http://www.rawstory.com/rs/2010/12/nigeria-issue-arrest-warrant-dick-cheney-bribery-case/
Nigeria to charge Dick Cheney in $180 million bribery case, issue Interpol arrest warrant
John Byrne
Thursday, December 2nd, 2010
The energy services company Dick Cheney ran prior to becoming Vice President of the United States was atop the tongue of liberals each time it was awarded a contract in Iraq.
Now the company's name, Halliburton, is being spoken somewhere else: Nigeria.
According to a story filed late Wednesday, Cheney will be indicted in a Nigerian bribery case as part of an investigation into an alleged $180 million bribery scandal.
"Last week, Nigeria arrested at least 23 officials from companies including Halliburton, Saipem, Technip and a former subsidiary of Panalpina Welttransport Holding AG in connection with alleged illegal payments to Nigerian officials. Those detained were all freed on bail on Nov. 29," Bloomberg News' Elisha Bala-Gbogbo wrote.
"Authorities in the West African nation are probing Halliburton, Saipem and Technip for the alleged payment of $180 million in bribes to win a $6 billion liquefied natural-gas contract," Bala-Gbogbo added. "Panalpina is being investigated for illegal payments it allegedly made to Nigerian customs officials on behalf of Royal Dutch Shell Plc."
The prosecuting counsel for the country's Economic and Financial Crimes Commission said that indictments will be handed down in the next three days and that an arrest warrant for Cheney "will be issued and transmitted through Interpol."
Adds Bloomberg, "Obla said charges will be filed against current and former chief executive officers of Halliburton, including Cheney, who was CEO from 1995 to 2000, and its former unit KBR Inc., based in Houston, Texas; Technip SA, Europe’s second-largest oilfield- services provider; Eni SpA, Italy’s biggest oil company; and Saipem Construction Co., a unit of Eni. Obla didn’t identify the former officials whom he said held office when the alleged bribes were paid."
A spokesman for Cheney declined to comment.
The US Securities and Exchange Committee probe focused on the deal as early as 2004. Wrote The Washington Post at the time:
The Nigerian project, started in the early 1990s, was worth almost $5 billion to TSKJ, a partnership that included a KBR predecessor, as well as companies from France, Japan and the Netherlands.
At issue are payments made to Tristar, a Gibraltar company that had a consulting arrangement with a corporation formed by TSKJ to "administer the contracts and execute the work" in Nigeria, a Halliburton spokeswoman said in response to questions.
KBR, the engineering and construction subsidiary of Halliburton, was formed when Halliburton acquired Dresser Industries Inc. in 1998. It was a combination of Halliburton's Brown & Root and Dresser's M.W. Kellogg Co. Officials from the SEC and Cheney's office declined to comment.
Early on Thursday, Halliburton said they hadn't seen the new charges, but still denied their involvement.
"Halliburton's oil-field services operations in Nigeria have never in any way been part of the LNG project and none of the Halliburton employees have ever had any connection to or participation in that project," Tara Mullee Agard, a spokeswoman for the Houston-based company, said in an e-mailed response to Bloomberg.
Added Bloomberg: "Halliburton Co., the world's second- largest oilfield-services provider, said it hasn't seen any amended charges by Nigerian authorities who plan to indict current and former employees in a bribery scandal."
Showing posts with label Halliburton. Show all posts
Showing posts with label Halliburton. Show all posts
Thursday, December 9, 2010
Saturday, May 8, 2010
Oil spill costs: What will BP really pay?
http://money.cnn.com/2010/05/06/news/economy/BP_liability/
Oil spill costs: What will BP really pay?
Alabama National Guard members worked this week on a containment barrier to protect the coastline from the leaking oil spill.
Steve Hargreaves
May 6, 2010
NEW YORK (CNNMoney.com) -- The Gulf oil spill is going to cost billions to clean up, a tab BP has publicly pledged to pay in full.
But thanks to the unpredictable nature of the oil slick and the legal maze surrounding maritime law, what BP will pay and to whom is very much an open question.
Start with the costs. Estimates to clean the spill and compensate other parties for the economic damage run from $2 billion to $14 billion. One politician even said it could run into the hundreds of billions.
The truth is that no one has any idea yet.
The spill, which the Coast Guard says is still leaking oil at a rate of roughly 200,000 gallons a day, could stay near the coast of Louisiana, as it's doing now. It hasn't had much of an impact on the shoreline so far, and the dispersants being sprayed on it appear to be helping to keep it at sea.
If the containment device BP is preparing to put over the leak in the next few days works, or if the company can activate the broken valve that would shut off the well, the costs would be comparatively minimal. Say, a billion or two.
If the leak worsens, as company officials say it could, and the oil gets caught up in Gulf currents that bring it around Florida's beaches and up the East Coast, then things get very grim. Fishing grounds and beaches would be polluted. That spikes the cleanup cost and cuts into the revenue of thousands of other businesses.
BP loses $32 billion in value on spill
"It's really bad when people start throwing around numbers," said Fadel Gheit, a senior energy analyst at Oppenheimer. "It almost paralyzes the people working on this into inaction."
Then there's the question of what percentage of the total tab BP will actually pay.
Under federal law, BP (BP) and its minority partners in the well, Anadarko (APC, Fortune 500) and Mitsui, have to cover all the cleanup costs. BP Chief Executive Tony Hayward has pledged several times to honor that commitment.
But then there are the losses to the fishing, tourism and shipping industries if the oil closes parts of the coast. These costs could easily exceed the cleanup bill.
Here, Hayward has been less clear.
"When I said 'Will you be responsible for the economic damages?' he said, 'That's something we'll have to work out in the future,'" Sen. Bill Nelson, R-Fla., said Tuesday following a meeting with Hayward.
A BP spokesman said the company would cover all "legitimate claims," but pointed out that it's just too early to tell what those are or how high they'll climb.
BP's liabilities may be capped by a federal rule that limits the payouts for economic damages stemming from an oil spill to $75 million. Once that threshold is reached, a federal fund kicks in, covering an additional $1 billion. The federal fund is paid for by a 8-cents-a-barrel tax on oil produced or imported into the United States.
Then again, BP may not be able to use the liability shield. Carl Nelson, a Tampa-based maritime lawyer, said the $75 million cap only applies when a company has no violations related to an accident. That rarely happens. BP will almost certainly be found to be at fault in some way for the spill.
To ward off any confusion, lawmakers in the House and Senate have introduced bills raising the liability cap from $75 million to $10 billion, an initiative they've dubbed the "Big Oil Bailout Prevention Act." Lawmakers say there's precedent for making the law retroactive: Witness the Superfund, which forced polluters to reimburse the government for toxic cleanup.
Given the public outrage over the spill, and the fact that it's an election year, the bills stands a good chance of passing.
But not everyone thinks it's a good idea. If the cap is increased, Nelson predicts that it will only raise the cost of buying insurance for all companies producing offshore oil.
"You're going to pay for that at the gas pump," he said.
Then there's the issue of which companies are at fault.
BP is the main operator, and as such must pay for the cleanup costs. Subcontractors on an oil well -- in this case, that's Halliburton (HAL, Fortune 500), Transocean (RIG) and Cameron (CAM, Fortune 500), among others -- typically obtain legal releases from the main operator. In its most recent annual filing, Transocean noted that it has "generally been able to obtain some degree of contractual indemnification" from its clients against liability for "pollution, well and environmental damages."
That might protect them from federal lawsuits or action by BP, said Nelson, but it still does not prevent them from being sued by out-of-work fisherman or hoteliers.
Let the legal games begin.
Oil spill costs: What will BP really pay?
Alabama National Guard members worked this week on a containment barrier to protect the coastline from the leaking oil spill.
Steve Hargreaves
May 6, 2010
NEW YORK (CNNMoney.com) -- The Gulf oil spill is going to cost billions to clean up, a tab BP has publicly pledged to pay in full.
But thanks to the unpredictable nature of the oil slick and the legal maze surrounding maritime law, what BP will pay and to whom is very much an open question.
Start with the costs. Estimates to clean the spill and compensate other parties for the economic damage run from $2 billion to $14 billion. One politician even said it could run into the hundreds of billions.
The truth is that no one has any idea yet.
The spill, which the Coast Guard says is still leaking oil at a rate of roughly 200,000 gallons a day, could stay near the coast of Louisiana, as it's doing now. It hasn't had much of an impact on the shoreline so far, and the dispersants being sprayed on it appear to be helping to keep it at sea.
If the containment device BP is preparing to put over the leak in the next few days works, or if the company can activate the broken valve that would shut off the well, the costs would be comparatively minimal. Say, a billion or two.
If the leak worsens, as company officials say it could, and the oil gets caught up in Gulf currents that bring it around Florida's beaches and up the East Coast, then things get very grim. Fishing grounds and beaches would be polluted. That spikes the cleanup cost and cuts into the revenue of thousands of other businesses.
BP loses $32 billion in value on spill
"It's really bad when people start throwing around numbers," said Fadel Gheit, a senior energy analyst at Oppenheimer. "It almost paralyzes the people working on this into inaction."
Then there's the question of what percentage of the total tab BP will actually pay.
Under federal law, BP (BP) and its minority partners in the well, Anadarko (APC, Fortune 500) and Mitsui, have to cover all the cleanup costs. BP Chief Executive Tony Hayward has pledged several times to honor that commitment.
But then there are the losses to the fishing, tourism and shipping industries if the oil closes parts of the coast. These costs could easily exceed the cleanup bill.
Here, Hayward has been less clear.
"When I said 'Will you be responsible for the economic damages?' he said, 'That's something we'll have to work out in the future,'" Sen. Bill Nelson, R-Fla., said Tuesday following a meeting with Hayward.
A BP spokesman said the company would cover all "legitimate claims," but pointed out that it's just too early to tell what those are or how high they'll climb.
BP's liabilities may be capped by a federal rule that limits the payouts for economic damages stemming from an oil spill to $75 million. Once that threshold is reached, a federal fund kicks in, covering an additional $1 billion. The federal fund is paid for by a 8-cents-a-barrel tax on oil produced or imported into the United States.
Then again, BP may not be able to use the liability shield. Carl Nelson, a Tampa-based maritime lawyer, said the $75 million cap only applies when a company has no violations related to an accident. That rarely happens. BP will almost certainly be found to be at fault in some way for the spill.
To ward off any confusion, lawmakers in the House and Senate have introduced bills raising the liability cap from $75 million to $10 billion, an initiative they've dubbed the "Big Oil Bailout Prevention Act." Lawmakers say there's precedent for making the law retroactive: Witness the Superfund, which forced polluters to reimburse the government for toxic cleanup.
Given the public outrage over the spill, and the fact that it's an election year, the bills stands a good chance of passing.
But not everyone thinks it's a good idea. If the cap is increased, Nelson predicts that it will only raise the cost of buying insurance for all companies producing offshore oil.
"You're going to pay for that at the gas pump," he said.
Then there's the issue of which companies are at fault.
BP is the main operator, and as such must pay for the cleanup costs. Subcontractors on an oil well -- in this case, that's Halliburton (HAL, Fortune 500), Transocean (RIG) and Cameron (CAM, Fortune 500), among others -- typically obtain legal releases from the main operator. In its most recent annual filing, Transocean noted that it has "generally been able to obtain some degree of contractual indemnification" from its clients against liability for "pollution, well and environmental damages."
That might protect them from federal lawsuits or action by BP, said Nelson, but it still does not prevent them from being sued by out-of-work fisherman or hoteliers.
Let the legal games begin.
Slick Operator: The BP I've known too well
by Greg Palast for Truthout.org
May 5, 2010
I've seen this movie before. In 1989, I was a fraud investigator hired to dig into the cause of the Exxon Valdez disaster. Despite Exxon's name on that boat, I found the party most to blame for the destruction was ... British Petroleum. That's important to know, because the way BP caused devastation in Alaska is exactly the way BP is now sliming the entire Gulf Coast.
Tankers run aground, wells blow out, pipes burst. It shouldn't happen but it does. And when it does, the name of the game is containment. Both in Alaska, when the Exxon Valdez grounded, and in the Gulf over a week ago, when the Deepwater Horizon platform blew, it was British Petroleum that was charged with carrying out the Oil Spill Response Plans ("OSRP") which the company itself drafted and filed with the government.
What's so insane, when I look over that sickening slick moving toward the Delta, is that containing spilled oil is really quite simple and easy. And from my investigation, BP has figured out a very low cost way to prepare for this task: BP lies. BP prevaricates, BP fabricates and BP obfuscates.
That's because responding to a spill may be easy and simple, but not at all cheap. And BP is cheap. Deadly cheap.
To contain a spill, the main thing you need is a lot of rubber, long skirts of it called "boom." Quickly surround a spill or leak or burst, then pump it out into skimmers or disperse it, sink it or burn it. Simple.
But there's one thing about the rubber skirts: you've got to have lots of it at the ready, with crews on standby in helicopters and on containment barges ready to roll. They have to be in place round the clock, all the time, just like a fire department; even when all is operating A-OK. Because rapid response is the key. In Alaska, that was BP's job, as principal owner of the pipeline consortium Alyeska. It is, as well, BP's job in the Gulf, as principal lessee of the deepwater oil concession.
Before the Exxon Valdez grounding, BP's Alyeska group claimed it had these full-time oil spill response crews. Alyeska had hired Alaskan Natives, trained them to drop from helicopters into the freezing water and set boom in case of emergency. Alyeska also certified in writing that a containment barge with equipment was within five hours sailing of any point in the Prince William Sound. Alyeska also told the state and federal government it had plenty of boom and equipment cached on Bligh Island.
But it was all a lie. On that March night in 1989 when the Exxon Valdez hit Bligh Reef in the Prince William Sound, the BP group had, in fact, not a lick of boom there. And Alyeska had fired the Natives who had manned the full-time response teams, replacing them with phantom crews, lists of untrained employees with no idea how to control a spill. And that containment barge at the ready was, in fact, laid up in a drydock in Cordova, locked under ice, 12 hours away.
As a result, the oil from the Exxon Valdez, which could have and should have been contained around the ship, spread out in a sludge tide that wrecked 1,200 miles of shoreline.
And here we go again. Valdez goes Cajun.
BP's CEO Tony Hayward reportedly asked, "What the hell did we do to deserve this?"
It's what you didn't do, Mr. Hayward. Where was BP's containment barge and response crew? Why was the containment boom laid so damn late, too late and too little? Why is it that the US Navy is hauling in 12 miles of rubber boom and fielding seven skimmers, instead of BP?
Last year, CEO Hayward boasted that, despite increased oil production in exotic deep waters, he had cut BP's costs by an extra one billion dollars a year. Now we know how he did it.
As chance would have it, I was meeting last week with Louisiana lawyer Daniel Becnel Jr. when word came in of the platform explosion. Daniel represents oil workers on those platforms; now he'll represent their bereaved families. The Coast Guard called him. They had found the emergency evacuation capsule floating in the sea and were afraid to open it and disturb the cooked bodies.
I wonder if BP painted the capsule green, like they paint their gas stations.
Becnel, yesterday by phone from his office from the town of Reserve, LA, said the spill response crews were told they weren't needed because the company had already sealed the well. Like everything else from BP mouthpieces, it was a lie.
In the end, this is bigger than BP and its policy of cheaping-out and skiving the rules. This is about the anti-regulatory mania which has infected the American body politic. While the "tea baggers" are simply its extreme expression, US politicians of all stripes love to attack "the little bureaucrat with the fat rule book." It began with Ronald Reagan and was promoted, most vociferously, by Bill Clinton and the head of Clinton's de-regulation committee, one Al Gore.
Americans want government off our backs ... that is, until a folding crib crushes the skull of our baby; Toyota accelerators speed us to our death; banks blow our savings on gambling sprees; and crude oil smothers the Mississippi.
Then, suddenly, it's, "where was hell was the Government!" Why didn't the government do something to stop it?
The answer is, because government took you at your word they should get out of the way of business, that business could be trusted to police itself. It was only last month that BP, lobbying for new deepwater drilling, testified to Congress that additional equipment and inspection wasn't needed.
You should meet some of these little bureaucrats with the fat rulebooks. Like Dan Lawn, the inspector from the Alaska Department of Environmental Conservation who warned and warned and warned, before the Exxon Valdez grounding, that BP and Alyeska were courting disaster in their arrogant disregard of the rulebook. In 2006, I printed his latest warnings about BP's culture of negligence.
When the choice is between Dan Lawn's rule book and a bag of tea, Dan's my man.
*
This just in: Becnel tells me that one of the platform workers has informed him that the BP well was apparently deeper than the 18,000 feet depth reported. BP failed to communicate that additional depth to Halliburton crews who therefore poured in too small a cement cap for the additional pressure caused by the extra depth. So it blew.
Why didn't Halliburton check? "Gross negligence on everyone's part," says Becnel. Negligence driven by penny-pinching bottom-line squeezing. BP says its worker is lying. Someone's lying here: the man on the platform - or the company that has practiced prevarication from Alaska to Louisiana?
Greg Palast investigated the Exxon Valdez disaster for the Chucagh Native villages of Alaska's Prince William Sound. An expert on corporate regulation, Palast, now a journalist, authored the New York Times bestseller, The Best Democracy Money Can Buy.
Support Palast's work by making a tax-deductible donation.
May 5, 2010
I've seen this movie before. In 1989, I was a fraud investigator hired to dig into the cause of the Exxon Valdez disaster. Despite Exxon's name on that boat, I found the party most to blame for the destruction was ... British Petroleum. That's important to know, because the way BP caused devastation in Alaska is exactly the way BP is now sliming the entire Gulf Coast.
Tankers run aground, wells blow out, pipes burst. It shouldn't happen but it does. And when it does, the name of the game is containment. Both in Alaska, when the Exxon Valdez grounded, and in the Gulf over a week ago, when the Deepwater Horizon platform blew, it was British Petroleum that was charged with carrying out the Oil Spill Response Plans ("OSRP") which the company itself drafted and filed with the government.
What's so insane, when I look over that sickening slick moving toward the Delta, is that containing spilled oil is really quite simple and easy. And from my investigation, BP has figured out a very low cost way to prepare for this task: BP lies. BP prevaricates, BP fabricates and BP obfuscates.
That's because responding to a spill may be easy and simple, but not at all cheap. And BP is cheap. Deadly cheap.
To contain a spill, the main thing you need is a lot of rubber, long skirts of it called "boom." Quickly surround a spill or leak or burst, then pump it out into skimmers or disperse it, sink it or burn it. Simple.
But there's one thing about the rubber skirts: you've got to have lots of it at the ready, with crews on standby in helicopters and on containment barges ready to roll. They have to be in place round the clock, all the time, just like a fire department; even when all is operating A-OK. Because rapid response is the key. In Alaska, that was BP's job, as principal owner of the pipeline consortium Alyeska. It is, as well, BP's job in the Gulf, as principal lessee of the deepwater oil concession.
Before the Exxon Valdez grounding, BP's Alyeska group claimed it had these full-time oil spill response crews. Alyeska had hired Alaskan Natives, trained them to drop from helicopters into the freezing water and set boom in case of emergency. Alyeska also certified in writing that a containment barge with equipment was within five hours sailing of any point in the Prince William Sound. Alyeska also told the state and federal government it had plenty of boom and equipment cached on Bligh Island.
But it was all a lie. On that March night in 1989 when the Exxon Valdez hit Bligh Reef in the Prince William Sound, the BP group had, in fact, not a lick of boom there. And Alyeska had fired the Natives who had manned the full-time response teams, replacing them with phantom crews, lists of untrained employees with no idea how to control a spill. And that containment barge at the ready was, in fact, laid up in a drydock in Cordova, locked under ice, 12 hours away.
As a result, the oil from the Exxon Valdez, which could have and should have been contained around the ship, spread out in a sludge tide that wrecked 1,200 miles of shoreline.
And here we go again. Valdez goes Cajun.
BP's CEO Tony Hayward reportedly asked, "What the hell did we do to deserve this?"
It's what you didn't do, Mr. Hayward. Where was BP's containment barge and response crew? Why was the containment boom laid so damn late, too late and too little? Why is it that the US Navy is hauling in 12 miles of rubber boom and fielding seven skimmers, instead of BP?
Last year, CEO Hayward boasted that, despite increased oil production in exotic deep waters, he had cut BP's costs by an extra one billion dollars a year. Now we know how he did it.
As chance would have it, I was meeting last week with Louisiana lawyer Daniel Becnel Jr. when word came in of the platform explosion. Daniel represents oil workers on those platforms; now he'll represent their bereaved families. The Coast Guard called him. They had found the emergency evacuation capsule floating in the sea and were afraid to open it and disturb the cooked bodies.
I wonder if BP painted the capsule green, like they paint their gas stations.
Becnel, yesterday by phone from his office from the town of Reserve, LA, said the spill response crews were told they weren't needed because the company had already sealed the well. Like everything else from BP mouthpieces, it was a lie.
In the end, this is bigger than BP and its policy of cheaping-out and skiving the rules. This is about the anti-regulatory mania which has infected the American body politic. While the "tea baggers" are simply its extreme expression, US politicians of all stripes love to attack "the little bureaucrat with the fat rule book." It began with Ronald Reagan and was promoted, most vociferously, by Bill Clinton and the head of Clinton's de-regulation committee, one Al Gore.
Americans want government off our backs ... that is, until a folding crib crushes the skull of our baby; Toyota accelerators speed us to our death; banks blow our savings on gambling sprees; and crude oil smothers the Mississippi.
Then, suddenly, it's, "where was hell was the Government!" Why didn't the government do something to stop it?
The answer is, because government took you at your word they should get out of the way of business, that business could be trusted to police itself. It was only last month that BP, lobbying for new deepwater drilling, testified to Congress that additional equipment and inspection wasn't needed.
You should meet some of these little bureaucrats with the fat rulebooks. Like Dan Lawn, the inspector from the Alaska Department of Environmental Conservation who warned and warned and warned, before the Exxon Valdez grounding, that BP and Alyeska were courting disaster in their arrogant disregard of the rulebook. In 2006, I printed his latest warnings about BP's culture of negligence.
When the choice is between Dan Lawn's rule book and a bag of tea, Dan's my man.
*
This just in: Becnel tells me that one of the platform workers has informed him that the BP well was apparently deeper than the 18,000 feet depth reported. BP failed to communicate that additional depth to Halliburton crews who therefore poured in too small a cement cap for the additional pressure caused by the extra depth. So it blew.
Why didn't Halliburton check? "Gross negligence on everyone's part," says Becnel. Negligence driven by penny-pinching bottom-line squeezing. BP says its worker is lying. Someone's lying here: the man on the platform - or the company that has practiced prevarication from Alaska to Louisiana?
Greg Palast investigated the Exxon Valdez disaster for the Chucagh Native villages of Alaska's Prince William Sound. An expert on corporate regulation, Palast, now a journalist, authored the New York Times bestseller, The Best Democracy Money Can Buy.
Support Palast's work by making a tax-deductible donation.
Friday, May 7, 2010
Gulf oil spill: The Halliburton connection
http://latimesblogs.latimes.com/greenspace/2010/04/gulf-oil-spill-the-halliburton-connection.html
Gulf oil spill: The Halliburton connection
April 30, 2010
Margot Roosevelt and Jill Leovy
Investigators delving into the possible cause of the massive gulf oil spill are focusing on the role of Houston-based Halliburton Co., the giant energy services company, which was responsible for cementing the drill into place below the water. The company acknowledged Friday that it had completed the final cementing of the oil well and pipe just 20 hours before the blowout last week.
In a letter to to Halliburton Chief Executive David J. Lesar on Friday, Rep. Henry A. Waxman (D-Beverly Hills) chairman of the House Committee on Energy and Commerce, and Rep. Bart Stupak (D-Mich.), chairman of the Subcommittee on Oversight and Investigations, called on Halliburton officials to provide all documents relating to "the possibility or risk of an explosion or blowout at the Deepwater Horizon rig and the status, adequacy, quality, monitoring, and inspection of the cementing work" by May 7.
In a statement Friday, Halliburton said "it is premature and irresponsible to speculate on any specific causal issues." The company had four employees stationed on the rig at the time of the accident, all of whom were rescued by the Coast Guard. "Halliburton had completed the cementing of the final production casing string in accordance with the well design," it said. "The cement slurry design was consistent with that utilized in other similar applications. In accordance with accepted industry practice ... tests demonstrating the integrity of the production casing string were completed."
More than two dozen class action lawsuits have been filed after the explosion against BP PLC, the British company that leased the Deepwater Horizon rig, against the rig's owner, Transocean Ltd. and against Halliburton. BP is "taking full responsibility" for the spill and will pay for legitimate claims by affected parties, company spokeswoman Sheila Williams said.
Cement is used at two stages of the deep-water drilling process. It is used to fill gaps between the well pipe and the hole drilled into the seabed so as to prevent any seepage of oil and gas. And it is used to temporarily plug an exploration hole before production begins. At the time of the accident, the Halliburton statement said, "well operations had not yet reached the point requiring the placement of the final cement plug which would enable the planned temporary abandonment of the well."
Experts say cementing is a basic part of drilling, exploration and production of oil on the sea floor. Drill ships or rigs plant large pipes called "conductors" on the sea floor, and casings, or nested pipes, are placed inside of them. The pipes are fixed in place by cement, some hanging inside other pipes, and a drill string is run down a casing, and extended to the sea floor to bore holes.
Mud works its way back up the pipes and the “riser,” a pipe that connects the drill site to the ship or rig above. Or oil is brought up. Cement fixes the operations in place. Cement may also be used to plug a well, pumped down the string until it comes up on the sides, and stops the hole.
Cementing a deep-water drilling operation is a process fraught with danger. A 2007 study by the U.S. Minerals Management Service found that cementing was the single most important factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period -- more than equipment malfunction. Halliburton has been accused of a poor cement job in the case of a major blowout in the Timor Sea off Australia last August. An investigation is underway.
According to experts cited in Friday's Wall St. Journal, the timing of last week's cement job in relation to the explosion -- only 20 hours beforehand, and the history of cement problems in other blowouts "point to it as a possible culprit." Robert MacKenzie, managing director of energy and natural resources at FBR Capital Markets and a former cementing engineer, told the Journal, "The initial likely cause of gas coming to the surface had something to do with the cement."
In its statement, the company said, "Halliburton originated oilfield cementing and leads the world in effective, efficient delivery of zonal isolation and engineering for the life of the well, conducting thousands of successful well cementing jobs each year."
The company, which was once headed by former Vice President Dick Cheney, has been in the media spotlight before -- under under fire in recent years for its operations as a private contractor in Iraq.
Gulf oil spill: The Halliburton connection
April 30, 2010
Margot Roosevelt and Jill Leovy
Investigators delving into the possible cause of the massive gulf oil spill are focusing on the role of Houston-based Halliburton Co., the giant energy services company, which was responsible for cementing the drill into place below the water. The company acknowledged Friday that it had completed the final cementing of the oil well and pipe just 20 hours before the blowout last week.
In a letter to to Halliburton Chief Executive David J. Lesar on Friday, Rep. Henry A. Waxman (D-Beverly Hills) chairman of the House Committee on Energy and Commerce, and Rep. Bart Stupak (D-Mich.), chairman of the Subcommittee on Oversight and Investigations, called on Halliburton officials to provide all documents relating to "the possibility or risk of an explosion or blowout at the Deepwater Horizon rig and the status, adequacy, quality, monitoring, and inspection of the cementing work" by May 7.
In a statement Friday, Halliburton said "it is premature and irresponsible to speculate on any specific causal issues." The company had four employees stationed on the rig at the time of the accident, all of whom were rescued by the Coast Guard. "Halliburton had completed the cementing of the final production casing string in accordance with the well design," it said. "The cement slurry design was consistent with that utilized in other similar applications. In accordance with accepted industry practice ... tests demonstrating the integrity of the production casing string were completed."
More than two dozen class action lawsuits have been filed after the explosion against BP PLC, the British company that leased the Deepwater Horizon rig, against the rig's owner, Transocean Ltd. and against Halliburton. BP is "taking full responsibility" for the spill and will pay for legitimate claims by affected parties, company spokeswoman Sheila Williams said.
Cement is used at two stages of the deep-water drilling process. It is used to fill gaps between the well pipe and the hole drilled into the seabed so as to prevent any seepage of oil and gas. And it is used to temporarily plug an exploration hole before production begins. At the time of the accident, the Halliburton statement said, "well operations had not yet reached the point requiring the placement of the final cement plug which would enable the planned temporary abandonment of the well."
Experts say cementing is a basic part of drilling, exploration and production of oil on the sea floor. Drill ships or rigs plant large pipes called "conductors" on the sea floor, and casings, or nested pipes, are placed inside of them. The pipes are fixed in place by cement, some hanging inside other pipes, and a drill string is run down a casing, and extended to the sea floor to bore holes.
Mud works its way back up the pipes and the “riser,” a pipe that connects the drill site to the ship or rig above. Or oil is brought up. Cement fixes the operations in place. Cement may also be used to plug a well, pumped down the string until it comes up on the sides, and stops the hole.
Cementing a deep-water drilling operation is a process fraught with danger. A 2007 study by the U.S. Minerals Management Service found that cementing was the single most important factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period -- more than equipment malfunction. Halliburton has been accused of a poor cement job in the case of a major blowout in the Timor Sea off Australia last August. An investigation is underway.
According to experts cited in Friday's Wall St. Journal, the timing of last week's cement job in relation to the explosion -- only 20 hours beforehand, and the history of cement problems in other blowouts "point to it as a possible culprit." Robert MacKenzie, managing director of energy and natural resources at FBR Capital Markets and a former cementing engineer, told the Journal, "The initial likely cause of gas coming to the surface had something to do with the cement."
In its statement, the company said, "Halliburton originated oilfield cementing and leads the world in effective, efficient delivery of zonal isolation and engineering for the life of the well, conducting thousands of successful well cementing jobs each year."
The company, which was once headed by former Vice President Dick Cheney, has been in the media spotlight before -- under under fire in recent years for its operations as a private contractor in Iraq.
Friday, December 11, 2009
Af-Pak War Racket
http://ampedstatus.com/af-pak-war-racket-the-obama-illusion-comes-crashing-down
Af-Pak War Racket: The Obama Illusion Comes Crashing Down
Wednesday, December 2nd, 2009
By David DeGraw, AmpedStatus Report
Report Contents:
————I: Troop Deployments
————II: The Militarized Economy
————III: Masters of War
————IV: PsyOps: Wag the Dog and Shake the Mohammed
————V: U.S. Insurgency: Violent, Strategic Dislocation Within U.S.
The economic elite have escalated their attack on the U.S. public by surging military operations in Afghanistan and Pakistan.
As Obama announced plans for escalating the war effort, it has become clear that the Obama Illusion has taken yet another horrifying turn. Before explaining how the Af-Pak surge is a direct attack on the US public, let’s peer through the illusion and look at the reality of the situation.
Now that the much despised George W. Bush is out of the way and a more popular figurehead is doing PR for Dick Cheney’s right-hand military leader Gen. Stanley McChrystal, who is leading his second AF-Pak surge now, and with long time Bush family confidant Robert Gates still running the Defense Department, the masters of war have never had it so good.
Barack Obama, the anti-war candidate, has proven to be a perfect decoy for the military industrial complex. Consider all the opposition and bad press Bush received when he announced the surge in Iraq. Then consider this:
I: TROOP DEPLOYMENTS
The Bush surge in Iraq deployed an extra 28,000 US troops. Under Obama, back in March, a surge in Afghanistan, that also further escalated operations inside Pakistan, deployed an extra 21,000 troops. However, in an unannounced and underreported move, Obama added 13,000 more troops to that surge to bring the total to 34,000 troops. Obama actually outdid Bush’s surge by 6000 troops and brought the overall number of US troops in Afghanistan to 68,000, double the number there when Bush left office.
Where opposition was fierce to Bush’s surge, barely any opposition was expressed during Obama’s surge. Part of the reason for so little political and public backlash was the cleverly orchestrated psychological operation to announce the beginning of US troop withdrawal from Iraq. While the drawdown in Iraq has been greatly exaggerated in the US mainstream media, as of October, Obama still had 124,000 troops deployed in Iraq (not counting private military contractors).
When Obama casts the illusion of a 2011 withdrawal from Afghanistan, one just needs look at the reality of the situation with the over-hyped withdrawal in Iraq.
Now, with Obama’s latest surge announcement he will again be adding a minimum of another 30,000 US soldiers. This means that Obama has now led a bigger surge than Bush… on two separate occasions within the past nine months of his new administration.
Obama has now escalated deployments in the Af-Pak region to 98,000 US troops. So in Af-Pak and Iraq, he will now have a total of 222,000 US troops deployed, 36,000 more than Bush ever had - 186,000 was Bush’s highest total.
PRIVATE MILITARY AND NATO DEPLOYMENTS
The amount of private military contractors deployed in Iraq and Afghanistan is rarely reported on in the US mainstream press, but a Congressional Research Service investigation into this revealed that a record high 69% active duty soldiers are in fact private mercenaries.
Although the administration is yet to disclose how many private mercenaries will be deployed in the latest surge, it is believed that the 69% ratio will remain in tact.
The Pentagon released a report showing that Obama already had a total of 242,657 private contractors in action, as of June 30th. 119,706 of them in Iraq, 73,968 in Afghanistan, with 50,061 active in “other US CENTCOM locations.”
Back in June, Jeremy Scahill reported on these findings: “According to new statistics released by the Pentagon, with Barack Obama as commander in chief, there has been a 23% increase in the number of ‘Private Security Contractors’ working for the Department of Defense in Iraq in the second quarter of 2009 and a 29% increase in Afghanistan….”
Plus, we must mention, the immense dangers of having private military contractors as 69% of our fighting force. For those of you unaware, private military contractors are hired from all over the world. Any former soldier, from any country, is welcome to come and fight for a salary - a salary that is often significantly more than what we pay our own US soldiers.
These mercenaries have a vested interest in prolonging the war, for as long as there is a war, they have a well paying job. So it is easy to infer that a significant percentage of these contractors will not have the US soldiers, or US taxpayers, best interests at heart.
Obama continues to feed this out of control private army by pouring billions of taxpayer dollars into shady and scandalous companies like Blackwater, who recently changed their name to Xe Services, because they destroyed their reputation by committing numerous war crimes in Iraq. A recent investigation by Jeremy Scahill revealed the extent to which Blackwater is involved in covert operations inside Afghanistan and Pakistan. In some cases, Blackwater is not working for the US, but were hired by covert elements inside Pakistan. When it comes to private contractors, the fog of war grows ominous, exactly who is fighting for whom is unclear. The crucial factor is who paid them the most that particular day.
The US military can give them $1000 today, and an enemy can give them $1000 tomorrow, when you have people who fight for a payday and not for a country, you get chaos. This leads to a breakdown in the chain of command, effectively turning a military operation into a covert intelligence operation, where you’re never really sure if the person you are fighting with is on your side or not.
A federal investigation by the Commission on Wartime Contracting in Iraq and Afghanistan, revealed in June: “More than 240,000 contractor employees, about 80 percent of them foreign nationals, are working in Iraq and Afghanistan to support operations and projects of the U.S. military, the Department of State, and the U.S. Agency for International Development. Contractor employees outnumber U.S. troops in the region. While contractors provide vital services, the Commission believes their use has also entailed billions of dollars lost to waste, fraud, and abuse due to inadequate planning, poor contract drafting, limited competition, understaffed oversight functions, and other problems.”
Before this latest surge, there were over 123,000 US and NATO troops in the Af-Pak region, and 200,000 Afghan security forces, supporting the US effort. According to US intelligence sources the total number of Taliban and al-Qaida fighters in the region was estimated to only be about 25,000, giving the US led forces a minimum of a 12 to 1 troop advantage.
When you add in estimated private soldiers, you get an approximate minimum of a 17 to 1 advantage.
Although Obama opened his war speech by mentioning al-Qaida as the main justification for this war, consider this AP report: “national security adviser James Jones said last weekend that the al-Qaida presence has diminished, and he does not ‘foresee the return of the Taliban’ to power. He said that according to the maximum estimate, al-Qaida has fewer than 100 fighters operating in Afghanistan without any bases or ability to launch attacks on the West.”
Does it seriously take a surge of hundreds of thousands of troops to contain what amounts to “less than 100? al-Qaida members?
Any serious war strategist will tell you that the most effective way to combat the remains of the al-Qaida network, is through an intelligence operation, and statistics prove that escalating more troops into the region will only fuel further acts of terrorism.
DRONE DEPLOYMENTS
Speaking of fueling hatred toward the US, other than a huge troop increase, there has also been a sharp increase in the use of unmanned drones. The New Yorker reports: “According to a just completed study by the New America Foundation, the number of drone strikes has risen dramatically since Obama became President. During his first nine and a half months in office, he has authorized as many C.I.A. aerial attacks in Pakistan as George W. Bush did in his final three years in office.”
The unmanned drones have caused major controversy due to the high number of civilian causalities they cause. However, as the study stated, the Obama Administration continues to increasingly rely upon them.
So summing up these statistics, we have the most fierce and technologically advanced military force in history, vastly outnumbering what amounts to be a ragtag army of peasant farmers with guns, and our best option is supposed to be an increase in troop levels?
Obviously, something doesn’t add up.
After thinking about all of this, you begin to see through the smokescreen of what this war is said to be about and get a glimpse of some of the sinister forces at play here.
OVER EXTENDED TROOPS
With the rise in deployments, the US military is stretched to a breaking point. Obama is “deploying practically every available US Army brigade to war, leaving few units in reserve.”
As this war enters its 9th year, many soldiers are forced into deploying on their 3rd or 4th combat tours, and morale is fading fast.
The past year has seen a dramatic increase in US soldier deaths, with the number of wounded drastically rising as well. 928 US soldiers have died in Afghanistan thus far, with last month being the deadliest month since the start.
AP reports that “nearly four times as many troops were injured in October as a year ago. Amputations, burns, brain injuries and shrapnel wounds proliferate in Afghanistan, due mostly to crude, increasingly potent improvised bombs targeting U.S. forces…. Since 2007, more than 70,000 service members have been diagnosed with traumatic brain injury — more than 20,000 of them this year…”
US soldier suicides are also on the rise. In 2008, 197 army soldiers committed suicide. Thus far in 2009, there have been 211 army suicides.
McClatchy recently reported: “An Army task force has found that a growing number of soldiers serving in Afghanistan are suffering from some kind of mental stress and is urging the military to double the number of mental health professionals deployed there. The study, conducted by the Army Mental Health Advisory Team, found that soldiers’ morale in Afghanistan is ’significantly lower’ than it was in 2005 and 2007 studies…”
As wounded soldiers return from Afghanistan and Iraq, they are finding a healthcare system that is increasingly more difficult and costly to get care from. In fact, 2,266 US veterans died in 2008 due to lack of healthcare, and “researchers also found that, in 2008, 1,461,615 veterans between the ages of 18 and 64 lacked insurance.”
Despite all of this, in another devastating example of how the economy is unraveling US society, military enlistment levels have reached a high. In a report by the Washington Post headlined: “A Historic Success In Military Recruiting” they reveal:
“For the first time in more than 35 years, the U.S. military has met all of its annual recruiting goals, as hundreds of thousands of young people have enlisted despite the near-certainty that they will go to war.
The Pentagon… said the economic downturn and rising joblessness, as well as bonuses and other factors, had led more qualified youths to enlist. The military has not seen such across-the-board successes since the all-volunteer force was established.…
‘We delivered beyond anything the framers of the all-volunteer force would have anticipated,’ Bill Carr, deputy undersecretary of defense for military personnel policy, said at a Pentagon news conference.
Overall, the Defense Department brought in 168,900 active-duty troops, or 103 percent of the goal for the fiscal year….”
What we are witnessing here with such high enlistment levels during this economic crisis has many parallels to Germany in the 1930’s. Just like the United States now, the German economy in the 1930’s was devastated by an economic crisis brought on by Wall Street. With rising unemployment and poverty, German men turned to the military for income and health benefits that their family severely needed. With over 25 million US citizens unemployed and underemployed, over 50 million with no healthcare, and over 50 million living in poverty, military service is now a last resort for a growing number of desperate Americans as well. The record-breaking enlistment numbers are expected to continue to rise as the economy continues to decline.
“Such a perfect democracy constructs its own inconceivable foe, terrorism. Its wish is to be judged by its enemies rather than by its results.”
– Guy DeBord, Comments On the Society of the Spectacle, 1988
II: THE MILITARIZED ECONOMY
The amount of money necessary to keep the US military machine growing has reached astonishing levels. Considering the increasing amount of troops and contractors, the White House estimates that it spends one million dollars per soldier, per year in Afghanistan, “not including the added expense of training and maintaining a security force.”
According to these calculations, 30,000 troops for this latest surge will add an additional $30 billion to the annual budget, just in troop related costs. Also consider the price of moving fuel around, AFP reports: “Moving soldiers and supplies across the rugged Afghan landscape costs more than in Iraq, with the military consuming 83 liters or 22 gallons of fuel per soldier per day.” The Hill adds: “Pentagon officials have told the House Appropriations Defense Subcommittee a gallon of fuel costs the military about $400 by the time it arrives in the remote locations in Afghanistan where U.S. troops operate.”
Other than in Iraq and Afghanistan, you have an unprecedented number of military bases spread throughout the world. Officially there are “900 military facilities in 46 countries and territories (the unofficial figure is far greater). The US military owns or rents 795,000 acres of land, with 26,000 buildings and structures, valued at $146bn. The bases bristle with an inventory of weapons whose worth is measured in the trillions and whose killing power could wipe out all life on earth several times over. The official figures exclude the huge build-up of troops and structures in Iraq and Afghanistan over the past decade, as well as secret or unacknowledged facilities in Israel, Kuwait, the Philippines and many other places. In just three years of the Iraq and Afghanistan wars, £2bn was spent on military construction.”
There was public outcry when Bush drastically raised an already bloated military budget to record highs. But in comes the admired anti-war candidate Obama, in the middle of a severe economic crisis, and what happens? Obama drastically increased Bush’s record budget to $651 billion in 2009. Yes, during a severe economic crisis, Obama actually increased Bush’s budget. US military spending is higher than the rest of the world combined. The 2010 budget, which doesn’t account for war-related spending yet, is already set to grow to $680 billion.
However, these budget numbers are deceiving because the Obama Administration has been getting better at hiding extra spending in other budget items. The actual total 2009 budget was over $1 trillion.
And much like the staggering giveaway to the economic elite in the Wall Street banker bailout, no one is really sure where a significant percentage of this money is actually going. On September 10, 2001, Donald Rumsfeld announced that $2.3 trillion in military spending was unaccounted for. As CBS News reported: “$2.3 trillion - that’s $8,000 for every man, woman and child in America.”
At that time, Pentagon auditors admitted that they couldn’t account for a staggering 25% of all military spending. And the budget has exploded since then, with fewer people accounting for where this money is going.
Once again, just like the $23.7 trillion that went into propping up the Wall Street elite - which totals $80,000 for every American - you have trillions more in taxpayer money vanishing and very few regulating and accounting for it.
Other than this staggering loss of taxpayer money, any serious economist will tell you “that military spending increases unemployment and decreases economic growth.”
Economists Joseph E. Stiglitz and Linda J. Bilmes, in their book “The Three Trillion Dollar War,” report that military spending on the war in Iraq has created over a trillion dollars in loses to the US economy.
On top of all the looting of taxpayer money that is occurring, “several powerful House committee chairmen have proposed a surtax on Americans to pay the future military costs.”
With the country already operating at a record $12 trillion deficit, members of congress don’t know how we can afford increasing an already huge war expenditure.
WEAPONS SALES
In this struggling economy, weapon sales have become one of America’s most booming businesses. US weapon sales have hit a record level under the Obama administration. Foreign Policy In Focus reports:
“In fiscal year 2008, the foreign military sales program sold $36 billion in weapons and defense articles, an increase of more than 50% over 2007. Sales for the first half of 2009 reached $27 billion, and could top out at $40 billion by the end of the year. In contrast, through the early 2000s, arms sales averaged between $8-13 billion per year….
But last year, the United States sold arms or military services to well over 100 nations….
… the majority of U.S. arms sales to the developing world went to countries that our own State Department defined as undemocratic regimes and/or major human rights abusers. And over two-thirds of the world’s active conflicts involved weapons that had been supplied by the United States.”
Selling all these weapons, especially during the biggest global financial crisis, will lead to one thing… terrorism.
Given these statistics, it shouldn’t be a surprise to hear how US taxpayer dollars are still funding the Taliban. Prior to the 9/11 attacks, the Taliban government was funded by the US taxpayer. In fact, the Taliban still receives a significant portion of their funding courtesy of the US taxpayer. As The Nation recently reported: “It is an accepted fact of the military logistics operation in Afghanistan that the US government funds the very forces American troops are fighting. And it is a deadly irony, because these funds add up to a huge amount of money for the Taliban. ‘It’s a big part of their income,’ one of the top Afghan government security officials told The Nation in an interview. In fact, US military officials in Kabul estimate that a minimum of 10 percent of the Pentagon’s logistics contracts–hundreds of millions of dollars–consists of payments to insurgents.”
As former CIA Station Chief John Stockwell explained: “Enemies are necessary for the wheels of the US military machine to turn.”
With the war in Afghanistan now entering it’s 9th year, senior military commanders and a growing number of experts have come to the conclusion that this war is unwinnable and will fuel terrorism.
However, they all seem to be missing the point, before explaining this in more detail, let me start by referring you to a quote from a journalist who had firsthand experience operating inside a militaristic empire:
“The war is not supposed to be winnable, it is supposed to be continuous… all for the hierarchy of society… The essential act of war is destruction, not necessarily of human lives, but of the products of human labor. War is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable, and hence, in the long run, too intelligent… it helps to preserve the special mental atmosphere that a hierarchical society needs. War… is now a purely internal affair.” — George Orwell
III: MASTERS OF WAR
“Come you masters of war
You that build all the guns
You that build the death planes
You that hide behind walls
You that hide behind desks
I just want you to know,
I can see through your mask…”
Many of the weapons manufactures and private military contractors are seen as the primary war profiteers. For an example of grotesque war profiteering, let’s look at Dick Cheney’s former company Halliburton. In a report headlined: “U.S. War Privatization Results in Billions Lost in Fraud, Waste and Abuse,” Jeremy Scahill reports on KBR, a Halliburton subsidiary.
“KBR has been paid nearly $32 billion since 2001. In May, April Stephenson, director of the Defense Contract Audit Agency, testified that KBR was linked to ‘the vast majority’ of war-zone fraud cases and a majority of the $13 billion in ‘questioned’ or ‘unsupported’ costs. According to Agency, it sent the inspector general ‘a total of 32 cases of suspected overbilling, bribery and other violations since 2004.
According to the Associated Press, which obtained an early copy of the commission’s report, ‘billions of dollars’ of the total paid to KBR ‘ended up wasted due to poorly defined work orders, inadequate oversight and contractor inefficiencies.’
KBR is at the center of a lethal scandal involving the electrocution deaths of more than a dozen US soldiers, allegedly as a result of faulty electrical work done by the company. The DoD paid KBR more than $80 million in bonuses for the very work that resulted in the electrocution deaths.”
With numerous scandals over KBR operations, Halliburton ended it’s relationship with the company. However, “Halliburton reported $4 billion in operating profits in 2008, while KBR recently said its first quarter revenues in 2009 were up 27%, for a total of $3.2 billion. Its sales in 2008 were up 33%, and according to the Financial Times, the company had $1 billion in cash, no debt, and was looking for acquisitions.”
Beyond these blatant examples of war profiteering, there are more insidious forces at play that most people don’t see. These war profiteering companies are funded by the same banks that have destroyed the US economy.
Consider this example concerning Alliant Techsystems and Textron, two manufactures of cluster bombs, the controversial civilian killing WMDs. The Guardian reported:
“The deadly trade in cluster bombs is funded by the world’s biggest banks who have loaned or arranged finance worth $20bn to firms producing the controversial weapons, despite growing international efforts to ban them…
Goldman Sachs, the US bank which made £3.19bn profit in just three months, earned $588.82m for bank services and lent $250m to Alliant Techsystems and Textron…
Last December 90 countries, including the UK, committed themselves to banning cluster bombs by next year. But the US was not one of them. So far 23 countries have ratified the convention.”
Before going into further detail on how these banks make a lion’s share of war profits, let’s look back at the origins of these wars.
GEO-STRATEGIC OIL OPERATIONS
With all due respect to people who have been force-fed Pentagon propaganda by the US mainstream media, any serious observer of the Iraq and Af-Pak wars knows that these are geo-strategic conflicts based on controlling the world’s oil supply. Anyone in the “news” media who tells you otherwise is either unaware of what is actually going on, or is a well-paid propagandist working for the very people who profit off of them.
ORIGINS OF THE IRAQ OCCUPATION: CHENEY ENERGY TASK FORCE
As an AlterNet report put it: “In January 2000, 10 days into President George W. Bush’s first term, representatives of the largest oil and energy companies joined the new administration to form the Cheney Energy Task Force.”
Secret Task Force documents that were dated March 2001, which were obtained by Judical Watch in 2003 after a Freedom of Information Act lawsuit, contained “a map of Iraqi oilfields, pipelines, refineries and terminals, as well as two charts detailing Iraqi oil and gas projects…” They also had:
“… a series of lists titled ‘Foreign Suitors for Iraqi Oilfield Contracts‘ naming more than 60 companies from some 30 countries with contracts in various stages of negotiation.
None of contracts were with American nor major British companies, and none could take effect while the U.N. Security Council sanctions against Iraq remained in place. Three countries held the largest contracts: China, Russia and France — all members of the Security Council and all in a position to advocate for the end of sanctions.
Were Saddam to remain in power and the sanctions to be removed, these contracts would take effect, and the U.S. and its closest ally would be shut out of Iraq’s great oil bonanza.”
Project Censored highlighted a Judicial Watch report that stated: “Documented plans of occupation and exploitation predating September 11 confirm heightened suspicion that U.S. policy is driven by the dictates of the energy industry. According to Judicial Watch President, Tom Fitton, ‘These documents show the importance of the Energy Task Force and why its operations should be open to the public.’”
ORIGINS OF THE AFGHANISTAN OCCUPATION: “STRATEGY OF THE SILK ROUTE”
Up until 9/11, oil companies, with the help of the Bush administration, were desperately trying to work out a deal with the Taliban to build an oil pipeline through Afghanistan. One of the world’s richest oil fields is on the eastern shore of the Caspian sea just north of Afghanistan. The Caspian oil reserves are of top strategic importance in the quest to control the earth’s remaining oil supply. The US government developed a policy called “The Strategy of the Silk Route.”
The policy was designed to lock out Russia, China and Iran from the oil in this region. This called for U.S. corporations to construct an oil pipeline running through Afghanistan. Since the mid 1990s, a consortium of U.S. companies led by Unocal have been pursing this goal. A feasibility study of the Central Asian pipeline project was performed by Enron. Their study concluded that as long as the country was split among fighting warlords the pipeline could not be built. Stability was necessary for the $4.5 billion project and the U.S. believed that the Taliban would impose the necessary order. The U.S. State Department and Pakistan’s ISI, impressed by the Taliban movement to cut a pipeline deal, agreed to funnel arms and funding to the Taliban in their war for control of Afghanistan.
“Until 1999 U.S. taxpayers paid the entire annual salary of every single Taliban government official.”
The U.S., Saudi and Pakistan intelligence alliance that created the terrorist financing bank BCCI reunited to facilitate the rise of the Taliban. BCCI was a US intelligence bank, which served as the financing arm for the creation of the al-Qaida network. BCCI was involved in many covert operations throughout the 80’s and early 90’s. They played a pivotal role in arming Saddam in Iraq, the Iran-Contra scandal, the Iran hostage crisis, even selling drugs through Manuel Noriega and other top drug dealers. BCCI gave nuclear weapons to Pakistan, which led to North Korea and Iran obtaining pivotal nuclear secrets as well. BCCI was also a driving force behind the Savings and Loan scandals that were a precursor to our current economic crisis.
Focusing on the creation of the Taliban, let’s read an excerpt from a 2003 book, “ Modern Jihad: Tracing the Dollars Behind the Terror Networks,” by Loretta Napoleoni:
“The alliance between American capitalism and Islamist fundamentalism is not limited to the creation of the Taliban; it also produced business ventures designed to extract favours from the new regime. To strengthen its bargaining power with the newly formed Islamist state, Unocal joined the Saudi Delta Oil Corporation to create a consortium called CentGas. Delta Oil is owned by the bin Mahfouz and al-Amoudi families [pivotal BCCI players], Saudi clans which have strong links with Osama bin Laden’s family…. Mahfouz has been sponsoring charitable institutions used as fronts for bin Laden’s associates through the National Commercial Bank, which his family controls….
Naturally, as soon as George W. Bush was elected president, Unocal and [UK’s] BP-Amoco… started once again to lobby the administration, among whom were several of their former employees. Unocal knew that Bush was ready to back them and resumed the consortium negotiations. In January 2001, it began discussions with the Taliban, backed by members of the Bush administration among whom was Under Secretary of State Richard Armitage, who had previously worked as a lobbyist for Unocal. The Taliban, for their part, employed as their PR officer in the US Laila Helms, niece of Richard Helms, former director of the CIA and former US ambassador to Iran. In March 2001, Helms succeeded in bringing Rahmatullah Hashami, Mullah Omar’s adviser, to Washington…. As late as August 2001, meetings were held in Pakistan to discuss the pipeline business….
While negotiations were underway, the US was secretly making plans to invade Afghanistan. The Bush administration and its oil sponsors were losing patience with the Taliban; they wanted to get the Central Asian gas pipeline going as soon as possible. The ‘strategy of the Silk Route’ had been resumed….
Paradoxically, 11 September provided Washington with a casus belli to invade Afghanistan and establish a pro American government in the country. When, a few weeks after the attack, the leaders of the two Pakistani Islamist parties negotiated with Mullah Omar and bin Laden for the latter’s extradition to Pakistan to stand trial for the 11 September attacks, the US refused the offer….
In November 2001… Hamid Karzai was elected [Afghanistan’s] prime minister… Yet very few people remember that during the 1990’s Karzai was involved in negotiations with the Taliban regime for the construction of a Central Asian gas pipeline from Turkmenistan through western Afghanistan to Pakistan. At that time he was a top adviser and lobbyist for Unocal… during the anti-Soviet jihad, Karzai was a member of the Mujahedin. In the early 1990’s, thanks to his excellent contacts with the ISI, he moved to the US where he cooperated with the CIA and the ISI in supporting the Taliban’s political adventure.”
So it is not all that surprising to see recent reports revealing that Hamid Karzai’s drug kingpin brother, Ahmed Wali Karzai, is also on the CIA payroll.
With this, a new Senate investigation just revealed evidence that Donald Rumsfeld made a conscious strategic decision to let Bin Laden escape. AFP reports:
“Osama bin Laden was within the grasp of US forces in late 2001 and could have been caught if then-defense secretary Donald Rumsfeld hadn’t rejected calls for reinforcements, a hard-hitting US Senate report says….
It points the finger directly at Rumsfeld for turning down requests for reinforcements as Bin Laden was trapped in caves and tunnels in a mountainous section of eastern Afghanistan known as Tora Bora.
‘The vast array of American military power, from sniper teams to the most mobile divisions of the marine corps and the army, was kept on the sidelines,’ the report said.”
So now that we see how these wars are driven by oil, let’s look at how the oil industry is benefiting from them. Since the invasion, the industry has experienced record profits across the board, setting new profit records quarter after quarter, year after year, as these wars rage on.
IRAQI OIL DEALS
With Exxon and Shell just signing new oil contracts in Iraq, it’s obvious why there are still over 100,000 troops in Iraq. In a Daily Mirror report headlined, “Oil Billions and Weapons of Mass Deception In Iraq,” they report on the new oil deals:
“Exxon-Mobil and Royal Dutch Shell won the development rights of a massive oil field — West Qurna near Basra in Iraq’s south. The two oil giants hope to boost daily production from the current 300,000 barrels to 2.3 million barrels a day at West Qurna, which the ousted and hanged Iraqi President Saddam Hussein wanted to give to a Russian oil company.
Last month, British Petroleum (BP) and the China National Petroleum Corporation (CNPC) won a contract to develop another oil field. The invitation to China to join the plunder of Iraq is probably a payoff by the US so that this Asian economic powerhouse and rising military power would not rock the pirates’ boat.”
Let’s look back over the years since the start of the War on Terror, here’s a 2005 MSNBC report:
“By just about any measure, the past three years have produced one of the biggest cash gushers in the oil industry’s history. Since January of 2002, the price of crude has tripled, leaving oil producers awash in profits. During that period, the top 10 major public oil companies have sold some $1.5 trillion worth of crude, pocketing profits of more than $125 billion.
“This is the mother of all booms,” said Oppenheimer & Co. oil analyst Fadel Gheit. “They have so much profit, it’s almost an embarrassment of riches. They don’t know what to do with it.
So an oil field that was profitable with oil selling for $20 a barrel is much more profitable with oil trading around $60…. Since January 2002, stocks of major oil companies have gained 88 percent; during that period the Standard and Poor’s 500 index has gained less than half as much.
Oil producers have also given investors a raise by gradually increasing the dividends paid out to shareholders.”
Here’s a 2007 Public Citizen report summing up oil company wartime profits:
“Since George Bush became President in 2001, the top five oil companies in the United States have recorded profits of $464 billion through the first quarter of 2007:
ExxonMobil: $158.5 billion
Shell: $108.5 billion
BP: $89.2 billion
ChevronTexaco: $60.9 billion
ConocoPhillips: $46.9 billion”
In Febuary 2008, CNN reported:
“Exxon shatters profit records
Oil giant makes corporate history by booking $11.7 billion in quarterly profit; earns $1,300 a second in 2007.
Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.
Exxon, the world’s largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. The company earned $10.25 billion, or $1.76 per share, in the year-ago period.
The profit topped Exxon’s previous quarterly record of $10.7 billion, set in the fourth quarter of 2005, which also was an all-time high for a U.S. corporation.”
In January 2009, during a severe economic crisis, the Washington Post reported:
“Exxon Mobil finished a roller-coaster year in the oil markets with an all-time record $45.2 billion in profits…
The world’s most far-flung oil giant broke its own record for corporate profits in a year that saw oil prices climb to $147 a barrel in July… Exxon Mobil still beat analysts’ expectations by registering $7.82 billion in profits, or $1.55 a share, for the final quarter of the year. Exxon Mobil and Chevron’s revenue combined for 2008 exceeded the gross domestic product of all but 16 of the world’s nations, according to Bloomberg.
Royal Dutch Shell, Europe’s largest oil firm… posted a $26.3 billion profit for the year.”
Once again, beyond these blatant examples of war profiteering, there are more insidious forces at play that most people don’t see. When you take a closer look at the oil profits, you see the true driver and ultimate beneficiary of these profits are none other than the same people who benefited the most from the stock market collapse and the ensuing $23.7 trillion taxpayer “bailout.”
As the Washington Post reported, the huge oil profit margins were the result of the soaring price of a barrel of oil, reaching “$147 a barrel in July.”
The InterContinental Exchange (ICE)
In 2000, Goldman Sachs, Morgan Stanley and several oil companies “founded the InterContinental Exchange (ICE)…. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate ‘dark pool’ trading in the commodities markets.”
A Congressional investigation into this exchange found that these companies were fraudulently inflating the price of oil by executing “round-trip” trades where one company would sell shares in oil to another company who would then sell the shares right back. This would drive the price of oil to however high they wanted it to go to. “No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.”
So when oil was selling at $147 a barrel, the actual worth was most likely closer to half that price. Phil’s Stock World summed up the situation:
“How widespread are ’round-trip’ trades? The Congressional Research Service looked at trading patterns in the energy sector and this is what they reported: This pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place. Yet since most of the trading is unregulated by the Government, we have only a slim idea of the illusion being perpetrated in the energy sector.
DMS Energy, when investigated by Congress, admitted that 80 percent of its trades in 2001 were ’round-trip’ trades. That means 80 percent of all of their trades that year were bogus trades where no commodity changed hands, and yet the balance sheets reflect added revenue…
…the InterContinental Exchange; that is, the online, nonregulated, nonaudited, nonoversight for manipulation and fraud entity run by banks in this country….
Under investigation, a lawyer for J.P. Morgan Chase admitted the bank engineered a series of ’round-trip’ trades with Enron….
ICE… turned commodity trading into a speculative casino game where pricing was notional and contracts could be sold by people who never produced a thing, to people who didn’t need the things that were not produced. And in just 5 years after commencing operations, Goldman Sachs and their partners managed to TRIPLE the price of commodities.
Goldman Sachs Commodity Index funds accounted for $60Bn out of $100Bn of all formula-managed funds in 2007 and investors in the GSCI lost 15% in 2006 while Goldman had a record year. John Dizard, of the Financial Times calls this process ‘date rape’ by Goldman Sachs…
It is not surprising that a commodity scam would be the cornerstone of Goldman Sach’s strategy. CEO Lloyd Blankfein, rose to the top through Goldman’s commodity trading arm J Aron, starting his career at J Aron before Goldman Sachs bought them over 25 years ago. With his colleague Gary Cohn, Blankfein oversaw the key energy trading portfolio. According to Chris Cook: ‘It appears clear that BP and Goldman Sachs have been working collaboratively – at least at a strategic level - for maybe 15 years now. Their trading strategy has evolved over time as the global market has developed and become ever more financialised. Moreover, they have been well placed to steer the development of the key global energy market trading platform, and the legal and regulatory framework within which it operates….
Before ICE, the average American family spent 7% of their income on food and fuel. Last year, that number topped 20%. That’s 13% of the incomes of every man, woman and child in the United States of America, over $1Tn EVERY SINGLE YEAR, stolen through market manipulation. On a global scale, that number is over $4Tn per year - 80 Madoffs! Why is there no outrage, why are there no investigations. Well the answer is the same - $4Tn per year buys you a lot of political clout, it pays to have politicians all over the world look the other way while GS and their merry men rob from the poor and give to the rich on such a vast scale that it’s hard to grasp the damage they have done and continue to do to the global economy.”
The congressional investigation into ICE concluded that they couldn’t do anything about it because the exchange was set up offshore.
How convenient!
So here we can see, that behind almost all of our societal problems and suffering, you have this small elite group profiting on destruction and misery at record highs.
When Gold Sachs CEO Llyod Blankfien says that he is doing “God’s work,” one has to wonder, who is the God he is praying to?
Famed two-time Congressional Medal of Honor recipient US Brigadier General Smedley D. Butler accurately summed up the situation when he said: “I spent 33 years in the Marines, most of my time being a high-class muscle man for big business, for Wall Street and the bankers. In short, I was a racketeer for Capitalism…. The general public shoulders the bill. This bill renders a horrible accounting. Newly placed gravestones, Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Back-breaking taxation for generations and generations.”
WHAT IT ALL COMES DOWN TO…
In the global economy, the economic elite don’t need the US public anymore. When you see Obama taking trips to meet with the leader of China, and having his first official White House State Dinner in honor of the Prime Minster of India, you should know that the elite have moved on. There are billions of people in just these two countries that they believe can do all the work we do for much less pay. It is a race to the bottom, and we are considered obsolete to technocratic leaders who think it is better to hire cheaper workers in foreign lands.
As the US continues to collapse, the technocrats have already moved on to the next country to rape and pillage. The economic elite don’t have a home country, to them the entire globe is theirs, and the majority of the US can collapse into poverty for all they care, and that’s exactly what they want to happen.
The US working class is the biggest threat to them and they want us eliminated.
As the IMF would say, there has been a structural adjustment program in place, and the US working class is obsolete.
When you understand this, you can understand how the wars in Iraq, Afghanistan and Pakistan are wars against the US public. Wars that weaken and drain the US working class of vital resources and social safety nets.
In the overall picture, the technocratic elite see everyone as a number on a spreadsheet. To them you are what your economic net worth says you are. Considering this perspective, most in the US public have much more in common with an Afghanistan farmer than the billionaires on Wall Street. And the billionaires have put us in the same category as those in Afghanistan. To them it really doesn’t matter if it’s an American life ended or an Afghani life ended in the war, as long as the profits keep coming in… they can care less.
Common sense and statistics demonstrate that the more troops you send into war, the higher the causality count will be, and the more costs will rise, leading, of course, to higher profits.
So as the Obama illusion and the motives behind this war become exposed, and the massive theft by the economic elite becomes known to a critical mass, the elite are ramping up their psychological operations on the US public by turning up their mainstream media distraction machine.
PSYOPS: WAG THE DOG AND SHAKE THE MOHAMMED
With the healthcare debate losing steam, and the people starting to understand that the final bill will do little to create much needed change, and as “health care reform” is exposed as another gift to insurance company executives, and as unemployment rates remain high, the Economic Death Squad vitally needs some new distractions.
Never mind the criminals on Wall Street: It’s time to… Wag the Dog and Shake the Mohammed
By Wag the Dog, I am of course referring to the old political trick of distracting public consciousness away from a crisis by starting, or in this case drastically escalating, a war.
Don’t worry about the $23.7 trillion of public wealth that was given to Wall Street as a reward for destroying the economy, we are at war and it’s time for you to support our troops.
Ah, yes, another racket to pile up more of the economic poor.
Barack W. Obama, once again, bows to… the elite… and serves up yet another gift by sending more US citizens to the Af-Pak region.
50 million US citizens are already living in dire straights, so what’s the big deal if you just throw another 220,000 US lives onto the fire, not to mention the millions of Afghani, Pakistani and Iraqi lives.
But a war in a distant land just isn’t enough, is it?
American public opinion has long been saturated in the distraction of war, and given the severity of the economic crisis, the elite policy makers figured another surge in Eurasia just wouldn’t be enough of a distraction.
So the psychological operations PR department has decided to also Shake the Muhammad. Yes, bring the 9/11 “mastermind,” Khalid Sheikh Mohammed, back to the scene of the crime and create a New York media frenzy. Now that’s a distraction!
Not only will it cause a media frenzy, it will also reaffirm public opinion in the war effort… win, win!
I don’t know about you, but as someone who grew up a New Yorker and spent the last five years of my life living three blocks from Ground Zero, I have to say, take your psychological operations to a different location.
You are going to have the “9/11 mastermind” in a courtroom right around the corner from the biggest terrorists of all… Wall Street.
Khalid Sheikh Mohammed, Llyod Blankfien, Jamie Dimon and John Mack are all going to be in one place, at the same time! We will have the “9/11 mastermind,” Goldman Sachs, JP Morgan and Morgan Stanley all in the same zip code… HELLO!
Can you say here comes the next Timothy McVeigh?
Yes, the USA… is an insane asylum! So just Wag the Dog and Shake the Mohammed.
U.S. Insurgency: Violent, Strategic Dislocation Within U.S.
Will there be a violent insurgency within the US?
As a growing number of American lives are directly negatively impacted, media propaganda operations will lose their ability to confuse and distract. Studies of societal breakdowns prove that having such a large population experiencing severe and prolonged economic decline will result in violent outbrakes.
Other than the 50 million US civilians living in dire straights, what will happen as thousands of bitter soldiers and US intelligence agents — who have given their lives to these wars, only to return home to find an economy in ruins and a healthcare system that has thrown them overboard — begin to make these connections and understand that a small group of men on Wall Street are at the root of their suffering?
Well, some former military and intelligence agents, including a growing number of current serving members, have already made this connection, and they are organizing, training and strategizing tactical operations. They are factions inside a quickly growing - heavily armed - militia movement that now numbers over 200 active cells, within the US.
The mainstream press gives some passing attention to the fringe factions that make threats against Obama, but the more experienced soldiers understand that he is just a figurehead and they have connected all these dots and have come to the conclusion that this war is actually a war to create profits for the economic elite at the expense of the US public.
Llyod Blankfein, Jamie Dimon and John Mack can arm themselves and hire all the security they can get, but will it actually keep them safe when you have a population of millions living in dire straights as a direct result of their actions? At this point, even their own security members may be conspiring against them.
The Obama illusion is fading fast. Every time you see through it, you get a glimpse of them. The Economic Death Squad is exposed under the bright light of inspection and investigation.
Take a look at many of the major problems facing us today, as a country and as a species, and then you will understand that these problems exist because the economic elite are profiting off of them.
Obama is just their mask, an illusion to pacify the masses. The economic crisis and the wars have now shattered this illusion - it has come crashing down… upon us.
It has become clear that an opinion has emerged among a growing segment of the United States population: If the government will keep pouring money into banks and war, and won’t stop the theft of US taxpayer money by holding accountable those responsible for it, WE MUST.
And the question that arises after that: Can it be done non-violently?
I certainly hope it can.
However, this growing segment of the population uses strong rhetoric and is prepared to take up arms.
With over 200 active militia cells, who are equipped with weapons, training and strategizing, the government must take swift action to rein in the economic elite. Otherwise, we are heading to war, not in a distant foreign land, within the US.
The economic elite are well aware of the threat of a violent uprising within US borders. US Army documents have revealed that strategic plans are already formed for this situation. Chris Hedges explains:
“The military must be prepared, the document warned, for a ‘violent, strategic dislocation inside the United States,’ which could be provoked by ‘unforeseen economic collapse,’ ‘purposeful domestic resistance,’ ‘pervasive public health emergencies’ or ‘loss of functioning political and legal order.’ The ‘widespread civil violence,’ the document said, ‘would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.’
‘An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home,’ it went on.
‘… this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance,’ the document read.
In plain English… this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.”
We could have a situation where the government deploys private soldiers, mostly foreign nationals, on US soil to fight against US citizens. Blackwater and DynCorp already had active duty soldiers deployed within the US when Hurricane Katrina hit.
In New Orleans, they were essentially a foreign occupying force.
LOSS OF FAITH IN POLITICAL PROCESS
In response to the report, “The Critical Unraveling of US Society,” readers primarily critiqued the part in which we call on readers to engage their representatives.
An irate majority of the responses have consistently stated that they have repeatedly contacted their representative through multiple forms of communication, and no action was taken. A growing segment of the US population has now lost all faith in our government and they are on the verge of taking violent action.
Personally, I believe that non-violent action is a much more strategic and effective move. We are 99% of the population, and the enemy is less than 1%. We are a sleeping giant; they are a small group of clueless greed-addicted people who desperately cling to the Administration, Treasury, Fed and a few other firms like Goldman Sachs and JP Morgan.
If we can take action on a mass non-violent scale, the rule of law and economic justice can be obtained. In our nation’s history, the stakes have never been higher. If we cannot organize a mass movement to non-violently oppose outright theft, then violence will ultimately tear our nation apart.
The question on my mind: Can we swiftly mobilize such a heavily propagandized population to take mass non-violent action?
A growing population does not believe we can do so, and is on the verge of launching a heavily armed insurgency.
So in the months ahead, while they are Wagging the Dog and Shaking the Mohammed, the US public vitally needs to understand that the stakes have never been higher.
And the clock is ticking . . .
~ AmpedStatus Report
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Af-Pak War Racket: The Obama Illusion Comes Crashing Down
Wednesday, December 2nd, 2009
By David DeGraw, AmpedStatus Report
Report Contents:
————I: Troop Deployments
————II: The Militarized Economy
————III: Masters of War
————IV: PsyOps: Wag the Dog and Shake the Mohammed
————V: U.S. Insurgency: Violent, Strategic Dislocation Within U.S.
The economic elite have escalated their attack on the U.S. public by surging military operations in Afghanistan and Pakistan.
As Obama announced plans for escalating the war effort, it has become clear that the Obama Illusion has taken yet another horrifying turn. Before explaining how the Af-Pak surge is a direct attack on the US public, let’s peer through the illusion and look at the reality of the situation.
Now that the much despised George W. Bush is out of the way and a more popular figurehead is doing PR for Dick Cheney’s right-hand military leader Gen. Stanley McChrystal, who is leading his second AF-Pak surge now, and with long time Bush family confidant Robert Gates still running the Defense Department, the masters of war have never had it so good.
Barack Obama, the anti-war candidate, has proven to be a perfect decoy for the military industrial complex. Consider all the opposition and bad press Bush received when he announced the surge in Iraq. Then consider this:
I: TROOP DEPLOYMENTS
The Bush surge in Iraq deployed an extra 28,000 US troops. Under Obama, back in March, a surge in Afghanistan, that also further escalated operations inside Pakistan, deployed an extra 21,000 troops. However, in an unannounced and underreported move, Obama added 13,000 more troops to that surge to bring the total to 34,000 troops. Obama actually outdid Bush’s surge by 6000 troops and brought the overall number of US troops in Afghanistan to 68,000, double the number there when Bush left office.
Where opposition was fierce to Bush’s surge, barely any opposition was expressed during Obama’s surge. Part of the reason for so little political and public backlash was the cleverly orchestrated psychological operation to announce the beginning of US troop withdrawal from Iraq. While the drawdown in Iraq has been greatly exaggerated in the US mainstream media, as of October, Obama still had 124,000 troops deployed in Iraq (not counting private military contractors).
When Obama casts the illusion of a 2011 withdrawal from Afghanistan, one just needs look at the reality of the situation with the over-hyped withdrawal in Iraq.
Now, with Obama’s latest surge announcement he will again be adding a minimum of another 30,000 US soldiers. This means that Obama has now led a bigger surge than Bush… on two separate occasions within the past nine months of his new administration.
Obama has now escalated deployments in the Af-Pak region to 98,000 US troops. So in Af-Pak and Iraq, he will now have a total of 222,000 US troops deployed, 36,000 more than Bush ever had - 186,000 was Bush’s highest total.
PRIVATE MILITARY AND NATO DEPLOYMENTS
The amount of private military contractors deployed in Iraq and Afghanistan is rarely reported on in the US mainstream press, but a Congressional Research Service investigation into this revealed that a record high 69% active duty soldiers are in fact private mercenaries.
Although the administration is yet to disclose how many private mercenaries will be deployed in the latest surge, it is believed that the 69% ratio will remain in tact.
The Pentagon released a report showing that Obama already had a total of 242,657 private contractors in action, as of June 30th. 119,706 of them in Iraq, 73,968 in Afghanistan, with 50,061 active in “other US CENTCOM locations.”
Back in June, Jeremy Scahill reported on these findings: “According to new statistics released by the Pentagon, with Barack Obama as commander in chief, there has been a 23% increase in the number of ‘Private Security Contractors’ working for the Department of Defense in Iraq in the second quarter of 2009 and a 29% increase in Afghanistan….”
Plus, we must mention, the immense dangers of having private military contractors as 69% of our fighting force. For those of you unaware, private military contractors are hired from all over the world. Any former soldier, from any country, is welcome to come and fight for a salary - a salary that is often significantly more than what we pay our own US soldiers.
These mercenaries have a vested interest in prolonging the war, for as long as there is a war, they have a well paying job. So it is easy to infer that a significant percentage of these contractors will not have the US soldiers, or US taxpayers, best interests at heart.
Obama continues to feed this out of control private army by pouring billions of taxpayer dollars into shady and scandalous companies like Blackwater, who recently changed their name to Xe Services, because they destroyed their reputation by committing numerous war crimes in Iraq. A recent investigation by Jeremy Scahill revealed the extent to which Blackwater is involved in covert operations inside Afghanistan and Pakistan. In some cases, Blackwater is not working for the US, but were hired by covert elements inside Pakistan. When it comes to private contractors, the fog of war grows ominous, exactly who is fighting for whom is unclear. The crucial factor is who paid them the most that particular day.
The US military can give them $1000 today, and an enemy can give them $1000 tomorrow, when you have people who fight for a payday and not for a country, you get chaos. This leads to a breakdown in the chain of command, effectively turning a military operation into a covert intelligence operation, where you’re never really sure if the person you are fighting with is on your side or not.
A federal investigation by the Commission on Wartime Contracting in Iraq and Afghanistan, revealed in June: “More than 240,000 contractor employees, about 80 percent of them foreign nationals, are working in Iraq and Afghanistan to support operations and projects of the U.S. military, the Department of State, and the U.S. Agency for International Development. Contractor employees outnumber U.S. troops in the region. While contractors provide vital services, the Commission believes their use has also entailed billions of dollars lost to waste, fraud, and abuse due to inadequate planning, poor contract drafting, limited competition, understaffed oversight functions, and other problems.”
Before this latest surge, there were over 123,000 US and NATO troops in the Af-Pak region, and 200,000 Afghan security forces, supporting the US effort. According to US intelligence sources the total number of Taliban and al-Qaida fighters in the region was estimated to only be about 25,000, giving the US led forces a minimum of a 12 to 1 troop advantage.
When you add in estimated private soldiers, you get an approximate minimum of a 17 to 1 advantage.
Although Obama opened his war speech by mentioning al-Qaida as the main justification for this war, consider this AP report: “national security adviser James Jones said last weekend that the al-Qaida presence has diminished, and he does not ‘foresee the return of the Taliban’ to power. He said that according to the maximum estimate, al-Qaida has fewer than 100 fighters operating in Afghanistan without any bases or ability to launch attacks on the West.”
Does it seriously take a surge of hundreds of thousands of troops to contain what amounts to “less than 100? al-Qaida members?
Any serious war strategist will tell you that the most effective way to combat the remains of the al-Qaida network, is through an intelligence operation, and statistics prove that escalating more troops into the region will only fuel further acts of terrorism.
DRONE DEPLOYMENTS
Speaking of fueling hatred toward the US, other than a huge troop increase, there has also been a sharp increase in the use of unmanned drones. The New Yorker reports: “According to a just completed study by the New America Foundation, the number of drone strikes has risen dramatically since Obama became President. During his first nine and a half months in office, he has authorized as many C.I.A. aerial attacks in Pakistan as George W. Bush did in his final three years in office.”
The unmanned drones have caused major controversy due to the high number of civilian causalities they cause. However, as the study stated, the Obama Administration continues to increasingly rely upon them.
So summing up these statistics, we have the most fierce and technologically advanced military force in history, vastly outnumbering what amounts to be a ragtag army of peasant farmers with guns, and our best option is supposed to be an increase in troop levels?
Obviously, something doesn’t add up.
After thinking about all of this, you begin to see through the smokescreen of what this war is said to be about and get a glimpse of some of the sinister forces at play here.
OVER EXTENDED TROOPS
With the rise in deployments, the US military is stretched to a breaking point. Obama is “deploying practically every available US Army brigade to war, leaving few units in reserve.”
As this war enters its 9th year, many soldiers are forced into deploying on their 3rd or 4th combat tours, and morale is fading fast.
The past year has seen a dramatic increase in US soldier deaths, with the number of wounded drastically rising as well. 928 US soldiers have died in Afghanistan thus far, with last month being the deadliest month since the start.
AP reports that “nearly four times as many troops were injured in October as a year ago. Amputations, burns, brain injuries and shrapnel wounds proliferate in Afghanistan, due mostly to crude, increasingly potent improvised bombs targeting U.S. forces…. Since 2007, more than 70,000 service members have been diagnosed with traumatic brain injury — more than 20,000 of them this year…”
US soldier suicides are also on the rise. In 2008, 197 army soldiers committed suicide. Thus far in 2009, there have been 211 army suicides.
McClatchy recently reported: “An Army task force has found that a growing number of soldiers serving in Afghanistan are suffering from some kind of mental stress and is urging the military to double the number of mental health professionals deployed there. The study, conducted by the Army Mental Health Advisory Team, found that soldiers’ morale in Afghanistan is ’significantly lower’ than it was in 2005 and 2007 studies…”
As wounded soldiers return from Afghanistan and Iraq, they are finding a healthcare system that is increasingly more difficult and costly to get care from. In fact, 2,266 US veterans died in 2008 due to lack of healthcare, and “researchers also found that, in 2008, 1,461,615 veterans between the ages of 18 and 64 lacked insurance.”
Despite all of this, in another devastating example of how the economy is unraveling US society, military enlistment levels have reached a high. In a report by the Washington Post headlined: “A Historic Success In Military Recruiting” they reveal:
“For the first time in more than 35 years, the U.S. military has met all of its annual recruiting goals, as hundreds of thousands of young people have enlisted despite the near-certainty that they will go to war.
The Pentagon… said the economic downturn and rising joblessness, as well as bonuses and other factors, had led more qualified youths to enlist. The military has not seen such across-the-board successes since the all-volunteer force was established.…
‘We delivered beyond anything the framers of the all-volunteer force would have anticipated,’ Bill Carr, deputy undersecretary of defense for military personnel policy, said at a Pentagon news conference.
Overall, the Defense Department brought in 168,900 active-duty troops, or 103 percent of the goal for the fiscal year….”
What we are witnessing here with such high enlistment levels during this economic crisis has many parallels to Germany in the 1930’s. Just like the United States now, the German economy in the 1930’s was devastated by an economic crisis brought on by Wall Street. With rising unemployment and poverty, German men turned to the military for income and health benefits that their family severely needed. With over 25 million US citizens unemployed and underemployed, over 50 million with no healthcare, and over 50 million living in poverty, military service is now a last resort for a growing number of desperate Americans as well. The record-breaking enlistment numbers are expected to continue to rise as the economy continues to decline.
“Such a perfect democracy constructs its own inconceivable foe, terrorism. Its wish is to be judged by its enemies rather than by its results.”
– Guy DeBord, Comments On the Society of the Spectacle, 1988
II: THE MILITARIZED ECONOMY
The amount of money necessary to keep the US military machine growing has reached astonishing levels. Considering the increasing amount of troops and contractors, the White House estimates that it spends one million dollars per soldier, per year in Afghanistan, “not including the added expense of training and maintaining a security force.”
According to these calculations, 30,000 troops for this latest surge will add an additional $30 billion to the annual budget, just in troop related costs. Also consider the price of moving fuel around, AFP reports: “Moving soldiers and supplies across the rugged Afghan landscape costs more than in Iraq, with the military consuming 83 liters or 22 gallons of fuel per soldier per day.” The Hill adds: “Pentagon officials have told the House Appropriations Defense Subcommittee a gallon of fuel costs the military about $400 by the time it arrives in the remote locations in Afghanistan where U.S. troops operate.”
Other than in Iraq and Afghanistan, you have an unprecedented number of military bases spread throughout the world. Officially there are “900 military facilities in 46 countries and territories (the unofficial figure is far greater). The US military owns or rents 795,000 acres of land, with 26,000 buildings and structures, valued at $146bn. The bases bristle with an inventory of weapons whose worth is measured in the trillions and whose killing power could wipe out all life on earth several times over. The official figures exclude the huge build-up of troops and structures in Iraq and Afghanistan over the past decade, as well as secret or unacknowledged facilities in Israel, Kuwait, the Philippines and many other places. In just three years of the Iraq and Afghanistan wars, £2bn was spent on military construction.”
There was public outcry when Bush drastically raised an already bloated military budget to record highs. But in comes the admired anti-war candidate Obama, in the middle of a severe economic crisis, and what happens? Obama drastically increased Bush’s record budget to $651 billion in 2009. Yes, during a severe economic crisis, Obama actually increased Bush’s budget. US military spending is higher than the rest of the world combined. The 2010 budget, which doesn’t account for war-related spending yet, is already set to grow to $680 billion.
However, these budget numbers are deceiving because the Obama Administration has been getting better at hiding extra spending in other budget items. The actual total 2009 budget was over $1 trillion.
And much like the staggering giveaway to the economic elite in the Wall Street banker bailout, no one is really sure where a significant percentage of this money is actually going. On September 10, 2001, Donald Rumsfeld announced that $2.3 trillion in military spending was unaccounted for. As CBS News reported: “$2.3 trillion - that’s $8,000 for every man, woman and child in America.”
At that time, Pentagon auditors admitted that they couldn’t account for a staggering 25% of all military spending. And the budget has exploded since then, with fewer people accounting for where this money is going.
Once again, just like the $23.7 trillion that went into propping up the Wall Street elite - which totals $80,000 for every American - you have trillions more in taxpayer money vanishing and very few regulating and accounting for it.
Other than this staggering loss of taxpayer money, any serious economist will tell you “that military spending increases unemployment and decreases economic growth.”
Economists Joseph E. Stiglitz and Linda J. Bilmes, in their book “The Three Trillion Dollar War,” report that military spending on the war in Iraq has created over a trillion dollars in loses to the US economy.
On top of all the looting of taxpayer money that is occurring, “several powerful House committee chairmen have proposed a surtax on Americans to pay the future military costs.”
With the country already operating at a record $12 trillion deficit, members of congress don’t know how we can afford increasing an already huge war expenditure.
WEAPONS SALES
In this struggling economy, weapon sales have become one of America’s most booming businesses. US weapon sales have hit a record level under the Obama administration. Foreign Policy In Focus reports:
“In fiscal year 2008, the foreign military sales program sold $36 billion in weapons and defense articles, an increase of more than 50% over 2007. Sales for the first half of 2009 reached $27 billion, and could top out at $40 billion by the end of the year. In contrast, through the early 2000s, arms sales averaged between $8-13 billion per year….
But last year, the United States sold arms or military services to well over 100 nations….
… the majority of U.S. arms sales to the developing world went to countries that our own State Department defined as undemocratic regimes and/or major human rights abusers. And over two-thirds of the world’s active conflicts involved weapons that had been supplied by the United States.”
Selling all these weapons, especially during the biggest global financial crisis, will lead to one thing… terrorism.
Given these statistics, it shouldn’t be a surprise to hear how US taxpayer dollars are still funding the Taliban. Prior to the 9/11 attacks, the Taliban government was funded by the US taxpayer. In fact, the Taliban still receives a significant portion of their funding courtesy of the US taxpayer. As The Nation recently reported: “It is an accepted fact of the military logistics operation in Afghanistan that the US government funds the very forces American troops are fighting. And it is a deadly irony, because these funds add up to a huge amount of money for the Taliban. ‘It’s a big part of their income,’ one of the top Afghan government security officials told The Nation in an interview. In fact, US military officials in Kabul estimate that a minimum of 10 percent of the Pentagon’s logistics contracts–hundreds of millions of dollars–consists of payments to insurgents.”
As former CIA Station Chief John Stockwell explained: “Enemies are necessary for the wheels of the US military machine to turn.”
With the war in Afghanistan now entering it’s 9th year, senior military commanders and a growing number of experts have come to the conclusion that this war is unwinnable and will fuel terrorism.
However, they all seem to be missing the point, before explaining this in more detail, let me start by referring you to a quote from a journalist who had firsthand experience operating inside a militaristic empire:
“The war is not supposed to be winnable, it is supposed to be continuous… all for the hierarchy of society… The essential act of war is destruction, not necessarily of human lives, but of the products of human labor. War is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable, and hence, in the long run, too intelligent… it helps to preserve the special mental atmosphere that a hierarchical society needs. War… is now a purely internal affair.” — George Orwell
III: MASTERS OF WAR
“Come you masters of war
You that build all the guns
You that build the death planes
You that hide behind walls
You that hide behind desks
I just want you to know,
I can see through your mask…”
Many of the weapons manufactures and private military contractors are seen as the primary war profiteers. For an example of grotesque war profiteering, let’s look at Dick Cheney’s former company Halliburton. In a report headlined: “U.S. War Privatization Results in Billions Lost in Fraud, Waste and Abuse,” Jeremy Scahill reports on KBR, a Halliburton subsidiary.
“KBR has been paid nearly $32 billion since 2001. In May, April Stephenson, director of the Defense Contract Audit Agency, testified that KBR was linked to ‘the vast majority’ of war-zone fraud cases and a majority of the $13 billion in ‘questioned’ or ‘unsupported’ costs. According to Agency, it sent the inspector general ‘a total of 32 cases of suspected overbilling, bribery and other violations since 2004.
According to the Associated Press, which obtained an early copy of the commission’s report, ‘billions of dollars’ of the total paid to KBR ‘ended up wasted due to poorly defined work orders, inadequate oversight and contractor inefficiencies.’
KBR is at the center of a lethal scandal involving the electrocution deaths of more than a dozen US soldiers, allegedly as a result of faulty electrical work done by the company. The DoD paid KBR more than $80 million in bonuses for the very work that resulted in the electrocution deaths.”
With numerous scandals over KBR operations, Halliburton ended it’s relationship with the company. However, “Halliburton reported $4 billion in operating profits in 2008, while KBR recently said its first quarter revenues in 2009 were up 27%, for a total of $3.2 billion. Its sales in 2008 were up 33%, and according to the Financial Times, the company had $1 billion in cash, no debt, and was looking for acquisitions.”
Beyond these blatant examples of war profiteering, there are more insidious forces at play that most people don’t see. These war profiteering companies are funded by the same banks that have destroyed the US economy.
Consider this example concerning Alliant Techsystems and Textron, two manufactures of cluster bombs, the controversial civilian killing WMDs. The Guardian reported:
“The deadly trade in cluster bombs is funded by the world’s biggest banks who have loaned or arranged finance worth $20bn to firms producing the controversial weapons, despite growing international efforts to ban them…
Goldman Sachs, the US bank which made £3.19bn profit in just three months, earned $588.82m for bank services and lent $250m to Alliant Techsystems and Textron…
Last December 90 countries, including the UK, committed themselves to banning cluster bombs by next year. But the US was not one of them. So far 23 countries have ratified the convention.”
Before going into further detail on how these banks make a lion’s share of war profits, let’s look back at the origins of these wars.
GEO-STRATEGIC OIL OPERATIONS
With all due respect to people who have been force-fed Pentagon propaganda by the US mainstream media, any serious observer of the Iraq and Af-Pak wars knows that these are geo-strategic conflicts based on controlling the world’s oil supply. Anyone in the “news” media who tells you otherwise is either unaware of what is actually going on, or is a well-paid propagandist working for the very people who profit off of them.
ORIGINS OF THE IRAQ OCCUPATION: CHENEY ENERGY TASK FORCE
As an AlterNet report put it: “In January 2000, 10 days into President George W. Bush’s first term, representatives of the largest oil and energy companies joined the new administration to form the Cheney Energy Task Force.”
Secret Task Force documents that were dated March 2001, which were obtained by Judical Watch in 2003 after a Freedom of Information Act lawsuit, contained “a map of Iraqi oilfields, pipelines, refineries and terminals, as well as two charts detailing Iraqi oil and gas projects…” They also had:
“… a series of lists titled ‘Foreign Suitors for Iraqi Oilfield Contracts‘ naming more than 60 companies from some 30 countries with contracts in various stages of negotiation.
None of contracts were with American nor major British companies, and none could take effect while the U.N. Security Council sanctions against Iraq remained in place. Three countries held the largest contracts: China, Russia and France — all members of the Security Council and all in a position to advocate for the end of sanctions.
Were Saddam to remain in power and the sanctions to be removed, these contracts would take effect, and the U.S. and its closest ally would be shut out of Iraq’s great oil bonanza.”
Project Censored highlighted a Judicial Watch report that stated: “Documented plans of occupation and exploitation predating September 11 confirm heightened suspicion that U.S. policy is driven by the dictates of the energy industry. According to Judicial Watch President, Tom Fitton, ‘These documents show the importance of the Energy Task Force and why its operations should be open to the public.’”
ORIGINS OF THE AFGHANISTAN OCCUPATION: “STRATEGY OF THE SILK ROUTE”
Up until 9/11, oil companies, with the help of the Bush administration, were desperately trying to work out a deal with the Taliban to build an oil pipeline through Afghanistan. One of the world’s richest oil fields is on the eastern shore of the Caspian sea just north of Afghanistan. The Caspian oil reserves are of top strategic importance in the quest to control the earth’s remaining oil supply. The US government developed a policy called “The Strategy of the Silk Route.”
The policy was designed to lock out Russia, China and Iran from the oil in this region. This called for U.S. corporations to construct an oil pipeline running through Afghanistan. Since the mid 1990s, a consortium of U.S. companies led by Unocal have been pursing this goal. A feasibility study of the Central Asian pipeline project was performed by Enron. Their study concluded that as long as the country was split among fighting warlords the pipeline could not be built. Stability was necessary for the $4.5 billion project and the U.S. believed that the Taliban would impose the necessary order. The U.S. State Department and Pakistan’s ISI, impressed by the Taliban movement to cut a pipeline deal, agreed to funnel arms and funding to the Taliban in their war for control of Afghanistan.
“Until 1999 U.S. taxpayers paid the entire annual salary of every single Taliban government official.”
The U.S., Saudi and Pakistan intelligence alliance that created the terrorist financing bank BCCI reunited to facilitate the rise of the Taliban. BCCI was a US intelligence bank, which served as the financing arm for the creation of the al-Qaida network. BCCI was involved in many covert operations throughout the 80’s and early 90’s. They played a pivotal role in arming Saddam in Iraq, the Iran-Contra scandal, the Iran hostage crisis, even selling drugs through Manuel Noriega and other top drug dealers. BCCI gave nuclear weapons to Pakistan, which led to North Korea and Iran obtaining pivotal nuclear secrets as well. BCCI was also a driving force behind the Savings and Loan scandals that were a precursor to our current economic crisis.
Focusing on the creation of the Taliban, let’s read an excerpt from a 2003 book, “ Modern Jihad: Tracing the Dollars Behind the Terror Networks,” by Loretta Napoleoni:
“The alliance between American capitalism and Islamist fundamentalism is not limited to the creation of the Taliban; it also produced business ventures designed to extract favours from the new regime. To strengthen its bargaining power with the newly formed Islamist state, Unocal joined the Saudi Delta Oil Corporation to create a consortium called CentGas. Delta Oil is owned by the bin Mahfouz and al-Amoudi families [pivotal BCCI players], Saudi clans which have strong links with Osama bin Laden’s family…. Mahfouz has been sponsoring charitable institutions used as fronts for bin Laden’s associates through the National Commercial Bank, which his family controls….
Naturally, as soon as George W. Bush was elected president, Unocal and [UK’s] BP-Amoco… started once again to lobby the administration, among whom were several of their former employees. Unocal knew that Bush was ready to back them and resumed the consortium negotiations. In January 2001, it began discussions with the Taliban, backed by members of the Bush administration among whom was Under Secretary of State Richard Armitage, who had previously worked as a lobbyist for Unocal. The Taliban, for their part, employed as their PR officer in the US Laila Helms, niece of Richard Helms, former director of the CIA and former US ambassador to Iran. In March 2001, Helms succeeded in bringing Rahmatullah Hashami, Mullah Omar’s adviser, to Washington…. As late as August 2001, meetings were held in Pakistan to discuss the pipeline business….
While negotiations were underway, the US was secretly making plans to invade Afghanistan. The Bush administration and its oil sponsors were losing patience with the Taliban; they wanted to get the Central Asian gas pipeline going as soon as possible. The ‘strategy of the Silk Route’ had been resumed….
Paradoxically, 11 September provided Washington with a casus belli to invade Afghanistan and establish a pro American government in the country. When, a few weeks after the attack, the leaders of the two Pakistani Islamist parties negotiated with Mullah Omar and bin Laden for the latter’s extradition to Pakistan to stand trial for the 11 September attacks, the US refused the offer….
In November 2001… Hamid Karzai was elected [Afghanistan’s] prime minister… Yet very few people remember that during the 1990’s Karzai was involved in negotiations with the Taliban regime for the construction of a Central Asian gas pipeline from Turkmenistan through western Afghanistan to Pakistan. At that time he was a top adviser and lobbyist for Unocal… during the anti-Soviet jihad, Karzai was a member of the Mujahedin. In the early 1990’s, thanks to his excellent contacts with the ISI, he moved to the US where he cooperated with the CIA and the ISI in supporting the Taliban’s political adventure.”
So it is not all that surprising to see recent reports revealing that Hamid Karzai’s drug kingpin brother, Ahmed Wali Karzai, is also on the CIA payroll.
With this, a new Senate investigation just revealed evidence that Donald Rumsfeld made a conscious strategic decision to let Bin Laden escape. AFP reports:
“Osama bin Laden was within the grasp of US forces in late 2001 and could have been caught if then-defense secretary Donald Rumsfeld hadn’t rejected calls for reinforcements, a hard-hitting US Senate report says….
It points the finger directly at Rumsfeld for turning down requests for reinforcements as Bin Laden was trapped in caves and tunnels in a mountainous section of eastern Afghanistan known as Tora Bora.
‘The vast array of American military power, from sniper teams to the most mobile divisions of the marine corps and the army, was kept on the sidelines,’ the report said.”
So now that we see how these wars are driven by oil, let’s look at how the oil industry is benefiting from them. Since the invasion, the industry has experienced record profits across the board, setting new profit records quarter after quarter, year after year, as these wars rage on.
IRAQI OIL DEALS
With Exxon and Shell just signing new oil contracts in Iraq, it’s obvious why there are still over 100,000 troops in Iraq. In a Daily Mirror report headlined, “Oil Billions and Weapons of Mass Deception In Iraq,” they report on the new oil deals:
“Exxon-Mobil and Royal Dutch Shell won the development rights of a massive oil field — West Qurna near Basra in Iraq’s south. The two oil giants hope to boost daily production from the current 300,000 barrels to 2.3 million barrels a day at West Qurna, which the ousted and hanged Iraqi President Saddam Hussein wanted to give to a Russian oil company.
Last month, British Petroleum (BP) and the China National Petroleum Corporation (CNPC) won a contract to develop another oil field. The invitation to China to join the plunder of Iraq is probably a payoff by the US so that this Asian economic powerhouse and rising military power would not rock the pirates’ boat.”
Let’s look back over the years since the start of the War on Terror, here’s a 2005 MSNBC report:
“By just about any measure, the past three years have produced one of the biggest cash gushers in the oil industry’s history. Since January of 2002, the price of crude has tripled, leaving oil producers awash in profits. During that period, the top 10 major public oil companies have sold some $1.5 trillion worth of crude, pocketing profits of more than $125 billion.
“This is the mother of all booms,” said Oppenheimer & Co. oil analyst Fadel Gheit. “They have so much profit, it’s almost an embarrassment of riches. They don’t know what to do with it.
So an oil field that was profitable with oil selling for $20 a barrel is much more profitable with oil trading around $60…. Since January 2002, stocks of major oil companies have gained 88 percent; during that period the Standard and Poor’s 500 index has gained less than half as much.
Oil producers have also given investors a raise by gradually increasing the dividends paid out to shareholders.”
Here’s a 2007 Public Citizen report summing up oil company wartime profits:
“Since George Bush became President in 2001, the top five oil companies in the United States have recorded profits of $464 billion through the first quarter of 2007:
ExxonMobil: $158.5 billion
Shell: $108.5 billion
BP: $89.2 billion
ChevronTexaco: $60.9 billion
ConocoPhillips: $46.9 billion”
In Febuary 2008, CNN reported:
“Exxon shatters profit records
Oil giant makes corporate history by booking $11.7 billion in quarterly profit; earns $1,300 a second in 2007.
Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.
Exxon, the world’s largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. The company earned $10.25 billion, or $1.76 per share, in the year-ago period.
The profit topped Exxon’s previous quarterly record of $10.7 billion, set in the fourth quarter of 2005, which also was an all-time high for a U.S. corporation.”
In January 2009, during a severe economic crisis, the Washington Post reported:
“Exxon Mobil finished a roller-coaster year in the oil markets with an all-time record $45.2 billion in profits…
The world’s most far-flung oil giant broke its own record for corporate profits in a year that saw oil prices climb to $147 a barrel in July… Exxon Mobil still beat analysts’ expectations by registering $7.82 billion in profits, or $1.55 a share, for the final quarter of the year. Exxon Mobil and Chevron’s revenue combined for 2008 exceeded the gross domestic product of all but 16 of the world’s nations, according to Bloomberg.
Royal Dutch Shell, Europe’s largest oil firm… posted a $26.3 billion profit for the year.”
Once again, beyond these blatant examples of war profiteering, there are more insidious forces at play that most people don’t see. When you take a closer look at the oil profits, you see the true driver and ultimate beneficiary of these profits are none other than the same people who benefited the most from the stock market collapse and the ensuing $23.7 trillion taxpayer “bailout.”
As the Washington Post reported, the huge oil profit margins were the result of the soaring price of a barrel of oil, reaching “$147 a barrel in July.”
The InterContinental Exchange (ICE)
In 2000, Goldman Sachs, Morgan Stanley and several oil companies “founded the InterContinental Exchange (ICE)…. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate ‘dark pool’ trading in the commodities markets.”
A Congressional investigation into this exchange found that these companies were fraudulently inflating the price of oil by executing “round-trip” trades where one company would sell shares in oil to another company who would then sell the shares right back. This would drive the price of oil to however high they wanted it to go to. “No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.”
So when oil was selling at $147 a barrel, the actual worth was most likely closer to half that price. Phil’s Stock World summed up the situation:
“How widespread are ’round-trip’ trades? The Congressional Research Service looked at trading patterns in the energy sector and this is what they reported: This pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place. Yet since most of the trading is unregulated by the Government, we have only a slim idea of the illusion being perpetrated in the energy sector.
DMS Energy, when investigated by Congress, admitted that 80 percent of its trades in 2001 were ’round-trip’ trades. That means 80 percent of all of their trades that year were bogus trades where no commodity changed hands, and yet the balance sheets reflect added revenue…
…the InterContinental Exchange; that is, the online, nonregulated, nonaudited, nonoversight for manipulation and fraud entity run by banks in this country….
Under investigation, a lawyer for J.P. Morgan Chase admitted the bank engineered a series of ’round-trip’ trades with Enron….
ICE… turned commodity trading into a speculative casino game where pricing was notional and contracts could be sold by people who never produced a thing, to people who didn’t need the things that were not produced. And in just 5 years after commencing operations, Goldman Sachs and their partners managed to TRIPLE the price of commodities.
Goldman Sachs Commodity Index funds accounted for $60Bn out of $100Bn of all formula-managed funds in 2007 and investors in the GSCI lost 15% in 2006 while Goldman had a record year. John Dizard, of the Financial Times calls this process ‘date rape’ by Goldman Sachs…
It is not surprising that a commodity scam would be the cornerstone of Goldman Sach’s strategy. CEO Lloyd Blankfein, rose to the top through Goldman’s commodity trading arm J Aron, starting his career at J Aron before Goldman Sachs bought them over 25 years ago. With his colleague Gary Cohn, Blankfein oversaw the key energy trading portfolio. According to Chris Cook: ‘It appears clear that BP and Goldman Sachs have been working collaboratively – at least at a strategic level - for maybe 15 years now. Their trading strategy has evolved over time as the global market has developed and become ever more financialised. Moreover, they have been well placed to steer the development of the key global energy market trading platform, and the legal and regulatory framework within which it operates….
Before ICE, the average American family spent 7% of their income on food and fuel. Last year, that number topped 20%. That’s 13% of the incomes of every man, woman and child in the United States of America, over $1Tn EVERY SINGLE YEAR, stolen through market manipulation. On a global scale, that number is over $4Tn per year - 80 Madoffs! Why is there no outrage, why are there no investigations. Well the answer is the same - $4Tn per year buys you a lot of political clout, it pays to have politicians all over the world look the other way while GS and their merry men rob from the poor and give to the rich on such a vast scale that it’s hard to grasp the damage they have done and continue to do to the global economy.”
The congressional investigation into ICE concluded that they couldn’t do anything about it because the exchange was set up offshore.
How convenient!
So here we can see, that behind almost all of our societal problems and suffering, you have this small elite group profiting on destruction and misery at record highs.
When Gold Sachs CEO Llyod Blankfien says that he is doing “God’s work,” one has to wonder, who is the God he is praying to?
Famed two-time Congressional Medal of Honor recipient US Brigadier General Smedley D. Butler accurately summed up the situation when he said: “I spent 33 years in the Marines, most of my time being a high-class muscle man for big business, for Wall Street and the bankers. In short, I was a racketeer for Capitalism…. The general public shoulders the bill. This bill renders a horrible accounting. Newly placed gravestones, Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Back-breaking taxation for generations and generations.”
WHAT IT ALL COMES DOWN TO…
In the global economy, the economic elite don’t need the US public anymore. When you see Obama taking trips to meet with the leader of China, and having his first official White House State Dinner in honor of the Prime Minster of India, you should know that the elite have moved on. There are billions of people in just these two countries that they believe can do all the work we do for much less pay. It is a race to the bottom, and we are considered obsolete to technocratic leaders who think it is better to hire cheaper workers in foreign lands.
As the US continues to collapse, the technocrats have already moved on to the next country to rape and pillage. The economic elite don’t have a home country, to them the entire globe is theirs, and the majority of the US can collapse into poverty for all they care, and that’s exactly what they want to happen.
The US working class is the biggest threat to them and they want us eliminated.
As the IMF would say, there has been a structural adjustment program in place, and the US working class is obsolete.
When you understand this, you can understand how the wars in Iraq, Afghanistan and Pakistan are wars against the US public. Wars that weaken and drain the US working class of vital resources and social safety nets.
In the overall picture, the technocratic elite see everyone as a number on a spreadsheet. To them you are what your economic net worth says you are. Considering this perspective, most in the US public have much more in common with an Afghanistan farmer than the billionaires on Wall Street. And the billionaires have put us in the same category as those in Afghanistan. To them it really doesn’t matter if it’s an American life ended or an Afghani life ended in the war, as long as the profits keep coming in… they can care less.
Common sense and statistics demonstrate that the more troops you send into war, the higher the causality count will be, and the more costs will rise, leading, of course, to higher profits.
So as the Obama illusion and the motives behind this war become exposed, and the massive theft by the economic elite becomes known to a critical mass, the elite are ramping up their psychological operations on the US public by turning up their mainstream media distraction machine.
PSYOPS: WAG THE DOG AND SHAKE THE MOHAMMED
With the healthcare debate losing steam, and the people starting to understand that the final bill will do little to create much needed change, and as “health care reform” is exposed as another gift to insurance company executives, and as unemployment rates remain high, the Economic Death Squad vitally needs some new distractions.
Never mind the criminals on Wall Street: It’s time to… Wag the Dog and Shake the Mohammed
By Wag the Dog, I am of course referring to the old political trick of distracting public consciousness away from a crisis by starting, or in this case drastically escalating, a war.
Don’t worry about the $23.7 trillion of public wealth that was given to Wall Street as a reward for destroying the economy, we are at war and it’s time for you to support our troops.
Ah, yes, another racket to pile up more of the economic poor.
Barack W. Obama, once again, bows to… the elite… and serves up yet another gift by sending more US citizens to the Af-Pak region.
50 million US citizens are already living in dire straights, so what’s the big deal if you just throw another 220,000 US lives onto the fire, not to mention the millions of Afghani, Pakistani and Iraqi lives.
But a war in a distant land just isn’t enough, is it?
American public opinion has long been saturated in the distraction of war, and given the severity of the economic crisis, the elite policy makers figured another surge in Eurasia just wouldn’t be enough of a distraction.
So the psychological operations PR department has decided to also Shake the Muhammad. Yes, bring the 9/11 “mastermind,” Khalid Sheikh Mohammed, back to the scene of the crime and create a New York media frenzy. Now that’s a distraction!
Not only will it cause a media frenzy, it will also reaffirm public opinion in the war effort… win, win!
I don’t know about you, but as someone who grew up a New Yorker and spent the last five years of my life living three blocks from Ground Zero, I have to say, take your psychological operations to a different location.
You are going to have the “9/11 mastermind” in a courtroom right around the corner from the biggest terrorists of all… Wall Street.
Khalid Sheikh Mohammed, Llyod Blankfien, Jamie Dimon and John Mack are all going to be in one place, at the same time! We will have the “9/11 mastermind,” Goldman Sachs, JP Morgan and Morgan Stanley all in the same zip code… HELLO!
Can you say here comes the next Timothy McVeigh?
Yes, the USA… is an insane asylum! So just Wag the Dog and Shake the Mohammed.
U.S. Insurgency: Violent, Strategic Dislocation Within U.S.
Will there be a violent insurgency within the US?
As a growing number of American lives are directly negatively impacted, media propaganda operations will lose their ability to confuse and distract. Studies of societal breakdowns prove that having such a large population experiencing severe and prolonged economic decline will result in violent outbrakes.
Other than the 50 million US civilians living in dire straights, what will happen as thousands of bitter soldiers and US intelligence agents — who have given their lives to these wars, only to return home to find an economy in ruins and a healthcare system that has thrown them overboard — begin to make these connections and understand that a small group of men on Wall Street are at the root of their suffering?
Well, some former military and intelligence agents, including a growing number of current serving members, have already made this connection, and they are organizing, training and strategizing tactical operations. They are factions inside a quickly growing - heavily armed - militia movement that now numbers over 200 active cells, within the US.
The mainstream press gives some passing attention to the fringe factions that make threats against Obama, but the more experienced soldiers understand that he is just a figurehead and they have connected all these dots and have come to the conclusion that this war is actually a war to create profits for the economic elite at the expense of the US public.
Llyod Blankfein, Jamie Dimon and John Mack can arm themselves and hire all the security they can get, but will it actually keep them safe when you have a population of millions living in dire straights as a direct result of their actions? At this point, even their own security members may be conspiring against them.
The Obama illusion is fading fast. Every time you see through it, you get a glimpse of them. The Economic Death Squad is exposed under the bright light of inspection and investigation.
Take a look at many of the major problems facing us today, as a country and as a species, and then you will understand that these problems exist because the economic elite are profiting off of them.
Obama is just their mask, an illusion to pacify the masses. The economic crisis and the wars have now shattered this illusion - it has come crashing down… upon us.
It has become clear that an opinion has emerged among a growing segment of the United States population: If the government will keep pouring money into banks and war, and won’t stop the theft of US taxpayer money by holding accountable those responsible for it, WE MUST.
And the question that arises after that: Can it be done non-violently?
I certainly hope it can.
However, this growing segment of the population uses strong rhetoric and is prepared to take up arms.
With over 200 active militia cells, who are equipped with weapons, training and strategizing, the government must take swift action to rein in the economic elite. Otherwise, we are heading to war, not in a distant foreign land, within the US.
The economic elite are well aware of the threat of a violent uprising within US borders. US Army documents have revealed that strategic plans are already formed for this situation. Chris Hedges explains:
“The military must be prepared, the document warned, for a ‘violent, strategic dislocation inside the United States,’ which could be provoked by ‘unforeseen economic collapse,’ ‘purposeful domestic resistance,’ ‘pervasive public health emergencies’ or ‘loss of functioning political and legal order.’ The ‘widespread civil violence,’ the document said, ‘would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.’
‘An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home,’ it went on.
‘… this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance,’ the document read.
In plain English… this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.”
We could have a situation where the government deploys private soldiers, mostly foreign nationals, on US soil to fight against US citizens. Blackwater and DynCorp already had active duty soldiers deployed within the US when Hurricane Katrina hit.
In New Orleans, they were essentially a foreign occupying force.
LOSS OF FAITH IN POLITICAL PROCESS
In response to the report, “The Critical Unraveling of US Society,” readers primarily critiqued the part in which we call on readers to engage their representatives.
An irate majority of the responses have consistently stated that they have repeatedly contacted their representative through multiple forms of communication, and no action was taken. A growing segment of the US population has now lost all faith in our government and they are on the verge of taking violent action.
Personally, I believe that non-violent action is a much more strategic and effective move. We are 99% of the population, and the enemy is less than 1%. We are a sleeping giant; they are a small group of clueless greed-addicted people who desperately cling to the Administration, Treasury, Fed and a few other firms like Goldman Sachs and JP Morgan.
If we can take action on a mass non-violent scale, the rule of law and economic justice can be obtained. In our nation’s history, the stakes have never been higher. If we cannot organize a mass movement to non-violently oppose outright theft, then violence will ultimately tear our nation apart.
The question on my mind: Can we swiftly mobilize such a heavily propagandized population to take mass non-violent action?
A growing population does not believe we can do so, and is on the verge of launching a heavily armed insurgency.
So in the months ahead, while they are Wagging the Dog and Shaking the Mohammed, the US public vitally needs to understand that the stakes have never been higher.
And the clock is ticking . . .
~ AmpedStatus Report
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Monday, October 12, 2009
GOP votes against measure to help victims of rape
http://rawstory.com/2009/10/gop-votes-against-prevent-rape/GOP votes against measure to help victims of rape at govt. contractors
By Daniel Tencer
Wednesday, October 7th, 2009
Political commentators are accusing Senate Republicans of hypocrisy -- and even outright support of rape -- after thirty of them voted against a measure to de-fund military contractors who prevent rape victims from seeking justice.
Sen. Al Franken (D-MN) introduced an amendment to a defense appropriations bill that would prevent the federal government from funding contractors whose employee contracts prevent workers from pursuing allegations of rape against co-workers.
The measure passed the Senate by a vote of 68 to 30, with all 30 'no' votes being cast by Republicans. Notably, 10 Senate Republicans voted for the measure, including all four female Republican senators.
Franken was inspired to push the amendment by the story of Jamie Leigh Jones, who was an employee of KBR -- at the time a subsidiary of Halliburton -- working in Baghdad's Green Zone when she was allegedly gang-raped by other KBR workers.
In a harrowing expose, ABC News recounted how Jones was locked in a shipping container, denied access to communication with the outside world, and told she would lose her job if she left Iraq or sought medical attention.
As RAW STORY reported last month, Jones recently won the right to sue KBR over her ordeal.
Until 2007, KBR was a subsidiary of Halliburton, the company run by Dick Cheney until he resigned as CEO to become vice-president of the United States. It was that connection to partisan politics that evidently led a majority of Senate Republicans to vote against the measure.
Sen. Jeff Sessions, Republican of Alabama, called Franken's measure "a political attack directed at Halliburton."
Indeed, Franken's amendment names Halliburton and KBR directly, but also states the regulation applies to "any other contracting party."
But that has not stopped political commentators from attacking Senate Republicans for what they see as a vote for rape, and against justice for women.
At his DailyKos blog, Markos Moulitsas writes:
This is interesting. According to Republicans, a fake pimp and ho, reported to the police, was apparently so beyond the pale that they've worked to strip ACORN of all federal funding. But denying employees actual redress from gang rapes is no big deal?
Will the GOP soon introduce a new Constitution Amendment that reads, "Congress shall make no law respecting the ability of corporations to gang rape their employees"? Is support for corporate gang rape already in the GOP platform, or does it need to be added at their next meeting? Is there a huge corporate gang rape lobby that is funneling millions into GOP pockets, or did they vote this way out of personal conviction?
Laura Clawson, also writing at DailyKos, states:
To summarize the Republican position: As women, we are not "average Americans," and gang rape is not a "serious" issue. As women, no matter how powerful we become on our own merits, the Republican establishment will still be hoping for a man to come along and put us in our place.
You don't have to go very far beneath the Republican surface claims of equality-but-not-really to get to the rock-bottom sense that women just don't count, that our rights and our wellbeing are always subordinate to whatever interest of men they might conflict with. When it comes to it, even the (themselves sexist) notions of chivalry and protecting women come behind protecting the right of corporations to imprison their female employees to shield their male employees from rape charges and still get government contracts.
For her part, Jamie Leigh Jones seems pleased that Franken's amendment passed, regardless of who voted against it.
"It means that every tear shed to go public and repeat my story over and over again to make a difference for other women was worth it," she said on Tuesday outside the Senate chamber, after hugging Sen. Franken and telling him: "Way to go."
Wednesday, November 19, 2008
The New Trough
http://www.rollingstone.com/politics/story/24012700/the_new_trough
The New Trough
The Wall Street bailout looks a lot like Iraq — a "free-fraud zone" where private contractors cash in on the mess they helped create
NAOMI KLEIN
Posted Nov 13, 2008
Editor's note: The online version of this story has been amended to reflect developments since the publication of the print edition.
On October 13th, when the U.S. Treasury Department announced the team of "seasoned financial veterans" that will be handling the $700 billion bailout of Wall Street, one name jumped out: Reuben Jeffery III, who was initially tapped to serve as chief investment officer for the massive new program.
On the surface, Jeffery looks like a classic Bush appointment. Like Treasury Secretary Henry Paulson, he's an alum of Goldman Sachs, having worked on Wall Street for 18 years. And as chairman of the Commodity Futures Trading Commission from 2005 to 2007, he proudly advocated "flexibility" in regulation — a laissez-faire approach that failed to rein in the high-risk trading at the heart of the meltdown.
Bankers watching bankers, regulators who don't believe in regulating — that's all standard fare for the Bush crew. What's most striking about Jeffery's résumé, however, is an item omitted when his new job was announced: He served as executive director of Paul Bremer's infamous Coalition Provisional Authority in Baghdad, during the early days of the Iraq War. Part of his job was to hire civilian staff, which made him an integral part of the partisan machine that filled the Green Zone with Young Republicans, investment bankers and Dick Cheney interns. Qualifications weren't a big issue back then, because the staff's main function was to hand over stacks of taxpayer money to private contractors, who were the ones actually running the occupation. It was this nonstop cash conveyor belt that earned the Green Zone a reputation, in the words of one CPA official, as "a free-fraud zone." During Senate hearings last year, when Jeffery was asked what he had learned from his experience at the CPA, he said he thought that contracts should be handed out with more "speed and flexibility" — the same philosophy he cited back when he was in charge of regulating Wall Street traders.
The Bush Administration has since reversed the Jeffery appointment, perhaps thinking better of giving a CPA alum such a central role in the Wall Street bailout. Still the original impulse underscores the many worrying parallels between the administration's approach to the financial crisis and its approach to the Iraq War. Under cover of an emergency, Treasury is rapidly turning into an economic Green Zone, overrun with private companies collecting lucrative contracts. Fittingly, one of the first to line up at the new trough was none other than the law firm of Bracewell & Giuliani — yes, that Giuliani. The firm's chairman, Patrick Oxford, could scarcely conceal his glee over the prospect of cashing in on the bailout. "This one," he told reporters, "is very, very big." At least four times bigger, in fact, than the post-9/11 homeland-security bubble, from which Giuliani and his various outfits have profited so extravagantly. Even bigger, potentially, than the price tag for the Iraq War itself.
In Iraq, the contractors were tasked with reconstructing the country from the mess made by U.S. missiles. After years of corruption born of no-bid contracts and paltry oversight, many Iraqis are still waiting for the lights to come back on. Today, a new team of contractors is lining up to reconstruct the U.S. economy — reconstruct it from the mess made by the very banks, brokers and law firms that are now applying for contracts. And it's not at all clear that America can survive their assistance.
See if any of this sounds familiar: As soon as the bailout was announced, it became clear that Treasury officials would hire outsiders to perform their jobs for them — at a profit. Private companies wanting to help manage the bailout were given just two days to apply for massive, multiyear contracts. Since it was such a mad rush — after all, the entire economy was about to implode — there was no time for an open bidding process. Nor was there time to draft rigorous rules to make sure that those applying don't have serious conflicts of interest. Instead, applicants were asked to disclose their conflicts and to explain — and this is not a joke — their "philosophy in fulfilling your duty to the Treasury and the U.S. taxpayer in light of your proprietary interests and those of other clients." In other words, an open invitation to bullshit about how much they love their country and how they can be trusted to regulate themselves.
The first major contract to be awarded in the bailout was for legal advice — and the choice Treasury made was Halliburton-esque in its audacity. Six law firms were invited to bid, but four declined, either because they didn't want the contract or because they had too many conflicts of interest. Rep. Barney Frank, chairman of the House Financial Services Committee, said the fact that so many law firms chose not to bid "shows that the guidelines are sufficiently rigorous."
Or it may just show that the bidder who won the contract — Simpson Thacher & Bartlett — takes a more relaxed approach to conflicts than its colleagues. The law firm is a Wall Street heavy hitter, having brokered some of the biggest bank mergers in recent years. It also provided legal support to companies trading mortgage-backed securities — the "financial weapons of mass destruction," as Warren Buffett called them, that detonated the banking industry. More to the point, it was hired to provide legal services to the Treasury in its negotiations to spend $250 billion of the bailout money purchasing equity in America's banks. The first stage of the plan involves buying stakes in nine of the country's top banks. Incredibly, Simpson Thacher has represented seven of the nine: JPMorgan, Bank of New York Mellon, Bank of America, Citigroup, Morgan Stanley, Goldman Sachs and Merrill Lynch.
According to its contract, Simpson Thacher has agreed not to represent any of the banks "against the U.S." when they negotiate with Treasury for the equity money. However, the firm has retained the right to represent banks when they apply for other parts of the $700 billion bailout not covered by its contract. (It has promised to erect a "firewall" to stem the flow of "confidential information" to those clients.) The firm will also continue to work for the banks on a range of other lucrative deals — and that's where the problem lies. Take Lee Meyerson, Simpson Thacher's lead lawyer on the bailout negotiations, who is specifically named in the contract as "essential" to the project. As the company's hotshot attorney, Meyerson has personally represented three of the nine banks that were bailed out in the first round, in addition to many others that will surely apply for cash injections. One of the bailed-out banks is Bank of New York Mellon, whose $29 billion merger Meyerson helped negotiate. Mergers like that can bill in the millions. Is Simpson Thacher able to put aside its loyalties to its biggest clients and negotiate deals for the taxpayer that could exact real costs from those very clients?
It might be possible to set aside concerns about divided loyalties if it were clear that Simpson Thacher is helping Treasury to wrangle the best deals possible for U.S. taxpayers. But the firm's first test — the deal to give $125 billion to the nine big banks to ease the "credit crunch" that is crippling the economy — wasn't exactly reassuring. Secretary Paulson promised that the banks won't just "hoard" the money — they will quickly "deploy it" through the economy in the form of badly needed loans. There is just one hitch: Neither Paulson nor Simpson Thacher got that "deploy" part in writing — nor did they put in place any mechanism to require the banks to spend their taxpayer billions. Apparently, the part about lending the money to homeowners and small businesses was sort of implied.
"There is no obligation for banks to lend the money one way or the other," Jennifer Zuccarelli, a Treasury spokeswoman, tells Rolling Stone. "But the banks have the understanding" that the money is intended for loans. "We're not looking to control their operations."
Unfortunately, many of the banks appear to have no intention of wasting the money on loans. "At least for the next quarter, it's just going to be a cushion," said John Thain, the chief executive of Merrill Lynch. Gary Crittenden, chief financial officer of Citigroup, had an even better idea: He hinted that his company would use its share of the cash — $25 billion — to buy up competitors and swell even bigger. The handout, he told analysts, "does present the possibility of taking advantage of opportunities that might otherwise be closed to us."
And the folks at Morgan Stanley? They're planning to pay themselves $10.7 billion this year, much of it in bonuses — almost exactly the amount they are receiving in the first phase of the bailout. "You can imagine the devilish grins on the faces of Morgan Stanley employees," writes Bloomberg columnist Jonathan Weil. "Not only did we, the taxpayers, save their company...we funded their 2008 bonus pool."
It didn't have to be this way. Five days before Paulson struck his deal with the banks, British Prime Minister Gordon Brown negotiated a similar bailout — only he extracted meaningful guarantees for taxpayers: voting rights at the banks, seats on their boards, 12 percent in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.
In sharp contrast, this is what U.S. taxpayers received: no controlling interest, no voting rights, no seats on the bank boards and just five percent in dividend payouts to the government, while shareholders continue to collect billions in dividends every quarter. What's more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back.
No wonder it took just one hour for Paulson to convince all nine CEOs to accept his offer — less than seven minutes per bank. Not even the firms' own lawyers could have drafted a sweeter deal.
The day after it met with the nation's top banks, Treasury announced that it had selected the firm that would receive the juiciest contract of all: that of "master custodian." The winning company will be to the bailout what Halliburton is to the military: the contractor of contractors. It will purchase toxic debts from Wall Street, service them and auction them off in the future — a so-called "end-to-end process." The contract is for a minimum of three years.
Seventy firms applied for the gig; the winner was Bank of New York Mellon. Describing the scope of the megacontract, bank president Gerald Hassell said, "It's the ultimate outsourcing — because the Federal Reserve and the Treasury do not have the mechanics to run the entire program, and we're essentially the general contractor across the entire program. It's going to cross our entire company."
This raises an interesting point: Has the Treasury partially nationalized the private banks, as we have been told? Or is it the other way around? Is it Treasury that has been partially privatized by Wall Street, its massive rescue plan now entirely in the hands of a private bank it is directly subsidizing?
Shortly after receiving the contract, Hassell told investors that his institution is now well-positioned to profit from the market meltdown. "There's a lot of new business that's going on even in this chaotic marketplace," he said, "and so some of those things have been very positive to us." Just how positive, we don't know, because Treasury has blacked out the 10 lines of the "master custodian" contract that reveal how much Bank of New York Mellon will be paid. Though Treasury says it will release the information eventually, the secrecy goes beyond anything the Bush administration attempted in Iraq. Even Halliburton's dodgy contracts came with price tags attached.
Still, when the terms of the contract do become public, they may turn out to be surprisingly modest. Goldman Sachs has apparently offered to fulfill at least one bailout contract for free. Altruism may not be their only motivation. The real money at stake in the bailout lies not in payment for the work but in how the work is done. Think about it: If you're the one selling your debts to the government, wouldn't you also want to help decide which debts are eligible and how much they're worth? "The financial firms with assets to sell are in many instances the same firms the Treasury will rely on to value and manage the assets it is buying," The New York Times observed. "That is an invitation for these firms to set the price too high or to indulge in other mischief at the taxpayers' expense."
Bank of New York Mellon has a bad record for mischief. It is embroiled in a $22.5 billion money-laundering lawsuit in Moscow and has been forced to pay out a $14 million settlement in a related case. Though the bank's "master custodian" contract with Treasury prohibits unethical conduct, the arrangement seems rife with opportunities for abuse. According to its most recent earnings report, Bank of New York Mellon holds $1.2 billion in subprime mortgage securities. That means that in addition to the $3 billion it will receive as part of the equity program, it will also be eligible to apply for taxpayer money from the program it is being paid to administer. Neither the bank nor Treasury would comment on this direct conflict of interest.
On the same day that he allocated the first $125 billion to the banks, Secretary Paulson announced the largest federal budget deficit in U.S. history. Buried in his statement was a preview of the next phase of the financial disaster. The deficit numbers, he declared, reinforce the need to "pursue policies that promote economic growth and fiscal responsibility, and address entitlement reform." He was referring to Americans who feel entitled to receive Social Security in their old age and Medicaid when they are sick. Those programs, Paulson implied, might not be able to survive the budget crisis he is currently creating for the next administration.
This is why the stakes of the bailout are so high: Unless we get a good deal, there will be nothing left over after the banks are done feeding to pay for the meager services now provided in exchange for taxation, let alone for the more ambitious initiatives promised on the campaign trail. The spiraling cost of saving Wall Street from its bad bets is already being used as an excuse for why we can't solve our many other crises, from health care to climate change.
There is a better way to fix a broken financial system. Treasury's plan to buy up the toxic debts never made sense and should be immediately scrapped — a move that would also handily get rid of most of the crony contractors. As for purchasing equity in banks, the next round of deals — and there will be more — has to start from the premise that the banks are bankrupt and will therefore accept whatever terms we choose to impose, including real regulatory oversight. The possibilities of what could be done if a chunk of the banking system were genuinely under public control — from a moratorium on home foreclosures to mandatory investment in green community redevelopment — are limitless.
Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.
[From Issue 1065 — November 13, 2008]
The New Trough
The Wall Street bailout looks a lot like Iraq — a "free-fraud zone" where private contractors cash in on the mess they helped create
NAOMI KLEIN
Posted Nov 13, 2008
Editor's note: The online version of this story has been amended to reflect developments since the publication of the print edition.
On October 13th, when the U.S. Treasury Department announced the team of "seasoned financial veterans" that will be handling the $700 billion bailout of Wall Street, one name jumped out: Reuben Jeffery III, who was initially tapped to serve as chief investment officer for the massive new program.
On the surface, Jeffery looks like a classic Bush appointment. Like Treasury Secretary Henry Paulson, he's an alum of Goldman Sachs, having worked on Wall Street for 18 years. And as chairman of the Commodity Futures Trading Commission from 2005 to 2007, he proudly advocated "flexibility" in regulation — a laissez-faire approach that failed to rein in the high-risk trading at the heart of the meltdown.
Bankers watching bankers, regulators who don't believe in regulating — that's all standard fare for the Bush crew. What's most striking about Jeffery's résumé, however, is an item omitted when his new job was announced: He served as executive director of Paul Bremer's infamous Coalition Provisional Authority in Baghdad, during the early days of the Iraq War. Part of his job was to hire civilian staff, which made him an integral part of the partisan machine that filled the Green Zone with Young Republicans, investment bankers and Dick Cheney interns. Qualifications weren't a big issue back then, because the staff's main function was to hand over stacks of taxpayer money to private contractors, who were the ones actually running the occupation. It was this nonstop cash conveyor belt that earned the Green Zone a reputation, in the words of one CPA official, as "a free-fraud zone." During Senate hearings last year, when Jeffery was asked what he had learned from his experience at the CPA, he said he thought that contracts should be handed out with more "speed and flexibility" — the same philosophy he cited back when he was in charge of regulating Wall Street traders.
The Bush Administration has since reversed the Jeffery appointment, perhaps thinking better of giving a CPA alum such a central role in the Wall Street bailout. Still the original impulse underscores the many worrying parallels between the administration's approach to the financial crisis and its approach to the Iraq War. Under cover of an emergency, Treasury is rapidly turning into an economic Green Zone, overrun with private companies collecting lucrative contracts. Fittingly, one of the first to line up at the new trough was none other than the law firm of Bracewell & Giuliani — yes, that Giuliani. The firm's chairman, Patrick Oxford, could scarcely conceal his glee over the prospect of cashing in on the bailout. "This one," he told reporters, "is very, very big." At least four times bigger, in fact, than the post-9/11 homeland-security bubble, from which Giuliani and his various outfits have profited so extravagantly. Even bigger, potentially, than the price tag for the Iraq War itself.
In Iraq, the contractors were tasked with reconstructing the country from the mess made by U.S. missiles. After years of corruption born of no-bid contracts and paltry oversight, many Iraqis are still waiting for the lights to come back on. Today, a new team of contractors is lining up to reconstruct the U.S. economy — reconstruct it from the mess made by the very banks, brokers and law firms that are now applying for contracts. And it's not at all clear that America can survive their assistance.
See if any of this sounds familiar: As soon as the bailout was announced, it became clear that Treasury officials would hire outsiders to perform their jobs for them — at a profit. Private companies wanting to help manage the bailout were given just two days to apply for massive, multiyear contracts. Since it was such a mad rush — after all, the entire economy was about to implode — there was no time for an open bidding process. Nor was there time to draft rigorous rules to make sure that those applying don't have serious conflicts of interest. Instead, applicants were asked to disclose their conflicts and to explain — and this is not a joke — their "philosophy in fulfilling your duty to the Treasury and the U.S. taxpayer in light of your proprietary interests and those of other clients." In other words, an open invitation to bullshit about how much they love their country and how they can be trusted to regulate themselves.
The first major contract to be awarded in the bailout was for legal advice — and the choice Treasury made was Halliburton-esque in its audacity. Six law firms were invited to bid, but four declined, either because they didn't want the contract or because they had too many conflicts of interest. Rep. Barney Frank, chairman of the House Financial Services Committee, said the fact that so many law firms chose not to bid "shows that the guidelines are sufficiently rigorous."
Or it may just show that the bidder who won the contract — Simpson Thacher & Bartlett — takes a more relaxed approach to conflicts than its colleagues. The law firm is a Wall Street heavy hitter, having brokered some of the biggest bank mergers in recent years. It also provided legal support to companies trading mortgage-backed securities — the "financial weapons of mass destruction," as Warren Buffett called them, that detonated the banking industry. More to the point, it was hired to provide legal services to the Treasury in its negotiations to spend $250 billion of the bailout money purchasing equity in America's banks. The first stage of the plan involves buying stakes in nine of the country's top banks. Incredibly, Simpson Thacher has represented seven of the nine: JPMorgan, Bank of New York Mellon, Bank of America, Citigroup, Morgan Stanley, Goldman Sachs and Merrill Lynch.
According to its contract, Simpson Thacher has agreed not to represent any of the banks "against the U.S." when they negotiate with Treasury for the equity money. However, the firm has retained the right to represent banks when they apply for other parts of the $700 billion bailout not covered by its contract. (It has promised to erect a "firewall" to stem the flow of "confidential information" to those clients.) The firm will also continue to work for the banks on a range of other lucrative deals — and that's where the problem lies. Take Lee Meyerson, Simpson Thacher's lead lawyer on the bailout negotiations, who is specifically named in the contract as "essential" to the project. As the company's hotshot attorney, Meyerson has personally represented three of the nine banks that were bailed out in the first round, in addition to many others that will surely apply for cash injections. One of the bailed-out banks is Bank of New York Mellon, whose $29 billion merger Meyerson helped negotiate. Mergers like that can bill in the millions. Is Simpson Thacher able to put aside its loyalties to its biggest clients and negotiate deals for the taxpayer that could exact real costs from those very clients?
It might be possible to set aside concerns about divided loyalties if it were clear that Simpson Thacher is helping Treasury to wrangle the best deals possible for U.S. taxpayers. But the firm's first test — the deal to give $125 billion to the nine big banks to ease the "credit crunch" that is crippling the economy — wasn't exactly reassuring. Secretary Paulson promised that the banks won't just "hoard" the money — they will quickly "deploy it" through the economy in the form of badly needed loans. There is just one hitch: Neither Paulson nor Simpson Thacher got that "deploy" part in writing — nor did they put in place any mechanism to require the banks to spend their taxpayer billions. Apparently, the part about lending the money to homeowners and small businesses was sort of implied.
"There is no obligation for banks to lend the money one way or the other," Jennifer Zuccarelli, a Treasury spokeswoman, tells Rolling Stone. "But the banks have the understanding" that the money is intended for loans. "We're not looking to control their operations."
Unfortunately, many of the banks appear to have no intention of wasting the money on loans. "At least for the next quarter, it's just going to be a cushion," said John Thain, the chief executive of Merrill Lynch. Gary Crittenden, chief financial officer of Citigroup, had an even better idea: He hinted that his company would use its share of the cash — $25 billion — to buy up competitors and swell even bigger. The handout, he told analysts, "does present the possibility of taking advantage of opportunities that might otherwise be closed to us."
And the folks at Morgan Stanley? They're planning to pay themselves $10.7 billion this year, much of it in bonuses — almost exactly the amount they are receiving in the first phase of the bailout. "You can imagine the devilish grins on the faces of Morgan Stanley employees," writes Bloomberg columnist Jonathan Weil. "Not only did we, the taxpayers, save their company...we funded their 2008 bonus pool."
It didn't have to be this way. Five days before Paulson struck his deal with the banks, British Prime Minister Gordon Brown negotiated a similar bailout — only he extracted meaningful guarantees for taxpayers: voting rights at the banks, seats on their boards, 12 percent in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.
In sharp contrast, this is what U.S. taxpayers received: no controlling interest, no voting rights, no seats on the bank boards and just five percent in dividend payouts to the government, while shareholders continue to collect billions in dividends every quarter. What's more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back.
No wonder it took just one hour for Paulson to convince all nine CEOs to accept his offer — less than seven minutes per bank. Not even the firms' own lawyers could have drafted a sweeter deal.
The day after it met with the nation's top banks, Treasury announced that it had selected the firm that would receive the juiciest contract of all: that of "master custodian." The winning company will be to the bailout what Halliburton is to the military: the contractor of contractors. It will purchase toxic debts from Wall Street, service them and auction them off in the future — a so-called "end-to-end process." The contract is for a minimum of three years.
Seventy firms applied for the gig; the winner was Bank of New York Mellon. Describing the scope of the megacontract, bank president Gerald Hassell said, "It's the ultimate outsourcing — because the Federal Reserve and the Treasury do not have the mechanics to run the entire program, and we're essentially the general contractor across the entire program. It's going to cross our entire company."
This raises an interesting point: Has the Treasury partially nationalized the private banks, as we have been told? Or is it the other way around? Is it Treasury that has been partially privatized by Wall Street, its massive rescue plan now entirely in the hands of a private bank it is directly subsidizing?
Shortly after receiving the contract, Hassell told investors that his institution is now well-positioned to profit from the market meltdown. "There's a lot of new business that's going on even in this chaotic marketplace," he said, "and so some of those things have been very positive to us." Just how positive, we don't know, because Treasury has blacked out the 10 lines of the "master custodian" contract that reveal how much Bank of New York Mellon will be paid. Though Treasury says it will release the information eventually, the secrecy goes beyond anything the Bush administration attempted in Iraq. Even Halliburton's dodgy contracts came with price tags attached.
Still, when the terms of the contract do become public, they may turn out to be surprisingly modest. Goldman Sachs has apparently offered to fulfill at least one bailout contract for free. Altruism may not be their only motivation. The real money at stake in the bailout lies not in payment for the work but in how the work is done. Think about it: If you're the one selling your debts to the government, wouldn't you also want to help decide which debts are eligible and how much they're worth? "The financial firms with assets to sell are in many instances the same firms the Treasury will rely on to value and manage the assets it is buying," The New York Times observed. "That is an invitation for these firms to set the price too high or to indulge in other mischief at the taxpayers' expense."
Bank of New York Mellon has a bad record for mischief. It is embroiled in a $22.5 billion money-laundering lawsuit in Moscow and has been forced to pay out a $14 million settlement in a related case. Though the bank's "master custodian" contract with Treasury prohibits unethical conduct, the arrangement seems rife with opportunities for abuse. According to its most recent earnings report, Bank of New York Mellon holds $1.2 billion in subprime mortgage securities. That means that in addition to the $3 billion it will receive as part of the equity program, it will also be eligible to apply for taxpayer money from the program it is being paid to administer. Neither the bank nor Treasury would comment on this direct conflict of interest.
On the same day that he allocated the first $125 billion to the banks, Secretary Paulson announced the largest federal budget deficit in U.S. history. Buried in his statement was a preview of the next phase of the financial disaster. The deficit numbers, he declared, reinforce the need to "pursue policies that promote economic growth and fiscal responsibility, and address entitlement reform." He was referring to Americans who feel entitled to receive Social Security in their old age and Medicaid when they are sick. Those programs, Paulson implied, might not be able to survive the budget crisis he is currently creating for the next administration.
This is why the stakes of the bailout are so high: Unless we get a good deal, there will be nothing left over after the banks are done feeding to pay for the meager services now provided in exchange for taxation, let alone for the more ambitious initiatives promised on the campaign trail. The spiraling cost of saving Wall Street from its bad bets is already being used as an excuse for why we can't solve our many other crises, from health care to climate change.
There is a better way to fix a broken financial system. Treasury's plan to buy up the toxic debts never made sense and should be immediately scrapped — a move that would also handily get rid of most of the crony contractors. As for purchasing equity in banks, the next round of deals — and there will be more — has to start from the premise that the banks are bankrupt and will therefore accept whatever terms we choose to impose, including real regulatory oversight. The possibilities of what could be done if a chunk of the banking system were genuinely under public control — from a moratorium on home foreclosures to mandatory investment in green community redevelopment — are limitless.
Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.
[From Issue 1065 — November 13, 2008]
Tuesday, May 20, 2008
John Cusack’s War
http://www.commondreams.org/archive/2008/05/16/8989/
Friday, May 16, 2008
John Cusack’s War: The Actor Battles to Un-Embed Hollywood With His New Film, ‘War, Inc.’
by Jeremy Scahill
Back in 1989, in his smash hit “Say Anything,” John Cusack famously stood with a boom box above his head outside the home of the woman he loved blasting Peter Gabriel’s “In Your Eyes.” With his latest films on the Iraq war, Cusack is standing outside Hollywood with a TV above his head broadcasting his political movies calling on the public to wake up and “Do Something.”
John Cusack began working on his new film “War, Inc.,” which premieres in LA and New York May 23, about a year into the US occupation of Iraq. From the moment US tanks rolled into Baghdad, Cusack was a voracious consumer of news about the war. He took it deadly seriously, regularly calling independent journalists and asking them questions as he sought as much independent information as he could. Watching the insanity of the erection of the Green Zone and the advent of the era of McWar, complete with tens of thousands of “private contractors,” Cusack set out to use the medium of film to unveil the madness. He wanted to do on the big screen what independent reporters like Naomi Klein, Nir Rosen and Dahr Jamail did in print. Over these years of war and occupation, Cusack has become one of the most insightful commentators on a far too seldom discussed aspect of the occupation: the corporate dominance of the US war machine.
Cusack is no parachute humanitarian. While he continues to do the Hollywood thing with big budget movies, he is simultaneously a fierce un-embedded actor/filmmaker who has been at the center of two of the best films to date dealing with the madness of the Iraq war. Without big money sponsors and the backing of powerful production companies, Cusack has spent a lot of his own money on these projects.
Cusack’s film “Grace is Gone,” was one of the most under-rated and under-viewed movies of 2007. Cusack should have been seriously considered for an Oscar for his portrayal of Stanley Philipps, a man whose wife dies while deployed as a soldier in Iraq. The film centers on Philipps’s painful inability to explain to his two young daughters (powerfully played by two amateur actors, Shélan O’Keefe and Gracie Bednarczyk) their mother’s death. Instead of telling his daughters the terrible news, he embarks on a surreal road trip to a theme park with the girls as he fights for his own sanity and grapples with his own support for the war that has just taken the life of his wife. The film is a jolting picture of a man caught in the free fall of a nervous breakdown and the ricochet impact of the death of soldiers in the war. It was an outright shame that “Grace is Gone” did not get wide distribution. I was at a screening of the film in New York and there were not many dry eyes at the movie’s conclusion.
Perhaps the film’s lack of commercial success was due to the so-called “Iraq movie fatigue” that took hold in Hollywood a couple of years ago. But “Grace is Gone” is not simply an “Iraq movie” or a “war movie.” It isn’t even really an “anti-war” movie. It is a haunting and moving film that cuts across political lines to tell the story of the suffering and shattering of so many US military families with loved ones deployed in Iraq. Had it received the distribution it deserved, “Grace is Gone” would have resonated strongly with both supporters and opponents of the war, a rare accomplishment.
“War, Inc.” is a radically different kind of movie. In fact, it really defies genre. It is sort of like this generation’s Dr. Strangelove, A Clockwork Orange and The Wizard of Oz mixed together with the un-embedded reporting of Naomi Klein, spiced up with a dash of South Park. It is a powerful, visionary response to the cheerleading culture of the corporate media and a pliant Hollywood afraid of its own shadow.
On the surface, “War, Inc.” appears to be a spoof of the corporatization of the occupation of Iraq. Cusack plays a hit man, Brand Hauser, deployed to Turaqistan with the mission of killing a Middle Eastern oil baron (named Omar Sharif). Hauser’s employer is a secretive for-profit military corporation run by the former US vice president, played by Dan Aykroyd. We first meet Aykroyd’s character as he sits, pants down, on a toilet seat during a closed-circuit satellite videoconference call to give Hauser his mission. Hauser arrives in the Turaqi capital and heads for the “Emerald City” (read: the Green Zone), where his cover is director of a trade show for the military corporation, Tamerlane, which is basically running the Turaqi occupation. Hauser soon falls for a progressive journalist, played by Marisa Tomei, who is in Turaqistan to investigate Tamerlane, and what follows is an insane ride through Cusack’s interpretation of the radical corporatization of war.
Singer Hilary Duff gives a surprisingly fun performance as a pop star, Yonica Babyyeah, who performs a song in the war zone with the lyrics, “You say you want to invade me, baby/Enslave me, baby.” As Duff delivers the song, she caresses a phallic gas nozzle decorated with diamonds while singing, “I want to blow you….up.” Obviously Cusack and his co-writers, Mark Leyner and Jeremy Pikser (REDS/Bulworth), sought to tap into the extreme nature of the corporatized war and take it to another level, but anyone who thinks the premise behind “War Inc.” is “over-the-top” has not been paying attention to real life.
Cusack, Leyner and Pikser are not predicting the future, they are forcefully–and with dark humor and wit– branding the present for what it is: the Wal-Mart-ization of life (and death) represented in the new US model for waging war. With 630 corporations like Blackwater and Halliburton on the US government payroll in Iraq getting 40% of the more than $2 billion Washington spends every week on the occupation, Cusack’s “futuristic” film is not far from the way things really are. A powerful, for-profit war corporation, run by the former US vice president “owning” the war zone; tanks with NASCAR-like sponsor logos speeding around the streets firing at will; “implanted journalists” watching the war in IMAX theaters in the heavily-fortified “Emerald City” to get “full spectrum sensory reality” while eating popcorn; a secretive “viceroy” running the show from behind a digital curtain are all part of Cusack’s battlefield in the fictitious Turaqistan. But how far are they from the realities of the radically privatized corporate war machine Washington has unleashed on the world?
“War, Inc.” is already an underground cult classic and will likely remain so for years to come. The film is not without its shortcomings–at times it is confusing and drags–but its faults are significantly overshadowed by its many strengths. It also accomplishes the difficult feat of being very entertaining and funny, while delivering a powerful punch of truth. “War, Inc.” is a movie that deserves a much wider viewing than the barons of the film industry are likely to give it. But by filling the theaters in the opening days, people can send a powerful message that there is–and must be–a market for films of conscience.
Visit the official website of “War, Inc.” or John Cusack’s website to view trailers, get info on tickets for the premieres and to read more about the film.
Jeremy Scahill’s New York Times best seller, Blackwater: The Rise of the World’s Most Powerful Mercenary Army, is now available in substantially updated paperback form.
Friday, May 16, 2008
John Cusack’s War: The Actor Battles to Un-Embed Hollywood With His New Film, ‘War, Inc.’
by Jeremy Scahill
Back in 1989, in his smash hit “Say Anything,” John Cusack famously stood with a boom box above his head outside the home of the woman he loved blasting Peter Gabriel’s “In Your Eyes.” With his latest films on the Iraq war, Cusack is standing outside Hollywood with a TV above his head broadcasting his political movies calling on the public to wake up and “Do Something.”
John Cusack began working on his new film “War, Inc.,” which premieres in LA and New York May 23, about a year into the US occupation of Iraq. From the moment US tanks rolled into Baghdad, Cusack was a voracious consumer of news about the war. He took it deadly seriously, regularly calling independent journalists and asking them questions as he sought as much independent information as he could. Watching the insanity of the erection of the Green Zone and the advent of the era of McWar, complete with tens of thousands of “private contractors,” Cusack set out to use the medium of film to unveil the madness. He wanted to do on the big screen what independent reporters like Naomi Klein, Nir Rosen and Dahr Jamail did in print. Over these years of war and occupation, Cusack has become one of the most insightful commentators on a far too seldom discussed aspect of the occupation: the corporate dominance of the US war machine.
Cusack is no parachute humanitarian. While he continues to do the Hollywood thing with big budget movies, he is simultaneously a fierce un-embedded actor/filmmaker who has been at the center of two of the best films to date dealing with the madness of the Iraq war. Without big money sponsors and the backing of powerful production companies, Cusack has spent a lot of his own money on these projects.
Cusack’s film “Grace is Gone,” was one of the most under-rated and under-viewed movies of 2007. Cusack should have been seriously considered for an Oscar for his portrayal of Stanley Philipps, a man whose wife dies while deployed as a soldier in Iraq. The film centers on Philipps’s painful inability to explain to his two young daughters (powerfully played by two amateur actors, Shélan O’Keefe and Gracie Bednarczyk) their mother’s death. Instead of telling his daughters the terrible news, he embarks on a surreal road trip to a theme park with the girls as he fights for his own sanity and grapples with his own support for the war that has just taken the life of his wife. The film is a jolting picture of a man caught in the free fall of a nervous breakdown and the ricochet impact of the death of soldiers in the war. It was an outright shame that “Grace is Gone” did not get wide distribution. I was at a screening of the film in New York and there were not many dry eyes at the movie’s conclusion.
Perhaps the film’s lack of commercial success was due to the so-called “Iraq movie fatigue” that took hold in Hollywood a couple of years ago. But “Grace is Gone” is not simply an “Iraq movie” or a “war movie.” It isn’t even really an “anti-war” movie. It is a haunting and moving film that cuts across political lines to tell the story of the suffering and shattering of so many US military families with loved ones deployed in Iraq. Had it received the distribution it deserved, “Grace is Gone” would have resonated strongly with both supporters and opponents of the war, a rare accomplishment.
“War, Inc.” is a radically different kind of movie. In fact, it really defies genre. It is sort of like this generation’s Dr. Strangelove, A Clockwork Orange and The Wizard of Oz mixed together with the un-embedded reporting of Naomi Klein, spiced up with a dash of South Park. It is a powerful, visionary response to the cheerleading culture of the corporate media and a pliant Hollywood afraid of its own shadow.
On the surface, “War, Inc.” appears to be a spoof of the corporatization of the occupation of Iraq. Cusack plays a hit man, Brand Hauser, deployed to Turaqistan with the mission of killing a Middle Eastern oil baron (named Omar Sharif). Hauser’s employer is a secretive for-profit military corporation run by the former US vice president, played by Dan Aykroyd. We first meet Aykroyd’s character as he sits, pants down, on a toilet seat during a closed-circuit satellite videoconference call to give Hauser his mission. Hauser arrives in the Turaqi capital and heads for the “Emerald City” (read: the Green Zone), where his cover is director of a trade show for the military corporation, Tamerlane, which is basically running the Turaqi occupation. Hauser soon falls for a progressive journalist, played by Marisa Tomei, who is in Turaqistan to investigate Tamerlane, and what follows is an insane ride through Cusack’s interpretation of the radical corporatization of war.
Singer Hilary Duff gives a surprisingly fun performance as a pop star, Yonica Babyyeah, who performs a song in the war zone with the lyrics, “You say you want to invade me, baby/Enslave me, baby.” As Duff delivers the song, she caresses a phallic gas nozzle decorated with diamonds while singing, “I want to blow you….up.” Obviously Cusack and his co-writers, Mark Leyner and Jeremy Pikser (REDS/Bulworth), sought to tap into the extreme nature of the corporatized war and take it to another level, but anyone who thinks the premise behind “War Inc.” is “over-the-top” has not been paying attention to real life.
Cusack, Leyner and Pikser are not predicting the future, they are forcefully–and with dark humor and wit– branding the present for what it is: the Wal-Mart-ization of life (and death) represented in the new US model for waging war. With 630 corporations like Blackwater and Halliburton on the US government payroll in Iraq getting 40% of the more than $2 billion Washington spends every week on the occupation, Cusack’s “futuristic” film is not far from the way things really are. A powerful, for-profit war corporation, run by the former US vice president “owning” the war zone; tanks with NASCAR-like sponsor logos speeding around the streets firing at will; “implanted journalists” watching the war in IMAX theaters in the heavily-fortified “Emerald City” to get “full spectrum sensory reality” while eating popcorn; a secretive “viceroy” running the show from behind a digital curtain are all part of Cusack’s battlefield in the fictitious Turaqistan. But how far are they from the realities of the radically privatized corporate war machine Washington has unleashed on the world?
“War, Inc.” is already an underground cult classic and will likely remain so for years to come. The film is not without its shortcomings–at times it is confusing and drags–but its faults are significantly overshadowed by its many strengths. It also accomplishes the difficult feat of being very entertaining and funny, while delivering a powerful punch of truth. “War, Inc.” is a movie that deserves a much wider viewing than the barons of the film industry are likely to give it. But by filling the theaters in the opening days, people can send a powerful message that there is–and must be–a market for films of conscience.
Visit the official website of “War, Inc.” or John Cusack’s website to view trailers, get info on tickets for the premieres and to read more about the film.
Jeremy Scahill’s New York Times best seller, Blackwater: The Rise of the World’s Most Powerful Mercenary Army, is now available in substantially updated paperback form.
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