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[URL="http://gawker.com/5937358/the-bain-files-the-documents-in-searchable-form"]http://gawker.com/5937358/the-bain-files-the-documents-in-searchable-form

The Bain Files: The Documents in Searchable Form

[Image: 901014_32.jpg] John Cook

[/url]These documents are part of a package on Mitt Romney's Bain holdings. For the full report, go here.
For a detailed look confidential financial information from the various funds Romney has invested in, go here. To search through the whole batch, look below. And to add your thoughts to the discussion, go here.

A Friendship Dating to 1976 Resonates in 2012

By MICHAEL BARBARO
Published: April 7, 2012



The two young men had woefully little in common: one was a wealthy Mormon from Michigan, the other a middle-class Jew from Israel.

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Israel Hadari
Prime Minister Benjamin Netanyahu of Israel with Mitt Romney last year. The two men worked together in the 1970s.

Mitt Romney speaking via satellite last month to a meeting of the American Israel Public Affairs Committee. Mr. Romney has criticized the Obama administration over its policies toward Israel.





But in 1976, the lives of Mitt Romneyand Benjamin Netanyahu intersected, briefly but indelibly, in the 16th-floor offices of the Boston Consulting Group, where both had been recruited as corporate advisers. At the most formative time of their careers, they sized each other up during the firm's weekly brainstorming sessions, absorbing the same profoundly analytical view of the world.

That shared experience decades ago led to a warm friendship, little known to outsiders, that is now rich with political intrigue. Mr. Netanyahu, the prime minister of Israel, is making the case for military action against Iran as Mr. Romney, the likely Republican presidential nominee, is attacking the Obama administration for not supporting Mr. Netanyahu more robustly.
The relationship between Mr. Netanyahu and Mr. Romney nurtured over meals in Boston, New York and Jerusalem, strengthened by a network of mutual friends and heightened by their conservative ideologies has resulted in an unusually frank exchange of advice and insights on topics like politics, economics and the Middle East.
When Mr. Romney was the governor of Massachusetts, Mr. Netanyahu offered him firsthand pointers on how to shrink the size of government. When Mr. Netanyahu wanted to encourage pension funds to divest from businesses tied to Iran, Mr. Romney counseled him on which American officials to meet with. And when Mr. Romney first ran for president, Mr. Netanyahu presciently asked him whether he thought Newt Gingrich would ever jump into the race.
Only a few weeks ago, on Super Tuesday, Mr. Netanyahu delivered a personal briefing by telephone to Mr. Romney about the situation in Iran.
"We can almost speak in shorthand," Mr. Romney said in an interview. "We share common experiences and have a perspective and underpinning which is similar."
Mr. Netanyahu attributed their "easy communication" to what he called "B.C.G.'s intellectually rigorous boot camp."
"So despite our very different backgrounds," he said through an aide, "my sense is that we employ similar methods in analyzing problems and coming up with solutions for them."
The ties between Mr. Romney and Mr. Netanyahu stand out because there is little precedent for two politicians of their stature to have such a history together that predates their entry into government. And that history could well influence decision-making at a time when the United States may face crucial questions about whether to attack Iran's nuclear facilities or support Israel in such an action.
Mr. Romney has suggested that he would not make any significant policy decisions about Israel without consulting Mr. Netanyahu a level of deference that could raise eyebrows given Mr. Netanyahu's polarizing reputation, even as it appeals to the neoconservatives and evangelical Christians who are fiercely protective of Israel.
In a telling exchange during a debate in December, Mr. Romney criticized Mr. Gingrich for making a disparaging remark about Palestinians, declaring: "Before I made a statement of that nature, I'd get on the phone to my friend Bibi Netanyahu and say: Would it help if I say this? What would you like me to do?' "
Martin S. Indyk, a United States ambassador to Israel in the Clinton administration, said that whether intentional or not, Mr. Romney's statement implied that he would "subcontract Middle East policy to Israel."
"That, of course, would be inappropriate," he added.
Mr. Netanyahu insists that he is neutral in the presidential election, but he has at best a fraught relationship with President Obama. For years, the prime minister has skillfully mobilized many Jewish groups and Congressional Republicans to pressure the Obama administration into taking a more confrontational approach against Iran.
"To the extent that their personal relationship would give Netanyahu entree to the Romney White House in a way that he doesn't now have to the Obama White House," Mr. Indyk said, "the prime minister would certainly consider that to be a significant advantage."

It was a quirk of history that the two men met at all. In the 1970s, both chose to attend business school in Boston Harvard for Mr. Romney, the Massachusetts Institute of Technology for Mr. Netanyahu. After graduating near the top of their classes, they had their pick of jobs at the nation's biggest and most prestigious consulting firms.





The Boston Consulting Group did not yet qualify as either. Its founder, Bruce D. Henderson, was considered brilliant but idiosyncratic; his unorthodox theories about measuring a company's success by its market share, and dividing businesses into categories like "cash cows" and "dogs" were then regarded as outside the mainstream of corporate consulting.
As Mr. Romney recalled, the faculty and students at Harvard Business School routinely mocked the firm's recruitment posters. "Boston Consulting was at the time a firm that seemed somewhat under siege," he said.
But the company's status as a pioneering upstart, nipping on the heels of bigger blue-chip firms like McKinsey and Booz Allen, fostered a deep camaraderie among its young employees, who traveled around the country advising clients like General Foods and the Mead Corporation.
Even in a firm of 100 M.B.A.'s, Mr. Romney and Mr. Netanyahu managed to stand apart, as much for their biography as for their brainpower. Mr. Romney's father, a former governor of Michigan, had sought the Republican presidential nomination a few years earlier. Mr. Netanyahu had his own exotic résumé: he had just completed a tour of duty in an elite special forces unit of the Israeli military.
"Both clearly had an aura around them," said Alan Weyl, who worked at the firm from 1975 to 1989.
Although they never worked closely on a project together, Mr. Romney and Mr. Netanyahu, competitive by nature, left deep impressions on each other, which appear to have only grown.
Mr. Romney, never known for his lack of self-confidence, still recalls the sense of envy he felt watching Mr. Netanyahu effortlessly hold court during the firm's Monday morning meetings, when consultants presented their work and fielded questions from their colleagues. The sessions were renowned for their sometimes grueling interrogations.
"He was a strong personality with a distinct point of view," Mr. Romney said. "I aspired to the same kind of perspective."
Over dinner years later, aides said, Mr. Netanyahu would reveal the depth of his own scorekeeping, when he quipped, with mostly playful chagrin, that Mr. Romney had been "Henderson's favorite."
"His star," the prime minister said of Mr. Romney's time at Boston Consulting, "had already risen."
Mr. Romney worked at the company from 1975 to 1977; Mr. Netanyahu was involved from 1976 to 1978. But a month after Mr. Netanyahu arrived, he returned to Israel to start an antiterrorism foundation in memory of his brother, an officer killed while leading the hostage rescue force at Entebbe, Uganda. An aide said he sporadically returned to the company over the rest of that two-year period.
Mr. Romney later decamped to Bain & Company, a rival of Boston Consulting. They did, however, maintain a significant link: at Bain, Mr. Romney worked closely with Fleur Cates, Mr. Netanyahu's second wife. (Ms. Cates and Mr. Netanyahu divorced in the mid-1980s, but she remains in touch with Mr. Romney.)
The men reconnected shortly after 2003 when Mr. Romney became the governor of Massachusetts. Mr. Netanyahu paid him a visit, eager to swap tales of government life.
Mr. Netanyahu, who had recently stepped down as Israel's finance minister, regaled Mr. Romney with stories of how, in the tradition of Ronald Reagan and Margaret Thatcher, he had challenged unionized workers over control of their pensions, reduced taxes and privatized formerly government-run industries, reducing the role of government in private enterprise.

He encouraged Mr. Romney to look for ways to do the same. As Mr. Romney recalled, Mr. Netanyahu told him of a favorite memory from basic training about a soldier trying to race his comrades with a fat man atop his shoulders. Naturally, he loses.





"Government," Mr. Romney recalled him saying, "is the guy on your shoulders."
As governor, Mr. Romney said, he frequently repeated the story to the heads of various agencies, reminding them that their job as regulators was to "catch the bad guys, but also to encourage the good guys and to make business more successful in our state."
A few years later, Mr. Romney had dinner with Mr. Netanyahu at a private home in the Jewish quarter of the Old City, in central Jerusalem, where the two spent hours discussing the American and Israeli economies. When Mr. Netanyahu informed Mr. Romney of a personal campaign to persuade American pension funds to divest from businesses tied to Iran, Mr. Romney offered up his Rolodex.
Before he left Israel, Mr. Romney set up several meetings with government officials in the United States for his old colleague. "I immediately saw the wisdom of his thinking," Mr. Romney said.
Back in Massachusetts, Mr. Romney sent out letters to legislators requesting that the public pension funds they controlled sell off investments from corporations doing business with Iran.
Even as Mr. Netanyahu, a keen and eager student of American politics, has tried to avoid any hint of favoritism in the presidential election, friends say he has paid especially close attention to Mr. Romney's political fortunes in this campaign season.
And the prime minister keeps open lines of communication to the candidate. When it was Mr. Gingrich's turn to leap to the top of the polls, Mr. Netanyahu was startled in January by an article exploring why Sheldon Adelson, a billionaire casino executive and outspoken supporter of Israel, was devoting millions of dollars to back Mr. Gingrich. It described Mr. Netanyahu and Mr. Adelson as close friends.
Mr. Netanyahu's office quickly relayed a message to a senior Romney adviser, Dan Senor: the prime minister had played no role in Mr. Adelson's decision to bankroll a Romney rival.
http://www.nytimes.com/2012/04/08/us/pol...ted=3&_r=2
The Secret to Mitt Romney's Fortune? Greed, Debt and Forcing Others to Foot the Bill
AMY GOODMAN: This is Democracy Now!, democracynow.org. We are broadcasting from PBS station WEDU in Tampa, Florida. This is "Breaking With Convention: War, Peace and the Presidency," Democracy Now!'s special coverage from the Republican National Convention, inside and out. I'm Amy Goodman.

We continue our coverage now by turning to an issue that's been raised repeatedly during the campaign: the personal wealth of Republican presidential nominee Mitt Romney. A new article by reporter Matt Taibbi in Rolling Stone sheds light on the origin of his fortune, revealing how Romney's former firm, Bain Capital, used private equity to raise money to conduct corporate raids. Matt Taibbi writes, quote, "what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time," Taibbi writes. He goes on to say, "In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on [planet] Earth."

Well, Matt Taibbi joins us now, contributing editor for Rolling Stone magazine. His most recent in-depth piece called "Greed and Debt: The True Story of Mitt Romney and Bain Capital," author of the book also, Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History.

Matt Taibbi, welcome to Democracy Now!

MATT TAIBBI: Good morning.

AMY GOODMAN: Lay it out for us. Excellent piece, investigative piece, on Mitt Romney's wealth. Where did it start?

MATT TAIBBI: Well, you know, for me, it started when I had to cover this campaign earlier this year, and I was listening to Romney's stump speech about debt. You know, he came up with this whole image of a prairie fire of debt raging across America that was literally going to burn children alive in the future. And I kept thinking to myself, does nobody know what this guy did for a living and how he made his money? You know, Mitt Romney is unabashedly a leverage buyout artist. And a leverage buyout artist is a guy who borrows lots of money that other companies have to pay back. And that's the simple formula.

He started outhis most famous deals, of course, are essentially venture capital deals like the Staples situation, where he built a company from the ground up. But after Staples, he switched to a different model, that he preferred for the rest of his professional career, in which he took over existing companies by putting down small amounts of his own cash, borrowing the rest fromtypically from a giant investment bank, taking over controlling stakes in companies, and then forcing those companies to pay him either through management fees or through dividends. And that's his business formula.

AMY GOODMAN: Explain what private equity is.

MATT TAIBBI: Well, that is what a private equity fund does. They're essentiallyit's a synonym for what in the '80s we called the leverage buyout business. It's a small group that raises capital and then goes and leverages takeovers of companies using borrowed money. In the '80s, thesethis sort of business was glamorized through a couple of things, in particular, in pop culture. One was the movie Wall Street, where Gordon Gekko, the famous Michael Douglas character from the Oliver Stone movie, was essentially a private equity guy. He was a leverage buyout takeover artist. And the other one was a book called Barbarians at the Gate, which was a true story of the takeover of RJR Nabisco by a company called KKR, which was another Bain Capital-like takeover company. And that's what they are. They're essentially guys who borrow money to take over companies and extract wealth from those companies to pay off their investors.

AMY GOODMAN: Matt, you say that Mitt Romney is not the flip-flopper that critics say he is.

MATT TAIBBI: Yeah. I mean, this is a sort of a subtle point about Mitt Romney. It's funny. I don't want to stretch this comparison too much, but, you know, there'sit's almost like he has a kind of a religious conviction about being able to lie to people outside of the tent, so to speak. You know, there's that tenet of some forms of extreme Muslim religions where it's OK to lie to the infidel. And I think Mitt Romney has a little bit of that. He seems to believe that it's OK, that there's nothing particularly wrong with changing one's mind about things, and he does it repeatedly in a way that I think is different from other politicians. For him, it's just changing a business strategy, and he doesn't see why everybody should get so upset about it.

AMY GOODMAN: You say that Mitt Romney has a vision, that he's trying for something big. Lay out what that vision is.

MATT TAIBBI: Well, Mitt Romney is really the representative of an entire movement that's taken over the American business world in the last couple of decades. You know, America used to beespecially the American economy was built upon this brick-and-mortar industrial economy, where we had factories, we built stuff, and we sold it here in America, and we exported it all over the world. That manufacturing economy was the foundation for our wealth and power for a couple of centuries. And then, in the '80s, we started to transform ourselves from a manufacturing economy to a financial economy. And that process, which, you know, on Wall Street we call financialization, was really led thatsort of this revolution, where instead of making products, we made transactions, we made financial products, like credit default swaps and collateralized debt obligations. We created money through financial transactions rather than building products and selling them around the world. And that revolution was really led by people like Mitt Romney. And the advantage of financialization, from the point of view of the very rich and the people who run the American economy, is that it was extremely efficient at extracting wealth and kicking it upward, whereas the old manufacturing economy had the sort of negative effect of spreading around to the entire population. In the financialization revolution, you can take all of the money, and you don't have to spread it around with anybody. And Mitt Romney was kind of a symbol of that fundamental shift in our economy.

AMY GOODMAN: Yesterday, Democracy Now!'s Mike Burke caught up with the Texas governor, Rick Perry, and asked him about his comment about Mitt Romney, calling him a vulture capitalist. Let's take a listen.

MIKE BURKE: You described Mitt Romney, compared him to a vulture. What did you mean by that? And you said his work with Bain Capital was indefensible.

GOV. RICK PERRY: How are you?

MIKE BURKE: Those were your words during the primary season, Governor. Do you have any comment at all?

AMY GOODMAN: What you were just listening to was the silence of Governor Perry not responding to Mike's question. Yes, Governor Perry called Mitt Romney a "vulture capitalist." Matt Taibbi, what does that mean?

MATT TAIBBI: Well, look, again, this is whathow companies like Bain made their money. And a great example was a company that I went and visitedwell, the place where it used to existKB Toys, which used to be headquartered out in Pittsfield, Massachusetts. They took over the company with like $18 million down. They financed the other $302 million. So that's borrowed money that subsequently became the debt of KB Toys. This is an important distinction for people to understand. When they borrowed that money to take over that company, they didn't have to pay it back, KB had to pay it back. Once they took over the company, they induced it to do a $120 million, quote-unquote, "dividend recapitalization," which essentially means that the company had to cash in a bunch of shares and pay Bain and its investors a huge sum of money. And in order to finance that, they had to take out over $60 million in bank loans. So, essentially, you take over the company, you force them to make enormous withdrawals against their credit card, essentially, and pay the new owners of the company. And that's essentially what they did. They took over a floundering company that was sort of in between and faced with threatening changes in the industry, and they forced them to cash out entirely and pay all their money to the new owners.

AMY GOODMAN: You know, just for the record, Governor Perry's comment about Mitt Romney was very interesting. He said, "They're vultures that sitting out there on the tree limb waiting for the company to get sick, and then they swoop in, they eat the carcass, they leave with that, and they leave the skeleton."

MATT TAIBBI: That's exactly right. That's exactly what they do. Again, they borrow money, they take over the company, the company now has this massive new debt burden. So, if the couple was already in trouble, if it was already having trouble meeting its bottom line, suddenly, not only does it have its old problems, now it has, you know, $300 million in new debt service that it has to pay. So it might be, you know, paying millions and millions of dollars every month.

A great example is Dunkin' Donuts, whose parent company was taken over a couple years ago by a combination of Bain Capital and the Carlyle Group. Dunkin' was induced to do one of those dividend recapitalizations. They had to pay half-a-billion dollars to their new masters. And just to pay the debt service on the loan they took out to make that payment to Bain and Carlyle, they're going to have to sell like two-and-a-half million cups of coffee every month just to pay the debt service. So, that's extraordinary. They arethey're essentially vultures who hang out waiting for companies to get sick, then they forcibly take them over, and they extract fees, commissions and dividends, by force, essentially.

AMY GOODMAN: Earlier this week, Democracy Now! spoke to two workers from what's now Sensata Technologies, which Bain Capital is majority owner. A hundred seventy workers there at the Sensata plant in Freeport, Illinois, are calling on Romney to help save their jobs from being shipped to China. The plant manufactures sensors and controls that are used in aircraft and automobiles. This is Tom Gaulrapp, a formerwell, he's a Sensata worker now, talking about the response that they've received.

TOM GAULRAPP: We're there trying to save our jobs, and we were called communists. For trying to save our jobs from going to China from the United States, we were called communists. Theyif there hadn't been a large police group in there, I'm sure we would have been more threatened. They started this "U.S.A." chant. It's like, yes, we're all for the U.S.A., too. That's what we're trying to do here. We're trying to keep well-paying manufacturing jobs from being moved out of this country to China. And they make it sound like we're not patriotic. And it boggles the mind as to what they're thinking.

AMY GOODMAN: That's Tom Gaulrapp, and he's describing going to an Iowa Romney campaign event last weekRomney was maybe seven rows in front of himand asking about their jobs, their company owned by Bain, being sent to China. In fact, some of them went to China, the workers, to train the workers in China, so that they could take over their jobs. Their last day will be the Friday before the elections. They'll be on the unemployment line to apply for unemployment on Monday. On Tuesday, they vote. Can you comment on this situation, Matt?

MATT TAIBBI: Yeah, no, it's absolutely typical of a private equity transaction. I think one of the glaring misconceptions about this kind of business that's persisted throughout Mitt Romney's campaign for the presidency is that what these companies do is turn around and fix companies, that they're in the business of helping these companies. Romney constantly uses this term, that hethat, you know, "help." "I'm either helping this firm, or I'm helping it turn around." He wrote a book called Turnaround. But they are not in the business of turning companies around and creating jobs. That is a complete mischaracterization. What they're in the business of doing is repaying the investors who lent them the money to take over those companies. The workers are completely irrelevant in this scheme.

Romney isyou know, the old-school industrialists, like Mitt Romney's father, they were men and women who built communities. They had factory towns. They were very anxious to leave, you know, hard legacies that people could see: hospitals, churches, schoolsyou know, the Hersheys of the world, the Kelloggs. But these new owners have absolutely no allegiance to American workers, American places, American communities. Their only allegiance is to the investors and to themselves. And so, it's not at all uncharacteristic to have these situations where people are pleading for their jobs or they're saying, you know, "We'll tighten our belts, if you just make this concession and keep us." That's irrelevant to the Mitt Romney-slash-Bain Capital-slash-Carlyle Groups of the world. They're entirely about making profits. And if that means shipping jobs to China or eliminating jobs, that's what they're going to do. And that's the new generation of corporate owners in this country.

AMY GOODMAN: Matt, last month, Mitt Romney gave a series of TV interviews defending his role at Bain Capital. This is Mitt Romney speaking to CNN's Jim Acosta.

MITT ROMNEY: There's nothing wrong with being associated with Bain Capital, of course. But the truth is that I left any role at Bain Capital in February of '99. And that's known and said by the people at the firm. It's said by the documents, offering documents that the firm made subsequently about people investing in the firm. And I think anybody who knows that I was out full time running the Olympics would understand that's where I was. I spent three years running the Olympic Games. And after that was over, we worked out our retirement program, our departure official program for Bain Capital, and handed over the shares I had. But there's a difference between being a shareholder, an owner, if you will, and being a person who's running an entity. And I had no role whatsoever in managing Bain Capital after February of 1999.

AMY GOODMAN: That was Mitt Romney on CNN. Matt Taibbi, he's referring to thethat time gap, 1999, when he said he left, to 2000, 2001, 2002. The significance of this?

MATT TAIBBI: You know, I don't think it's terribly important whether he was actively sitting at the helm during that time or whether he was just passively accepting the vast amounts of money that were sent his way as the result of the deals that were concluded at that time. Again, Mitt Romneywell, I'm sorry, Bain Capital took over KB Toys during that disputed time period and made an enormous profit. I think their profit was something like $100 million out of that deal. And Mitt Romney shared in that, in that largesse, even whether he was, you know, actively strategizing or not. You know, the groundwork for deals like that had been laid in the decades before that where he was actively involved in deals like taking over a company like Ampad, which was a very similar deal to the KB deal. So, it's irrelevant to me, and I think it should be irrelevant to everybody, whether he was actually working there or not. He shared in the profits and clearly didn't have a problem with any of those deals.

AMY GOODMAN: Matt Taibbi, you have said that Mitt Romney's fortune would not have been possible without the direct assistance of the U.S. government.

MATT TAIBBI: Yes, there's a tax deduction for all that borrowed money. So, when Mitt Romney or Bain Capital, when they want to go take over a company like KB Toys and they borrow $300 million to do it, and that new debt becomes the debt of KB Toys, when KB pays the debt service, the monthly service on that debt, that service is deductible. And if that were not true, if they did not have that deduction, these deals would not be economically feasible. They wouldn't be possible. I spoke to one former regulator from the SEC, who worked both in the SEC and as an accountant at a Big Four accounting firm, and he reviewed a number of these deals in both a public and private capacity. And he said, without that deduction, he's never seen a deal that would have been economicallya private equity deal that would have been economically feasible. So, this entire business model depends upon a tax break.

AMY GOODMAN: Talk about Romney's role in Bealls Brothers and Palais Royal. And how is Michael Milken involved with this?

MATT TAIBBI: Sure. And just generally speaking, these private equity deals, they're made possible by these sort of get-rich-quick, easy-money schemes that started appearing on Wall Street in the '80s. Again, in the old days, the real power in the American economy wasbelonged to the industrialists, the guys whomen and women who actually made things, because they hadthey were the primary sources of cash and revenue. But in the '80s, we started to develop all these new methods of simply creating money out of thin air. And the first great one in the '80s was Mike Milken's junk bonds. And this ability to conjure instant millions gave people, like the fictional Gordon Gekko, the power to take over, you know, mighty companiesairlines, you know, industrial companieswhereas 10, 15, 20 years ago, somebody who didn't have his own fortune would never have been able to take over those companies.

And that's what happened with this transaction with Bealls. Romney used Mike Milken's junk bonds to take over a couple of department store chains, which he subsequently merged. And even after finding out that Milken was under investigation and would shortly have to go to court to defend himself on fraud charges, Romney pressed ahead with the deal anyway and ended up making, you know, another tidy profit on that deal.

AMY GOODMAN: Matt, finally, what do you feel reporters here at the Republican National Convention should be asking Mitt Romney about his time at Bain?

MATT TAIBBI: Well, I just think that the

AMY GOODMAN: And what his plans are for the presidency?

MATT TAIBBI: Sure. I just think the one unanswered question that reporters just don't ask either of these people isthey're making their entire platform about debt. Paul Ryan, his entire political profile is based on this idea that he's an enemy of debt and a, you know, budget slasher. And Mitt Romney hasagain, he's banked his entire campaign rhetoric on the sort of prairie fire of debt theme. And yet, this is a guy who spentwho made his fortune creating debt. Somehow, this question has not been asked to him. How is that not hypocritical? It hasn't been asked of either of them, and I would like to see the mainstream press at least ask that question. I think it's an ideal debate question that should be asked somewhere down the line.
Wonder what's happened to this...very quiet....
And for more on Stanford see here
Quote:

Romney & Son Investigated for 8 Billion Ponzi Scheme

Posted bypoliticolon May 1, 2012



Mitt Romney and his son Tagg Romney have been implicated in a 8.5 billion dollar ponzi scheme with Wall Street investors Allen Stanford and James M. Davis.
The pair are not cleared including their three partners in a court document verified, ongoing legal proceeding involving selling fraudulent CD's to potential investors.
The statement of fact, includes SIBL, Stanford International Bank, SGC Stanford Capital Management and the associates R. Allen Stanford, ( Allen Stanford) and James M. Davis stole money from investors through fraud. The group bilked investors by diverting funds to their own lifestyles through bonus money, salaries and compensation packages.

The Stanford Financial Group now in receivership headed by Allen Stanford sold investments described as a "well-diversified portfolio". Instead Stanford diverted the money to finance his own lavish lifestyle which include: jet planes, yacht, pleasure crafts, luxury cars, homes, travel on a company credit card.
Allen Stanford, James M. Davis and Laura Pendergest-Holt through SIBL (the bank) Stanford International Bank) hid the fraud by continuing to buy CD's (Certificate of Deposit) and fabricated the performance of their investments. (More court documents: HERE) More information on the legal procedures: HERE A court date was set for January 23, 2012 but according to various reports Allen Stanford is incompetent to stand trial.
Mitt Romney and Son Tagg in 2008 invested in Allen Stanford's ponzi scheme to the tune of 10 million dollars initially in Solamere Capital a seed investment and received 1 million in returns. Tagg Romney joined in to help Solamere Capital located in Charlotte, North Carolina with three other prominent brokers.
Tagg Romney is quoted as saying he was proud of his investment with Solamere now run by former executives of Stanford, " They're friends of ours, they used the Solamere name, we own a piece of them". "We helped them get started"

Despite claims by Tagg and Mitt Romney the investigation is still "ongoing" and the profits from Stanford and Solemere were unreported by Tagg Romney. He also did possess a minority stake in the business with Spencer Zwick and Eric Scheuermann.

Spencer Zwich is Mitt Romney's Chief Fundraiser. Investors in Stanford have not recovered their money, and the assets are still in receivership and frozen until the case is resolved. A total of 8.5 billion dollars is still unaccounted for and the billion dollar Ponzi scheme lays at Mitt Romney's feet for his and his son's investment partners who were all involved.

Curated News
ABC News Politics Romney Camp Dismissive of Ponzi Accusation

"But according to Think Progress, Tagg Romney's account isn't entirely accurate: "According to documents reviewed by ThinkProgess using the Pacer search engine, charges against Tim Bambauer, Deems May, and Brandon Phillips have not been dropped. A recent court filing shows May requesting the court for arbitration instead of going to trial.
ThinkProgress also spoke to the deputy clerk for the federal District Court in Dallas, and confirmed that the three men are still defendants in the lawsuit to recover the Ponzi scheme money."
Huffington Post - Tagg Romney Partnered Family Investment Group with Employees Behind Alleged Ponzi Scheme
Crooks and Liars - Mitt Romney Entwined with Players in Stanford Ponzi Scheme



Read more: http://www.politicolnews.com/romney-son-...z25EUTAkFZ
So, in addition to taking money from death squads and using it to asset strip companies Gordon Gekko-style, now it transpires Mutt was involved in Stanford's intelligence drug & gun laundering cutout and collapsed Ponzi scheme.

Mutt is the living embodiment of Wall Street capitalism, and a religious cultist to boot.

The perfect symbol of the terminally sick C21st American Empire.
Jan Klimkowski Wrote:So, in addition to taking money from death squads and using it to asset strip companies Gordon Gekko-style, now it transpires Mutt was involved in Stanford's intelligence drug & gun laundering cutout and collapsed Ponzi scheme.

Mutt is the living embodiment of Wall Street capitalism, and a religious cultist to boot.

The perfect symbol of the terminally sick C21st American Empire.

Agreed! Sadly, he'll make the 'perfect' Prezident for the current PTB in Amoralika. If he wins, I burn my passport, as I once did my draft card....as very bad as Obama is...this man is MUCH WORSE! Both are but Wizard of Oz facades of various factions...but the Romney faction is not neo-fascist, but old-fascist-fascist! The 'choices' THEY give the Amerikan Sheeple is Reich and FAR Reich - choose one! [or we'll have OUR Supremes or OUR voting machines choose for you!] The whole exercise of an election now is a joke...a very sad joke....and we've already had our 'Reichstag Fire' moment..... the future looks increasingly GRIM and TERMINAL unless the Sheeple become fighting People and take back their country...and FAST!
Sat, September 1, 2012 6:10:08 AM
Peter Dale Scott: Why Americans Must End America's Self-Generating Wars
From: Global Research E-Newsletter <crgeditor@yahoo.com>

Why Americans Must End America's Self-Generating Wars
By Prof. Peter Dale Scott

Global Research, August 30, 2012
Asia-Pacific Journal


URL of this article: http://www.globalresearch.ca/index.php?c...&aid=32572


The most urgent political challenge to the world today is how to prevent the so-called "pax Americana" from progressively degenerating, like the 19th-century so-called "pax Britannica" before it, into major global warfare. I say "so-called," because each "pax," in its final stages, became less and less peaceful, less and less orderly, more and more a naked imposition of belligerent competitive power based on inequality.

To define this prevention of war as an achievable goal may sound pretentious. But the necessary steps to be taken are above all achievable here at home in America. And what is needed is not some radical and untested new policy, but a much-needed realistic reassessment and progressive scaling back of two discredited policies that are themselves new, and demonstrably counterproductive.

I am referring above all to America's so-called War on Terror. American politics, both foreign and domestic, are being increasingly deformed by a war on terrorism that is counter-productive, producing more terrorists every year than eliminates. It is also profoundly dishonest, in that Washington's policies actually contribute to the funding and arming of the jihadists that it nominally opposes.

Above all the War on Terror is a self-generating war, because, as many experts have warned, it produces more terrorists than it eliminates. And it has become inextricably combined with America's earlier self-generating and hopelessly unwinnable war, the so-called War on Drugs.

The two self-generating wars have in effect become one. By launching a War on Drugs in Colombia and Mexico, America has contributed to a parastate of organized terror in Colombia (the so-called AUC, United Self-Defense Forces of Colombia) and an even bloodier reign of terror in Mexico (with 50,000 killed in the last six years).1 By launching a War on Terror in Afghanistan in 2001, America has contributed to a doubling of opium production there, making Afghanistan now the source of 90 percent of the world's heroin and most of the world's hashish.2

Americans should be aware of the overall pattern that drug production repeatedly rises where America intervenes militarily Southeast Asia in the 1950s and 60s, Colombia and Afghanistan since then. (Opium cultivation also increased in Iraq after the 2003 US invasion.)3 And the opposite is also true: where America ceases to intervene militarily, notably in Southeast Asia since the 1970s, drug production declines.4

Both of America's self-generating wars are lucrative to the private interests that lobby for their continuance.5 At the same time, both of these self-generating wars contribute to increasing insecurity and destabilization in America and in the world.

Thus, by a paradoxical dialectic, America's New World Order degenerates progressively into a New World Disorder. And at home the seemingly indomitable national security state, beset by the problems of poverty, income disparity, and drugs, becomes, progressively, a national insecurity state and one gripped by political gridlock.

The purpose of this paper is to argue, using the analogy of British errors in the late 19th century, for a progressive return to a more stable and just international order, by a series of concrete steps, some of them incremental. Using the decline of Britain as an example, I hope to demonstrate that the solution cannot be expected from the current party political system, but must come from people outside that system.

The Follies of the Late 19th Century Pax Britannica

The final errors of British imperial leaders are particularly instructive for our predicament today. In both cases power in excess of defense needs led to more and more unjust, and frequently counter-productive, expansions of influence. My account in the following paragraphs is one-sidedly negative, ignoring positive achievements abroad in the areas of health and education. But the consolidation of British power led to the impoverishment abroad of previously wealthy countries like India, and also of British workers at home.6

A main reason for the latter was, as Kevin Phillips has demonstrated, the increasing outward flight of British investment capital and productive capacity:

Thus did Britain slip into circumstances akin to those of the United States in the 1980s and most of the 1990s slumping nonsupervisory wage levels and declining basic industries on one hand, and at the other end of the scale a heyday for banks, financial services, and securities, a sharp rise in the portion of income coming from investment, and a stunning percentage of income and assets going to the top 1 percent.7

The dangers of increasing income and wealth disparity in Britain were easily recognized at the time, including by the young politician Winston Churchill.8 But only a few noticed the penetrating analysis by John A. Hobson in his book Imperialism (1902), that an untrammeled search for profit that directed capital abroad created a demand for an oversized defense establishment to protect it, leading in turn to wider and wilder use abroad of Britain's armies. Hobson defined the imperialism of his time, which he dated from about 1870, as "a debasement ... of genuine nationalism, by attempts to overflow its natural banks and absorb the near or distant territory of reluctant and inassimilable peoples."9

The earlier British empire could be said by a British historian in 1883 to have been "acquired in a fit of absence of mind," but this could not be said of Cecil Rhodes's advances in Africa. Maldistribution of wealth was an initial cause of British expansion, and also an inevitable consequence of it. Much of Hobson's book attacked western exploitation of the Third World, especially in Africa and Asia.10 He thus echoed Thucydides description of

how Athens was undone by the overreaching greed (pleonexia) of its unnecessary Sicilian expedition, a folly presaging America's follies in Vietnam and Iraq [and Britain's in Afghanistan and the Transvaal]. Thucydides attributed the rise of this folly to the rapid change in Athens after the death of Pericles, and in particular to the rise of a rapacious oligarchy.11

Both the apogee of the British empire and the start of its decline can be dated to the 1850s. In that decade London instituted direct control over India, displacing the nakedly exploitative East India Company.




The British empire during the Victorian Era

But in the same decade Britain sided with France's nakedly expansionist Napoleon III (and the decadent Ottoman empire) in his ambitions against Russia's status in the Holy Land. Although Britain was victorious in that war, historians have since judged that victory to be a chief cause of the breakdown in the balance of power that had prevailed in Europe since the Congress of Vienna in 1815. Thus the legacy of the war for Britain was a more modernized and efficient army, together with a more insecure and unstable world. (Historians may in future come to judge that NATO's Libyan venture of 2011 played a similar role in ending the era of U.S.-Russian détente.)

The Crimean War also saw the emergence of perhaps the world's first significant antiwar movement in Britain, even though that movement is often remembered chiefly for its role in ending the active political roles of its main leaders, John Cobden and John Bright.12 In the short run, Britain's governments and leaders moved to the right, leading (for example) to Gladstone's bombardment of Alexandria in 1882 to recover the debts owed by the Egyptians to private British investors.

Reading Hobson's economic analysis in the light of Thucydides, we can focus on the moral factor of emergent hubristic greed (pleonexia) fostered by unrestrained British power. In 1886 the discovery of colossal gold deposits in the nominally independent Boer Republic of the Transvaal attracted the attention of Cecil Rhodes, already wealthy from South African diamonds and mining concessions he had acquired by deceit in Matabeleland. Rhodes now saw an opportunity to acquire goldfields in the Transvaal as well, by overthrowing the Boer government with the support of the uitlanders or foreigners who
had flocked to the Transvaal.




French caricature of Rhodes, showing him trapped in Kimberley during the Boer War, seen emerging from tower clutching papers with champagne bottle behind his collar.

In 1895, after direct plotting with the uitlanders failed, Rhodes, in his capacity as Prime Minister of the British Cape Colony, sponsored an invasion of Transvaal with the so-called Jameson Raid, a mixed band of Mounted Police and mercenary volunteers. The raid was not only a failure, but a scandal: Rhodes was forced to resign as Prime Minister and his brother went to jail. The details of the Jameson raid and resulting Boer War are too complex to be recounted here; but the end result was that after the Boer War the goldfields fell largely into the hands of Rhodes.

The next step in Rhodes' well-funded expansiveness was his vision of a Cape-to-Cairo railway through colonies all controlled by Britain. As we shall see in a moment, this vision provoked a competing French vision of an east-east railway, leading to the first of a series of crises from imperial competition that progressively escalated towards World War I.

According to Carroll Quigley, Rhodes also founded a secret society for the further expansion of the British empire, an offshoot of which was the Round Table which in turn generated the Royal Institute of International Affairs. In 1917 some members of the American Round Table also helped found the RIIA's sister organization, the New York-based Council on Foreign Relations (CFR).13

Some have found Quigley's argument overstated. But whether one agrees with him or not, one can see a continuity between the expansionist acquisitiveness of Rhodes in Africa in the 1890s and the post-war acquisitiveness of UK and American oil corporations in the CFR-backed coups in Iran (1953), Indonesia (1965), and Cambodia (1970).14 In all these cases private acquisitive greed (albeit of corporations rather than an individual) led to state violence and/or war as a matter of public policy. And the outcomes enriched and strengthened private corporations in what I have called the American war machine, thus rendering less weak those institutions representing the public interest.

My main point is that the progressive build-up of the British navy and armies provoked, predictably, a responsive build-up from other powers, particularly France and Germany; and this ultimately made World War I (and its sequel, World War II) all but inevitable. In retrospect it is easy to see that the arms build-up contributed, disastrously, not to security but to more and more perilous insecurity, dangerous not just to the imperial powers themselves but to the world. Because American global dominance surpasses what Britain's ever was, we have not hitherto seen a similar backlash in competitiveness from other states; but we are beginning to see a backlash build-up (or what the media call terrorism) from increasingly oppressed peoples.

In retrospect one can see also that the progressive impoverishment of India and other colonies guaranteed that the empire would become progressively more unstable, and doomed in its last days to be shut down. This was not obvious at the time; and comparatively few Britons in the 19th century, other than Hobson, challenged the political decisions that led from the Long Depression of the 1870s to the European "Scramble for Africa," and the related arms race.15 Yet when we look back today on these decisions, and the absurd but ominous crises they led to in distant corners of Africa like Fashoda (1898) and Agadir (1911), we have to marvel at the short-sighted and narrow stupidity of the so-called statesmen of that era.16

We also note how international crises could be initially provoked by very small, uncontrolled, bureaucratic cabals. The Fashoda incident in South Sudan involved a small troupe of 132 French officers and soldiers who had trekked for 14 months, in vain hopes of establishing a west-to-east French presence across Africa (thus breaching Rhodes' vision of a north-to-south British presence.17 The 1911 provocative arrival (in the so-called "Panther leap" or Panzersprung) of the German gunboat Panzer at Agadir in Morocco was the foolish brainchild of a Deputy Secretary of Foreign Affairs; its chief result was the cementing of the Anglo-French Entente Cordiale, thus contributing to Germany's defeat in World War I.18

The Pax Americana in the Light of the Pax Britannica


The world is not condemned to repeat this tragedy under the Pax Americana. Global interdependence and above all communications have greatly improved. We possess the knowledge, the abilities, and the incentives to understand historical processes more skillfully than before. Above all it is increasingly evident to a global minority that American hypermilitarism, in the name of security, is becoming much like British hypermilitarism in the 19th century -- a threat to everyone's security, including America's, by inducing and increasingly seeking wider and wider wars.


There is one consolation for Americans in this increasing global disequilibrium. As the causes for global insecurity become more and more located in our own country, so also do the remedies. More than their British predecessors, Americans have an opportunity that other peoples do not, to diminish global tensions and move towards a more equitable global regimen. Of course one cannot predict that such a restoration can be achieved. But the disastrous end of the Pax Britannica, and the increasingly heavy burdens borne by Americans, suggest that it is necessary. For American unilateral expansionism, like Britain's before it, is now contributing to a breakdown of the understandings and international legal arrangements (notably those of the UN Charter) that for some decades contributed to relative stability.

It needs to be stated clearly that the American arms build-up today is the leading cause in the world of a global arms build-up one that is ominously reminiscent of the arms race, fuelled by the British armaments industry, that led to the 1911 Agadir incident and soon after to World War I. But today's arms build-up cannot be called an arms race: it is so dominated by America (and its NATO allies, required by NATO policy to have compatible armaments) that the responsive arms sales of Russia and China are small by comparison:

In 2010 ...the United States maintained its dominating position in the global arms bazaar, signing $21.3 billion in worldwide arms sales, or 52.7 percent of all weapons deals, ....

Russia was second with $7.8 billion in arms sales in 2010, or 19.3 percent of the market, compared with $12.8 billion in 2009. Following the United States and Russia in sales were France, Britain, China, Germany and Italy.19

A year later America's total dominance of overseas arms sales had more than doubled, to represent 79 percent of global arms sales:


Overseas weapons sales by the United States totaled $66.3 billion last year, or more than three-quarters of the global arms market, valued at $85.3 billion in 2011. Russia was a distant second, with $4.8 billion in deals.20

And what is NATO's primary activity today requiring arms? Not defense against Russia, but support for America in its self-generating War on Terror, in Afghanistan as once in Iraq. The War on Terror should be seen for what it really is: a pretext for maintaining a dangerously oversized U.S. military, in an increasingly unstable exercise of unjust power.

In other words America is by far the chief country flooding the world with armaments today. It is imperative that Americans force a reassessment of this incentive to global poverty and insecurity. We need to recall Eisenhower's famous warning in 1953 that "Every gun that is made, every warship launched, every rocket fired signifies, is in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed."21

It is worth recalling that President Kennedy, in his American University speech of June 10, 1963, called for a vision of peace that would explicitly not be "a Pax Americana enforced on the world by American weapons of war."22 His vision was wise, if short-lived. After sixty years of the American security system the so-called "Pax Americana" America itself is ever more caught up in an increasingly paranoid condition of psychological insecurity. Traditional features of American culture such as respect for habeas corpus and international law are being jettisoned at home and abroad because of a so-called terrorist threat that is largely of America's own making.

The Covert US-Saudi Alliance and the War on Terror

Of the $66.3 billion in U.S. overseas arms sales in 2011, over half, or $33.4 billion, consisted of sales to Saudi Arabia. This included dozens of Apache and Black Hawk helicopters, weapons described by the New York Times, as needed for defense against Iran, but more suitable for Saudi Arabia's increasing involvement in aggressive asymmetric wars (e.g. in Syria).23


These Saudi arms sales are not incidental; they reflect an agreement between the two countries to offset the flow of US dollars to pay for Saudi oil. During the oil price hikes of 1971 and 1973 Nixon and Kissinger negotiated a deal with both Saudi Arabia and Iran to pay significantly higher prices for crude, on the understanding that the two countries would then recycle the petrodollars by various means, prominently arms deals.24

The wealth of the two nations, America and Saudi Arabia, has become ever more interdependent. This is ironic. In the words of a leaked US cable, "Saudi donors remain the chief financiers of Sunni militant groups like Al Qaeda."25 The Rabita or Muslim World League, launched and largely funded by the Saudi royal family, has provided an international meeting place for international Salafists including some al Qaeda leaders.26




Obama with Saudi King Abdullah, 2010

In short, the wealth generated by the Saudi-American relationship is funding both the al Qaeda-type jihadists of the world today and America's self-generating war against them. The result is an incremental militarization of the world abroad and America at home, as new warfronts in the so-called War on Terror emerge, predictably, in previously peaceful areas like Mali.

The media tend to present the "War on Terror" as a conflict between lawful governments and fanatical peace-hating Islamist fundamentalists. In fact in most countries, America and Britain not excepted, there is a long history of occasional collaboration with the very forces which at other times they oppose.

Today America's foreign policies and above all covert operations are increasingly chaotic. In some countries, notably Afghanistan, the US is fighting jihadists that the CIA supported in the 1980s, and that are still supported today by our nominal allies Saudi Arabia and Pakistan. In some countries, notably Libya, we have provided protection and indirect support to the same kind of jihadis. In some countries, notably Kosovo, we have helped bring these jihadis to power.27

One country where American authorities conceded its clients were supporting jihadis is Yemen. As Christopher Boucek reported some years ago to the Carnegie Endowment of International Peace,

Islamist extremism in Yemen is the result of a long and complicated set of developments. A large number of Yemeni nationals participated in the anti-Soviet jihad in Afghanistan during the 1980s. After the Soviet occupation ended, the Yemeni government encouraged its citizens to return and also permitted foreign veterans to settle in Yemen. Many of these Arab Afghans were co-opted by the regime and integrated into the state's various security apparatuses. Such co-optation was also used with individuals detained by the Yemeni government after the September 11 terrorist attacks. As early as 1993, the U.S. State Department noted in a now-declassified intelligence report that Yemen was becoming an important stop for many fighters leaving Afghanistan. The report also maintained that the Yemeni government was either unwilling or unable to curb their activities. Islamism and Islamist activists were used by the regime throughout the 1980s and 1990s to suppress domestic opponents, and during the 1994 civil war Islamists fought against southern forces.28

In March 2011 the same scholar, Christopher Boucek, observed that America's war on terror had resulted in the propping up of an unpopular government, thus helping it avoid needed reforms:

Well, I think for -- our policy on Yemen has been terrorism -- has been terrorism and security and al-Qaida in the Arabian Peninsula, to the exclusion of almost everything else. I think, despite what -- what people in the administration say, we have been focused on terrorism. We have not been focused on the systemic challenges that Yemen faces: unemployment, governance abuses, corruption. I think these are the things that will bring down the state. It's not AQAP..... everyone in Yemen sees that we're supporting the regimes, at the expense of the Yemeni people.29

Stated more bluntly: One major reason why Yemen (like other countries) remains backward and a fertile ground for jihadi terrorism is America's war on terror itself.

America's is not the only foreign security policy contributing to the crisis in Yemen. Saudi Arabia has had a stake in reinforcing the jihadi influence in republican Yemen, ever since the Saudi royal family in the 1960s used conservative hill tribes in northern Yemen to repel an attack on southern Saudi Arabia by the Nasser-backed republican Yemeni government.30

These machinations of governments and their intelligence agencies can create conditions of impenetrable obscurity. For example, as Sen. John Kerry has reported, one of the top leaders of Al Qaeda in the Arab Peninsula (AQAP) "is a Saudi citizen who was repatriated to Saudi Arabia from Guantanamo in November 2007 and returned to militancy [in Yemen] after completing a rehabilitation course in Saudi Arabia."31

Like other nations, America is no stranger to the habit of making deals with al Qaeda jihadis, to aid them to fight abroad in areas of mutual interest -- such as Bosnia in exchange for not acting as terrorists at home. This practice clearly contributed to the World Trade Center bombing of 1993, when at least two of the bombers had been protected from arrest because of their participation in a Brooklyn-based program preparing Islamists for Bosnia. In 1994 the FBI secured the release in Canada of a U.S.-Al Qaeda double agent at the Brooklyn center, Ali Mohamed, who promptly went on to Kenya where (according to the 9/11 Commission Report) he "led" the organizers of the 1998 attack on the U.S. Embassy.32

Saudi Arabian Support for Terrorists


Perhaps the foremost practitioner of this game is Saudi Arabia, which has not only exported jihadis to all parts of the globe but (as previously noted) has financed them, sometimes in alliance with the United States. A New York Times article in 2010 about leaked diplomatic cables quoted from one of the diplomatic dispatches: "Saudi donors remain the chief financiers of Sunni militant groups like Al Qaeda."33

Back in 2007 the London Sunday Times also reported that

wealthy Saudis remain the chief financiers of worldwide terror networks. 'If I could somehow snap my fingers and cut off the funding from one country, it would be Saudi Arabia,' said Stuart Levey, the US Treasury official in charge of tracking terror financing.34

Similar reports of Saudi funding have come from authorities in Iraq, Pakistan, and Afghanistan, according to Rachel Ehrenfeld:

Pakistani police reported in 2009 that Saudi Arabia's charities continue to fund al Qaeda, the Taliban and Pakistan's Lashkar-e-Tayyiba. The report said the Saudis gave $15 million to jihadists, including those responsible for suicide attacks in Pakistan and the death of former Pakistani Prime Minister Benazir Bhutto.

In May 2010, Buratha News Agency, an independent news source in Iraq, reported on a leaked Saudi intelligence document showing continued Saudi governmental support for al Qaeda in Iraq in the form of cash and weapons.... An article in the May 31, 2010, edition of The Sunday Times in London revealed that the Afghan financial intelligence unit, FinTRACA, reported that since 2006, at least $1.5 billion from Saudi Arabia was smuggled into Afghanistan, headed most probably to the Taliban."35

However the Saudi backing of al Qaeda was not, according to the Times, limited to funds:

In recent months, Saudi religious scholars have caused consternation in Iraq and Iran by issuing fatwas calling for the destruction of the great Shi'ite shrines in Najaf and Karbala in Iraq, some of which have already been bombed. And while prominent members of the ruling al-Saud dynasty regularly express their abhorrence of terrorism, leading figures within the kingdom who advocate extremism are tolerated.

Sheikh Saleh al-Luhaidan, the chief justice, who oversees terrorist trials, was recorded on tape in a mosque in 2004, encouraging young men to fight in Iraq. "Entering Iraq has become risky now," he cautioned. "It requires avoiding those evil satellites and those drone aircraft, which own every corner of the skies over Iraq. If someone knows that he is capable of entering Iraq in order to join the fight, and if his intention is to raise up the word of God, then he is free to do so."36


The Example of Mali

Something similar is happening today in Africa, where Saudi Wahhabist fundamentalism "has grown in recent years in Mali with young imams returning from studying on the Arab peninsula."37 The world

press, including Al Jazeera, has reported on the destruction of historic tombs by local jihadis:

Fighters from the al-Qaeda-linked group Ansar Dine, controlling northern Mali, have destroyed two tombs at the ancient Djingareyber mud mosque in Timbuktu, an endangered World Heritage site, witnesses say.... The new destruction comes after attacks last week on other historic and religious landmarks in Timbuktu that UNESCO called "wanton destruction". Ansar Dine has declared the ancient Muslim shrines "haram", or forbidden in Islam. The Djingareyber mosque is one of the most important in Timbuktu and was one of the fabled city's main attractions before the region became a no-go area for tourists. Ansar Dine has vowed to continue destroying all the shrines "without exception" amid an outpouring of grief and outrage both at home and abroad.38




Djingareyber

But most of these stories (including al Jazeera's) have failed to point out that the destruction of tombs has long been a Wahhabi practice not only endorsed but carried out by the Saudi government:

In 1801 and 1802, the Saudi Wahhabis under Abdul Aziz ibn Muhammad ibn Saud attacked and captured the holy Muslim cities of Karbala and Najaf in Iraq, massacred parts of the Muslim population and destroyed the tombs of Husayn ibn Ali who is the grandson of Muhammad, and son of Ali (Ali bin Abu Talib), the son-in-law of Muhammad). In 1803 and 1804 the Saudis captured Makkah and Medina and destroyed historical monuments and various holy Muslim sites and shrines, such as the shrine built over the tomb of Fatimah, the daughter of Muhammad, and even intended to destroy the grave of Muhammad himself as idolatrous. In 1998 the Saudis bulldozed and poured gasoline over the grave of Aminah bint Wahb, the mother of Muhammad, causing resentment throughout the Muslim World.39

The Chance of Peace and Insecurity, the Chief Impediment to It

Today one must distinguish between the Saudi Arabian Kingdom and the Wahhabism promoted by senior Saudi clerics and some members of the Saudi Royal Family. King Abdullah in particular has reached out to other religions, visiting the Vatican in 2007 and encouraging an interfaith conference with Christian and Jewish leaders, which took place in 2008.

In 2002 Abdullah, as Crown Prince, also submitted a proposal for Arab-Israeli peace to a summit of Arab League nations. The plan, which has been endorsed by Arab League governments on many occasions, called for normalizing relations between the entire Arab region and Israel, in exchange for a complete withdrawal from the occupied territories (including East Jerusalem) and a "just settlement" of the Palestinian refugee crisis based on UN Resolution 194. It was spurned in 2002 by Israel's Sharon and also by Bush and Cheney, who at the time were determined to go to war in Iraq. But as David Ottaway of the Woodrow Wilson Center has noted,

Abdullah's 2002 peace plan remains an intriguing possible basis for U.S.-Saudi cooperation on the Israeli-Palestinian issue. Abdullah's proposal was endorsed by the entire Arab League at its 2002 summit; Israeli President Shimon Peres and Olmert both referred to it favorably; and Barack Obama, who chose the Saudi-owned al Arabiya television station for his first interview after taking office, praised Abdullah for his "great courage" in making the peace proposal. However, the presumed new Israeli prime minister, Benjamin Netanyahu, has strongly opposed the Saudi plan, particularly the idea that East Jerusalem should be the capital of a Palestinian state.40

The plan has no traction in 2012, with Israel hinting at action against Iran and America paralyzed by an election year. However Israeli President Shimon Peres welcomed the initiative in 2009; and George Mitchell, President Obama's special envoy to the Middle East, announced in the same year that the Obama administration intended to "incorporate" the initiative into its Middle East policy.41

These voices of support indicate that a peace agreement in the Middle East is theoretically possible, but by no means do they make it likely. Any peace settlement would require trust, and trust is difficult when all parties are beset by a sense of insecurity about their nations' futures. Pro-Zionist commentators like Charles Krauthammer recall that for thirty years before Camp David, the destruction of Israel was "the unanimous goal of the Arab League."42 Many Palestinians, and most of Hamas, fear that a peace settlement would leave unsatisfied, and indeed extinguish, their demands for a just settlement of grievances.

Insecurity is particularly widespread in the Middle East because of the widespread resentment there against injustice, which insecurity both grows from and propagates. Much of the global status quo has its origins in injustice; but the injustice in the Middle East, on all sides, is extreme, recent, and ongoing. I say this only to offer this advice to Americans: to keep in mind that the issues of security and justice cannot be separated.

Above all, one thing called for is compassion. We as Americans must understand that both Israelis and Palestinians live in conditions not remote from a state of war; yet both have reason to fear that a peace settlement might leave them even worse off than in their present uncomfortable situation. Too many innocent civilians have been killed in the Middle East. American actions should not increase that number.

This sense of insecurity, the major impediment to peace, is not confined to the Middle East. Since 9/11 Americans have experienced the anguish of insecurity, and this is the major reason why there is so little American resistance to the manifest follies of the Bush-Cheney-Obama War on Terror.

The War on Terror promises to make America more secure, yet in fact continues to guarantee the proliferation of America's terrorist enemies. It also continues to disseminate the War into new battlefields, notably Pakistan and Yemen. By thus creating its own enemies, the War on Terror, now solidly entrenched in bureaucratic inertia, seems likely to continue unabated. In this it is much like the equally ill-considered War on Drugs, dedicated to maintaining the high costs and profits that attract new traffickers.

Above all this contributes to Islamic insecurity as well, causing more and more Muslims to deal with the fear that civilians, not just jihadi terrorists, will be the victims of drone attacks. Insecurity in the Middle East is the major obstacle to peace there. Palestinians live in daily fear of oppression by West Bank settlers and retaliation by the Israeli state. The Israelis live in constant fear of hostile neighbors. So does the Saudi royal family. Insecurity and instability have increased together since 9/11 and the War on Terror.

Middle Eastern insecurity replicates itself on a wider and wider scale. Israeli fear of Iran and Hizbollah is matched by Iranian fear of Israeli threats of massive attacks on its nuclear installations. And recently former U.S. hawks like Zbigniew Brzezinski have warned that an Israeli attack on Iran could lead to a longer war that spreads elsewhere.43

Above all, in my opinion, Americans should fear the insecurity spread by

drone attacks. If not soon stopped, America's drone attacks threaten to do what America's atomic attacks did in 1945: lead to a world in which many powers, not just one, possess this weapon and may possibly use it. In this case the most likely new target by far would be the United States.

How long will it be, I wonder, before a prevailable force of Americans will recognize the predictable course of this self-generating war, and mobilize against it?

What Is to Be Done?

This paper has argued, using the analogy of British errors in the late 19th century, for a progressive return to a more stable and just international order, by a series of concrete steps, some of them incremental:

1) a progressive reduction of America's bloated military and intelligence budgets, over and above that already contemplated for financial reasons.

2) a progressive phase-out of the violent aspects of the so-called war on terror, while retaining traditional law enforcement means for dealing with terrorists

3) Much of the recent intensification of American militarism can be traced to the "state of emergency" proclaimed on September 14, 2001, and renewed annually by American presidents ever since. We need an immediate termination of this state of emergency, and a reassessment of all the so-called "continuity of government" (COG) measures associated with it warrantless surveillance, warrantless detention, and the militarization of domestic American security.44

4) a return to strategies for dealing with the problem of terrorists that rely primarily on civilian policing and intelligence.

Forty years ago I would have appealed to Congress to take these steps to defuse the state of paranoia we are living under. Today I have come to see that Congress itself is dominated by the powers that profit from what I have called America's global war machine. The so-called "statesmen" of America are as dedicated to the preservation of American dominance as were their British predecessors.

But to say this is not to despair of America's ability to change direction. We should keep in mind that four decades ago domestic political protest played a critical role in helping to end an unjustified war in Vietnam. It is true that in 2003 similar protests involving one million Americans failed to impede America's entry into an unjustified war in Iraq. Nevertheless, the large number of protesters, assembled under relatively short notice, was impressive. The question is whether protesters can adapt their tactics to new realities and mount a sustained and effective campaign.

Under the guise of COG planning, the American war machine has been preparing for forty years to neutralize street antiwar protests. Taking cognizance of this, and using the folly of British hypermilitarism as an example, today's antiwar movement must learn how to apply coordinated pressure within American institutions not just by "occupying" the streets with the aid of the homeless. It is not enough simply to denounce, as did Churchill in 1908, the increasing disparity of wealth between rich and poor. One must go beyond this to see the origins of this disparity in dysfunctional institutional arrangements that are corrigible. And one of the chief of these is the so-called War on Terror.

No one can predict the success of such a movement. But I believe that global developments will persuade more and more Americans that it is necessary. It should appeal to a broad spectrum of the American electorate, from the viewers of Democracy Now on the left to the libertarian followers of Murray Rothbard, Ron Paul, and Lew Rockwell on the right.

And I believe also that a well-coordinated nonviolent antiwar minority of from two to five million, acting with the resources of truth and common sense on their side can win. America's core political institutions at present are both dysfunctional and unpopular: Congress in particular has an approval rating of about ten percent. A more serious problem is the determined resistance of corporate and personal wealth to reasonable reforms; but the more nakedly wealth shows its undemocratic influence, the more evident will become the need to curb its abuses. Currently wealth has targeted for removal Congress members who have been guilty of compromise to solve government problems. Surely there is an American majority out there to be mobilized for a return to common sense.

Clearly new strategies and techniques of protest will be needed. It is not the purpose here to define them, but future protests or cyberprotests will predictably make more skillful use of the Internet.

I repeat that one cannot be confident of victory in the struggle for sanity against special interests and ignorant ideologues. But with the increasing danger of a calamitous international conflict, the need to mobilize for sanity is increasingly clear. The study of history is one of the most effective ways to avoid repeating it.

Are these hopes for protest mere wishful thinking? Very possibly. But, wishful or not, I consider them to be necessary.

Peter Dale Scott, a former Canadian diplomat and English Professor at the University of California, Berkeley, is the author of Drugs Oil and War, The Road to 9/11, and The War Conspiracy: JFK, 9/11, and the Deep Politics of War. His most recent book is American War Machine: Deep Politics, the CIA Global Drug Connection and the Road to Afghanistan. His website, which contains a wealth of his writings, is here.

Recommended citation: Peter Dale Scott, "Why Americans Must End America's Self-Generating Wars," The Asia-Pacific Journal, Vol 10, Issue 36, No. 2, September 3, 2012.

Notes

1 Oliver Villar and Drew Cottle, Cocaine, Death Squads, and the War on Terror: U.S. Imperialism and Class Struggle in Colombia (New York: Monthly Review Press, 2011); Peter Watt and Roberto Zepeda, Drug War Mexico: Politics, Neoliberalism and Violence in the New Narcoeconomy (London: Zed Books, 2012); Mark Karlin, "How the Militarized War on Drugs in Latin America Benefits Transnational Corporations and Undermines Democracy," Truthout, August 5, 2012.

2 Peter Dale Scott, American War Machine: Deep Politics, the CIA Global Drug Connection, and the Road to Afghanistan (Lanham, MD: Rowman & Littlefield, 2010), 217-37.

3 Patrick Cockburn, "Opium: Iraq's deadly new export," Independent (London), May 23, 2007.

4 Scott, American War Machine, 134-40.

5 See Mark Karlin, "How the Militarized War on Drugs in Latin America Benefits Transnational Corporations and Undermines Democracy," Truthout, August 5, 2012.

6 Sekhara Bandyopadhyaya, From Plassey to Partition: A History of Modern India (New Delhi: Orient Longman, 2004), 231.

7 Kevin Phillips, Wealth and Democracy: A Political History of the American Rich (New York: Broadway Books, 2002), 185.

8 "The seed of imperial ruin and national decay the unnatural gap between the rich and the poor.... the swift increase of vulgar, jobless luxury are the enemies of Britain" (Winston Churchill, quoted in Phillips, Wealth and Democracy, 171).

9 John A. Hobson, Imperialism (London: Allen and Unwin, 1902; reprint, 1948), 6. The book's chief impact in Britain at the time was to permanently stunt Hobson's career as an economist.

10 Hobson, Imperialism, 12. Cf. Arthur M. Eckstein, "Is There a 'HobsonLenin Thesis' on Late Nineteenth-Century Colonial Expansion?" Economic History Review, May 1991, 297318, especially 298-300.

11 Peter Dale Scott, "The Doomsday Project, Deep Events, and the Shrinking of American Democracy," Asia-Pacific Journal: Japan Focus, January 21, 2011, http://japanfocus.org/-Peter_Dale-Scott/3476.

12 See Ralph Raico, "Introduction," Great Wars and Great Leaders: A Libertarian Rebuttal (Auburn, AL: Mises Institute, 2010), http://mises.org/daily/5088/Neither-the-...Were-Great.

13 Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (G,S,G, & Associates, 1975); Carroll Quigley, The Anglo-American Establishment (GSG Associates publishers, 1981), http://www.thirdworldtraveler.com/New_Wo...Estab.html. Discussion in Laurence H. Shoup and William Minter, The Imperial Brain Trust: The Council on Foreign Relations & United States Foreign Policy (New York: Monthly Review Press, 1977), 12-14; Michael Parenti, Contrary Notions: The Michael Parenti Reader , 332.

14 For the little-noticed interest of oil companies in Cambodian offshore oilfields, see Peter Dale Scott, The War Conspiracy: JFK, 9/11, and the Deep Politics of War (Ipswich, MA: Mary Ferrell Foundation, 2008), 216-37.

15 Thomas Pakenham, Scramble for Africa: The White Man's Conquest of the Dark Continent from 1876-1912 (New York: Random House, 1991).

16 See the various books by Barbara Tuchman, notably The March of Folly: From Troy to Vietnam (New York: Knopf, 1984).

17 Pakenham, Scramble for Africa.

18 E. Oncken, Panzersprung nach Agadir. Die deutsche Politik wtihrend der zweiten Marokkokrise 1911 (Dilsseldorf, 1981). Panzersprung in German has come to be a metaphor for any gratuitous exhibition of gunboat diplomacy.

19 Thom Shanker, "Global Arms Sales Dropped Sharply in 2010, Study Finds," New York Times, September 23, 2011.

20 Thom Shanker, "U.S. Arms Sales Make Up Most of Global Market," New York Times, August 27, 2012.

21 Stephen Ambrose, Eisenhower: Soldier and President (New York: Simon and Schuster, 1990), 325,

22 Robert Dallek, An unfinished life: John F. Kennedy, 1917-1963 (Boston: Little, Brown and Co., 2003.). 50.

23 Shanker, "U.S. Arms Sales Make Up Most of Global Market," New York Times, August 27, 2012.

24 Scott, The Road to 9/11, 33-37.

25 Scott Shane and Andrew W. Lehren, "Leaked Cables Offer Raw Look at U.S. Diplomacy," New York Times, Hovember 29, 2010. Cf. Nick Fielding and Sarah Baxter, "Saudi Arabia is hub of world terror: The desert kingdom supplies the cash and the killers," Times (London), 2007, http://www.jihadwatch.org/2007/11/saudi-...llers.html.

26 The United Nations has listed the branch offices in Indonesia and the Philippines of the Rabita's affiliate, the International Islamic Relief Organization, as belonging to or associated with al-Qaeda.

27 See Peter Dale Scott, "Bosnia, Kosovo, and Now Libya: The Human Costs of Washington's On-Going Collusion with Terrorists," Asian-Pacific Journal: Japan Focus, July 29, 2011; also William Blum, "The United States and Its Comrade-in-Arms, Al Qaeda," Counterpunch, August 13, 2012, http://www.counterpunch.org/2012/08/13/t...-gone-mad/.

28 Christopher Boucek, "Yemen: Avoiding a Downward Spiral," Carnegie Endowment for International Peace, 12.

29 "In Yemen, 'Too Many Guns and Too Many Grievances' as President Clings to Power," PBS Newshour, March 21, 2011, http://www.pbs.org/newshour/bb/world/jan...03-21.html.

30 Robert Lacey, The Kingdom: Arabia and the House of Sa'ud (New York: Avon, 1981), 346-47, 361.

31 John Kerry, Al Qaeda in Yemen and Somalia: A Ticking Time Bomb: a Report to the Committee on Foreign Relations (Washington: U.S. G.P.O., 2010), 10.

32 Scott, The Road to 9/11, 152-56.

33 Scott Shane and Andrew W. Lehren, "Leaked Cables Offer Raw Look at U.S. Diplomacy," New York Times, November 29, 2010.

34 Nick Fielding and Sarah Baxter, "Saudi Arabia is hub of world terror," Sunday Times (London), November 4, 2007: "Extremist clerics provide a stream of recruits to some of the world's nastiest trouble spots. An analysis by NBC News suggested that the Saudis make up 55% of foreign fighters in Iraq. They are also among the most uncompromising and militant."

35 Rachel Ehrenfeld, "Al-Qaeda's Source of Funding from Drugs and Extortion Little Affected by bin Laden's Death," Cutting Edge, May 9, 2011, http://www.thecuttingedgenews.com/index....e=Security.

36 Sunday Times (London), November 4, 2007.

37 BBC, July 17, 2012, http://www.bbc.co.uk/news/world-africa-18870130.

38 Al Jazeera, July 19, 2012, http://m.aljazeera.com/SE/201271012301347496.

39 The Weekly Standard, May 30, 2005, http://www.weeklystandard.com/Content/Pu...2eforh.asp. Cf. Newsweek, May 30, 2005. Adapted from Hilmi Isik Advice for the Muslim, (Istanbul: Hakikat Kitabevi).

40 David Ottaway, "The King and Us: U.S.-Saudi Relations in the Wake of 9/11, Foreign Affairs, May-June 2009.

41 Barak Ravid, "U.S. Envoy: Arab Peace Initiative Will Be Part of Obama Policy," Haaretz, April 5, 2009. David Ottaway, "The King and Us Subtitle: U.S.-Saudi Relations in the Wake of 9/11, Foreign Affairs, May-June 2009.

42 Charles Krauthammer, "At Last, Zion: Israel and the Fate of the Jews," Weekly Standard, May 11, 1998.

43 "We have no idea how such a wald r wouend," [Brzezinski] said. "Iran has military capabilities, it could retaliate by destabilizing Iraq" (Salon, March 14, 2012).

44 See Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America (Berkeley: University of California Press, 2007), 183-242; Peter Dale Scott, "Is the State of Emergency Superseding our Constitution? Continuity of Government Planning, War and American Society," Asia-Pacific Journal: Japan Focus, November 28, 2010, http:/1/japanfocus.org/-Peter_Dale-Scott/3448.

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Adele
Great and frightening article by PDS!
A typically razor sharp article from PDS, cutting through the nonsense and articulating deep political truths.

Quote:Above all the War on Terror is a self-generating war, because, as many experts have warned, it produces more terrorists than it eliminates. And it has become inextricably combined with America's earlier self-generating and hopelessly unwinnable war, the so-called War on Drugs.

The two self-generating wars have in effect become one. By launching a War on Drugs in Colombia and Mexico, America has contributed to a parastate of organized terror in Colombia (the so-called AUC, United Self-Defense Forces of Colombia) and an even bloodier reign of terror in Mexico (with 50,000 killed in the last six years).1 By launching a War on Terror in Afghanistan in 2001, America has contributed to a doubling of opium production there, making Afghanistan now the source of 90 percent of the world's heroin and most of the world's hashish.2

Americans should be aware of the overall pattern that drug production repeatedly rises where America intervenes militarily Southeast Asia in the 1950s and 60s, Colombia and Afghanistan since then. (Opium cultivation also increased in Iraq after the 2003 US invasion.)3 And the opposite is also true: where America ceases to intervene militarily, notably in Southeast Asia since the 1970s, drug production declines.4

Both of America's self-generating wars are lucrative to the private interests that lobby for their continuance.5 At the same time, both of these self-generating wars contribute to increasing insecurity and destabilization in America and in the world.

So, Amerika buys Saudi oil, the House of Al-Saud buys Amerikan weapons, and the Bogeyman must be sustained and nurtured:

Quote:The Covert US-Saudi Alliance and the War on Terror

Of the $66.3 billion in U.S. overseas arms sales in 2011, over half, or $33.4 billion, consisted of sales to Saudi Arabia. This included dozens of Apache and Black Hawk helicopters, weapons described by the New York Times, as needed for defense against Iran, but more suitable for Saudi Arabia's increasing involvement in aggressive asymmetric wars (e.g. in Syria).23

(snip)

The wealth of the two nations, America and Saudi Arabia, has become ever more interdependent. This is ironic. In the words of a leaked US cable, "Saudi donors remain the chief financiers of Sunni militant groups like Al Qaeda."25 The Rabita or Muslim World League, launched and largely funded by the Saudi royal family, has provided an international meeting place for international Salafists including some al Qaeda leaders.26
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