Saturday, March 12, 2005

Remembering all those arguments made 1,500 deaths ago

Knight Ridder
Remembering all those arguments made 1,500 deaths ago

By Joseph L. Galloway, Knight Ridder Newspapers

WASHINGTON - Something about anniversaries prods us to pause and reflect on what's transpired in the intervening time. March 20 is the second anniversary of the invasion of Iraq, and it's a good time to consider what's happened since then.

Do you recall our civilian leadership's rationale for a pre-emptive war against Saddam Hussein? President George Bush and Vice President Dick Cheney and, yes, former Secretary of State Colin Powell told the world that the United States had no choice but to invade Iraq. They said Saddam was hiding chemical and biological weapons, and that his scientists would be able to produce a nuclear weapon in a few years.

Do you remember those who predicted that the operation would be financed in large part by sales of Iraqi oil? It would be cheap, easy and, oh yes, so swift that civilian leaders in the Pentagon ordered the military to plan to begin withdrawing from Iraq no later than the summer of 2003.

There was no need for much post-war planning because there wasn't going to be any post-war. America would come, conquer and get out. If Iraq was broken, its new government headed by the neo-conservatives' favorite exile, Ahmad Chalabi, could fix it. There would be no need for American nation-building, just some modest humanitarian aid.

Secretary of Defense Donald H. Rumsfeld's office had visions of a replay of the almost effortless destruction of Afghanistan's hated Taliban regime using precision-guided munitions, Special Operations forces with laser pointers and Afghan allies.

In Iraq, as in Afghanistan, less would be more, lighter would be better and faster would be best of all. Any Third World regime could be taken down by a few special operators and some airplanes. The Army's heavy divisions were relics of the Cold War.

When then-Army Chief of Staff Gen. Eric K. Shinseki reluctantly answered a senator's persistent questioning by suggesting that occupying and pacifying Iraq, an unruly nation the size of California with 25 million citizens, might require a force of "hundreds of thousands," he was mugged by Rumsfeld's minions.

Under Secretary of Defense Paul Wolfowitz hastened to the Hill the next day and told the legislators that Shinseki's estimate was "wildly off the mark," and that Iraq wouldn't be nearly as tough as Afghanistan had been because Iraq didn't have the sort of nasty ethnic divisions one found in Afghanistan.

At that moment, in late February 2003, on the eve of the invasion, the U.S. invasion force of 278,000 American troops began to dwindle as someone tried to prove the job could be done with fewer than Shinseki's 200,000 troops. Call that the Shinseki Threshold.

One division's tanks and Bradley fighting vehicles bobbed around at sea for weeks and arrived too late for the attack. A second division of tanks and Bradley armored vehicles slated for the follow-up to the invasion was canceled; a third division's deployment to Iraq was postponed for several months. Military Police units needed to secure a hundreds of miles of dangerous supply lines - and to establish law and order - disappeared from the war plan.

A strike force that amounted to an Army division and a Marine Expeditionary Force, with Air Force and Navy fighters and bombers, took down Baghdad in three weeks.

But as the invasion forces regrouped, the world witnessed an orgy of looting and burning of government ministry buildings, and even the power plants upon which a city of 11 million people depended. There was no one to prevent it.

Birthing democracy, Rumsfeld allowed, can be "messy."

After nearly 18 months, the Pentagon admitted that a team of nearly 1,000 intelligence officials and scientists had combed Iraq for evidence of chemical and biological weapons or any sign of an active nuclear weapons program. They found nothing.

This war that was supposed to be a cakewalk has taken the lives of 1,510 American troops and sent thousands more home, maimed by improvised explosive devices that tear off arms and legs.

American taxpayers have paid more than $200 billion in two years for a war we were told wouldn't cost much, if anything, and the cost in fiscal 2006 will be at least $70 billion more.

Now the administration tells us that we had to attack not because Saddam had weapons of mass destruction and ties to al-Qaeda, but because he wasn't a democrat. Sadly, however, the costs of trying to make Iraq a democracy probably would have been lower, and the chances of succeeding better, if we hadn't gone to war with flimsy evidence and wishful thinking.



Joseph L. Galloway is the senior military correspondent for Knight Ridder Newspapers and co-author of the national best-seller "We Were Soldiers Once ... and Young." Readers may write to him at: Knight Ridder Washington Bureau, 700 12th St. N.W., Suite 1000, Washington, D.C. 20005-3994.

Originally published March 11, 2005


Pro-Bush Group Overstates Social Security Shortfall

Pro-Bush Group Overstates Social Security Shortfall


In a new TV ad, Progress for America exaggerates the true state of
Social Security's finances by comparing it to the Titanic. The ad claims
the system will go "bankrupt" if nothing is done and that we must rescue
the program "before it hits the iceberg." Actually, neutral experts
predict the system can pay between 70 and 80 percent of currently
scheduled benefits even if the Trust Fund is exhausted, which isn't predicted
to happen for another 37 years, at least.

The ad also touts Bush's plan for "voluntary personal retirement
accounts" as though that would improve the system's finances. But even the
White House now acknowledges that individual accounts alone do nothing to
fix the system's long-term financial shortfall.

See the link below for the full article:


Outsourcing Innovation

Outsourcing Innovation
First came manufacturing. Now companies are farming out R&D to cut costs and get new products to market faster. Are they going too far?

See the article in the March 21, 2005 edition of Business Week Online at:


No. 1?

No. 1?


No concept lies more firmly embedded in our national character than the notion that the USA is "No. 1," "the greatest." Our broadcast media are, in essence, continuous advertisements for the brand name "America Is No. 1." Any office seeker saying otherwise would be committing political suicide. In fact, anyone saying otherwise will be labeled "un-American." We're an "empire," ain't we? Sure we are. An empire without a manufacturing base. An empire that must borrow $2 billion a day from its competitors in order to function. Yet the delusion is ineradicable. We're No. 1. Well ... this is the country you really live in:

• The United States is 49th in the world in literacy (The New York Times, Dec. 12, 2004).

• The United States ranked 28th out of 40 countries in mathematical literacy (NYT, Dec. 12, 2004).

• One-third of our science teachers and one-half of our math teachers did not major in those subjects. (Quoted on The West Wing, but you can trust it – their researchers are legendary.)

• Twenty percent of Americans think the sun orbits the Earth. Seventeen percent believe the Earth revolves around the sun once a day (The Week, Jan. 7, 2005).

• "The International Adult Literacy Survey ... found that Americans with less than nine years of education 'score worse than virtually all of the other countries'" (Jeremy Rifkin's superbly documented book The European Dream: How Europe's Vision of the Future Is Quietly Eclipsing the American Dream, p.78).

• Our workers are so ignorant, and lack so many basic skills, that American businesses spend $30 billion a year on remedial training (NYT, Dec. 12, 2004). No wonder they relocate elsewhere!

• "The European Union leads the U.S. in ... the number of science and engineering graduates; public research and development (R&D) expenditures; and new capital raised" (The European Dream, p.70).

• "Europe surpassed the United States in the mid-1990s as the largest producer of scientific literature" (The European Dream, p.70).

• Nevertheless, Congress cut funds to the National Science Foundation. The agency will issue 1,000 fewer research grants this year (NYT, Dec. 21, 2004).

• Foreign applications to U.S. grad schools declined 28% last year. Foreign student enrollment on all levels fell for the first time in three decades, but increased greatly in Europe and China. Last year Chinese grad-school graduates in the U.S. dropped 56%, Indians 51%, South Koreans 28% (NYT, Dec. 21, 2004). We're not the place to be anymore.

• The World Health Organization "ranked the countries of the world in terms of overall health performance, and the U.S. [was] ... 37th." In the fairness of health care, we're 54th. "The irony is that the United States spends more per capita for health care than any other nation in the world" (The European Dream, pp.79-80). Pay more, get lots, lots less.

• "The U.S. and South Africa are the only two developed countries in the world that do not provide health care for all their citizens" (The European Dream, p.80). Excuse me, but since when is South Africa a "developed" country? Anyway, that's the company we're keeping.

• Lack of health insurance coverage causes 18,000 unnecessary American deaths a year. (That's six times the number of people killed on 9/11.) (NYT, Jan. 12, 2005.)

• "U.S. childhood poverty now ranks 22nd, or second to last, among the developed nations. Only Mexico scores lower" (The European Dream, p.81). Been to Mexico lately? Does it look "developed" to you? Yet it's the only "developed" country to score lower in childhood poverty.

• Twelve million American families – more than 10% of all U.S. households – "continue to struggle, and not always successfully, to feed themselves." Families that "had members who actually went hungry at some point last year" numbered 3.9 million (NYT, Nov. 22, 2004).

• The United States is 41st in the world in infant mortality. Cuba scores higher (NYT, Jan. 12, 2005).

• Women are 70% more likely to die in childbirth in America than in Europe (NYT, Jan. 12, 2005).

• The leading cause of death of pregnant women in this country is murder (CNN, Dec. 14, 2004).

• "Of the 20 most developed countries in the world, the U.S. was dead last in the growth rate of total compensation to its work-force in the 1980s. ... In the 1990s, the U.S. average compensation growth rate grew only slightly, at an annual rate of about 0.1%" (The European Dream, p.39). Yet Americans work longer hours per year than any other industrialized country, and get less vacation time.

• "Sixty-one of the 140 biggest companies on the Global Fortune 500 rankings are European, while only 50 are U.S. companies" (The European Dream, p.66). "In a recent survey of the world's 50 best companies, conducted by Global Finance, all but one was European" (The European Dream, p.69).

• "Fourteen of the 20 largest commercial banks in the world today are European. ... In the chemical industry, the European company BASF is the world's leader, and three of the top six players are European. In engineering and construction, three of the top five companies are European. ... The two others are Japanese. Not a single American engineering and construction company is included among the world's top nine competitors. In food and consumer products, Nestlé and Unilever, two European giants, rank first and second, respectively, in the world. In the food and drugstore retail trade, two European companies ... are first and second, and European companies make up five of the top 10. Only four U.S. companies are on the list" (The European Dream, p.68).

• The United States has lost 1.3 million jobs to China in the last decade (CNN, Jan. 12, 2005).

• U.S. employers eliminated 1 million jobs in 2004 (The Week, Jan. 14, 2005).

• Three million six hundred thousand Americans ran out of unemployment insurance last year; 1.8 million – one in five – unemployed workers are jobless for more than six months (NYT, Jan. 9, 2005).

• Japan, China, Taiwan, and South Korea hold 40% of our government debt. (That's why we talk nice to them.) "By helping keep mortgage rates from rising, China has come to play an enormous and little-noticed role in sustaining the American housing boom" (NYT, Dec. 4, 2004). Read that twice. We owe our housing boom to China, because they want us to keep buying all that stuff they manufacture.

• Sometime in the next 10 years Brazil will probably pass the U.S. as the world's largest agricultural producer. Brazil is now the world's largest exporter of chickens, orange juice, sugar, coffee, and tobacco. Last year, Brazil passed the U.S. as the world's largest beef producer. (Hear that, you poor deluded cowboys?) As a result, while we bear record trade deficits, Brazil boasts a $30 billion trade surplus (NYT, Dec. 12, 2004).

• As of last June, the U.S. imported more food than it exported (NYT, Dec. 12, 2004).

• Bush: 62,027,582 votes. Kerry: 59,026,003 votes. Number of eligible voters who didn't show up: 79,279,000 (NYT, Dec. 26, 2004). That's more than a third. Way more. If more than a third of Iraqis don't show for their election, no country in the world will think that election legitimate.

• One-third of all U.S. children are born out of wedlock. One-half of all U.S. children will live in a one-parent house (CNN, Dec. 10, 2004).

• "Americans are now spending more money on gambling than on movies, videos, DVDs, music, and books combined" (The European Dream, p.28).

• "Nearly one out of four Americans [believe] that using violence to get what they want is acceptable" (The European Dream, p.32).

• Forty-three percent of Americans think torture is sometimes justified, according to a PEW Poll (Associated Press, Aug. 19, 2004).

• "Nearly 900,000 children were abused or neglected in 2002, the last year for which such data are available" (USA Today, Dec. 21, 2004).

• "The International Association of Chiefs of Police said that cuts by the [Bush] administration in federal aid to local police agencies have left the nation more vulnerable than ever" (USA Today, Nov. 17, 2004).

No. 1? In most important categories we're not even in the Top 10 anymore. Not even close.

The USA is "No. 1" in nothing but weaponry, consumer spending, debt, and delusion.

Originally published January 21, 2005


Friday, March 11, 2005



The Bush administration claims to be committed to " reducing illegal drug use
( among teens."
You be the judge. In his latest budget, President Bush is pushing to
slash funds for the High Density Drug Trafficking Area program -- a
program which fights drug trafficking in the nation's toughest neighborhoods
-- by more than half, from $228 million to just $100 million. Police
chiefs and anti-drug agency heads expressed outrage over the cuts at a
House hearing yesterday. Sheriff Jack Merritt, of Green County, Illinois,
for example, testified: "My ability to work drug task forces, fight
crime and protect my constituents -- our constituents -- would be
devastated if the proposed reductions were to be enacted into law." Phoenix
Police Chief Jack Harris concurred, saying, "In Arizona alone, I know
several law enforcement agencies will not be able to continue" support for
the program. It's part of an overall pullback on vital programs to
treat drug problems in the United States today. Bush has also fought to cut
funds for a program to fight methamphetamine use
by 60 percent and totally eliminated the Safe and Drug Free Schools
program, which "provides money to reduce drug use and violence among




A Feb. 5 memorandum from Defense Secretary Donald H. Rumsfeld counsels support for a plan to transfer hundreds of suspected terrorists
from Guantanamo Bay, Cuba, to prisons in Saudi Arabia, Afghanistan and
Yemen. The transfers would be similar to the "renditions, or transfers
of captives to other countries, carried out by the Central Intelligence
Agency," a policy that exposes prisoners to abuse and violates the
international Convention Against Torture
( (Article 3). Reports
indicate the administration has already shipped prisoners off
to Syria
and Egypt, both of which are cited for their abuse of human rights and
poor treatment of prisoners in the State Department's Human Rights
Reports ( released
last month. Rumsfeld appears to be trying to convince officials from the
State and Justice departments to go along with the plan. Those agencies
have "resisted some previous handovers, out of concern that
transferring the prisoners to foreign governments could harm American security or
subject the prisoners to mistreatment



Senators yesterday expressed dismay and outrage
over the fact that no senior Pentagon officials have been held
accountable in the rampant cases of abuse at the Abu Ghraib prison in Iraq. Now
there's a new wrinkle. New, secret documents obtained by the Washington
Post show "top military intelligence officers at the Abu Ghraib prison
came to an agreement
with the CIA to hide certain detainees at the facility without
officially registering them." Keeping prisoners hidden, off the books, is in
direct violation of international law. There have been reports of at least
100 "ghost" detainees held in prisons in Iraq, but the Pentagon
previously said they must have just fallen through the cracks and weren't part
of any official arrangement. Now, however, Army Lt. Col. Steven L.
Jordan, second in command of intelligence gathering at Abu Ghraib, told
investigators that his superior, Col. Thomas M. Pappas, put in motion a
secret procedure in November 2003 to keep detainees off the books for the
CIA. Pappas told investigators that Jordan was the one who facilitated
the arrangement with the CIA in the first place.


Kofi Annan: Britain / U.S. compromising human rights
Annan attacks erosion of rights in war on terror

US and Britain in UN secretary general's sights
Jonathan Steele
Friday March 11, 2005

The UN secretary general, Kofi Annan, launched a fierce attack on Britain and the US yesterday for weakening human rights in the name of the war on terror.

"We cannot compromise on core values," he said in Madrid on the first anniversary of the train bombings that killed 191 people in the Spanish capital. "Human rights and the rule of law must always be respected."

Addressing a three-day conference which included about 20 heads of state and government as well as terrorism experts, lawyers and journalists, Mr Annan laid out five elements in what he called a "principled, comprehensive strategy" to fight terrorism.

He proposed a UN special envoy to monitor whether governments' counter-terrorism measures conformed to international human rights law.

"Compromising human rights cannot serve the struggle against terrorism," he said. "On the contrary, it facilitates the achievement of the terrorists' objectives by provoking tension, hatred, and mistrust of governments among precisely those parts of the population where he is most likely to find recruits."

Although he did not mention Britain's detention of suspects without trial, the use of torture, or the practices of sexual humiliation and other abuses uncovered at US-run prisons for foreigners, western governments' treatment of terrorist suspects was unmistakably one of Mr Annan's targets.

Human rights law already made ample provision for strong counter-terrorist action, "even in the most exceptional circumstances", he said.

Mr Annan appealed to the world's political, religious, and civic leaders to state unequivocally that "terrorism is unacceptable under any circumstances and in any culture".

Rounding on the argument that oppressed people had a right to resist occupation, he said this could not include the right to deliberately kill or maim civilians.

He said the root cause of terrorism was the belief by certain groups that such tactics were effective and had the support of people in whose name they were used. "Our job is to show they are wrong," he said.

Spain's Socialist party prime minister, José Luis Rodriguez Zapatero, speaking at the closing session, called for an international fund to give poorer countries financial help to fight terrorism. He also recommended that a second international fund be set up to compensate victims of attacks.

Since 2001 the UN has been under pressure to do a better job of coordinating and leading the fight against terrorism.

Instead of the 12 treaties that now cover the issue, the secretary general called for a single convention to outlaw terrorism in all its forms. Victims of terrorism should be compensated using the assets seized from terrorists, he said.

The secretary general set out what he called the five Ds: dissuading disaffected groups from terrorism; denying terrorists the means to carry out their attacks; deterring states from supporting terrorists; developing states' capacity to prevent terrorism; and defending human rights.

Calling for a universally accepted definition of terrorism, he endorsed the wording contained in the recent report from the UN High-level Panel on Threats, Challenges and Change, which he asked to develop broader thinking on the threats to security other than war. The panel defined terrorism as any action intended to cause death or serious bodily harm to civilians or non-combatants with the purpose of intimidating a population or compelling a government or an international organisation to do, or abstain from, any act.

Mr Annan drew an alarming picture of potential catastrophe in the fields of nuclear and biological terrorism. There would soon be "tens of thousands of laboratories around the world capable of producing designer bugs with awesome, lethal potential", he said. Health systems in poor countries equipped to deal with infectious disease barely existed.

Governments must do more to secure and eliminate hazardous material and set up effective export controls, Mr Annan said. Stronger measures were also needed to uncover and stop money laundering by terrorists. Travel and financial sanctions against groups such as al-Qaida were vital.

Nuclear terrorism was still often treated as science fiction, he said. "I wish it were. But unfortunately we live in a world of excess hazardous materials and abundant technological knowhow, in which some terrorists clearly state their intention to inflict catastrophic casualties."


Sen. Obama: Privatization pitch offensive to blacks

Obama finds Bush's pitch 'offensive'

March 11, 2005

BY LYNN SWEET Sun-Times Washington Bureau Chief

WASHINGTON -- Sen. Barack Obama (D-Ill.) said Thursday that President Bush's argument for African Americans to support his Social Security plan is "offensive."

Bush is courting African Americans with the pitch that the Social Security system is unfair to black men because of their shorter life expectancy.

Obama said the notion that Bush would tailor his Social Security appeal to blacks by talking about their shorter lifespans -- without linking it to the causes of the death rate -- was "stunning'' and "puzzling.''

Obama said he would prefer the president not frame his Social Security argument "in racial terms.'' Obama's strong words may have special significance since he is the only African-American senator.

Last Jan. 11 at a White House forum on Social Security, Bush said "African-American males die sooner than other males do, which means the system is inherently unfair to a certain group of people. And that needs to be fixed.''

Bush is traveling across the country to win backing for his proposal to divert a portion of Social Security payroll taxes to fund individual investment accounts. Democrats oppose the creation of these private, or personal, accounts and said they will not deal with any presidential proposal until they are taken off the table.

"I frankly found the statement that the president made somewhat offensive,'' Obama said at a press briefing with Sen. Dick Durbin (D-Ill.), focusing on the impact the creation of individual investment accounts would have on blacks.

"There is no doubt a disparity in the lifetime opportunities between white America and black America. And that is something that everybody at this table is committed to closing,'' Obama said.

Group: Blacks get a lousy deal

He criticized what he said was the cynical use of disparities as a reason to dismantle Social Security. Instead, people should be talking "about how are we going to close the health disparities gap that exists, and make sure that African-American life expectancy is as long as the rest of this nation."

"The notion that we would not be talking about lack of health insurance, and reducing diabetes, and reducing incidents of AIDS, and making sure that African Americans have the wealth and the income to save into retirement and supplement Social Security is stunning to me."

Maya Rockeymoore, a vice president of research and programs at the Congressional Black Caucus Foundation, said at the briefing that Social Security survivor and disability benefits -- which are part of the package that includes retirement payments -- are used by African-American families and the conversation about change should deal with all three aspects of the program.

Stephen Moore, president of the Free Enterprise Fund, which is backing Bush's bid for investment accounts, defended the approach. "I think the Republicans should go into the black communities and let people know what a lousy deal they get from Social Security."

Obama, Moore said, did not take issue with the "fundamental truth'' that there is a racial death rate disparity.

"This is not about why the life expectancy is lower," Moore said. "It is about the fact of life that blacks do die at younger ages and they get a relatively worse deal out of Social Security than whites."

Said Obama, "This is as if the president is arguing for privatization of fire protection because our houses aren't worth as much as houses in rich neighborhoods. Or maybe we could privatize police protection because if we get robbed, our stuff is not as nice. It defies logic.''


CBO trashes Bush's budget


"Over the 10-year period from 2006 through 2015, deficits would total
$2.6 trillion under the President's budget -- $1.6 trillion higher than
... [the current] projection." -- Congressional Budget Office, 3/4/05


Bad Bill passes in Senate


Seventy-four senators
voted in favor of the much-maligned, anti-consumer bankruptcy bill
yesterday. The bill now heads to the House of Representatives, where
passage is a certainty.


The Fix Isn't In


The Fix Isn't In

Speaking in Alabama yesterday, President Bush repeated a familiar
claim: " We're fixing the deficit
( ." It
doesn't matter how many times he says it -- it's still not true. In
fact, the president's most recent proposed budget would make the federal
deficit much worse. A March 4 analysis by the nonpartisan Congressional
Budget Office (CBO) reveals the president's budget would increase the
deficit by $1.6 trillion over the next ten years
( . Most of the
additional shortfall is a result of Bush's proposal to extend his 2001 and
2003 tax cuts for the rich. According to the CBO, new tax cuts proposed
by Bush " would increase the deficit by more than $1.5 trillion
( in 2006 through 2015." Even these
bleak numbers understate the scope of the fiscal crisis. The president's
budget excludes all costs for continued operations in Iraq and
Afghanistan -- expected to cost at least $300 billion over the next 10 years --
and so do the CBO estimates. The fact is, President Bush's policies are
leaving an enormous tab that future generations will have to pick up.
And he's not being honest about it. (Share your views on the president's
budget on (

FROM BAD TO WORSE IN THE SENATE: Astoundingly, right-wing ideologues in
the Senate have taken President Bush's uncompassionate, fiscally
irresponsible budget and are making it worse. For example, the president has
already drawn "sharp criticism from the nation's governors" for
proposing $7.6 billion in cuts to health care funding for the poor (Medicaid)
over the next five years. Now, the chairman of the Senate Finance
Committee is pursuing measures that could cut Medicaid by up to "$15
billion over five years. ( " Nevertheless,
the Senate plan still makes the deficit worse because tax cuts, along
with increases in discretionary spending for defense and international
affairs, "more than offset the proposed cuts in domestic programs." In
fact, over a five-year period, the Senate plan, which adds $130 billion
to the deficit, is actually worse than the president's plan, which adds
a mere $104 billion over five years
( .

EVEN WORSE IN THE HOUSE: The only thing more irresponsible than the
Senate proposal is the House proposal. The right-wing establishment in the
House is pushing to cut health care funding for the poor by as much as
$20 billion ( and nutrition
programs for low-income families by as much as $5.3 billion. An additional
$15 billion is slated to be cut from other essential programs for
low-income Americans, like child care and disability assistance. Nevertheless,
the House proposal provides for nearly $36 billion more in tax cuts for
wealthy investors than the Senate. Like the president's plan and the
Senate proposal, it also adds to the budget deficit by over $100 billion
over the next five years.

priorities of the president and his right-wing allies are completely
out of step with the rest of the country
. A recent poll conducted by the Program on International Policy
Attitudes (PIPA) found that Americans who were "presented a breakdown of the
major areas of the proposed discretionary budget and given opportunity
to redistribute it ... made major changes." Specifically, respondents
favored "a significant reallocation toward deficit reduction, and
increases in spending on education, job training, reducing reliance on oil
and veterans." Respondents favored increasing funding for the U.N. and
U.N. peacekeeping "an average of 207%, or $4.8 billion." Meanwhile, 63
percent "favored rolling back tax cuts for people with incomes over
$200,000. Large majorities also favored cutting funding that financed "the
capability for large scale nuclear wars, the number of nuclear weapons,
and spending on developing new types of nuclear weapons."


Misinformation Mania


Misinformation Mania

With White House privatization plans seemingly locked in a tailspin
( ,
conservatives are winding up their mighty howitzer of misinformation
with one goal in mind: confusing Americans about the fundamental choices
regarding retirement security. Some of their claims are so outlandish
that a rebuttal seems unnecessary -- take the new study blaming Social
Security for hastening the decline of marriage
, or President Bush's claim yesterday that private accounts would "
provide a safety net for future retirees
( ." Others have the
potential to seriously mislead Americans about the president's plans.
Below are five seriously specious claims to watch out for:

RED HERRING ALERT -- THE "ADD-ON" MYTH: Last Friday, President Bush
blurted "out something that sounded an awful lot like news" when he
described his version of private accounts as "an add-on to that which the
government is going to pay you." The truth: the "add-on" model of private
accounts -- creating an additional program completely apart from Social
Security -- is the polar opposite of the president's risky "carve-out"
privatization scheme
( ,
which funds private accounts by raiding current Social Security payroll
taxes. To see what a real add-on program looks like, see this report by
American Progress fellow Gene Sperling
( .

weekly e-mail, privatization pusher Rep. Allen Boyd (D-FL) claimed that
"Many who oppose reforming the Social Security program have falsely
claimed that personal accounts would lead to the privatization of Social
." Sorry, but that line shouldn't fool anyone. "Personal" accounts
carved out of Social Security are precisely what economists, analysts, and
politicians -- including President Bush
( -- have always meant by

of President Bush
offered up so-called "compromise" plans, attempting to corral pro-Social
Security progressives who are actually interested in seriously
addressing retirement security. A closer look reveals the plans are merely "
Tangerine and Strawberry phase-out [plans] to be added to the plum
version the president has already put on the table
." Like the president's plan, both include massive, budget-busting
transition costs, cuts to traditional Social Security benefits, and risky
private accounts (One plan even raises the normal retirement age to 72
years old!).

firmly dedicated to pushing privatization. He continues to repeat the
mantra that " all options are on the table
( ,"
suggesting yesterday that he was the first president in history to take
such an approach. The truth: The only option now on the table is the
phase-out of Social Security through private accounts. Just this week, top
White House economic adviser Allan Hubbard "rejected as ' absolutely a
( '
bipartisan proposals that the administration put aside its drive" to
create private accounts in favor of "add-on" versions.

RED HERRING ALERT -- "IT'S ABOUT THE SOLVENCY": Hubbard also claimed on
Monday that " President Bush's No. 1 goal is passing legislation that
permanently solves the solvency problem
( ."
Looks like Hubbard spoke too soon. Earlier this week, Government
Accountability Office chief David Walker testified before the House Ways and
Means Committee that the president's private accounts " wouldn't shore
up the system
( "
and would actually " 'exacerbate' the system's problems
and accelerate the date for when it would start spending more on pension
benefits than it receives in annual revenue."


Thursday, March 10, 2005

The New and Improved Cold War
The New and Improved Cold War

March 08, 2005
Sara Townsley
Ah, the Soviets. Who doesn't miss 'em? The era of global terrorist networks is almost enough to make me nostalgic for the halcyon days of mutually assured destruction. I fondly recall how my high school government teacher danced a jig on his desk the day the Berlin Wall came down, bursting with glee at the demise of the "Russian commie pinko freaks," as he commonly referred to them. But is the Cold War really over?

Recent developments in the Soviet Union -- I mean, ah, Russia -- suggest that the same old evil empire is up to the same old tricks. From the suppression of political freedom, to consolidation of state control over the press, to convulsions of renewed anti-Semitism, the stink of recycled Communist totalitarianism hangs thick in the air. Of particular concern is Putin's support for our enemies and flagrant disregard for U.S. security, in what's shaping up to feel like a good old-fashioned proxy war.

Vladimir Putin served 16 years in the KGB, much of which was spent in the Soviet satellite state of East Germany. Later, Putin was head of the umpteenth iteration of the KGB, the FSB, for the year prior to succeeding Boris Yeltsin as President of Russia in 1999. Like many wistful, jealous autocrats whose primary strategy to regain past glory is to undermine everything the U.S. does (I'm looking at you, Eurabia), Putin seems real cheerful about antagonizing our interests at every possible turn.

The re-Sovietization trend is apparent both domestically and abroad. After the Beslan massacre, Putin's "anti-terror" measures included eliminating elections for regional governorships, as well as restraining parliamentary democracy at the national level. A few weeks ago, Moscow officials announced that new statues of Stalin would be erected in Moscow and near the Ukrainian border.

Curiously, this announcement came just after Viktor Yuschenko, a Western-oriented democrat, won the election for Prime Minister in the Ukraine -- defeating the "ex"-Soviet incumbent, Viktor Yanukovich. This rehabilitation of Stalin came shortly after it emerged that the KGB -- I mean, the FSB -- was likely involved in the attempt to "neutralize" Yuschenko in September by poisoning him with an odd choice of toxins. A statue of Stalin looming over the border will serve as a silent reminder to disobedient Ukrainians of the Great Famine of the 1930s, in which Stalin starved over six million of his own people.

And the Soviets -- I mean, Russians -- aren't playing any nicer on the international scene. Putin's opposition to the Iraq war was comprehensible only from the standpoint of Soviet spheres of influence, as the Middle East was traditionally the U.S.S.R.'s stomping grounds. After watching young conscripts get ground up in Afghanistan for nine years, Putin might have felt a tad unmanned when our guys took the place in three weeks. While one can only speculate as to Putin's motivations, the global war on terror has witnessed a revival of the traditional Soviet objective of subverting U.S. security.

Right up to and even after the Iraq war was underway, our Russian "friends" were arming Saddam, all in brazen violation of U.N. Security Council resolutions. Prior to the invasion, Russian military advisors were on the ground to shred records of arms deals, and to help Saddam prepare his defenses.

Besides plenty of Soviet (pre-1991) munitions, U.S. troops found all kinds of interesting Russian military equipment in Iraq when we arrived in 2003. Russian GPS jammers ringed Baghdad, and Russian night vision goggles and anti-tank guided missiles helped add to the U.S. body count.

Just last week, John Shaw, the former deputy undersecretary for international technology security, confirmed that Russian Spetsnatz units moved WMDs out of Iraq before the war, stashing Saddam's arsenal in Syria and Lebanon. This matches satellite surveillance that showed extensive large-vehicle traffic crossing the Syrian border prior to the war. And, Saddam paid kickbacks to at least 46 Russian companies and individuals out of Oil-For-Food proceeds.

Russia's support for a nuclear Iran is even more disturbing. As one report puts it, Putin has "undertaken to secure all of Iran's nuclear industry from top to bottom -- from the installation of sophisticated equipment to military planning and operational cooperation -- against American or Israeli attack," to include nuclear facilities, laser complexes, radars and two surveillance satellites to be launched on Iran's behalf next month. But Iran has been a Soviet client state of sorts since the Islamic Revolution in 1979, so maybe we shouldn't be so surprised.

Now that Russia has seen the Bushehr and Isfahan projects to completion, they've agreed to supply Iran with nuclear fuel. In exchange, the Iranians are to return the spent fuel to Russia, which could otherwise be processed to manufacture weapons. Just two days ago, Iran announced that it has indeed been pursuing a secret nuclear program -- though they comically maintain, and Eurocrats comically believe, that it's for "peaceful" purposes. Expect lurid headlines about the Wacko Jacko trial while truckloads of spent fuel never make it back to Russia.

Finally, it wouldn't be the Cold War without some cloak-and-dagger intrigue. Until last month, we had a mole inside Iranian President Mohammed Khatami's office who was able to transmit, in real-time, the innermost discussions of the mullahs. And they weren't talking about how much vaccum-cleaning their wives could do with peaceful nuclear energy. The head of the Cultural Heritage Council, and his family, are likely on the run, if not murdered by now. Who outed him? One seasoned analyst suspects the Russians -- or the French.

Putin's recent meeting with President Bush in Bratislava ended with the usual diplomatic charade. Putin reaffirmed his view that North Korea and Iran should not have nuclear weapons, and ruled out any turn toward totalitarianism. Well, that's a relief. For a minute there, I almost thought the Soviet Premier -- I mean, the Russian president -- can't be trusted.

Sara Townsley is a graduate student in BMCB.


Ruling on '.us' Domain Raises Privacy Issues
Ruling on '.us' Domain Raises Privacy Issues

By David McGuire Staff Writer

People who own Internet addresses ending in ".us" will no longer be allowed to keep their personal contact information private, a move that has drawn objections from some consumer advocates and from companies that sell third-party Web registrations.

The decision, issued by the Commerce Department in February, bans the practice whereby Web site operators pay a "proxy" company to register an Internet address for them. Instead, people who own .us addresses must provide their phone numbers and street addresses for listing in publicly searchable databases by January 2006 or lose their registrations.

Each country has its own two-letter domain -- like .uk in England, .de in Germany or .tv in Tuvalu -- and sets the policies for registration. The United States restricted .us registrations to city and state governments and other official entities until 2002, when it opened the domain to all U.S. citizens and businesses.

The federal agency that oversees the domain maintains that the decision, handed down in February, is not a change, but simply a clarification of its existing policies. "The U.S. Department of Commerce has never authorized or permitted the offering of proxy or anonymous domain-registration services in the .us addressing space," National Telecommunications and Information Administration spokesman Clyde Ensslin said in a prepared statement.

But opponents say the decision is a step backward in the fight to preserve the privacy rights of Internet users.

"This is a very disappointing development for consumers and for privacy," said Alan Davidson, associate director of the Center for Democracy and Technology, a Washington-based advocacy group. "Proxy registrations have been viewed as a sensible market-based solution to allow people to keep their privacy, but still gives law enforcement what they need. One would hope that the United States would be leading the way with the best practices in this area, but instead the U.S. government is continuing to ignore the privacy interests of registrants."

"We've always believed that that [proxies are] important in order to protect the privacy of free speech," said Lee Tien, senior staff attorney for the Electronic Frontier Foundation. "Being able to speak through a proxy, particularly if you're a human-rights dissident in a third-world country, can mean the difference between life and death. For .us it may not be as important, but it sets a bad precedent for Internet speech all around."

Bob Parsons, president of Scottsdale, Ariz.-based registrar GoDaddy, said his biggest fear is that the new rule will be viewed as a test case for similar policies in more popular domains like .com and .net, which account for nearly 40 million Web addresses registered worldwide. There are approximately 900,000 .us addresses.

The Internet Corporation for Assigned Names and Numbers -- the nonprofit body responsible for worldwide generic domains like .com, .net and .org -- has been debating a change to public-listing rules for several years. General counsel John Jeffrey said ICANN takes no official position on the .us policy change, and had no comment on whether a similar ruling could be forthcoming on generic domains.

NTIA has always required that .us registrants submit accurate contact information. Government investigators, intellectual-property owners and attorneys use these searchable collections of registration data -- known as "whois" databases -- to trace the sources of online fraud and copyright infringement. But in recent years, the companies that sell Internet addresses have offered, for an additional fee of about $9 a year, to list their own contact information in the whois database on behalf of customers who seek anonymity.

Network Solutions and GoDaddy said they make customer information available to official parties, but keep it hidden from casual seekers. "It's not intended to be Switzerland. It's just intended to give law-abiding citizens a right to privacy," Parsons said.

GoDaddy has provided proxy services for 23,000 of the 311,000 .us addresses it has sold, according to the company. Network Solutions, based in Herndon, Va., has sold roughly 78,000 .us addresses and acts as a proxy for 2,500 of them, according to chief executive Champ Mitchell.

Mitchell said that although .us addresses are a "minuscule" part of the company's business, Network Solutions will "do everything in its power" to protect the privacy of its hundreds of thousands of proxy customers in all domains.

Neither company would make any of its proxy customers available for immediate comment. Parsons said he has been discussing the policy on his blog at and that some users have e-mailed him expressing fear that their personal data will be made public.

Mitchell and Parsons said they will appeal to the Commerce Department and to Congress to overturn the decision before it takes full effect in January.

Although the Commerce Department has allowed .us site operators the rest of the year to supply their names for the whois database, registrars were required to stop selling .us proxy services by Feb. 16. Companies that did not comply must do so by today or risk losing their accreditation to sell .us addresses.

All registrars who were offering the proxy service have agreed to comply, according to Jeff Neuman, NeuStar's director of law and policy. Neither Neuman, who issued the order on behalf of the Commerce Department, nor the NTIA would reveal how many registrars were affected by the decision.

originally published Friday, March 4, 2005


U.S. Citizens' Data Possibly Compromised

1010 WINS
Mar 9, 10:31 PM EST

U.S. Citizens' Data Possibly Compromised

Associated Press Writer

NEW YORK (AP) -- Using stolen passwords from legitimate customers, intruders accessed personal information on as many as 32,000 U.S. citizens in a database owned by the information broker LexisNexis, the company said.

The announcement Wednesday comes on the heels of a series of similar high-profile breaches, the most serious affecting another large data broker, ChoicePoint Inc. in which scores of identities were stolen.

The ChoicePoint case, as well as other data losses including one affecting some 1.2 million federal employees with Bank of America charge cards, have prompted an outcry for federal oversight of a loosely regulated commercial sector. In the data-brokering business, sensitive data about nearly every adult American is bought and sold.

The first in a series of Capitol Hill hearings are scheduled for Thursday.

At LexisNexis, criminals found a way to compromise the log-ins and passwords of a handful of legitimate customers to get access to the database, said Kurt Sanford, the company's chief executive, told The Associated Press.

The FBI and the Secret Service are both investigating the breach.

The database that was compromised, called Accurint, sells reports for $4.50 each that include an individual's Social Security number, past addresses, date of birth and voter registration information, including party affiliation.

No credit history, medical records or financial information were accessed in the breach, LexisNexis parent company Reed Elsevier Group PLC said in a statement.

The Accurint database is part of the Seisint unit, which LexisNexis bought in August. Sanford said a team examining Seisint's data security routines in February noticed abnormal usage patterns and suspicious billing on some accounts.

He said the team told superiors, who notified law enforcement. Both internal and external investigations continue, he said.

"What we're doing now is trying to act as quickly and responsibly as possible to lend a helping hand to consumers who might have been adversely impacted by these incidents," Sanford said.

Sanford refused to name the law agencies involved, saying that could only compromise the investigation: "We are trying to catch the bad guys here."

But the FBI and Secret Service confirmed they were investigating, though they declined to discuss whether any cases of identity theft have resulted from the breach or discuss any other specifics.

LexisNexis said it would be notifying affected customers in the coming days. It will provide them with ongoing credit monitoring "and other support to ensure that any identity theft that may result from these incidents is quickly detected and addressed," it said. LexisNexis said it was also tightening up password and login procedures.

Boca Raton, Fla.-based Seisint stores millions of personal records, including information on bankruptcies, corporate affiliation, drivers licenses, neighbors and criminal records. Customers include police, lawyers and businesses.

LexisNexis paid $775 million for Seisint, which also provides data for Matrix, a crime and terrorism database project created in 2002 and funded by the U.S. government. Thirteen states originally were to participate but most later pulled out, citing citizen privacy and other concerns. Seisint was founded by a millionaire, Hank Asher, who stepped down from its board of directors last year after revelations of past ties to Bahamian drug smugglers.

Word of the Seisint breach follows the embarrassing disclosure Feb. 15 of a breach at rival data broker ChoicePoint Inc. that the company said involved as many as 145,000 Americans. In the scam, thieves posing as small business customers gained access to the company's database and at least 750 people were defrauded, authorities say.

ChoicePoint's vice president, Don McGuffey, is expected to testify Thursday at a Senate hearing on identity theft. The chairman of the Federal Trade Commission, a representative from the Secret Service and a Bank of America executive also are to appear before the Senate Banking, Housing and Urban Affairs Committee.

Sen. Bill Nelson, D-Fla., introduced legislation Wednesday that would impose tighter requirements on the industry. The ChoicePoint case only became known when the company heeded California law by notifying affected citizens of that state that their personal information had been compromised.

California is the only state with such a law.


AP investigative researcher Randy Herschaft and AP writers Curt Anderson, Jeff McMurray and Cat


Journalists Push for Government Openness

1010 WINS
Mar 9, 11:58 PM EST

Journalists Push for Government Openness

Associated Press Writer

WASHINGTON (AP) -- The Associated Press and seven journalism organizations are joining forces to promote policies aimed at ensuring government is accessible, accountable and open.

The Sunshine in Government Initiative seeks to combat what the member organizations see as increased government secrecy since the 2001 terrorist attacks. The coalition will lobby for legislation and seek to educate the public about First Amendment issues.

"National security depends on public trust," AP President and CEO Tom Curley said. "The trend toward secrecy is the greatest threat to democracy. We must be vigilant at explaining and fighting for accountable government in every jurisdiction."

The initiative was announced ahead of "Sunshine Week," a weeklong campaign for government openness spearheaded by the AP and more than 50 news outlets, journalism groups, universities and the American Library Association.

A bill sponsored by Sens. John Cornyn, R-Texas, and Patrick Leahy, D-Vt., proposes creation of a 16-member advisory commission that would conduct a study to determine ways to speed the release of records under the Freedom of Information Act. Cornyn and Leahy planned to introduce the measure Thursday.

Under the act, government agencies must give the public access to government information unless the information falls under certain exemptions. However, the agencies can decide on their own to disclose the exempted information.

Another bill sponsored by Cornyn and Leahy, called the OPEN Government Act of 2005, seeks to speed release of information sought in FOIA requests, which now can take months or years.

It's been endorsed by the Sunshine Initiative and dozens of interest groups in journalism and across the political spectrum, from the liberal American Civil Liberties Union to the conservative Heritage Foundation.

The Senate Judiciary Committee's subcommittee on terrorism, technology and homeland security plans a hearing on the bill Tuesday.

Witnesses include: Walter Mears, former AP executive editor and Washington bureau chief and Pulitzer prize-winning political writer; Katherine M. "Missy" Cary, assistant attorney general of Texas; Mark Tapscott, director of the Center for Media and Public Policy at the Heritage Foundation; Meredith Fuchs, general counsel of the National Security Archive at George Washington University; and Thomas Susman of the law firm Ropes & Gray.

Andy Alexander, chairman of the American Society of Newspaper Editors' Freedom of Information Committee, said he was pleased the Senate is taking up the issue.

"One of the reasons that we initiated 'Sunshine Week' was to prompt a public discussion on the importance of Freedom of Information," he said. "The fact that there's actually a hearing on the subject after decades of congressional silence is a heartening step."

The seven media organizations involved in the Sunshine Initiative are the American Society of Newspaper Editors, Society of Professional Journalists, Coalition of Journalists for Open Government, National Newspaper Association, Reporters Committee for Freedom of the Press, Radio-Television News Directors Association and the Newspaper Association of America.


On the Net:

Sunshine in Government Initiative:


Texas Dems See Violations in Delay Actions

1010 WINS
Mar 9, 9:29 PM EST

Texas Dems See Violations in Delay Actions

Associated Press Writer

AUSTIN, Texas (AP) -- Several e-mails point to Republican House Majority Leader Tom DeLay's involvement in corporate fund-raising for a political action committee under investigation for alleged election violations, Democrats contend.

The e-mails were from Warren M. RoBold, an indicted fund-raiser for Texans for Republican Majority and DeLay's national political action committee.

The e-mails were entered into evidence in a civil trial last week focusing on the Texas committee's activities in the 2002 state legislative elections.

Cris Feldman, one of the attorneys for the Democrats suing in the civil case, said Wednesday the documents show DeLay was heavily involved in the committee's fund-raising.

"Everyone's known DeLay was involved," Feldman said. "We were surprised to see the extent he was involved in regards to corporate contributors."

In one e-mail from August 2002, RoBold tells John Colyandro, the Texas committee's executive director, to create a "top 10 list of givers" he could ask for a large contribution.

"I would then decide from response who Tom DeLay others should call. If this is more successful, I will do more of them," the e-mail said.

In a September 2002 e-mail between RoBold and Drew Maloney, a Washington lobbyist and former legislative director for DeLay in the House, Maloney said he had two checks from Reliant Energy. "Will deliver to T.D. next week probably," the e-mail said.

In Washington, DeLay said the civil case showed only that he took an interest in the committee he helped create.

"Yes, it was my idea. It was our idea - those of us that wanted to enhance the Republicans that served in the House of Representatives and in the Texas Legislature came up with this idea," he said. "They took the idea and ran with it. I was on the advisory board."

DeLay said that, as an adviser, he agreed the committee should set up a separate account for corporate and campaign contributions: "I thought that was a good idea."

The use of corporate money for political campaigns is illegal in Texas, but it is allowed to cover committee administrative costs. Republicans and Democrats have been feuding over the definition of administrative costs.

Republican victories in 2002 gave the Texas House its first GOP majority since the 1870s - and helped push through a redistricting plan that resulted in a commanding GOP advantage in the state's congressional delegation.

Five Democrats who lost elections filed a civil lawsuit, contending TRMPAC used $600,000 in corporate money for political purposes and didn't report the money to the Texas Ethics Commission, all in violation of state election codes.

RoBold was one of three people indicted by a grand jury in September in a separate criminal investigation into the actions of the political committee. Colyandro also is under indictment in the grand jury investigation.


Wednesday, March 09, 2005

Documents Suggest Bigger DeLay Role in Donations

The New York Times
March 9, 2005
Documents Suggest Bigger DeLay Role in Donations

WASHINGTON, March 8 - Documents subpoenaed from an indicted fund-raiser for Tom DeLay, the House majority leader, suggest that Mr. DeLay was more actively involved than previously known in gathering corporate donations for a political committee that is the focus of a grand-jury investigation in Texas, his home state.

The documents, which were entered into evidence last week in a related civil trial in Austin, the state capital, suggest that Mr. DeLay personally forwarded at least one large corporate check to the committee, Texans for a Republican Majority, and that he was in direct contact with lobbyists for some of the nation's largest companies on the committee's behalf.

In an August 2002 document subpoenaed from the files of the indicted fund-raiser, Warren M. RoBold, Mr. RoBold asked for a list of 10 major donors to the committee, saying that "I would then decide from response who Tom DeLay" and others should call to help the committee in seeking a "large contribution."

Another document is a printout of a July 2002 e-mail message to Mr. RoBold from a political ally of Mr. Delay, requesting a list of corporate lobbyists who would attend a fund-raising event for the committee, adding that "DeLay will want to see a list of attendees" and that the list should be available "on the ground in Austin for T.D. upon his arrival."

Under Texas law, corporations are barred from donating money to state political candidates. The Texas committee acknowledged receiving large corporate donations during the 2002 campaign but always insisted that the money was used for administrative costs, which is legal.

A spokesman for Mr. DeLay, Dan Allen, said that there was nothing in the documents to suggest any impropriety by the majority leader, and that Mr. DeLay's role as an adviser and fund-raiser for Texans for a Republican Majority was well known.

"His being on the advisory board is a well-established fact," Mr. Allen said.

"There are partisans out there who are trying to stretch the role of what he did with Trmpac," he added, using an acronym for the political action committee.

Mr. DeLay, who as majority leader is the second-most-powerful Republican in the House and who is considered his party's most aggressive fund-raiser in Congress, has said that he is not concerned about the grand jury investigation in Travis County, Tex., which includes most of Austin, and has told friends that he had no involvement in the day-to-day fund-raising operations of Texans for a Republican Majority.

Last September, the grand jury indicted two men close to Mr. DeLay: Mr. RoBold, a major fund-raiser for the Texas committee and for Mr. DeLay's national political action committee, Americans for a Republican Majority; and James W. Ellis, the national committee's director and one of Mr. DeLay's closest political operatives. The Texas committee's executive director, John Colyandro, was also indicted.

Prosecutors accused them of being part of a scheme at the committee to funnel large corporate donations illegally to state Republican candidates in the months before the 2002 elections in Texas, in which Republicans took control of the State Legislature.

The 2002 elections in Texas had national significance, since they allowed Republicans to redraw the state's Congressional districts, benefiting Mr. DeLay by solidifying Republican control of the House.

In an interview last week, Ronnie Earle, the Travis County district attorney, would not rule out the possibility of criminal charges against Mr. DeLay, who was a founder of Texans for a Republican Majority and was a member of its advisory board. In recent months, Mr. DeLay has gathered donations for a fund to pay for lawyers to deal with the grand jury investigation and has accused Mr. Earle, a Democrat, of engaging in a partisan effort to "criminalize politics" in Texas.

A lawyer for Mr. RoBold, Rusty Hardin of Houston, said that the documents offered no evidence to suggest any wrongdoing by Mr. RoBold or Mr. DeLay, and that Mr. RoBold continued to believe that Mr. DeLay had only a limited advisory role on Texans for a Republican Majority.

"Warren was just having no contact with DeLay about this," Mr. Hardin said in an interview. "DeLay wasn't directing him."

In one of his more detailed references to Mr. DeLay in the documents, Mr. RoBold seemed to suggest in an e-mailed message on Aug. 19, 2002, that Mr. DeLay would follow the committee's direction in fund-raising, not direct the fund-raising himself.

"John," he wrote, referring to Mr. Colyandro, the committee's executive director. "Create a top 10 list of givers and let me call them to ask for large contribution. I would then decide from response who Tom DeLay others should call. If this is successful than I will do more of them."

Many of the records provided by Mr. RoBold are printouts of e-mailed messages that have spelling and grammatical errors.

Cris Feldman, a lawyer for the Democratic candidates, said he believed that the newly revealed documents from Mr. RoBold were eye-opening.

"We always knew Tom DeLay was involved," Mr. Feldman said, "but we never realized the extent to which he was involved in fund-raising directly with corporations."

One of the most intriguing documents, he said, was a printout of a September 2002 e-mail exchange between Mr. RoBold and Drew Maloney, a Washington lobbyist who is Mr. DeLay's former legislative director and administrative assistant in the House.

Mr. Maloney, who has lobbied on behalf of Reliant Energy, the Houston-based energy company that was a major contributor to Texans for a Republican Majority, offered Mr. RoBold a list of possible corporate donors to the Texas committee, adding: "I finally have the two checks from Reliant. Will deliver to T.D. next week."

The Texas committee's donation records show that it received a check for $25,000 from Reliant that month. The existence of some of the documents in Mr. RoBold's files was first reported last month by The Austin American-Statesman.

In a telephone interview on Tuesday, Mr. Maloney said he could not recall many of the details of the Reliant donations or whether checks from Reliant were ever transferred to the Texas committee through Mr. DeLay's office in Washington.

"I don't think it was necessarily meant that he'd get them himself," he said. "I don't know how that all flowed."

Mr. Allen, Mr. DeLay's spokesman, said he had no knowledge about whether Mr. DeLay or anyone in his office had actually received a check from Reliant in 2002 or whether one might have been forwarded to the Texas committee. "That was three years ago," he said.

Mr. Allen also said he saw no significance in the July 2002 e-mail message suggesting that Mr. DeLay wanted a list of lobbyists who would be attending a fund-raising event for the committee. "Only The New York Times would find it odd that any member would want to know who was going to be in a room before they walked into it," Mr. Allen said.

Asked if he had been contacted by prosecutors in Austin or by the grand jury, Mr. Maloney would not comment, saying instead: "I'm not going to get into these witch-hunt allegations. I think there's been enough written on all this stuff."

A spokeswoman for Reliant had no immediate comment on issues raised by the e-mail message.


Think Again: Alan Greenspan

Think Again: Alan Greenspan

By Stephen S. Roach

January/February 2005

U.S. Federal Reserve Board Chairman Alan Greenspan is credited with simultaneously achieving record-low inflation, spawning the largest economic boom in U.S. history, and saving the world from financial collapse. But, when Greenspan steps down next year, he will leave behind a record foreign deficit and a generation of Americans with little savings and mountains of debt. Has the world’s most revered central banker unwittingly set up the global economy for disaster?

“Greenspan Is Responsible for the U.S. Economic Boom of the 1990s”
Only in part. The United States experienced an extraordinary period of prosperity in the 1990s. Between 1993 and 2000, 21 million new jobs were created in the United States, and in 2000 the country’s unemployment rate briefly dipped below 4 percent for the first time in 30 years. During this boom, the U.S. economy grew at nearly 4 percent a year, adding more than $2 trillion to real U.S. gross domestic product (GDP)—more than the annual output of France.

But many stars aligned to produce that outcome, not just good monetary policy on the part of Greenspan’s Fed. For starters, a judicious focus on fiscal discipline by former President Bill Clinton’s administration brought the budget deficit under control. The Clinton administration managed to lower the deficit every year between 1993 and 1997. By 1998, there was a surplus that lasted until 2001. The 1990s also saw a powerful wave of corporate restructuring and technological change. Together, these two forces set the stage for sustained low inflation and a powerful acceleration of productivity and employment growth.

Greenspan’s leadership in monetary policy undoubtedly played an important role in fostering the conditions that allowed the U.S. economy to surge in the 1990s. The chairman helped achieve the economy’s high-performance potential during that time period. But no one should believe that the economic boom of the 1990s was the work of just one man or just one monetary policy.

“Greenspan Defeated Inflation in the United States”
No. Credit for breaking the back of double-digit inflation goes to Paul Volcker, Greenspan’s tough and courageous predecessor. In the summer of 1979, when Volcker assumed the reins at the Federal Reserve, inflation was raging at 12 percent a year. Eight years later, when Alan Greenspan took over, the inflation rate stood at around 4 percent. During Greenspan’s 17-year era, inflation slowed further to 2.5 percent per year. But 80 percent of the drop in inflation occurred under Volcker’s stewardship at the Fed.

True, Volcker put the United States through its worst recession in modern times. It was the only way to unwind the destructive interplay between wages and prices that drove U.S. inflation. Greenspan’s major challenge was to finish the job Volcker started. That was no easy task, and Greenspan’s successes should not be minimized. In only one of Greenspan’s 17 years at the Fed (1990) did inflation move above 5 percent; in 11 of those years, inflation was 3 percent or lower.

But there were serious complications along the way, not least of all a dangerous flirtation with outright deflation, or an overall decline in the price level, in early 2003. This problem resulted from Greenspan’s biggest gamble—a willingness to push U.S. interest rates to extremely low levels during a period of rapid economic growth. The move gave rise to the destabilizing stock market bubble of the late 1990s, a speculative excess unseen in the United States since the roaring 1920s. The bursting of that bubble in early 2000 transformed an orderly disinflation (i.e., when inflation merely decelerates) into a close call with actual deflation.

“Greenspan Rescued the United States from a Stock Market Meltdown”
Maybe, but at what cost? In early 2004, Greenspan gave a speech to the American Economic Association, arguing that the Fed should feel vindicated in its efforts to contain the 2000 stock market shakeout. By slashing the federal funds rate—the interest rate at which the Fed lends money to other banks—by 5.5 percentage points between January 2001 and June 2003, the Fed limited the severity of the recession that followed the burst of the bubble.

That cure may cause bigger problems down the road. Bubbles have developed in other asset markets (especially corporate bonds, mortgage-backed securities, and emerging-market debt). And Greenspan’s rock-bottom interest rates have led to the biggest bubble of all: residential property. Annual inflation in U.S. home prices is now running at a 25-year high of 8.8 percent, with 15 states experiencing double-digit increases in residential property values between mid-2003 and mid-2004.

At the same time, the home-buying and consumption binge has put individual Americans deeply in debt. Greenspan takes comfort that rising home values compensate for increased borrowing, but that rationalization assumes a permanence to rising property prices that belies the long history of volatile asset markets. So far, the Fed and debt-addicted U.S. homebuyers have bucked the odds. Over the last four years, debt accumulated by U.S. families was 60 percent larger than overall U.S. economic growth. Many households in the United States now spend near record-high portions of their monthly incomes on interest expenses, leaving consumers in a precarious position should either interest rates increase or the growth in incomes slow.

History shows that central banks aren’t always able to cope when bubbles burst. That was the case with the Bank of Japan in the 1990s, after the Japanese stock and property markets collapsed, and it could still be the case in the United States today. The United States dodged a bullet when the stock market tanked in early 2000. There are no guarantees that highly indebted Americans will be as lucky the second time around.

“Greenspan Saved the World from the 1997–98 Asian Financial Crisis”
False. Time magazine devoted its February 1999 cover to the “Committee to Save the World.” Featured were then U.S. Treasury Secretary Robert Rubin, then Deputy Secretary Lawrence Summers, and Greenspan, all celebrating the end of the worst global financial crisis in more than 60 years. In truth, the world weathered the Asian financial storm only to chart increasingly dangerous waters in the years that followed.

Global economic imbalances have intensified dramatically since 1999. The United States’ gaping current account deficit says it all—$665 billion in mid-2004, equal to a record 5.7 percent of U.S. GDP. Never in history has the world financed such a massive deficit. The United States is sucking up more than 80 percent of the world’s surplus savings, requiring capital inflows that average $2.6 billion per business day. And the U.S. deficit is bound to get worse before it gets better.

This huge balance-of-payments gap reflects major disparities between global savings and consumption. A savings-starved U.S. economy is living beyond its means, while Asia and, to a lesser extent, Europe, are plagued by low consumption and high savings. Consequently, the United States is now the world’s consumer of last resort. Asian economies, by contrast, are more prone to save and rely on export-led growth strategies, and they are unwilling or unable to stimulate domestic private consumption.

The result is an enormous buildup of U.S. dollars held by Asian nations (more than $2.2 trillion in mid-2004, or twice Asia’s holdings in early 2000). These countries then recycle this cash back into the United States by buying U.S. Treasuries. This process effectively subsidizes U.S. interest rates, thus propping up U.S. asset markets and enticing American consumers into even more debt. Awash in newfound purchasing power, Americans then turn around and buy everything from Chinese-made DVD players to Japanese cars.

This is no way to run the global economy. Asia and Europe are increasingly dependent on overly indebted U.S. consumers, while those consumers are increasingly dependent on Asia’s interest-rate subsidy. The longer these imbalances persist, the greater the likelihood of a sharp adjustment. A safer world? Not on your life.

“Greenspan Was Alone in Foreseeing the Productivity Revolution”
Yes. In the early 1990s, when the United States was mired in a productivity slump, Greenspan was largely alone in believing that an important shift was at hand. He was right. Worker productivity in the United States grew 3 percent a year between 1996 and 2003, double the anemic 1.5 percent annual increase of the preceding 20 years.

The productivity breakthrough had a profound impact on the performance of the U.S. economy, as well as on Greenspan’s command of monetary policy. High-productivity economies can withstand rapid growth without an increase in inflation. So, as U.S. productivity climbed in the late 1990s, Greenspan boldly let the economy fly without raising interest rates. Investors, of course, were thrilled with Greenspan for not standing in the way of rapid economic growth. The stock market bubble of the late 1990s (which he initially warned of, but later ignored) reflected this exuberance. As Greenspan said in early 2000, “When we look back at the 1990s.… [w]e may conceivably conclude…[that] the American economy was experiencing a once-in-a-century acceleration of innovation, which propelled forward productivity, output, corporate profits, and stock prices at a pace not seen in generations, if ever.”

Within two months of that statement, the stock market collapsed, but the productivity miracle did not. Whether it will endure, though, remains an open question. Most U.S. businesses have an advanced it infrastructure. The lack of new corporate hiring and the sharp falloff in business expansion point to ever more hollow American corporations. Moreover, the pendulum is now swinging back toward greater government regulation, further constraining corporate risk-taking. The drivers of the productivity miracle of the past eight years may not be sustainable, after all.

“Greenspan Spells a Strong Dollar”
Not necessarily. Until recently, the dollar has generally been stable during Greenspan’s 17-year tenure, a noteworthy accomplishment for any central banker. An exception came in 1994 and early 1995, when the dollar weakened sharply, only to regain its strength in the latter half of the 1990s.

But the dollar’s past may not be prologue. Global imbalances—underscored by America’s record balance-of-payments gap—are best corrected through a cheaper dollar. A cheaper dollar means higher U.S. interest rates, which in turn will suppress U.S. spending and enable a long overdue rebuilding of national savings. Conversely, other currencies will strengthen, forcing the export-led economies of Asia and Europe to embrace long-overdue reforms, including lowering tariffs and making labor markets more flexible.

Today, even Greenspan acknowledges that the world needs a weaker dollar. That’s the verdict from America’s record (and rising) current account deficit and from Asia and Europe’s excess dependence on exports. The hope, of course, is that the dollar experiences a “soft landing,” a gentle descent over several years. But in light of the massive U.S. current account deficit, the risk of a hard landing is all too real. The more the current account deficit grows, the greater the odds of an abrupt adjustment. The dollar may be an accident waiting to happen, with a sharp decline in the greenback raising the possibility of collateral damage to stocks, bonds, and price stability. Given the central role the United States plays in driving the world economy, any shock “made in the U.S.A.” could reverberate around the world.

“Greenspan Leaves the U.S. Economy in Good Shape for the Future”
The jury is still out. By congressional mandate, the Fed’s goals include price stability, full employment, and economic growth. Greenspan’s Fed has made progress on all three.

However, some unintended consequences of Greenspan’s efforts may jeopardize the United States’ long-term economic future. Consider the profound shortfall in U.S. savings. The United States’ net national saving rate—the combined saving of households, businesses, and government—fell to 0.4 percent of national income in early 2003, and it has since risen to just 2 percent. Lacking in domestic savings, the United States must import savings from abroad and run massive current account deficits to attract that capital.

Greenspan shares some blame for this problem. It all goes back to the asset economy, his often-expressed belief that financial assets can play an important role in sustaining the U.S. economy. He made that argument in the late 1990s when stock prices went to new highs, and he reiterated it recently with regard to surging home prices.

The catch is, people interpret Greenspan’s analysis as advice. So individuals view the appreciation of their home as a proxy for long-term saving and are therefore less inclined to save the old-fashioned way—by putting away cash from their paychecks. This scenario sets U.S. citizens apart from those in most other Western economies. Only in the United States are people aggressively tapping the savings in their homes (through mortgage refinancing) to finance current consumption.

Moreover, the rapid buildup of debt, both domestic and foreign, leaves a savings-short U.S. economy in precarious shape. The problem is compounded by the 77 million aging baby boomers, now approaching their retirement years, when they need savings more than ever. To the extent that Greenspan has condoned asset-based savings (homes) in lieu of income-based savings (cash in the bank), he has unwittingly compounded the United States’ most serious long-term problem.

“Greenspan Is Politically Independent”
Yes, but… Unfortunately, the Federal Reserve is located in Washington, D.C. That thrusts its chairman into the political arena and has led to some indelicate episodes for Greenspan over the years, including his endorsement of the Bush administration’s 2001 tax cuts as the wisest way to spend the government’s budget surplus—a surplus that has now disappeared into thin air.

Despite such momentary lapses, there is no evidence that Greenspan has politicized U.S. monetary policy. Although Greenspan is a Republican (he first entered public service as an advisor to President Gerald Ford in 1974), he had no compunction in raising interest rates on GOP administrations, including the current one, at inopportune times. Over the years, Greenspan has been critical of fiscal policies pursued by Democrats and Republicans alike.

But with Greenspan, the line between politicization and policy activism is blurred. There is no mistaking Greenspan’s aggressive stance on several key issues driving financial debates and policy. In early 2000, Greenspan made a strong (and ultimately wrong) case for why there wasn’t a stock market bubble. More recently, he minimized the immediacy of the United States’ current account deficit problems and played down the risks of an oil shock. And, in October 2004, he dismissed concerns over the United States’ excess household debt.

The sheer weight of Greenspan’s point of view can bear critically on financial markets and the real economy. To the extent that his intellectual activism aligns with Fed policies, investors tend to take Greenspan’s messages too far. This tendency compromises his position as an independent central banker. Moreover, his recent role as a cheerleader for policies such as tax cuts compounds already serious imbalances and imparts a pro-growth bias to his central banking philosophy that could make the endgame all the more treacherous. That was the case with stock buying in the late 1990s and could well be the case today in condoning the household debt binge, overvalued property markets, and Asian demand for U.S. Treasuries. Greenspan’s stances may not be political—nor may they be prudent.

“It Will Be Difficult to Replace Greenspan”
Hardly. Alan Greenspan’s term as a member of the Federal Reserve Board of Governors expires on the last day of January in 2006, at which time he is required to step down. When he does, Greenspan will have served as chairman for more than 18 years under four different presidents, making him the second longest-serving chairman since the founding of the Fed in 1914.

There is understandable apprehension over the transition to new leadership at the Federal Reserve. Business leaders, politicians, and investors expressed similar concerns when the Volcker era came to an end in the summer of 1987. “There is concern in Washington,” Paul Glastris reported in the Washington Monthly in 1988, “that Alan Greenspan sees himself as the new Paul Volcker and that he may seriously damage the economy.” Yet, aside from a small flutter in the financial markets, the U.S. economy barely skipped a beat when Greenspan replaced Volcker. Shepherding the world’s most dynamic economy is not a personal accomplishment. It has more to do with the interplay between markets, consumers, businesses, politicians, and policymakers than any cult of personality a Fed chairman may or may not have.

A key challenge for Greenspan’s successor will be rebuilding private-sector savings. It’s a critical step if the United States is to close its balance-of-payments deficit and an essential insurance policy for an aging population of baby boomers nearing retirement. Although prudent fiscal policy and budget deficit reduction by the U.S. Congress will be part of any fix, the Fed’s monetary policy can also play an important role in fostering a long overdue improvement in national savings.

At the same time, the next Fed chair must be a true internationalist—facing the increasingly daunting challenges of globalization. The United States has enjoyed an unprecedented dominance of the global economy since the mid-1990s. But, like U.S. geopolitical hegemony, its economic dominance is unlikely to last. The next Fed chairman will have to walk a delicate line between domestic imperatives and the challenges posed by other players in the global economy.

History cautions against rendering a premature verdict on the accomplishments of any one economy, or any one central banker. When Alan Greenspan arrived at the Fed in the late 1980s, Japan and Germany dominated the world economy, and the United States was down and out. Over the last 20 years, the fickle pendulum of economic prosperity swung the other way, as the United States redefined the very concept of global economic leadership. Greenspan will be a tough act to follow. But his success was as much an outgrowth of history as it was a reflection of any one person.

Stephen S. Roach is chief economist at Morgan Stanley.


Possible Al Qaeda infiltration worries FBI chief
The Boston Globe
Possible Al Qaeda infiltration worries FBI chief

By Mark Sherman, Associated Press | March 9, 2005

WASHINGTON -- FBI director Robert Mueller told Congress yesterday that people from countries with ties to Al Qaeda have crossed into the United States from Mexico, using false identities.

''We are concerned, homeland security is concerned about special interest aliens entering the United States," Mueller said, using a term for people from countries where Al Qaeda is active.

Under persistent questioning from Representative John Culberson, Republican of Texas, Mueller said he was aware of one route that takes people to Brazil, where they assume false identities, and then to Mexico before crossing the US border.

He also said that in some instances people with Middle Eastern names have adopted Hispanic last names before trying to get into the United States.

Mueller provided no estimate of the number of people who have entered the country in this manner.

Bush administration officials have previously said Al Qaeda could try to infiltrate the United States through the Mexican border.

In recent congressional testimony, Admiral James Loy, deputy Homeland Security secretary, said Al Qaeda operatives believe they can pay to get into the country through Mexico and that entering illegally is ''more advantageous than legal entry."

But Loy said there's no conclusive evidence that Al Qaeda operatives have entered the country via Mexico.

On another topic, Mueller said it will take until 2008 and cost an unknown amount of money to replace a flawed computer system that was supposed to greatly improve management of terrorism and other criminal cases.

The Virtual Case File project was to have been the final piece of the FBI's overhaul of its antiquated computer system.


Recent Information Security Breaches Raise Privacy Concerns

CDT POLICY POST Volume 11, Number 6, March 8, 2005

A Briefing On Public Policy Issues Affecting Civil Liberties Online
from The Center For Democracy and Technology

Recent Information Security Breaches Raise Privacy Concerns

(1) Recent Information Security Breaches Raise Privacy Concerns
(2) Congress Considers Range Of Policy Responses
(3) The Overlooked Issue - Government Access and Use
(4) Congressional Hearings Planned
(5) O'Harrow Book Maps Data Landscape

(1) Recent Information Security Breaches Raise Privacy Concerns

Recent stories about security breaches at ChoicePoint and Bank of
America Corp. and about the accessibility of Social Security Numbers
through WestLaw have renewed concerns regarding the privacy of
personal information, producing a flurry of calls for investigations
and legislation at the state and federal level.

Discerning the appropriate policy response requires parsing the
issues involved, including computer security, the privacy issues
associated with data aggregation and sale, and the crime of identity
theft. Perhaps one of the most important issues is in the background
of recent stories: Under what circumstances and for what purposes
does the government access the growing amount of data compiled by
commercial entities?

The issues go well beyond any of the specific companies involved, but
here are the basic facts: Last month, ChoicePoint announced that
thieves posing as legitimate businesses had purchased access to its
vast database of more than 19 billion public records. ChoicePoint, an
information broker that aggregates and sells personal information to
private companies, law enforcement agencies and the US government,
possesses personal information about virtually every US citizen.
ChoicePoint's security breach affected approximately 145,000 people.
California law requires information brokers like ChoicePoint to
notify California citizens whose personal information has been
stolen. No other state has such a law, but ChoicePoint ultimately
notified all those whose data had been fraudulently purchased and
offered them free credit watch services for one year.

Also last month, Bank of America announced that, in December 2004,
someone stole backup tapes of customer data that it was shipping by
commercial aircraft. These backup tapes contained the Social Security
Numbers and other personal financial information of as many as 1.2
million federal employees, including some members of Congress,
rendering these individuals vulnerable to identity theft.

In the wake of these stories, Sen. Charles Schumer (D-NY) publicly
criticized WestLaw for what he called "egregious loopholes" in its
data services that allow subscribers to obtain Social Security
numbers and other personally identifiable information. WestLaw
responded that it has strict policies that limit access to sensitive
personal information and that such information is not available to
the general public.

(2) Congress Considers Range Of Policy Responses

Lawmakers are exploring a range of policy responses to the issues
posed by these recent breaches and to the broader issues associated
with the dramatic expansion over the past decade of the marketplace
for personally identifiable information. Among the ideas being

- Federal Security Breach Notification: US Senator Dianne Feinstein
(D-CA) has introduced legislation (S. 115), modeled on the California
disclosure law, that would require data brokers and other holders of
sensitive personal information to notify people whose personal
information might have been stolen. [Senator Patrick Leahy (D-VT) has
drafted similar legislation that requires notice of security breaches
and improper access to, or misuse of, personally identifiable
information.] Senator Jon Corzine (D-NJ) is planning to reintroduce
legislation that would require financial institutions to notify
customers, law enforcement agencies and credit agencies in the event
of a security breach that puts customers' data at risk.

Notice aids consumers by allowing them to take protective action when
their data has been compromised and seems to be a step that some in
the information industry would embrace. However, while such
legislation would be helpful in mitigating the damage and might prod
companies to improve security proactively, it would not directly
prevent the theft of personal information nor would it address the
issues associated with government's growing use of commercial data
post 9/11.

- Tighter Controls on Use, and Stiffer Penalties for Misuse, of
Social Security Numbers: The Social Security Number (SSN) has become
a de facto national identifier, serving as the key that unlocks many
corporate and governmental databases. Accordingly, it is a major
facilitator of identity theft. Sen. Feinstein has introduced
legislation (S. 29 and S. 116) that would restrict the display, sale
and purchase of SSNs without consent, limit the circumstances under
which commercial entities could require individuals to provide their
SSNs, and prohibit the use of the numbers on drivers' licenses. Rep.
Ed Markey (D-MA) also has introduced legislation that would make it a
crime to sell or purchase Social Security Numbers. And Rep. Rodney
Frelinghuysen (R-NJ) has introduced similar legislation that
prohibits "interactive computer services," like WestLaw, from
disclosing SSNs to third parties without written consent.

Skeptics worry that such legislation would not be enacted without
numerous exceptions. Moreover, given the ubiquity of Social Security
Numbers in the public domain, criminals could still acquire them from
other sources. Finally, tighter controls on Social Security Numbers
would not prevent identity thieves from acquiring and using other
personal identifiers to perpetrate fraud.

- Extend Fair Credit Reporting Act Concepts to Data Brokers: The
Fair Credit Reporting Act (FCRA) is one of the most important privacy
laws on the books, affording consumers the right to access and
challenge their credit reports and requiring credit reporting
agencies to maintain accurate data. The FCRA is complicated and
always highly contested, so there is little taste for extending the
Act itself to data brokers.

However, Senator Bill Nelson (D-FL) and Congressman Markey have
introduced the Information Protection and Security Act, which would
regulate "information brokers" under a legal framework akin to the
Fair Credit Reporting Act. This bill would subject information
brokers like ChoicePoint to federal regulation by the Federal Trade
Commission (FTC). The FTC would be required to issue new fair
information practice rules that would do the following: (1) require
information brokers to develop procedures to guarantee maximum
possible accuracy of their data, prevent and detect fraudulent,
unlawful or unauthorized use or disclosure of personally identifiable
information and mitigate potential harm to individuals from threats
to privacy and security; (2) allow individuals to access information
about themselves held by data brokers and the identity of each entity
that purchased their personally identifiable information; and (3)
require information brokers to authenticate users before allowing
access to their databases.

- Requiring Data Brokers to Formally Address Security: Pursuant to
the Gramm-Leach-Bliley Act (GLB) financial institutions are already
under information security requirements, and the Health Insurance
Portability and Protection Act (HIPPA) imposes similar requirements
on health care companies. Data brokers similarly could be required to
conduct risk assessments, develop and implement security plans, and
regularly audit their security procedures. Requiring data brokers to
develop and implement security procedures, however, would not limit
the sale of personal data to commercial entities.

- Holding Data Brokers Liable for Security Breaches: Most if not all
of the proposed federal bills contain liability provisions that would
give the FTC and/or the Attorney General enforcement power to bring
actions against violators, and some bills give consumers private
rights of action. A California woman whose personal information was
purchased from ChoicePoint by the fraud artists has filed suit
against ChoicePoint in Los Angeles Superior Court alleging fraud and
negligence. There is, however, no established standard of care for
information security at this time.

- Imposing a "Know Your Customer" Requirement on Data Brokers: Data
brokers are in the best position to verify the identity of their
customers and they could be prohibited from selling information to
customers whom they are unable to verify. The bill proposed by Sen.
Nelson and Rep. Markey requires information brokers to authenticate
purchasers of their data before granting them access. It is unclear,
however, what risk factors data brokers would use to assess potential

Some solutions pose their own risks to privacy. In the area of
identity fraud, some approaches may require more personal information
to be collected and more authentication to be demanded to prevent
unauthorized access and establishing identity of users.

CDT will track progress of relevant federal bills at its legislative

(3) The Overlooked Issue - Government Access and Use

Even before September 11, the federal government was developing and
implementing new ways to use commercially aggregated data. Since
2001, this process has accelerated. The new data environment has two
defining features: the depth and breadth of personally identifiable
information available in commercial databases, and the capacity to
analyze such data and draw from it patterns, inferences, and

This area should not be ignored. By and large, the rules for the
government's use of databases for counterterrorism purposes are
fragmentary and unresponsive to the new kinds of screening
applications that are being developed. The Privacy Act does not apply
when the government subscribes to a commercial database and federal
privacy laws for financial and medical records have broad exemptions
for national security. Consequently, there is no framework addressing
key questions: When should the government access commercial
databases? How will the government use "knowledge" generated by
computerized analysis of data? Could the analysis trigger a criminal
or intelligence investigation? Will it be used for screening
purposes-to trigger a more intensive search of someone seeking to
board an airplane, to keep a person off an airplane, to deny a person
access to a government building, to deny a person a job? What rights
does an individual have in these contexts?

In December 2004, Congress adopted and the President signed the
Intelligence Reform and Terrorism Prevention Act of 2004. Section
1016 of the Act requires the President to create an "information
sharing environment" for the sharing of terrorism information among
all appropriate Federal, State, local, and tribal entities, and the
private sector. The ISE, as the information sharing environment is
known, is supposed to incorporates protections for individuals'
privacy and civil liberties and strong mechanisms to enhance
accountability and facilitate oversight, including audits,
authentication, and access controls, but so far, those procedures are

The Markle Foundation Task Force on National Security in the
Information Age and the Defense Secretary's Technology and Privacy
Advisory Committee (TAPAC) recommended some standards, including
senior level and sometimes judicial approval for access, permission
controls on sharing, auditing, and redress.

CDT has compiled two charts outlining the patchwork of laws governing
commercial data, one focusing on commercial use and one on
governmental uses:

For further information:

- James X. Dempsey and Lara M. Flint, Commercial Data and National
Security, The George Washington Law Review (August 2004):

- Markle Task Force on National Security in the Information Age:

(4) Congressional Hearings Planned

Members of Congress have responded to the recent spate of security
breaches by preparing for hearings on the subject of data privacy.
The first will be March 10, before the Senate Banking Committee,
chaired by Senator Richard Shelby (R-AL). Senate Judiciary Committee
Chairman Arlen Specter (R-PA) has announced his intention to also
hold hearings on the issue. Congressman Joe Barton (R-TX), Chairman
of the House Energy and Commerce Committee, has asked his staff on
the to examine the issue of data storage and privacy. In addition,
several members of Congress are planning to ask the Government
Accountability Office to investigate the US government's contracts
with data brokers.

(5) O'Harrow Book Maps Data Landscape

In "No Place to Hide" (Free Press 2005), Washington Post reporter
Robert O'Harrow, Jr., lays out in extensive detail the post-9/11
marriage of private data companies and government anti-terror
initiatives. Drawing on years of investigation, O'Harrow shows how
the government is using private databases to promote homeland
security and fight the war on terror.

O'Harrow builds his book with stories of key players in this new
world, from software inventors to counterintelligence officials.
While O'Harrow offers few policy recommendations, his book is a
indispensable introduction to the new world of high-tech data
collection and analysis. "More than ever before," O'Harrow concludes,
"the details of our lives are no longer our own. They belong to the
companies that collect them, and the government agencies that buy or
demand them in the name of keeping us safe." He quotes Viet Dinh,
often credited as the author of the PATRIOT Act: "The leap in
technology has not been met with a proportionate response in terms of
how we think of this technology. We need to think more creatively.'"

Detailed information about online civil liberties issues may be
found at