AGING DOLLAR VS.YOUNG AMERO

AGING DOLLAR VS.YOUNG AMERO
by The Mogambo Guru

If you are one of those people who bizarrely think that The Stupid Mogambo
(TSM) has enough smarts or education to have an opinion about anything, I
laugh at you in scorn, and I laugh at you again when you ask for my
Idiotic Mogambo Opinion (IMO) about the euro, now that you are getting
scared of the dollar, as you should be. Being kind and charitable, as in
"just before Christmas I'm as good as I can be", let me politely tell you,
for the record, "Don't Make Me Laugh, Jerkface! (DMMLJ)".

You may not know it, but this bizarre economic scheme of having one
monetary policy and multiple fiscal policies is as popular around the
Mogambo household as it is in Europe. The wife and kids have banded
together into the Mogambo Union (MU), and their official position is that,
since there are five of us, then all the money ought to be divided up
equally, and everybody get a fifth of the money. My wife is siding with
the kids in this idiocy because, I guess, she has formed some kind of
"bond" with them over the last 15 years or something. Or she's just being
hateful. Who knows? Who the hell cares?

But anyway, they are serious about this single monetary policy thing. And
if you can contain your laughter for another second, you will realize that
this is the exact same situation with the euro, and they are serious,
too.

The only difference, what I call the "Crucial Mogambo Difference (CMD)",
between the two systems is that in dealing with the Mogambo Union (MU), I
control rogue members by bursting into their rooms and screaming like a
banshee with a baseball bat, in order to knock some sense into their thick
heads (which, fortunately so far, always miraculously occurs about halfway
through my initial windup backswing), while in the European Union (EU),
they don't. A crucial difference to be sure - although the stupidity is
exactly the same.

Susan asks, "With the collapse of the dollar on the horizon and the
'Amero' lining up to take its place, how will this new currency affect our
gold and silver?"

For one thing, the Amero is supposedly a proposed new common currency for
(at least) Canada, the United States and Mexico that will replace our
individual moneys, including the dollar, and morph us all seamlessly into
one big, happy, multi-lingual, multi-cultural family with vast income and
wealth disparities, which is funny enough in itself that rational people
would even contemplate such preposterous stupidity.

But the economic mess that is engulfing us, precipitated by the dollar
getting destroyed by the actions and inactions of the Federal Reserve and
Congress for so many years, has to be resolved somehow! Why not the Amero?
And if not the Amero, my Darling Mogambo Cherub (DMC), then what?

And with a worthless dollar, soaring inflation and a grumpy electorate,
what better solution than to (like most other countries in history have
done in times of their own well-deserved economic crises caused exactly
like ours) expropriate the resources and assets of some other countries,
such as Canada and Mexico? Hahaha! America at its finest hour! We have
evolved to the point where we Americans can now, literally, conquer other
countries, and acquire their assets and resources to bail us out of the
economic mess we created (which is the impetus for all wars), all without
firing a shot! Or even threatening to! A miracle of modern politics and
corruption!

As to whether or not it is true, there surely are people who desperately
want it to be true because they are all lining themselves up to make a big
profit from it somehow.

And for how it affects gold, it will have, at worst, no effect, as that is
the beauty of gold; it is impervious to currencies and their depredations,
and its buying-power value over the last 4,000 years is almost a constant,
which is the whole point of how gold "preserves wealth"!

In the best-case scenario, gold (and silver, and all commodities) will
soar like they always have in the inevitable bust at the end of long
booms, which are always financed by the massively excessive creation of
money and credit, via the historically timeless and brainless expedient of
a fiat currency, a reckless banking system and a complicit,
intellectually-corrupt government.

And with the absolute, 100% certainty of a bust happening again, just like
it always has, without exception, in thousands of countries, to thousands
of currencies, for several thousand years, gold will rise triumphant, just
as gold has always risen triumphant! And that one fact, alone, explains
why I am always strongly suggesting, in a very loud and irritating voice,
for you to get silver and gold right (pause) freaking (pause) now, if not
sooner.

And it is because of the disdain of the ridiculous dollar, which is
actually spreading, as we gather from an email from Christian S., who was
kind enough to send an English translation of a posting from
Argentinienaktuell.com, which is that, starting mid-2007, "Argentina and
Brazil do not plan to use the U.S. dollar" for commercial exchange between
themselves. They will use their own currencies, the Argentine peso and
Brazilian real, and the article hinted that abolishment of the dollar to
effect commercial exchanges between Argentina and Brazil could be next.

But, apparently, people are surprised that the debasement of the dollar
has impacted coins, in that the metal in our pennies and nickels is worth
more than the face value of the coins. So the government, instead of
"doing the right thing" to permanently eliminate inflation by stopping its
own cancerous growth and by preventing the Federal Reserve from constantly
creating more money and credit, has instead simply made it illegal to melt
or export quantities of coins!

It was from the New York Times that I got the news, in their article
"Rising Metal Prices Prompt Ban on Melting and Export of Coins", that "The
United States Mint, concerned that rising metal prices could lead to
widespread recycling of pennies and nickels, has banned melting or
exporting them. According to calculations by the Mint, the metal value of
pennies, which are made of copper-coated zinc, is now more than one cent.
The metal value of 5-cent coins, made from a copper-nickel blend, is up to
7 cents. Adding in the costs of manufacturing means the Mint now spends
1.73 cents for every penny and 8.74 cents for every nickel it makes."

Hahaha! The penalty? Up to a $10,000 fine, and imprisonment of up to five
years, or both!

Paul R. sardonically notes, "Notice that I am only allowed to carry $5
worth of coins out of the country, because they have real value. But I'm
allowed to take $10,000 of their worthless dollars with me, because they
have no real value." Hahaha! Exactly, Paul!

USAToday adds the news that the government has changed the composition of
coins lots of times ("The penny," they report, "which was pure copper when
it was introduced in 1793, was last changed in 1982") and always in
response, of course, to rising metal prices, which is more solid evidence
of inflation and, thus, more proof of complete government incompetence,
and if we had any brains at all we would rise up in vicious outrage and
descend upon Washington as an ugly, drunken, mindless mob, unleashing our
righteous vengeance on Congress (except Rep. Ron Paul) and the Federal
Reserve, and then maybe other central banks around the world would see the
carnage on TV and, glued in rapt fascination to the lurid screens, they
would say amongst themselves "Oh, my God! We had better stop doing that
same monetary crap right now! Hey! Is that a bag of flaming dog poop he's
throwing? Ewww!"

Well, to be honest, USAToday did not actually say that, but they might as
well have (and in my opinion should have). But they did say that copper
averaged about 75 cents a pound in 1982. And how is copper faring since
then? From ABCNews.go.com we learn "Copper prices are up more than 180
percent since mid-2003, selling for just more than $3 a pound." Almost
tripled in three years? And yet there is no inflation? Hahahaha! This is
insane!

Until next week,

The Mogambo Guru

North American Union: One Crisis Away

Pastor, a professor at American University, says that in such a case the Security and Prosperity Partnership of North America, or SPP – launched in 2005 by the heads of the three countries at a summit in Waco, Texas – could be developed into a continental union, complete with a new currency, the amero, that would replace the U.S. dollar just as the euro has replaced the national currencies of Europe.

In May 2005, Pastor was co-chairman the Council on Foreign Relations task force that produced a report entitled "Toward a North American Community," which he has claimed is the blueprint behind the SSP declared by President Bush, Mexico's then-President Vicente Fox, and Canada's then-Prime Minister Paul Martin.

At American University in Washington, D.C., Pastor directs the Center for North American Studies where he teaches a course entitled "North America: A Union, A Community, or Just Three Nations?" As WND previously has reported, Pastor is on the board of the North American Forum on Integration, the NAFI, a non-profit organization that annually holds a mock trilateral parliament for 100 selected students drawn from 10 universities in the U.S., Canada and Mexico.

Pastor had published an interview in Spanish in the Oct. 24 issue of Poder y Negocios. He told the magazine crises can force decisions that otherwise would not be made.

"The 9/11 crisis made Canada and the United States redefine the protection of their borders," Pastor explained. "The debt crisis in Mexico forced the government to adapt a new economic model. The crises oblige the governments to make difficult decisions."

This was the first time WND had found a major intellectual leader behind the push to integrate North America suggesting that a crisis of 9-11 proportions might be just what was needed to advance the process toward establishing a North American Union and the amero. WND reached Pastor in his office at American University and conducted a telephone interview to make sure the Spanish publication accurately reflected his views.

He affirmed the Spanish interview represents his thinking.

"What I'm saying is that a crisis is an event which can force democratic governments to make difficult decisions like those that will be required to create a North American Community," he said. "It's not that I want another 9/11 crisis, but having a crisis would force decisions that otherwise might not get made."

Pastor noted, for example that "Europeans, facing the crisis of two World Wars, turned to the European Community as a means to prevent war and advance their economic interests."

"The United States turned to the Marshall Plan when faced with the crisis of Western Europe falling into the hands of communism," he said. "So, I'm not advocating, or encouraging, or wanting a crisis, I'm only saying that in order to take important initiatives, sometimes one manner in which this occurs is when there is a crisis to which leaders need to respond."

Pastor told WND he lamented that the leadership of the three North American countries is not positioned to make the type of tough decisions needed to advance a North American Community agenda.

In his interview with Poder y Negocios, he argued, "Canada has a minority government and Mexico will soon have a minority government that will be confronted with what amounts to an uprising that we hope will be peaceful. The United States has a lame duck president whose principle preoccupation is the war in Iraq and instability in the Middle East."

Pastor further told WND Mexico's Fox made a tactical mistake by laying out an overly ambitious agenda to integrate with the United States.

"President Bush then took on the issue of illegal immigration, and it proved to be much more difficult than anticipated," he said. In the absence of strong North American leadership, is a crisis the way greater North American integration can be expected to happen?

"There are alternatives to a crisis for getting a major decision adopted by the president and by the congress," Pastor responded. "But what I am saying is that we lack the kind of North American leadership we need. Our founding fathers created a system of governance that was not designed to be efficient but was designed to protect freedom. Therefore, you created checks and balances that did protect freedom but also made it difficult to move forward on important issues."

Pastor was asked what North American leaders would need to do to move toward integration.

"We need to form a customs union to move North American integration to a new level," Pastor argued. "A customs union would eliminate rules of origin on the border and agree to a common external tariff. This would not be easy but not as difficult as NAFTA was, and it would lead to efficiencies in our economies and in the end contribute to a better standard of living for all parties."

Pastor also called for a North American Investment Fund to invest in Mexico's infrastructure.

"If we had a North American Investment Fund," Pastor explained, "over the long term, you would narrow the income gap between Mexico and the U.S."

WND previously reported Sen. John Cornyn, R-Texas, dropped his support for legislation (S. 3622) he introduced in the 109th Congress to create a North American Investment Fund after WND pointed out the proposed law would advance an important part of Pastor's agenda to create a North American Community.

Pastor was careful to distinguish that his proposals were designed to create a North American Community and that he never has proposed to create a North American Union as an EU-style regional government.

"What I am recommending is a series of functional steps that are more than incremental," Pastor admitted. "Each of the proposals I have laid out represent more than just small steps. But it doesn't represent a leap toward a North American Union, or even to some confederation of any kind. I don't think either is plausible, necessary, or even helpful to contemplate at this stage."

The idea seems to be to put new structures in place that change the look of the landscape. WND pointed out to Pastor that this step-by-step approach is the same approach taken to create the European Union. The memoirs of Jean Monnet, regarded as the architect of European unity, finally disclosed he had used a strategy of deceit, knowing his plan to form a European Union would never succeed if it were openly disclosed.

Pastor was asked if he thought a North American Union was a bad idea.

"No," he replied. "I don't think a political union of North America is an inherently bad idea, nor do I think it is a good idea for North America right now. I teach a course at American University in which I look at the different options for political integration of North America, and I put the options before the students."

Then why is a North American Union a bad idea right now?

"The reason the political integration is not a good idea at this stage now, perhaps never, is because of people like yourself who immediately begin to fear that their sense of America could disappear," Pastor responded. "Somehow, if you're fearful that America's sovereignty will disappear, you won't even take small steps forward. You just get mired in the status quo. The problem is that the world is moving very rapidly, and you can't stay competitive if you don't move."

Pastor did not reject the idea that a North American Union could form, but only after further continental economic integration and the development of a North American Community in which people are able to think as citizens of North America.

Is China the winner in the NAFTA super-corridors being planned for North America?

"If you define trade in zero-sum terms, China may be the winner in the transportation corridors," Pastor conceded. "But even in zero-sum terms, consumers benefit from the increasing imports that give them more choice and give them more quality. In the final analysis, we are all consumers."

Pastor affirmed he favors globalism.

"I believe," he explained to WND, "that globalization is a net plus for the world economy, for the middle class, and for all people."

You are Being Deceived About Fluoride: The Hidden Agenda

Dr. Stanley Monteith goes over the history of fluoride, its use, its dangers and its promotion over time. Why something that is rejected by so many nations is promoted here in the USA. Learn about the Hidden Agenda behind the use of Fluoride, who's behind it and the real purpose behind its use in this excellent video (1 hour, 8 minutes).

About 11 minutes into the video you will learn that 7000 employees in the EPA have petitioned the EPA through their union to stop water fluoridation because it isn’t safe. You would think it would be discussed widely on the news, but it wasn’t.

The controlled American media

Only five megacorporatins that control 95% of the media in America. These dominant media determine what most Americans see here and read. Fortunately new media outlets like this site and others allow the average consumer access to the type of truth presented in this video...

The Hidden Agenda - - How You Are Being Deceived About Fluoride

A South American Union

South American leaders called for greater continential unity as they opened a two-day summit in Bolivia that drew the region's new wave of leftist leaders.

Bolivian President Evo Morales, host of the Community of South American Nations summit, invited his fellow heads of state to join him in writing a new story for South America.

"We are truly in an age of making history," Morales said during Friday's ceremony in the Bolivian city of Cochabamba. "We must make history _ a history that will leave behind a black history of subjugation and injustice."

The fiery leftist Venezuelan President Hugo Chavez said South America should come together as one. "Only united can we be free, and only free can we fly," he told reporters upon arrival.

Brazilian President Luiz Inacio Lula da Silva agreed that the time had come for integration and suggested that one day South America, or even all of Latin America, might form a parliament based in Cochabamba.

"South America is one of the last regions on earth to express itself politically toward the goal of integration," Silva said.

Also attending the summit were socialist Chilean President Michelle Bachelet and Ecuador's leftist President-elect Rafael Correa.

Nicaragua's President-elect Daniel Ortega of the Sandinista party also arrived Friday as a guest from Central America, sporting a black leather jacket similar to those favored by Morales.

As the leaders gathered, Bolivia faced storms both political and literal.

Demonstrators for and against Morales fired shots Friday at several buildings in the eastern lowland city of Santa Cruz, Bolivia's wealthiest and a center of opposition to Morales.

Meanwhile, Indian women in traditional velvet skirts and white straw hats scraped mud from streets in the summit's host city, Cochabamba, as they dug out from a deadly hailstorm blamed for killing a family of three whose car fell into a flooded canal and a fourth person who was electrocuted by a fallen power cable.

The summit is aimed at trade and energy issues, as well as weaving closer economic ties between South American nations split between the Mercosur and Andean trade pacts. Leaders have said they hope eventually for continentwide community similar to the European Union _ or China, as Peruvian President Alan Garcia suggested Friday.

"We in South America produce more than China, we export more than China," Garcia said. "But we don't have a common currency like China's, which makes the dollar back down and dominates the other currencies of the world."

Also likely to be discussed during the summit are ambitious proposals for giant infrastructure projects tying the continent together.

Correa on Friday proposed a land-and-river trade route linking Brazil's Amazon rain forest to Ecuador's Pacific coast, saying it could be an alternative to the Panama Canal.

Chavez, meanwhile, dreams of a pipeline able to deliver his country's natural gas the length of the continent.

Outside the fancy ballrooms hosting the summit, Morales also convened a "complementary" conference meant to give the continent's Indian groups, trade unions, landless peasants and local coca farmers a greater voice in South America's future.

Latin America Votes for Socialism

In the last decade Latin America has experiencded significant and hopefully irreversible changes in its political landscape, says Pastor Valle-Garay, senior scholar of York University in Canada.

Brutal dictatorships and violent military interventions often plotted in Washington, says the scholar, are definitely out, while people going to the polls in massive numbers and selecting their leaders through democratic processes are marking the trend.

While proven criminals like General Augusto Pinochet who threatens to cheat Chilean justice from sending him to prison, elsewhere Latin America nations demand that political ruffians Alberto Fujimori (Perú), Arnoldo Alemán (Nicaragua), Alfonso Portillo and Efraín Rivas Montt (Guatemala), Raúl Cubas (Paraguay) and Juan Bordaberry (Uruguay) be brought to trial on a myriad of charges which include assassinations, corruption, fraud, nepotism and money laundering.

Obviously a new era has dawned in the Hemisphere, says Valle-Garay. Cuba’s peaceful transfer of power, the re-election of presidents in Brazil and Venezuela, and the election of new governments in Bolivia, Chile, Ecuador and Nicaragua are evidence that times are changing.

Latin Americans are now consistently sending to the presidency a decidedly socialist slate, all this peacefully and matter-of-factly highlights the York University scholar.

The White House, however, has reacted in utter shock. As if losing the wars against Iraq and in Afghanistan were not sufficient catastrophic signs of a US President out of touch with reality, “losing” Latin America only confirmed that the mouse that roared could not handle the cat and the cheese at the same time.

Giving President Bush credit for even thinking about Latin America amounts to absolute nonsense, says the expert. "The US President has absolutely not a single original thought regarding Latin America, or the world or in the United States for that matter", affirms Valle-Garay.

The President and the pundits have again underestimated Latin America’s ability to set its own political course and to choose government leaders independently of Washington’s nefarious influence, much in the same fashion as they disastrously underestimated Iraq’s ability to defend itself against the US invasion.

The outcome of the recent vote in Latin America indicates that the current move towards unique, tropical variations of socialism is the inevitable result of political maturity.

The relatively new political and social approach entails a rather practical response to the profound social problems of a Hemisphere in dire need of comprehensive social reforms which must benefit nearly 70% of a population barely surviving below the poverty line, underlines Valle-Garay.

Practically every newly elected Latin American President has made firm commitments to combat poverty, illness, illiteracy and unemployment.

Without exceptions the new socialist governments have pledged support to the private sector, have encouraged local and foreign investors to participate in economic development, and expressed hope to maintain friendly relations with the United States as long as these relations as well as Free Trade are based on mutual respect.

While the scholar thinks it is too early to tell how the socialist trends will translate into concrete measures, Bolivia has already nationalized hydrocarbons and the land, engages in a massive literacy campaign and improves its health system with outstanding results already in a few months.

Venezuela has done that and much more under the Hugo Chavez administration, as it is bringing together a continent divided until now with cooperation projects already in operation like the groups Petrosur and Petrocaribe, selling cheap oil to destitute communities throughout Central and North America, including the United States.

According to the Canadian scholar, the newly-elected left seems to be heading in the right direction. That they do so while willing to risk criticism for its radical departures from the more traditional left-leaning political perspectives, is a tribute to their ability to challenge conventional structures.

They are willing even to risk a White House response like the brutal embargo and the criminal attacks unleashed by Washington against Cuba for half a century.

It will be a difficult course to navigate, warns Valle-Garay. The bottom line nevertheless is that the new governments really have no options. They must change the course and curse of past experiences, whether Washington or any other forces think differently.

The Latin American electorate expects results from its leaders and it has demonstrated that when corrupt leaders fail to deliver, the voter will democratically throw them out of power, send them before the courts and sentence them to long terms in prison.

The Red Revolution Rolls On

Another Latin American nation has joined the list of countries south of the border that have elected populist progressive leaders who reject the neo-mercantilism of the United States. Rafael Correa, a U.S.-trained economist and friend of Venezuela's Hugo Chavez, roundly defeated his conservative, Bush administration-backed banana plantation tycoon opponent, Alvaro Noboa. Correa received 57 percent of the vote to Noboa's 43 percent.

Correa's win follows the victory of progressive populist Daniel Ortega in Nicaragua.

Ecuador's Rafael Correa joins Hugo Chavez, Evo Morales, Daniel Ortega, Tabare Vazquez, and Raul Castro in anti-neo-mercantile Latin American alliance.

During the campaign, Noboa quoted the Bible and bragged about his close ties to the international bankers' class, including the Rockefeller family. It is clear that a commanding majority of the Ecuadorian people are wiser than a number of Americans who consistently fall for Bible-thumping hypocrites with fat bank accounts.

Confessions of a Healthcare Hitman

How Multinational Corporations Evade Taxes

By Peter Rost, M.D.

Drug companies and other multinational companies based in the U.S. systematically avoid paying tax in the U.S. on their profits. The companies elect to realize profits in low-tax countries and because of this the rest of us have to pay billions of unnecessary taxes to make up for the shortfall, writes Peter Rost, an ex-pharmaceutical executive.

The biggest tax scam on earth has a very innocent sounding name. It is called "transfer prices." That almost sounds boring. It is, however, anything but boring. Abuse of transfer prices is a key tool multinational corporations use to fool the U.S. and other jurisdictions to think that they have virtually no profit; hence, they shouldn’t pay any taxes.

Corporations involved in this scam are "model corporate citizens,"or so they would like us to believe. The truth is that they rob us all blind. The money we lose can be estimated in the tens of billions, or possibly hundreds of billions of dollars every year. We all end up paying higher taxes because rich corporations make sure they don’t.

But don’t take my word for this.

A few weeks ago U.K.-based GlaxoSmithKline (GSK), one of the largest pharmaceutical companies in the world, together with the Internal Revenue Service (IRS) announced that GSK will pay $3.4 billion to the IRS to settle a transfer pricing dispute dating back 17 years. The IRS
alleges that GSK improperly shifted profits from their U.S. to the U.K. entity.

And U.K. pharmaceutical companies are not alone with these kinds of problems. Merck, one of the largest U.S. drug companies, also this month disclosed that they face four separate tax disputes in the U.S. and Canada with potential liabilities of $5.6 billion. Out of that amount,
Merck disclosed that the Canada Revenue Agency issued the company a notice for $1.8 billion in back taxes and interest "related to certain inter-company pricing matters." And according to the IRS, one of the schemes Merck used to cheat American tax payers was by setting up a subsidiary in tax-friendly Bermuda. Merck then quietly transferred patents for several blockbuster drugs to the new subsidiary and then paid the subsidiary for use of the patents. The arrangement in effect allowed some of the profits to disappear into Merck’s own "Bermuda triangle."

I have described many more ways the global drug industry cheats and defrauds our government in my recent book, "The Whistleblower, Confessions of a Healthcare Hitman." In this article, however, I’m going to focus on how they, and other rich multinationals, use the tax system to defraud us.

So what’s going on here, how have multinational drug companies been able to gouge us for years selling expensive drugs and then avoid paying tax on their astronomical profits?

The answer is simple. For companies in certain businesses, such as pharmaceuticals, it is very easy to simply "invent" the price a company charges their U.S. business for buying the company’s product which they manufacture in another country. And if they charge enough, poof; all the profit vanishes from the US, or Canada, or any other regular jurisdiction and end up in a corporate tax-haven. And that means American and Canadian tax payers don’t get their fair share.

Many multinational corporations essentially have two sets of bookkeeping. One set, with artificially inflated transfer prices is what they use to prepare local tax returns, and show auditors in high-tax jurisdictions, and another set of books, in which management can see the true profit and lost statement, based on real cost of goods, are used for the executives to determine the actual performance of their various operations.

Of course, not every multinational industry can do this as easily as the drug industry. It would be difficult to motivate $6,000 toilet seats. But the drug industry, where real cost of goods to manufacture drugs is usually around 5% of selling price, has a lot of room to artificially increase that cost of goods to 50% or 75% of selling price. This money is then accumulated in corporate tax-havens where the drugs are manufactured, such as Puerto Rico and Ireland. Puerto Rico has for many years attracted lots of pharmaceutical plants and Ireland is the new destination for such facilities, not because of the skilled labor or the beautiful scenery or the great beer—but because of the low taxes. Ireland has, in fact, one of the world’s lowest corporate tax rates with
a maximum rate of 12.5 percent.

In Puerto Rico, over a quarter of the country’s gross domestic product already comes from pharmaceutical manufacturing. That shouldn’t be surprising. According to the U.S. Federal Tax Reform Act of 1976, manufacturers are permitted to repatriate profits from Puerto Rico to the U.S. free of U.S. federal taxes. And by the way, the Puerto Rico withholding tax is only 10%.

Of course, no company should have to pay more tax than they are legally obligated to, and they are entitled to locate to any low-tax jurisdiction. The problem starts when they use fraudulent transfer pricing and other tricks to artificially shift their income from the U.S. to a tax-haven. According to current OECD guidelines transfer prices should be based upon the arm’s length principle – that means the transfer price should be the same as if the two companies involved were indeed two independents, not part of the same corporate structure. Reality is that standard operating procedure for multinationals is to consistently violate this rule. And why shouldn’t they? After all, it takes 17 years for them to pay up, per the GSK example above, even when they get caught.

Another industry which successfully exploits overseas tax strategies to cheat us all is the hi-tech industry. In fact, Microsoft Corp. recently shaved at least $500 million from its annual tax bill using a similar strategy to the one the drug industry has used for so many years. Microsoft has set up a subsidiary in Ireland, called Round Island One Ltd. This company pays more than $300 million in taxes to this small island country with only 4 million inhabitants, and most of this comes from licensing fees for copyrighted software, originally developed in the U.S. Interesting thing is, at the same time, Round Island paid a total of just under $17 million in taxes to about 20 other countries, with more than 300 million people. The result of this was that Microsoft's world-wide tax rate plunged to 26 percent in 2004, from 33 percent the year before. Almost half of the drop was due to "foreign earnings taxed at lower rates," according to a Microsoft financial filing. And this is how Microsoft has radically reduced its corporate taxes in much of Europe and been able to shield billions of dollars from U.S. taxation.

But remember, this is only one example. Most of the other tech companies are doing the same thing. Google recently also set up an Irish operation that the firm credited in a SEC filing with reducing its tax rate.

Here’s how this is done in the software industry and any other industry with valuable intellectual property. A company takes a great, patented, American product and then develops a new generation. Then, of course, the old product disappears. Some, or all, of the cost and development work for the new product takes place in Ireland, or at least, so the company claims. The ownership of the new generation product and all income from licensing can then legally be shared between the U.S. parent company and the offshore corporation or transferred outright to the tax-haven. The deal, to pass IRS scrutiny, has to be made using the "arms-length principle." Reality is that the IRS has no way of controlling all these transactions.

Unfortunately those of us working and paying tax in the U.S. can’t relocate our jobs and our income to Ireland or another tax haven. So we have to make up the income shortfall. In the U.S. we have a highly educated society with a very qualified workforce, partly supported by our tax payers. This helps us generate breakthrough products. But once a company has a successful product, they have every incentive to move the second generation of a successful product overseas, to Ireland and a few other corporate tax havens.

There is only one problem for U.S. companies with this strategy, and that is that if they repatriate this money to the U.S. they have to pay full corporate taxes. In fact, according to BusinessWeek, U.S. multinational corporations have built up profits of as much as $750 billion overseas, much of it in tax havens such as the Ireland, Bahamas, and Singapore to avoid the stiff 35% levy they'd face if they repatriated the funds back into the U.S.

But of course, Congress, which is basically paid for by our multinational corporations, generously provided for a one-time provision in the corporate tax code, so that they could repatriate profits earned before 2003, and held in foreign subsidiaries, at an effective 5.25% tax rate.

And so the game goes on.

In the end, multinational corporations live in a global world which allows them to pretty much send their money to corporate tax havens at will, and then repatriate this money almost tax free, with the help of the U.S. Congress.

The people left holding the bag are you and me. If you want to know learn more about the corruption in the drug industry, read my new book, "The Whistleblower, Confessions of a Healthcare Hitman."

Nanotechnology Kills: The Bionic Hornet

JERUSALEM (Reuters) - Israel is using nanotechnology to try to create a robot no bigger than a hornet that would be able to chase, photograph and kill its targets, an Israeli newspaper reported on Friday.

The flying robot, nicknamed the "bionic hornet", would be able to navigate its way down narrow alleyways to target otherwise unreachable enemies such as rocket launchers, the daily Yedioth Ahronoth said.

It is one of several weapons being developed by scientists to combat militants, it said. Others include super gloves that would give the user the strength of a "bionic man" and miniature sensors to detect suicide bombers.

The research integrates nanotechnology into Israel's security department and will find creative solutions to problems the army has been unable to address, Deputy Prime Minister Shimon Peres told Yedioth Ahronoth.

"The war in Lebanon proved that we need smaller weaponry. It's illogical to send a plane worth $100 million against a suicidal terrorist. So we are building futuristic weapons," Peres said.

The 34-day war in Lebanon ended with a U.N.-brokered ceasefire in mid-August. The war killed more than 1,200 Lebanese, mostly civilians, and 157 Israelis, mostly soldiers.

Prototypes for the new weapons are expected within three years, he said.

Introducing the nano battery

Introducing the nano battery, as thick as a strand of hair.

Huge Old-School Battery

TEL AVIV — A university here has developed and patented nano-battery technology suitable for military applications.

Professor Menachem Nathan, head of the nano-battery project at Tel Aviv University, said the new battery, with the thickness of a strand of hair, was safer and could recharge faster.

Tel Aviv University has sponsored an effort to develop and patent nano-battery technology. A team of university scientists developed the technology for fast charge/discharge batteries that eliminates fire hazards of lithium-based batteries and could mark an alternative source of power for mobile devices.

"The battery would be especially sought for military applications in equipment used under extreme heat conditions," an industry source said.

Nathan said the safety advantage over lithium was not the focus of the research.

Dick Cheney is next on the chopping block

According to Washington insiders, there are moves afoot to dump Vice President Dick Cheney and replace him with either John McCain or Rudolph Giuliani prior to the 2008 presidential election. Whoever succeeds Cheney will be able to campaign for the presidency with the perks that come with being an incumbent Vice President.

Since the increasingly-besieged Cheney has signaled he has no intention of voluntarily stepping down, the strategy by the Bush camp may be to force him out by presenting evidence before Special Counsel Patrick Fitzgerald that it was Cheney who was responsible for the compromise of CIA non-proliferation covert officer Valerie Plame Wilson and her Brewster Jennings & Associates cover firm.

Observers note the unusual professional relationship between Fitzgerald and Karl Rove's defense attorney Robert Luskin. Insiders believe that Fitzgerald may be proffered a carefully crafted deal by Luskin whereby Rove will testify to Cheney's primary role in the outing of Mrs. Wilson and her firm. The sealed indictment of Rove will then be retired permanently. If such a deal is worked out, Fitzgerald may then offer a deal to Lewis I. "Scooter" Libby, Cheney's former Chief of Staff, to also testify against Cheney. With such double-barreled testimony, President Bush will then be compelled to ask Cheney for his resignation or face a very nasty and public indictment.

Cheney is next on the chopping block.

The game plan appears to be what DC insider Sally Quinn foresaw in her Washington Post op-ed last month, an article that suggested she has spoken extensively to a Donald Rumsfeld who was aware of his impending firing. The op-ed stated that Rumsfeld would not be the scapegoat for Iraq and planned to resign shortly after the election. Quinn, seemingly channeling Rumsfeld, stated that after Rumsfeld left, there will be only two scapegoats left: Dick Cheney and George W. Bush. The article concluded by asking which person would be served up as the official scapegoat for Iraq.

This editor wrote, "based on the arrival of James Baker and a coterie of George H. W. Bush old hands on the scene to bail out Dubya, it is clear that the Bush family does not intend to allow one of its own to be declared scapegoat."

With word from White House sources that Cheney was opposed to the sacking of his old mentor Rumsfeld and even more resistant to the naming of Bush family loyalist Robert Gates to take his place, it is clear that Cheney doesnot want to be placed in a position of exposure. However, even Cheney neo-con allies like Richard Perle and Ken Adelman, sensing that Cheney is the designated scapegoat, have bellowed about the Iraq war being a mistake and are now distancing themselves from the Cheney group, once the most powerful operating cell within the Bush administration.

The Secret World of Robert Gates

By Robert Parry

Robert Gates, George W. Bush’s choice to replace Donald Rumsfeld as Defense Secretary, is a trusted figure within the Bush Family’s inner circle, but there are lingering questions about whether Gates is a trustworthy public official.

The 63-year-old Gates has long faced accusations of collaborating with Islamic extremists in Iran, arming Saddam Hussein’s dictatorship in Iraq, and politicizing U.S. intelligence to conform with the desires of policymakers – three key areas that relate to his future job.

Gates skated past some of these controversies during his 1991 confirmation hearings to be CIA director – and the current Bush administration is seeking to slip Gates through the congressional approval process again, this time by pressing for a quick confirmation by the end of the year, before the new Democratic-controlled Senate is seated.

If Bush’s timetable is met, there will be no time for a serious investigation into Gates’s past.

Fifteen years ago, Gates got a similar pass when leading Democrats agreed to put “bipartisanship” ahead of careful oversight when Gates was nominated for the CIA job by President George H.W. Bush.

In 1991, despite doubts about Gates’s honesty over Iran-Contra and other scandals, the career intelligence officer brushed aside accusations that he played secret roles in arming both sides of the Iran-Iraq War. Since then, however, documents have surfaced that raise new questions about Gates’s sweeping denials.

For instance, the Russian government sent an intelligence report to a House investigative task force in early 1993 stating that Gates participated in secret contacts with Iranian officials in 1980 to delay release of 52 U.S. hostages then held in Iran, a move to benefit the presidential campaign of Ronald Reagan and George H.W. Bush.

“R[obert] Gates, at that time a staffer of the National Security Council in the administration of Jimmy Carter, and former CIA Director George Bush also took part” in a meeting in Paris in October 1980, according to the Russian report, which meshed with information from witnesses who have alleged Gates’s involvement in the Iranian gambit.

Once in office, the Reagan administration did permit weapons to flow to Iran via Israel. One of the planes carrying an arms shipment was shot down over the Soviet Union on July 18, 1981, after straying off course, but the incident drew little attention at the time.

The arms flow continued, on and off, until 1986 when the Iran-Contra arms-for-hostages scandal broke. [For details, see Robert Parry’s Secrecy & Privilege. For text of the Russian report, click here. To view the actual U.S. embassy cable that includes the Russian report, click here.]

Iraqgate Scandal

Gates also was implicated in a secret operation to funnel military assistance to Iraq in the 1980s, as the Reagan administration played off the two countries battling each other in the eight-year-long Iran-Iraq War.

Middle Eastern witnesses alleged that Gates worked on the secret Iraqi initiative, which included Saddam Hussein’s procurement of cluster bombs and chemicals used to produce chemical weapons for the war against Iran.

Gates denied those Iran-Iraq accusations in 1991 and the Senate Intelligence Committee – then headed by Gates’s personal friend, Sen. David Boren, D-Oklahoma – failed to fully check out the claims before recommending Gates for confirmation.

However, four years later – in early January 1995 – Howard Teicher, one of Reagan’s National Security Council officials, added more details about Gates’s alleged role in the Iraq shipments.

In a sworn affidavit submitted in a Florida criminal case, Teicher stated that the covert arming of Iraq dated back to spring 1982 when Iran had gained the upper hand in the war, leading President Reagan to authorize a U.S. tilt toward Saddam Hussein.

The effort to arm the Iraqis was “spearheaded” by CIA Director William Casey and involved his deputy, Robert Gates, according to Teicher’s affidavit. “The CIA, including both CIA Director Casey and Deputy Director Gates, knew of, approved of, and assisted in the sale of non-U.S. origin military weapons, ammunition and vehicles to Iraq,” Teicher wrote.

Ironically, that same pro-Iraq initiative involved Donald Rumsfeld, then Reagan’s special emissary to the Middle East. An infamous photograph from 1983 shows a smiling Rumsfeld shaking hands with Saddam Hussein.

Teicher described Gates’s role as far more substantive than Rumsfeld’s. “Under CIA Director [William] Casey and Deputy Director Gates, the CIA authorized, approved and assisted [Chilean arms dealer Carlos] Cardoen in the manufacture and sale of cluster bombs and other munitions to Iraq,” Teicher wrote.

Like the Russian report, the Teicher affidavit has never been never seriously examined. After Teicher submitted it to a federal court in Miami, the affidavit was classified and then attacked by Clinton administration prosecutors. They saw Teicher’s account as disruptive to their prosecution of a private company, Teledyne Industries, and one of its salesmen, Ed Johnson.

But the questions about Gates’s participation in dubious schemes involving hotspots such as Iran and Iraq are relevant again today because they reflect on Gates’s judgment, his honesty and his relationship with two countries at the top of U.S. military concerns.

About 140,000 U.S. troops are now bogged down in Iraq, 3 ½ years after President George W. Bush ordered an invasion to remove Saddam Hussein from power and eliminate his supposed WMD stockpiles. One reason the United States knew that Hussein once had those stockpiles was because the Reagan administration helped him procure the material needed for the WMD production in the 1980s.

The United States also is facing down Iran’s Islamic government over its nuclear ambitions. Though Bush has so far emphasized diplomatic pressure on Iran, he has pointedly left open the possibility of a military option.

Political Intelligence

Beyond the secret schemes to aid Iran and Iraq in the 1980s, Gates also stands accused of playing a central role in politicizing the CIA intelligence product, tailoring it to fit the interests of his political superiors, a legacy that some Gates critics say contributed to the botched CIA’s analysis of Iraqi WMD in 2002.

Before Gates’s rapid rise through the CIA’s ranks in the 1980s, the CIA’s tradition was to zealously protect the objectivity and scholarship of the intelligence. However, during the Reagan administration, that ethos collapsed.

At Gates’s confirmation hearings in 1991, former CIA analysts, including renowned Kremlinologist Mel Goodman, took the extraordinary step of coming out of the shadows to accuse Gates of politicizing the intelligence while he was chief of the analytical division and then deputy director.

The former intelligence officers said the ambitious Gates pressured the CIA’s analytical division to exaggerate the Soviet menace to fit the ideological perspective of the Reagan administration. Analysts who took a more nuanced view of Soviet power and Moscow’s behavior in the world faced pressure and career reprisals.

In 1981, Carolyn McGiffert Ekedahl of the CIA’s Soviet office was the unfortunate analyst who was handed the assignment to prepare an analysis on the Soviet Union’s alleged support and direction of international terrorism.

Contrary to the desired White House take on Soviet-backed terrorism, Ekedahl said the consensus of the intelligence community was that the Soviets discouraged acts of terrorism by groups getting support from Moscow for practical, not moral, reasons.

“We agreed that the Soviets consistently stated, publicly and privately, that they considered international terrorist activities counterproductive and advised groups they supported not to use such tactics,” Ekedahl said. “We had hard evidence to support this conclusion.”

But Gates took the analysts to task, accusing them of trying to “stick our finger in the policy maker’s eye,” Ekedahl testified

Ekedahl said Gates, dissatisfied with the terrorism assessment, joined in rewriting the draft “to suggest greater Soviet support for terrorism and the text was altered by pulling up from the annex reports that overstated Soviet involvement.”

In his memoirs, From the Shadows, Gates denied politicizing the CIA’s intelligence product, though acknowledging that he was aware of Casey’s hostile reaction to the analysts’ disagreement with right-wing theories about Soviet-directed terrorism.

Soon, the hammer fell on the analysts who had prepared the Soviet-terrorism report. Ekedahl said many analysts were “replaced by people new to the subject who insisted on language emphasizing Soviet control of international terrorist activities.”

A donnybrook ensued inside the U.S. intelligence community. Some senior officials responsible for analysis pushed back against Casey’s dictates, warning that acts of politicization would undermine the integrity of the process and risk policy disasters in the future.

Working with Gates, Casey also undertook a series of institutional changes that gave him fuller control of the analytical process. Casey required that drafts needed clearance from his office before they could go out to other intelligence agencies.

Casey appointed Gates to be director of the Directorate of Intelligence [DI] and consolidated Gates’s control over analysis by also making him chairman of the National Intelligence Council, another key analytical body.

“Casey and Gates used various management tactics to get the line of intelligence they desired and to suppress unwanted intelligence,” Ekedahl said.

Career Reprisals

With Gates using top-down management techniques, CIA analysts sensitive to their career paths intuitively grasped that they could rarely go wrong by backing the “company line” and presenting the worst-case scenario about Soviet capabilities and intentions, Ekedahl and other CIA analysts said.

Largely outside public view, the CIA’s proud Soviet analytical office underwent a purge of its most senior people. “Nearly every senior analyst on Soviet foreign policy eventually left the Office of Soviet Analysis,” Goodman said.

Gates made clear he intended to shake up the DI’s culture, demanding greater responsiveness to the needs of the White House and other policymakers.

In a speech to the DI’s analysts and managers on Jan. 7, 1982, Gates berated the division for producing shoddy analysis that administration officials didn’t find helpful.

Gates unveiled an 11-point management plan to whip the DI into shape. His plan included rotating division chiefs through one-year stints in policy agencies and requiring CIA analysts to “refresh their substantive knowledge and broaden their perspective” by taking courses at Washington-area think tanks and universities.

Gates declared that a new Production Evaluation Staff would aggressively review their analytical products and serve as his “junkyard dog.”

Gates’s message was that the DI, which had long operated as an “ivory tower” for academically oriented analysts committed to an ethos of objectivity, would take on more of a corporate culture with a product designed to fit the needs of those up the ladder both inside and outside the CIA.

“It was a kind of chilling speech,” recalled Peter Dickson, an analyst who concentrated on proliferation issues. “One of the things he wanted to do, he was going to shake up the DI. He was going to read every paper that came out. What that did was that everybody between the analyst and him had to get involved in the paper to a greater extent because their careers were going to be at stake.”

A chief Casey-Gates tactic for exerting tighter control over the analysis was to express concern about “the editorial process,” Dickson said.

“You can jerk people around in the editorial process and hide behind your editorial mandate to intimidate people,” Dickson said.

Gates soon was salting the analytical division with his allies, a group of managers who became known as the “Gates clones.” Some of those who rose with Gates were David Cohen, David Carey, George Kolt, Jim Lynch, Winston Wiley, John Gannon and John McLaughlin.

Though Dickson’s area of expertise – nuclear proliferation – was on the fringes of the Reagan-Bush primary concerns, it ended up getting him into trouble anyway. In 1983, he clashed with his superiors over his conclusion that the Soviet Union was more committed to controlling proliferation of nuclear weapons than the administration wanted to hear.

When Dickson stood by his evidence, he soon found himself facing accusations about his psychological fitness and other pressures that eventually caused him to leave the CIA.

Dickson also was among the analysts who raised alarms about Pakistan’s development of nuclear weapons, another sore point because the Reagan-Bush administration wanted Pakistan’s assistance in funneling weapons to Islamic fundamentalists fighting the Soviets in Afghanistan.

One of the effects from the exaggerated intelligence about Soviet power and intentions was to make other potential risks – such as allowing development of a nuclear bomb in the Islamic world or training Islamic fundamentalists in techniques of sabotage – paled in comparison.

While worst-case scenarios were in order for the Soviet Union and other communist enemies, best-case scenarios were the order of the day for Reagan-Bush allies, including Osama bin Laden and other Arab extremists rushing to Afghanistan to wage a holy war against European invaders, in this case, the Russians.

As for the Pakistani drive to get a nuclear bomb, the Reagan-Bush administration turned to word games to avoid triggering anti-proliferation penalties that otherwise would be imposed on Pakistan.

“There was a distinction made to say that the possession of the device is not the same as developing it,” Dickson told me. “They got into the argument that they don’t quite possess it yet because they haven’t turned the last screw into the warhead.”

Finally, the intelligence on the Pakistan Bomb grew too strong to continue denying the reality. But the delay in confronting Pakistan ultimately allowed the Muslim government in Islamabad to produce nuclear weapons. Pakistani scientists also shared their know-how with “rogue” states, such as North Korea and Libya.

“The politicization that took place during the Casey-Gates era is directly responsible for the CIA’s loss of its ethical compass and the erosion of its credibility,” Goodman told the Senate Intelligence Committee in 1991. “The fact that the CIA missed the most important historical development in its history – the collapse of the Soviet Empire and the Soviet Union itself – is due in large measure to the culture and process that Gates established in his directorate.”

Confirmation Battle

To push through Gates’s nomination to be CIA director in 1991, the elder George Bush lined up solid Republican backing for Gates and enough accommodating Democrats – particularly Sen. Boren, the Senate Intelligence Committee chairman.

In his memoirs, Gates credited his friend, Boren, for clearing away any obstacles. “David took it as a personal challenge to get me confirmed,” Gates wrote.

Part of running interference for Gates included rejecting the testimony of witnesses who implicated Gates in scandals beginning with the alleged back-channel negotiations with Iran in 1980 through the arming of Iraq’s Saddam Hussein in the mid-1980s.

Boren’s Intelligence Committee brushed aside two witnesses connecting Gates to the alleged schemes, former Israeli intelligence official Ari Ben-Menashe and Iranian businessman Richard Babayan. Both offered detailed accounts about Gates’s alleged connections to the schemes.

Ben-Menashe, who worked for Israeli military intelligence from 1977-87, first fingered Gates as an operative in the secret Iraq arms pipeline in August 1990 during an interview that I conducted with him for PBS Frontline.

At the time, Ben-Menashe was in jail in New York on charges of trying to sell cargo planes to Iran (charges which were later dismissed). When the interview took place, Gates was in a relatively obscure position, as deputy national security adviser to President George H.W. Bush and not yet a candidate for the top CIA job.

In that interview and later under oath to Congress, Ben-Menashe said Gates joined in meetings between Republicans and senior Iranians in October 1980. Ben-Menashe said he also arranged Gates’s personal help in bringing a suitcase full of cash into Miami in early 1981 to pay off some of the participants in the hostage gambit.

Ben-Menashe also placed Gates in a 1986 meeting with Chilean arms manufacturer Cardoen, who allegedly was supplying cluster bombs and chemical weapons to Saddam Hussein’s army. Babayan, an Iranian exile working with Iraq, also connected Gates to the Iraqi supply lines and to Cardoen.

Gates has steadfastly denied involvement in either the Iran-hostage caper or the Iraqgate arms deals.

“I was accused on television and in the print media by people I had never spoken to or met of selling weapons to Iraq, or walking through Miami airport with suitcases full of cash, of being with Bush in Paris in October 1980 to meet with Iranians, and on and on,” Gates wrote in his memoirs. “The allegations of meetings with me around the world were easily disproved for the committee by my travel records, calendars, and countless witnesses.”

But none of Gates’s supposedly supportive evidence was ever made public by either the Senate Intelligence Committee or the later inquiries into either the Iran hostage initiative or Iraqgate.

Not one of Gates’s “countless witnesses” who could vouch for Gates’s whereabouts was identified. Though Boren pledged publicly to have his investigators question Babayan, they never did.

Perhaps most galling for those of us who tried to assess Ben-Menashe’s credibility was the Intelligence Committee’s failure to test Ben-Menashe’s claim that he met with Gates in Paramus, New Jersey, on the afternoon of April 20, 1989.

The date was pinned down by the fact that Ben-Menashe had been under Customs surveillance in the morning. So it was a perfect test for whether Ben-Menashe – or Gates – was lying.

When I first asked about this claim, congressional investigators told me that Gates had a perfect alibi for that day. They said Gates had been with Senator Boren at a speech in Oklahoma. But when we checked that out, we discovered that Gates’s Oklahoma speech had been on April 19, a day earlier. Gates also had not been with Boren and had returned to Washington by that evening.

So where was Gates the next day? Could he have taken a quick trip to northern New Jersey? Since senior White House national security advisers keep detailed notes on their daily meetings, it should have been easy for Boren’s investigators to interview someone who could vouch for Gates’s whereabouts on the afternoon of April 20.

But the committee chose not to nail down an alibi for Gates. The committee said further investigation wasn’t needed because Gates denied going to New Jersey and his personal calendar made no reference to the trip.

But the investigators couldn’t tell me where Gates was that afternoon or with whom he may have met. Essentially, the alibi came down to Gates’s word.

Ironically, Boren’s key aide who helped limit the investigation of Gates was George Tenet, whose behind-the-scenes maneuvering on Gates’s behalf won the personal appreciation of the senior George Bush. Tenet later became President Bill Clinton’s last CIA director and was kept on in 2001 by the younger George Bush partly on his father’s advice.

Now, as the Bush Family grapples with the disaster in Iraq, it is turning to an even more trusted hand to run the Defense Department. The appointment of Robert Gates suggests that the Bush Family is circling the wagons to save the embattled presidency of George W. Bush.

To determine whether Gates can be counted on to do what’s in the interest of the larger American public is another question altogether.

---

Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at Amazon.com, as is his 1999 book, Lost History: Contras, Cocaine, the Press & 'Project Truth.'

Commies in Nicaragua

Ortega heads to Nicaragua vote victory

MANAGUA, Nicaragua (Reuters) - Former Marxist revolutionary and U.S. Cold War enemy Daniel Ortega headed back toward power on Monday in Nicaragua's presidential election 16 years after voters threw him out to end a war against U.S.-trained rebels.

With returns in from 40 percent of polling stations in Sunday's election, the 60-year-old Ortega had just above the 40 percent of votes that would seal a first-round win.

Two quick counts by respected observer groups also gave Ortega a big enough lead to win without facing a runoff.

An Ortega victory would be a blow to Washington, which backed Contra rebels in the 1980s civil war and fears the leftist would join an anti-U.S. bloc in Latin America led by Venezuelan President Hugo Chavez.

Ortega kept a low profile on Monday but thousands of Sandinista supporters set off fireworks through the night and raced through the streets waving black-and-red party flags.

"We have to leave behind all the serious problems our country has suffered in the past, and move forward," said Ortega's vice presidential running mate Jaime Morales, a former Contra leader who joined his old enemy's camp early this year.

Ortega led the Sandinista revolution that toppled U.S.-backed dictator Anastasio Somoza in 1979 and then allied Nicaragua with the Soviet Union as much of Central America became a Cold War battleground.

When asked in Washington on Monday about the possibility that Ortega has had a change of heart, U.S. Secretary of State Condoleezza Rice appeared skeptical. "We'll see," she said.

Although Ortega says he is now more moderate and campaigned on a vague center-left program, U.S. officials warned of a cut in aid and investment to Nicaragua if Ortega won.

CORRUPTION, POVERTY

Voters in Nicaragua, the second poorest country in the Western Hemisphere after Haiti, apparently ignored the U.S. warnings. They instead punished conservative candidates after three straight pro-U.S. governments failed to tackle poverty and were hit by a series of corruption scandals.

Conservative rival Eduardo Montealegre, who was Washington's favored candidate, trailed with 32.7 percent in the partial results, although he insisted his party's numbers showed he won enough votes to force a runoff next month.

Two election observer organizations -- Ipade and the Ethics and Transparency group -- released quick count results on Monday that both gave Ortega a first-round victory.

Ortega needs 40 percent of the vote, or 35 percent with a 5-point lead, to avoid a runoff he would almost certainly lose as Montealegre would pick up votes from third-placed candidate Jose Rizo.

Still, Montealegre refused to concede defeat and said the election was loaded with irregularities. "This is not over until the last vote is counted," he said.

U.S. officials in Nicaragua said they found irregularities in voting and refused to back the election until the returns were in and problems of polling stations opening late and closing early were investigated.

Roberto Rivas, head of Nicaragua's top electoral body, angrily insisted it was a clean, transparent election.

This was Ortega's third comeback attempt since 1990, when voters weary of the Contra war, a deep economic crisis and Sandinista mismanagement turned against him.

His defeat was celebrated by then U.S. President George Bush, whose son would now have to deal with a new Ortega presidency.

Although Ortega now speaks more of God than revolution, he worries many Nicaraguans who blame Sandinista rule for 30,000 civil war deaths, hyperinflation and rationing in the 1980s.

"That man took our children and sent them to war. We had no food, it was impossible to live here," said Claudia Ruiz, a middle-aged woman in Managua. "How is it possible that people voted for him?"

Ortega supporters say the Sandinistas tried to help the poor but were crippled by a U.S. embargo and the Contra war.

"They never let Ortega govern," said Adela Martinez as she voted on Sunday in Managua. "Let's give him another chance."

By Kieran Murray and Catherine Bremer

Moonies/UN: UPDATE

WMR's "Special Alert" on possible links between the favored next UN Secretary General Ban Ki-moon and the Unification Church of Sun Myung Moon, a strong Bush family political and financial supporter, has brought indignant replies from certain members of Ban Ki-moon's support network. They are claiming that Ban Ki-moon was carefully vetted before being nominated by the Korean government.

However, given the close ties between the Korean government and Sun Myung Moon's organization, that is little consolation. Attention is drawn to a report of the Report of the Subcommittee on International Organizations of the Committee on International Relations, U.S. House of Representatives of October 31, 1978 (Investigation of Korean-American Relations). This is what the report stated about the Unification Church:

"In pursuit of this and other goals, the Moon Organization has attempted, with varying degrees of success, to gain control over or establish business and other secular institutions in the United States and elsewhere, and has engaged in political activities in the United States. Some of these activities were undertaken to benefit the ROK Government or otherwise to influence U.S. foreign policy . . . While pursuing its own goals, the Moon Organization promoted the interests of the ROK Government, and at times did so in cooperation with, or at the direction of, ROK agencies and officials. The Moon Organization maintained mutually beneficial ties with a number of Korean officials . . . The subcommittee found that the Moon Organization has had a number of influential allies in the Korean Government, including Kim Jong Pil, Pak Chon Kyu, and others. Although investigations and publicity in the 1976-78 period appear to have had an effect on the degree of influence Moon’s supporters had with the Korean Government, there were continuing indications that the Moon Organization retained significant support.

"Moon, like Tongsun Park, showed a keen understanding of the use of imagery in building political influence. Just as Tongsun Park used his close relationship with a few Congressmen to attract others, Moon used the names and pictures of prominent Americans, Japanese, Koreans, and others to create an image of power and respectability for himself and his movement. The multifaceted Moon Organization thereby obtained the help and cooperation of numerous Americans who had no idea they were contributing to Moon’s plan for world theocracy.

"Of particular concern is the Moon Organization’s involvement in the production and sale of M-16 rifles and other weapons provided to Korea under U.S. aid programs and subject to the Arms Export Control Act. In late 1977, Moon Organization representatives tried to renegotiate a coproduction agreement between Colt Industries and the ROK Government. The circumstances suggested they were secret envoys of the Korean Government which, under the coproduction agreement, has exclusive control over M-16 production. Although the ROK Government said it wanted to produce 300,000 extra M-16’s because of the need to equip its own forces, Moon Organization tried to get Colt’s agreement to export guns to third countries."

Questions about "Moonie" ties still plague Bush favorite to become next UN Secretary General

The Austrian government reportedly vetted Kurt Waldheim before his election as UN Secretary General in 1972. It was later discovered that Waldheim served in Greece as a German SA-Reiterscorp (Stormtrooper-Cavalry Corps) and was complicit in war crimes. Waldheim's vetting in 1972 was carried out by the Austrian government, then headed by the Jewish Chancellor Bruno Kreisky. Not only did Kreisky endorse Waldheim but the Soviet Union bought off on his candidacy. The Waldheim experience shows that the Secretary General selection process involves a great deal of nationalistic pride on the part of the sponsoring nation on behalf of their candidate. The skeletons in closets rarely emerge.

It is being reported that some Asian nations, particularly Japan, Indonesia, India, and Thailand, are now having serious second thoughts about Ban Ki-moon's candidacy.

Moonies to control the UN?!

SPECIAL ALERT. The Unification Church, the global enterprise of South Korean Rev. Sun Myung Moon (born Yong Myung Moon), may be attempting to take control of the United Nations through the all-but-certain election of South Korean Foreign Minister Ban Ki-moon as UN Secretary General. Foreign Minister Moon is slated to be formally elected Secretary General on October 9 by the UN Security Council. Moon has already won four straw polls by the UN Security Council and is now considered a shoo-in to replace Kofi Annan.

Some informed UN sources are concerned that Moon lists his religious affiliation as "non-denominational Christian," a code word often used by the "Moonies" for the Unification Church. In addition, Secretary of State Condoleezza Rice and UN ambassador John Bolton are attempting to have former Washington Times editor Josette Sheeran Shiner become the next Executive Director of the World Food Program. Sheeran Shiner is a member of Sun Myung Moon's Unification Church. The term of the World Food Program Executive Director is five years. Shiner is currently the Under Secretary of State for Economic, Business and Agricultural Affairs.

Moonies making a play for control of United Nations?

Although Ban Ki-moon and Sun Myung Moon are not related, some UN members may sense that there is something amiss about the Bush administration's strong support for the South Korean Foreign Minister given the close links between some Bush officials and the "Moonies." There were a few "discourage" and "no opinion" ballots cast by Security Council members on Ban Ki-moon. Although the balloting is secret, it is believed that France and the United Kingdom are not thrilled with the Moon nomination and that Japan, a non-permanent member that holds the Security Council presidency for October, is also reportedly opposed to Moon. Ban Ki-moon has lived in the United States for a number of years, having gone to graduate school at Harvard and serving two tours at South Korea's Washington embassy, a diplomatic mission that maintains close contacts with the Sun Myung Moon organization in Washington, DC. The Unification Church, in addition to owning the Washington Times, also owns United Press International.

Moonie attempt to take over United Nations? Possible links between all-but-certain next UN Secretary General Ban Ki-moon, Sun Myung Moon, and Josette Sheeran Shiner nomination as UN World Food Program director. Left to right: Ban Ki-moon, Sun Myung Moon and his wife Hak Ja Han being crowned in the Dirksen Senate Office Building, and Josette Sheeran Shiner, Unification Church member and State Department official.

Sun Mying Moon, who was excommunicated by the Korean Presbyterian church for preaching heresy, claims he is the Messiah and intends to take control of the world. The South Korean government, which has close ties with Sun Myung Moon's organization, has used its considerable public relations machinery to convince the Security Council members to elect Ban Ki-moon as the next Secretary General. Only a veto by one of the four other permanent members -- France, United Kingdom, Russia, or China -- can derail the possibility of a Unification Church ally from becoming the next UN Secretary General.

Energy Policy under the North American Union

Political Tectonic Shift: Energy Policy under the NAU

Traditional combustion-energy paradigm is over-represented at secret high-level negotiations under North American Security and Prosperity Partnership (SPP). Scheduled to begin to exercise power authority by 2007, the SPP will place three nations in the continent under “harmonized” laws and a unified administration. If that is not stopped – and we appear to be past the tipping point – will any of us recognize our society? And will it still be possible to shift the energy paradigm under such a political paradigm shift?

by Mary-Sue Haliburton, Ottawa, Canada
Pure Energy Systems News
Copyright © 2006

Hypothetical NAU flag found on game site. Example of North American Union patriotism illustrated in marquee of charity in Carrollton, Ohio, USA

The North American Energy Policy

In recent decades, with government cooperation, a business-supported bias has enforced use of combustibles as the primary form of energy for transportation, heating and to a large degree, electrical generation as well. When oil prices rose far enough to cause the public to gripe, the government would step in, providing rebates and subsidies – out of the taxpayers’ own money of course.

On this archaic technology we have built an entire system of infrastructure and interconnected business that resists change. In addition to this obvious publicly-known bulwark in favour of the oil industry, there was an undeclared "North American Energy Policy" in effect. To nip in the bud any technologies that might reduce its dominance, certain highly-placed individuals would intervene to ridicule the inventions, and to block even proof-of-concept experiments. (Ref. 1)

In a process underway for decades in secret, and more recently coming to the brink of emergence, the three nations currently occupying the continent of North America are to be merged economically, and, to a greater extent than any of their respective populations yet realize, politically. This is known as the Security and Prosperity Partnership (SPP). On March 23 in 2005, the SPP agreement was signed formally by the three government leaders of Canada, Mexico, and the United States. (Ref. 2)


Political Tectonic Plates Shifting

Whether it is “only” a new layer of government that will be overlaid on top of existing ones, or whether the unified administration will ultimately replace the existing three governments in Ottawa, Washington, and Mexico City, the SPP represents a violent shakeup of the ground we thought we had under our feet. A tsunami of daily-life consequences will flood over everyone as well, as all areas of financial and social law are to be “harmonized” to make it easier for business. To those setting up this continental administration, borders are simply a hindrance to commerce. Modeled on the European Economic Community (EEC), the North American Union (NAU) seeks to minimize and ultimately to eliminate such inconveniences.

Because elected officials participate along with the CEOs of oil businesses in the working groups and councils which are finalizing the details, the official stance is that the push toward this union is a “democratic” one. All that is missing from their apparent working definition of that word is a mandate from the electorates of the three countries. Many Canadians voting in the January 2006 election were led to believe, based on the campaign slogans of Steven Harper, that they were voting for a nationalist leader. He claimed he would “stand up for Canada” – all the while clearly planning to do the opposite.

Under working groups and the “North American Competitiveness Council” (NACC), a single administration for the continent is already being set up, with ministries and secretariats of its own. It is not yet publicly known exactly what form this will take, but the political and social traditions of each country are on the table -- or maybe the chopping block. The plans are to be completed by the end of 2006. Within one to four years, residents of all parts of North America will be facing a monolithic administration – most likely without any of our original constitutions, and possibly without our familiar political party setups and legal systems.

This is not a wild conspiracy theory, nor is what little has been published based on guesswork. The union of North America is the official policy of the U.S. government. (Ref. 3)


Government Secrecy: U.S. Administration’s Misinformation

The U.S. government describes this incoming merger in neutral, non-threatening terms as a co-operative partnership (ref. 4), but many observers are suspicious that it involves a tighter union than what has been described in official communiqués. The SPP actually establishes a "totally new state corporate rule over the entire North American Continent." (Ref. 5)

With great effort, some individual Americans have ferreted out the background and ramifications of the agreement, comparing public announcements with what is actually happening in Congress and in verifiable news reports. These individuals accuse the government of covering up a traitorous agenda to eliminate the constitution and the nation itself. The government's own myth-debunking website (ref. 6) alleges that no agreement was ever signed.

In refutation of that official misdirection, Tom DeWeese’s (ref. 7) article about the cover-up lists news reports of Bush, Fox and Martin in fact signing the SPP agreement in 2005 in Waco, Texas. And on March 31, 2006, a second agreement was signed in Cancun by Bush, Vicente Fox and Steven Harper, the new Prime Minister of Canada. The politicians’ photo-op and signing were a formality; the real negotiations had been ongoing among high-level government and industry representatives in the preceding years. Only a brief summary of the agreement was announced, stating six priorities to ensure that the union would be in place by the end of this year. Notably, the agreement calls for "collaboration" amongst business executives and governmental agencies for “energy security" as a continental policy exercise.
DeWeese lists more examples of how the government's official statements are contradicted by the facts. For example, to counter the claim that the SPP "won’t change our court system or legislative process and that it respects the sovereignty of each nation," DeWeese outlines the total lack of Congressional oversight as indicating that the SPP is not respecting the existing system.

If the existing system were being respected, why would the planning and implementation be so secretive, and government statements not supported by facts? And if it’s for our benefit, why aren’t politicians, who love to show how much they are achieving for their constituents, promoting it in glowing terms?
DeWeese concludes, "The United States is the most unique nation on earth. We were created out of a radical idea that free people, with their freedoms protected by the government would be happy and prosper beyond imagination. The idea worked. Now, the Bush Administration is ignoring this historic fact to “harmonize” us with Canada and especially Mexico, which is not a free country; has no [right of] property and has just proved its unworthiness of conducting free and fair elections. At risk are our culture, our wealth, and the once proud American way of life."

In short, the same lack of honesty which Al Gore ascribed to both Democrats and Republicans in not telling the public enough about energy policy (Ref. 8: speech text) has also been at work to hide the nature and effects this trilateral negotiation that is bringing the NAU into effect. The public in three countries are not being told enough about the process (in as many languages) to know whether to take action against it, and if so, of what kind.


American Media: Very Few Voices Raised

On June 21st, 2006, viewers of CNN’s Lou Dobbs’ program, would have heard this chilling announcement: "President Bush signed a formal agreement that will end the United States as we know it, and he took the step without approval from either the U.S. Congress or the people of the United States." (Ref. 9) Given that statement’s tone of doom, it’s not hard to see why the government’s website is issuing soothing denials.

This is quoted in “Creating the North American Union” by Dennis Behreandt, which appears on The New American website as well as in its current issue of the Magazine.

On the invited list of participants at a secret planning conference in Banff, Alberta, September 12-14, 2006, was one Mary Anastasia O’Grady, described as a “Journalist for Wall Street Journal (Area Specialist)”. (Ref. 10: list of attendees) Apparently the business-oriented readers of that publication may be treated to some future reports that might reflect tips obtained as inside knowledge. But this doesn’t amount to disclosure of the NAU agenda in any broad sense. We may see some Wall Street insiders being touted for their very astute market “predictions” about what is going to happen with resource stock prices, but they will not be discussing the politics of union or its social implications, other than the usual talk of how borders and “protectionist” laws get in the way of business.

No other journalists were present either inside that meeting or outside the hotel making observations at a distance, or at any other of the meetings since the SPP signing was announced at the press conference in March. The silence from the media is deafening.

Despite having an overtly and publicly pro-NAU website, the spokesman of the North American Forum which sponsored the event, John Larson, excused the secrecy on the grounds that because attendees were promised privacy, reporters could not be told about the conference. And for the same reason he refused to confirm who had attended, let alone what they discussed in secret. (Ref. 11)

The strongly right-wing John Birch Society, which continues to sound alarm bells, regards supporters of the NAU as communists and enemies of freedom. They might be surprised to find that their allies in Canada who also strongly oppose the continental union are doing so because they see it as too right-wing due to its avowed purpose of terminating Canadian social programs such as universal Medicare. It’s the far-right-wing Conservative Party of Canada (CPC), currently in power, which is promoting the NAU. Its officials who attended the conference are toeing the secrecy line; and its leader co-signed the May 2006 agreement.

This “strange-bedfellows” aspect of the issue puts the usual left vs. right dichotomy into perspective. The old concepts are nearly irrelevant when it comes to whether people support the continental amalgamation or not. It’s all about concentrating power over larger and larger areas into fewer and fewer hands, and theories from all parts of the left/right spectrum are advanced both to justify and to attack the monster country that is being created. We need new language to discuss this, and on a different level.

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