Sunday, December 3, 2006

Full Text of Rumsfeld’s Classified Memo of Options for Iraq War

December 3, 2006

Rumsfeld’s Memo of Options for Iraq War

Following is the text of a classified Nov. 6 memorandum that Defense Secretary Donald H. Rumsfeld sent to the White House suggesting new options in Iraq. The memorandum was sent one day before the midterm Congressional elections and two days before Mr. Rumsfeld resigned.

Nov. 6, 2006

SUBJECT: Iraq — Illustrative New Courses of Action
--MORE--

Louisiana's largest commercial insurer to cancel all policies; fear that move will put the brakes on recovery

Commercial insurer to pull out of area

Businesses fear Travelers' move will put the brakes on recovery
Saturday, December 02, 2006
By Rebecca Mowbray
Business writer

St. Paul Travelers Cos. Inc., Louisiana's largest commercial insurance provider, plans to cancel all its commercial property policies in the New Orleans area next year, sparking fears that other insurers will follow and slow the region's economic recovery.

While the St. Paul, Minn., company refused to say how many commercial policies will be affected or specify where the cuts will be in South Louisiana, two insurance brokers who were briefed by the company this week say Travelers will not renew any property insurance for businesses in Orleans, Jefferson, Plaquemines, St. Bernard and eastern St. Tammany parishes. Cuts will also affect individual businesses in other parts of South Louisiana, including St. Charles and St. John the Baptist parishes.

"I said, 'May I tell anybody who asks that Travelers is withdrawing from the commercial property insurance market in southeast Louisiana?' " said Anderson Baker, president of the New Orleans agency Gillis, Ellis & Baker, who met with the company Wednesday. "The answer was, 'Yes.' "

Travelers spokeswoman Jennifer Wislocki said the company has "a high concentration of commercial policies in the hurricane-prone areas of Louisiana" and will not renew many commercial policies when they expire.

"To keep future losses to a more acceptable level for continued financial stability, we are reducing our exposure in some of these areas by non-renewing a number of small to mid-sized commercial properties," Wislocki said.

Crisis summit called

State Insurance Commissioner Jim Donelon, who was tipped off about Travelers' plans Wednesday night by the Business Council of New Orleans and the River Region, said he was stunned by the news. When he met with Travelers on Thursday, he was equally stunned by the stated reason for the company's retrenchment.

"They cited the state of the rebuilding of our levee system as the primary reason for their decision," Donelon said.

In conjunction with Gov. Kathleen Blanco and Louisiana Department of Natural Resources Secretary Scott Angelle, Donelon quickly convened a summit of commercial property insurers for Tuesday. At the meeting, the three hope to advise commercial property insurance providers about the efforts to restore the Louisiana coast and improve the levee system to stave off other defections.

"I have lived in the New Orleans metropolitan area for 61 years, and I can personally vouch for the fact that the levee system is better and stronger than it ever has been, and is getting stronger as every day goes by," Donelon said. "We need to let Travelers and the rest of the commercial property writers know of that effort."

Donelon said he was puzzled by Travelers' logic, since private insurers don't cover flooding. But insurance companies say that when there is a disaster that includes both wind and flood damage, they end up paying more on claims and facing higher costs in litigation because policyholders who don't have enough flood coverage press harder for money, he said. And unlike storm surge at the beach, which rolls back out to sea, houses in the New Orleans area have the potential to marinate in putrid floodwaters for weeks, as they did after Hurricane Katrina.

Not connected to ruling

On Monday, Travelers found out it could face additional legal liability for levee breach flooding when U.S. District Court Judge Stanwood Duval ruled that the flood-exclusion language in the policy forms of Travelers and a number of other insurance companies was vague, opening the door for the insurers to be held responsible for flood damage. Since insurance companies write the contracts people sign, lawyers said, any finding of ambiguity in an exclusion is generally a win for the policyholder.

Wislocki said there is "no connection at all" between the timing of the court decision and Travelers' decision against renewing commercial property policies.

"We especially disagree with Judge Duval's ruling and intend to appeal it," Wislocki said. "The ruling is inconsistent with many other court rulings that held a flood is a flood, whether or not man-made factors are involved. The language in our policies specifically excludes damage from floodwater."

Donelon has taken a hard line against other insurance companies that have tried to drop policies because of environmental considerations such as coastal erosion or concerns about levees, such as a homeowners insurance company for teachers, Horace Mann Educators Corp., but Donelon says he has little leverage in the lightly regulated commercial insurance market.

'Shock wave'

Donelon, commercial insurance agents and business leaders said they worry that Travelers' retreat will inspire others to follow, deepening a crisis in the limited availability and rising cost of commercial insurance.

"This is sending a shock wave through the business community," said Mark Drennen, president and chief executive officer of Greater New Orleans Inc., a public-private partnership that seeks to promote economic development in the area. "If one company has come to that conclusion, you would anticipate that others would come to that conclusion. Without insurance, we have a calamity. We cannot exist as a business community without insurance."

Greater New Orleans Inc. and the Business Council issued a press release Friday urging the governor to delay a special session set to start Dec. 8 to find more time to look for potential solutions, and so the state doesn't blow through its budget surplus in case it's needed to help solve insurance issues in a systematic way.

"Nobody's there yet with a solution," Drennen said. "One of our big concerns is if the Legislature comes in now and spends it, it takes an option off the table that we may need to use."

The business groups' release says that Travelers' pullout amounts to a loss of $3 billion of commercial property insurance coverage in the New Orleans area, according to the insurance brokers who met with the company.

Wislocki said she couldn't verify that figure. "I don't even know if that's in the ballpark," she said.

Other pullouts feared

Marc Eagan, president of Eagan Insurance Agency Inc. in Metairie, said Travelers' pullout is a devastating blow to the region, and he worries that other companies will follow in March after a special emergency rule expires that had artificially held insurance coverage in place after Katrina and Rita.

"This is going to be a blood bath," said Eagan, who added that Hanover Insurance Group, Lafayette Insurance Co. and possibly Zurich North America have indicated that they are likely to not renew some commercial policies.

Zurich, the state's third-largest provider of commercial multi-peril insurance, said in an e-mailed statement: "Zurich is still open for business in Louisiana. We continue to take on new and renewal business where terms and pricing correspond to the risks, while prudently managing our exposure in coastal areas and our aggregate exposures overall. We don't have any present plans to change this practice."

Surplus lines insurers, which are regulated even less than commercial insurers such as Lloyds, are likely to pick up some of the displaced Travelers business, but much of the business will likely go to the state-sponsored insurer of last resort, the Louisiana Citizens Property Insurance Corp.

"The Citizens plan is going to be overloaded after March. That is my greatest fear, other than a hurricane coming in 2007," Eagan said.

Citizens prepares

Citizens traditionally has not done much commercial insurance business. In anticipation of doing more, Citizens plans to raise its coverage limits from $2 million per business building to $5 million per building. It also is seeking permission from the Louisiana Insurance Rating Commission this month to raise rates by a statewide average of 129.6 percent.

While that rate increase may seem astronomical, it's not as high as the increases that many businesses are reporting from private carriers. Donelon said this week that he is concerned the state could end up taking on too much commercial insurance liability with inadequate premiums if it's priced wrong.

A wave of commercial policies in Citizens will more quickly add financial exposure than homeowners policies, because business properties are usually more expensive than homes, creating additional headaches for the state at a time when many Louisiana lawmakers are already calling to overhaul Citizens.

Worried about the same thing, Baker said he's flying to Bermuda next week to meet with companies that can provide "excess insurance" -- essentially insurance to supplement a commercial policy with a low ceiling -- and try to get them to come to Louisiana. "I'm knocking on every door I can," said Baker, a member of Greater New Orleans Inc.'s insurance task force.

Travelers said its changes concern only commercial property coverage; liability, workers' compensation and other non-property coverage will remain in force, and residential policies won't be affected by the commercial pullback.

Wislocki also said the company will cancel business on a rolling basis as property policies come up for renewal, so the "non-renewals" should take place over the 12-month period starting in March. "There will be no midterm cancellations," she said.

Eagan said business owners should call their insurance brokers to check on the status of coverage for next year -- and start hunting for replacements now if there's a hint of bad news.

After receiving high rates of complaints about Travelers, Citizens and Allstate after Katrina and Rita, the Louisiana Department of Insurance hired independent contractors to initiate "market conduct" studies of each of the three companies to examine their claims-handling and business practices. The reports are expected to be released in February.

. . . . . . .

Rebecca Mowbray can be reached at rmowbray@timespicayune.com or (504) 826-3417.

Bush to Announce "Orbital Battle Station"

STAR WARS REDUX: Democrats to Gut Missile Defense / Bush to Announce "Orbital Battle Station"

PJM in Seattle


Exclusive to Pajamas Media

astarwarsredux.jpg
In 2007 both Democrats and Republicans are going back into space with their pet peeves and passions intact.

By Taylor Dinerman

Democratic leaders are poised to gut America’s missile defense - at the same time North Korea and Iran are testing long-range missiles that can strike the U.S. and its allies, including Israel, Japan and Britain.

Meanwhile, sources inside the missile-defense community tell Pajamas Media that the Bush administration is planning to ask Congress to begin funding development of an “orbital battle station.”

With these key developments, 2007 is set to be the biggest battle of space-based weapons since President Reagan proposed “Star Wars” in 1983.

The incoming chairman of the Senate’s Armed Services Committee is Carl Levin. Levin, a Michigan Democrat, has long been a foe of missile defense. In 1980s, he worried that President Reagan’s Strategic Defense Initiative — which aimed to develop technology to destroy Soviet missiles during all phases of flight — was “destabilizing.”

Today Sen. Levin sings the same tune in a different key. “They’ve not done the operational testing yet that is convincing,” said Senator Levin during a post-election press conference. He was referring to the Ground based Missile Defense [GMD] system being installed in Alaska and California, to defend against North Korean missiles. He added that he favors stalling purchases of interceptor missiles - vital for missile defense — until after testing is complete.

In short, Sen. Levin and other longtime opponents of missile defense plan to use “testing” - set to an unrealistically high level - to stop missile defense.

How the Game is Played

Former Assistant Secretary of Defense Frank Gaffney explains how the game works: “The idea is that we put it [missile defense] on ice until absolutely everybody is satisfied. It is a formula for not having the missile defense we need.”

Critics hope to stop missile defense by devoting its entire budget to testing, which is costly. At $100 million dollars or more per test, a test or two could easily absorb the entire Ground-based missile defense budget.

Certainly testing sounds reasonable. Why not make sure the stuff works before blowing billions on it? But the testing fixation ignores that, like software, most successful weapons systems are best debugged after being deployed. And some weapons systems were never tested at all before deployment.

Complex weapons systems have often been used successfully without proper testing. In 1940, Britain’s new air defenses — radars, ground observers, anti-aircraft guns and squadrons of Spitfires and Hurricanes — had never been tested against even a small scale simulated attack. Yet they won the Battle of Britain. Likewise in the 1991 Gulf War the first two E-8A ground surveillance radar aircraft had only just begun a long testing process when they were shipped to Saudi Arabia. During the war they performed magnificently and now these aircraft are in high demand all over the world.

For decades, critics of advanced technology weapons have pointed to testing failures to support their drive to cancel the programs. Yet test failures are a normal part of the development process of any weapon system. Consider the M-1 tank. Its early tests were riddled with failures, yet now it is one of the most effective tanks in the world.

Democrats: “A limited defense capability that works.” Reasonable but Disingenuous

Over in the House of Representatives, Democrats are deploying a similar strategy to stop missile defense. Seven House Democrats, including Ike Skelton (D-MO), John Spratt (D-SC), Loretta Sanchez and Neil Abercrombie (D-HI), recently sent a letter to Secretary of Defense Donald Rumsfeld complaining of “tests that have been highly scripted with unrealistic countermeasures, the time of the enemy launch was known and the threat came from only a single enemy missile.” This sounds reasonable, but is actually disingenuous. Each test is designed to achieve a specific set of goals, this is what the Democrats mean by “scripted.”

Each test requires the use of a heavily modified ICBM as a target. Hundreds, maybe thousands of highly trained specialists operate sensors and collect the telemetry from both the interceptor and the target missile. Development testing like this is designed to gather information on performance and reliability. It will be years before the system is ready for “operational testing.”

While the Democratic lawmakers insist they support “fielding a limited defense capability that works,” they still see missile defense as a boondoggle. The letter writers contend: “Since the Strategic Defense Initiative (SDI) was launched in the mid 1980’s the United States has spent nearly $100 billion dollars on missile defense programs and studies with little to show for it.” This last sentence is ironic since most Democrats have long opposed any actual deployment of strategic missile defenses.

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Missile Defense: A Brief History

Missile Defense has gone through several phases of research and development. In the early 1990s a system called Brilliant Pebbles was ready to begin development when it was canceled by the Clinton administration.

Meanwhile a number of tactical missile defense systems have been developed including the Patriot PAC-3, which worked well during the 2003 Iraq operation and as well as the Terminal High Altitude Air Defense (THAAD) missile which is planned to begin operations in 2009 and the Airborne Laser built into a Boeing 747 which may be operational early in the next decade.

Democrats in Congress have learned not to treat homeland missile defense with the disdain they demonstrated in the 1980s; the threat of attack from rogue nations seems far too real to shrug off. Generally Democratic lawmakers support for modest research budgets and “limited” missile defenses, while citing “inadequate testing” to stop actual deployment.

Democratic opponents of missile defense often speak as if the ground-based missile defense system was the whole program, ignoring the sea based SM-3 missile, which has been undergoing a rigorous and successful test program in the waters off Hawaii. Indeed, it is so successful that Japanese government is buying it to equip its Aegis cruisers. The Defense Department has been reluctant to fund an upgrade of the system to give it its full potential against long range missiles.

How Serious Are Pols About Missile Defense?

One test of how serious both Democrats and the Bush Administration is about defending America against missile attack is whether they are ready to use the ultimate high ground - outer space. The best time to hit a ballistic missile is just after blast off when it is climbing against of gravity and emitting a massive heat signature. This is known as “Boost Phase Intercept.” In 1992 a space-based system that could perform this task known as Brilliant Pebbles was being developed by the Strategic Defense Initiative Organization [SDIO]. It was canceled by Les Aspin, Clinton’s first Secretary of Defense, who claimed that he was “taking the Stars out of Star Wars.”

Aspin also imposed drastic cuts to the long term missile defense science and technology research budget, cuts from which that part of the program has never really recovered.

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Coming Soon: The Orbital Battle Station

Pajamas Media has learned that the Bush administration is going to ask Congress for funding to begin development of an “orbital battle station” that will be able to attack enemy missiles in their vulnerable boost phase.

Each Battle Station would be a fairly large satellite that carried a number, perhaps 40 to 50 infrared guided “kill vehicles.” On orders from the ground, the battle station would launch these kill vehicles, roughly about the size of a loaf of bread, at incoming missiles. Professor Everett Dolman of the School of Advanced Air and Space Studies at Maxwell Air Force Base in Alabama and the author of %%Amazon= 0714681970 Astropolitik - Classical Geopolitics in The Space Age%%, says that space based systems are “the only viable option for global defense against the most likely threats, such as an attack by Iran against Israel or by Pakistan against India.”

“The technology,” Dolman said, “for a basic orbital interceptor that could hit an ICBM in mid flight has been available to the U.S. for at least two decades. Indeed should the U.S. dedicate itself to a fast track development and deployment of several dozen networked anti-missile satellites, it could have a baseline capability in place within two years.”

The Bush administration pending request for an orbital battle station will surely touch off a brawl over “space weaponization”. Loren Dealy a spokeswoman for the Democrats on the House Armed Services Committee told Pajamas Media: “Our members have serious concerns with the concept of space-based interceptors.”

Critics have long believed space-based systems would set off an arms race in space that would destabilize international relations. Keeping space a sanctuary for our satellites seems reasonable, until one recognizes that this leaves billions of dollars of vital U.S. military assets defenseless targets that could be hit and destroyed by primitive space weapons that Iran or others could build regardless of any restraint we show. The orbital battle stations could possibly knock out such weapons the same way they knock out long range missiles.

While some Democrats can be expected to fight tooth and nail against any orbital battle station, the defense community suggests that others such as Rep. Norm Dicks (D-WA) are not going to reject space-based defense as out of hand. Others such as Rep. John Spratt (D-SC) may want to slow things down. Last May, he said “We owe it to ourselves to understand the full ramifications of a move into space before we introduce this additional variable into the missile defense equation.” Overall they may spend the same sums the GOP was planning to spend, but would keep any effective defense systems on the drawing board forever.

Now that the Democrats are in charge of both houses of Congress for the first time since the 9-11 attacks, they face an important and ultimately revealing choice: will they to stick with the bromides beloved by their base or work with the president to safeguard the country from North Korean and Iranian missiles?


Taylor Dinerman writes a weekly column for the Space Review (www.thespacereview.com), and has written on space and defense issues for The Wall Street Journal, National Review, and Ad Astra, the magazine of the National Space Society, Space News and elsewhere. He was an author of the textbook ‘Space Science for Students’ and is a consultant for the U.S. Defense Department. His views in no way represent those of the Department.

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The World Bank Funds Israel-Palestine Wall

Project Censored 2007
2007
Chapter 9
pp. 64 - 68.

Community Evaluator: April Hurley, M.D.
Student Researchers: Bailey Malone and Lisa Dobias
The World Bank Funds Israel-Palestine Wall
Sources:

Left Turn, Issue #18
Title: "Cementing Israeli Apartheid: The Role of World Bank"
Author: Jamal Juma'

Al-Jazeerah, March 9, 2005
Title: "U.S. Free Trade Agreements Split Arab Opinion"
Author: Linda Heard

Despite the 2004 International Court of Justice (ICJ) decision that called for tearing down the Wall and compensating affected communities, construction of the Wall has accelerated. The route of the barrier runs deep into Palestinian territory, aiding the annexation of Israeli settlements and the breaking of Palestinian territorial continuity. The World Bank's vision of "economic development," however, evades any discussion of the Wall's illegality.

The World Bank has meanwhile outlined the framework for a Palestinian Middle East Free Trade Area (MEFTA) policy in their most recent report on Palestine published in December of 2004, Stagnation or Revival: Israeli Disengagement and Palestinian Economic Prospects."

Central to World Bank proposals are the construction of massive industrial zones to be financed by the World Bank and other donors controlled by the Israeli Occupation. Built on Palestinian land around the Wall, these industrial zones are envisaged as forming the basis of export-orientated economic development. Palestinians imprisoned by the Wall and dispossessed of land can be put to work for low wages.

The post-Wall MEFTA vision includes complete control over Palestinian movement. The report proposes high-tech military gates and checkpoints along the Wall, through which Palestinians and exports can be conveniently transported and controlled. A supplemental "transfer system" of walled roads and tunnels will allow Palestinian workers to be funneled to their jobs, while being simultaneously denied access to their land. Sweatshops will be one of very few possibilities of earning a living for Palestinians confined to disparate ghettos throughout the West Bank. The World Bank states:

"In an improved operating environment, Palestinian entrepreneurs and foreign investors will look for well-serviced industrial land and supporting infrastructure. They will also seek a regulatory regime with a minimum of 'red tape' and with clear procedures for conducting business. Industrial Estates (lEs), particularly those on the border between Palestinian and Israeli territory, can fulfill this need and thereby play an important role in supporting export based growth."

Jamal Juma' notes that the "red tape" which the World Bank refers to can be presumed to mean trade unions, a minimum wage, good working conditions, environmental protection, and other workers' rights that will be more flexible than the ones in the "developed" world. The World Bank explicitly states that current wages of Palestinians are too high for the region and "compromise the international competitiveness" even though wages are only a quarter of the average in Israel. Juma' warns that on top of a military occupation and forced expulsion, Palestinians are to be subjects of an economic colonialism.

These industrial zones will clearly benefit Israel abroad where goods "Made in Palestine" have more favorable trade conditions in international markets. IPS reporter Emad Mekay, in February 2005, revealed the World Bank's plan to partially fund Palestinian MEFTA infrastructure with loans to Palestine. Israel is not eligible for World Bank lending because of its high per capita income, but Palestine is. Mekay quotes Terry Walz of the Washington-based Council for the National Interest, a group that monitors U.S. and international policy towards Israel and the Palestinians: "I must admit that making the Palestinians pay for the modernization of these checkpoints is an embarrassment, since they had nothing to do with the erection of the separation wall to begin with and in fact have protested it. I think the whole issue is extremely murky."[1]

Mekay goes on to note that this is the first time the World Bank appears ready to get actively involved in the Israeli occupation of Palestinian land. Former World Bank president James Wolfensohn rejected this possibility last year. Neo-conservative Paul Wolfowitz was, however, confirmed as president of the World Bank on June 1, 2005.

In breach of the ICJ ruling, the U.S. has already contributed $50 million to construct gates along the Wall to "help serve the needs of Palestinians."

Linda Heard reports for Al-Jazeerah that the U.S. is currently pushing for bilateral Free Trade Agreements (FTAs) with various Arab states, including members of the Gulf Cooperation Council (GCC), as part of a vision for a larger Middle East Free Trade Agreement. President Bush hopes the MEFTA will encompass some twenty regional countries, including Israel, and be fully consolidated by 2013.

Many in the region are suspicious of the divisive trend of bilateral agreements with the U.S. and worry that the GCC will end up with small, fragmented satellite economies without any leverage against world giants. Prince Saud Al-Faisal, the Saudi foreign minister, stated, "It is alarming to see some members of the GCC enter into separate agreements with international powers ... They diminish the collective bargaining power and weaken not only the solidarity of the GCC as a whole, but also each of its members."
Note

[1] Emad Mekay, "World Bank and U.S.: Palestinians Should Pay for Israeli Checkpoints," IPS, February 25, 2005.
UPDATE BY JAMAL JUMA'

"Cementing Israeli Apartheid: The Role of the World Bank" was written last summer as part of Stop the Wall's campaign efforts to widen attention of those horrified by the construction of the 700 km long wall around Palestinian cities and villages. It aimed to expose the vicious mechanism of control, exploitation, and dispossession devised by the Occupation, but moreover the activities of the international community in safeguarding the Wall and making Palestinian ghettos sustainable.

It opens a chapter in a story that no one wants to hear: the globalization of apartheid in the Occupation of Palestine. Zionism has its own racist interest in ghettoizing 4 million Palestinians in the West Bank and Gaza and securing the judaization of Jerusalem. It ensures a Jewish demographic majority and ethnic supremacy over as much of Palestine as possible, working against all UN resolutions and the recent ICJ ruling on the Wall.

Within this project it finds allies in the international community keen to exploit cheap Palestinian labor locked behind Walls and gates. The degree to which Zionism and the international community – headed by the World Bank – work together with the aim of controlling every aspect of Palestinian life has become increasingly evident since the Left Turn article.

The Palestinian Authority's (PA) role is reduced to the administrators of the Bantustans. The Palestinian people resoundingly said no to Bantustans at the ballot boxes last January.

While the Bank's initial responsibility was to devise economic policies for the sustainability of a Palestinian Bantu-State, the institution is now facilitating efforts to ensure that Palestinians cannot interfere in the plans of the Occupation and the international community. The World Bank is gearing up to take over the payrolls of various Palestinian institutions, should the PA not comply with Zionist and global interests.

While global IFIs meticulously plan the financial and material survival and political control of the ghettos, Ehud Olmert offers the slogan of "Final Borders" to describe the project. In legitimizing the Wall, annexing Jerusalem, increasing the number of settlers, and denying the mere existence of the refugees, Olmert finds a willing accomplice in the Bank and its policy makers in Washington, who look to cash in on the Bantu-State.

The Palestinian people will never accept the plan, so it is hoped that they will be starved into it. But we will not kneel down. After dozens of massacres, killings, arrests, and almost sixty years of life in the Diaspora, surrender is too high a price to pay. We are not asking for outside institutions to provide us with bread, but to comply with their duties under international law and support our struggle for justice and liberation.

None of the horrific realities of life in Palestine are apparent in the headlines and doublespeak of mass media and international diplomacy, where our ghettoization is called "state-building." International complicity with Israeli apartheid is dressed up as "humanitarian aid." Palestinians are supposed to be grateful for gates in the Wall so they can be funneled between ghettos.

Just like Olmert's schemes with the White House, the media shuns and neglects the rights and voices of Palestinians. Neither the daily killing of our people, nor the destruction of our homes, the dispossession of our farmers, or the sufferings of 6 million refugees make headlines. The consumers of mainstream media outlets are left to discuss the diatribe of "peace" and "borders," disputed between the protagonists of our oppression, while the racism, ethnic cleansing, and ghettoization continue.

More information on the issue is to be found at: www.stopthewall.org

US pressured Blair into arms bribery inquiry

By Francis Elliott

Published: 03 December 2006

A bribery investigation threatening the future of 50,000 British jobs followed heavy pressure on Tony Blair from George Bush's administration, The Independent on Sunday can reveal.

Saudi Arabia says it will scrap an order with BAE Systems for 72 Eurofighter Typhoons worth around £40bn unless the Serious Fraud Office (SFO) stops probing previous arms deals with the company.

The Arab nation has reportedly set a deadline that expires this week for the investigation to be called off.

Now documents released under US freedom of information laws reveal how the probe followed arm-twisting by the Bush administration.

They show how Britain's most senior defence civil servant was taken to task by the Pentagon over "a longstanding, widespread pattern of bribery allegations involving BAE systems" in July 2002.

Sir Kevin Tebbit, then the top civil servant at the Ministry of Defence, had an uncomfortable meeting with the US Assistant Secretary of State for Economic and Business Affairs, E Anthony Wayne.

Mr Wayne said that, though it had signed up to international anti-bribery agreements, "the UK was slow to take action to correct perceived deficiencies".

He also complained of the "consistent pattern of alleged behaviour, over time" and, in a clear accusation that the British government was aware of the problem, added that: "Press accounts reinforce material from more sensitive sources."

A memo, setting out his "MUST DO" items, declared: "Ask what the British government has done to investigate allegations of bribery by BAE, not only in connection with recent projects, but in connection with older contracts for which bribe payments may still be ongoing ... In the US, this volume of allegations would have triggered a Department of Justice Criminal Division investigation long ago".

The SFO bribery investigation into the giant Al Yamamah arms deal, struck in 1985, started in July 2004 after detectives were shown evidence suggesting kickbacks had been paid. Detectives are reported to be investigating allegations of a £60m "slush fund".

BAE Systems denies any wrongdoing and insists that it does not tolerate "unlawful, dishonest or harmful" behaviour, while the British government maintained that it had tightened up anti-bribery legislation

Iraqi Army division deepens discord

Posted on Sat, Dec. 02, 2006


McClatchy Newspapers

BAGHDAD, Iraq - The overwhelmingly Shiite Muslim military force at the forefront of U.S. and Iraqi plans to secure one of the nation's most fractious provinces is accused of arresting hundreds of Sunni men on little or no evidence, threatening to rape a suspect's wife to coerce a confession, and intimidating its commander's critics, according to interviews with Iraqi and U.S. officials.

Backed by U.S. troops, the Iraqi Army's 5th Division on Saturday launched a new offensive to rout suspected al-Qaida-allied terrorists from Baquba, the capital of a province infested with Sunni insurgents, Shiite militias, warring tribes and criminal gangs.

While a U.S. military statement said the weekend operation shows the "commitment of Iraqi army officers and soldiers to protect and secure the people," local residents and Sunni leaders point to the Iraqi division's track record as one of the chief problems plaguing the restive Diyala province north of Baghdad.

Brig. Gen. Shakir Hulayl al-Kaabi, commander of the division, oversees a mostly Shiite force in an area where at least half the population is Sunni. The American officers who previously worked with him have been reported as saying they tried to have him removed for refusing orders and acting on a sectarian agenda. Sunni leaders say his men are waging a campaign of collective punishment because of vicious Sunni insurgent attacks against Shiites and U.S.-led forces.

Despite the laundry list of accusations against al-Kaabi, the Shiite-led government in Baghdad keeps promoting him. With U.S. forces planning to hand over full military control of Diyala and other provinces this spring, the experience of the 5th Division is viewed by many as a harbinger of deep troubles to come as American troops gradually move on.

In the past week, the 5th Division took on supervision of even the local police force, which repeatedly has come under attack and suffers from logistical and leadership problems.

"This will just lead to more provocations and confrontations between the 5th Division and the existing groups," said Salim al-Jubouri, a Sunni law professor who represents Diyala in the Iraqi parliament.

U.S. Army Col. David W. Sutherland, commander of U.S.-led forces in Diyala, acknowledged hearing reports of questionable behavior by the Iraqi division, but said efforts are under way to turn it into a force more representative of Diyala's diverse population of Sunnis, Shiites and Kurds. Sunni politicians counter that the U.S. military has simply picked a side in the sectarian battles raging here - and it wasn't theirs.

"The U.S. Army does not pick sides. We are not partisan," Sutherland, who leads the 1st Cavalry Division's 3rd Heavy Brigade Combat Team, said in an interview Friday.

"We work with elected officials," he said.

Diyala's pastoral terrain of palm groves and citrus orchards make it an ideal hideout for al-Qaida-allied insurgent groups, which have carried out a series of devastating attacks against U.S. and Iraqi forces as well as sectarian purges against Shiites in the area. Abu Musab al-Zarqawi, leader of al-Qaida in Iraq, was killed in a U.S. air strike in a village not far from Baquba.

Terrorist activity has made life increasingly untenable for both Sunnis and Shiites, several residents said.

In July, the 5th Division took lead control for security in Baquba after it became apparent the local police force was outgunned by the Sunni insurgents. Almost immediately, complaints poured forth that the Iraqi troops were conducting attacks against Sunni neighborhoods to avenge the insurgents' violence against Shiites.

Shiite officials argue that the 5th Division is just an aggressive force committed to weeding out insurgents. A raid on Friday in a Sunni neighborhood captured a suspected insurgent leader, according to a U.S. military statement. Wire services reported another 30 terror suspects also were detained on Saturday, among them two Egyptians.

"The police reached the point seven months ago where they could no longer hold on and fight terrorism, so that's why we had to ask for the (Iraqi) army's help," Diyala Gov. Raad Rasheed Jawad said in a telephone interview from Baquba. "Since we called in the 5th Division, we've noticed improvements to the security situation . . . People might complain about the 5th Division, but I assure you it's just individual cases, not the whole division."

Jawad said he's survived six assassination attempts. After one of the attacks, accusations swirled that his Sunni deputy, Aouf al-Rahoumi, was involved. Soldiers from the 5th Division arrested a suspect identified to McClatchy Newspapers only as a Sunni government employee named Udai.

Udai, who is still in detention, wrote a letter recounting his interrogation and sent it to the Iraqi Islamic Party. Al-Jubouri, the Sunni legislator from Diyala and a member of the Islamic Party, said Udai's letter contained details about how the Iraqi 5th Division troops dragged his wife into the interrogation area and threatened to rape her if Udai didn't confess that Rahoumi, the deputy governor, was involved in the assassination plot.

"They tortured him to the point where he confessed he was involved," al Jubouri said. "Then we in the Islamic Party called his wife and recorded her saying over the phone, `They took me and they threatened to rape me if he didn't say Aouf Rahoumi was involved in the matter.' We took the recording and the letter to the provincial officials and to the Americans. Nothing has been done."

The U.S. military, which oversees tactical operations for the 5th Division, deferred to the Shiite-led government.

"I'm aware of the Udai case," Sutherland said. "That is an Iraqi investigation."

No Iraqi official in the defense ministry could be reached for comment on the status of the investigation. Rahoumi, recently returned from Syria, also was unavailable. Jawad, the governor, spoke only vaguely about the incident.

"I can't judge people unless I have proof," he said.

Sunni residents and politicians say the Udai case wasn't the first time their concerns have been brushed aside. For months, they've complained that elements of the 5th Division are more loyal to Shiite militias such as the Mahdi Army and Badr Brigade than to the Iraqi military. Among their grievances: the 5th Division's alleged use of death squads to eliminate political rivals; the mass arrests of Sunnis who were later released uncharged and the refusal to recruit Saddam Hussein-era officers into the 5th Division.

"I understand there were operations done previously by General Shakir, before I got here," that angered the Sunni population, Sutherland said. He added that U.S. forces have helped the general introduce better training for 5th Division troops, conduct intelligence-driven operations and start a recruiting program to enlist more Sunni troops.

The 5th Division "is not necessarily representative of the population of Baquba, but it is something General Shakir is working on," Sutherland said.

Diyala's police and military were in such disarray earlier this year that the previous U.S. command delayed plans to transfer full control to the Iraqi military in October. The new handover date is just months away.

"Right now, the Iraqi Army is expected to transfer to Iraqi ground force command in early February," Sutherland said. "There's nothing I've seen to indicate that won't happen."

McClatchy Newspapers correspondents in Baquba and Baghdad contributed to this report. They aren't named for security reasons.


Has He Started Talking to the Walls? : FRANK RICH - Bush’s Unreality

THE COMPLETE ARTICLE WITH ALL HYPERLINKS

The New York Times

OP-ED COLUMNIST
Has He Started Talking to the Walls?
By FRANK RICH

Published: December 3, 2006

The more President Bush loses his hold on reality, the more language is severed from its meaning altogether.


IT turns out we’ve been reading the wrong Bob Woodward book to understand what’s going on with President Bush. The text we should be consulting instead is “The Final Days,” the Woodward-Bernstein account of Richard Nixon talking to the portraits on the White House walls while Watergate demolished his presidency. As Mr. Bush has ricocheted from Vietnam to Latvia to Jordan in recent weeks, we’ve witnessed the troubling behavior of a president who isn’t merely in a state of denial but is completely untethered from reality. It’s not that he can’t handle the truth about Iraq. He doesn’t know what the truth is.

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