Cronyism, Corruption and the 'War on Terror'

The partisan furor surrounding the collapse of solar equipment manufacturer Solyndra, a Fremont, Calif. firm which secured a $535 million government loan from the Energy Department, underscores congressional hypocrisy when it comes to widespread cronyism and corruption.

The Washington Post reported that "The Obama White House tried to rush federal reviewers for a decision on a nearly half-billion-dollar loan to the solar-panel manufacturer Solyndra so Vice President Biden could announce the approval at a September 2009 groundbreaking for the company's factory, newly obtained e-mails show."

According to Post stenographers Joe Stephens and Carol D. Leonnig, those "August 2009 e-mails released exclusively to The Washington Post," shorthand for a controlled leak by Republican staffers, "show White House officials repeatedly asking OMB reviewers when they would be able to decide on the federal loan and noting a looming press event at which they planned to announce the deal."

In response to White House pressure, "OMB officials expressed concern that they were being rushed to approve the company's project without adequate time to assess the risk to taxpayers, according to information provided by Republican congressional investigators."

Solyndra, a poster-child for the administration's PR campaign to expand "green jobs" was part of Obama's lifeless "stimulus package" which White House flacks argued would ameliorate unemployment through tax cuts and other perks to corporations in the wake of the on-going economic meltdown.

"It was alarming," Frank Rusco, a program director at the Government Accountability Office, told The New York Times.

GAO auditors found "Energy Department preliminary loan approvals--including the one for Solyndra--were granted at times before officials had completed mandatory evaluations of the financial and engineering viability of the projects."

"They can't really evaluate the risks without following the rules," Rusco said.

But in Washington, the well-connected follow their own rules so it was hardly surprising that Solyndra executives hired Washington lobbyists in early 2009, retaining McBee Strategic Consulting.

"Five lobbyists employed by the McBee group eventually worked on Solyndra's behalf," the Times disclosed, "including Michael Sheehy, a former top aide to Representative Nancy Pelosi of California, the House Democratic leader. Solyndra has paid McBee Consulting $340,000 since 2009."

However, despite intense pressure to approve the loan the firm's business model in the highly-competitive solar energy market was flawed from the get-go.

Although the unique design of their solar panels may not have relied on silicon, and executives assumed their "competitors would continue to pay a relatively high price for silicon, allowing Solyndra to charge the premium required to turn a profit," industry experts "outside the federal government, going back to 2008, were predicting silicon prices were headed for a steep fall."

Between 2008 and 2009 when the loan was approved, sinking demand for solar energy as a result of the economic crisis, drove down the price of silicon from more than a $1000 a pound to less than $100 in the twinkling of an eye.

Despite high-profile investors, loan guarantees, a new factory, and frankly a better made, more efficient product, Solyndra was forced to sell its panels well-below production costs, seriously wounding the company.

Taxpayers and laid-off workers were left holding the bag.

Factor in the collapse of the commercial and home real estate markets, the dearth of new factory construction, and allegations of "unfair-trade complaints against China for out-sized subsidies to its clean-energy companies," Bloomberg News averred, and the entire renewable-energy sector was in deep trouble.

"China provided $30 billion in credit to its biggest solar manufacturers last year, about 20 times the U.S. effort, Jonathan Silver, executive director of the Energy Department's loan program, told a congressional panel Sept. 14," Bloomberg reported.

The former socialist republic, which learned a lesson or two from other Asian "tigers" and the United States for that matter when it came to development, "frequently provides both zero-cost financing, occasionally free land and other kinds of incentives and subsidies" to its wind and solar companies, Silver told Congress.

The problem is not that the Chinese state subsidizes manufacturing but that the United States refuses to do so. Witness the near hysteria by rightist troglodytes over modest efforts by the federal government to construct a network of high-speed bullet trains across the United States.

Grifters in Congress, academia and the business press however, in thrall to Reaganite fantasies of "free trade" and "free markets" are willfully blind to the historical role played by the American state, and it was hardly an "invisible" one, in directing national priorities and resources during the period of rapid industrialization.

As readers are well aware, Antifascist Calling does not carry water for the Obama administration, a government as duplicitous as the previous Bush regime. However, there is more than a hint of a manufactured scandal by congressional Republicans over the Solyndra affair. While political blood sport may titillate Washington pundits, something far more sinister than a questionable loan is going on here.

In fact, the targets of the Republican attack machine are two-fold: discredit any government efforts to boost the industrial sector while disparaging renewable energy entirely as a potential, albeit weak threat, to the multinational energy conglomerates who provided 77% of their $18.8 million in campaign contributions to the GOP, according to OpenSecrets.org.

Contrast congressional market fundamentalist zeal here with their deafening silence when it comes to the heavily-subsidized U.S. "defense" industry, where mammoth cost overruns and mega-profits for the Military-Industrial Complex are factored in to the acquisition of weapons systems which have cost the American people trillions of dollars in investments elsewhere.

Deepening Crisis

That Solyndra went belly-up and filed for bankruptcy protection last month, laying off nearly 1,100 workers, is another sign that the global crisis which eviscerated productive sectors of the economy, continues to have disastrous effects for the vast majority of Americans.

As the World Socialist Web Site reported, "census bureau figures that came out Tuesday, showing the largest number of Americans living in poverty since records began in 1959, are a damning indictment of American capitalism and the entire political system."

The manufacturing sector, long the staple of a healthy economy, has undergone a major transformation since the 1970s. As U.S. firms, challenged by stiff competition from their capitalist rivals, sought to lower costs and increase shrinking profit margins, jobs were offloaded to low-wage platforms.

Yankee corporations however, that fled offshore to hide their assets and dodge taxes in so-called "free trade" and other "special" industrial zones where high productivity and low labor costs were guaranteed by repressive, U.S.-allied comprador regimes, made out like proverbial bandits.

As a result, entire industries withered and died, and large swathes of America's industrial heartland were transformed into economic dead zones.

Those corporatist chickens, demented stepchildren of neoliberal globalization, have now come home to roost.

"In 2010 there were 46.2 million people--almost one out of every six residents--living below the official poverty line, including 16.4 million children," socialist critic Jerry White wrote. "Of these nearly half, or 20 million, were described as living in deep poverty, subsisting on less than half the income the US government says is needed for basic food, shelter, clothing and utilities."

Contrast deepening levels of poverty with administration moves to secure a "settlement" with financial elites who profited on both ends of the 2007-2008 crisis. Their reckless, and fraudulent, credit default swaps and brisk trade in worthless mortgage-backed securities have cost American taxpayers trillions of dollars with no end in sight.

But as New York Federal Reserve board member Kathryn Wylde told The New York Times, "Wall Street is our Main Street--love 'em or hate 'em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible."

As the World Socialist Web Site noted, "In the name of the free market, they slashed taxes on the corporations and the rich, deregulated industry and the banks and backed a corporate offensive against the jobs and living standards of the working class."

And despite the fact that "corporations and the banks are now sitting on a cash hoard of $2 trillion," said economic gangsters are "refusing to hire any workers," thus exacerbating the crisis for average workers through unemployment, wage deflation and the loss of basic social benefits while boosting profits.

In his latest iteration as a "fighter" for "ordinary Americans," Obama's budget director told The New York Times that the president's new "deficit-reduction plan" would impose "a lot of pain," cutting some $320 billion from Medicare and Medicaid.

That proposal would impose higher premiums and deductibles for beneficiaries while slashing payments to "teaching hospitals and rural hospitals" as well as charging "co-payments to frail homebound older people who receive home health services," the Times reported.

Under the plan the federal government would also "reduce the growth of federal payments to states for treating low-income people under Medicaid," effectively telling older citizens and the poor, "hurry-up and die," the mantra of "libertarian" Tea Party loons who view the lack of affordable health care as "the price of freedom."

Meanwhile, Obama's Air Force Secretary Michael Donley "signaled the service is ready for a fight and vowed to 'protect' most big-ticket hardware programs from steep budget cuts," including the cost-overrun-plagued F-35 fighter program, The Hill reported.

As well, Donley "placed the multibillion-dollar effort to develop a new bomber aircraft on his don't-cut list" saying, "developing the 'long-range strike family of systems,' including the new bomber, is essential."

According to the Secretary, accepting cosmetic reductions in the bloated "defense" budget will mean "we will need to accept greater risk," if by "risk" Donley means shaving a penny or two off the share price of the largest defense corps.

Grifter's Ball

The Troubled Assets Relief Program (TARP) enacted by the Bush regime in 2008, and supported by then-candidate Obama and the Democrats, followed by 2009's American Recovery and Reinvestment Act, the so-called "stimulus package," were rushed through Congress under crisis conditions allegedly to "save the economy."

In practice however, both legislative edicts were fantastic boondoggles that rewarded "too-big-to-fail" investment banks that brought on the crisis in the first place while shortchanging foreclosed homeowners and tens of millions of laid-off workers.

A so-called "stimulus" that disavowed any direct creation of jobs by government action, such as massive spending on public works and infrastructure repair as was done during the Great Depression, was doomed to fail.

This failure is borne out by an official unemployment rate of 9.1% with some 14 million people looking for work. However, the government's broader, and more accurate index of the jobs crisis, which measures those who either stopped looking for work or are involuntary part-time workers rose to 16.2% in August, a staggering 25.3 million people.

As economist Michael Hudson observed: "From the outset in 2009, the Obama Plan has been to re-inflate the Bubble Economy by providing yet more credit (that is, debt) to bid housing and commercial real estate prices back up to pre-crash levels, not to bring debts down to the economy's ability to pay. The result is debt deflation for the economy at large and rising unemployment--but enrichment of the wealthiest 1% of the population as economies have become even more financialized."

How has this played out in the real world?

Marxist economist Richard Wolff wrote scant weeks before Solyndra's collapse: "As demand for goods and services shrank fast, businesses and the rich stopped investing in production. Their investible funds were idled, and that only aggravated the crisis. The self-regulating, efficient capitalist market system proved to be the myth its critics had mocked. However, the market system did spread the US crisis quickly to Europe and beyond."

"The bailout of casino capitalists vested a new ruling class with $13 trillion of public IOUs (including the $5.3 trillion rescue of Fannie Mae and Freddie Mac) added to the national debt," Hudson noted. "The recipients have paid out much of this gift in salaries and bonuses, and to 'make themselves whole' on their bad risks in default to pay off."

"An alternative," Hudson wrote, "would have been to prosecute them and recover what they had paid themselves as commissions for loading the economy with debt."

The result of these reckless policies are plain as day: from rising unemployment to collapsing infrastructure, and from a steady rise in home foreclosures to increased levels of immiseration, Bush-Obama policies have benefited those who wield real power in the capitalist world: the financial oligarchs and militarists who prospered from the bailouts and "War on Terror" military spending.

But the "government could have used its equity ownership and control of the banks to provide credit and credit card services as the 'public option'," Hudson noted. In other words, rather than bailing-out the fraudsters, the state could have invested public funds in programs that actually benefit the public, a novel idea rejected out of hand as "socialist tinkering."

However, Hudson averred, "this is not the agenda that the Bush-Obama administrations chose. Only Wall Street had a plan in place to unwrap when the crisis opportunity erupted."

"Stockholders were bailed out, counterparties were saved from loss, and managers today are paying themselves bonuses as usual," Hudson wrote. "The 'crisis' was turned into an opportunity to panic politicians into helping their Wall Street patrons."

But the bailouts did far more than merely enrich the thieves, it actually exacerbated the global meltdown.

"As the crisis flared in 2008," Wolff observed, "governments unfroze credit markets by pouring money into tottering banks and insurance companies. Governments printed and created new money to pay for part of these policies; to cover the other part governments borrowed."

And whom, pray tell, were the American people's new creditors? Why "the banks and insurance companies they had bailed out" of course! "Governments," Wolff wrote, "also borrowed from the companies and rich individuals who had withheld investing in the production of goods and services and had thereby worsened the crisis."

Is this a great system, or what!

Ponzi Republic

Not a single top executive of any Wall Street firm has been prosecuted by the federal government for their crimes. Take Goldman Sachs as a prime example, a firm which journalist Matt Taibbi memorably described as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

As McClatchy News investigative reporter Greg Gordon revealed, on the cusp of the housing bubble's collapse, "Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting."

Those fraudulent deals "enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies."

"Only later," Gordon wrote, "did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk" and that "pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses."

Taibbi recounted last spring for Rolling Stone that the Senate Subcommittee on Investigations mammoth 650-page report, Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, supplied "a panoramic portrait of a bubble era that produced the most destructive crime spree in our history--'a million fraud cases a year' is how one former regulator puts it."

"But the mountain of evidence," Taibbi wrote, "collected against Goldman by [Senator Carl] Levin's small, 15-desk office of investigators--details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department--stands as the most important symbol of Wall Street's aristocratic impunity and prosecutorial immunity produced since the crash of 2008."

Contrast Justice Department inaction regarding Goldman Sachs, including ignoring potential perjury by Goldman's CEO Lloyd Blankfein as Taibbi and other investigators revealed, with their zeal to lower the boom on Solyndra.

In connection with the company's Chapter 11 bankruptcy filing, the FBI "executed a search warrant" on the firm September 8, the Los Angeles Times reported, "but declined to discuss what they were investigating. FBI spokesman Peter D. Lee said documents related to the search had been sealed."

This is the same secret state agency that is curiously indifferent to far-larger grifts run by the big money boys. Keep in mind, this is the Justice Department satrapy waging covert war against the antiwar movement, illegally spying on Muslim-Americans, ginning-up phony "terror" plots through their employment of paid informants and provocateurs while allowing real terrorists, such as the network which assisted the 9/11 plotters as The Miami Herald recently disclosed, run wild in Florida. Yes, that FBI!

"Republicans," the Los Angeles Times observed, "have seized on Solyndra's downfall as a sign that President Obama's stimulus and 'green jobs' campaign were failures."

"They have also noted that key Obama backer George Kaiser was a major investor in Solyndra, the first company to receive a Department of Energy loan guarantee to boost alternative energy companies." But then again, so was Madrone Capitol, a private equity fund affiliated with the powerfully-connected Walton family of Wal-Mart fame, long-time GOP supporters.

Kaiser, a Tulsa, Okla. billionaire and head of The George Kaiser Family Foundation, "holds about 35.7 percent of Solyndra, according to a company filing with the Securities and Exchange Commission. Kaiser made 16 visits to the president's aides since 2009, according to White House visitor logs," Bloomberg News reported.

A "bundler" for Obama's 2008 presidential bid, Kaiser raised somewhere between $50,000 to $100,000 for the campaign and contributed some $2,300 personally, according to the Federal Election Commission. What Bloomberg fails to report however, is the more than $7.5 million in campaign contributions made over the last decade by the Walton family to the Republican party and assorted right-wing causes.

While evidence of irregularities may suggest that Solyndra executives were less than forthcoming in their application for federal loans, and that well-connected billionaire donors to the president's campaign may have helped tip the scales in their favor, their behavior, and potential losses to taxpayers, pale in comparison to the far larger, and more damaging, crimes of Wall Street con artists who continue to thumb their noses at the public and evade justice.

Crony Capitalism Gone Wild: The 'War on Terror'

While Republican bag men for the superrich point to the Solyndra scandal, and there is something fishy going on here, as evidence of corruption in the White House, the fact is, Obama, like every president who occupied the Oval Office before him, is a wholly-owned creature of the ruling class.

Never mind that Team Obama recently abandoned plans to beef-up national air quality rules to reduce the emission of cancer-causing chemicals in smog. That move followed an intense lobbying campaign by polluters in the chemical, mining and petroleum sectors and their bipartisan congressional pets who alleged that the $90 billion price tag would "kill American jobs." Or that the "environmental president," in a course reversal sure to have oil industry executives jumping for joy, will soon approve plans to build the Keystone XL pipeline that will carry mega-polluting Canadian tar sands oil to Gulf Coast refineries.

And never mind that the White House, the Republican-controlled House and the Democratic-controlled Senate are conspiring against the American people to gut Social Security, Medicare and Medicaid through a congressional Supercommittee whilst continuing to bailout financial jackals to the tune of some $13 trillion, even as the Securities and Exchange Commission blithely shredded thousands of incriminating documents that let the gangsters off the hook as Rolling Stone revealed in August.

And of course, pay no attention to the expansion of the imperialist Empire's endless wars and occupations, its extension of outsourced "War on Terror" CIA torture programs into Somalia, or that the Obama administration, as The Washington Post recently reported "is assembling a constellation of secret drone bases for counterterrorism operations in the Horn of Africa and the Arabian Peninsula," the on-going assault on civil liberties here in the heimat or mounting evidence that the provocateurs who murdered nearly 3,000 people on 9/11 may have been given a leg up by U.S. secret state agencies as they prepared to slam hijacked passenger airliners into buildings.

What partisan hacks in both corporatist political parties will never acknowledge, let alone investigate or prosecute, are orders of magnitude greater, "War on Terror" boondoggles. Two examples:

• The National Security Agency's multibillion dollar fiasco, Trailblazer. As The Baltimore Sun revealed, the firm that NSA chose to head the project, Science Applications International Corporation, "forged close ties to several key defense and intelligence agencies, including the NSA. Among those who have served on SAIC's board of directors are former NSA Director Bobby Ray Inman; former CIA Directors John M. Deutch and Robert M. Gates; and former Defense Secretaries Melvin R. Laird and William J. Perry." As investigative journalist Tim Shorrock pointed out for CorpWatch, "SAIC is deeply involved in the operations of all the major collection agencies, particularly the NSA, NGA and CIA. SAIC, for example, managed one of the NSA's largest efforts in recent years, the $3 billion Project Trailblazer, which attempted (and failed) to create actionable intelligence from the cacophony of telephone calls, fax messages, and emails that the NSA picks up every day. Launched in 2001, Trailblazer experienced hundreds of millions of dollars in cost overruns and NSA cancelled it in 2005." Indeed, the Sun's exposure of SAIC's shoddy work on the project, as journalist Jane Mayer disclosed in The New Yorker, led Obama's Justice Department to prosecute whistleblower Thomas Drake, not those responsible for ripping off taxpayers or standing-up illegal driftnet spying programs. Congressional action? Zero, but SAIC walked away with the money and continues to be rewarded by the secret state and now ranks No. 6 on Washington Technology's "Top 100" list of largest government contractors with some $5.1 billion in Defense Department contracts.

• The Department of Homeland Security's Secure Borders Initiative or SBInet, a failed project to construct a "virtual electronic fence" along the border with Mexico. When DHS finally pulled the plug earlier this year, SBInet's lead contractor, Boeing Corporation, held contracts valued between $2 and $8 billion according to estimates by the Government Accountability Office. Boeing is a major "War on Terror" beneficiary, clocking-in at No. 3 on Washington Technology's "Top 100" list, with some $8.4 billion in revenue largely from the Defense Department. As the CIA's torture flight "booking agent," Boeing subsidiary Jeppesen Dataplan, Inc. profited handsomely from illegal Agency programs that secretly kidnapped and transferred "terrorist" suspects to foreign prisons and CIA "black sites." Victims who tried to litigate their claims against Jeppesen in the federal courts were rebuffed by Obama's Justice Department which asserted bogus "state secrets privilege" claims, alleging that litigating cases involving CIA kidnapping and torture would endanger "national security." In 2008, the GAO determined that there were "significant problems" with deployed technologies. Designed to detect a "target" with radar and then use video cameras to locate illegal entries, GAO investigators found that the radars were "too slow" and were often triggered by rain and "other weather phenomena." Information derived from sensors were to be forwarded to "command centers" where a "common operating picture" would be compiled by Customs and Border Patrol analysts and shared with other agencies. The so-called "common operating picture" would appear on computer screens as a geospatial map where "border entries" could be tracked in "real time." Despite congressional criticism, DHS Secretary Janet Napolitano said in January 2011, that the agency would be redirecting funding originally intended for SBInet "to a new border security technology effort." At the time of this writing, Boeing gets to keep the boodle already doled out and will soon rake-in even more. Last month, Defense Systems reported that Boeing's Phantom Ray, a jet-powered drone that can cruise at more than 600 miles per hour at 40,000 feet, is in the running to secure multibillion contracts for the Pentagon's next generation fleet of killer robots. "Key to its intended role," Defense Systems informed us, "the Phantom Ray can carry up to 4,500 pounds of ordinance, extra fuel and/or sensors in its payload bays. The bays are large enough to accommodate two 2,000 pound Joint Direct Attack Munition satellite guided bombs." There's no word yet from the Phantom Ray's intended targets--Somali herders and Afghan and Pakistani villagers--what they might think about Boeing's latest technological marvel.

What lessons can we learn from the examples cited above? Not many, if we rely on corporate media.

As part of capitalism's manufactured "debt crisis," the Associated Press reported that the Aerospace Industries Association (AIA), a Washington, D.C. lobby shop which represents America's Military-Industrial-Security Complex, claimed that cuts to the bloated "defense" budget "would have a devastating impact on a defense industry."

To meet the challenge, AIA has launched their "Second to None" campaign and a related web site. According to industry flacks, which include usual suspects BAE Systems, Boeing, General Dynamics, L-3 Communications, Lockheed Martin, Northrop Grumman, Raytheon and dozens more, "American leadership in aerospace and defense is being threatened by forces in Congress and the administration. The security of our troops, our technological future and our economic stability are all at risk. We must preserve jobs across the nation that keep our nation strong. Join us and act now before it is too late."

Though there's little chance AIA's dire predictions will come to pass, alarmism sells particularly when the target audience are members of Congress.

As the bipartisan congressional Supercommittee prepares to gut the social safety net while leaving imperialism's war budget virtually untouched, an investigation by Alternet and Salon revealed that "when it comes to the military budget," Democrats "have received far more money from Pentagon contractors than [Arizona Senator Jon] Kyl or any of their Republican colleagues on the panel."

"Since 2007," investigative journalist Nick Turse wrote, "Democrats on the supercommittee have received more than $1 million in defense industry donations, while contributions to the Republicans added up to only $321,000."

Indeed, "panel co-chair Sen. Patty Murray ... has received more defense industry dollars over that period than the combined total of the top four Republican recipients on the supercommittee. Even so, her haul from the Pentagon's weapons-makers isn't the largest by a panel Democrat, a distinction held by her colleague from South Carolina, James Clyburn."

"An analysis of official government data paints a disturbing picture of big money, cozy relationships and potential influence that, alongside a concerted lobbying effort by the Pentagon and its powerful defense contractors, makes substantial reductions to the Department of Defense's budget improbable and steeper cuts to entitlement programs, like Medicare and Medicaid, more likely."

"Before Thanksgiving," Turse notes, "Clyburn and his supercommittee colleagues will be forced to make a clear decision for cuts to programs like Medicare and Medicaid or the type of budgets that have resulted in nearly $8 trillion in national security spending since 2001."

Any bets on which way the axe will fall?

By the way, what was that $500 million loan flap to Solyndra about?

Secret Diplomatic Cables Reveal Microsoft's 'Win-Win' Deal with Tunisian Police State

Following revelations by Bloomberg Markets Magazine that a spun-off intelligence unit of German electronics giant Siemens, Trovicor, a wholly-owned subsidiary of Perusa Partners Fund 1 LP, a shadowy investment firm headquartered in Guernsey, had sold surveillance gear to Bahrain deployed against the pro-democracy movement, it has since emerged that Microsoft established an IT training program for Ministry of Justice and Interior officials in Tunisia.

A secret State Department cable published by the whistleblowing web site WikiLeaks, 06TUNIS2424, "Microsoft Inks Agreement with GOT," 22 September 2006, noted that "during the Microsoft Government Leaders Forum in South Africa July 11-12, the GOT and the Microsoft Corporation signed a partnership agreement that provides for Microsoft investment in training, research, and development, but also commits the GOT to using licensed Microsoft software."

The export of high-tech products, included software suites employed for spying on political dissidents, are said to be closely regulated under U.S. law to prevent abuse by repressive governments.

However, as Amnesty International disclosed nearly a decade ago, "There are almost no legal or regulatory requirements amongst the G8 states for the inclusion of international human rights or humanitarian law content in the various military, security, and police force training services that they provide to states in all world regions."

According to investigators, "Even where human rights criteria are referred to in laws governing arms export and foreign military and security aid, they are often loosely interpreted."

"Instead," analysts averred, "it is short term profit making and political advantage that guide the bulk of the international arms trade," and as noted above in the Bahraini example, the transfer of dual-use surveillance kit figured prominently in the suppression of of pro-democracy protests. (emphasis added)

Not much has changed since 2003 when that report was issued. Indeed, sweetheart deals which hand over source code in exclusive arrangements with human rights abusers are the norm, not the exception, especially where it concerns America's "War on Terror" allies.

• • •

In January, during the opening round of the Arab Spring, a pro-democracy uprising by Tunisian citizens overturned the U.S.-allied dictatorship of President Zine El-Abidine Ben Ali who was forced to flee to Saudi Arabia.

With high unemployment, staggering state corruption, repression and police violence, the long-simmering revolt was kick-started when an unemployed university graduate, Mohammed Bouazizi, an itinerant vegetable seller, set himself on fire in front of a government office to protest the confiscation of his stock by local police. Bouazizi died January 4. Authorities later claimed he did not have a "permit" to sell vegetables.

Initially caught off guard by events, the U.S. government had been fully apprised of this state of affairs by diplomats. A 17 July 2009 cable, 09TUNIS492, "Troubled Tunisia: What Should We Do?," informed us that "many Tunisians are frustrated by the lack of political freedom and angered by First Family corruption, high unemployment and regional inequities."

An autocratic though nominally "secular" regime, "the GOT brooks no advice or criticism, whether domestic or international. Instead, it seeks to impose ever greater control, often using the police."

"Despite Tunisia's economic and social progress," the State Department cheekily observed, "its record on political freedoms is poor. Tunisia is a police state, with little freedom of expression or association, and serious human rights problems."

A "police state" tailor made for CIA "War on Terror" operations.

As Amnesty International pointed out in 2008, "Abdellah al-Hajji and Lotfi Lagha, two of 12 Tunisians held by the US authorities in Guant獺namo Bay, were returned to Tunisia in June. They were arrested on arrival and detained at the State Security Department of the Interior Ministry, where they alleged they were ill-treated and forced to sign statements" claiming they belonged to a "terrorist organization."

Al-Hajji told human rights' investigators that "he was deprived of sleep, slapped in the face and threatened that his wife and daughters would be raped." This of course, is standard operating procedure for close U.S. allies.

While claiming the Tunisian government "can point to some progress ... for every step forward there has been another back, for example the recent takeover of important private media outlets by individuals close to President Ben Ali."

Despite misgivings, the Obama administration, like the Bush government before it, recommended "a more pragmatic approach ... whereby we would speak to the Tunisians very clearly and at a very high level about our concerns regarding Tunisia's democracy and human rights practices, but dial back the public criticism."

Noting the set-up in Tunis and the dim prospects for democratic transformation, "of greatest interest to the GOT would be increased engagement on economic issues, i.e., on increasing bilateral trade and investment, as well as the provision of technical assistance, especially involving technology transfer."

Bingo! Nothing like advancing U.S. interests by fattening the bottom line of American corporations eager to sell high-tech spy gear, and provide the requisite training to spooks--just as they do here in the heimat.

And if said U.S. corps, like their European counterparts (can you say BAE) need to sweeten the deal with generous dollops of cash to officials from special, i.e., untraceable accounts on Gibraltar, Latvia or Malta, well, there's an app for that too!

A 06 June 2008 cable, 08TUNIS679, "Corruption in Tunisia: What's Yours Is Mine," informed us: "According to Transparency International's annual survey and Embassy contacts' observations, corruption in Tunisia is getting worse. Whether it's cash, services, land, property, or yes, even your yacht, President Ben Ali's family is rumored to covet it and reportedly gets what it wants. Beyond the stories of the First Family's shady dealings, Tunisians report encountering low-level corruption as well in interactions with the police, customs, and a variety of government ministries."

Continuing, the secret cable averred that "President Ben Ali's extended family is often cited as the nexus of Tunisian corruption." As with other close U.S. regional allies, including rulers of the former president's new "home," Saudi Arabia, the Ben Ali entourage was "often referred to as a quasi-mafia."

"An oblique mention of 'the Family' is enough to indicate which family you mean. Seemingly half of the Tunisian business community can claim a Ben Ali connection through marriage, and many of these relations are reported to have made the most of their lineage."

• • •

Apparently, so too did Microsoft; the 2006 cable noted that "the agreement is a win-win for Microsoft."

As part of the deal, "Microsoft will help the GOT to upgrade and modernize its computers and networking capabilities. In turn, the GOT agreed to purchase twelve thousand licenses to update government computers with official Microsoft software, rather than the pirated versions that have been commonly used, according to one Microsoft employee."

But the agreement did far more than "normalize" business relations between the Redmond, Washington software giant and the Tunisian government.

"The agreement also touches on internet security. Through a program on cyber criminality, Microsoft will train government officials in the Ministries of Justice and Interior on how to use computers and the internet to fight crime."

But as Bloomberg Markets Magazine revealed in their Bahrain investigation, overt references to "cyber criminality" more often than not mean delivering political dissidents straight into the clutches of state security thought police.

"As part of this program," the cable reads, "Microsoft will provide the GOT with original source codes for its programs."

"When asked by EconOff whether Microsoft had any concerns about releasing its source codes, [Microsoft Tunisia Director General Salwa] Smaoui replied that the source codes would only be available to a small number of officials."

Which ones? Why "Justice" and "Interior" ministry officials of course, securocrats charged with spying upon Tunisian citizens. Those deemed insufficiently "loyal" would face the grim prospect of detention and torture for having the temerity to cross swords with the country's "quasi-mafia."

• • •

Agreements such as those struck by Microsoft however, were neither "mistakes" nor a misguided strategy stitched together by an over-eager sales department. Rather, insider deals between giant corporations and authoritarian regimes are part and parcel of a business model which strives to increase all-important market share come hell or high water.

Examples abound. While Bloomberg Markets lifted the sheet on Siemens dirty deals with Bahrain, Narus (an Israeli firm founded by veterans of Israel's secretive signals intelligence Unit 8200, and later bought by Boeing), sold highly-intrusive deep packet inspection tools to the state-owned Telecom Egypt.

Back in January, Free Press Campaign Director Timothy Carr disclosed that when the Mubarak regime pulled the plug on internet and cell phone service earlier this year, Egypt's security services also had "the ability to spy on Internet and cell phone users, by opening their communication packets and reading their contents."

"Narus," Carr wrote, provided "Egypt Telecom with Deep Packet Inspection equipment (DPI), a content-filtering technology that allows network managers to inspect, track and target content from users of the Internet and mobile phones, as it passes through routers on the information superhighway."

As civil liberties watchdogs, researchers and whistleblowers revealed, Narus is the same shadowy firm that sold it's internet "Semantic Traffic Analyzer," the Narus STA 6400, to the National Security Agency.

AT&T whistleblower Mark Kline first revealed in documents he handed over to the Electronic Frontier Foundation (EFF), that Narus equipment was installed in "secret rooms" co-managed by AT&T and the NSA across the United States and powered illegal driftnet spying programs by both the Bush and Obama administrations.

As James Bamford pointed out in The Shadow Factory, "at the heart of the Intercept Suite is the NarusInsight computer, an enormously powerful machine capable of scanning the fastest transmission lines of the Internet, OC-192 cables that carry 10 gigabytes per second--10 billion bits of information per second."

"It can also carry," Bamford wrote, almost 130,000 simultaneous telephone conversations."

According to a sales pitch by the firm, "NarusInsight is the leading traffic intelligence system for capturing, analyzing and correlating IP traffic in real time."

"In all cases and for all solutions," we're told that "Narus employs a four-phase approach to traffic intelligence: 1. Monitor traffic from the network through the application layer. 2. Create actionable knowledge. 3. Analyze at macro or micro level. 4. Take informed action based on business and operational policies."

Indeed, "any number of links, at any speed, with any routing architecture, can be simultaneously monitored."

• • •

Undeterred by charges of widespread corruption and police violence, Cablegate file 10TUNIS104, "Tunisia: Communication Technologies Minister," penned 09 February 2010 by U.S. Ambassador Gordon Gray, tells us that "In a February 5 courtesy call by the Ambassador, Minister of Communication Technologies Mohamed Naceur Ammar explained the central role of information and communications technology (ICT) in Tunisia's development strategy."

"The Minister made a pitch," Gray averred, "for greater U.S. investment in Tunisia's ICT sector and was pleased to learn details of the imminent visit of a U.S. trade delegation to Tunisia that will include major U.S. ICT firm Motorola."

"Tunisia intends to become an ICT platform for the Mediterranean region by attracting investment, boosting education, and liberalizing the sector," Gray wrote. Critically, "Tunisia's investment code, he said, provides incentives to potential investors, while its education system is linked to a growing number of techno-parks that match research to market needs."

As readers are well aware, market "liberalization" is code for the sell-off of public assets, often at fire sale prices that enrich corrupt officials whilst gouging the public as prices for basic commodities, including telecommunication products, skyrocket.

"In response to the Ambassador's question on how the United States and Tunisia could deepen ICT cooperation, Ammar highlighted the need for business investment in Tunisia's ICT sector."

Gray replied "that in addition to the U.S. companies already active in the sector, including Microsoft, Cisco, HP, and IBM, a U.S. trade delegation scheduled for February 15 would include representatives from Motorola."

"On the internet," the Ambassador wrote, "his appointment was greeted with some irony among Tunisian dissident bloggers: 'Ammar' is the nickname, analogous to 'Big Brother,' long used by bloggers in referring the Government of Tunisia's wide-ranging internet censorship apparatus, headed by the Ministry of Communications Technologies."

Nonetheless, Ambassador Gray said that "university exchanges and training programs for Tunisian officials ... could fall under the 2004 U.S.-Tunisia Science and Technology Agreement."

Similar exchanges and training programs at the U.S. Army's School of the Americas (rebranded the Western Hemisphere Institute for Security Cooperation in 2001), led to widespread human rights abuses across Latin America.

As SOA Watch points out, amongst those targeted by graduates schooled in the dark arts of "military intelligence and interrogation tactics" are the usual suspects: "educators, union organizers, religious workers, student leaders, and others who work for the rights of the poor."

In the Middle East, the Federation of American Scientists (FAS) disclosed that the International Military Education and Training (IMET) and the Joint Combined Exercises and Training (JCET) programs "may be improving the ability of a government or army to repress its own civilian population."

Indeed, "training foreign militaries in lethal tactics in order to gain access to these countries, sometimes called buying influence, is presumably thought to be in the realm of 'national security interests'."

• • •

Today, such training entails the use of highly-intrusive technologies sold to repressive states by Western companies for the maintenance of the capitalist status quo, tasks eagerly sought by technology giants such as Microsoft.

Between 2000-2010, the Government Contracts Won web portal reported that Microsoft pulled down some 284 contracts worth a total of $230,656,233 from the Defense Department.

While small potatoes in comparison to Narus's parent company, Boeing Corporation's $8,400,115,000 in government contracts according to Washington Technology, the firm's commercial products figure prominently in National Security State depredations.

As CNET News reported earlier this month, "Microsoft's Windows Phone 7 software can transmit your location without your explicit permission."

"An analysis by Samy Kamkar says that the Camera application sends the device's location--complete with latitude and longitude, a unique ID, and nearby Wi-Fi access points--to Microsoft even when the user has not given the app permission to do so."

In July, CNET News disclosed that "Microsoft has collected the locations of millions of laptops, cell phones, and other Wi-Fi devices around the world and makes them available on the Web."

According to researchers, "the vast database available through Live.com publishes the precise geographical location, which can point to a street address and sometimes even a corner of a building, of Android phones, Apple devices, and other Wi-Fi enabled gadgets."

Moves by the secret state to compile geolocational directories of cell phone users, ready made databases perfect for hauling in political dissidents as was done in Bahrain, are not solely the province of repressive, Middle Eastern governments.

Is any wonder then, that Western high-tech firms do their part to "keep us safe" by throttling our privacy or fail to notice the screams of those victimized by the brutal efficiency of their products?

Torture Island: Where Offshore Meets the National Surveillance State

From shady Wall Street banks and investment firms that rob people blind, to Western governments that prattle on about "democracy" and "human rights" while their favorite butchers torture and kill their own citizens, it's a sick, sad world growing sicker and sadder by the hour.

It certainly can't hurt when the U.S. Fifth Fleet has the back of those doing the killing, or when the killers are pampered ne'er-do-wells, a fabulously wealthy clique of hereditary princes for whom the word "medieval" was invented, who just so happen to lord over one of the planet's financial bolt holes.

Last month, Bloomberg Markets Magazine revealed that when "Bahraini jailers armed with stiff rubber hoses" beat 39-year-old school administrator and human rights activist Abdul Ghani Al Khanjar in a windowless dungeon in Manama, his jailers were armed "with another kind of weapon: transcripts of his text messages and details from personal mobile phone conversations."

"It was amazing," Al Khanjar told investigative journalists Vernon Silver and Ben Elgin. "How did they know about these?"

The answer is simple: from computers loaded with spy kit sold to Bahraini royals "by Siemens AG (SIE), and maintained by Nokia Siemens Networks and NSN's divested unit, Trovicor GmbH, according to two people whose positions at the companies gave them direct knowledge of the installations."

Back in February, political floodgates opened across the Middle East as American-allied dictators were toppled by enraged citizens in Tunisia and Egypt, and threatened to do the same in Bahrain when pro-democracy demonstrators took to the streets across the island nation.

The Al Khalifa clan responded as royals are wont to do: with brute force and considerable help from U.S. and Saudi "friends." Scores were killed and many hundreds of others, including medical personnel, were seized and "disappeared" into regime black holes.

As The Guardian reported, while "Bahrain's security forces are the backbone of the Al Khalifa regime," in recent years "large numbers of their personnel are recruited from other countries, including Jordan, Pakistan and Yemen" and "are reviled as mercenaries by Bahrainis."

But what of the gaggle of Western firms who hit the "sweet spot" selling despotic potentates everything from high-tech spy gear to machine guns and lethal gases: will they be "reviled as mercenaries" by media in the "democratic" West?

'Institutionalized Corruption'

It's hardly surprising that one of Siemens offloaded intelligence units, Trovicor, did a brisk business with Bahrain's secret state. After all, considering the firm's dubious track record and a corporate culture where "bribery was just a line item" according to The New York Times, why wouldn't they?

More than two years ago when a spate of corruption prosecutions were settled, Siemens wound up paying some $1.6 billion to the U.S. government under provisions of the Foreign Corrupt Practices Act, "the largest fine for bribery in modern corporate history."

Former mid-level executive, Reinhard Siekaczek, told reporters Siri Schubert and T. Christian Miller that "he was one of several people who arranged a torrent of payments that eventually streamed to well-placed officials around the globe, from Vietnam to Venezuela and from Italy to Israel."

"What is striking about Mr. Siekaczek's and prosecutors' accounts of those dealings," the Times averred, "which flowed through a web of secret bank accounts and shadowy consultants, is how entrenched corruption had become at a sprawling, sophisticated corporation that externally embraced the nostrums of a transparent global marketplace built on legitimate transactions."

The former executive said that between "2002 to 2006 he oversaw an annual bribery budget of about $40 million to $50 million at Siemens. Company managers and sales staff used the slush fund to cozy up to corrupt government officials worldwide."

"Bribery was Siemens's business model," Uwe Dolata, the spokesman for the association of federal criminal investigators in Germany told the Times. "Siemens had institutionalized corruption."

Such lucrative inducements to officials were meant to maintain the firm's "competitive edge" overseas in the branch Siekaczek oversaw, "which sold telecommunications equipment."

High-tech accouterments which ended up in the hands of Abdul Ghani Al Khanjar's torturers.

Ahmed Aldoseri, the director of information and communications technologies at Bahrain's Telecommunications Regulatory Authority told Bloomberg Markets, "If they have a transcript of an SMS message, it's because the security organ was monitoring the user at their monitoring center."

Inquiring minds can't help but wonder: did black euros flowing through one of Siemens slush funds grease the palms of corrupt interior ministry officials and then quietly vanish into an offshore bank controlled by cronies of Bahrain's hereditary royals?

A Global Hidey-Hole

Faced with depleting oil and gas reserves, Bahrain's industrial base has expanded rapidly over the past two decades and includes petrochemical, aluminum, oil refining, ship repairing and light manufacturing; it's share of GDP from these sectors, compared to other members of the Gulf Cooperation Council (GCC), is the highest in the region.

However, "liberal" banking regulations, secrecy laws and a sophisticated telecommunications infrastructure have attracted major Asian and Western institutional investors and investment banks. Drawn by the country's reputation as a no tax zone for foreigners and a freewheeling "no questions asked" regulatory climate, Bahrain is a haven for hot money.

A secret embassy cable published by WikiLeaks, 06MANAMA2003, informs us that "Bahrain has one of the most diversified economies in the Gulf Cooperation Council (GCC)."

Accordingly, "Bahrain has promoted itself as an international financial center in the Gulf region. It hosts a mix of: 375 diverse financial institutions, including 187 banks, of which 51 are wholesale banks (formerly referred to as off-shore banks or OBUs); 39 investment banks; and 25 commercial banks, of which 17 are foreign-owned. There are 31 representative offices of international banks."

Situated in the heart of the Middle East where the global oil trade recycles regional wealth into liquidity for financial markets, Bahrain and the other Gulf monarchies as they diversify into offshore finance, intersect and capture enormous outflows of cash hemorrhaging out of Africa, Asia, Europe and the Americas, steering hot money into hidey-holes for those in the know. Therefore, mass mobilizations in favor of messy things like democracy would hardly inspire confidence in the global owning class.

Nicholas Shaxson, the author of Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens, tells us that offshore tax havens such as Bahrain's "are not exotic, murky sideshows at the fringes of the world economy: they lie at its centre. Half of world trade flows, at least on paper, through tax havens. Every multinational corporation uses them routinely. The biggest users of tax havens by far are not terrorists, spivs [black marketeers], celebrities or Mafiosi--but banks."

"Tax havens aren't just about tax," Shaxson writes. "They are about escape--escape from criminal laws, escape from creditors, escape from tax, escape from prudent financial regulation--above all, escape from democratic scrutiny and accountability. Tax havens get rich by taking fees for providing these escape routes. This is their core line of business. It is what they do."

"The vast network of Bahrain's banking system," the State Department informs us, "along with its geographical location in the Middle East as a transit point along the Gulf and into Southwest Asia, may attract money laundering activities. It is thought that the greatest risk of money laundering stems from questionable foreign proceeds that transit Bahrain."

And, like Siemens, which "had joined the international convention banning foreign bribery" in 1999, according to the State Department, "in 2001, the Government of Bahrain (GOB) enacted an anti-money laundering law that criminalizes the laundering of proceeds derived from any predicate offense."

Presumably that law, and a 2006 amendment which criminalized "the undeclared transfer of money across international borders for the purpose of money laundering or in support of terrorism," would also cover bribing state officials for purposes, let's say, of sweetening the pot for purchases of "telecommunications equipment," including surveillance suites targeting dissident Bahrainis.

Also in 2006, Bahrain implemented a Free Trade Agreement with the United States to go along with its status as a global offshore financial center. As a result, the organized workers' movement has been targeted by the government.

According to the Bahrain Center for Human Rights (BCHR), "authorities in Bahrain are stepping up repression of the country's trade union movement, with further suspensions and sackings of workers due to their actual or suspected participation in trade union and political actions earlier this year."

Since the pro-democracy uprising began, BCHR informs us that "some 2,600 workers" affiliated with the General Federation of Bahraini Trade Unions (GFBTU), "in both the public and private sector have been fired, with an additional 361 workers suspended. Despite numerous promises to the contrary, the government has largely failed to reinstate workers illegally dismissed."

It's a sure bet that the same surveillance gear used in wholesale raids against human rights' campaigners have also been trained upon Bahraini workers' organizations, proving once again that "free trade" means "freedom" to smash trade unions.

U.S. and Bahraini Intelligence: Thick as Thieves

Bahrain is home to the U.S. Fifth Fleet, the proverbial tip of imperialism's nautical spear responsible for naval operations in the Persian Gulf, the Red Sea, the Arabian Sea and the east coast of Africa as far south as Kenya.

And should the Obama administration, their Israeli pit bulls, or both, decide to up the ante with Iran, the Fifth Fleet would be called upon, as they were at the start of Bush's "shock and awe" campaign which destroyed Iraq, to launch air strikes and impose a naval blockade against that oil-rich nation.

Given Bahrain's strategic importance to Washington, and the regime's close links to the U.S. military and intelligence apparatus, Madame Clinton's expression of "deep concern" when security forces attacked unarmed protesters was the emptiest of gestures meant to divert the public's gaze from the criminal role played by the U.S. government during Bahrain's targeting of the pro-democracy movement.

This is borne out by secret embassy cables published by WikiLeaks. A December 2, 2009 communiqu矇 from the American Embassy in Manama to former CIA Director Leon Panetta and then-Director of National Intelligence Dennis Blair, 09MANAMA681, informs us that "Director of BNSA [Bahrain National Security Agency] Sheikh Khalifa bin Abdallah Al Khalifa figures prominently into the King's efforts on reform and stability."

According to U.S. Ambassador J. Adam Ereli, "charged by the King to 'Bahrainize' and professionalize BNSA, Sheikh Khalifa is determined to rid BNSA of the last vestiges of British influence and grow BNSA into a world-class intelligence and security service with global reach."

"The secret police--the Bahrain national security agency, known in Arabic as the Mukhabarat--has undergone a process of 'Bahrainisation' in recent years after being dominated by the British until long after independence in 1971," The Guardian disclosed.

"Ian Henderson, who retired as its director in 1998, is still remembered as the 'Butcher of Bahrain' because of his alleged use of torture. A Jordanian official is currently described as the organisation's 'master torturer'."

"Sheikh Khalifa" according to the State Department, "understands well that if he is to fulfill his mandate of protecting Bahrain, he must 'go deep' and develop robust intelligence liaison relationships with partners around the world."

"To that end," Ereli writes, "he has embarked on a program to establish and strengthen intelligence ties abroad, with a central focus on counterterrorism. Against this backdrop, Sheikh Khalifa unabashedly positions his relationship with the U.S. Intelligence Community above all others, insisting that his key lieutenants communicate openly with their U.S. liaison partners and actively seek new avenues for cooperation."

Would an imperative to "communicate openly" and jointly pursue "new areas for cooperation" extend to U.S. training of Bahraini spooks in myriad aspects of electronic and signals intelligence, the better to more fully exploit technologies supplied by America's NATO partner, Germany?

Exporting Repression

Three years ago, I reported on a highly-intrusive communications intelligence system which New Scientist drolly dubbed "surveillance in a box." (See: "New Spy Software Coming On-Line: 'Surveillance in a Box' Makes its Debut," Antifascist Calling, August 28, 2008)

According to reporter Laura Margottini, Siemens had developed software capable of integrating "tasks typically done by separate surveillance teams or machines, pooling data from sources such as telephone calls, email and internet activity, bank transactions and insurance records. It then sorts through this mountain of information using software that Siemens dubs "intelligence modules".

"In Bahrain," Bloomberg Markets reported, "officials routinely use surveillance in the arrest and torture of political opponents, according to Nabeel Rajab, president of the Bahrain Center for Human Rights."

Rajab told Silver and Elgin that "he has evidence of this from former detainees, including Al Khanjar, and their lawyers and family members."

"Everyone was interrogated based on telephone calls that were checked--and not only us, the activists," Rajab said. "Even our children, our wives, our sisters are being monitored."

We learned that Siemens had already sold the devilish system to more than 60 Asian, European and Middle Eastern nations, including world-class human rights abusers. Which countries? Well, Siemens won't say.

As Antifascist Calling previously reported, the European privacy watchdog group Quintessenz, published a series of leaked internal documents and presentations made by Siemens for prospective customers.

And while those documents and are startling, in the three years since they were first published, these products have become far more invasive.

Specifically designed for "fusion centers" or their Asian, European and Middle Eastern equivalents, the Intelligence Platform claims it can deliver "real time" intelligence for the hot "lawful interception" market.

As Bloomberg Markets reported, the use of the system by Bahraini police "illustrates how Western-produced surveillance technology sold to one authoritarian government became an investigative tool of choice to gather information about political dissidents--and silence them."

"Some industry insiders," Silver and Elgin wrote, "now say their own products have become dangerous in the hands of regimes where law enforcement crosses the line to repression."

One such insider, Nikhil Gyamlani, told reporters that when he worked as a consultant for Trovicor and Nokia Siemens, the firm "had developed monitoring systems and sold them to some of the countries" on the cutting edge of the Arab Spring.

"Besides Bahrain," Bloomberg Markets reports, "several other Middle Eastern nations that cracked down on uprisings this year--including Egypt, Syria and Yemen--also purchased monitoring centers from the chain of businesses now known as Trovicor."

And "Trovicor equipment," Silver and Elgin averred, "plays a surveillance role in at least 12 Middle Eastern and North African nations, according to the two people familiar with the installations."

During the Bahraini uprising, "authorities jammed or restricted communications to stymie gatherings and knew where to send riot police before a protest could even start, according to eyewitness reports."

"For that to happen," Gyamlani told Bloomberg, "government officials had to have some means of figuring out where to go or whom to target to nip protests in the bud."

"Across the Middle East in recent years," Silver and Elgin averred, "sales teams at Siemens, Nokia Siemens, Munich-based Trovicor and other companies have worked their connections among spy masters, police chiefs and military officers to provide country after country with monitoring gear."

Since Nokia Siemens first unveiled the system, updates "allow more than the interception of phone calls, e-mails, text messages and Voice Over Internet Protocol calls such as those made using Skype."

"The monitoring systems," Silver and Elgin wrote, "can scan communications for key words or recognize voices and then feed the data and recordings to operators at government agencies."

According to Bloomberg Markets, "some products can also secretly activate laptop webcams or microphones on mobile devices. They can change the contents of written communications in mid-transmission, use voice recognition to scan phone networks, and pinpoint people's locations through their mobile phones."

In other words, not only can Trovicor's Intelligence Platform spy on political dissidents, it can also fabricate communications thereby setting-up activists for more serious charges, particularly when authorities (falsely) accuse protest organizers of "fomenting violence" through messages they've artfully invented themselves.

One no longer need insert agents provocateurs into proscribed groups. With the Intelligence Platform one can spread disinformation or incite violence from the safety and security of a monitoring center. Think of the savings to security budgets in these deficit conscious times!

"Offshoring" the Security World

As Bloomberg Markets revealed, when Siemens and Nokia unloaded their spy unit, they turned to the offshore world and found an eager buyer in "the Guernsey-based Perusa Partners Fund 1 LP" who "renamed the business Trovicor, coined from the Latin and Esperanto words for find and heart."

Perusa Partners Fund 1 LP is an odd duck to say the least. Their web site informs us that "the fund we counsel is not listed on the stock exchange and is thus able to act independently from quarterly reports and analyses." Founded in 2007 with headquarters in St. Peter Port, Guernsey, Perusa tells us that "we think globally and act locally."

The Fund does not list the identities of key investors since disclosure is "regulated by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended)."

However, Christian Hollenberg, a founder of Perusa GmbH, says that Trovicor's owners "only invest in ethical businesses" including Trovicor "which the fund owns in its entirety."

Hollenberg told Silver and Elgin that Trovicor is "a legal business, and it's part of every communications network in the civilized world."

But as author Nicholas Shaxson told New Left Project in a wide-ranging interview, "Crown Dependencies" such as "Jersey, Guernsey, the Isle of Man ... have old histories as tax havens and have played an offshore role for decades, even centuries. They also got in on this game of attracting money by offering secrecy, zero taxes, and escape from laws."

And with "partners and investors ... based in the most important financial centers worldwide," the Fund is inclined to invest "in smaller companies, in companies with faint profitability or with operative problems. We are flexible and always prepared for various situations."

Perusa's investment portfolio is a diverse, if strange mix. With interests ranging from the Swedish-based Dynasafe International, which offers "a comprehensive range of explosion containment and munitions destruction equipment as well as off gas treatment systems to customers all over the world," to the medical implant firm GB Implantat-Technologie GmbH in Essen, Germany, and from Belgian-based Flamingo N.V., described as "a leading international company in the domestic pet sector" (!) to Trovicor, Guernsey-based Perusa certainly covers a wide range of investment opportunities.

Accordingly, "the fund we advise invests in companies that are confronted with dramatic change." Trovicor, the firm which snapped-up Siemens Intelligence Platform fits the bill. "Do you want to spin off a business division from a larger organization and become independent?" Well, according to Perusa, "via the fund we advise, we can provide you with fresh capital and new and additional management respectively."

But why would a multibillion euro firm such as Siemens find it necessary, or even desirable, to "spin-off" a profitable unit, one with unlimited growth potential in the 羹ber-lucrative "lawful interception" niche market"?

After all, this sector is worth some $3 billion annually, Jerry Lucas, the president of the McLean, Virginia-based TeleStrategies Inc., the organizers of ISS World trade shows for spooky companies servicing the secret state told Bloomberg Markets.

If we're to believe statements from Nokia Siemens Networks spokesperson Ben Roome, "the elevated risk of human rights abuses was a major reason for NSN's exiting the monitoring-center business."

Quick to absolve the firm of any liability for designing and selling products to autocratic regimes that torture their citizens, Roome told Silver and Elgin that "ultimately people who use this technology to infringe human rights are responsible for their actions."

And with ISS World Americas conference in Washington, D.C., right around the corner, enterprising security officials will learn "methodologies and tools to bridge the chasms of lawful intercept data gathering to information creation to investigator knowledge to actionable intelligence."

One shudders to think what "knowledge" was shared last year amongst Middle Eastern spooks who attended ISS World MEA conclave in Dubai or what tips of the dirty trade Trovicor's head of consulting, Jesper Mathiesen, gave his eager hosts.

Amongst the "tools" which Trovicor supplies, at a steep price rest assured, are spy kit for "intelligence mining;" "pattern recognition;" "behaviour profiling;" "indexing-text search," that performs "in the background" on "contents of emails, web pages, Word documents, SMS, database records etc.;" "mobile location tracking" suites equipped with a "geographical information system," an "ideal solution to track, record, extrapolate, and anticipate the movements of mobile devices;" "speaker recognition" and of course, "link analysis" tools which can be used "to find and graphically display correlating data of intercepted targets."

And should current spy toys prove insufficient, additional "add-on applications are being developed to allow for maximum use of the information contained in the database of the Monitoring Center."

Abdul Ghani Al Khanjar is in hiding today. He told Bloomberg Markets that "he took up the anti-torture cause after being detained and interrogated for six days in 2000. His jailers handcuffed him, hung him from a stick 'like a goat' and beat the soles of his feet."

And when the activist returned from London in August 2010, after testifying about Bahraini human rights abuses before a committee at the House of Lords, plainclothes police took him away.

"For his first 85 days or so in custody," Bloomberg Markets reported, "Al Khanjar saw no one from the outside."

"For one agonizing stretch," Silver and Elgin averred, "his jailers forced him to stand without sleeping for five days. At other times they beat him with hoses and their hands and threatened him with sexual abuse."

"I'm hidden somewhere," he says. "I'm unfortunately in Bahrain. They're going to kill me. What to do? What to do?"

This raises an inevitable question: what will we do to bring down repressive, authoritarian governments, beginning with those in the West, which profit handsomely from screams dying in soundproof rooms?

(Image courtesy of Metronaut)

New Leaks Reveal Insider Tips on S&P;'s U.S. Credit Downgrade to Killer-Drone Firm

We live in an age where insider deals, conflicts of interest, revolving doors between "regulators" and the "regulated" (lubricated with oceans of cash) accompanies the generalized looting of social wealth by deviant capitalist elites.

That such behavior by our corporate masters no longer raise an eyebrow, let alone elicit action by authorities charged with stopping criminal miscreants destroying other people's lives, is an unmistakable sign that the much-vaunted "free market" system, staring into an abyss of its own creation, has entered a terminal phase.

It now appears that insiders at Standard and Poor's or the Treasury Department, take your pick, may have leaked information to privileged clients on the recent U.S. credit downgrade, with confirmation coming from a surprising source.

Last week, AntiSec cyber-guerrillas (a loose alliance amongst individuals affiliated with LulzSec and Anonymous) released a 1GB cache of emails filched from security contractor Vanguard Defense Industries (VDI).

Previously Anonymous and LulzSec have wrapped their keyboards around defense grifters Booz Allen Hamilton, ManTech International, NATO, the Department of Homeland Security, the FBI, InfraGard (a "public-private" security alliance amongst corporate heavy-hitters and the Bureau), the CIA, the Arizona Department of Public Safety, the Arizona Counter Terrorism Information Center (a so-called "fusion center" staffed by cops, federal agents, private contractors and the U.S. military), the Bay Area Rapid Transit agency (BART), Britain's Serious Organised Crime Agency, PBS, Fox News, and repressive governments such as Egypt, Tunisia and Zimbabwe.

Their latest campaign targeted VDI, a Texas-based firm, which specializes in the "development and deployment" of Unmanned Aerial Systems (UAS, killer drones). VDI "draws on specialized experience of senior aerospace engineers, former military special operations officers, military instructor pilots as well as retired Senior Executive Service Federal Agents," claiming their "background and operational knowledge has afforded us the unique vision to provide a platform that will extend the security and response capabilities of any organization," according to a blurb on their web site.

While VDI touts their ability to offer "support" to the "military, local, state and federal law enforcement as well as the private sector," the firm also offers "a full scope of consulting services independent of our aerial technology."

That "unique vision" however, didn't prevent AntiSec from spiriting away thousands of emails from VDI's Senior Vice President Richard T. Garcia, a former FBI Assistant Director in Los Angeles who recently left a well-paid position as Global Security Manager for the environment-killing Shell Oil Corporation (can you say Niger Delta?) for "greener" pastures.

A press statement from AntiSec announced that the leak "contains internal meeting notes and contracts, schematics, non-disclosure agreements, personal information about other VDI employees, and several dozen 'counter-terrorism' documents classified as 'law enforcement sensitive' and 'for official use only'."

"Vanguard Defense Industries," AntiSec writes, "manufactures unmanned 'ShadowHawk' drones which cost $640,000 and are equipped with grenade launchers and shotguns. ShadowHawks are currently in use by law enforcement, military, and private corporations deploying them in the US, the Horn of Africa, Panama, Columbia [sic], and US-Mexico border patrol operations. These emails contain contracts, schematics, non-disclosure agreements, and more. Additionally we found evidence of a Merrill Lynch wealth management advisor giving private advance notice to Garcia about upcoming S&P; US credit rating downgrades."

Improper Disclosures

In an April 25, 2011 email from Garcia to Gloria Newport, Cindy Cook, a Wealth Management Advisor with Bank of America-owned Merrill Lynch "advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."

Investigative journalist Steve Ragan, writing at The Tech Herald (the publication that broke the story on Anonymous's HBGary hack) informs us that "the U.S. Securities and Exchange Commission was investigating whether there was any sort of insider trading done by S&P; employees before the downgrade was official. The story hinged on comments made to the paper by sources close to the investigation itself."

"On the day S&P; cut the U.S.'s credit rating" Ragan writes, "Wall Street was flooded with downgrade rumors. These rumors started earlier in the day while trading was active. It turned out they were true."

According to Bloomberg News the SEC "is scrutinizing the method Standard & Poor's used to cut the U.S.'s credit rating and whether the firm properly protected the confidential decision, according to a person with direct knowledge of the matter."

Reporter Joshua Gallu wrote August 14 that SEC staff are "looking into whether certain market participants learned of the downgrade before its announcement."

Downplaying speculation that S&P; employees may have breached SEC rules by leaking sensitive information to privileged clients, The New York Times, as is their wont, claimed "it is arguable whether S.&P.;'s announcement on Aug. 5 of the rating change was all that confidential, given the speculation about it."

"Assuming information about the downgrade was confidential," the Times pontificates, "it must also be material, which means a reasonable investor would consider it important. This seems to be an easy element to establish because the wild gyrations in the market on the first trading day after the downgrade shows how investors viewed it."

But Cook's email to Garcia didn't arrive in his in-box "on the first trading day after the downgrade" but nearly four months earlier, long before July's political shenanigans over raising the federal debt ceiling, the ostensible reason why S&P; downgraded America's credit worthiness.

Maxine Waters (D-CA), wrote to SEC chairwoman, cover-up specialist Mary Schapiro, demanding that the commission "conduct an investigation into whether S.&P.; selectively disclosed information related to the U.S. government debt downgrade to any financial institutions, and whether any institutions that had that nonpublic information traded on that information prior to the official announcement."

It appears that Cook's email to Garcia would confirm that S&P; insiders did just that, providing information to Merrill Lynch and one can assume other financial firms.

Throwing cold water on charges that the rating's agency acted improperly, the Times argues that "even if if the S.E.C. finds that the information was improperly disclosed, proving insider trading will be difficult."

Why might that be?

According to the Times, "while S.&P.; and other credit rating agencies are required to adopt policies to prevent such disclosure, it is questionable whether just leaking information violates any federal regulations, even if it breaches a corporate confidentiality policy."

Lest readers believe however, that the SEC will mount a comprehensive investigation of leaks by S&P; insiders, they would do well to read Matt Taibbi's latest piece for Rolling Stone.

According to congressional testimony by an SEC whistleblower, which sparked an investigation by that agency's Inspector General, the commission's enforcement division, under orders from higher-ups, who went on to secure well-paid positions with the firms they were charged to regulate, shredded a mountain of incriminating evidence detailing wrongdoing by some of the world's top financial firms.

How many files, called "Matters Under Investigation" or MUI were destroyed? According to whistleblower Darcy Flynn, the SEC's enforcement division "disappeared" some 18,000 files, including those of convicted fraudster Bernie Madoff, accused swindler, suspected CIA banker and drug money launderer R. Allen Stanford, as well as accusations that top-tier Wall Street investment banks such as J.P. Morgan Chase had engaged in insider trading.

Taibbi writes that "under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records--'including case files relating to preliminary investigations'--are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term 'Orwellian,' devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation."

It's a nice deal if you can get it, which of course firms like Goldman Sachs, J. P. Morgan Chase, Deutsche Bank, AIG and Lehman Brothers (before their 2008 collapse) managed to get in spades.

"We'll never know," Taibbi avers, "what the impact of those destroyed cases might have been; we'll never know if those cases were closed for good reasons or bad. We'll never know exactly who got away with what, because federal regulators have weighted down a huge sack of Wall Street's dirty laundry and dumped it in a lake, never to be seen again."

In this light, AntiSec's hack of VDI is instructive. If for nothing else, it demonstrates that well-connected insiders reap billions from the collapse of the global economy, divvying-up the spoils amongst privileged friends and clients, including those inhabiting the nethermost regions of the secret state.

Cyberwar: Bringing it All Back Home, and Waging War on the Global Economy

As global elites scramble to seize as much advantage as possible over their rivals as the economy craters, intelligence methods deployed as part of imperialism's endless "War on Terror" have migrated with a vengeance onto Wall Street.

Revelations by Anonymous earlier this year that a passel of Pentagon-linked security contractors had joined forces to run covert ops on whistleblowers and journalists set alarm bells ringing.

February's release of some 75,000 emails filched from servers controlled by security grifters HBGary Federal and HBGary, uncovered a sordid scheme by the Bank of American and the U.S. Chamber of Commerce to target supporters of WikiLeaks and left-wing corporate critics.

That hack, in addition to exposing BofA's illicit "Team Themis" gambit, a co-production of white shoe law firm Hunton & Williams, HBGary Federal, HBGary, Palantir Technologies (a recipient of CIA slush funds from its venture capital arm In-Q-Tel) and Berico Technologies, also revealed that the Pentagon and giant defense contractors such as General Dynamics had teamed up with HBGary to develop undetectable malware or "rootkits" for America's emerging Cyberwar-Intelligence Complex, according to a series of documents published by the secrecy-shredding web site Public Intelligence.

Additional files revealed that HBGary and ManTech International had partnered-up with the National Security State for what they described as "Internet Based Reconnaissance Operations" that use "non-attributable internet access" methodologies (approved hacking by the secret state) for "operating system and network application identification," "identification of possible perimeter defense" for "intelligence gap fill" and "counterintelligence research." In other words, broad based internet spying on an array of "adversaries" (e.g., political dissidents, antiwar activists, anticorporate campaigners and other enemies of the state).

Further research by Project PM's OpMetalGear revealed that defense giant Northrop Grumman and other firms such as HBGary Federal, TASC and ManTech International were engaged in a bidding war to spear the Pentagon's Romas/COIN program (since renamed Odyssey).

That program, researcher Barrett Brown writes, is "a secretive and immensely sophisticated campaign of mass surveillance and data mining against the Arab world, allowing the intelligence community to monitor the habits, conversations, and activity of millions of individuals at once." (For additional background see: "Security Grifters Partner-Up on Sinister Cyber-Surveillance Project," Antifascist Calling, July 3, 2011)

We can assume that once intelligence sources and methods intended to target external enemies are turned inward and attack the American people, financial insiders too, would find such tools an exemplary means to crush their competitors and adversaries, the global working class.

Bankrupting and Criminalizing the State

"Economic warfare," economist and researcher Michel Chossudovsky, writing in The Global Economic Crisis: The Great Depression of the XXI Century, "consists in destabilizing countries and impoverishing their respective populations."

Chossudovsky argues that "the manipulation of market forces through the imposition of strong 'economic medicine' under the helm of the IMF supports U.S.-NATO strategic and geopolitical objectives."

Similarly," Chossudovsky observes, "the speculative attacks waged by powerful banking conglomerates in the currency, commodity and stock markets are acts of financial warfare," one in which the "financing of an oversized U.S. war economy triggers imbalances in the U.S. monetary system, destabilizes the U.S. fiscal structure and creates imbalances in the allocation of human and material resources."

This tragedy is playing out today. The on-going market meltdown in the wake of the U.S. credit downgrade and the crisis in the Eurozone has affected tens of millions of workers who saw their retirement funds gobbled up by speculators. Additionally, states and municipalities "carrying debt tied to federal creditworthiness," The Tech Herald avers, "each took a hit."

Hard hit cities and states struggling under an enormous debt burden due to falling revenues, are held hostage by the credit rating agencies. As economist Michael Hudson points out in Global Research credit rating agencies such as Standard and Poor's, Moody's and Fitch "are playing the political role of 'enforcer' as the gatekeepers to credit, to put pressure on Iceland, Greece and even the United States to pursue creditor-oriented policies that lead inevitably to financial crises."

Hudson writes that these "crises in turn force debtor governments to sell off their assets under distress conditions. In pursuing this guard-dog service to the world's bankers, the ratings agencies are escalating a political strategy they have long been refined over a generation in the corrupt arena of local U.S. politics."

As the World Socialist Web Site observes, "the crisis of the world's stock exchanges and financial markets is increasingly spiraling out of control. Governments are being driven by developments which they are unable to influence."

Socialist critic Peter Schwarz notes that "the panic on the stock markets shows that traders are expecting a deep recession, already heralded by stagnating growth and rising unemployment rates," and that "corporations will respond with new waves of layoffs, governments with further budget cuts."

In a climate stoked by fear, war and those all-purpose boogeymen, "debt," "terror" and now, "cyberwar," the cost of bailing-out a looted capitalist economy are shouldered by the working class. These pressures in turn increase the downward spiral as employment, wages, manufacturing and consumer spending go into a tail-spin, a self-destructive feed-back loop that further exacerbates levels of unemployment, home foreclosures and generalized misery. The tentacles of this manufactured "debt crisis" reach everywhere--from the smallest town to the largest city.

Hudson avers that "localities are pressured when their rising debt levels lead to a financial stringency. Banks pull back their credit lines, and urge cities and states to pay down their debts by selling off their most viable public enterprises."

And waiting in the wings are a new class of corporate vultures and rentier vampires who swoop down to reap the rewards gleaned by gobbling-up (looting) public assets at fire sale prices.

The rating agencies who profit at both ends of any transaction according to Hudson, "offer opinions" that have become a "big business" for the agencies. "So it is understandable why their business model opposes policies--and political candidates--that support the idea of basing public financing on taxation rather than by borrowing. This self-interest colors their 'opinions'."

Accordingly, "to acquiescence in such economically destructive financial behavior is the opposite of fiscal responsibility. Cutting federal taxes and Social Security payments to obtain a more positive S&P; 'opinion," Hudson writes, "would give banks an ability to 'pull the plug' and force privatization and anti-labor austerity plans by refraining from rolling over the U.S. debt--and cutting taxes Tea-Party style rather than funding spending by taxation on a pay-as-you-go-basis."

In this light, one can certainly understand why a Merrill Lynch "wealth management advisor" would offer her "knowledgeable judgement" (clubby insider info) to a dodgy security outfit such as VDI.

Working classes across Europe have not "gone gently into the night" of impoverishment; the great fear here in the heimat amongst corporatists and militarists alike, is that once working people realize the game is up they just might impose some "shock therapy" of their own!

As Salon columnist Glenn Greenwald (a target of "Team Themis's" dirty tricks campaign) avers, speaking out about "the sprawling Surveillance State and the attempted criminalization of WikiLeaks and whistleblowing are so vital" to the defense of democracy.

"The free flow of information and communications enabled by new technologies--as protest movements in the Middle East and a wave of serious leaks over the last year have demonstrated--is a uniquely potent weapon in challenging entrenched government power and other powerful factions," Greenwald writes.

"And that is precisely why those in power--those devoted to preservation of the prevailing social order--are so increasingly fixated on seizing control of it and snuffing out its potential for subverting that order: they are well aware of, and are petrified by, its power, and want to ensure that the ability to dictate how it is used, and toward what ends, remains exclusively in their hands."

This is why actions by disparate groups such as AntiSec, Anonymous and WikiLeaks are informational beacons in an otherwise homogenized media landscape, one characterized by celebrity gossip, sex scandals and "crimes" carried out by poor and marginalized populations--never the filthy rich or the warmongers who murder millions as they launch resource wars that steal other people's social property.

While firms such as VDI, Boeing, General Atomics and Lockheed Martin hawk drone technologies that transform human beings into red mist, and do so as their "patriotic" (and highly-profitable) duty as the Pentagon wholeheartedly embraces hypermodern forms of robotized mass murder, the bill for American hubris, long past due, is coming faster than most people think.