4-year scandal of the 9/11 billions

New York Daily News - http://www.nydailynews.com
4-year scandal of the 9/11 billions
This series was reported and written by the Daily News Investigative Team: RUSS BUETTNER, HEIDI EVANS, ROBERT GEARTY, BRIAN KATES, GREG B. SMITH and Assistant Managing Editor RICHARD T. PIENCIAK

Just two days after the terrorist attack on the World Trade Center, with the nation still in deep collective shock, President Bush met in the Oval Office with Sens. Chuck Schumer and Hillary Clinton.

Schumer gave the commander in chief first-hand details of our city's devastation and the horror, then told him New York needed at least $20 billion to recover and rebuild.

Without hesitation, Bush agreed.

So whatever happened to the President's promise, which was later increased to $21.4 billion? And, what happened to the money we did get? Did it go to those who needed help the most? Or did some of it end up lining the pockets of the wealthy, the well-connected and hucksters who played the system?

Four years after 9/11, it is time to lift the veil of our collective sorrow and examine without sentimentality or fear of political incorrectness what was done with the generous commitment underwritten by American taxpayers.

(Note: This report originally appeared on December 3rd, 2005)

Today, the Daily News Investigative Team begins an in-depth examination of the federal government's Sept. 11 disaster recovery program for New York City.

The 9/11 tragedy brought out the best in most of us — the countless acts of heroism, the passionate outpouring of volunteerism and the unprecedented generosity of a grieving nation.

It turns out that the huge and sudden influx of billions of dollars in federal disaster recovery aid also brought out the worst in others — to a degree that is sad and disheartening.

To be sure, the financial assistance given to New York City after the Sept. 11, 2001, terrorist attacks delivered tremendous benefit to countless citizens and businesses, small and large.

But a four-month Daily News investigation of the $21.4 billion disaster recovery package reveals that major elements of the aid process were procedurally flawed — from the determination of how much money was supposedly needed, to how it was distributed, to how it was actually spent and ultimately, to how little oversight there was over the spending. In effect, no one was watching.

As a result, 9/11 recovery aid was used to finance a plethora of projects that taxpayers elsewhere could be forgiven for characterizing as old-fashioned pork-barrel spending.

# Hundreds of millions of dollars were spent on projects that seemingly had nothing to do with 9/11 and lower Manhattan.

# Programs were plagued with so many loopholes that millions more ended up being given to recipients who did not fit the full intent of the particular program.

# Still more millions went to help projects already in the works before 9/11 or on the drawing board with no prior funding source.

# Huge contracts were given to companies and organizations linked to the very officials tasked with deciding how to spend the money — creating, at a minimum, the potential for multiple conflicts of interest.

# Substantial sums were given to companies to stay in lower Manhattan even though they had no intention of leaving.
# In many cases, original eligibility rules were expanded, and deadlines extended, so that virtually no one was ineligible. Vast numbers of applications were filed during the final weeks of signup periods.

# Rules for some aid programs were so loose and broadly drawn that otherwise honest people grabbed their little piece of the 9/11 money pot — like the thousands of New Yorkers who took advantage of FEMA by obtaining free air conditioners, air purifiers, air filters and/or high-efficiency vacuum cleaners.

# The gold rush also attracted businesses and organizations that followed all the rules for obtaining relief but didn't necessarily need free money to survive.

Then there's the city Department of Education. It did such a poor job of keeping track of how it spent its $32 million share of Project Liberty grief counseling funds, that four years later, the feds are still withholding $26.8 million. Finally, The News found that program after program was designed, then redesigned, with a singular goal: spend every dime.

For example, in August 2002, the Empire State Development Corp. revised the formula for its Business Recovery Grant program to make the maximum awards available to more companies. Based on the old rules and the spending rate at that point, the recovery grant program never would have spent its full allotment.

WHO GETS WHAT

Because the amount of money was established before the scope of the need was determined, Congress had to guess how best to distribute the funds among federal agencies. Technically, virtually all of the money has been allocated, but significant amounts have yet to be spent. Gov. Pataki wants to use $2 billion worth of unused, expired Liberty Zone benefits to help pay for a rail link connecting Kennedy Airport to lower Manhattan.

Another chunk of leftover cash, $125 million in unused workers' compensation funding, has been a lightning rod for a New York vs. Red States battle. Republicans had wanted to recoup those funds while the New York delegation has argued that the money is desperately needed to fund medical services for the legions of heroic workers who are plagued with chronic illnesses they say were caused by working at Ground Zero. A tentative deal has been struck to restore the funds.

Although some police, fire and security projects in the city were paid out of the $21.4 billion, the federal 9/11 disaster recovery aid did not include New York's share of anti-terrorism legislation that paid for multibillion-dollar improvements in our nation's security.

The federal recovery aid also does not include the $7 billion paid out by the Victim Compensation Fund.

CHANGING THE RULES

For 9/11, longstanding disaster aid rules were turned on their head.

Take the $8.8 billion dispensed through the Federal Emergency Management Agency — 40% of the overall aid package.

Under the Stafford Act, which governs federal disaster relief, victims typically first apply to the Small Business Administration for loans. If rejected, applications are generally made to FEMA. That rule was dropped in New York.

Additionally, for the first time, FEMA paid 100% of claims across the board, instead of splitting it 75%-25% with the locality. Also, instead of reimbursing all qualified claims, for the first time FEMA aid was capped — at $8.8 billion. Since the money "had" to be used, the rules had to be changed — such as the deadline extensions and loosened eligibility requirements.

Because of the need for immediate work orders, city procurement rules went out the window; there were many no-bid contracts.

And considering the size of the aid package — the same as the estimated 2003 gross domestic product of Afghanistan — there was little aggressive monitoring or oversight for fraud and misappropriation.

There was no incentive to do so, either. The local political effort focused on getting every penny of Bush's promise, getting the money faster, extending application deadlines, expanding access and easing eligibility requirements.

But in the end, what did all that speedy and forceful effort mean for one of New York's main disaster recovery goals — the rebuilding of Ground Zero?

With fighting over the International Freedom Center, the Drawing Center, the sanctity of the twin towers' footprint — with sparring between the governor and the mayor over stalled development at the site, along with angry words from victims' families and other special interests — Ground Zero remains the big loser.

Additional research by Ellen Locker

No science behind number

The magic number of "$20 billion" that President Bush first said he would give New York was actually pulled from thin air, a figure born of politics and compassion rather than actuarial calculation and meaningful analysis.

Sen. Chuck Schumer (D-N.Y.) came up with the number in an effort to match the amount of emergency money being planned for anti-terrorism security across the country — legislation that made no specific mention of New York.

"To ask for more than $20 billion — more for New York than for all the military and the rest of the country — would seem excessive," Schumer told the Daily News. "But to ask for less than $20 billion would be derelict in my duties as a New York senator. So I figured, 'Let's match it, $20 billion for the rest and $20 billion for New York.'"

Schumer remembers Bush asking, "New York really needs $20 billion?"

"At least that, Mr. President," Schumer replied.

"You got it," said Bush.

As Schumer later recalled, "I got up out of my chair, and I almost went over to hug him, but I realized he was the President, so I patted him on the back."

From the moment the Oval Office meeting of Sept. 13, 2001 ended, come hell or high water, New York City was going to get its $20 billion.

Displays of machismo by Bush, Gov. Pataki and then-Mayor Rudy Giuliani also played a part in the recovery-aid equation.

Bush said an attack on New York was an attack on America. A message had to be sent to the terrorists that we would not cower — lower Manhattan had to be rebuilt.

Pataki and Giuliani said that in order to guarantee the area's future as a business capital, it was important to rebuild bigger and better — a phrase that became one of the mantras of the 9/11 recovery.

Simple replacement was not going to be good enough.

For a while, there was talk that the $20 billion was only a down payment. On Oct. 9, 2001, with Giuliani's support, Pataki announced a credulity-straining $54 billion rebuilding plan that included funding a high-speed passenger rail service between Manhattan and Schenectady — 170 miles upstate. The plan quickly died.

Over time, the rest of the nation gradually lost its political and emotional sympathy for New York. The White House budget director accused New York legislators of playing a "moneygrubbing game."

In March 2002, Bush announced a final overall aid package of $21.4 billion. But the number bounced around until the White House, city Controller William Thompson and others said the package had fallen to $20.8 billion because of "program adjustments."

In fact, it will be years, if ever, before the final tally can be calculated. There will probably always be unresolved issues regarding the value of tax benefits included in the overall aid package.

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Question for Judge Alito: What About One Person One Vote?

The New York Times
Question for Judge Alito: What About One Person One Vote?
By ADAM COHEN

When Samuel Alito Jr. applied for a top job in the Reagan Justice Department, he explained what had attracted him to constitutional law as a college student. He was motivated, he said, "in large part by disagreement with Warren Court decisions, particularly in the areas of criminal procedure, the Establishment Clause, and reapportionment." The reapportionment cases that so upset young Mr. Alito were a series of landmark decisions that established a principle that is now a cornerstone of American democracy: one person one vote.

There has been a lot of talk about the abortion views of Judge Alito, President Bush's Supreme Court nominee. But his views on the redistricting cases may be more important. Senator Joseph Biden Jr., the Delaware Democrat who will be one of those doing the questioning when confirmation hearings begin next week, said recently that Judge Alito's statements about one person one vote could do more to jeopardize his nomination than his statements about Roe v. Wade.

Rejecting the one-person-one-vote principle is a radical position. If Judge Alito still holds this view today, he could lead the court to accept a very different vision of American democracy, one in which it would be far easier for powerful special interests to get a stranglehold on government.

Even if Judge Alito has changed his position on the reapportionment cases, the fact that he was drawn to constitutional law because of his opposition to those rulings raises serious questions about his views on democracy and equality.

The one-person-one-vote principle traces to the Supreme Court's 1962 decision in Baker v. Carr. At the time, legislative districts had wildly unequal numbers of people, and representatives from underpopulated rural districts controlled many state legislatures. In Maryland, 14 percent of the voters could elect a majority of the State Senate, and 25 percent could elect a majority of the State House. In Alabama, the county that includes Birmingham, which had 600,000 people, got the same number of state senators - one - as a county with barely 15,000 people.

In Baker v. Carr, Tennessee voters challenged their state's unequal legislative districts, which had not been redrawn in 60 years. The Supreme Court had rejected a similar claim out of Illinois in 1946, saying it did not want to enter the "political thicket." But in 1962, the Warren court decided it had to enter the thicket to vindicate the rights of Tennesseans whose votes were being unfairly diluted. It ordered Tennessee's lines redrawn.

Two years later, in Reynolds v. Sims, the court struck down Alabama's legislative districts. The Reynolds decision did what Baker had not: it established a clear mathematical standard.

The court held that the equal protection clause required that "as nearly as is practicable one man's vote" must "be worth as much as another's."

Baker v. Carr set off what a leading election law treatise calls "the reapportionment revolution." In nine months, lawsuits challenging district lines were filed in 34 states. They did not solve all the problems with legislative districts - the current court is still wrestling with partisan gerrymandering - but they made American democracy much fairer.

As a Princeton undergraduate, Samuel Alito sided with Tennessee and Alabama in the reapportionment cases. What is unclear - and what senators will no doubt try to pin down - is whether he ever changed his mind. He cited his opposition to the reapportionment cases, apparently as a point of pride, in his application for the Reagan Justice Department job in 1985, when he was 35 years old and a midcareer lawyer.

Baker and Reynolds seem so self-evidently correct today that it is hard to imagine that Judge Alito could still really oppose them. But there is a strong strand of antidemocratic thinking among far-right lawyers. Jay Bybee, who helped develop the Bush administration's pro-torture policy and is now a federal judge, has criticized the 17th Amendment, which requires that United States senators be elected by the people, instead of by state legislatures, as they once were. And an American Enterprise Institute scholar, writing in The Washington Times, recently defended Judge Alito by suggesting that Baker v. Carr was wrong.

If Judge Alito was able to forge a conservative Supreme Court majority to overturn the reapportionment cases, the results would be disastrous. The next Tom DeLay-style redistricting in Texas could conceivably stuff most of the state's Democratic voters into two or three multimillion-person Congressional districts, while reserving the state's remaining 30 or so seats for Republicans. Small claques could control entire state governments - as they did until 1962.

Whatever the chances of overturning the reapportionment cases, the Senate should ask Judge Alito what he so disliked about them. The idea that reapportionment is territory the court cannot enter was long ago rejected by the legal mainstream. Baker v. Carr and Reynolds v. Sims may have been "activist" rulings, but for the most justifiable reason: to ensure that the democratic process is not rigged to thwart the will of the majority.

Judge Alito has himself espoused more activist views, notably his legally dubious vote to overturn a Congressional ban on machine guns. One possibility is that Judge Alito, who was a member of an alumni group that opposed coeducation and affirmative action at Princeton, is at heart an elitist who believes the reapportionment cases simply made the country too democratic.

Judge Alito will most likely insist at his hearings that he feels bound by Baker v. Carr and Reynolds v. Sims. Even if he can be trusted, it will say a great deal about him if he supports one person one vote only because he believes that respect for precedent, or confirmation politics, requires it. Most Americans know, based on their innate sense of justice and the Constitution, why the pre-1960's way of electing legislators was not acceptable then and is not now.

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Muslim Scholars Were Paid to Aid U.S. Propaganda

The New York Times
Muslim Scholars Were Paid to Aid U.S. Propaganda
By DAVID S. CLOUD and JEFF GERTH

WASHINGTON, Jan. 1 - A Pentagon contractor that paid Iraqi newspapers to print positive articles written by American soldiers has also been compensating Sunni religious scholars in Iraq in return for assistance with its propaganda work, according to current and former employees.

The Lincoln Group, a Washington-based public relations company, was told early in 2005 by the Pentagon to identify religious leaders who could help produce messages that would persuade Sunnis in violence-ridden Anbar Province to participate in national elections and reject the insurgency, according to a former employee.

Since then, the company has retained three or four Sunni religious scholars to offer advice and write reports for military commanders on the content of propaganda campaigns, the former employee said. But documents and Lincoln executives say the company's ties to religious leaders and dozens of other prominent Iraqis is aimed also at enabling it to exercise influence in Iraqi communities on behalf of clients, including the military.

"We do reach out to clerics," Paige Craig, a Lincoln executive vice president, said in an interview. "We meet with local government officials and with local businessmen. We need to have relationships that are broad enough and deep enough that we can touch all the various aspects of society." He declined to discuss specific projects the company has with the military or commercial clients.

"We have on staff people who are experts in religious and cultural matters," Mr. Craig said. "We meet with a wide variety of people to get their input. Most of the people we meet with overseas don't want or need compensation, they want a dialogue."

Internal company financial records show that Lincoln spent about $144,000 on the program from May to September. It is unclear how much of this money, if any, went to the religious scholars, whose identities could not be learned. The amount is a tiny portion of the contracts, worth tens of millions, that Lincoln has received from the military for "information operations," but the effort is especially sensitive.

Sunni religious scholars are considered highly influential within the country's minority Sunni population. Sunnis form the core of the insurgency.

Each of the religious scholars underwent vetting before being brought into the program to ensure that they were not involved in the insurgency, said a former employee, who spoke on condition of anonymity because Lincoln's Pentagon contract prohibits workers from discussing their activities. The identities of the Sunni scholars have been kept secret to prevent insurgent reprisals, and they were never taken to Camp Victory, the American base outside Baghdad where Lincoln employees work with military personnel.

Lt. Col. Barry Johnson, a spokesman for the American military in Baghdad, declined to comment.

After the disclosure in November that the military used Lincoln to plant articles written by American troops in Iraqi newspapers, the Pentagon ordered an investigation, led by Navy Rear Adm. Scott Van Buskirk.

Army Gen. George W. Casey Jr., the top commander in Iraq, said that a preliminary assessment made shortly after the military's information campaign was disclosed concluded that the Army was "operating within our authorities and the appropriate legal procedures."

Admiral Van Buskirk has finished his investigation, several Pentagon officials said, but it has not been made public.

Lincoln recently sought approval from the military to make Sunni religious leaders one of several "target audiences" of the propaganda effort in Iraq. A Lincoln plan titled "Divide and Prosper" presented in October to the Special Operations Command in Tampa, which oversees information operations, suggested that reaching religious leaders was vital for reducing Sunni support for the insurgency.

"Clerics exercise a great deal of influence over the people in their communities and oftentimes it is the religious leaders who incite people to violence and to support the insurgent cause," the company said in the proposal, a copy of which was reviewed by The New York Times.

In some cases, "insurgent groups may provide Sunni leaders with financial compensation in return for that cleric's loyalty and support," the proposal said, adding that religious leaders are motivated by "a need to retain patronage" and a "desire to maintain religious and moral authority."

Unlike in many other Middle Eastern countries, sermons by Iraqi imams are not subject to government control, enabling them to speak "without fear of repercussions," the document said.

The Special Operations Command said in a statement that it did not adopt the Lincoln plan, choosing another contractor's proposal instead. When the Lincoln Group was incorporated in 2004, using the name Iraqex, its stated purpose was to provide support services for business development, trade and investment in Iraq.

But the company soon shifted to information warfare and psychological operations, two former employees said. The company was awarded three new Pentagon contracts, worth tens of millions of dollars, they said.

Payments to the scholars were originally part of Lincoln's contract to aid the military with information warfare in Anbar Province. Known as the "Western Missions" contract, it also called for producing radio and television advertisements, Web sites, posters, and for placing advertisements and opinion articles in Iraqi publications. In October, Lincoln was awarded a new contract by the Pentagon for work in Iraq, including continued contact with Muslim scholars.

Lincoln has also turned to American scholars and political consultants for advice on the content of the propaganda campaign in Iraq, records indicate. Michael Rubin, a Middle East scholar at the American Enterprise Institute, a Washington research organization, said he had reviewed materials produced by the company during two trips to Iraq within the past two years.

"I visited Camp Victory and looked over some of their proposals or products and commented on their ideas," Mr. Rubin said in an e-mailed response to questions about his links to Lincoln. "I am not nor have I been an employee of the Lincoln Group. I do not receive a salary from them."

He added: "Normally, when I travel, I receive reimbursement of expenses including a per diem and/or honorarium." But Mr. Rubin would not comment further on how much in such payments he may have received from Lincoln.

Mr. Rubin was quoted last month in The New York Times about Lincoln's work for the Pentagon placing articles in Iraqi publications: "I'm not surprised this goes on," he said, without disclosing his work for Lincoln. "Especially in an atmosphere where terrorists and insurgents - replete with oil boom cash - do the same. We need an even playing field, but cannot fight with both hands tied behind our backs."

Richard A. Oppel Jr. contributed reporting from Baghdad, Iraq, for this article.

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New Rules Set for Giving Out Antiterror Aid

The New York Times
New Rules Set for Giving Out Antiterror Aid
By ERIC LIPTON

Facing cuts in antiterrorism financing, the Department of Homeland Security plans to announce today that it will evaluate new requests for money from an $800 million aid program for cities based less on politics and more on assessments of where terrorists are likely to strike and potentially cause the greatest damage, department officials say.

The changes to the program, the Urban Area Security Initiative, are being driven in part by a reduction in the overall pool of money for antiterrorism efforts. For 2006, Congress has appropriated $120 million less in these urban grants than for 2005.

Domestic security grants in general, including the urban area ones, have been criticized because they have sent more antiterrorism money per capita to sparsely populated states like Wyoming and Alaska than to states like New York and California.

The shift in policy, to be announced by Homeland Security Secretary Michael Chertoff, could mean less antiterrorism aid for the 50 cities that received money last year under the program. Or, as is more likely, the department could reduce the number of cities on the list or cut grants for cities deemed at lower risk.

Until the application process is under way, it is unclear what the impact may be in cities now receiving money under the program, including New York.

Set up after the 2001 terrorist attacks, the Homeland Security Department's local and state grant programs have drawn repeated criticism from members of Congress and budget watchdog groups because the early emphasis on spreading the money around resulted in tens of millions of dollars going to some communities where, critics said, the terrorist threat was not as urgent as elsewhere.

Examples cited in recent testimony to Congress include $557,400 awarded to North Pole, Alaska, a city of about 1,700 residents, to buy rescue and communications equipment, and $500,000 to Outagamie County, Wis., population 165,000, to buy chemical suits, rescue saws, disaster-response trailers, emergency lighting and a bomb disposal vehicle.

Mr. Chertoff, in a speech last month, said the changes he was considering would require an acknowledgment that the nation could not protect itself against all risks.

"That means tough choices," he said. "And choices mean focusing on the risks which are the greatest. And that means some risks get less focus."

Officials from some smaller American cities that have received grants said they deserved a reasonable share of the antiterrorism aid.

"We certainly are much smaller than a city like New York or Los Angeles," said Don Thorson, administrator for the grant program in Omaha.

But, Mr. Thorson said: "We still are an urban area. And we still have risks. No one can predict where a terrorist might strike. Look where Timothy McVeigh struck. It was Oklahoma City."

Omaha received $5.1 million last year, which it used to buy bomb suits and communications equipment, among other items.

Representative Peter T. King, Republican of New York, who is chairman of the House Committee on Homeland Security, said the shift properly made risk a more meaningful factor in allocating the money.

"The more risk-based they can make it, the better," Mr. King said. "It sends a message to Congress that homeland security is a serious matter, it is not a public works project, that we are not going down the pork-barrel road. That is vital."

Homeland Security officials would not offer predictions of what the likely outcome would be in terms of how many cities would see their grants eliminated or cut significantly.

The Urban Area Security Initiative represents $765 million of the $2.5 billion budgeted in the 2006 fiscal year for state and local antiterrorism programs. A separate Homeland Security grant program, which gives money directly to states, has been allocated $550 million by Congress this fiscal year. That money will still be distributed, in part, based on a formula that sets a minimum for each state. But for the first time, money not obligated by this formula will be distributed based on risk.

When the Urban Area Security grants were first announced in 2003, only seven cities were given money: New York, Washington, Los Angeles, Seattle, Chicago, San Francisco and Houston. But the list quickly grew to 30 cities and finally to 50 as more cities were deemed eligible for the grants.

Last year, even though the number of cities remained about the same, a much larger share of the money went to the biggest cities, with New York getting $207.5 million, compared with $49.7 million in 2004.

The system to be unveiled today evaluates applications for aid based on how well cities meet emergency preparedness standards recently established by the Homeland Security Department.

The standards include detailed steps that local and state governments would be required to take in response to potential threats, like the release of the nerve agent Sarin in office buildings or the truck bombing of a sports arena. The applications will also be ranked based on a significantly expanded database that the agency has set up to try to objectively measure the risk level in each city, department officials said. The database includes, for example, an inventory of high-profile government buildings and major structures like bridges, as well as daily ridership on a subway system and how many subway stations a city system has.

Risk is defined as a combination of the perceived threat, the vulnerability of a particular city or asset, and the consequences of an attack.

"The system before was fairly Neanderthalic," one Homeland Security official said, on condition on anonymity because he did not want to pre-empt Mr. Chertoff's announcement. "It was very, very sophomoric."

Mr. Chertoff has made clear that he expects protests when the final grant awards are announced.

"To each individual, the risks that touch him or her personally are the most urgent and of greatest concern," he said in his speech last month. "But I know you also know that as someone who has responsibility for making decisions that touch on all Americans, I have to weigh, with limited resources, the allocation of resources based on the greatest risk, and that means some people are going to be disappointed."

The prospect of increased competition for the money comes as no surprise to officials in some smaller cities.

"We anticipated there would be a point soon where Bush would be concerned about throwing so much money out there," said Samuel Simon, director of public safety in St. Louis.

The city received $7 million last year, money spent - wisely, Mr. Simon said - to prepare for the possibility of a pandemic flu outbreak or small-scale terrorist attack.

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Why Bush’s Warrantless Spying Programs Puts Americans At Risk

thinkprogress.org

Why Bush’s Warrantless Spying Programs Puts Americans At Risk

Today, President Bush attempted to justify his secret domestic spying program:

The NSA program is one that listens to a few numbers, called from the outside of the United States and of known al Qaeda or affiliate people. In other words, the enemy is calling somebody and we want to know who they’re calling and why.

In fact, according to this explanation, the program was not only illegal but unnecessarily puts the American people at risk.

If we know that U.S. persons are communicating with al Qaeda or al Qaeda affiliates, the surveillance would be approved by the Foreign Intelligence Surveillance Court. (Remember, doing so would not slow the process down because you can obtain the approval up to 72-hours after the surveillance has begun.) Evidence obtained with a warrant from the FISA court, in most cases, can be used to charge and prosecute a suspect. In fact, Section 218 of the Patriot Act amended FISA to make it easier to introduce evidence obtained with a FISA warrant to prosecute people.

Every conversation monitored under Bush’s warrantless domestic surveillance program is a missed opportunity to get someone who is talking with terrorists off the streets and behind bars.

Why? Becuase evidence obtained by Bush’s warrantless domestic spying program is probably not admissible in court. Convictions obtained with evidence from this program may be overturned. Suspected terrorists are already pursuing appeals.

Conversation between U.S. persons and a known terrorists should be monitored. But those conversations should be monitored in a way maximizes the security of the American people. Bush’s secret program doesn’t do it. We’d be much safer if he would cancel it and start following the law.

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NSA Gave Other U.S. Agencies Information From Surveillance

washingtonpost.com
NSA Gave Other U.S. Agencies Information From Surveillance
Fruit of Eavesdropping Was Processed and Cross-Checked With Databases

By Walter Pincus
Washington Post Staff Writer

Information captured by the National Security Agency's secret eavesdropping on communications between the United States and overseas has been passed on to other government agencies, which cross-check the information with tips and information collected in other databases, current and former administration officials said.

The NSA has turned such information over to the Defense Intelligence Agency (DIA) and to other government entities, said three current and former senior administration officials, although it could not be determined which agencies received what types of information. Information from intercepts -- which typically includes records of telephone or e-mail communications -- would be made available by request to agencies that are allowed to have it, including the FBI, DIA, CIA and Department of Homeland Security, one former official said.

At least one of those organizations, the DIA, has used NSA information as the basis for carrying out surveillance of people in the country suspected of posing a threat, according to two sources. A DIA spokesman said the agency does not conduct such domestic surveillance but would not comment further. Spokesmen for the FBI, the CIA and the director of national intelligence, John D. Negroponte, declined to comment on the use of NSA data.

Since the revelation last month that President Bush had authorized the NSA to intercept communications inside the United States, public concern has focused primarily on the legality of the NSA eavesdropping. Less attention has been paid to, and little is known about, how the NSA's information may have been used by other government agencies to investigate American citizens or to cross-check with other databases. In the 1960s and 1970s, the military used NSA intercepts to maintain files on U.S. peace activists, revelations of which prompted Congress to restrict the NSA from intercepting communications of Americans.

Today's NSA intercepts yield two broad categories of information, said a former administration official familiar with the program: "content," which would include transcripts of a phone call or e-mail, and "non-content," which would be records showing, for example, who in the United States was called by, or was calling, a number in another country thought to have a connection to a terrorist group. At the same time, NSA tries to limit identifying the names of Americans involved.

"NSA can make either type of information available to other [intelligence] agencies where relevant, but with appropriate masking of its origin," meaning that the source of the information and method of getting it would be concealed, the former official said.

Agencies that get the information can use it to conduct "data mining," or looking for patterns or matches with other databases that they maintain, which may or may not be specifically geared toward detecting terrorism threats, he said. "They are seeking to separate the known from the unknown, relationships or associations," he added.

The NSA would sometimes monitor telephones, e-mails or fax communications in cases where individuals in the United States -- and sometimes people they contacted -- were linked to an alleged foreign terrorist group, officials have said. The NSA, officials said, limited its decisions to follow-up with more electronic surveillance on an individual to those cases where there was some apparent link to terrorist sources.

But other agencies, one former official said, have used phone numbers or other records obtained from NSA in combination with wide-ranging databases to look for links and associations. "What data sets are included is a policy decision [made by individual agencies] when they involve other than terrorist links," he said.

DIA personnel stationed inside the United States went further on occasion, conducting physical surveillance of people or vehicles identified as a result of NSA intercepts, said two sources familiar with the operations, although the DIA said it does not conduct such activities.

The military personnel -- some of whose findings were reported to the Northern Command in Colorado -- were employed as part of the Pentagon's growing post-Sept. 11, 2001, domestic intelligence activity based on the need to protect Defense Department facilities and personnel from terrorist attacks, the sources said.

Northcom was set up in October 2002 to conduct operations to deter, prevent and defeat terrorist threats in the United States and its territories. The command runs two fusion centers that receive and analyze intelligence gathered by other government agencies.

Those Northcom centers conduct data mining, where information received from the NSA, the CIA, the FBI, state and local police, and the Pentagon's Talon system are cross-checked to see if patterns develop that could indicate terrorist activities.

Talon is a system that civilian and military personnel use to report suspicious activities around military installations. Information from these reports is fed into a database known as the Joint Protection Enterprise Network, which is managed, as is the Talon system, by the Counterintelligence Field Activity, the newest Defense Department intelligence agency to focus primarily on counterterrorism. The database is shared with intelligence and law enforcement agencies and was found last month to have contained information about peace activists and others protesting the Iraq war that appeared to have no bearing on terrorism.

Military officials acknowledged that such information should have been purged after 90 days and that the Talon system was being reviewed.

Gen. Michael V. Hayden, deputy director for national intelligence and former head of NSA, told reporters last month that the interception of communications to the United States allegedly connected to terrorists was, in almost every case, of short duration. He also said that when the NSA creates intelligence reports based on information it collects, it minimizes the number of Americans whose identities are disclosed, doing so only when necessary.

"The same minimalizationist standards apply across the board, including for this program," he said of the domestic eavesdropping effort. "To make this very clear -- U.S. identities are minimized in all of NSA's activities, unless, of course, the U.S. identity is essential to understand the inherent intelligence value of the intelligence report." Hayden did not address the question of how long government agencies would archive or handle information from the NSA.

Today's controversy over the domestic NSA intercepts echoes events of more than three decades ago. Beginning in the late 1960s, the NSA was asked initially by the Johnson White House and later by the Army, the Secret Service, and the Bureau of Narcotics and Dangerous Drugs to intercept messages to or from the United States. Members of Congress were not informed of the program, code-named Minaret in one phase.

The initial purpose was to "help determine the existence of foreign influence" on "civil disturbances occurring throughout the nation," threats to the president and other issues, Gen. Lew Allen Jr., then director of NSA, told a Select Senate Committee headed by then-Sen. Frank Church (D-Idaho) in 1975.

Allen, in comments similar to recent Bush administration statements, said collecting communications involving American citizens was approved legally, by two attorneys general. He also said that the Minaret intercepts discovered "a major foreign terrorist act planned in a large city" and prevented "an assassination attempt on a prominent U.S. figure abroad."

Overall, Allen said that 1,200 Americans citizens' calls were intercepted over six years, and that about 1,900 reports were issued in three areas of terrorism. As the Church hearings later showed, the Army expanded the NSA collection and had units around the country gather names and license plates of those attending antiwar rallies and demonstrations. That, in turn, led to creation of files on these individuals within Army intelligence units. At one point a Senate Judiciary subcommittee showed the Army had amassed about 18,000 names. In response, Congress in 1978 passed the Foreign Intelligence Security Act, which limited NSA interception of calls from overseas to U.S. citizens or those involving American citizens traveling abroad.

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Bill on Illegal-Immigrant Aid Draws Fire

The New York Times
Bill on Illegal-Immigrant Aid Draws Fire
By RACHEL L. SWARNS

WASHINGTON, Dec. 29 - Churches, social service agencies and immigration groups across the country are rallying against a provision in the recently passed House border-security bill that would make it a federal crime to offer services or assistance to illegal immigrants.

The measure would broaden the nation's immigrant-smuggling law so that people who assist or shield illegal immigrants would be subject to prosecution. Offenders, who might include priests, nurses or social workers, could face up to five years in prison. The proposal would also allow the authorities to seize some assets of those convicted of such a crime.

Proponents of the legislation have argued that such provisions would make it harder for illegal immigrants to thrive in the United States by discouraging people from helping them. The legislation, which cleared the House this month, could also subject the spouses and colleagues of illegal workers to prosecution.

Several Republicans and Democrats in Congress say the measure appears unlikely to become law. But the legislation has touched off an outcry among groups that teach English and offer job training, medical assistance and other services to immigrants.

The United States Conference of Catholic Bishops has written to members of Congress and called on President Bush to oppose the measure publicly. In Manhattan, scores of immigrants demonstrated against the bill last week. Here in the Washington area, a coalition of immigrant-services groups is planning rallies, visits to members of Congress and a letter-writing campaign to try to prevent the immigration bill from becoming law.

"We are going to fight this legislation," said Gustavo Torres, executive director of Casa of Maryland, one of the advocacy groups rallying against the measure. "The immigrant community is very upset about this."

Mr. Torres's group offers job placement services and English classes to thousands of immigrants each year. On Wednesday, as he greeted day laborers looking for work at his center in Silver Spring, Md., Mr. Torres said he could not imagine being forced to turn away the needy because they lacked legal papers.

"We never ask for documentation," he said. "Our mission is to help anyone in need of service, regardless of their immigration status. We are proud of that."

Speaking for the Conference of Catholic Bishops, Bishop Gerald R. Barnes of San Bernardino, Calif., said the measure threatened church workers and doctors as well as ordinary citizens who provided urgent or life-saving assistance to illegal immigrants.

"Current legislation does not require humanitarian groups to ascertain the legal status of an individual prior to providing assistance," Bishop Barnes wrote this month in a letter to Congress. "The legislation would place parish, diocesan and social service program staff at risk of criminal prosecution simply for performing their jobs."

Supporters of the border-security bill say they are trying to crack down on a culture of indifference to the nation's immigration laws that has allowed 11 million illegal immigrants to live in this country.

The legislation would make it a federal crime to live in the United States illegally, which would turn millions of illegal immigrants into felons, ineligible to win any legal status. It would also stiffen the penalties for employers who hire illegal immigrants.

"This legislation aims to prevent illegal immigration and re-establish respect for our immigration laws," said Representative F. James Sensenbrenner Jr., Republican of Wisconsin, who introduced the legislation in the House.

"Those breaking the law will be held accountable," Mr. Sensenbrenner said, "whether they are smugglers cruelly trafficking in human beings, employers hiring illegal workers or alien gang members terrorizing communities."

President Bush has also praised the legislation.

"America is a nation built on the rule of law, and this bill will help us protect our borders and crack down on illegal entry into the United States," Mr. Bush said after the House passed the measure. "Securing our borders is essential to securing the homeland."

In his statement, Mr. Bush did not comment on the provision that is causing such a furor among churches and nonprofit groups. A White House spokesman referred questions about Mr. Bush's position on the matter to the Justice Department.

John Nowacki, a spokesman for the department, declined to answer questions about whether the Bush administration supported the provision.

White House officials have emphasized in recent weeks, however, that Mr. Bush still believes that any immigration legislation should include a guest worker program that would grant millions of undocumented workers the right to work temporarily in this country.

The House bill does not include a guest worker program, but the Senate is expected to consider such a plan early next year. A guest worker plan would give legal status to millions of illegal immigrants. If that were to happen, the measure outlawing assistance to illegal immigrants might be removed or end up having little effect.

But advocates for immigration said they were still deeply disheartened that Mr. Bush and members of Congress had not spoken out against the House measure.

"It's mind-boggling," said Julie Dinnerstein, deputy director for immigration policy at the New York Immigration Coalition, which sponsored last week's rally in New York.

"I think our courts should be focused on people who are doing terrible things," Ms. Dinnerstein said. "Do we need to send a bunch of priests or ministers or nurses to jail?"

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Experts: Roberts, Alito Side With Business

ABC News
Experts: Roberts, Alito Side With Business
Experts, Academics Say Duo of Roberts and Alito on High Court Would Favor Business Interests
By DONNA CASSATA
The Associated Press

WASHINGTON - Business couldn't do any better than Chief Justice John Roberts and Samuel Alito on the Supreme Court. The prospect of the two on the Supreme Court signals to manufacturers and businesses that they will have allies in high places, say academics and business experts.

One represented corporate interests as a private attorney; the other often sided with employers in lawsuits filed by workers. Beyond their decisions in individual cases, the Roberts court also has the potential to craft a consistent philosophy on business issues, something that several academics argue has been lacking in recent years since the departure of Lewis Powell in 1987.

A former corporate lawyer, Powell built a reputation as business' friend during his 15 years on the Supreme Court.

The court's highly selective docket for the current term will give Roberts and Alito, assuming the latter is confirmed, ample opportunity to shape the court. Among the critical issues for companies are the Supreme Court's decisions in antitrust cases, government regulation of land development and the commerce clause.

Certain to catch any court watcher's attention is how the new justices decide on whether to limit punitive damages in lawsuits against corporations.

"Both of them come out of a tradition of reading statutes narrowly. Both of them come out of a tradition of confining congressional power to the proper sphere," said Nathaniel Persily, a professor at the University of Pennsylvania Law School. "In contrast to the more liberal members ... I see them more in favor of business."

Roberts spent more than a decade with the private law firm of Hogan & Hartson, arguing on behalf of Toyota and health maintenance organizations. He wrote friend-of-the-court briefs for the U.S. Chamber of Commerce, participated in its moot court and earned its endorsement.

Alito compiled a record of backing businesses in employee claims of sex and racial discrimination during 15 years on the Philadelphia-based 3rd Circuit U.S. Court of Appeals. Corporate cases were prevalent in the appellate court, whose jurisdiction includes Delaware. More than half a million business entities call Delaware their legal home.

Abortion and social issues dominate the public debate over the Supreme Court, but business matters make up a significant portion of the justices' work.

Of the businesses cases, "while some are constitutional cases, many are statutory interpretations where Congress failed to decide or a written statute it is impossible or difficult to tell what they meant," said Quentin Riegel, vice president for litigation at the National Association of Manufacturers.

In December, the association endorsed Alito, saying, "With justices like Judge Roberts and Samuel Alito on the Supreme Court, we can begin to reduce the exorbitant cost of our legal system that consumes 2.3 percent of our GDP."

Lawyers and court watchers will be keeping close tabs on where Roberts and Alito stand on punitive damages against corporations. Victor E. Schwartz, a lawyer and general counsel to the American Tort Reform Association, wondered what side Roberts and Alito would favor, especially since the court's coalitions have bucked the liberal-conservative lineup on social issues.

"The Supreme Court of the United States, in recent years, has held that the due process clause puts limits on the punitive damages awarded," Schwartz said. He noted that Justice Sandra Day O'Connor has favored limits, but Justices Antonin Scalia, Clarence Thomas, Ruth Bader Ginsburg and John Paul Stevens have not.

While the opinions of Roberts and Alito have been thoroughly dissected, Schwartz said there is only a limited amount of information that could provide a clue on how they would decide on punitive damages.

Roberts, as the new boss on the court, has an opportunity to steer the court on business issues after what one academic described as years of inconsistency. The post-New Deal court favored regulation and the 1970s court feared too much regulation, said David Skeel, a professor of corporate law at the University of Pennsylvania.

"The general thinking about Roberts and Alito, to the extent they have an effect, is they would tend to reign in the SEC's strict interpretation of major regulatory statutes," Skeel said.

One hurdle, however, is business' varied interests.

"Business isn't necessarily committed to the same principles," said John Coffee, a professor at Columbia Law School. "Federalism cuts for or against them."

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There is no such thing as the National Security Agency

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Domestic Spying Doesn't Bother Me

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National Security Agency - Intercept

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Don't Let Them Forget New Orleans

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The Press as the Fourth Branch of Government

huffingtonpost.com
The Press as the Fourth Branch of Government
William E. Jackson Jr.

The AP headline read: "Justice Dept. to Probe Source of 'NYT' Domestic Spying Story." Oh, yes, please let it happen, over one year after The Times says it first had the scoop--prior to the November 2004 presidential election! Without even asking a compliant special court for a warrant, POTUS George W. Bush way back in 2001authorized electronic spying on citizens of this country within this country.

At the request of the National Security Agency (NSA)--which had been all-too-willing under General Michael Hayden to submit to White House pressure in conducting surveillance without a fig leaf of legal authority--may Attorney General and former White House counsel, Alberto Gonzales, be compelled to make the case against "whistleblowers" appalled by the President of the United States shredding of the Constitution and thereby committing an impeachable offense. Bring it on!

Let the courts and the citizens of the Republic determine just which party committed a "shameful act." Open court.

As for The New York Times, here is publisher "Pinch" Sulzberger's chance to go to court over something really important, comparable to the Pentagon Papers, involving genuine whistleblowers. Never mind that the brave executives and editors at 229 West 43rd St. had sat on the story for over a year, allowing reporter James Risen something like proprietary rights over revelation of a mammoth scandal until he returned from "book leave."

In the meantime, all the big-time journalists at newspapers like The Times and The Washington Post (Bob Woodward?) and the Los Angeles Times and the Wall Street Journal, who like to beat their breasts over the primacy of the First Amendment, should get off their rear ends and practice their sleuthing skills--burn some shoe leather and night oil--as they go around the company town of Washington in search of civil servants and military officers whose consciences recognize a higher loyalty to the Constitution over a White House so ill-versed in the ethics and methods of democratic government.

Here is how you do it: In all the relevant national security departments and agencies start with the career officials and military officers just below the top political appointees--get a government organization directory if you don't happen to have one--and get their phone numbers and home addresses. Start calling them up, and knocking on their doors, until you find men and women who are sick to their stomachs over the unchecked usurpation of power and bald-faced lying by their bosses over the GWOT (global war on terrorism) and the decision to invade Iraq. You will find that, once the word gets around that there are journalists who really want to know the facts and are willing to work to obtain them, many of the government employees have more courage than you do, and a greater sense of shame over the acts of their government in the name of security. You will find that there are dozens, maybe hundreds, of government employees at least as willing as journalists to risk their careers.

For starters, here are some key agencies, names, and phone numbers. More instructions will follow, if needed, with helpful hints on what constitutes an impeachable offense (high crimes), gross violations of law, and blatant lying to Congress and the American people.

1. National Security Council

Members: President George W. Bush; Vice President Dick Cheney; Secretary of
State Condoleezza Rice; Secretary of Defense Donald H. Rumsfeld.

Statutory Advisers: Director of National Intelligence John Negroponte; Chairman, of the Joint Chiefs of Staff Gen. Peter Pace. Standing Participants: Secretary of the Treasury John Snow; Chief of Staff to the President Andy Card; Assistant to the President for National Security (Stephen J. Hadley). Et.al.

Phone: 202-456-1414

2. Director of National Intelligence (DNI)

John D. Negroponte; and Principal Deputy Director of National Intelligence, Gen. Michael V. Hayden.

Phone: 202-395-7957

3. CENTRAL INTELLIGENCE AGENCY

Director Porter J. Goss

Phone: 703-482-1100

4. Federal Bureau of Investigation

Director - Robert S. Mueller, III
Deputy Director - John S. Pistole

Phone: 202- 324-3000

5. DEPARTMENT OF DEFENSE (The Pentagon)

Secretary of Defense Donald H. Rumsfeld; Deputy Secretary of Defense Gordon
England, Acting. You will discover that the three military service chiefs
have been moved down in the line of succession, pushed beneath three civilian
undersecretaries from the inner circle of Rumsfeld and who previously worked for
Vice President Cheney--starting with the Under Secretary of Defense for
Intelligence, Stephen Cambone.

Phone: 703-545-6700.

Keep looking and you will find the Chairman of the Joint Chiefs; the chiefs of
staff of the military services; and the heads of the combatant commands. And
don't overlook the Defense Intelligence Agency and Director Vice Admiral Lowell
Jacoby. Phone: 703-695-0071.

6. National Security Agency

Phone: 301-688-6524

7. Secretary of the Department of Homeland Security: Michael Chertoff
Deputy Secretary: Michael P. Jackson

Phone: 202-282-8010

Circulate, members of the Fourth Estate, circulate! There is no story in
Washington that cannot be broken. You are backed up by the resources of powerful
institutions; and mighty historical precedents for how a free press should function in a national security state.

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NY Times Public Editor: Keller, Sulzberger "Stonewalled" Me

HuffingtonPost.com
NY Times Public Editor: Keller, Sulzberger "Stonewalled" Me
RJ Eskow

New York Times Public Editor Byrom Calame today called the paper's explanations of its delay in publishing the NSA story "woefully inadequate," and says he has had "unusual difficulty" getting answers. "For the first time since I became public editor," writes Calame, " the executive editor and the publisher have declined to respond to my requests for information about news-related decision-making." He describes their non-response as "stonewalling."

I addressed five simple questions to the Times when the story first broke. Calame says he sent 28 questions to Bill Keller and Arthur Sulzberger Jr., both of whom refused to respond.

Of my own five questions, they've indirectly and partially answered one so far. I wanted to know under what grounds they considered it appropriate to conceal knowledge of potentially illegal government activity for a year, which the editor addressed in a piece on the story.

Their stated grounds for withholding the story, according to Keller, were that (unnamed) "Administration officials" assured them that all the wiretaps had in fact been done legally, and that breaking the story might help terrorists. Regarding the legality of the wiretaps, Keller wrote that the unnamed officials "assured senior editors of The Times that a variety of legal checks had been imposed that satisfied everyone involved that the program raised no legal questions."

That part of the explanation doesn't wash. If the Times was convinced that "no legal questions" had been raised, then what was the newsworthiness of the story? What would the headline have been: "Wiretaps Conducted Legally, As Were Many Others"?

My other questions have yet to be answered. Calame raised one of my issues - whether they knew of this wiretapping activity before the election - but was given no answer.

Nor is there an answer to this question of mine: "Which officials in the Administration asked you to delay publication of this story?" How could national security be compromised by telling us who persuaded you to hold this story - especially when it's now clear they misled you on the issue of legality? Once again, the Times is protecting dishonest sources at the expense of the public's right to know.

Oh, wait - they have answered another question of mine, if only by example. I asked:

Will the New York Times conduct a public investigation of its decision to delay publication, so it can demonstrate to its readers than the decision was genuinely based on national security -- and not just another case of press manipulation for political purposes?


I think the stonewalling of Byron Calame provides an answer in full to this question.

(thanks to Atrios for an early heads-up on the Calame piece)

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Leftover Questions from 2005

huffingtonpost.com
Leftover Questions from 2005
Norman Horowitz

Wouldn't it be nice for someone to ask our president these questions?

Did the German occupiers of France in the early forties refer to the members of the French resistance as terrorists?

Were the Vietnamese terrorists when they resisted both French and then American occupation?

Why are the people who are fighting an invading army (ours) called terrorists or insurgents?

Why do we still try to connect those people who are fighting in and for their own country to the 9/11 terrorists?

Does it justify continuing to kill and maim innocents in Iraq, by merely saying that we are targeting insurgents?

Why have we not been told what has happened to the Iraqi oil produced while we are hanging out in Iraq?

What do you plan on doing with the Iraqi oil when our mission is complete?

Do you plan on keeping troops in Iraq after we achieve victory?

People who support this war call people who don't "cowards." Is it cowardly to want to end the war?

Why do you accuse those who do not wish to continue the war of "playing politics"?

Why do you still pretend that we are leading a "real" coalition?

more . . .

What will be our mission be once we accomplish our mission?

So much for an "it will never happen Q&A" with the president.

I wish I knew why 2006 would be any better for America then 2005.

Maybe the cable news networks will prosper as "the system" deals with a few minor violations of the constitution, and criminal charges against members of the Executive and Congressional branches of the government

Maybe the New York Times will refuse to give up the names of the patriots (excuse me, the criminals) who blew the whistle on the president about domestic spying without court approval?

Bring back the glory days of the missing White house files, the travel office stuff, and Whitewater. Now that's what I call important!

Happy New Year!

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US to probe mercury risk in canned tuna: paper

Reuters
US to probe mercury risk in canned tuna: paper

CHICAGO (Reuters) - The U.S. Food and Drug Administration will investigate reports that some canned tuna sold in the United States may contain species with potentially dangerous levels of mercury, a top agency official told the Chicago Tribune in an article on Saturday.

David Acheson, the FDA's chief medical officer, was quoted by the paper as saying his agency would review the possibility that some cans of "light tuna" contain yellowfin tuna, a potentially high-mercury species.

"We will definitely look at it through our office of seafood and determine whether there is something that requires further action," Acheson was quoted as saying.

The FDA recommends U.S. consumers eat more light, or skipjack, tuna, than white, or albacore, tuna, because skipjack is a smaller fish that tends to be less tainted by the toxic metal than its larger cousin.

But in a three-part series published earlier this month, the Tribune reported that yellowfin tuna, another large tuna species which the government has identified as a high-mercury fish, was being packaged and sold as light tuna in as many as 180 million cans of each year.

The tuna industry has disputed the Tribune's reports and insists that no one is at risk from the minute amounts of mercury they acknowledge is found in their products.

In the Tribune story Saturday, David Burney, the executive director of the U.S. Tuna Foundation, said the industry would cooperate with the FDA inquiry but called the concerns about yellowfin "a non-issue."

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Russia says it will cut off Ukraine gas

Reuters
Russia says it will cut off Ukraine gas

By Dmitry Zhdannikov and Ron Popeski

MOSCOW/KIEV (Reuters) - Russia said on Sunday it would cut off gas supplies to Ukraine within hours over a price row that strikes at the heart of relations between the two ex- Soviet states and could affect deliveries to western Europe.

A declaration by the Russian gas monopoly Gazprom, likely to be viewed with concern from Washington to Berlin, came soon after the apparent collapse of talks at President Vladimir Putin's residence outside Moscow.

"As a result of a meeting held by President Putin, Gazprom sent a signed contract for gas supplies to Ukraine for 2006," Gazprom spokesman Sergei Kupriyanov told Reuters.

"The new contract contained everything suggested by Putin -- supplying gas to Ukraine in the first quarter at old prices and switching to European prices from the second quarter. Ukraine has turned our proposal down. It means the plan to cut supplies from...10 o'clock (0700 GMT) is still in force."

A spokesman of Neftogaz Ukraine, giving some measure of the confusion of the day, had said moments before that the talks had ended with Moscow agreeing to continue deliveries at present prices for the first quarter of the year. He made no mention of any conditions or Russian objections.

Russia, which supplies 25 percent of western European gas, is due to take over chairmanship of the G8 in January and one of the main themes of its tenure will be security of energy supply. Any suggestion of Moscow using gas supply as a political weapon will cause alarm in the West.

West European states, drawing 80 percent of their Russian deliveries from the same pipeline crossing Ukraine, have expressed concern.

The danger, in theory, is that Ukraine could nonetheless tap off gas to which it feels it is entitled, thus effectively reducing the flow onwards to western Europe.

Kiev says it would not draw on west European supplies, but says Russia must maintain sufficient pressure, or a high enough gas flow, in the system to keep it operating. Moscow insists it can cut Ukrainian gas while safeguarding supply to others.

Moscow seeks a rise in prices to $230 per 1,000 cubic metres from the current $50 -- a level that reflects Soviet-era subsidised rates. Ukraine agrees in principle but wants a transitional period and suggests the Kremlin approach mirrors disapproval of Kiev's pro-Western government.

BROTHER NATION

Moscow says it will cut only that element of supply that would have been destined for Ukraine itself. Deliveries meant for Europe would continue at agreed levels.

Earlier in the Day, Putin, whose increasingly assertive foreign policy appears aimed at regaining some of the influence Moscow has lost in former Soviet republics since the collapse of the Soviet Union in 1991, seemed conciliatory. Russia and Ukraine formed the industrial axis of the old Soviet superpower and ties between the two remain key to regional stability.

"Above all Ukraine is a brother nation and we must think about the whole relationship between Russia and Ukraine," Putin, betraying no emotion, told a meeting of his Security Council.

"Should there be no clear reply we will consider that our offer has been rejected," he said.

Ukrainian officials accuse Moscow of using the issue to punish Kiev for its drive to join both the European Union and NATO a year after mass protests helped propel Yushchenko to an election victory -- beating a Kremlin-backed candidate.

A statement on Yushchenko's website (www.president.gov.ua) said he believed the two sides were ready to negotiate, but made no reference to the Kremlin proposal.

The president has put $80 as a fair price and says Gazprom varies rates considerably -- $120 for the Baltic states, $110 for ex-Soviet Caucasus states and $47 for pro-Russian Belarus.

Italian oil and gas firm Eni said it had been warned by Gazprom that supplies could be disrupted. Central European states set up contingency plans. Poland said it had at least a week's reserves of gas to guard against supply interruptions.

The EU has called a January 4 meeting of energy officials from its member states to work out a common approach.

(Additional reporting by Meg Clothier in Moscow, Olena Horodetska in Kiev)

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Report: Group linked to DeLay funded by Abramoff clients

Reuters
Report: Group linked to DeLay funded by Abramoff clients

WASHINGTON (Reuters) - An organization with close ties to Rep. Tom DeLay was funded largely by corporations associated with former lobbyist Jack Abramoff, the Washington Post reported on Saturday, citing tax records and quoting former associates of the group.

Tax records, other documents and interviews bring into question the purpose of the U.S. Family Network, which functioned mostly by collecting funds from domestic and foreign businesses whose interests coincided with DeLay's activities while he was serving as House majority whip from 1995 to 2002, and as majority leader from 2002 until the end of September, the paper wrote.

During its five-year existence, the U.S. Family Network raised $2.5 million, but kept its donor list secret, the paper reported. That list, obtained by the Washington Post, showed that $1 million of its revenue came in a single 1998 check from a now-defunct London law firm whose former partners did not identify the money's origins.

According to the paper, two former associates of Edwin Buckham, the Texas Republican Delay's former chief of staff and organizer of the U.S. Family Network, said Buckham told them the funds came from Russian oil and gas executives. Abramoff had been working closely with two such Russian energy executives on their Washington agenda.

A spokesman for DeLay, who is fighting in a Texas state court unrelated charges of illegal fundraising, denied that the contributions influenced the former House majority leader's political activities, the paper wrote.

Russian energy executives who worked with Abramoff denied knowing anything about the million-dollar London transaction described in tax documents, according to the Washington Post.

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New Years Sieve

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Chalabi Named Iraq Oil Minister

washingtonpost.com
Chalabi Named Iraq Oil Minister
Fuel Crisis Spurs Mandatory Leave For Incumbent

By Jonathan Finer and Naseer Nouri
Washington Post Foreign Service

BAGHDAD, Dec. 30 -- As a fuel crisis deepened in Iraq, the government replaced its oil minister with controversial Deputy Prime Minister Ahmed Chalabi, whose poor performance in the Dec. 15 elections was a setback in his recent attempt at political rehabilitation.

The oil minister, Ibrahim Bahr Uloom, was put on a mandatory, month-long leave. He had previously threatened to resign over the government's recent decision to increase gasoline prices sharply, a move that has outraged motorists and sparked attacks on gas stations and fuel convoys.

Violence has escalated across Iraq since the elections. On Friday, two U.S. soldiers were killed, one by a bomb south of Baghdad and another by small-arms fire in the western city of Fallujah. Two mortar shells hit near a bus station in the capital, killing five people and wounding 24, police at the scene said.

Threats by insurgents seizing on the unpopularity of the gasoline price increase led to a shutdown this month of the country's most productive oil refinery, in Baiji, north of Baghdad. Assim Jihad, an Oil Ministry spokesman, said the shutdown would cost $20 million a day until the refinery reopened. Meanwhile, foul winter weather has halted oil exports from the southern city of Umm Qasr, Iraq's only major seaport. Many of Iraq's largest power plants, already struggling to meet even a fraction of the country's energy demands, run on refined fuels.

"If these issues are not solved soon, the country will be facing an uncontrollable situation," Jihad said. "Dr. Chalabi will be here for the short term, but this will need to be solved by the new government, by the Ministry of Defense and by the coalition forces."

Chalabi, whose government portfolio already includes heading the country's energy committee and overseeing security for oil infrastructure such as refineries and pipelines, will temporarily take the reins of Iraq's only major industry. He had briefly led the Oil Ministry earlier this year while the current government was being assembled.

Jihad suggested that Uloom would probably resign rather than return, meaning Chalabi's appointment would last until the parties that prevailed in the recent elections formed a new government.

Negotiations toward that end continued Friday in the northern city of Sulaymaniyah between Abdul Aziz Hakim, who heads the Supreme Council for the Islamic Revolution in Iraq, a dominant Shiite Muslim party, and Kurdish leaders. Also Friday, an ally of the influential Shiite cleric Moqtada Sadr, whose political followers joined the Supreme Council's election ticket, said Shiite parties should pursue an alliance with Iraq's Sunni Arabs, rather than with Kurds.

Iraq's leaders have said no major decisions would be made while the composition of a new governing coalition was being determined.

"I don't think there will be any drastic changes," said Chalabi aide Haidar Moussawi when asked about Chalabi's intentions for his new post. "But I will say we have seen a lot of problems facing the industry with security and weather, and the focus will be on trying to get things under control and exports back to a level Iraq can do."

Once tabbed by some U.S. officials as a future leader of Iraq, Chalabi suffered a series of blows following the U.S.-led invasion, beginning when intelligence he provided to the Pentagon about Iraq's alleged weapons of mass destruction proved false. He was later accused of passing U.S. secrets to the government of Iran. But in recent months, several U.S. officials have praised Chalabi's technical expertise and ability to facilitate agreements among feuding factions within the government.

"He has proven himself quite capable and experienced in dealing with all aspects of Iraq's energy sector and is well-qualified for this position," a U.S. official said on the condition that he not be named because he was commenting on an Iraqi government decision.

Based on preliminary results from the December elections, Chalabi received 8,645 votes in Baghdad, well below the threshold a top U.N. official suggested this week would be required to win a seat.

Moussawi said Friday that Chalabi could still end up in the parliament, depending on how officials interpret a technical detail of election rules relating to how remaining seats are allocated after each party meeting a specific threshold is awarded its seats.

"There is still confusion, even today at the election commission, about this, but we are hearing the party will have at least one seat," Moussawi said.

Meanwhile, in Baghdad, mortar shells fell a few minutes apart late Friday afternoon -- one on a cafe and the other on the roof of a car -- in a crowded section of the city center. Sadoon Ali, 48, was playing backgammon in a nearby restaurant when he heard the explosion. "We were standing there wondering what happened when another explosion surprised us," he said.

A man who police said was drunk and angry because a friend had been wounded in the explosion began firing shots into a crowd, sending people scattering in all directions and wounding one man in the left leg.

Also in Baghdad, the government of Sudan said it would close its embassy to meet a demand issued by the insurgent group al Qaeda in Iraq, which claimed to have abducted six Sudanese citizens last week, the Associated Press reported. Five of the men were shown in a video released by the group in recent days. Insurgents have carried out a wave of abductions and attacks that they say is designed to compel diplomats to leave Iraq.

Special correspondent Omar Fekeiki contributed to this report.

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