Thursday, August 30, 2007

Leaked: "Strikingly Negative" Iraq Report Leaked To Preempt White House Doc

Iraq has failed to meet all but three of 18 congressionally mandated benchmarks for political and military progress, according to a draft of a Government Accountability Office report. The document questions whether some aspects of a more positive assessment by the White House.

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Christian Zionist Promote Iran War To Bring About Armageddon

Israeli groups like AIPAC, and the US Christian right like groups like CUFI. Promote Iran War. These groups and many others are forming a voting block that has powerful connections in our war party government. Christian politicians like Ron Paul are often seen as not Zionist enough for these extreme but powerful influence groups.

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'Bin Laden' Options Trades Have Wall Street Whispering

The blogosphere and options trading desks have been rife with speculation about unusual options bets that some observers have dubbed "Bin Laden Trades," which are unusually large bets that the market will make a huge move in the next month.

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Bush Loses War on Terrorism; Begins War on Iran

Bush pimps a possible nuclear strike on Iran, though a panel of experts claim his "war on terrorism" is all but lost. Meanwhile, Col. Sam Gardiner tells CNN that the US military is already operating inside Iran. What Bush will not tell you is that the world has become a much more dangerous place because of his administration's incompetent and boneh

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Leaked US report stresses Iraq failures

The leaked Washington draft provides a harsh assessment of the effects of current US-led efforts to secure Baghdad. "While the Baghdad security plan was intended to reduce sectarian violence, US agencies differ on whether such violence has been reduced," it says. Although there have been fewer attacks against US forces, the number of attacks...

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Katrina and the White House, federal government, and FEMA brands

Two years after Katrina, the FEMA brand is still tainted (as is the brand of the White House and the entire federal government) by the relief efforts that took place after the hurricane. The question is, why?

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Rewritten surveillance law could give Bush more power for domestic wiretaps

The recently passed law which allows President Bush to continue wiretapping Americans' telephone calls overseas may allow for domestic spying as well, according to a new report commissioned by Congress.

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Homeland Security Expert Asks: What could we do with $456,278,478,000?

George Bush leaves his legacy: national debt, 43 milllion uninsured, and a war.What *could* he have done with all the money he allowed his friends to bill the U.S. taxpayer for, instead?

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US refuses all 'friendly fire' inquest requests

Inquests into "friendly fire" cases will never hear evidence in person from US military witnesses, the Ministry of Defense has disclosed.

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Union: Mexican Trucks Begin Crossing Border Saturday

Unsafe Mexican Trucks start crossing US Border on the busy Labor Day Weekend. These trucks do not have to meet US Highway standards!

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Audit Gives Iraq Leaders Failing Grade

U.S. government auditors are about to tell Congress that Iraqi leaders have failed to meet at least 13 of 18 benchmarks laid out to assess the effectiveness of President Bush's war strategy, a report the White House dismisses as "not news".

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The Great Iraq Swindle: War Profiteering 101

Great article on the swindling of the US taxpayers by corrupt contractors with gilded contracts to "rebuild" Iraq, and our inability to recoup any of our money regardless of how grossly negligent the contractors were.

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ABC censors Kucinich out of Debate, Poll Results, and Website AGAIN

Following last Sunday's Democratic presidential debate on ABC News' This Week with George Stephanopoulos, Dennis Kucinich's campaign asked ABC News to address issues it had with treatment Rep. Kucinich (D-Ohio) received both during the debate and afterward in ABC's online coverage.I linked the C&L blog because it had 2 links worth seeing

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US calls arrest of Iranians after Bush speech 'a regrettable incident'

BBC World News reported Wednesday that "an embarrassed American military has said it regrets that eight Iranians ... were arrested, handcuffed, and blindfolded by US soldiers in Baghdad." The US now acknowledges that the Iranians are engineers who were in Iraq to help rebuild the local electrical system.

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Fed Underestimated Debt Impact, Focused on Inflation

Policy makers have employed a range of tools since their last scheduled meeting to ease the credit crunch. They first injected the most funds into money markets since the aftermath of the Sept. 11, 2001, terrorist attacks, then cut the rate charged to banks for direct loans from the Fed.

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Ron Paul: Iran Attack in a Year?

Presidential candidate Ron Paul believes that an attack on Iran is highly likely within a year and that the Bush administration is simply waiting for the right opportunity

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Who Owns America???

Teamsters will ask court to block letting Mexican trucks into U.S.

The Teamsters Union says it'll ask a Federal Appeals Court to stop the Bush Administration from allowing Mexican trucks to carry cargo anywhere in the United States. The Union said today it's learned from the Transportation Department's Federal Motor Carrier Safety Administration that the first Mexican trucks would cross the border on Saturday...

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Bush Talks Of Iran's 'Murderous Activities' - Ignores His

In a speech designed to shore up American public opinion behind his increasingly unpopular strategy in Iraq, the president reserved his strongest words for the regime of President Mahmoud Ahmadinejad, which he accused of openly supporting violent forces within Iraq.

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Al-Sadr suspends militia activity in Iraq; Will not attack American forces

Shiite cleric Muqtada al-Sadr has ordered a six-month suspension of activities by his Mahdi Army militia in order to reorganize the force, and it will no longer attack U.S. and coalition troops.

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Bush Wants $50 Billion More for Iraq War on top of about $460 billion

The Washington Post reports that the money would be in addition to a $147 billion request that already is pending before Congress to pay for the wars in Iraq and Afghanistan. And the two requests together are also in addition to the $460 billion 2008 fiscal year request for defense spending.

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Has Bush Boxed Himself In?

By Pat Buchanan

08/29/07 "
Creators Syndicate" -- - As Americans anguish over how to extricate this country from Iraq without a disaster greater than what we now have, and without our friends suffering the fate of our friends in Cambodia and Vietnam, they had best brace themselves. This escalator is going up.

and his generals are laying out the case for a new war. And there has been no resistance offered either by a vacationing Congress or the major presidential candidates.

On CNN's "Late Edition" Sunday, Lt. Gen. Ray Odierno, No. 2 commander in Iraq, said, "It is clear to me that (the Iranians) have been stepping up their support" for enemy fighters in Iraq.

"They do it from providing weapons, ammunition, specifically mortars and explosively formed projectiles. ... They are conducting training within Iran of Iraqi extremists to come back here and fight the United States."

Maj. Gen. Rick Lynch said his troops were following 50 members of the Iranian Revolutionary Guard, who have been crossing the border and training fighters in Iraq. The State Department is about to declare the Revolutionary Guard a terrorist organization.

Earlier in August, President Bush directly charged Tehran with aiding Iraqi insurgents who are killing U.S. soldiers:

"I asked Ambassador Crocker to meet with Iranians inside Iraq ... to send the message that there will be consequences for ... people transporting, delivering EFPs, highly sophisticated IEDs, that kill American troops."

The EFPs are roadside bombs that penetrate Bradley Fighting Vehicles and Abrams tanks. They have taken the lives of scores of U.S. soldiers.

Whether Bush has made the decision to attack the al Quds training camps inside Iran, he has painted himself into a corner.

If he does not strike the camps, he will be mocked by the War Party as a weak commander in chief, too timid to use U.S. power to protect soldiers he sent into battle or to punish those killing them.

Thus, Bush must either announce that his diplomacy has worked, and attacks out of Iran have diminished or been halted, or he will have to explain why the Top Gun of the carrier Lincoln was too wimpish to do his duty by the soldiers he sent to fight.

Who is pushing for attacks on Iran? Israel and its lobby. Vice President Cheney. Sen. Joe Lieberman, who has been calling for air strikes on Al Quds camps for months. And a War Party facing lasting disgrace for having lied the country into an unnecessary war, and for having assured the American people it would be a "cakewalk."

The arguments for war on Iran are both strategic and political.

Israel is terrified Iran will end its nuclear monopoly in the Middle East and wants an all-out U.S. war on Iran to prevent it. The War Party fears Iran may acquire a nuclear weapon, which would inhibit U.S. freedom of action in the Gulf and convince the Arab states that the United States is yesterday and they must appease Iran or go nuclear themselves.

As for Bush and Cheney, if they go home without hitting Iran's nuclear sites, and Iran acquires a nuclear weapon, the Bush Doctrine will have been defied by the Ayatollah as well as Kim Jong-il, and their legacy will be a no-win war in Iraq.

The War Party is thus seeking an excuse to launch air strikes on Iran, as that would trigger Iranian counterstrikes on our forces. Then they will have their long-sought casus belli for U.S. strikes on Iran's nuclear facilities.

First, the al Quds camps, then Natanz, Isfahan and Bushewr.

Initially, Americans might cheer the bombing of Iran, and Congress would head for the tall grass. But as U.S. strikes would be an act of war, rallying the Iranians behind the failing regime of Mahmoud Ahmadinejad and igniting a long war the end of which we cannot see and the troops for which we do not have, there are powerful arguments against a new war.

Iran and the United States would both pay a hellish price, and Iran at least seems to recognize it. Both the Iraqi and Afghan governments say Iran is behaving as a good neighbor. There is evidence Tehran's nuclear program is faltering, or being curbed. Iran is said to be making concessions to U.N. inspectors.

Iran has released an American seized in response to our seizure of five Iranian "diplomats" in Iraq. Iran's ambassador to the United Nations, in a letter to the Washington Post, denies Iran is aiding the Iraqi insurgency and calls on the U.S. government to "proffer evidence" and "provide the list of Iranian agents who it alleges are operating in Iraq."

If there is a rush to war here, it is not on the part of Iran.

As Bush is preparing for war on Iran, if he has not already decided on war, where is Congress, which alone has the constitutional power to authorize a war?

Or has it given Bush and Cheney another blank check?

Wednesday, August 29, 2007

Bush Heads to Gulf Coast, Still Misleading on How Little He Sent to Rebuild

Less than $35 billion in federal funds actually available to rebuild the region. Most of the $114 billion Bush administration officials refer to was for the emergency response, not to help rebuild the region. Still the White house continues to mislead the public about our country's investment in rebuilding the Gulf Coast and New Orleans...

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Inflation crunch could hit world economies

Food prices have been rising through the year, and reduced harvests due to flooding and drought look to exaggerate the problem, setting potential problems with inflation just at the time when central banks are looking to cut interest rates to help troubled stock markets.

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Pot Growers Are New Target in "War on Terror"

John P. Walters, President Bush's drug czar, said of pot growers "[They're] violent criminal terrorists." and "[They] wouldn't hesitate to help other terrorists get into the country with the aim of causing mass casualties."

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CheneyBush's "Mercenary" Legions

Authoritarian rulers with private armies and spies, as history has shown, are dangerous to democracy. That's where America is at this juncture, and we're going to have to battle fiercely to claw our way back to some sort of governmental sanity and balance.

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More Investors Are Betting on Stock Market Doomsday Scenario

Not everyone on Wall Street is convinced that the worst is over. In fact, some investors are betting tens of millions of dollars that the market is headed for a selloff -- a major selloff.

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Who's profiting from the Iraq war?

In a few weeks, Gen. David Petraeus and the Bush administration will report to Congress on the progress of the U.S. military's troop surge in Iraq. But some of the war's winners are already clear: military contractors who supply everything from bodyguards to bombs, clean socks to ready-to-eat meals.

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CAIR: Media Cowers in Face of Islamist Threat

On August 24th, the Council on American-Islamic Relations (CAIR), issued a “News Release” trumpeting the role CAIR played in getting the Christian TV program “Live Prayer with Bill Keller” off the air in Tampa, Florida. It is troubling that a national broadcaster would terminate a program based on the demands of an Islamist hate group

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The airlines lied to Congress and the public

In 1999, the nation's airlines promised Congress they would revamp their operations and offer a “service commitment” that they dubbed "Customers First." In 2007, air travel is worse than ever. What happened?

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Fleischer blames Dems for Gonzales' mistakes

Ex White House press secretary Ari Fleischer thinks that the rotten Democrats are to blame for Alberto Gonzales' fall from grace. His comments are comical.

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Gonzales's Exit Gives Democrats Advantage in White House Probes

The departure of U.S. Attorney General Alberto Gonzales, while removing a political burden on President George W. Bush, gives congressional Democrats new power to expand investigations of White House scandals.

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Obstacles Keep Iraqi Refugees From U.S.

Despite a stepped-up commitment from the United States to take in Iraqis who are in danger because they worked for the military, few are signing up to go, officials say.

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Markets Mauled

Markets fell hard and wide Tuesday, as a combination of bad news and low volume reminded Wall Street of the uncertainty plaguing investors, despite the relative stability of the past few days.

While dropping throughout the day, the Dow Jones industrial average took an especially steep dive in the last hour of trading to close down 2.1%, or 280.28 points, to 13,041.85, with the Nasdaq Composite Index finishing down 2.4%, or 60.61 points, to 2,500.64, and the Standard & Poor’s 500 Index falling 2.4%, or 34.43 points, to 1,432.36.

All in all, it's the kind of day that might make adherents to the Goldilocks scenario--that the markets are "just right"--reconsider their belief in fairy tales.

“There was more bad news than good news,” said Jefferies analyst Art Hogan, in an understatement, adding that investors were reminded they’re not out of the woods yet.

Financials led the way after Merrill Lynch (nyse: MER - news - people ) published a report downgrading Bear Stearns (nyse: BSC - news - people ), Lehman Brothers (nyse: LEH - news - people ), and Citigroup (nyse: C - news - people ).

Hogan also noted Wall Street was also shaken by reports surrounding Barclays (nyse: BCS - news - people )’ exposure to credit issues (See "Barclays Sinks On Sachsen Worries").

Wall Street also extended its retreat on Tuesday as investors cautiously awaited minutes from the Federal Reserve's last meeting, hoping it would provide insight into whether it may cut rates.

Analysts said there was little news to send prices sharply lower. But the market's overall difficult mood since the turbulence of earlier in August, coupled with light volume, helped skew price swings—especially ahead of the Fed report.

Hogan argued the news was coupled with the Tuesday’s announcement from the Conference Board that its Consumer Confidence index slipped to 105.0 in August from 11.9 in July, spurred by falling home prices (See “Housing Hits Consumer Confidence”)

Economists expected a reading of 104.5.

Although the index dropped, Birinyi Associates research analyst Cleveland Rueckert argued instead that because the result beat expectations, he does not believe the announcement had too much of an influence on Tuesday’s movement.

“We haven’t had this kind of day in a while,” Hogan said. “And it’s not surprising with a low volume day in the summer.”

Rueckert looks to mid-September, when financial companies begin to release their quarterly earnings report, and “Wall Street gets a better idea of what’s going on and who is exposed to what.”

As previously noted, the Financial sector was hit hard as Lehman Brothers fell 6.0%, or $3.47, to $54.28, Bear Stearns dropped 3.4%, or $3.37, to $108.42, and Citigroup lowered 3.5%, or $1.65, to $46.14.

In the energy sector, Exxon Mobil (nyse: XOM - news - people ) fell 2.5%, or $2.12, to $83.00 and Chevron (nyse: CVX - news - people ) dropped 3.1%, or $2.70, to $84.30.

The industrials and materials sector also dropped, as Boeing (nyse: BA - news - people ) lowered 2.9%, or $2.89, to $95.65, Caterpillar (nyse: CAT - news - people ) dropped 2.4%, or $1.79, and $74.21, and Lockheed Martin (nyse: LMT - news - people ) tumbled 4.5%, or $4.62, to $97.79.

Brace yourself for the insolvency crunch

The liquidity crunch is not yet over: the insolvency crunch has hardly begun.

Man walking in front of FTSE graph screen
Repercussions will follow for the man on the street

Yes, investors are jumping back into the stock markets, hoping this is just another routine shake-out - much like February 2007, or May 2006 - before the rally resumes. The `buy-on-dips’ orthodoxy dies hard.

And yes, speculators have renewed their leveraged bets on the yen and Swiss franc carry trades, borrowing cheap in Tokyo and Zurich to play global assets. The core belief is that nothing has really changed, that the world economy is still in rude good health.

Be very careful. Interest rates in Europe and Asia are that much higher now, with delayed effects starting to bite hard. Japan’s economy has stalled to 0.1pc growth in Q2; the euro-zone has slowed to 0.3pc; and China’s refusal to import (by currency manipulation) makes it a drain on world demand. Above all, the credit bubble that perpetuated the rally of the last eighteen months beyond its natural life has definitively burst.

Credit spreads on the iTraxx Crossover (a good barometer of corporate bonds) have ballooned 180 basis points since February. The cost of borrowing for most firms in Europe and North America has jumped from circa 6.5pc to 8.3pc, if they can get it.

Many cannot. Germany’s Chamber of Industry told me yesterday that it had been flooded with distress calls from family Mittlestand firms unable to roll over credit lines. In Canada and Australia, junior mining finance has dried up almost entirely.

Global junk bond issuance has been frozen for two months. Fresh sales of collateralized debt obligations – the CDOs of subprime notoriety: a $1 trillion sold last year - have all but stopped. Banks have yet to off-load $300bn of debt from leveraged buy-out deals, forcing them to keep the liabilities on their books. They are all snake-bitten now.

The private equity buy-out premium – which pushed up the price/earnings ratio on the MSCI-600 of “median” stocks to a record high of 20 in May - has vanished. The P/E ratios on the DOW 30 big stocks are much lower – because they are too big even for the big cat predators, KKR and Carlysle – but they are not low, given the late stage of the cycle. In reality, an earnings bubble and ultra-cheap credit have flattered profits.

So no, the world has changed, dramatically. Whether this means a protracted global downturn and a “profits recession” depends on how quickly the central banks choose to respond, and how far they are willing to go.

Ben Bernanke is looking hawkish to me, given the shock of what happened on Monday when yields on 3-month US Treasury notes plunged at the fastest pace ever recorded, a panic flight to safety that no living trader had ever seen before.

Why? Because trust had collapsed to such a degree that players with a lot of cash no longer believed it safe to leave wealth in bank accounts, or the money market funds of brokerage companies - (exposed as they are to short-term commercial paper and subprime CDOs). This did not occur after 9/11, or in the heat of the October 1987 crash. Nor did was there such a banking panic in October 1929. (it hit in August 1931). If you think this is of no importance, or that this will pass swiftly, you have a strong nerve.

“When you have a run on the money markets like this, it is bound to spill over into the real economy,” said Albert Edwards, global strategist at Dresdner Kleinwort.

“We already thought there was a 40pc chance of a US recession before all this happened, but the risks are now much higher and don’t forget that rates on adjustable mortgages will keep rising until a peak next March, so the maximum pain will be in the second and third quarters of 2008,” he said

“There will be large bankruptcies, and liquidity is not going to help because too many people bet the farm at the top of the cycle, and they’re now insolvent. A lot more bodies are going to be floating to the surface before this is over,” he said.

The belief that Europe would somehow be insulated has been tested over the last two weeks. Two German banks have required bail-outs on subprime bets – Sachsen LB for Eu 17.3bn, IKB for Eu 8.1bn.

Alexander Stuhlmann, boss of WestLB, confessed that the German banking system was in a "not uncritical situation". Jochen Sanio, head of the German regulator BaFin, said a few days earlier that the country faced the worst banking crisis 1931.

Hence the continued actions of the European Central Bank, which has quietly injected 85bn euros in extra liquidity so far this week, almost as much as it did on the first day of emergency stimulus in early August.

“Banks are still thirsty for credit, and the spreads have been amazing. This is not business as usual at all,” said Julian Callow, chief Eurozone economist for Barclays Capital and an expert in the arcane field of central bank operations. (He used to work for the Bank of England.)

To clarify: the ECB allotted an extra Eu 45bn extra through a `weekly refi’ on Tuesday; and then Eu 40bn in a 3-month offer on Wednesday to stop the short-term commercial paper market seizing up.

What we know is that 146 banks bid for loans on Wednesday, some clearly in such distress that they were willing to pay up to 5pc interest – a full 1pc above the ECB’s benchmark rate.

Just like the dotcom bust: when the US sneezes, Europe catches… you know the rest.

In a warped sense, one has to admire the cool way that Americans – who save nothing, in aggregate – tapped into the vast savings pool of thrifty Germans to finance their speculative excesses, and then left the creditors holding a chunk of the subprime losses.

Was it sharp practice, in the same way that foreigners were recruited by Lloyds of London in 1986 and 1987 – before the impending asbestos losses were known – and place like cannon fodder on “spiral syndicates” to absorb crippling losses? (Lloyds denies this occurred).

I am endebted to Randall W.Forsyth from Barron’s for this delicious quote from a hedge-fund operator, recounting with disgust what happened this time in a letter to clients.

'Real money' (U.S. insurance companies, pension funds, etc.) accounts had stopped purchasing mezzanine tranches of U.S. subprime debt in late 2003 and [Wall Street] needed a mechanism that could enable them to 'mark up' these loans, package them opaquely, and EXPORT THE NEWLY PACKAGED RISK TO UNWITTING BUYERS IN ASIA AND CENTRAL EUROPE!!!!

"These CDOs were the only way to get rid of the riskiest tranches of subprime debt. Interestingly enough, these buyers (mainland Chinese banks, the Chinese Government, Taiwanese banks, Korean banks, German banks, French banks, U.K. banks) possess the 'excess' pools of liquidity around the globe. These pools are basically derived from two sources: 1) massive trade surpluses with the U.S. in U.S. dollars, 2) petrodollar recyclers. These two pools of excess capital are U.S. dollar-denominated and have had a virtually insatiable demand for U.S. dollar-denominated debt . . . until now.

More Iran news

President Ahmadinejad: Political might of Iraq's occupiers is braking up: "I truly declare that the political power of occupiers is on the decline and the region will witness the emergence of a big power," underlined the president. "We are ready to help restore security of the region through collective cooperation with our regional friends and Saudi Arabia," he pointed out.

Bush warns Iran over insurgents : In a speech to US war veterans in Reno, Nevada, Mr Bush renewed charges that Tehran has provided training and weapons for extremists in Iraq. "The Iranian regime must halt these actions," he said.

Bush warns of 'holocaust' if Iran gets nukes : US President George W Bush warned today that letting Iran acquire atomic weapons risked putting the Middle East 'under the shadow of a nuclear holocaust.'

Pat Buchanan: Democrats will fall in line with 'popular' war on Iran: "They're laying down a predicate for military strikes on the al-Quds camps inside Iran. ... And I think then they'd go for the nuclear sites. "

Study: US preparing 'massive' military attack against Iran: The United States has the capacity for and may be prepared to launch without warning a massive assault on Iranian uranium enrichment facilities, as well as government buildings and infrastructure, using long-range bombers and missiles, according to a new analysis.

Ahmadinejad: Iran to give crushing response to any possible hostile actions: He went on to say that Iraqi occupiers do not favor unity among regional nations and want to pit them against one another so as to continue their presence in Iraq.

Iran 'resolves' plutonium issue : Iran has resolved questions posed by the UN's nuclear watchdog about its plutonium experiments, Tehran says.

Tuesday, August 28, 2007

Washington Times acknowledges reckless GOP spending

This morning, the Washington Times may have shocked its conservative readership by pointing out that Republicans, more so than Democrats, are responsible for today's budget mess.

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Iran To Invade Iraq

Iranian President Says Its Time For Iranian Rule In Iraq

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Iraqi refugees are 'forgotten people': World Vision

"The US government does not want to recognize them. The European Union wants to keep quiet on it," and the refugees are also a sensitive matter for the Jordanians, Dean Hirsch, World Vision's international president, told AFP.

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The Fed's Subprime "Solution"

Q. Why does the Fed come to the rescue? A. Because "while the risks inherent in the business of lending and borrowing should be finally borne by the public, the profits of that line of work should mainly accrue to the lenders and borrowers." In other words, the Fed works for the banks.

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President Ahmadinejad Says Iran Ready to Fill Power Vacuum in Iraq

TEHRAN, Iran — President Mahmoud Ahmadinejad warned Tuesday that a power vacuum is imminent in Iraq and said that Iran was ready to help fill the gap.

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Letterman: Gonzales stepping down but 'can't recall' why

The Alberto Gonzales resignation provided the inevitable subject of David Letterman's top ten list -- and a good bit of quip fodder for his opening monologue -- on Monday evening's installment of CBS's Late Show.

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Congressman wants ISPs to be Copyright Police

With warrentless wiretapping sweeping the US, a leading congressman is proposing similar measures for the Internet. This isn’t an attempt at ‘fighting terror’ but instead a new measure to reduce so-called ‘piracy’ by making the ISPs the police force.

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Gonzales' replacement - there won't be any nominee.

What Bush and Rove managed to do is to "set up" congress yet again. Not only will there never be a confirmation hearing for a new DOJ head, there won't even be a nominee. Why would Bush need one? His dream candidate is already in place.

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1 million Shiites ordered out of Karbala

U.S., Iraqi forces kill 33 militants in heavy fighting in holy city

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Gonzales Goes But Investigation Must Continue

Only a continued inquiry into the lawlessness of the soon-to-be-former Attorney General will achieve what is the essential purpose of this Congress: the restoring of the rule of law to a country deeply damaged by petty little men who chose personal loyalties and political expediency over their duty to the Republic.

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Sugar the other White Drug

Bush Gets Away with Lies, Lies and More Lies in History-Illiterate America

George Bush and other Iraq War supporters have argued that if we withdraw from Iraq the result will be like the killing fields of Cambodia -- an odd comparison considering that the US has direct responsibility for that holocaust.

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How many Bush administration officials does it take to change a light bulb?

The answer is seven:

* One to deny that a light bulb needs to be replaced.

* One to attack and question the patriotism of
anyone who has questions about the light bulb.

* One to blame the previous administration for
the need of a new light bulb.

* One to arrange the invasion of a country rumored
to have a secret stockpile of light bulbs.

* One to get together with Vice President Cheney
and figure out how to overpay Halliburton one
million dollars for each light bulb.

* One to arrange a photo-op session showing
Bush changing the light bulb while dressed in a
flight suit and wrapped in an American flag.

* And finally, one to explain to Bush the difference
between screwing a light bulb and screwing the
country. [anon]

Why Bush stands by his incompetent twit friends

The more radioactive his aides become, the more Bush embraces them.

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US ambassador to UN: Middle East turmoil could cause world war

"Zalmay Khalilzad told the daily Die Presse the Middle East was now so disordered that it had the potential to inflame the world as Europe did during the first half of the 20th century," Reuters reports.

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Edwards wants law against ''Brownies''

John Edwards said at a Hurricane Katrina conference he would propose what he called "Brownie's Law" requiring that qualified people, not political hacks, lead key federal agencies.

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The Pot-Pushing "Terrorists" Under Your Bed

"The Bush administration barely waited for the smoke to clear at "Ground Zero" before trotting out a yearlong, multimillion dollar ad campaign alleging that US pot smokers financially sponsor international terrorism. Not surprisingly, after the initial "shock and awe" of the ads wore off, viewers resoundingly rejected the feds' dubious charge."

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The Nation -- Gonzales Goes But Investigation Must Continue

"Alberto Gonzales was the 'Enabler General' for the imperial Bush presidency," said People For the American Way President emeritus Ralph G. Neas upon learning of the Attorney General's decision. "He undermined the Constitution, made a mockery of the rule of law, and turned the Justice Department into an arm of the Bush Administration's political ..

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Bush appointed high ranking defense official under investigation

Yep another one... Deputy Undersecretary of Defense Paul Brinkley, a former Silicon Valley executive who currently heads an economic task force in Baghdad, is being accused by Defense Department investigators of mismanaging government money, public drunkenness and sexual harassment, the Los Angeles Times reported Monday.

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CNN: Bush Plans To Install High School Friend Clay Johnson At DHS

This morning, CNNreported that “very senior level sources” inside the White House say that Homeland Security chief Michael Chertoff will replace Alberto Gonzales. Additionally, these sources say Chertoff will be replaced at Homeland Security by Clay Johnson III, the Deputy Director for OMB. Johnson went to both prep school and college with Bush.

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About-face on Iran coming?

A new US strategy for victory in Iraq may be in the works

By Hassan Nafaa

08/27/07 "
Al-Ahram" -- - That the US is knee-deep trouble in Iraq is hardly in dispute. Few inside or outside the US contest that fact or doubt the reasons that led to it. And yet, some still argue that the whole thing is little more than correctable "mistakes" by a reckless administration. Others wonder if a face-saving exit is still possible. But at least a few maintain that a "strategic victory" is attainable in Iraq.

For a long time, the current US administration refused even to admit committing mistakes in Iraq. For a long time, it maintained that victory was around the corner. The admission that a real problem exists came hesitantly and late. It came only after the Baker-Hamilton Commission issued its well-known report last year. Even then, the current administration kept arguing that the problems it was facing in Iraq were no more than "snags" attributed to "tactical errors" that can be corrected and that a complete and unambiguous victory was not to be ruled out. In short, the US administration rejected the prognosis offered by the Commission and went on doing things its own way.

The commission said that the situation in Iraq would get worse unless a major policy change occurred. It reviewed a number of options, but ruled them all out because of concern for the US reputation and Iraq's stability. Those options included: quick withdrawal from Iraq, maintaining the current policies with no change, increasing the number of troops, or dividing Iraq into three parts. After excluding those options, the report suggested a new policy based on two components. The first component was external, involving a "new diplomatic offensive" to rally international support and help Iraq.

The second component was internal, focusing on helping Iraq help itself. The commission made 78 recommendations, suggesting that the US launch a diplomatic offensive in an attempt to reassure the world that the US was not after Iraq's oil and didn't want to have military bases in that country against the wishes of its people.

It made two main conclusions. One was that the US couldn't get out of the Iraqi morass without the help of others. The second was that the Middle East crises were interlinked, and the US needed to address all of them simultaneously. The report urged the current administration to build bridges with both Syria and Iran and make a renewed bid to resolve the Arab-Israeli conflict.

But the US administration went for the exact opposite. Instead of gradually reducing its fighting troops and redeploying them outside turbulent Iraqi towns, the US administration decided to increase troops and send them into more battles inside turbulent areas in the hope of quashing or at least weakening the resistance.

Instead of courting Iran and Syria, the US administration decided to tighten sanctions against them and isolate them internationally. And instead of doing more to settle the Arab-Israeli conflict, a matter that would have required serious pressures on Israel and attempts to unify the Palestinian position, the US administration decided to alienate Hamas and impose a stricter blockade on the Palestinian people. The US administration blocked all attempts to unify Palestinian factions and encouraged Israel to adopt hard-line and belligerent policies.

This approach, which hardly differed from earlier US policies, deepened the dilemma of the US administration. As a result, the security and military situation in Iraq got worse. And the Lebanon war last year didn't, as some hoped, weaken "the axis of the extremists" in the region. On the contrary, Iran, Syria, Hizbullah, Hamas, and Jihad emerged stronger, while pro- US forces looked hapless and lame. Consequently, the US administration found itself in a more awkward place than it was at the time the Baker-Hamilton Commission was issued two years ago. All the US administration did was waste time and money to no avail.

Because the US administration knows that time is running out, it has to do one of two things. Either it accepts defeat and pulls out immediately, which would damage the US standing as a superpower. Or it escalates the confrontation through an all-out attack on the "axis of the extremists." The latter option cannot be ruled out, considering how rightwing and dogmatic this administration is and how inept is the man who leads it. The only problem is that this second option is too perilous, for the prospects of a decisive victory are nil in the long run.

Some members of the neoconservative US elite, who haven't yet despaired of winning the war in Iraq, are now busy looking for a third option. Among the barrage of ideas that surfaced of late, the views of William S Lind are interesting. Lind is the director of the Centre for Cultural Conservatism at the Free Congress Foundation. He summed up his views on the Iraqi debacle in an article published 30 July in The American Conservative under the title, "How to win in Iraq".

In that article, Lind notes that the US administration still defines victory as it did at the war's outset: an Iraq that is an American satellite, friendly to Israel, happy to provide the US with a limitless supply of oil and vast military bases from which American forces can dominate the region. None of these objectives, he argues, are now attainable. Lind believes that the attempts to quell urban disturbances in Iraq are based on the wrong assumptions. He argues that the war can still be won on a strategic level, not through "small tactical gains." Lind suggests that the new US strategy must employ what the British military theorist Basil Liddell-Hart called an "indirect approach."

The threat facing the US is not coming from any state, but from a collection of groups using non-conventional methods commonly labelled "terrorism", Lind argues. Such groups can only flourish in situations where governments are weak. He calls for a new strategy of three elements to win the war on a "strategic" level.

The first element is to engage Iran in a rapprochement, just as the US did with China in the early 1970s. At the time, China was creating more than one Vietnam in order to sap the US power. Likewise, the groups hostile to the US are trying to create more than one Iraq in order to baffle the Americans. Lind believes that it would be hard to undermine such groups without having a strong government in Iraq, which requires rapprochement with Iran. He admits that pro-Iranian Shiites may end up dominating the Iraqi government, but that should not be a problem so long as a strong Iraqi state evolves.

The second element of Lind's strategy is to allow the Sadr group, which is popular in Iraqi streets, to achieve its full political potential. The US will have to pay a price for that, such as giving up the prospect of military bases in Iraq. So far, the US has been trying to suppress the Sadr group while favouring unpopular, pro-American groups. This approach, Lind says, has weakened successive governments and reduced their ability to control the situation on the ground. Lind admits there is no guarantee Al-Sadr would be able to form a strong Iraqi government, but the chance is worth taking. The US administration, he says, must allow Al-Sadr, or anyone who can, to establish a strong government in Iraq.

The third element of the strategy is to withdraw all US forces within 12-18 months. This move would provide enough time for Al-Sadr or other parties to put together a government. This wouldn't be the withdrawal of a defeated army, Lind argues, but a step toward strategic victory. Withdrawal would be good for the army and for the US public, he argues.

The above strategy may exacerbate the Sunni- Shiite divisions not just in Iraq but across the region, but Lind is not worried about that. In fact, he believes those divisions might prove beneficial to the new US strategy in the region.

These are quite disturbing proposals. Lind's ideas entail certain risks to the Arab world and Iran. Admittedly, Tehran may be temporarily pleased to see a friendly government in Iraq, but the cost may prove too high. The US is likely to use Shiite-Sunni divisions to turn Sunni Arab countries against Iran. The main beneficiary of Lind's proposed strategy would be Israel and the US. The implications for the Sunnis and the Shiites are frightening. It seems that the US is heading toward a dual containment policy of both Shiite fundamentalism and Sunni Wahhabism. So perhaps this is time for Shias and Sunnis, as well as Arabs and Iranians, to sit together and talk.

The Great Iraq Swindle

How Bush Allowed an Army of For-Profit Contractors to Invade the U.S. Treasury

By Rolling Stone Magazine
Issue 1034

08/27/07 "
Rolling Stone" --- Aug 23, 2007 -- - How is it done? How do you screw the taxpayer for millions, get away with it and then ride off into the sunset with one middle finger extended, the other wrapped around a chilled martini? Ask Earnest O. Robbins -- he knows all about being a successful contractor in Iraq.

You start off as a well-connected bureaucrat: in this case, as an Air Force civil engineer, a post from which Robbins was responsible for overseeing 70,000 servicemen and contractors, with an annual budget of $8 billion. You serve with distinction for thirty-four years, becoming such a military all-star that the Air Force frequently sends you to the Hill to testify before Congress -- until one day in the summer of 2003, when you retire to take a job as an executive for Parsons, a private construction company looking to do work in Iraq.

Now you can finally move out of your dull government housing on Bolling Air Force Base and get your wife that dream home you've been promising her all these years. The place on Park Street in Dunn Loring, Virginia, looks pretty good -- four bedrooms, fireplace, garage, 2,900 square feet, a nice starter home in a high-end neighborhood full of spooks, think-tankers and ex-apparatchiks moved on to the nest-egg phase of their faceless careers. On October 20th, 2003, you close the deal for $775,000 and start living that private-sector good life.

A few months later, in March 2004, your company magically wins a contract from the Coalition Provisional Authority in Iraq to design and build the Baghdad Police College, a facility that's supposed to house and train at least 4,000 police recruits. But two years and $72 million later, you deliver not a functioning police academy but one of the great engineering clusterfucks of all time, a practically useless pile of rubble so badly constructed that its walls and ceilings are literally caked in shit and piss, a result of subpar plumbing in the upper floors.

You've done such a terrible job, in fact, that when auditors from the Special Inspector General for Iraq Reconstruction visit the college in the summer of 2006, their report sounds like something out of one of the Saw movies: "We witnessed a light fixture so full of diluted urine and feces that it would not operate," they write, adding that "the urine was so pervasive that it had permanently stained the ceiling tiles" and that "during our visit, a substance dripped from the ceiling onto an assessment team member's shirt." The final report helpfully includes a photo of a sloppy brown splotch on the outstretched arm of the unlucky auditor.

When Congress gets wind of the fias­co, a few members on the House Oversight Committee demand a hearing. To placate them, your company decides to send you to the Hill -- after all, you're a former Air Force major general who used to oversee this kind of contracting operation for the government. So you take your twenty-minute ride in from the suburbs, sit down before the learned gentlemen of the committee and promptly get asked by an irritatingly eager Maryland congressman named Chris Van Hollen how you managed to spend $72 million on a pile of shit.

You blink. Fuck if you know. "I have some conjecture, but that's all it would be" is your deadpan answer.

The room twitters in amazement. It's hard not to applaud the balls of a man who walks into Congress short $72 million in taxpayer money and offers to guess where it all might have gone.

Next thing you know, the congressman is asking you about your company's compensation. Touchy subject -- you've got a "cost-plus" contract, which means you're guaranteed a base-line profit of three percent of your total costs on the deal. The more you spend, the more you make -- and you certainly spent a hell of a lot. But before this milk-faced congressman can even think about suggesting that you give these millions back, you've got to cut him off. "So you won't voluntarily look at this," Van Hollen is mumbling, "and say, given what has happened in this project . . . "

"No, sir, I will not," you snap.

". . . 'We will return the profits.' . . ."

"No, sir, I will not," you repeat.

Your testimony over, you wait out the rest of the hearing, go home, take a bath in one of your four bathrooms, jump into bed with the little woman. . . . A year later, Iraq is still in flames, and your president's administration is safely focused on reclaiming $485 million in aid money from a bunch of toothless black survivors of Hurricane Katrina. But the house you bought for $775K is now ­assessed at $929,974, and you're sure as hell not giving it back to anyone.

"Yeah, I don't know what I expected him to say," Van Hollen says now about the way Robbins responded to being asked to give the money back. "It just shows the contempt they have for us, for the taxpayer, for everything."

Operation Iraqi Freedom, it turns out, was never a war against Saddam ­Hussein's Iraq. It was an invasion of the federal budget, and no occupying force in history has ever been this efficient. George W. Bush's war in the Mesopotamian desert was an experiment of sorts, a crude first take at his vision of a fully privatized American government. In Iraq the lines between essential government services and for-profit enterprises have been blurred to the point of absurdity -- to the point where wounded soldiers have to pay retail prices for fresh underwear, where modern-day chattel are imported from the Third World at slave wages to peel the potatoes we once assigned to grunts in KP, where private companies are guaranteed huge profits no matter how badly they fuck things up.

And just maybe, reviewing this appalling history of invoicing orgies and million-dollar boondoggles, it's not so far-fetched to think that this is the way someone up there would like things run all over -- not just in Iraq but in Iowa, too, with the state police working for Corrections Corporation of America, and DHL with the contract to deliver every Christmas card. And why not? What the Bush administration has created in Iraq is a sort of paradise of perverted capitalism, where revenues are forcibly extracted from the customer by the state, and obscene profits are handed out not by the market but by an unaccountable government bureauc­racy. This is the triumphant culmination of two centuries of flawed white-people thinking, a preposterous mix of authoritarian socialism and laissez-faire profit­eering, with all the worst aspects of both ideologies rolled up into one pointless, supremely idiotic military adventure -- American men and women dying by the thousands, so that Karl Marx and Adam Smith can blow each other in a Middle Eastern glory hole.

It was an awful idea, perhaps the worst America has ever tried on foreign soil. But if you were in on it, it was great work while it lasted. Since time immemorial, the distribution of government largesse had followed a staid, paper-laden procedure in which the federal government would post the details of a contract in periodicals like Commerce Business Daily or, more ­recently, on the FedBizOpps Web site. Competitive bids were solicited and contracts were awarded in accordance with the labyrinthine print of the U.S. Code, a straightforward system that worked well enough before the Bush years that, as one lawyer puts it, you could "count the number of cases of criminal fraud on the fingers of one hand."

There were exceptions to the rule, of course -- emergencies that required immediate awards, contracts where there was only one available source of materials or labor, classified deals that involved national security. What no one knew at the beginning of the war was that the Bush administration had essentially decided to treat the entire Iraqi theater as an exception to the rules. All you had to do was get to Iraq and the game was on.

But getting there wasn't easy. To travel to Iraq, would-be contractors needed permission from the Bush administration, which was far from blind in its appraisal of applicants. In a much-ballyhooed example of favoritism, the White House originally installed a clown named Jim O'Beirne at the relevant evaluation desk in the Department of Defense. O'Beirne proved to be a classic Bush villain, a moron's moron who judged applicants not on their Arabic skills or their relevant expertise but on their Republican bona fides; he sent a twenty-four-year-old who had never worked in finance to manage the reopening of the Iraqi stock exchange, and appointed a recent graduate of an evangelical university for home-schooled kids who had no accounting experience to manage Iraq's $13 billion budget. James K. Haveman, who had served as Michigan's community-health director under a GOP governor, was put in charge of rehabilitating Iraq's health-care system and decided that what this war-ravaged, malnourished, sanitation-deficient country most urgently needed was . . . an anti-smoking campaign.

Town-selectmen types like Haveman weren't the only people who got passes to enter Iraq in the first few years. The administration also greenlighted brash, modern-day forty-niners like Scott Custer and Mike Battles, a pair of ex-Army officers and bottom-rank Republican pols (Battles had run for Congress in Rhode Island and had been a Fox News commentator) who had decided to form a security company called Custer Battles and make it big in Iraq. "Battles knew some people from his congres­sional run, and that's how they got there," says Alan Grayson, an attorney who led a whistle-blower lawsuit against the pair for defrauding the government.

Before coming to Iraq, Custer Battles hadn't done even a million dollars in business. The company's own Web site brags that Battles had to borrow cab fare from Jordan to Iraq and arrived in Baghdad with less than $500 in his pocket. But he had good timing, arriving just as a security contract for Baghdad International Airport was being "put up" for bid. The company site raves that Custer spent "three sleepless nights" penning an offer that impressed the CPA enough to hand the partners $2 million in cash, which Battles promptly stuffed into a duffel bag and drove to deposit in a Lebanese bank.

Custer Battles had lucked into a sort of Willy Wonka's paradise for contractors, where a small pool of Republican-friendly businessmen would basically hang around the Green Zone waiting for a contracting agency to come up with a work order. In the early days of the war, the idea of "competition" was a farce, with deals handed out so quickly that there was no possibility of making rational or fairly priced estimates. According to those familiar with the process, contracting agencies would request phony "bids" from several contractors, even though the winner had been picked in advance. "The losers would play ball because they knew that eventually it would be their turn to be the winner," says Grayson.

To make such deals legal, someone in the military would simply sign a piece of paper invoking an exception. "I know one guy whose business was buying ­weapons on the black market for contractors," says Pratap Chatterjee, a writer who has spent months in the Mideast researching a forthcoming book on Iraq contracts. "It's illegal -- but he got military people to sign papers allowing him to do it."

The system not only had the advantage of eliminating red tape in a war zone, it also encouraged the "entrepreneurship" of patriots like Custer and Battles, who went from bumming cab fare to doing $100 million in government contracts practically overnight. And what business they did! The bid that Custer claimed to have spent "three sleepless nights" putting together was later described by Col. Richard Ballard, then the inspector general of the Army, as looking "like something that you and I would write over a bottle of vodka, complete with all the spelling and syntax errors and annexes to be filled in later." The two simply "presented it the next day and then got awarded about a $15 million contract."

The deal charged Custer Battles with the responsibility to perform airport ­security for civilian flights. But there were never any civilian flights into Baghdad's airport during the life of their contract, so the CPA gave them a job managing an airport checkpoint, which they failed miserably. They were also given scads of money to buy expensive X-ray equipment and set up an advanced canine bomb-sniffing system, but they never bought the equipment. As for the dog, Ballard reported, "I eventually saw one dog. The dog did not appear to be a certified, trained dog." When the dog was brought to the checkpoint, he added, it would lie down and "refuse to sniff the vehicles" -- as outstanding a metaphor for U.S. contractor performance in Iraq as has yet been produced.

Like most contractors, Custer Battles was on a cost-plus arrangement, which means its profits were guaranteed to rise with its spending. But according to testimony by officials and former employees, the partners also charged the government millions by making out phony invoices to shell companies they controlled. In another stroke of genius, they found a bunch of abandoned Iraqi Airways forklifts on airport property, repainted them to disguise the company markings and billed them to U.S. tax­payers as new equipment. Every time they scratched their asses, they earned; there was so much money around for contractors, officials literally used $100,000 wads of cash as toys. "Yes -- $100 bills in plastic wrap," Frank Willis, a former CPA official, acknowledged in Senate testimony about Custer Battles. "We played football with the plastic-wrapped bricks for a little while."

The Custer Battles show only ended when the pair left a spreadsheet behind after a meeting with CPA officials -- a spreadsheet that scrupulously detailed the pair's phony invoicing. "It was the worst case of fraud I've ever seen, hands down," says Grayson. "But it's also got to be the first instance in history of a defendant leaving behind a spreadsheet full of evidence of the crime."

But even being the clumsiest war profit­eers of all time was not enough to bring swift justice upon the heads of Mr. Custer and Mr. Battles -- and this is where the story of America's reconstruction effort gets really interesting. The Bush administration not only refused to prosecute the pair -- it actually tried to stop a lawsuit filed against the contractors by whistle-blowers hoping to recover the stolen money. The administration argued that Custer Battles could not be found guilty of defrauding the U.S. government because the CPA was not part of the U.S. government. When the lawsuit went forward despite the administration's objections, Custer and Battles mounted a defense that recalled Nuremberg and Lt. Calley, arguing that they could not be guilty of theft since it was done with the government's approval.

The jury disagreed, finding Custer Battles guilty of ripping off taxpayers. But the verdict was set aside by T.S. Ellis III, a federal judge who cited the administration's "the CPA is not us" argument. The very fact that private contractors, aided by the government itself, could evade conviction for what even Ellis, a Reagan-appointed judge, called "significant" evidence of fraud, says everything you need to know about the true nature of the war we are fighting in Iraq. Is it ­really possible to bilk American taxpayers for repainted forklifts stolen from Iraqi Airways and claim that you were just following orders? It is, when your commander in chief is George W. Bush. font size="3">There isn't a brazen, two -bit, purse-snatching money caper you can think of that didn't happen at least 10,000 times with your tax dollars in Iraq. At the very outset of the occupation, when L. Paul Bremer was installed as head of the CPA, one of his first brilliant ideas for managing the country was to have $12 billion in cash flown into Baghdad on huge wooden pallets and stored in palaces and government buildings. To pay contractors, he'd have agents go to the various stashes -- a pile of $200 million in one of Saddam's former palaces was watched by a single soldier, who left the key to the vault in a backpack on his desk when he went out to lunch -- withdraw the money, then crisscross the country to pay the bills. When desperate auditors later tried to trace the paths of the money, one agent could account for only $6,306,836 of some $23 million he'd withdrawn. Bremer's office "acknowledged not having any supporting documentation" for $25 million given to a different agent. A ministry that claimed to have paid 8,206 guards was able to document payouts to only 602. An agent who was told by auditors that he still owed $1,878,870 magically produced exactly that amount, which, as the auditors dryly noted, "suggests that the agent had a reserve of cash."

In short, some $8.8 billion of the $12 billion proved impossible to find. "Who in their right mind would send 360 tons of cash into a war zone?" asked Rep. Henry Waxman, chairman of the House Oversight Committee. "But that's exactly what our government did."

Because contractors were paid on cost-plus arrangements, they had a powerful incentive to spend to the hilt. The undisputed master of milking the system is KBR, the former Halliburton subsidiary so ubiquitous in Iraq that soldiers even encounter its customer-survey sheets in outhouses. The company has been exposed by whistle-blowers in numerous Senate hearings for everything from double-charging taxpayers for $617,000 worth of sodas to overcharging the government 600 percent for fuel shipments. When things went wrong, KBR simply scrapped expensive gear: The company dumped 50,000 pounds of nails in the desert because they were too short, and left the Army no choice but to set fire to a supply truck that had a flat tire. "They did not have the proper wrench to change the tire," an Iraq vet named Richard Murphy told investigators, "so the decision was made to torch the truck."

In perhaps the ultimate example of military capitalism, KBR reportedly ran convoys of empty trucks back and forth across the insurgent-laden desert, pointlessly risking the lives of soldiers and drivers so the company could charge the taxpayer for its phantom deliveries. Truckers for KBR, knowing full well that the trips were bullshit, derisively referred to their cargo as "sailboat fuel."

In Fallujah, where the company was paid based on how many soldiers used the base rec center, KBR supervisors ordered employees to juke the head count by taking an hourly tally of every soldier in the facility. "They were counting the same soldier five, six, seven times," says Linda Warren, a former postal worker who was employed by KBR in Fallujah. "I was even directed to count every empty bottle of water left behind in the facility as though they were troops who had been there."

Yet for all the money KBR charged taxpayers for the rec center, it didn't provide much in the way of services to the soldiers engaged in the heaviest fighting of the war. When Warren ordered a karaoke machine, the company gave her a cardboard box stuffed with jumbled-up electronic components. "We had to borrow laptops from the troops to set up a music night," says Warren, who had a son serving in Fallujah at the time. "These boys needed R&R more than anything, but the company wouldn't spend a dime." (KBR refused requests for an interview, but has denied that it inflated troop counts or committed other wrongdoing in Iraq.)

One of the most dependable methods for burning taxpayer funds was simply to do nothing. After securing a contract in Iraq, companies would mobilize their teams, rush them into the war zone and then wait, citing the security situation or delayed paperwork -- all the while charging the government for housing, meals and other expenses. Last year, a government audit of twelve major contracts awarded to KBR, Parsons and other companies found that idle time often accounted for more than half of a contract's total costs. In one deal awarded to KBR, the company's "indirect" administrative costs were $52.7 million, and its direct costs -- the costs associated with the ­actual job -- were only $13.4 million.

Companies jacked up the costs even higher by hiring out layers of subcontractors to do their work for them. In some cases, each subcontractor had its own cost-plus arrangement. "We called those 'cascading contracts,' " says Rep. Van Hollen. "Each subcontractor piles on a lot of costs, and eventually they would snowball into a huge payout. It was a green light for waste."

In March 2004, Parsons -- the firm represented by Earnest O. Robbins -- was given nearly $1 million to build a fire station in Ainkawa, a small Christian community in one of the safest parts of Iraq. Parsons subcontracted the design to a British company called TPS Consult and the construction to a California firm called Innovative Technical Solutions Inc. ITSI, in turn, hired an Iraqi outfit called Zozik to do the actual labor.

A year and a half later, government ­auditors visited the site and found that the fire station was less than half finished. What little had been built was marred by serious design flaws, including concrete columns so shoddily constructed that they were riddled with holes that looked like "honeycombing." But getting the fuck-ups fixed proved problematic. The auditors "made a request that was sent to the Army Corps, which delivered it to Parsons, who then asked ITSI, which asked TPS Consult to check on the work done by Zozik," writes Chatterjee, who describes the mess in his forthcoming book, Baghdad Bonanza. The multiple layers of subcontractors made it almost impossible to resolve the issue -- and every day the delays dragged on meant more money for the companies.

Sometimes the government simply handed out money to companies it made up out of thin air. In 2006, the Army Corps of Engineers found itself unable to award contracts by the September deadline imposed by Congress, meaning it would have to "de-obligate" the money and return it to the government. Rather than suffer that awful fate, the corps obligated $362 million -- spread out over ninety-six different contracts -- to "Dummy Vendor." In their report on the mess, auditors noted that money to nobody "does not constitute proper obligations."

But even obligating money to no one was better than what sometimes happened in Iraq: handing out U.S. funds to the enemy. Since the beginning of the war, rumors have abounded about contractors paying protection money to insurgents to avoid attacks. No less an authority than Ahmed Chalabi, the head of the Iraqi National Congress, claimed that such payoffs are a "significant source" of income for Al Qaeda. Moreover, when things go missing in Iraq -- like bricks of $100 bills, or weapons, or trucks -- it is a fair assumption that some of the wayward booty ends up in the wrong hands. In July, a federal audit found that 190,000 weapons are missing in Iraq -- nearly one out of every three arms supplied by the United States. "These weapons almost certainly ended up on the black market, where they are repurchased by insurgents," says Chatterjee. font size="3">For all the creative ways that contractors came up with to waste, mismanage and steal public money in Iraq, the standard remained good old-fashioned fucking up. Take the case of the Basra Children's Hospital, a much-ballyhooed "do-gooder" project championed by Laura Bush and Condi Rice. This was exactly the sort of grandstanding, self-serving, indulgent and ultimately useless project that tended to get the go-ahead under reconstruction. Like the expensive telephone-based disease-notification database approved for use in hospitals without telephones, or the natural-gas-powered electricity turbines green­lighted for installation in a country without ready sources of natural gas, the Basra Children's Hospital was a state-of-the-art medical facility set to be built in a town without safe drinking water. "Why build a hospital for kids, when the kids have no clean water?" said Rep. Jim Kolbe, a Republican from Arizona.

Bechtel was given $50 million to build the hospital -- but a year later, with the price tag soaring to $169 million, the company was pulled off the project without a single bed being ready for use. The government was unfazed: Bechtel, explained USAID spokesman David Snider, was "under a 'term contract,' which means their job is over when their money ends."

Their job is over when their money ends. When I call Snider to clarify this amazing statement, he declines to discuss the matter further. But if you look over the history of the Iraqi reconstruction ­effort, you will find versions of this excuse every­where. When Custer Battles was caught delivering broken trucks to the Army, a military official says the company told him, "We were only told we had to deliver the trucks. The contract doesn't say they had to work."

Such excuses speak to a monstrous vacuum of patriotism; it would be hard to imagine contractors being so blithely disinterested in results during World War II, where every wasted dollar might mean another American boy dead from gangrene in the Ardennes. But the rampant waste of money and resources also suggests a widespread contempt for the ostensible "purpose" of our presence in Iraq. Asked to cast a vote for the war effort, contractors responded by swiping everything they could get their hands on -- and the administration's acquiescence in their thievery suggests that it, too, saw making a buck as the true mission of the war. Two witnesses scheduled to testify before Congress against Custer Battles ultimately declined not only because they had received death threats but because they, too, were contractors and feared that they would be shut out of future government deals. To repeat: Witnesses were afraid to testify in an effort to ­recover government funds because they feared reprisal from the government.

The Bush administration's lack of interest in recovering stolen funds is one of the great scandals of the war. The White House has failed to litigate a single case against a contractor under the False Claims Act and has not sued anybody for breach of contract. It even declined to join in a lawsuit filed by whistle-blowers who are accusing KBR of improper invoicing in Fallujah. "For all the Bush administration claims to do in the war against terrorism," Grayson said in congressional testimony, "it is a no-show in the war against war profiteers." In nearly five years of some of the worst graft and looting in American history, the administration has recovered less than $6 million.

What's more, when anyone in the government tried to question what contractors were up to with taxpayer money, they were immediately blackballed and treated like an enemy. Take the case of Bunnatine "Bunny" Greenhouse, an outspoken and energetic woman of sixty-three who served as the chief procurement executive for the Army Corps of Engineers. In her position, Greenhouse was responsible for signing off on sole-source contracts -- those awarded without competitive bids and thus most prone to corruption. Long before Iraq, she had begun to notice favoritism in the awarding of contracts to KBR, which was careful to recruit executives who had served in the military. "That was why I joined the corps: to stop this kind of clubby contracting," she says.

A few weeks before the Iraq War ­started, Greenhouse was asked to sign off on the contract to restore Iraqi oil. The deal, she noticed, was suspicious on a number of fronts. For one thing, the company that had designed the project, KBR, was the same company that was being awarded the contract -- a highly unusual and improper situation. For another, the corps wanted to award a massive "emergency" contract to KBR with no competition for up to five years, which Greenhouse thought was crazy. Who ever heard of a five-year emergency? After auditing the deal, the Pentagon found that KBR had overcharged the government $61 million for fuel. "The abuse related to contracts awarded to KBR," Greenhouse testified before the Senate, "represents the most blatant and improper contract abuse I have witnessed during the course of my professional career."

And how did her superiors in the Pentagon respond to the wrongdoing highlighted by their own chief procurement officer? First they gave KBR a waiver for the overbilling, blaming the problem on an Iraqi subcontractor. Then they dealt with Greenhouse by demoting her and cutting her salary, citing a negative performance review. The retaliation sent a clear message to any would-be whistle-blowers. "It puts a chill on you," Greenhouse says. "People are scared stiff."

They were scared stiff in Iraq, too, and for good reason. When civilian employees complained about looting or other improprieties, contractors sometimes threatened to throw them outside the gates of their bases -- a life-threatening situation for any American. Robert Isakson, a former FBI agent who worked for Custer Battles, says that when he refused to go along with one scam involving a dummy company in Lebanon, he was detained by company security guards, who seized his ID badge and barred him from the base in Baghdad. He eventually had to make a hazardous, Papillon-esque journey across hostile Iraq to Jordan just to survive. (Custer Battles denies the charge.)

James Garrison, who worked at a KBR ice plant in Al Asad, recalls an incident when Indian employees threatened to go on strike: "They pulled a bus up, got them in there and said, 'We'll ship you outside the front gate if you want to go on strike.' " Not surprisingly, the workers changed their mind about a work stoppage.

You know the old adage: You don't pay a hooker to spend the night, you pay her to leave in the morning. That maxim also applies to civilian workers in Iraq. A soldier is a citizen with rights, a man to be treated with honor and respect as a protector of us all; if one loses a limb, you've got to take care of him, in theory for his whole life. But a mercenary is just another piece of equipment you can bill to the taxpayer: If one is hurt on the job, you can just throw it away and buy another one. Today there are more civilians working for private contractors in Iraq than there are troops on the ground. The totality of the thievery in Iraq is such that even the honor of patriotic service has been stolen -- we've replaced soldiers and heroes with disposable commodities, men we ­expected to give us a big bang for a buck and to never call us again.

Russell Skoug, who worked as a refrigeration technician for a contractor called Wolfpack, found that out the hard way. These days Skoug is back home in Diboll, Texas, and he doesn't move around much; he considers it a big accomplishment if he can make it to his mailbox and back once a day. "I'm doing a lot if I can do that much," he says, laughing a little.

A year ago, on September 11th, Skoug was working for Wolfpack at a base in Heet, Iraq. It was a convoy day -- trucks braved the trip in and out of the base every third day -- and Skoug had a generator he needed to fix. So he agreed to make a run to Al Asad. "If I would've realized that it was September 11th, I never would've went out," he says. It would turn out to be the last run he would ever make in Iraq.

An Air Force vet, Skoug had come to Iraq as a civilian to repair refrigeration units and air conditioners for a KBR subcontractor called LSI. But when he arrived, he discovered that LSI had hired him to fix Humvees. "I didn't know jack-squat about Humvees," he says. "I could maybe change the oil, that was it." (Asked about Skoug's additional assignment, KBR boasted: "Part of the reason for our success is our ability to employ individuals with multiple capabilities.")

Working with him on his crew were two other refrigeration technicians, neither of whom knew anything about fixing Humvees. Since Skoug and most of his co-workers had worked for KBR in Afghanistan, they were familiar with cost-plus contracting. The buzz around the base was that cost-plus was the reason LSI was hiring air-conditioning guys to work on unfamiliar military equipment at a cost to the taxpayer of $80,000 a year. "They was doing the same thing as KBR: just filling the body count," says Skoug.

Thanks to low troop ­levels, all the military repair guys had been pressed into service to fight the war, so Skoug was forced to sit in the military storeroom on the base and study vehicle manuals that, as a civilian, he wasn't allowed to check out of the building. That was how America fought terrorism in Iraq: It hired civilian air-conditioning techs to fix Humvees using the instruction manual while the real Humvee repairmen, earning a third of what the helpless civilians were paid, drove around in circles outside the wire waiting to get blown up by insurgents.

After much pleading and cajoling, Skoug managed to convince LSI to let him repair some refrigeration units. But it turned out that the company didn't have any tools for the job. "They gave me a screwdriver and a Leatherman, and that's it," he recalls. "We didn't even have freon gauges." When Skoug managed to scrounge and cannibalize parts to get the job done, he impressed the executives at Wolfpack enough to hire him away from LSI for $10,000 a month. The job required Skoug, who had been given no formal security training, to travel regularly on dangerous convoys between bases. Wolfpack issued him an armored vehicle, a Yugoslav-made AK-47 and a handgun, and wished him luck.

For nearly a year, Skoug did the job, trying at each stop to overcome the hostility that many troops felt for civilian contractors who surfed the Internet and played pool and watched movies all day for big dollars while soldiers carrying seventy-pound packs of gear labored in huts with broken air conditioning the civilian techs couldn't be bothered to repair. "They'd have the easiest thing to fix, and they wouldn't do it," Skoug says. "They'd write that they'd fixed it or that they just needed a part and then just leave it." At Haditha Dam, Skoug witnessed a near-brawl after some Marines, trying to get some sleep after returning from patrol, couldn't get a group of "KBR dudes" to turn down the television in a common area late at night.

Toward the end of Skoug's stay, insurgent activity in his area increased to the point where the soldiers leading his convoys would often drive only at night and without lights. Skoug and his co-workers asked Wolfpack to provide them with night-vision goggles that cost as little as $1,000 a pair, but the company refused. "Their attitude was, we don't need 'em and we're not buying 'em," says Thomas Lane, a Wolfpack employee who served as Skoug's security man on the night of September 11th.

On that evening, the soldiers leading the convoy refused to let Skoug drive his own vehicle back to Heet without night-vision goggles. So a soldier took Skoug's car, and Skoug was forced to be a passenger in a military vehicle. "We start out the front gate, and I find out that the truck that I was in was the frickin' lead truck," he recalls. "And I'm going, 'Oh, great.' "

The bomb went off about a half-hour later, ripping through the truck floor and destroying four inches of Skoug's left femur. "The windshield looked like there was a film on it," he says. "I find out later it was a film -- it was blood and meat and stuff all over the windshield on the inside." Skoug was loaded into the back of a Humvee, his legs hanging out, and evacuated to an Army hospital in Germany before being airlifted back to the States.

When Skoug arrived, it was his wife, Linda, who had to handle all his affairs. She was the one who arranged for an air ambulance to take him to Houston, where she had persuaded an orthopedic hospital to admit him as a patient. She had to do this because almost right from the start, Wolfpack washed its hands of Russell Skoug. The insurance policy he had been given turned out to be useless -- the company denied all coverage, beginning with a $72,597 bill for his stay in the German hospital. Despite assurances from Wolfpack chief Mark Atwood that he would cover all Skoug's expenses, neither he nor the insurance company would pay for the $16,000 trip in the air ambulance. Nobody paid for the operations Skoug had in Houston -- as many as three a day, every day for a month. And nobody paid for his subsequent rehab stint in another Houston hospital -- despite the fact that military law requires every company contracting with the government to fully insure all of its employees in the war zone.

Now that he's out, sitting at home on his couch with only partial use of his left hand and left leg, Skoug has a stack of unpaid medical bills almost three inches tall. As he speaks, he keeps fidgeting. He apologizes, explaining that he can't sit still for very long. Why? Because Skoug can no longer afford pain medication. "I take ibuprofen sometimes," he says, "but basically I just grin and bear it."

And here's where this story turns into something perfectly symbolic of everything that the war in Iraq stands for, a window into the soul of for-profit contractors who not only left behind a breathtaking legacy of fraud, waste and corruption but, through their calculating, greed-fueled hijacking of this generation's broadest and most far-reaching foreign-policy initiative, pushed America into previously unknown realms of moral insanity. When I contact Mark Atwood and ask him to explain how he could watch one of his best employees get blown up and crippled for life, and then cut him loose with debts totaling well over half a million dollars, Atwood, safe in his office in Kuwait City and contentedly suckling at the taxpayer teat, decides that answering this one question is just too much to ask of poor old him.

"Right now," Atwood says, "I just want some peace."

When Linda Skoug petitioned Atwood for help, he refused, pointing out that he had kept his now-useless employee on the payroll for four whole months before firing him. "After I have put forth to help you all out," he wrote in an e-mail, "you are going to get on me for your husband not having insurance." He even implied that Skoug had brought the accident upon himself by allowing the Army to place him at the head of the convoy: "He was not even suppose [sic] to be in the lead vehicle to begin with."

And that, ladies and gentlemen, is the story of the Iraq War in a nutshell. In the history of balls, the world has never seen anything like the private contractors George W. Bush summoned to serve in Operation Iraqi Freedom. Collectively, they are the final, polished result of 231 years of natural selection in the crucible of American capitalism: a bureaucrat class capable of stealing the same dollar twice -- once from the taxpayer and once from a veteran in a wheelchair.

The explanations that contractors offer for all the missing dollars, all the myriad ways they looted the treasury and screwed guys like Russell Skoug, rank among the most diabolical, shameless, tongue-twisting bullshit in history. Going back over the various congres­sional hearings and trying to decipher the corporate responses to the mountains of thefts and fuck-ups is a thrilling intellectual journey, not unlike tackling the Pharaonic hieroglyphs or the mating chatter of colobus monkeys. Standing before Congress, contractors and the officials who are supposed to monitor them say things like "As long as we have the undefinitized contract issue that we have . . . we will continue to see the same kinds of sustension rates" (translation: We can't get back any of the fucking money) and "The need for to-fitnessization was viewed as voluntary, and that was inaccurate as the general counsel to the Army observed in a June opinion" (translation: The contractor wasn't aware that he was required to keep costs down) and "If we don't know where we're trying to go and don't have measures, then we won't know how much longer it's going to take us to get there" (translation: There never was a plan in place, other than to let contractors rip off every dollar they could).

According to the most reliable ­estimates, we have doled out more than $500 billion for the war, as well as $44 billion for the Iraqi reconstruction effort. And what did America's contractors give us for that money? They built big steaming shit piles, set brand-new trucks on fire, drove back and forth across the desert for no reason at all and dumped bags of nails in ditches. For the most part, nobody at home cared, because war on some level is always a waste. But what happened in Iraq went beyond inefficiency, beyond fraud even. This was about the business of government being corrupted by the profit motive to such an extraordinary degree that now we all have to wonder how we will ever be able to depend on the state to do its job in the future. If catastrophic failure is worth billions, where's the incentive to deliver success? There's no profit in patriotism, no cost-plus angle on common decency. Sixty years after America liberated Europe, those are just words, and words don't pay the bills.