Supposed Underwear Bomber is CIA Informant

May 8, 2012 Leave a comment

AP | MAY 8, 2012

NEWS UPDATE:

U.S. and Yemeni officials say the supposed would-be bomber at the heart of an al-Qaida airliner plot was actually an informant working for the CIA.

The revelation, first reported by The Los Angeles Times, shows how the CIA was able to get its hands on a sophisticated underwear bomb well before an attack was set in motion.

Officials say the informant was working for the CIA and Saudi Arabian intelligence when he was given the bomb. He then turned the device over to authorities. Officials say the informant is safely out of Yemen.

The officials spoke on condition of anonymity to discuss the sensitive intelligence matter.

ORIGINAL REPORT:

In the wake of a failed al-Qaida plot to blow up a U.S.-bound airliner, the Obama administration on Tuesday sought to reassure travelers that security at American airports is as good as it has ever been.

Overseas, where such plots originate, security is a different story.

While airline checks in the United States mean passing through an onerous, sometimes embarrassing series of pat-downs and body scans, procedures overseas can be a mixed bag. The U.S. cannot force other countries to permanently adopt the expensive and intrusive measures that have become common in American airports over the past decade.

The latest al-Qaida plot originated in Yemen and used an upgrade over the bomb that failed to detonate on board an airplane over Detroit on Christmas 2009. Officials said this new bomb was meant to be concealed in a passenger’s underwear, contained no metal and used a chemical _ lead azide _ that was to be a detonator in a nearly successful 2010 plot to attack cargo planes.

Working with an al-Qaida informant and foreign intelligence services, the CIA disrupted the latest plot before the would-be bomber even picked a target or bought his tickets, officials say.

The FBI is still analyzing the sophisticated explosive. But, based on preliminary findings, security procedures at U.S. airports remained unchanged a day after the plot became public.

That was a reflection of both the U.S. confidence in its security systems and a recognition that the government can’t realistically expect travelers to endure much more. Increased costs and delays to airlines and shipping companies could have a global economic impact, too.

“I would not expect any real changes for the traveling public,” said House Intelligence Committee Chairman Mike Rogers, R-Mich. “There is a concern that overseas security doesn’t match ours. That’s an ongoing challenge.”

The Transportation Security Administration sent advice to some international air carriers and airports about security measures that might stave off an attack from a hidden explosive. It’s the same advice the U.S. has issued before, but there was a thought that it might get new attention in light of the foiled plot.

The U.S. has worked for years to try to improve security for U.S.-bound flights originating at international airports. And many countries agree that security needs to be better. But while plots such as the Christmas attack have spurred changes, some security gaps that have been closed in the U.S. remain open overseas.

Officials believe that body scanners, for instance, probably would have detected this latest attempt by al-Qaida to bring down a jetliner. Such scanners allow screeners to see objects hidden beneath a passenger’s clothes.

But while scanners are in place in airports nationwide, their use is scattershot overseas. Even in security-conscious Europe, the European Union has not required full-body imaging machines for all airports, though a number of major airports in Paris, London, Frankfurt and elsewhere use them.

All passengers on U.S.-bound flights are checked against terrorist watch lists and law enforcement databases.

In some countries, U.S. officials are stationed in airports to offer advice on security matters. In some cases, though, the U.S. is limited to hoping that other countries follow the security advice from the Transportation Security Administration.

“Even if our technology is good enough to spot it, the technology is still in human hands and we are inherently fallible,” said Rep. Adam Schiff, D-Calif., a member of the House Intelligence Committee. “And overseas, we have varying degrees of security depending on where the flight originates.”

Al-Qaida has repeatedly tried to take advantage of those overseas gaps. The Christmas 2009 bombing originated in Amsterdam, where the bomber did not receive a full-body scan. And in 2010, terrorists smuggled bombs onto cargo jets, which receive less scrutiny than passenger planes.

In both those instances, the bombs were made by al-Qaida’s master bomb maker in Yemen, Ibrahim Hassan al-Asiri. Officials believe this latest bomb was the handiwork of al-Asiri or one of his students.

The CIA was tipped off to the plot last month by an informant close to al-Qaida, officials said, speaking on condition of anonymity because they were not authorized to discuss the case. The agency recovered the bomb in recent weeks, but it’s not clear what happened to the would-be suicide bomber.

The bomber “is in no position to harm us,” Rogers said.

“Neither the bomb nor any other part of the plot represents an ongoing threat to the U.S.,” Schiff said.

In the meantime, Americans traveled Tuesday with little apparent concern.

“We were nervous _ for a minute,” said Nan Gartner, a retiree on her way to Italy from New York’s John F. Kennedy Airport. “But then we thought, we aren’t going anywhere near Yemen, so we’re OK.”

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HSBC Permits Money Laundering for Wealthy Clients

May 8, 2012 Leave a comment

Documents and E-mails show that the bank not only doesn’t inquire about the origin of funds, but also works hard to conceal the transfer of large amounts of cash from clients of Iranian, Lebanese, Brazilian and Cuban origin.

Most suspicious transactions are done through the HSBC’s New York and Miami offices.

By CARRICK MOLLENKAMP, BRETT WOLF and BRIAN GROW | VANCOUVER SUN | MAY 8, 2012

In April 2003, the Federal Reserve Bank of New York and New York state bank regulators cracked the whip on HSBC Bank USA, ordering it to do a better job of policing itself for suspicious money flows. Staff in the bank’s anti-money laundering division, according to a person who worked there at the time, flew into a “panic.”

The U.S. unit of London-based HSBC Holdings Plc quickly rallied. It hired a tough federal prosecutor to oversee anti-money laundering efforts. It installed monitoring systems for operations that had grown unwieldy during the bank’s U.S. expansion. The aim, as HSBC said in an agreement with regulators at the time, was to “ensure that the bank fully addresses all deficiencies in the bank’s anti-money laundering policies and procedures.”

Nearly a decade later, the effort has failed to satisfy law-enforcement officials.

The extent of that failure is laid out in confidential documents reviewed by Reuters that originate from investigations of HSBC’s U.S. operations by two U.S. Attorneys’ offices.

These documents allege that from 2005, the bank violated the Bank Secrecy Act and other anti-money laundering laws on a massive scale. HSBC did so, they say, by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity.

In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a “systemically flawed sham paper-product designed solely to make it appear that the Bank has complied” with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.

In that letter, Ihlenfeld compared HSBC unfavorably to Riggs Bank. In 2004 and 2005, that scandal-plagued Washington bank was fined a total of $41 million after it was found to have violated anti-money laundering laws, and it was acquired by PNC Financial Services.

“HSBC is to Riggs, as a nuclear waste dump is to a municipal land fill,” Ihlenfeld wrote.

The allegations laid out in the Ihlenfeld letter and other documents couldn’t be confirmed. It is possible that subsequent inquiries have led investigators to alter their views of what went on inside HSBC’s compliance operation.

As they are, the documents reviewed by Reuters, combined with regulatory filings, court documents and interviews with current and former HSBC employees, paint a damning portrait of a bank allegedly unable, and unwilling, to police itself or its clients.

HSBC’s U.S. anti-money laundering division – the people charged with ensuring that the bank toes the line of regulators and law enforcement – has experienced high turnover among executives. Since 2005, at least half a dozen overseers have come and gone. Compliance staff also encountered pushback from bankers eager to maintain relationships with lucrative clients whose dealings raised red flags.

In the Miami office – an important center for HSBC’s private-banking and retail operations – a longtime private banker was fired for alleged sexual harassment after he warned compliance officers that clients were engaged in shady dealings.

In one email exchange submitted as evidence in that case, employees debated whether the bank should help a Miami client get around U.S. sanctions by moving the client’s business to HSBC’s Hong Kong office. “I believe that the best outcome would be for the customer to open a relationship with Hong Kong just for leters (sic) of credit purposes. He travels there all the time,” private banker Antonio Suarez wrote in a 2008 email. Suarez has since left the bank and couldn’t be reached for comment.

UNDER THE RADAR

The revelations come as HSBC confronts multiple investigations into its internal policing abilities. The Justice Department, the Federal Reserve, the Office of the Comptroller of the Currency, the Manhattan district attorney, the Office of Foreign Assets Control and the Senate Permanent Subcommittee on Investigations are scrutinizing client activities such as cross-border movements of bulk cash, and transactions linked to Iran and other parties under U.S. economic sanctions, the bank said in a February regulatory filing.

“We continue to cooperate with officials in a number of ongoing investigations,” HSBC spokesman Robert Sherman said. “The details of those investigations are confidential, and therefore we will not comment on specific allegations.” HSBC said in its February filing that it was likely to face criminal or civil charges related to the probes.

A successful case against HSBC could result in an onerous fine and represent one of the most significant money laundering cases ever brought against an international bank. It also would draw unaccustomed attention to the challenges governments — and financial institutions — face in monitoring the trillions of dollars flowing through banks’ back-office operations, flows essential to the daily functioning of the global financial system.

“Disguised in the trillions of dollars that is transferred between banks each day, banks in the U.S. are used to funnel massive amounts of illicit funds,” Jennifer Shasky Calvery, head of the Justice Department’s Asset Forfeiture and Money Laundering Section, said in congressional testimony on organized crime in February.

In response to Reuters inquiries about the investigations, Gary Peterson, chief compliance officer of HSBC’s U.S. bank operations, said: “Since joining HSBC in 2010, I’ve been proud to lead an AML (anti-money laundering) team that has vastly increased investments in people, systems and expertise. We are continuously seeking to strengthen our core AML mission: to detect and deter money laundering and terrorist financing – and our efforts are showing results.”

To date, the only enforcement action detailing any anti-money laundering shortcomings at HSBC was a 2010 consent order from the Office of the Comptroller of the Currency, the Treasury agency that is HSBC’s chief regulator. The OCC, calling HSBC’s compliance program “ineffective,” told the bank to conduct a review to identify suspicious activity. This “look-back” was expected to yield a report to HSBC and regulators. The status of the report isn’t known. A spokesman for the OCC declined to comment.

The West Virginia U.S. Attorney’s probe of HSBC, which ran from 2008 until at least 2010, originated in a case against a local pain doctor who allegedly used HSBC accounts to launder ill-gotten gains from Medicare fraud. Over time, the U.S. Attorney’s office began to discern that, as Ihlenfeld wrote in his letter, the doctor’s case was just “the tip of the iceberg” in terms of the volume of suspicious money sluicing through HSBC.

The U.S. attorney for the Eastern District of New York in Brooklyn – one of the most powerful prosecutors outside of Justice Department headquarters in Washington – has conducted a parallel investigation, in collaboration with the Justice Department’s money laundering section.

Specifics on the investigations have until now been cloaked in secrecy. The documents reviewed by Reuters for the first time fill in some of the details. Taken together, they depict apparent anti-money laundering lapses of extraordinary breadth. Among them, according to the documents:

* The bank understaffed its anti-money laundering compliance division and hired “gullible, poorly trained, and otherwise incompetent personnel.” In 2009, the OCC deemed a senior compliance official at HSBC to be incompetent – the same executive in charge of implementing a new anti-money laundering system.

* HSBC failed to review thousands of internal anti-money laundering alerts and generate legally required suspicious activity reports, or SARs, on transactions picked up by the bank’s internal monitoring system. SARs are important because they are sent to U.S. law enforcement and scrutinized for leads to criminal activity. In May 2010, the bank’s backlog of alerts was nearly 50,000 and “growing exponentially each month,” according to one of the documents.

* Hundreds of billions of dollars moved unchecked each year through various bank operations because of lax due diligence and monitoring of accounts with foreign correspondent banks, which are financial institutions that rely on U.S. banks for processing services. The bank maintained accounts with “high risk” affiliates such as “casas de cambios” – Mexican foreign-exchange dealers – widely suspected of laundering drug-trafficking proceeds, and some Mexican and South American banks.

* In some instances, “management intentionally decided” not to review alerts of suspicious activity. An investigation summary also says, “There appear to be instances where Bank employees are misrepresenting” data sent to senior managers, and where management altered risk ratings on certain clients so that suspect transactions didn’t set off alarms.

Sherman, the HSBC spokesman, said the bank cleared the backlog of alerts and has remained current. Sherman also said the bank “regularly reviews risk ratings. We have revised and strengthened our country risk rating review policies.”

Spokesmen for the U.S. Attorney in Wheeling, West Virginia, and for the U.S. Attorney in Brooklyn declined to comment. The Justice Department in Washington also declined to comment, citing “an ongoing investigation into this matter.”

THE MIAMI CONNECTION

HSBC was born in 1865 as the Hongkong and Shanghai Banking Corp in the then-British colony of Hong Kong. It had little presence in the U.S. market until its purchase in the 1980s of Marine Midland Banks Inc based in Buffalo, New York.

Now the fifth-largest bank in the world in terms of market value, HSBC had $2.6 trillion in assets at the end of 2011 and operations in 85 countries and territories. Its North American business, which includes HSBC Bank USA and a consumer finance unit, accounts for about 5 percent of HSBC’s profit.

In 1999, HSBC’s U.S. unit paid $10 billion to buy Republic New York Corp and a European affiliate, banks controlled by Lebanese financier Edmond Safra. The deal doubled HSBC’s private bank to 55,000 clients with $120 billion in assets and broadened business in New York, Florida, Latin America and Europe.

The purchase also yielded one of the world’s biggest banknote businesses, an operation that handles bulk cash exchanges between central banks and large commercial banks. In 2003, HSBC plunged into the U.S. market for subprime lending, paying $14 billion for Household International Inc.

By then, all banks faced U.S. regulatory pressure aimed at stopping shady money flows. In the wake of the September 11, 2001, attacks, the Patriot Act took effect, attempting, among other things, to choke off terrorist financing by strengthening requirements that banks look for and report suspicious activity. In recent years, U.S. law enforcement added an emphasis on money tied to the illegal drug trade.

When the 2003 order came down from regulators for HSBC to improve its anti-money laundering efforts, the bank had no centrally organized means of monitoring the movement of money across borders. That’s when it hired Teresa Pesce. Pesce came from the high-profile U.S. Attorney’s office in Manhattan, where she made a name for herself as a tough prosecutor overseeing money laundering prosecutions.

Pesce ”knew the ropes,” according to a person who worked in compliance at the time, and the sense among many staffers was that a “savior was here.” One of her first initiatives was to order the installation of the Customer Account Monitoring Program, or CAMP, a technology system designed to filter suspicious retail transactions across HSBC’s U.S. operations.

In 2006, regulators lifted their 2003 order, according to people familiar with the situation.

Pesce left the bank in 2007 to run KPMG LLP’s anti-money laundering consulting business. A lawyer for Pesce declined to comment.

Despite Pesce’s efforts, problems with HSBC’s program persisted. In 2009, the OCC determined that Lesley Midzain, a compliance executive with little direct experience running anti-money laundering programs, was incompetent. She was in charge of the installation of a monitoring program to replace Pesce’s CAMP system, which the OCC had determined was “inadequate to support the volume, scope and nature of international money transfer transactions,” according to the documents reviewed by Reuters. Efforts to locate and obtain comment from Midzain were unsuccessful.

The former compliance-division staffer said that in the Miami office in particular, with millions of dollars from Mexico, Brazil, Argentina and other countries flowing through the Premier private-banking business for wealthy clients, “it was a nightmare to figure out what was going on down there.”

Those observations mesh with allegations in a 2010 lawsuit against HSBC brought by Tomas Benitez, a longtime private banker in South Florida who had worked at Republic Bank. Benitez alleged that HSBC fired him in January 2009 after he warned colleagues that clients had violated U.S. restrictions on trade with Iran and Cuba.

HSBC said in a court filing that it fired Benitez for alleged sexual harassment – allegations Benitez denied.

In court documents, Benitez alleged that during an audit meeting in 2008, an unidentified federal bank examiner told HSBC employees that a client referred to only as “CM” “had multiple affiliations whose ties to Iran and Cuba were part of their ordinary course of business.

At a follow-up meeting, the account was discussed because of indications its owner “was funneling large amounts of funds in and out, with no apparent business purpose,” Benitez alleged. He told Clara Hurtado, director of anti-money laundering compliance at HSBC’s private bank in Miami, that the account had ties to Iran and Cuba and “as a result, it should not be maintained,” according to the lawsuit.

After the meeting, Benitez alleged, another banker said “he would not allow Benitez’s word and suspicions to defeat a million-dollar-plus account relationship.” The account wasn’t terminated, Benitez alleged.

Hurtado declined to comment. She left HSBC in 2009, according to her LinkedIn account.

In an email exchange submitted as an exhibit in the lawsuit, Hurtado and other HSBC employees discussed whether the bank could help a Miami client avoid violating U.S. sanctions by issuing letters of credit for the client from the bank’s Hong Kong offices, according to Benitez’s lawsuit. “Clara, we are persuing (sic) another solutions……(anything but losing the account!!!),” Suarez, the private banker, wrote in an email. The banker suggested issuing the letters of credit through Hong Kong.

In January 2009, HSBC fired Benitez. In late 2010, a federal judge dismissed his case and demand for pay, saying there was no evidence of a connection between Benitez’s concerns about the accounts and the firing. The judge didn’t address Benitez’s allegations about illicit transactions.

Benitez’s Miami lawyer, Mark Raymond, declined to comment on his client’s behalf.

HSBC spokesman Sherman declined to comment on Benitez’s case. “It’s inappropriate to comment on unsubstantiated allegations in termination of employment cases,” he said.

OBVIOUS TO STOOGES

Around the time Benitez was sounding warnings in Miami, authorities were accelerating an investigation in West Virginia of Barton Adams, a pain clinic operator in the Ohio River town of Vienna. In 2008, the U.S. Attorney in Wheeling indicted Adams on 157 counts of alleged healthcare fraud and other crimes. They allege that Adams moved hundreds of thousands of dollars in Medicare fraud proceeds between a U.S. HSBC account and HSBC accounts in Canada, Hong Kong and the Philippines.

Adams has pleaded not guilty.

In building their case against him, the West Virginia prosecutors determined that HSBC’s compliance problems were systemic. As Ihlenfeld wrote in his letter to the Justice Department: “The Adams money laundering practices – which Moe, Larry, and Curly would dismiss as too transparent – would not be detected by HSBC regardless of who the customer was, or where any transaction occurred.” HSBC, he said, “systematically and egregiously” violated the Bank Secrecy Act.

One document reviewed by Reuters says HSBC developed a “large appetite for risk” after snapping up business with Mexican foreign-exchange houses formerly handled by Wachovia Corp. In 2010, Wachovia agreed to pay $160 million as part of a Justice Department probe that examined how drug traffickers had moved money through the bank.

West Virginia prosecutors focused much of their attention, according to the documents, on HSBC’s failure to report suspicious activity on hundreds of billions of dollars in business from “high-risk” sources.

For instance, 73 percent of accounts with foreign correspondent banks were rated “standard” or “medium” risk and thus weren’t monitored at all, the documents say, noting that oversight of such accounts was “extremely limited despite indications of possible terror financing.” In one example, the bank “summarily cleared as many as 5,000″ internal alerts of suspicious activity from correspondent customers in Argentina after lowering the country’s risk rating.

Investigators cited a litany of failings in the bank’s back-office operations — the vast but mundane business of clearing transactions by moving big sums of money around the globe. In the bank’s “remote deposit capture” business – an operation that electronically zaps checks around the world — HSBC “failed to detect, review and report large volumes of sequentially numbered traveler’s checks” from non-U.S. sources. Such checks are a red flag signaling possible money laundering, regulators have said.

HSBC also repatriated more than $106.5 billion in banknote deposits through foreign correspondent accounts, many of them in Mexico and South America, in a three-year period. And yet, “since 2005, the bank has filed only 19 suspicious activity reports relative to the receipt of bulk cash and banknote activities.”

People familiar with HSBC and the reports said 19 is a low number given the risk of the clients. Between 2005 and 2010, banks and other depository institutions filed more than 3.8 million SARs, according to the Financial Crimes Enforcement Network, a bureau of the Treasury Department.

Similarly, investigators found that HSBC didn’t report any suspicious activity after Drug Enforcement Administration agents posing as drug dealers deposited millions of dollars in Paraguayan banks and then transferred the money to accounts in the U.S. through HSBC. They have also been examining connections between one of the Paraguayan banks and Hezbollah, the Lebanon-based Islamist group classified by the U.S. as a terrorist organization. HSBC has since ended its relationship with the Paraguayan bank, according to government documents.

Ultimately, the U.S. Attorney’s office in West Virginia entered into plea negotiations with HSBC, the documents show. A person familiar with the investigation said a deal could have resulted in one of the largest settlements ever in a bank money laundering case.

For reasons that aren’t clear, prosecutors in West Virginia were told to stand down while the Eastern District of New York and other Justice Department divisions continued to investigate, according to a Justice Department document and an HSBC regulatory filing. The West Virginia probe could ultimately prove to be a narrow slice of a broader case if criminal or civil charges emerge.

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Obesity Nation: America’s Growing Obesity Crisis

May 8, 2012 Leave a comment

Food additives in raw and prepared foods and unlabeled GMO ingredients will dramatically increase the number of fat people to almost half of the population.

By NANCI HELLMICH | USA TODAY | MAY 8, 2012

A new forecast on America’s obesity crisis has health experts fearing a dramatic jump in health care costs if nothing is done to bring the epidemic under control.

The new projection, released here Monday, warns that 42% of Americans may end up obese by 2030, and 11% could be severely obese, adding billions of dollars to health care costs.

“If nothing is done (about obesity), it’s going to hinder efforts for health care cost containment,” says Justin Trogdon, a research economist with RTI International, a non-profit research organization in North Carolina’s Research Triangle Park.

As of 2010, about 36% of adults were obese, which is roughly 30 pounds over a healthy weight, and 6% were severely obese, which is 100 or more pounds over a healthy weight.

“The obesity problem is likely to get much worse without a major public health intervention,” says Eric Finkelstein, a health economist with Duke University Global Health Institute and lead researcher on the new study.

The analysis was presented at the Centers for Disease Control and Prevention’s “Weight of the Nation” meeting. The study is being published online in the American Journal of Preventive Medicine.

The increase in the obesity rate would mean 32 million more obese people within two decades, Finkelstein says. That’s on top of the almost 78 million people who were obese in 2010.

Extra weight takes a huge toll on health, increasing the risk of type 2 diabetes, heart disease, stroke, many types of cancer, sleep apnea and other debilitating and chronic illnesses.

“Obesity is one of the biggest contributors for why healthcare spending has been going up over the past 20 years,” says Kenneth Thorpe, a professor of health policy at Emory University in Atlanta.

The obesity rate was relatively stable in the USA between 1960 and 1980, when about 15% of people fell into the category. It increased dramatically in the ’80s and ’90s and was up to 32% in 2000 and 36% in 2010, according to CDC data. Obesity inched up slightly over the past decade, which has caused speculation that the obesity rate might be leveling off.

Finkelstein, Trogdon and colleagues predicted future obesity rates with a statistical analysis using different CDC data, including body mass index, of several hundred thousand people. Body mass is a number that takes into account height and weight. Their estimates suggest obesity is likely to continue to increase, although not as fast as it has in the past.

Finkelstein says the estimates assume that things have gotten about as bad as they can get in the USA, in terms of an environment that promotes obesity. The country “is already saturated” with fast-food restaurants, cheap junk food and electronic technologies that render people sedentary at home and work, he says. “We don’t expect the environment to get much worse than it is now, or at least we hope it doesn’t.”

In an earlier study, Finkelstein and experts from the CDC estimated that medical-related costs of obesity may be as high as $147 billion a year, or roughly 9% of medical expenditures. An obese person costs an average of $1,400 more in medical expenses a year than someone who is at a healthy weight, they found. Other researchers have estimated the costs may be even higher.

If the obesity rate stays at 2010 levels instead of rising to 42% as predicted, then the country could save more than $549.5 billion in weight-related medical expenditures between now and 2030, says study co-author Trogdon.

Patrick O’Neil, president of the Obesity Society, a group of weight-control researchers and professionals, says that these new projections “indicate that even more people will be losing loved ones and others will be suffering sickness and living lives that fall short of their promise because of obesity.”

There’s no one-size-fits all solution to a complex problem that has been decades in the making, says Sam Kass, assistant chef and senior policy advisor for Healthy Food Initiatives at the White House. “This national conversation — this national movement — must continue. This is literally life and death we are talking about.”

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Will the Global Political Shakedown be for the best?

May 7, 2012 Leave a comment

By LUIS MIRANDA | THE REAL AGENDA | MAY 7, 2012

All around the world there seems to be a wave of people kicking their leaders’ rear ends. The most recent examples of these manifestations of non-conformity with business as usual politics began in Spain, where Mariano Rajoy took over the steering wheel from a failed Jose Luis Zapatero. Then came Greece, who changed its leader George Papandreou for Lucas Papademos.

Over the weekend, elections in France and Germany, carried on the ball as Moamer Khadafi’s friend, Nicolas Zarkozy was unseated as France’s president. He yielded his post to Mr. Francois Hollande. Angela Merkel suffered significant loses in Germany, as her centre-right government coalition lost power in the state of Schleswig-Holstein. By the end of this week, once the counting of the votes is over with, she could also be a victim of what seems to be a generalized european mini-political quake. In Europe, the only nation that seems to have escaped the technocratic attack was Iceland, whose leaders were not totally in the pockets of the bankers who have now taken over Greece.

Meanwhile, in the United States, most of the media has collaborated to pick Mitt Romney as the Republican candidate for president after Newt Gingrich and Rick Santorum realized they did not have enough cash to financed their campaigns or pay their debts. Both Santorum and Gingrich are lobbying Romney to take care of those debts in exchange for their vote and support. Most of the gains made by Romney comes from his beauty contest victories obtained during the caucus and primaries, which enabled him to get the highest number of unpledged delegates among his fellow candidates.

Different from the European contests, the American election system is more like a pageant, and the candidate is only elected during a national party meeting. Conventional wisdom would dictate that Romney would be elected as the man to face a decaying Barack Obama in November, and that is what the main stream media and the Republican Party’s machine has tried to do since both Santorum and Gingrich left the race. But in the middle of all the chicanery created to have Romney be the candidate for president, the wave of American discontent seems to be rising. Although many state caucuses and primaries were reported as won by Santorum, Gingrich and Romney himself, the official results in several of those states had not been announced. In the last two weeks, at least five states have changed the outcome of the previously announced results. It turns out that it wasn’t Romney, Santorum or Gingrich who won those states. It was Texas Representative Ron Paul.

Nevada, Washington State, Iowa, Maine and Louisiana are now official Paul’s states. He has also made significant gains in Minnesota and Missouri. So, while the Romney campaign was enjoying the feeling of inevitability, a hard working group of Paul supporters made sure that their votes had the weight they were supposed to have up until the last moment. The Paul campaign has quietly picked up an important number of delegates after Romney was officially ‘elected’ by the GOP to face Obama in November. With his recent gains, Paul is making strides to force a brokered convention in Florida, as supposed to allow Romney to enjoy a victory lap all by himself.

The issue with all the political revolts both in Europe and in the US is whether those revolts against the establishment corporate-backed candidates has rendered or will render anything positive for the people who booted their leaders out of office. In the case of Europe there has been little progress, especially in Greece. After George Papandreu left, the country accepted so-called financial aid from the European Union and adopted a harsh package of government austerity whose only significant result has been the increase in political suicides. Greece is in a worse condition than ever before. The thought that a rich country would eventually be able to pay for its debt in no longer the ephimerous guarantee that it was before. Greece, one of those supposed rich countries is now less capable of paying off his debt than before the sovereign debt problem became apparent. Neither is France, Spain, Portugal or any other European nation. So in the case of the Greek, the change has not been that great. It has been for the worse indeed.

In the case of Spain, things are much different. The government led by Mariano Rajoy has basically continues the same strategy that Zapatero had, which is a powerful government sponsored economy. Since Rajoy took power, the government has not done anything to generate more revenue other than raising taxes. It has also adopted austerity programs in exchange for financial bailouts as it increases government spending in traditional entitlement programs. Spain’s financial health is worse today that it was before, and perhaps it is even worse than Greece. In addition to the gigantic out of control debt, the socialist government continues to borrow money at a very high cost. The unemployment rate has reached 24% which has spurred major economic problems everywhere. Why will Spain be worse than Greece? Because its economy is four times the size of Greece. Economic activity in Spain adds up to just about 12% of the GDP generated in the Eurozone, which makes it the fourth most important in the old continent and number 10 in the world.  A Spanish default will cause a quake that whose ripples will be felt all over the planet. It could even mean the collapse of the Eurozone, analysts say.

France’s economic prospects aren’t that much better. This state of affairs together with Nicolas Sarkozy’s thirst for war cost him his position as president. But will the change be for the best? Has socialism ever worked for the best? The questions is not rhetorical as France’s new leader is a socialist. France lost its AAA rating, if that means anything, while its unemployment continues to rise, even with cooked numbers to over 10%. The country is today in a similar situation than Spain and Italy, drowning in economic insecurity and a growing inability to pay its debt, which is a country’s best presentation card to gain trust and obtain cheap credit. The lousy results of Sarkozy’s window dressing economic and fiscal policies resulted in no growth, to which he responded with more proposals to change the direction of the country. Too little too late, many would say as he lost the election to François Hollande. Mr. Sarkozy wanted to impose a an increase in the value-added tax on consumption, allow companies more flexibility to negotiate working hours and pay, and enshrine a balanced-budget requirement in the Constitution. His intentions did not pick up speed with the French, who found out about his secret dealing with murdered Libyan leader Moamer Khadafi.

Perhaps the only country that looks better is Germany, both financially and politically. But this state of affairs may not last too long. Angela Merkel is also managed to shine panic among the german people. The latest example of her failure to deliver is the loss of support, although small, could begin to shape what the national election will look like in 2013. As Germany seems to be the only European state with a stronger footing, a different issue becomes center stage. As reported by the Express newspaper, German foreign minister Guido Westerwelle is working secretly to create an all powerful European leadership position that will merge the powers of the presidency of the European Council and the European Commission while leaving the United Kingdom out of the group. “This is a plot by people who want to abolish nation states and create a United States of Europe,” said one of the opponents of the secret group. Tory MP Douglas Carswell said that it doesn’t matter how the powers of the Council and the Commission are arranged, so long as the technocrats in control of Europe don’t have the ability to dictate the people’s way of living. “They are not elected so they have no legitimacy.”

With the new Greek Prime Minister mortgaging the future of the country by adopting new but ineffective austerity programs and calling austerity a “patriotic duty” there doesn’t seem to be a way out for the Mediterranean nation that now lays in the hands of its creditors. Spain, on the other hand seems to be walking in Greece’s direction as its leaders begin to adopt similar policies of indebtedness and government spending without generating any real job opportunities for the growing numbers of unemployed — especially those under 25 years of age — who are now called the lost generation. “This is the least hopeful and best educated generation in Spain,”   said local blogger Ignacio Escolar. Unemployment for the young in Spain has reached 52% this Spring.

It all comes down to the US then, doesn’t it? Will Americans start a ‘summer spring’ that will continue the wave of much needed change, or will they continue to foolishly trust their corporate chosen leaders to bring about change instead of kicking them out for good? It was the Americans who fought the British for temporary independence after all, wasn’t it? With a skyrocketing debt of over $16 trillion and a growing unemployment rate — some 100 million Americans are out of the work force today – Americans will have to choose between the two party dictatorship model that has dragged them downthe hole they’re in today, or the better option that will indeed get the ball rolling to bring about real change. A major shakedown in the United States could be the trigger for a worldwide awakening and/or rise of unimpressed people who will clamp down on their governments out of control collusion with corporate interests. Someone needs to light up the match in order for the fire to ignite.

Filed under English, Latin America, North America, Politics, World Tagged with , , , , , , , , , , , , ,

Ron Paul Wins Most Maine Delegates

May 6, 2012 Leave a comment

AP | MAY 6, 2012

With Mitt Romney’s GOP presidential nomination all but decided, Ron Paul supporters took control of the Maine Republican Convention and elected a majority slate supporting the Texas congressman to the GOP national convention, party officials said. The results gave the Texas congressman a late state victory.

In votes leading to the close of the two-day Maine convention, Paul supporters were elected to 21 of the 24 delegate spots from Maine to the GOP national convention in Tampa, Fla. The 24th delegate’s seat goes to party Chairman Charles Webster, who has remained uncommitted throughout the process.

Making the Paul takeover complete was the election of Paul supporters to a majority of the state committee seats.

“It’s certainly a significant victory,” said Jim Azzola of South Portland, Cumberland County coordinator for Paul.

Paul, the last challenger to remain in the contest, finished a close second behind Romney in Maine’s GOP caucuses in February, but those results were nonbinding. Not everyone had a chance to cast a ballot before the results were announced, and a snowstorm forced the cancellation of some caucuses, including one in a Paul stronghold. Romney won the February straw poll with 39 percent of the vote to Paul’s 36 percent. Rick Santorum trailed with 18 percent and Newt Gingrich got 6 percent.

Romney’s aides say they do not view Paul as a threat to winning the nomination. But Romney and his team have also been mindful not to do or say anything that might anger Paul’s loyal supporters.

“I think he’s being very careful because he knows how important the Ron Paul voters are — they obviously represent a very different dynamic,” said Mike Dennehy, a former top aide to Republican John McCain’s 2008 campaign. “They are the most passionate and the most frustrated of any voters heading to the polls. And many of them are independents.”

The weekend’s turn of events — in a state neighboring one where Romney served as governor — would indicate the GOP has not yet united behind the presumptive nominee, and there are indications the infighting may last all the way to the national convention.

Paul supporters accused the Romney crowd Saturday of dirty tricks to garner more delegates. “We came here to see democracy in action. We are floored by what happened, absolutely floored to see the cheating,” said Elizabeth Shardlow of Auburn, a Paul activist.

Charles Cragin, a Romney supporter who lost Saturday’s bid to chair the convention, called the turn of events at the Maine convention “bizarre.” Cragin said the Paul-led delegation may not be recognized at the national convention because of violations of rules of procedure this weekend in Augusta.

“They have so phenomenally screwed this up that they will go to Tampa and not be seated,” Cragin said.

Another Romney supporter, delegate John Carson of Kittery, acknowledged “this is a split convention.”

“The Paul supporters have had a successful process and should be congratulated on that,” said Carson, a veteran of numerous state conventions. “I think it’s important that the Romney camp and Paul camp come together and support a single candidate,” Carson said, adding that candidate should be Romney.

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