Tag: ek Politics

Given that it’s stupid from a macro-economic sense, one silver lining in the sequester is that the cuts fall equally on the military budget.

Of course the likelihood is that the Pentagon will take it out of soldiers’ and veterans’ wages and benefits, but here are two programs from Lockheed that are absolute boondoggles.

The first is the C-130 program.  Over 2,300 of these planes have been built, far in excess of any operational need.  Good airframes are mothballed in the desert because National Guard units can’t find any useful purpose for them.  The latest upgrade, the C-130J has been plagued with counterfeit parts and propeller cracks.

C-130 Math and a Cargo of Pork

Posted by Jeremiah Goulka, TomDispatch and Mother Jones

8:54am, March 10, 2013

After 25 years, the Pentagon decided that it was well stocked with C-130s, so President Jimmy Carter’s administration stopped asking Congress for more of them.

Lockheed was in trouble.  A few years earlier, the Air Force had started looking into replacing the Hercules with a new medium-sized transport plane that could handle really short runways, and Lockheed wasn’t selected as one of the finalists.  Facing bankruptcy due to cost overruns and cancellations of programs, the company squeezed Uncle Sam for a bailout of around $1 billion in loan guarantees and other relief.

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Then a scandal exploded when it was revealed that Lockheed had proceeded to spend some $22 million of those funds in bribes to foreign officials to persuade them to buy its aircraft.  This helped prompt Congress to pass the Foreign Corrupt Practices Act.

So what did Lockheed do about the fate of the C-130?  It bypassed the Pentagon and went straight to Congress.  Using a procedure known as a congressional “add-on” — that is, an earmark — Lockheed was able to sell the military another fleet of C-130s that it didn’t want.

To be fair, the Air Force did request some C-130s.  Thanks to Senator John McCain, the Government Accountability Office (GAO) did a study of how many more C-130s the Air Force requested between 1978 and 1998.  The answer: Five.

How many did Congress add on?  Two hundred and fifty-six.

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According to its 2011 annual report, “82% of our $46.5 billion in net sales were from the U.S. Government, including 61% from the Department of Defense.”  And don’t forget that a significant part of the 17% of its sales that went to international customers in 2011 were actually paid for by Uncle Sam under the rubric of foreign military aid.  Only 1% of its sales that year were to “U.S. commercial and other customers.”  Its CEO made $20,538,981, while the company paid only $722 million in net federal and foreign taxes in that same year.

When it came to the C-130, the process worked like a dream. “By following this strategy from year to year,” writes a team of scholars of lobbying, “Lockheed has been able to turn what was to be the C-130’s doom in the 1970s into a regularly funded military spending program, all without a single request having been sent by the administration to Congress.” Lockheed was so successful on Capitol Hill that its work even garnered a name in honor of the 50 planes bought for every one requested: “C-130 math.”

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So what happened to those extra planes?  The Air Force didn’t have the space for them, so they retired some older models that still had plenty of life in them and shunted most of the rest off to the Air Force Reserves and Air National Guard.

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The C-130J has been plagued by problems.  In 2004, after the military had acquired 50 of the planes, the Pentagon’s Inspector General found that, even while the Air Force and Congress kept ordering more of the planes, they didn’t meet contracted standards.  The weather chasers couldn’t chase storms because propellers would crack in bad weather.  The military wouldn’t use C-130Js for air drops in Iraq or Afghanistan because they didn’t think they were safe.  “The design of the C-130J is not stable and the C-130J aircraft has not passed operational testing,” the Inspector General concluded.  It “is not operationally effective or suitable.”

Then there is the F-35.

F-35’s ability to evade budget cuts illustrates challenge of paring defense spending

By Rajiv Chandrasekaran, Washington Post

Published: March 9

The biggest barrier to cutting the F-35 program, however, is rooted in the way in which it was developed: The fighter jet is being mass-produced and placed in the hands of military aviators such as Walsh, who are not test pilots, while the aircraft remains a work in progress. Millions more lines of software code have to be written, vital parts need to be redesigned, and the plane has yet to complete 80 percent of its required flight tests. By the time all that is finished – in 2017, by the Pentagon’s estimates – it will be too late to pull the plug. The military will own 365 of them.

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When the F-35 finishes testing, “there will be no yes-or-no, up-or-down decision point,” said Pierre Sprey, who was a chief architect of the Air Force’s F-16 Fighting Falcon. “That’s totally deliberate. It was all in the name of ensuring it couldn’t be canceled.”

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Initial tests already have yielded serious problems that are forcing significant engineering modifications. The entire fleet was grounded earlier this year because of a crack in the fan blade in one jet’s engine. The Marine Corps’ version has been prohibited from its signature maneuver – taking off and landing vertically – because of a design flaw. And the Navy model has not been able to land on an aircraft carrier because its tailhook, an essential feature to alight aboard a ship, needs to be redesigned. The Pentagon’s top weapons tester issued a scathing report on the F-35 this year that questioned the plane’s reliability and warned of a “lack of maturity” in performance.

When the F-35 program was first approved by the Pentagon, Lockheed Martin said it could develop and manufacture 2,852 planes for $233 billion. The Pentagon now estimates the total price tag at $397.1 billion. And that is for 409 fewer planes.

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A bigger problem was the fundamental concept of building one plane, with stealth technology, that could fly as far and fast as the Air Force wanted while also being able to land on the Navy’s carriers and take off vertically from Marine amphibious assault ships.

Instead of meeting the original plan of being about 70 percent similar, the three versions now are 70 percent distinct, which has increased costs by tens of billions and led to years-long delays. “We have three airplane programs running in parallel,” Bogdan said. “They are very, very different airplanes.”

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An electrical engineer who worked as a manager at Lockheed’s F-35 program headquarters in Fort Worth beginning in 2001 said the development effort was beset with “tremendous organizational inadequacies” and “schedule and cost expectations that never were achievable.” In his unit, he said, there were no firm development timetables and no budgets. “It was all on autopilot,” he said. “It was doomed from the beginning.”

In 2005, the engineer, who spoke on the condition of anonymity because of concerns he will risk job opportunities in the close-knit aviation industry, participated in a two-week-long assessment of the program.”There were reds and yellows across the board,” he recalled. But when he briefed his superiors, “nobody was interested,” he said. And when he gave a copy of the assessment to those at the Pentagon office responsible for the plane, he said, “they didn’t want to hear it.”

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The Pentagon’s latest five-year budget plan, released last year, calls for a smaller volume of annual purchases to save money. Sequestration-related cuts this year also will defer a few more planes. But the overall purchase of 2,443 jets remains unchanged.

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Although Air Force and Marine leaders have held fast, an unofficial reexamination is occurring within the Navy, which is not as desperate for the F-35 because it possesses a relatively new fleet of F/A-18 Super Hornets. While toeing a public line of support for the F-35, some Navy experts are looking at whether it makes sense to reduce its planned order and plow some of the savings into high-speed drones that can operate off aircraft carriers, according to senior military officials.

Should that occur, or should Defense Secretary Chuck Hagel decide to shrink the overall purchase, it could prompt howls from key U.S. allies, including Britain, Italy and Norway, which all have contributed to the development of the aircraft. Their purchase price has been based on a U.S. order of about 2,500 jets. If that number drops, the per-plane cost will rise for the allies, possibly leading them to buy fewer then planned.

For some of them, cost increases and delays over the past decade have been significant enough to prompt a reexamination. Australia is deciding whether to halve its 100-plane order and Canada is reconsidering its plan to buy 65.

A smaller total purchase, of course, further increases unit costs for the United States, which likely would increase pressure to cut more. Procurement officers have a term for the phenomenon, borrowed from the world of aviation: a death spiral.

These are not the only examples of waste, fraud, and graft in the U.S. military inventory (the M1 Tank, Osprey VTOL, and Littoral Combat Ship spring to mind) but when you consider that the U.S. spends as much as the next 20 countries combined you have to ask yourself “Why?”

Transcript

The Drug Scandal That’s Finally Hitting The Big Time

By Charles P. Pierce, Esquire

March 11, 2013 at 1:45PM

(B)ack during the Golden Age Of Bipartisanship, wherein everybody made nicey-nice to each other, and deals were cut that sold out gay people (DOMA), poor people (welfare reform), and all the while the Republicans tried to give the boot to the president with whom they were cutting all the deals, and most of the Democrats, looking to suck up that sweet corporate cash that was sluicing into the party through the DLC floodgates, went along for the ride. (Joe Scarborough, the Machiavelli of the live bait industry, cited this period just the other day as being altogether remarkable. Republicans were working with a president they were trying to impeach! Mirabile dictu!) Now, here’s another masterpiece of bipartisan achievement. (The Supreme Court mucked around with it, too, gutting what remained of the FDA’s power to regulate the compounders in 2001.) They waited until Kessler was gone before passing the bill. In signing the bill, President Bill Clinton attached a presidential signing statement to it that strikes with a cruel irony today.

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Trust them. They’ve got this.

But the principle obtained – make a deal to make a deal, and the devil take the details. Now, almost 50 people are dead because Everyone Agrees that The Market will always be more efficient at doing things like picking up deadly fungal infections than the dead hand of government regulation will. Some day, we are going to have to count up the cost of The Third Way of the 1990’s, and it is not going to be pretty.

Crossposted from The Stars Hollow Gazette

With a little bit of Alex Pareene just for sport.

Transcript

Dwindling Deficit Disorder

By PAUL KRUGMAN, The New York Times

Published: March 10, 2013

What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.

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(A)fter peaking in 2009 at $1.4 trillion, the deficit began coming down. The Congressional Budget Office expects the deficit for fiscal 2013 (which began in October and is almost half over) to be $845 billion. That may still sound like a big number, but given the state of the economy it really isn’t.

Bear in mind that the budget doesn’t have to be balanced to put us on a fiscally sustainable path; all we need is a deficit small enough that debt grows more slowly than the economy. To take the classic example, America never did pay off the debt from World War II – in fact, our debt doubled in the 30 years that followed the war. But debt as a percentage of G.D.P. fell by three-quarters over the same period.

Right now, a sustainable deficit would be around $460 billion. The actual deficit is bigger than that. But according to new estimates by the budget office, half of our current deficit reflects the effects of a still-depressed economy. The “cyclically adjusted” deficit – what the deficit would be if we were near full employment – is only about $423 billion, which puts it in the sustainable range; next year the budget office expects that number to fall to just $172 billion. And that’s why budget office projections show the nation’s debt position more or less stable over the next decade.

So we do not, repeat do not, face any kind of deficit crisis either now or for years to come.

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Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.

Transcript

Gone Deficit Gone

Paul Krugman, The New York Times

March 9, 2013, 8:31 am

Anyone who is serious (as opposed to Serious) about matters fiscal knows that it’s highly misleading just to focus on the raw deficit numbers (ONE TRILLION DOLLARS), for two reasons.

First, fluctuations in the deficit tend to be driven by the business cycle; when the economy slumps, revenues fall and some kinds of expenditure, like unemployment benefits, rise. You want to take out these “automatic stabilizers” when assessing the underlying state of the budget.

Second, we don’t have to balance the budget to have a sustainable fiscal position; all we need is to ensure that debt grows more slowly than GDP.

So CBO is now out with its latest report on automatic stabilizers. It estimates that in fiscal 2013 these stabilizers will amount to $422 billion, accounting for just about half of a projected $845 billion deficit. So the cyclically adjusted deficit will be $423 billion.

How does this compare with the deficit consistent with fiscal sustainability? Well, there’s about $11.5 trillion in federal debt in the hands of the public. A reasonable, indeed fairly conservative guess is that nominal GDP will in future grow by 4 percent per year, half from real growth and half from inflation. This means that the sustainable deficit is 4 percent of $11.5 trillion, or $460 billion. Hey, we’re there!

And next year the adjusted deficit is projected to be much smaller.

Dwindling Deficit Disorder

By PAUL KRUGMAN, The New York Times

Published: March 10, 2013

What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.

…

Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.

But we aren’t. The deficit is indeed dwindling, and the case for making the deficit a central policy concern, which was never very strong given low borrowing costs and high unemployment, has now completely vanished.

The undead, unnecessary, unhelpful Grand Bargain

By Alex Pareene, Salon

Monday, Mar 11, 2013 07:45 AM EDT

The Grand Bargain is revered, among the Sunday Show set, as a goal essentially for its own sake. Its Grandness is its point. The thought of the parties coming together, agreeing on a mutually unpleasant compromise involving great political “sacrifice” (symbolic sacrifice for the politicians, likely eventual actual sacrifice for the constituents), warms the cockles of the Beltway Establishmentarian’s heart. If liberals and conservatives can’t stand the deal, all the better, even if one or both sides have perfectly valid reasons for blanching. The Bargain must, by necessity, reduce the deficit by “reining in entitlements.” “Entitlements” means Social Security and Medicare, two very popular and successful programs designed to keep retired people alive. Social Security and Medicare “reforms” that make both programs less generous are among the least popular policy proposals in America today, but both parties – at least, the leaders of both parties – support them (rhetorically). Cutting these programs is probably the single highest priority of the tiny centrist elite, and it has been for years, excepting the usual run-ups to our various wars. Part of the elaborate theater of Performing Seriousness in Washington is claiming that “everyone agrees” that the cuts are urgent and necessary, while also bemoaning that no politicians are “brave” enough to support them.

Cuts to those programs have been offered, repeatedly, by the president, to Republicans. Republicans, thus far, have pretended not to notice, because their parallel news media misinforms them and because they incorrectly believe the president to be insincere in his desire to hack away at those very popular and successful programs. The recent Obama charm offensive is designed to convince Republicans that he is very sincere in his efforts to get a Serious Debt Deal, involving “entitlement” cuts and tax reform.

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(I)f Barack Obama finally gets his Grand Bargain, we’re going to get “entitlement” cuts despite the fact that is a bad idea that Americans do not want.

There are two important things to remember about “entitlements”: They are hugely popular programs for a very good reason, and actual sensible “reform” would mean improving them, not sacrificing them at the altar of “fiscal responsibility.” A “grand bargain” that was done with the intention of creating the best possible outcome for the most Americans, instead of with the intention of purposefully doing unpopular things because doing unpopular things denotes “seriousness,” would lower the Medicare eligibility age and expand Social Security. That the opposite approach is effectively the bipartisan consensus approach is the special sort of Beltway madness that makes sensible people wish for either a proper parliamentary system or at the very least for an EMP to take out Georgetown and much of Washington’s surrounding suburbs.

Medicare is very expensive. It’s the “entitlement” that is actually pretty much responsible for those scary “debt will be 10 million percent of GDP by the time the rapidly rising seas have swallowed much of the Earth” graphs. Medicare is expensive because we spend a lot on healthcare. We spend a lot on healthcare basically just because we want to, and doing so has been very good to a lot of people who work in healthcare fields. The way nearly every other advanced nation controls healthcare costs is by just having the government set prices. I thought everyone knew Medicare was cheaper than private insurance because it could negotiate lower rates, but apparently lots of people didn’t understand this until Steven Brill wrote a big article about it in Time. Again, many people understand that “reining in healthcare costs” means just spend less on healthcare, but for some reason Washington is fixated on passing the existing ballooning costs onto old and working people instead of just agreeing to pay doctors less in general.

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Social Security, meanwhile, is lumped in with Medicare not because it faces rapidly ballooning costs in the future – it doesn’t – but because a lot of people just really, really, really want to cut it, or make it less generous, or let the finance industry get its hands on the money. Social Security would seriously be “fixed” just by a) raising taxes and/or b) deciding to pay for it, with borrowing or with some other pot of money.

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We should, in other words, be having a big national debate about how to expand Social Security, not find ways to make it less generous for future retirees. (Maybe let’s make our country seem like a nice livable place and get a bunch of immigrants here to expand our population and contribute to the economy and pay taxes and stuff?) Otherwise instead of a Social Security funding crisis we will have a “no one has enough money to retire” crisis, in a few years. Which will likely require expensive government intervention anyway. Instead, the Obama/Democratic/Centrist position is “chained CPI,” which reduces benefits. (The Republican position is “let’s wait a while and try to privatize it again later, maybe.”)

In a country with a political system that was actually responsible and responsive to public preferences, the “grand bargain” following the resounding victory of the more liberal party in national elections would be the expansion of the welfare state and the social safety net. Instead, we have two austerity parties arguing over the rate at which they’ll impoverish the future elderly.

We’ll just have to count on the wingnuts in the House GOP to blow the whole deal up again, like they usually do.

The Extraordinary Science of Addictive Junk Food

By MICHAEL MOSS, The New York Times

Published: February 20, 2013

The snack that Dunn was proposing to sell: carrots. Plain, fresh carrots. No added sugar. No creamy sauce or dips. No salt. Just baby carrots, washed, bagged, then sold into the deadly dull produce aisle.

“We act like a snack, not a vegetable,” he told the investors. “We exploit the rules of junk food to fuel the baby-carrot conversation. We are pro-junk-food behavior but anti-junk-food establishment.”

The investors were thinking only about sales. They had already bought one of the two biggest farm producers of baby carrots in the country, and they’d hired Dunn to run the whole operation. Now, after his pitch, they were relieved. Dunn had figured out that using the industry’s own marketing ploys would work better than anything else. He drew from the bag of tricks that he mastered in his 20 years at Coca-Cola, where he learned one of the most critical rules in processed food: The selling of food matters as much as the food itself.

Later, describing his new line of work, Dunn told me he was doing penance for his Coca-Cola years. “I’m paying my karmic debt,” he said.

Thousands across Japan march against nuclear power

AFP

9 hours ago

TOKYO – Anti-nuclear rallies took place across Japan, on the eve of the second anniversary of the March 11 earthquake and tsunami disaster, urging Japan’s new government to abandon nuclear power.

Tens of thousands gathered in Hibiya park in central Tokyo, where activists and unionists packed a concert hall to voice their opposition.

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Similar rallies were held elsewhere in Tokyo and across the rest of the nation, with local media reporting as many as 150 anti-nuclear events planned for the weekend and on Monday.

Protesters are calling for Prime Minister Shinzo Abe, who took office late December following his party’s election win, to dismantle all nuclear plants.

Fukushima Toxic Waste Swells as Japan Marks March 11 Disaster

By Jason Clenfield, Bloomberg News

Mar 10, 2013 11:01 AM ET

Radiation danger prevents workers from approaching a tangle of metal and upturned cars surrounding Unit 3, which was ripped apart by a hydrogen gas explosion after the tsunami. Remote controlled cranes are used to pull steel and concrete rubble from the top of the structure.

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It will be years before even robots can work inside the steel- and concrete-encased core, according to Arnie Gundersen, chief engineer at Burlington, Vermont-based energy consultant Fairewinds Associates Inc.

“Unit 3 is in a condition that none of us has ever imagined,” he said by phone. “The entire structure is inaccessible to human beings right now.”

While clearing debris helps reduce radiation levels, it’s also filling the plant with toxic waste for which the utility has no ultimate disposal plan. More than 73,000 cubic meters of contaminated concrete, 58,000 cubic meters of irradiated trees and bushes, and 157,710 gallons of toxic sludge has built up, according to the utility.

Then there’s the water.

Tanks of it now cover an area equal to 37 football fields and the utility is clearing forest to make room for more. Some 400 tons of ground water each day seeps into reactor buildings and is contaminated.

There are 480 cesium-clogged filters, each weighing 15 tons, already warehoused in what the utility calls temporary storage.

“These filters will have to be stored for 300 years because cesium has a 30-year half-life and the rule of thumb is 10 half-lives,” Fairewinds’ Gundersen said.

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Tokyo Electric has “no plans” for what to do with the water once its filtered, plant manager Takahashi said. It will probably wind up back in tanks, spokesman Yoshikazu Nagai said, standing in front of the new treatment facility.

Graft and corruption is rampant.

Japan’s cleanup of radiation, other toxins from tsunami and nuclear fiasco anything but clean

By Associated Press

Updated: Sunday, March 10, 1:02 AM

To clear, sort and process the rubble – and a vastly larger amount of radiation-contaminated soil and other debris near the nuclear plant in Fukushima, the government is relying on big construction companies whose multi-layer subcontracting systems are infiltrated by criminal gangs, or yakuza.

In January, police arrested a senior member of Japan’s second-largest yakuza group, Sumiyoshi Kai, on suspicion of illegally dispatching three contract workers to Date, a city in Fukushima struggling with relatively high radioactive contamination, through another construction company and pocketing one-third of their pay.

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Labor shortages, lax oversight and massive amounts of funds budgeted for the clean-up are a recipe for cheating. And plenty of money is at stake: the cleanup of a 20-kilometer (12-mile) segment of an expressway whose worst contamination exceeds allowable radiation limits by 10 times will cost 2.1 billion yen ($22.5 billion), said Yoshinari Yoshida, an Environment Ministry official.

Move along, nothing to see here.

Nuclear chief: US plants safer after Japan crisis

By MATTHEW DALY, Associated Press

March 10, 2013 1:35 PM

All but five of the nation’s 104 nuclear reactors were performing at acceptable safety levels at the end of 2012, (Nuclear Regulatory Commission Chairman Allison) Macfarlane said, citing a recent NRC report. “You can’t engage that many reactors and not have a few that are going to have difficulty,” she said.

But the watchdog group, the Union of Concerned Scientists, has issued a scathing report saying nearly one in six U.S. nuclear reactors experienced safety breaches last year, due in part to weak oversight. The group accused the NRC of “tolerating the intolerable.”

Using the agency’s own data, the scientists group said 14 serious incidents, ranging from broken or impaired safety equipment to a cooling water leak, were reported last year. Over the past three years, 40 of the 104 U.S. reactors experienced one or more serious safety-related incidents that required additional action by the NRC, the report said.

“The NRC has repeatedly failed to enforce essential safety regulations,” wrote David Lochbaum, director of the group’s Nuclear Safety Project and author of the study. “Failing to enforce existing safety regulations is literally a gamble that places lives at stake.”

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Problem-plagued plants in Florida and Wisconsin are slated for closure, and four other reactors remain offline because of safety concerns. Shut-down reactors include two at the beleaguered San Onofre nuclear power plant in southern California, which hasn’t produced electricity since January 2012, when a tiny radiation leak led to the discovery of damage to hundreds of tubes that carry radioactive water.

But probably not the one you were hoping for.

Berlusconi Gets One-Year Sentence Over Wiretapping Case

By ELISABETTA POVOLEDO, The New York Times

Published: March 7, 2013

The case must go through more rounds of appeal before becoming definitive. His brother, Paolo, the publisher of the Milan newspaper Il Giornale, was also sentenced to two years and three months for illegally allowing the publication in 2006 of what prosecutors say was a wiretapped conversation between Piero Fassino, then the leader of Italy’s center-left opposition, and Giovanni Consorte, then the chairman of insurer Unipol, which was bidding to buy one of Italy’s chief banks, Banca Nazionale del Lavoro.

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Mr. Berlusconi has been parrying prosecutors for decades, saying that the many criminal cases brought against him were just political attacks. “It is really impossible to tolerate a judicial persecution that has lasted 20 years and starts up again every time there are particularly complex moments in the country’s political life,” Mr. Berlusconi said in a note posted on his party’s Web site on Thursday afternoon, which reiterated calls for a reform of the judicial system.

Sentences are expected this month in two other cases against him. In one, Mr. Berlusconi is on trial over charges that he paid for sex with an underage nightclub dancer and then used his influence to cover it up.

On Monday, prosecutors accused Mr. Berlusconi of running a “prostitution ring” in his home outside Milan.

And a verdict is expected on March 23 in the appeal trial to uphold a conviction on charges of tax fraud. Last October, Mr. Berlusconi was sentenced to four years.

Meanwhile-

Italy’s Rating Cut by Fitch as Vote Result May Deepen Slump

By Lorenzo Totaro, Bloomberg News

Mar 8, 2013 12:57 PM ET

Investors are paying less attention to the views of ratings companies and relying more on their own analysis. Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of 32 upgrades, downgrades and changes in credit outlook last year, according to data compiled by Bloomberg published in December.

Investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by Standard & Poor’s. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974.

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The euro region’s third-biggest economy shrank 2.4 percent last year as the country’s budget deficit narrowed to match the European Union limit of 3 percent.

Italy will probably contract again this year and unemployment will continue rising to reach 12 percent next year, European Commission forecasts released on Feb. 2 showed.

Fitch said today it expects Italy’s GDP to fall 1.8 percent this year as public debt peaks at almost 130 percent, up from 127 percent in 2012.

Revealed: Pentagon’s link to Iraqi torture centres

Mona Mahmood, Maggie O’Kane, Chavala Madlena and Teresa Smith, The Guardian

Wednesday 6 March 2013 11.13 EST

The Pentagon sent a US veteran of the “dirty wars” in Central America to oversee sectarian police commando units in Iraq, that set up secret detention and torture centres to get information from insurgents. These units conducted some of the worst acts of torture during the US occupation and accelerated the country’s descent into full-scale civil war.

Colonel James Steele, then 58, was a retired special forces veteran nominated by Donald Rumsfeld to help organise the paramilitaries in an attempt to quell a Sunni insurgency, according to an investigation by the Guardian and BBC Arabic. After the Pentagon lifted a ban on Shia militias joining the security forces, the membership of the Special police commandos was increasingly drawn from violent Shia groups like the Badr brigades.

A second special adviser, retired Colonel James H Coffman (now 59) worked alongside Steele in detention centres that were set up with millions of dollars of US funding. Coffman reported directly to General David Petraeus, sent to Iraq in June 2004 to organise and train the new Iraqi security forces. Steele, who was in Iraq between 2003 – 2005, and kept returning to the country through 2006, reported directly to Rumsfeld.

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“They worked hand in hand,” said General Muntadher al-Samari, who worked with Steele and Coffman for a year while the commandos were being set up. “I never saw them apart in the 40 or 50 times I saw them inside the detention centres. They knew everything that was going on there … the torture, the most horrible kinds of torture.”

Additional reporting by the Guardian confirmed further details of how the interrogation system worked. “Every single detention centre would have its own interrogation committee,” claimed Samari, who has for the first time talked in detail about the US role in the brutal interrogation units. “Each one was made up of an intelligence officer and eight interrogators. This committee will use all means of torture to make the detainee confess like using electricity or hanging him upside down, pulling out their nails, and beating them on sensitive parts.”

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The Guardian has learned that the Special police commandos unit’s involvement with torture entered the popular consciousness in Iraq when some of their victims were paraded in front of the television audience on a TV programme called “Terrorism In The Hands of Justice.” SPC detention centres bought Canon video cameras, funded by the US military, which they used to film detainees for the television show. When the show began to outrage the Iraqi public, Samari remembers being in the home of General Adnan Thabit – head of the special commandos – when a call came from Petraeus’s office demanding that they stop showing tortured men on television.

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Thabit is dismissive of the idea that the Americans he dealt with were unaware of what the commandos were doing. “Until I left, the Americans knew about everything I did; they knew what was going on in the interrogations and they knew the detainees. And even some of the intelligence about the detainees came to us from them – they are lying.”

Just before Petraeus and Steele left Iraq in September 2005, Jabr al-Solagh was appointed as the new minister of the interior. Under Solagh, who was closely associated with the violent Badr Brigades militia, allegations of torture and brutality against the commandoes soared. It was also widely believed that the unit had evolved into death squads.

There is a 5 minute digest of a 50 minute video attached to this piece.  The 50 minute video is titled James Steele: America’s mystery man in Iraq and autoplays.

Who is this ‘good’ guy, Colonel James Steele?

From El Salvador to Iraq: Washington’s man behind brutal police squads

Mona Mahmood, Maggie O’Kane, Chavala Madlena, Teresa Smith, Ben Ferguson, Patrick Farrelly, Guy Grandjean, Josh Strauss, Roisin Glynn, Irene Baqué, Marcus Morgan, Jake Zervudachi and Joshua Boswell, The Guardian

Wednesday 6 March 2013 11.16 EST

On the 10th anniversary of the Iraq invasion the allegations of American links to the units that eventually accelerated Iraq’s descent into civil war cast the US occupation in a new and even more controversial light. The investigation was sparked over a year ago by millions of classified US military documents dumped onto the internet and their mysterious references to US soldiers ordered to ignore torture. Private Bradley Manning, 25, is facing a 20-year sentence, accused of leaking military secrets.

Steele’s contribution was pivotal. He was the covert US figure behind the intelligence gathering of the new commando units. The aim: to halt a nascent Sunni insurgency in its tracks by extracting information from detainees.

It was a role made for Steele. The veteran had made his name in El Salvador almost 20 years earlier as head of a US group of special forces advisers who were training and funding the Salvadoran military to fight the FNLM guerrilla insurgency. These government units developed a fearsome international reputation for their death squad activities. Steele’s own biography describes his work there as the “training of the best counterinsurgency force” in El Salvador.

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But the arming of one side of the conflict by the US hastened the country’s descent into a civil war in which 75,000 people died and 1 million out of a population of 6 million became refugees.

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It was in El Salvador that Steele first came in to close contact with the man who would eventually command US operations in Iraq: David Petraeus. Then a young major, Petraeus visited El Salvador in 1986 and reportedly even stayed with Steele at his house.

But while Petraeus headed for the top, Steele’s career hit an unexpected buffer when he was embroiled in the Iran-Contra affair. A helicopter pilot, who also had a licence to fly jets, he ran the airport from where the American advisers illegally ran guns to right-wing Contra guerrillas in Nicaragua. While the congressional inquiry that followed put an end to Steele’s military ambitions, it won him the admiration of then congressman Dick Cheney who sat on the committee and admired Steele’s efforts fighting leftists in both Nicaragua and El Salvador.

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In June 2004 Petraeus arrived in Baghdad with the brief to train a new Iraqi police force with an emphasis on counterinsurgency. Steele and serving US colonel James Coffman introduced Petraeus to a small hardened group of police commandos, many of them among the toughest survivors of the old regime, including General Adnan Thabit, sentenced to death for a failed plot against Saddam but saved by the US invasion. Thabit, selected by the Americans to run the Special Police Commandos, developed a close relationship with the new advisers. “They became my friends. My advisers, James Steele and Colonel Coffman, were all from special forces, so I benefited from their experience … but the main person I used to contact was David Petraeus.”

With Steele and Coffman as his point men, Petraeus began pouring money from a multimillion dollar fund into what would become the Special Police Commandos. According to the US Government Accounts Office, they received a share of an $8.2bn (£5.4bn) fund paid for by the US taxpayer. The exact amount they received is classified.

With Petraeus’s almost unlimited access to money and weapons, and Steele’s field expertise in counterinsurgency the stage was set for the commandos to emerge as a terrifying force. One more element would complete the picture. The US had barred members of the violent Shia militias like the Badr Brigade and the Mahdi Army from joining the security forces, but by the summer of 2004 they had lifted the ban.

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The commandos used the most brutal methods to make detainees talk. There is no evidence that Steele or Coffman took part in these torture sessions, but General Muntadher al Samari, a former general in the Iraqi army, who worked after the invasion with the US to rebuild the police force, claims that they knew exactly what was going on and were supplying the commandos with lists of people they wanted brought in. He says he tried to stop the torture, but failed and fled the country.

“We were having lunch. Col Steele, Col Coffman, and the door opened and Captain Jabr was there torturing a prisoner. He [the victim] was hanging upside down and Steele got up and just closed the door, he didn’t say anything – it was just normal for him.”

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General Muntadher fled after two close colleagues were killed after they were summoned to the ministry, their bodies found on a rubbish tip. He got out of Iraq and went to Jordan. In less than a month, he says, Steele contacted him. Steele was anxious to meet and suggested he come to the luxury Sheraton hotel in Amman where Steele was staying. They met in the lobby at 8pm and Steele kept him talking for nearly two hours.

“He was asking me about the prisons. I was surprised by the questions and I reminded him that these were the same prisons where we both used to work. I reminded him of the incident where he had opened the door and Colonel Jabr was torturing one of the prisoners and how he didn’t do anything. Steele said: ‘But I remember that I told the officer off’. So I said to him: ‘No, you didn’t – you didn’t tell the officer off. You didn’t even tell General Adnan Thabit that this officer was committing human rights abuses against these prisoners’. And he was silent. He didn’t comment or answer. I was surprised by this.”

According to General Muntadher: “He wanted to know specifically: did I have any information about him, James Steele? Did I have evidence against him? Photographs, documents: things which proved he committed things in Iraq; things he was worried I might reveal. This was the purpose of his visit.

“I am prepared to go to the international court and stand in front of them and swear that high-ranking officials such as James Steele witnessed crimes against human rights in Iraq. They didn’t stop it happening and they didn’t punish the perpetrators.”

Steele, the man, remains an enigma. He left Iraq in September 2005 and has since pursued energy interests, joining the group of companies of Texas oilman Robert Mosbacher. Until now he has stayed where he likes to be – far from the media spotlight. Were it not for Bradley Manning’s leaking of millions of US military logs to Wikileaks, which lifted the lid on alleged abuses by the US in Iraq, there he may well have remained. Footage and images of him are rare. One video clip just 12 seconds long features in the hour-long TV investigation into his work. It captures Steele, then a 58-year-old veteran in Iraq, hesitating, looking uncomfortable when he spots a passing camera.

Ships to sail directly over the north pole by 2050, scientists say

John Vidal, The Guardian

Monday 4 March 2013 15.00 EST

(B)y 2050, say Laurence C. Smith and Scott R. Stephenson at the University of California in the journal PNAS on Monday, ordinary vessels should be able to travel easily along the northern sea route, and moderately ice-strengthened ships should be able to take the shortest possible route between the Pacific and Atlantic Oceans, passing over the pole itself. The easiest time would be in September, when annual sea ice cover in the Arctic Ocean is at its lowest extent.

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“The prospect of common open water ships, which comprise the vast majority of the global fleet, entering the Arctic Ocean in late summer, and even its remote central basin by moderately ice-strengthened vessels heightens the urgency for a mandatory International Maritime Organisation regulatory framework to ensure adequate environmental protections, vessel safety standards, and search-and-rescue capability,” it adds.

A Stealth Tax Subsidy for Business Faces New Scrutiny

By MARY WILLIAMS WALSH and LOUISE STORY, The New York Times

Published: March 4, 2013

(T)he ability to finance a variety of business projects cheaply with bonds that are exempt from federal taxes – has not only endured, it has grown, in what amounts to a stealth subsidy for private enterprise.

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In all, more than $65 billion of these bonds have been issued by state and local governments on behalf of corporations since 2003, according to an analysis of Bloomberg bond data by The New York Times. During that period, the single biggest beneficiary of such securities was the Chevron Corporation, which issued bonds with a total face value of $2.6 billion, the analysis showed. Last year it reported a profit of $26 billion.

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In 2005, Congress created a similar program to spur rebuilding in areas of Louisiana, Alabama and Mississippi that were ravaged by Hurricane Katrina. The Times’s data shows that much of the bond proceeds went to the oil and gas industry, or to showcase projects like hotels or the Superdome. In 2008, Congress passed the Heartland Disaster Tax Relief Act, a bond program to help 10 Midwestern states hit by flooding and tornadoes. The goal was to help businesses rebuild their destroyed property. But by the time the program was set to expire at the end of last year, the criteria had been expanded to include new businesses.

One of those businesses was Orascom Construction Industries of Egypt, which raised $1.2 billion of tax-exempt bonds to build a fertilizer plant in Iowa. Another was the Fatima Group of Pakistan. In December, a Fatima subsidiary raised $1.3 billion, tax-exempt, to build a fertilizer plant in Mount Vernon, Ind.

But weeks later, Indiana received alarming news: Pentagon officials said that fertilizer from Fatima’s operations in Pakistan had been turning up in Afghanistan, in homemade bombs used against American troops.

Not here obviously.

Afghan Court Convicts 21 in Kabul Bank Scandal

By MATTHEW ROSENBERG and AZAM AHMED, The New York Times

Published: March 5, 2013

In total, 21 defendants were found guilty on Tuesday of crimes for their roles in the failure of the bank, which investigators have described as little more than a Ponzi scheme.

Its main function was to funnel depositors’ money to its own shareholders and their cronies, and its owners masked their theft for years by creating fictitious companies, phony books and even smuggling cash out of the country in the food trays of a commercial airliner they owned.

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According to Afghan and Western investigators, the regulators were actively deceived by the bank’s owners, who kept double books and engaged in other ploys to cover up their deceit. The owners even created fictitious companies, including fake letterheads and rubber stamps to leave a paper trail that would appear legitimate. The Karzai administration also stymied the regulators’ work, the investigators said before Tuesday’s verdicts. They had characterized the prosecutions as an effort to seek retribution.

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Once celebrated by American and Afghan officials as a cornerstone of the Western project to rebuild Afghanistan, Kabul Bank was taken over by regulators in August 2010 after becoming perilously insolvent. At the time, 92 percent of its loan portfolio – $861 million, or about 5 percent of Afghanistan’s annual economic output at the time – had gone to 19 people or companies, according to a forensic audit by Kroll Associates, an international investigative firm.

All were part of a clique that was tied to Mr. Karzai’s government. Bailing out the bank cost the financially struggling Afghan government roughly $825 million, a sum that at that time represented most of the government’s annual revenues. Estimates of how much has been recovered from those who received loans vary from $200 million to $400 million, Afghan and Western officials have said.

Critics say Afghan court was lenient in bank corruption case

By Shashank Bengali, Los Angeles Times

March 5, 2013, 7:19 a.m.

The case was a major test for Afghanistan’s justice system, which had never before tried such a massive fraud case, or one that implicated powerful men with ties to President Hamid Karzai and other top officials – and critics judged the results to be disappointing. They noted that the three-judge panel convicted Farnood and Ferozi on a lesser charge of breach of trust, which carries a lighter sentence and didn’t include an order to confiscate millions from the disgraced executives’ offshore bank accounts.

Prosecutors had sought convictions for money laundering, embezzlement and other more serious crimes, which would have faciliated recovery of the stolen funds and together could have carried a maximum jail sentence of 20 years.

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Executives and top shareholders looted the private Kabul Bank of $935 million – including some squirreled out of the country in food trays of a now-defunct airline – sparking one of the largest bank failures ever. The theft amounted to some 6% of Afghanistan’s gross domestic product, financed shopping sprees and overseas villas for leading shareholders while leaving ordinary account holders broke, and dealt a huge blow to international confidence in the country’s fledgling public institutions.

Untouchability is the social-religious practice of ostracizing a minority group by segregating them from the mainstream by social custom or legal mandate. The excluded group could be one that did not accept the norms of the excluding group and historically included foreigners, house workers, nomadic tribes, law-breakers and criminals and those suffering from a contagious disease such as leprosy. This exclusion was a method of punishing law-breakers and also protected traditional societies against contagion from strangers and the infected. A member of the excluded group is known as an Untouchable.

Fallout from ‘Untouchables’ Documentary: Another Wall Street Whistleblower Gets Reamed

Matt Taibbi, Rolling Stone

POSTED: March 4, 2:31 PM ET

A great many people around the county were rightfully shocked and horrified by the recent excellent and hard-hitting PBS documentary, The Untouchables, which looked at the problem of high-ranking Wall Street crooks going unpunished in the wake of the financial crisis. The PBS piece certainly rattled some cages, particularly in Washington, in a way that few media efforts succeed in doing.

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There are people out there still willing to argue that the government somehow “forced the banks to lend” to unworthy applicants. In reality, it was unscrupulous companies like Countrywide that were cranking out loans en masse, knowing that these loans would be unloaded down the line, first to banks and then to sucker investors like pension funds and foreign trade unions, almost as soon as they were created.

Winston was a witness to all of this. Eventually, he would be asked by the firm to present false information to the Moody’s ratings agency, which was about to give Countrywide a negative rating because of some trouble the company was having in working a smooth succession from one set of company leaders to another.

When Winston refused, he was essentially stripped of his normal responsibilities and had his corporate budget slashed. When Bank of America took over the company, Winston’s job was terminated. He sued, and in one of the few positive outcomes for any white-collar whistleblower anywhere in the post-financial-crisis universe, won a $3.8 million wrongful termination suit against Bank of America last February.

Well, just weeks after the PBS documentary aired, the Court of Appeals in the state of California suddenly took an interest in Winston’s case. Normally, a court of appeals can only overturn a jury verdict in a case like this if there is a legal error. It’s not supposed to relitigate the factual evidence.

Yet this is exactly what happened: The court decided that the evidence that Winston was wrongfully terminated was insufficient, and then from there determined that the “legal error” in the original Winston suit against Bank of America and Countrywide was that the judge in the case failed to throw out the jury’s verdict.

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A number of people in positions of power wanted to know just what “experts” people like Breuer had consulted with before deciding not to press charges in certain cases. Iowa Republican Senator Chuck Grassley and Ohio Democrat Sherrod Brown, specifically, sent Attorney General Eric Holder a letter asking a number of questions.

Among other things, the two Senators wanted to know if certain companies had been designated “Too Big to Jail.”

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Well, at the end of last week, on February 27th, the Department of Justice sent Brown and Grassley a letter in return. The letter is, to describe it very generously, not terribly informative.

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On those questions, the DOJ would say only that “it is entirely appropriate for prosecutors to hear from subject matter experts at relevant regulatory authorities”.

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That is one hell of a slippery piece of language. It’s great that the Department of Justice is not paying, say, HSBC to consult with them on the question of whether or not HSBC should be prosecuted. What a relief! But that doesn’t mean they’re not paying someone else for that kind of advice.

The DOJ similarly blew off naming any individual experts and they refused absolutely to turn over information about any compensation they may have paid out to whomever it is who is whispering in their prosecutorial ears.

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The Department of Justice is now saying that it misunderstood the two Senators, that it didn’t know that they were asking for the actual names of those experts. Moreover, the Department claims it is working on answers to those queries.

In the meantime, Eric Holder is appearing before the Judiciary Committee this Wednesday, and it will be interesting to see how he handles questioning from Senator Grassley. It may get ugly before the answers actually come out, but it seems that someone is finally determined to get some real information.

Scalia: Voting Rights Act Is ‘Perpetuation Of Racial Entitlement’

By Nicole Flatow and Ian Millhiser, Think Progress

Feb 27, 2013 at 11:52 am

The problem here, however, is suggested by the comment I made earlier, that the initial enactment of this legislation in a – in a time when the need for it was so much more abundantly clear was – in the Senate, there – it was double-digits against it. And that was only a 5-year term.

Then, it is reenacted 5 years later, again for a 5-year term. Double-digits against it in the Senate. Then it was reenacted for 7 years. Single digits against it. Then enacted for 25 years, 8 Senate votes against it. And this last enactment, not a single vote in the Senate against it. And the House is pretty much the same. Now, I don’t think that’s attributable to the fact that it is so much clearer now that we need this. I think it is attributable, very likely attributable, to a phenomenon that is called perpetuation of racial entitlement. It’s been written about. Whenever a society adopts racial entitlements, it is very difficult to get out of them through the normal political processes.

I don’t think there is anything to be gained by any Senator to vote against continuation of this act. And I am fairly confident it will be reenacted in perpetuity unless – unless a court can say it does not comport with the Constitution. You have to show, when you are treating different States differently, that there’s a good reason for it.

That’s the – that’s the concern that those of us who – who have some questions about this statute have. It’s – it’s a concern that this is not the kind of a question you can leave to Congress. There are certain districts in the House that are black districts by law just about now. And even the Virginia Senators, they have no interest in voting against this. The State government is not their government, and they are going to lose – they are going to lose votes if they do not reenact the Voting Rights Act.

Even the name of it is wonderful: The Voting Rights Act. Who is going to vote against that in the future?

Massachusetts official challenges Chief Justice Roberts’ claim about voting

By Akilah Johnson, Boston Globe Staff

February 28, 2013

“Do you know which state has the worst ratio of white voter turnout to African-American voter turnout?” Roberts asked Donald Verrilli Jr., solicitor general for the Department of Justice, during Wednesday’s arguments.

“I do not know that,” Verrilli answered.

“Massachusetts,” Roberts responded, adding that even Mississippi has a narrower gap.

Roberts later asked if Verrilli knew which state has the greatest disparity in registration. Again, Roberts said it was Massachusetts.

The problem is, Roberts is woefully wrong on those points, according to Massachusetts Secretary of State William F. Galvin, who on Thursday branded Roberts’s assertion a slur and made a declaration of his own. “I’m calling him out,” Galvin said.

Galvin was not alone in his view. Academics and Massachusetts politicians said that Roberts appeared to be misguided. A Supreme Court spokeswoman declined to offer supporting evidence of ­Roberts’s view, referring a ­reporter to the court transcript.