A Real Threat - ISDS

Ron Forthofer

The corporate controlled media have hyped the threat from IS (ISIL, ISIS), the self-proclaimed Islamic State. IS has committed horribly brutal acts in part of the Middle East. Despite all the media attention, it is relevant to note the US media didn't mention that IS has come nowhere close to the level of killing and destruction that the US did in Iraq. Regardless, there is an urgent need for a true diplomatic effort to stop further IS crimes.

Despite being a small regional group with a relatively limited goal -- the intent to restore an Islamic caliphate in the Middle East -- the corporate media have managed to scare many Americans about IS being a real threat here.

Perhaps a 1957 statement from General Douglas MacArthur provides a clue about the media hype (propaganda) over IS. "Our swollen budgets constantly have been misrepresented to the public. Our government has kept us in a perpetual state of fear — kept us in a continuous stampede of patriotic fervor — with the cry of grave national emergency. Always there has been some terrible evil at home or some monstrous foreign power that was going to gobble us up if we did not blindly rally behind it by furnishing the exorbitant funds demanded. Yet, in retrospect, these disasters seem never to have happened, seem never to have been quite real."

Contrast the media hype about IS with the lack of coverage of ISDS, a real and far greater threat to Americans and to people all around the world. Among other things, ISDS threatens democracy, national sovereignty, financial stability, public health as well as the availability of clean air and water and good paying jobs.

ISDS is the Investor-State Dispute Settlement process that is part of recent so-called trade agreements. The zealots pushing ISDS are those who worship Mammon and who seemingly are willing to sacrifice everything else on the altar of short-term greed. Specifically, ISDS is being pushed by Wall Street, transnational corporations and rich investors.

Under ISDS, if a foreign corporation/investor thinks that a government's policy reduces its profits or expected future profits, ISDS allows the foreign investor to evade the usual judicial system. Instead, the investor can bring a nation before a hearing of a tribunal of trade lawyers. These lawyers may represent an investor in one case and be an arbitrator in another case. Public interests, such as protection of public health, the environment, buy local programs, etc. take a back seat to commercial considerations in these deliberations. Laws passed by a democratic process can be overridden and national sovereignty is out the window.

If the investor wins, the government must either change the policy or pay what can turn out to be a very substantial fee. If the state wins, there is no cost to the investor. In addition, the ISDS is even more one-sided as the state has no corresponding right to bring an original claim against the foreign investor.

According to an article by Robin Broad in the Jan./Feb. Dollars & Sense issue, in 1964, 21 developing-country governments voted no on the establishment of the International Centre for Settlement of Investment Disputes (ICSID), a predecessor of ISDS, as a new part of the World Bank. All 19 of the Latin American countries attending the meeting voted no.

Felix Ruiz of Chile spoke on behalf of these 19 countries and said; "The new system that has been suggested would give the foreign investor, by virtue of the fact that he is a foreigner, the right to sue a sovereign state outside its national territory, dispensing with the courts of law. This provision is contrary to the accepted legal principles of our countries and, de facto, would confer a privilege on the foreign investor, placing the nationals of the country concerned in a position of inferiority."

Broad goes on to point out the irony that the ISDS process is in conflict with the World Trade Organization's requirement that foreign and domestic investors be treated the same. Broad also points out that if foreign investors believe they are making a risky investment, they could rely on foreign risk insurance. Broad adds that the corporations/investors also have recourse to the relevant domestic courts in a given country. Thus, there is little-to-no need for the ISDS process or the ICSID.

The National Conference on State Legislatures (NCSL) is another key group greatly concerned about ISDS. NCSL issued a statement that it will not support any trade agreement that includes the ISDS process.

One wonders why US negotiators would be pushing a process that threatens US sovereignty, the rights of our states and local governments to govern, and the public interest. Unfortunately, this sad situation reflects the power held by Wall Street, transnational corporations and other wealthy. In plain terms, the US campaign finance system is legalized bribery, and money plays a major role in what legislation is enacted. Nomi Prins' book "All the Presidents' Bankers" clearly demonstrates the influential role that bankers have held in US policy making for over a century.

These powerful actors now are using the US government as a tool to convince other governments to accept these deals that are about expanding the control of big banks and transnational corporations. These deals are a means to undermine legislation that regulate corporate behavior in the US and elsewhere. These schemes also reduce the number of good paying jobs in the US and spark a worldwide race to the bottom in terms of wages, increasing corporate profits even more. Welcome to the world of the bankers and corporate investor state!

Unsurprisingly, drafts of the Trans-Pacific Partnership scheme includes ISDS. Unfortunately both our senators and our representative are likely to vote in favor of TPP and ISDS unless they hear from us. It is up to us and others around the world to stop the TPP and ISD from wreaking havoc on the 12 nations involved in the negotiations.

Confidential Document: Soros's Plan For Ukraine

Eric Zuesse

A hacked document from the Ukrainian Government, in which George Soros, on 12 March 2015 (a month after the Hollande-Merkel Minsk II ceasefire agreement had been signed), advised Ukraine's President Petro Poroshenko how to re-arm and resume the war against the Donbass region in Ukraine's far east. (According to a Russian television report dated 14 April 2011, Soros had been financing the political careers of the people who have now become the leading politicians in Ukraine, since at least 2008.)

The newly revealed document (hacked by “Cyber Berkut,” a reliable source) opened by acknowledging that Ukraine's military had been twice defeated in their attempt to restore that region to Ukraine's control (here was the first defeat; and here was the second), and that, both times when a ceasefire was established, it “recognized the facts on the ground” instead of requiring Donbass forces to move back to the earlier war-front demarcation lines. (And here was the final result.)

In other words: Soros acknowledged that both of Ukraine's previous two invasions of Donbass had been defeated, and he laid out here his plan for a third invasion, yet to come, after the West will have restored Ukraine's military and taken stronger control over it.

His “Draft Non-Paper/v14,” which presumably was the 14th in a series of ongoing instructions to the Ukrainian Government — the Government that had been established by the U.S. coup in Kiev in February 2014 (and which he was proud to have helped bring about) — was titled, “A short and medium-term comprehensive strategy for the new Ukraine.” It defined “Short-term” as “The next three to five months,” and “Medium-term” as “The next three to five years.” (There was no “Long-term” in it.)

The document opened by acknowledging that there had been "twice converted a military victory to a cease-fire that recognized the facts on the ground,” and he wrote under the core assumption that the fighters who were defending Donbass were not locals who live there and who were protecting their families against attacks from the Ukrainian military, but instead Russian soldiers. He assumed that the people who are living there, and who are shooting down some of Ukraine's bombers, which were dropping bombs on the cities, and which Ukrainian Government forces in Donbass were firing rockets at schools and hospitals and apartment buildings and indiscriminately at residential neighborhoods, were not people who had lived there all their lives, but instead invading Russian soldiers; and Soros asserted that it was Russia's Vladimir Putin himself who “twice converted a military victory to a cease-fire that recognized the facts on the ground without depriving him of his first mover advantage.” By “first mover advantage,” Soros was referring to Putin as being the invader — the Ukrainian Governmen forces were merely responding to these invaders from Russia, he assumed; Soros started with the assumption that the people who actually live in that region, of what had formerly been part of Ukraine, don't count, and are not a factor in the war — that they were not fighting, if they even really existed. (They did and do exist. Here they are, telling their own stories, and showing their corpses, maimed, and destroyed homes, and explaining why they have taken up arms against the invading Ukrainian armed forces.)

Soros says: "It is in the collective self-interest of Ukraine's allies to enable the new Ukraine not only to survive but to prosper; and as long as they can agree on a way of providing adequate support without getting involved in a direct military conflict, they should be able to prevail against Putin's Russia.” In other words, boiled down, he was saying: “Let's you and him fight.” “Ukraine's allies” won't be the ones spilling blood there, he's telling Ukraine's President, whose forces “should be able to prevail against Putin's Russia.” The U.S. will just send weapons and trainers, to assist in the bloodshed, and the victory “against Putin's Russia” (not against the residents in Donbass, who don't even exist, for him).

Before the U.S. coup in Ukraine, the entire nation was at peace, and Crimea was peacefully part of Ukraine, and so was Donbass. (It was sort of like Iraq under Saddam Hussein had been, until George W. Bush invaded that, except Ukraine was a democracy before obama overthrew its Government and installed a racist fascist anti-Russian regime there.) But now that the U.S. had overthrown that democratic Ukrainian Government and installed its own regime (basically, selecting the new leader on 4 February 2014, 18 days before the coup), George Soros is telling them to go to war yet a third time against Russia (not that Ukraine ever actually was at war with Russia), using as the staging-area for America's proxy-war against Russia, Donbass, on Russia's very border, and perhaps also even Crimea (which is actually unlikely to be invaded by Ukraine, because Crimea immediately was taken over by Russian troops, in order to prevent the new U.S. regime in Kiev from grabbing Russia's main naval base, which since 1783 has been located in Crimea. Immediately after the coup, Putin recognized that Russia's naval base was endangered; and for Ukraine to invade Crimea would thus be for Ukraine to be really and directly at war against Russia itself, which is what Soros seems to want.)

Soros's document then went into a section titled “II. The Strategy.” This section made clear that the purpose of his war is regime-change in Russia. He said: "While it would be more desirable to have Russia as a partner than an enemy, that is impossible as long as Putin persists in his current policies.” In other words: Russia should be a “partner” but this means replacing Vladimir Putin with a leader whom Washington approves of, just as had earlier happened with Ukraine's former President, Viktor Yanukovych, whom Obama overthrew. (Yanukovych was just a stepping-stone in this plan to topple Putin.) Whereas America invaded Iraq to get rid of Saddam Hussein, Soros wants Ukrainians to get rid of Vladimir Putin, and this requires heavily arming Ukraine. Soros was giving instructions to this regime that he had proudly helped bring into power. But he pretended that doing this would economically benefit Ukraine.

Soros declared his goal to be: "a functioning democracy in Ukraine that manages to reform its economy even in the midst of Russian aggression,” and that the reason for this goal is that it's the way to "turn Putin's narrative into a lie that no amount of propaganda could cover up. More and more Russians would want to follow Ukraine's example.” In other words: Soros is saying that so many Russians will envy the new Ukraine that they'll rise up and overthrow Putin. (But, actually, at the very time that Soros was writing this, Ukraine's economy was already in free-fall with no light visible at the end of any realistic tunnel but only total economic collapse. Soros ignored that reality, which he almost certainly was aware of.)

Under the category “What Ukraine must deliver” within “the next three months” (which means by now, as this is written) are included: 

“1. Restore the fighting capacity of Ukraine without violating the Minsk agreement.” …

“7. Present an impressive case at a donors' and investors' conference in three months time with two months leeway.” (As if that would even be realistic in light of Ukraine's surviving now only by going ever-more-rapidly ever-deeper into debt to the IMF, EU and U.S., and with bankruptcy plans for Ukraine already being prepared.)

Under the category “What the allies must deliver” (in that same timeframe) are:

"1. Help restore the fighting capacity of the Ukrainian army without violating the Minsk Agreement.”

The rest of this section calls for tons of money from the EU to pay the military contractors and arms-merchants. He underlines the following: "This requires a political decision by Chancellor Merkel and President Hollande, as signatories of the Minsk Agreement, and the expenditure of considerable political capital to overcome legal hurdles and reach unanimity.” He expects Merkel and Hollande to finance the weapons for a third invasion of Donbass by Ukraine, which would actually violate the Minsk agreement that Merkel and Hollande had worked feverishly (and without America's participation) to achieve. He expects Merkel and Hollande to get in line behind the U.S.

The next section “The State of Play,” opens: "1. General Wesley Clark, Polish General Skrzypczak and a few specialists under the auspices of the Atlantic Council will advise President Poroshenko how to restore the fighting capacity of Ukraine without violating the Minsk agreement.” It then discusses the “National Reform Council (NRC)” which was recently formed in Kiev; and he says:

"The International Renaissance Foundation which is the Ukrainian branch of the Soros Foundations was the sole financial supporter of the NRC until now and it will be one of the main supporters of the PMO, which is in charge of financing the NRC and implementing various reform projects, from now on.”

So, Soros is telling the Ukrainian Government that his tax-exempt foundation will continue to fund them. Furthermore, he tells the Ukrainian Government whom the top three officials at the “PMO” (“Project Maintenance Office”) will be.  And, then, yet again, he underlines a passage: "There is a stark contrast between the deteriorating external reality and the continuing progress in internal reforms.”

He closes a sub-section on “Institutional reforms” by noting that: "The process has been slowed down by the insistence of the newly elected Rada [parliament] on proper procedures and total transparency.” He wants less “transparency” in the process toward “internal reforms” and “institutional reforms.” It must be “reforms” that are in the direction of less “transparency,” instead of more. That's how he used the term “reforms”: they must be away from “transparency.”

He then discusses the role of “The European Union,” and opens with:

"1. Since member states don't have adequate financial resources, a way has to be found to use the AAA credit of the European Union itself. The search has zeroed in on a well-established financial instrument, the Macro-Financial Assistance (MFA) facility. The MFA has an unusual feature: only 9% of the allotted funds are charged to the budget of the European Union; the EU borrows the rest from the market, using its AAA credit. This makes it very popular.”

In other words, just as Wall Street had done with Mortgage Backed Securities when George W. Bush was America's President, investors who trust AAA credit-ratings will be socked with the losses on Ukrainian bonds too late to do anything about their losses. The money will already have been spent, mainly on weapons.

His program closes with “A Winning Scenario,” which will be based on a “whatever it takes” commitment from the EU to fund Ukraine's Government until ultimate victory ("short of getting involved in direct military confrontation with Russia or violating the Minsk agreement”). In other words: the EU and its taxpayers, and the world's investors who trust the AAA credit-ratings, will fund the way to Ukraine's victory.

His “Winning Scenario” opens by saying, “1. Putin is likely to be impressed by a ‘whatever it takes' declaration.” And it closes by saying:

"4. At the same time, the allies will offer face-saving measures [to Russia] short of accepting the illegal annexation of Crimea and parts of eastern Ukraine. 

"5. Since military re-escalation is liable to run into military resistance from Ukraine and strong domestic opposition in Russia, Putin may well accept the face-saving measures. The tables will be turned and Ukraine would become an attractive investment destination.” (Presumably, this will happen by virtue of Ukraine's achieving AAA credit-rating.)

That's the end of Soros's document. It does not describe any — not a single one — of what it has referred to as "Medium-term: The next three to five years.” Nor does it even so much as mention the 2.5-year period between that and what he calls "Short-term: The next three to five months.” It's only a three-to-five-month plan. If this is to be the business-plan for his Ukrainian Government, it covers only the “Short-term: The next three to five months.” This means it's already actually almost over. Whatever investors are left from the faked Ukrainian bonds, and the “Institutional reforms” that have less “transparency” than Ukraine's parliament recommends, those investors are expected to eat the resulting losses. They are to be the Daddy Warbucks of the situation.

Because Soros, like his client Barack Obama, insists that Crimea's being Russian will never be recognized, even though Crimea was part of Russia from 1783 to 1954 and Crimeans were always opposed to the Soviet Government's transferring it to Ukraine in 1954, Soros's point numbered 4 just above, where it says “short of accepting the illegal annexation of Crimea,” is asserting, in effect, that the United States will insist upon continuation of Obama's sanctions against Russia, as being an essentially permanent condition. Soros is saying that one of the reasons Ukraine is being armed by the U.S. is in order to assist Ukraine in ultimately invading Crimea to retake it. But it's not going to happen. However, the threat of it happening is important to Soros.

Ukrainian President Petro Poroshenko thus felt free to say, on April 30th, “The war will end when Ukraine regains Donbass and Crimea,” and he repeated this promise on May 11th (though without “Crimea”), by his saying, “I have no doubt, we will free the [Donetsk] Airport, because it is our land.” He was strictly adhering to Soros's instructions there. However, on May 12th, U.S. Secretary of State John Kerry publicly warned Poroshenko against following through with that threat. But then Kerry's subordinate, Victoria Nuland, three days later, publicly contradicted her boss on the matter, and Kerry simply was silent about that; so, apparently, President Obama is siding with Nuland (and Soros) on this matter. It seems that the game-plan calls for permanent economic sanctions against Russia, until Putin falls or otherwise is replaced by someone whom Washington (or Soros) accepts (which will be never, unless and until Russia becomes almost a U.S. satellite like it was during the Gorbachev-Yeltsin era).

The Minsk II accords made no mention whatsoever of Crimea, but only of Donetsk and Luhansk, the two halves of Donbass; so, for Poroshenko to fulfill on his threat against Crimea would cause him to lose the support of Hollande, Merkel, and probably of the entire EU; it would leave Ukraine with only one remaining national patron, the U.S., which would then have to decide whether to go to war directly against Russia. NATO could not be a part to that war, because the NATO charter requires unanimity of all member-nations. So: obviously, Ukraine will never do any such thing. Ukraine won't invade Crimea. America's real focus is on continuation and intensification of the anti-Russia sanctions. If Ukraine invades Crimea, the EU will abandon those sanctions. So, Obama-Soros don't actually want Poroshenko to follow through with that threat. Nuland had contradicted Kerry on that probably because Obama became angry at Kerry's making policy; he was likely reasserting to Kerry that the President and only the President makes policy. Using Nuland to do that was then punishment of Kerry by Obama, for having overstepped into the President's prerogative on the matter. 

George Soros, as of 2 June 2015, has a net worth of $24.2 billion, according to Forbes. He is sometimes referred to as being, to America's Democratic Party, what Charles and David Koch are to the Republican Party, but there are differences in the ways that the respective billionaires funnel their money into poltical campaigns. Also, whereas the Kochs spend most of their political cash so as to cause people to disbelieve what 97%+ of climate scientists say about global warming, Soros spends most of his political money promoting pro-corporate Democrats of any type. Whereas the Kochs want to shove off onto the public the costs of pollution, etc., Soros wants to shove off onto the public the costs of governmental corruption per se. But in both instances, the benefits go to the billionaires; the costs go to the public. So: the two types of billionaires are actually quite similar, brothers-under-the-skin, as it were. 

Very few billionaires are in a different camp than those two: almost all want the broader society to eat the losses from their business activities. Among the few exceptions, who game neither the environment nor finance, are Tom Steyer, who has around a billion dollars, and Jeremy Grantham, who isn't even included in any list of billionaires but who has perhaps had a bigger impact than anyone else to fund scientists who research global warming. None of the major billionaires opposes in any concerted way exploitation both of the environment and of the government — it's one or the other, but most of them favor any type of exploitation. Perhaps that's essential in order for them to be (or stay) among the world's hundred or thousand wealthiest people. In other words: to be both anti-corruption and anti-pollution is to be not among the world's wealthiest people, not a “serious player” on the world-stage.

Anyway, this Soros document (and its background) helps to explain how international power actually functions, and how people (such as in Ukraine) become cannon-fodder at either the delivery-end or the reception-end of the “cannon.” It's just a way that business is transacted among major billionaires, so as to leave the losses with the masses. It's the way “the free market” naturally functions. It functions by weapons, and by wealth. That's the way to maximize the freedom of the extremely rich, against the lives, safety, and welfare, of everybody else. And the very rich know it, and practice it. This confidential document from Soros is a good example of it, in actual practice.

Poroshenko has his assignment: it's to take from the public their blood and money, and to transfer the profits to oligarchs such as Soros, Poroshenko, and other members of the anti-Russia coalition. It's a competition between the Western aristocracies versus Russia's aristocracy. Russia's response has been to join forces with the Chinese and other BRICS aristocracies.

As Obama told graduating West Point cadets on 28 May 2014: “Russia's aggression toward former Soviet states unnerves capitals in Europe, while China's economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us, and governments seek a greater say in global forums.” He was telling America's future military leaders that America is “the one indispensable nation” (which means that all other nations are “dispensable”) and that America's military are in service to block foreign aristocracies from “a greater say in global forums.” Only “the one indispensable nation” has the indispensable aristocracy. And West Pointers serve those people. Though they're paid by America's public, they actually work for America's aristocrats. They're guns-for-hire who are to serve America's aristocrats though they're paid by America's public. This is ‘democracy' in ‘the one indispensable nation.'

Soros, and Poroshenko, know all about it.

Saudi Arabia’s Yemen Strategy: Divide and Destroy

Michael Horton

“Donkey breeders and solar panel dealers are the only one’s making any money at the moment,” says Salim, a resident of Sana’a. Salim is eluding to the fact that most of Yemen, a country of 26 million, is without gasoline and electricity. “We are back to using donkeys to move supplies but I guess the solar panels are a step forward,” he says with a laugh.

While eleven weeks of airstrikes and a punitive naval blockade have laid waste to much of Yemen, most people remain resolute and what is a distinctly Yemeni sense of humor is intact. This is despite the fact that more than 2000 people have been killed, over half of which are civilians, and billions of dollars of infrastructure have been destroyed since the Saudi led “Operation Decisive Storm” began on March 25.

The World Health Organization estimates that 8.6 million Yemenis are now in urgent need of medical help as hospitals struggle to operate without medicines and without electricity. Oxfam estimates that two thirds of Yemen’s population of 26 million do not have access to clean drinking water. The streets of Yemen’s cities are choked with mountainous piles of trash due to the lack of fuel for garbage trucks. The severe conditions in Yemen could lead to a nationwide outbreak of disease.

The Saudis and their coalition partners—and this includes the US military which is providing intelligence and logistical support—have, in the space of eleven weeks, erased fifty years of progress in Yemen. Airstrikes have destroyed roads, bridges, universities, museums, historical sites, factories, and hundreds of homes and even entire villages. Yet, despite the destruction, many Yemenis are determined not to let their country become another Iraq, Syria, Libya, or Afghanistan, all of which have been on the receiving end of the disastrous interventionist foreign policies of the US and Saudi Arabia.

“Talking is the only way out of this quagmire,” explains a former Yemeni MP. “No one group in Yemen has the power to defeat the other. We have two choices: to go on fighting for the next decade and give the world another Syria, or talk. Our history favors the latter. But I don’t think our Saudi friends have any interest in letting us solve our own problems.”

There is some hope that Yemen and its people will learn from what has transpired in Syria, Libya, and Iraq and draw on their own rich traditions that favor conflict mediation and negotiated settlements. According to former UN Special Adviser on Yemen, Jamal Benomar, Yemen’s major factions—including both the Houthis and representatives from south Yemen—were near signing off on a power sharing agreement before Saudi led airstrikes brought the negotiations to an abrupt end.

The Zaidi Shi’a Houthis, who control much of northwest Yemen, were, before the start of Operation Decisive Storm, on relatively good terms with much of the leadership of Yemen’s various southern secessionist movements. However, partly as a result of the Saudi led aerial campaign, the Houthis went on the offensive in south Yemen, largely in order to prevent Saudi Arabia from installing and backing an alternative government in the southern port city of Aden.

The Houthis, whose membership is largely drawn from northern based tribes, are now locked in a deadly battle with southern militias who are mostly fighting for an independent south Yemen, not for the exiled government of President Hadi. Saudi Arabia’s war in Yemen has not only led to the wholesale destruction of much of Yemen’s already fragile physical and social infrastructure, it has also ignited a long simmering civil war between northern and southern based forces that neither side can win.

“The Saudis bait us like dogs, pitting one side against the other,” explains a former colonel who served in the army of the People’s Democratic Republic of Yemen (PDRY). “This has always been their game in Yemen: get us to fight one another so that we’re never a threat to them. So far it has worked. The last thing that they want is for us to negotiate and unite. ”

Saudi Arabia has a long history of playing all sides in Yemen. For much of the last fifty years the Saudis have maintained a largely covert program whereby leading tribal, military, and government figures in Yemen receive regular payments from the Saudi government in exchange for loyalty. While many of these men are drawn from northern Yemen, the Saudis have also, at times, supported southern based Marxist hardliners who opposed unification. However, up until the commencement of Operation Decisive Storm, Saudi policy in Yemen was largely covert and even careful. Now, with the change in leadership in the Kingdom, Saudi policy in Yemen is anything but covert or careful.

Rather than letting UN led negotiations continue, Saudi Arabia and its partners have opted for a policy whose only clear outcome looks to be the impoverishment and eventual destruction of an entire country. If the war in Yemen continues, the as yet unverified Iranian involvement with Yemen’s Houthi rebels may be the least of Saudi Arabia’s worries.

While Operation Decisive Storm has failed to defeat the Houthis or reinstall the exiled government of Yemeni President Hadi, it has allowed al-Qaeda in the Arabian Peninsula—and now the Islamic State—to rapidly expand the territory under their control. Saudi efforts in Yemen effectively neutralized the two forces fighting AQAP and IS: the Houthis and the US equipped and trained Yemeni counter-terrorism forces. While a resurgent AQAP and IS may be useful temporary proxies in Saudi Arabia’s war with the Houthis, both groups will—and in the past have—turn on the House of Saud.

In addition to indirectly enabling the expansion of AQAP and IS in Yemen, Saudi Arabia and its coalition partners are arming a host of disparate militias and tribal forces. The only prerequisite for receiving arms and cash is a pledge to fight the Houthis. A popular joke in Sana’a describes the latest get rich quick scheme: get a few of your friends together, claim you are the leader of an anti-Houthi militia, collect the money from Saudi Arabia, and promptly buy a qat farm in the countryside, far away from the falling bombs. Despite the dire situation, humor and hope persist.

“When the bombs stop falling, I think all sides in this conflict will return to the negotiating table,” says a long-serving Yemeni MP. “I think the Saudis know this. That’s why they’re still bombing us. They don’t want a negotiated settlement to this conflict. But we have a history of defying invaders and going our own way. I’m hopeful we’ll turn away from the abyss that we face.”

World Soccer Corruption, Africa’s ‘Illicit Financial Flows’ and Elite Silences

Patrick Bond

The last week has provided extraordinary examples of how corruption erodes the resources and morals of an entire continent – Africa – in part because villains in South Africa made alliances with wicked brothers in Switzerland, Latin America, the Caribbean and especially the United States. We now know more about offshore centers of both reactionary finance and corrupt-corporate soccer. It’s long overdue they are exposed to a spotlight, even if those pointing that light want to leave certain features in the shadows.

On May 21, Africa’s ‘illicit financial flows’ (IFF) looting was partially dissected by Nelson Mandela’s successor, Thabo Mbeki, in his urgent-sounding report to the African Union, Track it! Stop it! Get it! Mbeki’s bottom line: “Currently, Africa is estimated to be losing more than $50 billion annually in IFFs. But these estimates… often exclude some forms of IFFs that by nature are secret and cannot be properly estimated, such as proceeds of bribery and trafficking of drugs, people and firearms.” Or such as secret deals in minerals and oil; South Africa’s ruling party (under Mbeki’s leadership) made dodgy payments to shady characters in Nigeria, Texas and Saddam-era Iraq. Or tax giveaways by politicians; Mbeki’s 14 years as South Africa’s deputy president (1994-99) and president (1998-2008) witnessed the main corporate tax rate falling from 48% to 28%. Or exchange controls against capital outflows; Pretoria dropped its main exchange control – the financial rand – in 1995 and let the largest Johannesburg firms relocate to London in 1999, causing a massive increase in South Africa’s current account deficit due to ‘licit’ offshoring of profits. These are unmentionables in Mbeki’s report: some of last week’s revealing elite silences.

On May 27, the US Justice Department and FBI alleged that the Zurich-based world soccer mafia known as FIFA exudes “corruption that is rampant, systemic and deep-rooted.” Yet two days later, world soccer dictator Sepp Blatter was re-elected head of the notoriously corrupt Zurich institution FIFA, which runs the World Cup. “Why would I step down? That would mean I recognise that I did wrong.” But on June 2, he did indeed promise to step down within the next nine months, as Justice Department pressure mounted enough to crack even Blatter’s arrogance. According to the New York Times’ explanation, “One high-ranking soccer official said Mr. Blatter had been advised by his legal counsel that continuing in his current position could make defending him against possible future prosecution more difficult.”

More than a decade ago, Blatter’s long-time FIFA ally, Jack Warner from Trinidad, allegedly demanded from Mbeki’s government a bribe of $10 million just before the May 2004 vote deciding the host country for the 2010 Soccer World Cup. The main competitor then was Morocco, whose kingdom apparently offered only $1 million to Warner, and hence was the loser by 14 to 10 votes. This is known because of testimony by a fellow bribee, Chuck Blazer, who controlled US soccer for many years, and who wanted $1 million from South Africa. Blazer, formerly a Warner crony but also recently prosecuted for soccer corruption, is being treated for terminal cancer in Manhattan and has turned state’s witness, along with Warner’s sons.

According to the Justice Department, after the 2004 vote, “the South Africans were unable to arrange for the payment to be made directly from government funds. Arrangements were thereafter made with FIFA officials to instead have the $10 million sent from FIFA – using funds that would otherwise have gone from FIFA to South Africa to support the World Cup.” The US agencies’ surveillance technology traced the $10 million to a slush fund benefiting Warner and his mates.

Corruption denialism

Foolishly, South African elites quickly circled the wagons. The then finance minister, Trevor Manuel (now a leader of Rothschilds Bank), rebutted, “I am not aware of any request for a bribe of any size.” Mbeki was also denialist: “I am not aware of anybody who solicited a bribe from the government for the purpose of our country being awarded the right to host the World Cup… no public money was ever used to pay a bribe.”

Can Mbeki be believed? As president, he denied medicines to people living with AIDS fifteen years ago, and so is credited (in a Harvard study) with the unnecessary deaths of at least 330,000 South Africans. Fortunately, protesters from the Treatment Action Campaign raised sufficient pressure to overturn his policies in 2004, at which point AIDS drugs became available and the country’s life expectancy rose from 52 then to 61 today, with three million people getting free generic medicines. So Mbeki was an especially odd choice to lead the IFF Panel, especially given how corruption-riddled his own regime became (e.g., his long-protected police chief Jackie Selebi, who was also head of Interpol, was owned by the local Mob). And especially given Mbeki’s role in the financial liberalisation that is today crippling the South African economy.

Finally, three days after the bribery story broke, FIFA’s local organiser in chief, Danny Jordaan, admitted a $10 million payment was indeed made to Warner’s accounts in early 2008. But he claimed it was for soccer ‘development’ aimed at uplifting the African diaspora: “How could we have paid a bribe for votes four years after we had won the bid?” Disbelieving critics point out that the SA government kept this unprecedented ‘development’ gift to Caribbean soccer a secret in 2010, and had quietly asked FIFA to deposit it directly into Warner’s notorious slush fund account.

In Jordaan’s defence it could be argued that bribing Warner was a sensible investment for the national interest, along with trotting out the octogenarian Mandela to visit him in Trinidad, done clearly against doctor’s orders. Others might then ask whether the illicit funding was really limited to just $10 million – in the context of a World Cup conservatively estimated to have cost South Africa $5 billion (but more like double that if all the unnecessary items plus a dramatic increase in the foreign debt are calculated).

Amongst the bills covered by taxpayers were $3.1 billion in construction costs for ten stadiums (most are white elephants now), an unnecessary new $1 billion airport in Durban, $3.2 billion in profits sucked offshore by FIFA without taxation or exchange controls, and the unquantifiable cost of degraded political rights, housing displacement and elite back-slapping. Brazil suffered far worse, with more graft and many more forced removals from Rio’s favelas – and much bigger pre-Cup social protests in 2013-14 than even South Africa managed in 2010.

But even aside from these bribery revelations, the hangover from hosting the World Cup remains. Celebrating the FIFA bid victory back in 2004, Mbeki intoned “We want to ensure that, one day, historians will reflect upon the 2010 World Cup as a moment when Africa stood tall and resolutely turned the tide on centuries of poverty and conflict.” In reality, hosting the World Cup increased poverty and conflict here, just as happened in Brazil last year.

The US Justice Department completely neglected to mention these most corrupting aspects of FIFA’s rule. A year ago, on a BBC debate, I put it to Jordaan that he was implicated in FIFA’s white elephantism, reminding of how even he had once apologised for luring poor municipalities into building unneeded stadiums, and I complained that in the two most unequal major countries in the world, South Africa and Brazil, FIFA had a responsibility to democratise the World Cup model, not exacerbate inequality. Jordaan giggled in a disturbing way, and then simply cranked up his nationalistic rhetoric (for example, at 8:45 into the tape at http://www.bbc.co.uk/programmes/p020r2wy).

This was well understood by business strategists, reflected in the May 2010 remarks of senior insurance industry underwriter Trevor Kerst: “FIFA pays no taxes and institutes exclusion zones around the stadiums where matches take place, and tax income is curtailed. Within these exclusion zones, only FIFA and its partners may sell any goods; nothing from these sales accrues to the government.”

Do US Attorney General Loretta Lynch and the FBI give a damn about the deeper economic and political corruption of our society in 2010, represented by elites like Mbeki and Zuma giddily rolling the country under Blatter’s FIFA steamroller? There is no evidence in her anti-FIFA documentation of any awareness, much less critique of the way over-commercialised sports create mega-project mania in cities.

Blatter’s initial rebuttal was that the charges were laid because a bitter US establishment lost the 2022 World Cup bid to Qatar, because Britain lost the 2018 bid to Russia (which in Ukraine is the main adversary of US foreign policy once again) and because Washington is “the number one sponsor of the Hashemite Kingdom, therefore of my adversary (Jordan’s Prince Ali)… There is something that smells” about the investigation, Blatter pronounced. Donning this ill-fitting victim mantle, he successfully rallied the majority of 203 country votes for his re-election as FIFA chief executive last Friday. South Africa was one of the countries voting for Blatter. No doubt authorities in Pretoria – and Jordaan’s SA Football Association – will continue scrambling with Blatter in coming weeks to creatively explain or disguise the full extent of the bribery.

A banker’s world, from Washington to Zurich to Joburg

But Blatter’s correct: the investigation does indeed smell, as does much else coming from the US Justice Department, because if there is anywhere deserving of corporate corruption probes to the extent of the FIFA investigation, it is Washington itself. Lynch is an especially dubious prosecutor, given her prior role in covering up the US banking system’s corruption by neglecting to pursue criminal charges against HSBC over money laundering associated with Mexican drugs or its Swiss subsidiary’s assistance to wealthy US residents’ illegal tax-dodging.

Manipulation of currencies is another reflection of the way the world’s bankers loot the world, cheating even the City of London and Wall Street on interest rates and currency deals. The Washington model of ‘justice’ is to charge bankers a fine for such crimes, so that no one is jailed, and then banks pass the bill back to their customers. The game continues.

In the same spirit, last week, South Africa’s Competition Commission gathered sufficient evidence of wrongdoing to allege that banks including BNP Paribas, Barclays, JP Morgan, Investec and Standard Chartered colluded to synchronize currency trading to rip off South Africans. But given prevailing power relations, you can safely bet no one will go to jail and at best a tokenistic fine will be levied.

Last Wednesday, the Swiss security forces were fully cooperative in arresting seven FIFA elites (though not Blatter) in a luxury Zurich hotel at Washington’s request. Yet it is no secret, either, that Swiss banks are even more cooperative when it comes to assisting African dictators and multinational corporations like locally-headquartered Glencore, which was founded by the infamous apartheid ally Marc Rich (who fled prosecution in the US and was later pardoned by Bill Clinton in as his last presidential act in 2001). Rich’s protégé is Ivan Glasenberg, a Johannesburg-born self-made man who has become South Africa’s richest citizen, worth at least $5 billion.

But just as with Rich, who busted oil sanctions to aid apartheid, it’s partly ill-begotten wealth. As Mbeki’s report puts it, “the IFF risks inherent in a commodity trade with Switzerland will be substantially higher than in the equivalent transaction with Sweden” because of Swiss corruption, and he even includes mention of how the world’s largest commodity trader, Swiss-based Glencore, did various dubious deals to minimize taxation in South Africa, from where a large share of its profits are sourced. Mbeki was too frightened to mention the name Glencore, though.

The High Level Panel on Illicit Financial Flows was commissioned three years ago by the African Union and United Nations Economic Commission on Africa (UN ECA). But notwithstanding extensive resources, the panel didn’t turn up anything particularly surprising. Researchers at the UN ECA, Global Financial Integrity and the Universities of Massachusetts, Witwatersrand and London have previously identified even larger IFFs.

One reason is that Mbeki’s team declined to explore the grey area between licit and illicit, in the examples noted above, especially capital control liberalisation and legal tax loopholes. They displayed an annoying habit of providing anecdotes about rip-off schemes using real-life examples, while failing to name and shame the perpetrators. In short, the Mbeki report confirms that he and other African elites are not the least bit serious about building a powerful social force to halt and reverse the damage. His denial of the illicit financial flow to Warner is just icing on the cake.

Instead, such a movement is being built in South Africa by activists confronting these corporations directly. One example is the network demanding that the Marikana massacre report given to President Jacob Zuma in March finally be released so that at least one firm’s obvious blame can be codified and quantified. There is no question that Lonmin – a mining house once termed ‘the unacceptable face of capitalism’ by Edward Heath – will be criticised by Judge Ian Farlam for colluding with police to arrange the massacre of 34 of its workers on August 16, 2012. Lonmin’s top officials included a board director in charge of ‘transformation’, Cyril Ramaphosa, who 24 hours earlier wrote emails to the police and mining minister describing the wildcat wage strike then raging as “dastardly criminal.”

Ramaphosa is now second in command in South Africa, with a strong likelihood of succeeding Zuma as president in 2019. Ramaphosa had access to a $100 million World Bank loan to build 5500 houses for Lonmin in 2011, but only built three, explaining that Lonmin faced a profitability crisis after 2008. But Dick Forslund of the Alternative Information and Development Centre has proven that the firm had recently exported more than $300 million to Lonmin subsidiaries in the ‘hot money centres’ of Bermuda and London. A classic case of what can generally be termed transfer-pricing profits, it was a supposedly legal tax practice. Given Lonmin’s power and Ramaphosa’s explicit endorsement of the company’s financial accounts, don’t expect a South African government investigation.

In search of accountability

The most critical trade unions – the Association of Mineworkers and Construction Union and the National Union of Metalworkers of South Africa – along with the Economic Freedom Fighters (EFF) political party, and radical civil society (e.g. Right2Know and the Marikana Support Committee) are bravely attempting to shift public opinion to tackle such sustained corporate corruption. But while the link between crony capitalism and state power is no better personified than by Ramaphosa, he retains the hope of many in big business (and even some liberals) for a cleaner, less clumsily-corrupt ruling party after Zuma goes.

In other words, accountability for this mess will be very hard to achieve. Just as appalling as Bletter’s FIFA re-election on Friday, on the day before, Danny Jordaan was selected as ruling-party mayor of the Nelson Mandela Metro (Port Elizabeth). The most sleazy of South African municipalities, Durban, is fairly certain to win the 2022 Commonwealth Games in three months’ time, and will bid for the 2024 Olympic Games. Mbeki will be given an even larger platform to pretend he wants to halt financial corruption.

The need for non-accountability goes to the very top of South Africa. The most visible personal case of graft was unveiled the same day the FIFA bosses were arrested: Zuma’s upgrade of his rural Nkandla village palace. It cost taxpayers more than $20 million, and catalysed a “Pay Back the Money!” meme that many leftist critics – notably the EFF leader Julius Malema – regularly use against Zuma. But arguing Zumadoes not have to pay back any money, the police minister last Wednesday offered unintendedly hilarious excuses for unjustifiable state security funding on cattle and chicken facilities and a swimming pool (to fight potential fires).

A desperately defensive Pretoria government’s investment in the myth of 2010’s success is too great to allow its citizenry to pull the strings that unravel the corruption jersey. But it’s just as fragile a fabric as the wool chosen by Washington and the IFF Panel to pull over society’s eyes. Those strings would quickly entangle the likes of Blatter, Warner, Blazer, Mbeki, Zuma, Ramaphosa, Manuel, Jordaan, Glasenberg, Lynch and a host of their banker buddies. Their challenge is to gracefully step out of the tangle; ours is to pull the strings tighter, tripping them up (after all, the first three have already fallen harder than anyone expected), and then knitting some entirely new socio-economic and sporting systems as rapidly and as robustly as possible.

Does Egypt have a Government?

Lawrence Davidson

Military officers often take over countries, but only a fool would call the result a government. Governments do not have to be democratic, but they do have to be rule-based. The rules can come in the form of generic laws or customs, but in all cases they have to be promulgated, that is, be publicly set forth. In addition, obedience to the rules has to rest on something more than fear. If whatever system is running the show is subject to the whim of an individual or group of individuals, or operates through rules known only to the police, or relies mostly on terror, it is not a government. It is a despotism of some sort. Most instances of military rule fit the description of despotism. Speaking of such regimes as governments is just so much nonsense.

By the way, dictionary definitions of government are usually inadequate, restricting themselves to vague statements like “a particular system used to control a country.“ If the mafia took over Italy, would you understand their form of control as government?

There has been progress over the years as to what really constitutes government, and the rule of the condottieri no longer fits.

Historically the United States and the politicians who create its foreign policy do not bother with such distinctions. Often they seem to prefer despotisms. Be it for ideological or economic reasons, the U.S. has indulged in regime change for almost two hundred years, and a good number of times the beneficiaries of such change are the local military bosses. This history has had a cumulative effect on U.S. credibility: today, when Washington proclaims its mission is to bring democratic government to an otherwise benighted world, almost no one outside of the USA believes it. This is a fact never mentioned by the mainstream American media.

An example of a current military despotism that has been, and is now again, the recipient of U.S. military largess is the one in Egypt. The military has run things in Egypt since 1952, when a group of officers overthrew King Farouk and emasculated the Egyptian parliament. That situation lasted until 2011, when a popular revolt forced the resignation of Hosni Mubarak, an air force officer who had, for over thirty years, masqueraded as Egypt’s “fourth president.”

Mubarak’s fall was followed by a brief hiatus of democracy. During this time the Egyptian people actually engaged in a relatively free and fair election in which they selected a legitimate president in the person of Mohamed Morsi. The fact that Morsi was a religious Muslim did not make his election any less legitimate, though it did present those who did not vote for him with a choice. Would they accept an elected government led by a devout Muslim, with the implied possibility of altering its orientation though future elections, or would they reject the electoral results and revert back to military despotism, with the explicit awareness that changing that form of rule would require another popular revolution? We now know that a good number of those who did not vote for Morsi chose to return to military control.

That sizable minority certainly has gotten what they wished for. Egypt is now back under the control of a military dictatorship, this time led by Abdel Fattah el-Sisi, a “field marshal” who became the “sixth president” of Egypt by pulling off a coup in 2013, followed by a rigged national election.

What have “President” el-Sisi and his lieutenants been busy doing since putting aside their uniforms for tailored suits? Here is a list of items based on recent news reports as well as anonymously released recordings, which (shades of Richard Nixon) the Egyptian strongmen were at once arrogant and stupid enough to make.

* They have been busy manipulating the Egyptian news media so as to construct a cult of personality in which el-Sisi is promoted as a heroic figure “carrying the responsibility of the country in an existential crisis.” The media have been instructed to describe el-Sisi as a “brave, special, free and patriotic Egyptian.” To criticize him is to “slander this beautiful thing we have found in our lives.” One can’t help wonder who dreamt up this terminology.

* They have been busy funneling money into special accounts controlled by the military. It is of particular interest that one of these accounts is named the “Tamarrod” account. Tamarrod was the name of a supposedly independent secular and “democratic” youth movement that was very active in calling for the removal of Mohamed Morsi. This raises the question of whether significant elements of Egypt’s so-called democratic movement opposing Morsi were no more than fronts funded and manipulated by the military.

* They have been busy manipulating the courts and legal system. This should come as no surprise, because at least since Mubarak’s time the Egyptian courts have been stacked with supporters of military rule. The elected Morsi government ran headlong into a so-called legal barrier when almost everything it attempted was overruled by a court system loyal to the deposed Mubarak dictatorship. Subsequently one of the charges being brought against Morsi by the restored military despotism is “insulting the judiciary.”

* They have been busy destroying any person or group who would oppose them, including the Muslim Brotherhood, which has been declared “a terrorist organization.” For the Egyptian military to call the Muslim Brothers terrorists is like Israel calling the Palestinians terrorists. At the very least it is an example of projecting onto your foes tactics that you yourself practice. The el-Sisi cabal has also imprisoned and tried Mr. Morsi on a long list of manufactured charges, some of which may result in his execution. Last but not least, members of the truly independent secular democratic movement have been harassed and imprisoned.

* And, of course, el-Sisi, this “beautiful thing” that has come into the lives of all Egyptians, has allied with Israel to oppose Palestinian resistance to occupation. As a result he and his cabal are now actively complicit in the ruination of every Palestinian trapped in Gaza.

There are many names you can give the present nature of rule in Egypt. You can call it a dictatorship, a despotism, a tyranny, a garrison state, unlimited rule, or even a reign of terror carried on by thugs in suits. All of these would be relatively accurate. What you can’t call it is a government. To do so would slander the centuries-long struggle against all forms of despotism that have taken place both in the West and in the East. And, even more to the point, it would slander all those Egyptians who have, at great personal risk, stayed loyal to the goal of democracy for their country.

Race and the Shrinkage of the Middle Class

Jesse Jackson

They teach our children, drive our buses, clean our streets and deliver our mail. They staff the government and make it run. Their public-sector jobs are at the heart of the middle class, particularly for African-Americans and Latinos. And they are in steep decline.

One of five African-American adults works in government employment. This is a higher percentage than either white Americans or Latinos. It isn’t surprising. Freed of segregation, African-Americans came into our cities just as manufacturing jobs — the traditional pathway to the middle class — were headed abroad. Government employment offered secure jobs, decent pay and benefits, a chance to buy a home and lift your family.

Women also flocked to public service jobs, which offered greater professional and managerial opportunities.

But in 2008 when the economy collapsed, state budgets were savaged. Tax revenues plummeted; spending needs soared. Deep cutbacks in regular programs followed. No one will be surprised to learn that African Americans lost jobs at a higher rate than whites, often because of seniority.

Now, in the sixth year of the recovery, the economy has inched back, unemployment is down. But employment in the public sector hasn’t bounced back. The new jobs being created pay less and offer less security than the jobs that were lost. And this has devastating effects on the African-American middle class, the very people who have worked hard, played by the rules, and sought to get ahead.

The Economic Policy Institute estimates that since 2007, there are 1.8 million missing jobs in the public sector. Moreover, across the country, conservative Republican governors have assaulted unions and sought to curb collective bargaining, erase teacher tenure, and dramatically cut pensions and other benefits.

The loss of jobs and cutback on wages exacerbated the housing collapse. We’ve learned that banks and other predators targeted black neighborhoods like Prince Georges County in Maryland. They marketed shoddy mortgages, leaving those with good credit paying higher rates than they could have and those with no credit betting it all on the assumption that housing prices would never fall.

Many report on the decline of the middle class, which has fallen backward over the last decade in both median income and wealth. More than 8 of 10 Americans, according to a Pew Poll, now report that it is harder to maintain their standard of living than it was 10 years ago.

And African-Americans and Latinos got hit the hardest. The race gap has widened, not narrowed, in this century. The New York Times reports that 50 percent of African-Americans now are low-income households, along with 43 percent of Latinos — a category that has been growing since 2000.

In Illinois, the nonprofit Corporation for Enterprise Development reports that more than one in three households suffers a “persistent state of financial insecurity.” Again, African-Americans, Latinos and single women with children fare worse.

Numbers like this numb. We know the reality. But we seem in denial. When Baltimore blows up, the spotlight is put on the police and their practices, as it should be. But police forces across the country are ordered to keep order in communities racked with unemployment, homelessness, drugs, guns, collapsing schools, impoverished families and crushed hopes. The best-trained, more empathetic police officers in the country would have a hard time fulfilling that mission.

This country cannot stay in denial. We have to have a bold plan to rebuild high poverty neighborhoods from Chicago’s South Side to Appalachia’s valleys. Across the country we have work to do — from rebuilding 100-year-old water systems to creating the rapid transit that will connect people to jobs to moving to clean energy — and we have an entire generation of young people desperate for work. We have corporations stashing trillions abroad to avoid paying their fair share of taxes. Billionaire hedge fund operators pay a lower tax rate than their secretaries. We need rebuild America and put people to work. The cost of losing another generation to despair will be far greater than the cost of investing in them on the front side of life.