Money, Bill Clinton, Al Gore, CyberCop, Sanford Robinson, International Profit Associates' RICO Lawsuit, Hillary Clinton, O Sami Saydjari, Matt Donlon, Amit Yoran, Check Point, Snort, Richard Clarke, George W. Bush, Michael S. Goff, Ptech,  Symantec Corp., Israel, Jim Bidzos, Security Dynamics, etc, etc, etc.



U.S. reviewing second Dubai-based company

WASHINGTON (AP) — A second Dubai-owned company confirmed Thursday that the Bush administration has launched an unusual investigation over the potential security risks of its business moves in the United States. (Related blog: Second firm probed)

Dubai International Capital LLC said it was confident the U.S. would approve its plans to buy a British precision-engineering company with plants in Georgia and Connecticut that make parts used in engines for military aircraft and tanks.

The disclosure of a rare, second U.S. review involving an investment by a Dubai-owned company came on the same day lawmakers convened new hearings into the security implications of the first Dubai company's plans to buy a British business that helps operate six major U.S. ports.

The port deal has caused an outcry among congressional Democrats as well as many Republicans, despite President Bush's defense of the deal as safe and of the United Arab Emirates as an ally against terror.

Sen. Christopher Dodd, D-Conn., cited disclosure of the second investigation as proof lawmakers should consider updating the confidential process for approving such transactions after the September 2001 terror attacks.

"This system is broken. I think all of us agree," Dodd said at a hearing of the Senate Banking Committee. "I think you can point to various reasons why that's happened over the years. The world has changed."

The government panel is also conducting a full-blown investigation into an Israeli software company's plans to purchase a smaller U.S. rival. In that transaction, Check Point Software Technologies Ltd. of Ramat Gan, Israel, wants to buy Sourcefire Inc.

The Israeli company has been told U.S. officials feared the transaction could endanger some of the government's most sensitive computer systems. The objections by the FBI and Pentagon were partly over specialized intrusion detection software known as "Snort," which guards some classified U.S. military and intelligence computers.

In the newly revealed deal involving a second UAE company, Dubai International Capital has offered $1.2 billion to buy Doncasters Group Ltd. The Dubai company said it was pursuing all regulatory approvals "as is customary for international business transactions of this nature."

The U.S. has conducted only 25 such investigations among 1,600 business transactions reviewed by the Committee on Foreign Investments in the United States since 1988. The panel, made up of 12 government representatives, judges the security risks of foreign companies buying or investing in American industry.

On Thursday Britain's High Court approved the port deal that is so controversial in the United States.

The court agreed to the $6.8 billion sale of London-based Peninsular and Oriental Steam Navigation Co. to Dubai-owned DP World. But Justice Nicholas Warren agreed to stay his ruling until Friday to permit Miami-based Eller & Company Inc. to appeal his decision. Eller presently is a business partner with the British company and has complained that under the sale it will become an "involuntary partner" with Dubai's government.

DP World would assume some operations at six major U.S. ports.

At the Senate Banking Committee hearing, senators said the ports deal should have been subject to greater scrutiny because DP World is government-owned. They said the United Arab Emirates, a loose federation that includes Dubai, has purported ties to terrorism.

Unclear is whether Dubai's relationship with the United States "is sincere or it's just good for business," said Sen. Jim Bunning, R-Ky.

Deputy Treasury Secretary Robert Kimmitt conceded that U.S. agencies should communicate better about the process. "Always room for improvement," he said

The Washington Post first reported the second Dubai investigation on Thursday.

The review panel, known as CFIUS, has faced broad criticism in Congress over its scrutiny of the ports deal, which it approved Jan. 17 after a routine, 30-day review.

In a highly unusual move, DP World offered earlier this week to submit to a broader 45-day investigation to avert an impending political showdown between President Bush and Congress. That formal investigation has not yet started.

Former President Bill Clinton has acknowledged DP World privately sought his advice about two weeks ago over how to respond to the controversy brewing in Washington. Clinton's wife, Sen. Hillary Rodham Clinton, D-N.Y., has been a leading critic of the ports deal.

"He told them that they needed to submit to full scrutiny and they needed to make their proposal safer and more secure for America's ports," said Jay Carson, a spokesman for the former president. Carson said Clinton is supportive of his wife's position on the subject.
All Credit to USA Today at:

http://www.usatoday.com/news/washington/2006-03-02-port-review_x.htm
__________________________________________________________________

The Interactive Nightmare

Todd Datz , CSO (US)

19/08/2004 10:53:28

CONSIDER THE following scenario. Members of a terrorist organization announce one morning that they will shut down the US Pacific Northwest electric power grid for six hours starting at 4 pm; they then do so. The same group then announces that it will disable the primary telecommunications trunk circuits between the US East and West Coasts for a half day; they then do so, despite the best efforts to defend against them. Then, they threaten to bring down the air traffic control system supporting New York City, grounding all traffic and diverting inbound traffic; they then do so. Finally, they threaten to cripple e-commerce and credit card services for a week by using several hundred thousand stolen identities in millions of fraudulent transactions. Their list of actions is then posted in The New York Times, threatening further action if their demands are not met. Imagine the ensuing public panic and chaos.

Alarmist, perhaps? Far from it. The scenario is actually quoted from a letter sent by a group of concerned scientists to President Bush in February 2002. Signatories included O Sami Saydjari, founder of the Cyber Defense Research Center; Matt Donlon, former director of the security and intelligence office at the Defense Advanced Research Projects Agency; and Robert T Marsh, a retired Air Force general and former chairman of the President's Commission on Critical Infrastructure Protection. The scientists don't mince words about the cyberthreats facing the nation: "The critical infrastructure of the United States, including electric power, finance, telecommunications, health care, transportation, water, defense and the Internet, is highly vulnerable to cyberattack. Fast and resolute mitigating action is needed to avoid national disaster."

While the group's scenario was meant to grab attention, it also was grounded in reality. Each of the events depicted has happened (though not concurrently); some resulted from government-sponsored exercises, some from technical failures and some from actual cyberattacks. All could plausibly be triggered by a few knowledgeable people using some PCs and Internet access.

The cyberthreat to the nation's security and economy may not be as well understood to the general public as a dirty bomb or a vial of ricin in the wrong hands. But to experts in cybersecurity — those who know the vulnerabilities of the Internet and do daily combat with hackers, criminals and foreign governments trying to probe our critical infrastructure and military networks — the threat is vividly real. Indeed, the 54 scientists who signed the letter believe that a professionally coordinated cyberattack on the critical infrastructure could ravage not only the US economy (to the tune of hundreds of billions of dollars in damage) but also undermine public confidence in the government's ability to protect its citizens. In fact, although a cyberattack alone may lack the awful human destruction that can accompany a physical attack, because the systems controlling the critical infrastructure are often densely interconnected, such an attack could have more destructive and widespread consequences.

The lead defender in protecting the critical infrastructure is the Department of Homeland Security, a collection of 23 agencies that began operations in January 2003. Spearheading the effort is the National Cyber Security Division, led by Director Amit Yoran. Like the rest of DHS, Yoran and his staff face a steep uphill climb in accomplishing the department's mission. Eight-five percent to 90 percent of the critical infrastructure rests in private hands. Yet in the absence of regulation, which the private sector often views as a poison pill, DHS has no whip; rather, it must play the role of prodder and pleader, reaching out to a leery private sector that knows it needs to harden security but wonders where the money is coming from to pay for it. As a result, many of those private-sector companies may not feel compelled to move as quickly as DHS might like. Compounding the fledgling division's challenges is its organizational immaturity: At the same time it's trying to boost cybersecurity, it's also dealing with the headaches of hiring staff, integrating IT systems, figuring out how to analyze the boatloads of data coursing through its pipelines and how to share that information. All that will take months — some say years — to sort out.

This story looks at the challenges facing DHS and its cybersecurity team, and how they're working with the private sector to address them. While regulations remain a political third-rail within the US business community, DHS and some in Congress are sending signals to CEOs that serious progress had better happen fast or else regulation may turn from threat to reality.

Cybersecurity Makes a Name for Itself

Given the relatively brief history of ubiquitous computing, cybersecurity wasn't addressed at the presidential level until Ronald Reagan signed the Computer Security Act of 1987, a measure aimed at protecting the security and privacy of sensitive information in the federal government's computer systems. Recognizing the growing dependence of the critical infrastructure on information technology, President Clinton formed the President's Commission on Critical Infrastructure Protection in 1996. Led by Robert Marsh (a signatory of the aforementioned letter), the commission, consisting of both public- and private-sector members, set out to develop a national policy and implementation strategy to protect the critical infrastructure from physical and cyberattacks. In 1997, the commission, which focused primarily on the cyberthreat, issued a report that recommended improving structures and processes to promote information-sharing between government and industry, educating citizens on cybersecurity issues, revising certain statutes to address infrastructure assurance concerns and greatly improving funding for R&D into infrastructure protection.

The White House took the report and the growing infrastructure threat to heart. In May 1998, President Clinton issued Presidential Decision Directive 63 (PDD 63), which set forth a framework to address the Marsh Commission's findings. It created the National Infrastructure Protection Center (NIPC) at the FBI; the Critical Infrastructure Assurance Office (CIAO) at the Department of Commerce; and the National Infrastructure Assurance Council (NIAC), consisting of representatives from both the public and private sectors. It also called for the establishment of Information Sharing and Analysis Centers (ISACs). As with the Marsh report, PDD 63 emphasized that infrastructure protection need not be dictated by government but by market forces. Also that month, the president appointed Richard Clarke as the first national coordinator for security, infrastructure protection and counterterrorism.

In January 2000, the White House issued its National Plan for Information Systems Protection, the first stab at creating a comprehensive cyberdefense strategy. The following year, a month after September 11, President Bush established the President's Critical Infrastructure Protection Board to coordinate protection of critical infrastructure information systems and to recommend policies. Clarke, who was appointed special adviser for cyberspace security that same month, chaired the board. But as much as the Clinton and Bush administrations understood the need for better policy coordination, the federal government was, in fact, a hodgepodge of cybersecurity activities. A July 2002 report by the General Accounting Office identified at least 50 organizations involved in national or multinational critical infrastructure cyberprotection efforts.

As the fallout from 9/11 continued, some members of Congress began calling for a Department of Homeland Security to centralize the nation's counterterrorist efforts and protect the homeland. The Homeland Security Act of 2002, which created the department, established the Information Analysis and Infrastructure Protection Directorate (IAIP) within DHS as the place where cybersecurity efforts would now be coordinated.

DHS as Chief Cybercop

As DHS tried to hit the ground running, it needed to spend a good chunk of time just lacing up its shoes. Some observers expressed serious concerns last year when the department absorbed a number of existing organizations that had been making steady progress on cybersecurity in the critical infrastructure. In March 2003, NIPC (except for the Computer Investigations and Operations Section), CIAO and the Federal Computer Incident Response Center were transferred to DHS. Getting those groups under the same umbrella made sense. But Michael Vatis, the founder and former director of NIPC, testified before Congress last April that even though more than 300 positions were transferred from NIPC to DHS, most of the incumbent staffers found other positions in the FBI; only 10 to 20 actually made the move. Further complicating recruitment, DHS had not yet created its National Cyber Security Division.

Whether recruiting has improved is open for debate. James Lewis, senior fellow and director of technology policy at the Center for Strategic & International Studies, says getting talented people to join DHS is still a tough sell. "The problem they have is that DHS is relatively weak, as agencies go. It routinely gets beaten out by the FBI or CIA.... It's the new kid on the block," he says.

On the other hand, Alan Paller, director of research at the SANS Institute, believes Yoran has nabbed a bunch of good hires. "They're building a high-quality technical team — that's what Amit is doing. He knows how to hire really solid technical people and motivate them," Paller says, adding that employees like working with Yoran because, rather than being an inexperienced appointee, he comes from a cybersecurity background. (Yoran, a former military officer, worked at Symantec before joining DHS.)

As the agency struggled to begin operations, it also had to absorb the loss of Clarke, one of the country's foremost cyberterrorism experts. Clarke resigned just before the president removed the position of cybersecurity czar from the White House. Although many observers speculated that Clarke resigned in frustration at the loss of his White House post, he vehemently denies that. "I was not about to be absorbed — anybody that says that doesn't know what they're talking about." Clarke, now chairman of Good Harbor Consulting, says he left "because I'd completed 30 years of government service, because I'd just finished the project I had undertaken for the president, which was developing the National Strategy to Secure Cyberspace."

Howard Schmidt, the former CSO of Microsoft and vice chair of the infrastructure board at the time, succeeded Clarke as a White House adviser on cybersecurity. But within a few months, Schmidt resigned as well, becoming CISO of eBay.

After a long search, DHS Secretary Tom Ridge appointed Yoran to head the new National Cyber Security Division. Yoran, who reports to Assistant Secretary for Infrastructure Protection Bob Liscouski, took office in October.

Even though Yoran has been crowned the new cybersecurity czar, critics worry his kingdom has lost some power. The departures of Clarke and Schmidt and the removal of the cybersecurity position from the White House prompted questions about the administration's commitment to the issue. Clarke himself believes cybersecurity has fallen somewhat off the administration's radar. "Basically, what we've done is taken the former position we had until a year ago — where the senior person worrying about cybersecurity was a special adviser — and now that person is an office director," Clarke says. "That sent a message that was very widely interpreted by industry of the administration downgrading the importance of the issue."

Jeffrey Hunker, former senior director for critical infrastructure in the White House and now a professor of technology and public policy at Carnegie Mellon, agrees. "Now you're putting it essentially below a secretary, several layers down in a big department," he says. "My experience has been that what it really means is a lack of access, or that it limits access to the Cabinet and the presidential level."

Yoran disagrees about the access issue. "I'm there [at the White House] at least once a week, more frequently twice a week. I can assure you cybersecurity has visibility at the most senior levels of the White House and has their attention. Folks who've spent time in Washington know it's very clear the White House doesn't have an operational role. Actual operations take place in the agencies. Placing cybersecurity in DHS very clearly demonstrates we're in the implementation phase of the national strategy," he says. Lewis concurs. "Cybersecurity only makes sense if it's integrated into the larger critical infrastructure strategy. They did the right thing by putting it in Liscouski's group," he says.

Is the National Strategy Sensible or Toothless?

The National Cyber Security Division has a smorgasbord of responsibilities as it continues ramping up. It's tasked with responding to major incidents, conducting cyberspace analysis, improving information-sharing, issuing alerts and warnings, and aiding in national recovery efforts. The division is also charged with implementing the Homeland Security Act of 2002 and the National Strategy to Secure Cyberspace. In announcing creation of the division last June, Ridge said that its work would focus on "the vitally important task of protecting the nation's cyberassets so that we may best protect the nation's critical infrastructure."

The strategy document, like many of the things associated with DHS, has its share of passionate supporters and critics. It lays out five critical priorities:

— Developing a national cyberspace security response system
— Developing a national cyberspace security threat and vulnerability reduction program
— Developing a national cyberspace security awareness and training program
—Securing the cyberspace of all levels of government
— Assuring national security and international cyberspace security cooperation

In autumn 2002, Clarke was set to release the document at a Stanford University ceremony. But before the release, the strategy was put on the back burner. Lobbyists for businesses likely to be affected by the report (including those in the software, security and telecom industries) had successfully squelched certain provisions in earlier drafts. One, for example, called for ISPs to provide users with personal firewalls; another mandated improved wireless security. When the strategy was finally released in February 2003, some complained it had been left with little bark and even less bite. Its main cornerstone was that cybersecurity should, for the most part, be left to the private sector. While business generally applauded the strategy, many security experts derided the reliance on voluntary action as a capitulation to powerful lobbying interests.

Clarke defends the strategy. Referring to those who think it lacks teeth, he says, "That's kind of a trite criticism. People who say that, one assumes, are advocates of government regulation. If there is one-size-fits-all government regulation on cyberspace, you'll have a least-common-denominator solution. Over time, that won't work. Hackers and other criminals will work their way around whatever homogenous solution you come up with."

Schmidt points out that the government sought plenty of input from around the country. "We did 12 town meetings. We met with the public, CEOs, home users and security technicians. Never before had [a strategy] been vetted so thoroughly." Like Clarke, Schmidt says the result was "a good, balanced approach to the problem."

Paller begs to differ. "It lacks teeth, " he says simply, noting that between the first and final drafts, most of the good ideas were lost. "That was the pinnacle of the business power movement in cybersecurity, the last editing of the plan," he says. "The specific proposals — the 'we will' and 'you must' — disappeared."

Assessing the Threat

How vulnerable is the United States to a massive cyberattack on its critical infrastructure? What are the bad guys zeroing in on? "It's absolutely feasible for a massive attack to take out huge segments of the Internet," says Paller. But he adds that the probability of that happening is pretty low. One reason, he says, is that the bad guys earn a living from cybercrime. Taking down the Net would damage their lifeblood, the digital hand that feeds them. Paller thinks a more likely event would be on a smaller scale, such as taking out the electrical system in some areas.

Tom Longstaff, manager of survivable network technologies at the CERT research and analysis centre, is currently focusing on how to look at sensors all over the nation's computer networks to see what kinds of problems are lurking there. The biggest threats he sees fall into two categories. The first is aimed at the Internet itself. "We're seeing attacks targeting specific points in the infrastructure, not necessarily to bring it down, but to control it. These kinds of attacks focus on the mechanisms that make the Internet work," he says. One kind of attack he's seeing more of targets domain name services, undermining trust that the typed URL will bring a user to a legitimate Web page, or that an e-mail will actually go to its intended recipient.

The second worrisome category of attacks involves the interfaces between the cyber and physical worlds: Scada (supervisory control and data acquisition) systems and other process control systems that connect to power grids, gas lines and manufacturing plants. Longstaff notes that in the past, these sorts of physical systems weren't well connected to the Internet. Now, though, as companies have cut personnel and installed technology to make them more automated and efficient, the physical components of the critical infrastructure are much more vulnerable to cyberattack. "There are small computers in the field or in a manufacturing line feeding into larger computers [that] feed into business computers that are connected to the Internet.... In some cases the security is very good. But that's far from the industry standard," he says.

Schmidt sees a huge challenge in trying to understand the interdependencies that exist where electronic networks interface with the physical world. When the Slammer worm hit in January 2003, for example, people couldn't get cash out of some ATMs that connected to back-end databases compromised by the worm. Schmidt worries that the relationship between the cyber and physical infrastructure isn't well understood. He recalls that when he used to ride the train between Washington and New York, he took notice of a bunch of nondescript brick buildings along the tracks in Philadelphia. When he asked local law enforcement officials what they were doing to secure those buildings, he was told, "We're not doing anything. Nobody wants to break into those; they're just computers."

Carrot or Stick?

Last December, DHS, along with four business associations (the Information Technology Association of America, Business Software Alliance, TechNet and the US Chamber of Commerce), organized a National Cyber Security Summit in Santa Clara, California. Some 350 people from government, academia and industry attended the closed event. Working groups were formed to deal with establishing a cybersecurity early warning system; developing technical standards and common criteria around information security; making management of cybersecurity an integral part of corporate governance; creating better security awareness among home computer users and businesses; and increasing security in software development, installation and patch management.

This sort of private-sector outreach is part of DHS's mission, which emphasizes building a strong public-private partnership to tackle cybersecurity. But all wasn't lovey-dovey in Santa Clara, according to Dan Burton, vice president of government affairs for Entrust, a digital identity security company. DHS's Liscouski delivered a stern message to the attendees. "He basically said we're at war. Industry is not doing enough, and we have no qualms about going to Congress and passing legislation to change [industries'] ways. It was a broadside toward industry at large," Burton says.

"That's not the best way to come across to the [private] sector," says Suzanne Gorman, who chairs the financial services ISAC and attended the summit. But with viruses, worms and other attacks sure to continue — and likely become more destructive — DHS seems to be delivering a not-so-subtle message: Industry secure thyself, or we'll start lighting fires under your feet. The five working groups delivered reports last month, and another summit is planned for September. If DHS determines then that enough progress hasn't been made, businesses may hear unpleasant news from Washington.

Waiting in the wings on Capitol Hill, and casting a keen eye on the task forces' progress, is Rep. Adam Putnam (R-Fla.), the youngest member of Congress. Last fall Putnam, who chairs a House subcommittee on technology and information policy, drafted legislation (the Corporate Information Security Accountability Act of 2003) that calls for companies to disclose annually to the SEC an audit of how they're doing on information security. Compliance with Putnam's legislation could involve performing independent corporate security and risk assessments, and developing risk-mitigation, incident-response and business-continuity plans.

Putnam circulated the draft for feedback from industry and other groups. Not surprising, it generated a number of concerns, including the view that more regulation isn't the answer. Says Bob Dix, the subcommittee's staff director, Putnam listened to the private-sector feedback and decided to hold his legislation in abeyance for a period of time. Putnam, Dix says, challenged corporate America to come up with an alternative approach to "meaningfully move the ball down field to get significant improvements." In the meantime, Putnam and his staff assembled a working group from the private sector and academia to report back to him on ways that corporate information security can be improved. His report was due out around the same time as the findings from the Cyber Security Summit working groups.

While Putnam sees regulation as a last resort, Dix implies it's up to the private sector to take action. "The potential for a combined cyber and physical attack is frightening," he says. "We have reason to believe there are vulnerabilities that exist in the critical infrastructure that need to be addressed now."

SIDEBAR: Bunch of Hacks

How vulnerable are the US's computer networks? How much devastation can cyberattacks wreak? According to Mi2g, a digital security company, digital attacks caused an estimated $US185 billion to $US226 billion in economic damage in 2003. Here are some events from recent history that show why.

Eligible Receiver. This is the code name for a 1997 Defense Department exercise. DoD assigned a team from the National Security Agency to see if it could hack into Pentagon computer networks using only publicly available computers and hacking software. No problem, as it turned out. The team took control of Pacific Command Center computers, as well as power grids and 911 systems. A few years later, on the PBS series Frontline, John Hamre, deputy secretary of defense from 1997 to 1999, acknowledged that for "the first three days of Eligible Receiver, nobody believed we were under cyberattack."

Moonlight Maze. The Defense Information Systems Agency discovered that computer systems at the Pentagon, NASA, other government agencies, universities and research labs had been under attack for nearly two years, since March 1998. The attackers broke into hundreds of computer networks, stealing information on contracts, research and unclassified military data, including troop data and maps of military installations. Investigators, who dubbed the investigation Moonlight Maze, traced the hackers to Russia, but the Russian government denied any knowledge of the attacks. Because of the sophisticated "back doors" the attackers built, they continued stealing data for at least three years after the break-ins were discovered.

Code Red. This fast-propagating worm, which struck in July 2001, infected some 260,000 computers in its first 12 hours by exploiting a hole in Microsoft IIS Web servers. In its first variation, affected computers were used to bombard the White House Web site in a denial-of-service attack-which was thwarted. Many other Web sites were defaced with the words, "Hacked by Chinese."

Nimda. "Admin" spelled backward. This worm disrupted the US financial sector a week after September 11. Like Code Red, it exploited flaws in Microsoft IIS Web servers, though on a much broader scale. It spread via e-mail attachments, infected Web pages and other computers linked on a network. Despite the timing, the worm was not linked to the September 11th terrorist attacks.

Slammer. This worm hit computers on January 25, 2003, by exploiting a flaw (for which a patch had been written) in Microsoft's SQL Server 2000 software. It disrupted ATM systems and airline reservation systems, infected a number of large financial institutions and snarled the Internet. Ninety percent of its damage was done in the first 10 minutes, making it, at that time, the fastest cyberattack in history.

Blaster. Aimed mainly at businesses, this worm also was designed to overwhelm one of Microsoft's technical assistance Web sites. It infected computers running Microsoft Windows.

SoBig.F. Bigger than big. Launched in August 2003, it sent itself to all the e-mail addresses in a user's computer, propagating so rapidly that, for a time, one of every 17 e-mails of total e-mail traffic was a copy of the worm.

Mydoom. SCO Group, a Utah-based software company that has made news by claiming IBM is illegally running pieces of its Unix code in their Linux system, was the target of this worm. It struck in January and succeeded in shutting down SCO's Web site, as well as clogging e-mail systems all over the country.

SIDEBAR: Cybersecurity Timeline

1987

JAN. President Reagan signs the Computer Security Act.

1997

OCT. The President's Commission on Critical Infrastructure Protection (known as the Marsh Commission) recommends new cyberdefense initiatives.

1998

MAY President Clinton issues Presidential Decision Directive 63, which creates NIPC, CIAO and NIAC.

2000

JAN. The White House issues its National Plan for Information Systems Protection, the first attempt to create a national cyberdefense strategy.

2001

OCT. President Bush establishes the President's Critical Infrastructure Board and names Richard Clarke as its chairman.

2003

JAN. The Department of Homeland Security begins operations.


FEB. The White House releases the National Strategy to Secure Cyberspace. Clarke resigns; President Bush dissolves the position of cybersecurity czar in the White House.

MARCH DHS absorbs CIAO, the Federal Computer Incident Response Center and most of NIPC.

JUNE DHS creates the National Cyber Security Division (NCSD), located in the Information Analysis and Infrastructure Protection Directorate, and later appoints Amit Yoran to lead it.

DEC. DHS cohosts with four industry associations a National Cyber Security Summit in California; five working groups are established to address specific areas of cybersecurity.

2004

JAN. NCSD launches the National Cyber Alert System.

http://www.csoonline.com.au/index.php/id;604811920;fp;32768;fpid;1641696808_
_____________________________________________________________________________________Who's on First

The objections by the FBI and Pentagon were partly over specialized intrusion detection software known as "Snort," which guards some classified U.S. military and intelligence computers.

Snort's author is a senior executive at Sourcefire Inc., which would be sold to publicly traded Check Point Software Technologies Ltd. in Ramat Gan, Israel. Sourcefire is based in Columbia, Md.

Check Point was told U.S. officials feared the transaction could endanger some of government's most sensitive computer systems. The company announced it had agreed to acquire Sourcefire in October.

The contrast between the administration's handling of the $6.8 billion Dubai ports deal and the Israeli company's $225 million technology purchase offers an uncommon glimpse into the U.S. government's choices to permit some deals but raise deep security concerns over others.

Senate hearings over the ports deal were expected to continue Thursday.

The ongoing 45-day investigation into the Israeli deal is only the 26th of its type conducted among 1,600 business transactions reviewed by the Committee on Foreign Investments in the United States. The panel, facing criticism by Congress about its scrutiny of the ports deal, judges the security risks of foreign companies buying or investing in American industry.

In private meetings between the panel and Check Point, officials from the FBI and Defense Department objected forcefully to permitting any foreign company to acquire some sensitive Sourcefire technology for preventing hacker break-ins and monitoring data traffic, an executive familiar with the discussions told The Associated Press. This executive spoke on condition of anonymity because government negotiations are supposed to remain confidential.

Under the sale, publicly announced Oct. 6, Check Point would own all Sourcefire's patents, source-code blueprints for its software and the expertise of employees.

William Reinsch, a former senior U.S. official who participated in reviews under President Clinton, said the Israeli sale involves more dire security issues than the administration's recent approval for a Dubai-owned company to take over significant operations at six major American ports.

"This raises a lot more important issues," said Reinsch, a former Commerce Department undersecretary. "The most important case is where we're making an irrevocable technology transfer to a foreign party. Port operations raise security issues, but the ports are still in the United States."

The review panel privately notified Check Point on Feb. 6 it intended to fully investigate the transaction's security risks, the executive said. That was days before the furor erupted over the Dubai ports deal. Check Point disclosed the news to investors Feb. 13, but the announcement drew little attention despite escalating scrutiny and interest in Washington over such reviews.

The same panel had approved the ports deal Jan. 17 after a routine, 30-day review. In a highly unusual move, UAE-based DP World offered earlier this week to submit to a broader 45-day investigation to avert an impending political showdown between President Bush and Congress. That formal investigation has not yet started.

Check Point and Sourcefire declined to comment. Officials at the Defense Department, FBI and Justice Department also declined to comment.

All Credit to: Redmondmag.com  and The Associated Press  at
 
http://redmondmag.com/news/article.asp?EditorialsID=7219
________________________________________________________________

Free Computer Security Software Not Catching On

Monday , September 18, 2006

NEW YORK — 

Microsoft (MSFT) gives away a security firewall with its latest operating system. Many high-speed Internet service providers offer free anti-virus protection for subscribers. And several Web sites distribute free toolbars to warn of Web scams.

AOL even recently made a package of basic security tools — anti-virus, anti-spyware and firewall programs — available for free to anyone, not just paying subscribers.

• Click here to visit FOXNews.com's Cybersecurity Center.

Despite all the free protection, primarily for Windows computers, leading security vendors are moving forward with plans to start selling their annual slate of security products this fall.

Why bother, when so much is available elsewhere at no cost?

"I absolutely don't argue that the highly tech-savvy consumer will and can search the Web for freeware and knock out 90, maybe 95 percent of the risk," said Lane Bess, Trend Micro Inc.'s (TMC) general manager for consumer products. "That's not the largest [base of] consumers out there."

Most people, he said, would rather install a package — for $50 in Trend Micro's case — that does everything.

Free often means cobbling a package together:

• Taking the basic firewall that comes with the Service Pack 2 version of Microsoft Corp.'s Windows XP, or getting a stronger one like Check Point Software Technologies Ltd.'s (CHKP) Zone Alarm to monitor and block outbound traffic as well;

• Adding anti-virus protection from a high-speed Internet provider like Comcast Corp. (CMCSA) or Time Warner Inc.'s (TWX) Road Runner;

• Obtaining one or more free spyware removal tools like Spybot Search & Destroy;

• Installing a toolbar from EarthLink Inc. (ELNK) or elsewhere to block Web sites known to engage in e-mail "phishing" scams.

Even AOL's free all-in-one package, which uses technology from McAfee Inc. (MFE) and others, is incomplete, said Joel Davidson, an AOL executive vice president for products and technologies.

Last week, the Time Warner unit announced that subscribers who pay $26 a month will get additional protections, such as a stronger firewall and alerts when malicious software tries to send out a bank account or credit card number.

They'll even get more online storage for backup and free insurance for identity theft and computer damage.

The free stand-alone products have even more limits.

Major e-mail providers scan messages for viruses automatically, but they won't address threats that come from instant-messaging or a rogue Web site, or a virus already on the computer.

Trend Micro's free HouseCall virus scanner covers those situations, but users must remember to periodically perform a check, and they won't be automatically protected in the interim.

Same goes for the free scan from Microsoft; automated scanning comes with Windows Live OneCare, which costs $50 a year for up to three computers and includes computer backup and tuneup services.

And while Microsoft plans a more robust firewall in its upcoming Windows Vista operating system, it's holding back enough to justify selling OneCare separately.

The free Zone Alarm, meanwhile, will generate a pop-up warning when newly installed software attempts to connect to the outside world.

The $40 Zone Alarm Pro will have a continually updated database of programs that researchers know as good or bad, so pop-up prompts only come up in rare cases.

"I don't think [the free version] reduces protection, but it is definitely less convenient," said Laura Yecies, general manager of Check Point's Zone Labs consumer division. "The user is essentially then putting themselves in the role of making determinations."

The free and subscription versions of Grisoft Inc.'s anti-virus and anti-spyware products are nearly identical, but paying customers can get technical help from humans, instead of only the software's help files and Web site documents.

And free software won't come with the ability for companies to easily update all their computers remotely, an issue for larger organizations, said Johannes B. Ullrich, chief research officer with the SANS Institute security group.

Google Inc. (GOOG), Yahoo Inc. (YHOO) and computer manufacturers distribute free security products as well, but they are trial versions often with features disabled, said Kraig Lane, Symantec Corp.'s (SYMC) manager for consumer security products.

The six-month Symantec software bundled with Google, for instance, will block known viruses but won't detect unknown ones, based on behavioral patterns, in the hours before a software update can be developed and distributed for new threats.

"We want to have a little extra value" for paying customers, Lane said.

Other restrictions are in the free software's license terms.

A standalone version of AOL's anti-virus software, from Kaspersky Lab, comes with terms that permit AOL to send e-mail marketing messages, while Sophos Inc. gives free software only if a person's employer or school is already a paying customer.

Some security is better than no security, said Bruce Schneier, a computer security expert with Counterpane Internet Security Inc. "I can complain about them (the free products), but going out free to millions and millions of users, you have to like that."

Yet it's not entirely clear how many users even know of the free offerings.

Bari Abdul, McAfee's vice president for consumer marketing, said Internet users often configure their browsers to bypass home pages that high-speed service providers use to promote free software.

AOL subscriber Gail Taylor, a teaching assistant at the University of Illinois at Urbana-Champaign, said she never knew AOL gave away security software.

But even after checking a number of free products at the request of The Associated Press, she said she still couldn't decide which of the free or fee offerings work best for her. She said she'd need to find time for more research, leaving her computer largely unguarded for now.

Consumers who do install free products may be left with a false sense of security, added David Luft, a senior vice president for security vendor CA Inc.

"Some of those limitations aren't always obvious to the end users until they run into a problem they thought might be addressed," he said. "They think they have something that's fully protecting them, when in reality they don't protect in a way they might need."

All Credit Fox News and Associated Press at:
http://www.foxnews.com/printer_friendly_story/0,3566,214285,00.html_
_________________________________________________________

Israelis Hold Keys to NSA  Critical U.S. Government and Military Computer Networks using Israeli "Security" Software by Christopher Bollyn 15 June 2006 The most critical computer and communication networks used by the U.S. government and military are secured by encryption software written by an Israeli "code breaker" tied to an Israeli state-run scientific institution.

Photo: Amit Yoran, the Israeli "Cyber Security Czar" appointed by President George W. Bush in 2003. Yoran has held various positions since the 1990s in which he oversaw computer security for the Dept. of Defense computers. Although he and his brother reportedly grew up in Pound Ridge, New York during the 1970s and 1980s, the heads of the Jewish community told AFP that they had never heard of him. One said that she had conducted a survey of the Jews living in the small village of Pound Ridge in the 1970s and she would have remembered if a wealthy Israeli family named Yoran had been found. Why did the locals in Pound Ridge NOT remember the Yorans? Probably because they were NOT in Pound Ridge - but in Israel. The Pound Ridge address was used to give the appearance that the Yorans were Americans. I spoke with Elad and he has a distinctive Israeli accent - not what you would expect for a guy who grew up in a posh Yankee village. So who are the Yorans? Who are their parents and why did they come to the United States? To raise a couple high-level moles to infiltrate the most sensitive U.S. computer networks? How could they have lived for 20 years in Pound Ridge and NOT be remembered.

The National Security Agency (NSA), the U.S. intelligence agency with the mandate to protect government and military computer networks and provide secure communications for all branches of the U.S. government uses security software written by an Israeli code breaker whose home office is located at the Weizmann Institute in Israel. A Bedford, Massachusetts-based company called RSA Security, Inc. issued a press release on March 28, 2006, which revealed that the NSA would be using its security software: "U.S. Department of Defense Agency Selects RSA Security Encryption Software" was the headline of the company's press release which announced that the National Security Agency had selected its encryption software to be used in the agency's "classified communications project." RSA stands for the names of the founders of the company: Ronald L. Rivest, Adi Shamir, and Leonard M. Adleman. Adi Shamir, the lead theoretician, is an Israeli citizen and a professor at the Weizmann Institute, a scientific institution tied to the Israeli defense establishment. "My main area of research is cryptography – making and breaking codes," Shamir's webpage at the Weizmann Institute says. "It is motivated by the explosive growth of computer networks and wireless communication. Without cryptographic protection, confidential information can be exposed to eavesdroppers, modified by hackers, or forged by criminals." The NSA/Central Security Service defines itself as America’s cryptologic organization, which "coordinates, directs, and performs highly specialized activities to protect U.S. government information systems and produce foreign signals intelligence information." The fact that the federal intelligence agency responsible for protecting the most critical computer systems and communications networks used by all branches of the U.S. government and military is using Israeli-made encryption software should come as no surprise. The RSA press release is just the icing on the cake; the keys to the most critical computer networks in the United States have long been held in Israeli hands. AFP inquired with the NSA about its use of Israeli-made security software for classified communications projects and asked why such outsourcing was not seen as a national security threat. Why is "America’s cryptologic organization" using Israeli encryption codes? NSA spokesman Ken White said that the agency is "researching" the matter and would respond in the coming week. American Free Press has previously revealed that scores of "security software" companies – spawned and funded by the Mossad, the Israeli military intelligence agency – have proliferated in the United States. The "security" software products of many of these usually short-lived Israeli-run companies have been integrated into the computer products which are provided to the U.S. government by leading suppliers such as Unisys. Unisys integrated Israeli security software, provided by the Israel-based Check Point Software Technologies and Eurekify, into its own software, so that Israeli software, written by Mossad-linked companies, now "secures" the most sensitive computers in the U.S. government and commercial sector. The Mossad-spawned computer security firms typically have a main office based in the U.S. while their research and development is done in Israel. The Mossad start-up firms usually have short lives before they are acquired for exaggerated sums of money by a larger company, enriching their Israeli owners in the process and integrating the Israeli directors and their Mossad-produced software into the parent company. RSA, for example, an older security software company, acquired an Israeli-run security software company, named Cyota, at the end of 2005 for $145 million. In January 2005, Cyota, "the leading provider of online security and anti-fraud solutions for financial institutions" had announced that "security expert" Amit Yoran, had joined the company's board of directors. Prior to becoming a director at Cyota, Yoran, a 34-year old Israeli, had already been the national "Cyber Czar," having served as director of the Department of Homeland Security's National Cyber Security Division. Yoran had been appointed "Cyber Czar" at age 32 by President George W. Bush in September 2003. Before joining DHS, Yoran had been vice president for worldwide managed security services at Symantec. Prior to that, he had been the founder, president and CEO of Riptech, Inc., an information security management and monitoring firm, which Symantec acquired in 2002 for $145 million. Yoran and his brother Naftali Elad Yoran are graduates of the U.S. Military Academy at Westpoint. Elad graduated in 1991 and Amit in 1993. Along with their brother Dov, the Yoran brothers are key players in the security software market. Amit has also held critical positions in the U.S. government overseeing computer security for the very systems that apparently failed on 9/11. Before founding Riptech in 1998, Yoran directed the vulnerability-assessment program within the computer emergency response team at the US Department of Defense. Yoran previously served as an officer in the United States Air Force as the Director of Vulnerability Programs for the Department of Defense's Computer Emergency Response Team and in support of the Assistant Secretary of Defense's Office. In June 2005, Yoran joined the board of directors of Guardium, Inc., another Mossad-spawned "provider of database security solutions" based in Waltham, Massachusetts. Guardium is linked with Ptech, an apparent Mossad "cut out" computer security company linked with the 9/11 attacks. Ptech, a computer software company in Quincy, Mass., was supposedly a small start-up company founded by a Lebanese Muslim and funded by a Saudi millionaire. Yet Ptech's clients included all the key federal governmental agencies, including the U.S. Army, the U.S. Air Force, the U.S. Naval Air Command, Congress, the Department of Energy, the Federal Aviation Administration, the Internal Revenue Service, NATO, the Federal Bureau of Investigation, the Secret Service and even the White House. The marketing manager at Ptech, Inc. when the company started in the mid-1990s, however, was not a Muslim or an Arab, but an American Jewish lawyer named Michael S. Goff who had suddenly quit his law firm for no apparent reason and joined the Arab-run start-up company. Michael S. Goff  Goff was the company's information systems manager and had single-handedly managed the company's marketing and "all procurement" of software, systems and peripherals. He also trained the employees. Goff was obviously the key person at Ptech. In the wake of 9/11, during the Citizens' Commission hearings in New York, Indira Singh, a consultant who had worked on a Defense Advanced Research Project, pointed to Ptech and MITRE Corp. being involved in computer "interoperability issues" between the FAA and NORAD. At this time Ptech's ties to Arabs was the focus, and Goff was out of the picture. "Ptech was with MITRE Corporation in the basement of the FAA for two years prior to 9/11," Singh said. "Their specific job is to look at interoperability issues the FAA had with NORAD and the Air Force in the case of an emergency. If anyone was in a position to know that the FAA – that there was a window of opportunity or to insert software or to change anything – it would have been Ptech along with MITRE." The Mossad-run Guardium company is linked with Ptech through Goff Communications, the Holliston, Mass.-based public relations firm previously run by Michael S. Goff and his wife Marcia, which represents Guardium. Since being exposed in AFP in 2005, however, Michael's name no longer appears on the company website.

 

Important: Bollyn's provides his articles for free.

http://www.iamthewitness.com/Bollyn-Israel-NSA.html_
_________________________________________________________________

Al Gore's Red China policy

---

Posted: September 13, 2000
1:00 a.m. Eastern

In 1993 Al Gore was charged by a presidential directive to oversee U.S. secure communications and encryption export policy. The vice president is documented as running the high-tech federal export policy from a White House Interagency Working Group that advised President Clinton.

In 1994, Gore advised President Clinton to ban the export of books. More precisely, in November 1994, the White House National Security Council directly approved the decision to deny a request to export encryption computer source code published in a book. The source code appeared in text format on a diskette that was sold with the book in retail store outlets.

A letter written by Wendy Sherman, then State Department Assistant Secretary of Legislative Affairs, illustrates Al Gore and his encryption policy. Not only was the letter provided to Bill Clements of the National Security Council for White House approval, the document also included a fax on the export problem titled "TO: Pres. Clinton."

"The decision that controls should continue was based on several considerations," wrote Ms. Sherman. "The administration will continue to restrict export of sophisticated encryption devices, both to preserve our own foreign intelligence gathering capability and because of the concerns of our allies who fear that strong encryption technology would inhibit their law enforcement capabilities. One result of the interagency review of Mr. Karn's disk was a determination that the source code on it is of such a strategic level as to warrant continued State Department licensing."

Of course, anyone wishing to purchase the disk of encryption source code could do so from an insecure bookstore. The disk could easily pass by Customs or the computer source code could even be e-mailed from an anonymous account to any point on the globe. In addition, there are the other dangerous possibilities that a terrorist could scan the source code in with a scanner or even the old tried and true method of simply keying in the source code from the printed text.

Another example of the Gore trade policy occurred in 1995. In October 1995, Ron Brown led a trade mission to China. One deal the administration struck with the Chinese leadership was for the leading U.S. computer security company, RSA of California, to sell encryption technology directly to the Chinese Laboratory Of Information Security. LOIS is also known as the home of Chinese information warfare studies for the People's Liberation Army.

The deal between LOIS and RSA has Gore roots. In November of 1995, Al Gore made a call from the White House to a DNC supporter named Sanford Robertson. Al made that call on the taxpayer's tab. Sanford Robertson obliged by coughing up $100,000; $80,000 going to soft money and $20,000 directly into Al Gore's 1996 campaign fund.

In 1995 Sanford Robertson and his investment company, Robertson and Stephens, were the investment bankers for Boston based Security Dynamics Inc., a supplier of computer security systems. Robertson and Stephens also sponsored Security Dynamics stock issues.

In 1995, Security Dynamics decided to purchase RSA of California. Robertson and Stephens wrote the merger document between Security Dynamics and RSA for a two million dollar fee. By April 1996, the merger was completed, Security Dynamics bought RSA, and Robertson's company pocketed the fee.

There is evidence that Al Gore was not unaware of RSA and the encryption exports to China. Gore had a previous official interest in RSA. During a 1998 interview, RSA Chairman Jim Bidzos stated that Al Gore was involved in a 1994 effort by the Clinton administration to purchase RSA patent technology.

According to Bidzos, in 1994 the top legal counsel for Commerce Secretary Ron Brown, Ginger Lew, met with the RSA chairman when the Clinton administration launched an initiative to purchase some of RSA's patents. Curiously, Bidzos stated that Ms. Lew announced she was on a mission from Vice President Al Gore.

"I did not meet with Al Gore on this," answered Mr. Bidzos when asked about the Vice President's role in the patent purchase.

"Only Ginger Lew and four other lawyers, but they did say they were there on his (Al Gore's) authority. It was in early 1994, in March, I think. I have never met personally with Al Gore (nor have I ever spoken with him on the phone), only government representatives (Ginger Lew) who claimed to be meeting me on his authority."

Another example of Al Gore's encryption export policy occurred when Motorola determined it wanted to sell high-tech equipment to China. Under the Clinton/Gore administration Motorola was able to sell encrypted radios and the Iridium satellite encrypted control system to China.

"This is to request that your office initiate action to obtain a waiver from requirement for individual export license notifications to Congress for wireless mobile communications systems containing encryption for China," wrote Motorola executive Richard Barth to the State Department.

"Such a waiver was issued by the President in September of this year for civilian satellite systems and encrypted products for use by American firms operating in China," noted Motorola executive Barth.

President Clinton eventually approved the Motorola request. By July 1995, the CEO of Motorola, Gary Tooker wrote a personal note to Ron Brown, expressing his gratitude for Clinton's signature approving the encryption export to China.

"I am writing to thank you," wrote Tooker. "And some key members of the Commerce Department for your assistance in obtaining the Presidential waiver for encryption export sales to China."

There are other examples of the Clinton/Gore export policy. Under Gore's tenure Loral was able to export encrypted satellite and telemetry control systems to the Chinese army. One such export, a board of radiation hardened encryption electronics, was missing after a Chinese space rocket crashed. The board has never been recovered.

According to a GAO report on encryption exports, the Clinton-Gore administration approved the direct transfer of secure communications to the Chinese army.

"Waivers were also granted to permit the export of encryption equipment controlled on the Munitions List," states the report. "One case involved a $4.3-million communications export to China's Air Force."

Gore could have intervened with the Commerce Department or with President Clinton directly and prevented the exports to China. Clearly, Al Gore as administration guru on encryption approved the bent policies that restrict the personal use of computer security software by Americans while allowing the export of military level systems. The Clinton/Gore policy to restrict the "export of sophisticated encryption devices" may have included source code in a book but it did not include military hardware for the People's Liberation Army.

---

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=20583

Charles Smith is a national security and defense reporter for WorldNetDaily. Visit his site, Softwar.
_____________________________________________________________________________________

Dead men tell no tales -- Part 2

WorldNetDaily
Tuesday, March 23, 1999
Charles R. Smith

In 1994, "American" businessman K.S. Wu traveled with Ron Brown to Communist China. Today, Mr. Wu is reported to be dead, and no one in the Democratic Party (Democratic National Committee) wants to talk about him.

In my last column, we learned that, in August 1994, Mr. Wu accompanied Ron Brown to China and Hong Kong. Wu was invited to various special events, including a post Hong Kong dinner and Democrat fund-raiser.

Wu traveled with several major DNC donors, including Bernard Schwartz, CEO of Loral [Space Communications]; Sanford Robertson, CEO of Robertson & Stephens [a technology investment bank]; Democratic Gov. Caperton of West Virginia; and Edwin Lupberger, CEO of Entergy Corp.

Entergy Corp., of course, is part owned by the Riady family and the Lippo Group.

In fact, Wu actually worked for Chinese billionaire Li Ka-Shing. According to documents provided by the Commerce Department, Wu, Lupberger, Caperton and Brown met with PRC billionaire Li Ka-Shing in Beijing during the 1994 trip.

K.S. Wu, CEO of a so-called "American" firm, traveled at the expense of the U.S. taxpayers, to meet his Chinese boss Li Ka-Shing. Li Ka-Shing owns the vast shipping enterprise, Hutchison Whampoa, Ltd. Li works closely with the official PRC shipping carrier, COSCO. Li and COSCO own both ends of the Panama canal. Li and COSCO tried to buy the former Navy port at Long Beach.

Li financed several satellite deals between Hughes and China Hong Kong Satellite (CHINASAT), a company half owned by the Peoples Liberation Army (PLA). Li Ka-Shing and the Chinese navy nearly obtained four huge roll-on/roll-off container ships, financed by loans backed by U.S. Treasury notes.

The bio of Li Ka-Shing was forced from the White House by this author during a lawsuit filed in federal court. The Commerce Department claimed the material was withheld for review by another "agency." In fact, the material was secretly sent by Commerce to the real authors, the White House, which is not an agency. The legal "Catch-22" situation was all too obvious to Commerce and White House lawyers who caved in rather than being made to look stupid in front of a Federal Judge.

The reason for the resistance becomes all too clear when Li Ka-Shing's bio is compared to the accompanying materials forced from the grips of the White House. Li was the only so-called "civilian." Li's bio was included by the White House along with the entire leadership of Communist China from Jiang Zemin to the mayor of Shanghai.

The Long Beach affair demonstrated that Li Ka-Shing is an agent of Beijing. The White House material clearly shows that Mr. Li Ka-Shing is a member of the Communist government. The Long Beach deal led by Li Ka-Shing was clearly a national security threat. It was canceled after U.S. intelligence sources revealed that Li Ka-Shing's empire is used for PRC espionage. Li Ka-Shing provides fronts for Chinese military operations and "civilian" covers for PLA soldiers to enter the U.S. under "commercial" camouflage.

In 1995, Mr. K.S. Wu of Pacific Century -- a company owned by Li Ka-Shing, teamed with Sen. Jay Rockefeller of West Virginia to provide Red China with an airbase only 50 miles from downtown Washington, D.C.

According to a January 1996 speech by Gov. Caperton on the Democrats' website, "Mr. Wu was a trusted adviser to Sen. Rockefeller and me. He was instrumental in helping Senator Rockefeller develop the Swearingen aircraft project. He was also extremely helpful in expanding our relationships with China and Japan. We extend to his family our deepest respect and sympathy. His death is a deep loss to West Virginia."

Today, Sen. Rockefeller will not comment on either the departed Mr. Wu, or the Li Ka-Shing airbase at Martinsburg, West Virginia. The Jan. 1996 speech by Governor Caperton published on the Democrats' website was removed from the Internet immediately after I submitted a fax copy to Sen. Rockefeller's office in Washington, D.C.

Yet, in 1996, Sen. Rockefeller led a delegation of Asian investors to Martinsburg, West Virginia. According to Gov. Caperton, K.S. Wu was instrumental in helping Rockefeller bring the Asian investors to West Virginia.

In fact, these investors were so special that Rockefeller ran a VIP train to transport them to West Virginia from Washington, D.C. The joint U.S.-Sino delegation broke ground for a new aircraft plant now located at the Martinsburg airport under a project called "Sino-Swearingen SJ-30."

The Sino-Swearingen plant in West Virginia is a joint project between Texas based Swearingen aircraft, the AFL-CIO, and Sino-Aerospace Investment Corporation. The joint interests of PRC billionaire Li Ka-Shing, a big U.S. union, and Sen. Rockefeller were teamed up to manufacture business jets in the remote mountains of rural West Virginia.

The so-called SJ-30 "business" jet is state-of-the-art. The SJ-30 can travel 2,500 miles at nearly the speed of sound and is rated to cruise at 49,000 feet. The SJ-30 is considered to be the leading edge of U.S. commercial aerospace technology and includes all the latest in avionics such as GPS navigation.

The immense speed, range and altitude capability of the SJ-30 can be attributed to the twin Rolls Royce/Williams FJ-44 turbofans that power it. The Williams FJ-44 is also used in the Swedish SK-60 military attack trainer and powers the USAF DarkStar stealth robot spy plane. Williams is best known for making the jet engines for U.S. Tomahawk and ALCM cruise missiles.

The Sino-Swearingen facility is located at the Martinsburg airport just south of the town along U.S. Rt. 81. Martinsburg is a key point in the West Virginia hills, located only 50 miles from downtown D.C. The narrow valley is a major north/south and east/west crossing for U.S. microwave and fiber-optic telecommunications. The Martinsburg airport is supported by the U.S. taxpayer via the National Guard facilities and the airport ground facilities, such as fire and rescue.

In 1996, a host of the Asian officials attending the groundbreaking included Dr. Shih-Chein Yang of Taiwan Aerospace and Benjamin Lu of the Taipei Economic office. In fact, the entire groundbreaking at Martinsburg is covered in detail on Sen. Rockefeller's web page, including a wonderful photograph of Rockefeller and several Asian businessmen with shovels in hand.

In 1996, Jay Rockefeller had very close ties to the real money behind the Sino-Swearingen aerospace deal, Li Ka-Shing. Li Ka-Shing is also a known PLA operative. Today, Asian "engineers" roam the hills of West Virginia with a "commercial" cover. The perfect location, complete with jets to test fly and a huge facility constructed to order was paid for by American and Chinese taxpayers.

There are two more twists to this tale of a PRC base only 50 miles from the White House. A fellow reporter, Danny Casolaro, was murdered in Martinsburg West Virginia while investigating Hillary Clinton and her business connections to an Arkansas airport called Mena.

Casolaro was found in his Martinsburg hotel with his wrists slashed in 1991. He was reportedly trying to meet an informant who had documented evidence of the involvement of the CIA and NSA in dope smuggling to support military operations in Central America. Casolaro was murdered after he had linked Rose Office clients with the NSA attempts to penetrate foreign banks to monitor drug dealing and money-laundering.

The worst news comes not from a dead reporter but a living hero. Softwar has obtained an exclusive interview with former GRU Colonel Stanislav Lunev. Col. Lunev is the highest-ranking member of the former Soviet Union intelligence services to defect to America. He is, to this day, surrounded by FBI agents for his protection.

In 1999, I presented the K.S. Wu information to Colonel Lunev for his evaluation. According to Col. Lunev, Russian and Chinese army operatives in the U.S. have created large stockpiles of arms for use in time of war. These communist weapon caches are reportedly hidden all over America. According to Lunev, the Chinese and Russian weapon stockpiles include explosives, nerve gas, anthrax and as many as 120 "suitcase" nuclear bombs!

I have confirmed Colonel Lunev's story with several members of Congress. Red China and Russia have pre-positioned nuclear, chemical and biological weapons on American soil with the intent of destroying our nation. President Clinton and Congress are aware that China and Russia have smuggled nuclear bombs into the United States.

Li Ka-Shing and his new airbase in Martinsburg are the perfect delivery points for PRC special forces operations. Chinese Army operatives in Li Ka-Shing's employ can be "activated" years after being planted, whenever needed.

For example Charlie Trie, Johnny Chung, John Huang, Hua Di and K.S. Wu all had the perfect "civilian" credentials. Trie, Chung, and Huang await justice in America but Wu is dead and Hua Di has "defected" back to China.

According to Lunev, PRC special forces agents are rotated on a regular basis in and out of America, usually through diplomatic sites at the U.N. or the PRC Embassy. Washington and New York are only minutes away from Martinsburg by jet.

A so-called "civilian" project could put PRC bombers over the U.S. capitol without warning. A single "business" jet with a suitcase bomb could fly to ground zero with satellite navigation accuracy and a GPS autopilot. Such an unmanned flight in the crowded skies of Washington D.C. would go unnoticed until the final fatal second.

The surprise nuclear attack will kill the entire U.S. leadership. U.S. military leaders in the Pentagon, the White House, Congress, the Supreme Court and nearly a million Americans will die in a single flash.

If there were enough concerns to shut down the planned PRC takeover of Long Beach then the PRC airbase in Martinsburg should at least also undergo close scrutiny. The relationship between Li Ka-Shing, Ron Brown, K.S. Wu, Sen. Rockefeller and Bill Clinton should be investigated by an FBI director and attorney general interested in protecting the national security.

We need to kick out known espionage agents and close their front operations. Covert operations to put atomic bombs on American soil are an act of war. We should confront the Red Chinese and Russian leadership with a demand to remove these devices at once. The threat now lies buried in our own soil, next to our homes and within minutes of our nation's capitol.

back   All Credit to  WWW.Pehi.EU and Worldnet Daily.Com

http://www.pehi.eu/organisations/introduction/1999_03_23_WND_Dead_men_tell_no_tales.htm
_____________________________________________________________________________________  Here’s how each network’s Wednesday, December 30 evening show handled the China report:

     -- ABC’s World News Tonight. Anchor Kevin Newman gave it 22 seconds: "A report released today by a special congressional committee claims that technology deals over the past two decades with China have damaged U.S. national security, but a lot of the details were not made public. The investigation was begun after allegations that contributions to the Democratic Party influenced the illegal transfer of satellite technology to China which China then used in weaponry."

     -- NBC Nightly News. Anchor Brian Williams took 26 seconds to relay: "Across town at Capitol Hill there is news that a new report concludes some technology deals made between American businesses and China did in fact hurt U.S. national security. The report is from the special bi-partisan House committee and reveals China got access not only to rocket and satellite technology, but also to sensitive military technology. The report offers almost 40 different proposals to keep that from happening again."

 
     -- CNN’s The World Today. Pierre Thomas provided a full report with soundbites of select committee Chairman Chris Cox and ranking Democrat Norman Dicks. Thomas emphasized the bi-partisan aspect: "The 700-page report unanimously approved by five Republicans and four Democrats focuses in part on two U.S. space and communications companies, Loral and Hughes Electronics." But Thomas concluded by worrying about the impact on relations with China: "The classified report makes 38 recommendations, including some that would make it more difficult for the Chinese to obtain U.S. technology. That could have a chilling effect on U.S.-Chinese relations."

     -- FNC’s Fox Report. Gary Matsumoto summarized the Cox committee report, explaining how after a 1996 crash of a rocket carrying a satellite, in helping the Chinese identify the problem, Loral transferred missile guidance technology to the Chinese. Over video of Bernard Schwartz shaking hands with Clinton, Matsumoto uniquely reminded viewers: "There’s been lingering suspicion, still unproven, that Loral CEO Bernard Schwartz, seen here with the President, received a waiver to export the technology after making a $100,000 contribution to the Democratic Party in June 1994. Schwartz says there was no connection. It was a unanimous ruling reached by a bipartisan committee..."

     -- CBS Evening News. Anchor John Roberts topped the broadcast:
     "The alarm bells have been ringing for years, over trade deals that sent U.S. military technology to communist China. Tonight a congressional investigation has concluded that some of those deals did in fact pose a danger to U.S. national security. Much of the report is secret, but CBS’s Jim Stewart has the big picture of how American hardware and know-how wound up in China’s war machine."

     Stewart explained how "the business deals at issue date back to 1989 when former President Bush, and later President Clinton, approved waivers allowing U.S. satellites to be launched aboard Chinese rockets." He concluded: "At least two more shoes are set to drop in this matter. Still unanswered is whether any of those trade waivers were influenced by campaign contributions to the Clinton administration and the outcome of a Justice Department investigation into whether any U.S. companies broke the law by giving the Chinese perhaps too much advice."

     The alarm bells have been ringing for years? Bells that haven’t previously awoken CBS. As two MediaWatch items from earlier this year detailed, except for FNC, the networks have shown little interest in this non-Monica scandal.

     From the June 1 MediaWatch:
Another Clinton headache arrived in the April 4 New York Times. Jeff Gerth and Raymond Bonner reported the Justice Department was looking to prosecute two defense contractors who may have illegally provided China with space expertise that "significantly advanced Beijing's ballistic missile program." But in February, Bill Clinton "quietly approved the export to China of similar technology by one of the companies under investigation." The Times noted the Chairman of that company, Loral, one Bernard Schwartz, was the largest individual contributor to the Democratic National Committee last year. Network coverage? Nothing except on the Fox News Channel, which reported it 11 days later.

On May 15, the New York Times reported that Johnny Chung told investigators that a large part of the almost $100,000 he gave Democrats in the summer of 1996 came from Liu Chaoying, who works on defense modernization, such as satellite technology, for China's People's Liberation Army. Two days later, the Times added how Clinton overrode then-Secretary of State Warren Christopher's decision to limit China's ability to launch U.S.-made satellites on Chinese rockets.

Where were the networks? On the 15th, in the midst of heavy coverage of Frank Sinatra's death, ABC devoted 75 seconds to it, CBS 27, and NBC 15. Two nights later, ABC reported one story, but CBS and NBC ignored it. A few nights later, the networks each devoted a few seconds to Newt Gingrich's announcement of a special committee to investigate the China matter (ABC 17, CBS 18, NBC 23). It took CBS five nights before it aired a full story, NBC six (offering only 62 seconds in the first five nights)....

     From the November 2 MediaWatch:
In a front-page story for the October 19 New York Times, reporters Jeff Gerth and Eric Schmitt followed up on the controversial sale of missile technology to China with a story on how Clinton’s decision to relax export rules, made after he met high-tech executives who later contributed to the DNC, "enabled Chinese companies to obtain a wide range of sophisticated technology, some of which has already been diverted to military uses."

So did the networks jump at the chance to cover a story involving something other than Monica Lewinsky? No. After spending months lamenting their obsession with sex scandals, the networks did not devote a single word that night, the following morning or rest of the week to the substantive issue of China diverting U.S. technology for military use. While all the networks focused on Clinton’s role in negotiating a new Middle East peace accord, none have aired a single story on the missile technology diversion story since early June....

END Excerpts

http://www.mediaresearch.org/cyberalerts/1998/cyb19981231.asp#1_
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Results: 191 records found in 4.8594 seconds.   Total for this search: $1,102,262 Contributor	Occupation	Date	Amount	Recipient
ROBERTSON, SANFORD MENLO PARK,CA 94025	FRANCISCO PARTNERS	10/25/2002	$50,000	DSCC/Non-Federal Unicorp Assoc
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	FRANCISCO PARTNERS	9/18/2000	$50,000	DSCC/Non-Federal Unicorp Assoc
ROBERTSON, SANFORD MENLO PARK,CA 94025	FRANCISCO PARTNERS	6/24/2002	$25,000	DSCC/Non-Federal Unicorp Assoc
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	FRANCISCO PARTNERS	6/8/2001	$25,000	DSCC/Non-Federal Unicorp Assoc
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS	1/23/1996	$20,000	Democratic National Committee
ROBERTSON, SANFORD MENLO PARK,CA 94025	FRANCISCO PARTNERS	3/28/2003	$10,000	Democratic Senatorial Campaign Cmte
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	ROBERTSON STEPHENS & COMPANY	10/5/1993	$10,000	Democratic Congressional Campaign Cmte
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS	6/28/1999	$5,000	PAC to the Future
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS	6/29/2005	$2,100	Lieberman, Joe
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS	6/29/2005	$2,100	Lieberman, Joe
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS	6/5/2006	$2,100	Casey, Bob
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS/CIVIC VOLUNTEER	10/12/2006	$2,100	Ford, Harold E Jr
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS/FOUNDER	10/11/2006	$2,100	Lieberman, Joe
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS/INVESTMENT MANAG	10/12/2006	$2,100	McCaskill, Claire
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS/INVESTMENT MANAG	10/12/2006	$2,100	Webb, James
ROBERTSON, SANFORD MENLO PARK,CA 94025	FRANCISCO PARTNERS	5/8/2002	$2,000	Democratic Senatorial Campaign Cmte
ROBERTSON, SANFORD MENLO PARK,CA 94025	FRANCISCO PARTNERS	5/28/2002	$1,000	Democratic Senatorial Campaign Cmte
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	FRANCISCO PARTNERS	6/6/2001	$1,000	Cleland, Max
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	FRANCISCO PARTNERS	6/6/2001	$1,000	Cleland, Max
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS	12/3/1993	$1,000	Kerrey, Bob
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	ROBERTSON STEPHENS	3/1/1993	$1,000	Kerrey, Bob
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS	3/31/1996	$1,000	Strickland, Tom
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS CO	2/26/1996	$1,000	Bruggere, Tom
ROBERTSON, SANFORD ,		3/16/1998	$1,000	Technology Network Federal PAC
ROBERTSON, SANFORD ,		3/16/1998	$1,000	Technology Network Federal PAC
ROBERTSON, SANFORD SAN FRANCISCO,CA 94101	ROBERTSON & STEPHENS CO	3/20/1998	$1,000	Boxer, Barbara
ROBERTSON, SANFORD SAN FRANCISCO,CA 94101	ROBERTSON & STEPHENS CO	3/20/1998	$1,000	Boxer, Barbara
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	FRANCISCO PARTNERS/PARTNER	3/6/2002	$1,000	Dooley, Cal
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	FRANCISCO PARTNERS/PARTNER	3/6/2002	$1,000	Dooley, Cal
ROBERTSON, SANFORD SAN FRANCISCO,CA 94111	VENTURE CAPITALIST	4/21/2001	$1,000	Cantwell, Maria
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENN & CO	9/5/2001	$1,000	Johnson, Tim
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENN & CO	9/11/2002	$1,000	Johnson, Tim
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS AND COMPANY	6/20/2002	$1,000	Kirk, Ron
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS AND COMPANY	6/20/2002	$1,000	Kirk, Ron
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS AND COMPANY	6/20/2002	$1,000	Kirk, Ron
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	FRANCISCO PARTNERS	5/31/2002	$1,000	Feinstein, Dianne
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	ROBERTSON STEVENS & CO	9/19/2002	$1,000	Daschle, Tom
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	ROBERTSON STEVENS & CO	9/19/2002	$1,000	Daschle, Tom
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	S R ROBERTSON & CO	1/4/1999	$1,000	Lieberman, Joe
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	S R ROBERTSON & CO	6/14/1999	$1,000	Lieberman, Joe
ROBERTSON, SANFORD SAN FRANCISCO,CA 94115	SR ROBERTSON AND COMPANY	3/17/2000	$1,000	Stabenow, Debbie
ROBERTSON, SANFORD SAN FRANCISCO,CA 94109	ROBERTSON STEPHENS	8/30/1999	$1,000	Kerrey, Bob
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104		9/9/1996	$1,000	Voters for Choice/Frnds of Fam Planning
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENN & CO	10/21/1995	$1,000	Johnson, Tim
ROBERTSON, SANFORD SAN FRANCISCO,CA 94101	ROBERTSON & STEPHENS CO	4/16/1998	$1,000	Boxer, Barbara
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	AGENDA FOR THE 90'S	10/27/1998	$1,000	Reid, Harry
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS	1/28/1998	$1,000	Kerrey, Bob
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEPHENS & COMP	7/25/1997	$1,000	Torricelli, Robert G
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEVENS & CO	4/2/1997	$1,000	Daschle, Tom
ROBERTSON, SANFORD SAN FRANCISCO,CA 94104	ROBERTSON STEVENS & CO	4/2/1997	$1,000	Daschle, Tom

OpenSecrets' Donor Lookup comprises contribution data available electronically from the Federal Election Commission on Monday, April 02, 2007. Because campaigns and other political committees typically disclose their contributions on a quarterly or monthly schedule, it can take several months for a contribution to be recorded in this database.

http://www.opensecrets.org/indivs/search.asp?key=NEDED&txtName=Robertson,%20Sanford&txtState=(all%20states)&txtAll=Y&Order=N

and

http://www.opensecrets.org/indivs/search_hp.asp?txtName=Robertson%2C+Sanford&NumOfThou=0&txt2006=Y&submit=Go%21
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The CEOs of the leading information technology companies in Silicon Valley tend to be a lot like their industry: brash, young, and unconventional. Until recently, few of them have had much use for politicians. Nonetheless, as their industry has matured and they have become rich and influential, the entrepreneurs of Silicon Valley have been courted by candidates of both parties. The story of how a Democratic Administration under President Clinton has successfully curried their favor and reaped campaign dollars as a result reveals much about the flow of money in American politics.

In 1992, Bill Clinton won the endorsement and financial backing of several of them. Most notable was John Sculley, then the celebrated CEO of Apple Computer and a Republican. It was Sculley who sat next to Hillary Rodham Clinton during the President's first State of the Union address in January 1993. He embodied one of the incoming Administration's most vivid images, a symbol of a booming industry dominated by America and allied with a young, new President.

Sculley, 55, joined Apple in 1983 from Pepsico Inc, where he had risen from marketing executive to the company's president. He was lured to the Cupertino, California computer maker by Apple's co-founder Steven Jobs who reportedly asked him, "Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?" As a world changer, Sculley did well at first. Despite his low-tech background, Apple flourished under his leadership and in 1985 Sculley solidified his image as Silicon Valley's reigning philosopher-king when he ousted Jobs after a power struggle. He was frequently quoted in the press making visionary predictions about the future of the cyber-revolution his company had helped start.

As the company's star began to fade, however, so did his. By 1993 the company was reeling from a series of business disasters. Chief among them was the Newton hand-held computer, Sculley's pet project. In that year, he resigned from Apple.

Sculley turned his attention to politics, in the early 1990s. His first efforts were on behalf of Republican Tom Campbell, who in 1992 was running in California for a US Senate seat. Sculley hosted a fund-raising fete for Campbell at his ranch in Woodside. But by then, Sculley had grown disenchanted with the technology policies of the Bush Administration. He had also become acquainted with Hillary Rodham Clinton, serving with her on a national education council. When Bill Clinton ran for President Sculley threw his support to him.

A key matchmaker in bringing Clinton and high-tech executives like Sculley together was Sanford (Sandy) Robertson, chairman of Robertson, Stephens & Co., a leading investment firm in San Francisco. Since the late sixties, Robertson has specialized in converting fledgling technology companies from private to public ownership. He has also raised a lot of money for Democratic candidates. In October 1992, Robertson held a fund-raising dinner party for Bill Clinton, Al Gore and 135 Silicon Valley and biotech executives, including Sculley, at his house in San Francisco. The dinner raised $400,000.

A top priority in Silicon Valley was the construction of an electronic data network, the so-called "information superhighway." Clinton -- and particularly Gore -- were thinking about that too. Gore envisioned a future driven by bits and bytes traveling across a high-speed network that would connect government, business and schools -- all built with the government leading the charge. Gore likened this to the publicly funded interstate highway system which had been championed by his father, a former Tennessee Senator.

But in Silicon Valley, many leading executives wanted a network built by private companies like their own. At the economic summit convened by President-elect Clinton in December 1992, AT&T chairman Robert Allen and Gore voiced their disagreement on the subject. But by the end of 1993 the Vice-President had changed his view. In a speech on December 21, he declared : "Unlike the interstates, the information superhighway will be built, paid for, and funded principally by the private sector." Remarkably, within two days of Gore's remarks, telecommunications companies with much at stake in the information superhigway contributed $120,000 to the Democratic Party. Federal Election Commission records show receipts of $70,000 from MCI, $25,000 from NYNEX, $15,000 from Sprint, and $10,000 from US West.

As for John Sculley, the years since he was mentioned as a possible member of Clinton's cabinet have been difficult. He lasted only four months as chairman of Spectrum Information Technologies, a New York company. And he left unhappily. He sued Spectrum alleging he had been deceived about accounting problems.

All Credit to PBS at:

John Sculley
... A key matchmaker in bringing Clinton and high-tech executives like Sculley together
was Sanford (Sandy) Robertson, chairman of Robertson, Stephens & Co., a ...
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"The dispute over Gupta's bankrolling of the Clintons offers new detail about how successfully Bill Clinton has leveraged the inner circle of donors he cultivated during his tenure in the White House to his personal financial benefit since he left office. In addition, it suggests the degree to which Hillary Clinton's political career is also benefiting from those connections."

From The Washington Post

Largess To Clintons Lands CEO In Lawsuit

Case Is a Window On Couple's Ties

Washington Post Staff Writers
Saturday, May 26, 2007; Page A01

All Credit To The Washington Post at:

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/25/AR2007052502332.html

Page 2 of 2   < Back

Largess To Clintons Lands CEO In Lawsuit

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May 25, 2007

Top Clinton Donor Helps Defraud Elderly

The mainstream media coverage of a company being federally investigated for selling databases of sick and unsuspecting elderly to scam artists conveniently fails to mention that the firm’s owner has given Bill and Hillary Clinton millions of dollars over the years.

The wealthy Nebraska entrepreneur, Vinod Gupta, owns the Omaha-based marketing database company called infoUSA Inc. which happens to be one of the nation’s largest compilers of consumer information that is later sold to marketing firms. InfoUSA is being investigated for selling personal information to criminal firms that swindled senior citizens, many of them war veterans with Alzheimer’s disease.

The firm advertised lists of “Elderly Opportunity Seekers,” 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”

The corrupt businesses that bought the information plied on lonely people with repeated phone calls and eventually tricked many of them into revealing banking information to later raid their savings accounts.

As horrible as this may seem to most people, it has not stopped Bill and Hillary Clinton from accepting hefty donations from InfoUSA’s owner or the former commander-in-chief from taking hundreds of thousands of dollars from the company for speeches and “non-employee compensation.”

Indeed the Clintons have a close and financially lucrative relationship with Gupta, who has been one of the couple’s most generous benefactors. Gupta donated $2 million to Hillary’s millennium celebration and $1 million to Bill’s presidential library in Little Rock Arkansas. In 2000, he gave Hillary $100,000 to kick start her senate campaign and he hosted a fundraiser at his house.

Evidently, the Clintons are not bothered that their close friend with deep pockets is making his money off of ailing, extremely vulnerable old people.

All Credit to

at:http://www.corruptionchronicles.com/2007/05/
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Hillary Clinton at the pillory over ‘Guptagate’

By Hal Brown

The Clinton's roadmap to a presidential dynasty seems to have been drawn in part by Republican fat cats. How else can we interpret their acceptance of hundreds of thousands of dollars worth of gifts from Vinod Gupta, a multimillionaire donor to all things Clinton, whose own company sold consumer data to telemarketing criminals who used it to steal money from elderly Americans.

Even supporters of Hillary Clinton are aware that in order to win the nomination, let alone the presidency, she has to overcome the public perception of being driven by cold, calculating ambition.

Could she be a ruthless politician like George W. Bush whose quest for power is not far removed from an amoral capitalist obsessed with amassing wealth? Could she be following an ethical compass whose arrow always points north even when she's headed south?

According to the New York Times, Mr. Gupta's company...

paid $146,866 to ferry the Clintons, Mr. Gupta and others to Acapulco and back, court records show. During the next four years, infoUSA paid Mr. Clinton more than $2 million for consulting services, and spent almost $900,000 to fly him around the world for his presidential foundation work and to fly Mrs. Clinton to campaign events. (Read article here)

Here's a quote from the New York Times article that has the Bush ring to it:

"An entrepreneur from India, Mr. Gupta, 60, founded infoUSA in Omaha in 1972 and built it into a publicly traded company with more than $400 million in revenue. Along the way, he nurtured a taste for politics, becoming a major Democratic fund-raiser and a Lincoln Bedroom guest in the Clinton White House.

Before leaving office, Mr. Clinton appointed Mr. Gupta to the board of the Kennedy Center for the Performing Arts. Earlier, Mr. Clinton had nominated him for two minor ambassadorships, which Mr. Gupta declined because of business commitments.

Even if infoUSA was a pristine pure company operating at the highest level of ethics, and all Gupta did was open his wallet for the Clintons to dip into so he could bask in the afterglow of power, and get a chance to sleep in the Lincoln Bedroom (which he did), the Clinton's behavior looks so ..... Bush Republican.

If John Edwards can be held to task and mocked for a $400 haircuts and living in a mansion, what will be the public reaction to Billary's cozy financial relationship with a millionaire who engaged in a tawdry scheme to bilk the elderly.

How will both her supporters and critics react to one of her surrogates, Phil Singer's public rationalization of her accepting a $146,666 private jet trip by saying she “complied with all the relevant ethics rules” on accepting private air travel.

The relevant rules are that senators and candidates make reimbursement at a rate equal to that of a first-class ticket. I know first class is pricey, but unless she flew to the moon I can't image you a trip anywhere on earth would cost $146 thousand.

Those who want to see a Democrat as our next president better hope that Barak Obama doesn't have any gold plated skeletons in his closet.

Source:  Capitol Hill Blue

All Credit to the Hillary Project and Capital Hill Blue
http://www.hillaryproject.com/index.php?/sg_distro/comments/hillary_clinton_at_the_pillory_over_guptagate/
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CNN Hires Clinton Operative as 2008 Presidential Polling Unit

January 14, 2007 | Filed Under Uncategorized, Media Bias, Society/Culture, President, Elections, Publius Contributor, Warner Todd Huston |

-By Warner Todd Huston

In a move that throws all claims of being fair and balanced out the window, CNN has hired a polling company owned by a long time activist for the Clintons as their newest polling organization to track the 2008 election cycle.

Any guesses who THIS polling company will say is “winning”?

CNN has announced that Opinion Research Corporation has been chosen to serve as their polling unit for the upcoming 2008 presidential race because of its “reputation for independent, objective analysis and its excellent reputation”.

Opinion Research Corporation, however, was recently acquired by InfoUSA a company controlled by one Vinod Gupta, a very active Clinton supporter (of Hillary as well as Bill).

Gupta is so enamored with the Clintons that back in his native land, India, he has built little monuments to his favorite American politicians in the form of the “Bill Clinton Science and Technology Center” and the “Hillary Rodham Clinton Mass Communication Center” for the Gochar Intermediate College, Rampur Maniharan, India.

The Gupta family are big contributors to the Clintons and have posted many photos of themselves with the Clintons on their website.

Here is one of them (with my notation to point out Mr. Gupta):

Naturally, the Guptas website has suddenly been removed. Imagine that, huh?

Still, a great post at FreeRepublic.com got to some of the photos before the Guptas unceremoniously dumped the website.

Of course, the disappearance of their personal website begs the question of why was it removed? The Guptas obviously knew that their partisan activities might spell trouble for the credibility of their new polling company and that of CNN for having chosen that company to poll for the race in which Mrs. Rodham is ostensibly going to be a candidate.

So, now we have a partisan Clinton supporter responsible for telling CNN and the American public who is doing better than whom in the 2008 general election.

The MSMs partisanship just gets clearer every day, doesn’t it?

All credit to http://conservablogs.com/publiusforum/2007/01/14/cnn-hires-clinton-operative-as-2008-presidental-polling-unit/
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All Credit to Cliff Kincaid at: http://www.aim.org/special_report/5390_0_8_0_C/
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Shadow Party

888 16th Street NW 7th Floor Washington, DC 20006 Phone :202-974-8300

Nationwide network of non-profit activist groups, whose agendas are ideologically to the left, which are engaged in campaigning for the Democrats Consists of more than five-dozen unions, activist groups, and think tanks  Activities include fundraising, get-out-the-vote drives, political advertising, and covert operations  Conceived and organized principally by George Soros, Hillary Clinton and Harold McEwan Ickes  The so-called "Shadow Democratic Party," or "Shadow Party," is a nationwide network of more than five-dozen unions, non-profit activist groups, and think tanks whose agendas are ideologically to the left, which are engaged in campaigning for the Democrats. Its activities include fundraising, get-out-the-vote drives, political advertising, opposition research, and media manipulation. The Shadow Party was conceived and organized principally by George Soros, Hillary Clinton and Harold McEwan Ickes -- all identified with the Democratic Party left. A political consultancy called the Thunder Road Group (TRG), located on the 7th Floor of the historic Motion Picture Association of America headquarters at 888 Sixteenth Street NW in Washington, DC, serves as the unofficial headquarters of the Shadow Party. Three other Shadow Party groups also lease space in the same building, including America Coming Together (ACT), America Votes, and the Partnership for America's Families. The clustering of these groups in a building owned by the Motion Picture Association of America (MPAA) is significant. The MPAA has long enjoyed a close relationship with the Democratic Party; many high-ranking Democrats have transitioned comfortably from government jobs into glamorous posts in the MPAA's upper management. As of August 2004, the husband-wife team of George Soros and Susan Soros had contributed $13,120,000 to Shadow Party groups and operations, second only to Soros' longtime friend and collaborator, insurance mogul Peter B. Lewis ($14,175,000). The third leading donor was Jane Fonda ($13,085,750), followed by Hollywood producer Stephen Bing in fourth place ($9,869,014). Other major funders of the Shadow Party include the Tides Foundation and the Open Society Institute.  No one knows who first coined the term "Shadow Party." In the November 5, 2002 Washington Post, writer Thomas B. Edsall wrote of "shadow organizations" springing up to circumvent McCain-Feingold's soft money ban. Journalist Lorraine Woellert first called the Democrat network a "shadow party" in a September 15, 2003 Business Week article titled, "The Evolution of Campaign Finance?" Other journalists quickly followed suit. Some journalists refer to the Shadow Party as "the 527s" or "the 527 groups." These terms derive from the fact that most of the non-profit groups within the Shadow Party are registered under Section 527 of the U.S. tax code. Section 527 groups face weaker regulation and looser disclosure requirements than other types of non-profit groups. Thus they are better suited for operating in the shadows, in areas of dubious legality. Section 527 groups are used for raising "soft money." For a thorough explanation of Section 527 groups and soft money, click here. Wall Street billionaire George Soros is the Shadow Party's principal founder and mastermind. Clear hints of Soros' intentions began to appear as early as the 2000 election. It was then that Soros (shouldering about one-third of the cost) sponsored the so-called "Shadow Conventions." Organized by author, columnist, and socialite Arianna Huffington, the Shadow Conventions were media events designed to lure news crews from the real party conventions that year. Huffington held her "Shadow Conventions" at the same time and in the same cities as the Republican and Democratic Conventions, in Philadelphia and Los Angeles respectively, and featured leftwing critics of mainstream politics. The Shadow Conventions promoted Huffington's view that neither Democrats nor Republicans served the interests of the American people any longer. In Huffington's view, U.S. politics needed a third force to break the deadlock. Among the issues highlighted at the Shadow Conventions were racism, class inequality, marijuana legalization and campaign finance reform. Most speakers and delegates pushed a hard-left line, accompanied by "Free Mumia" chants from the crowd and an incendiary tirade by Jesse Jackson. A former conservative, Huffington told reporters, "I have become radicalized." The Shadow Conventions were purely symbolic affairs. They fielded no candidates for office. However, many of Soros' activities during the 2000 campaign went beyond symbolism. It was during the 2000 election that Soros first experimented with raising campaign funds through Section 527 groups. In preparation for the 2000 election, Soros assembled a team of wealthy Democrat donors to help him push two of his pet issues -- gun control and marijuana legalization. Their donations greatly exceeded the limits on political contributions stipulated by campaign finance laws. Soros therefore laundered their contributions through Section 527 groups -- dubbed "stealth PACs," by the media of that time. One of Soros' stealth PACs was an anti-gun group called The Campaign for a Progressive Future (CPF). This group sought to neutralize the influence of the National Rifle Association (NRA), by targeting for defeat any political candidate, at any level, who the NRA endorsed. Soros personally seeded CPF with $500,000. During the 2000 election, CPF funded political ads and direct-mail campaigns in support of state initiatives favoring background checks at gun shows. Soros used other 527s to agitate in favor of pro-marijuana initiatives which appeared on the ballot in various states that year. Donors to Soros' stealth PACs during the 2000 election cycle included insurance mogul Peter B. Lewis and InfoSeek founder Steven Kirsch, both of whom would turn up as major contributors to Soros' Shadow Party during the 2004 election season.  During the 1990s, Soros had grown close to Bill Clinton and Hillary Clinton. Their ascension to power gave him easy entreé to Washington elites of a sort he had long coveted but never enjoyed. Soros became the Clintons' unofficial envoy to Russia and to other former Communist states. The assignment proved lucrative for him. Soros made a fortune in the so-called "Russiagate" phenomenon -- the orgy of backroom "privatization" deals and Russian junk bond issues which Clinton officials such as Strobe Talbot, Al Gore and Lawrence Summers helped foster in the former USSR. More importantly, Soros discovered in Hillary Clinton an ideological soulmate. Mrs. Clinton shared his aversion to U.S. "hegemony." Like Soros, she sought to subordinate U.S. interests to global interests; U.S. sovereignty to global government; U.S. law to global courts; U.S. wealth to global taxation; and U.S. productivity to a scheme for global income redistribution. She also shared Soros' hostility to Israel. Soros and Mrs. Clinton formed a friendship based upon their mutual beliefs. When the Clintons left office, Soros dedicated himself to restoring Hillary to the White House.  Soros has long experience in effecting "regime change." He helped fund the 1989 "Velvet Revolution" that brought Vaclav Havel to power in the Czech Republic. By his own admission, he has helped engineer coups in Slovakia, Croatia, Georgia and Yugoslavia. When Soros targets a country for "regime change," he begins by creating a shadow government -- a fully formed government-in-exile, ready to assume power when the opportunity arises. The Shadow Party Soros has built in America greatly resembles those he has created in other countries, prior to instigating a coup. At the heart of the American Shadow Party is the Center for American Progress (CAP). It was launched on July 7, 2003 as the American Majority Institute. The name was changed to Center for American Progress on September 1, 2003. The official purpose of the Center was to provide the left with a new think tank of its own. Regarding the new think tank proposed by Soros and Halperin, Hillary Clinton told Matt Bai of The New York Times Magazine on October 12, 2003, "We need some new intellectual capital. There has to be some thought given as to how we build the 21st-century policies that reflect the Democrat Party's values." Expanding on this theme, Mrs. Clinton later told The Nation's Robert Dreyfuss, "We've had the challenge of filling a void on our side of the ledger for a long time, while the other side created an infrastructure that has come to dominate political discourse. The Center is a welcome effort to fill that void." Hillary Clinton tries to minimize the depth of her involvement with the Center for American Progress. But persistent press leaks confirm that she -- and not its official President, John Podesta -- has ultimate authority at CAP. "It's the official Hillary Clinton think tank," an inside source confided to Christian Bourge of United Press International. As Robert Dreyfuss notes in The Nation, "In looking at Podesta's center, there's no escaping the imprint of the Clintons. It's not completely wrong to see it as a shadow government, a kind of Clinton White-House-in-exile -- or a White House staff in readiness for President Hillary Clinton." Dreyfuss notes the abundance of Clintonites on the Center's staff, among them Clinton's national security speechwriter Robert Boorstin; Democratic Leadership Council staffer and former head of Clinton's National Economic Council Gene Sperling; former senior advisor to Clinton's Office of Management and Budget Matt Miller; and more. Dreyfuss writes: "[T]he Center's kickoff conference on national security in October [2003], co-organized with The American Prospect and the Century Foundation, looked like a Clinton reunion, featuring Robert Rubin, Clinton's Treasury Secretary;  William Perry, his Defense Secretary;  Sandy Berger, his National Security Adviser; Richard Holbrooke and Susan Rice, both Clinton-era Assistant Secretaries of State; Rodney Slater, his Transportation Secretary; and Carol Browner, his EPA administrator, who serves on the Center's board of directors." Hillary Clinton also attended the event, Dreyfuss reports. To develop the Shadow Party as a cohesive entity, Harold Ickes undertook the task of building a 21st-century version of the Left's traditional alliance of the "oppressed," the disgruntled, and the "disenfranchised." He formed a coalition of pro-abortion activists, leftwing minority groups and leftwing labor unions. By the time Ickes was done, he had created or helped to create six new groups, and had co-opted a seventh called MoveOn.org. Together, they constitute the administrative core of the Shadow Party. They are: America Coming Together; America Votes; the Center for American Progress; Joint Victory Campaign 2004; The Media Fund; MoveOn.org; and the Thunder Road Group. In a November 11, 2003 interview with Laura Blumenfeld of the Washington Post, George Soros described how he had jump-started the Shadow Party in the summer of 2002. The Wall Street billionaire told how he summoned a team of political strategists, activists and Democrat donors to his Southampton beach house in Long Island. According to The Washington Post, attendees included: Morton H. Halperin (Director of Soros' Open Society Institute); John Podesta (Democrat strategist and former Clinton chief of staff); Jeremy Rosner (Democrat strategist and pollster, ex-foreign policy speechwriter for Bill Clinton, and former special advisor to Secretary of State Madeline Albright on NATO; Robert Boorstin (Democrat strategist and pollster, ex-national security speechwriter for Clinton, and former advisor to Treasury Secretary Robert Rubin); Carl Pope (ACT co-founder, Democrat strategist, environmentalist, and Sierra Club Executive Director); Steve Rosenthal (Labor leader, CEO of America Coming Together, former chief advisor on union matters to Clinton Labor Secretary Robert Reich, former Deputy Political Director under DNC chairman Ron Brown, and AFL-CIO Political Director from 1996 - 2002); Peter Lewis (major Democrat donor and insurance entrepreneur, and founder and chairman of Progressive Corporation); Rob Glaser (major Democrat donor and Silicon Valley pioneer); Ellen Malcolm (co-founder and president of ACT and founder of Emily's List); Rob McKay (major Democrat donor, Taco Bell heir, and McKay Family Foundation President; Lewis and Dorothy Cullman (major Democrat donors, and founders of the Lewis and Dorothy Cullman Foundation in New York). At the meeting, Soros laid out his plan to defeat President Bush. He began implementing his plan before the meeting had adjourned. Blumenfeld writes: "Standing on the back deck, the evening sun angling into their eyes, Soros took aside Steve Rosenthal, CEO of the liberal activist group America Coming Together (ACT), and Ellen Malcolm, its president. They were proposing to mobilize voters in 17 battleground states. Soros told them he would give ACT $10 million. … Before coffee the next morning, his friend Peter Lewis, chairman of the Progressive Corp., had pledged $10 million to ACT. Rob Glaser, founder and CEO of RealNetworks, promised $2 million. Rob McKay, President of the McKay Family Foundation, gave $1 million, and benefactors Lewis and Dorothy Cullman committed $500,000. Soros also promised up to $3 million to Podesta's new think tank, the Center for American Progress." The Shadow Party had been born, and by late 2003 Soros issued an open call for "regime change" in the United States. "America under Bush is a danger to the world," Soros told Laura Blumenfeld in that same November 11, 2003 interview. Toppling Bush, said Soros, "is the central focus of my life… a matter of life and death. And I'm willing to put my money where my mouth is." New groups are constantly being formed in the Shadow Party, while others vanish. To determine how many groups exist in the Shadow Party at any given time is difficult. Even more daunting is try to determine the purpose of each group. In some cases, groups seem to have no function other than to transfer funds from one 527 to another, perhaps in order to obscure the money trail. On December 10, 2003, for instance, a 527 group called the Sustainable World Corporation suddenly sprang into existence in Houston, Texas. Within days of its birth, it gave $3.1 million to the Joint Victory Campaign 2004, which in turn disbursed half of the payment to Harold Ickes' Media Fund. As of 2004, an alphabetical list of Shadow Party groups included the following: Air America Radio; America Coming Together; America Votes; American Constitution Society; American Federation of Labor - Congress of Industrial Organizations; American Federation of State, County and Municipal Employees; American Federation of Teachers; Anshell Media; Association of Community Organizations for Reform Now; Association of Trial Lawyers of America; Band of Progressives; Brady Campaign to Prevent Gun Violence; Campaign for a Progressive Future; Campaign for America's Future; Center for American Progress; Clean Water Action; Communication Workers of America; The Constitution Project; DASH PAC; Defenders of Wildlife Action Fund; Democracy for America; Democratic Governors Associations; Democratic Legislative Campaign Committee; Democratic Senatorial Campaign Committee; Dog Eat Dog Films; EMILY's List; Environment 2004; Gore/Lieberman Recount Committee; Hotel Employees & Restaurant Employees International Union; the Human Rights Campaign; INdTV; International Brotherhood of Electrical Workers; Joint Victory Campaign 2004; Laborers International Union of North American; League of Conservation Voters; New Democrat Network; The Media Fund; Media Matters for America; Million Mom March; Moving America Forward; MoveOn.org; Music for America; National Association for the Advancement of Colored People; NARAL Pro-Choice America; National Education Association; National Grassroots Alliance; National Jewish Democratic Council; National Treasury Employees Union; New American Optimists; New Democrat Network; Partnership for America's Families; People for the American Way; Phoenix Group; Planned Parenthood; Pro-Choice Vote; Service Employees International Union; Sheet Metal Workers International Association; Sierra Club; The Thunder Road Group; United Food & Commercial Workers Union; United Progressive Alliance; USAction; Vagina Votes; Voices for Working Families; Vote for Change; Young Voter Alliance; and 21st Century Democrats.

http://www.discoverthenetworks.org/groupProfile.asp?grpid=6706
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Half of voting-age Americans say they would not vote for Sen. Hillary Rodham Clinton (D-N.Y.) if she became the Democratic nominee for president in 2008, according to a Harris Interactive poll released Tuesday.
More than one in five Democrats that participated in the survey said they would not vote for Clinton. Overall, 36 percent say they would vote for the former first lady and 11 percent are unsure of their top choice.

Forty-eight percent of Independent voters also said that they would choose another candidate over Clinton, the poll, which surveyed 2,223 potential voters, states.

Fifty-six percent of men said that they would not vote for Clinton, while 45 percent of women said that she would not be their pick. In addition, 69 percent of those 62 and older said that they would not vote for Clinton.

Nearly half of the respondents said that they dislike Clinton’s political opinions and Clinton as a person. Fifty-two percent of people also said that “she does not appear to connect with people on a personal level.” All Credit to PoliPundit at http://polipundit.com/wp-comments-popup.php?p=17231&c=1
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Hillary Attempting To Stack The Deck
By Dave Gibson (02/21/05)

All Credit to Dave Gibson at: http://www.americandaily.com/article/6878
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[...] "...yet this is the first instance of osmium tetroxide being included among the list of possible chemical agents.[8] This is the first incident in the open literature in which the chemical has been connected with terrorism. Although this plot did not progress beyond the planning stages, the potential use of osmium tetroxide has raised new fears about al-Qa'ida's pursuit of dual-use chemicals as terrorist weapons and has encouraged discussion about the potential lethality of such a substance when combined with a conventional explosive. " Osmium Tetroxide - a New Chemical Terrorism Weapon?
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EXCLUSIVE PHOTOS: LONDON TERROR INVESTIGATION

CNS Research Story

Osmium Tetroxide - a New Chemical Terrorism Weapon?

Osmium tetroxide structure with ampoules. [Src: Polysciences, Inc.]

By Michelle Baker and Margaret E. Kosal

April 13, 2004

A highly toxic chemical has emerged as a key component of an alleged terrorist plot in London. Serving legitimate functions in biological research and in specialized chemical industry, osmium tetroxide's suitability as a terrorist agent - a dual use compound - is limited, despite the characterizations of it generating "chemical fallout."[1]

Appearance in a Recent Terrorist Plot

On 30 March 2004, hundreds of British anti-terrorism police conducted raids throughout the London area after tracking a group of terrorist suspects over the course of several months.[2] Authorities subsequently arrested eight British citizens of Pakistani origin, who were allegedly involved in the planning stages of a terrorist attack. In the following week, reports emerged that these suspects, including a Canadian and a British-Algerian, were researching the potential of detonating a chemical bomb in a crowded, civilian location within London.[3] Authorities conducted the raids at 24 locations within London after learning from GCHQ, the British electronic eavesdropping intelligence agency, that these terrorist suspects were discussing the use of osmium tetroxide during phone calls among themselves within Britain and to Pakistan.[4] Some sources claim that the U.S. National Security Agency collaborated with its British counterpart to help intercept the phone calls implicating the suspects in planning a chemical attack.[5] The British Home Office would not, however, comment on the alleged scenario, as the case is still under investigation by authorities.[6]

The suspects reportedly were not able to acquire the osmium tetroxide before authorities were able to intercept members of the group. Those involved are allegedly sympathetic to al-Qa'ida and were preparing to target Gatwick airport, the London subway, or other enclosed high-traffic areas.[7] Al-Qa'ida has previously produced training manuals containing plans for use of choking agents as a method of attack, yet this is the first instance of osmium tetroxide being included among the list of possible chemical agents.[8] This is the first incident in the open literature in which the chemical has been connected with terrorism. Although this plot did not progress beyond the planning stages, the potential use of osmium tetroxide has raised new fears about al-Qa'ida's pursuit of dual-use chemicals as terrorist weapons and has encouraged discussion about the potential lethality of such a substance when combined with a conventional explosive.

Characteristics of Osmium Tetroxide (OsO₄)

Scientists are already familiar with the use and effects of osmium tetroxide (OsO₄) even as these recent reports have introduced the general public to the compound for the first time. OsO₄ is a colorless to pale yellow solid at room temperature, occasionally called osmic acid. The solid readily evaporates at room temperature (has a high vapor pressure). An open canister left in an enclosed area would be readily noticeable based on the characteristic pungent, ozone- or chlorine-like smell. For the numerically inclined: the vapor pressure of OsO₄ is 7 mm Hg at 20°C/68°F, compared to a vapor pressure of 17 mm Hg for water, 2.10 mm Hg for sarin nerve agent (GB), and 0.0007 mm Hg for VX nerve agent[9] (the latter three are liquids). The vapor pressure of a chemical is important in determining the inhalation hazard. Solids and liquids with no vapor pressure don't evaporate and therefore don't pose an inhalation hazard unless they are mechanically aerosolized. Liquids with very low vapor pressures, like VX nerve agent, don't evaporate readily and therefore are considered a much more significant threat for exposure via direct skin contact.

Physiological Effects of OsO₄ Exposure

Osmium tetroxide is highly toxic and a rapid oxidizer. Severe reactions may result through all routes of exposure: inhalation, ingestion, contact with the eyes and other mucous membranes, and contact with skin. Because of its volatility, the vapor hazard is usually emphasized. Exposure to the vapor can cause severe chemical burns to the eyes, skin and respiratory tract. Very short-term contact with the vapor may generate a lachrymation (tear-causing) response, accompanied by coughing, headaches, and dizziness.[10] Among the most insidious effects of osmium tetroxide is its capacity to cause irreversible blindness - literally turning the corneas black. Symptoms may not be noticed until several hours following exposure, which may be an attractive feature for terrorists. People may not realize the extent of the toxic effects of a compound to which they have been exposed immediately, rather the damage will be occurring while they continue on their day. Another delayed effect of substantial inhalation exposure is a build up of fluid in the lungs (edema) leading to "dryland-drowning." Exposure to osmium tetroxide dissolved in water will turn the skin black. Painful burns or dermatitis may result depending on the concentration. It is not known, however, to be cancer-causing.

OsO₄ can be compared to traditional chemical warfare agents (table below). The first appearance of a physiological response, also known as a threshold effect, is observed at a lower concentration for osmium tetroxide vapor exposure than phosgene (CG), sulfur mustard (HD), or sarin nerve agent (GB). At first glance, the inhalation hazard associated with OsO₄ is comparable to that of the traditional asphyxiant phosgene and blister agent sulfur mustard based on lethal inhalation concentrations (LCt₅₀). Phosgene is a gas at ambient conditions, so all of the material will be available as an inhalation hazard. On the other hand, sulfur mustard is a liquid with a fairly low vapor pressure (0.072 mm Hg),[11] which will result in a decreased volatility relative to OsO₄ (626 mg/m3 for sulfur mustard versus 97,300 mg/m3 for OsO₄ at 20°C/68°F). So there will be over 150 times more OsO₄ vapor available in an enclosed area relative to sulfur mustard vapor.

While the lethal inhalation concentration of OsO₄ is substantially larger than that for sarin, again the decreased volatility of the traditional warfare agent (16,090 mg/m3) should be considered in evaluating the relative threat. Under similar conditions, there will be six times more OsO₄ vapor in an enclosed area compared to sarin vapor. The overall inhalation risk for osmium tetroxide is estimated to be closer to sarin nerve agent than sulfur mustard or phosgene gas.

Toxicity Comparison of Osmium Tetroxide with Three Traditional Chemical Warfare Agents

	Threshold effects (mg / m3)	LCt50* (mg-min / m3)	LD50** (mg / kg)
OsO4	0.1 - 0.6[12]	1316[13]	162[14]
Phosgene	2[15]	3200	n/a***
Sulfur mustard	12-500[16]	1500[16]	100[16]
Sarin (GB)	2[17]	70[17]	24.3[17]

*LCt₅₀ is the vapor concentration that will cause death by inhalation in fifty percent of a population.
** LD₅₀ is the liquid concentration that will cause death via exposure through the skin (percutaneous), in this comparison, in fifty percent of a population. Values are given in mg per kg of total body weight; a 150 lb human weighs approximately 68 kg.
*** n/a = not applicable. Phosgene is a gas at ambient conditions.

Legitimate Uses of OsO₄

This substance is used primarily in the preparation of biological samples, a technique called "fixation" or "fixing," to help maintain cellular and sub cellular structures that would otherwise be damaged during further processing. Fixing is an important step in most biological applications of electron microscopy - looking at very small structures with electrons rather than light. OsO₄ reacts with the olefins in fatty acids and other tissues. Fixing has some similarities to staining used in traditional microbiology - the osmium atomic nucleus helps make the biological structures more easily "seen" under an electron microscope.

Osmium tetroxide is also used in specialty organic chemistry reactions,[18] such as the synthesis of the synthetic human-hormone norestradiol[19] and industrially significant glycol compounds. These reactions using solid osmium tetroxide are most commonly done on the laboratory scale.

Commercial Availability

Osmium tetroxide is commercially available as either a solid or as an aqueous solution (less than 6% OsO₄ by weight, due to limited solubility in water). Commercial quantities are typically very small and prices are high. Cost for the largest, commercially available units from a leading U.S. chemical supplier range from $118 for 1 gram of the solid compound to $195 for a 25 mL ampoules containing 2.5% OsO₄ by weight, dissolved in water (0.625 grams OsO₄ per vial). A terrorist attempting to use OsO₄ in the creation of a chemical terrorist weapon would most likely be hindered by the high cost of the substance. There would also be a danger to the terrorist in attempting to prepare an improvised explosive device containing large quantities of the chemical compound.

In packages of five grams or more, larger quantities of material are commercially available in which osmium tetroxide is bound to a polymer backbone. The polymer backbone, or support, eliminates the vapor hazards associated with solid OsO₄. If a potential terrorist were to seek to acquire large quantities of this type of immobilized OsO₄, the utility as a weapon would be extremely low. Such materials were designed specifically to protect industrial workers.

A leading U.S. chemical supplier of OsO₄ does not take any special precautions regarding sale of the chemical. Because of the potential dual-use nature of many chemicals with legitimate industrial and research purposes, all orders are screened prior to shipment.

Decontamination

If an OsO₄-containing solution were to be used as a chemical terrorist weapon, it could be decontaminated with copious amounts of any "unsaturated" cooking oil or dry milk.[20] Once a solution is black, the risk of rampant oxidation (burning) is abated.

Viability of OsO₄ as a Chemical Terrorism Weapon

The feasibility of using a bomb to disburse OsO₄ is highly suspect. When heated OsO₄ rapidly decomposes to OsO₂, which is effectively a rock. OsO₂ is used as a ceramic resistor in specialty electronic applications. The inhalation hazard would be destroyed with the bomb explosion rather than generating "chemical fallout" as in a dirty bomb scenario. In addition to the difficulties and hazards faced by anyone seeking to use osmium tetroxide as a dirty bomb, the effect of the compound would be minimal in an open space, and it would not leave lasting contamination in an area in the same manner as a radioactive bomb. Because it is such a rapid oxidizer, it would most likely first enhance the combustion of the materials used for the bomb. As an oxidizer for an improvised explosive device, OsO₄ would be a very expensive choice and very risky for the bomb assembler. Thus, its utility in the creation of a dirty bomb, when combined with conventional explosives, is questionable.

Chemical terrorism incidents are not limited to those events involving explosives or incendiary materials. The likelihood of OsO₄ to cause harm as a chemical agent alone is substantially greater than as part of a dirty bomb. The major danger from the solid is via inhalation. An enclosed space with poor ventilation would present the greatest hazard. OsO₄ would not be an effective chemical terrorism weapon for a large, open air venue. The major danger in solution form is via the skin (percutaneous) or ingestion.

As a terrorist weapon, however, the biggest problem with osmium tetroxide is its nature as a rapid, indiscriminate oxidizer. OsO₄ doesn't distinguish between membranes in the human eye and lungs, plants, rubber, or cooking oil. While it has the potential to inflict horrifying damage to the body in the form of chemical burns and blindness, the chemical does not specifically target a critical physiological function as nerve agents do. A second limitation as a terrorist weapon is its volatility. The persistency of both sarin and VX substantially exceed that of OsO₄.

Conclusions

OsO₄, although unquestionably a lethal compound, is not estimated to be a viable dirty bomb hazard as it will readily decompose if utilized with explosives. In comparison to traditional chemical warfare agents, OsO₄ has similarities to the choking agents in its high volatility and targeting of the respiratory system. It resembles the blister agents, like sulfur mustard in that it attacks the eyes, burns the skin (by a different molecular mechanism than sulfur mustard), and some effects may be delayed. The blindness from OsO₄ vapor exposure, however, may be permanent unlike sulfur mustard. Because of its high volatility combined with high toxicity, the inhalation risk of OsO₄ vapor verges on that of sarin nerve agent, but it does not target critical nerve connections that control the cardiovascular and respiratory systems as the nerve agents do. Additionally, the persistency of osmium tetroxide vapor is low in comparison with the nerve agents and sulfur mustard.

The incorporation of osmium tetroxide, a fairly obscure inorganic compound, suggests some familiarization with advanced undergraduate level chemistry. The British terrorist suspects recognized the deleterious health effects, but their plan to incorporate OsO₄ into a conventional explosives bomb shows a lack of sophisticated and detailed understanding of inorganic chemistry. Such knowledge might be indicative of a graduate-level individual or technician in a research or industrial biochemistry, molecular biology, or biomedical engineering laboratory with access to OsO₄. Such a plot does not point to a person with graduate-level experience in synthetic chemistry or significant experience in an industrial setting. This incident may also hint at an escalating terrorist interest in pursuing non-traditional chemicals as improvised weapons. Recent events have forced British authorities to investigate such a threat, and such a possibility has caused scientists to speculate on the utility of OsO₄ for use by a terrorist group.

1 Ben Taylor and Stephen Wright, "Britain foils chemical bomb plot," The Advertiser (Adelaide, Australia), 8 April 2004, accessed 8 April 2004, <http://www.theadvertiser.news.com.au>.
[2] Brian Ross and Christopher Isham, "'Very nasty,' Potential bomb plot involved deadly chemical," ABCNEWS.com, 5 April 2004, accessed 7 April 2004, <http://abcnews.go.com>.
[3] Richard Norton-Taylor and Rosie Cowan, "Chemical bomb plot uncovered," Guardian Unlimited, 7 April 2004, accessed 7 April 2004, <http://www.guardian.co.uk>.
[4] Ross and Isham, "'Very nasty,' Potential bomb plot involved deadly chemical;" Sengupta, Kim, "Terror gas attack on Tube foiled by security agents," Independent.co.uk, 7 April 2004, accessed on 7 April 2004, <http://news.independent.co.uk>.
[5] Norton-Taylor and Cowan, "Chemical bomb plot uncovered;" Sengupta, "Terror gas attack on Tube foiled by security agencies."
[6] Martin Williams, "Terrorism plot chemical is for sale on the internet," The Herald, 7 April 2004, accessed 7 April 2004, <http://www.theherald.co.uk>.
[7] Ross and Isham, "'Very nasty,' Potential bomb plot involved in deadly chemical."
[8] Williams, "Terrorism plot chemical is for sale on the internet."
[9] Army Field Manual No 3-9, Potential Military Chemical/Biological Agents and Compounds (Washington, DC: Department of the Army), December 1990, p. 94.
[10] National Academy of Sciences, Prudent Practices in the Laboratory: Handling and Disposal of Chemicals (Washington, DC: National Academies Press, 1995), p. 364.
[11] Army Field Manual No 3-9, Potential Military Chemical/Biological Agents and Compounds (Washington, DC: Department of the Army, December 1990), p. 31.
[12] A. McLaughlin, R. Milton, and K. Perry (1946): "Toxic manifestations of osmium tetroxide" British Journal of Industrial Medicine, vol. 3, (1946), pp. 183-186, who report workers exposed to such levels "suffered from lacrimation and disturbances of vision and in some cases, headache, conjunctivitis, and cough." The value also reflects the current NIOSH Immediately Dangerous to Life or Health Concentration (IDLH), <http://www.cdc.gov/niosh/idlh/intridl4.html>.
[13] Centers for Disease Control IDLH Documentation, <http://www.cdc.gov/niosh/idlh/intridl4.html>. Value derived from laboratory results done on multiple animal species.
[14] Material Safety Data Sheet (MSDS) - Osmium tetroxide. No human toxicity data reported; values based on reported animal acute toxicity data, <http://www.proscitech.com.au/catalogue/msds/c010.pdf>.
[15] Material Safety Data Sheet (MSDS) - Phosgene, <http://www.boc.com/gases/pdf/msds/G067.pdf>, and ATSDR Medical Management Guidelines for Phosgene, <http://www.atsdr.cdc.gov/MHMI/mmg176.html>.
[16] Frederick R. Sidell, John S. Urbanetti, William J. Smith, and Charles G. Hurst "Vesicants" in Textbook of Military Medicine: Medical Aspects of Chemical and Biological Warfare (Washington, DC: Office of the Surgeon General Department of the Army, 1997), <http://www.nbc-med.org/SiteContent/HomePage/WhatsNew/MedAspects/contents.html>. Values of 12-70 mg-min/m3 are cited as threshold for eye damage and 100-500 mg-min/m3 are noted for inhalation airway injury.
[17] Material Safety Data Sheet (MSDS) - Lethal Nerve Agent Sarin (GB), <http://www.gulfweb.org/bigdoc/report/appgb.html>.
[18] F.A. Cotton, and Geoffrey Wilkinson, Advanced Inorganic Chemistry (New York: John Wiley & Sons, Inc., 1998), pp. 880-881.
[19] Alaxander Kuhl, Heiko Karels, and Wolfgang Kreiser, "New synthesis of 18-norestradiol" Helvetica Chimica Acta, vol. 82 (1999), pp. 30-34.
[20] National Academy of Sciences, Prudent Practices in the Laboratory: Handling and Disposal of chemicals (Washington, DC: National Academies Press, 1995), p. 167.

http://cns.miis.edu/pubs/week/040413.htm
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Counter-terrorism police foil chemical attack in Britain Posted by Admin on Tuesday, April 06, 2004 (PST) LONDON, England (CNN) – "Counter-terrorism police have foiled an apparent plot to launch a chemical attack in Britain." Of note, only HazMasterG3 can identify the suspected material without known identifiers.

If investigators encountered osmium tetroxide as an unknown substance during a raid, using HazMasterG3™ they could successfully identify it using the system's patent pending discovery capability. Only HazMasterG3™, with its built-in signature library of over 650,000 attributes can identify a wide range of toxic industrial materials, like Osmium tetroxide. How HazMasterG3 assists CNN Report HazMasterG3 has tools to assist in the identification of unknown materials based on observed physical attributes or via observed signs and symptoms. Using HazMasterG3's Discovery capabilities, the system would successfully identify osmium tetroxide based on its observable physical attributes. Once identified, HazMasterG3 provides instant access to a full spectrum of critical response capability: Health hazards, responder working allowances. Reactivity, flammability, toxicity and special hazards of osmium tetroxide. Accredited SOPs when dealing with the risk of fire, evacuation, spills, leaks, public safety, etc. Physical properties Signs and symptoms for people exposed to Osmium tetroxide. Specific first aid recommendations in cases of eye, skin, or ingestion exposure to osmium tetroxide. IED Standoff calculator when dealing with improvised explosive devices. Communication and reporting tools to instantly communicate findings to other responsible parties. Comprehensive accountability to precisely recreate all actions taken for after action review, follow-on training, or evidentiary purposes. The sources said the suspects had plans to lace a bomb with a chemical called osmium tetroxide. The plot was to combine that chemical with explosives that could create a toxic cloud on detonation, the sources said. Police suspect such a device could have been used to target a shopping center, an airport terminal, a nightclub, or a crowded city center. There is no suggestion by police sources that any osmium tetroxide was found in possession of the suspects, or that they had managed to obtain any. Tuesday afternoon, a spokesman at Scotland Yard said investigators were not prepared to discuss the alleged plot. Chemical experts said osmium tetroxide is toxic, openly available, and used primarily in research laboratories. It can give off a vapor that would cause skin and eye irritation. In confined spaces it can be lethal. This is the first time osmium tetroxide has been associated with an alleged terrorist plot. For additional information on HazMasterG3's state of the art capabilities, contact Alluviam LLC at 510 315-1974.

http://www.alluviam.com/community/Announcements/News/96.aspx
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Near Term Threats of Chemical Weapons Terrorism

Strategic Insights, Volume V, Issue 6 (July 2006)

by Margaret E. Kosal

Strategic Insights is a bi-monthly electronic journal produced by the Center for Contemporary Conflict at the Naval Postgraduate School in Monterey, California. The views expressed here are those of the author(s) and do not necessarily represent the views of NPS, the Department of Defense, or the U.S. Government. For a PDF version of this article, click here.

Introduction

The use of box cutters and small blades by terrorists during the September 11th attacks has been reported widely, whereas, the use of a chemical agent—“mace, pepper spray, or some other irritant”—in the airplane hijackings is much less well known.[1] Rather than setting up the proposition that such agents are the “latest-greatest” threat, this work aims to consider the potential threat of improvised chemical agents for terrorist use.

Traditional state-based chemical weapons (CW) programs share three technical characteristics that differ from terrorist use of chemical agents. States invest in substantial infrastructure for CW production and storage. This may be dedicated facilities, as was the case of the former U.S. and Soviet offensive programs, or dual-use facilities as seen in the covert Iraqi and Libyan state programs. States will also invest significantly in physical protection of their own troops and medical intervention in the event of exposure. Finally, traditional CW programs invest in research and development of munitions for open-air battlefield dispersal.

In comparison, non-state actors have shown a propensity to improvise the dissemination method and the agents. The use of improvised distribution methods was observed, most notably, in the 1990s by Japan’s quasi-religious doomsday cult, the Aum Shinrikyo, who employed syringes, garbage bags, and condoms to deliver classical chemical warfare agents. But, in more recent incidents, plots, and seizures, both the distribution methods and the agents themselves have been improvised.

Improvised chemical terrorism is critically different from an improvised nuclear or mass effect bioterrorism attack that would likely result in more than one thousand fatalities or 10,000 casualties. To execute an improvised chemical terrorism attack, a group or individual does not need sophisticated knowledge, elaborate engineering or growth requirements, nor complicated dissemination methods.

Improvised explosive devices (IEDs) are currently a tremendous problem for U.S. troops in Iraq, Afghanistan and around the globe.  Over half of the U.S. fatalities in Iraq have been due to IEDs, typically roadside bombs. This strongly suggests that there is a significant tacit knowledge base for constructing these types of weapons—one guy in a Mosul garage has not been making them all. Incorporating chemicals into roadside bombs would not substantially change the military casualties; the scenario would be significantly different, however, for devices used in enclosed spaces like dining tents or civilian facilities.

The path from the street chemistry of high explosives and detonators for IEDs to improvised chemical devices (ICDs) that incorporate commercial chemicals is very short.  Conversely, the path from IEDs to effectively weaponized, transgenic biological agents effectively weaponized is a substantial leap for states and, even more so, for terrorists.  While U.S. policy is focused on defending against a mass-effect bioterrorism attack, we may be missing a lower-tech threat of much higher probability. Rather than leaping from making bombs to producing mass quantities of aerosolized, genetically engineered, hyper-virulent Yersinia pestis (the bacteria responsible for the plague and used as part of the national terrorism preparedness exercise scenarios, TOP OFF 2 and 3), this article examines trends toward improvising both the delivery method (munitions) and the agent for chemical terrorism.

Is there substantive evidence of a shift, an “upping” of the sophistication level, to incorporate chemical agents into such devices? What policy responses can reduce the threat of improvised chemical devices? Is this shift part of a larger escalation to the use of unconventional weapons—that is, weapons of mass destruction (WMD)—by non-state actors? If such a large-scale escalation from IEDs to ICDs were to occur, the number of agents of concern would expand from approximately 50 traditional chemical warfare agents to thousands of known industrial and research chemicals. This analysis should be the basis for policy development regarding threat anticipation, threat reduction, and countermeasures to limit harm to U.S. troops deployed around the world and U.S. civilians at home.

Prior Work

A number of prominent authors have addressed the questions of terrorist desire and capability to pursue chemical or biological weapons.[2] Extensive analysis of terrorist incidents involving chemical and biological agents has been done on well-known incidents, such as the Aum Shinrikyo sarin “gas” attack on the Tokyo subway in March 1995 and the Rajneeshees salad bar dispersal of Salmonellatyphimurium bacteria.[3] A far smaller number of researchers have gone the other direction and challenged the precept that biological agents are within the technical capability of most terrorists.[4] At least one renowned terrorism expert has asked why terrorists have not escalated to fulfill the “lurid hypotheses of worst-case scenarios, almost exclusively involving chemical, biological, radiological or nuclear (CBRN) weapons” and “America’s intense preoccupation with the threat of bioterrorism.”[5] None of the authors have considered an escalation to chemical weapons as an outgrowth of “street chemistry,” the chemistry involved in manufacturing IEDs.

Traditional Chemical Warfare Agents with Improvised Dispersal Methods

One type of chemical terrorism—using traditional chemical warfare agents associated with state-based programs, but employing improvised distribution means —has received a great deal of attention.[6] This type of chemical terrorism may have been most infamously utilized by the Aum Shinrikyo cult in the mid-1990’s. Transfer of chemical weapons by those states suspected of operating clandestine offensive chemical weapons programs, such as North Korea—to non-state actors is another example.

Aum Shinrikyo

Aum Shinrikyo was a highly organized and well-financed group, having members with significant technical expertise. While the group succeeded in synthesizing sophisticated traditional nerve agents, they employed rudimentary delivery methods.

In the infamous March 1995 attack on the Tokyo subway system, sarin nerve agent was dispersed via garbage bags punctured by sharpened umbrellas. The nerve agent was manufactured from precursor chemicals the day before and diluted with acetonitrile. Approximately 600 mgs (1.3 lbs) were transferred to 11 polyethylene bags and distributed among five Aum Shinrikyo members. While there were only 12 fatalities associated with the subway attack, more than 5,000 individuals sought medical attention. More than 500 were seriously affected, including a few individuals whose corneas were so damaged that they had to be removed, resulting in permanent blindness. One small, but remarkable, lingering effect of the terrorist incident on the Tokyo population is the lack of garbage cans in public areas; even 10 years later, they are still associated with the sarin attack. This incident vividly illustrates the large-scale panic and disruption that chemical terrorism can produce in major urban areas.

The subway incident was the Aum cult’s only foray into chemical terrorism. In the five years leading up to the most renowned sarin attack, Aum Shinrikyo executed at least ten separate attacks. Four months earlier, in December 1994, Aum Shinrikyo released 20 kgs of sarin—from a truck using an industrial sprayer connected to a commercial heater—in the Matsumoto prefecture. The late night attack killed seven people and injured an additional 144 civilians. At least two deaths are associated with Aum Shinrikyo’s production of limited quantities of VX nerve agent. Synthesized for dispersal via hypodermic syringes, the attacks specifically targeted enemies of the cult. VX was dribbled on the back of one former cult member’s neck in a fatal December 1994 assault in Osaka.[7] Aum also employed an improvised apparatus at train and subway stations in May and July 1995 to generate the classic choking agent, hydrogen cyanide, from commercial sodium cyanide.

Homegrown Terrorists

Radical Islamists are not today’s only potential terrorists of concern, particularly with respect to chemical terrorism. Domestically, use of improvised chemical devices was part of the case against William J. Krar of Tyler, Texas.[8] An outspoken anti-government white supremacist, Krar was a traveling arms salesman. In January 2003, he was arrested in Tennessee during a routine traffic stop for handgun and drug possession. Along with conventional weapons, such as knives, stun guns, smoke grenades, over 250 rounds of ammunition, fuses, and hand combat items, Krar’s rental car contained a “syringe of an unknown substance, one white bottle with an unknown white substance, forty wine like bottles of unknown liquid … (and) three military style packaged atropine injections.”[9] A year later, after a package from Krar containing fake Department of Defense (DOD), Defense Intelligence Agency (DIA) and United Nations (UN) badges was delivered to the wrong address, federal investigators uncovered a disturbing array of weapons in an east Texas storage space rented by Krar and his female companion, Judith Bruey . Krar had amassed a sizable weapons cache, including half a million rounds of ammunition, hundreds of explosives, illegal firearms and stockpiles of cyanide salts and strong acids.

In his weapons armory were a number of improvised devices in varying stages of construction. The most complete device combined solid sodium cyanide with a strong acid to generate 440 grams of hydrogen cyanide (HCN). This would be, hypothetically, enough to kill almost 6,500 people based on percutaneous exposure. It could also kill half the people in a 9 x 40 x 40 foot enclosure in one minute.

What did Krar’s hydrogen cyanide device look like? He had placed just under two pounds of sodium cyanide powder—that Krar indicated he obtained from an electro-plating company[10]—in an old ammo box . It was to be combined with less than a half -liter of hydrochloric acid (HCl), or just over 0.7 liters of nitric acid (HNO 3), to produce the hydrogen cyanide vapor . One four-liter bottle of acid of a standard research size used at university and research facilities—would provide excess acid. Alternatively, excess acid could readily be obtained from eight bottles of a popular commercial toilet cleaner.[11] This was a readily concealable and easily transportable contraption, one that could easily fit in a small suitcase or be carried in a backpack.

Al Qaeda

Al Qaeda’s exploits in Afghanistan, testing unspecified lethal vapors on dogs and rabbits, have been well-covered in the commercial media.[12] Additional evidence of and analysis on al Qaeda’s extensive interest in chemical warfare agents was noted in a 2005 Intelligence Commission report.[13] U.S. troops are reported to have recovered “trace amounts of two common chemicals that can be used to produce a blister agent,” most likely sulfur monochloride (S 2Cl 2) or thiodiglycol (S(C 2H 4OH) 2). It was also reported that al Qaeda “almost certainly” had obtained or produced a number of traditional choking agents, such as chlorine, hydrogen cyanide, and phosgene. Those chemical warfare agents represent products commercially available or readily synthesized with basic skills, equipment and minimal infrastructure. These are not complex reactions requiring sophisticated laboratory equipment, controlled power sources for sensitive heating or cooling, or controlled environmental conditions.

In September 2003, the Department of Homeland Security issued an “Information Bulletin” alerting law enforcement and allied professionals regarding suspicions that al Qaeda intended to utilize an improvised method to generate hydrogen cyanide or cyanogen chloride from cyanide salts.[14] A primitive binary weapon for generating a choking agent, the device uses dual-purpose commercial chemicals, requires little or no training for assembly and operation, but does require some basic chemistry knowledge for initial design.

Improvised Chemical Agents

There is another type of potential chemical terrorism that has received almost no attention. Legitimate industrial or research chemicals, not traditionally associated with state-based chemical weapons programs, may be co-opted in order to generate improvised choking, blister, or nerve agents. In this case, both the agents themselves and the dispersal method are improvised.

Using reports available in the open-source literature, there appears to be an increasing interest among radical Islamists in exploiting fairly sophisticated chemistry for terrorist purposes. One case will be examined in detail.

Osmium Tetroxide

March 2004 Osmium Tetroxide Plot. A March 2004 plot disrupted in Britain was intended to combine an industrial chemical with an improvised explosive device to generate a choking and blistering agent. Osmium tetroxide (OsO 4) serves legitimate functions in biological research and in specialized chemical industry, but its suitability as a terrorist agent—a dual-use compound—is limited, despite the characterizations of it generating “chemical fallout.”[15]

GCHQ, the British electronic eavesdropping intelligence agency, learned that a group of terrorists were discussing the use of OsO 4 during phone calls among themselves, both within Britain and to Pakistan.[16] Hundreds of British anti-terrorism police tracked the group over the course of several months.[17] On March 30, 2004, raids were conducted at 24 locations throughout the London area. Authorities arrested eight British citizens—some of Pakistani origin, a Canadian, and a British-Algerian—who were allegedly involved in the planning stages of a terrorist attack. In the following week, reports emerged that these suspects, allegedly sympathetic to al Qaeda, were researching the potential of detonating a chemical bomb in a crowded, civilian location within London[18]—targeting Gatwick airport, the London subway, or other enclosed high-traffic areas. Fortunately, the suspects reportedly were not able to acquire the osmium tetroxide before being intercepted by authorities.

Although al Qaeda has previously produced training manuals containing plans for use of choking agents, this is the first time osmium tetroxide has been included among the list of possible chemical agents. This is the first incident in the open literature in which the chemical has been connected with terrorism. Although this plot did not progress beyond the planning stages, the potential use of osmium tetroxide has raised new fears about al Qaeda’s pursuit of dual-use chemicals as terrorist weapons. It has also encouraged discussion about the potential lethality of such a substance when combined with a conventional explosive.

Scientists were already familiar with the use and effects of OsO 4 even though those reports introduced the general public to the compound for the first time. OsO 4, occasionally called osmic acid, is a colorless to pale yellow solid at room temperature. An open canister of OsO 4 left in an enclosed area would be readily noticeable based on the characteristic pungent, ozone- or chlorine-like smell. The solid has a high vapor pressure, meaning it readily evaporates at room temperature. The vapor pressure of a chemical is important in determining the inhalation hazard. Liquids with very low vapor pressures, like VX nerve agent, do not evaporate readily and, therefore, are considered a much more significant threat for exposure via direct skin contact. Solids and liquids with no vapor pressure do not evaporate and therefore do not pose an inhalation hazard unless they are mechanically aerosolized.

Physiological Effects of OsO 4 Exposure . Osmium tetroxide is highly toxic and a rapid oxidizer. Severe reactions may result through all routes of exposure: inhalation, ingestion, contact with the eyes and other mucous membranes, and contact with skin. Because of its volatility, the vapor hazard is usually emphasized. Very short-term contact with the vapor may generate a lachrymation (tear-causing) response, accompanied by coughing, headaches, and dizziness.[19] Lengthier exposure can cause severe chemical burns to the eyes, skin, and respiratory tract. Symptoms may not be noticed until several hours following exposure. This delayed-effect feature may make this compound attractive to terrorists as a chemical weapon. People may not realize the extent of the toxic effects of a compound to which they have been exposed immediately; rather the damage will be occurring as they continue their day. Another delayed effect as a result of substantial inhalation exposure is an accumulation of fluid in the lungs (edema)—eventually leading to “dryland-drowning.” Exposure to osmium tetroxide dissolved in water will turn the skin black. Painful burns or dermatitis may result depending on the concentration. It is not known, however, to be cancer-causing. Among the most insidious effects of osmium tetroxide is its capacity to cause irreversible blindness—literally turning the corneas black.[20]

OsO 4 can be compared to traditional chemical warfare agents (see Table 1). The first appearance of a physiological response, also known as a threshold effect, is observed at a lower concentration for osmium tetroxide vapor exposure than for phosgene (CG), sulfur mustard (HD), or sarin nerve agent (GB). At first glance, the inhalation hazard associated with OsO 4 is comparable to that of the traditional asphyxiant phosgene and blister agent sulfur mustard based on lethal inhalation concentrations. Phosgene is a gas at ambient conditions, so all of the material will be available as an inhalation hazard. On the other hand, sulfur mustard is a liquid with a fairly low vapor pressure,[21] making it less volatile than OsO 4. This means that, in an enclosed area, there will be over 150 times more vapor available with OsO 4 than with sulfur mustard vapor.

While the lethal inhalation concentration of OsO 4 is substantially larger than that for sarin, again the decreased volatility of the traditional warfare agent should be considered in evaluating the relative threat. Under similar conditions, there will be six times more OsO 4 vapor in an enclosed area compared to sarin vapor. The overall inhalation risk for osmium tetroxide is estimated to be closer to sarin nerve agent than sulfur mustard or phosgene gas.

Legitimate Uses of OsO 4 . This substance is used primarily in the preparation of biological samples—a technique called fixation or fixing—to help maintain cellular and sub-cellular structures that would otherwise be damaged during further processing. Fixing is an important step in most biological applications of electron microscopy—looking at very small structures with electrons rather than light. OsO 4 reacts with the olefins in fatty acids and other tissues. Fixing has some similarities to staining used in traditional microbiology. The osmium atomic nucleus helps make the biological structures more easily seen under an electron microscope.

Osmium tetroxide is also used in specialized organic chemistry reactions[22]—such as the synthesis of the synthetic human hormone norestradiol[23]—and industrially significant glycol compounds. These reactions using solid osmium tetroxide are most commonly done on a laboratory scale.

Table 1: Toxicity Comparison of Osmium Tetroxide with Traditional Chemical Warfare Agents

	Threshold effects (mg / m 3)	LCt 50* (mg-min / m 3)	LD 50** (mg / kg)
Osmium Tetroxide (OsO 4)[24]	0.1 - 0.6	1316	162
Phosgene (PG)[25]	2	3200	n/a***
Sulfur Mustard (HD)[26]	12-500	1500	100
Sarin (GB)[27]	2	70	24.3

*LCt 50 is the vapor concentration that will cause death by inhalation in fifty percent of a population.

** LD 50 is the liquid concentration that will cause death via exposure through the skin (percutaneous), in this comparison, in fifty percent of a population. Values are given in mg per kg of total body weight; a 150 lb human weighs approximately 68 kg.

*** n/a = not applicable. Phosgene is a gas at ambient conditions.

Commercial Availability . Osmium tetroxide is commercially available as either a solid or as an aqueous solution (less than 6% OsO 4 by weight, due to limited solubility in water). Commercial quantities are typically very small and prices are high. Cost for the largest, commercially available units from a leading U.S. chemical supplier range from $118 for 1 gram of the solid compound to $195 for a 25 mL ampoule containing 2.5% OsO 4 by weight, dissolved in water (0.625 grams OsO 4 per vial). A terrorist attempting to use OsO 4 in the creation of a chemical terrorist weapon would most likely be hindered by its high cost. There would also be a danger to the terrorist in attempting to prepare an improvised explosive device containing large quantities of the chemical compound.

In packages of five grams or more, larger quantities are commercially available in which osmium tetroxide is bound to a polymer backbone. The polymer backbone, or support, eliminates the vapor hazards associated with solid OsO 4. Since immobilized OsO 4 was designed specifically to protect industrial workers, its utility as a weapon, even in large quantities, would be extremely low.

A leading U.S. chemical supplier of OsO 4 does not take any special precautions regarding sale of the chemical. But because of the potential dual-use nature of many chemicals with legitimate industrial and research purposes, all orders are screened prior to shipment.

Decontamination. If an OsO 4-containing solution were to be used as a chemical terrorist weapon, it could be decontaminated with copious amounts of any unsaturated cooking oil or dry milk.[28] Once a solution is black, the risk of rampant oxidation (burning) is abated.

Viability as a Chemical Terrorism Weapon. The feasibility of using a bomb to disperse OsO 4 is highly suspect. When heated, OsO 4 rapidly decomposes to OsO 2, which is effectively a rock. OsO 2 is used as a ceramic resistor in specialty electronic applications. Rather than generating chemical fallout, as in a dirty bomb scenario, the inhalation hazard would be destroyed with the bomb explosion. In addition to the difficulties and hazards faced by anyone seeking to use OsO 4 as a dirty bomb, the effect of the compound would be minimal in an open space and it would not leave lasting contamination in the same manner as a radioactive bomb. Because it is such a rapid oxidizer, it would most likely first enhance the combustion of the materials used for the bomb. As an oxidizer for an improvised explosive device, OsO 4 is very expensive choice and very risky for the bomb assembler. Thus, its utility in the creation of a dirty bomb, when combined with conventional explosives, is questionable.

Chemical terrorism incidents are not limited to those events involving explosives or incendiary materials. The danger and harm from OsO 4 as a chemical agent alone is substantially greater than as part of a dirty bomb. As a solid, the major danger comes from its inhalation. Therefore, OsO 4 presents the greatest hazard in an enclosed space with poor ventilation, whereas it would not be effective in a large, open air venue. In solution form, the major danger is via the skin (percutaneous) or ingestion.

As a terrorist weapon, however, the biggest problem with osmium tetroxide is its nature as a rapid, indiscriminate oxidizer. OsO 4 doesn’t distinguish between membranes in the human eye and lungs, plants, rubber, or cooking oil. While it has the potential to inflict horrifying damage to the body in the form of chemical burns and blindness, it does not specifically target a critical physiological function as nerve agents do. A second limitation as a terrorist weapon is its volatility. The persistency of both sarin and VX substantially exceeds that of OsO 4.

OsO 4, although unquestionably a lethal compound, is not estimated to be a viable dirty bomb hazard as it will readily decompose if utilized with explosives. In comparison to traditional chemical warfare agents, OsO 4 has similarities to the choking agents: high volatility and targeting of the respiratory system. It resembles the blister agents, like sulfur mustard, in that it attacks the eyes, burns the skin (by a different molecular mechanism than sulfur mustard), and has some delayed effects. Unlike sulfur mustard, however, the blindness from OsO 4 vapor exposure is permanent. Because of its high volatility in combination with its high toxicity, the inhalation risk of OsO 4 vapor verges that of sarin nerve agent; but it does not target critical nerve connections that control the cardiovascular and respiratory systems as the nerve agents do. Additionally, the persistency of osmium tetroxide vapor is low in comparison with the nerve agents and sulfur mustard.

The incorporation of osmium tetroxide, a fairly obscure inorganic compound, into terrorist training manuals, suggests some familiarization with advanced undergraduate level chemistry. The British terrorist suspects recognized the deleterious health effects, but their plan to incorporate OsO 4 into a conventional explosives bomb showed a lack of sophisticated and detailed understanding of inorganic chemistry. Their level of knowledge might be indicative of a member who is a graduate-level individual or a technician. Either one could be in a research lab or industrial biochemistry, molecular biology, or biomedical engineering laboratory and have access to OsO 4. The plot does not point to people with graduate-level experience in synthetic chemistry or significant experience in an industrial setting. This incident may also hint at an escalating terrorist interest in pursuing non-traditional chemicals as improvised weapons. Put concisely, in a chemical weapon incident, one cannot assume just chemists are involved; similarly in a biological weapon incident, one cannot assume just biologists are involved. One is more likely to obtain skills for dissemination of biological agents from experience and expertise in polymer science, materials engineering, or chemical engineering rather than from modern molecular biology.

Hydrazoic Acid

Another example of an improvised chemical weapon is the reported interest in hydrazoic acid (HN 3)—a toxic gas generated when from solid sodium azide (NaN 3) is combined with an aqueous oxidizer. Large amounts of the chemical compound were recovered from two Islamist terrorist groups with ties to al Qaeda—the Jemaah Islamiah in Malaysia and Indonesia[29] and part of the April 2004 plot discovered in Jordan linked to Mus’ab al-Zarqawi.[30] Malaysian police confiscated an unspecified amount of sodium azide as part of a cache of explosive chemicals outside of Kuala Lumpur that they linked to Jemaah Islamiah, the terrorists responsible for the October 2002 Bali bombing. There is some dispute as to whether the cache of material seized in April was intended for a chemical bomb or a conventional explosion.

Sodium azide (NaN 3) is a thermodynamically unstable, but kinetically inert, chemical that generates nitrogen gas (N 2) when heated. It is used commercially in automotive airbags and has legitimate use as a fungicide and pesticide. The compound has also long been used to generate shock-sensitive detonators. The addition of an acid yields hydrazoic acid, a poisonous gas more lethal than the traditional blood agent, hydrogen cyanide. It is also a lethal chemical when ingested and has previously been used in criminal homicides and suicide, particularly in Japan.[31]

Iraqi Insurgents

Reportedly the Al-Abud network in Iraq has shown interest in chemical weapons.[32] The Jaysh Muhammed (JM) formed the Al-Abud network in late 2003 in response to Operation Iraqi Freedom. Initial attempts to produce traditional agents were unsuccessful, so the terrorists shifted to improvised agents. They recruited an “inexperienced Baghdad chemist” to attempt to produce two traditional chemical warfare agents—the nerve agent tabun and the vesicant nitrogen mustard. Precursors were obtained from “chemical suk district” and “farmers” who looted state companies. After initial, unsuccessful attempts, the terrorist network shifted emphasis to the production of “napalm” and sodium fluoride acetate with which to fill conventional mortars obtained from JM contacts. The specific composition of the “napalm” is not provided.

Related Potential Terrorist Threats

There are two additional types of improvised chemical terrorism that have not been addressed directly in this study. The first is deliberate attack on an industrial chemical facility as a means to cause either mass effect terrorism—release of toxic vapor—or the destruction of a nation’s critical infrastructure.[33] The Union Carbide disaster in Bhopal, India in December 1984 is illustrative of the catastrophic scale that is possible from mass-effect terrorism. There were more than 3,800 fatalities from the initial release of methyl isocyanate in that accident, and it is estimated that 200,000+ were affected during the ensuing 20 years. Attacks may also involve targeting commercial infrastructure as a means of economic terrorism or to disrupt the critical infrastructure of the nation.[34]

According to the U.S. Army Surgeon General’s Office, the worst-case scenario for a terrorist attack on a domestic, industrial chemical facility is “up to 2.4 million people killed or injured—close to the number estimated by chemical companies themselves,” as calculated by the U.S. Army Surgeon General’s Office.[35] More than 15,000 facilities throughout the U.S. produce, store, and transport industrial chemicals in substantial quantities.[36] In 1996, the U.S. Environmental Protection Agency (EPA) determined “a worst-case release” could endanger more than one million people located near any one of its 123 identified facilities.[37] More recent assessments assert that, “at present, about 600 facilities could potentially threaten between 100,000 and a million people … [Another] 2,000 facilities could potentially threaten between 10,000 and 100,000 people.”[38] The numbers are staggering.

A speaker at an industry-sponsored Chemical Security Summit surmised, “You’ve heard about sarin and other chemical weapons in the news. But it’s far easier to attack a rail car full of toxic industrial chemicals than it is to compromise the security of a military base and obtain these materials.”[39] Attacks on industrial chemical facilities may be seen as one element of the greater shift in chemical warfare from the state-based chemical weapons programs toward improvised agents, munitions, and methods for terrorism.

The second additional type of improvised chemical terrorism involves unsecured or under-secured traditional chemical warfare agents and munitions. The principal hazards of this sort are the stockpiles of former Soviet Union,[40] although there are several others. Alleged chemical proliferator states, such as Pakistan and North Korea, are suspected of a willingness to sell to terrorists. Insurgents have reportedly threatened use of looted Iraqi chemical munitions against U.S. troops.[41] Recovery of abandoned or sea-dumped chemical munitions may pose an extreme threat. And, even while highly secure, the destruction of the remaining U.S. chemical weapons stockpiles is being accelerated since these sites are considered potential terrorist targets following the September 2001 terrorist attacks.

Conclusions and Recommendations

The path from street chemistry IEDs to improvised chemical devices is very short. There are two divergent concerns: 1) traditional CW agents dispersed via improvised methods, and 2) improvised agents and delivery methods. Although Japan’s Aum Shinrikyo mimicked a small-scale version of state-based programs, it is not the only model—and may not be the best model—for urban chemical terrorism. Lone individuals or small groups may improvise more. Large quantities and extensive facilities are not required for urban chemical terrorism. Within the global Salafist jihad, there is evidence to suggest an increasing interest in exploiting fairly sophisticated chemistry for terrorist purposes.

Chemical terrorism is likely to be a crime of opportunity for those familiar with chemistry and having access to chemicals. Controlling the materials for use as improvised chemical agents is not a trivial issue, requiring the list of agents of concern to be expanded from the approximately 50 associated with traditional CW to thousands of known commercial chemicals. Former Secretary of the Navy, Richard Danzig, has written on what he calls the “reload” phenomenon: “Our national power to manage the consequences of repeated biological attacks could be exhausted while the terrorist ability to reload remains intact.”[42] With ICDs, the “reload” factor—the potential to repeat an attack, multiple times—is equivalent to or higher than that for biological terrorism given the ubiquitous dispersion of chemical compounds throughout the industrialized world.

Perhaps basic knowledge and materials are too globally widespread to justify efforts to control the capability of terrorists to co-opt them for malfeasant uses.  Unlike the stocks of fissile material from the Cold War that can be secured, materials for bioterrorism—with some exceptions—are widespread and unsecured

Leaping from this threat assessment directly to recommendations for governmental or individual action is not something I want to advocate.  Rather this threat assessment needs to be considered as part of a broader, comprehensive assessment of terrorist weapons and terrorist targets, which should contribute to policy decisions about funding for research, countermeasures and emergency response. It is a piece of a much wider puzzle, not a ‘turf war.’ While the probability of attack employing ICDs is high, the potential consequence of an improvised nuclear or mass-effect bioterrorism event is much higher. This type of threat assessment needs to be integrated with robust technical evaluations of the risks of bioterrorism, nuclear terrorism and radiological terrorism.  Threat assessments also should be integrated into the dialogue of those involved in emergency response, as well as those involved in the experimental laboratory research that may have implications for homeland defense and international security.

About the Author

Dr. Margaret Kosal is a Science Fellow at Stanford University’s Center for International Security and Cooperation (CISAC). Her research has explored a range of issues relating to biological and chemical terrorism and nonproliferation. Specific interests include the entanglement of emerging and dual-use technologies, such as nano- and biotechnology, that impact security concerns. Most recently, she has published research on proliferation and terrorist risks of nanotechnology and on an unaddressed issue of agricultural terrorism. She is currently leading a study of chemical and biological weapons detectors and the integration of policy and technical issues for civilian use, including attribution and verification. She has also investigated the unanticipated role of the public in chemical weapons destruction and their impact on an international arms control treaty.

She received her B.A. in Chemistry from the University of Southern California in Los Angeles and did her doctoral work at the University of Illinois at Urbana-Chicago, investigating the synthesis and behavior of solid-state porphyrinic nanoporous networks, resulting in the publication of seven papers and a book chapter. She continued at the University of Illinois as a post-doctoral researcher exploring thin-film molecular recognition materials that mimic human proteins. She has also held positions at Northwestern University's Feinburg School of Medicine and at the Monterey Institute of International Studies' Center for Nonproliferation Studies (CNS). In early 2001, Kosal and three colleagues founded a sensor company, ChemSensing, leading research on the detection of explosives, chemical agents, neuroactive poisons and bacterial biological warfare agents.

For more insights into contemporary international security issues, see our Strategic Insights home page. To have new issues of Strategic Insights delivered to your Inbox, please email ccc@nps.edu with subject line "Subscribe." There is no charge, and your address will be used for no other purpose.

References

1. Based on transcripts of phone calls from flight attendant Betty Ong on American Airlines Flight 11, which struck the North Tower, quoted from The 9/11 Commission Report, Final Report of the National Commission on Terrorist Attacks Upon the United States, (July 2004), 5. Transcript of Ong’s call (from Mike M. Ahlers), “9/11 Commission Hears Flight Attendant’s Phone Call,” CNN Washington Bureau, January 27, 2004: “Somebody’s stabbed in business class, and, um, I think there’s Mace that we can’t breathe. I don’t know; I think we are getting hijacked;” See also William Langewiesche, American Ground: Unbuilding the World Trade Center, (New York: North Point Press, 2003), 79-80.

2. Neither an exclusive, nor exhaustive, selection of references includes the following: John F. Sopko, “The Changing Proliferation Threat,” Foreign Policy 105 (1996-1997), pp. 3-20; Richard K. Betts, “The New Threat of Mass Destruction,” Foreign Affairs 77 (1998), 26-41; Ehud Sprinzak, “The Great Superterrorism Scare,” Foreign Policy (1998), 110-125; D.A. Henderson, “The Looming Threat of Bioterrorism,” Science 283 (1999), 1279-82; Jessica Stern, The Ultimate Terrorists (Cambridge, MA: Harvard University Press, 1999); Jean Pascal Zanders, “Assessing the Risk of Chemical and Biological Weapons Proliferation to Terrorists,” The Nonproliferation Review (Fall 1999), 17-34; Nadine Gurr and Benjamin Cole, The New Face of Terrorism: Threats From Weapons of Mass Destruction (New York: I.B. Tauris, 2000); Christopher F. Chyba, “Biological Terrorism and Public Health,” Survival 43 (2001), 126-50; Brian M. Jenkins, “Terrorism and Beyond: A 21st Century Perspective,” Studies in Conflict and Terrorism 24 (2001), 321-7; Jonathan Tucker, “Chemical Terrorism: Assessing Threats and Responses,” in High Impact Terrorism: Proceedings of a Russian-American Workshop, (Washington, D.C.: National Academy Press, 2002), 117-33; and Audrey Kurth Cronin, “Terrorist Motivations for Chemical and Biological Weapons Use: Placing the Threat in Context,” Defense & Security Analysis, vol. 20 (2004), 313-20.

3. T. J. Torok, et al., “A Large Community Outbreak of Salmonellosis Caused by Intentional Contamination of Restaurant Salad Bars,” JAMA 278 (1997), 389-95; see also Kyle B. Olson, “Aum Shinrikyo: Once and Future Threat?” Emerging Infectious. Diseases 5 (1999), 513-6; Jonathan B. Tucker, Toxic Terror: Assessing Terrorist Use of Chemical and Biological Weapons, (Cambridge, MA: MIT Press, 2000); Amy E. Smithson and Leslie-Anne Levy, Ataxia: The Chemical and Biological Terrorism Threat and the US Response, Report No. 35 (Washington, D.C.: Stimson Center, October 2000); Neal A. Clinehens, “Aum Shinrikyo and Weapons of Mass Destruction: A Case Study,” Maxwell Air University, April 2000.

4. Milton Leitenberg, “Biosecurity and Bioterrorism,” in M. Martellini, ed., An Assessment of the Threat of the Use of Biological Weapons or Biological Agents (Landau Network Centro Volta, 2000); see also Jonathan B. Tucker and Amy Sands, “An Unlikely Threat,” Bulletin of the Atomic Scientists 55 (1999), 46-52; Dean A. Wilkening, “BCW Attack Scenarios,” in Sidney D. Drell, Abraham D. Sofaer and George D. Wilson, eds. The New Terror: Facing the Threat of Biological and Chemical Weapons (Stanford, CA: Hoover Institution Press, 1999), 76-114; Rebecca L. Ferichs, Reynolds M. Salerno, Kathleen M. Vogel, Natalie B. Barnett, Jennifer Gaudioso, Loren T. Hickok, Daniel Estes, and Danielle F. Jung, Historical Precedence and Technical Requirements of Biological Weapons Use: A Threat Assessment, International Security Initiatives (Albuquerque, NM: Sandia National Laboratory, May 2004).

5. Bruce Hoffman, “Rethinking Terrorism and Counterterrorism Since 9/11,” Studies in Conflict & Terrorism 25 (2002), 303-16.

6. See, for example, the leaked draft of the U.S. Homeland Security National Planning Scenarios, which include the use of nerve or blister agents as 2 of 15 potential man-made and natural emergency disasters.

7. Hitoshi Tsuchihashi, Munehiro Katagi, Mayumi Nishikawa, and Michiaki Tatsuno, “Identification of Metabolites of Nerve Agent VX in Serum Collected from a Victim,” Journal of Analytical Toxicology 22 (1998), 383-8.

8. Michael Reynolds, “Homegrown Terror,” Bulletin of the Atomic Scientists 60 (2004), 48-57; see also Julian Borger, “U.S. Extremists to be Sentenced Over Bomb Plot: Texas Couple Had Arsenal Capable of Killing Thousands,” The Guardian (London, UK), January 8, 2004, 13; and Tyler Thomas Korosec, “Gun Dealer Sentenced, but Motive Still Mystery; Weapons Case Called Win Over Terror,” The Houston Chronicle, May 5, 2004, A23.

9. USA v. William J. Krar, Criminal Complaint filed April 3, 2004, United States District Court Eastern Texas District, 7-8. Later in the complaint, reference is made to a “gas mask,” documents “which contained directions for exerting a covert type plans/operations to avoid law enforcement,” and a “syringe of brown liquid and the unknown white powder, all taken from his (Krar’s) rental car,” during his January 2003 arrest in Tennessee (24).

10. Michael Reynolds, private communication with the author, March 21, 2005.

11. Note: not all commercially available products contain hydrochloric acid.

12. Judith Miller, “Qaeda Videos Seem to Show Chemical Tests," The New York Times, August 19, 2002, 1A; see also Dana Priest, “Archive of Al Qaeda Videotapes Broadcast; Dogs Shown Dying from Toxic Vapor,” The Washington Post, August 21, 2002, A13; and Jack Kelley and Bill Keveney, “Tapes of al-Qaeda Supply Evidence of Terror Plans,” USA Today, August 20, 2002, 4A.

13. “Report to The President of the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction,” (Unclassified), March 31, 2005.

14. “Terrorist Chemical Device,” DHS Information Bulletin, (Unclassified), September 16, 2003.

15. Ben Taylor and Stephen Wright, “Britain Foils Chemical Bomb Plot,” The Advertiser (Sydney), April 8, 2004, 1A.

16. Brian Ross and Chris Isham, C., “Very Nasty: Potential Bomb Plot Involved Deadly Chemical,” ABCNEWS.com, April 5, 2004.

17. Ibid.

18. Richard Norton-Taylor and Rosie Cowan, “Chemical Bomb Plot Uncovered,” The Guardian, April 7, 2004, A1.

19. National Academy of Sciences, Prudent Practices in the Laboratory: Handling and Disposal of Chemicals, (Washington, D.C.: National Academies Press, 1995), 364.

20. Unlike the painful but temporary blindness associated sulfur and nitrogen mustard vesicant agents.

21. Army Field Manual 3-9, 94.

22. F. A. Cotton and Geoffrey Wilkinson, Advanced Inorganic Chemistry (New York: John Wiley & Sons, Inc., 1998), 880-881.

23. Alexander Kuhl, Heiko Karels, and Wolfgang Kreiser, “New Synthesis of 18-norestradiol,” Helvetica Chimica Acta 82 (1999), 30-31.

24. A. McLaughlin, R. Milton, and K. Perry, “Toxic Manifestations of Osmium Tetroxide,” British Journal of Industrial Medicine 3 (1946), 183-6.

25. Army Field Manual 3-9, Op. Cit., 94.

26. Frederick R. Sidell, John S. Urbanetti, William J. Smith, and Charles G. Hurst, “Vesicants,” in Textbook of Military Medicine: Medical Aspects of Chemical and Biological Warfare (Washington, D.C.: Office of the Surgeon General, Department of the Army, 1997).

27. Frederick R. Sidell, “Nerve Agents,” in R. Zajtchuk, and B. F. Bellamy, eds., Medical Aspects of Biological and Chemical Warfare,. (Washington, D.C.: Office of the Surgeon General, Department of the Army, 1997); 129-79.

28. National Academy of Sciences, Prudent Practices, 364.

29. Simon Elegant, “Poisonous Minds,” Time (Asia) 161, June 30, 2003; see also Darren Goodsir, “Chemical Find Raises JI Strike Alarm,” The Sydney Morning Herald, July 14, 2003; see also Zachary Abuza, “Reasons Why Jakarta Should Worry Us,” The Sydney Morning Herald, August 7, 2003.

30. David Blair, “Al-Qa’eda Plot Would Have Killed 20,000,” The Daily Telegraph (London), April 19, 2004,11; see also “Chemical Attack Said Thwarted on Jordan Security HQ, US Embassy,” BBC Monitoring International Reports, April 16, 2004; “Jordan ‘Was Chemical Bomb Target,’” BBC News World Edition, April 17, 2004; FBIS documents; also Author’s private communication with ABC News correspondent, July 2004.

31. “5 Sickened by Poison at Mie University,” The Daily Yomiuri (Tokyo),October 17, 1998,1; see also “Poison Tea Fells Four in Aichi Lab,” Asahi News Service (Tokyo), October 28, 1998; “Long Jail Time Sought for Nigata Poisoner,” Mainichi Daily News (Japan), July 31, 1999,12; “Coffee Spiked With Deadly Poison, Mainichi Daily News (Japan), January 17, 2001, 12; “Doctor Faces 18 Months Jail for Poisoning Staff,” Mainichi Daily News (Japan), November14 , 2002, 1; “Chemical Researcher Held in Poisoning Case,” Asahi Shimbun (Tokyo), August30, 2002; and “High Court Returns Hospital Poisoning Case to Lower Court,” The Daily Yomiuri (Tokyo), August 6, 2004, 2.

32. Central Intelligence Agency, “Comprehensive Report by the Special Advisor to the DCI on Iraq’s WMD: Iraq’s Chemical Warfare Program,” September 30, 2004.

33. Margaret E. Kosal, “Terrorism Targeting Industrial Chemical Facilities: Strategic Motivations and International Repercussions,” manuscript submitted to International Security.

34. Office of the White House, “The National Strategy for the Physical Protection of Critical Infrastructures and Key Assets,” February 2003, xii, 6, 65-66; see also United States General Accounting Office (GAO), “Homeland Security: Voluntary Initiatives are Under Way at Chemical Facilities, but the Extent of Security Preparedness is Unknown,” GAO-03-439, March 2003.

35. U.S. Army, “Draft Medical NBC Hazard Analysis of Chemical-Biological-Radiological-Nuclear-High Explosive Threat, Possible Scenarios & Planning Requirements,” (Army Office of the Surgeon General, October 2001), cited in United States General Accounting Office (GAO), “Homeland Security: Voluntary Initiatives are Under Way at Chemical Facilities, but the Extent of Security Preparedness is Unknown,” Report to Congressional Requesters, GAO-03-439, (Washington, D.C.: United States General Accounting Office, March 2003) 11, and in Eric Pianin, “Study Assesses Risk of Attack on Chemical Plant,” Washington Post, March 12, 2002, A8.

36. R. Nicholas Palarino and Robert Briggs, Briefing Memorandum for the hearing “Combating Terrorism: Chemical Plant Security,” U.S. House of Representatives, Subcommittee on National Security, Emerging Threats and International Relations, February 19, 2004; see also Lois Ember, “Worst-Case Scenario for Chemical Plant Attack,” Chemical & Engineering News 80 (2002), 8; and “Homeland Unsecured: The Bush Administration’s Hostility to Regulation and Ties to Industry Leave America Vulnerable” (Washington, D.C.: Public Citizen, October 2004), 19-40, 63-5.

37. U.S. Senate, “Chemical Security Act of 2002: Report to Accompany S. 1602,” Report 107-342, November 15, 2002, contains internal reference to data submitted in accordance with EPA-required Risk Management Plans (40 CFR 68).

38. U.S. Department of Homeland Security, “Characteristics and Common Vulnerabilities Report for Chemical Facilities,” version 1, revision 1, (July 17, 2003).

39. FBI Special Agent Troy Morgan quoted in Carl Prine, “Chemical Industry Slowly Boosts Security,” Pittsburgh Tribune-Review, June 22, 2003.

40. See, for example, Joby Warrick, “An Easier, but Less Deadly, Recipe for Terror,” Washington Post, December 2004, A1.

41. Hala Jaber, “Falluja’s Defenders Says They Will Use Chemical Weapons,” Sunday Times (London), October 31, 2004; see also Charles J. Hanley, “Looters Said to Overrun Iraq Weapons Site,” The Washington Post, October 31, 2004.

42. Richard Danzig, “Catastrophic Bioterrorism—What Is To Be Done? Center for Technology and National Security Policy,” (National Defense University: Washington, D.C., August 2003), 8, 9, 15.

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Bomb plot 'justifies terror alert'

Osmium tetroxide is not known as a chemical weapon agent The foiling of an alleged chemical bomb plot in Britain vindicates the government's continued warnings about the terror threat, David Blunkett says. Al-Qaeda sympathisers were believed to be targeting civilians in London. The plot was thought to involve detonating a combination of explosives and a chemical called osmium tetroxide. Britain's top policeman, Metropolitan Police Commissioner Sir John Stevens, has reiterated his belief that the UK was "in a state of real danger". Underlining his concerns about the terrorist threat, he said: "There is the chance that someone will slip through - it's my job to ensure they don't succeed." Sir John Stevens told The Spectator magazine it would be a dereliction in his duty if he "didn't engage the main means of combating terrorism ... the population". 'Our only protection' Mr Blunkett told BBC Radio 4's Today programme that recent events should counter claims in people's minds that "we exaggerated" the threat. "All of us, for two-and-a-half years have been indicating that that is precisely what the network called al-Qaeda, in its loose form, are actually about," he said. The public should be "praising and being very grateful that we have the security and counter-terrorism services we do because they are doing a first-class job", he said. "They have got my whole-hearted backing because this is the only protection we really have." It is unacceptable in the current climate that there is confusion over who is in charge of counter terrorism Michael Howard Meanwhile, the home secretary has made some changes to the way his department deals with counter-terrorism. Hazel Blears, who is minister for policing, crime reduction and community safety, will now be responsible for counter-terrorism which was previously the concern of Beverley Hughes before she resigned as immigration minister last week. Ms Hughes' replacement, Des Browne, will now concentrate more on asylum and immigration following a series of controversial scandals for the government in this area. Specialist material The target of the alleged chemical and explosives plot was thought to be areas in which there would be concentrations of people, possibly within a confined space. Alastair Hay, Professor of environmental toxicology at Leeds University, said osmium tetroxide was a rare catalyst and could potentially make an explosion occur more rapidly. OSMIUM TETROXIDE Laboratory chemical which requires precautions when handled Used in scientific experiments, not known as a chemical weapon agent Toxic and irritant, even in small amounts Direct contact causes skin and eye damage What is osmium tetroxide? But he told the BBC it would have to be obtained from a specialist chemical supplier and it did not fit the profile of a typical chemical warfare or dirty bomb agent. "It would not be in the same category as some radioactive substance which would continue to emit radiation and cause a problem in terms of clean up," he said. Security expert Dr Sally Lievesly said terrorists were well aware of the psychological impact a chemical bomb would create. "The emergency services would be faced with a terrible scene. They would have to kit out, they'd be delayed and the injuries they'd be seeing would be very bad, so their job is a very difficult one," she told BBC One's Ten O'Clock News. "With these types of attack, if the public are not prepared, this then becomes a weapon of psychological terror." The UK has been on a high state of alert since the bombings in Madrid on 11 March. 'Vital issue' Sir John has in the past said a terror attack on London was inevitable, but Mr Blunkett has tried to play this down. Tory leader Michael Howard has written to Tony Blair asking him to clarify his position on the need for a dedicated minister for homeland security. In his letter, Mr Howard says it is not clear from recent comments who is responsible for combating terrorism. "It is unacceptable in the current climate that there is confusion over who is in charge of counter terrorism, and I ask you to make clear your position on this vital issue as a matter of urgency," he said. Earlier, a Whitehall official told the BBC that, had this plot succeeded, it would have been the most serious attack on Britain in many years. All Credit to the BBC at:

http://news.bbc.co.uk/1/hi/uk_politics/3607141.stm_

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Terror by Chemical Bombs

Is a chemical bomb the next weapon of choice that al-Qaeda groups will use on the United States, the United Kingdom and continental Europe? There are strong indications that it is! Specialized al-Qaeda training camps turned out multiple hundreds of terrorists capable of producing such bombs. These people in turn trained even more in the chemistry of killing.

by Cecil Maranville

Are al-Qaeda and its shadowy branch groups even now planning to use horrible chemical weapons against targets in the Middle East, Europe and the United States? The evidence that they are is mounting steadily.

While visiting the United States in mid-April, Jordanian King Abdullah rocked the world with the revelation that his country's security service foiled a terrorist plot to kill up to 80,000 people with chemical agents. The carefully orchestrated scheme was thwarted just in time to avert a colossal disaster, which, in the king's words, "would have decapitated the government."

The primary target was the nation's General Intelligence Department, an intelligence service of world renown. The conventional blast and the chemicals it dispersed would have killed for a radius of about a half mile.

Secondary targets were the prime minister's offices and the U.S. embassy, on which the terrorists were intending to use poison gas.

Authorities stopped five trucks loaded with 17.5 tons of explosives and intercepted at least one car owned by the terrorists, loaded with a chemical bomb and poison gas. The car was captured 75 miles from the Syrian border. King Abdullah said his country believes the terrorists came from Syria, although that government denies it. (The king was careful to point out that Jordan did not believe that Syrian President Bashar al-Assad had any knowledge of the plot.)

Although greatly underreported, U.S. weapons inspector David Kay said in March that his investigation showed Iraq moved many components of its weapons of mass destruction program to Syria before the coalition forces invaded Iraq last spring.

A Syrian journalist, Nizar Nayuf, wrote the same thing in the Dutch De Telegraaf a few weeks before Kay's comments. Nayuf produced a letter from an Iraqi source detailing the transfer and the storage locations for the weapons.

Abu Musab al-Zarqawi

The Jordanians' success in stopping the mass murder by terror began with the arrest of two terrorists in early April. They pointed to the militant Islamic terrorist Abu Musab al-Zarqawi as the mastermind. The United States has a $10 million reward out on al-Zarqawi because of his terrorist activities in Iraq.

Just a few days before this writing, al-Zarqawi posted a message on an Arab Web site, encouraging Sunnis in Iraq to "burn the earth under the [foreign] occupiers' feet" (Mark Huband, "Terrorist Chemical Threat 'Worse Than Suspected,'" Financial Times, April 11, 2004).

This same al-Zarqawi is believed to be the mastermind of the Madrid bombing that led to the replacement of the pro-coalition government in Spain.

Is the man knowledgeable about chemical weaponry? Absolutely. He taught classes in chemical warfare at an al-Qaeda training camp in Herat, Afghanistan, in 2000 and 2001. And he ran the al-Qaeda training camp in northern Iraq that coalition forces took out in early 2003.

Britons prevent chemical terror attack on London

Other disturbing pieces of intelligence are slowly emerging from a sweeping raid conducted by British antiterrorism police on March 30, 2004. Ten people were arrested: eight Britons of Pakistani origin, another of Algerian origin and one Canadian. Hundreds of officers participated in the evidence search of 24 London locations, acting on telephone intercepts by GCHQ (the British electronic eavesdropping intelligence agency)—with possible help from the U.S. National Security Agency.

Those intercepts showed serious intent to acquire and use a chemical agent, osmium tetroxide (OsO4), in terrorist attacks on crowded public places, including Gatwick airport and the London subway. Attacks were not limited to the United Kingdom, for the plotters discussed U.S. targets, too, including the Sears Tower in Chicago.

(The Sears Tower had been among the sought-after targets for 9/11's bombing with hijacked commercial aircraft. Some terrorism experts note that al-Qaeda's persistence with the World Trade Center, after initially failing to destroy it in a 1993 bombing, indicates that the group will return to a missed target.)

Because of obvious problems in using OsO4 as a weapon, it's been generally discounted as an unlikely possibility. The largest deterrents to using OsO4 are: (1) it is expensive to purchase; (2) even though it has legitimate commercial uses, its sale is closely monitored; (3) it is dangerous for the bomb maker to work with; (4) the damage it causes doesn't compare to what could be done through a radiological device—in other words, it wouldn't be terrorizing enough to make it worth the trouble.

Osmium tetroxide—an insidious killer

That's not to say it wouldn't terrorize the public. It can indeed terrorize, and antiterrorism authorities have long been aware of its potential as a weapon. The effects of OsO4 are similar to the old blister agents, producing chemical burns to the skin, irritating the eyes and throat, causing dizziness and headaches.

But the real evil of OsO4 is that it works undetected for hours after exposure, causing effects that the victims are unaware of until too late. OsO4 will turn the cornea of the eye to brown or black, causing permanent blindness. Even more seriously, again over several hours, it slowly causes the lungs to fill with fluid and brings about the same type of death as a severe asthma attack. That is what is known as "dryland drowning."

Compared to deadly sarin gas (used to kill 12 and injure 5,000 in a terrorist attack on five Tokyo subway lines in 1995), victims have to inhale a great deal more OsO4 to suffer fatal effects. But sarin, like VX and many other chemical agents, is hard to aerosolize. OsO4 isn't. It vaporizes from its typical solid gel-like form the instant it comes in contact with the air. (A person can suffer its terrible effects just by opening a container of OsO4.) In a broad comparison with sarin, then, OsO4 is equally as deadly.

OsO4 is easy to absorb. It can be taken in by breathing, contact with the skin and through the eyes or any other mucous membrane. But these properties work against its effectiveness for a terrorist, too, because it is just as easily absorbed by other things, including rubber, plants and cooking oil.

Unlike radioactive material, there's no residual threat from OsO4, and it is easily cleaned up—further characteristics terrorists should find unattractive about the substance.

In an explosion, such as the British terrorists apparently intended to use to disperse OsO4, the chemical could actually have oxidized, rendering it useless.

Finally, as noted above, it's quite costly to buy. So why, in spite of the many downsides to it, were these terrorists planning to use osmium tetroxide?

Why use a dangerous and costly agent?

Let's look at the fact of its expense. A reality of state-sponsored terrorism and al-Qaeda's businesslike structure is that terrorists have considerable financial means to accomplish their wicked missions. They can afford costly weapons. (Al-Qaeda put out a statement recently that they had purchased two suitcase nuclear devices—if true, they paid in the millions of dollars for each one.)

Let's look at two more facts—that OsO4 is tightly controlled and dangerous to work with. In January of 2004, French antiterrorist police arrested five people on suspicion of plotting terrorism. Two of them confessed to a plan to use ricin poison and botulinum bacteria in attacks on Russian targets in France. The investigation uncovered the fact that one of the five was highly skilled in the production of chemical substances for weapons use.

So they had the means to obtain or manufacture, and the knowledge to use, chemical weapons. In a Financial Times interview, a senior French counterterrorism official warned: "We have seriously underestimated the terrorists' willingness and capacity to develop chemical weapons" (ibid., Mark Huband).

Where do they get such training, and what is the Russian connection? The terrorist with training in chemical warfare arrested by the French learned his skills in Chechnya. Hence the reason for targeting Russian interests—the terrorists sympathized with the al-Qaeda-connected terrorists in Chechnya.

But that's not the only place for training in chemical warfare. At least one other source, a Pakistani Islamist group, Lashkar-e-Toiba, is knowledgeable about chemical weaponry and has trained other groups within the al-Qaeda network.

As mentioned above, al-Qaeda had a training camp (maybe more than one) in Afghanistan to teach the chemistry that kills. Antiterrorist specialists now suspect that there is a wide network of such specialists who can aid each other in their goals—without detection through normal monitoring channels. Because their network is nearly impossible to break into, antiterrorist police know only part of the unsettling picture.

Were the London fanatics dumb?

Some suggest that the London terrorists knew only a little chemistry and did not know that they would likely destroy their osmium tetroxide by exploding a conventional bomb to disperse it. Were they ignorant? Were they on a fool's errand?

I'm not so sure. What if they intended to release the OsO4 after a conventional explosion? That is, after the first responders (police, firefighters and EMTs) came to the aid of the victims? Such timing would maximize the effect of the osmium tetroxide by redoubling the terror on the survivors of the initial explosion and targeting the first responders.

There's more intelligence from the French arrests. This group also had connections to Abu Musab al-Zarqawi, who is proving to be a criminal of colossal proportions. The day King Abdullah announced the foiled terrorist chemical attack, Jordan's state security court sentenced al-Zarqawi (and seven others) to death at an in-absentia trial for the 2002 murder of U.S. diplomat Laurence Foley in Amman.

Clearly, al-Zarqawi and al-Qaeda's fingerprints are all over the world—and the horrific specter of chemical weapons along with them. I am not so quick to assume that anyone associated with the evil gang was wasting time and money. They may have been crazy like a fox.

Implications from what we see and from prophecy

The implications are that terrorists will indeed use chemical bombs in future assaults. As 9/11 demonstrated, a single terrorist attack can strike a crippling blow to the strongest economies in the world. As "3/11" (the bombing of Madrid trains on March 11, 2004) demonstrated, a single terrorist attack can apparently bring down a government. Abu Musab al-Zarqawi's thugs nearly did it again in Jordan in April—only a month after their success in Spain.

They are clearly capable of planning multiple operations at the same time, in part, because terror cells are trained to operate independently of each other. At the same time, they can draw upon each other for resources, as necessary.

The U.S. security forces are gearing up to guard against possible attacks just before the presidential elections in November. Greece is bracing itself for possible attacks on Israelis, Americans and others at the Olympics in August of this year. The EU recently appointed an antiterrorist "czar" to coordinate European defenses against terror.

Yet, as Western government and security officials repeatedly warn their citizens, the defensive network must be right 100 percent of the time, whereas the terrorists have to meet their objective only once.

Terrorism has redefined the economies of the world, as untold trillions have been lost in revenues and/or spent on defensive measures. Terrorism has also redefined the political structure of many nations, for a given government's stand on antiterror efforts looms large in the minds of the electorate.

How does that dovetail with Bible prophecy?

The Bible foretells three shifts of seismic proportions in the geopolitical landscape:

(1) The modern inheritors of the wealth God promised to biblical Israel will suffer mortal defeat. Those nations are principally the United States, Great Britain, Canada, Australia and New Zealand.
(2) Much of Europe will coalesce into a sovereign entity, capable of dominating the world's economy and of marshalling armies to go to any place in the world they are needed.
(3) Another entity, identified only as the king of the South (Daniel 11:40), will provoke the European superpower to sweep into and take over the Middle East. Terrorist attacks on European targets may well be the catalyst that incites Europe to take this action.

We publish several booklets that present in easily understood language the Bible's warnings on these subjects: The United States and Britain in Bible Prophecy, You Can Understand Bible Prophecy, Are We Living in the Time of the End?, The Book of Revelation Unveiled and The Middle East in Bible Prophecy.

Consider the present evidence:

• Many hundreds, if not thousands, of terrorists are trained in the procuring, production and use of chemical bombs.
• The vicious and deadly al-Qaeda complex is capable of financing and mounting major operations in numerous countries around the world at the same or nearly the same time.
• The Bible forecasts crippling losses for some of today's leading nations.

One can only conclude that chemical bombs will indeed be used successfully, and soon... WNP

http://www.ucgstp.org/bureau/wnp/wnp0058/chemicalbombs.htm
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Improvised Chemical Agent: Osmium Tetroxide

Description and Property Data	Detection	Symptoms and Effects
Medical Countermeasures	Physical Contermeasures	Decontamination
Selected Precursors	Comments and Historical Notes	ICD Codes

GLOVES, GOGGLES, AND RESPIRATORY PROTECTION MUST BE USED

Hazardous on exposure by:  Ingestion Inhalation Injection Skin contact

Evacuate uphill and upwind without moving through the agent cloud.

http://www.ucgstp.org/bureau/wnp/wnp0058/chemicalbombs.htm
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CNS Subjects: Terrorism

Featured Terrorism Topics 2002 WMD Terrorism Chronology Covers incidents worldwide involving criminal or ideological motivations, including hoaxes and pranks. Al-Qaida Terrorist Group Profile "Suitcase Nukes": A Reassessment Assesses the threat that a number of portable nuclear devices ("suitcase nukes") could have fallen into the hands of terrorists or states that support them. After 9/11: Preventing Mass-Destruction Terrorism and Weapons Proliferation Examines the September 11, 2001, terrorist attacks in the United States, and analyzes U.S. and international responses to 9/11. It also proposes measures to avert terrorism and to reduce mass-destruction threats to U.S. and international security.

Jump to: Books | WMD Terrorism | U.S. Response | Group Profiles | Chronologies | Agroterrorism | Database

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Books

The Four Faces of Nuclear Terrorism Warns that substandard security at nuclear facilities in Europe, Central Asia, Russia, and Pakistan increases the risk of terrorists seizing highly enriched uranium to make crude, but devastating, nuclear explosives. By Charles D. Ferguson, William C. Potter, Amy Sands, Leonard S. Spector, and Fred L. Wehling. Created: June 18, 2004

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WMD Terrorism

• From the Horse's Mouth: Unraveling Al-Qa`ida's Target Selection Calculus
  Al-Qa`ida’s primarily selects economic targets to derail the American economy, to sever American and Muslim alliances, and to remove all Western influence from the Middle East.
  A CNS Research Story by Sammy Salama and David Wheeler
  Created: April 17, 2007

• Recent Weapons Grade Uranium Smuggling Case: Nuclear Materials are Still on the Loose
  Recent reports of the seizure of weapons-grade uranium from traffickers in Georgia raise concerns about poor cooperation against nuclear terrorism.
  A CNS Research Story
  Created: January 26, 2007

• Special Report: Manual for Producing Chemical Weapon to Be Used in New York Subway Plot Available on Al-Qaeda Websites Since Late 2005
  an article by Sammy Salama for WMD Insights.
  Created: July 21, 2006

• WMD Commission Report
  The WMD Commission Chairman Hans Blix recently presented the Commission's report to United Nations Secretary-General Kofi Annan. The full report is available on the WMDC website. CNS researchers contributed numerous papers and studies to the proceedings of the Commission.
  Created: June 23, 2006

• The real chemical threat
  An op-ed by Paul F. Walker and Jonathan B. Tucker for the Los Angeles Times.
  Created: April 7, 2006

• Does Intent Equal Capability? Al-Qaeda and Weapons of Mass Destruction (PDF format)
  A report by Sammy Salama and Lydia Hansell for the Fall-Winter 2005 issue of The Nonproliferation Review.
  Created: February 10, 2006

• Chart: Al-Qa`ida's WMD Activities
  The following table provides a comprehensive listing of reports concerning al-Qa`ida's involvement with chemical, biological, radiological and nuclear weapons in the period between 1997 and 2005.
  Updated: April 22, 2005
  Created: December 22, 2002

• Osmium Tetroxide - a New Chemical Terrorism Weapon?
  Serving legitimate functions in biological research and in specialized chemical industry, osmium tetroxide's suitability as a terrorist agent - a dual use compound - is limited, despite the characterizations of it generating "chemical fallout."
  CNS Research Story by Michelle Baker and Dr. Margaret E. Kosal.
  Created: April 13, 2004

• Chronology of Incidents Involving Ricin
  The use of ricin, a deadly toxin derived from the castor bean, marks the second case in three years where someone has sent mail containing a toxic substance to the offices of the country's most senior lawmakers.
  Created: February 3, 2004

• The Historical Roots of Current Terrorist Tactics and Methods
  To best understand these tactics, one needs to return to the roots of the Shi'i-Sunni conflict and explore how early Islamic history continues to impact the attitudes and religious interpretations of militant extremist Islamist groups.
  Research Story of the Week by Sammy Salama and Kathleen Thompson.
  Week of November 21, 2003

• 2002 Conventional Terrorism Chronology: Incidents Involving Sub-National Actors Resulting in Death or Injury (PDF format)
  By Wayne Turnbull
  Created: September 15, 2003

• 2002 WMD Terrorism Chronology: Incidents Involving Sub-National Actors and Chemical, Biological, Radiological, and Nuclear Materials (PDF format)
  By Wayne Turnbull and Praveen Abhayaratne.
  This chronology covers incidents worldwide involving criminal or ideological motivations, including hoaxes and pranks.
  Created: August 15, 2003

• Ricin Found in London: An al-Qa`ida Connection?
  In January, British authorities arrested seven men suspected of producing ricin in their north London apartment. At least one had attended an al-Qa`ida training camp in Afghanistan.
  Created: January 23, 2002

• Islamist Terrorist Threat in the Tri-Border Region
  The tri-border region of South America received little attention as a locus of terrorist activity despite a recent history of Islamist terrorist activity. But this region, which already has a history of mass casualty Islamic terrorism, is also an area of concern.
  An issue brief by Jeffrey Fields for the Nuclear Threat Initiative (NTI).
  Created: October 9, 2002

• "Suitcase Nukes": A Reassessment
  Attention to portable nuclear devices ("suitcase nukes") peaked in 1997-early 1998 following well-publicized allegations that an unknown number of these weapons could not be accounted for. This paper assesses the threat that a number of them could have fallen into the hands of terrorists or states that support them.
  Research Story of the Week.
  Week of September 23, 2002

• 2001 WMD Terrorism Chronology
  By Adam Dolnik and Jason Pate.
  This chronology covers incidents worldwide involving criminal or ideological motivations, including hoaxes and pranks.
  Created: September 18, 2002

• "Dirty Bomb" Threat Awakens Dormant Disarmament Conference
  "If an international institution's efficiency is partly determined by its ability to respond to external shocks and crises, the Jose Padilla controversy may help revive the Geneva-based Conference on Disarmament (CD)."
  Research Story of the Week by Daniil Kobyakov and Nicolas Florquin.
  Created: August 28, 2002

• The Real Sum of All Fears
  An op-ed for the Los Angeles Times by William Potter and Leonard Spector.
  Created: June 11, 2002

• Occasional Paper #8
  After 9/11: Preventing Mass-Destruction Terrorism and Weapons Proliferation
  Michael Barletta, ed.
  The papers in this collection examine the September 11, 2001, terrorist attacks in the United States, and analyze U.S. and international responses to 9/11. They also propose measures to avert terrorism and to reduce mass-destruction threats to U.S. and international security.
  Created: June 6, 2002

• "Keeping Track of Anthrax: The Case for a Biosecurity Convention,"
  An article by Michael Barletta, Amy Sands, and Jonathan B. Tucker, for the Bulletin of Atomic Scientists.
  Created: June 5, 2002

• Major Conventional Terrorist Incidents 1980s to 2000
  Updated: May 29, 2002
  Created: September 11, 2001

• "Would They If They Could?"
  An article on WMD terrorism by Gary Ackerman and Laura Snyder for the Bulletin of Atomic Scientists.
  Created: May 1, 2002

• Deconstructing the Chem-Bio Threat
  Testimony by Amy Sands for the Senate Foreign Relations Committee.
  Created: April 1, 2002

• Chemical and Biological Warfare: A Comprehensive Survey for the Concerned Citizen
  A new book by Eric Croddy.
  Created: 13 December 2001

• Testimony of Leonard S. Spector
  The November 14, 2001 testimony of Leonard S. Spector before the Subcommittee on International Security, Nonproliferation, and Federal Services, on improving the effectiveness of U.S. nonproliferation programs in the successor states of the former Soviet Union.

• Future Security Threats & Capabilities
  Listen to a Commonwealth Club talk with Jason Pate (Scroll down to recent forums).

• CBW Terrorism Additional Resources
  Created: 22 October 2001

• Anthrax: Background Report
  Created: 10 October 2001

• Roundtable on the Implications of the September 11, 2001, Terrorist Attacks for Nonproliferation and Arms Control
  A special report for the Nonproliferation Review, CNS, Vol. 8.3.
  Created: Fall-Winter 2001

• Strengthening Nuclear Security Against Terrorists and Thieves Through Better Training (PDF format)
  A report for the Nonproliferation Review, CNS, Vol. 8.3.
  by George Bunn, Fritz Steinhausler, and Lyudmila Zaitseva
  Created: Fall-Winter 2001

• Overview of Weapons of Mass Destruction Capabilities in the Middle East and South Asia
  If the United States starts military actions against either Afghanistan or Iraq, its forces will be operating in a region of the world where many countries have weapons of mass destruction (WMD), or are seeking to develop them.
  Created 14 September 2001

• United States Seeks Pakistan's Assistance
  Attention is turning to the role Pakistan can play in assisting a U.S. military strike on Afghanistan and in capturing alleged terrorist leader Usama Bin Laden.
  Created 14 September 2001

• February 1993 Bombing of the World Trade Center in New York City
  "The February 1993 bombing of the World Trade Center in New York City marked the beginning of an ugly new phase of terrorism involving the indiscriminate killing of civilians."
  Created 12 September 2001

• Issues and Analysis: Assessing the Threat of WMD Terrorism
  Jason Pate and Gary Ackerman
  Created 11 September 2001

• 2000 WMD Terrorism Chronology: Incidents Involving Sub-National Actors and Chemical, Biological, Radiological, or Nuclear Materials
  Jason Pate, Gary Ackerman, and Kimberly McCloud
  This chronology covers incidents worldwide involving criminal or ideological motivations, including hoaxes and pranks.
  Created 30 April 2000

• Bioterrorism: Legal Initiatives for Prevention/Deterrence
  Washington D.C. Office 2001 Briefing Series, April 17, 2001.
  Created: 2001

• Will We Be Ready?"
  "Whether it's a bioterrorist hoax or the real thing, Canada is unprepared." An op-ed by Gary Ackerman and Jeffrey Allan for The Globe and Mail.
  Created: 16 March 2001

• Chronology of Aum Shinrikyo's CBW Activities
  "Six years ago, on March 20, 1995, five members of the Japanese cult Aum Shinrikyo (Supreme Truth) boarded subway trains in Tokyo, Japan, and released the deadly chemical nerve agent sarin." A report by Tim Ballard, Jason Pate, Gary Ackerman, and Sean Lawson.
  Updated: 15 March 2001
  Created: 13 March 2001

• Allegations of WMD Terrorism
  Washington D.C. Office 2001 Briefing Series, March 13, 2001.
  Created: 2001

• WMD Terrorism and Usama Bin Laden
  "The current trial of Usama Bin Laden and others for the August 7, 1998 bombings of the U.S. embassies in Nairobi, Kenya and Dar al-Salaam, Tanzania, has shed new light on the efforts of Bin Laden and his terrorist organization, Al-Qa'ida ("The Base"), to acquire weapons of mass destruction."
  Updated: 14 March 2001
  Created: 7 March 2001

• 1999 WMD Terrorism Chronology: Incidents Involving Sub-National Actors and Chemical, Biological, Radiological, and Nuclear Materials
  by Gavin Cameron, Jason Pate, Diana McCauley, & Lindsay DeFazio, Nonproliferation Review, Vol. 7, No. 2, Summer 2000

• Mass Casualty Terrorism: Myths & Realities
  Washington D.C. Office 2000 Briefing Series, April 14, 2000.
  Created: 2000

  Toxic Terror: Assessing Terrorist Use of Chemical and Biological Weapons
  Created: April 2000

• Assessing the Risk of Chemical and Biological Weapons Proliferation to Terrorists
  Jean Pascal Zanders, Nonproliferation Review, Vol. 6, No. 4, Fall 1999

• "Historical Trends Related to Bioterrorism: An Empirical Analysis," Emerging Infectious Diseases, July/August 1999
  by Jonathan B. Tucker

• Are Suitcase Nukes on the Loose?
  A paper analyzing Alexander Lebed's claim that 100 suitcase-sized atomic weapons were unaccounted for in the Russian nuclear arsenal.
  Created: July 1998

• Information Warfare: Hype or Reality? (PDF format)
  A viewpoint for the Nonproliferation Review, CNS, Vol. 6.3.
  by E. Anders Eriksson.
  Created: Spring-Summer 1999

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U.S. Domestic Preparedness and Response to Terrorism

• Literature Review of Existing Terrorist Behavior Modeling (PDF format, 1.7 MB)
  Created: February 21, 2006

• Art or Bioterrorism? The Implications of the Kurtz Case
  In the war against terrorism, neither art, science, nor democracy should be an unintended casualty.
  CNS Research Story by Margaret E. Kosal.
  Created: July 27

• Bioterrorism Threat Assessment and Risk Management Workshop (PDF format)
  Final Report and Commentary presented to the U.S. Department of Energy on June 24, 2003 by Raymond A. Zilinskas (Rapporteur).
  Created: August 15, 2003

• Biosecurity Measures for Preventing Bioterrorism
  This essay and the companion research collection provide an introduction to biosecurity measures, a key element among policy efforts to address the threat of bioterrorism.
  Research Story of the Week by Michael Barletta.
  Created: November 25, 2002

• Legislative Response to Potential Bioterrorist Threat
  On June 12, 2002, President George W. Bush signed into law the "Public Health Security and Bioterrorism Preparedness and Response Act of 2002." The new law seeks to significantly increase America's ability to prepare for, prevent, detect and respond to bioterrorism in an efficient and coordinated manner.
  Research Story of the Week by Kristin Thompson.
  Created: July 12, 2002

• Vaccinate Saddam Against Invasion?
  An Op-Ed for the International Herald Tribune by Leonard S. Spector.
  Created: June 10, 2002

• Anthrax And Mass-Casualty Terrorism: What is the Bioterrorist Threat After September 11?
  An article by Jason Pate for the U.S. Foreign Policy Agenda, Vol. 6, No. 3, November 2001.
  Created: November 29, 2001

• Future Security Threats & Capabilities
  Listen to a Commonwealth Club talk with Jason Pate (Scroll down to recent forums).

• Improving Infectious Disease Surveillance to Combat Bioterrorism and Natural Emerging Infections
  Testimony by Jonathan B. Tucker, Ph.D, before the Senate Subcommittee on Labor, Health and Human Services, Education, and Related Agencies.
  Created: 8 October 2001

• Assessing the Threat of Mass-Casualty Bioterrorism
  The September 11, 2001 terrorist attacks have shown that the threat of mass-casualty terrorism has reached the United States. The subsequent series of anthrax letters has demonstrated that biological terrorism is a reality. These two developments—mass-casualty attacks and the use of biological agents—have signaled a new era in terrorism in the United States. An issue brief by Jason Pate and Gary Ackerman for the Nuclear Threat Initiative (NTI).
  Updated: October 2001

• Special Section on the September 11, 2001, Attacks: Interview with Ambassador Robert G. Joseph
  An interview for the Nonproliferation Review, CNS, Vol. 8.3.
  by Leonard S. Spector
  Created: Fall-Winter 2001

• U.S. Federal Funding to Combat Terrorism
  Lists funding to various federal agencies in order to combat terrorism, including defense against weapons of mass destruction.

• Better Plan Needed for Curbing Epidemics
  "Even though the United States has the most extensive disease surveillance and response system in the world, there are gaps in its ability to detect outbreaks early, as the 1999 West Nile virus outbreak illustrated." An Op-Ed for Newsday by Jason Pate.
  Created: 7 December 2000

• America and the "New Terrorism": Reassessing the Threat
  Washington D.C. Office 2000 Briefing Series, August 9, 2000.
  Created: 2000

• Combating Terrorism: Assessing Threats, Risk Management, and Establishing Priorities
  Testimony by John Parachini before the House Subcommittee on National Security, Veterans Affairs, and International Relations.
  Updated: 2 August 2000
  Created: 27 July 2000

• Combating Terrorism: Assessing the Threat
  Congressional Testimony by John V. Parachini
  Created: 25 October 1999

• Assessing the Threat of Bioterrorism
  Congressional Testimony by Raymond Zilinskas
  Created: 24 October 1999

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Terrorist Group Profiles

In light of the U.S. focus on Afghanistan and the Taliban in connection with the terrorist attacks of September 11, 2001, CNS has developed profiles of selected terrorist organizations operating in Afghanistan.

• Chart: Al-Qa`ida's WMD Activities
  The following table provides a comprehensive listing of reports concerning al-Qa`ida's involvement with chemical, biological, radiological and nuclear weapons in the period between 1997 and 2005.
  Updated: April 22, 2005
  Created: December 22, 2002

• Al-Qa`ida and Weapons of Mass Destruction
  The world's media have reported no less than 56 separate incidents involving al-Qa`ida and WMD, 36 of which have come to light since September 2001.
  Created: December 31, 2002

• Debunk the myth of Al Qaeda
• WMD Terrorism and Usama Bin Laden
• Al-Qaida
• Islamic Movement of Uzbekistan (IMU)
• Al-Jihad al-Islami
• Al-Gama'a al-Islamiyya

Top

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Terrorism Chronologies

• 2002 Conventional Terrorism Chronology

• WMD Terrorism Chronologies:
  2002 | 2001 | 2000 | 1999

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Agroterrorism

• Agroterrorism Resource Page
  Resources on Agroterrorism, including state-programs and chronology of incidents involving agroterrorism since 1915.

• Biological Terrorism Targeted at Agriculture: The Threat to US National Security (PDF Format)
  A viewpoint for the Nonproliferation Review, CNS, Vol. 7.3.
  by Rocco Casagrande
  Created: Fall-Winter 2000

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Terrorism Database

The Chemical and Biological Weapons Nonproliferation Program (CBWNP) at CNS systematically monitors incidents around the world involving the acquisition and/or use by sub-state actors of weapons of mass destruction (WMD), defined as chemical, biological, or nuclear materials.

If you are interested in obtaining further information about the databases, including subscription rates and terms, please contact Yavuz Atila, Database Manager at:

E-mail: cnsdb@miis.edu
Phone: +1 (831) 647-3580 [Pacific time]
Fax: +1 (831) 647-3519

Center for Nonproliferation Studies
Monterey Institute of International Studies
460 Pierce Street
Monterey, CA 93940, USA

• Web: http://cns.miis.edu

Further Resources: Chemical and Biological Weapons Resource Page

 

top  

Policy on Reproduction of Website Materials Is my browser supported?

Center for Nonproliferation Studies 460 Pierce Street, Monterey, CA 93940, USA Telephone: +1 (831) 647-4154; Fax: +1 (831) 647-3519 E-mail: cns@miis.edu; Web: http://cns.miis.edu

http://cns.miis.edu/research/terror.htm

Early Florida primary may hurt Democrats
Enforcing party rules may leave top contenders with no delegates

 May 20, 2007 Los Angeles Times 

http://www.jihadwatch.org/

______________________________________________________________________________________

The Great Divide: How Westerners and Muslims View Each Other
Europe's Muslims More Moderate

Released: 06.22.06

Navigate this report
Introduction and Summary
I. Muslims and the West - How Each Sees The Other
II. The Rift Between Muslims and the West: Causes and Consequences
III. Islam, Modernity and Terrorism
Voices from Countries
Methodological Appendix
Country Profiles
Questionnaire

Navigate this report
Introduction and Summary
I. Muslims and the West - How Each Sees The Other
II. The Rift Between Muslims and the West: Causes and Consequences
III. Islam, Modernity and Terrorism
Voices from Countries
Methodological Appendix
Country Profiles
Questionnaire

	COPYRIGHT PEW RESEARCH CENTER	CONTACT US     SITE SEARCH     USEFUL LINKS
	Pew Global Attitudes Project, a project of the PewResearchCenter 1615 L Street, NW   Suite 700   Washington, DC 20036 p 202.419.4400    f 202.419.4399   e info@pewglobal.org
http://pewglobal.org/reports/display.php?ReportID=253 _____________________________________________________________________________________________________________

______________________________________________________________________________________

The United States Institute of Peace promotes radical Islam with Muslim World Initiative and tax payer funding

June 5, 2006

The United States Institute of Peace aka the Ummah Shari'a Islamist Propagation Institute, is working together with radical Islamists promoting fundamentalism under the guise of their new 'Muslim World Initiative'.The USIP's new Saudi backed Islamist affiliates include CAIR, MPAC, ISNA and the CSID. Among the board members are CAIR's Nihad Awad, Ahmed Younes of MPAC, and the CSID's Radwan Masmoudi, as well as Imam Hassan Qazwini of the Islamic Center of America and Democratic Senator Larry Shaw a Muslim who is also a board member of CAIR. http://www.cair-net.org/default.asp?Page=articleView&id=1972&theType=NR

After infilitrating the USIP, Abdelsalem Mahgrouhi, the head of the Muslim World Initiative authored a USIP briefing coyly entitled: "What do Islamists really want? 'An Insiders discussion with Islamist leaders', in which he made the absurd claim that there were moderate Islamists:

An important distinction can be drawn between moderate and radical Islamists. Moderate refers to political parties and movements that use Islamist principles, Islamic law, and/or Islamic referents to participate peacefully in the political process. Radical, extremist, Wahhabists, Salafists, or Jihadists are terms for those who eschew nonviolence in the name of their Islamic beliefs....The most effective strategy to engage Islamists on normative democratic issues is to refer to Islam's progressive and humanistic traditions, not to Western liberal democracy.

MIM: In the Islamofacist weltaanschauung of Maghroui and the USIP's Muslim World Initiative:

Moderate Islamists support Hamas' right to resist occupation and consider its government democratic and legitimate.

Moderate Islamists therefore see no contradiction between Hamas being in charge of the Palestinian Authority and attacking Israel.

http://www.usip.org/pubs/usipeace_briefings/2006/0522_islamists.html (see complete briefing below)

The inclusion of Saudi funded terrorist tied groups under the aegis of the USIP, and the premise that there are radical and moderate terrorists, indicates that The United States Institute of Peace has morphed into the Ummah Shar'ia Islamist Propagation Institute. The federal government is now funding the spread of radical Islam. The USIP's Islamist leanings are nothing new, put the new addition of Saudi funded radical Islamist organisations with documented terrorist ties, demands that the public contact their elected officials and demand that they reassess and cut their government funding and political support to the USIP.

In 2004 then board member of the United States Institute of Peace, Dr. Daniel Pipes, wrote an article criticising the USIP's invitation of Islamists to the Institute called "The USIP Stumbles".

Investigative journalist Kenneth Timmerman of Insight magazine further highlighted the dangers of the USIP hosting terror tied groups, and echoed Dr. Pipes concerns in a piece entitled "Pipes Objects to the Fox in the Henhouse"and quoted Dr.Pipes' who told him that:

"I believe that President [George W.] Bush appointed me to the USIP board in part to serve as a watchdog against militant Islamic groups. Unfortunately the management of USIP is not listening to my advice. I cannot be associated with the event today which associates USIP with some of the very worst militant Islamic groups." http://www.danielpipes.org/article/1650 (see complete article below)

Both writers pointed out that the CSID, (The Center for the Study of Islam and Democracy) a Saudi funded Wahabbist enterprise, operating under the guise of a think tank, was promoted an Islamist agenda.

Dr.Pipes wrote that:

"...Most of CSID's Muslim personnel are radicals. I brought one such person in particular, Kamran Bokhari, to the attention of USIP's leadership. Mr. Bokhari is a fellow at CSID; as such, he is someone CSID's board of directors deems an expert "with high integrity and a good reputation." As a fellow, Mr. Bokhari may participate in the election of CSID's board of directors. He is, in short, integral to the CSID.

Mr. Bokhari also happens to have served for years as the North American spokesman for Al-Muhajiroun, perhaps the most extreme Islamist group operating in the West. For example, it celebrated the first anniversary of 9/11 with a conference titled," Towering Day in History." It celebrated the second anniversary by hailing "The Magnificent 19." Its Web site currently features a picture of the U.S. Capitol building exploding. (If the site changes, an archived copy is available.)

Nor is Al-Muhajiroun's evil restricted to words and pictures. Its London-based leader, Omar bin Bakri Muhammad, has acknowledged recruiting jihadists to fight in such hotspots as Kashmir, Afghanistan, and Chechnya. At least one Al-Muhajiroun member went to Israel to engage in suicide terrorism. Al-Muhajiroun appears to be connected to one of the 9/11 hijackers, Hani Hanjour.

USIP's indirect association with Al-Muhajiroun has many pernicious consequences. Perhaps the most consequential of these is the legitimacy USIP inadvertently confers on Mr. Bokhari and CSID, permitting radicals to pass themselves off as moderates. http://www.danielpipes.org/article/1659 (complete article below)

MIM: The USIP has now gone from '"inadvertently conferring legitmacy " on radical Islamists to actively aiding and abetting them.

------------------------------------------------

MIM: The peridiousness of having radical Islamists operating with the US goverment seal of approval via the taxpayer funded USIP is compounded by the way the Muslim World Initiative is disseminating disinformation about the Arab Israeli conflict using the USIP for legitimacy.

One example of the propaganda on offer is the study by the brother of PIJ head Fathi Shikaki, who was assassinated by the Mossad in 1995 Khalil Shikaki, whose January 2006 pseudo study pre election study entitled "Palestinian Public Opinion and the Peace Process" misled many in the U.S. government into believing Hamas would not stand a chance to win if allowed to participate in the elections.

Shikaki 'con'cluded that :

• Palestinian public opinion is not an impediment to progress in the peace process; to the contrary, over time the Palestinian public has become more moderate. Palestinian willingness to compromise is greater than it has been at any time since the start of the peace process. This increased willingness to compromise provides policymakers with greater room to maneuver.
• For the first time since the start of the peace process, a majority of Palestinians support a compromise settlement that is acceptable to a majority of Israelis.

The post-Arafat era shows more public optimism about the peace process and more willingness to compromise. Support for violence against Israelis, while still high, is declining.... http://www.usip.org/pubs/specialreports/sr158.html

MIM: According to the Muslim World Initiative/USIP website :

The United States Institute of Peace's Project on Arab- Israeli Futures is a research effort designed to anticipate and assess obstacles and opportunities facing the peace process in the years ahead.

MIM: A picture under the heading "Arab -Israeli Relations' on the MWI site by the same name shows a 'departing Jewish settler' folding up the Israeli flag on the roof of his house , indicating that the 'Arab Israeli future' being propagated by the Muslim World Inititative is one that is Judenrein. The continued existence of Jews is a thorn in the side of the MWI/USIP who postulate that the dismantling of their communities has resulted in new "obstacles" to peace!

As Israel withdraws from the Gaza Strip and the northern West Bank, new opportunities have emerged for reviving the Middle East peace process—as well as new obstacles.Israeli disengagement poses a series of urgent policy questions for the United States and the international community. http://www.usip.org/muslimworld/arab_israeli.html

MIM: Form the 'Arab Israeli Relations' website homepage:

Caption: "A Jewish settler removes the Israeli flag from the roof of his house as he prepares to leave a settlement in the Gaza Strip on Aug. 9, 2005." (Courtesy AP/Wide World)

http://www.usip.org/muslimworld/arab_israeli.html

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MIM: The United States Institute of Peace and the radical Islamists of the Muslim World Initiative are actively endorsing terrorism outside their organisations by hosting forums in the US and abroad with radical Islamist speakers under the guise of "Engaging Muslim Communities in Europe"

The Muslim World Initiative (MWI) began to explore the possibility of engaging European Muslim communities and their youth as an effective strategy to fighting extremism. As part of this effort, the MWI recently co-sponsored a series of conferences and workshops in Europe.

.MIM: A USIP/MWI recent event in the UK was ironically entitled: 'Towards a community based approach to counter terrorism'. In an article on the USIP/MWI website Brandeis professor Jytte Klausen , apparently oblivious to the absurdity gushed about 'an interesting panel' in which 'salafists talked to extremists' to try to dissuade them from terrorism.

A particularly interesting panel was devoted to the discussion of faith-based counter-terrorism. A spokesperson for a salafist mosque described the mosque's efforts to engage in dialogue with the extremist and change their mind.

In the course of the discussions, "good theology against bad theology" emerged as the capsule description of community-based counter-terrorism. Not all participants agreed that the implied understanding of the nature of the threat was correct. http://www.usip.org/muslimworld/projects/muslim_youth/uk_report.html

-------------------------------------------------

MIM: Information from the USIP/Muslim World Intiative website

About the Muslim World Initiative

http://www.usip.org/muslimworld/about.html

Drawing on USIP's unique combination of capabilities for scholarly research, policy analysis, and practical involvement in peacemaking, the Initiative has two overarching objectives:

1. To enhance U.S. engagement with the Muslim world through informed policy guidance and public education efforts focused on the most pressing issues and challenges; and
2. To promote peace and stability within the Muslim world through activities that directly contribute to the prevention, management, and resolution of conflict.

In pursuit of these goals, the Muslim World Initiative places particular emphasis on several cross-cutting themes:

• "Bridging the Divide" — explores and encourages efforts to diminish the sources of mistrust and misunderstanding that harm relations not only between the United States and parts of the Muslim world but also within many communities in the region;
• "Mobilizing the Moderates" — supports activities designed to help give voice to and empower those who advocate cooperation and non-violent solutions to conflict in the Muslim world; and
• "Marginalizing the Militants" — promotes efforts to isolate and reduce the influence of extremists who advocate intolerance and violence.

------------------------------------------------------

What Do Islamists Really Want?
An Insider's Discussion with Islamist Leaders

By Abdeslam Maghraoui
May 2006

Throughout the Muslim world, Islamist parties have emerged as major power brokers when allowed to compete in free elections. Yet their positions on many crucial governance issues remain unknown or ambiguous. Most debates on the potential to moderate and integrate Islamists in the democratic process have focused on Islam's compatibility with democracy or on debates over Islamists' normative commitment to democracy separately from the mechanics of achieving political power.

More from usip.org

Specialists: Political Islam

Publications: Muslim World

Events: Muslim World

Topics: Terrorism

As part of its "mobilizing the moderates" theme, the Muslim World Initiative of USIP organized an off-the-record roundtable discussion on May 5, 2006, on the viability of democratic politics within an Islamic framework. Specifically, the discussion focused on the Islamists' political strategies while in opposition and their commitment to democratic procedures and principles once in power. The meeting brought together the leaders of three moderate Islamist parties and movements from Arab countries as well as U.S. government officials, scholars, and independent policy analysts.

This USIPeace Briefing highlights the central themes and questions that emerged during the discussions. There is a great diversity among moderate "Islamist parties," and their strategies are the products of local power relations. Caution is thus in order in applying these general comments to various Islamist parties.

A Brief Note on Terminology:

For the purposes of this paper:

• Islamic refers to institutions, practices, beliefs, and so on, that have no specific ideological or political connotations. Thus: Islamic architecture, Islamic ceramics, Islamic philosophy, and so on.
• Islamist refers to political parties and movements that seek to legitimate or subvert a political order on the basis of their interpretation of Islamic principles. Though these movements go back to the 1940s and 1950s (in Egypt), the term became more commonly used in the 1980s, after the Khomeinist revolution of 1979.
• An important distinction can be drawn between moderate and radical Islamists. Moderate refers to political parties and movements that use Islamist principles, Islamic law, and/or Islamic referents to participate peacefully in the political process. Radical, extremist, Wahhabists, Salafists, or Jihadists are terms for those who eschew nonviolence in the name of their Islamic beliefs.

The Islamists' Positions

The three Islamist leaders made the following points during the short presentations and responses to questions during the meeting and in substantive discussions before and afterwards. They represent Islamists' views of themselves, or at least their self-representations before a critical, Western audience. In some instances, interviews, articles, and speeches by one or more Islamist panelists were consulted to have a better sense of their positions on key issues.

Rising Confidence in Democratic Participation and Procedures:

• Moderate Islamist parties see themselves as modern, credible, and reformist political actors, not traditional religious preachers with a moral agenda.
• They portray themselves as pragmatic parties that can respond effectively to autocratic regimes, deteriorating social and economic conditions, and increasing extremism.
• They seek power through peaceful means and, in many countries, are confident that they will win if free and fair elections are held.
• As evidence of their political skills and willingness to work within the system, they boast broad and solid social support (including among youth, women, and professionals), vast national networks, good performance in local government, positive relations with entrepreneurs, and willingness to cooperate with secular parties and NGOs.
• They are confident about the prospects for democratic reform and political change despite continuing institutional political constraints and, in some cases, clear repression.
• They value the benefits of democratic participation, including competitive elections, legal opposition politics, and the alternation of power.
• Islamists dismiss the fear that they might monopolize political power or religious authority if they win wide majorities.
• They counter that existing centers of power (civil societies, ruling monarchies, powerful security and military institutions, or traditional religious establishments) prevent such a scenario.

Commitment to Democratic Norms, Compatible with Islam:

• Islamist leaders assert their commitment to democratic principles, including minority rights, religious tolerance, women's equality and participation, cultural diversity, and political pluralism.
• They underline their commitment to popular sovereignty and qualify the meaning and importance of divine sovereignty.
• Their objective is to make Islamic principles more responsive to modern, practical political needs.
• Moderate Islamists insist that their normative visions draw on Islamic principles such as justice, equality, accountability, and limits on the powers of rulers.
• These principles, they argue, are compatible with Western democratic norms, but not necessarily with liberal values that privilege individual freedom over community rights.
• The question of governance in Islam is open and has not been clearly delineated in Islamic texts.
• It is inaccurate, they say, to argue that Islamic political principles are incompatible with democratic norms.
• Some party leaders reject the "Islamist" label. They prefer to describe their party as a "party with an Islamic reference point."
• The example moderate Islamists often use as a model for their case are Europe's Christian democratic parties.

Flexibility on Application of Sharia:

• On the question of applying sharia, or Islamic law, moderate Islamists show some flexibility.
• None of the panelists advocated the traditional application of sharia.
• They all invoke the important role of ijtihad, reinterpretation of sacred texts, to adapt Muslim practices to modern needs.
• They refer to liberal Islamic precedents concerning the positive treatment of religious minorities.
• However, Islamist leaders don't discard sharia or see it as incompatible with modern democratic principles.
• They consider the application of Islamic law in some instances as a social necessity, not a fervent fulfillment of a religious duty.
• They consider religious moral values and Islamic law effective deterrents against social deviance and political decay.

Cautious on Relations With the United States:

• In general, constructive but cautious engagement best describes how moderate Islamists envision their relations with the United States.
• Notwithstanding major disagreements over U.S. foreign policy, moderate Islamists are conscious of the importance of America as a global superpower.
• U.S. support for their integration into the political process is key to their strategy.
• They also cite the role of religion in public life in America as an example of how religion and politics can coexist.
• However, moderate Islamist parties prefer to engage the United States multilaterally and in the framework of international laws and conventions—rather than bilaterally.
• Moderate Islamists don't seem to have any plans for bilateral cooperation on "big issues" such as combating terrorism, promoting democracy, or resolving pivotal conflicts (Iran, Iraq, Israel/Palestine, Sudan).
• Islamists have strong reservations concerning most U.S. policies in the Middle East.

Attitude toward Hamas and Relations with Israel:

• Moderate Islamists support Hamas' right to resist occupation and consider its government democratic and legitimate.
• Though not all moderate Islamists necessarily consider Hamas' electoral victory a triumph for democracy, they highlight the occupation's mitigating circumstances.
• Moderate Islamists therefore see no contradiction between Hamas being in charge of the Palestinian Authority and attacking Israel.
• They argue that Islamist-led governments would fully cooperate with Hamas and will help it shore up international support.
• Moderate Islamists view Israel as a hostile occupying force that oppresses Palestinians. But they embrace a two-state solution.
• They do not foresee playing a moderating role between Israel and Hamas or normalizing relations with Israel in the near future.

Major Concerns

During the meeting, a number of participants raised questions about the Islamist commitment to democracy and noted a number of tensions between what Islamist leaders say and what they actually do or might do if they achieve power. Some participants sent follow-up questions and comments after the meeting. What follows covers the range of issues raised during and after the meeting.

Participation in the Democratic Process is Strategically Motivated:

• Some participants expressed concern that Islamists are willing to participate in the democratic process because it favors them, not because they embrace democratic norms.
• These participants worry that there are no guarantees that Islamists will abide by the rules of the game if they come to power.
• They also fear that Islamists can find religious justifications to exercise absolute power once in office.
• It is not clear, they said, whether moderate Islamists could maintain their popularity and credibility if they participate in a constrained political framework imposed by the regimes.
• Nor is it clear how moderate leaders would deal with more conservative party rank-and-file on key issues such as pre-negotiating a political outcome with governments, building coalitions, and moderating their views on key issues such as the application of Islamic law.

Contradictory Commitments to Democratic Norms:

Among the questions these skeptics had about Islamist parties, a number focused on their apparent inconsistencies regarding democratic norms.

• Some participants wondered whether moderate Islamists are truly committed to democratic norms, including fundamental civil and political liberties, and if so, then what then makes their parties Islamic.
• They questioned how Islamists' verbal commitment to the full range of civil and political rights would play out in the real world.
• They observed that while Islamist leaders qualify the relevance of "divine sovereignty" and emphasize the role of elected rulers, that does not necessarily guarantee that they will respect modern democratic rights. Anti-democratic norms and restrictions can be imposed in the name of a conservative majority that believes ultimate sovereignty rests with God.
• Islamist leaders, they said, are not clear about whom they represent: "The people" as a whole? A moral majority? Or constituencies with the usual social demands and political priorities?
• Some Islamic principles may well be compatible with modern democratic norms, they argued, but the proof of the pudding will be in how Muslims choose to apply them.
• The possibility exists that different, even contradictory, interpretations of Islamic principles can arise and, in the absence of institutionalized religious authority accepted by all, lead to the subversion of democratic norms.
•  

Ambiguities Surrounding Application of Sharia:

• Given that the most important characteristic of legitimate "Islamic government" is implementation of Islamic law, where, asked some participants, do moderate Islamists exactly draw the line?
• Moderate Islamists, they said, fail to address in specific terms what portions of sharia, if any, are "dispensable" and what portions are both binding and adaptable to modern needs.
• If elected Islamists legislated on matters of public morality and modesty (which could cover a wide range of issues including the hijab, freedom of speech, and alcohol consumption), they would be acting both as modern legislators and as religious scholars and jurists.
• This accumulation of religious authority and political power subverts both democratic norms and the separation of powers essential to the functioning of a democracy.

Implications for U.S. Policies

On the basis of these discussions it becomes clear that moderate Islamists need to sort out several tensions and make some hard choices. A key concern, their professed commitment to modernize and democratize Muslim polities within the context of their religious identity, may take some time to resolve. Yet, the Islamists' ultimate objective of ousting ruling autocrats through free and transparent elections is real and cannot be dismissed as a political ploy. This is also, ironically, a major U.S. objective but in the consensus opinion of the participants, the United States has as yet no clear policy on engaging Islamists.

In the final part of the meeting, participants offered their thoughts on how the United States should proceed.

Should the United States Engage with Islamists and Support Their Bid for Democratic Politics?

• It remains unclear whether moderate Islamist parties would respect democratic rules and norms once elected to office. Experiments with Islamists in the democratic process are too rare, recent, or the product of exceptional circumstances to withstand generalization.
• Yet, given the Islamists' popular appeal, efficient organization, and political potential, the United States cannot afford to ignore them.
• The professed U.S. democracy promotion strategy is neither credible nor likely to succeed without the cooperation and participation of Islamists.
• In addition to reinforcing secular NGOs and political parties, the United States should support and train Islamist parties, invite their influential figures to Washington, and expand exchange programs with the next generation Islamist leaders.
• Rather than imposing external political conditions on engaging Islamists, the United States would be in a better strategic position if it appears "neutral" among competing political visions.
• The United States should let local political actors negotiate the incentives, constraint mechanisms, and red lines to ensure a successful and sustainable democratic outcome.
• U.S. democracy programs should support programs to foster internal debates between conservatives and moderates within the Islamist parties; dialogue between Islamists and secular parties and NGOs; and a constructive negotiation framework between governments and Islamist opposition groups.

Should the United States Engage Islamists on Normative and Religious Issues?

• The consensus view among U.S. policymakers now is that the United States cannot and should not pursue policies that involve normative/theological issues.
• Proponents of this view argue that the United States would be violating the separation between state and religion and would get bogged down in "esoteric" discussions with no clear end results.
• Others argue that many U.S. programs (such as the revision of textbooks, the modernization of education, and the empowerment of women) already involve normative issues.
• They contend that relying on procedural mechanisms alone to mitigate the Islamists' monopoly of political power is not enough and actually involves some serious risks.
• Taking Islamists on in the cultural and normative dimensions is especially important because those are the fields in which Islamists have their greatest influence.
• One reason why Islamists are so influential in these domains is that procedural constraints may bar Islamists from changing a country's constitution, civil and criminal laws, or even its civil-military relations; but Islamists can control sensitive cabinets such as education, culture, the media, and social services. These cabinets are not crucial to the immediate survival of authoritarian regimes and thus they might more easily relinquish them. But Islamists can use these portfolios to exert tremendous ideological influence.
• Another concern is that institutional constraints might be used by authoritarian regimes to forestall meaningful democratization. These constraints could de-legitimize moderate Islamist parties, and benefit radical groups who reject the democratic process altogether.
• For these reasons, the consensus view of the participants—regardless of their degree of skepticism toward moderate Islamists—was clear: the best long-term strategy for the United States, if it seeks to bring peaceful democratic change to the Middle East, is to engage Islamists on normative grounds.
• The most effective strategy to engage Islamists on normative democratic issues is to refer to Islam's progressive and humanistic traditions, not to Western liberal democracy.
• ------------------------------------------------------------------------------------------

 

 

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http://www.danielpipes.org/article/1650

Pipes Objects to Fox in the Henhouse

by Kenneth R. Timmerman
Insight Magazine
March 19, 2004

The congressionally funded United States Institute of Peace will host an event today in Washington on reforming Islam, with a guest panelist who has threatened the United States and openly supported terrorist groups, Insight has learned.

Among the guests in this afternoon's panel discussion is Muzammil Siddiqi, who until November 2001 was president of the Islamic Society of North America (ISNA), a leading Wahhabi front organization in the United States. Wahhabism is a radical form of Islam practiced in Saudi Arabia and advocated by al-Qaeda leader Osama bin Laden and his terrorist leaders.

Siddiqi has accompanied visiting Saudi officials from the Muslim World League on fund-raising tours across America, and is listed on its Website as the organization's official representative in the United States. Offices of the Muslim World League in Herndon, Va., were raided by a federal antiterrorism task force in March 2002 because of suspected ties to al-Qaeda.

During an anti-Israel rally outside the White House on Oct. 28, 2000, Siddiqi openly threatened the United States with violence if it continued its support of Israel. "America has to learn ... if you remain on the side of injustice, the wrath of God will come. Please, all Americans. Do you remember that? ... If you continue doing injustice, and tolerate injustice, the wrath of God will come." By "injustice," he meant U.S. support for Israel.

Siddiqi also has called for a wider application of sharia law in the United States, and in a 1995 speech praised suicide bombers. "Those who die on the part of justice are alive, and their place is with the Lord, and they receive the highest position, because this is the highest honor," he was quoted as saying by the Kansas City Star on Jan. 28, 1995.

A Bush appointee to the U.S. Institute of Peace (USIP) says he must distance himself from today's event because it associates the USIP with groups "on the wrong side in the war on terrorism." USIP board member Daniel Pipes tells Insight that, in addition to his objection to Siddiqi, he has warned the USIP about the presence of the U.S. spokesman of al-Muhajiroun, a London-based group that claims to be recruiting jihadis for a worldwide "Mohammed's army" faithful to bin Laden.

Pipes tells Insight: "I believe that President [George W.] Bush appointed me to the USIP board in part to serve as a watchdog against militant Islamic groups. Unfortunately the management of USIP is not listening to my advice. I cannot be associated with the event today which associates USIP with some of the very worst militant Islamic groups."

Kay King, a spokesperson for USIP Chairman Richard Solomon, said USIP was "not aware of the allegations about Siddiqi, and we will look into them." However, she pointed out that Siddiqi "has attended Bush administration events with the president, and was invited to lead a prayer" at the national prayer breakfast following the September 11 attacks.

The March 19 event is cohosted by USIP and the Center for the Study of Islam and Democracy (CSID), a U.S.-based group that was created by board members and former staff of the American Muslim Council (AMC), a radical pro-Saudi group that largely ceased operations after its former chairman, Abdulrahman Alamoudi, was jailed last October on terrorist-related charges.

Pipes raised his concerns with USIP Chairman Chester Crocker and President Richard Solomon over the "extremist nature of CSID itself" starting last November. In addition to board members and an executive director who shifted over to the new group from AMC, Pipes pointed out that CSID fellow Kamran Bokhari has ties to al-Muhajiroun, an al-Qaeda support group. Until last year, Bokhari was the self-acknowledged North American spokesman for al-Muhajiroun.

Insight reported on the group's first anniversary "celebration" of the 9/11 attacks, held at the radical Finsbury mosque in London, where al-Muhajiroun showed off a poster that portrayed a burning World Trade Center under attack and called September 11 "a towering day in history."

At the group's second anniversary 9/11 "celebration," its members distributed a poster with photographs of all 19 hijackers, calling them "the magnificent 19."

CSID "fellows" are not research assistants, but integral members of the leadership of the organization. According to a copy of the CSID bylaws Insight has obtained, CSID fellows are responsible for electing the group's board of directors. All board members must first be fellows.

Bokhari has issued a statement denouncing political violence and al-Qaeda, and referred to himself as a "former Islamist activist." But given his leadership role with al-Muhajiroun, Pipes says, such statements were "deeply insufficient to rehabilitate him ... or make him someone suitable to be associated with USIP."

Pipes first raised concerns over the planned event in November, when the USIP initially had invited Taha Jaber Al-Alwani to speak on a panel to discuss reforming Islam. Al-Alwani was publicly identified in an affidavit by U.S. Customs special agent David Kane, unsealed just weeks earlier, as a director of "Safa Group companies including International Institute of Islamic Thought (IIIT), FIQH council of North America, Graduate School of Islamic & Social Sciences ... and Heritage Education Trust."

The IIIT offices were raided in March 2002 as part of Operation Greenquest, a joint federal antiterrorism task force. IIIT has received money and sponsorship from the government of Saudi Arabia, and according to the affidavit had sponsored Basheer Nafi, "an active directing member of [Palestinian Islamic Jihad] front organizations" in the United States.

Following Pipes' objection, the USIP postponed the initial event and canceled its invitation to Al-Alwani to join the panel discussion, but continued to work with CSID despite Pipes' claims that the group included among its leadership individuals who were on the "wrong side" in the war on terror.

USIP spokesperson Kay King says the institute has "done due diligence" on CSID and found the group to be "moderate" and "responsible."

"We know that CSID has gotten grants form the State Department and from the National Endowment for Democracy," she said. "They are an organization that has been found appropriate by U.S. government agencies."

CSID showcases moderate Muslim thinkers such as professor Abdulaziz Sachedina of the University of Virginia. However, many board members have either led or worked for groups that were targets of a federal antiterrorist task force raid in March 2002.

CSID founding board member Jamal Barzinji headed the "500 Grove Street" charities in Herndon, Va., that were the target of the Greenquest task force. He left the CSID board in April 2003.

Another CSID founding board member, Louay M. Safi , is director of research at IIIT, according to the biography posted on the CSID Website. He is reported previously to have worked at an IIIT offshoot in Malaysia.

The CSID board also includes Muslim leaders who are former or current board members of the American Muslim Council, starting with CSID chairman Ali A. Mazrui. "CSID is part of the militant Islamist lobby," Pipes tells Insight. "It is well-disguised, and has brought in all the Islamist trends, giving them a patent of respectability."

The group's executive director in 2002 was Abdulwahab Alkebsi, a former AMC staff member. Alkebsi also is reported to have worked for the Islamic Institute in Washington, and now runs democracy programs in Iraq for the National Endowment for Democracy that have promoted, among others, the Iraqi Communist Party.

Kenneth R. Timmerman is a senior writer for Insight.

http://www.militantislammonitor.org/article/id/1969

[...] "The Chinese government alone holds more than one trillion dollars in U.S. and other securities, and these could be used to purchase more than five percent of the value of publicly trade U.S. companies.  This should give Americans real pause about Chinese government intentions to diversify its foreign exchange holdings. " 
Dr. Peter Morici: 2006 US Current Account Deficit hits record; Chinese Government could purchase Five Percent of US Stocks
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In strategy shift, China to buy a stake in Blackstone

By Andrew Ross Sorkin and David Barboza

Published: May 20, 2007

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The Chinese government said Sunday that it would acquire a $3 billion stake in the Blackstone Group, the private equity firm, in the country's first effort to diversify its $1.2 trillion in foreign-exchange reserves beyond United States Treasury bills and into commercial enterprise.

The deal, which is set to coincide with Blackstone's $4 billion initial public offering this year, will give China a roughly 8 percent stake in Blackstone, which owns companies that have 375,000 employees and $83 billion in annual sales.

It would also represent a watershed for the booming private equity industry as it tries to gain a foothold in China.

"It's a historic change. It's a paradigm shift in global capital flows," Stephen Schwarzman, a co-founder of Blackstone, said in an interview. He called the Chinese government's decision "huge" and even "surprising" to him.

China will invest in the Blackstone firm itself, not in its funds, which invests in companies. However, the relationship opens the door for China to invest in Blackstone's funds in the future.

China has been grappling with how to invest its foreign reserves more aggressively. In March, China said that it would set up a special investment arm — the State Foreign Exchange Investment Company — to handle a portion of those reserves, which are now held by the central bank, in the hopes of earning a higher return.

The agency is not yet operating, but the Blackstone deal suggests that the Chinese government is eager to put its vast reserves to work outside of China. Still, as Blackstone begins to invest in emerging markets like China, the deal offers the prospect that at least some of the money could find its way back to China. Indeed, Blackstone is planning to open offices in Hong Kong and Beijing this year.

For years, China has invested in foreign currency, particularly United States Treasury bonds, which have earned a safe but modest return. But now, with the American dollar in decline and the Chinese government willing to take on more risk to earn higher returns, the new agency is being modeled, in part, on Temasek Holdings, Singapore's state-owned investment firm, which has invested billions of dollars around the world, particularly in China.

A similar investment agency in China would effectively create the world's largest hedge fund. Some analysts say that the China fund's investment of billions of dollars in the global financial markets could push global asset prices higher, affecting American and European stocks, bonds and interest rates, as well as the value of energy and natural resources in Africa and the Middle East.

The Blackstone Group, which is based in New York, has been moving aggressively in recent months to find investments in China. Blackstone is trying to catch up to the Carlyle Group, which has a large operation in China.

In January, Blackstone hired Anthony Leung, the former Hong Kong financial secretary, to run the group's business in China, Hong Kong and Taiwan. And last month, Reuters reported that Blackstone was seeking to acquire a stake in the Guofeng Group, one of China's largest makers of plastic products.

Under the terms of the Chinese government's investment in Blackstone, it will buy nonvoting shares as part of the firm's initial public offering at 95.5 percent of the public-offering price. It has agreed to keep its stake for at least four years.

China may reduce its ownership after the public offering so that it would hold less than 10 percent of Blackstone's shares. The public offering is expected to value Blackstone at as much as $40 billion.

While the investment may presage further Chinese investment in private equity firms in the future, China has promised not to invest in a competing private equity firm for a year.

Blackstone — which has led multibillion-dollar buyouts of Equity Office Properties, Freescale Semiconductor and Michaels Stores — manages a $15.6 billion buyout fund, the second-largest in the industry. In its prospectus, it reported $2.3 billion in profit in 2006.

http://www.iht.com/articles/2007/05/21/business/21yuan-web.php_


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Dr Peter Morici: 2006 US Current Account Deficit hits record; Chinese Government could purchase Five Percent of US Stocks By Professor Peter Morici, Robert H. Smith School of Business, University of Maryland Mar 14, 2007, 13:22

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Peter Morici is an economist and professor at the Robert H. Smith School of Business at the University of Maryland. He is a recognized expert on international economics, industrial policy and macroeconomics. Prior to joining the university, he served as director of the Office of Economics at the US International Trade Commission.

Today, the US Commerce Department reported the 2006 current account deficit was $856.7 billion, up from $791.5 billion in 2005 and setting a new record.  The deficit was 6.5 percent of GDP.

In the fourth quarter, the current account deficit was $195.8 billion, down from $229.4 billion in the third quarter. The reduction was mostly attributable to lower oil prices during the latter months of 2006, and this situation reversed in the first quarter of 2007.

The current account is the broadest measure of the U.S. trade balance. In addition to trade in goods and services, it includes income received from U.S. investments abroad less payments to foreigners on their investments in the United States.  Those net payments turned negative for the first time in many decades, and confirm that borrowing to finance huge trade deficits have reduced the world’s largest economy to the status of a debtor nation.

To finance the trade deficit, Americans are borrowing and selling assets at a net pace of $856.7 billion a year.  Consequently, in 2007, the United States paid to foreigners more interest, dividends and profits than it received, recording a net deficit on income payments of $7.3 billion.  Valuing the net investment position of the United States is difficult, but this negative flow of payments is the clearest evidence of the debtor status of the United States.

The Chinese government alone holds more than one trillion dollars in U.S. and other securities, and these could be used to purchase more than five percent of the value of publicly trade U.S. companies.  This should give Americans real pause about Chinese government intentions to diversify its foreign exchange holdings.

US Bureau of Economic Analysis

The current account deficit imposes a significant tax on GDP growth by moving workers from export and import-competing industries to other sectors of the economy. This reduces labor productivity, research and development (R&D) spending, and important investments in human capital.

Anatomy of the Haemorrhaging Current Account

In 2006, the United States had a $70.7 billion surplus on trade in services. This was hardly enough to offset the massive $836.0 billion deficit on trade in goods and $7.3 billion deficit on income flows. Also, unilateral transfers contributed $84.1 billion to the overall current account deficit.

In 2006, the deficit on petroleum products was $271.0 billion, up from $229.2 billion in 2005; prices for imported petroleum rose about 23.9 percent from 2005, while the volume of imports rose 19.6 percent.

The American appetite for inexpensive imported consumer goods and cars was a huge factor driving the trade deficit higher. In 2006, the deficit on nonpetroleum goods was $547.0 billion, up from $538.3 billion in 2005.

The deficit on motor vehicle products increased 5.5 percent to $144.7 billion, as Ford and GM continue to push their procurement offshore and cede market share to Japanese and Korean companies offering better made and less expensive to own vehicles.  Even when they assemble automobiles in the United States, Asian automakers import more parts than Ford and GM.

The Wal-Mart effect was broadly apparent. In 2006, the trade deficit with China was $232.7 billion, a new record.  This was up from $201.7 billion in 2005.

This situation is likely to become worse in the months ahead. Crude oil prices are rising again, and an overvalued dollar continues to keep imported cars and consumer goods cheap.  Announced production cutbacks at GM, Ford and Chrysler will result in more imported motor vehicles and parts. Rising gas prices are driving car buyers away from Detroit’s gas guzzlers and into the arms of Asian brands.

The dollar remains at least 40 percent overvalued against the Chinese yuan and other Asian currencies. Although China revalued the yuan from 8.28 to 8.11 in July 2005, and announced it would adjust the currency to a basket of currencies, the yuan continues to track the dollar very closely. Currently it is trading at 7.74

Other Asian governments must conform their currency policies to China, lest they lose competitiveness in U.S. and European markets. To sustain undervalued currencies against the dollar, foreign governments purchased $300.5 billion in U.S. securities in 2007. This created a 14 percent subsidy on their exports to the United States.

Financing the Deficit

The current account deficit must be financed by a capital account surplus, either by foreigners investing in the U.S. economy or loaning Americans money. Some analysts argue that the deficit reflects U.S. economic strength, because foreigners find many promising investments here. The details of U.S. financing belie this argument.

In 2007, U.S. investments abroad were $1045.8 billion, while foreigners invested $1764.9 billion in the United States. Of that latter total, only $183.6 billion, or 10.4 percent, was direct investment in U.S. productive assets. The remaining capital inflows were foreign purchases of Treasury securities, corporate bonds, bank accounts, currency, and other paper assets. Essentially, Americans borrowed $1.6 billion to consume 6.5 percent more than they produced.

Foreign governments loaned Americans $300.5 billion or 2.3 percent of GDP. That well exceeded net household borrowing to finance homes, cars, gasoline, and other consumer goods.  The Chinese and other governments are essentially bankrolling U.S. consumers, who in turn are mortgaging their children’s income.

The cumulative effects of this borrowing are frightening. The total external debt now exceeds $6 trillion. That comes to $20,000 for each American, and at 5 percent interest, $2000 for each working American.

The Chinese government alone holds enough U.S. and other foreign reserves to purchase more than five percent of the shares of all publicly trade U.S. companies, and that figure increases by 20 percent each year.  The U.S. trade deficit is the primary driver behind this phenomenon.

Consequences for Economic Growth

High and rising trade deficits tax economic growth. Specifically, each dollar spent on imports that is not matched by a dollar of exports reduces domestic demand and employment, and shifts workers into activities where productivity is lower.

Productivity is at least 50 percent higher in industries that export and compete with imports, and reducing the trade deficit and moving workers into these industries would increase GDP.

Were the trade deficit cut in half, GDP would increase by nearly $250 billion, or about $2000 for every working American.  Workers’ wages would not be lagging inflation, and ordinary working Americans would more easily find jobs paying higher wages and offering decent benefits.

Manufacturers are particularly hard hit by this subsidized competition. Through recession and recovery, the manufacturing sector has lost 3.2 million jobs since 2000. Following the pattern of past economic recoveries, the manufacturing sector should have regained about 2 million of those jobs, especially given the very strong productivity growth accomplished in durable goods and throughout manufacturing.

Longer-term, persistent U.S. trade deficits are a substantial drag on growth. U.S. import-competing and export industries spend three-times the national average on industrial R&D, and encourage more investments in skills and education than other sectors of the economy. By shifting employment away from trade-competing industries, the trade deficit reduces U.S. investments in new methods and products, and skilled labor.

Cutting the trade deficit in half would boost U.S. GDP growth by one percentage point a year, and the trade deficits of the last two decades have reduced U.S. growth by one percentage point a year.

Lost growth is cumulative. Thanks to the record trade deficits accumulated over the last 10 years, the U.S. economy is about $1.5 trillion smaller.  This comes to about $10000 per worker.

Had the Administration and the Congress acted responsibly to reduce the deficit, American workers would be much better off, tax revenues would be much larger, and the federal deficit could be eliminated without cutting spending.

The damage grows larger each month, as the Bush administration dallies and ignores the corrosive consequences of the trade deficit.

http://www.finfacts.com/irelandbusinessnews/publish/article_10009428.shtml
_____________________________________________________________________________________ All Credit To Business Week

http://www.businessweek.com/bwdaily/dnflash/content/apr2007/db20070405_214446.htm_

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Sunday, April 01, 2007

 

Chinese Paper Chase: NewPage, the CVD regime, and John Snow

http://chinamatters.blogspot.com/2007/04/chinese-paper-chase-newpage-cvd-regime.html

Update:

Another interesting data point, from the February 22 International Herald Tribune:

Meanwhile, the former secretary of the U.S. Treasury, John Snow, said that the United States could not force Beijing to allow faster gains in the yuan, and that dialogue was the best way to achieve appreciation.

"It's in China's own interest to continue to allow the yuan to expand in terms of flexibility," Snow, now chairman of Cerberus Capital Management, which is based in New York, said in an interview in Hong Kong. "I don't think we can force China to do anything."

Interesting, since the countervailing duty determination by the US government--issued in response to a complaint by NewPage, a paper firm controlled by Snow's firm--looks like a long-planned, confrontational measure to compel quicker revaluation of the yuan.

Thank you to China Redux to linking to my post, below, on NewPage, Cerberus, and the China CVD case.

I'd like to take this opportunity to acknowledge ChinaRedux and note its addition to my blogroll. Ben Landy cares about the same issues I do, and discusses them knowledgably and thoughtfully.

He also reads extensively and discriminatingly in the growing universe of high quality Asia blogs, so his posts also provide an excellent overview of what’s being said on topics of interest. His CVD post is a fine example.

I think that China may have been prepared for the risk that the export-driven party might soon be over, and I suspect it has contingency plans beyond fulminating at the Commerce Department’s CVD ruling.

It will be interesting to follow analysis in the media and on blogs as to how China responds to the ever-more-apparent threat of American protectionism, and this attack on one of the keystones of China’s success, its undervalued currency.

Also, thanks to commenter Will for the tip about John Snow’s recent visit to China.

I had blogged that Snow's investment group, Cerberus, holds the controlling interest in NewPage, the paper company whose complaint that China was subsidizing its competitors led to the whole CVD brouhaha.

Following up, I came upon a profile, Cerberus set to help China, India take flight-Snow, by Alison Tudor, Reuter’s impressively-titled Asia Private Equity Correspondent.

It was dated February 22, 2007, when NewPage was already hip-deep in the CVD complaint.

Mr. Snow unburdened himself of his strategic thinking:

Cerberus Capital Management LP, which has a mandate to invest across all asset classes and sectors globally, believes in China it could add significant value at state-owned enterprises.
Cerberus already has a presence in Japan and Taiwan, and is in the process of setting up an office in Hong Kong. Longer-term it may set up offices in Beijing and potentially India.

“Over time we hope to have a good footprint in India and China, probably China first,” Snow said in an interview with Reuters.

Good luck with that, John.

So I’ve been doing a little thinking about my previous assumption that the Bush administration was coordinating with Snow’s firm when it chose Cerberus affiliate NewPage as the test case for pushing the CVD ruling.

Maybe it was more like assisted suicide, with the Bush administration happily indulging John Snow’s desire to rush to the head of the line and catch spears in his chest for the sake of the CVD determination.

I wonder how incensing Beijing with a highly political and economically incendiary attack on China's export regime fits in with Cerberus’s business strategy.

Per Reuters, Cerberus wishes to stake its claim in one the great (potential) gold rushes of the early 21st century: M&A services to Chinese state-owned enterprises.

Think of those hundreds of billions in forex reserves, the inexperienced managers of SOEs longing to spread their wings overseas, the overvalued properties, the bidding wars, the fees!

Reading between the lines, I think the Cerberus pitch is that the sun is setting on China’s export-driven economic boom. Domestic capital and international political pressures dictate that China can no longer hide behind the wall of its undervalued currency.

So far, so good.

In the new age, it's a reasonable assumption that Chinese capital must flow overseas (and into the pockets of investment bankers).

After all, the Chinese government is tired of the headache of dealing with its mounting forex surplus.

It would like to see some of those billions allocated rationally by market forces and diverted to productive investments overseas, so that China’s economy is diversified and less vulnerable to economic and political risk.

Snow argues that his firm can play a special role:

Snow’s Washington savvy and connections will help its clients circumvent U.S. protectionism and close those rich U.S. deals:

China's companies are keen to spread their wings abroad but several big deals, such as Chinese oil major CNOOC Ltd.'s acquisition of U.S. energy producer Unocal, have run aground during the U.S. approval process.
...

Snow, an experienced politician and well-known name in Asian political circles, hopes to help smooth the way for Cerberus' co-investors.

“In the case of investments in the United States, we would bring a real understanding and sensitivity to the process. We know the rules of that game that could help co-investors avoid legal barriers,” said Snow, who plans to visit Asia three or four times a year.

Not so fast.

Here’s a trip down memory lane on the Unocal bid courtesy of the July 16, 2005 Washington Post:

Chevron's already formidable lobbying staff has been bolstered by a who's who of experts and Washington heavyweights: Wayne L. Berman, a top fundraiser for President Bush whose wife is the White House social secretary; Drew Maloney, a former legislative director of House Majority Leader Tom DeLay (R-Tex.); Kenneth J. Kies, a prominent tax lobbyist; former commerce secretary Mickey Kantor; Democratic trade experts Claude G.B. Fontheim and Kenneth I. Levinson; and David M. Marchick, a senior trade official in the Clinton administration who specializes in national security reviews by the high-level Committee on Foreign Investment in the United States.

All of the action is coordinated daily during an 8:30 a.m. conference call led by Lisa Barry, Chevron's vice president of government affairs.

"They're fielding a full team, and I think they're making all the right moves," said Todd M. Malan, executive director of the Organization for International Investment, which lobbies on behalf of foreign companies.

Unfortunately for Mr. Snow, the lesson of the Unocal deal is that both sides outfitted themselves with the best investment bankers, lobbyists, and lawyers available, and the competitor with the best gang--including a member of the Bush inner circle married to the White House social secretary--wins.

And Cerberus doesn’t look like the A-Team.

Aside from Snow himself—widely derided as an ineffectual, out of the loop empty suit as Treasury Secretary—what is Cerberus’s secret weapon?

Dan Quayle.

Cerberus also boasts former U.S. Vice President Dan Quayle as chairman of Cerberus Global Investments, a division of Cerberus Capital Management.

In any clash of the titans in the White House or on Capitol Hill, John Snow is probably going to get his and his clients’ lunches eaten.

In this context, the judgment of NewPage’s management—largely Cerberus appointees—in pushing the CVD suit is open to question.

Certainly, Cerberus wants to demonstrate to its Chinese clients an intimate knowledge of the regulatory, legal, and political pitfalls that await them in the U.S. market.

But is launching the CVD suit that has ignited Chinese anxiety and rage over its export driven business model really the way to do it?

I wouldn’t staff up that Beijing office too hastily, John.

Labels: Cerberus, China, CVD, John Snow, NewPage

[...] "During a recent interview with The New York Times, Abssi displayed his makeshift training facility and his strident message that America needed to be punished for its presence in the Islamic world. "The only way to achieve our rights is by force," he said. "This is the way America deals with us. So when the Americans feel that their lives and their economy are threatened, they will know that they should leave." Internatioanl Herald Tribune   (see article below)

International terrorism

The Scientific And Rationalist Case For Life After Death - An Interview with Michael Roll (1994) [Posted: May 7, 2007]

Michael Roll: The Scientific And Rationalist Case For Life After Death - Part 1 of 4 (6:56) Related material on this site:   Uncomfortable Historical Facts That we are Never Taught at School in the Theocracy of Great Britain - Michael Roll The Chemist Sir William Crookes Proved Survival With Repeatable Experiments Under Laboratory Conditions - by Michael Roll A First-Hand Account of Materialisation Mediumship - Michael Roll describes an experiment he attended with the materialisation medium Rita Goold. This account was written in 1983, but was not accepted for publication until 1992. The Scientific Proof of Life After Death - Pamphlet by Michael Roll Updating Newton - by Ronald Pearson Letter from Abdus Salam to Michael Roll (February 19, 1987) Related material on other sites: YouTube - The Scientific and Rationalist Case for Life After Death - Part 1 (6:56) YouTube - The Scientific and Rationalist Case for Life After Death - Part 2 (6:55) YouTube - The Scientific and Rationalist Case for Life After Death - Part 3 (6:55) YouTube - The Scientific and Rationalist Case for Life After Death - Part 4 (6:55) http://www.cfpf.org.uk/

Censored in Great Britain THE SCIENTIFIC PROOF OF SURVIVAL AFTER DEATH By Michael Roll Here is an extraordinary paradox. Only those who can be relied upon to dismiss the findings and conclusions of our pioneers of radio and television are allowed on radio and television! Our scientists who support the British pioneers of radio and television - Sir William Crookes, Sir Oliver Lodge and John Logie Baird - have been blocked from speaking on the radio or appearing on television. Only a handful of local radio presenters have defied this official and unofficial censorship, notably James Whale. There are two expert opinions as to what so-called paranormal phenomena are, but in this "free" country the British people are only allowed access to the explanation that is politically correct, the first version that is listed below, because it is no danger to the powerful religious and scientific establishments: 1. Paranormal Phenomena Do Not Exist The mind and the brain are the same. This is the official teaching across all scientific disciplines. The parapsychologist Dr. Susan Blackmore has been given complete freedom of every radio and television programme that is meant to be examining the subject. This is because she is the establishment mouthpiece and can be relied upon to never mention what is revealed in this pamphlet. Dr. Blackmore protects the scientific establishment's adopted stance, which only gives a materialistic model of the universe. Professor J. Wheeler, a top physicist, stated in 1994 that acceptance of survival or paranormal phenomena would destroy the basis of science as taught in our universities. 2. Paranormal Phenomena Do Exist The mind and the brain are separate. This pamphlet carries on where Crookes, Lodge and Logie Baird left off. This is what we are never allowed to hear on radio and television or read about in scientific magazines and large circulation papers. "The suppression of uncomfortable ideas may be common in religion and politics, but it is not the path to knowledge, it has no place in the endeavour of science." Carl Sagan. "Cosmos" 1980 A great moment in television history was featured in Carl Sagan's outstanding thirteen-part series on astronomy called "Cosmos". He was pictured in New York library surrounded by millions of books. He pointed to a tiny section and said: "It is only possible in one person's lifetime to read this many books." He then turned to the camera and made the following profound statement: "The trick is to read the right books." The books discussed in this pamphlet are the ones that the religious and pseudo-scientific establishments are praying with all their might that the people never find out about. "I completely agree with Michael Roll's arguments about the reality of paranormal phenomena and the existence of a normally unseen world... Quantum Physics: the presence of a wave nature in subatomic particles. The vital difference between a wave and a solid particle is the wave properties of superposition and modulation. Put simply, these properties allow waves of different frequencies to occupy the same space without direct interaction. Therefore it is quite possible for parallel universes to exist separated by a difference in some fundamental wave characteristic. This theory springs directly from wave mechanics which unfortunately was not available to the Victorian researchers when the greatest breakthroughs with mediumship were made." Michael Scott BSc. Graduate in Astrophysics, Edinburgh University WHAT IS MEANT BY SCIENTIFIC PROOF? This must consist of repeatable experiments backed up with a theory that has a mathematical base. A good example is proving that the world is round and not flat. The Greek scientist Pythagoras was the first to put forward the idea that the world was round. This was 2,600 years ago. However, it was 300 years later that another Greek scientist - Eratosthenes - came up with the mathematical theory for a round earth. This lacked the scientific impact it should have had because the experiment had not taken place. This came much later when Magellan's crew sailed round the world in 1522. The experiment together with the mathematical theory completely, destroyed the medieval obscurants - the Flat Earth religious fanatics. Proving survival after death is exactly the same, but not quite as easy, because here we are dealing with phenomena that are beyond the range of our five physical senses. In order to detect this type of phenomena we have to work with a medium - a machine that can do the job. It was the invention of the achromatic microscope in 1830 by Joseph Jackson Lister that enabled his son to write his paper on antiseptic surgery. From this moment on we have had the proof that reality also exists in the invisible. Radio and television sets are also detecting normally invisible phenomena. They are mediums sorting out signals at different frequencies. This is the reason why we are forced to work with a human medium in order to prove survival after death. No machine invented so far is as sophisticated as the human mind and brain. However we have to be extra careful when carrying out experiments using people. There can be no room for error where lives are concerned. THE EXPERIMENTAL PROOF OF SURVIVAL AFTER DEATH We have had the experimental proof of survival after death ever since Sir William Crookes published the results of his experiments in the leading scientific journal of his day - The Quarterly Journal of Science - in 1874. These were repeatable experiments under laboratory conditions. International teams of scientists then repeated the experiments and obtained the same results. People who had once lived on earth came back and proved to these scientific teams that they had conquered death and were still very much alive. This is what Professor Charles Richet, the French Nobel Laureate for medical science, said about the experiments: "There is ample proof that experimental materialisations should take definite rank as a scientific fact." The purpose of this pamphlet is only to bring to peoples' attention these exciting discoveries in subatomic physics. My job is easy, all I have to do is point to the books that have been published, but suppressed. The main reason why this incredible scientific discovery did not cause a revolution at the beginning of this century is because these experiments lacked the backing of any detailed mathematical theory. This is what Sir Oliver Lodge said in 1929: "We have to be guided by the facts; and if the facts seem incredible as the they do - we have first of all to assure ourselves that they are facts, and then conclude that there is a department of knowledge to which we have as yet not got the key." At the end of the century we now have the key, the missing mathematical theory to back up these revolutionary, scientific experiments. References Lodge, Sir Oliver "Phantom Walls" 1929 (Hodder & Stoughton) Medhurst, Dr. R.G. "Crookes and the Spirit World" 1972 (Souvenir) Crookes, Sir William "Experimental Investigation of a New Force" Article in "Quarterly Journal of Science" July 1, 1871 (Early experiments) Richet, Professor Charles "Thirty Years of Psychical Research" 1923 (W. Collins & Sons). The French scientific team. von Schrenck Notzing, Baron "Phenomena of Materialisations" 1923 (Kegan Paul. Trench. Trubner). The German scientific team. Hamilton, Dr. T. Glen "Intention and Survival" 1942. (Regency Press) The Canadian scientific team. Warrick, F. W. "Experiments in Psychics" 1939 (Rider & Co. London) THE ETHERIC WORLD MUST HAVE AN ASTRONOMICAL LOCALITY As Sir Oliver Lodge and Sir William Crookes were pioneers of radio and television, they were able to put forward a rational explanation to account for the seemingly "supernatural" phenomena appearing at their experiments. They said that this etheric world is the same place as our radio and television signals, but at a much higher frequency. Recent discoveries in quantum mechanics - the study of the building blocks within the atom - completely vindicate what these great physicists said at the beginning of the century. They were adamant that we all survive the death of our physical bodies. The experiments proved that we must possess two bodies - one finite body containing the brain that dies, and another infinite body, containing the mind that separates when our short stay on earth is over. Lodge said the people from the "next world" who are appearing at the experiments must possess bodies that are made of the same invisible matter as our radio and television signals. He called it an etheric substance. Few will disagree that the discovery of this etheric substance is the most important scientific breakthrough in history. I must admit to jumping the gun and getting overexcited when I saw a report in the "Sunday Times" on 13th December 1981. It said that physicists could have been wrong for forty years about the make-up of the universe. They were saying that nine tenths of the universe is missing. When we look through a telescope at a galaxy we are only seeing one tenth of the mass. The motion of distant galaxies and the stars in them can only be accounted for under the laws of gravity if there is far more mass associated with each galaxy than there is in the visible stars that comprise it. One theory for this missing mass was centred around a ghostlike subatomic particle called the neutrino that was discovered in 1956. The report said a neutrino would stand a good chance of penetrating a thickness of lead stretching to the nearest star without hitting anything. This really caught my imagination. Arthur Koestler showed in his book "The Roots of Coincidence" that science had discovered something in the building blocks of nature that started to give a rational explanation accounting for the millions of reports from people who say they saw a "ghost" walk through a solid wall. However, my astrophysicist pals Mike Scott and Sam Nicholls, although very supportive of the survival theory, did not share my enthusiasm that the neutrino was the missing piece needed to make up the etheric universe. References Lodge, Sir Oliver "Ether and Reality" 1925 (Hodder & Stoughton) Koestler, Arthur "The Roots of Coincidence" 1972 (Hutchinson) RONALD PEARSON BSc DISCOVERS THE UNSEEN AND NORMALLY UNSENSED UNIVERSE "It was Einstein's materialistic Theory of Relativity that destroyed Sir Oliver Lodge's Theory of the Ether." Sam Nicholls MSc With the benefit of hindsight we now know that a scientific disaster took place when Sir Isaac Newton's model of the universe was discarded and replaced by Einstein's Theory of Relativity. Einstein said on his 70th birthday: "Now you think I am looking at my life's work with calm satisfaction. But there is not a single concept of which I am convinced that it will stand firm. I am not sure if I was on the right track after all." If only our contemporary physicists had shared Einstein's scepticism then we would not have wasted so much time and money trying to match up Niels Bohr's quantum mechanics with relativity. Even the Einstein supporter Professor Stephen Hawking from Cambridge University admits that they are incompatible. Apart from in Russia and a few "heretics" in the West, the whole of orthodox science is locked into a largely false and hopelessly outdated scientific theory. We are being subjected to one extraordinary theory after another, ranging from us being able to go back in time and murder our grandparents and then to somehow be born in another universe, to the questionable Big Bang theory that says every galaxy in the universe started from the size of a pin head at a single point in time! This is the sort of scenario we end up with if we start our calculations from a false base. Only those of us who are outside of the university sausage machine are in a position to challenge orthodox scientific thinking. The physics students are powerless. They would not get their degrees if they told the truth. They know what happened to one of our leading scientists who had the courage to say Einstein's Theory of Relativity is incorrect. Dr. Louis Essen D.Sc. FRS, OBE, is the inventor of the atomic clock. For trying to bring common sense back into physics he was told further such activity would place the tenure of his post in jeopardy. Into this scientific vacuum has stepped a retired university lecturer with a background in engineering, Ronald Pearson from Bath. Thankfully, Mr. Pearson no longer has to watch out for peer pressure in order to keep his university appointment. However, he is still at the mercy of the peer-referee system. This is just a euphemism for censorship - keeping the old-boy network intact. Before any scientific theory can see the light of day it has to run the gauntlet of politically correct scientists who are worshipping at the shrine of Einstein's Theory of Relativity. This way no constructive criticism ever comes to the attention of students or the public in quality scientific magazines, the press or on radio and television. Engineers do not have the freedom to indulge in any scientific flights of fancy, otherwise all their structures will come tumbling down and their machines will blow up or crash. These practical men and women act as a sort of scientific brake. This is why many of the world's greatest scientists have come from the ranks of engineers. Ronald Pearson has discovered Sir Oliver Lodge's etheric substance and outside of Russia hardly anybody knows about it! He has completely discarded Einstein's outdated Theory of Relativity and just made a couple of additions to Sir Isaac Newton's physical laws. They now match up with quantum mechanics and provide a totally satisfactory solution for quantum gravitation. Mr. Pearson attended the Sir Isaac Newton Conference in 1991, which was held in St. Petersburg, Russia. His scientific paper has been well received and published. This outstanding British scientist is recognised in Russia, but has not even been reported in his own country. He has been peer-refereed out of the game. As a rugby player this makes me very angry because I was brought up with great respect for the good word of referee. It is obvious that what Mr. Pearson has discovered is much too close to the truth for comfort, because if his work was a load of rubbish it would be brought out in the open and exposed. This great scientific breakthrough actually started in 1933 when Pauli predicted that there may well be particles within the atom other than the proton, electron and the recently discovered neutron that would revolutionise scientific thinking. We have now discovered over 200 subatomic particles making up our physical universe, coming under the general heading of quarks and leptons. In order to discover the etheric world Mr. Pearson has taken a step further and pointed out that everything we have discovered so far within the atom is being produced from smaller primary particles at a sub-quantum level. His mathematically based theory proves that when primaries of positive and negative energy collide they breed! This yields an exciting new mechanism for the creation of an expanding universe. This is similar to what we are witnessing in nature all around us. An equation we can all immediately understand. Male + Female = New Individuals. It is never a bad rule of thumb to look around at nature's wonders when we are trying to find the answers to cosmic mysteries. When we consider that even a solid lump of granite consists of mostly empty space and even the building blocks of the "solid" bits protons, neutrons and electrons cannot be seen even under the most powerful microscopes. Therefore, it is no longer so fantastic to accept the seemingly crazy idea that the life force that drives our physical body on earth can continue when it packs in ("gives up the ghost"). For example, on a television interview just prior to his death in 1988, Professor Richard P. Feynman, a Nobel Laureate for Physics, made the following statement. "If your theories and mathematics do not match the experiment, then they are wrong." Einstein's Theory of Relativity cannot match the experiment where people who once lived on earth come back and prove they are still alive, because this theory is incompatible with even the very existence of an ether. Ronald Pearson's Theory of the Ether most certainly does. It shows the ether having a complex structure, intelligence and conscious, to be the core ingredient. The great strength of the powerful materialists who control orthodox scientific thinking is that they are banking on the fact that most people are not making an effort to understand even basic subatomic physics. Even a cursory glance at the subject shows that the physical universe is being produced from the invisible - the etheric universe. Please spike the guns of the "when-you're-dead,-you're-dead" merchants. Read Professor Richard Feynman's layman's guide to subatomic physics obtainable from bookshops and the library - QED. Once people have read the physicists' and rationalists' case explaining so-called paranormal phenomena they automatically become immune from falling for any supernatural absurdities. Never again will the masses fall under the spell of priestcraft. Never again will people be fooled by pseudo-scientists who are guilty of suppressing uncomfortable discoveries in physics solely to keep their power structures intact. References Pearson, R.D. "Intelligence Behind The Universe" This shows how enlightened physics can explain the so-called paranormal and solve the most intractable problems of cosmology. Pearson, R.D. "Origin of Mind". This is Mr. Pearson's lecture showing that our minds are immortal. Pearson's thesis now published in the U.S.A. by the Center for Frontier Sciences - Temple University. Philadelphia. He is still censored in his own country up to March, 1998. Pearson, R.D. "Key To Consciousness: Quantum - Gravitation". You can order the above publications by writing to Michael Roll. Feynman, Richard P. "QED". 1985 (Princeton University press) Essen, Dr. Louis D.Sc. FRS. OBE. "Relativity - Joke or Swindle?" (Electronics & Wireless World). This criticism of Einstein's Theory of Relativity by the inventor of the atomic clock is censored in all mainstream scientific publications. It was Rutherford who thought Einstein's Theory of Relativity was a joke! "Quarks and Leptons: The New Elementary Particles?" Proceedings of The Royal Society of London. 8th April, 1986.  THE SCIENTIFIC PROOF OF SURVIVAL AFTER DEATH - Part 2 of 4  THE SCIENTIFIC PROOF OF SURVIVAL AFTER DEATH - Part 3 of 4  THE SCIENTIFIC PROOF OF SURVIVAL AFTER DEATH - Part 4 of 4 Download the full pamphlet in PDF format (ca. 240 KB) (PDF - What's that?) Display this page with a printer-friendly layout http://www.cfpf.org.uk/articles/background/scientificproof/scientificproof1.html

All Credit Given To www.rense.com, where this information was originally found.

Total CalPERS Fund
Market Value

Reflects market value, as of market close on 05/16/2007.

California Public Employees' Retirement System © Copyright 2007                                               CalPERS 


Fund Name                                                                               2005 Fees & Costs

Yucaipa American Alliance Fund I, L.P.                                                    356,909.00

Yucaipa American Special Situations Fund I, L.P.                                 1,432,768.37

Yucaipa Corporate Initiatives Fund I, L.P.                                           2,334,295.11

4. 2005 Management Fees and Expenses

(File Type: PDF, File Size: 23,730 bytes, Date: 10/03/2006)

... 1,115,737.88 Ares Corporate Opportunities Fund, L. P. 1,110,666.80 ... Carlyle/Riverstone Global Energy and Power Fund II, L. P. 1,354,503.00 Central Valley Fund 210,004.00 Clearstone Venture ...

http://www.calpers.ca.gov/index.jsp?bc=/utilities/search/search.xml_____________________________________________________________________________________ ____________________________________________________________________________________

Bill Clinton has made corporate reform one of his top causes since leaving the White House. He calls for more "socially responsible" investing, better protection of workers and greater diversity in corporate management. At the same time, he condemns cronyism, excessive pay for top management and an alleged emphasis on short-term profits at the expense of workers.

Sen. Hillary Rodham Clinton — a member of the Senate Health, Education, Labor & Pensions Committee — has bashed corporations for their failure to live up to their pension obligations.

Yet, as the senior adviser to two investment funds managing public pension funds, Bill Clinton has himself promoted an investment fund that promises to put money into "lower-income urban and rural communities" — but instead devotes its cash to Al Gore's upstart cable channel and his wife's financial supporters.

At first glance, it seemed the perfect fit: Bill Clinton, corporate reformer, signing on as a senior adviser (and "active adviser," according to a company press release) to the Yucaipa Corporate Initiatives Fund and the Yucaipa American Fund. Both get all their cash from pension funds from public-school teachers and government workers in California and New York state.

CALPERS, the huge California public-employee retirement fund, has agreed to commit $500 million to Yucaipa, and the California State Teachers Retirement System (CALSTRS) another $150 million. Millions more are to come from the New York State Common Retirement Fund.

Clinton's job, when he joined Yucaipa in April 2002, wasn't just to help make the rich richer: These were to be "investment funds that specialize in lower-income urban and rural communities," as The New York Times reported. Yucaipa managing partner Carlton Jenkins told Black Enterprise magazine that the funds were seeking out "urban-based minority or female-owned businesses."

And Clinton's role in the fund, Yucaipa head Ron Burkle made clear, would not be passive. "He's invaluable," said Burkle, explaining that Clinton would help raise money and offer investment advice to the funds.

But a venture that was supposed to help minority businesses and secure the future of pensioners in two of America's biggest states seems to have done anything but.

The Yucaipa Corporate Initiatives Fund has already poured millions into Al Gore's new cable channel, Current Television. Gore's venture is headquartered in a tony neighborhood of San Francisco, which certainly doesn't seem to fit the definition of a "lower-income urban" community. Nor is it minority-owned — indeed, all the major investors are white males. (Indeed, by a who's who of major Democratic Party money people — including Joel Hyatt, former Democratic National Committee finance chairman, Rob Glaser of Realnetworks and Bill Joy of Sun Microsystems.)

Yucaipa told the San Francisco Weekly that Gore's enterprise "has a strong commitment to increase the representation of women and people of color." But the upper management of the network is completely white.

Indeed, one of the few signif icant minority-owned busi nesses that the funds have invested in is Sean John, the clothing enterprise run by that struggling representative of the "lower-income urban community," rap mogul Sean "Puffy" Combs. (A contributor to Hillary Clinton's campaigns with the potential of raising enormous sums for Democrats, Combs is likely to play a prominent role in supporting a Hillary run for the White House in '08.)

The funds' real emphasis, in short, seems to be Democratic cronyism. Another example: The Yucaipa Corporate Initiatives Fund recently backed up a bid by Diversified Investment Management Group to take over Piccadilly Restaurants. DIMG is described by Fashion Week Daily "as a front for Ron Burkle," close friend and financial supporter of Bill and Hillary Clinton. He's also the chairman of Yucaipa.

Some of the pension money committed to the Yucaipa funds arrived with curious timing. Carl McCall, then the comptroller of New York and thus the sole trustee of the New York State Common Retirement Fund, began the ball rolling with the Yucaipa Corporate Initiatives Fund just as Sen. Hillary Clinton surprised many Democrats everywhere by endorsing his bid for governor — at a time when his chief opponent in the primary was Andrew Cuomo, who had served President Bill Clinton loyally as secretary of Housing and Urban Development.

The hundreds of millions flowing from California retirement funds come courtesy of California Treasurer Phil Angelides, a longtime Clinton political ally. Now running for governor, his bio mentions his important role (as state California Democratic Party chairman) in electing Bill Clinton to the presidency. The banner photo across his Web site features him standing side-by-side with the ex-president.

Yet, while all the players in the Yucaipa funds are Democrats, they seem a bit confused about their social mission.

When Clinton joined up, The Yucaipa American Fund proudly announced that its purpose was to invest in "industries and companies that maintain strong corporate governance practices and are sensitive to the interests of their employees."

Tell that to the employees of Aloha Airlines. The fund is backing a $100 million deal to take over the airline — but it has attached some very tight strings: It's making the deal contingent upon terminating the pilots' pension plan and contract. Yet the federal Pension Benefit Guaranty Corp. says the pension plan is not the problem; the airline can readily afford it. Pilots responded with a strike. (Just to round things out, the two major shareholders in the airline, Hawaii's Ching and Ing families, give overwhelmingly to Democrats.)

Meanwhile, the workers whose pensions have been invested in Yucaipa are getting a terrible deal. According to CALSTARS, California teachers have already committed $61.9 million of the $150 million that they promised Yucaipa. As of last March 31, three years after the venture started, they'd seen a grand total of $837 come back to them. Overall, the rate of return since the funds launched have been a loss of 12.1 percent.

CALPERS has not done much better. After pouring more than $116 million into various Yucaipa ventures since 2002, it's seen a return of $55,963.

At the same time, Yucaipa is also collecting hefty fees for managing the pension funds' investments — more than $3 million a year from CALPERS, and $3.5 million a year from the New York Common Retirement Fund. How much of this ends up in Bill Clinton's pocket is anybody's guess. He's not disclosing his fees. And why is Sen. Hillary Clinton, who appears to be so concerned about the state of our pension systems, silent about this?

Hypocrisy is not confined to one party or the other. But the coverage of it is partisan. The national media seem very interested in what Sen. Bill Frist might have done with money from his private trust. Why are they ignoring what Bill Clinton and Yucaipa are doing with hundreds of millions in pension money?

http://www.frontpagemag.com/Articles/Printable.asp?ID=21092_


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Matt Ridenour, Where did you get the information about Current TV being funded by the California state worker's pension. Stupid California pension funds. First, Enron and now this... --DKG DKG • 08/14/05 04:25pm

From www.sfweekly.com/issues /2004-07-28/feature_1.h tml "Ownership percentages of INdTV have not been disclosed. An SEC filing lists Gore, Hyatt, and trusts set up for Hyatt's sons, Jared, 20, and Zachary, 17, as "beneficial owners," indicating that they are substantial stakeholders in the venture. But it is INdTV's other two significant owners -- the private equity funds Yucaipa Corporate Initiatives and Blum Strategic Partners, with their connections to CalPERS -- that are likely to raise eyebrows among those suspicious of the venture as a liberal antidote to right-wing media. CalPERS, the nation's largest pension fund, has long cultivated a reputation as one of the good cops of the securities business, flagging corporate malfeasance and yanking investments from entire countries in the name of financial transparency. But critics have also accused its powerful 13-member board, which is dominated by organized labor and the state Democratic Party apparatus, of engaging in political cronyism that mocks the good governance principles CalPERS ostensibly promotes. One such criticism -- that the handful of politicians who by law sit on the CalPERS board routinely accept campaign money from entities in which CalPERS invests -- is clearly applicable in the case of the Burkle fund that helped stake INdTV. In 2001 the CalPERS board voted to invest $200 million in Yucaipa Corporate Initiatives, part of an overall $560 million commitment to one or another of the funds managed by Yucaipa Companies. (CalPERS committed $50 million to the Blum fund that invested in INdTV, which is managed by Blum Capital Partners, the firm headed by Feinstein's husband.)" INdTV Holdings Ltd is the owner of Current, just to be clear. Not quite the same as Enron as no one is stealing anything and if Current is successful CalPERS will benfit, but still... Matt Ridenour • 08/14/05 06:06pm

"Current" is Crap. Thanks to Al Gore for cementing his image as a far-Left Liberal- exactly what moderate Liberals need nowadays. Thanks to Al Gore for taking an unbiased news channel (Newsworld International) with great international coverage and giving us MTV. Seriously, this channel is putred. Alex • 08/17/05 02:48pm

 

http://www.rushkoff.com/2005/08/current-tv.php_________________________________________________________________________________

 Current TV is a global media company with distribution on satellite and cable into about 50M homes. It is privately held.  http://www.current.tv/community/thread/26084860.htm __________________________

Al Gore brings Current TV to the UK and Ireland

http://citizenmediawatch.com/index.php/category/tv/
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**

Google Loses Its Current TV Domain In some cases, adding interoperability between two Google programs is not the best idea because the company doesn’t own some ...

Because Google already owns products and services in multiple software categories, the company is continuously trying to create new ideas and projects meant to improve our internet experience and to make our computers work much easier. One of the most efficient ideas promoted by Google’s employees is that the company can improve the features of a certain product by creating interoperability or compatibility with other solutions also produced by the search giant that will add new tools to the primary service. This strategy was also implemented in many cases such as Google Talk – Gmail, Gmail – Docs & Spreadsheets and many other solutions. In some cases, adding interoperability between two Google programs is not the best idea because the company doesn’t own some utilities that can improve certain solutions so its employees decided that it’s better to make partnership with other software developers that can provide powerful features for Google’s tools. Some time ago, the company announced that it is looking for an agreement that will help Google create its own internet television with programs selected by the users and other useful utilities that allow clients to watch videos on the internet. At that time, Google said Current TV is the perfect company for its needs, making a partnership that created Google TV that was meant to be hosted on the Current domain. Although it wasn’t as popular as other Google products, Google TV was unavailable today, its website address redirecting you to a page that contains only domain adverts. It seems like the company fixed the issue but this is not the first problem with a Google domain. Recently, multiple internet users reported that Google Germany domain was not available from specific locations in the world, users being redirected to a domain for sale page. Amanda, a user that commented the article posted on Googlified, sustained that she is an employee for Current and explained the issue: “Hello! I happen to work for Current. It’s a long story, but the registrar that owns our domain allowed it to expire without contacting us. We’ve set things right with them, and within the next 24 hours everything should be resolved and working fine.” Source: By Bogdan Popa, from news.softpedia.com

Wednesday, January 31, 2007 http://domainsmagazine.com/Domains_18/Domain_6038.shtml

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CalPERS, the largest U.S. public pension fund, said it plans to vote against the re-election of a KB Home director who headed the company's compensation committee while stock-option grants were backdated.

Ray R. Irani, chief executive of Occidental Petroleum, is seeking re-election at today's annual meeting, the California Public Employees' Retirement System said Wednesday in a statement on its Web site. Occidental spokesman Richard Kline said Irani wasn't available to comment.

Federal prosecutors are investigating stock-option practices at KB Home, the No.5 U.S. home builder. Former CEO Bruce Karatz resigned in November and ex-human resources chief Gary Ray was fired the same day after KB Home said they used "hindsight" to ensure favorable exercise prices. The stock is down 18 percent this year.

"Chairmen of executive compensation committees have the highest level of responsibility and duty to ensure that compensation policies are above board," CalPERS Chief Investment Officer Russell Read said in the statement. "The options-backdating scandal has cost share owners untold millions of dollars."

KB Home in February reported its first quarterly loss in about a decade. CalPERS said it owns about 550,000 shares in the Los Angeles company, a stake valued at $23.5 million. The pension fund owns about 0.6 percent of the 89.4 million shares outstanding.
http://www.mercurynews.com/search/ci_5598559?nclick_check=1
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[...] "Aozora Bank plans to lend more to buyout companies, including its largest shareholder Cerberus Capital Management, to profit from growing demand for acquisition funding.

Japan's market for these loans, typically secured against the assets of the firm being bought, "is very small versus that of the U.S. or Europe," David Hackett, Aozora's chief financial officer, said in a recent interview. "It's developing though, and we plan to be at the forefront of that."

Aozora is hiring bankers and expanding overseas to capture a greater share of global buyouts."  See Aozora Bank will lend more to buyout firms  (article below)

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Cerberus' Hidden Empire

  Hidden Empire (extended)

Cerberus Company	Description		Web site
BlueLinx Holdings	Building products distributor		http://www.bluelinxco.com/home.asp
Anchor Glass	Glass container manufacturer for Anheuser-Busch and other companies		N.A.
NewPage Corp.	Coated and carbonless paper producer		http://www.newpagecorp.com/mpd/home.nsf/
Escanaba Timber	Major wood supplier managing 900,000 acres of forest
Debis AirFinance	Aircraft leasing and financing company with 250 jets and turboprops leased to 85 airlines worldwide		http://www.debisairfinance.com/
LNR Property Corp.	Real estate investment and management company		http://www.lnrproperty.com/
Vanguard Car Rental	Umbrella company form Alamo Rent-a-car and National Car Rental		http://www.vanguardcar.com/
Strategic Restaurants Acquisition Corp.	Burger King's second-largest franchisee with 226 restaurants		N.A.
SSA Global Technologies	Leading provider for enterprise software and services		http://www.ssaglobal.com/
Global Home Products	Manufacturer of Burnes picture frames, Mirro cookware, and Anchor Hocking glassware		http://208.55.132.171/
Aozora Bank	48-year-old Japanese bank with $43.5 billion in assets		http://www.aozorabank.co.jp/en/company/
GDX Automotive	Auto parts manufacturer		http://www.gdxautomotive.com/
Talecris BioTherapeutics*	Protein therapy provider for rare and chronic illnesses such as immune disorders, shock, and burns		http://www.talecris.com/
Mervyn's*	Department store chain with 257 locations in 13 states		http://www.mervyns.com/
Guilford Mills	One of America's largest auto seat suppliers		http://www.guilfordmills.com/fibers.html
IAP Worldwide Services	U.S. Defense Dept. supplier of services such as base-camp support		http://www.iapwws.com/
Velocita Wireless	Wireless services provider to companies, government organization, and 20% of all BlackBerries		http://www.velocitawireless.com/
Inovis*	B2B solutions provider		http://www.inovis.com/
Sports Brands International	Controls, directly or indirectly, 20 international companies that create and distribute sports apparel and footwear under the Fial and Ciesse brands.		http://www.fila.com/
Exco Resources*	Oil and gas acquisition, exploitation, development, and production company		http://www.excoresources.com/
Flexible Flyer	Swing set, hobby horse, and tricycle manufacturer		http://www.flexible-flyer.com
G+G Retail	Teen clothing manufacturer		http://www.gorave.com/
General Fiber Communications	Residential CATV installation services provider		http://www.generalfiber.com/
Aegis mortgage	Mortgage banking company		http://www.aegismtg.com/
CTA Acoustics	Fiber-related automotive parts supplier to Ford, GM, and DaimlerChrysler		http://www.ctaacoustics.com/
Tandem Staffing Solutions	Staffing services provider		http://www.tandemstaffingsolutions.com/us/default.aspx
Formica Corp.*	Leading supplier of decorative surfacing materials		http://www.formica.com/
Rafaella Sportswear	Manufacturer of women's casual and career wear, mostly in missy sizes		N.A.
Kokusai Kogyo	Japanese leisure services provider that runs bus services and owns golf courses as well as hotels		http://www.kokusaikogyo.co.jp/
Peguform GmbH & Co. KG***	German automotive components supplier to auto makers such as Porsche and Volkswagen		http://www.peguform.de/ger/home.asp
Jade GmbH	German property company		N.A.
Airway Industries	Manufacturer of luggage sold under the Atlantic Luggage brand		www.atlanticluggage.com
Pitney Bowes Capital Services**	Commercial financing business		N.A.
*Cerberus is a co-investor with other private investment firms
**Cerberus will own 48% of the company when the pending spin-off is completed.
***Operations in Germany, Spain, Mexico, and Brazil
DATA: Capital IQ, Dealogic, Standard & Poor's, Dun & Bradstreet, Hoover's, Companies

All Credit to Business Week at: http://www.businessweek.com/magazine/content/05_40/b3953118.htm
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Aozora Bank will lend more to buyout firms

Aozora added three senior executives in the past two months to strengthen its operations including leveraged finance, Hackett said. Federico Sacasa, 56, former chief executive officer of Caribbean Central American Action-CCAA, joined in February and will become the bank's president in June, pending approval from shareholders.

All Credit To The International Herald Tribune

http://www.iht.com/articles/2007/04/15/business/sxaozora.php
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In regards to Cerberus's ownership of

Exco Resources*

Oil and gas acquisition, exploitation, development, and production company

http://www.excoresources.com/

EXCO acquires Anadarko oil and gas properties

Houston Business Journal - February 2, 2007

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Continuing its push to sell off assets to reduce debt associated with major acquisitions, Anadarko Petroleum Corp. has sold oil and natural gas properties to EXCO Resources Inc. for $860 million.

The oil and natural gas properties, acreage and other assets are located in multiple fields in the Mid-Continent and Gulf Coast areas of Oklahoma and Texas.

Houston-based Anadarko (NYSE: APC) has now reached $9 billion in asset sales since completing its $21 billion acquisition of Kerr-McGee Corp. and Western Gas Resources Inc. for a total of $21.14 billion last August. The company expects further asset sales in 2007.

"We currently expect our pro-forma debt-to-capital ratio at the end of the first quarter, assuming all the transactions announced to date are closed, to be approximately 50-55 percent," said Al Walker, Anadarko CFO. "During the balance of the first half of the year we expect to announce additional transactions and believe we will accomplish our goals for balance sheet restoration during 2007."

The sale of the properties in Oklahoma and Texas took effect Jan. 1 and is expected to close in April.

In December, Anadarko and Dallas-based EXCO (NYSE: XCO) struck another deal, with EXCO paying $1.6 billion for the Vernon and Ansley fields in Jackson Parish, La.

The latest sale includes properties with net production at year-end 2006 of approximately 103 million cubic feet per day equivalent (Mmcfpd) of natural gas and oil from roughly 1,327 producing wells.

Nearly 91 percent of the estimated value of the Mid-Continent reserves are operated, while about 85 percent of the estimated value of the reserves in South Texas are operated. The acquisition totals approximately 290,000 acres.

http://houston.bizjournals.com/houston/stories/2007/01/29/daily76.html
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"Private equity firms have invaded the Motor City, bringing with them piles of cash and gales of controversy. The buyout firms say they'll rescue companies like Chrysler from years of bloat and mismanagement. Their opponents say that Wall Street financial operators will dice up and sell off automakers and suppliers, after loading them up with debt, destroying jobs and hastening the demise of a once-great American industry. " John Lippert of Bloomberg.net

See other article postings on the Cerberus subject on this blog earlier today at

Some Things To Know About Cerberus. [...]"Over the next two years, according to shareholder lawsuits, Cerberus forced the company into bankruptcy ..."

Posted at 10:44:59 AM on Monday, May 14, 2007

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Cerberus to buy Chrysler majority  (5/14/07)

The firm's US arm has been performing badly US private equity firm Cerberus Capital Management is to buy a majority stake in car firm DaimlerChrysler's ailing US Chrysler arm. The firm will pay 5.5bn euros ($7.41bn; £3.7bn) buy 80.1% - significantly less than the $36bn paid for Chrysler's 1998 merger with Daimler-Benz. DaimlerChrysler shares rose 6.4% in afternoon trade on the German market. The German-American firm will keep a 19.9% stake in the firm but Chrysler must foot pension and healthcare costs. 'Right conditions' The deal was sealed after two months of talks between an array of potential bidders interested in buying the US operation. It marks the reversal of a landmark deal in the automotive industry. We have created the right conditions for a new start for Chrysler and Daimler Dieter Zetsche, chief executive DaimlerChrysler The future of Chrysler has been in the balance recently as it battled against huge losses that hit $1.5bn last year. "With this transaction, we have created the right conditions for a new start for Chrysler and Daimler," said DaimlerChrysler chairman and chief executive Dieter Zetsche. The acquisition comes nearly a decade after the $36bn merger of Chrysler and the former DaimlerBenz AG. Along with other US car firms, Chrysler has suffered from falling profits and increased competition from Japanese car firms - slumping to fourth place in the US light vehicle market behind Toyota. Like its US peers, the group has also embarked on a significant reorganisation plan, which includes 13,000 job cuts. Tom LaSorda, president and chief executive of Chrysler Group, said the transaction would create a "standalone Chrysler that is financially stronger". Worker worries Founded in 1992, Cerberus specialises in snapping up ailing firms and reviving them by means of heavy cost-cutting. It currently owns about 50 companies with combined revenues of more than $60bn. Unions - who had been worried over job implications of any sale - welcomed the deal. Ron Gettelfinger, president of the United Autoworkers, said: "The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler." The UAW has a four-year contract with Chrysler that comes to and end in September. The transaction with Cerberus is in the best interests of our UAW members, the Chrysler Group and Daimler Ron Gettelfinger, president, United Autoworkers Analysts have said that making the firm profitable will demand that any new contract with the UAW includes lower costs, notably in health care. Experts also said the deal illustrates the continued interest of Cerberus in the auto industry. In 2006, GM offloaded a majority share in its finance arm, General Motors Acceptance (GMAC), for some $14bn to a group that was headed by Cerberus. Analysts believe the private equity firm - which has been headed by former US Treasury Secretary John Snow since last October - might be considering merging the GMAC outfit with Chrysler Financial. The name Daimler AG will replace DaimlerChrysler, pending shareholders approval. All Credit to: THE BBC at: http://news.bbc.co.uk/2/hi/business/6653277.stm

Previously

Blackstone, Cerberus Collide Over Buyouts in Detroit (Update1)

By John Lippert

April 27 (Bloomberg) -- The decision had been made. DaimlerChrysler AG's management in Stuttgart, Germany, weary of the struggle to keep its U.S.-based Chrysler unit in the black, was ready to sell. In March, Chrysler Chief Executive Officer Thomas LaSorda organized separate daylong briefings for prospective buyers. They continued their discussions during steak and seafood dinners at the Walter P. Chrysler Museum in Auburn Hills, Michigan --in a gallery decorated with World War II jeeps.

LaSorda's guests weren't from Toyota Motor Corp. or General Motors Corp. They were Neil Simpkins of Blackstone Group LP and Lenard Tessler of Cerberus Capital Management LP, New York-based private equity firms that have been involved in some of the biggest leveraged buyouts of the past decade.

LaSorda threw a separate dinner for Donald Walker, co-chief executive officer of Magna International Inc., a Canadian parts supplier that entered talks with Onex Corp., Canada's biggest buyout firm, on a joint bid for Chrysler.

Private equity firms have invaded the Motor City, bringing with them piles of cash and gales of controversy. The buyout firms say they'll rescue companies like Chrysler from years of bloat and mismanagement. Their opponents say that Wall Street financial operators will dice up and sell off automakers and suppliers, after loading them up with debt, destroying jobs and hastening the demise of a once-great American industry.

A Laboratory of Finance

Detroit, the cradle of modern American industry since Henry Ford started his first assembly line 94 years ago, is now a living laboratory for the latest techniques in 21st-century finance --potentially risky combinations of bonds, loans and derivatives complex enough to baffle the most-seasoned observers.

``Most investors I talk to are very concerned, but they're not strong enough to stop it, so the train keeps rushing down the tracks,'' says Edward Altman, finance professor at New York University's Stern School of Business and a bankruptcy expert whose book, ``Corporate Financial Distress and Bankruptcy'' (John Wiley & Sons, 354 pages, $95) is in its third edition.

Private equity and hedge funds are swarming over bankrupt suppliers such as Delphi Corp. and Tower Automotive Inc., the world's biggest maker of vehicle frames. They're buying every financial obligation these companies have -- from common stock to unsecured bonds, to bank loans, to trade receivables -- and repackaging them for sale on secondary markets.

Seven Bankruptcies

Buyout firms borrow as much as 90 percent of the purchase price of a target company and repay the loans from the company's cash flow, says Altman, 65. ``I've never seen conditions like this in all my life,'' he says. ``The country and the world are becoming so leveraged at all levels that there's a volcano brewing. I don't know when it will happen, but the rumblings are here.''

Almost all of the big leveraged buyout names are in Detroit, where seven major suppliers have declared bankruptcy in the past two years, according to Barry Ridings, co-head for restructuring at New York-based Lazard Ltd. Billionaire Carl Icahn offered $5.3 billion for Lear Corp., a maker of auto seats that has not declared bankruptcy. Wilbur Ross, another billionaire investor, rolled up auto parts companies in the U.S., Japan and Brazil into his own $6 billion industrial giant, including pieces of Collins & Aikman Corp. and Lear. David Rubenstein's Washington-based Carlyle Group joined with others to buy the Hertz Corp. car rental company from Ford Motor Co. and has invested in Tower.

And when DaimlerChrysler CEO Dieter Zetsche confirmed he was negotiating to sell Chrysler, Kirk Kerkorian of Tracinda Corp., with great fanfare, made an offer of $4.5 billion.

Billions Invested

The March dinners weren't the first Detroit forays for Stephen Schwarzman's Blackstone and Stephen Feinberg's Cerberus either. In December, Cerberus led a group that bid $3.4 billion for most of Delphi, the parts company spun off by GM in 1999 that declared bankruptcy in 2005. Delphi had $26.4 billion in 2006 revenue.

Cerberus purchased a 51 percent stake in General Motors' finance unit for $7.4 billion in cash in 2006. Blackstone bought TRW Automotive Inc., the biggest maker of vehicle safety systems, from Northrop Grumman Corp. for $4.7 billion in 2003.

Private equity and hedge funds will have invested hundreds of billions of dollars in the U.S. auto industry by 2009, says Kimberly Rodriguez, a principal in the Southfield, Michigan, office of accounting firm Grant Thornton LLP.

$432 Billion

The invasion signals the depths to which Detroit has fallen and the heights to which the buyout firms have ascended. Private equity firms raised a record $432 billion last year, according to London-based researcher Private Equity Intelligence Ltd.

Hedge funds, which have substantial investments in auto industry stocks and bonds, doubled their assets to more than $1.4 trillion in five years to the end of 2006, according to Chicago-based Hedge Fund Research Inc.

``As the damage grows in Detroit, it's claiming even bigger companies like Chrysler,'' says John Casesa, managing partner of New York-based consultant Casesa Shapiro Group LLC. ``At the same time, there's so much capital in the hands of private equity funds, there's virtually no company too big for them to buy.''

Compared with recent deals, Chrysler would be a medium- sized bite. On April 2, Kohlberg Kravis Roberts & Co. agreed to buy First Data Corp., the world's largest processor of credit card payments, for $29 billion. And that was just the second- biggest buyout offer for the year, after KKR's February $45 billion bid for Texas electric utility TXU Corp.

Sallie Mae Bid

The First Data offer took New York-based KKR's planned spending over $100 billion for a six-month period. Meanwhile, in mid-April, New York-based private equity firm JC Flowers & Co. and San Francisco-based Friedman Fleischer & Lowe announced a deal to acquire SLM Corp., better known as Sallie Mae, for $25 billion, with JPMorgan Chase & Co. and Bank of America helping to underwrite the purchase of the U.S.'s largest provider of student loans.

DaimlerChrysler is seeking $8 billion for its U.S. unit, which last year lost $1.5 billion on revenue of $62.2 billion. Daimler-Benz AG paid $36 billion for Chrysler in 1998. DaimlerChrysler shares were up 27 percent for the year as of April 27.

Private equity executives say they're just what Detroit needs as it struggles to compete with the likes of Toyota, which has seen its U.S. market share swell to 15.7 percent, up from 7.3 percent in 1995. Toyota's first-quarter global sales rose 9.2 percent to a record 2.35 million vehicles, the company said on Wednesday, surpassing GM's 2.26 million. The Japanese automaker expects to overtake GM as the world's biggest carmaker this year.

Quayle Defends Buyouts

``I don't know if the public company model is broken, but it's gotten a lot more challenging,'' Dan Quayle, 60, chairman of Cerberus's international unit and vice president under the first President George Bush, told an investor conference in New York in February. In an interview after the conference, he added, ``We view ourselves as very good at restructuring, at taking on challenges and working through them, whether they're management, union or equity issues.''

Wilbur Ross, CEO of New York-based W.L. Ross & Co., likens himself and other private equity operators to the entrepreneurs who built the U.S. steel, railroad, oil and banking industries. ``You can argue that the private equity community is the new industrial community,'' says Ross, 69, speaking from his 19th- floor office above Lexington Ave. ``In a sense, we've come full circle. You had Carnegie, Fisk, Mellon, Vanderbilt, Rockefeller and people like that. You can call them Wall Street people, but they were really at the end of the day industrialists.''

Fear for Jobs

Basil ``Buzz'' Hargrove, president of the Canadian Auto Workers union, says the buyout binge will only produce unemployment. ``We see private equity as cutting and slashing so they can sell the company and make a lot of money at the expense of people's jobs and livelihoods,'' says Hargrove, whose union represents 11,500 Chrysler workers. He opposes a Chrysler takeover by private equity.

Lew Moye, bargaining chairman of United Auto Workers Local 110 at a Chrysler minivan plant in St. Louis, is concerned that a new owner will break up the company. ``We don't know if we'll wind up in a big fight if an equity fund takes part of the company, like Jeep, and splits it off,'' he says.

Kerkorian's Second Bid

It's the second time around for one of the Chrysler bidders, Kirk Kerkorian. In 1995, Kerkorian, 89, made a hostile offer that Chrysler rebuffed. Jerome York, once chief financial officer of Chrysler and now a Kerkorian lieutenant, made the current offer in an April 5 letter to Zetsche.

``Tracinda intends to build and strengthen Chrysler as an independent entity by partnering with the UAW and senior management,'' York wrote.

Chrysler's current troubles are a reprise of a 1979 crisis that almost forced it into bankruptcy; the company was saved by a government loan guarantee. Lee Iacocca, Chrysler CEO from 1979 to '93, then led the company to prosperity by popularizing minivans.

Bo Andersson, group vice president of purchasing at GM, sees opportunities and threats in the private equity incursion. ``Hedge funds and venture capital bring money to restructure and have higher expectations of management than most other people,'' he says. ``What I don't like is they're very short-term focused; they buy companies fast and sell companies fast.'' Andersson says he's concerned that buyout firms will consolidate the parts industry and boost prices. To prevent that, he says, he has at least two sources for everything GM buys.

`Hostage'

``I've said this to Wilbur Ross; I've said it to other people, 'You think you can hold us hostage?''' Andersson says.

Private equity funds have been prowling around Detroit since Iacocca's time. New York-based Forstmann Little & Co. bought a predecessor to Lear in 1986 and sold it to the company's management two years later. Dealmaker Roger Penske, a former race car driver, bought an 80 percent stake in GM's diesel operations for an undisclosed price in 1988 and sold it to DaimlerChrysler for $583 million 12 years later.

Blackstone paid $650 million for American Axle & Manufacturing Inc. in 1997 and then sold its interest through public stock offerings. The stock went public at $17 a share in January 1999. It had risen to $40.76 by the time Blackstone sold its last shares in December 2003.

Indictments

One 2001 buyout resulted in criminal indictments. On March 26, David Stockman, former budget director for Ronald Reagan and more recently senior managing director of buyout firm Heartland Industrial Partners LP, was charged with securities fraud. After Heartland took Southfield, Michigan-based Collins & Aikman private, the company deteriorated as the cost of materials rose and its biggest customers, GM and Ford, cut production. Stockman is accused of concealing the malaise. He and three others pleaded not guilty, while four co-defendants admitted guilt and are likely cooperating with prosecutors, Stockman's lawyer, Elkan Abramowitz, told Bloomberg News on March 26.

Delphi's bankruptcy in 2005 opened the floodgates for the buyout crowd, says David Cole, chairman of the Center for Automotive Research in Ann Arbor. ``This was the pivot point when it became real to people inside Detroit that we couldn't escape a painful restructuring,'' Cole says. Delphi declared its U.S. operations bankrupt after failing to win concessions from unions and financial aid from GM.

Cheap Assets

Detroit is a magnet for private equity because its assets are cheap, says Thomas Stallkamp, a partner in the New York- based buyout firm Ripplewood Holdings LLC. Automotive suppliers command a premium of five to seven times earnings before interest, tax, depreciation and amortization, or Ebitda, says Stallkamp, 60, a former Chrysler president. That compares with premiums of eight to 10 times Ebitda a decade ago.

In September, Ripplewood's Asahi Tec Corp. of Shizuoka, Japan, bought Plymouth, Michigan-based Metaldyne Corp. for $1.2 billion. Both companies make engine and chassis parts.

Lazard's Ridings says the bumpy ride for the auto industry is just beginning. ``Detroit is going to go through two phases, and we're now in the middle of phase one, in which there are a lot of bankruptcies and restructurings,'' Ridings says. ``Then comes phase two, in which we'll have a consolidation.''

Bankruptcy, Consolidation

One of the consolidators is Wilbur Ross. He says bankruptcies in Detroit give investors like himself a chance to solve problems dating back a century. For plastics suppliers, he says, the issue is fragmentation. Too many companies use 60 percent of their manufacturing capacity and sell to only one automaker in just one region, he says. And too many, he adds, made pension and health care promises without figuring the cost.

``It's almost as though the managements were saying, 'I'm going to retire in five or 10 years. I'll have labor peace, and then it will be someone else's problem,''' Ross says.

Ross jumped into the parts industry in 2005, when he acquired interiors and wiring factories from Collins & Aikman and Lear. The interiors unit of his International Automotive Components Group North America LLC now has 21,000 employees in 16 countries. He's closed factories in the U.K. and Germany and shifted production to the Czech Republic and China.

``We want to have facilities everywhere where it's logical for people to make cars,'' Ross says. ``They need to be relatively low cost.'' Speaking slowly, with clear blue eyes watching to make sure he's heard, he says within a few years he could boost his auto parts revenue to $50 billion from $6 billion today.

Texaco, LTV

During 26 years at Rothschild Investments LLC, Ross reorganized nine of the 25 largest bankrupt companies in the U.S., including Texaco Inc. and LTV Corp. After striking out on his own in 2000, he rolled up five bankrupt steelmakers and sold them in 2005 to Rotterdam-based Arcelor Mittal Steel Co. for $4.5 billion.

Ross formed the International Coal Group Inc. in 2004 from bankrupt mines. In March, the company shut down its Sago Mine in West Virginia, where 12 workers died after an explosion last year.

Like Ross, Cerberus's Feinberg keeps an eye out for auto parts companies that go bankrupt, Rodriguez says. The buyout fund owns sealing, fabric and plastic parts companies in the U.S. and Europe, the Alamo and National rental car chains, plus GMAC LLC. In April, Delphi announced that Cerberus was considering withdrawing its bid for the company because of concerns about labor costs and Delphi's ability to grow.

Feinberg: Drexel Alum

Feinberg, 47, a trader at Drexel Burnham Lambert Inc. in the 1980s, started Cerberus with $10 million in 1992. He's built it into a $24 billion powerhouse that also owns Albertson's LLC supermarkets and IAP Worldwide Services Inc., one of the largest providers of logistics support to the U.S. Army in Iraq. He declined to comment for this article.

Feinberg has plenty of appetite for risk. One example is his pursuit of GMAC, which makes car loans for GM and runs mortgage and insurance businesses. Cerberus was a latecomer in the bidding, says Sanjiv Khattri, 42, GMAC's CFO. GM sold GMAC to raise cash after its credit rating fell to junk and it lost $10.4 billion in 2005. KKR was in a strong position to buy GMAC because it led a group that bought the finance company's commercial mortgage unit for $8.8 billion in August 2005. Cerberus also had to work hard to parry a possible bid from Berkshire Hathaway Inc.'s Warren Buffett, Quayle says.

Cerberus's 'Iron Stomach'

Cerberus moved quickly to the forefront. When one of its bank partners pulled out, Cerberus found new financing in 24 hours. The firm negotiated with GM over a weekend to transfer $20 billion of GMAC's riskiest auto leases to the automaker's own balance sheet, Khattri says.

Cerberus's trump card was its willingness to continue as exclusive financier for GM vehicles for 10 years. The risk: If GM sales continued to decline, so would GMAC's earnings. ``They do have an iron stomach,'' Khattri says.

GM's North American production did fall 15.3 percent in the first quarter of 2007, to 1.06 million vehicles. GMAC has also been hit by the subprime mortgage crisis. On March 14, GM refunded $1 billion to Cerberus to cover underperforming subprime loans that had pushed GMAC's book value below a level specified in their purchase agreement.

To minimize future losses, GMAC cut back sharply; it made $6.9 billion of ``nonprime'' loans in the fourth quarter, a 43 percent decline from the same period in 2005, the company said in a regulatory filing. Lehman Brothers Inc. analyst Brian Johnson predicts GMAC's pretax income will drop 23 percent this year to $1.7 billion on subprime losses and then grow to $4.3 billion by 2012 on auto financing and insurance.

Ex-Paratrooper

Feinberg, who has a bachelor's degree in politics from Princeton University, learned to measure physical risk while serving as a paratrooper in the U.S. Army's Reserve Officers' Training Corps. When he made his pitch for GMAC in Detroit, it was tinged with patriotism. ``Steve is a very proud American,'' Khattri says. ``He's proud of American institutions, and he considers GM to be an American institution. For him, it was more than just about making a lot of money.''

Feinberg's GMAC bet helped save GM CEO Rick Wagoner's job, a person familiar with the situation says. At the time, Kerkorian, who owned 9.9 percent of GM's shares, was pushing the board to fire Wagoner. In early 2006, after Feinberg agreed to invest in GMAC, relieving the company's financial strain, GM's board gave Wagoner a public vote of confidence.

Kerkorian has since sold his GM shares--and may have pocketed a $106 million profit, according to documents he filed when he bought and sold stock.

Tower's Rise and Fall

Tower Automotive is a good example of the financial complexity that's overtaken Detroit, Rodriguez says. The Novi, Michigan-based company was incorporated in April 1993 by Hidden Creek Industries, a Minneapolis-based private equity firm. Over the next decade, Tower made 14 acquisitions, giving it factories from Detroit to Belgium to China. Revenue rose 40-fold, to $3.2 billion in 2004. Long-term debt rose to $1.1 billion in 2003 from $70 million in 1995.

Disaster struck in 2001. Tower started losing money as Ford and GM cut production and demanded price cuts of 3-5 percent a year. When Tower declared bankruptcy in February 2005, the company reported assets of $788 million and liabilities of $1.3 billion.

Kathleen Ligocki, Tower's CEO, said in a press release that she'd been forced into insolvency by debt that was unsustainable and laced with conditions that constrained her ability to manage. Ligocki moved to Tower in 2003 after five years at Ford, where she was vice president for customer service.

Hedge Fund Loan

Among Tower's debts was a $155 million loan from two dozen hedge funds at an interest rate that reached 13.6 percent by December 2004. The funds included New York-based Xerion Capital Partners LLC. Daniel Arbess, founding partner of Xerion, says he was confident he wouldn't lose money. That's because the loan was secured by Tower's overseas factories, which are not insolvent. Moreover, several funds were then shorting Tower's stocks and bonds, a person familiar with the situation says.

Arbess, 46, who won't say whether he was short on Tower, says there's nothing wrong with investors betting against companies to which they also loaned money. ``If one part of the capital structure is overvalued while another offers an attractive return, there's no reason why we would not short the overvalued security,'' Arbess says.

Notes, Shares Plunge

At Tower, the short sellers won. The 12 percent notes due in 2012 that were issued by a subsidiary called RJ Tower Corp. sold for seven cents on the dollar yesterday, down from 93 cents six months after the bankruptcy. Tower's shares sold for five cents yesterday, down from $2.88 at the time of the bankruptcy and $28.25 in 1999. Since the bankruptcy, Tower has closed half of its U.S. factories.

Since opening Xerion in 2003, Arbess, an attorney who was trained in corporate restructurings at New York-based law firm White & Case LLP, has spent hundreds of millions of dollars buying stocks and bonds in 10 auto suppliers, including Tower. He says he and other hedge fund operators, by cutting off what he calls ``the drug of excess leverage,'' are helping impose discipline Detroit needs to face low-wage competition.

``These activist investors are forcing medicine to be taken that will lead to greater competitiveness in Detroit, and that will result in more jobs being saved,'' he says.

On March 28, Tower accepted a $1 billion offer from Cerberus for its assets. The bankruptcy court invited additional bidders to participate in a June 25 auction.

Carving up Delphi

Delphi is also being carved up. Before being spun off by GM in 1999, the company made everything from fuel injectors to oil filters to receivers for satellite radios. By the time of its 2005 bankruptcy, less than a quarter of its 185,000 employees worked in the U.S. Since then, private equity investors have bought chunks of Delphi, while hedge funds feasted on its shares and bonds.

David Tepper, 49, president of Chatham, New Jersey-based hedge fund Appaloosa Management LP, bought 52 million Delphi shares immediately after the bankruptcy for as little as 30 cents each. The shares sold for $2.57 yesterday. Tepper, who declined comment, had joined Cerberus's $3.4 billion bid for Delphi's assets. He and other investors are now looking for a new partner.

Cerberus may have dropped out of the bidding for Delphi partly because of the hard stand its workers are taking. To obtain UAW agreement for the 1999 spinoff, Delphi agreed to match the pay of GM factory workers. This averaged $73.26 per hour in pay and benefits last year. Most longtime Delphi workers have since taken buyouts.

Fight Over Wages

The union has agreed that unskilled workers hired since 2004 will earn $27 an hour and $42 by 2011, a person familiar with the situation says. Cerberus told the union it wouldn't pay that much, since it's double the pay at other U.S. parts companies, the person says.

A fight could also be brewing at Delphi's interiors unit, which the company agreed in February to sell to Ira Rennert's New York-based Renco Group Inc. for an undisclosed price. The unit, which makes auto cockpits and door parts, had revenue of $1.3 billion last year.

A Brooklyn native, Rennert, 72, earned an MBA from New York University in 1956. He built Renco in the 1980s and '90s by buying up companies and funding the purchases through issuance of $1 billion in high-yield bonds. From 1996 to '98, five Rennert companies sold $975 million of bonds, and Renco collected $311.5 million of the proceeds in the form of dividends, according to the securities' prospectuses.

Humvee Stake

Renco now has revenue of more than $2 billion, according to its Web site. This includes a stake in AM General Corp., which makes Humvees for the U.S. military, and WCI Steel Inc., which emerged from bankruptcy last year.

In February, the Pension Benefit Guaranty Corp. sued Renco, seeking corporate assets including Rennert's 29-bedroom Sagaponack, New York, mansion, to cover pensions for employees and retirees of WCI. Renco settled the dispute by contributing $95 million to the pensions; the company said in a statement it should be given credit for owning up to its responsibilities.

``Rennert's a corporate raider; he has no morals,'' says Mark Sweazy, president of UAW Local 969 at a Delphi door lock factory in Columbus, Ohio. Sweazy cited the WCI pension as evidence. ``Rennert might want to slice and dice our contract, but he might be in for a shock when he comes to Columbus,'' Sweazy says. ``There's the old thing about holding your ground.'' Dennis Sadlowski, one of Rennert's attorneys, didn't return calls seeking comment.

Buyout Poster Boy

Workers at Delphi's steering components unit are more enthusiastic about their prospective buyer, Beverly Hills-based Platinum Equity Holdings LLC, headed by Tom Gores. He offered to buy the unit, which has 10,000 employees in 22 factories and took in $2.6 billion in revenue in 2006, for an undisclosed sum in January.

Workers in Saginaw, Michigan, have the buyout baron's photo posted everywhere inside their factory, says Erica Malicoat, 23, who makes metal shafts and housings for steering columns. The photo shows a hairy-chested Gores with his shirt open and a two- day growth of beard. Gores, 42, is an Israeli Christian whose family moved to Flint, Michigan, when he was five. Since 1995, he's acquired 72 companies, mostly in software, telecommunications and logistics. ``We're very impressed with management in Delphi's steering business,'' says Mark Barnhill, a Platinum senior vice president. ``We believe we can work with them to build a business that's profitable and positioned for growth.''

`We Sweat, Run'

Malicoat hopes Gores succeeds. She started at the Saginaw plant in July, one of 2,200 replacements for longtime workers who took buyouts. She says the six workers in her group make as many shafts and housings per day as 12 of the longtime workers. ``We sweat, we run, we work hard every single day,'' she says. ``We do not want our jobs to leave this place. This is our home.''

Workers such as Malicoat shouldn't place their hopes for salvation in private equity, NYU's Altman says. ``Would Blackstone have a viable program for Chrysler that's any different from what's there now?'' Altman asks. ``Probably not. The only thing they could do is move more aggressively to sell the company to someone else.''

Stuart Gilson, a restructuring professor at Harvard Business School in Cambridge, Massachusetts, says buyout and hedge funds are sweeping through Detroit so rapidly and with such a complex array of new investment tools that it's too soon to tell whether they'll be healthy or harmful. ``I wouldn't want to bet money either way,'' he says.

In the Balance

Hanging in the balance once again is Chrysler--the living symbol of the rise and fall of the U.S. auto industry. Walter Chrysler founded the company in 1925 and expanded it in 1928 when he bought Dodge Brothers Co. from investment bank Dillon Read & Co. Since the 1970s, the company has weathered near- bankruptcy, a government bailout and a disastrous merger with the Germans. Its fate will now likely be in the hands of people whose idea of engineering is inventing a new kind of debt -- not a new way to make a car.

To contact the reporters on this story: John Lippert jlippert@bloomberg.net

Last Updated: April 27, 2007 15:54 EDT
All Credit to Bloomberg and Article's Author John Lippert at:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aPSl47g87g5w&refer=home
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Private Equity vs. China

How the Commerce Dept. crackdown on Chinese paper exports will help Cerberus
Capital and friends

by Peter Coy and Michael Mandel

It's hard to think of an American product that's less strategically important than the coated paper that magazines, annual reports, catalogs, and auto-dealer brochures are printed on. Yet there was Commerce Secretary Carlos M. Gutierrez, on Mar. 30, announcing tariffs on coated-paper imports from China—the first time in at least two decades that U.S. antisubsidy law has been applied to that country. By acting against unfair China trade, he said, the U.S. was standing up for "American manufacturers, workers, and farmers."

But Gutierrez left out one important group of beneficiaries: private equity investors. It turns out the paper manufacturer that brought the complaint, NewPage, is owned, through several levels of intermediaries, by New York-based Cerberus Capital Management, the mammoth private investment group controlled by the wealthy and reclusive Stephen A. Feinberg. Another big industry player, Verso Paper, is majority-owned by affiliates of private investment firm Apollo Management.

Buying Protection—From Cheap Capital

The government action raises obvious questions about the political influence of private investment firms, especially since the chairman of Cerberus, John W. Snow, served as President George W. Bush's Treasury Secretary from February, 2003, to July, 2006. But Cerberus says Snow didn't make phone calls on NewPage's behalf. And Cerberus has investment interests far beyond coated paper—Snow recently toured China calling for closer business cooperation between that country and the U.S.

But in a broader sense, what's going on is nothing less than a showdown between two very different ways of financing business. On the one side is China, which is accused of lowering the capital costs of coated-paper makers through subsidies such as low-cost loans and debt forgiveness. On the other side are the private money outfits, which raise huge funding pools by promising investors high returns in a low-return world.

The trade sanctions—which the Commerce Dept. could still back away from—would protect private equity-owned paper mills from China's cheap capital and help private investors realize the high returns they want. This battle of financial systems may be a harbinger of the next wave of trade disagreements.

How did we get into this situation? Over the past couple of years, U.S. paper giants such as MeadWestvaco (MWV) and International Paper (IP) wanted to shed some of their laggard divisions. They found ready buyers in the private equity firms, which saw a good deal.

In particular, in early 2005, MeadWestvaco sold its coated-paper mills and other assets to NewPage for $2.1 billion. The newly formed company took on about $1.8 billion in debt to finance the purchase. A Cerberus-owned affiliate tossed in $415 million in equity, according to documents filed with the Securities & Exchange Commission. (Disclosure: The same documents list The McGraw-Hill Companies (MHP), the parent company of BusinessWeek, as one of NewPage's biggest customers.)

Chinese Locomotive

This leveraged buyout left NewPage with big debts and hefty interest payments totaling $165 million in 2006, roughly double the size of its $88 million in capital expenditures. Such heavy debt makes it harder for the company to compete against the Chinese, as well as big European paper manufacturers. NewPage filed the complaint against the Chinese in October, 2006, about 18 months after Cerberus took over. This was the first time since 1991 that any company had formally filed such a complaint against a nonmarket economy.

Now, the fact that NewPage is owned by a private investment firm doesn't make the trade sanctions wrong. Indeed, the big paper makers may have sold off their businesses in part because they saw the onrushing Chinese locomotive of cheap coated-paper exports, which have soared from $21 million in 2004 to $224 million in 2006. The trade sanctions, if they stick, could help preserve the more than 4,000 jobs at NewPage, many in economically depressed areas of the U.S.

And it can be argued that China is at the point where such subsidies are unacceptable, just as capital subsidies to Airbus and Boeing (BA) are unacceptable for Europe and the U.S. "Our view is very simple," says Mark A. Suwyn, NewPage CEO. "We will compete with anybody in the world if it's fair. China can't join the WTO and then choose to use my country as a dumping ground. That's illegal."

A lot of people who worry about the rising tide of Chinese imports agree with Suwyn. But would they want to start a trade war with China to protect private equity investors?

Coy is BusinessWeek's Economics Editor. Mandel is chief economist for BusinessWeek.

All Credit to Business Week at: http://www.businessweek.com/bwdaily/dnflash/content/apr2007/db20070405_214446.htm

AND

Cerberus buys MeadWestvaco's papers assets for $2.3bn
19/01/2005. Source: AltAssets.  

Stamford-headquartered MeadWestvaco Corporation has sold its papers business and associated assets for $2.3bn to a company controlled by New York-based private equity firm Cerberus Capital Management.

MeadWestvaco's Papers business consists primarily of mills located in Ohio, Michigan, Maryland, Maine and Kentucky, which have a combined annual capacity of approximately 2.05 million tons of coated paper; 290,000 tons of carbonless paper and 110,000 tons of uncoated paper.

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to be completed in the second quarter of 2005.

Also included in the sale are approximately 900,000 acres of forestlands.

MeadWestvaco expects the transaction to result in after-tax net proceeds of approximately $2.1bn at closing, which it will use to improve its overall capital structure.

Cerberus and its affiliated entities manage funds and accounts with capital in excess of $14bn.

http://www.altassets.net/news/arc/2005/nz6199.php_______________________________________________________________________________________________________________________________________________________

Former banker extradited to Vienna for fraud 2/14/2007

A former chief of a major Austrian bank on Tuesday was extradited from France to Austria to face charges of improper use of funds, fraud and accounting violations, Austria Press Agency (APA) reported. Helmut Elsner, the former CEO of Austria's bank fuer Arbeit und Wirtschaft (BAWAG), which used to be Austria's fourth largest bank, was taken into custody on Sept. 14, 2006, at his house in southern France. However, the 71-year-old man refused to be extradited to Austria citing health problems, Austrian federal prosecutor Georg Krakow said. After a protracted legal battle, Elsner, the key figure behind one of Austria's biggest financial scandals, finally arrived in Vienna on Tuesday, although he was "very unwilling to come back," Krakow said. The trial against Elsner and other former heads of the bank will begin later this year, and it is said to be the first big success for Austria's new justice minister, Maria Berger, of the Social Democrats (SPOe). Berger said she had been directly contacted by her French counterpart to work out the details of Elsner's extradition. During Elsner's tenure from 1995 to 2003, BAWAG failed in hedge fund investments and lost almost 2 billion euros (about 2.6 billion U.S. dollars) in offshore speculative deals. Due to the massive losses, the bank-owner, the Austrian Trade Unions Federation, was forced to sell it, and at the end of December, a consortium of the U.S. group Cerberus won a bid to buy the bank. Source: Xinhua http://english.people.com.cn/200702/14/eng20070214_350032.html

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Hong Kong tycoon's son may save Air Canada  (see Cerberus connection below)

Victor Li, elder son and heir apparent to Hong Kong tycoon Li Ka-shing, on Sunday confirmed he had been shortlisted by Air Canada to help it emerge from bankruptcy by buying C$700m ($517m) of fresh equity.

Victor Li, elder son and heir apparent to Hong Kong tycoon Li Ka-shing, on Sunday confirmed he had been shortlisted by Air Canada to help it emerge from bankruptcy by buying C$700m ($517m) of fresh equity. Speaking in Beijing, where he had been attending a meeting between Chinese authorities and business leaders over the weekend, Mr Li said he had submitted a letter of intent to provide the financing but stressed that many issues were still to be resolved. Mr Li, deputy chairman and managing director of Cheung Kong (Holdings), flagship of the Li family ports-to-telecoms empire, said that he was making the bid in a personal capacity, echoing the airline's statement on Friday that his investment would come from "personal financial resources". The airline said on Friday that it would enter into detailed negotiations with both Mr Li and Cerberus, a New York-based asset management firm, to secure the financing, following an international competition that drew expressions of interest from Texas Pacific Group, the US buyout group, and Toronto-based buyout specialist Gerry Schwartz. "This is the latest and hopefully one of the last cornerstones in our restructuring," said Calin Rovinescu, Air Canada's chief restructuring officer. Also, Air Canada said both proposals envisaged "co- investment by creditors through a rights offering which would increase total proceeds to C$1bn". The company said unsecured creditors, including bondholders and other financial institutions, with total estimated claims of C$8bn to C$10bn, would receive about 40 to 65 per cent of the airline's fully diluted equity on restructuring. The fact that Mr Li is a Canadian citizen could be important in the negotiations as Canadian law prevents foreigners from owning more than 25 per cent of the voting shares in a Canadian airline. Like many wealthy Hong Kong citizens, Mr Li, who is primarily based in Hong Kong, became a Canadian citizen before the 1997 handover of Hong Kong to China. His family also made significant investments in Canada before the handover, including in Vancouver real estate. Mr Li is known for being intensely private as well as a tough negotiator. The move by Mr Li is a rare foray into the airline sector by the Li family, which, through its businesses, also own a minority stake in China Southern Airlines, according to reports.

http://english.people.com.cn/200309/30/eng20030930_125241.shtml


After posting loss, Air Canada parent makes instalment on $2 billion pledge
Chris Sorensen
Business Reporter

A critical era in Air Canada's turnaround is drawing to a close as parent ACE Aviation Holdings Inc. puts the finishing touches on its "carve-out" strategy and continues to implement key pieces of a new and, some say, revolutionary business model. But will it all be enough?

ACE, the holding company created when Air Canada emerged from restructuring in the fall of 2004, yesterday announced a third payout to its shareholders consisting of units of the Aeroplan loyalty program and Jazz regional airline – both of which were partially spun off as income trusts in a bid to bring out value at the carrier. The move was announced alongside the airline's fourth-quarter loss of $34 million and puts ACE within striking distance of making good on a commitment, approved by holders last year, to distribute up to $2 billion in stated capital to investors.

The payout also brings ACE one step closer to what many believe is an eventual break-up of the holding company.

Nadi Tadros, a Desjardins Securities analyst, predicted yesterday ACE would break up "in 12 months or so," having outlived its purpose once units of Aeroplan, Jazz and shares of Air Canada are redistributed.

Meanwhile, ACE chief executive Robert Milton said a sale of the airline's maintenance unit is expected by the end of next month. Sources have told the Toronto Star that Gerry Schwartz's Onex Corp. is among a small group of front-runners to buy a stake in the business.

Tadros noted that preparations – namely a shelf prospectus filed in April – appear to be underway to allow a key investor, Cerberus Capital Management, to convert preferred shares into common equity, which could then be liquidated. Cerberus is the U.S. private-equity firm that helped bail Air Canada out of bankruptcy protection after its preferred investor, Victor Li, abandoned the deal.

ACE executives said during a conference call yesterday that Cerberus has not yet indicated any intention to sell its shares. A source familiar with ACE suggested the New York-based firm is likely to hang to its stake in the airline until the holding company is wound up and the full value of its initial $250 million investment is realized.

When Cerberus does exit ACE, it will leave behind an airline that bears little resemblance to the one that it bought into more than three years ago. In addition to trimming more than $1 billion in labour costs and inking a $6 billion deal to buy new, state-of-the art aircraft from Boeing Co., Air Canada has adopted a new business model that CEO Montie Brewer says has transformed the airline from a "legacy carrier" to a "loyalty carrier."

The airline now offers customers the opportunity to "buy-up" for extra services such as scheduling flexibility or get discounts for forgoing Aeroplan points or choosing not to check baggage.

Air Canada's restructuring has been held up as a model for other troubled former flag carriers.

But despite the accolades, Air Canada's new approach hasn't always translated into profits.

Despite enjoying record demand for its services, the airline yesterday posted a net loss for the first quarter of $34 million, compared with $126 million a year earlier, blaming the cost of fuel and harsh winter weather. ACE, meanwhile, recorded a fourth quarter loss of $72 million, or 70 cents a share, compared to 118 million, or $1.12 a share, a year earlier.

http://www.thestar.com/article/213127______________________________________________________________________________________