Why #SaudiArabia and #Russia Cannot Be Partners!

Why Saudi Arabia and Russia Cannot Be Partners ~ Petr Lvov, NEW EASTERN OUTLOOK, 05.11.2015.


One cannot help but notice the intensification of diplomatic contacts at the highest levels between Russia and Saudi Arabia. Deputy Crown Prince, Minister of Defense and the son of the king, Prince Mohammed bin Salman has recently visited Russia twice to meet with Russia’s President Vladimir Putin. There were also several phone discussions between the Russian leader and King Salman, primarily about the situation in Syria and Yemen. The Russian Foreign Minister carried out a number of discussions with his Saudi counterpart, meeting him last time in Vienna during talks about the Syrian conflict. Moreover, Riyadh has promised to invest 10 billion dollars in Russia’s economy, along with buying Russia’s military equipment and developing extensive cooperation in the fields of peaceful nuclear energy and space exploration.

There’s been a lot of speculations about the rapid rapprochement of the two countries and the alleged willingness of Moscow to abandon its partnership with Iran and along with the support it has been providing to Bashar al-Assad in exchange for Saudi petrodollars. However, such “analytical reports” are largely incorrect or exaggerated. To see this, one must take into account a number of key factors that determine the character of bilateral relations between Russia and the Kingdom of Saudi Arabia (KSA).

The meeting of Saudi Prince Mohammed with Russia’s President Vladimir Putin, held in October of this year in Sochi, has put on display Riyadh’s concern over Tehran’s growing influence in the Middle East and the development of a Russian-Iranian strategic partnership in the region, particularly in Syria and Iraq . It is also clear that the Saudi ruling elites are irritated with Washington’s reluctance to play a more active role in the Middle East. But this does not mean that the KSA is prepared to change its allegiances, by aligning with Moscow instead of Washington. Although, of course, the Al-Saud family understands that Russia, along with Iran, Syria, Iraq, and the Lebanese “Hezbollah”, are pushing the US out of the region, while gaining more and more influence over the development of the situation in the Middle East. In these circumstances, Saudi Arabia can no longer ignore the growing influence of Russia, especially in light of Moscow’s ties with Tehran, its primal military and political ally in the region. But Saudi Arabia has been trying to prevent the Russian Federation from destroying the so-called “Islamic State” (ISIL), Jabhat al-Nusra, Ahrar al-Sham and Jaysh al-Islam far too proactively to simply accept some positive signals from Russia’s leadership.

The support that the Wahhabi kingdom has been providing to the above mentioned groups puts it in a tight corner. The leading elites of Saudi Arabia are nowhere near a political consensus on the key foreign policy issues. Some advocate the continuation of the hard-line approach towards Russia, while with others, there’s a comprehensive bilateral dialogue they see is needed to get positive results. It should be noted that the religious factor is playing an enormous role in Saudi policies. A month ago the Wahhabi religious authorities of the country have signed a call for jihad against Russia because of its intervention in Syria. The document has no official status, but it enjoys broad support in Saudi Arabia. This can be easily explained by the fact that regular Saudi citizens do not know a lot about Russia and their attitude towards Moscow is shaped by old stereotypes about the Soviet intervention in Afghanistan. The Saudi elites surely still remember that back in 1985, Riyadh did everything it possibly could to accelerate the destruction of the Soviet economy by provoking a sharp decline in oil prices. To some extent, one can argue that the results of these actions provoked the collapse of the Soviet Union.

Therefore, only the naive optimists and greedy “generals” of the Russian economy will overstate the significance of Saudi promises, since the KSA has allegedly been ready to invest 10 billion dollars in the Russian economy, along with buying weapons on hundreds of million dollars, for a while now. Yet, Russian weapons are incompatible with the US weapon systems dominating Saudi Arabia’s arsenals. Lucrative contracts that are being presented to Moscow are nothing more than a mere ploy for bargaining that lies in the heart of Saudi aspirations. It’s not hard to recall previous instances when Riyadh tried to deceive Russia into surrendering it’s positions. Back in 2008, Saudi Arabia promised Moscow that it would sign a handful of contracts regarding the purchases of tanks, helicopters and mobile anti-air (AA) missile systems (S-400s) if Russia reduced its military cooperation with Iran along with supporting new sanctions against Tehran. Moscow grabbed the bait… and received nothing. Over the period of 2013-2014. Prince Bandar, the head of Saudi intelligence services at the time, made several visits to Russia, promising Vladimir Putin multi-billion dollar deals on the purchase of Russian weapons in exchange for abandoning Damascus. But this time Russia was wise enough not to believe him. Riyadh also regularly  tries to manipulate Russia by discussing oil prices even though it was Saudi Arabia itself that intentionally brought down oil prices back in 2014, dealing a serious blow to Russia’s economy.

Saudi Arabia’s aggressive actions in the Middle East and its oil pricing policy damaging Russia’s economy leads to outright skepticism and distrust in Russia’s position towards Saudi Arabia. The Kremlin has understood that in the eyes of the Al-Saud family, Russia is just a player in the regional political games that has to be dealt with in one way or another. Saudi Arabia initiates negotiations on deliveries of Russian weapons only in specific cases:

  • when the kingdom is unable to push the United States around with its energy policy;
  • when the kingdom wants to spoil relations between Moscow and Tehran;
  • when the kingdom wants to apply pressure on Israel and;
  • when the kingdom notices that its relations with the US are rapidly deteriorating.

But time and time again these talks lead to nothing, because the Saudis have never been serious about Russian weapons in the first place. But at the same time Riyadh wants Washington to take into account the problems Saudi Arabia and its Gulf Cooperation Council (GCC) allies face. After all, Riyadh is convinced that America depends on the internal stability of the kingdom.

One must always remember that the Saudi-American partnership has lasted for over 70 years. And despite all the ongoing diplomatic maneuvers of Riyadh, including flirting with Russia, the US and Saudi Arabia are tied by a close military and political alliance, while the political goals of the latter largely remain unchanged. Moscow will never be able to replace Washington, and, frankly speaking, it’s not going to. Moscow needs negotiations with Riyadh mainly for the acquisition of additional leverage in the Middle East. And they produce results. Only Saudi Arabia, Qatar and Turkey have not given up on the goal of overthrowing Bashar al-Assad. And this goal completely contradicts the interests of Russia, because only the sitting government in Damascus is able to ensure the preservation of Moscow’s position in the Middle East. Apparently, Riyadh had already forgotten that is has provoked the war in Syria, given rise to ISIL, and encouraged and directly financed a wave of “color revolutions” across the Arab World.

It is clear that the KSA would like to see a new Russian policy in the Middle East. But they want this policy to be shaped on their own terms, without taking into account the national interests of Russia and its allies in the region. Therefore, at this stage, Russia’s bilateral relations with Iran will clearly stand in the way of the development of relations between Moscow and Riyadh.

If Saudi Arabia does sincerely want to have Moscow as a full partner, it must abandon its arrogant approach towards it, while taking into account that this strengthening world power has its own interests in the region, which are to be respected. As the events of recent months have shown, not a single regional problem, whether it is Syria, Iraq, the fight against ISIL or Yemen, can be solved without Russia. And the US will be of no help, especially at the start of the presidential race in Washington. Otherwise, Riyadh is seriously risking a taste of it own medicine, namely the “Arab Spring” phenomenon reaching the rotten structure of its own Saudi society.

Peter Lvov, Ph.D in political science, exclusively for the online magazine “New Eastern Outlook”.


#BentBritain: #UK admits unlawfully monitoring legally privileged communications!

UK admits unlawfully monitoring legally privileged communications ~ and , The Guardian, Wednesday 18 February 2015.

Intelligence agencies have been monitoring conversations between lawyers and their clients for past five years, government admits

Abdul Hakim Belhaj and Sami al Saadi
The admission comes ahead of a legal challenge brought on behalf of two Libyans, Abdel-Hakim Belhaj and Sami al-Saadi, over allegations that security services unlawfully intercepted their communications with lawyers.  Photograph: PA & AFP

The regime under which UK intelligence agencies, including MI5 and MI6, have been monitoring conversations between lawyers and their clients for the past five years is unlawful, the British government has admitted.

The admission that the activities of the security services have failed to comply fully with human rights laws in a second major area – this time highly sensitive legally privileged communications – is a severe embarrassment for the government.

It follows hard on the heels of the British court ruling on 6 February declaring that the regime surrounding the sharing of mass personal intelligence data between America’s national security agency and Britain’s GCHQ was unlawful for seven years.

The admission that the regime surrounding state snooping on legally privileged communications has also failed to comply with the European convention on human rights comes in advance of a legal challenge, to be heard early next month, in which the security services are alleged to have unlawfully intercepted conversations between lawyers and their clients to provide the government with an advantage in court.

The case is due to be heard before the Investigatory Powers Tribunal (IPT). It is being brought by lawyers on behalf of two Libyans, Abdel-Hakim Belhaj and Sami al-Saadi, who, along with their families, were abducted in a joint MI6-CIA operation and sent back to Tripoli to be tortured by Muammar Gaddafi’s regime in 2004.

A government spokesman said: “The concession the government has made today relates to the agencies’ policies and procedures governing the handling of legally privileged communications and whether they are compatible with the European convention on human rights.

“In view of recent IPT judgments, we acknowledge that the policies adopted since [January] 2010 have not fully met the requirements of the ECHR, specifically article 8 (right to privacy). This includes a requirement that safeguards are made sufficiently public.

“It does not mean that there was any deliberate wrongdoing on their part of the security and intelligence agencies, which have always taken their obligations to protect legally privileged material extremely seriously. Nor does it mean that any of the agencies’ activities have prejudiced or in any way resulted in an abuse of process in any civil or criminal proceedings.”

He said that the intelligence agencies would now work with the interception of communications commissioner to ensure their policies satisfy all of the UK’s human rights obligations.

Cori Crider, a director at Reprieve and one of the Belhaj family’s lawyers said: “By allowing the intelligence agencies free reign to spy on communications between lawyers and their clients, the government has endangered the fundamental British right to a fair trial.

“Reprieve has been warning for months that the security services’ policies on lawyer-client snooping have been shot through with loopholes big enough to drive a bus through.

“For too long, the security services have been allowed to snoop on those bringing cases against them when they speak to their lawyers. In doing so, they have violated a right that is centuries old in British common law. Today they have finally admitted they have been acting unlawfully for years.

“Worryingly, it looks very much like they have collected the private lawyer-client communications of two victims of rendition and torture, and possibly misused them. While the government says there was no ‘deliberate’ collection of material, it’s abundantly clear that private material was collected and may well have been passed on to lawyers or ministers involved in the civil case brought by Abdel hakim Belhaj and Fatima Boudchar, who were ‘rendered’ to Libya in 2004 by British intelligence.

“Only time will tell how badly their case was tainted. But right now, the government needs urgently to investigate how things went wrong and come clean about what it is doing to repair the damage.”

Government sources, in line with all such cases, refuse to confirm or deny whether the two Libyans were the subject of an interception operation. They insist the concession does not concern the allegation that actual interception took place and say it will be for the investigatory powers tribunal hearing to determine the issue.

An updated draft interception code of practice spelling out the the rules for the first time was quietly published at the same time as the Investigatory Powers Tribunal ruling against GCHQ earlier this month in the case brought by Privacy International and Liberty.

The government spokesman said the draft code set out enhanced safeguards and provided more detail than previously on the protections that had to be applied in the security agencies handling of legally privileged communications.

The draft code makes clear that warrants for snooping on legally privileged conversations, emails and other communications between suspects and their lawyers can be granted if there are exceptional and compelling circumstances. They have to however ensure that they are not available to lawyers or policy officials who are conducting legal cases against those suspects.

Exchanges between lawyers and their clients enjoy a special protected status under UK law. Following exposure of widespread monitoring by the US whistleblower Edward Snowden in 2013, Belhaj’s lawyers feared that their exchanges with their clients could have been compromised by GCHQ’s interception of phone conversations and emails.

To demonstrate that its policies satisfy legal safeguards, MI6 were required in advance of Wednesday’s concession to disclose internal guidance on how intelligence staff should deal with material protected by legal professional privilege.

The MI6 papers noted: “Undertaking interception in such circumstances would be extremely rare and would require strong justification and robust safeguards. It is essential that such intercepted material is not acquired or used for the purpose of conferring an unfair or improper advantage on SIS or HMG [Her Majesty’s government] in any such litigation, legal proceedings or criminal investigation.”

The internal documents also refer to a visit by the interception commissioner, Sir Anthony May, last summer to examine interception warrants, where it was discovered that regulations were not being observed. “In relation to one of the warrants,” the document explained, “the commissioner identified a number of concerns with regard to the handling of [legal professional privilege] material”.

Amnesty UK’s legal programme director, Rachel Logan, said: “We are talking about nothing less than the violation of a fundamental principle of the rule of law – that communications between a lawyer and their client must be confidential.

“The government has been caught red-handed. The security agencies have been illegally intercepting privileged material and are continuing to do so – this could mean they’ve been spying on the very people challenging them in court.

“This is the second time in as many weeks that government spies have been rumbled breaking the law.”

#Obama’s ‘Crusaders’ analogy veils the #West’s modern crimes!

Obama’s ‘Crusaders’ analogy veils the West’s modern crimes ~ Ben White, The Nation, February 14, 2015.

Like many children, 13-year-old Mohammed Tuaiman suffered from nightmares. In his dreams, he would see flying “death machines” that turned family and friends into burning charcoal. No one could stop them, and they struck any place, at any time.

Unlike most children, Mohammed’s nightmares killed him.

Three weeks ago, a CIA drone operating over Yemen fired a missile at a car carrying the teenager, and two others. They were all incinerated. Nor was Mohammed the first in his family to be targeted: drones had already killed his father and brother.

Since president Barack Obama took office in 2009, the US has killed at least 2,464 people through drone strikes outside the country’s declared war zones. The figure is courtesy of The Bureau of Investigative Journalism, which says that at least 314 of the dead, one in seven, were civilians.

Recall that for Obama, as The New York Times reported in May 2012, “all military-age males in a strike zone” are counted “as combatants” – unless “there is explicit intelligence posthumously proving them innocent”.

It sounds like the stuff of nightmares.

The week after Mohammed’s death, on February 5, Mr Obama addressed the National Prayer Breakfast, and discussed the violence of ISIL.

“Lest we get on our high horses”, said the commander-in-chief, “remember that during the Crusades and the Inquisition, people committed terrible deeds in the name of Christ.”

These comments prompted a (brief) media storm, with Mr Obama accused of insulting Christians, pandering to the terrorist enemy, or just bad history.

In fact, the president was simply repeating a point often made by liberals since September 11, namely, that all religions have blots on their copy book through the deeds of their followers.

One of the consequences, however, of this invocation of the Crusades – unintended, and all the more significant for it – is to seal away the West’s “sins”, particularly vis-à-vis its relationship to the Middle East, in events that took place a thousand years ago.

The Crusades were, in one sense, a demonstration of raw military power, and a collective trauma for the peoples of the regions they marched through and invaded.

In the siege of Jerusalem in 1099, a witness described how the Europeans ordered “all the Saracen dead to be cast outside because of the great stench, since the whole city was filled with their corpses”.

He added: “No one ever saw or heard of such slaughter of pagan people, for funeral pyres were formed from them like pyramids.”

Or take the Third Crusade, when, on August 20, 1191, England’s King Richard I oversaw the beheading of 3,000 Muslim prisoners at Acre in full view of Saladin’s army.

Just “ancient history”? In 1920, when the French had besieged and captured Damascus, their commander Henri Gourard reportedly went to the grave of Saladin, kicked it, and uttered: “Awake Saladin, we have returned! My presence here consecrates the victory of the Cross over the Crescent.”

But the US president need not cite the Crusades or even the colonial rule of the early 20th century: more relevant reference points would be Bagram and Fallujah.

Bagram base in Afghanistan is where US soldiers tortured prisoners to death – like 22-year-old taxi driver and farmer Dilawar. Before he was killed in custody, Dilawar was beaten by soldiers just to make him scream “Allah!”

Five months after September 11, The Guardian reported that US missiles had killed anywhere between 1,300 and 8,000 in Afghanistan. Months later, the paper suggested that “as many as 20,000 Afghans may have lost their lives as an indirect consequence of the US intervention”.

When it was Iraq’s turn, the people of Fallujah discovered that US forces gave them funerals, not democracy. On April 28, 2003, US soldiers massacred civilian protesters, shooting to death 17 during a demonstration.

When that city revolted against the occupation, the residents paid a price. As Marines tried to quell resistance in the city, wrote The New York Times on April 14, 2004, they had “orders to shoot any male of military age on the streets after dark, armed or not”.Months later, as the Marines launched their November assault on the city, CNN reported that “the sky…seems to explode”.

In their bombardment and invasion of Iraq in 2003, the US and UK armed forces rained fiery death down on men, women and children. Prisoners were tortured and sexually abused. Hundreds of thousands of Iraqis died. No one was held to account.

It is one thing to apologise for the brutality of western Crusaders a thousand years ago. It is quite another to look at the corpses of the victims of the imperialist present, or hear the screams of the bereaved.

In his excellent book The Muslims Are Coming, Arun Kundnani analysed the “politics of anti-extremism”, and describes the two approaches developed by policymakers and analysts during the “war on terror”.

The first approach, which he refers to as “culturalism”, emphasises “what adherents regard as inherent features of Islamic culture”. The second approach, “reformism”, is when “extremism is viewed as a perversion of Islam’s message”, rather than “a clash of civilisations between the West’s modern values and Islam’s fanaticism”.

Thus the American Right was angry with Mr Obama, because for them, it is about religion – or specifically, Islam. Liberals, meanwhile, want to locate the problem in terms of culture.

Both want to avoid a discussion about imperialism, massacres, coups, brutalities, disappearances, dictatorships – in other words, politics.

As Kundnani writes: when “the concept of ideology” is made central, whether understood as “Islam itself or as Islamist extremism”, then “the role of western states in co-producing the terror war is obscured”.

The problem with Mr Obama’s comments on the Crusades was not, as hysterical conservatives claimed, that he was making offensive and inaccurate analogies with ISIL; rather, that in the comfort of condemning the past, he could mask the violence of his own government in the present.

The echoes of collective trauma remain for a long time, and especially when new wounds are still being inflicted. Think it is farfetched that Muslims would still care about a 1,000-year-old European invasion? Then try asking them about Guantanamo and Camp Bucca instead.

Ben White is a journalist and author of Israeli Apartheid

Obama’s ‘Crusaders’ analogy veils the West’s modern crimes
Pep Montserrat for The National

#CIA #Torture and the Myth of Never Again: The Persecution of John Kiriakou!

Torture and the Myth of Never Again: The Persecution of John Kiriakou ~  Thursday December 11, 2014, FIREDOGLAKE.

No one except John Kiriakou is being held accountable for America’s torture policy. And John Kiriakou didn’t torture anyone, he just blew the whistle on it.

In a Galaxy Far, Far Away

The United States sanctioned acts of torture by the Central Intelligence Agency and others. The acts took place in secret prisons (“black sites”) against persons detained indefinitely without trial. They were described in detail and explicitly authorized in a series of secret torture memosdrafted by John Yoo, Jay Bybee, and Steven Bradbury, senior lawyers in the DOJ’s Office of Legal Counsel. (Office of Legal Counsel attorneys technically answer directly to the DOJ, which is supposed to be independent from the White House, but obviously was not in this case.) Not one of those men, or their Justice Department bosses, has been held accountable for their actions.

Some tortured prisoners were killed by the CIA. Attorney General Eric Holder announced recently that no one would be held accountable for those murders either. “Based on the fully developed factual record concerning the two deaths,” he said, “the Department has declined prosecution because the admissible evidence would not be sufficient to obtain and sustain a conviction beyond a reasonable doubt.”

Jose Rodriguez, a senior CIA official, admitted destroying videotapes of potentially admissible evidence, showing the torture of captives by operatives of the U.S. government at a secret prison thought to be located at a Vietnam-War-era airbase in Thailand. He was not held accountable for deep-sixing this evidence, nor for his role in the torture of human beings.

John Kiriakou Alone

The one man in the whole archipelago of America’s secret horrors who went to jail is former CIA officer John Kiriakou. Of the untold numbers of men and women involved in the whole nightmare show of those years, only one.

And of course, he didn’t torture anyone.

The charges against Kiriakou alleged that in answering questions from reporters about suspicions that the CIA tortured detainees in its custody, he violated the Espionage Act, once an obscure World War I-era law that aimed at punishing Americans who gave aid to the enemy. It was passed in 1917 and has been the subject of much judicial and Congressional doubt ever since. Kiriakou is one of six government whistleblowers who have been charged under the Act by the Obama administration. From 1917 until Obama came into office, only three people had ever charged in this way.

The Obama Justice Department claimed the former CIA officer “disclosed classified information to journalists, including the name of a covert CIA officer and information revealing the role of another CIA employee in classified activities.”

The charges resulted from a CIA investigation. That investigation was triggered by a filing in January 2009 on behalf of detainees at Guantanamo that contained classified information the defense had not been given through government channels, and by the discovery in the spring of 2009 of photographs of alleged CIA employees among the legal materials of some detainees at Guantanamo. According to onedescription, Kiriakou gave several interviews about the CIA in 2008. Court documents charge that he provided names of covert Agency officials to a journalist, who allegedly in turn passed them on to a Guantanamo legal team. The team sought to have detainees identify specific CIA officials who participated in their renditions and torture. Kiriakou was accused of providing the identities of CIA officers that may have allowed names to be linked to photographs.

The real “offense” in the eyes of the Obama administration was quite different. In 2007, Kiriakou became a whistleblower. He went on record as the first (albeit by then, former) CIA official to confirm the use of waterboarding of al-Qaeda prisoners as an interrogation technique, and then to condemn it as torture. He specifically mentioned the waterboarding of Abu Zubaydah in that secret prison in Thailand. Kiriakou also ran afoul of the CIA over efforts to clear for publication a book he had written about the Agency’s counterterrorism work.

If Kiriakou had actually tortured someone himself, even to death, there is no possibility that he would be in trouble. In the national security state that rules the roost in Washington, talking out of turn about a crime has become the only possible crime.

Facing decades away from his family and young children, Kiriakou agreed to a plea bargain and is still in prison serving a 30-month sentence.

Never Again

For years it was the policy of the United States of America to torture and abuse its enemies or, in some cases, simply suspected enemies. It has remained a U.S. policy, even under the Obama administration, to employ “extraordinary rendition” — that is, the sending of captured terror suspects to the jails of countries that are known for torture and abuse, an outsourcing of what we no longer want to do.

Techniques that the U.S. hanged men for at Nuremburg and in post-war Japan were employed and declared lawful. To embark on such a program with the oversight of the Bush administration, learned men and women had to have long discussions, with staffers running in and out of rooms with snippets of research to buttress the justifications being so laboriously developed. The CIA undoubtedly used some cumbersome bureaucratic process to hire contractors for its torture staff. The old manuals needed to beupdated, psychiatrists consulted, military survival experts interviewed, training classes set up.

Videotapes were made of the torture sessions and no doubt DVDs full of real horror were reviewed back at headquarters.

Torture techniques were even reportedly demonstrated to top officials inside the White House. Individual torturers who were considered particularly effective were no doubt identified, probably rewarded, and sent on to new secret sites to harm more people.

America just didn’t wake up one day and start slapping around some Islamic punk. These were not the torture equivalents of rogue cops. A system, a mechanism, was created. That we now can only speculate about many of the details involved and the extent of all this is a tribute to the thousands who continue to remain silent about what they did, saw, heard about, or were associated with. Many of them work now at the same organizations, remaining a part of the same contracting firms, the CIA, and the military. Our torturers.

What is it that allows all those people to remain silent? How many are simply scared, watched what happening to John Kiriakou and thought: not me, I’m not sticking my neck out to see it get chopped off.They’re almost pathetically forgivable, even if they are placing their own self-interest above that of their country.

But what about the others, the ones who remain silent about what they did or saw or aided and abetted in some fashion because they still think it was the right thing to do? The ones who will do it again when another frightened president asks them to? Or even the ones who enjoyed doing it?

The same Department of Justice that hunted down the one man who spoke against torture from the inside still maintains a special unit, 60 years after the end of WWII, dedicated to hunting down the last few at-large Nazis. They do that under the rubric of “never again.” The truth is that same team needs to be turned loose on our national security state. Otherwise, until we have a full accounting of what was done in our names by our government, the pieces are all in place for it to happen again. There, if you want to know, is the real horror.


Peter Van Buren writes about current events at blog. His book,Ghosts of Tom Joad: A Story of the #99Percent, is available now from Amazon


Whistleblowing A

| How the West Created the Islamic State … With a Little Help From Our Friends!

How the West Created the Islamic State … With a Little Help From Our Friends  ~ Nafeez Ahmed,  bestselling author, investigative journalist and international security scholar.


“This is an organisation that has an apocalyptic, end-of-days strategic vision which will eventually have to be defeated,” Gen Martin Dempsey, chairman of the US Joint Chiefs of Staff, told a Pentagon press conference in August.

Military action is necessary to halt the spread of the ISIS/IS “cancer,” said President Obama. Yesterday, in his much anticipated address, he called for expanded airstrikes across Iraq and Syria, and new measures to arm and train Iraqi and Kurdish ground forces.

“The only way to defeat [IS] is to stand firm and to send a very straightforward message,” declared Prime Minister Cameron. “A country like ours will not be cowed by these barbaric killers.”

Missing from the chorus of outrage, however, has been any acknowledgement of the integral role of covert US and British regional military intelligence strategy in empowering and even directly sponsoring the very same virulent Islamist militants in Iraq, Syria and beyond, that went on to break away from al-Qaeda and form ‘ISIS’, the Islamic State of Iraq and Syria, or now simply, the Islamic State (IS).

Since 2003, Anglo-American power has secretly and openly coordinated direct and indirect support for Islamist terrorist groups linked to al-Qaeda across the Middle East and North Africa. This ill-conceived patchwork geostrategy is a legacy of the persistent influence of neoconservative ideology, motivated by longstanding but often contradictory ambitions to dominate regional oil resources, defend an expansionist Israel, and in pursuit of these, re-draw the map of the Middle East.

Now despite Pentagon denials that there will be boots on the ground – and Obama’s insistence that this would not be another “Iraq war” – local Kurdish military and intelligence sources confirm that US and German special operations forces are already “on the ground here. They are helping to support us in the attack.” US airstrikes on ISIS positions and arms supplies to the Kurds have also been accompanied by British RAF reconnaissance flights over the region andUK weapons shipments to Kurdish peshmerga forces.

Divide and rule in Iraq

“It’s not that we don’t want the Salafis to throw bombs,” said one US government defense consultant in 2007. “It’s who they throw them at – Hezbollah, Moqtada al-Sadr, Iran, and at the Syrians, if they continue to work with Hezbollah and Iran.”

Early during the 2003 invasion and occupation of Iraq, the US covertly supplied arms to al-Qaeda affiliated insurgents even while ostensibly supporting an emerging Shi’a-dominated administration.

Pakistani defense sources interviewed by Asia Times in February 2005 confirmed that insurgents described as “former Ba’ath party” loyalists – who were being recruited and trainedby “al-Qaeda in Iraq” under the leadership of the late Abu Musab Zarqawi – were being supplied Pakistan-manufactured weapons by the US. The arms shipments included rifles, rocket-propelled grenade launchers, ammunition, rockets and other light weaponry. These arms “could not be destined for the Iraqi security forces because US arms would be given to them”, a source told Syed Saleem Shahzad – the Times’ Pakistan bureau chief who, “known for his exposes of the Pakistani military” according to the New Yorker, was murdered in 2011. Rather, the US is playing a double-game to “head off” the threat of a “Shi’ite clergy-driven religious movement,” said the Pakistani defense source.

This was not the only way US strategy aided the rise of Zarqawi, a bin Laden mentee and brainchild of the extremist ideology that would later spawn ‘ISIS.’

The JSOC insignia

According to a little-known November report for the US Joint Special Operations University(JSOU) and Strategic Studies Department, Dividing Our Enemies, post-invasion Iraq was “an interesting case study of fanning discontent among enemies, leading to ‘red-against-red’ [enemy-against-enemy] firefights.”

While counterinsurgency on the one hand requires US forces to “ameliorate harsh or deprived living conditions of the indigenous populations” to publicly win local hearts and minds:

“… the reverse side of this coin is one less discussed. It involves no effort to win over those caught in the crossfire of insurgent and counterinsurgent warfare, whether by bullet or broadcast. On the contrary, this underside of the counterinsurgency coin is calculated to exploit or create divisions among adversaries for the purpose of fomenting enemy-on-enemy deadly encounters.”

In other words, US forces will pursue public legitimacy through conventional social welfare while simultaneously delegitimising local enemies by escalating intra-insurgent violence, knowing full-well that doing so will in turn escalate the number of innocent civilians “caught in the crossfire.” The idea is that violence covertly calibrated by US special operations will not only weaken enemies through in-fighting but turn the population against them.

In this case, the ‘enemy’ consisted of jihadists, Ba’athists, and peaceful Sufis, who were in a majority but, like the militants, also opposed the US military presence and therefore needed to be influenced. The JSOU report referred to events in late 2004 in Fallujah where “US psychological warfare (PSYOP) specialists” undertook to “set insurgents battling insurgents.” This involved actually promoting Zarqawi’s ideology, ironically, to defeat it: “The PSYOP warriors crafted programs to exploit Zarqawi’s murderous activities – and to disseminate them through meetings, radio and television broadcasts, handouts, newspaper stories, political cartoons, and posters – thereby diminishing his folk-hero image,” and encouraging the different factions to pick each other off. “By tapping into the Fallujans’ revulsion and antagonism to the Zarqawi jihadis the Joint PSYOP Task Force did its ‘best to foster a rift between Sunni groups.’”

Yet as noted by Dahr Jamail, one of the few unembedded investigative reporters in Iraq after the war, the proliferation of propaganda linking the acceleration of suicide bombings to the persona of Zarqawi was not matched by meaningful evidence. His own search to substantiate the myriad claims attributing the insurgency to Zarqawi beyond anonymous US intelligence sources encountered only an “eerie blankness”.

US soldiers in Fallujah

The US military operation in Fallujah, largely justified on the claim that Zarqawi’s militant forces had occupied the city, used white phosphorous, cluster bombs, and indiscriminate air strikes to pulverise 36,000 of Fallujah’s 50,000 homes, killing nearly a thousand civilians, terrorising 300,000 inhabitants to flee, and culminating in a disproportionate increase in birth defects, cancer and infant mortality due to the devastating environmental consequences of the war.

To this day, Fallujah has suffered from being largely cut-off from wider Iraq, its infrastructure largely unworkable with water and sewage systems still in disrepair, and its citizens subject to sectarian discrimination and persecution by Iraqi government backed Shi’a militia and police. “Thousands of bereaved and homeless Falluja families have a new reason to hate the US and its allies,” observed The Guardian in 2005. Thus, did the US occupation plant the seeds from which Zarqawi’s legacy would coalesce into the Frankenstein monster that calls itself “the Islamic State.”

Bankrolling al-Qaeda in Syria

According to former French foreign minister Roland Dumas, Britain had planned covert action in Syria as early as 2009: “I was in England two years before the violence in Syria on other business,” he told French television: “I met with top British officials, who confessed to me that they were preparing something in Syria. This was in Britain not in America. Britain was preparing gunmen to invade Syria.”

Leaked emails from the private intelligence firm Stratfor, including notes from a meeting with Pentagon officials, confirmed that as of 2011, US and UK special forces training of Syrian opposition forces was well underway. The goal was to elicit the “collapse” of Assad’s regime “from within.”

Since then, the role of the Gulf states – namely Saudi Arabia, Qatar, Kuwait, the United Arab Emirates, and Jordan (as well as NATO member Turkey) – in officially and unofficiallyfinancing and coordinating the most virulent elements amongst Syria’s rebels under the tutelage of US military intelligence is no secret. Yet the conventional wisdom is that the funneling of support to Islamist extremists in the rebel movement affiliated to al-Qaeda has been a colossal and regrettable error.

The reality is very different. The empowerment of the Islamist factions within the ‘Free Syrian Army’ (FSA) was a foregone conclusion of the strategy.

United States Secretary of State Hillary Clinton (R) greets Turkey’s Foreign Minister Ahmet Davutoglu (L), United Arab Emirates’ Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan (2nd L) and British Foreign Minister William Hague, in Tunis

In its drive to depose Col. Qaddafi in Libya, NATO had previously allied itself with rebels affiliated to the al-Qaeda faction, the Islamic Fighting Group. The resulting Libyan regime backed by the US was in turn liaising with FSA leaders in Istanbul to provide money and heavy weapons for the anti-Assad insurgency. The State Department even hired an al-Qaeda affiliated Libyan militia group to provide security for the US embassy in Benghazi – although they had links with the very people that attacked the embassy.

Last year, CNN confirmed that CIA officials operating secretly out of the Benghazi embassy were being forced to take extra polygraph tests to keep under wraps what US Congressman suspect was a covert operation “to move surface-to-air missiles out of Libya, through Turkey, and into the hands of Syrian rebels.”

With their command and control centre based in Istanbul, Turkey, military supplies from Saudi Arabia and Qatar in particular were transported by Turkish intelligence to the border for rebel acquisition. CIA operatives along with Israeli and Jordanian commandos were also training FSA rebels on the Jordanian-Syrian border with anti-tank and anti-aircraft weapons. In addition, otherreports show that British and French military were also involved in these secret training programmes. It appears that the same FSA rebels receiving this elite training went straight into ISIS – last month one ISIS commander, Abu Yusaf, said, “Many of the FSA people who the west has trained are actually joining us.”

The National thus confirmed the existence of another command and control centre in Amman, Jordan, “staffed by western and Arab military officials,” which “channels vehicles, sniper rifles, mortars, heavy machine guns, small arms and ammunition to Free Syrian Army units.” Rebel and opposition sources described the weapons bridge as “a well-run operation staffed by high-ranking military officials from 14 countries, including the US, European nations and Arabian Gulf states, the latter providing the bulk of materiel and financial support to rebel factions.”

The FSA sources interviewed by The National went to pains to deny that any al-Qaeda affiliated factions were involved in the control centre, or would receive any weapons support. But this is difficult to believe given that “Saudi and Qatari-supplied weapons” were being funneled through to the rebels via Amman, to their favoured factions.

Classified assessments of the military assistance supplied by US allies Saudi Arabia and Qatar obtained by the New York Times showed that “most of the arms shipped at the behest of Saudi Arabia and Qatar to supply Syrian rebel groups… are going to hardline Islamic jihadists, and not the more secular opposition groups that the West wants to bolster.”

Lest there be any doubt as to the extent to which all this covert military assistance coordinated by the US has gone to support al-Qaeda affiliated factions in the FSA, it is worth noting that earlier this year, the Israeli military intelligence website Debkafile – run by two veteran correspondents who covered the Middle East for 23 years for The Economist – reported that: “Turkey is giving Syrian rebel forces, including the al-Qaeda-affiliated Nusra Front, passage through its territory to attack the northwestern Syrian coastal area around Latakia.”

In August, Debkafile reported that “The US, Jordan and Israel are quietly backing the mixed bag of some 30 Syrian rebel factions”, some of which had just “seized control of the Syrian side of the Quneitra crossing, the only transit point between Israeli and Syrian Golan.” However, Debkafile noted, “al-Qaeda elements have permeated all those factions.” Israel has provided limited support to these rebels in the form of “medical care,” as well as “arms, intelligence and food…

“Israel acted as a member, along with the US and Jordan, of a support system for rebel groups fighting in southern Syria. Their efforts are coordinated through a war-room which the Pentagon established last year near Amman. The US, Jordanian and Israeli officers manning the facility determine in consultation which rebel factions are provided with reinforcements from the special training camps run for Syrian rebels in Jordan, and which will receive arms. All three governments understand perfectly that, notwithstanding all their precautions, some of their military assistance is bound to percolate to al-Qaeda’s Syrian arm, Jabhat Al-Nusra, which is fighting in rebel ranks. Neither Washington or Jerusalem or Amman would be comfortable in admitting they are arming al-Qaeda’s Nusra Front in southern Syria.”

This support also went to ISIS. Although the latter was originally founded in Iraq in October 2006, by 2013 the group had significantly expanded its operations in Syria working alongside al-Qaeda’s al-Nusra until February 2014, when ISIS was formally denounced by al-Qaeda. Even so, experts on the region’s Islamist groups point out that the alleged rift between al-Nusra and ISIS, while real, is not as fraught as one might hope, constituting a mere difference in tactics rather than fundamental ideology.

ISIS fighters pose for the camera

Officially, the US government’s financial support for the FSA goes through the Washington DC entity, the Syrian Support Group (SSG), Syrian Support Group (SSG) which was incorporated in April 2012. The SSG is licensed via the US Treasury Department to “export, re-export, sell, or supply to the Free Syrian Army (‘FSA’) financial, communications, logistical, and other services otherwise prohibited by Executive Order 13582 in order to support the FSA.”

In mid-2013, the Obama administration intensified its support to the rebels with a new classified executive order reversing its previous policy limiting US direct support to only nonlethal equipment. As before, the order would aim to supply weapons strictly to “moderate” forces in the FSA.

Except the government’s vetting procedures to block Islamist extremists from receiving US weapons have never worked.

A year later, Mother Jones found that the US government has “little oversight over whether US supplies are falling prey to corruption – or into the hands of extremists,” and relies “on too much good faith.” The US government keeps track of rebels receiving assistance purely through “handwritten receipts provided by rebel commanders in the field,” and the judgement of its allies. Countries supporting the rebels – the very same which have empowered al-Qaeda affiliated Islamists – “are doing audits of the delivery of lethal and nonlethal supplies.”

Thus, with the Gulf states still calling the shots on the ground, it is no surprise that by September last year, eleven prominent rebel groups distanced themselves from the ‘moderate’ opposition leadership and allied themselves with al-Qaeda.

By the SSG’s own conservative estimate, as much as 15% of rebel fighters are Islamists affiliated to al-Qaeda, either through the Jabhut al-Nusra faction, or its breakaway group ISIS. But privately, Pentagon officials estimate that “more than 50%” of the FSA is comprised of Islamist extremists, and according to rebel sources neither FSA chief Gen Salim Idris nor his senior aides engage in much vetting, decisions about which are made typically by local commanders.


Follow the money

Media reports following ISIS’ conquest of much of northern and central Iraq this summer have painted the group as the world’s most super-efficient, self-financed, terrorist organisation that has been able to consolidate itself exclusively through extensive looting of Iraq’s banks and funds from black market oil sales. Much of this narrative, however, has derived from dubious sources, and overlooked disturbing details.

One senior anonymous intelligence source told Guardian correspondent Martin Chulov, for instance, that over 160 computer flash sticks obtained from an ISIS hideout revealed information on ISIS’ finances that was completely new to the intelligence community.

“Before Mosul, their total cash and assets were $875m [£515m],” said the official on the funds obtained largely via “massive cashflows from the oilfields of eastern Syria, which it had commandeered in late 2012.” Afterwards, “with the money they robbed from banks and the value of the military supplies they looted, they could add another $1.5bn to that.” The thrust of the narrative coming from intelligence sources was simple: “They had done this all themselves. There was no state actor at all behind them, which we had long known. They don’t need one.”

“ISIS’ half-a-billion-dollar bank heist makes it world’s richest terror group,” claimed the Telegraph, adding that the figure did not include additional stolen gold bullion, and millions more grabbed from banks “across the region.”

This story of ISIS’ stupendous bank looting spree across Iraq made global headlines but turned out to be disinformation. Senior Iraqi officials and bankers confirmed that banks in Iraq, including Mosul where ISIS supposedly stole $430 million, had faced no assault, remain open, and are guarded by their own private security forces.

How did the story come about? One of its prime sources was Iraqi parliamentarian Ahmed Chalabi – the same man who under the wing of his ‘Iraqi National Congress’ peddled false intelligence about Saddam’s weapons of mass destruction and ties to al-Qaeda.

In June, Chalabi met with the US ambassador to Iraq, Robert Beecroft, and Brett McGurk, the State Department’s deputy assistant secretary of state for Iraq and Iran. According to sources cited by Buzzfeed in June, Beecroft “has been meeting Chalabi for months and has dined at his mansion in Baghdad.”

Follow the oil

But while ISIS has clearly obtained funding from donors in the Gulf states, many of its fighters having broken away from the more traditional al-Qaeda affiliated groups like Jabhut al-Nusra, it has also successfully leveraged its control over Syrian and Iraqi oil fields.

In January, the New York Times reported that “Islamist rebels and extremist groups have seized control of most of Syria’s oil and gas resources”, bolstering “the fortunes of the Islamic State of Iraq and Syria, or ISIS, and the Nusra Front, both of which are offshoots of al-Qaeda.” Al-Qaeda affiliated rebels had “seized control of the oil and gas fields scattered across the country’s north and east,” while more moderate “Western-backed rebel groups do not appear to be involved in the oil trade, in large part because they have not taken over any oil fields.”

Yet the west had directly aided these Islamist groups in their efforts to operationalise Syria’s oil fields. In April 2013, for instance, the Times noted that al-Qaeda rebels had taken over key regions of Syria: “Nusra’s hand is felt most strongly in Aleppo”, where the al-Qaeda affiliate had established in coordination with other rebel groups including ISIS “a Shariah Commission” running “a police force and an Islamic court that hands down sentences that have included lashings.” Al-Qaeda fighters also “control the power plant and distribute flour to keep the city’s bakeries running.” Additionally, they “have seized government oil fields” in provinces of Deir al-Zour and Hasaka, and now make a “profit from the crude they produce.”

Lost in the fog of media hype was the disconcerting fact that these al-Qaeda rebel bread and oil operations in Aleppo, Deir al-Zour and Hasaka were directly and indirectly supported by the US and the European Union (EU). One account by the Washington Post for instance refers to a stealth mission in Aleppo “to deliver food and other aid to needy Syrians – all of it paid for by the US government,” including the supply of flour. “The bakery is fully supplied with flour paid for by the United States,” the Post continues, noting that local consumers, however, “credited Jabhat al-Nusra – a rebel group the United States has designated a terrorist organisation because of its ties to al-Qaeda – with providing flour to the region, though he admitted he wasn’t sure where it comes from.”

And in the same month that al-Qaeda’s control of Syria’s main oil regions in Deir al-Zour and Hasaka was confirmed, the EU voted to ease an oil embargo on Syria to allow oil to be sold on international markets from these very al-Qaeda controlled oil fields. European companies would be permitted to buy crude oil and petroleum products from these areas, although transactions would be approved by the Syrian National Coalition. Due to damaged infrastructure, oil would be trucked by road to Turkey where the nearest refineries are located.

“The logical conclusion from this craziness is that Europe will be funding al-Qaeda,”said Joshua Landis , a Syria expert at the University of Oklahoma.

Just two months later, a former senior staffer at the Syria Support Group in DC, David Falt, leaked internal SSG emails confirming that the group was “obsessed” with brokering “jackpot” oil deals on behalf of the FSA for Syria’s rebel-run oil regions.

“The idea they could raise hundreds of millions from the sale of the oil came to dominate the work of the SSG to the point no real attention was paid to the nature of the conflict,” said Falt, referring in particular to SSG’s director Brian Neill Sayers, who before his SSG role worked with NATO’s Operations Division. Their aim was to raise money for the rebels by selling the rights to Syrian oil.

Tacit complicity in IS oil smuggling

Even as al-Qaeda fighters increasingly decide to join up with IS, the ad hoc black market oil production and export infrastructure established by the Islamist groups in Syria has continued to function with, it seems, the tacit support of regional and western powers.

According to Ali Ediboglu, a Turkish MP for the border province of Hatay, IS is selling the bulk of its oil from regions in Syria and Mosul in Iraq through Turkey, with the tacit consent of Turkish authorities: “They have laid pipes from villages near the Turkish border at Hatay. Similar pipes exist also at [the Turkish border regions of] Kilis, Urfa and Gaziantep. They transfer the oil to Turkey and parlay it into cash. They take the oil from the refineries at zero cost. Using primitive means, they refine the oil in areas close to the Turkish border and then sell it via Turkey. This is worth $800 million.” He also noted that the extent of this and related operations indicates official Turkish complicity. “Fighters from Europe, Russia, Asian countries and Chechnya are going in large numbers both to Syria and Iraq, crossing from Turkish territory. There is information that at least 1,000 Turkish nationals are helping those foreign fighters sneak into Syria and Iraq to join ISIS. The National Intelligence Organization (MIT) is allegedly involved. None of this can be happening without MIT’s knowledge.”

Similarly, there is evidence that authorities in the Kurdish region of Iraq are also turning a blind eye to IS oil smuggling. In July, Iraqi officials said that IS had begun selling oil extracted from in the northern province of Salahuddin. One official pointed out that “the Kurdish peshmerga forces stopped the sale of oil at first, but later allowed tankers to transfer and sell oil.”

State of Law coalition MP Alia Nasseef also accused the Kurdistan Regional Government (KRG) of secretly trading oil with IS: “What is happening shows the extent of the massive conspiracy against Iraq by Kurdish politicians… The [illegal] sale of Iraqi oil to ISIS or anyone else is something that would not surprise us.” Although Kurdish officials have roundly rejected these accusations, informed sources told the Arabic daily Asharq Al-Awsat that Iraqi crude captured by ISIS was “being sold to Kurdish traders in the border regions straddling Iraq, Iran and Syria, and was being shipped to Pakistan where it was being sold ‘for less than half its original price.’”

An official statement in August from Iraq’s Oil Ministry warned that any oil not sanctioned by Baghdad could include crude smuggled illegally from IS:

“International purchasers [of crude oil] and other market participants should be aware that any oil exports made without the authorisation of the Ministry of Oil may contain crude oil originating from fields under the control of [ISIS].”

“Countries like Turkey have turned a blind eye to the practice” of IS oil smuggling, said Luay al-Khateeb, a fellow at the Brookings Doha Center, “and international pressure should be mounted to close down black markets in its southern region.” So far there has been no such pressure. Meanwhile, IS oil smuggling continues, with observers inside and outside Turkeynoting that the Turkish government is tacitly allowing IS to flourish as it prefers the rebels to the Assad regime.

According to former Iraqi oil minister Isam al-Jalabi, “Turkey is the biggest winner from the Islamic State’s oil smuggling trade.” Both traders and oil firms are involved, he said, with the low prices allowing for “massive” profits for the countries facilitating the smuggling.

Buying ISIS oil?

Early last month, a tanker carrying over a million barrels in crude oil from northern Iraq’s Kurdish region arrived at the Texas Gulf of Mexico. The oil had been refined in the Iraqi Kurdish region before being pumped through a new pipeline from the KRG area ending up at Ceyhan, Turkey, where it was then loaded onto the tanker for shipping to the US. Baghdad’s efforts to stop the oil sale on the basis of its having national jurisdiction were rebuffed by American courts.

In early September, the European Union’s ambassador to Iraq, Jana Hybášková, told the EU Foreign Affairs Committee that “several EU member states have bought oil from the Islamic State (IS, formerly ISIS) terrorist organisation that has been brutally conquering large portions of Iraq and Syria,” according to Israel National News. She however “refused to divulge the names of the countries despite being asked numerous times.”

A third end-point for the KRG’s crude this summer, once again shipped via Turkey’s port of Ceyhan, was Israel’s southwestern port of Ashkelon. This is hardly news though. In May,Reuters revealed that Israeli and US oil refineries had been regularly purchasing and importing KRG’s disputed oil.

Meanwhile, as this triangle of covert oil shipments in which ISIS crude appears to be hopelessly entangled becomes more established, Turkey has increasingly demanded that the US pursue formal measures to lift obstacles to Kurdish oil sales to global markets. The KRG plans to export as much as 1 million barrels of oil a day by next year through its pipeline to Turkey.

The Kirkuk-Ceyhan pipeline: Iraqi Kurdistan alone could hold up to 45 billion barrels of oil, allowing exports of up to 4 million barrels a day in the next decade if successfully brought to production

Among the many oil and gas firms active in the KRG capital, Erbil, are ExxonMobil and Chevron. They are drilling in the region for oil under KRG contracts, though operations have been halted due to the crisis. No wonder Steve Coll writes in the New Yorker that Obama’s air strikes and arms supplies to the Kurds – notably not to Baghdad – effectively amount to “the defense of an undeclared Kurdish oil state whose sources of geopolitical appeal – as a long-term, non-Russian supplier of oil and gas to Europe, for example – are best not spoken of in polite or naïve company.” The Kurds are now busy working to “quadruple” their export capacity, while US policy has increasingly shifted toward permitting Kurdish exports – a development that would have major ramifications for Iraq’s national territorial integrity.

To be sure, as the offensive against IS ramps up, the Kurds are now selectively cracking down on IS smuggling efforts – but the measures are too little, too late.

A new map

The Third Iraq War has begun. With it, longstanding neocon dreams to partition Iraq into three along ethnic and religious lines have been resurrected.

White House officials now estimate that the fight against the region’s ‘Islamic State’ will lastyears, and may outlive the Obama administration. But this ‘long war’ vision goes back to nebulous ideas formally presented by late RAND Corp analyst Laurent Muraweic before the Pentagon’s Defense Policy Board at the invitation of then chairman Richard Perle. That presentation described Iraq as a “tactical pivot” by which to transform the wider Middle East.

Brian Whitaker, former Guardian Middle East editor, rightly noted that the Perle-RAND strategy drew inspiration from a 1996 paper published by the Israeli Institute for Advanced Strategic and Political Studies, co-authored by Perle and other neocons who held top positions in the post-9/11 Bush administration.

The policy paper advocated a strategy that bears startling resemblance to the chaos unfolding in the wake of the expansion of the ‘Islamic State’ – Israel would “shape its strategic environment” by first securing the removal of Saddam Hussein. “Jordan and Turkey would form an axis along with Israel to weaken and ‘roll back’ Syria.” This axis would attempt to weaken the influence of Lebanon, Syria and Iran by “weaning” off their Shi’ite populations. To succeed, Israel would need to engender US support, which would be obtained by Benjamin Netanyahu formulating the strategy “in language familiar to the Americans by tapping into themes of American administrations during the cold war.”

The 2002 Perle-RAND plan was active in the Bush administration’s strategic thinking on Iraq shortly before the 2003 war. According to US private intelligence firm Stratfor, in late 2002, then vice-president Dick Cheney and deputy defense secretary Paul Wolfowitz had co-authored a scheme under which central Sunni-majority Iraq would join with Jordan; the northern Kurdish regions would become an autonomous state; all becoming separate from the southern Shi’ite region.

The strategic advantages of an Iraq partition, Stratfor argued, focused on US control of oil:

“After eliminating Iraq as a sovereign state, there would be no fear that one day an anti-American government would come to power in Baghdad, as the capital would be in Amman [Jordan]. Current and potential US geopolitical foes Iran, Saudi Arabia and Syria would be isolated from each other, with big chunks of land between them under control of the pro-US forces.Equally important, Washington would be able to justify its long-term and heavy military presence in the region as necessary for the defense of a young new state asking for US protection – and to secure the stability of oil markets and supplies. That in turn would help the United States gain direct control of Iraqi oil and replace Saudi oil in case of conflict with Riyadh.”

The expansion of the ‘Islamic State’ has provided a pretext for the fundamental contours of this scenario to unfold, with the US and British looking to re-establish a long-term military presence in Iraq in the name of the “defense of a young new state.”

In 2006, Cheney’s successor, Joe Biden, also indicated his support for the ‘soft partition’ of Iraq along ethno-religious lines – a position which the co-author of the Biden-Iraq plan, Leslie Gelb of the Council on Foreign Relations, now argues is “the only solution” to the current crisis.

Also in 2006, the Armed Forces Journal published a map of the Middle East with its borders thoroughly re-drawn, courtesy of Lt. Col. (ret.) Ralph Peters, who had previously been assigned to the Office of the Deputy Chief of Staff for Intelligence where he was responsible for future warfare. As for the goals of this plan, apart from “security from terrorism” and “the prospect of democracy”, Peters also mentioned “access to oil supplies in a region that is destined to fight itself.”

In 2008, the strategy re-surfaced – once again via RAND Corp – through a report funded by the US Army Training and Doctrine Command on how to prosecute the ‘long war.’ Among its strategies, one scenario advocated by the report was ‘Divide and Rule’ which would involve:

“… exploiting fault lines between the various Salafi-jihadist groups to turn them against each other and dissipate their energy on internal conflicts.”

Simultaneously, the report suggested that the US could foster conflict between Salafi-jihadists and Shi’ite militants by:

“… shoring up the traditional Sunni regimes… as a way of containing Iranian power and influence in the Middle East and Persian Gulf.”

One way or another, some semblance of this plan is in motion. Last week, Israeli foreign minister Avigdor Leiberman told US secretary of state John Kerry:

“Iraq is breaking up before our eyes and it would appear that the creation of an independent Kurdish state is a foregone conclusion.”

Nafeez Ahmed is a bestselling author, investigative journalist and international security scholar. He has contributed to two major terrorism investigations in the US and UK, the 9/11 Commission and the 7/7 Coroner’s Inquest, and has advised the Royal Military Academy Sandhust, British Foreign Office and US State Department, among government agencies.

Nafeez is a regular contributor to The Guardian where he writes about the geopolitics of interconnected environmental, energy and economic crises. He has also written for The Independent, Sydney Morning Herald, The Age, The Scotsman, Foreign Policy, Prospect, New Statesman, Le Monde diplomatique, among many others.

Nafeez’s just released new novel, ZERO POINT, predicted a new war in Iraq to put down an al-Qaeda insurgency.

| US poverty – Americans deserve better: LEFT WITH NOTHING!

LEFT WITH NOTHING. ~  Michael SallahDebbie Cenziper, Steven Rich, The Washington Post.

This man owed $134 in property taxes. The District sold the lien to an investor who foreclosed on his $197,000house and sold it. He and many others homeowners like him were




Written by Michael Sallah, Debbie Cenziper, Steven Rich
Graphics by Ted Mellnik, Emily Chow, Laura Stanton
Photos by Michael S. Williamson
Published on September 8, 2013

On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.

Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.

All because he didn’t pay a $134 property tax bill.



Part 2 — As federal agents investigated a sweeping bid-rigging scheme at Maryland’s tax auctions, some of those same suspects were in the District, engaging in dozens of rounds of unusual bidding. Coming Monday.

Part 3 — District tax officials have made hundreds of mistakes in recent years by declaring property owners delinquent even after they paid their taxes, forcing them to fight for their homes. Coming Tuesday.


The retired Marine sergeant lost his house on that summer day two years ago through a tax lien sale — an obscure program run by D.C. government that enlists private investors to help the city recover unpaid taxes.

For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.

But under the watch of local leaders, the program has morphed into a predatory system of debt collection for well-financed, out-of-town companies that turned $500 delinquencies into $5,000 debts — then foreclosed on homes when families couldn’t pay, a Washington Post investigation found.

As the housing market soared, the investors scooped up liens in every corner of the city, then started charging homeowners thousands in legal fees and other costs that far exceeded their original tax bills, with rates for attorneys reaching $450 an hour.

How you could lose your home

Property owners in the District risk losing their homes over relatively small amounts in unpaid property taxes. Here’s a look at the process:


If you don’t pay your taxes, the District sells a lien for the tax debt to an investor, usually a company. The investor gets a lien.



The typical lien amount, just a fraction of the property’s value


Tax liens the District has sold from 2005 to 2012

Note: The District no longer sells tax liens on houses for delinquent tax bills under $1,000. Lien amounts include property taxes, penalties and interest. The District doesn’t track legal fees charged to homeowners. The estimates of legal fees is besed on a Post study of more than 200 cases. The foreclosure and court cases are through mid-2013.

Source: Data from D.C. Office of Tax and Revenue and D.C. Superior Court

Families have been forced to borrow or strike payment plans to save their homes.

Others weren’t as lucky. Tax lien purchasers have foreclosed on nearly 200 houses since 2005 and are now pressing to take 1,200 more, many owned free and clear by families for generations.

Investors also took storefronts, parking lots and vacant land — about 500 properties in all, or an average of one a week. In dozens of cases, the liens were less than $500.

Coleman, struggling with dementia, was among those who lost a home. His debt had snowballed to $4,999 — 37 times the original tax bill. Not only did he lose his $197,000 house, but he also was stripped of the equity because tax lien purchasers are entitled to everything, trumping even mortgage companies.

“This is destroying lives,” said Christopher Leinberger, a distinguished scholar and research professor of urban real estate at George Washington University.

Officials at the D.C. Office of Tax and Revenue said that without tax sales, property owners wouldn’t feel compelled to pay their bills.

“The tax sale is the last resort. It’s also the first resort — it’s the only way in the statute to collect debt,” said deputy chief financial officer Stephen Cordi.

But the District, a hotbed for the tax lien industry, has done little to shield its most vulnerable homeowners from unscrupulous operators.

Foreclosures have upended families in some of the city’s most distressed neighborhoods. Houses were taken from a housekeeper, a department store clerk, a seamstress and even the estates of dead people. The hardest hit: elderly homeowners, who were often sick or dying when tax lien purchasers seized their houses.

One 65-year-old flower shop owner lost his Northwest Washington home of 40 years after a company from Florida paid his back taxes — $1,025 — and then took the house through foreclosure while he was in hospice, dying of cancer. A 95-year-old church choir leader lost her family home to a Maryland investor over a tax debt of $44.79 while she was struggling with Alzheimer’s in a nursing home.

Other cities and states took steps to curb abuses, such as capping the fees, safeguarding houses owned by the elderly or scrapping tax sales altogether and instead collecting the money themselves.

“Where is the justice? They’re taking people’s lives,” said Beverly Smalls, whose elderly aunt lost her home in Northeast Washington. “It’s just not right.”

In a 10-month investigation, The Post chronicled years of breakdowns and abuses in a program that puts at risk one of the most fundamental possessions in American life.

  • Of the nearly 200 homeowners who lost their properties in recent years, one in three had liens of less than $1,000.
  • More than half of the foreclosures were in the city’s two poorest wards, 7 and 8, where dozens of owners were forced to leave their homes just months before purchasers sold them. One foreclosed on a brick house near the Maryland border with a $287 lien and sold it less than eight weeks later for $129,000.
  • More than 40 houses were taken by companies whose representatives were caught breaking laws in other states to win liens.
  • Instead of stepping in, the D.C. tax office created more problems by selling nearly 1,900 liens by mistake in the past six years — even after owners paid their taxes — forcing unsuspecting families into legal battles that have lasted for years. One 64-year-old woman spent two years fighting to save her home in Northwest after the tax office erroneously charged her $8.61 in interest.

Stephen Cordi, with the D.C. tax office, said the agency has improved the program, including giving more frequent notice to homeowners before liens are imposed. (Lois Raimondo / The Washington Post)

Every Wednesday, homeowners plead their cases at D.C. Superior Court, where they are pitted against industry lawyers who have filed for more than 7,000 foreclosure cases in the past eight years alone. Families pace the hallways waiting for their names to be called in last-ditch efforts to rescue their homes.

“This is highway robbery,” said Brenda Adjetey, who showed up in court last week to protect her home in Southeast Washington after her $1,100 tax bill nearly quadrupled because of legal fees charged by the investor.

Tax lien purchasers defend the industry, saying that most people who buy liens are local investors just trying to earn interest — not take homes — and that the law gives owners six months to repay their debts before a foreclosure case can be filed.

“This is an opportunity to make some money, but it is also an opportunity for the city to get paid and to help its citizens,” said Richard Cockerill, a veteran bidder from Virginia.

In a written statement, the tax office added, “Property owners are given multiple opportunities to pay both before and after the tax sale.”

Officials also said the tax office has made improvements to the program in recent years, including additional warnings to homeowners before liens are sold, and the office recently stopped selling liens on houses for less than $1,000.

But officials acknowledge that limit was set to manage the caseload and is not a permanent policy change.

At a public hearing this past October, housing advocates presented a list of reforms to the D.C. Council, including capping the fees charged by purchasers and offering payment plans to struggling homeowners. But the changes were never made.

“That’s a failure on the part of government,” said Stephen Fuller, director of the Center for Regional Analysis at George Mason University. “This has punitive consequences. People have been damaged.”

Outsiders come to buy liens

Thomas McRae ran a flower shop on the first floor in this house on Sherman Avenue NW. But a tax lien investor from Florida foreclosed while McRae was under hospice care.

Liens are generally sold the year after a homeowner fails to pay a tax bill, for the same amount as the debt. Homeowners receive several warnings before their liens are put up at annual auctions.

Once a lien is sold, owners have six months to repay the investor with interest. If that does not happen, the investor can move to foreclose.

For years, the auctions came and went with little fanfare, drawing local investors who would plunk down a few hundred dollars to buy up liens in neighborhoods they knew well. Most were looking to earn the interest, and if there was a foreclosure, it was handled by the tax office.

But the work overwhelmed the agency, and in 2001, city leaders made a critical change: They told investors to head directly to court to file a foreclosure case.

The move empowered investors to start charging legal fees and court costs — a game changer that allowed them to turn minor delinquencies into insurmountable debts.

Companies from Florida, Illinois, Maryland and New York came to town, prepared to spend millions.

In 2007, more than 150 purchasers spent five days competing for 2,000 liens, first on properties downtown near the Capitol, then Georgetown, followed by Dupont Circle, Chinatown and finally the neighborhoods near the Anacostia River, long stricken by poverty.

Where tax lien foreclosures occur in the District

Dots on the map show foreclosures that followed tax liens since 2005, and the shading represents number of pending foreclosure cases.

Minorities are hit the hardest


of pending foreclosures are in neighborhoods where less than 20% of the population is white.

Areas with the most pending foreclosures


Deanwood, Burrville, Grant Park, Lincoln Heights, Fairmont Heights


Congress Heights, Bellevue, Washington Highlands

Foreclosures since 2005

  •  Residential
  •  Vacant
  •  Commercial and other

Pending foreclosures


Search for an address or neighborhood

Congress Heights, Bellevue, Washington HighlandsDouglas, Shipley TerraceWoodland/Fort Stanton, Garfield Heights, Knox HillNear Southeast, Navy YardSouthwest Employment Area, Southwest/Waterfront, Fort McNair, Buzzard PointCapitol View, Marshall Heights, Benning HeightsRiver Terrace, Benning, Greenway, Dupont ParkDowntown, Chinatown, Penn Quarters, Mount Vernon Square, North Capitol StreetWest End, Foggy Bottom, GWUMayfair, Hillbrook, Mahaning HeightsDeanwood, Burrville, Grant Park, Lincoln Heights, Fairmont HeightsShaw, Logan CircleEastland Gardens, KenilworthIvy City, Arboretum, Trinidad, Carver LangstonGeorgetown, Burleith/HillandaleDupont Circle, Connecticut Avenue/K StreetHoward University, Le Droit Park, Cardozo/ShawKalorama Heights, Adams Morgan, Lanier HeightsEdgewood, Bloomingdale, Truxton Circle, EckingtonColumbia Heights, Mt. Pleasant, Pleasant Plains, Park ViewBrookland, Brentwood, LangdonWoodridge, Fort Lincoln, GatewayCathedral Heights, McLean Gardens, Glover ParkCleveland Park, Woodley Park, Massachusetts Avenue Heights, Woodland-Normanstone TerraceNorth Michigan Park, Michigan Park, University HeightsBrightwood Park, Crestwood, PetworthLamont Riggs, Queens Chapel, Fort Totten, Pleasant HillTakoma, Brightwood, Manor ParkHawthorne, Barnaby Woods, Chevy ChaseHistoric AnacostiaFairfax Village, Naylor Gardens, Hillcrest, Summit ParkSheridan, Barry Farm, Buena VistaTwining, Fairlawn, Randle Highlands, Penn Branch, Fort Davis Park, Fort DupontUnion Station, Stanton Park, Kingman ParkCapitol Hill, Lincoln ParkSpring Valley, Palisades, Wesley Heights, Foxhall Crescent, Foxhall Village, Georgetown ReservoirNorth Cleveland Park, Forest Hills, Van NessFriendship Heights, American University Park, TenleytownColonial Village, Shepherd Park, North Portal Estates


In the District of Columbia:


foreclosures since 2005


open cases in court

Of the 1,598 open foreclosure cases in court, 1,184 are residential; 201 are vacant; and 213 are categorized as other.

Source: Post analysis of data from D.C. Superior Court, D.C. Recorder of Deeds, U.S. Census.

When it was over, just six companies had swept the bidding, snaring two-thirds of the liens, which totaled $5 million, on properties worth more than $666 million.

One of those purchasers was under federal investigation at the time for rigging tax auctions in Maryland, where he was suspected of scheming to win liens — then demanding excessive fees from homeowners. Lawyers for a second firm would also come under investigation in the same case.

Their companies and others bought into every ward of the District in 2007, including Deanwood, one of the city’s oldest predominantly African American neighborhoods. On long stretches of Dix Street, where the recession hit hard and lingered, 33 liens were sold between 2005 and 2008, on properties scattered amid food banks and “Cash 4 Gold” signs.

Across the city, the rate of foreclosure cases has nearly doubled in the past five years — in a single week in January, tax lien companies filed more than 180 cases. Of the 13,000 liens sold since 2005, more than half have ended up in court.

Your insight
Should D.C. offer protections for people who can’t pay their taxes, including elderly, disabled or low-income residents? Explain.
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With no caps on fees, families have paid a steep price, facing bills for legal fees and court costs often more than triple their original tax debts, The Post found. Rates for the attorneys hired by the tax lien companies have reached $450 an hour.

Even the smallest expenses have been passed on — including the paper that ordered property owners to court at 25 cents per page. One attorney billed for preparing the bill itself — $25.

Time and again, the bills came without receipts or breakdowns justifying the costs.

“I just don’t know what he’s trying to charge me for,” said longtime community activist Barbara Morgan, 80, standing outside the courtroom earlier this year with a $2,700 legal bill that doubled the tax debt on her home of 50 years. “It’s ridiculous.”

Local judges have taken purchasers to task. One was so critical of the fees charged by Aeon Financial of Chicago, he slashed them in half last year. Aeon wanted $6,300 in fees for a $1,680 tax lien.

A senior attorney billed at $450 an hour. A junior attorney charged $325. Legal assistants tacked on $110 an hour. Plus, there was $800 in expenses, including $27.60 for “dismissal costs.”

“Unreasonable,” Judge Joseph E. Beshouri said in his ruling.

In 2009, D.C. Attorney General Peter J. Nickles also stepped in, seeking an injunction against Aeon over fees that he called “unlawful” and “predatory.”

“Aeon’s excessive attorney’s fee demands are likely to result in at least some homeowners not being able to redeem homes,” according to the motion.

In one case, Steve Segears, who lives in the house his father bought after World War II, was charged $5,500 in fees by Aeon, nearly double his $2,900 tax bill.

“Enough is enough,” Michael J. Wilson, Segears’s attorney, wrote to the court. “The Aeon juggernaut keeps rolling along by demanding payment of unreasonable and extortionate attorneys’ fees and other alleged expenses, including those which have not actually been ‘incurred.’ ”

Aeon did not respond to repeated calls and letters seeking comment.

Other places acknowledged abuses years ago and took steps to guard against them. New York City won’t allow tax liens to be sold on homes owned by low-income seniors and the disabled, as well as veterans. Some counties in Michigan have scrapped tax lien sales altogether and collect the money themselves. Maryland, fearing that taxpayers were being gouged, limits the legal fees to $1,500.

Most homeowners are in no position to fight and rely on the government to protect them from unfair practices, said Howard Liggett, former director of the National Tax Lien Association, who has spoken out nationally against excessive fees.

But D.C. leaders have not provided key protections, including caps on fees.

“It’s embarrassing,” said Liggett, who is familiar with the District’s tax auctions and bidders. “You’re always going to have unscrupulous [investors]. You’ve got to self-police.”

Long battles over bills

Coleman walks to the store with his neighbor, Patricia Johnson. The retired veteran bought his duplex in Northeast Washington for $57,500 with life insurance money that he received when his wife died of breast cancer.

Threatened with mounting fees, some families simply gave up. In court files and interviews, they described large bills and long battles with lawyers while interest grew on their tax debts.

“We just didn’t have the money to fight these people,” said Michael McRae, who tried unsuccessfully to save his brother’s house from a tax-lien firm from Florida.

In the past eight years, investors have foreclosed on a condominium just a few blocks from the U.S. Capitol and another just down the street from the Embassy of Peru, a single-family home near Rock Creek Park and dozens of houses in poor neighborhoods along the Anacostia River.

The Post found investors have taken nearly 200 homes since 2005, assessed at $39 million. They sold most of them, sometimes within weeks, after paying off any back taxes or city fines.

Your insight
Should D.C. stop selling tax liens to private investors and instead collect the money itself? Why?
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One of the most aggressive investors was Heartwood, whose lawyers were investigated and disbarred as a result of Maryland’s criminal bid-rigging case. Formerly a subsidiary of Florida’s BankAtlantic Bancorp, Heartwood has taken more than 20 houses through foreclosure and sold them all, including a brick duplex in Northeast Washington with a $535 lien for $169,610.

One of the houses was owned by Michael McRae’s brother, Thomas, a flower-shop owner, who was in and out of a coma and under hospice care while Heartwood was pressing to take his house over what began as a $1,025 tax debt. Thomas McRae died in June 2006 — three months after a judge approved the foreclosure.

Family members found out and fought back, saying no one told them about the lien or foreclosure.

Heartwood eventually paid the family $80,000 to settle the case and quickly sold the brick house on a bustling corner of Sherman Avenue NW for $175,000. Longtime neighbors still recall how Thomas McRae had filled the sidewalk with flowers.

“We’re just regular people, and we don’t have $200,000 to fight a big organization from Florida,” his brother said.

In a written statement, the tax office said the $1,025 tax bill was “not a small debt.” A spokesperson for Heartwood declined to discuss the foreclosure cases but said the company is no longer buying tax liens in the District and Maryland.

Bennie Coleman was ousted from his house two years ago in a flurry of foreclosures that swept the poor neighborhoods of Ward 7.

The retired Vietnam veteran bought the tidy brick duplex in Northeast for $57,500 with life insurance money that he received when his wife died of breast cancer in 1988.

Known in his working-class neighborhood as “Tops,” he spent two decades in the house without a mortgage. But in recent years, Coleman began showing signs of dementia — he would forget to pay bills or buy food. His next-door neighbor would often bring him plates of chicken and carrots.

In 2006, he forgot to pay a $134 tax bill, prompting the city to place a lien on the home and add $183 in interest and penalties. His son paid the $317 bill in 2009, records show, but that wasn’t enough.

The Maryland company that had bought the lien had already gone to court to put a foreclosure in motion. To lift the lien, the company’s lawyer was demanding steep legal fees and expenses— $4,999.

The letter

Bennie Coleman’s son wrote to the court in 2008 for help.

Click on the image to read the letter.

Coleman’s son couldn’t pay and wrote to the court for help: “I would hate for him at his age to lose his home.” One payment was made for $700 in 2009, but when no additional payments followed, the court approved the foreclosure in June 2010.

His son couldn’t be reached for comment. In the summer of 2011, federal marshals showed up at the door when Coleman refused to leave.

“He had no clue what was going on,” said neighbor Patricia Johnson. “I went over and told my mom, ‘Looks like they are going to get Tops out.’ ”

That night, he slept in a chair on the front porch.

The court later appointed a conservator, who told The Post that Coleman was incapable of responding to the emergency unfolding in his life, including showing up in court to fight for his house.

“He had no chance,” said attorney Robert Bunn. “He has dementia. He did not understand the ramifications of what was going to happen to him.”

On an overcast morning earlier this year, Coleman walked past his old house on the way to the corner store. But he said he could not look at it — the memories were too painful.

The Maryland company that took Coleman’s house sold it for $71,000 two months after evicting him. The company was owned by Steven Berman, who was convicted in 2008 in the Maryland bid-rigging case. He declined to comment. The law firm for Berman’s company said it was willing to reduce Coleman’s bill to $3,500 but could not reach him.

The tax office would not comment on the case, saying only that the lien would “not have been sold if the tax sale were today” because it was less than $1,000, the agency’s current threshold.

Coleman said he thought he would stay in his house for many more years, sipping cold drinks on the porch and talking to neighbors over the fence. Now, he’s in a group home one mile from the home that is no longer his.

On an overcast morning earlier this year, he walked past the old house, now boarded up, on the way to the corner store to buy margarine and a bag of sugar. He looked back briefly, then turned away.

“I have nothing,” he said.

Jennifer Jenkins, Ted Mellnik and Timothy R. Smith contributed to this report.

About this story


The Washington Post spent 10 months examining the District’s tax lien program, which has been used by the city to recover unpaid property taxes for more than 100 years.

Reporters began by examining every lien sold on properties since 2005 — 13,000 in all. About half were lifted after property owners paid their back taxes, plus interest. The rest turned into foreclosure cases, most often affecting homes in the poorest neighborhoods of the city.

Through a computer analysis, the newspaper found about 1,200 active foreclosure cases on houses, plus hundreds more affecting land, storefronts and commercial buildings.

To find the nearly 200 homes ultimately taken by investors, reporters manually combed through thousands of property records at the D.C. Recorder of Deeds and the District’s Real Property Assessment Database.

The Post also studied how much tax lien purchasers charged homeowners after they moved to foreclose in court, obtaining more than 200 fee statements from court cases, families, lawyers and housing advocates.



| UK Economy: Must we live with a post-truth media?

Must we live with a post-truth media? ~ Simon Wren-Lewis,

Something odd but familiar was going on when I wrote this post on Labour’s economic record. The Labour leader and shadow chancellor both made speeches that had apparently been months in the making, and which were (I think intentionally) spun as trying to convince voters that they could trust a future Labour government with fiscal management.

Why odd? Because it presumes that there is some real problem to solve. It presumes that the last Labour government managed the nation’s fiscal affairs very badly, and so today’s politicians have to show they would be different. Yet the paper I wrote tells a very different story. The previous Labour government set up fiscal rules that were both responsible and better than rules subsequently adopted elsewhere. Until the financial crisis, they kept to those rules. Here is the basic data: the top line is the debt to GDP ratio, the bottom line a scaled up current balance to GDP ratio.
Labour Government’s Fiscal Record: source OBR

Of course it is possible to find fault, and I do. In hindsight it would have been better if the debt to GDP ratio had been kept nearer 30% of GDP, or even reduced further. But debt to GDP was lower before the recession than when Labour took office, and the current balance was almost zero. Hardly a profligate government. Indeed one of the faults I find, over optimism in Treasury forecasts, has been fixed, to the Conservative party’s credit, with the creation of the OBR.
With the financial crisis everything changed, because this produced the Great Recession. Deficits go up in recessions. There was a small contribution from the government’s attempt to reduce the impact of the recession, an attempt which analysis suggests was successful, so they should take credit for that. It is pretty obvious that you cannot use the fact that the deficit rose in the recession to argue that Labour cannot be trusted with the public finances. Again, the data speaks – look at when the deficit rose in the past.
Of course you could say that the Great Recession was the government’s fault. It should have foreseen the financial crisis coming. It should have known that levels of GDP in 2007 were going to be interpreted, five years later, as a massive economic boom rather than as they appeared at the time as something close to trend. It should have known this, despite the advice it was getting to the contrary from the Bank of England, the IMF, OECD, most economists …. and Her Majesty’s opposition! You can take that idealist view – but not if you were agreeing with all this advice at the time.
So the idea that the last Labour government seriously mismanaged the nation’s finances is a myth. What is more, unlike older myths like the earth is flat, as these charts show it is not something that is generated by perception and which requires expertise to unravel. Unless you are completely naive about the impact of recessions on deficits, a quick look at the data tells the true story. So it is a manufactured myth that distorts what the numbers appear to show. The problem with myths is that after a time, even otherwise good journalists at good places like the Financial Times start believing them.
Now we all know who manufactured the myth. Yet I think most people believe that if a political party started telling a story that was clearly at variance with the facts, it would be found out. In short, people expect journalists and economic commentators to confront politicians who attempt to create and perpetuate myths. In this case they did not. Its also pretty obvious why they did not. The incentive for organisations like the BBC is to stay out of trouble. And who has been making most noise about bias in economic reporting – the government. As any economist will tell you, its all about incentives.

So it really is the duty of academics to speak to truth, as loudly as they can, when it is being ignored by the media. On this topic, the media in general and the BBC in particular have been hopelessly biased in allowing the government to get away with this myth. They have some serious explaining to do.

UK False Economy1

| UK Budget 2013: George Osborne is failing on his own terms!

Budget 2013: George Osborne is failing on his own terms ~ James Meadway,

Albert Einstein had a working definition of madness: doing the same thing twice, and expecting a different result the second time. I’m not sure where that leaves George Osborne, now into his fourth cuts Budget. There is something almost admirable about his dogged persistence of austerity against the siren calls of basic economic theory, assortedNobel Prizewinners, the IMF and simple brute reality to change course. But Osborne follows his own, increasingly lonely, path.

I say almost admirable. Of course there is nothing to admire in the reports of the former soldier and his wife driven to suicide after their benefits were cut, or the child starved to death in Westminster, or the 32 sick and disabled people dying every week after failing new, stringent disability tests that found them “fit to work”.

There is nothing to admire in seeing most people’s real living standards slide as the recession grinds onwards. Real average incomes have fallen some 4.5% since the crash and are forecast to fall well into the future.

There is nothing to admire, once again, in seeing a Budget that hits the poorest hardest, even according to the Treasury’s own figures. Everyone loses something under Osborne: but the poorest 40% lose more than the middle 40% (Chart 2.C). The poorest fifth of the population lose more than the average.

Osborne promised us, in his emergency Budget of June 2010, that he would deliver growth, cut the deficit, and reduce the national debt. Austerity would deliver “fiscal credibility”, attracting investment and driving the recovery. His pet forecasters, the Office for Budget Responsibility – now showing at least some signs of straining on the leash – predicted 2.8% growth for 2013 as the private sector recovered. Real incomes, they predicted, would be rising by 3.8% this year (Table 3.1). Business investment would be booming by nearly 11%.

The reality is, by now, wearily familiar. The private sector rebound simply has not happened. Business investment is down £49bn from its peak. That is feeding into a collapse in productivity, now down 12% on its pre-crisis trend. A feeble private sector has fed into falling real wages, its weakness – disastrously – reinforced by sharp cuts to public expenditure. Cuts to public spending, in a weak economy, drag the economy down further: as government spends less, the rest of us earn less, and as we earn less, we spend less: a vicious circle of decline.

Osborne, apparently realising this, has attempted to correct his folly in pushing through major cuts to capital expenditure. £2.5bn extra will now be found for capital project by slicing departmental spending still further. But while the cuts to individual departments will be severe, the impact on the whole economy will be miniscule – on the Treasury’s own impact estimates, it will add approximately 0.06% to GDP over each year. This, to use the technical term, is knack all.

Are there any positives in this? An increase in the zero income tax personal allowance to £10,000 will be welcomed by many, but of course will be overwhelmed for the poorest by the earlier VAT hike. Likewise on National Insurance Contributions. Osborne gives a little, but takes far more away.

Growth down. National debt up. Government deficit going nowhere. Industrial production down but financial services growing. Osborne has failed on every measure he set himself. Like the Bourbons, he has learned nothing and forgotten nothing. The worst Chancellor in modern British history.

nef has today released a report on how we might start to dig ourselves out of this mess. It details not just the failings of this government, but how the pursuit of austerity and the failure to recover are tied to deep, long-term problems in the British economy. We need an alternative macroeconomic strategy.

Austerity UK 1 _____________________________________________________________________



| More money than sense: Prince Alwaleed ‘Severs Ties’ With Forbes Billionaire List — Claims Bias Against Mideast Investors!

Prince Alwaleed ‘Severs Ties’ With Forbes Billionaire List — Claims Bias Against Mideast Investors ~ 

Today Forbes came out with its latest billionaires list. 

After the publication of the 2013 edition, Saudi Prince Alwaleed Bin Talal has informed the publication that he would no longer like to be included (thank-you-very-much).

According to a press release from the Prince’s investment firm, Kingdom Holding Company, he sent a letter to Steve Forbes severing his relationship with the list. That means Forbes will no longer receive information from Kingdom about its finances.

Prince Alwaleed Bin Talal Alsaud

Kingdom claims that it has discovered “what appear to be intentional biases and inconsistencies in the Forbes valuation process…”

From the press release:

Shadi Sanbar, CFO of Kingdom Holding explained, “We have worked very openly with the Forbes team over the years and have on multiple occasions pointed out problems with their methodology that need correction. However, after several years of our efforts to correct mistakes falling on deaf ears, we have decided that Forbes has no intention of improving the accuracy of their valuation of our holdings and we have made the decision to move on. KHC puts a premium on tracking the true value of our investments and it is contrary to both our practice and nature to assist in the publication of financial information we know to be false and inaccurate.”

This year Kingdom says it found four glaring errors/inconsistencies in Forbes’ reporting (from the press release):

  • A sudden refusal after six years to accept share values as listed by the TadawulSaudi Arabia’s fully regulated, 21st century, high-tech stock exchange that services the largest economy in the Middle East and is a member of the World Federation of Exchanges.
  • A completely unsupported and biased allegation based on rumors that stock manipulation “is the national sport” in Saudi Arabia because “there are no casinos.”
  • The application of differing standards of proof for different individuals and organizations resulting in an arbitrary and confusing set of standards that seems demonstrably biased against the Middle East. For example, the valuations of other emerging markets such as the Mexican stock exchange are accepted while those of the Tadawul are not.
  • Unexplained and purely arbitrary discounts applied to holdings not backed up by brokerage statements when pre-IPO investments such as those in Twitter and China’s 360Buy would not appear on any brokerage statement, and after impressing on Forbes that KHC’s investments are covered by confidentiality agreements.

The real killer here is at the end of the release where Kingdom says that it will continue to work with Forbes’ rival list, the Bloomberg Billionaires List, since they ” use a more accurate method of calculating financial holdings.”


Prince Alwaleed

Forbes responded to these allegations in an e-mail to Business Insider saying, “Prince Alwaleed has issued a press release in response to fact-checking questions from Forbes. For our 27th annual Billionaires ranking, released today, Forbes has listed Alwaleed at $20 billion, which is $2 billion more than what he was listed at last year but $9.6 billion less than he claims he is worth. Forbes has been investigating the prince’s finances for several years, and will detail its findings in a feature story in the magazine, which will be released online tomorrow morning.”

Check out some screenshots of Kingdom’s press release below:


Prince Alwaleed Press release page 1

Kingdom Holding Company



Prince Alaweed press release

Kingdom Holding Company




common sense001

| Osborne’s obduracy’s backfired: 10 steps to kickstart the UK economy!

10 steps to kickstart the UK economy ~




The human cost of George Osborne‘s austerity politics is too high. We need to invest in jobs and increase benefits.

George Osborne

‘The news is not good for George Osborne just two weeks before his budget statement.’ Photograph: Peter Macdiarmid/Getty Images

The loss of the UK’s triple-A rating, an economy teetering on the brink of a triple-dip recession and a deficit growing rather than shrinking – the news is not good for George Osborne just two weeks before his budget statement.

But before I risk evoking sympathy for the chancellor, it’s worth remembering that the human cost of his failing austerity policies is not merely reputational but material for millions of people. Increasing numbers of people are finding it impossible to make ends meet – with over 6 million unemployed or underemployed, hundreds of thousands dependent on food banks, and child poverty rising again.

So here is a 10-point plan to boost the economy in the public interest, in place of the government’s failing approach:

1. Break the pay freeze

Pay across all sectors has risen below inflation in the last four years – taking £50bn out of workers’ pockets. For the 250,000 public servants I represent it means they are more than £1,200 a year worse off. These real-term pay cuts are forcing millions to cut back on their spending, denting economic demand and forcing thousands deeper into debt and payday loan lenders. It would also reduce public spending on tax credits and housing benefit – 93% of new housing benefit claimants in the last two years have been in work.

2. Increase the minimum wage

The value of the minimum wage has been allowed to drop in recent years. If it had kept pace with inflation, it would be more than 6% higher. People on low incomes spend their wages because they need to – it prevents poverty – which puts money back into our economy.

3. Stop cutting jobs

Over 300,000 public sector jobs, including 75,000 in the civil service, have been cut under the coalition government. This has damaged local services and caused hardship for many of those without work. But public jobs also save money, and lives – the knock-on effects of public sector job cuts are visible and costly: mistakes are made due to higher workloads, fraud increases, standards of care and cleanliness fall in the NHS, emergency services don’t reach people in time.

4. Cap rents, not benefits

Housing benefit levels (around £23bn per year) are a national scandal. But the problem isn’t tenants, it’s landlords. By capping the level of rents we would save not only billions in housing benefit, but also thousands for private tenants to spend in the economy too.

5. Invest – and yes, that means borrowing more

The chancellor previously prioritised our credit rating because it influences the interest rate at which we can borrow. With historically low rates, the government should be borrowing to invest in job-creating opportunities: primarily house-building and renewable technology.

6. Scrap the work programme and increase benefit levels

Assessments of the government’s flagship welfare-to-work programme show that it is worse than doing nothing. Forcing people into workfare reduces work for those who want it and, as the DWP’s own studies show, is counterproductive in weak labour markets. The welfare state should not be providing free labour to profitable multinationals – if companies can provide work placements, they should be paid at the going rate. For people on social security, benefit levels have lost real value: in 1979 unemployment benefit was worth 21% of average earnings, today it’s just 11%. If we raised it to 21% again jobseeker’s allowance would be £130 a week instead of the measly £71 it currently is.

7. Nationalise the banks

The banks, still propped up with public money and many with large public shares, must be taken into public ownership. The bloated banking sector was the cause of the crisis, and still represents the largest systemic threat to relapsing into crisis. We support the TUC policy to bring the banks into publicownership (pdf). By controlling the banks we can cap bonuses, clamp down on tax dodging, end the inflated pay deals and direct investment to socially useful and job-creating schemes.

8. Scrap Trident

To say Trident is a necessary deterrent to defend our national security rather begs the question of why Germany and Japan haven’t been invaded, since their larger economies possess no nuclear weapons – and neither does more than 90% of the world. Our nuclear weapons suck in billions of public money and some of our best engineers and scientists. These resources can be put to much more socially beneficial use.

9. Close the tax gap

Thanks to the high-profile activities of UK Uncut and others, tax avoidance and evasion has even been described by David Cameron and Osborne as “morally wrong” and “morally repugnant”. Yet their government continues to cut jobs and resources from HM Revenue and Customs. Our research with the Tax Justice Network suggests that £120bn in tax is evaded, avoided and left uncollected each year – dwarfing benefit fraud by a ratio of nearly 100 to 1.

10. Reverse the tax cuts for millionaires

From April this year the government will give those earning over £150,000 per year a tax break worth £3bn. While we’re at it, the corporation tax cuts should also be reversed – we already had the lowest rate in the G7, so largesse to the corporate sector is not a priority.


UK Economic Woe