The Subprime Trump Card: Standing up to the Banks

Source: Dr. Ellen Brown, Global Research. See her website, Web of Debt, for excerpts from her book.

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

– Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)

Jefferson had it right. More than 1.5 million homeowners are expected to enter foreclosure this year, and about half of them are expected to have their homes repossessed. If the dire consequences Jefferson warned of 200 years ago have been slow in coming, it is because they have been concealed by what Jerome a Paris calls the Anglo Disease – “the highly unequal economy whereby the rich and the financial sector . . . capture most of the income but hide it by providing cheap debt to the middle classes so that they can continue to spend.” He calls “finance” the “cannibalistic” sector in today’s economy. Writing in The European Tribune this month, he states:

“[O]ne of the more attractive features of the financial world, for its promoters, is its ability to concentrate huge fortunes in a small number of hands, and promote this as a good thing (these people are said to be creating wealth, rather than capturing it). . . . [O]f course, the reality is that such wealth concentration is created by squeezing the rest, as is obvious in the stagnation of incomes for most in the middle and lower rungs of society. This is not so much wealth creation as wealth redistribution, from the many to the few. But what has made this unequality . . . tolerable is that the financial world itself was able to provide a convenient smokescreen, in the form of cheap debt, provided in abundance to all. The wealthy used it to grab real assets in funny money, and the rest were kindly allowed to keep on spending by tapping their future income rather than their insufficient current one; in a nutshell, the debt bubble hid the class warfare waged by the rich against everybody else . . . .”¹

Now the debt bubble is bursting, with the anticipated real estate crash, banking crisis, foreclosures, and inevitable recession. “The income capture mechanisms set up during the bubble have not been reversed, so the pain is falling disproportionately on the poorest,” writes Jerome a Paris. Meanwhile, finance is being bailed out. What’s to be done? “[T]he financiers . . . will say that more ‘reform’ and ‘deregulation’ and tax cuts are needed,” he says, but “maybe it’s time to stop listening to what is highly self-interested drivel, and take back what they grabbed: it’s not theirs.”

Good idea, but how? The financiers own the media, and their massively funded lobbies control Congress. How can we the people get enough clout to take on the giant financial and corporate giants? What can we do that will make politicians sit up and take notice?

How about swarming the courts? New case law indicates that a majority of the 750,000 homeowners expected to lose their homes this year could have a valid defense to foreclosure. As much as $2 trillion in real estate may be vulnerable to this defense, providing a very big stick for a lobby of motivated debtors. Mobilizing that group, in turn, could light a fire under the investors in mortgage-backed securities — the pension funds, money market funds and insurance companies holding these “orphan” mortgages. These investors also wield a very big stick, in the form of major law firms on retainer. When the embattled banks demand a bailout because they are “too big to fail,” the taxpayers can respond, “You have already failed. It is time to try something new.”

The Legal Trump Card: Make Them Produce the Note

A basic principle of contract law is that a plaintiff suing on a written contract must produce the signed contract proving he is entitled to relief. If there is no signed mortgage note or recorded assignment, foreclosure is barred. The defendant must normally raise this defense, and most defaulting homeowners, unaware of legal procedure and concerned about the expense of hiring an attorney, just let their homes go uncontested. But when the plaintiffs bringing subprime foreclosure actions have been challenged, in most cases they haven’t been able to produce the notes.

Why not? It appears to be more than just sloppy paperwork. The banks that originally entered into these risky subprime arrangements generally did so because they had no intention of holding the loans on their books. The mortgages were immediately sliced and diced, bundled up as mortgage-backed securities (MBS), and sold off to investors. Loan originators sold the mortgages to financial institutions or other banks, which then sold the rights to the monthly mortgage payment income to investors, while transferring the responsibility to collect these payments to specialized mortgage servicing companies. The result has been to slice up the mortgage contract, with no party really having ownership of the original paperwork. When foreclosure has been initiated, the servicer or trustee acting as plaintiff now has trouble proving that it originated the mortgage or owned the loan. In order for a second bank or financial institution to have standing to bring a foreclosure lawsuit in court, it must have been assigned the mortgage; and with the collapse of the housing market, many of the subprime lenders have gone out of business, making it impossible to contact the originating mortgage company. Other paperwork has just been lost in the shuffle.²

Why weren’t the mortgage notes assigned to the MBS holders when they were first sold? Apparently because the investors aren’t even matched up with specific properties until after default. Here is how the MBS scheme works: when the mortgages are first bundled by the banks, all of the subprime mortgages go into the same pool. The bundled mortgages are chopped into “securities” that are sold to many investors — banks, hedge funds, money market funds, pension funds — with different “tranches” or levels of risk. The first mortgages to default are then assigned to the high-risk “BBB-” tranche of investors. As defaults increase, later defaulting mortgages are assigned down the chain of risk to the supposedly more secure tranches.³ That means the investors get the mortgages only after the defendants breached the agreement to pay.

It also means the investors weren’t a party to the agreement when it was breached, making it hard to prove they were injured by the breach.

The investors have another problem: the delay in assigning particular mortgages to particular investors means there was no “true sale” of the security (the home) at the time of securitization. A true sale of the collateral is a legal requirement for forming a valid security (a secured interest in the property as opposed to simply a debt obligation backed by collateral). As a result, the investors may have trouble proving they have any interest in the property, secured or unsecured.⁴

The Dog-Ate-My-Note Defense

When the securitizing banks acting as trustees for the investors are unable to present written proof of ownership at a time that would entitle them to foreclose, they typically file what’s called a lost-note affidavit. April Charney is a Florida legal aid attorney well versed in these issues, having gotten foreclosure proceedings dismissed or postponed for 300 clients in the past year. In a February 2008 Bloomberg article, she was quoted as saying that about 80 percent of these cases involved lost-note affidavits. “Lost-note affidavits are pattern and practice in the industry,” she said. “They are not exceptions. They are the rule.“³

In the past, judges have let these foreclosures proceed; but in October 2007, an intrepid federal judge in Cleveland put a halt to the practice. U.S. District Court Judge Christopher Boyko ruled that Deutsche Bank had not filed the proper paperwork to establish its right to foreclose on fourteen homes it was suing to repossess.⁴ That started the ball rolling, and by February 2008, judges in at least five states had followed suit. In Los Angeles in January, U.S. Bankruptcy Judge Samuel L. Bufford issued a notice warning plaintiffs in foreclosure cases to bring the mortgage notes to court and not submit copies. In Ohio, where foreclosures were up by a reported 88 percent in 2007, Attorney General Marc Dann was reported to be challenging ownership of mortgage notes in forty foreclosure cases.⁵

Few defendants, however, are lucky enough to have advocates like Charney and Dann in their corner, and most defaulting debtors just let their homes go. A simple challenge can be filed to the complaint even without an attorney, and some subprime borrowers have successfully defended their own foreclosure actions; but retaining an attorney is strongly recommended. People representing themselves are often not taken seriously, and they are likely to miss local rule requirements. With that warning, here is some general information on challenging standing to foreclose:

Some states are judicial foreclosure states and some are non-judicial foreclosure states. In a judicial foreclosure state (meaning the matter is heard before a judge), if a promissory note or recorded assignment naming the plaintiff is not attached to the complaint, the defendant can file a response stating the plaintiff has failed to state a claim. This can be followed with a motion called a demurrer to the complaint. Different forms of demurrers can be found in legal form books in most law libraries. In essence the demurrer states that even if everything in the complaint were true, the complaint would lack substance because it fails to set out a copy of the note, and it should therefore be dismissed. Ordinarily there is no need to cite much in the way of statutes or case law other than the authority reciting the necessity of showing the note proving the plaintiff is entitled to relief.

In a non-judicial foreclosure state such as California, foreclosure is done by a trustee without a court hearing, so the procedure is a bit trickier; but standing to foreclose can still be challenged. If the homeowner has filed for bankruptcy, the proceedings are automatically stayed, requiring the lender to bring a motion for relief from stay before going forward. The debtor can then challenge the lender’s right to the security (the house) by demanding proof of a legal or equitable interest in it.⁶ A homeowner facing foreclosure can also get the matter before a court without filing for bankruptcy by filing a complaint and preliminary injunction staying the proceedings pending proof of standing to foreclose. A judge would then have to rule on the merits. A complaint for declaratory relief might also be brought against the trustee, seeking to have its rights declared invalid.⁷

An Equitable Settlement for Everyone

These defenses can help people who are about to lose their homes, but there is another class of victims in the sub-prime mortgage crisis: investors in MBS, including the pension funds and 401Ks on which many people depend for their retirement. If the trustees representing the investors cannot foreclose, the lucky debtors may be able to stay in their homes without paying. However, the hapless investors will be left holding the bag. If the investors manage to shift liability back to the banks, on the other hand, the banks could go down and take the economy with them. How can these tricky issues be resolved in a way that is equitable for all? That question will be addressed in a followup article. Stay tuned.

NOTES

1. Jerome a Paris, “Countdown to $200 Oil Meets Anglo Disease,” European Tribune (June 7, 2008).

2 “Contesting a Foreclosure Lawsuit: Who Owns the Mortgage?”, ForeclosureFish.com (April 22, 2008).

3. CNBC, “Subprime Derivatives,” youtube.com/watch?v=0YNyn1XGyWg (June 2007).

4 Vinod Kothari, “The True Sale Question,” vindkothari.com.

3. Bob Ivry, “Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish,” Bloomberg.com (February 22, 2008).

4. Judge Christopher A. Boyko, Opinion and Order, In re Foreclosure Cases, Case 1:07-cv-02282-CAB, U.S. District Court, Northern District of Ohio, Eastern Division, filed 10/31/2007.

5. B. Ivry, op. cit.; Jimmy Higgins, “Judge Boyko’s Snowball Starts Rolling Downhill,” Fire on the Mountain (blogspot) (February 26, 2008); Wendy Davis, “Finding It Hard to Be a Loan,” ABA Journal (March 2008).

6. “More Trouble for Mortgage Securitizers?”, http://bigpicture.typepad.com (December 9, 2007

7. Aaron Krowne, et al., “True Sale, False Securitizations,” iamfacingforeclosure.com (November)

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves and how we the people can get it back. Her websites are webofdebt.com and ellenbrown.com.

Ellen Brown is a frequent contributor to Global Research. Global Research Articles by Ellen Brown

Propaganda Alert: Muslim Terrorists May Be Trying To Sink the Dollar

Don’t waste your time, terrorists, the Bush Crime Syndicate is doing just fine without your help!

Source: Tzvi Ben Gedalyahu, Israel National News.

Mujahideen Muslim terrorists may be behind the sinking American dollar as part of a campaign to cripple the American economy, the Middle East Media Research Institute (MEMRI) reported. The media watch group, which specializes in tracking Arabic language websites, said that postings on websites the past two years reflect a move toward waging an economic war against the United States.

Mujahideen terrorist groups that operate in Afghanistan, Pakistan and other countries “have come to the conclusion that it is financial, rather than military, losses that will prompt the U.S. to change its policies in the Middle East and elsewhere,” according to MEMRI.

An article recently posted in Sada Al-Jihad (Echo of Jihad) magazine and posted on several Muslim websites, discusses the September 11, 2001 attacks on the U.S. as having influenced the decline in the dollar. It also cited the cost of the war in Iraq and Afghanistan as draining the American economy.

Another recent posting stated, “The dollar can expect two additional blows that will break its back… [namely] the announcement of the return of the [religious rule of the] Caliphate…” and the reinstatement of the gold standard in international monetary trade. It urged Mujahideen “to get rid of American dollars” before an “imminent” terrorist attack that “will put an end to the so-called United States of America and destroy its economy completely.”

MEMRI concluded, “Given that it is highly atypical for Al-Qaeda to give prior warning of its attacks, the message is probably an attempt to pressure Muslims to sell dollars, in order to generate pessimism in the dollar market and thus accelerate the drop in its value.”

American Disgrace: Many levees rarely inspected

Source: PERRY BEEMAN, The Des Moines Register.

Many Iowa levees are makeshift creations not built to federal specifications and are rarely inspected, state and federal officials acknowledged last week.

In fact, the state has no comprehensive levee-inspection program for an unknown number of levees — possibly hundreds — that haven’t been certified by the U.S. Army Corps of Engineers, said Richard Leopold, director of the Iowa Department of Natural Resources.

Search a database of Iowa levees

Instead, a single state staffer responds to complaints about levees overseen by 140 local agencies — but doesn’t check them.

The safety of levees was front and center as national coverage of record flooding in Iowa unfolded the past couple of weeks. In some cases — including in the Birdland Park area of Des Moines — levees broke. That levee was known to be weak, didn’t meet Corps standards, and sat 15 years after record flooding in 1993 without needed improvements.

In other instances, people in Mason City, Corning, Cedar Rapids, Keokuk and elsewhere nervously watched levees as waters rose. Some of the structures were topped, especially along the Mississippi River in southeastern Iowa.

Leopold and his department this year asked the Legislature for a $300,000 appropriation for dam and levee inspections, and other flood plain work. They got nothing.

“We don’t do a lot of proactive work on these things,” Leopold said. “We mostly respond to complaints, like when property owners are disputing the location of a new levee.”

Now, with Iowa awash in flood damage, Leopold plans to ask for more than $300,000 next session. He’s not sure he’ll get it.

“I’m going to be much more aggressive about this,” Leopold said. “We should be out there and have a plan for when these go down.”

The state also needs to develop a plan for flood plain management that might focus in part on moving structures out of flood plains, rather than simply on raising levees, Leopold added. One painful lesson learned by Iowans this month is that 100-year floods or 500-year floods can come along at any time.

“This will happen again, in a year, or 10 years, or 30 years,” Leopold said. “Putting all our money into levees — is it high enough? — it’s just a guessing game. When this is over, and the danger is past, we need to take a deep breath and look at the whole situation.”

Corps, local authorities conduct inspections

Officials in Minnesota and Missouri said their resources departments don’t inspect levees, either, leaving that work to the U.S. Army Corps of Engineers and local levee districts, as Iowa does.

Suzanne Jiwani of Minnesota’s flood plain office said that if a levee isn’t good enough to qualify for Army Corps inspections, it isn’t worth much.

“If it’s not in the Corps program, we don’t want to be giving people the idea it’s safe,” she said.

Kerry Cordray of the Missouri Department of Natural Resources said that state also leaves levee inspections to the Corps.

The U.S. Army Corps of Engineers inspects only levees that it designed and built, or that it has certified as meeting standards.

Corps spokesman Ron Fournier said some Iowa levees, typically built by farmers or local agencies after flooding in the 1960s, are rows of sandbags covered with dirt. Because they don’t meet Corps standards, they aren’t inspected regularly and don’t qualify for federal repair or replacement projects.

Four levees in Iowa were built in the 1890s. Nineteen others were built between 1900 and 1940. Eighteen date to the 1950s. Some of those were built by the Corps but are maintained by local agencies. Some were built by local agencies but have been certified by the Corps as meeting federal requirements for Corps inspections and repair work. Some were built locally and don’t meet Corps standards.

Only two listed in Corps records for the Rock Island District, which includes Iowa, were built in the 1990s or later.

The Rock Island District of the Corps inspects 106 levee systems covering 774 miles in Iowa, Illinois, Minnesota and Missouri.

Of those, 97 were inspected in 2007, and the remainder are Corps-built levees that are inspected continuously. The 106 levees qualify for federal project money.

The remaining 130 levees totaling 248 miles were constructed by a mishmash of local agencies, businesses and residents. They don’t meet specifications, are rarely inspected and don’t qualify for federal assistance. The makeshift levees are prone to damage from trees and rodents.

“They are all over the place,” Fournier said.

Local agencies check some levies; others aren’t monitored at all.

Although the Corps provided The Des Moines Register with a list of 236 levees, it would not identify exact levee locations or detail which levees have problems because of security concerns, Fournier said.

“Some have problems, and some don’t,” he said. “Their owners know if they are damaged, and that’s enough.”

Fournier said federal officials fear an incident similar to 1993, when levee protection was compromised by James Scott, an Illinois man sentenced to life in prison for removing sandbags from a levee. He is blamed for the flooding of 14,000 acres and the closing of a Mississippi River bridge.

Poor levees can be difficult to identify

But the floods of 2008 showed that the public isn’t always aware of which levees need improvement.

At least 19 levees in Iowa, Illinois and Missouri have failed this year.

Kevin Bauer, owner of Glass Professionals Inc. in Des Moines, fought back the Birdland Park area flood with two pumps June 14 before police told him to leave. Frustrated that the levee broke and that police were harassing him, he refused to leave and ended up in a squad car for a while.

“We could have stayed on top of it,” Bauer said at the time.

Bill Cappuccio, a veteran flood plain worker at the Iowa Department of Natural Resources, said no one knows exactly how many smaller levees dot Iowa. Many were installed by local drainage districts that aren’t actively managed anymore, he said.

The integrity of those levees is questionable, Cappuccio said: “Does anyone inspect them? I don’t know. I’ve seen farmers who monitor levees perfectly, and some who don’t.”

Fournier said a large study of the Upper Mississippi River flood-control system, still under way, left the Corps with this initial view: In many cases, it isn’t worth the money to raise Mississippi River levees. In other locations, particularly in heavily developed areas, it may be worth the spending.

The widespread floods this year may mean another full-fledged analysis of flood protection across the Upper Midwest, he said.

Fournier said most of the federally certified levees are in good enough condition to hold back water, or they wouldn’t have been accepted into the Corps program and made eligible for federal improvements. However, some need trees removed, or relatively minor repairs, to ensure they are strong in the long term.

Fournier said the Corps will check any levee that protects a public area if a public official or agency requests the inspection. It does not check levees that protect only private property, such as a manufacturing plant.

If an improvement is proposed, the Corps requires the public will get at least $1 of protection benefit for every $1 the federal government spends on flood controls. Many projects don’t clear that bar. The Corps will consider improvements even if only cornfields are protected.

Jack Riessen, a longtime DNR flood plain and water-quality worker, said state law gives the DNR the authority to approve levee projects and implies that the department should be checking the structures. The agency doesn’t, and apparently never has, he said.

“There should be an active levee protection program,” Riessen said. “It’s something that doesn’t get done. We don’t have an active levee inspection program.”

Scientist, Claiming Bias, Sues U.S. Over Revoked Clearance

Source: SEAN D. HAMILL, New York Times.

PITTSBURGH — An Egyptian-born nuclear physicist who worked in a government-financed laboratory here for 18 years filed a lawsuit on Thursday saying the Energy Department had revoked his security clearance because of his ethnicity, his Muslim faith and comments he made criticizing the war in Iraq.

The physicist, Abdel Moniem Ali el-Ganayni, 57, lost his job shortly after his clearance was revoked in May by Jeffrey F. Kupfer, the Department of Energy’s acting deputy secretary, who cited “national security” in refusing to reveal what led to the revocation.

“Our contention is that the reason the D.O.E. invoked national security here was to relieve themselves of the responsibility of having to tell us what’s going on,” said Witold Walczak, one of Dr. Ganayni’s lawyers and legal director of the American Civil Liberties Union of Pennsylvania.

Dr. Ganayni became a naturalized citizen in 1988, eight years after coming to Pittsburgh to get a master’s degree and a doctorate. His former employer, the Bettis Laboratory, has said it would rehire him if his clearance was restored.

In the lawsuit, Dr. Ganayni, who has been married to an American woman for 26 years, claims violation of his rights to free speech and religion and to equal protection and due process. He asks that he have a chance to contest the revocation of his security clearance before an impartial hearing officer.

In a statement on Thursday, the Energy Department said, “This is a personal security matter as to which the department has no public comment.”

Dr. Ganayni’s clearance was first suspended, and he was assigned to a lower-paying job, in October 2007, after an interview with an Energy Department agent and a security officer at the laboratory, which works on nuclear propulsion projects for the Navy.

He said that during that three-hour interview and a four-hour interview with the F.B.I. two weeks later, he was asked about his religious beliefs, money he has sent overseas and comments he made in 2006 at a local mosque criticizing the Iraq war. But he said he was never asked about any security breaches at his job as a senior scientist at Bettis.

“What I said about the Iraq war, many Americans have said, and many senators,” he said, “But when I said this, I became like a traitor. That’s not right.”

What the Second Amendment Really Means – And What the Supreme Court Really Means

Source: Gary Rea, Proud Political Junkie’s Gazette.

Today’s Supreme Court ruling on the Second Amendment – the first of its kind in our history – has been hailed in the corporate media as a “victory” for the Second Amendment and its defenders. It is anything but. In fact, it is a resounding defeat of our constitutionally gauranteed right to defend our lives and liberty from an increasingly despotic government.

When the founders wrote the Second Amendment, their intent was clear: in order that we, the people, may be able to ensure the future of our liberty, we must have the means to defend our most basic and fundamental of all rights: the right to life.

Much obfuscatory ado has been made about the language of the amendment being “confusing,” and to the majority of today’s dumbed down public, it probably is. However, for anyone with the ability to think critically, the language is clear enough. The main point of the amendment is stated quite clearly in its second clause, “…the right of the people to keep and bear arms shall not be infringed.” The preceding verbiage is really irrelevant to an understanding of what the amendment says.

One has only to consider that the Constitution was written, not to grant rights to the people and the states, nor to enumerate all of those rights, but to spell out the limitations of the government’s powers. It does so by clearly listing several existing rights that were recognized by the founders as necessary conditions of human life and that, among these is the right to keep and bear arms. Once one understands the purpose of the document, its “interpretation” is no mystery at all: the government cannot, under any circumstances, infringe upon the rights outlined and those left open to us by the Tenth Amendment.

By merely “considering” the Second Amendment and ruling on it, the Supreme Court has violated the very spirit, if not the exact letter of the Constitution, itself. The Constitution is the founding document of our nation, the only written guarantee we have of our freedom in the face of a corrupt and tyrannical government. For the Supreme Court to even assume that it has the power to revise, alter, or even reconsider what the Constitution says is, on its face, an act of high treason. By doing so, they have said, in effect, that the Constitution is null and void and that they will tell us what the law is.

The Supreme Court is not the law of the land – the Constitution is. It was intended to be followed to the letter, used as a guide by the court to determine whether any law or action is allowed or disallowed by the Constitution. That is the sole duty and responsibility of the Supreme Court and its own powers are also limited by the Constitution.

Having said all that, there is no way this “decision” – made in smoke filled corporate boardrooms, the White House and Congress and then handed down to the court as its instructions – is in any way a “victory” for the people. The actual language used by the court in rendering its opinion says that, while it acknowledges the people do have an individual right to own firearms, the court has added the terms, “within reasonable limitations.”

Let that sink in for a moment. What this really means is that, yes, you do have the right to own a gun, but the government will tell you under what conditions you can own and use it. It does nothing to strike down the existing plethora of gun control laws that have been accumulating on the books since 1933, and because it doesn’t, it also doesn’t really strike down the so-called D.C. handgun ban, as the media would have us believe. Think about it. If they have left the door open for further regulation, then the ban – being regulation, itself – does not “infringe” on your Second Amendment right, according to the Supreme Court’s twisted logic.

In other words, now that they have told us that further regulation of gun ownership is part of what the Second Amendment really means, then, by their interpretation, further regulation of any kind and to any extent or degree they choose to force upon us will be perfectly “constitutional.” After all, the Supreme Court has said so and who are we to question its infinite wisdom?

So, the end result of this devastating ruling is that, not only will our fundamental right to defend ourselves continue to be whittled away until it no longer is recognized at all, but so will all the other rights our constitution protects, now that the legal precedent has been set to allow the Supreme Court to dictate to us what the Constitution really means.

Five Stealth Pentagon Contractors Reaping Billions of Tax Dollars

Source: Nick Turse, TomDispatch.

At $34 billion, you’re already counting pretty high. After all, that’s Harvard’s endowment; it’s the amount of damage the triple hurricanes — Charley, Ivan, and Jeanne — inflicted in 2004; it’s what car crashes involving 15-to-17-year-old teenage drivers mean yearly in “medical expenses, lost work, property damage, quality of life loss and other related costs”; it’s the loans the nation’s largest, crippled, home lender, Countrywide Financial, holds for home-equity lines of credit and second liens; it’s Citigroup’s recent write-off, mainly for subprime exposure; it’s what New Jersey’s tourism industry is worth — and, according to the Center for Strategic and Budgetary Assessments, it’s the minimal figure for the Pentagon’s “black budget” for fiscal year 2009 — money for, among other things, “classified weapons purchases and development,” money for which the Pentagon will remain unaccountable because almost no Americans will have any way of knowing what it’s being spent for.

Now, imagine that, due to a little more Pentagon/Bush administration wizardry, even this black budget estimate is undoubtedly a low-ball figure. One reason is simple enough: The proposed $541 billion Pentagon 2009 budget doesn’t even include money for actual wars. George W. Bush’s wars are all paid for by “supplemental” bills like the $162 billion one Congress will soon pass — so the Department of Defense’s $34 billion black budget skips “war-related funding.” This means that even the overall figure for that budget remains darker than we might imagine (as in “black hole”). The Pentagon not only produces stealth planes, it is, in budgetary terms, a stealth operation. If honestly accounted, the actual Pentagon yearly budget, including all the “military-related” funds salted away elsewhere, is probably now more than $1 trillion a year.

There is, however, another stealth side to the Pentagon — the corporate side where a range of giant companies you’ve never heard of are gobbling up our tax dollars at phenomenal rates. Nick Turse, author of the single best account of how our lives are being militarized, our civilian economy Pentagonized, and the Pentagon privatized — I’m talking about The Complex: How the Military Invades Our Everyday Lives — now turns to the stealth corporate side of the Pentagon to give us a glimpse into the larger black hole into which our dollars pour. — Introduction by Tom Engelhardt, TomDispatch editor.

******

The top Pentagon contractors, like death and taxes, almost never change. In 2002, the massive arms dealers Lockheed Martin, Boeing, and Northrop Grumman ranked one, two, and three among Department of Defense contractors, taking in $17 billion, $16.6 billion, and $8.7 billion. Lockheed, Boeing, and Northrop Grumman did it again in 2003 ($21.9, $17.3, and $11.1 billion); 2004 ($20.7, $17.1, and $11.9 billion); 2005 ($19.4, $18.3, and $13.5 billion); 2006 ($26.6, $20.3, and $16.6 billion); and, not surprisingly, 2007 as well ($27.8, $22.5, and $14.6 billion). Other regulars receiving mega-tax-funded payouts in a similarly clockwork-like manner include defense giants General Dynamics, Raytheon, the British weapons maker BAE Systems, and former Halliburton subsidiary KBR, as well as BP, Shell, and other power players from the military-petroleum complex.

With the basic Pentagon budget now clocking in at roughly $541 billion per year — before “supplemental” war funding for Iraq, Afghanistan, and the President’s Global War on Terror, as well as national security spending by other agencies, are factored in — even Lockheed’s hefty $28 billion take is a small percentage of the massive total. Obviously, significant sums of money are headed to other companies. However, most of them, including some of the largest, are all but unknown even to Pentagon-watchers and antiwar critics with a good grasp of the military industrial complex.

Last year, in a piece headlined “Washington’s $8 Billion Shadow,” Vanity Fair published an exposé of one of the better known large stealth contractors, SAIC (Science Applications International Corporation). SAIC, however, is just one of tens of thousands of Pentagon contractors. Many of these firms receive only tens or hundreds of thousands of dollars from the Pentagon every year. Some take home millions, tens of millions, or even hundreds of millions of dollars.

Then there’s a select group that are masters of the universe in the ever-expanding military-corporate complex, regularly scoring more than a billion tax dollars a year from the Department of Defense. Unlike Lockheed, Boeing, and Northrop Grumman, however, most of these billion-dollar babies manage to fly beneath the radar of media (not to mention public) attention. If appearing at all, they generally do so innocuously in the business pages of newspapers. When it comes to their support for the Pentagon’s wars and occupations in Afghanistan and Iraq, they are, in media terms, missing in action.

So, who are some of these mystery defense contractors you’ve probably never heard of? Here are snapshot portraits, culled largely from their own corporate documents, of five of the Pentagon’s secret billion-dollar babies:

1. MacAndrews & Forbes Holdings Inc.

Total DoD dollars in 2007: $3,360,739,032

This is billionaire investor Ronald Perelman’s massive holding company. It has “interests in a diversified portfolio of public and private companies” that includes the cosmetics maker Revlon and Panavision (the folks who make the cameras that bring you TV shows like 24 and CSI). MacAndrews & Forbes might, at first blush, seem an unlikely defense contractor, but one of those privately owned companies it holds is AM General — the folks who make the military Humvee. Today, says the company, nearly 200,000 Humvees have been “built and delivered to the U.S. Armed Forces and more than 50 friendly overseas nations.” Humvees, however, are only part of the story.

AM General has also assisted Carnegie Mellon University researchers in developing robots for the Pentagon blue-skies outfit, the Defense Advanced Research Projects Agency’s “Grand Challenge,” an autonomous robot-vehicle competition. Last year, AM General and General Dynamics Land Systems, a subsidiary of mega-weapons maker General Dynamics, formed a joint venture “to compete for the U.S. Army and Marine Corps Joint Light Tactical Vehicle (JLTV) program.” AM General has even gone to war — dispatching its “field service representatives” and “maintenance technical representatives” to Iraq where they were embedded with U.S. troops.

As such, it’s hardly surprising that, earlier this year, the company received one of the Defense Logistics Agency’s Outstanding Readiness Support Awards. Nor should anyone be surprised to discover that a top MacAndrews & Forbes corporate honcho, Executive Vice Chairman and Chief Administrative Officer Barry F. Schwartz, contributed a total of at least $10,000 to Straight Talk America, the political action committee of presidential candidate John McCain, who famously said it would be “fine” with him if U.S. troops occupied Iraq for “maybe a hundred years” (if not “a thousand” or “a million”).

Perhaps hedging their bets just a bit, MacAndrews & Forbes is diversifying into an emerging complex-within-the-Complex: homeland security. Recently, AM General sold the Department of Homeland Security’s Border Patrol “more than 100 Hummer K-series trucks for use in border security operations.”

2. DRS Technologies, Inc.

Total DoD dollars in 2007: $1,791,321,140

Incorporated during the Vietnam War, DRS Technologies has long been “a leading supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide”; that is, they have been in the business of fielding products that enhance some of the DoD’s deadliest weaponry, including “DDG-51 Aegis destroyers, M1A2 Abrams Main Battle Tanks, M2A3 Bradley Fighting Vehicles, OH-58D Kiowa Warrior helicopters, AH-64 Apache helicopters, F/A-18E/F Super Hornet and F-16 Fighting Falcon jet fighters, F-15 Eagle tactical fighters… [and] Ohio, Los Angeles and Virginia class submarines.” They even have “contracts that support future military platforms, such as the DDG-1000 destroyer, CVN-78 next-generation aircraft carrier, Littoral Combat Ship and Future Combat System.”

In addition to 2007’s haul of Pentagon dollars, DRS Technologies has continued to clean up in 2008 for a range of projects, including: a $16.2 million Army contract for refrigeration units; $51 million in new orders from the Army for thermal weapon sights (part of a five-year, $2.3-billion deal inked in 2007); a $10.1 million contract to build more than 140 M989A1 Heavy Expanded Mobility Ammunition Trailers (to transport “numerous and extremely heavy Multiple Launch Rocket System pods, palletized or non-palletized conventional ammunition and fuel bladders”); and a $23 million deal “to provide engineering support, field service support and general depot repairs for the Mast Mounted Sights (MMS) on OH-58 Kiowa Warrior attack helicopters,” among many other contracts.

Fitch Ratings, an international credit rating agency, recently made a smart, if perhaps understated, point — one that actually fits all of these billion-dollar babies. DRS, it wrote, “has benefited from the conflicts in Iraq and Afghanistan…”

3. Harris Corporation

Total DoD dollars in 2007: $1,501,163,834

Harris is “an international communications and information technology company serving government, defense and commercial markets in more than 150 countries.” It has an annual revenue of more than $4 billion and an impressive roster of former military personnel and other military-corporate complex insiders on its payroll. Not only does Harris assist and do business with a number of the Pentagon’s largest contractors (like Lockheed Martin and BAE Systems), it is also an active participant in occupations abroad. On its website, the company boasts that “Harris technology has been used for a variety of commercial and defense applications, including the War in Iraq where the [Harris software] system provided detailed, 3-D representations of Baghdad and other key Iraqi cities.”

Last year, Harris signed multiple deals with the military, including contracts to create a high-speed digital data link that transmits tactical video, radar, acoustic, and other sensor data from Navy MH-60R helicopters to their host ships. It also supplies the Navy with advanced computers that provide the “highly sophisticated moving maps and critical mission information via cockpit displays” used by flight crews.

In the first six months of this year, Harris has continued its hard work for the Complex. In January, the company was “selected by the U.S. Air Force for the Network and Space Operations and Maintenance (NSOM) program” for “a base contract and six options that bring the potential overall value to $410 million over six-and-a-half-years” to provide “operations and maintenance support to the 50th Space Wing’s Air Force Satellite Control Network at locations around the world.”

In May, the company was “awarded a three-year, $20 million contract by [top 10 Pentagon contractor] L3 Communications to provide products and services for a next-generation Tactical Video Capture System (TVCS)” — a system that integrates real time video streams to enhance tactical training exercises — “that will support training at various U.S. Marine Corps locations across the U.S. and abroad.” That same month, Harris was also “awarded a potential five-year, $85 million Indefinite Delivery/Indefinite Quantity (IDIQ) contract from the U.S. Navy for multiband satellite communications terminals that will provide advanced communications for aircraft carriers and other large deck ships.”

In addition, Harris is now hard at work in the Homeland. Not only did the company pick up more than $3 million from the Department of Homeland Security last year, but national security expert Tim Shorrock, in a 2007 CorpWatch article, “Domestic Spying, Inc.,” specifically noted that Harris and fellow intelligence industry contractors “stand to profit from th[e] unprecedented expansion of America’s domestic intelligence system.”

4. Navistar Defense

Total DoD dollars in 2007: $1,166,805,361

Still listed in Pentagon documents under its old name, International Military and Government, LLC, Navistar is the military subsidiary of Navistar International Corporation — “a holding company whose individual units provide integrated and best-in-class transportation solutions.” While the company has served the U.S. military since World War I, it’s known, if at all, by the public for making some of the Mine Resistant Ambush Protected (MRAP) vehicles designed to thwart Iraqi roadside bombs. As of April 2008, the U.S. military had “ordered 5,214 total production MaxxPro MRAP vehicles” from Navistar and, that same month, the company was awarded “a contract valued at more than $261 million… for engineering upgrades to the armor used on International MaxxPro MRAP vehicles.”

But Navistar makes more than MRAPs. Just last month, the company signed a “multi-year contract valued at nearly $1.3 billion” with the U.S. Army “to provide Medium Tactical Vehicles and spare parts to the Afghanistan National Police, Afghan National Army, and the Iraqi Ministry of Defense.” This followed a 2005 multi-year Army contract, worth $430 million, “for more than 2,900 vehicles and spare parts.”

Quite obviously, the company is significantly, profitably, and proudly involved in the occupations of Iraq and Afghanistan. As Tom Feifar, the Global Defense and Export general manager for Navistar Parts, put it late last year, “It’s an honor to be a part of the effort to support our troops.”

5. Evergreen International Airlines

Total DoD dollars in 2007: $1,105,610,723

A privately held global aviation services company, it has subsidiaries in related industries such as helicopter aviation (Evergreen Helicopters, Inc.), as well as a few unrelated efforts like producing “agricultural, nursery and wine products” (Evergreen Agricultural Enterprises, Inc.). Evergreen has been on the Pentagon’s payroll for a long time. Back in 2004, Ed Connolly, the executive vice president of Evergreen International Airlines, stated, “Evergreen has flown continuously for the [U.S. Air Force] Air Mobility Command since 1975 and is proud to continue its long standing history of supporting the U.S. Armed Forces global missions with quality and reliable services.”

Not surprisingly, Evergreen has been intimately involved in the occupation of Iraq. In fact, in 2004, the company received “approximately 200 awards for its support of international airlift services during the Iraq war” from the Air Force’s Air Mobility Command. An Air Force general even handed out these medals and certificates of achievement to Evergreen’s employees.

In Amnesty International’s 2006 report, “Below the Radar: Secret Flights to Torture and ‘Disappearance,’” the human rights organization noted that Evergreen was one of only a handful of private companies with current permits to land at U.S. military bases worldwide. That same year, the company even airlifted FOX News personality Bill O’Reilly and his TV show crew to Kuwait and Iraq to meet and greet troops, sign books and pictures, and hand out trinkets. And just last year the company was part of a consortium, including such high profile commercial carriers as American, Delta, and United Airlines that the Pentagon awarded a “$1,031,154,403 firm fixed-price contract for international airlift services… [that] is expected to be completed September 2008.”

Under the Radar

All told, these five stealth corporations from the military-corporate complex received more than $8.9 billion in taxpayer dollars in 2007. To put this into perspective, that sum is almost $2 billion more than the Bush administration’s proposed 2009 budget for the Environmental Protection Agency. Put another way, it’s about nine times what one-sixth of the world’s population spent on food last year.

Tens of thousands of defense contractors — from well-known “civilian” corporations (like Coca-Cola, Kraft, and Dell) to tiny companies — have fattened up on the Pentagon and its wars. Most of the time, large or small, they fly under the radar and are seldom identified as defense contractors at all. So it’s hardly surprising that firms like Harris and Evergreen, without name recognition outside their own worlds, can take in billions in taxpayer dollars without notice or comment in our increasingly militarized civilian economy.

When the history of the Iraq War is finally written, chances are that these five billion-dollar babies, and most of the other defense contractors involved in making the U.S. occupation possible, will be left out. Until we begin coming to grips with the role of such corporations in creating the material basis for an imperial foreign policy, we’ll never be able to grasp fully how the Pentagon works and why we so regularly make war in, and carry out occupations of, distant lands.

Media, Authorities Hype “Blonde Haired Terrorist” Threat

Another attempt by the PTB to distract people from seeing that the government is the biggest terrorist threat.

Source: Steve Watson, Infowars.net.

Following in the footsteps of Fox News, and almost word for word repeating unsubstantiated claims by the head of the CIA, ABC News ran a piece earlier this week alleging that white westerners are being trained in Al Qaeda terror camps in Pakistan with the intention of carrying out attacks in Europe and the USA.

The ABC report appeared on World News With Charles Gibson this past Monday. Gibson stated:

“Intelligence officials say it is their number one concern. Caucasians from a European country who have graduated from an al Qaeda training camp. Such potential terrorists would be dressed in western clothing, drawing little notice as they board a plane bound for the US, coming to launch an attack. There’s no indication such an attack is imminent, but this scenario is of great concern to experts in and out of the government.”

In addition, an article from the London Telegraph today relates that police in Yorkshire have identified a 12 year old blonde haired schoolboy as an Al Qaeda extremist after he sent links to beheading videos posted on the internet to his classmates.

The boy was reported to police by his school, who also indicated that he had an “unnatural interest in guns and weapons”.

Clearly the child is a hardcore terrorist.

Police revealed that they are monitoring hundreds of children in a new anti-terrorism scheme which is designed to “target al-Qaeda inspired youths”.

As we have documented, the blue eyed blonde haired Al-Qaeda line is a familiar talking point that has been pushed on Fox News and within other Neo-Con circles in an attempt to turn the anti-terror apparatus around to target dissidents, protesters and the American people in general.

The origin of the concept was based on a comment by a single MI5 source that was subsequently picked up in a Scotsman article back in January, which claimed that Al-Qaeda have recruited 1,500 white Britons to carry out attacks in the UK.

Since that time the corporate media has increasingly focused on the idea and returned to the story again and again.

This hype culminated in a March announcement by CIA boss Michael Hayden that Al-Qaeda is training new fighters that “look western” and could easily cross U.S. borders.

“They are bringing operatives into that region for training — operatives that wouldn’t attract your attention if they were going through the customs line at Dulles (airport outside Washington) with you when you were coming back from overseas,” Hayden told NBC’s Meet The Press.

“(They) look western (and) would be able to come into this country without attracting the kinds of attention that others might,” he added, with Reuters forced to point out that Hayden offered nothing to substantiate his claim.

In addition, the concept was even debated earlier this month by elitists at the secretive 2008 Bilderberg meeting.

Sources inside the meeting leaked details of elitist talking points which included the need to highlight a new phenomenon of terrorist groups, recruits and sympathizers identified as blonde haired, blue eyed westerners.

“Under the heading of resisting terrorism there were points made about how the terrorist organizations are recruiting people who do not look like terrorists – blonde, blue eyed boys – they’re searching hard for those types to become the new mad bombers,” reported veteran Bilderberg sleuth Jim Tucker.

NAFTA, “Stemmers,” and the Dumbing Down of the Masses

Source: Rand Clifford, Cyrano’s Journal.

“Simply one of the many biocidal glories of NAFTA…not long after American companies started plopping their most toxic operations just across the border to capitalize on such as lax Mexican environmental laws, a shocking spike in the number of babies born without a brain (anencephalic) became a legacy of the massive industrial pollution.”

Bodies of evidence by the millions make the dumbing-down of Americans the most successful federal program of all time…. Not that a great challenge has been surmounted, nor much of a fight put up, nor any bounds of day-to-day comfort grossly exceeded; insidious is the motif. With shrewd play on human emotion—especially and always fear—people can be manipulated into consistently acting against their best interests, for the best interests of money-hung manipulators. By and large, the dumbed-down believe outrageous lies that defy all evidence if the lies are packaged and repeated appropriately. The official story of 9/11 for example, or its diabolical spawn, the war on terror—would these have any chance at all in a nation of alert and thoughtful people?

America propaganda…into the bouillabaisse of lies, stir in well-crafted bogeymen, along with heaping portions of distraction, envy, selfishness—and double-up on aversion to being different (who wants to be “the turd in the punch bowl” by controverting what we are officially supposed to believe?) In such a context, the term stemmer transcends sheer comic relief, into a realm of sobering relevance threatening to become terminal.

A man called Whizzer in the novel CASTLING, first published in 1995, identifies stemmers as a blight metastasizing among the American people under careful nurture at highest levels of government. A self-described Professor of Social Science, Whizzer deliciously merges charisma with science, employing experiments in human behavior to prove his theories.

Many people keen to America’s profound intelligence deficit cling to solid theories of a chemical dumbing-down…from fluoridation of public water supplies, to aerial spraying (chemtrails), to ubiquitous bisphenol-A plastics, to heavy metal contamination, to the enormous prevalence in our foods of neurotoxins such as MSG (in its many nefarious manifestations), and aspartame, on and on…. But, Whizzer’s extensive research supports his theory of atrophy…the simple, “use it—or lose it”. His theory of stemmers:

“It all has to do with how much of your brain is functioning,” he insists. “Scientific evidence is very clear that about all you really need to survive is a brain stem…your reptile brain.”

Whizzer’s research into stemmers grew from babies born without a brain down along the Rio Grande, such as in Brownsville, Texas. Simply one of the many biocidal glories of NAFTA…not long after American companies started plopping their most toxic operations just across the border to capitalize on such as lax Mexican environmental laws, a shocking spike in the number of babies born without a brain (anencephalic) became a legacy of the massive industrial pollution. Some of the babies born with only a brain stem are still able to live indefinitely with proper care. Enter Whizzer’s trademark comic relief: “But then again,” he says, “maybe nature’s just saying ‘Hey, you wouldn’t use the thing anyway. You’d be better off not lugging around all that waterlogged tissue.’ Yep, looks to me like the hand of evolution at work. Maybe we’re seeing the emergence of a new subspecies. Homo Sapiens Americanus Sans Cerebrum.” Note: Whizzer’s penchant for humor never fouls his fundamental science; his strict adherence to the scientific method puts to shame anything we now must categorize as “Bush science”, or, The Official Stuff. (Please see: Only One kind of science http://www.starchiefpress.com/articles/article05.html).

At a huge kegger wrapping up an annual tournament involving American and Canadian softball teams, Whizzer delivers a monologue regarding stemmers that captivates the crowd (he also uses “The Party” to run a key experiment to expose major differences in “gut-reaction” aggression between Canadians, and Americans; except for the border, these people are virtual neighbors).

Basics of Whizzer’s stemmer theory, in his own words: “The Rio Grande is a sewer and toxic cauldron. But that’s not the point. The point is a lot of babies born nearby have only a brain stem, but they can survive, sometimes for years and years…. Yeah, way way back, millions of years before they invented Canadian bacon or 4X4s, our ancestors had little more than a brain stem. The reptile brain. Over the years, cerebral cortex grew on top of the stem ‘cause they started puttin’ together a lot of abstract thoughts, and figuring out how to make life less of a bugger…how to get a little comfort. They worked hell outa those brains and like a muscle the brains kept growing and growing…. And that’s why now we lug around these big bone casings we call skulls—to protect all that brain mass we inherited. Well, down at the heart of all that grey matter lies the ol’ brain stem—all anyone really needs to survive. With it you can still eat, drink, sleep, reproduce, and fight…which brings us to my theory…. The human brain has stopped evolving. The human brain is currently devolving back toward stemhood, and fast. Proliferation of consumerism, of gadgets and celebrities, spectator sports and lottery, television, mega-religion, fast food, smart bombs, drive-by violence, main stream propaganda and the coolness of being stupid, just to name a few—they’re causing the bulk of Americans to slough their brains. Who needs all that gray matter? Around here we call those obviously running on little or no more than brain stem…we call them stemmers. Basically, they’re lizards in sheep’s clothing….”

In Part II: Stemmers, and the future of The American Experiment. Bilderberg, The Council On Foreign Relations, The Trilateral Commission…with the Nation so poised for martial law to usher in the New World Order, is there even time to identify America’s intellectual nadir for public evaluation of solutions, or will “My Pet Goat” herald our oblivion after all?

Rand Clifford is a writer living in Spokane, Washington, with his wife Mary Ann, and their Chesapeake Bay retriever, Mink. Rand’s novels CASTLING, TIMING, VOICES OF VIRES, and PRIEST LAKE CATHEDRAL are published by StarChief Press: http://www.starchiefpress.com

Five Myths About the New Wiretapping Law: Why it’s a lot worse than you think.

Source: Patrick Radden Keefe, Slate Magazine.

Sometime today, the Senate is likely to approve the most comprehensive overhaul of American surveillance law since the Watergate era. Unless you’re a government lawyer, a legal scholar, a masochist, or an insomniac, chances are you haven’t read the 114-page bill. Don’t beat yourself up: Neither have most of the 293 House members who voted for it last week. Ditto the mainstream press, who seem to have relied chiefly on summaries provided by the same lawmakers who hadn’t read it.

To be fair, wiretapping is so classified, and the language of the bill so opaque, that no one without a “top secret” clearance can say with any authority just how much surveillance the proposal will authorize the government to do. (The best assessment yet comes from former Justice Department official David Kris, who deems the legislation “so intricate” that it risks confusing even “the government officials who must apply it.”)

Out of the echo chamber of ignorance and self-serving political cant, a number of myths have begun to emerge. We may never know for sure everything that this new legislation entails. But here are a few things that it most certainly doesn’t.

Myth No. 1: This bill is a compromise.

The House bill “is the result of a compromise,” one of its architects, Steny Hoyer, D-Md., maintained the other day. But in truth, Hoyer and his colleagues gave the White House most of what it asked for, dramatically expanding the government’s surveillance capabilities without demanding any serious concessions in exchange. Sen. Russ Feingold, D-Wis., calls the deal “a capitulation,” and he’s right. Why else would the White House express its approval so quickly, after a full year in which President Bush petulantly vowed not to sign any legislation that obliged him to concede too much? Sen. Kit Bond, R-Mo., offered an honest appraisal: “I think the White House got a better deal than even they had hoped.”

Myth No. 2: We need the bill to intercept our enemies abroad.

One frequent refrain in favor of the new legislation is that without it, America’s intelligence capabilities will dry up, leaving the country vulnerable to attack. The National Security Agency wants to intercept communications that pass through routers in the United States, even when both parties to the communication are abroad. The administration has argued that the NSA should not have to obtain a court order to intercept those communications. Seems reasonable, right?

Of course it’s reasonable. So reasonable, in fact, that House Democrats proposed to fix the problem a year ago. They were rebuffed. Why? Because their plan contained too much judicial oversight. (They ended up folding, just as they have this time around.) So when people say that this legislation is all about exempting foreign-to-foreign communications that happen to pass through the United States from the warrant requirement, don’t buy it.

You see, the new law goes a lot further, basically doing away with warrants altogether in the domestic-to-international context. Under the proposal, the NSA can engage in what David Kris calls “vacuum cleaner surveillance” of phone calls and e-mails entering and leaving the United States through our nation’s telecom switches. Provided that the “target” of the surveillance is reasonably believed to be abroad, the NSA can intercept a massive volume of communications, which might, however incidentally, include yours. When authorities want to target purely domestic communications, they still have to apply for a warrant from the FISA court (albeit only after a weeklong grace period of warrantless surveillance). But where communications between the United States and another country are concerned, the secret court is relegated to a vestigial role, consulted on the soundness of the “targeting procedures,” but not on the legitimacy of the targets themselves.

This is a huge departure from FISA. As Glenn Greenwald argues in Salon, the underlying suggestion of the new proposal is “not that the FISA law is obsolete, but rather, that the key instrument imposed by the Founders to preserve basic liberty—warrants—is something that we must now abolish.”

Myth No. 3: The courts will still review the telecom cases.

Perhaps most controversially, the bill effectively pardons the telecom giants that assisted the Bush administration in the warrantless wiretapping program. They will now be shielded from dozens of civil lawsuits brought against them after their involvement was exposed. House Democrats insist that the telecoms are not automatically getting off the hook. Instead, the companies must go before a federal judge. But here’s the catch: For the suits against them to be “promptly dismissed,” they must demonstrate to the judge not that what they did was legal but only that the White House told them to do it.

This is another bit of face-saving window dressing, and its essence is best captured in a breathtaking remark from Sen. Bond: “I’m not here to say that the government is always right. But when the government tells you to do something, I’m sure you would all agree … that is something you need to do.” That more or less sums it up—one part Nuremberg defense, the other part Nixon.

Myth No. 4: The Democrats must fold because of the November election.

It’s no secret that congressional Democrats wanted to resolve the FISA debate before the August convention in order to avoid the perennial charge that they’re softies. After the House vote last week, Barack Obama issued a statement backing off his earlier tough stance on telecom immunity. The calculus seemed clear: McCain had just reversed his own position on illegal wiretapping and was spoiling for a fight, arguing that “House Democrats, the ACLU, and the trial lawyers have held up legislation to modernize our nation’s terrorist surveillance laws.” You can’t stand with the trial lawyers and the ACLU if you want to win a general election.

But does it really make sense to stand with AT&T and George W. Bush instead? As the Anonymous Liberal blogger pointed out, you could hardly ask for a more disreputable opposing team than a president with historic-low popularity and a bunch of corporate fat cats. And by reneging on his earlier position, Obama put himself in a box: If he lets the bill sail through the Senate, he will alienate his base. But if he attempts a filibuster or an amendment now, he will appear to be pandering to the objections of Moveon.org and other groups. It would have made more sense for the party leadership and the nominee to stick to their guns.

Myth No. 5: The law will be the “exclusive means” for surveillance.

The Democrats’ most pathetic bit of self-deluded posturing involves the inclusion of a clause suggesting that the new law represents the “exclusive means” by which “electronic surveillance and interception of certain communications may be conducted.” According to House Speaker Nancy Pelosi, D-Calif., this means “the law is the exclusive authority and not the whim of the president.” But, then, FISA always said that it was the “exclusive means.” And in 2001, pretty much on a whim, the president set it aside. So for those of you keeping score back home, the Democratic leadership is patting itself on the back for including in the new law a provision that was already in the old law—and which the Bush White House chose to ignore.

Here, then, is the bitter joke of the new legislation: From 2001 to 2007, the NSA engaged in a secret program that was a straightforward violation of America’s wiretapping laws. Since the program was revealed, the administration has succeeded in preventing the judiciary from making a definitive declaration that the wiretapping was a crime. Suits against the government get dismissed on state-secrets grounds, because while the program may have been illegal, it was also so highly classified that its legality can never be litigated in open court. And now suits against the telecoms will by dismissed en masse as well. Meanwhile, the new law moves the goal posts, taking illegal things the administration was doing and making them legal.

Whatever Hoyer and Pelosi—and even Obama—say, this amounts to a retroactive blessing of the illegal program, and historically it means that the country will probably be deprived of any rigorous assessment of what precisely the administration did between 2001 and 2007. No judge will have an opportunity to call the president’s willful violation of a federal statute a crime, and no landmark ruling by the courts can serve as a warning for future generations about government excesses in dangerous times. What’s more, because the proposal so completely plays into the Bush conception of executive power, it renders meaningless any of its own provisions. After all, if the main lesson of the wiretapping scandal is that we need more surveillance power for the government, what is to stop President Bush—or President Obama or President McCain—from one day choosing to set this new law aside, too? “How will we be judged?” Sen. Chris Dodd, D-Conn., asked in a stirring speech deploring the legislation yesterday. “The technical argument obscures the defining question: the rule of law, or the rule of men?”

Seizing Laptops and Cameras Without Cause

More hassles for the average person—get used to being treated like cattle. As for the terrorists? Yeah, they are so going to airports with their computers full of sensitive information. Riiiiight.

Source: Alex Kingsbury, U.S. News & World Report.

Returning from a brief vacation to Germany in February, Bill Hogan was selected for additional screening by customs officials at Dulles International Airport outside Washington, D.C. Agents searched Hogan’s luggage and then popped an unexpected question: Was he carrying any digital media cards or drives in his pockets? “Then they told me that they were impounding my laptop,” says Hogan, a freelance investigative reporter whose recent stories have ranged from the origins of the Iraq war to the impact of money in presidential politics.Shaken by the encounter, Hogan says he left the airport and examined his bags, finding that the agents had also removed and inspected the memory card from his digital camera. “It was fortunate that I didn’t use that machine for work or I would have had to call up all my sources and tell them that the government had just seized their information,” he said. When customs offered to return the machine nearly two weeks later, Hogan told them to ship it to his lawyer.

The extent of the program to confiscate electronics at customs points is unclear. A hearing Wednesday before the Senate Committee on the Judiciary’s Subcommittee on the Constitution hopes to learn more about the extent of the program and safeguards to traveler’s privacy. Lawsuits have also been filed, challenging how the program selects travelers for inspection. Citing those lawsuits, Customs and Border Protection, a division of the Department of Homeland Security, refuses to say exactly how common the practice is, how many computers, portable storage drives, and BlackBerries have been inspected and confiscated, or what happens to the devices once they are seized. Congressional investigators and plaintiffs involved in lawsuits believe that digital copies—so-called “mirror images” of drives—are sometimes made of materials after they are seized by customs.

A ruling this year by the 9th Circuit Court of Appeals found that DHS does indeed have the authority to search electronic devices without suspicion in the same way that it would inspect a briefcase. The lawsuit that prompted the ruling was the result of more than 20 cases, most of which involved laptops, cellphones, or other electronics seized at airports. In those cases, nearly all of the individuals were of Muslim, Middle Eastern, or South Asian background.

Travelers who have their computers seized face real headaches. “It immediately deprives an executive or company of the very data—and revenue—a business trip was intended to create,” says Susan Gurley, head of the Association of Corporate Travel Executives, which is asking DHS for greater transparency and oversight to protect copied data. “As a businessperson returning to the U.S., you may find yourself effectively locked out of your electronic office indefinitely.” While Hogan had his computer returned after only a few days, others say they have had theirs held for months at a time. As a result, some companies have instituted policies that require employees to travel with clean machines: free of corporate data.

The security value of the program is unclear, critics say, while the threats to business and privacy are substantial. If drives are being copied, customs officials are potentially duplicating corporate secrets, legal records, financial data, medical files, and personal E-mails and photographs as well as stored passwords for accounts from Netflix to Bank of America. DHS contends that travelers’ computers can also contain child pornography, intellectual property offenses, or terrorist secrets.

It makes practical sense to X-ray the contents of checked and carry-on luggage, which could pose an immediate danger to airplanes and their passengers. “Generally speaking, customs officials do not go through briefcases to review and copy paper business records or personal diaries, which is apparently what they are now doing now in digital form?these PDA’s don’t have bombs in them,” says Marc Rotenberg, executive director of the Electronic Privacy Information Center. More troubling is what could happen if other countries follow the lead of the United States. Imagine, for instance, if China or Russia began a program to seize and duplicate the contents of traveler’s laptops. “We wouldn’t be in a position to strongly object to that type of behavior,” Rotenberg says. Indeed, visitors to the Beijing Olympic Games have been officially advised by U.S. officials that their laptops may be targeted for duplication or bugging by Chinese government spies hoping to steal business and trade secrets.