s high-risk strategy actually amounted to a dangerous game of “chicken.” After two years of this, we arrived at a situation where people were amazed that the election could even take place. It is bizarre for us to celebrate this close escape as a triumph for the President -- we really have only the Iraqi people and our troops on the ground to thank for narrowly avoiding disaster. As usual, the fortuitous G. W. has just skated by.
3. The Real Meaning of “High” Turnout
“Higher than expected” turnout in this election has been the main cause for celebration so far. But in fact many other developing countries have also held first-time elections and achieved even higher turnouts, even under occupation.
We already mentioned the case of Palestine’s recent elections. UN-supervised elections in Indonesian-occupied East Timor in August 2001 saw a 93 percent turnout. Kosovo’s 2001 legislative election, also supervised by UN peacekeepers, recorded a 65 percent turnout. In Afghanistan’s October 2004 Presidential election, the turnout was 70 percent.
Of course in non-occupied developing democracies like South Africa, Indonesia the Philippines, India, and Brazil, 80-85 percent or higher turnouts are the order of the day.
Only in the US, where voter turnout struggles to exceed fifty percent, does he Iraqi turnout look like a big number.
The overall turnout also masks some important potential problems in Iraq, because turnout rates varied sharply along religious, ethnic, and regional lines.
For example, among the Shiites, who constitute 60 percent of Iraq’s population and live mainly in better-defended parts of Baghdad and the south, turnout reportedly averaged more than 80 percent. Among the 15 percent of the population that lives in Iraq’s three Sunni/Kurdish provinces in the better-defended north, turnout was even higher.
Iraq’s population statistics are subject to huge uncertainties – there has been no census since 1997, and in the case of the Kurdish areas, since 1987. But if we assume that these conventional population share estimates are roughly right, they already add up to more than 8 million votes in Sunday’s election -- even if turnout in Iraqi’s Sunni Arab-dominated provinces was zero.
In other words, the final voter turnout would have to have been substantially greater than 8 million for there to be any room left over for Sunni Arab participation. This is consistent with many reports that this participation was very low.
4. Signs of Disunity?
Since the overall turnout rate was partly a product of these growing divisions, it may not be a sign of health.
Sunday’s election employed a nation-wide list proportional representation system to select the 275-member National Assembly that will choose interim leaders and draft a new Iraqi constitution.
In other contexts, such a voting system is arguably much more democractic than many others. For example, if it had been employed to elect representatives to the US Congress, rather the current "single member district/first one past the post" system, the Democratic Party would control both the House and the Senate.
However, in Iraq's case, this system asked a great deal of many people who had never before voted, did not know the candidates, and, indeed, often could not even read. Almost half of them are under the age of 18; the median age of voters is under 25. Adult literacy is just 39 percent. These voters were expected to choose among more than 111 different national parties and 200 separate candidate lists, which, in turn, contained 7,000 candidates for the Assembly and 12,000 for regional offices.
Most of these parties and candidates were virtually unknown. The ballots were so complex that even the Kurdish leader, Jalal Talabani, needed special instructions on how to fill them out. Because of the security situation, there were severe constraints on how much campaigning could be done beforehand by all but the best-funded parties – for example, interim Prime Minister Iyad Allawi’s Iraqi List party, which was somehow rich enough to afford massive TV advertising and $100 bills for embedded journalists. Most individual candidates chose not to be publicly identified – the leading United Iraqi Alliance party only identified 37 of its 225 candidates, “to keep them alive.”
This peek-a-boo national list system may have been the only one that was feasible, given the late date of the election and the precarious security situation. But as we have just argued, that was not inevitable. It almost certainly increased the leverage of a handful of political gatekeepers like Allawi. It also reinforced the incentives for block voting, and the potential for regionalism and fratricide.
5. Another “Mission Accomplished?"
While Sunday’s election was an essential battle for democracy to win, it is premature to declare victory. Even apart from the insurgency, which is likely to continue as long as there are any US or UK troops in the country, Iraq remains a semi-artificial colonial construction that is subject to strong centrifugal forces. This election may have only succeeded in increasing these forces, by reinforcing group and regional polarities.
For example, to maximize their influence on the constitutional debate, and press their not-so-secret ambition to have an independent Kurdish state, the two leading Kurdish political parties established a united front, the Kurdish Alliance List, for Sunday’s election. They also sponsored a referendum on "Kurdistan’s" independence, side-by-side with the election.
One country’s liberation is another’s nightmare. Turkey’s Prime Minister Erdogan recently expressed grave concern over the Kurds’ designs on oil-rich Kirkuk, their continued interest in an independent state, and the refuge they have provided to some 5000 fighters from the Kurdistan Workers Party (PKK) fighters – “terrorists” in some vernaculars -- in northern Iraq. Two pro-PKK parties also participated in the Iraqi elections, despite Turkey’s denunciation of them as “terrorists.” There were also complaints from Kirkuk’s Turkomen community that 72,000 Iraqi Kurds had migrated there and registered to vote, to shift the balance of power.
Meanwhile, Iraq’s Shiites are also struggling to organize their political power. One reason why Shiite turnout was so high is that 75-year old Iran-born Grand Ayatollah Ali Al-Sistani, issued an edict declaring it a religious duty for them to vote, and also permitted women to vote. Al-Sistani could not vote in the elections himself because he is not even an Iraqi citizen. But together with fellow cleric Abdel-Aziz al-Hakim, and accused Iran spy/ bank fraudster Ahmad Chalabi, al-Sistani helped to organize the United Iraqi Alliance, which has reportedly captured at least 45 percent of the vote.
The UIA is a diverse lot, and it is by no means clear who will lead it or what policies it will support. But what is clear is that some of its leaders would make very strange bedfellows for the United States of America, and that perhaps, at a minimum, we should not count on them to serve as the vanguard of our efforts to export democracy to the Middle East.
For example, Al-Hakim is the head of the Supreme Council for the Islamic Revolution in Iraq (SCIRI), one of two leading Shiite parties in Iraq, has been openly opposed the “US occupation.” The second element of the Alliance’s program demands: “…A timetable for the withdrawal of the multinational forces from Iraq.”
In May 2003, two months after the US invasion, Al-Hakim returned from exile in Iran and set up shop in Najaf. SCIRI, which has been called the “Hezbollah of Iraq,” also maintains the Badr Corps, an Iranian-trained militia that Al-Hakim helped to found in the early 1980s, is based in Teheran, and numbers anywhere from 10,000 to 30,000.
There is more. In the run-up to the war, SCIRI was one of six Iraqi exile organizations that shared at least $92 million in US military aid. (Another was Chalabi’s Iraqi National Congress.)
However, in April 2003 it earned Donald Rumsfeld’s wrath. He sternly warned Iran about using Badr Corp, which had also developed strong relations with the Kurd’s military wing, to interfere in Iraq’s internal affairs. The SCIRI is also staunchly opposed to the recognition of Israel until the “occupation of Palestine” has ended.
In October 2004, Iraq’s national intelligence chief Mohammed al-Shahwan accused the Badr militia of assassinating 10 of his agents, and accused Chalabi, Al-Hakim’s ally, of being a spy for Iran. Indeed, according to the US 9/11 Commission, SCIRI, Hezbollah, and Hamas are all basically sister organizations that are heavily supported by Iran.
Of course this is the Middle East, so one has to take all such scuttlebutt with a grain of saffron. Maybe just the experience of participating in elections will cause religious radicals to become moderates! True, that hasn't exactly happened yet on the US religious right, much less among Iranian, Arab, or Israeli true believers. But hope springs eternal -- after all, US foreign policy is a faith-based initiative!
So perhaps now we understand another reason why Iran’s Foreign Minister was just as enthusiastic about the elections in Iraq as President Bush. Hamas’ recent victory in Palestine may not have been his only cause for celebration. Or perhaps everyone is reading Woodrow Wilson these days!
But you ‘re still either for democracy or against it, right?
6. Seedbed for Democracy?
Whatever the longer-term consequences of this election for Iraq, can we at least be assured that it has had a salutary effect on the rest of the Middle East? Here again the waters are murky.
Not surprisingly, Hamid Kharzai, “the mayor of Kabul,” was enthusiastic about the election. Jordan's King Abdullah, a dapper, English-speaking Arab Sunni monarch and a leading US aid recipient whose own country doesn’t quite yet hold Iraq-style elections for some reason, worried that the Sunni Arab turnout was "a lot lower than any of us hoped.” But he also added that "This is a thing that will set a good tone for the Middle East, and I am optimistic."
Other US allies in the Muslim world have found Iraq’s example much less contagious.
Pakistan’s President Musharraf has made no public comment on the elections. But in December 2004 he called the Iraq War a “mistake” that “made the world a more dangerous place.” That same month he also broke his solemn promise to give up absolute power, extending his term as Army Chief and President several more years. The US currently gives Musharraf's nuclear-armed military dictatorship more than $300 million a year in military aid and $306 million in economic aid, and has also recently helped it reschedule billions of foreign debt.
Egypt’s President Hosni Mubarak ventured the hope that the Iraqi election “would open the way for the restoration of calm and stability.” But just last week, Mubarak, who gets $2 billion a year of US economic and military aid, said he may run for a fifth 6-year term – unless his son runs. Just this weekend, as Iraq starting to hold elections, his government detained Egypt’s main opposition leader.
You are either for democracy or you are against it, right?
SUMMARY
So now that we’re here, where are we? How do we make sense of this bizarre, contradictory outcome, where the overwhelming majority of Iraqis want us to leave their country forthwith, but could not retain their electoral freedoms for one New York minute without us?
Was trying to force-feed democracy-to-go in this complex environment really ever a good idea? Once there, couldn't we have done a vastly better job of it than we have? Will the astronomical price that we and the Iraqi people have paid, in terms of blood, distraction, international law, and treasure, ever be worth it? How long will it be until we will know for sure?
But history is not made by critics, historians, and other second-guessers. For better or worse, it is often made by simplistic, decisive little men (and women) who are able, one way or another, to grab hold of the reigns of power and say -- "Follow me - I'm sure the trail is this way." Our continuing propensity to respond to such appeals, in the face of mounds of evidence about the likely results, is astounding and disturbing.
In any case, whatever else the Iraqi experiment has accomplished, at least the Iraqi people have now held their first election since…..Well, come to think of it, up to now, there never has been a truly free election in “Iraq,” the pseudo-nation that Britain and the World War I Allies cobbled together out of three Ottoman Empire administrative eyalets (provinces), Basra, Baghdad, and Mosul in 1921, and deemed “independent” in 1932.
For that matter, the Great Powers of that day probably could have mandated an election way back then that was no less free, secure, or fair than last Sunday’s and avoided the whole bloody sequel.
***
(Note to readers: SubmergingMarkets™ enjoys the dubious satisfaction of having been roughly right about developments in Iraq for the past year and a half. For example, see Reference 1 and Reference 2.)
© James S. Henry, Submerging Markets™, February 05
February 1, 2005 at 08:20 PM | Permalink | Comments (1) | TrackBack
Wednesday, December 15, 2004
(Some) Justice Finally Comes to Chile - Is More on the Way? James S. Henry
After decades of inaction, Chile's own judicial system is finally beginning to hold leading members of the Pinochet dictatorship directly responsible for the brutal reign of terror that it inflicted on Chile from September 11, 1973 to March 11, 1990.
The latest piece of good news was this week's indictment of 89-year old former Chilean dictator General Augusto Pinochet Ugarte on charges stemming from the disappearance and murder of several individual activists.
In July 2002, another serious human rights case against General Pinochet had been dismissed in Chile on grounds that he was mentally incompetent to stand trial. That case echoed the controversial March 2000 decision by UK authorities to permit him to return home rather than extradite him to Spain, France, Switzerland, or Belgium, after he’d spent more than 17 months under house arrest in London.
As noted below, this week's indictment is just the latest in a series of recent efforts by Chile's judicial system to provide justice for more than 3,200 civilians who were murdered by the regime, more than 28,000 others who recently stepped forward to bare witness about being illegally jailed and tortured, and tens of thousands more who had similar experiences, but have so far kept silent.
Several other cases that have been brought against Pinochet in Chile have recently been allowed to proceed, especially after Pinochet gave a lucid, self-serving interview to Channel 22, a Spanish language TV station in Miami, in November 2003. This incredible act of hubris may have finally brought Pinochet to ground.
While this latest ruling will no doubt be appealed to Chile’s Supreme Court, it is at least another step in the right direction.
In addition to providing justice, such efforts also provide a measure of vindication for those who have long maintained that the Pinochet dictatorship was an unwarranted, illegal, and counterproductive intrusion on Chile's long-standing traditions of democracy and respect for human rights.
However, the real disgrace now is that while Spain, France, Belgium, Switzerland, Argentina, and Chile itself have already brought serious criminal charges against Pinochet or his key associates, the US Government has never done so.
This is despite the fact that several US citizens were also murdered by the regime, not only in Chile but also in the US itself.
Furthermore, as examined below, many of the Chilean junta's most important confederates and accomplices -- including leading bankers, economists, lawyers, media magnates, convicted professional terrorists, and several senior government officials -- continue to enjoy sanctuary abroad -- especially in the US, the supposed champion of the “post-September 11th” global anti-terrorist campaign.
Many Americans may not recall that there was another September 11th, one that was even more bloody and terror-stricken than their own. Indeed, this “other September 11th” was one that their own government helped to create.
To do so, the US worked closely with an incredible bevy of transnational terrorists, butchers, and tin-horn "generals," like Pinochet (Chile), and later, Videla (Argentina), Banzer (Bolivia), Stroessner (Paraguay), and Rios Montt (Guatemala). These valorous "generals" specialized in the use of terror against defenseless civilians.
It is time for Americans who really care about human rights to demand that their own government follow the courageous lead that Chile has taken, and help bring these uniformed savages and their foreign and domestic collaborators to justice.
THE END OF IMPUNITY?
As noted above, there have been several other important recent steps toward justice in Chile with respect to the Pinochet regime. Among the most important are the following:
è On December 10, 2004, Colonel Mario Manriquez, a retired Chilean colonel, was arrested and charged with ordering the September 1973 execution of Victor Jara, an internationally-reknowned Chilean folksinger and playwright. Jara, 38 at the time, was detained and tortured to death at Santiago’s infamous National Stadium, where thousands were detained after the coup. (For an example of Jara's songs, Download vctor_jara_ni_chicha_ni_limona_.mp3.)
è In addition to the decision by Judge Juan Guzman noted above, on December 4, 2004, Chile’s Court of Appeals also lifted Pinochet's immunity from prosecution with respect to his possible involvement in the 1974 murder of his precedecessor as Commander-in-Chief of the Chilean Army, General Carlos Prats Gonzales.
General Prats, a highly-regarded "constitutionalist" who stalwartly opposed the Army's intervention in political affairs, had fled Chile in September 1973 after the coup against Allende’s duly-elected government.
In one of that decade’s clearest cases of international terrorism, General Prats and his wife Sofia Cuthbert were killed by a car bomb in Buenos Aires in September 1974.
In 2000, Eduardo Arancibia Clavel, a member of Chile's DINA, its secret service, was convicted by an Argentine court of helping to organize the killing, and was sentenced to life in prison. Argentina also requested the extradition of six other DINA agents to stand trial in the case, plus Pinochet, who was indicted for first-degree murder as the "intellectual author" of the crime. Chile's Supreme Court denied the extradition request in 2003, but the case was picked up by a Chilean prosecutor. The recent ruling means that the case can proceed. Pinochet has appealed the decision to Chile's Supreme Court.
è On November 29, 2004, the Chilean Government released the Valech report, a year-long investigation of human rights crimes committed by the Pinochet regime. The report, requested by Ricardo Lagos, Chile's current Socialist President, documented the fact, long-denied by Pinochet and his loyalists, that systematic, widespread torture had indeed been state policy during his reign -- including more than 3400 instances of sexual abuse. Even Pinochet’s eldest daughter was shocked by the report, which was based on nearly 28,000 interviews with victims of the junta’s repression – the first opportunity they had ever had to tell their stories. The victims who had managed to survive to tell their stories were offered modest pensions by the Chilean government in compensation.
In anticipation of the report, on November 5, General Juan Emilio Cheyre, the head of the Chilean Army, reversed the Army’s previous refusal to accept responsibility for these abuses, declaring:
"The (Chilean) Army has made the difficult but irreversible decision to acknowledge the responsibilities that it has as an institution in all the punishable and morally unacceptable acts of the past… Human rights violations never, and for no one, have an ethical justification."
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è In October 2004, Chile’s IRS filed tax evasion charges against the former dictator and his long-time financial advisor, Oscar Aitken. For these charges alone, Pinochet may face fines up to three times any taxes that he evaded, plus a jail term of up to five years. In late November, on the eve of the General’s 89th birthday, a Chilean judge did manage to freeze more than $4 million of Pinochet’s Chilean assets, pending the outcome of investigations for tax fraud and money laundering.
THE RIGGS CASE
So far, the main US contribution to these developments took place in July 2004, when the US Senate's Permanent Subcommittee on Investigations released a report on General Pinochet’s offshore banking -- especially his ownership of up to $15 millions of "funny money" in more than a dozen Pinochet-owned bank accounts at

The reported, which had been conducted at the behest of Senator Carl Levin, the Subcommittee’s ranking Democrat, revealed that ten key Pinochet-related accounts were handled by Washington DC’s Riggs National Bank. These accounts, plus numerous Riggs-managed offshore trusts and companies, were reportedly established for General Pinochet in the mid-1980s and 1990s with the knowledge and active involvement of Rigg’s owner and CEO, Joseph L. Allbritton (Baylor Law ’49).
Allbritton, a prominent Houston-based banking and media magnate who is now in his seventies, is a close friend of the Bush family, and a trustee of the Lyndon B. Johnson Foundation, the George Bush Presidential Foundation, the Reagan Presidential Foundation, the Kennedy Center, the Houston Symphony, and the Houston Museum of Fine Arts. He has also served on the board of the National Geographic Society and Washington DC’s Federal City Council.
A former owner of the now-defunct Washington Star, Allbritton started acquiring Riggs in the early 1980s, eventually buying at least 40.1 percent of the $6.3 billion asset bank. He served as Rigg’s Chairman and CEO until 2001, when his only son, Robert L. Allbritton, took over.
The Allbrittons also owns several other businesses, including Allbritton Communications Co., which controlled WJLA, Washington D.C.'s main Disney/ABC affiliate, plus TV stations in Little Rock, Tulsa, Lynchburg, Charleston, Harrisburg, and Tuscaloosa.
But Riggs National Bank was the crown jewel in the empire. Founded in 1815, it was Washington D.C.'s oldest and largest bank, touted as "the most important bank in the most important city in the world,” where “at least 21 First Families banked.”
It acquired a commanding share of the city’s “Embassy banking” business, handling prominent diplomatic customers for key foreign embassys, like Saudi Arabia’s Embassy. (The US Senate Committee on Governmental Affairs continues to investigate Rigg’s relationships to the Saudis.
These reportedly included more than 150 private accounts, one of which was apparently used, perhaps unintentionally, by Princess Haifa al-Faisal, the wife of Prince Bandar, Saudi Arabia’s Ambassador to the US, to relay funds to two September 11th 2001 hijackers. In September 2004, several families of September 11th victims filed a class action lawsuit against Riggs with respect to this matter.)
Under the Allbrittons, Riggs was not shy about recruiting political allies. Fellow Texan Jack Valenti (U of Houston, Harvard), the influential motion picture industry representative, is a long-time Riggs board member.
In 1997, Riggs acquired J. Bush & Co., an asset management firm owned by Jonathan J. Bush, George H.W.’s brother, George W.'s uncle and a former Chairman of the New York State Republican Finance Committee. In May 2000, Jonathan Bush briefly became CEO of the Riggs Investment Management Company, but now he concentrates on managing the private assets of wealthy clients at J. Bush & Co. In 2003, “JJ’s” Yale classmate, William H. Donaldson, was nominated by President Bush to head the SEC.
Ironically enough, in 1999, the US Treasury had even selected Riggs to redesign and manage its “CA$HLINK” cash management system, reportedly the world's largest deposit/cash reporting system.
It is not yet clear whether “JJ” was involved in managing any assets for the bank’s wealthy private clients like General Pinochet, the Saudi Princess, or Equatorial Guinea's dictator, Teodoro Obiang Nguema, the bank's largest single private banking customer.
But other senior Riggs managers were involved in handling the relationship with General Pinochet, including the bank’s former President, Timothy C. Coughlin (Brown U., NYU MBA, US Marines, Federal City Council), who resigned in May 2004; Robert C. Roane, (UVA, George Washington MBA), the bank’s chief operating officer, and the former head of Riggs - London, who resigned on November 26, 2004; Carol Thompson, Riggs' former SVP for Latin America, who also resigned in 2004; and Raymond M. Lund, the former EVP of the International Banking Group, who left the bank in March 2004.
Also implicated in the Pinochet affair was Steven B. Pfeiffer (Wesleyan ‘69 – Chairman Emeritus; Oxford - Rhodes Scholar; Yale Law School, US Naval Commander; Council on Foreign Relations), a Riggs board member since 1989, a former chairman of the bank’s International Committee, a former Vice Chairman of Riggs Bank Europe Ltd., and the bank’s Chairman in 2001. Pfeiffer remains a senior partner at Fulbright & Jaworski, the leading DC law firm, where he has served as head of the firm’s International Practice, and, from 1998 to 2002, its Partner-in-Charge. According to the Senate report, Pfeiffer and his law firm provided key legal advice to Riggs with respect to its handling of the Pinochet accounts.
BANKING ON THE GENERAL
Riggs' banking relationship with Pinochet may have dated back to the 1970s, when it was reportedly involved in helping to finance several Chilean arms deals. But it really heated up in the mid-1990s, when Pinochet came under investigation for more than 66 international criminal complaints involving human rights violations, drug trafficking, torture, assassination, illegal arms sales, and corruption, not only by Judge Garzon in Spain, but also by Argentina, Belgium, France, Switzerland, and the UK. The General was trying desperately to conceal his family’s assets around the world.
According to the Senate report, Riggs National Bank participated in a long-term conspiracy to launder Pinochet's offshore holdings and conceal their ownership from US federal bank regulators, including the Comptroller of the Currency. Quite coincidently, the bank also reportedly hired R. Ashley Lee, an OCC bank examiner who happened to be in charge of auditing Riggs from 1998 to 2002.
That helped Riggs conceal the Pinochet matter for a couple years. But in May 2004, Riggs was fined $25 million in civil penalties for "willful, systemic" violations of anti-money-laundering laws" with respect to its dealings with two other dubious clients, Saudi Arabia and Equatorial Guinea.
In light of all these embarrassments, the Allbrittons decided to sell the bank. In July 2004, it agreed in principle on a $779 million sale to PNC Financial Services Group Inc. However, this merger is now reportedly on hold until at least April 2005, and it may never be consummated, given all the many lawsuits and investigations that have arisen out of Rigs involvement in money laundering. If permitted, the PNC transaction would effectively permit the Allbrittons and their close associates to "launder" their profits from more than twenty years of scandalous, morally-unconscionable behavior, undertaken at the behest of some of the world's worst dictatorships.
Meanwhile, Riggs is fighting a number of other legal actions pertaining to this scandal. In April 2004, three law firms that specialize in shareholder derivative suits teamed up to sue Riggs’ directors for “intentionally or recklessly” ignoring the risks of failing to update the bank’s money laundering controls and dealing with dubious clients like the Saudis and Pinochet.
In September 2004, several former Riggs senior managers and board members were named in a legal action filed by the courageous Spanish judge, Balthazar Garzon, who has been investigating human rights violations committed against Spanish citizens by the Pinochet regime. Judge Garzon has asked that US authorities seize the assets of their personal assets, prosecute them for money laundering, and also freeze more than $10.3 million in alleged Pinochet assets.

So far, the US Department of Justice has basically ignored Judge Garzon’s request.
December 15, 2004 at 09:05 PM | Permalink | Comments (0) | TrackBack
Friday, December 03, 2004
”WHERE’S WARREN?” Bhopal’s 20th Anniversary
Today marks the twentieth anniversary of the deadly December 3, 1984, chemical gas leak at an Indian pesticide plant in the very center of Bhopal, a city of 90,000 – just a little larger than Danbury, Connecticut -- in the state of Madhya Pradesh, in central India. At the time the plant was owned by Union Carbide India, Ltd. (UCIL), an Indian company whose majority (50.9%) shareholder was Danbury-based Union Carbide Corporation (UCC) which was acquired by Dow Chemical in 2001.
This anniversary provides us with an opportunity to reflect on “lessons learned” from this disaster – including the need to make sure that the globalization of trade and investment is also accompanied by the globalization of justice for the victims of transnational corporate misbehavior.
Download WhereIsWarren12032004.pdf
THE COSTS
As a recent report by Amnesty International details, this industrial accident, perhaps the worst in history, killed more than 7,000 to 10,000 people in the first few days, including many children.
There were also serious long-term injuries to up to 570,000 others who were exposed to the fumes.
At least 15,248 of these survivors have already died because of their injuries – in addition to the 7,000 to 10,000 initial victims.
Up to 570,000 others continue to suffer from a wide range of serious health problems, including birth defects, cancer, swollen joints, lung disease, eye ailments, neurological damage, and many other painful, long-term illnesses.
Thousands of animals also died, and many people lost their homes, jobs, income, and access to clean water.
WHO WAS TO BLAME?
U |
nion Carbide’s ultimate “parent authority” for this accident is very clear. In the middle of the night, a cloud of lethal gas caused by the leak of at least 27 tons of “methyl isocyanate” (MIC), a high-toxic odorless poison, and another 13 tons of “reaction products” began wafting through the city center. The gas spread without warning throughout the town. The leaks continued for more than two hours before any alarms were sounded.
All six of the plant’s alarm systems failed. It was later shown that the company management had systematically tried to cut corners on safety and warning equipment – by, for example, failing to equip the plant with adequate safety equipment and trained personnel to handle bulk MIC storage; failing to apply the same safety standards that it used in the US; and failing to insure that there was a comprehensive plan to warn residents of leaks.
In fact, company staff and many others were aware of the risks created by this situation. In June 1984, six months before the accident, an Indian journalist had written an article about them: “Bhopal – On the Brink of Disaster.” But nothing was done – partly, according to Amnesty, just to cut costs.
The result was that shortly after midnight on December 3, 1984, Bhopal’s families woke up screaming in the dark, unable to breathe, their eyes and lungs on fire from the poison, choking on their own vomit. By daybreak there were already hundreds of bodies on the ground, with scores of funeral pyres burning brightly.
In addition, long before the 1984 accident, there had been a series of leaks at the site that management was well aware of, and which caused serious pollution – contamination that continues to this day.
All told, as the Amnesty report makes clear, this amounts not only to an health and environmental disaster, but a serious infringement of the human rights of thousands of Indian citizens.
CONTINUING IMPUNITY
All this was bad enough. But the other key part of Bhopal’s injustice has to do with the fact that key actors like Dow Chemical/Union Carbide, the Indian Government, and the individual US and Indian senior executives and other officials who were responsible for the accident have managed to avoid liability for the full costs of the “accident,” as well as personal accountability.
This impunity was underscored this week when the BBC fell victim to a hoax perpetrated by someone who pretended to be a Dow Chemical executive. He concocted a false statement that the company was reversing its denial of all responsibility for Bhopal, and was establishing a E12 billion fund for 120,000 victims.
In fact,
· Union Carbide (UCC) and Dow Chemical, UCC's new owner since it purchased the company for $10.3 billion in 2001, have consistently denied any liability for the disaster. They have argued, for example, that UCC was a “domestic” US company, with no “operations” in India. Supposedly it was also not responsible for UCIL’ actions, because UCIL was just an “independent” Indian company.
· In fact, while UCC disposed of its interests in UCIL in 1994, until then, UCC maintained at least 51 percent ownership in UCIL. Furthermore, according to the Amnesty report, UCC played an active role in UCIL’s management and board activities, and was responsible for the detailed design, senior staffing, and on-going operating procedures and safety at the Bhopal plant.
· Furthermore, as UCC’s CEO at the time, Warren Anderson, bragged before the US Congress in 1984, Union Carbide had 100,000 employees around the world. At the same time, another senior UCC executive, Jackson Browning, said that UCC’s “international operations represented 30 percent of sales,” and that “India was one of three dozen countries where the company has affiliates and business interests.”
· After the spill, according to the Amnesty report, UCC officials (1) tried to minimize MIC’s toxicity, (2) withheld vital information about its toxicity and the reaction products, which they treated as trade secrets; and (3) refused to pay interim relief to the victims.
· The Indian Government and the State Government of Madhya Pradesh also bear grave responsibility for the disaster itself, and then for striking an irresponsible private settlement with the perpetrators. As the Amnesty report makes clear, environmental regulations were very poorly enforced against UCIL. Then, having sued for $3 billion in damages in 1988, the Indian Government settled for just $470 million in 1989, without adequate participation from victims. The Indian Government has also discontinued medical research on the impact of the gas leak, and failed to publish its interim findings.
In October 2003, it was disclosed that by then, some 15,298 death claims and 554,895 claims for other injuries and disabilities had been awarded by the Madhya Pradesh Gas Relief and Rehabilitation Department – five times the number assumed in the settlement calculations by the Indian Supreme Court.
· UCC’s insurance paid that paltry amount in full. But then the Indian Government was very slow to pay out the money to victims. As of July 2004, $334.6 million had been paid out, while $327.5 million was still sitting in Indian government custody. At that point, 20 years after the disaster, the Indian Supreme Court finally ordered that the remaining money be paid out to some 570,000 registered victims – an average of $575 apiece. Even these payments won’t all get to the victims; a significant portion is reportedly consumed by India’s notorious bribe-ridden state bureaucracy.
· Local authorities in Bhopal filed criminal charges against both UCC its former CEO Warren M. Anderson in 1991-2. Anderson was charged with “culpable homicide (manslaughter),” facing a prison term of at least 10 years. He failed to appear, and is still considered an “absconder” by the Bhopal District Court and the Supreme Court of India.
However, despite the existence of a US-India extradition treaty, the Indian Government has failed to pursue a request for Anderson’s extradition vigorously.
The 82-year old Anderson, who is still subject to an Indian arrest warrant, has a very nice home with an unlisted number in Bridgehampton, New York, and another in Vero Beach, Florida.
Meanwhile, while the Indian Government has been willing to hold local Indian companies that operate hazardous businesses strictly liable for damages caused by them, it has been reluctant to apply this rule to transnational companies -- perhaps because it is more worried about attracting foreign investment than insuring that foreign investors manage their activities responsibily.
SUMMARY – GLOBALIZING JUSTICE
Overall, twenty years after the original incident, Bhopal remains a striking example of transnational corporate misconduct, an incredible case of the negligent mishandling of a true “chemical weapon of mass destruction.”
This behavior may not have been as culpable, perhaps, as the willful use of toxic weapons against innocent civilians by former dictators like Saddam and Syria's Assad. But it was no less deadly.
As we saw above, Bhopal was also an example of the incredible loopholes that still apply to leading companies in globalized industries.
Especially in corruption-ridden developing countries like India, they have often been able to take advantages of lax law enforcement, weak safety regulations, clever holding company structures that limit liability, and the sheer expense of bringing them to justice.
Evidently the globalization of investment and trade is not sufficient. Economic globalization needs to be augmented by the globalization of justice. Among other things, that means that it is high time for transnational corporations to be subject to an enforceable code of conduct, back up by an International Court for Corporate Responsibility.
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© James S. Henry, SubmergingMarkets™, 2004
December 3, 2004 at 09:26 PM | Permalink | Comments (1) | TrackBack
THE BEST WEEK IN UKRAINIAN HISTORY? KIEV REPORT #2 Matthew Maly
Ukraine has just had perhaps its luckiest week in its history -- a week where everything went right, and the educational process was so intense, so logical, so marvelously cogent that the country went through a hundred years of political evolution. It is now, by right, a part of Europe, a part of the Western cultural tradition, a true democracy! This has been not merely a week in life of one country, but an entire page in the history of the world -- and, let us hope, global democracy!
MEET THE CANDIDATES
It all started out rather unpromising with this fall's presidential elections. The alternatives were the usual: on one hand, Prime Minister Viktor Yanukovich, with a much smarter and more sinister person, Viktor Medvedchuk (and Kuchma’s son-in-law Viktor Pinchuk in tow), lurking behind; on the other hand, former Prime Minister Viktor Yushchenko, with a much smarter and more sinister person, Yulia Timoshenko, lurking behind.
Both Yanukovich and Yushchenko were appointed by one and the same President Kuchma. Medvedchuk and Timoshenko had both proved that they know how to turn their government connection into enormous personal wealth. I could tell the difference between these two teams no better than I could tell Coke from Pepsi.
There was another divide: Ukraine speaks Ukrainian and Russian, it has Western and Eastern part, it can join NATO or ally itself with Russia. Yanukovich is from the Russian-speaking part of Ukraine, speaks bad Ukrainian, and so his campaign was getting its local currency by exchanging the rubles it had. Yanukovich’s campaign tone was thuggish, unmistakably betraying presence of Russian political consultants.
Yushchenko’s power base was in Western Ukraine, its tone was uncharacteristically sleek, it tended to mention democracy, and it was not hurting for dollars and euros.
Since I wanted Ukrainian people to actually have a better life, I had no preference between the two. But I strongly felt that using a thuggish tone was a better electoral tactic as that was something the Ukrainians could relate to. My money was on Yanukovich, and I thought I was smart.
SURPRISES
Then an amazing thing happened: people appeared to deeply resent Yanukovich talking down to them, while actually appreciating Yushchenko’s respectful and meaningful messages.
Yanukovich’s billboards, with wonderful, in a certain way, ultimate, slogans “Just because!” and “That’s the way it should be!” were everywhere, while Yushchenko’s slogan “Yes!” (with a horseshoe as a symbol of luck), were nowhere to be seen. In Ukraine, it is called “using the administrative resource”: after all, Yanukovich is a current Prime Minister while Yushchenko is just an opposition leader. Ukraine is a democracy, and everyone can sell advertising space to Yushchenko if they wish to have all their documents for the last five years audited by someone extremely unfriendly and their permits and licenses withdrawn. And of course there could not be any fair description of Yushchenko on any state-owned media.
Then, right in the middle of the campaign, Yushchenko had a little problem: in one day, his entire face got covered with horrific acne-like inflammation, his nose swelled to twice its former size, so that he started to look like a Hollywood movie monster. Since nobody in the world has ever had such a disease, especially one that developed so quickly and in such an inopportune time, people suspected that Yanukovich may have poisoned Yushchenko, probably with dioxin.
There is no direct evidence that Yanukovich was involved. But if you look like a thug, talk like a thug, and behave like a thug, people tend to suspect that you are a thug. It does not help matters if you come from a mafia-controlled Donetsk region of Ukraine, have a long history of association with the murderous mafioso who controls the region, and having had two criminal convictions, did time in jail. In a word, Yanukovich got stereotyped.
Yushchenko got stereotyped as well: people assumed that since he had suffered horrible disfigurement for talking about the truth and democracy he must have really meant it. You have the stigmata – you must be Jesus Christ. And as a result, two things happened: Yushchenko became infallible; for Ukrainians, he became the focus of all their dreams and aspirations, and (pay close attention!) truth and democracy became important because Yushchenko was talking about them. As far as poisoning, believers duly noted that mortal poison did Yushchenko no lasting harm.
Let me say it again, since this is very important. Jesus was the guy who could perform a miracle here and there. People did not have, nor could they understand, the moral code that Jesus was proposing. But since Jesus could do miracles, people accepted his moral code as their own.
Same here. Make no mistake, truth and democracy meant nothing for Ukrainians. Ukrainian students cheated and waited for the time when they become businessmen so they could start stealing. Kiev’s Mercedes-riding bureaucrats were the very epitome of graft, and now they are walking after Yushchenko with the strange smile on their faces, inviting students who demonstrated in the cold to spend the night in their palaces: obviously, there was more to them than graft.
Ukrainians did not accept the theoretical notion that somewhere there could be a government that actually served the people, respected them, and told them the truth. It has all changed now in Ukraine, probably forever, just because Yushchenko said that it should.
THE "ELECTIONS"
Then there came the first round of voting on October 31. It is now clear that Yushchenko got more than 50% of the vote. But God had mercy on Ukraine and prevented Yushchenko’s win in the first round. God has firmly decided to make Ukraine free and democratic once and for all, and for that Ukraine needed to go through some suffering so as to earn its freedom. There was serious fraud in favor of Yanukovich, with the result that both Yushchenko and Yanukovich got about 39% each, with Yushchenko getting marginally more votes. The total is less than 100% because there were 22 other candidates.
Now, that was really something. Never in the post-Soviet space did the opposition presidential candidate get more votes than the candidate of power. In fact, many people thought that voting against Yanukovich was quite useless. Other people thought that voting for Yanukovich was quite useless, but Yanukovich did much to disabuse them of this notion. Regional officials of the regions where Yanukovich would not win, knew they would be immediately fired (and they were). So, a lot of little tricks were used. Voting in Ukraine is voluntary, and students who wanted to get a failing grade on their next exam could abstain from voting. For the rest, the procedure was as follows: a student would obtain a ballot, choose any candidate he or she wanted as long as it was Yanukovich, show the ballot to the person quietly standing by the ballot box, probably their Civics or Ethics professor, drop the ballot into the ballot box, and be assured of a passing grade on their next Chemistry examination. For the older generation, there was another trick. Fail to vote for Yanukovich, and see your heat and water turned right off.
And yet, even with all these tricks, Yanukovich only obtained 45% of the vote. It meant that his true level support could not have been greater than 30%. And yet, Yanukovich HAD to win the second round, had to get at least 20% more. Why could not Yanukovich lose? Because there is a lot of stolen property at stake, and when property is stolen, there is no receipt to prove ownership. That means that a new government could take the property away. Whatever you could say about the famous Khodorkovsky case, it is no longer advisable for the oligarchs to have property for which they have absolutely no legal title.
In the second round, there was even more fraud on behalf of Yanukovich. As this is now well documented, I will not go into that. People of Ukraine are no strangers to fraud, and they could have submitted to it easily, with barely a sigh. But now they had a lightning rod of Yushchenko, a highly moral person they imagined him to be. Regardless of who Yushchenko actually is, what matters is that people appointed him as a personification of all the best that is in them, a focal point of all their hopes. From now on, a stab at Yushchenko was a stab in their heart.
And that made Yushchenko much more than a President: he is now in the same league with Reagan, the Pope of Rome, and the Beatles. There is a Woodstock atmosphere in Kiev, and Yushchenko supporters, people of all ages, look like the happiest people in the world. They have clearly found themselves, their inner freedom, and their strength.
IRONIES
Let us again return to what happened here, as it is unprecedented. In the second round of voting on November 21, Yushchenko got about 70% of support, and if the elections were fair he would have by now be the President-elect. Would Ukraine be a real democracy now?
Absolutely not!!! Ukraine would have gotten Yushchenko as President, and would have calmly gone back to cheating, stealing, hiding from authorities, and suffering as it always has.
After all, Yushchenko already HAD BEEN a Prime Minister, and quite recently. And there was no enthusiasm, no support, no happiness, no tears of joy, and lousy economic results, worse than those demonstrated by Yanukovich.
If the elections were fair, it would have made no difference who won, Yushchenko or Yanukovich. Again. After all, Yanukovich is no worse than Ken Lay: just a tough, self-serving, and cynical kind of guy.
What happened? With great help from Yanukovich, and thanks to him, Yushchenko has lit the inner light in the souls of mortally insulted people, the light they did not know was there. Truth, democracy, justice, or heroism mean nothing unless they are sanctified. In one fell swoop, Yushchenko have sanctified them all, and faces of his followers have changed. What happened in Ukraine is that the truth and justice were lost and are now being defended as a newfound, cherished, and fundamental possession of every citizen.
If Yushchenko now represents God, his detractors are with the Devil. Some of them, to be sure, are hellish personalities, gangsters and murderers, such as the Head of the Donetsk Region or the Mayor of Odessa.
TRANSFORMATION
I am more interested in a momentary transformation. There is a woman I know who went on TV to defend Yanukovich. Her eyes looked dead, her hands were shaking, and she had made her worst hairdo. Across from her, there was a woman who defended Yushchenko, and that one grew ten years younger in four days, her back was straight and her eyes were shining. Was the debate about Yushchenko? Absolutely not.
Actually both of these women used to be equally skeptical about him. But inside one woman a tiny flickering light was now almost extinguished, while the other had the light of her soul burning as brightly as it could, just like the bright orange she wore. It was the debate about human dignity, with Yushchenko as a starting point.
Yushchenko is a tall man with a robust face of a peasant. Women here consider him attractive. But after the second round of elections, with his pockmarked and swollen face, he is universally seen as beautiful. This adoration brings a real danger of Yushchenko not being able to live up to it, but this is the case right now.
And let me just mention the designer revolution that happened here: people that used to choose between gray and gray were now proudly wearing bright orange, and 99% of them are doing so for the very first time in their lives.
Ukrainian TV these last four days is beyond description. First, there was Channel 5, a pro-Yushchenko private channel beamed straight to the Independence Square where most of the demonstrations took place. Channel 5 had a constant stream of interviews with intellectuals, artists, politicians, etc, all of them wearing something orange. Most of the times, the orange color looked attractive, stylish, appropriate for a successful, accomplished, strong-willed person that was being interviewed.
But I remember a man in his seventies, in the cheapest brown suit and a pitiful tie. Around his thin wrinkled neck, he was wearing an bright orange woolen scarf they gave him in the studio, and this scarf looked horribly out of place on this frail, poor, sickly creature. Very uncomfortable in front of the camera, the man said, “I am a retired army major, a World War II veteran. I wish to address myself to the soldiers. My sons! Soldiers! I am kneeling before you! Do not shoot at people, the people have made their choice! I want to say… Soldiers… When I was young…”
The old man was searching for words, panicking as he was being broadcasted live to a huge, country-wide audience. “Thank you very much!” said the anchorwoman in a bright and crisp professional voice, eager to end his suffering. The camera zoomed in for a goodbye. For the first time, the old man looked straight into the camera and said, “People just want to be free!” The orange scarf did not look out of place, and I could suddenly tell the guy really was a major. The guy was having his moment, even if a bit late in life.
And this is important. God did not create Man to chew cud for seventy years and then die: God created Man for one, two, or three defining moments, and the old man was having his.
But sometimes official channels were even better than the opposition TV. One report I saw informed the public that “special riot police is always ready to defend the Constitution” and the camera proceeded to get a close-up of fearsome black police dog.
Then I realized that President Kuchma, unwittingly, is a true father of his nation!
There are things in the world, such as trees, oceans, and countries, whose existence depends on all people. And then there are things, such as love, truth, dignity, inspiration, that exist only because of you. If you are not ready to give your all to defend your love and your truth they cease to exist. Again: truth is something that depends solely and exclusively on you; if you fail to defend it, it dies.
There simply is no way to transfer this responsibility on someone else’s shoulders. And from the bottom of my heart I thank God for the existence of President Kuchma, who showed guard dogs to thousands and thousands of Ukrainian students so that they would stand up, put away their Chemistry textbooks, attach their orange armbands and go to the Square.
For truth cannot be defined as a statement that corresponds to reality. Truth is what makes you unafraid of guard dogs. What happens on that Square is no rock concert, people are braving dogs and weapons – and hallelujah! – a nation is reborn!
December 3, 2004 at 02:30 PM | Permalink | Comments (1) | TrackBack
Wednesday, September 22, 2004
Democracy in America and Elsewhere: Part III: How the US Stacks Up: - A. Qualifying Voters
We certainly wish President Bush much greater success than President Woodrow Wilson, who saw his own favorite proposal to “make the world safe for democracy,” the Versailles Treaty, throttled by Republican Senators who opposed the League of Nations, and suffered a stroke in the ensuing battle.
Knowing President Bush, he will probably not be dissuaded from his mission by this unhappy history, or by the fact that many other world leaders, like France's Chirac and Brazil's Lula, are now much more concerned about fighting global poverty and taxing "global bads" like arms traffic, anonymous capital in offshore havens -- an idea we first proposed in the early 1990s -- and environmental pollution than they are about neo-Wilsonian evangelism.
But of course any suggestion by the US that democracy can actually be propagated by multilateral consensus rather than by unilateral military aggression is always to be welcomed.
Before proceeding any farther with this latest American crusade to sow democracy abroad, however, it may be helpful to examine how the US itself really stacks up as a “democracy," relative to "best democratic practices" around the world.
One approach to this subject would be to start off with a comparison with other leading First World democracies like the UK or France. After all, at the outset, one might think that only such countries have the well-educated, politically-engaged citizenry, political traditions, affluence, and technical know-how needed to implement truly state-of-the-art democratic processes.
However, following the lead of former President Jimmy Carter’s brief comparative analysis of Peru in 2001, we find it more interesting to see how the US compares with younger developing democracies that lack all these advantages – much less access to the yet-to-be-created UN Democracy Fund.
In our case, we’ve chosen Brazil, the world’s sixth most populous country, with 180 million inhabitants, two-thirds of South America’s economic activity, a federal system and a long history of slavery (like the US).
As we’ll see, our overall finding is that while Brazil’s democracy has plenty of room for improvement, it already boasts a much more democratic electoral system than the United States of America.

While Brazil’s electoral institutions are by no means perfect, and its campaign finance laws and federal structure have many of the same drawbacks as the US, it has recently been working very hard to improve these institutions. I
Indeed, it turns out that Brazil is making remarkable progress toward effective representative democracy, especially for a country with enormous social problems, a high degree of economic and social inequality, and a per capita income just one third of the US level
Brazil’s new democracy provides a striking contrast along many dimensions – in particular, the processes and structures by which it (1) qualifies voters, (2) conducts campaigns, (3) administers voting, and (4) provides fair representation of voter preferences. The following essay focuses in on the first of these elements; the sequel will deal with the others.

Actually “mandatory voting” is a misnomer – people are just required to show up at a polling station or consular office and submit a vote, which can be blank. There are fines for violators who lack valid excuses, like illness.
Brazil adopted mandatory voting in part to overcome the apathy induced by more than two decades of military rule. It is just one of many countries that have mandatory voting, including Australia, Belgium, Cyprus, Greece, Luxembourg, Liechtenstein, one Swiss canton, Egypt, Fiji, Singapore, Thailand, Argentina, Bolivia, Costa Rica, the Dominican Republic, Ecuador, Uruguay, and Venezuela.
Mandatory voting in Brazil is facilitated by the fact that, as in 82 other countries, all Brazilians age 18 or over are required to obtain a national identity card, with their photo, fingerprint, signature, place and date of birth, and parents’ names.
These cards, which are now becoming digital, are needed to qualify for government services and to conduct financial and legal transactions. They also enable cardholders to vote at polling booths anywhere in the country, eliminating the need for a separate, costly voter registration process.
To encourage voter turnout, Brazil also makes Election Day a national holiday, and often holds its elections on Sundays. Any eligible voter may be required to assist for free at the polls.
Mandatory voting, plus Brazil’s proportional representation system (See Part IIIB), have yielded voter turnouts in recent national elections that have routinely exceeded 75 percent of the voting-age population (VAP).
By comparison, US voter turnouts have recently averaged less than 45 percent of the VAP.
Brazil’s mandatory system has also had many other benefits. It has probably increased turnout the most among social groups that have much less access to education and income, thereby boosting their “voice” in the political system. It has also placed pressure on public authorities to implement efficient voting procedures, and shifted responsibility for registration and turnout away from Brazil’s political parties, allowing them to focus on campaigning.
As one might expect, mandatory voting does produce slightly more blank votes as a proportion of all votes than we see in US elections. But the system also seems to have made voting more habitual.
Some countries, like Austria and the Netherlands, have recently abandoned the practice, and Brazil is also considering this, now that the population has re-acquired the voting habit. As Brazil matures, especially given its use of proportional representation, it may well be able to follow in the footsteps of these other countries and eliminate mandatory voting without sacrificing high turnout.
The US. Voting is entirely voluntary in the US, and there are no national identity cards or centralized voter registration systems. Originally, many states viewed voter registration as undemocratic. But in the course of the 19th century, growing concerns over vote fraud, combined with the desire in some states to curb voting by blacks and the lower classes, led to the widespread adoption of stricter voter registration laws. By now, every state but North Dakota requires voters to “register” before they can “vote.” US elections are also never held on Sundays, nor is Election Day a national holiday.
As we’ll examine closer in Part IIIB, the US’ “winner-take-all” electoral system is also highly inefficient, with more than 95 percent of all Congressional incumbents now re-elected, and almost all US House and Senate races now a foregone conclusion. So US voters are naturally not eager to participate in such “Potemkin” elections, which are approaching Soviet-like party reelection rates (though the US does have TWO Soviet-like parties.)
None of this has helped to encourage voter turnout. Not surprisingly, therefore, for the entire period 1948-1998, US voter turnout averaged just 48.3 percent as a share of VAP, and ranked 114th in the world. This was the lowest level among all OECD countries -- forty percent lower than the average turnouts recorded in First World countries like Germany, Italy, Sweden, and New Zealand. Even if we omit the 17 countries like Brazil with mandatory voting, it is hard to make this track record look like an achievement.
One can argue that relatively low turnout is precisely the point. Indeed, participation by ordinary Americans in their political system has always been a bit trifle unwelcome. For example, just 6 percent of all American citizens – 20 percent of whom were slaves -- participated in George Washington’s election in 1789. This was mainly because most state legislatures at the time had decreed that voters had to be white, propertied, male, Protestant and at least 21 years old. Studies of 19th century voter turnout in the South also show that turnout, which once exceeded 60 percent in the 1880s, plummeted sharply in the next 30 years under the impact of tougher registration laws that targeted black voters. To this day, the Neo-Republican South still boasts the lowest turnout rates and highest black population shares in the country.
Some cynics argue that low US turnout rates are just a sign of how deeply “satisfied” American voters are with the way things are. However, these turnout rates have declined sharply over the last three decades, at a time when it is hard to believe that Americans have become more and more satisfied with their political system.
In 1968, for example, 73.2 million Americans voted, a 61 percent turnout level. Thirty years later, in 1998, the number of Americans who voted was still just 73 million -- despite the fact that US population had increased by 40 percent.
Beyond voting, as of 2002, one US citizen in three (33.6 percent) did not even bother to register to vote. And that proportion was higher than it was in 1993, when Congress passed the National Voter Registration Act, which was intended to facilitate voter registration.
Evidently a majority of American voters have now become so “satisfied” that they no longer choose to participate in it at all. According to this bogus "apathy" theory of non-registration, the most “satisfied” groups of all must be blacks, other minorities, youth, the poor, and residents of Southern states, whose turnout rates are all miserably low.
In 2002, in four states (Texas, West Virginia, Indiana, and Virginia), less than 40 percent of all eligible citizens of voting age voted. Of 24 million Americans between the ages of 18 and 24, 38 percent registered, and 4.7 million, or 19.3 percent, voted. Just 27 percent of unemployed citizens, 30 percent of Hispanic citizens, 30 percent of Asian American citizens, 30 percent of the 35 million disabled Americans, 35 percent of all women ages 18 to 44, 37 percent of high school graduates, and 42 percent of all black citizens voted.
In fact, as we’ll examine later, there are very important structural reasons that help to explain why these groups fail to register or vote.
In the case of black males, for example, prisoner and ex-felon disenfranchisement may account for a substantial fraction of their relatively low participation rates. And 70 percent of those who registered and didn’t bother to vote in 2002 blamed logistical problems – transportation, schedule conflicts, absence from home, registration problems, homelessness (2.3-3.5 million adult Americans, depending on the year), the failure to get an absentee ballot on time, inconvenient polling places, or illness (including 44% of non-voting registrants age 65 or older).
All these obstacles affect poorer, less educated, older voters more than others. Most of them might easily be addressed with improved voting technology, if this country’s leaders, despite their putative concern for democratization around the world, were really serious about implementing democracy at home.
Meanwhile, in 1998, some 83 million Brazilians voted – 5 million more than in the entire US, which has about 100 million more citizens. Brazil’s voter turnout increased dramatically since the 1960s, from 37 percent of VAP in 1962 to an average of more than 80 percent in 1994-2002. In 2002, while 88 million Americans were proudly exercised their right to vote, so were 91 million Brazilians – for an 81 percent turnout. On the “satisfaction” theory, all these Brazilians must be nostalgic for the dictatorship.
After the 2002 Congressional elections, some US political pundits were impressed because voter turnout had increased slightly, from 41.2 percent in 1998 to 42.3 percent (46.1 percent of all citizens).
From an international perspective, however, that merely put the US on a par with Haiti and Pakistan –- just half of Brazil’s level.
Overall, the US trends described here are hardly indicative of “voter satisfaction.” Rather, they are a very disturbing sign that there are deep structural impediments to voting in America. Furthermore, the grass roots organizing power that has always been essential for getting out the vote in this country, much of it supplied by parties and unions, may have been waning.
From this angle, it will be very interesting to see whether this November’s contest, and the elaborate new organizing drives that have been mounted to increase US voter turnout and registration, will reverse these trends. No doubt turnout will be higher than it was in the dismal 2002 off-year election, but that's not saying very much. A more telling indicator will be to see whether turnout surpasses the (relatively modest) 59 percent median VAP turnout rate that the US recorded in nine Presidential elections over the whole period 1968-2000. We would love to see it happen, but since that would amount to a 10 percent improvement over the turnouts recorded in 1996 and 2000, we doubt it will happen.
2. Voting Rights for Prisoners and Ex-Felons
Brazil. Disenfranchising prisoners and ex-felons is unfortunately a longstanding, widespread departure from “one person, one vote” -- a legacy of the age-old practice of ex-communicating social outcasts. Worldwide, there is a growing trend toward discarding this medieval practice, with 32 countries now allowing all prisoners to vote and 23 more that allow certain classes of them to do so.
Brazil is one of 54 countries that prohibit prisoners from voting while they are in jail, but it permits them to vote after they are released, or are on parole or probation.
The US. The American approach to prisoner voting is much more restrictive than Brazil's. All but 2 (Vermont and Maine) of the 50 states disenfranchise all incarcerated prisoners, including those awaiting trial. Thirty-four states disenfranchise all felons on parole, while thirty disenfranchise those on probation.
Furthermore, the US is one of only 8 countries where ex-felons are temporarily or permanently disenfranchised even after they have completed their sentences, unless they successfully petition the authorities to have their voting rights restored. In 7 US states, felons are disenfranchised for several years after serving their sentences – for example, 5 years in Delaware, or 3 years in Maryland. In 3 states – Arizona, Maryland, and Nevada -- recidivists are permanently disenfranchised. And in 7 other states – Alabama, Nebraska, Kentucky, Mississippi, and the “battleground states” of Iowa, Florida, and Virginia – all ex-felons are permanently disenfranchised.
Many of these rules date back to the Ante-Bellum period of the 1880s, when they were enacted by Southern and border states to maintain control over the newly-freed blacks -- contrary to the spirit of the 15th Amendment.
The impact of prisoner and ex-felon disenfranchisement on electoral outcomes is much greater in the US than Brazil, because of the electoral college system and the size, composition and location of the US convict population. Indeed, while Brazil's prison system is horribly overcrowded, its entire prison population is just 285,000 inmates -- .2% of Brazil’s voting-age population.
The US, in contrast, now has the world’s highest proportion of its population in prisons, jail, on probation or parole, or under correctional supervision, outside jail. As of August 2004, this “correctional population” totaled 7.2 million adults, 3.3% of the US VAP. Relative to population, as well as in absolute terms, this is the largest US prison population ever. It is also by far the largest prison population in the world, well ahead of the US’ closest competitors, China and Russia.
There are also another 3.2 million American citizens – 1.4% of the US VAP -- who have served time in state or federal prison for felonies and are no longer in correctional programs. Depending on their states of residence, they may be subject to the voting restrictions imposed on former felons in the US.
Both these totals have soared since 1980 because of stiffer drug laws and sentencing laws -- the “correctional” population as share of VAP has almost tripled, from 1.17% to 3.3%. (See Figure 3A-1.) (See Figure 3A-1.)
Furthermore, compared with 1980, when a majority of state and federal prison inmates were serving time for violent crimes, a majority are now either awaiting trial because they cannot afford bail, or are serving time for non-violent offenses, more than a quarter of which were relatively minor drug-related offenses.
Drug Offenses and Disenfranchisement. As other analysts have recently noted, such drug offenses rarely involve “victims,” and there is a high degree of prosecutorial discretion. This makes them especially vulnerable to racially-discriminatory arrest practices. For example, recent studies of drug arrest rates show that black arrest and conviction rates for drug-related offenses are way out of proportion to drug use in the black community, and that the disparity between black and white arrest rates for drug use has been soaring because of policing practices, not because of greater underlying criminality.
The resulting steep rise in the US prison population since the 1980s provides a strong contrast with European countries and leading developing countries, where per capita prison populations have been stable or even declining. Not surprisingly, the disparity is also consistent with the fact that Europe’s drug laws are much less punitive.
Unemployment Impacts.The increase in the US correctional population as a share of the population since 1980 has not only reduced the ranks of poorer voters. It has also reduced the size of the “observed” civilian labor force and the official US unemployment rate by 18-20 percent. In other words, the US unemployment rate in July 2004, for example, would have been 6.43 percent, not the official 5.43 percent reported by the Bureau of Labor Statistics. So without this swollen prison population, there would now be more than 10 million unemployed in the US – at least 2.2 million more than the official statistics show, and more than enough to swamp any alleged “job growth” in the last year.
So US penal policies have not only removed a huge number of prisoners from the ranks of potential voters. They have also helped to disguise the seriousness of the US economy’s rather tepid recovery.
And some of us thought the point of the US’ punitive drug laws was to reduce drug trafficking! (Note to reader: US real retail cocaine prices have plummeted since the 1980s. See Figure 3A-2.)
While it is not easy to measure the impact that US prisoner disenfranchisement has had on recent elections, it may have been substantial, as several analysts have recently noted. For example, one recent study estimated that in 2000, more than 3.0 million prisoners, parolees, and probationers, plus 1.5- 1.7 million ex-felons, were formally disenfranchised – 2.1% of the US voting age population. Another recent study of prisoner disenfranchisement in the state of Georgia found that 13% of adult black males were disenfranchised by this policy, and that it explained nearly half the voter registration gap between black males and non-black males.
There were also another 358,000 who had been jailed awaiting trial, and 218,000 more who had been jailed on misdemeanor charges. All these people were also effectively disenfranchised.
All told, during the 2000 Presidential race, the total number of potential American citizen/voters who were disenfranchised because of the US penal system and its archaic laws was about 5 million. Since the numbers have continued to grow since then, by now they have reached 5.5 – 5.8 million.
As other commentators have noted, this policy is also practically unique -- no other putative “democracy” comes anywhere close to this kind of systematic vote deprivation.
No doubt there are some determined ex-felons, parolees, and probationers who manage to slip through and vote even in states that prohibit them from doing so. Many others would not vote even if given the chance. However, even apart from the question of whether such harsh treatment encourages better behavior, this disenfranchisement policy is far from politically neutral:
Texas alone has at least 500,000 ex-felons and more than 200,000 prisoners and other inmates who have been disenfranchised, the overwhelming majority of whom are black or Hispanic.
Of Florida’s 13.4 million people of voting age, at least 600,000 to 850,000 prisoners, parolee/probationers, and ex-felons, have been disenfranchised by such voter registration laws, including at least one-fifth of all adult black males who reside there. Other battleground states, including New Mexico, Virginia, Iowa and Washington, have also used such laws to disenfranchise 15-25 of their adult black male populations.
All told, the top 15 battleground states account for at least 1.4 to 1.6 million excluded potential prison/ ex-felon votes this year. Combined with US’ knife-edged “winner take all” electoral system, this is clearly a very important policy choice.
Furthermore, in states like Florida, Texas, Mississippi, and Virginia, the opportunity to purge thousands of minority voter from the polls in the search for “ex-felons” has opened the doors to many other abuses.
For example, in 2000, there was the notorious purge by Florida’s Republican Secretary of State of 94,000 supposed “felons.” It later turned out that this number included more than 50,000 blacks and Hispanics, but just 3,000 actual ex-felons.
One might have hoped that one such flagrant anti-democratic maneuver would have been enough. But that was followed attempts by Florida’s Republican state administration to do the very same thing again in 2002 and again this year, when Florida tried to use another “bogus felons” list with another 40,000 names.
From this angle, all of the many arguments over Nader’s candidacy, “hanging chads,” and the narrow 537 vote margin by which Bush carried that state in 2000, were side-shows.
We are reminded of the Reconstruction period from 1867 to 1877, when Florida and 8 other Southern states had to be put under military occupation by the US Government, to prevent the white elites’ systematic attempts to deprive freed slaves of their voting and other civil rights. By the late 1870s, Northern passions toward the South had cooled, the Union troops left, and white-supremacist governments reacquired power. Unfortunately, unlike the 1860s, the “Radical Republicans” in Congress now side with the closet supremacists.
Counting Prisoners for Apportionment.The punitive US policy toward current and former prisoners appears even more bizarre, once we take into account the fact that for purposes of redistricting, the US Census – unlike Brazil – counts prison and jail inmates as residents of the counties where the prisoners are incarcerated, rather than the inmates’ home towns.
In general, this approach to counting prisoners for districting purposes tilts strongly in favor of rural Southern and Western states – areas that also now happen to vote Republican. (See Figure 3A-3), It has an important impact on the apportionment of Congressional seats and seats in state legislatures, the allocation of federal funds to Congressional districts, and the total number of electoral college votes that each state receives. It also creates a huge, influential, coalition of interests -- construction companies, prison administrators and guards, and politicians -- that mounts to a “politician-prison-industrial complex,” with powerful selfish motives to support tough sentencing laws and the construction of new prisons and jails.
The resulting combination of disenfranchisement and malapportionment recalls the “three-fifths compromise” that was built into the US Constitution in 1787, to accommodate the original six Southern slave states, where slaves constituted more than forty percent of the population. Under this provision, even though slaves could not vote, they were counted as three-fifths of a person, for purposes of determining each state’s Congressmen and Presidential electors.
Given this provision, it was no accident that 7 of the first 8 US Presidents were Virginian slave owners. This exaggerated Southern political power, entrenched by the anti-democratic electoral college, had disastrous consequences – it made resolving the problem of slavery without a regional civil war almost impossible. (Contrast Brazil’s relatively peaceful abolition of slavery.) From this perspective, the electoral college and prisoner disenfranchisement are both just throwbacks to America’s “peculiar institution,” slavery. As John Adams wrote in 1775,
All our misfortune arise(s) from a single source, the reluctance of the Southern colonies to republican government….The difficulties lie in forming constitutions for particular colonies and a continental constitution for the whole…This can only be done on popular principles and maxims which are so abhorrent to the inclinations of the barons of the South and the proprietary interests of the middle colonies…..
In a sense, the modern analog is even worse: prisoners can’t vote either, but they count as one whole person in the districts where they are imprisoned, for purposes of redistricting. In general, this approach to counting prisoners for districting purposes tilts strongly in favor of rural Southern and Western states – areas which also now happen to vote Republican.
Surprisingly, illegal immigrants are also included in the US Census count for redistricting purposes. Depending on where immigrants locate, this may reinforce the prisoner effect in some key states. The US illegal immigrant population has also been growing rapidly, with a Census-estimated 7.7 - 8.9 million illegals in the US by 2000, compared with about 3.5 million in 1990. According to the INS, two-thirds are concentrated in just five states – California, Texas, New York, Illinois, and Florida. However, unlike prisoners, estimating where illegal immigrants are located is much more uncertain. So the US policy of including non-voting illegals in the Census for purposes of drawing voting districts is also very peculiar.
Brazil. To encourage young people to get involved in politics, Brazil gives those who are 16 or 17 the right (but not the duty) to vote. This measure increases Brazil’s VAP by abou 6 percent. Brazil argues that a relatively low voting age is consistent with the spirit of the UN’s Convention on the Rights of the Child. It also argue that this youth vote acknowledges the basic fact that a majority of 16-17 year olds (in both Brazil and the US) pay taxes and can marry, drive, and be tried as adults, so they ought to be able to vote. So far Brazil has only been joined in this experiment by a handful of other countries, including Indonesia (age 17), Cuba (16), Iran (15), and Nicaragua (16). But the UK is now also seriously considering teen voting.
The US. The minimum voting age in the US has been 18 since 1971, when the 26th Amendment was adopted. A few states (Maine, California) have recently considered reducing the voting age below 18, but so far voting rights for 16-17 year-olds, much less the more radical proposal to let children of all ages vote, has not taken off. Obviously this cause has not been strengthened by abysmal voter turnout levels by 18-24 year old Americans in recent elections.
September 22, 2004 at 02:50 PM | Permalink | Comments (1) | TrackBack
Thursday, September 16, 2004
Democracy in America and Elsewhere: Part II: Recent Global Trends Toward Democracy


Of course we are also very proud of our free markets, our relative affluence, and our occasional ambitions -- at the moment perhaps a bit muted -- to provide equal opportunities for all our citizens.
However, when we try to market our country’s best features to the rest of the world, or teach our children to be proud of their country, it is not the economy that we brag about.
Even self-styled “conservatives” usually lead, not with glowing descriptions of perfect markets and opportunities for unlimited private gain, but with our supposedly distinctive commitment to defending and expanding political democracy and human rights at home and abroad.
Indeed, one of the most important official justifications for recent US forays into the Middle East, as well as our many other foreign interventions, has been to help bring “democracy” to supposedly backward, undemocratic societies like Iraq and Afghanistan (…and before that, Haiti, Colombia, Panama, Nicaragua, Grenada, Panama, the Dominican Republic, Cuba, Guyana, Guatemala, Iran, Laos, Vietnam, the Philippines, etc. etc. etc.)
Even though, time and again, this noble commitment has turned out to be pure rhetoric, it provides such an elastic cover story for all our many transgressions that it keeps on being recycled, over and over and over again.
Whatever the truth about US motives for such interventions, it may come as a surprise to learn that in the last two decades, the United States itself has actually fallen behind the rest of the democratic world in terms of “best democratic practices” and the overall representativeness of our own domestic political institutions.
Meanwhile, many developing countries have recently been making very strong progress toward representative democracy, without much help from us.
Indeed, in some cases, like South Africa, this progress was made in the face of opposition from many of the very same neoimperialists who have lately voiced so much concern about transplanting democracy to the Middle East.
While we have been resting on our democratic laurels, or even slipping backwards, the fact is that emerging democracies like Brazil, India, and South Africa, as well as many of our First World peers, have been adopting procedures for electing governments that are much more democratic at almost every stage of the electoral process than those found in the US.
The institutions they have been developing include such bedrock elements of electoral democracy as the rules for:
Of course effective democracy has many other crucial elements beside electoral processes alone. These include (1) the relative influence of legislative, executive, and judicial branches; (2) the concrete opportunities that ordinary citizens have -- as compared with highly-organized special interests and professional lobbyists -- to influence government decisions between elections; (3) the respective influence of private interests, religious groups, and the state; (4) the degree to which the rule of law prevails over corruption and "insider" interests; and (5) the overall degree of political consciousness and know-how.
However, fair and open electoral processes are clearly a necessary, if not sufficient, condition for effective democracy -- all these other elements simply cannot make up for their absence.
We hope that increasing the recognition of this “electoral democracy gap” between the US and the rest of the democratic world will be helpful in several ways:
This used to be much easier than it is now. As of the early 1970s, there were only about 40 countries that qualified as “representative democracies,” and most were First World countries.

Since then, however, there has been a real flowering of democratic institutions in the developing world. This was partly due to the collapse of the Soviet Empire in the late 1980s. But many more people were in fact “liberated” by the Third World debt crisis, which undermined corrupt, dictatorial regimes all over the globe, from Argentina, Brazil, and Chile to Indonesia, the Philippines, South Africa, and Zaire.
Voting in the Philippines, 2004
Assessments of the degree of “freedom” of individual regimes by organizations like Freedom House or the UN Development Program’s Human Development Indicators, are notoriously subjective. However, while there is plenty of room for disagreement about specific countries, there is little disagreement on the overall trend. (See Table 3.)
By 2004, about 60 percent, or 119, of the nearly 200 countries on the planet could be described as “electoral democracies,” compared with less than one-third in the early 1970s. Another 25-30 percent have made significant progress toward political freedom.
Voting in South Africa, 1994
Indeed, notwithstanding our present challenges in Iraq and Afghanistan, from the standpoint of global democracy, this has been a banner year. As of September 2004, 32 countries had already held nationwide elections or referenda, with 886 million people voting. (See Table 4.) By the end of 2004, another 33 countries will join the US in doing so – nearly three times as many national elections as were held each year, on average, in the 1970s.
All told, this year, more than 1.7 billion adults – 42 percent of the world’s voter-age population -- will be eligible to vote in national elections, and more than 1.1 billion will probably vote. That that will make American voters less than 10 percent of the global electorate.
Of course, some of these elections will be held in countries where democratic institutions and civil liberties are still highly imperfect. And some developing countries like Russia and Venezuela have recently been struggling to find a balance between democracy and national leadership, partly to undo the effects of neoliberal policies in the 1990s, or in response to terrorist threats.
But the good news is that democracy is clearly not a “luxury good.” The demand for it is very strong even in low-income countries like Bolivia, Bangladesh, Mozambique, Guatemala, and Botswana. And while self-anointed dictators, military rulers, and one-party elites or theocracies are still clinging to power in 50-60 countries that have more than 2.4 billion residents, such regimes are more and more anachronistic. (See Table 5.)
Interestingly, Asian dictatorships, especially China and Vietnam, now account for more than three-fifths of the portion of the world’s population that still lives under authoritarian rule. While several Islamic countries appear on the list of authoritarian countries, they account for just one fifth of the total. Furthermore, by far the most important ones happen to be close US “allies” like Pakistan, Egypt, Morocco and Saudi Arabia.
Evidently the simple-minded neoconservative “clash of cultures” model, which pits supposedly democratic, pluralist societies against an imaginary Islamic bloc, doesn’t have much explanatory power.
Furthermore, the US also clearly faces some very tough choices, if it is really serious about promoting non-discriminatory, secular democratic states that honor the separation between church and state among its Islamic allies, as well as in Palestine, and, for that matter, Israel.
Voting in East Timor. 2001
A more encouraging point is that many developing countries are already providing useful lessons in democratization. Indeed, as we will see in Part III of this series, there is much to learn from the experiences of new democracies like Brazil and South Africa.
These countries are undertaking bold experiments with measures like free air time for candidates, “registration-free” voting, direct Presidential elections, electronic voting, proportional representation, and the public finance of campaigns. While not all these experiments have worked out perfectly, the fact these countries have already demonstrated a capacity to innovate in “democratic design” is very encouraging.
Of course there is a long-standing tension between the US dedication to Third World democracy and its tolerance for the independence that democratic nationalism often brings. By renewing and deepening our own commitment to democracy at home, we will also protect it abroad -- even though (as in Venezuela, Russia, Iran, and perhaps eventually also Iraq) it does not always produce governments that we agree with.
September 16, 2004 at 09:08 PM | Permalink | Comments (2) | TrackBack
Wednesday, September 15, 2004
Democracy in America and Elsewhere: Part I: Does It Really Have to Be This Way?
Although many pundits and politicians have hailed this contest as the “most important election of our lives," and talked about the “striking difference” between the two top candidates, most opinion polls show that a majority of ordinary Americans are profoundly dissatisfied with the limited choices available on this year's Presidential menu, with a majority of undecided voters disapproving of both Bush and Kerry in this week's polls.
They correctly sense that the prolonged, torturous process by which we choose the Leader of the Free World is deeply flawed. Many are asking, “Am I the only one who is unhappy with having to choose between these two Yale-bred prima donnas?......the only one who feels that this year's campaigns and the mass media have systematically avoided most of the critical issues that confront our country??”
If so many Americans prefer a different type of politics, however, why can’t they have it?
It turns out that this year’s unsatisfying campaign isn’t just an aberration. Rather, many of its less attractive features are a direct byproduct of deep-seated structural flaws in our electoral system, most of which are decades- or even centuries-old.
Unless we undertake the fundamental reforms required to fix these problems, our version of "democracy" is likely to become less and less attractive as a role model.
These structural flaws come into sharp relief is when we compare the US to other democracies, especially several younger ones that have proved to be much more innovative than we are when it comes to "designing democracy."
When we do so, we arrive at a disturbing conclusion: in many respects, American democracy is falling behind the rest of the democratic world.
As we will explore in this series, the fact is that many other countries – including several developing countries as well as our First World peers – have adopted electoral processes that are much more democratic than our own.
Rather than bemoan this year’s Presidential campaign, therefore, we propose to explore the root causes of our political malaise. We will tackle this problem with the help of a comparative approach, examining "best practices" in other leading democracies that are working hard to insure that national elections are more than just the costly, high-carb biennial beauty pageants that they have become in the US.


Another factor that has made the race close is the record level of campaign spending on both sides – more than $795 million for the Presidential race alone, plus at least $272 million of “527” money, including $20 million from the National Rifle Association and $2.6 million from the Swift Boat Veterans group. Contrary to expectations, both parties have stayed about even in the money rush, despite President Bush’s renowned fund-raising abilities.
Finally, there have also been an unusual number of wild-cards – putative terrorist threats, oil price shocks, North Korean nukes, job growth, Ralph Nader’s quixotic quest, and the continuing ups and downs of the Iraq and Afghan Wars, plus all the typically American quasi-religious disputes over gay marriage, the Vietnam War, assault rifles, stem cell research, and late-term abortions.
Along the way, we've had a floodtide of small-bore reporting, encouraged by instant polling, “rapid response,” and the army of several thousand reporters who have nothing better to do than cover the campaign 24/7 and 31/12.
Much of the resulting reportage reads like a kluge of the Daily Racing Form and the National Enquirer, with far less attention paid to hard policy issues than to campaign tactics, polls, and candidate “features" -- values, personal histories, eating habits, wives, children, appearances, misquotes, and mood swings. (For a good example, witness, for example, today's cover stories on "where's Edwards?" in both the San Francisco Chronicle and the New York Times.)
So far the candidates, their campaigns, and their advertising have reinforced this pattern, spending far more time on their own values and competence than on fundamental issues -- or on the real benefits that voters would derive from electing them. Even when they do get down to issues and actual benefits, the focus is on just a handful that won't offend undecided voters in key states. (See Box A.) Given the electoral college, they are also spending almost all their time and resources in the same 15-16 “battleground states,” where the polls show a gap between Kerry and Bush of 3 percent or less. (See Table 1.) Within these states, they are also focusing on the same 6-10 percent of voters who have somehow managed to remain “undecided” even at this late date.
As a result, this year's election will be decided by just a sliver of potential voters in a handful of states. The battleground states account for less than a third of all US “voter-age” residents or “potentially-eligible voters” -- after deducting non-citizens, convicts, and others not eligible to vote. If these states repeat the modest turnouts that prevailed in 2000, less than 57 percent of their voting age populations will vote. And since a winning candidate only needs a plurality, which can be less than 50%, this implies that in a country with more than
Given the way our particular version of democracy is structured, therefore, the rest of us face the fact that the chances that we will die in an accident on the way to the voting booth are infinitely greater than that our votes will have any impact whatsoever on this election. As we will see below, the chances are also slim to nilthat we will exert any influence on the vast majority of Senate or Congressional races.
All this might not matter so much if undecided voters in battleground states were good proxies for the rest of us. But they are not.
As indicated in Table 2, they differ from the rest of the country in many important respects. Most of these states are relatively backward, in the bottom half of all 50 states in terms of per capita incomes and education levels, with a much higher-than-average share of poor residents. Nearly a quarter of their populations live in rural areas, twice the average share for non-BG states.
Compared with non-BG states, the residents of these states are also more likely to own guns, and much less likely to have lost factory jobs in the recent recession. They are also more religious -- Catholic voters account for 40 percent and 35 percent, respectively, of all potential voters in New Mexico and New Hampshire, while conservative Christians account for more than a third of the population in 10 of the 15 BG states, and orthodox Jews are a key voting bloc in Florida. Hispanics account for more than 15 percent of potential voters in Florida, Arizona, Nevada, and New Mexico. Illegal immigrants constitute a critical part of the work force and Census headcount (for apportionment purposes) in half the BG states.
Furthermore, as shown in Table 1, almost half of the BG states have harsh “felon disenfranchisement” laws. Most of these permanently deprive anyone ever convicted of a felony within their states of the right to vote, even after their sentences have been served. These laws could play a decisive role in battleground states like Florida, Virginia, Arizona, Tennessee, and Iowa, just as they did in 2000.
All told, given the “winner take all” nature of the US electoral college system (see below) and the strategic role of so-called “undecided voters” will play in battleground states, it is not surprising that there is a long list of important issues where both Bush and Kerry have either both been completely silent, or have adopted straddling positions, many of which can only be distinguished from the President's under an electron microscope.
So far, at least, Kerry appears to have bet heavily that the American people will choose him mainly because he's brighter, more competent and more trustworthy than Bush, not because his foreign and domestic policy alternatives are wildly different and exciting. This is a bet that the far more well-liked, if quasi-competent and semi-literate Bush has been delighted to accept.
As a result, as discussed in Box A, even though a majority of US voters may well be open to far less timid new approaches to issues like the Iraq War, farm subsidies, illegal immigration, gun control, energy conservation, corporate crime, our relationships with “allies” like Israel and Saudi Arabia and “enemies” like Cuba, Iran, and Venezuela, not to mention the Patriot Act, balancing the budget, global warming, reforming Social Security, and revising drug laws, from the standpoint of capturing marginal voters in battleground states, many of these issues have been deemed “no win” and too-hot-to-handle.
Furthermore, when other candidates – independents and third party candidates – try to raise such issues, they are either ignored or tagged as “spoilers” whose presence only serves to help those voters’ least preferred candidates. Since such candidates are marginalized by the mainstream media and excluded from US Presidential debates, the major party candidates can easily skip over any special issues that they seek to raise.
Despite all the hoopla, therefore, many American voters justifiably feel like they've been invited to dinner and served pictures of food. In effect, discourse on fundamental issues has been stifled by the rules of the American electoral game.
E.g., it is not only the felons who have been disenfranchised by this US Presidential election process.
Does it really have to be this way? To get a handle on this question, it will be helpful for us to step back and take stock of how the US stacks up against other democratic countries, especially those in the developing world -- not in terms of economic performance, but in terms of effective electoral democracy. Interestingly, it turns out that we actually have quite a few things to learn from them.
September 15, 2004 at 10:38 PM | Permalink | Comments (2) | TrackBack
Thursday, June 03, 2004
We Remember - Tiananmen Square, Beijing June 4, 1989
Those who take
the most from the table
teach contentment.
Those for whom
the taxes are destined
demand sacrifices.
Those who eat their fill
speak to the hungry
of the wonderful times to come.
the country into the abyss
call ruling too difficult
for ordinary men.
June 3, 2004 at 11:28 PM | Permalink | Comments (0) | TrackBack
Sunday, May 09, 2004
04509.US Brutilitarianism Comes to Iraq- Part II: The Roots of Brutality


In the midst of all the hoopla and finger-pointing over Secretary Rumsfeld’s apology for the Iraqi prisoner abuses at Abu Ghraib prison, we seem to have avoided getting to the bottom of the fundamental question begged by all those ugly photos: why did it happen?
In other words, how could young American soldiers, raised in a nominally democratic, civilized “Judeo-Christian” society, and members of the world's most advanced military, which has no business being in Iraq if not to “liberate” it from precisely this kind of oppression, come to act in this way?
From this angle, whether or not Rumsfeld or a few military commanders resign is beside the point – a juicy chance for Senator Kerry and his supporters to make political hay, perhaps, but largely irrelevant to our understanding of these disturbing events and the prevention of their recurrence.
This is especially true if, as we will argue here, they may have been part and parcel of the very nature of this ethnically-divisive dirty little urban guerilla war.
ALTERNATIVE EXPLANATIONS
At this point, the official US investigation, as well as press accounts, of the recent abuses at Abu Ghraib prison are incomplete. Already, however, there are several conflicting explanations.
“Exceptional Evil-Doers.” As noted in Part I of this series, the prevailing view of US officials is the “bad apple” theory -- in President Bush's words, "the wrongdoing of a few." This explanation -- which has deep roots in American culture, dating as least as far back as the Salem Witch trials, and is also at the heart of our conventional view of "terrorists" -- attributes the problem to brutal, distinctly “un-American” misbehavior by handful of “bad” people. In this view, this tiny group is clearly distinct from the vast majority of decent, Geneva Convention-abiding US military personnel. This explanation has been adopted by a wide variety of political and military leaders, from President Bush, Secretary Rumsfeld, and General Myers to Senators MeCain, Kerry, and Clinton. It also appears to be the predominant view in the mainstream press, perhaps because it lends itself to the kind of lengthy profiles of soldiers that, for example, the New York Times and the Washington Post have both front-paged several times this week. It is also necessarily more comforting to supporters of the Iraq War -- including all the leaders and newspapers just mentioned -- who view this scandal as an embarrassing, unhelpful distraction from the immediate task at hand, which is to get on with "stabilizing" the security situation in Iraq (e.g., crushing the resistance).
This kind of explanation is a standard one for individual criminal conduct in general. Typically it locates the roots of abusive behavior in the supposed predispositions of particular abusers to commit them. The contributing dispositive factors may vary -- pathological or "authoritarian" personalities, genetic defects, retributions for perceived injustices, inadequate schooling, too much TV, weak role models, or Salem witchery, for all we know. Whatever these underlying, the indicated prescription focuses on identifying and and handling these “bad seeds,” and in this case, any individual commanders who may have also “failed” to supervise them.
(to be continued....)
May 9, 2004 at 02:55 PM | Permalink | Comments (2) | TrackBack
Thursday, May 06, 2004
0505.US Brutilitarianism Comes to Iraq- Part I: Rogue Behavior, Sheer Stupidity, or Something More?
Since all the claims about Saddam’s WMDs and other threats to global security are now in tatters, the goal of replacing his regime with a more humane one is one of the few justifications for the Iraq War that still has any credibility.
It is therefore deeply disturbing to learn that serious human rights violations, including several cases of torture and outright murder, may have been committed against scores of Iraqi prisoners by leading elements of the Coalition Forces, including the US Army Reserve Military Police, US Military Intelligence (INSCOM), the CIA, and private contractors like CACI International that have been providing so-called “intelligence collection” services to the Pentagon. Similar allegations have also surfaced about the British Army, although those charges may have been exaggerated by the Daily Mirror. This is of course in addition to the thousands of civilian deaths that our precision-guided military has produced all over the country with its "fire and forget" tactics.
A preliminary investigation of these charges by US Major General Antonio M. Taguba, disclosed last week by CBS News and the New Yorker, concluded in February that the alleged abuses included:
Breaking chemical lights and pouring the phosphoric liquid on detainees; pouring cold water on naked detainees; beating detainees with a broom handle and a chair; threatening male detainees with rape; allowing a military police guard to stitch the wound of a detainee who was injured after being slammed against the wall in his cell; sodomizing a detainee with a chemical light and perhaps a broom stick, and using military working dogs to frighten and intimidate detainees with threats of attack, and in one instance actually biting a detainee.
While this behavior pales by comparison with the sadism that was routinely practiced by Saddam’s minions on a massive scale, it has no place in a post-Saddam Iraq, and the US and UK certainly have no business encouraging it. Nor, despite the usual defences often heard in right-wing quarters for "selective torture" to deal with terrorism, is there any evidence that the interrogation methods employed here produced anything more than a public relations debacle for the US and its allies.
These charges may be new to American audiences, but this is far from the first time that they have been made. According Iraq’s former Human Rights Minister, Abdel Basset al-Turki, who resigned on May 4th in protest over these allegations, US Pro-Consul Paul Bremer was put on notice about this widespread mistreatment as early as November 2003, but did nothing. The International Red Cross also reports that if has been complaining for months to the Coalition of methods "far worse" than those depicted in the photos released by CBS, but to no avail.
This is consistent with the brush-off that Paul Bremer and Condi Rice reportedly both gave to the concerns that Amnesty International first raised about conditions in Iraqi prisons way back in July 2003.
The Pentagon also now says that it ordered a “high-level review” of the issue last fall, but this must have had little impact on the ground, since the abuses noted above took place in December 2003.
Now that President Bush himself has finally pronounced these abuses “abhorrent” on two Arab television stations, the military may find more time to focus on the results of the "30 investigations” of these and related charges that it claims to have conducted over the past 16 months. In the wake of Donald Rumsfeld's passive "know-nothing" response to the escalating scandal, calls for his resignation are mounting, and the heads of more than just a few mid-tier officers may also have to roll before justice is done here. Certainly Rumsfeld has a lot of questions to answer, including why he said nothing to Congress about the investigation; why so many cases of brutality have been recorded; why nothing was done to change conditions at Abu Ghraib and elsewhere, despite numerous complaints over many months from Amnesty International and the International Red Cross; why private contractors were permitted to play such a large role in military intelligence; and, most important, why the rules of the Geneva Convention are not being enforced by US military and intelligence personnel.
All told, this scandal is shaping up to be a touchstone for the whole Iraq enterprise. It is worth trying to understand how this happened – and why, in particular, American soldiers who were supposedly raised in a democratic, more or less civilized country and trained by our sophisticated, extraordinarily-expensive modern military, should have participated rather gleefully in such bizarre behavior -- and even photographed it, too!
THE RHETORIC - “TORTURE IS ILLEGAL”
To begin with, lest all the civil and military servants in the audience need to be reminded, this kind of behavior, if substantiated, constitutes a clear violation of one of the most fundamental, widely-shared principles of international and US law – the absolute prohibition against torture.
This prohibition, which is as universal as the ones against slavery or piracy, extends to all prisoners of war, civilians, and all other war-time detainees. Indeed, while Iraqi insurgents may not be deemed to be part of the Iraqi armed forces, and therefore are not technically “prisoners of war” for purposes of the “combatant’s privilege – to fire on enemy troops without fear of prosecution - they are still entitled to the same basic rights so far as interrogation is concerned.
It is interesting to see just how many times this prohibition has recently been repeated in international law -- especially since so many countries still routinely engage in the practice.
- The 1948 Universal Declaration of Human Rights, Article 5: “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.”
- The 1949 Geneva Convention (4th Convention, Article 31): “No physical or moral coercion shall be exercised against protected persons, in particular to obtain information from them or from third parties.”
- The 1966 International Covenant on Civil and Political Rights, Article 7: “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.”
- The 1975 Declaration on the Protection of all Persons from Being Subjected to Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, unanimously adopted by the UN General Assembly: “No state may permit or tolerate torture or other cruel, inhuman or degrading treatment or punishment. Exceptional circumstances such as a state of war or a threat of war, internal political instability or any other public emergency may not be invoked as a justification of torture or other cruel, inhuman or degrading treatment or punishment.”
- The 1987 UN Convention Against Torture, which focuses on official conduct, repeats the prohibitions noted above, and also provides that (Article 2): "An order from a superior officer or a public authority may not be invoked as a justification of torture."
All of these conventions have been signed and ratified by both the US and the UK -- although the Bush Administration has actually cooperated with countries like Syria, Libya, and Cuba to oppose efforts to give international inspection “teeth” to these anti-torture conventions.
Of course such prohibitions against torture, cruel and degrading treatment of prisoners prior to conviction, arbitrary detention, “cruel and unusual punishment,” and self-incrimination are also cornerstones of the American and British legal systems.
In the case of the US, they have at least a 200-year history, and are deeply embedded in the US Constitution especially the Fifth, Eighth, Thirteenth, and Fourteenth Amendments. They have also been recognized by numerous state and federal statutes, including the Uniform Code of Military Justice, the War Crimes Act (18 USC 2441), and the 1991 Torture Victims Prevention Act (28 USC 1350 App.)
More recently, the US also played a leading role in prosecuting war crimes at Nuremberg and Tokyo after World War II, and helped finance and organize the prosecution of the war crimes committed in the Balkans and Rwanda in the 1990s. Of course the Bush Administration has also recently taken pride in distinguishing itself from “Axis of Evil” regimes like Saddam’s, North Korea and Iran in this respect.
RELIEF?
So what relief will all this weighty legal doctrine actually provide for the individual Iraqis who were victimized in this case? The short answer is – not much, at least in case of the US.
There appears to be probable cause to prosecute the officers and enlisted personnel involved, as well as any senior officials who knew or should have known about these activities, for war crimes in US or UK military courts, or, in the case of the UK, by the newly-created International Criminal Court (see below.) But while that might satisfy the victims’ needs for retribution, it won’t provide them with any compensation.
The Iraq Special Tribunal that we established in December 2003 to prosecute war crimes and crimes against humanity – mainly those committed by the Ba’athist regime – was carefully limited just to jurisdiction over Iraqi citizens and residents.
In the case of the private US contractors involved in this case, the Iraqi torture victims might at least be able to sue in a US federal district court for the damages inflicted against them under “color of law,” as provided by the Torture Prevention and Alien Tort Claims statutes. But this could be a hard case to prove, especially if the contractors involved were careful to let the military police do all their dirty work.
If the allegations of British misbehavior hold up, the Iraqis might also be able to bring war crimes charges against UK soldiers and their bosses at the new International Criminal Court -- since, unlike the US, Britain ratified the treaty establishing this court last year. This might make for an interesting complement to Saddam’s war crimes tribunal, scheduled to begin later this year. However, even apart from the practical obstacles to such prosecutions, Iraq’s “new government,” hand-picked by the Coalition, would probably readily grant the UK a waiver against such complaints. But British troops might still be subject to the UK's Human Rights Act, which might provide compensation to Iraqi victims for violations of the European Convention on Human Rights. Indeed, 14 Iraqi families have already commenced an action in the UK's High Court for what they consider unlawful killings of their civilian relatives in the last year by British troops.
DAMAGE CONTROL?
When all these revelations first appeared – reportedly after CBS News held the story for two weeks at the request of the US military, which feared the impact on Arab opinion ("duh") -- senior military officers in the US and the UK, as well as political leaders like Prime Minister Blair, President Bush, and even the rather cautious Senator Kerry, were all quick to condemn the obviously indefensible misbehavior. But they were also quick to claim, prior to any investigation, that this behavior must have been exceptional, engaged by at most a handful of “rogue elements” in the military and the CIA, who will now all be sternly dealt with.
However, as Amnesty International has noted, these were not just isolated incidents. Indeed, as we’ll argue below, they appear to be part of a disturbing trend toward the increasing use of “hard-core” interrogation techniques on Arab detainees by the US and its new allies in the “war on terror,” both abroad and at home.
Moreover, the US and UK civilian and military intelligence services and their contractors and surrogates have a long history of intimate involvement with such interrogation methods.
In fact what’s really most unusual about these recent scandals is not the revelation that all these services routinely use such methods, but that in this case they got their hands dirty.
Usually they are smarter than that, outsourcing the "wet work" to Third Worlders in countries with fewer reporters, human rights observers, or young Army reservists.
Ironically, in the case of occupied Iraq, these intelligence services had no other country to "outsource" the work to. With thousands of Iraqi prisoners to deal with, and a growing insurgency, they also had little choice but to rely on at-hand Army Reservists, at least one of whom decided to turn in his comrades. If the military and the intelligence services had not gotten caught, one wonders how many of those "30 investigations" and 25+ deaths in detention we'd have ever heard about.
There is also evidence that, especially in the wake of 9/11, similar tactics may be spreading to domestic law enforcement back in the USA – reflecting a growing militarization of police work. Interestingly, such tough tactics may not actually produce any more solved crimes. But they do provide nice opportunities for frustrated investigators to blow off steam.
Tying all this together, the patterns revealed here really belie the conventional notion that the hard-core interrogation tactics recently seen in Iraq were simply rogue actions by a group of unprincipled individuals.
Nor were they, in Donald Rumsfeld’s words (after four days of silence on the subject), simply “unacceptable and un-American.”
It is more accurate to say that, under the license of our new post-9/11 crypto-culture, many military and civilian intelligence and law enforcement officials apparently feel entitled to violate fundamental civl rights – especially those of Arabs and other suspect minorities – in the interests of pursuing “bad guys.” This is a little taste of what it was like to have been a white cop in Macon, Georgia, or Jackson, Mississippi, in 1956.
So this kind of behavior has become, if anything, all too acceptable, all too American. To make sure that it diminishes, rather than continues to grow, we need to get to the bottom of the institutional failures , not just the individual errors in judgment, that foster it. Just as we (almost) once got to the bottom of the systemic problems in Macon and Jackson.
THE REALITY
The latest disclosures from the Pentagon, when added to other reports in the last two years, add up to some disturbing patterns:
Iraq. As the Pentagon only disclosed on May 4, since December 2002 it has launched investigations of at least 25 suspicious deaths of prisoners in custody in Iraq and Afghanistan, and 10 cases of assaults. In addition, in Iraq, three Army reservists –Army Reserve military police, like those accused in the most notorious incidents -- were discharged in January 2004 for abusing prisoners at Camp Bucca, south of Baghdad near Umm Qasr. In December 2003, two British soldiers were arrested but released after an Iraqi prisoner died in their custody. In November 2003, Major-General Abed Hamed Mowhoush, of Saddam’s Republican Guard, fell ill and died during “an interview with US forces." In August 2003, a US Army lieutenant colonel received a fine, but no court marshall, for firing a shot near a detainee’s head during an interrogation. There have been reports of similar abuses at “Camp Cropper” and “Camp Bucco,” near the Baghad International Airport. Furthermore, the US has been very slow to provide information on the whereabouts and conditions of up to 10,000 civilians who have been detained in Iraq, leaving many family members completely in the dark about them. And, according to Amnesty International, these detainees have been “routinely subjected to cruel, inhuman or degrading treatment during arrest and detention.”
Afghanistan. According to Amnesty International, detainees interrogated by the CIA at Bagram Air Base have allegedly been subjected to "stress and duress" techniques that include ”prolonged standing or kneeling, hooding, blindfolding with spray-painted goggles, being kept in painful or awkward positions, sleep deprivation, and 24-hour lighting.” In December 2002, two Bagram detainees died under suspicious circumstances. A 13-year old Afghan boy who was detained in Bagram for two months described it as
“...a very bad place. Whenever I started to fall asleep, they would kick on my door and yell at me to wake up. When they were trying to get me to confess, they made me stand partway, with my knees bent, for one or two hours. Sometimes I couldn't bear it anymore and I fell down, but they made me stand that way some more."
A December 2002 press report on standard practices at Bagram sounds like it is not all that different from what recently was discovered to be going on at Abu Ghraib prison in Iraq:
Captives are often "softened up" by MPs and U.S. Army Special Forces troops who beat them up and confine them in tiny rooms. The alleged terrorists are commonly blindfolded and thrown into walls, bound in painful positions, subjected to loud noises and deprived of sleep. The tone of intimidation and fear is the beginning, they said, of a process of piercing a prisoner's resistance. The take-down teams often "package" prisoners for transport, fitting them with hoods and gags, and binding them to stretchers with duct tape…..
The US military has also been accused of standing by and watching while its allies in the Northern Alliance slaughtered up to 4000 captured Taliban prisoners of war.
Other Secret Detention Centers. There have also been reports of serious psychological and physical abuse at Guantanamo’s Camp X-Ray and Camp Delta, and other off-limits detention centers, such as Diego Garcia in the Indian Ocean. Up to 3000 detainees are being held in such facilities, but US military officials have refused to disclose their precise names and numbers, and have only allowed intermittent visits from the International Red Cross. In Guantanamo alone, after two years, more than 660 inmates are currently in detention, including some children. All these detainees have been designated as “unlawful combatants” by the US military; we do not know their names or the charges against them, and none of them have received any judicial review, access to lawyers, or even contact with relatives. Indeed, even US citizens are being held in this indefinite “right-less” limbo status, the legality of which is now being challenged in the US Supreme Court. It seems likely that the prisoners’ right-less status has helped to encourage abuses against them.
“Refoulement.” The US has also apparently subjected hundreds of suspects – including, according to the CIA’s George Tenet, at least 70 before September 11th -- to “extraordinary renditions” to countries like Jordan, Egypt, Uzbekistan, Morocco, Saudi Arabia, Israel, and Syria where edgy interrogation methods are routine. According to one report, in the mid-1990s the CIA significantly expanded its efforts to snatch suspected Arab terrorists for purposes of such renditions, from which it shared in any resulting information, by way of a new secret Presidential “finding” that purportedly "authorizes" it -- in violation of all the international treaties noted earlier. According the US State Department’s own country reports, the interrogation methods employed by these US allies include:
- Egypt: Suspension from a ceiling or doorframe; beatings with fists, whips, metal rods, and other objects; administration of electric shocks; being doused with cold water; sexual assault or threat with sexual assault
- Israel: Violent shaking; smelly head-bag; painful positions; "truth serums;" torture of teenagers.
- Jordan: Beatings on the soles of the feet; prolonged suspension in contorted positions; beatings
- Morocco:Severe beatings
- Pakistan: Beatings; burning with cigarettes; sexual assault; administration of electric shocks; being hung upside down; forced spreading of the legs with bar fetters
- Saudi Arabia: Beatings; whippings; suspension from bards by handcuffs; drugging
- Syria: Administration of electric shocks; pulling out fingernails; forcing objects into the rectum; beatings; bending detainees into the frame of a wheel and whipping exposed body parts.
Deeper Roots. While the “war on terrorism” has given hard-core interrogation techniques a new lease on life, in fact the Afghan and Iraqi situations are only the most recent examples of their development by both the US military and the CIA. They sponsored a great deal of primary research on the subject, drafted “how-to” manuals for use in torture/interrogation training, and provided a great deal of instruction and assistance to the global hard-core interrogation industry. Among the many recipients of this development assistance were the Shah’s Iran, Brazil and Uruguay in the 1960s (by way of Dan Mitrione and others), Vietnam (by way of the Phoenix Program’s “Provincial Interrogation Centers), Guatemala and El Salvador in the 1980s, and Honduras’ infamous Battalion 316 in the early 1980s -- where our new US Ambassador to Iraq, John Negroponte, also served in 1981-85.
Dubious Methods Back Home. There is also evidence that the same rough-trade interrogations tactics that US soldiers have recently employed offshore are also showing up more frequently in the US. For example, last December, a Department of Justice investigation disclosed the widespread use of mistreatment and abuse during the interrogation of dozens of Muslim detainees at the Metropolitan District Detention Center in Brooklyn, in the aftermath of September 2001.
More generally, there have also been a growing number of instances of gross brutality inflicted on prisoners in the US' own increasingly over-crowded prison system -- which currently houses more than 2.1 million inmates, the world's largest prison population. Some state systems -- like California's, with more than 160,000 inmates -- are on the verge of breakdown, with crowded conditions, "guard gangs" as well as prisoner gangs, budget shortages, and rampant violations of prisoner rights. Just this year, for example, an inmate on a dialysis machine at California's Corcoran State Prison bled to death while guards ignored his screaming, as they watched the Super Bowl. This is just one of many horror stories that occur on a daily basis in the US prison system. So it is perhaps no accident that at least two of the six US soldiers facing criminal charges in connection with the Abu Ghraib scandal in Iraq were prison guards back home, and one of them was employed at a Pennsylviania prison that is notorious for prisoner abuse.
In an episode that is in some ways even spookier, in February 2004, agents of the US Army’s Intelligence and Security Command (INSCOM) -- which also oversees the same military intelligence units that have been misbehaving in Iraq -- actually showed up undercover and uninvited at a University of Texas Law School Conference in Austin on “The Law of Islam” in civilian garb, and later demanded a list of all the attendees and questioned several students in an aggressive manner. The Army later apologized, and promised to institute new refresher courses on the proper limits of its domestic authority.
Indeed, the US Army might start by reviewing the fundamental federal law that has been on the books since 1879 – the "Posse Comitatus Act" (PCA) (18 USC 1385), which provides for fines and imprisonment for anyone who uses the US military for domestic law enforcement or surveillance, except in times of national emergency or under certain other limited exceptions, none of which applied here.
This growing militarization of US law enforcement -- complete with Predator drones, SWAT teams, US Marines shooting 18-year old goat-herders in the back on the Mexican border, and now the very latest fine refinements on interrogation techniques from Guantanamo and Abu Ghraib -- may be an inevitable byproduct of our brand new global wars on terrorism, drugs, anti-imperialism, and Islamic radicals whose faces we don't happen to like. But those of us who are back home, supposedly the beneficiaries of all this "national security," had better wake up and pay attention to the impact that this emerging "state of siege" mentality is having on our rights -- and those of the Iraqis people that we are supposed to be "liberating."
NEXT: PART II: THE ROOTS OF BRUTALITY.
_________
May 6, 2004 at 01:12 AM | Permalink | Comments (2) | TrackBack
Thursday, April 01, 2004
"The Worst April Fool's Joke Ever:" Brazil's 1964 Coup The Foundations of Regressive Development


April 1, 2004 is not only April Fools Day in the US and Europe. It is also the fortieth anniversary of “the worst April Fools’ joke ever,” as many Brazilians called it, the 1964 US-backed military coup in Brazil that overthrew the constitutional, democratically-mandated government of its populist President, João Goulart.
This coup led directly to 21 years of disastrous rule by Brazil’s military. During that period, the military cracked down sharply on all political opposition, independent trade unions, and critical media. It also piled up one of the world’s largest foreign debts, tried to develop nuclear weapons and intercontinental missiles, and pursued a national development strategy that favored the construction of huge, poorly-planned but highly lucrative hydro dams, Amazonian highways, and nuclear plants over investment in education and other basic human needs.
As described in more detail in the following excerpt from The Blood Bankers, all this proved to be very profitable for the officials, generals, and foreign and domestic bankers that catered to the regime’s needs.
But it also created a legacy of distorted development, poverty, concentrated land and media ownership, deforestation, environmental pollution, high-level corruption, and inequality, as well as a culture of violence and disregard for human rights.
Fortunately, Brazil, a country with 182 million people that accounts for more than two-thirds of South America's entire economy, returned to civilian rule in 1985. But it still struggles with most of these problems to this day.
As the following account makes clear, the US Government was deeply involved in encouraging the coup at the highest levels -- n.b. recently-declassified White House tapes and documents. Once in power, Brazil’s military also played a crucial role in the empowerment of right-wing regimes in several other Latin American countries, including Bolivia and Uruguay. Indeed, top US policymakers viewed Brazil’s military as a very useful agent, which could be used to impart a hard right spin to political development all over the Southern Hemisphere.
The standard apology for all this is that it was the price that had to be paid to contain the global Communist menace. When examined carefully in the bright light of day, this excuse turns out to be a canard. The fact is that Brazil never faced a serious revolutionary threat from the Left; that Goulart and his supporters were at worst populist, nationalistic land-reformers and union supporters; that the generals and their friends in Brazil's elite systematically exaggerated the leftist threat in order to justify their appetite for power, which gave many of them offshore bank accounts; that Presidents Kennedy, Johnson, and, later on, Nixon, were completely spooked by the Castro fiasco into overreacting to such populists all over the Third World; that the Brazilian coup completely undermined the rule of law, labor unions, human rights, and political freedoms for many years; and that it also led to decades of short-sighted economic policies that damaged millions of lives.
In short, if we really want to understand the roots of Latin America's comparative poverty, inequality, violent culture, and distorted development, as well as why many Latin Americans do not necessarily share the gringos' high esteem for their own role in history, the story of Brazil's 1964 military coup is a good place to start.
FOUNDATIONS
One long-time Brazilian banker recalled that at that time (the early 1960s) JPMorgan's position in Latin America was “essentially nowhere.” Years earlier, of course, it had been one of the first U.S. banks to do international banking. In the l880s, J.P. Morgan Sr. acquired Morgan et Cie in France and a third of London’s Morgan Grenfell, and in l908 the bank added Guaranty Trust Company, which had French, Belgian, and UK branches. From l890 to l930 Morgan floated more Latin American bonds than any other bank. But from the Depression until the l950s it had largely neglected Latin America. By l964, its entire Mexican exposure was only $15 million, and its Brazilian exposure just $50 million, and Morgan’s Latin American group was run by people who were ”not very aggressive....bright but not out-going.....(the head) would show up in Rio and wait at his hotel for clients to call on him.” Of the group’s five bankers, only Fred Vinton, the son of a long-time Citibank rep in Buenos Aires, had ever lived in Latin America. Citibank, Chase, and Bank of Boston all had local branches in Rio and São Paulo, but not Morgan.
Of course, at the time, Brazil was viewed as quite a risky place to do banking. Juscelino Kubitschek, the country's President from l955 to l961, had embarked on an ambitious ”Fifty Years in Five” program, promoting industrialization and huge projects like Brasilia, the new federal capital in the remote state of Goiás, that was aptly described as “the revenge of a Communist architect against bourgeois society.” Kubitschek’s program produced five years of 7 percent growth, unprecedented corruption, and the Third World's largest debt, $2.54 billion by l960. That may not sound like much now, but it consumed forty percent of Brazil’s export earnings. In l961, Janio da Silva Quadros, Kubitschek's successor condemned this debt in terms that later generations would fully understand:
All this money, spent with so much publicity, we must now raise bitterly, patiently, dollar by dollar and cruzeiro by cruzeiro. We have spent, drawing on our future to a greater extent than the imagination dares to contemplate.

But Janio Quadros soon proved to be one of Brazil’s weirdest leaders. He also tried to ban horse racing, boxing matches, and bikinis on the beach, and when the U.S. pressured him to embargo Castro, he defiantly journeyed to Havana and awarded Che Guevara the Ordem do Cruzeiro do Sul, Brazil's equivalent of the Legion d'Honeur. At one point early in his term he had been visited by Adolfe Berle, Jr., President Kennedy’s special assistant on Latin America. Kennedy was quietly seeking Quadros’ support for the upcoming Bay of Pigs invasion. According to John M. Cabot, the US Ambassador to Brazil at the time, Berle effectively offered “Brazil” a $300 million bribe in return for cooperation. But Quadros became “visibly irritated” after Berle ignored his third rejection, and sent Berle off to the airport unaccompanied. A few months later, in August 1961, Quadros resigned, complaining of being surrounded by ”terrible forces,” and blamed his downfall on a cabal that included “reactionaries” Berle, Cabot, and US Treasury Secretary C. Douglas Dillon.
Goulart and Kennedy
This allowed the succession of João Goulart, Janio’s Vice President, a wealthy populist cattle farmer from Rio Grande do Sul. Goulart visited the US in April 1962, addressed a joint session of Congress, and received a ticker tape parade in New York City. But he immediately proceeded to alienate every key interest group at once, launching an aggressive land reform, boosting taxes on foreign investors, nationalizing utilities and oil refineries, and even encouraging enlisted men in the Army to organize a union. Inflation soared to the unheard-of level of 100 percent, exhausting four Finance Ministers in two years. All this was a splendid recipe for counterrevolution -- Brazil’s usually fractitious military leaders banded together and organized a coup, was supported by business, most of the “middle class,” and the U.S., which spent tens of millions of dollars on a covert ant-Goulart media campaign. In l963, Goulart's second Finance Minister visited Washington and asserted that the left-leaning regime’s social reforms had been inspired by President Kennedy’s so-called "Alliance for Progress" But he received a cold shoulder -- the US aid window closed down until April 1964, after the coup. As early as l962 U.S. intelligence had warned of coup preparations, and was more than sympathetic. As David Rockefeller, who was at that point the President of his family’s bank, Chase Manhattan, told a closed-door conference at West Point in the fall of l964, ”It was decided very early that Goulart was unacceptable....and would have to go.”

Ball and Johnson
A newly-declassified audio tape, recorded by the White House taping system on March 31, 1964, just as the coup was just beginning to unfold, shows President Lyndon Johnson personally involved in reviewing US support for the coup, and monitoring the latest developments. In a phone conversation with Undersecretary of State George Ball, who was coordinating US activities, Johnson expressed support for aggressive action: "I think we ought to take every step that we can, be prepared to do everything that we need to do, just as we were in Panama if that is at all feasible. I’d put everybody who had any imagination or ingenuity in (Ambassador) Gordon’s outfit or (CIA Director) McCone’s or yours or (Secretary of Defense) McNamara’s. We just can’t take this one, and I’d get right on top of it and stick my neck out a little.” US Undersecretary of State George Ball: That’s our own feeling about it, and we’ve gotten it well organized.”
The April 1, 1964, coup that followed -- ”the worst April Fool's joke ever” -- was led by General Humberto de Alencar Castello Branco, commander of the Fourth Army in Recife. During World War II, he had served with Brazil’s Expeditionary Force, which fought with the Allies in Italy. His “trench buddy” there was Colonel Vernon A. Walters, the U.S. “military attaché” from September 20, l962 to l967, who would later be promoted to Lt. General for his accomplishments in Brazil, and then move on to serve as senior CIA officer, the CIA’s Deputy Director from March 1972 to 1976, and Ronald Reagan’s UN Ambassador in the 1980s. Colonel Walters spoke fluent Portuguese and also very close to General Emílio Garrastazu Médici, head of Brazil’s Black Eagles military school during the 1964 coup, then military attaché to Washington (64-65), head of Brazil’s CIA, the “Serviço Nacional de Informaçoes (SNI)” from 1967 to 1969, and then Brazil’s President, courtesy of the junta.
Castello Branco
During the coup, Castello kept both General Walters and U.S. Ambassador Lincoln Gordon “very well-informed of pre-coup deliberations,” a US Navy “fast” Carrier Task Group was standing by offshore, and six US Air Force C-135 transport plants with 110 tons of arms and ammunition were standing by, in case there was any resistance. Fortunately, the coup was almost bloodless, although there would be many disappearances, deaths, and cases of political torture during the 21 years that followed.
Castello Branco was supposed to step down after a short period of housecleaning, but Brazil’s military proved to be a better master than a maid -- it stayed in power from l964 to l985. At first, Castello turned the economy over to Octavio Bulhões, an academic-cum-Finance Minister, and Roberto Campos, a U.S.-educated ex-Jesuit and former head of Brazil’s powerful National Development Bank (BNDES), who became Planning Minister. Their reign from April l964 to March l967 was the first in a series of rather disappointing Latin American experiments with monetarism, the notion that controlling the money supply was the sine qua non of economic policy. To fight inflation, they reigned in credit, slashed spending (which they viewed as driving money growth, because the government was financing by selling bonds to the banking system) , and opened the door to imports. They also eased restrictions on foreign investment, eliminated taxes on foreign profits, and outlawed strikes. Dozens of labor leaders were jailed, and wages were frozen, although inflation was still raging at forty percent a year. But the regime was careful to protect investors against inflation by indexing bonds and bank deposits. A new capital markets law also created Brazil’s first investment banks and provided “the most sophisticated company law in Latin America.” In l965, in an attempt to control the money supply, Campos also created Brazil’s first Central Bank and a National Monetary Authority.
All these conservative measures went down rather well with bankers and the U.S. government. Regardless of who staged the coup, it soon became quite clear who would pay for it. From l964 to l970, Brazil got more than $2 billion of U.S. aid, which made it the third largest aid recipient in the world. About $900 million of this arrived in the first six months after the coup -- in l964, after the coup, the U.S. Treasury paid seventy percent of the interest due on Brazil's debt. In July 1964, Brazil also signed another IMF agreement, and in the next three years it got $214 million of IMF loans, which had been zero from l959 to l964. Brazil also suddenly became the World Bank’s largest customer, after getting no loans at all from 1950 to l965, as well as the largest borrower the IDB and from our old friends, the US EX-IM Bank. From l964 to 1970, direct investment by American companies increased fifty percent. In January l967, the IMF held its 22nd convention in Rio, presided over by General Artur Costa e Silva, a former War Minister and Castello Branco's successor.
Unfortunately for the majority of Brazilians living in poverty, most of this aid went to pay for budget deficits, planning exercises, and capital-intensive projects -- original Alliance for Progress objectives like “eliminating illiteracy from Latin America by l970” and “income redistribution” got short shrift. The real value of the minimum wage dropped by one-fourth from l964 to l967, and malnutrition and infant mortality rose dramatically. Domestic industry was hit by foreign competition and a recession at once, even as multinationals were getting cheap finance and lower taxes. Many foreign investors also got ”sweetheart” deals -- Campos was especially generous to Amforp, an American-owned utility, and in l965 the American billionaire Donald Ludwig was allowed to buy an Amazon forest tract twenty percent larger than Connecticut for $3 million. General Artur Golbery Couto e Silva, the military’s “gray eminence,” later became President of Dow Chemical do Brasil and a representative of Dow’s Banco Cidade. A top professor at the Escola Superior de Guerra, Brazil’s version of the National War College, and the author of the seminal Geopolitica do Brasil, in the early 1960s Golbery had used CIA funding to launch the Institute for Research and Social Studies (Instituto de Pesquisas e Estudos Sociais--IPES), the SNI’s precursor. Over the next two decades, the SNI would employ more than 50,000 people to spy on and otherwise deal with “subversives” at home and abroad. Golbery later served as head of the Casa Civil, a key aid to President Ernesto Geisel. Not surprisingly, along the way, Dow Chemical got special permission for a new plant in Bahia.
Soon, even nationalist critics started attacking Roberto Campos' program as a ”pastoral plan” designed by Americans to eliminate domestic industry -- he became widely known as ”Bob Fields,” “a full-time entreguista.” In l964, a popular Rio bumper sticker said, “Enough of intermediaries! -- (U.S. Ambassador) Lincoln Gordon for President!” In l966, the U.S. Ambassador complained that American advisors were implicated in ”almost every unpopular decision concerning taxes, salaries and prices.”
In October 1965, in the last free elections until l982, the military’s candidates for state governorships in Rio de Janeiro and Minas Gerais were defeated. Workers, students, and church organizers turned radical, and several civilian leaders who had supported the coup, including Magalhães Pinto and Carlos Lacerda, also pressed for new elections. There was a sharp increase in capital flight -- in 1966 Brazilians sent more money abroad than all the new foreign investment and foreign aid brought in. The nationalists in the military also began to treat the “internationalist” segments of the upper classes harshly -- they unleashed a spy operation to catch wealthy Brazilians who had foreign accounts. In November 1966 the police, assisted by Brazil’s intelligence service, the SNI, under the command of General Fiuza de Castro, raided the offices of Bernie Cornfeld's Swiss-based I.O.S. flight capital operation in seven cities, arrested 13 salesmen, and seized files on 10,000 clients.
All this set the stage for a hard-line backlash, led by members of the military who believed that the castellistas were selling out to foreigners and were not tough enough on subversivos. In late l966, Castello Branco gave way to the IMF’s favorite, General Costa e Silva. Political parties were consolidated into a ”majority” party, ARENA, and an official ”opposition” party, the PMB -- as they soon came to be known in the underground, the parties of ”yes” and ”yes sir.” Many opposition politicians, union leaders, and students were stripped of their civil rights. In December 1968, when a federal deputy asked Brazilian women to stop having sex with military officers until political repression ceased, the Army demanded that Congress lift the fellow’s immunity so he could be prosecuted for “insulting the Armed Forces.” When the Congress refused, Costa e Silva closed it, disbanded state assemblies and city councils, suspended habeas corpus, and imposed press censorship. Dictatorial niceties like arrests without warrant and torture now became common, while elections were reduced to ratifications of the military’s “bionic” candidates.
As for Roberto Campos, in March l967 he moved over to the private sector, giving way to a more dirigiste economic team. He never again exercised much power, although he served as Ambassador to England in the mid-1970s. His l982 diary reads like a “Who’s Who” of prominent Brazilians and Americans. Tony Gebauer was one of the friends listed there. But unlike some of his successors, apparently Roberto Campos didn’t do his private banking at Morgan -- the diary lists accounts at Geneva’s Pictet et Cie and Trade Development Bank, whose founder, Edmond Safra, also founded Republic Bank of New York and Safra Bank, and was an old Campos acquaintance.
So by 1967, Brazil was thus well on its way to becoming a marshal law state. With the support and guidance of the US government, a left-leaning, if democratically-elected, government had been vanquished, and a right-wing dictatorship put in its place. Especially after 1968, until the mid 1970s, the level of repression increased, and the number of political opponents who were murdered or “disappeared” reached into the low thousands. This was modest, compared with what went on in Argentina, Chile, and Paraguay, , but Brazil made up for the body count by sharing its early experiences with these countries. (See below.)
DICTATORSHIP OF THE IMAGINATION
While Brazil’s military deserved much of the credit for this new system, the US national security apparatus also played a key role. One of its crucial long-term influences was a variation on the “Mighty Wurlitzer” concept that it had pioneered with great success in France, Italy, Germany, and Japan in the 1940s and 1950s, and continues to use right up to the present in places like post-Soviet Eastern Europe, Southeast Asia, Lebanon, Pakistan, Iraq, and the Philippines.
This was to develop a nation-wide media network that could be used to shape public opinion. In 1964, an energetic, personable young Time-Life executive named Joe Wallach went to work with Roberto Marinho, a Brazilian businessman who at that point was running a newspaper and a local TV station in Rio. Wallach, didn’t speak any Portuguese at the time, but he had a background in TV production and accounting in California. Suddenly he became O Globo’s Executive Director. “Time-Life” also invested $4 million -$6 million in a joint venture with Globo, a great deal of money for that time, which helped Globo buy up concessions and steal a march on its competitors. “Time-Life” and its friends also encouraged multinationals to direct advertising to Globo, which soon came to run a kind of advertising cartel. Meanwhile, Globo also was careful to take a pro-government line in its reporting – cynics came to refer to it as “The Ministry of Information.”
All this, plus the special licenses for satellite broadcasting, radio, and local stations that it received again and again from the government, made Globo prosper. Over the next twenty-five years, under Wallach’s leadership, TV Globo became the world’s fourth largest TV network. The deal was rather simple – Globo provided favorable coverage to its political allies, and they helped it get the TV, satellite broadcasting, radio, and cable concessions that it needed to keep growing. In special cases, the politicians and their families also shared in the ownership of these “goodies,” as we’ll see below.
Over the next three decades, Globo became one of the most politically-influential media empires in the developing world – by 1990 it owned 78 stations in Brazil, with more than 50 million viewers in Brazil alone, ad revenue of $600 million a year, 8,000 employees, more than 30 subsidiaries in Italy, Portugal, Cuba, Japan, and other countries, and it was producing and exporting TV programming to 112 countries. Furthermore, even after Brazil returned to democracy in 1985, Globo continued to exert strong influence over political selection of many key political leaders, including several Presidents. All along, it was a consistent opponent of candidates that it perceived as threats to the system, often using blatant propaganda to influence elections, as in the hard-fought 1989 Presidential race between Lula and Fernando Collor.
Only in 2001-2002, long after Wallach had retired and Roberto Marinho had passed the empire on to his evidently less-able sons, would Globo’s disappointments in Internet and cable investments and crushing foreign debts finally bring it down to earth – not unlike the similar fate that befell its original partners at “Time-Life,” now part of the hapless AOL Time Warner conglomerate. The Marinho family’s estimated wealth on the Forbes’ annual billionaire survey peaked at $6.4 billion in 2000, with the Internet’s peak. By 2002 they were down to their last $1 billion, barely eligible for a mention on the Forbes list.
Even then, however, Globo still would try to use its political influence as currency. In the 2002 Presidential race, in a move that must have made its original partners turn circles in their graves, Globo for the first time threw its support to Lula, the left-wing candidate, who ended up finally winning on this fourth try for office. Evidently, having backed the “system” that, as we’ll soon see, ultimately made Brazil the world’s largest debtor, Globo was hoping for some government relief from its own crushing foreign debts.
BANKING ON THE STATE
In any case, in addition to military action and media support, the top-down development strategy adopted by Brazil’s military and its foreign allies in the 1960s also had a crucial economic component. At first glance – and indeed, at second – this strategy was a little hard to reconcile with free-market principles and democratic rule. But it cleared the way for bankers like Tony to earn huge fortunes. As Auden says, “When there was peace, he was for peace. When there was war, he went.” These bankers joined forces with a corrupt coalition of officials, industrialists, and agro-exporters to support a new debt-intensive strategy that was designed and implemented by a powerful new Minister also named Antonio, who became one of JPMorgan's Tony Gebauer’s closest friends of all.
Antonio Delfim Neto was an extremely fat academic-cum-bureaucrat from a middle-class Italian family in São Paulo. In the l950s, he wrote a brilliant Ph.D. dissertation on the coffee industry and taught macroeconomics at the University of São Paulo (U.S.P.). In the l960s he was a consultant to Ralph Rosenberg, whose Ultra Group was the largest private investor in Petrobras, as well as Antonio Carlos de Almeida Braga, the owner of Bradesco, Brazil's largest bank, and Pedro Conde, another bank owner. From 1963 to l967, Delfim, in his late thirties, advised São Paulo governors Carvalho Pinto and Lauro Natel, who was on leave from Bradesco. Then, from l967 to 1985, Delfim came to wield more influence over the economy than anyone before or since.
He was as quick-witted as Campos, but most of his success was due to a lack of ideology. As Delfim said in l969, “I am not going to sacrifice development only to pass into history as someone who defeated inflation at any cost.” He was the grand master of bureaucratic infighting, inserting his “Delfim boys,” mostly U.S.P.-trained economists, into key positions all over the government, where they operated a kind of Florentine patronage system, keeping a running tally of favors owed to important people. “I was in the office of (an important banker) when Delfim called. He needed $5 million right away,” one banker recalled. “The only argument was how to get it to him. We knew he'd make it up to us.” In a country where most ministers rotated quickly, this network of favors and influence earned Delfim unusual longetivity. He was Finance Minister in l969-74, Ambassador to France in l974-78, Minister of Agriculture in l979, Planning Minister in l979-85, and even after civilian rule returned in l985, an important behind-the-scenes leader in Congress, where he also enjoyed immunity from prosecution. Among those responsible for Brazil's massive debt burden in the 1980s, only Tony Gebauer enjoyed similar continuity.
In August 1969, General Costa e Silva died of a stroke, after learning that his wife had helped deliver Brasilia’s telephone exchange contract to Ericsson, a Swedish company that bribed its way all over Latin America. Vernon Walter’s friend, the even-more hawkish General Emilio Medici (1969-74), then took over, and some of Delfim’s critics seized the opportunity to accuse Delfim of corruption. But he was so popular with all his other “clients” that Delfim was soon reappointed. He promised Medici, echoing the grandiose Kubitschek in the 1950s, “Give me a year and I will give you a decade.”
Meanwhile, from a national security standpoint, Medici was exactly what Brazil’s US allies were looking for – he visited Nixon, Henry Kissinger, and General Walters in December 1971. In the meeting just two weeks later with Secretary of State William Rogers, recorded in a transcript only just released by the National Archives in 2002, Nixon described Medici in glowing terms:
- Rogers: “Yeah, I think this Médici thing is a good idea. I had a very good time with him at lunch and he…”
- Nixon: “He’s quite a fellow, isn’t he?”
- Rogers: “He is. God, I’m glad he’s on our side.”
- Nixon: “Strong and, uh, you know…(laughs)…you know, I wish he were running the whole continent.”
- Rogers: “I do, too. We got to help Bolivia. He’s concerned about that. We got to be sure to…”
- Nixon: “Incidentally, the Uruguayan thing, apparently he helped a bit there…”
The “Uruguayan thing” was clarified in another transcript, recently released, of a Nixon conversation with Britain’s Prime Minister Edward Heath that same month. According to Nixon, “The Brazilians helped rig the Uruguayan election…Our position is supported by Brazil, which is after all the key to the future. ”(emphasis added.) He was referring to the November 28, 1971, elections, in which Uruguay’s Frente Amplio, a coalition of left-leaning political parties not unlike Allende’s Unidad Popular in Chile, had been defeated by the right-wing Colorado Party. The result was indeed unexpected, and evidently Medici had had a key role in it.
In March, 1972, the Colorado’s new right-wing President Bordaberry, gave Uruguay’s security forces a green light to go not only after the Tupamaros, Uruguay’s urban guerillas, but also against its labor unions, student associations, and political opponents. In June 1973 the military made Bordaberry a puppet, and in 1976 took complete power, following in Brazil’s footsteps. The result was a bloodbath that anticipated the thousands of political murders that later occurred in Chile, after Allende’s demise in September 1973, and in Argentina after its military seized power in 1976. By then, Uruguay, a country with just 3 million people that had once been known as “the Switzerland of Latin America,” had become its torture chamber, with more political prisoners per capita than any other country in the world. Like Brazil, once gone, civilian government did not return to Uruguay until 1985.
According to other newly-released documents, General Medici had also assisted with the right-wing in Bolivia in August 1971. More generally, it has recently become clear that Brazil’s military, with US support and coordination from the US, played a key role in training and guiding the repression that went on in Chile, Argentina, Paraguay, and Bolivia in the late 1960s and 1970s. As one scholar noted, “Brazil had a head-start on terror.” Even prominent journalists, like Waldimoro Herzog, who was murdered by the Brazilian regime in 1975, were not safe.
Indeed, one of the victims may even have been former President João “Jango” Goulart himself, who died in 1976 of a curious “heart attack” at the age of 58, at his ranch in Parana. Goulart’s family had long suspected that he’d been murdered by the military. In 2000, Brazil’s Congress finally got around to starting an official investigation of the death. Of course Brazilian Presidents have a history of unfortunate endings – Juscelino Kubitschek, Quadros’ predecessor, also died in 1976, in a car accident, and Tancredo Neves, the first civilian President after military rule ended in 1985, died after three months in office.
In any case, whether or not the “domino theory” really ever applied to Communist revolutions, clearly it worked quite well with respect to these Latin American right-wing regimes. And their US patrons discovered that with only a little nudge, one big domino – “the key to the future” – could wield extraordinary influence.
1 The above is an excerpt from James S. Henry, The Blood Bankers. Tales from the Global Underground Economy. (New York: Four Walls, Eight Windows, December 2003, 417 pp.)
April 1, 2004 at 02:30 AM | Permalink | Comments (2) | TrackBack
Thursday, March 04, 2004
Regime Change Comes to Haiti - Part I: --- Criminal Contras and The Offers That You Can't Refuse

- The first time that Aristide was elected in December 1990, he won the country’s first free Presidential elections in history with 67.5 percent of the vote. The runner-up, who was supported by the US, was former World Bank Vice President and Duvalier finance minister Marc Bazin. He got 14.2 percent. Aristide only served 7 months of his first five-year term before the 1991 coup. When he was finally restored to power by the Clinton Administration in September 1994, not only were all the brutes in the Haitian military given amnesty, but he was only permitted to serve another 16 months before being sidelined for five more years.
- The second time, in November 2000, Aristide was elected President with an even greater majority. True, turnout in that Presidential election was just 15-20 percent. Facing certain defeat, without a compelling candidate of its own, Haiti’s opposition cynically boycotted the contest entirely, citing irregularities in the May 2000 parliamentary election.
- There were many irregularities in that parliamentary election, and, in retrospect, Aristide should have made amends sooner. But no one believes that would have changed the outcome of the Presidential election. There are also grave doubts that the US, the World Bank, and the IDB should have held up more than $500 million of aid to Haiti's people, because of these irregularities. But Aristide's long-standing foes in Washington and the EU leaped at these electoral infractions as an excuse for cutting off most foreign aid. (For the interested reader, the election irregularities are discussed here, here, and here.) Curiously, the OAS standards for that election were evidently altered after the May 2000 race was run. Suffice it to say that by OAS standards, Florida’s balloting in 2000 -- which did determine a Presidential election -- was even more “fundamentally flawed.”





March 4, 2004 at 04:40 AM | Permalink | Comments (1) | TrackBack