Israel's onslaught on Gaza is a crime that cannot succeed

Seumas Milne: Israel's onslaught on Gaza is a crime that cannot succeed | Comment is free | The Guardian

Israel's onslaught on Gaza is a crime that cannot succeed

The US-backed attempt to bring Hamas to heel by overwhelming force is in fact more likely to boost the movement's appeal

Israel'sdecision to launch its devastating attack on Gaza on a Saturday was a"stroke of brilliance", the country's biggest selling paper YediotAharonot crowed: "the element of surprise increased the number ofpeople who were killed". The daily Ma'ariv agreed: "We left them inshock and awe".

Of the ferocity of the assault on one of themost overcrowded and destitute corners of the earth, there is at leastno question. In the bloodiest onslaught on blockaded Gaza since it wascaptured and occupied by Israel 41 years ago, at least 310 people werekilled and more than a thousand reported injured in the first 48 hoursalone.

As well as scores of ordinary police officersincinerated in a passing-out parade, at least 56 civilians were said bythe UN to have died as Israel used American-supplied F-16s and Apachehelicopters to attack a string of civilian targets it linked to Hamas,including a mosque, private homes and the Islamic university. Hamasmilitary and political facilities were mostly deserted, while policestations in residential areas were teeming as they were pulverised.

AsIsraeli journalist Amos Harel wrote in Ha'aretz at the weekend, "littleor no weight was apparently devoted to the question of harming innocentcivilians", as in US operations in Iraq. Among those killed in thefirst wave of strikes were eight teenage students waiting for a bus andfour girls from the same family in Jabaliya, aged one to 12 years old.

Anyonewho doubts the impact of these atrocities among Arabs and Muslimsworldwide should switch on the satellite television stations that arewatched avidly across the Middle Eastand which - unlike their western counterparts - do not habituallysanitise the barbarity meted out in the name of multiple wars on terror.

Then,having seen a child dying in her parent's arms live on TV, considerwhat sort of western response there would have been to an attack onIsrael, or the US or Britain for that matter, which left more than 300dead in a couple of days.

You can be certain it would be metwith the most sweeping condemnation, that the US president-elect woulddo a great deal more than "monitor" the situation and the British primeminister go much further than simply call for "restraint" on both sides.

Butthat is in fact all they did do, though the British government hassince joined the call for a ceasefire. There has, of course, been nowestern denunciation of the Israeli slaughter - such aerial destructionis, after all, routinely called in by the US and Britain in occupiedIraq and Afghanistan.

Instead, Hamas and the Palestinians of Gazaare held responsible for what has been visited upon them. How could anygovernment not respond with overwhelming force to the constant firingof rockets into its territory, the Israelis demand, echoed by westerngovernments and media.

But that is to turn reality on its head.Like the West Bank, the Gaza Strip has been - and continues to be -illegally occupied by Israel since 1967. Despite the withdrawal oftroops and settlements three years ago, Israel maintains completecontrol of the territory by sea, air and land. And since Hamas won thePalestinian elections in 2006, Israel has punished its 1.5 millionpeople with an inhuman blockade of essential supplies, backed by the USand the European Union.

Like any occupied people, thePalestinians have the right to resist, whether they choose to exerciseit or not. But there is no right of defence for an illegal occupation -there is an obligation to withdraw comprehensively. During the lastseven years, 14 Israelis have been killed by mostly homemade rocketsfired from the Gaza Strip, while more than 5,000 Palestinians werekilled by Israel with some of the most advanced US-supplied armamentsin the world. And while no rockets are fired from the West Bank, 45Palestinians have died there at Israel's hands this year alone. Theissue is of course not just the vast disparity in weapons and power,but that one side is the occupier, the other the occupied.

Hamasis likewise blamed for last month's breakdown of the six-month tahdi'a,or lull. But, in a weary reprise of past ceasefires, it was in factsunk by Israel's assassination of six Hamas fighters in Gaza on 5November and its refusal to lift its siege of the embattled territoryas expected under an Egyptian-brokered deal. The truth is that Israeland its western sponsors have set their face against an accommodationwith the Palestinians' democratic choice and have instead thrown theirpolitical weight, cash and arms behind a sustained attempt to overthrowit.

The complete failure of that approach has brought us to thisweek's horrific pass. Israeli leaders believe they can bomb Hamas intosubmission with a "decisive blow" that will establish a "new securityenvironment" - and boost their electoral fortunes in the process beforeBarack Obama comes to office.

But as with Israel's disastrousassault on Lebanon two years ago - or its earlier siege of YasserArafat's PLO in Beirut in 1982 - it is a strategy that cannot succeed.Even more than Hezbollah, Hamas's appeal among Palestinians and beyonddoesn't derive from its puny infrastructure, or even its Islamistideology, but its spirit of resistance to decades of injustice. So longas it remains standing in the face of this onslaught, its influencewill only be strengthened. And if it is not with rockets, itsretaliation is bound to take other forms, as Hamas's leader KhalidMish'al made clear at the weekend.

Meanwhile, the US andIsraeli-backed Palestinian president Mahmoud Abbas has been furtherdiminished by being seen as having colluded in the Israeli assault onhis own people - as has the already rock-bottom credibility of theEgyptian regime. What is now taking place in the Palestinianterritories is a futile crime in which the US and its allies are deeplycomplicit - and unless Obama is prepared to change course, it is likelyto have bitter consequences that will touch us all.

s.milne@guardian.co.uk

The Intriguing Death Of Top GOP Consultant Michael Connell

The Intriguing Death Of Top GOP Consultant Michael Connell

At 3:31 PM Friday, December 19, Michael L. Connell, a top Internet consultant for the Republican National Committee and for the Bush and McCain presidential campaigns, left Washington from the small airport in College Park, Md. Alone at the helm of a single engine Piper Saratoga, Connell's flight plan anticipated arrival at his hometown Akron-Canton Airport in a little over two hours, at 5:43 PM.

Instead, about three miles short of the Akron-Canton Airport, Connell's plane crashed to the ground in an upscale section of Lake Township, killing Connell instantly. "I was standing in the kitchen and I looked out the window and all I saw was fire," Taylor Fano told The Akron Beacon Journal. "It took out the flagpole and the cement blocks surrounding the flagpole . . . . It skidded across the driveway and right in-between a line of pine trees and a small fence around an in-ground pool."

The Federal Aviation Administration is investigating the accident and has not yet filed a report, but there was no immediate evidence of wrong-doing or sabotage.

Many in the blogosphere have called for further investigation of the crash, suggesting that Connell was about to provide crucial information in the case of alleged vote fraud in the 2004 Ohio presidential contest, and that that information would implicate Karl Rove and others in the Bush administration. [see update below]

Just last month, Connell was deposed in the ongoing case, King Lincoln Bronzeville Neighborhood Association v. Blackwell. According to accounts of the November 3rd deposition, Connell denied any knowledge of attempts to fraudulently manipulate 2004 Ohio vote counts.

There is, however, a more immediate and relevant question: How much will Connell's death, even if the accident was entirely without malfeasance, impede congressional committee investigations into the more controversial activities of the Bush administration over the past eight years - including the ongoing investigation into thousands of missing White House-RNC emails sent and received by some 22 White House political aides, including Rove. These emails are believed likely to shed light on the political firings of U.S. Attorneys, and to show if the White House had any role in controversial decisions to prosecute former Alabama Democratic Governor Don Siegelman.

After first emerging as a web consultant during the 1998 gubernatorial campaign of Jeb Bush, Connell quickly became a key member of the Republican brain trust and quickly became part of a small network of political consultants and lobbyists favored by Rove. He advised both Bush-Cheney campaigns, and was a regular consultant to the RNC and other GOP committees.

Connell, and his firms - New Media Communications, Govtech and Connell Donatelli Inc. - were part of a universe that included such other GOP operatives as Tony Feather and Jeff Larson of FLS Connect, Tom Synhorst of the DCI Group, and Jeff Averbeck of Smartech. Their companies have received millions of dollars from the Bush-Cheney campaign committees of 2000 and 2004 from the three major - national, congressional and senatorial - Republican Party committees; from such conservative interest groups as the National Rifle Association and Citizens Against Government Waste; from a host of corporations and trade associations seeking to remain in the administration's good graces; and from dozens and dozens of Republican House and Senate campaigns.

Two of Connell's firms received at least $8.78 million from the RNC from 2004 to 2008 and from the Bush-Cheney 2004 campaign. FLS got $39.5 million between 2004 and 2008 from the RNC alone, and Smartech got $9.74 million from the RNC over the same period, according to the Center for Responsive Politics.

These revenue reports only touch the surface. Before his death, Connell's New Media listed 90 clients on its web site from the Alabama Republican Party to the Business Roundtable to the Free Enterprise Fund, to the Republican Jewish Coalition to USAID. The scope of Connell's client list is a reflection of the Midas touch of the Bush administration in signaling to prospective clients which firms were in good stead.

As it stands now, whatever Connell knew about the activities of Karl Rove and other Republican operatives will go with him to his grave at St. Hilary Catholic Church in Fairlawn, Ohio. His family released a statement on the New Media web site declaring, "Mike was a devoted husband and father, who, with his wife of 18 years, raised a family of four wonderful children. Mike was also a committed man of faith, who regularly worshipped with his family at St. Hillary's and who lived his faith through mission work to help the poor and less fortunate at home and around the world. Finally, Mike was an engaged citizen, who was actively involved at all levels of our political system."

In a telephone interview, Connell's wife Heather adamantly declared "he was a good man. He did nothing wrong. He wasn't about to talk, because there was nothing to talk about. Nobody did anything wrong. We won the elction fair and square. Deal with it." Asked if he ever spoke about the disputed emails, Heather Connell said "I have no clue about that. I just know it's not him."

A close friend who worked extensively with Connell in Republican politics said, however, that he believes Connell "was more involved in that than a lot of people were let to believe." This associate of Connell's, who first brought the accident to the attention of the Huffington Post, said Connell, who was deeply religious and firmly pro-life, may have been "developing second thoughts" after years of being convinced that "working for the Republican cause was doing God's work."

UPDATE:
An earlier version of this story claimed: "Connell's death provoked a groundswell of commentary among conspiracy theorists on the web, including Larisa Alexandrovna, Raw Story, Velvet Revolution, ePluribus Media, and TheZoo."

To be fair: Larisa Alexandrovna acknowledged that suspicions that Connell's death was the result of sabotage were unproven, and she urged that empirical evidence be pursued. Her articles and those that she cites legitimately raised questions that in many cases are worthy of pursuit (See Alexandrovna's letter concerning this story here.) I regret using "conspiracy theorists" to describe Larisa Alexandrovna, Raw Story, and the others.

Bush orders emergency bailout of the auto industry

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Bush orders emergency bailout of the auto industry
By Deb Riechmann, Associated Press Writer

WASHINGTON – Citing imminent danger to the national economy, President Bush ordered an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans and demanding tough concessions from the deeply troubled carmakers and their workers. Detroit's Big Three cheered the action and vowed to rebuild their once-mighty industry, though they acknowledged the road would be anything but smooth as they fight their way back from the brink of bankruptcy.

The autoworkers union complained the deal was too harsh on its members, while Bush's fellow Republicans in Congress said it was simply bad business to bail out yet another big industry.

Bush, who signed the massive $700 billion rescue for financial institutions only this fall, said he was reluctant to approve yet another government bailout of private business. But he said that allowing the massive auto industry to collapse in the middle of what is already a severe downturn "could send our suffering economy into a deeper and longer recession."

Speaking at the White House, he also said he didn't want to "leave the next president to confront the demise of a major American industry in his first days of office."

President-elect Barack Obama, who takes office a month from Saturday, praised the administration action but warned, "The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely necessary to save this critical industry and the millions of American jobs that depend on it."

Obama will be free to reopen the arrangement from the government's side if he chooses, and the head of the United Auto Workers said the union would be appealing to the new president and the strongly Democratic new Congress on that subject.

Obama, commenting in Chicago as he named more economic Cabinet members, was noncommittal on possible changes. But he said he would "make sure that when we see a final restructuring package that it's not just workers who are bearing the brunt."

Stock prices rallied on Wall Street after Bush's announcement but faded late in the day, and the Dow Jones industrials declined 25.88 points. GM shares, however, jumped 22.7 percent and Ford shares 3.9 percent. Chrysler is not publicly traded.

Some $13.4 billion of the rescue money will be available this month and next — $9.4 billion of it for General Motors Corp. and $4 billion for Chrysler LLC, the two auto giants that have said they could be facing bankruptcy soon without government help. GM is slated to receive the remaining $4 billion in loans after more money is released from the financial rescue account. Ford Motor Co. says it doesn't need federal cash now but would be badly damaged if one or both of the other two went under.

Under terms of the loans, the government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry. Bush said the companies' workers should agree to wage and work rules that are competitive with foreign automakers by the end of next year.

And he called for elimination of a "jobs bank" program — negotiated by the United Auto Workers and the companies — under which laid-off workers can receive about 95 percent of their pay and benefits for years. Early this month, the UAW agreed to suspend the program.

Underscoring the automakers' peril — and how close the bailout is cutting to the edge — GM Chief Financial Officer Ray Young said the company expects to have the first money from the government by Dec. 29, just in time to pay suppliers.

CEO Rick Wagoner said, "The timing was specifically aligned with the timing we said we needed in order to make our payments on a timely basis, so we're right on schedule there."

The deal also calls for two-thirds of the automakers' debts to be converted to stock in the companies.

Also, Chrysler, GM and Ford were to pay billions into UAW-administered trust funds that will take over paying health care bills for hundreds of thousands of retirees on Jan. 1, 2010. The trusts, called Voluntary Employees Beneficiary Associations, were to last at least 80 years.

But if half the cash is swapped for stock, the trusts might not last that long if the value of the shares declines. Swapping stock for cash payments helps the cash-starved companies, though, because they have more money to spend on operations.

Bondholders may be left with a take-it-or-leave it proposition with the government requiring them to exchange two-thirds of their holdings for stock. But they, too, could try to negotiate with the Obama administration, said Pete Hastings, an auto industry corporate bonds analyst with Morgan Keegan & Co. in Memphis, Tenn.

If they don't take the deal, GM could wind up in bankruptcy and the bondholders would get little or nothing, Hastings said.

Though auto stocks rose on Friday, the companies' stockholders aren't out of the woods.

Provisions in the bailout agreement will force GM to produce more shares, diluting the value of its stock several times over, said Efraim Levy, a senior auto industry analyst with Standard & Poor's.

There's no way the automakers will be profitable next year, said Levy. Things could be different in 2010 if the market rebounds and cost cuts kick in, he said.

Meanwhile, Treasury Secretary Henry Paulson said Friday that Congress should release the second $350 billion from the financial rescue fund that it approved in October to bail out huge financial institutions. Tapping the fund for the auto industry basically exhausts the first half of the $700 billion total.

If the carmakers fail to prove viability by March 31, they will be required to repay the loans, which they would find all but impossible. A firm will be deemed viable only if it can show positive cash flow and can fully repay the government loans.

Friday's rescue plan retains the idea of a "car czar" to make sure the companies are keeping their promises and moving toward long-term viability.

The short-term overseer will be Paulson. But the White House deputy chief of staff, Joel Kaplan, said that if the Obama team wants someone else installed to bridge the administrations, Bush is open to that.

The White House package is the lifeline desperately sought by U.S. automakers, who warned they were running out of money as the economy fell deeper into recession, car loans became scarce and consumers stopped shopping for their vehicles.

The carmakers have announced extended holiday shutdowns. Chrysler is closing all 30 of its North American manufacturing plants for four weeks because of slumping sales; Ford will shut 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories — many for the entire month of January — to cut vehicle production.

Chrysler CEO Bob Nardelli said the initial injection of capital would help the company get through its cash crisis and give it a push toward eventually returning to profitability. He said Chrysler was committed to meeting the conditions set by Bush in exchange for the money.

Though Ford didn't seek short-term aid, company President and CEO Alan Mulally said, "The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy."

House Republican leader John Boehner called the plan "regrettable." He said that granting loans for automakers was never the intention when Congress passed the $700 billion plan to rescue financial institutions and that the new plan "has failed both autoworkers and taxpayers."

Rep. Jeb Hensarling, R-Texas, chairman of the congressional oversight panel for the Wall Street rescue program, said a Chapter 11 bankruptcy reorganization, not loans rewarding decades of mismanagement, would have been a better decision.

Grover Norquist, president of the Americans for Tax Reform, sent a one-word letter to Bush that said in huge letters: "No."

Calif. AG urges court to void gay marriage ban

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Calif. AG urges court to void gay marriage ban


SAN FRANCISCO – The California attorney general has changed his position on the state's new same-sex marriage ban and is now urging the state Supreme Court to void Proposition 8.

Jerry Brown filed a brief Friday saying the measure that amended the California Constitution to limit marriage to a man and a woman is unconstitutional. He says it deprives gay couples of a fundamental right.

After California voters passed Proposition 8 on Nov. 4, Brown said he would fight to uphold the initiative in his role as attorney general, even though he personally voted against it.

He submitted his brief in one of the three legal challenges to Proposition 8 brought by same-sex marriage supporters.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

SAN FRANCISCO (AP) — The sponsors of Proposition 8 asked the California Supreme Court on Friday to nullify the marriages of the estimated 18,000 same-sex couples who exchanged vows before voters approved the ballot initiative that outlawed gay unions.

The Yes on 8 campaign filed a brief arguing that because the new law holds that only marriages between a man and a woman are recognized or valid in California, the state can no longer recognize the existing same-sex unions. The document reveals for the first time that opponents of same-sex marriage will fight in court to undo those unions that already exist.

"Proposition 8's brevity is matched by its clarity. There are no conditional clauses, exceptions, exemptions or exclusions," reads the brief co-written by Kenneth Starr, dean of Pepperdine University's law school and the former independent counsel who investigated President Bill Clinton.

The campaign submitted the document in response to three lawsuits seeking to invalidate Proposition 8, the constitutional amendment adopted last month that overruled the court's decision in May that had legalized gay marriage in the nation's most populous state.

Both Attorney General Jerry Brown, whose office is scheduled to submit its own brief to the court Friday, and gay rights groups maintain that the gay marriage ban may not be applied retroactively.

The Supreme Court could hear arguments in the litigation as soon as March. The measure's backers announced Friday that Starr, a former federal judge and U.S. solicitor general, had signed on as their lead counsel and would argue the cases.

Proposition 8's supporters assert that the Supreme Court lacks the authority or historical precedent to throw out the amendment.

"For this court to rule otherwise would be to tear asunder a lavish body of jurisprudence," the court papers state. "That body of decisional law commands judges — as servants of the people — to bow to the will of those whom they serve — even if the substantive result of what people have wrought in constitution-amending is deemed unenlightened."

The cases are Strauss v. Horton, S168047; City and County of San Francisco v. Horton, S168078; and Tyler v. State of California, S168066.

President Bush: Automakers to get $17.4B

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President Bush: Automakers to get $17.4B
By Deb Riechmann, Associated Press Writer 23 mins ago

WASHINGTON – The Bush administration came to the rescue of the deeply troubled U.S. auto industry Friday, offering $17.4 billion in loans in exchange for concessions from carmakers and their workers.

"Allowing the auto companies to collapse is not a responsible course of action," President Bush said. Bankruptcy, He said that a bankruptcy was unlikely to work for the auto industry at this time and would deal "an unacceptably painful blow to hardworking Americans" across the economy.

One official said $13.4 billion of the money would be available this month and next, $9.4 billion for General Motors Corp. and $4 billion for Chrysler LLC. Both companies have said they soon might be unable to pay their bills without federal help. Ford Motor Co. has said it does not need immediate help.

Bush said the rescue package demanded concessions similar to those outlined in a bailout plan that was approved by the House but rejected by the Senate a week ago. It would give the automakers three months to come up with restructuring plans to become viable companies.

If they fail to produce a plan by March 31, the automakers will be required to repay the loans, which they would find very difficult.

"The time to make hard decisions to become viable is now, or the only option will be bankruptcy," Bush said. "The automakers and unions must understand what is at stake and make hard decisions necessary to reform."

Bush's plan is designed to keep the auto industry running in the short term, passing the longer-range problem on to the incoming administration of President-elect Barack Obama.

Police Get The Wrong House In Galveston, Allegedly Assault 12-Year-Old Girl

Houston - Hair Balls - Police Get The Wrong House In Galveston, Allegedly Assault 12-Year-Old Girl

Police Get The Wrong House In Galveston, Allegedly Assault 12-Year-Old Girl
Wed Dec 17, 2008 at 12:37:01 PM

It was a little before 8 at night when the breaker went out at Emily Milburn's home in Galveston. She was busy preparing her children for school the next day, so she asked her 12-year-old daughter, Dymond, to pop outside and turn the switch back on.

As Dymond headed toward the breaker, a blue van drove up and three men jumped out rushing toward her. One of them grabbed her saying, "You're a prostitute. You're coming with me."

Dymond grabbed onto a tree and started screaming, "Daddy, Daddy, Daddy." One of the men covered her mouth. Two of the men beat her about the face and throat.

As it turned out, the three men were plain-clothed Galveston police officers who had been called to the area regarding three white prostitutes soliciting a white man and a black drug dealer.


All this is according to a lawsuit filed in Galveston federal court by Milburn against the officers. The lawsuit alleges that the officers thought Dymond, an African-American, was a hooker due to the "tight shorts" she was wearing, despite not fitting the racial description of any of the female suspects. The police went to the wrong house, two blocks away from the area of the reported illegal activity, Milburn's attorney, Anthony Griffin, tells Hair Balls.

After the incident, Dymond was hospitalized and suffered black eyes as well as throat and ear drum injuries.

Three weeks later, according to the lawsuit, police went to Dymond's school, where she was an honor student, and arrested her for assaulting a public servant. Griffin says the allegations stem from when Dymond fought back against the three men who were trying to take her from her home. The case went to trial, but the judge declared it a mistrial on the first day, says Griffin. The new trial is set for February.

"I think we'll be okay," says Griffin. "I don't think a jury will find a 12-year-old girl guilty who's just sitting outside her house. Any 12-year-old attacked by three men and told that she's a prostitute is going to scream and yell for Daddy and hit back and do whatever she can. She's scared to death."

Since the incident more than two years ago, Dymond regularly suffers nightmares in which police officers are raping and beating her and cutting off her fingers, according to the lawsuit.
Griffin says he expects to enter mediation with the officers in early 2009 to resolve the lawsuit.

We've got calls in to the officers' lawyer; we'll let you know if we hear something.

Update: This is from the officers' lawyer, William Helfand:

Both the daughter and the father were arrested for assaulting a peace officer. "The father basically attacked police officers as they were trying to take the daughter into custody after she ran off."

Also, "The city has investigated the matter and found that the conduct of the police officers was appropriate under the circumstances," Helfand says. "It's unfortunate that sometimes police officers have to use force against people who are using force against them. And the evidence will show that both these folks violated the law and forcefully resisted arrest."

Chase offers $400,000 in Chicago factory sit-in

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Chase offers $400,000 in Chicago factory sit-in
By Andrew Stern Andrew Stern

CHICAGO (Reuters) – JPMorgan Chase & Co offered $400,000 on Wednesday to help pay severance to laid-off workers occupying a Chicago factory, whose protest symbolizes resentment over the federal bailout of big banks while workers suffer.

JPMorgan Chase's offer, announced by Rep. Luis Gutierrez, who has been mediating the dispute, follows on Bank of America Corp's pledge to make an unspecified, limited loan to Republic Windows & Doors on behalf of the 250 workers.

Both banks are creditors of Republic, a family-owned window and door manufacturer that fell victim to the housing downturn and shut down on Friday.

The workers, who were given three days' notice of the closure, have occupied the shuttered plant since then, demanding a legally mandated 60 days' pay for severance, and accrued vacation pay.

JPMorgan Chase's $400,000 pledge was described by Gutierrez as capital, and how the transfer would be structured was still to be worked out, a spokeswoman for the Illinois Democrat said.

Bank of America said its additional loan to Republic would have to be negotiated, as its previous line of credit to the company had "maxed out."

Several hundred supporters of the workers marched on Bank of America's Chicago offices, where negotiations among the parties were set to resume for a third day.

The worker sit-in that began on Friday has become a symbol of Main Street resentment of the federal bailout of Wall Street banks, which Bank of America has tapped for $15 billion and JPMorgan for $25 billion.

President-elect Barack Obama and other politicians have voiced support for the workers' cause, arguing that the Wall Street bailout was not serving its purpose to loosen credit for Main Street businesses.

Democratic Illinois Gov. Rod Blagojevich, on the day before he was charged with corruption in office, had said he was ordering a withdrawal of state business from Bank of America. A spokeswoman for the governor said it was "premature" to discuss what actions were being taken, since there were promising signs that the factory dispute was nearer a resolution.

FREE LEONARD PELTIER!

FREE Leonard Peltier page

THE CASE OF LEONARD PELTIER

Leonard Peltier is guilty only of caring about his people and his family. If we don't do something to assist in his release - you could be the next person convicted and sentenced just for caring, or maybe your spouse, or your daughter or your son.
Leonard is an American Indian serving two consecutive life sentences in a federal penitentiary, even though there is NO CREDIBLE EVIDENCE that he is guilty of anything. He is a political prisoner of the U.S. Government!!!


The Shoot Out

On June 26, 1975 two FBI agents allegedly searching for a young Indian man accused of stealing a pair of used cowboy boots, spotted several men in a red pick-up truck. They followed the truck briefly. The occupants of the truck pulled into the Jumping Bull property. Shots were fired though no one knows who fired first. Soon the situation exploded into a firefight involving 30 or so Indian men, women, and children and eventually over 150 FBI agents, BIA police, US Marshals and the local police known as GOONs. Some of these arriving in armored personnel carriers, and within minutes of the first shots. Two agents and a young Indian activist died that day. Within hours of the shootout, according to the U.S. Commission on Civil Rights, which labeled it "a full scale vendetta", hundreds of paramilitary equipped, combat-clad FBI agents and US Marshals staged a dragnet through the reservation in a fever of revenge in which men, women, and children were terrified and properties and homes were ransacked.
There has never been ANY investigation into the death of the Native American killed that day. See more on this here. NONE! The FBI does not even acknowledge his death in their many, many press releases about the "incident".


The Set-up

Leonard had been previously identified as an AIM member by the FBI and targeted by their notorious COINTELPRO program which "neutralized" people by slander, attack, and arrest. Fearing no possibility of a fair trial and at the request of his elders, he fled to Canada where he was later arrested and extradited by affidavits manufactured by the FBI, and that the government now concedes were FALSE and FABRICATED. NOTE: This means the extradition was in fact an illegal act, and the Supreme Court of Canada has stated (in 1989) that if the extradition was fraudulent, Leonard should be returned to Canada, where he would be a free man. Read here, how the Canadian Minister of Justice has obviously become a pawn and puppet to the wishes of the U. S. Department of Justice.

Four men were initially accused of murder in the deaths of agents Williams and Coler. One was the young Indian man who they claimed they were coming to the camp to arrest for the alledged theft of a pair of used cowboy boots. All charges against him were dropped. Two of the men were acquitted before a jury. They were found "NOT GUILTY" by reason of self defense. The jury rightly concluded that the men had no way of knowing that the two FBI agents - in plain clothes and driving unmarked cars, were federal agents. When gunfire started, these men who were already used to the reign of terror that was going on - having already lost at LEAST 50 of their friends and relatives - killed and their deaths remain UNINVESTIGATED to this day, well they returned fire as anyone would. Leonard Peltier was in the camp that day, and he says he did fire in the direction of the two vehicles, but he had no more idea of exactly what was going on than the two men who were acquitted of the same charges. Leonard, once away from the Jumping Bull property, had fled to Canada, thus he did not stand trial with the two men who were acquitted. But - once these two were acquitted, the FBI decided to concentrate their "full prosecutorial weight against Leonard Peltier." Once they convinced Canada to extradite him, (using illegal and false affidavits) he was returned to the custody of the U.S. The FBI couldn't allow Leonard to stand trial in the same place that the two other men had been acquitted in, so they went "judge shopping". They found what they were looking for in North Dakota - a judge who had a reputation of being very hard on Indians. The handpicked judge, favored by the FBI for his anti-Indian reputation, refused to allow evidence of self defense in Leonard's trial. Information from the acquittals of his codefendants was also ruled inadmissible. Jurors were convinced by the court that AIM "snipers" would kill them at any time. The windows of the courtroom were painted black to "protect" the jury. The bus that took the jury to and from the courthouse also had it's windows painted black to "protect" the jury. The jury was keep sequestered and heavily guarded. In short Leonard Peltier was convicted before his trial even began. Manufactured evidence presented by the FBI in the form of false ballistics tests, and illegally withheld evidence in the form of ballistics test that proved that the evidence they submitted was false. They never proved that Leonard even owned the gun that they attributed the fatal shots as having come from. The gun was in such bad shape from being in a fire - it could not be fired, so there was no reliable way to prove it had even been on the Jumping Bull property that day. But, the FBI was out of people to pin this on, so they made sure the evidence all pointed to Loenard. He was convicted and sentenced to two consecutive life terms.


Government Has No Evidence

The government has subsequently changed its theory on who killed the agents and today admits they have NO IDEA WHO KILLED THEM. This change of theory came about during an appeal when a judge suggested to the prosecution that the evidence was, at best, merely circumstantial. The government then argued that they had tried Leonard as both the murderer and aider and abettor. According to the final decision of the 8th Circuit Court of Appeals, Peltier's trial and previous appeals had been riddled with FBI misconduct and judicial impropriety including: coercion of witnesses, perjury, fabrication of evidence, and the suppression of exculpatory evidence which could have proved his innocence. The Court called the FBI's misconduct "a clear abuse of the investigative process". Yet they ruled against a new trial for Leonard Peltier because they were "reluctant to impute further improprieties to them (FBI)." Recently it was discovered that a terrible error had been made during the appeal by Leonard's own attorney during which he mistakenly agreed with the judge regarding the testimony of Norman Brown. What the attorney and the judge did not realize was that Brown had recanted his testimony at trial and stated he had been coerced by the FBI. He further stated that he never saw Peltier anywhere near the bodies of the agents. We also now know that other agents were stationed around the area prior to the start of the firefight, in direct contradiction to their testimony at trial. This was discovered in September 1995 following the release of radio communications from the South Dakota Attorney General's office. A document has been unearthed stating that almost two months prior to the day of the shoot-out, the FBI was planning "paramilitary law enforcement...on Indian land", specifically, Pine Ridge. It may also be noted that the highest buildup of agents to civilians occurred just six days prior to the tragic incident.


Conclusion

It is obvious to anyone with a conscience that the government was planning to attack the AIM encampment, perhaps in the hopes of diverting attention from an illegal land transfer, or perhaps as a way to stop Senator Frank Church's Committee from investigating the FBI's COINTELPRO program in regard to Native struggles. That investigation was initiated just prior to the shoot-out. It was halted the day after "due to the deaths of the agents." With recent developments in Washington, DC proving the FBI grossly participated in illegally doctoring and manufacturing evidence to ensure criminal convictions, more attention MUST be paid to this renegade organization's past misconduct. Congressional hearings/investigations are critical! Ask your Senators and Representatives to call for a full investigation of the FBI. Remind them of Waco Texas and Ruby Ridge. The FBI is a rogue agency and it's out of control.


Recent Developments

During a parole hearing in December 1995, US prosecutor Lynn Crooks admitted again that no evidence exists against Peltier. He further stated that the government never really accused him of murder and that if Peltier were retried, the government could not reconvict. The Parole Board, however, decided not to grant parole because Peltier continues to maintain his innocence (they stated that Peltier had not given a "factual and specific account of (his) actions...consistent with the jury's verdict of guilt") and because he was the only one convicted. As ridiculous as this reasoning sounds, it has thus far held up. A petition for executive clemency after nearly 7 years from the time it was filed with the Department of Justice, was refused by William Clinton. Clinton pardoned several of his friends and business partners, but says he never seriously thought of any such pardon for Leonard.


FREE LEONARD PELTIER!

How Freddie Mac halted regulatory drive

Print Story: AP IMPACT: How Freddie Mac halted regulatory drive - Yahoo! News

AP IMPACT: How Freddie Mac halted regulatory drive
By Pete Yost, Associated Press Writer

WASHINGTON – When the Washington Nationals played their first-ever baseball game in the nation's capital in April 2005, two congressmen who oversaw mortgage giant Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on.

Efforts to tighten government regulation were gaining support on Capitol Hill, and Freddie Mac was fighting back. The baseball tickets for home opener were means of influence.

According to confidential company documents obtained by The Associated Press, Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., spent the evening in hard-to-obtain seats near the Nationals dugout with Freddie Mac executive Hollis McLoughlin and four of Freddie Mac's in-house lobbyists.

Kanjorski declined comment through a spokeswoman. Ney ultimately served a federal prison term after pleading guilty to trading political favors for a golf trip to Scotland, other gifts and campaign donations in the Jack Abramoff lobbying scandal.

The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time.

Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts. Freddie Mac paid the following amounts to the firms of former Republican lawmakers or ex-GOP staffers in 2006:

_Sen. Alfonse D'Amato of New York, at Park Strategies, $240,000.

_Rep. Vin Weber of Minnesota, at Clark & Weinstock, $360,297.

_Rep. Susan Molinari of New York, at Washington Group, $300,062.

_Susan Hirschmann at Williams & Jensen, former chief of staff to House Majority Leader Tom DeLay, R-Texas, $240,790.

Freddie Mac's chairman and chief executive, Dick Syron, and McLoughlin, senior vice president for external relations, used Clark and Weinstock extensively, Weber said in an e-mail Friday.

"I personally met with the CEO several times and with Hollis and his team regularly," Weber said in the e-mail. "Clark and Weinstock worked effectively and intensely for Freddie Mac under Dick Syron and Hollis McLoughlin."

The tactics worked — for a time. Freddie Mac was able to operate with a relatively free hand until the housing bubble ultimately burst in 2007.

Now Freddie Mac and its sister company, Fannie Mae, are in financial collapse and under government control. Congress is investigating how it all happened. Lawmakers have planned a hearing Tuesday.

The records obtained by the AP reflect growing concern within Freddie Mac over a chorus of criticism from Republicans worried that Freddie Mac and Fannie Mae had grown too big. The two companies owned or guaranteed over $5 trillion in mortgages.

The Bush administration and Federal Reserve Chairman Alan Greenspan were sounding the alarm about the potential threat to the nation's financial health if the fortunes of the two mammoth companies turned sour. They did eventually, when they took on $1 trillion worth of subprime mortgages and when their traditional guarantee business deteriorated. Commercial banks regarded Freddie Mac and Fannie Mae as competitors and were anxious to pick up business that would result from scaling back the two companies.

Pushing back, Freddie Mac enlisted prominent conservatives, including Gingrich and former Justice Department official Viet Dinh, paying each $300,000 in 2006, according to internal records.

Gingrich talked and wrote about what he saw as the benefits of the Freddie Mac business model.

Dinh wrote a legal analysis of private property rights that viewed a hypothetical government-enforced sale of Freddie Mac assets as constitutionally suspect.

In 2005, Freddie Mac hired political consultant Frank Luntz, a Washington fixture whose specialty is choosing the right buzz words to achieve a particular goal. The records AP obtained do not cover 2005 and Freddie Mac refuses to confirm that it brought Luntz on board. But four people familiar with events at Freddie Mac at the time confirmed the Luntz hire. All four spoke on condition of anonymity, saying they fear reprisals if their names were revealed. Luntz did not respond to efforts to contact him through his office.

The AP previously described, in October, how Freddie Mac thwarted efforts to bring a tough regulatory bill sponsored by Republican Sens. Chuck Hagel of Nebraska, John Sununu of New Hampshire, Elizabeth Dole of North Carolina and John McCain of Arizona to a full Senate vote.

At a meeting days after Hagel's bill went to the full Senate, Syron and McLoughlin berated the company's in-house lobbyists for failing to keep Hagel's bill corralled in committee, said the four people familiar with events at Freddie Mac at the time.

Freddie Mac shifted into high gear, secretly paying a Republican consulting firm, Washington-based DCI Group, $2 million to kill Hagel's legislation. The covert lobbying campaign targeted Republican senators in 2005-06.

According to the newly obtained records, DCI's deployment was part of a broader campaign that targeted mainly Republicans on Capitol Hill.

The internal Freddie Mac documents show that 17 of the lobbying firms and consultants paid in 2006 were specifically directed to focus on Republicans and four on Democrats, with varying targets for the rest.

McLoughlin hired his own personal political strategist, Republican consultant Harry Clark, paying Clark's firm $440,494 in 2006 out of McLoughlin's executive office budget, according to the records obtained by AP.

Even the office that served as the sole source of federal regulation over Freddie Mac was targeted.

Lobbyist Geoffrey P. Gray was paid $240,000 in 2006 to focus in part on the Office of Federal Housing Enterprise Oversight, according to the records.

Last week, Gray did not return calls to his office. On Friday, Freddie Mac declined to comment. A lawyer for Syron, one of the scheduled witnesses at Tuesday's congressional hearing on the collapse of Freddie Mac and Fannie Mae, did not return a phone call seeking comment.

Israel bans press in the Gaza Strip

Israel bans press in the Gaza Strip | csmonitor.com

Israel bans press in the Gaza Strip
For nearly three weeks Israel has blocked access to the Gaza Strip. Foreign journalists are challenging the Gaza ban in court, calling it a 'blow' to freedom of the press.
By Ilene R. Prusher | Staff writer of The Christian Science Monitor

** This makes one wonder what atrocities they are up to this time!? This arrogant, illegitimate, terrorist nation (Israel) MUST be dealt with!!

Jerusalem - For more than 40 years the Gaza Strip has played a key role in the Arab-Israeli conflict, making it a place of keen interest to journalists.

But for nearly three weeks now, Israel has blocked media access to the 25-mile-long coastal territory in what journalists are calling a "mortal blow against freedom of the press."

On Monday, the Foreign Press Association (FPA) in Israel filed a petition to the Supreme Court asking it to rule on the issue, essentially forcing an overturn of the ban.

"We believe the Israeli government has an obligation to keep the Gaza border open to international journalists," says Steven Gutkin, the FPA Chairman and Jerusalem bureau chief of Associated Press. "The foreign media serve as the world's window into Gaza and it's essential that we be allowed in."

The border has been closed in the past during periods of heightened tensions and violence, but never for more than a few days at a time.

"It's been open throughout very difficult periods, and it's been closed during periods of heavy fighting. But it's been open during more tense periods than this one, and we've received no plausible explanation of why this period is any different," says Mr. Gutkin.

Israeli officials have given no specific reason why it has been closed for such a long period of time, except to indicate that opening the border – the only legal route into Gaza – would endanger the personnel who work at the heavily guarded Erez crossing.

Israel's Supreme Court responded on Tuesday by giving the state 15 days to respond to the FPA demand. But lawyers for the FPA appealed the decision, suggesting that it was an old-fashioned schedule in an age of real-time news.

"We're trying to make it clear to them that 15 days is too long," says Naomi Vestfrid, one of the lawyers on the case.

"We're in the 21st century: news travels in minutes, even seconds. We're trying to tell them that obviously, you didn't understand the urgency in the matter," says Ms. Vestfrid.

Israel has long maintained careful control over the amount of goods and people allowed to come in and out of the Hamas-run Gaza Strip, home to about 1.5 million Palestinians living under great economic hardship.

As part of its disengagement from Gaza in September 2005, Israel withdrew soldiers and settlers from the territory it had occupied for 38 years and said that the Gaza Strip was no longer its responsibility. However, Israel still controls all access to Gaza via land, sea, and air. Gazans are also dependent on Israel for electricity and fuel.

Since Hamas seized control of the Gaza Strip in June 2007, Israel has further tightened its control over the territory, allowing an on-again, off-again trickle of commercial or other traffic over the border.

Israeli officials say they allow humanitarian aid and other necessary supplies into Gaza, but Palestinians say they are living under siege.

The latest clampdown on any access to and from Gaza stems from recent rocket attacks on southern Israel from militants in the Gaza Strip. Israel and Hamas had agreed to a temporary truce – called tahdiya in Arabic or regia in Hebrew – but the quiet was shattered by both sides over the past two weeks.

Human rights groups have also brought attention to the blockade of Gaza over the past month.

A new "Free Gaza" movement has sent boats from Cyprus to Gaza in defiance of the Israeli ban. Some boats have managed to dock, while in other cases, the activists were arrested.

By blocking the press from entering Gaza, the FPA charged in its petition to the Supreme Court that the ban "gives the unpleasant feeling that the state of Israel has something to hide."

Observers here theorize that Israeli defense officials are enforcing the ban as a way to put pressure on Hamas. The FPA says that there are indications that, in the interest of avoiding additional negative publicity, the Israeli army may order the border to be open on Wednesday.

"If that happens, we will explore the option of moving forward with a legal case anyway, because of the precedent," Gutkin wrote in an urgent e-mail update to members on Tuesday.

United Nations studies of the region suggest that due to the ongoing closure, conditions for Palestinians in the territories, particularly the Gaza Strip, are deteriorating.

On Wednesday, several UN offices that aid Palestinians in the West Bank and the Gaza Strip will launch a consolidated appeal process for 2009, during which they will release figures showing the state of decline.

"At the end of 2008, nearly 80 percent of the population in Gaza was dependent on food assistance which combined with restricted access to basic social services and movement can be described as a major human dignity crisis," said a press release from the UN Office for the Coordination of Humanitarian Affairs.

Banking Regulator Played Advocate Over Enforcer

Banking Regulator Played Advocate Over Enforcer

Banking Regulator Played Advocate Over Enforcer
Agency Let Lenders Grow Out of Control, Then Fail

By Binyamin Appelbaum and Ellen Nakashima
Washington Post Staff Writers
Sunday, November 23, 2008; A01

When Countrywide Financial felt pressured by federal agencies charged with overseeing it, executives at the giant mortgage lender simply switched regulators in the spring of 2007.

The benefits were clear: Countrywide's new regulator, the Office of Thrift Supervision, promised more flexible oversight of issues related to the bank's mortgage lending. For OTS, which depends on fees paid by banks it regulates and competes with other regulators to land the largest financial firms, Countrywide was a lucrative catch.

But OTS was not an effective regulator. This year, the government has seized three of the largest institutions regulated by OTS, including IndyMac Bancorp, Washington Mutual -- the largest bank in U.S. history to go bust -- and on Friday evening, Downey Savings and Loan Association. The total assets of the OTS thrifts to fail this year: $355.7 billion. Three others were forced to sell to avoid failure, including Countrywide.

In the parade of regulators that missed signals or made decisions they came to regret on the road to the current financial crisis, the Office of Thrift Supervision stands out.

OTS is responsible for regulating thrifts, also known as savings and loans, which focus on mortgage lending. As the banks under OTS supervision expanded high-risk lending, the agency failed to rein in their destructive excesses despite clear evidence of mounting problems, according to banking officials and a review of financial documents.

Instead, OTS adopted an aggressively deregulatory stance toward the mortgage lenders it regulated. It allowed the reserves the banks held as a buffer against losses to dwindle to a historic low. When the housing market turned downward, the thrifts were left vulnerable. As borrowers defaulted on loans, the companies were unable to replace the money they had expected to collect.

The decline and fall of these thrifts further rattled a shaky economy, making it harder and more expensive for people to get mortgages and disrupting businesses that relied on the banks for loans. Although federal insurance covered the deposits, investors lost money, employees lost jobs and the public lost faith in financial institutions.

As Congress and the incoming Obama administration prepare to revamp federal financial oversight, the collapse of the thrift industry offers a lesson in how regulation can fail. It happened over several years, a product of the regulator's overly close identification with its banks, which it referred to as "customers," and of the agency managers' appetite for deregulation, new lending products and expanded homeownership sometimes at the expense of traditional oversight. Tough measures, like tighter lending standards, were not employed until after borrowers began defaulting in large numbers.

The agency championed the thrift industry's growth during the housing boom and called programs that extended mortgages to previously unqualified borrowers as "innovations." In 2004, the year that risky loans called option adjustable-rate mortgages took off, then-OTS director James Gilleran lauded the banks for their role in providing home loans. "Our goal is to allow thrifts to operate with a wide breadth of freedom from regulatory intrusion," he said in a speech.

At the same time, the agency allowed the banks to project minimal losses and, as a result, reduce the share of revenue they were setting aside to cover them. By September 2006, when the housing market began declining, the capital reserves held by OTS-regulated firms had declined to their lowest level in two decades, less than a third of their historical average, according to financial records.

Scott M. Polakoff, the agency's senior deputy director, said OTS had closely monitored allowances for loan losses and considered them sufficient, but added that the actual losses exceeded what reasonably could have been expected.

"Are banks going to fail when events occur well beyond the confines of reasonable expectation or modeling? The answer is yes," he said in an interview.

But critics said the agency had neglected its obligation to police the thrift industry and instead became more of a consultant.

"What you had here is a regulatory motif that was too accommodating to private-sector interests," said Jim Leach, a former Republican lawmaker who led what was then the House Banking Committee and now lectures in public affairs at Princeton University. "In this case, the end result is chaos for the industry, their customers and the national interest."
Warning Signs Ignored

On a hot Friday afternoon in June 2001, federal regulators swept into the suburban Chicago offices of Superior Bank and told stunned employees that it had been closed by OTS.

Superior was the largest thrift to fail since the savings and loans crisis in the early 1990s. Its demise foreshadowed the current upheaval. The company had made billions of dollars in mortgage loans to customers with credit problems but boosted profits instead of setting aside enough revenue to cover the eventual losses.

OTS regulators had not questioned the company's assurances about the quality of its loans. They had not required Superior to set aside more money. Even after the problems were identified, several federal investigators concluded that regulators had continued to rely on the company's promises rather than forcing it to take action.

"The whole Superior episode should have served as a warning," Ellen Seidman, then-director of OTS, said in a recent interview. Seidman acknowledged that she should have acted faster and more forcefully to address Superior's problems. Seidman, a Democrat, left her post shortly after the Bush administration began and had little role in revising the agency's approach.

Although the failure and disappearance of Superior triggered minor reforms, OTS did not learn the broader lesson. Thrifts were expanding into high-risk mortgage lending, but OTS was not requiring stronger safeguards.

John Reich, who has been OTS director since 2005, and Polakoff, his deputy, were well positioned to have learned the lesson. At the time of Superior's difficulties, Reich was one of the leaders of the Federal Deposit Insurance Corp. and Polakoff ran FDIC's Chicago office. Indeed, Polakoff's office recognized Superior's problems before OTS and pushed for increased scrutiny of Superior's bookkeeping.

In testimony before Congress in the fall of 2001, Reich listed what he considered the lessons of Superior's failure. Among them, he said, "we must see to it that institutions engaging in risky lending . . . hold sufficient capital to protect against sudden insolvency."

But instead of increasing oversight, OTS shrank dramatically over the next four years.
Reducing Regulation

In the summer of 2003, leaders of the four federal agencies that oversee the banking industry gathered to highlight the Bush administration's commitment to reducing regulation. They posed for photographers behind a stack of papers wrapped in red tape. The others held garden shears. Gilleran, who succeeded Seidman as OTS director in late 2001, hefted a chain saw.

Gilleran was an impassioned advocate of deregulation. He cut a quarter of the agency's 1,200 employees between 2001 and 2004, even though the value of loans and other assets of the firms regulated by OTS increased by half over the same period. The result was a mismatch between a short-handed agency and a burgeoning thrift industry.

He also reduced consumer protections. The other agencies that regulate banks review corporate health and compliance with consumer laws separately, which consumer advocates say helps ensure that each gets proper scrutiny from specialists. Gilleran merged the consumer exam into the financial exam.

Gilleran did not respond to multiple requests to be interviewed for this article. But at the time he headed the agency, he defended the consolidation of the exams, saying thrifts would be required to conduct "self-evaluations of their compliance with consumer laws."

Then-Rep. John J. LaFalce (D-N.Y.), who at the time was the ranking Democrat on the House Financial Services Committee, wrote in a letter to Gilleran that this was "a complete abrogation of the mandate your agency has been given by Congress."

The consumer exam had in part monitored whether thrifts were complying with the law by providing quality loans in lower-income communities. During Gilleran's four-year tenure, OTS cited only one institution for failing to meet that obligation, compared with 12 citations in the previous four years.

John Taylor, chief executive of the National Community Reinvestment Coalition, and other advocates say better enforcement of consumer protections, such as rules against predatory lending, could have kept thrifts healthy because consumer complaints are an early warning of unsustainable business practices.
A Surge in High-Risk Loans

For thrifts regulated by OTS, the option ARM was the rocket fuel of the mortgage boom, the product most responsible for driving profits to record heights and for burning lenders badly on the way back down. Yet even after other bank regulators urged higher lending standards for these mortgages, OTS was reluctant to insist on it.

Simeon Ferguson, an 85-year-old Brooklyn resident with dementia, according to his attorney, signed up in February 2006 for an option ARM. The monthly cost was $2,400, but the terms of the loan from IndyMac Bancorp, a major thrift based in Pasadena, Calif., allowed Ferguson to pay less than that each month, the way people can with a credit card.

Many of the loans made by IndyMac and other thrifts were extended to borrowers without ensuring they could afford their full monthly payments. Ferguson, who lived on a fixed monthly income of $1,100, was one such borrower, according to a pending lawsuit filed on his behalf in federal court. The suit alleges that IndyMac never checked on his income or assets.

In 2006, at the peak of the boom, lenders made $255 billion in option ARMs, according to Inside Mortgage Finance, a trade publication. Most option ARMs were originated by OTS-regulated banks.

Concerns about the product were first raised in late 2005 by another federal regulator, the Office of the Comptroller of the Currency. The agency pushed other regulators to issue a joint proposal that lenders should make sure borrowers could afford their full monthly payments. "Too many consumers have been attracted to products by the seductive prospect of low minimum payments that delay the day of reckoning," Comptroller of the Currency John C. Dugan said in a speech advocating the proposal.

OTS was hesitant to sign on, though it eventually did. Reich, the new director of OTS, warned against excessive intervention. He cautioned that the government should not interfere with lending by thrifts "who have demonstrated that they have the know-how to manage these products through all kinds of economic cycles." Reich, through a spokesman, declined to be interviewed for this article.

The lending industry seconded Reich's concerns at the time, arguing that the government was needlessly depriving families of a chance at homeownership. IndyMac argued in a letter to regulators that in evaluating loan applications it was not fair to rule out the possibility that a prospective borrower's income might increase. "Lenders risk denying home ownership to qualified borrowers," chief risk officer Ruthann Melbourne wrote.

The proposal languished until September 2006, when it was swiftly finalized after a congressional committee began making inquiries.

The long delay in issuing the guidance allowed companies to keep making billions of dollars in loans without verifying that borrowers could afford them. One of the largest banks, Countrywide Financial, said in an investor presentation after the guidance was released that most of the borrowers who received loans in the previous two years would not have qualified under the new standards. Countrywide said it would have refused 89 percent of its 2006 borrowers and 83 percent of its 2005 borrowers. That represents $138 billion in mortgage loans the company would not have made if regulators had acted sooner.
Risks Ran Rampant

Even after the guidance was issued, some banks interpreted it as permission to maintain old habits because the regulatory agencies had stopped short of issuing a binding rule.

Washington Mutual, for instance, said in a December 2006 securities filing that it was continuing to qualify borrowers based on their ability to afford a teaser interest rate. In August 2007, the bank was still qualifying borrowers at a 2 percent teaser rate instead of the full rate of 5 percent or higher they would eventually face, according to a shareholders' lawsuit filed by Bernstein Litowitz Berger & Grossmann.

As early as 2003, the company set up credit risk teams at more than a dozen offices around the country to assess the growing flood of applications for option ARM loans. The basic job was to "make exceptions" to the bank's standards so loans could be approved, said Dorothea Larkin, a former Washington Mutual credit risk manager and a witness in the Bernstein Litowitz suit.

"As we kept making the same exception over and over again, what was an exception in 2003 and in 2004 became the norm in 2005," Larkin said in an interview.

It was clear to some Washington Mutual employees that the company was making loans that borrowers could not afford and that the bank could suffer as a result. In 2005, a small group of senior risk managers drew up a plan that would have required loan officers to document that borrowers could afford the full monthly payment on option ARM loans.

The plan was shared with OTS examiners, according to a former bank official who spoke on condition of anonymity because the bank's practices are the focus of a federal investigation as well as several lawsuits.

"We laid it out to the regulators. They bought into it. They supported it," the former official said. But when a new executive team at the bank nixed the plan, the former official said, "the OTS never said anything."

In addition to taking more risks, Washington Mutual was setting aside a smaller share of revenue to cover future losses. The reserves had steadily declined relative to new loans since 2002. By June 2005, the bank held $45 to cover losses on every $10,000 in outstanding loans, according to financial records filed with federal regulators. Average reserves at OTS-regulated institutions had declined by about a third since June 2002, but Washington Mutual's reserves had fallen even further. They were 25 percent lower than the average for OTS-regulated thrifts.

OTS did not force the company to address the problem with reserves, though agency examiners worked full-time inside Washington Mutual's Seattle headquarters.

Polakoff said OTS closely monitored the company's allowance for loan losses and considered it sufficient. "They had good models in place calculating expected losses on the loan portfolio," he said.

But the agency did not fix a basic problem with how Washington Mutual predicted future losses. According to a confidential internal review in September 2005, the company had not adjusted its prediction of future losses to reflect the larger risks associated with option ARM loans. The review described those loans as "a major and growing risk factor in our portfolio." As a result, the company was not setting aside enough money to cover future losses.

Management responded in November to the internal review with a memo promising to update its risk assessment by June 30, 2006. During the nine months before the risk model was revised, Washington Mutual issued about $32 billion in new option ARM loans. OTS officials said in an interview that they were unfamiliar with the company's internal correspondence but would consider nine months an unacceptable delay.

"Nine months to get that model into compliance?" said Dale George, a former WaMu risk manager and a witness in a lawsuit. "I found that astounding."
Known for Being 'Lenient'

Countrywide Financial's decision to reconstitute itself as a thrift and come under the OTS umbrella was a victory for Darryl W. Dochow, the OTS official in charge of new charters in the Western region, home to Washington Mutual, IndyMac and other large thrifts.

In the late 1980s, Dochow had been the chief career supervisor of the savings-and-loan industry, and federal investigators later concluded he played a key role in the collapse of Charles Keating's Lincoln Savings and Loan by delaying and impeding proper oversight of that thrift's operations.

Dochow was shunted aside in the aftermath and sent to the agency's Seattle office. Several of his former colleagues and superiors say he eventually reestablished himself as a credible regulator and again rose in the organization. Dochow did not return a phone call requesting an interview, and OTS said he declined to give one.

As early as 2005, Angelo R. Mozilo, then the chief executive of Countrywide, approached OTS about moving out from under the supervision of the Office of the Comptroller of the Currency, which regulates national commercial banks. In 2006, Dochow and his OTS colleagues met with Countrywide at its headquarters in Calabasas, Calif., in a room decorated with color photos of the company's float entries in the annual Tournament of Roses parade. One depicted a big bad wolf, with arms outstretched, huffing and puffing on a brick house.

Senior executives at Countrywide who participated in the meetings said OTS pitched itself as a more natural, less antagonistic regulator than OCC and that Mozilo preferred that. Government officials outside OTS who were familiar with the negotiations provided a similar description.

"The general attitude was they were going to be more lenient," one Countrywide executive said. For example, he said other regulators, specifically OCC and the Federal Reserve, were very demanding that large banks not allow loan officers to participate in the selection of property appraisers. "But the OTS sold themselves on having a more liberal interpretation of it," the executive said.

Winning Countrywide was important for OTS, which is funded by assessments on the roughly 750 banks it regulates, with the largest firms paying much of the freight. Washington Mutual paid 13 percent of the agency's budget in the fiscal year ended Sept. 30, according to OTS figures. Countrywide provided 5 percent. Individual firms tend to make a larger difference to OTS finances than other bank regulators because the agency oversees fewer companies with fewer assets.

Polakoff said in an interview that the main reason Countrywide sought a new charter was that OTS was a better fit because it regulated banks that focus on mortgage lending. He said he challenged Mozilo: "If you're looking for a weak regulator, and if you're calling us because you think we're a weak regulator, stop now. We will walk away."

Polakoff said Mozilo told him, "That is absolutely not the reason we're even talking to you about a charter." Mozilo declined to be interviewed for this article.

But critics in government and industry said Countrywide's shift from OCC oversight to that of OTS was evidence of a "competition in laxity" among regulators eager to attract business. "Institutions should not be able to find a safe haven in one regulator from the reasonable concerns of another regulator," said Karen Shaw Petrou of Federal Financial Analytics, referring to the Countrywide episode.

In September 2007, six months after helping orchestrate the arrival of Countrywide under OTS, Dochow was promoted to head the agency's Western region.

He had arrived just in time for the second savings-and-loan crisis.

Bush set to relax endangered species rules

Print Story: Bush set to relax endangered species rules - Yahoo! News

** And so begins the final, and likely worst, rape of the eight year gang-rape we've been experiencing!!


Bush set to relax endangered species rules
By Dina Cappiello, Associated Press Writer

WASHINGTON – Animals and plants in danger of becoming extinct could lose the protection of government experts who make sure that dams, highways and other projects don't pose a threat, under regulations the Bush administration is set to put in place before President-elect Obama can reverse them.

The rules must be published Friday to take effect before Obama is sworn in Jan. 20. Otherwise, he can undo them with the stroke of a pen.

The Interior Department rushed to complete the rules in three months over the objections of lawmakers and environmentalists who argued that they would weaken how a landmark conservation law is applied.

A Nov. 12 version of the final rules obtained by the Associated Press has changed little from the original proposal, despite the more than 250,000 comments received since it was first proposed in August.

The rules eliminate the input of federal wildlife scientists in some endangered species cases, allowing the federal agency in charge of building, authorizing or funding a project to determine for itself if it is likely to harm endangered wildlife and plants.

Current regulations require independent wildlife biologists to sign off on these decisions before a project can go forward, at times modifying the design to better protect species.

The regulations also bar federal agencies from assessing emissions of the gases blamed for global warming on species and habitats, a tactic environmentalists have tried to use to block new coal-fired power plants.

Tina Kreisher, an Interior Department spokeswoman, could not confirm whether the rule would be published before the deadline, saying only that the White House was still reviewing it. But she said changes were being made based on the comments received.

"We started this; we want to finish this," said Kreisher.

If the rules go into effect before Obama takes office, they will be difficult to overturn since it would require the new administration to restart the rule-making process. Congress, however, could reverse the rules through the Congressional Review Act — a law that allows review of new federal regulations.

It's been used once in the last 12 years, but some Democratic lawmakers have said they may employ it to block the endangered species rules and other midnight regulations by the Bush administration.

Rep. Nick Rahall, D-W.Va., chairman of the House Natural Resources Committee, said Wednesday that he and other Democrats were committed to "the change that is needed."

Drew Hammill, a spokesman for House Speaker Nancy Pelosi, D-Calif., said the House will be looking at ways to overturn the endangered species rules and other midnight regulations.

"The House, in consultation with the incoming administration and relevant committees, will review what oversight tools are at our disposal regarding this and other last minute attempts to inflict severe damage to the law in the waning moments of the Bush administration," Hammill said.

The Bush administration has made no secret of its intent to complete the endangered species changes quickly.

When the proposal was first announced in August, the public was initially given 30 days to comment. That period was later doubled after Democratic lawmakers pressed for more time.

Then, last month, the head of the endangered species program corralled 15 experts in Washington to sort through 200,000 comments in 32 hours.

"This is definitely lightning quick," said John Kostyack, executive director of the National Wildlife Federation's Wildlife Conservation and Global Warming initiative. "I would be surprised that they spent all this time rushing it through if it wasn't greased."

If successful, the Bush administration will accomplish through rules what conservative Republicans have been unable to achieve in Congress: ending some environmental reviews that developers and other federal agencies blame for delays and cost increases on many projects.

Supporters of the changes also expected it to be finalized later this week.

The Pacific Legal Foundation, which advocates for property rights, urged that the rules be approved.

"Litigious activists have used the Endangered Species Act to fight projects," Reed Hopper, the foundation's principal attorney, said in a statement. "The administration's current proposal is a step toward curbing these abuses."

Treasury Bailout Revamp Subject Of Contentious Hearing

Treasury Bailout Revamp Subject Of Contentious Hearing

(RTTNews) - The Treasury Department's use of the $700 billion financial rescue package was the subject of a contentious hearing on Capitol Hill Friday.


Led by Chairman Dennis Kucinich (D-Ohio), members of the House Oversight Committee's subcommittee on domestic policy grilled the Treasury Department's Interim Assistant Secretary for Financial Stability Neel Kashkari on the restructuring of the bailout plan.


Kashkari attempted to deflect criticism, telling the committee, "Our system is stronger and more stable than just a few weeks ago.
"

However, a panel of angry representatives accused him of playing "ring around the rosie" with their questions.


Ranking member Darrell Issa (R-CA) was particularly harsh, telling Kashkari, "You're here because Congress feels you played a bait-and-switch game," adding that representatives would remain skeptical to the Treasury's motives.


The Treasury Department came under scrutiny earlier this week following the revelation that it no longer plans to buy troubled mortgage-related assets from banks with the $700 billion financial relief package created last month.


The move explicitly abandons the original intention of the rescue bill, with Treasury Secretary Henry Paulson changing the focus of the relief program to other areas.


In a press conference, Paulson revealed that the government would now focus on building capital in financial institutions, finding ways to support consumer access to credit and looking at ways to ease mortgage foreclosures.


The program might also be expanded to include lightly regulated non-bank financial institutions, the Treasury secretary said, though he noted that this would bring up challenges in protecting taxpayer money.


In his opening remarks, Kucinich berated the decision to completely alter the focus of the bailout.


"Secretary Paulson's policy reversal breaks with Congressional intent, contradicts public assurances previously made by Treasury, and leaves the federal government without an adequate mechanism to stem a tide of home foreclosures," he said.


"Thus, the only significant use by Treasury of the funds Congress authorized to address the mortgage crisis underlying the financial crisis includes, among other things, propping up a Beverly Hills banker to the stars; subsidizing the evisceration of National City Bank and the laying-off of thousands of Clevelanders who worked there; and indirectly funding the payment of bonuses, compensation, and dividends by financial firms that could not have afforded to make them without the TARP capital infusion," Kucinich continued.


He added that Congress would have not passed the Emergency Economic Stabilization Act if it had known that the Treasury would so drastically restructure the package. Both Kucinich and Issa voted against the first and second versions of the EESA.

Election spurs 'hundreds' of race threats, crimes

Print Story: Election spurs 'hundreds' of race threats, crimes - Yahoo! News

Election spurs 'hundreds' of race threats, crimes
By Jesse Washington, Ap National Writer

Cross burnings. Schoolchildren chanting "Assassinate Obama." Black figures hung from nooses. Racial epithets scrawled on homes and cars.

Incidents around the country referring to President-elect Barack Obama are dampening the postelection glow of racial progress and harmony, highlighting the stubborn racism that remains in America.

From California to Maine, police have documented a range of alleged crimes, from vandalism and vague threats to at least one physical attack. Insults and taunts have been delivered by adults, college students and second-graders.

There have been "hundreds" of incidents since the election, many more than usual, said Mark Potok, director of the Intelligence Project at the Southern Poverty Law Center, which monitors hate crimes.

One was in Snellville, Ga., where Denene Millner said a boy on the school bus told her 9-year-old daughter the day after the election: "I hope Obama gets assassinated." That night, someone trashed her sister-in-law's front lawn, mangled the Obama lawn signs, and left two pizza boxes filled with human feces outside the front door, Millner said.

She described her emotions as a combination of anger and fear.

"I can't say that every white person in Snellville is evil and anti-Obama and willing to desecrate my property because one or two idiots did it," said Millner, who is black. "But it definitely makes you look a little different at the people who you live with, and makes you wonder what they're capable of and what they're really thinking."

Potok, who is white, said he believes there is "a large subset of white people in this country who feel that they are losing everything they know, that the country their forefathers built has somehow been stolen from them."

Grant Griffin, a 46-year-old white Georgia native, expressed similar sentiments: "I believe our nation is ruined and has been for several decades and the election of Obama is merely the culmination of the change.

"If you had real change it would involve all the members of (Obama's) church being deported," he said.

Change in whatever form does not come easy, and a black president is "the most profound change in the field of race this country has experienced since the Civil War," said William Ferris, senior associate director of the Center for the Study of the American South at the University of North Carolina. "It's shaking the foundations on which the country has existed for centuries."

"Someone once said racism is like cancer," Ferris said. "It's never totally wiped out, it's in remission."

If so, America's remission lasted until the morning of Nov. 5.

The day after the vote hailed as a sign of a nation changed, black high school student Barbara Tyler of Marietta, Ga., said she heard hateful Obama comments from white students, and that teachers cut off discussion about Obama's victory.

Tyler spoke at a press conference by the Georgia chapter of the NAACP calling for a town hall meeting to address complaints from across the state about hostility and resentment. Another student, from a Covington middle school, said he was suspended for wearing an Obama shirt to school Nov. 5 after the principal told students not to wear political paraphernalia.

The student's mother, Eshe Riviears, said the principal told her: "Whether you like it or not, we're in the South, and there are a lot of people who are not happy with this decision."

Other incidents include:

_Four North Carolina State University students admitted writing anti-Obama comments in a tunnel designated for free speech expression, including one that said: "Let's shoot that (N-word) in the head." Obama has received more threats than any other president-elect, authorities say.

_At Standish, Maine, a sign inside the Oak Hill General Store read: "Osama Obama Shotgun Pool." Customers could sign up to bet $1 on a date when Obama would be killed. "Stabbing, shooting, roadside bombs, they all count," the sign said. At the bottom of the marker board was written "Let's hope someone wins."

_Racist graffiti was found in places including New York's Long Island, where two dozen cars were spray-painted; Kilgore, Texas, where the local high school and skate park were defaced; and the Los Angeles area, where swastikas, racial slurs and "Go Back To Africa" were spray painted on sidewalks, houses and cars.

_Second- and third-grade students on a school bus in Rexburg, Idaho, chanted "assassinate Obama," a district official said.

_University of Alabama professor Marsha L. Houston said a poster of the Obama family was ripped off her office door. A replacement poster was defaced with a death threat and a racial slur. "It seems the election brought the racist rats out of the woodwork," Houston said.

_Black figures were hanged by nooses from trees on Mount Desert Island, Maine, the Bangor Daily News reported. The president of Baylor University in Waco, Texas said a rope found hanging from a campus tree was apparently an abandoned swing and not a noose.

_Crosses were burned in yards of Obama supporters in Hardwick, N.J., and Apolacan Township, Pa.

_A black teenager in New York City said he was attacked with a bat on election night by four white men who shouted 'Obama.'

_In the Pittsburgh suburb of Forest Hills, a black man said he found a note with a racial slur on his car windshield, saying "now that you voted for Obama, just watch out for your house."

Emotions are often raw after a hard-fought political campaign, but now those on the losing side have an easy target for their anger.

"The principle is very simple," said BJ Gallagher, a sociologist and co-author of the diversity book "A Peacock in the Land of Penguins." "If I can't hurt the person I'm angry at, then I'll vent my anger on a substitute, i.e., someone of the same race."

"We saw the same thing happen after the 9-11 attacks, as a wave of anti-Muslim violence swept the country. We saw it happen after the Rodney King verdict, when Los Angeles blacks erupted in rage at the injustice perpetrated by 'the white man.'"

"It's as stupid and ineffectual as kicking your dog when you've had a bad day at the office," Gallagher said. "But it happens a lot."

Obama has more threats than other presidents-elect

Print Story: Obama has more threats than other presidents-elect - Yahoo! News

Obama has more threats than other presidents-elect
By Eileen Sullivan, Associated Press Writer

WASHINGTON – Threats against a new president historically spike right after an election, but from Maine to Idaho law enforcement officials are seeing more against Barack Obama than ever before. The Secret Service would not comment or provide the number of cases they are investigating. But since the Nov. 4 election, law enforcement officials have seen more potentially threatening writings, Internet postings and other activity directed at Obama than has been seen with any past president-elect, said officials aware of the situation who spoke on condition of anonymity because the issue of a president's security is so sensitive.

Earlier this week, the Secret Service looked into the case of a sign posted on a tree in Vay, Idaho, with Obama's name and the offer of a "free public hanging." In North Carolina, civil rights officials complained of threatening racist graffiti targeting Obama found in a tunnel near the North Carolina State University campus.

And in a Maine convenience store, an Associated Press reporter saw a sign inviting customers to join a betting pool on when Obama might fall victim to an assassin. The sign solicited $1 entries into "The Osama Obama Shotgun Pool," saying the money would go to the person picking the date closest to when Obama was attacked. "Let's hope we have a winner," said the sign, since taken down.

In the security world, anything "new" can trigger hostility, said Joseph Funk, a former Secret Service agent-turned security consultant who oversaw a private protection detail for Obama before the Secret Service began guarding the candidate in early 2007.

Obama, of course, will be the country's first black president, and Funk said that new element, not just race itself, is probably responsible for a spike in anti-Obama postings and activity. "Anytime you're going to have something that's new, you're going to have increased chatter," he said.

The Secret Service also has cautioned the public not to assume that any threats against Obama are due to racism.

The service investigates threats in a wide range. There are "stated threats" and equally dangerous or lesser incidents considered of "unusual interest" — such as people motivated by obsessions or infatuations or lower-level gestures such as effigies of a candidate or an elected president. The service has said it does not have the luxury of discounting anything until agents have investigated the potential danger.

Racially tinged graffiti — not necessarily directed at Obama — also has emerged in numerous reports across the nation since Election Day, prompting at least one news conference by a local chapter of the National Association for the Advancement of Colored People in Georgia.

A law enforcement official who also spoke on condition of anonymity because he was not authorized to speak publicly said that during the campaign there was a spike in anti-Obama rhetoric on the Internet — "a lot of ranting and raving with no capability, credibility or specificity to it."

There were two threatening cases with racial overtones:

• In Denver, a group of men with guns and bulletproof vests made racist threats against Obama and sparked fears of an assassination plot during the Democratic National Convention in August.

• Just before the election, two skinheads in Tennessee were charged with plotting to behead blacks across the country and assassinate Obama while wearing white top hats and tuxedos.

In both cases, authorities determined the men were not capable of carrying out their plots.

In Milwaukee, police officials found a poster of Obama with a bullet going toward his head — discovered on a table in a police station.

Chatter among white supremacists on the Internet has increased throughout the campaign and since Election Day.

One of the most popular white supremacist Web sites got more than 2,000 new members the day after the election, compared with 91 new members on Election Day, according to an AP count. The site, stormfront.org, was temporarily off-line Nov. 5 because of the overwhelming amount of activity it received after Election Day. On Saturday, one Stormfront poster, identified as Dalderian Germanicus, of North Las Vegas, said, "I want the SOB laid out in a box to see how 'messiahs' come to rest. God has abandoned us, this country is doomed."

It is not surprising that a black president would galvanize the white supremacist movement, said Mark Potok, director of the Southern Poverty Law Center, who studies the white supremacy movement.

"The overwhelming flavor of the white supremacist world is a mix of desperation, confusion and hoping that this will somehow turn into a good thing for them," Potok said. He said hate groups have been on the rise in the past seven years because of a common concern about immigration.

Obama's plans for probing Bush torture

Salon.com News | Obama's plans for probing Bush torture

Obama's plans for probing Bush torture
President Bush could pardon officials involved in brutal interrogations -- but he may also face a sweeping investigation under the new president.

By Mark Benjamin


With growing talk in Washington that President Bush may be considering an unprecedented "blanket pardon" for people involved in his administration's brutal interrogation policies, advisors to Barack Obama are pressing ahead with plans for a nonpartisan commission to investigate alleged abuses under Bush.

The Obama plan, first revealed by Salon in August, would emphasize fact-finding investigation over prosecution. It is gaining currency in Washington as Obama advisors begin to coordinate with Democrats in Congress on the proposal. The plan would not rule out future prosecutions, but would delay a decision on that matter until all essential facts can be unearthed. Between the time necessary for the investigative process and the daunting array of policy problems Obama will face upon taking office, any decision on prosecutions probably would not come until a second Obama presidential term, should there be one.

The proposed commission -- similar in thrust to a Democratic investigation proposal first uncovered by Salon in July -- would examine a broad scope of activities, including detention, torture and extraordinary rendition, the practice of snatching suspected terrorists off the street and whisking them off to a third country for abusive interrogations. The commission might also pry into the claims by the White House -- widely rejected by experienced interrogators -- that abusive interrogations are an effective and necessary intelligence tool.

A common view among those involved with the talks is that any early effort to prosecute Bush administration officials would likely devolve quickly into ugly and fruitless partisan warfare. Second is that even if Obama decided he had the appetite for it, prosecutions in this arena are problematic at best: A series of memos from the Bush Justice Department approved the harsh tactics, and Congress changed the War Crimes Act in 2006, making prosecutions of individuals involved in interrogations more difficult.

Instead, a commission empowered by Congress would have the authority to compel witnesses to testify and even to grant immunity in exchange for information. Should a particularly ugly picture emerge, the option of prosecutions would still theoretically be on the table later, however unlikely.

In Obama's camp, there is a sense among some that such a commission would essentially mean letting Bush get away with crimes. "People have called for criminal investigations," one person familiar with the talks told me this summer as plans got under way. On Wednesday, a person participating in the talks confirmed that some people involved in the planning felt strongly that the commission would amount to "bullshit" and that Bush officials should be prosecuted to the full extent of the law.

But few think prosecutions are realistic, given the formidable legal hurdles and the huge policy problems competing for Obama's attention. Among them is the complicated task of closing down the military prison at Guantánamo Bay, which Obama advisors say is a priority. Some observers outside the Obama camp are also questioning how much Democrats really want exposed with regard to interrogation, since top Democrats in Congress were briefed in secret on some of the harshest tactics used by the CIA and appear to have done little, or perhaps nothing, to stop them.

Further complicating the Obama team's planning is uncertainty about what President Bush might do. On the one hand, a blanket pardon for anyone involved in the interrogations could be viewed by the public as a tacit admission of colossal wrongdoing -- after years of public denial -- which would do nothing to help Bush's tarnished legacy. Yet, if the administration fears an investigation will follow Bush out the door in January, they may not want to leave officials exposed to potentially revealing criminal proceedings. Bush might seek to frame a blanket pardon as a preemptive strike against wrongheaded, partisan retribution.

Constitutional scholars say a pardon of this kind would be an unprecedented move -- the prospective pardon of not just individuals but entire categories of people, perhaps numbering in the thousands, for carrying out the president's orders , which the White House has argued all along were legal.

Those scholars agree, however, that Article II of the Constitution gives Bush much latitude: There is no authority that can stop the president from doing so if he wishes, and there is no outside check or balance to revisit such a decision, however controversial it may be. "The president can do with pardoning power whatever he wants," explained University of Wisconsin Law School professor Stanley Kutler. "It is complete and plenary unto itself."

A blanket pardon from Bush could cover, for example, anyone who participated in, had knowledge of, or received information about Bush's interrogation program during the so-called war on terror. Not only are there potentially too many people to name without risking missing somebody, but some of the names are presumably classified.

"The classic pardon is an identifiable individual; here you are talking about potentially thousands of people involved in illegal activities," explained Jonathan Turley, a professor at George Washington Law School. A blanket pardon of this variety, Turley said, "would allow a president to engage in massive illegality and generally pardon the world for any involvement in unlawful activity."

There are, in fact, some constitutional scholars who believe a pardon might actually facilitate more complete participation in a fact-finding commission, by removing the threat of looming liability. "Holding people accountable is certainly nice, but in terms of healing the country and moving forward, so is actually getting a clear picture of what happened and letting the public make an informed decision," said Kermit Roosevelt at the University of Pennsylvania Law School. "If we had a pardon followed by something like a truth and reconciliation commission, that might not be such a bad outcome." (Roosevelt represents a detainee held at Guantánamo.)

The politics of it would be fraught with danger, however, and could so blemish Bush's legacy that some doubt he would go so far. "A pardon is an admission of guilt," noted Donald Kettl, a political science professor at the University of Pennsylvania. Bush has argued for years that his interrogation program was perfectly legal. With a pardon, Kettl said, Bush is essentially saying, "Gee, maybe we did not do the right thing."

It is not entirely unprecedented for a president to grant a pardon based on a category of behavior, rather than pardoning an individual by name. The day after his inauguration, President Carter pardoned all those who avoided the Vietnam draft by failing to register or by fleeing to Canada. George Washington pardoned participants in the 1794 Whiskey Rebellion. Andrew Johnson pardoned Confederate soldiers in 1865.

But these were pardons designed to foster reconciliation, handed out to categories of individuals who acted on their own conscience, rather than the president's own allegedly illegal orders. "This would be a different deal completely," explained Kettl. "It would be anticipating that people thought the official policy of the administration was wrong."