Altruistica

"Altruistica": Seeking a return to full financial disclosure and regulatory oversight. A financial market analysis blog for "entertainment purposes" only by an experienced CFA seeking new hedge fund engagements for investment writing and analysis. The author has experience investing internationally, running a hedge fund, making angel investments, and helping launch five startup companies. Investors should do their own due diligence.

25 December 2006

A U.S. Budget Blows Out, Intelligence Oversight Disappears

For market watchers who care about more than the daytrade or channel trade, the overall signs of budget implosion get more discouraging by the day. No big surprise about lobbyist exploitation of loopholes, to be sure, but these three articles point out something more pernicious: the removal of control of intelligence spending and government war-making policy from the American public. And this after a democratic landslide in the election six weeks ago calling for development of plans for a phased US troop withdrawal, NOT "surge", NOT escalation.

Cloak and Dollar Oversight
Published: December 25, 2006, THE NEW YORK TIMES

The surest way to track power on Capitol Hill is to follow the money through the precincts of “the old bulls” — the ranking committee appropriators who paw the floor at any threat to their authority. All the more interesting, then, that the incoming House speaker, Nancy Pelosi, would risk their ire by forming a select committee to force the two discordant spheres of intelligence committees — budget wielders and policy watchdogs — to find common ground. For decades, rival committees and egos have been at the heart of Congress’s failure to effectively oversee the government’s mass of overlapping spy agencies. The results have been so bad that the 9/11 commission said they contributed to the lack of preparedness for the terrorist attacks.

It should be no great challenge to ensure that intelligence committee lawmakers who must oversee policy and operations have a say in how intelligence budget money is being spent. Right now, they don’t. Pentagon insiders and other lobbyists shrewdly focus on the appropriations committees to have their way, with effectiveness an afterthought. This only deepens, not clarifies, the murky task of oversight.

Whether Ms. Pelosi’s plan will help undo the knotted committee process remains to be seen, but it is an encouraging prod toward joint responsibility. The select committee, with members from the budget and policy spheres, is to review spending requests, make recommendations, hold hearings and assess how well programs are working. The new Senate majority leader, Harry Reid, has promised to study the initiative, and if he does not duplicate it, he should find something even better. It is time to bring the almighty dollar in from the cold as a principal agent in the wily art of avoiding intelligence oversight.


War Profits Trump the Rule of Law, By Chris Floyd
t r u t h o u t | UK Correspondent, Friday 22 December 2006

Slush funds, oil sheiks, prostitutes, Swiss banks, kickbacks, blackmail, bagmen, arms deals, war plans, climbdowns, big lies and Dick Cheney - it's a scandal that has it all, corruption and cowardice at the highest levels, a festering canker at the very heart of world politics, where the War on Terror meets the slaughter in Iraq. Yet chances are you've never heard about it - even though it happened just a few days ago. The fog of war profiteering, it seems, is just as thick as the fog of war.

But here's how the deal went down. On December 14, the UK attorney general, Lord Goldsmith (Pete Goldsmith as was, before his longtime crony Tony Blair raised him to the peerage), peremptorily shut down a two-year investigation by the Serious Fraud Office (SFO) into a massive corruption case involving Britain's biggest military contractor and members of the Saudi royal family. SFO bulldogs had just forced their way into the holy of holies of the great global back room - Swiss bank accounts - when Pete pulled the plug. Continuing with the investigation, said His Lordship, "would not be in the national interest."

It certainly wasn't in the interest of BAE Systems, the British arms merchant that has become one of the top 10 US military firms as well, through its voracious acquisitions during the profitable War on Terror - including some juicy hook-ups with the Carlyle Group, the former corporate crib of George H.W. Bush and George W. Bush and still current home of the family fixer, James Baker. BAE director Phillip Carroll is also quite at home in the White House inner circle: a former chairman of Shell Oil, he was tapped by George II to be the first "Senior Adviser to the Iraqi Ministry of Oil" in those heady "Mission Accomplished" days of 2003. BAE has allegedly managed to "disappear" approximately $2 billion in shavings from one of the largest and longest-running arms deals in history - the UK-Saudi warplane program known as "al-Yamanah" (Arabic for "The Dove"). Al-Yamanah has been flying for 18 years now, with periodic augmentations, pumping almost $80 billion into BAE's coffers, with negotiations for $12 billion in additional planes now nearing completion. SFO investigators had followed the missing money from the deal into a network of Swiss bank accounts and the usual Enronian web of offshore front companies.

Nor was continuing the investigation in the interest of the Saudi royals, whose princely principals in the arms deal were embarrassed by allegations that a BAE-administered slush fund had supplied the fiercely ascetic fundamentalists with wine, women and song - not to mention lush apartments, ritzy holidays, cold hard cash, Jags, Ferraris and at least one gold-plated Rolls-Royce, as The Times reported. One scam - uncovered by the Guardian in a batch of accidentally released government documents - involved inflating the price of the warplanes by 32 percent. The rakeoff was then presumably siphoned into BAE's secret accounts, with some of it kicking back to the Saudi royals and their retainers. Then came a curious intervention. Last month, Dick Cheney traveled to Riyadh for talks with Saudi King Abdullah. There he beseeched the king to step in and help pull America's fat out of the wildfire of Iraq by using Saudi influence on Iraq's volatile Sunni minority, the Scotland Sunday Herald reported.


And given the sad situation of using off-budget finance to conduct an unwinnable war, isn't it time to explore a strategy other than just putting more US soldiers in harm's way???? Even The Nation has concluded that history is doomed to repeat itself. How tragic and unnecessary.

Early next year, the president is going have to submit an emergency appropriations bill to continue to fund the war. The Democrats should respond in two ways. First, if by the time the appropriations bill is submitted, the president is still discussing escalating the war, Democrats should come up with a counter offer: they will only approve enough funding for the current troops and not one more. Second, the funding should only be approved for the first 90 days, after which time the administration will have to report comprehensively to Congress on what progress has been made in bringing the war to a conclusion. It's certainly not an ideal strategy, insofar as it essentially maintains the status quo, but in the in the near term, the first priority for the Democrats has to be to use their newfound ability to stop this war from escalating.

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