Archive for October 20th, 2011
As The U.S. We Need To Pick Our Friends More Carefully: Not covering all but a few below dead or in jail for life; I’m just saying.
1. Manuel Noriega Panama
Before Saddam Hussein there was Manuel Noriega. Like Saddam, Noriega enjoyed US support until he turned into a wayward ally, then an embarrassment, and finally an “imminent danger” who had to be overthrown.
Noriega was recruited as a CIA informant while studying at a military academy in Peru. He received intelligence and counterintelligence training at the School of the Americas at Fort Gulick, Panama, in 1967, as well as a course in psychological operations at Fort Bragg, North Carolina. He was to remain on the CIA payroll until February 1988.
After a military coup in 1968, Noriega quickly rose through the ranks and became head of Panama’s military intelligence and a key figure under General Omar Torrijos, the military ruler who signed a treaty with the US to restore the Panama canal zone to Panamanian sovereignty in 1977.
After Torrijos’s death in a mysterious plane crash in 1981, Noriega consolidated his power, becoming Panama’s de facto ruler, promoting himself to full general in 1983.
Noriega made himself valuable to the US during the Contra wars when he allowed the US to set up listening posts in Panama and by helping the US campaign against the leftist Sandinista regime in Nicaragua. Noriega allowed Panama to be used as a conduit for US money and weapons for the Contras as then US president Ronald Reagan sought to undermine the Sandinistas. But Noriega’s increasing brutality turned him into a liability, especially after the assassination of Hugo Spadafora, a political opponent who was found beheaded in 1985.
By the late 1980s, the US turned against Noriega. The 1988 Senate subcommittee on terrorism, narcotics and international operations concluded that “the saga of Panama’s General Manuel Antonio Noriega represents one of the most serious foreign policy failures for the United States. Throughout the 1970s and the 1980s, Noriega was able to manipulate US policy towards his country, while skilfully accumulating near-absolute power in Panama.
“It is clear that each US government agency which had a relationship with Noriega turned a blind eye to his corruption and drug dealing, even as he was emerging as a key player on behalf of the Medellín Cartel [a member of which was the notorious Colombian drug lord Pablo Escobar].”
Noriega was indicted by two US federal grand juries in Florida on charges of drug trafficking and racketeering and the CIA took him off its payroll. The next year, Noriega’s image as a thuggish dictator was reinforced in the starkest terms as opposition candidates in the presidential election were stopped and beaten up by Noriega’s “dignity battalions”
2. Saddam Hussien Iraq
The U.S. was officially neutral regarding the Iran-Iraq war, and claimed that it armed neither side. Iran depended on U.S.-origin weapons, however, and sought them from Israel, Europe, Asia, and South America. Iraq started the war with a large Soviet-supplied arsenal, but needed additional weaponry as the conflict wore on.
The U.S. restored formal relations with Iraq in November 1984, but the U.S. had begun, several years earlier, to provide it with intelligence and military support (in secret and contrary to this country’s official neutrality) in accordance with policy directives from President Ronald Reagan. These were prepared pursuant to his March 1982 National Security Study Memorandum (NSSM 4-82) asking for a review of U.S. policy toward the Middle East.
The U.S., which followed developments in the Iran-Iraq war with extraordinary intensity, had intelligence confirming Iran’s accusations, and describing Iraq’s “almost daily” use of chemical weapons, concurrent with its policy review and decision to support Iraq in the war [Document 24]. The intelligence indicated that Iraq used chemical weapons against Iranian forces, and, according to a November 1983 memo, against “Kurdish insurgents” as well [Document 25].
What was the Reagan administration’s response? A State Department account indicates that the administration had decided to limit its “efforts against the Iraqi CW program to close monitoring because of our strict neutrality in the Gulf war, the sensitivity of sources, and the low probability of achieving desired results.” But the department noted in late November 1983 that “with the essential assistance of foreign firms, Iraq ha[d] become able to deploy and use CW and probably has built up large reserves of CW for further use. Given its desperation to end the war, Iraq may again use lethal or incapacitating CW, particularly if Iran threatens to break through Iraqi lines in a large-scale attack” [Document 25]. The State Department argued that the U.S. needed to respond in some way to maintain the credibility of its official opposition to chemical warfare, and recommended that the National Security Council discuss the issue.
Following further high-level policy review, Ronald Reagan issued National Security Decision Directive (NSDD) 114, dated November 26, 1983, concerned specifically with U.S. policy toward the Iran-Iraq war. The directive reflects the administration’s priorities: it calls for heightened regional military cooperation to defend oil facilities, and measures to improve U.S. military capabilities in the Persian Gulf, and directs the secretaries of state and defense and the chairman of the Joint Chiefs of Staff to take appropriate measures to respond to tensions in the area. It states, “Because of the real and psychological impact of a curtailment in the flow of oil from the Persian Gulf on the international economic system, we must assure our readiness to deal promptly with actions aimed at disrupting that traffic.” It does not mention chemical weapons [Document 26].
Soon thereafter, Donald Rumsfeld (who had served in various positions in the Nixon and Ford administrations, including as President Ford’s defense secretary, and at this time headed the multinational pharmaceutical company G.D. Searle & Co.) was dispatched to the Middle East as a presidential envoy. His December 1983 tour of regional capitals included Baghdad, where he was to establish “direct contact between an envoy of President Reagan and President Saddam Hussein,” while emphasizing “his close relationship” with the president [Document 28]. Rumsfeld met with Saddam, and the two discussed regional issues of mutual interest, shared enmity toward Iran and Syria, and the U.S.’s efforts to find alternative routes to transport Iraq’s oil; its facilities in the Persian Gulf had been shut down by Iran, and Iran’s ally, Syria, had cut off a pipeline that transported Iraqi oil through its territory. Rumsfeld made no reference to chemical weapons, according to detailed notes on the meeting [Document 31].
Rumsfeld also met with Iraqi Foreign Minister Tariq Aziz, and the two agreed, “the U.S. and Iraq shared many common interests.” Rumsfeld affirmed the Reagan administration’s “willingness to do more” regarding the Iran-Iraq war, but “made clear that our efforts to assist were inhibited by certain things that made it difficult for us, citing the use of chemical weapons, possible escalation in the Gulf, and human rights.” He then moved on to other U.S. concerns [Document 32]. Later, Rumsfeld was assured by the U.S. interests section that Iraq’s leadership had been “extremely pleased” with the visit, and that “Tariq Aziz had gone out of his way to praise Rumsfeld as a person” [Document 36 and Document 37].
Rumsfeld returned to Baghdad in late March 1984. By this time, the U.S. had publicly condemned Iraq’s chemical weapons use, stating, “The United States has concluded that the available evidence substantiates Iran’s charges that Iraq used chemical weapons” [Document 47]. Briefings for Rumsfeld’s meetings noted that atmospherics in Iraq had deteriorated since his December visit because of Iraqi military reverses and because “bilateral relations were sharply set back by our March 5 condemnation of Iraq for CW use, despite our repeated warnings that this issue would emerge sooner or later” [Document 48]. Rumsfeld was to discuss with Iraqi officials the Reagan administration’s hope that it could obtain Export-Import Bank credits for Iraq, the Aqaba pipeline, and its vigorous efforts to cut off arms exports to Iran. According to an affidavit prepared by one of Rumsfeld’s companions during his Mideast travels, former NSC staff member Howard Teicher, Rumsfeld also conveyed to Iraq an offer from Israel to provide assistance, which was rejected [Document 61].
During the spring of 1984 the U.S. reconsidered policy for the sale of dual-use equipment to Iraq’s nuclear program, and its “preliminary results favor[ed] expanding such trade to include Iraqi nuclear entities” [Document 57]. Several months later, a Defense Intelligence Agency analysis said that even after the war ended, Iraq was likely to “continue to develop its formidable conventional and chemical capability, and probably pursue nuclear weapons” [Document 58]. (Iraq is situated in a dangerous neighborhood, and Israel had stockpiled a large nuclear weapons arsenal without international censure. Nuclear nonproliferation was not a high priority of the Reagan administration – throughout the 1980s it downplayed Pakistan’s nuclear program, though its intelligence indicated that a weapons capability was being pursued, in order to avert congressionally mandated sanctions. Sanctions would have impeded the administration’s massive military assistance to Pakistan provided in return for its support of the mujahideen fighting the Soviet occupation of Afghanistan.)
In February 1984, Iraq’s military, expecting a major Iranian attack, issued a warning that “the invaders should know that for every harmful insect there is an insecticide capable of annihilating it whatever the number and Iraq possesses this annihilation insecticide” [Document 41]. On March 3, the State Department intervened to prevent a U.S. company from shipping 22,000 pounds of phosphorous fluoride, a chemical weapons precursor, to Iraq. Washington instructed the U.S. interests section to protest to the Iraqi government, and to inform the Ministry of Foreign Affairs that “we anticipate making a public condemnation of Iraqi use of chemical weapons in the near future,” and that “we are adamantly opposed to Iraq’s attempting to acquire the raw materials, equipment, or expertise to manufacture chemical weapons from the United States. When we become aware of attempts to do so, we will act to prevent their export to Iraq” [Document 42].
Later in the month, the State Department briefed the press on its decision to strengthen controls on the export of chemical weapons precursors to Iran and Iraq, in response to intelligence and media reports that precursors supplied to Iraq originated in Western countries. When asked whether the U.S.’s conclusion that Iraq had used chemical weapons would have “any effect on U.S. recent initiatives to expand commercial relationships with Iraq across a broad range, and also a willingness to open diplomatic relations,” the department’s spokesperson said “No. I’m not aware of any change in our position. We’re interested in being involved in a closer dialogue with Iraq” [Document 52].
Iran had submitted a draft resolution asking the U.N. to condemn Iraq’s chemical weapons use. The U.S. delegate to the U.N. was instructed to lobby friendly delegations in order to obtain a general motion of “no decision” on the resolution. If this was not achievable, the U.S. delegate was to abstain on the issue. Iraq’s ambassador met with the U.S. ambassador to the U.N., Jeane Kirkpatrick, and asked for “restraint” in responding to the issue – as did the representatives of both France and Britain.
Iraqi interests section head Nizar Hamdoon met with Deputy Assistant Secretary of State James Placke on March 29. Hamdoon said that Iraq strongly preferred a Security Council presidential statement to a resolution, and wanted the response to refer to former resolutions on the war, progress toward ending the conflict, but to not identify any specific country as responsible for chemical weapons use. Placke said the U.S. could accept Iraqi proposals if the Security Council went along. He asked for the Iraqi government’s help “in avoiding . . . embarrassing situation[s]” but also noted that the U.S. did “not want this issue to dominate our bilateral relationship” [Document 54].
On March 30, 1984, the Security Council issued a presidential statement condemning the use of chemical weapons, without naming Iraq as the offending party. A State Department memo circulating the draft text observed that, “The statement, by the way contains all three elements Hamdoon wanted” [Document 51].
On April 5, 1984, Ronald Reagan issued another presidential directive (NSDD 139), emphasizing the U.S. objective of ensuring access to military facilities in the Gulf region, and instructing the director of central intelligence and the secretary of defense to upgrade U.S. intelligence gathering capabilities. It codified U.S. determination to develop plans “to avert an Iraqi collapse.” Reagan’s directive said that U.S. policy required “unambiguous” condemnation of chemical warfare (without naming Iraq), while including the caveat that the U.S. should “place equal stress on the urgent need to dissuade Iran from continuing the ruthless and inhumane tactics which have characterized recent offensives.” The directive does not suggest that “condemning” chemical warfare required any hesitation about or modification of U.S. support for Iraq [Document 53].
A State Department background paper dated November 16, 1984 said that Iraq had stopped using chemical weapons after a November 1983 demarche from the U.S., but had resumed their use in February 1984. On November 26, 1984, Iraq and the U.S. restored diplomatic relations. Deputy Prime Minister Tariq Aziz, in Washington for the formal resumption of ties, met with Secretary of State George Shultz. When their discussion turned to the Iran-Iraq war, Aziz said that his country was satisfied that “the U.S. analysis of the war’s threat to regional stability is ‘in agreement in principle’ with Iraq’s,” and expressed thanks for U.S. efforts to cut off international arms sales to Iran. He said that “Iraq’s superiority in weaponry” assured Iraq’s defense. Shultz, with presumed sardonic intent, “remarked that superior intelligence must also be an important factor in Iraq’s defense;” Tariq Aziz had to agree [Document 60].
3. Muammar Gadhafi Libya
The United States supported the UN resolution providing for Libyan independence in 1951 and raised the status of its office at Tripoli from a consulate general to a legation. Libya opened a legation in Washington, D.C., in 1954. Both countries subsequently raised their missions to embassy level.
After Gadhafi’s 1969 coup, U.S.-Libyan relations became increasingly strained because of Libya’s foreign policies supporting international terrorism and subversion against moderate Arab and African governments. In 1972, the United States recalled its ambassador. Export controls on military and civil aircraft were imposed during the 1970s, and U.S. embassy staff members were withdrawn from Tripoli after a mob attacked and set fire to the embassy in December 1979. The U.S. Government designated Libya a “state sponsor of terrorism” on December 29, 1979.
Gulf of Sidra incident
On August 19, 1981, the Gulf of Sidra incident occurred. Two Libyan Sukhoi Su-22 jets fired on U.S. aircraft participating in a routine naval exercise over international waters of the Mediterranean claimed by Libya. The U.S. planes returned fire and shot down the attacking Libyan aircraft. In December 1981, the State Department invalidated U.S. passports for travel to Libya and, for purposes of safety, advised all U.S. citizens in Libya to leave. In March 1982, the U.S. Government prohibited imports of Libyan crude oil into the United States and expanded the controls on U.S.-origin goods intended for export to Libya. Licenses were required for all transactions, except food and medicine. In March 1984, U.S. export controls were expanded to prohibit future exports to the Ras Lanuf petrochemical complex. In April 1985, all Export-Import Bank financing was prohibited.
Due to Libya’s continuing support for terrorism, the United States adopted additional economic sanctions against Libya in January 1986, including a total ban on direct import and export trade, commercial contracts, and travel-related activities. In addition, Libyan Government assets in the United States were frozen. When evidence of Libyan complicity was discovered in the 1986 Berlin discotheque bombing, which killed two American servicemen, the United States responded by launching an aerial bombing attack against targets near Tripoli and Benghazi in April 1986 (see Operation El Dorado Canyon). At least 15 people died in the U.S. air strikes on Libya – including leader Colonel Gaddafi’s adopted 15-month old daughter – and more than 100 were injured. Subsequently, the United States maintained its trade and travel embargoes and brought diplomatic and economic pressure to bear against Libya. This pressure helped to bring about the Lockerbie settlement and Libya’s renunciation of WMD and MTCR-class missiles.
In 1991, two Libyan intelligence agents were indicted by federal prosecutors in the U.S. and Scotland for their involvement in the December 1988 bombing of Pan Am flight 103. In January 1992, the UN Security Council approved Resolution 731 demanding that Libya surrender the suspects, cooperate with the Pan Am 103 and UTA 772 investigations, pay compensation to the victims’ families, and cease all support for terrorism. Libya’s refusal to comply led to the approval of UNSC Resolution 748 on March 31, 1992, imposing sanctions designed to bring about Libyan compliance. Continued Libyan defiance led to passage of Security Council Resolution 883–a limited assets freeze and an embargo on selected oil equipment—in November 1993. UN sanctions were lifted on September 12, 2003, after Libya fulfilled all remaining UNSCR requirements, including renunciation of terrorism, acceptance of responsibility for the actions of its officials, and payment of appropriate compensation to the victims’ families. Cooperation
On December 19, 2003, Libya announced its intention to rid itself of WMD and MTCR-class missile programs. Since that time, it has cooperated with the U.S., the U.K., the International Atomic Energy Agency, and the Organization for the Prohibition of Chemical Weapons toward these objectives. Libya has also signed the IAEA Additional Protocol and has become a State Party to the Chemical Weapons Convention.
In recognition of these actions, the U.S. began the process of normalizing relations with Libya. The U.S. terminated the applicability of the Iran and Libya Sanctions Act to Libya and the President signed an Executive Order on September 20, 2004 terminating the national emergency with respect to Libya and ending IEEPA-based economic sanctions. This action had the effect of unblocking assets blocked under the Executive Order sanctions. Restrictions on cargo aviation and third-party code-sharing have been lifted, as have restrictions on passenger aviation. Certain export controls remain in place.
U.S. diplomatic personnel reopened the U.S. Interest Section in Tripoli on February 8, 2004. The mission was upgraded to a U.S. Liaison Office on June 28, 2004, and to a full embassy on May 31, 2006. The establishment in 2005 of an American School in Tripoli demonstrates the increased presence of Americans in Libya, and the continuing normalization of bilateral relations. Libya re-established its diplomatic presence in Washington with the opening of an Interest Section on July 8, 2004, which was subsequently upgraded to a Liaison Office in December 2004 and to a full embassy on May 31, 2006.
On May 15, 2006, the US State Department announced its intention to rescind Libya’s designation as a state sponsor of terrorism in recognition of the fact that Libya had met the statutory requirements for such a move: it had not provided any support for acts of international terrorism in the preceding six-month period, and had provided assurances that it would not do so in the future. On June 30, 2006, the U.S. rescinded Libya’s designation as a state sponsor of terrorism. In July 2007, Mr. Gene Cretz was nominated by President Bush as ambassador to Libya. The Foreign Relations Committee of the U.S. Senate held Cretz’s confirmation hearing on Wednesday, September 25, 2008. The Libyan government satisfied its responsibility and paid the remaining amount of money it owed (total of $1.5 billion) to the victims of several acts of terrorism on Friday, October 31, 2008.
Principal U.S. Officials included Chargé d’Affaires William Milam and Deputy Principal Officer John Christopher Stevens.
The U.S. Embassy in Libya is temporarily located at the Corinthia Bab Africa Hotel, Souk al-Thulatha, Al-Gadim, Tripoli. The U.S. consular representative’s office is also located at the in the Corinthia Bab Africa Hotel. Limited services are available for U.S. citizens.
In response to the 2011 Libyan civil war, the U.S. Government cut ties with the Libyan Government, and enacted sanctions on the Gaddafi regime. White House spokesman Jay Carney noted that the legitimacy of Gaddafi’s regime had been “reduced to zero”.
On March 19, 2011, in accordance with UNSC Resolution 1973 and in response to Libyan refusal to halt attacks on rebels within Libya, the United States along with France and the United Kingdom began attacks on Libyan defensive infrastructure and ground forces.
On July 15, 2011, the United States government announced that it had granted diplomatic recognition to the National Transitional Council as the legitimate Libyan government. It granted accreditation to Ali Aujali as the Libyan Ambassador to the United States on August 15
4. Osama Bin Laden Afghanistan
In 1974, at the age of 17, bin Laden married Najwa Ghanem at Latakia, Syria; they were divorced before September 11, 2001. Bin Laden’s other known wives were Khadijah Sharif (married 1983, divorced 1990s), Khairiah Sabar (married 1985), Siham Sabar (married 1987), and Amal al-Sadah (married 2000). Some sources also list a sixth wife, name unknown, whose marriage to bin Laden was annulled soon after the ceremony. Bin Laden fathered between 20 and 26 children with his wives. Many of bin Laden’s children fled to Iran following the September 11 attacks and as of 2010 Iranian authorities reportedly continue to control their movement.
Bin Laden’s father Mohammed died in 1967 in an airplane crash in Saudi Arabia when his American pilot misjudged a landing.After leaving college in 1979, bin Laden went to Pakistan and joined Abdullah Azzam to take part in the Soviet war in Afghanistan. During Operation Cyclone from 1979 to 1989, the United States provided financial aid and weapons to the mujahideen leaders through Pakistan’s Inter-Services Intelligence (ISI). Bin Laden met and built relations with Hamid Gul, who was a three-star general in the Pakistani army and head of the ISI agency. Although the United States provided the money and weapons, the training of militant groups was entirely done by the Pakistani Armed Forces and the ISI.
By 1984, bin Laden and Azzam established Maktab al-Khidamat, which funneled money, arms and fighters from around the Arab world into Afghanistan. Through al-Khadamat, bin Laden’s inherited family fortune paid for air tickets and accommodation, paid for paperwork with Pakistani authorities and provided other such services for the jihadi fighters. Bin Laden established camps inside Khyber Pakhtunkhwa in Pakistan and used it to train volunteer fighters against the Democratic Republic of Afghanistan. It was during his time in Pakistan that he began wearing camouflage-print jackets and carrying a Russian-made assault rifle.
Bin Laden’s eldest half-brother, Salem bin Laden, the subsequent head of the bin Laden family, was killed in 1988 near San Antonio, Texas, in the United States, when he accidentally flew a plane into power lines.
The FBI described bin Laden as an adult as tall and thin, between 6 ft 4 in and 6 ft 6 in (193–198 cm) in height and weighing about 165 pounds (75 kg). Interviewer Lawrence Wright, on the other hand, described him as quite slender, but not particularly tall. Bin Laden had an olive complexion and was left-handed, usually walking with a cane. He wore a plain white turban and he had stopped wearing the traditional Saudi male headdress. Bin Laden was described as soft-spoken and mild-mannered in demeanor. His parents; the couple had four children, and bin Laden lived in the new household with three half-brothers and one half-sister. The bin Laden family made $5 billion in the construction industry, of which Osama later inherited around $25–30 million.
t is believed that the first bombing attack involving bin Laden was the December 29, 1992, bombing of the Gold Mihor Hotel in Aden in which two people were killed. It was after this bombing that al-Qaeda was reported to have developed its justification for the killing of innocent people. According to a fatwa issued by Mamdouh Mahmud Salim, the killing of someone standing near the enemy is justified because any innocent bystander will find their proper reward in death, going to Jannah (Paradise) if they were good Muslims and to Jahannam (hell) if they were bad or non-believers. The fatwa was issued to al-Qaeda members but not the general public.
In the 1990s bin Laden’s al-Qaeda assisted jihadis financially and sometimes militarily in Algeria, Egypt and Afghanistan. In 1992 or 1993 bin Laden sent an emissary, Qari el-Said, with $40,000 to Algeria to aid the Islamists and urge war rather than negotiation with the government. Their advice was heeded but the war that followed killed 150,000–200,000 Algerians and ended with Islamist surrender to the government.
Bin Laden funded the Luxor massacre of November 17, 1997, which killed 62 civilians, but outraged the Egyptian public. In mid-1997, the Northern Alliance threatened to overrun Jalalabad, causing bin Laden to abandon his Nazim Jihad compound and move his operations to Tarnak Farms in the south.
Another successful attack was carried out in the city of Mazar-e-Sharif in Afghanistan. Bin Laden helped cement his alliance with the Taliban by sending several hundreds of Afghan Arab fighters along to help the Taliban kill between five and six thousand Hazaras overrunning the city.
In February 1998, Osama bin Laden and Ayman al-Zawahiri co-signed a fatwa in the name of the World Islamic Front for Jihad Against Jews and Crusaders which declared the killing of North Americans and their allies an “individual duty for every Muslim” to “liberate the al-Aqsa Mosque (in Jerusalem) and the holy mosque (in Mecca) from their grip”. At the public announcement of the fatwa bin Laden announced that North Americans are “very easy targets”. He told the attending journalists, “You will see the results of this in a very short time.”
In December 1998, the Director of Central Intelligence Counterterrorist Center reported to President Bill Clinton that al-Qaeda was preparing for attacks in the United States of America, including the training of personnel to hijack aircraft. Bin Laden and Al-Zawahiri organized an al-Qaeda congress on June 24, 1998.
The 1998 U.S. Embassy bombings were a series of attacks that occurred on August 7, 1998, in which hundreds of people were killed in simultaneous truck bomb explosions at the United States embassies in the major East African cities of Dar es Salaam, Tanzania and Nairobi, Kenya. The attacks were linked to local members of the Egyptian Islamic Jihad, brought Osama bin Laden and Ayman al-Zawahiri to the attention of the United States public for the first time, and resulted in the U.S. Federal Bureau of Investigation placing bin Laden on its Ten Most Wanted list.
At the end of 2000, Richard Clarke revealed that Islamic militants headed by bin Laden had planned a triple attack on January 3, 2000 which would have included bombings in Jordan of the Radisson SAS Hotel in Amman and tourists at Mount Nebo and a site on the Jordan River, the sinking of the destroyer USS The Sullivans in Yemen, as well as an attack on a target within the United States. The plan was foiled by the arrest of the Jordanian terrorist cell, the sinking of the explosive-filled skiff intended to target the destroyer, and the arrest of Ahmed Ressam.
© 2011, agentleman.
Why Romney Slammed Perry So Hard —By David Corn| Tue Oct. 18, 2011 7:47 PM PDT
At the Republican cluster-smackdown in Las Vegas on Tuesday night, the fists were flying. The evening started with Michele Bachmann and Rick Santorum pouncing on Herman Cain. Then the others piled on in a Cain-bang. This was natural, given that Mr. 999er had vaulted over all the other second-tier candidates into first place in recent polls. They bashed his 999 scheme on various fronts, and, no doubt, Cain, though he took the blows good-naturedly, left with more chinks than when he arrived.
But the most interesting assaults of the night came from Mitt Romney—and they were aimed at Rick Perry. Again and again, he manhandled the Texas governor, who is in single-digits in recent voter surveys. Every time, Perry toke a poke at Romney—on jobs in Massachusetts, on using a gardening firm that hired undocumented immigrants, on whatever—Romney was ready for him and slammed him in response much more effectively.
This showed a few things.
The Perry campaign’s opposition research operation was lame. Perry was not well-prepped. The material it handed Perry was weak. And he bobbled the oppo research he had been fed.
You can’t discount experience and professionalism. Romney was ready to rumble. He had the facts (or semi-facts) at his finger tips when he needed to defend himself or go on the offense. This was a sign he has a top-notched crew behind him and that he has grown into a better debater after campaigning for several years. Practice does work (except, it seems, for Perry, whose debate outings have gotten worse).
Romney is worried about a Perry comeback. I didn’t clock it, but it sure felt as if Romney spent more time with Perry in his sights than Cain. This would suggest that Team Romney considers Cain still the flavor of the nanosecond who will eventually flame out. And if Cain is sucking up the oxygen that would otherwise fuel another anti-Mitt candidate, that’s fine by Romney. In all likelihood, Cain won’t have the money, organization, or staying power to threaten Romney.
Perry, though down and out (and downer and outer after this debate), could still revive—if only because he has the bucks to rebuild. He does have the money to wage a monumental ad campaign against Romney. While you can’t buy a good debate performance or talent for the candidate, you can buy a good ad team and talented strategists. Perry has the resources to inconvenience Romney greatly. And when the voting starts, the anti-Romney support will have to settle somewhere. If Perry is at all viable at that point, Romney will have to worry.
Consequently, Romney aimed to kick the Texan while he was down. He did a pretty good job of it. It demonstrated that the former CEO has a strategy and the ability to execute it—which, so far, cannot be said of Perry.
© 2011, agentleman.
The Political Gloves Were Off as the Republicans Squared Off By Bryian Revoner
After watching what Newt Gingrich described to CNN’s Anderson Cooper as a forum setup to promote a lot of back and forth bickering between a couple of key candidates, my feelings fall right in line with Gingrich, because this entire Republican Western Debate in Las Vegas, Nevada was a tableau of back and forth bickering at its best. But unlike Gingrich, the personal attacks and the bickering made for some great, political moments in my book. In fact, maybe CNN and Anderson Cooper are much smarter than Gingrich and many of us are willing to give them credit for.
And the reasoning behind this is simple, whenever politicians are allowed to stand around and regurgitate the well-greased, talking points of their political stump speeches, a politically scripted characterization of a preferred persona is what often emerges, but when candidates are allowed to bicker, especially two adversarial candidates, the talking points can easily become personalized stones of frustration and the preferred, political personas can quickly morph into the desperation of the human emotion that is often well-cloaked behind the politics of the candidate, but will inevitably play a major role in the decision making process of that candidate, and that is what makes such rare glimpses of this basic, primal, non-political, human emotion so knowledgeably friendly. In other words, one can usually learn more about a fighter when the gloves are off than when the gloves have been scripted to stay on. And during this debate, the gloves did come off as candidates began to spar with each other.
And, the newly–crowned frontrunner, Herman Cain, found that out the hard way, as the GOP piranha gnawed on his 9-9-9 Plan like a hungry hobo trying to debone a chicken wing. Where Cain tried to convince people to look over his plan and not allow his opponents to confuse them with economic apples and oranges, Rick Perry, Rick Santorum, Newt Gingrich and others did their very best to convince the audience that Cain’s 9-9-9 Plan was all dolled up like a beautiful idea, but in the end it will only sing the same old song, and that song is called The Taxman by the Beatles, as Cain’s plan was accused of camouflaged taxes hidden in plain sight. Nevertheless, the best moment of this entire exchange was when Mitt Romney hornswoggled Cain into agreeing that at least one part of his plan added a new tax to the current tax, as Romney told the audience that no one wanted to pay a new 9% tax on anything.
Another heated exchange was, once again, between Rick Perry and Mitt Romney, as Perry basically called Romney a hypocrite who hired illegal aliens to do his yard work, and Romney was not happy with that claim. Romney fired back calling into question Perry’s ability to be civil in a civil debate by implying that being president means that one has to have actual facts to back up statements, and one has to be composed enough to allow and process opposition feedback to such controversial allegations. Romney then strategically reaches across from his podium and places his hand on Perry’s shoulder; as if to try and assert his pre-presidential adulthood or dominance by attempting to calm down the unbridled Perry, as he forcefully demanded to Perry that he shut up allow him to continue to speak, but Perry angrily continued the shouting match. And while Romney laughed presidentially, Perry pointed his finger and cut his eyes at Romney while Romney’s hand was still on his shoulder, and for a fleeting moment only, it seemed like Perry was actually contemplating on whether or not to knock Romney’s hand off of him, but cooler heads prevailed. Although, it was clear that Romney had once again gotten the best of Perry, as he manipulated the moment into his favor.
But Romney wasn’t done there. The next big attack by all of the candidates on one particular candidate was another bum’s rush on Romneycare, as Santorum and Perry teamed up to pound Romney and his care into the non-mandated pavement. To Santorum and Perry, Romneycare is the official blueprint of Obamacare, and Santorum asked Romney straight up how the orchestrator of Romneycare could be trusted to repeal Obamacare, when Obamacare is the illegitimate son of Romneycare. Then, Perry described Romney’s governorship days in Massachusetts as abysmal with his Romneycare monstrosity being the centerpiece of its failure, but the exchange between Gingrich and Romney took the cake.
While Gingrich slammed Romneycare for instituting the dreaded, government mandate, which is political kryptonite to conservatives, Gingrich, the so-called genius of the party; also questioned Romney’s judgment in regards to the individual mandate, but Romney then turned it around and told Gingrich that he got the idea of a mandate from him. Now this exasperated Gingrich, as he defiantly scolded Romney by basically saying: ‘You didn’t get the idea of a mandate from me,’ and don’t you sit up here and lie to these people by misrepresenting me to them, but Romney was prepared again, as he backed Gingrich into a corner by forcing him to admit that he’d supported an individual mandate when he was opposing Hillary Clinton’s health care plan, and the last time that anyone checked Gingrich was still eating crow!
Overall, Michele Bachmann performed about as well at flawlessly delivering her scripted, talking points lines as one could expect—helping her cause among her brand, while Ron Paul continues to baffle the pundits with his unpredictability, his practicalities, and his overall common sense on many issues, but consider this for a moment.
Throughout all of these debates, it has been very hard to recall Ron Paul actually addressing President Obama as President Obama or the GOP’s political opponent. Paul seems to be running his personalized campaign against the federal government instead of President Obama, and the other Republicans still have not called him out publicly on that, which is politically baffling.
The two losers in this debate are Herman Cain and Jon Huntsman. Cain looks ineffective at best whenever he ventures off into anything outside of his 9-9-9 Plan, and even it got taken the political woodshed as just another tax increase. When asked about tough questions outside of economics, Cain seemed to forget his previous statements, especially when they were controversial. When Anderson Cooper asked Cain about his apparent statement that he would support the closing of Gitmo in exchange for Al-Qaeda releasing an American prisoner, Cain pretended that he didn’t fully understand the crux of it when he was originally asked that question, as he scrambled to change his answer in order to make it fit politically with the anti-terrorism tone of the moment.
Huntsman did not appear tonight, because he decided to boycott Nevada based on primary issues. To Huntsman, his actions might seem noble, but to the voters the inaction of his absence could ultimately cause him to be viewed as more irrelevant than he already is. He simply does not have enough clout to be skipping debates when he obviously needs all the exposure that he can get. Come on Huntsman! This is not rocket science.
Outside of the entertaining bickering, the general consensus of the GOP platform is still just as stupid as it ever was, from the portrayal of Ronald Reagan as the Republican Zeus, to Michele Bachmann’s guarantee to build a double-wide fence along the Mexican border, to the constant and exclusive blaming of President Obama and the federal government for the bad economy, while treating the Wall St. crooks and the bank shysters like misunderstood victims of too much bullying at the hands of the 99%. The only Independents who could judiciously fall for most of this crap would probably be Independents who are too independent of good-old common sense and a functioning brain or memory!
© 2011, agentleman.
We’re not certain what happened here. But you’ll notice that late this afternoon the Romney campaign put out a campaign video mashup of all Rick Perry’s brain freeze moments from the debate. The charitable read of the video was that Perry wasn’t up to the challenge of debating President Obama. The less charitable interpretation was that Perry was just too big a doofus to be president.
A couple hours ago TPM Reader HW said it was a mistake on Romney’s part. And now as of about 10 PM on the east coast the video has disappeared from Youtube. It now reads “This video has been removed by the user.” Now, Youtube can be pretty glitchy. And things can be inadvertently overwritten. So we can’t say with any certainty that the Romney campaign pulled the video. And it may reappear as we speak. But it seems to have vanished.
We’ve reached out to both campaigns to try to find out what happened. And we’ll update you when we hear more.
— Josh Marshall
© 2011, agentleman.
As chairman of the Senate Banking Committee from 1995 through 2000, Gramm was Washington’s most prominent and outspoken champion of financial deregulation. He played a leading role in writing and pushing through Congress the 1999 repeal of the Depression-era Glass-Steagall Act, which separated commercial banks from Wall Street. He also inserted a key provision into the 2000 Commodity Futures Modernization Act that exempted over-the-counter derivatives like credit-default swaps from regulation by the Commodity Futures Trading Commission. Credit-default swaps took down AIG, which has cost the U.S. $150 billion thus far.
The Federal Reserve chairman — an economist and a disciple of libertarian icon Ayn Rand — met his first major challenge in office by preventing the 1987 stock-market crash from spiraling into something much worse. Then, in the 1990s, he presided over a long economic and financial-market boom and attained the status of Washington’s resident wizard. But the super-low interest rates Greenspan brought in the early 2000s and his long-standing disdain for regulation are now held up as leading causes of the mortgage crisis. The maestro admitted in an October congressional hearing that he had “made a mistake in presuming” that financial firms could regulate themselves.
The ex-SEC chief’s blindness to repeated allegations of fraud in the Madoff scandal is mind-blowing, but it’s really his lax enforcement that lands him on this list. Cox says his agency lacked authority to limit the massive leveraging that set up last year’s financial collapse. In truth, the SEC had plenty of power to go after big investment banks like Lehman Brothers and Merrill Lynch for better disclosure, but it chose not to. Cox oversaw the dwindling SEC staff and a sharp drop in action against some traders.
When Paulson left the top job at Goldman Sachs to become Treasury Secretary in 2006, his big concern was whether he’d have an impact. He ended up almost single-handedly running the country’s economic policy for the last year of the Bush Administration. Impact? You bet. Positive? Not yet. The three main gripes against Paulson are that he was late to the party in battling the financial crisis, letting Lehman Brothers fail was a big mistake and the big bailout bill he pushed through Congress has been a wasteful mess.
Before the financial-sector meltdown, few people had ever heard of credit-default swaps (CDS). They are insurance contracts — or, if you prefer, wagers — that a company will pay its debt. As a founding member of AIG’s financial-products unit, Cassano, who ran the group until he stepped down in early 2008, knew them quite well. In good times, AIG’s massive CDS-issuance business minted money for the insurer’s other companies. But those same contracts turned out to be at the heart of AIG’s downfall and subsequent taxpayer rescue. So far, the U.S. government has invested and lent $150 billion to keep AIG afloat.
Homebuilders had plenty to do with the collapse of the housing market, not just by building more homes than the country could stomach, but also by pressuring people who couldn’t really afford them to buy in. As CEO of Beazer Homes since 1994, McCarthy has become something of a poster child for the worst builder behaviors. An investigative series that ran in the Charlotte Observer in 2007 highlighted Beazer’s aggressive sales tactics, including lying about borrowers’ qualifications to help them get loans. The FBI, Department of Housing and Urban Development and IRS are all investigating Beazer. The company has admitted that employees of its mortgage unit violated regulations — like down-payment-assistance rules —at least as far back as 2000. It is cooperating with federal investigators.
The mess that Fannie Mae has become is the progeny of many parents: Congress, which created Fannie in 1938 and loaded it down with responsibilities; President Lyndon Johnson, who in 1968 pushed it halfway out the government nest and into a problematic part-private, part-public role in an attempt to reduce the national debt; and Jim Johnson, who presided over Fannie’s spectacular growth in the 1990s. But it was Johnson’s successor, Raines, who was at the helm when things really went off course. A former Clinton Administration Budget Director, Raines was the first African-American CEO of a Fortune 500 company when he took the helm in 1999. He left in 2004 with the company embroiled in an accounting scandal just as it was beginning to make big investments in subprime mortgage securities that would later sour. Last year Fannie and rival Freddie Mac became wards of the state.
By slapping AAA seals of approval on large portions of even the riskiest pools of loans, rating agencies helped lure investors into loading on collateralized debt obligations (CDOs) that are now unsellable. Corbet ran the largest agency, Standard & Poor’s, during much of this decade, though the other two major players, Moody’s and Fitch, played by similar rules. How could a ratings agency put its top-grade stamp on such flimsy securities? A glaring conflict of interest is one possibility: these outfits are paid for their ratings by the bond issuer. As one S&P analyst wrote in an email, “[A bond] could be structured by cows and we would rate it.”
The Gorilla of Wall Street, as Fuld was known, steered Lehman deep into the business of subprime mortgages, bankrolling lenders across the country that were making convoluted loans to questionable borrowers. Lehman even made its own subprime loans. The firm took all those loans, whipped them into bonds and passed on to investors billions of dollars of what is now toxic debt. For all this wealth destruction, Fuld raked in nearly $500 million in compensation during his tenure as CEO, which ended when Lehman did.
In the early 1980s, the Sandlers’ World Savings Bank became the first to sell a tricky home loan called the option ARM. And they pushed the mortgage, which offered several ways to back-load your loan and thereby reduce your early payments, with increasing zeal and misleading advertisements over the next two decades. The couple pocketed $2.3 billion when they sold their bank to Wachovia in 2006. But losses on World Savings’ loan portfolio led to the implosion of Wachovia, which was sold under duress late last year to Wells Fargo
President Clinton’s tenure was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. It is the subject of heated political and scholarly debate whether any of these moves are to blame for our troubles, but they certainly played a role in creating a permissive lending environment.
From the start, Bush embraced a governing philosophy of deregulation. That trickled down to federal oversight agencies, which in turn eased off on banks and mortgage brokers. Bush did push early on for tighter controls over Fannie Mae and Freddie Mac, but he failed to move Congress. After the Enron scandal, Bush backed and signed the aggressively regulatory Sarbanes-Oxley Act. But SEC head William Donaldson tried to boost regulation of mutual and hedge funds, he was blocked by Bush’s advisers at the White House as well as other powerful Republicans and quit. Plus, let’s face it, the meltdown happened on Bush’s watch.
Merrill Lynch’s celebrated CEO for nearly six years, ending in 2007, he guided the firm from its familiar turf — fee businesses like asset management — into the lucrative game of creating collateralized debt obligations (CDOs), which were largely made of subprime mortgage bonds. To provide a steady supply of the bonds — the raw pork for his booming sausage business —O’Neal allowed Merrill to load up on the bonds and keep them on its books. By June 2006, Merrill had amassed $41 billion in subprime CDOs and mortgage bonds, according to Fortune. As the subprime market unwound, Merrill went into crisis, and Bank of America swooped in to buy it.
Think of Wen as a proxy for the Chinese government — particularly those parts of it that have supplied the U.S. with an unprecedented amount of credit over the past eight years. If cheap credit was the crack cocaine of this financial crisis — and it was — then China was one of its primary dealers. China is now the largest creditor to the U.S. government, holding an estimated $1.7 trillion in dollar-denominated debt. That massive build-up in dollar holdings is specifically linked to China’s efforts to control the value of its currency. China didn’t want the renminbi to rise too rapidly against the dollar, in part because a cheap currency kept its export sector humming — which it did until U.S. demand cratered last fall.
When the chief economist at the National Association of Realtors, an industry trade group, tells you the housing market is going to keep on chugging forever, you listen with a grain of salt. But Lereah, who held the position through early 2007, did more than issue rosy forecasts. He regularly trumpeted the infallibility of housing as an investment in interviews, on TV and in his 2005 book, Are You Missing the Real Estate Boom?. Lereah says he grew concerned about the direction of the market in 2006, but consider his January 2007 statement: “It appears we have established a bottom.”
Hedge funds played an important role in the shift to sloppy mortgage lending. By buying up mortgage loans, Devaney and other hedge-fund managers made it profitable for lenders to make questionable loans and then sell them off. Hedge funds were more than willing to swallow the risk in exchange for the promise of fat returns. Devaney wasn’t just a big buyer of mortgage bonds — he had his own $600 million fund devoted to buying risky loans — he was one of its cheerleaders. Worse, Devaney knew the loans he was funding were bad for consumers. In early 2007, talking about option ARM mortgages, he told Money, “The consumer has to be an idiot to take on one of those loans, but it has been one of our best-performing investments.”
His alleged Ponzi scheme could inflict $50 billion in losses on society types, retirees and nonprofits. The bigger cost for America comes from the notion that Madoff pulled off the biggest financial fraud in history right under the noses of regulators. Assuming it’s all true, the banks and hedge funds that neglected due diligence were stupid and paid for it, while the managers who fed him clients’ money — the so-called feeders — were reprehensibly greedy. But to reveal government and industry regulators as grossly incompetent casts a shadow of doubt far and wide, which crimps the free flow of investment capital. That will make this downturn harder on us all.
Meet the father of mortgage-backed bonds. In the late 1970s, the college dropout and Salomon trader coined the term securitization to name a tidy bit of financial alchemy in which home loans were packaged together by Wall Street firms and sold to institutional investors. In 1984 Ranieri boasted that his mortgage-trading desk “made more money than all the rest of Wall Street combined.” The good times rolled: as homeownership exploded in the early ’00s, the mortgage-bond business inflated Wall Street’s bottom line. So the firms placed even bigger bets on these securities. But when subprime borrowers started missing payments, the mortgage market stalled and bond prices collapsed. Investment banks, overexposed to the toxic assets, closed their doors. Investors lost fortunes.
For years, the worst moniker you heard thrown at Goodwin, the former boss of Royal Bank of Scotland (RBS), was “Fred the Shred,” on account of his knack for paring costs. A slew of acquisitions changed that, and some RBS investors saw him as a megalomaniac. Commentators have since suggested that Goodwin is simply “the world’s worst banker.” Why so mean? The face of over-reaching bankers everywhere, Goodwin got greedy. More than 20 takeovers helped him transform RBS into a world beater after he assumed control in 2000. But he couldn’t stop there. As the gloom gathered in 2007, Goodwin couldn’t resist leading a $100 billion takeover of Dutch rival ABN Amro, stretching RBS’s capital reserves to the limit. The result: the British government last fall pumped $30 billion into the bank, which expects 2008 losses to be the biggest in U.K. corporate history
Who decided banks had to be all things to all customers? Weill did. Starting with a low-end lender in Baltimore, he cobbled together the first great financial supermarket, Citigroup. Along the way, Weill’s acquisitions (Smith Barney, Travelers, etc.) and persistent lobbying shattered Glass-Steagall, the law that limited the investing risks banks could take. Rivals followed Citi. The swollen banks are now one of the country’s major economic problems. Every major financial firm seems too big to fail, leading the government to spend hundreds of billions of dollars to keep them afloat. The biggest problem bank is Weill’s Citigroup. The government has already spent $45 billion trying to fix it.
In his two decades as Iceland’s Prime Minister and then as central-bank governor, Oddsson made his tiny country an experiment in free-market economics by privatizing three main banks, floating the currency and fostering a golden age of entrepreneurship. When the market turned … whoops! Iceland’s economy is now a textbook case of macroeconomic meltdown. The three banks, which were massively leveraged, are in receivership, GDP could drop 10% this year, and the IMF has stepped in after the currency lost more than half its value. Nice experiment.
Plenty of CEOs screwed up on Wall Street. But none seemed more asleep at the switch than Bear Stearns’ Cayne. He left the office by helicopter for 3 ½-day golf weekends. He was regularly out of town at bridge tournaments and reportedly smoked pot. (Cayne denies the marijuana allegations.) Back at the office, Cayne’s charges bet the firm on risky home loans. Two of its highly leveraged hedge funds collapsed in mid-2007. But that was only the beginning. Bear held nearly $40 billion in mortgage bonds that were essentially worthless. In early 2008 Bear was sold to JPMorgan for less than the value of its office building. “I didn’t stop it. I didn’t rein in the leverage,” Cayne later told Fortune.
© 2011, agentleman.