Tag Archives: Hugo Chavez

Gaffney testifies on financial warfare

The following testimony, entitled "The Financial Dimensions of the ‘War for the Free World,’" was given by CSP President Frank Gaffney on May 24, 2007 in front of the House Foreign Affairs Committee’s Subcommittee on Terrorism, Non-Proliferation, and Trade.

Mr. Chairman, last September, I had the privilege of appearing before this distinguished Subcommittee to address the nature of the conflict in which we find ourselves and what it will take for us to prevail in it. I call that conflict the "War for the Free World" as I believe this moniker best describes the magnitude of the challenge confronting us and what is at stake – the Free World, itself – should we fail to meet the present danger, and those in prospect.

[More]I am sorry to report that, in significant ways, this war has become more dangerous since my last appearance before you. And the risks associated with our failure have only grown concomitantly.

Time for an Intensified Effort

It behooves us, therefore, to be making a redoubled effort to counter our immediate enemies: adherents to a totalitarian ideology bent on world domination and the destruction of all who stand in the way of that goal. I believe they are best described as Islamofascists – a term that permits an important distinction to be made between such ideologues, who pursue political goals under the guise of a religion, from those hundreds of millions of Muslims the world over who are peaceably and tolerantly practicing their faith.

What makes these ideologues so dangerous is the fact that they are abetted in their often violent activities and political purposes by state-sponsors: notably, Iran, Syria, Sudan and North Korea. Fortunately, this vital relationship between rogue regimes and terrorist organizations – by which the former provide the latter with funding, safe-havens, logistical support, intelligence and other forms of material assistance and protection – also creates an opportunity for us: To use, among other instruments, financial weapons against the states that sponsor terrorism.

All of these instruments and how best to apply them are described at length in our book, War Footing: Ten Steps America Must Take to Prevail in the War for the Free World. For the present purpose, however, permit me to focus narrowly on ways in which financial means – over and above the existing sanctions currently imposed by the U.S. government – can be used to hurt our enemies.

Terror-Free Investing

As you know, Mr. Chairman, the Center for Security Policy has for several years now been urging institutional and private investors to engage in what we call "terror-free investing." By assessing whether public pension funds, mutual funds, 401k plans, college savings programs, university endowments and personal portfolios are, generally unwittingly, investing in publicly traded companies that do business with terrorist-sponsoring regimes – and, if so, divesting such stocks – we believe a formidable force-multiplier can be brought to bear in the War for the Free World.

Thanks to our government’s sanctions on state-sponsors of terror, American companies (with very few exceptions) are not doing business directly with regimes so designated by the State Department. As a result, terror-free investing can bring pressure to bear on foreign-owned and -operated companies on what might otherwise be described as an "extraterritorial" basis. Such pressure can cause these companies to desist from working with, and thereby assisting, our foes.

I am pleased to report that several prominent firms – UBS, Credit Suisse and Daimler-Benz – have already taken this step with respect to Iran. A more comprehensive effort to encourage terror-free investing would likely prompt many other corporations to reach a similar conclusion: Corporate reputation, share value and profits are better served by doing business with America than with her enemies.

Toward this end, I believe that every effort should be made, at the federal as well as state and local levels, to raise awareness of this financial warfare opportunity and to encourage both government pension systems and the market to help with the war effort by facilitating terror-free investing. In that connection, I want in particular, to commend you, Mr. Chairman, for the support you have shown for this initiative – both in the hearing you recently held on the subject and in your legislative efforts. I very much hope that, for example, your idea of eliminating capital gains penalties associated with shifting funds from investment vehicles that include terrorist state-partnering companies to ones that do not will become law this year.

Other Financial Warfare Opportunities

I was asked today to explore other ways in which the U.S. government might further discourage businesses from providing what amounts to life-support to terrorist-sponsoring states, through their investments in and business dealings with rogue regimes. Let me quickly address three areas worthy of your consideration in that regard:

The Overseas Private Investment Corporation (OPIC): As you know, OPIC provides such assistance as financing and political risk insurance that enables companies and private equity funds to support infrastructure projects and other investments in developing countries. I understand that OPIC assistance has been provided to the relatively small number of American corporations – including, for example, General Electric – that do business (usually through foreign subsidiaries) in Iran and/or in other officially designated state-sponsors of terror.

OPIC is also involved in facilitating joint ventures and projects in which American firms participate as members of consortia with foreign corporations, even though such consortia may be engaged in business dealings with our enemies. It is hard to calculate the precise value to terrorist-sponsoring states of this sort of indirect U.S. assistance. Suffice it to say, though, that any taxpayer-enabled aid to the financial wherewithal of those trying to kill Americans is too much aid.

If, as I believe it should, Congress wants to maximize the pressure on the world’s most dangerous governments – in particular, that of Iran – it should consider ways in which to constrict OPIC insurance and other assistance, whether direct or indirect, available to those doing business with such regimes. This is especially important insofar as the U.S. government has been seeking ways in which to encourage our allies to cut back their counterpart programs, which are enabling vast enterprises like Total, ENI, Elf, Statoil and Siemens to do extensive business with state-sponsors of terror.

The Export-Import Bank: A similar review is in order with respect to the lending and other export-facilitation programs of the Export-Import Bank. I would encourage the Subcommittee to evaluate Ex-Im’s exposure in the form of loans or guarantees associated with ventures doing business in or with state-sponsors of terror. At a minimum, any involvement on the part of such ventures with Iran and other terrorist-sponsors should be taken into account when the funding decisions are being made by the Bank.

Foreign Supplier Assessment: A little-known fact is that there are today some 15,000 foreign suppliers to the Department of Defense. They provide everything from advanced military hardware and components to relatively prosaic materials and supplies. I do not have a precise estimate of the value of these transactions, but it seems safe to assume they run to the many billions of dollars.

A topic for another day is the strategic inadvisability of so great a reliance on such suppliers for products essential for our armed forces and their missions. For the present purpose, it is enough to note that at least some of these foreign suppliers to the Pentagon also provide valuable goods and services to Iran and/or other state-sponsors of terror. To my knowledge, until now, little attention has been paid to the extent to which financial pressure in the form of U.S. procurement decisions could be brought to bear on our adversaries by forcing such suppliers to choose between doing business with our Defense Department or with rogue states.

As it happens, there is a relatively small and largely unknown unit within the Defense Security Service (DSS), known as the Foreign Supplier Assessment Center (FSAC). FSAC is charged with evaluating the Pentagon’s foreign suppliers in terms of their reliability, quality control, price competitiveness, etc. To date, however, this organization has not been charged with examining these suppliers’ business ties to hostile governments.

I believe Congress should consider directing FSAC to create a screening mechanism that would bar foreign companies that do business, for example, in Iran from receiving Pentagon contracts. The mere prospect of such an exclusion, let alone its implementation, may well compel such companies to forego any future transactions in the country in question, rather than lose access to so important (both symbolically and financially) a U.S. customer.

Properly constructed, such an FSAC screen would have the corollary benefit of establishing a comprehensive data base for over 15,000 foreign companies, one that could monitor their activities in terrorist-sponsoring states (if any), their supply of dual-use equipment and technology to such states and profiles of their Iranian and other problematic business partners. It would likewise cue foreign companies to the importance of implementing a robust security-minded risk-anagement program to oversee projects and transactions in sensitive countries, something already embraced by some leading Japanese and European firms.

Conclusion

Mr. Chairman, let me close by repeating points I made to this Subcommittee nearly nine months ago:

We confront a complex, multifaceted and increasingly dangerous world. Islamofascists are on the march. They benefit from the state-sponsorship of oil-rich regimes that subscribe to one strain or another of this totalitarian ideology. Such wealth and the determination to destroy us that is a central purpose of our enemies makes it – all other things being equal – just a matter of time before their attacks on us and/or our allies are inflicted with weapons of mass destruction.

To make matters worse, governments that are not themselves Islamist (such as that of Vladimir Putin in Russia, the Communist Chinese, Kim Jong Il’s regime in North Korea and Hugo Chavez’s in Venezuela) are aiding and abetting the Islamofascists.

This combination of factors leaves us no choice but to get far more serious about this war than we have been to date. Serious in terms of the nature of the enemy. Serious in terms of what it will take to defeat it – from a vastly larger investment in our military to the mobilization of our people, resources and energies. And serious about adopting the policies and programs, including counter-ideological political warfare-related ones, necessary to ensure that we prevail in this War for the Free World."

As I noted at the outset, a few things have changed since I made those remarks. Notably, the Congress is under new management. Another thing that has changed is the assessment of the imminence of the nuclear threat from Iran. For these reasons, I entreat this Subcommittee and the new leadership of the legislative branch to take to heart the assessment I have offered here – and last year – about the need to put our country on a "war footing" and the specific recommendations I have offered, both then and now, for doing so.

In particular, I hope these remarks will encourage you, Mr. Chairman, and your colleagues to bring to bear all instruments at our government’s disposal that could intensify the financial pressure on our enemies’ and, with luck, encourage an early end to the threat they pose to us and the rest of the Free World.

Energy Squeeze

The international energy market of the twenty-first century is witnessing an unprecedented period of turmoil and instability, an indication of an indisputable global power shift that holds serious, long-term implications for U.S. national security interests throughout the world.

Acting in silent unison, energy-rich governments in the Middle East, Eurasia and South America, in particular, populist dictator Hugo Chavez of Venezuela; Iran’s President Mahmoud Ahmandinejad; China’s stoic President Hu Jintao, and Russia’s enigmatic President Vladimir Putin, have demonstrated a growing penchant for energy-related controversy and confrontation. No longer satisfied with Western-defined progress, these countries have become emboldened players on the world stage, using commodities such as crude oil, natural gas and mineral deposits as weapons against perceived U.S. hegemony.

The ultimate goal of this new energy alliance is to eventually humble the U.S. as the world’s undisputed political, economic and military power, forcing its withdraw from the world stage by using energy as a sledgehammer for international change. Acting independently, these countries can attain, at best, only marginal influence and power. Acting together, however, they become formidable adversaries.

The power of energy as a weapon for capitulation was demonstrated in late 2005 when Russian oil conglomerate Gazprom used the "energy weapon" against former Soviet republic Ukraine. By temporarily cutting off natural gas supplies to the western-leaning government of Viktor Yushchenko and ignoring standing contractual obligations, Moscow gave an early glimpse of how its new energy-based foreign policy could be used to persuade and punish.

As a direct result of the Russia-Ukraine dispute, alleged energy distribution "difficulties" were reported by Moscow which resulted in natural gas supplies to Europe being substantially cut, raising the ire of European leaders such as Germany’s Chancellor Angela Merkel. In hindsight, Chancellor Merkel’s reaction is understandable. Europe’s reliance on Russian crude exports has risen from 9 percent of total crude imports in 1995 to 29 percent in 2006. Energy industry experts predict the EU will import 90 percent of its oil and 80 percent of its natural gas within 20 years as onshore and offshore fields become mature. Although the Russia-EU crisis was eventually resolved, it provided a "dry run" exercise for Moscow and proved once again what most of Europe’s leaders knew all along – that energy is the EU’s "Achilles heel."

In the past several days, Moscow has threatened to cut off Estonia’s energy supplies in response to the small country’s decision to remove a Soviet-era memorial of a Red Army soldier, saying oil, diesel and natural gas deliveries "may be disrupted" starting May 1. Even long-time allies of Moscow such as Belarus’ Cold-War dictator Alexander Lukashenko have become casualties in the new energy game, seeing a nearly fourfold increase in energy prices over a year ago.

Moves by the Kremlin to nationalize the country’s energy sector by pressuring a Royal Dutch Shell-led consortium to relinquish control of the Sahalin-2 natural gas project to Russia’s state-controlled monopoly Gazprom, and Putin’s meetings with Arab leaders last month to explore the creation of a "natural gas cartel" demonstrate an authoritarian view of energy management that is undeniably confrontational. Putin’s message to the world is clear – energy resources can, and will, be used as a tool to shape foreign policy and forcibly influence countries.

Although not an energy exporter to the U.S., China continues to complicate Washington’s global energy security. In April 2006, Chinese President Hu Jintao signed a number of bilateral agreements involving the future delivery of Saudi oil in exchange for Chinese weapons. The purpose of this alliance was not only to secure a long-term supply of energy for China’s burgeoning economy, but to offset existing U.S. energy alliances in the Middle East by influencing the "House of Saud." One year earlier, the Beijing regime signed an unprecedented US$70 billion, 25-year natural gas agreement with nuclear-obsessed Tehran.

Beijing’s quest for energy has recently led it to the shores of the U.S. With the help of communist Cuba, Chinese companies are performing what is known as "slant drilling" 50 miles off the Florida Keys, tapping into oil reserves located in U.S. sovereign territory. China has also attempted to secure significant amounts of oil and natural gas from top U.S. suppliers Canada and Mexico. And on the African continent, Beijing’s policy of turning a "blind eye" to the internal politics of countries it does business with has contributed to needless civilian deaths in countries such as the Sudan, Zimbabwe and Nigeria.  

Then there is the case of America’s fifth largest crude exporter, Venezuela. Last week, the country’s anti-American President Hugo Chavez delivered on an earlier promise to seize foreign oil operations in the energy-rich Orinoco Belt, saying, "Open investment will never return." With no other options available to confront Latin America’s "Little Fidel," U.S. companies ConocoPhillips, Chevron, Exxon Mobil, Britain’s BP, Norway’s Statoil and France’s Total agreed to cede operational control, transferring power to Chavez’s growing oil cartel. The rise in energy prices over the past several years – from US$18 a barrel in 2001 to US$67 today – has enriched Venezuela’s coffers, with oil revenues increasing 100 percent from 2002 to 2006. There is a very good chance this troubling trend will continue in the near future.

The current energy transition presents an immediate threat to the U.S. and its allies in Western Europe and Asia. The prospect of severe global energy disruptions, the further nationalization of existing energy resources and the formation of energy-based, anti-American alliances present a threat to the global competitive equation. As this transition becomes more acute, other energy rich countries, as well as non-aligned nations sympathetic to their views and in need of energy themselves, will join this anti-American movement.

With foreign petroleum products expected to provide 70 percent of U.S. energy needs in the coming decades, energy conservation, independence and diversity have become paramount initiatives. An aging refinery infrastructure, increased domestic gasoline consumption, unexpected distribution disruptions and dwindling oil and gasoline reserves have pushed the U.S. to the edge. In reality, the country is only one major disruption away from a very serious energy problem that could have wide-ranging consequences. If the perfect storm does occur – a lethal combination of the items mentioned previously and a military confrontation with Iran – the results will be immediate and extremely painful for all Americans.

President Bush has said that U.S. dependence on overseas oil is a "foreign tax on the American people." On this issue, he is right. Polls of the American public consistently show that energy dependence is on their minds. Recognizing this, definitive action must be taken by Washington to remedy this crisis by protecting all of America’s vital energy interests throughout the world. Otherwise, our inability as an independent country to react to dynamic world events will be severely curtailed, leading to inescapable and uncontrollable global scenarios.

DoD in Catch-22 when dealing with EADS

Yossarian was moved very deeply by the absolute simplicity of the clause of Catch-22 and let out a respectful whistle.

‘That’s some catch, that Catch-22,’ he observed.

 ‘It’s the best there is,’ Doc Daneeka replied.[1]

The reality of industrial globalization means that the United States will increasingly rely on foreign suppliers of military equipment. That’s not necessarily a bad thing, as long as we know that our global suppliers want to be true defense partners, are trustworthy, and will compete fairly to provide the best value for American taxpayers and the best products for American warfighters.

The Department of Defense (DoD) has rightfully welcomed the move toward globalization. But, with the large-scale entry of the European Aeronautic, Defense and Space (EADS) consortium into the U.S. market, DoD is finding itself in a procurement Catch-22 that would have even Joseph Heller, the creator of the phrase, in awe.

The catch in this case holds that even though DoD personnel are sworn to protect our country, they must award contracts regardless of the political actions of companies from what the Defense Acquisition Guidebook calls “friendly foreign countries.” Though it seems crazy to buy products from a company such as EADS whose owners, executives, and workers politically undermine American defense and foreign policy, this catch makes it not only rational but legally binding.  

Espionage, bribery and other dirty practices.

[Milo:] ‘But it’s not against the law to make a profit, is it? So it can’t be against the law for me to bribe someone in order to make a fair profit, can it? No, of course not!’ He fell to brooding again, with a meek, almost pitiable distress. ‘But how will I know who to bribe?’  

‘Oh you don’t worry about that,’ Yossarian comforted…‘You make the bribe big enough and they’ll find you. Just make sure you do everything right out in the open. Let everyone know exactly what you want and how much you’re willing to pay for it. The first time you act guilty or ashamed, you might get into trouble.'[2] 

The French government owns 15 percent of EADS, and its industrial policy consists of espionage, bribery and other actions to give its favored companies an unfair advantage over American firms. By making EADS a substantial defense supplier, the United States would be rewarding the French government for years of espionage and bribery that inflicted billions of dollars’ of damage on the American aircraft industry and betrayed any trust that they would have earned as credible defense partners.

The EADS idea of leveling the playing field in many cases is to bribe corrupt officials into buying its products instead of American ones. EADS, its precursors, and its subsidiaries have been the subject of bribe related scandals in Belgium, Canada, India, Kuwait, Switzerland, Syria[3], and most recently Austria where one of its lobbyist is accused of paying 87,000 euros ($117,00) to the wife of the Austria Air Force general overseeing a $2.7 billion contract won by an EADS subsidiary.[4]

Former CIA Director R. James Woolsey confirmed seven years ago that Airbus bribed foreign officials to buy its planes. In a Wall Street Journal op-ed addressing European complaints about our Echelon electronic intelligence program, Woolsey said that the U.S. was not using Echelon to spy on European companies to steal their trade secrets. "They don’t have much worth stealing. Instead we were looking for evidence of bribery," Woolsey said. He confirmed that Echelon was aimed partly at Airbus: "That’s right, my continental friends, we have spied on you because you bribe." Woolsey added:

  • "Your companies’ products are often more costly, less technologically advanced or both, than your American competitors’. As a result you bribe a lot."
  • "When we have caught you at it, we haven’t said a word to the U.S. companies in the competition. Instead we go to the government you’re bribing and tell its officials that we don’t take kindly to such corruption. They often respond by giving the most meritorious bid (sometimes American, sometimes not) all or part of the contract. This upsets you, and sometimes creates recriminations between your bribers and your bribees, and this occasionally becomes a public scandal…"[5]

The Economist detailed EADS/Airbus bribery in an important 2003 article, and cited a European Parliament report that confirmed the company’s corrupt practices.[6] The U.S. has a tough enough time guarding against fraud and corruption among domestic suppliers, where the abuse is usually on the part of individuals and not seemingly corporate policy.

Trying to supply America’s adversaries with weapons.

Milo shook his head with weary forbearance. ‘And [they] are not our enemies,’ he declared. ‘Oh, I know what you’re going to say. Sure, we’re at war with them. But [they] are also members in good standing of the syndicate, and it’s my job to protect their rights as shareholders. Maybe they did start the war,… but they pay their bills a lot more promptly than some allies of ours I could name.’ [7]    

EADS tried to circumvent US law in bid to help Chavez. Last year, the Center for Security Policy cited EADS for its sales to Venezuelan dictator Hugo Chavez and in January, 2006, the U.S. invoked international arms trade regulations to stop EADS from selling its Spanish-built EADS CASA C-295 and CN-235 transport and patrol planes to Chavez. Under the regulations, known as ITAR, other countries cannot sell military products containing American-made components to third countries without U.S. approval. Since the EADS CASA planes contain dozens of U.S. parts, including engines and unique turboprops, the White House notified EADS and Spain of its objections. 

Rather than stop doing business with Chavez, as a reliable U.S. defense partner would be expected to do, EADS immediately tried to circumvent ITAR by stripping out the American-made equipment and trying to find non-U.S. replacements. Only when it was clear that EADS could not come up with the substitute components did the deal officially fall through, in an October, 2006 announcement – nine months after President Bush invoked ITAR.  

Working to arm China. Since the 1989 Tiananmen Square Massacre, the European Union nations have largely stopped their military cooperation and arms sales to Beijing. Over the past few years though, EADS owners in France and its workers in Germany and Spain have agitated to end the embargo. This desire to fully open the technological floodgates was most recently evinced in March by French Defense Minister Michele Alliot-Marie, who while in Japan, continued to declare that the ban was "illogical" and "paradoxical." In fact, she later stated that China’s burgeoning military might was not a threat but that, "what is important is for China’s military power to be put to the service of peace."[8] The French government is no mere shareholder in EADS; President Jacques Chirac has used his influence to hire and fire the company’s top executives and to intervene in management decisions. 

Even with the current EU arms embargo EADS has found ways to supply Beijing’s armed forces. The company has engaged in dubious endeavors that have direct military or dual-use potential. For example, EADS subsidiary Eurocopter – which has long been partnered with China, has agreed to joint "development" with Beijing of a 16-seat, 6 ton helicopter known as the EC175.   Industry sources indicate that the new design will give the Chinese access to "the very latest technological advances in the cockpit and avionics," and can be used for both civilian and military purposes.[9] What’s more, this is not the first time that Eurocopter has materially contributed to China’s military growth. A 1980s-model helicopter, known as the "Dauphin" by the French and the Z-9 by the Chinese, is still used by the PLA as a tactical troop transport, as well as a communications, fire direction and electronic warfare platform.[10]   

Weapons and nuke parts to Iran. As if selling advanced military equipment to China was not bad enough, EADS is also marketing its wares to the Islamic Republic of Iran. In 2005, for example, Eurocopter representatives attended an air show in that country and were seen attempting to sell what they said were "civilian" helicopters. However, astute observers noticed that EADS’ promotional videotape for the show was labeled "Navy" and that that it prominently featured a military helicopter.[11] EADS official Michel Tripier when questioned why they were ignoring U.S. policy to isolate Iran said, "As a European company, we’re not supposed to take into account embargoes from the U.S.."

Perhaps even more worryingly, there are concerns that EADS may be inadvertently aiding the Iranian nuclear program. As late as 2005, the company was selling Nickel 63 and so-called "Tritium Targets" – both crucial to triggering a nuclear explosion – to the South Korean firm Kyung-Do Enterprises. Reportedly, unbeknownst to EADS, the South Koreans were then reselling the nuclear parts a company called Parto Namaje Tolua, a front for the state-owned Iranian firm Partoris. [12]  Even if the sale was an accident, it is extremely vexing that EADS did not take the time to verify the end-user of the nuclear materials. 

Pro-American marketing and advertising, Anti-American workforce.

‘You’ll be all right,’ Yossarian assured him with confidence. ‘If you run into trouble, just tell everybody that the security of the country requires a strong domestic Egyptian-cotton speculating industry.’  

‘It does,’ Milo informed him solemnly. ‘A strong Egyptian-cotton speculating industry means a much stronger America.’ 

[Yossarian:] ‘Of course it does. And if that doesn’t work, point out the great number of American families that depend on it for income.’

 [Milo:] ‘A great many American families do depend on it for income.’

 ‘You see?’ said Yossarian. ‘You’re much better at it than I am. You almost make it sound true.’ [13]

If you exchange the words Egyptian-cotton industry with European Aerospace-lobbying industry in Heller’s passage above, you would have a good summation of how EADS has been trying to justify its activities and market itself to the American public.

In recent years, EADS has been building assembly and service facilities in Alabama and securing the support of targeted congressional delegations. "The company has been busy building U.S. domestic political support for a program that would ultimately involve billions of dollars and thousands of jobs," Air Force magazine reported in June, 2006. "The company also has been recruiting talent with the technical know-how (and political connections) to get deals done in Washington."[14]

Senator Murray denounced the EADS propaganda campaign to make the company look less French and more American. "EADS and Airbus have launched a deceptive PR and lobbying campaign to convince the U.S. government that it is essentially an American company," she said in May, 2004.[15]

In reality the amount of American jobs EADS plans to create is miniscule compared to the huge number of jobs it provides to anti-American labor unions that form the backbones of some of Europe’s most powerful socialist parties.

Many EADS unions are militantly Anti-American and Anti-NATO. 

Anti-American union workers in Germany. The German socialist IG Metall union represents workers at Airbus Deutschland. Faced with losing thousands of jobs to the current Airbus reorganization, IG Metall is hoping EADS aircraft will start winning large DoD contracts. But the union, as a matter of policy and pride (its flag is still the Soviet-era red banner), openly shows hatred of the United States. The May 2005 cover of its magazine Metall contains a cartoon of a bloodsucking insect grinning and tipping its Uncle Sam hat while it ripped American businesses as "bloodsuckers" and "parasites."[16] When the liberal Free Democratic Party tried to get them to renounce the grotesque depiction, IG Metall Chairman Juergen Peters responded by calling the insect cartoon "a good caricature" of Americans.[17]

EADS CASA workers in Spain: On the wrong side. In Spain, where the EADS CASA division manufactures a variant of the CN-235 for the Coast Guard’s Deepwater program and its stretch C-295 companion, the aircraft workers are even more militant than the Germans.

The EADS CASA’s main union, the General Confederation of Workers (CGT), is virulently opposed to the war on terror, to the United States, and to the NATO alliance. Its red-and-black anarcho-Marxist flag indicates an alliance of two forms of extremism, and its official Rojo y Negro (Red and Black) newsletter shows a militancy seldom seen any more in industrialized democracies.

  • Stirring up extremism in Mexico. The CGT appears to back any radical movement in Mexico that opposes the Mexican government and the United States. The union openly supports both anarchist and communist causes in Mexico that seek to destabilize the southern border of the U.S. The union has its own "CGT Solidarity with Chiapas" committee to back the Marxist Zapatista guerrillas in the south of Mexico,[18] and publishes communiqués by the Clandestine Revolutionary Committee Indigenous Command of the Emiliano Zapata National Liberation Front (EZLN).[19]
  • Globalizing Latin American protests against the United States. The CGT promotes the international networking of protests against the President of the United States. Last month the CGT spread anti-Bush propaganda to spread opposition to the American president’s visit to South America as it denounced American "plans of imperialism for the region."[20]  
  • Militantly anti-NATO . The CGT is steadfastly opposed to the NATO alliance – not simply to alliance policies, but to the very existence of the collective security system itself. In February, the CGT held a major anti-NATO protest in Seville, at the EADS CASA manufacturing hub where the company expects to do most of its future Pentagon work. The demonstration coincided at the NATO leaders’ summit, with the CGT denouncing the alliance as the "global armed wing of the capitalist powers and their multinationals."[21] 

Running from responsibilities.

‘But you can’t just turn your back on all your responsibilities and run away from them,’ Major Danby insisted. ‘It’s such a negative move. It’s escapist.’

Yossarian laughed with a buoyant scorn and shook his head. ‘I’m not running away from my responsibilities. I’m running to them.’ [22]

EADS has the technology and resources to be a valuable partner in the defense and security of the United States. But if EADS is to be trusted – if Americans are to be comfortable buying its products and services – then the company, its owners, and its workers will have to live up to their responsibilities as America’s partner and change some of their ways.

Also, just as Yossarian finally realizes that the Catch-22 he is confronted with is a made up bureaucratic absurdity, the Pentagon and Congressional overseers, need to finally realizes the folly of this self-created procurement catch and that they, at a minimum, have the responsibility to take into account the actions, if not the politics, of foreign suppliers.

[1]Joseph Heller, Catch-22, (London: Vintage Random House, 1994), Chapter 5, p. 63.
[2] Ibid, Chapter 24, p. 337.
[3] "Special Report: Airbus’s Secret Past – Aircraft and Bribery," The Economist, June 12, 2003.
[4] "For the Record", Defense News, April 16, 2007 p.3
[5] R. James Woolsey, "Why We Spy on our Allies," Wall Street Journal, March 17, 2000.
[6] "Special Report: Airbus’s Secret Past – Aircraft and Bribery," The Economist, June 12, 2003.
[7] Heller, Chapter 24, p. 325.
[8] Herve Asquin, "France Calls to Lift China Arms Embargo," Defense News Online, March 15, 2007.
[9] "EADS to Co-develop EC175 Helicopter With China," Defense Industry Daily December 2005; "EADS Creates a New Helicopter in a Cooperative Venture with China," EADS Press Release, May 5, 2005, http://eads.net/1024/en/pressdb/archiv/2005/2005/20050512_ec_175.html
[10] "Z-9 Light Multi-Role Helicopter," Sinodefence.com on April 4, 2007.
[11] Ibid.
[12] "Iran Allegedly Purchasing Nuclear-Weapons Parts.," RFE/RL Iran Report,   2 August 2005, Volume  8, Number  30.
[13] Heller, Chapter 24, p. 338.
[14] Richard J. Newman, "The European Invasion," Air Force, June 2006, Vol. 89 No. 6.
[15] Senator Murray, May 5, 2004.
[16] "US-Firmen: Die Plünderer sind da," Metall, May 2005. Online at http://www.igmetall.de/cps/rde/xchg/SID-0A342C90-8AD8F407/internet/style.xsl/view_4764.htm.
[17] Ray D., "Germany’s Largest Trade Union: Portraying Americans as Blood Suckers ‘A Good Caricature,’" in David Kaspar, Davids Medienkritik blog, http://medienkritik.typepad.com/blog/2005/05/germanys_larges.html.
[18] http://www.rojoynegro.info/2004/article.php3?id_article=16089> (10 February 2007)
[19] http://www.rojoynegro.info/2004/article.php3?id_article=15239> (10 February 2007)
[20] http://www.rojoynegro.info/2004/article.php3?id_article=15165> (10 February 2007)
[21] http://www.rojoynegro.info/2004/article.php3?id_article=13107> (10 February 2007)
[22] Heller, Chapter 42, p. 567.

Ecuador’s democracy at risk

Rafael Correa
President of Ecuador

As Luis Fleischman, writing for The Americas Report, predicted last November, the Ecuadorian President, Rafael Correa, is creating a constituent assembly aimed at increasing a more authoritarian system of government.

Such a system would include the further deterioration of political representative institutions in favor of a stronger executive power. Furthermore, Fleischman pointed out that "Mr. Correa’s party is a political movement detached from a structure that sees elections only as means to gain votes, to establish himself in power and later rule without a free functioning legislative branch.

Thus, "the assembly will determine the elimination of party plurality in favor of the almighty political leader (with a direct connection to the masses). As soon as he gathers more power, Mr. Correa will proceed to dismantle political pluralism in Ecuador and will move in the direction set by Hugo Chávez" (Luis Fleischman, "Elections in Ecuador", CSP Security Forum, November 9, 2006).

Indeed, President Rafael Correa’s proposal to create a Constituent Assembly to rewrite Ecuador’s Constitution won an overwhelming 81.7% of the votes in a national Referendum on April 15, 2007. More than 70% of Ecuador’s 9.2 million voters participated. The Supreme Electoral Court has resolved to convene elections on September 30, 2007 for the 130 delegates to a Constituent National Assembly.[1]

Since being elected President of Ecuador, Mr. Correa had been pushing the idea of a new constitution ‘to fight against corruption.’ Disenchantment with congress, political parties and the judiciary were key factors in Rafael Correa’s presidential victory last year.[2] But many see the result of the Referendum as a power grab by the President who didn’t present candidates for Congress and had little support to advance his policies. One possibility is that the only way out of this stalemate was to dissolve the Legislative body and replace it with a new one that would support his agenda.

Why did Rafael Correa call for a Constituent Assembly?

Mr. Correa won the Presidential elections on November 26, 2006 in a runoff with candidate, Alvaro Noboa, but his party had few representatives in the Congress. With only minor support of a few Representatives from other political parties, his administration had difficulties in trying to create a Constituent Assembly from the start. The relationship between Congress and the President deteriorated since he assumed the Presidency on January of this year. Things got even worse in March, when Congress removed the President of the Federal Court, Jorge Acosta, for convoking a Referendum without the approval of the legislative body. In response the Electoral Court fired 57 opposition members of Congress. The right-wing opposition deputies were ousted over their refusal to go along with radical constitutional reforms promoted by Rafael Correa. They were soon replaced by 21 substitute delegates. After more than a month of turmoil, Congress finally held its first session on April 10th. Ousted lawmakers continued to meet in parallel, trying to push for some type of legal solution to their removal.[3]

But just last week, the Constitutional Tribunal ruled that the 57 opposition legislators who were fired last month should be allowed to return to their posts. In retaliation, Congress (with a majority of government-friendly parliamentarians) voted to sack all the judges on the Tribunal. In a shocking move, President Rafael Correa ordered police to block the reinstated legislators from returning to their seats while federal prosecutor, Elsa Moreno, ordered the arrest of 24 deputies, nearly half of the 50 who the country’s highest court had ordered reinstated to Congress and charged them with ‘sedition.’ Prosecutor Elsa Moreno, who is in charge of the case, alleges that the 24 lawmakers ‘plotted’ against the state and ‘acted against the government, refusing to recognize the constitution, and impeding a meeting of the Congress." (They were initially fired for allegedly interfering with a national referendum to allow Correa to pursue his aim of rewriting the constitution).

It is reported that 15 of the 50 legislators are in Colombia and have said they will ask for political asylum in that country. (Correa had already warned that if any of the dismissed lawmakers tried to enter by force, "it will be necessary to send them to prison"). In a recent development, Ecuadorian legislator Gloria Gallardo who fled to Colombia this week to seek political asylum returned to Ecuador Friday. Upon her arrival at the airport of Guayaquil, her hometown, Gallardo said that during her stay in Colombia she had denounced the political situation in Ecuador, the CRE radio network reported.[4] The Latin American Association of Human Rights President, Juan de Dios Parra, sent a letter April 26 asking the Colombian, Peruvian and U.S. governments to deny the Ecuadorian opposition legislators asylum. The letter said asylum is intended "to protect the security and lives of people who are persecuted for their ideas" and that the legislators’ lives are not in danger.[5]

Correa’s position is supported by Ecuador’s Top Electoral Court, which fired the lawmakers in March and says that it – not the Constitutional Tribunal – has the final say on electoral matters. That court’s president warned that the six constitutional tribunal judges who voted to reinstate the ousted congressmen could be charged with abusing their authority.[6]

In recent declarations, however, Correa insisted the removal of the opposition lawmakers remain in force, but that ‘he opposed the arrest order for the 24 accused of sedition.’ He said that "as the one responsible for the peace of the people," he would tell the authorities to rescind the order.[7]

Implications

The huge support Correa received on April 15, 2007 has given him the legitimacy to convoke a Constituent Assembly to change the Constitution. He will likely pursue other radical reforms including increasing state control over the natural-resource industrial sector. The renegotiation of contracts with private oil and gas firms will give the state a majority stake and increased revenue could begin as soon as this year. In addition, Mr. Correa is not planning to renew the lease on the US’s base in Manta used for drug surveillance flights. (The ten-year lease expires in 2009). About 300 US servicemen and employees work at the base, and the Correa administration has said it considers their presence an affront to Ecuador’s sovereignty. President Correa also insists that it will not renew talks for a free-trade agreement (FTA) with the United States.[8]

Opponents of the president claim he is following in the footsteps of Venezuela’s President, Hugo Chavez, who successfully pushed for the election of a constituent assembly packed with his supporters in 1999. As Chávez in Venezuela, Correa won the elections, and then called for a Constituent Assembly to rewrite the Constitution. Both Presidents have taken control of the courts and have allegedly intimidated business people, journalists and members of the opposition. They have even tried to regulate news organizations. As Mr. Chávez before, Mr. Correa opposes IMF and World Bank policies (He has already expelled the representative of the World Bank in Ecuador for ‘blackmailing’ him when he was Minister of Economy during the Palacio administration). Coincidently, on April 15th, Correa announced that Ecuador had paid off its entire outstanding debt to the International Monetary Fund, which he has long criticized for imposing harsh conditions on borrowing nations, the same day Venezuela finished paying its debt with the mentioned organization. The government still plans to restructure Ecuador’s US$16.5bn foreign debt.[9]

"Correa is trying to fix a mistake with another mistake," said Ramiro Crespo, president of Analytica Securities, an investment bank. "His lack of respect for political institutions is troubling, but Ecuador’s internal conditions may prevent him from getting too far." In contrast to other oil-exporting countries like Venezuela, Ecuador is not benefiting greatly from high oil prices. Economic growth in the last quarter of 2006 slowed to 2.2%, well below the 4% growth in the previous quarter, after output declined in oil fields seized by the government last year from Occidental Petroleum of Los Angeles, which was Ecuador’s largest foreign investor. Confusion over Mr. Correa’s economic policies has also unsettled investors, with banks lending less to builders and other companies.[10]

There are still some challenges for Mr. Correa. Once the Constituent Assembly is formed, the internal battle there could be fierce. Mr. Correa might find it difficult to achieve consensus to push forward the reforms he seeks. Delegates from Ecuador’s traditional parties might battle to maintain their groups’ privileges and authority. Former President Lucio Gutiérrez (ousted by congress in 2005), whose Partido Social Patriótico (PSP) is now the second largest party in Congress, could attempt to use the assembly to build his political power. Also, a high degree of popular mobilization, in the midst of persistent social and regional tensions, as well as weak and divided institutions, will make social unrest and political destabilization ever-present risks.[11]

What is apparently clear is that Mr. Correa and friendly political parties are consolidating their control over the courts and the Legislature. It is likely that the new Constitution will contain many of Correa’s (and Chávez’s) ideas on political and economic matters. Political uncertainty may push investors to seek greener pastures and some might want to get their money out of the country resulting in capital flight. Unemployment and difficulty with tax collection could follow. Popular unrest will increase if social demands are not met.

A new Constitution and a new legislative body do not mean that the country’s problems will disappear. It could be the beginning of a new but unstable era for Ecuador. There are many possible scenarios: the country might be headed for radicalsocialism. Correa might be very close to obtaining more, unchecked and unlimited power in order to change the political and economic structure of the nation according to his beliefs. Another possibility is that if Correa believes he has been given a blank check because of the massive support he received last week and he already sees the opposition as an obstacle to ‘re-found Ecuador,’ then he is likely to adopt an exclusivist and authoritarian type of regime.

[1] Ecuador lawmakers may seek asylum in Colombia. April 25, 2007. CNN.

[2] Ecuador, Ever Unstable, Prepares for New Leader’s Plans. April 14, 2007. The New York Times.

[3] Encuesta a boca de urna en Ecuador. April 15, 2007. El Mercurio, Chile.

[4] Ecuador lawmakers may seek asylum in Colombia. April 25, 2007. CNN.

[5] Ecuador: Deny Legislators Asylum — ALDHU Head. April 26, 2007. Stratfor.

[6] Ecuador’s Congress dismisses top judges. April 24, 2007. CNN.

[7] Lawmakers flee Ecuador in political crisis. April 25, 2007. AFP.

[8] Voters back plans to rewrite the constitution. April 17th 2007. The Economist.

[9] Encuesta a boca de urna en Ecuador. April 16, 2007. El Mercurio, Chile.

[10] Correa to Rewrite Ecuador’s Constitution after Vote. April 15, 2007. Bloomberg.

[11] Voters back plans to rewrite the constitution. April 17th 2007. The Economist.

EADS is Welcome to Compete for U.S. Defense Contracts – But First It Must Clean Up Its Act

The United States relies on an immense, multi-faceted industrial base to meet its defense technology and equipment needs.  One of the most important but least understood parts of this phenomenon is America’s growing reliance upon foreign suppliers to provide military hardware.  Such dependence has the inherent potential to become a grave Achilles’ heel for the world’s preeminent armed forces – unless our overseas suppliers are true defense partners, reliable vendors trustworthy guardians of our technology, and fair competitors who provide the best value for the American taxpayer and the best products for American warfighters.

There are numerous examples of international companies, such as BAE Systems and the engine-maker Rolls Royce, that have demonstrated the promise of global competition.  In turn, these companies have become valued partners in America’s security.

Unfortunately, the same cannot be said at the moment of Europe’s largest aerospace company, the European Aeronautic, Defense and Space (EADS) consortium, which seeks to obtain a major role in the U.S. defense and homeland security market.  Before it is allowed to do so, EADS needs to clean up its act.

Problematic Issues

A would-be partner will be difficult to trust if, for example, its government owner/sponsor and the locus of the corporate headquarters spies on this country, steals its secrets to the detriment of U.S. interests and uses bribery and other chicanery to undermine this country around the world. While EADS may not be directly responsible for such behavior, based on numerous sources – including a former director of the CIA, the U.S. Department of Commerce, and the European Parliament – there is no doubt that one of the governments that has such ties to EADS, France, has been.

Second, it would be dangerous for the United States to rely on the goods and services of a company that is part-owned by the Russian government, and in which Vladimir Putin’s Kremlin wants a say in the management.

Third, Congress will be hard-pressed to justify sending the tax dollars of American workers abroad, to pay subsidized European workers who belong to militantly anti-U.S. labor unions that express hatred of our country and what it stands for, and who back politicians who work within NATO to undermine U.S. defense interests.

Fourth, it is a challenge, at best, to trust a major foreign supplier who deliberately seeks to circumvent U.S. nonproliferation laws and thumbs its nose at Washington while selling military equipment, over the strongest U.S. objections, to America’s current and possibly future adversaries.

So, before EADS can become a U.S. defense partner, it and its owners must first prove themselves worthy of our trust.

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Colombian-American relations

The Menges Hemispheric Security Project was asked to submit a statement for the hearing before the Western Hemisphere Subcommittee of the House Committee on Foreign Relations on US-Colombia Relations. This hearing took place on April 24, 2007 and was held to consider continued funding for Plan Colombia and ratification of a free trade agreement between The United States and Colombia. Our statement clearly supports the recent accomplishments of the Uribe Administration in demobilizing the paramilitaries and encourages members of Congress to move forward with Plan Colombia and FTA.                                                            

NEWS:

  • Colombia’s Uribe slams Gore’s snub. Some call Gore hypocritical. Colombian business people show total support for Uribe after Gore’s snub.
  • Hugo Chavez to indoctrinate workers on Marxism. Thousands protest government closure of TV network. Chavez regulates prices at private hospitals. Moves to expropriate. Chavez to create state power corporation.
  • Political turmoil in Ecuador.
  • Cuba supports Iran’s nuclear plans. Castro’s health better but still delicate. Fidel and Raul receive high ranking Chinese delegation.
  • Paraguay and Venezuela: agreement on refinery.
  • Brazil and Bolivia can’t reach accord one year after oil nationalization.
  • Peru and U.S. solidify relations during Garcia’s visit.
  • Nicaragua : Ortega back Iran nuke program. Nicaragua wants ‘freedom’ from IMF in 5 years, says Ortega.
  • Bolivia retakes gas station; gas exports to Argentina to ease. Bolivia moves closer to Telecom Nationalization.

View the full version of the Americas Report (PDF)

For any questions, comments, or those interested in receiving this report in the future or seeking to have their email removed from our list please contact Nicole M. Ferrand at our new e-mail address: mengesproject@centerforsecuritypolicy.org  If you have news stories that you think might be useful for future editions of this report please send them, with a link to the original website, to the same e-mail address. If you wish to contribute with an article, please send it to the same address, with your name and place of work or study.

The economics of Latin American populism

The financial policies of men like Chavez and Kirchner are costing Americans millions.

Latin America has long ceased to be a primary concern for U.S. foreign policy makers.  Two separate European wars in the last century, as well as the decades-long Cold War, shifted American strategic focus outward, away from the region that had once been foremost in the minds of American strategists.

This trend continues today.  With U.S. policymakers consumed with the fight in Iraq or the fight about Iraq, there is precious little attention being paid to the political radicalism that is on the rise in Latin America.  Recent events show, though, that events in an otherwise marginalized region can have a profound effect on Americans.

[More]For example, in 2005, Argentine President Nestor Kirchner announced that in the face of more than 100 lawsuits over his country’s broken loan contracts, he was repudiating 20 billion dollars foreign debt.  He did so despite Argentina’s documented capability to honor its financial obligations.

The American Task Force Argentina (AFTA) reports that because of Kirchner’s actions, "America’s teachers and educators lost $100 million in retirement savings, because their pension funds held Argentine bonds."  With no word from Buenos Aires that it plans to reconsider its decisions, it seems as if, as AFTA noted in a Wall Street Journal ad, "America’s teachers have learned a harsh lesson in international economics — thanks to Argentina’s unprecedented debt default."

What makes this development all the more worrying is that Kirchner has close ties with Venezuela’s Hugo Chavez, who has been the standard-bearer for anti-Americanism in the region.  Indeed, AFTA claims that they are "one and the same."

In Latin America, Chavez sets the precedent for burning economic bridges to America – he is in the final stages of nationalizing his country’s oil industry, in which American firms like ConocoPhillips, ExxonMobil, and Chevron have a heavy stake.   He has announced that Venezuelan troops will occupy the oil fields beginning May 1st, and has warned foreign companies not to seek "excessive compensation" from his government.

One of Chavez’s cronies, Bolivian President Evo Morales, has taken similar actions.   Last year, he assert state ownership over his country’s natural gas industry, making foreign businesses pay much higher taxes, and dramatically lowering the returns on their investments.

This financial toll of this burgeoning anti-American economic populism is probably going to get worse.  Countries like Nicaragua and Ecuador, both run by men with close allegiances to Chavez, are already heading down the path of anti-foreign statism, with predictable effects on American economic interests in those two countries.

In a disappointing but unsurprising turn of events, many of this country’s social and political luminaries nonetheless have embraced Chavez and his call for quasi-communist populism as a boon for Latin America and America’s working class.  Figures like Cindy Sheehan, Danny Glover, and former U.S. Congressman Joseph Kennedy II have all made pilgrimages to Caracas to boost their credentials as so-called "progressives."  They do this while studiously ignoring that Chavism will only worsen the retirement fund shortfalls many American workers are expected to face.  

These "progressives", along with the Washington policymakers who are doing little to nothing to counter Chavez and his ilk, need to get their priorities straight.   To do otherwise will end up costing American workers dearly.

Freedom’s champions

It was so, well, Soviet.  This weekend’s news clips showed Russian goon squads charging courageous opponents of an authoritarian Kremlin, truncheons flailing, roughing up the dissenters and arresting their leaders.  One of those detained on Saturday was Garry Kasparov, the long-time World Chess Champion and a world-class champion of freedom.

Although Kasparov was subsequently released, his forcible detention is a sign of the extent of Vladimir Putin’s repression and the master of the Kremlin’s confidence that the Free World will not protest, let alone punish, the Russian government’s ever-more aggressive behavior at home and abroad.  If the Kremlin can move with impunity against the most visible, widely admired and gutsy of its critics, no one in Russia is safe.  And the world beyond will become more dangerous, too.

Like the refuseniks of the Soviet Union – storied individuals like Andrei Sakharov, Alexandr Solshenitsyn and Anatoly Sharansky – Mr. Kasparov has been a formidable adversary for a government accustomed to having its own way.  He has written powerful columns in publications like the Wall Street Journal.  He has used his stature as one of history’s best practitioners of chess, the national sport of Russia, to speak truth to power on behalf of millions of his countrymen who have become too intimidated to challenge Putin’s systematic liquidation of what passed for democracy there.

Most recently, Garry Kasparov has entered the political fray, helping to found Other Russia, a somewhat ungainly coalition of parties from the Left and the Right who have joined forces to challenge Vladimir Putin’s creeping totalitarianism and offer a democratic alternative in upcoming elections.  The Kremlin has denounced Other Russia as "destabilizing."  All other things being equal, the state’s violence against the coalition’s demonstrations this weekend and Kasparov’s arrest will be followed by more draconian measures.

But all other things must not be equal.  The Free World and its leader, the United States, must take steps now to help Freedom’s Champions like Garry Kasparov in at least as forceful a way as it did when President Reagan assisted the USSR’s dissidents.  

For starters, Kasparov and others who are taking on the Kremlin’s repressive actions must be raised up by the Bush Administration and Congress as test cases of the Russian government’s worthiness for a place at the table of civilized nations – to say nothing of its inclusion in such company as the G-8 and World Trade Organization.  Today’s refuseniks, like those of yesteryear, are after all canaries in the mineshaft.  If their voices are allowed to be extinguished (in some cases, literally), their oppressors will be emboldened in their menacing behavior towards others, including Western interests.

Even now, the Kremlin is arming to the teeth countries like Communist China and others, notably Hugo Chavez’s Venezuela.  It is enabling Iran’s nuclear ambitions (despite a spat at the moment over payments due Moscow).   It is using energy as a weapon against its neighbors and Europe.  And it is threatening nuclear attacks against Poland and the Czech Republic if they cooperate in U.S.-led missile defense initiatives.

Another, particularly worrisome development is noted in a new paper just released by the Center for Security Policy.  It involves a stealthy Russian government effort to become a major shareholder in, and influence over, the European Aeronautics, Defense and Space (EADS) consortium.  EADS is, in turn, trying to become a major supplier of defense equipment to the Pentagon.  Even under other circumstances, such an arrangement should be considered problematic in the extreme.  In light, however, of what Putin is doing to Freedom’s Champions in Russia and to our friends and interests elsewhere at the moment, it is completely beyond the pale.

As it happens, others who are Freedom’s Champions are being badly treated closer to home.  Last week, I reported that a film about what was happening to courageous anti-Islamist Muslims in the U.S., Canada and Western Europe was being suppressed by the Public Broadcasting Service (PBS).  Unfortunately, that remains the case at this writing – a situation being enabled by the Corporation for Public Broadcasting (CPB), which paid $675,000 in taxpayer funds to make this film but is now cooperating in PBS’s refusal to air it unless the documentary is reworked.

As a partner in the production company that made "Islam vs. Islamists: Voices from the Muslim Center," I have watched with horror as techniques out of Putin’s playbook have been applied to prevent the telling of the story of freedom-loving Muslims who are – like the Kasparovs of Russia – warning about the ominous rise of totalitarian ideologies in their communities, and what that portends for the rest of us.

Matters have been made worse by the replacement of our film in PBS’ "America at a Crossroads" line-up this week by a film produced by the series’ host, Robert MacNeil, as part of a sweetheart deal with PBS and its Washington flagship, WETA.  MacNeil’s documentary is entitled "The Muslim Americans."  It is an appalling, politically correct but disinforming paean to organizations like the Council on American-Islamic Relations (CAIR), the Muslim Student Association (MSA) and others who are part of the Islamist problem in this country, not the solution.

It is time to choose.  Do we stand with those who have the courage to risk everything to oppose the totalitarians and their ideologies?  Or do we stand with their oppressors, in the vain hope that the latter will treat us better?

Latin America’s radical grassroots








 

The logo of Hezbollah in Venezuela


by Dr. Luis Fleischman and Nicole M. Ferrand


 


The emergence of neo-populism in Latin America has coincided with the rise of new leaders promising equality and rejection of the old elites.  It also combines, in numerous cases, with the political mobilization of previously passive populations who lived on the margins of society, often of indigenous origins, who speak different dialects.


 


These new groups have become a most desired political prey for populist leaders willing to climb the political ladder and even carry a revolutionary change. The populations which include the cocaleros (coca leaf growers) in Bolivia or the Confederation of Indigenous Nationalities of Ecuador (CONAIE) indeed have been key players in the election of leaders such as Evo Morales and Rafael Correa. Ollanta Humala in Peru also used the etnocacerista group relatively successfully even though he lost the election.


 


[More]


 


Despite being an interesting political capital for political leaders, some of these new populist movements have an element of independence and do not necessarily blindly follow leaders. One example is the Piquetero Movement in Argentina. Even though some of its leaders have associated themselves with President Nestor Kirchner, they have also taken independent action which, at times has become a problem for the President and at other times is useful and coincides with his purposes.


 


 


Indigenous movements such as the Zapatistas in Mexico, the CONAIE in Ecuador, the radical indigenous movement in Chile, and the landless movement in Brazil represent examples of more independent movements. They represent a feeling of economic and political exclusion and their demands include redistribution of land and expropriation of private property and foreign capital in favor of indigenous cooperatives and other forms of economic autonomy.


  


Often, these new movements tend to be radical, anti-systemic, and are inclined to reject the old political and economic order. In some cases, Indian movements have claimed their status as the majority and therefore claim all the power for themselves. Street protests and challenge of the government as well as rejection of the system and revolutionary unwillingness to compromise also characterize some of these movements.  


 


Of course, such discontent could be capitalized on by demagogue populist leaders, but it can also go beyond. One such example is presented by the Wayuu Guajira Indians who represent the largest indigenous group in Venezuela and Colombia (about 135,000 in Colombia and 170,000 in Venezuela).  On October 23, 2006, the police in Caracas found two explosive devices near the American Embassy. One of the bombs was in a box which also contained propaganda brochures for the Iran-backed organization, Hezbollah. One young man, a student at the Bolivarian University founded by Hugo Chavez, was arrested.[1]


 


An organization called Hezbollah Latin America claimed responsibility for the attack. Hezbollah Latin America is an organization based in the Wayuu Indian population and also calls itself Autonomia Islamica Wayuu (Wayuu Islamic Autonomy). Its website is written in Spanish and Chapateka (a combination of the Wayuu language and Spanish) and claims activity in Argentina, Chile, Colombia, El Salvador and Mexico. But the backbone of the organization is Venezuela. Their website states: “The brief enjoyment of life on earth is selfish. The other life is better for those who follow Allah.” The members of this group are locals and not Muslim in origin and claim to be Shiites, supporters of Hezbollah and Iran.[2]


 


The leader of Hezbollah Latin America is Teodoro Rafael Darnott. Mr. Darnott was initially the leader of a small Marxist faction called The Guaicapuro Movement for National Liberation, (Proyecto Movimiento Guaicaipuro por la Liberacin Nacional – MGLN)” which struggled against the oppression of the poor, indigenous peasants in the Valle de Caracas region. The organization initially proposed a concrete micro- farming project but it failed to obtain support from the authorities. It was then that Darnott decided to join the Chavez political party Movimiento Quinta Republica.[3]


 


It was reported that early in 2004 about 100 Wayuu Indians were massacred by Colombian para-military, guerilla and drug traffickers. These events also pushed hundreds of Wayuu to flee Colombia into Venezuela. It is thought that such genocide was the result of the need to control the drug trafficking ports in the Guajira littoral by the para-military and the guerillas, according to the Colombian army.


 


The organization opens up its website with a set of interesting quotations by the leader of the Islamic revolution, Ayatollah Rhuolla Khomeini. “Our struggle is the struggle against all inequalities. Our struggle is the struggle of the barefoot people against uncontrolled freedom. It is the struggle of the ideological values against the dirty world of power, money and greediness”. Then it proceeds to two other quotations from Khomeini. The first states that “all the political activities are part of a religious duty” and the second points out that the “Koran is not a book of prayer but a manual to organize society and to train its leaders to rule. Islam and Islamic rules are divine and their practices guarantee prosperity in this world and salvation in the world to come. (Islam) can put an end to injustice, tyranny and corruption and help mankind to achieve perfection.”[4]


 


The philosophy of this “new Muslim” group says that the Venezuelan revolution cannot take place unless it takes a path towards the moral and divine. The group claims that Venezuelans worship sex, money, industry and commerce leading society into a “swamp of immorality and corruption”.[5]  Hezbollah Latin America claims that political movements and parties cannot provide an answer to these problems because they are also part of the problem. Thus, only “a theocratic, Political-Islamic force can liberate society from this situation”.[6]


 


Hezbollah Latin America “respects the Venezuelan revolutionary process, and supports its social policies as well as its anti-Zionism and anti-Americanism”, even though it rejects socialism in favor of an Islamic order. The group urges everyone to vote for and support Chavez.[7]


 


Nobody seems to have an answer as to why and how this Wayuu indigenous group came to embrace Hezbollah and why. The first possibility is that Hezbollah has its own independent agenda trying to create terrorist cells and bases of support for their activities aimed at spreading Islam  in the western hemisphere.[8]


 


Some of those covering the events since the October 23rd bombing have tended to downplay the role of Darnott and to question to what extent Hezbollah Latin America is a serious organization. Yet, the phenomenon is worrisome for a number of reasons. First, Hezbollah obviously has ways to either bribe or convert so- called marginal and indigenous groups in Latin America that had already developed anti-system ideologies, and, consequently, have a predisposition to make alliances with other groups that also detest the system and identify with the oppressed. In other words, Hezbollah and radical Islamist groups do not have to import Islamists from the Muslim world; they can be “home-grown” in Latin America, itself, because the social and emotional conditions provide fertile ground. Furthermore, this new available human capital clearly does not have to have any previous connection to Islam, they can be converted to Islam because Islamism is not merely a religion but is foremost a political movement.


 


This method is similar to Islamist methods we find in the U.S. The case of Jose Padilla comes to mind. Padilla, an American citizen of Hispanic ancestry was indoctrinated by Islamists while in prison for common crimes and later charged with terrorist conspiracy. Indigenous populations have been socially marginal and their status is comparable with criminals even though they are not criminals, by definition. Those who have dismissed Mr. Darnott as a mere opportunist have ignored the systematic way in which the message of the organization was put together. The methods of indoctrination use images that are simple and consistent with the totalitarian ideology of the Iranian revolution. 


 


The second possibility worth exploring is that Hugo Chavez is fully cooperating with the Islamization process of indigenous and other populations. Indeed, such conversion is taking place as relations between Venezuela and Iran strengthen at all levels and as Chavez openly supports Iran‘s nuclear program and Hezbollah during the war against Israel. In addition, Chavez has strong sympathies for Islamic groups and has provided safe haven for financial activities benefiting Islamic terrorist organizations. Chavez has given Venezuelan passports to individuals coming from Arab and Muslim countries, and, his administration maintains a very uneasy relationship with the Jewish community as anti-Semitism among Chavista circles becomes more apparent. Chvez is supporting Hezbollah in the Middle East and will most probably support their criminal work in Venezuela.[9]


 


Gustavo Coronel, an opponent of Chavez, reports that in October 2005 Hugo Chavez expelled a group of US Evangelical missionaries who were working with indigenous communities in the area for more than half a century. Coronel reports that as the evangelical groups left Venezuela, Hezbollah occupied the new territory.[10]


 


The presence of Hezbollah Venezuela is worrisome because of the timing of their activities. They have become visible at a moment in which Hugo Chavez and the Iranian President Ahmadinejad have become really close allies. Ahmadinejad visited Caracas in September 2006 and again in January 2007 and the two countries have signed more than 20 cooperation agreements in the fields of oil & gas, iron & steel, and infrastructure worth billions of dollars.[11]


 


As stated in The America’s Report of March 13, 2006, Luis D’Elia, one of the leaders of the Argentinean Piquetero movement and a former member of the Kirchner cabinet, has established both a relationship with Chavez and with the Iranian government. D’Elia, like other Latin American ” social” leaders from Latin America, attended the first Iran- Latin American conference that took place in Tehran on February 27 and 28, 2007. The conference was characterized by a clear ideological agenda with strong anti-American tones and was not attended by the higher echelons of the political system in Latin America but by “social” leaders such as Mr. D’Elia. By the same token, Chavez has been the main promoter of the reinforcement of relations between Iran and Latin America, as he has engaged in deepening relations between Iran and grassroots leaders in the region, mostly those newly mobilized social forces that we described above.[12]


 


It could be said that the road from socialist revolutionarily Marxism to Islam has been paved by no other than Hugo Chavez. Therefore, should we rule out the Darnott episode as a farce? We do not think so. At this point the revolutionary fever led by Hugo Chavez, to mobilize the “politically” available marginal masses of society coupled with the Iranian penetration in the region should raise an eyebrow not only among American government officials but also among those in Latin America.  Given its importance, we will continue to explore the radicalization of indigenous populations in the region.


 


Dr. Luis Fleischman is an advisor to the Menges Hemispheric Security Project at the Center for Security Policy in Washington DC. He is also an adjunct professor of Political Science and Sociology at Wilkes Honor College at Florida Atlantic University.


Nicole M. Ferrand is a research analyst and editor of “The Americas Report” of the Menges Hemispheric Security Project at the Center for Security Policy in Washington DC. She is a graduate of Columbia University in Economics and Political Science with a background in Law from Peruvian University, UNIFE.


[1] The Hezbollah Venezuelan Metastasis. September 4, 2006. Venezuela Today. By Gustavo Coronel.


[2] “La Fascinacin por el xito: Hezbollah en Amrica Latina .” Jihad Monitor. Oct. 17, 2006. Manuel Torres Soriano.


[3] The Hezbollah Venezuelan Metastasis. September 4, 2006. Venezuela Today. By Gustavo Coronel.


[4] Democracy? I meant theocracy. August 5, 2003. The Iranian.


[5] “La Fascinacin por el xito: Hezbollah en Amrica Latina .” Jihad Monitor. Oct. 17, 2006. Manuel Torres Soriano.


[6] Chvez joins the terrorists: his path to martyrdom. September 2, 2006. Venezuela Today. By Gustavo Coronel.


[7] The Hezbollah Venezuelan Metastasis. September 4, 2006. Venezuela Today. By Gustavo Coronel.


[8] Hezbollah America Latina: strange group or real threat? Feb. 12, 2007. By Ely Karmon. Reporter Associati Internacional.


[9] The Other “Axis of Evil.” July 1st, 2003. The American Legion Magazine. By Paul Crespo.


[10] Chvez joins the terrorists: his path to martyrdom. September 2, 2006. Venezuela Today. By Gustavo Coronel.


[11] Gustavo Coronel. The Hezbollah Venezuelan Metastasis.


[12] Jose Orozco, “Venezuelan Jews Fear Chavez-Iran Ties,” The Jerusalem Post, September 19, 2006.

Dangers ahead in Air Force procurement: Aircraft contracts could reward Russia, French espionage and bribery, and other bad behavior

by J. Michael Waller

Globalization has compelled the Pentagon to rely on foreign manufacturers for key elements of the nation’s defense needs. While that is not necessarily a bad thing, it becomes a problem when the U.S. finds that the governments of France and Russia own big chunks of the company that does the supplying – a company that is busily building a grassroots political influence operation to pressure Congress to buy its products.

In addition to transferring taxpayer dollars into the French and Russian treasuries, procurement through a particular European supplier would bail out an aircraft company that got its start through French espionage and bribery, and would pay workers of radical and politically active labor unions that hate the United States. The issues are:

  • The Army/Air Force Joint Cargo Aircraft (JCA). A midrange cargo and troop transporter.
  • The Air Force KC-X airborne tanker. The biggest procurement program in a generation, the KC-X will upgrade the nation’s fleet of antiquated KC-135 tankers.
  • One of the principal bidders on both Pentagon programs: EADS. Based in France, EADS is a French-German-Spanish-Russian aerospace giant that:
    • Used espionage and bribery to compete unfairly with American aircraft manufacturers;
    • Tried to arm Venezuelan dictator Hugo Chavez over highest-level American objections;
    • Plotted to circumvent U.S. nonproliferation law in order to arm Chavez;
    • Needs major Pentagon contracts to bail out its flailing Airbus division.
    • U.S. taxpayer funding of job programs for European socialist labor unions that hate the United States. EADS aircraft production is a huge jobs program for anti-American labor unions that form the backbones of some of Europe’s most powerful socialist parties.
    • U.S. taxpayer subsidizing of the French and Russian governments, which together own more than 20 percent of EADS and could soon end up owning as much as 35 percent.
    • Placing the U.S. military in a situation that would allow Russia to delay or otherwise damage modernization of the Air Force tanker fleet.

No protectionism – but no rewarding bad behavior

JCA program. The issue is not protectionism. No American aircraft manufacturer is competing with the original design the Air Force and Army want for the JCA. The real contest is between two foreign companies. The first is the European Aeronautical, Defence and Space (EADS) corporation, based in France and partly owned by the French, German, Spanish and Russian governments. The second is Alenia/Finmeccanica of Italy. Both European companies have teamed up with American firms to compete for the JCA contract, which is worth between $3 billion and $5 billion initially, but which some say could be as much as $20 billion over the years.

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