Down by Law: Vulture Funds Feeding on the Dispossessed

Written by Chris Floyd 18 November 2011 6994 Hits

I am glad to see the renewal of interest in "vulture funds," where predatory elites buy up bits of the debt of impoverished nations from various creditors – at pennies on the dollar – then use the courts of the 'developed,' 'civilised' world to force the debtor to cough up the full amount, plus punitive interest payments. The Guardian is running a series of articles on this heinous practice (here, here, here, here, here, here and here), and CounterPunch has a good piece as well.

I wrote about vulture funds back in 2007. This was one of the many posts which were destroyed in the many hack attacks on the website. So I'm taking the opportunity to re-post it full here, as background to the new push to combat these avid feasters on human misery.


Down By Law: Vulture Funds Feeding on the Dispossessed

(March 2007)

I. The Lessons of Civilization

Every day, millions of people around the world are taught hard truths about how the instruments of "civilization" are used to help the powerful at the expense of the deprived. They see the brutal hypocrisy behind the soaring rhetoric of noblesse oblige that issues from the citadels of wealth and privilege. They see, and learn, that raw self-interest is the true coin of the global realm; they see it in the ruins of their own lives and in the blighted futures of their children. Is it any wonder, then, that many of them come to reject the putative offerings of civilization and embrace extremist or nihilistic or "asymmetrical" responses to their distress?

Every instance of systemic or institutional injustice contributes to the growing instability of the world community, to the violence and corruption and despair that howl outside the shrinking "Green Zones" of prosperity and security in the developed nations. This holds true at every level, from the vast and glaring crime of aggressive war, as in Iraq, to obscure rulings on arcane points of international finance – as in a London courtroom last month, when the British High Court upheld the right of a well-connected financial predator to feast on one of the world's poorest nations.

The case involved the little-known but highly lucrative world of "vulture funds" – or as its practitioners prefer to call it, the "secondary market in sovereign debt." It works like this: private investors buy up bits of the debt of impoverished nations from various creditors – at pennies on the dollar – then go to court to force the debtor to cough up the full amount, plus punitive interest payments. In the London case, a New York vulture named Michael Sheehan and his off-shore, UK-registered front company, Donegal International, were trying to turn a $.3.3 million debt purchase into a $55 million profit bonanza squeezed out of the Zambian people, some of the poorest on earth. Donegal won the case, even though Justice Andrew Smith ruled that Sheehan and one of his associates "were at times being deliberately evasive and even dishonest" in their testimony, as the Financial Times reports.

The amount Donegal is asking for would effectively wipe out the debt relief Zambia would have received this year from the deal signed at the famous "Live 8" summit in Scotland in 2005, when the G-8 nations agreed – amidst much harrumphing self-congratulation – to a large-scale debt relief and restructuring program for poorer countries. Zambia had earmarked the relief money for health programs and education, in a country where the life expectancy is 37, more than half a million children have been orphaned, and 1 in 5 adults have HIV, as Oxfam reports.

Justice Smith indicated that it is unlikely he will grant the company the full whack of $55 million when he makes his final ruling later this month; indeed, Smith made clear his distaste for the enterprise, but said current law compelled a ruling on behalf of the vultures. Even so, Sheehan and the boys will still walk away with a hefty profit – and many Zambians will die of disease or sink further into poverty and ignorance as a result. Meanwhile, some of Zambia's assets have been frozen until the final amount is set and the payoff to Donegal discharged, causing further financial distress to the poverty-wracked country, which is trying to emerge from the shadow of the corrupt and undemocratic regime that took on many of the onerous debts.

Although there are some novel elements to the Donegal-Zambia case, in many respects it is a typical example of how vulture funds use legal back alleys to profit from human misery. Donegal – a British Virgin Islands incorporation of Sheehan's U.S.-based firm, Debt Advisory International – uses all the tricks of the trade, including highly-placed political influence. For years, DAI paid huge fees to the lobbying firm of Jack Abramoff – the convicted wheeler-dealer at the center of the Republican Party's fund-raising (and fund-shuffling) apparatus, a man who had direct entrée to the White House before his current turn in prison stripes took him out of Beltway circulation.

And Donegal, like all vulture funds, preys on poor nations that are undergoing restructuring or forgiveness of debt. They pluck off small chunks of outstanding debt here and there – the Zambia case stemmed from Donegal's purchase of a 1979 loan from then-Communist Romania to Zambia to buy tractors – then, through the vagaries of financial law, they can hold up major debt relief until they reap vast profits from their miniscule share. Debtor nations are thus blackmailed into settling with the vultures in order to clear the way for large-scale initiatives like the G8 measures to take effect.

But Donegal's squeeze play on Zambia is actually rather mild compared to the operations of one of the giants in the field, a pioneer in global vulturing: Elliott Associates L.P., a New York-based hedge fund established by Paul Singer. In addition to managing $6 billion in assets for Elliott, Singer doubles as a major moneybags for the Republican Party. As Greg Palast reported last month on BBC's Newsnight, Singer has been George W. Bush's biggest donor in New York City – no mean feat among the Wall Street kingpins of whom Bush said in 2000: "Some people call you the elites; I call you my base." Singer has given Bush and the Republicans more than $1.7 million since that disputed 2000 race – and is now a top fundraiser for GOP presidential candidate Rudy Giuliani, promising to raise $15 million to put all of America on "Giuliani Time," as Palast reports.

Currently, Singer is hoping to litigate a $10 million purchase of Congo-Brazzaville debt into a $400 million payday – a magnificent profit to be wrung from the populace of yet another of the poorest nations on earth. And this latter point – the real targets of vulture funds – should be kept in mind For although it's true that the debts of these distressed nations are often run up by corrupt regimes – often in collusion with the lofty financial institutions of the civilized world, or with governments of the "developed" nations seeking political advantages for themselves or financial gain for their cronies – it is the ordinary people who pay the price when these bad debts come due.

But it was Singer's assault on Peru in 2000, with its hardball tactics of legally sanctioned extortion, that has proven to be the classic of the genre, clearing the path for a flock of vultures to swoop down from the financial heights and feed on the carcasses of ruined economies.

Singer put a new twist on an old piece of legal boilerplate – the "pari passu" clause – that had been part of debt instruments for more than a century, as Charles D. Schmerler notes in the New York Law Journal. The clause essentially means that all creditors of the debtor nation must be treated equally. When Peru, which had been devastated by the financial crises that shook global markets in the 1990s, struck a deal with governmental and private creditors that would allow it to manage some $3.7 billion in reduced debts, Singer – who had bought $20 million of Peruvian debt for $11 million on the secondary markets – refused to go along. Under pari passu, Singer said, it didn't matter that the other creditors were willing to restructure Peru's debt; he was their equal (despite the minor chunk he owned), and so his needs must also be met. After losing one round, he found friendly courts in America and Belgium that agreed and declared that Peru's debt relief program could not go through until Singer was paid – not just the $20 million he had purchased at knock-down prices, but an extra $38 million in capitalized interest as well. What's more, Peru's assets were frozen until the vulture got his feed. The country was unable to pay its other creditors under the $3.7 billion restructuring, and was thus in danger of defaulting on the new deal, which would have had catastrophic effects.

Peru fought the case but could make no headway against the multibillion-dollar deep pockets of Elliott Associates. Finally, just before defaulting, it bowed to main force and paid Singer the full $58 million. (The strongarm boodle arrived in Singer's coffers on October 7, 2000 – just in time for the home stretch of Bush's presidential run and the successful machinations that followed his second-place finish.) What's more, as Schmerler notes, the Elliott rulings have destabilized the entire structure of international debt relief, giving vultures a new weapon to hijack major restructuring programs and shake down cash-strapped debtors.

II. Broken Mercy

But let's be clear about one thing. What the vultures are doing is legal. They are building on two decades of precedents in which Western courts have "all but abandoned the protections against liability previously afforded sovereign (nations)," as Schmerler writes. "The debate now centers firmly on issues of enforcement."

And here we see financial law echoing long-running trends in foreign policy and domestic governance: first, the steady erosion of the idea of national sovereignty in the face of bristling official doctrines of military "pre-emption," then the equally relentless encroachment on individual liberties – personal sovereignty – in the Anglo-American "homelands." In these areas too, the debate centers firmly on "enforcement": What country do we strike next? Which freedom should we curtail now? Are there any limits to the powers of the "unitary executive" to spy and torture and jail indefinitely as he sees fit? The rise of the vultures is of a piece with this growing institutional bias toward authoritarianism and punishment. The quality of mercy is increasingly strained, often to the breaking point.

Taking advantage of this draconian zeitgeist, the vultures operate profitably in the moral murk that shrouds the system of international debt. As noted, the debts accrued by poor nations are often the result of foolish or venal choices by despots (and a willing lack of due diligence by lenders). But it is hard to prove that a given debt is, technically, an "odious debt" – financial obligations "knowingly contracted without the consent of a population and without benefit to it," as New York attorney Jeff King told me. Odious debts are more narrowly defined than vulture funds. But with the standard practice of "developed" governments pushing arms deals and cozy arrangements for cronies on corrupt or unstable Third World regimes, the line marking off "odious debt" is vague indeed.

"Vulture funds may be morally odious, but the debts they enforce are not necessarily odious debts," said King, a research fellow at the Center for International Sustainable Development Law. "For example, the original debts in the Donegal case were meant for the purchase of agricultural machinery from Romania for the use of Zambia, a seeming benefit. Zambia later defaulted on that debt, and Romania sold it to Donegal."

Ironically, Donegal stepped in to buy the debt just before Zambia itself was about to redeem it. The original 1979 debt had a face value of $15 million; Romania had agreed to accept $3 million for it in 1999. Then Donegal intervened, offering approximately $3.3 million for the debt. In last week's court hearing, Zambia – whose case, in a further irony, was argued by Tony Blair's older brother, William – charged that "Donegal's local agent had bribed civil servants to pass the debt to Donegal rather than allowing Zambia to pay it off at a heavily discounted rate to Romania," the FT reports. But the court ultimately rejected the bribery charges.

"Thus the debt generated legally by Donegal was itself not necessarily odious in the technical sense," King said. "The moral outrage generated by this case is that Donegal seeks to realize an enormous profit at the expense of Zambia's desperate population."

That indeed is the crux of the matter: the disparity between the legality of vulture funds and the immorality of their pernicious effects on the world's most vulnerable people. It is this brutal disparity that teaches the dispossessed of the world the true meaning of the fine words that flow from the mouths of the powerful. "Blowback" doesn't always come from the launching of reckless wars or other high-profile depredations; it can also come from the sight of one's child dying of a preventable disease, while the guardians of civilization reward predators armed with the rule of law.

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Last Call: A Farewell Interview with Cindy Sheehan

Written by Chris Floyd 16 November 2011 5622 Hits

 I had the pleasure and privilege of doing an interview with Cindy Sheehan on her radio show not long ago. She is, of course, one of the original modern 'Occupiers,' having "occupied" public space outside the fake dude ranch of George W. Bush (and other spaces) in the heroic attempt to force the twerpish little errand boy of empire to explain why America was waging aggressive war in Iraq -- a war that took the life of Sheehan's son, and shocked her into the life of dissent and activism that she carries on, bravely, today.

The interview can be heard here. I don't know how interesting or even coherent it is on my part. It was recorded the night my father died, a few hours before he slipped away. (I had already booked my overseas flight to say goodbye; I didn't make it.) But I do remember that Cindy had many good insights to offer, so it should be worth hearing for that, at least.

This also happens to be my swan song on radio. It's not a forum that I've ever been comfortable with or good at, so after years of blathering on nervously to hosts who were almost always more interesting and informed than I was (like Cindy or Scott Horton at Antiwar.com), I've decided to hang it up at last.  Anyway, here it is. And many thanks to Cindy for having me on the show.

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Reality Check: Practical Protestors and Extremist Elites

Written by Chris Floyd 15 November 2011 6027 Hits

A billionaire media baron presiding over a deeply corrupt plutocratic government -- no, not Berlusconi; Bloomberg -- has swept in to crush a small protest movement that dared question the legitimacy and efficacy of the ruling oligarchy. The 'ideological cleansing' of Zuccotti Park -- in the dead of night, with no warning, by hordes of heavily armed police, and the press literally penned up far from the action, all in the classic police-state style to which most Americans seem happily habituated -- is a temporary setback to the Occupy movement in New York.

But over in London, where -- at this writing at least -- the Occupiers are still firmy ensconced before St. Paul's Cathedral, John Gray has some thoughts on the movement's implications. From the Guardian:

The Occupy movements have been attacked for being impractical visionaries. In fact it is the established political classes of the west that are wedded to utopian thinking, while the protesters are recalling us to the actualities of human experience. Based on economic theories that left out human beings, the global free market was supposed to be self-regulating. Now a process of disintegration is under way, in which the structures set up in the post-cold-war period are visibly breaking up.

Anyone with a smattering of history could see that the hubristic capitalism of the past 20 years was programmed to self-destruct. The notion that the world's disparate societies could be corralled into a worldwide free market was always a dangerous fantasy. Opening up economies throughout the world meant ordinary people were more directly exposed to the gyrations of market forces than they had been for generations. As it overthrew existing patterns of life and robbed large numbers of people of any security they might have achieved, global capitalism was bound to trigger a powerful blowback.

For as long as it was able to engineer an illusion of increasing prosperity, free-market globalisation was politically invulnerable. When the bubble burst, the actual condition of the majority was laid bare. In the US a plantation-style economy has come into being, with debt-servitude for the many coexisting with extremes of volatile wealth for the few. In Europe the muddled dream of a single currency has resulted in social devastation in Greece, mass unemployment in Spain and other countries, and even, for some, reversion to a life based on barter: sucking society into a vortex of debt deflation, austerity policies are driving a kind of reverse economic development. In many countries a settled bourgeois existence – supposedly the basis of popular capitalism – has become an impossible aspiration. Large numbers are edging closer to poverty and a life without hope. ...

The demands of the Occupy movement may be inchoate, or else conflicting. But it is not the protesters who threaten the world economy. The danger comes from denying the fact of systemic crisis. By trying to prop up a system that is chronically dysfunctional, our rulers are making a cataclysmic collapse more likely. ...The people camped outside St Paul's may have no clear solutions. But it is they – not ruling elites in thrall to a defunct market utopia – who are engaging with reality.

** Photos of Occupy London site by Avalon Floyd.

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Gonna Change My Way of Thinking: OWS Opening Jaded Eyes

Written by Chris Floyd 13 November 2011 6231 Hits

My old Moscow Times colleague, Matt Taibbi, has this to say about Occupy Wall Street:

I have a confession to make. At first, I misunderstood Occupy Wall Street ...  there were scads of progressive pundits like me who wrung our hands with worry that OWS was playing right into the hands of assholes like Krauthammer. Don't give them any ammunition! we counseled. Stay on message! Be specific! We were all playing the Rorschach-test game with OWS, trying to squint at it and see what we wanted to see in the movement. Viewed through the prism of our desire to make near-term, within-the-system changes, it was hard to see how skirmishing with cops in New York would help foreclosed-upon middle-class families in Jacksonville and San Diego.

What both sides missed is that OWS is tired of all of this. They don't care what we think they're about, or should be about. They just want something different.

We're all born wanting the freedom to imagine a better and more beautiful future. But modern America has become a place so drearily confining and predictable that it chokes the life out of that built-in desire. Everything from our pop culture to our economy to our politics feels oppressive and unresponsive. We see 10 million commercials a day, and every day is the same life-killing chase for money, money and more money; the only thing that changes from minute to minute is that every tick of the clock brings with it another space-age vendor dreaming up some new way to try to sell you something or reach into your pocket. The relentless sameness of the two-party political system is beginning to feel like a Jacob's Ladder nightmare with no end; we're entering another turn on the four-year merry-go-round, and the thought of having to try to get excited about yet another minor quadrennial shift in the direction of one or the other pole of alienating corporate full-of-shitness is enough to make anyone want to smash his own hand flat with a hammer.

If you think of it this way, Occupy Wall Street takes on another meaning. There's no better symbol of the gloom and psychological repression of modern America than the banking system, a huge heartless machine that attaches itself to you at an early age, and from which there is no escape. ...

That, to me, is what Occupy Wall Street is addressing. People don't know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.

There was a lot of snickering in media circles, even by me, when I heard the protesters talking about how Liberty Square was offering a model for a new society, with free food and health care and so on. Obviously, a bunch of kids taking donations and giving away free food is not a long-term model for a new economic system.

But now, I get it. People want to go someplace for at least five minutes where no one is trying to bleed you or sell you something. It may not be a real model for anything, but it's at least a place where people are free to dream of some other way for human beings to get along, beyond auctioned "democracy," tyrannical commerce and the bottom line.

We're a nation that was built on a thousand different utopian ideas, from the Shakers to the Mormons to New Harmony, Indiana. It was possible, once, for communities to experiment with everything from free love to an end to private property. But nowadays even the palest federalism is swiftly crushed. If your state tries to place tariffs on companies doing business with some notorious human-rights-violator state – like Massachusetts did, when it sought to bar state contracts to firms doing business with Myanmar – the decision will be overturned by some distant global bureaucracy like the WTO. Even if 40 million Californians vote tomorrow to allow themselves to smoke a joint, the federal government will never permit it. And the economy is run almost entirely by an unaccountable oligarchy in Lower Manhattan that absolutely will not sanction any innovations in banking or debt forgiveness or anything else that might lessen its predatory influence.

...People want out of this fiendish system, rigged to inexorably circumvent every hope we have for a more balanced world. They want major changes. I think I understand now that this is what the Occupy movement is all about. It's about dropping out, if only for a moment, and trying something new, the same way that the civil rights movement of the 1960s strived to create a "beloved community" free of racial segregation. Eventually the Occupy movement will need to be specific about how it wants to change the world. But for right now, it just needs to grow. And if it wants to sleep on the streets for a while and not structure itself into a traditional campaign of grassroots organizing, it should. It doesn't need to tell the world what it wants. It is succeeding, for now, just by being something different.

Or as I said a few weeks ago, here:

... I will say that I've been surprised by the hostile reaction of many who count themselves rock-ribbed dissidents against the imperial warmaking corporcracy to a movement that is doing what so many dissidents have dreamed of for years: refusing to acknowledge the system's authority and legitimacy, and exploring alternatives to the rapacious, bloodsoaked brutality of our global elites.

As for me -- and again, this is just my personal opinion -- I'm glad about the Occupy movement. I'm glad to see sparks and glimmers and partial, provisional expressions of some of my own most deeply held principles showing up here and there on the streets of the world. I hope the movement keeps growing, I hope it stays chaotic -- I hope it gets even weirder. I hope it continues to make the comfortable uncomfortable, to the greatest degree possible. ...

And here:

The Occupation movement, which has erupted across the world this year -- and is now spreading through the United States from the epicenter of Wall Street -- is not the Sixties come again. It might, in small part, build upon some of the fragments left by that now long-dimmed eruption -- and others that came before it in history. After all, as the Preacher says, there is nothing new under the sun. But of course to the young, everything is authentically, genuinely, thrillingly new: a leap into the unknown, exhilarating, bewildering, vivid.

Yet whatever it antecedents, the Occupation movement is in essence, and in practice, very much its own thing, its own moment, its own upsurging through the silt into the open air. It will make its own breakthroughs, its own spectacular mistakes, its own many permutations, all formed by the younger generation's unique experiencing of the world -- which older generations can never fully know, having been formed in a different time, under different conditions.

Today, due to the intolerable pressures from the heaped-up follies and failures of the past, the times have been torn open in a special way, and there is now a chance for new energies, new approaches and understandings to pour in. It's time for us, the older generations, to give way to this new energy -- supporting and helping it as far as we are able, but with the realization that it is not ours to direct or shape or scold or instruct ....

We have had our future, but it's over; we have used it up, and, in so many ways, botched and wasted it; the future now belongs to the young. The kairotic moment of the Occupation movement is theirs, to make of it what they can. It won't be easy -- it may be more difficult, even more horrific than anyone can envision, as the powers that be strike back with growing force against this unexpected, leaderless, shape-shifting challenge to the dead hand of their corrupt dominion. The dangers are great; but this moment -- this opening, this rip in time -- is alive with rare promise.

And finally, just for the hell of it, and because I mean it, I'll say this again:

 

Just One Plank by Chris Floyd

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Profits of Doom: Managed Democracy on the March

Written by Chris Floyd 11 November 2011 6245 Hits

Thomas Jones, at LRB, says what I wanted to say about the exit of the plutocratic goon Silvio Berlusconi from his post as Italian prime minister:

At last Berlusconi has said he’ll step down. It should be a good day for Italian democracy. Except that – assuming he really does go – Italy’s longest serving postwar prime minister will have been finally driven from office not for corruption, croneyism, tax evasion or colluding with the mafia; not for the conflict of interests between his media empire and his political position; not for having presided over years of economic stagnation, rising unemployment and crumbling public services, and otherwise generally enriching himself at (almost) everyone else’s expense; not for his outspoken xenophobia, sexism and homophobia; and not even for having sex with underage prostitutes; but because the EU, the IMF and the bond markets think he can’t be trusted to push through the austerity regime they want Italy to enforce, which will almost certainly make everything even worse.

Exactly. Berlusconi's fate was sealed when Italian bonds broke the 7 percent mark, thereby threatening to lower, slightly, the gargantuan profit margins of the rapacious speculators who gorge themselves on chaos and suffering. The high crimes and low comedy (to coin a phrase) of his years in power never troubled the great and good (such as the saintly Tony Blair, who used to fly down for personal holidays with the Big Bunga-Bunga); but put a crimp in their bottom lines, and see how fast they turn on you.

Now the Italian government is to be led by a "technocrat" -- i.e., an unelected apparatchik of the global financial elite. Just as in Greece, where a regime change was imposed after the elected leader had the temerity -- the unmitigated gall -- to suggest asking the Greek people if they approved the savage gutting of their society to preserve the profits of our gilded gorgers. Democracy -- in Greece? Outrageous! Well, he's gone now, and an American-educated elitist apparatchik has been appointed -- not elected -- in his place. It's the very latest in "managed democracy": no muss, no fuss, no messy voting!

This kind of thing couldn't happen in the United States, of course. Next year, Americans will proudly uphold their ancient principles of popular democracy by going to the polls and ... er ... choosing between two apparatchiks of the financial elite to serve as lackey-in-chief of the plutocracy. Pericles must be proud.

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The Dark Weight of Night

Written by Chris Floyd 10 November 2011 5543 Hits

One day several years ago, I was killing time -- and trying to cool my nerves -- before a job interview. I was wandering in a bookstore, leafing idly through this book and that, when I came across a slim volume called "Responsibility to Awe." It was poetry by someone named Rebecca Elson.

I read a few of the poems, and liked them. Then I looked at the back and saw that she had died not long before, at 39, of lymphoma. This had special resonance to me, for personal reasons, but other parts of her biography were striking as well. She had been an astronomer, born in Canada and ending her career at Cambridge. She studied "dark matter," the invisible, mysterious substance -- known only by inference from its effects on other matter -- which is believed to make up the bulk of the universe, holding it together. And, as the book bio said, her work "also focused on globular clusters, teasing out the history of stellar birth, life and death."

I bought the book, which also contained a long section from her journals, and poems in manuscript, and other fragments. Not long after, this song came to me. I recorded the very rough sketch here in a back room a couple of years ago; one of these days, I'll do it up right maybe, and do her more justice.

Rebecca by Chris Floyd


Rebecca

No more words, Rebecca,
From your mouth or your pen.
The sky is closed, Rebecca,
Those stars won't shine again.
It's all gone wrong, Rebecca,
But that's the way it always goes.
Give me your book, Rebecca,
And let me hold you close.

Another man, Rebecca,
Knew the lightning in your eyes.
He felt your heart beneath him
As it yearned toward the skies.
Now he's lost, Rebecca,
The silk has fallen through his hands.
The last wave, Rebecca,
Has washed it from the sands.

In the farthest reaches
Where the first ray of light
Sends its echo to us
Through the dark weight of night,
Are you there, Rebecca,
Like a fire in the mind,
In the sparks that glisten
On the water and the wine?

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Libya: The Lies That Launched Another War

Written by Chris Floyd 10 November 2011 9482 Hits

Hugh Roberts' new article in the London Review of Books is the best story I have yet read about the war of regime change in Libya. It is meticulously detailed, rich in context -- historical, cultural, political -- carefully measured and soberly expressed.

The article should be read in full -- anyone who cares at all about a deeper understanding of these events would be foolish to miss it -- but I want to highlight just one aspect: the deliberate falsehoods -- fanned by the media, including many "progressive" voices -- which were used as a justification for the Western military intervention.

Roberts first details how the Western powers and the Libyan rebels repeatedly rejected all opportunities for a ceasefire in the conflict -- despite the fact that a ceasefire was the first and chief demand of the UN resolution used as the authorization for the Western attacks:

Resolution 1973 was passed in New York late in the evening of 17 March. The next day, Gaddafi, whose forces were camped on the southern edge of Benghazi, announced a ceasefire in conformity with Article 1 and proposed a political dialogue in line with Article 2. What the Security Council demanded and suggested, he provided in a matter of hours. His ceasefire was immediately rejected on behalf of the NTC by a senior rebel commander, Khalifa Haftar, and dismissed by Western governments. ‘We will judge him by his actions not his words,’ David Cameron declared, implying that Gaddafi was expected to deliver a complete ceasefire by himself: that is, not only order his troops to cease fire but ensure this ceasefire was maintained indefinitely despite the fact that the NTC was refusing to reciprocate. Cameron’s comment also took no account of the fact that Article 1 of Resolution 1973 did not of course place the burden of a ceasefire exclusively on Gaddafi.  ...

London, Paris and Washington could not allow a ceasefire because it would have involved negotiations, first about peace lines, peacekeepers and so forth, and then about fundamental political differences. And all this would have subverted the possibility of the kind of regime change that interested the Western powers. The sight of representatives of the rebellion sitting down to talks with representatives of Gaddafi’s regime, Libyans talking to Libyans, would have called the demonisation of Gaddafi into question. The moment he became once more someone people talked to and negotiated with, he would in effect have been rehabilitated. And that would have ruled out violent – revolutionary? – regime change and so denied the Western powers their chance of a major intervention in North Africa’s Spring, and the whole interventionist scheme would have flopped. The logic of the demonisation of Gaddafi ... meant that Gaddafi was banished for ever from the realm of international political discourse, never to be negotiated with, not even about the surrender of Tripoli when in August he offered to talk terms to spare the city further destruction, an offer once more dismissed with contempt. And this logic was preserved from start to finish, as the death toll of civilians in Tripoli and above all Sirte proves. The mission was always regime change, a truth obscured by the hullabaloo over the supposedly imminent massacre at Benghazi.

Here Roberts gets to the crux of the matter: the lie that launched the wider war.

The official version is that it was the prospect of a ‘second Srebrenica’ or even ‘another Rwanda’ in Benghazi were Gaddafi allowed to retake the city that forced the ‘international community’ (minus Russia, China, India, Brazil, Germany, Turkey et al) to act. What grounds were there for supposing that, once Gaddafi’s forces had retaken Benghazi, they would be ordered to embark on a general massacre?

Gaddafi dealt with many revolts over the years. He invariably quashed them by force and usually executed the ringleaders. The NTC and other rebel leaders had good reason to fear that once Benghazi had fallen to government troops they would be rounded up and made to pay the price. So it was natural that they should try to convince the ‘international community’ that it was not only their lives that were at stake, but those of thousands of ordinary civilians. But in retaking the towns that the uprising had briefly wrested from the government’s control, Gaddafi’s forces had committed no massacres at all; the fighting had been bitter and bloody, but there had been nothing remotely resembling the slaughter at Srebrenica, let alone in Rwanda. The only known massacre carried out during Gaddafi’s rule was the killing of some 1200 Islamist prisoners at Abu Salim prison in 1996. This was a very dark affair, and whether or not Gaddafi ordered it, it is fair to hold him responsible for it. It was therefore reasonable to be concerned about what the regime might do and how its forces would behave in Benghazi once they had retaken it, and to deter Gaddafi from ordering or allowing any excesses. But that is not what was decided. What was decided was to declare Gaddafi guilty in advance of a massacre of defenceless civilians and instigate the process of destroying his regime and him (and his family) by way of punishment of a crime he was yet to commit, and actually unlikely to commit, and to persist with this process despite his repeated offers to suspend military action.

There was no question of anything that could properly be described as ethnic cleansing or genocide in the Libyan context. All Libyans are Muslims, the majority of Arab-Berber descent, and while the small Berber-speaking minority had a grievance concerning recognition of its language and identity (its members are Ibadi, not Sunni, Muslims), this was not what the conflict was about. The conflict was not ethnic or racial but political, between defenders and opponents of the Gaddafi regime; whichever side won could be expected to deal roughly with its adversaries, but the premises for a large-scale massacre of civilians on grounds of their ethnic or racial identity were absent. All the talk about another Srebrenica or Rwanda was extreme hyperbole clearly intended to panic various governments into supporting the war party’s project of a military intervention in order to save the rebellion from imminent defeat.

Why did the panic factor work so well with international, or at any rate Western, public opinion and especially governments? ... I believe the answer is that Gaddafi had already been so thoroughly demonised that the wildest accusations about his likely (or, as many claimed, certain) future conduct would be believed whatever his actual behaviour. This demonisation took place on 21 February, the day all the important cards were dealt.

On 21 February the world was shocked by the news that the Gaddafi regime was using its airforce to slaughter peaceful demonstrators in Tripoli and other cities. The main purveyor of this story was al-Jazeera, but the story was quickly taken up by the Sky network, CNN, the BBC, ITN et al. Before the day was over the idea of imposing a no-fly zone on Libya was widely accepted, as was the idea of a Security Council resolution imposing sanctions and an arms embargo, freezing Libya’s assets and referring Gaddafi and his associates to the ICC on charges of crimes against humanity. Resolution 1970 was duly passed five days later and the no-fly zone proposal monopolised international discussion of the Libyan crisis from then on.

Many other things happened on 21 February. ...The minister of justice, Mustafa Abdul Jalil, resigned ... Two airforce pilots flew their fighters to Malta claiming they did so to avoid carrying out an order to bomb and strafe demonstrators. By late afternoon regime troops and snipers were reliably reported to be firing on crowds in Tripoli. ... The European Union condemned the repression, followed by Ban Ki-moon, Nicolas Sarkozy and Silvio Berlusconi. Ten Egyptians were reported to have been killed by armed men in Tobruk. William Hague, who had condemned the repression the previous day (as had Hillary Clinton), announced at a press conference that he had information that Gaddafi had fled Libya and was en route to Venezuela. The Libyan ambassador to Poland stated that defections from the armed forces as well as the government could not be stopped and Gaddafi’s days were numbered. Numerous media outlets carried the story that Libya’s largest tribe, the Warfalla, had joined the rebellion.

Libya’s ambassadors to Washington, India, Bangladesh and Indonesia all resigned, and its deputy ambassador to the UN, Ibrahim Dabbashi, rounded off the day by calling a news conference at Libya’s mission in New York and claimed that Gaddafi had ‘already started the genocide against the Libyan people’ and was flying in African mercenaries. It was Dabbashi more than anyone else who, having primed his audience in this way, launched the idea that the UN should impose a no-fly zone and the ICC should investigate Gaddafi’s ‘crimes against humanity and crimes of war’.

At this point the total death toll since 15 February was 233, according to Human Rights Watch. The Fédération Internationale des Droits de l’Homme suggested between 300 and 400 (but it also announced the same day that Sirte had fallen to the rebels). We can compare these figures with the total death toll in Tunisia (300) and Egypt (at least 846). We can also compare both HRW’s and FIDH’s figures with the death toll, plausibly estimated at between 500 and 600, of the seven days of rioting in Algeria in October 1988, when the French government rigorously refrained from making any comment on events. But the figures were beside the point on 21 February; it was impressions that counted. The impression made by the story that Gaddafi’s airforce was slaughtering peaceful protesters was huge, and it was natural to take the resignations of Abdul Jalil and the ambassadors, the flight of the two pilots, and especially Dabbashi’s dramatic declaration about genocide as corroborating al-Jazeera’s story.

Goodies and baddies (to use Tony Blair’s categories) had been clearly identified, the Western media’s outraged attention totally engaged, the Security Council urgently seized of the matter, the ICC primed to stand by, and a fundamental shift towards intervention had been made – all in a matter of hours. And quite right too, many may say. Except that the al-Jazeera story was untrue, just as the story of the Warfalla’s siding with the rebellion was untrue and Hague’s story that Gaddafi was fleeing to Caracas was untrue. And, of course, Dabbashi’s ‘genocide’ claim was histrionic rubbish which none of the organisations with an interest in the use of the term was moved to challenge. [Italics added.]

These considerations raise awkward questions. If the reason cited by these ambassadors and other regime personnel for defecting on 21 February was false, what really prompted them to defect and make the declarations they did? What was al-Jazeera up to? And what was Hague up to? A serious history of this affair when more evidence comes to light will seek answers to these questions. But I don’t find it hard to understand that Gaddafi and his son should suddenly have resorted to such fierce rhetoric. They clearly believed that, far from confronting merely ‘innocent demonstrators’ as the Canadians had it, they were being destabilised by forces acting to a plan with international ramifications. It is possible that they were mistaken and that everything was spontaneous and accidental and a chaotic muddle; I do not pretend to know for sure. But there had been plans to destabilise their regime before, and they had grounds for thinking that they were being destabilised again. The slanted coverage in the British media in particular, notably the insistence that the regime was faced only by peaceful demonstrators when, in addition to ordinary Libyans trying to make their voices heard non-violently, it was facing politically motivated as well as random violence (e.g. the lynching of 50 alleged mercenaries in al-Baida on 19 February), was consistent with the destabilisation theory. And on the evidence I have since been able to collect, I am inclined to think that destabilisation is exactly what was happening.

The evidence is indeed compelling on this point. Most of the people making these initial accusations almost certainly knew they were false, and part of a wider agenda of regime change. These noxious seeds of deceit very quickly bore fruit in the work of credulous commentators, including the influential progressive, Juan Cole, as Roberts reports:

In the days that followed I made efforts to check the al-Jazeera story for myself. One source I consulted was the well-regarded blog Informed Comment, maintained and updated every day by Juan Cole, a Middle East specialist at the University of Michigan. This carried a post on 21 February entitled ‘Qaddafi’s bombardments recall Mussolini’s’, which made the point that ‘in 1933-40, Italo Balbo championed aerial warfare as the best means to deal with uppity colonial populations.’ The post began: ‘The strafing and bombardment in Tripoli of civilian demonstrators by Muammar Gaddafi’s fighter jets on Monday …’, with the underlined words linking to an article by Sarah El Deeb and Maggie Michael for Associated Press published at 9 p.m. on 21 February. This article provided no corroboration of Cole’s claim that Gaddafi’s fighter jets (or any other aircraft) had strafed or bombed anyone in Tripoli or anywhere else. The same is true of every source indicated in the other items on Libya relaying the aerial onslaught story which Cole posted that same day.

I was in Egypt for most of the time, but since many journalists visiting Libya were transiting through Cairo, I made a point of asking those I could get hold of what they had picked up in the field. None of them had found any corroboration of the story. I especially remember on 18 March asking the British North Africa expert Jon Marks, just back from an extended tour of Cyrenaica (taking in Ajdabiya, Benghazi, Brega, Derna and Ras Lanuf), what he had heard about the story. He told me that no one he had spoken to had mentioned it. Four days later, on 22 March, USA Today carried a striking article by Alan Kuperman, the author of The Limits of Humanitarian Intervention and coeditor of Gambling on Humanitarian Intervention. The article, ‘Five Things the US Should Consider in Libya’, provided a powerful critique of the Nato intervention as violating the conditions that needed to be observed for a humanitarian intervention to be justified or successful. But what interested me most was his statement that ‘despite ubiquitous cellphone cameras, there are no images of genocidal violence, a claim that smacks of rebel propaganda.’ So, four weeks on, I was not alone in finding no evidence for the aerial slaughter story. I subsequently discovered that the issue had come up more than a fortnight earlier, on 2 March, in hearings in the US Congress when Gates and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, were testifying. They told Congress that they had no confirmation of reports of aircraft controlled by Gaddafi firing on citizens.

The story was untrue, just as the story that went round the world in August 1990 that Iraqi troops were slaughtering Kuwaiti babies by turning off their incubators was untrue and the claims in the sexed-up dossier on Saddam’s WMD were untrue. But as Mohammed Khider, one of the founders of the FLN, once remarked, ‘when everyone takes up a falsehood, it becomes a reality.’ The rush to regime change by war was on and could not be stopped.

As I said, there is much more to the article, extending far beyond the headlines of the recent upheaval. But this sorry episode takes on heightened importance as the world enters yet another round of ratcheted-up tensions based on hearsay, exaggeration, supposition -- and outright, deliberate deceit -- aimed at instigating violent regime change in Iran.

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Oakland Police Riot: The Imperial Boardroom Strikes Back

Written by Chris Floyd 26 October 2011 13474 Hits

I had the honor of talking with Cindy Sheehan tonight, recording an interview for her radio show, which I believe will air on Sunday. She made mention of the "police riot" -- as she aptly phrased it -- in Oakland Tuesday night, as a Democratic administration moved in with gas and other weapons of war to clear the streets of American citizens taking part in the Occupy movement.

Ms. Sheehan also noted the fact that the Occupy movement's terminology about "the 99 percent vs. the 1 percent elite" is not entirely accurate; far too many of the 99 percent are serving as willing tools of the 1 percent -- in the police forces, in the media, even in the general public, where you can always find plenty of people eagerly genuflecting to the high and mighty, even as they and their own families and communities sink deeper into the mire.

The Oakland debacle is a prime example of this, as cops -- putative public servants whose pay scales put them deep into the 99 percent -- waded into the Occupy citizens, breaking heads and driving away the very people trying to stand up for their interests.

The New York Times reports on one victim of these first strike-backs by our panicky overlords. And he is a most telling victim indeed: a military veteran, who had served two tours in the imperial war of aggression in Iraq, then turned against the War Machine and joined that stalwart band of humanity's patriots, the Iraq Veterans Against the War: (See original for links and video.)


Two veterans groups say that a protester who was badly wounded in Oakland on Tuesday night is a former marine who is now hospitalized with a fractured skull.

According to Iraq Veterans Against the War, the protester, Scott Olsen, is a member of their group who left the Marines in 2010, after serving two tours in Iraq. In a statement, the group's executive director Jose Vasquez, claimed that Mr. Olsen "sustained a skull fracture after being shot in the head with a police projectile while peacefully participating in an Occupy Oakland march," on Tuesday night. Mr. Vasquez added that Mr. Olsen, a systems network administrator in Daly, Calif. "is currently sedated at a local hospital awaiting examination by a neurosurgeon."

A series of bloody photographs that appear to show Mr. Olsen after he was wounded were posted on the San Francisco Bay Area Independent Media Center's site, Indybay.org. Those images show that Mr. Olsen was wearing a brown military shirt with his last name on the front. Jay Finneburgh, the photographer who shot the images of Mr. Olsen, wrote on Indybay: "This poor guy was right behind me when he was hit in the head with a police projectile. He went down hard and did not get up. The bright light in the second shot is from a flash-bang grenade that went off a few feet from us. He looks like he might be a veteran. he was eventually taken to highland hospital." ....


We will see more, much more of this. You can smell the fear in the boardrooms (and in their bought-and-paid-for extensions, the government offices) around the world, as our mighty statesfolk flail at the global economic meltdown their own policies have unleashed -- with no other answer than to keep imposing "austerity" measures, one after another, destroying the societies they've feasted upon for so long. And has there even been such a gaggle of fourth-rate poltroons, of shallow, witless, gormless goobers as the leaders of the "developed" world these days? Sarkozy, Cameron, Merkel, Berlusconi, Obama ....? It's like the last tribal council on Easter Island. All they have left are lies, delusions -- and brutality.

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Withdrawal Symptoms: Curtain Rises on Second Act of an Endless War Crime

Written by Chris Floyd 23 October 2011 7630 Hits

Barack Obama has announced that all American troops will be withdrawn from Iraq by the end of the year. This was presented as America honorably adhering to the agreement signed years ago by the Bush Administration. At the same time, White House and Pentagon spinners were planting stories to make clear that the United States had fully intended to continue its military presence in Iraq past the deadline, but was thwarted by the Iraqis' unconscionable refusal to allow American forces to commit crimes with impunity -- and immunity -- on Iraqi soil.

These backroom "process" stories -- filled, as always, with unnamed insiders providing savvy "nuance" -- were detailed, laying out a long series of negotiations, ending in what was clearly the Americans' chief goal: a military presence of 3,000-5,000 troops, placed strategically around the country, with a main focus in Baghdad. These negotiations failed; hence Obama's announcement that he was being forced to honor the existing agreement on withdrawal.

At the same time, however, we are also told that the State Department will maintain "at least" 5,000 armed "security personnel" -- mercenaries of various stripes. These 5,000 militarized (if not officially military) troops will be stationed in strategic locations around the country, where the United States will establish mini-fortress "consulates" in Iraqi cities, with a main focus in Baghdad.

So the Americans had a baseline goal of 3,000 armed personnel remaining in Iraq; they will now have a minimum of 5,000 armed personnel remaining in Iraq.

It could be argued that the original intent was to have the 3,000-5,000 uniformed troops in addition to the 5,000 mercenaries, and thus the Americans have taken a bit of a haircut in the occupation department: 5,000 instead of combined total of 8,000 (or a top end of 10,000.) Maybe so. But the fact remains that whatever else happens, the American government will have a minimum of 5,000 men under arms, stationed all across the conquered land. What's more, there is apparently no limit on the number of such mercenaries the Americans can employ to provide "security" for the thousands of other American government operatives who will remain. Any number of pretexts could provide excuses for a "surge" in "security contractors": 8,000, 10,000, 20,000 -- who's to say how many will ultimately be "needed" to combat "terrorists"?

So we have a baseline of 5,000 militarized forces remaining indefinitely in Iraq, with no immediate limit on an expansion in their numbers. And of course, all the stories make it abundantly clear that the Americans will quickly negotiate a new "security agreement" with Iraq, which will include -- or even be in addition to -- thousands of military "advisers" to help "train" the Iraqi forces, especially with the multitude of new weapons that Washington's war profiteers are lining up to sell to the "sovereign" government in Baghdad. How many troops will be involved in these "agreements"? Thousands? Tens of thousands?  Again, we don't know.

And as Glenn Greenwald and others have pointed out, none of these numbers include the "Special Forces" and CIA paramilitaries that will inevitably be ranging across Iraq, no doubt in large numbers. Iraq is hardly going to receive less attention from the American black ops and death squads than Pakistan, Afghanistan, Somalia and the dozens of other countries where Washington is waging secret war.

Thus it is almost a certainty that by the end of 2012, there will be, at the barest minimum, at least 8,000 to 10,000 heavily armed personnel under the direct control of the United States government stationed at strategic points throughout Iraq; the actual figure will doubtless be higher, perhaps much higher. But this is a bare minimum -- numbers which tally almost exactly with the final goals of the American war machine in the "failed" negotiations on extending the present form of the occupation.

Obama's announcement was yet another bitter sham. We are not ringing down the curtain on the Iraq War; we are simply beginning the second act, with new scenery in the backdrop, some new plotlines and characters -- but the same old dirty, bloody business of aggression.

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Greek Fire: The Yellow Bird is Singing

Written by Chris Floyd 21 October 2011 6864 Hits

Greece is the canary in the coal mine of modern hyper-capitalism. Throughout the "developed" world, elites and political leaders are following the same path, using a self-created financial crisis to institute a radical destruction of free societies and create an authoritarian "managed democracy" in their places. But the extremist measures being imposed on Greece are producing a furious reaction -- and a recasting of old political realities in new forms -- that could also prove to be a harbinger of the future.

Costas Douzinas gives this analysis in the Guardian:

Greece is split in two. On one side are politicians, bankers, tax evaders and media barons supporting the most class-driven, violent social and cultural restructuring western Europe has seen. The "other" Greece includes the overwhelming majority of the population. It was in evidence yesterday when up to 500,000 people took to the streets; the largest demonstration in living memory. The attempt to divide civil servants (ritually presented as lazy and corrupt) from private sector employees (the "tax evading" plumbers) has misfired. The only success the Papandreou government can boast is the abolition of the old right-left division – replaced by a divide between the elites and the people.

Douzinas points out that the government is using the crisis to impose radical changes -- on behalf of the One-Percenters -- which go goes far beyond the already draconian measures demanded by international lenders:

Yet a representative of [the] "troika" of lenders – the IMF, EU and European Central Bank – told a Greek newspaper that they did not demand the abolition of collective bargaining in the private sector, the one measure that has led to some opposition in the ruling party. Nor did the troika demand the wholesale change in university law. It is as if the Greek elites desired the debt to orchestrate the wholesale destruction of the welfare state and transfer of public assets to private hands ...This government's mission was to replace care for others with indifference, hospitality with exploitation. They failed, and now only a thick blue line separates the elite from the outraged people.

...Youth unemployment is soaring towards 50%; Greece will pay for decades for the destruction of a whole generation. The troika will stand accused of neocolonial arrogance. It is not necessary to know the Sisyphus myth to see that measures leading to -7% growth do not reduce the deficit. You don't need to have read Plato to understand that halving salaries and pensions means people will not be able to pay exorbitant new taxes ....

Thursday's demonstration ended tragically with the death of a trade-unionist. The last vestiges of governmental legitimacy are gone and the government will follow soon. The democratic deficit from which political systems suffer everywhere is irreversible in Greece. The responsibility of the "other" Greece is to devise a constitution of social justice and democracy for the 21st century. This is what Greece can offer to the world.

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Unguarded Guardians: The Rampant Abuses of our Prison Profiteers

Written by Chris Floyd 20 October 2011 8071 Hits

The ACLU has just released documentation of the rampant sexual abuse of female immigration detainees at the hands of our enlightened guardians. The latter include the Corrections Corporation of America, the private prison company that has parlayed its insider poitical connections to become one of the nation's largest profiteers of human suffering.

This news brought to mind a story I wrote awhile back on the origins of prison profiteering and one of its founding fathers, Lamar Alexander. Unfortunately, this was one of the stories that were completely destroyed in the many hack attacks on this website. So I thought I would take this opportunity to repost it. The subject is still all too germane; indeed, the cancer of prison profiteering has only grown more and more malignant since the story's first appearance in 2009, fueled by the Nobel Peace Laureate's record-breaking (and profit-making) round-ups and expulsions of immigrants.

So below is a reprise of the text (most of the links were also lost) of that vanished piece from March 2009.

LOST LIBERTY BLUES: PRISONS, PROFITS AND THE BANALITY OF EVIL

1. Ex Nihilo

Lamar Alexander is certainly one of the biggest non-entities in the history of modern American politics. You would have to range far and wide to find a more negligible, pointless, unproductive figure on the national level than Alexander, the senior U.S. senator from Tennessee; indeed, you’d be hard-pressed to find such a one on the smallest school board or city council in the remotest corner of the country.

Perhaps only George Walker Bush could match Alexander in the "coasting through life with corporate coddling" sweepstakes. Like Bush, Alexander was once a Republican governor who did almost no work in office, letting the Democratic leaders of the state legislature — with whom he had some cozy business entanglements — handle the nitty-gritty of governing while he whiled away the hours greasing wheels for his cronies and cutting sweetheart deals to enrich himself.

And like Bush with his Crawford dude ranch, Alexander adopted an entirely faux pose as a son-of-the-soil type in a cynical campaign ploy. Following a first, failed attempt at the governorship in 1974 — in which he had his head handed to him on a platter by a genuine son of the soil, the genially corrupt Ray Blanton, who hammered away at the fact that L’il Lamar had gotten his political schooling in the bowels of Richard Nixon’s White House — Alexander ditched his five-hundred dollar suits for a plaid work shirt, to show that he was jes’ plain folks. In the race to replace the scandal-scarred Blanton in 1978, the plaid-clad Alexander thundered that his opponent, obscure country banker Jake Butcher, owned an interest in an establishment that served — gasp! — demon rum. The fact that Alexander also owned shares in an upscale eatery that served liquor did not, of course, deter him from his attack on Butcher’s lack of Christian morals. Alexander’s PR machine swept past Butcher’s bumpkinish campaign and got him into the statehouse for his eight years of goofing off.

He then floated into the presidency of the University of Tennessee (where he signed my paychecks for three years), again doing nothing but scratching his ears and feathering his nest. In 1991, George Herbert Walker Bush summoned Alexander to Washington, naming him Secretary of Education — an obvious joke on George Herbert’s part, given Lamar’s previous call for the Department of Education to be abolished.

(George Herbert’s literally wicked sense of humor is too little appreciated, I think. Like a lot of humor, Herbie’s jokes involved the cloaked expression of savage malice — in this case, malice toward the country he was supposedly governing. For example, there was his deliberate, knowing choice of an incompetent, unstable political hack — Clarence Thomas — to take the place of the venerated Thurgood Marshall on the Supreme Court. And then of course, there was Bush’s supreme joke: choosing frat-boy goofball Dan Quayle to stand a heartbeat away from the presidency. This level of Coriolanus-like contempt for the rabble was not matched until 2008, when John McCain picked dimbulb Christianist warrior Sarah Palin as his running mate — while Barack Obama picked the plagiarizing corporate bagman Joe Biden as his. But we digress.)

After Herbie lost the White House to Bill Clinton, the man he now considers his "son" — and with whom he curiously shared his leading benefactor in 1992 — Alexander was forced onto the corporate board breadline, where he eked out a meager existence on a few hundred thou a year, plus the usual sweetheart stock deals, while launching his two hilariously abysmal bids for the White House in 1996 and 2000.

Finally, in 2002, this suit of clothes — or rather, this puffed-up plaid shirt — walked into the wasteland that has become the U.S. senatorship of Tennessee, where such egregious goobers as Fred Thompson, Bill Frist and Bob Corker (who is actually giving Lamar a strong run for the money as the nation’s greatest political non-entity) have prowled around to very little purpose other than their own self-aggrandizement. Lamar was the choice of the Bush organization to fill the shoes of jowly, growly Fred when he ambled off to television, and Alexander duly served George Walker faithfully, most signally in his staunch support for Bush’s criminal invasion of Iraq.

"A slight unmeritable man," then, "meet to be sent on errands," as Marc Antony says of the non-entity Lepidus in Julius Caesar. And yet despite the big blank spot that Alexander has left in American politics, he should be rightly regarded as a Founding Father of one of the most profound and far-reaching developments in American society, one which will reverberate in a myriad of ways through generations: turning convicts into cannon fodder for corporate profits.

II. Miracle Money and Failing Upward

As is well known, the United States of America locks up more of its people — both in bulk and by percentage — than any other nation on earth. According to the International Centre for Prison Studies at King’s College, London, there were 2,293,157 people behind bars in the United States at the end of 2007, the latest year for which totals are available. The incarceration rate is 756 prisoners per every 100,000 of the general population: a staggering rate that far surpasses the closest competitor, Russia, which jails 626 out of every 100,000 of its people, or Communist China, which jails 119 out of every 100,000. Indeed, America’s total prison population outstrips China’s by more than half a million — even though China’s population is five times larger than America’s. It also far outstrips Russia’s puny total of 887,000 prisoners. With the possible exception of the Soviet Union under Stalin, no country in history has ever incarcerated more of its citizens than the United States does today.

The prison population saw runaway growth under George Walker, but, as I wrote almost three years ago:

Bush is merely standing on the shoulders of giants – such as, say, Bill Clinton, who once created 50 brand-new federal offenses in a single draconian measure, and expanded the federal death penalty to 60 new offenses during his term. In fact, like the great cathedrals of old, the building of Fortress America has been the work of decades, with an entire society yoked to the common task. At each step, the promulgation of ever-more draconian punishments for ever-lesser offenses, and the criminalization of ever-broader swathes of ordinary human behavior, have been greeted with hosannahs from a public and press who seem to be insatiable gluttons for punishment – someone else’s punishment, that is, and preferably someone of dusky hue.

The main engine of this mass incarceration has been the 35-year "war on drugs": a spurious battle against an abstract noun that provides an endless fount of profits, payoffs and power for the politically connected while only worsening the problem it purports to address – just like the "war on terror." The "war on drugs" has in fact been the most effective assault on an underclass since Stalin’s campaign against the kulaks.

It was launched by Richard Nixon, after urban unrest had shaken major American cities during those famous "long, hot summers" of the Sixties. Yet even as the crackdowns began, America’s inner cities were being flooded with heroin, much of it originating in Southeast Asia, where the CIA and its hired warlords ran well-funded black ops in and around Vietnam. At home, criminal gangs reaped staggering riches from the criminalization of the natural, if often unhealthy, human craving for intoxication. Ronald Reagan upped the ante in the 1980s, with a rash of "mandatory sentencing" laws that can put even first-time, small-time offenders away for years. His term also saw a new flood — crack cocaine – devastating the inner cities, even as his covert operators used drug money to fund the terrorist Contra army in Nicaragua and run illegal weapons to Iran, while the downtown druglords grew more powerful. The American underclass was caught in a classic pincer movement, attacked by both the state and the gangs. There were no more "long, hot summers" of protest against injustice; there was simply the struggle to survive.

Under Reagan, Bush I and Clinton, the feverish privatization of the prison system added a new impetus for wholesale, long-term detention. Politically-wired corporations need to keep those profit-making cells filled, and the politicians they grease are happy to oblige with "tougher" sentences and new crimes to prosecute.

And here we come to little ole Lamar. As noted, the floodgates into prison gaped wide in the 1980s. This human flotsam was too tempting a resource to remain unexploited. Also, there was big money to be made from the harsh and vengeful spirit coursing through the political landscape in those days, with the continuing call to build more and more prisons to hold the Drug War captives and the "three-strikers" who were being sentenced to life in prison for a string of often minor offenses. Anyone hot-wired into a major political establishment – a state government, say – could coin it like crazy from those cooped-up cons.

Enter the Corrections Corporation of America, a private prison company co-founded and led by Tom Beasley, a long-time Alexander operative and former chairman of the state GOP, who had helped manage Lamar’s campaigns, and had even lived in his house for a time, as AgainstPuryear.org notes. Beasley and his partners were staked by a venture cap maven named Jack Massey – another old pal of Lamar’s. While CCA was lobbying the state government run by their friend for a $250 million contract to take over the state’s prisons, it emerged that Alexander’s wife, Honey, has somehow acquired $8,900 worth of CCA stock – the kind of sweet deal that jes’ plain folks rarely run across.

To avoid embarrassment, Honey traded her stock straight up for shares in an insurance holding company owned by none other than CCA bankroller Jack Massey. When Honey sold off her insurance stock, her $8,900 had miraculously turned into a $142,000 windfall. (The Alexanders have been the lucky recipients of several such miracles. For example, Lamar picked up corporate board goofing-off pork for years from Chris Whittle, the Knoxville tycoon who spearheaded the corporate invasion of public schools. When Lamar became Education Secretary, and very ethically left Whittle’s service, one of Whittle’s other minions "bought the Alexanders’ Knoxville home for $977,500 – more than $400,000 more than they had paid for it a year before," as the Ethical Spectacle reports. Whittle also bought back $10,000 worth of his company’s stock from Alexander – for the tidy sum of $330,000.)

In the end, CCA’s handling of Tennessee’s prisons turned out to be so cack-handed that the state had to take back all but one of them. But Lamar was long gone by that time, with Honey’s miracle money in his pocket, while CCA – benefiting from that "failing upward" phenomenon so typical of American business – had inexplicably established itself as the major player in the burgeoning prison privatization racket. As Global Research reports:

Private prisons are the biggest business in the prison industry complex. About 18 corporations guard 10,000 prisoners in 27 states. The two largest are Correctional Corporation of America (CCA) and Wackenhut, which together control 75%. Private prisons receive a guaranteed amount of money for each prisoner, independent of what it costs to maintain each one. According to Russell Boraas, a private prison administrator in Virginia, "the secret to low operating costs is having a minimal number of guards for the maximum number of prisoners." The CCA has an ultra-modern prison in Lawrenceville, Virginia, where five guards on dayshift and two at night watch over 750 prisoners. In these prisons, inmates may get their sentences reduced for "good behavior," but for any infraction, they get 30 days added – which means more profits for CCA. According to a study of New Mexico prisons, it was found that CCA inmates lost "good behavior time" at a rate eight times higher than those in state prisons.

Building on its success in skimping on such fripperies as sufficient guards and food in order to squeeze maximum profits out of its prisons, CCA soon expanded its operations across the sea to the UK, where it found an even more eager audience of well-connected grease merchants. George Monbiot reports:

Encouraged by the committee’s report, the Corrections Corporation of America set up a consortium in Britain with two Conservative party donors, Sir Robert McAlpine Ltd and John Mowlem & Co, to promote privately financed prisons over here. The first privately-run prison in the UK, Wolds, was opened by the Danish security company Group 4 in 1992. In 1993, before it had had a chance to evaluate this experiment, the government announced that all new prisons would be built and run by private companies.

The Labour party, then in opposition, was outraged. John Prescott promised that “Labour will take back private prisons into public ownership – it is the only safe way forward.”(Jack Straw stated that “it is not appropriate for people to profit out of incarceration. This is surely one area where a free market certainly does not exist”. He too promised to “bring these prisons into proper public control and run them directly as public services.”

But during his first seven weeks in office, Jack Straw renewed one private prison contract and launched two new ones. A year later he announced that all new prisons in England and Wales would be built and run by private companies, under the private finance initiative.

Well, what else would you expect from a party – "New" Labour – that modeled itself on Bill Clinton’s "triage" strategy: i.e., adopting a endless slew of right-wing policies and simply calling them "progressive." This philosophy – which has been adapted wholesale by the Obama Administration and its horde of Clinton and Bush retreads – was succinctly summed up by George Orwell: "Four legs good, two legs better."

III. Bringing It All Back Home

Of course, wholesale privatization is only one prong of the fork that sweetheart dealers have plunged into that juicy prison pork. As Global Research reports, major corporations have moved into state prisons as well, tying their own profits – and increasing proportions of the American economy – to the need for an endless, expanding supply of convict labor:

Who is investing? At least 37 states have legalized the contracting of prison labor by private corporations that mount their operations inside state prisons. The list of such companies contains the cream of U.S. corporate society: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and many more. All of these businesses are excited about the economic boom generation by prison labor. Just between 1980 and 1994, profits went up from $392 million to $1.31 billion. Inmates in state penitentiaries generally receive the minimum wage for their work, but not all; in Colorado, they get about $2 per hour, well under the minimum. And in privately-run prisons, they receive as little as 17 cents per hour for a maximum of six hours a day, the equivalent of $20 per month. The highest-paying private prison is CCA in Tennessee, where prisoners receive 50 cents per hour for what they call "highly skilled positions." At those rates, it is no surprise that inmates find the pay in federal prisons to be very generous. There, they can earn $1.25 an hour and work eight hours a day, and sometimes overtime. They can send home $200-$300 per month.

Thanks to prison labor, the United States is once again an attractive location for investment in work that was designed for Third World labor markets. A company that operated a maquiladora (assembly plant in Mexico near the border) closed down its operations there and relocated to San Quentin State Prison in California. In Texas, a factory fired its 150 workers and contracted the services of prisoner-workers from the private Lockhart Texas prison, where circuit boards are assembled for companies like IBM and Compaq.

[Former] Oregon State Representative Kevin Mannix recently urged Nike to cut its production in Indonesia and bring it to his state, telling the shoe manufacturer that "there won’t be any transportation costs; we’re offering you competitive prison labor (here)."

There’s a real stimulus plan for you! There’s a way to bring the big manufacturers back to America’s shores. Forget targeting their tax havens and tax dodges: give ‘em cheap, captive labor, and they’ll come running.

Of course, today’s rampant exploitation of convict labor — with its attendant, inevitable corruption of individual officials (such as the Pennsylvania judges recently convicted of selling children into detention for kickbacks from a privateer), and the political process and the economy at large – is itself something of a coming home for American society. For example, it played a key role in rebuilding the post-Civil War fortunes of the elite in the "New South" – the same states that now employ more private prisons than any others. As we noted in a piece here awhile back ("Postcards of the Hanging: Race and Sex in Tennessee"):

Side by side with the lynching – indeed far surpassing it in terms of depth and reach through the black community – was the money angle. The end of slavery didn’t mean the end of servitude by any means. As each Southern state was returned to the control of its defeated white elites after the Civil War, they quickly gamed the legal system to provide them with a virtually unlimited supply of convict labor – without rights, without protection, in chains, under the bullwhip, just like the good old days. The smallest infractions of the law, petty fines, bad debts – or often, nothing at all but the need of the local bossman – swept multitudes of black men and women into minor jail terms that would be extended by months, sometimes years through draconian "fees" and "court costs" they would have to "work off" – in the fields, in the mines, laying rail, building roads, draining swamps. Savvy brokers contracted with state and local governments to manage the trade in these convicts, many of whom were simply worked to death or crippled for life. There was no profit in looking after them anymore; they were no longer someone’s valuable "property" but just so much ever-replaceable fodder churning endlessly through the legal machine.

Freed but disenfranchised, emancipated but still in chains, balked by law and brutal custom from full participation in society, the Southern blacks also made handy targets to divert the anger and dissatisfaction of the "poor white trash" from the elites that exploited them as well, albeit less severely. If even the poorest white man could consider himself superior to someone, if you could keep him tied up in psychological and emotional knots about inferior darkies messing with his women, going to his schools, sitting at his lunch counters, drinking from his water fountains, swimming in his public pools, living in his neighborhoods, why then he’d never make common cause with his black brothers and sisters in poverty to fight for a better life. Canny patricians played whole decks of such race cards to win the votes of the crackers and rednecks they privately despised: "Don’t vote for that commie over there talking about unions and fair wages and equality; vote for me, vote for the man who’ll keep your women and children – and your drinking water – safe from the Negro!" [For much more, see the book, Worse Than Slavery, by David Oshinsky.)

As the economy craters around the world, governments and their servitor intellectuals are sounding clarion calls about a coming tide of "unrest" amongst the newly pauperized rabble. This is to be met not with sensible economic policies designed to rectify the vast imbalances, injustices and virulent corruption of the sweetheart-deal world, but instead with multitrillion-dollar bailouts of bankers, venture capitalist and privateers – and with "contingency plans" for "security operations" to keep the rabble in line. The jails, prisons and detention centers will soon be full to bursting with those forced into petty crime by need and desperation – and with anyone who dares to venture outside a  specially designated, often fenced-in "free speech zone" to protest the continuing greed of the elite. Meanwhile, the failed Drug War keeps on raging, doing nothing to stem the flow of narcotics but enriching a few people immensely, and providing justification for an every-expanding array of draconian police powers that too many states find too useful to give up now. So there will be no end of backroom operators and government frontmen ready to work their correction connections to squeeze money from this rising tide of human suffering.

The career of Lamar Alexander is of little moment in itself; he’s just another garden-variety corruptocrat gliding through life on a stream of grease. But like the life of George W. Bush, it is a highly instructive example of the poison fruit that even the most bland, feckless non-entity can produce in a system that is willfully, brutally blind to its own injustices. The phrase "banality of evil" comes all too readily to mind.

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