CIA forced to curb spying in Lebanon....LOL, This story is utter bullshit and Grand Disinformation made BY CIA...

http://www.strategic-culture.org/news/2011/12/21/a-third-rate-intelligence-agency-a-failing-power-cia-global-demise.html

Petraeus allowed the CIA assets in Lebanon to become indistinguishable from Mossad's, making Americans again a target in what became a friendly environment once again after the blow-up of the 70s that saw agency Beirut station chief William Buckley tortured and executed....and the WHOLE CIA station's ubiquitous meeting in MENA on the 7th floor of the crimnal US Embassy in Lebanon....wiped out in a Blast in BEIRUT in 1983...84....and US Marines HQ.....

Petraeus lined up US intelligence priorities in Middle East with Israel's. He knows who is boss after his "misstatement" on Israel before Congress re: Israel and its drag on US policies in MENA and Beyond....

Disinformation Galore by the CIA-MOSSAD Evils...., C'est l'arbre qui cache la foret....CIA forced to curb spying in Lebanon....LOL, This story is utter bullshit and Grand Disinformation made BY CIA... I know first hand, CIA has hundreds upon hundreds of informants/agents in Lebanon's highest echelons in every area of interest....

The agency's crucial post in Beirut is affected after the arrest of several informants this year, sources say.....LOL, this is utter disinformation through and through....sure they lost a few...., but CIA/NSA and MOSSAD have a crucial listening post in Lebanon...[ SCS, the special collection services where they collaborate actively on special projects...] and nowhere it is proven that these super secret programmes have been compromised....YET...LOL

CIA assassins and their Western Zioconned brotherly services have access to hundreds upon hundreds of informants in Lebanon's highest echelons...and in ALL areas of interest still, PLUS, you have 12000 Zioconned Western troops in South Lebanon....MOST of them Military Intelligence Geeks....enough said I think, but Hezbollah did defeat them ALL it seems by penetrating their inner sanctums....LOL

CIA forced to curb spying in Lebanon....LOL, This story is utter bullshit and Grand Disinformation made BY CIA... I know first hand, CIA has hundreds upon hundreds of informants/agents in Lebanon's highest echelons in every area of interest....

Note to CIA: if you weren't so close to Mossad in Lebanon, you might be treated differently. No sympathy for an agency owned and operated by Israel's assassins and close partners within the Infamous White House Murder INC,....

The agency's crucial post in Beirut is affected after the arrest of several informants this year, sources say.....LOL, this is utter disinformation through and through....sure they lost a few....!

http://www.greanvillepost.com/2011/05/02/a-more-militarized-cia-for-a-more-militarized-america/

The CIA was forced to curtail its spying in Lebanon, ....LOL LOL LOL where U.S. operatives and their agents collect crucial intelligence on Syria, terrorist groups and other targets, after the arrests of several CIA informants in Beirut this year, according to U.S. officials and other sources.

"Beirut station is out of business," a source said, using the CIA term for its post there. The same source, who declined to be identified while speaking about a classified matter, alleged that up to a dozen CIA informants have been compromised, but U.S. officials disputed that figure.

U.S. officials acknowledged that some CIA operations were suspended in Beirut last summer. It's unclear whether full operations have resumed. Beirut is considered a key watching post for turmoil in the Middle East.

Senior CIA officials have briefed congressional staffers about the breach, and Rep. Mike Rogers (R-Mich.), who chairs the House Intelligence Committee, visited Beirut recently to interview CIA officers. Committee staff members want to determine whether CIA operatives used sloppy practices that revealed sensitive sources and methods.

Much in the case remains unclear, including the extent of the damage and whether negligence by CIA managers led to the loss of the Lebanese agents.

According to the source, CIA case officers met a series of Lebanese informants at a local Pizza Hut, allowing Hezbollah and Lebanese authorities to identify who was helping the CIA. U.S. officials strongly disputed that agents were compromised at a Pizza Hut.

U.S. officials also denied the source's allegation that the former CIA station chief dismissed an email warning that some of his Lebanese agents could be identified because they used cellphones to call only their CIA handlers and no one else.

Hezbollah, an Iranian-backed militant group that the U.S. considers a terrorist organization, and Lebanon's internal security service have used software to analyze cellphone calling and location records to help them identify a network of alleged Israeli spies since 2007, according to several people familiar with the case. Dozens of people were arrested.

In 2010, U.S. counterintelligence officials determined that the CIA's Lebanese agents could be traced the same way, the source said. But the station chief allegedly ignored the warning. "He said, 'The Lebanese are our friends. They wouldn't do that to us,' " the source said.

The Times is withholding the former station's chief's name because he remains undercover. He now has a supervisory role at CIA headquarters in operations targeting Hezbollah. The CIA declined to make him available for comment.

"Espionage has always been a complex business," said a U.S. official, who declined to be identified in discussing the Lebanon case. "Collecting sensitive information on adversaries — who are aggressively trying to uncover spies in their midst — will always be fraught with risk."

Hezbollah is "an extremely complicated enemy," the official added. "It's a determined terrorist group, a power political player, a mighty military and an accomplished intelligence organization — formidable and ruthless. No one underestimates its capabilities."

In June, Hezbollah's leader, Sheik Hassan Nasrallah, announced the arrest of three of its members. He said two were "affiliated with the CIA, and one more might be affiliated with either the CIA, European intelligence or Mossad," Israel's foreign intelligence service.

Nasrallah did not disclose their names, explaining that he wanted to protect their families, "whom I know personally." He said that CIA officers, working under diplomatic cover at the U.S. Embassy, had recruited them in early 2011.

The U.S. Embassy dismissed the charge. "These are the same kind of empty allegations that we have heard repeatedly from Hezbollah," it said in a statement.

Lebanon's security service was able to isolate the CIA informants by analyzing cellphone company records that showed the numbers called, duration of each call and location of the phone at the time of the call, the source said.

Using billing and cell tower records for hundreds of thousands of phone numbers, software can isolate cellphones used near an embassy, or used only once, or only on quick calls. The process quickly narrows down a small group of phones that a security service can monitor.

In 2005, an Italian prosecutor used cellphone calling and location records to help identify 26 Americans who he said took part in a 2003 abduction of a Muslim cleric on a street in Milan. A judge later convicted 23 Americans, including the CIA's former Milan base chief, in absentia for their role in the "extraordinary rendition" case.

Washington has given Lebanon's government more than $1 billion in various forms of aid since 2006 and has proposed an additional $236 million in aid this fiscal year.

The Obama administration has struggled with the relationship since 2008, when Hezbollah fighters seized control of parts of Beirut. That resulted in an Arab-brokered peace deal that gave Hezbollah a major role in Lebanon's government.

The group's political arm now has 16 of the 30 seats in the Cabinet of Lebanon's prime minister, Najib Mikati. Hezbollah is also active in Lebanon's security and intelligence services....


http://www.youtube.com/watch?feature=player_embedded&v=iBsSBwxAwjo

الاستباحة المتمادية للبنان منذ ستين سنة ونيف، بفعل قرارات دولية زنرت لبنان جواً وبراً وبحراً وأمناً وسياسة وقضاءً واقتصاداً، وبفعل سياسات داخلية، ممن توالوا على السلطة، جعلت أمن اللبنانيين، غب التزامات وتنازلات وشبهات، تستدعي طرح أسئلة كبيرة، حول بلوغ الاستباحة الخارجية حد الإمساك بمفاصل أساسية في الدولة، ولعل وثائق وثرثرات «ويكيليكس» خير شاهد على تحول جزء من الطبقة السياسية الى «فرقة مخبرين» من «الدرجة العاشرة» عند السفارة الأميركية في بيروت

السفارة الأميركية كانت وما تزال تشكل بؤرة تجسسية على الأرض اللبنانية، والأنكى من ذلك أن عملها لا يحتاج الى تمويه أحياناً، بدليل أن معظم الاجتماعات مع المخبرين والمجندين تعقد في «المبنى الرقم 2» في عوكر أو في بعض المقاهي والمطاعم الواقعة ضمن بقعة جغرافية يسهل انتقال ضباط السفارة منها وإليها، لأسباب أمنية بحتة. واللافت للانتباه أن الضباط الأميركيين يتنقلون أيضاً ضمن مواكب دبلوماسية تابعة للسفارة الأميركية، مستفيدين من الحصانة الدبلوماسية التي توفرها الحكومة اللبنانية لهم ولغيرهم من البعثات الدبلوماسية العاملة على الأراضي اللبنانية

.أن وكالة الاستخبارات المركزية الاميركية "سي اي ايه" زودت سفاراتها في بيروت ودمشق وعمان وأنقرة والقاهرة وقنصلياتها في شتى انحاء المنطقة بضباط وخبراء في جمع المعلومات, كما ضاعفت اعداد عملائها المحليين خصوصاً في بيروت ودمشق وقبرص, وهو ما فعلته ايضاً الاستخبارات الاسرائيلية الخارجية "الموساد" والعسكرية "أمان

It might not be an Asian century after all....?

It might not be an Asian century after all....?
By Spengler

Here's a thought experiment: if the United States and China maintain their present fertility rate and educational systems through the end of the century, which country will have the stronger economy? This is not a forecast, to be sure, just a point of perspective at a distant horizon.

University graduates (assumes constant fertility
and constant rates of participation in tertiary education)


Source: UN World Population Prospects, Nationmaster, Author's Calculations.

The United States will have about one-third more university students than China if everything holds constant, that is, if 21% of Chinese and 38% of Americans of college age actually matriculate. The quality of Chinese university graduates, moreover, is questionable; according to a 2005 McKinsey study, only one in 10 of China's recent engineering graduates was employable by multinational companies, leaving a competent core of 160,000, about the same as in the United Kingdom. China is working hard to raise the quality of its graduates, but success is hard to measure.

China will have a bigger working-age population, to be sure, but it won't be nearly five times the American level as in 2010, but a bit less than double at the end of the century - again, assuming constant fertility. Assumptions of this sort are dodgy, to be sure, but we don't observe a lot of two-child families in China even where the one-child policy no longer applies, and very few three-child families.

China is spending more on higher education, especially to bring its elite universities up to world standards, but the demographic impact is slow. Not quite 22% of 20-year-old Chinese are enrolled in a tertiary education program, a modest improvement from 19% in 2005.

The point of this exercise is not to forecast the winner. On the contrary: the comparison shows that small changes in assumptions can have a huge relative impact over time. China's young people work harder and focus better than their American counterparts; by some estimates, more than 30 million of them are studying classical piano.

Playing classical music does, in fact, make you smarter, by building attention span, memory and real-time analytic capability. China might offer subsidies rather than penalties for second and third children. And private universities might provide opportunities for millions of Chinese who can't find a place in the state schools.

And the United States might pull out of its present funk as it did in a sudden twice during the past century: in the first years of World War II, and during the first Ronald Reagan administration.

For the past two decades, the United States wasted the lion's share of its resources, first in pursuit of the Internet bubble and then in service of the housing bubble. The country's smartest kids were groomed for investment banking from childhood - literally. Now that the bubble has popped, it can't be excluded that Americans will go back to fundamentals. America always does the right thing, Winston Churchill observed, after it has exhausted the alternatives.

S&P 500 Index vs Shanghai Composite Stock Index (in US$)
January1, 2008=100



Nearly four years after the crash, the market value of China's economy languishes at around half its January 2008 level, while the American stock market has recovered to almost 90% of its pre-crash peak. Why should that be the case, when China is growing at 9% a year and America at 2% or 3%, with an administration hostile to business and the world's highest corporate tax rate?

A simple answer is that it is safer to buy the stocks of American companies that sell to China than to buy Chinese companies. The world learned in 2008 that even the freest and most transparent large economy, the United States, might crash due to the negligence and cupidity of regulators, congress, ratings agencies, and financial institutions. Without an open and rambunctious democracy that responds to errors and corrects them in the full light of day, modern capital markets don't work.

Another way to gauge China's problem is that its gross domestic product (GDP) quintupled over the decade through 2010, while its stock market doubled - so that market capitalization has fallen sharply relative to GDP. The value of Chinese companies represents a much smaller proportion of the Chinese economy than it did in 2000. America's stock market is worth roughly what it was a decade ago, while nominal GDP is half again as much. The ratio of market capitalization to GDP also shrank in America, but not nearly as far.

America has had its share of corporate fraud, for example, WorldCom and Enron. But investors by and large trust American corporations to report their earnings accurately, with the exception of the banks, who are a long way from recovering trust. China still looks like the Wild West to overseas investors, and not without reason: China is a great leap away from Western standards of governance and rule of law.

Growth is not a small consideration: if you put $1 into the Chinese market in January 2000, you would now have $2, but $1 invested in US stocks would still be $1. What is troubling is that just three years ago, the Chinese investor would have had not $5, but $2.

The risk to China is not a hard landing, but complacency about the country's visible success. China has accomplished the largest migration in history, and continues to shift nearly 15 million people a year from the countryside to cities. Its demographic problems will not impact the economy for two decades or more, because so many of its people are moving from rural poverty to urban productivity.

Although the overall Chinese population is poised to decline, the absolute number of Chinese engaged with the world economy will continue to rise rapidly for some time. And the present generation of university graduates, for all the deficiencies of tertiary education, is the largest, most qualified and most ambitious in Chinese history.

If China fails to promote fertility, though, the aging and eventual shrinkage of the population will pass a point of no return around 2040. The proportion of elderly dependents will jump to 40% in three decades, which is difficult but not impossible to manage; but unless China regains replacement fertility well before then, the elderly dependent ratio will rise to 60% by 2060, and the Chinese empire will implode.

China's elderly dependent ratio, assuming constant fertility


Source: UN World Population Prospects

China might fail on demographics, but it also might fail in a number of other ways. If the Communist Party resists democracy, corruption will remain out of control. China will lose entrepreneurs to the Anglo-Saxon world or other countries where capital is available in free markets. Inventors will form companies in the United States rather than China to ensure that intellectual property is protected.

Worst of all, China might draw precisely the wrong conclusion from America's financial crash, and conclude that a command economy offers advantages against a crisis-prone brand of capitalism. And it might conclude further that a weaker United States is in Chinese interests. And the danger is that China might do so just when America - after the 2012 presidential election - gets back on the right track.

China's greatest challenge is not American strength but American weakness. America has no designs on any part of Chinese territory (unless Hollywood decides to invade Tibet), and the Pax Americana in the Pacific creates a backdrop of stability in which China's economy has flourished. If China looks inward more than outward, and regards America as an enemy rather than as an un-threatening rival, it will decline....

Exposed: US press 'freedom' or ill-Freedom and a real Police State....

Exposed: US press 'freedom' or ill-Freedom and a real Police State....

http://www.gilad.co.uk/writings/jonathon-blakeley-a-guide-to-hasbara-trolls.html

By Pepe Escobar

Last week, independent journalist Sam Husseini went to a news conference by Prince Turki al-Faisal of Saudi Arabia at Washington’s National Press Club - where Husseini is a member.
Then he did something that is alien to United States corporate media culture. He behaved as an actual journalist and asked a tough, pertinent, no-holds-barred question. Here it is, as relayed by Husseini's blog:

I want to know what legitimacy your regime has, sir. You come before us, representative of one of the most autocratic, misogynistic regimes on the face of the earth. Human Rights Watch and other reports of torture, detention of activists, you squelched the democratic uprising in Bahrain, you tried to overturn the democratic uprising in Egypt and indeed you continue to oppress your own people. What legitimacy does your regime have - other than billions of dollars and weapons? [1]

Prince Turki, former Saudi intelligence supremo, former pal of al-CIAda leader Osama bin Laden, former Saudi ambassador to the US, reacted by changing the subject. [2]

Were this to happen in the Middle East, Husseini would have been duly kidnapped by Saudi intel, tortured and snuffed out. Ask the remains of Colonel Muammar Gaddafi. For much less - saying out loud in an Arab League meeting that King Abdullah was a traitor, because he was encouraging the George W Bush administration to invade Iraq - the House of Saud did everything in its power, for years, to make sure Gaddafi was taken out.

Turki exhibits all the trademark democratic credentials of the House of Saud. He refers to the push for democracy in the Arab world as "Arab Troubles".

After the Turki shoot
According to Husseini, on the same day of the news conference he received "a letter informing me that I was suspended from the National Press Club 'due to your conduct at a news conference'. The letter, signed by the executive director of the club, William McCarren, accused me of violating rules prohibiting 'boisterous and unseemly conduct or language'."

Husseini, communications director of the Institute for Public Accuracy, which showcases critical journalism from all over the world, is a calm, thoughtful man with impeccable credentials. The accusation is not only bogus - it is downright pathetic.

Was this a one-off? Obviously not. Flashback to January 2009, at the same National Press Club, during a news conference by then-Israeli foreign minister Tzipi Livni. When Livni was asked a tough question - once again by Husseini - the mike was cut, and the conference abruptly terminated. My cameraman, Sebastian Pituscan, was there with me. [3]

So this is how the much-lauded "freedom of the press" myth in the US actually works. If you perform the job of an actual journalist, telling truth to power, forget about attending press conferences at the White House, Pentagon or State Department. You won't even be admitted in the building.

If you are an official from a "valuable ally" - such as the House of Saud or the regime in Israeli - you are assured a tough question-free pulpit anywhere you choose, especially if you're fluent in English.

But if you are an official from a "rogue" regime, the maximum you can aspire is to be humiliated in public, as it happened to Iranian President Mahmud Ahmadinejad at Columbia University in New York. Especially if you don't speak English, and most of what you say is lost in translation.

On the other hand, if you are a travelling US corporate media hack, you can get away with murder.

Example. During the Asian financial crisis, in 1997 and 1998, I went to countless press conferences where parachuted US hacks intimidated Asian leaders as if they were a bunch of hooligans (the hacks, not the leaders). Perky chicks emerging from some two-bit journalism school in the flyover states treated then-Malaysian prime minister Mahathir Mohamad as if he was a child rapist, because he had established capital controls.

Mahathir turned out to be right - as Malaysia overcame the crisis much earlier than those, such as Indonesia, Thailand and South Korea, that surrendered to the International Monetary Fund's dreadful "adjustments".

In 1989, Chinese students protesting in Tiananmen Square were hailed by US media as heroes standing up to tyranny. In 2011, American students protesting all across the country against financial tyranny are "lazy", "bastards", both, or downright criminalized.

United States corporate media could not possibly admit that repression in Tahrir Square by Egyptian riot police is exactly the same as repression in New York, Oakland, Portland or Boston by American riot police.

Still there's no word from the North Atlantic Treaty Organization about setting up a "humanitarian" no-fly zone over selected Occupy sites in US cities. They are still consulting with the House of Saud.

Notes
1. See the blog here.
2. Video of the exchange is here.
3. The exchange is here.

Obama's ally in Africa practices human sacrifices of young virgin girls....

Obama's ally in Africa practices human sacrifices of young virgin girls....

November , 2011 -- Obomba's administration pushing for hereditary dictatorship in Uganda..., while preaching "Freedom and Democracy" elsewhere in MENA....The Zioconned USA has become the laughingstock of the World.

The Zioconned Obama administration has insisted that the hereditary regimes of Egypt and Libya had to go, and now, it is calling for the Assad regime of Syria to step down. However, when it comes to sub-Saharan Africa, and nations where oil is plentiful, the Obama administration is supporting the continuation of nepotistic hereditary regimes. No place is this more evident than in Uganda, which has been governed for twenty-five years by the dictator Yoweri Museveni.

And to support the Ugandan dictatorship, Obama has dispatched 100 U.S. Special Forces to Uganda, ostensibly to battle against forces of the rebel Lord's Resistance Army. However, Obama now appears intent on preserving the Museveni dictatorship by sensing U.S. military forces to the country to prop of the unpopular regime. We have been told that the main opposition to Museveni, the Uganda National Front, (UNF) now stands ready to "Occupy Uganda" through a campaign of peaceful protests inside the country and abroad at Ugandan diplomatic missions. "Occupy Uganda" is calling on other Occupy movements around the world to support its efforts.

Museveni and Kenyan Prime Minister Raila Odinga recently returned from Israel and have committed to expanding Israel's military presence in east Africa, including Uganda, Kenya, Ethiopia, South Sudan, and Tanzania. Kenyan troops, along with those from Uganda and Burundi, are battling Somali factions inside Somalia, with U.S. and NATO military support, and reportedly, with covert support from IsraHell.... CIA drone bases have been established in KSA, Jordan, Ethiopia, Djibouti, Iraq and the Seychelles.

Odinga, a member of the Luo tribe from which Obama hails on his father's side, said Israel has promised to provide security assistance to Kenya. Odinga was installed as prime minister with support from George Soros's international "themed revolution" network. Odinga's party is called the "Orange Democratic CIA Movement."

Our Ugandan sources have revealed that on November 11, Museveni's son, 37-year old Major General Muhoozi Kainerugaba, commander of the special forces of the Uganda People's Defense Force, covertly visited Washington, DC to seek Obama administration support for his succession to the presidency of Uganda after his father retires....

Muhoozi was reportedly accompanied to Washington by Susan Nalugwa Kiguli, a Ugandan writer and poet whose history strongly suggests that she is part of the Soros non-governmental organization (NGO/CIA) influence-peddling network in Africa that includes recent Nobel Peace Prize winners Leymah Gbowee, a Liberian writer and political activist, and Ellen Johnson-Sirleaf, the president of Liberia who recently won re-election amid an opposition boycott stemming from charges of electoral fraud.

Muhoozi's secret trip to Washington was known to only a few people, including Ugandan ambassador to Washington Perezi K. Kamunanwire, Ugandan military attaché in Washington Col. Leopold Eric Kyanda, and Assistant Secretary of State for African Affairs Johnnie Carson. Muhozzi held a secret meeting with Carson. Muhoozi's trip was arranged through U.S. ambassador to the UN Susan Rice and Chevron, Inc., who hope to see the Museveni family stay in power to facilitate U.S. oil production of newly-discovered large oil reserves in Uganda....

Zioconned Obama is reportedly favorable to the plan to keep the Museveni family in power through Muhoozi's eventual accession to power.

Obama, who claims to be a Christian, but is really Jewish....has picked a strange dictator with whom to align the United States. The UNF points out that Museveni's rise to power was accompanied by a satanic practice of human sacrifice. Museveni started his bush war in the Luwero triangle region by sacrificing to his "gods" a young virgin girl of abut 9 year old, together with a sheep and rooster. The ritual is said to be still practiced by Museveni and his National Resistance Movement (NRM) of Uganda.

While Obama and Secretary of State Hillary Clinton called for the ouster of Libyan leader Qaddafi and his family and are now calling for the same fate for Syria's assassin in Chief Bashar Assad and his family of thugs and killers, they want to see the son of a human sacrificing president remain in power in Uganda. Perhaps Obama's Luo tribal roots have helped usher into the White House a dangerous conflict-of-interest where the rule of law for U.S. foreign policy has been replaced by a lawless rule of the Zioconned jungle.....

We have obtained a photograph from Ugandan opposition sources of a victim of the special forces of the State Department's recent guest, Muhoozi (warning: photograph is disturbing).
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Meanwhile, the UNF is calling for sub-Saharan Africa's first major Occupy movement to remove a dangerous dictator and his family from power and be replaced by a federal and democratic system of government....

It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes.....

"It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes."

Andrew Jackson

http://www.youtube.com/watch?feature=player_embedded&v=90eGrdPpv3g

Bank of America's Merrill Lynch unit is soliciting for the purchase of claims against MF Global....

As you may recall, Bank of America is one of the major creditors of MF Global with JPM, and is reported to be one of the Debtors, along with JP Morgan, involved in the litigation trying to obtain superiority of their claims over customers whose money was taken/lost/stolen by parties unknown for now.

I have nothing against vulture funds per se, although what I hear a few of them have done with two of the failed Icelandic Banks and their former directors proves Rule Four of ZombieBankingland: Always Use the Double Tap.

But doesn't this seem like a bit of an impropriety, if Bank of America is one of the holders of assets, or affiliated in a court action with such a holder of contested assets, that would ultimately make customers whole? Is it conceivable that this is a conflict of interest?

I mean, it does seem that BofA with one hand is acting with others to give its own claims superiority in the Trustee liquidation, and on the other hand it is offering to buy up the claims it has weakened by these legal actions.

MF Global has the wafting odour of scandal that keeps on intensifying.

I cannot wait to find out the whole truth. But that might have to wait for kingdom come, if it is in the same justice delivery system as the silver manipulation inquiry.

But for now the pampered princesses of the NY financial media are bubbling with excitement over the clubbing and gassing of peaceful protesters under cover of darkness.

It appears that MF Global is phase two: the clubbing and looting of unsuspecting customers and clients.

When in doubt, get out.

The Coalition of Customers of MF Global filed a motion to turn down JP Morgan's legal maneuver to give the Bank a priority as a Debtor over the Customers whose $633 million in non-cash assets were apparently 'misplaced' by MF Global. The location of the funds, and the party to which they were given, has still not yet been disclosed by MF Global's management.

Bank of Montreal's Chicago based Harris unit was subpoenaed for customer account information, but so far nothing has been released publicly with regard to the location of the customer assets.

This is a somewhat lengthy excerpt but it is an interesting read even for a non-attorney such as myself.

INTRODUCTION

MF Global, Inc. was a registered broker-dealer, used by its Customers to trade commodities, futures and derivatives. Customers maintained accounts at MF Global, Inc., which were supposed to be held inviolate under CFTC Regulation 4.20(c), and which have a first priority right of recovery under 11 U.S.C. § 766(h) and 17 C.F.R. § 190.08. Yet, it appears that over $600 million in Customer funds are unaccounted for at MF Global, Inc. (“Missing Funds”), due to poor internal controls, and may have been commingled with proprietary funds held by MF Global, Inc., and the Debtors.

Presently, the Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), the FBI, and the Trustee overseeing the liquidation of MF Global, Inc., are investigating the disposition of the Missing Funds. It could be that some or all of the missing funds are held by, or are tied up in assets owned by, the Debtors. According to Section 766(h) of Chapter 11 of the Bankruptcy Code, such funds would have to be returned to the Customers before any other creditor.

In the meantime, Debtors, the Liquidity Facility Lenders, and the professionals representing both, have sought approval to carve out funds for themselves — under a so-called super-priority protection — without regard to the Customers’ right to have their funds returned before any other money is spent from the bankruptcy estate. Yet, the Debtors have not provided notice to all MF Global, Inc. customers, nor have they apparently even notified the trustee for MF Global, Inc. of the potential impact of the Motion on potential Customer funds.

Indeed, if granted, such a super-priority right would abrogate sacrosanct protections for commodities account holders, depriving those who trade in commodities, futures, and derivatives, of their only protection and potentially chill economic activity. It is premature to enter such an order — particularly one that includes a “good faith” finding to a lender that may have benefitted from the improper transfer of the Customer Funds to pay down an outstanding loan.

BACKGROUND

MF Global customers represent a cross-section of people across America and the world, from farmers and ranchers who hedge their crops and herds, to oil producers and miners who use futures to lock-in prices and take delivery of physical commodities, to retirees who invest in futures to diversify their portfolios. For example, farmers who have crops in the field need to sell futures in commodity markets so they can lock in prices for their future yields today, instead of taking on market risk as they would otherwise be exposed to volatile price swings.

Large corporations like Coca-Cola who make money in foreign markets do not want to lose money when they repatriate revenue earned in foreign currency. They have to be able to forecast future expenses and profits accurately in the currency of their domicile and hedge that currency price risk in futures markets accordingly.

Investors add volume and liquidity to these markets which allow for better, more efficient pricing of commodities. This allows for stability in prices of commodities and predictability of future profit and loss, which in turn allows for stability in producer and consumer prices. These commodities include everything from grains like corn and wheat, to energy like oil and natural gas, to soft goods like cotton and sugar, to currencies like the US dollar and Euro, to financial instruments like bonds and stock indexes. Simply put, trading in commodity futures markets is a mainstay of the American economic engine.

Segregated Funds: Cornerstone of the Commodities Industry:

One of the big differences between commodities brokers and securities (stocks and bonds) brokers is that commodity brokers have an obligation to keep customer funds completely segregated from the firm’s own assets. This is to ensure that clients are completely protected from losses sustained by the firms’ trading and operations. It also is in contrast to the securities industry, as the Securities Investors Protection Act back-stops losses suffered by securities investors due to broker malfeasance, but does not similarly back-stop similar losses suffered by commodities investors.

Many industry groups and regulators have heralded segregated account protection, arguing that no client has ever lost a penny from a segregated account as the result of a broker bankruptcy, and this has been a key driver of volume and profitability for the Chicago Mercantile Exchange. “However, all futures trading accounts, including managed futures, have the advantage of specific industry rules that require the segregation of customer funds from the firm's own funds. The practice of segregating customer funds protects investors in the event of default at the Futures Clearing Merchant (FCM, the industry term for futures brokerage firms
licensed to trade on futures exchanges in the U.S.) holding their account. While FCM bankruptcies are rare, they do occur. In 2005, Refco Inc. and 23 of its unregulated subsidiaries filed for Chapter 11 bankruptcy protection. However, Refco's regulated subsidiaries (where customers' futures trading and managed futures accounts resided) were unaffected and customers were able to continue trading and managing their accounts.” See “Safeguarding Customers Through Segregated Funds” by CME Group, Inc. http://www.cmegroup.com/managedfutures/Feb2011/safeguarding-customers-through-segregated-funds.html.

So, whereas securities clients are afforded various insurance in the event of a broker bankruptcy, commodities clients are afforded none—which is economically rational only because their funds cannot be commingled with a broker's assets and cannot be used to pay creditors in a bankruptcy. Segregated funds are accounted for daily to the National Futures Association (“NFA”) and to the CFTC through the broker’s designated self-regulatory organization (“DSRO”), which in MF Global’s case was the Chicago Mercantile Exchange (“CME”).

MF Global Did Not Maintain Segregated Accounts

Despite the fact that MF Global was responsible for maintaining full segregation of customer funds on a daily basis, there remains $633M in unaccounted for customer segregated funds two weeks after the firm filed bankruptcy. Moreover, the officers and directors of MF Global have thus far been uncooperative in aiding the court in ascertaining the whereabouts of these missing funds, despite a formal probe by the CFTC, the US futures regulator. This has driven the Trustee’s office to comment: “Our forensic investigators have been there since last week and nothing we have found so far causes us to think anything other than there is an
apparent shortfall at MF.” See “MF Global Fund Frustration Grows, CFTC Confirms Probe,” by Reuters, November 10, 2011, http://www.reuters.com/article/2011/11/11/us-mfglobal-cftcinvestigation-idUSTRE7A96C420111111

These failures to cooperate are consistent with the operating history of MF Global, which is fraught with examples of misconduct and disregard for regulations. “An analysis of regulatory enforcement actions shows MF Global has drawn more sanctions from the U.S. commodity futures regulator than each of its 14 closest peers in that market over the past decade. MF Global has also drawn the second highest amount in fines, for alleged lapses in risk supervision and record keeping.” See “Insight: Risk, Lax Oversight Riddle MF Global’s Past,” by Reuters, November 11, 2011, http://www.reuters.com/article/2011/11/11/us-mfglobal-legal-fidUSTRE7AA2KO20111111

As of today, it is not clear where the Missing Funds might be—although they may have been taken as part of one or more margin calls related to sovereign debt held by MF Global on its own account. See “MF Global May Have Used Customer Funds In The Losing $6.3 Billion Trade Without Informing Clients,” November 8, 2011, Forbes, at http://www.forbes.com/sites/robertlenzner/2011/11/08/mf-global-used-customer-funds-in-the-losing-6-3-billion-trade-without-informing-clients/.

The CME has gone so far as to say that it appears MF Global moved funds immediately prior to bankruptcy from “segregated funds in a manner that may have been designed to avoid detection,” according to a CME statement on November 2, 2011. http://www.prnewswire.com/news-releases/cme-group-statement-regardingmf-global-133102203.html.

It is equally possible that these funds were seized and used to pay down the line of credit held by MF Global Holdings, Ltd. or have otherwise been used to bolster cash held by the Debtors.

ARGUMENT

Due to the apparent shortfall of customer segregated funds and the lack of cooperation by MF Global officers and directors in determining its whereabouts, it is imperative that the Court does not grant any liens, encumbrances, priorities, or super-priorities of any assets in the Debtors without protection for customer funds at this time. To do so could allow Debtors and JP Morgan Chase Bank, N.A. (“JPMorgan”) to obtain a priority over Customers on Customer Funds, in derogation of the Bankruptcy Code and CFTC regulations. This would deprive commodity investors of the one protection they have — a right to priority payout — and possibly further chill economic activity in these troubled economic times. Accordingly, absent some protection for Customers, Debtors’ Motion must be denied.

I. Customers Have Absolute Priority Over Funds Implicated By The Motion.

According to 11 U.S.C. § 766(h), a bankruptcy trustee “shall distribute customer property ratably to customers on the basis and to the extent of such customers’ allowed net equity claims, and in priority to all other claims, except [limited costs] attributable to the administration of customer property.” (emphasis added.) Under 17 C.F.R. 190.8, “customer property” includes (among other things) cash, securities or other property “received, acquired or held to margin, guarantee, secure, purchase or sell a commodity contract,” any “open commodity contracts,” and even cash, securities or property that “[w]as unlawfully converted but is part of the debtor’s estate.” The Motion implicates customer property in at least two ways.

First, it is unquestionable that there are well over $600 million in Customer funds that simply have not been accounted for. If speculation is true, the Missing Funds could have been seized in a margin call or otherwise improperly applied by the Debtors to their outstanding obligations. Commingling between MF Global, Inc. and Debtors could necessitate a finding of substantive consolidation. Such a finding would, in turn, merit treating Debtors like futures clearing merchants. Such a finding would obviate the protection of Chapter 11, necessitate Debtors’ immediate liquidation, and would unquestionably require priority return of assets to
Customers. Until such time as the SEC, CFTC, FBI, and the trustee overseeing the MF Global, Inc. liquidation have completed their forensic analysis, the Court ought to treat the funds that the Debtors seek to use as if they include the Missing Funds.

Second, the Motion and Amended Interim Order each provide that JP Morgan can obtain a super-priority or first priority lien (JP Morgan currently is an unsecured creditor) on all property in which Debtors have an interest, including “intercompany indebtedness … owed by MF Global, Inc. to each Debtor.” In other words, it is possible, under the Motion, for JP Morgan to obtain a seemingly preferred interest in payments that MF Global, Inc. owes to Debtors—and could use that priority to force MF Global, Inc. to pay JP Morgan rather than pay Customers. The Proposed Order, in Paragraph 5, also gives JP Morgan priority over any claims.

Put simply, given the unknowns at this stage in the proceeding, it is undeniable that the Motion may impact funds and/or assets that should first be paid out to Customers—not to lenders and professionals.

II. Customers Should Have Received Notice.

In this matter, notice has been given in haphazard fashion. Debtors sought and received interim rights over cash collateral and JP Morgan received its super-priority rights on an interim basis without any real notice being given. Then, a hearing was noticed for November 14,2011. An amended notice, found at Dkt. No. 63, re-set the hearing for Thursday, November 16, 2011, at 3:30 p.m. It also set the objection date for November 11, 2011. Of course, the 16th is a Wednesday and November 11, 2011, was a federal holiday.

Even assuming Debtors have calendar-challenges rather than devious intent, Customers still should have received notice of the Motion. As first-priority claimants for whom over $600 million in collateral has vanished, it seems unquestionable that Customers of MF Global, Inc. potentially have rights that ought to be protected in the closely related bankruptcy of MF Global Holdings, Ltd. Yet, no effort was made even to post notice of the Motion on the SIPC trustee’s website in the related bankruptcy. http://dm.epiq11.com/MFG/Project/default.aspx.

For this reason alone, the Motion ought to be denied at this time, until adequate (and accurate) notice can be provided to Customers.

The Court Ought To Protect Customer Funds.

As noted above, a finding of commingling between MF Global, Inc. and Debtors could necessitate a finding that MF Global, Inc. and the Debtors were substantively consolidated.

Such a finding would, in turn, merit treating Debtors like futures clearing merchants. And, such a finding would require that the Court give first priority not to JP Morgan or the professionals in this matter, but to Customers.

It is not beyond the pale to expect that the massive investigation being undertaken by the SEC, CFTC, FBI, and SIPC trustee, will unearth facts that support such a finding.

Accordingly, assuming the Court finds that Debtors provided adequate notice, the Court should protect the Customers’ funds. One such protection would be to release $633 million immediately from the estate of MF Global Holdings, Ltd., which reports excess equity of more than $1.3 Billion. (See Mot. at 5.) This would leave Debtors and their lenders with sufficient additional equity to wind-down Debtors’ business.

Absent such relief, Customers have no other recourse. Indeed, the SIPC cannot provide relief to the Customers, as its protections only inure to those trading in securities. The CME’s offer of $250,000,000 in liquidity does not staunch the bleeding, either. It is an insufficient band-aid, at best. As a result, hundreds, if not thousands, of commodity traders are being forced to liquidate trading positions, are losing opportunities to trade and to hedge market risk, and are losing trading positions because the cash they need in order to make margin calls is tied up with MF Global. These parties’ inability to trade, combined with the commodity market’s loss of confidence resulting from this collapse, will certainly have a chilling effect on the economy.

Accordingly, the Customers ask that the Court protect Customer funds by immediately releasing $633 million to them or, in the alternative, clearly providing — in any final order relating to the Motion—that: (i) Customers shall have a right to an ad hoc committee to monitor events in these bankruptcy proceedings; and (ii) any priority lien given to any party in this bankruptcy shall not be superior to the rights, if any, of the Customers to recover from this bankruptcy estate; and (iii) professionals have no right to recover for fees and expenses until such time as any funds deemed — by the SEC, CFTC, FBI, the SIPC trustee, or this Court — to be Customer funds have been released to the Customers.

It Is Too Soon To Make A Good Faith Finding.

In the Interim Order, it specifically provides that JP Morgan is deemed to have acted in “good faith” and, accordingly, is entitled to the protection of Bankruptcy Code Sections 363(m) and 264(e). Simply put, until the SEC, CFTC and SIPC trustee have completed their investigations, it is simply too soon to determine whether JP Morgan bargained in good faith, at arms-length, for the right to super-priority liens in this matter.

Accordingly, Customers respectfully request that the Court note, in any final order relating to the Motion, that it is withholding judgment as to whether JP Morgan has acted in good faith in these proceedings.

Conclusion.

Were this Court to allow any party to have an interest superior to customer segregated funds, it would provide a loophole in the protections which are the bedrock of commodity trading. This Court should only provide for the use of Cash Collateral which protects customer funds as Congress, the CFTC, CME, and hundreds of thousands of commodity traders have, for over 100 years, believed to have been the case. The system of regulation in the commodities industry is based on this bedrock principle, and this proceeding should in no way affect it.

Wherefore, Phil Edgerley, et al request this honorable Court to deny the request in its current form to utilize Cash Collateral, and only allow such use in a manner which protects segregated customer account holders....

http://maxkeiser.com/2011/11/15/kr210-keiser-report-corporations-fear-ows/

http://www.youtube.com/watch?feature=player_embedded&v=90eGrdPpv3g

The Israeli-Occupied Hearing on Alleged Iranian FBI inspired Terror, via a botched attempt to hire a Mossad-trained Mexican drug cartel thug...

Israel masterminded the plot!

The Israeli-Occupied Hearing on Alleged Iranian FBI inspired Terror, via a botched attempt to hire a Mossad-trained Mexican drug cartel thug..., it doesn't get any better than that....

By Maidhc Ó Cathail

In the wake of the much-heralded FBI sting that supposedly foiled a dastardly plot by Iran’s Revolutionary Guard elite Qods Force – involving a bumbling, failed used-car salesman’s botched attempt to hire a reportedly Mossad-trained Mexican drug cartel – to blow up the Saudi ambassador in a crowded but fictitious Washington D.C. restaurant, a duly alarmed U.S. House of Representatives Committee on Homeland Security convened an urgent hearing on “Iranian Terror Operations on American Soil.” As evidence of Tehran’s supposed threat to the Homeland, the Committee heard testimony from “expert witnesses” who could best be described as propagandists for Israel. Commenting on the partisan line-up, an expert on U.S.-Israeli relations remarked, “If it wasn’t so serious, it would be satire.”

Among the five witnesses, two were from “conservative” think tanks closely aligned with the Israel lobby, while a third represented a supposedly more “progressive” pro-Israeli position. The first think-tanker to speak was Reuel Marc Gerecht, who cited his authority on the subject to explain away the Hollywood B-movie nature of the ludicrous murder-for-hire plot. “I might make a slight digression and just say all intelligence services aren’t as good as you think they are. And the Iranians are no exception. They make a lot of mistakes,” claimed the former Middle East specialist in the CIA’s Directorate of Operations. “So do not, for a moment, buy the argument from those who said it cannot be because this is too sloppy. This is the nature of the game. This is how it is done.” Gerecht, currently a senior fellow at the Foundation for Defense of Democracies, went on to advocate an escalation of “the war and terror” [sic] against a supposedly emboldened Iran. “If they think they can get away with it, they will push forward, and they did get away with it,” he asserted. “Now, the only way that I would argue that you are going to stop that type of mentality and attitude is that you have to convince them that you will escalate. You don’t want to run away from that word, you want to run towards it.” In a July 19 report on the funding of the Foundation for Defense of Democracies, Eli Clifton observed that “its hawkish stance against Iran … is consistent with its donors’ interests in ‘pro-Israel’ advocacy.”

Next up was Dr. Matthew Levitt. “It is too early to tell what the consequences of Iran’s assassination plot may be,” he told the hearing, “but there should be no doubt the plot lays bare the myth that sufficient carrots – from offers of dialogue to requests for an emergency hotline to reduce naval tensions in the Gulf – can induce the regime in Tehran to abandon its support for terrorism, part with its nuclear weapons program, or respect human rights.” Instead, Dr. Levitt recommended applying the sticks of diplomatic pressure, pressing regional bodies to expel Iranian diplomats, building an international consensus against Tehran, military pressure, customs controls, financial pressure, and coordination with European and other allies “to allay their fears over the possible unintended consequences” of the latter. Levitt is the director of the Stein Program on Counterterrorism & Intelligence at the Washington Institute for Near East Policy, a think tank created by AIPAC, the American Israel Public Affairs Committee, to “do AIPAC’s work but appear independent.”

In his testimony, Dr. Lawrence J. Korb counselled against military action, recommending instead that “[t]he Obama administration should use the Iranian plot to convince our allies to recommit themselves to enforcing the current sanctions on Iran.” Concluding by saying that “Iranian aggression toward the United States cannot be tolerated,” the Center for American Progress senior fellow advised the hearing that “it is important that the U.S. response to the Iranian plot furthers our long-term goals: deterring Iranian aggression and protecting U.S. national security.” Dr. Korb’s stated concern for American national security, however, has to be weighed against the two decades the former assistant secretary of defense in the Reagan administration has devoted to working for the release of Jonathan Pollard, the Israeli agent who “did more damage to the United States than any spy in history.”

Sandwiching the testimony by the three think tank fellows were two former U.S. military officers known to be supportive of the hawkish Israeli line on the Middle East. Hyping Iran as “our number one strategic enemy in the world,” retired U.S. Army Gen. Jack Keane suggested “we put our hand around their throat right now.” In 2007, Keane co-authored with Frederick Kagan the American Enterprise Institute-sponsored policy paper entitled “Choosing Victory: A Plan for Success in Iraq” which proposed the so-called “surge” beloved of America’s Israel partisans. Retired Marine Corps Col. Timothy J. Geraghty, who has been echoing all the standard Israeli propaganda against Tehran ever since the 1983 attack on the 24th Marine Amphibious Unit in Beirut under his allegedly negligent command, didn’t hesitate to blame Iranian-backed Hezbollah for the 1994 bombing of the AMIA Jewish centre in Buenos Aires. The U.S. ambassador to Argentina at the time, however, has said, “To my knowledge, there was never any real evidence [of Iranian responsibility]. They never came up with anything.”

During the hearing, the Chairman of the House Committee on Homeland Security, Peter King, called for all Iranian diplomats at the UN to be “kicked out” of the United States for spying. That evening, his provocative statement was given traction through a live interview with CNN’s Wolf Blitzer, who apparently just wanted to know “what’s goin’ on here?” The sincerity of Blitzer’s seemingly ingenuous concern about Iranian espionage on American soil is undermined somewhat by the fact that he was once editor of Near East Report, AIPAC’s bi-weekly newsletter, before serving 17 years with the Jerusalem Post, during which time he authored a sympathetic book on Jonathan Pollard. The title of that “slick piece of damage control” – Territory of Lies – would be a fitting description for the Israeli-occupied hearing on alleged Iranian terror....

CIA monitors Facebook, Twitter: Five million tweets a day...LOL

CIA monitors Facebook, Twitter: Five million tweets a day...LOL

Based in an anonymous industrial unit close to CIA headquarters, a unit of the agency, dubbed the “vengeful librarians”, scour Facebook, Twitter and more for real-time intelligence.

The Associated Press this morning reports an exclusive, explaining how the White House can receive real-time updates on a situation on the ground, leading up to a revolution, predicting crime and disorder, or the ‘mood in the air’ shortly after the death of Osama bin Laden.

The U.S. Central Intelligence Agency on a daily basis, out of an “anonymous industrial park in Virginia”, follows over 5 million tweets by users on the ground.

The ‘Open Source Center’, manned by a team the agency affectionately dubs the “vengeful librarians”, also trawls other social networking sites like Facebook, along with Internet chat rooms; all the way down to newspapers and anything that anyone can contribute to openly.

Along with the vast resources of the agency, the real-time information from an angry blog post to a tweet sent from a BlackBerry, location-based data is gathered and tied to a made phone call to collect as much information as possible. This gives those in the highest offices of the U.S. government a specific picture of a certain place, at a certain time, to predict when an event that may cause national instability, diplomatic harm or suchlike could occur.

The report goes on to suggest that the White House, courtesy of the intelligence gathered from the vast array of resources at their disposal, from the publicly-available content provided by citizens and journalists alike, “saw the uprising in Egypt coming”, but they did not know exactly when it would strike.

The facility was set up as a recommended action based on the report by the 9/11 Commission, with many working from the ‘industrial unit’ to U.S. embassies around the world, in a bid to get closer to the action on the ground.

Intelligence services rely on those speaking the specific dialects of difficult-to-understand languages, often those who grew up in the area and emigrated, or those with family still in the region, along with those with a vast array of degrees in specific subjects to formulate guidance based on the intelligence presented to them.

While many have suspected for some time, with the rare utterance of admittance, that the most clandestine intelligence services around the world monitor Facebook and Twitter, blogs and other content on the web, the report explains how “Facebook and Twitter… have become a key resource for following a fast moving crisis”.

By following messages, Facebook status updates and tweets from Bangkok during the recent uprising, journalists were hampered by the rioting and the army moving in, with traditional media slowing to a trickle. Citizen journalism, therefore, was the prime target for the agency, allowing dozens of ‘reporters’ to be honed in on to provide valuable, real-time information on the ground....LOL

NED and Its NGOs Equal CIA Subversion....

THE NATIONAL ENDOWMENT FOR DEMOCRACY OF US

B. RAMAN

The post-Watergate enquiries into the activities of the Central Intelligence Agency (CIA) of the US exposed details of its covert political activities in other countries in order to promote US foreign policy objectives. Amongst such activities were the secret funding of individuals, political parties and non-governmental organisations (NGOs) favourable to US interests and funneling of money to counter the activities of those considered anti-US.

After taking over as the President in January, 1977, Mr.Jimmy Carter banned such activities and imposed strict limits on the CIA’s covert operations in foreign countries. During the election campaign of 1980, Mr.Ronald Reagan used effectively against Mr.Carter the argument that the post-Vietnam and post-Watergate decline of the US under Mr.Carter was due to the emasculation of its military and intelligence apparatus.

After his election in November, 1980, and before his taking-over as the President in January, 1981, Mr.Reagan appointed a transition group headed by the late William Casey, an attorney and one of his campaign managers, who was to later take over as the CIA Director, to recommend measures for strengthening the USA’s intelligence capability abroad.

One of its recommendations was to revive covert political activities. Since there might have been opposition from the Congress and public opinion to this task being re-entrusted to the CIA, it suggested that this be given to an NGO with no ostensible links with the CIA.

The matter was further examined in 1981-82 by the American Political Foundation’s Democracy Programme Study and Research Group and, finally, the National Endowment for Democracy (NED) was born under a Congressional enactment of 1983 as a “non-profit, non-governmental, bipartisan, grant-making organisation to help strengthen democratic institutions around the world.”

Though it is projected as an NGO, it is actually a quasi-governmental organisation because till 1994 it was run exclusively from funds voted by the Congress (average of about US $ 16 million per annum in the 1980s and now about US $ 30 million) as part of the budget of the US Information Agency (USIA). Since 1994, it has been accepting contributions from the private sector too to supplement the congressional appropriations.

Thirty per cent of the budgetary allocations constitute the discretionary fund of the NED to be distributed directly by it to overseas organisations and the balance is distributed through what are called four “core organisations”—the International Republican Institute (IRI), the National Democratic Institute for International Affairs (NDI), the Centre for International Private Enterprise (CIPE) and the Free Trade Union Institute (FTUI).

In 1994, the NED set up two other organisations called the International Forum for Democratic Studies (IFDS) and the Democracy Resource Centre (DRC), both largely funded by the private sector.

Since its inception, the NED and its affiliates have been mired in controversy in the US itself as well as abroad. Amongst its strongest supporters in the US is the Heritage Foundation of Washington DC, a conservative think tank, which played an active role in influencing the policies of the Reagan and Bush Administrations.

It brought out two papers on the justification for the NED, when questions were raised in the US on the continued need for it after the collapse of the communist regimes of East Europe. In the first paper of July 8,1993, (Executive Memorandum No. 360) it described the NED as “an important weapon in the war of ideas” and said:” The NED has played a vital role in providing aid to democratic movements in the former Soviet Union, Eastern Europe, China, Cuba, Iran, Iraq, Nicaragua, Vietnam and elsewhere….. Communist dictatorships still control China, Cuba, North Korea and Vietnam. Moreover, ex-communists masquerading as nationalists continue to dominate several of the Soviet successor states. The NED can play an important role in assisting those countries in making the turbulent transition to democracy….. Local political activists often prefer receiving assistance from a non-governmental source, as aid from a US government agency may undermine their credibility in the eyes of their countrymen.”

In the second paper of September 13, 1996, (Executive Memorandum No.461), it said:”The NED advances American national interests by promoting the development of stable democracies friendly to the US in strategically important parts of the world. The US cannot afford to discard such an effective instrument of foreign policy at a time when American interests and values are under sustained ideological attack from a wide variety of anti-democratic forces around the world…The NED has aided Lech Walesa’s Solidarity movement in Poland, Harry Wu’s human rights efforts in China and independent media outlets in former Yugoslavia. Russian political activists affiliated with the NED also played a major role in President Boris Yeltsin’s re-election campaign against the reinvigorated Communist Party earlier this year…. The NED is a cost-effective way to encourage captive nations to liberate themselves without committing the US to a prohibitively risky and costly military crusade to free them from communism.”

Testifying before the Sub-committee on International Operations and Human Rights of the Committee on International Relations of the House of Representatives on March 13,1997, Mr.Carl Gershman, President of the NED, said: ” I just want to say that the Endowment’s work is based upon a very, very simple proposition. And that is, where there are people who share our values, where there are people who might be called the natural friends of America, then it is our obligation to help those people in some way.”

Amongst the critics of the NED are Ms. Barbara Conry, a foreign policy analyst at the Cato Institute of Washington D.C. and Mr. Ralph McGehee, stated to be a former CIA official.

In a paper of November 8,1993(Foreign Policy Briefing No.27), Ms.Conry said: “NED is resented (abroad) as American interference; it is often further resented because it attempts to deceive foreigners into viewing its programmes as private assistance…. On a number of occasions, NED has taken advantage of its alleged private status to influence foreign elections, an activity that is beyond the scope of AID (Agency For International Development) or USIA and would otherwise be possible only through a CIA covert operation….. What finally drew public attention to NED’s meddling in foreign elections was an aborted attempt to provide opposition candidate Violeta Chamorro with $ 3 million in funding for her 1989 election campaign against Nicaraguan President Daniel Ortega. The plan was abandoned after it was determined that NED’s charter, which expressly forbids campaign contributions, would be violated. In the end, the money was channeled to programmes that aided Chamorro indirectly rather than through direct campaign contributions.”

In a statement of January 19,1996, Mr.McGehee described the post-1991 activities of the NED as “political action operations targeting China and Cuba.” Another NGO of the US has said: ” NED engages in much of the same kinds of interference in the internal affairs of foreign countries, which were the hallmark of the CIA. The NED has financed, advised and supported in many ways selected political parties, election campaigns, unions, student groups, book publishers, newspapers, other media, even guerillas in Afghanistan and, in general, organisations and individuals which mesh well with the gears of the globalised-economy machine…. Allen Weinstein, who helped draft the legislation establishing NED, and also founded the Centre for Democracy, one of NED’s funding middlemen, was quite candid when he said in 1991: “A lot of what we do today was done covertly 25 years ago by the CIA.” The NED, like the CIA before it, calls what it does supporting democracy. The governments and movements whom the NED targets call it destabilisation.”

Initially, the NED’s activities were directed mainly against the communist regimes of East Europe, but, subsequently, it started combating the communist parties in multi-party democracies of West Europe too. In the 1980s, when the late Francois Mitterrand was the French President, an NED report showed an expenditure of US $ 1.5 million “to promote democracy in France.”

There was an uproar in France when the French press discovered that part of this amount had been given by the NED, through the FTUI, to the National Inter-University Union of France, allegedly a right-extremist and xenophobic organisation, in an attempt to use it to defeat communist candidates in the elections to the National Assembly. Embarrassed by the controversy, the Reagan Administration dissociated itself from the NED activities in France.

After the collapse of the communist regimes of East Europe, the NED has been focussing its activities against the communist regimes of Cuba, Vietnam, China and North Korea and the Myanmarese military regime and against the resurgence of the communist parties in East Europe due to the economic difficulties there.

Its activities relating to China are of two kinds: Those, which are legitimate in the Chinese perception such as training of local village officials in the holding of elections, training of local business executives in better management practices, advice on the drafting of economic reform legislation etc and those, which are legitimate in the US perception, but interference in internal affairs in the Chinese view, such as support to political dissidents, human rights activists and Tibetan exiles and projection of Taiwan as a democratic model worthy of emulation.

The first type of activities is carried out by workers of organisations affiliated to the NED, either based in China or visiting the country and the second by off-shore offices of the NED, which were located in Hong Kong before its reversion to China in June, 1997, and which were thereafter reportedly shifted to Australia since the ASEAN countries would not host them. Finding Australia not a convenient place, the NED has reportedly been eyeing India as a possible base for its activities directed against China.

Beijing has reasons to be concerned over what it considers as the illegitimate activities of the NED. Of the 28 NGOs of Asia funded by the NED, 14 focus on China, four of them of Tibetan exiles, five on Myanmar, two on Cambodia, and one each on Vietnam and North Korea and the remaining five on the Asia-Pacific region as a whole.

In his testimony of March 13,1997, before the House Sub-committee on International Operations and Human Rights, Mr.Gershman said:” There has been a doubling of resources spent in Asia (primarily China, Burma and Cambodia) and a tripling of resources for the Middle East. There were also dramatic increases in Central Asia and the former Yugoslavia…While the discretionary programmes and those of our affiliated labour institute support the activities of various pro-democracy networks, among them Human Rights in China, the China Strategic Institute, the Laogai Research Foundation, and the Hong Kong based activities of labour activist Han Dongfang, IRI and CIPE have targeted opportunities created by the official reform policy in the areas of local elections and economic modernisation.Additional grants support the democracy movements in Hong Kong and Tibet and,through the International Forum, we have highlighted the role of Taiwan as an Asian model of successful democratisation.”

The trans-border activities of the NED against the Myanmarese military regime seem to be directed mainly from Thailand and India. This is evident from a testimony given by Ms.Louisa Coan, NED’s Programme Officer for Asia, before the House Sub-committee on Asia and the Pacific on September 17,1997.

She said: “NED has been able through its direct grants programme to support the dissidents, to support the democracy movement of Daw Aung San Suu Kyi, particularly through assistance to the groups along the borders in Thailand and in India, including twice daily radio programming through the Democratic Voice of Burma (author’s comment: based in Scandinavia), newsletters, underground newspaper, underground labour organising, particular programmes to foster inter-ethnic co-operation and unity among the opposition forces in support of Aung San Suu Kyi’s call for tripartite dialogue and national reconciliation.”

It is not known whether New Delhi was aware of the India-based activities of the NED against the Yangon regime.

Before the recent visit of the US President, Mr.Bill Clinton, to India, the NED headquarters in Washington issued the following press release: “Secretary of State Madeleine Albright announced on Tuesday March 14 that the US and India will launch a joint non-governmental initiative called the Asian Centre for Democratic Governance during President Clinton’s upcoming trip to South Asia.

“Jointly organised by the Confederation of Indian Industry (CII) and the NED, the Centre will be based at CII’s offices in New Delhi, The Bureau of Parliamentary Studies and Training, an affiliate of the Indian Parliament, will partner with the CII in implementing the activities of the Centre.”

The press release said the expenditure on the initiative would be shared by the CII and the NED.

It is an interesting case of an important member of the Clinton Cabinet, announcing on behalf of a self-proclaimed NGO of the US funded by the Congress, a non-governmental initiative in collaboration with a non-governmental Indian business organisation with which an office of the Indian Parliament would also be associated.

This launching was duly done at New Delhi.

There are three likely implications of this unusual venture:

* Possibility of misunderstanding with China which might interpret it as directed against it and its presence in Tibet.

* Impropriety in co-operating with an American organisation working against the present Government at Yangon, which has normal diplomatic relations with New Delhi and has been co-operating in counter-insurgency measures in the North-East.

* The presence in Indian territory, with official blessing, of an organisation, which aims to wipe out communism as a political and ideological movement all over the world and which might utilise its presence to undermine the Indian communist movement. NED has never criticised the Indian Communist parties, but a reading of the past statements of those in the US supporting the NED would indicate that they hold communism and democracy as incompatible.

The US has also announced the association of India as co-sponsor with a forthcoming conference of “communities of democracies ” in Poland being funded by the Stefan Batory Foundation of Poland, set up by George Soros in 1998, to counter the resurgence of communism in East Europe, and the Freedom House of the US.

The Freedom House was founded in the 1940s “to strengthen free institutions at home and abroad”. It played an active role in carrying on a psychological warfare (psywar) against the troops of the USSR and the late President Najibullah in Afghanistan during the 1980s through the Afghanistan Information Centre set up by it, allegedly with CIA funds. The offices of this centre at Peshawar in Pakistan trained the Afghan Mujahideen groups and Pakistani organisations such as the Harkat-ul-Mujahideen (formerly known as the Harkat-ul-Ansar) and the Lashkar-e-Taiba, presently active in Kashmir, in techniques of media management and psywar.

Since 1983, part of the funds voted by the Congress to the NED are funneled to the Freedom House, which also gets contributions from the private sector. The Freedom House focuses its activities on media and communications and, according to a 1990 study by the Interhemispherique Resource Centre of the US, more than 400 journalists in 55 countries were collaborating with the Freedom House in its activities against communist parties and regimes.

Before going ahead with these projects, there is an urgent need for an examination of the implications of our collaboration with such organisations from the point of view of our national security and political stability.....

http://www.bloomberg.com/news/2011-11-03/lockheed-s-f-35-costs-rose-64-over-decade-in-rich-man-s-world-.html