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Page   1 - Duke Energy Employee Advocate

Washington - Page 37

"How wonderful the world would be without Saddam and without Bush!" - Fahd Saleh of Saudi Arabia

Lobbying or Bribing?

Employee Advocate – - June 17, 2003

Bribery is illegal in America. Lobbying is great say the lawmakers.

With bribery one gives a sum of money to someone in authority in order to get what he wants. With lobbying, a corporation (usually) gives a lobbyist a sum of money to influence someone in authority, to get what it wants.

How does one tell the difference? It’s a lot like predicting the sex of an chicken before it’s hatched by holding the egg. There is some delicacy involved.

Some are questioning whether all congressmen know the difference, according to the Dallas Morning News. Texas Republican Congressman Joe Barton admitted to attempting to protect a utility from federal oversight. He explained that his own legislation would uniquely provide regulation.

The legislator denied that contributions to Republicans, at fund raising events that he hosted, had anything to do with it. Perish the thought!

The Congressman defended his actions with this statement “To be told there's some quid pro quo, that's just stupid. It's just dumb. It just didn't happen. I may be cranky. I may be a contrarian. But I am not crooked and I am not corrupt. I play by the rules, and I've done it for the 19 years I've been in Congress.”

The old “I’m not a crook” defense lives on. Not only that, but to even entertain such a thought is “dumb” and “stupid.”

The fancy footwork was attempted, because Westar also owned a home alarm company. The special legislation attempt gets more murky from here on out.

Here is a direct quote from the article – you sort it out: “Mr. Barton said he believed Westar ‘was the only utility in the country that could be regulated as a mutual fund company’ if Congress repealed the 1935 Public Utility Holding Company Act, something he has long advocated. ‘A utility that has an alarm company is not a mutual fund company,’ he said.

These are not wild accusations, with no evidence to back them up. E-mail between Westar executives mentioned favorable legislation being linked to campaign contributions, amounting to thousands of dollars.

The plot gets a little thicker here. The donations apparently did not go directly to Mr. Barton. The money went to candidates that Mr. Barton raised money for, or to candidates that they favored. Mr. Barton campaigned for: House Majority Leader Tom DeLay of Sugar Land, Texas, Sen. Richard Shelby of Alabama and Rep. Billy Tauzin of Louisiana. Think of a Congressional chain letter!

Over $7 million was raised by Mr. Barton in the 2002 elections for Republicans.

Mr. Barton said “I was approached and presented with the problem. I had staff check it out. So I decided we'll put it in the bill and see who squawks and who doesn't.”

Objections came from the Securities and Exchange Commission, the Investment Company Institute the Investment Company Institute, and other energy committee members.

Buying Energy Legislation

Buying Energy Legislation

Employee Advocate – - June 8, 2003

Energy legislation has been a fiasco under the Bush administration. Enforcing the existing laws has not been a priority either. Bush and Cheney ignored the energy crisis in California for as long as possible. They were not able to see any problems as the energy corporations were mopping up. When the ring-leader of the crisis, Enron, melted down, the problems could no longer be ignored.

Cheney conducted secret energy meetings to gather input for new legislation, but only energy executives were allowed to attend.

The Associated Press reported that all it took for Westar Energy to get a seat at the energy table was political donations. Not only that, but one can get tailor made loopholes added to bills. All of this is available to energy executives, and at reasonable prices!

The head of the Democratic Party called for a probe by the attorney general into questionable political donations made by the energy company. It was requested that the records of leading Republican lawmakers be seized.

The smoking gun is Westar Energy internal documents that mention campaign donations and getting "a seat at the table" of a House-Senate energy plan committee.

House Majority Leader Tom DeLay, Senate Banking Committee chairman, Richard Shelby and Reps. Joe Barton of Texas and Billy Tauzin of Louisiana requested the contributions from Westar, according to the documents.

Rep. Joe Barton (Tex.), inserted a provision to exempt Westar Energy from an annoying federal regulation. Laws are always much more accommodating when executives write their own.

Terry McAuliffe, Democratic National Committee chairman, said “Once again, we see the price tag for doing business with this Republican Congress.”

Stuart Roy, DeLay spokesman, threw some mud back. He said that McAuliffe was “worse than corrupt, he's a joke.” He also referred to McAuliffe as “Bill Clinton's bagman.”

Of course lobbyist were involved. But they are denying talking about money. Lobbyist Timothy Smith said this about discussing campaign donations: “It was kind of considered tacky and in poor taste, let alone illegal.”

Yes, of course! Any fool knows that one does not discuss the donation. One merely slides it under the table and smiles. Where do these amateurs come from?

Howard Dean, Democratic presidential candidate, is also calling for an investigation. He said that if the Republican lawmakers agreed to sell political access, “they should be prosecuted for violating bribery laws.”

Democrats could not kill the Westar exemption; they were outvoted by the Republicans.

It was only after the company became the subject of a grand jury investigation that the Westar exemption was dropped.

CEO’s and politicians will do the right thing - but only when the heat is on.

Cheney Not Off the Hook Yet

Riding Deregulation to Disaster

Controlling the Media

Employee Advocate – – June 1, 2003

Monday, the Federal Communications Commission is to vote on loosening the rules on newspapers and broadcast stations ownership. It is expected to pass and would make it much easier for a few people to control the news.

The Center for Public Integrity reports that top broadcasters have had closed door meetings with Federal Communications Commission officials 71 times. Consumer groups, Consumers Union and the Media Access Project, have only had 5 such meetings.

Danny Schechter, executive director of, a media watchdog group, said “There is a complete lack of transparency in the rulemaking process at the FCC. These issues get treated as just business issues, when they are vital to our democracy. When real money is involved, the work gets done in the dark of night.”

Does this remind you of the secret energy meeting with Dick Cheney? The VP wanted advice on how to set up energy rules. But the only advice he received was from energy executives! Consumer groups were excluded from the meetings. What actually happened at these meetings are still being kept a secret from the American public.

Connect the dots of everything that has transpired in the last few years and a grim picture emerges.

Amazing Quotes

Employee Advocate – – May 23, 2003 compiled these recent quotes:

"Numbers don’t mean anything. In the tax code and dealing with a jobs-and-growth package, you can be very creative and still have a major impact." - House Majority Leader Tom DeLay acknowledging that he hoped unusual methods could make the actual tax cut much higher.

"I don’t believe anyone that I know in the administration ever said that Iraq had nuclear weapons." - Defense Secretary Donald Rumsfeld, May 14, 2003.

"We believe he has, in fact, reconstituted nuclear weapons." - Vice President Dick Cheney, March 16, 2003.

The Acid Test

N. Y. Times – by Paul Krugman – May 4, 2003

There is, alas, only one Eliot Spitzer. And while you want to stand up and cheer when Mr. Spitzer, New York's attorney general, wins another round against malefactors of great wealth, his side — our side, unless you happen to be a corporate insider — is losing the war.

On Monday, thanks mainly to Mr. Spitzer, a group of investment banks paid $1.4 billion to settle charges that their stock analysts had been shilling for corporate clients. This was, however, a mere slap on the wrist. And it's increasingly obvious that neither the investment bankers nor corporate evildoers in general are feeling chastened.

Indeed, last week Stanley O'Neal, the chief executive of Merrill Lynch, wrote an op-ed article caricaturing the likes of Mr. Spitzer — though without naming him — as enemies of capitalism who teach investors that "if they lose money in the market they're automatically entitled to be compensated." By the way, Henry Blodget — the analyst whose internal e-mail famously used a scatological term to describe a stock he was publicly touting, and who was permanently banned from the industry under Monday's settlement — worked for Merrill Lynch.

Mr. Spitzer's scathing reply, addressed to "Mr. C.E.O.," is a classic. ("Indeed, you did not want to tolerate risk. Because what you did was shift the risk to unknowing investors while you got the fees up front.") But it's revealing that Mr. O'Neal felt empowered to write that piece in the first place. Like the New York Stock Exchange, which tried to appoint Citigroup's Sanford Weill to its board — Mr. Weill is now forbidden to talk to his own company's analysts unless a lawyer is present — Mr. O'Neal overreached. But he clearly knows which way the wind is blowing.

And it's not just investment bankers: corporate insiders across America are feeling their oats. Consider the executives at American Airlines, who paid themselves big bonuses and secretly set up a special trust to secure their own pensions, even while demanding pay cuts from their workers to save the company. Well, why not? Trust funds protecting executive pensions even when ordinary workers' pension plans are underfunded, and hefty "retention" bonuses for executives of near-bankrupt companies, are all the rage these days.

Warren Buffett has called C.E.O. compensation the "acid test" for reform. Between 1970 and 2001, in an orgy of mutual back-scratching by C.E.O.'s and their boards, median pay among the top 100 executives soared from 35 times that of the average worker to more than 500 times as much. So what happened in 2002, as unemployment rose, wages failed to keep up with prices and stocks declined — and stories of corporate malfeasance filled the news? Nothing. O.K., not exactly nothing: some of the huge options grants at the top went away, reducing the average among the top 100. But according to Fortune, which put a pinstripe-clothed pig on its cover, median pay among top executives rose another 14 percent.

Last summer it seemed, briefly, as if the torrent of scandals — and the revelations about how closely some of our politicians were tied to scandal-ridden companies — would bring about a public backlash against corporate malfeasance. But then the topic largely vanished from the news, driven out by reports about Iraq's nuclear weapons program and all that. And after the midterm elections, which put apologists for corporate insiders back in control of all the relevant Congressional committees, we might as well have had the sirens sound the all-clear. Only Mr. Spitzer still has both the inclination and the power to make trouble.

I also wonder about the demonstration effect. I don't want to sound like those Clinton-haters who attributed every immoral act in America to the president's bad example: Bill Clinton didn't invent sex, and the Bush administration didn't invent greed. But when insiders at major corporations see top officials getting away with it — moving unscathed between stints as crony capitalists and high office or even, as in the case of Richard Perle, playing both roles at once — they have to feel that old rules no longer apply, and that they can get away with even more self-dealing than before.

In the end the corruption of our corporate system will bring retribution; even if political action never comes, investors will eventually lose faith and put their money elsewhere. But right now the bad guys, though they lose an occasional battle, are winning the war.

Some Hearts Bleed Oil

Employee Advocate – – April 18, 2003

Some think that the reason for the second war with Iraq is the same as the reason for the first war – OIL. The Bush and Cheney oil backgrounds are well known. It is fair to say that they both have more than a passing interest in oil.

One might think that protecting citizens and their property would be a high priority for such a preemptive attack. The oil twins did not see it that way. Iraqi citizens were killed or injured. Buildings, including hospitals, banks, and museums were looted. But only one asset was protected up front – the oil wells! Can there be any doubt about the focus of this war?

Doctors begged for troops to protect the hospitals from looters. Their requests were denied. Hospitals were emptied of beds and medical supplies by armed looters. Ambulances were commandeered by armed bandits. A war zone had no civilian ambulances or functional hospitals, but rest assured, the oil fields were secure!

Reuters reports that two U.S. culture advisers resigned in protest over the museum looting. They said that the U.S. military was given advance warning about possible looting of historical treasures.

Gary Vikan, director of the Walters Art Gallery in Baltimore, said "We certainly know the value of oil but we certainly don't know the value of historical artifacts."

Antiquities experts have said that U. S. military planners assured them months ago that the historic sites and artifacts would be protected. Perhaps the Iraqi people should move their hospitals and museums to the oil fields for protection in the future. Who knows? Jeb Bush may get into the White House and go for a third attack on Iraq. It is getting to be sort of a Bush family tradition.

Veterans Abused Until the End

Employee Advocate – – April 13, 2003

If United States veterans survive active duty, their tribulations are not over – they must face their own government. Congress passed a resolution to "Support Our Troops" in Iraq. They very next day the House voted to cut funding for veteran's health care and benefit programs by nearly $25 billion over the next ten years.

Veterans have found that promised pensions are not there when needed. (Employees of certain corporations have also experienced this phenomena.)

Many veterans died over the years as the government denied any culpability for agent orange medical problems. Some that lived long enough to receive any justice had to obtain it in court rooms. The denial game started again when Gulf War Syndrome symptoms began appearing.

The amazing rescue of the female POW in the latest Iraqi war was the exception, rather than the rule. All the bluster to the contrary was merely rhetoric. As U. S. POW’s languished in Vietnam, the government was not too concerned with the matter. There are people still trying to find records of the over eight thousand MIA’s from the Korean Conflict!

When the latest U. S. POW’s were shown on TV, many veterans said that this was the best that could have happened to them. These veterans said that it would now be impossible for the government to deny that they were even POW’s! While Bush was fretting over the POW broadcast, veterans knew that it was a good thing. They learned this through bitter experience.

The New York Times reported today that a nationwide review of medical research at 115 veterans' hospitals has been ordered. Investigators have discovered “serious violations of federal rules,” possibly contributing to the deaths of some patients. Some studies have been halted as a result of these findings.

A death from a huge overdose in a clinical trial is being investigated. A criminal investigation of two researchers is underway. Falsification of data may have contributed to a death or deaths.

The list of allegations goes on and on. Hospital officials are not too talkative, because they are afraid of being sued. Of course, this brings up another issue. If a medical lawsuit is successful, G. W. Bush wants the settlement to be limited.

A least on the battlefield military personnel know that the enemy is out to kill them. Off the battlefield they become targets of bureaucrats, bean counters, and cowboy politicians.

Previous related articles:

Washington Does Not ‘Support the Troops’

The War's Dirty Secret

L. A. Times – by Steve Lopez – April 7, 2003

It's About Changing United States, Not Iraq

(3/30/03) - Much to her surprise, the federal government is promising to do everything Los Angeles Congresswoman Maxine Waters has spent years fighting for.

Education for the neediest souls will be transformed, quality health care will be guaranteed, damaged roadways and bridges will be rebuilt, and millions of dollars will be spent to spur new business.

Waters just never figured the beneficiaries would be residents of Iraq.

A few weeks ago, when I spent several hours with her in Washington as the start of the war approached, Waters had begun to fear the worst.

"I'm very worried about the long-term impact," she said, predicting that as the cost of the war grows, states, counties and cities will get stiffed.

Waters wasn't talking about the weeks and months ahead, but the years and decades to come. The cost of the war and rebuilding Iraq, she said, could drastically limit what government can do.

The effort to turn Iraq into a democracy, in other words, is making the U.S. less of one. Our opposition party has disappeared, corporate interests dictate public policy, and the feds may be rummaging through your e-mail.

There's a dirty secret no one has told you, and here it is: This war is not about changing Iraq, it's about changing America.

Unless you're lucky enough to be an investor in one of the corporations that will win multimillion-dollar contracts to rebuild Iraq, you may be hurting when the cost of the war and a new era of deficit spending put even more of a drag on the economy.

If you don't earn enough to hit the jackpot on President Bush's proposed tax cuts, you're just going to have to fend for yourself. The whole idea is to train you to expect less and to feel patriotic about it.

If things get really bad, you can always move to Iraq.

"I think it's terribly arrogant and overly ambitious for this president to think he can invade that country, turn it into a democracy, and use American taxpayer dollars to build an infrastructure that still is not built in some parts of this nation," Waters said.

"In addition to that, he wants to go ahead with tax breaks for the wealthiest people in this country."

To clarify, Waters isn't against sending American dollars to other countries.

"I believe in foreign assistance, and I think the richest nation in the world should certainly help our neighbors in other parts of the world," she said. "But I dislike the idea that we tear up Iraq first, bombing it to smithereens, and then we go back and put in the water systems, the health-care facilities and the other things we've torn up."

Last week, Waters and the rest of the country got the first bill for Operation Iraqi Freedom when the president asked Congress for $74.7 billion to cover war-related costs. Empire-building isn't cheap.

"That's probably going to underwrite about one month's cost of the war," said Waters. "And it's just the tip of the iceberg."

Waters got nervous when she saw Halliburton, Vice President Dick Cheney's former company, grab one of the first rebuilding contracts before we'd even begun knocking things down. To help prevent a feeding frenzy by corporations with political connections, Waters introduced two amendments.

The first would have put a four-year hold on the awarding of military contracts to companies that helped draft the Iraqi war policy or employed high-level administration officials.

It was shot down like a sputtering Scud.

Waters went back to the drawing board and came up with a softer amendment.

"This time I just said, 'OK, let's say the person who's worked for that company in the last four years can't do the negotiating. He'd have to recuse himself from that discussion.' Now that's as simple as it can get, and they voted against that one, too."

One night last week, I called Waters' Capitol Hill office at 9 p.m. her time and she answered the phone herself, having just returned from a House session.

"I was on the floor for an hour, helping educate people about the cuts being made to veterans' programs," she said.

So let's review.

We're asking 200,000 troops to risk life and limb in Iraq, and the White House and Congress are preparing a welcome-home party by slashing veterans' benefits.

Last week, I visited the Veterans Affairs dorms in West L.A., where I met a Vietnam vet who was wounded six times. He had a brace on his leg and shrapnel scars from head to toe, and he'd finally given up on his fight for enough disability pay to live on.

When I walked away, patients were calling out to me, saying there's no hot water for showers.

Things are not looking good for the future veterans of Operation Iraqi Freedom.

By Waters' count, current budget proposals would trim $15 billion from veterans' programs -- something's got to cover those big tax cuts -- over the next 10 years.

And that's if there are no unforeseen costs in the rebuilding of Iraq.

Washington Does Not ‘Support the Troops’ - by Ashley L Decker – April 4, 2003

Support the Warrior Not the War: Give Them Their Benefits!

(3/28/03) - The recent rally cry "Support Our Troops" seems to me little more than a perverted, propaganda ploy to "Support the War." But we can support our troops, without supporting the war, by rectifying some of the following conditions.

The House of Representatives have recently voted on the 2004 budget which will cut funding for veteran's health care and benefit programs by nearly $25 billion over the next ten years. It narrowly passed by a vote of 215 to 212, and came just a day after Congress passed a resolution to "Support Our Troops." How exactly does this vote support our troops? Does leaving our current and future veterans veterans without access to health care and compensation qualify as supporting them?

The Veteran's Administration, plagued by recent budget cuts, has had to resort to charging new veterans entering into its system a yearly fee of $250 in order for them to receive treatment. It is a sad irony that the very people being sent to fight the war are going to have to pay to treat the effects of it.

According to the Veteran's Administration, 28 million veterans are currently using VA benefits. Another 70 million Americans are potential candidates for such programs. This amounts to a quarter of the country's population. Veterans and their families will sadly begin finding that they have no place to turn for their medical treatment as V.A. hospitals across the country face closing their doors. With the budget shrinking, staff will be let go. This could mean the loss of over 19,000 nurses. Without these nurses, this leads to the loss of over 6.6 million outpatient visits. Approximately one out of every two veterans could lose their only source of medical care. That is, if they even realize help is available to them. The Bush Administration recently ordered V.A. medical centers to stop publicizing available benefits to veterans seeking assistance. This follows discontinued enrollments of some eligible veterans for healthcare benefits as of January, 2003.

Bush Administration funding cuts will also prevent veterans from receiving their disability pensions. My father was granted 100% disability six years ago for Post-Traumatic Stress Disorder associated with the Vietnam War. He deserves every cent of it. As do all soldiers who are willing to go to war. Under the Bush administration, being granted the ability to receive war related compensation has become a rare privilege, not a right as it should be. Nearly a third of Gulf War veterans, about 209,000 veterans, have submitted claims to to the VA for disability. The backlog of unprocessed claims has reached the astronomical count of 489,297, a number which is unfortunately increasing all of time. There are also currently 500,000 Compensation and Pension cases still pending.

Making matters worse, forty percent of Vietnam Veterans are homeless. They went from the jungles of the war to the jungles of the street. Before President Bush decided to declare war, maybe he ought to have considered correcting this situation first. How many current veterans will return home, only to find themselves in the same situation?

I have seen the effects of war written upon the face of a man who grew old at 17. I have seen it in the way he awakes from yet another night terror. I have seen it in the countless pills he has to take. They have only succeeded in erasing his memory, but the images of the war he fought are so graphic that they will never be able to stop playing themselves upon his mind.

Even I, his daughter, have not escaped unscathed. Exposure to the chemical Agent Orange has left me with several genetic problems, including growth problems and digestive ones. I fear that these current soldiers will be exposed to toxins that will not only affect them, but their future offspring as well.

And today we are told that we must "Support Our Troops." "Wear a yellow ribbon, wave your flag, support the Bush Administration's War on Terror and War on Iraq." Questioning the war is equated with deserting our troops or treason. And yet how are the warmongers supporting our troops? By eliminating their healthcare and slashing their pensions. Let us support the warrior without supporting the war.

Ashley L Decker is a student at the University of Pittsburgh at Johnstown

Vets' Losses to Fund Tax Cut

Perle Still in Peril

N. Y. Times – by Stephen Labaton – March 30, 2003

Adviser to U.S. Aided Maker of Satellites

WASHINGTON, March 28 — While he led an influential Pentagon advisory board, Richard N. Perle advised a major American satellite maker, Loral Space and Communications, as it faced government accusations that it improperly transferred rocket technology to China, administration officials said today.

Officials at the State Department said that the senior official considering how to resolve the rocket matter, Assistant Secretary Lincoln P. Bloomfield Jr., was contacted by Mr. Perle once or twice in the second half of 2001 on behalf of the company. At the time, Mr. Bloomfield, who heads the State Department's bureau of political-military affairs, and other officials were investigating accusations that Loral turned over expertise that significantly improved the reliability of China's nuclear missiles.

"We have an office, our political-military office, led by Assistant Secretary Linc Bloomfield, who did receive queries from Mr. Perle," Secretary of State Colin L. Powell said in response to a question during an interview today. "And quite appropriate, since Richard was, I guess, authorized for Loral to ask. In conducting our regular business I know that Linc and members of Linc's staff did have conversations with Richard Perle. We would do that with anybody who is authorized to call and ask of such matters."

Mr. Perle said this afternoon that he was retained by Loral seven months before his appointment by Defense Secretary Donald H. Rumsfeld to head the Defense Policy Board and was given a one-time retainer at the outset of his work.

"I was retained by Loral in January 2001 to assist the company in assessing its dispute with the government concerning transfers of technology to the Chinese, to recommend approaches to settling that dispute including new security arrangements to assure against any further technology leakage," he said. "At no time did I urge any government official to settle the case."

He said any conversations he may have had with Mr. Bloomfield or his staff "related to the licensing" of other Loral satellites for the Chinese and that he was "not compensated by the company in connection with that activity."

Mr. Perle declined to say how much he was paid by Loral. He said he did not file a lobbying disclosure statement because he did no lobbying on behalf of Loral.

After criticism of his business deals, Mr. Perle announced on Thursday that he would resign as chairman of the Defense Policy Board but would remain on the board. In July 2001, he was appointed to head the board, a group of influential advisers that meets regularly with the defense secretary and other top officials, has access to classified information and plays an important role in shaping military policy.

Several Democratic lawmakers have called on Mr. Perle to step down from the board in light of his business relationships. Mr. Perle has told friends that he sees the criticism as being motivated by opponents of his strong view about the need to go to war in Iraq.

The case against Loral, which originated in 1997 with a Pentagon finding that Loral and Hughes Electronics had improperly turned over technical information to the Chinese, was settled in January 2002. Loral, without admitting or denying that it had violated the law, agreed to pay a $20 million penalty, the largest settlement of a technology transfer case at the time.

The government accused Loral of providing Chinese officials with confidential materials from an American panel that investigated the February 1996 crash of a Loral satellite, which was built for Intelsat, the international consortium, and was launched by a Chinese Long March rocket.

The inquiry into Loral and other companies resulted in restrictions that have prevented the industry from seeking new business with China.

The Defense Department declined to say what Mr. Rumsfeld knew about Mr. Perle's work for Loral. In a statement on Thursday accepting Mr. Perle's resignation, Mr. Rumsfeld said that he had known Mr. Perle for many years "and know him to be a man of integrity and honor."

Jeanette Clonan, a spokeswoman at Loral, said last week that she would ask Bernard L. Schwartz, the company's chairman and chief executive, about Mr. Perle's role in the case. Since then, Ms. Clonan has not replied to daily messages, including one today, left at her office, seeking comment. Other people involved in the case have said Mr. Perle was retained on the instructions of Mr. Schwartz, who came under criticism by some Republicans during the Clinton administration for being one of the largest political donors to Democrats.

Mr. Schwartz retained a prominent team to defend the company in the investigation. Among those who worked on the matter were Douglas J. Feith, who is now under secretary of defense for policy. Mr. Feith is also an old friend and former colleague of Mr. Perle. When Mr. Perle was an assistant defense secretary in the Reagan administration, Mr. Feith was his special counsel.

The Loral matter is the second instance in which Mr. Perle was doing business on behalf of an American company encountering government difficulties over ties to China. Mr. Perle had been retained by Global Crossing, the communications giant, to overcome Defense Department opposition to its proposal to be sold to a venture led by Hutchison Whampoa, the conglomerate controlled by the Hong Kong billionaire Li Ka-shing.

Delusions of Power

N. Y. Times – by Paul Krugman – March 29, 2003

(3/28/03) - They considered themselves tough-minded realists, and regarded doubters as fuzzy-minded whiners. They silenced those who questioned their premises, even though the skeptics included many of the government's own analysts. They were supremely confident — and yet with shocking speed everything they had said was proved awesomely wrong.

No, I'm not talking about the war; I'm talking about the energy task force that Dick Cheney led back in 2001. Yet there are some disturbing parallels. Right now, pundits are wondering how Mr. Cheney — who confidently predicted that our soldiers would be "greeted as liberators" — could have been so mistaken. But a devastating new report on the California energy crisis reminds us that Mr. Cheney has been equally confident, and equally wrong, about other issues.

In spring 2001 the lights were going out all over California. There were blackouts and brownouts, and the price of electricity was soaring. The Cheney task force was convened in the midst of that crisis. It concluded, in brief, that the energy crisis was a long-term problem caused by meddling bureaucrats and pesky environmentalists, who weren't letting big companies do what needed to be done. The solution? Scrap environmental rules, and give the energy industry multibillion-dollar subsidies.

Along the way, Mr. Cheney sneeringly dismissed energy conservation as a mere "sign of personal virtue" and scorned California officials who called for price controls and said the crisis was being exacerbated by market manipulation. To be fair, Mr. Cheney's mocking attitude on that last point was shared by almost everyone in politics and the media — and yes, I am patting myself on the back for getting it right.

For we now know that everything Mr. Cheney said was wrong.

In fact, the California energy crisis had nothing to do with environmental restrictions, and a lot to do with market manipulation. In 2001 the evidence for manipulation was basically circumstantial. But now we have a new report from the Federal Energy Regulatory Commission, which until now has discounted claims of market manipulation. No more: the new report concludes that market manipulation was pervasive, and offers a mountain of direct evidence, including phone conversations, e-mail and memos. There's no longer any doubt: California's power shortages were largely artificial, created by energy companies to drive up prices and profits.

Oh, and what ended the crisis? Key factors included energy conservation and price controls. Meanwhile, what happened to that long-term shortage of capacity, which required scrapping environmental rules and providing lots of corporate welfare? Within months after the Cheney report's release, stock analysts were downgrading energy companies because of a looming long-term-capacity glut.

In short, Mr. Cheney and his tough-minded realists were blowing smoke: their report described a fantasy world that bore no relation to reality. How did they get it so wrong?

One answer is that Mr. Cheney made sure that his task force included only like-minded men: as far as we can tell, he didn't consult with anyone except energy executives. So the task force was subject to what military types call "incestuous amplification," defined by Jane's Defense Weekly as "a condition in warfare where one only listens to those who are already in lock-step agreement, reinforcing set beliefs and creating a situation ripe for miscalculation."

Another answer is that Mr. Cheney basically drew his advice about how to end the energy crisis from the very companies creating the crisis, for fun and profit. But was he in on the joke?

We may never know what really went on in the energy task force since the Bush administration has gone to extraordinary lengths to keep us from finding out. At first the nonpartisan General Accounting Office, which is supposed to act as an internal watchdog, seemed determined to pursue the matter. But after the midterm election, according to the newsletter The Hill, Congressional Republicans approached the agency's head and threatened to slash his budget unless he backed off.

And therein lies the broader moral. In the last two years Mr. Cheney and other top officials have gotten it wrong again and again — on energy, on the economy, on the budget. But political muscle has insulated them from any adverse consequences. So they, and the country, don't learn from their mistakes — and the mistakes keep getting bigger.

Advisor Ties to Defense Contractors

The Center for Public Integrity – – March 29, 2003

by André Verlöy and Daniel Politi - Data by Aron Pilhofer

(3/28/03) - Of the 30 members of the Defense Policy Board, the government-appointed group that advises the Pentagon, at least nine have ties to companies that have won more than $76 billion in defense contracts in 2001 and 2002. Four members are registered lobbyists, one of whom represents two of the three largest defense contractors.

The board’s chairman, Richard Perle, resigned yesterday, March 27, 2003, amid allegations of conflicts of interest for his representation of companies with business before the Defense Department, although he will remain a member of the board. Eight of Perle’s colleagues on the board have ties to companies with significant contracts from the Pentagon.

Members of the board disclose their business interests annually to the Pentagon, but the disclosures are not available to the public. “The forms are filed with the Standards of Conduct Office which review the filings to make sure they are in compliance with government ethics,” Pentagon spokesman Maj. Ted Wadsworth told the Center for Public Integrity.

The companies with ties to Defense Policy Board members include prominent firms like Boeing, TRW, Northrop Grumman, Lockheed Martin and Booz Allen Hamilton and smaller players like Symantec Corp., Technology Strategies and Alliance Corp., and Polycom Inc.

Defense companies are awarded contracts for numerous reasons; there is nothing to indicate that serving on the Defense Policy Board confers a decisive advantage to firms with which a member is associated.

According to its charter, the board was set up in 1985 to provide the Secretary of Defense “with independent, informed advice and opinion concerning major matters of defense policy.” The members are selected by and report to the Under Secretary of Defense for Policy—currently Douglas Feith, a former Reagan administration official. All members are approved by the Secretary of Defense. The board’s quarterly meetings—normally held over a two-day period—are classified, and each session’s proceedings are summarized for the Defense Secretary. The board does not write reports or vote on issues. Feith, according to the charter, can call additional meetings if required. Notices of the meetings are filed at least 15 days before they are held in the Federal Register.

The board, whose list of members reads like a who’s who of former high-level government and military officials, focuses on long-term policy issues such as the strategic implications of defense policies and tactical considerations, including what types of weapons the military should develop.

Michael O’Hanlon, a military expert at The Brookings Institution, told Time magazine in November 2002 that the board “is just another [public relations] shop for Rumsfeld.” Former members said that the character of the board changed under Rumsfeld. Previously the board was more bi-partisan; under Rumsfeld, it has become more interested in policy changes. The board has no official role in policy decisions.

The agendas for the last three meetings, which were obtained by the Center, show a variety of issues were discussed. The Oct. 10-11, 2002 meeting was devoted to intelligence briefings from the Defense Intelligence Agency and other administration officials. One of the first items on the agenda was an ethics brief by the Office of the General Counsel.

In December 2002, a two-hour intelligence briefing, strategy, North Korea, and the Defense Advanced Research Projects Agency were on the agenda. In February 2003, the topics discussed on the first day included North Korea, Iran and Total Information Awareness, the controversial Pentagon research program that aims to gather and analyze a vast array of information on Americans. As the Center previously reported, research for the program is being conducted by private contractors.

Richard Perle, who has been a very public advocate of the war in Iraq, resigned the chairmanship of the Defense Policy Board after being criticized in recent weeks because of his involvement in companies that have significant business before the Defense Department. He did not return the Center’s phone calls.

In a March 24 letter, Rep. John Conyers, the ranking Democrat on the House of Representatives Judiciary Committee, asked the Pentagon’s inspector general to investigate Perle’s role as a paid adviser to the bankrupt telecommunications company Global Crossing Ltd. The Hamilton, Bermuda-based company sought approval of its sale of overseas subsidiaries from the Committee on Foreign Investment in the United States, a government panel that can block sales or mergers that conflict with U.S. national security interests. Rumsfeld is a member of the Committee.

Perle reportedly advised clients of Goldman Sachs on investment opportunities in post-war Iraq, and is a director with stock options of the U.K.-based Autonomy Corp., whose customers include the Defense Department.

“Mr. Perle is considered a ‘special government employee’ and is subject to government ethics prohibition—both regulatory and criminal—on using public office for private gain,” Rep. Conyers wrote in the letter obtained by the Center.

Potential conflicts not limited to Perle

Perle, however, is not the only Defense Policy Board member with ties to companies that do business with the Defense Department:

Retired Adm. David Jeremiah, a former vice chairman of the Joint Chiefs of Staff who served over 38 years in the Navy, is a director or advisor of at least five corporations that received more than $10 billion in Pentagon contracts in 2002. Jeremiah also sat on the board of Getronics Government Solutions, a company that was acquired by DigitalNet in December 2002 and is now known as DigitalNet Government Solutions. According to a news report by Bloomberg, Richard Perle is a director of DigitalNet Holdings Inc., which has filed for a $109 million stock sale.

Retired Air Force Gen. Ronald Fogleman sits on the board of directors of companies which received more than $900 million in contracts in 2002. The companies, which all have longstanding business relationships with the Air Force and other Defense Department branches, include Rolls-Royce North America, North American Airlines, AAR Corporation and the Mitre Corp. In addition to being chief of staff for the Air Force, Fogleman has served as a military advisor to the Secretary of Defense, the National Security Council and the President. He also served as commander-in-chief of the U.S. Transportation Command, commander of Air Mobility Command, the 7th Air Force and the Air Component Command of the U.S./ROK Combined Forces Command.

Retired Gen. Jack Sheehan joined Bechtel in 1998 after 35 years in the U.S. Marine Corp.

Bechtel, one of the world's largest engineering-construction firms, is among the companies bidding for contracts to rebuild Iraq. The company had defense contracts worth close to $650 million in 2001 and more than $1 billion in 2002. Sheehan is currently a senior vice president and partner and responsible for the execution and strategy for the region that includes Europe, Africa, the Middle East and Southwest Asia. The four-star general served as NATO’s Supreme Allied Commander Atlantic and Commander in Chief U.S. Atlantic Command before his retirement in 1997. After his leaving active duty, he served as Special Advisor for Central Asia for two secretaries of Defense.

Former CIA director James Woolsey is a principal in the Paladin Capital Group, a venture-capital firm that like Perle’s Trireme Partners is soliciting investment for homeland security firms. Woolsey joined consulting firm Booz Allen Hamilton as vice president in July 2002. The company had contracts worth more than $680 million in 2002. Woolsey told the Wall Street Journal that he does no lobbying and that none of the companies he has ties to have been discussed during a Defense Policy Board meeting. Previously, Woolsey worked for law firm Shea & Gardner. He has held high-level positions in two Republican and two Democratic administrations.

William Owens, another former high-level military officer, sits on boards of five companies that received more than $60 million in defense contracts last year. Previously, he was president, chief operating officer and vice chair of Science Applications International Corporation (SAIC), among the ten largest defense contractors. One of the companies, Symantec Corp., increased its contracts from $95,000 in 2001 to more than $1 million in 2002. Owens, who served as vice chairman of the Joint Chiefs of Staff, is widely recognized for bringing commercial high technology into the U.S. Department of Defense. He was the architect of the Revolution in Military Affairs (RMA), an advanced systems technology approach to military operations that represents a significant change in the system of requirements, budgets and technology for the U.S. military since World War II. Owens serves on the boards of directors for several technology companies, including Nortel Networks, ViaSat and Polycom.

Harold Brown, a former Secretary of Defense under President Jimmy Carter, and James Schlesinger, who has served as CIA director, defense secretary and energy secretary in the Carter and Nixon administrations, are two others that have ties to defense contractors. Brown, a partner of Warburg Pincus LLC, is a board member of Philip Morris Companies and a trustee of the Rand Corporation, which respectively had contracts worth $146 million and $83 million in 2002. Schlesinger, a senior adviser at Lehman Brothers, chairs the board of trustees of the Mitre Corp., a not-for-profit that provides research and development support for the government. Mitre had defense contracts worth $440 million in 2001 and $474 million in 2002.

Chris Williams is one of four registered lobbyists to serve on the board, and the only one to lobby for defense companies. Williams, who served as a special assistant for policy matters to Defense Secretary Rumsfeld after having been in a similar capacity for Sen. Trent Lott (R-Miss.), joined Johnston & Associates after leaving the Pentagon. Although the firm had represented Lockheed Martin prior to Williams’ arrival, the firm picked up two large defense contractors as clients once Williams was on board: Boeing, TRW and Northrop Grumman, for which the firm earned a total of more than $220,000. The firm lobbied exclusively on defense appropriations and related authorization bills for its new clients. Johnston & Associates is more often employed by energy companies; its founder, J. Bennett Johnston, is a former Democratic senator from Louisiana who chaired the Energy Committee.

None of the members with ties to defense contractors responded to requests for comment.

The board’s membership also contains other well known Washington hands, including some who are registered lobbyists. Richard V. Allen, a former Nixon and Reagan administration official, who is now a senior counselor to APCO Worldwide, registered as a lobbyist for Alliance Aircraft.

Former Congressional representative Tillie Fowler joined the law firm Holland & Knight in 2001. She served eight years in the U.S. House of Representatives where she was a member of several committees including the House Armed Services Committee and the Transportation Committee. In 2002 she lobbied for such clients as the Minnesota Department of Transportation and the American Plastics Council.

Thomas S. Foley is a partner at Akin, Gump, Strauss, Hauer & Feld law firm, which he joined in 2001. He was the U.S. ambassador to Japan from 1997 to 2001 and was the Speaker of the House of Representatives from 1989 to 1994, after being a representative since 1965. Foley is a registered lobbyist, but has no defense clients.

'The Prince of Darkness' Resigns

Employee Advocate – – March 28, 2003

Richard Perle has resigned as chairman of the Defense Policy Board, according to the Associated Press. He was known to many as "the Prince of Darkness."

Perle has been recently accused of inappropriately mixing business and politics.

Previous articles about Richard Perle:

War Plunder Blunder

War is Red for Some, Green for Others

War Bucks

Washington - Page 36