In August, the corporate media was falling all over itself with breathless coverage on how Russia is interfering in the US election. Back then, stories citing experts suggested that voting machines were vulnerable to tampering that could change the outcome of the vote. A month later, something curious happened.
By September, government officials were doing all they could to tamp down those concerns, and the media duly reported their reassurances.
Should the public be comforted that election mischief will be homegrown?
The articles, usually citing active government officials, serve a dual purpose in reassuring the public: First, there is no way Russia can hack the election, despite cyber hacks in the Illinois and Arizona voter registration banks. Meanwhile, the message is also to insist Russian President Vladimir Putin is still giving orders to disrupt US cyberspace. This latter message culminated in the Obama administration publicly blaming the Russian government for trying to influence the election in early October.
The Post cites two major obstacles for potential (Russian) disruption of our election. One is the difference between the “voter system” and the “election system.” The voter system involves registered voter databases throughout the country, while the election system refers to voting machines and paper ballots.
According to executive director Merle King of the state-funded Center for Election Systems in Georgia, the public conflates these two issues about the election, and that leads to a lot of confusion.
The second hindrance for potential hackers is the decentralized voting process, the Post reported. A major positive for vote security, according to the Post, is that local jurisdictions set their own rules for how votes will be counted.
This claim is buttressed by a letter sent by state election officials to Florida voters which notes the public safeguards already in place for our voting process — including (1) layers of encryption for voting machines, (2) thumb drive backups of votes, (3) lack of internet connection to voting machines, and (4) a review of votes after an election.
The Times also highlights the decentralized nature of the voting system as a safeguard against tampering. However, while the Post viewed the system as sophisticated, the Times saw the state-run and community-monitored systems as too cumbersome to be susceptible to any hacking.
Quoted again is Merle King, along with Connecticut Secretary of State Denise Merrill, and FBI Director James Comey. Pamela Smith of Verified Voting — an organization that highlights the susceptibility to election rigging — is also sourced to reassure readers that the upcoming election is safe, thanks to an uptick in paper ballot usage.
Like the previous articles in the Washington Post and LA Times, The Hill presents the decentralized process of US elections as an impenetrable obstacle to Russian hacking. Bolstering the claims of election security in the piece are Florida’s Secretary of State Ken Detzner, Colorado’s Secretary of Wayne Williams, Pennsylvania Department of State spokesperson Wanda Murren, and Wisconsin’s Administrator of State Elections Division Michael Hass. The only non-governmental official quoted is Chris Porter, an administrator of strategic intelligence at cybersecurity firm FireEye Horizons.
Porter cited examples of Russian election tampering in the Ukraine and efforts to “create scandal,” despite their inability to hack the election.
The Chicago Tribunegot its turn on September 14, quoting Assistant to the President for Homeland Security and Counterterrorism Lisa Monaco, who reiterated the safety of the election thanks to the decentralization of the voting process.
These assertions of election security and passive blame on Russia culminated in early October with the Obama administration publicly accusing “senior-most officials in Russia” of tampering with the election, despite their claimed inability to do so.
Taking a Screwdriver to the Election
Let’s go back to August to see why certain experts said that elections could indeed be tampered with.
Princeton professor Andrew Appel made headlines in August after hacking the Sequoia AVC Advantage electronic voting machine in seven minutes. Such machines are used in Louisiana, New Jersey, Virginia and Pennsylvania.
“[Appel] summoned a graduate student named Alex Halderman, who could pick the machine’s lock in seven seconds. Clutching a screwdriver, he deftly wedged out the four ROM chips — they weren’t soldered into the circuit board, as sense might dictate — making it simple to replace them with one of his own: A version of modified firmware that could throw off the machine’s results, subtly altering the tally of votes, never to betray a hint to the voter. The attack was concluded in minutes.”
Former government officials working in the cyber sphere have also warned of election tampering. Former White House counterterrorism czar Richard Clarke asserted: “Yes, It’s Possible to Hack the Election” on August 18.
“I have had three jobs that together [under Bill Clinton, George W. Bush, and Barack Obama] taught me at least one thing: If it’s a computer, it can be hacked.”
Special Interests and the Machines
Clarke sees the decentralized election system as the access point for potential tampering —rather than a potential safeguard. While there are safeguards, such as the voter tabulation through paper ballots, almost no state exclusively uses paper ballots. Instead, voting machines — even allowing votes from home — produce no paper ballot record and thus no way to ensure the “correct” vote was cast.
Furthermore, Clark argues paper ballot receipts from the voting machines are only used in the case of a recount — something today’s sophisticated hackers are aware of and would seek to avoid.
“My first reaction to all this government reassurance was ‘are you kidding me?’” Dr. Jonathan Simon of the Election Defense Alliance told WhoWhatWhy. “There is all this concern about outside hacking, but absolutely no talk of internal rigging.”
While Simon points out that there are many election safeguards, connections to special interests by those that control voting machines provides easy access to election rigging.
“Anyone who could stand to profit off certain policies — the Koch brothers, for example — have a better chance of rigging the election due to their connections to voting systems like Dominion, SES and their satellite companies,” Simon explained. “Russia, China, nor any terrorist group in the Middle East have a connection like that.”
Despite encryption and the lack of an Internet connection, Simon claims that there are other ways to change voting results.
“In a memory card, which is used in optical scanner-verified voting, three lines of code to flip votes one way or another can be entered into 7,000 or 8,000 lines of code virtually without detection. Multiple memory cards can be manipulated like this at the push of a button.”
Why Overlook Potential Domestic Hacking?
With articles by outside experts in August claiming the election could be hacked, followed in September with articles by government officials claiming it could not be — by Russia — it raises the question: why overlook domestic tampering?
“These are relatively unsophisticated and simple ways to rig the election,” Simon concluded.
Hillary Clinton may be enjoying a comfortable lead in national polls, but she is far from enjoying a comfortable night’s sleep given the ever-widening maelstrom of scandals engulfing her presidential bid. And while Clinton delights in bloviating about a decades-long “vast, right wing conspiracy” against her, the fact is that it’s the Clinton political machine’s long and storied track record of criminality, duplicity, and corruption that haunts her like Lincoln’s ghost silently skulking through White House bedrooms.
The latest in a string of embarrassing scandals is centered on the powerful Clinton Foundation, and the obvious impropriety of its acceptance of large donations from foreign governments (and wealthy individuals connected to them), especially those governments universally recognized as oppressive dictatorships whose foreign policy orientation places them squarely in the US orbit.
Of particular note are the Gulf monarchies such as Saudi Arabia and Qatar whose massive donations belie the fact that their oppression of women runs contradictory to Clinton’s self-styled ‘feminism’ and belief “that the rights of women and girls is the unfinished business of the 21st Century.” Is collaborating with feudal monarchies whose subjugation of women is the stuff of infamy really Clinton’s idea of feminism? Or, is it rather that Clinton merely uses issues such as women’s rights as a dog whistle for loyal liberals while groveling before the high councilors of the imperial priesthood?
What the Clinton Foundation hullabaloo really demonstrates is that Clinton’s will to power is single-minded, entirely simpatico with the corruption of the military-industrial-financial-surveillance complex; that she is a handmaiden for, and member of, the ruling establishment; that Clinton represents the marriage of all the worst aspects of the political class. In short, Clinton is more than just corrupt, she is corruption personified.
Clinton’s Dirty Dealing and Even Dirtier Laundry
In a hilariously pig-headed, but rather telling, statement, former President Bill Clinton responded to allegations of impropriety with the Clinton Foundation by saying, “We’re trying to do good things…If there’s something wrong with creating jobs and saving lives, I don’t know what it is. The people who gave the money knew exactly what they were doing. I have nothing to say about it except that I’m really proud.”
Leaving aside the fact that such an arrogant comment demonstrates Bill Clinton’s complete contempt for ethics and the basic standards of proper conduct, the salient point is that the argument from the Clintons is that the foundation is inherently good, that it helps people around the world, and that, as such, it can’t possibly be corrupt and unethical. Where there’s smoke, there’s fire – except when it comes to the Clintons who stand proudly enveloped in billowing clouds of smoke swearing up and down that not only is there no fire, but anyone who mentions the existence of flames is both a sexist and Trump-loving Putin stooge.
But indeed there is a fire, and it is raging on the American political scene. And nowhere is the heat more palpable than in the deserts of the Middle East where wealthy benefactors write massive checks for access to America’s 21st Century Queen of Mean (apologies to Leona Helmsley).
Consider the 2011 sale of $29 billion worth of advanced fighter jets to Saudi Arabia, a gargantuan deal that made the feudal monarchy into an overnight air power. Were there any doubts as to the uses of the hardware, look no further than the humanitarian nightmare that is Yemen, a country under relentless air war carried out by the Saudis. And, lo and behold, the Saudis had been major contributors to the Clinton Foundation in the years leading up to the sale. And it should be equally unsurprising that just weeks before the deal was finalized, Boeing, the manufacturer of the F-15 jets that were the centerpiece of the massive arms deal, donated $900,000 to the Foundation.
Of course, according to Bubba and Hil, it’s all conspiracy theory to suggest that the Clinton Foundation is essentially a pay-for-play scheme in which large sums of money translate into access to the uppermost echelons of state power in the US. As the International Business Times noted:
The Saudi deal was one of dozens of arms sales approved by Hillary Clinton’s State Department that placed weapons in the hands of governments that had also donated money to the Clinton family philanthropic empire…Under Clinton’s leadership, the State Department approved $165 billion worth of commercial arms sales to 20 nations whose governments have given money to the Clinton Foundation…That figure — derived from the three full fiscal years of Clinton’s term as Secretary of State (from October 2010 to September 2012) — represented nearly double the value of American arms sales made to the those countries and approved by the State Department during the same period of President George W. Bush’s second term.
The Clinton-led State Department also authorized $151 billion of separate Pentagon-brokered deals for 16 of the countries that donated to the Clinton Foundation, resulting in a 143 percent increase in completed sales to those nations over the same time frame during the Bush administration. These extra sales were part of a broad increase in American military exports that accompanied Obama’s arrival in the White House. The 143 percent increase in U.S. arms sales to Clinton Foundation donors compares to an 80 percent increase in such sales to all countries over the same time period.
Additionally, as Glenn Greenwald explained earlier this year,
The Saudi regime by itself has donated between $10 million and $25 million to the Clinton Foundation, with donations coming as late as 2014, as she prepared her presidential run. A group called “Friends of Saudi Arabia,” co-founded “by a Saudi Prince,” gave an additional amount between $1 million and $5 million. The Clinton Foundation says that between $1 million and $5 million was also donated by “the State of Qatar,” the United Arab Emirates, and the government of Brunei. “The State of Kuwait” has donated between $5 million and $10 million.
The sheer dollar amounts are staggering. Perhaps then it comes as no surprise just why nearly every single influential figure in the military-industrial-financial-surveillance complex – from General John Allen to death squad coordinator extraordinaire John Negroponte, from neocon tapeworms such as Max Boot, Robert Kagan, and Eliot Cohen to billionaire barbarocrats like the Koch Brothers, George Soros, and Warren Buffett – is backing Hillary Clinton. Not only is she good for Empire, she’s good for business. And ultimately, that’s what this is all about, isn’t it?
But of course, Hillary’s devotion to the oil oligarchs of Saudi Arabia and the Gulf goes much deeper than simply an exchange of money for weapons. In fact, Hillary is deeply committed to the Saudi royal family’s foreign policy outlook and tactics, in particular the weaponization of terrorism as a means of achieving strategic objectives.
Libya provides perhaps the paragon of Clintonian-Saudi strategy: regime change by terrorism. Using terror groups linked to Al Qaeda and backed by Saudi Arabia, Clinton’s State Department and the Obama Administration managed to topple the government of Muammar Gaddafi, thereby throwing the former “jewel of Africa” into turmoil and political, economic, and social devastation. To be fair, it was not the Saudis alone involved in fomenting war in Libya, as Hillary’s brothers-from-other-mothers in Qatar and the United Arab Emirates were also directly involved in sowing the seeds of the current chaos in the country.
And of course, this strategic partnership between Clinton and the Gangsters of the Gulf extends far beyond Libya. In Syria, Clinton’s stated policies of regime change and war are aligned with those of Riyadh, Doha, and Abu Dhabi. And, of course, it was during Clinton’s tenure at the State Department that US intelligence was involved in funneling weapons and fighters into Syria in hopes of doing to Syria what had already been done to Libya.
Huma Abedin: Clinton’s Woman in Riyadh
Just in case all the political and financial ties between Clinton and the Gulf monarchies wasn’t enough to make people stop being #WithHer, perhaps the role of her closest adviser might do the trick. Huma Abedin, Clinton’s campaign chief of staff, has long-standing ties to Saudi Arabia, the country where Huma spent her childhood from the age of two. As a Vanity Fair exposé revealed earlier this year:
When Abedin was two years old, the family moved to Jidda, Saudi Arabia, where, with the backing of Abdullah Omar Nasseef, then the president of King Abdulaziz University, her father founded the Institute of Muslim Minority Affairs, a think tank, and became the first editor of its Journal of Muslim Minority Affairs…After [Abedin’s father] Syed died, in 1993, his wife succeeded him as director of the institute and editor of the Journal, positions she still holds… Abdullah Omar Nasseef, the man who set up the Abedins in Jidda…is a high-ranking insider in the Saudi government and sits on the king’s Shura Council, there are claims that Nasseef once had ties to Osama bin Laden and al-Qaeda—a charge that he has denied through a spokesman—and that he remains a “major” figure in the Muslim Brotherhood. In his early years as the patron of the Abedins’ journal, Nasseef was the secretary-general of the Muslim World League, which Andrew McCarthy, the former assistant U.S. attorney who prosecuted the “Blind Sheik,” Omar Abdel Rahman, in the wake of the 1993 World Trade Center bombing, claims “has long been the Muslim Brotherhood’s principal vehicle for the international propagation of Islamic supremacist ideology.”
Consider the implications of this information: Clinton’s closest adviser comes from a family connected at the highest levels with the Saudi royal family as well as the Muslim Brotherhood. While right wing pundits portray the Muslim Brotherhood as some sort of straightforward international terror organization, the reality is much more complex as the Brotherhood is more an international political movement whose tentacles stretch into nearly every corner of the Muslim world. Its vast reserves of cash and political influence, backed by Gulf monarchies such as Qatar, allows the Brotherhood to peddle influence throughout the West, while also being connected to more radical salafist elements. An obvious two-for-one for Clinton.
In effect then, Abedin represents a bridge connecting Hillary with both the ruling elites in Riyadh, as well as influential clerics, businesspeople, and political leaders throughout the Middle East. Perhaps then it makes sense why Abedin, in contravention of every standard of ethics, was employed by Teneo Holdings – a pro-Clinton consultancy founded by former Clinton aide Doug Band – while also working for the State Department. Such ethical violations are as instinctive for Hillary as breathing, or calling children superpredators.
Trump, Assange, Putin, and Clinton’s Sleight of Hand
Despite being embroiled in multiple scandals, any one of which being enough to sink the campaign of most other candidates, Clinton and her army of fawning corporate media sycophants, have attempted to deflect attention away from her own misdeeds, corruption, and nefarious ties by instead portraying everyone who opposes them as puppets, stooges, and useful idiots.
Let’s begin with Republican nominee and gasbag deluxe, Donald Trump, who Clinton trolls have attempted to portray as a stooge of Russian President Putin. While it’s indeed quite likely that the Kremlin sees Trump as far less of a threat to Russia’s interests than Clinton – just look at Clinton’s roster of neocon psychopath supporters to see that Putin has a point – the notion that Trump is somehow a creation of Putin, or at the very least is working for him is utterly absurd.
And the “evidence”? Trump’s connections with wealthy Russian oligarchs. I suppose those who have made their homes under rocks these last 25 years might not know this, but nearly every billionaire investor has gone to Russia in that time, forged ties with influential Russians, and attempted to make money by stripping clean the bones of what was once the Soviet Union. Sorry Naomi Klein, I guess the Clintonistas expect no one to have read Shock Doctrine which details the sort of disaster capitalism run amok that took place in Russia in the 1990s.
And then, of course, there’s that great confabulator Julian Assange who has also been smeared as a Putin puppet by the #ImWithHer media somnambulists. I guess the lords of corporate capital didn’t like the fact that Assange and WikiLeaks have managed to expose countless dirty deeds by Clinton’s Tammany Hall of the 21stCentury. From using the DNC as a political appendage of the Clinton campaign (as revealed by the WikiLeaks dump of DNC emails) to his recent promise to make public the “most interesting and serious” dirt on Hillary, Assange has become a thorn in the side – or thumb in the eye, as it were – for Hillary.
And what would a rundown of the specters haunting Clinton’s dreams be without mention of the rabid bear of Russia, big bad Vlad? Clinton recently referred to Putin as the “grand godfather of this global brand of extreme nationalism.” Leaving aside the asinine phraseology, Clinton’s attacks on Putin reveal the weakness of the Democratic nominee, the hollowness of her arguments, and the unmitigated gall of a hypocrite for whom casting stones in glass houses is second nature.
For, at the very moment that she takes rhetorical swipes at Putin, Clinton herself is implicated in a worldwide network of extremism that promotes terrorism, rains death and destruction on millions of innocent civilians, and moves the world closer to global conflict. If Putin represents the éminence grise of a “global brand of extreme nationalism,” then Clinton is the fairy godmother of global extremism and terror. It’s a good thing she has access to the best personal grooming products Goldman Sachs money can buy as it is not easy to wash decades-worth of blood off your hands.
And so, the quadrennial danse macabre that is the US presidential election has turned into an embarrassing sideshow of dull-witted infantilism. But amid the idiocy there is wanton criminality and corruption to be exposed before the world. For while Trump is undoubtedly the bearded lady of America’s freak show, Hillary is the carnival barker.
She knows the ring toss and other games are rigged, but she coaxes the feeble-minded to play nonetheless. She knows the carnies are drunk and reckless, but she urges the children to pay for another ride anyway. She understands that her job is to sell a rigged game, and to call security when someone challenges her lies. And, unfortunately, whether you want it or not, the Hillary Roadshow is coming to a town, or country, near you.
Eric Draitser is the founder of StopImperialism.org and host of CounterPunch Radio. He is an independent geopolitical analyst based in New York City. You can reach him at ericdraitser@gmail.com.
2016 is the year many, many Americans began to question whether or not our elections, and to a lesser extent, our democracy (insert “it’s a constitutional republic, big difference!” here) are rigged. As I’ve argued many times in the past year, there is plenty of evidence suggesting these skeptical Americans are, indeed, onto something with their suspicions.
But the corporate media has come out in defense of America’s “democracy” — and political elites are defending the system, too. In the wake of Trump’s recent rhetoric regarding the “rigged” system, the ruling class of the United States is peddling the fiction that somehow Trump’s irresponsible sensationalism is solely to blame for the newfound feelings of illegitimacy plaguing our elections.
“Trump’s [rigged election] words are having an effect. Just 38 percent of Trump supporters believe their votes will be counted accurately, and only 49 percent of all registered voters are ‘very confident’ their votes will be tabulated without error, according to a Pew Research survey last week.”
You see, according to the corporate media, the only reason Americans think their elections are rigged in one way or another is because Trump said so. It has nothing to do with the explosive DNC email leaks that showed the Democrats manipulated the corporate media in favor of Hillary Clinton. It has nothing to do with superdelegates who get to override the voters. It has nothing to do with the Republican establishment choosing to shut down Colorado’s primary, handing all the delegates to Ted Cruz. It has nothing to do with now-former DNC chairwoman Debbie Wasserman Schultz admitting the role of superdelegates is to fend off grassroots political challengers. It also must have nothing to do with an RNC committee member openly wondering why the Republican Party has primary elections to begin with since the party chooses the nominee anyway — not the voters. That makes sense, right?
And while Bernie Sanders fades into the matrix with his endorsement of Hillary Clinton and recent decision to hit the campaign trail for her, many of his supporters feel the same way Trump supporters feel. The Democratic primary was rife with inconsistencies, voter suppression, and suspect voting machines — all of which have culminated into several high-profile lawsuits alleging wrongdoing by the DNC. Coincidentally, Shawn Lucas, the man who was spearheading one of the lawsuits, was recently found dead on his bathroom floor. But this is all Trump’s fault,right? Or maybe Russia’s?
But rest assured, as POLITICO notes, even though voting inconsistencies became famous in the 2000 Bush v. Gore presidential election, Gore was a good boy and didn’t bother questioning the findings. He did the right thing and conceded defeat despite vocal cries from his ardent supporters that he contest the election.
What’s interesting is that according to the Emmy-nominatedHBO documentary Hacking Democracy, which followed the trail of investigators in Florida in an attempt to get to the bottom of the voter inconsistencies, the Gore campaign was made aware of verifiable issues with the vote counts but still encouraged the investigators to drop their cause and shut up. They were silenced by the candidate they were trying to help. This is what Trump should do if there are any questionable results in November, POLITICO suggests.
And boy, does Trump hate the media. He says it all the time. So much so that POLITICO thinks Trump could single-handedly do irreparable damage to the institution of mainstream media this election. This is yet another fiction being peddled by the self-serving corporate media. Instead of owning up to its waning trust among the general public, they would rather play the blame game. You see, long before Trump hit the 2016 political circuit, Americans had already started to lose trust in the corporate media.In September of 2014, Anti-Media reported, Americans’ trust in the media had reached an all-time low. As of October of 2015, only 7 percent of the country had a “great deal” of trust in the mainstream media — but thismust be Trump’s fault. Or maybe we can pin this on Russia, too.
Another recent development that in my opinion doesn’t prove the elections are rigged per se — but rather, that they are illegitimate — is the overwhelmingly small turnout of voters who nominated both Donald Trump and Hillary Clinton. The two of them combined only attracted nine percent of the general public to vote for them in the primaries, meaning less than a tenth of the U.S. population anointed the nominees, one of whom will eventually be ruling over all Americans. Americans are hardly excited to get out and vote in elections nowadays — possibly because after years of believing unrepresentative politicians’ empty promises, they think the whole process has become futile.
But none of this really matters, anyway, since the U.S. is no longer a democracy or constitutional republic. It’s an oligarchy. In short, as a 2014 Princeton University study concluded, “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.”
But again, as POLITICO notes, it’s not the actions of the oligarchy or the corporate media that have led voters to question the legitimacy of the system — it’s Trump’s words.
“…[M]any Republicans [elites] fear that Trump’s efforts to diminish people’s confidence in mainstream media, fair elections and politics itself will have a lasting impact,” POLITICO observes.
“‘The damage this is going to do to various institutions is going to be long term,’ said Charlie Sykes, a prominent conservative radio host in Milwaukee who has been one of the country’s most outspoken and consistent anti-Trump voices. ‘How do you restore civil discourse after all of this? He is a postmodern authoritarian who’s in the process of delegitimizing every institution — the media, the ballot box — that can be a check on him.’”
But what if it’s the oligarchic political system and the corporate media that have delegitimized themselves, and not some manufactured Trump conspiracy that has suddenly turned half the country into skeptical anti-establishment rebels? Maybe the corporate media’s collusion with the corporate government is the real conspiracy. Or maybe we should stop complaining and just blame Russia and Julian Assange — that seems a lot more convenient to the New York Times.
In the summer of 1972, state-of-the-art campaign spying consisted of amateur burglars, armed with duct tape and microphones, penetrating the headquarters of the Democratic National Committee. Today, amateur burglars have been replaced by cyberspies, who penetrated the DNC armed with computers and sophisticated hacking tools.
Where the Watergate burglars came away empty-handed and in handcuffs, the modern- day cyber thieves walked away with tens of thousands of sensitive political documents and are still unidentified.
Now, in the latest twist, hacking tools themselves, likely stolen from the National Security Agency, are on the digital auction block. Once again, the usual suspects start with Russia – though there seems little evidence backing up the accusation.
In addition, if Russia had stolen the hacking tools, it would be senseless to publicize the theft, let alone put them up for sale. It would be like a safecracker stealing the combination to a bank vault and putting it on Facebook. Once revealed, companies and governments would patch their firewalls, just as the bank would change its combination.
A more logical explanation could also be insider theft. If that’s the case, it’s one more reason to question the usefulness of an agency that secretly collects private information on millions of Americans but can’t keep its most valuable data from being stolen, or as it appears in this case, being used against us.
In what appeared more like a Saturday Night Live skit than an act of cybercrime, a group calling itself the Shadow Brokers put up for bid on the Internet what it called a “full state-sponsored toolset” of “cyberweapons.” “!!! Attention government sponsors of cyberwarfare and those who profit from it !!!! How much would you pay for enemies cyberweapons?” said the announcement.
The group said it was releasing some NSA files for “free” and promised “better” ones to the highest bidder. However, those with loosing bids “Lose Lose,” it said, because they would not receive their money back. And should the total sum of the bids, in bitcoins, reach the equivalent of half a billion dollars, the group would make the whole lot public.
While the “auction” seemed tongue in cheek, more like hacktivists than Russian high command, the sample documents were almost certainly real. The draft of a top-secret NSA manual for implanting offensive malware, released by Edward Snowden, contains code for a program codenamed SECONDDATE. That same 16-character string of numbers and characters is in the code released by the Shadow Brokers. The details from the manual were first released by The Intercept last Friday.
The authenticity of the NSA hacking tools were also confirmed by several ex-NSA officials who spoke to the media, including former members of the agency’s Tailored Access Operations (TAO) unit, the home of hacking specialists.
“Without a doubt, they’re the keys to the kingdom,” one former TAO employee told the Washington Post. “The stuff you’re talking about would undermine the security of a lot of major government and corporate networks both here and abroad.” Another added, “From what I saw, there was no doubt in my mind that it was legitimate.”
Like a bank robber’s tool kit for breaking into a vault, cyber exploitation tools, with codenames like EPICBANANA and BUZZDIRECTION, are designed to break into computer systems and networks. Just as the bank robber hopes to find a crack in the vault that has never been discovered, hackers search for digital cracks, or “exploits,” in computer programs like Windows.
The most valuable are “zero day” exploits, meaning there have been zero days since Windows has discovered the “crack” in their programs. Through this crack, the hacker would be able to get into a system and exploit it, by stealing information, until the breach is eventually discovered and patched. According to the former NSA officials who viewed the Shadow Broker files, they contained a number of exploits, including zero-day exploits that the NSA often pays thousands of dollars for to private hacking groups.
The reasons given for laying the blame on Russia appear less convincing, however. “This is probably some Russian mind game, down to the bogus accent,” James A. Lewis, a computer expert at the Center for Strategic and International Studies, a Washington think tank, told the New York Times. Why the Russians would engage in such a mind game, he never explained.
Rather than the NSA hacking tools being snatched as a result of a sophisticated cyber operation by Russia or some other nation, it seems more likely that an employee stole them. Experts who have analyzed the files suspect that they date to October 2013, five months after Edward Snowden left his contractor position with the NSA and fled to Hong Kong carrying flash drives containing hundreds of thousands of pages of NSA documents.
So, if Snowden could not have stolen the hacking tools, there are indications that after he departed in May 2013, someone else did, possibly someone assigned to the agency’s highly sensitive Tailored Access Operations.
In December 2013, another highly secret NSA document quietly became public. It was a top secret TAO catalog of NSA hacking tools. Known as the Advanced Network Technology (ANT) catalog, it consisted of 50 pages of extensive pictures, diagrams and descriptions of tools for every kind of hack, mostly targeted at devices manufactured by U.S. companies, including Apple, Cisco, Dell and many others.
Like the hacking tools, the catalog used similar codenames. Among the tools targeting Apple was one codenamed DROPOUTJEEP, which gives NSA total control of iPhones. “A software implant for the Apple iPhone,” says the ANT catalog, “includes the ability to remotely push/pull files from the device. SMS retrieval, contact-list retrieval, voicemail, geolocation, hot mic, camera capture, cell-tower location, etc.”
Another, codenamed IRATEMONK, is, “Technology that can infiltrate the firmware of hard drives manufactured by Maxtor, Samsung, Seagate and Western Digital.”
In 2014, I spent three days in Moscow with Snowden for a magazine assignment and a PBS documentary. During our on-the-record conversations, he would not talk about the ANT catalog, perhaps not wanting to bring attention to another possible NSA whistleblower.
I was, however, given unrestricted access to his cache of documents. These included both the entire British, or GCHQ, files and the entire NSA files.
But going through this archive using a sophisticated digital search tool, I could not find a single reference to the ANT catalog. This confirmed for me that it had likely been released by a second leaker. And if that person could have downloaded and removed the catalog of hacking tools, it’s also likely he or she could have also downloaded and removed the digital tools now being leaked.
In fact, a number of the same hacking implants and tools released by the Shadow Brokers are also in the ANT catalog, including those with codenames BANANAGLEE and JETPLOW. These can be used to create “a persistent back-door capability” into widely used Cisco firewalls, says the catalog.
Consisting of about 300 megabytes of code, the tools could easily and quickly be transferred to a flash drive. But unlike the catalog, the tools themselves – thousands of ones and zeros – would have been useless if leaked to a publication. This could be one reason why they have not emerged until now.
Enter WikiLeaks. Just two days after the first Shadow Brokers message, Julian Assange, the founder of WikiLeaks, sent out a Twitter message. “We had already obtained the archive of NSA cyberweapons released earlier today,” Assange wrote, “and will release our own pristine copy in due course.”
The month before, Assange was responsible for releasing the tens of thousands of hacked DNC emails that led to the resignation of the four top committee officials.
There also seems to be a link between Assange and the leaker who stole the ANT catalog, and the possible hacking tools. Among Assange’s close associates is Jacob Appelbaum, a celebrated hacktivist and the only publicly known WikiLeaks staffer in the United States – until he moved to Berlin in 2013 in what he called a “political exile” because of what he said was repeated harassment by U.S. law enforcement personnel. In 2010, a Rolling Stone magazine profile labeled him “the most dangerous man in cyberspace.”
In December 2013, Appelbaum was the first person to reveal the existence of the ANT catalog, at a conference in Berlin, without identifying the source. That same month he said he suspected the U.S. government of breaking into his Berlin apartment. He also co-wrote an article about the catalog in Der Spiegel. But again, he never named a source, which led many to assume, mistakenly, that it was Snowden.
Shortly thereafter, he turned his attention to Hillary Clinton. At a screening of a documentary about Assange in Cannes, France, Appelbaum accused her of having a grudge against him and Assange, and that if she were elected president, she would make their lives difficult. “It’s a situation that will possibly get worse” if she is elected to the White House, he said, according to Yahoo News.
It was only a few months later that Assange released the 20,000 DNC emails. Intelligence agencies have again pointed the finger at Russia for hacking into these emails.
Yet there has been no explanation as to how Assange obtained them. He told NBC News, “There is no proof whatsoever” that he obtained the emails from Russian intelligence. Moscow has also denied involvement.
There are, of course, many sophisticated hackers in Russia, some with close government ties and some without. And planting false and misleading indicators in messages is an old trick. Now Assange has promised to release many more emails before the election, while apparently ignoring email involving Trump. (Trump opposition research was also stolen.)
In hacktivist style, and in what appears to be phony broken English, this new release of cyberweapons also seems to be targeting Clinton. It ends with a long and angry “final message” against “Wealthy Elites . . . breaking laws” but “Elites top friends announce, no law broken, no crime commit[ed]. . . Then Elites run for president. Why run for president when already control country like dictatorship?”
Then after what they call the “fun Cyber Weapons Auction” comes the real message, a serious threat. “We want make sure Wealthy Elite recognizes the danger [of] cyberweapons. Let us spell out for Elites. Your wealth and control depends on electronic data.” Now, they warned, they have control of the NSA’s cyber hacking tools that can take that wealth away. “You see attacks on banks and SWIFT [a worldwide network for financial services] in news. If electronic data go bye-bye where leave Wealthy Elites? Maybe with dumb cattle?”
Snowden’s leaks served a public good. He alerted Americans to illegal eavesdropping on their telephone records and other privacy violations, and Congress changed the law as a result. The DNC leaks exposed corrupt policies within the Democratic Party.
But we now have entered a period many have warned about, when NSA’s cyber weapons could be stolen like loose nukes and used against us. It opens the door to criminal hackers, cyber anarchists and hostile foreign governments that can use the tools to gain access to thousands of computers in order to steal data, plant malware and cause chaos.
It’s one more reason why NSA may prove to be one of Washington’s greatest liabilities rather than assets.
About the Author
James Bamford is the author of The Shadow Factory: The Ultra-Secret NSA From 9/11 to the Eavesdropping on America. He is a columnist for Foreign Policy magazine.
“It’s getting really hard to know where any lines were drawn.”
-CNN
I confess I’d been looking forward to this. My son, following the Judicial Watch website, has been saying for months that the big email scandal will involve the State Department-Clinton Foundation ties and Hillary’s use of her office to acquire contributions from Saudi and other donors. As someone opposed to World War III (beginning in Syria and/or Ukraine), I was hoping that they (and he) were right.
It might not be all that immediately clear to many why this is another big deal. After all, it follows Hillary’s ongoing private server email scandal, involving not just issues of the Secretary’s “judgment” and so-called “national security” but also revealing details about Clinton’s key role in the bloody destruction of Libya and her hawkish views in all circumstances.
CNN commentators assure us that the FBI investigation “went nowhere” because the FBI decided she’d committed no crime. (Just move on, folks; this was political all along.)
These new revelations come just after the scandal of the DNC rigging the primaries for Hillary, revealed by email leaks (from an unknown source) provided through Wikileaks. The content of these has been avoided like the plague by mainstream media, which is in Hillary’s camp and is generally protecting her. The focus instead is on alleged Russian efforts to influence the U.S. election, and the imagined Putin-Trump “bromance.” Respectable news agencies have been announcing, as fact, the idea that Wikileaks got the emails from Russia; and that Moscow is trying to swing the election towards Trump (because he’ll accept an invasion of Estonia, wreck NATO etc.). It’s (or it should be) obvious bullshit, an effort to change the subject while exploiting the McCarthyite paranoid sentiments of the most backward.
The headlines are so far cautious. “Emails renew questions about Clinton Foundation and State Department Overlap.” “Newly released Clinton emails shed light on relationship between State Dept. and Clinton Foundation.” They are not (yet) shrieking, “Sheik bought State Dept. favors from Clinton Foundation donation” but we shall see.
What do the emails show so far? Two examples have been highlighted by the conservative Judicial Watch, which requested the email transcripts through the FOIA. In the first, in 2009, Gilbert Chagoury, a Lebanese-born billionaire who has given the foundation up to five million dollars and used its assistance to build a project in Nigeria, and is one of the foundation’s top donors, contacted Doug Band, head of the foundation’s Clinton Global Initiative, asking to be put in touch with a high ranking State Department official connected to Lebanon.
Band emailed Hillary’s top aide Huma Abedin and advisor Cheryl Mills, expressing a need. He writes: “We need Gilbert Chagoury to speak to the substance person re Lebanon. As you know, he’s a key guy there and to us and is loved in Lebanon. Very imp.”
A key guy to us. To the Clinton Foundation? The U.S.A.? Abedin did not ask that question before responding, “It’s jeff feltman. I’m sure he knows him. I’ll talk to jeff.” Feltman had been U.S. ambassador to Lebanon from July 2004 to January 2008 but was apparently still seen as the go-to guy. So Hillary’s chief aide took it upon herself to contact the former ambassador to tell him Chagoury (whom she might mention is a major contributor to the Clintons) needed to talk with him.
Nothing illegal there, they will say. Why shouldn’t the State Department arrange contact between a billionaire Lebanese Clinton donor, loved in Lebanon, and the ex-ambassador, if it contributes to regional stability or U.S. national security? And the hard-core Hillary supporters will nod their heads, and maybe point out that Feltman has denied any “meeting.” (Maybe Huma just passed on his address and they chatted online.)
(CNN I notice is showing a video of Bill Clinton with Chagoury in Nigeria, inaugurating a multi-billion dollar waterfront development on the coastline established “under the umbrella of the Clinton Global Initiative.”)
The other instance of “overlap” central to the discussion so far is a request of Band to Abedin and Mills for “a favor.” Someone who had recently been on a Clinton Foundation trip to Haiti wanted a State Department job. He indicated that it was “important to take care of” this person. Abedin, apparently without questioning Band about why this person was important, got right back to him: “We all have him on our radar. Personnel has been sending him options.” So the head of the Clinton Foundation could snap his fingers, again stressing how “important” his demand was, and Hillary aides Huma and Cheryl paid by your tax dollars would snap into action.
A CNN report deplores “the intermingling of emails between State and Clinton Foundation and others, giving the overall effect that it’s getting really hard to know where any lines were drawn.”
Maybe nothing illegal here. But there is an ongoing FBI investigation, no longer about Hillary’s multiple phones and private server, nor about the content of the communications (revealing her hawkish savagery), but about the routine trade-off of foundation connections for political rewards.
Those transactions are mere corruption, not war crimes. But the U.S. mass media never targets politicians for their bloodiness, and they love the conventional corruption scandal. So let there be more leaks that will absorb the attention of the talking heads! Let’s see clearer pay-for-play evidence! And let’s see more details about how the DNC midwifed Hillary’s nomination, actively sabotaging a supposedly democratic process.
Let the American people see how thoroughly rotten both candidates are, and how thoroughly rotten the system that barfed them up.
Bernie in a fair process would be the Democratic nominee now. Clinton didn’t so much steal the election as buy it in advance, arranging the details through lackey Debbie Wasserman Schultz. Trump would not be the Republican nominee but for the editorial decisions of cable news producers to—from the very inception of his campaign—announce BREAKING NEWS and cover his nearly identical rants every time he held a rally.
This gratuitous coverage obviated the need for any (other) Trump advertising. Even as the anchors, commentators and other talking heads ridiculed, denounced and appeared puzzled about the Trump phenomenon, the networks made the viewers imbibe his vapid rants. They hooked the most reactionary elements of the population on this blowhard billionaire nut case.
In the Democrats’ case, Wall Street and Wasserman Schultz controlled the primaries. In the Republican case, the corporate news media (for its immediate profit motives) advertised a total dick who happened to be a billionaire and represent the One Percent every bit as much as Hillary.
So they’re now in our faces, day after day. Hideous people with their news-anchor supporters, and cable commentators so ready to dismiss serious issues, put the very best face on their candidate, and change the subject to attack the other candidate. In the end it comes down to: We have a two-party system. The parties made their choices. So you HAVE to choose one.
Julian Assange described the U.S. presidential race as a choice between cholera and gonorrhea. Why should the people of this great country of 310,000,000 people—many with great creativity, integrity and intelligence—be assigned this sick choice of Clinton or Trump by the One Percent that controls everything?
Why should any Bernie supporter so debase himself or herself as to say, “Okay, I know the primaries were fixed and that Bernie could not win because the cards were stacked against him. And despite the fact that I put passion and effort into an anti-Wall Street campaign, now I’ll support the Wall Street candidate, who’s also a liar, who’s going to flip-flop again on TPP and bomb Syria to produce regime change, and provoke Russia in Syria and Ukraine—because well anyway she’s better than Trump, and we all have to vote, don’t we”?
But why should anybody have to hold their nose while they vote? The whole process has been exposed as never before as a farce. Why participate at all in something so corrupt? Do you want to vote just to vote, to publicly display the fact that you believe in the system itself, like the North Koreans who routinely go to the polls patriotically to vote for the options available? (As you may know, in some elections in the DPRK you can vote for a candidate of the Workers’ Party of Korea, Chondoist Chogu Party, Korean Social Democratic Party or independent. There is the manicured appearance of multiparty democracy—just like here. And no doubt some people feel good after the voting, knowing they’ve done their civic duty in a system they believe in. But what if you’ve woken up and don’t believe in the system anymore?)
Why not think bigger, and beyond? Either Clinton or Trump will likely take office in January, as the most unpopular newly elected president of all time. Either will have been brought to power by a manifestly anti-democratic, corrupt process that, more than in past years, is well exposed this time. Either will be vulnerable to mass upheaval, in the wake of Mexico wall construction or the announcement of a Syrian no-fly zone. Appalled by the election choices and result, the majority could maybe consider targeting the rigged system itself.
Just a suggestion. Massive demonstrations in Washington on Inaugural Day by people who have come to reject its legitimacy itself, knowing that it’s run by the One Percent to whom black lives don’t matter, drone warfare is cool and global warming is a hoax. Posters and banners with the curt, easy-to-understand and undeniably true popular slogan: THE WHOLE SYSTEM IS RIGGED!
Imagine a huge rally Jan. 20 demanding its overthrow, or at least the immediate resignation of the system’s illegitimate new executive, even if we don’t know what comes next. Imagine the admiration that would invite throughout the world, the hope it would inspire should the people of this country rise up to challenge not just a war, policy or person but the corrupt (capitalist and imperialist) system under which we live.
***
Now I read that the FBI, directed by James Comey (who recommended no charges for Clinton for her private cell phone use but left open the prospect of recommending criminal charges against Clinton for abusing her office to profit the Clinton Foundation) in fact has recommended charges against Hillary.
But the Department of Justice headed by Clinton loyalist Loretta Lynch rejected the recommendation. Because—don’t you see?—Hillary has to be the next president. To stop Trump, at all costs! And to stop Putin, that aggressive Putin. And to keep together the “Clinton Coalition.”
Good job, Loretta! But regardless of your effort, Hillary’s Pinocchio nose grows longer by the day, while the whole system is exposed as a cancer requiring the most aggressive treatment.
Hillary Clinton has a dark history in foreign policy. Indeed, if the Nuremberg principles were applied evenly, her name would certainly be on the docket, along with her former boss in the White House, who is actually less of a hawk than she. When Donald Trump publicly expressed a willingness to negotiate with Russia over international conflicts, she referred to such an idea as putting “Christmas in the Kremlin.” She’s red-baited Bernie Sanders for his support for the Cuban and Nicaraguan revolutions back in the 1980s. Clinton basically backs not “political realism,” but the more imperial tradition of neoconservative “American exceptionalism,” a chauvinist mindset by which the US sets the political, economic, and military priorities of the world and the places and times of its interventions, sometimes with allied support, sometimes without, at its own discretion.
Hillary is a product of her husband’s alignment with Democratic Leadership Council (DLC) and the right wing shift of the party, which moved the Democrats away from its moorings in organized labor, the New Deal, civil rights, and the Great Society. Bill Clinton’s successful election undoubtedly inspired the formation of “New” Labour in Britain, which likewise broke with its party history in the labor movement. In the 1990s, then MP Tony Blair, his shadow government chancellor of the exchequer Gordon Brown, and his chief pollster Philip Gould came to America as apprentices of the Clinton presidential campaigns to study their public relations and other electioneering tactics. This became part of New Labour’s successful “Third Way” victorious strategy in 1997. Back then, Anthony Howard, writing in the Times of London, said that Clinton’s New Democrats “lighted the path” for Blair’s New Labour. Blair partnered with Clinton and the DLC in taking a more militarist stance toward Saddam Hussein, which paved the way for Bush’s and Blair’s 2003 invasion of Iraq.
Bill Clinton’s and the DLC’s legacy candidate is Hillary. And what better way to prove her cojones, in case anyone thought a woman president might turn out to be a negotiator and peacenik, than to pick on Russia and reignite the Cold War. Despite the Russians’ brilliant mix of negotiation – warding off a US invasion of Iran, getting the US off Assad’s back with the disposal of his chemical weapons stash – and their effective military intervention against ISIS, Obama, Clinton, and now Kerry will not relent in their hostility. The US neocon inner circle cannot countenance a balance of power arrangement with the Kremlin, disregarding Russia’s status as the second most militarily powerful country in the world. Clinton has called Putin a dictator, the favorite term of disgrace in American ruling circles, except when it comes to America’s allies in the Gulf states, Erdogan, and the long list of authoritarian friends the US has backed over the entire course of the postwar era. Indeed, Putin may be a strongman of sorts, and an extremely popular one in his own country, but is far less of an authoritarian than his predecessor, ” Boris Yeltsin, who ruled by decree and whom Hillary’s husband lauded and financed as a genuine, if quite inebriated, democrat.
Was Hillary in on Bill’s political choices? Recently speaking to Amy Goodman on Democracy Now, Clinton’s secretary of labor Robert Reich said that Bill never made an important decision without consulting the first lady. What are the programs to which Hillary can claim advisory credit during her husband tenure? NAFTA, welfare reform (“ending welfare as we know it,” said Bill), balancing the budget (inflicting austerity measures), the 1994 crime bill (“three strikes and you’re out”), bank deregulation (a sonata for the Great Recession). All of these projects, says author Thomas Frank, were for working Americans and people of color absolute disasters. And one might add to his list the expansion of NATO and the assault on Yugoslavia.
As secretary of state, Hillary backed CIA director Petraeus’ plan to overthrow the Assad government in Syria, from which Obama eventually backed away, thanks to Russia’s intervention and defense of Syria’s sovereignty. As a good neocon soldier for American exceptionalism, Clinton aligns herself with whatever appears at the moment to be the “national interest” center of political gravity (promoting the oil industry, arms sales, the pro-Zionist alliance, divide and rule aid to opponents of secular nationalism, right-to-protect military and economic interventions). The distraction over her emailgate and the Benghazi investigation hides the real crimes of her active support for the bombing of Libya, the overthrow of the government, and the resulting chaos and ISIS organizing in the country, not to mention her backing for the Honduran coup d’etat. Former secretary of defense Robert Gates says that it was Hillary who pushed Obama into the decision on Libya, for which the president now publicly expresses regret, calling the present condition of the country (his words) “a shit show.”
Her champions who cheer her work with women and children ignore the thousands of women and children in Libya and elsewhere in the Middle East, who were slaughtered under her leadership in the State Department. Speaking on regime change, even a right-wing former Pentagon analyst, Michael Maloof, didn’t believe it was appropriate to attack Iraq. “Now with Libya,” he says, “it’s the same. And Hillary Clinton was very much responsible for that.”
If she becomes president, what can be expected of her on domestic policy? She’ll be a good team player – that is, the neocon team – and may even get something accomplished, such as privatizing part of social security and medicare, which was always part of the DLC agenda, and working more closely with the oil companies. Among her other achievements during her years in the State Department, according to investigative journalist, Lee Fang, was her creation of a separate bureau, with more than 60 staff, whose focus was on energy resources. Traveling the world, Clinton used her position, partnered with Chevron, to promote the practice of fracking in developing countries.
With the power couple in the White House, their assets already worth well over $100 million, and with a Congress being mostly a millionaires’ club, no serious tax increase on the rich can be expected. Indeed, the White House will be more of a revolving door for government officials and staff moving back and forth between the corporate world and “public service.” Open Secrets.org found 84 revolving door personnel working for Hillary, more than on any other politician’s staff: “the greatest number of staffers who either came to Capitol Hill after representing private interests or left the member’s staff for a lobbying position.”
Her march to the White House relies on over 400 superdelegates pledged to her – a number of them also wearing the hat of corporate lobbyist – rather than to the democratic voice of the people, Even if nominated and then elected, Hillary, lacking credibility about her authenticity, will not be a popular president. Nearly half of Democrats don’t trust her (56% express trust vs. 81% for Bernie). And a new AP-GfK poll reveals that 55% of all Americans hold a negative opinion of her. Under her presidency, and with the return of the first man, American politics will continue to be business as usual.
Gerald Sussman is a Professor in the Toulan School of Urban Studies and Planning at Portland State University
If there were any doubts that Hillary Clinton favors a neoconservative foreign policy, her performance at Thursday’s debate should have laid them to rest. In every meaningful sense, she is a neocon and – if she becomes President – Americans should expect more global tensions and conflicts in pursuit of the neocons’ signature goal of “regime change” in countries that get in their way.
Beyond sharing this neocon “regime change” obsession, former Secretary of State Clinton also talks like a neocon. One of their trademark skills is to use propaganda or “perception management” to demonize their targets and to romanticize their allies, what is called “gluing white hats” on their side and “gluing black hats” on the other.
So, in defending her role in the Libyan “regime change,” Clinton called the slain Libyan leader Muammar Gaddafi “genocidal” though that is a gross exaggeration of Gaddafi’s efforts to beat back Islamic militants in 2011. But her approach fits with what the neocons do. They realize that almost no one will dare challenge such a characterization because to do so opens you to accusations of being a “Gaddafi apologist.”
Similarly, before the Iraq War, the neocons knew that they could level pretty much any charge against Saddam Hussein no matter how false or absurd, knowing that it would go uncontested in mainstream political and media circles. No one wanted to be a “Saddam apologist.”
Clinton, like the neocons, also shows selective humanitarian outrage. For instance, she laments the suffering of Israelis under crude (almost never lethal) rocket fire from Gaza but shows next to no sympathy for Palestinians being slaughtered by sophisticated (highly lethal) Israeli missiles and bombs.
She talks about the need for “safe zones” or “no-fly zones” for Syrians opposed to another demonized enemy, Syria’s President Bashar al-Assad, but not for the people of Gaza who face the wrath of Israeli Prime Minister Benjamin Netanyahu.
“Yes, I do still support a no-fly zone [in Syria] because I think we need to put in safe havens for those poor Syrians who are fleeing both Assad and ISIS and have some place that they can be safe,” Clinton said. But she showed no such empathy for Palestinians defenseless against Israel’s “mowing the grass” operations against men, women and children trapped in Gaza.
In Clinton’s (and the neocons’) worldview, the Israelis are the aggrieved victims and the Palestinians the heartless aggressors. Referring to the Gaza rocket fire, she said: “I can tell you right now I have been there with Israeli officials going back more than 25 years that they do not seek this kind of attacks. They do not invite the rockets raining down on their towns and villages. They do not believe that there should be a constant incitement by Hamas aided and abetted by Iran against Israel. …
“So, I don’t know how you run a country when you are under constant threat, terrorist attack, rockets coming at you. You have a right to defend yourself.”
Ignoring History
Clinton ignored the history of the Israeli-Palestinian conflict, which dates back to the 1940s when Israeli terrorist organizations engaged in massacres to drive Palestinians from their ancestral lands and murdered British officials who were responsible for governing the territory. Israeli encroachment on Palestinian lands has continued to the present day.
But Clinton framed the conflict entirely along the propaganda lines of the Israeli government: “Remember, Israel left Gaza. They took out all the Israelis. They turned the keys over to the Palestinian people. And what happened? Hamas took over Gaza. So instead of having a thriving economy with the kind of opportunities that the children of the Palestinians deserve, we have a terrorist haven that is getting more and more rockets shipped in from Iran and elsewhere.”
So, Clinton made clear – both at the debate and in her recent AIPAC speech – that she is fully in line with the neocon reverence for Israel and eager to take out any government or group that Israel puts on its enemies list. While waxing rhapsodic about the U.S.-Israeli relationship – promising to take it “to the next level” – Clinton vows to challenge Syria, Iran, Russia and other countries that have resisted or obstructed the neocon/Israeli “wish list” for “regime change.”
In response to Clinton’s Israel-pandering, Sen. Bernie Sanders, who once worked on an Israeli kibbutz as a young man, did the unthinkable in American politics. He called out Clinton for her double standards on Israel-Palestine and suggested that Netanyahu may not be the greatest man on earth.
“You gave a major speech to AIPAC,” Sanders said, “and you barely mentioned the Palestinians. … All that I am saying is we cannot continue to be one-sided. There are two sides to the issue. … There comes a time when if we pursue justice and peace, we are going to have to say that Netanyahu is not right all of the time.”
But in Hillary Clinton’s mind, the Israeli-Palestinian dispute is essentially one-sided. During her speech to the American Israel Public Affairs Committee last month, she depicted Israel as entirely an innocent victim in the Mideast conflicts.
“As we gather here, three evolving threats — Iran’s continued aggression, a rising tide of extremism across a wide arc of instability, and the growing effort to de-legitimize Israel on the world stage — are converging to make the U.S.-Israel alliance more indispensable than ever,” she declared.
“The United States and Israel must be closer than ever, stronger than ever and more determined than ever to prevail against our common adversaries and to advance our shared values. … This is especially true at a time when Israel faces brutal terrorist stabbings, shootings and vehicle attacks at home. Parents worry about letting their children walk down the street. Families live in fear.”
Yet, Clinton made no reference to Palestinian parents who worry about their children walking down the street or playing on a beach and facing the possibility of sudden death from an Israeli drone or warplane. Instead, she scolded Palestinian adults. “Palestinian leaders need to stop inciting violence, stop celebrating terrorists as martyrs and stop paying rewards to their families,” she said.
Then, Clinton promised to put her future administration at the service of the Israeli government. Clinton said, “One of the first things I’ll do in office is invite the Israeli prime minister to visit the White House. And I will send a delegation from the Pentagon and the Joint Chiefs to Israel for early consultations. Let’s also expand our collaboration beyond security.”
Pleasing Phrases
In selling her neocon policies to the American public, Clinton puts the military aspects in pleasing phrases, like “safe zones” and “no-fly zones.” Yet, what she means by that is that as President she will invade Syria and push “regime change,” following much the same course that she used to persuade a reluctant President Obama to invade Libya in 2011.
The Libyan operation was sold as a “humanitarian” mission to protect innocent civilians though Gaddafi was targeting Islamic militants much as he claimed at the time and was not engaging in any mass slaughter of civilians. Clinton also knew that the European allies, such as France, had less than noble motives in wanting to take out Gaddafi.
As Clinton confidant Sidney Blumenthal explained to her, the French were concerned that Gaddafi was working to develop a pan-African currency which would have given Francophone African countries greater freedom from their former colonial master and would undermine French economic dominance of those ex-colonies.
In an April 2, 2011 email, Blumenthal informed Clinton that sources close to one of Gaddafi sons reported that Gaddafi’s government had accumulated 143 tons of gold and a similar amount of silver that “was intended to be used to establish a pan-African currency” that would be an alternative to the French franc.
Blumenthal added that “this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya.” Sarkozy also wanted a greater share of Libya’s oil production and to increase French influence in North Africa, Blumenthal wrote.
But few Americans would rally to a war fought to keep North Africa under France’s thumb. So, the winning approach was to demonize Gaddafi with salacious rumors about him giving Viagra to his troops so they could rape more, a ludicrous allegation that was raised by then-U.S. Ambassador to the United Nations Susan Rice, who also claimed that Gaddafi’s snipers were intentionally shooting children.
With Americans fed a steady diet of such crude propaganda, there was little serious debate about the wisdom of Clinton’s Libyan “regime change.” Meanwhile, other emails show that Clinton’s advisers were contemplating how to exploit Gaddafi’s overthrow as the dramatic moment to declare a “Clinton Doctrine” built on using “smart power.”
On Oct. 20, 2011, when U.S.-backed rebels captured Gaddafi, sodomized him with a knife and then murdered him, Secretary of State Clinton couldn’t contain her glee. Paraphrasing a famous Julius Caesar quote, she declared about Gaddafi, “we came, we saw, he died.”
But this U.S.-organized “regime change” quickly turned sour as old tribal rivalries, which Gaddafi had contained, were unleashed. Plus, it turned out that Gaddafi’s warnings that many of the rebels were Islamic militants turned out to be true. On Sept. 11, 2012, one extremist militia overran the U.S. consulate in Benghazi killing U.S. Ambassador Christopher Stevens and three other Americans.
Soon, Libya slid into anarchy and Western nations abandoned their embassies in Tripoli. President Obama now terms the Libyan fiasco the biggest mistake of his presidency. But Clinton refuses to be chastened by the debacle, much as she appeared to learn nothing from her support for the Iraq invasion in 2003.
The Libyan Mirage
During Thursday’s debate – instead of joining Obama in recognition of the Libyan failure – Clinton acted as if she had overseen some glowing success: “Well, let me say I think we did a great deal to help the Libyan people after Gaddafi’s demise. … We helped them hold two successful elections, something that is not easy, which they did very well because they had a pent-up desire to try to chart their own future after 42 years of dictatorship. I was very proud of that. …
“We also worked to help them set up their government. We sent a lot of American experts there. We offered to help them secure their borders, to train a new military. They, at the end, when it came to security issues, … did not want troops from any other country, not just us, European or other countries, in Libya.
“And so we were caught in a very difficult position. They could not provide security on their own, which we could see and we told them that, but they didn’t want to have others helping to provide that security. And the result has been a clash between different parts of the country, terrorists taking up some locations in the country.”
But that is exactly the point. Like the earlier neocon-driven “regime change” in Iraq, the “regime change” obsession blinds the neocons from recognizing that not only are these operations violations of basic international law regarding sovereignty of other nations but the invasions unleash powerful internal rivalries that neocons, who know little about the inner workings of these countries, soon find they can’t control.
Yet, America’s neocons are so arrogant and so influential that they simply move from one catastrophe to the next like a swarm of locust spreading chaos and death around the globe. They also adapt readily to changes in the political climate.
That’s why some savvy neocons, such as the Brookings Institution’s Robert Kagan, have endorsed Clinton, who The New York Times reported has become “the vessel into which many interventionists are pouring their hopes.”
Kagan told the Times, “I feel comfortable with her on foreign policy. If she pursues a policy which we think she will pursue it’s something that might have been called neocon, but clearly her supporters are not going to call it that; they are going to call it something else.”
Now with Clinton’s election seemingly within reach, the neocons are even more excited about how they can get back to work achieving Syrian “regime change,” overturning Obama’s nuclear deal with Iran, and – what is becoming their ultimate goal – destabilizing nuclear-armed Russia and seeking “regime change” in Moscow.
After all, by helping Assad bring some stability to Syria and assisting Obama in securing the Iranian nuclear deal, Russian President Vladimir Putin has become what the neocons view as the linchpin of resistance to their “regime change” goals. Pull Putin down, the thinking goes, and the neocons can resume checking off their to-do list of Israel’s adversaries: Syria, Iran, Hezbollah, Hamas, etc.
And what could possibly go wrong by destabilizing nuclear-armed Russia and forcing some disruptive “regime change”?
By making Russia’s economy scream and instigating a Maidan-style revolt in Moscow’s Red Square, the neocons see their geopolitical path being cleared, but what they don’t take into account is that the likely successor to Putin would not be some malleable drunk like the late Russian President Boris Yeltsin but, far more likely, a hardline nationalist who might be a lot more careless with the nuclear codes than Putin.
But, hey, when has a neocon “regime change” scheme veered off into a dangerous and unanticipated direction?
A Neocon True-Believer
In Thursday’s debate, Hillary Clinton showed how much she has become a neocon true-believer. Despite the catastrophic “regime changes” in Iraq and Libya, she vowed to invade Syria, although she dresses up that reality in pretty phrases like “safe zones” and “no-fly zones.” She also revived the idea of increasing the flow of weapons to “moderate” rebels although they, in reality, mostly fight under the command umbrella of Al Qaeda’s Nusra Front.
Clinton also suggested that the Syria mess can be blamed on President Obama’s rejection of her recommendations in 2011 to authorize a more direct U.S. military intervention. “Nobody stood up to Assad and removed him,” Clinton said, “and we have had a far greater disaster in Syria than we are currently dealing with right now in Libya.”
In other words, Clinton still harbors the “regime change” goal in Syria. But the problem always was that the anti-Assad forces were penetrated by Al Qaeda and what is now called the Islamic State. The more likely result from Clinton’s goal of removing Assad would be the collapse of the Syrian security forces and a victory for Al Qaeda’s Nusra Front and/or the Islamic State.
If that were to happen, the horrific situation in Syria would become cataclysmic. Millions of Syrians – Alawites, Shiites, Christians, secularists and other “infidels” – would have to flee the beheading swords of these terror groups. That might well force a full-scale U.S. and European invasion of Syria with the bloody outcome probably similar to the disastrous Iraq War.
The only reasonable hope for Syria is for the Assad regime and the less radical Sunni oppositionists to work out some power-sharing agreement, stabilize most of the country, neutralize to some degree the jihadists, and then hold elections, letting the Syrian people decide whether “Assad must go!” – not the U.S. government. But that’s not what Clinton wants.
Perhaps even more dangerous, Clinton’s bellicose rhetoric suggests that she would eagerly move into a dangerous Cold War confrontation with Russia under the upside-down propaganda theme blaming tensions in Eastern Europe on “Russian aggression,” not NATO’s expansion up to Russia’s borders and the U.S.-backed coup in Ukraine in 2014 which ousted an elected president and touched off a civil war.
That coup, which followed neocon fury at Putin for his helping Obama avert U.S. bombing campaigns against Syria and Iran, was largely orchestrated by neocons associated with the U.S. government, including Assistant Secretary of State for European Affairs Victoria Nuland (Robert Kagan’s wife), Sen. John McCain and National Endowment for Democracy President Carl Gershman.
After the violent coup, when the people of Crimea voted by 96 percent to secede from Ukraine and rejoin Russia, the U.S. government and Western media deemed that a “Russian invasion” and when ethnic Russians in eastern Ukraine rose up in resistance to the new authorities in Kiev that became “Russian aggression.”
NATO on the Move
Though President Obama should know better – and I’m told that he does know better – he has succumbed this time to pressure to go along with what he calls the Washington “playbook” of saber-rattling and militarism. NATO is moving more and more combat troops up to the Russian border while Washington has organized punishing economic sanctions aimed at disrupting the Russian economy.
Hillary Clinton appears fully onboard with the neocon goal of grabbing the Big Enchilada, “regime change” in Moscow. Rather than seeing the world as it is, she continues to look through the wrong end of the telescope in line with all the anti-Russian propaganda and the demonization of Putin, whom Clinton has compared to Hitler.
Supporting NATO’s military buildup on Russia’s border, Clinton said, “With Russia being more aggressive, making all kinds of intimidating moves toward the Baltic countries, we’ve seen what they’ve done in eastern Ukraine, we know how they want to rewrite the map of Europe, it is not in our interests [to reduce U.S. support for NATO]. Think of how much it would cost if Russia’s aggression were not deterred because NATO was there on the front lines making it clear they could not move forward.”
Though Clinton’s anti-Russian delusions are shared by many powerful people in Official Washington, they are no more accurate than the other claims about Iraq’s WMD, Gaddafi passing out Viagra to his troops, the humanitarian need to invade Syria, the craziness about Iran being the principal source of terrorism (when it is the Saudis, the Qataris, the Turks and other Sunni powers that have bred Al Qaeda and the Islamic State), and the notion that the Palestinians are the ones picking on the Israelis, not the other way around.
However, Clinton’s buying into the neocon propaganda about Russia may be the most dangerous – arguably existential – threat that a Clinton presidency would present to the world. Yes, she may launch U.S. military strikes against the Syrian government (which could open the gates of Damascus to Al Qaeda and the Islamic State); yes, she might push Iran into renouncing the nuclear agreement (and putting the Israeli/neocon goal to bomb-bomb-bomb-Iran back on the table); yes, she might make Obama’s progressive critics long for his more temperate presidency.
But Clinton’s potential escalation of the new Cold War with Russia could be both the most costly and conceivably the most suicidal feature of a Clinton-45 presidency. Unlike her times as Secretary of State, when Obama could block her militaristic schemes, there will be no one to stop her if she is elected President, surrounded by likeminded neocon advisers.
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).
A nightmare scenario of U.S. geopolitical strategists is coming true: foreign independence from U.S.-centered financial and diplomatic control. China and Russia are investing in neighboring economies on terms that cement Eurasian integration on the basis of financing in their own currencies and favoring their own exports. They also have created the Shanghai Cooperation Organization (SCO) as an alternative military alliance to NATO.[1] And the Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank tandem in which the United States holds unique veto power.
More than just a disparity of voting rights in the IMF and World Bank is at stake. At issue is a philosophy of development. U.S. and other foreign investment in infrastructure (or buyouts and takeovers on credit) adds interest rates and other financial charges to the cost structure, while charging prices as high as the market can bear (think of Carlos Slim’s telephone monopoly in Mexico, or the high costs of America’s health care system), and making their profits and monopoly rents tax-exempt by paying them out as interest.
By contrast, government-owned infrastructure provides basic services at low cost, on a subsidized basis, or freely. That is what has made the United States, Germany and other industrial lead nations so competitive over the past few centuries. But this positive role of government is no longer possible under World Bank/IMF policy. The U.S. promotion of neoliberalism and austerity is a major reason propelling China, Russia and other nations out of the U.S. diplomatic and banking orbit.
On December 3, 2015, Prime Minister Putin proposed that Russia “and other Eurasian Economic Union countries should kick-off consultations with members of the SCO and the Association of Southeast Asian Nations (ASEAN) on a possible economic partnership.”[2] Russia also is seeking to build pipelines to Europe through friendly secular countries instead of Sunni jihadist U.S.-backed countries locked into America’s increasingly confrontational orbit.
Russian finance minister Anton Siluanov points out that when Russia’s 2013 loan to Ukraine was made, at the request of Ukraine’s elected government, Ukraine’s “international reserves were barely enough to cover three months’ imports, and no other creditor was prepared to lend on terms acceptable to Kiev. Yet Russia provided $3 billion of much-needed funding at a 5 per cent interest rate, when Ukraine’s bonds were yielding nearly 12 per cent.”[3]
What especially annoys U.S. financial strategists is that this loan by Russia’s National Wealth Fund was protected by IMF lending practice, which at that time ensured collectability by withholding credit from countries in default of foreign official debts, or at least not bargaining in good faith to pay. To cap matters, the bonds are registered under London’s creditor-oriented rules and courts.
Most worrisome to U.S. strategists is that China and Russia are denominating their trade and investment in their own currencies instead of dollars. After U.S. officials threatened to derange Russia’s banking linkages by cutting it off from the SWIFT interbank clearing system, China accelerated its creation of the alternative China International Payments System (CIPS), and its own credit card system to protect Eurasian economies from the threats made by U.S. unilateralists.
Russia and China are simply doing what the United States has long done: using trade and credit linkages to cement their diplomacy. This tectonic geopolitical shift is a Copernican threat to New Cold War ideology: Instead of the world economy revolving around the United States (the Ptolemaic idea of America as “the indispensible nation”), it may revolve around Eurasia. As long as global financial control remains grounded in Washington at the offices of the IMF and World Bank, such a shift in the center of gravity will be fought with all the power of an American Century (and would-be American Millennium) inquisition.
Any inquisition needs a court system and enforcement vehicles. So does resistance to such a system. That is what today’s global financial, legal and trade maneuvering is all about. And that is why today’s world system is in the process of breaking apart. Differences in economic philosophy call for different institutions.
To U.S. neocons the specter of AIIB government-to-government investment creates fear of nations minting their own money and holding each other’s debt in their international reserves instead of borrowing dollars, paying interest in dollars and subordinating their financial planning to the U.S. Treasury and IMF. Foreign governments would have less need to finance their budget deficits by selling off key infrastructure. And instead of dismantling public spending, a broad Eurasian economic union would do what the United States itself practices, and seek self-sufficiency in banking and monetary policy.
Imagine the following scenario five years from now. China will have spent half a decade building high-speed railroads, ports, power systems and other construction for Asian and African countries, enabling them to grow and export more. These exports will be coming online to repay the infrastructure loans. Also, suppose that Russia has been supplying the oil and gas energy for these projects on credit.
To avert this prospect, suppose an American diplomat makes the following proposal to the leaders of countries in debt to China, Russia and the AIIB: “Now that you’ve got your increased production in place, why repay? We’ll make you rich if you stiff our adversaries and turn back to the West. We and our European allies will support your assigning your nations’ public infrastructure to yourselves and your supporters at insider prices, and then give these assets market value by selling shares in New York and London. Then, you can keep the money and spend it in the West.”
How can China or Russia collect in such a situation? They can sue. But what court in the West will accept their jurisdiction?
That is the kind of scenario U.S. State Department and Treasury officials have been discussing for more than a year. Implementing it became more pressing in light of Ukraine’s $3 billion debt to Russia falling due by December 20, 2015. Ukraine’s U.S.-backed regime has announced its intention to default. To support their position, the IMF has just changed its rules to remove a critical lever on which Russia and other governments have long relied to ensure payment of their loans.
The IMF’s role as enforcer of inter-government debts
When it comes to enforcing nations to pay inter-government debts, the IMF is able to withhold not only its own credit but also that of governments and global bank consortia participating when debtor countries need “stabilization” loans (the neoliberal euphemism for imposing austerity and destabilizing debtor economies, as in Greece this year). Countries that do not privatize their infrastructure and sell it to Western buyers are threatened with sanctions, backed by U.S.-sponsored “regime change” and “democracy promotion” Maidan-style. The Fund’s creditor leverage has been that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. That is how the dollarized global financial system has worked for half a century. But until now, the beneficiaries have been U.S. and NATO lenders, not been China or Russia.
The focus on a mixed public/private economy sets the AIIB at odds with the Trans-Pacific Partnership’s aim of relinquishing government planning power to the financial and corporate sector, and the neoliberal aim of blocking governments from creating their own money and implementing their own financial, economic and environmental regulation. Chief Nomura economist Richard Koo, explained the logic of viewing the AIIB as a threat to the U.S.-controlled IMF: “If the IMF’s rival is heavily under China’s influence, countries receiving its support will rebuild their economies under what is effectively Chinese guidance, increasing the likelihood they will fall directly or indirectly under that country’s influence.”[4]
This was the setting on December 8, when Chief IMF Spokesman Gerry Rice announced: “The IMF’s Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors.” Russian Finance Minister Anton Siluanov accused the IMF decision of being “hasty and biased.”[5] But it had been discussed all year long, calculating a range of scenarios for a sea change in international law. Anders Aslund, senior fellow at the NATO-oriented Atlantic Council, points out:
The IMF staff started contemplating a rule change in the spring of 2013 because nontraditional creditors, such as China, had started providing developing countries with large loans. One issue was that these loans were issued on conditions out of line with IMF practice. China wasn’t a member of the Paris Club, where loan restructuring is usually discussed, so it was time to update the rules.
The IMF intended to adopt a new policy in the spring of 2016, but the dispute over Russia’s $3 billion loan to Ukraine has accelerated an otherwise slow decision-making process.[6]
The target was not only Russia and its ability to collect on its sovereign loan to Ukraine, but China even more, in its prospective role as creditor to African countries and prospective AIIB borrowers, planning for a New Silk Road to integrate a Eurasian economy independent of U.S. financial and trade control. The Wall Street Journal concurred that the main motive for changing the rules was the threat that China would provide an alternative to IMF lending and its demands for crushing austerity. “IMF-watchers said the fund was originally thinking of ensuring China wouldn’t be able to foil IMF lending to member countries seeking bailouts as Beijing ramped up loans to developing economies around the world.”[7] So U.S. officials walked into the IMF headquarters in Washington with the legal equivalent of suicide vests. Their aim was a last-ditch attempt to block trade and financial agreements organized outside of U.S. control and that of the IMF and World Bank.
The plan is simple enough. Trade follows finance, and the creditor usually calls the tune. That is how the United States has used the Dollar Standard to steer Third World trade and investment since World War II along lines benefiting the U.S. economy. The cement of trade credit and bank lending is the ability of creditors to collect on the international debts being negotiated. That is why the United States and other creditor nations have used the IMF as an intermediary to act as “honest broker” for loan consortia. (“Honest broker” means being subject to U.S. veto power.) To enforce its financial leverage, the IMF has long followed the rule that it will not sponsor any loan agreement or refinancing for governments that are in default of debts owed to other governments. However, as the afore-mentioned Aslund explains, the IMF could easily
change its practice of not lending into [countries in official] arrears … because it is not incorporated into the IMF Articles of Agreement, that is, the IMF statutes. The IMF Executive Board can decide to change this policy with a simple board majority. The IMF has lent to Afghanistan, Georgia, and Iraq in the midst of war, and Russia has no veto right, holding only 2.39 percent of the votes in the IMF. When the IMF has lent to Georgia and Ukraine, the other members of its Executive Board have overruled Russia.[8]
After the rules change, Aslund later noted, “the IMF can continue to give Ukraine loans regardless of what Ukraine does about its credit from Russia, which falls due on December 20.[9]
The IMF rule that no country can borrow if it is in default to a foreign government was created in the post-1945 world. Since then, the U.S. Government, Treasury and/or U.S. bank consortia have been party to nearly every major loan agreement. But inasmuch as Ukraine’s official debt to Russia’s National Wealth Fund was not to the U.S. Government, the IMF announced its rules change simply as a “clarification.” What its rule really meant was that it would not provide credit to countries in arrears to the U.S. government, not that of Russia or China.
It remains up to the IMF board – and in the end, its managing director – whether or not to deem a country creditworthy. The U.S. representative can block any foreign leaders not beholden to the United States. Mikhail Delyagin, Director of the Institute of Globalization Problems, explained the double standard at work: “The Fund will give Kiev a new loan tranche on one condition: that Ukraine should not pay Russia a dollar under its $3 billion debt. … they will oblige Ukraine to pay only to western creditors for political reasons.”[10]
The post-2010 loan packages to Greece are a case in point. The IMF staff saw that Greece could not possibly pay the sums needed to bail out French, German and other foreign banks and bondholders. Many Board members agreed, and have gone public with their whistle blowing. Their protests didn’t matter. President Barack Obama and Treasury Secretary Tim Geithner pointed out that U.S. banks had written credit default swaps betting that Greece could pay, and would lose money if there were a debt writedown). Dominique Strauss-Kahn backed the hard line US- European Central Bank position. So did Christine Lagarde in 2015, overriding staff protests.[11]
Regarding Ukraine, IMF executive board member Otaviano Canuto, representing Brazil, noted that the logic that “conditions on IMF lending to a country that fell behind on payments [was to] make sure it kept negotiating in good faith to reach agreement with creditors.”[12] Dropping this condition, he said, would open the door for other countries to insist on a similar waiver and avoid making serious and sincere efforts to reach payment agreement with creditor governments.
A more binding IMF rule is Article I of its 1944-45 founding charter, prohibiting the Fund from lending to a member state engaged in civil war or at war with another member state, or for military purposes in general. But when IMF head Lagarde made the last loan to Ukraine, in spring 2015, she merely expressed a vapid token hope there might be peace. Withholding IMF credit could have been a lever to force peace and adherence to the Minsk agreements, but U.S. diplomatic pressure led that opportunity to be rejected. President Porochenko immediately announced that he would step up the civil war with the Russian-speaking population in the eastern Donbass region.
The most important IMF condition being violated is that continued warfare with the East prevents a realistic prospect of Ukraine paying back new loans. The Donbas is where most Ukrainian exports were made, mainly to Russia. That market is being lost by the junta’s belligerence toward Russia. This should have blocked Ukraine from receiving IMF aid. Aslund himself points to the internal contradiction at work: Ukraine has achieved budget balance because the inflation and steep currency depreciation has drastically eroded its pension costs. But the resulting decline in the purchasing power of pension benefits has led to growing opposition to Ukraine’s post-Maidan junta. So how can the IMF’s austerity budget be followed without a political backlash? “Leading representatives from President Petro Poroshenko’s Bloc are insisting on massive tax cuts, but no more expenditure cuts; that would cause a vast budget deficit that the IMF assesses at 9-10 percent of GDP, that could not possibly be financed.”[13]
By welcoming and financing Ukraine instead of treating as an outcast, the IMF thus is breaking four of its rules:
Not to lend to a country that has no visible means to pay back the loan. This breaks the “No More Argentinas” rule, adopted after the IMF’s disastrous 2001 loan.
Not to lend to a country that repudiates its debt to official creditors. This goes against the IMF’s role as enforcer for the global creditor cartel.
Not to lend to a borrower at war – and indeed, to one that is destroying its export capacity and hence its balance-of-payments ability to pay back the loan.
Finally, not to lend to a country that is not likely to carry out the IMF’s austerity “conditionalities,” at least without crushing democratic opposition in a totalitarian manner.
The upshot – and new basic guideline for IMF lending – is to split the world into pro-U.S. economies going neoliberal, and economies maintaining public investment in infrastructure n and what used to be viewed as progressive capitalism. Russia and China may lend as much as they want to other governments, but there is no global vehicle to help secure their ability to be paid back under international law. Having refused to roll back its own (and ECB) claims on Greece, the IMF is willing to see countries not on the list approved by U.S. neocons repudiate their official debts to Russia or China. Changing its rules to clear the path for making loans to Ukraine is rightly seen as an escalation of America’s New Cold War against Russia and China.
Timing is everything in such ploys. Georgetown University Law professor and Treasury consultant Anna Gelpern warned that before the “IMF staff and executive board [had] enough time to change the policy on arrears to official creditors,” Russia might use “its notorious debt/GDP clause to accelerate the bonds at any time before December, or simply gum up the process of reforming the IMF’s arrears policy.”[14] According to this clause, if Ukraine’s foreign debt rose above 60 percent of GDP, Russia’s government would have the right to demand immediate payment. But President Putin, no doubt anticipating the bitter fight to come over its attempts to collect on its loan, refrained from exercising this option. He is playing the long game, bending over backward to behave in a way that cannot be criticized as “odious.”
A more immediate reason deterring the United States from pressing earlier to change IMF rules was the need to use the old set of rules against Greece before changing them for Ukraine. A waiver for Ukraine would have provided a precedent for Greece to ask for a similar waiver on paying the “troika” – the European Central Bank (ECB), EU commission and the IMF itself – for the post-2010 loans that have pushed it into a worse depression than the 1930s. Only after Greece capitulated to eurozone austerity was the path clear for U.S. officials to change the IMF rules to isolate Russia. But their victory has come at the cost of changing the IMF’s rules and those of the global financial system irreversibly. Other countries henceforth may reject conditionalities, as Ukraine has done, as well as asking for write-downs on foreign official debts.
That was the great fear of neoliberal U.S. and Eurozone strategists last summer, after all. The reason for smashing Greece’s economy was to deter Podemos in Spain and similar movements in Italy and Portugal from pursuing national prosperity instead of eurozone austerity. “Imagine the Greek government had insisted that EU institutions accept the same haircut as the country’s private creditors,” Russian finance minister Anton Siluanov asked. “The reaction in European capitals would have been frosty. Yet this is the position now taken by Kiev with respect to Ukraine’s $3 billion eurobond held by Russia.”[15]
The consequences of America’s tactics to make a financial hit on Russia while its balance of payments is down (as a result of collapsing oil and gas prices) go far beyond just the IMF. These tactics are driving other countries to defend their own economies in the legal and political spheres, in ways that are breaking apart the post-1945 global order.
Countering Russia’s ability to collect in Britain’s law courts
Over the past year the U.S. Treasury and State Departments have discussed ploys to block Russia from collecting by suing in the London Court of International Arbitration, under whose rules Russia’s bonds issued to Ukraine are registered. Reviewing the excuses Ukraine might use to avoid paying Russia, Prof. Gelpern noted that it might declare the debt “odious,” made under duress or corruptly. In a paper for the Peterson Institute of International Economics (the banking lobby in Washington) she suggested that Britain should deny Russia the use of its courts as a means of reinforcing the financial, energy and trade sanctions passed after Crimea voted to join Russia as protection against the ethnic cleansing from the Right Sector, Azov Battalion and other paramilitary groups descending on the region.[16]
A kindred ploy might be for Ukraine to countersue Russia for reparations for “invading” it and taking Crimea. Such a claim would seem to have little chance of success (without showing the court to be an arm of NATO politics), but it might delay Russia’ ability to collect by tying the loan up in a long nuisance lawsuit. But the British court would lose credibility if it permits frivolous legal claims (called barratry in English) such as President Poroshenko and Prime Minister Yatsenyuk have threatened.
To claim that Ukraine’s debt to Russia was “odious” or otherwise illegitimate, “President Petro Poroshenko said the money was intended to ensure Yanukovych’s loyalty to Moscow, and called the payment a ‘bribe,’ according to an interview with Bloomberg in June this year.”[17] The legal and moral problem with such arguments is that they would apply equally to IMF and U.S. loans. They would open the floodgates for other countries to repudiate debts taken on by dictatorships supported by IMF and U.S. lenders.
As Foreign Minister Sergei Lavrov noted, the IMF’s change of rules, “designed to suit Ukraine only, could plant a time bomb under all other IMF programs.” The new rules showed the extent to which the IMF is subordinate to U.S. aggressive New Cold Warriors: “since Ukraine is politically important – and it is only important because it is opposed to Russia – the IMF is ready to do for Ukraine everything it has not done for anyone else.”[18]
In a similar vein, Andrei Klimov, deputy chairman of the Committee for International Affairs at the Federation Council (the upper house of Russia’s parliament) accused the United States of playing “the role of the main violin in the IMF while the role of the second violin is played by the European Union, [the] two basic sponsors of the Maidan – the … coup d’état in Ukraine in 2014.”[19]
Putin’s counter-strategy and the blowback on U.S.-European relations
Having anticipated that Ukraine would seek excuses to not pay Russia, President Putin refrained from exercising Russia’s right to demand immediate payment when Ukraine’s foreign debt rose above 60 percent of GDP. In November he even offered to defer any payment at all this year, stretching payments out to “$1 billion next year, $1 billion in 2017, and $1 billion in 2018,” if “the United States government, the European Union, or one of the big international financial institutions” guaranteed payment.[20] Based on their assurances “that Ukraine’s solvency will grow,” he added, they should be willing to put their money where their mouth was. If they did not provide guarantees, Putin pointed out, “this means that they do not believe in the Ukrainian economy’s future.”
Implicit was that if the West continued encouraging Ukraine to fight against the East, its government would not be in a position to pay. The Minsk agreement was expiring and Ukraine was receiving new arms support from the United States, Canada and other NATO members to intensify hostilities against Donbas and Crimea.
But the IMF, European Union and United States refused to back up the Fund’s optimistic forecast of Ukraine’s ability to pay in the face of its continued civil war against the East. Foreign Minister Lavrov concluded that, “By having refused to guarantee Ukraine’s debt as part of Russia’s proposal to restructure it, the United States effectively admitted the absence of prospects of restoring its solvency.”[21]
In an exasperated tone, Prime Minister Dmitry Medvedev said on Russian television: “I have a feeling that they won’t give us the money back because they are crooks … and our Western partners not only refuse to help, but they also make it difficult for us.” Accusing that “the international financial system is unjustly structured,” he nonetheless promised to “go to court. We’ll push for default on the loan and we’ll push for default on all Ukrainian debts,” based on the fact that the loan
was a request from the Ukrainian Government to the Russian Government. If two governments reach an agreement this is obviously a sovereign loan…. Surprisingly, however, international financial organisations started saying that this is not exactly a sovereign loan. This is utter bull. Evidently, it’s just an absolutely brazen, cynical lie. … This seriously erodes trust in IMF decisions. I believe that now there will be a lot of pleas from different borrower states to the IMF to grant them the same terms as Ukraine. How will the IMF possibly refuse them?[22]
And there the matter stands. On December 16, 2015, the IMF’s Executive Board ruled that “the bond should be treated as official debt, rather than a commercial bond.”[23] Forbes quipped: “Russia apparently is not always blowing smoke. Sometimes they’re actually telling it like it is.”[24]
Reflecting the degree of hatred fanned by U.S. diplomacy, U.S.-backed Ukrainian Finance Minister Natalie A. Jaresko expressed an arrogant confidence that the IMF would back the Ukrainian cabinet’s announcement on Friday, December 18, of its intention to default on the debt to Russia falling due two days later. “If we were to repay this bond in full, it would mean we failed to meet the terms of the I.M.F. and the obligations we made under our restructuring.”[25]
Adding his own bluster, Prime Minister Arseny Yatsenyuk announced his intention to tie up Russia’s claim for payment by filing a multibillion-dollar counter claim “over Russia’s occupation of Crimea and intervention in east Ukraine.” To cap matters, he added that “several hundred million dollars of debt owed by two state enterprises to Russian banks would also not be paid.”[26] This makes trade between Ukraine and Russia impossible to continue. Evidently Ukraine’s authorities had received assurance from IMF and U.S. officials that no real “good faith” bargaining would be required to gain ongoing support. Ukraine’s Parliament did not even find it necessary to enact the new tax code and budget conditionalities that the IMF loan had demanded.
The world is now at war financially, and all that seems to matter is whether, as U.S. Defense Secretary Donald Rumsfeld had put matters, “you are for us or against us.” As President Putin remarked at the 70th session of the UN General Assembly regarding America’s support of Al Qaeda, Al Nusra and other allegedly “moderate” ISIS allies in Syria: “I cannot help asking those who have caused this situation: Do you realize now what you have done? … I am afraid the question will hang in the air, because policies based on self-confidence and belief in one’s exceptionality and impunity have never been abandoned.”[27]
The blowback
America’s unilateralist geopolitics are tearing up the world’s economic linkages that were put in place in the heady days after World War II, when Europe and other countries were so disillusioned that they believed the United States was acting out of idealism rather than national self-interest. Today the question is how long Western Europe will be willing to forego its trade and investment interests by accepting U.S.-sponsored sanctions against Russia, Iran and other economies. Germany, Italy and France already are feeling the strains.
The oil and pipeline war designed to bypass Russian energy exports is flooding Europe with refugees, as well as spreading terrorism. Although the leading issue in America’s Republican presidential debate on December 15, 2015, was safety from Islamic jihadists, no candidate thought to explain the source of this terrorism in America’s alliance with Wahabist Saudi Arabia and Qatar, and hence with Al Qaeda and ISIS/Daish as a means of destabilizing secular regimes in Libya, Iraq, Syria, and earlier in Afghanistan. Going back to the original sin of CIA hubris – overthrowing the secular Iranian Prime Minister leader Mohammad Mosaddegh in 1953 – U.S. foreign policy has been based on the assumption that secular regimes tend to be nationalist and resist privatization and neoliberal austerity.
Based on this assumption, U.S. Cold Warriors have aligned themselves against democratic regimes seeking to promote their own prosperity and resist neoliberalism in favor of maintaining their own traditional mixed public/private economies. That is the back-story of the U.S. fight to control the rest of the world. Tearing apart the IMF’s rules is only the most recent chapter. Arena by arena, the core values of what used to be American and European social democratic ideology are being uprooted by the tactics being used to hurt Russia, China and their prospective Eurasian allies.
The Enlightenment’s ideals were of secular democracy and the rule of international law applied equally to all nations, classical free market theory (of markets free from unearned income and rent extraction by special interests), and public investment in infrastructure to hold down the cost of living and doing business. These are all now to be sacrificed to a militant U.S. unilateralism. Putting their “indispensable nation” above the rule of law and parity of national interests (the 1648 Westphalia treaty, not to mention the Geneva Convention and Nuremburg laws), U.S. neocons proclaim that America’s destiny is to prevent foreign secular democracy from acting in ways other than in submission to U.S. diplomacy. Behind this lie the special U.S. financial and corporate interests that control American foreign policy.
This is not how the Enlightenment was supposed to turn out. Industrial capitalism a century ago was expected to evolve into an economy of abundance worldwide. Instead, we have American Pentagon capitalism, with financial bubbles deteriorating into a polarized rentier economy and a resurgence of old-fashioned imperialism. If and when a break comes, it will not be marginal but a seismic geopolitical shift.
The Dollar Bloc’s Financial Curtain
By treating Ukraine’s repudiation of its official debt to Russia’s National Wealth Fund as the new norm, the IMF has blessed its default. President Putin and foreign minister Lavrov have said that they will sue in British courts. The open question is whether any court exist in the West not under the thumb of U.S. veto?
America’s New Cold War maneuvering has shown that the two Bretton Woods institutions are unreformable. It is easier to create new institutions such as the AIIB than to retrofit the IMF and World Bank, NATO and behind it, the dollar standard – all burdened with the legacy of their vested interests.
U.S. geostrategists evidently thought that excluding Russia, China and other Eurasian countries from the U.S.-based financial and trade system would isolate them in a similar economic box to Cuba, Iran and other sanctioned adversaries. The idea was to force countries to choose between being impoverished by such exclusion, or acquiescing in U.S. neoliberal drives to financialize their economies under U.S. control.
What is lacking here is the idea of critical mass. The United States may arm-twist Europe to impose trade and financial sanctions on Russia, and may use the IMF and World Bank to exclude countries not under U.S. hegemony from participating in dollarized global trade and finance. But this diplomatic action is producing an equal and opposite reaction. That is the Newtonian law of geopolitics. It is propelling other countries to survive by avoiding demands to impose austerity on their government budgets and labor, by creating their own international financial organization as an alternative to the IMF, and by juxtaposing their own “aid” lending to that of the U.S.-centered World Bank.
This blowback requires an international court to handle disputes free from U.S. arm-twisting. The Eurasian Economic Union accordingly has created its own court to adjudicate disputes. This may provide an alternative to Judge Griesa’s New York federal kangaroo court ruling in favor of vulture funds derailing Argentina’s debt settlements and excluding that country from world financial markets.
The more nakedly self-serving U.S. policy is – from backing radical fundamentalist outgrowths of Al Qaeda throughout the Near East to right-wing nationalists in Ukraine and the Baltics – then the greater the pressure will grow for the Shanghai Cooperation Organization, AIIB and related institutions to break free of the post-1945 Bretton Woods system run by the U.S. State, Defense and Treasury Departments and their NATO superstructure of coercive military bases. As Paul Craig Roberts recently summarized the dynamic, we are back with George Orwell’s 1984 global fracture between Oceania (the United States, Britain and its northern European NATO allies as the sea and air power) vs. Eurasia as the consolidated land power.
Footnotes:
[1] The SCO was created in 2001 in Shanghai by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. India and Pakistan are scheduled to join, along with Iran, Afghanistan and Belarus as observers, and other east and Central Asian countries as “dialogue partners.”
[2] “Putin Seeks Alliance to Rival TPP,” RT.com (December 04 2015). The Eurasian Economic Union was created in 2014 by Russia, Belarus and Kazakhstan, soon joined by Kyrgyzstan and Armenia. ASEAN was formed in 1967, originally by Indonesia, Malaysia the Philippines, Singapore and Thailand. It subsequently has been expanded. China and the AIIB are reaching out to replace World Bank. The U.S. refused to join the AIIB, opposing it from the outset.
[8] Anders Åslund, “Ukraine Must Not Pay Russia Back,” Atlantic Council, November 2, 2015 (from Johnson’s Russia List, November 3, 2015, #50).
[9] Anders Aslund, “The IMF Outfoxes Putin,” op. cit.
[10] Quoted in Tamara Zamyantina, “IMF’s dilemma: to help or not to help Ukraine, if Kiev defaults,” TASS, translated on Johnson’s Russia List, December 9, 2015, #9.
[11] I provide a narrative of the Greek disaster in Killing the Host (2015).
[15] Anton Siluanov, “Russia wants fair rules on sovereign debt,” Financial Times, op. cit.. He added: “Russia’s financing was not made for commercial gain. Just as America and Britain regularly do, it provided assistance to a country whose policies it supported. The US is now supporting the current Ukrainian government through its USAID guarantee programme.”
“Lavrov: U.S. admits lack of prospects of restoring Ukrainian solvency,” November 7, 2015, translated on Johnson’s Russia List, December 7, 2015, #38.[21]
[24] Kenneth Rapoza, “IMF Says Russia Right About Ukraine $3 Billion Loan,” Forbes.com, December 16, 2015. The article added: “the Russian government confirmed to Euroclear, at the request of the Ukrainian authorities at the time, that the Eurobond was fully owned by the Russian government.”
After the Crash 