Australian whistleblower sent to prison for exposing Afghan war crimes

Oscar Grenfell

In a chilling attack on democratic rights, David McBride was sentenced to five years and eight months’ imprisonment yesterday for blowing the whistle on Australian war crimes in Afghanistan. McBride was hit with a non-parole period of two years and three months.

David McBride addressing Sydney rally demanding the release of Julian Assange, 24 May, 2023.

The sentence means that the cumulative period during which he has been hounded by the authorities, subjected to secretive national-security trials and now imprisoned, will cost McBride almost two decades of his life.

A former army lawyer, McBride is the first person to be prosecuted over the war crimes in Afghanistan and to be sentenced to prison. He is being punished, not for committing the crimes, but for providing information to journalists documenting gross violations of international law, including extrajudicial murders.

In handing down the punishment, Australian Capital Territory Supreme Court Justice David Mossop noted that it was lengthy sentence and that he had the option of a more lenient penalty.

Mossop, however, declared that a substantial term of imprisonment was necessary “to deter others from such conduct. They must know that breaching their legal obligations … will be met by significant punishment.”

Mossop said this was all the more important when questions of “national security” were involved. That is a clear declaration that exposures of war crimes, including contraventions of international law, must be suppressed to keep the population in the dark and deter others.

The persecution of McBride is all the more striking given that his exposures have been fully vindicated. After his attempts to raise complaints through internal military channels were rebuffed in 2014, McBride contacted Australian Broadcasting Corporation (ABC) journalists and provided them with military documents over the next two years related to the occupation of Afghanistan.

The resulting 2017 Afghan Files series by the ABC documented the alleged murder of Afghan prisoners by Australian Special Forces, the killing of children and the retrospective green light given to such actions by military investigators. The exposures, adding to earlier media reports, cut across a protracted cover up of the war crimes, the majority of which were reportedly committed between 2009 and 2013.

A belated and highly limited official investigation, dubbed the Brereton Inquiry, concluded in 2020 that there was “credible evidence” that Australian Special Forces soldiers murdered at least 39 Afghan civilians and prisoners between 2009 and 2013. The inquiry was a damage control exercise, with its chief aim being to clear governments and the military command of any knowledge or direct responsibility for the war crimes.

Since the Brereton report was handed down, only one relatively lowly Special Forces soldier has been charged with an offence. The prosecution was almost unavoidable, given that footage of the soldier shooting a prone and unarmed Afghan teenager dead had been broadcast nationally.

That trial has been repeatedly delayed, and no one else has been charged. Senior representatives of the federal Labor government and military command have insisted that it is necessary to “move on” from the Afghan war crimes, lest they dent army morale and obstruct current military operations, including the US-led build up directed against China.

There has been no such reticence in the persecution of McBride, which has rolled on relentlessly. He was charged with five national security offences, including unlawfully disclosing classified information under the Defence Act and divulging information in breach of the Crimes Act. The trial was held with “national security” secrecy provisions and restrictions on reporting in force.

Last November, McBride was effectively compelled to plead guilty to three of the charges. The court sided with prosecutors in barring one of his main lines of defence. McBride had planned to argue that he was legally obligated to disobey orders aimed at suppressing the war crimes, because they were in violation of international law. The court upheld the prosecution line, which was essentially that members of the military must follow whatever orders they are given.

That authoritarian position was central to Mossop’s sentencing remarks. McBride was condemned for having gone against military command and for showing no “contrition,” while the contents of what he exposed were scarcely mentioned.

The imprisonment of McBride is another demonstration of the anti-democratic and militarist program of the federal Labor government.

In the first instance, many of its leading figures, including Prime Minister Anthony Albanese, were prominent members of the 2007–2013 Labor administrations of Kevin Rudd and Julia Gillard. Those Labor governments oversaw Australian participation in the US-led, neo-colonial occupation of Afghanistan throughout the period of the war crimes documented in the Brereton Report.

Gillard’s government participated in the US President Obama’s “troop surge,” including greater Australian Special Forces involvement in “kill or capture” raids. Those were assassination operations, targeting Afghans placed on intelligence lists without a semblance of due process.

McBride is going to prison because the Albanese Labor government has put him there.

Attorney-General Mark Dreyfus rejected calls to use his powers to order a termination of the prosecution. The prosecution’s case, including barring McBride’s defence arguments, was undoubtedly worked out in collaboration with the government.

In addition to exacting retribution and covering up past crimes, the clear aim is to send a chilling message to whistleblowers and opponents of war more broadly.

That is a component of Labor’s support for US-led wars today, which are increasingly meta-stasising into a new global conflict. Labor has aggressively backed Israel’s genocide of the Palestinians in Gaza. It is a party to the US-NATO proxy war against Russia in Ukraine having added to more than a billion dollars of aid to Washington’s puppet regime in Kiev, most of it military.

In the Indo-Pacific, Labor is completing Australia’s transformation into a frontline state for a US-led war against China, including through the $368 billion purchase of nuclear-powered submarines under the AUKUS pact, a vast expansion of missile and strike capabilities, expanded US basing arrangements and a continuous diplomatic offensive to involve nations throughout the region in the campaign against Beijing.

The government and the national security establishment have insisted this must be a “whole of nation” war effort, subordinating every aspect of society to the war drive.

As part of this, Labor joined hands with the then Liberal-National Coalition government in 2017 to pass sweeping “foreign interference” laws. In addition to stoking a McCarthyite anti-China hysteria, the legislation potentially outlaws internationally-coordinated political activity, including anti-war campaigning, and increases penalties for whistleblowing and “national security” exposures.

The crackdown on opposition to war is currently taking the form of a vitriolic campaign against protesters opposing the genocide in Gaza. Every day they are slandered by government and opposition leaders and the corporate media as dangerous, terrorist sympathisers and antisemites, as part of a lying global campaign to conflate opposition to the Israeli war crimes with anti-Jewish bigotry.

The McBride sentence further exposes Labor’s phony posturing over the persecution of WikiLeaks publisher Julian Assange. The Australian citizen faces imminent extradition from Britain to the US, where he would be prosecuted on 17 Espionage Act charges carrying a total maximum sentence of 175 years’ imprisonment, for exposing war crimes in Iraq and Afghanistan, as well as global diplomatic conspiracies, spying and human rights abuses by the US and its allies.

Labor has occasionally feigned concern for Assange’s plight, with Albanese and others vaguely declaring “enough is enough” and the case “should be brought to a close.” At the same time, Labor has rejected demands that it use its diplomatic and legal powers to secure his freedom. Last October, Albanese confirmed that his government had not and would not request that US President Joe Biden intervene to end the prosecution of Assange.

Labor has presented the US-led frame-up of the WikiLeaks publisher as a “legal process” involving America and Britain that must be “respected” and to which Australia is not a formal party. As phony as these evasions are, in the McBride case there are no such excuses. This is a prosecution, with striking similarities to the persecution of Assange, directly overseen by the Labor government itself.

US to quadruple tariffs on Chinese electric vehicles

Nick Beams

The Biden administration is set to quadruple tariffs on imports of Chinese electric vehicles (EVs) from 25 percent to 100 percent in a major escalation of the economic war being waged over the development of computers chips and green technology products.

Chinese smartphone maker Xiaomi displays its Xiaomi SU7 electric car in Beijing, Tuesday, March 26, 2024. [AP Photo/Ng Han Guan]

The proposed hike in EV tariffs, under Section 301 of the 1974 Trade Act, has been reported by the Wall Street Journal, Bloomberg and the Financial Times (FT) in recent days and could be invoked as early as today.

While Chinese EV exports to the US are not of major size at this stage—as its producers have focused more on the European market—the mooted tariff hike is a preemptive strike aimed at blocking access to the American market in the future.

Outlining the driving forces of the move, former US trade official, now vice-president of the Asia Society Policy Institute, Wendy Cutler, told the FT the Biden administration was “trying to get ahead of the curve and ensure that the US car industry does not suffer the same fate as the US solar industry, which was virtually decimated by unfairly traded Chinese imports.”

Cutler said Chinese producers had been prepared to swallow the cost of existing tariffs to “cripple” their US rivals, but the escalation of the tariff would make that much harder.

“A quadrupling of the tariff rate, however, would more effectively shield US auto manufacturers from unfairly traded Chinese vehicles before they can gain a foothold in the US market,” she said.

The US claims these “unfair” practices result from state subsides given to Chinese high-tech manufacturers by Beijing. The accusation is completely hypocritical given the billions of dollars provided by the US state to high-tech corporations under the Inflation Reduction Act and the so-called Chips Act either in the form of direct subsidies or via lucrative tax breaks.

Only last month US officials announced a plan for $6.1 billion in grants to Micron Technology, the largest American maker of computer chips, part of the $33 billion that has been handed out to high-tech companies.

If Chinese companies are being provided with state subsidies, part of president Xi Jinping’s push to develop “new productive forces,” as they undoubtedly are, then Beijing is doing nothing different from what is being carried out in the US and other major economies.

The main reason for the more competitive position of China, first in the production of solar panels and now in EVs is not state subsidies, but the development of better technology and more efficient production methods.

In something of a lament for the American car industry, once the global leader, Bloomberg columnist David Fickling said tariffs and timidity were driving it into a ditch. He noted that Ford was reducing orders from battery suppliers and was planning to reduce spending on EVs by $12 billion. Telsa was cutting its workforce by 10 percent and disbanding a Supercharger team that would have supplied refueling outlets.

Fickling put the decline down to a loss of “nerve” and that US carmakers were evolving in an environment where they could grow “big and bloated.”

However, the reasons for the industry’s crisis, to which it will respond with increased attacks on the working class to extract greater levels of profit combined with tariff measures, are not due to a loss of spirit. They are rooted at the very centre of the mode of US profit accumulation, increasingly based not on production but on financial parasitism, the effects of which are seen in industries that once led the world.

Boeing, once the world’s major aircraft producer, has become a by-word for the lack of safety measures, leading to crashes, the result of cutting corners to meet the demands of the bottom line. Two former company employees who were giving details of its practices have recently been found dead in unexplained circumstances.

Boeing and the major car companies have been heavily involved in share buyback operations. The profits obtained by major corporations are increasingly being used to meet the insatiable demands for a boosting of share values on Wall Street by banks, finance institutions and hedge funds which are the owners of much of US industry, ranging from manufacturing companies to hospitals and pharmaceutical companies.

General Motors is a case in point. Last November, it announced a record $10 billion share buyback operation. Large as the figure is, it is only a small part of an endemic tendency.

It has been calculated by economist Willam O. Lazonick that between 2012 and 2021 some 474 corporations, included in the S&P 500 index, put $5.7 trillion into share buybacks, some 55 percent of their income. They paid out another $4.2 trillion to shareholders in dividends, representing 41 percent of their income.

The imposition of tariffs on EVs, along with other high-tech imports will no doubt be presented by the Biden administration, backed by its props in the trade union bureaucracy, in particular UAW president Shawn Fain, as support for the American worker.

It is nothing of the sort. It is aimed at protecting the bottom line of the auto companies and their parasitic owners in the sphere of finance capital.

But the vultures of finance ultimately depend on the extraction of surplus value from the labour of the working class. This means that tariffs will necessarily be accompanied by layoffs, coupled with the intensification of exploitation as fewer workers are driven to do more, and real wages are cut.

Moreover, it will result in further economic warfare measures. The response in Europe to the exclusion of Chinese EV manufacturers from the American market will be to throw up their own tariff barriers, fearing a further increase in Chinese EV and other high-tech exports.

The plans for this have already been laid with a major report initiated by the European Commission last October on how to protect its markets, under the banner of defending economic and national security, set to be released within the next few weeks.

The tariffs could be as high as those in the US because levels of 30 percent which have been under discussion are regarded as insufficient to block Chinese producers.

The global economy is increasingly coming to resemble the madhouse of the 1930s as, almost on a daily basis, the major economies erect tariff barriers and sanctions directed against the free movement of goods and technologies.

The economic chaos of that time was a central factor in creating the conditions for World War II. Today, it contributes to creating the conditions for another world war, with nuclear consequences.

US general confirms UK Special Forces operating in Ukraine

Robert Stevens

On May 11 , AP published an article on the state of US special forces, which including an interview with US General Bryan Fenton, commander of the US Special Operations Command.

In it Fenton acknowledged the deployment of a significant number of British Special Forces in Ukraine.

Ukrainian soldiers take part in an exercise for the use of NLAW anti-tank missiles at the Yavoriv military training ground, close to Lviv, western Ukraine, Friday, Jan. 28, 2022. (AP Photo/Pavlo Palamarchuk)

A piece headlined, “US special operations, learning from war in Ukraine, have to do more with less”, raised proposals by US Army Special Operations Command to increase the size of its Green Beret teams—usually about 12 members—to bring in people with more specialized and technical abilities.

Forbes comments, “A 12-person detachment might be upgunned,’” to include an Air Force pilot, Navy ship driver, cryptologist or cyber expert. In the key passage he explains how:

“The United States is ‘taking a lot of lessons learned out of the experience in Ukraine, mostly through the eyes of our U.K. special operations partners, who not only have done that in their formations, but they’ve also learned very quickly that they needed other elements of their joint force.”

AP’s report continues, “As an example, he [Fenton] said British commandos needed Royal Air Force pilots to help advise on drone operations and Royal Navy teammates ‘to help them understand, more than a SOF (special operations forces) teammate could, the way a ship in the Black Sea navigates.’”

Fenton here reveals how deeply British imperialism is involved in the NATO-led war against Russia, including the deployment of Special Forces, Royal Air Force pilots and “Royal Navy teammates”.

Fenton’s interview comes less than three months after German Chancellor Scholtz stated that British troops were operating on the war front, and the leak in March in Russian media showing that Lt Gen Ingo Gerhartz, the head of the Luftwaffe, describing how British forces were working with Ukraine on deploying Storm Shadow missiles against targets up to 150 miles behind Russian lines.

Following Scholz’s comments, London said that it had a “small number” of soldiers deployed inside Ukraine, revealing only that some were involved in medical training.

Under conditions in which Ukraine’s failed offensive last year has plunged Kiev and NATO into crisis, with talk among leading NATO figures, including French President Macron of the western powers deploying ground troops to fight Russia, Fenton’s comments caused acute embarrassment.

This led to AP taking down his comments in an extraordinarily clumsy manner. In a Monday posting on X, WSWS writer Andrei Damon shows this, using screenshots. He wrote:

“Over the weekend, the Associated Press published a report acknowledging the deployment of a significant number of British special forces in Ukraine. This reference has been removed, leaving a nonsense sentence fragment. The world's population is being denied vital information.

Since then a further rewrite has been undertaken. The severely edited article, stripped of all detail, now reads:

“He [Fenton] said in an interview that the U.S. is ‘taking a lot of lessons learned out of the experience in Ukraine,’ including by special operations forces working in the country. The U.S. has no troops on the ground there.”

Any admission of the extent of UK involvement in Ukraine is ruthlessly suppressed, through the use of D Notices, which veto the publication of news damaging to the interests of the British state.

On October 30, 2023, the WSWS reported that the Socialist Worker, the publication of the SWP, had been sent D Notices over its coverage on Gaza and Ukraine. But for the most part D Notices, due to the slavish collusion of the mainstream media mean only that such notices function as gag orders.

Not a single national or local newspaper in the UK has reported Fenton’s comments, or their subsequent redaction by AP. And only two, non-UK based internet publications have even referred to Fenton’s original comments—the New York-based Business Insider, and a military website, Army Recognition Group, based in Belgium.

Since the beginning of the Ukraine-Russian war, the WSWS has repeatedly alerted workers in Britain and internationally to the presence of troops on the ground in Ukraine, in opposition to the lies of the leaders of the NATO countries involved that they are playing no such role.

In an April 17, 2022 article, the WSWS provided details on how Britain had been training Ukrainian troops for years, since the since the 2014 Maidan Square coup, which overthrew the pro-Russian President Viktor Yanukovych. The Operation Orbital training escalated following Russia’s invasion in February 2022.

The WSWS drew attention to the fact that British special forces were at that point (April 2022) training Ukrainian troops in the war zone, according to a London Times report.

Another WSWS article published the same month noted that leaked classified Pentagon documents further exposed the role of British imperialism in provocations and war against Russia, including what the Pentagon described as the “near-shoot down” of a UK spy plane by Russia.

The Pentagon leaks confirmed that UK special forces troops were operating in the Ukrainian war zone. A classified document, at the time less than two weeks old—dated March 1, 2023—listed Britain as supplying more than half of all 97 western special forces with 50, followed by Latvia (17); France (15); US (14); and Netherlands (1).

A WSWS article published December 18, 2022 noted that a leading British army general, Lieutenant General Robert Magowan—one of the three deputy defence chiefs of staff of the British armed forces—had admitted that British Royal Marines had been deployed on “discreet operations” inside Ukraine. The operations conducted by the Marines held a “high level of political and military risk.”

An article published June 5, 2023 noted, “According to research compiled by Action on Armed Violence (AOAV), a London-based NGO, based on leaked reports to the mainstream media, wire services and broadcasters or as the result of operations that have gone wrong, the UKSF [United Kingdom Special Forces] has carried out operations in at least 19 countries between 2011 and 2021, including Ukraine, Syria, Afghanistan, Nigeria, the Philippines, Russia, Kenya, Libya, Somalia, Sudan and Yemen.”

The war aims of British imperialism have been codified in a series of speeches by Prime Minister Rishi Sunak, beginning with one at a NATO air base in Warsaw in April. Identifying Russia, China, Iran and North Korea as an “axis of authoritarian states,” hostile to NATO and Britain’s interests, he pledged to increase military spending to 2.5 percent of GDP, meaning an extra £75 billion going to the armed forces.

This includes £3 billion multi-year funding for Ukraine and a massive expansion in military equipment donations. £500 million was handed over to Kiev immediately, with Downing Street saying it was providing the “largest-ever provision of vital munitions, including some 400 vehicles, 1,600 munitions and 4 million rounds of ammunition.”

Sunak’s predecessor Boris Johnson had already put in place more than £200 million to strengthen the Special Forces in a 2021 plan, with the Royal Marines to be transformed into a new Future Commando Force. This would take on many of the traditional tasks of the special forces—the Special Air Service and Special Boat Service. Over the next decade the new force would carry out maritime security operations and “pre-empt and deter sub-threshold activity, and counter state threats”.

Auroral display dazzles millions around the globe

Bryan Dyne & Don Barrett

The aurora borealis and aurora australis (commonly known as the northern lights and southern lights, respectively) visible Friday, Saturday and Sunday nights brought forth enormous widespread interest in the astronomical phenomenon. Millions have followed news reports, watched videos and shared their own images of the display on social media.

Aurora are generated through the complex interaction between charged particles emitted by the Sun and Earth’s magnetic fields. These particles, mostly electrons and protons, are captured in Earth’s magnetic field, which resembles a giant version of that surrounding a common bar magnet, and rain down on the upper atmosphere. The particles then collide with and excite atoms and molecules in the atmosphere, which in turn release various colors of light, ultimately producing the dazzling displays so many have seen.

For those living in higher latitudes in Canada, Norway and Siberia on Earth’s Northern Hemisphere and the southern parts of Australia, New Zealand, Chile, Argentina and South Africa, aurora are a somewhat more common occurrence. Charged particles from the Sun are constantly bombarding Earth in the form of the solar wind and thus faint aurorae are often present in the regions surrounding the poles.

An aurora borealis, also known as the northern lights, is seen in the night sky in the early morning hours of Monday, April 24, 2023, near Washtucna, Washington. [AP Photo/Ted S. Warren]

The most common color of aurora is green, which occurs when oxygen atoms in the thermosphere (60–120 miles above the sea level) are hit and then emit light. The rare red occurs when oxygen is hit at even higher altitudes, while the pink often seen is produced by emissions from nitrogen molecules at lower heights.

The particle wind from the Sun, however, is not constant. Scientific study of the Sun began with Galileo, who made the first detailed observations in 1612 of sunspots on its surface using a telescope and mapped their motion across its disk. The presence of an 11-year “solar cycle” in which sunspot numbers rise and fall was first identified in 1843 through the work of German astronomer Heinrich Schwabe and Swiss astronomer Johann Rudolph Wolfe.

Exactly how actions in the Sun’s atmosphere could affect the Earth’s aurora awaited developments in physics to explain both these events themselves. In 1896, Dutch physicist Pieter Zeeman showed that magnetic fields could change and split the distinct colors of light emitted by a hot gas as viewed through a spectroscope, which separates colors. In 1908, American astronomer George Ellery Hale observed this splitting in the light emitted by sunspots, showing magnetic fields up to thousands of times higher than that at the Earth’s surface were present within them. Over the 20th century, studies of radio propagation in Earth’s atmosphere made it clear that solar flares resulted in the Sun’s emitting energetic particles, which produced changes in radio communication.

Sunspots are heralds of these far more energetic events, solar flares. A solar flare is thought to be the result of a collapse or snapping of magnetic fields on the Sun, which produces a colossally intense burst of radiation and throws out electrons, protons and heavier ions, the lightest of these, the electrons, having some accelerated to near the speed of light.

Solar flares are often, but not always, associated with coronal mass ejections (CMEs). This second type of energetic event involves the ejection of vast clouds of plasma and their related magnetic field from the Sun’s atmosphere. The ejections are already many times the size of Earth at their occurrence and grow to tens of millions of miles in size by the time they reach our distance from the Sun.

Only in the space age, on December 14, 1971, would the Orbiting Solar Observatory 7 spacecraft actually image a CME leaving the Sun, something which happens at a small scale almost daily. Today there is a whole fleet of spacecraft which observe the Sun and the resultant “space weather,” including the flagship Solar Dynamics Observatory and the venerable Solar and Heliospheric Observatory.

The relatively new Parker Solar Probe takes images of the Sun’s atmosphere from within the solar atmosphere itself, a region which the spacecraft survives only through truly ingenious engineering and flight planning.

And while solar flares and CMEs are common, they mostly head into empty space. On occasion, however, they do hit Earth and cause a shock to the planet’s magnetic field known as a geomagnetic storm.

The aurora on Friday and Saturday were caused by five successive CMEs that erupted from the Sun, three of which hit Earth. They induced a geomagnetic storm strong enough to produce aurora visible in the northern hemisphere, as far south as Puerto Rico. A sixth CME was expected to make an oblique impact on Earth Sunday but had not yet registered as of this writing.

Perhaps most significantly about the weekend’s aurora, however, was the mass social character of the event. In the past, photographs of the aurora were mostly taken by professionals with specialized cameras and lenses. Today, many if not most of the nearly 7 billion smartphones in use can take a 5-second exposure revealing the green, pink and red (and sometimes blue) hues.

The aurora on Friday evening captured on a smartphone with a 5-second exposure

They elicited a certain wonder in the natural world and connection with other humans. Workers and young people in the United States and Russia were witness to the same aurora, despite the drive by the respective ruling elites to vilify the other country.

The effects of geomagnetic storms are, however, not always benign. On September 1, 1859, British astronomers Richard Carrington and Richard Hodgson made the first observations of a solar flare, when a brilliant white spot appeared on a sunspot as they observed it and changed its appearance and location within the sunspot over a five-minute period. Just 17.6 hours later, the most brilliant auroral display historically recorded began, reaching almost to the Equator.

Those aurorae, however, were accompanied by widespread failures of telegraph lines, the most advanced form of communication at the time. Operators received shocks, telegraph pylons sparked, and some lines even caught fire.

More recently, a geomagnetic storm on March 13, 1989 knocked out the Hydro-Quebec power grid, shutting off power for millions of Canadians on a day when the temperature low for that day was 23 degrees Fahrenheit (-5 Celsius). That same storm also threatened to take down the power grid for the 150 million inhabitants of the US Northeast.

And on July 23, 2012, an eruption on the Sun was observed that was comparable to the Carrington event. It ultimately missed Earth, and studies in 2013 estimated that if it had hit, the economic cost to the United States alone would have been between $600 billion and $2.4 trillion. A study from China predicted that it would have taken four to 10 years to recover from the disaster.

Healthcare giant Steward Health Care files for Bankruptcy

Benjamin Mateus

On Monday, the Massachusetts-born and Dallas-based healthcare giant Steward Health Care filed for bankruptcy citing challenges in reimbursement from government payers while rising labor costs, inflation and ongoing expenses associated with the pandemic have hampered its ability to remain solvent.

However, behind the scenes, the real issues that have driven the chapter 11 proceedings has been the predatory and parasitic financial deals that have enriched venture capitalists, shareholders, and the executives of the largest physician-owned hospital in the country to the tune of over $1 billion while it owes $300 million in unpaid compensations and $558 million to its non-insider creditors that include the Center for Medicare and Medicaid services.

Court documents filed by Steward attorney Ray Schrock show the health company has over $9 billion in total liabilities, including $1.2 billion in loans, nearly $1 billion in unpaid bills from medical vendors and suppliers. Because of its long-standing incestuous relationship with Medical Properties Trust (MPT), an Alabama-based real estate investment trust that invests in healthcare facilities, Steward owes $6.6 billion in long-term rent obligations.

The sign for Norwood Hospital, a Steward Health Care hospital, is seen, June 29, 2020, in Norwood, Massachusetts. Steward Health Care said it plans to sell off all its hospitals after announcing on Monday, May 6, 2024, that it filed for bankruptcy protection. [AP Photo/Steven Senne]

In 2021, “MPT owned 425 properties in nine countries, with 51 operators in both for-profit and non-profit health care entities,” according to Rosemary Batt and Eileen Appelbaum in their working paper, “The role of public REITs [Real Estate Investment Trusts] in financialization and industry restructuring,” from July 2022. Though MPT claims it is highly diversified, its investments are heavily concentrated in two health systems – Steward and Prospect Medical Holdings.

Steward currently operates 31 hospitals and around 400 facilities across eight states which have now been put up for sale. They also provide healthcare to more than two million people and employ 30,000 people of which 4,500 are physicians. Although Shrock told US Bankruptcy Judge Chris Lopez, who is overseeing the bankruptcy proceedings, “Our goal remains that there are zero hospitals closed on our watch,” it is precisely such a calamitous development that is posed. A bankruptcy could leave millions of people without healthcare and thousands of workers scrambling to seek employment. In addition will be the long-term economic impact these closures will have on their communities.

Although its multi-millionaire CEO, Dr. Ralph de la Torre, who makes $16 million per year just in salary and purchased a $40 million yacht in 2021, has attempted to calm fears in the mainstream press that hospitals will close, yesterday’s report that paychecks for Steward employees had been delayed due to processing errors by Bank of America sent a shudder among workers.

During a virtual hearing, Shrock explained, “We’ve got a June 25 deadline and option for all hospitals other than Florida, and then a sale hearing. We’ll see how the timing goes. We’ll see whether or not this is revisited.” Steward will hold auctions for its hospitals outside of Florida on June 28 and then on July 30 for its nine Florida-based facilities.

In a lengthy report detailing Steward’s financial relationships with private-equity firms Cerberus and real estate giant MPT, Business Insider writer, Bethany McLean, provides a clear analysis of these predatory relationships that have seen a cascade of failing health systems that have been gutted, leaving low-income communities hollowed out while investors gorge on the plunder.

About these struggling hospitals had to shut down their operations, McLean said, “They were all owned at various points by for-profit investors, including leading private-equity firms like Cerberus, Leonard Green, and Apollo. And in a move that stripped the hospitals of one of their prime assets, the owners had sold the land beneath the facilities to a little-known real-estate investor called Medical Properties Trust. MPT, which has purchased some $16 billion of hospital real estate over the past two decades, now bills itself as one of the world’s largest owners of hospital beds.”

She added, “For many hospitals, the deal proved disastrous. Once their real estate was sold to MPT, they were forced to pay rent on what had always been their own property. That added to the massive debt burdens already placed in the hospitals by their for-profit owners, deepening their financial woes. It also deprived Americans of desperately needed healthcare and put lives at risk – all while enriching some of the world’s wealthiest investors.”

The idea behind MPT’s operations is simple. In a process known as “sale-leasebacks,” the real estate trust fund purchases hospital properties and lands, then leases them back to the health systems at an exorbitant price and uses the profits to enrich their investors.

According to Batt and Applebaum, “The tenant pays rent and bears all additional costs, including maintenance and repairs, utilities and taxes. Leases are long term – typically 10 to 20 years in the US … 99 percent of its leases have inflation-based or fixed annual rent escalators.” They also added, “In addition to sale-leaseback payments, MPT also makes money from interest income from loans to tenants and other facility owners, and from profits or equity interests in some its tenants’ operations.”

In particular, MPT told their shareholders in their 2020 annual report on how they target investment deals, “We always address two primary questions when underwriting an investment -1) is this hospital truly needed in the market and 2) would the community suffer were the hospital not there. We believe answers to these two questions provide significant insight on whether or not to move forward with a particular investment.”

The expansion of REIT into hospital property ownership grew with the penetration of private equity investments with the passage of the Affordable Care Act in 2010. The promise of a dramatically expanded insurance pool and improvements in hospital margins brought the Wall Street venture capitalists to the business of healthcare.

However, the failure of these promises that also included reductions in Medicaid and Medicare reimbursements meant private equity firms were left with outsized investments. This was the case with Cerberus after it “acquired non-profit Boston-based Caritas Christi’s six hospitals and affiliations in 2010 for $895 million and created Steward Health Care,” according to Hospital CFO Report.

In 2016, Steward and Cerberus entered into a $1.25 billion deal with MPT, which bought up all of Steward’s properties and gave MPT a five percent ownership of the company. This allowed Steward to payback Cerberus’ 2010 investment and the firm obtained the capital to pay back all of its $400 million in debt. Closer analysis found that much of the funds went to expand acquisition of other hospitals (including their outsized debts) and investor dividends, while the hospitals themselves received little to assist them with their operations as they were being saddled with higher rent payments.

Steward hospitals in Massachusetts had fallen into deep financial troubles and were the worst performers. They had the highest level of debt. Hospital performance metrics showed that they also had the highest rates of hospital acquired infections and readmissions.

Richard Mortell, managing partner of Third Coast Real Estate Capital, said of these deals, “I estimate that less than 10 percent of the money has actually been reinvested into the hospital systems. The vast majority was either distributed to owners or used to repay debt taken out to distribute money to owners.”

By 2017, Steward had acquired 36 hospitals with an estimated $8 billion in revenue. The following year the organization moved its top management to Dallas, Texas. In June 2020, CEO Dr. del la Torre acquired 90 percent of the company after borrowing $335 million from MPT and bought out Cerberus.

But behind these transactions, in the intervening six years since MPT entered the picture, the real estate trust had “acquired a net $3.3 billion in real estate underlying 34 Steward facilities,” according to Business Insider. Steward was now burdened with an annual rent of close to $400 million.

In reviewing the experiences with MPT and Steward, Batt and Applebaum wrote:

Who were the winners and losers in these transactions? Clearly patients, healthcare workers, suppliers, and communities lost out. In the tension between making ever increasing rent payments that reduce hospitals’ net revenue and improving hospital technology, processes and wages, rent payments took precedence. Cerberus walked away with an estimated $700 million,12 which it could not have done without the critical role played by the REIT, Medical Properties Trust.

And what about MPT? It had invested $4.5 billion in the Steward System and owned 36 facilities, according to its Investor Presentation in June 2021. In response to a question from reporters for the Wall Street Journal in February 2022, MPT said that since 2016, Steward has paid MPT roughly $1.2 billion in rent and mortgage interest. Its CEO, Edward Aldag Jr., earned $16,857,637 in total compensation in the 2020 pandemic year.

The promise for congressional oversight into the role of private equity’s influence in healthcare will conclude, like the investigations into banking practices that led to the 2008 financial calamity, “too big to fail.”

The jobs cut massacre in healthcare continues as health systems and hospitals attempt to fend off financial and operational challenges. Clearly the case of Steward Health Care and MPT provides important insights into these ongoing developments and demonstrates the disastrous outcome of the financialization of healthcare.

UK contaminated blood inquiry to publish findings, as more heinous crimes are revealed

Robert Stevens

The six-year-long UK public inquiry into the contaminated blood scandal is to announce its findings this month, on May 20. During the 1970s and 1980s, major pharmaceutical companies supplied “Factor 8” blood products infected with the hepatitis and HIV viruses, leading to the deaths since of thousands of people in the UK and internationally.

Around 30,000 people in the UK were infected with hepatitis C and/or HIV after receiving contaminated blood or blood products, including 380 children. At least 3,000 died and the rest were left severely ill. The death rate among survivors is extremely high, with roughly one person affected dying every four days, and many having their lives destroyed.

Bottles of factor viii haemophilia treatment [Photo by JJEv810 - Own work / CC BY-SA 4.0]

So horrific are the events and the subsequent decades-long cover-up by successive governments that gruesome details are still emerging in the weeks up to the publication of the Inquiry’s report.

In April, the BBC revealed new documents showing medical trials involving children had taken place for more than 15 years, with many infected with hepatitis C and HIV.

The practises, recalling the hideous medical experiments of the Nazi “Angel of Death” Josef Mengele, involved carrying out trials on children with blood clotting disorders. In many cases this was done without families consenting to the children taking part. The majority of the children who were enrolled in the trials are now dead, many dying decades before their natural life span.

The BBC reported on a number of cases:

Luke O’Shea-Phillips, now aged 42, has haemophilia—a blood clotting disorder that means he bruises and bleeds more easily than most.

The BBC notes, “He caught the potentially lethal viral infection hepatitis C while being treated at the Middlesex Hospital, in central London, which was administered because of a small cut to his mouth, aged three, in 1985.

“Documents seen by the BBC suggest he was deliberately given the blood product - which his doctor knew might have been infected - so he could be enrolled in a clinical trial.

“The doctor wanted to find out how likely patients were to catch diseases from a new version of heat-treated Factor VIII. Though he had never been treated for his condition before, Luke was given heat-treated Factor VIII to stop his mouth bleeding.”

The BBC confirmed the existence of a letter from Luke’s doctor, Samuel Machin, to another doctor, Peter Kernoff, based at London’s Royal Free Hospital.

“Machin detailed the treatment of Luke and another boy, asking: ‘I hope they will be suitable for your heat-treated trial.’”

Speaking to the BBC, Luke said, “I was a guinea pig in clinical trials that could have killed me… There is no other way to explain it—my treatment was changed so I could be enrolled in clinical trials. This change in medication gave me a fatal disease—hepatitis C—yet my mother was never even told.”

The BBC’s report states, “Documents reveal doctors knew Luke had contracted hepatitis C as early as 1993, but he was not told until 1997. One medical record states a positive test result and says: ‘Have not discussed with patient or family’.”

Luke is now clear of the disease after successful treatment, but many others involved in the trial have perished. Among them are many from Treloar’s College, a disabled children’s specialist boarding school near Alton, in Hampshire, England, with an NHS haemophilia unit on site.

The BBC reports that the school’s doctor, Anthony Aronstam, who like Machin and Kernoff is now dead, “used his ‘unique’ cohort of boys for extensive clinical trials. One series of experiments considered whether using three to four times more Factor VIII than normally required by a child would help to reduce the number of bleeds he had.”

This “involved repeated injections with infected Factor VIII products and follow-up blood tests. The high concentrations of infected blood products were administered to the boys without their—or their parents’—consent.”

The majority (75) of the 122 pupils attending Treloar’s College between 1974-1987 have died of HIV and hepatitis C infections.

Large numbers of people are living with the consequences of these medical experiments without even knowing it. According to a BBC analysis of statistics submitted to the Inquiry and Freedom of Information requests submitted to infected blood support schemes, “About 1,750 people in the UK are living with an undiagnosed hepatitis C infection after being given a transfusion with contaminated blood.”

If not detected and treated, hepatitis C remains in the body for years, increasing the chances of a horrific death. One of the victims who died last year, Maureen Arkley, was diagnosed with hepatitis C and died five months later of untreatable liver cancer, weighing less than four stone. Maureen had an operation in 1976 involving multiple blood transfusions and was never tested for hepatitis C over the next five decades.

Besides grotesquely unethical “research” motives, financial incentives were at play. In November 1976, the Telegraph writes, “Immuno AG, an Austrian company that was a major supplier to the Department of Health, was seeking a licence change to allow it to supply a blood product from those paid to donate in the US…

“According to the minutes of a meeting of medics in the company, it had been ‘proven’ that there was a ‘significantly higher hepatitis risk’ from a concentrate known as Kryobulin 2 made from US plasma…”

However, “The company had concluded there was a ‘preference’ in the UK for the cheaper US option. The memo of the meeting said: ‘Kryobulin 2 will be significantly cheaper than Kryobulin 1 because the British market will accept a higher risk of hepatitis for a lower-priced product.’”

The paper reports on a letter from January 1981 showing St Thomas’ Hospital in London “was offered thousands of pounds in rebates for buying Factor VIII made in the US by Bayer and Baxter Healthcare.”

“For every 250,000 units purchased, Dr Geoffrey Savidge, director of St Thomas’ haemophilia centre, was offered £400, equivalent to almost £2,000 today.”

Again, the risks were known. “When the first three people with haemophilia came down with AIDS in the US in July 1982,” writes the Telegraph, the Centers for Disease Control (CDC) warned the fatal illness could be caused by a blood-borne agent in Factor VIII.

“In December 1982, Bayer’s Cutter Laboratories discovered chimpanzees had developed AIDS-like symptoms after also being treated with Factor VIII, according to an internal memo. However, the company didn’t warn patients about the potential risks.”

The paper adds, “Revlon Healthcare-owned Armour Pharmaceuticals suppressed evidence from 1985 to 1986 that HIV had been discovered in its ‘safe’ version of Factor VIII, which had been heat-treated to kill viruses.”

Two Conservative governments (1979-1997) and two Labour governments (1997-2010) ensured that a systematic cover-up took place.

The BBC reported how the Inquiry “has also heard how several batches of minutes and background papers involving the work of the Advisory Committee on the Virological Safety of Blood were shredded between 1994 and 1998. The files were destroyed at a time when officials were told there was ‘considerable potential for litigation’ over infected blood and after ministers were charged in France over the scandal in poisoning haemophiliacs.”

In 2019, the Inquiry heard of medical records going missing without a trace for those infected after blood transfusions.

An interim report published by the Inquiry’s Chair Sir Brian Langstaff last year concluded that “wrongs were done at individual, collective and systemic levels” and that parents and children who suffered bereavements as a result of infected blood should receive £100,000 interim compensation payments.

Whether this is acted on by the Sunak government remains to be seen. Even if so, it in no way compensates for the thousands of deaths and decades of ruined lives.

Nor would it see justice done. The Inquiry is governed by the Blair Labour government’s 2005 Inquiries Act, which excludes determining “any person’s civil or criminal liability.”

Alstom plants in eastern Germany threatened with closure

Dietmar Gaisenkersting

At its annual press conference on May 8, French train manufacturer Alstom left the fate of its plants in Hennigsdorf, Bautzen and Görlitz in eastern Germany hanging in the air.

The IG Metall union has been agreeing to job cuts and wage reductions for years. It has organised rationalisation programmes itself, arguing that this was the only way to make these—and other—plants “competitive” in the face of domestic and international competition. Now, 3,700 workers in these plants confront the immediate loss of their livelihoods.

Rally against job cuts at Bombardier in Görlitz, March 4, 2017

Alstom Group CEO Henri Poupart-Lafarge refused to provide clear information at the press conference, only providing hints about what lies in store. The situation was “objectively complex,” he said in a press interview. “There is overcapacity at our sites, which is related to Bombardier’s earlier market losses in Germany,” he said.

A total of 9,600 people work at 13 locations in Germany. Finance daily Handelsblatt quoted the Alstom regional director saying that the capacity utilisation of the German sites was not part of the company’s strategy. Orders went to Wroclaw and Katowice in Poland; Bautzen or Görlitz would then receive what could not be completed there or had to be reworked.

The Alstom plants in eastern Germany had belonged to Bombardier until the end of 2020. After the merger between Siemens and Bombardier failed in 2017, due to objections from the European antitrust authorities, Alstom took over Bombardier’s railway division at the beginning of 2021. At the time, the two companies were considered the world’s No. 2 and No. 3 global railway construction companies. Only the Chinese train manufacturer CRRC generated more revenue from the construction of rail vehicles.

The takeover of Bombardier by Alstom at the beginning of 2021 was the culmination of the concentration process in the railway construction industry for dominance on the global market and was linked to a brutal rationalisation programme to increase profits. Today, the group operates in 100 countries worldwide with around 80,000 employees.

Three years ago, Alstom CEO Henri Poupart-Lafarge offered shareholders the prospect of a “double-digit increase in earnings per share” as a result of “increased efficiency and a stronger operating profile.” From the fourth year after the takeover, “cost synergies totaling €400 million per year” were expected.

These “cost synergies,” i.e., merging and/or closing parts of the business, will take place on the backs of the employees and will be co-organised by IG Metall.

Görlitz and Bautzen, had repeatedly cut jobs, replaced permanent workers with temporary labour, and relocated work processes to low-wage countries such as Poland or the Czech Republic. In 2017, thousands of Bombardier workers demonstrated in Hennigsdorf in defence of their jobs. But IG Metall nevertheless agreed to the loss of 2,200 jobs at the German sites.

In Görlitz, IG Metall went so far as to agree to the piecemeal destruction of more than half of the jobs, which now total just under 700. It used the announcement by the German Bombardier Group management to invest a sum of €8 million in the company to justify the job cuts. However, this announcement was never meant seriously and, in the end, only €1 million was realised.

At Alstom, IG Metall continued in 2021 where they had previously left off at Bombardier—with continuous job cuts and wage cuts in return for worthless promises about maintaining the sites. None of these agreements were worth the paper they were written on.

In December 2021, Alstom announced a programme of cuts in Germany that included the elimination of up to 1,300 jobs. According to IG Metall, the Hennigsdorf site with Hennigsdorf Drives, Görlitz, Bautzen, Siegen and Kassel had “structural and long-term underutilisation.” The union and the General Works Council it heads then engaged management consultants in order to draw up their own plan for the cutbacks that had been “announced by the Group, and realised through productivity increases,” and to prevent the relocation of work to foreign Alstom plants. Under the motto “better instead of cheaper,” the union presented a plan to make the sites competitive for the future instead of unimaginatively letting them face death by a thousand cuts,” writes IG Metall on the background to the current situation.

The union’s willingness to make concessions to the Group management is boundless. The IG Metall statement reads: “In the event that the productivity targets are not met, the resulting gap should be compensated for with contributions from employees that are objectively measured and jointly monitored.”

It was under this plan that the so-called “Future Contract” was concluded at the beginning of April 2023, and which runs for a term of three years. It was cynically named, “Setting the course for greater competitiveness in Germany.”

Specifically, the “contributions of the workforce” in the affected plants amounted to many million euros per year. For the most part, these affect special payments under the collective agreements, primarily holiday pay. If performance-related key figures are achieved, the wage losses will be repaid in the following year, it was said. Alstom stated that it would invest 2 percent of turnover in Germany each year in the German sites, allegedly to increase their competitiveness.

With the end of the zero-interest-rate policy, it was no longer possible to simply finance the debt with cheap loans. In autumn 2023, Alstom announced that it would again cut 1,500 jobs worldwide and sell off assets. This week, the Alstom board also announced an increase in share capital totaling €1.75 billion.

IG Metall complains that it has complied in every respect with the provisions of the “Future Contract” and had provided the company with givebacks covering the approximately 10,000 employees. However, the company had not honoured the agreements, it said, at least not those propagated by the union and the works council. For example, the investment requirement in Hennigsdorf has been reduced from €11 million to around €3.5 million, of which, according to IG Metall, only €600,000 have been released to date. Alstom’s actions are also said to make it impossible to achieve the production targets so that the special payments saved can be repaid.

IG Metall and the works council are also complaining that the employment figures for the individual sites set out in the Future Contract are not being adhered to; in Görlitz 64, in Bautzen 42 and in Siegen 26 fewer employees are to work than agreed. It was also six months overdue for the sites in the Group that are not covered by collective labour agreements to be bound by them.

Until the very end, IG Metall officials and the General Works Council begged for the agreement to be honoured. They appealed to the conciliation committee, but the Alstom management refused to make any concessions.

On the contrary, in February this year it announced a further programme of up to 290 job cuts in Germany. In March, even before the second payment of their holiday pay, 88.1 percent of union members in the affected plants voted in a ballot in favour of terminating the “Future Contract.”

IG Metall and the General Works Council pleaded with Alstom’s management until the very end to give in and implement the agreed measures. However, the company did not even think about it, so the agreement was cancelled last week, according to IG Metall Oranienburg and Potsdam.

IG Metall and its works council representatives were never prepared to put up a serious fight in defence of the jobs, nor are they now. Their only concern has always been to push through the savings with “imaginative” proposals for cuts and nebulous promises, to bolster their role as irreplaceable co-managers. “Without a Future Contract, Görlitz has no prospects,” René Straube, head of the works council at the Görlitz plant and chairman of the general works council, told Tagesspiegel.