Bhutto's Assassination

Britain’s Channel 4 News has obtained video footage of the assassination, and 3 gunshots are clearly heard, and her hair and scarf are disturbed, and then the suicide bomb goes off.

Jane Perlez, on the New York Times (repost on the Seattle Post-Intelligencer), notes:

...Athar Minallah, a board member of the hospital where Bhutto was treated, released her medical report along with an open letter showing that her doctors wanted to distance themselves from the government theory that Bhutto had died by hitting her head on a lever of her car's sunroof during the attack....

...Pakistani and Western security experts said the government's insistence that Bhutto, a former prime minister, was not killed by a bullet was designed to deflect attention from the lack of government security around her. On Sunday, photographs in Pakistani newspapers showed a man apparently pointing a gun at her from just yards away....

...Minallah distributed the medical report with his open letter to the Pakistani news media and The New York Times. He said the doctor who wrote the report, Mohammad Mussadiq Khan, the principal professor of surgery at the Rawalpindi General Hospital, told him on the night of Bhutto's death that she had died of a bullet wound....

Syed Saleem Shahzad on the Asia Times reports on "Al Qaeda's" claim of responsibility:

"We terminated the most precious American asset which vowed to defeat mujahideen.” These were the words of al-Qaeda’s top commander for Afghanistan operations and spokesperson Mustafa Abu al-Yazid, immediately after the attack that claimed the life of Pakistani politician Benazir Bhutto on Thursday (December 27)....

...“This is our first major victory against those [eg, Bhutto and President Pervez Musharraf] who have been siding with infidels [the West] in a fight against al-Qaeda and declared a war against mujahideen,” Mustafa told Asia Times Online by telephone....

...On December 6, a Pakistani intelligence agency tracked a cell phone conversation between a militant leader and a local cleric, in which a certain Maulana Asadullah Khalidi was named. The same day, Khalidi was arrested during a raid in Karachi. The arrest, in turn, led to the arrest of a very high-profile non-Pakistani militant leader, which, it is said, revealed an operation aimed at wiping out “precious American assets” in Pakistan, including Musharraf and Bhutto....

...Bhutto was the only Pakistani leader who regularly spoke against al-Qaeda....

The Associated Press and the Telegraph both have transcripts up of an al-Qaeda intercept, between senior al-Qa'eda leader Baitullah Mehsud and Maulvi Sahib, intercepted AFTER the assassination.

RIA Novosti political commentator Pyotr Goncharov offers this analysis:

... Bhutto's return to Pakistan last October was a triumph and a scandal at the same time. On the day of her return when the escort was moving along one of the central roads of her native Karachi to the greetings of numerous supporters, two explosions killed more than 140 people. Bhutto was not harmed, but Pakistani security-related services were said to be involved in the terrorist attack. President Pervez Musharraf was also suspected. These suspicions have not been cleared to this day.

But it was at least absurd to suspect Musharraf of involvement in Bhutto's assassination. He had a much bigger stake in Bhutto's heading the cabinet after the parliamentary elections. He could not fail to understand that her party was bound to win the elections after an eight-year exile, and possibly, by a landslide. For this reason, Musharraf desperately needed an alliance with the PPP. Pakistan's main sponsors - the United States and Britain, who regard Bhutto and the PPP as democracy incarnate, would have never forgiven Musharraf any other coalition.

Finally, by giving up his general's uniform, Musharraf managed to consolidate the power of a civil president, as well as his personal power; he actually precluded any encroachments on it on behalf of his military and civilian opponents. He set up a national command department to ensure the security and reliability of nuclear facilities. One can imagine what powers the department has received with the presence of nuclear weapons in the country and the threat of the extremist forces coming to power.

The president headed the new department, while the prime minister was appointed his deputy. In this context, Musharraf also made Bhutto his supporter. This position of his was shared by his supporters.

Literally, a day before Bhutto's assassination, Pakistani Ambassador to Russia Kamal Kazi told me that Bhutto was going to be the next prime minister and that other options were unlikely. We talked about the role of women in modern Pakistan, and the ambassador said that his guests would be able to see the Pakistani Prime Minister without a veil. It was clear whom he meant....

Professor M.D. Nalapat, vice-chair of the Manipal Advanced Research Group, UNESCO Peace Chair, and professor of geopolitics at Manipal University, provides this analysis on UPI Asia Online:

...The skepticism over her longevity was because of the threat she represented to both the Punjabi component in the Pakistan army and to the continuation of the military's monopoly over state power.

While President Pervez Musharraf avoided challenging the latter, since 9/11 he has quietly but systematically sought to reduce the suffocating grip of the Punjabis over the army, giving better representation to Mohajirs, Balochis, Pashtuns and even a few Sindhis in the higher reaches of both the military as well as the civil administration. Had there been a teaming up between the wily Musharraf and the mercurial Bhutto, especially after he was made to quit as army chief, the two may have succeeded in leveraging anti-army sentiment in Pakistan enough to send the soldiers back to their barracks.

Since the 1950s, those in uniform have controlled Pakistan's civilian institutions, ensuring that these were melded with the military into a seamless system of preference and privilege to a military that has made jihad a lucrative industry. Especially since anti-U.S. passions rose after the Iraq war in 2003, but dating back to the earlier attempt by Musharraf to put the Taliban out to dry in Afghanistan , the Baloch and Pashtun components of the Pakistan army turned against their chief, to be joined by the Punjabi component shortly thereafter.

While the Baloch and the Pashtun were reacting to the "retreat" from Afghanistan and the occupation of Iraq, the Punjabi component turned negative to Musharraf more than two years after the post-Saddam occupation of Iraq made the United States an object of hatred in the Muslim world. This was because, by mid-2005, they were convinced that Musharraf was seeking to eliminate their overwhelming clout in the armed forces. From that time onward, the Punjabi component silently linked hands with those elements in Pakistan's civil society that wanted Musharraf to quit as army chief.

From the end of 2003, the process of rendering ineffective the writ of Pervez Musharraf within the Pakistan army developed -- a trend that accelerated in 2005. By the end of that year, his writ had largely ceased to operate in the services, with obvious consequences for NATO's war in Afghanistan.

It is likely that it was after his backers in the Pentagon and the U.S. State Department were convinced that Musharraf had become an ineffective asset that the plan to yoke him to a civilian public figure was implemented. With characteristic disregard for the ethnic chemistry of the army, the individual chosen as the other half of this pair was Benazir Bhutto. Unfortunately for U.S. policymakers, being Sindhi, Bhutto was regarded as an outsider by the dominant Punjabi component of the Pakistan army.

Also, despite an awareness that she had the Bhutto family trait of heated rhetoric that was seldom translated into reality, her numerous public vows to eliminate the jihadis went down badly in an army that has made jihad into a profitable enterprise, whether it be the battle against the Soviets in Afghanistan or the shadow boxing against the Taliban seen since 9/11. Added to the billions in U.S. taxpayer money have been the profits from the drugs trade, which in South Asia is run out of Pakistan.

Among the voting public, Bhutto's open embrace of U.S. policies and the influence of her husband, Asif Ali Zardari, soured her appeal. By contrast, her rival Nawaz Sharif gained in popularity, having clearly gained the covert backing of the Punjabi establishment in the army, as had deposed Chief Justice Iftikhar Chowdhury when he challenged Musharraf. Sharif kept up verbal sallies against the unpopular Musharraf, a man that the Punjabi generals were delighted to see run down.

The background noise of anti-Musharraf rhetoric, coupled with more than a nudge from the White House, forced the former commando to doff his uniform and emerge in the unaccustomed role of "civilian head of state," with a Punjabi general, Ashfaq Kiyani, taking over as army chief.

Although Kiyani has the right atmospherics to please the United States -- including a clean-shaven chin and a repertoire of "anti-jihad" buzzwords -- his friends say the new chief's commitment to "winning back the strategic loss suffered in Afghanistan" is total, and therefore that he would place emphasis not on counter-insurgency operations but on the fool's errand of identifying and winning over so-called "moderate Taliban," a process tailor-made to enable the militia to recoup and regroup to a strength sufficient to launch a country-wide assault against NATO in Afghanistan by mid-2009.

Unlike the 1990s, when she helped insert the Taliban into power in Kabul, this time Bhutto seemed a genuine convert to a policy of going after the jihadis, lest they paralyze the machinery of the state with multiple attacks. She was also likely to have reinforced Musharraf's subtle moves to reduce Punjabi influence in the military, aware that she was disliked within this group, and that therefore its potential for trouble needed to be eliminated.

Small wonder that Bhutto was provided with a vehicle with a sunroof to transport her at that final rally in the Punjabi heartland, or that Inter-Services Intelligence-linked spokespersons are seeking to muddy the details of the manner in which she was taken out. Photographs that appear to show a shooter and a suicide bomber reveal that the former fitted into the close-cropped, dark-spectacled stereotype of the intelligence operative.

Although television footage showed him as well as a gun dropped on the ground after the killing, rather than seek to apprehend him, the army-controlled Pakistan administration has gone into overdrive with a theory that very conveniently places the blame on "al-Qaida."

While the suicide bomber may indeed have been linked to the Lashkar-i-Jhangvi or other presumed "al-Qaida" affiliates, it needs to be remembered that almost all these groups have close operational links to the Pakistan military, as does the head of the Intelligence Bureau, retired brigadier Ijaz Shah, who was openly accused by Benazir Bhutto of seeking to eliminate her. Although Musharraf may have wanted Shah to be replaced, since the end of 2005 he has had to cover for the Punjabi component in the army in order to retain some semblance of salience within that institution, and Shah is one of the numerous anti-Bhutto protectees of this faction.

The Punjabis within the army would like to see any sympathy wave for Bhutto's Pakistan People's Party dissipate enough to enable their nominee, Nawaz Sharif, to win the elections. Unless the Jan. 8 elections are postponed, they are unlikely to be able to damp popular pressure for a withdrawal of the army to the barracks....

The GlassHouse Blog on political and other happenings in Pakistan has an interesting backgrounder on the exile of Nawaz Sharif to Saudi Arabia, from August 17, 2007.

The Pakistani ISI has extensive history with al Qaeda and the Taliban (CIA, Saudi and UK monies and weaponry were funneled through the ISI to the Afghanis Soviet resistance in the 1980s; the former Pakistani ISI Chief General Mahmoud Ahmad had been one of the "money men" who had wired funds to the 9/11 "hijackers"). UPI reported on December 21, 2007, that the Pakistani ISI with Al-Qaeda were behind the threats to attack the Kamakhya temple and other religious places in Assam (India), and blow up the All Assam Students Union (AASU), the offices of the BJP's (Bharatiya Janata Party) Assam unit, and kill AASU adviser Samujjal Bhattacharya. It has been published (here) that the AASU is thought to have connections with RAW (the Research and Analysis Wing is India's foreign intelligence agency). India Interacts reported:

...A letter addressed to the BJP state unit president Ramen Kalita, by eight persons claiming to be ISI and al-Qaeda active members in Assam, threatened "to bomb out the main BJP and AASU offices like the World Trade Centre (in USA)".

"Your offer to (Bangladeshi writer) Taslima Nasreen to stay in Assam is against Islam and its tenets. If you don't stop your activities immediately, a powerful bomb will be exploded in your main office," cautioned the letter made available to the media on Friday.

The letter dated December 11, hand-written on plain paper in immigrant Bangladeshi style Assamese and received by post on Thursday, alleged that the BJP under Kalita's leadership was "resorting to mental and physical torture of local Muslims.

"Samujjal Bhattacharya's death is also certain for his activities as AASU advisor", the letter threatened....

Ahmed Quraishi describes the strange bedfellows the US has found for itself, and the political machinations in Pakistan, in the Great Game, for The New Times (Bangladesh), on December 12, 2007:

...it all really began almost three years ago, when, out of the blue and recycling old political arguments, Akbar Bugti launched an armed rebellion against the Pakistani state, surprising security analysts by using rockets and other military equipment that shouldn't normally be available to a smalltime village thug. Since then, Islamabad has sat on a pile of evidence that links Bugti's campaign to money and ammunition and logistical support from Afghanistan, directly aided by the Karzai administration and India, with the US turning a blind eye....

..."We have indications of Indian involvement with anti-state elements in Pakistan," declared the spokesman of the Pakistan Foreign Office in a regular briefing in October. The statement was terse and direct, and the spokesman, Tasnim Aslam, quickly moved on to other issues.

This is how a Pakistani official explained Aslam's statement: "What she was really saying is this: We know what the Indians are doing. They've sold the Americans on the idea that [the Indians] are an authority on Pakistan and can be helpful in Afghanistan. The Americans have bought the idea and are in on the plan, giving the Indians a free hand in Afghanistan. What the Americans don't know is that we, too, know the Indians very well. Better still, we know Afghanistan very well. You can't beat us at our own game."...

Larry Chin and Michel Chossudovsky both discuss the events in light of the Bhutto assassination at Global Research.

Here and here provide some history on the author Taslima Nasreen.

Note that the US sanctions on financial interactions with Iranian banks has essentially put enough pressure for India to hold up on the the Iranian LNG (liquid natural gas) pipeline project (the State Bank of India isn't transacting business with Iran). Any pipeline would necessarily have to cross Pakistan: "Pakistan could earn as much as $500 million in royalties from a transit fee and save $200 million by purchasing cheaper gas from this pipeline project." Jun Yang and Gurdeep Singh (Dow Jones Newswires, on Gulf Times) report that:

...“We can expect immediate impact for energy projects such as the Trans-Afghanistan pipeline and the Iran-Pakistan-India natural gas pipeline, which could be shelved as the government struggles to maintain internal security,” said Chietigj Bajpaee, a research analyst at London-based consultancy Global Insight....

Arnaud de Borchgrave (UPI editor at large had these interesting insights on October 25):

...Radical groups pollute Pakistan's political scene. Since Sept. 11, 2001, when Musharraf, under U.S. pressure, dumped his Taliban proteges, extremist groups, once encouraged by the all-powerful Inter-Services Intelligence agency for the "liberation" of Indian Kashmir, were ordered to shut down. Many of them had offices in the major cities that were closed only to reopen with a different name a block or two away.

The most ominous warning of all for Bhutto came from the federal railways minister, Sheik Rashid Ahmad. He accused her of "raising the flag of imperialism (i.e., Bush administration support), which means she "will have to face suicide attacks. We have already conveyed to her that the ground realities have changed(since she was last in her country eight years ago)."

This perennial Cabinet minister ran a jihadi training camp in the 1980s. He also served in the previous military government under President Zia ul-Haq. As Musharraf's information minister, he was known as a champion spin doctor who
affects an always-in-the-know image. This time he inadvertently validated Bhutto's claim that some elements in Musharraf's government collude with militant radicals assigned to sabotage her political comeback.

Ahmad is a close friend of retired Gen. Hamid Gul, a former ISI chief who acts as strategic adviser to the Muttahida Majlis-e-Amal coalition of six politico-religious extremist parties that governs two of Pakistan's four provinces (Baluchistan and the Northwest Frontier province). Gul hates the United States -- and anything Washington favors -- with a passion. He assisted the creation of the Taliban in the early 1990s and to this day believes the Sept. 11 al-Qaida attacks were a plot engineered by Israel's Mossad, the CIA and the U.S. Air Force. ("How come no fighters were scrambled to take on the planes you say were hijacked?" he asked this reporter.)

From al-Qaida and Taliban sanctuaries in the tribal areas on the Afghan border to Karachi, a teeming port city of 15 million some 600 miles away, there are tens of thousands of fanatics who would love to see Bhutto dead....

...Despite the newly acquired accoutrements of modernity, a large part of Pakistan is still stuck in the past. More than half its 160 million people are illiterate. And aligned against Bhutto's return to power are renegade ISI cadres; the nationwide MMA coalition of extremists throughout the country; supporters of the late military dictator ul-Haq, who seized power from Bhutto's father, Zulfikar Ali Bhutto, and then ordered him executed by hanging (Zia himself died in a mysterious plane crash in 1988 and Benazir became prime minister in a restored civilian government); and the countless flat-Earth clerics and their followers who regard a female leader as an abomination....

US sanctions on Iran are discussed here and here.

Abbas Maleki (director of the International Institute for Caspian Studies in Tehran and a senior research fellow at the Belfer Center for Science and International Affairs, Kennedy School of Government, Harvard University, Iran’s deputy foreign minister from 1985 to 1997), MIT Center for International Studies, noted (on AlterNet, October 30, 2007, that the Iran-Pakistan-India pipeline project:

... is immensely important to the on-going peace process between India and Pakistan. A number of observers of the India-Pakistan conflict have termed this project as the mother of all confidence-building measures between India and Pakistan and named it the Peace Pipeline....

...the Bush administration has been trying to pressure both (India and Pakistan) to back off the deal....

...Regarding Iran and its domestic situation, historically with the exception of the IGAT-I project, under which Iran exported natural gas (via pipeline) to the former Soviet Union in the 1970s, all other projects seeking to export gas from Iran have somehow fallen victim to political conflicts....

Hassan Abbas comments on her blog (Sunday, December 18, 2005): "...Pakistan has not yet established control over the province of Balochistan and especially the Mengal-dominated Khuzdar territory through which the Iranian pipeline will pass. The last time President Musharraf showed the flag in the province by visiting the Marri-dominated Kohlu region, the visit was followed by a rocket attack on the FC helicopter carrying its IG."

Blood borders How a better Middle East would look by Ralph Peters was published in the Armed Forces Journal, in June of 2006, and presented discussion of the "new middle east" ... see the complete article (including the maps, which the Armed Forces Journal no longer keeps with the article) here on Mir Azaad's The Government of Balochistan in Exile blog (Wednesday, July 05, 2006).

Here and here are a bit of the history of the US's efforts to get a pipeline built through Afghanistan (note the participation of Enron). Note that Enron's pipeline would have traversed the Punjabi region of Pakistan.

So, there exists a government in Pakistan that has been ineffective in securing the region with the most petroleum assets (Balochistan), and through which any pipeline from Iran to India will necessarily traverse. They have been ineffective in routing the Taliban/al Qaeda forces that utilize their "northwest territory" (Pushtun and Punjabi areas). We have the Enron-Punjabi pipeline's dreams buried in Pakistan, unfulfilled. The military in Pakistan is controlled by the Punjabis, who would feel a significant reduction in power and influence and affluence should the Balochs gain their freedom from Pakistan, or if any pipeline would traverse the Balochistan region. That military's intelligence service is the connection to "al Qaeda". The ISI may have gotten inklings of some "student/student association" activities, some Indian activities, all under the nose of the US (Pakistan's sponsor), and the ISI & Al Qaeda have threatened to eliminate (murder) those Indian students & associations. Bhutto herself threatened to eliminate the "jihadists" and also to "reorganize" the Pakistani military and ISI.

It would appear that Pakistan's patron has wearied from a significant lack of results, and destabilization/regime change may be in play. What of Nawaz Sharif, and his backers - the SAUDIS? Are we seeing the beginning of the Balkanization of Pakistan ... And perhaps the most radical of thoughts .... partition dissolved ... Punjab and Sindh go back to India, Pushtun to Iran, and Balochistan is freed.

Italian Pursuit of Operation Condor Participants ... Extradition "NonViable"

Mercopress on December 27 had this update to the story of those seeking justice for Operation Condor:

Brazilian authorities said they were awaiting notification from Italy on arrest warrants for suspects in the coordinated repression campaign during South America's dictatorship era, but also anticipated that Brazilian citizens could not be extradited for trial abroad.

An Italian judge on Monday issued arrest warrants for 146 Latin Americans suspected of involvement in Operation Condor --a coordinated campaign by South American military rulers in the 1970s, early eighties to persecute leftists and dissidents.

The warrants name Argentines, Bolivians, Brazilians, Chileans, Paraguayans, Uruguayans and Peruvians sought for complicity in the deaths of 25 Italian citizens. The list included 13 Brazilians.

"We have received no information, be it from the Italian or Brazilian governments," a Federal Police spokeswoman in Brasilia said. "There is no such thing as extradition of Brazilian citizens for trial abroad. There can be a request from them to be arrested here, but that will depend on the analysis by the Brazilian justice system".

Justice Minister Tarso Genro confirmed an extradition was unlikely. "We have a cooperation treaty on criminal justice with (Italy) but, in principle, Brazilian law doesn't permit extradition," Genro told reporters in Brasilia.

The constitution permits extradition only in the case of common crimes and only of naturalized Brazilians, the minister said. Crimes committed by Brazilians abroad are subject to domestic law. The Supreme Court had the final word, Genro said.

Brazil was under military rule from 1964 to 1985 but unlike the post-dictatorship governments of Chile and Argentina, has made little attempt to bring military men behind human rights abuses to justice.

Families of torture victims and those who disappeared have expressed disappointment in the lack of action by President Luiz Inacio Lula da Silva, a former union leader who was himself briefly imprisoned under military rule.

Operation Condor was a secret operation among several South American military regimes to coordinate operations to abduct or kill their political opponents, including allowing death squads to cross borders to hunt them down.

A joint information center was set up at the headquarters of Chile's notorious secret police in Santiago. Rights groups say the U.S. government knew of and supported the operation.

O’Globo newspaper said this week that Brazil was not officially part of the secret operation but it allowed "freelance" military and police units to cooperate in certain missions with their counterparts from other countries.

However it was not clear if the Italian judge's action against those on the list who are living in Latin American or elsewhere outside Italy was symbolic or whether the judge would try to have them extradited to Italy. The list includes such notorious characters as Argentina’s military junta members, General Vidiella, Admiral Emilio Massera and deceased Chilean dictator Augusto Pinochet.

More CIA Torture -- Mamdouh Habib

Amy Cooper from AAP had this story on November 30, 2007 at News.com.au:

...A government team visited Guantanamo Bay in May 2002 spent 12 hours with Mr Habib and 15 hours with fellow Australian detainee David Hicks.

The team's welfare report – circulated to Mr Howard, the attorney-general and ministers for foreign affairs and defence, as well as senior defence personnel – said both men appeared to have been "well-treated by US authorities".

However, the declassified document, today released to the media for the first time, features a number of blacked-out sections, including much of the section headed "Treatment by US Authorities".

The team said Hicks appeared "fit and well", but had a number of concerns about Mr Habib's welfare.

US officials said he had been transferred to hospital after falling from his bunk and hitting his head.

"He is receiving medical treatment for depression ... and complained of being in poor health," the report said.

"Mr Habib seemed tired and of yellowish pallor."

"He had faint bruises on his head caused, he said, from recent falls induced by fainting spells."

Detainees were permitted only one shower a week and two exercise sessions of 15 minutes each, and were only chained to the floor in the interrogation room, the report said.

Their cells were lit 24 hours a day.

The report also details Mr Habib's allegations of torture in Egypt, where he said he was held for six months.

"He said he was tortured, water was dripped on his head and he was administered electric shocks over his body.

"Mr Habib said he was trussed upside down and his body beaten," the report said.

"He said he sustained broken ribs, two broken toes and bleeding from his penis."

"The captors made him listen to noises that resembled ... his wife being raped and his children beaten. He said he was placed neck-high in water for extended periods of time and not allowed to sleep.

"After about six months the torture stopped after a doctor told his captors that he would die."....

...He praised the bombings of US embassies in East Africa, which he described as "justified acts of self-defence", and insisted the 1993 World Trade Centre bombers were innocent.

Officer 3 said Mr Habib admitted knowing convicted World Trade Centre conspirators Ibrahim Elgabrowny and Mahmoud Abouhalima from Egypt, and said they had been framed by the Jews, who hit the centre as an "insurance job"....

Tom Allard at the Sydney Morning Herald reported on December 4:

...As it turned out, less than a month after the ASIO interviews took place, Mr Habib was abducted and taken to Egypt where he has alleged he was repeatedly tortured. He then spent almost three years in the US military prison in Guantanamo Bay before his release without charge....

Economic Apocalypse on Horizon?

Ambrose Evans-Pritchard at the Telegraph (UK) presents the case that the current credit crisis will make 1929's look like a "walk in the park":

... Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.

As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions.

"Liquidity doesn't do anything in this situation," says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression.

"It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue," she adds.

Lenders are hoarding the cash, shunning peers as if all were sub-prime lepers. Spreads on three-month Euribor and Libor - the interbank rates used to price contracts and Club Med mortgages - are stuck at 80 basis points even after the latest blitz. The monetary screw has tightened by default.

York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster.

"The central banks are rapidly losing control. By not cutting interest rates nearly far enough or fast enough, they are allowing the money markets to dictate policy. We are long past worrying about moral hazard," he says.

"They still have another couple of months before this starts imploding. Things are very unstable and can move incredibly fast. I don't think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park," he adds.

The Bank of England knows the risk. Markets director Paul Tucker says the crisis has moved beyond the collapse of mortgage securities, and is now eating into the bedrock of banking capital. "We must try to avoid the vicious circle in which tighter liquidity conditions, lower asset values, impaired capital resources, reduced credit supply, and slower aggregate demand feed back on each other," he says.

New York's Federal Reserve chief Tim Geithner echoed the words, warning of an "adverse self-reinforcing dynamic", banker-speak for a downward spiral. The Fed has broken decades of practice by inviting all US depositary banks to its lending window, bringing dodgy mortgage securities as collateral.

Quietly, insiders are perusing an obscure paper by Fed staffers David Small and Jim Clouse. It explores what can be done under the Federal Reserve Act when all else fails.

Section 13 (3) allows the Fed to take emergency action when banks become "unwilling or very reluctant to provide credit". A vote by five governors can - in "exigent circumstances" - authorise the bank to lend money to anybody, and take upon itself the credit risk. This clause has not been evoked since the Slump....

...America's headline CPI screamed to 4.3 per cent in November. This may be a rogue figure, the tail effects of an oil, commodity, and food price spike. If so, the Fed missed its chance months ago to prepare the markets for such a case. It is now stymied.

This has eerie echoes of Japan in late-1990, when inflation rose to 4 per cent on a mini price-surge across Asia. As the Bank of Japan fretted about an inflation scare, the country's financial system tipped into the abyss.

In theory, Japan had ample ammo to fight a bust. Interest rates were 6 per cent in February 1990. In reality, the country was engulfed by the tsunami of debt deflation quicker than the bank dared to cut rates. In the end, rates fell to zero. Still it was not enough....

...Bernard Connolly, global strategist at Banque AIG, said the Fed and allies had scripted a Greek tragedy by under-pricing credit long ago and seem paralysed as post-bubble chickens now come home to roost. "The central banks are trying to dissociate financial problems from the real economy. They are pushing the world nearer and nearer to the edge of depression. We hope they will eventually be dragged kicking and screaming to do enough, but time is running out," he said.

Glance at the more or less healthy stock markets in New York, London, and Frankfurt, and you might never know that this debate is raging. Hopes that Middle Eastern and Asian wealth funds will plug every hole lifts spirits....

... "The kind of upheaval observed in the international money markets over the past few months has never been witnessed in history," says Thomas Jordan, a Swiss central bank governor.

"The sub-prime mortgage crisis hit a vital nerve of the international financial system," he says.The market for asset-backed commercial paper - where Europe's lenders from IKB to the German Doctors and Dentists borrowed through Irish-based "conduits" to play US housing debt - has shrunk for 18 weeks in a row. It has shed $404bn or 36pc. As lenders refuse to roll over credit, banks must take these wrecks back on their books. There lies the rub....

...Tim Congdon, a banking historian at the London School of Economics, said the rot had seeped through the foundations of British lending.

Average equity capital has fallen to 3.2 per cent (nearer 2.5 per cent sans "goodwill"), compared with 5 per cent seven years ago. "How on earth did the Financial Services Authority let this happen?" he asks.

Worse, changes pushed through by Gordon Brown in 1998 have caused the de facto cash and liquid assets ratio to collapse from post-war levels above 30 per cent to near zero. "Brown hadn't got a clue what he was doing," he says.

The risk for Britain - as property buckles - is a twin banking and fiscal squeeze. The UK budget deficit is already 3 per cent of GDP at the peak of the economic cycle, shockingly out of line with its peers. America looks frugal by comparison.

Maastricht rules may force the Government to raise taxes or slash spending into a recession. This way lies crucifixion. The UK current account deficit was 5.7 per cent of GDP in the second quarter, the highest in half a century. Gordon Brown has disarmed us on every front....

...The ECB's little secret is that it must never allow a Northern Rock failure in the eurozone because this would expose the reality that there is no EU treasury and no EU lender of last resort behind the system. Would German taxpayers foot the bill for a Spanish bail-out in the way that Kentish men and maids must foot the bill for Newcastle's Rock? Nobody knows. This is where eurozone solidarity stretches to snapping point. It is why the ECB has showered the system with liquidity from day one of this crisis.

Citigroup, Merrill Lynch, UBS, HSBC and others have stepped forward to reveal their losses. At some point, enough of the dirty linen will be on the line to let markets discern the shape of the debacle. We are not there yet....

From Luke Burgess at Energy & Capital, December 2006:

...The BIS confirms that Russia and members of OPEC have cut their dollar holdings from 67% in the first quarter to 65% in the second. A 2% cut may seem modest. But the move indicates crucial information for the USD outlook.

While dumping the dollar, the oil giants have increased their holdings in euros from 20% to 22% across the board. This shift has certainly added to the dollar's recent weakness, which has fallen to a 20-month low against the euro and a 14-year low against sterling.

From "Dollar vs EURO -- Weapons of mass destruction" on ThinkandAsk, May 2003:

...Economist commentator Sonja Ebron wrote, "An OPEC switch from the dollar to the euro would bring a quick and devastating dollar and Wall Street crash that would make 1929 look like a $50 casino bet." This prediction was understood by the Clinton administration, but the Bush administration took action to boost the petrodollar.

The greatest financial weapon against the United States is the EURO. It is the first currency to present a threat against the dollar. The EURO is a shared currency of 15 European nations centered upon Germany and France. The economies and populations of the euro countries are as large as that of the United States, and more tightly bound to the Middle East, said Ebron. As large as the European Union appears today, it continues to grow. The United States is landlocked. The world is suddenly too small for the dollar to grow.

Since 1945 the dollar has been the global oil transaction currency. These dollars are recycled from oil production to the US as Treasury Bills and assets in US stocks and real estate, which is a substantial portion of the financial market. The EURO becomes the alternative currency to nations wishing to switch.

Now for the difficult part... although the Asian Times writes a fairly "idiot-proof" description. In 2002, the US debt was $6 trillion against a gross domestic product of $9 trillion. Global economies have, since WWII, captured dollars to service foreign debts, and accumulated dollar reserves sustain the exchange value of their own currency. The world's central banks hold dollar reserves equal to their currency in circulation. The more pressure to devalue a currency, the more dollar reserves are required. This makes each economy dependent upon the US dollar, or known as dollar hegemony, constructed mainly by oil -- in other words, oil producing nations historically only accepted dollars, until the EURO. But with this currency game, the US essentially owns the world oil trading market for free, and allows the US to build its debt based upon credit assets they don't physically own. With The United States in control of Iraq, oil trade reverts to dollars.

With a strong dependency upon oil, and petrodollars secure, the White House hopes the EURO will slide. The EURO economy is currently $9.6 trillion. As more countries jump on to use EURO, their economy grows. The US either takes over the assets they trade, like Iraq, or convince the rest of the world to exchange their currency for dollars. The US is urging Tony Blair not to adopt the EURO for this purpose. The EURO is new, has little debt. The US dollar has a substantial debt, but is heavily used. The European Union itself is a larger consumer of oil than the US.

Is this flirtation with an economic apocalypse all in service to demonstrating - in no uncertain terms - to the oil producers, that with the Euro as the oil currency, they have set themselves up to use something with NO treasury and NO lender of last resort behind it?

Tough love time.

Australia to Withdraw Combat Troops From Iraq by June 2008

Tim Johnston at the International Herald Tribune has this story:

..."I visited the Australian battle group in Talil and spoke directly to what is a fine body of men and women," Rudd said at a joint news conference Friday in Baghdad with the Iraqi prime minister, Nuri Kamal al-Maliki. "That battle group will come to a conclusion as of June next year and will be the last battle group we deploy."

But Australia is likely to maintain the deployment of some of the approximately 1,000 support personnel it has in the theater. "Australia will continue to support our friends in Iraq through navy deployments in the Gulf to assist in the long-term security of Iraqi exports," Rudd said.

The confirmation that he would withdraw the 550 Australian combat troops from Iraq, as promised during his campaign, marks a decisive break from the policies of Rudd's predecessor, John Howard, who was one of the staunchest supporters of President George W. Bush's Iraq policies....

Gordon Brown's (PM, UK) 42-day Detention

Ben Russell and Nigel Morris at the Independent report:

...A survey of Labour MPs by The Independent has uncovered a growing insurrection. Only 34 votes are needed to defeat the detention plans and at least 38 MPs – enough to wipe out Mr Brown's Commons majority of 67 – are vowing to oppose controversial moves to extend the existing 28-day maximum detention period.

The scale of the rebellion will alarm Labour whips determined to hit the ground running next year after the Prime Minister's disastrous end to 2007.

It emerged as Sir Ken Macdonald, the Director of Public Prosecutions, delivered a damning verdict on Mr Brown's 42-day plans. He argued that the 28-day limit was working well, accusing ministers of wanting to pass laws based on a theoretical threat. "I think the basic point is whether you want to legislate on the basis of hypotheticals or whether you want to legislate on the basis of the evidence that we have acquired through practice," Sir Ken told BBC Radio 4's The World at One. "It seems to me that if you are legislating in an area which is going to curtail civil liberties to a significant extent, it is better to proceed by way of the evidence and the evidence of experience."...

Bhutto Shot Before Suicide Bomb

From Xinhua on ChinaView -

Pakistan's opposition leader Benazir Bhutto was shot by her attacker before he blew himself up in a suicide bomb attack Thursday outside a campaign rally, police said Thursday.

Bhutto, 54, died in a hospital after a suspected suicide rocked her election rally at the Liaquat Bagh park in Rawalpindi, some 30 km south from Islamabad.

The latest reports from the state-run PTV said at least ten people were killed in the blast.

However, a private TV, ARJ, reported that at least 20 were killed and another 42 were injured in the blast....

The shooting before the bombing is also reported by the Middle East Times.

Jeremy Page at the Times (UK) notes:

...two militant warlords based in Pakistan's lawless northwestern areas, near the border with Afghanistan, had threatened to kill her on her return.

One was Baitullah Mehsud, a top commander fighting the Pakistani army in the tribal region of South Waziristan. He has close ties to al Qaeda and the Afghan Taleban.

The other was Haji Omar, the “amir” or leader of the Pakistani Taleban, who is also from South Waziristan and fought against the Soviets with the Mujahideen in Afghanistan....

...Analysts say that President Musharraf himself is unlikely to have ordered her assassination, but that elements of the army and intelligence service would have stood to lose money and power if she had become Prime Minister.

The ISI, in particular, includes some Islamists who became radicalised while running the American-funded campaign against the Soviets in Afghanistan and remained fiercely opposed to Ms Bhutto on principle.

Saudi Arabia, which has strong influence in Pakistan, is also thought to frown on Ms Bhutto as being too secular and Westernised and to favour Nawaz Sharif, another former Prime Minister.

And there is the other theory running around that Bhutto may have been more receptive to the notion of "giving up" both AQ Khan and Omar Sheikh ... something to which Mushie has been adamantly opposed.

$15B a month - cost of wars

From Walter Pincus at the Washington Post (repost on The Age (Australia)) :

THE cost of the Iraq and Afghanistan wars and the worldwide battle against terrorism has hit almost half a billion dollars a day, a US senator says.

"This cost of this war is approaching $US15 billion ($A17 billion) a month, with the army spending $US4.2 billion of that every month," said Ted Stevens, one of the Senate's leading proponents of a continued US military presence in Iraq....

...Pentagon spokesmen would not comment on Senator Stevens' figure but said their latest estimate for monthly spending for Iraq, Afghanistan and the war on terrorism was $US11.7 billion....

SAAG New URL!

From The Acorn (India) -- Due to an unauthorised transfer of their old domain, the South Asia Analysis Group has obtained a new URL - http://www.southasiaanalysis.org

This is a great resource and provides a knowledgeable and unbiased look at the goings on in Pakistan and Afghanistan, including much needed distinctions and finer analyses than Americans are used to getting from their media & government.

CIA Torture Tapes - Destruction of War Crimes Evidence; SAAG site Hijacked

Andrew Sullivan has a good piece over at The Sunday Times (UK) {The torture tape fingering Bush as a war criminal}:

...What are the odds that a legal effective interrogation of a key Al-Qaeda operative would have led many highly respected professionals in the US intelligence community to risk their careers by leaking top-secret details to the press?

What are the odds that the CIA would have sought to destroy tapes that could prove it had legally prevented serious and dangerous attacks against innocent civilians? What are the odds that a president who had never authorised waterboarding would be unable to say whether such waterboarding was torture?

What are the odds that, under congressional grilling, the new attorney-general would also refuse to say whether he believed waterboarding was illegal, if there was any doubt that the president had authorised it? The odds are beyond minimal.

Any reasonable person examining all the evidence we have - without any bias - would conclude that the overwhelming likelihood is that the president of the United States authorised illegal torture of a prisoner and that the evidence of the crime was subsequently illegally destroyed.

Fact: Zubaydah's interrogation was video and audio taped.

Fact: The FBI and CIA labeled him as INSANE.

Fact: Zubaydah's "warnings" were repeatedly used to manipulate the news cycle and remove dangerous pieces, e.g., a former FBI agent's admission of the Bush Administration having enough foreknowledge to have actually prevented the "terrorist attacks" on 9/11, and they didn't, in order to achieve an agenda.

Conclusion: Zubaydah was a PATSY, a SCAPEGOAT .... someone had to be used to play the role of "informer" in order for the CIA to have a cover for THEIR knowledge of Khalid Sheikh Mohammed. This is the reason the tapes were DESTROYED - Zubaydah had no information to reveal about Khalid Sheikh Mohammed.

See more about KSM at CooperativeResearch.

Khalid Sheikh Mohammed's nephew Ramzi Yousef was responsible for the 1993 WTC bombing. Mohammed's nephew's (Ammar al Baluchi) wife (Aafia Siddiqui) and (cousin) Ramzi worked at the Alkifah Refugee Center. Alkifah was a recruitment and fundraising center for the CIA's Afghan & Bosnia operations. Loads of this history is contained on the South Asia Analysis Group's website, which has been hijacked since December 22 ... just in time for the premiere of that hack piece of propaganda Charlie Wilson's War on December 21. (For a critical review of the propaganda of this movie, see the review of the propaganda book it was based on - Charlie Wilson's Betrayal.)


In August 2007, Jane Mayer's The Black Sites article ran in The New Yorker. In her story, we see how Khalid himself was used as a tool to manipulate the news cycle, remove dangerous pieces, and provide a COVER for the lead to Hambali, whose own capture and incarceration in Guantanamo provided the Indonesian courts an excuse to "clear the Muslim cleric Abu Bakar Bashir of any involvement in the 2002 attack" (see Roger Maynard's Victims angry as cleric is cleared of Bali bombings in the Guardian, December 22, 2006):

In March, Mariane Pearl, the widow of the murdered Wall Street Journal reporter Daniel Pearl, received a phone call from Alberto Gonzales, the Attorney General. At the time, Gonzales’s role in the controversial dismissal of eight United States Attorneys had just been exposed, and the story was becoming a scandal in Washington. Gonzales informed Pearl that the Justice Department was about to announce some good news: a terrorist in U.S. custody—Khalid Sheikh Mohammed, the Al Qaeda leader who was the primary architect of the September 11th attacks—had confessed to killing her husband. (Pearl was abducted and beheaded five and a half years ago in Pakistan, by unidentified Islamic militants.) The Administration planned to release a transcript in which Mohammed boasted, “I decapitated with my blessed right hand the head of the American Jew Daniel Pearl in the city of Karachi, Pakistan. For those who would like to confirm, there are pictures of me on the Internet holding his head.”

Pearl was taken aback. In 2003, she had received a call from Condoleezza Rice, who was then President Bush’s national-security adviser, informing her of the same news. But Rice’s revelation had been secret. Gonzales’s announcement seemed like a publicity stunt. Pearl asked him if he had proof that Mohammed’s confession was truthful; Gonzales claimed to have corroborating evidence but wouldn’t share it. “It’s not enough for officials to call me and say they believe it,” Pearl said. “You need evidence.” (Gonzales did not respond to requests for comment.)

The circumstances surrounding the confession of Mohammed, whom law-enforcement officials refer to as K.S.M., were perplexing. He had no lawyer. After his capture in Pakistan, in March of 2003, the Central Intelligence Agency had detained him in undisclosed locations for more than two years; last fall, he was transferred to military custody in Guantánamo Bay, Cuba. There were no named witnesses to his initial confession, and no solid information about what form of interrogation might have prodded him to talk, although reports had been published, in the Times and elsewhere, suggesting that C.I.A. officers had tortured him. At a hearing held at Guantánamo, Mohammed said that his testimony was freely given, but he also indicated that he had been abused by the C.I.A. (The Pentagon had classified as “top secret” a statement he had written detailing the alleged mistreatment.) And although Mohammed said that there were photographs confirming his guilt, U.S. authorities had found none. Instead, they had a copy of the video that had been released on the Internet, which showed the killer’s arms but offered no other clues to his identity.

Further confusing matters, a Pakistani named Ahmed Omar Saeed Sheikh had already been convicted of the abduction and murder, in 2002. A British-educated terrorist who had a history of staging kidnappings, he had been sentenced to death in Pakistan for the crime. But the Pakistani government, not known for its leniency, had stayed his execution. Indeed, hearings on the matter had been delayed a remarkable number of times—at least thirty—possibly because of his reported ties to the Pakistani intelligence service, which may have helped free him after he was imprisoned for terrorist activities in India. Mohammed’s confession would delay the execution further, since, under Pakistani law, any new evidence is grounds for appeal.

A surprising number of people close to the case are dubious of Mohammed’s confession. A longtime friend of Pearl’s, the former Journal reporter Asra Nomani, said, “The release of the confession came right in the midst of the U.S. Attorney scandal. There was a drumbeat for Gonzales’s resignation. It seemed like a calculated strategy to change the subject. Why now? They’d had the confession for years.” Mariane and Daniel Pearl were staying in Nomani’s Karachi house at the time of his murder, and Nomani has followed the case meticulously; this fall, she plans to teach a course on the topic at Georgetown University. She said, “I don’t think this confession resolves the case. You can’t have justice from one person’s confession, especially under such unusual circumstances. To me, it’s not convincing.” She added, “I called all the investigators. They weren’t just skeptical—they didn’t believe it.”

Special Agent Randall Bennett, the head of security for the U.S. consulate in Karachi when Pearl was killed—and whose lead role investigating the murder was featured in the recent film “A Mighty Heart”—said that he has interviewed all the convicted accomplices who are now in custody in Pakistan, and that none of them named Mohammed as playing a role. “K.S.M.’s name never came up,” he said. Robert Baer, a former C.I.A. officer, said, “My old colleagues say with one-hundred-per-cent certainty that it was not K.S.M. who killed Pearl.” A government official involved in the case said, “The fear is that K.S.M. is covering up for others, and that these people will be released.” And Judea Pearl, Daniel’s father, said, “Something is fishy. There are a lot of unanswered questions. K.S.M. can say he killed Jesus—he has nothing to lose.” ....

...According to the Bush Administration, Mohammed divulged information of tremendous value during his detention. He is said to have helped point the way to the capture of Hambali, the Indonesian terrorist responsible for the 2002 bombings of night clubs in Bali. He also provided information on an Al Qaeda leader in England. Michael Sheehan, a former counterterrorism official at the State Department, said, “K.S.M. is the poster boy for using tough but legal tactics. He’s the reason these techniques exist. You can save lives with the kind of information he could give up.” Yet Mohammed’s confessions may also have muddled some key investigations. Perhaps under duress, he claimed involvement in thirty-one criminal plots—an improbable number, even for a high-level terrorist. Critics say that Mohammed’s case illustrates the cost of the C.I.A.’s desire for swift intelligence. Colonel Dwight Sullivan, the top defense lawyer at the Pentagon’s Office of Military Commissions, which is expected eventually to try Mohammed for war crimes, called his serial confessions “a textbook example of why we shouldn’t allow coercive methods.”

The Bush Administration has gone to great lengths to keep secret the treatment of the hundred or so “high-value detainees” whom the C.I.A. has confined, at one point or another, since September 11th....

...The U.S. government first began tracking Khalid Sheikh Mohammed in 1993, shortly after his nephew Ramzi Yousef blew a gaping hole in the World Trade Center. Mohammed, officials learned, had transferred money to Yousef. Mohammed, born in either 1964 or 1965, was raised in a religious Sunni Muslim family in Kuwait, where his family had migrated from the Baluchistan region of Pakistan. In the mid-eighties, he was trained as a mechanical engineer in the U.S., attending two colleges in North Carolina.

As a teen-ager, Mohammed had been drawn to militant, and increasingly violent, Muslim causes. He joined the Muslim Brotherhood at the age of sixteen, and, after his graduation from North Carolina Agricultural and Technical State University, in Greensboro—where he was remembered as a class clown, but religious enough to forgo meat when eating at Burger King—he signed on with the anti-Soviet jihad in Afghanistan, receiving military training and establishing ties with Islamist terrorists. By all accounts, his animus toward the U.S. was rooted in a hatred of Israel.

In 1994, Mohammed, who was impressed by Yousef’s notoriety after the first World Trade Center bombing, joined him in scheming to blow up twelve U.S. jumbo jets over two days. The so-called Bojinka plot was disrupted in 1995, when Philippine police broke into an apartment that Yousef and other terrorists were sharing in Manila, which was filled with bomb-making materials. At the time of the raid, Mohammed was working in Doha, Qatar, at a government job. The following year, he narrowly escaped capture by F.B.I. officers and slipped into the global jihadist network, where he eventually joined forces with Osama bin Laden, in Afghanistan. Along the way, he married and had children....

Daniel Pearl -- It was reported in the GulfTimes that Pakistani President Pervez Musharraf revealed that Daniel Pearl was actually an MI6 agent (MI6 is the UK's CIA).

The Bojinka Plots -- (Agence France Presse, December 8, 2001, on FromTheWilderness)

...It provided for 11 planes to be exploded simultaneously by bombs placed on board, but also in an alternative form for several planes flying to the United States to be hijacked and flown into civilian targets.

Among targets mentioned was the World Trade Center in New York, which was destroyed in the September 11 terror attacks in the United States that killed thousands.

Other targets mentioned were CIA offices in Virginia and the Sears Tower in Chicago, Die Welt said....

So, what we see - repeatedly - is the CIA and the Bush Administration using person after person as COVER for their KNOWLEDGE - the information they already have, and using them repeatedly to manage and manipulate the news cycle, whenever they get into a bit of trouble.

As to SAAG's website hijacking - who has the most to lose by folks having access to extensive documentation on the whole Afghanistan adventure? THE PLAYERS -- the US's CIA, the UK's MI6, the Kingdom of Saudi Arabia, and Pakistan's ISI.

UK Gov't as Scarlett O'Hara ...

Andrew Grice reports for The Independent today about the British government's backtracking "over demands for an independent inquiry into the mistakes made in the run-up to and aftermath of the invasion of Iraq":

... Ministers have hinted repeatedly that an investigation would be held after British forces leave the country. But they have now changed tack in the hope of "moving on" in Iraq rather than looking back at what went wrong.

Asked if an inquiry would take place after British troops withdraw, David Miliband, the Foreign Secretary, replied: "I am obsessed with the next five years in Iraq, not the last five years in Iraq. And I think that the best 'inquiry' is putting the best brains to think about how to make sure the next five years in Iraq get that combination of political reconstruction, economic reconstruction and security improvement that are so essential."

His statement will bitterly disappoint anti-war campaigners, who hoped that Gordon Brown would draw a line under Iraq after succeeding Tony Blair by holding an investigation to ensure the lessons are learnt.

After becoming Prime Minister, Gordon Brown rejected calls for an immediate inquiry but raised hopes that one might be held after British troops withdraw.

He said in September: "There will be a time to discuss the question you raise but for the moment nothing has changed. The security and safety of our forces – and there are more than 5,000 people in Iraq – remain the first and foremost consideration."...

...In November 2006, Des Browne, the Defence Secretary, said there would be an inquiry "when the time is right" after the Government defeated a proposal calling for one in the Commons. Margaret Beckett, the then Foreign Secretary, assured MPs: "I have no doubt there will be a time when we want to learn lessons."

The hardening line against an inquiry is disclosed by Mr Miliband in an interview with Fabian Review, the journal of the Labour-affiliated Fabian Society, published next week....

The Scarlett O'Hara "defense" {"...after all, tomorrow is another day..."} ensures that the Iraq "pre-emptive" invasion was not the first, nor will it be the last.

Warnings Unheeded on 48,000 Private Security Contractors in Iraq

Steve Fainaru at the Washington Post had this story on 12-24:

The U.S. government disregarded numerous warnings over the past two years about the risks of using Blackwater Worldwide and other private security firms in Iraq, expanding their presence even after a series of shooting incidents showed that the firms were operating with little regulation or oversight, according to government officials, private security firms and documents.

The warnings were conveyed in letters and memorandums from defense and legal experts and in high-level discussions between U.S. and Iraqi officials. They reflected growing concern about the lack of control over the tens of thousands of private guards in Iraq, the largest private security force ever employed by the United States in wartime.

Neither the Pentagon nor the State Department took substantive action to regulate private security companies until Blackwater guards opened fire Sept. 16 at a Baghdad traffic circle, killing 17 Iraqi civilians and provoking protests over the role of security contractors in Iraq....

On Feb. 7, 2006, Blackwater guards allegedly killed three Kurdish civilians outside the northern city of Kirkuk....

...On Christmas Eve 2006, a Blackwater employee killed the bodyguard of an Iraqi vice president in the Green Zone. Six weeks later, a Blackwater sniper killed three security guards for the state-run media network. On May 24, a Blackwater team shot and killed a civilian driver outside the Interior Ministry gates, sparking an armed standoff between the Blackwater guards and Iraqi security forces in downtown Baghdad.

By June 6, concerns about Blackwater had reached Iraq's National Intelligence Committee....

..."We set this thing up for failure from the beginning," said T.X. Hammes, a retired Marine colonel who advised the new Iraqi army from January to March 2004. He added that private security guards regularly infuriated his Iraqi staff with their aggressive tactics and that he reported the problems "up the chain of command."

"We're just sorting it out now," Hammes said. "I still think, from a pure counterinsurgency standpoint, armed contractors are an inherently bad idea, because you cannot control the quality, you cannot control the action on the ground, but you're held responsible for everything they do."....

...The State Department investigated previous Blackwater shootings and found no indication of wrongdoing, according to a senior official involved in security
matters....

...The Defense Department has paid $2.7 billion for private security since 2003... The State Department has paid $2.4 billion for private security in Iraq -- including $1 billion to Blackwater -- since 2003.... On Sept. 30, 2006, Congress passed a provision aimed at giving the military authority over all contractors in Iraq, including Blackwater. But the provision has not been implemented by the
Pentagon.....

...In previous wars, the Pentagon had prohibited contractors from participating in combat. But in Iraq, military planners rewrote the policy to match the reality on the ground. On Sept. 20, 2005, the military issued an order authorizing contractors to use deadly force to protect people and assets. In June 2006, the order was codified as an "interim rule" in the Federal Register. It took effect immediately without public debate.....

...But neither the military nor the State Department set guidelines for regulating tens of thousands of hired guns on the battlefield. Oversight was left to overburdened government contracting officers or the companies themselves, which conducted their own investigations when a shooting incident occurred. Dozens of security companies operated under layers of subcontracts that often made their activities all but impossible to track. They were accountable to no one for violent incidents, according to U.S. officials and security company representatives familiar with the contracting arrangements.

U.S. officials often turned to the Private Security Company Association of Iraq, a trade group funded by the security companies....

..."It violates all the best lessons of what goes into good policy and smart business," said Peter W. Singer, a Brookings Institution senior fellow... The association sometimes resisted regulation....

...On June 27, 2004, one day before he left Baghdad, L. Paul Bremer, administrator of the now-defunct U.S. occupation government, signed CPA Order 17, a decree granting contractors immunity from Iraqi law.... The February 2006 shooting incident in Kirkuk had damaged U.S.-Iraqi relations.... Ali, the provincial council president.... "sent official letters to the American and the British consulates and met them in my office to find out who the murderers were. They didn't do anything or give me clear answers. They only said, 'The ones who did it were from the Blackwater company.' "

A Blackwater spokeswoman did not respond to e-mails or phone messages seeking comment. U.S. officials said they could not recall the incident....

..."Contractors are . . . subject to oversight and accountability for their actions on the basis of U.S. law and regulation." ....

re The State Department investigated...and found no indication of wrongdoing - Remember - the Inspector General for the State Department was Howard "Cookie" Krongard, who was impeding the investigations into Blackwater, where his brother, former CIA executive director Alvin "Buzzy" Krongard, sat on the Advisory Panel.

Russia claims "no economic necessity" for Iran to continue uranium enrichment

RIA Novosti (Russia) has this story today:

Russia's foreign minister said on Wednesday that Moscow saw no economic necessity for Iran to continue its controversial program to enrich uranium.

Iran's nuclear program has been at the center of an international dispute, with Western countries suspecting Tehran of covering up a weapons program and Iran saying it needs nuclear fuel for energy.

"We are attempting to persuade the Iranians that the freezing of this program would be beneficial for Iran in as much as it would lead to immediate negotiations with the six [international negotiators], including the United States," Sergei Lavrov said.

Russia, which is helping the Iranians build the country's first nuclear power plant in Bushehr, southern Iran, announced the start of nuclear fuel deliveries to the plant on December 17.

If Iran were to agree to freeze its uranium enrichment program, then, said Lavrov, subsequent negotiations with the Iran Six - Russia, the U.S. China, Britain, France and Germany - would help lift, "once and for all, the suspicions that the Iranian nuclear program possesses any other kind of component than a peaceful one."....

Italians Pursue Operation Condor Participants

The Mercopress (South America) has this report from Christmas day:

Prosecutors in Italy have issued arrest warrants for 140 people who participated in the South American dictatorships coordinated repression of the seventies, which was known as Operation Condor.

The list includes the former Argentine dictator General Jorge Videla, former head of the Argentine Navy Admiral Emilio Massera and former Uruguayan president Juan María Bordaberry.

Of the long list some have died such as Chile’s notorious Augusto Pinochet and one of them Captain Jorge Fernandez Troccoli from the Uruguayan Navy intelligence services was arrested in Salerno, where he was retired, reported the Italian press.

Troccoli is accused of the disappearance of four people and will be transferred to Rome to face questioning on December 27.

Under Operation Condor, six governments (Argentina, Brazil, Bolivia, Chile, Paraguay and Uruguay) worked together from the 1970s to hunt down and kill left-wing opponents. Italian authorities have been looking into the plot since the late 1990s.

The investigation followed complaints by relatives of South American citizens of Italian origin who had disappeared. Judge Luisann Figliola issued the arrest warrants on Monday, following a request from state prosecutor Giancarlo Capaldo.

Those named face charges ranging from lesser crimes to kidnappings and multiple murders. Under Operation Condor the military governments agreed to co-operate in sending teams into other countries to track, monitor and kill their political opponents.

As a result, many left-wing opponents of military regimes in the region who had fled to neighboring countries found themselves hunted down in exile. The Italian Justice is expected to begin in the coming days procedures for the extradition of those people in the list, according to the Italian press.

The list of suspects allegedly includes 61 from Argentina; 32 from Uruguay; 22 from Chile; 13 from Brazil; 7 from Bolivia; 7 from Paraguay and 5 from Peru.

Peter Popham on The Independent adds these details to the story today:

...Among the thousands of deaths of which they are accused is the assassination of Orlando Leletier, a former minister in Salvador Allende's Chilean government, in a 1976 car bomb in Washington....

...The plot between the six countries, details of which have emerged only slowly since the collapse of the military regimes, is said to have been cooked up in Santiago in 1975 when leaders of the military intelligence services from each of the countries met to co-ordinate their extra-legal efforts to wipe out their Marxist and socialist opponents. It was a bid to systematise efforts already under way to bolster and cement in power right-wingers whose first success had been the overthrow and murder of Allende, the first Communist to be elected head of state of a western country, by Pinochet in 1973.

Like the Chilean coup d'etat that preceded it, Operation Condor enjoyed at least the tacit support of the US. The enemies were ostensibly armed left-wing guerrillas, but in fact a wide range of opponents were "disappeared", ranging from activists and trade unionists to intellectuals and artists, often with their families. At least 30,000 people are believed to have been eliminated in the Argentinian Dirty War alone.

Operation Condor was wound up in 1983 after the collapse of the Argentine military junta....

EU & UN Reps Expelled from Afghanistan; UK's MI6 Negotiated with Taliban

Deutsche Welle reports today:

A government official said that acting European Union mission head Michael Semple and senior UN official Mervyn Patterson had held an illegal meeting with members of the Taliban and must leave by Thursday, Dec. 27.

"It is the government's last decision. They are persona non grata," Reuters quoted an anonymous Afghan official as saying.

The press officer for the UN Assistance Mission in Afghanistan, Nilab Mobarez, said the organization hoped to quickly clear up the situation so Patterson, who would leave the country on Thursday, could soon return....

...Semple, an Irishman, and Patterson, a Briton, were charged with having talks with the Taliban in the southern province of Helmand without the knowledge of the government in Kabul, which accused them of endangering the security and sovereignty of Afghanistan.

NATO and Afghan troops this month drove the Taliban out of the province, which is the heart of Afghan's drug-producing poppy production. The radical Islamists had controlled the region for the previous 10 months.

Thomas Harding and Tom Coghlan at The Telegraph have this revelation:

...The diplomatic row blew up after the Telegraph revealed that agents from MI6 entered secret talks with Taliban leaders despite Gordon Brown's pledge that Britain would not negotiate with terrorists.

Officers from the Secret Intelligence Service staged discussions, known as "jirgas", with senior insurgents on several occasions over the summer.

An intelligence source said: "The SIS officers were understood to have sought peace directly with the Taliban with them coming across as some sort of armed militia. The British would also provide 'mentoring' for the Taliban."

The disclosure comes only a fortnight after the Prime Minister told the House of Commons: "We will not enter into any negotiations with these people." Opposition leaders said that Mr Brown had "some explaining to do".

The Government was apparently prepared to admit that the talks had taken place but Mr Brown was thought to have "bottled out" just before Prime Minister's Questions on Dec 12, when he made his denial instead.

It is thought that the Americans were extremely unhappy with the news becoming public that an ally was negotiating with terrorists who supported the September 11 attackers.

MI6's meetings with the Taliban took place up to half a dozen times at houses on the outskirts of Lashkah Gah and in villages in the Upper Gereshk valley, to the north-east of Helmand's main town.

The compounds were surrounded by a force of British infantry providing a security cordon.

To maintain the stance that President Hamid Karzai's government was leading the negotiations the clandestine meetings took place in the presence of Afghan officials.

"These meetings were with up to a dozen Taliban or with Taliban who had only recently laid down their arms," an intelligence source said. "The impression was that these were important motivating figures inside the Taliban."

The Prime Minister had denied reports of talks with the Taliban under questioning from David Cameron, the Tory leader, in Parliament....