Crypto turmoil intensifies as major fund defaults

Nick Beams

The turmoil in the crypto currency market has intensified with the announcement on Monday that the prominent crypto hedge fund, Three Arrows Capital, had defaulted on loans worth a total of $670 million.

The money is owed to the digital asset brokerage firm, Voyager Capital, which issued a notice saying Three Arrows had failed to repay a $350 million loan in the stablecoin USDC as well as about $323 million worth of bitcoin.

An advertisement for Bitcoin cryptocurrency is displayed on a street in Hong Kong, Thursday, Feb. 17, 2022. [AP Photo/Kin Cheung]

Three Arrows’ troubles flow from the crisis in the crypto market that erupted last month when the so-called stablecoins TerraUSD and its sister stablecoin Luna collapsed leading to losses of billions of dollars.

Stablecoins were touted as providing stability for the crypto market because they were supposedly pegged to the US dollar and functioned in a way analogous to chips in a gambling casino that could be cashed in at full value. In May, however, they fell below dollar parity.

Three Arrows had invested heavily in Luna which fell to virtually zero.

As warnings of the impending Three Arrows default spread last week, attention was directed to Voyager Capital with its shares falling by more than 60 percent last Wednesday.

Following the confirmation of the default, Voyager issued a statement aimed at trying to contain fears of contagion throughout the crypto market. Overall market capitalisation has plummeted from $3 trillion last November to around $900 billion—a loss of almost 70 percent.

Voyager CEO Stephen Ehrlich said the company was “working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can meet customer liquidity demands.”

The contagion fear results from widespread borrowings by Three Arrows, one of the largest crypto asset hedge funds, from a range of companies to finance its investments across a number of digital assets. There are fears that Voyager may not be the only company facing large losses.

“What’s to be seen is whether there are any large, remaining players that had exposure to them, which could cause further contagion,” Vijay Ayyar, a vice president at the crypto exchange Luno, told the business channel CNBC.

A recent article in the Financial Times noted: “The deflating bubble in digital assets has exposed a fragile system of credit and leverage in crypto akin to the credit crisis that enveloped the traditional sector in 2008.”

The crypto market has been “sold” on the basis that it provided an alternative to the official financial system which afforded protection against inflation and currency movements. It was even touted as a form of “digital gold.” But its rise over the past decade has proven to be completely dependent on the flow of cheap money from the Fed and other central banks.

Valuations were inflated by a series of complex arrangements and deals—what the FT called “financial gymnastics”—which left “huge towers of borrowing and theoretical value teetering on top of the same underlying assets.”

This inverted pyramid could be sustained so long as crypto prices kept rising, but inflation and the aggressive lifting of interest rates by the Fed has led to a fall in asset prices across the board, prompting investors to withdraw their money.

Some companies are unable to pay up. Earlier this month Celsius Network, which operates as a kind of bank for crypto currencies, announced that “due to extreme market conditions” it was pausing all withdrawals and transfers between trading accounts to place it in a “better position to honour, over time, its withdrawal obligations.”

Since that announcement its position appears to have worsened. The Wall Street Journal reported on Monday that Celsius had hired restructuring consultants from a major firm “to advise on a possible bankruptcy filing.”

The WSJ has also reported that short sellers are “ramping up bets against Tether, the world’s largest stablecoin.” Shorting involves borrowing an asset which is then sold in the expectation that its price will go down. It is then bought and returned to the lender with a profit realised on the price difference.

According to the article, the shorting has been undertaken by “traditional hedge funds” and involves trades worth “hundreds of millions” of dollars.

Tether is the most widely traded stable coin in the world and is supposedly backed by cash, commercial paper, precious metals and government bonds as well as digital tokens.

However, its foundations were shaken in the TerraUSD collapse in May when it broke dollar parity and briefly traded as low as 95 cents.

Since then, according to the WSJ, short sellers have claimed that most of tether’s commercial paper holdings are backed by debt-ridden Chinese property developers.

The company has said “these rumours are completely false” and indicated that hedge funds were “looking to generate returns by creating arbitrage opportunities on the basis of these rumours.”

Be that as it may, the hedge funds may well be operating according to the maxim of the 19th century German chancellor Otto von Bismarck, who said he never believed the truth of any assertion until it was officially denied.

Whatever the position of individual operators in the crypto world, the plunge in market valuations is being driven by the shifts in the financial system as a whole.

While the value of the main crypto currency, bitcoin, has stabilised at around $20,000, down from near $70,000 last November, this may only be a temporary pause.

“The risk of contagion in the crypto markets remains elevated,” Marion Laboure, a senior strategist at Deutsche Bank told the FT.

“A tightening Fed will expose more crypto firms with excess credit risks by withdrawing liquidity and raising rates, which will depress the value of the coins on which many of these levered schemes depend,” she said.

It is not only the crypto market that is being impacted by the sea change in financial conditions. The tech-heavy and interest sensitive NASDAQ index is down more than 30 percent from its record highs, with the fall in the price of significant stocks down by much larger amounts.

Shares in the television streaming service Netflix are down 75 percent from their 2021 highs. Shares in the crypto currency exchange operator Coinbase, whose public listing in April last year was accompanied by great fanfare with a market valuation of $47 billion, have plunged by 86 percent. Share in the cinema chain AMC, once touted as a so-called meme stock in early 2021, have dropped by 80 percent.

Medical contrast dye shortage forces delays in diagnostic and surgical procedures

David Rye

Disruptions to the global supply chain, greatly intensified since the start of the pandemic, have affected multiple industries including the health care sector, which is currently suffering from severe shortages of Omnipaque.

Omnipaque, the brand name of Iohexol, is an iodine-based dye that is used to create contrast in soft tissue scans. It is a critical tool in CT scans and diagnostic procedures, as well as in preparation for surgeries. Iohexol is crucial to diagnosing and treating strokes, aneurysms and cardiac conditions, and is an essential resource for hospitals.

Initial reports anticipated an 80 percent reduction of the supply of Omnipaque for approximately two months. Within the last month, hospitals in North America were sent scrambling for this critical resource and carefully rationing it, delaying diagnosis and treatment for medical conditions. While the shortage was originally expected to abate within the next couple of weeks as production has resumed, hospitals are preparing for sustained shortages through the summer.

A patient has a CT scan at the Ajusco Medio General Hospital in Mexico City, Tuesday, Aug. 31, 2021. (AP Photo/Marco Ugarte)

The shortages of Omnipaque are a devastating exposure of the irrationality of capitalist production, and a testament to the brutality of a profit-driven health care system. Furthermore, this shortage revealed the weakness of a nationally based Zero-COVID policy, as it was used to intensify international pressure against the Shanghai lockdown.

On May 16, the American Hospital Association (AHA) wrote a letter to General Electric (GE), which manufactures half of the global supply of Omnipaque, requesting that hospitals that specialize in strokes and cardiac conditions be prioritized in distribution. In the same letter, the AHA places blame for the shortages on China and the Zero-COVID policy.

“The recent shutdown of the GE production plant in Shanghai due to COVID-19 raises significant concerns about Omnipaque product availability. Those concerns were exacerbated by the fact that the vast majority of Omnipaque products are produced only at GE’s Shanghai plant.”

The shortage is not the fault of China or the Zero-COVID policy. Unstable supply chains have occurred throughout the pandemic, but at no point were preparations made on an international scale for potential shortages of critical medical resources.

Under pressure from GE and hospitals, the GE plant that manufactures Omnipaque was partially reopened during the lockdowns, operating with only a third of the workforce in a closed loop system. At that point, Omnipaque was being produced at 25 percent capacity. GE indicated that the plant was further reopened to operate at 50 percent capacity two days after the AHA’s May 16 letter. Production increased to 60 percent capacity on May 21.

GE also indicated that they have moved production of Omnipaque to Cork, Ireland, where that plant is operating at expanded capacity. However, the Ireland plant is only capable of producing a fraction of the supply of dye that the Shanghai plant produces.

In GE’s reply to the AHA, they wrote, “All of our customers, irrespective of contract, are able to source supply from alternative vendors if available.” Irrespective of the shortage, the health care system is so beholden to pharmaceutical monopolies that they can be bound by contracts limiting where they can acquire critical resources.

As if the shortage were not already dire, Vizient, a distributor in the hospital supply chain, wrote in their Omnipaque shortage mitigation strategy document, “Iopamidol (Isovue) [an alternative to Omnipaque], manufactured by Bracco Diagnostics, accounts for the second largest market share, but is not currently accepting new clients.”

With the reopening of Shanghai, after successfully beating back the outbreak of Omicron BA.2, production of Omnipaque has resumed at full capacity. Ultimately it was the Zero-COVID policy’s effectiveness in defeating the COVID-19 outbreak that allowed production of Omnipaque to resume. However, demand continues to severely outpace supply. According to Alberta Health Services (AHS), on a weekly basis the AHS system conducts roughly 5,000 scans that require Omnipaque.

GE’s June 16 update indicated that they have been operating at full capacity in Shanghai since June 8, several weeks of shortage are still anticipated and countless procedures have already been delayed and are continuing to be. Alberta Health Services estimated that roughly 2,400 procedures have been delayed as of June 18.

Regarding procedure delays, Dr. Janice Johnston of Redirect Health in Arizona told ABC, “For someone who’s been undiagnosed, we want to get at the problem quickly; making sure we get these tests done as soon as possible is always the best scenario.”

The medical supply chain has demonstrated its weaknesses, but the pharmaceutical industry will do nothing to prepare for the next medical supply shortage. As the WSWS wrote on the baby formula shortage, it is “not a mistake or a product of unforeseen circumstances” but the result of a society controlled by a profit-driven ruling elite.

The supply chain disruptions that have impacted critical medical resources are a testament to the necessity of an international strategy to eliminate COVID-19 and end the pandemic, and a rationally planned economy based on human need, not profit.

It also demonstrates the limits of a nationally based Zero-COVID strategy, as international pressure was brought to expand production of Omnipaque during lockdowns. What is necessary to prevent further medical supply shortages, and for the elimination of COVID-19, is a scientifically, democratically planned economy.

Dear Silent Indians

Bhabani Shankar Nayak

Monkeys

The majority of Indian citizens are witnessing the persecution and everyday violence against their fellow citizens who are Muslims and religious minorities. The growing assaults on reason, science, secularism, Indian democracy and constitution are going to be landmarks in Indian history of diminishing democracy and citizenship rights. It is clear that Hindutva ideology is directly promoting sectarian politics of hate which is dangerous for the unity and integrity of India, peace and prosperity of Indians. The majoritarian silence helps in empowering Hindutva and their electoral dividends. From witnessing the persecution in the sidelines to the active participation and cheering loud or silence accelerates violence against our neighbours and our fellow citizens. How and why do majority of Indians stay silent and contribute to the persecution of their fellow citizens who are Muslims and religious minorities? The question baffles me as an Indian because I have grown up in a truly beautiful secular India where intercultural and religious harmony was its hallmark. In spite of all forms of existing inequality and exploitation, hate was not celebrated in Indian mainstream society.  Majority of people used to oppose and condemn public violence in all forms.

The propaganda, media manipulation, anti-lower caste and class, anti-Muslim and anti-Christian prejudice and Hindutva symbolism in the name of Indian nationalism and Hindu religion socialises the masses and normalises violent persecution of innocent citizens of India. The conformation with power, prejudice, innocence, ignorance, and fear of power and caste-class opportunism are reasons behind this silence acceptance of injustice. Perhaps, more than one century of Hindutva propaganda has managed to achieve its objective of normalisation of violence against religious minorities in India. The Hindutva government patronises its own ideology and moving India in a direction of visible destruction. Amoral Hindutva despotism is a product of century long initiatives in different spheres of social, cultural, religious, political and economic life of the country and its citizens. The common, innocent and gullible Indians assisted the expansion of Hindutva forces and their organisations without knowing their toxic ideology of hate.

Many Indians still share the belief that Hindutva is a nationalist force and working for a developed India. In reality. Hindutva is a fascist force and working for the growth of crony capitalism in India where few corporations will control the economic and political life of India.  The Hindutva forces have entered into every sphere of Indian national life to control the society, culture and religion in India within the narrow vision of Hindutva. The Hindutva ideology and its organisations are powerful enough today to follow the intimidation tactics to enforce the politics of persecution through electoral means. The next stage is going to be open and mass violence against religious minorities and anyone who opposes such a medieval force called Hindutva. The European fascism in the form of Hindutva awaits India and Indians if there is no mass movement against it.

Majoritarian silence does not help the cause of India and Indians. The peace, prosperity, economic growth and development depends on social harmony. The silence does not protect citizenship rights, dignity, jobs and career. The majoritarian silence surrenders all achievements of Indians to a reactionary Hindutva force that is working to handover all national resources to capitalist corporations. Muslims, Christians, indigenous communities, human rights activists, journalists and intellectuals are persecuted today, and majority of Indian will be persecuted tomorrow. It is a matter of time before Hindutva hell fire engulfs us all. Our survival, rights and dignity depends on our collective resistance against a small group of Hindutva fascists who are on streets today to destroy the India we love. Hindutva is still a small minority of individuals, organisations and networks if we compare India’s total population. Our silence is their strength. It is time to free ourselves from the prison of fear and silence for the sake of Indian Muslim and for ourselves. Any persecution of Muslim population by Hindutva is a persecution of all Indians. Hindutva can be defeated for the survival of India and Indians. Hindutva is now looking for ways to further expand its base and ideology. Our peace, prosperity and dignity as a nation depends on the defeat of Hindutva from every sphere of life in India.

UK COVID-19 cases rising again, as monkeypox spreads and Polio re-emerges

Steve James

A third wave of infection from strains of the Omicron variant of SARS-CoV-2—Britain’s fifth COVID wave—is pushing infection, hospitalisation and death rates up again.

Last week, according to Office of National Statistics (ONS) figures, 334 people were killed, nearly 6,000 people were admitted to hospital and an estimated 1.7 million people were suffering from some level of infection. This is around 1 in 35 of the population, although there are regional variations with Scotland reporting 1 in 20 infected and Northern Ireland 1 in 30. Rates of infection were on average up by 23 percent on the previous week.

Nearly two and half years after the World Health Organisation issued a public health emergency warning about a novel coronavirus, the WHO estimates 15 million people have been killed by COVID-19. Most of these deaths were avoidable and can be directly attributed to the refusal of governments worldwide to pursue the necessary policy of COVID elimination. Nearly 200,000 deaths have occurred in the UK. Despite relatively high levels of vaccination, over 53 million have received at least one dose and over 50 million have had at least three jabs, COVID-19 remains a potentially deadly and debilitating disease.

The current wave is largely due to the BA.4 and BA.5 subvariants of Omicron, now reported to make up more than half of new cases. Transmission of the new variants is likely to have been accelerated by the British monarch’s platinum jubilee. Millions of people attended mass events between June 2 and 5 and COVID prevalence increased by 43 percent in the following week.

Professor Tim Spector of the ZOE Covid symptom study app told the Independent, “We’re heading towards a quarter of a million cases a day. The question is whether it stops and comes back again, everyone is predicting an autumn wave but I don’t think anyone predicted this summer wave—that’s the difference.

“None of the modelling allowed for this, it didn’t take into account the effect of BA.5 variant which is dominant now.”

Mathematics lecturer Kit Yates told the Independent SAGE scientific advisory group June 17, “It is pretty much official from the latest ONS data that the UK has entered the next wave of COVID. It is most concerning to see that there has been an increase in COVID infections in older age groups and in the 50-59 age group who have not been offered another booster yet.”

Even for the over-75s offered a fourth shot, one fifth have not received it. Professor Rowland Kao, an epidemiologist at the University of Edinburgh, commented, “Certainly, in my view, the message about ‘getting back to normal’ does have the impact of reducing the urgency of getting those fourth doses out.”

While hospitalisation rates are still lower than in April, at the peak of the BA.2 surge when over 16,000 people were admitted, the British Medical Journal (BMJ) reported that the rate of increase is greater than during the previous surge.

Doctor Deepti Gurdasani, senior lecturer and clinical epidemiologist at the William Harvey Research Institute, Queen Mary University of London, told the journal June 20, “Given where we are in terms of NHS pressure and long covid impact, any increase at this point from a high baseline will put further pressure on an NHS that’s already struggling to provide safe and urgent patient care, and will likely continue to lead to even higher levels of long covid.”

Both subvariants are thought to spread more easily than their predecessors, Omicron BA.1 and BA.2. Writing in the same edition of the BMJ, Christina Pagel, director of the Clinical Operational Research Unit, warned that so far in 2022 there had already been two waves of Omicron infection peaking in January at 7 percent of the population infected and in late March at 8 percent.

Pagel predicted a new peak late June and into early July, although because such huge numbers had been infected in the previous Omicron waves, some residual immunity might offer additional protection. Nevertheless, Pagel wrote, “While omicron might be somewhat less severe than delta, and people have higher immunity through vaccination and previous infection, it is not mild. At a population level, its sheer transmissibility more than compensates for any reduction in experienced disease severity or symptoms for the individual.”

Pagel warned of more workplace disruption because of high sickness rates, additional pressures on the NHS, longer waiting times for ambulances and in Accident & Emergency and record numbers of people awaiting routine treatment.

More people will also get Long COVID. Pagel noted the ONS had recorded as many as 600,000 people reporting persistent symptoms from infection with the Omicron variant alone. Overall, there are 2 million people with Long COVID, over 800,000 for more than a year and 376,000 for over two years. Five percent of workers in healthcare report ongoing symptoms, while 10,000 NHS workers have been laid low for more than three months with long COVID.

In the face of this ongoing public health danger, from the disease itself and the consequential collapse in health provision, the response of the British ruling class has been to press on with ending whatever minimal mitigation measures have remained in place.

Professor Jill Pell, director of Glasgow University’s Institute of Health & Wellbeing, warned the Scottish parliament's COVID-19 Recovery Committee that three of four “prongs” to curb infection have been removed.

“We have taken away the non-pharmaceutical interventions, such as the requirement for social distancing and mandatory facial coverings. We have also removed access to mass testing—that needs to be acknowledged—and we have removed the idea of having a supported shielding list. Therefore, we are left solely with vaccination.”

The Scottish National Party government responded with criminal complacency, with First Minister Nicola Sturgeon telling people to “be sensible and take precautions”, suggesting they wear a face covering in crowded indoor places while stressing it was no longer “a requirement”.

All COVID restrictions were removed in Wales in May. Labour First Minister Mark Drakeford claimed at the time, “we can move beyond the emergency response while still living safely with this virus.”

Professor Sir Jonathan Van-Tam, until recently deputy chief medical officer, summarised the Westminster government’s response. He told the BBC, “We just accept in the winter that, if you’ve got seasonal flu and you're poorly for a few days, it disrupts your life. And so I think we’ve got start to frame COVID in a little bit more of those terms,” adding, “people have got to learn to frame those risks for themselves.”

Even as the COVID pandemic enters a new surge, Britain is seeing a rise in monkeypox cases and the re-emergence of Polio. There are 910 recorded cases of monkeypox—the bulk in London—with those affected reporting delays in the testing, tracing and vaccination response. Paul Hunter, professor of medicine at the University of East Anglia, commented, “At the moment there is no clear evidence that the current epidemic is coming under control.”

Last Wednesday, the UK Health and Security Agency announced evidence of polio transmission in London, declaring a national incident. Britain was declared polio-free in 2003. But the UKHSA is not planning on testing sewage nationally to establish its prevalence. Professor David Salisbury, from the WHO Global Commission for Certification of Polio Eradication, warned, “Without extensive national environmental poliovirus surveillance, it is not possible to know if this problem is more widespread.”

Bird flu, Lassa fever and Crimean-Congo haemorrhagic fever have all been detected in the UK this year. Professor Mark Woolhouse, University of Edinburgh professor of infectious disease epidemiology, told the Daily Telegraph Sunday, “The early 21st century has been a perfect storm for emerging infectious diseases, and everything is pointing towards the likelihood of more and more outbreaks. All the drivers of outbreaks are getting worse, not better, over time.”

Criminal barristers join UK summer of discontent

Robert Stevens

Criminal barristers in England and Wales began strike action today demanding a 25 percent increase in fees paid for legal aid work. Under Britain’s legal aid system, the government pays for barristers so that those who cannot afford lawyers are able to receive representation and professional advice.

Decades of cuts to legal aid have led to an exodus from the profession, with criminal barristers in their first three years earning as little as £12,200 annually for a 70-hour week. One quarter of all criminal barristers have left the profession in the last five years. Those who remain face impossible caseloads and a legal aid system at breaking point.

Around 2,000 criminal barristers will strike two days this week, rejecting what the Conservative government falsely described as a 15 percent offer. They will strike three days next week, four days the week after, and five days from July 18 to 22.

Criminal barristers outside the Old Bailey in London during the day of action, June 27, 2022 [Photo by @anniemannion/Twitter]

Action will resume on August 1 with a five-day walkout and strikes every other week until their demands are met. “Day of Action” protests were held today outside London’s Old Bailey criminal court and at crown courts in Manchester, Leeds, Bristol and Cardiff, with further protests to follow.

The strikes were sanctioned by the Criminal Bar Association (CBA) on June 17, after a ballot of its 2,400 members showed 81.5 percent support for court walkouts, a boycott of new instructions and barristers adopting a “no returns” policy—refusing to take on work where the original barrister is unavailable. A no returns policy has been in place since April 11.

Barristers are demanding urgent measures to repair a dysfunctional system. There is currently a backlog of 60,000 cases in the crown courts alone and funding cuts are so deep they have effectively stripped clients of their right to legal representation.

Between 2010 and 2015, the Conservative government slashed £2 billion from legal aid for criminal and civil cases, prompting the first strike in history by criminal defence solicitors in England and Wales on July 1, 2014. Thousands of probation staff, members of the National Association of Probation Officers (NAPO), held a one-day strike in March that year against the privatisation of services.

Barristers protested again in 2018, refusing to accept legal aid cases under the fee schemes, disrupting courts in England and Wales. A further strike was only averted when members of the Criminal Bar Association voted by a wafer-thin margin of 51.55 percent to 48.45 percent to accept a £15 million offer from the Ministry of Justice (MoJ) to raise payment rates for reading evidence and documents in trials. An independent review into the legal aid system was promised whose ineffectual findings were delayed.

When the pandemic hit, courts were forced to close in March 2020. But barristers speaking to the World Socialist Web Site stressed the breakdown of the criminal justice system was already well advanced, with a 40,000 backlog of cases.

Justice Minister Dominic Raab has sought to demonise barristers, declaring with utmost cynicism, “Their actions will only delay justice for victims”.

According to the “Secret Barrister”, whose anonymous first-hand accounts of life as a criminal barrister became bestsellers on UK book charts, claims of a 15 percent increase are “a scam. It is actually closer to 6 per cent, and he [Raab] is refusing to apply it to ongoing cases, insisting that it will only attach to cases that begin in October 2022.”

While barristers are exploited and burdened with impossible workloads, resulting in a 41 percent resignation rate among first year criminal barristers, the Secret Barrister explained the dispute “is about so, so much more… Every part of the system has been slashed to the bone.” A quarter of Crown Prosecution Service employees, twenty percent of court staff and 43 percent of courts nationwide have been closed or sold off.

The result is that “Legal aid has been removed from swathes of the population… The conditions in which the courts operate are, put simply, hideous.”

The cuts to legal aid are part of a raft of anti-democratic legislation being enacted by the Tory government. Last week Raab presented his misnamed Bill of Rights that is set to replace and eviscerate key provisions of the Human Rights Act following Brexit. Home Secretary Priti Patel has authored a raft of ever more draconian legislation, including the Nationality and Borders Act and the Police, Crime, Sentencing and Courts Act. Her latest assault on democratic rights is the National Security Bill. Further anti-strike legislation is being prepared.

The barristers’ strikes take place just days after national rail and London tube strikes by 50,000 workers. They are part of broadening resistance throughout the working class to the government’s onslaught on jobs, conditions, living standards. As with rail workers, barristers face threats to their livelihoods for resisting cuts to pay and conditions.

According to the Financial Times, “Ian Burnett, lord chief justice for England and Wales, has said in an internal note to judges that if barristers do not attend scheduled court hearings after accepting instructions from a client, ‘this may amount to professional misconduct’. More than 70 Queen’s Counsel wrote a letter to the Times describing Burnett’s note to judges ‘as an attempt to intimidate us’”.

A WSWS reporter spoke to striking barristers outside Manchester Crown Court in the city’s Crown Square.

Rebecca Filletti, a barrister for 13 years at Garden Court North Chambers in Manchester, said, “Basically the criminal justice system has been decimated to the point that in the last five years 40 percent of criminal juniors have left, so there aren’t the juniors coming through the ranks. It means we are short of barristers, short of QC’s and of the future judiciary. It means that people who are either defendants who are accused of offences, or complainants who want justice to be done and want their cases to be heard, it simply isn’t happening.

Claire Ashcroft (left) and Rebecca Filletti (right) [Photo: WSWS]

“A lot has been said about how COVID has led to delays. Actually, the reason there is such a backlog in the courts; the complainants in a rape case now have to wait 1,500 days for their case to be brought to trial; those delays aren’t because of barristers. Those delays are because so many court buildings have been sold off, and judges’ sitting days were decreased, so there isn’t the capacity. So, the backlogs were huge even before COVID.

“I’m dealing with an allegation of sexual assault case, and we were all ready for a second trial listing last November. The barristers were all prepared, the complainant was there, the defendant was there, other witnesses there, and they just could not find a court room. They rang all court rooms in the North West and nothing was available. That trial has now been put off until November, put off a year. And who knows if it will find a court room then. With this unending backlog we’ve got a defendant on bail because of the government just rinsing money out of the justice system and not putting any money into it.

“This government has repeatedly called us ‘lefty lawyers’ and criticises lawyers in general and doesn’t see their worth and doesn’t see that without a functioning justice system you have no society. So, when they criticise us and don’t put any money into the system and have the audacity to blame us for delays which are entirely of their doing, which they’ve managed to hide from under COVID, and now they come back and say that we are the ones who are responsible for further delays, its scaremongering and failing to appreciate what they’ve done to the system.”

Our reporter recalled Prime Minister Boris Johnson’s denunciation of “lefty lawyers” in relation to their challenge to the government’s barbaric policy of sending asylum seekers to Rwanda, in defiance of international law.

Rebecca said, “Exactly, as opposed to appreciating that it’s about upholding the rule of law. We have a justice system that for years has been one that other countries aspire to, and that is because we have well trained lawyers who are independent from the state and will look after individual rights. And we need to protect that because the other option is a politicised justice system isn’t it, and you end up with a police state where they can do whatever the hell they want. You can see this already with immigration.”

Claire Ashcroft, a barrister for 21 years, said, “As we are all self-employed, we are not calling it a strike but days of action. But in everything but name it is a strike.” She explained, “Since 2006, incomes have declined by closer to 28 percent. The main reason is because it’s not inflation linked. In essence, back before either of us started practice we had implemented a graduated fee scheme, so rather than being paid an hourly rate, we are paid on the nature and seriousness of the case, how many days it’s going to be in court. Some of the volume of the case might be reflected in the payment as well. If you have got 100 hundred pages or 2,000 pages, you may, but it’s not guaranteed—be paid slightly more because you have a bigger case in terms of volume.

“Those figures are based on, I think, 1999 practice, and it was revised again in 2006. Since then, there has not been any improvement. There has been a rejigging, so in some cases the payment has gone up and for others it’s gone down, so overall it’s stayed the same. In real terms it’s declined.”

Rosalind, a junior barrister began work 18 months ago. She said, “The reason this is happening is because legal aid [fees] on criminal cases are too low. So junior barristers are on about £12,200 a year for the first three years of practise, that’s the median income. That’s what the action’s about. There aren’t enough criminal barristers to do trials. Last year over 560 trials fell through because there aren’t enough barristers to do it. I’m a junior barrister and in the first three years of practise, we can expect to get about £12,200 a year and that’s not sustainable. I’m working 50 or 60 hours a week and that’s far less than minimum wage. So, people are leaving. I think 40 percent of junior barristers have left in the last five years because we can’t stay.”

Rosalind (left) and Mira Hammad [Photo: WSWS]

Mira Hammad is a criminal inquest and inquiry barrister at Garden Court North Chambers. She is currently instructed as part of a team representing bereaved families at the Manchester Arena Inquiry, is part of a team representing clients bereaved as a result of the COVID-19 pandemic and is seconded part-time to the Hickman Rose Grenfell Inquiry Team, which represents the bereaved, survivors and residents.

Mira said that due to underfunding, “The bar is going to go backwards. What you find now is that a lot of young barristers like me are coming into a profession. But because of the way legal aid is going, only privileged people are going to be able to work in a professional career like this. That’s going to mean the minimal representation of people like me in the bar is going to go backwards.”

Australian universities further integrated into military build-up

Eric Ludlow

There is an accelerating drive to incorporate Australian universities into the military apparatus.

The push for institutions to sign lucrative deals with defence contractors is part of the Australian ruling elite’s role in the US-led confrontation with China, which Washington is rapidly intensifying, even as it wages a proxy war against Russia in Ukraine. 

Rheinmetall’s Mission Master autonomous unmanned vehicle [Credit: Rheinmetall AG]

This drive is being deepened under Australia’s Labor government. During its first five weeks in office, Labor has already threatened Pacific Islands nations against turning to China and sought to line up countries throughout the region behind the US war preparations.

A central component is AUKUS, a military pact with the US and Britain unveiled with bipartisan support last September. It involves a substantial expansion of offensive military capabilities, including Australia’s acquisition of nuclear-armed submarines and hypersonic missiles.

The universities are playing a key role in developing these weapons of war.

Founded in 2014 by the Australian Defence Department’s Defence Science and Technology Group (DST Group), the Defence Science Partnership (DSP) has now been signed by all 37 public universities. The DSP was set up to “provide a uniform model for universities to engage with Defence on research projects.”

Universities are signing agreements with the world’s largest arms manufacturers at a rapid rate.

In January, the Australian government announced a Defence Trailblazer Concept to Sovereign Capability program—a $242 million package aimed at the “commercialisation” of universities through their partnership with military companies.

The program’s focus is researching quantum technologies, hypersonics, cyber warfare, robotics, artificial intelligence and space warfare.

Among the first two universities to join the program in April was the University of Adelaide (UoA). Solidifying South Australia as a hub for Australian military research, the UoA in conjunction with the University of New South Wales (UNSW) will match the government’s $50 million contribution for its military research and development alliance with companies.

The program is chaired by the US-based Northrop Grumman, the world’s fourth largest military weapon company. Northrop Grumman Asia Pacific manager Christine Zeitz said: “The Defence Trailblazer will transform the nature of the relationship between the academic sector, defence industry and the Department of Defence, compelling universities to pivot outwards towards entrepreneurial and commercial outcomes-driven collaboration.”

UNSW Vice Chancellor Attila Brungs boasted: “We have a proud track record at UNSW of quantum, cyber, hypersonics, robotics and space technology research which are supporting Australia’s national capability.”

The UK’s BAE Systems, the seventh largest global arms manufacturer, joined the “trailblazer” in April, pledging its Red Ochre Labs R&D centre, which employs 500 people across Australia, to develop air, land, sea, space and cyber technologies.

The Defence Innovation Partnership—a collaboration between the DST Group and South Australia’s three public universities—granted $150,000 funding each for five research projects linked to military contractors. Among the projects is a one led by Flinders University and electronic warfare company DEWC Systems to address design challenges in war games.

On January 25, the then Defence Minister Peter Dutton opened a new $14 million purpose-built hypersonic research facility in Brisbane, Queensland. With 60 staff, the centre is yet another joint venture between government, universities and defence companies.

Hypersonic weapons travel up to five times faster than the speed of sound, allowing them to bypass existing missile defence systems, as well as hunt down long-range missiles.

Research on hypersonic flight has been conducted for over a decade, through the Hypersonic International Flight Research Experimentation program (HIFiRE), established in 2007. It involves the DST Group, the University of Queensland, the US Air Force Research Laboratory and defence contractors BAE Systems and Boeing.

Following from HIFiRE, in 2020 Australia and the US began to test hypersonic cruise missile prototypes under the Southern Cross Integrated Flight Research Experiment (SCIFiRE).

The University of Southern Queensland (USQ) was in March granted membership to the federal government’s Defence Industry Security Program (DISP). The university has already been involved in defence research into hypersonic propulsion systems, rocket fuel development, machine vision and advanced materials.

USQ works with DST Group as well as the US Airforce and Navy, Boeing and BAE Systems. In an Australian article, USQ Deputy Vice-Chancellor John Bell wrote that all three of the university’s campuses “are in close proximity to South East Queensland’s strong defence presence … enabling USQ to work directly with defence end-users and boost Australia’s sovereign space and defence capability.”

German defence company Rheinmetall announced late last year that, in partnership with Queensland University of Technology and the Royal Melbourne Institute of Technology, it had developed a new Autonomous Combat Warrior “Wiesel” craft.

According to the German magazine Europäische Sicherheit & Technik, the vehicle is designed to understand soldier behaviour, recognise terrain and make tactical decisions in combat situations.

At the beginning of 2022, Victoria’s Deakin University signed a $5.13 million contract with the federal government to provide naval firefighting training. “Deakin University has executed more than 165 contracts with the Australian Defence Department, highlighting the important role our region’s institutions can play in driving innovation and generating cutting-edge capability in support of the ADF,” Victorian Liberal senator Sarah Henderson said.  

In mid-2021, Deakin University was awarded the Australian War College contract, taking over in January 2023 from the Australian National University (ANU) as the provider of the Australian Command and Staff Course and Defence Strategic Studies Course.

Led by the University of Sydney, nine Sydney universities were last year awarded $2 million to work as part of the Australian-United States Multidisciplinary University Research Initiative (AUSMURI).

University of Sydney Deputy Vice-Chancellor Duncan Ivison said the program was one which “the US and the Australian defence departments support and monitor at the highest levels because they are so targeted to our defence priorities.”

AUSMURI has already held talks with defence companies GE, AmericaMakes and world number one arms manufacturer Lockheed Martin, as well as the DST Group and the US Department of Defense.

Students and young people have to oppose the transformation of the universities into hubs of war preparation, which goes hand in hand with their commercialisation and an assault on learning.

Bolsonaro and Workers Party seek support of US imperialism as Brazil’s presidential elections near

Miguel Andrade

With Brazil’s October general elections approaching, the two main presidential contenders, fascistic President Jair Bolsonaro and former Workers Party (PT) president Luís Inácio Lula da Silva, are competing to convince national and international capital that each is the most reliable defender of profit interests against the impoverished Brazilian working class.

Jair Bolsonaro, Luiz Inacio Lula da Silva [AP Photo/Andre Penner [Lula]; Marcelo Camargo/Agência Brasil [Bolsonaro]]

The PT’s and Lula’s opposition to Bolsonaro are founded not on any desire, much less ability, to solve any of the pressing issues facing workers—a raging pandemic, spiraling inflation and mass unemployment and poverty. They have always opposed Bolsonaro as a liability for Brazilian capitalism. His overt contempt for workers’ lives and living standards and his open preparations to take power by force in case of an electoral defeat expose all the brutality of the country’s profit system. This in turn threatens to provoke a mass reaction from below, as in neighboring Chile, Colombia and now Ecuador, calling into question capitalism itself.

Much attention has been given by the Brazilian corporate press and Congressional parties in the last weeks to a June 11 Bloomberg report of a leak from the White House, saying that Bolsonaro told Biden he would defend “US interests” in Brazil, in opposition to Lula, who would defend “Brazilian interests,” which presumably, means neutrality in face of the US war preparations against China, as well as the current NATO proxy war against Russia.

Lula’s campaign coordinator, Senator Randolfe Rodrigues, reacted to the news with a nationalist, right-wing rant. He once again appealed to Bolsonaro’s own military base, declaring the president should be charged with high treason for seeking electoral interference by a foreign power. The ominous implications of US interference for workers’ democratic and social rights, including the history of US-backed coups in Latin America and its countless victims, was completely ignored.

In what has become a ritual in the Brazilian media reporting and official opposition statements, the Bloomberg report has been treated as further evidence that Brazilian democracy is thriving, with the exception of Bolsonaro himself. Without citing any evidence, Globo pundit Valdo Cruz argued that the White House leaked the report to mark its distance from Bolsonaro and his preparations for an electoral coup and, in turn, that such “distancing” would guarantee a peaceful transition of power after October’s election. In the words of Lula’s former chief-of-staff José Dirceu, “there will be no coup because of the lack of international support for an event of this kind.”

Dirceu’s statement embodies the PT’s entire attitude towards Bolsonaro’s plans for dictatorship: they must be opposed not in the name of social and democratic rights of Brazilian workers, but because they are “bad for business.” What the PT offers, in turn, is loyalty from unions and the so-called “social movements” in achieving “internal stability.”

Virtually ignored by the media was a Reuters report from May 25 that the PT sent its last defense minister, Jaques Wagner, for an undisclosed meeting with US State Department officials to discuss prospects for a third Lula government. Officially, Wagner went to the United States to speak in Lula’s name at the so-called “Brazil Conference” organized yearly by Brazilian students at Harvard and MIT. Wagner, who is a senator but holds no official foreign relations capacity in the Brazilian Congress, has also met with French, and US ambassadors for similar discussions.

The PT’s promotion of the US and other imperialist powers as the guarantors of democracy in Brazil is a criminally dangerous policy. Given the US-backed 1964-1985 military dictatorship, this claim is absurd on its face. The PT, which was founded in the wake of the mass struggles against this regime, long ago transformed itself into the foremost instrument not to reform, let alone abolish Brazilian capitalism, but to defend it against the Brazilian working class. The PT is single-minded in hiding the real dangers facing Brazilian workers because it fears a working class rebellion far more than it fears Bolsonaro and his fascist supporters.

Claims of US “support” for democracy in Brazil, drawn from a handful of White House press conferences and State Department leaks, are even more preposterous in face of the intractable crisis facing world capitalism, expressed most intensely in the United States itself. This crisis was the source of Donald Trump’s January 6 putsch, which enjoyed significant support within the political establishment and military apparatus. It is also the driving force behind the US imperialist offensive against Russia and China, threatening World War Three, in which Latin America features as a key battleground. This global crisis is driving US imperialism to renew its aggression against multiple Latin American countries, including its crippling sanctions against Venezuela, the 2019 coup in Bolivia and the tight grip it maintains over Colombia.

The rationale behind Bolsonaro’s advanced preparations for dictatorship was laid out late last month in a repulsive and threatening document presented by a group of ultra-right military think-tanks, with the backing of Brazil’s vice-president, Gen. Hamilton Mourão, and top intelligence officials. Titled “Nation Project, Brazil in 2035,” the document proclaims the need to “neutralize the political and social power” of “radical … ideologies that divide the nation” in order to provide the country the cohesion needed to assert itself in the geopolitical arena dominated by the conflict between US and China.

The document unapologetically embraces a fascist worldview in which “globalism” is the greatest threat to Brazil. In language reminiscent of the “Protocols of the Elders of Zion,” it asserts that Brazilian capitalist institutions are plagued by a “globalist” outlook and must be purged. Written in the form of a results and perspectives document from a hypothetical Brazil in 2035, it portrays as a major achievement the establishment of a an unelected “center of government” (presumably headed by the military) that oversees the president.

An attack on the justice system, and the Electoral Court (TSE) in particular, consciously laid out in the military manifesto, are the central tenet of Bolsonaro’s preparations for a coup. The president has repeatedly fabricated claims that the Electoral Court is actively preparing electoral fraud to benefit the PT.

Bolsonaro’s cabinet is escalating attacks against the TSE, with Defense Minister, Gen. Paulo Sérgio Oliveira, publicly denouncing it for “disrespecting” the military and “ignoring” the observations made at the request of the TSE itself over the safety of Brazil’s electronic balloting system. Last week, Oliveira declared the military would not discuss its “concerns” outside of exclusive meetings with the Court, which bar other bodies constitutionally allowed to oversee the elections, such as the Brazilian Bar Association (OAB). Three days later, Justice Minister Anderson Torres made the same demand on behalf of the Federal Police, setting the stage for a public refusal by both the Army and the Federal Police to recognize ballot results proclaimed by the TSE.

In face of the unprecedented offensive by the Executive against the TSE and the revelations that government officials have laid out a plan to destroy any opposition after the October elections, the PT’s reaction is centered on the spineless appeal for Lula to be elected on the first round, in order to “discourage” Bolsonaro supporters from acting on the president’s announced challenge to the results.

As for the PT electoral program’s promises of “reforms,” the party has made clear to big business that they are not worth the paper on which they are printed. For every time Lula promises to “lift” a crippling federal spending cap imposed by a Constitutional amendment in 2017, he repeats that businessmen know he has always been “fiscally responsible,” recalling the austerity measures imposed from the start of his government, such as the pension reform that led to an internal purge in the PT.

For every time he claims to oppose privatizations, he repeats that he has “never broken a single contract,” that is, that no private profit will be touched in large mixed capital companies such as Petrobras.

In fact, the issues listed by the fascist military manifesto are the same as those advanced by the PT as fundamental in its opposition to Bolsonaro, chiefly Brazil’s perceived diplomatic isolation and geopolitical weakness, and his inability to maintain “internal security.” The PT is fully aware that increasing Brazil’s share of world markets and geopolitical assertiveness require brutal austerity and exploitation of the working class, which cannot be achieved without the suppression of social opposition.

As opposed to Bolsonaro, it promises national and international capital to achieve these aims through the industrial police of the unions. But the party is also aware that the rotten unions and “social movements” it promotes as social pacifiers will not hold back workers for long, and hence its absolute refusal to point out, let alone condemn, any of Bolsonaro’s military co-conspirators.

This is a continuation, and at the same time a deepening, of the policy it pursued in over a decade in power by upholding the amnesty for the torturers and murderers of the 1964-1985 dictatorship, allowing for Bolsonaro himself to thrive as a backbencher in its ruling coalition. As for its goal of pursuing “geopolitical independence” from the US—shared with the military—it only reinforces the need to achieve “competitiveness” through a more intense exploitation of workers. That includes guaranteeing the capitalist profits of US companies in face of workers’ strikes and struggles, with the PT’s Jaques Wagner seeking to reassure the US State Department not to take Lula’s rhetoric as anything else than a “smokescreen,” as confessed by PT’s president herself.

Turkish government escalates attack on democratic rights amid explosive social conditions

Ulaş Ateşçi

On Sunday, the annual Pride March in Beyoğlu, Istanbul, attended by thousands of people, was violently attacked by police. In Istanbul, 371 people were detained, including AFP photojournalist Bülent Kılıç, along with dozens more in other cities, including Izmir and Ankara. According to news reports and statements by lawyers, those detained were released in the following hours.

The Istanbul Governor’s Office closed some roads to traffic on Sunday morning in Beyoğlu, where Taksim Square is located, and deployed a large number of police forces in the area ahead of the peaceful march, citing “calls for unauthorized meetings, demonstrations and similar activities on social media.” During the day, the police relentlessly attacked those who wanted to gather, while marches and protests took place on various streets despite the crackdown.

People display rainbow flags as Turkish police officers cordon an area off during the LGBTQ Pride March in Istanbul, Turkey, Sunday, June 26, 2022 [AP Photo/Emrah Gurel]

Last week, the district governorships of Beyoğlu and Kadıköy announced a one-week ban on “LGBTI+ Pride Week” events. In the Kadıköy District Governorship’s statement, the arbitrary ban was based on Article 17 of Law No. 2911 on Meetings and Demonstrations, hypocritically citing “the protection of peace, security and well-being and the prevention of crime.”

In fact, this law effectively abolishes the Constitutional article stating that “Everyone has the right to organize unarmed and nonviolent meetings and demonstrations without prior permission.” This arbitrary police attack, ordered by President Recep Tayyip Erdoğan’s government, is one of the largest detention operations in recent years and an obvious onslaught on basic democratic rights.

The main target of the Erdoğan government’s increased police state repression and authoritarianism is the working class, which is beginning to mobilize together with its international class brothers and sisters against skyrocketing costs of living and growing attacks on social conditions.

Inflation—triggered by the massive printing of money by central banks around the world, further enriching the super-rich and exacerbated by the NATO war against Russia in Ukraine—has pushed the cost of living in Turkey to unprecedented levels. According to a survey conducted in March, 90 percent of the population lives below the poverty line. Under these explosive social conditions, the strike and protest movement of various sections of the working class, especially health workers, is developing.

Faced with ever-increasing inflation and poverty and growing social opposition, the government is targeting basic democratic rights, promoting religious reaction, chauvinism and militarism to suppress the working class.

The anti-democratic state crackdown on Kurdish politicians and the media escalated after Erdogan announced in late May a new military operation against the US-backed Kurdish nationalist People’s Protection Units (YPG) in Syria.

Members of the Kurdish nationalist People’s Democratic Party (HDP), a legal pro-NATO and pro-European Union party with more than 5 million votes, which the government accuses of being an extension of the Kurdistan Workers’ Party (PKK) and YPG, are detained or arrested on charges of being “members of a terrorist group” without any evidence. Another 38 politicians were detained in Adana yesterday, including HDP Provincial Co-chairs Helin Kaya and Mehmet Karakış and Seyhan Municipality Deputy Mayor Funda Buyruk.

Also this month, 20 journalists from the Kurdish press were detained on similar allegations and 16 of them were arrested. In this attack on press freedom, journalists were sent to jail for news they reported.

The attack on press freedom is accompanied by the government’s planned amendment to the press law, which has been postponed in the face of widespread public opposition. The amendment envisages a prison sentence of one to three years for “anyone who publicly disseminates untrue information about the country’s internal and external security, public order and public health with the intention of creating anxiety, fear or panic among the public in a manner likely to disrupt public peace.”

In Turkey, for example, where the official annual inflation rate announced by the government is over 70 percent, according to this amendment it will be a criminal offense to disseminate information based on a study by ENAG, an independent research agency, that the real annual inflation rate is 160 percent. Under the pretext of “internal and external security” and “disturbing public peace,” exposing the reactionary character of the government’s war policies or state repression against workers’ struggles could be criminalized.

Moreover, the amendment also places under threat scientists and health care workers who directly provide information on the COVID-19 pandemic in the press or on social media, under conditions where the government has stopped releasing all official data on the COVID-19 pandemic since June 12. Scientists and public health advocates who warn the population against the government’s false claim that “the pandemic is over,” or those who calculate the excess death toll and expose the government’s concealment of the true death toll from the pandemic, could become targets.

These reactionary attacks on democratic rights are by no means confined to Turkey. All over the world the escalation of the war by the US-led NATO powers against Russia in Ukraine is accompanied by the elimination of basic democratic rights and the promotion of the far-right forces at home.

In the US, five unelected members of the Supreme Court have decided to strip hundreds of millions of Americans of the right to abortion. In France, an unelected administrative court has banned Muslim women from wearing religious bathing suits. This attack on the rights of the immigrant population is accompanied by the elimination of the right to asylum. Britain attempts to deport asylum seekers to Rwanda. In Spain at least 37 asylum seekers were massacred by security forces trying to cross the Spanish-Moroccan border.