Kerja Keras Adalah Energi Kita

May 30, 2009

New SEO contest for indonesian blogger which held by Pertamina. This contes were held by Pertamina to introduce their new motto Kerja Keras Adalah Energi Kita to the public. Although this is not purely SEO contest where contestant assesed not only by their SERP rank but also from the content of the blog itself. However,this contest is participated by many indonesian blogger and yet as tool to sharpen SEO skill for blogger and make friendship among blogger itself.

As new motto, Kerja Keras Adalah Energi Kita also a mark for new tranformation of Pertamina itself after for long time has left by their competitor. Pertamina as the only one state owned company in oil and gas should be move forward facing open competition inthis globalization age. Changing in management is a must and new target is set as a new world class oil company. Changing of management practice hopefully will be done through all line of its management in order to reach it’s target.

Eventhough the vision as new world class oil company is not an easy target however it is a must as pertamina has already long experience in oiland gas industry. Still facing with so many problem,including balancing it’s social and business function,but it’s also as trigger to be better and achieve it’s target.

As Pride of Indonesian, Pertamina should be able to reach their vision so that Pertamina will give contribution toward nation development. Finally,with their new motto Kerja Keras Adalah Energi Kita , Pertamina can apllied this motto as a new culture in it’s all level management and not only a retoric motto.


Big Shrinkages In Economy Thwarts All Efforts To Fix It

May 27, 2009
No end to the demands of privileged borrowers, no recovery without investment, the system teeters on insolvency, revenues plunge as the deficit rises, more felony charges on Wall Street, lack of new investment will kill new infrastructure, subprime loans are done…..

US Treasuries and gold have waged a silent fight for dominance in investors’ flight to safety over the past 22 months. Gold has been suppressed over that period by manipulation by the President’s “Working Group on Financial Markets,” via the US Treasury and the privately owned Federal Reserve. In spite of this ongoing intervention into what are supposed to be free markets gold has held its own.

Since the beginning of the year when the 10-year Treasury note yielded 2.35% it has steadily lost ground. It recently rose to 3.36% and is currently at 3.27%. That is a lot of ground lost in spite of manipulation of that market by the Federal Reserve. The Fed’s efforts have been hindered by an enormous amount of debt issued by the Treasury in order to meet funding operations as well as to assist in funding commercial banks’ balance sheets. This is our Treasury taking funds from responsible Americans to finance and subsidize those in the financial world who turned our financial system into a vast gambling casino. In the process the Treasury and the Fed have crowed out commercial investment, which has led our economy into depression. You cannot have recovery without investment. When history studies what has gone on over the past 22 months it will be aghast that those who created the problem have been designated to fix it. These are the greedy, corrupt destroyers of capital that are about to serve us up hyperinflation as part of a cure to gain time in a senseless effort to save the unsavable, our financial system. A system that teeters on the edge of insolvency. Not only have shareholders and bondholders been wiped out, but so have depositors. If you are patient you will see what we mean. This charade cannot go on indefinitely. Sooner or later Murphy’s Law will come into play. That untoward event that no one expects takes place. The money has already been spent and the only way to continue is to issue more money and credit. That issuance currently is about 18% and climbing, and as a result daily the US dollar loses ground to other currencies and to gold. The sale of Treasury securities are absorbing domestic and foreign savings so much so that the Treasury has the Fed buying its bonds, notes and bills directly from the Treasury and from out of the market, along with collateralized debt obligations. The problem with that is that the Fed with limited assets has to create money and credit to do this, and in this process monetize the debt, which is very inflationary immediately.

Then there is another $900 billion to purchase CDOs, collateralized mortgage obligations, better known as toxic waste. These are also purchased by creating money out of thin air. When the Fed purchases these CDOs they are removed from the sellers’ balance sheets and replaced with cash. That cash is then deposited with the Fed and now earns interest. It sits there sterilized until used. When it is eventually used it is very inflationary. On the other hand rather than keep the money on deposit the banks can use the funds to buy Treasuries, which becomes immediately inflationary. The bottom line is the Treasury meets its deficit with manufactured money, the banks improve their balance sheets and the Fed’s balance sheet looks like a garbage pit.

What this means is that either way any recovery is at risk because the absorption of government debt will push interest rates higher, monetary velocity will increase and hyperinflation will ensue. That unfortunately is underway as we write. The die is cast and again as in 2002 there is no turning back. The point of no return has past. There can only be one reason for this unsound monetary policy and that is the financial companies have to be bailed out at any cost and the public must foot the bill. The only time we know of that this has been attempted on this scale was in the Weimar Republic and we all know what happened in that experiment. Trillions of dollars of investment are being crowed out of the market stopping any recovery. There is no chance as well that excess liquidity will be withdrawn from the system. If it is withdrawn deflation will overwhelm inflation and collapse will ensue. As a result of monetization the liquidity is already in the system. When more liquidity is needed the exercise has to be done over and over again, unless sufficient savings are available. Even at 4.2% of GDP that is not nearly enough. The economy hasn’t improved one bit in the last 22 months and we see nothing that tells us that this is going to change for the better.

Once it starts there is no end to the demands. The National League of Cities has asked the US Treasury for a $5 billion interest free loan to capitalize a new municipal bond insurer it plans to create. This would be the first publicly owned US financial guarantor. Fascism marches on. It would be bigger than MBIA $3.8 billion and $11 billion of current market leader Assured Guaranty. The new entity would only insure general obligation and revenue bonds. It would insure $168 billion over five years. This will be another failed enterprise for government, which is hopelessly inept. They just don’t get it.

The G-7 admit to recession, corporate earnings continue to fall, we see minus growth of perhaps 4% into the end of the year, industrial production has fallen quickly and deeply as has trade, unemployment mounts monthly and excess capacity plagues every nation. Some economists see minus 8% or 10% by yearend. Growth stops as federal debt rises.

All of the above were exacerbated by cessation of interbank lending. No one trusted anyone any more. Due to lying by banks and others regarding their balance sheets banks stopped lending, which brought commerce to a standstill. That eventually was solved by the Federal Reserve guaranteeing everyone’s lending, not only in the US, but worldwide – particularly in Europe. How else could 3-month Libor rates have fallen from 4-5/8% to 0.75%?

Making the underlying problems worse American fiscal debt has risen from $368 billion to an estimated $2 to $2.5 trillion for fiscal 2009 ended 9/30/09, as revenues plunge. This is further complicated by the severity of the recession, which began in February of 2007 and in February 2009 graduated into depression. No one but us is willing to admit that, but that is really the way it is. All the comparisons with 1931, 1973, 1981, 1991 and 2001 do not do the current depression its due. It can more easily be compared to the early 1870s, the madness encountered after the Civil War.

As we know the Federal Reserve Act of 1913 was legislated into being as the solution to recessions, panics and depressions. As you can see they have been emminately unsuccessful. That is why we champion the passage of Rep. Ron Paul’s B ill HR 1207, the Federal Reserve Transparency Act of 2009 – a Bill with 179 co-sponsors. The Bill would cause a congressional Audit of the privately owned Fed, which we believe would lead to its demise and with its functions being returned to the US Treasury, which our Constitution provided for.

We are in today’s horrible situation because the Fed encouraged, as a matter of policy, that banks use 40 to 60 times leverage in lending instead of the historically sound ratio of 8 to 10 to one. For each dollar on deposit 8 or 10 could be prudently lent out. Due to the economy at the time subprime real estate loans were encouraged, where borrowers were ill suited for loans. the result was a real estate bubble followed by collapse. This is solely the responsibility of the banks and the Fed. This is a story of excess leverage and greed.

The magnitude of the recession was underscored by the latest numbers from the U.S. Treasury: last month’s individual income tax receipts dropped 44% and corporate tax revenue plunged 65% compared to April 2008. Alarming news, as April is historically the biggest collection month of the year and usually results in a sizable budget surplus for the month.

Every “green job” created with government money in Spain over the last eight years came at the cost of 2.2 regular jobs, and only one in 10 of the newly created green jobs became a permanent job, says a new study released this month. The study draws parallels with the green jobs programs of the Obama administration.

President Obama, in fact, has used Spain’s green initiative as a blueprint for how the United States should use federal funds to stimulate the economy. Obama’s economic stimulus package, which Congress passed in February, allocates billions of dollars to the green jobs industry.

But the author of the study, Dr. Gabriel Calzada, an economics professor at Juan Carlos University in Madrid, said the United States should expect results similar to those in Spain:

“Spain’s experience (cited by President Obama as a model) reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created,” wrote Calzada in his report: Study of the Effects on Employment of Public Aid to Renewable Energy Sources.

Obama repeatedly has said that the United States should look to Spain as an example of a country that has successfully applied federal money to green initiatives in order to stimulate its economy.

“Think of what’s happening in countries like Spain, Germany and Japan, where they’re making real investments in renewable energy,” said Obama while lobbying Congress, in January to pass the American Recovery and Reinvestment Act. “They’re surging ahead of us, poised to take the lead in these new industries.”

A Wall Street brokerage firm collected $6.2 million in illegal fees by duping hundreds of investors into buying stocks at inflated prices, a prosecutor said Wednesday.

An indictment charged the two founders and 15 former employees of the now-defunct Joseph Stevens & Co. Inc. with enterprise corruption, grand larceny and other felony counts. They were to be arraigned later Wednesday in state Supreme Court in Manhattan.

About 800 people were victimized by the scheme involving 5,000 trades between 2001 and 2005 that totaled $151.3 million, District Attorney Robert Morgenthau said at a news conference. Many of the victims were retirees, doctors and other professionals who lost much of their life savings, he said.

Prosecutors allege brokers would commit to buying a large block of shares at a discount, then wait until the stock ticked up in value before buying it for clients at the higher price.

“The brokers never told their customers that their primary reason for recommending the stock was to earn additional undisclosed compensation, rather than because of the quality of the investment,” Morgenthau said.

Many times, the investments took a dive in the weeks or months following the fraudulent trades. The district attorney said because of the heavy loses, some elderly investors “were forced back into the work force to survive.”

If convicted, the defendants face up to 25 years in prison. The names of their attorneys were not immediately available.

A federal judge says the United States can continue to hold some prisoners at Guantanamo Bay indefinitely without any charges.

U.S. District Judge John Bates’ opinion issued Tuesday night limited the Obama administration’s definition of who can be held. But he said Congress in the days after Sept. 11, 2001 gave the president the authority to hold anyone involved in planning, aiding or carrying out the terrorist attacks.

Bates’ opinion comes amid increasing debate over whether President Barack Obama is going to release anyone from Guantanamo. Obama has promised to close the prison by January, but Senate Democrats say they will block the move until he comes up with a plan for the detainees.

Bates’ opinion came in the case of several Guantanamo prisoners who are challenging their detention. ACLU attorney Jonathan Hafetz said the opinion “flouts the Constitution’s prohibition against indefinite detention without charge.”

“The decision wrongly concludes that terrorism suspects at Guantanamo may continue to languish in military detention rather than being prosecuted in our civilian courts,” Hafetz said. “Like the president’s recent decision to revive military commissions, this ruling perpetuates rather than ends the failed experiment in lawlessness that is Guantanamo.”

Earlier this year, Bates ordered the Obama administration to give its definition of whom the United States can continue to hold at Guantanamo. The administration responded with a definition that was largely similar to the Bush administration’s, drawing criticism from human rights advocates.

Harvard President Drew Gilpin Faust yesterday backed federal legislation that would clear the way for illegal immigrant students to apply for legal residency, an endorsement that stunned students and drew criticism for a president who has largely steered clear of fierce debates.

In a letter this week to federal lawmakers, Faust expressed “strong support” for legislation known as the Dream Act, which would allow students who have been in this country since they were 15 to apply for legal residency under certain conditions. She acknowledged that students with “immigration status issues” attend Harvard, and said the bill would be a “lifeline” to such students.

More Americans than forecast filed claims for unemployment insurance last week, and the total number of workers receiving benefits rose to a record, signs the job market continues to weaken even as the economic slump eases.

Initial jobless claims fell by 12,000 to 631,000 in the week ended May 16, from a revised 643,000 the prior week that was higher than initially estimated, the Labor Department said today in Washington. The total number of people collecting benefits rose to 6.66 million, a record reading for a 16th straight week, and a sign companies are still not hiring.

The four-week moving average of initial claims, a less volatile measure, decreased to 628,500 from 632,000.

The derivatives market shrank for the first time in the second half of 2008 as the global financial crisis curbed trading, the Bank for International Settlements said in a report.

The amount of outstanding contracts linked to bonds, currencies, commodities, stocks and interest rates fell 13.4 percent to $592 trillion, the Basel, Switzerland-based bank said yesterday. That’s the first decline in 10 years of compiling the data. The amount of credit-default swaps protecting investors against losses on bonds and loans fell 27 percent to cover a notional $41.9 trillion of debt.

Manufacturing in the Philadelphia region contracted in May at the slowest pace in eight months as shipments and employment improved.

The Federal Reserve Bank of Philadelphia’s general economic index climbed to minus 22.6 this month from minus 24.4 in April, the bank said today. Negative numbers signal contraction.

U.S. life insurers, a group led by MetLife Inc. and Prudential Financial Inc., face “pain” on more than $300 billion invested in mortgages tied to commercial property and multifamily homes, Standard & Poor’s said.

“As the recession rolls on, we believe that there is an increasing possibility of distress for commercial real estate owners and for those that hold their mortgages,” said S&P analysts led by Kevin Ahern in a statement today.

North American insurers have posted more than $200 billion in writedowns and unrealized losses tied to the collapse of the U.S. mortgage market. The losses, concentrated in home loans, corporate debt and derivatives, may expand into commercial mortgages as borrowers default or let loans go into foreclosure, S&P said.

“The foreclosure rate of commercial mortgages in life insurance portfolios is virtually zero,” S&P said. “But we believe that this will not necessarily be the case over the course of this economic cycle.”

Commercial mortgage delinquencies in the U.S. climbed to the highest level in at least 11 years in April as scarce credit made it difficult for landlords to refinance loans, according to property research firm Trepp LLC. Commercial property values fell 21.5 percent through February from their October 2007 peak, according to Moody’s Investors Service.

The April index of leading indicators suggested the U.S. economy has moved slightly closer to recovery. The leading index rose 1.0% after a revised 0.2% drop in March, the Conference Board reported Thursday. March’s drop was originally reported as 0.3%.

Economists surveyed by Dow Jones Newswires had expected an increase of 1.0% in the April index.

The April gain was the first increase in seven months.

“The leading indicators suggest that while the recession will continue in the near term, the declines will be less intense,” said Ken Goldstein, economist at the Board.

Stock prices, interest-rate spread and consumer expectations made positive contributions to the April index. Real money supply and building permits were negative contributors.

The coincident index fell 0.2% in April, after a revised drop of 0.6% in March. March’s decline was first reported as 0.4%.

The lagging index dropped 0.5% in April, after a revised 0.5% decline in the prior month. The March drop was originally reported as 0.4%.

The Federal Reserve will include legacy assets for the first time in a $1 trillion program to revive credit markets, expanding the effort to commercial real estate securities issued before the start of this year.

The central bank also expanded the number of credit-ratings companies permitted to rate assets for the Term Asset-Backed Securities Loan Facility to five after Connecticut Attorney General Richard Blumenthal told the Fed that the three initial eligible companies helped fuel the global credit crisis.

There is some good news on the Massachusetts foreclosure front, but don’t celebrate yet, housing specialists say.

Statewide, foreclosures plunged to 755 in April, the first time they have dropped below 800 in six months. Foreclosures were down 20.8 percent from March – when 953 homeowners lost their homes, according to data released yesterday by Warren Group, which tracks real estate transactions.

Year-to-date, foreclosure numbers also improved.

For the first four months of 2009, the number of foreclosures fell 15.9 percent to 3,510, compared with the same period in 2008.

And petitions to foreclose, the first step in the process, dropped 39.5 percent to 2,013 last month, compared with April 2008.

Despite the improving numbers, Grace Ross, coordinator of the Massachusetts Alliance Against Predatory Lending, said, “The foreclosure crisis isn’t over.”

“All of the bigger trends are still not good,” Ross said.

It has become one of the staples of modern, hi-tech life: using satellite navigation tools built into your car or mobile phone to find your way from A to B. But experts have warned that the system may be close to breakdown.

US government officials are concerned that the quality of the Global Positioning System (GPS) could begin to deteriorate as early as next year, resulting in regular blackouts and failures – or even dishing out inaccurate directions to millions of people worldwide.

The warning centres on the network of GPS satellites that constantly orbit the planet and beam signals back to the ground that help pinpoint your position on the Earth’s surface.

The satellites are overseen by the US Air Force, which has maintained the GPS network since the early 1990s. According to a study by the US government accountability office (GAO), mismanagement and a lack of investment means that some of the crucial GPS satellites could begin to fail as early as next year.

“It is uncertain whether the Air Force will be able to acquire new satellites in time to maintain current GPS service without interruption,” said the report, presented to Congress. “If not, some military operations and some civilian users could be adversely affected.”

The report says that Air Force officials have failed to execute the necessary steps to keep the system running smoothly.

Subprime is done. All the teaser rates are over, the interest rates have reset and the writing is on the wall.

But in the coming quarters, the scenario will play out with other exotic mortgages, Option ARM (pick-a-pay), Alt-A, etc. The homebuyers may have had better credit, but they had the same strategy: Get a low interest rate upfront, and then deal with the reset down the road, by either refinancing or selling the home. But, whoops, home values are way lower and the economy sucks. Plan derailed.



May 27, 2009

We knew this was coming. Even though the bird flu hype was removed years ago from the nightly news, planning for the global pandemic and the development of pandemic flu vaccines has continued with little notice. Our government has instructed FEMA, made checklists for Homeland Security, given action plans to State and local authorities. These plans include methods and drills for global inoculation with a vaccine that will no doubt have the same deadly consequences as the Swine Flu vaccine in 1976.

My book, “FOWL,!” published in 2006, foretold the events that are now happening in Mexico. Reported death rates are skyrocketing, from 20 to 60 to 86, in a matter of hours. More than 1,300 others have supposedly become ill with “suspected” cases of the infection and reports are coming in from various States and Canada of swine flu. There are no sources or references given with these numbers; we have to take the word of CNN. A short look back at plans that were put in place several years ago will confirm this is not a spontaneous eruption and the solution – global vaccination – has been in the works for quite some time.

History Repeating

Even though April 30, 1975 marked the end of the U.S. presence in Vietnam, young men across the country continued to sign up for the all-volunteer army. Just after the Christmas holiday in 1975, thousands of enthusiastic new army recruits reported to the barracks at Fort Dix, New Jersey, to begin basic training. However, by mid-January, many were complaining of flulike symptoms; a few had even been hospitalized.

One recruit reported to his drill instructor that he felt tired and weak. Given the option to rest, he opted instead to participate in a five-mile training march on a cold February night. Twenty-four hours later, on February 6, 1975, the 19-year-old Pvt. David Lewis of Ashley Falls, Massachusetts, was dead. Word arrived the following week from the CDC laboratory that his death was caused by an unusual influenza type A virus. Particularly worrisome was that four other samples taken from ill recruits at Fort Dix had also tested positive for influenza A virus—a type that had previously been detected only in pigs.

Within three weeks of Lewis’ death – the only person ever confirmed to have died from swine flu on the entire military base – researchers and public health officials converged in Washington to persuade members of Congress to implement a costly new program to vaccinate the country. A nationwide campaign, launched with the urgency of a five-alarm fire, was started by the CDC which ramped up the vaccine production with millions of government dollars allocated to develop of a novel vaccine for mass vaccination.

The same five-alarm fire is happening today. This morning, April 26, 2009, the federal government declared a public health emergency, as the number of cases of swine flu in the U.S. rises to a mere 20, announcing the arrival of the long-planned for and awaited pandemic.

Pharma Protected

In 1976, the Federal Insurance Company advised Merck that all liability, indemnity, and defense costs associated with claims arising from the new swine flu vaccine would not be covered by its insurance plan. Having absorbed the embarrassment and the economic losses caused by the polio vaccine in 1955, the pharmaceutical industry and their insurance providers were determined that would not happen again.

This time, there are no worries. Drug companies have completely covered their tracks, and when reports of adverse event and deaths from the new swine flu vaccine start to roll in, they will be smiling all the way to the bank.

Flu shots were added to the Vaccine Injury Compensation Table in 2003, meaning, if anyone is injured, a claim needs to be filed through the Federal Court of Claims and it will be years before it is adjudicated. And that is just the basic layer of protection. All the drug companies have to do is whisper that this may be a “terrorist attack” and they are home free.

Before he was voted out of office in 2006, then-senator Bill Frist (R-TN), a physician, drove through a bill that gave drug companies more immunity than any bill ever passed by Congress. The legislation, referred to as “Division E” was tacked to a Defense appropriations bill during the final minutes of the congressional sessions before the Christmas recess. This bill provides at least four sweeping provisions:

1. Immunity from liability for all drugs, vaccines, or biological products deemed as a covered countermeasure against bioterrorism in the event of an outbreak of any kind. The proposal is not only limited to new drugs or vaccines developed under the umbrella of “bioterrorism” or “pandemic” protection. The proposal is so broad that it could include drugs like Tylenol, Advil…and would have applied to Vioxx.

2. Immunity for any product used for any public health emergency declared by the secretary of HHS. The authority to declare an emergency now rests completely in the hands of the secretary of HHS—an appointed, non-medical person who has no accountability to the general public. The president’s hand-picked person that is part of his inner circle will have the power to mandate vaccines and other medications given to the American people.

3. Immunity from accountability. No matter what a drug company does wrong, they are protected. Even if the company’s dirty facility created a batch of contaminated vaccines that resulted in death or injury to thousands of people, the drug company will not be held accountable.

4. Immunity from law suits. A person who suffers any type of loss will be prohibited from suing the drug companies. Vaccine manufacturers have immunity from almost everything, perhaps even murder. The bill provisions provide a mechanism for filing a lawsuit, but the language explicitly prevents frivolous suits by setting a standard for liability more rigid than any known standard of negligence.
In simple terms, if a claim is filed by a plaintiff it can go forward only if the injured party can prove that the company performed an act of “willful misconduct” resulting in an injury or a death. In other words, the injured party would have to prove the vaccine maker intentionally caused him harm.

Division-E goes even one step further. Unbelievably, even if a pharmaceutical company knowingly harms people, the company will be immune from legal prosecution unless the U.S. attorney general initiates “enforcement action” against the drug company in the name of the claimant. This means the U.S. government would have to go to bat for the injured party for the lawsuit to move forward, as unlikely as the current swine flu fiasco being an unplanned pandemic.

New Vaccines Ready to Roll Out

The swine flu outbreak is going to benefit one of the most prolific and successful venture capital firms in the United States: Kleiner, Perkins, Caufield & Byers. Share prices have already risen for two of eight public traded companies in the firm’s portfolio of Pandemic and Bio Defense investments. BioCryst, up more than 26 percent, to $2.21 per share, and Novavax, maker of viral vaccines, escalated 75 percent to $1.42 per share on the first announcement of the swine flu outbreak in Mexico.

Novavax uses genetic information and “recombinant, virus-like particle technology” to rapidly engineer a vaccine. Its technology has only been through Phase II clinical trials but might be released prematurely. Novavax’s CEO, Rahul Singhvi announced Friday, “There is an emergency authorization avenue that is available that would allow us to use the vaccine in an emergency without further testing.” The Division-E provisions would protect the company from all liability.

In the fine print of the Division-E legislation, (available for download at so you can read it for yourself), there is a suggestion that a massive, bioterrorist vaccination program could be “voluntary.” Will the media make everyone aware of the one-line provision that potentially gives us the right to refuse?

Will government mandates override State exemption laws? The future is unclear but this has been suggested. Your personal rights are growing very thin and activism has never been more important. A quote by U.S. Representative Ron Paul (R-TX) says it all: “When we give government the power to make medical decisions for us, we, in essence, accept that the state owns our bodies.”

Staying Healthy

Certainly, keeping yourself healthy and protected from all types of flu strains is a priority, now more than ever. Here are some suggestions:

• Good hydration with alkaline water: If you don’t have access to an alkaline water machine, be sure to eat large amounts of alkalinizing, fresh vegetables and fruits such as broccoli, carrots, sprouts, avocados and berries. Here is a site with a great list.
• Sleep: Get at least 8.5 hours per night, every night. Sleep is often overlooked at the key to health. This is simple to do and best of all, it is free.
• Vitamin D: Much has been written on the importance of adequate vitamin D for resisting viral infections. Have your blood tested for 25-OH-vitamin D. Your doctor can order it or you can order it yourself through sites such as and Your vitamin D level should be at least 50 ng/ml. It is safe to take at least 2000 IU of vitamin D3 per day. With summer coming, you can get your dose of D naturally from sunshine.

• Vitamin C: Humans don’t store vitamin C and under stress, much more is required. Vitamin C is important for fighting viral infections. Take in at least 2000 mg/day for overall immune health.
• Vitamin A: This vitamin is one of the best supporters you can have in your cabinet. Mycel A drops given in juice are easy to take for children and adults of all ages. By taking 5,000 IU/day for 5 days is safe for everyone and will give your immune system a protective boost against all types of viral infections.

While these suggestions are not meant to be all encompassing, these some simple solutions for you and your family.

Dr. Sherri Tenpenny, DO

Pentagon Renews Focus On Africa

May 23, 2009

New Africa Command Likely To Be Formed To Counter Al Qaeda’s Growing Presence.

Africa, long beset by war, famine, disease, and ethnic tensions, has generally taken a backseat in Pentagon planning – but US officials say that is about to change.

One of Donald Rumsfeld’s last acts before Robert Gates replaced him last month as Defense secretary was to urge President Bush to let the Pentagon create a new Africa Command to pay more attention to the troubled continent. Mr. Bush is said to have agreed to the idea and is expected announce it early this year.

The creation of the new command will be more than an exercise in shuffling bureaucratic boxes, experts say. The US government’s motives include countering Al Qaeda’s known presence in Africa, safeguarding future oil supplies, and competing with China, which has been courting African governments in its own quest for petroleum, they suggest.

The expected new command “speaks to the fact that Africa now matters to the US government as it never has in the past,” says Melvin Foote, chief executive officer of Constituency for Africa, a nonprofit group devoted to strengthening US relations with African governments.

The idea of an Africa Command has been discussed for years, but Mr. Foote says it has taken on new urgency in light of recent events.

# Islamists took over Somalia last June and ruled until this week, when Ethiopian troops drove them out of power.

# China hosted a conference of African presidents in Beijing last year – and made about $5 billion in deals to build infrastructure in Africa for oil.

A source of oil

The US gets about 10 percent of its oil from Africa, notes Foote. Some experts say it may need to rely on the continent for as much as 25 percent by 2010. “With all the instability in the Middle East, there’s some thought that we had better build partnerships in Africa,” he says.

A senior Pentagon official, who requested anonymity because announcing the decision is the president’s prerogative, said current events have less to do with the move than does Africa’s instability. “Africa’s a place with a lot of crises,” this official says. Bush is “on record saying he doesn’t want another genocide on his watch. This is a way of ensuring that there’s a military command, a four-star, paying attention.”

Currently, responsibility for Africa is divided among three of the Pentagon’s five regional “unified commands,” each headed by a four-star general or admiral who reports to the president.

The European Command, responsible for Europe and Russia, oversees US defense activities for most of continental Africa. The Central Command covers largely Arab northeast Africa as part of its oversight of the Middle East and sections of Central and Southwest Asia. The Pacific Command is responsible for Madagascar and the waters off southeast Africa.

Need for a ‘streamlined’ strategy

Lt. Cmdr. Joe Carpenter, a Pentagon spokesman, says the division of labor “causes some difficulty in trying to … execute a more streamlined and comprehensive strategy when it comes to Africa.”

The Pentagon official who requested anonymity says the new command will exclude Egypt, a major player in Middle East politics. And Central Command will retain responsibility for the Horn of Africa for about 18 months while the Africa Command gets set up, the official says.

After the 9/11 attacks, the Pentagon created a Horn of Africa joint task force under Central Command that is headquartered in Djibouti, but the senior official said the Africa Command’s headquarters will be in Stuttgart, Germany, where the European Command is based, for the time being.

The Horn of Africa task force includes about 1,500 troops whose mission is to detect and defeat transnational terrorism, primarily through offering military training and humanitarian aid to friendly governments. Those troops constitute the bulk of the US military presence in Africa.

African countries won’t see much difference in the US military presence on the ground under the new command, says Herman Cohen, assistant secretary of State for African affairs under the first President Bush. “They’re already getting a lot of attention from the US military,” he says. The Defense Intelligence Agency “has built up its offices throughout Africa in US embassies. Right after the cold war, they reduced a lot, but they’ve built back up.”

The new Africa Command is “long overdue,” says Susan Rice, assistant secretary of State for African affairs under President Bill Clinton. Sept. 11 “did what common sense should have done earlier, which is to elevate the understanding … in the Pentagon of our strategic stake in Africa,” she says. “Africa has the preponderance of the world’s weak and failed states, and we ignore it at our peril.”

Richard Whittle. Christian Science Monitor,, Jan. 5, 2007

Iraq’s Insurgency Runs on Stolen Oil Profits.

May 23, 2009

“It is not possible to explain the dynamics of global security affairs without recognizing the pivotal importance of resource competition. For almost every country in the world, the pursuit or protection of essential materials has become a paramount feature in national security planning… [and] figure in the organization, deployment, and actual use of many of the world’s military forces.” Michael Klare, author of Resource Wars 

“Can I tell you the truth? I mean, this isn’t the TV news, is it? Here’s what I think the truth is: We are all addicts of fossil fuels in a state of denial. And like so many addicts about to face cold turkey, our leaders are now committing violent crimes to get what little is left of what we’re hooked on.” — Kurt Vonnegut

“Think of Iraq as a military base with a very large oil reserve underneath. You can’t ask for better than that.” — Fadel Gheit, Oppenheimer & Co. Toronto Star, Sept 20, 2004

The Baiji refinery, with its distillation towers rising against the Hamrin Mountains, may be the most important industrial site in the Sunni Arab-dominated regions of Iraq. On a good day, 500 tanker trucks will leave the refinery filled with fuel with a street value of $10 million.

The sea of oil under Iraq is supposed to rebuild the nation, then make it prosper. But at least one-third, and possibly much more, of the fuel from Iraq’s largest refinery here is diverted to the black market, according to American military officials. Tankers are hijacked, drivers are bribed, papers are forged and meters are manipulated — and some of the earnings go to insurgents who are still killing more than 100 Iraqis a week.

“It’s the money pit of the insurgency,” said Capt. Joe Da Silva, who commands several platoons stationed at the refinery.

Five years after the war in Iraq began, the insurgency remains a lethal force. The steady flow of cash is one reason, even as the American troop buildup and the recruitment of former insurgents to American-backed militias have helped push the number of attacks down to 2005 levels.

In fact, money, far more than jihadist ideology, is a crucial motivation for a majority of Sunni insurgents, according to American officers in some Sunni provinces and other military officials in Iraq who have reviewed detainee surveys and other intelligence on the insurgency.

Although many American military officials and politicians — and even the Iraqi public — use the term Al Qaeda as a synonym for the insurgency, some American and Iraqi experts say they believe that the number of committed religious ideologues remains small. They say that insurgent groups raise and spend money autonomously for the most part, with little centralized coordination or direction.

Money from swindles in Iraq and from foreign patrons in places like Saudi Arabia allows a disparate, decentralized collection of insurgent cells to hire recruits and pay for large-scale attacks. But the focus on money is the insurgency’s weakness as well as its strength, and one reason loyalties can be traded. For now, at least 91,000 Iraqis, many of them former enemies of the American forces, receive a regular, American-paid salary for serving in neighborhood militias.

“It has a great deal more to do with the economy than with ideology,” said one senior American military official, who said that studies of detainees in American custody found that about three-quarters were not committed to the jihadist ideology. “The vast majority have nothing to do with the caliphate and the central ideology of Al Qaeda.”

The corruption that drives money to the insurgency is hardly limited to the Baiji refinery, which a reporter visited last month. In Mosul, for example, insurgents have skimmed profits from soda and cement factories, American officers said.

Insurgents in Mosul also make money from kidnapping for ransom and by extorting 5 to 20 percent of the value of contracts local businessmen get from the government, said Khasro Goran, the deputy governor of Nineveh Province.

A military official familiar with studies on the insurgency estimated that half of the insurgency’s money came from outside Iraq, mainly from people in Saudi Arabia, a flow that does not appear to have decreased in recent years.

Iraq’s Black Market

Before the invasion of Iraq, eight gasoline stations dotted the region around Sharqat, an hour north of the refinery at the northern edge of Saddam Hussein’s home province, Salahuddin. Now there are more than 50.

Economic growth? Not exactly. It is one of the more audacious schemes that feed money to the black marketeers. Most tanker trucks intended for Sharqat never make it there. “It’s all a bluff,” said Taha Mahmoud Ahmed, the official who oversees fuel distribution in Salahuddin. “The fuel is not going to the stations. It’s going to the black market.”

Gas stations are often built just to gain the rights to fuel shipments, at subsidized government rates, that can be resold onto the black market at higher prices. New stations cost more than $100,000 to build, but black market profits from six or seven trucks can often cover that cost, and everything after that is profit, said officials who have studied the scheme.

The plan also requires bribing officials in the province and Baghdad, said Col. Mohsen Awad Habib, who is from Sharqat and is now police chief in Siniya, near Baiji. He said owners of bogus gas stations told him they paid $20,000 bribes to an Oil Ministry official in Baghdad to get their paperwork approved. Local and provincial officials then extort their own cut. “In each station you’ll find high Iraqi officials who have shares,” he said.

In Baiji, dozens of active insurgent groups feed off corruption from the refinery, said Lt. Ali Shakir, the commander of the paramilitary Iraqi police unit here. “If I give you all the names, your hand is going to be tired” from writing them down, he said.

Lieutenant Shakir said the more hard-core insurgent groups had a lot of money to pay other fighters, and he grumbled that part of the reason they thrived was that obvious thievery was never prosecuted.

Another scheme, he said, involves a trucking company owned by a man tied to the insurgency who is also a relative of Baiji’s mayor. The trucks take fuel from the refinery but are then unloaded just south of Tikrit. Making arrests would be a waste of time, he said, because provincial officials would let the perpetrators go.

“What can I do?” he said. “After a half hour, they would be released.”

Last year, the Pentagon estimated that as much as 70 percent of the Baiji refinery’s production, or $2 billion in fuels like gasoline, kerosene and diesel, disappeared annually into the black market. Baiji supplies eight provinces.

Some of the most obvious corruption and theft, like tanker trucks hijacked at gunpoint from distribution pumps, has been curbed by Captain Da Silva and his predecessors. The American troops live inside the compound.

Moreover, American officials say they believe that in recent weeks, some illicit profits flowing from the refinery have diminished. The refinery has been operating at almost full capacity, they say, pouring more fuel on the market and narrowing the spread between government-mandated rates for fuel and what it fetches on the black market.

Exploiting that spread is one key to illicit profits from the refinery. For example, in January a tanker filled with kerosene that was supposed to be worth about $10,000 was going for $19,000 in Baiji, according to surveys of black market prices for the American military. In Samarra, it cost $35,000, a result of what soldiers described as the former mayor’s efforts to manipulate fuel prices.

Most theft occurs outside the refinery, but fraud still abounds inside, too. At one refinery office, a broken control-room machine has a hole where an object has been jammed through the glass to stop a dial from turning. Most everything is recorded using paper, and tubes of correction fluid sit on the desks of clerks overseeing the flow of fuel. It is regularly used to cover up huge discrepancies in production and distribution tallies that soldiers say can only be explained by theft.

“We’d all be hanged” if the refinery had operated this way under Mr. Hussein’s government, one senior refinery official confided to American soldiers.

Refinery workers plead for jobs dispensing fuel, offering to work for no pay. Far more money can be made conspiring with tanker truck drivers to skim gas from the pumps, a job some soldiers liken to being a valet parking attendant at a Las Vegas casino.

The Flow of Illicit Profits

American and Iraqi officials struggle to say exactly how much the insurgency reaps from its domestic financing activities. In the past, Iraqi officials have estimated that insurgents receive as much as half of all profits attributable to oil smuggling. And before the troop buildup began a year ago, an American report estimated that insurgents generated as much as $200 million a year.

Nor is the skimming limited to the insurgency; illicit earnings from the Baiji refinery also flow to criminal gangs, tribes, the Iraqi police, local council members and provincial officials who also smuggle fuel, Iraqi officials say.

Barham Salih, the Iraqi deputy prime minister, said he believed that the pool of money available to insurgents across Iraq had fallen in the past year, but he declined to provide an estimate himself. He said Iraqi security analysts estimated that Al Qaeda in Mesopotamia received $50,000 to $100,000 per day from swindles related to the Baiji refinery. “It’s a serious problem,” he said.

Those amounts are significant given the hard realities of Iraq, especially in Sunni areas where unemployment and discontent with the Shiite-run government run high. Men can be hired to hide roadside bombs for $100, officers say. And while American troops have captured stockpiles of artillery shells from Mr. Hussein’s days, insurgents have adapted, building bombs from cheap materials like fertilizer and cocoa.

The insurgents appear to understand how valuable the Baiji refinery is to their operations. “They have not attacked the oil refinery, because they don’t want to damage their cash cow,” said First Lt. Trent Teague, who commands the Third Platoon in Captain Da Silva’s unit, the headquarters company of the First Battalion, 327th Infantry.

Instead, when the insurgents want to send an angry message to someone at the refinery, they attack neighborhoods where oil workers live. Two suicide bombings in these Baiji neighborhoods in December killed at least 30 people and wounded more than 100. “It was the refinery being hit, without it being hit,” Lieutenant Teague said.

But the insurgents do have agents inside, and some are the very people who are supposed to thwart graft and the insurgents’ influence. In February, American troops detained Ghalib Ali Hamid, the intelligence and internal affairs chief of the Oil Protection Force at the refinery, on suspicion of skimming fuel profits and having ties to insurgents.

Among other things, officers said Mr. Hamid had issued a stern warning to one of his superiors at the refinery: “If you’re going to work here, you’ve got to be friends with the Islamic State of Iraq,” a reference to an insurgent group with ties to Al Qaeda in Mesopotamia.

Last year, a new Iraqi Army brigade commander, Col. Yaseen Taha Rajeeb, was assigned to the refinery. He helped stop some of the most blatant theft. But the colonel’s paychecks were stopped soon after he began cracking down, and he was fired this year.

While black market fuel prices and profit margins have dropped recently, they could rise again, especially if refinery production falls off.

Capt. Stephen Wright, who works at the refinery with Captain Da Silva, is concerned about whether there may be unseen problems looming, like the sort of fatigue that ruptured a propane unit in January. “If something happens to this refinery from neglect, you won’t have fuel for eight provinces,” he said, “and we’ll have 6,000 unemployed Sunnis, who are people we definitely don’t want unemployed.”

The money feeds an insurgency that is constantly adapting, and information about its exact composition and organization has continued to elude the Americans.

The Motivations of Insurgents

Some American officials and politicians maintain that Sunni insurgents have deep ties with Qaeda networks loyal to Osama bin Laden in other countries. Al Qaeda in Mesopotamia, whose members are mainly Iraqi but whose leadership has been described by American commanders as largely foreign, remains a well-financed and virulent force that carries out large-scale attacks.

But there are officers in the American military who openly question how much a role jihadism plays in the minds of most people who carry out attacks. As the American occupation has worn on and unemployment has remained high, these officers say the overwhelming motivation of insurgents is the need to earn a paycheck.

Nor do American officers say they believe that insurgent attacks are centrally coordinated. “As far as networked coordination of attacks, we are not seeing that,” said a military official familiar with studies on the insurgency.

Opposition to the occupation and fear of the Shiite- and Kurdish-dominated government and security forces “clearly are important factors in the insurgency,” the official said. “But they are being rivaled by the economic factor, the deprivation that exists.”

Maj. Kelly Kendrick, operations officer for the First Brigade Combat Team of the 101st Airborne Division in Salahuddin, estimates that there are no more than 50 hard-core “Al Qaeda” fighters in Salahuddin, a province of 1.3 million people that includes Baiji and the Sunni cities of Samarra and Tikrit.

He said most fighters were seduced not by dreams of a life following Mr. bin Laden, but by a simpler pitch: “Here’s $100; go plant this I.E.D.”

“Ninety percent of the guys out here who do attacks are just people who want to feed their families,” Major Kendrick said.

The First Brigade’s commander, Col. Scott McBride, concurs. “I don’t know that I’ve ever heard one person say, ‘I believe in a caliphate,’ ” he said.

Abu Azzam, a prominent leader of American-backed Sunni militiamen in Nasr Wa Salam, between Baghdad and Falluja, estimated that only 10 percent of Al Qaeda in Mesopotamia’s members adhered to extremist jihadist doctrines.

“Many joined Qaeda for financial and personal reasons,” said Abu Azzam, whose militia includes former insurgents. “The others joined Qaeda because they hate the government, or they hate the American army, or for revenge.”

The focus on Al Qaeda in Mesopotamia obscures the activities of other major guerrilla groups in the country. Some, like Jaish-e-Muhammad, or the Army of Muhammad, which includes ex-Baathists and former military officers, continue to battle American forces. Some American officers consider another organization, the Islamic State of Iraq, to be a front group for Al Qaeda in Mesopotamia.

But some members of other groups, including the 1920s Revolutionary Brigades and Jaish al-Islami, or the Islamic Army, have agreed to support American-financed Sunni militia forces.

Paying former insurgents to stop attacking American forces and join neighborhood militia forces has played a crucial role in turning around security in many Sunni parts of Iraq. But American officers worry that the failure to incorporate these Sunni militiamen into the government of Iraq or find them other jobs could portend trouble.

“There’s got to be an outlet,” the senior military official said, referring to a job and salary not related to the insurgency. “Without that outlet, a lot of guys will gravitate back. They are not going to starve their families. You have got to do what you have got to do to survive.”

Richard A. Oppel Jr. New York Times, March 16, 2008

Did the CIA Bomb a Passenger Plane in 1955?

May 22, 2009

Was America’s CIA working with Taiwan agents to kill Chinese premier?

Target: Zhou Enlai

It has been the plot of a hundred spy novels: a plane full of passengers is bombed to kill one man. In April 1955, that man was Chinese Premier Zhou Enlai and the plane was Air-India’s Kashmir Princess. However, unlike a spy yarn, the assassins missed their target and killed a planeload of passengers in vain.

New information uncovered by Oxford University scholar and Hong Kong native Steve Tsang, from British, Taiwanese, American and Hong Kong archives — revealed in a recent China Quarterly article — names Kuomintang agents in Taiwan as the culprits. Though Tsang says that the United States Central Intelligence Agency was not involved, questions persist.

On the night of April 11, 1955, the chartered Air-India flight was carrying a minor delegation of Chinese and East Europeans from Hong Kong to Indonesia to attend the Afro-Asian Conference in Bandung. Around 7 p.m., at 18,000 feet, a time bomb detonated in the wheel bay of the starboard wing, blowing a hole in the No.3 fuel tank. The crew heard the explosion, the fire-warning light for the baggage compartment came on, and horrified passengers watched the fire travel up the wing. The captain shut off the right inboard engine, fearing it would catch fire, leaving the other three engines running. The crew sent out three distress signals giving their position over the Natuna Islands before the radio went dead.

Before the radio failed, the Jakarta control tower asked if Chinese Premier Zhou Enlai was aboard. The answer was no, but the question must have bewildered the crew. Unknown to them, Zhou was the very reason they were now fighting for their lives.

Zhou’s travel plans were kept in strict secrecy. In fact, the premier did not leave China until April 14 — three days after the bombing — when he flew to Rangoon to meet with Indian Prime Minister Jawaharlal Nehru and Burmese leader U Nu before continuing on to Bandung.

The secrecy that surrounded Zhou’s travel plans saved his life — and doomed the Kashmir Princess. The same Air-India plane was scheduled to fly to Rangoon to pick up Zhou for his trip to Indonesia. In fact, Tsang argues Zhou knew about the assassination plot.

“Evidence now suggests that Zhou knew of the plot beforehand and secretly changed his travel plans, though he did not stop a decoy delegation of lesser cadres from taking his place,” Tsang wrote in the September 1994 issue of the academic journal, China Quarterly.

The Kashmir Princess was only an hour from its scheduled landing in Jakarta when the captain decided to ditch the plane at sea. The crew issued life jackets and opened the emergency doors to ensure a quick escape. As the cold wind rushed into the plane, the aircraft began the descent into the dark waters below.

The starboard wing struck the water first, tearing the plane into three parts. The flight engineer, navigator and first officer escaped. But the remaining 16 passengers and crew members died, including seven Chinese cadres, mainly journalists, and three journalists from Austria, Poland and North Vietnam.

Rumours of CIA and KMT involvement surfaced immediately. The day after the crash, China’s Foreign Ministry issued a statement that described the bombing as “a murder by the special service organizations of the United States and Chiang Kai-shek,” the head of the KMT government.

Zhou was a constant irritant to the CIA and KMT during this time. The CIA’s covert war with China was in full swing during the 1950s. The agency created several front organizations to deal with Communist expansionism in Asia. These included the Asia Foundation, Civil Air Transport (later renamed Air America) and the China Quarterly.

Many in the West saw the Bandung conference as a gathering of communists and pro-communists. The CIA believed that China planned to use the conference to boost its image as a world power. In response, the agency sent agents posing as journalists to cover the conference. Some CIA officers may have had other ideas.

Eleven years later, a U.S. Senate committee investigating CIA operations heard testimony that gave murky details of a CIA plot to assassinate an “East Asian leader” attending a 1955 Asian conference. The leader’s identity remained under wraps for another 11 years. In 1977, William Corson, a retired U.S. Marine Corps intelligence officer who served in Asia, published “Armies of Ignorance,” identifying him as Zhou Enlai.

Corson told the Review that Gen. Lucian Truscott had brought the operation to a halt. Soon after his appointment as the CIA’s deputy director in 1954, Truscott discovered that the CIA was planning to assassinate Zhou. During the final banquet in Bandung, a CIA agent would slip a poison into Zhou’s rice bowl that would not take effect for 48 hours, allowing for Zhou’s return to China. According to Corson, Truscott confronted CIA Director Allen Dulles, forcing him to terminate the operation.

Tsang found evidence in archives that points directly to KMT agents operating in Hong Kong as the perpetrators of the plane bombing. According to him, the Nationalists had a special-operations group stationed in Hong Kong responsible for assassination and sabotage. Designated the Hong Kong Group under Maj-Gen Kong Hoi-ping, it operated a network of 90 agents.

“The specific team actually behind this attempt to assassinate Zhou Enlai was the Number Five Liaison Group under Tsang Yat-nin,” the Oxford scholar said. “In this operation, Tsang was under the command of Wu Yi-chin” of the KMT’s Security Bureau.

In March 1955, the KMT’s Tsang recruited Chow Tse-ming, alias Chou Chu, who had been a cleaner for Hong Kong Aircraft Engineering Co. since 1950. Chow’s job at the airport gave him easy access to the Air-India plane. The Nationalists offered Chow the then-fantastic sum of HK$600,000 (currently $78,000) and refuge in Taiwan, if necessary.

The plane flew from Bombay to Hong Kong, and was grounded for 80 minutes to allow for refuelling and boarding. At this time, Chow placed the bomb on board. At 1:30 p.m., the Air-India plane made its last take-off, crashing hours later.

On May 26, an Indonesian board of inquiry announced that a time bomb with an American-made MK-7 detonator was responsible for the crash. The revelation triggered political shock waves in Hong Kong. The governor, Sir Alexander Grantham, had already announced that his office was satisfied no tampering had occurred in Hong Kong.

The Hong Kong authorities offered HK$100,000 for information leading to the arrest of those responsible. They questioned 71 people connected with the servicing of the Air-India flight. When police began to focus on Chow, he stowed away aboard a CIA-owned Civil Air Transport aircraft on a flight to Taiwan.

The Hong Kong police concluded that the KMT had recruited Chow to plant the bomb. Apparently, he had bragged to friends about placing it aboard the airliner. He had also spent large sums of money before he left Hong Kong. Police tried to extradite Chow; Taiwan refused to acknowledge him as a KMT agent.

But the story does not end with Chow’s escape. On October 24, 1967, the Soviet newspaper Pravda announced the defection of an American, John Discoe Smith. In his memoirs, entitled “I Was an Agent of the CIA,” published in Literaturnaya Gazeta that year, Smith detailed his adventures as an agent — including his delivery of a time bomb to a Chinese Nationalist agent. He says that in 1955, Jack Curran, a CIA officer attached to the U.S. Embassy in New Delhi, asked him to deliver a bag to a Wang Feng at the Maidens Hotel in the Indian capital. Smith claimed it was a bomb, the one used to destroy the Air-India plane.

According to a 1979 classified U.S. Senate International Operations report, the KMT planned another assassination of Zhou Enlai in 1971, this time using a trained “kamikaze dog wearing a remote-controlled bomb.” The plot, the report says, was as bizarre as it was elaborate.

The KMT sent an agent to Switzerland to pay an Italian neo-fascist group to carry out the plan while Zhou was visiting Paris. KMT agents had acquired linens that Zhou had used in a hotel outside of China. They used them to train a police dog named Kelly to learn Zhou’s scent. The dog was to be outfitted with a remote- control bomb, which would be detonated when Kelly made contact with Zhou. The KMT dropped the plan when China cancelled Zhou’s trip.

The urbane Chinese leader later played an important role in reaching a detente between the U.S. and China, making the assassination attempts on Zhou’s life now seem ironic.

Wendell L. Minnick
From the Far Eastern Economic Review

A note of appreciation from the rich

May 22, 2009


He who hath the gold makes all the rules.

Let’s be honest: you’ll never win the lottery.

On the other hand, the chances are pretty good that you’ll slave away at some miserable job the rest of your life. That’s because you were in all likelihood born into the wrong social class. Let’s face it — you’re a member of the working caste. Sorry!

As a result, you don’t have the education, upbringing, connections, manners, appearance, and good taste to ever become one of us. In fact, you’d probably need a book the size of the yellow pages to list all the unfair advantages we have over you. That’s why we’re so relieved to know that you still continue to believe all those silly fairy tales about “justice” and “equal opportunity” in America.

Of course, in a hierarchical social system like ours, there’s never been much room at the top to begin with. Besides, it’s already occupied by us — and we like it up here so much that we intend to keep it that way. But at least there’s usually someone lower in the social hierarchy you can feel superior to and kick in the teeth once in a while. Even a lowly dishwasher can easily find some poor slob further down in the pecking order to sneer and spit at. So be thankful for migrant workers, prostitutes, and homeless street people.

Always remember that if everyone like you were economically secure and socially privileged like us, there would be no one left to fill all those boring, dangerous, low-paid jobs in our economy. And no one to fight our wars for us, or blindly follow orders in our totalitarian corporate institutions. And certainly no one to meekly go to their grave without having lived a full and creative life. So please, keep up the good work!

You also probably don’t have the same greedy, compulsive drive to possess wealth, power, and prestige that we have. And even though you may sincerely want to change the way you live, you’re also afraid of the very change you desire, thus keeping you and others like you in a nervous state of limbo. So you go through life mechanically playing your assigned social role, terrified what others would think should you ever dare to “break out of the mold.”

Naturally, we try to play you off against each other whenever it suits our purposes: high-waged workers against low-waged, unionized against non-unionized, Black against White, male against female, American workers against Japanese against Mexican against…. We continually push your wages down by invoking “foreign competition,” “the law of supply and demand,” “national security,” or “the bloated federal deficit.” We throw you on the unemployed scrap heap if you step out of line or jeopardize our profits. And to give you an occasional break from the monotony of our daily economic blackmail, we allow you to participate in our stage-managed electoral shell games, better known to you ordinary folks as “elections.” Happily, you haven’t a clue as to what’s really happening — instead, you blame “Aliens,” “Tree-hugging Environmentalists,” “Niggers,” “Jews,” Welfare Queens,” and countless others for your troubled situation.

We’re also very pleased that many of you still embrace the “work ethic,” even though most jobs in our economy degrade the environment, undermine your physical and emotional health, and basically suck your one and only life right out of you. We obviously don’t know much about work, but we’re sure glad you do!

Of course, life could be different. Society could be intelligently organized to meet the real needs of the general population. You and others like you could collectively fight to free yourselves from our domination. But you don’t know that. In fact, you can’t even imagine that another way of life is possible. And that’s probably the greatest, most significant achievement of our system — robbing you of your imagination, your creativity, your ability to think and act for yourself.

So we’d truly like to thank you from the bottom of our heartless hearts. Your loyal sacrifice makes possible our corrupt luxury; your work makes our system work. Thanks so much for “knowing your place” — without even knowing it!

Private Foundations: Covering for Capitalism

May 19, 2009

The Third Sector as a Protective Layer for Capitalism

Those who wish to promote change should look closely at what sustains the present system. One reason capitalism doesn’t collapse despite its many weaknesses and valiant opposition movements is because of the “nonprofit sector.” Yet philanthropic capital, its investment and its distribution, are generally neglected by the critics of capitalism. Most studies of the subject are generously funded by the nonprofit sector itself; few researchers have followed up on the observation of Marx and Engels in The Communist Manifesto: 

A part of the bourgeoisie is desirous of redressing social grievances, in order to secure the continued existence of bourgeois society…. To this section belong the economists, philanthropists, humanitarians, improvers of the condition of the working class, organizers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind.
The United States is unique in the size and scope of this sector which spends over $400 billion annually. Its tax-free wealth is largely unaccountable: just imagine the land, the buildings, their contents, and the investments of churches, private universities and schools, museums, zoos, teaching hospitals, conservation trusts, opera houses, etc.

This model has been exported to everywhere for over a century. Currently the United States philanthropy network is attempting to create entire “nonprofit” sectors in Eastern European countries. “Bible imperialism” was an early version; another was a large Rockefeller infusion into the London School of Economics during the 1920s and 1930s. 

Some may see a galaxy of organizations doing good works — a million points of light — but the nonprofit world is also a system of power which is exercised in the interest of the corporate world. 

What is the nonprofit sector? In the United States, it includes churches, private schools and universities, cultural institutions, advocacy groups, political movements, research institutes, charities, and foundations. One subset is particularly noteworthy: those organizations covered by section 501(c)(3) of the Internal Revenue Code. These are the benevolent organizations whose receipts are tax-exempt, and whose contributions are tax-deductible for the donors. They are generally the only organizations that receive foundation grants. In turn, they must restrict political advocacy and may not engage in election campaigns. They also may not distribute profits to shareholders. 

Not all in this sector are corralled into innocuous system-protecting activities; there are a few independent, usually poor and obscure organizations. However, most organizations are linked to each other and to the major corporations by their funding, their invested assets, technical assistance, interlocking directorates, and peak organizations such as the Independent Sector and Council on Foundations.1

Independent Sector, the trade association of the nonprofit sector, was founded in 1980. It has a budget of $5 million and 800 members, including (as of November 1988): the AT&T Foundation, the Aga Kahn Foundation, the American Association of Community and Junior Colleges, the American Association of University Women, B’nai B’rith International, Boy Scouts of America, Coors Foundation, Environmental Law Institute, Mexican-American Legal Defense and Educational Fund, Mothers Against Drunk Driving, NAACP Legal Defense and Education Fund, National Audubon Society, Sierra Club, and World Wildlife Foundation. There are over 1500 foundations in the United States that are affiliates of profit-making corporations, and they work along with the traditional charities and foundations to keep the ship afloat.

In what way does this sector serve as a protective layer?

First of all, non-profits play an important role in the concentration and distribution of capital for the profit-making sector. For example, prominent on nonprofit hospital boards of trustees are businesspeople, bankers, real estate developers, insurance executives, etc. Expansion decisions provide a major stimulus to the economy of a region, as well as plums for individual corporations. In addition, foundations and other charitable institutions invest assets in stocks and bonds and can exert power along with other institutional investors. 

Second, nonprofits provide goods and services that the market cannot, from homeless shelters to opera and BBC TV drama. The latter are quite important, as the defection of intellectuals tends to be more dangerous than dire poverty. 

Unprofitable but necessary activities could be carried out by government, as they are in many countries. However, privatization of charity, culture, education, and reform has many advantages. If philanthropic capital were taxed, its disposition would be subject to political debate. Nonprofit organizations, on the other hand, are directed by self-perpetuating boards, and there is no democratic control over their private policy-making. Staff members have no civil service status or security; they are dependent on philanthropy and its visible, hugging arms. Almost all organizations look to corporations and foundations for funding. Small donations or dues are rarely adequate for any major undertaking, and require much energy to collect. Even the NAACP Legal Defense and Education Fund was crucially dependent on foundation money for the litigation leading to Brown v. Board of Education in 1954.

Some of these unprofitable functions could be performed by political parties, unions, or social movements. Elsewhere in the world, political parties sponsor youth groups, daycare centers, children’s camps, and other charitable and educational activities. One might think it particularly appropriate in a democracy for political parties to be the primary locus for social reform and public policy research and advocacy. Nevertheless, in the United States advocacy and reform are largely monopolized by foundation-supported nonprofits. 

Yet another protective function is employment for sons and daughters of the rich who might otherwise be unemployed and disaffected, along with those of any class who are dissident and troublesome. Mix a “soup” of potential and actual troublemakers with lots of gold floating around, and it will go down very smoothly, soothing sore throats and sore heads. 

The nongovernmental and nonpartisan status of these organizations generates a halo of altruism and independence, and this is all the more useful in their international activities. Their geographical and functional range is exhaustive, and there is scant recorded evidence of resistance to the penetration of philanthropy. Recent activities include support for Christian Democratic parties, unions, and grassroots organizations throughout Latin America; the creation of a nonprofit sector in Eastern Europe and the former Soviet Union; the fostering of a nonracial, nonsocialist solution in South Africa; and the “sustainable” development response to critics of third world exploitation. The United Nations itself, by origin and development, owes much to multinational philanthropy. 

The contours of the nonprofit system become clearer when we look at its great planning and funding arms: the large foundations. They contribute to amusement, to placation of artists, to biochemical research, and to routine charity, but perhaps their most interesting endeavors are in directing social reform. They and their creations supply the ideas for political change. The great multipurpose foundations first arose in the early 20th century, closely connected in spirit and practice with Progressivism and the rise of the social sciences. The new millionaires of robber baron infamy saw foundations as devices to serve several purposes. First, they would provide a systematic way to dispose of vast fortunes. Second, they would permit considerable social control through philanthropy. John D. Rockefeller decided “to establish one great foundation. This foundation would be a single central holding company which would finance any and all of the other benevolent organizations, and thus necessarily subject them to its general supervision.”2 Third, foundations could improve public relations; many believed that the Rockefeller Foundation was created to erase the scandal of the Ludlow Massacre. 

In the period prior to the First World War, foundations could ameliorate the lot of the masses and at the same time co-opt intellectuals who often had socialist sympathies. They promoted an ideology that regarded social ills as problems to be solved by social scientists. Class struggle, or even conflicts of interest, was of no moment. 

After the Second World War, foundation intervention in the policy process increased dramatically. For example, fear of political disorder brought forth an amelioration strategy from the Ford Foundation. Its Report for 1949 argued that we had to strengthen our system in order to meet the challenge of communism. Problems included the unfinished business of the Civil War, the lack of political participation, and the care of maladjusted individuals. Ford’s initial strategy was to fund litigation for Supreme Court decisions, which successfully obtained increased legal equality for blacks, reform of the criminal justice system, and reapportionment of legislatures. 

During the 1960s, as one response to burgeoning protest movements, the Ford Foundation took the lead in developing public interest law, which included law firms, clinical programs in law schools, specialized law reviews, and an appropriate ideology. Among the litigation organizations created were the Women’s Law Fund, Environmental Defense Fund, Natural Resources Defense Council, and a number of Legal Defense and Education Funds (LDEFs) including the Puerto Rican LDEF, Mexican-American LDEF, and Native-American LDEF. Older organizations, such as National Association for the Advancement of Colored People Legal Defense and Education Fund and the American Civil Liberties Union, also became dependent on foundation funding.

Foundation ideology, disseminated through conferences, reports, and sponsored research and books, holds that radical protests are signs of inadequacies in pluralism. Disadvantaged groups such as blacks, Chicanos, women, children, and the poor need help in getting their rights. Grant money enables them to participate in the interest-group process on an equal basis with the more advantaged groups. Note that the poor are seen as just another minority group. Any idea that poverty, militarism, racism, and environmental degradation are related by-products of the capitalist system is ruled out. 

Foundations have also poured money into existing organizations to steer them to reasonable, pragmatic goals. There were no rewards for those who wanted blacks in the United States to see themselves as part of the world anticolonial uprisings. Moderate black organizations, including the National Urban League, NAACP, NAACP/LDEF, and Southern Regional Council have been funded; radical groups have been ignored or repressed. 

Foundations promote coalitions that are weighted towards the status quo. Thus, the National Urban Coalition (NUC) was formed in 1967 as an alliance between civil rights organizations, foundations, and major corporations. Previously, corporate philanthropy was usually devoted to public relations, product promotion, employee training, and similar purposes. Beginning in the 1960s, most major corporations developed foundations that participated, along with Ford, Carnegie, Rockefeller, etc., in supporting capitalism in general. They also became members of Independent Sector. The legality of philanthropic use of corporate funds is often questioned by stockholders, but the significance of this new wing of the “nonprofit sector” is generally ignored by leftists.

One program of the NUC, under Ford Foundation leadership, was the creation of Community Development Corporations, in an attempt to transform the “Black Power” slogan into the more acceptable “Black Capitalism.” These entities, which combine financing from government, corporations, and foundations, develop small businesses and industries in impoverished areas — white and black, urban and rural. Although their return on investment is trivial, their payoff can be measured in terms of pacification, the development of moderate leadership, and social mobility for individuals. 

Another project of the foundation-corporation alliance was the establishment of the Martin Luther King Jr. Center for Non-Violent Social Change in Atlanta. It was financed by the large foundations, as well as the corporate foundations of Ford Motor Company, Atlantic Richfield, Levi Strauss, Amoco, General Motors, Heublein, Corning, Mobil, Western Electric, Proctor and Gamble, US Steel, Monsanto, Morgan Guaranty Trust, etc. Along with innocuous programs like daycare centers, housing rehabilitation, and information on how to celebrate Dr. King’s birthday, are two striking projects. One is work with military chaplains to provide King Birthday observances at military bases. The other is cosponsorship of an annual lecture series entitled: “The Free Enterprise System: An Agent for Nonviolent Social Change.” 

Other minority movements have been transformed into standard Washington lobby format. The Southwest Council of La Raza and National Council of La Raza were created by the Ford Foundation from what were once militant movements of Chicanos in the Southwest. 

Leadership training and technical assistance programs for protest and advocacy organizations also stress pragmatic goals. The foundations claim that their programs enhance “pluralism.” What they mainly do is increase the clout of the foundation-corporation network. For all the emphasis on participation, ordinary people have become alienated from politics in any form, and foundation-supported policy experts nearly monopolize the political debate. 

The major foundations have always had overseas interests. Before the Second World War they had a more active foreign policy than the U.S. government, working through organizations such as the Council on Foreign Relations, the pre-eminent foreign policy think tank created by the Rockefeller Foundation and the Carnegie Endowment. The idea and funds for the United Nations owe much to foundation and Rockefeller family philanthropy. 

Instability in Latin America has been greeted by the “hard cops,” the CIA and the military, but also by innumerable foundation-supported projects, carried out directly or by funded nonprofits. These include aid to noncommunist grassroots organizations (especially “Christian Democratic” ones), training for potential leaders in the United States, and funding of university programs and scholars. 

Foundations also created Americas Watch, and similar organizations for other parts of the world, all of which are premised on the notion that rebellions occur in part because many governments do not respect human rights, perhaps because of sloppiness, or ignorance, or corruption. Americas Watch then brings individual violations to the attention of the media and international organizations. It does not acknowledge that repression, torture, and extermination may be government policy, or that technical assistance programs may be transmitting the technology of torture. 

In Eastern Europe and the former USSR, foundations long supported dissidents, for example, through the Eastern European Cultural Foundation, and ran exchange programs to influence scholars and government officials. With the eclipse of the communist governments, the U.S. nonprofit sector has not only funded individual nonprofits of all kinds, but has attempted to create an entire world in its own image. It does this by sending specialists to write constitutions, to revise civil law and university curricula, and to establish a nonprofit sector in each nation to perform charitable, cultural, social, and educational functions that were formerly government responsibilities. The traditional funders have been joined by an array of foundations created by George Soros for these purposes. Also, the U.S. government, modeling itself on the foundations, has gotten into the act through the National Endowment for Democracy, created by Congress in 1983 to channel funds to overseas political organizations and do overtly what the CIA does covertly. This new addition to the nonprofit sector has been attempting to mitigate the shock of marketization, which has brought about not only unemployment and destitution, but also the collapse of many important cultural and social institutions. 

The environmental movement has also been a threat to “business as usual,” especially when degradation is linked to corporate activity. The response from the foundation world has been the creation and funding of many organizations, think tanks, university institutes, and conferences on “sustainable development,” as well as the ideology itself of sustainable development. 

Foundation influence was substantial in every aspect of the United Nations Conference on the Environment and Development in Rio de Janeiro in June 1992. Many of the nongovernmental organizations at the Global Forum, the “grassroots arena,” were funded by foundations, if not their creations. Even official governmental delegates were tutored by the foundation network, which “provided technical assistance to developing-country governments that lacked the resources to participate fully in the debate, and provided texts to governments that didn’t know the issues well enough to draft the subtle language needed for compromise.”3 

The foundation world’s concern with “citizen participation” is now global. Of course, as in previous leadership-training programs, people will be taught to be effective, that is, to have pragmatic, reasonable goals. A new organization has been created: “CIVICUS: World Alliance for Citizen Participation … members consist of both donors and grantees — to accelerate citizen participation and influence throughout the world…. Its administrative office is currently housed at the Independent Sector in Washington, D.C.”4

This is only a small sample of the protective activities of the “third sector.” Much helpful and good work has been supported. Whether this is enough to stave off planetary disaster in economic, environmental, social, and political dimensions is another question. It often looks as though the energy to devise, promote, and initiate radical alternatives to the present system has been dissipated by the third sector’s protective layer. 

Joan Roelofs

Joan Roelofs is a Professor of Political Science at Keene State College, New Hampshire. She is the author of Foundations and Public Policy: The Mask of Pluralism (forthcoming, January 2003, SUNY Press). This article originally appeared in Monthly Review, September 1995

1. Council on Foundations is an association of 1300 foundations operating in the United States and abroad. Established in 1949, the Council assists grantmakers through leadership and research programs. It recently contributed nearly $6 billion to education, human services, science research, arts, and urban development projects. Council on Foundations Factsheet, 1995.
2. B. Howe, “The Emergence of Scientific Philanthropy,” in Arnove, R, ed., Philanthropy and Cultural Imperialism (Boston: G.K. Hall, 1980), p. 29.
3. J. Maughan, “The Road from Rio,” The Ford Foundation Report, Summer 1992, p. 16.
4. “World Alliance,” Foundation News, September/October 1993, p. 10. _________________

Cyberspace Wars: Microprocessing vs. Big Brother

May 19, 2009
Just ten years ago the issues were so simple, the arguments so clean. The concept of hackers was cute and quaint, best understood through Hollywood thrillers like “War Games.” The major media had yet to use the word “cyberspace,” a term just then created by William Gibson in Neuromancer, his first masterpiece in a strange new genre of “cyberpunk” fiction.
It was ten years ago that establishment liberal David Burnham wrote “The Rise of the Computer State” with Ford, Rockefeller, and Aspen Institute money. This book ignored microprocessing and limited its nightmarish vision to the dangers posed by Big Brother’s mainframes. One chapter covered the threat posed by the National Security Agency (NSA), the largest U.S. intelligence agency with the world’s best computers, an agency that is not subjected to any oversight. In the mid-1970s the Senate Intelligence Committee headed by Frank Church warned that “if not properly controlled,” the NSA’s technology “could be turned against the American people at a great cost to liberty.” For thirty years the NSA obtained copies of most telex messages entering and leaving the U.S., and the CIA illegally intercepted thousands of first-class letters as they left the country. If the high-tech NSA were ever turned against us, Church said, “no American would have any privacy left…. There would be no place to hide.”[1]
One word — privacy — summed up the debate nicely then, because Big Brother had a monopoly on computing power. But some cracks were already appearing in this pre-cyberspace version of the problem. In 1978 the Carter administration admitted that the Soviets were tapping into microwave links in New York, Washington, and San Francisco; microwave was like a sieve compared to the old underground intercity telephone cables. That was only a minor irritant compared to January 15, 1990, when half of the entire AT&T network crashed due to a single software bug. The technicians in the hardware lab where I worked used to kid the software engineers, saying that if civilization had developed the way programmers write programs, one woodpecker could come along and bring it all down. 
Also in 1978 the NSA began harassing certain mathematicians in the private sector, claiming “sole authority to fund research in cryptography.”[2] Then came the microprocessor. Within a few years every mass-market magazine for microcomputer hobbyists was running an occasional article on new encryption techniques, and the NSA couldn’t keep the lid on. Hackers were experimenting on their crude machines with a technique called “public key cryptography.”[3] A recent estimate has it that “a buildingful of NSA’s specially hot-rodded supercomputers might take a day to crack a 140-digit code,” but from NSA’s point of view that’s not good enough. Today’s micros are roughly 100 times faster with 100 times the capacity of the machine I bought ten years ago; the price is lower and it fits on your lap. They can easily encrypt and decrypt with keys this size. While the world’s most powerful supercomputer grinds all day to crack one key, “what is it going to do when 100 million people each use 100 different keys per day?”[4] Big Brother has suddenly lost his monopoly on encryption technology, and hackers everywhere could not be more delighted. 
Yes, the rules of the game have changed, due primarily to the rapid evolution of microprocessing power. The simple concept of “privacy” no longer works as well as it did for Frank Church and David Burnham. The little guy on his microcomputer bulletin board system (BBS) — by one estimate there are now 60,000 of these in the U.S.[5] — wants privacy from Big Brother, but corporations will also be screaming for privacy as they adopt the new encryption technology. And then what about transnational corporations seeking to avoid government intrusion? Or organized crime and international drug cartels? One, two, many Big Brothers? Privacy for whom? 
William Gibson’s vision in Neuromancer may read like heaven for hackers, but for the rest of us the term “cyberpunk” seems about right. We shudder at Gibson’s future, where transnational corporations hold all the wealth and all the information, and outcast data pirates must jack into their cyberspace decks, maneuver around the “black ice” of corporate data security systems, and forage for their livelihoods. It’s rather like children stealing food from garbage cans, but it all seems like ice cream to the hackers who find this inspiring. 
The hacker ethic is a laissez-faire vision of total freedom to microcompute and telecommute, a world of unbreakable encryption, anonymous E-Money transfers, and lately talk of a fiber-optic data superhighway, leading to a place in cyberspace where everyone can connect with anyone. They even have their own Washington lobby. Electronic Frontier Foundation (EFF) started out with funding from Mitch Kapor and a few other computer millionaires, but is now underwritten by IBM, Apple, Microsoft, AT&T, MCI, Bell Atlantic, Adobe, the Newspaper Association of America, and the National Cable Television Association.[6] And the word “cyberspace” is trumpeted in Scientific American, Time, Washington Post, and The New Republic. We can expect to see it soon in Webster’s. This is bigger than a handful of hackers, and it’s time to become conversant with the issues. 
There IS a new reality, and we needed a new word. But more than a mere reality, it’s a massive moving target careening blindly into the future. No one has a handle on it. Cyberpunk novelist Bruce Sterling worries about hacker ethics, one narrow slice of the big picture, but he doesn’t pretend to have many answers.[7] The Washington office of Computer Professionals for Social Responsibility (CPSR) is in the same building as EFF, and both work against the NSA’s efforts to mandate encryption hardware that the government can break — the so-called “Clipper Chip” that was announced by the White House on April 16, 1993.[8] But on other issues CPSR is suspicious of EFF’s pro-corporate leanings. One imagines CPSR arguing that our government, at least, can be petitioned and our representatives are elected. Comparatively, how much input are we allowed by major corporations? Given their priorities, how responsive will they be to the information needs of the poor and underprivileged? What will happen, for example, if public libraries and public schools get left behind in the dust of the data superhighway? 
In Washington DC, the information capital of the world, the newest game in town is Cyberspace Wars. Unfortunately, it’s also the latest buzzword. Pack journalists in this town are seemingly required to log in on these, which invariably generates more heat than light. 
I don’t have a graduate degree, but I spent three years in grad school studying something they called “social ethics,” which included much philosophy. My undergraduate degree is in sociology. In high school I had a ham radio license, and spent many evenings building equipment and working traffic networks, a Morse Code version of “cyberspace.” (These days my transmitter is hooked to my computer.) After grad school I retrained in electronics, and during the 1980s I held a variety of hardware and software jobs in high-tech industries. The hardware ranged from telephone interface circuits to digital switches at the senior tech or junior engineer level. The software was generally written using Assembly, dBase or BASIC to develop hardware control systems or database programs. 
In other words, my career is so checkered that no one will ever refer to me as an “expert,” which is also why you are reading this in an obscure little publication. But I am familiar with the territory. And could it be that too many of the experts are too narrow? Furthermore, I can recognize high-tech hype when I see it and I can recognize sloppy ethics; there’s too much of both in cyberspace. I can forgive EFF guru and co-founder John Barlow, a former Grateful Dead songwriter, for being an “acid-head ex-Republican county chairman” (Mitch Kapor’s description). But when he invokes Pierre Teilhard de Chardin’s “noosphere” as a model for cyberspace, a “global brain that would seal humanity’s spiritual destiny,”[9] I have to draw the line. I studied enough of Teilhard to know that his theology lacks any conception of evil. Where cyberspace and New Age meet out in California’s Silicon Valley somewhere, everything becomes alarmingly mushy. 
Another example of sloppy ethics is found in the way the word “privacy” is babbled about without qualification. I have yet to see any suggestion that the right to privacy ought to be inversely proportional to social power, and should be balanced against the right to know. Joe Sixpack deserves more privacy than David Rockefeller, because Joe’s simple livelihood may be affected by Rocky’s wheeling and dealing. Joe has more of a right to know what Rocky is up to than vice-versa. It does not require a philosophy degree to grasp this; libel law in the U.S., for example, makes a similar distinction between a public figure and a private figure. Every journalist knows this, but when writing about privacy issues the same concept never makes it into print. Then again, my definition of privacy does not justify hacker ethics (microcomputer vs. mainframe, little guy vs. Big Brother), because hackers are motivated more by malicious amusement than by genuine self-defense. 
More hype comes from a bizarre intersection of cyberspace with conspiracy theory: the incredible PROMIS software by Inslaw, Inc. For months I was reading accounts of how this software was revolutionary, and could track everything about everyone. This is crazy, I thought, because as a programmer I knew that software is painfully developmental, never revolutionary. After ten years of inputting for NameBase I also knew that until you key in good data, a mere database program is nothing at all. Then it came out that there was a “back door” installed in PROMIS. This made more sense, as a “back door” to get around password protection is easy for any programmer, and it explained why the intelligence community might be interested in peddling it to foreign governments. 
Please note, however, that you still need physical access to the computer, either through a direct-connect terminal or a remote terminal through the phone lines, in order to utilize a back door. Ari Ben-Menashe wants us to believe that foreigners (Britain, Australia, Iraq, South Korea, Canada, and “many others”) allow technicians from another country to install new computer systems in the heart of their intelligence establishments, and don’t even think to secure physical access to the system before they start entering their precious data. 
Then he claims that PROMIS, “a sinister, Big Brother-like computer program,” can suck in every other database on earth, such as those used by utility companies, and correlate everything automatically. The rest of his book is frequently believable, but this example of hype is grating because publisher Bill Schaap, who is not computer illiterate, should have done Ben-Menashe a favor by deleting the chapter on PROMIS.[10] I generally believe that “conspiracy is the normal continuation of normal politics by normal means,”[11] so I don’t like to see whistleblowers like Ben-Menashe needlessly discredited by their own high-tech gullibility. 
The last example of hype is from a 1988 article, which suggests that the right also suffers from an overactive technical imagination: Retired Maj. Gen. John K. Singlaub, a member of the board, says Western Goals wanted to build a computer data base containing the leadership structure and membership of every left-wing group in the country. The right, he says, needed to match the left’s ability to mobilize on short notice and track the activities of conservative Americans. “The radical left,” he claims, “in this country has an incredible, computer-connected network that has enormous files connected with them.”[12] 
Singlaub swallowed someone’s line the same as Ben-Menashe did, and just as journalists are inclined to do when it comes to high-tech issues. It is no longer excusable for major players to remain ignorant of important high-tech developments. The remainder of this article will follow the battles and trends of the last few years — the Cyberspace Wars that unfolded as microprocessors robbed Big Brother of its monopoly on data access and manipulation. Then I’ll propose a somewhat expanded, more useful definition of “cyberspace” to include all digitized information, and consider the issues involved in the potential data networks that worried Singlaub. His notion of the left was fantastic and his plans for Western Goals never materialized. But the Anti-Defamation League of B’nai B’rith, which is beginning to use computers, was caught this year in a massive spying scandal. Their defense of spying is my ultimate example of sloppy ethics. In another ten years there might not be scandals, because the files will have been sucked into cyberspace, complete with unbreakable encryption and access by anonymous players. It may not be the NSA, or the ADL, or any current entity. But we will all be at risk, and Ben-Menashe, Singlaub, and the cyberpunk novelists will finally seem prophetic. 
Privacy and domestic security are a zero-sum game. Society consists of discrete individuals; if these individuals each have total privacy, then society has zero security. Conversely, for the body politic to have total security as an organism, the individuals within must have zero privacy. Idealists may quibble with this scenario, but today we’re required to coexist with massive national security establishments, and they tend to see things this way. Realistically, then, it’s a useful handle for understanding Cyberspace Wars. 
A 1992 Harris poll showed that 78 percent of Americans now express concern about their personal privacy, and 68 percent perceive a threat from computers. These figures have roughly doubled over the last twenty years.[13] One area of concern is in the workplace, where U.S. privacy laws lag behind those in Europe and Japan. Although the 1986 Electronic Communications Privacy Act (ECPA) prohibits phone and data-line tapping, law enforcement and employers are exempted, so an E-Mail system that is paid for or run by the employer might not be secure. Macworld asked 301 companies about snooping, and “about 22 percent of our sample have engaged in searches of employee computer files, voice mail, E-Mail, or other networking communications.”[14] Job applicants sometimes find that the company has a contract with a research service to scan credit reports, workers’ compensation claims, medical records, and criminal histories. Access to some of this data for such a purpose has recently become illegal, but employers say they need this data because of the rash of “negligent hiring” lawsuits. 
Personal privacy is a problem outside the workplace as well. Surveys of the data available from the big three credit bureaus — TRW, Equifax, and Trans Union — find error rates of up to 43 percent. Federal laws have addressed this issue for years, and more may be on the way. Lately the credit bureaus have seen their monopoly on personal information eroded from a variety of commercial information brokers (over 1,253 are listed in the Burwell Directory). Most of these collect information on companies, but some specialize in records such as address, marital, salary, driving, and employment history, as well as corporate affiliations, who your neighbors are, vehicle and real estate holdings, and civil and criminal court records. Lotus Development Corporation (where Mitch Kapor made his millions) and Equifax recently proposed to compile some of this data for 120 million consumers on CD-ROM, and market it for $700 as “Marketplace: Households.” But 30,000 angry letters killed their proposal.[15] 
If it’s only name, address, and telephone number that interests you, then check out ProPhone.[16] This is a set of seven CD-ROM disks consisting of 70 million residential and 7 million business listings. The software can access the listings through either the name, address, or phone number, and the business listings are indexed by SIC code as well. The listings tend to be at least several years old or otherwise incomplete, but this will improve over the next few years. We bought it because most NameBase users are investigative journalists. Zeroing in on a neighborhood where you lived as a child in a little town in North Dakota, and getting a printout of today’s residents, feels something like what hackers must feel when they break through password protection. It also feels like an excellent reason to keep one’s own number unlisted. 
While cyberspace trends give privacy advocates plenty to worry about, the situation is equally alarming from the perspective of the government. If you live in an apartment building and have a scanner, your neighbors’ cordless telephone conversations are easily monitored. Cellular phone monitoring became illegal in 1986 but not cordless, which is reasonable because no one HAS to use a cordless phone. The law against cellular monitoring was opposed by hams and shortwave listeners, who generally feel that if the signal makes it into their living rooms, they have a right to tune it in. Last year President Bush signed a second law, prohibiting the manufacture or import of scanners that are capable of cellular monitoring. But in a demonstration for a congressional subcommittee last April, a technician took three minutes to reprogram a cellular phone’s codes so that it could be used for eavesdropping. It turns out that you don’t have to use a scanner at all: “Every cellular phone is a scanner, and they are completely insecure,” John Gage of Sun Microsystems told the subcommittee.[17] Congress keeps slipping off the back end of the cyberspace curve, simply because the curve is moving so fast. 
Congress is caught in the middle, pulled in one direction by privacy advocates and the other by our national security establishment. In March 1992 the FBI proposed legislation that would require private industry to provide access ports in digital equipment for the purpose of tapping specific conversations. Telephone carrier signals are increasingly digitized and multiplexed, with specific channels interleaved among many others in a continuous stream of ones and zeros. For decades, the FBI needed only a pair of alligator clips to tap phones, and now they’re getting panicky. This particular proposal died, but the FBI is going to try again. Several years ago I worked for a little company that made analog long-distance equipment for export to Soviet bloc countries. Frequently the specifications called for an access port for each channel, which we dubbed the “KGB output.” Now it turns out that the FBI wants the same thing. 
Not to be outdone, the NSA played the major role in the development of the “Clipper Chip” recently approved by President Clinton, and soon the government will start requiring industry to provide phones and computers equipped with it. This chip contains encryption algorithms that can be broken by two halves of a secret master key. The idea is that someone with a warrant will then go to each of two agencies to get the portion of the key in their custody, like two pieces of a treasure map torn in half. This chip will be used to scramble phone lines used for voice, modems, and fax machines. Presumably the NSA already has both halves of the key, and their record for self-restraint is not reassuring. Private industry is not enthusiastic. For one thing, U.S. products containing NSA-breakable encryption will not compete well on the international market. One person asked, “Do you think I’m dumb enough to buy something endorsed by the NSA?”[18] 
Some worry that the administration may try to ban encryption altogether if this chip doesn’t catch on. Ham radio operators, for example, have for decades been prohibited from using encryption on the air, and export of encryption software has been restricted for years under COCOM regulations. Others are amused that the government is even bothering along these lines, since encryption that is practically unbreakable is already easily purchased, or even available as Shareware by downloading it from a BBS. 
The most dramatic conflict between privacy and security occurred in 1990. Big Brother was already edgy, as BellSouth in Florida had discovered in mid-1989 that microcomputer intruders had been harmlessly reprogramming their digital switches. It seems that callers to the Palm Beach County Probation Department were reaching “Tina,” a phone-sex worker in another state. BellSouth was not amused, and worried that their 911 system was vulnerable. Then when the AT&T system half-crashed the following January — even though this was NOT hacker-related — the Secret Service, which had nothing if not an active imagination, began working closely with telco cops. The federal effort started years earlier after Congress passed the 1986 Computer Fraud and Abuse Act, but in May 1990 it culminated in Operation Sundevil, by far the largest series of high-profile raids ever conducted against hackers. About 42 computer systems were seized around the country, along with 23,000 floppy disks. 
Federal anti-hacker strategy involves a dramatic search and seizure. Agents crash simultaneously through the front and back doors, everyone is questioned, and then they carry off the evidence: computers, monitors, keyboards, printers, modems, manuals, disks, notebooks, telephones, answering machines, and even Sony Walkmans. There are no arrests and even much later charges are rarely filed. In the meantime, however, the feds study their “evidence” for months or even years. It’s enough to bring many hackers to their knees. 
EFF began defending these hackers, and by 1991 the steam had gone out of the crackdown. One document, a description of 911 system administration called “E911,” was found on a BBS and came to the attention of AT&T security. They considered it hot property worth exactly $79,449. E911 later formed the basis of one of the hacker prosecutions, but the government’s case fell apart when the defense showed that more detailed information about the 911 system was publicly available from AT&T for the mere price of $13: The right hand of Bellcore knew not what the left hand was doing. The right hand was battering hackers without mercy, while the left hand was distributing Bellcore’s intellectual property to anybody who was interested in telephone technical trivia…. The digital underground was so amateurish and poorly organized that it had never discovered this heap of unguarded riches.[19] 
Another hacker legal victory resulted from a raid against Steve Jackson Games of Austin, Texas. SJG published games that were played on paper, with pencils, dice, and books. Jackson and his fifteen employees used computers to run the business, not for hacking. One of the games he developed was published as a book titled “GURPS Cyberpunk.” Upon seeing the word “cyberpunk,” our fearless G-men assumed that the E911 document was lurking on SJG’s computers. The warrant was sealed, however, so for months the SS led everyone to believe that they carted off SJG’s computers because SJG presumed to publish a science fiction book. This naturally resulted in much sympathy for the defense. Without its computers the company was crippled, and had to lay off half of its employees. 
In 1991 the company sued the government, and on 12 March 1993 a federal judge in Austin awarded the company $42,000 for lost profits in 1990, plus expenses. He also ruled that the Secret Service violated the 1986 ECPA because it had seized stored messages from many users of the BBS who were not suspected of anything. Several hackers in other cases have actually gone to prison over the last few years. But considering how sociopolitically stunted many hackers were until EFF finally sent in some lawyers, it’s amazing how little the government has to show for all of its dramatic efforts. 
The term “cyberspace” is normally meant to convey that fuzzy area between two digital devices, like the term “airwaves” that refers to a thin slice of the spectrum most often used for communications. But only a small portion of this accepted notion of cyberspace is in the form of microwave links; the rest is plain old traces or wires, from inside the microprocessor chip all the way to the telco office and beyond. Before “cyberspace” finds its way into the dictionary, I propose an expanded definition which will place the emphasis on the unique nature of digitized information. Any digitized information is already in cyberspace, whether it’s in a file on a floppy, a CD-ROM at your local library, or a minicomputer on an Internet node. Once digitized, information takes on an entirely new quality; it is this quality that begs for a new word to describe it. 
First and foremost, digitized information can be copied locally or remotely an infinite number of times without any degradation. Secondly, the physical space required for storage is minuscule by previous standards. And finally, the software required to translate digitized information between two devices with different functions is usually trivial. However, if the data is converted to analog form, as when a file is sent to a printer, then its “cyberspace” quality is lost. Converting from the printed page back into ones and zeros is not trivial, and generally causes information to be lost or degraded. 
NameBase resides in cyberspace, then, even though we send disks through the mail. It’s trivial to dump the results of searches into a new file, and zap them by modem to another computer. Daisy-chain that file between every computer in the world, and if the transfer software uses error-correction protocol, at the end of the process you have exactly the same file you started with. If it didn’t infringe on our copyright, every set of NameBase disks we’ve distributed could each generate an infinite number of additional sets. Incidentally, another advantage to disk distribution as opposed to on-line systems is its decentralized quality. One of AT&T’s computers in Dallas had so much extra capacity that they generously allowed it to used as a BBS host. But as their paranoia increased in 1990, AT&T considered it too risky and pulled the plug without warning, leaving 1,500 little modems out there, searching and chirping for their disconnected mother.[20] 
Any public or private intelligence agency that uses computers is potentially more ominous than one that doesn’t, and the public has a right to expect certain standards for collection and dissemination. An example of an intelligence agency that fails this test is the Anti-Defamation League, whose San Francisco and Los Angeles offices were caught in a scandal earlier this year. The tax-exempt ADL has 30 regional offices in the U.S. (and offices in Canada, Paris, Rome, and Jerusalem), a staff of 400, and an annual budget of $32 million. For many decades they have been gathering information on U.S. citizens, using public sources as well as paid infiltrators, informants, investigators, and liaison with local law enforcement and the FBI. There is also evidence of connections with Mossad and South African intelligence. 
As a private agency the ADL enjoys no oversight, no requirements for probable cause prior to political spying, and no Privacy Act or Freedom of Information Act responsibilities to the public. By contrast, the FBI, CIA, and some major police departments in the U.S. are held accountable by various hard-won legal restrictions. Some observers feel that the ADL’s relationship with many local police, the FBI, and intelligence agencies suggests that they are playing the role of a cutout. Government agencies might be getting the information they want without incurring any legal risk, simply by using the ADL. In exchange, the ADL apparently enjoys privileged access to police and FBI files. 
This is what happened in San Francisco, where a police intelligence officer (and former CIA agent in El Salvador) named Tom Gerard has been indicted for passing confidential police intelligence files to the local ADL office. Another principal in this case is Roy Bullock, who was a secret employee of the ADL for 40 years, a close associate of Gerard, and also an FBI informant. After learning that Gerard was meeting with South African intelligence, the FBI investigated. This encouraged the involvement of San Francisco prosecutors. They served two ADL offices with search warrants, and Bullock’s computer was seized from his home. Interviews with Bullock revealed that he had tapped into one group’s phone message system, and his computer contained data on 9,876 individuals and 1,359 political groups, distributed about evenly on both the left and right.[21] While it’s evident that ADL spying is centrally coordinated from New York by ADL spymaster Irwin Suall, at this writing it’s unclear whether San Francisco authorities will try to prosecute anyone from this powerful organization. 
The ADL does not hail from any particular portion of the left-right political spectrum. Such a classification is irrelevant once a group becomes a private intelligence agency, as then they generally inbreed with their adversaries and mutate into a peculiar political animal. John Singlaub’s Western Goals, and Political Research Associates (PRA) of Cambridge, Massachusetts, both extremely tiny compared to the ADL, are two additional examples of this phenomenon. All three groups identify with certain constituencies as a flag of convenience: the ADL with the Jewish community, Western Goals with the right, and PRA with the left. But by using the same methods of collecting information — garbage surveillance, infiltration of target groups, and the use of guilt-by-association in their propaganda — each of these three groups has perverted itself with clandestinism and denunciation for its own sake. 
This opinion of mine is based on statements from John Rees (formerly of Western Goals and a person with extensive computer files on the left), Chip Berlet of PRA (formerly a BBS operator, with extensive files on the right), and testimony from Mira Boland of the ADL (extensive files on everyone). All admit to attending one or more secret meetings in 1983-1984 with U.S. intelligence operatives such as Roy Godson, representatives from intelligence-linked funding sources, and journalists such as Patricia Lynch from NBC. Besides Berlet, other leftists attending included Dennis King and Russ Bellant. The purpose of these meetings was to plan a campaign against Lyndon LaRouche. The LaRouche organization was another private intelligence agency, but they had too many curious foreign contacts and were getting too close to certain individuals at the National Security Council. More importantly, LaRouche opposed U.S. intervention in Nicaragua just as the NSC was planning an expanded role there.[22] In another ten years, scenarios like this might be played out in cyberspace. Instead of a fifteen-year prison sentence, a future incarnation of LaRouche might jack into his cyberspace deck one day, and to his horror, discover that his collection of hard-won access codes no longer works. 
ADL national director Abraham Foxman defends his organization by claiming that the ADL’s sources “function in a manner directly analogous to investigative journalists” and “the information ADL obtains is placed in the public domain.”[23] He adds that “the very people making these charges [of ADL spying] themselves maintain and use such files whether they be journalists, lawyers or academics.”[24] But as we begin to enter the cyberspace age, his excuses seem particularly inadequate. 
We have only Foxman’s dubious word that ADL’s information is placed in the public domain. Various investigative journalists, even those whose interests parallel the ADL’s, have told me that it’s difficult to get access to the ADL’s main library in New York; you have to be connected to their old-boy network before you can see their files. Secondly, journalists seldom use the methods preferred by ADL’s spies: going through a target’s garbage and using deception to infiltrate target groups. On the rare occasions that a journalist does these things, it is implicitly balanced against the public interest, and done only to develop a specific story. Once published, the journalist’s targets know what happened and have recourse to civil litigation. Normally journalists are expected by the standards of common decency to contact all parties criticized in a story, and double source any dubious items. Journalists identify themselves before soliciting any information, in order to provide the choice of cooperating on the record, not for attribution, on background, off the record, or refusing comment altogether. 
Finally, the public reasonably expects that journalists are not secretly working with law enforcement and intelligence agencies.Foxman is simply blowing smoke on this issue. At Public Information Research we resent any hint of a comparison between his activities and ours. NameBase is basically a value-added public library; it has a citation from the public record for every bit of information, and is available to every member of the public. The extra value comes from the enhanced access to the public record. We don’t consort with law enforcement or intelligence agencies, and we don’t use deception to collect information. 
On one occasion in ten years, a person whose name we had indexed complained to me that the source we cited misrepresented the facts. I asked him for a copies of published material about him that he considered more accurate, and cited these under his name along with the original citation. (If he didn’t have such sources, but could convince me that a source we cited was mistaken, then I would I have deleted the citation.) On another occasion a person with whom I had worked for two years was upset to find her name in NameBase after I entered a book about the left that was published by the right. Her name is still in NameBase because I knew that the information about her in this book was true. I don’t claim to be objective; my subjectivity is seen in the annotations I write for the sources, and in the selection of materials for inputting. This level of subjectivity comes with the territory — sometimes it’s unavoidable, and other times I like it, feeling that it’s my only reason for continuing. But at the same time I do try to use common sense.
It would be comforting to have a Cyberspace Bill of Rights and Responsibilities, if the target wasn’t moving so rapidly. Even an issue as self-evident as “privacy” is tricky, as the transnational corporations join the chorus in an effort to preclude government regulation. The international elites who control these corporations are well on their way toward installing the New World Order, and are no friends of the little guy who really needs privacy. Then again, our national security apparatus has an equally poor record. Everyone is waiting to see where the chips fall before they declare themselves. In the meantime we find ourselves peering over the edge into cyberspace, surrounded by high-tech hype and journalistic buzzwords. We need a better-informed public with a keener sense of their own interests, but there’s no time to wait. For those of us who work in this new cyberspace, our ethical thinking — the ability to consider interests beyond our own — must be honed to a new level. 
Daniel Brandt

1. David Burnham, The Rise of the Computer State. Forward by Walter Cronkite. (New York: Random House, 1983), pp. 124, 130, 206.
2. Ibid., p. 139.
3. John Smith, “Public Key Cryptography,” Byte Magazine, January 1983, pp. 198-218.
4. Kevin Kelly, “Cypherpunks, E-Money, and the Technologies of Disconnection,” Whole Earth Review, Summer 1993, pp. 46-47.
5. Washington Times, 10 May 1993, p. A3, citing a recent issue of Boardwatch, “a leading BBS magazine.”
6. Robert Wright, “The New Democrat from Cyberspace,” The New Republic, 24 May 1993, p. 20.
7. Bruce Sterling, “A Statement of Principle,” Science Fiction Eye, June 1992, pp. 14-18.
8. John Mintz and John Schwartz, “Chipping Away at Privacy? Encryption Device Widens Debate Over Rights of U.S. to Eavesdrop,” Washington Post, 30 May 1993, pp. H1, H4.
9. Wright, p. 26.
10. Ari Ben-Menashe, Profits of War: Inside the Secret U.S.-Israeli Arms Network (New York: Sheridan Square Press, 1992), pp. 127-141.
11. Carl Oglesby, The Yankee and Cowboy War (Berkley Publishing, 1977), p. 25.
12. Doug Birch, “Master of the Politics of Paranoia,” Baltimore Sun Magazine, 5 June 1988, p. 26.
13. Charles Piller, “Privacy in Peril,” Macworld, July 1993, p. 124.
14. Charles Piller, “Bosses With X-Ray Eyes,” Macworld, July 1993, p. 120.
15. Piller, “Privacy in Peril,” p. 126-127.
16. Produced for IBM-compatibles with a CD-ROM drive by ProCD, 8 Doaks Lane, Little Harbor, Marblehead MA 01945, Tel: 617-631-9200, Fax: 617-631-9299. Suggested list for ProPhone is $449, but several mail-order firms offer it for $179 or less.
17. Cindy Skrzycki, “Dark Side of the Data Age,” Washington Post, Business Section, 3 May 1993, pp. 19, 28.
18. Mintz and Schwartz, p. H4.
19. Bruce Sterling, The Hacker Crackdown: Law and Disorder on the Electronic Frontier (New York: Bantam books, 1992), p. 278.
20. Ibid., pp. 125-126, 141-142.
21. I obtained the 700 pages of documents which San Francisco prosecutors released on 8 April 1993. For a summary of this case see Robert I. Friedman, “The Enemy Within,” Village Voice, 11 May 1993, pp. 27-32; and Richard C. Paddock, “New Details of Extensive ADL Spy Operation Emerge,” Los Angeles Times, 13 April 1993, pp. A1, A16.
22. For an outline of the conspiracy against LaRouche by the ADL and U.S. intelligence operatives, see U.S. District Court for the Eastern District of Virginia, Alexandria Division, Petitioners’ Rebuttal to the Government’s Response and Memorandum. In United States v. Lyndon H. LaRouche, Jr., William F. Wertz, Jr. and Edward W. Spannaus, Case No. 88-243-A. Submitted by Odin Anderson, Ramsey Clark, and Scott T. Harper, attorneys for the defense, 1 May 1992, pp. 1-16. For a description of the secret meetings at the residence of John Train, see Herbert Quinde, Affidavit, Commonwealth of Virginia, County of Loudoun, 20 January 1992, pp. 1-28. Quinde describes interviews with Rees, Berlet, and several others. For confirmation of Chip Berlet’s role, see Doug Birch, “Master of the Politics of Paranoia,” Baltimore Sun Magazine, 5 June 1988, p. 27. Birch’s description of John Rees’ career includes a quotation from Chip Berlet, a longtime Rees watcher, that inadvertently confirms Berlet’s collusion with Rees at an anti-LaRouche meeting. Berlet’s spying is confirmed by his quotations in David Miller, “Letter from Boston,” Forward, 22 January 1993, pp. 1, 14. This article also quotes ADL’s Leonard Zakim: “The information that Political Research Associates has shared with us has been very useful.”
23. Abraham H. Foxman, “Letter to the Editor,” Village Voice, 18 May 1993, p. 5.
24. Abraham H. Foxman, “It’s a Big Lie, Hailed by Anti-Semites,” New York Times, 28 May 1993, p. A29.

Big Brother Covets the Internet

May 19, 2009

“The Internet offers intelligence agencies an amazing potential source for information collection and for monitoring the activities of their targets. They not only can plug into communications through the names of senders and receivers of e-mail, but also through keyword monitoring of messages as they have done for many years. If you add e-mail to their monitoring of telephone and other credit card transactions, they can get a very complete picture of a given person’s activities.

“On my long trips to the United States for university lecturing and other activities, such monitoring enables them to know my every flight, hotel and car rental, and local contacts, not to mention my complete itineraries. All this prior to my flight from Germany to the U.S. Add to this my other calls and bank transactions and you have almost every imaginable detail. It is a perfect system for spy agencies and getting better all the time.”

— former CIA officer Philip Agee
What the government giveth, the government can taketh away. This message has been received by Internet watchers recently, as Big Brother begins to confront the issue of online computer security. Internet hacking is at an all-time high, the Pentagon claims, just as big business is buying into the Internet in a big way. Something has to give.
“Hackers are even better than communists,” says one Washington activist who deals with civil rights and electronic privacy issues.

Several weeks later, on November 22, 1994, NBC News with Tom Brokaw underscored his point with an alarmist segment by Robert Hager: A Pentagon unit is poised to combat unauthorized entries into some of the world’s most sensitive computer systems. But despite all the safeguards and a computer security budget in the hundreds of millions of dollars, attempts were made to break into the Pentagon’s computers on 254 separate occasions in the last twelve months alone, almost always through the Internet…. NBC News has learned that intrusions into the Defense Department’s computers go unreported 98 percent of the time — 98 percent! — often because no one is aware information is being pirated. Pentagon officials are worried the nation’s security is being compromised.

Only Joe McCarthy knows how Robert Hager came up with a figure of 98 percent for undetected break-ins, and then pretended it was worth repeating. Hager continued with his voice-over and began talking about hackers breaking into one nameless hospital’s records and reversing the results of a dozen pap smears. Patients who may have had ovarian cancer, Hager claimed, were told instead that they were okay.

If this were an isolated story, then the Newsgroup subscribers on who reacted to Hager’s segment, by speculating that something must be behind it, might be dismissed for weaving yet another paranoid thread. But here I have to agree that even if you’re paranoid, they still might be after you. On this story, at least, NBC seems to be the mouthpiece for larger forces.

“Organized Crime Hackers Jeopardize Security of U.S.” reads the headline in “Defense News” (October 3-9, 1994). This article reported on a conference sponsored by the Center for Strategic and International Studies, a prestigious Washington think tank with close connections to the intelligence community. Dain Gary from the Computer Emergency Response Team in Pittsburgh, a hacker-buster group funded by the Pentagon, claimed that “there are universities in Bulgaria that teach how to create more effective viruses.” Mr. Gary did not respond to my letter requesting more information.

The government started the Internet, and then over a period of years it lost control. This was partly due to the unique architecture of the Internet, which has its roots in a 1964 Rand Corporation proposal for a post-Doomsday network. Rand’s idea was that information packets could contain their own routing information, and would not have to rely on centralized switching. Anarchy, it seems, is the best antidote to vulnerable communications systems.

Recently the government, due to a combination of tight budgets and a trend toward deregulation, has allowed big business to take over the main conduits, or “backbone” of the Net. Corporations smell a huge potential cybermarket, and are investing money to get themselves positioned on the Net. They want to be ready when it comes time to harvest the expected profits.

Today we have a global network with 30 million users. No one is in control, and no one can pull the plug. If one telecommunications company decided to shut off the segment of the Net that they administer, other companies could simply route their traffic around them. And if it weren’t for password protection and the “firewalls” installed by corporations to protect their local turf from other computers, each of Internet’s users would have access to all the other computers on the Net.

Passwords and firewalls don’t always work. A hacker who burrows in and obtains the right sort of access can watch the passwords of other users fly by, and can capture them for later use. In November 1994, General Electric’s robust firewalls were circumvented by hackers, according to a company spokeswoman, and GE had to pull their computers off the Net for a week to revamp their security procedures. In two other incidents, a group of hackers calling itself the Internet Liberation Front managed to break into systems. On one they posted a message warning corporate America against turning the Internet into a “cesspool of greed.”

So Big Brother has a problem. But it’s not so much a problem of national security, except perhaps in the broad sense of economic vulnerability. Defense and intelligence systems that are classified are not connected to the Internet. When the Pentagon complains to NBC about national security, what they really mean is that they might have to forego the convenience of Internet contacts with their contractors, and use other means instead.

No, Big Brother in this case is not the Pentagon, it’s really big business. They’re chomping at the Net’s information bits, while the computer security problem is reining them back. Until this problem is solved, the Net cannot be used for serious commercial transactions. Big business seems to be feeding scare stories to the media, and the Pentagon is helping them out by raising the time-tested bugaboo of national security — the only surefire way to scare Congress into repressive legislation. America leads the world in information technology, and the Internet is potentially a lucrative link in tomorrow’s profit chain. If only those pesky hackers would go away.

The hackers that do exist are grist for the system’s disinformation mill, so if they didn’t exist the system would probably have to invent them. The bottom line for those whose opinions matter is that the Internet has potential to help the rich get richer. Hackers belong in jail, of course, but there’s also the Net surfer who’s clogging bandwidth with idle chatter, or even swapping copyrighted material with their friends. Frequently this unprofitable silliness is subsidized by the universities. All big business wants from these folks is consumption — they may browse through online catalogs and debit their credit lines, but forget all this virtual community stuff. It’s got to go.

The way to reboot the system is to boot the little guy, and the best way to do this has always been to let the government bash some heads. The digital equivalent of this is the one-two punch of the Clipper chip and the Digital Telephony Bill. Clipper is an ongoing government effort to encourage the mass marketing of a encryption standard that can be tapped by them. It was developed with help from the National Security Agency (NSA), which is worried about the emergence of encryption that can’t be easily broken by their supercomputers. The FBI’s favorite is the Digital Telephony Bill, which was passed without debate by Congress last October. It forces telecommunications companies to modify their digital equipment so that the government has access to wiretapping ports when they come calling with a warrant.

Warrants? When was the last time the intelligence community took warrants seriously? Just in case a few of them get nervous while breaking the law, the Foreign Intelligence Surveillance Act of 1978 set up a secret court to issue warrants in situations involving a foreign threat. This court has yet to turn down a single request put before it — even rubber stamps don’t perform this well. All it would take is a vague rumor of a Bulgarian virus with Russian organized crime lurking close behind, and presto, a secret warrant is issued to tap the Internet backbone so that U.S. spooks can look for nasty digital germs. The judges aren’t competent to evaluate technical rumors, and with their track record, no one pretends that they will call in their own experts. Why bother, since the proceedings are secret and there’s no accountability?
But then, who needs a warrant? According to reports, the NSA, Britain’s Government Communications Headquarters (GCHQ), and Canada’s Communications Security Establishment, all practice what might be termed the “sister agency gambit.” They do this by stationing liaison officers in each of the other agencies. When they want to tap their own citizens without a warrant, they just call over the liaison officer to throw the switch. Now it’s called “intelligence from a friendly foreign agency” and it’s all legal.
Particularly with the Internet, where jurisdictional problems involve many nations, this sort of transnational cooperation will be the rule rather than the exception. The excuse for monitoring the Net today might be the security problem. Tomorrow the security problem may be solved, one way or another, and the Net will be used for commercial transactions. Then the excuse for monitoring will be the need to detect patterns of commerce indicative of money laundering, much like FinCen does today.

FinCen, the Financial Crime Enforcement Network, monitors Currency Transaction Reports from banks, and other records from over 35 financial databases, as well as NSA intercepts of wire transfers into and out of the U.S. This data is shared with the DEA (Drug Enforcement Administration), CIA, DIA (Defense Intelligence Agency), IRS, FBI, BATF (Bureau of Alcohol, Tobacco, and Firearms), and the Secret Service. FinCen, which began in 1990, is an attempt to track, cross-reference, and apply artificial-intelligence modeling to all the relevant data from government agencies. Now they are floating a proposal for a deposit tracking system. When the Internet begins carrying financial transactions, FinCen is sure to be poking around behind the scenes.

One characteristic of the Internet is that surveillance on a massive scale is easy to accomplish. With telephone voice or fax transmissions, the digital signal is an approximation of the analog signal. Massive computing power, relatively speaking, is needed to extract the content in the form of words or numbers. This is called “speech recognition” for voice, or “optical character recognition” for fax. Data on the Internet, on the other hand, is already in the form that computers use directly. Moreover, each packet conveniently includes the address of the sender and receiver.
It’s a simple matter to tap an Internet backbone and scan every packet in real time for certain keywords. With voice and fax, it’s only practical to capture specific circuits, and then examine them later for content. On the Internet, even encryption doesn’t solve the privacy problem, because the Net is also ideal for message traffic analysis. A stream of encrypted messages between two points could be detected by a computer, which then spits out a report that’s sure to attract attention. Each end of this stream is now identified as a target, which means that other types of surveillance are now practical. The Internet, in other words, increases opportunities for surveillance by many orders of magnitude, with or without encryption.

Those who have the resources can try to befuddle the spooks who monitor them by disguising their transactions. Shell corporations, off-shore banks, and cash-intensive businesses will still be popular with money launderers. Seemingly innocent transactions will slip through the net, and for the most part only the little guy without transnational resources will get caught.
Which is exactly the point. The little guy on the Net is surfing on borrowed time. There are too many pressures at work, too many powerful interests to consider. The Net is too important to the Suits — if not now, then soon.
If it were only a case of Us and Them, it would be easier to sort it all out. But the self-styled Internet Liberation Front, and similar types with hacker nonethics, are part of the problem as surely as the greedy capitalists. Nor is it easy to see much hope in the way the little guy — the one who obeys the law — has used the Internet. The entire experiment has left us with 30 million connections but very little public-sector content. Apart from the sense of community found in Newsgroups, list servers, and e-mail, not much is happening in cyberspace. And just how deep is this community when the crunch comes? Not nearly as deep as the counterculture of the 1960s, and look what happened to them.
Rand Corporation, meanwhile, is churning out studies on cyberwar, netwar, and information warfare. The Defense Department, at the urging of their Advanced Research Projects Agency (which started the Internet), recently signed a memorandum of understanding with the Justice Department, at the urging of the FBI and the National Institute of Justice. This memorandum anticipates a coordinated effort on high-tech applications for “Operations Other Than War” and “Law Enforcement.” The game is on, and the high-tech high rollers are getting it together.

The neat graphics and sassy prose in “Wired” and “Mondo 2000” magazines notwithstanding, the Net-surfing culture is more virtual than real. Cyberspace cadets are no match for the real players, and it’s going to be like taking candy from a baby. Lots of squeals, but nothing to raise any eyebrows. It’s all so much spectacle anyway. Guy Debord (1931-1994) summed it up in “Society of the Spectacle” in 1967, when Rand was still tinkering with their Doomsday idea: The technology is based on isolation, and the technical process isolates in turn. From the automobile to television, all the goods selected by the spectacular system are also its weapons for a constant reinforcement of the conditions of isolation of “lonely crowds.” The spectacle constantly rediscovers its own assumptions more concretely…. In the spectacle, which is the image of the ruling economy, the goal is nothing, development everything. The spectacle aims at nothing other than itself.
Then again, the Spectacle does make for excellent Internet watching, once silly notions like “information wants to be free” are discarded, and the drama can be enjoyed for what it is. Basically, it’s one more example of something that happens frequently in history. The little guy thinks he has created something new and powerful. He’s so busy congratulating himself, that when the Big Dogs begin to notice, the little guy doesn’t. In the end, it’s merely another dog-bites-man nonstory that won’t be found on NBC News. This just in: “Little guy gets screwed.”

Daniel Brandt