Truthout Stories Fri, 21 Nov 2014 11:52:09 -0500 en-gb Elizabeth Warren: "Enough Is Enough" With Obama's Wall Street Appointees

Lately Sen. Elizabeth Warren has been talking about President Obama’s economic appointees – and it sounds like she’s pretty fed up.

Consider these words, from a Huffington Post essay she published earlier this week:

“I believe President Obama deserves deference in picking his team, and I’ve generally tried to give him that. But enough is enough.”

Warren (D-Mass.) was writing about Antonio Weiss, a banker with Lazard who has spent most of his career working in overseas finance – and was based in France for nearly a decade. That might not be much of a problem, if not for the fact that Weiss has been nominated for the post of Under Secretary for Domestic Finance at the Treasury Department.

Weiss, who is currently Lazard’s chief of global investment banking, was deeply involved with “corporate inversions” – a bland name for what happens when an American corporation moves overseas to avoid paying its taxes. One of the inversions Weiss worked on was the Burger King merger with Canadian corporation Tim Hortons (a move which resulted in some very angry – but sometimes entertaining – social media commentary.)

The White House has begun blocking some inversions, and has publicly denounced the practice. But its position is undercut when it appoints someone like Weiss to such a critical economic post.

Americans don’t like corporations who evade their taxes, according to the polls. They would presumably be unhappy to learn that their president has appointed someone like Antonio Weiss to a position of public trust – especially when the position holds lead responsibility for consumer protection, Dodd-Frank implementation, and what Warren describes as “a wide range of banking and economic and policymaking issues.”

Warren also pointed out that Lazard itself, where Weiss is a senior executive, exploited “a particularly slimy tax loophole” (to use Warren’s words) when it moved its official headquarters to Bermuda in 2005.

Is that who we want in this critical position? Warren doesn’t think so. And, in what amounted to a rare moment of constructive bipartisanship, neither does Sen. Charles Grassley (R-Iowa), who described the appointment as hypocritical. Sen. Richard Durbin (D-Ill.) has also expressed opposition.

Warren’s piece, which is well worth reading in full, also addresses what she describes as “the larger, more general issue of Wall Street executives dominating the Obama administration, as well as the Democratic Party’s overall economic policymaking apparatus.”

Thank God somebody’s finally saying it, in a voice loud enough to be heard.

Warren also had some stern words this week for Mel Watt, President Obama’s appointee to head the little-known but surprisingly powerful Federal Housing Finance Agency (or FHFA). As reported in The Washington Post, Warren interrupted recent Senate testimony from Mr. Watt several times in order to press him for an explanation of the FHFA’s inaction on behalf of struggling homeowners:

“You’ve done a whole list of really tough technical things, and I applaud you for doing that,” Warren said. “But people have lost their homes in the past year, and every day that you delay, more families lose their homes. There are 5.4 million families out there underwater, so I want to know, when are you going to have an answer on this?”

Watt’s response: “It won’t be as long as it has been — let me put it that way.”

That’s not good enough. It’s not even close.

Many, if not most, underwater homeowners have been directly or indirectly victimized by bank predation. But the administration’s senior economic officials have shown a disturbing tendency to treat them as if they were morally tainted and unworthy of support. At the same time, the administration has seeded top posts with executives from wrongdoing banks and has given Wall Street bankers a pass for widespread criminal fraud.

The president and his party have better rhetoric than their opponents on the subjects of bank fraud, consumer protection and a growth-oriented economy. At times they’ve passed good laws, too. But their appointments have often stood in marked contrast to their rhetoric. As Warren pointed out in an earlier editorial, both the Clinton and Obama administrations have been dominated by a “Citigroup clique” of bankers whose institution wouldn’t even exist in its present form had it not been for the assistance of President Bill Clinton economic team (some of whom later enriched themselves working at that institution).

As Warren wrote, “there is danger anytime the key economic positions in our government fall under the control of a single tight-knit group. Old ideas can stay around long after they’re useful, and new ideas don’t get a fair hearing.”

That’s a good principle, and it’s one that seems especially true of this set of individuals.

Perhaps the White House thought it was branching out by choosing an appointee from a new big bank, rather than continuing to draw solely on Citigroup. But that’s not the point. Antonio Weiss reflects a set of practices and values that diverges substantially from the values and policies our economy needs.

Mel Watt didn’t come from the banking industry at all, but was a member of Congress. A couple of years ago we were told that a Bush holdover was standing in the way of mortgage principal reductions, a form of relief that homeowners need and deserve – but President Obama’s appointee has the job now, and so far nothing’s changed.

Presidential appointees are thoroughly screened and vetted. They reflect the policies, priorities and preferences of the president who makes them – and, typically, of the party he represents. Once in office, appointees like these have reinforced the insular and self-interested perspectives that created our economic problems in the first place. It is a vicious cycle.

If we are going to have a better economy, those policies and priorities – as well as the kinds of appointees who determine them – must change. It is the president’s responsibility to lead that process of change, by laying out new goals and ending the epidemic of Wall Street executives that has blighted our economic policymaking machine. (Warren, to her everlasting credit, has characterized it more boldly as an “infestation.”)

It’s not surprising that Elizabeth Warren is fed up. The surprise is that more people aren’t. As the senator said: Enough is enough.

News Fri, 21 Nov 2014 10:14:12 -0500
Edelman TransCanada Leak: Aggressive PR for Keystone Alternative

Leaked documents expose a plan by Edelman for TransCanada to launch an "aggressive" American-style policy/politics PR campaign to persuade Canadians to support a Canada-based alternative to the stalled Keystone XL pipeline to get controversial tar sands oil to refineries in eastern Canada for export.

But, according to the documents, this Canada-centric campaign would actually be run out of an office in Washington, DC. And the digital campaign is being led by a rightwing American political operative employed by the world's largest public relations firm.

The documents were obtained by Greenpeace.

Ian Austen of The New York Times published some excerpts from the planning documents on November 17 that show how a new PR operation is in the works to persuade skeptical Canadians the "Energy East Pipeline" from Alberta to Quebec and to New Brunswick is a good idea.

The proposed pipeline conversion from gas to oil and the expansion of the line would allow TransCanada's corporate partners to sell more tar sands oil to foreign countries than it can under TransCanada's current shipping methods, with the completion of its proposed southern route through the U.S. to the Gulf of Mexico on hold.

TransCanada Admits It Dug for Dirt on Those Concerned about Pipeline Expansion

Austen's story not only revealed details of the war plan Edelman put together to try to distract opponents of TransCanada and waste their resources, it also secured confirmation that Canada's big energy company had conducted "opposition research" digging for dirt on those who dare to oppose its business plans.

According to the documents: the PR campaign includes a "pressure" campaign against actvists, which included "Detailed Background Research on Key Opposition Groups," beginning with the Council of Canadians, but would likely extended to Equiterre, the David Suzuki Foundation, Avaaz, and Ecology Ottawa."

One of the activists the Times interviewed objected to such corporate tactics as "all wrong" if deployed against grandmothers like her: "To me it's a sign of desperation," Maude Barlow, who leads the Council of Canadians/Le Conseil des Canadiens, told Austen.

The Edelman documents for TransCanada note that to achieve their goal of adding "layers of difficulty for opponents, we will work with third parties and arm them with the information they need to pressure opponents and distract them from their mission . . . . Third-party voices must be identified, recruited and heard to build an echo chamber of aligned voices."

One of the identified tactics of this "third party technique," pioneered by corrupt U.S. tobacco companies, was Edelman's recommendation that professors be identified and used as trusted speakers to advance the corporation's point of view (while not disclosing that the academics had been recruited to do so or "armed" with corporate talking points). Edelman previously represented big tobacco companies for which it deployed the third party technique repeatedly.

TransCanada Digital PR Effort Spearheaded by Michael Krempasky, a Koch-Connected Operative

The Council/Conseil noted that the TransCanada-Edelman digital PR operation is being led by a rightwing U.S. activist named Michael Krempasky.

On election day just a few weeks ago, Krempasky tweeted a photo of his Koch Industries coffee mug with an "I voted" sticker and the message: "6:11am; Falls Church, VA; I voted; And Harry Reid can suck it." And just last year, Krempasky posted a photo of his personalized copy of the strategic plans of David Koch's Americans for Prosperity (a binder detailing for Krempasky and select insiders AFP's "strategy initiatives, past performance, budget allocations, target markets").

A few years back, Jack O'Dwyer's PR Daily noted that Edelman hired the blogger and co-founder "for his ability to connect with conservative audiences." At RedState, Krempasky helped promote the growth of the "Tea Party," an activist movement in the U.S. whose infrastructure is actually fueled in part through major expenditures by two rightwing operations spawned by David Koch's "Citizens for a Sound Economy," the predecessor of AFP and "FreedomWorks."

Before Krempasky's hire was officially announced a few years ago, Michael Barbero of the New York Times reported that Krempasky was working with Marshall Manson at Edelman blogging Walmart's corporate talking points in support of Edelman's client, the largest retailer on the planet. Edelman's war room operation for Walmart came under fire at the time for how it was using bloggers and deploying an astroturf operation christened "Working Families for Walmart," back in 2006.

But Krempasky is notorious for more than what was dubbed "flogging" for Walmart.

His role in the coordinated rightwing effort to push CBS Evening News Anchor Dan Rather off the air apparently did not dissuade the Edelman firm from hiring him. The website "" was run by Krempasky, who was then working as the political director of the rightwing political direct mail operation, American Target Advertising, which is chaired by powerful rightwing fundraiser Richard Viguerie.

Dan Rather--whom some rightwingers claimed was "intensely liberal"--and his producers were provided with faked documents critical of George W. Bush's service in the National Guard records a few months before the 2004 presidential election against Vietnam veteran John Kerry. After Rather ran the story without sufficient authentication, Krempansky and numerous other rightwing bloggers moved quickly to oust the broadcaster from his long-standing role editing the news for CBS. Both Republican and Democratic party leaders denied being the source of the materials that were critical of Bush but that effectively took claims that Bush dodged his military duties off the table after the documents were discredited.

Krempasky is also an alum of the "Leadeship Institute," which has long been funded in part by the Koch family fortune of oil conglomerate Koch Industries, which is led by billionaire brothers, Charles and David Koch. (The Leadership Institute has served as the training ground for thousands of rightwing activists, including the infamous ex-con James O'Keefe, whom it distanced itself from after one of his early PR stunts.)

On Twitter, Krempasky describes himself as a "flacktivist," a play on the words activist and "flack," slang for publicist.

Krempasky's team for TransCanada includes former GOP spokesperson Nate Bailey, who has aided Edelman in corporate campaigns for corporate clients known for trying to delay efforts to address climate change. It also includes Brian McNeill, who directed opposition research during John McCain's presidential bid in 2008 and who was also outed subsequently for being paid by Edelman to anonymously blog about groups that were described by him as paid critics of Walmart.

Edelman-TransCanada PR Plan Includes Some Interesting Polling and PR Spin

The leaked material includes some recent polling that may be illuminating both for the underlying findings and by the Edelman approach to the polling:

  • Only 16% of Canadians surveyed had a favorable view of tar sands compared with 36% for methane gas (the potent greenhouse gas branded as "natural gas"). In the documents, Edelman asks "Can we change or mitigate the perception that oil sands is worse than natural gas?" That question was posed by Edelman without regard to the scientific reality underlying perceptions about the dangers of both.
  • "More than a third of Quebeckers believe in the higher toxicity and corrosiveness of oil extracted from the oil sands."
  • "There has been an increase in the number of people who are worried that a pipeline could become the target for sabotage. In the documents, Edelman notes "We should be careful where we stand in the pipeline vs. rail debate in terms of risk."

It is not clear how much TransCanada or Edelman's other clients may be relying on trains for transporting oil or other petroleum products from the tar sands, but public awareness of the dangers of rail transport has increased after the Lac-Megantic derailment and explosion killed 47 Canadians. That disaster displaced hundreds of people in Quebec, where half the town was destroyed and severely contaminated with toxic Benzene. TransCanada was not involved in that disaster, although it has had numerous spills over the years, none as devastating.

Obama Acknowledges Keystone Is Mainly for Canadian Exports as Lame Duck Senate Preps for Vote

Just this past week, President Obama critiqued some of the U.S. PR about what the Keystone XL is and what it is not, saying: "It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else." (CMD, the publisher of PRWatch, has debunked claims of Keystone proponents in the US with their inflated jobs and "national security" claims.)

The Energy East Pipeline proposal, as a substitute for Keystone XL for access to export infrastructure, would put the risk of a major pipeline leak on Canada rather than on the U.S. and its Ogallala aquifer that supplies fresh water for millions of Americans and American farms. According to Edelman's PR plan, Canada's federal and provincial governments would yield projected tax revenues, unlike in the U.S. which could not tax the production of the oil on Canadian soil, which does not tax the import of oil, and which has refineries for export located in free trade zones.

However, any pipeline expansion to allow increased burning of Alberta tar sands oil would increase the risks and increase the speed of climate and oceanic changes that are underway, with devastating consequences, according to leading scientists. As James Hansen wrote in an op-ed in the New York Times in 2012, "If Canada proceeds . . . it will be game over for the planet." Environmental groups estimate that getting more tar sands oil exported and burned would greatly aggravate the climate, adding 30 million tons per year of carbon and greenhouse gases into the atmosphere and also threatening water and air as well as habitat for wildlife.

Despite such concerns, the U.S. Senate is poised to allow a vote in favor of the Keystone pipeline in a risky move to try to boost Senator Mary Landrieu's chances in an upcoming run-off election in Louisiana, even though her seat would not change the incoming majority in the upper house of Congress and risks alienating environmental voters within the Democratic party.

Independent economic analysis has shown that approving Keystone would directly create only a few thousand temporary and primarily non-local jobs plus exceedingly few permanent jobs anywhere in the U.S.

Some of the proponents of expanding exports of tar sands oil are climate change deniers, who support a host of measures that enrich the oil industry.

According to a report by Lee Fang for The Investigative Fund, Edelman was paid more than $50 million to run the PR campaign of the American Petroleum Institute (API), to push politicians to approve the Keystone XL pipeline, support tax deduction for the oil industry companies that fund API, and press for expanded drilling in America's national parks. As Greenpeace documented, API's PR campaign included the astroturf group called "Energy Citizens," which includes corporate employees at corporate-bankrolled rallies to support corporate-friendly policies of their energy industries employer. TransCanada has funded ALEC, whose legislative agenda echoes the API agenda. (CMD launched in 2011.)

However, the current leader of TransCanada's PR firm, Dan Edelman, has taken to the blogosphere in recent months to claim that his firm would no longer work on climate denial campaigns and would no longer deploy astroturf. Whether those public positions altered the implementation of the firm's TransCanada plan remains to be seen.

Some Are Getting Richer while TransCanada Tries to Shape the Public Opinion of Its Pipeline Plans

Even with the difficulties getting tar sands to coastal ports in the U.S. or Canada, TransCanada's pipeline business has proven lucrative for some. TransCanada's CEO, the 51-year old Russ Girling, received $8.4 million in direct compensation last year, a whopping 19% raise over the prior year (see uploaded screenshot below). In all, Girling has received corporate stock currently valued at $8.9 million and he has a defined benefit pension plan valued at $10.9 million, according to a 2014 circular for shareholders. His fellow TransCanada execs also have multimillion dollar compensation and pension plans.

It is unknown how much money Edelman or its principle staff have been paid or are poised to make from its efforts to promote TransCanada's eastward pipeline dreams to Canadians by deploying its DC PR team on a DC-style PR campaign to win over Canadians about what's best for Canada.

News Fri, 21 Nov 2014 09:48:34 -0500
Secret Tapes Hint at Turmoil in New York Fed Team Monitoring JPMorgan

As the Federal Reserve Bank of New York moved to beef up its oversight of Wall Street two years ago, the team charged with supervising the nation's largest bank, JPMorgan Chase, was in turmoil.

New York Fed examiners embedded at JPMorgan complained about being blocked from doing their jobs. In frustration, some requested transfers. Top New York Fed managers knew about the problems, according to interviews and secret recordings of internal meetings obtained by ProPublica. Similar frustrations had surfaced among examiners at other banks as well.

"You're not the only one experiencing difficulties at an institution," one New York Fed manager told Carmen Segarra, an examiner stationed at Goldman Sachs who made the surreptitious recordings. "You've heard about all the issues at JPMorgan."

Listen to more excerpts of the Carmen Segarra tapes »

In meetings in early 2012, the manager, Johnathan Kim, described how bosses in the JPMorgan team had stymied examiners by blocking access to bank information and constraining independent inquiries in ways that "grinds everything to a halt."

The revelations of internal strife add new details to the summary of an investigation by the Federal Reserve Board's inspector general into the New York Fed's supervision of JPMorgan before the "London Whale" trading scandal. The disastrous series of trades, which became public in April 2012, cost JPMorgan $7 billion in losses, settlements and fines and forced it to admit to securities law violations.

In the summary of its two-year investigation, which was released last month, the IG stopped short of saying the New York Fed could have detected the trading risk before it blew up. Still, it chastised the bank, saying it had identified risky activities in JPMorgan's investment office years earlier but didn't follow up or tell the bank's primary regulator, the Office of the Comptroller of the Currency (OCC), as procedures demanded.

The IG's office has withheld its full investigation report, saying it contained information that was "confidential" and "privileged." A spokesman declined to provide even a page count.

The New York Fed declined to respond to detailed questions. JPMorgan also declined to comment.

The IG's summary offered only a glimpse into the job performance of what is arguably the most important U.S. financial regulator. The New York Fed's primary responsibility is to protect the safety and soundness of the financial system. After the 2008 financial crisis, Congress gave the Federal Reserve System the task of supervising the biggest and most complex financial institutions whose failure could disrupt the economy. Because of its location, the New York Fed has direct responsibility for many of Wall Street's biggest players. Yet its supervisory culture has been slow to adapt, as ProPublica and This American Life recently reported.

To comply with its new Congressional mandate, the New York Fed went on a hiring spree in 2011, in part to bring in more specialized examiners to station inside JPMorgan, Goldman Sachs, Citigroup and other systemically important financial institutions. These examiners, called "risk specialists," were chosen because of their expertise in areas such as compliance, credit risk and operations. Their task was to continuously monitor their institutions to see how they fared in these key areas. The specialists reported to two bosses – managers for their specialty and the head New York Fed officer at the bank.  

By early January 2012, it was clear that this dual reporting system had become a problem at several institutions and that on some teams the new experts were encountering resistance from their non-specialist colleagues and supervisors. In a meeting of legal and compliance specialists caught on Segarra's recordings, examiners complained about management not valuing their expertise and struggles over who had final say over examinations.  

In some cases, the senior New York Fed person on site at the bank would not allow the new examiners to act on their knowledge and work independently. The JPMorgan team was widely recognized as dysfunctional in this regard, according to discussions on Segarra's tapes and interviews with two former Fed employees, who continue to work in finance and asked for anonymity to discuss confidential information.

Segarra had joined the New York Fed as a legal and compliance examiner in November 2011. She was fired seven months later after a dispute with her bosses in which she refused to rescind a detrimental finding about Goldman Sachs. The New York Fed says Segarra's firing was unrelated to her supervision of Goldman; her lawsuit contesting the firing was dismissed without a ruling on the merits and is on appeal. 

In January 2012, to build her own record of events, Segarra began secretly recording meetings with colleagues. She was among roughly 230 New York Fed supervisors assigned to the largest financial institutions. The risk specialists were a small subset of that group in a given area were called a "risk stripe." The members of each stripe from the different systemically important banks met weekly to discuss the issues they were facing on their respective teams. Tensions within the JPMorgan team were common knowledge, according to a former examiner. 

On the recordings, Kim put the responsibility for the tensions at the JPMorgan team on Dianne Dobbeck, then the senior New York Fed supervisor at the bank. The issue came up when Kim tried to assuage Segarra about pressures she was experiencing at Goldman. In some respects, he said, the situation was worse at JPMorgan.

"You look at JPMC, that is an iron hand woman," Kim said, referring to Dobbeck. "They have already made their determination. They don't care what risk do[es]."

Kim added that the legal and compliance specialist embedded at JPMorgan wasn't allowed "access to anything — nada." Dobbeck expected the risk specialists to follow orders, not think for themselves, Kim indicated.

"You do what we tell you," he said, portraying Dobbeck.

"Hold on. How am I being a risk expert here?" he continued, mimicking the perspective of a risk specialist. "How am I being independent?"

In another meeting, Kim said examinations at JPMorgan had been stymied because the Fed leadership inside the bank wouldn't allow any investigation until they had a complete understanding of all the issues. "They want all the information, and therefore just [Kim makes a crunching sound] grinds everything to a halt until they come to understand it."

Kim declined to respond to questions.

The former examiner, who was not on the JPMorgan team but maintained good contacts with those working under Dobbeck, echoed Kim's characterizations. The continuous monitoring that was supposed to take place bogged down when all meetings and document requests had to be cleared by Dobbeck, the examiner remembers his colleagues telling him. "The examination scope was limited even though the point of risk specialists was there was supposed to be no limit to their scope," he said.

Jamie Dimon, the chairman, president and CEO at JPMorgan, conceded in congressional testimony about the London Whale in 2012 that the bank's risk processes "were not as formal or robust as they should have been."

An exhaustive U.S. Senate subcommittee report last year was more blunt: "[T]he whale trades exposed a bank culture in which risk limit breaches were routinely disregarded, risk metrics were frequently criticized or downplayed, and risk evaluation models were targeted by bank personnel seeking to produce artificially lower capital requirements."

In early January 2012, Sarah Dahlgren, the head of supervision at the New York Fed, attended a meeting of legal and compliance risk specialists that Segarra recorded. Dahlgren listened to complaints about the resistance the examiners were encountering. "Other views on this dual reporting?" she asked the risk specialists. "This is obviously an issue that has come up, and I've heard, on the GE [Capital] team last week, too, and the JPM [JPMorgan] team, this issue is one that is alive."

Dahlgren declined to respond to questions.

The former examiner said that by mid-2012, there was an effort by a number of risk specialists on the JPMorgan team to transfer to other institutions. By the end of the year several left the team to join Fed supervisors at other banks. "A lot of people wanted to leave because they felt their information was getting stonewalled or it was not getting traction," the former examiner said.

Dobbeck did not respond to a detailed request for comment. She is a New York Fed veteran who started as a financial analyst in the policy department in 1997. By September 2005, she had moved to the supervision side of the bank and become the New York Fed's "Central Point of Contact" for Citigroup. Dobbeck held the job until May 2007, a crucial period for Citigroup in the lead-up to the financial crisis.

At the outset of 2005, the Federal Reserve had downgraded Citigroup because of " demonstrated weakness in the company's ability to comply with all rules and regulations." By February 2006, the New York Fed determined that Citigroup had made improvements. The Federal Reserve raised Citigroup's rating. At that point, however, the bank's production of structured mortgage bonds called collateralized debt obligations went into overdrive. The bank increasingly relied on off-balance sheet entities in which to stash these mortgage assets. When their value plummeted, they flooded back onto the bank's balance sheets to catastrophic effect.

After the 2008 meltdown, Congress created the Financial Crisis Inquiry Commission to investigate the causes. The commission focused much of its Wall Street investigation on Citigroup, which got the biggest government bank bailout from the financial crisis, $476 billion in cash and guarantees.

Commission investigators conducted several interviews with Dobbeck, who acknowledged to them that she and her colleagues had missed what was happening at Citigroup. They had looked at mortgages the bank was originating and managing, but not "the potential exposure they had through their structured activity," she told FCIC investigators.

Dobbeck also described the poor working relationship the New York Fed team had with the OCC, the other big federal supervisor onsite at Citigroup. She characterized relations between the two regulator teams as "assertive and tense." The OCC regulators, she said, "would prefer for us not to attend meetings or have discussions with them."

One of the top OCC supervisors at Citigroup at the time was Scott Waterhouse. Years later, in 2012, when Dobbeck ran the New York Fed team at JPMorgan, her OCC counterpart at the bank was again Waterhouse. He did not respond to emailed questions.

Last year's examination of the London Whale trades by the Senate Permanent Subcommittee on Investigations criticized the OCC's efforts but did not look into the New York Fed. But if the primary regulator, in this case the OCC, fails "to notice and follow up on red flags," as the Senate investigation concluded, the Fed is supposed to step in, according to a 2009 review by the Federal Reserve Board.

Bart Dzivi investigated the New York Fed's activities as special counsel for the Financial Crisis Inquiry Commission and conducted the panel's interviews with Dobbeck in 2010. Dzivi told ProPublica that Dobbeck was "smart, pleasant and exactly the wrong type of person to be in charge of any safety and soundness position" because he believed she lacked the resolve to stand up to the banks. 

After leading the Citigroup team, Dobbeck was promoted to head of the credit risk department for the New York Fed's Bank Supervision group in June 2007. Two years later she was made a senior vice president. By 2011, Dobbeck was the top New York Fed supervisor at JPMorgan. She left the JPMorgan team in late 2013 for another promotion, this time to be the head of all supervisory policy for the New York Fed.

The Fed inspector general's summary of the London Whale investigation does not name Dobbeck or anyone else, and some of the problems the IG chose to highlight predate her time leading the JPMorgan team. The summary report catalogs several missed warning signs, including reviews in 2008 and 2010 of JPMorgan's Chief Investment Office that were planned but never took place.

In confidential reports before and immediately after the financial crisis, the Federal Reserve Board in Washington, D.C., repeatedly faulted the New York Fed for doing a poor job of supervision. These reports, made public by the financial crisis commission, cite persistent problems and offer recommendations including "leveraging the knowledge and expertise of specialized examiners."

The commission's release of that information in 2011 marks the last detailed public look at the New York Fed's supervision by a government entity.

By comparison, the Senate Permanent Subcommittee on Investigations released more than 1,200 pages of documents, including emails and internal reports from the OCC and JPMorgan, in its London Whale investigation. It held hours of public hearings with key players, including the Comptroller of the Currency Thomas Curry, who pledged to reform his agency and then acted to do so.

To date, the only public review of the New York Fed's handling of the London Whale is the inspector general's summary report. It is four pages long.

News Fri, 21 Nov 2014 09:30:54 -0500
Latin America Moves Towards Decarbonizing the Economy

The Brazilian Amazon basin in the Rondonia State, April 27, 2012. Environmental groups say the construction of the Jirau and Santo Antônio Dams in Rondônia State displaces indigenous peoples and causes flooding, potentially releasing large quantities of methane gas. (Noah Friedman-Rudovsky/The New York Times).The Brazilian Amazon basin in the Rondonia State, April 27, 2012. Environmental groups say the construction of the Jirau and Santo Antônio Dams in Rondônia State displaces indigenous peoples and causes flooding, potentially releasing large quantities of methane gas. (Noah Friedman-Rudovsky/The New York Times).

Rio de Janeiro - When the advances made towards curbing global warming are analysed in the first 12 days of December in Lima, during the 20th climate conference, Latin America will present some achievements, as well as the many challenges it faces in “decarbonising development”.

Experts consulted by IPS said that during the 20th session of the Conference of the Parties (COP20) to the United Nations Framework Convention on Climate Change (UNFCCC) the region will be able to point to progress in reducing deforestation in the Amazon jungle, especially in the Brazilian portion where forest loss was reduced 80 percent in the last decade, according to official sources.

But they say Latin America’s focus should be the “decarbonisation” of the economy, limiting the share of fossil fuels and other sources of carbon dioxide (CO2) in the energy mix, in order to mitigate the impact of climate change, as demanded by the Intergovernmental Panel on Climate Change (IPCC) in its fifth report, launched Nov. 2.

“We can break with the idea that it is always difficult to reach a consensus in Latin America,” the head of Friends of the Earth Brazil, Roberto Smeraldi, told IPS. “There is a diversity of new experiences; the region is a laboratory of learning with respect to climate change.”

In his view, new alliances must be created by means of bilateral and regional accords, aimed at strengthening the position of Latin American countries in the negotiations among the parties, both in Lima and along the road that is to lead to a new climate treaty a year later in Paris.

But he complained that Brazil is not harnessing its comparative advantages in terms of natural resources and great potential for decarbonising its economy and investments, in order to take on a leadership role in the climate negotiations.

“Brazil should be interested in assuming a more aggressive role and pushing for progress [in the talks]. I’m convinced that it can develop a low-carbon economy, even if it becomes a major oil exporter,” he argued.

The IPCC advocates a low-carbon economy. Financial flows must be modified to substantially reduce CO2 emissions, the panel says. It is calling, for example, for a 30 billion dollar a year reduction in investment in fossil fuels for electricity worldwide.

The director of the Climate Reality Project’s Climate Leadership Corps, Mario Molina, said Latin America could feasibly make progress towards decarbonising the economy.

The international organisation, headed by former U.S. vice president Al Gore, held a leadership training on response to climate change Nov. 4-6 in this Brazilian city.

Molina told IPS that the idea that the region’s wealth and development depend on the extraction of natural resources, especially fossil fuels, is a myth.

“I have a lot of faith in Latin America,” he said. “We have talked about the need to make reparations for past emissions and the responsibilities of the most developed countries. The truth is that it is the responsibility of all of us. We have to look towards the future and identify ourselves as leaders in sustainability.”

The creation of mechanisms that ensure the transfer of technology and funds for investment in sustainable projects and renewable energies is an alternative for the region, Molina said.

“When it comes to tackling climate change, Latin Americans don’t have to cling to a narrative based in the past,” he said.

Chile, according to the experts, assumed a vanguard position when it announced the first tax on carbon in South America, in September, aimed at forcing power companies to gradually move to cleaner sources, with the target of reducing greenhouse gas emissions 20 percent by 2020, from 2007 levels.

But Smeraldi and Molina said there is still a great deal of pressure from infrastructure projects and companies exploiting natural resources which invade the limits of protected natural areas.

“Chile demonstrated great leadership by setting a price on carbon emissions and we need something similar in the region, on a large scale. At the other end of the spectrum we have Venezuela [with an oil-based economy] and also the case of Ecuador,” Molina said.

“We have to understand that Latin America’s natural resources are on top of the ground: our people, solar power, and wind energy.”

Molina and the other experts interviewed by IPS said one alarming case is that of Ecuador and its plans for large-scale oil drilling in the Amazon region, including the reserves in the Yasuní National Park, an area of nearly 10,000 sq km.

The president of Ecuador, Rafael Correa, argues that the income brought in from that oil is necessary for poverty reduction and development in the country.

Because of a development model focusing on carbon-based growth, four million hectares in forest cover were lost in South America between 2000 and 2014, according to the United Nations Food and Agriculture Organisation (FAO) report “The Global Forest Resources Assessment 2010”.

Brazil alone lost an average of 2.6 million hectares of green areas per year during that period, despite the decline in deforestation in the Amazon.

The FAO report underscores the essential role played by forests in climate change mitigation. Trees store 289 gigatons of carbon a year around the world, and the Amazon region captures 100 gigatons.

The Climate Reality Project’s Molina acknowledged that despite the efforts made, deforestation remains high in tropical forests, because the regulation of the sustainable use of soil and governance of natural areas are generally pending issues in Latin America, as part of emissions reduction policies.

“The importance of the Amazon rainforest and other tropical jungles is globally recognised, and there is support to preserve them. But we have a lot of work to do,” Molina said.

The executive secretary of the Climate Observatory in Brazil, Carlos Rittl, pointed out that “there is no regional commitment with regard to forests or to eliminating deforestation, because the countries of the developing South have no mandatory targets for emissions reduction under the UNFCCC.”

But some countries, he noted, have assumed national commitments, like Paraguay, with its zero deforestation plan, or Peru, which created a forestry fund to finance sustainability projects.

Especially significant is the case of Costa Rica, the first country in the world to set a carbon neutrality target: the goal is for the country to fix as much CO2 as it emits by 2021.

And on Sept. 23, Chile, Colombia, Guyana and Peru signed the New York Declaration on Forests during a U.N. summit on climate change held in New York, which pledged to halt the loss of the world’s natural forests by 2030.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

News Fri, 21 Nov 2014 10:09:57 -0500
Fossil Free Canada Convergence Deepens an International Movement

The first ever Fossil Free Convergence brought together 80 youth organizers from across Canada. (Facebook / Fossil Free Canada)The first ever Fossil Free Convergence brought together 80 youth organizers from across Canada. (Facebook / Fossil Free Canada)

As a junior in college, I helped to organize a conference at my alma mater, Swarthmore. A number of us had traveled to Appalachia two years prior on a school-funded trip to visit with communities resisting mountaintop removal coal mining there. Upon returning, we decided to start what would become the country’s first fossil fuel divestment campaign.

Sitting around a friend’s living room one muggy September night before classes started for the semester, our group — Swarthmore Mountain Justice — was vaguely aware that divestment was catching on: with the help of partner organizations like the Responsible Endowments Coalition and the Energy Action Coalition, roughly a dozen campaigns had taken off in the last year. Around 10 p.m., we settled on hosting a gathering for students from seven or eight campuses, ordering some food and talking through how we could support each other in this work that was starting to form the rough outlines of a movement.

Then it became one. In November of 2012, launched the Do the Math Tour, and virtually overnight fossil fuel divestment exploded onto 100 campuses nationwide. By February, our little summit became a convergence of over 200 students, staff supporters and frontline organizers from across the country. For the first time, student divestment organizers got to see each other in the flesh, learning organizing skills and from the generations-strong fight again extraction on its frontlines.

I got to see that happen all over again a few days ago.

Last weekend, the Canadian Youth Climate Coalition hosted the first-ever Fossil Free Canada Convergence. Held at Concordia and Magill Universities in Montreal, the convergence brought together 80 youth organizers from around the country. Divestment has been up and running on campuses across Canada for well over a year; campaigns at the University of Toronto and the University of British Columbia, in Vancouver, have already passed successful referenda for divestment through their student governments.

Kristen Perry — a fourth year student at McGill, who helped to organize the convening with Divest McGill — remarked on what it was like to have the country’s divestment activists together for the first time: “A lot of the time we get wrapped up into our individual campaigns and we need to remember that this is a bigger movement, within divestment and also within the climate movement.”

Like Quebec itself, the conference was bilingual in French and English. English programming focused generally on fossil fuel divestment, while French workshops and speakers dealt with the province’s growing anti-extraction movement against tar sands oil and pipelines, like the Energy East pipeline slated to stretch from Alberta and through Winnipeg and Montreal before its endpoint in Saint John, New Brunswick.

The convergence started Friday night, with keynotes from veteran organizers Alyssa Symons-Bélanger, Heather Milton-Lightening and Denise Jourdain, an elder of the Innu community of Uashat mak Mani-utenam working for indigenous sovereignty and to oppose the Canadian government’s controversial Plan Nord. Another speaker, Crystal Lameman of the Beaver Lake Cree Nation, has been a leading voice in the fight against tar sands development on First Nations land in Alberta with the Indigenous Environmental Network and the Sierra Club. She connected fossil fuel divestment with her own work fighting tar sands, noting that “Universities are beginning to understand that we have inherent treaty rights.” Lameman also gave a keynote address at last year’s Power Up! Convergence in Swarthmore.

Saturday kicked off with a panel called “Divestment as a solidarity tactic,” featuring Lameman, Milton-Lightening and Clayton Thomas-Muller, who’s been active in the fight against tar sands with the Indigenous Environmental Network, Idle No More and now Panelists pointed to the role of fossil fuel divestment in the broader climate justice movement, with Thomas-Muller commenting that “We want to invest in what creates abundance and nourishes us, not what creates scarcity and destruction.”

The rest of the day orbited largely around three themes: “digging in” (to political analysis and organizing skills), “linking up” (with other campaigns and community fights) and “taking action.” Workshops led by other students, along with supporters from and the Divestment Student Network in the United States, aimed to help organizers develop skills to take back to their campus campaigns, featuring sessions on team-building, nonviolent direct action and media and communication. Jade Wong, a University of Toronto student who got involved with divestment after attending the People’s Climate March in September, commented that “There’s a network of people willing to help, some further in on the campaign than others. There’s a lot more communication, hopefully, to be had.”

After hearing an update on the state of the divestment movement in the United States, participants on Sunday divided out into break-out sessions to discuss next steps for building out fossil fuel divestment campaigns across Canada. Groups discussed a Global Divestment Day of Action, frontline solidarity, storytelling and escalation strategies. Another break-out was formed after lunch to discuss connections between anti-austerity organizing and the climate justice movement in Quebec.

Hearing the words “global movement” and seeing it face-to-face are two wildly different experiences. As Conor Curtis, a student at Grenfell Campus of Memorial University in Newfoundland, put it, “When you’re trying to connect with people online, it can be very abstract. But it’s harder to tell where people are with their campaigns — how big is this movement? Now that I see it on a national level, meeting with people face to face, I realize it’s incredibly strong.” Given that there are some 500 divestment campaigns worldwide, the question for the movement now is more about depth than breadth. Campaigns in Canada have the benefit of knowing there’s a thriving international movement behind them, and a national infrastructure far more sophisticated than that pieced together in the early days of the Divestment Student Network after Power Up!

Thinking back to Swarthmore Mountain Justice’s late-night strategy session years ago, all I can remember is how surprised we were at how rapidly the movement swelled just months later. If the most recent Intergovernmental Panel on Climate Change report, mid-term elections and a wave of divestment rejections from university administrations are any indication, winning will mean a lot more organizing, some truly strategic escalation, and — hopefully — a few more pleasant surprises.

Opinion Fri, 21 Nov 2014 09:55:33 -0500
Chief Tax-Dodging Officers

Hiding profits in tax havens is one of the most common ways large corporations avoid paying their fair share to the IRS. And indeed, the 31 firms who paid their CEOs more than Uncle Sam operate 237 subsidiaries in low- or no-tax zones like the Cayman Islands and Bermuda. But that’s just one tax-dodging trick. Corporations have lobbied successfully for a plethora of other tax loopholes and subsidies.

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Republican and Democratic leaders don’t often see eye to eye on taxes.

But surprisingly, corporate tax reform looks like one area where there might actually be some potential for bipartisan action in Washington. This should be good news, since our corporate tax system is clearly hopelessly broken.

Here’s a stark indicator of just how broken: Last year, 29 of the 100 highest-paid CEOs made more in personal compensation than their companies paid in federal income taxes. That’s according to a new report by the Institute for Policy Studies and the Center for Effective Government.

Yes, it’s gotten that easy for large corporations to avoid the Tax Man.

This is true even for the country’s wealthiest companies. Citigroup, Halliburton, Boeing, Ford, Chesapeake Energy, Chevron, Verizon, and General Motors all made more than $1 billion in U.S. profits last year, but still paid their CEOs more than they paid Uncle Sam. In fact, most of them got massive tax refunds.

How is this possible?

(Source: Fleecing Uncle Sam, an Institute for Policy Studies and Center for Effective Government report)(Source: Fleecing Uncle Sam, an Institute for Policy Studies and Center for Effective Government report)

While big businesses moan about the U.S. corporate tax rate of 35 percent, most of them pay nowhere near that. Between 2008 and 2012, the average large corporation paid an effective rate of less than 20 percent.

Hiding profits in tax havens is one of the most common ways large corporations avoid paying their fair share to the IRS. And indeed, the 31 firms who paid their CEOs more than Uncle Sam operate 237 subsidiaries in low- or no-tax zones like the Cayman Islands and Bermuda.

But that’s just one tax-dodging trick. Corporations have lobbied successfully for a plethora of other tax loopholes and subsidies.

Boeing, for example, has figured out how to double dip in the Treasury’s pool.

The aerospace giant hauled in more than $20 billion in federal contracts in 2013. According to Citizens for Tax Justice, taxpayers also picked up the tab for $300 million of Boeing’s research expenses last year through a tax break that Congress is now considering making permanent.

When tax time came, Boeing got $82 million back from the IRS, despite reporting nearly $6 billion in U.S. pre-tax profits. Meanwhile, Boeing chief executive Jim McNerney made $23.3 million.

Corporate tax dodging is bad for ordinary Americans — and our nation’s long-term economic health.

For example, if Boeing had paid the statutory corporate tax rate of 35 percent on its $6 billion in profits, it would’ve added an extra $2 billion to the funds available for public services. That sum could’ve covered the cost of hiring 2,775 teachers for a year.

Shirking taxes may boost the bottom line in the short term, but in the long run it erodes the economic infrastructure businesses need to be competitive.

Unfortunately, the current political rhetoric has little to do with cracking down on corporate tax avoidance.

Republicans are hooked on corporate tax giveaways. And President Barack Obama has suggested that he’s ready to reward corporations for stashing money overseas by giving them deeply discounted tax rates on their profits if they’ll just agree to bring them home.

Both of these positions are based on the unfounded claim that smaller corporate tax burdens translate into more good jobs.

In a Hart Research poll of voters on election night, only 22 percent favored taxing corporations less. In the same poll, less than 30 percent wanted Congress to make tax cuts a higher priority than investments in education, health care, and job creation.

The American people have their priorities straight. They deserve leaders who do too.

Opinion Fri, 21 Nov 2014 11:18:04 -0500
PolitiFact Left the House Without Its Pants On

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(Image: Jared Rodriguez / Truthout)(Image: Jared Rodriguez / Truthout)Liar liar pants on fire…or are they?

The folks over at PolitiFact’s PunditFact have rated a claim I made on a recent episode of The Big Picture as “Pants on Fire,” but they’ve totally missed the point of what I was really saying.

Talking about the Keystone pipeline and the Koch brothers earlier this month, I said that, “The Kochs stand to make around $100 billion if the government approves the Keystone XL pipeline.”

That claim comes from a study released last year by the International Forum on Globalization, which argued that the Koch brothers’ stand to make around $100 billion if the Keystone project is ever approved, because of their massive holdings in millions of acres of oil-bearing Canadian tar sands.

Now, as they do with all of their fact-checks, the folks over at PolitiFact’s PunditFact methodically broke down that study, pointed out what they said were its many flaws, and came up with the conclusion that the $100 billion number was absurd.

They even went straight to the source, and asked Koch Industries about the claim, which a spokesman obviously said was false. What else was a mouthpiece for the Koch brothers going to say?

But that’s besides the point.

In all of their fact-checking and flaw detection, PunditFact missed the point that I was trying to make.

So, let’s try again.

The most profitable investment in the US right now is to buy politicians, and there’s no one better at that than the Koch brothers.

For the 2014 midterms alone, the Koch brothers and their massive political network spent at least $100 million that we know of. And other estimates say that number could be closer to $200 or $300 million.  

That money was used to buy tens of thousands of ads across the country, in an effort to put Koch-friendly lawmakers into power.

And let’s not forget what the Koch brothers are all about. They’re about increasing pollution, doing away with environmental regulations, gutting the EPA, and getting their massive oil reserves in Canada into the US so that they can sell them off and get even richer.

So, with all that in mind, let’s say that the Koch brothers don’t stand to make $100 billion from Keystone. After all, that was just one estimate from one group.

Instead, let’s say that will only make $1 billion from the pipeline project.

Still, wouldn’t they invest $100 million or $200 million in buying politicians to make that $1 billion in profits from Keystone?

Obviously they would, and obviously they did.  

Just hours after the final midterm results were in, both Speaker of the House John Boehner and Senate Minority Leader Mitch McConnell - both big beneficiaries of Koch money and the Koch machine - said that the Keystone XL pipeline would be at the top of their priorities list when the new Republican-controlled Congress is sworn in in January.

The Koch brothers’ plan worked.

By focusing on a number, which was just one estimate by one group, PunditFact completely missed what I was saying.

The money the Koch Brothers spent in the 2014 midterms was all about buying Mitch McConnell, John Boehner and enough Republicans in Congress so that the Keystone XL pipeline would eventually get passed, and so that the Kochs’ Canadian tar sands oil turn into profits - among other things.

So PunditFact, you may have rated me “Pants on Fire,” but for completely missing the point that I was trying to make, and also for thinking that the Koch brothers themselves would tell you the truth, I'm rating you as “Having Left the House Without Your Pants On.”

Opinion Thu, 20 Nov 2014 15:06:05 -0500
The Outpost That Doesn't Exist in the Country You Can't Locate

Admit it. You don’t know where Chad is. You know it’s in Africa, of course. But beyond that? Maybe with a map of the continent and by some process of elimination you could come close. But you’d probably pick Sudan or maybe the Central African Republic. Here’s a tip. In the future, choose that vast, arid swath of land just below Libya.

Who does know where Chad is?  That answer is simpler: the U.S. military.  Recent contracting documents indicate that it’s building something there.  Not a huge facility, not a mini-American town, but a small camp.

That the U.S. military is expanding its efforts in Africa shouldn’t be a shock anymore.  For years now, the Pentagon has been increasing its missions there and promoting a mini-basing boom that has left it with a growing collection of outposts sprouting across the northern tier of the continent.  This string of camps is meant to do what more than a decade of counterterrorism efforts, including the training and equipping of local military forces and a variety of humanitarian hearts-and-minds missions, has failed to accomplish: transform the Trans-Sahara region in the northern and western parts of the continent into a bulwark of stability.

That the U.S. is doing more in Chad specifically isn’t particularly astonishing either.  Earlier this year, TomDispatch and the Washington Post both reported on separate recent deployments of U.S. troops to that north-central African nation.  Nor is it shocking that the new American compound is to be located near the capital, N’Djamena.  The U.S. has previously employed N’Djamena as a hub for its air operations.  What’s striking is the terminology used in the official documents.  After years of adamant claims that the U.S. military has just one lonely base in all of Africa -- Camp Lemonnier in the tiny Horn of Africa nation of Djibouti -- Army documents state that it will now have “base camp facilities” in Chad.

U.S. Africa Command (AFRICOM) still insists that there is no Chadian base, that the camp serves only as temporary lodgings to support a Special Operations training exercise to be held next year.  It also refused to comment about another troop deployment to Chad uncovered by TomDispatch.  When it comes to American military activities in Africa, much remains murky.

Nonetheless, one fact is crystal clear: the U.S. is ever more tied to Chad.  This remains true despite a decade-long effort to train its military forces only to see them bolt from one mission in the face of casualties, leave another in a huff after gunning down unarmed civilians, and engage in human rights abuses at home with utter impunity.  All of this suggests yet another potential source of blowback from America’s efforts in Africa which have backfired, gone bust, and sown strife from Libya to South Sudan, the Gulf Guinea to Mali, and beyond.       

A Checkered History with Chad

Following 9/11, the U.S. launched a counterterrorism program, known as the Pan-Sahel Initiative, to bolster the militaries of Mali, Niger, Mauritania, and Chad.  Three years later, in 2005, the program expanded to include Nigeria, Senegal, Morocco, Algeria, and Tunisia and was renamed the Trans-Sahara Counterterrorism Partnership (TSCTP).  The idea was to turn a huge swath of Africa into a terror-resistant bulwark of stability.  Twelve years and hundreds of millions of dollars later, the region is anything but stable, which means that it fits perfectly, like a missing puzzle piece, with the rest of the under-the-radar U.S. “pivot” to that continent. 

Coups by the U.S.-backed militaries of Mauritania in 2005 and again in 2008, Niger in 2010, and Mali in 2012, as well as a 2011 revolution that overthrew Tunisia’s U.S.-backed government (after the U.S.-supported army stood aside);the establishment of al-Qaeda in the Islamic Maghreb in 2006; and the rise of Boko Haram from an obscure radical sect to a raging insurgent movement in northern Nigeria are only some of the most notable recent failures in TSCTP nations.  Chad came close to making the list, too, but attempted military coups in 2006 and 2013 were thwarted, and in 2008, the government, which had itself come to power in a 1990 coup, managed to hold off against a rebel assault on the capital.

Through it all, the U.S. has continued to mentor Chad’s military, and in return, that nation has lent its muscle to support Washington’s interests in the region.  Chad, for instance, joined the 2013 U.S.-backed French military intervention to retake Mali after Islamists began routing the forces of the American-trained officer who had launched a coup that overthrew that country’s democratically elected government.  According to military briefing slides obtained by TomDispatch, an Intelligence, Surveillance, and Reconnaissance (ISR) liaison team was deployed to Chad to aid operations in Mali and the U.S. also conducted pre-deployment training for its Chadian proxies.  After initial success, the French effort became bogged down and has now become a seemingly interminable, smoldering counterinsurgency campaign.  Chad, for its part, quickly withdrew its forces from the fight after sustaining modest casualties.  “Chad's army has no ability to face the kind of guerrilla fighting that is emerging in northern Mali. Our soldiers are going to return to Chad,” said that country’s president, Idriss Deby.   

Still, U.S. support continued.

In September of 2013, the U.S. military organized meetings with Chad’s senior-most military leaders, including Army chief General Brahim Seid Mahamat, Minister of Defense General Bénaïndo Tatola, and counterterror tsar Brigadier General Abderaman Youssouf Merry, to build solid relationships and support efforts at “countering violent extremist operations objectives and theater security cooperation programs.” This comes from a separate set of documents concerning “IO,” or Information Operations, obtained from the military through the Freedom of Information Act. French officials also attended these meetings and the agenda included the former colonial power’s support of “security cooperation with Chad in the areas of basic and officer training and staff procedures” as well as “French support [for] U.S. security cooperation efforts with the Chadian military.”  Official briefing slides also mention ongoing “train and equip” activities with Chadian troops. 

All of this followed on the heels of a murky coup plot by elements of the armed forces last May to which the Chadian military reacted with a crescendo of violence. According to a State Department report, Chad’s “security forces shot and killed unarmed civilians and arrested and detained members of parliament, military officers, former rebels, and others.”

After Chad reportedly helped overthrow the Central African Republic’s president in early 2013 and later aided in the 2014 ouster of the rebel leader who deposed him, it sent its forces into that civil-war-torn land as part of an African Union mission bolstered by U.S.-backed French troops.  Soon, Chad’s peacekeeping forces were accused of stoking sectarian strife by supporting Muslim militias against Christian fighters.  Then, on March 29th, a Chadian military convoy arrived in a crowded marketplace in the capital, Bangui.  There, according to a United Nations report, the troops “reportedly opened fire on the population without any provocation. At the time, the market was full of people, including many girls and women buying and selling produce. As panic-stricken people fled in all directions, the soldiers allegedly continued firing indiscriminately.” 

In all, 30 civilians were reportedly killed and more than 300 were wounded.  Amid criticism, Chad angrily announced it was withdrawing its troops.  “Despite the sacrifices we have made, Chad and Chadians have been targeted in a gratuitous and malicious campaign that blamed them for all the suffering” in the Central African Republic, declared Chad's foreign ministry.

In May, despite this, the U.S. sent 80 military personnel to Chad to operate drones and conduct surveillance in an effort to locate hundreds of schoolgirls kidnapped by Boko Haram in neighboring Nigeria.  “These personnel will support the operation of intelligence, surveillance, and reconnaissance aircraft for missions over northern Nigeria and the surrounding area,” President Obama told Congress.  The force, he said, will remain in Chad “until its support in resolving the kidnapping situation is no longer required.” 

In July, AFRICOM admitted that it had reduced surveillance flights searching for the girls to focus on other missions.  Now AFRICOM tells TomDispatch that, while “the U.S. continues to help Nigeria address the threat posed by Boko Haram, the previously announced ISR support deployment to Chad has departed.”  Yet more than seven months after their abduction, the girls still have not been located, let alone rescued.

In June, according to the State Department, the deputy commander of U.S. Army Africa (USARAF), Brigadier General Kenneth H. Moore, Jr., visited Chad to “celebrat[e] the successful conclusion of a partnership between USARAF and the Chadian Armed Forces.”  Secretary of the Navy Ray Mabus arrived in that landlocked country at the same time to meet with “top Chadian officials.”  His visit, according to an embassy press release, “underscore[d] the importance of bilateral relations between the two countries, as well as military cooperation.”  And that cooperation has been ample.     

Earlier this year, Chadian troops joined those of the United States, Burkina Faso, Canada, France, Mauritania, the Netherlands, Nigeria, Senegal, the United Kingdom, and host nation Niger for three weeks of military drills as part of Flintlock 2014, an annual Special Ops counterterrorism exercise for TSCTP nations.  At about the time Flintlock was concluding, soldiers from Chad, Cameroon, Burundi, Gabon, Nigeria, the Republic of Congo, the Netherlands, and the United States took part in another annual training exercise, Central Accord 2014.  The Army also sent medical personnel to mentor Chadian counterparts in “tactical combat casualty care,” while Marines and Navy personnel traveled to Chad to train that country’s militarized anti-poaching park rangers in small unit tactics and patrolling.

A separate contingent of Marines conducted military intelligence training with Chadian officers and non-commissioned officers.  The scenario for the final exercise, also involving personnel from Burkina Faso, Cameroon, Mauritania, Senegal, and Tunisia, had a ripped-from-the-headlines quality: “preparing for an unconventional war against an insurgent threat in Mali.”

As for U.S. Army Africa, it sent trainers as part of a separate effort to provide Chadian troops with instruction on patrolling and fixed-site defense as well as live-fire training.  “We are ready to begin training in Chad for about 1,300 soldiers -- an 850 man battalion, plus another 450 man battalion,” said Colonel John Ruffing, the Security Cooperation director of U.S. Army Africa, noting that the U.S. was working in tandem with a French private security firm. 

In September, AFRICOM reaffirmed its close ties with Chad by renewing an Acquisition Cross Servicing Agreement, which allows both militaries to purchase from each other or trade for basic supplies.  The open-ended pact, said Brigadier General James Vechery, AFRICOM’s director for logistics, “will continue to strengthen our bilateral cooperation on international security issues... as well as the interoperability of the armed forces of both nations.”

The Base That Wasn’t and the Deployment That Might Be

In the months since the Chadian armed forces’ massacre in Bangui, various U.S. military contract solicitations and related documents have pointed toward an even more substantive American presence in Chad.  In late September, the Army put out a call for bids to sustain American personnel for six months at those “base camp facilities” located near N'Djamena.  Supporting documents specifically mention 35 U.S. personnel and detail the services necessary to run an austere outpost: field sanitation, bulk water supply, sewage services, and trash removal.  The materials indicate that “local security policy and procedures” are to be provided by the Chadian armed forces and allude to the use of more than one location, saying “none of the sites in Chad are considered U.S.-federally controlled facilities.”  The documents state that such support for those facilities is to run until July 2015. 

After AFRICOM failed to respond to repeated email requests for further information, I called up Chief of Media Operations Benjamin Benson and asked about the base camp.  He was even more tight-lipped than usual.  “I personally don’t know anything,” he told me. “That’s not saying AFRICOM doesn’t have any information on that.”

In follow-up emails, Benson eventually told me that the “base camp” is strictly a temporary facility to be used by U.S. forces only for the duration of the upcoming Flintlock 2015 exercise.  He stated in no uncertain terms: “We are not establishing a base/forward presence/contingency location, building a U.S. facility, or stationing troops in Chad.” 

Benson would not, however, let me speak with an expert on U.S. military activities in Chad.  Nor would he confirm or deny the continued presence of the Intelligence, Surveillance, and Reconnaissance liaison team deployed to Chad in 2013 to support the French mission in Mali, first reported on by TomDispatch this March.  “[W]e cannot discuss ISR activities or the locations and durations of operational deployments,” he wrote.  If an ISR team is still present in Chad, this would represent a substantive long-term deployment despite the lack of a formal U.S. base.

The N’Djamena “base camp” is just one of a series of Chadian projects mentioned in recent contracting documents.  An Army solicitation from September sought “building materials for use in Chad,” while supporting documents specifically mention an “operations center/multi-use facility.”  That same month, the Army awarded a contract for the transport of equipment from Niamey, Niger, the home of another of the growing network of U.S. outposts in Africa, to N’Djamena.  The Army also began seeking out contractors capable of supplying close to 600 bunk beds that could support an American-sized weight of 200 to 225 pounds for a facility “in and around the N'Djamena region.”  And just last month, the military put out a call for a contractor to supply construction equipment -- a bulldozer, dump truck, excavator, and the like -- for a project in, you guessed it, N'Djamena. 

This increased U.S. interest in Chad follows on the heels of a push by France, the nation’s former colonial overlord and America’s current premier proxy in Africa, to beef up its military footprint on the continent.  In July, following U.S.-backed French military interventions in Mali and the Central African Republic, French President François Hollande announced a new mission, Operation Barkhane (a term for a crescent-shaped sand dune found in the Sahara).  Its purpose: a long-term counterterrorism operation involving3,000 French troops deployed to a special forces outpost in Burkina Faso and forward operating bases in Mali, Niger, and not surprisingly, Chad

“There are plenty of threats in all directions,” Hollande told French soldiers in Chad, citing militants in Mali and Libya as well as Boko Haram in Nigeria.  “Rather than having large bases that are difficult to manage in moments of crisis, we prefer installations that can be used quickly and efficiently.”  Shortly afterward, President Obama approved millions in emergency military aid for French operations in Mali, Niger, and Chad, while the United Kingdom, another former colonial power in the region, dispatched combat aircraft to the French base in N'Djamena to contribute to the battle against Boko Haram. 

From Setback to Blowback?

In recent years, the U.S. military has been involved in a continual process of expanding its presence in Africa.  Out of public earshot, officials have talked about setting up a string of small bases across the northern tier of the continent.  Indeed, over the last years, U.S. staging areas, mini-bases, and outposts have popped up in the contiguous nations of Senegal, Mali, Burkina Faso, Niger, and, skipping Chad, in the Central African Republic, followed by South Sudan, Uganda, Kenya, Ethiopia, and Djibouti.  A staunch American ally with a frequent and perhaps enduring American troop presence, Chad seems like the natural spot for still another military compound -- the only missing link in a long chain of countries stretching from west to east, from one edge of the continent to the other -- even if AFRICOM continues to insist that there’s no American “base” in the works. 

Even without a base, the United States has for more than a decade poured copious amounts of money, time, and effort into making Chad a stable regional counterterrorism partner, sending troops there, training and equipping its army, counseling its military leaders, providing tens of millions of dollars in aid, funding its military expeditions, supplying its army with equipment ranging from tents to trucks, donating additional equipment for its domestic security forces, providing a surveillance and security system for its border security agents, and looking the other way when its military employed child soldiers. 

The results? A flight from the fight in Mali, a massacre in the Central African Republic, hundreds of schoolgirls still in the clutches of Boko Haram, and a U.S. alliance with a regime whose “most significant human rights problems,” according to the most recent country report by the State Department’s Bureau of Democracy, Human Rights, and Labor, “were security force abuse, including torture; harsh prison conditions; and discrimination and violence against women and children,” not to mention the restriction of freedom of speech, press, assembly, and movement, as well as arbitrary arrest and detention, denial of fair public trial, executive influence on the judiciary, property seizures, child labor and forced labor (that also includes children), among other abuses.  Amnesty International further found that human rights violations “are committed with almost total impunity by members of the Chadian military, the Presidential Guard, and the state intelligence bureau, the Agence Nationale de Securité.”

With Chad, the United States finds itself more deeply involved with yet another authoritarian government and another atrocity-prone proxy force.  In this, it continues a long series of mistakes, missteps, and mishaps across Africa.  These include an intervention in Libya that transformed the country from an autocracy into a near-failed state, training efforts that produced coup leaders in Mali and Burkina Faso, American nation-building that led to a failed state in South Sudan, anti-piracy measures that flopped in the Gulf of Guinea, the many fiascos of the Trans-Sahara Counterterrorism Partnership, the training of an elite Congolese unit that committed mass rapes and other atrocities, problem-plagued humanitarian efforts in Djibouti and Ethiopia, and the steady rise of terror groups in U.S.-backed countries like Nigeria and Tunisia.  

In other words, in its shadowy “pivot” to Africa, the U.S. military has compiled a record remarkably low on successes and high on blowback.  Is it time to add Chad to this growing list?

News Thu, 20 Nov 2014 12:36:41 -0500
Molly Crabapple Illustrates How Mike Brown's Death Shed Light on Police Brutality

Three months have passed since Michael Brown was killed in Ferguson, and this week the community there is nervously awaiting the grand jury’s decision whether to indict Police Officer Darren Wilson. On Monday, Missouri Governor Jay Nixon declared a state of emergency and issued an executive order to activate the National Guard to act as a backup to police in case protests get out of control.

How exactly did we get here? We recommend you watch this video animation by artist and activist Molly Crabapple. She beautifully illustrates the story of Mike Brown and the activism his death inspired. Crabapple highlights the history of police brutality and also recounts the details of other black men who have died recently at the hands of authorities, including Eric Gardner in New York and John Crawford in Ohio.

News Thu, 20 Nov 2014 11:35:42 -0500
FBI's "Suicide Letter" to Dr. Martin Luther King, Jr., and the Dangers of Unchecked Surveillance

The New York Times has published an unredacted version of the famous “suicide letter” from the FBI to Dr. Martin Luther King, Jr. The letter, recently discovered by historian and professor Beverly Gage, is a disturbing document. But it’s also something that everyone in the United States should read, because it demonstrates exactly what lengths the intelligence community is willing to go to—and what happens when they take the fruits of the surveillance they’ve done and unleash it on a target.

The anonymous letter was the result of the FBI’s comprehensive surveillance and harassment strategy against Dr. King, which included bugging his hotel rooms, photographic surveillance, and physical observation of King’s movements by FBI agents. The agency also attempted to break up his marriage by sending selectively edited “personal moments he shared with friends and women” to his wife.

Portions of the letter had been previously redacted. One of these portions contains a claim that the letter was written by another African-American: “King, look into your heart. You know you are a complete fraud and a great liability to all us Negroes.” It goes on to say “We will now have to depend on our older leaders like Wilkins, a man of character and thank God we have others like him. But you are done.” This line is key, because part of the FBI’s strategy was to try to fracture movements and pit leaders against one another.

The entire letter could have been taken from a page of GCHQ’s Joint Threat Research and Intelligence Group (JTRIG)—though perhaps as an email or series of tweets. The British spying agency GCHQ is one of the NSA’s closest partners. The mission of JTRIG, a unit within GCHQ, is to “destroy, deny, degrade [and] disrupt enemies by discrediting them.” And there’s little reason to believe the NSA and FBI aren’t using such tactics.

The implications of these types of strategies in the digital age are chilling. Imagine Facebook chats, porn viewing history, emails, and more made public to discredit a leader who threatens the status quo, or used to blackmail a reluctant target into becoming an FBI informant. These are not far-fetched ideas. They are the reality of what happens when the surveillance state is allowed to grow out of control, and the full King letter, as well as current intelligence community practices illustrate that reality richly.

The newly unredacted portions shed light on the government’s sordid scheme to harass and discredit Dr. King. One paragraph states:

No person can overcome the facts, no even a fraud like yourself. Lend your sexually psychotic ear to the enclosure. You will find yourself and in all your dirt, filth, evil and moronic talk exposed on the record for all time. . . . Listen to yourself, you filthy, abnormal animal. You are on the record.

And of course, the letter ends with an ominous threat:

King, there is only one thing left for you to do. You know what it is. You have just 34 days in which to do it (this exact number has been selected for a specific reason, it has definite practical significance). You are done. There is but one way out for you. You better take it before your filthy, abnormal fraudulent self is bared to the nation.

There's a lesson to learn here: history must play a central role in the debate around spying today. As Professor Gage states:

Should intelligence agencies be able to sweep our email, read our texts, track our phone calls, locate us by GPS? Much of the conversation swirls around the possibility that agencies like the N.S.A. or the F.B.I. will use such information not to serve national security but to carry out personal and political vendettas. King’s experience reminds us that these are far from idle fears, conjured in the fevered minds of civil libertarians. They are based in the hard facts of history.

News Thu, 20 Nov 2014 11:22:56 -0500